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Loans and Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2025
Loans and Allowance for Credit Losses [Abstract]  
Loans and Allowance for Credit Losses
Note 5: Loans and Allowance for Credit Losses
 
A summary of loans at June 30, 2025 and December 31, 2024, are as follows (dollars in thousands):
 
   
June 30,
2025
    
December 31,
2024
  
             
Construction & development
  
$
192,910
    
$
167,685
  
1 - 4 family real estate
    
125,637
      
121,047
  
Commercial real estate - other
    
554,902
      
511,304
  
Total commercial real estate
  
$
873,449
    
$
800,036
  
                 
Commercial & industrial
    
534,950
      
507,023
  
Agricultural
    
78,126
      
77,922
  
Consumer
    
13,534
      
14,312
  
                 
Gross loans
    
1,500,059
      
1,399,293
  
                 
Less allowance for credit losses
    
(18,222
)
    
(17,918
)
Less deferred loan fees
    
(2,703
)
    
(1,910
)
                 
Net loans
  
$
1,479,134
    
$
1,379,465
  
The following table presents, by portfolio segment, the activity in the allowance for credit losses for the three months ended June 30, 2025 and 2024 (dollars in thousands):

   
Construction &
Development
    
1 - 4 Family
Real Estate
    
Commercial
Real Estate -
Other
    
Commercial
& Industrial
    
Agricultural
    
Consumer
    
Total
  
                                           
June 30, 2025
                                          
Loans
                                          
Balance, beginning of period
  
$
1,330
    
$
1,199
    
$
7,183
    
$
6,939
    
$
1,004
    
$
507
    
$
18,162
  
Charge-offs
    
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Recoveries
    
-
      
-
      
17
      
39
      
1
      
3
      
60
  
Net (charge-offs) recoveries
    
-
      
-
      
17
      
39
      
1
      
3
      
60
  
                                                         
Provision (credit) for credit losses
    
(54
)
    
(100
)
    
203
      
33
      
(54
)
    
(28
)
    
-
  
Balance, end of period
  
$
1,276
    
$
1,099
    
$
7,403
    
$
7,011
    
$
951
    
$
482
    
$
18,222
  
                                                         
Unfunded Commitments
                                                        
Balance, beginning of period
  
$
202
    
$
5
    
$
4
    
$
216
    
$
34
    
$
3
    
$
464
  
Provision (credit) for credit losses
    
(2
)
    
1
      
43
      
(50
)
    
8
      
-
      
-
  
Balance, end of period
  
$
200
    
$
6
    
$
47
    
$
166
    
$
42
    
$
3
    
$
464
  
                                                         
Total allowance for credit losses and reserve for unfunded commitments
  
$
1,476
    
$
1,105
    
$
7,450
    
$
7,177
    
$
993
    
$
485
    
$
18,686
  
Total provision (credit) for credit losses
  
$
(56
)
  
$
(99
)
  
$
246
    
$
(17
)
  
$
(46
)
  
$
(28
)
  
$
-
  

   
Construction &
Development
    
1 - 4 Family
Real Estate
    
Commercial
Real Estate -
Other
    
Commercial
& Industrial
    
Agricultural
    
Consumer
    
Total
  
                                           
June 30, 2024
                                          
Loans
                                          
Balance, beginning of period
  
$
1,417
    
$
1,271
    
$
6,889
    
$
9,242
    
$
628
    
$
249
    
$
19,696
  
                                                         
Charge-offs
    
-
      
-
      
-
      
(2,000
)
    
-
      
-
      
(2,000
)
Recoveries
    
-
      
-
      
-
      
73
      
3
      
-
      
76
  
Net (charge-offs) recoveries
    
-
      
-
      
-
      
(1,927
)
    
3
      
-
      
(1,924
)
                                                         
Provision (credit) for credit losses
    
393
      
220
      
23
      
(714
)
    
67
      
11
      
-
  
Balance, end of period
  
$
1,810
    
$
1,491
    
$
6,912
    
$
6,601
    
$
698
    
$
260
    
$
17,772
  
                                                         
Unfunded Commitments
                                                        
Balance, beginning of period
  
$
158
    
$
4
    
$
8
    
$
280
    
$
11
    
$
3
    
$
464
  
Provision (credit) for credit losses
    
(4
)
    
2
      
2
      
(2
)
    
2
      
-
      
-
  
Balance, end of period
  
$
154
    
$
6
    
$
10
    
$
278
    
$
13
    
$
3
    
$
464
  
                                                         
Total allowance for credit losses and reserve for unfunded commitments
  
$
1,964
    
$
1,497
    
$
6,922
    
$
6,879
    
$
711
    
$
263
    
$
18,236
  
Total provision (credit) for credit losses
  
$
389
    
$
222
    
$
25
    
$
(716
)
  
$
69
    
$
11
    
$
-
  

The following table presents, by portfolio segment, the activity in the allowance for credit losses for the six months ended June 30, 2025 and 2024 (dollars in thousands):

 

  
Construction &
Development
    
1 - 4 Family
Real Estate
    
Commercial
Real Estate -
Other
    
Commercial
& Industrial
    
Agricultural
    
Consumer
    
Total
  
                                           
June 30, 2025
                                          
Loans
                                          
Balance, beginning of period
  
$
1,223
    
$
1,313
    
$
6,992
    
$
6,797
    
$
1,106
    
$
487
    
$
17,918
  
Charge-offs
    
-
      
-
      
(197
)
    
-
      
-
      
(3
)
    
(200
)
Recoveries
    
-
      
-
      
17
      
480
      
4
      
3
      
504
  
Net (charge-offs) recoveries
    
-
      
-
      
(180
)
    
480
      
4
      
-
      
304
  
                                                         
Provision (credit) for credit losses
    
53
      
(214
)
    
591
      
(266
)
    
(159
)
    
(5
)
    
-
  
Balance, end of period
  
$
1,276
    
$
1,099
    
$
7,403
    
$
7,011
    
$
951
    
$
482
    
$
18,222
  
                                                         
Unfunded Commitments
                                                        
Balance, beginning of period
  
$
202
    
$
6
    
$
9
    
$
230
    
$
14
    
$
3
    
$
464
  
Provision (credit) for credit losses
    
(2
)
    
-
      
38
      
(64
)
    
28
      
-
      
-
  
Balance, end of period
  
$
200
    
$
6
    
$
47
    
$
166
    
$
42
    
$
3
    
$
464
  

                                                       
Total allowance for credit losses and reserve for unfunded commitments
  
$
1,476
    
$
1,105
    
$
7,450
    
$
7,177
    
$
993
    
$
485
    
$
18,686
  
Total provision (credit) for credit losses
  
$
51
    
$
(214
)
  
$
629
    
$
(330
)
  
$
(131
)
  
$
(5
)
  
$
-
  

   
Construction &
Development
    
1 - 4 Family
Real Estate
    
Commercial
Real Estate -
Other
    
Commercial
& Industrial
    
Agricultural
    
Consumer
    
Total
  
                                           
June 30, 2024
                                          
Loans
                                          
Balance, beginning of period
  
$
1,417
    
$
1,271
    
$
6,889
    
$
9,237
    
$
628
    
$
249
    
$
19,691
  
Charge-offs
    
-
      
-
      
-
      
(2,000
)
    
-
      
-
      
(2,000
)
Recoveries
    
-
      
-
      
-
      
78
      
3
      
-
      
81
  
Net (charge-offs) recoveries
    
-
      
-
      
-
      
(1,922
)
    
3
      
-
      
(1,919
)
                                                         
Provision (credit) for credit losses
    
393
      
220
      
23
      
(714
)
    
67
      
11
      
-
  
Balance, end of period
  
$
1,810
    
$
1,491
    
$
6,912
    
$
6,601
    
$
698
    
$
260
    
$
17,772
  
                                                         
Unfunded Commitments
                                                        
Balance, beginning of period
  
$
158
    
$
4
    
$
8
    
$
280
    
$
11
    
$
3
    
$
464
  
Provision (credit) for credit losses
    
(4
)
    
2
      
2
      
(2
)
    
2
      
-
      
-
  
Balance, end of period
  
$
154
    
$
6
    
$
10
    
$
278
    
$
13
    
$
3
    
$
464
  

                                                       
Total allowance for credit losses and reserve for unfunded commitments
  
$
1,964
    
$
1,497
    
$
6,922
    
$
6,879
    
$
711
    
$
263
    
$
18,236
  
Total provision (credit) for credit losses
  
$
389
    
$
222
    
$
25
    
$
(716
)
  
$
69
    
$
11
    
$
-
  

Internal Risk Categories
 
Each loan segment is made up of loan categories possessing similar risk characteristics.
 
Risk characteristics applicable to each segment of the loan portfolio are described as follows:
 
Real Estate – The real estate portfolio consists of residential and commercial properties loans.  Residential loans are generally secured by owner occupied 1–4 family residences.  Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers.  Credit risk in these loans can be impacted by economic conditions within the Company’s market areas that might impact either property values or a borrower’s personal income.  Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers.  Commercial real estate loans in this category typically involve larger principal amounts and are repaid primarily from the cash flow of a borrower’s principal business operation, the sale of the real estate or income independent of the loan purpose.  Credit risk in these loans is driven by the creditworthiness of a borrower, property values, the local economy and other economic conditions impacting a borrower’s business or personal income.
 
Commercial & Industrial – The commercial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions.  The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation.  Credit risk in these loans is driven by creditworthiness of a borrower and the economic conditions that impact the cash flow stability from business operations.
 
Agricultural – Loans secured by agricultural assets are generally made for the purpose of acquiring land devoted to crop production, cattle or poultry or the operation of a similar type of business on the secured property.  Sources of repayment for these loans generally include income generated from operations of a business on the property, rental income or sales of the property.  Credit risk in these loans may be impacted by crop and commodity prices, the creditworthiness of a borrower, and changes in economic conditions which might affect underlying property values and the local economies in the Company’s market areas.
 
Consumer – The consumer loan portfolio consists of various term and line of credit loans such as automobile loans and loans for other personal purposes. Residential loans in this category are generally secured by owner occupied 1–4 family residences. Repayment for these types of loans will come from a borrower’s income sources that are typically independent of the loan purpose.  Credit risk is driven by consumer economic factors, such as unemployment and general economic conditions in the Company’s market area and the creditworthiness of a borrower.
Loan grades are numbered 1 through 4.  Grade of 1, or Pass, is considered satisfactory. The grades of 2 and 3, or Watch and Special Mention, respectively, represent loans of lower quality and are considered criticized.  Grade of 4, or Substandard, refers to loans that are classified.
 

 •
Grade 1 (Pass) – These loans generally conform to Bank policies, and are characterized by policy conforming advance rates on collateral, and have well-defined repayment sources. In addition, these credits are extended to borrowers and/or guarantors with a strong balance sheet and either substantial liquidity or a reliable income history.
 

 •
Grade 2 (Watch) – These loans are still considered “Pass” credits; however, various factors such as industry stress, material changes in cash flow or financial conditions, or deficiencies in loan documentation, or other risk issues determined by the Lending Officer, Commercial Loan Committee, or Credit Quality Committee warrant a heightened sense and frequency of monitoring.
 

 •
Grade 3 (Special Mention) – These loans must have observable weaknesses or evidence of imprudent handling or structural issues. The weaknesses require close attention and the remediation of those weaknesses is necessary. No risk of probable loss exists. Credits in this category are expected to quickly migrate to a “2” or a “4” as this is viewed as a transitory loan grade.
 

 •
Grade 4 (Substandard) – These loans are not adequately protected by the sound worth and debt service capacity of the borrower, but may be well secured. They have defined weaknesses relative to cash flow, collateral, financial condition, or other factors that might jeopardize repayment of all of the principal and interest on a timely basis. There is the possibility that a future loss will occur if weaknesses are not remediated.
 
The Company evaluates the definitions of loan grades and the allowance for credit losses methodology on an ongoing basis.  No changes were made to either during the period ended June 30, 2025.
The following tables presents the amortized cost of the Company’s loan portfolio by year of origination based on internal rating category as of June 30, 2025 and December 31, 2024, respectively (dollars in thousands).
 
As of June 30, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Revolving Loans Amortized Cost Basis
    
Total
  
                                                 
Construction & development
                                                
Grade
                                                
1 (Pass)
  
$
27,351
    
$
27,990
    
$
931
    
$
778
    
$
233
    
$
187
    
$
133,554
    
$
191,024
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
-
      
1,323
      
-
      
-
      
-
      
-
      
-
      
1,323
  
4 (Substandard)
    
563
      
-
      
-
      
-
      
-
      
-
      
-
      
563
  
Total construction & development
    
27,914
      
29,313
      
931
      
778
      
233
      
187
      
133,554
      
192,910
  
1 - 4 family real estate
                                                                
Grade
                                                                
1 (Pass)
    
37,935
      
33,154
      
25,558
      
10,845
      
5,444
      
5,099
      
7,602
      
125,637
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
4 (Substandard)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total 1 - 4 family real estate
    
37,935
      
33,154
      
25,558
      
10,845
      
5,444
      
5,099
      
7,602
      
125,637
  
Commercial real estate - other
                                                                
Grade
                                                                
1 (Pass)
    
184,425
      
93,118
      
103,046
      
112,648
      
16,917
      
12,331
      
23,429
      
545,914
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
-
      
7,468
      
-
      
-
      
-
      
-
      
-
      
7,468
  
4 (Substandard)
    
1,429
      
-
      
-
      
-
      
-
      
91
      
-
      
1,520
  
Total commercial real estate - other
    
185,854
      
100,586
      
103,046
      
112,648
      
16,917
      
12,422
      
23,429
      
554,902
  
Commercial and industrial
                                                                
Grade
                                                                
1 (Pass)
    
135,678
      
77,705
      
35,127
      
26,766
      
3,154
      
5,342
      
225,290
      
509,062
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
18,389
      
724
      
-
      
-
      
-
      
-
      
125
      
19,238
  
4 (Substandard)
    
-
      
5,372
      
-
      
-
      
-
      
-
      
1,278
      
6,650
  
Total commercial and industrial
    
154,067
      
83,801
      
35,127
      
26,766
      
3,154
      
5,342
      
226,693
      
534,950
  
Agricultural
                                                                
Grade
                                                                
1 (Pass)
    
18,971
      
22,025
      
4,655
      
4,201
      
5,592
      
1,838
      
17,865
      
75,147
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
1,979
      
-
      
-
      
-
      
-
      
-
      
1,000
      
2,979
  
4 (Substandard)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total agricultural
    
20,950
      
22,025
      
4,655
      
4,201
      
5,592
      
1,838
      
18,865
      
78,126
  
Consumer
                                                                
Grade
                                                                
1 (Pass)
    
2,732
      
2,952
      
1,181
      
583
      
1,125
      
2,990
      
1,971
      
13,534
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
4 (Substandard)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total consumer
    
2,732
      
2,952
      
1,181
      
583
      
1,125
      
2,990
      
1,971
      
13,534
  
                                                                 
Total loans held for investment
  
$
429,452
    
$
271,831
    
$
170,498
    
$
155,821
    
$
32,465
    
$
27,878
    
$
412,114
    
$
1,500,059
  
As of December 31, 2024
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Revolving Loans Amortized Cost Basis
    
Total
  
                                                 
Construction & development
                                                
Grade
                                                
1 (Pass)
  
$
40,129
    
$
6,197
    
$
2,042
    
$
370
    
$
104
    
$
111
    
$
116,910
    
$
165,863
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
1,259
      
-
      
-
      
-
      
-
      
-
      
-
      
1,259
  
4 (Substandard)
    
563
      
-
      
-
      
-
      
-
      
-
      
-
      
563
  
Total construction & development
    
41,951
      
6,197
      
2,042
      
370
      
104
      
111
      
116,910
      
167,685
  
1 - 4 family real estate
                                                                
Grade
                                                                
1 (Pass)
    
56,013
      
31,274
      
13,488
      
6,381
      
3,729
      
1,920
      
8,242
      
121,047
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
4 (Substandard)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total 1 - 4 family real estate
    
56,013
      
31,274
      
13,488
      
6,381
      
3,729
      
1,920
      
8,242
      
121,047
  
Commercial real estate - other
                                                                
Grade
                                                                
1 (Pass)
    
124,421
      
141,303
      
137,497
      
18,352
      
14,589
      
5,323
      
57,350
      
498,835
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
7,493
      
-
      
-
      
-
      
-
      
-
      
-
      
7,493
  
4 (Substandard)
    
4,426
      
447
      
-
      
-
      
-
      
103
      
-
      
4,976
  
Total commercial real estate - other
    
136,340
      
141,750
      
137,497
      
18,352
      
14,589
      
5,426
      
57,350
      
511,304
  
Commercial and industrial
                                                                
Grade
                                                                
1 (Pass)
    
126,745
      
78,446
      
41,532
      
3,608
      
1,049
      
3,736
      
238,396
      
493,512
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
558
      
-
      
-
      
-
      
-
      
-
      
3,259
      
3,817
  
4 (Substandard)
    
9,417
      
-
      
-
      
-
      
-
      
-
      
277
      
9,694
  
Total commercial and industrial
    
136,720
      
78,446
      
41,532
      
3,608
      
1,049
      
3,736
      
241,932
      
507,023
  
Agricultural
                                                                
Grade
                                                                
1 (Pass)
    
31,491
      
6,308
      
4,741
      
6,135
      
1,823
      
1,140
      
23,258
      
74,896
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
201
      
-
      
-
      
-
      
1,831
      
-
      
994
      
3,026
  
4 (Substandard)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total agricultural
    
31,692
      
6,308
      
4,741
      
6,135
      
3,654
      
1,140
      
24,252
      
77,922
  
Consumer
                                                                
Grade
                                                                
1 (Pass)
    
4,904
      
1,866
      
771
      
1,358
      
1,689
      
2,020
      
1,704
      
14,312
  
2 (Watch)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
3 (Special Mention)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
4 (Substandard)
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total consumer
    
4,904
      
1,866
      
771
      
1,358
      
1,689
      
2,020
      
1,704
      
14,312
  
                                                                 
Total loans held for investment
  
$
407,620
    
$
265,841
    
$
200,071
    
$
36,204
    
$
24,814
    
$
14,353
    
$
450,390
    
$
1,399,293
  
The following tables presents the gross charge-offs of the Company’s loan portfolio by year of origination based on internal rating category for the six months ended June 30, 2025 and June 30, 2024, respectively (dollars in thousands).
 
For the six months ended June 30, 2025
  
2025
    
2024
    
2023
    
2022
    
2021
    
Prior
    
Revolving Loans Amortized Cost Basis
    
Total
  
                                                 
Construction & development
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
1 - 4 family real estate
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Commercial real estate - other
    
-
      
197
      
-
      
-
      
-
      
-
      
-
      
197
  
Commercial and industrial
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Agricultural
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Consumer
    
-
      
3
      
-
      
-
      
-
      
-
      
-
      
3
  
Total current-period gross charge-offs
  
$
-
    
$
200
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
200
  

 
For the six months ended June 30, 2024
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Revolving Loans Amortized Cost Basis
    
Total
  
                                                 
Construction & development
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
1 - 4 family real estate
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Commercial real estate - other
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Commercial and industrial
    
-
      
2,000
      
-
      
-
      
-
      
-
      
-
      
2,000
  
Agricultural
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Consumer
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total current-period gross charge-offs
  
$
-
    
$
2,000
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
2,000
  
Aged Analysis of Past Due Loans Receivable
 
The following table presents the Company’s loan portfolio aging analysis of the recorded investment in loans as of June 30, 2025 and December 31, 2024 (dollars in thousands):
 
   
Past Due
                
Total Loans
> 90 Days &
Accruing
  
     
30–59
Days
   
   
60–89
Days
   
 
Greater than
90 Days
   
   
Total
   
   
Current
   
 
Total
Loans
   
   
   

 
                                               
June 30, 2025
                                              
Construction & development
  
$
104
    
$
-
    
$
-
    
$
104
    
$
192,806
    
$
192,910
    
$
-
  
1 - 4 family real estate
    
-
      
-
      
-
      
-
      
125,637
      
125,637
      
-
  
Commercial real estate - other
    
91
      
-
      
-
      
91
      
554,811
      
554,902
      
-
  
Commercial & industrial
    
-
      
1,815
      
3,487
      
5,302
      
529,648
      
534,950
      
-
  
Agricultural
    
-
      
-
      
-
      
-
      
78,126
      
78,126
      
-
  
Consumer
    
-
      
-
      
6
      
6
      
13,528
      
13,534
      
6
  
                                                         
Total
  
$
195
    
$
1,815
    
$
3,493
    
$
5,503
    
$
1,494,556
    
$
1,500,059
    
$
6
  
                                                         
                                                         
December 31, 2024
                                                        
Construction & development
  
$
-
    
$
-
    
$
-
    
$
-
    
$
167,685
    
$
167,685
    
$
-
  
1 - 4 family real estate
    
-
      
-
      
-
      
-
      
121,047
      
121,047
      
-
  
Commercial real estate - other
    
103
      
-
      
3,426
      
3,529
      
507,775
      
511,304
      
-
  
Commercial & industrial
    
403
      
5
      
-
      
408
      
506,615
      
507,023
      
-
  
Agricultural
    
-
      
-
      
-
      
-
      
77,922
      
77,922
      
-
  
Consumer
    
97
      
-
      
-
      
97
      
14,215
      
14,312
      
-
  
                                                         
Total
  
$
603
    
$
5
    
$
3,426
    
$
4,034
    
$
1,395,259
    
$
1,399,293
    
$
-
  
Nonaccrual Loans
 
The following table presents information regarding nonaccrual loans as of June 30, 2025 and December 31, 2024 (dollars in thousands):
 
   
With an Allowance
    
No Allowance
    
Total Non-
Accrual
Loans
    
Related
Allowance
  
June 30, 2025
                        
Construction & development
  
$
-
    
$
-
    
$
-
    
$
-
  
1 - 4 Family real estate
    
-
      
-
      
-
      
-
  
Commercial real estate - other
    
-
      
91
      
91
      
-
  
Commercial & industrial
    
70
      
5,302
      
5,372
      
70
  
Agricultural
    
-
      
-
      
-
      
-
  
Consumer
    
-
      
-
      
-
      
-
  
                                 
Total
  
$
70
    
$
5,393
    
$
5,463
    
$
70
  

   
With an Allowance
    
No Allowance
    
Total Non-
Accrual
Loans
    
Related
Allowance
  
December 31, 2024
                        
Construction & development
  
$
-
    
$
-
    
$
-
    
$
-
  
1 - 4 Family real estate
    
-
      
-
      
-
      
-
  
Commercial real estate - other
    
2,980
      
550
      
3,530
      
217
  
Commercial & industrial
    
83
      
3,557
      
3,640
      
83
  
Agricultural
    
-
      
-
      
-
      
-
  
Consumer
    
-
      
-
      
-
      
-
  
                                 
Total
  
$
3,063
    
$
4,107
    
$
7,170
    
$
300
  
Collateral Dependent Loans
 
A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. During the three months ended June 30, 2025 and 2024, no material amount of interest income was recognized on collateral-dependent loans subsequent to their classification as collateral-dependent.  At a minimum, the estimated value of the collateral for loan equals the current book value.
 
The following table summarizes collateral-dependent gross loans held for investment by collateral type and the related specific allocation as follows (dollars in thousands):
 
   
Collateral Type
              
   
Real Estate
    
Business
Assets
    
Total
    
Specific
Allocation
  
                         
June 30, 2025
                        
Construction & development
  
$
-
    
$
563
    
$
563
    
$
-
  
1 - 4 Family real estate
    
-
      
-
      
-
      
-
  
Commercial real estate - other
    
1,429
      
91
      
1,520
      
-
  
Commercial & industrial
    
-
      
6,579
      
6,579
      
-
  
Agricultural
    
-
      
-
      
-
      
-
  
Consumer
    
-
      
-
      
-
      
-
  
                                 
Total
  
$
1,429
    
$
7,233
    
$
8,662
    
$
-
  

   
Collateral Type
              
   
Real Estate
    
Business
Assets
    
Total
    
Specific
Allocation
  
                         
December 31, 2024
                        
Construction & development
  
$
-
    
$
563
    
$
563
    
$
-
  
1 - 4 Family real estate
    
-
      
-
      
-
      
-
  
Commercial real estate - other
    
4,426
      
550
      
4,976
      
217
  
Commercial & industrial
    
-
      
9,609
      
9,609
      
-
  
Agricultural
    
-
      
-
      
-
      
-
  
Consumer
    
-
      
-
      
-
      
-
  
                                 
Total
  
$
4,426
    
$
10,722
    
$
15,148
    
$
217
  
Loan Modifications to Borrowers Experiencing Financial Difficulty
 
As part of the Company’s ongoing risk management practices, the Company attempts to work with borrowers when necessary to extend or modify loan terms to better align with their current ability to repay. Modifications could include extension of the maturity date, reductions of the interest rate, reduction or forgiveness of accrued interest, or principal forgiveness. Combinations of these modifications may also be made for individual loans. Extensions and modifications to loans are made in accordance with internal policies and guidelines which conform to regulatory guidance. Principal reductions may be made in limited circumstances, typically for specific commercial loan workouts, and in the event of borrower bankruptcy. Each occurrence is unique to the borrower and is evaluated separately. A change to the allowance for credit losses is generally not recorded upon modification because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance methodology.

The assessment of whether a borrower is experiencing financial difficulty can be subjective in nature and management’s judgment may be required in making this determination. The Company may determine that a borrower is experiencing financial difficulty if the borrower is currently in default on any of its debt, or if it is probable that a borrower may default in the foreseeable future absent a modification. Many aspects of a borrower’s financial situation are assessed when determining whether they are experiencing financial difficulty.

During the three months ended June 30, 2025, the Company modified two loans for borrowers experiencing financial difficulty. One of these modifications involved a construction and development loan and the other involved a commercial real estate loan, both of which were modified with a term extension. As of June 30, 2025, the period-end amortized cost basis of these modified loans was as follows:

 •
The modified construction and development loan had an amortized cost basis of $1.3 million, representing 0.7% of the total construction and development loan portfolio.

•
The modified commercial real estate loan had an amortized cost basis of $2.7 million, representing 0.5% of the total commercial real estate loan portfolio.

During the six months ended June 30, 2025, the Company modified eight loans for borrowers experiencing financial difficulty. Six of these modifications were related to a single borrower relationship and consisted of one construction and development loan and five commercial and industrial loans, all of which received term extensions. The remaining two modifications involved one commercial real estate loan and one commercial and industrial loan, both of which received a term extension and a payment delay. As of June 30, 2025, the period-end amortized cost basis of these modified loans was as follows:

 •
The modified construction and development loan had an amortized cost basis of $1.3 million, representing 0.7% of the total construction and development loan portfolio.

•
The modified commercial real estate loan had an amortized cost basis of $2.7 million, representing 0.5% of the total commercial real estate loan portfolio.

•
The modified commercial and industrial loans had a combined amortized cost basis of $4.3 million, representing 0.8% of the total commercial and industrial loan portfolio.

The Company closely monitors the performance of loans modified for borrowers experiencing financial difficulty. There were no loans modified for borrowers experiencing financial difficulty that subsequently defaulted during the 12-month period ended June 30, 2025.