Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2023

Allowance for Credit Loss [Abstract]

Summary of Allowance for Credit Losses by Loan Segment

The following tables summarizes the activity in the allowance for credit losses by loan segment for the three and six months ended June 30, 2023.

	Beginning balance		Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended June 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	208	$	—	$	—	$	1		$	209
Construction		813		—		—		(85	)		728
Commercial & industrial		930		—		—		(201	)		729
Commercial real estate
Multifamily		730		—		—		(57	)		673
Owner occupied		1,593		—		—		(34	)		1,559
Non-owner occupied		4,315		—		12		23			4,350
Residential real estate
First liens		1,508		—		27		(138	)		1,397
Second liens and lines of credit		402		—		58		(77	)		383
Municipal		7		—		—		—			7
Consumer		20		—		—		2			22
Unallocated		—		—		—		171			171
Total	$	10,526	$	—	$	97	$	(395	)	$	10,228

	Beginning balance		Impact of adopting ASC 326			Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Six Months Ended June 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—	$	120		$	209
Construction		274		513			—		—		(59	)		728
Commercial & industrial		583		283			—		—		(137	)		729
Commercial real estate
Multifamily		480		340			—		—		(147	)		673
Owner occupied		635		760			—		—		164			1,559
Non-owner occupied		1,116		3,195			—		12		27			4,350
Residential real estate
First liens		1,029		635			—		28		(295	)		1,397
Second liens and lines of credit		218		140			—		59		(34	)		383
Municipal		12		(2	)		—		—		(3	)		7
Consumer		40		(19	)		—		—		1			22
Unallocated		—		—			—		—		171			171
Total	$	4,666	$	5,655		$	—	$	99	$	(192	)	$	10,228

Summary of Amortized Cost Basis of Nonaccrual Loans and Loans Past due Over 89 Days Still Accruing

The following table presents the amortized cost basis of nonaccrual loans and loans past due over 89 days still accruing by segments of the loan portfolio:

	As of June 30, 2023
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Loans past due over 89 days still accruing
Agriculture and farmland	$	505	$	—	$	—
Construction		—		—		—
Commercial & industrial		14		—		51
Commercial real estate
Multifamily		—		—		—
Owner occupied		—		—		—
Non-owner occupied		433		—		—
Residential real estate
First liens		1,246		—		244
Second liens and lines of credit		44		—		98
Municipal		—		—		—
Consumer		51		—		—
Total	$	2,293	$	—	$	393

Summary of Aging Analysis of the Recorded Investment of Past-Due Loans

The following table presents an aging analysis of the recorded investment of past due loans at June 30, 2023.

	June 30, 2023
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total   Loans
Agriculture and farmland	$	—	$	—	$	—	$	—	$	50,552	$	50,552
Construction		94		100		—		194		75,434		75,628
Commercial & industrial		116		—		51		167		104,702		104,869
Commercial real estate
Multifamily		—		—		—		—		113,254		113,254
Owner occupied		133		—		—		133		154,387		154,520
Non-owner occupied		558		—		389		947		253,744		254,691
Residential real estate
First liens		501		224		836		1,561		168,710		170,271
Second liens and lines of credit		68		40		128		236		29,912		30,148
Municipal		—		—		—		—		11,308		11,308
Consumer		5		—		2		7		3,922		3,929
Total	$	1,475	$	364	$	1,406	$	3,245	$	965,925	$	969,170

The following table presents an aging analysis of the recorded investment of past due loans at December 31, 2022.

	December 31, 2022
(In Thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Purchased Credit Impaired Loans		Total   Loans		Total > 90 Days and   Accruing
Agriculture loans	$	193	$	48	$	149	$	390	$	15,201	$	—	$	15,591	$	149
Commercial and PPP loans		111		21		54		186		104,569		—		104,755		54
Commercial real estate loans		863		88		190		1,141		537,546		2,227		540,914		—
Residential real estate loans		2,474		137		1,176		3,787		246,863		182		250,832		540
Consumer loans		254		58		—		312		9,745		—		10,057		—
Municipal loans		—		—		—		—		5,466		—		5,466		—
Total	$	3,895	$	352	$	1,569	$	5,816	$	919,390	$	2,409	$	927,615	$	743

Summary of Classes of the Loan Portfolio Summarized by the Internal Risk Rating System

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of June 30, 2023.

	June 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	249	$	14,082	$	5,260	$	5,272	$	3,514	$	14,586	$	4,402	$	—	$	47,365
Special mention		—		—		—		—		55		194		—		—		249
Substandard or lower		14		—		—		262		—		2,647		15		—		2,938
Total Agriculture and farmland	$	263	$	14,082	$	5,260	$	5,534	$	3,569	$	17,427	$	4,417	$	—	$	50,552
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		12,476		31,172		22,367		924		5,513		1,705		1,377		94		75,628
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Construction		12,476		31,172		22,367		924		5,513		1,705		1,377		94		75,628
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		7,519		14,900		7,916		10,140		2,079		648		56,485		3,639		103,326
Special mention		—		—		183		—		—		474		872		—		1,529
Substandard or lower		—		—		—		—		13		—		1		—		14
Total Commercial & industrial		7,519		14,900		8,099		10,140		2,092		1,122		57,358		3,639		104,869
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Multifamily
Pass		4,853		44,451		44,160		11,401		5,927		410		154		—		111,356
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,898		—		—		1,898
Total Commercial real estate - Multifamily		4,853		44,451		44,160		11,401		5,927		2,308		154		—		113,254
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

	June 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		13,448		64,917		24,647		15,521		21,596		5,812		2,551		—		148,492
Special mention		—		—		1,505		—		1,345		302		328		—		3,480
Substandard or lower		—		—		—		—		2,145		329		74		—		2,548
Total Commercial real estate - Owner occupied		13,448		64,917		26,152		15,521		25,086		6,443		2,953		—		154,520
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		14,835		106,280		58,935		18,576		30,203		13,128		5,737		—		247,694
Special mention		—		—		—		—		6,282		—		—		—		6,282
Substandard or lower		—		—		45		—		140		281		—		249		715
Total Commercial real estate - Non-owner occupied		14,835		106,280		58,980		18,576		36,625		13,409		5,737		249		254,691
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Municipal
Pass		121		29		49		1,758		—		1,895		77		—		3,929
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		121		29		49		1,758		—		1,895		77		—		3,929
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	53,501	$	275,831	$	163,334	$	63,592	$	68,832	$	38,184	$	70,783	$	3,733	$	737,790
Special mention		—		—		1,688		—		7,682		970		1,200		—		11,540
Substandard or lower		14		—		45		262		2,298		5,155		90		249		8,113
Total	$	53,515	$	275,831	$	165,067	$	63,854	$	78,812	$	44,309	$	72,073	$	3,982	$	757,443

The following tables present the amortized cost of these loans based on payment activity, by origination year:

	June 30, 2023
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	12,982	$	42,226	$	48,450	$	20,166	$	9,743	$	29,327	$	5,887	$	—	$	168,781
Nonperforming		—		—		—		105		215		1,170		—		—		1,490
Total Residential real estate - First liens	$	12,982	$	42,226	$	48,450	$	20,271	$	9,958	$	30,497	$	5,887	$	—	$	170,271
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		47		824		710		1,051		197		1,465		25,706		6		30,006
Nonperforming		—		—		—		—		—		30		96		16		142
Total Residential real estate - Second liens and lines of credit		47		824		710		1,051		197		1,495		25,802		22		30,148
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		699		199		83		80		22		26		10,148		—		11,257
Nonperforming		—		2		—		—		49		—		—		—		51
Total Consumer and other		699		201		83		80		71		26		10,148		—		11,308
Consumer and other
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Performing	$	13,728	$	43,249	$	49,243	$	21,297	$	9,962	$	30,818	$	41,741	$	6	$	210,044
Nonperforming		—		2		—		105		264		1,200		96		16		1,683
Total	$	13,728	$	43,251	$	49,243	$	21,402	$	10,226	$	32,018	$	41,837	$	22	$	211,727

Summary of Allowances for Loan Losses by Loan Class

The following table summarizes the activity in the allowance for loan losses by loan class for the three and six month periods ended June 30, 2022.

	Agriculture Loans			Commercial and PPP Loans			Commercial Real Estate Loans			Residential Real Estate Loan			Consumer Loans			Municipal Loans			Unallocated Loans			Total
(In Thousands)	For the Three Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	20		$	585		$	1,070		$	1,728		$	13		$	15		$	12		$	3,443
Charge-offs		—			(1	)		(1	)		—			—			—			—			(2	)
Recoveries		—			5			—			49			—			—			—			54
Provision		(3	)		(83	)		717			(230	)		8			(2	)		(12	)		395
Ending balance	$	17		$	506		$	1,786		$	1,547		$	21		$	13		$	0		$	3,890
(In Thousands)	For the Six Months Ended June 30, 2022
Allowance for loan losses:
Beginning balance	$	23		$	582		$	799		$	1,634		$	22		$	15		$	77		$	3,152
Charge-offs		—			(1	)		(1	)		—			—			—			—			(2	)
Recoveries		—			7			—			56			2			—			—			65
Provision		(6	)		(82	)		988			(143	)		(3	)		(2	)		(77	)		675
Ending balance	$	17		$	506		$	1,786		$	1,547		$	21		$	13		$	0		$	3,890

Summary of Balance of Loans Individually Evaluated vs. Collectively Evaluated for Impairment

The following table illustrates the balance of loans individually evaluated vs. collectively evaluated for impairment at December 31, 2022.

	Agriculture Loans		Commercial and PPP Loans		Commercial Real Estate Loans		Residential Real Estate Loan		Consumer Loans		Municipal Loans		Unallocated Loans		Total
(In Thousands)	As of December 31, 2022
Allowance for loan losses:
Ending balance	$	33	$	583	$	2,462	$	1,536	$	40	$	12	$	—	$	4,666
Ending balance: individually    evaluated for impairment	$	—	$	20	$	—	$	—	$	—	$	—	$	—	$	20
Ending balance: collectively evaluated    for impairment	$	33	$	563	$	2,462	$	1,536	$	40	$	12	$	—	$	4,646
Loans:
Ending balance	$	15,591	$	104,755	$	540,914	$	250,832	$	10,057	$	5,466			$	927,615
Ending balance: individually    evaluated for impairment	$	300	$	55	$	2,306	$	4,652	$	—	$	—			$	7,313
Ending balance: loans acquired with deteriorated credit    quality	$	—	$	—	$	2,227	$	182	$	—	$	—			$	2,409
Ending balance: collectively evaluated    for impairment	$	15,291	$	104,700	$	536,381	$	245,998	$	10,057	$	5,466			$	917,893

Summary of Classes of the Loan Portfolio Summarized by the Internal Risk Rating System

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2022:

(In Thousands)			Special
As of December 31, 2022	Pass		Mention		Substandard		Doubtful		Total
Agriculture loans	$	15,291	$	—	$	300	$	—	$	15,591
Commercial and PPP		101,980		2,721		54		—		104,755
Commercial real estate loans		533,864		2,516		4,534		—		540,914
Residential real estate loans		246,028		207		4,597		—		250,832
Consumer loans		10,057		—		—		—		10,057
Municipal loans		5,466		—		—		—		5,466
Total	$	912,686	$	5,444	$	9,485	$	—	$	927,615

Summary of Impaired Loans

The following tables present the recorded investment and unpaid principal balances for impaired loans and related allowance, if applicable. Also presented are the average recorded investments and the related amount of interest recognized during the time within the period that the impaired loans were impaired.

	As of December 31, 2022
(In Thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Agriculture loans	$	300	$	300	$	—
Commercial loans		35		55		—
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—
Commercial loans		20		20		20
Commercial real estate loans		—		—		—
Residential real estate loans		—		—		—
Consumer loans		—		—		—
Municipal loans		—		—		—
		—		—		—
Total
Agriculture loans	$	300	$	300	$	—
Commercial loans		55		75		20
Commercial real estate loans		2,306		2,312		—
Residential real estate loans		4,652		4,683		—
Consumer loans		—		—		—
Municipal loans		—		—		—
	$	7,313	$	7,370	$	20

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2022				2022
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Agriculture loans	$	237	$	3	$	242	$	6
Commercial loans		4,706		66		4,935		132
Commercial real estate loans		455		4		461		9
Residential real estate loans		3,143		23		3,171		48
Consumer loans		—		—		—		—
Municipal loans		—		—		—		—
		8,541		96		8,809		195
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—	$	—
Commercial loans		—		—		—		—
Commercial real estate loans		—		—		—		—
Residential real estate loans		—		—		—		—
Consumer loans		—		—		—		—
Municipal loans		—		—		—		—
		—		—		—		—
Total	$	8,541	$	96	$	8,809	$	195

Summary of Portfolio of Nonaccrual Loans

The following table presents nonaccrual loans by classes of the loan portfolio:

(In Thousands)	December 31, 2022
Commercial and PPP loans	$	35
Commercial real estate loans		231
Residential real estate loans		1,652
Consumer loans		—
Total	$	1,918