Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Allowance for Credit Loss [Abstract]

Summary of Allowance for Credit Losses by Loan Segment

The following tables summarize the activity in the allowance for credit losses by loan segment for the three and nine months ended September 30, 2023.

	Beginning balance		Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Three Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	209	$	—	$	—	$	(130	)	$	79
Construction		728		—		—		(275	)		453
Commercial & industrial		729		—		—		126			855
Commercial real estate
Multifamily		673		—		—		(254	)		419
Owner occupied		1,559		—		—		197			1,756
Non-owner occupied		4,350		—		—		(220	)		4,130
Residential real estate
First liens		1,397		—		11		44			1,452
Second liens and lines of credit		383		—		1		(58	)		326
Municipal		7		—		—		—			7
Consumer		22		—		—		2			24
Unallocated		171		—		—		292			463
Total	$	10,228	$	—	$	12	$	(276	)	$	9,964

	Beginning balance		Impact of adopting ASC 326			Charge-offs		Recoveries		Provision for credit losses			Ending balance
(In Thousands)	For the Nine Months Ended September 30, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—	$	(10	)	$	79
Construction		274		513			—		—		(334	)		453
Commercial & industrial		583		283			—		1		(12	)		855
Commercial real estate
Multifamily		480		340			—		—		(401	)		419
Owner occupied		635		760			—		—		361			1,756
Non-owner occupied		1,116		3,195			—		—		(181	)		4,130
Residential real estate
First liens		1,029		635			—		50		(262	)		1,452
Second liens and lines of credit		218		140			—		60		(92	)		326
Municipal		12		(2	)		—		—		(3	)		7
Consumer		40		(19	)		—		—		3			24
Unallocated		—		—			—		—		463			463
Total	$	4,666	$	5,655		$	—	$	111	$	(468	)	$	9,964

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 September 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	$	—	$	—	$	—
Construction		—		—		192
Commercial & industrial		13		—		110
Commercial real estate
Multifamily		—		—		—
Owner occupied		—		—		—
Non-owner occupied		292		140		558
Residential real estate
First liens		1,357		—		112
Second liens and lines of credit		43		—		90
Municipal		—		—		—
Consumer		50		—		1
Total	$	1,755	$	140	$	1,063

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 September 30, 2023.

	September 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	$	291	$	—	$	—	$	291	$	50,293	$	50,584
Construction		—		—		192		192		65,644		65,836
Commercial & industrial		202		—		122		324		115,248		115,572
Commercial real estate
Multifamily		—		—		—		—		111,853		111,853
Owner occupied		137		—		—		137		160,792		160,929
Non-owner occupied		—		—		947		947		256,397		257,344
Residential real estate
First liens		1,096		101		592		1,789		170,692		172,481
Second liens and lines of credit		97		4		96		197		27,673		27,870
Municipal		—		—		—		—		11,869		11,869
Consumer		4		—		3		7		4,130		4,137
Total	$	1,827	$	105	$	1,952	$	3,884	$	974,591	$	978,475

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 September 30, 2023.

	September 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	$	641	$	13,880	$	5,073	$	5,228	$	3,089	$	15,107	$	4,213	$	46	$	47,277
Special mention		—		—		—		—		45		192		242		—		479
Substandard or lower		14		—		16		129		—		2,612		57		—		2,828
Total Agriculture and farmland	$	655	$	13,880	$	5,089	$	5,357	$	3,134	$	17,911	$	4,512	$	46	$	50,584
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Construction		17,080		23,430		17,020		912		5,428		1,498		375		93		65,836
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		6,765		14,505		7,258		9,606		1,657		1,045		73,096		110		114,042
Special mention		—		—		161		—		—		—		914		—		1,075
Substandard or lower		—		—		51		—		203		—		200		1		455
Total Commercial & industrial		6,765		14,505		7,470		9,606		1,860		1,045		74,210		111		115,572
Commercial & industrial
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Multifamily
Pass		5,226		44,619		42,805		11,307		5,858		—		153		—		109,968
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		1,885		—		—		1,885
Total Commercial real estate - Multifamily		5,226		44,619		42,805		11,307		5,858		1,885		153		—		111,853
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

	September 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		14,164		66,271		24,299		14,821		21,357		5,767		3,051		6		149,736
Special mention		—		—		1,490		—		6,591		—		295		—		8,376
Substandard or lower		—		—		—		—		2,423		320		74		—		2,817
Total Commercial real estate - Owner occupied		14,164		66,271		25,789		14,821		30,371		6,087		3,420		6		160,929
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		20,178		113,886		59,008		18,565		25,778		13,105		5,834		—		256,354
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		43		—		140		558		—		249		990
Total Commercial real estate - Non-owner occupied		20,178		113,886		59,051		18,565		25,918		13,663		5,834		249		257,344
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Municipal
Pass		266		—		220		1,677		—		1,877		97		—		4,137
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Municipal		266		—		220		1,677		—		1,877		97		—		4,137
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	64,320	$	276,591	$	155,683	$	62,116	$	63,167	$	38,399	$	86,819	$	255	$	747,350
Special mention		—		—		1,651		—		6,636		192		1,451		—		9,930
Substandard or lower		14		—		110		129		2,766		5,375		331		250		8,975
Total	$	64,334	$	276,591	$	157,444	$	62,245	$	72,569	$	43,966	$	88,601	$	505	$	766,255

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

	September 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	$	14,757	$	40,742	$	51,889	$	20,584	$	9,512	$	27,507	$	6,021	$	—	$	171,012
Nonperforming		—		—		—		104		211		1,154		—		—		1,469
Total Residential real estate - First liens	$	14,757	$	40,742	$	51,889	$	20,688	$	9,723	$	28,661	$	6,021	$	—	$	172,481
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		75		766		440		130		194		1,256		24,876		—		27,737
Nonperforming		—		—		—		—		—		29		90		14		133
Total Residential real estate - Second liens and lines of credit		75		766		440		130		194		1,285		24,966		14		27,870
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Consumer and other
Performing		1,930		169		70		70		17		9		9,553		—		11,818
Nonperforming		—		2		—		—		48		—		1		—		51
Total Consumer and other		1,930		171		70		70		65		9		9,554		—		11,869
Consumer and other
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Performing	$	16,762	$	41,677	$	52,399	$	20,784	$	9,723	$	28,772	$	40,450	$	—	$	210,567
Nonperforming		—		2		—		104		259		1,183		91		14		1,653
Total	$	16,762	$	41,679	$	52,399	$	20,888	$	9,982	$	29,955	$	40,541	$	14	$	212,220

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 nine month periods ended September 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 September 30, 2022
Allowance for loan losses:
Beginning balance	$	17	$	506		$	1,786		$	1,547		$	21	$	13	$	—		$	3,890
Charge-offs		—		—			—			—			—		—		—			—
Recoveries		—		25			—			139			—		—		—			164
Provision		21		96			427			(43	)		12		2		—			515
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569
(In Thousands)	For the Nine Months Ended September 30, 2022
Allowance for loan losses:
Beginning balance	$	23	$	582		$	799		$	1,634		$	22	$	15	$	77		$	3,152
Charge-offs		—		(1	)		(1	)		—			—		—		—			(2	)
Recoveries		—		32			—			195			2		—		—			229
Provision		15		14			1,415			(186	)		9		—		(77	)		1,190
Ending balance	$	38	$	627		$	2,213		$	1,643		$	33	$	15	$	-		$	4,569

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 September 30,				For the Nine Months Ended September 30,
	2022				2022
(In Thousands)	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Agriculture loans	$	133	$	5	$	210	$	8
Commercial loans		37		—		35		—
Commercial real estate loans		2,421		65		2,451		100
Residential real estate loans		2,986		36		3,048		57
Consumer loans		—		—		—		—
Municipal loans		—		—		—		—
		5,577		106		5,744		165
With an allowance recorded:
Agriculture loans	$	—	$	—	$	—	$	—
Commercial loans		—		—		—		—
Commercial real estate loans		—		—		—		—
Residential real estate loans		174		3		175		5
Consumer loans		2		—		2		—
Municipal loans		—		—		—		—
		176		3		177		5
Total	$	5,753	$	109	$	5,921	$	170

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