The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The loan segments used are consistent with the internal reports evaluated by the Company’s management and Board of Directors to monitor risk and performance within various segments of its loan portfolio and, therefore, no further disaggregation is considered necessary. The Company’s loan portfolio consists primarily of real estate loans on commercial and residential property. The portfolio also includes agricultural loans, commercial loans, municipal loans, and consumer loans.

The Company’s primary lending activity is the origination of commercial loans extended to small and mid-sized commercial and industrial entities.

Commercial loans are primarily underwritten on the basis of the borrowers’ ability to service such debt from income. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. As a general practice, the Company takes as collateral a security interest in any equipment, or other chattel, although loans may also be made on an unsecured basis. Collateralized working capital loans typically are secured by short-term assets whereas long-term loans are primarily secured by long-term assets.

Construction and Land loans are to finance the construction of owner-occupied and income producing properties. These loans are categorized within commercial or one-to-four family residential loans based upon the underlying collateral and intended use following the completion of the construction period. Real estate development and construction loans are approved based on an analysis of the borrower and guarantor, the viability of the project and on an acceptable percentage of the appraised value of the property securing the loan. Construction loan funds are disbursed periodically based on the percentage of construction or development completed. The Company carefully monitors these loans with on-site inspections and requires the receipt of lien waivers on funds advanced. The Company considers the market conditions and feasibility of proposed projects, the financial condition and reputation of the borrower and guarantors, the amount of the borrower’s equity in the project, independent appraisals, cost estimates and pre-construction sale information. The Company also makes loans on occasion for the purchase of land for future development by the borrower. Land loans are extended for the future development for either commercial or residential use by the borrower. The Company carefully analyzes the intended use of the property and the viability thereof.

The Company’s commercial real estate loans consist of mortgage loans secured by nonresidential real estate, such as by apartment buildings, small office buildings, and owner-occupied properties. Commercial real estate loans are secured by the subject property and are underwritten based on loan to value limits, cash flow coverage and general creditworthiness of the obligors. These loans tend to involve larger loan balances and their repayment is typically dependent upon the successful operation and management of the underlying real estate.

Residential real estate loans are underwritten based on the borrower’s repayment capacity and source, value of the underlying property, credit history and stability. These loans are secured by a first or second mortgage on the borrower’s principal residence or their second/vacation home (excluding investment/rental property).

In addition to the main types of loans discussed above, the Company also originates agricultural loans, consumer loans, and municipal loans. The agricultural loan portfolio consists of loans to local farmers and agricultural businesses that are generally secured by farmland and equipment. The consumer loan portfolio consists of lending in the form of home equity loans secured by financed property and personal consumer loans, which may be secured or unsecured. The municipal loan portfolio consists of loans to qualified local municipalities, which are generally supported by the taxing authority of the borrowing municipality, and is frequently secured by collateral.

Management systematically monitors the loan portfolio and the appropriateness of the allowance for credit losses on a quarterly basis to provide for expected losses inherent in the portfolio. For segments determined by discounted cash flow analysis, the Company's estimate of future economic conditions utilized in its estimate is primarily dependent on the Federal Open Market Committee's forecasts related to Real Gross Domestic Product and Unemployment rate. For segments determined by the remaining life method, an average loss rate is generally calculated based on peer losses and applied to the future outstanding loan balances at quarter end.

Certain qualitative factors are then added to the historical allocation percentage to get the adjusted factor to be applied to non-classified loans. The following qualitative factors are analyzed for each portfolio segment:

These qualitative factors are reviewed each quarter and adjusted based upon relevant changes within the portfolio.

The total allowance reflects management’s estimate of credit losses inherent in the loan portfolio at the Consolidated Balance Sheet date. The Company considers the allowance for credit losses adequate to cover expected credit losses in the loan portfolio at December 31, 2024.

The following tables summarize the activity in the allowance for credit losses by loan segment for the year ended December 31, 2024.


	Beginning balance		Charge-offs			Recoveries		Allowance for Credit Losses on PCD Acquired Loans			Provision for credit losses			Ending balance
(In Thousands)	For the Year Ended December 31, 2024
Allowance for credit losses:
Agriculture and farmland	$	12	$	—		$	—	$	—		$	(1	)	$	11
Construction		959		—			4		—			(70	)		893
Commercial & industrial		2,940		(152	)		89		—			1,216			4,093
Commercial real estate
Multifamily		1,483		—			2		—			320			1,805
Owner occupied		6,572		(29	)		1		—			(933	)		5,611
Non-owner occupied		5,773		(54	)		11		2,300			1,315			9,345
Residential real estate
First liens		4,778		(4	)		26		—			(1,405	)		3,395
Second liens and lines of credit		1,072		(9	)		14		—			77			1,154
Municipal		79		—			—		—			(31	)		48
Consumer and other loans		99		(185	)		12		—			154			80
Total	$	23,767	$	(433	)	$	159	$	2,300		$	642		$	26,435

	Beginning balance		Impact of adopting ASC 326			Allowance for Credit Losses on PCD Acquired Loans		Charge-offs			Recoveries			Provision for credit losses			Ending balance
(In Thousands)	For the Year Ended December 31, 2023
Allowance for credit losses:
Agriculture and farmland	$	279	$	(190	)	$	—	$	—		$	—		$	(77	)	$	12
Construction		274		513			39		—			—			133			959
Commercial & industrial		583		283			303		(200	)		1			1,970			2,940
Commercial real estate
Multifamily		480		340			97		—			—			566			1,483
Owner occupied		635		760			1,816		—			—			3,361			6,572
Non-owner occupied		1,116		3,195			1,937		—			—			(475	)		5,773
Residential real estate
First liens		1,029		635			42		—			54			3,018			4,778
Second liens and lines of credit		218		140			64		—			61			589			1,072
Municipal		12		(2	)		—		—			—			69			79
Consumer and other loans		40		(19	)		5		—			—			73			99
Total	$	4,666	$	5,655		$	4,303	$	(200	)	$	116		$	9,227		$	23,767

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 December 31, 2024
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Total Nonaccrual		Loans 90 days or greater past due still accruing
Agriculture and farmland	$	—	$	—	$	—	$	—
Construction		9		—		9		157
Commercial & industrial		125		7		132		—
Commercial real estate
Multifamily		—		—		—		—
Owner occupied		6,171		3,581		9,752		—
Non-owner occupied		398		3,931		4,329		—
Residential real estate
First liens		1,975		—		1,975		289
Second liens and lines of credit		482		—		482		—
Municipal		—		—		—		—
Consumer and other loans		—		—		—		48
Total	$	9,160	$	7,519	$	16,679	$	494

	As of December 31, 2023
(In Thousands)	Nonaccrual with No Allowance for Credit Loss		Nonaccrual with a related Allowance for Credit Loss		Total Nonaccrual		Loans 90 days or greater past due still accruing
Agriculture and farmland	$	—	$	—	$	—	$	—
Construction		191		—		191		—
Commercial & industrial		53		8		61		58
Commercial real estate
Multifamily		—		—		—		—
Owner occupied		2,465		83		2,548		6
Non-owner occupied		948		281		1,229		—
Residential real estate
First liens		2,346		361		2,707		149
Second liens and lines of credit		294		—		294		—
Municipal		—		—		—		—
Consumer and other loans		7		—		7		—
Total	$	6,304	$	733	$	7,037	$	213

The Company recognized $605 and $124 of interest income on nonaccrual loans during the year ended December 31, 2024 and 2023, respectively.

The following table presents, by class of loans, the carrying value of collateral dependent nonaccrual loans and type of collateral as of December 31, 2024 and 2023.


	December 31, 2024
(In Thousands)	Real Estate		Business Assets		Other		Total
Agriculture and farmland loans	$	—	$	—	$	—	$	—
Construction		9		—		—		9
Commercial & industrial loans		—		132		—		132
Commercial real estate loans
Multifamily		—		—		—		—
Owner occupied		9,752		—		—		9,752
Non-owner occupied		4,329		—		—		4,329
Residential real estate loans
First liens		1,975		—		—		1,975
Second liens and lines of credit		482		—		—		482
Municipal		—		—		—		—
Consumer and other loans		—		—		—		—
Total	$	16,547	$	132	$	—	$	16,679

	December 31, 2023
(In Thousands)	Real Estate		Business Assets		Other		Total
Agriculture and farmland loans	$	—	$	—	$	—	$	—
Construction		191		—		—		191
Commercial & industrial loans		—		61		—		61
Commercial real estate loans
Multifamily		—		—		—		—
Owner occupied		2,548		—		—		2,548
Non-owner occupied		1,229		—		—		1,229
Residential real estate loans
First liens		2,707		—		—		2,707
Second liens and lines of credit		294		—		—		294
Municipal		—		—		—		—
Consumer and other loans		—		—		7		7
Total	$	6,969	$	61	$	7	$	7,037

The following table presents an aging analysis of the recorded investment of past due loans at December 31, 2024 and December 31, 2023.


	December 31, 2024
(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	$	23	$	—	$	—	$	23	$	67,718	$	67,741
Construction		197		—		166		363		152,256		152,619
Commercial & industrial		41		—		90		131		245,702		245,833
Commercial real estate
Multifamily		314		—		—		314		211,464		211,778
Owner occupied		334		660		8,768		9,762		467,980		477,742
Non-owner occupied		—		—		398		398		627,839		628,237
Residential real estate
First liens		686		317		1,220		2,223		371,246		373,469
Second liens and lines of credit		191		119		276		586		76,127		76,713
Consumer and other loans		7		1		48		56		17,030		17,086
Municipal		—		—		—		—		3,886		3,886
Total	$	1,793	$	1,097	$	10,966	$	13,856	$	2,241,248	$	2,255,104

	December 31, 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	$	14	$	—	$	—	$	14	$	65,847	$	65,861
Construction		10		—		191		201		161,624		161,825
Commercial & industrial		46		1		118		165		232,247		232,412
Commercial real estate
Multifamily		—		—		—		—		176,843		176,843
Owner occupied		156		2,802		137		3,095		471,869		474,964
Non-owner occupied		—		86		1,239		1,325		550,156		551,481
Residential real estate
First liens		719		419		872		2,010		374,082		376,092
Second liens and lines of credit		279		128		97		504		66,144		66,648
Consumer and other loans		15		15		7		37		16,703		16,740
Municipal		—		—		—		—		5,244		5,244
Total	$	1,239	$	3,451	$	2,661	$	7,351	$	2,120,759	$	2,128,110

The following tables represent credit exposures by internally assigned grades as of December 31, 2024. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all.

Pass – loans that are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. There are four sub-grades within the Pass category to further distinguish the loan.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as Doubtful have all the weaknesses inherent in a Substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a Loss are considered uncollectible and are immediately charged against allowances.

The following table presents the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2024.


	December 31, 2024
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Agriculture and farmland
Pass	$	11,357	$	1,040	$	13,682	$	8,761	$	4,780	$	21,105	$	5,320	$	—	$	66,045
Special mention		—		10		—		51		—		1,387		248		—		1,696
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Agriculture and farmland	$	11,357	$	1,050	$	13,682	$	8,812	$	4,780	$	22,492	$	5,568	$	—	$	67,741
Agriculture and farmland
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Construction
Pass		38,681		54,929		17,645		18,952		1,226		8,567		12,422		—		152,422
Special mention				—		—		—		—		—		—		—		—
Substandard or lower		—		197		—		—		—		—		—		—		197
Total Construction		38,681		55,126		17,645		18,952		1,226		8,567		12,422		—		152,619
Construction
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		36,194		23,645		18,632		18,880		10,145		8,154		115,655		—		231,305
Special mention		301		153		4,606		88		—		363		7,023		—		12,534
Substandard or lower		74		51		384		47		—		299		1,139		—		1,994
Total Commercial & industrial		36,569		23,849		23,622		19,015		10,145		8,816		123,817		—		245,833
Commercial & industrial
Current period gross charge-offs		—		—		—		—		20		7		125		—		152
Commercial real estate - Multifamily
Pass		34,006		11,064		84,497		49,859		19,451		11,232		685		—		210,794
Special mention		—		—		984		—		—		—		—		—		984
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Commercial real estate - Multifamily		34,006		11,064		85,481		49,859		19,451		11,232		685		—		211,778
Commercial real estate - Multifamily
Current period gross charge-offs		—		—		—		—		—		—		—		—		—


	December 31, 2024
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial real estate - Owner occupied
Pass		52,566		56,674		101,351		83,703		48,003		99,600		15,120		—		457,017
Special mention		—		—		365		1,984		416		5,608		262		—		8,635
Substandard or lower		—		—		9,327		—		—		2,632		131		—		12,090
Total Commercial real estate - Owner occupied		52,566		56,674		111,043		85,687		48,419		107,840		15,513		—		477,742
Commercial real estate - Owner occupied
Current period gross charge-offs		—		—		—		—		23		6		—		—		29
Commercial real estate - Non-owner occupied
Pass		78,928		60,584		187,113		111,191		48,512		120,340		8,535		—		615,203
Special mention		744		—		—		1,536		3,352		3,073		—		—		8,705
Substandard or lower		—		—		—		3,931		—		324		74		—		4,329
Total Commercial real estate - Non-owner occupied		79,672		60,584		187,113		116,658		51,864		123,737		8,609		—		628,237
Commercial real estate - Non-owner occupied
Current period gross charge-offs		—		—		—		—		—		54		—		—		54
Municipal
Pass		71		356		—		350		939		2,088		82		—		3,886
Special mention		—		—		—		—		—		—		—		—		—
Substandard or lower		—		—		—		—		—		—		—		—		—
Total Municipal		71		356		—		350		939		2,088		82		—		3,886
Municipal
Current period gross charge-offs		—		—		—		—		—		—		—		—		—
Total
Pass	$	251,803	$	208,292	$	422,920	$	291,696	$	133,056	$	271,086	$	157,819	$	—	$	1,736,672
Special mention		1,045		163		5,955		3,659		3,768		10,431		7,533		—		32,554
Substandard or lower		74		248		9,711		3,978		—		3,255		1,344		—		18,610
Total	$	252,922	$	208,703	$	438,586	$	299,333	$	136,824	$	284,772	$	166,696	$	—	$	1,787,836

The following tables present the classes of the loan portfolio summarized by the internal risk rating system as of December 31, 2023.


	December 31, 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	$	1,466	$	14,372	$	9,613	$	5,147	$	2,319	$	22,627	$	5,114	$	29	$	60,687
Special mention	—		—			30	—			811		1,206		342	—			2,389
Substandard or lower		13	—			15		121	—			2,576		60	—			2,785
Total Agriculture and farmland	$	1,479	$	14,372	$	9,658	$	5,268	$	3,130	$	26,409	$	5,516	$	29	$	65,861
Agriculture and farmland
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Construction
Pass		55,462		45,206		30,593		2,932		6,161		5,446		14,424		1,317		161,541
Special mention	—		—		—		—		—		—			93	—			93
Substandard or lower	—		—		—			98	—		—		—			93		191
Total Construction		55,462		45,206		30,593		3,030		6,161		5,446		14,517		1,410		161,825
Construction
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial & industrial
Pass		29,586		31,653		24,184		13,831		4,285		7,536		119,602		68		230,745
Special mention	—			113		139	—			15		4		1,071	—			1,342
Substandard or lower	—		—			47	—			194	—			43		41		325
Total Commercial & industrial		29,586		31,766		24,370		13,831		4,494		7,540		120,716		109	$	232,412
Commercial & industrial
Current period gross charge-offs	—		—		—		—		—		—			200	—			200
Commercial real estate - Multifamily
Pass		12,587		80,127		50,320		18,871		6,031		6,737		298	—			174,971
Special mention	—		—		—		—		—		—		—		—		—
Substandard or lower	—		—		—		—		—			1,872	—		—			1,872
Total Commercial real estate - Multifamily		12,587		80,127		50,320		18,871		6,031		8,609		298	—			176,843
Commercial real estate - Multifamily
Current period gross charge-offs	—		—		—		—		—		—		—		—		—

	December 31, 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		53,765		127,684		96,193		50,888		39,043		83,753		7,801		6		459,133
Special mention	—			377		3,125	—			6,318	—			429	—			10,249


Substandard or lower	—		—		—			626		2,408		2,391		157	—			5,582
Total Commercial real estate - Owner occupied		53,765		128,061		99,318		51,514		47,769		86,144		8,387		6		474,964
Commercial real estate - Owner occupied
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Commercial real estate - Non-owner occupied
Pass		58,210		173,415		118,081		56,025		59,792		78,465		6,177		86		550,251
Special mention	—		—			42	—		—		—		—		—			42
Substandard or lower	—		—			325	—			56		558		249	—			1,188
Total Commercial real estate - Non-owner occupied		58,210		173,415		118,448		56,025		59,848		79,023		6,426		86		551,481
Commercial real estate - Non-owner occupied
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Municipal
Pass		529	—			420		1,675	—			2,526		94	—			5,244
Special mention	—		—		—		—		—		—		—		—		—
Substandard or lower	—		—		—		—		—		—		—		—		—
Total - Municipal		529	—			420		1,675	—			2,526		94	—			5,244
Municipal
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Total
Pass	$	211,605	$	472,457	$	329,404	$	149,369	$	117,631	$	207,090	$	153,510	$	1,506	$	1,642,572
Special mention	—			490		3,336	—			7,144		1,210		1,935	—			14,115
Substandard or lower		13	—			387		845		2,658		7,397		509		134		11,943
Total	$	211,618	$	472,947	$	333,127	$	150,214	$	127,433	$	215,697	$	155,954	$	1,640	$	1,668,630

The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. As part of our adoption of CECL, the Company will monitor small balance, homogeneous loans, such as home equity, residential mortgage, and consumer loans based on delinquency status rather than the assignment of loan specific risk ratings. The Company will evaluate credit quality based on the aging status of the loan. The following tables present the amortized cost of these loans based on payment activity, by origination year, as of December 31, 2024 and 2023.


	December 31, 2024
	Term Loans Amortized Cost Basis by Origination Year
(In Thousands)	2024		2023		2022		2021		2020		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Residential real estate - First liens
Performing	$	28,532	$	48,601	$	86,197	$	82,086	$	35,962	$	78,244	$	11,583	$	—	$	371,205
Nonperforming		—		—		—		219		29		2,016		—		—		2,264
Total Residential real estate - First liens	$	28,532	$	48,601	$	86,197	$	82,305	$	35,991	$	80,260	$	11,583	$	—	$	373,469
Residential real estate - First liens
Current period gross charge-offs		—		—		—		—		—		4		—		—		4
Residential real estate - Second liens and lines of credit
Performing		2,643		940		985		349		61		1,666		68,937		650		76,231
Nonperforming		—		—		—		—		—		294		188		—		482
Total Residential real estate - Second liens and lines of credit		2,643		940		985		349		61		1,960		69,125		650		76,713
Residential real estate - Second liens and lines of credit
Current period gross charge-offs		—		—		—		—		—		9		—		—		9
Consumer and other
Performing		2,610		4,433		1,863		113		52		67		7,900		—		17,038
Nonperforming		—		—		—		—		—		48		—		—		48
Total Consumer and other		2,610		4,433		1,863		113		52		115		7,900		—		17,086
Consumer and other
Current period gross charge-offs		—		6		4		6		1		18		150		—		185
Total
Performing	$	33,785	$	53,974	$	89,045	$	82,548	$	36,075	$	79,977	$	88,420	$	650	$	464,474
Nonperforming		—		—		—		219		29		2,358		188		—		2,794
Total	$	33,785	$	53,974	$	89,045	$	82,767	$	36,104	$	82,335	$	88,608	$	650	$	467,268


	December 31, 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	$	41,984	$	90,220	$	95,232	$	37,966	$	22,934	$	75,918	$	8,982	$	—	$	373,236
Nonperforming	—		—			33		101		208		2,514	—		—			2,856
Total Residential real estate - First liens	$	41,984	$	90,220	$	95,265	$	38,067	$	23,142	$	78,432	$	8,982	$	—	$	376,092
Residential real estate - First liens
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Residential real estate - Second liens and lines of credit
Performing		1,045		1,702		386		184		205		2,259		60,573	—			66,354
Nonperforming	—		—		—		—		—		—			294	—			294
Total Residential real estate - Second liens and lines of credit		1,045		1,702		386		184		205		2,259		60,867	—			66,648
Residential real estate - Second liens and lines of credit
Current period gross charge-offs	—		—		—		—		—		—		—		—		—
Consumer and other
Performing		5,007		437		213		150		73		85		10,768	—			16,733
Nonperforming	—		—		—		—		—		—			7	—			7
Total Consumer and other		5,007		437		213		150		73		85		10,775	—			16,740
Consumer and other
Current period gross charge-offs	—		—		—		—		—		—		1		—		1
Total
Performing	$	48,036	$	92,359	$	95,831	$	38,300	$	23,212	$	78,262	$	80,323	$	—	$	456,323
Nonperforming	—		—			33		101		208		2,514		301	—			3,157
Total	$	48,036	$	92,359	$	95,864	$	38,401	$	23,420	$	80,776	$	80,624	$	—	$	459,480

The Company may modify loans to borrowers experiencing financial difficulty by providing principal forgiveness, term extension, interest rate reduction or an other-than-insignificant payment delay. When principal forgiveness is provided, the amount of forgiveness is charged off against the allowance for credit losses. The Company may also provide multiple types of modifications on an individual loan. For the year ended December 31, 2024, the Company provided a payment delay to a Non Owner Occupied Commercial Real Estate borrower experiencing financial difficulty. At December 31, 2024, the amortized cost basis of the loan is $3,931 and has been placed on non-accrual. For year ended December 31, 2023, the Company did not extend any modifications to borrowers experiencing financial difficulty that had a more-than-insignificant direct change in the contractual cash flows of the loans.