LOANS AND ALLOWANCE FOR CREDIT LOSSES (Tables)

12 Months Ended

Dec. 31, 2023

Schedule of Composition of Loan Portfolio by Loan Class

The following table illustrates the composition of the Corporation’s loan portfolio by loan class as of the dates indicated:


	December 31, 2023		December 31, 2022

Commercial and industrial loans	$	3,670,948	$	3,437,126
Agricultural land, production and other loans to farmers	263,414		241,793
Real estate loans:
Construction	957,545		835,582
Commercial real estate, non-owner occupied	2,400,839		2,407,475
Commercial real estate, owner occupied	1,162,083		1,246,528
Residential	2,288,921		2,096,655
Home equity	617,571		630,632
Individuals' loans for household and other personal expenditures	168,388		175,211
Public finance and other commercial loans	956,318		932,892
Loans	$	12,486,027	$	12,003,894

Schedule of Credit Quality of Loan Portfolio by Loan Class

The following tables summarize the risk grading of the Corporation’s loan portfolio by loan class and by year of origination for the years indicated. Consumer loans are not risk graded. For the purposes of this disclosure, the consumer loans are classified in the following manner: loans that are less than 30 days past due are Pass, loans 30-89 days past due are Special Mention and loans greater than 89 days past due are Substandard. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date.


December 31, 2023
	Term Loans (amortized cost basis by origination year)
	2023		2022		2021		2020		2019		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial and industrial loans
Pass	$	1,175,967	$	474,601	$	253,148	$	86,226	$	47,910	$	45,020	$	1,393,756	$	60	$	3,476,688
Special Mention	34,356		3,911		1,546		5,149		2,986		241		45,994		—		94,183
Substandard	12,311		20,245		17,733		2,479		1,507		1,512		40,449		144		96,380
Doubtful	857		—		—		—		—		—		2,840		—		3,697

Total Commercial and industrial loans	1,223,491		498,757		272,427		93,854		52,403		46,773		1,483,039		204		3,670,948
Current period gross write-offs	13,973		2,711		576		5,665		78		261		—		—		23,264
Agricultural land, production and other loans to farmers
Pass	35,633		38,145		31,511		31,048		12,995		25,462		87,534		—		262,328
Special Mention	—		266		—		—		—		122		—		—		388
Substandard	58		150		—		454		—		36		—		—		698


Total Agricultural land, production and other loans to farmers	35,691		38,561		31,511		31,502		12,995		25,620		87,534		—		263,414
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Real estate loans:
Construction
Pass	403,578		267,587		198,350		8,372		7,723		2,357		11,735		—		899,702
Special Mention	25,894		—		—		20,846		—		—		—		—		46,740
Substandard	1,451		4,330		5,322		—		—		—		—		—		11,103


Total Construction	430,923		271,917		203,672		29,218		7,723		2,357		11,735		—		957,545
Current period gross write-offs	—		—		—		—		—		—		—		—		—
Commercial real estate, non-owner occupied
Pass	373,378		504,280		535,327		418,553		141,320		200,821		16,744		—		2,190,423
Special Mention	76,382		21,145		7,005		4,531		19,479		27,941		37		—		156,520
Substandard	20,358		10,537		219		20,236		—		2,299		247		—		53,896


Total Commercial real estate, non-owner occupied	470,118		535,962		542,551		443,320		160,799		231,061		17,028		—		2,400,839
Current period gross write-offs	—		66		—		—		—		—		—		—		66
Commercial real estate, owner occupied
Pass	176,750		199,821		256,346		263,522		99,180		77,485		27,369		—		1,100,473
Special Mention	6,712		5,034		9,319		2,460		919		2,902		514		—		27,860
Substandard	18,092		3,712		4,183		4,545		289		2,929		—		—		33,750


Total Commercial real estate, owner occupied	201,554		208,567		269,848		270,527		100,388		83,316		27,883		—		1,162,083
Current period gross write-offs	48		—		—		—		2		—		—		—		50
Residential
Pass	395,363		695,056		442,495		365,297		98,654		254,718		4,988		83		2,256,654
Special Mention	2,167		5,591		3,202		1,924		1,065		4,837		200		81		19,067
Substandard	804		3,708		2,529		1,199		866		4,063		31		—		13,200


Total Residential	398,334		704,355		448,226		368,420		100,585		263,618		5,219		164		2,288,921
Current period gross write-offs	101		252		208		3		3		94		—		—		661
Home equity
Pass	9,375		29,784		61,591		11,084		1,092		3,875		484,330		5,837		606,968
Special Mention	—		715		—		1,092		15		2		5,031		149		7,004
Substandard	63		—		727		—		—		123		2,589		97		3,599


Total Home Equity	9,438		30,499		62,318		12,176		1,107		4,000		491,950		6,083		617,571
Current period gross write-offs	69		213		224		149		193		1,596		—		—		2,444
Individuals' loans for household and other personal expenditures
Pass	35,781		49,295		28,387		6,726		2,070		5,904		38,619		772		167,554
Special Mention	184		246		138		69		—		14		176		—		827
Substandard	—		6		—		—		1		—		—		—		7


Total Individuals' loans for household and other personal expenditures	35,965		49,547		28,525		6,795		2,071		5,918		38,795		772		168,388
Current period gross write-offs	147		770		342		77		62		156		—		—		1,554
Public finance and other commercial loans
Pass	65,357		208,347		204,863		155,132		91,619		229,355		1,645		—		956,318




Total Public finance and other commercial loans	65,357		208,347		204,863		155,132		91,619		229,355		1,645		—		956,318
Loans	$	2,870,871	$	2,546,512	$	2,063,941	$	1,410,944	$	529,690	$	892,018	$	2,164,828	$	7,223	$	12,486,027
Total current period gross charge-offs	$	14,338	$	4,012	$	1,350	$	5,894	$	338	$	2,107	$	—	$	—	$	28,039


December 31, 2022
	Term Loans (amortized cost basis by origination year)
	2022		2021		2020		2019		2018		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
Commercial and industrial loans
Pass	$	1,064,687	$	531,504	$	141,985	$	114,999	$	43,136	$	45,310	$	1,302,562	$	5,048	$	3,249,231
Special Mention	2,164		18,005		11,900		5,727		1,012		2,181		27,702		150		68,841
Substandard	27,512		26,571		5,531		10,606		4,674		567		43,450		143		119,054


Total Commercial and industrial loans	1,094,363		576,080		159,416		131,332		48,822		48,058		1,373,714		5,341		3,437,126
Agricultural land, production and other loans to farmers
Pass	44,446		36,299		35,791		15,296		3,752		28,910		73,402		—		237,896
Special Mention	286		784		—		—		281		632		—		—		1,983
Substandard	178		—		490		—		94		1,152		—		—		1,914


Total Agricultural land, production and other loans to farmers	44,910		37,083		36,281		15,296		4,127		30,694		73,402		—		241,793
Real estate loans:
Construction
Pass	366,414		301,986		117,541		11,428		857		3,224		17,167		—		818,617
Special Mention	16,922		—		—		—		—		—		—		—		16,922
Substandard	31		—		—		—		—		12		—		—		43


Total Construction	383,367		301,986		117,541		11,428		857		3,236		17,167		—		835,582
Commercial real estate, non-owner occupied
Pass	560,146		603,254		550,605		168,701		116,859		190,264		31,196		3,803		2,224,828
Special Mention	49,439		4,026		38,268		18,785		11,546		17,992		—		—		140,056
Substandard	21,123		8,128		8,026		—		4,442		872		—		—		42,591


Total Commercial real estate, non-owner occupied	630,708		615,408		596,899		187,486		132,847		209,128		31,196		3,803		2,407,475
Commercial real estate, owner occupied
Pass	260,725		316,665		330,441		114,015		63,816		81,286		33,123		3,378		1,203,449
Special Mention	7,744		6,125		2,245		3,481		1,210		2,984		1,328		—		25,117
Substandard	3,124		1,214		2,376		1,608		2,920		6,720		—		—		17,962


Total Commercial real estate, owner occupied	271,593		324,004		335,062		119,104		67,946		90,990		34,451		3,378		1,246,528
Residential
Pass	758,161		489,301		401,353		114,420		77,768		229,812		5,365		46		2,076,226
Special Mention	2,839		2,924		1,972		513		396		2,588		34		—		11,266
Substandard	1,399		1,824		1,811		805		1,468		1,741		60		55		9,163


Total Residential	762,399		494,049		405,136		115,738		79,632		234,141		5,459		101		2,096,655
Home equity
Pass	40,768		75,670		14,621		1,572		1,348		3,325		486,924		281		624,509
Special Mention	—		—		—		—		115		8		3,698		—		3,821
Substandard	—		79		—		—		65		60		2,098		—		2,302


Total Home Equity	40,768		75,749		14,621		1,572		1,528		3,393		492,720		281		630,632
Individuals' loans for household and other personal expenditures
Pass	67,883		43,639		13,025		5,389		5,830		3,775		35,091		—		174,632
Special Mention	178		134		77		33		28		17		16		—		483
Substandard	1		—		3		—		84		8		—		—		96


Total Individuals' loans for household and other personal expenditures	68,062		43,773		13,105		5,422		5,942		3,800		35,107		—		175,211
Public finance and other commercial loans
Pass	187,125		212,702		165,019		98,687		43,760		204,719		20,880		—		932,892




Total Public finance and other commercial loans	187,125		212,702		165,019		98,687		43,760		204,719		20,880		—		932,892
Loans	$	3,483,295	$	2,680,834	$	1,843,080	$	686,065	$	385,461	$	828,159	$	2,084,096	$	12,904	$	12,003,894

The following tables present the amortized cost basis of collateral dependent loans by loan class and their respective collateral type, which are individually evaluated to determine expected credit losses, for December 31, 2023 and 2022. The total collateral dependent loans for December 31, 2023 decreased $17.6 million from December 31, 2022. The primary changes were related to a decrease of $10.1 million and $9.0 million, respectively, in the commercial and industrial loans and commercial real estate, non-owner occupied loan classes, which was offset by an increase of $2.5 million in the commercial real estate, owner occupied loan class.


	December 31, 2023
	Commercial Real Estate		Residential Real Estate		Other		Total		Allowance on Collateral Dependent Loans
Commercial and industrial loans	$	—	$	—	$	32,029	$	32,029	$	11,474

Real estate loans:
Construction	—		7		—		7		—
Commercial real estate, non-owner occupied	17,516		—		—		17,516		35
Commercial real estate, owner occupied	9,452		—		—		9,452		—
Residential	—		1,439		—		1,439		230
Home equity	—		223		—		223		30


Loans	$	26,968	$	1,669	$	32,029	$	60,666	$	11,769


	December 31, 2022
	Commercial Real Estate		Residential Real Estate		Other		Total		Allowance on Collateral Dependent Loans
Commercial and industrial loans	$	—	$	—	$	42,101	$	42,101	$	8,367

Real estate loans:
Construction	—		10		—		10		1
Commercial real estate, non-owner occupied	26,534		—		—		26,534		2,064
Commercial real estate, owner occupied	6,986		—		—		6,986		776
Residential	—		2,382		—		2,382		260
Home equity	—		289		—		289		44


Loans	$	33,520	$	2,681	$	42,101	$	78,302	$	11,512

Schedule of Past Due Aging of Loan Portfolio by Loan Class

The tables below show a past due aging of the Corporation’s loan portfolio, by loan class, as of the dates indicated:


	December 31, 2023
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total		Loans > 90 Days or More Past Due And Accruing
Commercial and industrial loans	$	3,657,447	$	5,021	$	1,622	$	6,858	$	3,670,948	$	86
Agricultural land, production and other loans to farmers	263,414		—		—		—		263,414		—
Real estate loans:
Construction	955,588		—		1,957		—		957,545		—
Commercial real estate, non-owner occupied	2,376,184		12,995		195		11,465		2,400,839		—
Commercial real estate, owner occupied	1,161,869		—		104		110		1,162,083		—
Residential	2,259,496		11,810		5,472		12,143		2,288,921		—
Home equity	608,948		3,614		1,647		3,362		617,571		52
Individuals' loans for household and other personal expenditures	167,553		635		192		8		168,388		—

Public finance and other commercial loans	956,284		—		—		34		956,318		34
Loans	$	12,406,783	$	34,075	$	11,189	$	33,980	$	12,486,027	$	172


	December 31, 2022
	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total		Loans > 90 Days or More Past Due And Accruing
Commercial and industrial loans	$	3,429,314	$	4,904	$	434	$	2,474	$	3,437,126	$	1,147
Agricultural land, production and other loans to farmers	241,739		—		—		54		241,793		—
Real estate loans:
Construction	832,716		2,436		418		12		835,582		—
Commercial real estate, non-owner occupied	2,395,495		5,946		881		5,153		2,407,475		264
Commercial real estate, owner occupied	1,241,714		4,495		—		319		1,246,528		—
Residential	2,079,959		8,607		2,278		5,811		2,096,655		—
Home equity	624,543		2,206		1,782		2,101		630,632		326
Individuals' loans for household and other personal expenditures	174,629		343		142		97		175,211		—

Public finance and other commercial loans	932,778		114		—		—		932,892		—
Loans	$	11,952,887	$	29,051	$	5,935	$	16,021	$	12,003,894	$	1,737

Schedule of Non-Accrual Loans by Loan class

The following table summarizes the Corporation’s non-accrual loans by loan class as of the dates indicated:


	December 31, 2023				December 31, 2022
	Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Losses		Nonaccrual Loans		Nonaccrual Loans with no Allowance for Credit Losses
Commercial and industrial loans	$	9,050	$	1,015	$	3,292	$	481
Agricultural land, production and other loans to farmers	58		—		54		—
Real estate loans:
Construction	520		—		12		—
Commercial real estate, non-owner occupied	11,932		11,095		19,374		280
Commercial real estate, owner occupied	3,041		2,257		3,550		2,784
Residential	25,140		—		13,685		702
Home equity	3,820		—		2,247		—
Individuals' loans for household and other personal expenditures	19		—		110		—

Loans	$	53,580	$	14,367	$	42,324	$	4,247

Schedule of Troubled Debt Restructuring

The following table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below.


	Year Ended December 31, 2023
	Loan Modifications Made to Borrowers Experiencing Financial Difficulty
	Payment Delay		Term Extension		Combination Interest Rate Reduction & Term Extension		Combination Payment Delay & Term Extension		% of Total Class of Financing Receivable
Commercial and industrial loans	$	857	$	16,572	$	231	$	—	0.48	%
Agricultural land, production and other loans to farmers	—		58		—		—		0.02	%
Real estate loans:
Construction	—		11		—		—		—	%
Commercial real estate, non-owner occupied	—		11,823		7,657		—		0.81	%
Commercial real estate, owner occupied	5,540		10,123		71		—		1.35	%
Residential	—		129		—		469		0.03	%
Home equity	—		63		29		—		0.01	%


Total	$	6,397	$	38,779	$	7,988	$	469

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023.

Year Ended December 31, 2023

Financial Effect of Loan Modifications

Payment Delay

Term Extension

Combination Interest Rate Reduction & Term Extension

Combination Payment Delay & Term Extension

Commercial and industrial loans

Provided payment deferrals with weighted average delayed amounts of $24,000.

Extended loans by a weighted average of 10 months.

Reduced the weighted average contractual interest rate from 9.67% to 7.39%. Extended loans by a weighted average of 13 months.

Agricultural land, production and other loans to farmers

Extended loans by a weighted average of 144 months.

Real estate loans:

Construction

Extended loans by a weighted average of 24 months.

Commercial real estate, non-owner occupied

Extended loans by a weighted average of 11 months.

Reduced the weighted average contractual interest rate from 8.57% to 7.89%. Extended loans by a weighted average of 34 months.

Commercial real estate, owner occupied

Provided payment deferrals with weighted average delayed amounts of $4.5 million.

Extended loans by a weighted average of 6 months.

Reduced the weighted average contractual interest rate from 10.25% to 6.61%. Extended loans by a weighted average of 114 months.

Residential

Extended loans by a weighted average of 6 months.

Provided payment deferrals with weighted average delayed amounts of $3,400. Extended loans by a weighted average of 3 months.

Home equity

Extended loans by a weighted average of 7 months.

Reduced the weighted average contractual interest rate from 9.25% to 7.25%. Extended loans by a weighted average of 240 months.

Provided payment deferrals with weighted average delayed amounts of $300. Extended loans by a weighted average of 3 months.

The following table presents the amortized cost basis and payment status of loans that were modified during the year ended December 31, 2023 due to the borrowers experiencing financial difficulty.


	Year Ended December 31, 2023
	Payment Status
	Current		30-89 Days Past Due
Commercial and industrial loans	$	17,660	$	—
Agricultural land, production and other loans to farmers	58		—
Real estate loans:
Construction	11		—
Commercial real estate, non-owner occupied	19,480		—
Commercial real estate, owner occupied	15,734		—
Residential	473		125
Home equity	92		—
Individuals' loans for household and other personal expenditures	—		—

Total	$	53,508	$	125

The following table summarizes troubled debt restructures in the Corporation’s loan portfolio that occurred during the twelve months ended December 31, 2022.


	Twelve Months Ended December 31, 2022
	Pre- Modification Recorded Balance		Term Modification				Rate Modification				Post - Modification Recorded Balance				Number of Loans
Commercial and industrial loans	$	61	$	62			$	—			$	62			1
Real estate loans:
Residential	53		—				56				56				1
Total	$	114	$	62	$	—	$	56	$	—	$	118	$	—	2

Schedule of Purchased Credit Deteriorated Loans

The Corporation acquired Level One on April 1, 2022 and performed an evaluation of the loan portfolio in which there were loans that, at acquisition, had more than an insignificant amount of credit quality deterioration. The carrying amount of those loans is shown in the table below:


	Level One
Purchase price of loans at acquisition	$	41,347
CECL Day 1 PCD ACL	16,599
Par value of acquired loans at acquisition	$	57,946

Schedule of Changes in Allowance for Loan Losses

The following tables summarize changes in the allowance for credit losses by loan segment for the twelve months ended December 31, 2023, 2022 and 2021:


	Twelve Months Ended December 31, 2023
	Commercial		Commercial Real Estate		Construction		Consumer & Residential		Total
Allowance for credit losses
Balances, December 31, 2022	$	102,216	$	46,839	$	28,955	$	45,267	$	223,277




Provision for credit losses - loans	17,401		(2,735)		(4,132)		(3,234)		7,300


Recoveries on loans	995		60		—		1,341		2,396
Loans charged off	(23,264)		(116)		—		(4,659)		(28,039)
Balances. December 31, 2023	$	97,348	$	44,048	$	24,823	$	38,715	$	204,934


	Twelve Months Ended December 31, 2022
	Commercial		Commercial Real Estate		Construction		Consumer & Residential		Total
Allowance for credit losses
Balances, December 31, 2021	$	69,935	$	60,665	$	20,206	$	44,591	$	195,397




Provision for credit losses - loans	16,697		(20,425)		6,367		(2,639)		—
CECL Day 1 non-PCD provision for credit losses	2,957		5,539		871		4,588		13,955
CECL Day 1 PCD ACL	12,970		2,981		648		—		16,599
Recoveries on loans	872		1,096		863		1,096		3,927
Loans charged off	(1,215)		(3,017)		—		(2,369)		(6,601)
Balances. December 31, 2022	$	102,216	$	46,839	$	28,955	$	45,267	$	223,277


	Twelve Months Ended December 31, 2021
	Commercial		Commercial Real Estate		Construction		Consumer		Residential		Consumer & Residential		Total
Allowance for credit losses
Balances, December 31, 2020	$	47,115	$	51,070	$	—	$	9,648	$	22,815	$	—	$	130,648
Credit risk reclassifications			(10,284)		10,284		(9,648)		(22,815)		32,463		—
Balances, December 31, 2020 after reclassifications	47,115		40,786		10,284		—		—		32,463		130,648
Impact of adopting ASC 326	20,024		34,925		8,805		—		—		10,301		74,055
Balances, January 1, 2021 Post-ASC 326 adoption	67,139		75,711		19,089		—		—		42,764		204,703
Provision for credit losses - loans	7,921		(11,093)		1,122		—		—		2,050		—


Recoveries on loans	724		580		1		—		—		1,273		2,578
Loans charged off	(5,849)		(4,533)		(6)		—		—		(1,496)		(11,884)
Balances. December 31, 2021	$	69,935	$	60,665	$	20,206	$	—	$	—	$	44,591	$	195,397

Schedule of Financial Instruments with Off-balance Sheet Risk

Financial instruments with off-balance sheet risk were as follows:


	December 31, 2023		December 31, 2022
Amounts of commitments:
Loan commitments to extend credit	$	5,025,790	$	4,950,724
Standby letters of credit	$	65,580	$	40,784

Schedule of Allowance for Credit Losses, Off-balance Sheet

The following table details activity in the allowance for credit losses on off-balance sheet commitments:


	December 31, 2023		December 31, 2022
Balance, January 1	$	23,300	$	20,500
Provision for credit losses - unfunded commitments related to Level One	—		2,800
Provision for credit losses - unfunded commitments	(3,800)		—
Balance, December 31	$	19,500	$	23,300