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LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2024
LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES [Abstract]  
LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES
5. LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES


The Company grants commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central, central and south-central Pennsylvania, southern New York and Wilmington and Dover, Delaware.  The HVBC acquisition has expanded our lending market further into southeast Pennsylvania, including Montgomery, Bucks and Philadelphia Counties as well as Burlington County, New Jersey. Although the Company had a diversified loan portfolio at December 31, 2024 and 2023, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio, as well as how those segments are analyzed within the allowance for credit losses as of December 31, 2024 and 2023 (in thousands):


  
December 31,
 

  2024
     2023
  
Real estate loans:
            
Residential
  
$
351,398
     $ 359,990  
Commercial
    
1,121,435
       1,092,887  
Agricultural
    
327,722
       314,802  
Construction
    
164,326
       195,826  
Consumer
    
133,207
       61,316  
Other commercial loans
    
131,310
       136,168  
Other agricultural loans
    
29,662
       30,673  
State and political subdivision loans
    
54,182
       57,174  
Total
    
2,313,242
       2,248,836  
Allowance for credit losses - loans
    
21,699
       21,153  
Net loans
  
$
2,291,543
     $
 2,227,683  



As of December 31, 2024, and 2023, net unamortized loan fees and costs of $2,587,000 and $2,843,000, respectively, were included in the carrying value of loans. Purchased loans acquired in connection with the FNB acquisition, the State College branch acquisition, the MidCoast acquisition and the HVBC were recorded at fair value on their acquisition date without a carryover of the related allowance for credit losses.


Real estate loans serviced for Freddie Mac, Fannie Mae and the FHLB, which are not included in the Consolidated Balance Sheet, totaled $193,507,000 and $203,709,000 at December 31, 2024 and 2023, respectively. Loans sold to Freddie Mac and Fannie Mae were sold without recourse and total $184,578,000 and $193,548,000 at December 31, 2024 and 2023, respectively. Additionally, the Bank acquired a portfolio of loans sold to the FHLB during the acquisitions of FNB and HVBC, which were sold under the Mortgage Partnership Finance Program (“MPF”). The Bank was not an active participant in the MPF program in 2024 or 2023. The MPF portfolio balance was $8,929,000 and $10,161,000 at December 31, 2024 and 2023, respectively. The FHLB maintains a first-loss position for the MPF portfolio that totals $168,000. Should the FHLB exhaust its first-loss position, recourse to the Bank’s credit enhancement would be up to the next $229,000 of losses. The Bank did not experience any losses for the MPF portfolio during 2024, 2023 or 2022.


The segments of the Bank’s loan portfolio are disaggregated into classes to a level that allows management to monitor risk and performance. Residential real estate mortgages consist of 15 to 30 year first mortgages on residential real estate, while residential real estate home equities are consumer purpose installment loans or lines of credit secured by a mortgage which is often a second lien on residential real estate with terms of 15 years or less. Commercial real estate are business purpose loans secured by a mortgage on commercial real estate. Agricultural real estate are loans secured by a mortgage on real estate used in agriculture production. Construction real estate are loans secured by residential or commercial real estate used during the construction phase of residential and commercial projects. Consumer loans are typically unsecured or primarily secured by collateral other than real estate and overdraft lines of credit connected with customer deposit accounts. Other commercial loans are loans for commercial purposes primarily secured by non-real estate collateral. Other agricultural loans are loans for agricultural purposes primarily secured by non-real estate collateral. State and political subdivisions are loans for state and local municipalities for capital and operating expenses or tax-free loans used to finance commercial development.


Allowance for Credit Losses, in accordance with ASC 326


As discussed in Note 1 “Basis of Presentation”, the Company adopted CECL effective January 1, 2023. CECL requires estimated credit losses on loans to be determined based on an expected life of loan model, as compared to an incurred loss model (in effect for periods prior to 2023). Accordingly, allowance for credit loss disclosures subsequent to January 1, 2023 are not always comparable to prior dates. In addition, certain new disclosures required under CECL are not applicable to prior periods. As a result, the following tables present disclosures separately for each period, where appropriate. New disclosures required under CECL are only shown for the current period and are noted. See Note 1, “Basis of Presentation”, for a summary of the impact of adopting CECL on January 1, 2023.


Under CECL, loans individually evaluated consist of collateral dependent loans and recently modified loans that were experiencing financial difficulty at the time of the modification. Under the incurred loss model in effect prior to the adoption of CECL, loans evaluated individually for impairment were referred to as impaired loans.


The allowance for credit losses related to loans consists of loans evaluated collectively and individually for expected credit losses. It represents an estimate of credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. The allowance for credit losses for off-balance sheet credit exposures includes estimated losses on unfunded loan commitments, letters of credit and other off-balance sheet credit exposures. The total allowance for credit losses is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.
 

The following table presents the components of the allowance for credit losses as of December 31, 2024 and 2023 (in thousands):

    December 31,    
 
     2024
   
2023
  
Allowance for Credit Losses - Loans
   $
 21,699
  
  
$
21,153
  
Allowance for Credit Losses - Off-Balance Sheet credit Exposure
      676
      
1,265
  
Total allowance for credit losses
   $  22,375
    
$
22,418
  


The following table presents the activity in the allowance for credit losses for 2024 and 2023 (in thousands):

   
Allowance for Credit
Losses -Loans
    
Allowance for Credit Losses - Off-
Balance Sheet credit Exposure
    
Total
  
Balance at December 31, 2022
  
$
18,552
    
$
165
    
$
18,717
  
Impact of adopting CECL
    
(3,300
)
    
1,064
      
(2,236
)
Allowance for credit loss on PCD acquired loans
    
1,689
      
-
      
1,689
  
Loans charge-off
    
(1,329
)
    
-
      
(1,329
)
Recoveries of loans previously charged-off
    
49
      
-
      
49
  
Net loans charged-off
    
(1,280
)
    
-
      
(1,280
)
Provision for credit losses - acquisition day 1 non-PCD
    
4,591
      
-
      
4,591
  
Provision for credit losses
    
901
      
36
      
937
  
Balance at December 31, 2023
  
$
21,153
    
$
1,265
    
$
22,418
  

 

   
Allowance for Credit
Losses -Loans
    
Allowance for Credit Losses - Off-
Balance Sheet credit Exposure
    
Total
  
Balance at December 31, 2023
  
$
21,153
    
$
1,265
    
$
22,418
  
Loans charge-off
    
(2,673
)
    
-
      
(2,673
)
Recoveries of loans previously charged-off
    
43
      
-
      
43
  
Net loans charged-off
    
(2,630
)
    
-
      
(2,630
)
Provision for credit losses
    
3,176
      
(589
)
    
2,587
  
Balance at December 31, 2024
  
$
21,699
    
$
676
    
$
22,375
  



The following tables presents the activity in the allowance for credit losses – loans, by portfolio segment, for 2024 and 2023 (in thousands).



   
Balance at
December 31, 2023
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
December 31, 2024
  
Real estate loans:
                              
Residential
  
$
2,354
    
$
(5
)
  
$
-
    
$
(409
)
  
$
1,940
  
Commercial
    
9,178
      
-
      
-
      
(4
)
    
9,174
  
Agricultural
    
3,264
      
-
      
-
      
265
      
3,529
  
Construction
    
1,950
      
-
      
-
      
(548
)
    
1,402
  
Consumer
    
1,496
      
(107
)
    
22
      
(6
)
    
1,405
  
Other commercial loans
    
2,229
      
(2,561
)
    
21
      
4,010
      
3,699
  
Other agricultural loans
    
270
      
-
      
-
      
(137
)
    
133
  
State and political subdivision loans
    
45
      
-
      
-
      
16
      
61
  
Unallocated
    
367
      
-
      
-
      
(11
)
    
356
  
Total
  
$
21,153
    
$
(2,673
)
  
$
43
    
$
3,176
    
$
21,699
  

   
Balance at
December 31,
2022
    
Impact of
adopting
CECL
    
Allowance for
credit loss on
PCD acquired
loans
    
Charge-
offs
    
Recoveries
    
Provision
    
Balance at
December 31,
2023
  
Real estate loans:
                                          
Residential
  
$
1,056
    
$
79
    
$
108
    
$
(1
)
  
$
-
    
$
1,112
    
$
2,354
  
Commercial
    
10,120
      
(3,070
)
    
39
      
-
      
-
      
2,089
      
9,178
  
Agricultural
    
4,589
      
(1,145
)
    
-
      
-
      
-
      
(180
)
    
3,264
  
Construction
    
801
      
(103
)
     37      
-
      
-
      
1,215
      
1,950
  
Consumer
    
135
      
1,040
      
677
      
(365
)
    
40
      
(31
)
    
1,496
  
Other commercial loans
    
1,040
      
(328
)
    
828
      
(963
)
    
9
      
1,643
      
2,229
  
Other agricultural loans
    
489
      
(219
)
    
-
      
-
      
-
      
-
   
270
  
State and political subdivision loans
    
322
      
(280
)
    
-
      
-
      
-
      
3
      
45
  
Unallocated
    
-
      
726
      
-
      
-
      
-
      
(359
)
    
367
  
Total
  
$
18,552
    
$
(3,300
)
  
$
1,689
    
$
(1,329
)
  
$
49
    
$
5,492
    
$
21,153
  
 

The following table presents loans and the allowance for credit losses by portfolio segment, under the CECL methodology as of December 31, 2024 and 2023 (in thousands):
Allowance for Credit Losses - Loans



2024
Collectively evaluated
 for impairment

Individually
evaluated for
impairment

Total
Allowance for
Credit Losses
- Loans

Collectively
evaluated for
impairment

Loans
Individually
evaluated for
impairment


Total Loans
Real estate loans:

















Residential
$
1,902

$
38

$
1,940

$
349,909

$
1,489

$
351,398
Commercial

9,070


104


9,174


1,105,847


15,588


1,121,435
Agricultural

3,529


-


3,529


323,660


4,062


327,722
Construction

1,402


-


1,402


164,043


283


164,326
Consumer

391


1,014


1,405


132,180


1,027


133,207
Other commercial loans

2,952


747


3,699


128,728


2,582


131,310
Other agricultural loans

133


-


133


29,125


537


29,662
State and political subdivision loans

61


-


61


54,182


-


54,182
Unallocated

356


-


356


-


-


-
Total
$
19,796

$
1,903

$
21,699

$
2,287,674

$
25,568

$
2,313,242

2023





Real estate loans:
Residential
$
2,285
$
69
$
2,354
$
358,358
$
1,632
$
359,990
Commercial
9,033
145
9,178
1,090,217
2,670
1,092,887
Agricultural
3,247
17
3,264
311,500
3,302
314,802
Construction
1,664
286
1,950
193,469
2,357
195,826
Consumer
557
939
1,496
60,377
939
61,316
Other commercial loans
1,713
516
2,229
134,472
1,696
136,168
Other agricultural loans
270
-
270
30,388
285
30,673
State and political subdivision loans
45
-
45
57,174
-
57,174
Unallocated
367
-
367
-
-
-
Total
$
19,181
$
1,972
$
21,153
$
2,235,955
$
12,881
$
2,248,836
 

Allowance for Credit Losses, prior to January 1, 2023


The allowance for credit losses consists of the allowance for loan losses and the reserve for unfunded lending commitments. The allowance for loan losses represents management’s estimate of incurred losses in the loan portfolio as of the balance sheet date and is recorded as a reduction to net loans. The reserve for unfunded lending commitments represents management’s estimate of incurred losses in unfunded commitments and letters of credit, and is recorded in other liabilities on the consolidated balance sheet. The allowance for credit losses is increased by charges to expense, through the provision for credit losses and decreased by charge-offs, net of recoveries. The following table presents the components of the allowance for credit losses as of December 31, 2022 (in thousands):

   
December 31, 2022
  
Allowance for loan Losses
  
$
18,552
  
Reserve for unfunded commitments
    
165
  
Total allowance for credit losses
  
$
18,717
  


The following table presents the activity in the allowance for credit losses for 2022 (in thousands):

   
Allowance for Credit Losses - Loans
    
Reserve for unfunded commitments
   
Total
  
Balance at December 31, 2021
  
$
17,304
    
$
165
    
$
17,469
  
Loans charge-off
    
(472
)
    
-
      
(472
)
Recoveries of loans previously charged-off
    
37
      
-
      
37
  
Net loans charged-off
    
(435
)
    
-
      
(435
)
Provision for credit losses
    
1,683
      
-
      
1,683
  
Balance at December 31, 2022
  
$
18,552
    
$
165
    
$
18,717
  


The following table presents the activity in the allowance for loan losses, by portfolio segment, for 2022 (in thousands).

   
Balance at
December 31, 2021
    
Charge-offs
    
Recoveries
    
Provision
    
Balance at
December 31, 2022
  
Real estate loans:
                              
Residential
  
$
1,147
    
$
-
    
$
-
    
$
(91
)
  
$
1,056
  
Commercial
    
8,099
      
-
      
3
      
2,018
      
10,120
  
Agricultural
    
4,729
      
-
      
-
      
(140
)
    
4,589
  
Construction
    
434
      
-
      
-
      
367
      
801
  
Consumer
    
262
      
(37
)
    
21
      
(111
)
    
135
  
Other commercial loans
    
1,023
      
(435
)
    
13
      
439
      
1,040
  
Other agricultural loans
    
558
      
-
      
-
      
(69
)
    
489
  
State and political subdivision loans
   
281
      
-
      
-
      
41
      
322
  
Unallocated
    
771
      
-
      
-
      
(771
)
    
-
  
Total
  
$
17,304
    
$
(472
)
  
$
37
    
$
1,683
    
$
18,552
  


Information presented in the following table is not required for periods after the adoption of CECL. The following table includes the average investment in impaired loans and the income recognized on impaired loans for 2022 (in thousands):

 

              
Interest
  
 
  
Average
    
Interest
    
Income
  
 
  
Recorded
    
Income
    
Recognized
  
2022
  
Investment
    
Recognized
    
Cash Basis
  
Real estate loans:
                  
     Mortgages
  
$
421
    
$
12
    
$
-
  
     Home Equity
    
64
      
4
      
-
  
     Commercial
    
6,216
      
207
      
10
  
     Agricultural
    
5,540
      
126
      
-
  
Consumer
    
1
      
-
      
-
  
Other commercial loans
    
260
      
3
      
-
  
Other agricultural loans
    
538
      
4
      
-
  
Total
  
$
13,040
    
$
356
    
$
10
  

 

Non-performing Loans


Non-performing loans include nonaccrual loans, described in more detail below, and all loans past due 90 or more days. Loans are considered for non-accrual status upon reaching 90 days delinquency, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans, or if full payment of principal and interest is not expected. Additionally, if management is made aware of other information including bankruptcy, repossession, death, or legal proceedings, the loan may be placed on non-accrual status. If a loan is 90 days or more past due and is well secured and in the process of collection, it may still be considered accruing.


The following table reflects the non-performing loan receivables, as well as those on non-accrual status as of December 31, 2024 and 2023, respectively. The balances are presented by class of loan receivable (in thousands):

        December 31, 2024          
December 31, 2023         
 
   
Nonaccrual
With a
related
allowance
    
Nonaccrual
Without a
related
allowance
    
90 days or
greater past
due and
accruing
    
Total non-
performing
loans
    
Nonaccrual
With a
related
allowance
    
Nonaccrual
Without a
related
allowance
    
90 days or
greater past
due and
accruing
    
Total
non-
performing
loans
  
Real estate loans:
                                                
Mortgages
  
$
165
    
$
2,541
    
$
-
    
$
2,706
    
$
315
     $
2,646    
$
-
    
$
2,961
  
Home Equity
    
-
      
165
      
-
      
165
      
-
       121      
18
      
139
  
Commercial
    
2,099
      
12,265
      
-
      
14,364
      
256
       879      
404
      
1,539
  
Agricultural
    
-
      
4,062
      
269
      
4,331
      
181
       2,489      
75
      
2,745
  
Construction
    
-
      
283
      
-
      
283
      
2,357
       -      
-
      
2,357
  
Consumer
    
1,002
      
-
      
7
      
1,009
      
701
       -      
13
      
714
  
Other commercial loans
    
2,382
      
200
      
-
      
2,582
      
588
       1,162      
6
      
1,756
  
Other agricultural loans
    
-
      
537
      
-
      
537
      
-
       492      
-
      
492
  
   
$
5,648
    
$
20,053
    
$
276
    
$
25,977
    
$
4,398
     $
7,789    
$
516
    
$
12,703
  
 

As of December 31, 2024 and 2023, there were $20.1 million and $7.8 million, respectively, of non-accrual loans that did not have a related allowance for credit losses. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to the realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.


The following table presents, by class of loans and leases, the amortized cost basis of collateral-dependent nonaccrual loans and leases and type of collateral as of  December 31, 2024 and 2023 (in thousands):

    December 31, 2024     December 31, 2023  

 
Real Estate
    
Other
    
None
    
Total
     Real Estate
    
Other
     None
     Total
  
Real estate loans:
                                                
Mortgages
  
$
2,706
    
$
-
    
$
-
    
$
2,706
     $ 2,961     $ -     $ -     $ 2,961  
Home Equity
    
165
      
-
      
-
      
165
       121       -       -       121  
Commercial
    
14,364
      
-
      
-
      
14,364
       1,135       -       -       1,135  
Agricultural
    
4,062
      
-
      
-
      
4,062
       2,670       -       -       2,670  
Construction
    
283
      
-
      
-
      
283
       2,357       -       -       2,357  
Consumer
    
-
      
-
      
1,002
      
1,002
       -       -       701       701  
Other commercial loans
    
-
      
2,582
      
-
      
2,582
       -       1,750       -       1,750  
Other agricultural loans
    
-
      
537
      
-
      
537
       -       492       -       492  
   
$
21,580
    
$
3,119
    
$
1,002
    
$
25,701
     $
 9,244     $
 2,242     $
 701     $
 12,187  

Credit Quality Information


For commercial real estate, agricultural real estate, construction, other commercial, other agricultural, and state and political subdivision loans, management uses an internal risk rating system to monitor and assess credit quality. During the third quarter of 2023, this rating system was expanded from a nine grade rating system to a ten grade rating system. The first six categories under the revised system are considered not criticized and are aggregated as “Pass” rated. Under the prior system, the first five categories were considered not criticized and aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The definitions of each rating are defined below:

•
Pass (Grades 1-6) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

•
Special Mention (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

•
Substandard (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and be characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

•
Doubtful (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that 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 (Grade 10) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted.


To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Company’s loan rating process includes several layers of internal and external oversight. The Company’s loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management.  All commercial, agricultural and state and political relationships over $500,000 are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Company engages an external consultant on at least an annual basis to: 1) review a minimum of 50% of the dollar volume of the commercial loan portfolio on an annual basis, 2) a large sample of relationships in aggregate over $1,000,000, 3) selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 4) such other loans which management or the consultant deems appropriate. As part of this review, our underwriting process and loan grading system is evaluated.


The following tables represent credit exposures by internally assigned grades, by origination year, as of December 31, 2024 and 2023 (in thousands):

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2024
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Commercial real estate
                                                      
Risk Rating
                                                      
Pass
  
$
52,122
    
$
84,465
    
$
360,989
    
$
200,869
    
$
114,839
    
$
223,601
    
$
28,178
    
$
1,786
    
$
1,066,849
  
Special Mention
    
-
      
810
      
3,495
      
1,874
      
1,372
      
8,501
      
1,674
      
-
      
17,726
  
Substandard
    
85
      
1,057
      
19,884
      
2,843
      
629
      
11,785
      
176
      
401
      
36,860
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
52,207
    
$
86,332
    
$
384,368
    
$
205,586
    
$
116,840
    
$
243,887
    
$
30,028
    
$
2,187
    
$
1,121,435
  
Current period gross charge-offs
  
$
-
   
$
 -
 		   
$
 -
 		   
$
 -
 		   
$
 -
 		   
$
 -
 		   
$
 -
 		   
$
 -
 		   
$
 -
 		 
                                                                         
Agricultural real estate
                                                                        
Risk Rating
                                                                        
Pass
  
$
32,199
    
$
22,372
    
$
46,644
    
$
26,132
    
$
29,770
    
$
126,876
    
$
14,351
    
$
115
    
$
298,459
  
Special Mention
    
2,930
      
3,138
      
7,109
      
-
      
-
      
5,315
      
2,248
      
-
      
20,740
  
Substandard
    
708
      
140
      
2,179
      
1,250
      
-
      
3,604
      
529
      
113
      
8,523
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
35,837
    
$
25,650
    
$
55,932
    
$
27,382
    
$
29,770
    
$
135,795
    
$
17,128
    
$
228
    
$
327,722
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Construction
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
48,026
    
$
56,916
    
$
34,995
    
$
-
    
$
-
    
$
-
    
$
1,355
    
$
-
    
$
141,292
  
Special Mention
    
-
      
-
      
19,391
      
2,950
      
-
      
-
      
-
      
-
      
22,341
  
Substandard
    
-
      
-
      
410
      
283
      
-
      
-
      
-
      
-
      
693
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
48,026
    
$
56,916
    
$
54,796
    
$
3,233
    
$
-
    
$
-
    
$
1,355
    
$
-
    
$
164,326
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Other commercial loans
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
33,211
    
$
22,808
    
$
6,773
    
$
7,542
    
$
2,150
    
$
3,464
    
$
44,871
    
$
75
    
$
120,894
  
Special Mention
    
20
      
-
      
1,798
      
178
      
62
      
56
      
4,888
      
32
      
7,034
  
Substandard
    
213
      
-
      
195
      
-
      
234
      
641
      
422
      
1,661
      
3,366
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
16
      
16
  
Total
  
$
33,444
    
$
22,808
    
$
8,766
    
$
7,720
    
$
2,446
    
$
4,161
    
$
50,181
    
$
1,784
    
$
131,310
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
59
    
$
-
    
$
-
    
$
-
    
$
2,502
    
$
-
    
$
2,561
  
                                                                         
Other agricultural loans
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
4,576
    
$
2,008
    
$
888
    
$
3,870
    
$
407
    
$
220
    
$
14,812
    
$
-
    
$
26,781
  
Special Mention
    
1,341
      
-
      
-
      
-
      
-
      
400
      
67
      
-
      
1,808
  
Substandard
    
-
      
354
      
455
      
9
      
-
      
113
      
131
      
11
      
1,073
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
5,917
    
$
2,362
    
$
1,343
    
$
3,879
    
$
407
    
$
733
    
$
15,010
    
$
11
    
$
29,662
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
State and political subdivision loans
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
-
    
$
1,442
    
$
13,460
    
$
10,522
    
$
5,319
    
$
23,439
    
$
-
    
$
-
    
$
54,182
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
-
    
$
1,442
    
$
13,460
    
$
10,522
    
$
5,319
    
$
23,439
    
$
-
    
$
-
    
$
54,182
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Total
                                    

                                 
Risk Rating
                                                                        
Pass
  
$
170,134
    
$
190,011
    
$
463,749
    
$
248,935
    
$
152,485
    
$
377,600
    
$
103,567
    
$
1,976
    
$
1,708,457
  
Special Mention
    
4,291
      
3,948
      
31,793
      
5,002
      
1,434
      
14,272
      
8,877
      
32
      
69,649
  
Substandard
    
1,006
      
1,551
      
23,123
      
4,385
      
863
      
16,143
      
1,258
      
2,186
      
50,515
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
16
      
16
  
Total
  
$
175,431
    
$
195,510
    
$
518,665
    
$
258,322
    
$
154,782
    
$
408,015
    
$
113,702
    
$
4,210
    
$
1,828,637
  

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Commercial real estate
                                                      
Risk Rating
                                                      
Pass
  
$
90,068
    
$
333,710
    
$
224,873
    
$
122,560
    
$
81,557
    
$
180,799
    
$
28,360
    
$
1,140
    
$
1,063,067
  
Special Mention
    
672
      
7,963
      
227
      
1,552
      
7,442
      
8,159
      
96
      
60
      
26,171
  
Substandard
    
-
      
1,302
      
6
      
-
      
158
      
1,444
      
317
      
422
      
3,649
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
90,740
    
$
342,975
    
$
225,106
    
$
124,112
    
$
89,157
    
$
190,402
    
$
28,773
    
$
1,622
    
$
1,092,887
  
Current period gross charge-offs
  
$
-
    
$
 -    
$
 -    
$
 -    
$
 -    
$
 -    
$
 -    
$
 -    
$
 -  
                                                                         
Agricultural real estate
                                                                        
Risk Rating
                                                                        
Pass
  
$
22,632
    
$
47,479
    
$
28,990
    
$
32,058
    
$
25,406
    
$
118,700
    
$
10,495
    
$
460
    
$
286,220
  
Special Mention
    
574
      
9,165
      
1,499
      
-
      
962
      
7,038
      
3,535
      
-
      
22,773
  
Substandard
    
-
      
-
      
-
      
-
      
102
      
5,394
      
75
      
238
      
5,809
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
23,206
    
$
56,644
    
$
30,489
    
$
32,058
    
$
26,470
    
$
131,132
    
$
14,105
    
$
698
    
$
314,802
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Construction
                                    
                                 
Risk Rating
                                    
                                 
Pass
  
$
54,973
    
$
102,562
    
$
22,508
    
$
-
    
$
-
    
$
-
    
$
839
    
$
1,166
    
$
182,048
  
Special Mention
    
1,574
      
5,432
      
4,415
      
-
      
-
      
-
      
-
      
-
      
11,421
  
Substandard
    
-
      
-
      
2,357
      
-
      
-
      
-
      
-
      
-
      
2,357
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
56,547
    
$
107,994
    
$
29,280
    
$
-
    
$
-
    
$
-
    
$
839
    
$
1,166
    
$
195,826
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Other commercial loans
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
31,493
    
$
11,407
    
$
9,016
    
$
4,793
    
$
4,758
    
$
3,530
    
$
63,285
    
$
93
    
$
128,375
  
Special Mention
    
51
      
52
      
1,510
      
184
      
223
      
629
      
1,652
      
36
      
4,337
  
Substandard
    
52
      
97
      
-
      
-
      
149
      
967
      
502
      
1,667
      
3,434
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
22
      
22
  
Total
  
$
31,596
    
$
11,556
    
$
10,526
    
$
4,977
    
$
5,130
    
$
5,126
    
$
65,439
    
$
1,818
    
$
136,168
  
Current period gross charge-offs
  
$
200
    
$
-
    
$
-
    
$
763
    
$
-
    
$
-
    
$
-
    
$
-
    
$
963
  
                                                                         
Other agricultural loans
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
3,902
    
$
1,520
    
$
6,448
    
$
1,046
    
$
532
    
$
305
    
$
15,331
    
$
-
    
$
29,084
  
Special Mention
    
-
      
473
      
16
      
42
      
-
      
-
      
488
      
29
      
1,048
  
Substandard
    
-
      
-
      
207
      
-
      
4
      
255
      
44
      
31
      
541
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
3,902
    
$
1,993
    
$
6,671
    
$
1,088
    
$
536
    
$
560
    
$
15,863
    
$
60
    
$
30,673
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
State and political subdivision loans
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
1,623
    
$
14,171
    
$
10,841
    
$
5,235
    
$
-
    
$
25,294
    
$
10
    
$
-
    
$
57,174
  
Special Mention
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Substandard
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Total
  
$
1,623
    
$
14,171
    
$
10,841
    
$
5,235
    
$
-
    
$
25,294
    
$
10
    
$
-
    
$
57,174
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Total
                                    
                                 
Risk Rating
                                                                        
Pass
  
$
204,691
    
$
510,849
    
$
302,676
    
$
165,692
    
$
112,253
    
$
328,628
    
$
118,320
    
$
2,859
    
$
1,745,968
  
Special Mention
    
2,871
      
23,085
      
7,667
      
1,778
      
8,627
      
15,826
      
5,771
      
125
      
65,750
  
Substandard
    
52
      
1,399
      
2,570
      
-
      
413
      
8,060
      
938
      
2,358
      
15,790
  
Doubtful
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
22
      
22
  
Total
  
$
207,614
    
$
535,333
    
$
312,913
    
$
167,470
    
$
121,293
    
$
352,514
    
$
125,029
    
$
5,364
    
$
1,827,530
  


For residential real estate mortgage loans, home equity loans, and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail above, and all loans past due 90 or more days and still accruing. The following table presents the recorded investment in those loan classes based on payment activity, by origination year, as of December 31, 2024 and 2023 (in thousands):

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2024
  
2024
    
2023
    
2022
    
2021
    
2020
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Residential real estate
                                                      
Payment Performance
                                                      
Performing
  
$
11,487
    
$
23,870
    
$
88,581
    
$
45,731
    
$
27,537
    
$
101,823
    
$
-
    
$
-
    
$
299,029
  
Nonperforming
    
-
      
-
      
382
      
751
      
463
      
1,110
      
-
      
-
      
2,706
  
Total
  
$
11,487
    
$
23,870
    
$
88,963
    
$
46,482
    
$
28,000
    
$
102,933
    
$
-
    
$
-
    
$
301,735
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
5
    
$
-
    
$
-
    
$
5
  
                                                                         
Home equity
                                    
-
                                  
Payment Performance
                                                                        
Performing
  
$
2,987
    
$
3,456
    
$
2,418
    
$
1,454
    
$
1,525
    
$
7,937
    
$
29,302
    
$
419
    
$
49,498
  
Nonperforming
    
-
      
-
      
-
      
-
      
83
      
82
      
-
      
-
      
165
  
Total
  
$
2,987
    
$
3,456
    
$
2,418
    
$
1,454
    
$
1,608
    
$
8,019
    
$
29,302
    
$
419
    
$
49,663
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Consumer
                                    
                                 
Payment Performance
                                                                        
Performing
  
$
2,076
    
$
880
    
$
589
    
$
543
    
$
317
    
$
2,520
    
$
125,272
    
$
1
    
$
132,198
  
Nonperforming
    
-
      
7
      
-
      
-
      
6
      
996
      
-
      
-
      
1,009
  
Total
  
$
2,076
    
$
887
    
$
589
    
$
543
    
$
323
    
$
3,516
    
$
125,272
    
$
1
    
$
133,207
  
Current period gross charge-offs
  
$
-
    
$
13
    
$
27
    
$
-
    
$
-
    
$
38
    
$
29
    
$
-
    
$
107
  
                                                                         
Total
                                    
                                 
Payment Performance
                                                                        
Performing
  
$
16,550
    
$
28,206
    
$
91,588
    
$
47,728
    
$
29,379
    
$
112,279
    
$
154,574
    
$
420
    
$
480,724
  
Nonperforming
    
-
      
7
      
382
      
751
      
552
      
2,189
      
-
      
-
      
3,881
  
Total
  
$
16,550
    
$
28,213
    
$
91,970
    
$
48,479
    
$
29,931
    
$
114,468
    
$
154,574
    
$
420
    
$
484,605
  

                                       
Revolving
    
Revolving
        
         
Loans
    
Loans
        
                                       
Amortized
    
Converted
        
December 31, 2023
  
2023
    
2022
    
2021
    
2020
    
2019
    
Prior
    
Cost Basis
    
to Term
    
Total
  
Residential real estate
                                                      
Payment Performance
                                                      
Performing
  
$
19,082
    
$
93,706
    
$
47,774
    
$
29,940
    
$
18,923
    
$
97,813
    
$
-
    
$
-
    
$
307,238
  
Nonperforming
    
-
      
399
      
766
      
396
      
-
      
1,400
      
-
      
-
      
2,961
  
Total
  
$
19,082
    
$
94,105
    
$
48,540
    
$
30,336
    
$
18,923
    
$
99,213
    
$
-
    
$
-
    
$
310,199
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
1
    
$
-
    
$
-
    
$
1
  
                                                                         
Home equity
                                    
                                 
Payment Performance
                                                                        
Performing
  
$
3,877
    
$
3,008
    
$
1,886
    
$
1,954
    
$
2,462
    
$
7,883
    
$
28,219
    
$
363
    
$
49,652
  
Nonperforming
    
-
      
-
      
-
      
-
      
-
      
72
      
67
      
-
      
139
  
Total
  
$
3,877
    
$
3,008
    
$
1,886
    
$
1,954
    
$
2,462
    
$
7,955
    
$
28,286
    
$
363
    
$
49,791
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
    
$
-
  
                                                                         
Consumer
                                    
                                 
Payment Performance
                                                                        
Performing
  
$
1,803
    
$
979
    
$
539
    
$
477
    
$
557
    
$
2,988
    
$
53,254
    
$
5
    
$
60,602
  
Nonperforming
    
-
      
21
      
-
      
-
      
-
      
693
      
-
      
-
      
714
  
Total
  
$
1,803
    
$
1,000
    
$
539
    
$
477
    
$
557
    
$
3,681
    
$
53,254
    
$
5
    
$
61,316
  
Current period gross charge-offs
  
$
-
    
$
-
    
$
-
    
$
-
    
$
1
    
$
341
    
$
23
    
$
-
    
$
365
  
                                                                         
Total
                                    
                                 
Payment Performance
                                                                        
Performing
  
$
24,762
    
$
97,693
    
$
50,199
    
$
32,371
    
$
21,942
    
$
108,684
    
$
81,473
    
$
368
    
$
417,492
  
Nonperforming
    
-
      
420
      
766
      
396
      
-
      
2,165
      
67
      
-
      
3,814
  
Total
  
$
24,762
    
$
98,113
    
$
50,965
    
$
32,767
    
$
21,942
    
$
110,849
    
$
81,540
    
$
368
    
$
421,306
  

Aging Analysis of Past Due Loan Receivables


Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loan receivables as of December 31, 2024 and 2023 (in thousands):

   
30-59 Days
    
60-89 Days
    
90 Days
   
Total Past
          
Total
Loans
    
90 Days or
Greater and
  
December 31, 2024
  
Past Due
    
Past Due
    
Or Greater
    
Due
    
Current
    
Receivables
    
Accruing
  
Real estate loans:
                                          
Mortgages
  
$
1,464
    
$
227
    
$
1,605
    
$
3,296
    
$
298,439
    
$
301,735
    
$
-
  
Home Equity
    
138
      
170
      
148
      
456
      
49,207
      
49,663
      
-
  
Commercial
    
2,782
      
1,360
      
6,528
      
10,670
      
1,110,765
      
1,121,435
      
-
  
Agricultural
    
1,569
      
140
      
1,845
      
3,554
      
324,168
      
327,722
      
269
  
Construction
    
1,119
      
-
      
283
      
1,402
      
162,924
      
164,326
      
-
  
Consumer
    
292
      
20
      
1,009
      
1,321
      
131,886
      
133,207
      
7
  
Other commercial loans
    
478
      
282
      
2,336
      
3,096
      
128,214
      
131,310
      
-
  
Other agricultural loans
    
403
      
-
      
-
      
403
      
29,259
      
29,662
      
-
  
State and political subdivision loans
   
-
      
-
      
-
      
-
      
54,182
      
54,182
      
-
  
Total
  
$
8,245
    
$
2,199
    
$
13,754
    
$
24,198
    
$
2,289,044
    
$
2,313,242
    
$
276
  
                                                         
Loans considered non-accrual
  
$
2,428
    
$
-
    
$
13,478
    
$
15,906
    
$
9,795
    
$
25,701
          
Loans still accruing
    
5,817
      
2,199
      
276
      
8,292
      
2,279,249
      
2,287,541
          
Total
  
$
8,245
    
$
2,199
    
$
13,754
    
$
24,198
    
$
2,289,044
    
$
2,313,242
          

   
30-59 Days
    
60-89 Days
    
90 Days
   
Total Past
          
Total
Loans
    
90 Days or
Greater and
December 31, 2023
  
Past Due
    
Past Due
    
Or Greater
    
Due
    
Current
    
Receivables
    
Accruing
Real estate loans:
                                        
Mortgages
  
$
2,682
    
$
360
    
$
2,240
    
$
5,282
    
$
304,917
    
$
310,199
    
$
-
Home Equity
    
145
      
67
      
71
      
283
      
49,508
      
49,791
      
18
Commercial
    
1,151
      
245
      
1,380
      
2,776
      
1,090,111
      
1,092,887
      
404
Agricultural
    
72
      
-
      
1,440
      
1,512
      
313,290
      
314,802
      
75
Construction
    
4,407
      
388
      
2,357
      
7,152
      
188,674
      
195,826
      
-
Consumer
    
16
      
282
      
23
      
321
      
60,995
      
61,316
      
13
Other commercial loans
    
670
      
366
      
319
      
1,355
      
134,813
      
136,168
      
6
Other agricultural loans
    
108
      
362
      
-
      
470
      
30,203
      
30,673
      
-
State and political subdivision loans
    
-
      
-
      
-
      
-
      
57,174
      
57,174
      
-
Total
  
$
9,251
    
$
2,070
    
$
7,830
    
$
19,151
    
$
2,229,685
    
$
2,248,836
    
$
516
                                                       
Loans considered non-accrual
  
$
199
    
$
666
    
$
7,314
    
$
8,179
    
$
4,008
    
$
12,187
        
Loans still accruing
    
9,052
      
1,404
      
516
      
10,972
      
2,225,677
      
2,236,649
        
Total
  
$
9,251
    
$
2,070
    
$
7,830
    
$
19,151
    
$
2,229,685
    
$
2,248,836
        

Modifications to Borrowers Experiencing Financial Difficulty


Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.


In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.


The following table shows the amortized cost basis, by class of loans receivable, information regarding accruing and nonaccrual modified loans to borrowers experiencing financial difficulty during 2024 (dollars in thousands):

   
For the year ended December 31, 2024
  
   
Number of loans
    
Amortized Cost Basis
    
% of Total Class of Financing Receivable
  
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Real estate loans:
              
Mortgages
    
1
    
$
12
      
0.00
%
Total
    
1
    
$
12
          
                         
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Other commercial loans
     1     $ 149       0.11 %
Total
    
1
    
$
149
          


The following table shows, by class of loans receivable, information regarding the financial effect on accruing and nonaccrual modified loans to borrowers experiencing financial difficulty during 2024:

Term Extension
Loan Type
  
Number of loans
  
Financial Effect
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Real estate loans:
          
Mortgages
    
1
  
Extended the loan maturity 4 months
Total
    
1
    
 
              
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
    
Other commercial loans
     1  
Extended the loan maturity 120 months
Total
    
1
    

There were no accruing or nonaccrual modified loans to borrowers experiencing financial difficulty that were modified during 2024 for which there were payment defaults after the modification date for 2024. The following table details loans modified during 2023 that were experiencing financial difficulty that had a payment default during the year ended December 31, 2024 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty:

 
  
Extended Loan Maturity
  
Real estate loans:
      
     Commercial
  
$
1,061
  
Total
  
$
1,061
  


The following presents, by class of loans, the amortized cost and payment status of accruing and nonaccrual modified loans to borrowers experiencing financial difficulty at December 31, 2024 (in thousands):

         
30-89 Days
    
90 Days
        
Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
  
Current
    
Past Due
    
Or Greater
    
Total
  
Real estate loans:
                        
Mortgages
  
$
12
    
$
-
    
$
-
    
$
12
  
Total
  
$
12
    
$
-
    
$
-
    
$
12
  

          30-89 Days
    90 Days
       
Non-Accruing Modified Loans to Borrowers Experiencing Financial Difficulty
   Current
    Past Due
    Or Greater
    Total
 
Other commercial loans
   $ 149     $ -     $ -     $ 149  
    Total
  
$
149
    
$
-
    
$
-
    
$
149
  
 

 Information presented in the table above is not required for periods prior to adoption of CECL. The following table presents the most comparable information for the prior period for troubled debt restructurings as of December 31, 2022 (in thousands).

 
 
  
Number of contracts
    
Pre-modification
Outstanding Recorded
Investment
    
Post-Modification Outstanding
Recorded Investment
  
2022
  
Interest Modification
    
Term Modification
    
Interest Modification
    
Term Modification
    
Interest Modification
    
Term Modification
  
 
                                    
Real estate loans:
                                    
     Home Equity
    
-
      
1
    
$
-
    
$
8
    
$
-
    
$
8
  
     Commercial
    
-
      
4
      
-
      
2,301
      
-
      
2,301
  
     Agricultural
    
-
      
2
      
-
      
1,137
      
-
      
1,137
  
Total
    
-
      
7
    
$
-
    
$
3,446
    
$
-
    
$
3,446
  

 

Recidivism, or the borrower defaulting on its obligation pursuant to a modified loan, results in the loan once again becoming a non-accrual loan. Recidivism occurs at a notably higher rate than do defaults on new origination loans, so modified loans present a higher risk of loss than do new origination loans. There was no recidivism or other defaults during the reporting periods for loans that were modified as TDRs during each 12-month period prior to the current reporting periods, which begin January 1, 2022.
 
Foreclosed Assets Held For Sale


Foreclosed assets acquired in settlement of loans are carried at fair value, less estimated costs to sell, and are included in other assets on the Consolidated Balance Sheet. As of December 31, 2024 and 2023, included with other assets are $2,635,000 and $474,000, respectively, of foreclosed assets. As of December 31, 2024, included within the foreclosed assets is $127,000 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of December 31, 2024, the Company has initiated formal foreclosure proceedings on $829,000 of consumer residential mortgages, which have not yet been transferred into foreclosed assets.