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Loans and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2025
Receivables [Abstract]  
Loans and Allowance for Credit Losses Loans and Allowance for Credit Losses
Loans
Major classifications within the Company’s loans held for investment portfolio at March 31, 2025 and December 31, 2024 were as follows:
(dollars in thousands)March 31, 2025December 31, 2024
Commercial, financial, and agricultural$202,405 $202,329 
Real estate construction − residential30,67032,046
Real estate construction − commercial75,05380,435
Real estate mortgage − residential376,026361,735
Real estate mortgage − commercial773,622775,594
Installment and other consumer12,54714,021
Total loans held for investment$1,470,323 $1,466,160 
The Bank grants real estate, commercial, installment, and other consumer loans to customers located within the Missouri communities surrounding Jefferson City, Columbia, Clinton, Warsaw, Springfield, and the greater Kansas City metropolitan area. As such, the Bank is susceptible to changes in the economic environment in these communities. The Bank does not have a concentration of credit in any one economic sector. Accrued interest on loans totaled $6.4 million and $6.5 million at March 31, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable and other assets on the Company's consolidated balance sheets. The total amount of accrued interest is excluded from the amortized cost basis of loans presented above. Further, the Company has elected not to measure an allowance for credit losses for accrued interest receivable. At March 31, 2025, loans of $733.7 million were pledged to the Federal Home Loan Bank (FHLB) as collateral for borrowings and letters of credit.
Allowance for Credit Losses
The allowance for credit losses is measured using a lifetime expected loss model that incorporates relevant information about past events, including historical credit loss experience on loans with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the loans. The allowance for credit losses is measured on a collective (pool) basis. Loans are aggregated into pools based on similar risk characteristics including borrower type, collateral type and expected credit loss patterns. Loans that do not share similar risk characteristics, primarily large loans on non-accrual status, are evaluated on an individual basis. The allowance for credit losses is a valuation account that is deducted from loans amortized cost basis to present the net amount expected to be collected on the instrument. Expected recoveries are included in the allowance and do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Loans are charged off against the allowance for credit losses when management believes the balance has become uncollectible.
Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures
The Company maintains a separate allowance for credit losses for off-balance-sheet credit exposures, including unfunded loan commitments, unless the associated obligation is unconditionally cancellable by the Company. This allowance is included in other liabilities on the consolidated balance sheets with associated expense recognized as a component of the provision for credit losses on the consolidated statements of income. The liability for unfunded lending commitments utilizes the same model as the allowance for credit losses on loans, however, the liability for unfunded lending commitments incorporates an assumption for the portion of unfunded commitments that are expected to be funded. The allowance for credit losses on unfunded commitments totaled $0.9 million at both March 31, 2025 and December 31, 2024, respectively.
Sensitivity in the Allowance for Credit Loss Model
The allowance for credit losses is an estimate that requires significant judgment including projections of the macroeconomic environment. The forecasted macroeconomic environment continuously changes, which can cause fluctuations in estimated expected losses.
The following tables illustrate the changes in the allowance for credit losses on loans by portfolio segment:
Three Months Ended March 31, 2025
(dollars in thousands)Commercial, Financial, & AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
Balance at beginning of period$1,560 $578 $2,221 $5,310 $12,305 $138 $(68)$22,044 
Charge-offs(13)— — (6)(33)(90)— (142)
Recoveries67 — — 8 58 27 — 160 
Provision for (release of) credit losses(167)5 (554)(178)278 42 292 (282)
Balance at end of period$1,447 $583 $1,667 $5,134 $12,608 $117 $224 $21,780 
Three Months Ended March 31, 2024
(dollars in thousands)Commercial, Financial, & AgriculturalReal Estate Construction - ResidentialReal Estate Construction - CommercialReal Estate Mortgage - ResidentialReal Estate Mortgage - CommercialInstallment and Other ConsumerUn- allocatedTotal
Balance at beginning of period$3,208 $1,043 $3,273 $5,264 $10,537 $232 $187 $23,744 
Charge-offs(30)— — (1)(23)(70)— (124)
Recoveries10 — — 1 — 44 — 55 
Provision for (release of) credit losses186 (371)(1,976)(155)2,343 (34)7 — 
Balance at end of period$3,374 $672 $1,297 $5,109 $12,857 $172 $194 $23,675 
Collateral-Dependent loans
Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. Under the CECL methodology, for collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance on the fair value of collateral.
The allowance is calculated on an individual loan basis based on the shortfall between the fair value of the loan’s collateral, which is adjusted for liquidation costs/discounts, and the loan’s amortized cost. If the fair value of the collateral exceeds the loan’s amortized cost, no allowance is necessary. The Company’s policy is to obtain appraisals on any significant pieces of collateral. Higher discounts are applied in determining fair value for real estate collateral in industries that are undergoing significant stress, or for properties that are specialized use or have limited marketability.
There have been no significant changes to the types of collateral securing the Company's collateral dependent loans since December 31, 2024.
The amortized cost of collateral-dependent loans by class as of March 31, 2025 and December 31, 2024 was as follows:
Collateral Type
(dollars in thousands)Real EstateOtherAllowance Allocated
March 31, 2025
Commercial, financial, and agricultural$— $766 $125 
Real estate construction − residential454 — 194 
Real estate mortgage − commercial65 — — 
Total$519 $766 $319 
December 31, 2024
Commercial, financial, and agricultural$— $766 $125 
Real estate construction − residential454 — 194 
Real estate mortgage − commercial65 — — 
Total$519 $766 $319 
Credit Quality
The Company categorizes loans into risk categories based upon an internal rating system reflecting management’s risk assessment.
•Pass - loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell in a timely manner, of any underlying collateral.
•Watch - loans that have one or more weaknesses identified that may result in the borrower being unable to meet repayment terms or when the Company’s credit position could deteriorate at some future date.
•Special Mention - loans that have negative financial trends, or other weaknesses that if left uncorrected, could threaten its capacity to meet its debt obligations. This is a transitional grade that is closely monitored by management for improvement or deterioration.
•Substandard - loans that are inadequately protected by the current sound worth and paying capacity of the obligor or by the collateral pledged, if any. Loans so classified may have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. Such loans are characterized by the distinct possibility that the Company may sustain some loss if the deficiencies are not corrected.
•Doubtful - loans that have all the weaknesses inherent in loans classified as Substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable on the basis of currently known facts, conditions, and values. These loans are also on non-accrual status.
•Non-accrual - loans that are delinquent for 90 days or more and the ultimate collectability of interest or principal is no longer probable. Real estate loans secured by one-to-four family residential properties are exempt from these non-accrual guidelines. These loans are placed on non-accrual status after they become 120 days past due (the majority of the Company's non-accrual loans have a substandard risk grade.)
The following table presents the recorded investment by risk categories at March 31, 2025:
Revolving
Loans
RevolvingConverted to
Term LoansLoansTerm Loans
Amortized Cost Basis by Origination Year and Risk GradesAmortizedAmortized
(dollars in thousands)20252024202320222021PriorCost BasisCost BasisTotal
March 31, 2025
Commercial, Financial, & Agricultural
Pass$8,661 $18,423 $18,139 $27,907 $23,671 $30,268 $64,472 $1,948 $193,489 
Watch57 110 110 1,693 — 257 720 — 2,947 
Special Mention— — — — — 297 468 — 765 
Substandard— — — 3,268 610 — — 403 4,281 
Non-accrual loans— 286 87 78 — 37 435 — 923 
Total$8,718 $18,819 $18,336 $32,946 $24,281 $30,859 $66,095 $2,351 $202,405 
Gross YTD charge-offs— — — — — 13 — — 13 
Real Estate Construction - Residential
Pass$1,952 $14,435 $12,438 $595 $611 $162 $— $23 $30,216 
Non-accrual loans— 454 — — — — — — 454 
Total$1,952 $14,889 $12,438 $595 $611 $162 $— $23 $30,670 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Construction - Commercial
Pass$5,702 $38,134 $7,975 $11,196 $3,372 $1,150 $6,397 $— $73,926 
Watch— 918 124 12 — — — — 1,054 
Substandard— — 29 — — — — — 29 
Non-accrual loans— — — — — 44 — — 44 
Total$5,702 $39,052 $8,128 $11,208 $3,372 $1,194 $6,397 $— $75,053 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Mortgage - Residential
Pass$25,855 $28,756 $45,534 $111,918 $47,519 $61,554 $44,691 $2,416 $368,243 
Watch4,050 1,429 — — 386 876 31 — 6,772 
Substandard59 — — — — 93 — — 152 
Doubtful— — — — — 9 — — 9 
Non-accrual loans90 — — 334 89 174 163 — 850 
Total$30,054 $30,185 $45,534 $112,252 $47,994 $62,706 $44,885 $2,416 $376,026 
Gross YTD charge-offs— — — — — 6 — — 6 
Real Estate Mortgage - Commercial
Pass$38,677 $55,397 $111,293 $205,864 $181,260 $120,790 $13,688 $86 $727,055 
Watch— 3,819 287 2,995 710 181 — 582 8,574 
Special Mention— 27,211 — 5,609 — — — — 32,820 
Substandard— — — 4,235 — 802 — — 5,037 
Non-accrual loans— — 64 72 — — — — 136 
Total$38,677 $86,427 $111,644 $218,775 $181,970 $121,773 $13,688 $668 $773,622 
Gross YTD charge-offs— — 12 — — 21 — — 33 
Installment and other Consumer
Pass$644 $1,852 $3,094 $3,069 $939 $2,851 $70 $— $12,519 
Non-accrual loans— — 18 2 — 8 — — 28 
Total$644 $1,852 $3,112 $3,071 $939 $2,859 $70 $— $12,547 
Gross YTD charge-offs— — 6 — — 84 — — 90 
Total Portfolio
Pass$81,491 $156,997 $198,473 $360,549 $257,372 $216,775 $129,318 $4,473 $1,405,448 
Watch4,107 6,276 521 4,700 1,096 1,314 751 582 19,347 
Special Mention— 27,211 — 5,609 — 297 468 — 33,585 
Substandard59 — 29 7,503 610 895 — 403 9,499 
Doubtful— — — — — 9 — — 9 
Non-accrual loans90 740 169 486 89 263 598 — 2,435 
Total$85,747 $191,224 $199,192 $378,847 $259,167 $219,553 $131,135 $5,458 $1,470,323 
Total Gross YTD charge-offs$— $— $18 $— $— $124 $— $— $142 
The following table presents the recorded investment by risk categories at December 31, 2024:
Revolving
Loans
RevolvingConverted to
Term LoansLoansTerm Loans
Amortized Cost Basis by Origination Year and Risk GradesAmortizedAmortized
(dollars in thousands)20232022202120202019PriorCost Basis Cost BasisTotal
December 31, 2024
Commercial, Financial, & Agricultural
Pass$22,726 $21,302 $30,025 $25,338 $26,557 $3,932 $62,205 $1,531 $193,616 
Watch— 120 1,473 — — 262 504 — 2,359 
Special Mention— — — — 309 — 741 — 1,050 
Substandard— — 3,350 628 — — — 403 4,381 
Doubtful— — — — — — 79 — 79 
Non-accrual loans286 87 78 — 37 — 356 — 844 
Total$23,012 $21,509 $34,926 $25,966 $26,903 $4,194 $63,885 $1,934 $202,329 
Gross YTD charge-offs— 230 — 104 2 106 1,796 — 2,238 
Real Estate Construction - Residential
Pass$16,368 $13,808 $601 $617 $165 $— $— $33 $31,592 
Non-accrual loans454 — — — — — — — 454 
Total$16,822 $13,808 $601 $617 $165 $— $— $33 $32,046 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Construction - Commercial
Pass$49,742 $7,057 $10,424 $3,828 $622 $564 $7,072 $— $79,309 
Watch911 124 13 — — — — — 1,048 
Substandard— 29 — — — — — — 29 
Non-accrual loans— — — — — 49 — — 49 
Total$50,653 $7,210 $10,437 $3,828 $622 $613 $7,072 $— $80,435 
Gross YTD charge-offs— — — — — — — — — 
Real Estate Mortgage - Residential
Pass$30,005 $46,795 $115,928 $49,519 $42,036 $23,440 $44,148 $1,543 $353,414 
Watch5,702 — 40 391 423 675 30 — 7,261 
Substandard— — — — — 98 — — 98 
Non-accrual loans— — 426 89 — 278 169 — 962 
Total$35,707 $46,795 $116,394 $49,999 $42,459 $24,491 $44,347 $1,543 $361,735 
Gross YTD charge-offs— — — — — 14 37 — 51 
Real Estate Mortgage - Commercial
Pass$56,648 $117,853 $212,698 $203,591 $69,342 $57,352 $14,815 $137 $732,436 
Watch2,298 51 4,763 1,961 — 184 — 581 9,838 
Special Mention27,271 — 5,679 — — — — — 32,950 
Substandard— — 231 — — — — — 231 
Non-accrual loans64 75 — — — — — — 139 
Total$86,281 $117,979 $223,371 $205,552 $69,342 $57,536 $14,815 $718 $775,594 
Gross YTD charge-offs— 340 — 65 — 32 — — 437 
Installment and other Consumer
Pass$2,188 $3,636 $3,591 $1,165 $554 $2,805 $72 $— $14,011 
Non-accrual loans— — — — — 10 — — 10 
Total$2,188 $3,636 $3,591 $1,165 $554 $2,815 $72 $— $14,021 
Gross YTD charge-offs10 11 9 3 1 230 1 — 265 
Total Portfolio
Pass$177,677 $210,451 $373,267 $284,058 $139,276 $88,093 $128,312 $3,244 $1,404,378 
Watch8,911 295 6,289 2,352 423 1,121 534 581 20,506 
Special Mention27,271 — 5,679 — 309 — 741 — 34,000 
Substandard— 29 3,581 628 — 98 — 403 4,739 
Doubtful— — — — — — 79 — 79 
Non-accrual loans804 162 504 89 37 337 525 — 2,458 
Total$214,663 $210,937 $389,320 $287,127 $140,045 $89,649 $130,191 $4,228 $1,466,160 
Total Gross YTD charge-offs$10 $581 $9 $172 $3 $382 $1,834 $— $2,991 
Delinquent and Non-Accrual Loans
The delinquency status of loans is determined based on the contractual terms of the notes. Loans are generally classified as delinquent once payments become 30 days or more past due. The Company’s policy is to discontinue the accrual of interest income on any loan when, in the opinion of management, the ultimate collectability of interest or principal is no longer probable. In general, loans are placed on non-accrual status when they become 90 days or more past due. However, management considers many factors before placing a loan on non-accrual status, including the delinquency status of the loan, the overall financial condition of the borrower, the progress of management’s collection efforts and the value of the underlying collateral. Subsequent interest payments received on non-accrual loans are applied to principal if any doubt exists as to the collectability of such principal; otherwise, such receipts are recorded as interest income on a cash basis. Non-accrual loans are returned to accrual status when, in the opinion of management, the financial condition of the borrower indicates that the timely collectability of interest and principal is probable and the borrower demonstrates the ability to pay under the terms of the note through a sustained period of repayment performance, which is generally six months.
The following table presents the recorded investment in non-accrual loans and loans past due over 90 days still on accrual by class of loans as of March 31, 2025 and December 31, 2024:
(dollars in thousands)Non-accrual with no AllowanceNon-accrual with AllowanceTotal Non-accrual90 Days Past Due And Still AccruingTotal Non-performing Loans
March 31, 2025
Commercial, Financial, and Agricultural$— $923 $923 $— $923 
Real estate construction − residential— 454 454 — 454 
Real estate construction − commercial— 44 44 — 44 
Real estate mortgage − residential— 859 859 — 859 
Real estate mortgage − commercial— 136 136 — 136 
Installment and Other Consumer— 28 28 17 45 
Total$— $2,444 $2,444 $17 $2,461 
December 31, 2024
Commercial, Financial, and Agricultural$— $923 $923 $— $923 
Real estate construction − residential— 454 454 —454 
Real estate construction − commercial— 49 49 —49 
Real estate mortgage − residential— 963 963 2071,170 
Real estate mortgage − commercial— 138 138 —138 
Installment and Other Consumer— 10 10 3 13 
Total$— $2,537 $2,537 $210 $2,747 
No material amount of interest income was recognized on non-accrual loans during the three months ended March 31, 2025.
The following table provides aging information for the Company’s past due and non-accrual loans at March 31, 2025 and December 31, 2024.
(dollars in thousands)Current or Less Than 30 Days Past Due30 - 89 Days Past Due90 Days Past Due And Still AccruingNon-AccrualTotal
March 31, 2025
Commercial, Financial, and Agricultural$201,115 $367 $— $923 $202,405 
Real estate construction − residential30,216 — — 454 30,670 
Real estate construction − commercial74,737 272 — 44 75,053 
Real estate mortgage − residential373,371 1,796 — 859 376,026 
Real estate mortgage − commercial763,223 10,263 — 136 773,622 
Installment and Other Consumer12,403 99 17 28 12,547 
Total$1,455,065 $12,797 $17 $2,444 $1,470,323 
December 31, 2024
Commercial, Financial, and Agricultural$201,201 $205 $— $923 $202,329 
Real estate construction − residential31,592 — — 454 32,046 
Real estate construction − commercial80,386 — — 49 80,435 
Real estate mortgage − residential358,393 2,172 207 963 361,735 
Real estate mortgage − commercial773,918 1,538 — 138 775,594 
Installment and Other Consumer13,900 108 3 10 14,021 
Total$1,459,390 $4,023 $210 $2,537 $1,466,160 
Loan Modifications for Borrowers Experiencing Financial Difficulty
In the normal course of business, the Company may execute loan modifications with borrowers. These modifications are analyzed to determine whether the modification is considered concessionary, long-term and made to a borrower experiencing financial difficulty. The Company’s modifications generally include interest rate adjustments, principal reductions, and amortization and maturity date extensions. If a loan modification is determined to be made to a borrower experiencing financial difficulty, the loan is considered collateral-dependent and evaluated as part of the allowance for credit losses as described above in the Allowance for Credit Losses section of this note.

For the three months ended March 31, 2025, the Company did not modify any loans made to borrowers experiencing financial difficulty. The Company monitors loan payments on an on-going basis to determine if a loan is considered to have a payment default. Determination of payment default involves analyzing the economic conditions that exist for each customer and their ability to generate positive cash flows during the loan term.
Loans Held for Sale
The Company designates certain long-term fixed rate personal real estate loans as held for sale. Loans held for sale are being carried at the lower of cost or estimated fair value. The loans are primarily sold to Freddie Mac, Fannie Mae, PennyMac, and various other secondary market investors. At March 31, 2025, the carrying amount of these loans was $0.2 million compared to no loans at December 31, 2024.