Allowance for Loan Losses (Tables)

12 Months Ended

Dec. 31, 2023

Changes in the Allowance for Credit Losses and Loan Balances Outstanding

The following tables present, by portfolio segment, the changes in the allowance for credit losses, the ending allocation of the allowance for losses and the loan balances outstanding for the years ended December 31, 2023, 2022 and 2021.

Allowance for credit losses:

December 31, 2023	Beginning balance		CECL Adoption Day 1 Impact			Impact of Adopting ASC 326 - PCD Loans 1		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	3,011	$	429		$	—	$	(1,300	)	$	177	$	5,270		$	7,587
Commercial Real Estate:
Owner Occupied		4,565		1,075			19		—			15		(951	)		4,723
Non-Owner Occupied		14,138		(2,847	)		—		—			46		719			12,056
Residential Real Estate		3,145		2,762			166		(17	)		134		2,299			8,489
Real Estate Construction		2,293		1,502			—		—			37		(444	)		3,388
Farm Real Estate		291		(28	)		—		—			—		(3	)		260
Lease Financing Receivable		429		1,743			635		—			—		(2,510	)		297
Consumer and Other		98		201			77		(114	)		43		36			341
Unallocated		541		(541	)		—		—			—		19			19
Total	$	28,511	$	4,296		$	897	$	(1,431	)	$	452	$	4,435		$	37,160
1 Day 1 impact of $1,668 of adopting ASC 326-PCD loans was netted by changes in estimates of $771

Allowance for loan losses:

December 31, 2022	Beginning Balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,600	$	(22	)	$	24	$	409		$	3,011
Commercial Real Estate:
Owner Occupied		4,464		—			42		59			4,565
Non-Owner Occupied		13,860		—			74		204			14,138
Residential Real Estate		2,597		(97	)		163		482			3,145
Real Estate Construction		1,810		—			4		479			2,293
Farm Real Estate		287		—			6		(2	)		291
Lease Financing Receivable		0		(23	)				452			429
Consumer and Other		176		(80	)		27		(25	)		98
Unallocated		847		—			—		(306	)		541
Total	$	26,641	$	(222	)	$	340	$	1,752		$	28,511

Allowance for loan losses:

December 31, 2021	Beginning Balance		Charge-offs			Recoveries		Provision (Credit)			Ending Balance
Commercial & Agriculture	$	2,810	$	(15	)	$	165	$	(360	)	$	2,600
Commercial Real Estate:
Owner Occupied		4,057		—			7		400			4,464
Non-Owner Occupied		12,451		—			395		1,014			13,860
Residential Real Estate		2,484		(120	)		302		(69	)		2,597
Real Estate Construction		2,439		—			1		(630	)		1,810
Farm Real Estate		338		—			12		(63	)		287
Consumer and Other		209		(24	)		60		(69	)		176
Unallocated		240		—			—		607			847
Total	$	25,028	$	(159	)	$	942	$	830		$	26,641

The following table present, by portfolio segment, the allocation of the allowance for loan losses and related loan balances as of December 31, 2022.

December 31, 2022	Loans acquired with credit deterioration		Loans individually evaluated for impairment		Loans collectively evaluated for impairment		Total
Allowance for loan losses:
Commercial & Agriculture	$	6	$	—	$	3,005	$	3,011
Commercial Real Estate:
Owner Occupied		3		6		4,556		4,565
Non-Owner Occupied		—		—		14,138		14,138
Residential Real Estate		—		1		3,144		3,145
Real Estate Construction		—		—		2,293		2,293
Farm Real Estate		—		—		291		291
Lease Financing Receivables		—		—		429		429
Consumer and Other		—		—		98		98
Unallocated		—		—		541		541
Total	$	9	$	7	$	28,495	$	28,511
Outstanding loan balances:
Commercial & Agriculture	$	863	$	—	$	277,732	$	278,595
Commercial Real Estate:
Owner Occupied		1,988		232		368,927		371,147
Non-Owner Occupied		119		—		1,018,617		1,018,736
Residential Real Estate		1,414		392		550,975		552,781
Real Estate Construction		—		—		243,127		243,127
Farm Real Estate		—		—		24,708		24,708
Lease Financing Receivables		—		—		36,797		36,797
Consumer and Other		1		—		20,774		20,775
Total	$	4,385	$	624	$	2,541,657	$	2,546,666

Credit Exposures by Internally Assigned Grades

	Term Loans Amortized Cost Basis by Origination Year
															Revolving
															Loans
													Revolving		Converted
December 31, 2023	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Commercial & Agriculture
Pass	$	56,359	$	64,250	$	52,258	$	17,622	$	9,516	$	14,088	$	82,982	$	—	$	297,075
Special Mention		774		—		287		1,690		—		106		169		—		3,026
Substandard		396		86		67		131		271		73		3,668		—		4,692
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial & Agriculture	$	57,529	$	64,336	$	52,612	$	19,443	$	9,787	$	14,267	$	86,819	$	—	$	304,793
Commercial & Agriculture:
Current-period gross charge-offs	$	—	$	673	$	532	$	—	$	—	$	95	$	—	$	—	$	1,300
Commercial Real Estate - Owner Occupied
Pass	$	36,030	$	82,502	$	67,904	$	56,069	$	29,784	$	92,750	$	5,844	$	—	$	370,883
Special Mention		526		217		739		517		-		188		—		—		2,187
Substandard		—		231		—		—		3,098		922		—		—		4,251
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Owner Occupied	$	36,556	$	82,950	$	68,643	$	56,586	$	32,882	$	93,860	$	5,844	$	—	$	377,321
Commercial Real Estate - Owner Occupied:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial Real Estate - Non-Owner Occupied
Pass	$	183,439	$	269,334	$	198,832	$	136,031	$	120,659	$	206,267	$	23,016	$	—	$	1,137,578
Special Mention		—		5,774		6,171		—		-		8,688		277		—		20,910
Substandard		—		—		—		—		122		3,284		—		—		3,406
Doubtful		—		—		—		—		—		—		—		—		—
Total Commercial Real Estate - Non-Owner Occupied	$	183,439	$	275,108	$	205,003	$	136,031	$	120,781	$	218,239	$	23,293	$	—	$	1,161,894
Commercial Real Estate - Non-Owner Occupied:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential Real Estate
Pass	$	90,770	$	124,695	$	97,661	$	71,379	$	33,534	$	78,894	$	157,083	$	—	$	654,016
Special Mention		—		—		221		97		—		245		—		—		563
Substandard		186		342		684		82		582		2,063		1,323		—		5,262
Doubtful		—		—		—		—		—		—		—		—		—
Total Residential Real Estate	$	90,956	$	125,037	$	98,566	$	71,558	$	34,116	$	81,202	$	158,406	$	—	$	659,841
Residential Real Estate:
Current-period gross charge-offs	$	—	$	6	$	—	$	—	$	—	$	11	$	—	$	—	$	17

NOTE 5 - ALLOWANCE FOR CREDIT LOSSES (Continued)

															Revolving
															Loans
													Revolving		Converted
December 31, 2023	2023		2022		2021		2020		2019		Prior		Loans		to Term		Total
Real Estate Construction
Pass	$	108,606	$	105,222	$	20,960	$	6,739	$	2,699	$	2,635	$	9,335	$	—	$	256,196
Special Mention		—		1,226		926		2,019		—		—		—		—		4,171
Substandard		—		—		42		—		—		—		—		—		42
Doubtful		—		—		—		—		—		—		—		—		—
Total Real Estate Construction	$	108,606	$	106,448	$	21,928	$	8,758	$	2,699	$	2,635	$	9,335	$	—	$	260,409
Real Estate Construction:
Current-period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Farm Real Estate
Pass	$	2,207	$	967	$	2,256	$	4,462	$	789	$	12,528	$	1,292	$	—	$	24,501
Special Mention		—		—		—		—		—		20		—		—		20
Substandard		—		—		—		—		—		250		—		—		250
Doubtful		—		—		—		—		—		—		—		—		—
Total Farm Real Estate	$	2,207	$	967	$	2,256	$	4,462	$	789	$	12,798	$	1,292	$	—	$	24,771
Farm Real Estate:
Current-period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Lease Financing Receivables
Pass	$	28,177	$	13,924	$	6,620	$	3,678	$	1,725	$	1	$	—	$	—	$	54,125
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		8		38		61		231		17		—		—		355
Doubtful		—		139		—		15		8		—		—		—		162
Total Lease Financing Receivables	$	28,177	$	14,071	$	6,658	$	3,754	$	1,964	$	18	$	—	$	—	$	54,642
Lease Financing Receivables:
Current-period charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer and Other
Pass	$	6,510	$	4,135	$	3,615	$	1,578	$	509	$	248	$	1,424	$	—	$	18,019
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		2		14		15		—		6		—		—		37
Doubtful		—		—		—		—		—		—		—		—		—
Total Consumer and Other	$	6,510	$	4,137	$	3,629	$	1,593	$	509	$	254	$	1,424	$	—	$	18,056
Consumer and Other:
Current-period charge-offs	$	6	$	40	$	40	$	7	$	13	$	3	$	5	$	—	$	114
Total Loans	$	513,980	$	673,054	$	459,295	$	302,185	$	203,527	$	423,273	$	286,413	$	—	$	2,861,727
Total Loans:
Current-period charge-offs	$	7	$	719	$	572	$	7	$	13	$	109	$	5	$	—	$	1,431

NOTE 5 - ALLOWANCE FOR CREDIT LOSSES (Continued)

December 31, 2022	Pass		Special Mention		Substandard		Doubtful		Ending Balance
Commercial & Agriculture	$	273,291	$	2,558	$	2,746	$	—	$	278,595
Commercial Real Estate:
Owner Occupied		367,652		734		2,761		—		371,147
Non-Owner Occupied		1,003,942		10,947		3,847		—		1,018,736
Residential Real Estate		114,021		183		5,787		—		119,991
Real Estate Construction		198,734		—		221		—		198,955
Farm Real Estate		24,283		379		46		—		24,708
Lease Financing Receivables		36,223		—		401		173		36,797
Consumer and Other		839		—		163		—		1,002
Total	$	2,018,985	$	14,801	$	15,972	$	173	$	2,049,931

Performing and Nonperforming Loans

December 31, 2022	Residential Real Estate		Real Estate Construction		Consumer and Other		Total
Performing	$	432,790	$	44,172	$	19,773	$	496,735
Nonperforming		—		—		—		—
Total	$	432,790	$	44,172	$	19,773	$	496,735

Aging Analysis of Past Due Loans

The following tables include an aging analysis of the recorded investment of past due loans outstanding as of December 31, 2023 and 2022.

December 31, 2023	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	1,228	$	471	$	1,999	$	3,698	$	301,095	$	304,793	$	73
Commercial Real Estate:
Owner Occupied		4		—		123		127		377,194		377,321		—
Non-Owner Occupied		—		—		—		0		1,161,894		1,161,894		—
Residential Real Estate		4,581		1,180		1,642		7,403		652,438		659,841		—
Real Estate Construction		—		—		—		—		260,409		260,409		—
Farm Real Estate		—		—		—		—		24,771		24,771		—
Lease Financing Receivables		950		410		373		1,733		52,909		54,642		—
Consumer and Other		172		23		2		197		17,859		18,056		—
Total	$	6,935	$	2,084	$	4,139	$	13,158	$	2,848,569	$	2,861,727	$	73

December 31, 2022	30-59 Days Past Due		60-89 Days Past Due		90 Days or Greater		Total Past Due		Current		Purchased Credit- Impaired Loans		Total Loans		Past Due 90 Days and Accruing
Commercial & Agriculture	$	247	$	78	$	534	$	859	$	276,873	$	863	$	278,595	$	—
Commercial Real Estate:
Owner Occupied		21		13		76		110		369,049		1,988		371,147		—
Non-Owner Occupied		—		—		1,164		1,164		1,017,453		119		1,018,736		—
Residential Real Estate		3,133		857		1,107		5,097		546,270		1,414		552,781		—
Real Estate Construction		—		—		219		219		242,908		—		243,127		—
Farm Real Estate		7		—		—		7		24,701		—		24,708		—
Lease Financing Receivables		1,040		—		341		1,381		35,416		—		36,797
Consumer and Other		293		49		74		416		20,358		1		20,775		—
Total	$	4,741	$	997	$	3,515	$	9,253	$	2,533,028	$	4,385	$	2,546,666	$	—

Summary of Nonaccrual Loans Excluding PCI Loans

The following table presents loans on nonaccrual status as of December 31, 2023.

December 31, 2023	Nonaccrual loans with a related ACL		Nonaccrual loans without a related ACL		Total Nonaccrual loans		Interest Income Recognized
Commercial & Agriculture	$	914	$	4,891	$	5,805	$	9
Commercial Real Estate:
Owner Occupied		269		3		272		7
Non-Owner Occupied		—		1,167		1,167		—
Residential Real Estate		—		4,633		4,633		26
Real Estate Construction		—		41		41		—
Farm Real Estate		—		—		—		—
Lease Financing Receivables		15		492		507		—
Consumer and Other		—		42		42		4
Total	$	1,198	$	11,269	$	12,467	$	46

NOTE 5 - ALLOWANCE FOR CREDIT LOSSES (Continued)

The following table presents loans on nonaccrual status as of December 31, 2022, excluding PCI loans.

	2022
Commercial & Agriculture	$	774
Commercial Real Estate:
Owner Occupied		386
Non-Owner Occupied		1,109
Residential Real Estate		3,926
Real Estate Construction		221
Farm Real Estate		—
Lease Financing Receivables		—
Consumer and Other		91
Total	$	6,507

Schedule of Amortized Cost Basis of Collateral Dependent Loans Individually Evaluated Expected Credit Losses and Related Allowance for Credit Losses

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans.

December 31, 2023	Real Estate		Other		Allowance for Credit Losses
Commercial & Agriculture	$	—	$	4,674	$	945
Commercial Real Estate:
Owner Occupied		308		—		37
Non-Owner Occupied		1,167		—		268
Residential Real Estate		149		—		—
Real Estate Construction		—		—		—
Farm Real Estate		—		—		—
Lease Financing Receivables		—		61		15
Consumer and Other		—		—		—
Total	$	1,624	$	4,735	$	1,265

Impaired Financing Receivables Excluding PCI Loans

The following table includes the recorded investment and unpaid principal balances for impaired financing receivables, excluding PCI loans, with the associated allowance amount, if applicable, as of December 31, 2022.

	December 31, 2022
	Recorded Investment		Unpaid Principal Balance		Related Allowance
With no related allowance recorded:
Commercial Real Estate:
Owner Occupied	$	82	$	82
Non-Owner Occupied		—		—
Residential Real Estate		385		410
Farm Real Estate		—		—
Total		467		492
With an allowance recorded:
Commercial Real Estate:
Owner Occupied		150		150	$	6
Residential Real Estate		7		11		1
Total		157		161		7
Total:
Commercial & Agriculture		—		—		—
Commercial Real Estate:
Owner Occupied		232		232		6
Non-Owner Occupied		—		—		—
Residential Real Estate		392		421		1
Farm Real Estate		—		—		—
Total	$	624	$	653	$	7

The following tables include the average recorded investment and interest income recognized for impaired financing receivables as of, and for the years ended, December 31, 2022 and 2021.

For the year ended:	December 31, 2022				December 31, 2021
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
Commercial & Agriculture	$	86	$	3	$	15	$	0
Commercial Real Estate:
Owner Occupied		406		22		396		18
Non-Owner Occupied		35		1		23		1
Residential Real Estate		614		33		629		31
Farm Real Estate		381		14		569		24
Total	$	1,522	$	73	$	1,632	$	74

Schedule of Changes in Amortized Yield for PCI Loans

Changes in the amortizable yield for PCI loans were as follows, since acquisition:

	At December 31, 2022			At December 31, 2021
	(In Thousands)			(In Thousands)
Balance at beginning of period	$	217		$	225
Acquisition of PCI loans		—			—
Accretion		(36	)		(77	)
Transfers from non-accretable to accretable		33			69
Balance at end of period	$	214		$	217

Schedule of Loans Acquired and Accounted

The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30:

	At December 31, 2022		At December 31, 2021
	Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)		Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30)
	(In Thousands)
Outstanding balance	$	5,220	$	512
Carrying amount		4,386		290

Schedule Of Allowance For Credit Losses On Off-balance Sheet Credit Exposures

The following table lists the allowance for credit losses on off-balance sheet credit exposures as of December 31, 2023:

	Twelve Months Ended
	December 31,
	2023		2022
Beginning of Period	—			—
CECL adoption adjustments		3,386		—
Charge-offs		—		—
Recoveries		—		—
Provision		515		—
End of Period	$	3,901		—