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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY | 9 Months Ended
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Sep. 30, 2023
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY |
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY | ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY The Company maintains an allowance for credit losses to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectable. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for credit losses is taken based on management’s ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control. The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision. The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers’ ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default (“PD/LGD”) model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, material modification status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a default rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee’s Summary of Economic Projections, and other environmental factors based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover probable losses inherent in the loan portfolio. Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate it should be evaluated on an individual basis. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) the sufficiency of the customer’s cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring. Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. General allocations of the allowance are determined by a historical loss rate based on the calculation of each pool’s probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool. The historical loss rates are supplemented with consideration of economic conditions and portfolio trends. Due to the imprecise nature of estimating the allowance for credit losses, the Company’s allowance for credit losses includes an immaterial unallocated component. The unallocated component of the allowance for credit losses incorporates the Company’s judgmental determination of potential expected losses that may not be fully reflected in other allocations. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income. For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company’s position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability recorded. The following tables present the activity in the allowance for credit losses by portfolio segment for the periods ended:
(dollars in thousands) |  | Commercial and Industrial |  | Commercial Real Estate and Multifamily Residential |  | Agri-business and Agricultural |  | Other Commercial |  | Consumer 1-4 Family Mortgage |  | Other Consumer |  | Unallocated |  | Total
Three Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, July 1 |  | $ | 30,978 |  |  | $ | 30,913 |  |  | $ | 4,402 |  |  | $ | 1,120 |  |  | $ | 3,448 |  |  | $ | 846 |  |  | $ | 351 |  |  | $ | 72,058 |
Provision for credit losses |  | (167) |  |  | 230 |  |  | (139) |  |  | (102) |  |  | 197 |  |  | 283 |  |  | 98 |  |  | 400 |
Loans charged-off |  | (193) |  |  | 0 |  |  | 0 |  |  | 0 |  |  | (149) |  |  | (138) |  |  | 0 |  |  | (480) |
Recoveries |  | 21 |  |  | 12 |  |  | 0 |  |  | 0 |  |  | 3 |  |  | 91 |  |  | 0 |  |  | 127 |
Net loans (charged-off) recovered |  | (172) |  |  | 12 |  |  | 0 |  |  | 0 |  |  | (146) |  |  | (47) |  |  | 0 |  |  | (353) |
Ending balance |  | $ | 30,639 |  |  | $ | 31,155 |  |  | $ | 4,263 |  |  | $ | 1,018 |  |  | $ | 3,499 |  |  | $ | 1,082 |  |  | $ | 449 |  |  | $ | 72,105 |
(dollars in thousands) |  | Commercial and Industrial |  | Commercial Real Estate and Multifamily Residential |  | Agri-business and Agricultural |  | Other Commercial |  | Consumer 1-4 Family Mortgage |  | Other Consumer |  | Unallocated |  | Total
Three Months Ended September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, July 1 |  | $ | 31,195 |  |  | $ | 26,448 |  |  | $ | 4,753 |  |  | $ | 713 |  |  | $ | 2,674 |  |  | $ | 1,093 |  |  | $ | 647 |  |  | $ | 67,523 |
Provision for credit losses |  | 1,357 |  |  | (678) |  |  | (547) |  |  | 16 |  |  | (197) |  |  | 71 |  |  | (22) |  |  | 0 |
Loans charged-off |  | (222) |  |  | 0 |  |  | 0 |  |  | 0 |  |  | (20) |  |  | (131) |  |  | 0 |  |  | (373) |
Recoveries |  | 18 |  |  | 25 |  |  | 0 |  |  | 0 |  |  | 3 |  |  | 43 |  |  | 0 |  |  | 89 |
Net loans (charged-off) recovered |  | (204) |  |  | 25 |  |  | 0 |  |  | 0 |  |  | (17) |  |  | (88) |  |  | 0 |  |  | (284) |
Ending balance |  | $ | 32,348 |  |  | $ | 25,795 |  |  | $ | 4,206 |  |  | $ | 729 |  |  | $ | 2,460 |  |  | $ | 1,076 |  |  | $ | 625 |  |  | $ | 67,239 |
(dollars in thousands) |  | Commercial and Industrial |  | Commercial Real Estate and Multifamily Residential |  | Agri-business and Agricultural |  | Other Commercial |  | Consumer 1-4 Family Mortgage |  | Other Consumer |  | Unallocated |  | Total
Nine Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, January 1 |  | $ | 35,290 |  |  | $ | 27,394 |  |  | $ | 4,429 |  |  | $ | 917 |  |  | $ | 3,001 |  |  | $ | 1,021 |  |  | $ | 554 |  |  | $ | 72,606 |
Provision for credit losses |  | 1,065 |  |  | 3,465 |  |  | (166) |  |  | 101 |  |  | 642 |  |  | 548 |  |  | (105) |  |  | 5,550 |
Loans charged-off |  | (5,844) |  |  | 0 |  |  | 0 |  |  | 0 |  |  | (163) |  |  | (759) |  |  | 0 |  |  | (6,766) |
Recoveries |  | 128 |  |  | 296 |  |  | 0 |  |  | 0 |  |  | 19 |  |  | 272 |  |  | 0 |  |  | 715 |
Net loans (charged-off) recovered |  | (5,716) |  |  | 296 |  |  | 0 |  |  | 0 |  |  | (144) |  |  | (487) |  |  | 0 |  |  | (6,051) |
Ending balance |  | $ | 30,639 |  |  | $ | 31,155 |  |  | $ | 4,263 |  |  | $ | 1,018 |  |  | $ | 3,499 |  |  | $ | 1,082 |  |  | $ | 449 |  |  | $ | 72,105 |
(dollars in thousands) |  | Commercial and Industrial |  | Commercial Real Estate and Multifamily Residential |  | Agri-business and Agricultural |  | Other Commercial |  | Consumer 1-4 Family Mortgage |  | Other Consumer |  | Unallocated |  | Total
Nine Months Ended September 30, 2022 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance, January 1 |  | $ | 30,595 |  |  | $ | 26,535 |  |  | $ | 5,034 |  |  | $ | 1,146 |  |  | $ | 2,866 |  |  | $ | 1,147 |  |  | $ | 450 |  |  | $ | 67,773 |
Provision for credit losses |  | 1,948 |  |  | (168) |  |  | (828) |  |  | (417) |  |  | (411) |  |  | 118 |  |  | 175 |  |  | 417 |
Loans charged-off |  | (254) |  |  | (597) |  |  | 0 |  |  | 0 |  |  | (42) |  |  | (318) |  |  | 0 |  |  | (1,211) |
Recoveries |  | 59 |  |  | 25 |  |  | 0 |  |  | 0 |  |  | 47 |  |  | 129 |  |  | 0 |  |  | 260 |
Net loans (charged-off) recovered |  | (195) |  |  | (572) |  |  | 0 |  |  | 0 |  |  | 5 |  |  | (189) |  |  | 0 |  |  | (951) |
Ending balance |  | $ | 32,348 |  |  | $ | 25,795 |  |  | $ | 4,206 |  |  | $ | 729 |  |  | $ | 2,460 |  |  | $ | 1,076 |  |  | $ | 625 |  |  | $ | 67,239 |
Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000. The Company uses the following definitions for risk ratings: Special Mention. Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Substandard. Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans, which are evaluated individually and listed with “Not Rated” loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status. The following table summarizes the risk category of loans by loan segment and year of origination as of September 30, 2023:
(dollars in thousands) | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Term Total |  | Revolving |  | Total
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 233 |  |  | $ | 1,959 |  |  | $ | 2,342 |  |  | $ | 1,250 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 5,784 |  |  | $ | 509,151 |  |  | $ | 514,935 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 67,764 |  |  | 67,764 |
Substandard | 0 |  |  | 310 |  |  | 75 |  |  | 0 |  |  | 139 |  |  | 0 |  |  | 524 |  |  | 6,155 |  |  | 6,679 |
Total | 233 |  |  | 2,269 |  |  | 2,417 |  |  | 1,250 |  |  | 139 |  |  | 0 |  |  | 6,308 |  |  | 583,070 |  |  | 589,378 |
Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 125 |  |  | 0 |  |  | 125 |  |  | 161 |  |  | 286 |
Non-working capital loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 147,472 |  |  | 257,402 |  |  | 91,572 |  |  | 54,567 |  |  | 35,601 |  |  | 15,151 |  |  | 601,765 |  |  | 168,621 |  |  | 770,386 |
Special Mention | 490 |  |  | 8,926 |  |  | 1,051 |  |  | 2,279 |  |  | 2,644 |  |  | 5,643 |  |  | 21,033 |  |  | 5,253 |  |  | 26,286 |
Substandard | 575 |  |  | 2,699 |  |  | 689 |  |  | 4,036 |  |  | 62 |  |  | 632 |  |  | 8,693 |  |  | 564 |  |  | 9,257 |
Not Rated | 2,008 |  |  | 2,308 |  |  | 1,012 |  |  | 964 |  |  | 214 |  |  | 36 |  |  | 6,542 |  |  | 0 |  |  | 6,542 |
Total | 150,545 |  |  | 271,335 |  |  | 94,324 |  |  | 61,846 |  |  | 38,521 |  |  | 21,462 |  |  | 638,033 |  |  | 174,438 |  |  | 812,471 |
Non-working capital loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 5,400 |  |  | 0 |  |  | 0 |  |  | 118 |  |  | 0 |  |  | 5,518 |  |  | 40 |  |  | 5,558 |
Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 41,662 |  |  | 20,498 |  |  | 10,870 |  |  | 13,078 |  |  | 178 |  |  | 0 |  |  | 86,286 |  |  | 544,725 |  |  | 631,011 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Total | 41,662 |  |  | 20,498 |  |  | 10,870 |  |  | 13,078 |  |  | 178 |  |  | 0 |  |  | 86,286 |  |  | 544,725 |  |  | 631,011 |
Construction and land development loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Owner occupied loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 114,935 |  |  | 135,960 |  |  | 158,405 |  |  | 132,051 |  |  | 65,426 |  |  | 129,363 |  |  | 736,140 |  |  | 36,067 |  |  | 772,207 |
Special Mention | 6,696 |  |  | 694 |  |  | 8,449 |  |  | 0 |  |  | 1,735 |  |  | 2,758 |  |  | 20,332 |  |  | 14,628 |  |  | 34,960 |
Substandard | 223 |  |  | 265 |  |  | 0 |  |  | 1,476 |  |  | 352 |  |  | 1,160 |  |  | 3,476 |  |  | 0 |  |  | 3,476 |
Total | 121,854 |  |  | 136,919 |  |  | 166,854 |  |  | 133,527 |  |  | 67,513 |  |  | 133,281 |  |  | 759,948 |  |  | 50,695 |  |  | 810,643 |
Owner occupied loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 85,176 |  |  | 176,453 |  |  | 130,612 |  |  | 130,626 |  |  | 88,244 |  |  | 72,871 |  |  | 683,982 |  |  | 43,097 |  |  | 727,079 |
Special Mention | 4,552 |  |  | 0 |  |  | 6,352 |  |  | 0 |  |  | 0 |  |  | 2,268 |  |  | 13,172 |  |  | 0 |  |  | 13,172 |
Total | 89,728 |  |  | 176,453 |  |  | 136,964 |  |  | 130,626 |  |  | 88,244 |  |  | 75,139 |  |  | 697,154 |  |  | 43,097 |  |  | 740,251 |
Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Multifamily loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 78,741 |  |  | 23,445 |  |  | 9,094 |  |  | 35,972 |  |  | 33,621 |  |  | 30,149 |  |  | 211,022 |  |  | 5,518 |  |  | 216,540 |
Special Mention | 19,735 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 19,735 |  |  | 0 |  |  | 19,735 |
Total | 98,476 |  |  | 23,445 |  |  | 9,094 |  |  | 35,972 |  |  | 33,621 |  |  | 30,149 |  |  | 230,757 |  |  | 5,518 |  |  | 236,275 |
Multifamily loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Agri-business and agricultural loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans secured by farmland: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 20,352 |  |  | 32,883 |  |  | 25,842 |  |  | 27,886 |  |  | 9,940 |  |  | 20,114 |  |  | 137,017 |  |  | 46,102 |  |  | 183,119 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 8 |  |  | 0 |  |  | 8 |  |  | 0 |  |  | 8 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 105 |  |  | 105 |  |  | 0 |  |  | 105 |
Total | 20,352 |  |  | 32,883 |  |  | 25,842 |  |  | 27,886 |  |  | 9,948 |  |  | 20,219 |  |  | 137,130 |  |  | 46,102 |  |  | 183,232 |
Loans secured by farmland: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Loans for agricultural production: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 27,282 |  |  | 11,290 |  |  | 27,881 |  |  | 26,015 |  |  | 3,981 |  |  | 11,077 |  |  | 107,526 |  |  | 88,811 |  |  | 196,337 |
Special Mention | 0 |  |  | 0 |  |  | 201 |  |  | 351 |  |  | 0 |  |  | 0 |  |  | 552 |  |  | 500 |  |  | 1,052 |
Total | 27,282 |  |  | 11,290 |  |  | 28,082 |  |  | 26,366 |  |  | 3,981 |  |  | 11,077 |  |  | 108,078 |  |  | 89,311 |  |  | 197,389 |
Loans for agricultural production: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Other commercial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 6,057 |  |  | 28,024 |  |  | 39,057 |  |  | 14,778 |  |  | 102 |  |  | 7,488 |  |  | 95,506 |  |  | 27,640 |  |  | 123,146 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 2,607 |  |  | 2,607 |  |  | 0 |  |  | 2,607 |
Total | 6,057 |  |  | 28,024 |  |  | 39,057 |  |  | 14,778 |  |  | 102 |  |  | 10,095 |  |  | 98,113 |  |  | 27,640 |  |  | 125,753 |
Other commercial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 8,072 |  |  | 10,663 |  |  | 12,954 |  |  | 9,354 |  |  | 4,476 |  |  | 4,753 |  |  | 50,272 |  |  | 9,674 |  |  | 59,946 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 527 |  |  | 0 |  |  | 0 |  |  | 527 |  |  | 0 |  |  | 527 |
Substandard | 0 |  |  | 0 |  |  | 96 |  |  | 125 |  |  | 0 |  |  | 258 |  |  | 479 |  |  | 0 |  |  | 479 |
Not Rated | 45,488 |  |  | 52,631 |  |  | 39,206 |  |  | 17,653 |  |  | 4,378 |  |  | 26,466 |  |  | 185,822 |  |  | 0 |  |  | 185,822 |
Total | 53,560 |  |  | 63,294 |  |  | 52,256 |  |  | 27,659 |  |  | 8,854 |  |  | 31,477 |  |  | 237,100 |  |  | 9,674 |  |  | 246,774 |
Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 565 |  |  | 137 |  |  | 504 |  |  | 339 |  |  | 0 |  |  | 7 |  |  | 1,552 |  |  | 8,722 |  |  | 10,274 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 27 |  |  | 48 |  |  | 75 |  |  | 129 |  |  | 204 |
Not Rated | 21,491 |  |  | 32,685 |  |  | 9,517 |  |  | 1,780 |  |  | 2,547 |  |  | 2,196 |  |  | 70,216 |  |  | 110,806 |  |  | 181,022 |
Total | 22,056 |  |  | 32,822 |  |  | 10,021 |  |  | 2,119 |  |  | 2,574 |  |  | 2,251 |  |  | 71,843 |  |  | 119,657 |  |  | 191,500 |
Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 50 |  |  | 14 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 64 |  |  | 99 |  |  | 163 |
Residential construction loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Not Rated | 1,551 |  |  | 7,352 |  |  | 1,546 |  |  | 857 |  |  | 269 |  |  | 1,230 |  |  | 12,805 |  |  | 0 |  |  | 12,805 |
Total | 1,551 |  |  | 7,352 |  |  | 1,546 |  |  | 857 |  |  | 269 |  |  | 1,230 |  |  | 12,805 |  |  | 0 |  |  | 12,805 |
Residential construction loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |
Other consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 1,908 |  |  | 808 |  |  | 1,505 |  |  | 358 |  |  | 0 |  |  | 0 |  |  | 4,579 |  |  | 13,393 |  |  | 17,972 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 3 |  |  | 0 |  |  | 3 |  |  | 0 |  |  | 3 |
Not Rated | 23,815 |  |  | 19,098 |  |  | 11,043 |  |  | 6,686 |  |  | 1,952 |  |  | 2,275 |  |  | 64,869 |  |  | 10,639 |  |  | 75,508 |
Total | 25,723 |  |  | 19,906 |  |  | 12,548 |  |  | 7,044 |  |  | 1,955 |  |  | 2,275 |  |  | 69,451 |  |  | 24,032 |  |  | 93,483 |
Other consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current period gross write offs | 1 |  |  | 255 |  |  | 91 |  |  | 6 |  |  | 212 |  |  | 1 |  |  | 566 |  |  | 193 |  |  | 759 |
Total period gross write offs | 1 |  |  | 5,705 |  |  | 105 |  |  | 6 |  |  | 455 |  |  | 1 |  |  | 6,273 |  |  | 493 |  |  | 6,766 |
Total Loans | $ | 659,079 |  |  | $ | 826,490 |  |  | $ | 589,875 |  |  | $ | 483,008 |  |  | $ | 255,899 |  |  | $ | 338,655 |  |  | $ | 3,153,006 |  |  | $ | 1,717,959 |  |  | $ | 4,870,965 |
As of September 30, 2023, $1.5 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the Small Business Administration ("SBA"). The following table summarizes the risk category of loans by loan segment and year of origination as of December 31, 2022:
(dollars in thousands) | 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  | Term Total |  | Revolving |  | Total
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital lines of credit loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 2,207 |  |  | $ | 2,718 |  |  | $ | 1,601 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 6,526 |  |  | $ | 597,108 |  |  | $ | 603,634 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 36,410 |  |  | 36,410 |
Substandard | 200 |  |  | 0 |  |  | 0 |  |  | 300 |  |  | 0 |  |  | 0 |  |  | 500 |  |  | 10,495 |  |  | 10,995 |
Total | 2,407 |  |  | 2,718 |  |  | 1,601 |  |  | 300 |  |  | 0 |  |  | 0 |  |  | 7,026 |  |  | 644,013 |  |  | 651,039 |
Non-working capital loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 272,273 |  |  | 124,600 |  |  | 91,850 |  |  | 47,711 |  |  | 9,981 |  |  | 13,670 |  |  | 560,085 |  |  | 240,490 |  |  | 800,575 |
Special Mention | 448 |  |  | 1,620 |  |  | 0 |  |  | 109 |  |  | 159 |  |  | 2,961 |  |  | 5,297 |  |  | 2,153 |  |  | 7,450 |
Substandard | 11,831 |  |  | 872 |  |  | 5,021 |  |  | 194 |  |  | 1,351 |  |  | 3,979 |  |  | 23,248 |  |  | 4,171 |  |  | 27,419 |
Not Rated | 2,891 |  |  | 1,550 |  |  | 1,254 |  |  | 413 |  |  | 120 |  |  | 23 |  |  | 6,251 |  |  | 0 |  |  | 6,251 |
Total | 287,443 |  |  | 128,642 |  |  | 98,125 |  |  | 48,427 |  |  | 11,611 |  |  | 20,633 |  |  | 594,881 |  |  | 246,814 |  |  | 841,695 |
Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 26,889 |  |  | 19,944 |  |  | 14,026 |  |  | 356 |  |  | 0 |  |  | 0 |  |  | 61,215 |  |  | 453,953 |  |  | 515,168 |
Total | 26,889 |  |  | 19,944 |  |  | 14,026 |  |  | 356 |  |  | 0 |  |  | 0 |  |  | 61,215 |  |  | 453,953 |  |  | 515,168 |
Owner occupied loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 113,656 |  |  | 179,014 |  |  | 139,880 |  |  | 97,353 |  |  | 65,519 |  |  | 97,335 |  |  | 692,757 |  |  | 40,533 |  |  | 733,290 |
Special Mention | 2,960 |  |  | 7,608 |  |  | 0 |  |  | 446 |  |  | 1,491 |  |  | 8,054 |  |  | 20,559 |  |  | 0 |  |  | 20,559 |
Substandard | 308 |  |  | 105 |  |  | 1,491 |  |  | 373 |  |  | 1,161 |  |  | 229 |  |  | 3,667 |  |  | 0 |  |  | 3,667 |
Total | 116,924 |  |  | 186,727 |  |  | 141,371 |  |  | 98,172 |  |  | 68,171 |  |  | 105,618 |  |  | 716,983 |  |  | 40,533 |  |  | 757,516 |
Nonowner occupied loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 194,294 |  |  | 125,190 |  |  | 134,661 |  |  | 91,907 |  |  | 15,109 |  |  | 64,874 |  |  | 626,035 |  |  | 68,603 |  |  | 694,638 |
Special Mention | 0 |  |  | 11,024 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 11,024 |  |  | 0 |  |  | 11,024 |
Total | 194,294 |  |  | 136,214 |  |  | 134,661 |  |  | 91,907 |  |  | 15,109 |  |  | 64,874 |  |  | 637,059 |  |  | 68,603 |  |  | 705,662 |
Multifamily loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 38,460 |  |  | 25,741 |  |  | 36,929 |  |  | 35,695 |  |  | 2,046 |  |  | 28,866 |  |  | 167,737 |  |  | 7,349 |  |  | 175,086 |
Special Mention | 21,855 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 21,855 |  |  | 0 |  |  | 21,855 |
Total | 60,315 |  |  | 25,741 |  |  | 36,929 |  |  | 35,695 |  |  | 2,046 |  |  | 28,866 |  |  | 189,592 |  |  | 7,349 |  |  | 196,941 |
Agri-business and agricultural loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans secured by farmland: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 38,344 |  |  | 28,684 |  |  | 29,741 |  |  | 9,656 |  |  | 8,145 |  |  | 19,638 |  |  | 134,208 |  |  | 63,094 |  |  | 197,302 |
Special Mention | 260 |  |  | 0 |  |  | 1,676 |  |  | 1,780 |  |  | 0 |  |  | 15 |  |  | 3,731 |  |  | 0 |  |  | 3,731 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 145 |  |  | 145 |  |  | 0 |  |  | 145 |
Total | 38,604 |  |  | 28,684 |  |  | 31,417 |  |  | 11,436 |  |  | 8,145 |  |  | 19,798 |  |  | 138,084 |  |  | 63,094 |  |  | 201,178 |
Loans for agricultural production: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 6,040 |  |  | 30,262 |  |  | 22,167 |  |  | 3,625 |  |  | 9,248 |  |  | 4,539 |  |  | 75,881 |  |  | 143,599 |  |  | 219,480 |
Special Mention | 947 |  |  | 243 |  |  | 7,262 |  |  | 928 |  |  | 0 |  |  | 0 |  |  | 9,380 |  |  | 2,129 |  |  | 11,509 |
Total | 6,987 |  |  | 30,505 |  |  | 29,429 |  |  | 4,553 |  |  | 9,248 |  |  | 4,539 |  |  | 85,261 |  |  | 145,728 |  |  | 230,989 |
Other commercial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 27,097 |  |  | 4,815 |  |  | 17,911 |  |  | 147 |  |  | 931 |  |  | 10,985 |  |  | 61,886 |  |  | 48,295 |  |  | 110,181 |
Special Mention | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 3,160 |  |  | 3,160 |  |  | 0 |  |  | 3,160 |
Total | 27,097 |  |  | 4,815 |  |  | 17,911 |  |  | 147 |  |  | 931 |  |  | 14,145 |  |  | 65,046 |  |  | 48,295 |  |  | 113,341 |
Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed end first mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 8,768 |  |  | 12,809 |  |  | 12,289 |  |  | 4,805 |  |  | 4,045 |  |  | 3,860 |  |  | 46,576 |  |  | 5,634 |  |  | 52,210 |
Special Mention | 0 |  |  | 0 |  |  | 552 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 552 |  |  | 0 |  |  | 552 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 83 |  |  | 1,944 |  |  | 2,027 |  |  | 0 |  |  | 2,027 |
Not Rated | 57,404 |  |  | 44,331 |  |  | 20,023 |  |  | 5,936 |  |  | 2,970 |  |  | 27,004 |  |  | 157,668 |  |  | 0 |  |  | 157,668 |
Total | 66,172 |  |  | 57,140 |  |  | 32,864 |  |  | 10,741 |  |  | 7,098 |  |  | 32,808 |  |  | 206,823 |  |  | 5,634 |  |  | 212,457 |
Open end and junior lien loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 137 |  |  | 541 |  |  | 357 |  |  | 63 |  |  | 75 |  |  | 0 |  |  | 1,173 |  |  | 5,841 |  |  | 7,014 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 31 |  |  | 49 |  |  | 0 |  |  | 80 |  |  | 111 |  |  | 191 |
Not Rated | 44,472 |  |  | 13,597 |  |  | 3,014 |  |  | 3,616 |  |  | 1,476 |  |  | 2,252 |  |  | 68,427 |  |  | 101,750 |  |  | 170,177 |
Total | 44,609 |  |  | 14,138 |  |  | 3,371 |  |  | 3,710 |  |  | 1,600 |  |  | 2,252 |  |  | 69,680 |  |  | 107,702 |  |  | 177,382 |
Residential construction loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Not Rated | 14,463 |  |  | 2,167 |  |  | 897 |  |  | 291 |  |  | 129 |  |  | 1,223 |  |  | 19,170 |  |  | 0 |  |  | 19,170 |
Total | 14,463 |  |  | 2,167 |  |  | 897 |  |  | 291 |  |  | 129 |  |  | 1,223 |  |  | 19,170 |  |  | 0 |  |  | 19,170 |
Other consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | 1,344 |  |  | 1,841 |  |  | 432 |  |  | 600 |  |  | 0 |  |  | 948 |  |  | 5,165 |  |  | 16,152 |  |  | 21,317 |
Substandard | 0 |  |  | 0 |  |  | 0 |  |  | 210 |  |  | 0 |  |  | 0 |  |  | 210 |  |  | 0 |  |  | 210 |
Not Rated | 24,395 |  |  | 14,563 |  |  | 9,168 |  |  | 3,606 |  |  | 2,755 |  |  | 1,352 |  |  | 55,839 |  |  | 10,492 |  |  | 66,331 |
Total | 25,739 |  |  | 16,404 |  |  | 9,600 |  |  | 4,416 |  |  | 2,755 |  |  | 2,300 |  |  | 61,214 |  |  | 26,644 |  |  | 87,858 |
TOTAL | $ | 911,943 |  |  | $ | 653,839 |  |  | $ | 552,202 |  |  | $ | 310,151 |  |  | $ | 126,843 |  |  | $ | 297,056 |  |  | $ | 2,852,034 |  |  | $ | 1,858,362 |  |  | $ | 4,710,396 |
As of December 31, 2022, $1.5 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the SBA. Nonaccrual and Past Due Loans: The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured. The following table presents the aging of the amortized cost basis in past due loans as of September 30, 2023 by class of loans and loans past due 90 days or more and still accruing by class of loan:
(dollars in thousands) |  | Loans Not Past Due |  | 30-89 Days Past Due |  | Greater than 89 Days Past Due and Accruing |  | Total Accruing |  | Total Nonaccrual |  | Nonaccrual With No Allowance For Credit Loss |  | Total
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 583,816 |  |  | $ | 190 |  |  | $ | 0 |  |  | $ | 584,006 |  |  | $ | 5,372 |  |  | $ | 109 |  |  | $ | 589,378 |
Non-working capital loans |  | 805,042 |  |  | 205 |  |  | 0 |  |  | 805,247 |  |  | 7,224 |  |  | 253 |  |  | 812,471 |
Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development loans |  | 631,011 |  |  | 0 |  |  | 0 |  |  | 631,011 |  |  | 0 |  |  | 0 |  |  | 631,011 |
Owner occupied loans |  | 807,741 |  |  | 0 |  |  | 0 |  |  | 807,741 |  |  | 2,902 |  |  | 1,426 |  |  | 810,643 |
Nonowner occupied loans |  | 740,251 |  |  | 0 |  |  | 0 |  |  | 740,251 |  |  | 0 |  |  | 0 |  |  | 740,251 |
Multifamily loans |  | 236,275 |  |  | 0 |  |  | 0 |  |  | 236,275 |  |  | 0 |  |  | 0 |  |  | 236,275 |
Agri-business and agricultural loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans secured by farmland |  | 183,128 |  |  | 0 |  |  | 0 |  |  | 183,128 |  |  | 104 |  |  | 0 |  |  | 183,232 |
Loans for agricultural production |  | 197,389 |  |  | 0 |  |  | 0 |  |  | 197,389 |  |  | 0 |  |  | 0 |  |  | 197,389 |
Other commercial loans |  | 125,753 |  |  | 0 |  |  | 0 |  |  | 125,753 |  |  | 0 |  |  | 0 |  |  | 125,753 |
Consumer 1‑4 family mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed end first mortgage loans |  | 245,544 |  |  | 729 |  |  | 19 |  |  | 246,292 |  |  | 482 |  |  | 336 |  |  | 246,774 |
Open end and junior lien loans |  | 191,127 |  |  | 171 |  |  | 0 |  |  | 191,298 |  |  | 202 |  |  | 202 |  |  | 191,500 |
Residential construction loans |  | 12,805 |  |  | 0 |  |  | 0 |  |  | 12,805 |  |  | 0 |  |  | 0 |  |  | 12,805 |
Other consumer loans |  | 92,995 |  |  | 484 |  |  | 0 |  |  | 93,479 |  |  | 4 |  |  | 4 |  |  | 93,483 |
Total |  | $ | 4,852,877 |  |  | $ | 1,779 |  |  | $ | 19 |  |  | $ | 4,854,675 |  |  | $ | 16,290 |  |  | $ | 2,330 |  |  | $ | 4,870,965 |
As of September 30, 2023 there were an insignificant number of loans 30-89 days past due or greater than 89 days past due on nonaccrual. Additionally, interest income recognized on nonaccrual loans was insignificant during the three and nine month periods ended September 30, 2023. The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2022 by class of loans and loans past due 90 days or more and still accruing by class of loan:
(dollars in thousands) |  | Loans Not Past Due |  | 30-89 Days Past Due |  | Greater than 89 Days Past Due and Accruing |  | Total Accruing |  | Total Nonaccrual |  | Nonaccrual With No Allowance For Credit Loss |  | Total
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 649,529 |  |  | $ | 68 |  |  | $ | 0 |  |  | $ | 649,597 |  |  | $ | 1,442 |  |  | $ | 0 |  |  | $ | 651,039 |
Non-working capital loans |  | 830,033 |  |  | 39 |  |  | 1 |  |  | 830,073 |  |  | 11,622 |  |  | 727 |  |  | 841,695 |
Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development loans |  | 515,168 |  |  | 0 |  |  | 0 |  |  | 515,168 |  |  | 0 |  |  | 0 |  |  | 515,168 |
Owner occupied loans |  | 754,451 |  |  | 0 |  |  | 0 |  |  | 754,451 |  |  | 3,065 |  |  | 1,469 |  |  | 757,516 |
Nonowner occupied loans |  | 705,662 |  |  | 0 |  |  | 0 |  |  | 705,662 |  |  | 0 |  |  | 0 |  |  | 705,662 |
Multifamily loans |  | 196,941 |  |  | 0 |  |  | 0 |  |  | 196,941 |  |  | 0 |  |  | 0 |  |  | 196,941 |
Agri-business and agricultural loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans secured by farmland |  | 201,033 |  |  | 0 |  |  | 0 |  |  | 201,033 |  |  | 145 |  |  | 0 |  |  | 201,178 |
Loans for agricultural production |  | 230,989 |  |  | 0 |  |  | 0 |  |  | 230,989 |  |  | 0 |  |  | 0 |  |  | 230,989 |
Other commercial loans |  | 113,341 |  |  | 0 |  |  | 0 |  |  | 113,341 |  |  | 0 |  |  | 0 |  |  | 113,341 |
Consumer 1‑4 family mortgage loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Closed end first mortgage loans |  | 211,736 |  |  | 306 |  |  | 122 |  |  | 212,164 |  |  | 293 |  |  | 225 |  |  | 212,457 |
Open end and junior lien loans |  | 176,758 |  |  | 436 |  |  | 0 |  |  | 177,194 |  |  | 188 |  |  | 188 |  |  | 177,382 |
Residential construction loans |  | 19,170 |  |  | 0 |  |  | 0 |  |  | 19,170 |  |  | 0 |  |  | 0 |  |  | 19,170 |
Other consumer loans |  | 87,333 |  |  | 316 |  |  | 0 |  |  | 87,649 |  |  | 209 |  |  | 6 |  |  | 87,858 |
Total |  | $ | 4,692,144 |  |  | $ | 1,165 |  |  | $ | 123 |  |  | $ | 4,693,432 |  |  | $ | 16,964 |  |  | $ | 2,615 |  |  | $ | 4,710,396 |
As of December 31, 2022 there were an insignificant number of loans 30-89 days past due or greater than 89 days past due on nonaccrual. Additionally, interest income recognized on nonaccrual loans was insignificant during the year ended December 31, 2022. When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value. The following tables present the amortized cost basis of collateral dependent loans by class of loan as of:
|  | September 30, 2023
(dollars in thousands) |  | Real Estate |  | General Business Assets |  | Other |  | Total
Commercial and industrial loans: |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 50 |  |  | $ | 5,063 |  |  | $ | 109 |  |  | $ | 5,222 |
Non-working capital loans |  | 44 |  |  | 6,689 |  |  | 394 |  |  | 7,127 |
Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |
Owner occupied loans |  | 617 |  |  | 1,476 |  |  | 1,161 |  |  | 3,254 |
Agri-business and agricultural loans: |  |  |  |  |  |  |  |
Loans secured by farmland |  | 0 |  |  | 104 |  |  | 0 |  |  | 104 |
Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |
Closed end first mortgage loans |  | 482 |  |  | 0 |  |  | 0 |  |  | 482 |
Open end and junior lien loans |  | 202 |  |  | 0 |  |  | 0 |  |  | 202 |
Other consumer loans |  | 0 |  |  | 0 |  |  | 4 |  |  | 4 |
Total |  | $ | 1,395 |  |  | $ | 13,332 |  |  | $ | 1,668 |  |  | $ | 16,395 |
|  | December 31, 2022
(dollars in thousands) |  | Real Estate |  | General Business Assets |  | Other |  | Total
Commercial and industrial loans: |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 50 |  |  | $ | 5,402 |  |  | $ | 0 |  |  | $ | 5,452 |
Non-working capital loans |  | 544 |  |  | 18,109 |  |  | 229 |  |  | 18,882 |
Commercial real estate and multi-family residential loans: |  |  |  |  |  |  |  |
Owner occupied loans |  | 413 |  |  | 1,491 |  |  | 1,161 |  |  | 3,065 |
Agri-business and agricultural loans: |  |  |  |  |  |  |  |
Loans secured by farmland |  | 0 |  |  | 145 |  |  | 0 |  |  | 145 |
Consumer 1-4 family mortgage loans: |  |  |  |  |  |  |  |
Closed end first mortgage loans |  | 2,030 |  |  | 0 |  |  | 0 |  |  | 2,030 |
Open end and junior lien loans |  | 188 |  |  | 0 |  |  | 0 |  |  | 188 |
Other consumer loans |  | 0 |  |  | 0 |  |  | 7 |  |  | 7 |
Total |  | $ | 3,225 |  |  | $ | 25,147 |  |  | $ | 1,397 |  |  | $ | 29,769 |
Loan Modifications Made to Borrowers Experiencing Financial Difficulty The allowance for credit losses incorporates an estimate of lifetime expected credit losses and is recorded on each asset upon origination. The starting point to determine estimate such credit losses is historical loss information. The Company uses a probability of default/loss given default model to determine the allowance for credit losses recorded at origination. Occasionally, the Company subsequently modifies loans for borrowers experiencing financial distress by providing the following forms of relief: forgiveness of loan principal, extension of repayment terms, or an interest rate reduction, among other possible concessions. In some instances, the Company provides multiple types of concessions for such modifications. Because the effect of most modifications to borrowers experiencing financial difficulty is already included in the allowance for credit losses, no change to the allowance for credit losses is generally recorded for these modifications. The following tables present the amortized cost basis at the end of the reporting period of loans that were experiencing financial difficulty and received a modification of terms during the three and nine months ended September 30, 2023, by class and 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 receivables at the end of the reporting period is also presented below:
(dollars in thousands) |  | Interest Rate Reduction |  | Combination Interest Rate Reduction and Term Extension |  | Combination Principal Forgiveness, Interest Rate Reduction and Term Extension |  | Total Modifications |  | Total Class of Financing Receivable
Three Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 2,000 |  |  | $ | 931 |  |  | $ | 0 |  |  | $ | 2,931 |  |  | 0.50 | %
Non-working capital loans |  | 0 |  |  | 0 |  |  | 0 |  |  | 0 |  |  | 0.00 |
Total commercial and industrial loans |  | 2,000 |  |  | 931 |  |  | 0 |  |  | 2,931 |  |  | 0.21 |
Total loan modifications made to borrowers experiencing financial difficulty |  | $ | 2,000 |  |  | $ | 931 |  |  | $ | 0 |  |  | $ | 2,931 |  |  | 0.06 | %
(dollars in thousands) |  | Interest Rate Reduction |  | Combination Interest Rate Reduction and Term Extension |  | Combination Principal Forgiveness, Interest Rate Reduction and Term Extension |  | Total Modifications |  | Total Class of Financing Receivable
Nine Months Ended September 30, 2023 |  |  |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 2,000 |  |  | $ | 931 |  |  | $ | 0 |  |  | $ | 2,931 |  |  | 0.50 | %
Non-working capital loans |  | 0 |  |  | 0 |  |  | 1,596 |  |  | 1,596 |  |  | 0.20 |
Total commercial and industrial loans |  | 2,000 |  |  | 931 |  |  | 1,596 |  |  | 4,527 |  |  | 0.32 |
Total loan modifications made to borrowers experiencing financial difficulty |  | $ | 2,000 |  |  | $ | 931 |  |  | $ | 1,596 |  |  | $ | 4,527 |  |  | 0.09 | %
The Company has no material commitments to lend additional funds to borrowers included in the previous tables. The following tables present the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended September 30, 2023:
(dollars in thousands) |  | Principal Forgiveness |  | Interest Rate Reduction Financial Effect |  | Term Extension Financial Effect |  | Total Class of Financing Receivable
Three Months Ended September 30, 2023 |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 0 |  |  | Reduction of two variable Prime Rate lines of credit to 1.00% Fixed Reduction of one variable line of credit from Prime plus 1.00% to 1.00% Fixed |  | Extension of terms for one variable rate line of credit from 12 months to 120 months |  | 0.50 | %
Non-working capital loans |  | 0 |  |  | No modifications |  | No modifications |  | 0.00 | %
(dollars in thousands) |  | Principal Forgiveness |  | Interest Rate Reduction Financial Effect |  | Term Extension Financial Effect |  | Total Class of Financing Receivable
Nine Months Ended September 30, 2023 |  |  |  |  |  |  |  |
Commercial and industrial loans: |  |  |  |  |  |  |  |
Working capital lines of credit loans |  | $ | 0 |  |  | Reduction of two variable Prime Rate lines of credit to 1.00% Fixed Reduction of one variable line of credit from Prime plus 1.00% to 1.00% Fixed |  | Term extension for one variable rate line of credit from 12 months to 120 months |  | 0.50 | %
Non-working capital loans |  | 9,380 |  |  | Reduction of one term loan from Prime plus 0.75% to 1.00% Fixed |  | Term extension from 40 months to 300 months |  | 0.20 |
During the three and nine months ended September 30, 2022, no modifications were made to loans for borrowers experiencing financial difficulty. The Company closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. At September 30, 2023, no loans receiving such a modification within the last twelve months were 30 days or greater past due. At September 30, 2023, no loans receiving a modification due to borrower financial difficulty within the last twelve months experienced a payment default. Upon the Company's determination that a modified loan (or portion thereof) has subsequently been deemed uncollectible, the loan (or a portion thereof) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount.

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