Loans are stated at the principal amount outstanding net of unearned discounts, unearned income, and allowance for credit losses. Unearned income includes deferred loan origination fees reduced by loan origination costs and is amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding. A summary of loans at December 31, 2024 and 2023 follows (in thousands):

Net loans increased $88.8 million as of December 31, 2024 compared to December 31, 2023. Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties. Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $33.7 million and $29.9 million at December 31, 2024 and 2023, respectively.

The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation; however, limits well below the regulatory thresholds are generally observed. The vast majority of the Company’s loans are to businesses located in the geographic market areas served by the Company’s branch bank system. Additionally, a significant portion of the collateral securing the loans in the portfolio is located within the Company’s primary geographic footprint.

In general, the Company adheres to loan underwriting standards consistent with industry guidelines for all loan segments. The Company’s lending can be summarized into the following primary areas:

Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan- to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x.

Amortization periods for commercial real estate loans are generally limited to twenty years. The Company’s commercial real estate portfolio is well below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators.

Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government-assisted lending programs through the Small Business Administration and U.S. Department of Agriculture.

Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate.

Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells the vast majority of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. The Company retains all residential real estate loans with balloon payment features. Balloon periods are limited to five years. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans.

Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral.

Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality.

The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net credit losses, the level and composition of nonaccrual, past due and modified loans, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating large, impaired loans separately from non-impaired loans.

The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price, if available; or (3) the fair value of the collateral less costs to sell for collateral dependent loans and loans for which foreclosure is deemed to be probable. A specific allowance is assigned when expected cash flows or collateral are less than the carrying amount of the loan. The carrying value of the loan reflects reductions from prior charge-offs.

Non-individually evaluated loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as modified loans. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful.

Beginning January 1, 2020, the allowance for credit losses was estimated using the current expected credit loss model ("CECL"). The Company uses the Loss Rate method to estimate the historical loss rate for all non-individually evaluated loans. Under this method, the allowance for credit losses is measured on a collective (pool) basis for loans with similar risk characteristics. Historical credit loss experience provides the basis for the estimate of expected credit losses. For each pool, a historical loss rate is computed based on the average remaining contractual life of the pool. Adjustments to historical loss rates are made using qualitative factors relevant to each pool including merger and acquisition activity, economic conditions, changes in policies, procedures and underwriting, and concentrations. In addition, a twenty-four month forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period.

Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates. During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool.

Construction and Land Development Loans. Historical losses in this segment remain very low. While inflationary pressures have caused some risk in this segment, most projects are associated with financially strong borrowers. The qualitative factors for this segment increased by a minor, or 10%, amount on a net basis for the year. This increase was primarily due to the level of balances versus the internal concentration threshold.

Agricultural Real Estate Loans. Historical losses in the segment remain very low. Farmland values have increased over an extended period of time and remained stable over the last year. The loan to values in this segment are very low. There was no change to the qualitative factors for this segment.

Residential Real Estate Non Owner Occupied Loans. The loan segment has remained stable throughout the last several years. Both adversely classified and past dues have been consistent. There was no change to the qualitative factors for this segment.

Residential Real Estate Owner Occupied Loans. The loan segment has remained stable throughout the last several years. However, an increase in past dues at year end resulted in a significant, or 15% increase to the qualitative factors for this segment.

HELOC Loans. These loans are a small segment to overall loan balances. During the year, past dues increased to a level that resulted in a significant, or 15%, increase to the qualitative factors for this segment.

Commercial Real Estate Owner Occupied Loans. This segment has remained stable, reflecting less uncertainty to recessionary risks that were high in prior years with the rapid movement in interest rates, inflationary pressures, and recovery from the pandemic. Given the reduction to recessionary risk, the Company lowered its qualitative factor for this segment by a moderate, or 10%, level.

Commercial Real Estate Non Owner Occupied Loans. This segment includes the Company's largest balances. While qualitative factors had been increased in past periods for the economic uncertainty in the macro conditions, the Company still viewed this area as slightly higher risk given the continuous repricing of maturing loans to much higher market rates. On a net basis, the Company increased the qualitative factor at a minor, 5% level, for the year.

Agricultural Loans. Losses in this segment are very low. However, commodity prices have remained depressed for an extended period and have resulted in stressed balance sheets and cash flows for some farmers. The Company added to the qualitative factor multiple times throughout the year with an increase totaling 25%.

Commercial and Industrial Loans. This segment includes the largest balance of allowance for credit losses. The qualitative factors for this segment were reduced by a moderate, or 10%, level in the year. Most of the repricing for higher rates in this loan segment has already occurred and prior years increases for higher risk were no longer necessary.

Consumer Loans. This segment is a small portion of the Company's loan portfolio. While historical net charge-offs have been immaterial in this segment, there was an increase in past dues that resulted in the need for a significant, or 15%, increase to the qualitative factor to reflect the higher risk.

Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds.

Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans.

For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans.

The following tables present the balance in the allowance for credit losses and the recorded investment in loans based on portfolio segment and impairment method as of December 31, 2024, 2023, and 2022 (in thousands):


	Construction and Land Development		Agricultural Real Estate			1-4 Family Residential Properties			Commercial Real Estate		Agricultural Loans			Commercial and Industrial		Consumer Loans		Total
Twelve months ended December 31, 2024
Beginning Balance	$	2,918	$	1,366		$	4,220		$	31,758	$	705		$	25,450	$	2,258	$	68,675
Initial allowance on loans purchased with credit deterioration		—		—			—			—		—			—		—		—
Provision for credit loss expense		352		(5	)		(785	)		1,178		3,587			510		798		5,635
Loans charged off		—		—			195			451		2,410			688		2,004		5,748
Recoveries collected		5		—			339			184		75			330		687		1,620
Ending balance	$	3,275	$	1,361		$	3,579		$	32,669	$	1,957		$	25,602	$	1,739	$	70,182

Twelve months ended December 31, 2023
Beginning Balance	$	2,250	$	1,433		$	3,742		$	28,157	$	585		$	20,808	$	2,118	$	59,093
Initial allowance on loans purchased with credit deterioration		308		—			124			1,066		—			2,273		20		3,791
Provision for credit loss expense		374		(67	)		225			1,755		490			2,322		1,005		6,104
Loans charged off		14		—			87			25		408			529		1,568		2,631
Recoveries collected		—		—			216			805		38			576		683		2,318
Ending balance	$	2,918	$	1,366		$	4,220		$	31,758	$	705		$	25,450	$	2,258	$	68,675

Twelve months ended December 31, 2022
Beginning Balance	$	1,743	$	1,257		$	2,330		$	26,246	$	983		$	19,241	$	2,855	$	54,655
Initial allowance on loans purchased with credit deterioration		272		—			3			478		—			94		16		863
Provision for credit loss expense		137		176			1,241			1,462		(359	)		2,135		14		4,806
Loans charged off		2		—			191			414		93			870		1,380		2,950
Recoveries collected		100		—			359			385		54			208		613		1,719
Ending balance	$	2,250	$	1,433		$	3,742		$	28,157	$	585		$	20,808	$	2,118	$	59,093

Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined. For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For impaired loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral.

The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to time frames established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off.

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, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings, which are commensurate with a loan considered "criticized":

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 institution’s credit position at some future date.

Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness 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 institution 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 characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans. The following tables present the credit risk profile of the Company’s loan portfolio based on rating category and payment activity as of December 31, 2024 and 2023 (in thousands):


	Term Loans by Origination Year												Revolving
Risk rating	2024		2023		2022		2021		2020		Prior		Loans		Total
December 31, 2024
Construction and land development loans
Pass	$	82,696	$	101,715	$	14,390	$	15,817	$	4,735	$	16,342	$	—	$	235,695
Special mention		—		—		—		—		—		382		—		382
Substandard		—		—		6		—		—		10		—		16
Total	$	82,696	$	101,715	$	14,396	$	15,817	$	4,735	$	16,734	$	—	$	236,093
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Agricultural real estate loans
Pass	$	25,824	$	17,292	$	159,433	$	55,083	$	48,700	$	73,592	$	—	$	379,924
Special mention		—		192		107		986		1,755		5,630		—		8,670
Substandard		—		141		966		—		—		1,059		—		2,166
Total	$	25,824	$	17,625	$	160,506	$	56,069	$	50,455	$	80,281	$	—	$	390,760
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family residential property loans
Pass	$	46,350	$	36,454	$	74,580	$	75,325	$	61,936	$	110,348	$	79,714	$	484,707
Special mention		175		—		204		326		—		577		59		1,341
Substandard		174		672		916		737		557		6,875		618		10,549
Total	$	46,699	$	37,126	$	75,700	$	76,388	$	62,493	$	117,800	$	80,391	$	496,597
Current period gross writeoffs	$	—	$	46	$	13	$	33	$	—	$	103	$	—	$	195
Commercial real estate loans
Pass	$	216,297	$	213,704	$	680,665	$	535,056	$	289,855	$	774,516	$	—	$	2,710,093
Special mention		659		13,732		4,090		2,053		713		10,462		—		31,709
Substandard		—		49		3,844		467		—		4,067		—		8,427
Total	$	216,956	$	227,485	$	688,599	$	537,576	$	290,568	$	789,045	$	—	$	2,750,229
Current period gross writeoffs	$	—	$	—	$	151	$	—	$	—	$	300	$	—	$	451
Agricultural loans
Pass	$	175,402	$	24,024	$	13,147	$	9,162	$	1,585	$	2,306	$	—	$	225,626
Special mention		617		2,208		976		100		—		—		—		3,901
Substandard		843		7,092		2,209		—		—		—		—		10,144
Total	$	176,862	$	33,324	$	16,332	$	9,262	$	1,585	$	2,306	$	—	$	239,671
Current period gross writeoffs	$	—	$	2,213	$	100	$	52	$	—	$	45	$	—	$	2,410
Commercial and industrial loans
Pass	$	307,785	$	228,411	$	278,845	$	183,042	$	131,005	$	360,610	$	—	$	1,489,698
Special mention		54		1,149		1,277		748		1,020		7,583		—		11,831
Substandard		65		1,410		789		446		98		815		—		3,623
Total	$	307,904	$	230,970	$	280,911	$	184,236	$	132,123	$	369,008	$	—	$	1,505,152
Current period gross writeoffs	$	10	$	47	$	207	$	378	$	10	$	36	$	—	$	688
Consumer loans
Pass	$	5,098	$	5,138	$	24,430	$	11,810	$	4,494	$	2,385	$	—	$	53,355
Special mention		—		—		14		—		—		—		—		14
Substandard		12		21		259		216		54		29		—		591
Total	$	5,110	$	5,159	$	24,703	$	12,026	$	4,548	$	2,414	$	—	$	53,960
Current period gross writeoffs	$	98	$	63	$	154	$	139	$	59	$	1,491	$	—	$	2,004
Total loans
Pass	$	859,452	$	626,738	$	1,245,490	$	885,295	$	542,310	$	1,340,099	$	79,714	$	5,579,098
Special mention		1,505		17,281		6,668		4,213		3,488		24,634		59		57,848
Substandard		1,094		9,385		8,989		1,866		709		12,855		618		35,516
Total	$	862,051	$	653,404	$	1,261,147	$	891,374	$	546,507	$	1,377,588	$	80,391	$	5,672,462
Current period gross writeoffs	$	108	$	2,369	$	625	$	602	$	69	$	1,975	$	—	$	5,748


	Term Loans by Origination Year												Revolving
Risk rating	2023		2022		2021		2020		2019		Prior		Loans		Total
December 31, 2023
Construction and land development loans
Pass	$	68,086	$	74,065	$	27,392	$	5,188	$	10,795	$	19,115	$	—	$	204,641
Special mention		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		436		—		436
Total	$	68,086	$	74,065	$	27,392	$	5,188	$	10,795	$	19,551	$	—	$	205,077
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	14	$	—	$	—	$	14
Agricultural real estate loans
Pass	$	19,231	$	164,812	$	57,815	$	53,249	$	19,419	$	71,189	$	—	$	385,715
Special mention		206		—		627		—		1,170		1,868		—		3,871
Substandard		—		—		371		—		—		1,175		—		1,546
Total	$	19,437	$	164,812	$	58,813	$	53,249	$	20,589	$	74,232	$	—	$	391,132
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
1-4 family residential property loans
Pass	$	66,119	$	96,995	$	79,085	$	73,073	$	26,854	$	105,257	$	75,700	$	523,083
Special mention		—		967		3,184		—		—		3,804		10		7,965
Substandard		152		759		460		396		288		8,865		501		11,421
Total	$	66,271	$	98,721	$	82,729	$	73,469	$	27,142	$	117,926	$	76,211	$	542,469
Current period gross writeoffs	$	10	$	—	$	—	$	—	$	14	$	63	$	—	$	87
Commercial real estate loans
Pass	$	185,628	$	680,099	$	548,733	$	317,075	$	239,323	$	701,464	$	—	$	2,672,322
Special mention		3,666		2,706		1,317		2,159		1,563		7,778		—		19,189
Substandard		—		3,899		520		20		775		7,108		—		12,322
Total	$	189,294	$	686,704	$	550,570	$	319,254	$	241,661	$	716,350	$	—	$	2,703,833
Current period gross writeoffs	$	—	$	—	$	—	$	—	$	25	$	—	$	—	$	25
Agricultural loans
Pass	$	147,993	$	27,895	$	10,044	$	2,549	$	1,883	$	5,854	$	—	$	196,218
Special mention		6		10		—		—		38		—		—		54
Substandard		—		—		—		—		—		—		—		—
Total	$	147,999	$	27,905	$	10,044	$	2,549	$	1,921	$	5,854	$	—	$	196,272
Current period gross writeoffs	$	—	$	276	$	—	$	—	$	—	$	132	$	—	$	408
Commercial and industrial loans
Pass	$	290,304	$	306,794	$	232,198	$	154,499	$	73,906	$	347,957	$	—	$	1,405,658
Special mention		1,047		1,857		9,982		562		597		28,900		—		42,945
Substandard		—		537		791		58		29		750		—		2,165
Total	$	291,351	$	309,188	$	242,971	$	155,119	$	74,532	$	377,607	$	—	$	1,450,768
Current period gross writeoffs	$	—	$	353	$	—	$	49	$	20	$	107	$	—	$	529
Consumer loans
Pass	$	9,547	$	40,225	$	21,264	$	10,387	$	4,475	$	4,035	$	—	$	89,933
Special mention		—		26		—		—		—		—		—		26
Substandard		86		405		325		139		59		41		—		1,055
Total	$	9,633	$	40,656	$	21,589	$	10,526	$	4,534	$	4,076	$	—	$	91,014
Current period gross writeoffs	$	—	$	132	$	208	$	2	$	20	$	1,206	$	—	$	1,568
Total loans
Pass	$	786,908	$	1,390,885	$	976,531	$	616,020	$	376,655	$	1,254,871	$	75,700	$	5,477,570
Special mention		4,925		5,566		15,110		2,721		3,368		42,350		10		74,050
Substandard		238		5,600		2,467		613		1,151		18,375		501		28,945
Total	$	792,071	$	1,402,051	$	994,108	$	619,354	$	381,174	$	1,315,596	$	76,211	$	5,580,565
Current period gross writeoffs	$	10	$	761	$	208	$	51	$	93	$	1,508	$	—	$	2,631

The following table presents the Company’s loan portfolio aging analysis at December 31, 2024 and 2023 (in thousands):


														Total
					90 Days									Loans > 90
	30-59 days		60-89 days		or More		Total					Total Loans		days and
	Past Due		Past Due		Past Due		Past Due			Current		Receivable		Accruing
December 31, 2024
Construction and land development	$	6	$	—	$	—	$	6		$	236,087	$	236,093	$	—
Agricultural real estate		—		—		533		533			390,227		390,760		—
1-4 family residential properties		2,209		931		2,089		5,229			491,368		496,597		—
Multifamily residential properties		—		—		472		472			332,172		332,644		—
Commercial real estate		595		553		344		1,492			2,416,093		2,417,585		—
Loans secured by real estate		2,810		1,484		3,438		7,732			3,865,947		3,873,679		—
Agricultural loans		550		—		1,289		1,839			237,832		239,671		—
Commercial and industrial loans		337		89		463		889			1,335,031		1,335,920		—
Consumer loans		442		48		111		601			53,359		53,960		—
All other loans		—		—		—		—			169,232		169,232		—
Total loans	$	4,139	$	1,621	$	5,301	$	11,061		$	5,661,401	$	5,672,462	$	—
Percent of total loans								0.19	%
December 31, 2023
Construction and land development	$	—	$	585	$	—	$	585		$	204,492	$	205,077	$	—
Agricultural real estate		—		—		—		—			391,132		391,132		—
1-4 family residential properties		2,957		486		727		4,170			538,299		542,469		—
Multifamily residential properties		150		—		—		150			318,979		319,129		—
Commercial real estate		819		45		940		1,804			2,382,900		2,384,704		—
Loans secured by real estate		3,926		1,116		1,667		6,709			3,835,802		3,842,511		—
Agricultural loans		—		—		—		—			196,272		196,272		—
Commercial and industrial loans		367		70		858		1,295			1,264,864		1,266,159		—
Consumer loans		979		157		252		1,388			89,626		91,014		—
All other loans		—		—		—		—			184,609		184,609		—
Total loans	$	5,272	$	1,343	$	2,777	$	9,392		$	5,571,173	$	5,580,565	$	—
Percent of total loans								0.17	%

Within all loan portfolio segments, loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due from the borrower in accordance with the contractual terms of the loan. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified due date. Impaired loans, excluding certain modified, are placed on nonaccrual status. Impaired loans include nonaccrual loans and loans modified in restructuring where concessions have been granted to borrowers experiencing financial difficulties. These concessions could include a reduction in the interest rate on the loan, payment extensions, forgiveness of principal, forbearance or other actions intended to maximize collection. It is the Company’s policy to have any restructured loans which are on nonaccrual status prior to being modified remain on nonaccrual status until, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. If the restructured loan is on accrual status prior to being modified, the loan is reviewed to determine if the modified loan should remain on accrual status.

The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is ninety days past due. The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be modified is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.

The amount of interest income recognized by the Company within the periods stated above was due to loans modified in restructuring that remain on accrual status.

The aggregate principal balances of nonaccrual, past due ninety days or more loans were $28.8 million and $18.8 million at December 31, 2024 and 2023, respectively. Interest income that would have been recorded under the original terms of such nonaccrual loans totaled $1.4 million, $412,000 and $103,000 in 2024, 2023, and 2022, respectively.

Subsequent to adoption of ASU 2016-13 on January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered PCD loans. At the acquisition date, an estimate of expected credit losses is made for groups of PCD loans with similar risk characteristics and individual PCD loans without similar risk characteristics. This initial allowance for credit losses is allocated to individual PCD loans and added to the purchase price or acquisition date fair values to establish the initial amortized cost basis of the PCD loans. As the initial allowance for credit losses is added to the purchase price, there is no credit loss expense recognized upon acquisition of a PCD loan. Any difference between the unpaid principal balance of PCD loans and the amortized cost basis is considered to relate to noncredit factors and results in a discount or premium. Discounts and premiums are recognized through interest income on a level-yield method over the life of the loans. All loans considered to be PCI prior to January 1, 2020 were converted to PCD on that date.

The following table shows the amortized cost of loans at December 31, 2024 and 2023 that were both experiencing financial difficulty and modified segregated by portfolio segment and type of modification. The percentage of the amortized cost of loans that were modified to borrowers in financial distress as compared to outstanding loans is also presented below.


									Total
			Payment		Term		Interest		Class of
	Principal		Delay		Extension		Rate		Financing
	Forgiveness		Investment		Modifications		Reduction		Receivable
December 31, 2024
Agricultural real estate	$	—	$	309	$	—	$	—		0.01	%
1-4 family residential properties		—		45		758		—		0.01	%
Commercial real estate		—		847		188		472		0.03	%
Loans secured by real estate		—		1,201		946		472		0.05	%
Commercial and industrial loans		—		136		92		—		—	%
Consumer loans		—		2		8		—		—	%
Total	$	—	$	1,339	$	1,046	$	472		0.05	%
December 31, 2023
Agricultural real estate	$	—	$	331	$	—	$	—		0.01	%
1-4 family residential properties		—		55		807		—		0.02	%
Commercial real estate		—		744		131		562		0.03	%
Loans secured by real estate		—		1,130		938		562		0.05	%
Commercial and industrial loans		—		199		178		—		0	%
Consumer loans		—		6		38		—		—	%
Total	$	—	$	1,335	$	1,154	$	562		0.05	%

The Company closely monitors the performance of loans that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of such loans that have been modified in the last twelve months ended December 31, 2024.

A loan is considered to be in payment default once it is 90 days past due under the modified terms. There were no loans modified during the prior twelve months that experienced defaults for twelve months ended December 31, 2024.

At December 31, 2024 and 2023, the balance of real estate owned include $2.2 million and $1.2 million respectively of foreclosed real estate properties recorded as a result of obtaining physical possession of the property. At December 31, 2024 and 2023, the recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceeds were in process was $2.8 million and $399,000.