LOANS AND RELATED ALLOWANCE FOR CREDIT LOSSES

9 Months Ended

Sep. 30, 2024

Major categories of loans are summarized as follows:


(dollars in thousands)	September 30, 2024		December 31, 2023

Commercial and industrial	$	395,598	$	427,800
Commercial real estate - owner occupied	288,838		295,842
Commercial real estate - non-owner occupied	889,188		880,681
Construction and land development	359,151		363,983
Multi-family	432,712		417,923
One-to-four family residential	472,040		491,508
Agricultural and farmland	297,102		287,294
Municipal, consumer, and other	235,201		239,386
Loans, before allowance for credit losses	3,369,830		3,404,417
Allowance for credit losses	(40,966)		(40,048)
Loans, net of allowance for credit losses	$	3,328,864	$	3,364,369

Allowance for Credit Losses

Management estimates the allowance for credit losses using relevant available information from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. The discounted cash flow method is used to estimate expected credit losses for all loan categories, except for consumer loans where the weighted average remaining maturity method is utilized.

At September 30, 2024, the economic forecast used by management anticipates an economic slowdown, but not a recession, over the next 4 quarters considered in the forecast period, with the unemployment rate increasing and GDP growth slowing and then increasing modestly. After the forecast period, the Company reverts to long-term averages over a 4-quarter reversion period. Additionally, management has made qualitative adjustments to the loss estimates to reflect other factors that influence credit losses.

The following tables detail activity in the allowance for credit losses:


	Three Months Ended September 30, 2024
(dollars in thousands)	Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-owner Occupied		Construction and Land Development		Multi-Family		One-to-four Family Residential		Agricultural and Farmland		Municipal, Consumer, and Other		Total

Beginning balance	$	4,761	$	2,191	$	9,816	$	6,155	$	3,712	$	4,785	$	1,059	$	8,327	$	40,806

Provision for credit losses	980		36		(598)		423		78		26		226		(425)		746
Charge-offs	(734)		(6)		—		—		—		(125)		—		(236)		(1,101)
Recoveries	27		10		329		—		—		44		2		103		515
Ending balance	$	5,034	$	2,231	$	9,547	$	6,578	$	3,790	$	4,730	$	1,287	$	7,769	$	40,966

	Three Months Ended September 30, 2023
(dollars in thousands)	Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-owner Occupied		Construction and Land Development		Multi-Family		One-to-four Family Residential		Agricultural and Farmland		Municipal, Consumer, and Other		Total

Beginning balance	$	3,735	$	2,362	$	7,538	$	5,834	$	2,603	$	4,077	$	2,607	$	9,058	$	37,814


Provision for credit losses	515		(108)		248		1,004		(348)		(21)		(337)		30		983
Charge-offs	(15)		(2)		(171)		—		—		(8)		—		(216)		(412)
Recoveries	14		2		15		44		280		40		2		81		478
Ending balance	$	4,249	$	2,254	$	7,630	$	6,882	$	2,535	$	4,088	$	2,272	$	8,953	$	38,863

	Nine Months Ended September 30, 2024
(dollars in thousands)	Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-owner Occupied		Construction and Land Development		Multi-Family		One-to-four Family Residential		Agricultural and Farmland		Municipal, Consumer, and Other		Total

Beginning balance	$	4,980	$	2,272	$	7,714	$	5,998	$	3,837	$	5,204	$	975	$	9,068	$	40,048

Provision for credit losses	1,219		(49)		1,247		578		141		(470)		302		(985)		1,983
Charge-offs	(1,242)		(6)		—		—		(188)		(200)		—		(562)		(2,198)
Recoveries	77		14		586		2		—		196		10		248		1,133
Ending balance	$	5,034	$	2,231	$	9,547	$	6,578	$	3,790	$	4,730	$	1,287	$	7,769	$	40,966

	Nine Months Ended September 30, 2023
(dollars in thousands)	Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-owner Occupied		Construction and Land Development		Multi-Family		One-to-four Family Residential		Agricultural and Farmland		Municipal, Consumer, and Other		Total

Beginning balance	$	3,279	$	1,193	$	6,721	$	4,223	$	1,472	$	1,759	$	796	$	5,890	$	25,333
Adoption of ASC 326	(822)		587		501		1,969		85		797		1,567		2,299		6,983
PCD allowance established in acquisition	69		127		239		240		68		492		5		7		1,247
Provision for credit losses	1,693		336		87		398		630		939		(100)		1,021		5,004
Charge-offs	(15)		(5)		(171)		—		—		(34)		—		(508)		(733)
Recoveries	45		16		253		52		280		135		4		244		1,029
Ending balance	$	4,249	$	2,254	$	7,630	$	6,882	$	2,535	$	4,088	$	2,272	$	8,953	$	38,863

Gross charge-offs, further sorted by origination year, were as follows during the three months ended September 30, 2024 and 2023.


	Gross Charge-Offs for the Three Months Ended September 30, 2024
	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
(dollars in thousands)	2024		2023		2022		2021		2020		Prior

Commercial and industrial	$	—	$	734	$	—	$	—	$	—	$	—	$	—	$	—	$	734
Commercial real estate - owner occupied	6		—		—		—		—		—		—		—		6
Commercial real estate - non-owner occupied	—		—		—		—		—		—		—		—		—
Construction and land development	—		—		—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—		—		—
One-to-four family residential	—		—		1		—		—		124		—		—		125
Agricultural and farmland	—		—		—		—		—		—		—		—		—
Municipal, consumer, and other	154		3		5		—		—		—		74		—		236
Total	$	160	$	737	$	6	$	—	$	—	$	124	$	74	$	—	$	1,101

	Gross Charge-Offs for the Three Months Ended September 30, 2023
	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
(dollars in thousands)	2023		2022		2021		2020		2019		Prior

Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—	$	15
Commercial real estate - owner occupied	—		2		—		—		—		—		—		—		2
Commercial real estate - non-owner occupied	—		—		—		—		—		—		171		—		171
Construction and land development	—		—		—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—		—		—
One-to-four family residential	—		—		—		—		—		8		—		—		8
Agricultural and farmland	—		—		—		—		—		—		—		—		—
Municipal, consumer, and other	141		9		—		—		—		—		66		—		216
Total	$	141	$	11	$	—	$	—	$	—	$	8	$	252	$	—	$	412

Gross charge-offs, further sorted by origination year, were as follows during the nine months ended September 30, 2024 and 2023.


	Gross Charge-Offs for the Nine Months Ended September 30, 2024
	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
(dollars in thousands)	2024		2023		2022		2021		2020		Prior

Commercial and industrial	$	—	$	1,063	$	75	$	—	$	—	$	11	$	93	$	—	$	1,242
Commercial real estate - owner occupied	6		—		—		—		—		—		—		—		6
Commercial real estate - non-owner occupied	—		—		—		—		—		—		—		—		—
Construction and land development	—		—		—		—		—		—		—		—		—
Multi-family	—		—		—		188		—		—		—		—		188
One-to-four family residential	—		—		8		13		4		131		44		—		200
Agricultural and farmland	—		—		—		—		—		—		—		—		—
Municipal, consumer, and other	282		59		11		—		—		—		210		—		562
Total	$	288	$	1,122	$	94	$	201	$	4	$	142	$	347	$	—	$	2,198

	Gross Charge-Offs for the Nine Months Ended September 30, 2023
	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
(dollars in thousands)	2023		2022		2021		2020		2019		Prior

Commercial and industrial	$	—	$	—	$	—	$	—	$	—	$	—	$	15	$	—	$	15
Commercial real estate - owner occupied	—		5		—		—		—		—		—		—		5
Commercial real estate - non-owner occupied	—		—		—		—		—		—		171		—		171
Construction and land development	—		—		—		—		—		—		—		—		—
Multi-family	—		—		—		—		—		—		—		—		—
One-to-four family residential	—		—		—		—		1		33		—		—		34
Agricultural and farmland	—		—		—		—		—		—		—		—		—
Municipal, consumer, and other	276		83		—		9		—		—		140		—		508
Total	$	276	$	88	$	—	$	9	$	1	$	33	$	326	$	—	$	733

The following tables present loans and the related allowance for credit losses by category:


	September 30, 2024
(dollars in thousands)	Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-owner Occupied		Construction and Land Development		Multi-Family		One-to-four Family Residential		Agricultural and Farmland		Municipal, Consumer, and Other		Total

Loan balances:
Collectively evaluated for impairment	$	394,583	$	288,838	$	874,417	$	358,935	$	432,712	$	466,918	$	297,102	$	224,858	$	3,338,363
Individually evaluated for impairment	1,015		—		14,771		216		—		5,122		—		10,343		31,467
Total	$	395,598	$	288,838	$	889,188	$	359,151	$	432,712	$	472,040	$	297,102	$	235,201	$	3,369,830

Allowance for credit losses:
Collectively evaluated for impairment	$	4,840	$	2,231	$	9,004	$	6,578	$	3,790	$	4,654	$	1,287	$	5,359	$	37,743
Individually evaluated for impairment	194		—		543		—		—		76		—		2,410		3,223
Total	$	5,034	$	2,231	$	9,547	$	6,578	$	3,790	$	4,730	$	1,287	$	7,769	$	40,966

	December 31, 2023
(dollars in thousands)	Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-owner Occupied		Construction and Land Development		Multi-Family		One-to-four Family Residential		Agricultural and Farmland		Municipal, Consumer, and Other		Total

Loan balances:
Collectively evaluated for impairment	$	427,528	$	295,672	$	865,394	$	363,767	$	417,608	$	486,049	$	287,150	$	224,345	$	3,367,513
Individually evaluated for impairment	272		170		15,287		216		315		5,459		144		15,041		36,904
Total	$	427,800	$	295,842	$	880,681	$	363,983	$	417,923	$	491,508	$	287,294	$	239,386	$	3,404,417

Allowance for credit losses:
Collectively evaluated for impairment	$	4,960	$	2,272	$	6,693	$	5,998	$	3,837	$	4,957	$	975	$	6,137	$	35,829
Individually evaluated for impairment	20		—		1,021		—		—		247		—		2,931		4,219
Total	$	4,980	$	2,272	$	7,714	$	5,998	$	3,837	$	5,204	$	975	$	9,068	$	40,048

The following tables present collateral dependent loans, by the primary collateral type, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans:


	September 30, 2024
	Amortized Cost								Allowance for Credit Losses
	Primary Collateral Type
(dollars in thousands)	Real Estate		Vehicles		Other		Total

Commercial and industrial	$	—	$	973	$	42	$	1,015	$	194
Commercial real estate - owner occupied	—		—		—		—		—
Commercial real estate - non-owner occupied	14,771		—		—		14,771		543
Construction and land development	216		—		—		216		—
Multi-family	—		—		—		—		—
One-to-four family residential	5,122		—		—		5,122		76
Agricultural and farmland	—		—		—		—		—
Municipal, consumer, and other	10,329		—		14		10,343		2,410
Total	$	30,438	$	973	$	56	$	31,467	$	3,223

	December 31, 2023
	Amortized Cost								Allowance for Credit Losses
	Primary Collateral Type
(dollars in thousands)	Real Estate		Vehicles		Other		Total

Commercial and industrial	$	—	$	37	$	235	$	272	$	20
Commercial real estate - owner occupied	170		—		—		170		—
Commercial real estate - non-owner occupied	15,287		—		—		15,287		1,021
Construction and land development	216		—		—		216		—
Multi-family	315		—		—		315		—
One-to-four family residential	5,459		—		—		5,459		247
Agricultural and farmland	144		—		—		144		—
Municipal, consumer, and other	14,978		39		24		15,041		2,931
Total	$	36,569	$	76	$	259	$	36,904	$	4,219

Accrued interest on loans is excluded from the estimate of credit losses and totaled $18.9 million and $18.4 million as of September 30, 2024 and December 31, 2023, respectively.

Past Due and Nonaccrual Status

Past due status is based on the contractual terms of the loan. Typically, loans are placed on nonaccrual when they reach 90 days past due, or when, in management’s opinion, there is reasonable doubt regarding the collection of the amounts due through the normal means of the borrower. Interest accrued and unpaid at the time a loan is placed on nonaccrual status is reversed from interest income. Interest payments received on nonaccrual loans are recognized in accordance with our significant accounting policies. Once a loan is placed on nonaccrual status, the borrower must generally demonstrate at least six months of payment performance and we must believe that all remaining principal and interest is fully collectible, before the loan is eligible to return to accrual status.

The following tables present loans by category based on current payment and accrual status:


	September 30, 2024
	Accruing Interest
(dollars in thousands)	Current		30 - 89 Days Past Due		90+ Days Past Due		Nonaccrual		Total Loans

Commercial and industrial	$	393,371	$	1,212	$	—	$	1,015	$	395,598
Commercial real estate - owner occupied	288,838		—		—		—		288,838
Commercial real estate - non-owner occupied	887,355		—		—		1,833		889,188
Construction and land development	358,935		—		—		216		359,151
Multi-family	432,712		—		—		—		432,712
One-to-four family residential	466,096		822		—		5,122		472,040
Agricultural and farmland	296,952		150		—		—		297,102
Municipal, consumer, and other	234,942		240		5		14		235,201
Total	$	3,359,201	$	2,424	$	5	$	8,200	$	3,369,830


	December 31, 2023
	Accruing Interest
(dollars in thousands)	Current		30 - 89 Days Past Due		90+ Days Past Due		Nonaccrual		Total Loans

Commercial and industrial	$	427,300	$	228	$	—	$	272	$	427,800
Commercial real estate - owner occupied	295,672		—		—		170		295,842
Commercial real estate - non-owner occupied	878,591		255		—		1,835		880,681
Construction and land development	363,735		32		—		216		363,983
Multi-family	417,597		11		—		315		417,923
One-to-four family residential	484,969		1,735		—		4,804		491,508
Agricultural and farmland	286,820		330		—		144		287,294
Municipal, consumer, and other	239,033		252		37		64		239,386
Total	$	3,393,717	$	2,843	$	37	$	7,820	$	3,404,417

The following tables present nonaccrual loans with and without a related allowance for credit losses:


	September 30, 2024
(dollars in thousands)	Nonaccrual With Allowance for Credit Losses		Nonaccrual With No Allowance for Credit Losses		Total Nonaccrual

Commercial and industrial	$	522	$	493	$	1,015
Commercial real estate - owner occupied	—		—		—
Commercial real estate - non-owner occupied	—		1,833		1,833
Construction and land development	216		—		216
Multi-family	—		—		—
One-to-four family residential	350		4,772		5,122
Agricultural and farmland	—		—		—
Municipal, consumer, and other	—		14		14
Total	$	1,088	$	7,112	$	8,200

	December 31, 2023
(dollars in thousands)	Nonaccrual With Allowance for Credit Losses		Nonaccrual With No Allowance for Credit Losses		Total Nonaccrual

Commercial and industrial	$	120	$	152	$	272
Commercial real estate - owner occupied	—		170		170
Commercial real estate - non-owner occupied	188		1,647		1,835
Construction and land development	216		—		216
Multi-family	—		315		315
One-to-four family residential	14		4,790		4,804
Agricultural and farmland	—		144		144
Municipal, consumer, and other	—		64		64
Total	$	538	$	7,282	$	7,820

Credit Quality Indicators

In June 2024, the Company updated its risk rating categories to add a special mention category to provide another level of granularity in distinguishing risk levels of loans. As of June 30, 2024, $19.5 million of the special mention loans would have been considered pass-watch and $10.6 million would have been considered substandard under the previous risk rating categories.

The Company assigns a risk rating to all loans and periodically performs detailed internal reviews of all such loans that are part of relationships with over $750 thousand in total exposure to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to review by the Company’s regulators, external loan review, and internal loan review. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the fair values of collateral securing the loans. The risk rating is reviewed annually, at a minimum, and on an as needed basis depending on the specific circumstances of the loan. These credit quality indicators are used to assign a risk rating to each individual loan. Risk ratings are grouped into the following major categories:

Pass – a pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention.

Pass-Watch – a pass-watch loan is still considered a "pass" credit and is not a classified or criticized asset, but is a reflection of a borrower who exhibits credit weaknesses or downward trends warranting close attention and increased monitoring. These potential weaknesses may result in deterioration of the repayment prospects for the loan. No loss of principal or interest is expected, and the borrower does not pose sufficient risk to warrant a special mention, substandard, or doubtful classification.

Special Mention – a special mention loan has potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the assets or in the institution's credit position at some future date. Special mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard – a substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized as probable that the borrower will not pay principal and interest in accordance with the contractual terms.

Doubtful – a doubtful loan has all the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. There were no loans classified as Doubtful as of September 30, 2024 and December 31, 2023.

The following tables present loans by category based on their assigned risk ratings determined by management:


	September 30, 2024
(dollars in thousands)	Pass		Pass-Watch		Special Mention		Substandard		Total

Commercial and industrial	$	381,336	$	7,522	$	1,198	$	5,542	$	395,598
Commercial real estate - owner occupied	266,404		13,291		2,112		7,031		288,838
Commercial real estate - non-owner occupied	814,729		36,567		—		37,892		889,188
Construction and land development	335,413		22,993		—		745		359,151
Multi-family	413,055		3,875		15,782		—		432,712
One-to-four family residential	455,867		6,684		720		8,769		472,040
Agricultural and farmland	271,779		17,968		3,634		3,721		297,102
Municipal, consumer, and other	218,851		843		4,186		11,321		235,201
Total	$	3,157,434	$	109,743	$	27,632	$	75,021	$	3,369,830


	December 31, 2023
(dollars in thousands)	Pass		Pass-Watch		Substandard		Total

Commercial and industrial	$	419,494	$	7,128	$	1,178	$	427,800
Commercial real estate - owner occupied	275,649		14,072		6,121		295,842
Commercial real estate - non-owner occupied	822,012		33,283		25,386		880,681
Construction and land development	351,087		12,604		292		363,983
Multi-family	397,951		19,656		316		417,923
One-to-four family residential	472,355		6,671		12,482		491,508
Agricultural and farmland	280,867		3,071		3,356		287,294
Municipal, consumer, and other	222,474		1,721		15,191		239,386
Total	$	3,241,889	$	98,206	$	64,322	$	3,404,417

Risk ratings of loans, further sorted by origination year, are as follows as of September 30, 2024:


(dollars in thousands)	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
	2024		2023		2022		2021		2020		Prior
Commercial and industrial
Pass	$	33,752	$	51,453	$	51,936	$	13,003	$	19,879	$	37,876	$	170,093	$	3,344	$	381,336
Pass-Watch	680		1,470		257		1,189		85		2,459		1,183		199		7,522
Special Mention	—		289		301		182		—		—		426		—		1,198
Substandard	37		1,994		1,083		772		—		—		812		844		5,542
Total	$	34,469	$	55,206	$	53,577	$	15,146	$	19,964	$	40,335	$	172,514	$	4,387	$	395,598

Commercial real estate - owner occupied
Pass	$	29,821	$	25,311	$	60,189	$	45,088	$	41,576	$	47,197	$	17,040	$	182	$	266,404
Pass-Watch	4,197		476		2,231		4,473		547		1,367		—		—		13,291
Special Mention	1,926		—		—		—		—		—		186		—		2,112
Substandard	—		1,004		561		3,580		1,348		538		—		—		7,031
Total	$	35,944	$	26,791	$	62,981	$	53,141	$	43,471	$	49,102	$	17,226	$	182	$	288,838

Commercial real estate - non-owner occupied
Pass	$	58,586	$	115,444	$	250,564	$	225,220	$	89,131	$	66,324	$	8,227	$	1,233	$	814,729
Pass-Watch	3,677		430		6,681		6,831		839		4,920		13,189		—		36,567
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	4,844		13,431		6,638		—		—		12,979		—		—		37,892
Total	$	67,107	$	129,305	$	263,883	$	232,051	$	89,970	$	84,223	$	21,416	$	1,233	$	889,188

Construction and land development
Pass	$	140,878	$	88,022	$	72,878	$	21,229	$	840	$	1,374	$	9,931	$	261	$	335,413
Pass-Watch	—		638		8,748		12,097		—		18		695		797		22,993
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	475		—		216		—		—		54		—		—		745
Total	$	141,353	$	88,660	$	81,842	$	33,326	$	840	$	1,446	$	10,626	$	1,058	$	359,151

Multi-family
Pass	$	27,106	$	85,056	$	100,132	$	102,243	$	51,365	$	42,226	$	4,087	$	840	$	413,055
Pass-Watch	2,799		—		570		—		—		500		—		6		3,875
Special Mention	6,978		—		—		—		8,804		—		—		—		15,782
Substandard	—		—		—		—		—		—		—		—		—
Total	$	36,883	$	85,056	$	100,702	$	102,243	$	60,169	$	42,726	$	4,087	$	846	$	432,712

One-to-four family residential
Pass	$	33,280	$	89,297	$	85,760	$	73,658	$	59,745	$	48,968	$	59,643	$	5,516	$	455,867
Pass-Watch	1,245		1,363		625		441		520		2,160		187		143		6,684
Special Mention	—		—		—		598		122		—		—		—		720
Substandard	203		620		962		628		386		5,429		16		525		8,769
Total	$	34,728	$	91,280	$	87,347	$	75,325	$	60,773	$	56,557	$	59,846	$	6,184	$	472,040

Agricultural and farmland
Pass	$	35,985	$	37,170	$	32,799	$	29,367	$	28,589	$	9,421	$	97,650	$	798	$	271,779
Pass-Watch	275		2,683		1,424		1,454		511		844		10,689		88		17,968
Special Mention	137		609		600		—		1,100		—		938		250		3,634
Substandard	331		—		47		10		3,183		—		—		150		3,721
Total	$	36,728	$	40,462	$	34,870	$	30,831	$	33,383	$	10,265	$	109,277	$	1,286	$	297,102


(dollars in thousands)	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
	2024		2023		2022		2021		2020		Prior
Municipal, Consumer, and other
Pass	$	67,066	$	37,483	$	14,694	$	23,992	$	13,178	$	39,562	$	22,876	$	—	$	218,851
Pass-Watch	—		41		25		13		—		764		—		—		843
Special Mention	—		—		—		—		—		4,163		23		—		4,186
Substandard	50		23		38		—		—		11,207		3		—		11,321
Total	$	67,116	$	37,547	$	14,757	$	24,005	$	13,178	$	55,696	$	22,902	$	—	$	235,201

Total by Risk Rating
Pass	$	426,474	$	529,236	$	668,952	$	533,800	$	304,303	$	292,948	$	389,547	$	12,174	$	3,157,434
Pass-Watch	12,873		7,101		20,561		26,498		2,502		13,032		25,943		1,233		109,743
Special Mention	9,041		898		901		780		10,026		4,163		1,573		250		27,632
Substandard	5,940		17,072		9,545		4,990		4,917		30,207		831		1,519		75,021
Total	$	454,328	$	554,307	$	699,959	$	566,068	$	321,748	$	340,350	$	417,894	$	15,176	$	3,369,830

Risk ratings of loans, further sorted by origination year, are as follows as of December 31, 2023:


(dollars in thousands)	Term Loans by Origination Year												Revolving Loans		Revolving Loans Converted to Term		Total
	2023		2022		2021		2020		2019		Prior
Commercial and industrial
Pass	$	90,931	$	58,364	$	19,283	$	26,816	$	5,269	$	29,550	$	187,579	$	1,702	$	419,494
Pass-Watch	2,025		1,340		892		144		753		471		956		547		7,128
Substandard	111		73		327		60		—		—		323		284		1,178
Total	$	93,067	$	59,777	$	20,502	$	27,020	$	6,022	$	30,021	$	188,858	$	2,533	$	427,800

Commercial real estate - owner occupied
Pass	$	27,516	$	64,229	$	55,376	$	53,634	$	32,469	$	28,876	$	13,549	$	—	$	275,649
Pass-Watch	4,061		943		5,210		1,474		1,573		811		—		—		14,072
Substandard	2,734		86		1,550		64		164		1,523		—		—		6,121
Total	$	34,311	$	65,258	$	62,136	$	55,172	$	34,206	$	31,210	$	13,549	$	—	$	295,842

Commercial real estate - non-owner occupied
Pass	$	121,536	$	240,323	$	237,953	$	88,894	$	82,094	$	39,228	$	10,274	$	1,710	$	822,012
Pass-Watch	810		6,893		7,013		353		4,230		154		13,585		245		33,283
Substandard	13,376		124		286		—		2,410		9,190		—		—		25,386
Total	$	135,722	$	247,340	$	245,252	$	89,247	$	88,734	$	48,572	$	23,859	$	1,955	$	880,681

Construction and land development
Pass	$	153,499	$	119,005	$	56,954	$	5,596	$	2,662	$	796	$	12,050	$	525	$	351,087
Pass-Watch	153		10,750		—		—		—		—		163		1,538		12,604
Substandard	—		216		—		—		—		76		—		—		292
Total	$	153,652	$	129,971	$	56,954	$	5,596	$	2,662	$	872	$	12,213	$	2,063	$	363,983

Multi-family
Pass	$	83,898	$	81,507	$	115,402	$	53,126	$	34,053	$	23,570	$	5,904	$	491	$	397,951
Pass-Watch	3,111		7,197		—		8,821		51		468		—		8		19,656
Substandard	—		—		316		—		—		—		—		—		316
Total	$	87,009	$	88,704	$	115,718	$	61,947	$	34,104	$	24,038	$	5,904	$	499	$	417,923

One-to-four family residential
Pass	$	105,337	$	91,636	$	82,289	$	64,094	$	21,986	$	44,241	$	57,248	$	5,524	$	472,355
Pass-Watch	2,382		286		940		486		212		1,804		203		358		6,671
Substandard	1,507		1,527		623		646		1,037		4,166		64		2,912		12,482
Total	$	109,226	$	93,449	$	83,852	$	65,226	$	23,235	$	50,211	$	57,515	$	8,794	$	491,508

Agricultural and farmland
Pass	$	52,766	$	37,600	$	36,604	$	33,960	$	8,910	$	7,756	$	100,486	$	2,785	$	280,867
Pass-Watch	953		361		425		30		71		719		172		340		3,071
Substandard	—		—		13		3,199		—		144		—		—		3,356
Total	$	53,719	$	37,961	$	37,042	$	37,189	$	8,981	$	8,619	$	100,658	$	3,125	$	287,294

Municipal, Consumer, and other
Pass	$	43,575	$	57,404	$	27,904	$	14,342	$	1,016	$	42,499	$	35,734	$	—	$	222,474
Pass-Watch	9		6		13		—		—		1,693		—		—		1,721
Substandard	51		103		2		6		8		15,012		8		1		15,191
Total	$	43,635	$	57,513	$	27,919	$	14,348	$	1,024	$	59,204	$	35,742	$	1	$	239,386

Total by Risk Rating
Pass	$	679,058	$	750,068	$	631,765	$	340,462	$	188,459	$	216,516	$	422,824	$	12,737	$	3,241,889
Pass-Watch	13,504		27,776		14,493		11,308		6,890		6,120		15,079		3,036		98,206
Substandard	17,779		2,129		3,117		3,975		3,619		30,111		395		3,197		64,322
Total	$	710,341	$	779,973	$	649,375	$	355,745	$	198,968	$	252,747	$	438,298	$	18,970	$	3,404,417

Modifications

There were no loan modifications to borrowers in financial distress during the three and nine months ended September 30, 2024 and 2023. There were no modified loans to borrowers in financial distress outstanding as of September 30, 2024 and December 31, 2023.

Pledged Loans

As of September 30, 2024 and December 31, 2023, the Company pledged loans totaling $1.88 billion and $1.20 billion, respectively, to the Federal Home Loan Bank of Chicago (“FHLB”) to secure available FHLB advance borrowing capacity.