Loans

3 Months Ended

Mar. 31, 2023

Loans:

Loan balances were as follows:


(In Thousands of Dollars)	March 31, 2023			December 31, 2022
Commercial real estate
Owner occupied	$	352,148		$	330,768
Non-owner occupied		690,183			563,652
Farmland		190,284			188,850
Other		244,499			133,630
Commercial
Commercial and industrial		361,845			293,643
Agricultural		54,654			58,087
Residential real estate
1-4 family residential		853,074			475,791
Home equity lines of credit		137,319			132,179
Consumer
Indirect		204,239			197,125
Direct		48,534			16,421
Other		7,823			7,714
Total loans	$	3,144,602		$	2,397,860
Net deferred loan costs		7,737			6,890
Allowance for credit losses		(36,011	)		(26,978	)
Net loans	$	3,116,328		$	2,377,772

Allowance for credit loss activity

The following tables present the activity in the allowance for credit losses by portfolio segment for the three month periods ended March 31, 2023 and 2022:

Three Months Ended March 31, 2023


(In Thousands of Dollars)	Commercial Real Estate		Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	14,840	$	4,186		$	4,374		$	3,578		$	26,978
PCD ACL on loans acquired		850		138			11			0			999
Provision for credit losses		4,128		1,044			2,398			735			8,305
Loans charged off		0		(143	)		(83	)		(243	)		(469	)
Recoveries		1		5			32			160			198
Total ending allowance balance	$	19,819	$	5,230		$	6,732		$	4,230		$	36,011

Three Months Ended March 31, 2022


(In Thousands of Dollars)	Commercial Real Estate			Commercial			Residential Real Estate			Consumer			Total
Allowance for credit losses
Beginning balance	$	15,879		$	4,949		$	4,870		$	3,688		$	29,386
(Credit) Provision for credit losses		(672	)		271			(146	)		(383	)		(930	)
Loans charged off		0			(1,359	)		(34	)		(197	)		(1,590	)
Recoveries		0			6			12			131			149
Total ending allowance balance	$	15,207		$	3,867		$	4,702		$	3,239		$	27,015

The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Company's historical loss experience from December 31, 2011 to March 31, 2023. As of March 31, 2023, the Company expects that the markets in which it operates will experience minimal changes to economic conditions and slight increases in the unemployment rate and a level trend of delinquencies. Management adjusted historical loss experience for these expectations. No reversion adjustments were necessary, as the starting point for the Company's estimate was a cumulative loss rate covering the expected contractual term of the portfolio. While there are many factors that go into the calculation of the allowance for credit losses, the change in the balances from March 31, 2022 to March 31, 2023 is largely attributed to the Emlenton merger.

The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of March 31, 2023:


(In Thousands of Dollars)	Nonaccrual with no allowance for credit loss		Nonaccrual		Loans past due over 89 days still accruing
March 31, 2023
Commercial real estate
Owner occupied	$	688	$	464	$	0
Non-owner occupied		1,941		4,116		0
Farmland		2,109		15		0
Other		0		25		0
Commercial
Commercial and industrial		154		3,133		0
Agricultural		234		308		0
Residential real estate
1-4 family residential		484		2,294		711
Home equity lines of credit		286		258		170
Consumer
Indirect		14		320		57
Direct		65		105		5
Other		0		3		0
Total loans	$	5,975	$	11,041	$	943

The following table presents the recorded investment in nonaccrual and loans past due 90 days or more still on accrual by class of loans as of March 31, 2023 and December 31, 2022:


	December 31, 2022
(In Thousands of Dollars)	Nonaccrual		Loans Past Due 90 Days or More Still Accruing
Commercial real estate
Owner occupied	$	993	$	0
Non-owner occupied		3,031		0
Farmland		2,183		0
Other		33		0
Commercial
Commercial and industrial		3,840		50
Agricultural		299		0
Residential real estate
1-4 family residential		2,703		310
Home equity lines of credit		735		58
Consumer
Indirect		313		62
Direct		179		12
Other		2		0
Total loans	$	14,311	$	492

The following tables present the amortized cost basis of collateral-dependent loans by class of loans as of March 31, 2023:


(In Thousands of Dollars)	Real Estate		Business Assets		Vehicles		Cash
March 31, 2023
Commercial real estate
Owner occupied	$	809	$	0	$	0	$	0
Non-owner occupied		5,999		0		0		0
Farmland		2,109		0		0		0
Other		0		0		0		0
Commercial
Commercial and industrial		0		2,162		0		0
Agricultural		0		235		0		0
Residential real estate
1-4 family residential		1,522		0		0		0
Home equity lines of credit		344		0		0		0
Consumer
Indirect		0		0		57		0
Direct		0		0		26		66
Other		0		0		0		0
Total loans	$	10,783	$	2,397	$	83	$	66

The following tables present the aging of the recorded investment in past due loans as of March 31, 2023 and December 31, 2022 by class of loans.


(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
March 31, 2023
Commercial real estate
Owner occupied	$	12	$	0	$	1,152	$	1,164	$	350,692	$	351,856
Non-owner occupied		0		0		6,057		6,057		683,559		689,616
Farmland		149		0		2,124		2,273		187,755		190,028
Other		0		0		25		25		244,185		244,210
Commercial
Commercial and industrial		402		157		3,287		3,846		359,015		362,861
Agricultural		261		29		542		832		54,399		55,231
Residential real estate
1-4 family residential		7,156		554		3,489		11,199		841,496		852,695
Home equity lines of credit		395		86		714		1,195		136,155		137,350
Consumer
Indirect		802		94		391		1,287		210,817		212,104
Direct		103		12		175		290		48,275		48,565
Other		0		7		3		10		7,813		7,823
Total loans	$	9,280	$	939	$	17,959	$	28,178	$	3,124,161	$	3,152,339


(In Thousands of Dollars)	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due and Nonaccrual		Total Past Due		Loans Not Past Due		Total
December 31, 2022
Commercial real estate
Owner occupied	$	159	$	0	$	993	$	1,152	$	329,305	$	330,457
Non-owner occupied		0		0		3,031		3,031		560,013		563,044
Farmland		0		0		2,183		2,183		186,399		188,582
Other		0		0		33		33		133,288		133,321
Commercial
Commercial and industrial		1,034		185		3,890		5,109		289,297		294,406
Agricultural		104		20		299		423		58,166		58,589
Residential real estate
1-4 family residential		4,247		1,775		3,013		9,035		466,313		475,348
Home equity lines of credit		115		92		793		1,000		131,209		132,209
Consumer
Indirect		1,267		298		375		1,940		202,683		204,623
Direct		234		70		191		495		15,962		16,457
Other		0		5		2		7		7,707		7,714
Total loans	$	7,160	$	2,445	$	14,803	$	24,408	$	2,380,342	$	2,404,750