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Credit Quality Indicators (Tables)

3 Months Ended

Mar. 31, 2023

Risks and Uncertainties [Abstract]

Risk Category of Loans by Class of Loans

As of March 31, 2023 and December 31, 2022, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:


(In Thousands of Dollars)		Pass				Special Mention				Sub standard				Total
March 31, 2023
Commercial real estate
Owner occupied		$	341,657			$	5,592			$	4,607			$	351,856
Non-owner occupied			640,732				21,939				26,945				689,616
Farmland			187,365				0				2,663				190,028
Other			243,974				0				236				244,210
Commercial
Commercial and industrial			347,302				3,925				11,634				362,861
Agricultural			54,553				100				578				55,231
Total loans		$	1,815,583			$	31,556			$	46,663			$	1,893,802


(In Thousands of Dollars)		Pass				Special Mention				Sub standard				Total
December 31, 2022
Commercial real estate
Owner occupied		$	324,979			$	1,193			$	4,285			$	330,457
Non-owner occupied			527,267				25,541				10,236				563,044
Farmland			186,057				0				2,525				188,582
Other			133,218				0				103				133,321
Commercial
Commercial and industrial			282,412				777				11,217				294,406
Agricultural			58,002				250				337				58,589
Total loans		$	1,511,935			$	27,761			$	28,703			$	1,568,399

Investment in Residential, Consumer and Indirect Auto Loans Based on Payment Activity

The following tables present the recorded investment in residential, consumer indirect and direct auto loans based on payment activity as of March 31, 2023 and December 31, 2022. Nonperforming loans are loans past due 90 days or more and still accruing interest and nonaccrual loans.


		Residential Real Estate								Consumer
(In Thousands of Dollars)		1-4 Family Residential				Home Equity Lines of Credit				Indirect				Direct				Other
March 31, 2023
Performing		$	849,206			$	136,636			$	211,713			$	48,390			$	7,820
Nonperforming			3,489				714				391				175				3
Total loans		$	852,695			$	137,350			$	212,104			$	48,565			$	7,823


		Residential Real Estate								Consumer
(In Thousands of Dollars)		1-4 Family Residential				Home Equity Lines of Credit				Indirect				Direct				Other
December 31, 2022
Performing		$	472,335			$	131,416			$	204,248			$	16,266			$	7,712
Nonperforming			3,013				793				375				191				2
Total loans		$	475,348			$	132,209			$	204,623			$	16,457			$	7,714

Risk Categories and Year of Origination

The following table presents total loans by risk categories and year of origination.


		Term Loans Amortized Cost Basis by Origination Year
As of March 31, 2023		2023				2022				2021				2020				2019				Prior				Revolving Loans				Total
Commercial real estate
Risk Rating
Pass		$	14,279			$	252,740			$	232,382			$	155,030			$	155,914			$	401,917			$	14,101			$	1,226,363
Special mention			0				0				697				6,268				8,591				11,975				0				27,531
Substandard			0				0				1,730				3,923				2,122				22,889				1,124				31,788
Total commercial real estate loans		$	14,279			$	252,740			$	234,809			$	165,221			$	166,627			$	436,781			$	15,225			$	1,285,682

Commercial real estate current period gross write-offs		$	0			$	0			$	0			$	0			$	0			$	0			$	0			$	0

Commercial and industrial
Risk Rating
Pass		$	41,198			$	103,483			$	52,217			$	31,599			$	15,403			$	32,456			$	70,946			$	347,302
Special mention			0				191				495				42				1,049				0				2,148				3,925
Substandard			240				3,688				1,307				826				379				1,244				3,950				11,634
Total commercial loans		$	41,438			$	107,362			$	54,019			$	32,467			$	16,831			$	33,700			$	77,044			$	362,861

Commercial and industrial current period gross write-offs		$	0			$	0			$	51			$	11			$	11			$	50			$	0			$	123

Agricultural
Risk Rating
Pass		$	7,709			$	54,064			$	34,009			$	42,707			$	22,740			$	65,852			$	14,837			$	241,918
Special mention			0				0				0				0				0				0				100				100
Substandard			0				67				413				225				66				2,441				29				3,241
Total agricultural loans		$	7,709			$	54,131			$	34,422			$	42,932			$	22,806			$	68,293			$	14,966			$	245,259

Agricultural current period gross write-offs		$	0			$	15			$	5			$	0			$	0			$	0			$	0			$	20

Residential real estate
Risk Rating
Pass		$	13,307			$	175,165			$	172,632			$	144,525			$	52,795			$	280,084			$	3,936			$	842,444
Special mention			0				0				0				69				116				164				0				349
Substandard			0				0				500				401				384				8,617				0				9,902
Total residential real estate loans		$	13,307			$	175,165			$	173,132			$	144,995			$	53,295			$	288,865			$	3,936			$	852,695

Residential real estate current period gross write-offs		$	0			$	0			$	0			$	0			$	0			$	71			$	0			$	71

Home equity lines of credit
Risk Rating
Pass		$	0			$	0			$	10			$	0			$	0			$	1,936			$	133,138			$	135,084
Special mention			0				0				0				0				0				0				38				38
Substandard			0				27				13				67				20				1,977				124				2,228
Total home equity lines of credit		$	0			$	27			$	23			$	67			$	20			$	3,913			$	133,300			$	137,350

Home equity lines of credit current period gross write-offs		$	0			$	0			$	0			$	8			$	0			$	4			$	0			$	12

Consumer
Risk Rating
Pass		$	24,461			$	94,067			$	43,905			$	29,836			$	18,788			$	48,765			$	7,683			$	267,505
Substandard			0				134				101				257				223				272				0				987
Total consumer loans		$	24,461			$	94,201			$	44,006			$	30,093			$	19,011			$	49,037			$	7,683			$	268,492

Consumer current period gross write-offs		$	0			$	73			$	39			$	63			$	8			$	27			$	33			$	243


		Term Loans Amortized Cost Basis by Origination Year
As of December 31, 2022		2022				2021				2020				2019				2018				Prior				Revolving Loans				Total
Commercial real estate
Risk Rating
Pass		$	188,240			$	174,841			$	120,883			$	138,342			$	89,769			$	256,103			$	17,286			$	985,464
Special mention			0				711				1,861				5,286				624				18,252				0				26,734
Substandard			0				18				256				1,968				267				10,952				1,163				14,624
Total commercial real estate loans		$	188,240			$	175,570			$	123,000			$	145,596			$	90,660			$	285,307			$	18,449			$	1,026,822

Commercial
Risk Rating
Pass		$	100,368			$	45,872			$	34,110			$	16,854			$	13,574			$	14,664			$	56,970			$	282,412
Special mention			0				197				0				0				0				0				580				777
Substandard			3,642				1,331				356				152				110				1,761				3,865				11,217
Total commercial loans		$	104,010			$	47,400			$	34,466			$	17,006			$	13,684			$	16,425			$	61,415			$	294,406

Agricultural
Risk Rating
Pass		$	51,096			$	36,376			$	44,133			$	23,661			$	24,003			$	45,490			$	19,300			$	244,059
Special mention			0				0				0				0				0				0				250				250
Substandard			0				379				235				72				0				2,146				30				2,862
Total agricultural loans		$	51,096			$	36,755			$	44,368			$	23,733			$	24,003			$	47,636			$	19,580			$	247,171

Residential real estate
Risk Rating
Pass		$	83,951			$	112,463			$	76,095			$	31,404			$	22,918			$	135,757			$	3,956			$	466,544
Special mention			0				0				70				118				76				93				0				357
Substandard			0				136				249				121				9				7,932				0				8,447
Total residential real estate loans		$	83,951			$	112,599			$	76,414			$	31,643			$	23,003			$	143,782			$	3,956			$	475,348

Home equity lines of credit
Risk Rating
Pass		$	0			$	10			$	0			$	0			$	16			$	1,394			$	128,622			$	130,042
Special mention			0				0				0				0				0				0				49				49
Substandard			0				13				137				20				0				1,848				100				2,118
Total home equity lines of credit		$	0			$	23			$	137			$	20			$	16			$	3,242			$	128,771			$	132,209

Consumer
Risk Rating
Pass		$	98,530			$	46,945			$	32,284			$	20,849			$	10,918			$	10,942			$	7,302			$	227,770
Special mention			0				0				0				0				0				0				0				0
Substandard			102				113				267				230				109				202				1				1,024
Total consumer loans		$	98,632			$	47,058			$	32,551			$	21,079			$	11,027			$	11,144			$	7,303			$	228,794

Summary of Loan Pools and Methodology Used in Calculation of Allowance for Credit Losses

The following table presents the loan pools and the associated methodology used during the calculation of the allowance for credit losses in the first three months of 2023.


Portfolio Segments		Loan Pool		Methodology		Loss Drivers
Residential real estate		1-4 Family Residential Real Estate - 1st Liens		Cohort		Credit Loss History
		1-4 Family Residential Real Estate - 2nd Liens		Cohort		Credit Loss History
Home Equity Lines of Credit		Home Equity Lines of Credit		Cohort		Credit Loss History
Consumer Finance		Cash Reserves		Cohort		Credit Loss History
		Direct		Cohort		Credit Loss History
		Indirect		Cohort		Credit Loss History
Commercial		Commercial and Industrial		PD/LGD		Credit Loss History
		Agricultural		PD/LGD		Credit Loss History
		Municipal		PD/LGD		Credit Loss History
Commercial real estate		Owner Occupied		PD/LGD		Credit Loss History
		Non-Owner Occupied		PD/LGD		Credit Loss History
		Multifamily		PD/LGD		Credit Loss History
		Farmland		PD/LGD		Credit Loss History
		Construction		PD/LGD		Credit Loss History

Schedule of Par Value of Purchased Loans


		2023
Par value of acquired loans at acquisition		$	797,616
Net purchase discount			(55,958	)
Allowance for credit losses of PCD loans			(999	)
Purchase price of loans at acquisition		$	740,659

Schedule of Outstanding Balance and Related Allowance on Loans

The outstanding balance at March 31, 2023 and related allowance on PCD loans is as follows:


		Loan Balance				ACL Balance
Commercial real estate
Owner Occupied		$	1,662			$	29
Non-owner Occupied			41,108				1,068
Farmland			15				0
Commercial
Commercial and industrial			2,802				145
Agricultural			149				10
Residential real estate
1-4 family residential			1,448				9
Home equity lines of credit			3				0
Total		$	47,187			$	1,261