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Loans | 12 Months Ended
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Dec. 31, 2023
Receivables [Abstract] |
Loans | NOTE 4 – LOANS Loan balances at year end were as follows:
|  | 2023 |  |  | 2022 |
(In Thousands of Dollars) |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |
Owner occupied |  | $ | 399,273 |  |  | $ | 330,768 |
Non-owner occupied |  |  | 712,315 |  |  |  | 563,652 |
Farmland |  |  |  |  | 202,950 |  |  |  | 188,850 |
Other |  |  | 224,218 |  |  |  | 133,630 |
Commercial |  |  |  |  |  |
Commercial and industrial |  |  | 346,354 |  |  |  | 293,643 |
Agricultural |  |  | 58,338 |  |  |  | 58,087 |
Residential real estate |  |  |  |  |  |
1-4 family residential |  |  | 843,697 |  |  |  | 475,791 |
Home equity lines of credit |  |  | 142,441 |  |  |  | 132,179 |
Consumer |  |  |  |  |  |
Indirect |  |  | 226,815 |  |  |  | 197,125 |
Direct |  |  | 23,805 |  |  |  | 16,421 |
Other |  |  | 9,164 |  |  |  | 7,714 |
Total originated loans |  | $ | 3,189,370 |  |  | $ | 2,397,860 |
Net deferred loan costs |  |  | 8,757 |  |  |  | 6,890 |
Allowance for credit losses |  |  | (34,440 | ) |  |  | (26,978 | )
Net loans |  | $ | 3,163,687 |  |  | $ | 2,377,772 |
Allowance for credit loss activity The following tables present the activity in the allowance for credit losses by portfolio segment for years ended December 31, 2023, 2022 and 2021:
December 31, 2023 |  | Commercial Real Estate |  |  | Commercial |  |  | Residential Real Estate |  |  | Consumer |  |  | Total |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
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 |  |  | 2,808 |  |  |  | 1,931 |  |  |  | 2,834 |  |  |  | 1,145 |  |  |  | 8,718 |
Loans charged off |  |  | (349 | ) |  |  | (1,272 | ) |  |  | (384 | ) |  |  | (932 | ) |  |  | (2,937 | )
Recoveries |  |  | 1 |  |  |  | 104 |  |  |  | 81 |  |  |  | 496 |  |  |  | 682 |
Total ending allowance balance |  | $ | 18,150 |  |  | $ | 5,087 |  |  | $ | 6,916 |  |  | $ | 4,287 |  |  | $ | 34,440 |
December 31, 2022 |  | Commercial Real Estate |  |  | Commercial |  |  | Residential Real Estate |  |  | Consumer |  |  | Total |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 15,879 |  |  | $ | 4,949 |  |  | $ | 4,870 |  |  | $ | 3,688 |  |  | $ | 29,386 |
Provision for credit losses |  |  | (742 | ) |  |  | 1,204 |  |  |  | (493 | ) |  |  | 281 |  |  |  | 250 |
Loans charged off |  |  | (300 | ) |  |  | (2,042 | ) |  |  | (92 | ) |  |  | (870 | ) |  |  | (3,304 | )
Recoveries |  |  | 3 |  |  |  | 75 |  |  |  | 89 |  |  |  | 479 |  |  |  | 646 |
Total ending allowance balance |  | $ | 14,840 |  |  | $ | 4,186 |  |  | $ | 4,374 |  |  | $ | 3,578 |  |  | $ | 26,978 |
December 31, 2021 |  | Commercial Real Estate |  |  | Commercial |  |  | Residential Real Estate |  |  | Consumer |  |  | Total |
Allowance for credit losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 10,746 |  |  | $ | 5,018 |  |  | $ | 3,687 |  |  | $ | 2,693 |  |  | $ | 22,144 |
Impact of CECL adoption |  |  | (2,137 | ) |  |  | 259 |  |  |  | 193 |  |  |  | 3,845 |  |  |  | 2,160 |
Provision for credit losses |  |  | 6,226 |  |  |  | (349 | ) |  |  | 1,121 |  |  |  | (2,349 | ) |  |  | 4,649 |
PCD ACL on loans acquired |  |  | 1,081 |  |  |  | 210 |  |  |  | 4 |  |  |  | 0 |  |  |  | 1,295 |
Loans charged off |  |  | (70 | ) |  |  | (388 | ) |  |  | (297 | ) |  |  | (912 | ) |  |  | (1,667 | )
Recoveries |  |  | 33 |  |  |  | 199 |  |  |  | 162 |  |  |  | 411 |  |  |  | 805 |
Total ending allowance balance |  | $ | 15,879 |  |  | $ | 4,949 |  |  | $ | 4,870 |  |  | $ | 3,688 |  |  | $ | 29,386 |
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 December 31, 2023. As of December 31, 2023, the Company expects that the markets in which it operates will experience minimal changes to economic conditions, with a stable trend in unemployment, 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 December 31, 2022 to December 31, 2023 is largely attributed to the Emclaire merger. The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2023:
(In Thousands of Dollars) |  | Nonaccrual with no allowance for credit loss |  |  | Nonaccrual with an allowance for credit loss |  |  | Loans past due over 89 days still accruing |
December 31, 2023 |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |
Owner occupied |  | $ | 1,804 |  |  | $ | 830 |  |  | $ | 0 |
Non-owner occupied |  |  | 19 |  |  |  | 1,491 |  |  |  | 0 |
Farmland |  |  | 1,957 |  |  |  | 9 |  |  |  | 0 |
Other |  |  | 0 |  |  |  | 80 |  |  |  | 0 |
Commercial |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 394 |  |  |  | 1,408 |  |  |  | 0 |
Agricultural |  |  | 203 |  |  |  | 317 |  |  |  | 0 |
Residential real estate |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 348 |  |  |  | 3,009 |  |  |  | 460 |
Home equity lines of credit |  |  | 240 |  |  |  | 210 |  |  |  | 69 |
Consumer |  |  |  |  |  |  |  |  |
Indirect |  |  | 22 |  |  |  | 300 |  |  |  | 125 |
Direct |  |  | 65 |  |  |  | 69 |  |  |  | 1 |
Other |  |  | 0 |  |  |  | 5 |  |  |  | 0 |
Total loans |  | $ | 5,052 |  |  | $ | 7,728 |  |  | $ | 655 |
The above table for the period ending December 31, 2023 does not include a $1.63 million non-owner occupied commercial real estate loan that is held-for-sale and in nonaccrual status. There were no nonaccrual or past due loans related to loans held-for-sale at December 31, 2022. 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 December 31, 2022:
|  | 2022 |
|  | Nonaccrual |  |  | Loans Past Due 90 Days or More Still Accruing |
(In Thousands of Dollars) |  |  |  |
Commercial real estate |  |  |  |  |  |
Owner occupied |  | $ | 993 |  |  | $ | 0 |
Non-owner occupied |  |  | 3,031 |  |  |  | 0 |
Farmland |  |  | 2,183 |  |  |  | 0 |
Other |  |  | 33 |  |  |  |
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 table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2023:
(In Thousands of Dollars) |  | Real Estate |  |  | Business Assets |  |  | Vehicles |  |  | Cash |
December 31, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | $ | 1,804 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Non-owner occupied |  |  | 1,335 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Farmland |  |  | 1,957 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 94 |  |  |  | 867 |  |  |  | 0 |  |  |  | 0 |
Agricultural |  |  | 0 |  |  |  | 203 |  |  |  | 0 |  |  |  | 0 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 3,352 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Home equity lines of credit |  |  | 294 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Indirect |  |  | 0 |  |  |  | 0 |  |  |  | 53 |  |  |  | 0 |
Direct |  |  | 0 |  |  |  | 0 |  |  |  | 19 |  |  |  | 66 |
Other |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total loans |  | $ | 8,836 |  |  | $ | 1,070 |  |  | $ | 72 |  |  | $ | 66 |
The following tables present the aging of the amortized cost basis in past due loans as of December 31, 2023 and 2022 by class of loans:
December 31, 2023 |  | 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 |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | $ | 302 |  |  | $ | 293 |  |  | $ | 2,634 |  |  | $ | 3,229 |  |  | $ | 395,799 |  |  | $ | 399,028 |
Non-owner occupied |  |  | 90 |  |  |  | 0 |  |  |  | 1,510 |  |  |  | 1,600 |  |  |  | 710,195 |  |  |  | 711,795 |
Farmland |  |  | 365 |  |  |  | 0 |  |  |  | 1,966 |  |  |  | 2,331 |  |  |  | 200,395 |  |  |  | 202,726 |
Other |  |  | 0 |  |  |  | 0 |  |  |  | 80 |  |  |  | 80 |  |  |  | 223,697 |  |  |  | 223,777 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 540 |  |  |  | 199 |  |  |  | 1,802 |  |  |  | 2,541 |  |  |  | 345,278 |  |  |  | 347,819 |
Agricultural |  |  | 292 |  |  |  | 40 |  |  |  | 520 |  |  |  | 852 |  |  |  | 58,223 |  |  |  | 59,075 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 6,819 |  |  |  | 4,488 |  |  |  | 3,817 |  |  |  | 15,124 |  |  |  | 828,437 |  |  |  | 843,561 |
Home equity lines of credit |  |  | 729 |  |  |  | 34 |  |  |  | 519 |  |  |  | 1,282 |  |  |  | 141,189 |  |  |  | 142,471 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Indirect |  |  | 2,045 |  |  |  | 289 |  |  |  | 447 |  |  |  | 2,781 |  |  |  | 232,105 |  |  |  | 234,886 |
Direct |  |  | 153 |  |  |  | 23 |  |  |  | 135 |  |  |  | 311 |  |  |  | 23,514 |  |  |  | 23,825 |
Other |  |  | 4 |  |  |  | 0 |  |  |  | 5 |  |  |  | 9 |  |  |  | 9,155 |  |  |  | 9,164 |
Total loans |  | $ | 11,339 |  |  | $ | 5,366 |  |  | $ | 13,435 |  |  | $ | 30,140 |  |  | $ | 3,167,987 |  |  | $ | 3,198,127 |
December 31, 2022 |  | 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 |
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 |
Loan Restructurings: The Company adopted the accounting guidance in ASU No. 2022-02, effective as of January 1, 2023, which eliminates the recognition and measurement of troubled debt restructurings ("TDRs"). Due to the removal of the TDR designation, the Company evaluates all loan restructurings according to the accounting guidance for loan modifications to determine if the restructuring results in a new loan or a continuation of the existing loan. Loan modifications to borrowers experiencing financial difficulty that result in a direct change in the timing or amount of contractual cash flows include situations where there is principal forgiveness, interest rate reductions, other-than-insignificant payment delays, term extensions, and combinations of the listed modifications. Therefore, the disclosures related to loan restructurings are only for modifications that directly affect cash flows. Any restructuring of a loan in which the borrower has experienced financial difficulty and the terms of the loan are more favorable than would generally be considered for borrowers with the same credit characteristics would be individually evaluated. Otherwise, the restructured loan remains in the appropriate segment in the ACL model. The following table presents the amortized cost basis of loans that were both experiencing financial difficulty and modified during the twelve months ended December 31, 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 receivable is also presented below:
December 31, 2023 |  | Amortized Cost |  |  |  |
(In Thousands of Dollars) |  | Term Extension |  |  | Interest Rate Reduction |  |  | Combination Term Extension and Interest Rate Reduction |  |  | Total |  |  | % of Total Class of Financing Receivable |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  | $ | 48 |  |  | $ | 30 |  |  | $ | 132 |  |  | $ | 210 |  |  |  | 0.03 | %
Total modifications to borrowers experiencing financial difficulty |  | $ | 48 |  |  | $ | 30 |  |  | $ | 132 |  |  | $ | 210 |  |  |  | 0.01 | %
As of December 31, 2023, the Company had no commitments to lend any additional funds to the borrowers included in the previous table. The Company closely monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified in the twelve months ended December 31, 2023:
December 31, 2023 |  | Payment status (Amortized cost Basis) |
(In Thousands of Dollars) |  | Current |  |  | 30-89 Days past due |  |  | 90+ Days past due |
Accrual restructured loans |  |  |  |  |  |  |  |  |
Residential real estate |  |  |  |  |  |  |  |  |
1-4 family residential |  | $ | 132 |  |  | $ | 30 |  |  | $ | 0 |
Total accruing restructured loans |  | $ | 132 |  |  | $ | 30 |  |  | $ | 0 |
Nonaccrual restructured loans |  |  |  |  |  |  |  |  |
Residential real estate |  |  |  |  |  |  |  |  |
1-4 family residential |  | $ | 48 |  |  | $ | 0 |  |  | $ | 0 |
Total nonaccrual restructured loans |  | $ | 48 |  |  | $ | 0 |  |  | $ | 0 |
Total restructured loans |  | $ | 180 |  |  | $ | 30 |  |  | $ | 0 |
The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023:
|  | Payment Deferral |  | Interest Rate Reduction |  |  | Term Extension |
|  | Weighted-Average Years Added to the Life |  | Weighted-Average Contractual Interest Rate |  |  | Weighted-Average Years Added to the Life |
December 31, 2023 |  |  |  | From |  |  | To |  |  |  |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  |  |  |  |  | 4.77 | % |  |  | 3.38 | % |  |  |  |  | 6.3 |
The following table presents the amortized cost basis of loans that had a payment default during the year ended December 31, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty. For purposes of this disclosure a default occurs when within 12 months of the original modification, a loan is 30 days contractually past due under the modified terms:
December 31, 2023 |  | Amortized Cost |
(In Thousands of Dollars) |  | Term Extension |  |  | Interest Rate Reduction |  |  | Combination Term Extension and Interest Rate Reduction |
Residential real estate |  |  |  |  |  |  |  |  |
1-4 family residential |  | $ | 0 |  |  | $ | 30 |  |  | $ | 0 |
Total modifications to borrowers experiencing financial difficulty |  | $ | 0 |  |  | $ | 30 |  |  | $ | 0 |
Upon the Company's determination that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance of credit losses is adjusted by the same amount. 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 establishes a risk rating at origination for all commercial loan and commercial real estate relationships. For relationships over $1 million management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt. Management also affirms the risk ratings for the loans and leases in their respective portfolios on an annual basis. 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 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. 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 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 facts, 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 to be pass rated loans. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
December 31, 2023 |  | Pass |  |  | Special Mention |  |  | Sub standard |  |  | Total |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | $ | 386,015 |  |  | $ | 9,628 |  |  | $ | 3,385 |  |  | $ | 399,028 |
Non-owner occupied |  |  | 648,063 |  |  |  | 27,938 |  |  |  | 35,794 |  |  |  | 711,795 |
Farmland |  |  | 200,240 |  |  |  | 0 |  |  |  | 2,486 |  |  |  | 202,726 |
Other |  |  | 215,459 |  |  |  | 0 |  |  |  | 8,318 |  |  |  | 223,777 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 334,764 |  |  |  | 646 |  |  |  | 12,409 |  |  |  | 347,819 |
Agricultural |  |  | 58,506 |  |  |  | 17 |  |  |  | 552 |  |  |  | 59,075 |
Total loans |  | $ | 1,843,047 |  |  | $ | 38,229 |  |  | $ | 62,944 |  |  | $ | 1,944,220 |
December 31, 2022 |  | Pass |  |  | Special Mention |  |  | Sub standard |  |  | Total |
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 |
The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential, consumer and indirect loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The above table for the period ending December 31, 2023 does not include a $1.63 million non-owner occupied commercial real estate loan that is held-for-sale and risk-rated substandard. There were no special mention or substandard loans related to loans held-for-sale at December 31, 2022. In the 1-4 family residential real estate portfolio at December 31, 2023, other real estate owned and foreclosure properties were $92 thousand and $207 thousand, respectively. At December 31, 2022, other real estate owned and foreclosure properties were $0 and $129 thousand, respectively. The following table presents the amortized cost in residential, consumer and indirect auto loans based on payment activity. Nonperforming loans are loans past due 90 days and still accruing interest and nonaccrual loans.
|  | Residential Real Estate |  |  | Consumer |
December 31, 2023 |  | 1-4 Family Residential |  |  | Home Equity Lines of Credit |  |  | Indirect |  |  | Direct |  |  | Other |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 839,744 |  |  | $ | 141,952 |  |  | $ | 234,439 |  |  | $ | 23,690 |  |  | $ | 9,159 |
Nonperforming |  |  | 3,817 |  |  |  | 519 |  |  |  | 447 |  |  |  | 135 |  |  |  | 5 |
Total loans |  | $ | 843,561 |  |  | $ | 142,471 |  |  | $ | 234,886 |  |  | $ | 23,825 |  |  | $ | 9,164 |
|  | Residential Real Estate |  |  | Consumer |
December 31, 2022 |  | 1-4 Family Residential |  |  | Home Equity Lines of Credit |  |  | Indirect |  |  | Direct |  |  | Other |
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 |
The following table presents total loans by risk categories and year of origination.
|  | Term Loans Amortized Cost Basis by Origination Year |
As of December 31, 2023 |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Revolving Loans |  |  | Total |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 176,071 |  |  | $ | 250,364 |  |  | $ | 202,288 |  |  | $ | 128,800 |  |  | $ | 138,444 |  |  | $ | 338,829 |  |  | $ | 14,741 |  |  | $ | 1,249,537 |
Special mention |  |  | 0 |  |  |  | 293 |  |  |  | 12,156 |  |  |  | 8,779 |  |  |  | 6,565 |  |  |  | 9,773 |  |  |  | 0 |  |  |  | 37,566 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 3,972 |  |  |  | 18,232 |  |  |  | 3,982 |  |  |  | 20,627 |  |  |  | 684 |  |  |  | 47,497 |
Total commercial real estate loans |  | $ | 176,071 |  |  | $ | 250,657 |  |  | $ | 218,416 |  |  | $ | 155,811 |  |  | $ | 148,991 |  |  | $ | 369,229 |  |  | $ | 15,425 |  |  | $ | 1,334,600 |
Commercial real estate current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 145 |  |  | $ | 204 |  |  | $ | 0 |  |  | $ | 349 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 90,807 |  |  | $ | 85,255 |  |  | $ | 40,444 |  |  | $ | 21,794 |  |  | $ | 9,736 |  |  | $ | 23,030 |  |  | $ | 63,698 |  |  | $ | 334,764 |
Special mention |  |  | 0 |  |  |  | 141 |  |  |  | 355 |  |  |  | 21 |  |  |  | 0 |  |  |  | 0 |  |  |  | 129 |  |  |  | 646 |
Substandard |  |  | 195 |  |  |  | 3,551 |  |  |  | 980 |  |  |  | 404 |  |  |  | 1,077 |  |  |  | 699 |  |  |  | 5,503 |  |  |  | 12,409 |
Total commercial loans |  | $ | 91,002 |  |  | $ | 88,947 |  |  | $ | 41,779 |  |  | $ | 22,219 |  |  | $ | 10,813 |  |  | $ | 23,729 |  |  | $ | 69,330 |  |  | $ | 347,819 |
Commercial and industrial current period gross write-offs |  | $ | 0 |  |  | $ | 178 |  |  | $ | 579 |  |  | $ | 11 |  |  | $ | 16 |  |  | $ | 394 |  |  | $ | 0 |  |  | $ | 1,178 |
Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 36,314 |  |  | $ | 57,469 |  |  | $ | 29,807 |  |  | $ | 37,620 |  |  | $ | 20,020 |  |  | $ | 61,033 |  |  | $ | 16,483 |  |  | $ | 258,746 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 17 |  |  |  | 17 |
Substandard |  |  | 0 |  |  |  | 33 |  |  |  | 448 |  |  |  | 225 |  |  |  | 50 |  |  |  | 2,282 |  |  |  | 0 |  |  |  | 3,038 |
Total agricultural loans |  | $ | 36,314 |  |  | $ | 57,502 |  |  | $ | 30,255 |  |  | $ | 37,845 |  |  | $ | 20,070 |  |  | $ | 63,315 |  |  | $ | 16,500 |  |  | $ | 261,801 |
Agricultural current period gross write-offs |  | $ | 0 |  |  | $ | 15 |  |  | $ | 70 |  |  | $ | 3 |  |  | $ | 0 |  |  | $ | 6 |  |  | $ | 0 |  |  | $ | 94 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 63,365 |  |  | $ | 171,587 |  |  | $ | 164,271 |  |  | $ | 132,022 |  |  | $ | 49,035 |  |  | $ | 245,980 |  |  | $ | 3,652 |  |  | $ | 829,912 |
Special mention |  |  | 0 |  |  |  | 229 |  |  |  | 0 |  |  |  | 66 |  |  |  | 107 |  |  |  | 1,655 |  |  |  | 0 |  |  |  | 2,057 |
Substandard |  |  | 37 |  |  |  | 104 |  |  |  | 510 |  |  |  | 2,546 |  |  |  | 353 |  |  |  | 8,042 |  |  |  | 0 |  |  |  | 11,592 |
Total residential real estate loans |  | $ | 63,402 |  |  | $ | 171,920 |  |  | $ | 164,781 |  |  | $ | 134,634 |  |  | $ | 49,495 |  |  | $ | 255,677 |  |  | $ | 3,652 |  |  | $ | 843,561 |
Residential real estate current period gross write-offs |  | $ | 52 |  |  | $ | 0 |  |  | $ | 49 |  |  | $ | 130 |  |  | $ | 0 |  |  | $ | 129 |  |  | $ | 0 |  |  | $ | 360 |
Home equity lines of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 0 |  |  | $ | 19 |  |  | $ | 14 |  |  | $ | 44 |  |  | $ | 7 |  |  | $ | 1,911 |  |  | $ | 138,356 |  |  | $ | 140,351 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Substandard |  |  | 0 |  |  |  | 26 |  |  |  | 13 |  |  |  | 82 |  |  |  | 44 |  |  |  | 1,856 |  |  |  | 99 |  |  |  | 2,120 |
Total home equity lines of credit |  | $ | 0 |  |  | $ | 45 |  |  | $ | 27 |  |  | $ | 126 |  |  | $ | 51 |  |  | $ | 3,767 |  |  | $ | 138,455 |  |  | $ | 142,471 |
Home equity lines of credit current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 8 |  |  | $ | 0 |  |  | $ | 16 |  |  | $ | 0 |  |  | $ | 24 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 77,977 |  |  | $ | 75,517 |  |  | $ | 34,754 |  |  | $ | 22,580 |  |  | $ | 12,344 |  |  | $ | 34,840 |  |  | $ | 9,002 |  |  | $ | 267,014 |
Substandard |  |  | 54 |  |  |  | 125 |  |  |  | 175 |  |  |  | 188 |  |  |  | 133 |  |  |  | 186 |  |  |  | 0 |  |  |  | 861 |
Total consumer loans |  | $ | 78,031 |  |  | $ | 75,642 |  |  | $ | 34,929 |  |  | $ | 22,768 |  |  | $ | 12,477 |  |  | $ | 35,026 |  |  | $ | 9,002 |  |  | $ | 267,875 |
Consumer current period gross write-offs |  | $ | 44 |  |  | $ | 176 |  |  | $ | 93 |  |  | $ | 86 |  |  | $ | 32 |  |  | $ | 352 |  |  | $ | 149 |  |  | $ | 932 |
|  | 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 |
The Company follows ASU 2016-13 to calculate the allowance for credit losses which requires estimating credit losses over the lifetime of the credits. The ACL is adjusted through the provision for credit losses and reduced by net charge offs of loans. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of any underlying collateral. The credit loss estimation process involves procedures that consider the unique characteristics of the Company’s loan portfolio segments. These segments are disaggregated into the loan pools for monitoring. A model of risk characteristics, such as loss history and delinquency experience, trends in past due and non-performing loans, as well as existing economic conditions and supportable forecasts are used to determine credit loss assumptions. The Company uses two methodologies to analyze loan pools. The cohort method and the PD/LGD. Cohort relies on the creation of cohorts to capture loans that qualify for a particular segment, as of a point in time. Those loans are then tracked over their remaining lives to determine their loss experience. The Company aggregates financial assets on the basis of similar risk characteristics when evaluating loans on a collective basis. Those characteristics include, but are not limited to, internal or external credit score, risk ratings, financial asset, loan type, collateral type, size, effective interest rate, term, or geographical location. The Company uses cohort primarily for consumer loan portfolios. The probability of default portion of PD/LGD is defined by the Company as 90 days past due, placed on non-accrual, or is partially or wholly, charged-off. Typically, a one-year time period is used to asses PD. PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. Loss given default is to determine the percentage of loss by facility or collateral type. LGD estimates can sometimes be driven, or influenced, by product type, industry or geography. The Company uses PD/LGD primarily for commercial loan portfolios. The following table presents the loan pools and the associated methodology used during the calculation of the allowance for credit losses in 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
According to accounting standards, an entity may make an accounting policy election not to measure an allowance for credit losses for accrued interest receivable if the entity writes off the applicable accrued interest receivable balance in a timely manner. The Company has made the accounting policy election not to measure an allowance for credit losses for accrued interest receivables for all loan segments. Current policy dictates that a loan will be placed on nonaccrual status, with the current accrued interest receivable balance being written off, upon the loan being 90 days delinquent or when the loan is deemed to be collateral dependent and the collateral analysis shows insufficient collateral coverage based on a current assessment of the value of the collateral. In addition, ASC Topic 326 requires the Company to establish a liability for anticipated credit losses for unfunded commitments. To accomplish this, the Company must first establish a loss expectation for extended (funded) commitments. This loss expectation, expressed as a ratio to the amortized cost basis, is then applied to the portion of unfunded commitments not considered unilaterally cancelable, and considered by the company’s management as likely to fund over the life of the instrument. At December 31, 2023, the Company had $753 million in unfunded commitments and set aside $1.84 million in anticipated credit losses. At December 31, 2022, the Company had $603 million in unfunded commitments and set aside $1.4 million in anticipated credit losses. The $150 million increase in unfunded commitments and $435 thousand provision for anticipated credit losses is attributed to the Emclaire merger. This reserve is recorded in other liabilities as opposed to the ACL. The determination of ACL is complex and the Company makes decisions on the effects of factors that are inherently uncertain. Evaluations of the loan portfolio and individual credits require certain estimates, assumptions and judgments as to the facts and circumstances related to particular situations or credits. The ACL was $34.4 million at December 31, 2023 and $27.0 million at December 31, 2022. The $7.4 million increase is attributed to the Emclaire merger that was partially offset by improvements in the Company's maximum loss rates that anchor the qualitative factors, reclassification of construction loans balances that were placed into their permanent loan pool, adjustments made to the Commercial Staffing qualitative factor and release of reserves related to loans transferred to held for sale. Purchased Loans As a result of the Emclaire merger, the Company acquired $740.7 million in 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 |
Under ASC Topic 326, when loans are purchased with evidence of more than insignificant deterioration of credit, they are accounted for as purchase credit deteriorated ("PCD"). PCD loans acquired in a transaction are marked to fair value and a mark on yield is recorded. In addition, an adjustment is made to the ACL for the expected loss on the acquisition date. These loans are assessed on a regular basis and subsequent adjustments to the ACL are recorded on the income statement. During 2023, the Company acquired PCD loans with a fair value of $25.9 million, credit discount of $999 thousand and a noncredit discount of $5.5 million. The remaining discounts for all acquired PCD loans as of December 31, 2023 are $4.4 million. The outstanding balance at December 31, 2023 and related allowance on PCD loans is as follows (in thousands):
|  | Loan Balance |  |  | ACL Balance |
Commercial real estate |  |  |  |  |  |
Owner Occupied |  | $ | 430 |  |  | $ | 19 |
Non-owner Occupied |  |  | 30,653 |  |  |  | 914 |
Farmland |  |  | 9 |  |  |  | 0 |
Commercial |  |  |  |  |  |
Commercial and industrial |  |  | 2,229 |  |  |  | 158 |
Agricultural |  |  | 149 |  |  |  | 9 |
Residential real estate |  |  |  |  |  |
1-4 family residential |  |  | 1,211 |  |  |  | 7 |
Home equity lines of credit |  |  | 3 |  |  |  | 0 |
Total |  | $ | 34,684 |  |  | $ | 1,107 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//310-10/tableOfContent + Details
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- References No definition available. + Details
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