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Note 6 - Credit Quality Indicators | 9 Months Ended
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Sep. 30, 2025
Notes to Financial Statements |
Credit Loss, Financial Instrument [Text Block] | 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 $3 million, management monitors the loans on an ongoing basis for any changes in the borrower’s ability to service their debt and affirm their risk ratings. 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. Substandard loans 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. The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential, consumer indirect and direct loan classes, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Nonperforming loans are loans past due 90 days and still accruing interest and nonaccrual loans. The following table presents total loans by risk categories and year of origination:
|  | Term Loans Amortized Cost Basis by Origination Year |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |  |
As of September 30, 2025 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Loans |  |  | Total |
Commercial real estate - Owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 43,301 |  |  | $ | 47,313 |  |  | $ | 52,562 |  |  | $ | 41,874 |  |  | $ | 56,654 |  |  | $ | 141,067 |  |  | $ | 2,690 |  |  | $ | 385,461 |
Special mention |  |  | 0 |  |  |  | 659 |  |  |  | 4,787 |  |  |  | 0 |  |  |  | 1,082 |  |  |  | 76 |  |  |  | 0 |  |  |  | 6,604 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 1,346 |  |  |  | 434 |  |  |  | 1 |  |  |  | 1,424 |  |  |  | 0 |  |  |  | 3,205 |
Total commercial real estate - Owner occupied loans |  | $ | 43,301 |  |  | $ | 47,972 |  |  | $ | 58,695 |  |  | $ | 42,308 |  |  | $ | 57,737 |  |  | $ | 142,567 |  |  | $ | 2,690 |  |  | $ | 395,270 |
Commercial real estate - Owner Occupied: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 22 |  |  | $ | 75 |  |  | $ | 0 |  |  | $ | 97 |
Commercial real estate - Non-owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 67,403 |  |  | $ | 69,420 |  |  | $ | 51,091 |  |  | $ | 118,954 |  |  | $ | 76,167 |  |  | $ | 284,001 |  |  | $ | 22,107 |  |  | $ | 689,143 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 519 |  |  |  | 309 |  |  |  | 1,425 |  |  |  | 200 |  |  |  | 2,453 |
Substandard |  |  | 0 |  |  |  | 21 |  |  |  | 126 |  |  |  | 7,231 |  |  |  | 10,483 |  |  |  | 22,859 |  |  |  | 148 |  |  |  | 40,868 |
Doubtful |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,617 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,617 |
Total commercial real estate - Non-owner occupied loans |  | $ | 67,403 |  |  | $ | 69,441 |  |  | $ | 51,217 |  |  | $ | 126,704 |  |  | $ | 88,576 |  |  | $ | 308,285 |  |  | $ | 22,455 |  |  | $ | 734,081 |
Commercial real estate - Non-owner occupied: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Commercial real estate - Farmland: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 13,920 |  |  | $ | 24,667 |  |  | $ | 21,063 |  |  | $ | 36,398 |  |  | $ | 17,073 |  |  | $ | 94,243 |  |  | $ | 4,052 |  |  | $ | 211,416 |
Special mention |  |  | 0 |  |  |  | 64 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 64 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 1,922 |  |  |  | 0 |  |  |  | 356 |  |  |  | 305 |  |  |  | 0 |  |  |  | 2,583 |
Total commercial real estate - Farmland loans |  | $ | 13,920 |  |  | $ | 24,731 |  |  | $ | 22,985 |  |  | $ | 36,398 |  |  | $ | 17,429 |  |  | $ | 94,548 |  |  | $ | 4,052 |  |  | $ | 214,063 |
Commercial real estate - Farmland: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 44 |  |  | $ | 0 |  |  | $ | 44 |
Commercial real estate - Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 36,804 |  |  | $ | 51,668 |  |  | $ | 80,332 |  |  | $ | 64,809 |  |  | $ | 24,177 |  |  | $ | 25,377 |  |  | $ | 1,701 |  |  | $ | 284,868 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,386 |  |  |  | 0 |  |  |  | 1,386 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 992 |  |  |  | 10,786 |  |  |  | 111 |  |  |  | 17 |  |  |  | 0 |  |  |  | 11,906 |
Total commercial real estate - Other loans |  | $ | 36,804 |  |  | $ | 51,668 |  |  | $ | 81,324 |  |  | $ | 75,595 |  |  | $ | 24,288 |  |  | $ | 26,780 |  |  | $ | 1,701 |  |  | $ | 298,160 |
Commercial real estate - Other: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
|  | Term Loans Amortized Cost Basis by Origination Year (Continued) |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |  |
As of September 30, 2025 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Loans |  |  | Total |
Commercial - Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 58,378 |  |  | $ | 70,334 |  |  | $ | 58,831 |  |  | $ | 42,761 |  |  | $ | 14,327 |  |  | $ | 21,765 |  |  | $ | 74,716 |  |  | $ | 341,112 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,289 |  |  |  | 278 |  |  |  | 0 |  |  |  | 2,075 |  |  |  | 4,642 |
Substandard |  |  | 8 |  |  |  | 240 |  |  |  | 48 |  |  |  | 2,688 |  |  |  | 805 |  |  |  | 1,540 |  |  |  | 1,653 |  |  |  | 6,982 |
Total commercial - Commercial and industrial loans |  | $ | 58,386 |  |  | $ | 70,574 |  |  | $ | 58,879 |  |  | $ | 47,738 |  |  | $ | 15,410 |  |  | $ | 23,305 |  |  | $ | 78,444 |  |  | $ | 352,736 |
Commercial - Commercial and industrial: Current period gross write-offs |  | $ | 1 |  |  | $ | 112 |  |  | $ | 217 |  |  | $ | 282 |  |  | $ | 90 |  |  | $ | 79 |  |  | $ | 28 |  |  | $ | 809 |
Commercial - Agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 9,201 |  |  | $ | 7,697 |  |  | $ | 8,865 |  |  | $ | 9,189 |  |  | $ | 3,043 |  |  | $ | 1,351 |  |  | $ | 16,215 |  |  | $ | 55,561 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Substandard |  |  | 0 |  |  |  | 2 |  |  |  | 0 |  |  |  | 39 |  |  |  | 32 |  |  |  | 91 |  |  |  | 0 |  |  |  | 164 |
Total commercial - Agricultural loans |  | $ | 9,201 |  |  | $ | 7,699 |  |  | $ | 8,865 |  |  | $ | 9,228 |  |  | $ | 3,075 |  |  | $ | 1,442 |  |  | $ | 16,215 |  |  | $ | 55,725 |
Commercial - Agricultural: Current period gross write-offs |  | $ | 0 |  |  | $ | 114 |  |  | $ | 16 |  |  | $ | 17 |  |  | $ | 4 |  |  | $ | 13 |  |  | $ | 0 |  |  | $ | 164 |
Residential real estate - 1-4 family residential: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 62,564 |  |  | $ | 93,042 |  |  | $ | 61,441 |  |  | $ | 146,201 |  |  | $ | 142,915 |  |  | $ | 336,595 |  |  | $ | 4,711 |  |  | $ | 847,469 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 374 |  |  |  | 333 |  |  |  | 95 |  |  |  | 2,640 |  |  |  | 0 |  |  |  | 3,442 |
Total residential real estate - 1-4 family residential loans |  | $ | 62,564 |  |  | $ | 93,042 |  |  | $ | 61,815 |  |  | $ | 146,534 |  |  | $ | 143,010 |  |  | $ | 339,235 |  |  | $ | 4,711 |  |  | $ | 850,911 |
Residential real estate - 1-4 family residential: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 141 |  |  | $ | 55 |  |  | $ | 0 |  |  | $ | 196 |
Residential real estate - Home equity lines of credit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 0 |  |  | $ | 0 |  |  | $ | 165 |  |  | $ | 452 |  |  | $ | 145 |  |  | $ | 4,922 |  |  | $ | 170,524 |  |  | $ | 176,208 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 130 |  |  |  | 0 |  |  |  | 491 |  |  |  | 0 |  |  |  | 621 |
Total residential real estate - Home equity lines of credit loans |  | $ | 0 |  |  | $ | 0 |  |  | $ | 165 |  |  | $ | 582 |  |  | $ | 145 |  |  | $ | 5,413 |  |  | $ | 170,524 |  |  | $ | 176,829 |
Residential real estate - Home equity lines of credit: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 28 |  |  | $ | 0 |  |  | $ | 7 |  |  | $ | 0 |  |  | $ | 35 |
|  | Term Loans Amortized Cost Basis by Origination Year (Continued) |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |  |
As of September 30, 2025 |  | 2025 |  |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | Prior |  |  | Loans |  |  | Total |
Consumer - Indirect: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 53,886 |  |  | $ | 61,339 |  |  | $ | 42,533 |  |  | $ | 34,396 |  |  | $ | 17,379 |  |  | $ | 23,308 |  |  | $ | 0 |  |  | $ | 232,841 |
Nonperforming |  |  | 20 |  |  |  | 193 |  |  |  | 29 |  |  |  | 98 |  |  |  | 73 |  |  |  | 123 |  |  |  | 0 |  |  |  | 536 |
Total consumer - Indirect loans |  | $ | 53,906 |  |  | $ | 61,532 |  |  | $ | 42,562 |  |  | $ | 34,494 |  |  | $ | 17,452 |  |  | $ | 23,431 |  |  | $ | 0 |  |  | $ | 233,377 |
Consumer - Indirect: Current period gross write-offs |  | $ | 16 |  |  | $ | 191 |  |  | $ | 93 |  |  | $ | 40 |  |  | $ | 63 |  |  | $ | 381 |  |  | $ | 0 |  |  | $ | 784 |
Consumer - Direct: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 4,418 |  |  | $ | 1,791 |  |  | $ | 1,446 |  |  | $ | 1,053 |  |  | $ | 726 |  |  | $ | 8,586 |  |  | $ | 353 |  |  | $ | 18,373 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 26 |  |  |  | 2 |  |  |  | 0 |  |  |  | 7 |  |  |  | 0 |  |  |  | 35 |
Total consumer - Direct loans |  | $ | 4,418 |  |  | $ | 1,791 |  |  | $ | 1,472 |  |  | $ | 1,055 |  |  | $ | 726 |  |  | $ | 8,593 |  |  | $ | 353 |  |  | $ | 18,408 |
Consumer - Direct: Current period gross write-offs |  | $ | 0 |  |  | $ | 6 |  |  | $ | 16 |  |  | $ | 7 |  |  | $ | 0 |  |  | $ | 13 |  |  | $ | 0 |  |  | $ | 42 |
Consumer - Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 193 |  |  | $ | 64 |  |  | $ | 384 |  |  | $ | 7,579 |  |  | $ | 8,220 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total consumer - Other loans |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 193 |  |  | $ | 64 |  |  | $ | 384 |  |  | $ | 7,579 |  |  | $ | 8,220 |
Consumer - Other: Current period gross write-offs |  | $ | 0 |  |  | $ | 1 |  |  | $ | 5 |  |  | $ | 0 |  |  | $ | 1 |  |  | $ | 137 |  |  | $ | 0 |  |  | $ | 144 |
|  | Term Loans Amortized Cost Basis by Origination Year |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |  |
As of December 31, 2024 |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Loans |  |  | Total |
Commercial real estate - Owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 45,588 |  |  | $ | 56,389 |  |  | $ | 46,323 |  |  | $ | 60,179 |  |  | $ | 45,428 |  |  | $ | 127,665 |  |  | $ | 1,984 |  |  | $ | 383,556 |
Special mention |  |  | 0 |  |  |  | 3,228 |  |  |  | 0 |  |  |  | 1,118 |  |  |  | 0 |  |  |  | 519 |  |  |  | 0 |  |  |  | 4,865 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 659 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,962 |  |  |  | 66 |  |  |  | 2,687 |
Total commercial real estate - Owner occupied loans |  | $ | 45,588 |  |  | $ | 59,617 |  |  | $ | 46,982 |  |  | $ | 61,297 |  |  | $ | 45,428 |  |  | $ | 130,146 |  |  | $ | 2,050 |  |  | $ | 391,108 |
Commercial real estate - Owner Occupied: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 72 |  |  | $ | 0 |  |  | $ | 21 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 93 |
Commercial real estate - Non-owner occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 61,974 |  |  | $ | 44,323 |  |  | $ | 125,547 |  |  | $ | 78,933 |  |  | $ | 71,322 |  |  | $ | 251,465 |  |  | $ | 8,978 |  |  | $ | 642,542 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 6,284 |  |  |  | 313 |  |  |  | 1,356 |  |  |  | 10,024 |  |  |  | 150 |  |  |  | 18,127 |
Substandard |  |  | 7,065 |  |  |  | 407 |  |  |  | 0 |  |  |  | 11,249 |  |  |  | 7,129 |  |  |  | 7,931 |  |  |  | 0 |  |  |  | 33,781 |
Doubtful |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 834 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 834 |
Total commercial real estate - Non-owner occupied loans |  | $ | 69,039 |  |  | $ | 44,730 |  |  | $ | 131,831 |  |  | $ | 91,329 |  |  | $ | 79,807 |  |  | $ | 269,420 |  |  | $ | 9,128 |  |  | $ | 695,284 |
Commercial real estate - Non-owner occupied: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 4,380 |  |  | $ | 146 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 4,526 |
Commercial real estate - Farmland: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 19,832 |  |  | $ | 20,803 |  |  | $ | 39,126 |  |  | $ | 18,734 |  |  | $ | 31,620 |  |  | $ | 71,162 |  |  | $ | 3,071 |  |  | $ | 204,348 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 317 |  |  |  | 0 |  |  |  | 1,935 |  |  |  | 0 |  |  |  | 2,252 |
Total commercial real estate - Farmland loans |  | $ | 19,832 |  |  | $ | 20,803 |  |  | $ | 39,126 |  |  | $ | 19,051 |  |  | $ | 31,620 |  |  | $ | 73,097 |  |  | $ | 3,071 |  |  | $ | 206,600 |
Commercial real estate - Farmland: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
Commercial real estate - Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 40,993 |  |  | $ | 108,346 |  |  | $ | 65,724 |  |  | $ | 39,091 |  |  | $ | 8,493 |  |  | $ | 21,744 |  |  | $ | 728 |  |  | $ | 285,119 |
Special mention |  |  | 0 |  |  |  | 990 |  |  |  | 7,480 |  |  |  | 112 |  |  |  | 0 |  |  |  | 1,448 |  |  |  | 0 |  |  |  | 10,030 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 32 |  |  |  | 0 |  |  |  | 32 |
Total commercial real estate - Other loans |  | $ | 40,993 |  |  | $ | 109,336 |  |  | $ | 73,204 |  |  | $ | 39,203 |  |  | $ | 8,493 |  |  | $ | 23,224 |  |  | $ | 728 |  |  | $ | 295,181 |
Commercial real estate - Other: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
|  | Term Loans Amortized Cost Basis by Origination Year (Continued) |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |  |
As of December 31, 2024 |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Loans |  |  | Total |
Commercial - Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 84,491 |  |  | $ | 72,388 |  |  | $ | 55,279 |  |  | $ | 26,780 |  |  | $ | 10,744 |  |  | $ | 20,223 |  |  | $ | 70,675 |  |  | $ | 340,580 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 167 |  |  |  | 165 |  |  |  | 46 |  |  |  | 84 |  |  |  | 462 |
Substandard |  |  | 31 |  |  |  | 118 |  |  |  | 5,653 |  |  |  | 282 |  |  |  | 244 |  |  |  | 1,682 |  |  |  | 2,481 |  |  |  | 10,491 |
Total commercial - Commercial and industrial loans |  | $ | 84,522 |  |  | $ | 72,506 |  |  | $ | 60,932 |  |  | $ | 27,229 |  |  | $ | 11,153 |  |  | $ | 21,951 |  |  | $ | 73,240 |  |  | $ | 351,533 |
Commercial - Commercial and industrial: Current period gross write-offs |  | $ | 48 |  |  | $ | 273 |  |  | $ | 389 |  |  | $ | 125 |  |  | $ | 228 |  |  | $ | 257 |  |  | $ | 313 |  |  | $ | 1,633 |
Commercial - Agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 9,085 |  |  | $ | 11,703 |  |  | $ | 13,160 |  |  | $ | 5,481 |  |  | $ | 1,768 |  |  | $ | 850 |  |  | $ | 13,958 |  |  | $ | 56,005 |
Special mention |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 61 |  |  |  | 61 |
Substandard |  |  | 0 |  |  |  | 0 |  |  |  | 35 |  |  |  | 29 |  |  |  | 162 |  |  |  | 137 |  |  |  | 0 |  |  |  | 363 |
Total commercial - Agricultural loans |  | $ | 9,085 |  |  | $ | 11,703 |  |  | $ | 13,195 |  |  | $ | 5,510 |  |  | $ | 1,930 |  |  | $ | 987 |  |  | $ | 14,019 |  |  | $ | 56,429 |
Commercial - Agricultural: Current period gross write-offs |  | $ | 0 |  |  | $ | 1 |  |  | $ | 49 |  |  | $ | 13 |  |  | $ | 29 |  |  | $ | 17 |  |  | $ | 0 |  |  | $ | 109 |
Residential real estate - 1-4 family residential: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 79,820 |  |  | $ | 69,319 |  |  | $ | 157,403 |  |  | $ | 153,569 |  |  | $ | 119,770 |  |  | $ | 257,827 |  |  | $ | 3,261 |  |  | $ | 840,969 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 473 |  |  |  | 278 |  |  |  | 1,626 |  |  |  | 2,193 |  |  |  | 0 |  |  |  | 4,570 |
Total residential real estate - 1-4 family residential loans |  | $ | 79,820 |  |  | $ | 69,319 |  |  | $ | 157,876 |  |  | $ | 153,847 |  |  | $ | 121,396 |  |  | $ | 260,020 |  |  | $ | 3,261 |  |  | $ | 845,539 |
Residential real estate - 1-4 family residential: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 37 |  |  | $ | 0 |  |  | $ | 118 |  |  | $ | 0 |  |  | $ | 155 |
Residential real estate - Home equity lines of credit: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 0 |  |  | $ | 119 |  |  | $ | 153 |  |  | $ | 127 |  |  | $ | 68 |  |  | $ | 4,118 |  |  | $ | 153,051 |  |  | $ | 157,636 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 29 |  |  |  | 0 |  |  |  | 0 |  |  |  | 376 |  |  |  | 98 |  |  |  | 503 |
Total residential real estate - Home equity lines of credit loans |  | $ | 0 |  |  | $ | 119 |  |  | $ | 182 |  |  | $ | 127 |  |  | $ | 68 |  |  | $ | 4,494 |  |  | $ | 153,149 |  |  | $ | 158,139 |
Residential real estate - Home equity lines of credit: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |
|  | Term Loans Amortized Cost Basis by Origination Year (Continued) |
(In Thousands of Dollars) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |  |
As of December 31, 2024 |  | 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Loans |  |  | Total |
Consumer - Indirect: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 78,306 |  |  | $ | 55,525 |  |  | $ | 49,548 |  |  | $ | 23,331 |  |  | $ | 14,183 |  |  | $ | 19,962 |  |  | $ | 0 |  |  | $ | 240,855 |
Nonperforming |  |  | 0 |  |  |  | 57 |  |  |  | 233 |  |  |  | 97 |  |  |  | 62 |  |  |  | 51 |  |  |  | 0 |  |  |  | 500 |
Total consumer - Indirect loans |  | $ | 78,306 |  |  | $ | 55,582 |  |  | $ | 49,781 |  |  | $ | 23,428 |  |  | $ | 14,245 |  |  | $ | 20,013 |  |  | $ | 0 |  |  | $ | 241,355 |
Consumer - Indirect: Current period gross write-offs |  | $ | 10 |  |  | $ | 100 |  |  | $ | 206 |  |  | $ | 192 |  |  | $ | 174 |  |  | $ | 430 |  |  | $ | 0 |  |  | $ | 1,112 |
Consumer - Direct: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 2,735 |  |  | $ | 2,319 |  |  | $ | 2,406 |  |  | $ | 1,075 |  |  | $ | 792 |  |  | $ | 9,432 |  |  | $ | 326 |  |  | $ | 19,085 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 6 |  |  |  | 15 |  |  |  | 66 |  |  |  | 13 |  |  |  | 0 |  |  |  | 100 |
Total consumer - Direct loans |  | $ | 2,735 |  |  | $ | 2,319 |  |  | $ | 2,412 |  |  | $ | 1,090 |  |  | $ | 858 |  |  | $ | 9,445 |  |  | $ | 326 |  |  | $ | 19,185 |
Consumer - Direct: Current period gross write-offs |  | $ | 0 |  |  | $ | 7 |  |  | $ | 38 |  |  | $ | 6 |  |  | $ | 5 |  |  | $ | 120 |  |  | $ | 0 |  |  | $ | 176 |
Consumer - Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 60 |  |  | $ | 0 |  |  | $ | 409 |  |  | $ | 7,524 |  |  | $ | 7,993 |
Nonperforming |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Total consumer - Other loans |  | $ | 0 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 60 |  |  | $ | 0 |  |  | $ | 409 |  |  | $ | 7,524 |  |  | $ | 7,993 |
Consumer - Other: Current period gross write-offs |  | $ | 0 |  |  | $ | 0 |  |  | $ | 1 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 182 |  |  | $ | 0 |  |  | $ | 183 |
For the period ending September 30, 2025, the table does not include a $150,000 owner occupied commercial real estate loan that was held for sale and risk rated substandard. The previous table for the period ending December 31, 2024 does not include a $1.52 million owner occupied commercial real estate loan and a $77,000 commercial and industrial loan that was held for sale and risk rated substandard. In the residential real estate portfolios at September 30, 2025, other real estate owned and foreclosure properties were $111,000 and $812,000, respectively. At December 31, 2024, other real estate owned and foreclosure properties were $52,000 and $631,000, respectively. The Company follows ASU 2016-13 to calculate the allowance for credit losses which requires projecting 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 probability of default/loss given default (“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, loan restructuring for borrowers experiencing financial difficulty or is partially, or wholly, charged-off. Typically, a one-year time period is used to assess probability of default (“PD”). PD can be measured and applied using various risk criteria. Risk rating is one common way to apply PDs. Loss given default (“LGD”) 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 2025.
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 the accounting standard, 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, ASU 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 September 30, 2025, the Company had $704.4 million in unfunded commitments and set aside $1.22 million in anticipated credit losses. At December 31, 2024, the Company had $692.4 million in unfunded commitments and set aside $1.56 million in anticipated credit losses. The $12 million increase in unfunded commitments is attributed to loan growth, while the $346,000 decrease in the reserve for anticipated credit losses is due to adjustments to the Portfolio Composition and Growth qualitative factor of commercial real estate construction. This reserve is recorded in other liabilities as opposed to the ACL. The determination of the 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 $39.5 million at September 30, 2025 and $35.9 million at December 31, 2024. The increase of $3.6 million was due to the individual evaluation of three commercial real estate non-owner occupied relationships and one commercial real estate multifamily relationship which increased the Company's specific reserves, increased loss ratio trends of certain commercial real estate loan pools, and loan growth. These factors were partially offset by the adjustments to the maximum loss ratio that anchors the qualitative factors and adjustments to the Portfolio Composition and Growth and Commercial Concentration qualitative factors of certain loan pools. Purchased Loans Under ASU 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 2025, the Company has not acquired any additional PCD loans. The outstanding balance at September 30, 2025 and related allowance on PCD loans is as follows:
|  | September 30, 2025 |  |  | December 31, 2024 |
(In Thousands of Dollars) |  |  | Loan Balance |  |  |  | ACL Balance |  |  |  | Loan Balance |  |  |  | ACL Balance |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  | $ | 278 |  |  | $ | 10 |  |  | $ | 333 |  |  | $ | 11 |
Non-owner Occupied |  |  | 26,944 |  |  |  | 1,504 |  |  |  | 26,890 |  |  |  | 420 |
Farmland |  |  | 0 |  |  |  | 0 |  |  |  | 3 |  |  |  | 0 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 854 |  |  |  | 48 |  |  |  | 1,561 |  |  |  | 115 |
Agricultural |  |  | 88 |  |  |  | 6 |  |  |  | 117 |  |  |  | 8 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 909 |  |  |  | 5 |  |  |  | 1,264 |  |  |  | 7 |
Home equity lines of credit |  |  | 4 |  |  |  | 0 |  |  |  | 3 |  |  |  | 0 |
Total |  | $ | 29,077 |  |  | $ | 1,573 |  |  | $ | 30,171 |  |  | $ | 561 |

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