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Loans and Allowance for Credit Losses | 12 Months Ended
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Dec. 31, 2022
Receivables [Abstract] |
Loans and Allowance for Credit Losses | LOANS AND ALLOWANCE FOR CREDIT LOSSES Outstanding loans are summarized as follows (in thousands):
Loan Type |  | December 31, 2022 |  | % of Total loans |  | December 31, 2021 |  | % of Total loans
Commercial: |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 141,197 |  |  | 11.2 | % |  | $ | 136,847 |  |  | 13.2 | %
Agricultural production |  | 39,007 |  |  | 3.1 | % |  | 40,860 |  |  | 3.9 | %
Total commercial |  | 180,204 |  |  | 14.3 | % |  | 177,707 |  |  | 17.1 | %
Real estate: |  |  |  |  |  |  |  |
Owner occupied |  | 194,663 |  |  | 15.5 | % |  | 212,234 |  |  | 20.4 | %
Real estate construction and other land loans |  | 109,175 |  |  | 8.7 | % |  | 61,586 |  |  | 5.9 | %
Commercial real estate |  | 464,809 |  |  | 37.1 | % |  | 369,529 |  |  | 35.6 | %
Agricultural real estate |  | 117,648 |  |  | 9.4 | % |  | 98,481 |  |  | 9.5 | %
Other real estate |  | 24,586 |  |  | 2.0 | % |  | 26,084 |  |  | 2.5 | %
|  | 910,881 |  |  | 72.7 | % |  | 767,914 |  |  | 73.9 | %
Consumer: |  |  |  |  |  |  |  |
Equity loans and lines of credit |  | 123,581 |  |  | 9.8 | % |  | 55,620 |  |  | 5.4 | %
Consumer and installment |  | 40,252 |  |  | 3.2 | % |  | 36,999 |  |  | 3.6 | %
Total consumer |  | 163,833 |  |  | 13.0 | % |  | 92,619 |  |  | 9.0 | %
Net deferred origination costs (fees) |  | 1,386 |  |  |  |  | 871 |  |  |
Total gross loans |  | 1,256,304 |  |  | 100.0 | % |  | 1,039,111 |  |  | 100.0 | %
Allowance for credit losses |  | (10,848) |  |  |  |  | (9,600) |  |  |
Total loans |  | $ | 1,245,456 |  |  |  |  | $ | 1,029,511 |  |  |
At December 31, 2022 and 2021, loans originated under Small Business Administration (SBA) programs totaling $19,947,000 and $23,024,000, respectively, were included in the real estate and commercial categories. In addition, the Company participated in the SBA Paycheck Protection Program (PPP) to help provide loans to our business customers to provide them with additional working capital. At December 31, 2022 and 2021, PPP loans totaling $333,000 and $18,553,000, respectively, were outstanding and included in the commercial and industrial category above. Approximately $665,612,000 in loans were pledged under a blanket lien as collateral to the FHLB for the Bank’s remaining borrowing capacity of $319,309,000 as of December 31, 2022. The Bank’s credit limit varies according to the amount and composition of the investment and loan portfolios pledged as collateral. Salaries and employee benefits totaling $1,745,000, $1,890,000, and $2,782,000 have been deferred as loan origination costs for the years ended December 31, 2022, 2021, and 2020, respectively. Allowance for Credit Losses The allowance for credit losses (the “allowance”) is a valuation allowance for probable incurred credit losses in the Company’s loan portfolio. The allowance is established through a provision for credit losses which is charged to expense. Additions to the allowance are expected to maintain the adequacy of the total allowance after credit losses and loan growth. Credit exposures determined to be uncollectible are charged against the allowance. Cash received on previously charged-off credits is recorded as a recovery to the allowance. The overall allowance consists of two primary components, specific reserves related to impaired loans and general reserves for probable incurred losses related to loans that are not impaired. For all portfolio segments, the determination of the general reserve for loans that are not impaired is based on estimates made by management, including but not limited to, consideration of historical losses by portfolio segment (and in certain cases peer loss data) over the most recent 56 quarters, and qualitative factors including economic trends in the Company’s service areas, industry experience and trends, industry and geographic concentrations, estimated collateral values, the Company’s underwriting policies, the character of the loan portfolio, and probable losses inherent in the portfolio taken as a whole. Changes in the allowance for credit losses were as follows (in thousands):
|  | Years Ended December 31,
|  | 2022 |  | 2021 |  | 2020
Balance, beginning of year |  | $ | 9,600 |  |  | $ | 12,915 |  |  | $ | 9,130 |
Provision (reversal) charged to operations |  | 1,000 |  |  | (4,300) |  |  | 3,275 |
Losses charged to allowance |  | (178) |  |  | (267) |  |  | (229) |
Recoveries |  | 426 |  |  | 1,252 |  |  | 739 |
Balance, end of year |  | $ | 10,848 |  |  | $ | 9,600 |  |  | $ | 12,915 |
The following table shows the summary of activities for the allowance for credit losses as of and for the years ended December 31, 2022, 2021, and 2020 by portfolio segment (in thousands):
|  | Commercial |  | Real Estate |  | Consumer |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2022 |  | $ | 2,011 |  |  | $ | 6,741 |  |  | $ | 568 |  |  | $ | 280 |  |  | $ | 9,600 |
Provision (reversal) charged to operations |  | (531) |  |  | 1,062 |  |  | 409 |  |  | 60 |  |  | 1,000 |
Losses charged to allowance |  | (27) |  |  | — |  |  | (151) |  |  | — |  |  | (178) |
Recoveries |  | 367 |  |  | — |  |  | 59 |  |  | — |  |  | 426 |
Ending balance, December 31, 2022 |  | $ | 1,820 |  |  | $ | 7,803 |  |  | $ | 885 |  |  | $ | 340 |  |  | $ | 10,848 |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2021 |  | $ | 2,019 |  |  | $ | 9,174 |  |  | $ | 1,091 |  |  | $ | 631 |  |  | $ | 12,915 |
Reversal of provision charged to operations |  | (663) |  |  | (2,752) |  |  | (534) |  |  | (351) |  |  | (4,300) |
Losses charged to allowance |  | (46) |  |  | — |  |  | (221) |  |  | — |  |  | (267) |
Recoveries |  | 701 |  |  | 319 |  |  | 232 |  |  | — |  |  | 1,252 |
Ending balance, December 31, 2021 |  | $ | 2,011 |  |  | $ | 6,741 |  |  | $ | 568 |  |  | $ | 280 |  |  | $ | 9,600 |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Beginning balance, January 1, 2020 |  | $ | 1,428 |  |  | $ | 6,769 |  |  | $ | 897 |  |  | $ | 36 |  |  | $ | 9,130 |
Provision charged to operations |  | 100 |  |  | 2,405 |  |  | 175 |  |  | 595 |  |  | 3,275 |
Losses charged to allowance |  | (121) |  |  | — |  |  | (108) |  |  | — |  |  | (229) |
Recoveries |  | 612 |  |  | — |  |  | 127 |  |  | — |  |  | 739 |
Ending balance, December 31, 2020 |  | $ | 2,019 |  |  | $ | 9,174 |  |  | $ | 1,091 |  |  | $ | 631 |  |  | $ | 12,915 |
The following is a summary of the allowance for credit losses by impairment methodology and portfolio segment as of December 31, 2022 and December 31, 2021 (in thousands):
|  | Commercial |  | Real Estate |  | Consumer |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |
Ending balance, December 31, 2022 |  | $ | 1,820 |  |  | $ | 7,803 |  |  | $ | 885 |  |  | $ | 340 |  |  | $ | 10,848 |
Ending balance: individually evaluated for impairment |  | $ | 309 |  |  | $ | 5 |  |  | $ | — |  |  | $ | — |  |  | $ | 314 |
Ending balance: collectively evaluated for impairment |  | $ | 1,511 |  |  | $ | 7,798 |  |  | $ | 885 |  |  | $ | 340 |  |  | $ | 10,534 |
Ending balance, December 31, 2021 |  | $ | 2,011 |  |  | $ | 6,741 |  |  | $ | 568 |  |  | $ | 280 |  |  | $ | 9,600 |
Ending balance: individually evaluated for impairment |  | $ | 607 |  |  | $ | 38 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 649 |
Ending balance: collectively evaluated for impairment |  | $ | 1,404 |  |  | $ | 6,703 |  |  | $ | 564 |  |  | $ | 280 |  |  | $ | 8,951 |
The following table shows the ending balances of loans as of December 31, 2022 and December 31, 2021 by portfolio segment and by impairment methodology (in thousands):
|  | Commercial |  | Real Estate |  | Consumer |  | Total
Loans: |  |  |  |  |  |  |  |
Ending balance, December 31, 2022 |  | $ | 180,204 |  |  | $ | 910,881 |  |  | $ | 163,833 |  |  | $ | 1,254,918 |
Ending balance: individually evaluated for impairment |  | $ | 1,240 |  |  | $ | 139 |  |  | $ | 993 |  |  | $ | 2,372 |
Ending balance: collectively evaluated for impairment |  | $ | 178,964 |  |  | $ | 910,742 |  |  | $ | 162,840 |  |  | $ | 1,252,546 |
Loans: |  |  |  |  |  |  |  |
Ending balance, December 31, 2021 |  | $ | 177,707 |  |  | $ | 767,914 |  |  | $ | 92,619 |  |  | $ | 1,038,240 |
Ending balance: individually evaluated for impairment |  | $ | 7,086 |  |  | $ | 450 |  |  | $ | 1,050 |  |  | $ | 8,586 |
Ending balance: collectively evaluated for impairment |  | $ | 170,621 |  |  | $ | 767,464 |  |  | $ | 91,569 |  |  | $ | 1,029,654 |
The following table shows the loan portfolio by class allocated by management’s internal risk ratings at December 31, 2022 (in thousands):
|  | Pass |  | Special Mention |  | Substandard |  | Doubtful |  | Total
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 130,835 |  |  | $ | 8,706 |  |  | $ | 1,656 |  |  | $ | — |  |  | $ | 141,197 |
Agricultural production |  | 26,894 |  |  | 6,714 |  |  | 5,399 |  |  | — |  |  | 39,007 |
Real Estate: |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 189,211 |  |  | 3,282 |  |  | 2,170 |  |  | — |  |  | 194,663 |
Real estate construction and other land loans |  | 94,151 |  |  | — |  |  | 15,024 |  |  | — |  |  | 109,175 |
Commercial real estate |  | 458,957 |  |  | 3,440 |  |  | 2,412 |  |  | — |  |  | 464,809 |
Agricultural real estate |  | 107,945 |  |  | 8,879 |  |  | 824 |  |  | — |  |  | 117,648 |
Other real estate |  | 24,586 |  |  | — |  |  | — |  |  | — |  |  | 24,586 |
Consumer: |  |  |  |  |  |  |  |  |  |
Equity loans and lines of credit |  | 123,315 |  |  | — |  |  | 266 |  |  | — |  |  | 123,581 |
Consumer and installment |  | 40,216 |  |  | 2 |  |  | 34 |  |  | — |  |  | 40,252 |
Total |  | $ | 1,196,110 |  |  | $ | 31,023 |  |  | $ | 27,785 |  |  | $ | — |  |  | $ | 1,254,918 |
The following table shows the loan portfolio by class allocated by management’s internally assigned risk grade ratings at December 31, 2021 (in thousands):
|  | Pass |  | Special Mention |  | Substandard |  | Doubtful |  | Total
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 125,537 |  |  | $ | 8,724 |  |  | $ | 2,586 |  |  | $ | — |  |  | $ | 136,847 |
Agricultural production |  | 37,179 |  |  | 1,325 |  |  | 2,356 |  |  | — |  |  | 40,860 |
Real Estate: |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 205,092 |  |  | 3,582 |  |  | 3,560 |  |  | — |  |  | 212,234 |
Real estate construction and other land loans |  | 54,066 |  |  | 7,520 |  |  | — |  |  | — |  |  | 61,586 |
Commercial real estate |  | 351,395 |  |  | 18,134 |  |  | — |  |  | — |  |  | 369,529 |
Agricultural real estate |  | 96,949 |  |  | 1,532 |  |  | — |  |  | — |  |  | 98,481 |
Other real estate |  | 26,084 |  |  | — |  |  | — |  |  | — |  |  | 26,084 |
Consumer: |  |  |  |  |  |  |  |  |  |
Equity loans and lines of credit |  | 55,611 |  |  | 9 |  |  | — |  |  | — |  |  | 55,620 |
Consumer and installment |  | 36,942 |  |  | 19 |  |  | 38 |  |  | — |  |  | 36,999 |
Total |  | $ | 988,855 |  |  | $ | 40,845 |  |  | $ | 8,540 |  |  | $ | — |  |  | $ | 1,038,240 |
The following table shows an aging analysis of the loan portfolio by class and the time past due at December 31, 2022 (in thousands):
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Greater Than 90 Days Past Due |  | Total Past Due |  | Current |  | Total Loans |  | Recorded Investment > 90 Days Accruing |  | Non-accrual
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 392 |  |  | $ | — |  |  | $ | — |  |  | $ | 392 |  |  | $ | 140,805 |  |  | $ | 141,197 |  |  | $ | — |  |  | $ | — |
Agricultural production |  | — |  |  | — |  |  | — |  |  | — |  |  | 39,007 |  |  | 39,007 |  |  | — |  |  | — |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 249 |  |  | — |  |  | — |  |  | 249 |  |  | 194,414 |  |  | 194,663 |  |  | — |  |  | — |
Real estate construction and other land loans |  | — |  |  | — |  |  | — |  |  | — |  |  | 109,175 |  |  | 109,175 |  |  | — |  |  | — |
Commercial real estate |  | 4,507 |  |  | — |  |  | — |  |  | 4,507 |  |  | 460,302 |  |  | 464,809 |  |  | — |  |  | — |
Agricultural real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 117,648 |  |  | 117,648 |  |  | — |  |  | — |
Other real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 24,586 |  |  | 24,586 |  |  | — |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Equity loans and lines of credit |  | 465 |  |  | — |  |  | — |  |  | 465 |  |  | 123,116 |  |  | 123,581 |  |  | — |  |  | — |
Consumer and installment |  | 237 |  |  | — |  |  | — |  |  | 237 |  |  | 40,015 |  |  | 40,252 |  |  | — |  |  | — |
Total |  | $ | 5,850 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,850 |  |  | $ | 1,249,068 |  |  | $ | 1,254,918 |  |  | $ | — |  |  | $ | — |
The following table shows an aging analysis of the loan portfolio by class and the time past due at December 31, 2021 (in thousands):
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Greater Than 90 Days Past Due |  | Total Past Due |  | Current |  | Total Loans |  | Recorded Investment > 90 Days Accruing |  | Non- accrual
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1 |  |  | $ | — |  |  | $ | — |  |  | $ | 1 |  |  | $ | 136,846 |  |  | $ | 136,847 |  |  | $ | — |  |  | $ | 312 |
Agricultural production |  | — |  |  | — |  |  | — |  |  | — |  |  | 40,860 |  |  | 40,860 |  |  | — |  |  | 634 |
Real estate: |  | — |  |  |  |  |  |  |  |  |  |  | — |  |  |  |  |
Owner occupied |  | — |  |  | — |  |  | — |  |  | — |  |  | 212,234 |  |  | 212,234 |  |  | — |  |  | — |
Real estate construction and other land loans |  | — |  |  | — |  |  | — |  |  | — |  |  | 61,586 |  |  | 61,586 |  |  | — |  |  | — |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 369,529 |  |  | 369,529 |  |  | — |  |  | — |
Agricultural real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 98,481 |  |  | 98,481 |  |  | — |  |  | — |
Other real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 26,084 |  |  | 26,084 |  |  | — |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  | — |  |  |  |  |
Equity loans and lines of credit |  | — |  |  | — |  |  | — |  |  | — |  |  | 55,620 |  |  | 55,620 |  |  | — |  |  | — |
Consumer and installment |  | 79 |  |  | — |  |  | — |  |  | 79 |  |  | 36,920 |  |  | 36,999 |  |  | — |  |  | — |
Total |  | $ | 80 |  |  | $ | — |  |  | $ | — |  |  | $ | 80 |  |  | $ | 1,038,160 |  |  | $ | 1,038,240 |  |  | $ | — |  |  | $ | 946 |
The following table shows information related to impaired loans by class at December 31, 2022 (in thousands):
|  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With no related allowance recorded: |  |  |  |  |  |
Consumer: |  |  |  |  |  |
Equity loans and lines of credit |  | $ | 993 |  |  | $ | 1,007 |  |  | $ | — |
Total with no related allowance recorded |  | 993 |  |  | 1,007 |  |  | — |
With an allowance recorded: |  |  |  |  |  |
Commercial: |  |  |  |  |  |
Commercial and industrial |  | 1,240 |  |  | 1,240 |  |  | 309 |
Real estate: |  |  |  |  |  |
Commercial real estate |  | 126 |  |  | 126 |  |  | 2 |
Agricultural real estate |  | 13 |  |  | 13 |  |  | 3 |
Total real estate |  | 139 |  |  | 139 |  |  | 5 |
Total with an allowance recorded |  | 1,379 |  |  | 1,379 |  |  | 314 |
Total |  | $ | 2,372 |  |  | $ | 2,386 |  |  | $ | 314 |
The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality. The following table shows information related to impaired loans by class at December 31, 2021 (in thousands):
|  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With no related allowance recorded: |  |  |  |  |  |
Consumer: |  |  |  |  |  |
Equity loans and lines of credit |  | $ | 136 |  |  | $ | 172 |  |  | $ | — |
Total with no related allowance recorded |  | 136 |  |  | 172 |  |  | — |
With an allowance recorded: |  |  |  |  |  |
Commercial: |  |  |  |  |  |
Commercial and industrial |  | 6,452 |  |  | 6,491 |  |  | 544 |
Agricultural land and production |  | 634 |  |  | 714 |  |  | 63 |
Total commercial |  | 7,086 |  |  | 7,205 |  |  | 607 |
Real estate: |  |  |  |  |  |
Real estate construction and other land loans |  | 292 |  |  | 292 |  |  | 30 |
Commercial real estate |  | 137 |  |  | 138 |  |  | 3 |
Agricultural real estate |  | 21 |  |  | 21 |  |  | 5 |
Total real estate |  | 450 |  |  | 451 |  |  | 38 |
Consumer: |  |  |  |  |  |
Equity loans and lines of credit |  | 914 |  |  | 914 |  |  | 4 |
Total consumer |  | 914 |  |  | 914 |  |  | 4 |
Total with an allowance recorded |  | 8,450 |  |  | 8,570 |  |  | 649 |
Total |  | $ | 8,586 |  |  | $ | 8,742 |  |  | $ | 649 |
The recorded investment in loans excludes accrued interest receivable and net loan origination fees, due to immateriality. The following presents by class, information related to the average recorded investment and interest income recognized on impaired loans for the years ended December 31, 2022, 2021, and 2020 (in thousands):
|  | Year Ended December 31, 2022 |  | Year Ended December 31, 2021 |  | Year Ended December 31, 2020
|  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 81 |  |  | $ | — |  |  | $ | 43 |  |  | $ | — |  |  | $ | 1,322 |  |  | $ | — |
Agricultural production |  | 25 |  |  | — |  |  | — |  |  | — |  |  | 104 |  |  | — |
Total commercial |  | 106 |  |  | — |  |  | 43 |  |  | — |  |  | 1,426 |  |  | — |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | — |  |  | — |  |  | 55 |  |  | — |  |  | 394 |  |  | — |
Real estate construction and other land loans |  | — |  |  | — |  |  | 156 |  |  | — |  |  | 8 |  |  | — |
Commercial real estate |  | — |  |  | — |  |  | 380 |  |  | — |  |  | 779 |  |  | — |
Agricultural real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 146 |  |  | — |
Total real estate |  | — |  |  | — |  |  | 591 |  |  | — |  |  | 1,327 |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Equity loans and lines of credit |  | 750 |  |  | 71 |  |  | 140 |  |  | 12 |  |  | 216 |  |  | 12 |
Total with no related allowance recorded |  | 856 |  |  | 71 |  |  | 774 |  |  | 12 |  |  | 2,969 |  |  | 12 |
|  | — |  |  |  |  |  |  |  |  |  |  |
With an allowance recorded: |  | — |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 2,296 |  |  | 129 |  |  | 6,327 |  |  | 365 |  |  | 6,139 |  |  | 582 |
Agricultural production |  | 49 |  |  | — |  |  | 908 |  |  | — |  |  | 430 |  |  | — |
Total commercial |  | 2,345 |  |  | 129 |  |  | 7,235 |  |  | 365 |  |  | 6,569 |  |  | 582 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |
Real estate construction and other land loans |  | 88 |  |  | — |  |  | 673 |  |  | 21 |  |  | 586 |  |  | — |
Commercial real estate |  | 132 |  |  | 8 |  |  | 142 |  |  | 9 |  |  | 206 |  |  | 11 |
Agricultural real estate |  | 19 |  |  | 2 |  |  | 27 |  |  | 1 |  |  | 27 |  |  | 2 |
Total real estate |  | 239 |  |  | 10 |  |  | 842 |  |  | 31 |  |  | 819 |  |  | 13 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Equity loans and lines of credit |  | 280 |  |  | — |  |  | 925 |  |  | 54 |  |  | 1,001 |  |  | 55 |
Consumer and installment |  | — |  |  | — |  |  | 14 |  |  | — |  |  | 64 |  |  | — |
Total consumer |  | 280 |  |  | — |  |  | 939 |  |  | 54 |  |  | 1,065 |  |  | 55 |
Total with an allowance recorded |  | 2,864 |  |  | 139 |  |  | 9,016 |  |  | 450 |  |  | 8,453 |  |  | 650 |
Total |  | $ | 3,720 |  |  | $ | 210 |  |  | $ | 9,790 |  |  | $ | 462 |  |  | $ | 11,422 |  |  | $ | 662 |
Foregone interest on nonaccrual loans totaled $132,000, $99,000, and $177,000 for the years ended December 31, 2022, 2021, and 2020, respectively. Interest income recognized on cash basis during the years presented above was not considered significant for financial reporting purposes. Troubled Debt Restructurings: As of December 31, 2022 and 2021, the Company has a recorded investment in troubled debt restructurings (“TDR”) of $2,372,000 and, $7,640,000, respectively. The Company has allocated $314,000 and $538,000 of specific reserves for those loans at December 31, 2022 and 2021, respectively. The Company has committed to lend no additional amounts as of December 31, 2022 to customers with outstanding loans that are classified as troubled debt restructurings. For the years ended December 31, 2021, and 2020 the terms of certain loans were modified as TDRs. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. During the same periods, there were no troubled debt restructurings in which the amount of principa l or accrued interest owed from the borrower were forgiven. Section 4013 of the CARES Act and the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus (Revised)” provided banks an option to elect to not account for certain loan modifications related to COVID-19 as TDRs as long as the borrowers were not more than 30 days past due as of December 31, 2019 or at the time of modification program implementation, respectively, and the borrowers meet other applicable criteria. In accordance with such guidance, during 2020 and throughout 2021 the Company offered short-term modifications in response to COVID-19 to borrowers who were current and otherwise not past due. As of December 31, 2022, there were no such loans remaining on deferral. During the year ended December 31, 2022, no loans were modified as troubled debt restructuring. The following table presents loans by class modified as TDRs that occurred during the year ended December 31, 2021 (dollars in thousands):
Troubled Debt Restructurings: |  | Number of Loans |  | Pre-Modification Outstanding Recorded Investment (1) |  | Principal Modification |  | Post Modification Outstanding Recorded Investment (2) |  | Outstanding Recorded Investment
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  | 1 |  |  | $ | 2,489 |  |  | $ | — |  |  | $ | 2,489 |  |  | $ | 1,989 |
Real Estate: |  |  |  |  |  |  |  |  |  |
Real estate construction and other land loans |  | 1 |  |  | 333 |  |  | — |  |  | 333 |  |  | 292 |
Total |  | 2 |  |  | $ | 2,822 |  |  | $ | — |  |  | $ | 2,822 |  |  | $ | 2,281 |
(1)Amounts represent the recorded investment in loans before recognizing effects of the TDR, if any. (2)Balance outstanding after principal modification, if any borrower reduction to recorded investment. The following table presents loans by class modified as TDRs that occurred during the year ended December 31, 2020 (dollars in thousands):
Troubled Debt Restructurings: |  | Number of Loans |  | Pre-Modification Outstanding Recorded Investment (1) |  | Principal Modification |  | Post Modification Outstanding Recorded Investment (2) |  | Outstanding Recorded Investment
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial and Industrial |  | 1 |  |  | $ | 12,925 |  |  | $ | — |  |  | $ | 12,925 |  |  | $ | 6,650 |
(1)Amounts represent the recorded investment in loans before recognizing effects of the TDR, if any. (2)Balance outstanding after principal modification, if any borrower reduction to recorded investment. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no defaults on troubled debt restructurings within 12 months following the modification during the years ended December 31, 2022, 2021, and 2020.

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