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Loans and Allowance for Credit Losses (Tables)
 6 Months Ended
Jun. 30, 2023
Receivables [Abstract]  
Outstanding loans Outstanding loans are summarized by class as follows:
Loan Type (Dollars in thousands)June 30, 2023December 31, 2022
Commercial:  
Commercial and industrial$103,490 $141,197 
Agricultural production36,283 37,007 
Total commercial139,773 178,204 
Real estate:  
Construction & other land loans77,865 109,175 
Commercial real estate - owner occupied195,348 194,663 
Commercial real estate - non-owner occupied502,814 464,809 
Farmland118,616 119,648 
Multi-family residential53,432 24,586 
1-4 family - close-ended90,064 93,510 
1-4 family - revolving28,625 30,071 
Total real estate1,066,764 1,036,462 
Consumer:47,597 40,252 
Total gross loans1,254,134 1,254,918 
Net deferred origination fees 1,524 1,386 
Loans, net of deferred origination fees1,255,658 1,256,304 
Allowance for credit losses(15,463)(10,848)
Total loans, net$1,240,195 $1,245,456 
Impaired loans Foregone interest on nonaccrual loans totaled $53,000 and $57,000 for the three and six month periods ended June 30, 2022, respectively. There was no foregone interest on nonaccrual loans for the three and six month periods ended June 30, 2023.
Allowance for credit losses
The following table shows the summary of activities for the allowance for credit losses as of and for the six months ended June 30, 2023 and 2022 by portfolio segment (in thousands):
 CommercialCommercial Real Estate1-4 Family Real EstateConsumerUnallocatedTotal
Allowance for credit losses:     
Beginning balance, January 1, 2023 prior to adoption of ASU 2016-13 (CECL)$1,814 $7,803 $607 $284 $340 $10,848 
Impact of adoption of ASU 2016-13454 1,693 1,614 489 (340)3,910 
(Credit) provision for credit losses (1)
(791)1,188 255 50 — 702 
Charge-offs(322)— — (35)— (357)
Recoveries322 — 13 25 — 360 
Ending balance, June 30, 2023$1,477 $10,684 $2,489 $813 $— $15,463 
(1) Represents credit losses for loans only. The provision for credit losses on the Consolidated Statements of Income of $290 includes a $(320) credit for held-to-maturity securities and a $(92) credit for unfunded loan commitments.
CommercialReal EstateConsumerUnallocatedTotal
Allowance for credit losses:     
Beginning balance, January 1, 2022$2,011 $6,741 $568 $280 $9,600 
(Credit) provision for credit losses(387)253 277 (143)— 
Charge-offs(17)— — (100)— (117)
Recoveries366 — 24 — 390 
Ending balance, June 30, 2022$1,973 $6,994 $769 $137 $9,873 

During the three and six month periods ended June 30, 2023, the provision for credit losses was primarily driven by weakening economic scenario forecasts in commercial real estate and increases in commercial real estate loan balances, partially offset by lower loan balances in the commercial loan segment. Management believes that the allowance for credit losses at June 30, 2023 appropriately reflected expected credit losses in the loan portfolio at that date.
Loan portfolio by internal risk rating
The following table shows the loan portfolio by class, net of deferred fees, allocated by management’s internal risk ratings for the period indicated (in thousands):
Term Loans Amortized Cost Basis by Origination Year - As of June 30, 2023
20232022202120202019PriorRevolving LoansRevolving Converted to TermTotal
Commercial and industrial
Pass/Watch$14,912 $23,156 $22,383 $5,325 $2,277 $8,354 $24,037 $215 $100,659 
Special mention— — 163 192 1,244 279 — — 1,878 
Substandard— — 23 219 — 1,097 — — 1,339 
Total$14,912 $23,156 $22,569 $5,736 $3,521 $9,730 $24,037 $215 $103,876 
Current period gross write-offs$— $— $323 $— $— $— $— $— $323 
Agricultural production
Pass/Watch$108 $453 $25 $— $251 $163 $24,208 $999 $26,207 
Special mention— — — — — — 8,940 — 8,940 
Substandard— 1,160 — — — — — — 1,160 
Total$108 $1,613 $25 $— $251 $163 $33,148 $999 $36,307 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Construction & other land loans
Pass/Watch$216 $18,852 $21,744 $10,736 $1,686 $2,834 $4,938 $— $61,006 
Special mention— — — — — — — — — 
Substandard— 948 — — 15,655 — — — 16,603 
Total$216 $19,800 $21,744 $10,736 $17,341 $2,834 $4,938 $— $77,609 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate - owner occupied
Pass/Watch$8,997 $23,344 $21,137 $28,733 $22,817 $84,534 $1,980 $— $191,542 
Special mention— — — — — 1,429 278 — 1,707 
Substandard— — — — — 2,142 — — 2,142 
Total$8,997 $23,344 $21,137 $28,733 $22,817 $88,105 $2,258 $— $195,391 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Commercial real estate - non-owner occupied
Pass/Watch$31,772 $115,665 $78,562 $41,164 $23,435 $194,047 $12,043 $— $496,688 
Special mention— 600 — — — 2,756 — — 3,356 
Substandard— — — — — 2,378 — — 2,378 
Total$31,772 $116,265 $78,562 $41,164 $23,435 $199,181 $12,043 $— $502,422 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Farmland
Pass/Watch$582 $23,725 $10,982 $29,806 $11,299 $24,091 $12,148 $1,955 $114,588 
Special mention— — — 2,213 — — — — 2,213 
Substandard— — 1,570 — — 196 — — 1,766 
Total$582 $23,725 $12,552 $32,019 $11,299 $24,287 $12,148 $1,955 $118,567 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Multi-family residential
Pass/Watch$2,997 $— $30,097 $2,397 $4,581 $13,165 $201 $— $53,438 
Special mention— — — — — — — — — 
Substandard— — — — — — — — 
Total$2,997 $— $30,097 $2,397 $4,581 $13,165 $201 $— $53,438 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 family - close-ended
Pass/Watch$— $65,276 $8,203 $2,351 $2,153 $11,636 $560 $— $90,179 
Special mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total$— $65,276 $8,203 $2,351 $2,153 $11,636 $560 $— $90,179 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
1-4 family - revolving
Pass/Watch$— $— $— $— $— $22,233 $6,619 $28,852 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Total$— $— $— $— $— $— $22,233 $6,619 $28,852 
Current period gross write-offs$— $— $— $— $— $— $— $— $— 
Consumer
Pass/Watch$14,489 $10,095 $7,790 $2,771 $2,570 $10,823 $432 $— $48,970 
Special mention— — — — — — — — — 
Substandard— — 32 — — 15 — — 47 
Total$14,489 $10,095 $7,822 $2,771 $2,570 $10,838 $432 $— $49,017 
Current period gross write-offs$7 $— $— $— $27 $— $— $— $34 
Total loans outstanding (risk rating):
Pass/Watch$74,073 $280,566 $200,923 $123,283 $71,069 $349,647 $102,780 $9,788 $1,212,129 
Special mention— 600 163 2,405 1,244 4,464 9,218 — 18,094 
Substandard— 2,108 1,625 219 15,655 5,828 — — 25,435 
Grand Total$74,073 $283,274 $202,711 $125,907 $87,968 $359,939 $111,998 $9,788 $1,255,658 
Current period total gross write-offs$7 $— $323 $— $27 $— $— $— $357 

The following table shows the loan portfolio by class, net of deferred fees, allocated by management’s internal risk ratings at December 31, 2022 (in thousands):
PassSpecial MentionSubstandardDoubtfulTotal
Commercial:
Commercial and industrial$131,300 $8,707 $1,655 $— $141,662 
Agricultural production24,926 6,713 5,399 — 37,038 
Real Estate:
Construction & other land loans93,817 — 15,024 — 108,841 
Commercial real estate - owner occupied189,344 3,283 2,169 — 194,796 
Commercial real estate - non-owner occupied458,746 3,440 2,412 — 464,598 
Farmland109,898 8,879 824 — 119,601 
Multi-family residential24,636 — — — 24,636 
1-4 family - close-ended93,644 — — — 93,644 
1-4 family - revolving30,031 — 266 — 30,297 
Consumer:41,155 2 34 — 41,191 
Total$1,197,497 $31,024 $27,783 $— $1,256,304 
Loan portfolio by time past due
The following table shows an aging analysis of the loan portfolio by class at June 30, 2023 (in thousands):
 30-59 Days
Past Due		60-89
Days Past
Due
Greater
Than
 89 Days
Past Due
Total Past
Due		CurrentTotal
Loans		Loans Past Due > 89 Days, Still AccruingNon-accrual
Commercial:        
Commercial and industrial$— $237 $— $237 $103,253 $103,490 $— $— 
Agricultural production— — — — 36,283 36,283 — — 
Real estate:—    
Construction & other land loans— — — — 77,865 77,865 — — 
Commercial real estate - owner occupied— — — — 195,348 195,348 — — 
Commercial real estate - non-owner occupied— — — — 502,814 502,814 — — 
Farmland— — — — 118,616 118,616 — — 
Multi-family residential— — — — 53,432 53,432 — — 
1-4 family - close-ended— — — — 90,064 90,064 — — 
1-4 family - revolving— — — — 28,625 28,625 — — 
Consumer:17 — — 17 47,580 47,597 — — 
Deferred fees— — — — $1,524 1,524 — — 
Total$17 $237 $— $254 $1,255,404 $1,255,658 $— $— 
The following table shows an aging analysis of the loan portfolio by class at December 31, 2022 (in thousands):
 30-59 Days
Past Due		60-89
Days Past
Due		Greater
Than
 89 Days
Past Due		Total Past
Due		CurrentTotal
Loans		Loans Past Due > 89 Days, Still AccruingNon-
accrual
Commercial:        
Commercial and industrial$440 $— $— $440 $140,757 $141,197 $— $— 
Agricultural production— — — — 37,007 37,007 — — 
Real estate:—       
Construction & other land loans— — — — 109,175 109,175 — — 
Commercial real estate - owner occupied250 — — 250 194,413 194,663 — — 
Commercial real estate - non-owner occupied4,507 — — 4,507 460,302 464,809 — — 
Farmland— — — — 119,648 119,648 — — 
Multi-family residential— — — — 24,586 24,586 — — 
1-4 family - close-ended— — — — 93,510 93,510 — — 
1-4 family - revolving465 — — 465 29,606 30,071 — — 
Consumer233 — — 233 40,019 40,252 — — 
Deferred fees— — — — 1,386 1,386 — — 
Total$5,895 $— $— $5,895 $1,250,409 $1,256,304 $— $—