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Allowance for Credit Losses | 6 Months Ended
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Jun. 30, 2023
Text Block [Abstract] |
Allowance for Credit Losses | (5) Allowance for Credit Losses As previously mentioned in Note 2 Significant Accounting Policies, the Company’s January 1, 2023, adoption of ASU No. 2016-13, “Measurement of Credit Losses on Financial Instruments,” resulted in a significant change to our methodology for estimating the ACL since December 31, 2022. As a result of this adoption, the Company recorded a $5,193 in crease to the ACL as a cumulative-effect adjustment on January 1, 2023. The following tables present, by portfolio segment, the changes in the ACL for the three- and six-months ended June 30, 2023 and 2022. Allowance for credit losses:
For the three months ended June 30, 2023 |  | Beginning balance |  |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Ending Balance |
Commercial & Agriculture |  | $ | 3,316 |  |  | $ | — |  |  | $ | 42 |  |  | $ | 2,182 |  |  | $ | 5,540 |
Commercial Real Estate: |  |  |  |  |  | — |  |  |  | — |  |  |  |  |  |  |
Owner Occupied |  |  | 5,733 |  |  |  | — |  |  |  | — |  |  |  | (202 | ) |  |  | 5,531 |
Non-Owner Occupied |  |  | 11,760 |  |  |  | — |  |  |  | 8 |  |  |  | (122 | ) |  |  | 11,646 |
Residential Real Estate |  |  | 5,934 |  |  |  | (1 | ) |  |  | 32 |  |  |  | 550 |  |  |  | 6,515 |
Real Estate Construction |  |  | 3,920 |  |  |  | — |  |  |  | 5 |  |  |  | (478 | ) |  |  | 3,447 |
Farm Real Estate |  |  | 269 |  |  |  | — |  |  |  | — |  |  |  | (26 | ) |  |  | 243 |
Lease Financing Receivables |  |  | 2,907 |  |  |  | — |  |  |  | — |  |  |  | (960 | ) |  |  | 1,947 |
Consumer and Other |  |  | 354 |  |  |  | (13 | ) |  |  | 19 |  |  |  | (88 | ) |  |  | 272 |
Unallocated |  |  | 3 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 8 |
Total |  | $ | 34,196 |  |  | $ | (14 | ) |  | $ | 106 |  |  | $ | 861 |  |  | $ | 35,149 |
1 Day 1 impact of $1,668, of adopting ASC 326-PCD loans was netted by changes in estimates of $771. |
For the three months ended June 30, 2023, the Company provided $861 to the allowance for credit losses, as compared to a provision of $400 for the three months ended June 30, 2022. The increase in the reserves was principally related to loan growth during the quarter. Allowance for credit losses:
For the three months ended June 30, 2022 |  | Beginning balance |  |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Ending Balance |
Commercial & Agriculture |  | $ | 2,584 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 203 |  |  | $ | 2,790 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 4,594 |  |  |  | — |  |  |  | 27 |  |  |  | 108 |  |  |  | 4,729 |
Non-Owner Occupied |  |  | 14,577 |  |  |  | — |  |  |  | 4 |  |  |  | 130 |  |  |  | 14,711 |
Residential Real Estate |  |  | 2,612 |  |  |  | (57 | ) |  |  | 15 |  |  |  | 289 |  |  |  | 2,859 |
Real Estate Construction |  |  | 1,863 |  |  |  | — |  |  |  | — |  |  |  | 106 |  |  |  | 1,969 |
Farm Real Estate |  |  | 249 |  |  |  | — |  |  |  | 2 |  |  |  | (15 | ) |  |  | 236 |
Consumer and Other |  |  | 136 |  |  |  | (3 | ) |  |  | 11 |  |  |  | (14 | ) |  |  | 130 |
Unallocated |  |  | 418 |  |  |  | — |  |  |  | — |  |  |  | (407 | ) |  |  | 11 |
Total |  | $ | 27,033 |  |  | $ | (60 | ) |  | $ | 62 |  |  | $ | 400 |  |  | $ | 27,435 |
For the three months ended June 30, 2022, the Company provided $400 to the allowance for credit losses. The provision in the second quarter of 2022 reflected the Company’s strong loan growth during the quarter. Our credit quality metrics remained stable despite the ongoing headwinds of the challenging international, national, regional and local economic conditions. While COVID-19 vaccinations and improved treatments had created a level of optimism, there remained caution due to the lingering concerns over potential infection spikes. We remained cautious given the level of classified loans in the portfolio, particularly loans to borrowers in the hotel industry as well as the challenges businesses face in today’s environment. As of June 30, 2022 economic impacts related to the COVID-19 pandemic had improved somewhat, but continued concerns lingered due to the disruption of supply chains, additional employee costs, higher challenges throughout our footprint, rising inflationary pressures and the prospects of recession. During the three months ended June 30, 2022, the allowance for Commercial & Agriculture loans increased due to an increase in general reserves required for this type as a result of an increase in loss rates, partially offset by a decrease in Commercial & Agriculture loan balances during the quarter mainly due to the forgiveness or payoff of PPP loans. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied, Commercial Real Estate - Non-Owner Occupied, Residential Real Estate and Real Estate Construction loans increased due to an increase in general reserves required for this type as a result of increased loan balances. The result was represented as an increase in the provision. Management felt the unallocated amount was appropriate and within the relevant range for the allowance that was reflective of the risk in the portfolio at June 30, 2022. Allowance for credit losses:
For the six months ended June 30, 2023 |  | Beginning balance |  |  | CECL Adoption Day 1 Impact |  |  | Impact of Adopting ASC 326 - PCD Loans 1 |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Ending Balance |
Commercial & Agriculture |  | $ | 3,011 |  |  | $ | 429 |  |  | $ | — |  | $ | (140 | ) |  | $ | 48 |  |  | $ | 2,192 |  |  | $ | 5,540 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 4,565 |  |  |  | 1,075 |  |  |  | 19 |  |  | — |  |  |  | — |  |  |  | (128 | ) |  |  | 5,531 |
Non-Owner Occupied |  |  | 14,138 |  |  |  | (2,847 | ) |  |  | — |  |  | — |  |  |  | 15 |  |  |  | 340 |  |  |  | 11,646 |
Residential Real Estate |  |  | 3,145 |  |  |  | 2,762 |  |  |  | 166 |  |  | (11 | ) |  |  | 54 |  |  |  | 399 |  |  |  | 6,515 |
Real Estate Construction |  |  | 2,293 |  |  |  | 1,502 |  |  |  | — |  |  | — |  |  |  | 9 |  |  |  | (357 | ) |  |  | 3,447 |
Farm Real Estate |  |  | 291 |  |  |  | (28 | ) |  |  | — |  |  | — |  |  |  | — |  |  |  | (20 | ) |  |  | 243 |
Lease Financing Receivables |  |  | 429 |  |  |  | 1,743 |  |  |  | 635 |  |  | — |  |  |  | — |  |  |  | (860 | ) |  |  | 1,947 |
Consumer and Other |  |  | 98 |  |  |  | 201 |  |  |  | 77 |  |  | (38 | ) |  |  | 27 |  |  |  | (93 | ) |  |  | 272 |
Unallocated |  |  | 541 |  |  |  | (541 | ) |  |  | — |  |  | — |  |  |  | — |  |  |  | 8 |  |  |  | 8 |
Total |  | $ | 28,511 |  |  | $ | 4,296 |  |  | $ | 897 |  | $ | (189 | ) |  | $ | 153 |  |  | $ | 1,481 |  |  | $ | 35,149 |
For the six months ended June 30, 2023, the Company provided $1,481 to the allowance for credit losses, as compared to a provision of $700 for the six months ended June 30, 2022. Upon adoption of CECL on January 1, 2023, we recorded an increase in the allowance for credit losses of $5,193 in the first quarter of 2023. The increase in the reserves was principally related to loan growth during the quarter. Allowance for credit losses:
For the six months ended June 30, 2022 |  | Beginning balance |  |  | Charge-offs |  |  | Recoveries |  |  | Provision |  |  | Ending Balance |
Commercial & Agriculture |  | $ | 2,600 |  |  | $ | — |  |  | $ | 4 |  |  | $ | 186 |  |  | $ | 2,790 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 4,464 |  |  |  | — |  |  |  | 27 |  |  |  | 238 |  |  |  | 4,729 |
Non-Owner Occupied |  |  | 13,860 |  |  |  | — |  |  |  | 52 |  |  |  | 799 |  |  |  | 14,711 |
Residential Real Estate |  |  | 2,597 |  |  |  | (58 | ) |  |  | 76 |  |  |  | 244 |  |  |  | 2,859 |
Real Estate Construction |  |  | 1,810 |  |  |  | — |  |  |  | — |  |  |  | 159 |  |  |  | 1,969 |
Farm Real Estate |  |  | 287 |  |  |  | — |  |  |  | 4 |  |  |  | (55 | ) |  |  | 236 |
Consumer and Other |  |  | 176 |  |  |  | (32 | ) |  |  | 21 |  |  |  | (35 | ) |  |  | 130 |
Unallocated |  |  | 847 |  |  |  | — |  |  |  | — |  |  |  | (836 | ) |  |  | 11 |
Total |  | $ | 26,641 |  |  | $ | (90 | ) |  | $ | 184 |  |  | $ | 700 |  |  | $ | 27,435 |
For the six months ended June 30, 2022, the Company provided $700 to the allowance for loan losses. During the six months ended June 30, 2022, the allowance for Commercial & Agriculture loans increased due to an increase in general reserves required for this type as a result of an increase in loss rates, partially offset by a decrease in Commercial & Agriculture loan balances during the first six months of the year mainly due to the forgiveness or payoff of PPP loans. The result was represented as an increase in the provision. The allowance for Commercial Real Estate – Owner Occupied, Commercial Real Estate - Non-Owner Occupied, Residential Real Estate and Real Estate Construction loans increased due to an increase in general reserves required for this type as a result of increased loan balances. The result was represented as an increase in the provision. The allowance for Consumer and Other loans decreased due to a decrease in loan balances. This was represented as a decrease in the provision. Management felt that the unallocated amount was appropriate and within the relevant range for the allowance that was reflective of the risk in the portfolio at June 30, 2022. The following tables present, by portfolio segment, the allocation of the allowance for credit losses and related loan balances as of December 31, 2022.
December 31, 2022 |  | Loans acquired with credit deterioration |  |  | Loans individually evaluated for impairment |  |  | Loans collectively evaluated for impairment |  |  | Total |
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |
Commercial & Agriculture |  | $ | 6 |  |  | $ | — |  |  | $ | 3,005 |  |  | $ | 3,011 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 3 |  |  |  | 6 |  |  |  | 4,556 |  |  |  | 4,565 |
Non-Owner Occupied |  |  | — |  |  |  | — |  |  |  | 14,138 |  |  |  | 14,138 |
Residential Real Estate |  |  | — |  |  |  | 1 |  |  |  | 3,144 |  |  |  | 3,145 |
Real Estate Construction |  |  | — |  |  |  | — |  |  |  | 2,293 |  |  |  | 2,293 |
Farm Real Estate |  |  | — |  |  |  | — |  |  |  | 291 |  |  |  | 291 |
Consumer and Other |  |  | — |  |  |  | — |  |  |  | 98 |  |  |  | 98 |
Lease Financing Receivables |  |  | — |  |  |  | — |  |  |  | 429 |  |  |  | 429 |
Unallocated |  |  | — |  |  |  | — |  |  |  | 541 |  |  |  | 541 |
Total |  | $ | 9 |  |  | $ | 7 |  |  | $ | 28,495 |  |  | $ | 28,511 |
Outstanding loan balances: |  |  |  |  |  |  |  |  |  |  |  |
Commercial & Agriculture |  | $ | 863.00 |  |  | $ | — |  |  | $ | 277,732 |  |  | $ | 278,595 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 1,988 |  |  |  | 232 |  |  |  | 368,927 |  |  |  | 371,147 |
Non-Owner Occupied |  |  | 119 |  |  |  | — |  |  |  | 1,018,617 |  |  |  | 1,018,736 |
Residential Real Estate |  |  | 1,414 |  |  |  | 392 |  |  |  | 550,975 |  |  |  | 552,781 |
Real Estate Construction |  |  | — |  |  |  | — |  |  |  | 243,127 |  |  |  | 243,127 |
Farm Real Estate |  |  | — |  |  |  | — |  |  |  | 24,708 |  |  |  | 24,708 |
Lease Financing Receivables |  |  | — |  |  |  | — |  |  |  | 36,797 |  |  |  | 36,797 |
Consumer and Other |  |  | 1 |  |  |  | — |  |  |  | 20,774 |  |  |  | 20,775 |
Total |  | $ | 4,385 |  |  | $ | 624 |  |  | $ | 2,541,657 |  |  | $ | 2,546,666 |
The following tables present credit exposures by internally assigned risk grades as of June 30, 2023 and December 31, 2022. The risk rating analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. The Company’s internal credit risk grading system is based on experiences with similarly graded loans. The Company’s internally assigned risk grades are as follows: • Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral. • Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected. • Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that Civista will sustain some loss if the deficiencies are not corrected. • Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances. • Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted. Based on the most recent analysis performed, the risk category of loans, by type and year of originations, at June 30, 2023, is as follows:
|  | Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  | Converted |  |  |  |
June 30, 2023 |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Loans |  |  | to Term |  |  | Total |
Commercial & Agriculture |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 67,864 |  |  | $ | 68,956 |  |  | $ | 31,829 |  |  | $ | 9,035 |  |  | $ | 9,228 |  |  | $ | 2,482 |  |  | $ | 96,802 |  |  | $ | — |  |  | $ | 286,196 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 113 |  |  |  | — |  |  |  | — |  |  |  | 159 |  |  |  | — |  |  |  | 272 |
Substandard |  |  | — |  |  |  | — |  |  |  | 2,627 |  |  |  | 130 |  |  |  | — |  |  |  | 101 |  |  |  | 2,410 |  |  |  | — |  |  |  | 5,268 |
Doubtful |  |  | — |  |  |  | 207 |  |  |  | 124 |  |  |  | 24 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 355 |
Total Commercial & Agriculture |  | $ | 67,864 |  |  | $ | 69,163 |  |  | $ | 34,580 |  |  | $ | 9,302 |  |  | $ | 9,228 |  |  | $ | 2,583 |  |  | $ | 99,371 |  |  | $ | — |  |  | $ | 292,091 |
Commercial & Agriculture: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period gross charge-offs |  | $ | — |  |  | $ | 59 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 81 |  |  | $ | — |  |  | $ | — |  |  | $ | 140 |
Commercial Real Estate - Owner Occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 15,978 |  |  | $ | 83,687 |  |  | $ | 74,403 |  |  | $ | 62,948 |  |  | $ | 33,994 |  |  | $ | 88,206 |  |  | $ | 6,829 |  |  | $ | — |  |  | $ | 366,045 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 400 |  |  |  | 311 |  |  |  | — |  |  |  | — |  |  |  | 711 |
Substandard |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 1,038 |  |  |  | 2 |  |  |  | — |  |  |  | 1,041 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Commercial Real Estate - Owner Occupied |  | $ | 15,978 |  |  | $ | 83,687 |  |  | $ | 74,404 |  |  | $ | 62,948 |  |  | $ | 34,394 |  |  | $ | 89,555 |  |  | $ | 6,831 |  |  | $ | — |  |  | $ | 367,797 |
Commercial Real Estate - Owner Occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Commercial Real Estate - Non-Owner Occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 84,210 |  |  | $ | 284,184 |  |  | $ | 219,651 |  |  | $ | 148,969 |  |  | $ | 114,306 |  |  | $ | 169,197 |  |  | $ | 25,786 |  |  | $ | — |  |  | $ | 1,046,302 |
Special Mention |  |  | — |  |  |  | 5,543 |  |  |  | — |  |  |  | — |  |  |  | 277 |  |  |  | 7,250 |  |  |  | 277 |  |  |  | — |  |  |  | 13,347 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 146 |  |  |  | 3,468 |  |  |  | — |  |  |  | — |  |  |  | 3,614 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Commercial Real Estate - Non-Owner Occupied |  | $ | 84,210 |  |  | $ | 289,727 |  |  | $ | 219,651 |  |  | $ | 148,969 |  |  | $ | 114,730 |  |  | $ | 179,914 |  |  | $ | 26,063 |  |  | $ | — |  |  | $ | 1,063,263 |
Commercial Real Estate - Non-Owner Occupied: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Residential Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 46,011 |  |  | $ | 108,692 |  |  | $ | 100,130 |  |  | $ | 77,777 |  |  | $ | 37,552 |  |  | $ | 85,246 |  |  | $ | 127,539 |  |  | $ | — |  |  | $ | 582,948 |
Special Mention |  |  | — |  |  |  | 54 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 45 |  |  |  | 55 |  |  |  | — |  |  |  | 155 |
Substandard |  |  | — |  |  |  | 240 |  |  |  | 361 |  |  |  | 258 |  |  |  | 978 |  |  |  | 3,505 |  |  |  | 621 |  |  |  | — |  |  |  | 5,963 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Residential Real Estate |  | $ | 46,011 |  |  | $ | 108,987 |  |  | $ | 100,492 |  |  | $ | 78,036 |  |  | $ | 38,530 |  |  | $ | 88,796 |  |  | $ | 128,215 |  |  | $ | — |  |  | $ | 589,066 |
Residential Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 11 |  |  | $ | — |  |  | $ | — |  |  | $ | 11 |
Real Estate Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 39,396 |  |  | $ | 129,587 |  |  | $ | 37,997 |  |  | $ | 18,211 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,900 |  |  | $ | — |  |  | $ | 234,092 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | - |  |  |  | — |  |  |  | 169 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 169 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Real Estate Construction |  | $ | 39,396 |  |  | $ | 129,587 |  |  | $ | 37,997 |  |  | $ | 18,211 |  |  | $ | 169 |  |  | $ | — |  |  | $ | 8,900 |  |  | $ | — |  |  | $ | 234,261 |
Real Estate Construction: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period gross charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Farm Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 792 |  |  | $ | 1,369 |  |  | $ | 2,400 |  |  | $ | 5,321 |  |  | $ | 826 |  |  | $ | 12,188 |  |  | $ | 1,040 |  |  | $ | — |  |  | $ | 23,935 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 187 |  |  |  | — |  |  |  | — |  |  |  | 187 |
Substandard |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Farm Real Estate |  | $ | 792 |  |  | $ | 1,369 |  |  | $ | 2,400 |  |  | $ | 5,321 |  |  | $ | 826 |  |  | $ | 12,375 |  |  | $ | 1,040 |  |  | $ | — |  |  | $ | 24,123 |
Farm Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Lease Financing Receivables |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 19,340 |  |  | $ | 18,316 |  |  | $ | 5,291 |  |  | $ | 2,099 |  |  | $ | 1,272 |  |  | $ | 46 |  |  | $ | — |  |  | $ | — |  |  | $ | 46,364 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | — |  |  |  | - |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | - |
Doubtful |  |  | — |  |  |  | — |  |  |  | 33 |  |  |  | — |  |  |  | 156 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 189 |
Total Lease Financing Receivables |  | $ | 19,340 |  |  | $ | 18,316 |  |  | $ | 5,324 |  |  | $ | 2,099 |  |  | $ | 1,428 |  |  | $ | 46 |  |  | $ | — |  |  | $ | — |  |  | $ | 46,553 |
Lease Financing Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period charge-offs |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Consumer and Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 3,962 |  |  | $ | 5,360 |  |  | $ | 4,753 |  |  | $ | 2,148 |  |  | $ | 797 |  |  | $ | 416 |  |  | $ | 1,634 |  |  | $ | — |  |  | $ | 19,070 |
Special Mention |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Substandard |  |  | — |  |  |  | 14 |  |  |  | 33 |  |  |  | 1 |  |  |  | — |  |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | 57 |
Doubtful |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total Consumer and Other |  | $ | 3,962 |  |  | $ | 5,374 |  |  | $ | 4,786 |  |  | $ | 2,149 |  |  | $ | 797 |  |  | $ | 424 |  |  | $ | 1,634 |  |  | $ | — |  |  | $ | 19,126 |
Consumer and Other: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period charge-offs |  | $ | — |  |  | $ | 9 |  |  | $ | 12 |  |  | $ | 3 |  |  | $ | 10 |  |  | $ | — |  |  | $ | 4 |  |  | $ | — |  |  | $ | 38 |
Total Loans |  | $ | 277,553 |  |  | $ | 706,209 |  |  | $ | 479,633 |  |  | $ | 327,035 |  |  | $ | 200,102 |  |  | $ | 373,694 |  |  | $ | 272,054 |  |  | $ | — |  |  | $ | 2,636,280 |
Total Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Current-period charge-offs |  | $ | — |  |  | $ | 68 |  |  | $ | 12 |  |  | $ | 3 |  |  | $ | 10 |  |  | $ | 92 |  |  | $ | 4 |  |  | $ | — |  |  | $ | 189 |
Generally, Residential Real Estate, Real Estate Construction and Consumer and Other loans are not risk-graded, except when collateral is used for a business purpose. Only those loans that have been risk rated as of December 31, 2022 are included below.
December 31, 2022 |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Ending Balance |
Commercial & Agriculture |  | $ | 273,291 |  |  | $ | 2,558 |  |  | $ | 2,746 |  |  | $ | — |  |  | $ | 278,595 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 367,652 |  |  |  | 734 |  |  |  | 2,761 |  |  |  | — |  |  |  | 371,147 |
Non-Owner Occupied |  |  | 1,003,942 |  |  |  | 10,947 |  |  |  | 3,847 |  |  |  | — |  |  |  | 1,018,736 |
Residential Real Estate |  |  | 114,021 |  |  |  | 183 |  |  |  | 5,787 |  |  |  | — |  |  |  | 119,991 |
Real Estate Construction |  |  | 198,734 |  |  |  | — |  |  |  | 221 |  |  |  | — |  |  |  | 198,955 |
Farm Real Estate |  |  | 24,283 |  |  |  | 379 |  |  |  | 46 |  |  |  | — |  |  |  | 24,708 |
Lease Financing Receivables |  |  | 36,223 |  |  |  | — |  |  |  | 401 |  |  |  | 173 |  |  |  | 36,797 |
Consumer and Other |  |  | 839 |  |  |  | — |  |  |  | 163 |  |  |  | — |  |  |  | 1,002 |
Total |  | $ | 2,018,985 |  |  | $ | 14,801 |  |  | $ | 15,972 |  |  | $ | 173 |  |  | $ | 2,049,931 |
The following tables present performing and nonperforming loans based solely on payment activity for the period ended December 31, 2022 that have not been assigned an internal risk grade.
December 31, 2022 |  | Residential Real Estate |  |  | Real Estate Construction |  |  | Consumer and Other |  |  | Total |
Performing |  | $ | 432,790 |  |  | $ | 44,172 |  |  | $ | 19,773 |  |  | $ | 496,735 |
Nonperforming |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 432,790 |  |  | $ | 44,172 |  |  | $ | 19,773 |  |  | $ | 496,735 |
The following tables include an aging analysis of the recorded investment of past due loans outstanding as of June 30, 2023 and December 31, 2022.
June 30, 2023 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or Greater Past Due |  |  | Total Past Due |  |  | Current |  |  | Total Loans |  |  | Past Due 90 Days and Accruing |
Commercial & Agriculture |  | $ | 2,146 |  |  | $ | 315 |  |  | $ | 1,072 |  |  | $ | 3,533 |  |  | $ | 288,558 |  |  | $ | 292,091 |  |  | $ | — |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | — |  |  |  | 18 |  |  |  | 219 |  |  |  | 237 |  |  |  | 367,560 |  |  |  | 367,797 |  |  |  | — |
Non-Owner Occupied |  |  | — |  |  |  | — |  |  |  | 1,252 |  |  |  | 1,252 |  |  |  | 1,062,011 |  |  |  | 1,063,263 |  |  |  | — |
Residential Real Estate |  |  | 389 |  |  |  | 678 |  |  |  | 1,786 |  |  |  | 2,853 |  |  |  | 586,213 |  |  |  | 589,066 |  |  |  | — |
Real Estate Construction |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 234,261 |  |  |  | 234,261 |  |  |  | — |
Farm Real Estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 24,123 |  |  |  | 24,123 |  |  |  | — |
Lease Financing Receivables |  |  | 334 |  |  |  | 436 |  |  |  | 202 |  |  |  | 972 |  |  |  | 45,581 |  |  |  | 46,553 |  |  |  | — |
Consumer and Other |  |  | 83 |  |  |  | 12 |  |  |  | 55 |  |  |  | 150 |  |  |  | 18,976 |  |  |  | 19,126 |  |  |  | — |
Total |  | $ | 2,952 |  |  | $ | 1,459 |  |  | $ | 4,586 |  |  | $ | 8,997 |  |  | $ | 2,627,283 |  |  | $ | 2,636,280 |  |  | $ | — |
December 31, 2022 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or Greater Past Due |  |  | Total Past Due |  |  | Current |  |  | Purchased Credit- Impaired Loans |  |  | Total Loans |  |  | Past Due 90 Days and Accruing |
Commercial & Agriculture |  | $ | 247 |  |  | $ | 78 |  |  | $ | 534 |  |  | $ | 859 |  |  | $ | 276,873 |  |  | $ | 863 |  |  | $ | 278,595 |  |  | $ | — |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 21 |  |  |  | 13 |  |  |  | 76 |  |  |  | 110 |  |  |  | 369,049 |  |  |  | 1,988 |  |  |  | 371,147 |  |  |  | — |
Non-Owner Occupied |  |  | — |  |  |  | — |  |  |  | 1,164 |  |  |  | 1,164 |  |  |  | 1,017,453 |  |  |  | 119 |  |  |  | 1,018,736 |  |  |  | — |
Residential Real Estate |  |  | 3,133 |  |  |  | 857 |  |  |  | 1,107 |  |  |  | 5,097 |  |  |  | 546,270 |  |  |  | 1,414 |  |  |  | 552,781 |  |  |  | — |
Real Estate Construction |  |  | — |  |  |  | — |  |  |  | 219 |  |  |  | 219 |  |  |  | 242,908 |  |  |  | — |  |  |  | 243,127 |  |  |  | — |
Farm Real Estate |  |  | 7 |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | 24,701 |  |  |  | — |  |  |  | 24,708 |  |  |  | — |
Lease Financing Receivables |  |  | 1,040 |  |  |  | — |  |  |  | 341 |  |  |  | 1,381 |  |  |  | 35,416 |  |  |  | — |  |  |  | 36,797 |  |  |  | — |
Consumer and Other |  |  | 293 |  |  |  | 49 |  |  |  | 74 |  |  |  | 416 |  |  |  | 20,358 |  |  |  | 1 |  |  |  | 20,775 |  |  |  | — |
Total |  | $ | 4,741 |  |  | $ | 997 |  |  | $ | 3,515 |  |  | $ | 9,253 |  |  | $ | 2,533,028 |  |  | $ | 4,385 |  |  | $ | 2,546,666 |  |  | $ | — |
The following table presents loans on nonaccrual status as of June 30, 2023.
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |
|  | Nonaccrual loans with a related ACL |  |  | Nonaccrual loans without a related ACL |  |  | Total Nonaccrual loans |  |  | Interest Income Recognized |
Commercial & Agriculture |  | $ | 565 |  |  | $ | 622 |  |  | $ | 1,187 |  |  | $ | — |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | — |  |  |  | 312 |  |  |  | 312 |  |  |  | 9 |
Non-Owner Occupied |  |  | — |  |  |  | 1,252 |  |  |  | 1,252 |  |  |  | — |
Residential Real Estate |  |  | — |  |  |  | 4,571 |  |  |  | 4,571 |  |  |  | 65 |
Real Estate Construction |  |  | — |  |  |  | 214 |  |  |  | 214 |  |  |  | — |
Farm Real Estate |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Lease Financing Receivables |  |  | 373 |  |  |  | — |  |  |  | 373 |  |  |  | — |
Consumer and Other |  |  | — |  |  |  | 63 |  |  |  | 63 |  |  |  | 3 |
Total |  | $ | 938 |  |  | $ | 7,034 |  |  | $ | 7,972 |  |  | $ | 77 |
The following table presents loans on nonaccrual status as of December 31, 2022, excluding PCI loans.
|  | December 31, 2022 |
Commercial & Agriculture |  | $ | 774 |
Commercial Real Estate: |  |  |
Owner Occupied |  |  | 386 |
Non-Owner Occupied |  |  | 1,109 |
Residential Real Estate |  |  | 3,926 |
Real Estate Construction |  |  | 221 |
Farm Real Estate |  |  | — |
Lease Financing Receivables |  |  | — |
Consumer and Other |  |  | 91 |
Total |  | $ | 6,507 |
Nonaccrual Loans: Loans are considered for nonaccrual status upon reaching 90 days delinquency, unless the loan is well secured and in the process of collection, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is deducted from interest income. Payments received on nonaccrual loans are applied to the unpaid principal balance. A loan may be returned to accruing status only if one of two conditions are met: the loan is well-secured and none of the principal and interest has been past due for a minimum of 90 days or the principal and interest payments are reasonably assured and a sustained period of performance has occurred, generally six months. Modifications to Borrowers Experiencing Financial Difficulty: From time to time, the Company may modify certain loans to borrowers who are experiencing financial difficulty. In some cases, these modifications result in new loans. Loan modifications to borrowers experiencing financial difficulty may be in the form of principal forgiveness, interest rate reduction, term extension, other-than-significant payment delay or a combination thereof, among other things. During the six months ended June 30, 2023, there were no modifications of loans to borrowers experiencing financial difficulty. Individually Evaluated Loans: Larger (greater than $350) Commercial & Agricultural and Commercial Real Estate loan relationships, and Residential Real Estate and Consumer loans that are part of a larger relationship are tested for impairment on a quarterly basis. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance. The Company’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition. The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related allowance for credit losses allocated to these loans.
June 30, 2023 |  | Real Estate |  |  | Other |  |  | Allowance for Credit Losses |
Commercial & Agriculture |  | $ | 49 |  |  | $ | 632 |  |  | $ | 307 |
Commercial Real Estate: |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | — |  |  |  | — |  |  |  | — |
Non-Owner Occupied |  |  | — |  |  |  | — |  |  |  | — |
Residential Real Estate |  |  | 610 |  |  |  | — |  |  |  | — |
Real Estate Construction |  |  | — |  |  |  | — |  |  |  | — |
Farm Real Estate |  |  | — |  |  |  | — |  |  |  | — |
Lease Financing Receivables |  |  | — |  |  |  | 431 |  |  |  | 216 |
Consumer and Other |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 659 |  |  | $ | 1,063 |  |  | $ | 523 |
Collateral-dependent loans consist primarily of residential real estate, commercial real estate and commercial and industrial loans. These loans are individually evaluated when foreclosure is probable or when the repayment of the loan is expected to be provided substantially through the operation or sale of the underlying collateral. In the case of commercial and industrial loans secured by equipment, the fair value of the collateral is estimated by third-party valuation experts. Loan balances are charged down to the underlying collateral value when they are deemed uncollectible. Note that the Company did not elect to use the collateral maintenance agreement practical expedient available under CECL. The following table includes the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable, as of December 31, 2022, excluding PCI loans.
|  | December 31, 2022 |
|  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & Agriculture |  | $ | — |  |  | $ | — |  |  |  |  |  | $ | 86 |  |  | $ | — |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 82 |  |  |  | 82 |  |  |  |  |  |  | 192 |  |  |  | 6 |
Non-Owner Occupied |  |  | — |  |  |  | — |  |  |  |  |  |  | 35 |  |  |  | — |
Residential Real Estate |  |  | 385 |  |  |  | 410 |  |  |  |  |  |  | 595 |  |  |  | 40 |
Farm Real Estate |  |  | — |  |  |  | — |  |  |  |  |  |  | 381 |  |  |  | 14 |
Total |  |  | 467 |  |  |  | 492 |  |  |  |  |  |  | 1,289 |  |  |  | 60 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & Agriculture |  |  | — |  |  |  | — |  |  | $ | — |  |  |  | — |  |  |  | — |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 150 |  |  |  | 150 |  |  |  | 6 |  |  |  | 214 |  |  |  | — |
Residential Real Estate |  |  | 7 |  |  |  | 11 |  |  |  | 1 |  |  |  | 19 |  |  |  | — |
Lease Financing Receivables |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer and Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  |  | 157 |  |  |  | 161 |  |  |  | 7 |  |  |  | 233 |  |  |  | — |
Total: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial & Agriculture |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 86 |  |  |  | — |
Commercial Real Estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner Occupied |  |  | 232 |  |  |  | 232 |  |  |  | 6 |  |  |  | 406 |  |  |  | 6 |
Non-Owner Occupied |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 35 |  |  |  | — |
Residential Real Estate |  |  | 392 |  |  |  | 421 |  |  |  | 1 |  |  |  | 614 |  |  |  | 40 |
Lease Financing Receivables |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 381 |  |  |  | 14 |
Consumer and Other |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 624 |  |  | $ | 653 |  |  | $ | 7 |  |  | $ | 1,522 |  |  | $ | 60 |
The following table includes the average recorded investment and interest income recognized for impaired financing receivables for the three and six-month periods ended June 30, 2022.
|  | June 30, 2022 |
For the three months ended |  | Average Recorded Investment |  |  | Interest Income Recognized |
Commercial & Agriculture |  | $ | — |  |  | $ | — |
Commercial Real Estate—Owner Occupied |  |  | 178 |  |  |  | 3 |
Commercial Real Estate—Non-Owner Occupied |  |  | — |  |  |  | — |
Residential Real Estate |  |  | 466 |  |  |  | 6 |
Real Estate Construction |  |  | — |  |  |  | — |
Farm Real Estate |  |  | 501 |  |  |  | 6 |
Lease Financing Receivables |  |  | — |  |  |  | — |
Consumer and Other |  |  | — |  |  |  | — |
Total |  | $ | 1,145 |  |  | $ | 15 |
|  | June 30, 2022 |
For the six months ended |  | Average Recorded Investment |  |  | Interest Income Recognized |
Commercial & Agriculture |  | $ | — |  |  | $ | — |
Commercial Real Estate—Owner Occupied |  |  | 187 |  |  |  | 6 |
Commercial Real Estate—Non-Owner Occupied |  |  | — |  |  |  | — |
Residential Real Estate |  |  | 492 |  |  |  | 13 |
Real Estate Construction |  |  | — |  |  |  | — |
Farm Real Estate |  |  | 508 |  |  |  | 12 |
Lease Financing Receivables |  |  | — |  |  |  | — |
Consumer and Other |  |  | — |  |  |  | — |
Total |  | $ | 1,187 |  |  | $ | 31 |
Changes in the accretable yield for PCI loans as of June 30, 2022 were as follows, since acquisition:
|  | For the Three-Month Period Ended June 30, 2022 |
|  | (In Thousands) |
Balance at beginning of period |  | $ | 217 |
Acquisition of PCI loans |  |  | — |
Accretion |  |  | (16 | )
Transfer from non-accretable to accretable |  |  | 15 |
Balance at end of period |  | $ | 216 |
The Company has acquired loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. Upon the Company's adoption of ASU 2016-13, remaining credit-related discount on these assets were re-classified to the allowance for credit losses. The Company elected the prospective transition approach and all loans previously considered purchased credit impaired are now classified as purchased with credit deterioration. The remaining non-credit discount will continue to be accreted into income over the remining lives of the assets. The following table presents additional information regarding loans acquired and accounted for in accordance with ASC 310-30 as of December 31, 2022:
|  | At December 31, 2022 |
|  | Acquired Loans with Specific Evidence of Deterioration of Credit Quality (ASC 310-30) |
|  | (In Thousands) |
Outstanding balance |  | $ | 5,220 |
Carrying amount |  |  | 4,386 |
There was no allowance for loan losses recorded for acquired loans with or without specific evidence of deterioration in credit quality as of December 31, 2022. Foreclosed Assets Held For Sale Foreclosed assets acquired in settlement of loans are carried at fair value less estimated costs to sell and are included in Other assets on the Consolidated Balance Sheet. As of June 30, 2023 and December 31, 2022 there were no foreclosed assets included in Other assets. Allowance for Credit Losses on Off-Balance-Sheet Credit Exposures The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk from a contractual obligation to extend credit. The allowance for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit loss expense recognized within other non-interest expense on the Consolidated Statements of Operations. The estimated credit loss includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over its estimated life. The estimate of expected credit loss is based on the historical loss rate for the loan class in which the loan commitments would be classified as if funded. The following table lists the allowance for credit losses on off-balance sheet credit exposures as of June 30, 2023:
|  | Three Months Ended |  |  | Six Months Ended |
|  | June 30, |  |  | June 30, |
|  | 2023 |  | 2022 |  |  | 2023 |  | 2022 |
Beginning of Period |  | $ | 3,588 |  |  | — |  |  | — |  |  | — |
CECL adoption adjustments |  |  | — |  |  | — |  |  |  | 3,386 |  |  | — |
Charge-offs |  |  | — |  |  | — |  |  |  | — |  |  | — |
Recoveries |  |  | — |  |  | — |  |  |  | — |  |  | — |
Provision |  |  | 263 |  |  | — |  |  |  | 465 |  |  | — |
End of Period |  | $ | 3,851 |  | — |  |  | $ | 3,851 |  |  | — |

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