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Loans (Tables)

6 Months Ended

Jun. 30, 2023

Loan balances as of June 30, 2023 and December 31, 2022 are summarized below:


	(In Thousands)
Loans:	June 30, 2023			December 31, 2022
Consumer Real Estate	$	506,866		$	494,423
Agricultural Real Estate		230,837			220,819
Agricultural		128,344			128,733
Commercial Real Estate		1,280,902			1,152,603
Commercial and Industrial		253,444			242,360
Consumer		88,312			89,147
Other		28,996			29,818
		2,517,701			2,357,903
Less: Net deferred loan fees and costs		(1,908	)		(1,516	)
		2,515,793			2,356,387
Less: Allowance for credit losses		(24,910	)		(20,313	)
Loans - Net	$	2,490,883		$	2,336,074

Distribution of Fixed Rate Loans and Variable Rate Loans by Major Loan Category

The distribution of fixed rate loans and variable rate loans by major loan category is as follows as of June 30, 2023 and December 31, 2022:


	(In Thousands)
	June 30, 2023				December 31, 2022
	Fixed		Variable		Fixed		Variable
Consumer Real Estate	$	341,601	$	165,265	$	354,420	$	140,003
Agricultural Real Estate		142,029		88,808		144,702		76,117
Agricultural		58,445		69,899		52,867		75,866
Commercial Real Estate		993,941		286,961		941,927		210,676
Commercial and Industrial		148,425		105,019		130,513		111,847
Consumer		88,247		65		88,972		175
Other		19,300		9,696		20,029		9,789

Contractual Aging of Recorded Investment in Past Due Loans by Portfolio Classification of Loans

The following table represents the contractual aging of the recorded investment (in thousands) in past due loans by portfolio classification of loans as of June 30, 2023 and December 31, 2022, net of deferred loan fees and costs:


June 30, 2023	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing

Consumer Real Estate	$	1,287	$	5	$	443	$	1,735	$	505,107	$	506,842	$	-
Agricultural Real Estate		5,047		1		-		5,048		225,483		230,531		-
Agricultural		750		462		-		1,212		127,381		128,593		-
Commercial Real Estate		434		-		255		689		1,277,756		1,278,445		-
Commercial and Industrial		26		-		855		881		281,363		282,244		-
Consumer		29		30		60		119		89,019		89,138		-
Total	$	7,573	$	498	$	1,613	$	9,684	$	2,506,109	$	2,515,793	$	-


December 31, 2022	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Current		Total Financing Receivables		Recorded Investment > 90 Days and Accruing

Consumer Real Estate	$	1,536	$	635	$	90	$	2,261	$	492,162	$	494,423	$	-
Agricultural Real Estate		118		2		1,550		1,670		218,844		220,514		-
Agricultural		433		-		152		585		128,341		128,926		-
Commercial Real Estate		74		-		180		254		1,150,257		1,150,511		-
Commercial and Industrial		953		-		182		1,135		270,984		272,119		-
Consumer		83		37		-		120		89,774		89,894		-
Total	$	3,197	$	674	$	2,154	$	6,025	$	2,350,362	$	2,356,387	$	-

Amortized Cost of Nonaccrual Loans by Portfolio Class of Loans

The following tables present the amortized cost of nonaccrual loans by class of loans as of June 30, 2023 and the recorded investment of nonaccrual loans by class of loans as of December 31, 2022:


	(In Thousands)
	June 30, 2023
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
	for Credit Loss		Nonaccrual		Still Accruing

Consumer Real Estate	$	808	$	1,025	$	-
Agricultural Real Estate		3,964		3,964		-
Agricultural		56		56		-
Commercial Real Estate		248		248		-
Commercial & Industrial		97		934		-
Consumer		68		68		-
Total	$	5,241	$	6,295	$	-


	(In Thousands)
	December 31, 2022

Consumer Real Estate	$	612
Agricultural Real Estate		1,921
Agricultural		152
Commercial Real Estate		903
Commercial & Industrial		1,096
Consumer		5
Total	$	4,689

Risk Category of Loans by Portfolio Class

The following table represents the risk category of loans by portfolio class, net of deferred fees and costs, based on the most recent analysis performed as of December 31, 2022:


	(In Thousands)
	Agricultural				Commercial		Commercial
	Real Estate		Agricultural		Real Estate		and Industrial		Other
December 31, 2022
1-2	$	9,912	$	5,857	$	8,718	$	780	$	-
3		47,405		33,671		370,035		67,506		10,921
4		146,143		88,992		737,745		167,291		18,897
5		10,389		228		9,751		3,592		-
6		6,665		178		24,262		3,132		-
7		-		-		-		-		-
8		-		-		-		-		-
Total	$	220,514	$	128,926	$	1,150,511	$	242,301	$	29,818

Recorded Investment for Consumer Loans, Credit Quality based on Status of Loan and Payment Activity

The following tables present the recorded investment in those classes based on payment activity and assigned risk grading as of December 31, 2022.


	(In Thousands)
	Consumer
	Real Estate
	December 31, 2022
Grade
Pass (1-4)	$	492,575
Special Mention (5)		676
Substandard (6)		1,172
Doubtful (7)		-
Total	$	494,423


	(In Thousands)
	Consumer
	December 31, 2022
Performing	$	89,853
Nonperforming		41
Total	$	89,894

Loan Balances Based on Year of Origination

The following table reflects loan balances as of June 30, 2023 based on year of origination:


	(In Thousands)
	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
											Term		Amortized		Grand
	2023		2022		2021		2020		Prior		Total		Cost Basis		Total

Consumer Real Estate
Risk Rating
Pass (1-4)	$	40,806	$	99,239	$	95,955	$	86,022	$	135,764	$	457,786	$	47,333	$	505,119
Special Mention (5)		-		-		-		-		543		543		-		543
Substandard (6)		-		-		405		-		757		1,162		18		1,180
Doubtful (7)		-		-		-		-		-		-		-		-
Total Consumer Real Estate	$	40,806	$	99,239	$	96,360	$	86,022	$	137,064	$	459,491	$	47,351	$	506,842
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural Real Estate
Risk Rating
Pass (1-4)	$	21,557	$	40,186	$	25,457	$	26,773	$	90,134	$	204,107	$	97	$	204,204
Special Mention (5)		-		171		13,135		-		5,776		19,082		-		19,082
Substandard (6)		-		249		-		188		6,808		7,245		-		7,245
Doubtful (7)		-		-		-		-		-		-		-		-
Total Agricultural Real Estate	$	21,557	$	40,606	$	38,592	$	26,961	$	102,718	$	230,434	$	97	$	230,531
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural
Risk Rating
Pass (1-4)	$	14,815	$	25,059	$	10,432	$	5,167	$	6,645	$	62,118	$	59,778	$	121,896
Special Mention (5)		517		1,035		1,793		1,026		-		4,371		2,248		6,619
Substandard (6)		-		-		-		78		-		78		-		78
Doubtful (7)		-		-		-		-		-		-		-		-
Total Agricultural	$	15,332	$	26,094	$	12,225	$	6,271	$	6,645	$	66,567	$	62,026	$	128,593
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-


	(In Thousands)
	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
											Term		Amortized		Grand
	2023		2022		2021		2020		Prior		Total		Cost Basis		Total

Commercial Real Estate
Risk Rating
Pass (1-4)	$	166,430	$	440,265	$	256,817	$	130,716	$	259,203	$	1,253,431	$	-	$	1,253,431
Special Mention (5)		-		-		-		10,571		1,283		11,854		-		11,854
Substandard (6)		1,118		-		-		75		11,967		13,160		-		13,160
Doubtful (7)		-		-		-		-		-		-		-		-
Total Commercial Real Estate	$	167,548	$	440,265	$	256,817	$	141,362	$	272,453	$	1,278,445	$	-	$	1,278,445
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-
Commercial & Industrial
Risk Rating
Pass (1-4)	$	40,307	$	58,399	$	30,851	$	27,371	$	5,770	$	162,698	$	86,104	$	248,802
Special Mention (5)		197		4		221		155		464		1,041		202		1,243
Substandard (6)		-		476		-		925		331		1,732		1,465		3,197
Doubtful (7)		-		-		-		-		-		-				-
Total Commercial & Industrial	$	40,504	$	58,879	$	31,072	$	28,451	$	6,565	$	165,471	$	87,771	$	253,242
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Other
Risk Rating
Pass (1-4)	$	-	$	200	$	17,526	$	6,179	$	5,097	$	29,002	$	-	$	29,002
Special Mention (5)		-		-		-		-		-		-		-		-
Substandard (6)		-		-		-		-		-		-		-		-
Doubtful (7)		-		-		-		-		-		-		-		-
Total Other	$	-	$	200	$	17,526	$	6,179	$	5,097	$	29,002	$	-	$	29,002
Gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

The following table presents payment performance as of June 30, 2023 by year of origination:


	(In Thousands)
	Term Loans Amortized Cost Basis by Origination Year
													Revolving
													Loans
											Term		Amortized		Grand
	2023		2022		2021		2020		Prior		Total		Cost Basis		Total

Consumer
Payment Performance
Performing	$	15,830	$	49,158	$	13,575	$	6,751	$	3,714	$	89,028	$	43	$	89,071
Nonperforming		-		7		60		-		-		67		-		67
Total Consumer	$	15,830	$	49,165	$	13,635	$	6,751	$	3,714	$	89,095	$	43	$	89,138
Gross charge-offs YTD	$	109	$	24	$	20	$	29	$	-	$	182	$	-	$	182

Collateral-dependent Loans

The following table presents collateral-dependent loans grouped by collateral as of June 30, 2023:


	(In Thousands)
	Real
	Estate
Consumer Real Estate	$	20
Agricultural Real Estate		-
Agricultural		-
Commercial Real Estate		25
Commercial & Industrial		-
Consumer		-
Total	$	45

Schedule of Impaired Loans

Information about impaired loans as of December 31, 2022 and June 30, 2022 are presented for comparison purposes and are as follows:


	(In Thousands)
	December 31, 2022		June 30, 2022

Impaired loans without a valuation allowance	$	4,194	$	5,680
Impaired loans with a valuation allowance		4,663		4,989
Total impaired loans	$	8,857	$	10,669
Valuation allowance related to impaired loans	$	1,996	$	2,419
Total non-accrual loans	$	4,689	$	5,247
Total loans past-due ninety days or more and still accruing	$	-	$	-
Quarter ended average investment in impaired loans	$	9,660	$	9,748
Year to date average investment in impaired loans	$	10,710	$	11,258

Loans Individually Evaluated for Impairment by Portfolio Class of Loans

The following tables present loans individually evaluated for impairment by class of loans for the three and six months ended June 30, 2022 and for the year ended December 31, 2022.


	(In Thousands)
											QTD
							QTD		QTD		Interest
Three Months Ended June 30, 2022			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	657	$	657	$	-	$	390	$	1	$	4
Agricultural Real Estate		2,414		2,518		-		2,247		6		3
Agricultural		1,296		1,296		-		445		-		1
Commercial Real Estate		1,148		1,148		-		1,323		7		14
Commercial and Industrial		145		145		-		207		-		10
Consumer		20		20		-		20		-		-
With a specific allowance recorded:
Consumer Real Estate		-		-		-		-		-		-
Agricultural Real Estate		-		-		-		-		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		2,985		2,985		573		3,105		38		-
Commercial and Industrial		2,004		2,004		1,846		2,011		52		-
Consumer		-		-		-		-		-		-
Totals:
Consumer Real Estate	$	657	$	657	$	-	$	390	$	1	$	4
Agricultural Real Estate	$	2,414	$	2,518	$	-	$	2,247	$	6	$	3
Agricultural	$	1,296	$	1,296	$	-	$	445	$	-	$	1
Commercial Real Estate	$	4,133	$	4,133	$	573	$	4,428	$	45	$	14
Commercial and Industrial	$	2,149	$	2,149	$	1,846	$	2,218	$	52	$	10
Consumer	$	20	$	20	$	-	$	20	$	-	$	-


	(In Thousands)
											YTD
							YTD		YTD		Interest
Six Months Ended June 30, 2022			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	657	$	657	$	-	$	381	$	2	$	6
Agricultural Real Estate		2,414		2,518		-		1,696		13		5
Agricultural		1,296		1,296		-		233		-		1
Commercial Real Estate		1,148		1,148		-		991		11		19
Commercial and Industrial		145		145		-		231		2		10
Consumer		20		20		-		19		1		-
With a specific allowance recorded:
Consumer Real Estate		-		-		-		-		-		-
Agricultural Real Estate		-		-		-		2,775		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		2,985		2,985		573		3,426		74		-
Commercial and Industrial		2,004		2,004		1,846		1,502		65		-
Consumer		-		-		-		4		-		-
Totals:
Consumer Real Estate	$	657	$	657	$	-	$	381	$	2	$	6
Agricultural Real Estate	$	2,414	$	2,518	$	-	$	4,471	$	13	$	5
Agricultural	$	1,296	$	1,296	$	-	$	233	$	-	$	1
Commercial Real Estate	$	4,133	$	4,133	$	573	$	4,417	$	85	$	19
Commercial and Industrial	$	2,149	$	2,149	$	1,846	$	1,733	$	67	$	10
Consumer	$	20	$	20	$	-	$	23	$	1	$	-


	(In Thousands)
											Interest
Year Ended December 31, 2022			Unpaid				Average		Interest		Income
	Recorded		Principal		Related		Recorded		Income		Recognized
	Investment		Balance		Allowance		Investment		Recognized		Cash Basis
With no related allowance recorded:
Consumer Real Estate	$	509	$	509	$	-	$	355	$	5	$	12
Agricultural Real Estate		2,280		2,385		-		2,048		25		6
Agricultural		152		152		-		588		-		2
Commercial Real Estate		1,234		1,272		-		1,252		29		43
Commercial and Industrial		17		417		-		135		2		10
Consumer		2		2		-		15		1		-
With a specific allowance recorded:
Consumer Real Estate		60		60		6		15		-		1
Agricultural Real Estate		-		-		-		1,388		-		-
Agricultural		-		-		-		-		-		-
Commercial Real Estate		2,874		2,874		438		3,176		150		-
Commercial and Industrial		1,564		1,564		1,551		1,736		149		23
Consumer		165		165		1		2		-		-
Totals:
Consumer Real Estate	$	569	$	569	$	6	$	370	$	5	$	13
Agricultural Real Estate	$	2,280	$	2,385	$	-	$	3,436	$	25	$	6
Agricultural	$	152	$	152	$	-	$	588	$	-	$	2
Commercial Real Estate	$	4,108	$	4,146	$	438	$	4,428	$	179	$	43
Commercial and Industrial	$	1,581	$	1,981	$	1,551	$	1,871	$	151	$	33
Consumer	$	167	$	167	$	1	$	17	$	1	$	-

Analysis of Allowance for Credit Losses


	(In Thousands)
	Consumer Real Estate		Agricultural Real Estate			Agricultural		Commercial Real Estate		Commercial and Industrial			Consumer			Total
Three Months Ended June 30, 2023
ALLOWANCE FOR CREDIT LOSSES
Beginning balance	$	3,623	$	209		$	66	$	16,088	$	3,414		$	1,234		$	24,634
Provision for credit losses - loans		369		(76	)		41		590		(653	)		(128	)		143
Charge-offs		-		-			-		-		-			(60	)		(60	)
Recoveries		6		104			-		3		6			74			193
Ending Balance	$	3,998	$	237		$	107	$	16,681	$	2,767		$	1,120		$	24,910


	(In Thousands)
	Consumer Real Estate			Agricultural Real Estate			Agricultural			Commercial Real Estate		Commercial and Industrial			Consumer			Total
Six Months Ended June 30, 2023
ALLOWANCE FOR CREDIT LOSSES
Beginning balance	$	998		$	349		$	751		$	11,924	$	5,382		$	909		$	20,313
Adoption of ASU 2016-13		2,874	-		(166	)		(650	)		3,501		(2,165	)		170			3,564
Provision for credit losses-loans		113			(50	)		6			1,251		(462	)		102			960
Charge-offs		-			-			-			-		-			(182	)		(182	)
Recoveries		13			104			-			5		12			121			255
Ending Balance	$	3,998		$	237		$	107		$	16,681	$	2,767		$	1,120		$	24,910

The following tables break down the activity in the AULC for the three and six months ended June 30, 2023:


	(In Thousands)
	Unfunded Loan Commitment & Letters of Credit
Three Months Ended June 30, 2023
ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT
Beginning balance	$	2,228
Provision for credit losses - off balance sheet credit exposures		(129	)
Charge-offs		-
Recoveries		-
Ending Balance	$	2,099


	(In Thousands)
	Unfunded Loan Commitment & Letters of Credit
Six Months Ended June 30, 2023
ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT
Beginning balance	$	1,262
Adoption of ASU 2016-13		904
Provision for credit losses-off balance sheet credit exposures		(67	)
Charge-offs		-
Recoveries		-
Ending Balance	$	2,099

Additional analysis, presented in thousands, related to the ALLL for the three and six months ended June 30, 2022 in addition to the ending balances as of December 31, 2022 is as follows:


	Consumer Real Estate		Agricultural Real Estate			Agricultural			Commercial Real Estate		Commercial and Industrial		Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated			Total
Three Months Ended June 30, 2022
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	892	$	606		$	844		$	9,573	$	4,066	$	623		$	1,076	$	167		$	17,847
Charge Offs		-		-			-			-		-		(117	)		-		-			(117	)
Recoveries		4		-			-			3		65		70			-		-			142
Provision (Credit)		43		(260	)		(90	)		851		1,234		(9	)		-		(141	)		1,628
Other Non-interest expense related to unfunded		-		-			-			-		-		-			91		-			91
Ending Balance	$	939	$	346		$	754		$	10,427	$	5,365	$	567		$	1,167	$	26		$	19,591
Ending balance: individually evaluated for impairment	$	-	$	-		$	-		$	-	$	2,419	$	-		$	-	$	-		$	2,419
Ending balance: collectively evaluated for impairment	$	939	$	346		$	754		$	10,427	$	2,946	$	567		$	1,167	$	26		$	17,172
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-		$	-		$	-	$	-	$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	410,468	$	199,650		$	127,340		$	977,588	$	264,124	$	55,648		$	-	$	-		$	2,034,818
Ending balance: individually evaluated for impairment	$	657	$	2,414		$	1,296		$	4,133	$	2,149	$	20		$	-	$	-		$	10,669
Ending balance: collectively evaluated for impairment	$	409,318	$	197,039		$	126,044		$	973,258	$	261,854	$	55,628		$	-	$	-		$	2,023,141
Ending balance: loans acquired with deteriorated credit quality	$	493	$	197		$	-		$	197	$	121	$	-		$	-	$	-		$	1,008


	Consumer Real Estate		Agricultural Real Estate			Agricultural		Commercial Real Estate		Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated			Total
Six Months Ended June 30, 2022
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	857	$	1,040		$	709	$	9,130	$	3,847		$	625		$	1,041	$	34		$	17,283
Charge Offs		-		-			-		-		(6	)		(205	)		-		-			(211	)
Recoveries		9		-			-		5		74			97			-		-			185
Provision (Credit)		73		(694	)		45		1,292		1,450			50			-		(8	)		2,208
Other Non-interest expense related to unfunded		-		-			-		-		-			-			126		-			126
Ending Balance	$	939	$	346		$	754	$	10,427	$	5,365		$	567		$	1,167	$	26		$	19,591
Ending balance: individually evaluated for impairment	$	-	$	-		$	-	$	-	$	2,419		$	-		$	-	$	-		$	2,419
Ending balance: collectively evaluated for impairment	$	939	$	346		$	754	$	10,427	$	2,946		$	567		$	1,167	$	26		$	17,172
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-		$	-	$	-	$	-		$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	410,468	$	199,650		$	127,340	$	977,588	$	264,124		$	55,648		$	-	$	-		$	2,034,818
Ending balance: individually evaluated for impairment	$	657	$	2,414		$	1,296	$	4,133	$	2,149		$	20		$	-	$	-		$	10,669
Ending balance: collectively evaluated for impairment	$	409,318	$	197,039		$	126,044	$	973,258	$	261,854		$	55,628		$	-	$	-		$	2,023,141
Ending balance: loans acquired with deteriorated credit quality	$	493	$	197		$	-	$	197	$	121		$	-		$	-	$	-		$	1,008


December 31, 2022	Consumer Real Estate		Agricultural Real Estate			Agricultural		Commercial Real Estate		Commercial and Industrial			Consumer			Unfunded Loan Commitment & Letters of Credit		Unallocated			Total
ALLOWANCE FOR CREDIT LOSSES:
Beginning balance	$	857	$	1,040		$	709	$	9,130	$	3,847		$	625		$	1,041	$	34		$	17,283
Charge Offs		-		-			-		-		(418	)		(409	)		-		-			(827	)
Recoveries		20		-			7		9		93			169			-		-			298
Provision (Credit)		121		(691	)		35		2,785		1,860			506			-		(16	)		4,600
Other Non-interest expense related to unfunded		-		-			-		-		-			-			221		-			221
Ending Balance	$	998	$	349		$	751	$	11,924	$	5,382		$	891		$	1,262	$	18		$	21,575
Ending balance: individually evaluated for impairment	$	6	$	-		$	-	$	438	$	1,551		$	1		$	-	$	-		$	1,996
Ending balance: collectively evaluated for impairment	$	992	$	349		$	751	$	11,486	$	3,831		$	890		$	1,262	$	18		$	19,579
Ending balance: loans acquired with deteriorated credit quality	$	-	$	-		$	-	$	-	$	-		$	-		$	-	$	-		$	-
FINANCING RECEIVABLES:
Ending balance	$	494,423	$	220,514		$	128,926	$	1,150,511	$	272,119		$	89,894		$	-	$	-		$	2,356,387
Ending balance: individually evaluated for impairment	$	569	$	2,280		$	152	$	4,108	$	1,581		$	167		$	-	$	-		$	8,857
Ending balance: collectively evaluated for impairment	$	493,449	$	218,039		$	128,774	$	1,146,389	$	270,493		$	89,727		$	-	$	-		$	2,346,871
Ending balance: loans acquired with deteriorated credit quality	$	405	$	195		$	-	$	14	$	45		$	-		$	-	$	-		$	659