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Loans | 12 Months Ended
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Dec. 31, 2024
Receivables [Abstract] |
Loans | Note 4 - Loans The Company had $3.0 million in loans held for sale at December 31, 2024 as compared to $1.6 million in loans held for sale at December 31, 2023. Loans at December 31 are summarized below:
|  | (In Thousands) |
Loans: |  | 2024 |  |  | 2023 |
Consumer Real Estate |  | $ | 520,114 |  |  | $ | 521,895 |
Agricultural Real Estate |  |  | 216,401 |  |  |  | 223,791 |
Agricultural |  |  | 152,080 |  |  |  | 132,560 |
Commercial Real Estate |  |  | 1,310,811 |  |  |  | 1,337,766 |
Commercial and Industrial |  |  | 275,152 |  |  |  | 254,935 |
Consumer |  |  | 63,009 |  |  |  | 79,591 |
Other |  |  | 24,978 |  |  |  | 30,136 |
|  |  | 2,562,545 |  |  |  | 2,580,674 |
Less: Net deferred loan fees and costs and other* |  |  | (676 | ) |  |  | 517 |
|  |  | 2,561,869 |  |  |  | 2,581,191 |
Less: Allowance for credit losses |  |  | (25,826 | ) |  |  | (25,024 | )
Loans - Net |  | $ | 2,536,043 |  |  | $ | 2,556,167 |
*This chart contains fair value adjustments to the basis of derivatives in the amount of $1.1 million and $2.7 million at December 31, 2024 and December 31, 2023, respectively. Following are the characteristics and underwriting criteria for each major type of loan the Bank offers: Consumer Real Estate: Purchase, refinance, or equity financing of one to four family owner occupied dwelling. Success in repayment is subject to borrower’s income, debt level, character in fulfilling payment obligations, employment, and others. Agricultural Real Estate: Purchase of farm real estate or for permanent improvements to the farm real estate. Cash flow from the farm operation is the repayment source and is therefore subject to the financial success of the farm operation. Agricultural: Loans for the production and housing of crops, fruits, vegetables, and livestock or to fund the purchase or re-finance of capital assets such as machinery and equipment and livestock. The production of crops and livestock is especially vulnerable to commodity prices and weather. The vulnerability to commodity prices is offset by the farmer’s ability to hedge their position by the use of the future contracts. The risk related to weather is often mitigated by requiring crop insurance. Commercial Real Estate: Construction, purchase, and refinance of business purpose real estate. Risks include potential construction delays and overruns, vacancies, collateral value subject to market value fluctuations, interest rate, market demands, borrower’s ability to repay in orderly fashion, and others. The Bank does employ stress testing on higher balance loans to mitigate risk by ensuring the customer’s ability to repay in a changing rate environment before granting loan approval. Commercial and Industrial: Loans to proprietorships, partnerships, or corporations to provide temporary working capital and seasonal loans as well as long term loans for capital asset acquisition. Risks include adequacy of cash flow, reasonableness of projections, financial leverage, economic trends, management ability and estimated capital expenditures during the fiscal year. The Bank does employ stress testing on higher balance loans to mitigate risk by ensuring the customer's ability to repay in a changing rate environment before granting loan approval. Consumer: Funding for individual and family purposes. Success in repayment is subject to borrower’s income, debt level, character in fulfilling payment obligations, employment, and other factors. Other: Primarily funds public improvements in the Bank’s service area. Repayment ability is based on the continuance of the taxation revenue as the source of repayment. The following is a maturity schedule by major category of loans excluding fair value adjustments at December 31, 2024:
|  | (In Thousands) |
|  |  |  |  | After One |  |  | After Five |  |  |  |  |  |  |
|  | Within |  |  | Year Within |  |  | Years Within |  |  | After |  |  |  |
|  | One Year |  |  | Five Years |  |  | Fifteen Years |  |  | Fifteen Years |  |  | Total |
Consumer Real Estate |  | $ | 19,180 |  |  | $ | 25,777 |  |  | $ | 156,930 |  |  | $ | 320,327 |  |  | $ | 522,214 |
Agricultural Real Estate |  |  | 6,490 |  |  |  | 7,715 |  |  |  | 65,320 |  |  |  | 137,074 |  |  |  | 216,599 |
Agricultural |  |  | 82,568 |  |  |  | 55,905 |  |  |  | 8,888 |  |  |  | 4,741 |  |  |  | 152,102 |
Commercial Real Estate |  |  | 138,177 |  |  |  | 403,661 |  |  |  | 565,194 |  |  |  | 203,829 |  |  |  | 1,310,861 |
Commercial and Industrial |  |  | 127,540 |  |  |  | 83,964 |  |  |  | 63,867 |  |  |  | 148 |  |  |  | 275,519 |
Consumer |  |  | 2,274 |  |  |  | 50,750 |  |  |  | 10,138 |  |  |  | 41 |  |  |  | 63,203 |
Other |  |  | 77 |  |  |  | 956 |  |  |  | 23,949 |  |  |  | - |  |  |  | 24,982 |
|  | $ | 376,306 |  |  | $ | 628,728 |  |  | $ | 894,286 |  |  | $ | 666,160 |  |  | $ | 2,565,480 |
The distribution of fixed rate loans and variable rate loans by major loan category is as follows as of December 31, 2024:
|  | (In Thousands) |
|  | Fixed |  |  | Variable |
|  | Rate |  |  | Rate |
Consumer Real Estate |  | $ | 305,062 |  |  | $ | 215,052 |
Agricultural Real Estate |  |  | 118,808 |  |  |  | 97,593 |
Agricultural |  |  | 54,099 |  |  |  | 97,981 |
Commercial Real Estate |  |  | 934,197 |  |  |  | 376,614 |
Commercial and Industrial |  |  | 148,542 |  |  |  | 126,610 |
Consumer |  |  | 62,977 |  |  |  | 32 |
Other |  |  | 15,270 |  |  |  | 9,708 |
Variable rate loans that have reached ceiling or floor limits are reported as fixed rate loans until such time as their rates adjust away from those limits. Other loans are included in the commercial and industrial category for the remainder of the tables in this Note 4, unless specifically noted separately. The following table represents the contractual aging of the recorded investment in past due loans by portfolio classification of loans as of December 31, 2024 and 2023, net of deferred loan fees and costs:
|  | (In Thousands) |
December 31, 2024 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days |  |  | Total Past Due |  |  | Current |  |  | Total Financing Receivables |
Consumer Real Estate |  | $ | 2,533 |  |  | $ | 547 |  |  | $ | 559 |  |  | $ | 3,639 |  |  | $ | 516,753 |  |  | $ | 520,392 |
Agricultural Real Estate |  |  | 651 |  |  |  | - |  |  |  | - |  |  |  | 651 |  |  |  | 215,486 |  |  |  | 216,137 |
Agricultural |  |  | 44 |  |  |  | - |  |  |  | 79 |  |  |  | 123 |  |  |  | 152,258 |  |  |  | 152,381 |
Commercial Real Estate |  |  | 54 |  |  |  | 141 |  |  |  | 360 |  |  |  | 555 |  |  |  | 1,307,906 |  |  |  | 1,308,461 |
Commercial and Industrial |  |  | 122 |  |  |  | 5 |  |  |  | 57 |  |  |  | 184 |  |  |  | 299,613 |  |  |  | 299,797 |
Consumer |  |  | 365 |  |  |  | 19 |  |  |  | 62 |  |  |  | 446 |  |  |  | 63,181 |  |  |  | 63,627 |
Total |  | $ | 3,769 |  |  | $ | 712 |  |  | $ | 1,117 |  |  | $ | 5,598 |  |  | $ | 2,555,197 |  |  | $ | 2,560,795 |
|  | (In Thousands) |
December 31, 2023 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater Than 90 Days |  |  | Total Past Due |  |  | Current |  |  | Total Financing Receivables |
Consumer Real Estate |  | $ | 1,914 |  |  | $ | 137 |  |  | $ | 670 |  |  | $ | 2,721 |  |  | $ | 519,187 |  |  | $ | 521,908 |
Agricultural Real Estate |  |  | - |  |  |  | 3,429 |  |  |  | 55 |  |  |  | 3,484 |  |  |  | 219,995 |  |  |  | 223,479 |
Agricultural |  |  | - |  |  |  | 1,132 |  |  |  | 2,977 |  |  |  | 4,109 |  |  |  | 128,654 |  |  |  | 132,763 |
Commercial Real Estate |  |  | 380 |  |  |  | - |  |  |  | 255 |  |  |  | 635 |  |  |  | 1,334,440 |  |  |  | 1,335,075 |
Commercial and Industrial |  |  | 145 |  |  |  | - |  |  |  | 199 |  |  |  | 344 |  |  |  | 284,550 |  |  |  | 284,894 |
Consumer |  |  | 218 |  |  |  | 37 |  |  |  | 26 |  |  |  | 281 |  |  |  | 80,072 |  |  |  | 80,353 |
Total |  | $ | 2,657 |  |  | $ | 4,735 |  |  | $ | 4,182 |  |  | $ | 11,574 |  |  | $ | 2,566,898 |  |  | $ | 2,578,472 |
The following tables present the recorded investment in nonaccrual loans by portfolio class of loans as of December 31, 2024 and December 31, 2023:
|  | (In Thousands) |
|  | December 31, 2024 |
|  | Nonaccrual |  |  |  |  |  | Loans Past |
|  | With No |  |  |  |  |  | Due Over |
|  | Allowance |  |  |  |  |  | 89 Days |
|  | for Credit Loss |  |  | Nonaccrual |  |  | Still Accruing |
Consumer Real Estate |  | $ | 1,637 |  |  | $ | 2,369 |  |  | $ | - |
Agricultural Real Estate |  |  | 130 |  |  |  | 130 |  |  |  | - |
Agricultural |  |  | 90 |  |  |  | 90 |  |  |  | - |
Commercial Real Estate |  |  | 360 |  |  |  | 360 |  |  |  | - |
Commercial & Industrial |  |  | 57 |  |  |  | 57 |  |  |  | - |
Consumer |  |  | 118 |  |  |  | 118 |  |  |  | - |
Total |  | $ | 2,392 |  |  | $ | 3,124 |  |  | $ | - |
|  | (In Thousands) |
|  | December 31, 2023 |
|  | Nonaccrual |  |  |  |  |  | Loans Past |
|  | With No |  |  |  |  |  | Due Over |
|  | Allowance |  |  |  |  |  | 89 Days |
|  | for Credit Loss |  |  | Nonaccrual |  |  | Still Accruing |
Consumer Real Estate |  | $ | 1,006 |  |  | $ | 1,190 |  |  | $ | - |
Agricultural Real Estate |  |  | 15,949 |  |  |  | 15,949 |  |  |  | - |
Agricultural |  |  | 4,671 |  |  |  | 4,671 |  |  |  | - |
Commercial Real Estate |  |  | 254 |  |  |  | 254 |  |  |  | - |
Commercial & Industrial |  |  | 198 |  |  |  | 198 |  |  |  | - |
Consumer |  |  | 91 |  |  |  | 91 |  |  |  | - |
Total |  | $ | 22,169 |  |  | $ | 22,353 |  |  | $ | - |
Interest income on nonaccrual loans, recognized on a cash basis, was $93 thousand and $338 thousand for the years ended December 31, 2024 and 2023, respectively. The Bank uses a nine tier risk rating system to grade its loans. The grade of a loan may change during the life of the loan. The risk ratings are described as follows. 1. Zero (0) Unclassified. Any loan which has not been assigned a classification. 2. One (1) Excellent. Credit to premier customers having the highest credit rating based on an extremely strong financial condition, which compares favorably with industry standards (upper quartile of RMA ratios). Financial statements indicate a sound earnings and financial ratio trend for several years with satisfactory profit margins and excellent liquidity exhibited. Prime credits may also be borrowers with loans fully secured by highly liquid collateral such as traded stocks, bonds, certificates of deposit, savings account, etc. No credit or collateral exceptions exist, and the loan adheres to The Bank's loan policy in every respect. Financing alternatives would be readily available and would qualify for unsecured credit. This rate is summarized by high liquidity, minimum risk, strong ratios, and low handling costs. 3. Two (2) Good. Desirable loans of somewhat less stature than rate 1, but with strong financial statements. Loan supported by financial statements containing strong balance sheets and a history of profitability. Probability of serious financial deterioration is unlikely. Possessing a sound repayment source (and a secondary source), which would allow repayment in a reasonable period of time. Individual loans backed by liquid personal assets, established history and unquestionable character. 4. Three (3) Satisfactory. Satisfactory loans of average or slightly above average risk – having some deficiency or vulnerability to changing economic conditions, but still fully collectible. Projects should normally demonstrate acceptable debt service coverage. There may be some weakness but with offsetting features of other support readily available. Loans that are meeting the terms of repayment. Loans may be rated 3 when there is no recent information on which to base a current risk evaluation and the following conditions apply: At inception, the loan was properly underwritten and did not possess an unwarranted level of credit risk; a. At inception, the loan was secured with collateral possessing a loan-to-value adequate to protect The Bank from loss; b. The loan exhibited two or more years of satisfactory repayment with a reasonable reduction of the principal balance; c. During the period that the loan has been outstanding, there has been no evidence of any credit weakness. Some examples of weakness include slow payment, lack of cooperation by the borrower, breach of loan covenants, or the business is in an industry which is known to be experiencing problems. If any of these credit weaknesses is observed, a lower risk rating is warranted. 5. Four (4) Satisfactory / Monitored. A “4” (Satisfactory/Monitored) risk rating may be established for a loan considered satisfactory but which is of average credit risk due to financial weakness or uncertainty. The loans warrant a higher than average level of monitoring to ensure that weaknesses do not advance. The level of risk in Satisfactory/Monitored classification is considered acceptable and within normal underwriting guidelines, so long as the loan is given management supervision. 6. Five (5) Special Mention. Loans that possess some credit deficiency or potential weakness which deserve close attention, but which do not yet warrant substandard classification. Such loans pose unwarranted financial risk that, if not corrected, could weaken the loan and increase risk in the future. The key distinctions of a 5 (Special Mention) classification are that (1) it is indicative of an unwarranted level of risk, and (2) weaknesses are considered “potential” versus “defined” impairments to the primary source of loan repayment and collateral. 7. Six (6) Substandard. One or more of the following characteristics may be exhibited in loans classified substandard: a. Loans which possess a defined credit weakness and the likelihood that a loan will be paid from the primary source are uncertain. Financial deterioration is underway and very close attention is warranted to ensure that the loan is collected without loss. b. Loans are inadequately protected by the current net worth and paying capacity of the borrower. c. The primary source of repayment is weakened, and The Bank is forced to rely on a secondary source of repayment such as collateral liquidation or guarantees. d. Loans are characterized by the distinct possibility that The Bank will sustain some loss if deficiencies are not corrected. e. Unusual courses of action are needed to maintain a high probability of repayment. f. The borrower is not generating enough cash flow to repay loan principal; however, continues to make interest payments. g. The lender is forced into a subordinate position or unsecured collateral position due to flaws in documentation. h. Loans have been restructured so that payment schedules, terms and collateral represent concessions to the borrower when compared to the normal loan terms. i. The lender is seriously contemplating foreclosure or legal action due to the apparent deterioration in the loan j. There is significant deterioration in the market conditions and the borrower is highly vulnerable to these conditions. 8. Seven (7) Doubtful. One or more of the following characteristics may be exhibited in loans classified Doubtful: a. Loans have all of the weaknesses of those classified as Substandard. Additionally, however, these weaknesses make collection or liquidation in full based on existing conditions improbable. b. The primary source of repayment is gone, and there is considerable doubt as to the quality of the secondary source of repayment. c. The possibility of loss is high, but, because of certain important pending factors which may strengthen the loan, loss classification is deferred until its exact status is known. A Doubtful classification is established deferring the realization of the loss. 9. Eight (8) Loss. Loans are considered uncollectable and of such little value that continuing to carry them as assets on the institution’s financial statements is not feasible. Loans will be classified Loss when it is neither practical nor desirable to defer writing off or reserving all or a portion of a basically worthless asset, even though partial recovery may be possible at some time in the future. The following table reflects the risk category of loans by portfolio class based on the most recent analysis performed as of December 31, 2024 and 2023 based on year of origination:
| (In Thousands) |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Term |  |  | Amortized |  |  | Converted |  |  | Grand |
| 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Total |  |  | Cost Basis |  |  | to Term |  |  | Total |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 40,257 |  |  | $ | 64,316 |  |  | $ | 79,503 |  |  | $ | 89,800 |  |  | $ | 74,996 |  |  | $ | 106,007 |  |  | $ | 454,879 |  |  | $ | 61,097 |  |  | $ | 237 |  |  | $ | 516,213 |
Special Mention (5) |  | - |  |  |  | - |  |  |  | 37 |  |  |  | 551 |  |  |  | - |  |  |  | 119 |  |  |  | 707 |  |  |  | 19 |  |  |  | - |  |  |  | 726 |
Substandard (6) |  | 143 |  |  |  | 239 |  |  |  | 529 |  |  |  | 786 |  |  |  | 465 |  |  |  | 1,040 |  |  |  | 3,202 |  |  |  | 236 |  |  |  | 15 |  |  |  | 3,453 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Consumer Real Estate | $ | 40,400 |  |  | $ | 64,555 |  |  | $ | 80,069 |  |  | $ | 91,137 |  |  | $ | 75,461 |  |  | $ | 107,166 |  |  | $ | 458,788 |  |  | $ | 61,352 |  |  | $ | 252 |  |  | $ | 520,392 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 13 |  |  | $ | 13 |  |  | $ | - |  |  | $ | - |  |  | $ | 13 |
Agricultural Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 23,817 |  |  | $ | 28,088 |  |  | $ | 34,469 |  |  | $ | 22,983 |  |  | $ | 23,639 |  |  | $ | 76,964 |  |  | $ | 209,960 |  |  | $ | 92 |  |  | $ | - |  |  | $ | 210,052 |
Special Mention (5) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 13 |  |  |  | 13 |  |  |  | - |  |  |  | - |  |  |  | 13 |
Substandard (6) |  | 5,696 |  |  |  | - |  |  |  | 371 |  |  |  | - |  |  |  | - |  |  |  | 5 |  |  |  | 6,072 |  |  |  | - |  |  |  | - |  |  |  | 6,072 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Agricultural Real Estate | $ | 29,513 |  |  | $ | 28,088 |  |  | $ | 34,840 |  |  | $ | 22,983 |  |  | $ | 23,639 |  |  | $ | 76,982 |  |  | $ | 216,045 |  |  | $ | 92 |  |  | $ | - |  |  | $ | 216,137 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 14,915 |  |  | $ | 10,500 |  |  | $ | 14,381 |  |  | $ | 5,616 |  |  | $ | 3,204 |  |  | $ | 3,911 |  |  | $ | 52,527 |  |  | $ | 98,283 |  |  | $ | - |  |  | $ | 150,810 |
Special Mention (5) |  | - |  |  |  | 13 |  |  |  | - |  |  |  | 8 |  |  |  | - |  |  |  | - |  |  |  | 21 |  |  |  | 30 |  |  |  | - |  |  |  | 51 |
Substandard (6) |  | - |  |  |  | 21 |  |  |  | - |  |  |  | - |  |  |  | 29 |  |  |  | - |  |  |  | 50 |  |  |  | 1,470 |  |  |  | - |  |  |  | 1,520 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Agricultural | $ | 14,915 |  |  | $ | 10,534 |  |  | $ | 14,381 |  |  | $ | 5,624 |  |  | $ | 3,233 |  |  | $ | 3,911 |  |  | $ | 52,598 |  |  | $ | 99,783 |  |  | $ | - |  |  | $ | 152,381 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
| (In Thousands) |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Term |  |  | Amortized |  |  | Converted |  |  | Grand |
| 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Total |  |  | Cost Basis |  |  | to Term |  |  | Total |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 128,608 |  |  | $ | 200,192 |  |  | $ | 413,106 |  |  | $ | 218,309 |  |  | $ | 110,435 |  |  | $ | 188,239 |  |  | $ | 1,258,889 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,258,889 |
Special Mention (5) |  | - |  |  |  | - |  |  |  | 12,590 |  |  |  | - |  |  |  | 1,352 |  |  |  | 753 |  |  |  | 14,695 |  |  |  | - |  |  |  | - |  |  |  | 14,695 |
Substandard (6) |  | - |  |  |  | 34,299 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 578 |  |  |  | 34,877 |  |  |  | - |  |  |  | - |  |  |  | 34,877 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial Real Estate | $ | 128,608 |  |  | $ | 234,491 |  |  | $ | 425,696 |  |  | $ | 218,309 |  |  | $ | 111,787 |  |  | $ | 189,570 |  |  | $ | 1,308,461 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,308,461 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 15 |  |  | $ | 15 |  |  | $ | - |  |  | $ | - |  |  | $ | 15 |
Commercial & Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 31,933 |  |  | $ | 54,581 |  |  | $ | 39,665 |  |  | $ | 15,047 |  |  | $ | 13,480 |  |  | $ | 1,294 |  |  | $ | 156,000 |  |  | $ | 113,446 |  |  | $ | 222 |  |  | $ | 269,668 |
Special Mention (5) |  | - |  |  |  | 137 |  |  |  | - |  |  |  | 188 |  |  |  | 26 |  |  |  | 416 |  |  |  | 767 |  |  |  | 459 |  |  |  | - |  |  |  | 1,226 |
Substandard (6) |  | 39 |  |  |  | 348 |  |  |  | 29 |  |  |  | - |  |  |  | - |  |  |  | 28 |  |  |  | 444 |  |  |  | 3,481 |  |  |  | - |  |  |  | 3,925 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Commercial & Industrial | $ | 31,972 |  |  | $ | 55,066 |  |  | $ | 39,694 |  |  | $ | 15,235 |  |  | $ | 13,506 |  |  | $ | 1,738 |  |  | $ | 157,211 |  |  | $ | 117,386 |  |  | $ | 222 |  |  | $ | 274,819 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  |  |  |  | $ | 101 |  |  | $ | - |  |  | $ | 101 |  |  | $ | - |  |  | $ | 5 |  |  | $ | 106 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 15,829 |  |  | $ | 5,068 |  |  | $ | 4,081 |  |  | $ | 24,978 |  |  | $ | - |  |  | $ | - |  |  | $ | 24,978 |
Special Mention (5) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard (6) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Other | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 15,829 |  |  | $ | 5,068 |  |  | $ | 4,081 |  |  | $ | 24,978 |  |  | $ | - |  |  | $ | - |  |  | $ | 24,978 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
| (In Thousands) |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Term |  |  | Amortized |  |  | Converted |  |  | Grand |
| 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Total |  |  | Cost Basis |  |  | to Term |  |  | Total |
Consumer Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 77,298 |  |  | $ | 88,695 |  |  | $ | 90,139 |  |  | $ | 82,680 |  |  | $ | 32,302 |  |  | $ | 94,294 |  |  | $ | 465,408 |  |  | $ | 52,904 |  |  | $ | - |  |  | $ | 518,312 |
Special Mention (5) |  | 1,228 |  |  |  | 40 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 134 |  |  |  | 1,402 |  |  |  | - |  |  |  | - |  |  |  | 1,402 |
Substandard (6) |  | - |  |  |  | 261 |  |  |  | 558 |  |  |  | 163 |  |  |  | 246 |  |  |  | 952 |  |  |  | 2,180 |  |  |  | 14 |  |  |  | - |  |  |  | 2,194 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Consumer Real Estate | $ | 78,526 |  |  | $ | 88,996 |  |  | $ | 90,697 |  |  | $ | 82,843 |  |  | $ | 32,548 |  |  | $ | 95,380 |  |  | $ | 468,990 |  |  | $ | 52,918 |  |  | $ | - |  |  | $ | 521,908 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Agricultural Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 30,504 |  |  | $ | 37,199 |  |  | $ | 25,168 |  |  | $ | 25,874 |  |  | $ | 18,456 |  |  | $ | 68,651 |  |  | $ | 205,852 |  |  | $ | 97 |  |  | $ | - |  |  | $ | 205,949 |
Special Mention (5) |  | - |  |  |  | 861 |  |  |  | 14 |  |  |  | - |  |  |  | 149 |  |  |  | 359 |  |  |  | 1,383 |  |  |  | - |  |  |  | - |  |  |  | 1,383 |
Substandard (6) |  | - |  |  |  | - |  |  |  | 12,196 |  |  |  | 186 |  |  |  | 259 |  |  |  | 3,506 |  |  |  | 16,147 |  |  |  | - |  |  |  | - |  |  |  | 16,147 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Agricultural Real Estate | $ | 30,504 |  |  | $ | 38,060 |  |  | $ | 37,378 |  |  | $ | 26,060 |  |  | $ | 18,864 |  |  | $ | 72,516 |  |  | $ | 223,382 |  |  | $ | 97 |  |  | $ | - |  |  | $ | 223,479 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 17,787 |  |  | $ | 20,330 |  |  | $ | 8,356 |  |  | $ | 4,476 |  |  | $ | 3,856 |  |  | $ | 1,880 |  |  | $ | 56,685 |  |  | $ | 69,824 |  |  | $ | - |  |  | $ | 126,509 |
Special Mention (5) |  | 38 |  |  |  | 621 |  |  |  | 112 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 771 |  |  |  | 330 |  |  |  | - |  |  |  | 1,101 |
Substandard (6) |  | 514 |  |  |  | 634 |  |  |  | 2,009 |  |  |  | 498 |  |  |  | - |  |  |  | - |  |  |  | 3,655 |  |  |  | 1,498 |  |  |  | - |  |  |  | 5,153 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Agricultural | $ | 18,339 |  |  | $ | 21,585 |  |  | $ | 10,477 |  |  | $ | 4,974 |  |  | $ | 3,856 |  |  | $ | 1,880 |  |  | $ | 61,111 |  |  | $ | 71,652 |  |  | $ | - |  |  | $ | 132,763 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
| (In Thousands) |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Term |  |  | Amortized |  |  | Converted |  |  | Grand |
| 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Total |  |  | Cost Basis |  |  | to Term |  |  | Total |
Commercial Real Estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 224,232 |  |  | $ | 438,716 |  |  | $ | 245,273 |  |  | $ | 122,656 |  |  | $ | 136,225 |  |  | $ | 99,378 |  |  | $ | 1,266,480 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,266,480 |
Special Mention (5) |  | 34,864 |  |  |  | 9,100 |  |  |  | - |  |  |  | 10,793 |  |  |  | 626 |  |  |  | 12,342 |  |  |  | 67,725 |  |  |  | - |  |  |  | - |  |  |  | 67,725 |
Substandard (6) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 795 |  |  |  | 795 |  |  |  | - |  |  |  | - |  |  |  | 795 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | 75 |  |  |  | - |  |  |  | - |  |  |  | 75 |  |  |  | - |  |  |  | - |  |  |  | 75 |
Total Commercial Real Estate | $ | 259,096 |  |  | $ | 447,816 |  |  | $ | 245,273 |  |  | $ | 133,524 |  |  | $ | 136,851 |  |  | $ | 112,515 |  |  | $ | 1,335,075 |  |  | $ | - |  |  | $ | - |  |  | $ | 1,335,075 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
Commercial & Industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 56,224 |  |  | $ | 51,663 |  |  | $ | 24,876 |  |  | $ | 20,071 |  |  | $ | 2,142 |  |  | $ | 932 |  |  | $ | 155,908 |  |  | $ | 90,018 |  |  | $ | - |  |  | $ | 245,926 |
Special Mention (5) |  | 716 |  |  |  | 69 |  |  |  | 211 |  |  |  | 146 |  |  |  | 437 |  |  |  | 357 |  |  |  | 1,936 |  |  |  | 6,016 |  |  |  | - |  |  |  | 7,952 |
Substandard (6) |  | 74 |  |  |  | 454 |  |  |  | - |  |  |  | - |  |  |  | 31 |  |  |  | 17 |  |  |  | 576 |  |  |  | 122 |  |  |  | - |  |  |  | 698 |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | 182 |  |  |  | - |  |  |  | - |  |  |  | 182 |  |  |  | - |  |  |  | - |  |  |  | 182 |
Total Commercial & Industrial | $ | 57,014 |  |  | $ | 52,186 |  |  | $ | 25,087 |  |  | $ | 20,399 |  |  | $ | 2,610 |  |  | $ | 1,306 |  |  | $ | 158,602 |  |  | $ | 96,156 |  |  | $ | - |  |  | $ | 254,758 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 565 |  |  | $ | - |  |  | $ | - |  |  | $ | 565 |  |  | $ | - |  |  | $ | - |  |  | $ | 565 |
Other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Risk Rating |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass (1-4) | $ | 2,810 |  |  | $ | - |  |  | $ | 16,761 |  |  | $ | 5,790 |  |  | $ | 445 |  |  | $ | 4,330 |  |  | $ | 30,136 |  |  | $ | - |  |  | $ | - |  |  | $ | 30,136 |
Special Mention (5) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Substandard (6) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Doubtful (7) |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total Other | $ | 2,810 |  |  | $ | - |  |  | $ | 16,761 |  |  | $ | 5,790 |  |  | $ | 445 |  |  | $ | 4,330 |  |  | $ | 30,136 |  |  | $ | - |  |  | $ | - |  |  | $ | 30,136 |
Gross charge-offs YTD | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | - |
The following tables presents payment performance as of December 31, 2024 and 2023 by year of origination:
| (In Thousands) |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Term |  |  | Amortized |  |  | Grand |
| 2024 |  |  | 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | Prior |  |  | Total |  |  | Cost Basis |  |  | Total |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 13,437 |  |  | $ | 13,521 |  |  | $ | 27,264 |  |  | $ | 5,917 |  |  | $ | 2,310 |  |  | $ | 582 |  |  | $ | 63,031 |  |  | $ | 477 |  |  | $ | 63,508 |
Nonperforming |  | 40 |  |  |  | - |  |  |  | 40 |  |  |  | 35 |  |  |  | 4 |  |  |  | - |  |  |  | 119 |  |  |  | - |  |  |  | 119 |
Total Consumer | $ | 13,477 |  |  | $ | 13,521 |  |  | $ | 27,304 |  |  | $ | 5,952 |  |  | $ | 2,314 |  |  | $ | 582 |  |  | $ | 63,150 |  |  | $ | 477 |  |  | $ | 63,627 |
Gross charge-offs YTD | $ | 201 |  |  | $ | 69 |  |  | $ | 62 |  |  | $ | 14 |  |  | $ | - |  |  | $ | - |  |  | $ | 346 |  |  | $ | - |  |  | $ | 346 |
| (In Thousands) |
| Term Loans Amortized Cost Basis by Origination Year |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Revolving |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Term |  |  | Amortized |  |  | Grand |
| 2023 |  |  | 2022 |  |  | 2021 |  |  | 2020 |  |  | 2019 |  |  | Prior |  |  | Total |  |  | Cost Basis |  |  | Total |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payment Performance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Performing | $ | 21,511 |  |  | $ | 40,729 |  |  | $ | 10,666 |  |  | $ | 5,006 |  |  | $ | 1,825 |  |  | $ | 480 |  |  | $ | 80,217 |  |  | $ | 44 |  |  | $ | 80,261 |
Nonperforming |  | 26 |  |  |  | 58 |  |  |  | - |  |  |  | 6 |  |  |  | - |  |  |  | 2 |  |  |  | 92 |  |  |  | - |  |  |  | 92 |
Total Consumer | $ | 21,537 |  |  | $ | 40,787 |  |  | $ | 10,666 |  |  | $ | 5,012 |  |  | $ | 1,825 |  |  | $ | 482 |  |  | $ | 80,309 |  |  | $ | 44 |  |  | $ | 80,353 |
Gross charge-offs YTD | $ | 236 |  |  | $ | 51 |  |  | $ | 100 |  |  | $ | 38 |  |  | $ | - |  |  | $ | - |  |  | $ | 425 |  |  | $ | - |  |  | $ | 425 |
The following table presents collateral-dependent loans grouped by collateral as of December 31, 2024 and 2023:
|  | (In Thousands) |
|  | Collateral |
|  | Dependent Loans |
|  | December 31, 2024 |  |  | December 31, 2023 |
Consumer Real Estate |  | $ | 2,384 |  |  | $ | 1,518 |
Agricultural Real Estate |  |  | 125 |  |  |  | 15,888 |
Agricultural |  |  | 50 |  |  |  | 4,998 |
Commercial Real Estate |  |  | 360 |  |  |  | 255 |
Commercial & Industrial |  |  | 28 |  |  |  | 17 |
Consumer |  |  | 41 |  |  |  | - |
Total |  | $ | 2,988 |  |  | $ | 22,676 |
Information about impaired loans as of and for the year ended December 31, 2022 is as follows:
|  | (In Thousands) |
|  | 2022 |
Average investment in impaired loans |  | $ | 10,710 |
Interest income recognized on impaired loans |  | $ | 361 |
Interest income recognized on a cash basis on impaired loans |  | $ | 97 |
The Bank had approximately $3.6 million of its impaired loans classified as modifications to borrowers experiencing financial difficulty as of December 31, 2022. Under ASC 310-40, TDRs were eliminated from being classified as such for 2023 and were no longer be reported as such. Modification programs focused on payment pattern changes and/or modified maturity dates with most receiving a combination of the two concessions. The modifications did no t result in the contractual forgiveness of principal. No modifications to borrowers experiencing financial difficulty were made during 2024. During 2023, one new loan was considered a modification to a borrower experiencing financial difficulty. The modification consisted of refinancing at a higher balance to a borrower experiencing financial difficulty that would not have otherwise been granted to a borrower. The amount of new money increase to the loan balance was $411 thousand. This loan was subsequently paid off during 2023.
December 31, 2024 |  |  |  |  |  |  |  |  |  |  | December 31, 2023 |  |  |  |  |  |  |  |  |
|  |  |  |  | (In Thousands) |  |  |  |  |  |  |  | (In Thousands) |
Modified Loans for Borrowers Experiencing Financial Difficulty |  | Number of Contracts Modified in the Last 12 Months |  |  | Pre- Modification Outstanding Recorded Investment |  |  | Post- Modification Outstanding Recorded Investment |  |  | Troubled Debt Restructurings |  | Number of Contracts Modified in the Last 12 Months |  |  | Pre- Modification Outstanding Recorded Investment |  |  | Post- Modification Outstanding Recorded Investment |
Commercial Real Estate |  |  | - |  |  | $ | - |  |  | $ | - |  |  | Commercial Real Estate |  |  | 1 |  |  | $ | 1,024 |  |  | $ | 1,024 |
For the years ended December 31, 2024 and 2023, there were no modifications to borrowers experiencing financial difficulty that subsequently defaulted after modification. The Bank applies a measurement incorporating the present value of expected future cash flows discounted at the loan's effective rate of interest or the fair value of collateral if the loan is collateral dependent. To determine the fair value of collateral, collateral asset values securing an impaired loan are periodically evaluated. Maximum time of re-evaluation is every 12 months for chattels and titled vehicles and every two years for real estate. In this process, third party evaluations are obtained and heavily relied upon. Until such time that updated appraisals are received, the Bank may discount the collateral value used. The Bank uses the following guidelines as stated in policy to determine when to realize a charge-off, whether a partial or full loan balance. A charge down in whole or in part is realized when unsecured consumer loans, credit card credits and overdraft lines of credit reach 90 days delinquency. At 90 days delinquent, secured consumer loans are charged down to the value of the collateral, if repossession of the collateral is assured and/or in the process of repossession. Consumer mortgage loan deficiencies are charged down upon the sale of the collateral or sooner upon the recognition of collateral deficiency. A broker's price opinion or appraisal will be completed on all home loans in litigation and any deficiency will be charged off before reaching 150 days delinquent. Commercial and agricultural credits are charged down/allocated at 120 days delinquency, unless an established and approved work-out plan is in place or litigation of the credit will likely result in recovery of the loan balance. Upon notification of bankruptcy, unsecured debt is charged off. Additional charge-off may be realized as further unsecured positions are recognized. As of December 31, 2024, the Company had no foreclosed residential real estate property obtained by physical possession and $890 thousand of consumer real estate loans secured by residential real estate properties for which foreclosure proceedings were in process according to local jurisdictions. This compares to the Company having no foreclosed residential real estate property obtained by physical possession and $679 thousand of consumer real estate loans secured by residential real estate properties for which foreclosure proceedings were in process according to local jurisdictions as of December 31, 2023. On January 1, 2023, the Company adopted Accounting Standards Update ("ASU") No. 2016-13 - "Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments" and implemented the current expected credit losses accounting standard. As a result, the Company recorded a one-time adjustment from equity into the allowance for credit losses and unfunded commitment liability in the amount of $4.5 million, or $3.4 million, net of tax. Allowance for Credit Losses (ACL) has a direct impact on the provision expense. An increase in the ACL is funded through recoveries and provision expense. The Company segregates its allowance into two reserves: The Allowance for Credit Losses (ACL) and the Allowance for Unfunded Loan Commitments and Letters of Credit (AULC). When combined, these reserves constitute the total Current Expected Credit Losses (CECL). Additional analysis related to the allowance for credit losses as of December 31, 2024 and 2023 is as follows:
|  | (In Thousands) |
|  | Consumer Real Estate |  |  | Agricultural Real Estate |  |  | Agricultural |  |  | Commercial Real Estate |  |  | Commercial and Industrial |  |  | Consumer |  |  | Total |
2024 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
ALLOWANCE FOR CREDIT LOSSES |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,581 |  |  | $ | 312 |  |  | $ | 336 |  |  | $ | 17,400 |  |  | $ | 2,093 |  |  | $ | 1,302 |  |  | $ | 25,024 |
Provision for (recovery of) credit losses - loans |  |  | (31 | ) |  |  | 583 |  |  |  | (52 | ) |  |  | (834 | ) |  |  | 1,411 |  |  |  | (133 | ) |  |  | 944 |
Charge-offs |  |  | (13 | ) |  |  | - |  |  |  | - |  |  |  | (15 | ) |  |  | (106 | ) |  |  | (346 | ) |  |  | (480 | )
Recoveries |  |  | 6 |  |  |  | - |  |  |  | 1 |  |  |  | 9 |  |  |  | 133 |  |  |  | 189 |  |  |  | 338 |
Ending Balance |  | $ | 3,543 |  |  | $ | 895 |  |  | $ | 285 |  |  | $ | 16,560 |  |  | $ | 3,531 |  |  | $ | 1,012 |  |  | $ | 25,826 |
|  | (In Thousands) |
|  | Unfunded Loan Commitment & Letters of Credit |
2024 |  |  |
ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT |  |  |
Beginning balance |  | $ | 2,212 |
Provision for (recovery of) credit losses - off balance sheet credit exposures |  |  | (671 | )
Charge-offs |  |  | - |
Recoveries |  |  | - |
Ending Balance |  | $ | 1,541 |
|  | (In Thousands) |
|  | Consumer Real Estate |  |  | Agricultural Real Estate |  |  | Agricultural |  |  | Commercial Real Estate |  |  | Commercial and Industrial |  |  | Consumer |  |  | Total |
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 (recovery of) credit losses - loans |  |  | (326 | ) |  |  | 24 |  |  |  | 225 |  |  |  | 1,967 |  |  |  | (643 | ) |  |  | 451 |  |  |  | 1,698 |
Charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (565 | ) |  |  | (425 | ) |  |  | (990 | )
Recoveries |  |  | 35 |  |  |  | 105 |  |  |  | 10 |  |  |  | 8 |  |  |  | 84 |  |  |  | 197 |  |  |  | 439 |
Ending Balance |  | $ | 3,581 |  |  | $ | 312 |  |  | $ | 336 |  |  | $ | 17,400 |  |  | $ | 2,093 |  |  | $ | 1,302 |  |  | $ | 25,024 |
|  | (In Thousands) |
|  | Unfunded Loan Commitment & Letters of Credit |
2023 |  |  |
ALLOWANCE FOR UNFUNDED LOAN COMMITMENTS AND LETTERS OF CREDIT |  |  |
Beginning balance |  | $ | 1,262 |
Adoption of ASU 2016-13 |  |  | 904 |
Provision for (recovery of) credit losses - off balance sheet credit exposures |  |  | 46 |
Charge-offs |  |  | - |
Recoveries |  |  | - |
Ending Balance |  | $ | 2,212 |

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- Definition The entire disclosure for claims held for amounts due to entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 310 -SubTopic 10 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/310-10/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 835 -SubTopic 30 -Name Accounting Standards Codification -Section 45 -Paragraph 2 -Publisher FASB -URI https://asc.fasb.org/1943274/2147482925/835-30-45-2 + Details
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