Loans

6 Months Ended

Jun. 30, 2024

Note 5 – Loans

The Company originates commercial, industrial, agricultural, residential, and consumer loans primarily to customers throughout north central, central and south central Pennsylvania, southern New York and Wilmington and Dover, Delaware. The HVBC acquisition expanded our lending market further into southeast Pennsylvania, including Montgomery, Bucks and Philadelphia Counties as well as Burlington County, New Jersey. Although the Company had a diversified loan portfolio at June 30, 2024 and December 31, 2023, a substantial portion of its debtors’ ability to honor their contracts is dependent on the economic conditions within these regions. The following table summarizes the primary segments of the loan portfolio and how those segments are analyzed within the allowance for credit losses - loans as of June 30, 2024 and December 31, 2023 (in thousands):

	June 30, 2024			December 31, 2023
Real estate loans:
Residential	$	354,588		$	359,990
Commercial		1,110,269			1,092,887
Agricultural		327,057			314,802
Construction		180,157			195,826
Consumer		70,542			61,316
Other commercial loans		130,851			136,168
Other agricultural loans		26,247			30,673
State and political subdivision loans		56,005			57,174
Total		2,255,716			2,248,836
Allowance for credit losses - loans		(22,797	)		(21,153	)
Net loans	$	2,232,919		$	2,227,683

Allowance for Credit Losses, effective January 1, 2023

As discussed in Note 1 “Basis of Presentation”, the Company adopted CECL effective January 1, 2023. CECL requires estimated credit losses on loans to be determined based on an expected life of loan model, as compared to an incurred loss model (in effect for periods prior to 2023). Accordingly, allowance for credit losses disclosures subsequent to January 1, 2023 are not always comparable to prior dates. In addition, certain new disclosures required under CECL are not applicable to prior periods. See Note 1, “Basis of Presentation”, for a summary of the impact of adopting CECL on January 1, 2023.

Under CECL, loans individually evaluated for impairment consist of non-accrual commercial loans and recently modified loans that were experiencing financial difficulty at the time of the modification.

The allowance for credit losses related to loans consists of loans evaluated collectively and individually for expected credit losses. It represents an estimate of credit losses over the expected life of the loans as of the balance sheet date and is recorded as a reduction to net loans. The allowance for credit losses for off-balance sheet credit exposures includes estimated losses on unfunded loan commitments, letters of credit and other off-balance sheet credit exposures. The total allowance for credit losses is increased by charges to expense, through the provision for credit losses, and decreased by charge-offs, net of recoveries.

The following table presents the components of the allowance for credit losses as of June 30, 2024 and December 31, 2023 (in thousands):

	June 30, 2024		December 31, 2023
Allowance for Credit Losses - Loans	$	22,797	$	21,153
Allowance for Credit Losses - Off-Balance Sheet credit Exposure		1,066		1,265
Total allowance for credit losses	$	23,863	$	22,418

The following table presents the activity in the allowance for credit losses for the three and six months ended June 30, 2024 and 2023 (in thousands):

	Allowance for Credit Losses - Loans			Allowance for Credit Losses - Off-Balance Sheet credit Exposure			Total
Balance at March 31, 2024	$	21,598		$	938		$	22,536
Loans charge-off		(682	)		-			(682	)
Recoveries of loans previously charged-off		7			-			7
Net loans charged-off		(675	)		-			(675	)
Provision for credit losses		1,874			128			2,002
Balance at June 30, 2024	$	22,797		$	1,066		$	23,863

Balance at December 31, 2023	$	21,153		$	1,265		$	22,418
Loans charge-off		(1,356	)		-			(1,356	)
Recoveries of loans previously charged-off		14			-			14
Net loans charged-off		(1,342	)		-			(1,342	)
Provision for credit losses		2,986			(199	)		2,787
Balance at June 30, 2024	$	22,797		$	1,066		$	23,863

	Allowance for Credit Losses - Loans			Allowance for Credit Losses - Off-Balance Sheet credit Exposure		Total
Balance at March 31, 2023	$	15,250		$	1,229	$	16,479
Allowance for credit loss on PCD acquired loans		1,689			-		1,689
Loans charge-off		(4	)		-		(4	)
Recoveries of loans previously charged-off		26			-		26
Net loans charged-off		22			-		22
Provision for credit losses - acquisition day 1 non-PCD		4,591			-		4,591
Provision for credit losses		100			162		262
Balance at June 30, 2023	$	21,652		$	1,391	$	23,043

Balance at December 31, 2022	$	18,552		$	165	$	18,717
Impact of adopting CECL		(3,300	)		1,064		(2,236	)
Allowance for credit loss on PCD acquired loans		1,689			-		1,689
Loans charge-off		(11	)		-		(11	)
Recoveries of loans previously charged-off		31			-		31
Net loans charged-off		20			-		20
Provision for credit losses - acquisition day 1 non-PCD		4,591			-		4,591
Provision for credit losses		100			162		262
Balance at June 30, 2023	$	21,652		$	1,391	$	23,043

The following tables presents the activity in the allowance for credit losses – loans, by portfolio segment, for the three and six months ended June 30, 2024 and 2023 (in thousands):

	For the three months ended June 30, 2024
	Balance at March 31, 2024		Charge-offs			Recoveries		Provision			Balance at June 30, 2024
Real estate loans:
Residential	$	2,347	$	-		$	-	$	8		$	2,355
Commercial		9,741		-			-		542			10,283
Agricultural		3,672		-			-		98			3,770
Construction		1,595		-			-		32			1,627
Consumer		1,266		(7	)		5		(53	)		1,211
Other commercial loans		2,680		(675	)		2		1,249			3,256
Other agricultural loans		174		-			-		32			206
State and political subdivision loans		65		-			-		(2	)		63
Unallocated		58		-			-		(32	)		26
Total	$	21,598	$	(682	)	$	7	$	1,874		$	22,797

	For the six months ended June 30, 2024
	Balance at December 31, 2023		Charge-offs			Recoveries		Provision			Balance at June 30, 2024
Real estate loans:
Residential	$	2,354	$	-		$	-	$	1		$	2,355
Commercial		9,178		-			-		1,105			10,283
Agricultural		3,264		-			-		506			3,770
Construction		1,950		-			-		(323	)		1,627
Consumer		1,496		(37	)		10		(258	)		1,211
Other commercial loans		2,229		(1,319	)		4		2,342			3,256
Other agricultural loans		270		-			-		(64	)		206
State and political subdivision loans		45		-			-		18			63
Unallocated		367		-			-		(341	)		26
Total	$	21,153	$	(1,356	)	$	14	$	2,986		$	22,797

	For the three months ended June 30, 2023
	Balance at March 31, 2023		Allowance for credit loss on PCD acquired loans		Charge-offs			Recoveries		Provision			Balance at June 30, 2023
Real estate loans:
Residential	$	1,195	$	108	$	(1	)	$	-	$	1,373		$	2,675
Commercial		6,747		39		-			-		2,488			9,274
Agricultural		3,409		37		-			-		133			3,579
Construction		851				-			-		816			1,667
Consumer		1,220		677		(3	)		23		(658	)		1,259
Other commercial loans		712		828		-			3		934			2,477
Other agricultural loans		250		-		-			-		18			268
State and political subdivision loans		42		-		-			-		10			52
Unallocated		824		-		-			-		(423	)		401
Total	$	15,250	$	1,689	$	(4	)	$	26	$	4,691		$	21,652

	For the six months ended June 30, 2023
	Balance at December 31, 2022		Impact of adopting CECL			Allowance for credit loss on PCD acquired loans		Charge-offs			Recoveries		Provision			Balance at June 30, 2023
Real estate loans:
Residential	$	1,056	$	79		$	108	$	(1	)	$	-	$	1,433		$	2,675
Commercial		10,120		(3,070	)		39		-			-		2,185			9,274
Agricultural		4,589		(1,145	)		37		-			-		98			3,579
Construction		801		(103	)				-			-		969			1,667
Consumer		135		1,040			677		(10	)		27		(610	)		1,259
Other commercial loans		1,040		(328	)		828		-			4		933			2,477
Other agricultural loans		489		(219	)		-		-			-		(2	)		268
State and political subdivision loans		322		(280	)		-		-			-		10			52
Unallocated		-		726			-		-			-		(325	)		401
Total	$	18,552	$	(3,300	)	$	1,689	$	(11	)	$	31	$	4,691		$	21,652

The following table presents the allowance for credit losses – loans and amortized cost basis of loans under CECL methodology as of June 30, 2024 and December 31, 2023:

	Allowance for Credit Losses - Loans						Loans
June 30, 2024	Collectively evaluated		Individually evaluated		Total Allowance for Credit Losses - Loans		Collectively evaluated		Individually evaluated		Total Loans
Real estate loans:
Residential	$	2,304	$	51	$	2,355	$	352,924	$	1,664	$	354,588
Commercial		10,164		119		10,283		1,107,745		2,524		1,110,269
Agricultural		3,753		17		3,770		324,538		2,519		327,057
Construction		1,627		-		1,627		178,209		1,948		180,157
Consumer		334		877		1,211		69,585		957		70,542
Other commercial loans		1,915		1,341		3,256		127,352		3,499		130,851
Other agricultural loans		206		-		206		25,836		411		26,247
State and political subdivision loans		63		-		63		56,005		-		56,005
Unallocated		26		-		26		-		-		-
Total	$	20,392	$	2,405	$	22,797	$	2,242,194	$	13,522	$	2,255,716

	Allowance for Credit Losses - Loans						Loans
December 31, 2023	Collectively evaluated		Individually evaluated		Total Allowance for Credit Losses - Loans		Collectively evaluated		Individually evaluated		Total Loans
Real estate loans:
Residential	$	2,285	$	69	$	2,354	$	358,358	$	1,632	$	359,990
Commercial		9,033		145		9,178		1,090,217		2,670		1,092,887
Agricultural		3,247		17		3,264		311,500		3,302		314,802
Construction		1,664		286		1,950		193,469		2,357		195,826
Consumer		557		939		1,496		60,377		939		61,316
Other commercial loans		1,713		516		2,229		134,472		1,696		136,168
Other agricultural loans		270		-		270		30,388		285		30,673
State and political subdivision loans		45		-		45		57,174		-		57,174
Unallocated		367		-		367		-		-		-
Total	$	19,181	$	1,972	$	21,153	$	2,235,955	$	12,881	$	2,248,836

Non-performing Loans

Non-performing loans include those loans that are considered nonaccrual, described in more detail below, and all loans past due 90 or more days. Loans are considered for non-accrual status upon reaching 90 days delinquency, although the Company may be receiving partial payments of interest and partial repayments of principal on such loans, or if full payment of principal and interest is not expected. Additionally, if management is made aware of other information including bankruptcy, repossession, death, or legal proceedings, the loan may be placed on non-accrual status. If a loan is 90 days or more past due and is well secured and in the process of collection, it may still be considered accruing.

The following table reflects the non-performing loan receivables, as well as those on non-accrual status as of June 30, 2024 and December 31, 2023, respectively. The balances are presented by class of loan receivable (in thousands):

	June 30, 2024								December 31, 2023
	Nonaccrual With a related allowance		Nonaccrual Without a related allowance		90 days or greater past due and accruing		Total non-performing loans		Nonaccrual With a related allowance		Nonaccrual Without a related allowance		90 days or greater past due and accruing		Total non-performing loans
Real estate loans:
Mortgages	$	-	$	2,927	$	-	$	2,927	$	315	$	2,646	$	-	$	2,961
Home Equity		-		119		76		195		-		121		18		139
Commercial		1,248		1,276		168		2,692		256		879		404		1,539
Agricultural		181		2,338		-		2,519		181		2,489		75		2,745
Construction		-		1,948		-		1,948		2,357		-		-		2,357
Consumer		871		-		16		887		701		-		13		714
Other commercial loans		1,628		2,002		25		3,655		588		1,162		6		1,756
Other agricultural loans		-		411		-		411		-		492		-		492
	$	3,928	$	11,021	$	285	$	15,234	$	4,398	$	7,789	$	516	$	12,703

As of June 30, 2024, there were $11.0 million of non-accrual loans that did not have a related allowance for credit losses. The estimated fair values of the collateral securing these loans exceeded their carrying amount, or the loans were previously charged down to the realizable collateral values. Accordingly, no specific valuation allowance was considered to be necessary.

The following table presents, by class of loans and leases, the amortized cost basis of collateral-dependent nonaccrual loans and leases and type of collateral as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024	Real Estate		Business Assets		None		Total
Real estate loans:
Mortgages	$	2,927	$	-	$	-	$	2,927
Home Equity		119		-		-		119
Commercial		2,524		-		-		2,524
Agricultural		2,519		-		-		2,519
Construction		1,948		-		-		1,948
Consumer		-		-		871		871
Other commercial loans		-		3,630		-		3,630
Other agricultural loans		-		411		-		411
	$	10,037	$	4,041	$	871	$	14,949

December 31, 2023	Real Estate		Business Assets		None		Total
Real estate loans:
Mortgages	$	2,961	$	-	$	-	$	2,961
Home Equity		121		-		-		121
Commercial		1,135		-		-		1,135
Agricultural		2,670		-		-		2,670
Construction		2,357		-		-		2,357
Consumer		-		-		701		701
Other commercial loans		-		1,750		-		1,750
Other agricultural loans		-		492		-		492
	$	9,244	$	2,242	$	701	$	12,187

Credit Quality Information

For commercial real estate loans, agricultural real estate loans, construction loans, other commercial loans, other agricultural loans, and state and political subdivision loans, management uses an internal risk rating system to monitor and assess credit quality. During the third quarter of 2023, this rating system was expanded from a nine grade rating system to a ten grade rating system. The first six categories under the revised system are considered not criticized and are aggregated as “Pass” rated. Under the prior system, the first five categories were considered not criticized and aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The definitions of each rating are defined below:

•

Pass (Grades 1-6) – These loans are to customers with credit quality ranging from an acceptable to very high quality and are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

•

Special Mention (Grade 7) – This loan grade is in accordance with regulatory guidance and includes loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

•

Substandard (Grade 8) – This loan grade is in accordance with regulatory guidance and includes loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

•

Doubtful (Grade 9) – This loan grade is in accordance with regulatory guidance and includes loans that 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 (Grade 10) – This loan grade is in accordance with regulatory guidance and includes loans that are considered uncollectible, or of such value that continuance as an asset is not warranted.

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay the loan as agreed, the Company’s loan rating process includes several layers of internal and external oversight. The Company’s loan officers are responsible for the timely and accurate risk rating of the loans in each of their portfolios at origination and on an ongoing basis under the supervision of management. All commercial, agricultural and state and political relationships over $500,000 are reviewed annually to ensure the appropriateness of the loan grade. In addition, the Company engages an external consultant on at least an annual basis to: 1) review a minimum of 50% of the dollar volume of the commercial loan portfolio on an annual basis, 2) a large sample of relationships in aggregate over $1,000,000, 3) selected loan relationships over $750,000 which are over 30 days past due, or classified Special Mention, Substandard, Doubtful, or Loss, and 4) such other loans which management or the consultant deems appropriate.

The following tables represent credit exposures by internally assigned grades, by origination year, as of June 30, 2024 and December 31, 2023 (in thousands):

													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
June 30, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Commercial real estate
Risk Rating
Pass	$	24,386	$	86,011	$	346,073	$	211,774	$	118,917	$	240,719	$	36,287	$	1,852	$	1,066,019
Special Mention		-		-		6,496		1,065		1,430		8,672		768		-		18,431
Substandard		-		572		13,045		545		194		10,725		330		408		25,819
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	24,386	$	86,583	$	365,614	$	213,384	$	120,541	$	260,116	$	37,385	$	2,260	$	1,110,269
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural real estate
Risk Rating
Pass	$	13,464	$	26,962	$	48,430	$	27,830	$	30,726	$	136,181	$	14,772	$	119	$	298,484
Special Mention		3,059		185		10,349		1,292		-		7,919		2,202		562		25,568
Substandard		-		-		-		-		-		2,913		-		92		3,005
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	16,523	$	27,147	$	58,779	$	29,122	$	30,726	$	147,013	$	16,974	$	773	$	327,057
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Construction										-
Risk Rating
Pass	$	19,891	$	57,223	$	80,691	$	7,742	$	2,890	$	-	$	864	$	121	$	169,422
Special Mention		-		812		4,613		2,950		-		-		-		-		8,375
Substandard		-		-		412		1,948		-		-		-		-		2,360
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	19,891	$	58,035	$	85,716	$	12,640	$	2,890	$	-	$	864	$	121	$	180,157
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Other commercial loans										-
Risk Rating
Pass	$	27,900	$	26,364	$	7,742	$	7,540	$	2,208	$	4,030	$	40,759	$	83	$	116,626
Special Mention		330		-		1,919		1,419		2		81		5,312		36		9,099
Substandard		42		1,283		381		-		259		1,136		347		1,661		5,109
Doubtful		-		-		-		-		-		-		-		17		17
Total	$	28,272	$	27,647	$	10,042	$	8,959	$	2,469	$	5,247	$	46,418	$	1,797	$	130,851
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	6	$	-	$	1,313	$	-	$	1,319

Other agricultural loans										-
Risk Rating
Pass	$	2,392	$	2,630	$	1,157	$	4,912	$	518	$	412	$	11,491	$	-	$	23,512
Special Mention		734		-		405		401		-		-		739		-		2,279
Substandard		-		-		-		191		-		199		44		22		456
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	3,126	$	2,630	$	1,562	$	5,504	$	518	$	611	$	12,274	$	22	$	26,247
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

State and political subdivision loans										-
Risk Rating
Pass	$	30	$	1,541	$	14,101	$	10,600	$	5,439	$	24,294	$	-	$	-	$	56,005
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	30	$	1,541	$	14,101	$	10,600	$	5,439	$	24,294	$	-	$	-	$	56,005
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Total										-
Risk Rating
Pass	$	88,063	$	200,731	$	498,194	$	270,398	$	160,698	$	405,636	$	104,173	$	2,175	$	1,730,068
Special Mention		4,123		997		23,782		7,127		1,432		16,672		9,021		598		63,752
Substandard		42		1,855		13,838		2,684		453		14,973		721		2,183		36,749
Doubtful		-		-		-		-		-		-		-		17		17
Total	$	92,228	$	203,583	$	535,814	$	280,209	$	162,583	$	437,281	$	113,915	$	4,973	$	1,830,586

													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Commercial real estate
Risk Rating
Pass	$	90,068	$	333,710	$	224,873	$	122,560	$	81,557	$	180,799	$	28,360	$	1,140	$	1,063,067
Special Mention		672		7,963		227		1,552		7,442		8,159		96		60		26,171
Substandard		-		1,302		6		-		158		1,444		317		422		3,649
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	90,740	$	342,975	$	225,106	$	124,112	$	89,157	$	190,402	$	28,773	$	1,622	$	1,092,887
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Agricultural real estate
Risk Rating
Pass	$	22,632	$	47,479	$	28,990	$	32,058	$	25,406	$	118,700	$	10,495	$	460	$	286,220
Special Mention		574		9,165		1,499		-		962		7,038		3,535		-		22,773
Substandard		-		-		-		-		102		5,394		75		238		5,809
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	23,206	$	56,644	$	30,489	$	32,058	$	26,470	$	131,132	$	14,105	$	698	$	314,802
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Construction
Risk Rating
Pass	$	54,973	$	102,562	$	22,508	$	-	$	-	$	-	$	839	$	1,166	$	182,048
Special Mention		1,574		5,432		4,415		-		-		-		-		-		11,421
Substandard		-		-		2,357		-		-		-		-		-		2,357
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	56,547	$	107,994	$	29,280	$	-	$	-	$	-	$	839	$	1,166	$	195,826
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Other commercial loans
Risk Rating
Pass	$	31,493	$	11,407	$	9,016	$	4,793	$	4,758	$	3,530	$	63,285	$	93	$	128,375
Special Mention		51		52		1,510		184		223		629		1,652		36		4,337
Substandard		52		97		-		-		149		967		502		1,667		3,434
Doubtful		-		-		-		-		-		-		-		22		22
Total	$	31,596	$	11,556	$	10,526	$	4,977	$	5,130	$	5,126	$	65,439	$	1,818	$	136,168
Current period gross charge-offs	$	200	$	-	$	-	$	763	$	-	$	-	$	-	$	-	$	963

Other agricultural loans
Risk Rating
Pass	$	3,902	$	1,520	$	6,448	$	1,046	$	532	$	305	$	15,331	$	-	$	29,084
Special Mention		-		473		16		42		-		-		488		29		1,048
Substandard		-		-		207		-		4		255		44		31		541
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	3,902	$	1,993	$	6,671	$	1,088	$	536	$	560	$	15,863	$	60	$	30,673
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

State and political subdivision loans
Risk Rating
Pass	$	1,623	$	14,171	$	10,841	$	5,235	$	-	$	25,294	$	10	$	-	$	57,174
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		-		-		-
Total	$	1,623	$	14,171	$	10,841	$	5,235	$	-	$	25,294	$	10	$	-	$	57,174
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Total
Risk Rating
Pass	$	204,691	$	510,849	$	302,676	$	165,692	$	112,253	$	328,628	$	118,320	$	2,859	$	1,745,968
Special Mention		2,871		23,085		7,667		1,778		8,627		15,826		5,771		125		65,750
Substandard		52		1,399		2,570		-		413		8,060		938		2,358		15,790
Doubtful		-		-		-		-		-		-		-		22		22
Total	$	207,614	$	535,333	$	312,913	$	167,470	$	121,293	$	352,514	$	125,029	$	5,364	$	1,827,530

For residential real estate mortgage loans, home equity loans, and consumer loans, credit quality is monitored based on whether the loan is performing or non-performing, which is typically based on the aging status of the loan and payment activity, unless a specific action, such as bankruptcy, repossession, death or significant delay in payment occurs to raise awareness of a possible credit event. Non-performing loans include those loans that are considered nonaccrual, described in more detail above, and all loans past due 90 or more days and still accruing. The following tables present the recorded investment in those loan classes based on payment activity, by origination year, as of June 30, 2024 and December 31, 2023 (in thousands):

													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
June 30, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Residential real estate
Payment Performance
Performing	$	5,634	$	19,686	$	91,593	$	47,532	$	28,521	$	110,070	$	-	$	-	$	303,036
Nonperforming		-		-		384		746		579		1,218		-		-		2,927
Total	$	5,634	$	19,686	$	91,977	$	48,278	$	29,100	$	111,288	$	-	$	-	$	305,963
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Home equity										-
Payment Performance
Performing	$	1,321	$	3,755	$	2,736	$	1,843	$	1,753	$	9,089	$	27,646	$	287	$	48,430
Nonperforming		-		-		-		-		-		53		66		76		195
Total	$	1,321	$	3,755	$	2,736	$	1,843	$	1,753	$	9,142	$	27,712	$	363	$	48,625
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer										-
Payment Performance
Performing	$	1,304	$	1,363	$	746	$	461	$	377	$	2,823	$	62,579	$	2	$	69,655
Nonperforming		-		6		4		-		12		865		-		-		887
Total	$	1,304	$	1,369	$	750	$	461	$	389	$	3,688	$	62,579	$	2	$	70,542
Current period gross charge-offs	$	-	$	-	$	21	$	-	$	-	$	-	$	16	$	-	$	37

Total										-
Payment Performance
Performing	$	8,259	$	24,804	$	95,075	$	49,836	$	30,651	$	121,982	$	90,225	$	289	$	421,121
Nonperforming		-		6		388		746		591		2,136		66		76		4,009
Total	$	8,259	$	24,810	$	95,463	$	50,582	$	31,242	$	124,118	$	90,291	$	365	$	425,130

													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
December 31, 2023	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
Residential real estate
Payment Performance
Performing	$	19,082	$	93,706	$	47,774	$	29,940	$	18,923	$	97,813	$	-	$	-	$	307,238
Nonperforming		-		399		766		396		-		1,400		-		-		2,961
Total	$	19,082	$	94,105	$	48,540	$	30,336	$	18,923	$	99,213	$	-	$	-	$	310,199
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	1	$	-	$	-	$	1
Home equity
Payment Performance
Performing	$	3,877	$	3,008	$	1,886	$	1,954	$	2,462	$	7,883	$	28,219	$	363	$	49,652
Nonperforming		-		-		-		-		-		72		67		-		139
Total	$	3,877	$	3,008	$	1,886	$	1,954	$	2,462	$	7,955	$	28,286	$	363	$	49,791
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-	$	-

Consumer
Payment Performance
Performing	$	1,803	$	979	$	539	$	477	$	557	$	2,988	$	53,254	$	5	$	60,602
Nonperforming		-		21		-		-		-		693		-		-		714
Total	$	1,803	$	1,000	$	539	$	477	$	557	$	3,681	$	53,254	$	5	$	61,316
Current period gross charge-offs	$	-	$	-	$	-	$	-	$	1	$	341	$	23	$	-	$	365

Total
Payment Performance
Performing	$	24,762	$	97,693	$	50,199	$	32,371	$	21,942	$	108,684	$	81,473	$	368	$	417,492
Nonperforming		-		420		766		396		-		2,165		67		-		3,814
Total	$	24,762	$	98,113	$	50,965	$	32,767	$	21,942	$	110,849	$	81,540	$	368	$	421,306

Aging Analysis of Past Due Loan Receivables

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The following table includes an aging analysis of the recorded investment of past due loan receivables as of June 30, 2024 and December 31, 2023 (in thousands):

June 30, 2024	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans Receivables		90 Days or Greater and Accruing
Real estate loans:
Mortgages	$	1,823	$	298	$	1,729	$	3,850	$	302,113	$	305,963	$	-
Home Equity		106		41		195		342		48,283		48,625		76
Commercial		5,280		8,794		2,543		16,617		1,093,652		1,110,269		168
Agricultural		2,151		369		181		2,701		324,356		327,057		-
Construction		978		-		1,948		2,926		177,231		180,157		-
Consumer		147		21		887		1,055		69,487		70,542		16
Other commercial loans		345		1,715		1,871		3,931		126,920		130,851		25
Other agricultural loans		432		146		191		769		25,478		26,247		-
State and political subdivision loans		-		-		-		-		56,005		56,005		-
Total	$	11,262	$	11,384	$	9,545	$	32,191	$	2,223,525	$	2,255,716	$	285

Loans considered non-accrual	$	67	$	1,920	$	9,260	$	11,247	$	3,702	$	14,949
Loans still accruing		11,195		9,464		285		20,944		2,219,823		2,240,767
Total	$	11,262	$	11,384	$	9,545	$	32,191	$	2,223,525	$	2,255,716

December 31, 2023	30-59 Days Past Due		60-89 Days Past Due		90 Days Or Greater		Total Past Due		Current		Total Loans Receivables		90 Days or Greater and Accruing
Real estate loans:
Mortgages	$	2,682	$	360	$	2,240	$	5,282	$	304,917	$	310,199	$	-
Home Equity		145		67		71		283		49,508		49,791		18
Commercial		1,151		245		1,380		2,776		1,090,111		1,092,887		404
Agricultural		72		-		1,440		1,512		313,290		314,802		75
Construction		4,407		388		2,357		7,152		188,674		195,826		-
Consumer		16		282		23		321		60,995		61,316		13
Other commercial loans		670		366		319		1,355		134,813		136,168		6
Other agricultural loans		108		362		-		470		30,203		30,673		-
State and political subdivision loans		-		-		-		-		57,174		57,174		-
Total	$	9,251	$	2,070	$	7,830	$	19,151	$	2,229,685	$	2,248,836	$	516
Loans considered non-accrual	$	199	$	666	$	7,314	$	8,179	$	4,008	$	12,187
Loans still accruing		9,052		1,404		516		10,972		2,225,677		2,236,649
Total	$	9,251	$	2,070	$	7,830	$	19,151	$	2,229,685	$	2,248,836

Modifications to Borrowers Experiencing Financial Difficulty

Occasionally, the Company modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses.

In some cases, the Company provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted.

There were no loan modifications made during the six months ended June 30, 2024, for borrowers experiencing financial difficulty.

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, 2024 and December 31, 2023, included within other assets are $2,690,000 and $474,000, respectively, of foreclosed assets. As of June 30, 2024, included within the foreclosed assets are $131,000 of consumer residential mortgages that were foreclosed on or received via a deed in lieu transaction prior to the period end. As of June 30, 2024, the Company had initiated formal foreclosure proceedings on $521,000 of residential mortgage loans, the collateral properties which have not yet been transferred into foreclosed assets.