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Loans

6 Months Ended

Jun. 30, 2024

NOTE 3: Loans

The Corporation’s loans are stated at their face amount, net of deferred fees and costs and discounts, and consist of the classes of loans included in the table below. The Corporation has elected to exclude accrued interest receivable, totaling $8.03 million and $7.65 million at June 30, 2024 and December 31, 2023, respectively, from the recorded balance of loans.


	June 30,		December 31,
(Dollars in thousands)	2024		2023
Commercial real estate	$	701,460	$	668,122
Commercial business		119,020		115,348
Construction - commercial real estate		120,208		69,768
Land acquisition and development		31,355		29,064
Builder lines		21,727		24,668
Construction - consumer real estate		16,481		11,223
Residential mortgage		308,790		293,256
Equity lines		56,835		51,592
Other consumer		10,956		10,588
Consumer finance - automobiles		406,833		401,276
Consumer finance - marine and recreational vehicles		71,511		67,234
Subtotal		1,865,176		1,742,139
Less allowance for credit losses		(40,343)		(39,651)
Loans, net	$	1,824,833	$	1,702,488

Other consumer loans included $214,000 and $228,000 of demand deposit overdrafts at June 30, 2024 and December 31, 2023, respectively.

The following table shows the aging of the Corporation’s loan portfolio, by class, at June 30, 2024:


	30-59		60-89		90+								90+ Days
	Days		Days		Days		Total						Past Due and
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current¹		Total Loans		Accruing
Commercial real estate	$	—	$	191	$	—	$	191	$	701,269	$	701,460	$	—
Commercial business		77		—		—		77		118,943		119,020		—
Construction - commercial real estate		—		—		—		—		120,208		120,208		—
Land acquisition and development		—		—		—		—		31,355		31,355		—
Builder lines		—		—		—		—		21,727		21,727		—
Construction - consumer real estate		—		—		517		517		15,964		16,481		—
Residential mortgage		2,415		86		391		2,892		305,898		308,790		118
Equity lines		192		—		97		289		56,546		56,835		47
Other consumer		19		27		—		46		10,910		10,956		—
Consumer finance - automobiles		13,565		2,095		780		16,440		390,393		406,833		—
Consumer finance - marine and recreational vehicles		217		119		22		358		71,153		71,511		—
Total	$	16,485	$	2,518	$	1,807	$	20,810	$	1,844,366	$	1,865,176	$	165

For the purposes of the table above, “Current” includes loans that are 1-29 days past due.

The table above includes nonaccrual loans that are current of $131,000, 30-59 days past due of $105,000, 60-89 days past due of $21,000, and 90+ days past due of $1.64 million.

The following table shows the aging of the Corporation’s loan portfolio, by class, at December 31, 2023:


	30-59		60-89		90+								90+ Days
	Days		Days		Days		Total						Past Due and
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current¹		Total Loans		Accruing
Commercial real estate	$	92	$	—	$	—	$	92	$	668,030	$	668,122	$	—
Commercial business		—		—		1		1		115,347		115,348		1
Construction - commercial real estate		—		—		—		—		69,768		69,768		—
Land acquisition and development		—		—		—		—		29,064		29,064		—
Builder lines		—		—		—		—		24,668		24,668		—
Construction - consumer real estate		—		—		—		—		11,223		11,223		—
Residential mortgage		1,643		387		273		2,303		290,953		293,256		89
Equity lines		215		103		115		433		51,159		51,592		38
Other consumer		3		—		9		12		10,576		10,588		—
Consumer finance - automobiles		15,263		2,628		892		18,783		382,493		401,276		—
Consumer finance - marine and recreational vehicles		282		115		—		397		66,837		67,234		—
Total	$	17,498	$	3,233	$	1,290	$	22,021	$	1,720,118	$	1,742,139	$	128

1For the purposes of the table above, “Current” includes loans that are 1-29 days past due.

The table above includes nonaccrual loans that are current of $113,000, 60-89 days past due of $22,000 and 90+ days past due of $1.16 million.

The following table shows the Corporation’s recorded balance of loans on nonaccrual status as of June 30, 2024 and December 31, 2023. The Corporation recognized $8,000 in interest income on loans on nonaccrual status as of June 30, 2024 and had $8,000 in reversals of interest income upon placing commercial loans on nonaccrual status during both the three and six months ended June 30, 2024. All nonaccrual loans at June 30, 2024 had an allowance for credit losses.


	June 30,		December 31,
(Dollars in thousands)	2024		2023
Construction - consumer real estate	$	517	$	—
Residential mortgage		531		320
Equity lines		50		77
Other consumer		—		9
Consumer finance - automobiles		780		892
Consumer finance - marine and recreational vehicles		22		—
Total	$	1,900	$	1,298

Occasionally, the Corporation modifies loans to borrowers experiencing financial difficulties by providing principal forgiveness, term extensions, interest rate reductions or other-than-insignificant payment delays. As the effect of most modifications is already included in the allowance for credit losses due to the measurement methodologies used in its estimate, the allowance for credit losses is typically not adjusted upon modification. When principal forgiveness is provided at modification, the amount forgiven is charged against the allowance for credit losses. In some cases, the Corporation may provide multiple types of modifications on one loan and when multiple types of modifications occur within the same period, the combination of modifications is separately reported.

The following tables present the amortized cost basis of loans as of June 30, 2024 and 2023 that were both experiencing financial difficulty and modified during the three and six months ended June 30, 2024 and 2023.


	Three Months Ended June 30, 2024					Six Months Ended June 30, 2024
			% of Total					% of Total
			Class of					Class of
	Amortized		Financing			Amortized		Financing
(Dollars in thousands)	Cost		Receivable			Cost		Receivable
Term Extension
Residential mortgage	$	—		—	%	$	340		0.1	%
Total Term Extension	$	—				$	340

Combination Term Extension and Interest Rate Reduction
Residential mortgage	$	—		—	%	$	18		—	%
Total Combination Term Extension and Interest Rate Reduction	$	—				$	18
Total	$	—		—	%	$	358		—	%


	Three Months Ended June 30, 2023					Six Months Ended June 30, 2023
			% of Total					% of Total
			Class of					Class of
	Amortized		Financing			Amortized		Financing
(Dollars in thousands)	Cost		Receivable			Cost		Receivable
Combination Term Extension and Interest Rate Reduction
Commercial real estate	$	—		—	%	$	47		—	%
Total Combination Term Extension and Interest Rate Reduction	$	—				$	47
Total	$	—		—	%	$	47		—	%

The following table presents the financial effects of the loan modifications presented above to borrowers experiencing financial difficulty for the three and six months ended June 30, 2024 and 2023.

Three Months Ended June 30, 2024

Six Months Ended June 30, 2024

Weighted-

Average

Interest Rate

Term Extension

Interest Rate

Term Extension

(Dollars in thousands)

Reduction

(in years)

Reduction

(in years)

Residential mortgage

—

1.51

6.9

Total

—

1.51

6.9

Three Months Ended June 30, 2023

Six Months Ended June 30, 2023

Weighted-

Average

Interest Rate

Term Extension

Interest Rate

Term Extension

(Dollars in thousands)

Reduction

(in years)

Reduction

(in years)

Commercial real estate

—

0.75

4.9

Total

—

0.75

4.9

The Corporation closely monitors the performance of modified loans to understand the effectiveness of its modification efforts. Upon the determination that all or a portion of a modified loan is uncollectible, that amount is charged against the allowance for credit losses. There were no payment defaults during the three and six months ended June 30, 2024 and 2023 of modified loans that were modified during the previous twelve months and all were current as of June 30, 2024.