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Loans

9 Months Ended

Sep. 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 $7.93 million and $7.65 million at September 30, 2024 and December 31, 2023, respectively, from the recorded balance of loans.


	September 30,		December 31,
(Dollars in thousands)	2024		2023
Commercial real estate	$	701,647	$	668,122
Commercial business		115,410		115,348
Construction - commercial real estate		155,072		69,768
Land acquisition and development		33,774		29,064
Builder lines		29,664		24,668
Construction - consumer real estate		16,874		11,223
Residential mortgage		310,595		293,256
Equity lines		59,406		51,592
Other consumer		9,667		10,588
Consumer finance – automobiles		406,385		401,276
Consumer finance - marine and recreational vehicles		70,915		67,234
Subtotal		1,909,409		1,742,139
Less allowance for credit losses		(40,771)		(39,651)
Loans, net	$	1,868,638	$	1,702,488

Other consumer loans included $210,000 and $228,000 of demand deposit overdrafts at September 30, 2024 and December 31, 2023, respectively.

The following table shows the aging of the Corporation’s loan portfolio, by class, at September 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	$	89	$	429	$	—	$	518	$	701,129	$	701,647	$	—
Commercial business		—		—		—		—		115,410		115,410		—
Construction - commercial real estate		—		—		—		—		155,072		155,072		—
Land acquisition and development		—		—		—		—		33,774		33,774		—
Builder lines		—		—		—		—		29,664		29,664		—
Construction - consumer real estate		—		—		—		—		16,874		16,874		—
Residential mortgage		2,042		132		231		2,405		308,190		310,595		115
Equity lines		—		174		89		263		59,143		59,406		89
Other consumer		—		—		—		—		9,667		9,667		—
Consumer finance - automobiles		12,826		2,408		1,008		16,242		390,143		406,385		—
Consumer finance - marine and recreational vehicles		228		107		93		428		70,487		70,915		—
Total	$	15,185	$	3,250	$	1,421	$	19,856	$	1,889,553	$	1,909,409	$	204

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 $240,000, 30-59 days past due of $156,000, 60-89 days past due of $115,000, and 90+ days past due of $1.22 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 September 30, 2024 and December 31, 2023. The Corporation recognized $10,000 in interest income on loans on nonaccrual status as of September 30, 2024 and had $1,000 and $9,000 in reversals of interest income upon placing commercial loans on nonaccrual status during the three and nine months ended September 30, 2024, respectively. All nonaccrual loans at September 30, 2024 had an allowance for credit losses.


	September 30,		December 31,
(Dollars in thousands)	2024		2023
Commercial business	$	92	$	—
Residential mortgage		516		320
Equity lines		20		77
Other consumer		—		9
Consumer finance - automobiles		1,008		892
Consumer finance - marine and recreational vehicles		93		—
Total	$	1,729	$	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 September 30, 2024 and 2023 that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024 and 2023.


	Three Months Ended September 30, 2024					Nine Months Ended September 30, 2024
			% of Total					% of Total
			Class of					Class of
	Amortized		Financing			Amortized		Financing
(Dollars in thousands)	Cost		Receivable			Cost		Receivable
Term Extension
Commercial real estate	$	96		0.0	%	$	96		0.0	%
Residential mortgage	$	—		—		$	336		0.1
Total Term Extension	$	96				$	432

Combination Term Extension and Interest Rate Reduction
Residential mortgage	$	—		—	%	$	18		0.0	%
Total Combination Term Extension and Interest Rate Reduction	$	—				$	18
Total	$	96		0.0	%	$	450		0.0	%


	Three Months Ended September 30, 2023					Nine Months Ended September 30, 2023
			% of Total					% of Total
			Class of					Class of
	Amortized		Financing			Amortized		Financing
(Dollars in thousands)	Cost		Receivable			Cost		Receivable
Term Extension
Commercial real estate	$	969		0.2	%	$	969		0.2	%
Residential mortgage		71		0.0			71		0.0
Total Term Extension	$	1,040				$	1,040

Combination Term Extension and Interest Rate Reduction
Commercial real estate	$	—		—	%	$	45		0.0	%
Total Combination Term Extension and Interest Rate Reduction	$	—				$	45
Total	$	1,040		0.1	%	$	1,085		0.1	%

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

Three Months Ended September 30, 2024

Nine Months Ended September 30, 2024

Weighted-

Average

Interest Rate

Term Extension

Interest Rate

Term Extension

(Dollars in thousands)

Reduction

(in years)

Reduction

(in years)

Commercial real estate

—

1.0

—

1.0

Residential mortgage

—

1.51

6.9

Total

—

1.0

1.51

5.7


	Three Months Ended September 30, 2023					Nine Months Ended September 30, 2023
	Weighted-			Weighted-		Weighted-			Weighted-
	Average			Average		Average			Average
	Interest Rate			Term Extension		Interest Rate			Term Extension
(Dollars in thousands)	Reduction			(in years)		Reduction			(in years)
Commercial real estate		—	%		2.0		0.75	%		2.1
Residential mortgage		—			10.0		—			10.0
Total		—	%		2.5		0.75	%		2.6

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 nine months ended September 30, 2024 and 2023 of modified loans that were modified during the previous twelve months and all were current as of September 30, 2024.