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Note 4 - Loans

9 Months Ended

Sep. 30, 2024

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 4 - LOANS

Major classifications of loans at September 30, 2024 and December 31, 2023 were as follows (in thousands):

	September 30, 2024		December 31, 2023
Commercial & industrial	$	119,215		120,541
Commercial, secured by real estate:
Owner occupied		216,262		206,705
Non-owner occupied		509,978		501,108
Farmland		38,005		37,367
Multi-family		239,645		240,033
Construction loans secured by 1-4 family dwellings		15,341		9,058
Construction loans secured by other real estate		84,275		111,373
Residential real estate:
Secured by senior liens on 1-4 family dwellings		395,906		402,026
Secured by junior liens on 1-4 family dwellings		21,683		19,999
Home equity line-of-credit loans		42,970		38,579
Consumer		22,113		25,600
Agricultural		13,171		11,000
Other loans, including deposit overdrafts		496		82
Loans, gross		1,719,060		1,723,471
Less allowance for credit losses		11,867		10,525
Loans, net	$	1,707,193		1,712,946

Loans in the above table are shown net of deferred origination fees and costs. Deferred origination fees, net of related costs, were $861,000 and $181,000 at September 30, 2024 and December 31, 2023, respectively. Accrued interest receivable of $8.22 million and $7.33 million are excluded from the balances above as of September 30, 2024 and December 31, 2023, respectively, that are recorded in other assets on the consolidated balance sheets.

Non-accrual loans by class of receivable as of September 30, 2024 and December 31, 2023 were as follows (in thousands):

	September 30, 2024				December 31, 2023
	Non-accrual				Non-accrual
	Loans with no		Total		Loans with no		Total
	Allowance for		Non-accrual		Allowance for		Non-accrual
	Credit Losses		Loans		Credit Losses		Loans
Commercial & industrial	$	—		—		—		—
Commercial, secured by real estate:
Owner occupied		—		—		—		—
Non-owner occupied		—		2,642		—		—
Farmland		52		52		51		51
Multi-family		—		—		—		—
Construction loans secured by 1-4 family dwellings		—		—		—		—
Construction loans secured by other real estate		—		—		—		—
Residential real estate:
Secured by senior liens on 1-4 family dwellings		—		307		29		29
Secured by junior liens on 1-4 family dwellings		—		—		—		—
Home equity line-of-credit loans		—		—		—		—
Consumer		—		—		—		—
Agricultural		—		—		—		—
Total	$	52		3,001		80		80

Interest income recognized on nonaccrual loans totaled approximately $67,000 and $1,000 during the nine months ended September 30, 2024 and 2023, respectively. Accrued interest reversed and charged against interest income for these loans totaled approximately $36,000 and $0 during the nine months ended September 30, 2024 and 2023, respectively.

The ratio of non-accrual loans to total loans outstanding at September 30, 2024 and December 31, 2023 was 0.17% and 0.00%, respectively.

ALLOWANCE FOR CREDIT LOSSES

The ACL is an estimate of the expected credit losses on financial assets measured at amortized cost, which is measured using relevant information about past events, including historical credit loss experience on financial assets with similar risk characteristics, current conditions, and reasonable and supportable forecasts that affect the collectability of the remaining cash flows over the contractual term of the financial assets. A provision for credit losses is charged to operations based on management’s periodic evaluation of these and other pertinent factors.

During the first quarter of 2023, the Company adopted ASU No. 2016-13, including the CECL methodology for estimating the ACL. This standard was adopted using a modified retrospective approach on January 1, 2023. See Note 1 - Basis of Presentation - Adoption of New Accounting Pronouncements for a summary of the impact adoption of ASU No. 2016-13 had on LCNB's ACL, retained earnings, and deferred taxes.

QUANTITATIVE CONSIDERATIONS

The ACL is primarily calculated utilizing a DCF model. Key inputs and assumptions used in this model are discussed below:

•

Forecast model - For each portfolio segment, an LDA was performed in order to identify appropriate loss drivers and create a regression model for use in forecasting cash flows. The LDA utilized peer FFIEC Call Report data for all pools. The Company updated the LDA for the September 30, 2024 calculation. The new LDA utilized the same economic factor loss drivers as previous analyses but added an additional factor to three pools to improve correlation with loss data.

•

Probability of default – PD is the probability that an asset will be in default within a given time frame. The Company has defined default as when a charge-off has occurred, a loan goes to non-accrual status, or a loan is greater than 90 days past due. The forecast model is utilized to estimate PDs.

•

Loss given default – LGD is the percentage of the asset not expected to be collected due to default. The LGD is derived from company specific and peer loss data.

•

Prepayments and curtailments – Prepayments and curtailments are calculated based on the Company’s own data. This analysis is updated when materially relevant.

•

Forecast and reversion – the Company, as of June 30, 2024, established a two-quarter reasonable and supportable forecast period with a ten-quarter straight line reversion to the long-term historical average. As of September 30, 2024, the Company established a four-quarter reasonable and supportable forecast period with a six-quarter straight line reversion to the long-term historical average due to increased uncertainty surrounding the economy. Extending the forecast and shortening the reversion periods from previous quarters has differing effects on pools based on the economic indicators used and the relation of the selected forecast range to the historical average. For example, the historical average for the Company's unemployment indicator is 5.78%, which is higher than the forecasted range utilized as of September 30, 2024. The extended forecast and reversion period ultimately decreases the reserve associated with the unemployment factor when compared to the historical average.

•

Economic forecast – the Company utilizes a third party to provide economic forecasts under various scenarios, which are assessed against economic indicators and management’s observations in the market. As of September 30, 2024, the Company selected a forecast which forecasts unemployment between 4.86% and 5.48%, the change in Coincident Economic Activity between -0.04% and 0.83%, the change in Commercial Real Estate Price Indexes between -6.45% and -0.68%, and the change in the Home Price Index between -4.12% and 2.98% during the forecast periods. Management believes that the resulting quantitative reserve appropriately balances economic indicators with identified risks. As of June 30, 2024, the Company selected a forecast which forecasts unemployment between 4.50% and 4.85%, the change in Coincident Economic Activity between -0.06% and 0.07%, the change in Commercial Real Estate Price Indexes between -5.33% and -3.86%, and the change in the Home Price Index between 0.63% and 2.89% during the forecast periods. The historical averages for LCNB’s economic indicators are unemployment – 5.78%, change in Coincident Economic Activity – 1.99%, change in Commercial Real Estate Price Indexes – 5.95%, and change in Home Price Index – 2.71%

QUALITATIVE CONSIDERATIONS

In addition to the quantitative model, management considers the need for qualitative adjustment for risks not considered in the DCF. Factors that are considered by management in determining loan collectability and the appropriate level of the ACL are listed below:

•

Actual and expected changes in international, national, regional, and local economic and business conditions and developments in which the Company operates that affect the collectability of financial assets;

•

The effect of other external factors such as the regulatory, legal and technological environments, competition, and events such as natural disasters or pandemics; and

•

Model risk including statistical risk, reversion risk, timing risk, and model limitation risk.

•

Changes in the nature and volume of the portfolio and terms of loans.

•

Lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries.

The following table presents activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2024 and 2023 (in thousands):

				Commercial,
	Commercial			Secured by			Residential
	& Industrial			Real Estate			Real Estate			Consumer			Agricultural			Other			Total
Three Months Ended September 30, 2024
Balance, beginning of period	$	1,568			6,228			3,222			212			38			2			11,270
Acquisition of Eagle Financial Bancorp, Inc. - PCD Loans		—			—			—			—			—			—			—
Provision for (recovery of) credit losses		(214	)		258			572			—			41			24			681
Acquisition of Eagle Financial Bancorp, Inc. - provision for credit losses on non-PCD loans charged to expense		—			—			—			—			—			—			—
Losses charged off		(22	)		—			—			—			(57	)		(43	)		(122	)
Recoveries		—			—			—			19			—			19			38
Balance, end of period	$	1,332			6,486			3,794			231			22			2			11,867

Ratio of net charge-offs to average loans		0.07	%		—	%		—	%		(0.34	)%		1.82	%		26.19	%		0.02	%

Nine Months Ended September 30, 2024
Balance, beginning of year	$	1,039			5,414			3,816			238			18			—			10,525
Acquisition of Eagle Financial Bancorp, Inc. - PCD Loans		101			8			79			—			—			—			188
Provision for (recovery of) credit losses		163			818			(576	)		(32	)		61			104			538
Acquisition of Eagle Financial Bancorp, Inc. - provision for credit losses on non-PCD loans charged to expense		51			246			466			—			—			—			763
Losses charged off		(22	)		—			—			(43	)		(57	)		(164	)		(286	)
Recoveries		—			—			9			68			—			62			139
Balance, end of period	$	1,332			6,486			3,794			231			22			2			11,867

Ratio of net charge-offs (recoveries) to average loans		0.02	%		—	%		—	%		(0.14	)%		0.63	%		61.65	%		0.01	%

				Commercial,
	Commercial			Secured by			Residential
	& Industrial			Real Estate			Real Estate			Consumer			Agricultural			Other			Total
Three Months Ended September 30, 2023
Balance, beginning of period	$	1,065			5,023			1,326			535			5			2			7,956
Provision for (recovery of) credit losses		2			(70	)		125			(75	)		—			28			10
Losses charged off		—			—			(4	)		(1	)		—			(54	)		(59	)
Recoveries		—			—			—			1			—			24			25
Balance, end of period	$	1,067			4,953			1,447			460			5			—			7,932

Ratio of net charge-offs to average loans		—	%		—	%		0.01	%		—	%		—	%		154.44	%		0.01	%

Nine Months Ended September 30, 2023
Balance, beginning of year, prior to adoption of ASC 326	$	1,300			3,609			624			86			22			5			5,646
Impact of adopting ASC 326		(512	)		1,440			836			446			(9	)		(5	)		2,196
Provision for (recovery of) credit losses		294			(96	)		(9	)		(66	)		(8	)		58			173
Losses charged off		(15	)		—			(4	)		(10	)		—			(115	)		(144	)
Recoveries		—			—			—			4			—			57			61
Balance, end of period	$	1,067			4,953			1,447			460			5			—			7,932

Ratio of net charge-offs to average loans		0.02	%		—	%		—	%		0.03	%		—	%		106.23	%		0.01	%

The ratio of the allowance for credit losses for loans to total loans at September 30, 2024 and December 31, 2023 was 0.69% and 0.61%, respectively.

For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date.

The following table presents the carrying value and related allowance of collateral dependent individually evaluated loans by class segment at the dates indicated (in thousands):

	September 30, 2024				December 31, 2023
	Carrying		Related		Carrying		Related
	Value		Allowance		Value		Allowance
Commercial & industrial	$	—		—		—		—
Commercial, secured by real estate:
Owner occupied		52		—		72		—
Non-owner occupied		2,642		1,180		—		—
Farmland		52		—		51		—
Multi-family		—		—		—		—
Construction loans secured by 1-4 family dwellings		—		—		—		—
Construction loans secured by other real estate		—		—		—
Residential real estate:
Secured by senior liens on 1-4 family dwellings		421		52		—		—
Secured by junior liens on 1-4 family dwellings		—		—		—		—
Home equity line-of-credit loans		73		41		—		—
Consumer		—		—		—		—
Agricultural		—		—		—		—
Other loans, including deposit overdrafts		—		—		—		—
Total	$	3,240		1,273		123		—

The risk characteristics of LCNB's material loan portfolio segments were as follows:

Commercial & Industrial Loans. LCNB’s commercial & industrial loan portfolio consists of loans for a variety of purposes, including, for example, loans to fund working capital requirements (such as inventory and receivables financing) and purchases of machinery and equipment. LCNB offers a variety of commercial & industrial loan arrangements, including term loans, balloon loans, and lines of credit. Commercial & industrial loans can have a fixed or variable rate, with maturities ranging from one to ten years. Commercial & industrial loans are offered to businesses and professionals for short and medium terms on both a collateralized and uncollateralized basis. Commercial & industrial loans typically are underwritten on the basis of the borrower’s ability to make repayment from the cash flow of the business. Collateral, when obtained, may include liens on furniture, fixtures, equipment, inventory, receivables, or other assets. As a result, such loans involve complexities, variables, and risks that require thorough underwriting and more robust servicing than other types of loans.

Commercial, Secured by Real Estate Loans. Commercial real estate loans include loans secured by a variety of commercial, retail and office buildings, religious facilities, hotels, multifamily (more than four-family) residential properties, construction and land development loans, and other land loans. Mortgage loans secured by owner-occupied agricultural property are included in this category. Commercial real estate loan products generally amortize over five to twenty-five years and are payable in monthly principal and interest installments. Some have balloon payments due within one to ten years after the origination date. The majority have adjustable interest rates with adjustment periods ranging from one to ten years, some of which are subject to established “floor” interest rates.

Commercial real estate loans are underwritten based on the ability of the property, in the case of income-producing property, or the borrower’s business to generate sufficient cash flow to amortize the debt. Secondary emphasis is placed upon global debt service, collateral value, financial strength and liquidity of any and all guarantors, and other factors. Commercial real estate loans are generally originated with a 75% to 85% maximum loan to appraised value ratio, depending upon borrower capacity.

Residential Real Estate Loans. Residential real estate loans include loans secured by first or second mortgage liens on one to four-family residential properties. Home equity lines of credit are also included in this category. First and second mortgage loans are generally amortized over five to thirty years with monthly principal and interest payments. Home equity lines of credit generally have a five year or less draw period with interest only payments followed by a repayment period with monthly payments based on the amount outstanding. LCNB offers both fixed and adjustable-rate mortgage loans. Adjustable-rate loans are available with adjustment periods ranging between one to fifteen years and adjust according to an established index plus a margin, subject to certain floor and ceiling rates. A substantial majority of home equity lines of credit have a variable rate of interest based on the Wall Street Journal prime rate plus a margin.

Residential real estate loans are underwritten primarily based on the borrower’s ability to repay, prior credit history, and the value of the collateral. LCNB generally requires private mortgage insurance for first mortgage loans that have a loan to appraised value ratio of greater than 80% or may require other credit enhancements for second lien mortgage loans.

Consumer Loans. LCNB’s portfolio of consumer loans generally includes secured and unsecured loans to individuals for household, family and other personal expenditures. Secured loans include loans to fund the purchase of automobiles, recreational vehicles, boats, and similar acquisitions. Consumer loans made by LCNB generally have fixed rates and terms ranging up to 72 months, depending upon the nature of the collateral, size of the loan, and other relevant factors. Consumer loans generally have higher interest rates, but pose additional risks of collectability and loss when compared to certain other types of loans. Collateral, if present, is generally subject to damage, wear, and depreciation. The borrower’s ability to repay is of primary importance in the underwriting of consumer loans.

Agricultural Loans. LCNB’s portfolio of agricultural loans includes loans for financing agricultural production and for financing the purchase of equipment used in the production of agricultural products. LCNB’s agricultural loans are generally secured by farm machinery, livestock, crops, vehicles, or other agricultural-related collateral.

Other Loans, Including Deposit Overdrafts. Other loans may include loans that do not fit in any of the other categories, but it is primarily composed of overdrafts from transaction deposit accounts. Overdraft payments are recorded as a recovery and overdrafts are generally written off after 34 days with a negative balance.

LCNB’s management monitors the credit quality of its loans on an ongoing basis. This monitoring includes annual reviews for loans with a principal balance greater than $1 million and bi-annual reviews for loans with a principal balance of more than $500,000 through $1 million. LCNB also has a loan grade monitoring system in place to track and report loan grades and classifications, enabling the identification and management of non-performing loans. Major factors used in determining loan grades vary based on the nature of the loan, but commonly include factors such as debt service coverage, internal cash flow, liquidity, leverage, operating performance, debt burden, FICO scores, occupancy, interest rate sensitivity, and expense burden. Commercial real estate loans rated OAEM or worse are reviewed at least quarterly for credit deterioration.

A loan is assigned to a risk category based on relevant information about the ability of the borrower to service the debt including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The categories used are:

•

Pass – loans categorized in this category are higher quality loans that do not fit any of the other categories described below.

•

Other Assets Especially Mentioned ("OAEM") – loans in this category are currently protected but are potentially weak. These loans constitute a risk but not to the point of justifying a classification of substandard. The credit risk may be relatively minor yet constitute an undue risk in light of the circumstances surrounding a specific asset.

•

Substandard – loans in this category are inadequately protected by the current sound net worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the possibility that LCNB will sustain some loss if the deficiencies are not corrected.

•

Doubtful – loans classified in this category have all the weaknesses inherent in loans classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

An independent consultant is contracted to conduct a review of LCNB's loan portfolio on an annual basis. The independent review examines LCNB's underwriting activities, documentation, credit quality, and includes an assessment of proper risk ratings. Loans selected for review include all loans meeting certain pre-determined criteria and a sample of other loans. The independent review provides assurance that LCNB’s loan portfolio and credit quality complies with the policies set forth by the board of directors and senior management and with regulatory requirements.

The following table presents the amortized cost basis of loans by vintage and credit quality indicators at September 30, 2024 and December 31, 2023 (in thousands):

	Term Loans by Origination Year
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
September 30, 2024
Commercial & industrial
Pass	$	11,721		12,284		33,311		25,803		9,878		6,895		14,947		—		114,839
OAEM		—		—		1,966		—		—		—		—		—		1,966
Substandard		—		—		1,788		—		88		103		431		—		2,410
Doubtful		—		—		—		—		—		—		—		—		—
Total		11,721		12,284		37,065		25,803		9,966		6,998		15,378		—		119,215
Gross charge-offs (1)		—		—		—		22		—		—		—		—		22
Commercial, secured by real estate
Pass		22,944		118,628		182,884		168,066		102,689		347,233		141,309		—		1,083,753
OAEM		—		—		3,788		1,507		—		3,361		—		—		8,656
Substandard		—		—		7,468		—		—		3,629		—		—		11,097
Doubtful		—		—		—		—		—		—		—		—		—
Total		22,944		118,628		194,140		169,573		102,689		354,223		141,309		—		1,103,506
Gross charge-offs (1)		—		—		—		—		—		—		—		—		—
Residential real estate
Pass		27,265		61,429		75,446		88,665		53,705		108,750		40,522		—		455,782
OAEM		—		—		—		—		—		235		—		—		235
Substandard		—		231		191		291		487		3,170		172		—		4,542
Doubtful		—		—		—		—		—		—		—		—		—
Total		27,265		61,660		75,637		88,956		54,192		112,155		40,694		—		460,559
Gross charge-offs (1)		—		—		—		—		—		—		—		—		—
Consumer
Pass		5,895		5,840		4,015		3,163		2,434		654		71		—		22,072
OAEM		—		—		—		—		—		—		—		—		—
Substandard		—		—		25		11		—		5		—		—		41
Doubtful		—		—		—		—		—		—		—		—		—
Total		5,895		5,840		4,040		3,174		2,434		659		71		—		22,113
Gross charge-offs (1)		—		1		39		3		—		—		—		—		43
Agricultural
Pass		950		1,471		384		154		318		29		9,865		—		13,171
OAEM		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		950		1,471		384		154		318		29		9,865		—		13,171
Gross charge-offs (1)		—		—		—		—		57		—		—		—		57
Other
Pass		—		—		—		—		—		—		496		—		496
OAEM		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		—		—		—		—		—		—		496		—		496
Gross charge-offs (1)		—		—		—		—		—		—		164		—		164
Total loans	$	68,775		199,883		311,266		287,660		169,599		474,064		207,813		—		1,719,060

(1) - for the nine months ended September 30, 2024.

	Term Loans by Origination Year
													Revolving		Revolving
													Loans		Loans
													Amortized		Converted
	2023		2022		2021		2020		2019		Prior		Cost Basis		to Term		Total
December 31, 2023
Commercial & industrial
Pass	$	17,169		30,518		29,587		11,426		2,732		5,641		16,919		113		114,105
OAEM		—		—		1,474		—		—		—		—		—		1,474
Substandard		—		1,813		—		105		1,592		137		1,315		—		4,962
Doubtful		—		—		—		—		—		—		—		—		—
Total		17,169		32,331		31,061		11,531		4,324		5,778		18,234		113		120,541
Gross charge-offs (2)		—		—		—		—		—		15		—		—		15
Commercial, secured by real estate
Pass		99,055		200,735		156,865		109,810		92,895		283,564		141,354		6,056		1,090,334
OAEM		—		7,671		—		—		—		3,004		—		—		10,675
Substandard		—		—		—		—		1,648		2,987		—		—		4,635
Doubtful		—		—		—		—		—		—		—		—		—
Total		99,055		208,406		156,865		109,810		94,543		289,555		141,354		6,056		1,105,644
Gross charge-offs (2)		—		—		—		—		—		—		—		—		—
Residential real estate
Pass		55,232		83,511		107,120		62,177		19,208		95,643		33,800		—		456,691
OAEM		—		—		—		—		—		18		—		—		18
Substandard		—		446		—		217		—		3,062		170		—		3,895
Doubtful		—		—		—		—		—		—		—		—		—
Total		55,232		83,957		107,120		62,394		19,208		98,723		33,970		—		460,604
Gross charge-offs (2)		—		—		—		—		4		—		—		—		4
Consumer
Pass		8,087		5,820		4,868		4,671		1,382		304		460		—		25,592
OAEM		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		8		—		—		—		8
Doubtful		—		—		—		—		—		—		—		—		—
Total		8,087		5,820		4,868		4,671		1,390		304		460		—		25,600
Gross charge-offs (2)		—		—		62		21		—		—		—		—		83
Agricultural
Pass		1,883		464		197		694		46		31		7,685		—		11,000
OAEM		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		1,883		464		197		694		46		31		7,685		—		11,000
Gross charge-offs (2)		—		—		—		—		—		—		—		—		—
Other
Pass		—		—		—		—		—		—		82		—		82
OAEM		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total		—		—		—		—		—		—		82		—		82
Gross charge-offs (2)		—		—		—		—		—		—		166		—		166
Total loans	$	181,426		330,978		300,111		189,100		119,511		394,391		201,785		6,169		1,723,471

(2) - for the year ended December 31, 2023.

A loan portfolio aging analysis by class segment at September 30, 2024 and December 31, 2023 is as follows (in thousands):

													90 Days
					90 Days								or More
	30-59 Days		60-89 Days		or More		Total				Total Loans		Past Due
	Past Due		Past Due		Past Due		Past Due		Current		Receivable		and Accruing
September 30, 2024
Commercial & industrial	$	—		—		—		—		119,215		119,215		—
Commercial, secured by real estate:
Owner occupied		—		—		—		—		216,262		216,262		—
Non-owner occupied		—		—		2,642		2,642		507,336		509,978		—
Farmland		52		—		—		52		37,953		38,005		—
Multi-family		—		—		—		—		239,645		239,645		—
Construction loans secured by 1-4 family dwellings		—		—		—		—		15,341		15,341		—
Construction loans secured by other real estate		—		—		—		—		84,275		84,275		—
Residential real estate:
Secured by senior liens on 1-4 family dwellings		4		626		436		1,066		394,840		395,906		198
Secured by junior liens on 1-4 family dwellings		—		—		—		—		21,683		21,683		—
Home equity line-of-credit loans		98		49		73		220		42,750		42,970		73
Consumer		25		25		11		61		22,052		22,113		11
Agricultural		—		—		—		—		13,171		13,171		—
Other		496		—		—		496		—		496		—
Total	$	675		700		3,162		4,537		1,714,523		1,719,060		282

December 31, 2023
Commercial & industrial	$	—		—		—		—		120,541		120,541		—
Commercial, secured by real estate:
Owner occupied		—		—		72		72		206,633		206,705		72
Non-owner occupied		2,645		—		—		2,645		498,463		501,108		—
Farms		—		—		—		—		37,367		37,367		—
Multi-family		—		—		—		—		240,033		240,033		—
Construction loans secured by 1-4 family dwellings		—		—		—		—		9,058		9,058		—
Construction loans secured by other real estate		—		—		—		—		111,373		111,373		—
Residential real estate
Secured by senior liens on 1-4 family dwellings		1,020		414		29		1,463		400,563		402,026		—
Secured by junior liens on 1-4 family dwellings		27		—		—		27		19,972		19,999		—
Home equity line-of-credit loans		174		30		—		204		38,375		38,579		—
Consumer		136		—		—		136		25,464		25,600		—
Agricultural		—		—		—		—		11,000		11,000		—
Other		82		—		—		82		—		82		—
Total	$	4,084		444		101		4,629		1,718,842		1,723,471		72

Residential consumer mortgage loans secured by residential real estate in the process of foreclosure at September 30, 2024 totaled $54,000. No residential consumer mortgage loans secured by residential real estate were in the process of foreclosure at December 31, 2023.

From time to time, the terms of certain loans are modified when concessions are granted to borrowers experiencing financial difficulties. Each modification is separately negotiated with the borrower and includes terms and conditions that reflect the borrower's ability to pay the debt as modified. The modification of the terms of such loans may have included one, or a combination of, the following: a temporary or permanent reduction of the stated interest rate of the loan, an increase in the stated rate of interest lower than the current market rate for new debt with similar risk, forgiveness of principal, an extension of the maturity date, or a change in the payment terms.

The following table presents the amortized cost basis at September 30, 2024 of all loan modifications made to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted (in thousands):

									Combination -		Combination -
	Interest Rate		Extended		Principal		Payment		Extended Maturity and		Interest Rate Reduction and		Total		Percent of
	Reduction		Maturity		Forgiveness		Deferral		Payment Deferral		Payment Deferral		Modifications		Total Class
Three Months Ended September 30, 2024
Residential real estate, secured by senior liens on 1-4 family dwellings		—		—		—		—		—		—		—		—	%
Consumer		—		—		—		—		—		—		—		—	%
Total	$	—		—		—		—		—		—		—

Nine Months Ended September 30, 2024
Residential real estate, secured by senior liens on 1-4 family dwellings		—		—		—		—		—		21		21		0.01	%
Consumer		—		—		—		—		29		—		29		0.13	%
Total	$	—		—		—		—		29		21		50

The amortized cost basis of loan modifications made to borrowers experiencing financial difficulty during 2023 was zero at September 30, 2023.

Mortgage loans sold to and serviced for the Federal Home Loan Mortgage Corporation and other investors are not included in the accompanying consolidated condensed balance sheets. The unpaid principal balances of those loans at September 30, 2024 and December 31, 2023 were approximately $335.1 million and $391.8 million, respectively.