XML 44 R12.htm IDEA: XBRL DOCUMENT v3.22.4
LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS
 12 Months Ended
Dec. 31, 2022
Receivables [Abstract]  
LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS LOANS, ALLOWANCE FOR LOAN LOSSES AND IMPAIRED LOANS
Portfolio Segments:
Commercial real estate loans, including multi-family, agricultural, and construction and land development loans, are underwritten after evaluating and understanding the borrower's ability to operate profitably and prudently expand its business. Management examines current and projected cash flows to determine the ability of the borrower to repay its obligations as agreed. These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally largely dependent on the successful operation of the property or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. The level of owner-occupied property versus non-owner-occupied property are tracked and monitored on a regular basis. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Loan-to-value ratios on loans secured by farmland generally do not exceed 75%.
Commercial and industrial (“C&I”) loans are primarily made based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. These cash flows, however, may not be as expected and the value of collateral securing the loans may fluctuate. Most commercial loans are secured by the assets being financed or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Agricultural operating loans are generally comprised of term loans to fund the purchase of equipment, livestock and seasonal operating lines. Operating lines are typically written for one year and secured by the crop and other farm assets or other business assets, as considered necessary. Agricultural loans carry significant credit risks as they may involve larger balances concentrated with single borrowers or groups of related borrowers. In addition, repayment of such loans depends on the successful operation or management of the farm property securing the loan or for which an operating loan is utilized. Farming operations may be affected by adverse weather conditions such as drought, hail or floods that can severely limit crop yields. SBA PPP loan balances are 100% guaranteed under the Small Business Association’s Paycheck Protection Program and may be forgiven in full, depending on use of funds and eligibility. These SBA-backed loans helped businesses keep their workforce employed during the COVID-19 crisis. Eligible borrowers, who qualify for full loan forgiveness during the eight to twenty four week period following loan disbursement, can apply for forgiveness, once all proceeds for which the borrower requested forgiveness has been used. Borrowers can apply for forgiveness any time up to the maturity date of the loan. All of the SBA PPP originated loan balances were forgiven and repaid at June 30, 2022.
Residential mortgage loans are collateralized by primary and secondary positions on real estate and are underwritten primarily based on borrower’s documented income, credit scores, and collateral values. Under consumer home equity loan guidelines, the borrower will be approved for a loan based on a percentage of their home’s appraised value less the balance owed on the existing first mortgage. Credit risk is minimized within the residential mortgage portfolio due to relatively small loan account balances spread across many individual borrowers. Management evaluates trends in past due loans and current economic factors such as the housing price index on a regular basis.
Consumer installment loans are comprised of originated indirect paper loans secured primarily by boats and recreational vehicles and other consumer loans secured primarily by automobiles and other personal assets. Consumer loan underwriting terms often depend on the collateral type, debt to income ratio and the borrower’s creditworthiness as evidenced by their credit score. In the event of a consumer installment loan default, collateral value alone may not provide an adequate source of repayment of the outstanding loan balance. This shortage is a result of the greater likelihood of damage, loss and depreciation for consumer based collateral.
Loans by classes within portfolio segments were as follows:
December 31, 2022December 31, 2021
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate$640,816 $578,395 
Agricultural real estate69,431 52,372 
Multi-family real estate205,601 174,050 
Construction and land development101,681 78,613 
C&I/Agricultural operating:
Commercial and industrial127,115 107,937 
Agricultural operating23,124 26,202 
Residential mortgage:
Residential mortgage84,783 63,855 
Purchased HELOC loans3,262 3,871 
Consumer installment:
Originated indirect paper10,236 15,971 
Other Consumer6,894 8,473 
Total originated loans before SBA PPP loans$1,272,943 $1,109,739 
SBA PPP loans— 8,755 
Total originated loans$1,272,943 $1,118,494 
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate$85,155 $120,070 
Agricultural real estate18,477 26,123 
Multi-family real estate3,307 4,299 
Construction and land development811 907 
C&I/Agricultural operating:
Commercial and industrial8,898 14,230 
Agricultural operating5,682 5,386 
Residential mortgage:
Residential mortgage20,606 27,135 
Consumer installment:
Other Consumer256 401 
Total acquired loans$143,192 $198,551 
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate$725,971 $698,465 
Agricultural real estate87,908 78,495 
Multi-family real estate208,908 178,349 
Construction and land development102,492 79,520 
C&I/Agricultural operating:
Commercial and industrial136,013 122,167 
Agricultural operating28,806 31,588 
Residential mortgage:
Residential mortgage105,389 90,990 
Purchased HELOC loans3,262 3,871 
Consumer installment:
Originated indirect paper10,236 15,971 
Other Consumer7,150 8,874 
Total loans before SBA PPP loans$1,416,135 $1,308,290 
SBA PPP loans— 8,755 
Gross loans$1,416,135 $1,317,045 
Less:
Unearned net deferred fees and costs and loans in process(2,585)(2,482)
Unamortized discount on acquired loans(1,766)(3,600)
Allowance for loan losses(17,939)(16,913)
Loans receivable, net$1,393,845 $1,294,050 
Credit Quality/Risk Ratings:
    Management utilizes a numeric risk rating system to identify and quantify the Bank’s risk of loss within its loan portfolio. Ratings are initially assigned prior to funding the loan, and may be changed at any time as circumstances warrant.
Ratings range from the highest to lowest quality based on factors that include measurements of ability to pay, collateral type and value, borrower stability and management experience. The Bank’s loan portfolio ratings are presented below in accordance with the risk rating framework that has been commonly adopted by the federal banking agencies. The definitions of the various risk rating categories are as follows:
1 through 4 - Pass. A “Pass” loan means that the condition of the borrower and the performance of the loan is satisfactory or better.
5 - Watch. A “Watch” loan has clearly identifiable developing weaknesses that deserve additional attention from management. Weaknesses that are not corrected or mitigated, may jeopardize the ability of the borrower to repay the loan in the future.
6 - Special Mention. A “Special Mention” loan has one or more potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the institution’s credit position in the future.
7 - Substandard. A “Substandard” loan is inadequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Assets classified as substandard must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.
8 - Doubtful. A “Doubtful” loan has all the weaknesses inherent in a Substandard loan 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.
9 - Loss. Loans classified as “Loss” are considered uncollectible, and their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, and a partial recovery may occur in the future.
Below is a breakdown of loans by risk rating as of December 31, 2022:
1 to 56789TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate$628,999 $5,771 $6,046 $— $— $640,816 
Agricultural real estate67,248 549 1,634 — — 69,431 
Multi-family real estate205,601 — — — — 205,601 
Construction and land development101,681 — — — — 101,681 
C&I/Agricultural operating:
Commercial and industrial120,882 5,526 707 — — 127,115 
Agricultural operating20,896 324 1,904 — — 23,124 
Residential mortgage:
Residential mortgage82,236 — 2,547 — — 84,783 
Purchased HELOC loans3,262 — — — — 3,262 
Consumer installment:
Originated indirect paper10,190 — 46 — — 10,236 
Other Consumer6,878 — 16 — — 6,894 
Total originated loans before SBA PPP loans1,247,873 12,170 12,900 — — 1,272,943 
SBA PPP loans— — — — — — 
Total originated loans$1,247,873 $12,170 $12,900 $— $— $1,272,943 
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate$83,659 $— $1,496 $— $— $85,155 
Agricultural real estate16,967 — 1,510 — — 18,477 
Multi-family real estate3,307 — — — — 3,307 
Construction and land development704 — 107 — — 811 
C&I/Agricultural operating:
Commercial and industrial8,866 — 32 — — 8,898 
Agricultural operating5,522 — 160 — — 5,682 
Residential mortgage:
Residential mortgage19,494 — 1,112 — — 20,606 
Consumer installment:
Other Consumer254 — 2 — — 256 
Total acquired loans$138,773 $— $4,419 $— $— $143,192 
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate$712,658 $5,771 $7,542 $— $— $725,971 
Agricultural real estate84,215 549 3,144 — — 87,908 
Multi-family real estate208,908 — — — — 208,908 
Construction and land development102,385 — 107 — — 102,492 
C&I/Agricultural operating:
Commercial and industrial129,748 5,526 739 — — 136,013 
Agricultural operating26,418 324 2,064 — — 28,806 
Residential mortgage:
Residential mortgage101,730 — 3,659 — — 105,389 
Purchased HELOC loans3,262 — — — — 3,262 
Consumer installment:
Originated indirect paper10,190 — 46 — — 10,236 
Other Consumer7,132 — 18 — — 7,150 
Gross loans before SBA PPP loans$1,386,646 $12,170 $17,319 $— $— $1,416,135 
SBA PPP loans— — — — — — 
Gross loans$1,386,646 $12,170 $17,319 $— $— 1,416,135 
Less:
Unearned net deferred fees and costs and loans in process(2,585)
Unamortized discount on acquired loans(1,766)
Allowance for loan losses(17,939)
Loans receivable, net$1,393,845 
Below is a breakdown of loans by risk rating as of December 31, 2021:
1 to 56789TOTAL
Originated Loans:
Commercial/Agricultural real estate:
Commercial real estate$572,724 $667 $5,004 $— $— $578,395 
Agricultural real estate50,834 1,267 271 — — 52,372 
Multi-family real estate173,760 290 — — — 174,050 
Construction and land development75,146 — 3,467 — — 78,613 
C&I/Agricultural operating:
Commercial and industrial107,798 57 82 — — 107,937 
Agricultural operating23,935 764 1,503 — — 26,202 
Residential mortgage:
Residential mortgage60,754 — 3,101 — — 63,855 
Purchased HELOC loans3,706 — 165 — — 3,871 
Consumer installment:
Originated indirect paper15,818 — 153 — — 15,971 
Other Consumer8,404 — 69 — — 8,473 
Total originated loans before SBA PPP loans1,092,879 3,045 13,815 — — 1,109,739 
SBA PPP loans8,755 — — — — 8,755 
Total originated loans$1,101,634 $3,045 $13,815 $— $— $1,118,494 
Acquired Loans:
Commercial/Agricultural real estate:
Commercial real estate$116,839 $1,314 $1,917 $— $— $120,070 
Agricultural real estate21,051 — 5,072 — — 26,123 
Multi-family real estate4,299 — — — — 4,299 
Construction and land development735 172 — — — 907 
C&I/Agricultural operating:
Commercial and industrial13,931 5 294 — — 14,230 
Agricultural operating4,936 — 450 — — 5,386 
Residential mortgage:
Residential mortgage25,869 — 1,266 — — 27,135 
Consumer installment:
Other Consumer398 — 3 — — 401 
Total acquired loans$188,058 $1,491 $9,002 $— $— $198,551 
Total Loans:
Commercial/Agricultural real estate:
Commercial real estate$689,563 $1,981 $6,921 $— $— $698,465 
Agricultural real estate71,885 1,267 5,343 — — 78,495 
Multi-family real estate178,059 290 — — — 178,349 
Construction and land development75,881 172 3,467 — — 79,520 
C&I/Agricultural operating:
Commercial and industrial121,729 62 376 — — 122,167 
Agricultural operating28,871 764 1,953 — — 31,588 
Residential mortgage:
Residential mortgage86,623 — 4,367 — — 90,990 
Purchased HELOC loans3,706 — 165 — — 3,871 
Consumer installment:
Originated indirect paper15,818 — 153 — — 15,971 
Other Consumer8,802 — 72 — — 8,874 
Gross loans before SBA PPP loans$1,280,937 $4,536 $22,817 $— $— $1,308,290 
SBA PPP loans8,755 — — — — 8,755 
Gross loans$1,289,692 $4,536 $22,817 $— $— 1,317,045 
Less:
Unearned net deferred fees and costs and loans in process(2,482)
Unamortized discount on acquired loans(3,600)
Allowance for loan losses(16,913)
Loans receivable, net$1,294,050 
     Certain directors and executive officers of the Company are defined as related parties. These related parties, including their immediate families and companies in which they are principal owners, were loan customers of the Bank during the twelve months ended December 31, 2022 and December 31, 2021. A summary of the changes in those loans is as follows:
Twelve months endedTwelve months ended
 December 31, 2022December 31, 2021
Balance—beginning of period$32,423 $26,483 
New loan originations7,994 14,992 
Repayments(2,007)(9,052)
Balance—end of period$38,410 $32,423 
Available and unused lines of credit$— $75 
Allowance for Loan Losses—The ALL represents management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio. Estimating the amount of the ALL requires the exercise of significant judgment and the use of estimates related to the amount and timing of expected future cash flows on impaired loans, estimated losses on pools of homogeneous loans based on historical loss experience, and consideration of other qualitative factors such as current economic trends and conditions, all of which may be susceptible to significant change.
There are many factors affecting the ALL; some are quantitative, while others require qualitative judgment. The process for determining the ALL (which management believes adequately considers potential factors which result in probable credit losses), includes subjective elements and, therefore, may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provision for loan losses could be required that could adversely affect the Company’s earnings or financial position in future periods. Allocations of the ALL may be made for specific loans but the entire ALL is available for any loan that, in management’s judgment, should be charged-off or for which an actual loss is realized.
As an integral part of their examination process, various regulatory agencies also review the Bank’s ALL. Such agencies may require that changes in the ALL be recognized when such regulators’ credit evaluations differ from those of our management based on information available to the regulators at the time of their examinations.
Changes in the ALL by loan type for the periods presented below were as follows:
Commercial/Agricultural Real EstateC&I/Agricultural operatingResidential MortgageConsumer InstallmentUnallocatedTotal
Twelve months ended December 31, 2022:
Allowance for Loan Losses:
Beginning balance, January 1, 2022$12,354 $1,959 $518 $225 $774 $15,830 
Charge-offs(157)(310)(35)(45)— (547)
Recoveries74 35 2 50 — 161 
Provision1,280 571 89 (109)34 1,865 
Total Allowance on originated loans13,551 2,255 574 121 808 17,309 
Other acquired loans:
Beginning balance, January 1, 2022856 69 130 28 — 1,083 
Charge-offs(48)(36)(33)(3)— (120)
Recoveries28 1 27 1 — 57 
Provision(302)29 (99)(18)— (390)
Total allowance on other acquired loans534 63 25 8 — 630 
Total allowance on acquired loans534 63 25 8 — 630 
Ending Balance, December 31, 2022$14,085 $2,318 $599 $129 $808 $17,939 
Allowance for Loan Losses at December 31, 2022:
Amount of allowance for loan losses arising from loans individually evaluated for impairment$519 $249 $48 $10 $— $826 
Amount of allowance for loan losses arising from loans collectively evaluated for impairment$13,566 $2,069 $551 $119 $808 $17,113 
Loans Receivable as of December 31, 2022:
Ending balance of originated loans$1,017,529 $150,239 $88,045 $17,130 $— $1,272,943 
Ending balance of purchased credit-impaired loans5,748 362 890 — — 7,000 
Ending balance of other acquired loans102,002 14,218 19,716 256 — 136,192 
Ending balance of loans$1,125,279 $164,819 $108,651 $17,386 $— $1,416,135 
Ending balance: individually evaluated for impairment$16,874 $3,292 $5,998 $755 $— $26,919 
Ending balance: collectively evaluated for impairment$1,108,405 $161,527 $102,653 $16,631 $— $1,389,216 
Commercial/Agricultural Real EstateC&I/Agricultural operatingResidential MortgageConsumer InstallmentUnallocatedTotal
Twelve months ended December 31, 2021:
Allowance for Loan Losses:
Beginning balance, January 1, 2021$10,271 $2,112 $1,041 $489 $906 $14,819 
Charge-offs(51)— — (54)— (105)
Recoveries14 110 9 41 — 174 
Provision2,120 (263)(532)(251)(132)942 
Total Allowance on originated loans12,354 1,959 518 225 774 15,830 
Other acquired loans:
Beginning balance, January 1, 20211,684 141 335 64 — 2,224 
Charge-offs(200)(7)— (27)— (234)
Recoveries14 13 4 4 — 35 
Provision(642)(78)(209)(13)— (942)
Total Allowance on other acquired loans856 69 130 28 — 1,083 
Total Allowance on acquired loans856 69 130 28 — 1,083 
Ending balance, December 31, 2021$13,210 $2,028 $648 $253 $774 $16,913 
Allowance for Loan Losses at December 31, 2021:
Amount of allowance for loan losses arising from loans individually evaluated for impairment$797 $99 $113 $— $— $1,009 
Amount of allowance for loan losses arising from loans collectively evaluated for impairment$12,413 $1,929 $535 $253 $774 $15,904 
Loans Receivable as of December 31, 2021:
Ending balance of originated loans$883,430 $142,894 $67,726 $24,444 $— $1,118,494 
Ending balance of purchased credit-impaired loans9,060 1,101 1,044 — — 11,205 
Ending balance of other acquired loans142,339 18,515 26,091 401 — 187,346 
Ending balance of loans$1,034,829 $162,510 $94,861 $24,845 $— $1,317,045 
Ending balance: individually evaluated for impairment$21,792 $3,337 $7,007 $257 $— $32,393 
Ending balance: collectively evaluated for impairment$1,013,037 $159,173 $87,854 $24,588 $— $1,284,652 
Loans receivable by loan type as of the end of the periods shown below were as follows:
 Commercial/Agricultural Real Estate LoansC&I/Agricultural operatingResidential MortgageConsumer InstallmentTotals
Dec 31,Dec 31,Dec 31,Dec 31,Dec 31,Dec 31,Dec 31,Dec 31,Dec 31,Dec 31,
 2022202120222021202220212022202120222021
Performing loans
Performing TDR loans$1,336 $4,618 $960 $649 $2,875 $2,681 $— $36 $5,171 $7,984 
Performing loans other1,115,465 1,021,346 162,417 160,570 104,287 90,591 17,345 24,729 1,399,514 1,297,236 
Total performing loans1,116,801 1,025,964 163,377 161,219 107,162 93,272 17,345 24,765 1,404,685 1,305,220 
Nonperforming loans (1)
Nonperforming TDR loans1,878 3,389 391 554 348 593 — 3 2,617 4,539 
Nonperforming loans other6,600 5,476 1,051 737 1,141 996 41 77 8,833 7,286 
Total nonperforming loans8,478 8,865 1,442 1,291 1,489 1,589 41 80 11,450 11,825 
Total loans$1,125,279 $1,034,829 $164,819 $162,510 $108,651 $94,861 $17,386 $24,845 $1,416,135 $1,317,045 
(1)Nonperforming loans are either 90+ days past due or nonaccrual.

    
An aging analysis of the Company’s commercial/agricultural real estate and non-real estate, consumer real estate and non-real estate and purchased third party loans as of December 31, 2022 and 2021, respectively, was as follows:
30-59 Days Past Due and Accruing60-89 Days Past Due and AccruingGreater Than 89 Days Past Due and AccruingTotal Past Due AccruingNonaccrual LoansTotal Past Due Accruing and Nonaccrual LoansCurrentTotal Loans
December 31, 2022
Commercial/Agricultural real estate:
Commercial real estate$202 $88 $— $290 $5,736 $6,026 $719,945 $725,971 
Agricultural real estate4,992 — — 4,992 2,742 7,734 80,174 87,908 
Multi-family real estate— — — — — — 208,908 208,908 
Construction and land development3,975 — — 3,975 — 3,975 98,517 102,492 
C&I/Agricultural operating:
Commercial and industrial— 26 — 26 552 578 135,435 136,013 
SBA PPP loans— — — — — — — — 
Agricultural operating826 — — 826 890 1,716 27,090 28,806 
Residential mortgage:
Residential mortgage767 479 236 1,482 1,253 2,735 102,654 105,389 
Purchased HELOC loans— — — — — — 3,262 3,262 
Consumer installment:
Originated indirect paper15 — — 15 27 42 10,194 10,236 
Other Consumer39 2 10 51 4 55 7,095 7,150 
Total$10,816 $595 $246 $11,657 $11,204 $22,861 $1,393,274 $1,416,135 
December 31, 2021
Commercial/Agricultural real estate:
Commercial real estate$36 $— $— $36 $5,374 $5,410 $693,055 $698,465 
Agricultural real estate498 4 — 502 3,490 3,992 74,503 78,495 
Multi-family real estate— — — — — — 178,349 178,349 
Construction and land development— — — — — — 79,520 79,520 
C&I/Agricultural operating:
Commercial and industrial— 32 — 32 298 330 121,837 122,167 
SBA PPP loans— — — — — — 8,7558,755 
Agricultural operating1,123 — — 1,123 993 2,116 29,47231,588 
Residential mortgage:
Residential mortgage1,471 487 156 2,114 1,268 3,382 87,60890,990
Purchased HELOC loans117 — — 117 165 282 3,5893,871
Consumer installment:
Originated indirect paper38 27 — 65 55 120 15,85115,971
Other Consumer58 10 4 72 22 94 8,7808,874
Total$3,341 $560 $160 $4,061 $11,665 $15,726 $1,301,319 $1,317,045 
At December 31, 2022, the Company individually evaluated loans for impairment with a recorded investment of $26,823, consisting of (1) $7,000 PCI loans, with a carrying amount of $6,904; (2) $7,018 TDR loans, net of TDR PCI loans; and (3) $12,901 of substandard non-TDR loans, non-PCI loans. The $26,823 total of loans individually evaluated for impairment includes $5,171 of performing TDR loans. At December 31, 2021, the Company individually evaluated loans for impairment with a recorded investment of $31,740, consisting of (1) $11,205 PCI loans, with a carrying amount of $10,552; (2) $9,860 TDR loans, net of TDR PCI loans; and (3) $11,328 of substandard non-TDR loans, non-PCI loans. The $31,740 total of loans individually evaluated for impairment includes $7,984 of performing TDR loans. A loan is identified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. Performing TDRs consist of loans that have been modified and are performing in accordance with the modified terms for a sufficient length of time, generally six months, or loans that were modified on a proactive basis.
A summary of loans evaluated for impairment as of December 31, 2022 was as follows:
 Recorded InvestmentUnpaid Principal BalanceRelated AllowanceAverage Recorded InvestmentInterest Income Recognized
December 31, 2022
With No Related Allowance Recorded:
Commercial/Agricultural real estate$9,741 $9,766 $— $13,657 $549 
C&I/Agricultural operating2,744 2,754 — 4,467 200 
Residential mortgage5,846 5,907 — 6,304 276 
Consumer installment745 745 — 307 5 
Total$19,076 $19,172 $— $24,735 $1,030 
With An Allowance Recorded:
Commercial/Agricultural real estate$7,108 $7,108 $519 $6,028 $273 
C&I/Agricultural operating538 538 249 273 48 
Residential mortgage91 91 48 298 65 
Consumer installment10 10 10 2 2 
Total$7,747 $7,747 $826 $6,601 $388 
December 31, 2022 Totals
Commercial/Agricultural real estate$16,849 $16,874 $519 $19,685 $822 
C&I/Agricultural operating3,282 3,292 249 4,741 248 
Residential mortgage5,937 5,998 48 6,603 341 
Consumer installment755 755 10 310 7 
Total$26,823 $26,919 $826 $31,336 $1,418 
At December 31, 2022, the Company had six residential real estate loans, secured by residential real estate properties, for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction, with a recorded investment of $258. At December 31, 2022, the Company had three commercial real estate loans, secured by commercial and agricultural real estate properties, for which formal foreclosure proceedings are in process according to local requirements of the applicable jurisdiction, with a recorded investment of $6,294.
A summary of loans evaluated for impairment as of December 31, 2021 was as follows:
 Recorded InvestmentUnpaid Principal BalanceRelated AllowanceAverage Recorded InvestmentInterest Income Recognized
December 31, 2021
With No Related Allowance Recorded:
Commercial/Agricultural real estate$15,521 $15,905 $— $19,412 $964 
C&I/Agricultural operating3,153 3,337 — 4,622 146 
Residential mortgage6,221 6,306 — 7,316 316 
Consumer installment256 256 — 306 85 
Total$25,151 $25,804 $— $31,656 $1,511 
With An Allowance Recorded:
Commercial/Agricultural real estate$5,887 $5,887 $797 $4,089 $62 
C&I/Agricultural operating— — 99 391 84 
Residential mortgage701 701 113 890 17 
Consumer installment1 1 — 2 — 
Total$6,589 $6,589 $1,009 $5,372 $163 
December 31, 2021 Totals
Commercial/Agricultural real estate$21,408 $21,792 $797 $23,501 $1,026 
C&I/Agricultural operating3,153 3,337 99 5,013 230 
Residential mortgage6,922 7,007 113 8,206 333 
Consumer installment257 257 — 308 85 
Total$31,740 $32,393 $1,009 $37,028 $1,674 

Troubled Debt Restructuring – A TDR includes a loan modification where a borrower is experiencing financial difficulty, and the Bank grants a concession to that borrower that the Bank would not otherwise consider, except for the borrower’s financial difficulties. Concessions may include: extension of the loan’s term, renewals of existing balloon loans, reductions in interest rates and consolidating existing Bank loans at modified terms. A TDR may be either on accrual or nonaccrual status based upon the performance of the borrower and management’s assessment of collectability. If a TDR is placed on nonaccrual status, it remains there until a sufficient period of performance under the restructured terms has occurred at which time it is returned to accrual status. There was one accruing, delinquent TDR, greater than 60 days past due, with a recorded investment of $15 at December 31, 2022, compared to one accruing, delinquent TDR, greater than 60 days past due, with a recorded investment of $4 at December 31, 2021.
Following is a summary of TDR loans by accrual status as of December 31, 2022 and December 31, 2021.
 December 31December 31
 20222021
Troubled debt restructure loans:
Accrual status$5,171 $7,984 
Non-accrual status2,617 4,539 
Total$7,788 $12,523 
There was one TDR commitment totaling $26 meeting our TDR criteria as of December 31, 2022 and there were no TDR commitments meeting our TDR criteria as of December 31, 2021. There were unused lines of credit totaling $484 and $10 meeting our TDR criteria as of December 31, 2022 and December 31, 2021, respectively.
The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the years ended December 31, 2022 and December 31, 2021:
Number of ContractsModified RateModified PaymentModified Under- writingOtherPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentSpecific Reserve
Twelve months ended December 31, 2022
TDRs:
Commercial/Agricultural real estate7 $1,241 $— $1,964 $— $3,205 $3,205 $— 
C&I/Agricultural operating5 1,424 — 736 — 2,160 2,160 — 
Residential mortgage11 116 147 507 — 770 770 — 
Consumer installment— — — — — — — — 
Totals23 $2,781 $147 $3,207 $— $6,135 $6,135 $— 


Number of ContractsModified RateModified PaymentModified Under- writingOtherPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentSpecific Reserve
Twelve months ended December 31, 2021
TDRs:
Commercial/Agricultural real estate3 $39 $81 $— $— $120 $120 $— 
C&I/Agricultural operating1 — — 240 — 240 240 — 
Residential mortgage8 252 295 202 — 749 749 — 
Consumer installment3 6 — 18 — 24 24 — 
Totals15 $297 $376 $460 $— $1,133 $1,133 $— 

A summary of loans by loan class modified in a troubled debt restructuring as of December 31, 2022 and December 31, 2021:
 December 31, 2022December 31, 2021
 Number of
Modifications		Recorded
Investment		Number of
Modifications		Recorded
Investment
Troubled debt restructurings:
Commercial/Agricultural real estate14 $3,214 19 $8,007 
C&I/Agricultural operating8 1,351 7 1,203 
Residential mortgage45 3,223 43 3,274 
Consumer installment— — 7 39 
Total loans67 $7,788 76 $12,523 
The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the years ended December 31, 2022 and December 31, 2021, as well as the recorded investment in these restructured loans as of December 31, 2022 and December 31, 2021:
 December 31, 2022December 31, 2021
 Number of
Modifications		Recorded
Investment		Number of
Modifications		Recorded
Investment
Troubled debt restructurings:
Commercial/Agricultural real estate— $— — $— 
C&I/Agricultural operating1 231 — — 
Residential mortgage2 40 — — 
Consumer installment— — 1 3 
Total troubled debt restructurings3 $271 1 $3 
    
All acquired loans were initially recorded at fair value at the acquisition date. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheet are as follows:
December 31, 2022December 31, 2021
Accountable for under ASC 310-30 (PCI loans)
Outstanding balance$7,000 $11,205 
Carrying amount$6,904 $10,552 
Accountable for under ASC 310-20 (non-PCI loans)
Outstanding balance$136,192 $187,346 
Carrying amount$134,522 $184,399 
Total acquired loans
Outstanding balance$143,192 $198,551 
Carrying amount$141,426 $194,951 

The table below shows scheduled accretion by year for the accretable difference recognized due to fair value purchase accounting on recent whole bank acquisitions. In addition, the table below includes $1,165 of accretable discount from purchased impaired loans with the original non-accretable discount transferred to accretable discount. The accretion on this balance is scheduled to be approximately $80 in 2023; however, large balance payoffs, as seen in 2022, 2021 and 2020, would accelerate this accretion and lower future years accretion.

Fiscal years ending December 31,Purchase Accounting Accretable Discount
2023$363 
2024215 
2025180 
202684 
202777 
Thereafter751 
Total$1,670 

 
The following table provides changes in non-accretable yield for all acquired loans from prior acquisitions with deteriorated credit quality:     
 December 31, 2022December 31, 2021
Balance at beginning of period$653 $1,087 
Additions to non-accretable difference for acquired purchased credit impaired loans— — 
Non-accretable difference realized as interest from payoffs of purchased credit impaired loans(239)(105)
Transfers from non-accretable difference to accretable discount(126)(329)
Non-accretable difference transferred to OREO due to loan foreclosure(192)— 
Balance at end of period$96 $653