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LOANS, ALLOWANCE FOR CREDIT LOSSES AND IMPAIRED LOANS
 12 Months Ended
Dec. 31, 2023
Receivables [Abstract]  
LOANS, ALLOWANCE FOR CREDIT LOSSES AND IMPAIRED LOANS LOANS, ALLOWANCE FOR CREDIT LOSSES AND IMPAIRED LOANS
Portfolio Segments:
Commercial and agricultural real estate 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 underwritten 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.
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 are stated at the principal amount outstanding net of unearned net deferred fees and costs and loans in process, unearned discounts on acquired loans, and allowance for credit losses (“ACL”). Unearned net deferred fees and costs includes deferred loan origination fees reduced by loan origination costs and is amortized to interest income over the life of the related loan using methods that approximated the effective interest rate method. Interest on substantially all loans is credited to income based on the principal amount outstanding. A summary of loans at December 31, 2023 follows:

December 31, 2023
Amortized Cost% of Total
Commercial/Agricultural real estate:
Commercial real estate$748,447 51.2 %
Agricultural real estate83,157 5.7 %
Multi-family real estate228,004 15.6 %
Construction and land development110,218 7.5 %
C&I/Agricultural operating:
Commercial and industrial121,190 8.3 %
Agricultural operating25,695 1.8 %
Residential mortgage:
Residential mortgage128,479 8.8 %
Purchased HELOC loans2,880 0.2 %
Consumer installment:
Originated indirect paper6,535 0.4 %
Other consumer6,187 0.4 %
Total loans receivable$1,460,792 100 %
Less Allowance for credit losses(22,908)
Net loans receivable$1,437,884 
Loans are stated at the unpaid principal balance outstanding at December 31, 2022.
December 31, 2022
Loan Principal Balance% of Total
Commercial/Agricultural real estate:
Commercial real estate$725,971 51.5 %
Agricultural real estate87,908 6.2 %
Multi-family real estate208,908 14.8 %
Construction and land development102,492 7.3 %
C&I/Agricultural operating:
Commercial and industrial136,013 9.6 %
Agricultural operating28,806 2.0 %
Residential mortgage:
Residential mortgage105,389 7.5 %
Purchased HELOC loans3,262 0.2 %
Consumer installment:
Originated indirect paper10,236 0.7 %
Other consumer7,150 0.5 %
Gross Loans$1,416,135 100.3 %
Less:
Unearned net deferred fees and costs and loans in process(2,585)(0.2)%
Unamortized discount on acquired loans(1,766)(0.1)%
Total loans receivable$1,411,784 100.0 %
Less Allowance for loan losses(17,939)
Net loans$1,393,845 
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.

As of December 31, 2023 and December 31, 2022, there were no loans classified as doubtful with a risk rating of 8 and no loans classified as loss with a risk rating of 9.
Below is a summary of the amortized cost of loans summarized by class, credit quality risk rating and year of origination as of December 31, 2023 and gross charge-offs for the twelve months ended December 31, 2023:



Amortized Cost Basis by Origination Year
20232022202120202019PriorRevolvingRevolving to TermTotal
Commercial/Agricultural real estate:
Commercial real estate
Risk rating 1 to 5$73,564 $133,583 $236,774 $90,881 $71,104 $107,999 $10,204 $— $724,109 
Risk rating 6309 — 9,510 — — — — — 9,819 
Risk rating 725 696 3,213 4,548 183 5,854 — — 14,519 
Total$73,898 $134,279 $249,497 $95,429 $71,287 $113,853 $10,204 $— $748,447 
Current period gross charge-offs$— $— $10 $— $— $4 $— $— $14 
Agricultural real estate
Risk rating 1 to 5$16,335 $19,026 $11,582 $7,719 $5,463 $15,418 $1,009 $— $76,552 
Risk rating 6— 171 5,409 — 152 482 — — 6,214 
Risk rating 7— 360 — — 31 — — — 391 
Total$16,335 $19,557 $16,991 $7,719 $5,646 $15,900 $1,009 $— $83,157 
Current period gross charge-offs$— $— $— $32 $— $— $— $— $32 
Multi-family real estate
Risk rating 1 to 5$5,016 $50,617 $95,686 $45,685 $8,591 $22,364 $45 $— $228,004 
Risk rating 6— — — — — — — — — 
Risk rating 7— — — — — — — — — 
Total$5,016 $50,617 $95,686 $45,685 $8,591 $22,364 $45 $— $228,004 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction and land development
Risk rating 1 to 5$42,639 $37,783 $18,912 $8,014 $119 $1,124 $1,314 $— $109,905 
Risk rating 6— — — — — 110 — — 110 
Risk rating 7— — — — — 54 149 — 203 
Total$42,639 $37,783 $18,912 $8,014 $119 $1,288 $1,463 $— $110,218 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial/Agricultural operating:
Commercial and industrial
Risk rating 1 to 5$16,758 $31,915 $28,059 $11,406 $4,746 $2,023 $24,059 $— $118,966 
Risk rating 6— — — — 5 — 2,200 — 2,205 
Risk rating 7— — — — — 2 — 17 19 
Total$16,758 $31,915 $28,059 $11,406 $4,751 $2,025 $26,259 $17 $121,190 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Agricultural operating
Risk rating 1 to 5$4,734 $3,908 $856 $746 $295 $2,144 $11,831 $— $24,514 
Risk rating 6— — — — — — — — — 
Risk rating 7— 476 704 — — 1 — — 1,181 
Total$4,734 $4,384 $1,560 $746 $295 $2,145 $11,831 $— $25,695 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
ContinuedAmortized Cost Basis by Origination Year
20232022202120202019PriorRevolvingRevolving to TermTotal
Residential mortgage:
Residential mortgage
Risk rating 1 to 5$28,808 $33,660 $8,743 $2,610 $2,292 $33,744 $15,544 $— $125,401 
Risk rating 6— — — — — — — — — 
Risk rating 7— 141 — — 14 2,875 — 48 3,078 
Total$28,808 $33,801 $8,743 $2,610 $2,306 $36,619 $15,544 $48 $128,479 
Current period gross charge-offs$— $— $10 $— $— $68 $— $— $78 
Purchased HELOC loans
Risk rating 1 to 5$— $— $— $— $— $— $2,880 $— $2,880 
Risk rating 6— — — — — — — — — 
Risk rating 7— — — — — — — — — 
Total$— $— $— $— $— $— $2,880 $— $2,880 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Consumer installment:
Originated indirect paper
Risk rating 1 to 5$— $— $— $— $— $6,491 $— $— $6,491 
Risk rating 6— — — — — — — — — 
Risk rating 7— — — — — 44 — — 44 
Total$— $— $— $— $— $6,535 $— $— $6,535 
Current period gross charge-offs$— $— $— $— $— $13 $— $— $13 
Other consumer
Risk rating 1 to 5$2,104 $1,525 $763 $559 $402 $274 $530 $1 $6,158 
Risk rating 6— — — — — — — — — 
Risk rating 79 2 — — 16 1 1 — 29 
Total$2,113 $1,527 $763 $559 $418 $275 $531 $1 $6,187 
Current period gross charge-offs$— $2 $1 $11 $3 $6 $— $— $23 
Total loans receivable$190,301 $313,863 $420,211 $172,168 $93,413 $201,004 $69,766 $66 $1,460,792 
Total current period gross charge-offs$— $2 $21 $43 $3 $91 $— $— $160 
Below is a summary of the unpaid principal balance of loans summarized by class and credit quality risk rating as of December 31, 2022:
1 to 567TOTAL
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$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 

     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, 2023 and December 31, 2022. A summary of the changes in those loans is as follows:
Twelve months endedTwelve months ended
 December 31, 2023December 31, 2022
Balance—beginning of period$38,410 $32,423 
New loan originations624 7,994 
Repayments(2,442)(2,007)
Balance—end of period$36,592 $38,410 
Available and unused lines of credit$603 $— 

Allowance for Credit Losses - Loans- On January 1, 2023, the Company adopted Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses (Topic 326), Measurement of Credit Losses on Financial instruments and transitioned to the Current Expected Credit Loss (“CECL”) model to estimate losses based on the lifetime of the loan. Under the new methodology, the ACL is comprised of collectively evaluated and individually evaluated components. The allowance for credit losses (“ACL”) represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining life of the assets. The provision for credit losses is the charge against current earnings that is determined by the Company as the amount needed to maintain an adequate allowance for credit losses. In determining the adequacy of the allowance for credit losses, and therefore the provision to be charged to current earnings, the Company relies predominantly on a disciplined credit review and approval process that extends to the full range of the Company’s credit exposure. The review process is directed by the overall lending policy and is intended to identify, at the earliest possible stage, the borrowers who might be facing financial difficulty. Factors considered by the Company in evaluating the overall adequacy of the allowance include historical net loan losses, the level and composition of nonaccrual, past due and modifications, trends in volumes and terms of loans, effects of changes in risk selection and underwriting standards or lending practices, lending staff changes, concentrations of credit, industry conditions and the current economic conditions in the region where the Company operates. The Company estimates the appropriate level of allowance for credit losses by evaluating loans collectively on a pooled basis when similar risk characteristics exist, and on an individual basis when management determines that a loan does not share similar risk characteristics with other loans.
The following tables present the balance and activity in the allowance for credit losses (“ACL”) - loans by portfolio segment for the twelve months ended December 31, 2023:
Commercial/Agricultural Real EstateC&I/Agricultural operatingResidential MortgageConsumer InstallmentUnallocatedTotal
Twelve months ended December 31, 2023
Allowance for Credit Losses - Loans:
ACL - Loans, at beginning of period$14,085 $2,318 $599 $129 $808 $17,939 
Cumulative effect of ASU 2016-13 adoption4,510 (331)1,119 216 (808)4,706 
Charge-offs(46)— (78)(36)— (160)
Recoveries489 47 42 33 — 611 
Additions/(reversals) to ACL - Loans via provision for credit losses charged to operations(254)(929)1,062 (67)— (188)
ACL - Loans, at end of period$18,784 $1,105 $2,744 $275 $— $22,908 
Allowance for Credit Losses - Unfunded Commitments - In addition to the ACL - Loans, the Company has established an ACL - Unfunded Commitments of $1,250 at December 31, 2023 and $0 at December 31, 2022, classified in other liabilities on the consolidated balance sheets. The following table presents the balance and activity in the ACL - Unfunded Commitments for the twelve months ended December 31, 2023 and December 31, 2022.

December 31, 2023 and Twelve Months EndedDecember 31, 2022 and Twelve Months Ended
ACL - Unfunded Commitments - beginning of period$— $— 
Cumulative effect of ASU 2016-13 adoption1,537 — 
Reversals to ACL - Unfunded Commitments via provision for credit losses charged to operations(287)— 
ACL - Unfunded Commitments - End of period$1,250 $— 

Provision for credit losses - The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments (including loans and off-balance sheet credit exposures) after net charge-offs have been deducted to bring the ACL to a level that, in managements judgement, is necessary to absorb expected credit losses over the lives of the respective financial instruments. The following table presents the components of the provision for credit losses.

December 31, 2023 and Twelve Months Ended
Provision for credit losses on:
Loans $(188)
Unfunded Commitments(287)
Total provision for credit losses$(475)
Allowance for Loan Losses - Prior to the adoption of ASU 2016-13, the Allowance for Loan Losses (“ALL”) represented management’s estimate of probable and inherent credit losses in the Bank’s loan portfolio. Estimating the amount of the ALL required 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 have been susceptible to significant change.
There were many factors affecting the ALL; some were quantitative, while others required qualitative judgment. The process for determining the ALL (which management believed adequately considered potential factors which resulted in probable credit losses), included subjective elements and, therefore, may have been susceptible to significant change. To the extent actual outcomes differed from management estimates, additional provision for loan losses could have been required that could have adversely affected the Company’s earnings or financial position in future periods. Allocations of the ALL may have been made for specific loans but the entire ALL was available for any loan that, in management’s judgment, should have been charged-off or for which an actual loss was realized.
As an integral part of their examination process, various regulatory agencies also reviewed the Bank’s ALL. Such agencies may have required that changes in the ALL be recognized when such regulators’ credit evaluations differed 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, 2023$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 
Loans receivable by loan type as of December 31, 2022, were as follows:
Commercial/Agricultural Real EstateC&I/Agricultural operatingResidential MortgageConsumer InstallmentTotal
Performing loans
Performing TDR loans$1,336 $960 $2,875 $— $5,171 
Performing loans other1,115,465 162,417 104,287 17,345 1,399,514 
Total performing loans1,116,801 163,377 107,162 17,345 1,404,685 
Nonperforming loans (1)— 
Nonperforming TDR loans1,878 391 348 — 2,617 
Nonperforming loans other6,600 1,051 1,141 41 8,833 
Total nonperforming loans8,478 1,442 1,489 41 11,450 
Total loans$1,125,279 $164,819 $108,651 $17,386 $1,416,135 
(1) Nonperforming loans are either 90+ days past due or nonaccrual.
An aging analysis of the Company’s commercial/agricultural real estate, C&I, agricultural operating, residential mortgage, consumer installment and purchased third party loans as of December 31, 2023 and December 31, 2022, respectively, was as follows:
(Loan balances at amortized cost)30-59 Days Past Due and Accruing60-89 Days Past Due and AccruingGreater Than 89 Days Past Due and AccruingTotal
Past Due and Accruing		Nonaccrual LoansTotal Past Due Accruing and Nonaccrual LoansCurrentTotal
Loans
December 31, 2023
Commercial/Agricultural real estate:
Commercial real estate$50 $308 $— $358 $10,359 $10,717 $737,730 $748,447 
Agricultural real estate— — — — 391 391 82,766 83,157 
Multi-family real estate— — — — — — 228,004 228,004 
Construction and land development— — — — 54 54 110,164 110,218 
C&I/Agricultural operating:
Commercial and industrial248 — — 248 — 248 120,942 121,190 
Agricultural operating— — — — 1,180 1,180 24,515 25,695 
Residential mortgage:
Residential mortgage826 350 387 1,563 1,167 2,730 125,749 128,479 
Purchased HELOC loans117 — — 117 — 117 2,763 2,880 
Consumer installment:
Originated indirect paper66 — — 66 15 81 6,454 6,535 
Other consumer38 — 2 40 18 58 6,129 6,187 
Total $1,345 $658 $389 $2,392 $13,184 $15,576 $1,445,216 $1,460,792 
(Loan balances at unpaid principal balance)30-59 Days Past Due and Accruing60-89 Days Past Due and AccruingGreater Than 89 Days Past Due and AccruingTotal
Past Due and Accruing		Nonaccrual 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 
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 
Nonaccrual Loans - The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated at December 31, 2023 with no allowance for credit losses and interest income that would have been recorded under the original terms of such nonaccrual loans:
December 31, 2023Total Nonaccrual LoansNonaccrual with no Allowance for Credit LossesInterest Income Not Recorded for Nonaccrual loans
Commercial/Agricultural real estate:
Commercial real estate$10,359 $10,347 $497 
Agricultural real estate391 391 46 
Multi-family real estate— — — 
Construction and land development54 54 1 
C&I/Agricultural operating:
Commercial and industrial— — — 
Agricultural operating1,180 1,180 120 
Residential mortgage:
Residential mortgage1,167 934 68 
Purchased HELOC loans— — — 
Consumer installment:
Originated indirect paper15 15 1 
Other consumer18 18 1 
Total $13,184 $12,939 $734 
The Company’s policy is to discontinue the accrual of interest income on all loans for which principal or interest is past due according to the following schedules:
•Commercial/agricultural real estate loans, past due 90 days or more;
•Commercial and industrial/agricultural operating loans past due 90 days or more;
•Closed ended consumer installment loans past due 120 days or more; and
•Residential mortgage and open ended consumer installment loans past due 180 days or more.
The accrual of interest is discontinued earlier when, in the opinion of management, there is reasonable doubt as to the timely collection of interest or principal. Once interest accruals are discontinued, accrued but uncollected interest is charged against current year income. Subsequent receipts on non-accrual loans are recorded as a reduction of principal, and interest income is recorded only after principal recovery is reasonably assured. Interest on loans determined to be modified is recognized on an accrual basis in accordance with the restructured terms if the loan is in compliance with the modified terms. Nonaccrual loans are returned to accrual status when, in the opinion of management, the financial position of the borrower indicates there is no longer any reasonable doubt as to the timely collection of interest or principal. The Company requires a period of satisfactory performance of not less than six months before returning a nonaccrual loan to accrual status.
The amount of interest income recognized by the Company for the twelve months ended December 31, 2023, due to nonaccrual loan payoffs was $505.
Collateral Dependent Loans - A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following table presents the amortized cost basis of collateral dependent loans by portfolio segment and collateral type that were individually evaluated to determine expected credit losses and the related allowance for credit losses as of December 31, 2023.

Collateral Type
December 31, 2023Real EstateOther AssetsTotalWithout an AllowanceWith an AllowanceAllowance Allocation
Commercial/Agricultural real estate:
Commercial real estate$15,086 $— $15,086 $11,350 $3,736 $703 
Agricultural real estate6,605 — 6,605 6,605 — — 
Multi-family real estate— — — — — — 
Construction and land development313 — 313 313 — — 
C&I/Agricultural operating:
Commercial and industrial— 2,219 2,219 2,219 — — 
Agricultural operating— 1,181 1,181 1,181 — — 
Residential mortgage:
Residential mortgage3,145 — 3,145 2,591 554 88 
Purchased HELOC loans— — — — — — 
Consumer installment:
Originated indirect paper— 44 44 44 — — 
Other consumer— 29 29 29 — — 
Total $25,149 $3,473 $28,622 $24,332 $4,290 $791 
There were no outstanding commitments to borrowers experiencing financial difficulty as of December 31, 2023. There were unused lines of credit totaling $618 on loans with borrowers experiencing financial difficulties as of December 31, 2023.
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, non-PCI loans. The $26,823 recorded investment of loans individually evaluated for impairment includes $5,171 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 the Company’s loans individually 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 
The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the twelve months ended December 31, 2023:

Term Extension
Loan ClassAmortized Cost Basis at
December 31, 2023		% of Total Class of Financing Receivables
Commercial real estate$4,694 0.63 %
Commercial and industrial$2,200 1.82 %
Residential mortgage$35 0.03 %
Other consumer$1 0.02 %
Other-Than-Insignificant Payment Delay
Loan ClassAmortized Cost Basis at
December 31, 2023		% of Total Class of Financing Receivables
Residential mortgage$69 0.05 %
Other consumer$19 0.31 %


The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2023:
Term Extension
Loan ClassFinancial Effect
Commercial real estate
A weighted average of 20 months was added to the term of the loans
Commercial and industrial
A weighted average of 3 months was added to the term of the loans
Residential mortgage
A weighted average of 16 months was added to the term of the loans
Other consumer
A weighted average of 12 months was added to the term of the loans
Other-Than-Insignificant Payment Delay
Loan ClassFinancial Effect
Residential mortgage
Payments were deferred a weighted average of 6 months
Other consumer
Payments were deferred a weighted average of 3 months

The Company closely monitors the performance of loans that have been modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table shows the performance of such loans that have been modified during the twelve months ended December 31, 2023.
Current30-59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past Due
Commercial real estate$4,694 $— $— $— 
Commercial and industrial2,200 — — — 
Residential mortgage35 — 69 — 
Other consumer20 — — — 
Total$6,949 $— $69 $— 
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.
Following is a summary of TDR loans by accrual status as of December 31, 2022.
 December 31
 2022
Troubled debt restructure loans:
Accrual status$5,171 
Non-accrual status2,617 
Total$7,788 
There was one TDR commitment totaling $26 meeting our TDR criteria as of December 31, 2022. There were unused lines of credit totaling $484 meeting our TDR criteria as of December 31, 2022.
The following provides detail, including specific reserve and reasons for modification, related to loans identified as TDRs during the year ended December 31, 2022:
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 $— 

A summary of loans by loan class modified in a troubled debt restructuring as of December 31, 2022 are below:
December 31, 2022
Number of ModificationsRecorded Investment
Troubled debt restructurings:
Commercial/ Agricultural real estate14 $3,214 
C&I/ Agricultural operating8 1,351 
Residential mortgage45 3,223 
Consumer installment— — 
Total loans67 $7,788 
The following table provides the number of loans modified in a TDR during the previous twelve months which subsequently defaulted during the year ended December 31, 2022, as well as the recorded investment in these restructured loans as of December 31, 2022:
December 31, 2022
Number of ModificationsRecorded Investment
Troubled debt restructurings:
Commercial/ Agricultural real estate— $— 
C&I/ Agricultural operating1 231 
Residential mortgage2 40 
Consumer installment— — 
Total troubled debt restructurings3 $271 

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, 2022
Accountable for under ASC 310-30 (PCI loans)
Outstanding balance$7,000 
Carrying amount$6,904 
Accountable for under ASC 310-20 (non-PCI loans)
Outstanding balance$136,192 
Carrying amount$134,522 
Total acquired loans
Outstanding balance$143,192 
Carrying amount$141,426 

The following table below shows scheduled accretion by year for the accretable differences 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, 2022
Balance at beginning of period$653 
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)
Transfers from non-accretable difference to accretable discount (126)
Non-accretable difference transferred to OREO due to loan foreclosure(192)
Balance at end of period$96