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LOANS, ALLOWANCE FOR CREDIT LOSSES
 12 Months Ended
Dec. 31, 2024
Receivables [Abstract]  
LOANS, ALLOWANCE FOR CREDIT LOSSES LOANS, ALLOWANCE FOR CREDIT LOSSES
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 other consumer loans secured primarily by automobiles and other personal assets and originated indirect paper loans secured primarily by boats and recreational vehicles. 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, 2024, and December 31, 2023, follows:

December 31, 2024
December 31, 2023
Amortized Cost% of TotalAmortized Cost% of Total
Commercial/Agricultural real estate:
Commercial real estate$707,009 51.7 %$748,447 51.2 %
Agricultural real estate72,738 5.3 %83,157 5.7 %
Multi-family real estate220,706 16.1 %228,004 15.6 %
Construction and land development78,146 5.7 %110,218 7.5 %
C&I/Agricultural operating:
Commercial and industrial115,535 8.4 %121,190 8.3 %
Agricultural operating31,017 2.3 %25,695 1.8 %
Residential mortgage:
Residential mortgage131,892 9.6 %128,479 8.8 %
Purchased HELOC loans2,956 0.2 %2,880 0.2 %
Consumer installment:
Originated indirect paper3,970 0.3 %6,535 0.4 %
Other consumer5,012 0.4 %6,187 0.4 %
Total loans receivable$1,368,981 100 %$1,460,792 100 %
Less Allowance for credit losses(20,549)(22,908)
Net loans receivable$1,348,432 $1,437,884 
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, 2024, and December 31, 2023, 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.

Residential and consumer loans are typically not rated until they are past due 90 days at month-end which is why they are classified as pass graded 1 - 5 and once 90 days past due at month-end or nonaccrual, get assigned a grade 7.
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, 2024, and gross charge-offs for the twelve months ended December 31, 2024:

Amortized Cost Basis by Origination Year
20242023202220212020PriorRevolvingRevolving to TermTotal
Commercial/Agricultural real estate:
Commercial real estate
Risk rating 1 to 5$49,580 $76,381 $123,806 $207,155 $89,539 $141,264 $7,669 $— $695,394 
Risk rating 6173 1,406 2,238 138 — — — — 3,955 
Risk rating 7— — 553 2,445 214 4,448 — — 7,660 
Total$49,753 $77,787 $126,597 $209,738 $89,753 $145,712 $7,669 $— $707,009 
Current period gross charge-offs$— $— $— $39 $— $— $— $— $39 
Agricultural real estate
Risk rating 1 to 5$3,556 $10,870 $17,160 $10,098 $7,335 $16,642 $715 $— $66,376 
Risk rating 6— — — — — 140 — — 140 
Risk rating 7— 202 477 5,102 — 441 — — 6,222 
Total$3,556 $11,072 $17,637 $15,200 $7,335 $17,223 $715 $— $72,738 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Multi-family real estate
Risk rating 1 to 5$8,777 $7,790 $40,426 $101,213 $43,115 $19,005 $380 $— $220,706 
Risk rating 6— — — — — — — — — 
Risk rating 7— — — — — — — — — 
Total$8,777 $7,790 $40,426 $101,213 $43,115 $19,005 $380 $— $220,706 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction and land development
Risk rating 1 to 5$23,832 $25,102 $10,186 $346 $1,297 $868 $16,412 $— $78,043 
Risk rating 6— — — — — 103 — — 103 
Risk rating 7— — — — — — — — — 
Total$23,832 $25,102 $10,186 $346 $1,297 $971 $16,412 $— $78,146 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Commercial/Agricultural operating:
Commercial and industrial
Risk rating 1 to 5$17,599 $13,049 $28,343 $13,629 $8,787 $4,197 $24,809 $— $110,413 
Risk rating 6— — 3,062 13 — — 292 626 3,993 
Risk rating 7— 500 74 401 — — 154 — 1,129 
Total$17,599 $13,549 $31,479 $14,043 $8,787 $4,197 $25,255 $626 $115,535 
Current period gross charge-offs$— $131 $7 $— $5 $— $— $— $143 
Agricultural operating
Risk rating 1 to 5$3,373 $3,062 $3,144 $563 $198 $1,884 $17,609 $— $29,833 
Risk rating 6— 49 — 37 240 — 65 — 391 
Risk rating 7— — 473 320 — — — — 793 
Total$3,373 $3,111 $3,617 $920 $438 $1,884 $17,674 $— $31,017 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
ContinuedAmortized Cost Basis by Origination Year
20242023202220212020PriorRevolvingRevolving to TermTotal
Residential mortgage:
Residential mortgage
Risk rating 1 to 5$13,400 $28,598 $30,386 $7,369 $2,141 $30,004 $17,349 $— $129,247 
Risk rating 6— — — — — — — — — 
Risk rating 7— — 130 — — 2,507 8 — 2,645 
Total$13,400 $28,598 $30,516 $7,369 $2,141 $32,511 $17,357 $— $131,892 
Current period gross charge-offs$— $— $— $— $— $4 $— $— $4 
Purchased HELOC loans
Risk rating 1 to 5$— $— $— $— $— $— $2,839 $— $2,839 
Risk rating 6— — — — — — — — — 
Risk rating 7— — — — — — 117 — 117 
Total$— $— $— $— $— $— $2,956 $— $2,956 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Consumer installment:
Originated indirect paper
Risk rating 1 to 5$— $— $— $— $— $3,944 $— $— $3,944 
Risk rating 6— — — — — — — — — 
Risk rating 7— — — — — 26 — — 26 
Total$— $— $— $— $— $3,970 $— $— $3,970 
Current period gross charge-offs$— $— $— $— $— $17 $— $— $17 
Other consumer
Risk rating 1 to 5$1,519 $1,229 $811 $385 $341 $214 $511 $— $5,010 
Risk rating 6— — — — — — — — — 
Risk rating 72 — — — — — — — 2 
Total$1,521 $1,229 $811 $385 $341 $214 $511 $— $5,012 
Current period gross charge-offs$— $4 $3 $1 $— $— $10 $— $18 
Total loans receivable$121,811 $168,238 $261,269 $349,214 $153,207 $225,687 $88,929 $626 $1,368,981 
Total current period gross charge-offs$— $135 $10 $40 $5 $21 $10 $— $221 
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 
     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, 2024 and December 31, 2023. A summary of the changes in those loans is as follows:
Twelve months endedTwelve months ended
 December 31, 2024December 31, 2023
Balance—beginning of period$36,592 $38,410 
New loan originations1,006 624 
Repayments(2,856)(2,442)
Balance—end of period$34,742 $36,592 
Available and unused lines of credit$19 $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, 2024 and December 31, 2023:
Commercial/Agricultural Real EstateC&I/Agricultural operatingResidential MortgageConsumer InstallmentTotal
Twelve months ended December 31, 2024
Allowance for Credit Losses - Loans:
ACL - Loans, at beginning of period$18,784 $1,105 $2,744 $275 $22,908 
Charge-offs(39)(143)(4)(35)(221)
Recoveries56 36 7 22 121 
Additions/(reversals) to ACL - Loans via provision for credit losses charged to operations(2,285)332 (258)(48)(2,259)
ACL - Loans, at end of period$16,516 $1,330 $2,489 $214 $20,549 
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 $334 at December 31, 2024 and $1,250 at December 31, 2023, 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, 2024 and December 31, 2023.

December 31, 2024 and Twelve Months EndedDecember 31, 2023 and Twelve Months Ended
ACL - Unfunded Commitments - beginning of period$1,250 $— 
Cumulative effect of ASU 2016-13 adoption— 1,537 
Reversals to ACL - Unfunded Commitments via provision for credit losses charged to operations(916)(287)
ACL - Unfunded Commitments - End of period$334 $1,250 
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, 2024 and December 31, 2023, respectively, was as follows:
(Loan balances at amortized cost)30-59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past DueTotal
Past Due		CurrentTotal
Loans
December 31, 2024
Commercial/Agricultural real estate:
Commercial real estate$857 $322 $367 $1,546 $705,463 $707,009 
Agricultural real estate26 — 556 582 72,156 72,738 
Multi-family real estate— — — — 220,706 220,706 
Construction and land development— — — — 78,146 78,146 
C&I/Agricultural operating:
Commercial and industrial566 50 564 1,180 114,355 115,535 
Agricultural operating— — 793 793 30,224 31,017 
Residential mortgage:
Residential mortgage1,873 796 500 3,169 128,723 131,892 
Purchased HELOC loans— — 117 117 2,839 2,956 
Consumer installment:
Originated indirect paper25 — — 25 3,945 3,970 
Other consumer27 — — 27 4,985 5,012 
Total $3,374 $1,168 $2,897 $7,439 $1,361,542 $1,368,981 

(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 
Nonaccrual Loans - The following table presents the amortized cost basis of loans on nonaccrual status and of nonaccrual loans individually evaluated at December 31, 2024 and December 31, 2023, with no allowance for credit losses:

December 31, 2024Total Nonaccrual LoansNonaccrual with no Allowance for Credit LossesLoans Past Due Over 89 Days Still Accruing
Commercial/Agricultural real estate:
Commercial real estate$4,594 $4,374 $— 
Agricultural real estate6,222 6,020 — 
Multi-family real estate— — — 
Construction and land development103 103 — 
C&I/Agricultural operating:
Commercial and industrial597 564 — 
Agricultural operating793 793 — 
Residential mortgage:
Residential mortgage741 548 186 
Purchased HELOC loans117 117 — 
Consumer installment:
Originated indirect paper1 1 — 
Other consumer— — — 
Total $13,168 $12,520 $186 

December 31, 2023Total Nonaccrual LoansNonaccrual with no Allowance for Credit Losses
Commercial/Agricultural real estate:
Commercial real estate$10,359 $10,347 
Agricultural real estate391 391 
Multi-family real estate— — 
Construction and land development54 54 
C&I/Agricultural operating:
Commercial and industrial— — 
Agricultural operating1,180 1,180 
Residential mortgage:
Residential mortgage1,167 934 
Purchased HELOC loans— — 
Consumer installment:
Originated indirect paper15 15 
Other consumer18 18 
Total $13,184 $12,939 
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, 2024 and December 31, 2023, due to nonaccrual loan payoffs was $473 and $505, respectively.
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. However, if it is probable that the Company will foreclose on the collateral, the use of the fair value of the collateral to calculate the allowance for credit loss is required. 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, 2024 and December 31, 2023.
Collateral Type
December 31, 2024Real EstateOther AssetsTotalWithout an AllowanceWith an AllowanceAllowance Allocation
Commercial/Agricultural real estate:
Commercial real estate$9,004 $— $9,004 $6,597 $2,407 $258 
Agricultural real estate6,222 — 6,222 6,020 202 99 
Multi-family real estate— — — — — — 
Construction and land development103 — 103 103 — — 
C&I/Agricultural operating:
Commercial and industrial— 1,806 1,806 1,146 660 49 
Agricultural operating— 793 793 793 — — 
Residential mortgage:
Residential mortgage3,066 — 3,066 2,773 293 49 
Purchased HELOC loans— — — — — — 
Consumer installment:
Originated indirect paper— 25 25 25 — — 
Other consumer— 2 2 2 — — 
Total $18,395 $2,626 $21,021 $17,459 $3,562 $455 
There were no outstanding commitments to borrowers experiencing financial difficulty as of December 31, 2024. There were unused lines of credit totaling $135 on loans with borrowers experiencing financial difficulties as of December 31, 2024.
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 
The tables below detail Loan Modifications Made to Borrowers Experiencing Financial Difficulty during the twelve months ended December 31, 2024:
Term Extension
Loan ClassAmortized Cost Basis at
December 31, 2024		% of Total Class of Financing Receivables
Commercial real estate$225 0.03 %
Commercial and industrial$741 0.64 %
Residential mortgage$20 0.02 %
Other-Than-Insignificant Payment Delay
Loan ClassAmortized Cost Basis at
December 31, 2024		% of Total Class of Financing Receivables
Commercial real estate$1,182 0.17 %
Commercial and industrial$822 0.71 %
Residential mortgage$236 0.18 %
Term Extension and Principal Forgiveness
Loan ClassAmortized Cost Basis at
December 31, 2024		% of Total Class of Financing Receivables
Other consumer$2 0.04 %

The following tables describe the financial effect of the modifications made to borrowers experiencing financial difficulty during the twelve months ended December 31, 2024:
Term Extension
Loan ClassFinancial Effect
Commercial real estate
A weighted average of 6 months was added to the term of the loans
Commercial and industrial
A weighted average of 13 months was added to the term of the loans
Residential mortgage
A weighted average of 54 months was added to the term of the loans
Other-Than-Insignificant Payment Delay
Loan ClassFinancial Effect
Commercial real estate
Payments were deferred a weighted average of 3 months
Commercial and industrial
Payments were deferred a weighted average of 3 months
Residential mortgage
Payments were deferred a weighted average of 3 months
Term Extension and Principal Forgiveness
Loan TypeFinancial Effect
Other Consumer
A weighted average of 3 months was added to the term of the loan and a principal balance of $2 was forgiven
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, 2024.
Current30-59 Days Past Due60-89 Days Past DueGreater Than 89 Days Past Due
Commercial real estate$1,407 $— $— $— 
Commercial and industrial1,513 — 50 — 
Residential mortgage256 — — — 
Other consumer2 — — — 
Total$3,178 $— $50 $— 

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 $—