Loans and Allowance for Credit Losses | Note 4: Categories of loans at December 31, 2023 and June 30, 2023 include: December 31, June 30, 2023 2023 (Unaudited) Real estate loans: Commercial $ 9,291,749 $ 6,009,615 Residential 67,889,553 65,857,446 Multifamily 675,290 688,393 Agricultural 3,923,853 4,044,648 Construction and land 9,896,114 8,567,060 Home equity line of credit (HELOC) 873,581 355,296 Commercial and industrial 7,744,900 3,398,557 Consumer 929,535 801,476 Total loans 101,224,575 89,722,491 Less: Undisbursed loans in process 925,616 8,202,918 Net deferred loan fees 118,665 47,756 Allowance for credit losses 529,472 263,422 Net loans $ 99,650,822 $ 81,208,395 The following tables present the activity in the allowance for credit losses based on portfolio segment for the three and six months ended December 31, 2023 and 2022. Balance Provision (credit) Balance September 30, 2023 for loan losses Charge-offs Recoveries December 31, 2023 (Unaudited) Real estate loans: Commercial $ 40,492 $ 38,845 $ — $ — $ 79,337 Residential 214,574 (6,210) — — 208,364 Multifamily 1,757 (202) — — 1,555 Agricultural 15,791 (2,261) — — 13,530 Construction and land 73,004 48,298 — — 121,302 HELOC 1,253 868 — — 2,121 Commercial and industrial 90,448 (1,484) — — 88,964 Consumer 1,920 12,379 — — 14,299 Total $ 439,239 $ 90,233 $ — $ — $ 529,472 Balance Provision (credit) Balance September 30, 2022 for loan losses Charge-offs Recoveries December 31, 2022 (Unaudited) Real estate loans: Commercial $ 19,694 $ (572) $ — $ — $ 19,122 Residential 175,740 (2,267) — — 173,473 Multifamily 1,879 (35) — — 1,844 Agricultural 15,904 1,671 — — 17,575 Construction and land 6,087 1,572 — — 7,659 HELOC 1,196 (178) — — 1,018 Commercial and industrial 1,304 (128) — — 1,176 Consumer 1,080 (63) — — 1,017 Total $ 222,884 $ — $ — $ — $ 222,884 Balance Adoption of Provision (credit) Balance June 30, 2023 ASC 326 for loan losses Charge-offs Recoveries December 31, 2023 (Unaudited) Real estate loans: Commercial $ 27,379 $ (2,203) $ 54,161 $ — $ — $ 79,337 Residential 167,714 41,930 (1,280) — — 208,364 Multifamily 1,786 (9) (222) — — 1,555 Agricultural 17,091 (1,196) (2,365) — — 13,530 Construction and land 12,491 10,144 98,667 — — 121,302 HELOC 34,779 (33,888) 1,230 — — 2,121 Commercial and industrial 882 31,562 56,520 — — 88,964 Consumer 1,300 455 12,544 — — 14,299 Total $ 263,422 $ 46,795 $ 219,255 $ — $ — $ 529,472 Balance Provision (credit) Balance June 30, 2022 for loan losses Charge-offs Recoveries December 31, 2022 (Unaudited) Real estate loans: Commercial $ 20,643 $ (1,521) $ — $ — $ 19,122 Residential 177,830 (4,357) — — 173,473 Multifamily 1,926 (82) — — 1,844 Agricultural 13,868 3,707 — — 17,575 Construction and land 5,477 2,182 — — 7,659 HELOC 1,306 (288) — — 1,018 Commercial and industrial 709 467 — — 1,176 Consumer 1,125 (108) — — 1,017 Total $ 222,884 $ — $ — $ — $ 222,884 At December 31, 2023, the Company maintained a reserve for unfunded loan commitments totaling $23,578 , which is included in accrued interest payable and other liabilities on the accompanying consolidated balance sheet. As a part of the adoption of ASU No. 2016-13, the Company recorded an initial adjustment to the reserve for unfunded loan commitments of . The provision (credit) for credit losses on unfunded loan commitments totaled The following tables present the balance in the allowance for credit losses and the recorded investment in loans based on portfolio segment as of December 31, 2023 and June 30, 2023 : Allowance for credit losses Loans Individually Collectively Individually Collectively (Unaudited) December 31, 2023 Real estate loans: Commercial $ — $ 79,337 $ — $ 9,291,749 Residential — 208,364 470,175 66,942,864 Multifamily — 1,555 — 675,290 Agricultural — 13,530 — 3,923,853 Construction and land — 121,302 37,094 9,859,020 HELOC — 2,121 — 873,581 Commercial and industrial — 88,964 — 7,295,798 Consumer 12,372 1,927 22,037 907,498 Total $ 12,372 $ 517,100 $ 529,306 $ 99,769,653 Allowance for credit losses Loans Individually Collectively Individually Collectively June 30, 2023 Real estate loans: Commercial $ — $ 27,379 $ — $ 6,009,615 Residential 7 167,714 304,096 65,553,350 Multifamily — 1,786 — 688,393 Agricultural — 17,091 — 4,044,648 Construction and land — 12,491 — 8,567,060 HELOC — 34,779 — 355,296 Commercial and industrial — 882 — 3,398,557 Consumer — 1,300 — 801,476 Total $ 7 $ 263,422 $ 304,096 $ 89,418,395 The Company has adopted a standard loan grading system for all non-residential real estate loans loans. Loan grades are numbered 1 through 8. Grades 1 through 3 are considered satisfactory grades. The grade of 4, Monitor, represents loans requiring more than normal attention. The grade of 5, Special Mention, represents loans of lower quality and is considered criticized. The grades of 6, or Substandard, and 7, Doubtful, refer to loans that are classified. Pass (1-3) Monitor (4) Loans requiring more than normal attention resulting from underwriting weaknesses as to repayment terms, loan structure, financial and/or documentation exceptions. Special Mention (5) Loans which may include the characteristics of the Monitor classification, problems that need to be addresses by both the lender and the borrower. Substandard (6) Loans which may include the characteristics of the Special Mention classification, but also reflects financial and other problems that might result in some loss at a future date and/or reliance upon collateral for ultimate collection. Doubtful (7) Loss (8) Internally prepared loan gradings for commercial loans are updated at least annually. Residential real estate and hom equity lines of credit are generally evaluated based on whether or not the loan is performing according to the contractual terms of the loans as of the consolidated balance sheet date. Risk characteristics of each loan portfolio segment are described as follows: Commercial Real Estate These loans include commercial real estate and residential real estate secured by property with five or more units. The main risks are changes in the value of the collateral, ability of borrowers to collect rents, vacancy and changes in the tenants’ employment status. Management specifically considers unemployment and changes in real estate values in the Company’s market area. Residential Real Estate These loans include first liens and junior liens on 1-4 family residential real estate (both owner and non-owner occupied). The main risks for these loans are changes in the value of the collateral and stability of the local economic environment and its impact on the borrowers’ employment. Management specifically considers unemployment and changes in real estate values in the Company’s market area. Multifamily These loans include loans on residential real estate secured by property with five or more units. The main risks are changes in the value of collateral, ability of borrowers to collect rents, vacancy and changes in the tenants’ employment status. Management specifically considers unemployment and changes in real estate values in the Company’s market area. Agriculture Real Estate These loans include loans on farm ground, vacant land for development and loans on commercial real estate. The main risks are changes in the value of the collateral and changes in the economy or borrowers’ business operations. Management specifically considers unemployment and changes in real estate values in the Company’s market area. Construction and Land Real Estate These loans include construction loans for 1-4 family residential and commercial properties (both owner and non-owner occupied) and first liens on land. The main risks for construction loans include uncertainties in estimating costs of construction and in estimating the market value of the completed project. The main risks for land loans are changes in the value of the collateral and stability of the local economic environment. Management specifically considers unemployment and changes in real estate values in the Company's market area. HELOC These loans are generally secured by owner-occupied 1-4 family residences. The main risks for these loans are changes in the value of the collateral and stability of the local economic environment and its impact on the borrowers’ employment. Management specifically considers unemployment and changes in real estate values in the Company’s market area. Commercial and Industrial The commercial and industrial portfolio includes loans to commercial customers for use in financing working capital needs, equipment purchases and expansions. The loans in this category are repaid primarily from the cash flow of a borrower’s principal business operation. Credit risk in these loans is driven by creditworthiness of the borrower and the economic conditions that impact the cash flow stability from business operations. Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory, equipment and real estate. Consumer Loans These loans include vehicle loans, share loans and unsecured loans. The main risks for these loans are the depreciation of the collateral values (vehicles) and the financial condition of the borrowers. Major employment changes are specifically considered by management. Some consumer loans are unsecured and have no underlying collateral. The following table reflects loan balances as of December 31, 2023 based on year of origination: Revolving Loans Amortized 2024 2023 2022 2021 2020 Prior Cost Basis Total December 31, 2023 (Unaudited) Commercial Pass (1-3) $ 3,996,311 $ 1,072,658 $ 1,489,566 $ 362,080 $ 305,987 $ 2,065,147 $ — $ 9,291,749 Monitor (4) — — — — — — — — Special Mention (5) — — — — — — — — Substandard (6) — — — — — — — — Doubtful (7) — — — — — — — — Total commercial $ 3,996,311 $ 1,072,658 $ 1,489,566 $ 362,080 $ 305,987 $ 2,065,147 $ — $ 9,291,749 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Multifamily Pass (1-3) $ — $ — $ 675,290 $ — $ — $ — $ — $ 675,290 Monitor (4) — — — — — — — — Special Mention (5) — — — — — — — — Substandard (6) — — — — — — — — Doubtful (7) — — — — — — — — Total multifamily $ — $ — $ 675,290 $ — $ — $ — $ — $ 675,290 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Agricultural Pass (1-3) $ — $ 1,163,713 $ 981,897 $ 637,486 $ 278,000 $ 640,176 $ — $ 3,701,272 Monitor (4) — — — — — 222,581 — 222,581 Special Mention (5) — — — — — — — — Substandard (6) — — — — — — — — Doubtful (7) — — — — — — — — Total agricultural $ — $ 1,163,713 $ 981,897 $ 637,486 $ 278,000 $ 862,757 $ — $ 3,923,853 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Construction and land Pass (1-3) $ 4,492,729 $ 3,141,973 $ 2,224,318 $ — $ — $ — $ — $ 9,859,020 Monitor (4) — — — — — — — — Special Mention (5) — — — — — — — — Substandard (6) — — — — — 37,094 — 37,094 Doubtful (7) — — — — — — — — Total construction and land $ 4,492,729 $ 3,141,973 $ 2,224,318 $ — $ — $ 37,094 $ — $ 9,896,114 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Commercial and industrial Pass (1-3) $ 7,257,539 $ 198,898 $ — $ — $ 288,463 $ — $ — $ 7,744,900 Monitor (4) — — — — — — — — Special Mention (5) — — — — — — — — Substandard (6) — — — — — — — — Doubtful (7) — — — — — — — — Total commercial and industrial $ 7,257,539 $ 198,898 $ — $ — $ 288,463 $ — $ — $ 7,744,900 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Consumer Pass (1-3) $ 239,368 $ 330,060 $ 191,278 $ 44,478 $ 18,492 $ 83,822 $ — $ 907,498 Monitor (4) — — — — — — — — Special Mention (5) — — — — — — — — Substandard (6) — 22,037 — — — — — 22,037 Doubtful (7) — — — — — — — — Total consumer $ 239,368 $ 352,097 $ 191,278 $ 44,478 $ 18,492 $ 83,822 $ — $ 929,535 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Residential Performing $ 4,436,068 $ 5,969,428 $ 14,829,261 $ 17,331,649 $ 8,572,458 $ 15,863,129 $ 417,385 $ 67,419,378 Nonperforming — 146,145 48,276 — — 275,754 — 470,175 Total residential $ 4,436,068 $ 6,115,573 $ 14,877,537 $ 17,331,649 $ 8,572,458 $ 16,138,883 $ 417,385 $ 67,889,553 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — HELOC Performing $ 434,116 $ 37,767 $ 150,383 $ 75,245 $ 44,586 $ 131,484 $ — $ 873,581 Nonperforming — — — — — — — — Total HELOC $ 434,116 $ 37,767 $ 150,383 $ 75,245 $ 44,586 $ 131,484 $ — $ 873,581 Gross charge-offs $ — $ — $ — $ — $ — $ — $ — $ — Information regarding the credit quality indicators most closely monitored for other than residential real estate loans by class as of June 30, 2023 follows: Special Pass Monitor Mention Substandard Doubtful Total June 30, 2023 Real estate loans: Commercial $ 5,868,689 $ 140,926 $ — $ — $ — $ 6,009,615 Multifamily 688,393 — — — — 688,393 Agricultural 3,822,067 222,581 — — — 4,044,648 Construction and land 5,254,192 3,274,936 — 37,932 — 8,567,060 Commercial and industrial 3,398,557 — — — — 3,398,557 Consumer 801,476 — — — — 801,476 Total loans $ 19,833,374 $ 3,638,443 $ — $ 37,932 $ — $ 23,509,749 The following tables present the credit risk profile of the Company’s residential real estate loan portfolio based on internal rating category and payment activity as of June 30, 2023: Performing Nonperforming Total June 30, 2023 Real estate loans: Residential $ 65,553,350 $ 304,096 $ 65,857,446 HELOC 355,296 — 355,296 Total $ 65,908,646 $ 304,096 $ 66,212,742 The Company evaluates the loan risk grading system definitions and allowance for credit losses methodology on an ongoing basis. No significant changes were made to either during the quarter ended December 31, 2023. The following tables present the Company’s loan portfolio aging analysis of the recorded investment in loans as of December 31, 2023 and June 30, 2023: December 31, 2023 Greater Than Total Loans > 30-59 Days 60-89 Days 90 Days Total Total Loans 90 Days & Past Due Past Due Past Due Past Due Current Receivable Accruing (Unaudited) Real estate loans: Commercial $ — $ — $ — $ — $ 9,291,749 $ 9,291,749 $ — Residential 432,650 — 251,957 684,607 67,204,946 67,889,553 — Multifamily — — — — 675,290 675,290 — Agricultural — — — — 3,923,853 3,923,853 — Construction and land 37,094 — — 37,094 9,859,020 9,896,114 — HELOC — — — — 873,581 873,581 — Commercial and industrial — — — — 7,744,900 7,744,900 — Consumer 3,733 — 22,037 25,770 903,765 929,535 — Total $ 473,477 $ — $ 273,994 $ 747,471 $ 100,477,104 $ 101,224,575 $ — June 30, 2023 Greater Than Total Loans > 30-59 Days 60-89 Days 90 Days Total Total Loans 90 Days & Past Due Past Due Past Due Past Due Current Receivable Accruing Real estate loans: Commercial $ — $ — $ — $ — $ 6,009,615 $ 6,009,615 $ — Residential — 616,352 117,395 733,747 65,123,699 65,857,446 — Multifamily — — — — 688,393 688,393 — Agricultural — — — — 4,044,648 4,044,648 — Construction and land — — — — 8,567,060 8,567,060 — HELOC — — — — 355,296 355,296 — Commercial and industrial — — — — 3,398,557 3,398,557 — Consumer — — — — 801,476 801,476 — Total $ — $ 616,352 $ 117,395 $ 733,747 $ 88,988,744 $ 89,722,491 $ — Information regarding collateral dependent loans as of December 31, 2023 is as follows: As of December 31, 2023 Recorded Related Investment Allowance (Unaudited) Real estate Commercial $ — $ — Residential — — Multifamily — — Agricultural — — Construction and land — — Home equity line of credit (HELOC) — — Commercial and industrial — — Consumer 22,037 12,372 Totals $ 22,037 $ 12,372 Information about impaired loans as of and for the three and six months ended December 31, 2022 and as of and for the year ended June 30, 2023 is as follows: As of and for the year ended June 30, 2023 Unpaid Average Balance of Interest Recorded Principal Specific Impaired Income Balance Balance Allowance Loans Recognized Loans without a specific valuation allowance: Real estate Residential $ 243,764 $ 243,764 $ — $ 248,057 $ 7,456 Loans with a specific valuation allowance: Real estate Residential 60,332 60,332 7 61,670 3,886 Totals $ 304,096 $ 304,096 $ 7 $ 309,727 $ 11,342 Three Months Ended December 31, Six Months Ended December 31, 2022 2022 Average Balance of Interest Income Average Balance of Interest Income Impaired Loans Recognized Impaired Loans Recognized (Unaudited) (Unaudited) Loans without a specific valuation allowance: Real estate Residential $ 205,890 $ 1,637 $ 206,352 $ 3,245 Loans with a specific valuation allowance: Real estate Residential 62,039 1,375 62,373 2,094 Totals $ 267,929 $ 3,012 $ 268,725 $ 5,339 Information regarding nonaccrual loans as of December 31, 2023 and June 30, 2023 is as follows: Amortized Cost Nonaccrual Loans Nonaccrual Loans Total Nonaccrual Interest Income Basis of Loans 90+ With No Allowance With an Allowance Total Nonaccrual Loans at Beginning Recognized on Days Past Due for Credit Losses for Credit Losses Loans of Year Nonaccrual Loans Not on Nonaccrual December 31, 2023 (Unaudited) Real estate loans: Commercial $ — $ — $ — $ — $ — $ — Residential 470,175 — 470,175 304,096 — — Multifamily — — — — — — Agricultural — — — — — — Construction and land 37,094 — 37,094 — — — Home equity line of credit (HELOC) — — — — — — Commercial and industrial — — — — — — Consumer — 22,037 22,037 — — — Total $ 507,269 $ 22,037 $ 529,306 $ 304,096 $ — $ — There was no accrued interest written off by reversing interest income for the three and six months ended December 31, 2023 and 2022. During the six months ended December 31, 2023, there were no significant modifications of loans to borrowers who were experiencing financial difficulty. The Company did not provide any modifications under these circumstances to borrowers. There were |