LOANS AND ALLOWANCE FOR CREDIT LOSSES | 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES: For the year ended December 31, 2022, the tables to follow outline the Company’s loan portfolio by the ten portfolio segments where applicable. Loans held-for-investment by portfolio segment are as follows (dollars in thousands): December 31, 2022 2021 Commercial: C&I * $ 917,317 $ 837,075 Municipal 221,090 177,905 Total Commercial 1,138,407 1,014,980 Agricultural 76,947 98,089 Real Estate: Construction & Development 959,426 749,793 Farm 306,322 217,220 Non-Owner Occupied CRE 732,089 623,434 Owner Occupied CRE 954,400 821,653 Residential 1,575,758 1,334,419 Total Real Estate 4,527,995 3,746,519 Consumer: Auto 550,635 405,416 Non-Auto 147,884 123,968 Total Consumer 698,519 529,384 Total Loans 6,441,868 5,388,972 Less: Allowance for credit losses ( 75,834 ) ( 63,465 ) Loans, net $ 6,366,034 $ 5,325,507 * All disclosures for the C&I loan segment include PPP loan balances, net of deferred fees, as disclosed on the face of the consolidated balance sheet. Outstanding loan balances at December 31, 2022 and 2021, are net of unearned income, including net deferred loan fees. Our subsidiary bank has established a line of credit with the Federal Home Loan Bank of Dallas (“FHLB”) to provide liquidity and meet pledging requirements for those customers eligible to have securities pledged to secure certain uninsured deposits. At December 31, 2022 , this available line of credit was $ 2,341,985,000 . At December 31, 2022, $ 4,154,241,000 in loans held by our bank subsidiary were subject to blanket liens as security for this line of credit. At December 31, 2022 , there was no balance outstanding under this line of credit. The Company’s nonaccrual loans, loans still accruing and past due 90 days or more and restructured loans are as follows (dollars in thousands): December 31, 2022 2021 Nonaccrual loans $ 24,306 $ 31,652 Loans still accruing and past due 90 days or more — 8 Troubled debt restructured loans* 19 21 Total $ 24,325 $ 31,681 * Troubled debt restructured loans of $ 3,624,000 and $ 6,721,000 , for which interest collection is doubtful, are included in nonaccrual loans as of December 31, 2022 and 2021 , respectively. The Company had $ 24,325,000 and $ 34,158,000 in nonaccrual, past due 90 days or more and still accruing, restructured loans and foreclosed assets at December 31, 2022 and 2021 , respectively. Nonaccrual loans totaled $ 24,306,000 and $ 31,652,000 at December 31, 2022 and 2021, respectively, and consisted of the following (in thousands): December 31, 2022 2021 Commercial: C&I $ 5,057 $ 5,370 Municipal — — Total Commercial 5,057 5,370 Agricultural 324 4,920 Real Estate: Construction & Development 1,567 708 Farm 85 1,173 Non-Owner Occupied CRE 2,321 2,671 Owner Occupied CRE 7,092 7,897 Residential 7,400 8,360 Total Real Estate 18,465 20,809 Consumer: Auto 429 514 Non-Auto 31 39 Total Consumer 460 553 Total $ 24,306 $ 31,652 The Company recognized interest income on nonaccrual loans prior to being recognized as nonaccrual of approximately $ 1,607,000 , $ 2,122,000 and $ 1,006,000 during the years ended December 31, 2022, 2021 and 2020, respectively. No significant additional funds are committed to be advanced in connection with nonaccrual loans as of December 31, 2022. Summary information on the allowance for credit losses for the year ended December 31, 2022 and 2021, are outlined by portfolio segment in the following tables (in thousands): Year-ended December 31, 2022 C&I Municipal Agricultural Construction & Farm Beginning balance $ 12,280 $ 348 $ 1,597 $ 17,627 $ 663 Provision for loan losses 3,485 678 ( 702 ) 8,916 1,294 Recoveries 953 — 155 — — Charge-offs ( 589 ) — ( 9 ) ( 100 ) — Ending balance $ 16,129 $ 1,026 $ 1,041 $ 26,443 $ 1,957 Year-ended December 31, 2022 (continued) Non-Owner Owner Residential Auto Non-Auto Total Beginning balance $ 10,722 $ 10,828 $ 8,133 $ 896 $ 371 $ 63,465 Provision for loan losses ( 2,499 ) ( 1,062 ) 1,014 252 164 11,540 Recoveries 852 699 114 293 215 3,281 Charge-offs — ( 537 ) ( 186 ) ( 596 ) ( 435 ) ( 2,452 ) Ending balance $ 9,075 $ 9,928 $ 9,075 $ 845 $ 315 $ 75,834 Year-ended December 31, 2021 C&I Municipal Agricultural Construction & Farm Beginning balance $ 13,609 $ 1,552 $ 1,255 $ 13,512 $ 1,876 Provision for loan losses ( 1,879 ) ( 1,204 ) 2,989 4,114 ( 1,323 ) Recoveries 2,150 — 36 1 110 Charge-offs ( 1,600 ) — ( 2,683 ) — — Ending balance $ 12,280 $ 348 $ 1,597 $ 17,627 $ 663 Year-ended December 31, 2021 (continued) Non-Owner Owner Residential Auto Non-Auto Total Beginning balance $ 8,391 $ 12,347 $ 12,601 $ 1,020 $ 371 $ 66,534 Provision for loan losses 1,635 ( 2,109 ) ( 4,471 ) 85 74 ( 2,089 ) Recoveries 702 821 96 401 211 4,528 Charge-offs ( 6 ) ( 231 ) ( 93 ) ( 610 ) ( 285 ) ( 5,508 ) Ending balance 10,722 10,828 8,133 896 371 $ 63,465 Additionally, the Company records a reserve for unfunded commitments in other liabilities which totaled $ 12,323,000 and $ 6,436,000 at December 31, 2022 and 2021, respectively. The $ 11,540,000 provision for loan losses in 2022 above is combined with the provision for unfunded commitments of $ 5,887,000 and reported in the aggregate under the provision for credit losses in the statement of earnings for the year ended December 31, 2022. The reversal of provision for loan losses above of $ 2,089,000 in 2021 is combined with the provision for unfunded commitments of $ 950,000 and reported in the aggregate under the provision for credit losses in the statement of earnings for the year ended December 31, 2021. The Company’s loans that are individually evaluated for credit losses (both collateral and non-collateral dependent) and their related allowances as of December 31, 2022 and December 31, 2021, are summarized in the following table by loan segment (in thousands): December 31, 2022 Collateral Collateral Non-Collateral Total Loans Related Related Total Commercial: C&I $ — $ 5,057 $ 24,325 $ 29,382 $ 3,513 $ 4,885 $ 8,398 Municipal — — 58 58 — — — Total Commercial — 5,057 24,383 29,440 3,513 4,885 8,398 Agricultural 116 209 354 679 122 276 398 Real Estate: Construction & Development 577 990 4,873 6,440 193 112 305 Farm — 85 1,578 1,663 2 34 36 Non-Owner Occupied CRE 2,062 259 36,037 38,358 16 2,341 2,357 Owner Occupied CRE 4,363 2,728 29,115 36,206 91 1,509 1,600 Residential 5,132 2,268 28,583 35,983 229 1,215 1,444 Total Real Estate 12,134 6,330 100,186 118,650 531 5,211 5,742 Consumer: Auto — 429 931 1,360 1 1 2 Non-Auto — 31 538 569 — 1 1 Total Consumer — 460 1,469 1,929 1 2 3 Total $ 12,250 $ 12,056 $ 126,392 $ 150,698 $ 4,167 $ 10,374 $ 14,541 December 31, 2021 Collateral Collateral Non-Collateral Total Loans Related Related Total Commercial: C&I $ 749 $ 4,621 $ 19,021 $ 24,391 $ 2,533 $ 4,094 $ 6,627 Municipal — — 109 109 — — — Total Commercial 749 4,621 19,130 24,500 2,533 4,094 6,627 Agricultural 3,026 1,894 478 5,398 1,086 359 1,445 Real Estate: Construction & Development 102 606 4,765 5,473 90 135 225 Farm 997 176 1,969 3,142 — 2 2 Non-Owner Occupied CRE 2,543 128 31,797 34,468 15 4,044 4,059 Owner Occupied CRE 6,548 1,349 40,607 48,504 152 3,329 3,481 Residential 5,990 2,370 29,210 37,570 307 1,719 2,026 Total Real Estate 16,180 4,629 108,348 129,157 564 9,229 9,793 Consumer: Auto — 514 1,161 1,675 1 3 4 Non-Auto — 39 416 455 — 1 1 Total Consumer — 553 1,577 2,130 1 4 5 Total $ 19,955 $ 11,697 $ 129,533 $ 161,185 $ 4,184 $ 13,686 $ 17,870 The Company’s allowance for loans that are individually evaluated for credit losses and collectively evaluated for credit losses as of December 31, 2022 and December 31, 2021 , are summarized in the following table by loan segment (in thousands). Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories. December 31, 2022 C&I Municipal Agricultural Construction Farm Loans individually evaluated for credit losses $ 8,398 $ — $ 398 $ 305 $ 36 Loans collectively evaluated for credit losses 7,731 1,026 643 26,138 1,921 Total $ 16,129 $ 1,026 $ 1,041 $ 26,443 $ 1,957 December 31, 2022 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 2,357 $ 1,600 $ 1,444 $ 2 $ 1 $ 14,541 Loans collectively evaluated for credit losses 6,718 8,328 7,631 843 314 61,293 Total $ 9,075 $ 9,928 $ 9,075 $ 845 $ 315 $ 75,834 December 31, 2021 C&I Municipal Agricultural Construction Farm Loans individually evaluated for credit losses $ 6,627 $ — $ 1,445 $ 225 $ 2 Loans collectively evaluated for credit losses 5,653 348 152 17,402 661 Total $ 12,280 $ 348 $ 1,597 $ 17,627 $ 663 December 31, 2021 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 4,059 $ 3,481 $ 2,026 $ 4 $ 1 $ 17,870 Loans collectively evaluated for credit losses 6,663 7,347 6,107 892 370 45,595 Total $ 10,722 $ 10,828 $ 8,133 $ 896 $ 371 $ 63,465 The Company’s recorded investment in loans as of December 31, 2022 and December 31, 2021, related to the balance in the allowance for credit losses follows below (in thousands). December 31, 2022 C&I Municipal Agriculture Construction & Farm Loans individually evaluated for credit losses $ 29,382 $ 58 $ 679 $ 6,440 $ 1,663 Loans collectively evaluated for credit losses 887,935 221,032 76,268 952,986 304,659 Total $ 917,317 $ 221,090 $ 76,947 $ 959,426 $ 306,322 December 31, 2022 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 38,358 $ 36,206 $ 35,983 $ 1,360 $ 569 $ 150,698 Loans collectively evaluated for credit losses 693,731 918,194 1,539,775 549,275 147,315 6,291,170 Total $ 732,089 $ 954,400 $ 1,575,758 $ 550,635 $ 147,884 $ 6,441,868 December 31, 2021 C&I Municipal Agriculture Construction & Farm Loans individually evaluated for credit losses $ 24,391 $ 109 $ 5,398 $ 5,473 $ 3,142 Loans collectively evaluated for credit losses 812,684 177,796 92,691 744,320 214,078 Total $ 837,075 $ 177,905 $ 98,089 $ 749,793 $ 217,220 December 31, 2021 (continued) Non-Owner Owner Residential Auto Non-Auto Total Loans individually evaluated for credit losses $ 34,468 $ 48,504 $ 37,570 $ 1,675 $ 455 $ 161,185 Loans collectively evaluated for credit losses 588,966 773,149 1,296,849 403,741 123,513 5,227,787 Total $ 623,434 $ 821,653 $ 1,334,419 $ 405,416 $ 123,968 $ 5,388,972 From a credit risk standpoint, the Company rates its loans in one of five categories: (i) pass, (ii) special mention, (iii) substandard, (iv) doubtful or (v) loss (which are charged-off). The ratings of loans reflect a judgment about the risks of default and loss associated with the loan. The Company reviews the ratings on our credits as part of our on-going monitoring of the credit quality of our loan portfolio. Ratings are adjusted to reflect the degree of risk and loss that are felt to be inherent in each credit as of each reporting period. Our methodology is structured so that specific allocations are increased in accordance with deterioration in credit quality (and a corresponding increase in risk and loss) or decreased in accordance with improvement in credit quality (and a corresponding decrease in risk and loss). Credits rated special mention show clear signs of financial weaknesses or deterioration in credit worthiness, however, such concerns are not so pronounced that the Company generally expects to experience significant loss within the short-term. Such credits typically maintain the ability to perform within standard credit terms and credit exposure is not as prominent as credits rated more harshly. Credits rated substandard are those in which the normal repayment of principal and interest may be, or has been, jeopardized by reason of adverse trends or developments of a financial, managerial, economic or political nature, or important weaknesses exist in collateral. A protracted workout on these credits is a distinct possibility. Prompt corrective action is therefore required to strengthen the Company’s position, and/or to reduce exposure and to assure that adequate remedial measures are taken by the borrower. Credit exposure becomes more likely in such credits and a serious evaluation of the secondary support to the credit is performed. Credits rated doubtful are those in which full collection of principal appears highly questionable, and which some degree of loss is anticipated, even though the ultimate amount of loss may not yet be certain and/or other factors exist which could affect collection of debt. Based upon available information, positive action by the Company is required to avert or minimize loss. Credits rated doubtful are generally also placed on nonaccrual. The following tables summarize the Company’s internal ratings of its loans held-for-investment, including the year of origination, by portfolio segments, at December 31, 2022 (in millions): December 31, 2022 2021 2020 2019 2018 Prior Revolving Total C&I Risk rating: Pass $ 627 $ 157 $ 52 $ 22 $ 16 $ 13 $ — $ 887 Special mention 4 1 2 1 — — — 8 Substandard 13 5 2 1 1 — — 22 Doubtful — — — — — — — — Total $ 644 $ 163 $ 56 $ 24 $ 17 $ 13 $ — $ 917 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Municipal Risk rating: Pass $ 79 $ 19 $ 15 $ 4 $ 20 $ 84 $ — $ 221 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 79 $ 19 $ 15 $ 4 $ 20 $ 84 $ — $ 221 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Agricultural Risk rating: Pass $ 60 $ 9 $ 3 $ 2 $ 1 $ 1 $ — $ 76 Special mention — — — — — — — — Substandard — 1 — — — — — 1 Doubtful — — — — — — — — Total $ 60 $ 10 $ 3 $ 2 $ 1 $ 1 $ — $ 77 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Construction & Development Risk rating: Pass $ 638 $ 218 $ 70 $ 13 $ 8 $ 7 $ — $ 954 Special mention 1 — — — — — — 1 Substandard 4 1 — — — — — 5 Doubtful — — — — — — — — Total $ 643 $ 219 $ 70 $ 13 $ 8 $ 7 $ — $ 960 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Farm Risk rating: Pass $ 147 $ 85 $ 32 $ 11 $ 8 $ 21 $ — $ 304 Special mention — — — — — — — — Substandard 1 — — — — 1 — 2 Doubtful — — — — — — — — Total $ 148 $ 85 $ 32 $ 11 $ 8 $ 22 $ — $ 306 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Non-Owner Occupied CRE Risk rating: Pass $ 258 $ 191 $ 100 $ 49 $ 21 $ 75 $ — $ 694 Special mention — 1 1 11 — 7 — 20 Substandard 8 1 1 2 1 5 — 18 Doubtful — — — — — — — — Total $ 266 $ 193 $ 102 $ 62 $ 22 $ 87 $ — $ 732 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Owner Occupied CRE Risk rating: Pass $ 316 $ 224 $ 128 $ 74 $ 63 $ 113 $ — $ 918 Special mention 1 — 1 8 — 1 — 11 Substandard 1 2 1 2 9 10 — 25 Doubtful — — — — — — — — Total $ 318 $ 226 $ 130 $ 84 $ 72 $ 124 $ — $ 954 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Residential Risk rating: Pass $ 513 $ 355 $ 173 $ 82 $ 64 $ 214 $ 139 $ 1,540 Special mention 1 3 2 — — 3 1 10 Substandard 6 3 2 2 1 9 3 26 Doubtful — — — — — — — — Total $ 520 $ 361 $ 177 $ 84 $ 65 $ 226 $ 143 $ 1,576 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Auto Risk rating: Pass $ 331 $ 131 $ 55 $ 25 $ 6 $ 2 $ — $ 550 Special mention — — — — — — — — Substandard — — 1 — — — — 1 Doubtful — — — — — — — — Total $ 331 $ 131 $ 56 $ 25 $ 6 $ 2 $ — $ 551 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Non-Auto Risk rating: Pass $ 85 $ 41 $ 9 $ 3 $ 1 $ 1 $ 7 $ 147 Special mention — — — — — — — — Substandard — 1 — — — — — 1 Doubtful — — — — — — — — Total $ 85 $ 42 $ 9 $ 3 $ 1 $ 1 $ 7 $ 148 December 31, 2022 2021 2020 2019 2018 Prior Revolving Total Total Loans Risk rating: Pass $ 3,054 $ 1,430 $ 637 $ 285 $ 208 $ 531 $ 146 $ 6,291 Special mention 7 5 6 20 — 11 1 50 Substandard 33 14 7 7 12 25 3 101 Doubtful — — — — — — — — Total $ 3,094 $ 1,449 $ 650 $ 312 $ 220 $ 567 $ 150 $ 6,442 The following tables summarize the Company’s internal ratings of its loans held-for-investment, including the year of origination by portfolio segments, at December 31, 2021 (in millions): December 31, 2021 2020 2019 2018 2017 Prior Revolving Total C&I Risk rating: Pass $ 526 $ 178 $ 52 $ 29 $ 17 $ 11 $ — $ 813 Special mention 4 1 4 — — — — 9 Substandard 7 4 1 3 — — — 15 Doubtful — — — — — — — — Total $ 537 $ 183 $ 57 $ 32 $ 17 $ 11 $ — $ 837 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Municipal Risk rating: Pass $ 39 $ 15 $ 6 $ 22 $ 17 $ 79 $ — $ 178 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 39 $ 15 $ 6 $ 22 $ 17 $ 79 $ — $ 178 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Agricultural Risk rating: Pass $ 69 $ 8 $ 6 $ 6 $ 3 $ 1 $ — $ 93 Special mention — — — — — — — — Substandard 4 1 — — — — — 5 Doubtful — — — — — — — — Total $ 73 $ 9 $ 6 $ 6 $ 3 $ 1 $ — $ 98 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Construction & Development Risk rating: Pass $ 557 $ 134 $ 24 $ 14 $ 7 $ 8 $ — $ 744 Special mention 2 — — — — — — 2 Substandard 2 2 — — — — — 4 Doubtful — — — — — — — — Total $ 561 $ 136 $ 24 $ 14 $ 7 $ 8 $ — $ 750 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Farm Risk rating: Pass $ 117 $ 42 $ 15 $ 10 $ 7 $ 23 $ — $ 214 Special mention — — — — — — — — Substandard 1 1 — 1 — — — 3 Doubtful — — — — — — — — Total $ 118 $ 43 $ 15 $ 11 $ 7 $ 23 $ — $ 217 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Non-Owner Occupied CRE Risk rating: Pass $ 214 $ 128 $ 77 $ 56 $ 31 $ 84 $ — $ 590 Special mention — 1 12 — 7 3 — 23 Substandard — 1 3 1 3 3 — 11 Doubtful — — — — — — — — Total $ 214 $ 130 $ 92 $ 57 $ 41 $ 90 $ — $ 624 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Owner Occupied CRE Risk rating: Pass $ 250 $ 143 $ 114 $ 90 $ 59 $ 117 $ — $ 773 Special mention 2 2 1 — 1 1 — 7 Substandard 8 2 3 13 5 11 — 42 Doubtful — — — — — — — — Total $ 260 $ 147 $ 118 $ 103 $ 65 $ 129 $ — $ 822 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Residential Risk rating: Pass $ 477 $ 230 $ 115 $ 84 $ 68 $ 222 $ 100 $ 1,296 Special mention 3 4 — 1 1 3 1 13 Substandard 3 3 3 2 2 10 2 25 Doubtful — — — — — — — — Total $ 483 $ 237 $ 118 $ 87 $ 71 $ 235 $ 103 $ 1,334 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Auto Risk rating: Pass $ 218 $ 105 $ 54 $ 17 $ 7 $ 2 $ — $ 403 Special mention 1 — — — — — — 1 Substandard — — 1 — — — — 1 Doubtful — — — — — — — — Total $ 219 $ 105 $ 55 $ 17 $ 7 $ 2 $ — $ 405 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Non-Auto Risk rating: Pass $ 81 $ 22 $ 8 $ 4 $ 1 $ 1 $ 7 $ 124 Special mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total $ 81 $ 22 $ 8 $ 4 $ 1 $ 1 $ 7 $ 124 December 31, 2021 2020 2019 2018 2017 Prior Revolving Total Total Loans Risk rating: Pass $ 2,548 $ 1,005 $ 471 $ 332 $ 217 $ 548 $ 107 $ 5,228 Special mention 12 8 17 1 9 7 1 55 Substandard 25 14 11 20 10 24 2 106 Doubtful — — — — — — — — Total $ 2,585 $ 1,027 $ 499 $ 353 $ 236 $ 579 $ 110 $ 5,389 At December 31, 2022 and 2021, the Company’s past due loans are as follows (in thousands): December 31, 2022 15-59 60-89 Greater Total Current Total Loans 90 Days Commercial: C&I $ 3,924 $ 297 $ 1,646 $ 5,867 $ 911,450 $ 917,317 $ — Municipal 76 783 — 859 220,231 221,090 — Total Commercial 4,000 1,080 1,646 6,726 1,131,681 1,138,407 — Agricultural 243 — — 243 76,704 76,947 — Real Estate: Construction & Development 3,751 — 175 3,926 955,500 959,426 — Farm 668 — — 668 305,654 306,322 — Non-Owner Occupied CRE 1,444 160 — 1,604 730,485 732,089 — Owner Occupied CRE 1,151 — — 1,151 953,249 954,400 — Residential 8,720 707 266 9,693 1,566,065 1,575,758 — Total Real Estate 15,734 867 441 17,042 4,510,953 4,527,995 — Consumer: Auto 779 30 — 809 549,826 550,635 — Non-Auto 50 — — 50 147,834 147,884 — Total Consumer 829 30 — 859 697,660 698,519 — Total $ 20,806 $ 1,977 $ 2,087 $ 24,870 $ 6,416,998 $ 6,441,868 $ — December 31, 2021 15-59 60-89 Greater Total Current Total Loans 90 Days Commercial: C&I $ 3,638 $ 34 $ 222 $ 3,894 $ 833,181 $ 837,075 $ 5 Municipal 63 — — 63 177,842 177,905 — Total Commercial 3,701 34 222 3,957 1,011,023 1,014,980 5 Agricultural 181 — — 181 97,908 98,089 — Real Estate: Construction & Development 2,953 39 — 2,992 746,801 749,793 — Farm 600 215 — 815 216,405 217,220 — Non-Owner Occupied CRE 235 — — 235 623,199 623,434 — Owner Occupied CRE 813 — 280 1,093 820,560 821,653 — Residential 4,984 327 410 5,721 1,328,698 1,334,419 — Total Real Estate 9,585 581 690 10,856 3,735,663 3,746,519 — Consumer: Auto 393 26 — 419 404,997 405,416 — Non-Auto 145 24 3 172 123,796 123,968 3 Total Consumer 538 50 3 591 528,793 529,384 3 Total $ 14,005 $ 665 $ 915 $ 15,585 $ 5,373,387 $ 5,388,972 $ 8 * The Company monitors commercial, agricultural and real estate loans after such loans are 15 days past due. Consumer loans are monitored after such loans are 30 days past due. The restructuring of a loan is considered a “troubled debt restructuring” if both the borrower is experiencing financial difficulties and the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules, reductions in collateral and other actions intended to minimize potential losses. The Company’s loans that were modified in the years ended December 31, 2022 and 2021, and considered troubled debt restructurings are as follows (in thousands): Year Ended December 31, 2022 Year Ended December 31, 2021 Pre- Post- Pre- Post- Recorded Recorded Recorded Recorded Number Investment Investment Number Investment Investment Commercial: C&I 1 $ 206 $ 206 4 $ 361 $ 361 Municipal — — — — — — Total Commercial 1 206 206 4 361 361 Agricultural — — — 4 3,988 3,988 Real Estate: Construction & Development — — — 1 200 200 Farm — — — — — — Non-Owner Occupied CRE — — — — — — Owner Occupied CRE 1 1,788 1,788 3 1,047 1,047 Residential 1 129 129 5 519 519 Total Real Estate 2 1,917 1,917 9 1,766 1,766 Consumer: Auto — — — 2 51 51 Non-Auto — — — 1 9 9 Total Consumer — — — 3 60 60 Total 3 $ 2,123 $ 2,123 20 $ 6,175 $ 6,175 The balances below provide information as to how the loans were modified as troubled debt restructured loans during the years ended December 31, 2022 and 2021 (in thousands): Year Ended December 31, 2022 Year Ended December 31, 2021 Adjusted Combined Adjusted Combined Interest Extended Rate and Interest Extended Rate and Rate Maturity Maturity Rate Maturity Maturity Commercial: C&I $ — $ — $ 206 $ — $ 212 $ 149 Municipal — — — — — — Total Commercial — — 206 — 212 149 Agricultural — — — — 68 3,920 Real Estate: Construction & Development — — — — 200 — Farm — — — — — — Non-Owner Occupied CRE — — — — — — Owner Occupied CRE — — 1,788 — — 1,047 Residential — — 129 — 262 257 Total Real Estate — — 1,917 — 462 1,304 Consumer: Auto — — — — — 51 Non-Auto — — — — — 9 Total Consumer — — — — — 60 Total $ — $ — $ 2,123 $ — $ 742 $ 5,433 During the year ended December 31, 2022, no loans were modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default. During the year ended December 31, 2021 , one residential real estate loan totaling $ 459,000 was modified as a troubled debt restructured loan within the previous 12 months and for which there was a payment default. A default for purposes of this disclosure is a troubled debt restructured loan in which the borrower is 90 days past or more due or results in the foreclosure and repossession of the applicable collateral. As of December 31, 2022 , the Company has no commitments to lend additional funds to loan customers whose terms have been modified in troubled debt restructurings. An analysis of the changes in loans to officers, directors, principal shareholders, or associates of such persons for the year ended December 31, 2022 (determined as of each respective year-end) follows (in thousands): Beginning Additional Payments Ending Year Ended December 31, 2022 $ 137,527 $ 233,232 $ 262,992 $ 107,767 In the opinion of management, those loans are on substantially the same terms, including interest rates and collateral requirements, as those prevailing at the time for comparable transactions with unaffiliated persons. |