Loans and Allowance for Credit Losses | 90 Days and Accruing
September 30, 2021
Construction and land development
$
458
$
9
$
642
$
1,109
$
178,952
$
180,061
$
—
Agricultural real" id="sjs-B4">Note 4 – Loans and Allowance for Credit Losses Loans are stated at amortized cost net of an allowance for credit losses. Amortized cost is the unpaid principal net of unearned premiums and discounts, and net deferred origination fees and costs. Deferred loan origination fees are reduced by loan origination costs and are 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 September 30, 2021 and December 31, 2020 follows (in thousands): September 30, 2021 December 31, 2020 Construction and land development $ 179,792 $ 122,853 Agricultural real estate 278,432 254,662 1-4 family residential properties 412,320 325,480 Multifamily residential properties 306,966 189,265 Commercial real estate 1,583,583 1,176,290 Loans secured by real estate 2,761,093 2,068,550 Agricultural loans 126,473 137,333 Commercial and industrial loans 839,630 741,819 Consumer loans 80,779 78,023 All other loans 143,724 118,196 Total gross loans 3,951,699 3,143,921 Less: loans held for sale 1,897 1,924 3,949,802 3,141,997 Less: Net deferred loan fees, premiums and discounts 3,930 5,502 Allowance for credit losses 53,983 41,910 Net loans $ 3,891,889 $ 3,094,585 Loans expected to be sold are classified as held for sale in the consolidated financial statements and are recorded at the lower of aggregate cost or fair value, taking into consideration future commitments to sell the loans. These loans are primarily for 1-4 family residential properties. Accrued interest on loans, which is excluded from the amortized cost of the balances above, totaled $16.5 million and $15.9 million at September 30, 2021 and December 31, 2020, respectively. 18 Most of the Company’s business activities are with customers located near the Company's branch locations in Illinois, Missouri, and Texas. At September 30, 2021, the Company’s loan portfolio included $405.3 million of loans to borrowers whose businesses are directly related to agriculture. Of this amount, $285.2 million was concentrated in corn and other grain farming. Total loans to borrowers whose businesses are directly related to agriculture increased $13.6 million from $391.7 million at December 31, 2020 due to seasonal timing of cash flow requirements. Loans concentrated in corn and other grain farming decreased $23.0 million from $308.2 million at December 31, 2020. The Company's underwriting practices include collateralization of loans. Any extended period of low commodity prices, drought conditions, significantly reduced yields on crops and/or reduced levels of government assistance to the agricultural industry could result in an increase in the level of problem agriculture loans and potentially result in loan losses within the agricultural portfolio. In addition, the Company has $121.2 million of loans to motels and hotels. The performance of these loans is dependent on borrower specific issues as well as the general level of business and personal travel within the region. While the Company adheres to sound underwriting standards, a prolonged period of reduced business or personal travel could result in an increase in nonperforming loans to this business segment and potentially in loan losses. The Company also has $637.5 million of The structure of the Company’s loan approval process is based on progressively larger lending authorities granted to individual loan officers, loan committees, and ultimately the board of directors. Outstanding balances to one borrower or affiliated borrowers are limited by federal regulation and most borrowers are below regulatory thresholds. The Company can occasionally have outstanding balances to one borrower up to but not exceeding the regulatory threshold should underwriting guidelines warrant. Most of the Company’s loans are to businesses located in the The Company’s lending can be summarized into the following primary areas: Commercial Real Estate Loans. Commercial real estate loans are generally comprised of loans to small business entities to purchase or expand structures in which the business operations are housed, loans to owners of real estate who lease space to non-related commercial entities, loans for construction and land development, loans to hotel operators, and loans to owners of multi-family residential structures, such as apartment buildings. Commercial real estate loans are underwritten based on historical and projected cash flows of the borrower and secondarily on the underlying real estate pledged as collateral on the debt. For the various types of commercial real estate loans, minimum criteria have been established within the Company’s loan policy regarding debt service coverage while maximum limits on loan-to-value and amortization periods have been defined. Maximum loan-to-value ratios range from 65% to 80% depending upon the type of real estate collateral, while the desired minimum debt coverage ratio is 1.20x. Amortization periods for commercial real estate loans are generally limited to twenty or twenty five years, depending on the loan-to-value. The Company’s commercial real estate portfolio is below the thresholds that would designate a concentration in commercial real estate lending, as established by the federal banking regulators. Commercial and Industrial Loans. Commercial and industrial loans are primarily comprised of working capital loans used to purchase inventory and fund accounts receivable that are secured by business assets other than real estate. These loans are generally written for one year or less. Also, equipment financing is provided to businesses with these loans generally limited to 80% of the value of the collateral and amortization periods limited to seven years. Commercial loans are often accompanied by a personal guaranty of the principal owners of a business. Like commercial real estate loans, the underlying cash flow of the business is the primary consideration in the underwriting process. The financial condition of commercial borrowers is monitored at least annually with the type of financial information required determined by the size of the relationship. Measures employed by the Company for businesses with higher risk profiles include the use of government- assisted lending programs through the Small Business Administration and U.S. Department of Agriculture. Agricultural and Agricultural Real Estate Loans. Agricultural loans are generally comprised of seasonal operating lines to cash grain farmers to plant and harvest corn and soybeans and term loans to fund the purchase of equipment. Agricultural real estate loans are primarily comprised of loans for the purchase of farmland. Specific underwriting standards have been established for agricultural-related loans including the establishment of projections for each operating year based on industry developed estimates of farm input costs and expected commodity yields and prices. Operating lines are typically written for one year and secured by the crop. Loan-to-value ratios on loans secured by farmland generally do not exceed 65% and have amortization periods limited to twenty-five years. Federal government-assistance lending programs through the Farm Service Agency are used to mitigate the level of credit risk when deemed appropriate. 19 Residential Real Estate Loans. Residential real estate loans generally include loans for the purchase or refinance of residential real estate properties consisting of one-to-four units and home equity loans and lines of credit. The Company sells most of its long-term fixed rate residential real estate loans to secondary market investors. The Company also releases the servicing of these loans upon sale. Residential real estate loans are typically underwritten to conform to industry standards including criteria for maximum debt-to-income and loan-to-value ratios as well as minimum credit scores. Loans secured by first liens on residential real estate held in the portfolio typically do not exceed 80% of the value of the collateral and have amortization periods of twenty-five years or less. The Company does not originate subprime mortgage loans. Consumer Loans. Consumer loans are primarily comprised of loans to individuals for personal and household purposes such as the purchase of an automobile or other living expenses. Minimum underwriting criteria have been established that consider credit score, debt-to-income ratio, employment history, and collateral coverage. Typically, consumer loans are set up on monthly payments with amortization periods based on the type and age of the collateral. Other Loans. Other loans consist primarily of loans to municipalities to support community projects such as infrastructure improvements or equipment purchases. Underwriting guidelines for these loans are consistent with those established for commercial loans with the additional repayment source of the taxing authority of the municipality. Allowance for Credit Losses The allowance for credit losses represents the Company’s best estimate of the reserve necessary to adequately account for probable losses expected over the remaining contractual 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, 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 troubled debt restructurings, 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 large individually evaluated loans separately from non-individually evaluated loans. Individually Evaluated Loans The Company individually evaluates certain loans for impairment. In general, these loans have been internally identified via the Company’s loan grading system as credits requiring management’s attention due to underlying problems in the borrower’s business or collateral concerns. This evaluation considers expected future cash flows, the value of collateral and other factors that may impact the borrower’s ability to make payments when due. For loans greater than $250,000, impairment is individually measured each quarter using one of three alternatives: (1) the present value of expected future cash flows discounted at the loan’s Non-Individually Evaluated Loans Non-individually evaluated loans comprise the vast majority of the Company’s total loan portfolio and include loans in accrual status and those credits not identified as troubled debt restructurings. A small portion of these loans are considered “criticized” due to the risk rating assigned reflecting elevated credit risk due to characteristics, such as a strained cash flow position, associated with the individual borrowers. Criticized loans are those assigned risk ratings of Special Mention, Substandard, or Doubtful. 20 Beginning January 1 , 2020, the allowance for credit losses was estimated using the current expected credit loss model ("CECL"). The Company uses the Loss Rate method to estimate the historical loss rate for all non -individually evaluated loans. Under this method, the allowance for credit losses is measured on a collective (pool) basis for non- individually evaluated loans with similar risk characteristics. Historical credit loss experience provides the basis for the estimate of expected credit losses. For each pool, a historical loss rate is computed based on the average remaining contractual life of the pool. Adjustments to historical loss rates are made using qualitative factors relevant to each pool including merger & acquisition activity, economic conditions, changes in policies, procedures & underwriting, and concentrations. In addition, a twelve-month forecast, using reasonable and supportable future conditions, is prepared that is used to estimate expected changes to existing and historical conditions in the current period. The Company also considers specific current economic events occurring globally, in the U.S. and in its local markets. In March 2020, in response to the COVID-19 outbreak, its significant disruptions in the U.S. economy and impacts on local markets, First Mid Bank offered a 90-day commercial deferral program, primarily to hotel and restaurant borrowers. In accordance with interagency guidance issued in March 2020, these short-term deferrals are not considered troubled debt restructurings. These deferrals were, however, considered in the factors used to estimate the required allowance for credit losses for non-individually evaluated loans. Other COVID-19 related impacts considered included revenue losses of businesses required to restrict or cease services, income loss to workers laid off as a result of COVID-19 restrictions, various federal and state government stimulus programs and additional deferral programs offered by First Mid Bank beginning in April 2020. Other events considered include the status of trade agreements with China, scheduled increases in minimum wage and changes to the minimum salary threshold for overtime provisions, current and projected unemployment rates, current and projected grain and oil prices and economies of local markets where customers work and operate. Within each pool, risk elements are evaluated that have specific impacts to the borrowers within the pool. These, along with the general risks and events, and the specific lending policies and procedures by loan type described above, are analyzed to estimate the qualitative factors used to adjust the historical loss rates. During the current period, the following assumptions and factors were considered when determining the historical loss rate and any potential adjustments by loan pool. Construction and Land Development Loans. The average life of the construction and land development segment was determined to be twelve months. Historical losses in this segment remained very low. Current activity in this industry was deemed essential and has continued during COVID-19. While staffing shortages and supply chain disruptions cause risk in this segment, most projects are associated with financially strong borrowers. The qualitative factor for this segment was decreased slightly. Agricultural Real Estate Loans. The average life of the agricultural real estate segment was determined to be thirty-six months. Historical losses in the segment remain very low. Farmland values have remained steady over an extended period of time and there are no indications that this will change in the next year. There was a slight decrease to the qualitative factor for this segment. 1- 4 Family Residential Properties Loans. The average life of the 1-4 Family Residential segment was determined to be: Residential Real Estate-non-owner occupied, sixty months; Residential Real Estate-owner occupied, sixty months; Home Equity lines of credit, thirty months. COVID-19 has impacted the finances of consumers from layoffs and furloughs resulting from employers that must reduce or suspend operations. Increased risk in this segment includes consumer ability to make mortgage and rent payments. Some of this impact has been offset by governmental actions such as stimulus payments and extended unemployment benefits. First Mid Bank also offered short-term loan payment deferral to borrowers in this segment. The qualitative factors on both non-owner occupied and owner-occupied loans for this segment were decreased slightly. Commercial Real Estate Loans. The average life of the commercial real estate segment was determined to be thirty-six months. This segment includes the Company's majority of exposure to the hotel industry which has been significantly impacted by COVID-19 events. Other impacted industries in this segment include restaurants and retail establishments. First Mid Bank has implemented deferral programs for borrowers in this segment in order to ease the impact to these borrowers. The qualitative factors on both non-owner occupied and owner-occupied loans for this segment were decreased slightly. Agricultural Loans. The average life of the agricultural segment was determined to be eighteen months. Losses in this segment are very low and it is believed that borrowers in this segment will benefit from current governmental programs such as PPP and MFP. Many farmers are holding grain from the 2019 operating season and should be able to take advantage of an increase in prices. The qualitative factor of this segment was decreased slightly. 21 Commercial and Industrial Loans. The average life of the commercial and industrial segment was determined to be twenty-four months. The COVID-19 impacts include forced closures and scaled-back services for many industries within this segment including retailers, restaurants, and video gaming establishments. Some of this risk is offset by government relief programs as well as, First Mid Bank's payment deferral program. The qualitative factor for this segment was decreased slightly . Consumer Loans. The average life of the consumer segment was determined to be thirty-six months. The financial status of many borrowers has been impacted by COVID-19 events including layoffs and reduced hours. Some of this impact has been offset by government stimulus programs, increased paid leave and increased and extended unemployment benefits, however these benefits are now expiring. Additionally, First Mid Bank has offered a short-term payment deferral program. The qualitative factor for this segment was decreased slightly. Acquired Loans. Prior to January 1, 2020 loans acquired with evidence of credit deterioration since origination and for which it was probable that all contractually required payments would not be collected were considered purchased credit impaired at the time of acquisition. Purchase credit-impaired ("PCI") loans were accounted for under ASC 310-30, Receivables--Loans and Debt Securities Acquired with Deteriorated Credit Quality ("ASC 310-30"), and were initially measured at fair value, which included the estimated future credit losses expected to be incurred over the life of the loan. Accordingly, an allowance for credit losses related to these loans was not carried over and recorded at the acquisition date. The cash flows expected to be collected were estimated using current key assumptions, such as default rates, value of underlying collateral, severity and prepayment speeds. Subsequent to January 1, 2020, loans acquired in a business combination that have experienced more-than-insignificant deterioration in credit quality since origination are considered purchased credit deteriorated (“PCD”) loans. At the For acquired loans not deemed purchased credit deteriorated at acquisition, the differences between the initial fair value and the unpaid principal balance are recognized as interest income on a level-yield basis over the lives of the related loans. At the acquisition date, an initial allowance for expected credit losses is estimated and recorded as credit loss expense. The subsequent measurement of expected credit losses for all acquired loans is the same as the subsequent measurement of expected credit losses for originated loans. 22 The following table presents the activity in the allowance for credit losses based on portfolio segment for the three and nine months ended September 30, 2021 (in thousands): Construction and Land Development Agricultural Real Estate 1-4 Family Residential Properties Commercial Real Estate Agricultural Loans Commercial and Industrial Consumer Loans Total Three months ended September 30, 2021 Beginning balance $ 1,795 $ 1,665 $ 2,570 $ 25,664 $ 906 $ 19,842 $ 2,155 $ 54,597 Provision for credit loss expense 314 (408 ) 27 (52 ) (90 ) 342 970 1,103 Loans charged off — — 45 55 — 1,600 376 2,076 Recoveries collected — — 108 23 — 24 204 359 Ending balance $ 2,109 $ 1,257 $ 2,660 $ 25,580 $ 816 $ 18,608 $ 2,953 $ 53,983 Nine months ended September 30, 2021 Beginning balance $ 1,666 $ 1,084 $ 2,322 $ 19,660 $ 1,526 $ 13,485 $ 2,167 $ 41,910 Initial allowance on loans purchased with credit deterioration 261 44 328 646 — 795 — 2,074 Provision for credit loss expense 205 129 117 5,764 (711 ) 5,950 1,225 12,679 Loans charged off 23 — 241 535 — 1,686 1,008 3,493 Recoveries collected — — 134 45 1 64 569 813 Ending balance $ 2,109 $ 1,257 $ 2,660 $ 25,580 $ 816 $ 18,608 $ 2,953 $ 53,983 23 The following tables present the activity in the allowance for credit losses based on portfolio segment for the three and nine months ended September 30, 2020 and for the year ended December 31, 2020 (in thousands): Construction and Land Development Agricultural Real Estate 1-4 Family Residential Properties Commercial Real Estate Agricultural Loans Commercial and Industrial Consumer Loans Total Three months ended September 30, 2020 Beginning balance (prior to adoption of ASC 326) $ 2,358 $ 1,634 $ 2,486 $ 16,272 $ 1,323 $ 12,360 $ 1,948 $ 38,381 Provision for credit loss expense (139 ) 32 (71 ) 2,463 (89 ) 1,352 335 3,883 Loans charged off 13 — 48 — — 368 127 556 Recoveries collected — — 24 73 — 28 82 207 Ending balance $ 2,206 $ 1,666 $ 2,391 $ 18,808 $ 1,234 $ 13,372 $ 2,238 $ 41,915 Nine months ended September 30, 2020 Beginning balance (prior to adoption of ASC 326) $ 1,146 $ 1,093 $ 1,386 $ 11,198 $ 1,386 $ 9,273 $ 1,429 $ 26,911 Impact of adopting ASC 326 (113 ) 230 756 541 (363 ) 155 466 1,672 Provision for credit loss expense 1,186 343 335 7,542 211 5,453 430 15,500 Loans charged off 13 — 313 551 — 1,651 414 2,942 Recoveries collected — — 227 78 — 142 327 774 Ending balance $ 2,206 $ 1,666 $ 2,391 $ 18,808 $ 1,234 $ 13,372 $ 2,238 $ 41,915 Twelve months ended December 31, 2020 Beginning balance (prior to adoption of ASC 326) $ 1,146 $ 1,093 $ 1,386 $ 11,198 $ 1,386 $ 9,273 $ 1,429 $ 26,911 Impact of adopting ASC 326 (113 ) 230 756 541 (363 ) 155 466 1,672 Provision for credit loss expense 646 (239 ) 274 8,581 503 5,869 469 16,103 Loans charged off 13 — 393 829 — 1,991 618 3,844 Recoveries collected — — 299 169 — 179 421 1,068 Ending balance $ 1,666 $ 1,084 $ 2,322 $ 19,660 $ 1,526 $ 13,485 $ 2,167 $ 41,910 Consistent with regulatory guidance, charge-offs on all loan segments are taken when specific loans, or portions thereof, are considered uncollectible. The Company’s policy is to promptly charge these loans off in the period the uncollectible loss is reasonably determined. For all loan portfolio segments except 1-4 family residential properties and consumer, the Company promptly charges-off loans, or portions thereof, when available information confirms that specific loans are uncollectible based on information that includes, but is not limited to, (1) the deteriorating financial condition of the borrower, (2) declining collateral values, and/or (3) legal action, including bankruptcy, that impairs the borrower’s ability to adequately meet its obligations. For individually evaluated loans that are considered solely collateral dependent, a partial charge-off is recorded when a loss has been confirmed by an updated appraisal or other appropriate valuation of the collateral. The Company charges-off 1-4 family residential and consumer loans, or portions thereof, when the Company reasonably determines the amount of the loss. The Company adheres to timeframes established by applicable regulatory guidance which provides for the charge-down of 1-4 family first and junior lien mortgages to the net realizable value less costs to sell when the loan is 180 days past due, charge-off of unsecured open-end loans when the loan is 180 days past due, and charge down to the net realizable value when other secured loans are 120 days past due. Loans at these respective delinquency thresholds for which the Company can clearly document that the loan is both well-secured and in the process of collection, such that collection will occur regardless of delinquency status, need not be charged off. 24 The following table presents the amortized cost basis of collateral-dependent loans by class of loans that were individually evaluated to determine expected credit losses, and the related allowance for credit losses, as of September 30, 2021 (in thousands): Collateral Allowance Real Estate Business Assets Other Total for Credit Losses Construction and land development $ 1,407 $ — $ — $ 1,407 $ 233 1-4 family residential properties 5,438 — — 5,438 245 Multifamily residential properties 1,805 — — 1,805 — Commercial real estate 10,830 — — 10,830 864 Loans secured by real estate 19,480 — — 19,480 1,342 Commercial and industrial loans — 2,146 1,067 3,213 1,190 Consumer loans — — 10 10 — Other loans — 24 — 24 — Total loans $ 19,480 $ 2,170 $ 1,077 $ 22,727 $ 2,532 Credit Quality The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, collateral support, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on a continuous basis. The Company uses the following definitions for risk ratings which are commensurate with a loan considered “criticized”: Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current sound-worthiness and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing factors, conditions and values, highly questionable and improbable. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered pass rated loans. 25 The following tables present the credit risk profile of the Company’s loan portfolio on amortized cost basis based on risk rating category and year of origination as of September 30, 2021 (in thousands): Term Loans by Origination Year Revolving Risk rating 2021 2020 2019 2018 2017 Prior Loans Total September 30, 2021 Construction and land development loans Pass $ 33,540 $ 68,429 $ 26,623 $ 34,739 $ 3,841 $ 11,328 $ — $ 178,500 Special mention 112 — — — — — — 112 Substandard — — — 915 — 534 — 1,449 Total $ 33,652 $ 68,429 $ 26,623 $ 35,654 $ 3,841 $ 11,862 $ — $ 180,061 Agricultural real estate loans Pass $ 62,342 $ 65,820 $ 30,303 $ 36,823 $ 13,095 $ 57,580 $ — $ 265,963 Special mention 825 259 4,184 417 388 6,010 — 12,083 Substandard — — 265 189 57 231 — 742 Total $ 63,167 $ 66,079 $ 34,752 $ 37,429 $ 13,540 $ 63,821 $ — $ 278,788 1-4 family residential property loans Pass $ 73,424 $ 101,161 $ 36,828 $ 48,656 $ 33,013 $ 52,995 $ 42,664 $ 388,741 Special mention 80 149 1,952 505 2,628 1,054 56 6,424 Substandard 178 570 1,556 1,688 3,662 8,758 988 17,400 Total $ 73,682 $ 101,880 $ 40,336 $ 50,849 $ 39,303 $ 62,807 $ 43,708 $ 412,565 Commercial real estate loans Pass $ 357,285 $ 445,335 $ 310,825 $ 180,042 $ 161,629 $ 376,631 $ — $ 1,831,747 Special mention 3,369 886 1,198 1,418 10,726 15,251 — 32,848 Substandard 2,380 736 6,525 1,811 4,716 9,403 — 25,571 Total $ 363,034 $ 446,957 $ 318,548 $ 183,271 $ 177,071 $ 401,285 $ — $ 1,890,166 Agricultural loans Pass $ 75,148 $ 19,930 $ 5,582 $ 3,653 $ 1,074 $ 1,480 $ — $ 106,867 Special mention 15,568 436 2,957 155 160 65 — 19,341 Substandard 27 18 — — — 281 — 326 Total $ 90,743 $ 20,384 $ 8,539 $ 3,808 $ 1,234 $ 1,826 $ — $ 126,534 Commercial and industrial loans Pass $ 152,729 $ 184,801 $ 166,553 $ 77,324 $ 3,402 $ 384,318 $ — $ 969,127 Special mention 844 542 1,725 568 416 1,155 — 5,250 Substandard 428 711 448 1,588 71 1,968 — 5,214 Total $ 154,001 $ 186,054 $ 168,726 $ 79,480 $ 3,889 $ 387,441 $ — $ 979,591 Consumer loans Pass $ 20,854 $ 21,547 $ 27,317 $ 6,633 $ 2,640 $ 492 $ — $ 79,483 Special mention 21 78 55 10 — — — 164 Substandard 98 17 75 51 30 146 — 417 Total $ 20,973 $ 21,642 $ 27,447 $ 6,694 $ 2,670 $ 638 $ — $ 80,064 Total loans Pass $ 775,322 $ 907,023 $ 604,031 $ 387,870 $ 218,694 $ 884,824 $ 42,664 $ 3,820,428 Special mention 20,819 2,350 12,071 3,073 14,318 23,535 56 76,222 Substandard 3,111 2,052 8,869 6,242 8,536 21,321 988 51,119 Total $ 799,252 $ 911,425 $ 624,971 $ 397,185 $ 241,548 $ 929,680 $ 43,708 $ 3,947,769 26 The following tables present the credit risk profile of the Company’s loan portfolio based on risk rating category as of December 31, 2020 (in thousands): Term Loans by Origination Year Revolving Risk rating 2020 2019 2018 2017 2016 Prior Loans Total December 31, 2020 Construction and land development loans Pass $ 41,842 $ 40,989 $ 31,500 $ 2,760 $ 871 $ 3,822 $ — $ 121,784 Special mention — — — — — — — — Substandard — 128 — 517 — 50 — 695 Total $ 41,842 $ 41,117 $ 31,500 $ 3,277 $ 871 $ 3,872 $ — $ 122,479 Agricultural real estate loans Pass $ 73,630 $ 34,412 $ 37,839 $ 16,138 $ 13,559 $ 58,291 $ — $ 233,869 Special mention 1,845 3,970 533 469 1,106 11,232 — 19,155 Substandard — — 800 208 64 245 — 1,317 Total $ 75,475 $ 38,382 $ 39,172 $ 16,815 $ 14,729 $ 69,768 $ — $ 254,341 1-4 family residential property loans Pass $ 81,366 $ 29,695 $ 38,163 $ 23,086 $ 26,676 $ 62,942 $ 40,363 $ 302,291 Special mention 192 2,142 523 2,720 247 1,578 293 7,695 Substandard 296 695 1,915 1,859 1,996 7,516 1,499 15,776 Total $ 81,854 $ 32,532 $ 40,601 $ 27,665 $ 28,919 $ 72,036 $ 42,155 $ 325,762 Commercial real estate loans Pass $ 368,750 $ 237,119 $ 171,591 $ 148,283 $ 143,400 $ 215,616 $ — $ 1,284,759 Special mention 2,469 1,300 6,108 11,262 6,741 16,947 — 44,827 Substandard 1,863 40 7,081 2,022 4,905 18,435 — 34,346 Total $ 373,082 $ 238,459 $ 184,780 $ 161,567 $ 155,046 $ 250,998 $ — $ 1,363,932 Agricultural loans Pass $ 83,377 $ 15,680 $ 5,978 $ 1,838 $ 635 $ 2,856 $ — $ 110,364 Special mention 21,070 4,483 694 224 148 38 — 26,657 Substandard 68 238 25 — — — — 331 Total $ 104,515 $ 20,401 $ 6,697 $ 2,062 $ 783 $ 2,894 $ — $ 137,352 Commercial and industrial loans Pass $ 371,683 $ 132,148 $ 70,497 $ 78,890 $ 42,439 $ 114,904 $ — $ 810,561 Special mention 4,116 32,130 849 489 1,101 730 — 39,415 Substandard 889 2,360 532 1,689 136 969 — 6,575 Total $ 376,688 $ 166,638 $ 71,878 $ 81,068 $ 43,676 $ 116,603 $ — $ 856,551 Consumer loans Pass $ 31,609 $ 21,384 $ 12,084 $ 8,279 $ 3,150 $ 1,022 $ — $ 77,528 Special mention — 24 24 1 1 — — 50 Substandard 15 16 111 95 67 120 — 424 Total $ 31,624 $ 21,424 $ 12,219 $ 8,375 $ 3,218 $ 1,142 $ — $ 78,002 Total loans Pass $ 1,052,257 $ 511,427 $ 367,652 $ 279,274 $ 230,730 $ 459,453 $ 40,363 $ 2,941,156 Special mention 29,692 44,049 8,731 15,165 9,344 30,525 293 137,799 Substandard 3,131 3,477 10,464 6,390 7,168 27,335 1,499 59,464 Total $ 1,085,080 $ 558,953 $ 386,847 $ 300,829 $ 247,242 $ 517,313 $ 42,155 $ 3,138,419 27 The following table presents the Company’s loan portfolio aging analysis at September 30, 2021 and December 31, 2020 (in thousands): 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Loans Receivable Total Loans > 90 Days and Accruing September 30, 2021 Construction and land development $ 458 $ 9 $ 642 $ 1,109 $ 178,952 $ 180,061 $ — Agricultural real |