Loans Receivable and Allowance for Credit Losses | Loans Receivable and Allowance for Credit Losses Total net loans receivable at December 31, 2023 and 2022 are summarized as follows: 2023 Percentage 2022 Percentage Farmland $ 31,869 0.7 % $ 32,168 0.8 % Owner-occupied, nonfarm nonresidential properties 493,064 11.0 468,493 11.0 Agricultural production and other loans to farmers 1,652 — 1,198 — Commercial and Industrial 1 726,442 16.3 791,911 18.5 Obligations (other than securities and leases) of states and political subdivisions 152,201 3.4 145,345 3.4 Other loans 25,507 0.6 24,710 0.6 Other construction loans and all land development and other land loans 491,539 11.0 446,685 10.5 Multifamily (5 or more) residential properties 254,342 5.7 257,696 6.0 Non-owner occupied, nonfarm nonresidential properties 896,043 20.1 795,315 18.6 1-4 Family Construction 51,207 1.1 51,171 1.2 Home equity lines of credit 130,700 2.9 124,892 2.9 Residential Mortgages secured by first liens 990,986 22.2 942,531 22.0 Residential Mortgages secured by junior liens 91,063 2.0 74,638 1.7 Other revolving credit plans 42,877 1.0 36,372 0.9 Automobile 25,315 0.6 21,806 0.5 Other consumer 51,592 1.1 49,144 1.1 Credit cards 11,785 0.3 10,825 0.3 Overdrafts 292 — 278 — Total loans $ 4,468,476 100.0 % $ 4,275,178 100.0 % Less: Allowance for credit losses (45,832) (43,436) Loans, net $ 4,422,644 $ 4,231,742 Net deferred loan origination fees (costs) included in the above loan table $ 2,448 $ 4,463 1 PPP loans, net of deferred PPP processing fees, both those disbursed in 2020 and those disbursed in 2021, are included in the Commercial and Industrial classification. The Corporation’s outstanding loans receivable and related unfunded commitments are primarily concentrated within Central and Northwest Pennsylvania, Central and Northeast Ohio, Western New York and Southwest Virginia. The Bank attempts to limit concentrations within specific industries by utilizing dollar limitations to single industries or customers, and by entering into participation agreements with third parties. Collateral requirements are established based on management’s assessment of the customer. The Corporation maintains lending policies to control the quality of the loan portfolio. These policies delegate the authority to extend loans under specific guidelines and underwriting standards. These policies are prepared by the Corporation’s management and reviewed and approved annually by the Corporation’s Board of Directors. Syndicated loans, net of deferred fees and costs, are included in the commercial and industrial classification and totaled $108.7 million and $156.6 million as of December 31, 2023 and 2022, respectively. Transactions in the allowance for credit losses for the year ended December 31, 2023 were as follows: Beginning (Charge-offs) Recoveries Provision (Benefit) for Credit Losses on Loans Receivable (1) Ending Allowance Farmland $ 159 $ — $ — $ (33) $ 126 Owner-occupied, nonfarm nonresidential properties 2,905 (26) 29 1,041 3,949 Agricultural production and other loans to farmers 6 — — 1 7 Commercial and Industrial 9,766 (392) 438 (379) 9,433 Obligations (other than securities and leases) of states and political subdivisions 1,863 — — 750 2,613 Other loans 456 — — (69) 387 Other construction loans and all land development and other land loans 3,253 — — 780 4,033 Multifamily (5 or more) residential properties 2,353 (65) 6 (1,264) 1,030 Non-owner occupied, nonfarm nonresidential properties 7,653 (694) 10 2,201 9,170 1-4 Family Construction 327 — — 29 356 Home equity lines of credit 1,173 (10) 5 (337) 831 Residential Mortgages secured by first liens 8,484 (117) 3 (320) 8,050 Residential Mortgages secured by junior liens 1,035 — — 441 1,476 Other revolving credit plans 722 (119) 30 340 973 Automobile 271 (56) 1 142 358 Other consumer 2,665 (1,982) 134 1,836 2,653 Credit cards 67 (189) 18 199 95 Overdrafts 278 (604) 139 479 292 Total loans $ 43,436 $ (4,254) $ 813 $ 5,837 $ 45,832 (1) Excludes provision for credit losses related to unfunded commitments. Note 18, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation. The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. Transactions in the allowance for credit losses for the year ended December 31, 2022 were as follows: Beginning (Charge-offs) Recoveries Provision (Benefit) for Credit Losses on Loans Receivable (1) Ending Allowance Farmland $ 151 $ — $ — $ 8 $ 159 Owner-occupied, nonfarm nonresidential properties 3,339 (21) 15 (428) 2,905 Agricultural production and other loans to farmers 9 — — (3) 6 Commercial and Industrial 8,837 (175) 139 965 9,766 Obligations (other than securities and leases) of states and political subdivisions 1,649 — — 214 1,863 Other loans 149 — — 307 456 Other construction loans and all land development and other land loans 2,198 — — 1,055 3,253 Multifamily (5 or more) residential properties 2,289 — — 64 2,353 Non-owner occupied, nonfarm nonresidential properties 6,481 (335) 336 1,171 7,653 1-4 Family Construction 158 — — 169 327 Home equity lines of credit 1,169 — 12 (8) 1,173 Residential Mortgages secured by first liens 6,943 (51) 28 1,564 8,484 Residential Mortgages secured by junior liens 546 — — 489 1,035 Other revolving credit plans 528 (92) 50 236 722 Automobile 263 (28) 2 34 271 Other consumer 2,546 (1,623) 89 1,653 2,665 Credit cards 92 (99) 38 36 67 Overdrafts 241 (561) 138 460 278 Total loans $ 37,588 $ (2,985) $ 847 $ 7,986 $ 43,436 (1) Excludes provision for credit losses related to unfunded commitments. Note 18, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation. Transactions in the allowance for credit losses for the year ended December 31, 2021 were as follows: Beginning (Charge-offs) Recoveries Provision (Benefit) for Credit Losses on Loans Receivable (1) Ending Allowance Farmland $ 221 $ — $ — $ (70) $ 151 Owner-occupied, nonfarm nonresidential properties 3,700 (584) 10 213 3,339 Agricultural production and other loans to farmers 24 — — (15) 9 Commercial and Industrial 6,233 (163) 203 2,564 8,837 Obligations (other than securities and leases) of states and political subdivisions 998 (407) 30 1,028 1,649 Other loans 68 — — 81 149 Other construction loans and all land development and other land loans 1,956 (282) — 524 2,198 Multifamily (5 or more) residential properties 2,724 — — (435) 2,289 Non-owner occupied, nonfarm nonresidential properties 8,658 (49) — (2,128) 6,481 1-4 Family Construction 82 — — 76 158 Home equity lines of credit 985 (7) 5 186 1,169 Residential Mortgages secured by first liens 4,539 (79) 47 2,436 6,943 Residential Mortgages secured by junior liens 241 (3) — 308 546 Other revolving credit plans 507 (41) 13 49 528 Automobile 132 (26) 3 154 263 Other consumer 2,962 (1,193) 140 637 2,546 Credit cards 66 (112) 18 120 92 Overdrafts 244 (438) 160 275 241 Total loans $ 34,340 $ (3,384) $ 629 $ 6,003 $ 37,588 (1) Excludes provision for credit losses related to unfunded commitments. Note 18, "Off-Balance Sheet Commitments and Contingencies," in the consolidated financial statements provides more detail concerning the provision for credit losses related to unfunded commitments of the Corporation. For the year ended December 31, 2023, the allowance for credit losses increased primarily due to the growth in the Corporation's loan portfolio, including growth in new market areas. This was partially offset by improvements in the Corporation's historical loss rates, as well as the impact of net charge-offs. The year-over-year increase in reserves experienced in 2022 was primarily due to loan growth, the impact of net charge-offs, and the provision for credit losses recorded in 2022. There is still a significant amount of uncertainty related to the domestic and global economy, tightening credit conditions, persistent inflation, and higher interest rates. Management will continue to proactively evaluate its estimate of expected credit losses as new information becomes available. Provision for credit losses was $6.0 million for the year ended December 31, 2023, compared to $8.6 million and $6.0 million for the years ended December 31, 2022 and 2021, respectively. Included in the provision for credit losses for the year ended December 31, 2023 was $156 thousand related to the allowance for unfunded commitments compared to $603 thousand and zero provision towards the allowance for unfunded commitments for the years ended December 31, 2022 and 2021, respectively. The following tables present the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of December 31, 2023 and 2022, respectively: December 31, 2023 Nonaccrual Nonaccrual With No Allowance for Credit Loss Loans Past Due over 89 Days Still Accruing Farmland $ 1,083 $ 1,083 $ — Owner-occupied, nonfarm nonresidential properties 2,673 1,488 — Commercial and Industrial 7,512 4,389 — Other construction loans and all land development and other land loans 1,653 104 — Multifamily (5 or more) residential properties 305 305 — Non-owner occupied, nonfarm nonresidential properties 9,076 6,716 — Home equity lines of credit 940 940 — Residential Mortgages secured by first liens 5,316 4,902 23 Residential Mortgages secured by junior liens 123 123 — Other revolving credit plans 81 81 — Automobile 79 79 — Other consumer 798 798 — Credit cards — — 32 Total loans $ 29,639 $ 21,008 $ 55 December 31, 2022 Nonaccrual Nonaccrual With No Allowance for Credit Loss Loans Past Due over 89 Days Still Accruing Farmland $ 1,011 $ 1,011 $ 994 Owner-occupied, nonfarm nonresidential properties 2,055 1,987 — Commercial and Industrial 5,485 2,366 71 Other construction loans and all land development and other land loans 567 567 — Multifamily (5 or more) residential properties 1,066 423 — Non-owner occupied, nonfarm nonresidential properties 5,081 2,665 — Home equity lines of credit 475 475 — Residential Mortgages secured by first liens 4,329 3,882 48 Residential Mortgages secured by junior liens 91 91 — Other revolving credit plans 26 26 — Automobile 19 19 — Other consumer 781 781 — Credit cards — — 8 Total loans $ 20,986 $ 14,293 $ 1,121 All payments received while on nonaccrual status are applied against the principal balance of the loan. The Corporation does not recognize interest income while loans are on nonaccrual status. The following tables present the amortized cost basis of loans receivable that are individually evaluated and collateral-dependent by class of loans as of December 31, 2023 and 2022, respectively: December 31, 2023 Real Estate Collateral Non-Real Estate Collateral Farmland $ 736 $ — Owner-occupied, nonfarm nonresidential properties 6,890 4 Commercial and Industrial 5,489 4,291 Other construction loans and all land development and other land loans 1,549 — Multifamily (5 or more) residential properties 305 — Non-owner occupied, nonfarm nonresidential properties 8,291 — Home equity lines of credit 308 — Residential Mortgages secured by first liens 1,070 — Total loans $ 24,638 $ 4,295 December 31, 2022 Real Estate Collateral Non-Real Estate Collateral Farmland $ 829 $ — Owner-occupied, nonfarm nonresidential properties 1,296 4 Commercial and Industrial — 1,904 Other construction loans and all land development and other land loans 501 — Multifamily (5 or more) residential properties 1,066 — Non-owner occupied, nonfarm nonresidential properties 5,874 — Home equity lines of credit 335 — Residential Mortgages secured by first liens 1,150 — Total loans $ 11,051 $ 1,908 The following table presents the aging of the amortized cost basis in past-due loans as of December 31, 2023 by class of loans: 30 - 59 60 - 89 Greater Than 89 Total Past Due Loans Not Past Due Total Farmland $ — $ 182 $ 129 $ 311 $ 31,558 $ 31,869 Owner-occupied, nonfarm nonresidential properties 120 — 1,390 1,510 491,554 493,064 Agricultural production and other loans to farmers — — — — 1,652 1,652 Commercial and Industrial 64 379 314 757 725,685 726,442 Obligations (other than securities and leases) of states and political subdivisions — — — — 152,201 152,201 Other loans — — — — 25,507 25,507 Other construction loans and all land development and other land loans — 41 1,612 1,653 489,886 491,539 Multifamily (5 or more) residential properties — — 305 305 254,037 254,342 Non-owner occupied, nonfarm nonresidential properties 95 299 2,031 2,425 893,618 896,043 1-4 Family Construction — — — — 51,207 51,207 Home equity lines of credit 582 682 339 1,603 129,097 130,700 Residential Mortgages secured by first liens 2,360 1,094 1,651 5,105 985,881 990,986 Residential Mortgages secured by junior liens 21 38 60 119 90,944 91,063 Other revolving credit plans 114 41 14 169 42,708 42,877 Automobile 62 5 67 134 25,181 25,315 Other consumer 452 453 354 1,259 50,333 51,592 Credit cards 110 17 32 159 11,626 11,785 Overdrafts — — — — 292 292 Total loans $ 3,980 $ 3,231 $ 8,298 $ 15,509 $ 4,452,967 $ 4,468,476 The following table presents the aging of the amortized cost basis in past-due loans as of December 31, 2022 by class of loans. 30 - 59 60 - 89 Greater Than 89 Total Past Due Loans Not Past Due Total Farmland $ — $ — $ 1,136 $ 1,136 $ 31,032 $ 32,168 Owner-occupied, nonfarm nonresidential properties 185 27 734 946 467,547 468,493 Agricultural production and other loans to farmers — — — — 1,198 1,198 Commercial and Industrial 246 93 611 950 790,961 791,911 Obligations (other than securities and leases) of states and political subdivisions — — — — 145,345 145,345 Other loans — — — — 24,710 24,710 Other construction loans and all land development and other land loans 1,522 — 501 2,023 444,662 446,685 Multifamily (5 or more) residential properties 706 — 90 796 256,900 257,696 Non-owner occupied, nonfarm nonresidential properties 113 60 879 1,052 794,263 795,315 1-4 Family Construction — — — — 51,171 51,171 Home equity lines of credit 203 10 49 262 124,630 124,892 Residential Mortgages secured by first liens 1,302 538 1,775 3,615 938,916 942,531 Residential Mortgages secured by junior liens 5 — 51 56 74,582 74,638 Other revolving credit plans 65 27 — 92 36,280 36,372 Automobile 36 — — 36 21,770 21,806 Other consumer 361 188 473 1,022 48,122 49,144 Credit cards 196 18 8 222 10,603 10,825 Overdrafts — — — — 278 278 Total loans $ 4,940 $ 961 $ 6,307 $ 12,208 $ 4,262,970 $ 4,275,178 Loan Modifications The Corporation adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measure of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. Occasionally, the Corporation modifies loans to borrowers in financial distress by providing principal forgiveness, term extension, an other-than-insignificant payment delay or interest rate reduction. When principal forgiveness is provided, the amount of forgiveness is charged-off against the allowance for credit losses. In some cases, the Corporation provides multiple types of concessions on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another concession, such as principal forgiveness, may be granted. For the loans included in the “combination” columns below, multiple types of modifications have been made on the same loan within the current reporting period. The combination is at least two of the following: a term extension, principal forgiveness, an other-than-insignificant payment delay and/or an interest rate reduction. The following table presents the amortized cost basis of loans at December 31, 2023 that were both experiencing financial difficulty and modified during the year ended December 31, 2023, by class and by type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below: Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Payment Delay and Term Extension Total Class of Financing Receivable Owner-occupied, nonfarm nonresidential properties $ — $ 5,934 $ — $ — $ — 1.2 % Commercial and Industrial — 7,794 524 320 — 1.2 Non-owner occupied, nonfarm nonresidential properties — 5,911 — — 785 0.7 Residential Mortgages secured by first liens — — 414 — — — Residential Mortgages secured by junior liens — — 29 — — — Total $ — $ 19,639 $ 967 $ 320 $ 785 0.5 % The Corporation has zero in unfunded available credit to customers whose loan receivables are included in the previous table. The Corporation closely monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the performance of such loans that have been modified during the year ended December 31, 2023: Current 30 - 59 60 - 89 Greater Than 89 Total Past Due Owner-occupied, nonfarm nonresidential properties $ 5,934 $ — $ — $ — $ — Commercial and Industrial 8,638 — — — — Non-owner occupied, nonfarm nonresidential properties 6,696 — — — — Residential Mortgages secured by first liens 414 — — — — Residential Mortgages secured by junior liens 29 — — — — Total $ 21,711 $ — $ — $ — $ — The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the year ended December 31, 2023: Principal Forgiveness Weighted Average Weighted Average Commercial and Industrial $ — 1.00 0.5 % Non-owner occupied, nonfarm nonresidential properties — 0.75 — Residential Mortgages secured by first liens — 0.50 — Residential Mortgages secured by junior liens — 0.50 — Total $ — 0.76 0.5 % The following table presents the amortized cost basis of loans that had a payment default during the year ended December 31, 2023 and were modified in the twelve months prior to that default to borrowers experiencing financial difficulty: Principal Forgiveness Payment Delay Term Extension Interest Rate Reduction Combination Payment Delay and Term Extension Other construction loans and all land development and other land loans $ — $ 1,549 $ — $ — $ — Non-owner occupied, nonfarm nonresidential properties — — 1,523 — — Total $ — $ 1,549 $ 1,523 $ — $ — If the Corporation determines that a modified loan (or portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off and the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. Troubled Debt Restructurings Prior to the Adoption of ASU 2022-02 In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without a loan modification. This evaluation is performed using the Corporation’s internal underwriting policies. The Corporation has no further loan commitments to customers whose loan receivables are classified as a TDR. As of December 31, 2022, the terms of certain loans were modified as TDRs. The modification of the terms of such loans included either or both of the following: a reduction of the stated interest rate of the loan; or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The Corporation had an amortized cost in TDRs of $12.4 million and $16.6 million as of December 31, 2022 and 2021, respectively. The Corporation has allocated $2.2 million and $2.6 million of allowance for those loans as of December 31, 2022 and 2021, respectively. The following tables presents loans by class modified as troubled debt restructurings that occurred during the years ended December 31, 2022, and 2021: Year Ended December 31, 2022 Number of Pre-Modification Post-Modification Type of Modification Commercial and Industrial 1 $ 96 $ 96 Extend Amortization Non-owner occupied, nonfarm nonresidential properties 1 1,784 1,784 Modify Rate and Extend Amortization Total loans 2 $ 1,880 $ 1,880 Year Ended December 31, 2021 Number of Pre-Modification Post-Modification Type of Modification Commercial and Industrial 2 3,336 3,336 Modify Payment Multifamily (5 or more) residential properties 1 717 717 Modify Payment Non-owner occupied, nonfarm nonresidential properties 1 1,604 1,604 Modify Payment Total loans 4 $ 5,657 $ 5,657 The TDRs described above increased the allowance for credit losses by immaterial amounts for the years ended December 31, 2022, and 2021, respectively. A loan receivable is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no loans receivable modified as TDRs for which there was a payment default within twelve months following the modification during the years ended December 31, 2022 and 2021, respectively, and no principal balances were forgiven in connection with the loan receivable restructurings. As discussed above, effective for January 1, 2023, the Corporation adopted prospectively Accounting Standard Update 2022-02, which eliminated the separate recognition and measurement guidance for TDRs by creditors. Credit Quality Indicators The Corporation categorizes loans receivable into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Corporation analyzes loans individually to classify the loans as to credit risk. The Corporation uses the following definitions for risk ratings: Special Mention : A loan classified as special mention has 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 Corporation’s credit position at some future date. Substandard : A loan classified as substandard is inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. The loan has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Doubtful : A loan classified as doubtful has all the weaknesses inherent in those classified as substandard, 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. The following tables represent the Corporation's commercial credit risk profile by risk rating as of December 31, 2023 and 2022, respectively. Loans receivable not rated as special mention, substandard, or doubtful are considered to be pass rated loans. December 31, 2023 Non-Pass Rated Pass Special Mention Substandard Doubtful Total Non-Pass Total Farmland $ 30,786 $ — $ 1,083 $ — $ 1,083 $ 31,869 Owner-occupied, nonfarm nonresidential properties 461,554 20,177 11,333 — 31,510 493,064 Agricultural production and other loans to farmers 1,652 — — — — 1,652 Commercial and Industrial 653,981 52,030 20,431 — 72,461 726,442 Obligations (other than securities and leases) of states and political subdivisions 139,014 13,187 — — 13,187 152,201 Other loans 25,507 — — — — 25,507 Other construction loans and all land development and other land loans 484,620 5,307 1,612 — 6,919 491,539 Multifamily (5 or more) residential properties 252,199 1,346 797 — 2,143 254,342 Non-owner occupied, nonfarm nonresidential properties 869,264 3,008 23,771 — 26,779 896,043 Total loans $ 2,918,577 $ 95,055 $ 59,027 $ — $ 154,082 $ 3,072,659 December 31, 2022 Non-Pass Rated Pass Special Mention Substandard Doubtful Total Non-Pass Total Farmland $ 29,706 $ 1,450 $ 1,012 $ — $ 2,462 $ 32,168 Owner-occupied, nonfarm nonresidential properties 433,467 27,796 7,230 — 35,026 468,493 Agricultural production and other loans to farmers 1,198 — — — — 1,198 Commercial and Industrial 765,821 14,740 10,037 1,313 26,090 791,911 Obligations (other than securities and leases) of states and political subdivisions 145,345 — — — — 145,345 Other loans 24,710 — — — — 24,710 Other construction loans and all land development and other land loans 443,300 1,296 2,089 — 3,385 446,685 Multifamily (5 or more) residential properties 256,120 510 1,066 — 1,576 257,696 Non-owner occupied, nonfarm nonresidential properties 772,450 2,791 20,074 — 22,865 795,315 Total loans $ 2,872,117 $ 48,583 $ 41,508 $ 1,313 $ 91,404 $ 2,963,521 The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2023. Current period originations may include modifications. Term Loans Amortized Cost Basis by Origination Year 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Farmland Risk rating Pass $ 3,153 $ 11,393 $ 6,845 $ 1,465 $ 815 $ 6,813 $ 302 $ — $ 30,786 Special mention — — — — — — — — — Substandard — — 306 — — 777 — — 1,083 Total $ 3,153 $ 11,393 $ 7,151 $ 1,465 $ 815 $ 7,590 $ 302 $ — $ 31,869 Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Owner-occupied, nonfarm nonresidential properties Risk rating Pass $ 62,529 $ 121,722 $ 103,698 $ 44,286 $ 45,749 $ 73,649 $ 9,921 $ — $ 461,554 Special mention 320 1,304 1,180 13,623 407 210 3,133 — 20,177 Substandard 848 — 696 292 6,738 2,593 166 — 11,333 Total $ 63,697 $ 123,026 $ 105,574 $ 58,201 $ 52,894 $ 76,452 $ 13,220 $ — $ 493,064 Current period gross write offs $ — $ — $ — $ — $ — $ 26 $ — $ — $ 26 Agricultural production and other loans to farmers Risk rating Pass $ 703 $ 34 $ 89 $ 60 $ 5 $ 159 $ 602 $ — $ 1,652 Special mention — — — — — — — — — Substandard — — — — — — — — — Total $ 703 $ 34 $ 89 $ 60 $ 5 $ 159 $ 602 $ — $ 1,652 Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Commercial and Industrial Risk rating Pass $ 78,325 $ 140,178 $ 141,439 $ 33,475 $ 6,662 $ 14,709 $ 239,193 $ — $ 653,981 Special mention 7,718 7,803 2,795 65 139 21 33,489 — 52,030 Substandard — 385 4,281 396 3,476 1,655 10,238 — 20,431 Total $ 86,043 $ 148,366 $ 148,515 $ 33,936 $ 10,277 $ 16,385 $ 282,920 $ — $ 726,442 Current period gross write offs $ 50 $ — $ — $ 191 $ — $ — $ 151 $ — $ 392 Obligations (other than securities and leases) of states and political subdivisions Risk rating Pass $ 24,964 $ 16,791 $ 31,768 $ 12,399 $ 4,190 $ 45,331 $ 3,571 $ — $ 139,014 Special mention — — — — — 13,187 — — 13,187 Substandard — — — — — — — — — Total $ 24,964 $ 16,791 $ 31,768 $ 12,399 $ 4,190 $ 58,518 $ 3,571 $ — $ 152,201 Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Other loans Risk rating Pass $ 3,649 $ 12,211 $ 5,289 $ 1,809 $ 288 $ — $ 2,261 $ — $ 25,507 Special mention — — — — — — — — — Substandard — — — — — — — — — Total $ 3,649 $ 12,211 $ 5,289 $ 1,809 $ 288 $ — $ 2,261 $ — $ 25,507 Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Term Loans Amortized Cost Basis by Origination Year 2023 2022 2021 2020 2019 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Other construction loans and all land development and other land loans Risk rating Pass $ 111,843 $ 269,531 $ 69,470 $ 19,028 $ 6,086 $ 1,262 $ 7,400 $ — $ 484,620 Special mention — 5,307 — — — — — — 5,307 Substandard — — — — 1,549 — 63 — 1,612 Total $ 111,843 $ 274,838 $ 69,470 $ 19,028 $ 7,635 $ 1,262 $ 7,463 $ — $ 491,539 Current period gross write offs $ — $ — $ — $ — $ — $ — $ — $ — $ — Multifamily (5 or more) residential properties Risk rating Pass $ 37,366 $ 95,635 $ 63,203 $ 24,527 $ 10,928 $ 19,786 $ 754 $ — $ 252,199 Special mention 1,346 — — — — — — — 1,346 Substandard 797 — — — — — — — 797 Total $ 39,509 $ 95,635 $ 63,203 $ 24,527 $ 10,928 $ 19,786 $ 754 $ — $ 254,342 Current period gross write offs $ — $ — $ — $ — $ — $ 65 $ — $ — $ 65 Non-owner occupied, nonfarm nonresidential properties Risk rating Pass $ 192,826 $ 297,394 $ 151,365 $ 39,585 $ 54,388 $ 125,532 $ 8,174 $ — $ 869,264 Special mention — — — 1,887 — 688 433 — 3,008 Substandard 778 1,134 488 5,911 3,266 10,484 1,710 — 23,771 Total $ 193,604 $ 298,528 $ 151,853 $ 47,383 $ 57,654 $ 136,704 $ 10,317 $ — $ 896,043 Current period gross write offs $ — $ 358 $ — $ — $ 88 $ — $ 248 $ — $ 694 The following tables detail the amortized cost of loans receivable, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2022. Current period originations may include modifications. Term Loans Amortized Cost Basis by Origination Year 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Farmland Risk rating Pass $ 12,321 $ 7,635 $ 1,536 $ 871 $ 3,277 $ 3,523 $ 543 $ — $ 29,706 Special mention — — — — — 1,450 — — 1,450 Substandard — 347 — — 142 523 — — 1,012 Total $ 12,321 $ 7,982 $ 1,536 $ 871 $ 3,419 $ 5,496 $ 543 $ — $ 32,168 Owner-occupied, nonfarm nonresidential properties Risk rating Pass $ 116,701 $ 113,575 $ 50,226 $ 55,040 $ 25,327 $ 60,810 $ 11,788 $ — $ 433,467 Special mention 3,402 — 15,613 872 4,097 814 2,998 — 27,796 Substandard — — 355 1,864 862 4,149 — — 7,230 Total $ 120,103 $ 113,575 $ 66,194 $ 57,776 $ 30,286 $ 65,773 $ 14,786 $ — $ 468,493 Agricultural production and other loans to farmers Risk rating Pass $ 105 $ 140 $ 80 $ 42 $ 179 $ — $ 652 $ — $ 1,198 Special mention — — — — — — — — — Substandard — — — — — — — — — Total $ 105 $ 140 $ 80 $ 42 $ 179 $ — $ 652 $ — $ 1,198 Commercial and Industrial Risk rating Pass $ 195,955 $ 213,433 $ 51,695 $ 16,730 $ 9,051 $ 19,116 $ 259,841 $ — $ 765,821 Special mention 241 — 6,691 273 81 45 7,409 — 14,740 Substandard 299 1,809 689 379 324 913 5,624 — 10,037 Doubtful (1) — 1,313 — — — — — — 1,313 Total $ 196,495 $ 216,555 $ 59,075 $ 17,382 $ 9,456 $ 20,074 $ 272,874 $ — $ 791,911 Obligations (other than securities and leases) of states and political subdivisions Risk rating Pass $ 20,840 $ 37,527 $ 13,868 $ 4,584 $ 13,518 $ 50,050 $ 4,958 $ — $ 145,345 Special mention — — — — — — — — — Substandard — — — — — — — — — Total $ 20,840 $ 37,527 $ 13,868 $ 4,584 $ 13,518 $ 50,050 $ 4,958 $ — $ 145,345 Other loans Risk rating Pass $ 14,248 $ 5,358 $ 2,278 $ 363 $ — $ — $ 2,463 $ — $ 24,710 Special mention — — — — — — — — — Substandard — — — — — — — — — Total $ 14,248 $ 5,358 $ 2,278 $ 363 $ — $ — $ 2,463 $ — $ 24,710 (1) Consists of one loan relationship originated in 2015 and modified in 2021. The modification met the requirements to disclose the loan relationship as a new loan during 2021. Term Loans Amortized Cost Basis by Origination Year 2022 2021 2020 2019 2018 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Other construction loans and all land development and other land loans Risk rating Pass $ 272,118 $ 86,894 $ 56,782 $ 6,918 $ 8,644 $ 916 $ 11,028 $ — $ 443,300 Special mention 1,296 — — — — — — — 1,296 Substandard — 2,023 — — — — 66 — 2,089 Total $ 273,414 $ 88,917 $ 56,782 $ 6,918 $ 8,644 $ 916 $ 11,094 $ — $ 446,685 Multifamily (5 or more) residential properties Risk rating Pass $ 114,454 $ 49,794 $ 46,784 $ 11,854 $ 6,764 $ 23,841 $ 2,629 $ — $ 256,120 Special mention — — — — — 510 — — 510 Substandard 643 — — — 333 90 — — 1,066 Total $ 115,097 $ 49,794 $ 46,784 $ 11,854 $ 7,097 $ 24,441 $ 2,629 $ — $ 257,696 Non-owner occupied, nonfarm nonresidential properties Risk rating Pass $ 339,151 $ 153,613 $ 51,709 $ 66,592 $ 45,211 $ 107,988 $ 8,186 $ — $ 772,450 Special mention — 488 — 273 498 1,068 464 — 2,791 Substandard 2,227 800 — 4,090 1,314 9,587 2,056 — 20,074 Total $ 341,378 $ 154,901 $ 51,709 $ 70,955 $ 47,023 $ 118,643 $ 10,706 $ — $ 795,315 The Corporation considers the performance of the loan portfolio and its impact on the allowance for credit losses. For 1-4 |