v3.25.2
Loans, Allowance for Credit Losses - Loans, and Credit Quality
 6 Months Ended
Jun. 30, 2025
Receivables [Abstract]  
Loans, Allowance for Credit Losses - Loans, and Credit Quality Loans, Allowance for Credit Losses - Loans, and Credit Quality
The loan composition is summarized as follows.
June 30, 2025December 31, 2024
(in thousands)Amount% of
Total		Amount% of
Total
Commercial & industrial$1,412,621 20 %$1,319,763 20 %
Owner-occupied commercial real estate (“CRE”)963,278 14 940,367 14 
Agricultural1,346,924 20 1,322,038 20 
CRE investment1,231,423 18 1,221,826 18 
Construction & land development298,122 4 239,694 4 
Residential construction88,152 1 96,110 1 
Residential first mortgage1,205,841 18 1,196,158 18 
Residential junior mortgage249,406 4 234,634 4 
Retail & other43,374 1 55,994 1 
Loans
6,839,141 100 %6,626,584 100 %
Less allowance for credit losses - Loans (“ACL-Loans”)68,408 66,322 
Loans, net
$6,770,733 $6,560,262 
Allowance for credit losses - Loans to loans1.00 %1.00 %
Accrued interest on loans totaled $22 million and $20 million at June 30, 2025 and December 31, 2024, respectively, and is included in accrued interest receivable and other assets on the consolidated balance sheets.
Allowance for Credit Losses - Loans:
The majority of the Company’s loans, commitments, and letters of credit have been granted to customers in the Company’s market area. Although the Company has a diversified loan portfolio, the credit risk in the loan portfolio is largely influenced by general economic conditions and trends of the counties and markets in which the debtors operate, and the resulting impact on the operations of borrowers or on the value of underlying collateral, if any.
A roll forward of the allowance for credit losses - loans is summarized as follows.
Three Months Ended Six Months EndedYear Ended
(in thousands)June 30, 2025June 30, 2024June 30, 2025June 30, 2024December 31, 2024
Beginning balance$67,480 $64,347 $66,322 $63,610 $63,610 
Provision for credit losses - loans1,300 1,350 2,800 2,100 3,750 
Charge-offs(568)(375)(956)(591)(1,493)
Recoveries196 92 242 295 455 
Net (charge-offs) recoveries(372)(283)(714)(296)(1,038)
Ending balance$68,408 $65,414 $68,408 $65,414 $66,322 
The following tables present the balance and activity in the ACL-Loans by portfolio segment.
Six Months Ended June 30, 2025
(in thousands)Commercial
& industrial		Owner-
occupied
CRE		AgriculturalCRE
investment		Construction & land
development		Residential
construction		Residential
first mortgage		Residential
junior
mortgage		Retail
& other		Total
ACL-Loans
Beginning balance$16,147 $5,362 $9,957 $14,616 $2,658 $1,234 $12,590 $2,827 $931 $66,322 
Provision1,488 204 244 316 570 (103)92 239 (250)2,800 
Charge-offs(598)(189)(65)— — — (13)(2)(89)(956)
Recoveries154 35 — — — — — 1 52 242 
Net (charge-offs) recoveries(444)(154)(65)— — — (13)(1)(37)(714)
Ending balance$17,191 $5,412 $10,136 $14,932 $3,228 $1,131 $12,669 $3,065 $644 $68,408 
As % of ACL-Loans25 %8 %15 %22 %5 %2 %18 %4 %1 %100 %

Year Ended December 31, 2024
(in thousands)Commercial
& industrial		Owner-
occupied
CRE		AgriculturalCRE
investment		Construction
& land
development		Residential
construction		Residential
first
mortgage		Residential
junior
mortgage		Retail &
other		 
Total
ACL-Loans
Beginning balance$15,225 $9,082 $12,629 $12,693 $2,440 $916 $7,320 $2,098 $1,207 $63,610 
Provision1,789 (3,844)(2,672)1,923 218 318 5,237 720 61 3,750 
Charge-offs(918)(120)— — — — — — (455)(1,493)
Recoveries51 244 — — — — 33 9 118 455 
Net (charge-offs) recoveries(867)124 — — — — 33 9 (337)(1,038)
Ending balance$16,147 $5,362 $9,957 $14,616 $2,658 $1,234 $12,590 $2,827 $931 $66,322 
As % of ACL-Loans24 %8 %15 %22 %4 %2 %19 %4 %2 %100 %
The ACL-Loans represents management’s estimate of expected credit losses in the Company’s loan portfolio at the balance sheet date. To assess the appropriateness of the ACL-Loans, management applies a methodology which focuses on evaluation of qualitative and environmental factors, including but not limited to: (i) evaluation of facts and issues related to specific loans; (ii) management’s ongoing review and grading of the loan portfolio; (iii) consideration of historical loan loss and delinquency experience on each portfolio segment; (iv) trends in past due and nonperforming loans; (v) the risk characteristics of the various loan segments; (vi) changes in the size and character of the loan portfolio; (vii) concentrations of loans to specific borrowers or industries; (viii) existing economic conditions; (ix) the fair value of underlying collateral; and (x) other qualitative and quantitative factors which could affect expected credit losses. Assessing these numerous factors involves significant judgment.
Management allocates the ACL-Loans by pools of risk within each loan portfolio segment. The allocation methodology consists of the following components. First, a specific reserve is established for individually evaluated credit-deteriorated loans, which management defines as nonaccrual credit relationships over $250,000, collateral dependent loans, purchased credit deteriorated loans, and other loans with evidence of credit deterioration. The specific reserve in the ACL-Loans for these credit deteriorated loans is equal to the aggregate collateral or discounted cash flow shortfall. Management allocates the ACL-Loans with historical loss rates by loan segment. The loss factors are measured on a quarterly basis and applied to each loan segment based on current loan balances and projected for their expected remaining life. Next, management allocates the ACL-Loans using the qualitative factors mentioned above. Consideration is given to those current qualitative or environmental factors that are likely to cause estimated credit losses as of the evaluation date to differ from the historical loss experience of each loan segment. Lastly, management considers reasonable and supportable forecasts to assess the collectability of future cash flows.
Allowance for Credit Losses-Unfunded Commitments:
In addition to the ACL-Loans, the Company has established an ACL-Unfunded commitments, classified in accrued interest payable and other liabilities on the consolidated balance sheets. This reserve is maintained at a level that management believes is sufficient to absorb losses arising from unfunded loan commitments, and is determined quarterly based on methodology similar to the methodology for determining the ACL-Loans. The reserve for unfunded commitments was $2.8 million and $3.1 million at June 30, 2025 and December 31, 2024, respectively.
Provision for Credit Losses:
The provision for credit losses is determined by the Company as the amount to be added to the ACL loss accounts for various types of financial instruments including loans, investment securities, and off-balance sheet credit exposures after net charge-offs have been deducted to bring the ACL to a level that, in management’s judgment, is necessary to absorb expected credit losses over the lives of the respective financial instruments. See Note 4 for additional information regarding the ACL related to investment securities. The following table presents the components of the provision for credit losses.
Three Months Ended Six Months EndedYear Ended
(in thousands)June 30, 2025June 30, 2024June 30, 2025June 30, 2024December 31, 2024
Provision for credit losses on:
Loans$1,300 $1,350 $2,800 $2,100 $3,750 
Unfunded commitments(250)— (250)— 100 
Investment securities— — — — — 
Total$1,050 $1,350 $2,550 $2,100 $3,850 
Collateral Dependent Loans:
A loan is considered to be collateral dependent when, based upon management’s assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. For collateral dependent loans, expected credit losses are based on the estimated fair value of the collateral at the balance sheet date, with consideration for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. The following tables present collateral dependent loans by portfolio segment and collateral type, including those loans with and without a related allowance allocation.
June 30, 2025Collateral Type
(in thousands)Real EstateOther Business AssetsTotalWithout an AllowanceWith an AllowanceAllowance Allocation
Commercial & industrial$— $5,632 $5,632 $4,122 $1,510 $585 
Owner-occupied CRE5,781 — 5,781 5,090 691 — 
Agricultural7,588 3,784 11,372 11,372 — — 
CRE investment525 — 525 525 — — 
Construction & land development— — — — — — 
Residential construction— — — — — — 
Residential first mortgage468 — 468 468 — — 
Residential junior mortgage105 — 105 — 105 17 
Retail & other— 9 9 9 — — 
Total loans$14,467 $9,425 $23,892 $21,586 $2,306 $602 

December 31, 2024Collateral Type
(in thousands)Real EstateOther Business AssetsTotalWithout an AllowanceWith an AllowanceAllowance Allocation
Commercial & industrial$— $7,788 $7,788 $4,047 $3,741 $723 
Owner-occupied CRE3,744 — 3,744 3,378 366 49 
Agricultural5,964 3,740 9,704 9,704 — — 
CRE investment1,488 — 1,488 1,488 — — 
Construction & land development— — — — — — 
Residential construction— — — — — — 
Residential first mortgage242 — 242 242 — — 
Residential junior mortgage— — — — — — 
Retail & other— 14 14 — 14 1 
Total loans$11,438 $11,542 $22,980 $18,859 $4,121 $773 
Past Due and Nonaccrual Loans:
The following tables present past due loans by portfolio segment.
June 30, 2025
(in thousands)30-89 Days Past
Due (accruing)		90 Days & Over or nonaccrualCurrentTotal
Commercial & industrial$681 $6,317 $1,405,623 $1,412,621 
Owner-occupied CRE285 7,114 955,879 963,278 
Agricultural37 11,619 1,335,268 1,346,924 
CRE investment— 573 1,230,850 1,231,423 
Construction & land development11 — 298,111 298,122 
Residential construction281 — 87,871 88,152 
Residential first mortgage1,722 1,527 1,202,592 1,205,841 
Residential junior mortgage84 486 248,836 249,406 
Retail & other358 99 42,917 43,374 
Total loans$3,459 $27,735 $6,807,947 $6,839,141 
Percent of total loans0.1 %0.4 %99.5 %100.0 %
December 31, 2024
(in thousands)30-89 Days Past
Due (accruing)		90 Days & Over or nonaccrualCurrentTotal
Commercial & industrial$693 $8,534 $1,310,536 $1,319,763 
Owner-occupied CRE177 4,547 935,643 940,367 
Agricultural— 9,969 1,312,069 1,322,038 
CRE investment— 1,688 1,220,138 1,221,826 
Construction & land development67 — 239,627 239,694 
Residential construction291 — 95,819 96,110 
Residential first mortgage3,989 3,370 1,188,799 1,196,158 
Residential junior mortgage333 185 234,116 234,634 
Retail & other237 126 55,631 55,994 
Total loans$5,787 $28,419 $6,592,378 $6,626,584 
Percent of total loans0.1 %0.4 %99.5 %100.0 %

The following table presents nonaccrual loans by portfolio segment.
June 30, 2025December 31, 2024
(in thousands)Nonaccrual Loans% of TotalNonaccrual Loans% of Total
Commercial & industrial$6,317 23 %$8,534 30 %
Owner-occupied CRE7,114 26 4,547 16 
Agricultural11,619 42 9,969 35 
CRE investment573 2 1,688 6 
Construction & land development— — — — 
Residential construction— — — — 
Residential first mortgage1,527 5 3,370 12 
Residential junior mortgage486 2 185 1 
Retail & other99 — 126 — 
Nonaccrual loans
$27,735 100 %$28,419 100 %
Percent of total loans0.4 %0.4 %
Credit Quality Information:
The following tables present total loans by risk categories and year of origination, as well as gross charge-offs by year of origination. Acquired loans have been included based upon the actual origination date.
June 30, 2025Amortized Cost Basis by Origination Year
(in thousands)20252024202320222021PriorRevolvingRevolving to TermTOTAL
Commercial & industrial
Grades 1-4$179,563 $177,713 $127,563 $127,779 $94,678 $97,859 $458,826 $— $1,263,981 
Grade 54,389 2,223 8,714 11,932 9,311 8,899 41,338 — 86,806 
Grade 611,614 2,316 1,539 — 148 44 13,728 — 29,389 
Grade 7550 891 3,270 3,369 4,025 5,577 14,763 — 32,445 
Total$196,116 $183,143 $141,086 $143,080 $108,162 $112,379 $528,655 $— $1,412,621 
Current period gross charge-offs$— $— $— $(66)$(524)$(8)$— $— $(598)
Owner-occupied CRE
Grades 1-4$78,413 $93,443 $92,653 $146,156 $136,499 $311,841 $4,639 $— $863,644 
Grade 5650 12,611 3,483 13,324 12,327 19,231 48 — 61,674 
Grade 6— 2,134 1,513 — — 2,168 — — 5,815 
Grade 7— 1,988 3,771 2,313 7,497 16,576 — — 32,145 
Total$79,063 $110,176 $101,420 $161,793 $156,323 $349,816 $4,687 $— $963,278 
Current period gross charge-offs$— $— $— $— $— $(189)$— $— $(189)
Agricultural
Grades 1-4$70,044 $209,440 $132,226 $252,400 $119,826 $196,046 $249,479 $— $1,229,461 
Grade 58,565 6,117 4,027 3,917 3,437 23,412 22,837 — 72,312 
Grade 61,420 50 862 189 — 6,265 2,015 — 10,801 
Grade 764 621 1,740 5,769 5,896 17,214 3,046 — 34,350 
Total$80,093 $216,228 $138,855 $262,275 $129,159 $242,937 $277,377 $— $1,346,924 
Current period gross charge-offs$— $(65)$— $— $— $— $— $— $(65)
CRE investment
Grades 1-4$57,363 $105,818 $55,772 $247,161 $231,969 $489,954 $10,243 $— $1,198,280 
Grade 5325 1,715 — 5,361 3,131 20,571 91 — 31,194 
Grade 6— — — 595 — 312 — — 907 
Grade 7— — 437 — — 605 — — 1,042 
Total$57,688 $107,533 $56,209 $253,117 $235,100 $511,442 $10,334 $— $1,231,423 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction & land development
Grades 1-4$33,987 $132,204 $35,527 $29,987 $43,969 $12,752 $2,539 $— $290,965 
Grade 5— 1,430 41 1,862 3,025 483 — — 6,841 
Grade 6— — 75 171 — — — — 246 
Grade 7— — — 70 — — — — 70 
Total$33,987 $133,634 $35,643 $32,090 $46,994 $13,235 $2,539 $— $298,122 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Residential construction
Grades 1-4$21,143 $56,761 $3,673 $3,518 $1,664 $532 $861 $— $88,152 
Grade 5— — — — — — — — — 
Grade 6— — — — — — — — — 
Grade 7— — — — — — — — — 
Total$21,143 $56,761 $3,673 $3,518 $1,664 $532 $861 $— $88,152 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Residential first mortgage
Grades 1-4$91,481 $129,146 $159,725 $327,122 $208,167 $277,070 $350 $1 $1,193,062 
Grade 5339 568 1,373 1,537 1,307 3,204 — — 8,328 
Grade 654 — — — 67 90 — — 211 
Grade 7— 488 — 1,683 1,235 834 — — 4,240 
Total$91,874 $130,202 $161,098 $330,342 $210,776 $281,198 $350 $1 $1,205,841 
Current period gross charge-offs$— $— $— $— $— $(13)$— $— $(13)
Residential junior mortgage
Grades 1-4$8,519 $9,071 $8,083 $4,501 $2,839 $8,034 $203,474 $4,108 $248,629 
Grade 5— 14 28 — 194 — — — 236 
Grade 6— — — — — — — — — 
Grade 7— — — 51 — — 490 — 541 
Total$8,519 $9,085 $8,111 $4,552 $3,033 $8,034 $203,964 $4,108 $249,406 
Current period gross charge-offs$— $— $— $— $— $(2)$— $— $(2)
Retail & other
Grades 1-4$4,548 $5,170 $3,557 $4,330 $2,430 $4,971 $18,264 $— $43,270 
Grade 5— — — — — — — — — 
Grade 6— — — — — — — — — 
Grade 7— 29 61 — 14 — — — 104 
Total$4,548 $5,199 $3,618 $4,330 $2,444 $4,971 $18,264 $— $43,374 
Current period gross charge-offs$— $— $— $— $— $(14)$(75)$— $(89)
Total loans$573,031 $951,961 $649,713 $1,195,097 $893,655 $1,524,544 $1,047,031 $4,109 $6,839,141 
December 31, 2024Amortized Cost Basis by Origination Year
(in thousands)20242023202220212020PriorRevolvingRevolving to TermTOTAL
Commercial & industrial
Grades 1-4$225,888 $156,368 $173,824 $123,601 $41,811 $84,687 $398,708 $— $1,204,887 
Grade 52,326 4,061 7,315 9,066 1,992 7,362 41,773 — 73,895 
Grade 6148 1,300 960 50 186 1,326 5,168 — 9,138 
Grade 7314 5,773 4,331 1,081 1,713 4,277 14,354 — 31,843 
Total$228,676 $167,502 $186,430 $133,798 $45,702 $97,652 $460,003 $— $1,319,763 
Current period gross charge-offs$— $(110)$(68)$(26)$(58)$(356)$(300)$— $(918)
Owner-occupied CRE
Grades 1-4$102,650 $101,966 $155,261 $151,051 $79,073 $271,425 $4,411 $— $865,837 
Grade 51,858 7,559 6,964 7,830 3,542 18,182 24 — 45,959 
Grade 61,650 — — — 68 5,996 50 — 7,764 
Grade 7— 1,438 2,387 6,210 6,618 4,154 — — 20,807 
Total$106,158 $110,963 $164,612 $165,091 $89,301 $299,757 $4,485 $— $940,367 
Current period gross charge-offs$— $— $(90)$— $— $(30)$— $— $(120)
Agricultural
Grades 1-4$201,827 $151,827 $262,806 $124,527 $71,710 $145,128 $270,147 $— $1,227,972 
Grade 58,396 5,441 3,531 4,047 1,678 23,111 9,618 — 55,822 
Grade 61,314 — — — — 1,790 1,044 — 4,148 
Grade 7785 2,541 6,388 6,085 468 13,693 4,136 — 34,096 
Total$212,322 $159,809 $272,725 $134,659 $73,856 $183,722 $284,945 $— $1,322,038 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
CRE investment
Grades 1-4$102,931 $53,725 $240,553 $238,275 $159,838 $347,836 $7,103 $— $1,150,261 
Grade 56,542 4,205 10,999 7,763 8,002 31,037 24 — 68,572 
Grade 6— — — — — — — — — 
Grade 7— 1,034 177 — — 1,782 — — 2,993 
Total$109,473 $58,964 $251,729 $246,038 $167,840 $380,655 $7,127 $— $1,221,826 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Construction & land development
Grades 1-4$87,004 $42,684 $40,812 $46,413 $7,976 $7,409 $1,884 $— $234,182 
Grade 51,317 43 30 3,074 411 487 — — 5,362 
Grade 6— — — — — — — — — 
Grade 7— — 150 — — — — — 150 
Total$88,321 $42,727 $40,992 $49,487 $8,387 $7,896 $1,884 $— $239,694 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Residential construction
Grades 1-4$78,894 $9,307 $4,425 $1,706 $132 $429 $926 $— $95,819 
Grade 5291 — — — — — — — 291 
Grade 6— — — — — — — — — 
Grade 7— — — — — — — — — 
Total$79,185 $9,307 $4,425 $1,706 $132 $429 $926 $— $96,110 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Residential first mortgage
Grades 1-4$138,068 $174,494 $347,351 $219,376 $117,625 $184,004 $119 $1 $1,181,038 
Grade 5627 319 1,586 1,192 768 3,897 — — 8,389 
Grade 6— — — 70 — 72 — — 142 
Grade 744 66 1,817 1,384 574 2,704 — — 6,589 
Total$138,739 $174,879 $350,754 $222,022 $118,967 $190,677 $119 $1 $1,196,158 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Residential junior mortgage
Grades 1-4$17,309 $8,998 $5,466 $2,757 $3,649 $5,608 $185,318 $4,933 $234,038 
Grade 515 29 66 196 — — — — 306 
Grade 6— — — — — — — — — 
Grade 7— — — — — 32 258 — 290 
Total$17,324 $9,027 $5,532 $2,953 $3,649 $5,640 $185,576 $4,933 $234,634 
Current period gross charge-offs$— $— $— $— $— $— $— $— $— 
Retail & other
Grades 1-4$7,518 $4,469 $5,334 $3,273 $1,423 $4,477 $29,371 $— $55,865 
Grade 5— — — — — — — — — 
Grade 6— — — — — — — — — 
Grade 7— 87 — 25 17 — — — 129 
Total$7,518 $4,556 $5,334 $3,298 $1,440 $4,477 $29,371 $— $55,994 
Current period gross charge-offs$(2)$(71)$(8)$(7)$— $(82)$(285)$— $(455)
Total loans$987,716 $737,734 $1,282,533 $959,052 $509,274 $1,170,905 $974,436 $4,934 $6,626,584 
An internal loan review function rates loans using a grading system based on different risk categories. Loans with a Substandard grade are considered to have a greater risk of loss and may be assigned allocations for loss based on specific review of the weaknesses observed in the individual credits. Such loans are monitored by the loan review function to help ensure early identification of any deterioration. A description of the loan risk categories used by the Company follows.
Grades 1-4, Pass: Credits exhibit adequate cash flows, appropriate management and financial ratios within industry norms and/or are supported by sufficient collateral. Some credits in these rating categories may require a need for monitoring but elements of concern are not severe enough to warrant an elevated rating.
Grade 5, Watch: Credits with this rating are adequately secured and performing but are being monitored due to the presence of various short-term weaknesses which may include unexpected, short-term adverse financial performance, managerial problems, potential impact of a decline in the entire industry or local economy and delinquency issues. Loans to individuals or loans supported by guarantors with marginal net worth or collateral may be included in this rating category.
Grade 6, Special Mention: Credits with this rating have potential weaknesses that, without the Company’s attention and correction may result in deterioration of repayment prospects. These assets are considered Criticized Assets. Potential weaknesses may include adverse financial trends for the borrower or industry, repeated lack of compliance with Company requests, increasing debt to net worth, serious management conditions and decreasing cash flow.
Grade 7, Substandard: Assets with this rating are characterized by the distinct possibility the Company will sustain some loss if deficiencies are not corrected. All foreclosures, liquidations, and nonaccrual loans are considered to be categorized in this rating, regardless of collateral sufficiency.
Modifications to Borrowers Experiencing Financial Difficulty:
The following table presents the amortized cost of loans that were made to borrowers experiencing financial difficulty and were modified during the six months ended June 30, 2025 and June 30, 2024, respectively, aggregated by portfolio segment and type of modification.
(in thousands)Payment DelayTerm ExtensionInterest Rate ReductionTerm Extension & Interest Rate ReductionTotal% of Total Loans
Six Months Ended June 30, 2025
Commercial & industrial$2,382 $— $— $— $2,382 0.17 %
Owner-occupied CRE— — — — — — %
Agricultural— — — — — — %
CRE investment— — — — — — %
Total$2,382 $— $— $— $2,382 0.03 %
Six Months Ended June 30, 2024
Commercial & industrial$— $— $— $— $— — %
Owner-occupied CRE1,530 — — — 1,530 0.16 %
Agricultural— — — — — — %
CRE investment— — — — — — %
Total$1,530 $— $— $— $1,530 0.02 %
The loans presented in the table above have had more than insignificant payment delays (which the Company has defined as payment delays in excess of three months). These modified loans are closely monitored by the Company to understand the effectiveness of its modification efforts, and such loans generally remain in nonaccrual status pending a sustained period of performance in accordance with the modified terms.
As of June 30, 2025 and December 31, 2024, there were no loans made to borrowers experiencing financial difficulty that were modified during the current period and subsequently defaulted, and there were no commitments to lend additional funds to such debtors.