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Loans and Allowance for credit Losses | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Loans and allowance for credit losses | Loans and allowance for credit losses: Loans outstanding at September 30, 2020 and December 31, 2019, by class of financing receivable are as follows:
|  | September 30, |  | December 31,
|  | 2020 |  |  | 2019 |
Commercial and industrial (1) |  | $ | 1,417,671 |  |  | $ | 1,034,036 |
Construction |  | 1,190,878 |  |  | 551,101 |
Residential real estate: |  |  |  |
1-to-4 family mortgage |  | 1,140,611 |  |  | 710,454 |
Residential line of credit |  | 420,318 |  |  | 221,530 |
Multi-family mortgage |  | 165,937 |  |  | 69,429 |
Commercial real estate: |  |  |  |
Owner occupied |  | 924,987 |  |  | 630,270 |
Non-owner occupied |  | 1,644,400 |  |  | 920,744 |
Consumer and other |  | 308,736 |  |  | 272,078 |
Gross loans |  | 7,213,538 |  |  | 4,409,642 |
Less: Allowance for credit losses |  | (183,973) |  |  | (31,139) |
Net loans |  | $ | 7,029,565 |  |  | $ | 4,378,503 |
(1)Includes $310,719 of loans originated as part of the PPP at September 30, 2020, established by the CARES Act, in response to the COVID-19 pandemic. The PPP is administered by the SBA; loans originated as part of the PPP may be forgiven by the SBA under a set of defined rules. An allowance for credit losses of $49 at September 30, 2020, has been calculated for these loans. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans. As of September 30, 2020 and December 31, 2019, $1,083,393 and $412,966, respectively, of qualifying residential mortgage loans (including loans held for sale) and $996,582 and $545,540, respectively, of qualifying commercial mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line of credit. Additionally, as of September 30, 2020 and December 31, 2019, $1,378,968 and $1,407,662, respectively, of qualifying loans were pledged to the Federal Reserve Bank under the Borrower-in-Custody program. The components of amortized cost for loans on the consolidated balance sheet excludes accrued interest receivable as the Company elected to present accrued interest receivable separately on the balance sheet. As of September 30, 2020, total accrued interest receivable on loans was $41,797. Allowance for Credit Losses As of January 1, 2020, the Company’s policy for the allowance changed with the adoption of CECL. As permitted, the new guidance was implemented using a modified retrospective approach with the impact of the initial adoption being recorded through retained earnings at January 1, 2020, with no restatement of prior periods. Before January 1, 2020, the Company calculated the allowance on an incurred loss approach. As of January 1, 2020, the Company calculated an expected credit loss using a lifetime loss rate methodology. As a result of the difference in methodology between periods, disclosures presented below may not be comparative in nature. The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. The weighting of the economic forecast scenarios, macroeconomic variables, and the reasonable and supportable forecast period at the macroeconomic variable-level were reviewed and approved by the Company's forecast governance committee based on expectations of future economic conditions. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history. The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool. The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations. The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss. When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; TDRs and reasonably expected TDRs. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs. Reasonably expected TDRs use the same methodology as TDRs. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis. The allowance for credit losses on a TDR or a reasonably expected TDR is calculated individually using a discounted cash flow methodology, unless the loan is deemed to be collateral dependent or foreclosure is probable. The Company’s acquisitions and changes in reasonable and supportable forecasts of macroeconomic variables, primarily due to the impact of the COVID-19 pandemic, resulted in projected credit deterioration requiring the Company to recognize significant increases in the provision for credit losses during the nine months ended September 30, 2020. Specifically, the Company performed additional qualitative evaluations by class of financing receivable in line with the Company's established qualitative framework, weighting the impact of the current economic outlook, status of federal government stimulus programs, and other considerations, in order to identify specific industries or borrowers seeing credit improvement or deterioration specific to the COVID-19 pandemic. Loans acquired during the period from Franklin increased the allowance for credit losses by $77,653 as of the August 15, 2020 acquisition date and Farmers National increased the allowance for credit losses by $4,494 as of the February 14, 2020 acquisition date. Outside of the impact of Franklin on the provision for credit losses, the remaining loan portfolio benefited from improved economic forecasts, seen for the first time in 2020, reflective of the resumption of more normalized commercial activity within our markets. As such, excluding the increase recorded upon the acquisition of Franklin, we reduced the allowance for credit losses by $7,336 during the three months ended September 30, 2020 based on these improved economic forecasts. See Note 2, "Mergers and acquisitions" for additional details related to PCD loans acquired on February 14, 2020. The following provides the changes in the allowance for credit losses by class of financing receivable for the three and nine months ended September 30, 2020 and 2019:
|  | Commercial and industrial |  | Construction |  | 1-to-4 family residential mortgage |  | Residential line of credit |  | Multi-family residential mortgage |  | Commercial real estate owner occupied |  | Commercial real estate non-owner occupied |  | Consumer and other |  | Total
Three Months Ended September 30, 2020
Beginning balance - June 30, 2020 |  | $ | 8,878 |  |  | $ | 35,599 |  |  | $ | 12,463 |  |  | $ | 6,811 |  |  | $ | 4,499 |  |  | $ | 7,420 |  |  | $ | 30,444 |  |  | $ | 7,015 |  |  | $ | 113,129 |
Provision for credit losses |  | (1,520) |  |  | 22,383 |  |  | 4,194 |  |  | 4,053 |  |  | 1,908 |  |  | (1,276) |  |  | 12,364 |  |  | 3,728 |  |  | 45,834 |
Recoveries of loans previously charged-off |  | 757 |  |  | 51 |  |  | 116 |  |  | 22 |  |  | — |  |  | 51 |  |  | — |  |  | 175 |  |  | 1,172 |
Loans charged off |  | (249) |  |  | — |  |  | (8) |  |  | — |  |  | — |  |  | (95) |  |  | (166) |  |  | (475) |  |  | (993) |
Initial allowance on loans purchased with deteriorated credit quality |  | 743 |  |  | 5,596 |  |  | 1,533 |  |  | 569 |  |  | 784 |  |  | 605 |  |  | 14,998 |  |  | 3 |  |  | 24,831 |
Ending balance - September 30, 2020 |  | $ | 8,609 |  |  | $ | 63,629 |  |  | $ | 18,298 |  |  | $ | 11,455 |  |  | $ | 7,191 |  |  | $ | 6,705 |  |  | $ | 57,640 |  |  | $ | 10,446 |  |  | $ | 183,973 |
Nine Months Ended September 30, 2020
Beginning balance - December 31, 2019 |  | $ | 4,805 |  |  | $ | 10,194 |  |  | $ | 3,112 |  |  | $ | 752 |  |  | $ | 544 |  |  | $ | 4,109 |  |  | $ | 4,621 |  |  | $ | 3,002 |  |  | $ | 31,139 |
Impact of adopting ASC 326 on non-purchased credit deteriorated loans |  | 5,300 |  |  | 1,533 |  |  | 7,920 |  |  | 3,461 |  |  | 340 |  |  | 1,879 |  |  | 6,822 |  |  | 3,633 |  |  | 30,888 |
Impact of adopting ASC 326 on purchased credit deteriorated loans |  | 82 |  |  | 150 |  |  | 421 |  |  | (3) |  |  | — |  |  | 162 |  |  | 184 |  |  | (438) |  |  | 558 |
Provision for credit losses |  | (2,354) |  |  | 45,962 |  |  | 5,412 |  |  | 6,633 |  |  | 5,523 |  |  | 132 |  |  | 31,282 |  |  | 5,247 |  |  | 97,837 |
Recoveries of loans previously charged-off |  | 1,652 |  |  | 202 |  |  | 166 |  |  | 61 |  |  | — |  |  | 68 |  |  | — |  |  | 471 |  |  | 2,620 |
Loans charged off |  | (1,630) |  |  | (18) |  |  | (373) |  |  | (21) |  |  | — |  |  | (304) |  |  | (711) |  |  | (1,512) |  |  | (4,569) |
Initial allowance on loans purchased with deteriorated credit quality |  | 754 |  |  | 5,606 |  |  | 1,640 |  |  | 572 |  |  | 784 |  |  | 659 |  |  | 15,442 |  |  | 43 |  |  | 25,500 |
Ending balance - September 30, 2020 |  | $ | 8,609 |  |  | $ | 63,629 |  |  | $ | 18,298 |  |  | $ | 11,455 |  |  | $ | 7,191 |  |  | $ | 6,705 |  |  | $ | 57,640 |  |  | $ | 10,446 |  |  | $ | 183,973 |
|  | Commercial and industrial |  | Construction |  | 1-to-4 family residential mortgage |  | Residential line of credit |  | Multi-family residential mortgage |  | Commercial real estate owner occupied |  | Commercial real estate non-owner occupied |  | Consumer and other |  | Total
Three Months Ended September 30, 2019
Beginning balance - June 30, 2019 |  | $ | 4,923 |  |  | $ | 9,655 |  |  | $ | 3,288 |  |  | $ | 755 |  |  | $ | 617 |  |  | $ | 3,512 |  |  | $ | 4,478 |  |  | $ | 2,910 |  |  | $ | 30,138 |
Provision for loan losses |  | 234 |  |  | 186 |  |  | 18 |  |  | 67 |  |  | (43) |  |  | 194 |  |  | 461 |  |  | 714 |  |  | 1,831 |
Recoveries of loans previously charged-off |  | 16 |  |  | 1 |  |  | 25 |  |  | 75 |  |  | — |  |  | 3 |  |  | — |  |  | 92 |  |  | 212 |
Loans charged off |  | (3) |  |  | — |  |  | — |  |  | (170) |  |  | — |  |  | — |  |  | (12) |  |  | (532) |  |  | (717) |
Ending balance - September 30, 2019 |  | $ | 5,170 |  |  | $ | 9,842 |  |  | $ | 3,331 |  |  | $ | 727 |  |  | $ | 574 |  |  | $ | 3,709 |  |  | $ | 4,927 |  |  | $ | 3,184 |  |  | $ | 31,464 |
Nine Months Ended September 30, 2019 |
Beginning balance - December 31, 2018 |  | $ | 5,348 |  |  | $ | 9,729 |  |  | $ | 3,428 |  |  | $ | 811 |  |  | $ | 566 |  |  | $ | 3,132 |  |  | $ | 4,149 |  |  | $ | 1,769 |  |  | $ | 28,932 |
Provision for loan losses |  | 17 |  |  | 105 |  |  | (77) |  |  | 100 |  |  | 8 |  |  | 482 |  |  | 790 |  |  | 2,678 |  |  | 4,103 |
Recoveries of loans previously charged-off |  | 66 |  |  | 8 |  |  | 62 |  |  | 121 |  |  | — |  |  | 95 |  |  | — |  |  | 435 |  |  | 787 |
Loans charged off |  | (261) |  |  | — |  |  | (82) |  |  | (305) |  |  | — |  |  | — |  |  | (12) |  |  | (1,698) |  |  | (2,358) |
Ending balance - September 30, 2019 |  | $ | 5,170 |  |  | $ | 9,842 |  |  | $ | 3,331 |  |  | $ | 727 |  |  | $ | 574 |  |  | $ | 3,709 |  |  | $ | 4,927 |  |  | $ | 3,184 |  |  | $ | 31,464 |
The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. The following table provides the amount of the allowance for credit losses by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019:
|  | December 31, 2019
|  | Commercial and industrial |  | Construction |  | 1-to-4 family residential mortgage |  | Residential line of credit |  | Multi-family residential mortgage |  | Commercial real estate owner occupied |  | Commercial real estate non-owner occupied |  | Consumer and other |  | Total
Amount of allowance allocated to: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 241 |  |  | $ | — |  |  | $ | 8 |  |  | $ | 9 |  |  | $ | — |  |  | $ | 238 |  |  | $ | 399 |  |  | $ | — |  |  | $ | 895 |
Collectively evaluated for impairment |  | 4,457 |  |  | 10,192 |  |  | 2,940 |  |  | 743 |  |  | 544 |  |  | 3,853 |  |  | 3,909 |  |  | 1,933 |  |  | 28,571 |
Acquired with deteriorated credit quality |  | 107 |  |  | 2 |  |  | 164 |  |  | — |  |  | — |  |  | 18 |  |  | 313 |  |  | 1,069 |  |  | 1,673 |
Ending balance - December 31, 2019 |  | $ | 4,805 |  |  | $ | 10,194 |  |  | $ | 3,112 |  |  | $ | 752 |  |  | $ | 544 |  |  | $ | 4,109 |  |  | $ | 4,621 |  |  | $ | 3,002 |  |  | $ | 31,139 |
The following table provides the amount of loans by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019:
|  | December 31, 2019
|  | Commercial and industrial |  | Construction |  | 1-to-4 family residential mortgage |  | Residential line of credit |  | Multi-family residential mortgage |  | Commercial real estate owner occupied |  | Commercial real estate non-owner occupied |  | Consumer and other |  | Total
Loans, net of unearned income |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 9,026 |  |  | $ | 2,061 |  |  | $ | 1,347 |  |  | $ | 579 |  |  | $ | — |  |  | $ | 2,993 |  |  | $ | 7,755 |  |  | $ | 49 |  |  | $ | 23,810 |
Collectively evaluated for impairment |  | 1,023,326 |  |  | 546,156 |  |  | 689,769 |  |  | 220,878 |  |  | 69,429 |  |  | 621,386 |  |  | 902,792 |  |  | 254,944 |  |  | 4,328,680 |
Acquired with deteriorated credit quality |  | 1,684 |  |  | 2,884 |  |  | 19,338 |  |  | 73 |  |  | — |  |  | 5,891 |  |  | 10,197 |  |  | 17,085 |  |  | 57,152 |
Ending balance - December 31, 2019 |  | $ | 1,034,036 |  |  | $ | 551,101 |  |  | $ | 710,454 |  |  | $ | 221,530 |  |  | $ | 69,429 |  |  | $ | 630,270 |  |  | $ | 920,744 |  |  | $ | 272,078 |  |  | $ | 4,409,642 |
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, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually. The Company uses the following definitions for risk ratings: Pass. Loans rated Pass include those that are adequately performing and collateralized and which management believes do not have conditions that have occurred or may occur which would result in the loan being downgraded into an inferior category. Watch. Loans rated as Watch include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category. Also included in watch are loans rated as special mention, which 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 rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so rated 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, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes. The following table presents the credit quality of our loan portfolio by year of origination as of September 30, 2020. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the table below.
September 30, 2020 |  |
|  | Term Loans |  |  |  |  |  |
|  | Amortized Cost Basis by Origination Year |  |  |  |  |  |
|  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Total |  |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 399,906 |  |  | $ | 186,100 |  |  | $ | 69,916 |  |  | $ | 53,213 |  |  | $ | 33,976 |  |  | $ | 45,860 |  |  | $ | 511,111 |  |  | $ | 1,300,082 |  |  |
Watch |  | 3,236 |  |  | 3,034 |  |  | 6,283 |  |  | 3,652 |  |  | 11,293 |  |  | 6,245 |  |  | 36,083 |  |  | 69,826 |  |  |
Substandard |  | 6 |  |  | 3,160 |  |  | 17,022 |  |  | 6,552 |  |  | 686 |  |  | 6,869 |  |  | 13,269 |  |  | 47,564 |  |  |
Doubtful |  | 35 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 164 |  |  | 199 |  |  |
Total |  | 403,183 |  |  | 192,294 |  |  | 93,221 |  |  | 63,417 |  |  | 45,955 |  |  | 58,974 |  |  | 560,627 |  |  | 1,417,671 |  |  |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 311,117 |  |  | 448,019 |  |  | 110,473 |  |  | 49,845 |  |  | 41,750 |  |  | 75,570 |  |  | 115,894 |  |  | 1,152,668 |  |  |
Watch |  | 1,282 |  |  | 1,231 |  |  | 9,435 |  |  | 13,822 |  |  | 1,305 |  |  | 3,585 |  |  | — |  |  | 30,660 |  |  |
Substandard |  | — |  |  | 972 |  |  | 642 |  |  | 132 |  |  | 880 |  |  | 4,919 |  |  | — |  |  | 7,545 |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | — |  |  | 5 |  |  |
Total |  | 312,399 |  |  | 450,222 |  |  | 120,550 |  |  | 63,799 |  |  | 43,935 |  |  | 84,079 |  |  | 115,894 |  |  | 1,190,878 |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 232,248 |  |  | 203,167 |  |  | 188,471 |  |  | 170,725 |  |  | 119,327 |  |  | 168,732 |  |  | — |  |  | 1,082,670 |  |  |
Watch |  | 1,257 |  |  | 786 |  |  | 3,318 |  |  | 12,580 |  |  | 4,155 |  |  | 14,506 |  |  | — |  |  | 36,602 |  |  |
Substandard |  | 532 |  |  | 1,452 |  |  | 3,274 |  |  | 4,128 |  |  | 2,039 |  |  | 9,120 |  |  | — |  |  | 20,545 |  |  |
Doubtful |  | — |  |  | 34 |  |  | — |  |  | — |  |  | 270 |  |  | 490 |  |  | — |  |  | 794 |  |  |
Total |  | 234,037 |  |  | 205,439 |  |  | 195,063 |  |  | 187,433 |  |  | 125,791 |  |  | 192,848 |  |  | — |  |  | 1,140,611 |  |  |
Residential line of credit |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 254 |  |  | — |  |  | 87 |  |  | — |  |  | 208 |  |  | 3,577 |  |  | 405,767 |  |  | 409,893 |  |  |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5,205 |  |  | 5,205 |  |  |
Substandard |  | 109 |  |  | 1 |  |  | — |  |  | 3 |  |  | — |  |  | — |  |  | 4,848 |  |  | 4,961 |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 259 |  |  | 259 |  |  |
Total |  | 363 |  |  | 1 |  |  | 87 |  |  | 3 |  |  | 208 |  |  | 3,577 |  |  | 416,079 |  |  | 420,318 |  |  |
Multi-family mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 23,747 |  |  | 15,055 |  |  | 12,629 |  |  | 54,660 |  |  | 11,718 |  |  | 36,812 |  |  | 11,259 |  |  | 165,880 |  |  |
Watch |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 57.00 |  |  | — |  |  | 57 |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Total |  | 23,747 |  |  | 15,055 |  |  | 12,629 |  |  | 54,660 |  |  | 11,718 |  |  | 36,869 |  |  | 11,259 |  |  | 165,937 |  |  |
|  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | 2016 |  | Prior |  | Revolving Loans Amortized Cost Basis |  | Total |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 99,827 |  |  | 181,214 |  |  | 106,212 |  |  | 97,689 |  |  | 81,383 |  |  | 221,365 |  |  | 49,382 |  |  | 837,072 |  |  |
Watch |  | 3,596 |  |  | 4,343 |  |  | 6,843 |  |  | 22,939 |  |  | 7,858 |  |  | 19,233 |  |  | 3,188 |  |  | 68,000 |  |  |
Substandard |  | 428 |  |  | 1,302 |  |  | 3,815 |  |  | 1,457 |  |  | 2,931 |  |  | 8,440 |  |  | 1,542 |  |  | 19,915 |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Total |  | 103,851 |  |  | 186,859 |  |  | 116,870 |  |  | 122,085 |  |  | 92,172 |  |  | 249,038 |  |  | 54,112 |  |  | 924,987 |  |  |
Non-owner occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 108,229 |  |  | 248,852 |  |  | 360,309 |  |  | 218,431 |  |  | 291,626 |  |  | 250,806 |  |  | 43,005 |  |  | 1,521,258 |  |  |
Watch |  | — |  |  | 6,181 |  |  | 5,897 |  |  | 26,361 |  |  | 21,775 |  |  | 43,984 |  |  | 45 |  |  | 104,243 |  |  |
Substandard |  | — |  |  | 149 |  |  | 12,130 |  |  | 1,166 |  |  | 1,693 |  |  | 3,761 |  |  | — |  |  | 18,899 |  |  |
Doubtful |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  |
Total |  | 108,229 |  |  | 255,182 |  |  | 378,336 |  |  | 245,958 |  |  | 315,094 |  |  | 298,551 |  |  | 43,050 |  |  | 1,644,400 |  |  |
Consumer and other loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 65,261 |  |  | 57,677 |  |  | 42,388 |  |  | 28,207 |  |  | 42,014 |  |  | 32,720 |  |  | 18,440 |  |  | 286,707 |  |  |
Watch |  | 159 |  |  | 707 |  |  | 1,714 |  |  | 1,418 |  |  | 3,044 |  |  | 8,352 |  |  | 392 |  |  | 15,786 |  |  |
Substandard |  | 121 |  |  | 68 |  |  | 264 |  |  | 618 |  |  | 463 |  |  | 2,653 |  |  | 407 |  |  | 4,594 |  |  |
Doubtful |  | — |  |  | 260 |  |  | 295 |  |  | 544 |  |  | 196 |  |  | 354 |  |  | — |  |  | 1,649 |  |  |
Total |  | 65,541 |  |  | 58,712 |  |  | 44,661 |  |  | 30,787 |  |  | 45,717 |  |  | 44,079 |  |  | 19,239 |  |  | 308,736 |  |  |
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 1,240,589 |  |  | 1,340,084 |  |  | 890,485 |  |  | 672,770 |  |  | 622,002 |  |  | 835,442 |  |  | 1,154,858 |  |  | 6,756,230 |  |  |
Watch |  | 9,530 |  |  | 16,282 |  |  | 33,490 |  |  | 80,772 |  |  | 49,430 |  |  | 95,905 |  |  | 44,913 |  |  | 330,322 |  |  |
Substandard |  | 1,196 |  |  | 7,104 |  |  | 37,147 |  |  | 14,056 |  |  | 8,692 |  |  | 35,819 |  |  | 20,066 |  |  | 124,080 |  |  |
Doubtful |  | 35 |  |  | 294 |  |  | 295 |  |  | 544 |  |  | 466 |  |  | 849 |  |  | 423 |  |  | 2,906 |  |  |
Total |  | $ | 1,251,350 |  |  | $ | 1,363,764 |  |  | $ | 961,417 |  |  | $ | 768,142 |  |  | $ | 680,590 |  |  | $ | 968,015 |  |  | $ | 1,220,260 |  |  | $ | 7,213,538 |  |  |
The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. The following table shows credit quality indicators by class of financing receivable at December 31, 2019.
December 31, 2019 |  | Pass |  | Watch |  | Substandard |  | Total
Loans, excluding purchased credit impaired loans |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 946,247 |  |  | $ | 66,910 |  |  | $ | 19,195 |  |  | $ | 1,032,352 |
Construction |  | 541,201 |  |  | 4,790 |  |  | 2,226 |  |  | 548,217 |
Residential real estate: |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 666,177 |  |  | 11,380 |  |  | 13,559 |  |  | 691,116 |
Residential line of credit |  | 218,086 |  |  | 1,343 |  |  | 2,028 |  |  | 221,457 |
Multi-family mortgage |  | 69,366 |  |  | 63 |  |  | — |  |  | 69,429 |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  | 576,737 |  |  | 30,379 |  |  | 17,263 |  |  | 624,379 |
Non-owner occupied |  | 876,670 |  |  | 24,342 |  |  | 9,535 |  |  | 910,547 |
Consumer and other |  | 248,632 |  |  | 3,304 |  |  | 3,057 |  |  | 254,993 |
Total loans, excluding purchased credit impaired loans |  | $ | 4,143,116 |  |  | $ | 142,511 |  |  | $ | 66,863 |  |  | $ | 4,352,490 |
Purchased credit impaired loans |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | — |  |  | $ | 1,224 |  |  | $ | 460 |  |  | $ | 1,684 |
Construction |  | — |  |  | 2,681 |  |  | 203 |  |  | 2,884 |
Residential real estate: |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | — |  |  | 15,091 |  |  | 4,247 |  |  | 19,338 |
Residential line of credit |  | — |  |  | — |  |  | 73 |  |  | 73 |
Multi-family mortgage |  | — |  |  | — |  |  | — |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  | — |  |  | 4,535 |  |  | 1,356 |  |  | 5,891 |
Non-owner occupied |  | — |  |  | 6,617 |  |  | 3,580 |  |  | 10,197 |
Consumer and other |  | — |  |  | 13,521 |  |  | 3,564 |  |  | 17,085 |
Total purchased credit impaired loans |  | — |  |  | 43,669 |  |  | 13,483 |  |  | 57,152 |
Total loans |  | $ | 4,143,116 |  |  | $ | 186,180 |  |  | $ | 80,346 |  |  | $ | 4,409,642 |
Nonaccrual and Past Due Loans Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest. The following tables provide information on nonaccrual and past due loans as of September 30, 2020 and December 31, 2019. For December 31, 2019, purchased credit impaired ("PCI") loans are not included in the nonperforming disclosures as these loans are considered to be performing, even though they may be contractually past due. This is because any non-payment of contractual principal or interest was considered in the periodic re-estimation of expected cash flows and was included in the 2019 loan loss provision or future period yield adjustments. Under PCD accounting, management considers changes in the credit quality of the borrower as part of its regular estimation of expected credit losses and does not make the same future yield adjustments as under the PCI accounting. Consequently, PCD loans that are contractually past due or on nonaccrual status, including those formerly accounted for as PCI loans, are included in the September 30, 2020 nonperforming disclosures. The following table represents an analysis of the aging by class of financing receivable as of September 30, 2020:
September 30, 2020 |  | 30-89 days past due |  | 90 days or more and accruing interest |  | Non-accrual loans |  |  |  | Loans current on payments and accruing interest |  | Total
Commercial and industrial |  | $ | 1,581 |  |  | $ | 11 |  |  | $ | 6,579 |  |  |  |  | $ | 1,409,500 |  |  | $ | 1,417,671 |
Construction |  | 4,346 |  |  | 196 |  |  | 2,018 |  |  |  |  | 1,184,318 |  |  | 1,190,878 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 4,143 |  |  | 7,452 |  |  | 6,752 |  |  |  |  | 1,122,264 |  |  | 1,140,611 |
Residential line of credit |  | 287 |  |  | 216 |  |  | 1,925 |  |  |  |  | 417,890 |  |  | 420,318 |
Multi-family mortgage |  | — |  |  | 57 |  |  | — |  |  |  |  | 165,880 |  |  | 165,937 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 1,096 |  |  | — |  |  | 2,194 |  |  |  |  | 921,697 |  |  | 924,987 |
Non-owner occupied |  | 114 |  |  | — |  |  | 12,358 |  |  |  |  | 1,631,928 |  |  | 1,644,400 |
Consumer and other |  | 3,584 |  |  | 1,132 |  |  | 2,759 |  |  |  |  | 301,261 |  |  | 308,736 |
Total |  | $ | 15,151 |  |  | $ | 9,064 |  |  | $ | 34,585 |  |  |  |  | $ | 7,154,738 |  |  | $ | 7,213,538 |
The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance and interest income, by class of financing receivable as of and for the three and nine months ended September 30, 2020:
|  |  |  |  |  |  | September 30, 2020 |  |  |  |
| u |  |  |  |  |  |  | End of period amortized cost |  |  |  |  |  |
|  | Beginning of period non-accrual amortized cost |  |  |  |  |  | Non-accrual with no related allowance |  | Non-accrual with related allowance |  | Related allowance |  |  |  |
Commercial and industrial |  | $ | 5,586 |  |  |  |  |  |  | $ | 913 |  |  | $ | 5,666 |  |  | $ | 936 |  |  |  |  |
Construction |  | 1,254 |  |  |  |  |  |  | 980 |  |  | 1,038 |  |  | 145 |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 4,585 |  |  |  |  |  |  | 4,247 |  |  | 2,505 |  |  | 62 |  |  |  |  |
Residential line of credit |  | 489 |  |  |  |  |  |  | — |  |  | 1,925 |  |  | 74 |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 2,285 |  |  |  |  |  |  | 1,469 |  |  | 725 |  |  | 66 |  |  |  |  |
Non-owner occupied |  | 9,460 |  |  |  |  |  |  | 5,475 |  |  | 6,883 |  |  | 1,568 |  |  |  |  |
Consumer and other |  | 1,623 |  |  |  |  |  |  | 88 |  |  | 2,671 |  |  | 165 |  |  |  |  |
Total |  | $ | 25,282 |  |  |  |  |  |  | $ | 13,172 |  |  | $ | 21,413 |  |  | $ | 3,016 |  |  |  |  |
|  |  |  | Interest Income
September 30, 2020 |  | Three Months Ended |  | Nine Months Ended
Commercial and industrial |  | $ | 287 |  |  | $ | 304 |
Construction |  | 42 |  |  | 48 |
Residential real estate: |  |  |  |
1-to-4 family mortgage |  | 15 |  |  | 21 |
Residential line of credit |  | 72 |  |  | 72 |
Commercial real estate: |  |  |  |
Owner occupied |  | 32 |  |  | 75 |
Non-owner occupied |  | 76 |  |  | 185 |
Consumer and other |  | — |  |  | 24 |
Total |  | $ | 524 |  |  | $ | 729 |
The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. The following table provides the period-end amounts of loans that are past due, loans not accruing interest and loans current on payments accruing interest by category at December 31, 2019:
December 31, 2019 |  | 30-89 days past due |  | 90 days or more and accruing interest |  | Non-accrual loans |  | Purchased Credit Impaired loans |  | Loans current on payments and accruing interest |  | Total
Commercial and industrial |  | $ | 1,918 |  |  | $ | 291 |  |  | $ | 5,587 |  |  | $ | 1,684 |  |  | $ | 1,024,556 |  |  | $ | 1,034,036 |
Construction |  | 1,021 |  |  | 42 |  |  | 1,087 |  |  | 2,884 |  |  | 546,067 |  |  | 551,101 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 10,738 |  |  | 3,965 |  |  | 3,332 |  |  | 19,338 |  |  | 673,081 |  |  | 710,454 |
Residential line of credit |  | 658 |  |  | 412 |  |  | 416 |  |  | 73 |  |  | 219,971 |  |  | 221,530 |
Multi-family mortgage |  | 63 |  |  | — |  |  | — |  |  | — |  |  | 69,366 |  |  | 69,429 |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 1,375 |  |  | — |  |  | 1,793 |  |  | 5,891 |  |  | 621,211 |  |  | 630,270 |
Non-owner occupied |  | 327 |  |  | — |  |  | 7,880 |  |  | 10,197 |  |  | 902,340 |  |  | 920,744 |
Consumer and other |  | 2,377 |  |  | 833 |  |  | 967 |  |  | 17,085 |  |  | 250,816 |  |  | 272,078 |
Total |  | $ | 18,477 |  |  | $ | 5,543 |  |  | $ | 21,062 |  |  | $ | 57,152 |  |  | $ | 4,307,408 |  |  | $ | 4,409,642 |
Impaired Loans The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. Impaired loans recognized in conformity with ASC 310 at December 31, 2019 segregated by class, were as follows:
December 31, 2019 |  | Recorded investment |  | Unpaid principal |  | Related allowance
With a related allowance recorded: |  |  |  |  |  |
Commercial and industrial |  | $ | 6,080 |  |  | $ | 8,350 |  |  | $ | 241 |
Residential real estate: |  |  |  |  |  |
1-to-4 family mortgage |  | 264 |  |  | 324 |  |  | 8 |
Residential line of credit |  | 320 |  |  | 320 |  |  | 9 |
Commercial real estate: |  |  |  |  |  |
Owner occupied |  | 756 |  |  | 1,140 |  |  | 238 |
Non-owner occupied |  | 6,706 |  |  | 6,747 |  |  | 399 |
Consumer and other |  | — |  |  | — |  |  | — |
Total |  | $ | 14,126 |  |  | $ | 16,881 |  |  | $ | 895 |
With no related allowance recorded: |  |  |  |  |  |
Commercial and industrial |  | $ | 2,946 |  |  | $ | 3,074 |  |  | $ | — |
Construction |  | 2,061 |  |  | 2,499 |  |  | — |
Residential real estate: |  |  |  |  |  |
1-to-4 family mortgage |  | 1,083 |  |  | 1,449 |  |  | — |
Residential line of credit |  | 259 |  |  | 280 |  |  | — |
Commercial real estate: |  |  |  |  |  |
Owner occupied |  | 2,237 |  |  | 2,627 |  |  | — |
Non-owner occupied |  | 1,049 |  |  | 1,781 |  |  | — |
Consumer and other |  | 49 |  |  | 49 |  |  | — |
Total |  | $ | 9,684 |  |  | $ | 11,759 |  |  | $ | — |
Total impaired loans |  | $ | 23,810 |  |  | $ | 28,640 |  |  | $ | 895 |
Average recorded investment and interest income on a cash basis recognized during the three and nine months ended September 30, 2019 on impaired loans, segregated by class, were as follows:
Three Months Ended |  | Nine Months Ended |  |  |  |  |  |  |  |  |
September 30, 2019 |  | Average recorded investment |  | Interest income recognized (cash basis) |  | Average recorded investment |  | Interest income recognized (cash basis) |  |  |  |  |  |  |  |  |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 3,109 |  |  | $ | 51 |  |  | $ | 1,850 |  |  | $ | 156 |  |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 265 |  |  | 2 |  |  | 205 |  |  | 13 |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 184 |  |  | 4 |  |  | 371 |  |  | 10 |  |  |  |  |  |  |  |  |  |
Non-owner occupied |  | 6,143 |  |  | 56 |  |  | 6,241 |  |  | 90 |  |  |  |  |  |  |  |  |  |
Consumer and other |  | 447 |  |  | — |  |  | 198 |  |  | 19 |  |  |  |  |  |  |  |  |  |
Total |  | $ | 10,148 |  |  | $ | 113 |  |  | $ | 8,865 |  |  | $ | 288 |  |  |  |  |  |  |  |  |  |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 766 |  |  | $ | 11 |  |  | $ | 991 |  |  | $ | 36 |  |  |  |  |  |  |  |  |  |
Construction |  | 1,639 |  |  | 90 |  |  | 1,641 |  |  | 142 |  |  |  |  |  |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 835 |  |  | 24 |  |  | 962 |  |  | 50 |  |  |  |  |  |  |  |  |  |
Residential line of credit |  | 427 |  |  | — |  |  | 245 |  |  | 2 |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  | 2,045 |  |  | 41 |  |  | 2,171 |  |  | 103 |  |  |  |  |  |  |  |  |  |
Non-owner occupied |  | 1,050 |  |  | — |  |  | 1,050 |  |  | — |  |  |  |  |  |  |  |  |  |
Consumer and other |  | 66 |  |  | 2 |  |  | 69 |  |  | 5 |  |  |  |  |  |  |  |  |  |
Total |  | $ | 6,828 |  |  | $ | 168 |  |  | $ | 7,129 |  |  | $ | 338 |  |  |  |  |  |  |  |  |  |
Total impaired loans |  | $ | 16,976 |  |  | $ | 281 |  |  | $ | 15,994 |  |  | $ | 626 |  |  |  |  |  |  |  |  |  |
Purchased Credit Impaired Loans The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. As of December 31, 2019, the carrying value of PCI loans accounted for under ASC 310-30 "Loans and Debt Securities Acquired with Deteriorated Credit Quality" was $57,152. The following table presents changes in the value of the accretable yield for PCI loans for the periods indicated.
|  |  |  | Three Months Ended September 30, |  | Nine Months Ended September 30, |  |
|  |  |  | 2019 |  |  | 2019 |  |  |  |  |
Balance at the beginning of period |  |  |  | $ | (14,862) |  |  | $ | (16,587) |  |  |  |  |
Additions through business combinations |  |  |  | — |  |  | (1,167) |  |  |  |  |
Principal reductions and other reclassifications from nonaccretable difference |  |  |  | (150) |  |  | 100 |  |  |  |  |
Accretion |  |  |  | 1,583 |  |  | 5,471 |  |  |  |  |
Changes in expected cash flows |  |  |  | 110 |  |  | (1,136) |  |  |  |  |
Balance at end of period |  |  |  | $ | (13,319) |  |  | $ | (13,319) |  |  |  |  |
Included in the ending balance of the accretable yield on PCI loans at December 31, 2019, was a purchase accounting liquidity discount of $292. There was also a purchase accounting nonaccretable credit discount of $3,537 related to the PCI loan portfolio at December 31, 2019, and an accretable credit and liquidity discount on non-PCI loans of $8,964 and $3,924, respectively, as of December 31, 2019. Interest revenue, through accretion of the difference between the recorded investment of the loans and the expected cash flows, was recognized on all PCI loans. Accretion of interest income amounting to $1,583 and $5,471 was recognized on PCI loans during the three and nine months ended September 30, 2019, respectively. This included both the contractual interest income recognized and the purchase accounting contribution through accretion of the liquidity discount for changes in estimated cash flows. The total purchase accounting contribution through accretion excluding contractual interest collected for all purchased loans was $2,102 and $6,030 for the three and nine months ended September 30, 2019, respectively. Restructured Loans As of September 30, 2020 and December 31, 2019, the Company has a recorded investment in TDRs of $16,681 and $12,206, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate to borrowers experiencing financial difficulty. The Company has calculated $854 and $360 of specific reserves for those loans at September 30, 2020 and December 31, 2019, respectively. There were no commitments to lend any additional amounts to these customers for either period end. Of these loans, $12,243 and $5,201 were classified as non-accrual loans as of September 30, 2020 and December 31, 2019, respectively. The following tables present the financial effect of TDRs recorded during the periods indicated.
Three Months Ended September 30, 2020 |  | Number of loans |  | Pre-modification outstanding recorded investment |  | Post-modification outstanding recorded investment |  | Charge offs and specific reserves |
Commercial and industrial |  | 2 |  | $ | 420 |  |  | $ | 420 |  |  | $ | — |  |
Total |  | 2 |  | $ | 420 |  |  | $ | 420 |  |  | $ | — |  |
Three Months Ended September 30, 2019 |  | Number of loans |  | Pre-modification outstanding recorded investment |  | Post-modification outstanding recorded investment |  | Charge offs and specific reserves
Commercial and industrial |  | 1 |  |  | $ | 16 |  |  | $ | 16 |  |  | $ | — |
Construction |  | 1 |  |  | 1,070 |  |  | 1,070 |  |  |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  | 1 |  |  | 927 |  |  | 927 |  |  | — |
Non-owner occupied |  | 1 |  |  | 1,366 |  |  | 1,366 |  |  | 106 |
Residential real estate: |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 1 |  |  | 128 |  |  | 128 |  |  | — |
Total |  | 5 |  |  | $ | 3,507 |  |  | $ | 3,507 |  |  | $ | 106 |
Nine Months Ended September 30, 2020 |  | Number of loans |  | Pre-modification outstanding recorded investment |  | Post-modification outstanding recorded investment |  | Charge offs and specific reserves
Commercial and industrial |  | 3 |  |  | $ | 1,573 |  |  | $ | 1,573 |  |  | $ | — |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  | 1 |  |  | 788 |  |  | 788 |  |  | — |
Non-owner occupied |  | 2 |  |  | 3,752 |  |  | 3,752 |  |  | $ | — |
Residential real estate: |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 2 |  |  | 77 |  |  | 77 |  |  | — |
Total |  | 8 |  |  | $ | 6,190 |  |  | $ | 6,190 |  |  | $ | — |
Nine Months Ended September 30, 2019 |  | Number of loans |  | Pre-modification outstanding recorded investment |  | Post-modification outstanding recorded investment |  | Charge offs and specific reserves
Commercial and industrial |  | 3 |  | $ | 3,204 |  |  | $ | 3,204 |  |  | $ | — |
Construction |  | 1 |  | 1,070 |  |  | 1,070 |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |
Owner occupied |  | 1 |  | 927 |  |  | 927 |  |  | — |
Non-owner occupied |  | 1 |  | 1,366 |  |  | 1,366 |  |  | 106 |
Residential real estate: |  |  |  |  |  |  |  |
1-4 family mortgage |  | 1 |  | 128 |  |  | 128 |  |  | — |
Total |  | 7 |  | $ | 6,695 |  |  | $ | 6,695 |  |  | $ | 106 |
There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three or nine months ended September 30, 2020 and 2019. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. 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 the modification. This evaluation is performed under the Company’s internal underwriting policy. The terms of certain other loans were modified during the three and nine months ended September 30, 2020 and 2019 that did not meet the definition of a TDR. The modification of these loans usually involve either a modification of the terms of a loan to borrowers who are not experiencing financial difficulties or an insignificant delay in payments. Collateral Dependent Loans For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following table presents the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable.
|  | September 30, 2020
|  | Type of Collateral |  |
|  | Real Estate |  |  | Financial Assets and Equipment |  |  |  | Individually assessed allowance for credit loss
Commercial and industrial |  | $ | — |  |  |  | $ | 4,697 |  |  |  |  | $ | 668 |
Construction |  | 1,817 |  |  |  | — |  |  |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  | 190 |  |  |  | — |  |  |  |  | — |
Residential line of credit |  | 1,195 |  |  |  | — |  |  |  |  | 9 |
Multi-family mortgage |  | — |  |  |  | — |  |  |  |  | — |
Commercial real estate: |  |  |  |  |  |  |  |  |
Owner occupied |  | 928 |  |  |  | — |  |  |  |  | 34 |
Non-owner occupied |  | 8,181 |  |  |  | — |  |  |  |  | 1,544 |
Consumer and other |  | 333 |  |  |  | — |  |  |  |  | 36 |
Total |  | $ | 12,644 |  |  |  | $ | 4,697 |  |  |  |  | $ | 2,291 |
Deferrals Program as part of COVID-19 Relief On March 22, 2020, an Interagency Statement was issued by banking regulators encouraging financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the CARES Act further provides that a qualified loan modification is exempt by law from classification as a TDR as defined by GAAP, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 outbreak terminates. The following table outlines the Company's recorded investment and percentage of loans held for investment by class of financing receivable for Company executed deferrals that remain on deferral at September 30, 2020, in connection with Company COVID-19 relief programs. These deferrals typically ranged from sixty to ninety days per deferral and were not considered TDRs under the interagency regulatory guidance or the CARES Act issued in March 2020. As of September 30, 2020, the Company had a total of $1,181,232 loans previously deferred that returned to normal payment status.
|  |  |  | September 30, 2020 |  |  |  |  |
|  |  |  |  |  | % of Loans |  |  |  |  |
Commercial and industrial |  |  |  |  |  | $ | 25,641 |  |  | 1.8 | % |  |  |  |  |
Construction |  |  |  |  |  | 35,920 |  |  | 3.0 | % |  |  |  |  |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |
1-to-4 family mortgage |  |  |  |  |  | 43,281 |  |  | 3.8 | % |  |  |  |  |
Residential line of credit |  |  |  |  |  | 9,226 |  |  | 2.2 | % |  |  |  |  |
Multi-family mortgage |  |  |  |  |  | 19,005 |  |  | 11.5 | % |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  |  |  |  | 60,614 |  |  | 6.6 | % |  |  |  |  |
Non-owner occupied |  |  |  |  |  | 270,552 |  |  | 16.5 | % |  |  |  |  |
Consumer and other |  |  |  |  |  | 593 |  |  | 0.2 | % |  |  |  |  |
Total |  |  |  |  |  | $ | 464,832 |  |  | 6.4 | % |  |  |  |  |

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