XML 26 R14.htm IDEA: XBRL DOCUMENT v3.21.2
Loans, Allowance for Credit Losses, and Asset Quality Information
 9 Months Ended
Sep. 30, 2021
Receivables [Abstract]  
Loans, Allowance for Credit Losses, and Asset Quality Information Loans, Allowance for Credit Losses, and Asset Quality Information
The following is a summary of the major categories of total loans outstanding:
($ in thousands)September 30, 2021December 31, 2020
 AmountPercentageAmountPercentage
All  loans:
Commercial, financial, and agricultural$612,554 12 %$782,549 17 %
Real estate – construction, land development & other land loans588,103 12 %570,672 12 %
Real estate – mortgage – residential (1-4 family) first mortgages914,266 19 %972,378 21 %
Real estate – mortgage – home equity loans / lines of credit281,219 6 %306,256 6 %
Real estate – mortgage – commercial and other2,423,341 50 %2,049,203 43 %
Consumer loans53,747 1 %53,955 1 %
Subtotal4,873,230 100 %4,735,013 100 %
Unamortized net deferred loan fees(3,389)(3,698)
Total loans$4,869,841 $4,731,315 

Included in the line item "Commercial, financial, and agricultural" in the table above are PPP loans totaling $66.9 million and $240.5 million at September 30, 2021 and December 31, 2020, respectively. PPP loans are fully guaranteed by the SBA. Included in unamortized net deferred loan fees are approximately $4.3 million and $6.0 million at September 30, 2021 and December 31, 2020, respectively, in unamortized net deferred loan fees associated with PPP loans. These fees are being amortized under the effective interest method over the terms of the loans. Accelerated amortization is recorded in the periods in which principal amounts are forgiven in accordance with the terms of the program.

Also included in the table above are various non-PPP SBA loans, with additional information on these loans presented in the table below.
($ in thousands)September 30, 2021December 31, 2020
Guaranteed portions of non-PPP SBA loans included in table above$27,542 33,959 
Unguaranteed portions of non-PPP SBA loans included in table above123,518 135,703 
Total non-PPP SBA loans included in the table above$151,060 169,662 
Sold portions of non-PPP SBA loans with servicing retained - not included in tables above$424,662 395,398 
At September 30, 2021 and December 31, 2020, there was a remaining unaccreted discount on the retained portion of sold non-PPP SBA loans amounting to $6.6 million and $7.3 million, respectively.
As of September 30, 2021, unamortized discounts on acquired loans totaled $4.8 million.
At December 31, 2020, there were remaining accretable discounts of $7.9 million, related to purchased non-impaired loans. The discounts are amortized as yield adjustments over the respective lives of the loans, so long as the loans perform. At December 31, 2020, the carrying value of PCI loans was $8.6 million.
The following table presents changes in the accretable yield for PCI loans for the nine months ended September 30, 2020.
Accretable Yield for PCI loansFor the Nine Months Ended September 30, 2020
Balance at beginning of period$4,149 
Accretion(927)
Reclassification from (to) nonaccretable difference400 
Other, net(481)
Balance at end of period3,141 
During the first nine months of 2020, the Company received $446,000 in payments that exceeded the carrying amount of the related PCI loans, of which $352,000 was recognized as loan discount accretion income, $80,000 was recorded as additional loan interest income, and $14,000 was recorded as a recovery.
Nonperforming assets are defined as nonaccrual loans, TDRs, loans past due 90 or more days and still accruing interest, and foreclosed real estate. Nonperforming assets are summarized as follows.
($ in thousands)September 30,
2021		December 31,
2020
Nonperforming assets  
Nonaccrual loans$31,268 35,076 
TDRs - accruing7,600 9,497 
Accruing loans > 90 days past due— — 
Total nonperforming loans38,868 44,573 
Foreclosed real estate1,819 2,424 
Total nonperforming assets$40,687 46,997 
At both September 30, 2021 and December 31, 2020, the Company had $1.9 million in residential mortgage loans in process of foreclosure.

The following table is a summary of the Company’s nonaccrual loans by major categories for the periods indicated.
CECLIncurred Loss
($ in thousands)September 30,
2021		December 31,
2020
Nonaccrual Loans with No AllowanceNonaccrual Loans with an AllowanceTotal Nonaccrual LoansNonaccrual Loans
Commercial, financial, and agricultural$510 9,019 9,529 9,681 
Real estate – construction, land development & other land loans— 373 373 643 
Real estate – mortgage – residential (1-4 family) first mortgages735 3,599 4,334 6,048 
Real estate – mortgage – home equity loans / lines of credit— 1,018 1,018 1,333 
Real estate – mortgage – commercial and other10,951 4,972 15,923 17,191 
Consumer loans— 91 91 180 
Total$12,196 19,072 31,268 35,076 

Interest income recognized during the period on nonaccrual loans was immaterial.

The following table represents the accrued interest receivables written off by reversing interest income during the nine months ended September 30, 2021.
($ in thousands)For the Nine Months Ended September 30, 2021
Commercial, financial, and agricultural$160 
Real estate – construction, land development & other land loans— 
Real estate – mortgage – residential (1-4 family) first mortgages20 
Real estate – mortgage – home equity loans / lines of credit11 
Real estate – mortgage – commercial and other446 
Consumer loans— 
Total$637 

The following table presents an analysis of the payment status of the Company’s loans as of September 30, 2021.
($ in thousands)Accruing
30-59
Days Past
Due		Accruing
60-89
Days
Past
Due		Accruing
90 Days
or More
Past
Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial, financial, and agricultural$584 60 — 9,529 602,381 612,554 
Real estate – construction, land development & other land loans— — — 373 587,730 588,103 
Real estate – mortgage – residential (1-4 family) first mortgages668 738 — 4,334 908,526 914,266 
Real estate – mortgage – home equity loans / lines of credit606 67 — 1,018 279,528 281,219 
Real estate – mortgage – commercial and other346 334 — 15,923 2,406,738 2,423,341 
Consumer loans127 34 — 91 53,495 53,747 
Total$2,331 1,233 — 31,268 4,838,398 4,873,230 
Unamortized net deferred loan fees(3,389)
Total loans$4,869,841 
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2020.
($ in thousands)Accruing
30-59
Days
Past
Due		Accruing
60-89
Days
Past
Due		Accruing
90 Days
or More
Past
Due		Nonaccrual
Loans		Accruing
Current		Total Loans
Receivable
Commercial, financial, and agricultural$1,464 1,101 — 9,681 770,166 782,412 
Real estate – construction, land development & other land loans572 — — 643 569,307 570,522 
Real estate – mortgage – residential (1-4 family) first mortgages10,146 869 — 6,048 951,088 968,151 
Real estate – mortgage – home equity loans / lines of credit1,088 42 — 1,333 303,693 306,156 
Real estate – mortgage – commercial and other2,540 3,111 — 17,191 2,022,422 2,045,264 
Consumer loans180 36 — 180 53,521 53,917 
Purchased credit impaired328 112 719 — 7,432 8,591 
Total$16,318 5,271 719 35,076 4,677,629 4,735,013 
Unamortized net deferred loan fees(3,698)
Total loans$4,731,315 
Collateral dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. The Company reviews individually evaluated loans on nonaccrual with a net book balance of $250,000 or greater for designation as collateral dependent loans, as well as other loans that management of the Company designates as having higher risk. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses.
The following table presents an analysis of collateral-dependent loans of the Company as of September 30, 2021.
($ in thousands)Residential PropertyBusiness AssetsLandCommercial PropertyOtherTotal Collateral-Dependent Loans
Commercial, financial, and agricultural$— 4,663 — — — 4,663 
Real estate – construction, land development & other land loans— — — — — — 
Real estate – mortgage – residential (1-4 family) first mortgages735 — — — — 735 
Real estate – mortgage – home equity loans / lines of credit— — — — — — 
Real estate – mortgage – commercial and other— — — 13,848 — 13,848 
Consumer loans— — — — — — 
Total$735 4,663 — 13,848 — 19,246 
Under CECL, for collateral dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is calculated on an individual loan basis based on the shortfall between the fair value of the loan's collateral, which is adjusted for liquidation costs/discounts, and amortized cost. If the fair value of the collateral exceeds the amortized cost, no allowance is required.
The Company's policy is to obtain third-party appraisals on any significant pieces of collateral. For loans secured by real estate, the Company's policy is to write nonaccrual loans down to 90% of the appraised value, which considers estimated selling costs. For real estate collateral that is in industries that are undergoing heightened stress, the Company often discounts the collateral values by an additional 10-25% due to additional discounts that are estimated to be incurred in a near-term sale. For non real-estate collateral secured loans, the Company generally writes nonaccrual loans down to 75% of the appraised value, which provides for selling costs and liquidity discounts that are usually incurred when disposing of non real-estate collateral. For reviewed loans that are not on nonaccrual basis, the Company assigns a specific allowance based on the parameters noted above.
The Company does not believe that there is significant over-coverage of collateral for any of the loan types noted above.
The following table presents the activity in the allowance for loan losses for all loans for the three and nine months ended September 30, 2021 (under the CECL methodology).
($ in thousands)Commercial,
Financial,
and
Agricultural		Real Estate
–
Construction,
Land
Development
& Other Land
Loans		Real Estate
–
Residential
(1-4 Family)
First
Mortgages		Real Estate
– Mortgage
– Home
Equity
Lines of
Credit		Real Estate
– Mortgage
–
Commercial
and Other		Consumer LoansUnallocatedTotal
As of and for the three months ended September 30, 2021
Beginning balance$14,809 10,104 8,651 3,737 25,358 2,363 — 65,022 
Charge-offs(899)— (24)— (4)(178)— (1,105)
Recoveries398 98 176 311 79 49 — 1,111 
Provisions/(Reversals)(808)2,187 (1,032)(546)(1,336)135 — (1,400)
Ending balance$13,500 12,389 7,771 3,502 24,097 2,369 — 63,628 
As of and for the nine months ended September 30, 2021
Beginning balance$11,316 5,355 8,048 2,375 23,603 1,478 213 52,388 
Adjustment for implementation of CECL3,067 6,140 2,584 2,580 (257)674 (213)14,575 
Charge-offs(2,887)(66)(138)(139)(1,838)(485)— (5,553)
Recoveries1,065 784 499 540 419 311 — 3,618 
Provisions/(Reversals)939 176 (3,222)(1,854)2,170 391 — (1,400)
Ending balance$13,500 12,389 7,771 3,502 24,097 2,369 — 63,628 
The following table presents the activity in the allowance for loan losses for the year ended December 31, 2020 (under the Incurred Loss methodology).
($ in thousands)Commercial,
Financial,
and
Agricultural		Real Estate
–
Construction,
Land
Development
& Other Land
Loans		Real Estate
–
Residential
(1-4 Family)
First
Mortgages		Real Estate
– Mortgage
– Home
Equity
Lines of
Credit		Real Estate
– Mortgage
–
Commercial
and Other		Consumer LoansUnallocatedTotal
As of and for the year ended December 31, 2020
Beginning balance$4,553 1,976 3,832 1,127 8,938 972 — 21,398 
Charge-offs(5,608)(51)(478)(524)(968)(873)— (8,502)
Recoveries745 1,552 754 487 621 294 — 4,453 
Provisions11,626 1,878 3,940 1,285 15,012 1,085 213 35,039 
Ending balance$11,316 5,355 8,048 2,375 23,603 1,478 213 52,388 
Ending balances as of December 31, 2020: Allowance for loan losses
Individually evaluated for impairment$3,546 30 800 — 2,175 — — 6,551 
Collectively evaluated for impairment$7,742 5,325 7,141 2,375 21,428 1,475 213 45,699 
Purchased credit impaired$28 — 107 — — 3 — 138 
Loans receivable as of December 31, 2020:
Ending balance – total$782,549 570,672 972,378 306,256 2,049,203 53,955 — 4,735,013 
Unamortized net deferred loan fees(3,698)
Total loans$4,731,315 
Ending balances as of December 31, 2020: Loans
Individually evaluated for impairment$7,700 677 9,303 15 18,582 4 — 36,281 
Collectively evaluated for impairment$774,712 569,845 958,848 306,141 2,026,682 53,913 — 4,690,141 
Purchased credit impaired$137 150 4,227 100 3,939 38 — 8,591 
The following table presents the activity in the allowance for loan losses for the three and nine months ended September 30, 2020 (under the Incurred Loss methodology).
($ in thousands)Commercial,
Financial,
and
Agricultural		Real Estate
–
Construction,
Land
Development
& Other Land
Loans		Real Estate
–
Residential
(1-4 Family)
First
Mortgages		Real Estate
– Mortgage
– Home
Equity
Lines of
Credit		Real Estate
– Mortgage
–
Commercial
and Other		Consumer LoansUnallocatedTotal
As of and for the three months ended September 30, 2020
Beginning balance$5,989 5,677 8,339 2,359 18,755 1,223 — 42,342 
Charge-offs(325)(6)(4)(23)— (310)— (668)
Recoveries126 213 279 207 482 125 — 1,432 
Provisions2,986 388 82 (83)2,369 308 70 6,120 
Ending balance$8,776 6,272 8,696 2,460 21,606 1,346 70 49,226 
As of and for the nine months ended September 30, 2020
Beginning balance$4,553 1,976 3,832 1,127 8,938 972 — 21,398 
Charge-offs(4,256)(51)(478)(404)(545)(707)— (6,441)
Recoveries603 856 594 373 584 251 — 3,261 
Provisions7,876 3,491 4,748 1,364 12,629 830 70 31,008 
Ending balance$8,776 6,272 8,696 2,460 21,606 1,346 70 49,226 
Ending balance as of September 30, 2020: Allowance for loan losses
Individually evaluated for impairment$1,814 56 820 — 1,624 — — 4,314 
Collectively evaluated for impairment$6,921 6,216 7,760 2,460 19,982 1,342 70 44,751 
Purchased credit impaired$41 — 116 — — 4 — 161 
Loans receivable as of September 30, 2020
Ending balance – total$804,831 653,120 1,017,087 310,326 1,983,622 50,189 — 4,819,175 
Unamortized net deferred loan fees(5,439)
Total loans$4,813,736 
Ending balances as of September 30, 2020: Loans
Individually evaluated for impairment$7,001 853 9,657 319 16,349 — — 34,179 
Collectively evaluated for impairment$797,654 652,117 1,002,254 309,911 1,963,303 50,141 — 4,775,380 
Purchased credit impaired$176 150 5,176 96 3,970 48 — 9,616 
The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of December 31, 2020.
($ in thousands)Recorded
Investment		Unpaid
Principal
Balance		Related
Allowance		Average
Recorded
Investment
Impaired loans with no related allowance recorded:
Commercial, financial, and agricultural$3,688 4,325 — 750 
Real estate – mortgage – construction, land development & other land loans554 694 — 308 
Real estate – mortgage – residential (1-4 family) first mortgages4,115 4,456 — 4,447 
Real estate – mortgage –home equity loans / lines of credit15 27 — 264 
Real estate – mortgage –commercial and other11,763 13,107 — 9,026 
Consumer loans4 4 — 1 
Total impaired loans with no allowance$20,139 22,613 — 14,796 
Impaired loans with an allowance recorded:
Commercial, financial, and agricultural$4,012 4,398 3,546 5,139 
Real estate – mortgage – construction, land development & other land loans123 131 30 502 
Real estate – mortgage – residential (1-4 family) first mortgages5,188 5,361 800 5,186 
Real estate – mortgage –home equity loans / lines of credit— — — 21 
Real estate – mortgage –commercial and other6,819 7,552 2,175 5,786 
Consumer loans— — — — 
Total impaired loans with allowance$16,142 17,442 6,551 16,634 
Interest income recorded on impaired loans during the year ended December 31, 2020 was $1.1 million, and reflects interest income collected on nonaccrual loans prior to them being placed on nonaccrual status and interest income recorded on accruing TDRs.
The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type.
The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
Risk GradeDescription
Pass:
1Loans with virtually no risk, including cash secured loans.
2Loans with documented significant overall financial strength.  These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
3Loans with documented satisfactory overall financial strength.  These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
4Loans to borrowers with acceptable financial condition.  These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.  
5Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management.  Collateral is generally required and felt to provide reasonable coverage with realizable liquidation values in normal circumstances.  Repayment performance is satisfactory.
P
(Pass)		Consumer loans (<$500,000) that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels.  These loans generally conform to Company policy, but may include approved mitigated exceptions to the guidelines.  
Special Mention:
6Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Company.
Classified:
7An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.  These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
8Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable.  Loss appears imminent, but the exact amount and timing is uncertain.
9Loans that are considered uncollectible and are in the process of being charged-off.  This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
F
(Fail)		Consumer loans (<$500,000) with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.
The following table presents the Company’s recorded investment in loans by credit quality indicators by year of origination or renewal as of September 30, 2021.
Term Loans by Year of Origination
($ in thousands)20212020201920182017PriorRevolvingTotal
Commercial, financial, and agricultural
Pass$177,374 136,471 88,627 70,541 15,904 19,406 84,328 592,651 
Special Mention14 613 3,467 2,823 192 5 2,702 9,816 
Classified15 679 1,404 7,583 72 12 322 10,087 
Total commercial, financial, and agricultural177,403 137,763 93,498 80,947 16,168 19,423 87,352 612,554 
Real estate – construction, land development & other land loans
Pass350,577 139,023 47,604 9,676 11,717 9,290 12,828 580,715 
Special Mention43 749 5,135 — 111 12 11 6,061 
Classified579 317 117 183 14 117 — 1,327 
Total real estate – construction, land development & other land loans351,199 140,089 52,856 9,859 11,842 9,419 12,839 588,103 
Real estate – mortgage – residential (1-4 family) first mortgages
Pass169,818 206,945 111,517 74,291 83,813 239,602 7,315 893,301 
Special Mention1,007 571 193 141 315 3,052 95 5,374 
Classified316 155 540 1,296 653 11,760 871 15,591 
Total real estate – mortgage – residential (1-4 family) first mortgages171,141 207,671 112,250 75,728 84,781 254,414 8,281 914,266 
Real estate – mortgage – home equity loans / lines of credit
Pass1,453 345 548 1,340 268 1,251 268,863 274,068 
Special Mention— — 16 — — 19 1,080 1,115 
Classified78 109 68 — — 496 5,285 6,036 
Total real estate – mortgage – home equity loans / lines of credit1,531 454 632 1,340 268 1,766 275,228 281,219 
Real estate – mortgage – commercial and other
Pass882,823 651,882 261,293 164,575 148,376 216,052 60,035 2,385,036 
Special Mention4,109 4,918 4,613 2,049 1,890 222 545 18,346 
Classified6,726 133 1,871 6,291 4,327 611 — 19,959 
Total real estate – mortgage – commercial and other893,658 656,933 267,777 172,915 154,593 216,885 60,580 2,423,341 
Consumer loans
Pass12,826 24,684 3,770 1,994 792 653 8,704 53,423 
Special Mention— — — — — — — — 
Classified3 58 22 10 6 35 190 324 
Total consumer loans12,829 24,742 3,792 2,004 798 688 8,894 53,747 
Total$1,607,761 1,167,652 530,805 342,793 268,450 502,595 453,174 4,873,230 
Unamortized net deferred loan fees(3,389)
Total loans4,869,841 
At September 30, 2021, as derived from the table above, the Company had $40.7 million in loans graded as Special Mention and $53.3 million in loans graded as Classified, which includes all nonaccrual loans.
In the table above, substantially all of the "Classified Loans" have grades of 7 or Fail, with those categories having similar levels of risk. The amount of revolving lines of credit that converted to term loans during the period was immaterial.
The following table presents the Company’s recorded investment in loans by credit quality indicators as of December 31, 2020.
($ in thousands)PassSpecial
Mention Loans		Classified
Accruing Loans		Classified
Nonaccrual
Loans		Total
Commercial, financial, and agricultural$762,091 9,553 1,087 9,681 782,412 
Real estate – construction, land development & other land loans560,845 7,877 1,157 643 570,522 
Real estate – mortgage – residential (1-4 family) first mortgages943,455 7,609 11,039 6,048 968,151 
Real estate – mortgage – home equity loans / lines of credit297,795 1,468 5,560 1,333 306,156 
Real estate – mortgage – commercial and other1,988,684 34,588 4,801 17,191 2,045,264 
Consumer loans53,488 80 169 180 53,917 
Purchased credit impaired6,901 85 1,605 — 8,591 
Total$4,613,259 61,260 25,418 35,076 4,735,013 
Unamortized net deferred loan fees(3,698)
Total loans4,731,315 
Troubled Debt Restructurings
The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, extension of terms and other actions intended to minimize potential losses.
The vast majority of the Company’s TDRs modified during the periods ended September 30, 2021 and September 30, 2020 related to interest rate reductions combined with extension of terms. The Company does not generally grant principal forgiveness.
The Company’s TDRs can be classified as either nonaccrual or accruing based on the loan’s payment status. The TDRs that are nonaccrual are reported within the nonaccrual loan totals presented previously.
As of September 30, 2021, the Company had granted short-term deferrals related to the COVID-19 pandemic for $1.8 million of loans that were otherwise performing prior to modification. Pursuant to the CARES Act and banking regulator guidance, these loans are not considered TDRs.
The following table presents information related to loans that were modified in a TDR during the three months ended September 30, 2021 and 2020.
($ in thousands)For the three months ended September 30, 2021For the three months ended September 30, 2020
Number of
Contracts		Pre-
Modification
Restructured
Balances		Post-
Modification
Restructured
Balances		Number of
Contracts		Pre-
Modification
Restructured
Balances		Post-
Modification
Restructured
Balances
TDRs – Accruing
Commercial, financial, and agricultural— $— $— — $— $— 
Real estate – construction, land development & other land loans— — — — — — 
Real estate – mortgage – residential (1-4 family) first mortgages— — — — — — 
Real estate – mortgage – home equity loans / lines of credit— — — — — — 
Real estate – mortgage – commercial and other— — — — — — 
Consumer loans— — — — — — 
TDRs – Nonaccrual
Commercial, financial, and agricultural— — — — — — 
Real estate – construction, land development & other land loans— — — — — — 
Real estate – mortgage – residential (1-4 family) first mortgages— — — — — — 
Real estate – mortgage – home equity loans / lines of credit— — — — — — 
Real estate – mortgage – commercial and other— — — 1 2,344 2,344 
Consumer loans— — — — — — 
Total TDRs arising during period— $— $— 1 $2,344 $2,344 
The following table presents information related to loans that were modified in a TDR during the nine months ended September 30, 2021 and 2020.
($ in thousands)For the nine months ended September 30, 2021For the nine months ended September 30, 2020
Number of
Contracts		Pre-
Modification
Restructured
Balances		Post-
Modification
Restructured
Balances		Number of
Contracts		Pre-
Modification
Restructured
Balances		Post-
Modification
Restructured
Balances
TDRs – Accruing
Commercial, financial, and agricultural— $— $— 2 $143 $143 
Real estate – construction, land development & other land loans— — — 1 67 67 
Real estate – mortgage – residential (1-4 family) first mortgages1 33 33 2 75 78 
Real estate – mortgage – home equity loans / lines of credit— — — — — — 
Real estate – mortgage – commercial and other1 160 160 — — — 
Consumer loans— — — — — — 
TDRs – Nonaccrual
Commercial, financial, and agricultural3 826 823 — — — 
Real estate – construction, land development & other land loans1 75 75 — — — 
Real estate – mortgage – residential (1-4 family) first mortgages1 263 263 — — — 
Real estate – mortgage – home equity loans / lines of credit— — — — — — 
Real estate – mortgage – commercial and other3 1,569 1,569 1 2,344 2,344 
Consumer loans— — — — — — 
Total TDRs arising during period10 $2,926 $2,923 6 $2,629 $2,632 

Accruing TDRs that were modified in the previous twelve months and that defaulted during the three months ended September 30, 2021 and 2020 are presented in the table below. The Company considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to nonaccrual status, or has been transferred to foreclosed real estate.
($ in thousands)For the Three Months Ended September 30, 2021For the Three Months Ended September 30, 2020
Number of
Contracts		Recorded
Investment		Number of
Contracts		Recorded
Investment
Accruing TDRs that subsequently defaulted
Real estate – mortgage – residential (1-4 family first mortgages)— $— — $— 
Real estate – mortgage – commercial and other— — — — 
Total accruing TDRs that subsequently defaulted— $— — $— 
Accruing TDRs that were modified in the previous twelve months and that defaulted during the nine months ended September 30, 2021 and 2020 are presented in the table below.
($ in thousands)For the Nine Months Ended September 30, 2021For the Nine Months Ended September 30, 2020
Number of
Contracts		Recorded
Investment		Number of
Contracts		Recorded
Investment
Accruing TDRs that subsequently defaulted
Real estate – mortgage – residential (1-4 family first mortgages)— $— — $— 
Real estate – mortgage – commercial and other— — 1 274 
Total accruing TDRs that subsequently defaulted— $— 1 $274 

Allowance for Credit Losses - Unfunded Loan Commitments

In addition to the allowance for credit losses on loans, the Company maintains an allowance for lending-related commitments such as unfunded loan commitments and letters of credit. Under CECL, the Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless that obligation is unconditionally cancellable by the Company. The allowance for lending-related commitments on off-balance sheet credit exposures is adjusted as a provision for credit loss expense. The estimate includes consideration of the likelihood that funding will occur, which is based on a historical funding study derived from internal information, and an estimate of expected credit losses on commitments expected to be funded over its estimated life, which are the same loss rates that are used in computing the allowance for credit losses on loans, and are discussed in Note 2. The allowance for credit losses for unfunded loan commitments of $11.1 million and $0.6 million at September 30, 2021 and December 31, 2020, respectively, is separately classified on the balance sheet within the line items "Other Liabilities". The following table presents the balance and activity in the allowance for credit losses for unfunded loan commitments for the nine months ended September 30, 2021.
($ in thousands)Total Allowance for Credit Losses - Unfunded Loan Commitments
Beginning balance at December 31, 2020$582 
Adjustment for implementation of CECL on January 1, 20217,504 
Charge-offs— 
Recoveries— 
Provisions for credit losses on unfunded commitments2,988 
Ending balance at September 30, 2021$11,074 

Allowance for Credit Losses - Securities Held to Maturity
As previously discussed, the allowance for credit losses for securities held to maturity was immaterial at September 30, 2021.