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Loans and Allowance | 12 Months Ended
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Dec. 31, 2020
Receivables [Abstract] |
Loans and Allowance | LOANS AND ALLOWANCE Loans are stated at the amount of unpaid principal, reduced by deferred income (net of costs). Interest on loans is recognized using the simple interest method on the daily balances of the principal amounts outstanding. Loan origination fees, net of direct loan origination costs, and commitment fees are deferred and amortized as an adjustment to yield over the life of the loan, or over the commitment period, as applicable. The Corporation’s primary lending focus is small business and middle market commercial, commercial real estate and residential real estate, which results in portfolio diversification. The following tables show the composition of the loan portfolio, the allowance for loan losses and credit quality characteristics by collateral classification, excluding loans held for sale. Loans held for sale at December 31, 2020 and 2019, were $4.0 million and $9.0 million, respectively. The following table illustrates the composition of the Corporation’s loan portfolio by loan class for the years indicated:
| December 31, 2020 |  | December 31, 2019
Commercial and industrial loans | $ | 2,776,699 |  |  | $ | 2,109,879 |
Agricultural land, production and other loans to farmers | 281,884 |  |  | 334,172 |
Real estate loans: |  |  |
Construction | 484,723 |  |  | 787,568 |
Commercial real estate, non-owner occupied | 2,220,949 |  |  | 1,902,692 |
Commercial real estate, owner occupied | 958,501 |  |  | 909,695 |
Residential | 1,234,741 |  |  | 1,143,217 |
Home equity | 508,259 |  |  | 588,984 |
Individuals' loans for household and other personal expenditures | 129,479 |  |  | 135,989 |
Public finance and other commercial loans | 647,939 |  |  | 547,114 |
Loans | 9,243,174 |  |  | 8,459,310 |
Allowance for loan losses | (130,648) |  |  | (80,284) |
Net Loans | $ | 9,112,526 |  |  | $ | 8,379,026 |
On March 27, 2020, the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”) was signed into law, providing an approximate $2 trillion stimulus package that includes direct payments to individual taxpayers, economic stimulus to significantly impacted industry sectors, emergency funding for hospitals and providers, small business loans, increased unemployment benefits, and a variety of tax incentives. For small businesses, eligible nonprofits and certain others, the CARES Act established a Paycheck Protection Program (“PPP”), which is administered by the Small Business Administration (“SBA”). On April 24, 2020, the Paycheck Protection Program and Health Care Enhancement Act was enacted. Among other things, this legislation amends the initial CARES Act program by raising the appropriation level for PPP loans from $349 billion to $670 billion. The PPP was further modified on June 5, 2020 with the adoption of the Paycheck Protection Program Flexibility Act ("the Flexibility Act"), which extended the maturity date for PPP loans from two years to five years for loans disbursed on or after the date of enactment of the Flexibility Act. For PPP loans disbursed prior to such enactment, the Flexibility Act permits the borrower and lender to mutually agree to extend the term of the loan to five years. The Bank has actively participated in assisting its customers with applications for resources through the program. PPP loans earn interest at a fixed rate of 1 percent and primarily have a two year term. The Bank anticipates that the majority of these loans will ultimately be forgiven, in whole or in part, by the SBA as, in accordance with the terms of the PPP, the loans are fully guaranteed by the SBA. As of December 31, 2020, the Bank had over 4,400 PPP loans, primarily in the commercial and industrial loan class, totaling $667.1 million, which is net of $12.5 million of deferred processing fee income and costs. The weighted-average deferred processing fee on PPP loans was approximately 3.09 percent and is recognized over the term of the loan. If a loan is forgiven by the SBA or paid off by the borrower prior to maturity, any unamortized portion of the fee will be recognized immediately. During the year ended December 31, 2020, the Corporation recognized interest income on PPP loans of $6.2 million and $16.2 million of PPP loan related deferred processing fee income as a yield adjustment. The Bank borrowed from the Paycheck Protection Program Liquidity Facility ("PPPL Facility") to supplement liquidity to fund the PPP loans in the second quarter 2020. At December 31, 2020, the Corporation did not have an outstanding balance with the PPPL Facility. Allowance, Credit Quality and Loan Portfolio Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit losses on Financial Instruments ("CECL") had an original adoption date of January 1, 2020, which included a day 1 measurement date of January 1, 2020. The CARES Act, passed by Congress on March 27, 2020 in response to the COVID-19 pandemic, created an optional deferral of the CECL adoption date. Pursuant to the CARES Act and the related joint statement of federal banking regulators (which also became effective as of March 27, 2020), and consistent with guidance from the SEC and FASB, the Corporation elected to delay implementation of ASU No. 2016-13, which was set to expire on December 31, 2020. However, the 2021 Consolidated Appropriations Act ("CAA"), signed into law on December 27, 2020, amended the CARES Act by extending the temporary relief from CECL compliance to the earlier of the first day of the fiscal year that begins after the date on which the national emergency concerning COVID-19 terminates, or January 1, 2022. The Corporation elected to delay implementation of CECL following the approval of the CARES Act and, with the enactment of the CAA, the Corporation has elected to further delay adoption of CECL to January 1, 2021. As a result of the Corporation’s election, its 2020 financial statements have been prepared under the existing incurred loss model. The Corporation maintains an allowance for loan losses to cover probable credit losses identified during its loan review process. Management believes that the allowance for loan losses is adequate to cover probable losses inherent in the loan portfolio at December 31, 2020. The process for determining the adequacy of the allowance for loan losses is critical to the Corporation’s financial results. It requires management to make difficult, subjective and complex judgments to estimate the effect of uncertain matters. The allowance for loan losses considers current factors, including economic conditions and ongoing internal and external examinations, and will increase or decrease as deemed necessary to ensure it remains adequate. In addition, the allowance as a percentage of charge-offs and nonperforming loans will change at different points in time based on credit performance, portfolio mix and collateral values. The allowance for loan losses is maintained through the provision for loan losses, which is a charge against earnings. The allowance is increased by provision expense and decreased by charge-offs less recoveries. All charge-offs are approved by the Bank's senior credit officers and in accordance with established policies. The Bank charges off a loan when a determination is made that all or a portion of the loan is uncollectible. The amount provided for loan losses in a given period may be greater than or less than net loan losses experienced during the period, and is based on management’s judgment as to the appropriate level of the allowance for loan losses. The determination of the provision amount is based on management’s ongoing review and evaluation of the loan portfolio, including an internally administered loan "watch" list and independent loan reviews. The evaluation takes into consideration identified credit problems, the possibility of losses inherent in the loan portfolio that are not specifically identified and management’s judgment as to the impact of the current environment and economic conditions on the portfolio. The allowance consists of specific impairment reserves as required by ASC 310-10-35, a component for historical losses in accordance with ASC 450 and the consideration of current environmental factors in accordance with ASC 450. A loan is deemed impaired when, based on current information or events, it is probable that all amounts due of principal and interest according to the contractual terms of the loan agreement will not be collected. The historical loss allocation for loans not deemed impaired according to ASC 450 is the product of the volume of loans within the non-impaired criticized and non-criticized risk grade classifications, each segmented by call code, and the historical loss factor for each respective classification and call code segment. The historical loss factors are based upon actual loss experience within each risk and call code classification. The historical look back period for non-criticized loans looks to the most recent rolling-four-quarter average and aligns with the look back period for non-impaired criticized loans. Each of the rolling four quarter periods used to obtain the average, include all charge-offs for the previous twelve-month period, therefore the historical look back period includes seven quarters. Criticized loans are grouped based on the risk grade assigned to the loan. Loans with a special mention grade are assigned a loss factor, and loans with a classified grade but not impaired are assigned a separate loss factor. The loss factor computation for this allocation includes a segmented historical loss migration analysis of risk grades to charge-off. In addition to the specific reserves and historical loss components of the allowance, consideration is given to various environmental factors to ensure that losses inherent in the portfolio are reflected in the allowance for loan losses. Environmental factors that management reviews in the analysis include: national and local economic trends and conditions; trends in growth in the loan portfolio and growth in higher risk areas; levels of, and trends in, delinquencies and non-accruals; experience and depth of lending management and staff; adequacy of, and adherence to, lending policies and procedures including those for underwriting; industry concentrations of credit; and adequacy of risk identification systems and controls through the internal loan review and internal audit processes. In conformance with ASC 805 and ASC 820, loans purchased after December 31, 2008 are recorded at the acquisition date fair value. Such loans are included in the allowance to the extent a specific impairment is identified that exceeds the fair value adjustment on an impaired loan or the historical loss and environmental factor analysis indicates losses inherent in a purchased portfolio exceeds the fair value adjustment on the portion of the purchased portfolio not deemed impaired. At December 31, 2020, the allowance for loan losses was $130.6 million, an increase of $50.3 million from the December 31, 2019 balance of $80.3 million. Net charge-offs for the twelve months ended December 31, 2020, were $8.3 million, an increase of $5.2 million from the same period in 2019. The provision for loan losses for the twelve months ended December 31, 2020 was $58.7 million, an increase of $55.9 million from the same period in 2019. The determination of the provision for loan losses in any period is based on management’s continuing review and evaluation of the loan portfolio, and its judgment as to the impact of current economic conditions on the portfolio. The following tables summarize changes in the allowance for loan losses by loan segment for the twelve months ended December 31, 2020, 2019, and 2018:
| Twelve Months Ended December 31, 2020
| Commercial |  | Commercial Real Estate |  |  |  | Consumer |  | Residential |  |  |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Balances, December 31, 2019 | $ | 32,902 |  |  | $ | 28,778 |  |  |  |  | $ | 4,035 |  |  | $ | 14,569 |  |  |  |  | $ | 80,284 |
Provision for losses | 21,930 |  |  | 22,174 |  |  |  |  | 5,996 |  |  | 8,573 |  |  |  |  | 58,673 |
Recoveries on loans | 819 |  |  | 431 |  |  |  |  | 260 |  |  | 666 |  |  |  |  | 2,176 |
Loans charged off | (8,536) |  |  | (313) |  |  |  |  | (643) |  |  | (993) |  |  |  |  | (10,485) |
Balances, December 31, 2020 | $ | 47,115 |  |  | $ | 51,070 |  |  |  |  | $ | 9,648 |  |  | $ | 22,815 |  |  |  |  | $ | 130,648 |
| Twelve Months Ended December 31, 2019
| Commercial |  | Commercial Real Estate |  | Consumer |  | Residential |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Balances, December 31, 2018 | $ | 32,657 |  |  | $ | 29,609 |  |  | $ | 3,964 |  |  | $ | 14,322 |  |  | $ | 80,552 |
Provision for losses | 733 |  |  | 1,555 |  |  | 239 |  |  | 273 |  |  | 2,800 |
Recoveries on loans | 1,244 |  |  | 1,289 |  |  | 401 |  |  | 619 |  |  | 3,553 |
Loans charged off | (1,732) |  |  | (3,675) |  |  | (569) |  |  | (645) |  |  | (6,621) |
Balances, December 31, 2019 | $ | 32,902 |  |  | $ | 28,778 |  |  | $ | 4,035 |  |  | $ | 14,569 |  |  | $ | 80,284 |
| Twelve Months Ended December 31, 2018
| Commercial |  | Commercial Real Estate |  | Consumer |  | Residential |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |
Balances, December 31, 2017 | $ | 30,420 |  |  | $ | 27,343 |  |  | $ | 3,732 |  |  | $ | 13,537 |  |  | $ | 75,032 |
Provision for losses | 2,097 |  |  | 2,482 |  |  | 679 |  |  | 1,969 |  |  | 7,227 |
Recoveries on loans | 2,456 |  |  | 2,525 |  |  | 302 |  |  | 993 |  |  | 6,276 |
Loans charged off | (2,316) |  |  | (2,741) |  |  | (749) |  |  | (2,177) |  |  | (7,983) |
Balances, December 31, 2018 | $ | 32,657 |  |  | $ | 29,609 |  |  | $ | 3,964 |  |  | $ | 14,322 |  |  | $ | 80,552 |
The tables below show the Corporation’s allowance for loan losses and loan portfolio by loan segment for the years indicated.
| December 31, 2020
| Commercial |  | Commercial Real Estate |  | Consumer |  | Residential |  | Total
Allowance balances: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 223 |  |  | $ | 12,246 |  |  | $ | — |  |  | $ | 432 |  |  | $ | 12,901 |
Collectively evaluated for impairment | 46,892 |  |  | 38,824 |  |  | 9,648 |  |  | 22,383 |  |  | 117,747 |
Total allowance for loan losses | $ | 47,115 |  |  | $ | 51,070 |  |  | $ | 9,648 |  |  | $ | 22,815 |  |  | $ | 130,648 |
Loan balances: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 1,258 |  |  | $ | 51,605 |  |  | $ | 2 |  |  | $ | 3,291 |  |  | $ | 56,156 |
Collectively evaluated for impairment | 3,505,863 |  |  | 3,805,808 |  |  | 129,477 |  |  | 1,739,709 |  |  | 9,180,857 |
Loans acquired with deteriorated credit quality | 577 |  |  | 5,584 |  |  | — |  |  | — |  |  | 6,161 |
Loans | $ | 3,507,698 |  |  | $ | 3,862,997 |  |  | $ | 129,479 |  |  | $ | 1,743,000 |  |  | $ | 9,243,174 |
| December 31, 2019
| Commercial |  | Commercial Real Estate |  | Consumer |  | Residential |  | Total
Allowance balances: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | — |  |  | $ | 231 |  |  | $ | — |  |  | $ | 458 |  |  | $ | 689 |
Collectively evaluated for impairment | 32,902 |  |  | 28,547 |  |  | 4,035 |  |  | 14,111 |  |  | 79,595 |
Total allowance for loan losses | $ | 32,902 |  |  | $ | 28,778 |  |  | $ | 4,035 |  |  | $ | 14,569 |  |  | $ | 80,284 |
Loan balances: |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 457 |  |  | $ | 8,728 |  |  | $ | 4 |  |  | $ | 2,520 |  |  | $ | 11,709 |
Collectively evaluated for impairment | 2,748,681 |  |  | 3,821,660 |  |  | 135,985 |  |  | 1,727,966 |  |  | 8,434,292 |
Loans acquired with deteriorated credit quality | 1,716 |  |  | 9,878 |  |  | — |  |  | 1,715 |  |  | 13,309 |
Loans | $ | 2,750,854 |  |  | $ | 3,840,266 |  |  | $ | 135,989 |  |  | $ | 1,732,201 |  |  | $ | 8,459,310 |
Loans individually evaluated for impairment are comprised of commercial and consumer loans deemed impaired in accordance with ASC 310-10. This includes loans acquired with subsequent deterioration of credit quality totaling $1.3 million with $557,000 of related allowance for loan losses at December 31, 2020 and $2.8 million with $124,000 related allowance for loan losses at December 31, 2019. The risk characteristics of the Corporation’s material portfolio segments are as follows: Commercial Commercial lending is primarily based on the identified cash flows of the borrower and secondarily on the underlying collateral provided by the borrower. The cash flows of borrowers, however, may not be as expected and the collateral securing these loans may fluctuate in value. Most commercial loans are secured by the tangible assets being financed such as equipment or real estate or other business assets such as accounts receivable or inventory and may incorporate a personal guarantee. Other loans may be unsecured, secured but under-collateralized or otherwise made on the basis of the enterprise value of an organization. In the case of loans secured by accounts receivable, the availability of funds for the repayment of these loans may be substantially dependent on the ability of the borrower to collect amounts due from its customers. Commercial real estate These loans are viewed primarily as cash flow loans and secondarily as loans secured by real estate. Commercial real estate lending typically involves higher loan principal amounts and the repayment of these loans is generally dependent on the successful operation of the property securing the loan or the business conducted on the property securing the loan. Commercial real estate loans may be more adversely affected by conditions in the real estate markets or in the general economy. Management monitors and evaluates commercial real estate loans based on collateral and risk grade criteria. In addition, management tracks the level of owner-occupied commercial real estate loans versus non-owner occupied loans. Consumer and Residential With respect to residential loans that are secured by 1-4 family residences, which are typically owner occupied, the Corporation generally establishes a maximum loan-to-value ratio and requires private mortgage insurance if that ratio is exceeded. Home equity loans are secured by a subordinate interest in 1-4 family residences, and consumer loans are secured by consumer assets such as automobiles or recreational vehicles. Some consumer loans, such as small installment loans and certain lines of credit, are unsecured. Repayment of these loans is primarily dependent on the personal income and credit rating of the borrowers, which can be impacted by economic conditions in their market areas such as unemployment levels. Repayment on loans secured by 1-4 family residences can be impacted by changes in property values. Risk is mitigated by the fact that the loans are of smaller individual amounts and spread over a large number of borrowers. Loans are reclassified to a non-accruing status when, in management’s judgment, the collateral value and financial condition of the borrower do not justify accruing interest. When the interest accrual is discontinued, all unpaid accrued interest is reversed against earnings when considered uncollectible. Payments subsequently received on non-accrual loans are applied to principal. A loan is returned to accrual status when principal and interest are no longer past due and collectability is probable, typically after a minimum of six consecutive months of performance. Payments received on impaired accruing or delinquent loans are applied to interest income as accrued. The following table summarizes the Corporation’s non-accrual loans by loan class for the years indicated:
| December 31, 2020 |  | December 31, 2019
Commercial and industrial loans | $ | 2,329 |  |  | $ | 1,255 |
Agricultural land, production and other loans to farmers | 1,012 |  |  | 1,180 |
Real estate loans: |  |  |
Construction | 123 |  |  | 977 |
Commercial real estate, non-owner occupied | 46,316 |  |  | 3,351 |
Commercial real estate, owner occupied | 3,040 |  |  | 2,659 |
Residential | 6,517 |  |  | 5,062 |
Home equity | 2,095 |  |  | 1,421 |
Individuals' loans for household and other personal expenditures | 39 |  |  | 44 |
Total | $ | 61,471 |  |  | $ | 15,949 |
Impaired loans include loans deemed impaired according to the guidance set forth in ASC 310-10. Commercial loans under $500,000 and consumer loans, with the exception of troubled debt restructures, are not individually evaluated for impairment. Allowable methods for determining the amount of impairment include estimating fair value using the fair value of the collateral for collateral dependent loans. If the impaired loan is identified as collateral dependent, then the fair value method for measuring the amount of impairment is utilized. This method requires obtaining a current independent appraisal of the collateral and applying a discount factor, which includes selling costs if applicable, to the value. The fair value of real estate is generally based on appraisals by qualified licensed appraisers. The appraisers typically determine the value of the real estate by utilizing an income or market valuation approach. If an appraisal is not available, the fair value may be determined by using a cash flow analysis. Fair value on other collateral such as business assets is typically ascertained by assessing, either singularly or some combination of, asset appraisals, accounts receivable aging reports, inventory listings and or customer financial statements. Both appraised values and values based on borrower’s financial information are discounted as considered appropriate based on age and quality of the information and current market conditions. The following tables show the composition of the Corporation’s impaired loans, related allowance and interest income recognized while impaired by loan class for the years indicated:
| December 31, 2020
| Unpaid Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment |  | Interest Income Recognized
Impaired loans with no related allowance: |  |  |  |  |  |  |  |  |
Commercial and industrial loans | $ | 1,059 |  |  | $ | 991 |  |  | $ | — |  |  | $ | 991 |  |  | $ | — |
Real estate loans: |  |  |  |  |  |  |  |  |
Commercial real estate, non-owner occupied | 4,958 |  |  | 4,694 |  |  | — |  |  | 4,850 |  |  | 145 |
Commercial real estate, owner occupied | 2,125 |  |  | 1,310 |  |  | — |  |  | 1,429 |  |  | — |
Residential | 957 |  |  | 816 |  |  | — |  |  | 840 |  |  | 3 |
Individuals' loans for household and other personal expenditures | 2 |  |  | 2 |  |  | — |  |  | 3 |  |  | — |
Total | $ | 9,101 |  |  | $ | 7,813 |  |  | $ | — |  |  | $ | 8,113 |  |  | $ | 148 |
Impaired loans with related allowance: |  |  |  |  |  |  |  |  |
Commercial and industrial loans | $ | 268 |  |  | $ | 268 |  |  | $ | 223 |  |  | $ | 267 |  |  | $ | — |
Agricultural land, production and other loans to farmers | 640 |  |  | 562 |  |  | 3 |  |  | 589 |  |  | — |
Real estate loans: |  |  |  |  |  |  |  |  |
Commercial real estate, non-owner occupied | 44,016 |  |  | 43,715 |  |  | 11,686 |  |  | 44,119 |  |  | — |
Commercial real estate, owner occupied | 2,061 |  |  | 1,323 |  |  | 557 |  |  | 1,447 |  |  | — |
Residential | 2,041 |  |  | 2,014 |  |  | 352 |  |  | 2,108 |  |  | 70 |
Home equity | 487 |  |  | 461 |  |  | 80 |  |  | 473 |  |  | 14 |
Total | $ | 49,513 |  |  | $ | 48,343 |  |  | $ | 12,901 |  |  | $ | 49,003 |  |  | $ | 84 |
Total Impaired Loans | $ | 58,614 |  |  | $ | 56,156 |  |  | $ | 12,901 |  |  | $ | 57,116 |  |  | $ | 232 |
| December 31, 2019
| Unpaid Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment |  | Interest Income Recognized
Impaired loans with no related allowance: |  |  |  |  |  |  |  |  |
Commercial and industrial loans | $ | 320 |  |  | $ | 320 |  |  | $ | — |  |  | $ | 320 |  |  | $ | — |
Agricultural land, production and other loans to farmers | 752 |  |  | 381 |  |  | — |  |  | 542 |  |  | — |
Real estate loans: |  |  |  |  |  |  |  |  |
Construction | 1,206 |  |  | 970 |  |  | — |  |  | 1,229 |  |  | — |
Commercial real estate, non-owner occupied | 6,202 |  |  | 5,299 |  |  |  |  | 5,399 |  |  | 156 |
Commercial real estate, owner occupied | 1,382 |  |  | 306 |  |  | — |  |  | 357 |  |  | — |
Residential | 93 |  |  | 76 |  |  | — |  |  | 77 |  |  | 3 |
Total | $ | 9,955 |  |  | $ | 7,352 |  |  | $ | — |  |  | $ | 7,924 |  |  | $ | 159 |
Impaired loans with related allowance: |  |  |  |  |  |  |  |  |
Agricultural land, production and other loans to farmers | $ | 588 |  |  | $ | 585 |  |  | $ | 107 |  |  | $ | 585 |  |  | $ | — |
Real estate loans: |  |  |  |  |  |  |  |  |
Commercial real estate, owner occupied | 2,060 |  |  | 1,324 |  |  | 124 |  |  | 1,324 |  |  | — |
Residential | 2,070 |  |  | 2,044 |  |  | 383 |  |  | 2,083 |  |  | 63 |
Home equity | 417 |  |  | 400 |  |  | 75 |  |  | 409 |  |  | 12 |
Individuals' loans for household and other personal expenditures | 4 |  |  | 4 |  |  | — |  |  | 4 |  |  | — |
Total | $ | 5,139 |  |  | $ | 4,357 |  |  | $ | 689 |  |  | $ | 4,405 |  |  | $ | 75 |
Total Impaired Loans | $ | 15,094 |  |  | $ | 11,709 |  |  | $ | 689 |  |  | $ | 12,329 |  |  | $ | 234 |
| December 31, 2018
| Unpaid Principal Balance |  | Recorded Investment |  | Related Allowance |  | Average Recorded Investment |  | Interest Income Recognized
Impaired loans with no related allowance: |  |  |  |  |  |  |  |  |
Commercial and industrial loans | $ | 828 |  |  | $ | 806 |  |  | $ | — |  |  | $ | 833 |  |  | $ | — |
Agricultural land, production and other loans to farmers | 679 |  |  | 679 |  |  | — |  |  | 1,213 |  |  | — |
Real estate loans: |  |  |  |  |  |  |  |  |
Construction | 1,352 |  |  | 614 |  |  | — |  |  | 835 |  |  | — |
Commercial real estate, non-owner occupied | 7,795 |  |  | 6,891 |  |  | — |  |  | 10,239 |  |  | — |
Commercial real estate, owner occupied | 3,381 |  |  | 2,103 |  |  |  |  | 2,202 |  |  | 165 |
Residential | 118 |  |  | 100 |  |  | — |  |  | 101 |  |  | 3 |
Home equity | 49 |  |  | 48 |  |  | — |  |  | 48 |  |  | — |
Public finance and other commercial loans | 353 |  |  | 353 |  |  | — |  |  | 353 |  |  | — |
Total | $ | 14,555 |  |  | $ | 11,594 |  |  | $ | — |  |  | $ | 15,824 |  |  | $ | 168 |
Impaired loans with related allowance: |  |  |  |  |  |  |  |  |
Real estate loans: |  |  |  |  |  |  |  |  |
Construction | $ | 7,978 |  |  | $ | 7,977 |  |  | $ | 1,429 |  |  | $ | 7,977 |  |  | $ | — |
Commercial real estate, owner occupied | 171 |  |  | 171 |  |  | 6 |  |  | 171 |  |  |
Residential | 1,958 |  |  | 1,907 |  |  | 362 |  |  | 1,915 |  |  | 57 |
Home equity | 376 |  |  | 358 |  |  | 74 |  |  | 365 |  |  | 10 |
Individuals' loans for household and other personal expenditures | 18 |  |  | 18 |  |  | 1 |  |  | 20 |  |  | 1 |
Total | $ | 10,501 |  |  | $ | 10,431 |  |  | $ | 1,872 |  |  | $ | 10,448 |  |  | $ | 68 |
Total Impaired Loans | $ | 25,056 |  |  | $ | 22,025 |  |  | $ | 1,872 |  |  | $ | 26,272 |  |  | $ | 236 |
Impaired loans in the above tables do not include loans accounted for under ASC 310-30, or any other loan, unless deemed impaired in accordance with ASC 310-10. As part of the ongoing monitoring of the credit quality of the Corporation's loan portfolio, management tracks certain credit quality indicators including trends related to: (i) the level of criticized commercial loans, (ii) net charge-offs, (iii) non-performing loans, (iv) covenant failures and (v) the general national and local economic conditions. The Corporation utilizes a risk grading of pass, special mention, substandard, doubtful and loss to assess the overall credit quality of large commercial loans. All large commercial credit grades are reviewed at a minimum of once a year for pass grade loans. Loans with grades below pass are reviewed more frequently depending on the grade. A description of the general characteristics of these grades is as follows: •Pass - Loans that are considered to be of acceptable credit quality. •Special Mention - Loans which have a potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification. •Substandard - Loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. •Doubtful - Loans will have all the weaknesses inherent in those classified Substandard with the added characteristics that the weakness make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. •Loss – Loans are considered uncollectible and of such little value that their continuation as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future. The following tables summarize the credit quality of the Corporation’s loan portfolio, by loan class for the years indicated. Consumer non-performing loans include accruing consumer loans 90-days or more delinquent and consumer non-accrual loans. The entire balance of a loan is considered delinquent if the minimum payment contractually required to be made is not received by the specified date. Loans that evidenced deterioration of credit quality since origination and the probability, at acquisition, that all contractually required payments would not be collected are included in the applicable categories below.
| December 31, 2020
| Commercial Pass |  | Commercial Special Mention |  | Commercial Substandard |  | Commercial Doubtful |  | Commercial Loss |  | Consumer Performing |  | Consumer Non Performing |  | Total
Commercial and industrial loans | $ | 2,562,077 |  |  | $ | 117,503 |  |  | $ | 97,119 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,776,699 |
Agricultural land, production and other loans to farmers | 243,991 |  |  | 26,835 |  |  | 9,885 |  |  | — |  |  | — |  |  | 1,173 |  |  | — |  |  | 281,884 |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction | 446,846 |  |  | 10,445 |  |  | 5,549 |  |  | — |  |  | — |  |  | 21,763 |  |  | 120 |  |  | 484,723 |
Commercial real estate, non-owner occupied | 1,979,827 |  |  | 160,304 |  |  | 80,818 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,220,949 |
Commercial real estate, owner occupied | 907,566 |  |  | 17,641 |  |  | 33,294 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 958,501 |
Residential | 199,338 |  |  | 2,261 |  |  | 7,058 |  |  | — |  |  | — |  |  | 1,020,687 |  |  | 5,397 |  |  | 1,234,741 |
Home equity | 12,714 |  |  | — |  |  | 989 |  |  | — |  |  | — |  |  | 492,999 |  |  | 1,557 |  |  | 508,259 |
Individuals' loans for household and other personal expenditures | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 129,440 |  |  | 39 |  |  | 129,479 |
Public finance and other commercial loans | 647,939 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 647,939 |
Loans | $ | 7,000,298 |  |  | $ | 334,989 |  |  | $ | 234,712 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,666,062 |  |  | $ | 7,113 |  |  | $ | 9,243,174 |
| December 31, 2019
| Commercial Pass |  | Commercial Special Mention |  | Commercial Substandard |  | Commercial Doubtful |  | Commercial Loss |  | Consumer Performing |  | Consumer Non Performing |  | Total
Commercial and industrial loans | $ | 1,956,985 |  |  | $ | 81,179 |  |  | $ | 71,715 |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |  |  | $ | 2,109,879 |
Agricultural land, production and other loans to farmers | 291,790 |  |  | 11,008 |  |  | 29,393 |  |  | — |  |  | — |  |  | 1,981 |  |  | — |  |  | 334,172 |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction | 749,249 |  |  | 1,613 |  |  | 1,634 |  |  | — |  |  | — |  |  | 35,072 |  |  | — |  |  | 787,568 |
Commercial real estate, non-owner occupied | 1,814,187 |  |  | 38,366 |  |  | 50,139 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,902,692 |
Commercial real estate, owner occupied | 866,947 |  |  | 14,028 |  |  | 28,720 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 909,695 |
Residential | 196,710 |  |  | 877 |  |  | 8,075 |  |  | — |  |  | — |  |  | 932,743 |  |  | 4,812 |  |  | 1,143,217 |
Home equity | 24,211 |  |  | 257 |  |  | 682 |  |  | — |  |  | — |  |  | 562,507 |  |  | 1,327 |  |  | 588,984 |
Individuals' loans for household and other personal expenditures | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 135,944 |  |  | 45 |  |  | 135,989 |
Public finance and other commercial loans | 547,114 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 547,114 |
Loans | $ | 6,447,193 |  |  | $ | 147,328 |  |  | $ | 190,358 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,668,247 |  |  | $ | 6,184 |  |  | $ | 8,459,310 |
The tables below show a past due aging of the Corporation’s loan portfolio, by loan class, for the years indicated:
| December 31, 2020 |  |
| Current |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or More Past Due |  |  |  | Total Past Due |  | Total |  | Past due 90+ days and still accruing
Commercial and industrial loans | $ | 2,761,473 |  |  | $ | 5,866 |  |  | $ | 6,571 |  |  | $ | 2,789 |  |  |  |  | $ | 15,226 |  |  | $ | 2,776,699 |  |  | $ | 594 |
Agricultural land, production and other loans to farmers | 280,615 |  |  | 146 |  |  | 226 |  |  | 897 |  |  |  |  | 1,269 |  |  | 281,884 |  |  | — |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction | 484,706 |  |  | — |  |  | 17 |  |  | — |  |  |  |  | 17 |  |  | 484,723 |  |  | — |
Commercial real estate, non-owner occupied | 2,184,681 |  |  | 2,525 |  |  | 2,109 |  |  | 31,634 |  |  |  |  | 36,268 |  |  | 2,220,949 |  |  | — |
Commercial real estate, owner occupied | 951,561 |  |  | 4,854 |  |  | 180 |  |  | 1,906 |  |  |  |  | 6,940 |  |  | 958,501 |  |  | — |
Residential | 1,226,779 |  |  | 3,269 |  |  | 1,429 |  |  | 3,264 |  |  |  |  | 7,962 |  |  | 1,234,741 |  |  | 133 |
Home equity | 503,596 |  |  | 2,644 |  |  | 559 |  |  | 1,460 |  |  |  |  | 4,663 |  |  | 508,259 |  |  | 19 |
Individuals' loans for household and other personal expenditures | 129,049 |  |  | 334 |  |  | 96 |  |  | — |  |  |  |  | 430 |  |  | 129,479 |  |  | — |
Public finance and other commercial loans | 647,939 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 647,939 |  |  | — |
Loans | $ | 9,170,399 |  |  | $ | 19,638 |  |  | $ | 11,187 |  |  | $ | 41,950 |  |  |  |  | $ | 72,775 |  |  | $ | 9,243,174 |  |  | $ | 746 |
| December 31, 2019 |  |
| Current |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or More Past Due |  |  |  | Total Past Due |  | Total |  | Past due 90+ days and still accruing
Commercial and industrial loans | $ | 2,105,757 |  |  | $ | 3,086 |  |  | $ | 154 |  |  | $ | 882 |  |  |  |  | $ | 4,122 |  |  | $ | 2,109,879 |  |  | $ | 4 |
Agricultural land, production and other loans to farmers | 333,012 |  |  | 46 |  |  | 64 |  |  | 1,050 |  |  |  |  | 1,160 |  |  | 334,172 |  |  | — |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction | 785,936 |  |  | 1,632 |  |  | — |  |  | — |  |  |  |  | 1,632 |  |  | 787,568 |  |  | — |
Commercial real estate, non-owner occupied | 1,899,190 |  |  | 1,348 |  |  | 544 |  |  | 1,610 |  |  |  |  | 3,502 |  |  | 1,902,692 |  |  | — |
Commercial real estate, owner occupied | 906,881 |  |  | 976 |  |  | 208 |  |  | 1,630 |  |  |  |  | 2,814 |  |  | 909,695 |  |  | — |
Residential | 1,134,650 |  |  | 4,976 |  |  | 1,279 |  |  | 2,312 |  |  |  |  | 8,567 |  |  | 1,143,217 |  |  | 22 |
Home equity | 584,506 |  |  | 3,083 |  |  | 611 |  |  | 784 |  |  |  |  | 4,478 |  |  | 588,984 |  |  | 42 |
Individuals' loans for household and other personal expenditures | 135,445 |  |  | 439 |  |  | 105 |  |  | — |  |  |  |  | 544 |  |  | 135,989 |  |  | 1 |
Public finance and other commercial loans | 547,114 |  |  | — |  |  | — |  |  | — |  |  |  |  | — |  |  | 547,114 |  |  | — |
Loans | $ | 8,432,491 |  |  | $ | 15,586 |  |  | $ | 2,965 |  |  | $ | 8,268 |  |  |  |  | $ | 26,819 |  |  | $ | 8,459,310 |  |  | $ | 69 |
On occasion, borrowers experience declines in income and cash flow. As a result, these borrowers seek to reduce contractual cash outlays including debt payments. Concurrently, in an effort to preserve and protect its earning assets, specifically troubled loans, the Corporation works to maintain its relationship with certain customers who are experiencing financial difficulty by contractually modifying the borrower's debt agreement with the Corporation. In certain loan restructuring situations, the Corporation may grant a concession to a debtor experiencing financial difficulty, resulting in a trouble debt restructuring. A concession is deemed to be granted when, as a result of the restructuring, the Corporation does not expect to collect all original amounts due, including interest accrued at the original contract rate. If the payment of principal at original maturity is primarily dependent on the value of collateral, the current value of the collateral is considered in determining whether the principal will be paid. The following tables summarize troubled debt restructures in the Corporation's loan portfolio that occurred during the periods ended December 31, 2020 and 2019:
| December 31, 2020
| Pre-Modification Recorded Balance |  | Post-Modification Recorded Balance |  | Number of Loans
Commercial and industrial loans | $ | 654 |  |  | $ | 654 |  |  | 3 |
Agricultural land, production and other loans to farmers | 458 |  |  | 458 |  |  | 1 |
Real estate loans: |  |  |  |  |
Construction | 113 |  |  | 123 |  |  | 1 |
Commercial real estate, owner occupied | 107 |  |  | 107 |  |  | 1 |
Residential | 2,730 |  |  | 2,780 |  |  | 38 |
Home equity | 332 |  |  | 332 |  |  | 3 |
Individuals' loans for household and other personal expenditures | 19 |  |  | 19 |  |  | 2 |
Total | $ | 4,413 |  |  | $ | 4,473 |  |  | 49 |
| December 31, 2019 |  |
| Pre-Modification Recorded Balance |  | Post-Modification Recorded Balance |  | Number of Loans |  |
Real estate loans: |  |  |  |  |  |  |
Residential | $ | 636 |  |  | $ | 629 |  |  | 11 |  |  |
Home equity | 56 |  |  | 61 |  |  | 2 |  |  |
Total | $ | 692 |  |  | $ | 690 |  |  | 13 |  |  |
The following tables summarize the recorded investment of troubled debt restructures as of December 31, 2020 and 2019, by modification type, that occurred during the years indicated:
| December 31, 2020
| Term Modification |  | Rate Modification |  | Combination |  | Total Modification
Commercial and industrial loans | $ | 585 |  |  | $ | — |  |  | $ | — |  |  | $ | 585 |
Real estate loans: |  |  |  |  |  |  |
Construction | — |  |  | — |  |  | 120 |  |  | 120 |
Commercial real estate, owner occupied | 103 |  |  | — |  |  | — |  |  | 103 |
Residential | 2,253 |  |  | 159 |  |  | 220 |  |  | 2,632 |
Home equity | 236 |  |  | 93 |  |  | — |  |  | 329 |
Individuals' loans for household and other personal expenditures | 16 |  |  | — |  |  | — |  |  | 16 |
Total | $ | 3,193 |  |  | $ | 252 |  |  | $ | 340 |  |  | $ | 3,785 |
| December 31, 2019
| Term Modification |  | Rate Modification |  | Combination |  | Total Modification
Real estate loans: |  |  |  |  |  |  |
Residential | $ | 95 |  |  | $ | 87 |  |  | $ | 432 |  |  | $ | 614 |
Home equity | — |  |  | — |  |  | 61 |  |  | 61 |
Total | $ | 95 |  |  | $ | 87 |  |  | $ | 493 |  |  | $ | 675 |
Loans secured by 1- 4 family residential real estate made up 70 percent of the post-modification balances of the troubled debt restructured loans that occurred during the twelve months ending December 31, 2020. The same classification made up 100 percent of the post-modification balance of the troubled debt restructured loans for the twelve months ending December 31, 2019. The following tables summarize troubled debt restructures that occurred during the twelve months ended December 31, 2020 and 2019, that subsequently defaulted during the period indicated and remained in default at period end. For purposes of this schedule, a loan is considered in default if it is 30-days or more past due.
| Twelve Months Ended December 31, 2020
| Number of Loans |  | Recorded Balance
Commercial and industrial loans | 2 |  |  | $ | 585 |
Real estate loans: |  |  |
Residential | 8 |  |  | 610 |
Home equity | 1 |  |  | 93 |
Total | 11 |  |  | $ | 1,288 |
| Twelve Months Ended December 31, 2019
| Number of Loans |  | Recorded Balance
Real estate loans: |  |  |
Residential | 1 |  |  | $ | 37 |
Total | 1 |  |  | $ | 37 |
For potential consumer loan restructures, impairment evaluation occurs prior to modification. Any subsequent impairment is addressed through the charge-off process or through a specific reserve. Consumer troubled debt restructures are generally included in the general historical allowance for loan loss at the post modification balance. Consumer non-accrual and delinquent troubled debt restructures are also considered in the calculation of the non-accrual and delinquency trend environmental allowance allocation. Consumer loans secured by residential real estate properties for which formal foreclosure proceedings are in process totaled $2.8 million and $1.0 million at December 31, 2020 and 2019, respectively. Commercial troubled debt restructured loans risk graded special mention, substandard, doubtful and loss are individually evaluated for impairment under ASC 310. Any resulting specific reserves are included in the allowance for loan losses. Commercial 30 - 89 day delinquent troubled debt restructures are included in the calculation of the delinquency trend environmental allowance allocation. With the exception of the acquired loans excluded from the allowance for loan losses, all commercial non-impaired loans, including non-accrual and 90-days or more delinquents, are included in the ASC 450 loss estimate.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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