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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY
 9 Months Ended
Sep. 30, 2021
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY  
ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY
The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2021 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.
The Company maintains an allowance for credit losses to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectable. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for credit losses is taken based on management’s ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.
The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision.
The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers’ ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default (“PD/LGD”) model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, TDR status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a default rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee’s Summary of Economic Projections, and other environmental factors based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover probable losses inherent in the loan portfolio.
Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate it should be evaluated on an individual basis. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) the sufficiency of the customer’s cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring.
Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. General
allocations of the allowance are determined by a historical loss rate based on the calculation of each pool’s probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool. The historical loss rates are supplemented with consideration of economic conditions and portfolio trends.
Due to the imprecise nature of estimating the allowance for credit losses, the Company’s allowance for credit losses includes an unallocated component. The unallocated component of the allowance for credit losses incorporates the Company’s judgmental determination of potential expected losses that may not be fully reflected in other allocations, including factors such as the level of classified credits, economic uncertainties, industry trends impacting specific portfolio segments, broad portfolio quality trends, and trends in the composition of the Company’s large commercial loan portfolio and related large dollar exposures to individual borrowers. As a practical expedient, the Company has elected to treat accrued interest the same way it is treated in the incurred loss model, wherein it is stated separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments will be reversed through interest income, which is consistent with current practice.
For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company’s position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability set up, which matches the current accounting conclusion in the incurred loss environment.
The following tables present the activity in the allowance for credit losses by portfolio segment for the three-month period ended September 30, 2021:
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multifamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
Three Months Ended September 30, 2021                
Beginning balance, July 1$33,130 $28,291 $3,930 $1,298 $3,165 $1,393 $506 $71,713 
Provision for credit losses3,507 (1,545)(244)89 (265)(116)(126)1,300 
Loans charged-off(5)0 0 0 (13)(72)0 (90)
Recoveries44 0 0 0 14 67 0 125 
Net loans (charged-off) recovered39 0 0 0 1 (5)0 35 
Ending balance$36,676 $26,746 $3,686 $1,387 $2,901 $1,272 $380 $73,048 
The following tables present the activity in the allowance for credit losses by portfolio segment for the nine-month period ended September 30, 2021:
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multifamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
Nine Months Ended September 30, 2021                
Beginning balance, January 1$28,333 $22,907 $3,043 $416 $2,619 $951 $3,139 $61,408 
Impact of adopting ASC 3264,312 4,316 1,060 941 953 349 (2,881)9,050 
Provision for credit losses2,780 (420)(737)30 (719)21 122 1,077 
Loans charged-off(254)(71)0 0 (51)(217)0 (593)
Recoveries1,505 14 320 0 99 168 0 2,106 
Net loans (charged-off) recovered1,251 (57)320 0 48 (49)0 1,513 
Ending balance$36,676 $26,746 $3,686 $1,387 $2,901 $1,272 $380 $73,048 
Credit Quality Indicators:
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 commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000.
The Company uses the following definitions for risk ratings:
Special Mention. Loans classified as Special Mention 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 classified 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 classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company 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 characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above with the exception of consumer troubled debt restructurings, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with “Not Rated” loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.
The following table summarizes the risk category of loans by loan segment and origination date as of September 30, 2021:
(dollars in thousands)20212020201920182017PriorTerm TotalRevolvingTotal
Commercial and industrial loans:                  
Working capital lines of credit loans:                  
Pass$8,755 $6,467 $11,643 $1,646 $834 $82 $29,427 $533,140 $562,567 
Special Mention0 0 0 0 0 0 0 64,240 64,240 
Substandard0 0 85 0 0 0 85 32,382 32,467 
Total8,755 6,467 11,728 1,646 834 82 29,512 629,762 659,274 
Non-working capital loans:
Pass184,286 172,825 87,892 68,814 23,713 20,548 558,078 163,413 721,491 
Special Mention17,614 0 630 1,112 2,466 1,185 23,007 2,426 25,433 
Substandard4,908 7,022 1,225 4,681 5,723 512 24,071 3,208 27,279 
Not Rated1,695 1,915 920 719 191 22 5,462 0 5,462 
Total208,503 181,762 90,667 75,326 32,093 22,267 610,618 169,047 779,665 
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass13,305 40,841 4,679 30,875 0 16,870 106,570 270,801 377,371 
Owner occupied loans:
Pass93,789 174,606 127,573 94,853 82,439 105,570 678,830 36,226 715,056 
Special Mention6,829 0 1,809 966 7,715 1,273 18,592 0 18,592 
Substandard506 1,946 929 2,101 707 408 6,597 0 6,597 
Total101,124 176,552 130,311 97,920 90,861 107,251 704,019 36,226 740,245 
Nonowner occupied loans:
Pass75,760 160,552 118,333 26,642 41,494 69,129 491,910 59,107 551,017 
Special Mention11,937 349 620 0 0 14,341 27,247 0 27,247 
Substandard0 0 0 3,354 0 0 3,354 0 3,354 
Total87,697 160,901 118,953 29,996 41,494 83,470 522,511 59,107 581,618 
Multifamily loans:
Pass79,260 53,500 36,784 14,372 14,688 18,696 217,300 12,997 230,297 
Special Mention0 0 0 0 22,252 0 22,252 0 22,252 
Total79,260 53,500 36,784 14,372 36,940 18,696 239,552 12,997 252,549 
Agri-business and agricultural loans:
Loans secured by farmland:
Pass35,548 37,854 17,533 13,327 9,841 19,776 133,879 12,345 146,224 
Special Mention0 1,985 2,336 0 190 30 4,541 938 5,479 
Substandard212 0 0 0 0 145 357 0 357 
Total35,760 39,839 19,869 13,327 10,031 19,951 138,777 13,283 152,060 
Loans for agricultural production:
Pass27,116 27,959 4,415 11,399 1,478 4,393 76,760 76,860 153,620 
Special Mention464 8,644 1,250 0 43 19 10,420 8,014 18,434 
Total27,580 36,603 5,665 11,399 1,521 4,412 87,180 84,874 172,054 
Other commercial loans:
Pass1,488 30,130 3,541 1,328 8,897 8,772 54,156 25,162 79,318 
Special Mention0 0 0 0 0 3,945 3,945 0 3,945 
Total1,488 30,130 3,541 1,328 8,897 12,717 58,101 25,162 83,263 
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans
Pass13,332 17,484 5,487 6,502 3,216 2,145 48,166 2,183 50,349 
Substandard0 0 0 0 0 1,821 1,821 0 1,821 
Not Rated35,165 28,684 10,088 7,868 9,343 29,513 120,661 562 121,223 
Total48,497 46,168 15,575 14,370 12,559 33,479 170,648 2,745 173,393 
Open end and junior lien loans
Pass193 379 162 317 0 0 1,051 10,733 11,784 
Substandard0 0 0 0 0 0 0 0 0 
Not Rated17,212 6,732 6,885 4,814 2,394 1,678 39,715 112,024 151,739 
Total17,405 7,111 7,047 5,131 2,394 1,678 40,766 122,757 163,523 
Residential construction loans
Not Rated7,164 2,842 982 140 173 1,177 12,478 13 12,491 
Other consumer loans
Pass584 1,181 1,579 0 1,253 0 4,597 22,084 26,681 
Substandard36 0 257 0 0 0 293 0 293 
Not Rated18,262 17,058 8,678 6,945 2,531 1,418 54,892 10,081 64,973 
Total18,882 18,239 10,514 6,945 3,784 1,418 59,782 32,165 91,947 
TOTAL$655,420 $800,955 $456,315 $302,775 $241,581 $323,468 $2,780,514 $1,458,939 $4,239,453 
As of September 30, 2021, $91.9 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the Small Business Administration (“SBA”).
Nonaccrual and Past Due Loans:
The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.
The following table presents the aging of the amortized cost basis in past due loans as of September 30, 2021 by class of loans and loans past due 90 days or more and still accruing by class of loan:
(dollars in thousands)Loans Not Past Due30-89 Days Past DueGreater than 89 Days Past Due and AccruingTotal AccruingTotal NonaccrualNonaccrual With No Allowance For Credit LossTotal
Commercial and industrial loans:            
Working capital lines of credit loans$659,160 $114 $0 $645,093 $14,181 $1 $659,274 
Non-working capital loans779,551 114 0 770,709 8,956 232 779,665 
Commercial real estate and multi-family residential loans:
Construction and land development loans377,371 0 0 377,371 0 0 377,371 
Owner occupied loans740,245 0 0 736,423 3,822 986 740,245 
Nonowner occupied loans581,618 0 0 578,260 3,358 0 581,618 
Multifamily loans252,549 0 0 252,549 0 0 252,549 
Agri-business and agricultural loans:
Loans secured by farmland152,060 0 0 151,915 145 0 152,060 
Loans for agricultural production172,054 0 0 172,054 0 0 172,054 
Other commercial loans83,263 0 0 83,263 0 0 83,263 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans172,515 860 18 173,293 100 56 173,393 
Open end and junior lien loans163,489 34 0 163,425 98 98 163,523 
Residential construction loans12,491 0 0 12,491 0 0 12,491 
Other consumer loans91,829 118 0 91,629 318 0 91,947 
Total$4,238,195 $1,240 $18 $4,208,475 $30,978 $1,373 $4,239,453 
As of September 30, 2021 there were no loans 30-89 days past due or greater than 89 days past due on nonaccrual. Additionally, interest income recognized on nonaccrual loans was insignificant during the nine month period ended September 30, 2021.
When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value.
The following table presents the amortized cost basis of collateral dependent loans by class of loan as of September 30, 2021:
(dollars in thousands)Real EstateGeneral
Business
 Assets		OtherTotal
Commercial and industrial loans:      
Working capital lines of credit loans$0 $14,181 $0 $14,181 
Non-working capital loans1,632 13,757 229 15,618 
Commercial real estate and multi-family residential loans:
Owner occupied loans1,456 1,675 1,161 4,292 
   Nonowner occupied loans3,358 0 0 3,358 
Agri-business and agricultural loans:
Loans secured by farmland0 145 0 145 
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans3,056 0 0 3,056 
Other consumer loans0 0 51 51 
Total9,502 29,758 1,441 40,701 
Troubled Debt Restructurings:
Troubled debt restructured loans are included in the totals for individually analyzed loans. The Company has allocated $6.1 million and $5.5 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of September 30, 2021 and December 31, 2020, respectively. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.
(dollars in thousands)September 30,
2021		December 31,
2020
Accruing troubled debt restructured loans$4,973 $5,237 
Nonaccrual troubled debt restructured loans6,093 6,476 
Total troubled debt restructured loans$11,066 $11,713 
During the three and nine months ended September 30, 2021, no loans were modified as troubled debt restructurings.
During the three months ended September 30, 2020, no loans were modified as troubled debt restructurings.
During the nine months ended September 30, 2020, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.
The following table presents loans by class modified as new troubled debt restructurings that occurred during the nine months ended September 30, 2020:
Modified Repayment Terms
(dollars in thousands)Number of LoansPre-Modification Outstanding Recorded InvestmentPost-Modification Outstanding Recorded InvestmentNumber of LoansExtension Period or Range (in months)
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans1 $250 $315 1 0
Non-working capital lines of credit loans2 4,288 3,691 2 0
Commercial real estate and multi-family residential loans:
Owner occupied loans1 1,528 1,527 1 0
Total4 $6,066 $5,533 4 0
For the nine month period ended September 30, 2020, the troubled debt restructurings described above increased the allowance for credit losses by $2.4 million, and charge-offs of $666,000 were recorded.
As of September 30, 2021, total deferrals attributed to COVID-19 were $22.3 million representing three borrowers. This represented 0.5% of the total loan portfolio. Two were commercial loan borrowers and there was one retail borrower with COVID-19 deferrals. Of the total commercial deferrals attributed to COVID-19, $8.0 million represented a second deferral action and $14.3 million represented a third deferral action. All COVID-19 related loan deferrals remain on accrual status, as each deferral is evaluated individually, and management has determined that all contractual cashflows are collectable at this time. In accordance with Section 4013 of the CARES Act, loan deferrals granted to customers that resulted from the impact of COVID-19 and who were not past due at December 31, 2019 were not considered troubled debt restructurings as of September 30, 2021. This provision was extended to January 1, 2022 under the Consolidated Appropriations Act, 2021. Management continues to monitor these deferrals and has adequately considered these credits in the September 30, 2021 allowance for credit losses balance.
Allowance for Loan Losses (Prior to January 1, 2021):
Prior to the adoption of ASC 326 on January 1, 2021 the Company calculated the allowance for loan losses using the incurred losses methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.
The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month period ended September 30, 2020:
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multfamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
Three Months Ended September 30, 2020
Beginning balance, July 1$26,744 $21,063 $3,408 $542 $3,434 $774 $3,054 $59,019 
Provision for credit losses1,574 175 (314)30 (50)237 98 1,750 
Loans charged-off(6)0 0 0 (70)(229)0 (305)
Recoveries51 177 3 0 4 48 0 283 
Net loans charged-off45 177 3 0 (66)(181)0 (22)
Ending balance$28,363 $21,415 $3,097 $572 $3,318 $830 $3,152 $60,747 
The following tables present the activity in the allowance for loan losses by portfolio segment for the nine-month period ended September 30, 2020:
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multfamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
Nine Months Ended September 30, 2020
Beginning balance, January 1$25,789 $15,796 $3,869 $447 $2,086 $345 $2,320 $50,652 
Provision for credit losses6,264 5,312 (780)125 1,298 799 832 13,850 
Loans charged-off(4,037)0 0 0 (83)(445)0 (4,565)
Recoveries347 307 8 0 17 131 0 810 
Net loans charged-off(3,690)307 8 0 (66)(314)0 (3,755)
Ending balance$28,363 $21,415 $3,097 $572 $3,318 $830 $3,152 $60,747 
The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020:
(dollars in thousands)Commercial and IndustrialCommercial Real Estate and Multfamily ResidentialAgri-business and AgriculturalOther CommercialConsumer 1-4 Family MortgageOther ConsumerUnallocatedTotal
December 31, 2020
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment$6,310 $1,377 $84 $0 $270 $0 $0 $8,041 
Collectively evaluated for impairment22,023 21,530 2,959 416 2,349 951 3,139 53,367 
Total ending allowance balance$28,333 $22,907 $3,043 $416 $2,619 $951 $3,139 $61,408 
Loans:
Loans individually evaluated for impairment$12,533 $5,518 $428 $0 $1,700 $0 $0 $20,179 
Loans collectively evaluated for impairment1,772,393 1,887,054 429,234 93,912 342,999 103,385 0 4,628,977 
Total ending loans balance$1,784,926 $1,892,572 $429,662 $93,912 $344,699 $103,385 $0 $4,649,156 
The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2020:

(dollars in thousands)Unpaid Principal BalanceRecorded InvestmentAllowance for Loan Losses Allocated
With no related allowance recorded:      
Commercial and industrial loans:      
Working capital lines of credit loans$346 $173 $0 
Non-working capital loans2,399 968 0 
Commercial real estate and multi-family residential loans:
Owner occupied loans3,002 2,930 0 
Agri-business and agricultural loans:
Loans secured by farmland603 283 0 
Consumer 1‑4 family loans:
Closed end first mortgage loans316 236 0 
Open end and junior lien loans5 5 0 
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans433 433 255 
Non-working capital loans11,644 10,959 6,055 
Commercial real estate and multi-family residential loans:
Owner occupied loans2,589 2,588 1,377 
Agri-business and agricultural loans:
Loans secured by farmland145 145 84 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans1,457 1,459 270 
Total$22,939 $20,179 $8,041 
The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended September 30, 2020:

(dollars in thousands)Average Recorded InvestmentInterest Income RecognizedCash Basis Interest Income Recognized
With no related allowance recorded:      
Commercial and industrial loans:      
Working capital lines of credit loans$174 $0 $0 
Non-working capital loans995 5 5 
Commercial real estate and multi-family residential loans:
Owner occupied loans2,054 4 4 
Agri-business and agricultural loans:
Loans secured by farmland283 0 0 
Consumer 1‑4 family loans:
Closed end first mortgage loans274 0 0 
Open end and junior lien loans54 0 0 
Residential construction loans8 0 0 
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans1,546 0 0 
Non-working capital loans11,970 63 63 
Commercial real estate and multi-family residential loans:
Owner occupied loans3,994 0 0 
Agri-business and agricultural loans:
Loans secured by farmland146 0 0 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans1,520 9 9 
Open end and junior lien loans648 0 0 
Residential construction loans35 0 0 
Total$23,701 $81 $81 
The following table presents loans individually evaluated for impairment by class of loans as of and for the nine-month period ended September 30, 2020:

(dollars in thousands)Average Recorded InvestmentInterest Income RecognizedCash Basis Interest Income Recognized
With no related allowance recorded:      
Commercial and industrial loans:      
Working capital lines of credit loans$442 $0 $0 
Non-working capital loans766 16 16 
Commercial real estate and multi-family residential loans:
Owner occupied loans2,101 13 13 
Agri-business and agricultural loans:
Loans secured by farmland283 0 0 
Consumer 1‑4 family loans:
Closed end first mortgage loans304 2 2 
Open end and junior lien loans63 0 0 
Residential construction loans3 0 0 
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans3,001 0 0 
Non-working capital loans11,763 216 216 
Commercial real estate and multi-family residential loans:
Owner occupied loans3,034 30 30 
Agri-business and agricultural loans:
Loans secured by farmland147 0 0 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans1,589 28 28 
Open end and junior lien loans642 0 0 
Residential construction loans46 0 0 
Total$24,184 $305 $305 
The following table presents the aging of the recorded investment in past due loans as of December 31, 2020 by class of loans:
(dollars in thousands)Loans Not
Past Due		30‑89
 Days Past Due		Greater than 90 Days Past DueNonaccrualTotal Past Due and NonaccrualTotal
Commercial and industrial loans:            
Working capital lines of credit loans$625,493 $0 $0 $606 $606 $626,099 
Non-working capital loans1,153,540 0 0 5,287 5,287 1,158,827 
Commercial real estate and multi-family residential loans:
Construction and land development loans361,664 0 0 0 0 361,664 
Owner occupied loans642,527 0 0 5,047 5,047 647,574 
Nonowner occupied loans579,050 0 0 0 0 579,050 
Multifamily loans304,284 0 0 0 0 304,284 
Agri-business and agricultural loans:
Loans secured by farmland194,935 0 0 428 428 195,363 
Loans for agricultural production234,191 108 0 0 108 234,299 
Other commercial loans93,912 0 0 0 0 93,912 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans165,895 877 116 613 1,606 167,501 
Open end and junior lien loans165,094 137 0 5 142 165,236 
Residential construction loans11,962 0 0 0 0 11,962 
Other consumer loans103,240 145 0 0 145 103,385 
Total$4,635,787 $1,267 $116 $11,986 $13,369 $4,649,156 
As of December 31, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:
(dollars in thousands)PassSpecial
Mention		SubstandardDoubtfulNot
Rated		Total
Commercial and industrial loans:            
Working capital lines of credit loans$535,071 $81,095 $9,718 $0 $215 $626,099 
Non-working capital loans1,111,989 26,523 14,820 0 5,495 1,158,827 
Commercial real estate and multi-family residential loans:
Construction and land development loans361,664 0 0 0 0 361,664 
Owner occupied loans608,845 31,355 7,374 0 0 647,574 
Nonowner occupied loans547,790 31,260 0 0 0 579,050 
Multi-family loans282,031 22,253 0 0 0 304,284 
Agri-business and agricultural loans:
Loans secured by farmland183,983 10,728 652 0 0 195,363 
Loans for agricultural production185,875 48,424 0 0 0 234,299 
Other commercial loans93,912 0 0 0 0 93,912 
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans40,682 0 1,695 0 125,124 167,501 
Open end and junior lien loans8,424 0 5 0 156,807 165,236 
Residential construction loans0 0 0 0 11,962 11,962 
Other consumer loans36,979 253 0 0 66,153 103,385 
Total$3,997,245 $251,891 $34,264 $0 $365,756 $4,649,156