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Note 4 - Loans/Leases Receivable | 12 Months Ended
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Dec. 31, 2019
Notes to Financial Statements |
Loans/Leases Receivable | Note 4. Loans/Leases Receivable The composition of the loan/lease portfolio as of December 31, 2019 and 2018 is presented as follows:
|  | 2019 |  | 2018
|  | (dollars in thousands)
C&I loans * |  | $ | 1,507,825 |  | $ | 1,429,410
CRE loans |  |  |  |  |  |
Owner-occupied CRE |  |  | 443,989 |  |  | 500,654
Commercial construction, land development, and other land |  |  | 378,797 |  |  | 236,787
Other non owner-occupied CRE |  |  | 913,610 |  |  | 1,028,670
|  |  | 1,736,396 |  |  | 1,766,111
Direct financing leases ** |  |  | 87,869 |  |  | 117,969
Residential real estate loans *** |  |  | 239,904 |  |  | 290,759
Installment and other consumer loans |  |  | 109,352 |  |  | 119,381
|  |  | 3,681,346 |  |  | 3,723,630
Plus deferred loan/lease origination costs, net of fees |  |  | 8,859 |  |  | 9,124
|  |  | 3,690,205 |  |  | 3,732,754
Less allowance |  |  | (36,001) |  |  | (39,847)
|  | $ | 3,654,204 |  | $ | 3,692,907
** Direct financing leases: |  |  |  |  |  |
Net minimum lease payments to be received |  | $ | 97,025 |  | $ | 130,371
Estimated unguaranteed residual values of leased assets |  |  | 547 |  |  | 828
Unearned lease/residual income |  |  | (9,703) |  |  | (13,230)
|  |  | 87,869 |  |  | 117,969
Plus deferred lease origination costs, net of fees |  |  | 1,892 |  |  | 3,642
|  |  | 89,761 |  |  | 121,611
Less allowance |  |  | (1,464) |  |  | (1,792)
|  | $ | 88,297 |  | $ | 119,819
* Includes equipme nt financing agreements outstanding at m2, totaling $142.0 million and $103.4 million as of December 31, 2019 and 2018, respectively. **Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum. The evaluation consists of discussions with reputable and current vendors and management’s expertise and understanding of the current states of particular industries to determine informal valuations of the equipment. As necessary and where available, management will utilize valuations by independent appraisers. The large majority of leases with residual values contain a lease options rider which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value. In these cases, the residual value is protected and the risk of loss is minimal. At December 31, 2019, the Company had six leases remaining with residual values totaling $547 thousand that were not protected with a lease end options rider. At December 31, 2018, the Company had nine leases remaining with residual values totaling approximately $828 thousand that were not protected with a lease end options rider. Management has performed specific evaluations of these unguaranteed residual values and determined that the valuations are appropriate. There were no losses related to unguaranteed residual values during the years ended December 31, 2019, 2018, and 2017. ***Includes residential real estate loans held for sale totaling $3.7 million and $1.3 million as of December 31, 2019 and 2018, respectively. Note 4. Loans/Leases Receivable (continued) Changes in accretable yield for the loans acquired in the mergers and acquisitions are as follows:
|  | For the year ended December 31, 2019
|  | PCI |  | Performing |  |  |
|  | Loans |  | Loans |  | Total
|  | (dollars in thousands)
Balance at the beginning of the period |  | $ | (667) |  | $ | (10,127) |  | $ | (10,794)
Reclassification of nonaccretable discount to accretable |  |  | (275) |  |  | — |  |  | (275)
Accretion recognized |  |  | 885 |  |  | 3,749 |  |  | 4,634
Balance at the end of the period |  | $ | (57) |  | $ | (6,378) |  | $ | (6,435)
|  | For the year ended December 31, 2018
|  | PCI |  | Performing |  |  |
|  | Loans |  | Loans |  | Total
|  | (dollars in thousands)
Balance at the beginning of the period |  | $ | (191) |  | $ | (6,280) |  | $ | (6,471)
Discount added at acquisition |  |  | (293) |  |  | (7,800) |  |  | (8,093)
Reclassification of nonaccretable discount to accretable |  |  | (892) |  |  | (470) |  |  | (1,362)
Accretion recognized |  |  | 709 |  |  | 4,423 |  |  | 5,132
Balance at the end of the period |  | $ | (667) |  | $ | (10,127) |  | $ | (10,794)
|  | For the year ended December 31, 2017
|  | PCI |  | Performing |  |  |
|  | Loans |  | Loans |  | Total
|  | (dollars in thousands)
Balance at the beginning of the period |  | $ | (194) |  | $ | (9,116) |  | $ | (9,310)
Discount added at acquisition |  |  | (220) |  |  | (2,224) |  |  | (2,444)
Accretion recognized |  |  | 223 |  |  | 5,060 |  |  | 5,283
Balance at the end of the period |  | $ | (191) |  | $ | (6,280) |  | $ | (6,471)
Note 4. Loans/Leases Receivable (continued) The aging of the loan/lease portfolio by classes of loans/leases as of December 31, 2019 and 2018 is presented as follows:
|  | 2019 |
|  |  |  |  |  |  |  | Accruing Past |  |  |  |  |
|  |  |  | 30-59 Days |  | 60-89 Days |  | Due 90 Days or |  | Nonaccrual |  |  |
Classes of Loans/Leases |  | Current |  | Past Due |  | Past Due |  | More |  | Loans/Leases |  | Total |
|  | (dollars in thousands) |
C&I |  | $ | 1,499,891 |  | $ | 6,126 |  | $ | 572 |  | $ | — |  | $ | 1,236 |  | $ | 1,507,825 |
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 443,707 |  |  | 177 |  |  | 71 |  |  | — |  |  | 34 |  |  | 443,989 |
Commercial Construction, Land Development, and Other Land |  |  | 375,940 |  |  | 2,857 |  |  | — |  |  | — |  |  | — |  |  | 378,797 |
Other Non Owner-Occupied CRE |  |  | 909,684 |  |  | 73 |  |  | — |  |  | — |  |  | 3,853 |  |  | 913,610 |
Direct Financing Leases |  |  | 85,636 |  |  | 463 |  |  | 253 |  |  | — |  |  | 1,517 |  |  | 87,869 |
Residential Real Estate |  |  | 235,845 |  |  | 2,939 |  |  | 414 |  |  | — |  |  | 706 |  |  | 239,904 |
Installment and Other Consumer |  |  | 108,750 |  |  | 3 |  |  | 10 |  |  | 33 |  |  | 556 |  |  | 109,352 |
|  | $ | 3,659,453 |  | $ | 12,638 |  | $ | 1,320 |  | $ | 33 |  | $ | 7,902 |  | $ | 3,681,346 |
As a percentage of total loan/lease portfolio |  |  | 99.41 | % |  | 0.34 | % |  | 0.04 | % |  | 0.00 | % |  | 0.21 | % |  | 100.00 | %
|  | 2018 |
|  |  |  |  |  |  |  | Accruing Past |  |  |  |  |
|  |  |  | 30-59 Days |  | 60-89 Days |  | Due 90 Days or |  | Nonaccrual |  |  |
Classes of Loans/Leases |  | Current |  | Past Due |  | Past Due |  | More |  | Loans/Leases |  | Total |
|  | (dollars in thousands) |
C&I |  | $ | 1,423,406 |  | $ | 930 |  | $ | 597 |  | $ | 389 |  | $ | 4,088 |  | $ | 1,429,410 |
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 500,138 |  |  | — |  |  | 193 |  |  | 107 |  |  | 216 |  |  | 500,654 |
Commercial Construction, Land Development, and Other Land |  |  | 234,704 |  |  | 1,764 |  |  | — |  |  | — |  |  | 319 |  |  | 236,787 |
Other Non Owner-Occupied CRE |  |  | 1,022,664 |  |  | 484 |  |  | — |  |  | — |  |  | 5,522 |  |  | 1,028,670 |
Direct Financing Leases |  |  | 114,078 |  |  | 1,642 |  |  | 488 |  |  | — |  |  | 1,761 |  |  | 117,969 |
Residential Real Estate |  |  | 284,844 |  |  | 3,877 |  |  | 206 |  |  | 89 |  |  | 1,743 |  |  | 290,759 |
Installment and Other Consumer |  |  | 118,343 |  |  | 356 |  |  | 24 |  |  | 47 |  |  | 611 |  |  | 119,381 |
|  | $ | 3,698,177 |  | $ | 9,053 |  | $ | 1,508 |  | $ | 632 |  | $ | 14,260 |  | $ | 3,723,630 |
As a percentage of total loan/lease portfolio |  |  | 99.32 | % |  | 0.24 | % |  | 0.04 | % |  | 0.02 | % |  | 0.38 | % |  | 100.00 | %
Note 4. Loans/Leases Receivable (continued) NPLs by classes of loans/leases as of December 31, 2019 and 2018 is presented as follows:
|  | 2019 |
|  | Accruing Past |  |  |  |  |  |  |  |  |
|  | Due 90 Days or |  | Nonaccrual |  |  |  |  |  | Percentage of |
Classes of Loans/Leases |  | More |  | Loans/Leases* |  | Accruing TDRs |  | Total NPLs |  | Total NPLs |
|  | (dollars in thousands) |
C&I |  | $ | — |  | $ | 1,236 |  | $ | 646 |  | $ | 1,882 |  | 21.12 | %
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | — |  |  | 34 |  |  | — |  |  | 34 |  | 0.38 | %
Commercial Construction, Land Development, and Other Land |  |  | — |  |  | — |  |  | — |  |  | — |  | - | %
Other Non Owner-Occupied CRE |  |  | — |  |  | 3,853 |  |  | — |  |  | 3,853 |  | 43.22 | %
Direct Financing Leases |  |  | — |  |  | 1,517 |  |  | 333 |  |  | 1,850 |  | 20.75 | %
Residential Real Estate |  |  | — |  |  | 706 |  |  | — |  |  | 706 |  | 7.92 | %
Installment and Other Consumer |  |  | 33 |  |  | 556 |  |  | — |  |  | 589 |  | 6.61 | %
|  | $ | 33 |  | $ | 7,902 |  | $ | 979 |  | $ | 8,914 |  | 100.00 | %
* At December 31, 2019, nonaccrual loans/leases included $747 thousand of TDRs, including $98 thousand in C&I loans, $269 thousand in CRE loans, $294 t housand in direct financing leases, $31 thousand in residential real estate loans, and $55 thousand in installment loans.
|  | 2018 |
|  | Accruing Past |  |  |  |  |  |  |  |  |
|  | Due 90 Days or |  | Nonaccrual |  |  |  |  |  | Percentage of |
Classes of Loans/Leases |  | More* |  | Loans/Leases ** |  | Accruing TDRs * |  | Total NPLs |  | Total NPLs |
|  |  | (dollars in thousands)
C&I |  | $ | 389 |  | $ | 4,088 |  | $ | 454 |  | $ | 4,931 |  | 26.58 | %
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 107 |  |  | 216 |  |  | — |  |  | 323 |  | 1.74 | %
Commercial Construction, Land Development, and Other Land |  |  | — |  |  | 319 |  |  | — |  |  | 319 |  | 1.72 | %
Other Non Owner-Occupied CRE |  |  | — |  |  | 5,522 |  |  | 2,985 |  |  | 8,507 |  | 45.86 | %
Direct Financing Leases |  |  | — |  |  | 1,761 |  |  | 111 |  |  | 1,872 |  | 10.09 | %
Residential Real Estate |  |  | 89 |  |  | 1,743 |  |  | 100 |  |  | 1,932 |  | 10.41 | %
Installment and Other Consumer |  |  | 47 |  |  | 611 |  |  | 9 |  |  | 667 |  | 3.60 | %
|  | $ | 632 |  | $ | 14,260 |  | $ | 3,659 |  | $ | 18,551 |  | 100.00 | %
* At December 31, 2018 accruing past due 90 days or more included $496 thousand of TDRs, including $389 thousand in C&I loans and $107 thousand in CRE loans. ** At December 31, 2018, nonaccrual loans/leases included $2.3 million of TDRs, including $265 thousand in C&I loans, $1.4 million in CRE loans, $321 thousand in direct financing leases, $344 thousand in residential real estate loans, and $3 thousand in installment loans. Note 4. Loans/Leases Receivable (continued) Changes in the allowance by portfolio segment for the years ended December 31, 2019, 2018, and 2017 are presented as follows:
|  | Year Ended December 31, 2019 |
|  |  |  |  |  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |  |
|  | C&I |  | CRE |  | Leases |  | Estate |  | Other Consumer |  | Total |
|  | (dollars in thousands) |
Balance, beginning |  | $ | 16,420 |  | $ | 17,719 |  | $ | 1,792 |  | $ | 2,557 |  | $ | 1,359 |  | $ | 39,847 |
Reclassification of allowance related to held for sale loans |  |  | (2,814) |  |  | (2,392) |  |  | — |  |  | (628) |  |  | (288) |  |  | (6,122) |
Provisions charged to expense * |  |  | 3,666 |  |  | 1,566 |  |  | 1,129 |  |  | 163 |  |  | 114 |  |  | 6,638 |
Loans/leases charged off |  |  | (1,476) |  |  | (1,722) |  |  | (1,647) |  |  | (191) |  |  | (98) |  |  | (5,134) |
Recoveries on loans/leases previously charged off |  |  | 276 |  |  | 208 |  |  | 190 |  |  | 47 |  |  | 51 |  |  | 772 |
Balance, ending |  | $ | 16,072 |  | $ | 15,379 |  | $ | 1,464 |  | $ | 1,948 |  | $ | 1,138 |  | $ | 36,001 |
*Excludes provision related to loans included in assets held for sale during the year of $428 thousand for the year ending December 31, 2019.
|  | Year Ended December 31, 2018 |
|  |  |  |  |  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |  |
|  | C&I |  | CRE |  | Leases |  | Estate |  | Other Consumer |  | Total |
|  | (dollars in thousands) |
Balance, beginning |  | $ | 14,323 |  | $ | 13,963 |  | $ | 2,382 |  | $ | 2,466 |  | $ | 1,222 |  | $ | 34,356 |
Provisions charged to expense |  |  | 7,161 |  |  | 4,094 |  |  | 1,068 |  |  | 193 |  |  | 142 |  |  | 12,658 |
Loans/leases charged off |  |  | (5,359) |  |  | (387) |  |  | (2,002) |  |  | (127) |  |  | (44) |  |  | (7,919) |
Recoveries on loans/leases previously charged off |  |  | 295 |  |  | 49 |  |  | 344 |  |  | 25 |  |  | 39 |  |  | 752 |
Balance, ending |  | $ | 16,420 |  | $ | 17,719 |  | $ | 1,792 |  | $ | 2,557 |  | $ | 1,359 |  | $ | 39,847 |
|  | Year Ended December 31, 2017
|  |  |  |  |  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |
|  | C&I |  | CRE |  | Leases |  | Estate |  | Other Consumer |  | Total
|  | (dollars in thousands)
Balance, beginning |  | $ | 12,545 |  | $ | 11,671 |  | $ | 3,112 |  | $ | 2,342 |  | $ | 1,087 |  | $ | 30,757
Provisions charged to expense |  |  | 2,736 |  |  | 4,044 |  |  | 1,370 |  |  | 197 |  |  | 123 |  |  | 8,470
Loans/leases charged off |  |  | (1,150) |  |  | (1,795) |  |  | (2,285) |  |  | (102) |  |  | (41) |  |  | (5,373)
Recoveries on loans/leases previously charged off |  |  | 192 |  |  | 43 |  |  | 185 |  |  | 29 |  |  | 53 |  |  | 502
Balance, ending |  | $ | 14,323 |  | $ | 13,963 |  | $ | 2,382 |  | $ | 2,466 |  | $ | 1,222 |  | $ | 34,356
Note 4. Loans/Leases Receivable (continued): The allowance by impairment evaluation and by portfolio segment as of December 31, 2019 and 2018 is presented as follows:
|  | 2019 |
|  |  |  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |
|  | C&I |  | CRE |  | Leases |  | Estate |  | Other Consumer |  | Total |
|  | (dollars in thousands) |
Allowance for impaired loans/leases |  | $ | 170 |  | $ | 125 |  | $ | 270 |  | $ | 15 |  | $ | 80 |  | $ | 660 |
Allowance for nonimpaired loans/leases |  |  | 15,902 |  |  | 15,254 |  |  | 1,194 |  |  | 1,933 |  |  | 1,058 |  |  | 35,341 |
|  | $ | 16,072 |  | $ | 15,379 |  | $ | 1,464 |  | $ | 1,948 |  | $ | 1,138 |  | $ | 36,001 |
Impaired loans/leases |  | $ | 1,846 |  | $ | 3,585 |  | $ | 2,025 |  | $ | 649 |  | $ | 556 |  | $ | 8,661 |
Nonimpaired loans/leases |  |  | 1,505,979 |  |  | 1,732,811 |  |  | 85,844 |  |  | 239,255 |  |  | 108,796 |  |  | 3,672,685 |
|  | $ | 1,507,825 |  | $ | 1,736,396 |  | $ | 87,869 |  | $ | 239,904 |  | $ | 109,352 |  | $ | 3,681,346 |
Allowance as a percentage of impaired loans/leases |  |  | 9.21 | % |  | 3.49 | % |  | 13.33 | % |  | 2.31 | % |  | 14.39 | % |  | 7.62 | %
Allowance as a percentage of nonimpaired loans/leases |  |  | 1.06 | % |  | 0.88 | % |  | 1.39 | % |  | 0.81 | % |  | 0.97 | % |  | 0.96 | %
Total allowance as a percentage of total loans/leases |  |  | 1.07 | % |  | 0.89 | % |  | 1.67 | % |  | 0.81 | % |  | 1.04 | % |  | 0.98 | %
|  | 2018 |
|  |  |  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |
|  | C&I |  | CRE |  | Leases |  | Estate |  | Other Consumer |  | Total |
|  | (dollars in thousands) |
Allowance for impaired loans/leases |  | $ | 973 |  | $ | 2,124 |  | $ | 194 |  | $ | 257 |  | $ | 111 |  | $ | 3,659 |
Allowance for nonimpaired loans/leases |  |  | 15,447 |  |  | 15,595 |  |  | 1,598 |  |  | 2,300 |  |  | 1,248 |  |  | 36,188 |
|  | $ | 16,420 |  | $ | 17,719 |  | $ | 1,792 |  | $ | 2,557 |  | $ | 1,359 |  | $ | 39,847 |
Impaired loans/leases |  | $ | 4,499 |  | $ | 10,447 |  | $ | 2,249 |  | $ | 2,110 |  | $ | 898 |  | $ | 20,203 |
Nonimpaired loans/leases |  |  | 1,424,911 |  |  | 1,755,664 |  |  | 115,720 |  |  | 288,649 |  |  | 118,483 |  |  | 3,703,427 |
|  | $ | 1,429,410 |  | $ | 1,766,111 |  | $ | 117,969 |  | $ | 290,759 |  | $ | 119,381 |  | $ | 3,723,630 |
Allowance as a percentage of impaired loans/leases |  |  | 21.62 | % |  | 20.33 | % |  | 8.63 | % |  | 12.18 | % |  | 12.38 | % |  | 18.11 | %
Allowance as a percentage of nonimpaired loans/leases |  |  | 1.08 | % |  | 0.89 | % |  | 1.38 | % |  | 0.80 | % |  | 1.05 | % |  | 0.98 | %
Total allowance as a percentage of total loans/leases |  |  | 1.15 | % |  | 1.00 | % |  | 1.52 | % |  | 0.88 | % |  | 1.14 | % |  | 1.07 | %
Note 4. Loans/Leases Receivable (continued) Loans/leases, by classes of financing receivable, considered to be impaired as of and for the years ended December 31, 2019, 2018, and 2017 are presented below. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan/lease. The unpaid principal balance represents the recorded balance outstanding on the loan/lease prior to any partial charge-offs.
|  | 2019
|  |  |  |  |  |  |  |  |  |  |  | Interest Income
|  |  |  |  |  |  |  |  |  |  | Average |  |  |  |  | Recognized for
|  | Recorded |  | Unpaid Principal |  | Related |  | Recorded |  | Interest Income |  | Cash Payments
Classes of Loans/Leases |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized |  | Received
|  | (dollars in thousands)
Impaired Loans/Leases with No Specific Allowance Recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 1,607 |  | $ | 1,647 |  | $ | — |  | $ | 970 |  | $ | 27 |  | $ | 27
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 34 |  |  | 50 |  |  | — |  |  | 24 |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 684 |  |  | 686 |  |  | — |  |  | 738 |  |  | 29 |  |  | 29
Direct Financing Leases |  |  | 1,642 |  |  | 1,642 |  |  | — |  |  | 1,322 |  |  | 30 |  |  | 30
Residential Real Estate |  |  | 469 |  |  | 614 |  |  | — |  |  | 481 |  |  | — |  |  | —
Installment and Other Consumer |  |  | 476 |  |  | 476 |  |  | — |  |  | 474 |  |  | — |  |  | —
|  | $ | 4,912 |  | $ | 5,115 |  | $ | — |  | $ | 4,009 |  | $ | 86 |  | $ | 86
Impaired Loans/Leases with Specific Allowance Recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 239 |  | $ | 239 |  | $ | 170 |  | $ | 124 |  | $ | — |  | $ | —
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 2,867 |  |  | 2,867 |  |  | 125 |  |  | 1,958 |  |  | — |  |  | —
Direct Financing Leases |  |  | 383 |  |  | 383 |  |  | 270 |  |  | 196 |  |  | 2 |  |  | 2
Residential Real Estate |  |  | 180 |  |  | 180 |  |  | 15 |  |  | 72 |  |  | — |  |  | —
Installment and Other Consumer |  |  | 80 |  |  | 80 |  |  | 80 |  |  | 62 |  |  | — |  |  | —
|  | $ | 3,749 |  | $ | 3,749 |  | $ | 660 |  | $ | 2,412 |  | $ | 2 |  | $ | 2
Total Impaired Loans/Leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 1,846 |  | $ | 1,886 |  | $ | 170 |  | $ | 1,094 |  | $ | 27 |  | $ | 27
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 34 |  |  | 50 |  |  | — |  |  | 24 |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 3,551 |  |  | 3,553 |  |  | 125 |  |  | 2,696 |  |  | 29 |  |  | 29
Direct Financing Leases |  |  | 2,025 |  |  | 2,025 |  |  | 270 |  |  | 1,518 |  |  | 32 |  |  | 32
Residential Real Estate |  |  | 649 |  |  | 794 |  |  | 15 |  |  | 553 |  |  | — |  |  | —
Installment and Other Consumer |  |  | 556 |  |  | 556 |  |  | 80 |  |  | 536 |  |  | — |  |  | —
|  | $ | 8,661 |  | $ | 8,864 |  | $ | 660 |  | $ | 6,421 |  | $ | 88 |  | $ | 88
Note 4. Loans/Leases Receivable (continued)
|  | 2018
|  |  |  |  |  |  |  |  |  |  |  | Interest Income
|  |  |  |  |  |  |  |  |  |  | Average |  |  |  |  | Recognized for
|  | Recorded |  | Unpaid Principal |  | Related |  | Recorded |  | Interest Income |  | Cash Payments
Classes of Loans/Leases |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized |  | Received
|  | (dollars in thousands)
Impaired Loans/Leases with No Specific Allowance Recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 1,846 |  | $ | 4,540 |  | $ | — |  | $ | 2,346 |  | $ | 210 |  | $ | 210
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 106 |  |  | 106 |  |  | — |  |  | 107 |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | 507 |  |  | 507 |  |  | — |  |  | 101 |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 1,804 |  |  | 1,804 |  |  | — |  |  | 540 |  |  | — |  |  | —
Direct Financing Leases |  |  | 1,929 |  |  | 1,929 |  |  | — |  |  | 2,193 |  |  | 60 |  |  | 60
Residential Real Estate |  |  | 984 |  |  | 1,058 |  |  | — |  |  | 723 |  |  | 9 |  |  | 9
Installment and Other Consumer |  |  | 762 |  |  | 762 |  |  | — |  |  | 198 |  |  | — |  |  | —
|  | $ | 7,938 |  | $ | 10,706 |  | $ | — |  | $ | 6,208 |  | $ | 279 |  | $ | 279
Impaired Loans/Leases with Specific Allowance Recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 2,653 |  | $ | 2,653 |  | $ | 973 |  | $ | 1,118 |  | $ | 43 |  | $ | 43
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 304 |  |  | 660 |  |  | 39 |  |  | 177 |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | 149 |  |  | 149 |  |  | 33 |  |  | 159 |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 7,577 |  |  | 7,577 |  |  | 2,052 |  |  | 3,055 |  |  | 58 |  |  | 58
Direct Financing Leases |  |  | 320 |  |  | 320 |  |  | 194 |  |  | 273 |  |  | — |  |  | —
Residential Real Estate |  |  | 1,126 |  |  | 1,126 |  |  | 257 |  |  | 553 |  |  | 12 |  |  | 12
Installment and Other Consumer |  |  | 136 |  |  | 136 |  |  | 111 |  |  | 125 |  |  | — |  |  | —
|  | $ | 12,265 |  | $ | 12,621 |  | $ | 3,659 |  | $ | 5,460 |  | $ | 113 |  | $ | 113
Total Impaired Loans/Leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 4,499 |  | $ | 7,193 |  | $ | 973 |  | $ | 3,464 |  | $ | 253 |  | $ | 253
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 410 |  |  | 766 |  |  | 39 |  |  | 284 |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | 656 |  |  | 656 |  |  | 33 |  |  | 260 |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 9,381 |  |  | 9,381 |  |  | 2,052 |  |  | 3,595 |  |  | 58 |  |  | 58
Direct Financing Leases |  |  | 2,249 |  |  | 2,249 |  |  | 194 |  |  | 2,466 |  |  | 60 |  |  | 60
Residential Real Estate |  |  | 2,110 |  |  | 2,184 |  |  | 257 |  |  | 1,276 |  |  | 21 |  |  | 21
Installment and Other Consumer |  |  | 898 |  |  | 898 |  |  | 111 |  |  | 323 |  |  | — |  |  | —
|  | $ | 20,203 |  | $ | 23,327 |  | $ | 3,659 |  | $ | 11,668 |  | $ | 392 |  | $ | 392
Note 4. Loans/Leases Receivable (continued)
|  | 2017
|  |  |  |  |  |  |  |  |  |  |  |  |  |  | Interest Income
|  |  |  |  |  |  |  |  |  |  | Average |  |  |  | Recognized for
|  | Recorded |  | Unpaid Principal |  | Related |  | Recorded |  | Interest Income |  | Cash Payments
Classes of Loans/Leases |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized |  | Received
|  | (dollars in thousands)
Impaired Loans/Leases with No Specific Allowance Recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 1,634 |  | $ | 1,645 |  | $ | — |  | $ | 1,406 |  | $ | 71 |  | $ | 71
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 289 |  |  | 289 |  |  | — |  |  | 79 |  |  | 12 |  |  | 12
Commercial Construction, Land Development, and Other Land |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 1,172 |  |  | 1,172 |  |  | — |  |  | 1,177 |  |  | — |  |  | —
Direct Financing Leases |  |  | 2,945 |  |  | 2,945 |  |  | — |  |  | 2,880 |  |  | 132 |  |  | 132
Residential Real Estate |  |  | 943 |  |  | 1,018 |  |  | — |  |  | 686 |  |  | 1 |  |  | 1
Installment and Other Consumer |  |  | 134 |  |  | 134 |  |  | — |  |  | 126 |  |  | — |  |  | —
|  | $ | 7,117 |  | $ | 7,203 |  | $ | — |  | $ | 6,354 |  | $ | 216 |  | $ | 216
Impaired Loans/Leases with Specific Allowance Recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 4,615 |  | $ | 4,618 |  | $ | 716 |  | $ | 4,584 |  | $ | 203 |  | $ | 203
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 152 |  |  | 152 |  |  | 48 |  |  | 221 |  |  | — |  |  | —
Commercial Construction, Land Development, and Other Land |  |  | 4,844 |  |  | 4,844 |  |  | 1,379 |  |  | 4,448 |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 72 |  |  | 72 |  |  | 2 |  |  | 45 |  |  | — |  |  | —
Direct Financing Leases |  |  | 725 |  |  | 725 |  |  | 504 |  |  | 625 |  |  | — |  |  | —
Residential Real Estate |  |  | 761 |  |  | 761 |  |  | 355 |  |  | 549 |  |  | 15 |  |  | 15
Installment and Other Consumer |  |  | 68 |  |  | 68 |  |  | 39 |  |  | 41 |  |  | 1 |  |  | 1
|  | $ | 11,237 |  | $ | 11,240 |  | $ | 3,043 |  | $ | 10,513 |  | $ | 219 |  | $ | 219
Total Impaired Loans/Leases: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 6,249 |  | $ | 6,263 |  | $ | 716 |  | $ | 5,990 |  | $ | 274 |  | $ | 274
CRE |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner-Occupied CRE |  |  | 441 |  |  | 441 |  |  | 48 |  |  | 300 |  |  | 12 |  |  | 12
Commercial Construction, Land Development, and Other Land |  |  | 4,844 |  |  | 4,844 |  |  | 1,379 |  |  | 4,448 |  |  | — |  |  | —
Other Non Owner-Occupied CRE |  |  | 1,244 |  |  | 1,244 |  |  | 2 |  |  | 1,222 |  |  | — |  |  | —
Direct Financing Leases |  |  | 3,670 |  |  | 3,670 |  |  | 504 |  |  | 3,505 |  |  | 132 |  |  | 132
Residential Real Estate |  |  | 1,704 |  |  | 1,779 |  |  | 355 |  |  | 1,235 |  |  | 16 |  |  | 16
Installment and Other Consumer |  |  | 202 |  |  | 202 |  |  | 39 |  |  | 167 |  |  | 1 |  |  | 1
|  | $ | 18,354 |  | $ | 18,443 |  | $ | 3,043 |  | $ | 16,867 |  | $ | 435 |  | $ | 435
Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management’s current estimates. For C&I and CRE loans, the Company’s credit quality indicator is internally assigned risk ratings. Each commercial loan is assigned a risk rating upon origination. The risk rating is reviewed every 15 months, at a minimum, and on an as needed basis depending on the specific circumstances of the loan. See Note 1 for further discussion on the Company’s risk ratings. Note 4. Loans/Leases Receivable (continued) For C&I equipment financing loans, direct financing leases, residential real estate loans, and installment and other consumer loans, the Company’s credit quality indicator is performance determined by delinquency status. Delinquency status is updated daily by the Company’s loan system. For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of December 31, 2019 and 2018:
|  | 2019 |
|  |  |  |  | CRE |  |  |  |  |  |
|  |  |  |  |  |  |  | Non-Owner Occupied |  |  |  |  |  |
|  |  |  |  |  | Commercial |  |  |  |  |  |  |
|  |  |  |  |  | Construction, |  |  |  |  |  |  |
|  |  |  |  |  | Land |  |  |  |  |  |  |
|  |  |  | Owner-Occupied |  | Development, |  |  |  |  |  | As a % of |
Internally Assigned Risk Rating |  | C&I |  | CRE |  | and Other Land |  | Other CRE |  | Total |  | Total |
|  | (dollars in thousands) |
Pass (Ratings 1 through 5) |  | $ | 1,334,446 |  | $ | 439,418 |  | $ | 378,572 |  | $ | 896,206 |  | $ | 3,048,642 |  | 98.28 | %
Special Mention (Rating 6) |  |  | 12,962 |  |  | 3,044 |  |  | 41 |  |  | 3,905 |  |  | 19,952 |  | 0.64 | %
Substandard (Rating 7) |  |  | 18,439 |  |  | 1,527 |  |  | 184 |  |  | 13,499 |  |  | 33,649 |  | 1.08 | %
Doubtful (Rating 8) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — | %
|  | $ | 1,365,847 |  | $ | 443,989 |  | $ | 378,797 |  | $ | 913,610 |  | $ | 3,102,243 |  | 100.00 | %
|  | 2019 |
|  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |  | As a % of |
Delinquency Status * |  | C&I |  | Leases |  | Estate |  | Other Consumer |  | Total |  | Total |
|  | (dollars in thousands) |
Performing |  | $ | 140,992 |  | $ | 86,019 |  | $ | 239,198 |  | $ | 108,763 |  | $ | 574,972 |  | 99.29 | %
Nonperforming |  |  | 986 |  |  | 1,850 |  |  | 706 |  |  | 589 |  |  | 4,131 |  | 0.71 | %
|  | $ | 141,978 |  | $ | 87,869 |  | $ | 239,904 |  | $ | 109,352 |  | $ | 579,103 |  | 100.00 | %
|  | 2018 |
|  |  |  |  | CRE |  |  |  |  |  |
|  |  |  |  |  |  |  | Non-Owner Occupied |  |  |  |  |  |
|  |  |  |  |  | Commercial |  |  |  |  |  |  |
|  |  |  |  |  | Construction, |  |  |  |  |  |  |
|  |  |  |  |  | Land |  |  |  |  |  |  |
|  |  |  | Owner-Occupied |  | Development, |  |  |  |  |  | As a % of |
Internally Assigned Risk Rating |  | C&I |  | CRE |  | and Other Land |  | Other CRE |  | Total |  | Total |
|  | (dollars in thousands) |
Pass (Ratings 1 through 5) |  | $ | 1,294,418 |  | $ | 487,949 |  | $ | 230,473 |  | $ | 1,008,626 |  | $ | 3,021,466 |  | 97.72 | %
Special Mention (Rating 6) |  |  | 23,302 |  |  | 9,599 |  |  | 3,848 |  |  | 5,309 |  |  | 42,058 |  | 1.36 | %
Substandard (Rating 7) |  |  | 8,286 |  |  | 3,106 |  |  | 2,466 |  |  | 14,735 |  |  | 28,593 |  | 0.92 | %
Doubtful (Rating 8) |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  | — | %
|  | $ | 1,326,006 |  | $ | 500,654 |  | $ | 236,787 |  | $ | 1,028,670 |  | $ | 3,092,117 |  | 100.00 | %
|  | 2018 |
|  |  |  | Direct Financing |  | Residential Real |  | Installment and |  |  |  | As a % of |
Delinquency Status * |  | C&I |  | Leases |  | Estate |  | Other Consumer |  | Total |  | Total |
|  | (dollars in thousands) |
Performing |  | $ | 102,713 |  | $ | 116,097 |  | $ | 288,827 |  | $ | 118,714 |  | $ | 626,351 |  | 99.18 | %
Nonperforming |  |  | 691 |  |  | 1,872 |  |  | 1,932 |  |  | 667 |  |  | 5,162 |  | 0.82 | %
|  | $ | 103,404 |  | $ | 117,969 |  | $ | 290,759 |  | $ | 119,381 |  | $ | 631,513 |  | 100.00 | %
* Performing = loans/leases accruing and less than 90 days past due. Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, and accruing troubled debt restructurings. Note 4. Loans/Leases Receivable (continued) TDRs totaled $1.7 million and $6.5 million as of December 31, 2019 and 2018, respectively. For each class of financing receivable, the following presents the number and recorded investment of TDRs, by type of concession, that were restructured during the years ended December 31, 2019 and 2018. The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of restructuring. The specific allowance is as of December 31, 2019 and 2018, respectively. The following excludes any TDRs that were restructured and paid off or charged off in the same year.
|  | 2019
|  |  |  | Pre- |  | Post- |  |  |
|  |  |  | Modification |  | Modification |  |  |
|  | Number of |  | Recorded |  | Recorded |  | Specific
Classes of Loans/Leases |  | Loans / Leases |  | Investment |  | Investment |  | Allowance
|  | (dollars in thousands)
CONCESSION - Significant Payment Delay |  |  |  |  |  |  |  |  |  |  |
C&I |  | 3 |  | $ | 112 |  | $ | 112 |  | $ | —
Direct Financing Leases |  | 10 |  |  | 388 |  |  | 388 |  |  | 35
|  | 13 |  | $ | 500 |  | $ | 500 |  | $ | 35
CONCESSION - Foregiveness of Principal |  |  |  |  |  |  |  |  |  |  |
C&I |  | 1 |  | $ | 587 |  | $ | 537 |  | $ | —
CONCESSION - Extension of Maturity |  |  |  |  |  |  |  |  |  |  |
Installment and Other Consumer |  | 1 |  | $ | 56 |  | $ | 56 |  | $ | 54
TOTAL |  | 15 |  | $ | 1,143 |  | $ | 1,093 |  | $ | 89
|  | 2018
|  |  |  | Pre- |  | Post- |  |  |
|  |  |  | Modification |  | Modification |  |  |
|  | Number of |  | Recorded |  | Recorded |  | Specific
Classes of Loans/Leases |  | Loans/Leases |  | Investment |  | Investment |  | Allowance
|  | (dollars in thousands)
CONCESSION - Significant Payment Delay |  |  |  |  |  |  |  |  |  |  |
C&I |  | 5 |  | $ | 426 |  | $ | 426 |  | $ | 250
Other Non Owner-Occupied CRE |  | 1 |  |  | 500 |  |  | 500 |  |  | 60
Residential Real Estate |  | 1 |  |  | 46 |  |  | 46 |  |  | —
Direct Financing Leases |  | 3 |  |  | 75 |  |  | 75 |  |  | —
|  | 10 |  | $ | 1,047 |  | $ | 1,047 |  | $ | 310
CONCESSION - Extension of Maturity |  |  |  |  |  |  |  |  |  |  |
Other Non Owner-Occupied CRE |  | 2 |  | $ | 2,976 |  | $ | 2,976 |  | $ | 1,492
Residential Real Estate |  | 2 |  | $ | 100 |  | $ | 100 |  | $ | 8
|  | 4 |  | $ | 3,076 |  | $ | 3,076 |  | $ | 1,500
TOTAL |  | 14 |  | $ | 4,123 |  | $ | 4,123 |  | $ | 1,810
Of the TDRs reported above, three with a post-modification recorded investment totaling $121 thousand were on nonaccrual as of December 31, 2019 and three with a post-modification recorded investment totaling $796 thousand were on nonaccrual as of December 31, 2018. For the year ended December 31, 2019, the Company had t wo TDRs totaling $66 thousand that redefaulted within 12 months subsequent to restructure, where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status. For the year ended December 31, 2018, the Company had five TDRs totaling $399 thousand that redefaulted within 12 months subsequent to restructure, where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status. Not included in the table above, the Company had one TDR that was restructured and charged off in 2019, totaling $52 thousand. There were 13 TDRs that were both restructured and charged off in 2018, totaling $896 thousand. Note 4. Loans/Leases Receivable (continued) Loans are made in the normal course of business to directors, executive officers, and their related interests. The terms of these loans, including interest rates and collateral, are similar to those prevailing for comparable transactions with other persons. An analysis of the changes in the aggregate committed amount of loans greater than or equal to $60,000 during the years ended December 31, 2019, 2018, and 2017, is as follows:
|  | 2019 |  | 2018 |  | 2017
|  | (dollars in thousands)
Balance, beginning |  | $ | 125,496 |  | $ | 66,442 |  | $ | 61,609
Net increase (decrease) due to change in related parties |  |  | (12,161) |  |  | 41,797 |  |  | 11,927
Advances |  |  | 98,708 |  |  | 43,453 |  |  | 13,091
Repayments |  |  | (99,213) |  |  | (26,196) |  |  | (20,185)
Balance, ending |  | $ | 112,830 |  | $ | 125,496 |  | $ | 66,442
The Company’s loan portfolio includes a geographic concentration in the Midwest. Additionally, the loan portfolio includes a concentration of loans in certain industries as of December 31, 2019 and 2018 as follows:
|  | 2019 |  | 2018 |
|  |  |  |  | Percentage of |  |  |  |  | Percentage of |
|  |  |  |  | Total |  |  |  |  | Total |
Industry Name |  | Balance |  | Loans/Leases |  | Balance |  | Loans/Leases |
|  | (dollars in thousands)
Lessors of Residential Buildings |  | $ | 745,770 |  | 22 | % | $ | 594,346 |  | 16 | %
Lessors of Non-Residential Buildings |  |  | 574,058 |  | 17 | % |  | 632,534 |  | 17 | %
Administration of Urban Planning & Community & Rural Development |  |  | 133,157 |  | 4 | % |  | 111,579 |  | 3 | %
Bank Holding Companies |  |  | 92,185 |  | 3 | % |  | 75,601 |  | 2 | %
Concentrations within the leasing portfolio are monitored by equipment type – none of which represent a concentration within the total loans/leases portfolio. Within the leasing portfolio, diversification is spread among construction, manufacturing and the service industries. Geographically, the lease portfolio is diversified across all 50 states. No individual state represents a concentration within the total loan/lease portfolio.

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- Definition The entire disclosure for financing receivable. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 20 -URI http://asc.fasb.org/subtopic&trid=2196816 + Details
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