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Loans and Allowance for Loan Losses | 9 Months Ended
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Sep. 30, 2019
Loans and Allowance for Loan Losses |
Loans and Allowance for Loan Losses | NOTE 4 Loans and Allowance for Loan Losses The following table presents total loans outstanding, by portfolio segment, as of September 30, 2019 and December 31, 2018:
|  | September 30, |  | December 31,
(dollars in thousands) |  | 2019 |  | 2018
Commercial |  |  |  |  |  |
Commercial and industrial |  | $ | 485,183 |  | $ | 510,706
Real estate construction |  |  | 21,674 |  |  | 18,965
Commercial real estate |  |  | 444,600 |  |  | 439,963
Total commercial |  |  | 951,457 |  |  | 969,634
Consumer |  |  |  |  |  |
Residential real estate first mortgage |  |  | 459,763 |  |  | 448,143
Residential real estate junior lien |  |  | 182,516 |  |  | 188,855
Other revolving and installment |  |  | 92,351 |  |  | 95,218
Total consumer |  |  | 734,630 |  |  | 732,216
Total loans |  | $ | 1,686,087 |  | $ | 1,701,850
Total loans include net deferred loan fees and costs of $1.1 million and $1.7 million at September 30, 2019 and December 31, 2018, respectively. Management monitors the credit quality of its loan portfolio on an ongoing basis. Measurement of delinquency and past due status are based on the contractual terms of each loan. Past due loans are reviewed regularly to identify loans for nonaccrual status. The following tables present a past due aging analysis of total loans outstanding, by portfolio segment, as of September 30, 2019 and December 31, 2018:
|  | September 30, 2019
|  |  |  |  |  |  |  | 90 Days |  |  |  |  |  |
|  | Accruing |  | 30 - 89 Days |  | or More |  |  |  |  | Total
(dollars in thousands) |  | Current |  | Past Due |  | Past Due |  | Nonperforming |  | Loans
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 481,480 |  | $ | 1,561 |  | $ | 45 |  | $ | 2,097 |  | $ | 485,183
Real estate construction |  |  | 21,224 |  |  | 450 |  |  | — |  |  | — |  |  | 21,674
Commercial real estate |  |  | 443,129 |  |  | — |  |  | — |  |  | 1,471 |  |  | 444,600
Total commercial |  |  | 945,833 |  |  | 2,011 |  |  | 45 |  |  | 3,568 |  |  | 951,457
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 456,981 |  |  | 2,105 |  |  | — |  |  | 677 |  |  | 459,763
Residential real estate junior lien |  |  | 181,646 |  |  | 14 |  |  | — |  |  | 856 |  |  | 182,516
Other revolving and installment |  |  | 92,176 |  |  | 169 |  |  | — |  |  | 6 |  |  | 92,351
Total consumer |  |  | 730,803 |  |  | 2,288 |  |  | — |  |  | 1,539 |  |  | 734,630
Total loans |  | $ | 1,676,636 |  | $ | 4,299 |  | $ | 45 |  | $ | 5,107 |  | $ | 1,686,087
|  | December 31, 2018
|  |  |  |  |  |  |  | 90 Days |  |  |  |  |  |
|  | Accruing |  | 30 - 89 Days |  | or More |  |  |  |  | Total
(dollars in thousands) |  | Current |  | Past Due |  | Past Due |  | Nonperforming |  | Loans
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 504,313 |  | $ | 2,815 |  | $ | — |  | $ | 3,578 |  | $ | 510,706
Real estate construction |  |  | 18,965 |  |  | — |  |  | — |  |  | — |  |  | 18,965
Commercial real estate |  |  | 438,446 |  |  | — |  |  | — |  |  | 1,517 |  |  | 439,963
Total commercial |  |  | 961,724 |  |  | 2,815 |  |  | — |  |  | 5,095 |  |  | 969,634
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 444,470 |  |  | 2,411 |  |  | — |  |  | 1,262 |  |  | 448,143
Residential real estate junior lien |  |  | 187,502 |  |  | 769 |  |  | — |  |  | 584 |  |  | 188,855
Other revolving and installment |  |  | 94,615 |  |  | 581 |  |  | — |  |  | 22 |  |  | 95,218
Total consumer |  |  | 726,587 |  |  | 3,761 |  |  | — |  |  | 1,868 |  |  | 732,216
Total loans |  | $ | 1,688,311 |  | $ | 6,576 |  | $ | — |  | $ | 6,963 |  | $ | 1,701,850
The Company’s consumer loan portfolio is primarily comprised of both secured and unsecured loans that are relatively small and are evaluated at origination on a centralized basis against standardized underwriting criteria. The Company generally does not risk rate consumer loans unless a default event such as bankruptcy or extended nonperformance takes place. Credit quality for the consumer loan portfolio is measured by delinquency rates, nonaccrual amounts and actual losses incurred. The Company assigns a risk rating to all commercial loans, except pools of homogeneous loans, and periodically performs detailed internal and external reviews of risk rated loans over a certain threshold to identify credit risks and to assess the overall collectability of the portfolio. These risk ratings are also subject to examination by the Company’s regulators. During the internal reviews, management monitors and analyzes the financial condition of borrowers and guarantors, trends in the industries in which the borrowers operate and the estimated fair values of collateral securing the loans. These credit quality indicators are used to assign a risk rating to each individual loan. The Company’s ratings are aligned to pass and criticized categories. The criticized category includes special mention, substandard, and doubtful risk ratings. The risk ratings are defined as follows: Pass: A pass loan is a credit with no existing or known potential weaknesses deserving of management’s close attention. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, this potential weakness may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date. Special mention loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification. Substandard: Loans classified as substandard are not adequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans classified as substandard have a well‑defined weakness or weaknesses that jeopardize the repayment of the debt. Well‑defined weaknesses include a borrower’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, or the failure to fulfill economic expectations. 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 characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Loss: Loans classified as loss are considered uncollectible and charged off immediately. The tables below present total loans outstanding, by loan portfolio segment, and risk category as of September 30, 2019 and December 31, 2018:
|  | September 30, 2019
|  |  |  |  | Criticized |  |  |
|  |  |  |  | Special |  |  |  |  |  |  |  |  |
(dollars in thousands) |  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 453,707 |  | $ | 10,439 |  | $ | 20,781 |  | $ | 256 |  | $ | 485,183
Real estate construction |  |  | 20,396 |  |  | 284 |  |  | 994 |  |  | — |  |  | 21,674
Commercial real estate |  |  | 420,060 |  |  | 673 |  |  | 23,867 |  |  | — |  |  | 444,600
Total commercial |  | $ | 894,163 |  | $ | 11,396 |  | $ | 45,642 |  | $ | 256 |  | $ | 951,457
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 459,086 |  |  | — |  |  | 677 |  |  | — |  |  | 459,763
Residential real estate junior lien |  |  | 180,344 |  |  | — |  |  | 2,172 |  |  | — |  |  | 182,516
Other revolving and installment |  |  | 92,345 |  |  | — |  |  | 6 |  |  | — |  |  | 92,351
Total consumer |  |  | 731,775 |  |  | — |  |  | 2,855 |  |  | — |  |  | 734,630
Total loans |  | $ | 1,625,938 |  | $ | 11,396 |  | $ | 48,497 |  | $ | 256 |  | $ | 1,686,087
|  | December 31, 2018
|  |  |  |  | Criticized |  |  |
|  |  |  |  | Special |  |  |  |  |  |  |  |  |
(dollars in thousands) |  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 459,565 |  | $ | 12,055 |  | $ | 37,523 |  | $ | 1,563 |  | $ | 510,706
Real estate construction |  |  | 17,910 |  |  | — |  |  | 1,055 |  |  | — |  |  | 18,965
Commercial real estate |  |  | 407,178 |  |  | 6,304 |  |  | 26,481 |  |  | — |  |  | 439,963
Total commercial |  | $ | 884,653 |  | $ | 18,359 |  | $ | 65,059 |  | $ | 1,563 |  | $ | 969,634
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 448,124 |  |  | — |  |  | 19 |  |  | — |  |  | 448,143
Residential real estate junior lien |  |  | 186,370 |  |  | — |  |  | 2,485 |  |  | — |  |  | 188,855
Other revolving and installment |  |  | 95,218 |  |  | — |  |  | — |  |  | — |  |  | 95,218
Total consumer |  |  | 729,712 |  |  | — |  |  | 2,504 |  |  | — |  |  | 732,216
Total loans |  | $ | 1,614,365 |  | $ | 18,359 |  | $ | 67,563 |  | $ | 1,563 |  | $ | 1,701,850
The adequacy of the allowance for loan losses is assessed at the end of each quarter. The allowance for loan losses includes a specific component related to loans that are individually evaluated for impairment and a general component related to loans that are segregated into homogeneous pools and collectively evaluated for impairment. The factors applied to these pools are an estimate of probable incurred losses based on management’s evaluation of historical net losses from loans with similar characteristics, which are adjusted by management to reflect current events, trends, and conditions. The adjustments include consideration of the following: changes in lending policies and procedures, economic conditions, nature and volume of the portfolio, experience of lending management, volume and severity of past due loans, quality of the loan review system, value of underlying collateral for collateral dependent loans, concentrations, and other external factors. The following tables present, by loan portfolio segment, a summary of the changes in the allowance for loan losses for the three and nine months ended September 30, 2019 and 2018:
|  | Three months ended September 30, 2019
|  | Beginning |  | Provision for |  | Loan |  | Loan |  | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 11,694 |  | $ | (962) |  | $ | (324) |  | $ | 538 |  | $ | 10,946
Real estate construction |  |  | 323 |  |  | 25 |  |  | — |  |  | — |  |  | 348
Commercial real estate |  |  | 5,765 |  |  | (4) |  |  | — |  |  | — |  |  | 5,761
Total commercial |  |  | 17,782 |  |  | (941) |  |  | (324) |  |  | 538 |  |  | 17,055
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 1,155 |  |  | (139) |  |  | — |  |  | — |  |  | 1,016
Residential real estate junior lien |  |  | 710 |  |  | 157 |  |  | (20) |  |  | 49 |  |  | 896
Other revolving and installment |  |  | 380 |  |  | 1 |  |  | (31) |  |  | 28 |  |  | 378
Total consumer |  |  | 2,245 |  |  | 19 |  |  | (51) |  |  | 77 |  |  | 2,290
Unallocated |  |  | 1,219 |  |  | 2,420 |  |  | — |  |  | — |  |  | 3,639
Total |  | $ | 21,246 |  | $ | 1,498 |  | $ | (375) |  | $ | 615 |  | $ | 22,984
|  | Nine months ended September 30, 2019
|  | Beginning |  | Provision for |  | Loan |  | Loan |  | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 12,127 |  | $ | 3,263 |  | $ | (5,275) |  | $ | 831 |  | $ | 10,946
Real estate construction |  |  | 250 |  |  | 97 |  |  | (1) |  |  | 2 |  |  | 348
Commercial real estate |  |  | 6,279 |  |  | (668) |  |  | — |  |  | 150 |  |  | 5,761
Total commercial |  |  | 18,656 |  |  | 2,692 |  |  | (5,276) |  |  | 983 |  |  | 17,055
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 1,156 |  |  | (140) |  |  | — |  |  | — |  |  | 1,016
Residential real estate junior lien |  |  | 805 |  |  | 113 |  |  | (154) |  |  | 132 |  |  | 896
Other revolving and installment |  |  | 380 |  |  | 388 |  |  | (513) |  |  | 123 |  |  | 378
Total consumer |  |  | 2,341 |  |  | 361 |  |  | (667) |  |  | 255 |  |  | 2,290
Unallocated |  |  | 1,177 |  |  | 2,462 |  |  | — |  |  | — |  |  | 3,639
Total |  | $ | 22,174 |  | $ | 5,515 |  | $ | (5,943) |  | $ | 1,238 |  | $ | 22,984
|  | Three months ended September 30, 2018
|  | Beginning |  | Provision for |  | Loan |  | Loan |  | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 10,024 |  | $ | 1,452 |  | $ | (424) |  | $ | 126 |  | $ | 11,178
Real estate construction |  |  | 395 |  |  | (109) |  |  | — |  |  | — |  |  | 286
Commercial real estate |  |  | 6,478 |  |  | (72) |  |  | — |  |  | 20 |  |  | 6,426
Total commercial |  |  | 16,897 |  |  | 1,271 |  |  | (424) |  |  | 146 |  |  | 17,890
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 1,486 |  |  | (142) |  |  | — |  |  | — |  |  | 1,344
Residential real estate junior lien |  |  | 830 |  |  | 20 |  |  | (47) |  |  | 11 |  |  | 814
Other revolving and installment |  |  | 483 |  |  | 31 |  |  | (99) |  |  | 26 |  |  | 441
Total consumer |  |  | 2,799 |  |  | (91) |  |  | (146) |  |  | 37 |  |  | 2,599
Unallocated |  |  | 173 |  |  | 350 |  |  | — |  |  | — |  |  | 523
Total |  | $ | 19,869 |  | $ | 1,530 |  | $ | (570) |  | $ | 183 |  | $ | 21,012
|  | Nine months ended September 30, 2018
|  | Beginning |  | Provision for |  | Loan |  | Loan |  | Ending
(dollars in thousands) |  | Balance |  | Loan Losses |  | Charge-offs |  | Recoveries |  | Balance
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 7,589 |  | $ | 6,158 |  | $ | (3,078) |  | $ | 509 |  | $ | 11,178
Real estate construction |  |  | 343 |  |  | 1 |  |  | (60) |  |  | 2 |  |  | 286
Commercial real estate |  |  | 4,909 |  |  | 1,458 |  |  | — |  |  | 59 |  |  | 6,426
Total commercial |  |  | 12,841 |  |  | 7,617 |  |  | (3,138) |  |  | 570 |  |  | 17,890
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 1,411 |  |  | (38) |  |  | (29) |  |  | — |  |  | 1,344
Residential real estate junior lien |  |  | 902 |  |  | (145) |  |  | (133) |  |  | 190 |  |  | 814
Other revolving and installment |  |  | 499 |  |  | 34 |  |  | (236) |  |  | 144 |  |  | 441
Total consumer |  |  | 2,812 |  |  | (149) |  |  | (398) |  |  | 334 |  |  | 2,599
Unallocated |  |  | 911 |  |  | (388) |  |  | — |  |  | — |  |  | 523
Total |  | $ | 16,564 |  | $ | 7,080 |  | $ | (3,536) |  | $ | 904 |  | $ | 21,012
The following tables present the recorded investment in loans and related allowance for loan losses, by loan portfolio segment, disaggregated on the basis of the Company’s impairment methodology, as of September 30, 2019 and December 31, 2018:
|  | September 30, 2019
|  | Recorded Investment |  | Allowance for Loan Losses
|  | Individually |  | Collectively |  |  |  |  | Individually |  | Collectively |  |  |  |  |  |
(dollars in thousands) |  | Evaluated |  | Evaluated |  | Total |  | Evaluated |  | Evaluated |  | Unallocated |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 2,513 |  | $ | 482,670 |  | $ | 485,183 |  | $ | 1,429 |  | $ | 9,517 |  | $ | — |  | $ | 10,946
Real estate construction |  |  | — |  |  | 21,674 |  |  | 21,674 |  |  | — |  |  | 348 |  |  | — |  |  | 348
Commercial real estate |  |  | 1,480 |  |  | 443,120 |  |  | 444,600 |  |  | 352 |  |  | 5,409 |  |  | — |  |  | 5,761
Total commercial |  |  | 3,993 |  |  | 947,464 |  |  | 951,457 |  |  | 1,781 |  |  | 15,274 |  |  | — |  |  | 17,055
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 355 |  |  | 459,408 |  |  | 459,763 |  |  | — |  |  | 1,016 |  |  | — |  |  | 1,016
Residential real estate junior lien |  |  | 804 |  |  | 181,712 |  |  | 182,516 |  |  | 324 |  |  | 572 |  |  | — |  |  | 896
Other revolving and installment |  |  | 5 |  |  | 92,346 |  |  | 92,351 |  |  | 2 |  |  | 376 |  |  | — |  |  | 378
Total consumer |  |  | 1,164 |  |  | 733,466 |  |  | 734,630 |  |  | 326 |  |  | 1,964 |  |  | — |  |  | 2,290
Total loans |  | $ | 5,157 |  | $ | 1,680,930 |  | $ | 1,686,087 |  | $ | 2,107 |  | $ | 17,238 |  | $ | 3,639 |  | $ | 22,984
|  | December 31, 2018
|  | Recorded Investment |  | Allowance for Loan Losses
|  | Individually |  | Collectively |  |  |  |  | Individually |  | Collectively |  |  |  |  |  |
(dollars in thousands) |  | Evaluated |  | Evaluated |  | Total |  | Evaluated |  | Evaluated |  | Unallocated |  | Total
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 3,945 |  | $ | 506,761 |  | $ | 510,706 |  | $ | 2,059 |  | $ | 10,068 |  | $ | — |  | $ | 12,127
Real estate construction |  |  | — |  |  | 18,965 |  |  | 18,965 |  |  | — |  |  | 250 |  |  | — |  |  | 250
Commercial real estate |  |  | 1,684 |  |  | 438,279 |  |  | 439,963 |  |  | 455 |  |  | 5,824 |  |  | — |  |  | 6,279
Total commercial |  |  | 5,629 |  |  | 964,005 |  |  | 969,634 |  |  | 2,514 |  |  | 16,142 |  |  | — |  |  | 18,656
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate first mortgage |  |  | 352 |  |  | 447,791 |  |  | 448,143 |  |  | — |  |  | 1,156 |  |  | — |  |  | 1,156
Residential real estate junior lien |  |  | 559 |  |  | 188,296 |  |  | 188,855 |  |  | 4 |  |  | 801 |  |  | — |  |  | 805
Other revolving and installment |  |  | 20 |  |  | 95,198 |  |  | 95,218 |  |  | 20 |  |  | 360 |  |  | — |  |  | 380
Total consumer |  |  | 931 |  |  | 731,285 |  |  | 732,216 |  |  | 24 |  |  | 2,317 |  |  | — |  |  | 2,341
Total loans |  | $ | 6,560 |  | $ | 1,695,290 |  | $ | 1,701,850 |  | $ | 2,538 |  | $ | 18,459 |  | $ | 1,177 |  | $ | 22,174
The tables below summarize key information on impaired loans. These impaired loans may have estimated losses which are included in the allowance for loan losses.
|  | September 30, 2019 |  | December 31, 2018
|  | Recorded |  | Unpaid |  | Related |  | Recorded |  | Unpaid |  | Related
(dollars in thousands) |  | Investment |  | Principal |  | Allowance |  | Investment |  | Principal |  | Allowance
Impaired loans with a valuation allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1,757 |  | $ | 1,900 |  | $ | 1,429 |  | $ | 2,660 |  | $ | 2,752 |  | $ | 2,059
Commercial real estate |  |  | 1,480 |  |  | 1,595 |  |  | 352 |  |  | 1,499 |  |  | 1,517 |  |  | 455
Residential real estate first mortgage |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Residential real estate junior lien |  |  | 536 |  |  | 619 |  |  | 324 |  |  | 4 |  |  | 4 |  |  | 4
Other revolving and installment |  |  | 4 |  |  | 4 |  |  | 2 |  |  | 19 |  |  | 20 |  |  | 20
Total impaired loans with a valuation allowance |  |  | 3,777 |  |  | 4,118 |  |  | 2,107 |  |  | 4,182 |  |  | 4,293 |  |  | 2,538
Impaired loans without a valuation allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 756 |  |  | 1,077 |  |  | — |  |  | 1,285 |  |  | 1,422 |  |  | —
Commercial real estate |  |  | — |  |  | — |  |  | — |  |  | 185 |  |  | 218 |  |  | —
Residential real estate first mortgage |  |  | 355 |  |  | 367 |  |  | — |  |  | 352 |  |  | 504 |  |  | —
Residential real estate junior lien |  |  | 268 |  |  | 290 |  |  | — |  |  | 555 |  |  | 697 |  |  | —
Other revolving and installment |  |  | 1 |  |  | 1 |  |  | — |  |  | 1 |  |  | 2 |  |  | —
Total impaired loans without a valuation allowance |  |  | 1,380 |  |  | 1,735 |  |  | — |  |  | 2,378 |  |  | 2,843 |  |  | —
Total impaired loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 2,513 |  |  | 2,977 |  |  | 1,429 |  |  | 3,945 |  |  | 4,174 |  |  | 2,059
Commercial real estate |  |  | 1,480 |  |  | 1,595 |  |  | 352 |  |  | 1,684 |  |  | 1,735 |  |  | 455
Residential real estate first mortgage |  |  | 355 |  |  | 367 |  |  | — |  |  | 352 |  |  | 504 |  |  | —
Residential real estate junior lien |  |  | 804 |  |  | 909 |  |  | 324 |  |  | 559 |  |  | 701 |  |  | 4
Other revolving and installment |  |  | 5 |  |  | 5 |  |  | 2 |  |  | 20 |  |  | 22 |  |  | 20
Total impaired loans |  | $ | 5,157 |  | $ | 5,853 |  | $ | 2,107 |  | $ | 6,560 |  | $ | 7,136 |  | $ | 2,538
The table below presents the average recorded investment in impaired loans and interest income for the three and nine months ended September 30, 2019 and 2018:
|  | Three months ended September 30,
|  | 2019 |  | 2018
|  | Average |  |  |  |  | Average |  |  |
|  | Recorded |  | Interest |  | Recorded |  | Interest
(dollars in thousands) |  | Investment |  | Income |  | Investment |  | Income
Impaired loans with a valuation allowance |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 1,964 |  | $ | 4 |  | $ | 1,961 |  | $ | 9
Commercial real estate |  |  | 1,623 |  |  | 2 |  |  | 1,767 |  |  | 2
Residential real estate first mortgage |  |  | — |  |  | — |  |  | — |  |  | —
Residential real estate junior lien |  |  | 619 |  |  | 1 |  |  | 63 |  |  | 1
Other revolving and installment |  |  | 5 |  |  | — |  |  | 39 |  |  | —
Total impaired loans with a valuation allowance |  |  | 4,211 |  |  | 7 |  |  | 3,830 |  |  | 12
Impaired loans without a valuation allowance |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 1,206 |  |  | 7 |  |  | 1,073 |  |  | —
Commercial real estate |  |  | — |  |  | — |  |  | 842 |  |  | —
Residential real estate first mortgage |  |  | 183 |  |  | — |  |  | 525 |  |  | —
Residential real estate junior lien |  |  | 297 |  |  | — |  |  | 394 |  |  | —
Other revolving and installment |  |  | 2 |  |  | — |  |  | 3 |  |  | —
Total impaired loans without a valuation allowance |  |  | 1,688 |  |  | 7 |  |  | 2,837 |  |  | —
Total impaired loans |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 3,170 |  |  | 11 |  |  | 3,034 |  |  | 9
Commercial real estate |  |  | 1,623 |  |  | 2 |  |  | 2,609 |  |  | 2
Residential real estate first mortgage |  |  | 183 |  |  | — |  |  | 525 |  |  | —
Residential real estate junior lien |  |  | 916 |  |  | 1 |  |  | 457 |  |  | 1
Other revolving and installment |  |  | 7 |  |  | — |  |  | 42 |  |  | —
Total impaired loans |  | $ | 5,899 |  | $ | 14 |  | $ | 6,667 |  | $ | 12
|  | Nine Months Ended September 30,
|  | 2019 |  | 2018
|  | Average |  |  |  |  | Average |  |  |
|  | Recorded |  | Interest |  | Recorded |  | Interest
(dollars in thousands) |  | Investment |  | Income |  | Investment |  | Income
Impaired loans with a valuation allowance |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 2,473 |  | $ | 12 |  | $ | 2,026 |  | $ | 27
Commercial real estate |  |  | 1,668 |  |  | 6 |  |  | 1,793 |  |  | 7
Residential real estate first mortgage |  |  | — |  |  | — |  |  | — |  |  | —
Residential real estate junior lien |  |  | 621 |  |  | 3 |  |  | 63 |  |  | 2
Other revolving and installment |  |  | 5 |  |  | — |  |  | 43 |  |  | —
Total impaired loans with a valuation allowance |  |  | 4,767 |  |  | 21 |  |  | 3,925 |  |  | 36
Impaired loans without a valuation allowance |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 2,979 |  |  | 23 |  |  | 1,130 |  |  | —
Commercial real estate |  |  | — |  |  | — |  |  | 747 |  |  | —
Residential real estate first mortgage |  |  | 92 |  |  | — |  |  | 539 |  |  | —
Residential real estate junior lien |  |  | 302 |  |  | — |  |  | 403 |  |  | 1
Other revolving and installment |  |  | 4 |  |  | — |  |  | 3 |  |  | —
Total impaired loans without a valuation allowance |  |  | 3,377 |  |  | 23 |  |  | 2,822 |  |  | 1
Total impaired loans |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 5,452 |  |  | 35 |  |  | 3,156 |  |  | 27
Commercial real estate |  |  | 1,668 |  |  | 6 |  |  | 2,540 |  |  | 7
Residential real estate first mortgage |  |  | 92 |  |  | — |  |  | 539 |  |  | —
Residential real estate junior lien |  |  | 923 |  |  | 3 |  |  | 466 |  |  | 3
Other revolving and installment |  |  | 9 |  |  | — |  |  | 46 |  |  | —
Total impaired loans |  | $ | 8,144 |  | $ | 44 |  | $ | 6,747 |  | $ | 37
Loans with a carrying value of $1.1 billion as of September 30, 2019 and December 31, 2018, were pledged to secure public deposits, and for other purposes required or permitted by law. Under certain circumstances, the Company will provide borrowers relief through loan restructurings. A restructuring of debt constitutes a troubled debt restructuring (“TDR”) if the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. TDR concessions can include reduction of interest rates, extension of maturity dates, forgiveness of principal or interest due, or acceptance of other assets in full or partial satisfaction of the debt. During the first quarter of 2019 there was one loan that was modified as a troubled debt restructuring as a result of extending the amortization period. As of September 30, 2019, the carrying value of the restructured loan was $0.2 million. The loan is currently performing according to the modified terms and there was no specific reserve for the loan losses allocated to the loan modified as troubled debt restructuring. During the first quarter of 2018, there was one loan modified as a troubled debt restructuring as a result of adjusting the interest rate below current market levels. The balance at the time of restructuring was $1.0 million. As of December 31, 2018, the carrying value of the restructured loan was $0.2 million. The loan is currently performing according to the modified terms and there was no specific reserve for loan losses allocated to the loan modified as troubled debt restructuring. The Company does not have material commitments to lend additional funds to borrowers with loans whose terms have been modified in troubled debt restructurings or whose loans are on nonaccrual.

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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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