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Troubled Debt Restructurings | 6 Months Ended
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Jun. 30, 2020
Debt Disclosure [Abstract] |
Troubled Debt Restructurings | Troubled Debt Restructurings: Total troubled debt restructurings were $4.6 million at June 30, 2020 and December 31, 2019. The Company has allocated $59 thousand and $61 thousand of specific reserves to loans whose terms have been modified in troubled debt restructurings at June 30, 2020 and December 31, 2019, respectively. There were no commitments to lend additional amounts to borrowers with loans that were classified as troubled debt restructurings at June 30, 2020 and at December 31, 2019. During the three and six month periods ended June 30, 2020 and 2019, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; a reduction of the contractual monthly payment; a deferral of principal, interest and/or escrow; or a legal concession. During the three month period ended June 30, 2020, the terms of such loans included a reduction of the stated interest rate of the loan of 2.25% and an extension of the maturity date of 183 months. During the same three month period in 2019, the terms of such loans included a reduction of the stated interest rate of the loan of 0.24% and an extension of the maturity date of 124 months. During the six month period ended June 30, 2020, the terms of such loans included a reduction of the stated interest rate of the loan in the range of 1.00% and 2.25% and extensions of the maturity dates on these and other troubled debt restructurings in the range of 168 to 183 months. During the same six month period in 2019, the terms of such loans included a reduction of the stated interest rate of the loan in the range of 0.24% and 2.74 % and an extension of the maturity date in the range of 86 to 124 months. The following table presents loans by class modified as troubled debt restructurings that occurred during the three and six month periods ended June 30, 2020 and 2019:
|  |  |  |  |  | Pre- Modification |  |  | Post- Modification |
Three Months Ended June 30, 2020 |  | Number of |  |  | Outstanding Recorded |  |  | Outstanding Recorded |
(In Thousands of Dollars) |  | Loans |  |  | Investment |  |  | Investment |
Originated loans: |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 1 |  |  | $ | 36 |  |  | $ | 36 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Indirect |  |  | 7 |  |  |  | 60 |  |  |  | 60 |
Total originated loans |  |  | 8 |  |  | $ | 96 |  |  | $ | 96 |
Acquired loans: |  |  |  |  |  |  |  |  |  |  |  |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 1 |  |  |  | 12 |  |  |  | 12 |
Total acquired loans |  |  | 1 |  |  | $ | 12 |  |  | $ | 12 |
Total loans |  |  | 9 |  |  | $ | 108 |  |  | $ | 108 |
|  |  |  |  |  | Pre- Modification |  |  | Post- Modification |
Six Months Ended June 30, 2020 |  | Number of |  |  | Outstanding Recorded |  |  | Outstanding Recorded |
(In Thousands of Dollars) |  | Loans |  |  | Investment |  |  | Investment |
Originated loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 1 |  |  | $ | 21 |  |  | $ | 21 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 6 |  |  |  | 245 |  |  |  | 246 |
Home equity lines of credit |  |  | 4 |  |  |  | 100 |  |  |  | 102 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Indirect |  |  | 17 |  |  |  | 121 |  |  |  | 121 |
Other |  |  | 1 |  |  |  | 15 |  |  |  | 15 |
Total originated loans |  |  | 29 |  |  | $ | 502 |  |  | $ | 505 |
Acquired loans: |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 2 |  |  |  | 80 |  |  |  | 80 |
Total acquired loans |  |  | 2 |  |  | $ | 80 |  |  | $ | 80 |
Total loans |  |  | 31 |  |  | $ | 582 |  |  | $ | 585 |
|  |  |  |  |  | Pre- Modification |  |  | Post- Modification |
Three Months Ended June 30, 2019 |  | Number of |  |  | Outstanding Recorded |  |  | Outstanding Recorded |
(In Thousands of Dollars) |  | Loans |  |  | Investment |  |  | Investment |
Originated loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 1 |  |  | $ | 12 |  |  | $ | 12 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 2 |  |  |  | 55 |  |  |  | 55 |
Home equity lines of credit |  |  | 1 |  |  |  | 48 |  |  |  | 48 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Indirect |  |  | 12 |  |  |  | 85 |  |  |  | 85 |
Other |  |  | 1 |  |  |  | 18 |  |  |  | 18 |
Total originated loans |  |  | 17 |  |  | $ | 218 |  |  | $ | 218 |
Acquired loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Farmland |  |  | 1 |  |  |  | 86 |  |  |  | 86 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 1 |  |  |  | 24 |  |  |  | 24 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Other |  |  | 3 |  |  |  | 14 |  |  |  | 14 |
Total acquired loans |  |  | 5 |  |  | $ | 124 |  |  | $ | 124 |
Total loans |  |  | 22 |  |  | $ | 342 |  |  | $ | 342 |
|  |  |  |  |  | Pre- Modification |  |  | Post- Modification |
Six Months Ended June 30, 2019 |  | Number of |  |  | Outstanding Recorded |  |  | Outstanding Recorded |
(In Thousands of Dollars) |  | Loans |  |  | Investment |  |  | Investment |
Originated loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 1 |  |  | $ | 12 |  |  | $ | 12 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 5 |  |  |  | 128 |  |  |  | 130 |
Home equity lines of credit |  |  | 2 |  |  |  | 88 |  |  |  | 88 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Indirect |  |  | 24 |  |  |  | 190 |  |  |  | 190 |
Other |  |  | 1 |  |  |  | 18 |  |  |  | 18 |
Total originated loans |  |  | 33 |  |  | $ | 436 |  |  | $ | 438 |
Acquired loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |
Farmland |  |  | 1 |  |  |  | 86 |  |  |  | 86 |
Residential real estate |  |  |  |  |  |  |  |  |  |  |  |
1-4 family residential |  |  | 3 |  |  |  | 75 |  |  |  | 79 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |
Other |  |  | 3 |  |  |  | 14 |  |  |  | 14 |
Total acquired loans |  |  | 7 |  |  | $ | 175 |  |  | $ | 179 |
Total loans |  |  | 40 |  |  | $ | 611 |  |  | $ | 617 |
There were $34 thousand and $39 thousand in charge offs and a $32 thousand and $37 thousand increase to the provision for loan losses during the three and six month periods ended June 30, 2020, respectively, as a result of outstanding troubled debt restructurings. There were $44 thousand and $51 thousand in charge offs during the three and six month periods ended June 30, 2019, respectively. There was a $44 thousand and a $51 thousand increase to the provision during the three and six month period ended June 30, 2019, respectively, as a result of troubled debt restructurings. There were two commercial farmland loans and one commercial loan for which there was a payment default within twelve months following the modification of the troubled debt restructuring during the three month and six month period ended June 30, 2020. There were two commercial farmland loans past due at June 30, 2020. There was no provision recorded as a result of the defaults during 2020. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. There were four commercial loans, one residential real estate loan, one home equity line of credit and one indirect loan for which there was a payment default within twelve months following the modification of the troubled debt restructuring during the three month and six month periods ended June 30, 2019. There was no provision recorded as a result of the defaults during 2019. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. Farmers is offering special financial assistance to support customers who are experiencing financial hardships related to the COVID-19 pandemic. The following table reports the number and amount of payment deferrals by loan type as of dates listed:
| March 31, 2020 | June 30, 2020 | July 24, 2020
| Outstanding Balance | Number of Loans | Outstanding Balance | Number of Loans | Outstanding Balance | Number of Loans
Commercial real estate | $75,809 | 78 | $43,954 | 44 | $27,717 | 17
Commercial | 11,839 | 81 | 8,515 | 69 | 5,848 | 36
Agricultural | 1,492 | 11 | 8,340 | 22 | 2,505 | 12
Residential real estate | 5,506 | 41 | 3,785 | 37 | 1,397 | 15
Consumer | 2,840 | 127 | 1,858 | 100 | 539 | 36
Total | $97,486 | 338 | $66,452 | 272 | $38,006 | 116
The Company offered three month deferrals upon request by the borrowers. The deferral requests began in the middle of March, 2020 and concluded at the end of the three month deferral period. The decline in deferred loans and balances was due to the ending of the deferment period and that not all borrowers requested additional deferment. The Company has granted a second three month deferral period to $23.8 million in commercial real estate loans and $5.7 million in commercial loans, which are included in the amounts detailed above. The second deferral period was offered to a select group of customers within specific industry codes that may have a higher credit risk. The Company anticipates that there will be a limited number of business customers with a total of a six month deferral period. Farmers is also a preferred SBA lender and dedicated significant additional staff and other resources to help our customers complete and submit their applications and supporting documentation for loans offered under the new Paycheck Protection Program (PPP) under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, so they could obtain SBA approval and receive funding as quickly as possible. At June 30, 2020, the Company had facilitated PPP assistance to 1,675 business customers with an outstanding balance at June 30, 2020, totaling $199.1 million.

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