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LOANS | 12 Months Ended
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Dec. 31, 2019
Receivables [Abstract] |
LOANS | LOANS The Company’s loan portfolio is comprised of the following segments: commercial real estate, commercial and industrial, residential real estate, and consumer loans. Commercial real estate loans include multi-family, commercial construction and land development, and other commercial real estate classes. Commercial and industrial loans include loans to commercial and agricultural businesses, and tax exempt entities. Residential real estate loans consist of mortgages for 1-to-4 family housing. Consumer loans include home equity loans, auto and other installment loans. The Company’s lending activities are principally conducted in Maine, New Hampshire, and Vermont. Total loans include business activity loans and acquired loans. Acquired loans are those loans previously acquired from a business combination. The following is a summary of total loans:
|  | December 31, 2019 |  | December 31, 2018
(in thousands) |  | Business Activities Loans |  | Acquired Loans |  | Total |  | Business Activities Loans |  | Acquired Loans |  | Total
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 31,387 |  |  | $ | 2,903 |  |  | $ | 34,290 |  |  | $ | 23,754 |  |  | $ | 2,890 |  |  | $ | 26,644 |
Other commercial real estate |  | 666,051 |  |  | 230,320 |  |  | 896,371 |  |  | 555,980 |  |  | 244,075 |  |  | 800,055 |
Total commercial real estate |  | 697,438 |  |  | 233,223 |  |  | 930,661 |  |  | 579,734 |  |  | 246,965 |  |  | 826,699 |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 239,692 |  |  | 59,072 |  |  | 298,764 |  |  | 234,757 |  |  | 52,470 |  |  | 287,227 |
Agricultural |  | 20,018 |  |  | 206 |  |  | 20,224 |  |  | 22,317 |  |  | — |  |  | 22,317 |
Tax exempt |  | 66,860 |  |  | 37,443 |  |  | 104,303 |  |  | 56,588 |  |  | 38,738 |  |  | 95,326 |
Total commercial and industrial |  | 326,570 |  |  | 96,721 |  |  | 423,291 |  |  | 313,662 |  |  | 91,208 |  |  | 404,870 |
Total commercial loans |  | 1,024,008 |  |  | 329,944 |  |  | 1,353,952 |  |  | 893,396 |  |  | 338,173 |  |  | 1,231,569 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgages |  | 740,687 |  |  | 411,170 |  |  | 1,151,857 |  |  | 670,189 |  |  | 474,509 |  |  | 1,144,698 |
Total residential real estate |  | 740,687 |  |  | 411,170 |  |  | 1,151,857 |  |  | 670,189 |  |  | 474,509 |  |  | 1,144,698 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  | 59,368 |  |  | 63,033 |  |  | 122,401 |  |  | 57,898 |  |  | 45,291 |  |  | 103,189 |
Other consumer |  | 11,167 |  |  | 1,715 |  |  | 12,882 |  |  | 9,414 |  |  | 1,357 |  |  | 10,771 |
Total consumer |  | 70,535 |  |  | 64,748 |  |  | 135,283 |  |  | 67,312 |  |  | 46,648 |  |  | 113,960 |
Total loans |  | $ | 1,835,230 |  |  | $ | 805,862 |  |  | $ | 2,641,092 |  |  | $ | 1,630,897 |  |  | $ | 859,330 |  |  | $ | 2,490,227 |
Total unamortized net costs and premiums included in the year-end total for business activity loans were as follows:
(in thousands) |  | December 31, 2019 |  | December 31, 2018
Unamortized net loan origination costs |  | $ | 3,603 |  |  | $ | 3,064 |
Unamortized net premium on purchased loans |  | (134 | ) |  | (127 | )
Total unamortized net costs and premiums |  | $ | 3,469 |  |  | $ | 2,937 |
For the year ended December 31, 2019, the Company had pledged loans with a collateral value totaling $144.2 million to the Federal Reserve Bank of Boston for certain borrowing arrangements. The Company also pledged residential first mortgage loans, home equity loans and certain commercial loans with collateral value totaling $955.7 million for FHLB borrowings for the year ended December 31, 2019. (See Note 8 - Borrowed Funds of the Company's Consolidated Financial Statements.) The carrying amount of the acquired loans at December 31, 2019 totaled $805.9 million. A subset of these loans was determined to have evidence of credit deterioration at the acquisition date, which is accounted for in accordance with ASC 310-30. These purchased credit-impaired loans presently maintain a carrying value of $16.6 million (and a note balance of $21.8 million). These loans are evaluated for impairment through the periodic reforecasting of expected cash flows. Loans considered not impaired at acquisition date had a carrying amount of $789.2 million. The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer:
|  | Twelve Months Ended December 31,
(in thousands) |  | 2019 |  | 2018
Balance at beginning of period |  | $ | 4,377 |  |  | $ | 3,509 |
Acquisitions |  | 4,391 |  |  | — |
Reclassification from nonaccretable difference for loans with improved cash flows |  | 541 |  |  | 2,240 |
Changes in expected cash flows that do not affect the nonaccretable difference |  | — |  |  | — |
Reclassification to TDR |  | — |  |  | (30 | )
Accretion |  | (1,942 | ) |  | (1,342 | )
Balance at end of period |  | $ | 7,367 |  |  | $ | 4,377 |
The following is a summary of past due loans at December 31, 2019 and December 31, 2018: Business Activities Loans
(in thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Current |  | Total Loans |  | Past Due > 90 days and Accruing
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 205 |  |  | $ | 53 |  |  | $ | — |  |  | $ | 258 |  |  | $ | 31,129 |  |  | $ | 31,387 |  |  | $ | — |
Other commercial real estate |  | 40 |  |  | 1,534 |  |  | 1,810 |  |  | 3,384 |  |  | 662,667 |  |  | 666,051 |  |  | — |
Total commercial real estate |  | 245 |  |  | 1,587 |  |  | 1,810 |  |  | 3,642 |  |  | 693,796 |  |  | 697,438 |  |  | — |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 452 |  |  | 50 |  |  | 894 |  |  | 1,396 |  |  | 238,296 |  |  | 239,692 |  |  | — |
Agricultural |  | 62 |  |  | 34 |  |  | 96 |  |  | 192 |  |  | 19,826 |  |  | 20,018 |  |  | — |
Tax exempt |  | — |  |  | — |  |  | — |  |  | — |  |  | 66,860 |  |  | 66,860 |  |  | — |
Total commercial and industrial |  | 514 |  |  | 84 |  |  | 990 |  |  | 1,588 |  |  | 324,982 |  |  | 326,570 |  |  | — |
Total commercial loans |  | 759 |  |  | 1,671 |  |  | 2,800 |  |  | 5,230 |  |  | 1,018,778 |  |  | 1,024,008 |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgages |  | 7,293 |  |  | 1,243 |  |  | 668 |  |  | 9,204 |  |  | 731,483 |  |  | 740,687 |  |  | — |
Total residential real estate |  | 7,293 |  |  | 1,243 |  |  | 668 |  |  | 9,204 |  |  | 731,483 |  |  | 740,687 |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  | 597 |  |  | 43 |  |  | 429 |  |  | 1,069 |  |  | 58,299 |  |  | 59,368 |  |  | 50 |
Other consumer |  | 36 |  |  | 12 |  |  | — |  |  | 48 |  |  | 11,119 |  |  | 11,167 |  |  | — |
Total consumer |  | 633 |  |  | 55 |  |  | 429 |  |  | 1,117 |  |  | 69,418 |  |  | 70,535 |  |  | 50 |
Total loans |  | $ | 8,685 |  |  | $ | 2,969 |  |  | $ | 3,897 |  |  | $ | 15,551 |  |  | $ | 1,819,679 |  |  | $ | 1,835,230 |  |  | $ | 50 |
Acquired Loans
(in thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Acquired Credit Impaired |  | Total Loans |  | Past Due > 90 days and Accruing
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | 12 |  |  | $ | — |  |  | $ | 12 |  |  | $ | 384 |  |  | $ | 2,903 |  |  | $ | — |
Other commercial real estate |  | 2,029 |  |  | 245 |  |  | 231 |  |  | 2,505 |  |  | 8,289 |  |  | 230,320 |  |  | — |
Total commercial real estate |  | 2,029 |  |  | 257 |  |  | 231 |  |  | 2,517 |  |  | 8,673 |  |  | 233,223 |  |  | — |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 440 |  |  | 335 |  |  | 140 |  |  | 915 |  |  | 2,723 |  |  | 59,072 |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |  |  | — |  |  | 173 |  |  | 206 |  |  | — |
Tax exempt |  | — |  |  | — |  |  | — |  |  | — |  |  | 36 |  |  | 37,443 |  |  | — |
Total commercial and industrial |  | 440 |  |  | 335 |  |  | 140 |  |  | 915 |  |  | 2,932 |  |  | 96,721 |  |  | — |
Total commercial loans |  | 2,469 |  |  | 592 |  |  | 371 |  |  | 3,432 |  |  | 11,605 |  |  | 329,944 |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgages |  | 3,185 |  |  | 864 |  |  | 1,015 |  |  | 5,064 |  |  | 5,591 |  |  | 411,170 |  |  | — |
Total residential real estate |  | 3,185 |  |  | 864 |  |  | 1,015 |  |  | 5,064 |  |  | 5,591 |  |  | 411,170 |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  | 208 |  |  | 548 |  |  | 217 |  |  | 973 |  |  | 1,291 |  |  | 63,033 |  |  | 217 |
Other consumer |  | 2 |  |  | 9 |  |  | — |  |  | 11 |  |  | 66 |  |  | 1,715 |  |  | — |
Total consumer |  | 210 |  |  | 557 |  |  | 217 |  |  | 984 |  |  | 1,357 |  |  | 64,748 |  |  | 217 |
Total loans |  | $ | 5,864 |  |  | $ | 2,013 |  |  | $ | 1,603 |  |  | $ | 9,480 |  |  | $ | 18,553 |  |  | $ | 805,862 |  |  | $ | 217 |
Business Activities Loans
(in thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Current |  | Total Loans |  | Past Due > 90 days and Accruing
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 23,754 |  |  | $ | 23,754 |  |  | $ | — |
Other commercial real estate |  | 1,146 |  |  | — |  |  | 6,725 |  |  | 7,871 |  |  | 548,109 |  |  | 555,980 |  |  | — |
Total commercial real estate |  | 1,146 |  |  | — |  |  | 6,725 |  |  | 7,871 |  |  | 571,863 |  |  | 579,734 |  |  | — |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 395 |  |  | 60 |  |  | 402 |  |  | 857 |  |  | 233,900 |  |  | 234,757 |  |  | 50 |
Agricultural |  | 65 |  |  | 6 |  |  | 25 |  |  | 96 |  |  | 22,221 |  |  | 22,317 |  |  | — |
Tax exempt |  | — |  |  | — |  |  | — |  |  | — |  |  | 56,588 |  |  | 56,588 |  |  | — |
Total commercial and industrial |  | 460 |  |  | 66 |  |  | 427 |  |  | 953 |  |  | 312,709 |  |  | 313,662 |  |  | 50 |
Total commercial loans |  | 1,606 |  |  | 66 |  |  | 7,152 |  |  | 8,824 |  |  | 884,572 |  |  | 893,396 |  |  | 50 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgages |  | 3,565 |  |  | 641 |  |  | 1,309 |  |  | 5,515 |  |  | 664,674 |  |  | 670,189 |  |  | — |
Total residential real estate |  | 3,565 |  |  | 641 |  |  | 1,309 |  |  | 5,515 |  |  | 664,674 |  |  | 670,189 |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  | 72 |  |  | — |  |  | — |  |  | 72 |  |  | 57,826 |  |  | 57,898 |  |  | — |
Other consumer |  | 17 |  |  | — |  |  | 11 |  |  | 28 |  |  | 9,386 |  |  | 9,414 |  |  | — |
Total consumer |  | 89 |  |  | — |  |  | 11 |  |  | 100 |  |  | 67,212 |  |  | 67,312 |  |  | — |
Total loans |  | $ | 5,260 |  |  | $ | 707 |  |  | $ | 8,472 |  |  | $ | 14,439 |  |  | $ | 1,616,458 |  |  | $ | 1,630,897 |  |  | $ | 50 |
Acquired Loans
(in thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due |  | Total Past Due |  | Acquired Credit Impaired |  | Total Loans |  | Past Due > 90 days and Accruing
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 164 |  |  | $ | 2,890 |  |  | $ | — |
Other commercial real estate |  | 631 |  |  | 99 |  |  | 211 |  |  | 941 |  |  | 6,143 |  |  | 244,075 |  |  | — |
Total commercial real estate |  | 631 |  |  | 99 |  |  | 211 |  |  | 941 |  |  | 6,307 |  |  | 246,965 |  |  | — |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 149 |  |  | 26 |  |  | 494 |  |  | 669 |  |  | 679 |  |  | 52,470 |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Tax exempt |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 38,738 |  |  | — |
Total commercial and industrial |  | 149 |  |  | 26 |  |  | 494 |  |  | 669 |  |  | 679 |  |  | 91,208 |  |  | — |
Total commercial loans |  | 780 |  |  | 125 |  |  | 705 |  |  | 1,610 |  |  | 6,986 |  |  | 338,173 |  |  | — |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgages |  | 3,419 |  |  | 254 |  |  | 1,792 |  |  | 5,465 |  |  | 3,095 |  |  | 474,509 |  |  | 189 |
Total residential real estate |  | 3,419 |  |  | 254 |  |  | 1,792 |  |  | 5,465 |  |  | 3,095 |  |  | 474,509 |  |  | 189 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  | 198 |  |  | — |  |  | 66 |  |  | 264 |  |  | 22 |  |  | 45,291 |  |  | 7 |
Other consumer |  | 17 |  |  | — |  |  | — |  |  | 17 |  |  | 3 |  |  | 1,357 |  |  | — |
Total consumer |  | 215 |  |  | — |  |  | 66 |  |  | 281 |  |  | 25 |  |  | 46,648 |  |  | 7 |
Total loans |  | $ | 4,414 |  |  | $ | 379 |  |  | $ | 2,563 |  |  | $ | 7,356 |  |  | $ | 10,106 |  |  | $ | 859,330 |  |  | $ | 196 |
Non-Accrual Loans The following is summary information pertaining to non-accrual loans at December 31, 2019 and December 31, 2018:
|  | December 31, 2019 |  | December 31, 2018
(in thousands) |  | Business Activities Loans |  | Acquired Loans |  | Total |  | Business Activities Loans |  | Acquired Loans |  | Total
Commercial real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | 258 |  |  | $ | — |  |  | $ | 258 |  |  | $ | 1 |  |  | $ | — |  |  | $ | 1 |
Other commercial real estate |  | 2,888 |  |  | 343 |  |  | 3,231 |  |  | 7,873 |  |  | 282 |  |  | 8,155 |
Total commercial real estate |  | 3,146 |  |  | 343 |  |  | 3,489 |  |  | 7,874 |  |  | 282 |  |  | 8,156 |
Commercial and industrial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | 932 |  |  | 626 |  |  | 1,558 |  |  | 1,423 |  |  | 643 |  |  | 2,066 |
Agricultural |  | 278 |  |  | — |  |  | 278 |  |  | 265 |  |  | — |  |  | 265 |
Tax exempt |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total commercial and industrial |  | 1,210 |  |  | 626 |  |  | 1,836 |  |  | 1,688 |  |  | 643 |  |  | 2,331 |
Total commercial loans |  | 4,356 |  |  | 969 |  |  | 5,325 |  |  | 9,562 |  |  | 925 |  |  | 10,487 |
Residential real estate: |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgages |  | 3,362 |  |  | 1,973 |  |  | 5,335 |  |  | 4,213 |  |  | 2,997 |  |  | 7,210 |
Total residential real estate |  | 3,362 |  |  | 1,973 |  |  | 5,335 |  |  | 4,213 |  |  | 2,997 |  |  | 7,210 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Home equity |  | 615 |  |  | 254 |  |  | 869 |  |  | 246 |  |  | 201 |  |  | 447 |
Other consumer |  | 21 |  |  | — |  |  | 21 |  |  | 90 |  |  | 1 |  |  | 91 |
Total consumer |  | 636 |  |  | 254 |  |  | 890 |  |  | 336 |  |  | 202 |  |  | 538 |
Total loans |  | $ | 8,354 |  |  | $ | 3,196 |  |  | $ | 11,550 |  |  | $ | 14,111 |  |  | $ | 4,124 |  |  | $ | 18,235 |
Loans evaluated for impairment by portfolio segment as of December 31, 2019 and December 31, 2018 were as follows: Business Activities Loans
(in thousands) |  | Commercial real estate |  | Commercial and industrial |  | Residential real estate |  | Consumer |  | Total
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 3,964 |  |  | $ | 1,353 |  |  | $ | 2,620 |  |  | $ | 13 |  |  | $ | 7,950 |
Collectively evaluated |  | 693,474 |  |  | 325,217 |  |  | 738,067 |  |  | 70,522 |  |  | 1,827,280 |
Total |  | $ | 697,438 |  |  | $ | 326,570 |  |  | $ | 740,687 |  |  | $ | 70,535 |  |  | $ | 1,835,230 |
Acquired Loans
(in thousands) |  | Commercial real estate |  | Commercial and industrial |  | Residential real estate |  | Consumer |  | Total
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 258 |  |  | $ | 385 |  |  | $ | 1,032 |  |  | $ | — |  |  | $ | 1,675 |
Purchased credit impaired |  | 8,673 |  |  | 2,932 |  |  | 5,591 |  |  | 1,357 |  |  | 18,553 |
Collectively evaluated |  | 224,292 |  |  | 93,404 |  |  | 404,547 |  |  | 63,391 |  |  | 785,634 |
Total |  | $ | 233,223 |  |  | $ | 96,721 |  |  | $ | 411,170 |  |  | $ | 64,748 |  |  | $ | 805,862 |
Business Activities Loans
(in thousands) |  | Commercial real estate |  | Commercial and industrial |  | Residential real estate |  | Consumer |  | Total
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 9,835 |  |  | $ | 1,445 |  |  | $ | 2,562 |  |  | $ | 13 |  |  | $ | 13,855 |
Collectively evaluated |  | 569,899 |  |  | 312,217 |  |  | 667,627 |  |  | 67,299 |  |  | 1,617,042 |
Total |  | $ | 579,734 |  |  | $ | 313,662 |  |  | $ | 670,189 |  |  | $ | 67,312 |  |  | $ | 1,630,897 |
Acquired Loans
(in thousands) |  | Commercial real estate |  | Commercial and industrial |  | Residential real estate |  | Consumer |  | Total
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 188 |  |  | $ | 426 |  |  | $ | 744 |  |  | $ | — |  |  | $ | 1,358 |
Purchased credit impaired |  | 6,307 |  |  | 679 |  |  | 3,095 |  |  | 25 |  |  | 10,106 |
Collectively evaluated |  | 240,470 |  |  | 90,103 |  |  | 470,670 |  |  | 46,623 |  |  | 847,866 |
Total |  | $ | 246,965 |  |  | $ | 91,208 |  |  | $ | 474,509 |  |  | $ | 46,648 |  |  | $ | 859,330 |
The following is a summary of impaired loans at December 31, 2019 and December 31, 2018: Business Activities Loans
|  | December 31, 2019
(in thousands) |  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With no related allowance: |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 1,911 |  |  | 1,957 |  |  | — |
Commercial |  | 710 |  |  | 773 |  |  | — |
Agricultural |  | 361 |  |  | 361 |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 2,067 |  |  | 2,227 |  |  | — |
Home equity |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
With an allowance recorded: |  |  |  |  |  |
Construction and land development |  | $ | 258 |  |  | $ | 258 |  |  | $ | 205 |
Other commercial real estate |  | 1,795 |  |  | 1,940 |  |  | 1,026 |
Commercial |  | 282 |  |  | 289 |  |  | 164 |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 553 |  |  | 590 |  |  | 57 |
Home equity |  | 13 |  |  | 13 |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
Total |  |  |  |  |  |
Commercial real estate |  | $ | 3,964 |  |  | $ | 4,155 |  |  | $ | 1,231 |
Commercial and industrial |  | 1,353 |  |  | 1,423 |  |  | 164 |
Residential real estate |  | 2,620 |  |  | 2,817 |  |  | 57 |
Consumer |  | 13 |  |  | 13 |  |  | — |
Total impaired loans |  | $ | 7,950 |  |  | $ | 8,408 |  |  | $ | 1,452 |
Acquired Loans
|  | December 31, 2019
(in thousands) |  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With no related allowance: |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 90 |  |  | 90 |  |  | — |
Commercial |  | 385 |  |  | 481 |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 678 |  |  | 938 |  |  | — |
Home equity |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
With an allowance recorded: |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 168 |  |  | 168 |  |  | 12 |
Commercial |  | — |  |  | — |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 354 |  |  | 376 |  |  | 49 |
Home equity |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
Total |  |  |  |  |  |
Commercial real estate |  | $ | 258 |  |  | $ | 258 |  |  | $ | 12 |
Commercial and industrial |  | 385 |  |  | 481 |  |  | — |
Residential real estate |  | 1,032 |  |  | 1,314 |  |  | 49 |
Consumer |  | — |  |  | — |  |  | — |
Total impaired loans |  | $ | 1,675 |  |  | $ | 2,053 |  |  | $ | 61 |
Business Activities Loans
|  | December 31, 2018
(in thousands) |  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With no related allowance: |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 8,209 |  |  | 8,301 |  |  | — |
Commercial |  | 649 |  |  | 669 |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 1,671 |  |  | 1,709 |  |  | — |
Home equity |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
With an allowance recorded: |  |  |  |  |  |
Construction and land development |  | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |
Other commercial real estate |  | 1,625 |  |  | 1,660 |  |  | 421 |
Commercial |  | 796 |  |  | 855 |  |  | 78 |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 891 |  |  | 916 |  |  | 111 |
Home equity |  | 13 |  |  | 13 |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
Total |  |  |  |  |  |
Commercial real estate |  | $ | 9,835 |  |  | $ | 9,962 |  |  | $ | 422 |
Commercial and industrial |  | 1,445 |  |  | 1,524 |  |  | 78 |
Residential real estate |  | 2,562 |  |  | 2,625 |  |  | 111 |
Consumer |  | 13 |  |  | 13 |  |  | — |
Total impaired loans |  | $ | 13,855 |  |  | $ | 14,124 |  |  | $ | 611 |
Acquired Loans
|  | December 31, 2018
(in thousands) |  | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance
With no related allowance: |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 188 |  |  | 187 |  |  | — |
Commercial |  | 426 |  |  | 510 |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 375 |  |  | 524 |  |  | — |
Home equity |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
With an allowance recorded: |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | — |  |  | — |  |  | — |
Commercial |  |  |  |  | — |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |
Residential real estate |  | 369 |  |  | 379 |  |  | 41 |
Home equity |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |
Total |  |  |  |  |  |
Commercial real estate |  | $ | 188 |  |  | $ | 187 |  |  | $ | — |
Commercial and industrial |  | 426 |  |  | 510 |  |  | — |
Residential real estate |  | 744 |  |  | 903 |  |  | 41 |
Consumer |  | — |  |  | — |  |  | — |
Total impaired loans |  | $ | 1,358 |  |  | $ | 1,600 |  |  | $ | 41 |
The following is a summary of the average recorded investment and interest income recognized on impaired loans as of December 31, 2019 and December 31, 2018: Business Activities Loan
|  | Twelve Months Ended December 31, 2019 |  | Twelve Months Ended December 31, 2018
(in thousands) |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 5,434 |  |  | 55 |  |  | 6,878 |  |  | 77 |
Commercial |  | 871 |  |  | 5 |  |  | 634 |  |  | 9 |
Agricultural |  | — |  |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |  |  | — |
Residential real estate |  | 2,089 |  |  | 47 |  |  | 1,693 |  |  | 39 |
Home equity |  | — |  |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |
With an allowance recorded: |  |  |  |  |  |  |  |
Construction and land development |  | $ | 56 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | — |
Other commercial real estate |  | 1,737 |  |  | — |  |  | 1,140 |  |  | — |
Commercial |  | 153 |  |  | — |  |  | 735 |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |  |  | — |
Residential real estate |  | 540 |  |  | 7 |  |  | 826 |  |  | 9 |
Home equity |  | 13 |  |  | — |  |  | 13 |  |  | 1 |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |
Total |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 7,227 |  |  | $ | 56 |  |  | $ | 8,019 |  |  | $ | 77 |
Commercial and industrial |  | 1,024 |  |  | 5 |  |  | 1,369 |  |  | 9 |
Residential real estate |  | 2,629 |  |  | 54 |  |  | 2,519 |  |  | 48 |
Consumer |  | 13 |  |  | — |  |  | 13 |  |  | 1 |
Total impaired loans |  | $ | 10,893 |  |  | $ | 115 |  |  | $ | 11,920 |  |  | $ | 135 |
Acquired Loans
|  | Twelve Months Ended December 31, 2019 |  | Twelve Months Ended December 31, 2018
(in thousands) |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 89 |  |  | — |  |  | 112 |  |  | 1 |
Commercial |  | 429 |  |  | — |  |  | 441 |  |  | 1 |
Agricultural |  | — |  |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |  |  | — |
Residential real estate |  | 652 |  |  | — |  |  | 442 |  |  | — |
Home equity |  | — |  |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |
With an allowance recorded: |  |  |  |  |  |  |  |
Construction and land development |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 123 |  |  | — |  |  | — |  |  | — |
Commercial |  | — |  |  | — |  |  | — |  |  | — |
Agricultural |  | — |  |  | — |  |  | — |  |  | — |
Tax exempt loans |  | — |  |  | — |  |  | — |  |  | — |
Residential real estate |  | 361 |  |  | — |  |  | 218 |  |  | 3 |
Home equity |  | — |  |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |
Total |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 212 |  |  | $ | — |  |  | $ | 112 |  |  | $ | 1 |
Commercial and industrial |  | 429 |  |  | — |  |  | 441 |  |  | 1 |
Residential real estate |  | 1,013 |  |  | — |  |  | 660 |  |  | 3 |
Consumer |  | — |  |  | — |  |  | — |  |  | — |
Total impaired loans |  | $ | 1,654 |  |  | $ | — |  |  | $ | 1,213 |  |  | $ | 5 |
Troubled Debt Restructuring Loans The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as non-performing at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan. The following tables include the recorded investment and number of modifications identified during the twelve months ended December 31, 2019, 2018 and 2017, respectively. The table includes the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured. Modifications may include adjustments to interest rates, payment amounts, extensions of maturity, court ordered concessions or other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral.
|  | Twelve Months Ended December 31, 2019
(in thousands, except modifications) |  | Number of Modifications |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Specific Reserve
Troubled Debt Restructurings |  |  |  |  |  |  |  |  |  |  |
Construction and land development |  | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Other commercial real estate |  | 10 |  |  | 630 |  |  | 529 |  |  | 69 |
Other commercial |  | 7 |  |  | 366 |  |  | 271 |  |  | — |
Agricultural |  | 2 |  |  | 500 |  |  | 503 |  |  | — |
Tax exempt |  | — |  |  | — |  |  | — |  |  | — |
Residential mortgages |  | 12 |  |  | 1,427 |  |  | 1,327 |  |  | — |
Home equity |  | — |  |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |
Total |  | 31 |  |  | $ | 2,923 |  |  | $ | 2,630 |  |  | $ | 69 |
|  | Twelve Months Ended December 31, 2018
(in thousands, except modifications) |  | Number of Modifications |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Specific Reserve
Troubled Debt Restructurings |  |  |  |  |  |  |  |  |
Construction and land development |  | 1 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 1 |
Other commercial real estate |  | 9 |  |  | 1,896 |  |  | 1,564 |  |  | 153 |
Other commercial |  | 7 |  |  | 556 |  |  | 486 |  |  | 55 |
Agricultural |  | 1 |  |  | 167 |  |  | — |  |  | — |
Residential mortgages |  | 19 |  |  | 3,348 |  |  | 2,752 |  |  | 145 |
Home equity |  | 1 |  |  | 100 |  |  | 100 |  |  | — |
Other consumer |  | 3 |  |  | 13 |  |  | 11 |  |  | — |
Total |  | 41 |  |  | $ | 6,081 |  |  | $ | 4,914 |  |  | $ | 354 |
|  | Twelve Months Ended December 31, 2017
(in thousands, except modifications) |  | Number of Modifications |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Specific Reserve
Troubled Debt Restructurings |  |  |  |  |  |  |  |  |
Other commercial real estate |  | 6 |  |  | $ | 388 |  |  | $ | 222 |  |  | $ | — |
Other commercial |  | 6 |  |  | 563 |  |  | 545 |  |  | — |
Agricultural |  | 1 |  |  | 19 |  |  | 18 |  |  | — |
Residential mortgages |  | 3 |  |  | 692 |  |  | 670 |  |  | — |
Home equity |  | 1 |  |  | 13 |  |  | 13 |  |  | — |
Other consumer |  | 1 |  |  | 38 |  |  | 36 |  |  | — |
Total |  | 18 |  |  | $ | 1,713 |  |  | $ | 1,504 |  |  | $ | — |
The following table summarizes the types of loan concessions made for the periods presented:
|  | 2019 |  | 2018 |  | 2017
(in thousands, except modifications) |  | Number of Modifications |  | Post-Modification Outstanding Recorded Investment |  | Number of Modifications |  | Post-Modification Outstanding Recorded Investment |  | Number of Modifications |  | Post-Modification Outstanding Recorded Investment
Interest rate and maturity concession |  | 2 |  |  | $ | 73 |  |  | 1 |  |  | $ | 16 |  |  | 6 |  |  | $ | 725 |
Amortization and maturity concession |  | 4 |  |  | 273 |  |  | 1 |  |  | 286 |  |  | 6 |  |  | 490 |
Amortization concession |  | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 94 |
Amortization, interest rate and maturity concession |  | 5 |  |  | 539 |  |  | — |  |  | — |  |  | 1 |  |  | 36 |
Amortization and interest rate concession |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Forbearance |  | 5 |  |  | 346 |  |  | 3 |  |  | 271 |  |  | — |  |  | — |
Forbearance and interest only payments |  | 7 |  |  | 692 |  |  | 6 |  |  | 121 |  |  | — |  |  | — |
Forbearance and interest rate concession |  | — |  |  | — |  |  | 1 |  |  | 49 |  |  | — |  |  | — |
Forbearance and maturity concession |  | 4 |  |  | 472 |  |  | 20 |  |  | 2,030 |  |  | — |  |  | — |
Maturity concession |  | — |  |  | — |  |  | 2 |  |  | 440 |  |  | — |  |  | — |
Restructure without concession |  | — |  |  | — |  |  | 5 |  |  | 1,419 |  |  | — |  |  | — |
Court ordered |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other |  | 4 |  |  | 235 |  |  | 2 |  |  | 282 |  |  | 4 |  |  | 159 |
Total |  | 31 |  |  | $ | 2,630 |  |  | 41 |  |  | $ | 4,914 |  |  | 18 |  |  | $ | 1,504 |
For the twelve months ended December 31, 2019, 2018 and 2017, there were no loans that were restructured that had subsequently defaulted during the period. The evaluation of certain loans individually for specific impairment includes loans that were previously classified as TDRs or continue to be classified as TDRs. Foreclosure As of December 31, 2019 and December 31, 2018, the Company maintained bank-owned residential real estate property with a fair value of $2.2 million and $2.4 million, respectively. Additionally, residential mortgage loans collateralized by real estate property that are in the process of foreclosure as of December 31, 2019 and December 31, 2018 totaled $810 thousand and $1.5 million, respectively. Loan Concentrations Loan concentrations in specific industries may occasionally emerge as a result of economic conditions, changes in local demands, natural loan growth and runoff. At December 31, 2019 the largest industry concentration outside of commercial real estate was the hospitality industry which represents 8.6% or $227.0 million of the Company's total loan portfolio, compared with 9.0% or $223.0 million at December 31, 2018. There were no concentrations of loans related to any single industry in excess of 10% of total loans for 2019 or 2018. Loans to Related Parties In the ordinary course of business, the Bank has made loans at prevailing rates and terms to directors, officers and other related parties. In management’s opinion, such loans do not present more than the normal risk of collectability or incorporate other unfavorable features, and were made under terms that are consistent with the Bank’s lending policies. Loan to related parties at December 31, 2019 and December 31, 2018 are summarized below.
(in thousands) |  | 2019 |  | 2018
Beginning balance |  | $ | 8,395 |  |  | $ | 10,487 |
Changes in composition(1) |  | (302 | ) |  | — |
New Loans |  | 242 |  |  | — |
Less: repayments |  | (126 | ) |  | (2,092 | )
Ending balance |  | $ | 8,209 |  |  | $ | 8,395 |
______________________________________ (1) Adjustments to reflect changes in status of directors and officers for each year presented. Mortgage Banking The Bank sells loans in the secondary market and retains the ability to service many of these loans. The Bank earns fees for the servicing provided. At year end 2019 and 2018, the Company was servicing loans for participants totaling $497.2 million and $496.5 million, respectively. Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in servicing assets relate primarily to changes in prepayments that result from shifts in interest rates. Contractually-specified servicing fees were $1.3 million, $1.3 million, and $1.2 million for the years ended 2019, 2018, and 2017, respectively, and is included as a component of other income within non-interest income. Servicing rights activity during 2019 and 2018, included in other assets, was as follows:
|  | At or for the Twelve Months Ended December 31,
(in thousands) |  | 2019 |  | 2018
Balance at beginning of year |  | $ | 3,086 |  |  | $ | 3,232 |
Acquired |  | — |  |  | — |
Additions |  | 160 |  |  | 99 |
Amortization |  | (245 | ) |  | (245 | )
Balance at end of year |  | $ | 3,001 |  |  | $ | 3,086 |
Total residential loans included held for sale loans of $6.5 million and $168 thousand at December 31, 2019 and 2018, respectively. The net gains on sales of loans at December 31, 2019 and 2018 were $493 thousand and $121 thousand, respectively, and included as a component of other income within non-interest income.

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