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LOANS AND ALLOWANCE FOR CREDIT LOSSES | 9 Months Ended
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Sep. 30, 2021
LOANS AND ALLOWANCE FOR CREDIT LOSSES |
LOANS AND ALLOWANCE FOR CREDIT LOSSES | NOTE 3. LOANS AND ALLOWANCE FOR CREDIT LOSSES ​ Upon adoption of ASC 326 or CECL, at January 1, 2021, the Company evaluates its risk characteristics of loans based on regulatory call report code with segmentation based on the underlying collateral for certain loan types. Prior to the adoption of ASC 326, under the incurred loss model, the Company evaluated its risk characteristics of loans based on purpose of the loans. ​ The following is a summary of total loans by regulatory call report code segmentation based on underlying collateral for certain loan types: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
(in thousands) |  | 2021 |  | 2020
Commercial construction | ​ | $ | 152,700 | ​ | $ | 117,882
Commercial real estate owner occupied | ​ |  | 253,792 | ​ |  | 219,217
Commercial real estate non-owner occupied | ​ |  | 733,353 | ​ |  | 716,776
Tax exempt | ​ |  | 42,448 | ​ |  | 47,862
Commercial and industrial | ​ |  | 336,989 | ​ |  | 355,684
Residential real estate | ​ |  | 917,301 | ​ |  | 995,216
Home equity | ​ |  | 88,002 | ​ |  | 100,096
Consumer other | ​ |  | 9,569 | ​ |  | 10,152
Total loans | ​ |  | 2,534,154 | ​ |  | 2,562,885
Allowance for credit losses | ​ |  | 22,448 | ​ |  | 19,082
Net loans | ​ | $ | 2,511,706 | ​ | $ | 2,543,803
​ Total unamortized net costs and premiums included in loan totals were as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, | ​ | December 31,
(in thousands) |  | 2021 |  | 2020
Unamortized net loan origination costs | ​ | $ | 4,015 | ​ | $ | 5,157
Unamortized net premium on purchased loans | ​ |  | (65) | ​ |  | (85)
Total unamortized net costs and premiums | ​ | $ | 3,950 | ​ | $ | 5,072
​ The Company elected to exclude accrued interest receivable from the amortized cost basis of loans disclosed throughout this footnote. As of September 30, 2021 and December 31, 2020, accrued interest receivable for loans totaled $8.7 million and $11.4 million, respectively, and is included in the “other assets” line item on the Company’s consolidated balance sheets. ​ The CARES Act and subsequent legislation established the Payroll Protection Program (PPP), administered directly by the Small Business Administration (SBA). The Company has participated in both 2020 and 2021 rounds of funding. As of September 30, 2021 and December 31, 2020, the Company had 404 and 746 PPP loans outstanding, with an outstanding principal balance of $24.2 million and $53.8 million, respectively. The PPP loans are fully guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible costs. PPP loans are included in the commercial and industrial portfolio segment. ​ Characteristics of each loan portfolio segment are as follows: ​ Commercial construction - Loans in this segment primarily include raw land, land development and construction of commercial and multifamily residential properties. Collateral values are determined based upon appraisals and evaluations of the completed structure in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy guidelines that are more restrictive than existing structures. Construction loans are primarily paid by the cash flow generated from the completed structure, such as operating leases, rents, or other operating cash flows from the borrower. ​ Commercial real estate owner occupied and non-owner occupied - Loans in these segments are primarily owner-occupied or income-producing properties. Loans to Real Estate Investment Trusts (REITs) and unsecured loans to developers that closely correlate to the inherent risk in commercial real estate markets are also included. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Commercial real estate loans are primarily paid by the cash flow generated from the real property, such as operating leases, rents, or other operating cash flows from the borrower. ​ Tax Exempt - Loans in this segment primarily include loans to various state and municipal government entities. Loans made in these borrowers may provide the Company with tax-exempt income. While governed and underwritten similar to commercial loans they do have unique requirements based on established polices. Almost all state and municipal loans are considered a general obligation of the issuing entity. Given the size of many municipal borrowers, borrowings are normally not rated by major rating agencies. ​ Commercial and industrial loans - Loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment in this segment. Generally loans are secured by assets of the business such as accounts receivable, inventory, marketable securities, other liquid collateral, equipment and other business assets. Some loans in this category may be unsecured or guaranteed by government agencies such as the SBA. Loans are primarily paid by the operating cash flow of the borrower. ​ Residential real estate - All loans in this segment are collateralized by one-to-four family homes. Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to various underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. ​ Home equity - All loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. The home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. ​ Consumer other - Loans in this segment include personal lines of credit and amortizing loans made to qualified individuals for various purposes such as auto loans, recreational equipment, overdraft protection or other consumer loans. Borrower qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. ​ Allowance for Credit Losses The Allowance for Credit Losses (ACL) is comprised of the allowance for loan losses and the allowance for unfunded commitments which is accounted for as a separate liability in other liabilities on the balance sheet. The level of the ACL represents management’s estimate of expected credit losses over the expected life of the loans at the balance sheet date. ​ Upon adoption of CECL on January 1, 2021, the Company replaced the incurred loss impairment model that recognizes losses when it becomes probable that a credit loss will be incurred, with a requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased. The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of loans to present the net amount expected to be collected on the loans. Loans, or portions thereof, are charged off against the allowance when they are deemed uncollectible. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged off. The ACL is comprised of reserves measured on a collective (pool) basis based on a lifetime loss-rate model when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis, generally larger non-accruing commercial loans and TDRs. ​ ​ The Company’s activity in the allowance for credit losses for the periods ended are as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2021
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period |  | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 2,372 | ​ | $ | — | ​ | $ | — | ​ | $ | (286) | ​ | $ | 2,086
Commercial real estate owner occupied | ​ |  | 2,552 | ​ |  | (142) | ​ |  | 72 | ​ |  | 237 | ​ |  | 2,719
Commercial real estate non-owner occupied | ​ |  | 5,604 | ​ |  | — | ​ |  | — | ​ |  | (22) | ​ |  | 5,582
Tax exempt | ​ |  | 91 | ​ |  | — | ​ |  | — | ​ |  | (6) | ​ |  | 85
Commercial and industrial | ​ |  | 5,225 | ​ |  | (24) | ​ |  | — | ​ |  | 105 | ​ |  | 5,306
Residential real estate | ​ |  | 6,069 | ​ |  | (6) | ​ |  | 19 | ​ |  | (290) | ​ |  | 5,792
Home equity | ​ |  | 822 | ​ |  | (49) | ​ |  | 1 | ​ |  | 30 | ​ |  | 804
Consumer other | ​ |  | 80 | ​ |  | (65) | ​ |  | 1 | ​ |  | 58 | ​ |  | 74
Total | ​ | $ | 22,815 | ​ | $ | (286) | ​ | $ | 93 | ​ | $ | (174) | ​ | $ | 22,448
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2021
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | Impact of ASC | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period |  | 326 |  | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 824 | ​ | $ | 1,196 | ​ | $ | — | ​ | $ | 18 | ​ | $ | 48 | ​ | $ | 2,086
Commercial real estate owner occupied | ​ |  | 1,783 | ​ |  | 708 | ​ |  | (403) | ​ |  | 72 | ​ |  | 559 | ​ |  | 2,719
Commercial real estate non-owner occupied | ​ |  | 7,864 | ​ |  | (2,008) | ​ |  | — | ​ |  | 4 | ​ |  | (278) | ​ |  | 5,582
Tax exempt | ​ |  | 58 | ​ |  | 40 | ​ |  | — | ​ |  | — | ​ |  | (13) | ​ |  | 85
Commercial and industrial | ​ |  | 3,137 | ​ |  | 2,996 | ​ |  | (44) | ​ |  | 14 | ​ |  | (797) | ​ |  | 5,306
Residential real estate | ​ |  | 5,010 | ​ |  | 1,732 | ​ |  | (67) | ​ |  | 141 | ​ |  | (1,024) | ​ |  | 5,792
Home equity | ​ |  | 285 | ​ |  | 603 | ​ |  | (108) | ​ |  | 48 | ​ |  | (24) | ​ |  | 804
Consumer other | ​ |  | 121 | ​ |  | (39) | ​ |  | (119) | ​ |  | 10 | ​ |  | 101 | ​ |  | 74
Total | ​ | $ | 19,082 | ​ | $ | 5,228 | ​ | $ | (741) | ​ | $ | 307 | ​ | $ | (1,428) | ​ | $ | 22,448
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2020
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period |  | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 532 | ​ | $ | — | ​ | $ | — | ​ | $ | 185 | ​ | $ | 717
Commercial real estate owner occupied | ​ |  | 1,524 | ​ |  | — | ​ |  | — | ​ |  | 370 | ​ |  | 1,894
Commercial real estate non-owner occupied | ​ |  | 5,926 | ​ |  | (266) | ​ |  | 14 | ​ |  | 783 | ​ |  | 6,457
Tax exempt | ​ |  | 64 | ​ |  | — | ​ |  | — | ​ |  | 4 | ​ |  | 68
Commercial and industrial | ​ |  | 3,056 | ​ |  | (24) | ​ |  | 14 | ​ |  | 236 | ​ |  | 3,282
Residential real estate | ​ |  | 4,991 | ​ |  | — | ​ |  | 1 | ​ |  | 86 | ​ |  | 5,078
Home equity | ​ |  | 318 | ​ |  | — | ​ |  | — | ​ |  | (4) | ​ |  | 314
Consumer other | ​ |  | 98 | ​ |  | (149) | ​ |  | 8 | ​ |  | 140 | ​ |  | 97
Total | ​ | $ | 16,509 | ​ | $ | (439) | ​ | $ | 37 | ​ | $ | 1,800 | ​ | $ | 17,907
​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2020
​ | ​ | Balance at | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Beginning of | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | Balance at
(in thousands) |  | Period |  | Charge Offs |  | Recoveries |  | Provision |  | End of Period
Commercial construction | ​ | $ | 317 | ​ | $ | — | ​ | $ | — | ​ | $ | 400 | ​ | $ | 717
Commercial real estate owner occupied | ​ |  | 2,368 | ​ |  | — | ​ |  | — | ​ |  | (474) | ​ |  | 1,894
Commercial real estate non-owner occupied | ​ |  | 4,695 | ​ |  | (1,137) | ​ |  | 109 | ​ |  | 2,790 | ​ |  | 6,457
Tax exempt | ​ |  | 67 | ​ |  | — | ​ |  | — | ​ |  | 1 | ​ |  | 68
Commercial and industrial | ​ |  | 3,262 | ​ |  | (360) | ​ | ​ | 25 | ​ |  | 355 | ​ |  | 3,282
Residential real estate | ​ |  | 4,213 | ​ |  | (32) | ​ |  | 12 | ​ |  | 885 | ​ |  | 5,078
Home equity | ​ |  | 320 | ​ |  | — | ​ |  | — | ​ |  | (6) | ​ |  | 314
Consumer other | ​ |  | 111 | ​ |  | (341) | ​ |  | 13 | ​ |  | 314 | ​ |  | 97
Total | ​ | $ | 15,353 | ​ | $ | (1,870) | ​ | $ | 159 | ​ | $ | 4,265 | ​ | $ | 17,907
​ Unfunded Commitments ​ The Company’s allowance for credit losses on unfunded commitments is recognized as a liability (other liabilities on the consolidated balance sheet), with adjustments to the reserve recognized in other non-interest expense in the consolidated statement of operations. The Company’s activity in the allowance for credit losses on unfunded commitments for the periods ended was as follows: ​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Three Months Ended September 30, 2021 |  | Nine Months Ended September 30, 2021
Begininng Balance | ​ | $ | 1,921 | ​ | $ | 359
Impact of CECL adoption | ​ | ​ | — | ​ | ​ | 1,616
Provision for credit losses | ​ |  | 280 | ​ |  | 226
Ending Balance | ​ | $ | 2,201 | ​ | $ | 2,201
​
​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | Three Months Ended September 30, 2020 |  | Nine Months Ended September 30, 2020
Begininng Balance | ​ | $ | 319 | ​ | $ | 314
Provision for credit losses | ​ |  | 2 | ​ |  | 7
Ending Balance | ​ | $ | 321 | ​ | $ | 321
​ Loan Origination/Risk Management: The Company has certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk. The Company’s Board of Directors reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the Company's Board of Directors with frequent reports related to loan production, loan quality, and concentration of credit, loan delinquencies, non-performing loans and potential problem loans. The Company seeks to diversify the loan portfolio as a means of managing risk associated with fluctuations in economic conditions. ​ Credit Quality Indicators: In monitoring the credit quality of the portfolio, management applies a credit quality indicator and uses an internal risk rating system to categorize commercial loans. These credit quality indicators range from one through nine, with a higher number correlating to increasing risk of loss. Consistent with regulatory guidelines, the Company provides for the classification of loans which are considered to be of lesser quality as special mention, substandard, doubtful, or loss (i.e. risk-rated 6, 7, 8 and 9, respectively). ​ The following are the definitions of the Company’s credit quality indicators: ​ Pass: Loans the Company considers in the commercial portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes there is a low risk of loss related to these loans considered pass-rated. ​ Special Mention: Loans the Company considers having some potential weaknesses, but are deemed to not carry levels of risk inherent in one of the subsequent categories, are designated as special mention. A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. This might include loans which may require a higher level of supervision or internal reporting because of: (i) declining industry trends; (ii) increasing reliance on secondary sources of repayment; (iii) the poor condition of or lack of control over collateral; or (iv) failure to obtain proper documentation or any other deviations from prudent lending practices. Economic or market conditions which may, in the future, affect the obligor may warrant special mention of the asset. Loans for which an adverse trend in the borrower's operations or an imbalanced position in the balance sheet which has not reached a point where the liquidation is jeopardized may be included in this classification. Special mention loans are not adversely classified and do not expose the Company to sufficient risks to warrant classification. ​ Substandard: Loans the Company considers as substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans have a well-defined weakness that jeopardizes liquidation of the debt. Substandard loans include those loans where there is the distinct possibility of some loss of principal, if the deficiencies are not corrected. ​ Doubtful: Loans the Company considers as doubtful have all of the weaknesses inherent in those loans that are classified as substandard. These loans have the added characteristic of a well-defined weakness which is inadequately protected by the current sound worth and paying capacity of borrower or of the collateral pledged, if any, and calls into question the collectability of the full balance of the loan. The possibility of loss is high but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the loan, its classification as loss is deferred until its more exact status is determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. The entire amount of the loan might not be classified as doubtful when collection of a specific portion appears highly probable. Loans are generally not classified doubtful for an extended period of time (i.e., over a year). ​ Loss: Loans the Company considers as losses are those considered uncollectible and of such little value that their continuance as an asset is not warranted and the uncollectible amounts are charged-off. This classification does not mean the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this worthless asset even though partial recovery may be affected in the future. Losses are taken in the period in which they are determined to be uncollectible. ​ The following tables present the Company’s loans by year of origination, loan segmentation and risk indicator as of September 30, 2021: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​ |  | ​ | ​
(in thousands) | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | 2018 | ​ | 2017 | ​ | Prior | ​ | Total
Commercial construction |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Risk rating: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Pass | ​ | $ | 22,192 | ​ | $ | 76,226 | ​ | $ | 44,453 | ​ | $ | 9,829 | ​ | $ | — | ​ | $ | — | ​ | $ | 152,700
Special mention | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 22,192 | ​ | $ | 76,226 | ​ | $ | 44,453 | ​ | $ | 9,829 | ​ | $ | — | ​ | $ | — | ​ | $ | 152,700
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate owner occupied | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 9,937 | ​ | $ | 16,003 | ​ | $ | 35,366 | ​ | $ | 47,026 | ​ | $ | 20,038 | ​ | $ | 110,663 | ​ | $ | 239,033
Special mention | ​ |  | — | ​ |  | — | ​ |  | 767 | ​ |  | — | ​ |  | — | ​ |  | 3,125 | ​ |  | 3,892
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 248 | ​ |  | 248 | ​ |  | 10,030 | ​ |  | 10,526
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 172 | ​ | ​ | — | ​ | ​ | 169 | ​ | ​ | 341
Total | ​ | $ | 9,937 | ​ | $ | 16,003 | ​ | $ | 36,133 | ​ | $ | 47,446 | ​ | $ | 20,286 | ​ | $ | 123,987 | ​ | $ | 253,792
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial real estate non-owner occupied | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 101,706 | ​ | $ | 147,754 | ​ | $ | 90,963 | ​ | $ | 40,545 | ​ | $ | 147,197 | ​ | $ | 186,056 | ​ | $ | 714,221
Special mention | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 15,612 | ​ |  | 15,612
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 131 | ​ |  | 131 | ​ |  | 3,086 | ​ |  | 3,348
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 172 | ​ | ​ | 172
Total | ​ | $ | 101,706 | ​ | $ | 147,754 | ​ | $ | 90,963 | ​ | $ | 40,676 | ​ | $ | 147,328 | ​ | $ | 204,926 | ​ | $ | 733,353
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Tax exempt | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 1,511 | ​ | $ | 604 | ​ | $ | 975 | ​ | $ | 14,453 | ​ | $ | 5,387 | ​ | $ | 19,518 | ​ | $ | 42,448
Special mention | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Substandard | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Total | ​ | $ | 1,511 | ​ | $ | 604 | ​ | $ | 975 | ​ | $ | 14,453 | ​ | $ | 5,387 | ​ | $ | 19,518 | ​ | $ | 42,448
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Commercial and industrial | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Risk rating: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Pass | ​ | $ | 104,179 | ​ | $ | 64,303 | ​ | $ | 36,010 | ​ | $ | 17,635 | ​ | $ | 35,407 | ​ | $ | 73,972 | ​ | $ | 331,506
Special mention | ​ |  | 619 | ​ |  | 222 | ​ |  | 717 | ​ |  | 596 | ​ |  | 202 | ​ |  | 1,429 | ​ |  | 3,785
Substandard | ​ |  | 98 | ​ |  | — | ​ |  | 549 | ​ |  | 14 | ​ |  | 50 | ​ |  | 677 | ​ |  | 1,388
Doubtful | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 122 | ​ | ​ | 188 | ​ | ​ | 310
Total | ​ | $ | 104,896 | ​ | $ | 64,525 | ​ | $ | 37,276 | ​ | $ | 18,245 | ​ | $ | 35,781 | ​ | $ | 76,266 | ​ | $ | 336,989
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(continued)
​ ​
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​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
(in thousands) | ​ | 2021 | ​ | 2020 | ​ | 2019 | ​ | 2018 | ​ | 2017 | ​ | Prior | ​ | Total
Residential real estate |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Performing | ​ | $ | 143,071 | ​ | $ | 126,171 | ​ | $ | 95,942 | ​ | $ | 70,062 | ​ | $ | 69,486 | ​ | $ | 404,395 | ​ | $ | 909,127
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 576 | ​ |  | 183 | ​ |  | 7,415 | ​ |  | 8,174
Total | ​ | $ | 143,071 | ​ | $ | 126,171 | ​ | $ | 95,942 | ​ | $ | 70,638 | ​ | $ | 69,669 | ​ | $ | 411,810 | ​ | $ | 917,301
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Home equity | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Performing | ​ | $ | 8,227 | ​ | $ | 10,946 | ​ | $ | 9,775 | ​ | $ | 7,647 | ​ | $ | 6,975 | ​ | $ | 43,133 | ​ | $ | 86,703
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 1,299 | ​ |  | 1,299
Total | ​ | $ | 8,227 | ​ | $ | 10,946 | ​ | $ | 9,775 | ​ | $ | 7,647 | ​ | $ | 6,975 | ​ | $ | 44,432 | ​ | $ | 88,002
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Consumer other | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Performing | ​ | $ | 3,037 | ​ | $ | 1,942 | ​ | $ | 1,023 | ​ | $ | 803 | ​ | $ | 329 | ​ | $ | 2,429 | ​ | $ | 9,563
Nonperforming | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 6 | ​ |  | 6
Total | ​ | $ | 3,037 | ​ | $ | 1,942 | ​ | $ | 1,023 | ​ | $ | 803 | ​ | $ | 329 | ​ | $ | 2,435 | ​ | $ | 9,569
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total Loans | ​ | $ | 394,577 | ​ | $ | 444,171 | ​ | $ | 316,540 | ​ | $ | 209,737 | ​ | $ | 285,755 | ​ | $ | 883,374 | ​ | $ | 2,534,154
​ The following table summarizes credit risk exposure indicators by portfolio segment, under the incurred loss methodology, as of the period indicated: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 2020
​ | ​ | Commercial | ​ | Commercial | ​ | Residential | ​ |  | ​ | ​ |  | ​
​ | ​ | Real Estate | ​ | and Industrial | ​ | Real Estate | ​ | Consumer | ​ | Total
Grade: |  | ​ |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  | ​
Pass |  | $ | 1,053,773 | ​ | $ | 422,016 | ​ | $ | — | ​ | $ | — | ​ | $ | 1,475,789
Performing | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 914,749 | ​ | ​ | 112,190 | ​ | ​ | 1,026,939
Special mention |  | ​ | 6,075 | ​ | ​ | 2,771 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 8,846
Substandard |  | ​ | 22,267 | ​ | ​ | 15,180 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 37,447
Doubtful |  | ​ | 2,265 | ​ | ​ | 1,100 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3,365
Loss |  | ​ | 1 | ​ | ​ | 2 | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 3
Non-performing | ​ | ​ | — | ​ | ​ | — | ​ | ​ | 9,142 | ​ | ​ | 1,354 | ​ | ​ | 10,496
Total |  | $ | 1,084,381 | ​ | $ | 441,069 | ​ | $ | 923,891 | ​ | $ | 113,544 | ​ | $ | 2,562,885
​ Past Dues ​ The following is a summary of past due loans for the periods ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2021
(in thousands) |  | 30-59 |  | 60-89 |  | 90+ |  | Total Past Due |  | Current |  | Total Loans
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | 152,700 | ​ | $ | 152,700
Commercial real estate owner occupied | ​ |  | — | ​ |  | 10 | ​ |  | 627 | ​ |  | 637 | ​ |  | 253,155 | ​ |  | 253,792
Commercial real estate non-owner occupied | ​ |  | 314 | ​ |  | — | ​ |  | 117 | ​ |  | 431 | ​ |  | 732,922 | ​ |  | 733,353
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 42,448 | ​ |  | 42,448
Commercial and industrial | ​ |  | 44 | ​ |  | 35 | ​ |  | 313 | ​ |  | 392 | ​ |  | 336,597 | ​ |  | 336,989
Residential real estate | ​ |  | 414 | ​ |  | 1,007 | ​ |  | 2,796 | ​ |  | 4,217 | ​ |  | 913,084 | ​ |  | 917,301
Home equity | ​ |  | 344 | ​ |  | 95 | ​ |  | 62 | ​ |  | 501 | ​ |  | 87,501 | ​ |  | 88,002
Consumer other | ​ |  | 32 | ​ |  | 2 | ​ |  | — | ​ |  | 34 | ​ |  | 9,535 | ​ |  | 9,569
Total | ​ | $ | 1,148 | ​ | $ | 1,149 | ​ | $ | 3,915 | ​ | $ | 6,212 | ​ | $ | 2,527,942 | ​ | $ | 2,534,154
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2020
(in thousands) |  | 30-59 |  | 60-89 |  | 90+ |  | Total Past Due |  | Current |  | Total Loans
Commercial construction | ​ | $ | 74 | ​ | $ | — | ​ | $ | 1 | ​ | $ | 75 | ​ | $ | 117,807 | ​ | $ | 117,882
Commercial real estate owner occupied | ​ |  | 1,309 | ​ |  | 464 | ​ |  | 438 | ​ |  | 2,211 | ​ |  | 217,006 | ​ |  | 219,217
Commercial real estate non-owner occupied | ​ |  | 503 | ​ |  | 674 | ​ |  | 624 | ​ |  | 1,801 | ​ |  | 714,975 | ​ |  | 716,776
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | 47,862 | ​ |  | 47,862
Commercial and industrial | ​ |  | 161 | ​ |  | — | ​ |  | 193 | ​ |  | 354 | ​ |  | 355,330 | ​ |  | 355,684
Residential real estate | ​ |  | 9,178 | ​ |  | 2,511 | ​ |  | 3,200 | ​ |  | 14,889 | ​ |  | 980,327 | ​ |  | 995,216
Home equity | ​ |  | 1,062 | ​ |  | 614 | ​ |  | 375 | ​ |  | 2,051 | ​ |  | 98,045 | ​ |  | 100,096
Consumer other | ​ |  | 20 | ​ |  | — | ​ |  | 2 | ​ |  | 22 | ​ |  | 10,130 | ​ |  | 10,152
Total | ​ | $ | 12,307 | ​ | $ | 4,263 | ​ | $ | 4,833 | ​ | $ | 21,403 | ​ | $ | 2,541,482 | ​ | $ | 2,562,885
​ Non-Accrual Loans ​ The following is a summary of non-accrual loans for the periods ended: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2021
​ | ​ | ​ | ​ | ​ | Nonaccrual With No | ​ | 90+ Days Past
(in thousands) |  | Nonaccrual |  | Related Allowance |  | Due and Accruing
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | —
Commercial real estate owner occupied | ​ |  | 1,184 | ​ |  | 808 | ​ |  | 366
Commercial real estate non-owner occupied | ​ |  | 770 | ​ |  | 314 | ​ |  | —
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial | ​ |  | 775 | ​ |  | 629 | ​ |  | 149
Residential real estate | ​ |  | 8,174 | ​ |  | 3,217 | ​ |  | 105
Home equity | ​ |  | 1,298 | ​ |  | 316 | ​ |  | —
Consumer other | ​ |  | 6 | ​ |  | — | ​ |  | —
Total | ​ | $ | 12,207 | ​ | $ | 5,284 | ​ | $ | 620
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | December 31, 2020
​ | ​ | ​ | ​ | ​ | Nonaccrual With No | ​ | 90+ Days Past
(in thousands) |  | Nonaccrual |  | Related Allowance |  | Due and Accruing
Commercial construction | ​ | $ | 258 | ​ | $ | — | ​ | $ | —
Commercial real estate owner occupied | ​ |  | 3,038 | ​ |  | 929 | ​ |  | —
Commercial real estate non-owner occupied | ​ |  | 383 | ​ |  | 118 | ​ |  | —
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial | ​ |  | 1,223 | ​ |  | 1,065 | ​ |  | —
Residential real estate | ​ |  | 5,883 | ​ |  | 4,948 | ​ |  | —
Home equity | ​ |  | 1,345 | ​ |  | 1,346 | ​ |  | 267
Consumer other | ​ |  | 58 | ​ |  | 58 | ​ |  | —
Total | ​ | $ | 12,188 | ​ | $ | 8,464 | ​ | $ | 267
​ ​ ​ Collateral Dependent Loans Loans that do not share risk characteristics are evaluated on an individual basis. For loans that are individually evaluated and collateral dependent, financial loans where the Company has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and the Company expects repayment of the financial asset to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral and the amortized cost basis of the asset as of the measurement date. ​ The following table presents the amortized cost basis of collateral-dependent loans by loan portfolio segment for the periods ended. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2021 | ​ | December 31, 2020
(in thousands) |  | Real Estate |  | Other |  | Real Estate |  | Other
Commercial construction | ​ | $ | — | ​ | $ | — | ​ | $ | 259 | ​ | $ | —
Commercial real estate owner occupied | ​ |  | 1,184 | ​ |  | — | ​ |  | 3,441 | ​ |  | —
Commercial real estate non-owner occupied | ​ |  | 770 | ​ |  | — | ​ |  | 383 | ​ |  | —
Tax exempt | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial | ​ |  | 436 | ​ |  | 339 | ​ |  | 625 | ​ |  | 607
Residential real estate | ​ |  | 8,174 | ​ |  | — | ​ |  | 7,432 | ​ |  | —
Home equity | ​ |  | 1,298 | ​ |  | — | ​ |  | 1,493 | ​ |  | —
Consumer other | ​ |  | 6 | ​ |  | — | ​ |  | 60 | ​ |  | —
Total | ​ | $ | 11,868 | ​ | $ | 339 | ​ | $ | 13,693 | ​ | $ | 607
​ Pre Adoption of ASC 326 – Impaired Loans ​ For periods prior to the adoption of CECL, loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. The Company identified loan relationships having aggregate balances in excess of $150 thousand with potential credit weaknesses. Such loan relationships were identified primarily through the Company's analysis of internal loan evaluations, past due loan reports, TDRs and loans adversely classified. Each loan so identified was then individually evaluated for impairment. Substantially all impaired loans have historically been collateral dependent, meaning repayment of the loan was expected or was considered to be provided solely from the sale of the loan's underlying collateral. For such loans, the Company measured impairment based on the fair value of the loan's collateral, which is generally determined utilizing current appraisals. A specific reserve was established in an amount equal to the excess, if any, of the recorded investment in each impaired loan over the fair value of its underlying collateral, less estimated costs to sell. The Company's policy was to re-evaluate the fair value of collateral dependent loans at least every twelve months unless there is a known deterioration in the collateral's value, in which case a new appraisal is obtained. ​ ​ The tables reflects the activity associated with impaired loans in 2020 prior to the adoption of CECL. ​ ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ |  | December 31, 2020
​ | ​ | Recorded |  | Unpaid Principal |  | Related |  | Average Recorded |  | Interest
(in thousands) | ​ | Investment | ​ | Balance | ​ | Allowance | ​ | Investment | ​ | Income Recognized
With no related allowance: |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |
Construction and land development | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Other commercial real estate | ​ |  | 2,001 | ​ |  | 2,047 | ​ |  | — | ​ |  | 1,610 | ​ |  | —
Commercial | ​ |  | 1,095 | ​ |  | 1,254 | ​ |  | — | ​ |  | 1,140 | ​ |  | 4
Agricultural | ​ |  | 361 | ​ |  | 150 | ​ |  | — | ​ |  | 114 | ​ |  | 2
Tax exempt loans | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Residential real estate | ​ |  | 2,745 | ​ |  | 3,165 | ​ |  | — | ​ |  | 1,077 | ​ |  | 17
Home equity | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Other consumer | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
With an allowance recorded: | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Construction and land development | ​ |  | 258 | ​ |  | 258 | ​ |  | 205 | ​ |  | 203 | ​ |  | —
Other commercial real estate | ​ |  | 1,963 | ​ |  | 2,108 | ​ |  | 1,038 | ​ |  | 1,973 | ​ |  | 17
Commercial | ​ |  | 282 | ​ |  | 289 | ​ |  | 164 | ​ |  | 73 | ​ |  | —
Agricultural | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Tax exempt loans | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Residential real estate | ​ |  | 887 | ​ |  | 944 | ​ |  | 106 | ​ |  | 1,865 | ​ |  | 37
Home equity | ​ |  | 13 | ​ |  | 13 | ​ |  | — | ​ |  | 12 | ​ |  | 1
Other consumer | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | — | ​ |  | —
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Total | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |  | ​ |  |
Commercial real estate | ​ |  | 4,222 | ​ |  | 4,413 | ​ |  | 1,243 | ​ |  | 3,786 | ​ |  | 17
Commercial and industrial | ​ |  | 1,738 | ​ |  | 1,693 | ​ |  | 164 | ​ |  | 1,327 | ​ |  | 6
Residential real estate | ​ |  | 3,632 | ​ |  | 4,109 | ​ |  | 106 | ​ |  | 2,942 | ​ |  | 54
Consumer | ​ |  | 13 | ​ |  | 13 | ​ |  | — | ​ |  | 12 | ​ |  | 1
Total impaired loans | ​ | $ | 9,605 | ​ | $ | 10,228 | ​ | $ | 1,513 | ​ | $ | 8,067 | ​ | $ | 78
​ ​ 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 periods ended. 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. There were no modifications qualifying as TDR’s for the three and nine months ended September 30, 2021. ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three Months Ended September 30, 2020
​ | ​ | ​ | ​ | Pre-Modification | ​ | Post-Modification | ​ | ​ | ​
​ | ​ | Number of | ​ | Outstanding | ​ | Outstanding | ​ | ​ | ​
(in thousands) |  | Modifications |  | Balance |  | Balance |  | Reserve
Commercial and industrial |  | 1 | ​ |  | 86 | ​ |  | 86 | ​ |  | —
Total |  | 1 | ​ | $ | 86 | ​ | $ | 86 | ​ | $ | —
​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Nine Months Ended September 30, 2020
​ | ​ | ​ | ​ | Pre-Modification | ​ | Post-Modification | ​ | ​ | ​
​ | ​ | Number of | ​ | Outstanding | ​ | Outstanding | ​ | ​ | ​
(in thousands) |  | Modifications |  | Balance |  | Balance |  | Reserve
Commercial construction | ​ | — | ​ | $ | — | ​ | $ | — | ​ | $ | —
Commercial real estate owner occupied |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Commercial real estate non-owner occupied |  | 1 | ​ |  | 54 | ​ |  | 247 | ​ |  | —
Tax exempt |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Commercial and industrial |  | 4 | ​ |  | 127 | ​ |  | 248 | ​ |  | —
Residential real estate |  | — | ​ |  | — | ​ |  | — | ​ |  | —
Home equity |  | 1 | ​ |  | 26 | ​ |  | 24 | ​ |  | —
Consumer other |  | 1 | ​ |  | 9 | ​ |  | 9 | ​ |  | —
Total |  | 7 | ​ | $ | 216 | ​ | $ | 528 | ​ | $ | —
​ ​ The following tables summarize the types of loan concessions made for the periods presented: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | September 30, 2021 | ​ | September 30, 2020
​ |  | ​ |  | Post-Modification |  | ​ |  | Post-Modification
​ | ​ | Number of | ​ | Outstanding | ​ | Number of | ​ | Outstanding
(in thousands) | ​ | Modifications | ​ | Balance | ​ | Modifications | ​ | Balance
Interest rate, forbearance and maturity concession |  | — | ​ | $ | — |  | 4 | ​ | $ | 409
Forbearance and interest only payments |  | — | ​ |  | — |  | 1 | ​ |  | 24
Maturity concession |  | — | ​ |  | — |  | 2 | ​ |  | 95
Total |  | — | ​ | $ | — |  | 7 | ​ | $ | 528
​ For the three months ended September 30, 2021 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. ​ Modifications in response to COVID-19 The Company began offering short-term loan modifications to assist borrowers during the COVID-19 national emergency. The CARES Act along with a joint agency statement issued by banking agencies, provides that short-term modifications made in response to COVID-19 do not need to be accounted for as a TDR. Accordingly, the Company does not account for such loan modifications as TDRs. See Note 1 - Basis of Presentation in December 31, 2020 10-K for more information. ​ Foreclosure Residential mortgage loans collateralized by real estate that are in the process of foreclosure as of September 30, 2021 and December 31, 2020 totaled $734 thousand and $917 thousand, respectively. ​ Mortgage Banking The Company had identified and designated loans with an unpaid principal balance of $7.5 million and $24.0 million as residential loans held for sale at September 30, 2021 and December 31, 2020, respectively. The interest rate exposure on loans held for sale are mitigated through forward delivery commitments with certain approved secondary market investors. Forward delivery commitments were $14.5 million, and $50.6 million, respectively. Refer to Note 8 for further discussion of the Company's forward delivery commitments. ​ For the three months ended September 30, 2021 and 2020, the Company sold $28.5 million and $86.2 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $682 thousand and $2.2 million, respectively. For the nine months ended September 30, 2021 and 2020, the Company sold $153.9 million and $156.0 million, respectively, of residential mortgage loans on the secondary market, which resulted in a net gain on sale of loans (net of costs, including direct and indirect origination costs) of $3.6 million and $3.1 million, respectively. ​ The Company sells residential loans on the secondary market with the Company primarily retaining the servicing of these loans. Servicing sold loans helps to maintain customer relationships and the Company earns fees over the servicing period. Loans serviced for others are not included in the accompanying consolidated balance sheets. The risks inherent in servicing assets relate primarily to level of prepayments that result from shifts in interest rates. The Company obtains third party valuations of its servicing assets portfolio quarterly, which assumptions are reflected in Fair Value disclosures.

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