Loans, net and allowance for loan losses

Schedule of changes in allowance for loan losses account by major classification of loans

The changes in the allowance for loan losses account by major classification of loan for the three and six months ended June 30, 2020 and 2019 are summarized as follows:


			Real estate
June 30, 2020	Commercial		Commercial		Residential		Consumer		Total
Allowance for loan losses:
Beginning Balance April 1, 2020	$	7,969	$	13,007	$	3,624	$	1,086	$	25,686
Charge-offs		(335)		(47)		(81)		(154)		(617)
Recoveries		31				3		54		88
Provisions		822		895		21		62		1,800
Ending balance	$	8,487	$	13,855	$	3,567	$	1,048	$	26,957

			Real estate
June 30, 2019	Commercial		Commercial		Residential		Consumer		Total
Allowance for loan losses:
Beginning Balance April 1, 2019	$	5,955	$	11,074	$	3,880	$	1,196	$	22,105
Charge-offs		(10)		(343)		(143)		(80)		(576)
Recoveries		2				12		37		51
Provisions		195		311		(134)		(22)		350
Ending balance	$	6,142	$	11,042	$	3,615	$	1,131	$	21,930


			Real estate
June 30, 2020	Commercial		Commercial		Residential		Consumer		Total
Allowance for loan losses:
Beginning Balance January 1, 2020	$	6,888	$	11,496	$	3,226	$	1,067	$	22,677
Charge-offs		(985)		(47)		(135)		(248)		(1,415)
Recoveries		298				13		84		395
Provisions		2,286		2,406		463		145		5,300
Ending balance	$	8,487	$	13,855	$	3,567	$	1,048	$	26,957

			Real estate
June 30, 2019	Commercial		Commercial		Residential		Consumer		Total
Allowance for loan losses:
Beginning Balance January 1, 2019	$	5,516	$	10,736	$	3,892	$	1,235	$	21,379
Charge-offs		(87)		(349)		(302)		(212)		(950)
Recoveries		10				16		75		101
Provisions		703		655		9		33		1,400
Ending balance	$	6,142	$	11,042	$	3,615	$	1,131	$	21,930

The Company's allowance for loan losses increased $4.3 million or 18.9% in 2020, due largely to the adjustment of qualitative factors in our allowance for loan losses methodology, which reflect current economic decline due to COVID-19's adverse impact on economic and business operating conditions.

The allocation of the allowance for loan losses and the related loans by major classifications of loans at June 30, 2020 and December 31, 2019 is summarized as follows:


			Real estate
June 30, 2020	Commercial		Commercial		Residential		Consumer		Total
Allowance for loan losses:
Ending balance	$	8,487	$	13,855	$	3,567	$	1,048	$	26,957
Ending balance: individually evaluated for impairment		1,339		239		163				1,741
Ending balance: collectively evaluated for impairment	$	7,148	$	13,616	$	3,404	$	1,048	$	25,216
Loans receivable:
Ending balance	$	694,551	$	1,099,818	$	297,880	$	89,660	$	2,181,909
Ending balance: individually evaluated for impairment		5,408		4,490		1,925		160		11,983
Ending balance: collectively evaluated for impairment	$	689,143	$	1,095,328	$	295,955	$	89,500	$	2,169,926



			Real estate
December 31, 2019	Commercial		Commercial		Residential		Consumer		Total
Allowance for loan losses:
Ending balance	$	6,888	$	11,496	$	3,226	$	1,067	$	22,677
Ending balance: individually evaluated for impairment		363		279		135				777
Ending balance: collectively evaluated for impairment	$	6,525	$	11,217	$	3,091	$	1,067	$	21,900
Loans receivable:
Ending balance	$	522,957	$	1,011,423	$	301,378	$	102,482	$	1,938,240
Ending balance: individually evaluated for impairment		4,658		3,048		2,153		261		10,120
Ending balance: collectively evaluated for impairment	$	518,299	$	1,008,375	$	299,225	$	102,221	$	1,928,120

Schedule of information concerning nonaccrual loans by major loan classification


		June 30, 2020		December 31, 2019
Commercial	$	5,443	$	3,336
Real estate:
Commercial		3,109		2,765
Residential		1,135		1,148
Consumer		160		261
Total	$	9,847	$	7,510

Summarized information concerning impaired loans


							This Quarter				Year-to-Date
			Unpaid				Average		Interest		Average		Interest
	Recorded		Principal		Related		Recorded		Income		Recorded		Income
June 30, 2020	Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance:
Commercial	$	2,921	$	3,480			$	3,314	$	9	$	3,422	$	25
Real estate:
Commercial		2,042		2,606				2,153		17		2,074		22
Residential		1,115		1,273				1,122		5		1,321		10
Consumer		160		178				181				207
Total		6,238		7,537				6,770		31		7,024		57
With an allowance recorded:
Commercial		2,487		2,516		1,339		2,222				1,821		6
Real estate:
Commercial		2,448		2,774		239		1,856				1,614
Residential		810		878		163		758		3		650		7
Consumer
Total		5,745		6,168		1,741		4,836		3		4,085		13
Total impaired loans
Commercial		5,408		5,996		1,339		5,536		9		5,243		31
Real estate:
Commercial		4,490		5,380		239		4,009		17		3,688		22
Residential		1,925		2,151		163		1,880		8		1,971		17
Consumer		160		178				181				207
Total	$	11,983	$	13,705	$	1,741	$	11,606	$	34	$	11,109	$	70


							For the Year Ended
			Unpaid				Average		Interest
	Recorded		Principal		Related		Recorded		Income
December 31, 2019	Investment		Balance		Allowance		Investment		Recognized
With no related allowance:
Commercial	$	3,638	$	4,175			$	3,907	$	63
Real estate:
Commercial		1,918		2,205				2,385		38
Residential		1,718		2,060				1,362		25
Consumer		261		274				233
Total		7,535		8,714				7,887		126
With an allowance recorded:
Commercial		1,020		1,038		363		1,012		32
Real estate:
Commercial		1,130		1,811		279		1,050		10
Residential		435		450		135		1,408		29
Consumer								20
Total		2,585		3,299		777		3,490		71
Total impaired loans
Commercial		4,658		5,213		363		4,919		95
Real estate:
Commercial		3,048		4,016		279		3,435		48
Residential		2,153		2,510		135		2,770		54
Consumer		261		274				253
Total	$	10,120	$	12,013	$	777	$	11,377	$	197


							This Quarter				Year-to-Date
			Unpaid				Average		Interest		Average		Interest
	Recorded		Principal		Related		Recorded		Income		Recorded		Income
June 30, 2019	Investment		Balance		Allowance		Investment		Recognized		Investment		Recognized
With no related allowance:
Commercial	$	4,495	$	4,931			$	5,284	$	17	$	4,043	$	34
Real estate:
Commercial		2,957		3,116				2,528		10		2,341		23
Residential		619		888				740		4		1,150		11
Consumer		251		261				245				214
Total		8,322		9,196				8,797		31		7,748		68
With an allowance recorded:
Commercial		1,420		1,432	$	615		1,180		5		1,012		12
Real estate:
Commercial		910		1,380		216		1,174		5		1,166		10
Residential		1,661		1,740		295		1,848		7		1,932		18
Consumer												20
Total		3,991		4,552		1,126		4,202		17		4,130		40
Total impaired loans
Commercial		5,915		6,363		615		6,464		22		5,055		46
Real estate:
Commercial		3,867		4,496		216		3,702		15		3,507		33
Residential		2,280		2,628		295		2,588		11		3,082		29
Consumer		251		261				245				234
Total	$	12,313	$	13,748	$	1,126	$	12,999	$	48	$	11,878	$	108

Schedule of payment deferrals granted on commercial loans


NAICS category	Number of Loans		Balance	Percentage of Total Loan Portfolio		Percentage of Tier 1 Capital (Bank)
Lessors of Nonresidential Buildings	65	$	71,899	3.3	%	26.9	%
Lessors of Residential Buildings and Dwellings	64		53,564	2.5		19.9
Hotels and Motels	27		39,261	1.8		14.5
Full-Service Restaurants	33		27,783	1.3		10.3
Limited-Service Restaurants	8		11,829	0.5		4.4
Gasoline Stations with Convenience Stores	18		12,422	0.6		4.6
Construction and Mining	13		9,718	0.4		3.6
Assisted Living Facilities for the Elderly	2		6,319	0.3		2.3
Colleges, Universities, and Professional Schools	1		6,301	0.3		2.3
All Others	248		67,674	3.1		24.9
	479	$	306,770	14.1	%	113.7	%