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Note 7 - Loans | 3 Months Ended
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Mar. 31, 2020
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 7 . LOANS The loans receivable portfolio is segmented into residential mortgage, commercial and consumer loans. Loans outstanding at March 31, 2020 and December 31, 2019 are summarized by segment, and by classes within each segment, as follows:
Summary of Loans by Type
(In Thousands)
|  | March 31, |  |  | Dec. 31, |
|  | 2020 |  |  | 2019 |
Residential mortgage: |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 508,387 |  |  | $ | 510,641 |
Residential mortgage loans - junior liens |  |  | 27,028 |  |  |  | 27,503 |
Home equity lines of credit |  |  | 32,090 |  |  |  | 33,638 |
1-4 Family residential construction |  |  | 14,121 |  |  |  | 14,798 |
Total residential mortgage |  |  | 581,626 |  |  |  | 586,580 |
Commercial: |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 295,860 |  |  |  | 301,227 |
Commercial and industrial |  |  | 132,308 |  |  |  | 126,374 |
Political subdivisions |  |  | 43,613 |  |  |  | 53,570 |
Commercial construction and land |  |  | 33,340 |  |  |  | 33,555 |
Loans secured by farmland |  |  | 11,524 |  |  |  | 12,251 |
Multi-family (5 or more) residential |  |  | 32,370 |  |  |  | 31,070 |
Agricultural loans |  |  | 3,886 |  |  |  | 4,319 |
Other commercial loans |  |  | 16,430 |  |  |  | 16,535 |
Total commercial |  |  | 569,331 |  |  |  | 578,901 |
Consumer |  |  | 16,516 |  |  |  | 16,741 |
Total |  |  | 1,167,473 |  |  |  | 1,182,222 |
Less: allowance for loan losses |  |  | (11,330 | ) |  |  | (9,836 | )
Loans, net |  | $ | 1,156,143 |  |  | $ | 1,172,386 |
In the table above, outstanding loan balances are presented net of deferred loan origination fees, net, of $2,492,000 at March 31, 2020 and $2,482,000 at December 31, 2019. Effective April 1, 2019, the Corporation acquired loans pursuant to the acquisition of Monument. The loans acquired from Monument were recorded at an initial fair value of $259,295,000. The gross amortized cost of loans acquired from Monument on April 1, 2019 was reduced $1,807,000 based on movements in interest rates (market rate adjustment) and was also reduced $1,914,000 based on a credit fair value adjustment on non-impaired loans and by $318,000 based on a credit fair value adjustment on impaired loans. In the last three quarters of 2019, the Corporation recognized accretion of a portion of the market rate adjustment and credit adjustment on non-impaired loans, and a partial recovery of purchased credit impaired (PCI) loans. In the first quarter 2020, adjustments to the initial market rate and credit fair value adjustments were recognized as follows:
(In Thousands) |  |  |  |  |  | Credit |
|  | Market |  |  | Adjustment on |
|  | Rate |  |  | Non-impaired |
|  | Adjustment |  |  | Loans |
Adjustments to gross amortized cost of loans at December 31, 2019 |  | $ | (1,415 | ) |  | $ | (1,216 | )
Accretion recognized in interest income |  |  | 147 |  |  |  | 205 |
Adjustments to gross amortized cost of loans at March 31, 2020 |  | $ | (1,268 | ) |  | $ | (1,011 | )
Loans acquired from Monument that were identified as having a deterioration in credit quality (purchased credit impaired, or PCI) were valued at $441,000 at April 1, 2019, which was $318,000 lower than the total outstanding balance of the loans. The fair values of all of the PCI loans were determined based on the estimated realizable value of underlying real estate collateral, net of estimated selling cost. In the first quarter 2020, the Corporation recorded interest income of $112,000 from the excess of proceeds received on the pay-off of PCI loans over their carrying amounts. A summary of PCI loans held at March 31, 2020 and December 31, 2019 is as follows:
(In Thousands) |  |  |  |  |  |  |  |
|  | March 31, |  |  | December 31, |
|  | 2020 |  |  | 2019 |
Outstanding balance |  | $ | 408 |  |  | $ | 759 |
Carrying amount |  |  | 305 |  |  |  | 441 |
The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in northcentral Pennsylvania, the southern tier of New York State and southeastern Pennsylvania. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region. There is no concentration of loans to borrowers engaged in similar businesses or activities that exceed 10% of total loans at either March 31, 2020 or December 31, 2019. The Corporation maintains an allowance for loan losses that represents management’s estimate of the losses inherent in the loan portfolio as of the balance sheet date and recorded as a reduction of the investment in loans. The allowance for loan losses is maintained at a level considered adequate to provide for losses that can be reasonably anticipated. Management performs a quarterly evaluation of the adequacy of the allowance. The allowance is based on the Corporation’s past loan loss experience, known and inherent risks in the portfolio, adverse situations that may affect the borrower’s ability to repay, the estimated value of any underlying collateral, composition of the loan portfolio, current economic conditions and other relevant factors. This evaluation is inherently subjective as it requires material estimates that may be susceptible to significant revision as more information becomes available. In the process of evaluating the loan portfolio, management also considers the Corporation’s exposure to losses from unfunded loan commitments. As of March 31, 2020, and December 31, 2019, management determined that no allowance for credit losses related to unfunded loan commitments was required. Transactions within the allowance for loan losses, summarized by segment and class, for the three -month periods ended March 31, 2020 and 2019 were as follows:
Three Months Ended March 31, 2020
(In Thousands)
|  | Dec. 31, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | March 31, |
|  | 2019 Balance |  |  | Charge-offs |  |  | Recoveries |  |  | Provision (Credit) |  |  | 2020 Balance |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 3,405 |  |  | $ | 0 |  |  | $ | 1 |  |  | $ | 166 |  |  | $ | 3,572 |
Residential mortgage loans - junior liens |  |  | 384 |  |  |  | 0 |  |  |  | 1 |  |  |  | 29 |  |  |  | 414 |
Home equity lines of credit |  |  | 276 |  |  |  | 0 |  |  |  | 1 |  |  |  | 1 |  |  |  | 278 |
1-4 Family residential construction |  |  | 117 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2 |  |  |  | 119 |
Total residential mortgage |  |  | 4,182 |  |  |  | 0 |  |  |  | 3 |  |  |  | 198 |  |  |  | 4,383 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 1,921 |  |  |  | 0 |  |  |  | 0 |  |  |  | 11 |  |  |  | 1,932 |
Commercial and industrial |  |  | 1,391 |  |  |  | (17 | ) |  |  | 0 |  |  |  | 1,271 |  |  |  | 2,645 |
Commercial construction and land |  |  | 966 |  |  |  | 0 |  |  |  | 0 |  |  |  | 4 |  |  |  | 970 |
Loans secured by farmland |  |  | 158 |  |  |  | 0 |  |  |  | 0 |  |  |  | (14 | ) |  |  | 144 |
Multi-family (5 or more) residential |  |  | 156 |  |  |  | 0 |  |  |  | 0 |  |  |  | 43 |  |  |  | 199 |
Agricultural loans |  |  | 41 |  |  |  | 0 |  |  |  | 0 |  |  |  | (2 | ) |  |  | 39 |
Other commercial loans |  |  | 155 |  |  |  | 0 |  |  |  | 0 |  |  |  | 5 |  |  |  | 160 |
Total commercial |  |  | 4,788 |  |  |  | (17 | ) |  |  | 0 |  |  |  | 1,318 |  |  |  | 6,089 |
Consumer |  |  | 281 |  |  |  | (31 | ) |  |  | 11 |  |  |  | 12 |  |  |  | 273 |
Unallocated |  |  | 585 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 585 |
Total Allowance for Loan Losses |  | $ | 9,836 |  |  | $ | (48 | ) |  | $ | 14 |  |  | $ | 1,528 |  |  | $ | 11,330 |
Three Months Ended March 31, 2019
(In Thousands)
|  | Dec. 31, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | March 31, |
|  | 2018 Balance |  |  | Charge-offs |  |  | Recoveries |  |  | Provision (Credit) |  |  | 2019 Balance |
Allowance for Loan Losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 3,156 |  |  | $ | (50 | ) |  | $ | 1 |  |  | $ | 71 |  |  | $ | 3,178 |
Residential mortgage loans - junior liens |  |  | 325 |  |  |  | (24 | ) |  |  | 0 |  |  |  | 28 |  |  |  | 329 |
Home equity lines of credit |  |  | 302 |  |  |  | 0 |  |  |  | 3 |  |  |  | (19 | ) |  |  | 286 |
1-4 Family residential construction |  |  | 203 |  |  |  | 0 |  |  |  | 0 |  |  |  | (5 | ) |  |  | 198 |
Total residential mortgage |  |  | 3,986 |  |  |  | (74 | ) |  |  | 4 |  |  |  | 75 |  |  |  | 3,991 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 2,538 |  |  |  | 0 |  |  |  | 0 |  |  |  | (651 | ) |  |  | 1,887 |
Commercial and industrial |  |  | 1,553 |  |  |  | 0 |  |  |  | 2 |  |  |  | (486 | ) |  |  | 1,069 |
Commercial construction and land |  |  | 110 |  |  |  | 0 |  |  |  | 0 |  |  |  | 4 |  |  |  | 114 |
Loans secured by farmland |  |  | 102 |  |  |  | 0 |  |  |  | 0 |  |  |  | (4 | ) |  |  | 98 |
Multi-family (5 or more) residential |  |  | 114 |  |  |  | 0 |  |  |  | 0 |  |  |  | (2 | ) |  |  | 112 |
Agricultural loans |  |  | 46 |  |  |  | 0 |  |  |  | 0 |  |  |  | (3 | ) |  |  | 43 |
Other commercial loans |  |  | 128 |  |  |  | 0 |  |  |  | 0 |  |  |  | (7 | ) |  |  | 121 |
Total commercial |  |  | 4,591 |  |  |  | 0 |  |  |  | 2 |  |  |  | (1,149 | ) |  |  | 3,444 |
Consumer |  |  | 233 |  |  |  | (37 | ) |  |  | 9 |  |  |  | 31 |  |  |  | 236 |
Unallocated |  |  | 499 |  |  |  | 0 |  |  |  | 0 |  |  |  | 86 |  |  |  | 585 |
Total Allowance for Loan Losses |  | $ | 9,309 |  |  | $ | (111 | ) |  | $ | 15 |  |  | $ | (957 | ) |  | $ | 8,256 |
In the evaluation of the loan portfolio, management determines two major components for the allowance for loan losses – ( 1 ) a specific component based on an assessment of certain larger relationships, mainly commercial purpose loans, on a loan-by-loan basis; and ( 2 ) a general component for the remainder of the portfolio, except for performing loans purchased from Monument, based on a collective evaluation of pools of loans with similar risk characteristics. The general component is assigned to each pool of loans based on both historical net charge-off experience, and an evaluation of certain qualitative factors. An unallocated component is maintained to cover uncertainties that could affect management’s estimate of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the above methodologies for estimating specific and general losses in the portfolio. Performing loans acquired from Monument are presented net of a discount for credit losses of $1,011,000 at March 31, 2020 and $1,216,000 at December 31, 2019. This discount reflects an estimate of the present value of credit losses based on market expectations at the date of acquisition of $1,914,000, subsequently reduced as accretion has been recognized based on estimated and actual principal pay-downs. None of the performing loans purchased were found to be impaired at March 31, 2020, and the purchased performing loans were excluded from the loan pools for which the general component of the allowance for loan losses was calculated. In the first quarter 2020, the provision for loan losses was $1,528,000, up from a credit (reduction in expense) to the provision of $957,000 in the first quarter 2019. In the first quarter 2020, the Corporation recognized a specific allowance of $1,193,000 related to a commercial loan with an outstanding balance of $3.5 million at March 31, 2020. In total, the provision included a charge of $1,210,000 related to specific loans (net increase in specific allowances on loans of $1,176,000 and net charge-offs of $34,000 ), a charge of $402,000 attributable to increases in qualitative factors and a credit of $67,000 in the net charge-off experience factors used to estimate the allowance, and a net credit of $17,000 from the impact of a reduction in total outstanding loans. In comparison, the Corporation recorded a credit for loan losses (reduction in expense) of $957,000 in the first quarter 2019, as specific allowances totaling $1,365,000 at December 31, 2018 on two commercial loans were eliminated. These two loans were no longer considered impaired at March 31, 2019 and were returned to full accrual status in the first quarter 2019. In total, the first quarter 2019 credit for loan losses included a net credit of $1,011,000 related to changes in specific allowances on loans, adjusted for net charge-offs during the period, partially offset by a net increase of $54,000 in the collectively determined and unallocated portions of the allowance for loan losses. In determining the larger loan relationships for detailed assessment under the specific allowance component, the Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table that follows. The following tables summarize the aggregate credit quality classification of outstanding loans by risk rating as of March 31, 2020 and December 31, 2019:
March 31, 2020
(In Thousands)
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Purchased |  |  |  |  |
|  |  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  | Credit |  |  |  |  |
|  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |  |  | Impaired |  |  | Total |
Residential Mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage loans - first liens |  | $ | 498,803 |  |  | $ | 305 |  |  | $ | 9,202 |  |  | $ | 0 |  |  | $ | 77 |  |  | $ | 508,387 |
Residential Mortgage loans - junior liens |  |  | 26,367 |  |  |  | 136 |  |  |  | 525 |  |  |  | 0 |  |  |  | 0 |  |  |  | 27,028 |
Home Equity lines of credit |  |  | 31,613 |  |  |  | 59 |  |  |  | 418 |  |  |  | 0 |  |  |  | 0 |  |  |  | 32,090 |
1-4 Family residential construction |  |  | 14,121 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,121 |
Total residential mortgage |  |  | 570,904 |  |  |  | 500 |  |  |  | 10,145 |  |  |  | 0 |  |  |  | 77 |  |  |  | 581,626 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 287,783 |  |  |  | 6,191 |  |  |  | 1,658 |  |  |  | 0 |  |  |  | 228 |  |  |  | 295,860 |
Commercial and Industrial |  |  | 117,424 |  |  |  | 8,728 |  |  |  | 6,156 |  |  |  | 0 |  |  |  | 0 |  |  |  | 132,308 |
Political subdivisions |  |  | 43,613 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 43,613 |
Commercial construction and land |  |  | 32,016 |  |  |  | 0 |  |  |  | 1,324 |  |  |  | 0 |  |  |  | 0 |  |  |  | 33,340 |
Loans secured by farmland |  |  | 5,569 |  |  |  | 5,062 |  |  |  | 893 |  |  |  | 0 |  |  |  | 0 |  |  |  | 11,524 |
Multi-family (5 or more) residential |  |  | 31,465 |  |  |  | 0 |  |  |  | 905 |  |  |  | 0 |  |  |  | 0 |  |  |  | 32,370 |
Agricultural loans |  |  | 2,956 |  |  |  | 304 |  |  |  | 626 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,886 |
Other commercial loans |  |  | 16,380 |  |  |  | 0 |  |  |  | 50 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,430 |
Total commercial |  |  | 537,206 |  |  |  | 20,285 |  |  |  | 11,612 |  |  |  | 0 |  |  |  | 228 |  |  |  | 569,331 |
Consumer |  |  | 16,433 |  |  |  | 0 |  |  |  | 83 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,516 |
Totals |  | $ | 1,124,543 |  |  | $ | 20,785 |  |  | $ | 21,840 |  |  | $ | 0 |  |  | $ | 305 |  |  | $ | 1,167,473 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
(In Thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Purchased |  |  |  |  |
|  |  |  |  |  | Special |  |  |  |  |  |  |  |  |  |  | Credit |  |  |  |  |
|  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |  |  | Impaired |  |  | Total |
Residential Mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential Mortgage loans - first liens |  | $ | 500,963 |  |  | $ | 193 |  |  | $ | 9,324 |  |  | $ | 84 |  |  | $ | 77 |  |  | $ | 510,641 |
Residential Mortgage loans - junior liens |  |  | 26,953 |  |  |  | 79 |  |  |  | 471 |  |  |  | 0 |  |  |  | 0 |  |  |  | 27,503 |
Home Equity lines of credit |  |  | 33,170 |  |  |  | 59 |  |  |  | 409 |  |  |  | 0 |  |  |  | 0 |  |  |  | 33,638 |
1-4 Family residential construction |  |  | 14,798 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,798 |
Total residential mortgage |  |  | 575,884 |  |  |  | 331 |  |  |  | 10,204 |  |  |  | 84 |  |  |  | 77 |  |  |  | 586,580 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 294,397 |  |  |  | 4,773 |  |  |  | 1,693 |  |  |  | 0 |  |  |  | 364 |  |  |  | 301,227 |
Commercial and Industrial |  |  | 114,293 |  |  |  | 9,538 |  |  |  | 2,543 |  |  |  | 0 |  |  |  | 0 |  |  |  | 126,374 |
Political subdivisions |  |  | 53,570 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 53,570 |
Commercial construction and land |  |  | 32,224 |  |  |  | 0 |  |  |  | 1,331 |  |  |  | 0 |  |  |  | 0 |  |  |  | 33,555 |
Loans secured by farmland |  |  | 6,528 |  |  |  | 4,681 |  |  |  | 1,042 |  |  |  | 0 |  |  |  | 0 |  |  |  | 12,251 |
Multi-family (5 or more) residential |  |  | 30,160 |  |  |  | 0 |  |  |  | 910 |  |  |  | 0 |  |  |  | 0 |  |  |  | 31,070 |
Agricultural loans |  |  | 3,343 |  |  |  | 335 |  |  |  | 641 |  |  |  | 0 |  |  |  | 0 |  |  |  | 4,319 |
Other commercial loans |  |  | 16,416 |  |  |  | 0 |  |  |  | 119 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,535 |
Total commercial |  |  | 550,931 |  |  |  | 19,327 |  |  |  | 8,279 |  |  |  | 0 |  |  |  | 364 |  |  |  | 578,901 |
Consumer |  |  | 16,720 |  |  |  | 0 |  |  |  | 21 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,741 |
Totals |  | $ | 1,143,535 |  |  | $ | 19,658 |  |  | $ | 18,504 |  |  | $ | 84 |  |  | $ | 441 |  |  | $ | 1,182,222 |
The general component of the allowance for loan losses covers pools of loans including commercial loans not considered individually impaired, as well as smaller balance homogeneous classes of loans, such as residential real estate, home equity lines of credit and other consumer loans. Accordingly, the Corporation generally does not separately identify individual consumer and residential loans for impairment disclosures, unless such a loan: ( 1 ) is subject to a restructuring agreement, or ( 2 ) has an outstanding balance of $400,000 or more and a credit grade of Special Mention, Substandard or Doubtful. The pools of loans are evaluated for loss exposure based upon average historical net charge-off rates for each loan class, adjusted for qualitative factors (described in the following paragraphs). The time period used in determining the average historical net charge-off rate for each loan class is based on management’s evaluation of an appropriate time period that captures an historical loss experience relevant to the current portfolio. At March 31, 2020 and December 31, 2019, a five -year average net charge-off rate was used for commercial loans secured by real estate and for multi-family residential loans, while a three -year average net charge-off rate was used for all other loan classes. Qualitative risk factors are evaluated for the impact on each of the three segments (residential mortgage, commercial and consumer) within the loan portfolio. Each qualitative factor is assigned a value to reflect improving, stable or declining conditions based on management’s judgment using relevant information available at the time of the evaluation. The adjustment for qualitative factors is applied as an increase or decrease to the average net charge-off rate for each loan class within each segment. The qualitative factors used in the general component calculations are designed to address credit risk characteristics associated with each segment. The Corporation’s credit risk associated with all of the segments is significantly impacted by these factors, which include economic conditions within its market area, the Corporation’s lending policies, changes or trends in the portfolio, risk profile, competition, regulatory requirements and other factors. Loans are classified as impaired, when, based on current information and events, it is probable that the Corporation will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of shortfall in relation to the principal and interest owed. Impairment is measured on a loan-by-loan basis for commercial loans, by the fair value of the collateral (if the loan is collateral dependent), by future cash flows discounted at the loan’s effective rate or by the loan’s observable market price. The scope of loans reviewed individually each quarter to determine if they are impaired include all commercial loan relationships greater than $200,000 and any residential mortgage or consumer loans of $400,000 or more for which there is at least one extension of credit graded Special Mention, Substandard or Doubtful. Loans that are individually reviewed, but which are determined to not be impaired, are combined with all remaining loans that are not reviewed on a specific basis, and such loans are included within larger pools of loans based on similar risk and loss characteristics for purposes of determining the general component of the allowance. The loans that have been individually reviewed, but which have been determined to not be impaired, are included in the “Collectively Evaluated” column in the table summarizing the allowance and associated loan balances as of March 31, 2020 and December 31, 2019. All loans classified as troubled debt restructurings (discussed in more detail below) and all commercial loan relationships less than $200,000 or other loan relationships less than $400,000 in the aggregate, but with an estimated loss of $100,000 or more, are individually evaluated for impairment. The following tables present a summary of loan balances and the related allowance for loan losses summarized by portfolio segment and class for each impairment method used as of March 31, 2020 and December 31, 2019.
March 31, 2020
(In Thousands)
|  | Loans: |  |  | Allowance for Loan Losses: |
|  |  |  |  |  |  |  |  |  | Purchased |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Individually |  |  | Collectively |  |  | Performing |  |  |  |  |  |  | Individually |  |  | Collectively |  |  |  |  |
|  | Evaluated |  |  | Evaluated |  |  | Loans |  |  | Totals |  |  | Evaluated |  |  | Evaluated |  |  | Totals |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 556 |  |  | $ | 405,687 |  |  | $ | 102,144 |  |  | $ | 508,387 |  |  | $ | 0 |  |  | $ | 3,572 |  |  | $ | 3,572 |
Residential mortgage loans - junior liens |  |  | 367 |  |  |  | 24,755 |  |  |  | 1,906 |  |  |  | 27,028 |  |  |  | 194 |  |  |  | 220 |  |  |  | 414 |
Home equity lines of credit |  |  | 0 |  |  |  | 30,580 |  |  |  | 1,510 |  |  |  | 32,090 |  |  |  | 0 |  |  |  | 278 |  |  |  | 278 |
1-4 Family residential construction |  |  | 0 |  |  |  | 13,963 |  |  |  | 158 |  |  |  | 14,121 |  |  |  | 0 |  |  |  | 119 |  |  |  | 119 |
Total residential mortgage |  |  | 923 |  |  |  | 474,985 |  |  |  | 105,718 |  |  |  | 581,626 |  |  |  | 194 |  |  |  | 4,189 |  |  |  | 4,383 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 714 |  |  |  | 193,507 |  |  |  | 101,639 |  |  |  | 295,860 |  |  |  | 0 |  |  |  | 1,932 |  |  |  | 1,932 |
Commercial and industrial |  |  | 4,974 |  |  |  | 124,917 |  |  |  | 2,417 |  |  |  | 132,308 |  |  |  | 1,325 |  |  |  | 1,320 |  |  |  | 2,645 |
Political subdivisions |  |  | 0 |  |  |  | 43,613 |  |  |  | 0 |  |  |  | 43,613 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial construction and land |  |  | 1,255 |  |  |  | 29,308 |  |  |  | 2,777 |  |  |  | 33,340 |  |  |  | 674 |  |  |  | 296 |  |  |  | 970 |
Loans secured by farmland |  |  | 424 |  |  |  | 10,845 |  |  |  | 255 |  |  |  | 11,524 |  |  |  | 34 |  |  |  | 110 |  |  |  | 144 |
Multi-family (5 or more) residential |  |  | 0 |  |  |  | 13,517 |  |  |  | 18,853 |  |  |  | 32,370 |  |  |  | 0 |  |  |  | 199 |  |  |  | 199 |
Agricultural loans |  |  | 0 |  |  |  | 3,886 |  |  |  | 0 |  |  |  | 3,886 |  |  |  | 0 |  |  |  | 39 |  |  |  | 39 |
Other commercial loans |  |  | 0 |  |  |  | 15,864 |  |  |  | 566 |  |  |  | 16,430 |  |  |  | 0 |  |  |  | 160 |  |  |  | 160 |
Total commercial |  |  | 7,367 |  |  |  | 435,457 |  |  |  | 126,507 |  |  |  | 569,331 |  |  |  | 2,033 |  |  |  | 4,056 |  |  |  | 6,089 |
Consumer |  |  | 0 |  |  |  | 16,516 |  |  |  | 0 |  |  |  | 16,516 |  |  |  | 0 |  |  |  | 273 |  |  |  | 273 |
Unallocated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 585 |
Total |  | $ | 8,290 |  |  | $ | 926,958 |  |  | $ | 232,225 |  |  | $ | 1,167,473 |  |  | $ | 2,227 |  |  | $ | 8,518 |  |  | $ | 11,330 |
December 31, 2019
(In Thousands)
|  | Loans: |  |  | Allowance for Loan Losses: |
|  |  |  |  |  |  |  |  |  | Purchased |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Individually |  |  | Collectively |  |  | Performing |  |  |  |  |  |  | Individually |  |  | Collectively |  |  |  |  |
|  | Evaluated |  |  | Evaluated |  |  | Loans |  |  | Totals |  |  | Evaluated |  |  | Evaluated |  |  | Totals |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 1,023 |  |  | $ | 405,186 |  |  | $ | 104,432 |  |  | $ | 510,641 |  |  | $ | 0 |  |  | $ | 3,405 |  |  | $ | 3,405 |
Residential mortgage loans - junior liens |  |  | 368 |  |  |  | 24,730 |  |  |  | 2,405 |  |  |  | 27,503 |  |  |  | 176 |  |  |  | 208 |  |  |  | 384 |
Home equity lines of credit |  |  | 0 |  |  |  | 32,147 |  |  |  | 1,491 |  |  |  | 33,638 |  |  |  | 0 |  |  |  | 276 |  |  |  | 276 |
1-4 Family residential construction |  |  | 0 |  |  |  | 14,640 |  |  |  | 158 |  |  |  | 14,798 |  |  |  | 0 |  |  |  | 117 |  |  |  | 117 |
Total residential mortgage |  |  | 1,391 |  |  |  | 476,703 |  |  |  | 108,486 |  |  |  | 586,580 |  |  |  | 176 |  |  |  | 4,006 |  |  |  | 4,182 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 684 |  |  |  | 198,532 |  |  |  | 102,011 |  |  |  | 301,227 |  |  |  | 0 |  |  |  | 1,921 |  |  |  | 1,921 |
Commercial and industrial |  |  | 1,467 |  |  |  | 122,313 |  |  |  | 2,594 |  |  |  | 126,374 |  |  |  | 149 |  |  |  | 1,242 |  |  |  | 1,391 |
Political subdivisions |  |  | 0 |  |  |  | 53,570 |  |  |  | 0 |  |  |  | 53,570 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Commercial construction and land |  |  | 1,261 |  |  |  | 29,710 |  |  |  | 2,584 |  |  |  | 33,555 |  |  |  | 678 |  |  |  | 288 |  |  |  | 966 |
Loans secured by farmland |  |  | 607 |  |  |  | 11,386 |  |  |  | 258 |  |  |  | 12,251 |  |  |  | 48 |  |  |  | 110 |  |  |  | 158 |
Multi-family (5 or more) residential |  |  | 0 |  |  |  | 10,617 |  |  |  | 20,453 |  |  |  | 31,070 |  |  |  | 0 |  |  |  | 156 |  |  |  | 156 |
Agricultural loans |  |  | 76 |  |  |  | 4,243 |  |  |  | 0 |  |  |  | 4,319 |  |  |  | 0 |  |  |  | 41 |  |  |  | 41 |
Other commercial loans |  |  | 0 |  |  |  | 15,947 |  |  |  | 588 |  |  |  | 16,535 |  |  |  | 0 |  |  |  | 155 |  |  |  | 155 |
Total commercial |  |  | 4,095 |  |  |  | 446,318 |  |  |  | 128,488 |  |  |  | 578,901 |  |  |  | 875 |  |  |  | 3,913 |  |  |  | 4,788 |
Consumer |  |  | 0 |  |  |  | 16,741 |  |  |  | 0 |  |  |  | 16,741 |  |  |  | 0 |  |  |  | 281 |  |  |  | 281 |
Unallocated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 585 |
Total |  | $ | 5,486 |  |  | $ | 939,762 |  |  | $ | 236,974 |  |  | $ | 1,182,222 |  |  | $ | 1,051 |  |  | $ | 8,200 |  |  | $ | 9,836 |
Summary information related to impaired loans at March 31, 2020 and December 31, 2019 is provided in the table immediately below. Purchased credit impaired loans are excluded from the table.
(In Thousands)
|  | March 31, 2020 |  |  | December 31, 2019 |
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Unpaid |  |  |  |  |  |  |  |  |
|  | Principal |  |  | Recorded |  |  | Related |  |  | Principal |  |  | Recorded |  |  | Related |
|  | Balance |  |  | Investment |  |  | Allowance |  |  | Balance |  |  | Investment |  |  | Allowance |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 180 |  |  | $ | 152 |  |  | $ | 0 |  |  | $ | 645 |  |  | $ | 617 |  |  | $ | 0 |
Residential mortgage loans - junior liens |  |  | 41 |  |  |  | 41 |  |  |  | 0 |  |  |  | 42 |  |  |  | 42 |  |  |  | 0 |
Commercial loans secured by real estate |  |  | 714 |  |  |  | 714 |  |  |  | 0 |  |  |  | 684 |  |  |  | 684 |  |  |  | 0 |
Commercial and industrial |  |  | 587 |  |  |  | 587 |  |  |  | 0 |  |  |  | 563 |  |  |  | 563 |  |  |  | 0 |
Loans secured by farmland |  |  | 87 |  |  |  | 87 |  |  |  | 0 |  |  |  | 129 |  |  |  | 129 |  |  |  | 0 |
Agricultural loans |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 76 |  |  |  | 76 |  |  |  | 0 |
Total with no related allowance recorded |  |  | 1,609 |  |  |  | 1,581 |  |  |  | 0 |  |  |  | 2,139 |  |  |  | 2,111 |  |  |  | 0 |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  |  | 404 |  |  |  | 404 |  |  |  | 0 |  |  |  | 406 |  |  |  | 406 |  |  |  | 0 |
Residential mortgage loans - junior liens |  |  | 326 |  |  |  | 326 |  |  |  | 194 |  |  |  | 326 |  |  |  | 326 |  |  |  | 176 |
Commercial and industrial |  |  | 4,387 |  |  |  | 4,387 |  |  |  | 1,325 |  |  |  | 904 |  |  |  | 904 |  |  |  | 149 |
Construction and other land loans |  |  | 1,255 |  |  |  | 1,255 |  |  |  | 674 |  |  |  | 1,261 |  |  |  | 1,261 |  |  |  | 678 |
Loans secured by farmland |  |  | 337 |  |  |  | 337 |  |  |  | 34 |  |  |  | 478 |  |  |  | 478 |  |  |  | 48 |
Total with a related allowance recorded |  |  | 6,709 |  |  |  | 6,709 |  |  |  | 2,227 |  |  |  | 3,375 |  |  |  | 3,375 |  |  |  | 1,051 |
Total |  | $ | 8,318 |  |  | $ | 8,290 |  |  | $ | 2,227 |  |  | $ | 5,514 |  |  | $ | 5,486 |  |  | $ | 1,051 |
In the table immediately above, two loans to one borrower are presented under the Residential mortgage loans – first liens and Residential mortgage loans – junior liens classes. These loans are collateralized by one property, and the allowance associated with these loans was determined based on an analysis of the total amounts of the Corporation’s exposure in comparison to the estimated net proceeds if the Corporation were to sell the property. The average balance of impaired loans, excluding purchased credit impaired loans, and interest income recognized on these impaired loans is as follows:
(In Thousands)
|  |  |  |  |  |  |  |  |  | Interest Income Recognized on |
|  | Average Investment in Impaired Loans |  |  | Impaired Loans on a Cash Basis |
|  | 3 Months Ended |  |  | 3 Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2020 |  |  | 2019 |  |  | 2020 |  |  | 2019 |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first lien |  | $ | 1,232 |  |  | $ | 981 |  |  | $ | 8 |  |  | $ | 10 |
Residential mortgage loans - junior lien |  |  | 382 |  |  |  | 291 |  |  |  | 0 |  |  |  | 2 |
Home equity lines of credit |  |  | 65 |  |  |  | 0 |  |  |  | 1 |  |  |  | 0 |
Total residential mortgage |  |  | 1,679 |  |  |  | 1,272 |  |  |  | 9 |  |  |  | 12 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 387 |  |  |  | 3,040 |  |  |  | 4 |  |  |  | 10 |
Commercial and industrial |  |  | 2,872 |  |  |  | 1,713 |  |  |  | 1 |  |  |  | 26 |
Commercial construction and land |  |  | 1,308 |  |  |  | 0 |  |  |  | 12 |  |  |  | 0 |
Loans secured by farmland |  |  | 516 |  |  |  | 1,442 |  |  |  | 17 |  |  |  | 1 |
Agricultural loans |  |  | 76 |  |  |  | 660 |  |  |  | 0 |  |  |  | 12 |
Other commercial loans |  |  | 50 |  |  |  | 0 |  |  |  | 1 |  |  |  | 0 |
Total commercial |  |  | 5,209 |  |  |  | 6,855 |  |  |  | 35 |  |  |  | 49 |
Consumer |  |  | 0 |  |  |  | 8 |  |  |  | 0 |  |  |  | 0 |
Total |  | $ | 6,888 |  |  | $ | 8,135 |  |  | $ | 44 |  |  | $ | 61 |
Loans are placed on nonaccrual status for all classes of loans when, in the opinion of management, collection of interest is doubtful. Any unpaid interest previously accrued on those loans is reversed from income. Interest income is not recognized on specific impaired loans unless the likelihood of further loss is remote. Interest payments received on loans for which the risk of further loss is greater than remote are applied as a reduction of the loan principal balance. Interest income on other nonaccrual loans, including impaired loans, is recognized only to the extent of interest payments received. Generally, loans are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. The past due status of all classes of loans receivable is determined based on contractual due dates for loan payments. Also, the amortization of deferred loan fees is discontinued when a loan is placed on nonaccrual status. The breakdown by portfolio segment and class of nonaccrual loans and loans past due ninety days or more and still accruing is as follows:
(In Thousands)
|  | March 31, 2020 |  |  | December 31, 2019 |
|  | Past Due |  |  |  |  |  |  | Past Due |  |  |  |  |
|  | 90+ Days and |  |  |  |  |  |  | 90+ Days and |  |  |  |  |
|  | Accruing |  |  | Nonaccrual |  |  | Accruing |  |  | Nonaccrual |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 983 |  |  | $ | 4,818 |  |  | $ | 878 |  |  | $ | 4,679 |
Residential mortgage loans - junior liens |  |  | 98 |  |  |  | 354 |  |  |  | 53 |  |  |  | 326 |
Home equity lines of credit |  |  | 107 |  |  |  | 74 |  |  |  | 71 |  |  |  | 73 |
1-4 Family residential construction |  |  | 0 |  |  |  | 39 |  |  |  | 0 |  |  |  | 0 |
Total residential mortgage |  |  | 1,188 |  |  |  | 5,285 |  |  |  | 1,002 |  |  |  | 5,078 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 496 |  |  |  | 744 |  |  |  | 107 |  |  |  | 1,148 |
Commercial and industrial |  |  | 59 |  |  |  | 4,487 |  |  |  | 15 |  |  |  | 1,051 |
Commercial construction and land |  |  | 0 |  |  |  | 1,305 |  |  |  | 0 |  |  |  | 1,311 |
Loans secured by farmland |  |  | 229 |  |  |  | 424 |  |  |  | 43 |  |  |  | 565 |
Agricultural loans |  |  | 1 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |
Other commercial |  |  | 0 |  |  |  | 49 |  |  |  | 0 |  |  |  | 49 |
Total commercial |  |  | 785 |  |  |  | 7,009 |  |  |  | 165 |  |  |  | 4,124 |
Consumer |  |  | 120 |  |  |  | 15 |  |  |  | 40 |  |  |  | 16 |
Totals |  | $ | 2,093 |  |  | $ | 12,309 |  |  | $ | 1,207 |  |  | $ | 9,218 |
The amounts shown in the table immediately above include loans classified as troubled debt restructurings (described in more detail below), if such loans are past due ninety days or more or nonaccrual. The table below presents a summary of the contractual aging of loans as of March 31, 2020 and December 31, 2019:
(In Thousands)
|  | As of March 31, 2020 |  |  | As of December 31, 2019 |
|  | Current & |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Current & |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Past Due |  |  | Past Due |  |  | Past Due |  |  |  |  |  |  | Past Due |  |  | Past Due |  |  | Past Due |  |  |  |  |
|  | Less than |  |  | 30-89 |  |  | 90+ |  |  |  |  |  |  | Less than |  |  | 30-89 |  |  | 90+ |  |  |  |  |
|  | 30 Days |  |  | Days |  |  | Days |  |  | Total |  |  | 30 Days |  |  | Days |  |  | Days |  |  | Total |
Residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Residential mortgage loans - first liens |  | $ | 497,246 |  |  | $ | 7,817 |  |  | $ | 3,324 |  |  | $ | 508,387 |  |  | $ | 499,024 |  |  | $ | 7,839 |  |  | $ | 3,778 |  |  | $ | 510,641 |
Residential mortgage loans - junior liens |  |  | 26,564 |  |  |  | 40 |  |  |  | 424 |  |  |  | 27,028 |  |  |  | 27,041 |  |  |  | 83 |  |  |  | 379 |  |  |  | 27,503 |
Home equity lines of credit |  |  | 31,509 |  |  |  | 474 |  |  |  | 107 |  |  |  | 32,090 |  |  |  | 33,115 |  |  |  | 452 |  |  |  | 71 |  |  |  | 33,638 |
1-4 Family residential construction |  |  | 14,121 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,121 |  |  |  | 14,758 |  |  |  | 40 |  |  |  | 0 |  |  |  | 14,798 |
Total residential mortgage |  |  | 569,440 |  |  |  | 8,331 |  |  |  | 3,855 |  |  |  | 581,626 |  |  |  | 573,938 |  |  |  | 8,414 |  |  |  | 4,228 |  |  |  | 586,580 |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans secured by real estate |  |  | 294,408 |  |  |  | 574 |  |  |  | 878 |  |  |  | 295,860 |  |  |  | 299,640 |  |  |  | 737 |  |  |  | 850 |  |  |  | 301,227 |
Commercial and industrial |  |  | 128,435 |  |  |  | 3,742 |  |  |  | 131 |  |  |  | 132,308 |  |  |  | 126,221 |  |  |  | 16 |  |  |  | 137 |  |  |  | 126,374 |
Political subdivisions |  |  | 43,613 |  |  |  | 0 |  |  |  | 0 |  |  |  | 43,613 |  |  |  | 53,570 |  |  |  | 0 |  |  |  | 0 |  |  |  | 53,570 |
Commercial construction and land |  |  | 33,145 |  |  |  | 145 |  |  |  | 50 |  |  |  | 33,340 |  |  |  | 33,505 |  |  |  | 0 |  |  |  | 50 |  |  |  | 33,555 |
Loans secured by farmland |  |  | 11,208 |  |  |  | 0 |  |  |  | 316 |  |  |  | 11,524 |  |  |  | 11,455 |  |  |  | 666 |  |  |  | 130 |  |  |  | 12,251 |
Multi-family (5 or more) residential |  |  | 32,370 |  |  |  | 0 |  |  |  | 0 |  |  |  | 32,370 |  |  |  | 31,070 |  |  |  | 0 |  |  |  | 0 |  |  |  | 31,070 |
Agricultural loans |  |  | 3,809 |  |  |  | 76 |  |  |  | 1 |  |  |  | 3,886 |  |  |  | 4,318 |  |  |  | 1 |  |  |  | 0 |  |  |  | 4,319 |
Other commercial loans |  |  | 16,430 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,430 |  |  |  | 16,535 |  |  |  | 0 |  |  |  | 0 |  |  |  | 16,535 |
Total commercial |  |  | 563,418 |  |  |  | 4,537 |  |  |  | 1,376 |  |  |  | 569,331 |  |  |  | 576,314 |  |  |  | 1,420 |  |  |  | 1,167 |  |  |  | 578,901 |
Consumer |  |  | 16,196 |  |  |  | 185 |  |  |  | 135 |  |  |  | 16,516 |  |  |  | 16,496 |  |  |  | 189 |  |  |  | 56 |  |  |  | 16,741 |
Totals |  | $ | 1,149,054 |  |  | $ | 13,053 |  |  | $ | 5,366 |  |  | $ | 1,167,473 |  |  | $ | 1,166,748 |  |  | $ | 10,023 |  |  | $ | 5,451 |  |  | $ | 1,182,222 |
Nonaccrual loans are included in the contractual aging in the immediately preceding table. A summary of the contractual aging of nonaccrual loans at March 31, 2020 and December 31, 2019 is as follows:
(In Thousands)
|  | Current & |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Past Due |  |  | Past Due |  |  | Past Due |  |  |  |  |
|  | Less than |  |  | 30-89 |  |  | 90+ |  |  |  |  |
|  | 30 Days |  |  | Days |  |  | Days |  |  | Total |
March 31, 2020 Nonaccrual Totals |  | $ | 4,355 |  |  | $ | 4,681 |  |  | $ | 3,273 |  |  | $ | 12,309 |
December 31, 2019 Nonaccrual Totals |  | $ | 3,840 |  |  | $ | 1,134 |  |  | $ | 4,244 |  |  | $ | 9,218 |
Loans whose terms are modified are classified as Troubled Debt Restructurings (TDRs) if the Corporation grants such borrowers concessions, and it is deemed that those borrowers are experiencing financial difficulty. Loans classified as TDRs are designated as impaired. The outstanding balance of loans subject to TDRs, as well as contractual aging information at March 31, 2020 and December 31, 2019 is as follows:
(In Thousands)
|  | Current & |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Past Due |  |  | Past Due |  |  | Past Due |  |  |  |  |  |  |  |  |
|  | Less than |  |  | 30-89 |  |  | 90+ |  |  |  |  |  |  |  |  |
|  | 30 Days |  |  | Days |  |  | Days |  |  | Nonaccrual |  |  | Total |
March 31, 2020 Totals |  | $ | 176 |  |  | $ | 196 |  |  | $ | 0 |  |  | $ | 1,730 |  |  | $ | 2,102 |
December 31, 2019 Totals |  | $ | 889 |  |  | $ | 0 |  |  | $ | 0 |  |  | $ | 1,737 |  |  | $ | 2,626 |
At March 31, 2020 and December 31, 2019, there were no commitments to loan additional funds to borrowers whose loans have been classified as TDRs. TDRs that occurred during the three -month periods ended March 31, 2020 and 2019 are as follows:
(Balances in Thousands) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|  | Three Months Ended |  |  | Three Months Ended |
|  | March 31, 2020 |  |  | March 31, 2019 |
|  |  |  |  |  | Post- |  |  |  |  |  |  | Post- |
|  | Number |  |  | Modification |  |  | Number |  |  | Modification |
|  | of |  |  | Recorded |  |  | of |  |  | Recorded |
|  | Loans |  |  | Investment |  |  | Loans |  |  | Investment |
Residential mortgage - first liens, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reduced monthly payments and extended maturity date |  |  | 0 |  |  | $ | 0 |  |  |  | 1 |  |  | $ | 271 |
Residential mortgage - junior liens : |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reduced monthly payments and extended maturity date |  |  | 0 |  |  |  | 0 |  |  |  | 1 |  |  |  | 18 |
New loan at lower than risk-adjusted market rate to borrower from whom short sale of other collateral was accepted |  |  | 1 |  |  |  | 30 |  |  |  | 0 |  |  |  | 0 |
Commercial and industrial, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reduced monthly payments and extended maturity date |  |  | 0 |  |  |  | 0 |  |  |  | 8 |  |  |  | 177 |
Agricultural loans, |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Reduced monthly payments and extended maturity date |  |  | 0 |  |  |  | 0 |  |  |  | 1 |  |  |  | 84 |
Total |  |  | 1 |  |  | $ | 30 |  |  |  | 11 |  |  | $ | 550 |
All of the loans for which TDRs were granted in the table above in the three -month period ended March 31, 2019 are associated with one relationship. In the three -month periods ended March 31, 2020 and 2019, there were no defaults on loans for which modifications considered to be TDRs were entered into within the previous 12 months. The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in Foreclosed assets held for sale in the unaudited consolidated balance sheets) is as follows:
(In Thousands) |  |  |  |  |  |
|  | March 31, |  |  | Dec. 31, |
|  | 2020 |  |  | 2019 |
Foreclosed residential real estate |  | $ | 130 |  |  | $ | 292 |
The recorded investment of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows:
(In Thousands) |  |  |  |  |  |
|  | March 31, |  |  | Dec. 31, |
|  | 2020 |  |  | 2019 |
Residential real estate in process of foreclosure |  | $ | 1,779 |  |  | $ | 1,717 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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