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Loans and Allowance for Loan Losses | 6 Months Ended
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Jun. 30, 2019
Loans and Allowance for Loan Losses |
Loans and Allowance for Loan Losses | Note 3. Loans and Allowance for Loan Losses A summary of loan balances by type follows:
|  | June 30, 2019 |  | December 31, 2018
(In thousands) |  | Originated |  | Acquired |  | Total |  | Originated |  | Acquired |  | Total
Commercial real estate |  | $ | 679,017 |  | $ | 56,004 |  | $ | 735,021 |  | $ | 616,614 |  | $ | 66,988 |  | $ | 683,602
Commercial and industrial |  |  | 126,766 |  |  | 7,952 |  |  | 134,718 |  |  | 128,909 |  |  | 8,419 |  |  | 137,328
Commercial construction |  |  | 210,538 |  |  | 7,644 |  |  | 218,182 |  |  | 141,694 |  |  | 11,645 |  |  | 153,339
Consumer residential |  |  | 85,922 |  |  | 38,206 |  |  | 124,128 |  |  | 87,609 |  |  | 43,822 |  |  | 131,431
Consumer nonresidential |  |  | 24,139 |  |  | 110 |  |  | 24,249 |  |  | 32,184 |  |  | 124 |  |  | 32,308
|  | $ | 1,126,382 |  | $ | 109,916 |  | $ | 1,236,298 |  | $ | 1,007,010 |  | $ | 130,998 |  | $ | 1,138,008
Less: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses |  |  | 9,996 |  |  | — |  |  | 9,996 |  |  | 9,159 |  |  | — |  |  | 9,159
Unearned income and (unamortized premiums), net |  |  | 1,926 |  |  | — |  |  | 1,926 |  |  | 1,265 |  |  | — |  |  | 1,265
Loans, net |  | $ | 1,114,460 |  | $ | 109,916 |  | $ | 1,224,376 |  | $ | 996,586 |  | $ | 130,998 |  | $ | 1,127,584
During 2018, as a result of the Company’s acquisition of Colombo, the loan portfolio was segregated between loans initially accounted for under the amortized cost method (referred to as “originated” loans) and loans acquired (referred to as “acquired” loans). The loans segregated to the acquired loan portfolio were initially measured at fair value and subsequently accounted for under either ASC Topic 310-30 or ASC 310-20. The outstanding principal balance and related carrying amount of acquired loans included in the consolidated balance sheets as of June 30, 2019 and December 31, 2018 are as follows:
(In thousands) |  | June 30, 2019
Purchased credit impaired acquired loans evaluated individually for future credit losses |  |  |
Outstanding principal balance |  | $ | 2,579
Carrying amount |  |  | 1,846
Other acquired loans |  |  |
Outstanding principal balance |  |  | 109,511
Carrying amount |  |  | 108,070
Total acquired loans |  |  |
Outstanding principal balance |  |  | 112,090
Carrying amount |  |  | 109,916
(In thousands) |  | December 31, 2018
Purchased credit impaired acquired loans evaluated individually for future credit losses |  |  |
Outstanding principal balance |  | $ | 2,533
Carrying amount |  |  | 1,401
Other acquired loans |  |  |
Outstanding principal balance |  |  | 131,286
Carrying amount |  |  | 129,597
Total acquired loans |  |  |
Outstanding principal balance |  |  | 133,819
Carrying amount |  |  | 130,998
The following table presents changes during the six months ended June 30, 2019 and the year ended December 31, 2018, respectively, in the accretable yield on purchased credit impaired loans for which the Company applies ASC 310-30.
(In thousands) |  |  |
Balance at January 1, 2019 |  | $ | 357
Accretion |  |  | (51)
Balance at June 30, 2019 |  | $ | 306
(In thousands) |  |  |
Balance at January 1, 2018 |  | $ | —
Accretable yield at acquisition date |  |  | 379
Accretion |  |  | (22)
Balance at December 31, 2018 |  | $ | 357
An analysis of the allowance for loan losses for the three and six months ended June 30, 2019 and 2018, and for the year ended December 31, 2018, follows: Allowance for Loan Losses For the three months ended June 30, 2019 (In thousands)
|  | Commercial |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
|  | Real Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, April 1 |  | $ | 5,812 |  | $ | 1,480 |  | $ | 1,491 |  | $ | 495 |  | $ | 234 |  | $ | 9,512
Charge-offs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (21) |  |  | (21)
Recoveries |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Provision |  |  | 177 |  |  | (69) |  |  | 397 |  |  | (1) |  |  | 1 |  |  | 505
Ending Balance |  | $ | 5,989 |  | $ | 1,411 |  | $ | 1,888 |  | $ | 494 |  | $ | 214 |  | $ | 9,996
Allowance for Loan Losses For the six months ended June 30, 2019 (In thousands)
|  | Commercial |  | Commercial |  | Commercial |  | Consumer |  | Consumer |  |  |
|  | Real Estate |  | and Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, January 1 |  | $ | 5,548 |  | $ | 1,474 |  | $ | 1,285 |  | $ | 518 |  | $ | 334 |  | $ | 9,159
Charge-offs |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (183) |  |  | (183)
Recoveries |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Provision |  |  | 441 |  |  | (63) |  |  | 603 |  |  | (24) |  |  | 63 |  |  | 1,020
Ending Balance |  | $ | 5,989 |  | $ | 1,411 |  | $ | 1,888 |  | $ | 494 |  | $ | 214 |  | $ | 9,996
Allowance for Loan Losses For the three months ended June 30, 2018 (In thousands)
|  | Commercial |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, April 1 |  | $ | 5,140 |  | $ | 821 |  | $ | 1,249 |  | $ | 630 |  | $ | 230 |  | $ | 32 |  | $ | 8,102
Charge-offs |  |  | — |  |  | (86) |  |  | — |  |  | — |  |  | (11) |  |  | — |  |  | (97)
Recoveries |  |  | — |  |  | 12 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 12
Provision |  |  | 135 |  |  | 122 |  |  | 57 |  |  | (26) |  |  | (11) |  |  | 4 |  |  | 281
Ending Balance |  | $ | 5,275 |  | $ | 869 |  | $ | 1,306 |  | $ | 604 |  | $ | 208 |  | $ | 36 |  | $ | 8,298
Allowance for Loan Losses For the six months ended June 30, 2018 (In thousands)
|  | Commercial |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 4,832 |  | $ | 768 |  | $ | 1,191 |  | $ | 626 |  | $ | 268 |  | $ | 40 |  | $ | 7,725
Charge-offs |  |  | — |  |  | (86) |  |  | — |  |  | — |  |  | (11) |  |  | — |  |  | (97)
Recoveries |  |  | — |  |  | 31 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 31
Provision |  |  | 443 |  |  | 156 |  |  | 115 |  |  | (22) |  |  | (49) |  |  | (4) |  |  | 639
Ending Balance |  | $ | 5,275 |  | $ | 869 |  | $ | 1,306 |  | $ | 604 |  | $ | 208 |  | $ | 36 |  | $ | 8,298
Allowance for Loan Losses For the year ended December 31, 2018 (In thousands)
|  | Commercial |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance |  | $ | 4,832 |  | $ | 768 |  | $ | 1,191 |  | $ | 626 |  | $ | 268 |  | $ | 40 |  | $ | 7,725
Charge-offs |  |  | — |  |  | (86) |  |  | — |  |  | (187) |  |  | (292) |  |  | — |  |  | (565)
Recoveries |  |  | — |  |  | 26 |  |  | — |  |  | 1 |  |  | 52 |  |  | — |  |  | 79
Provision |  |  | 716 |  |  | 766 |  |  | 94 |  |  | 78 |  |  | 306 |  |  | (40) |  |  | 1,920
Beginning Balance |  | $ | 5,548 |  | $ | 1,474 |  | $ | 1,285 |  | $ | 518 |  | $ | 334 |  | $ | — |  | $ | 9,159
The following tables present the recorded investment in loans and impairment method as of June 30, 2019 and 2018, and at December 31, 2018, by portfolio segment: Allowance for Loan Losses At June 30, 2019 (In thousands)
|  | Commercial |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
|  | Real Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 26 |  | $ | 343 |  | $ | — |  | $ | 29 |  | $ | — |  | $ | 398
Purchase credit impaired |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Collectively evaluated for impairment |  |  | 5,963 |  |  | 1,068 |  |  | 1,888 |  |  | 465 |  |  | 214 |  |  | 9,598
|  | $ | 5,989 |  | $ | 1,411 |  | $ | 1,888 |  | $ | 494 |  | $ | 214 |  | $ | 9,996
Loans Receivable At June 30, 2019 (In thousands)
|  | Commercial |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
|  | Real Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Financing receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 5,493 |  | $ | 2,905 |  | $ | — |  | $ | 169 |  | $ | — |  | $ | 8,567
Purchase credit impaired |  |  | 1,019 |  |  | 461 |  |  | — |  |  | 366 |  |  | — |  |  | 1,846
Collectively evaluated for impairment |  |  | 728,509 |  |  | 131,352 |  |  | 218,182 |  |  | 123,593 |  |  | 24,249 |  |  | 1,225,885
|  | $ | 735,021 |  | $ | 134,718 |  | $ | 218,182 |  | $ | 124,128 |  | $ | 24,249 |  | $ | 1,236,298
Allowance for Loan Losses At June 30, 2018 (In thousands)
|  | Commercial |  | Commercial |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | and Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Collectively evaluated for impairment |  |  | 5,275 |  |  | 869 |  |  | 1,306 |  |  | 604 |  |  | 244 |  |  | — |  |  | 8,298
|  | $ | 5,275 |  | $ | 869 |  | $ | 1,306 |  | $ | 604 |  | $ | 244 |  | $ | — |  | $ | 8,298
Loans Receivable At June 30, 2018 (In thousands)
|  | Commercial |  | Commercial |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | and Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Financing receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,897 |  | $ | 294 |  | $ | — |  | $ | 587 |  | $ | — |  | $ | — |  | $ | 2,778
Collectively evaluated for impairment |  |  | 571,529 |  |  | 110,254 |  |  | 139,678 |  |  | 105,253 |  |  | 27,285 |  |  | — |  |  | 953,999
|  | $ | 573,426 |  | $ | 110,548 |  | $ | 139,678 |  | $ | 105,840 |  | $ | 27,285 |  | $ | — |  | $ | 956,777
Allowance for Loan Losses At December 31, 2018 (In thousands)
|  | Commercial |  | Commercial |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | and Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | — |  | $ | 372 |  | $ | — |  | $ | 1 |  | $ | — |  | $ | — |  | $ | 373
Purchase credit impaired |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Collectively evaluated for impairment |  |  | 5,548 |  |  | 1,102 |  |  | 1,285 |  |  | 517 |  |  | 334 |  |  | — |  |  | 8,786
|  | $ | 5,548 |  | $ | 1,474 |  | $ | 1,285 |  | $ | 518 |  | $ | 334 |  | $ | — |  | $ | 9,159
Loans Receivable At December 31, 2018 (In thousands)
|  | Commercial |  | Commercial |  | Commercial |  | Consumer |  | Consumer |  |  |  |  |  |
|  | Real Estate |  | and Industrial |  | Construction |  | Residential |  | Nonresidential |  | Unallocated |  | Total
Financing receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,306 |  | $ | 2,969 |  | $ | — |  | $ | 182 |  | $ | — |  | $ | — |  | $ | 4,457
Purchase credit impaired |  |  | 139 |  |  | 467 |  |  | 421 |  |  | 374 |  |  | — |  |  | — |  |  | 1,401
Collectively evaluated for impairment |  |  | 682,157 |  |  | 133,892 |  |  | 152,918 |  |  | 130,875 |  |  | 32,308 |  |  | — |  |  | 1,132,150
|  | $ | 683,602 |  | $ | 137,328 |  | $ | 153,339 |  | $ | 131,431 |  | $ | 32,308 |  | $ | — |  | $ | 1,138,008
Impaired loans by class excluding purchased credit impaired, at June 30, 2019 and December 31, 2018, are summarized as follows: Impaired Loans – Originated Loan Portfolio
|  |  |  |  | Unpaid |  |  |  |  | Average |  | Interest
|  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
(In thousands) |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Commercial and industrial |  |  | 1,788 |  |  | 1,789 |  |  | 343 |  |  | 1,791 |  |  | 69
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | 1,788 |  | $ | 1,789 |  | $ | 343 |  | $ | 1,791 |  | $ | 69
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 5,301 |  | $ | 5,304 |  | $ | — |  | $ | 5,318 |  | $ | 121
Commercial and industrial |  |  | 1,117 |  |  | 1,117 |  |  | — |  |  | 1,137 |  |  | 332
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | 6,418 |  | $ | 6,421 |  | $ | — |  | $ | 6,455 |  | $ | 453
Impaired Loans – Acquired Loan Portfolio
|  |  |  |  | Unpaid |  |  |  |  | Average |  | Interest
|  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
(In thousands) |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 192 |  | $ | 192 |  | $ | 26 |  | $ | 192 |  | $ | 8
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | 169 |  |  | 163 |  |  | 29 |  |  | 163 |  |  | 5
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | 361 |  | $ | 355 |  | $ | 55 |  | $ | 355 |  | $ | 13
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Impaired Loans – Originated Loan Portfolio
|  |  |  |  | Unpaid |  |  |  |  | Average |  | Interest
|  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
(In thousands) |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Commercial and industrial |  |  | 1,793 |  |  | 1,793 |  |  | 372 |  |  | 1,801 |  |  | 100
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | 182 |  |  | 182 |  |  | 1 |  |  | 184 |  |  | 12
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | 1,975 |  | $ | 1,975 |  | $ | 373 |  | $ | 1,985 |  | $ | 112
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 1,306 |  | $ | 1,319 |  | $ | — |  | $ | 1,321 |  | $ | 68
Commercial and industrial |  |  | 1,156 |  |  | 1,170 |  |  | — |  |  | 1,378 |  |  | 81
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | 2,462 |  | $ | 2,489 |  | $ | — |  | $ | 2,699 |  | $ | 149
Impaired Loans – Acquired Loan Portfolio
|  |  |  |  | Unpaid |  |  |  |  | Average |  | Interest
|  | Recorded |  | Principal |  | Related |  | Recorded |  | Income
(In thousands) |  | Investment |  | Balance |  | Allowance |  | Investment |  | Recognized
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | —
Commercial and industrial |  |  | 20 |  |  | 20 |  |  | — |  |  | 58 |  |  | 3
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer residential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
|  | $ | 20 |  | $ | 20 |  | $ | — |  | $ | 58 |  | $ | 3
No additional funds are committed to be advanced in connection with the impaired loans. There were no nonaccrual loans excluded from the impaired loan disclosure. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis typically includes larger, non‑homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. The Company uses the following definitions for risk ratings: Pass — Loans listed as pass include larger non‑homogeneous loans not meeting the risk rating definitions below and smaller, homogeneous loans not assessed on an individual basis. Special Mention — Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard — Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well‑defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the enhanced possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful — Loans classified as doubtful include those loans which have all the weaknesses inherent in those classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on currently known facts, conditions and values, improbable. Loss — Loans classified as loss include those loans which are considered uncollectible and of such little value that their continuance as loans is not warranted. Even though partial recovery may be achieved in the future, it is neither practical nor desirable to defer writing off these loans. Based on the most recent analysis performed, the risk category of loans by class of loans was as follows as of June 30, 2019 and December 31, 2018: As of June 30, 2019 – Originated Loan Portfolio
|  | Commercial Real |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
(In thousands) |  | Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 659,207 |  | $ | 117,238 |  | $ | 207,451 |  | $ | 85,115 |  | $ | 24,120 |  | $ | 1,093,131
Special mention |  |  | 15,617 |  |  | 6,792 |  |  | 3,087 |  |  | 705 |  |  | 19 |  |  | 26,220
Substandard |  |  | 4,193 |  |  | 2,736 |  |  | — |  |  | 102 |  |  | — |  |  | 7,031
Doubtful |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loss |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Total |  | $ | 679,017 |  | $ | 126,766 |  | $ | 210,538 |  | $ | 85,922 |  | $ | 24,139 |  | $ | 1,126,382
As of June 30, 2019 – Acquired Loan Portfolio
|  | Commercial Real |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
(In thousands) |  | Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 54,611 |  | $ | 7,491 |  | $ | 7,644 |  | $ | 37,842 |  | $ | 110 |  | $ | 107,698
Special mention |  |  | 1,109 |  |  | — |  |  | — |  |  | 131 |  |  | — |  |  | 1,240
Substandard |  |  | 284 |  |  | 461 |  |  | — |  |  | 233 |  |  | — |  |  | 978
Doubtful |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loss |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Total |  | $ | 56,004 |  | $ | 7,952 |  | $ | 7,644 |  | $ | 38,206 |  | $ | 110 |  | $ | 109,916
As of December 31, 2018 – Originated Loan Portfolio
|  | Commercial Real |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
(In thousands) |  | Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 610,580 |  | $ | 124,349 |  | $ | 141,694 |  | $ | 86,848 |  | $ | 32,184 |  | $ | 995,655
Special mention |  |  | 6,034 |  |  | 1,783 |  |  | — |  |  | 761 |  |  | — |  |  | 8,578
Substandard |  |  | — |  |  | 2,777 |  |  | — |  |  | — |  |  | — |  |  | 2,777
Doubtful |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loss |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Total |  | $ | 616,614 |  | $ | 128,909 |  | $ | 141,694 |  | $ | 87,609 |  | $ | 32,184 |  | $ | 1,007,010
As of December 31, 2018 – Acquired Loan Portfolio
|  | Commercial Real |  | Commercial and |  | Commercial |  | Consumer |  | Consumer |  |  |
(In thousands) |  | Estate |  | Industrial |  | Construction |  | Residential |  | Nonresidential |  | Total
Grade: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 66,849 |  | $ | 7,952 |  | $ | 11,224 |  | $ | 43,811 |  | $ | 124 |  | $ | 129,960
Special mention |  |  | 56 |  |  | — |  |  | 421 |  |  | — |  |  | — |  |  | 477
Substandard |  |  | 83 |  |  | 467 |  |  | — |  |  | 11 |  |  | — |  |  | 561
Doubtful |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loss |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Total |  | $ | 66,988 |  | $ | 8,419 |  | $ | 11,645 |  | $ | 43,822 |  | $ | 124 |  | $ | 130,998
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as current financial information, historical payment experience, collateral adequacy, credit documentation, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes, larger non-homogeneous loans such as commercial real estate and commercial and industrial loans. This analysis is performed on an ongoing basis as new information is obtained. At June 30, 2019, the Company had $26.2 million in loans identified as special mention within the originated loan portfolio, an increase of $17.6 million from December 31, 2018. Special mention rated loans are loans that have a potential weakness that deserves management's close attention. The increase from December 31, 2018 is concentrated in four loans that were added to this risk category during the second quarter of 2019. These loans do not have a specific reserve and are considered secured. At June 30, 2019, the Company had $7.0 million in loans identified as substandard within the originated loan portfolio, an increase of $4.3 million from December 31, 2018. Substandard rated loans are loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. For each of these substandard loans, a liquidation analysis is completed. As of June 30, 2019, specific reserves totaling $398 thousand, has been allocated within the allowance for loan losses to supplement any shortfall of collateral. Past due and nonaccrual loans presented by loan class were as follows at June 30, 2019 and December 31, 2018: As of June 30, 2019 – Originated Loan Portfolio
|  | 30 - 59 days |  | 60 - 89 days |  | 90 days or more |  | Total |  |  |  |  |  |  |  | 90 days past due |  |  |
(In thousands) |  | past due |  | past due |  | past due |  | past due |  | Current |  | Total loans |  | and still accruing |  | Nonaccruals
Commercial real estate |  | $ | 324 |  | $ | 829 |  | $ | 1,901 |  | $ | 3,054 |  | $ | 675,963 |  | $ | 679,017 |  | $ | 1,901 |  | $ | 4,191
Commercial and industrial |  |  | 235 |  |  | 48 |  |  | 140 |  |  | 423 |  |  | 126,343 |  |  | 126,766 |  |  | 140 |  |  | 1,769
Commercial construction |  |  | — |  |  | — |  |  | 593 |  |  | 593 |  |  | 209,945 |  |  | 210,538 |  |  | 593 |  |  | —
Consumer residential |  |  | 187 |  |  | — |  |  | 344 |  |  | 531 |  |  | 85,391 |  |  | 85,922 |  |  | 344 |  |  | 163
Consumer nonresidential |  |  | 64 |  |  | 200 |  |  | — |  |  | 264 |  |  | 23,875 |  |  | 24,139 |  |  | — |  |  | —
Total |  | $ | 810 |  | $ | 1,077 |  | $ | 2,978 |  | $ | 4,865 |  | $ | 1,121,517 |  | $ | 1,126,382 |  | $ | 2,978 |  | $ | 6,123
As of June 30, 2019 – Acquired Loan Portfolio
|  | 30 - 59 days |  | 60 - 89 days |  | 90 days or more |  | Total |  |  |  |  |  |  |  | 90 days past due |  |  |
(In thousands) |  | past due |  | past due |  | past due |  | past due |  | Current |  | Total loans |  | and still accruing |  | Nonaccruals
Commercial real estate |  | $ | 681 |  | $ | — |  | $ | 51 |  | $ | 732 |  | $ | 55,272 |  | $ | 56,004 |  | $ | 51 |  | $ | 275
Commercial and industrial |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,952 |  |  | 7,952 |  |  | — |  |  | 252
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,644 |  |  | 7,644 |  |  | — |  |  | —
Consumer residential |  |  | 669 |  |  | — |  |  | — |  |  | 669 |  |  | 37,537 |  |  | 38,206 |  |  | — |  |  | 310
Consumer nonresidential |  |  | — |  |  | 23 |  |  | — |  |  | 23 |  |  | 87 |  |  | 110 |  |  | — |  |  | —
Total |  | $ | 1,350 |  | $ | 23 |  | $ | 51 |  | $ | 1,424 |  | $ | 108,492 |  | $ | 109,916 |  | $ | 51 |  | $ | 837
As of December 31, 2018 – Originated Loan Portfolio
|  | 30 - 59 days |  | 60 - 89 days |  | 90 days or more |  | Total |  |  |  |  |  |  |  | 90 days past due |  |  |
(In thousands) |  | past due |  | past due |  | past due |  | past due |  | Current |  | Total loans |  | and still accruing |  | Nonaccruals
Commercial real estate |  | $ | 3,062 |  | $ | 2,148 |  | $ | — |  | $ | 5,210 |  | $ | 611,404 |  | $ | 616,614 |  | $ | — |  | $ | —
Commercial and industrial |  |  | 68 |  |  | 181 |  |  | 2,701 |  |  | 2,950 |  |  | 125,959 |  |  | 128,909 |  |  | 1,031 |  |  | 1,769
Commercial construction |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 141,694 |  |  | 141,694 |  |  | — |  |  | —
Consumer residential |  |  | 843 |  |  | 345 |  |  | — |  |  | 1,188 |  |  | 86,421 |  |  | 87,609 |  |  | — |  |  | 182
Consumer nonresidential |  |  | 111 |  |  | 44 |  |  | — |  |  | 155 |  |  | 32,029 |  |  | 32,184 |  |  | — |  |  | —
Total |  | $ | 4,084 |  | $ | 2,718 |  | $ | 2,701 |  | $ | 9,503 |  | $ | 997,507 |  | $ | 1,007,010 |  | $ | 1,031 |  | $ | 1,951
As of December 31, 2018 – Acquired Loan Portfolio
|  | 30 - 59 days |  | 60 - 89 days |  | 90 days or more |  | Total |  |  |  |  |  |  |  | 90 days past due |  |  |
(In thousands) |  | past due |  | past due |  | past due |  | past due |  | Current |  | Total loans |  | and still accruing |  | Nonaccruals
Commercial real estate |  | $ | 1,001 |  | $ | 83 |  | $ | 56 |  | $ | 1,140 |  | $ | 65,848 |  | $ | 66,988 |  | $ | — |  | $ | 56
Commercial and industrial |  |  | 446 |  |  | — |  |  | — |  |  | 446 |  |  | 7,973 |  |  | 8,419 |  |  | — |  |  | —
Commercial construction |  |  | 186 |  |  | — |  |  | — |  |  | 186 |  |  | 11,459 |  |  | 11,645 |  |  | — |  |  | —
Consumer residential |  |  | 2,785 |  |  | 612 |  |  | 173 |  |  | 3,570 |  |  | 40,252 |  |  | 43,822 |  |  | — |  |  | 173
Consumer nonresidential |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 124 |  |  | 124 |  |  | — |  |  | —
Total |  | $ | 4,418 |  | $ | 695 |  | $ | 229 |  | $ | 5,342 |  | $ | 125,656 |  | $ | 130,998 |  | $ | — |  | $ | 229
There were overdrafts of $74 thousand and $28 thousand at June 30, 2019 and December 31, 2018, which have been reclassified from deposits to loans. At June 30, 2019 and December 31, 2018 loans with a carrying value of $167.7 million and $173.0 million were pledged to the Federal Home Loan Bank of Atlanta. There was a default of the one troubled debt restructuring (TDR) during the twelve months of the restructuring for the six months ended June 30, 2019. For the six months ended June 30, 2018, no TDRs defaulted within twelve months of the restructuring. The following table presents the TDR’s originiated during the six months ended June 30, 2019: For the six months ended June 30, 2019
|  |  |  | Pre-Modification |  | Post-Modification
|  |  |  | Outstanding |  | Outstanding
|  | Number of |  | Recorded |  | Recorded
Troubled Debt Restructurings |  | Contracts |  | Investment |  | Investment
|  | (In thousands)
Commercial real estate |  | 1 |  | $ | 3,903 |  | $ | 3,903
Total |  | 1 |  | $ | 3,903 |  | $ | 3,903
There were no TDR’s originated in the six months ended June 30, 2018. As of June 30, 2019, and December 31, 2018, the Company has a recorded investment in troubled debt restructurings of $3.9 million and $203 thousand, respectively. The concessions made in troubled debt restructurings were extensions of the maturity dates or reductions in the stated interest rate for the remaining life of the debt.

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