
(Dollars in thousands)	Originated		Acquired		Total
September 30, 2020
Commercial real estate	$	593,156	$	137,033	$	730,189
Commercial and industrial	748,913		59,010		807,923
Residential real estate	261,153		42,935		304,088
Consumer	671		1,017		1,688
Total	$	1,603,893	$	239,995	$	1,843,888
December 31, 2019
Commercial real estate	$	551,565	$	53,081	$	604,646
Commercial and industrial	403,922		6,306		410,228
Residential real estate	201,787		10,052		211,839
Consumer	864		32		896
Total	$	1,158,138	$	69,471	$	1,227,609

At September 30, 2020 and December 31, 2019, the Company had residential loans held for sale, which were originated with the intent to sell, totaling $60.6 million and $13.9 million, respectively. During the three months ended September 30, 2020 and 2019, the Company sold residential real estate loans with proceeds totaling $157.2 million and $86.4 million, respectively, and $377.2 million and $179.4 million, during the nine months ended September 30, 2020 and 2019, respectively.

Nonperforming assets consist of loans for which the accrual of interest has been discontinued and other real estate owned obtained through foreclosure and other repossessed assets. Loans outside of those accounted for under ASC 310-30 are classified as nonaccrual when, in the opinion of management, it is probable that the Company will be unable to collect all the contractual interest and principal payments as scheduled in the loan agreement. The accrual of interest is discontinued when a loan is placed in nonaccrual status and any payments received reduce the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments is no longer doubtful. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded at their net realizable value based on the principal and interest the Company expects to collect on these loans. There were $6 thousand and $1.2 million in commitments to lend additional funds to borrowers whose loans were classified as nonaccrual as of September 30, 2020 and December 31, 2019, respectively.


(Dollars in thousands)	September 30, 2020		December 31, 2019
Nonaccrual loans:
Commercial real estate	$	7,022	$	4,832
Commercial and industrial	8,078		11,112
Residential real estate	4,151		2,569
Consumer	15		16
Total nonaccrual loans	19,266		18,529
Other real estate owned	—		921
Total nonperforming assets	$	19,266	$	19,450
Loans 90 days or more past due and still accruing	$	552	$	157


(Dollars in thousands)	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90+ Days Past Due		Total
September 30, 2020
Commercial real estate	$	726,018	$	3,934	$	237	$	—	$	730,189
Commercial and industrial	802,363		3,598		1,962		—		807,923
Residential real estate	294,478		4,067		2,133		3,410		304,088
Consumer	1,684		2		2		—		1,688
Total	$	1,824,543	$	11,601	$	4,334	$	3,410	$	1,843,888
December 31, 2019
Commercial real estate	$	597,892	$	3,630	$	1,286	$	1,838	$	604,646
Commercial and industrial	407,692		377		1,275		884		410,228
Residential real estate	206,002		3,286		1,429		1,122		211,839
Consumer	892		4		—		—		896
Total	$	1,212,478	$	7,297	$	3,990	$	3,844	$	1,227,609


(Dollars in thousands)	September 30, 2020		December 31, 2019
Nonaccrual loans	$	19,266	$	18,529
Performing troubled debt restructurings:

Commercial and industrial	550		547
Residential real estate	599		359
Total performing troubled debt restructurings	1,149		906
Total impaired loans, excluding purchase credit impaired loans	$	20,415	$	19,435

The Company assesses loan modifications to determine whether a modification constitutes a troubled debt restructuring ("TDR"). This applies to all loan modifications except for modifications to loans accounted for in pools under ASC 310-30, which are not subject to TDR accounting/classification. For loans excluded from ASC 310-30 accounting, a modification is considered a TDR when a borrower is experiencing financial difficulties and the Company grants a concession to the borrower. For loans accounted for individually under ASC 310-30, a modification is considered a TDR when a borrower is experiencing financial difficulties and the effective yield after the modification is less than the effective yield at the time the loan was acquired or less than the effective yield of any re-estimation of cash flows subsequent to acquisition in association with consideration of qualitative factors included within ASC 310-40. All TDRs are considered impaired loans. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, are considered in the determination of an appropriate level of allowance for loan losses.

The CARES Act was signed into law on March 27, 2020, which provides a variety of provisions, including, among other things, a small business lending program to originate paycheck protection loans, temporary relief for the community bank leverage ratio, and temporary relief for financial institutions related to troubled debt restructurings. As a result of the COVID-19 pandemic, the Company is currently working with borrowers to provide short-term payment modifications. Any short-term modifications made on a good-faith basis in response to the COVID-19 pandemic to borrowers who were current prior to any relief are not considered TDRs based on interagency guidance. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program was implemented. The Company’s modification programs are designed to provide temporary relief for current borrowers affected by the COVID-19 pandemic. The Company has presumed that borrowers that are current on payments are not experiencing financial difficulties at the time of the modification for purposes of determining TDR status, and thus no further TDR analysis is required for each loan modification in the program.

those loans at September 30, 2020 and a specific reserve of $384 thousand for those loans at December 31, 2019. The Company has not committed to lend additional amounts to borrowers whose loans have been modified. As of September 30, 2020, there were $2.4 million of nonperforming TDRs and $1.2 million of performing TDRs included in impaired loans. As of December 31, 2019, there were $3.0 million of nonperforming TDRs and $906 thousand of performing TDRs included in impaired loans.

The following table presents the recorded investment of loans modified as TDRs during the three and nine months ended September 30, 2020 and nine months ended September 30, 2019, by type of concession granted. There were no loans modified as TDRs during the three months ended September 30, 2019. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession.


	Concession type									Financial effects of modification
(Dollars in thousands)	Principal deferral		Interest rate		Forbearance agreement		Total number of loans	Total recorded investment		Net charge-offs		Provision for loan losses
Three months ended September 30, 2020

Commercial and industrial	$	—	$	—	$	148	1	$	148	$	—	$	—


Total	$	—	$	—	$	148	1	$	148	$	—	$	—
Nine months ended September 30, 2020

Commercial and industrial	$	—	$	—	$	148	1	$	148	$	—	$	—
Residential real estate	—		75		—		1	75		—		—

Total	$	—	$	75	$	148	2	$	223	$	—	$	—





Nine months ended September 30, 2019

Commercial and industrial	$	—	$	—	$	351	2	$	351	$	—	$	174

Total	$	—	$	—	$	351	2	$	351	$	—	$	174

On an ongoing basis, the Company monitors the performance of TDRs to their modified terms. There were no loans modified as TDRs during the twelve months ending September 30, 2020 and 2019, for which there was a subsequent default. A payment on a TDR is considered to be in default once it is greater than 30 days past due.

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, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes commercial and industrial and commercial real estate loans and is performed on an annual basis. The Company uses the following definitions for risk ratings:

Pass. Loans classified as pass are higher quality loans that do not fit any of the other categories described below. This category includes loans risk rated with the following ratings: cash/stock secured, excellent credit risk, superior credit risk, good credit risk, satisfactory credit risk, and marginal credit risk.

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 Company'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 distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.


(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2020
Commercial real estate	$	703,241	$	19,686	$	6,723	$	539	$	730,189
Commercial and industrial	773,242		17,874		12,260		4,547		807,923
Total	$	1,476,483	$	37,560	$	18,983	$	5,086	$	1,538,112
December 31, 2019
Commercial real estate	$	591,419	$	8,325	$	4,042	$	860	$	604,646
Commercial and industrial	383,756		8,967		16,527		978		410,228
Total	$	975,175	$	17,292	$	20,569	$	1,838	$	1,014,874

For residential real estate loans and consumer loans, the Company evaluates credit quality based on the aging status of the loan and by payment activity. Residential real estate loans and consumer loans are considered nonperforming if they are 90 days or more past due. Consumer loan types are continuously monitored for changes in delinquency trends and other asset quality indicators.


(Dollars in thousands)	Performing		Nonperforming		Total
September 30, 2020
Residential real estate	$	299,937	$	4,151	$	304,088
Consumer	1,673		15		1,688
Total	$	301,610	$	4,166	$	305,776
December 31, 2019
Residential real estate	$	209,270	$	2,569	$	211,839
Consumer	880		16		896
Total	$	210,150	$	2,585	$	212,735

As part of the Company's previous five acquisitions, the Company acquired purchase credit impaired ("PCI") loans for which there was evidence of credit quality deterioration since origination, and we determined that it was probable that the Company would be unable to collect all contractually required principal and interest payments. The total balance of all PCI loans from these acquisitions was as follows:


(Dollars in thousand)	Unpaid Principal Balance		Recorded Investment
September 30, 2020
Commercial real estate	$	6,304	$	2,841
Commercial and industrial	683		281
Residential real estate	4,048		2,945

Total PCI loans	$	11,035	$	6,067
December 31, 2019
Commercial real estate	$	6,597	$	2,884
Commercial and industrial	556		135
Residential real estate	4,215		2,954
Total PCI loans	$	11,368	$	5,973


	For the three months ended September 30,				For the nine months ended September 30,
(Dollars in thousands)	2020		2019		2020		2019
Accretable yield at beginning of period	$	8,374	$	10,194	$	9,141	$	10,947
Additions due to acquisitions	—		—		35		—
Accretion of income	(482)		(597)		(1,350)		(1,772)
Adjustments to accretable yield	—		—		66		422

Accretable yield at end of period	$	7,892	$	9,597	$	7,892	$	9,597

In the normal course of business, the Company offers a variety of financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include outstanding commitments to extend credit, credit lines, commercial letters of credit and standby letters of credit. Commitments to extend credit are agreements to provide credit to a customer, as long as conditions established in the contract are met, and usually have expiration dates. Commitments may expire without being used and the total commitment amounts do not necessarily represent future cash flow requirements.

Standby letters of credit and commercial letters of credit are conditional commitments issued by the Company to guarantee the performance of a customer to a third party. Standby letters of credit generally are contingent upon the failure of the customer to perform according to the terms of the underlying contract with the third party, while commercial letters of credit are issued specifically to facilitate commerce and typically result in the commitment being drawn on when the underlying transaction is consummated between the customer and the third party. These financial standby letters of credit irrevocably obligate the Company to pay a third-party beneficiary when a customer fails to repay an outstanding loan or debt instrument.

Off-balance sheet risk to credit loss exists up to the face amount of these instruments, although material losses are not anticipated. The same credit policies used for loans are used to make such commitments, including obtaining collateral at exercise of the commitment. We maintain an allowance to cover probable losses inherent in our financial instruments with off-balance sheet risk. At September 30, 2020, the allowance for off-balance sheet risk was $498 thousand, compared to $318 thousand at December 31, 2019, and was included in "Other liabilities" on our consolidated balance sheets.


	September 30, 2020				December 31, 2019
(Dollars in thousands)	Fixed		Variable		Fixed		Variable
Commitments to make loans	$	5,302	$	5,295	$	16,276	$	20,128
Unused lines of credit	30,496		361,749		28,723		288,086
Unused standby letters of credit and commercial letters of credit	3,705		2,028		4,895		—