Loans and allowance for credit losses:

Loans outstanding at March 31, 2020 and December 31, 2019, by class of financing receivable are as follows:



	March 31,			December 31,
	2020			2019
Commercial and industrial	$	1,020,484		$	1,034,036
Construction	599,479			551,101
Residential real estate:
1-to-4 family mortgage	743,336			710,454
Residential line of credit	246,527			221,530
Multi-family mortgage	94,638			69,429
Commercial real estate:
Owner occupied	686,543			630,270
Non-owner occupied	910,822			920,744
Consumer and other	266,209			272,078
Gross loans	4,568,038			4,409,642
Less: Allowance for credit losses	(89,141		)	(31,139		)
Net loans	$	4,478,897		$	4,378,503

As of March 31, 2020 and December 31, 2019, $422,916 and $412,966, respectively, of qualifying residential mortgage loans (including loans held for sale) and $571,358 and $545,540, respectively, of qualifying commercial mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line of credit. As of March 31, 2020 and December 31, 2019, $1,460,435 and $1,407,662, respectively, of qualifying loans were pledged to the Federal Reserve Bank under the Borrower-in-Custody program.

The components of amortized cost for loans on the consolidated balance sheet excludes accrued interest receivable since the Company elected to present accrued interest receivable separately on the balance sheet. As of March 31, 2020, total accrued interest receivable on loans was $16,019.

As of January 1, 2020, the Company’s policy for the allowance changed with the adoption of CECL. As permitted, the new guidance was implemented using a modified retrospective approach with the impact of the initial adoption being recorded through retained earnings at January 1, 2020, with no restatement of prior periods. Before January 1, 2020, the Company calculated the allowance on an incurred loss approach. As of January 1, 2020, the Company calculates an expected credit loss using a lifetime loss rate methodology. As a result of the difference in methodology between periods, disclosures presented below may not be comparative in nature.

The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. The weighting of the economic forecast scenarios, macroeconomic variables, and the reasonable and supportable forecast period at the macroeconomic variable-level were reviewed and approved by the Company's forecast governance committee based on expectations of future economic conditions. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history.

The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool.

The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations.

The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss.

When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; troubled debt restructurings (“TDRs”) and reasonably expected TDRs. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs. Reasonably expected TDRs use the same methodology as TDRs. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis. The allowance for credit losses on a TDR or a reasonably expected TDR is calculated individually using a discounted cash flow methodology, unless the loan is deemed to be collateral dependent or foreclosure is probable.

The Company’s changes in reasonable and supportable forecasts of macroeconomic variables, primarily due to the impact of the COVID-19 pandemic, along with projected deterioration required the Company to recognize a significant increase in provision for credit losses during the first quarter of 2020. Specifically, deterioration in the U.S. economy and labor markets including rising unemployment and forecast deterioration in the housing market data impacted the Company’s financial assets. Additionally, the acquisition of loans from Farmers National increased the allowance for credit losses by $4,494 during the quarter. See Note 2, "Mergers and acquisitions" for additional details related to PCD loans acquired on February 14, 2020.

The following provides the changes in the allowance for credit losses by class of financing receivable for the three months ended March 31, 2020 and 2019:



	Commercial and industrial			Construction		1-to-4 family residential mortgage			Residential line of credit			Multi- family residential mortgage		Commercial real estate owner occupied			Commercial real estate non-owner occupied		Consumer and other			Total
Three Months Ended March 31, 2020
Beginning balance - December 31, 2019	$	4,805		$	10,194	$	3,112		$	752		$	544	$	4,109		$	4,621	$	3,002		$	31,139
Impact of adopting ASC 326 on non-purchased credit deteriorated loans	5,300			1,533		7,920			3,461			340		1,879			6,822		3,633			30,888
Impact of adopting ASC 326 on purchased credit deteriorated loans	82			150		421			(3		)	—		162			184		(438		)	558
Provision for credit losses	1,829			10,954		1,664			1,985			1,444		3,038			5,935		1,115			27,964
Recoveries of loans previously charged-off	88			—		24			15			—		14			—		193			334
Loans charged off	(1,234		)	—		(242		)	—			—		(209		)	—		(726		)	(2,411		)
Initial allowance on loans purchased with deteriorated credit quality	11			11		107			3			—		54			443		40			669
Ending balance - March 31, 2020	$	10,881		$	22,842	$	13,006		$	6,213		$	2,328	$	9,047		$	18,005	$	6,819		$	89,141



	Commercial and industrial			Construction		1-to-4 family residential mortgage			Residential line of credit			Multi- family residential mortgage			Commercial real estate owner occupied			Commercial real estate non-owner occupied		Consumer and other			Total
Three Months Ended March 31, 2019
Beginning balance - December 31, 2018	$	5,348		$	9,729	$	3,428		$	811		$	566		$	3,132		$	4,149	$	1,769		$	28,932
Provision for credit losses	333			28		(65		)	(73		)	(27		)	(121		)	434		882			1,391
Recoveries of loans previously charged-off	12			1		13			25			—			87			—		224			362
Loans charged off	(179		)	—		(81		)	(32		)	—			—			—		(579		)	(871		)
Ending balance - March 31, 2019	$	5,514		$	9,758	$	3,295		$	731		$	539		$	3,098		$	4,583	$	2,296		$	29,814

The following table provides the amount of the allowance for credit losses by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019 :



	December 31, 2019
	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi- family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Amount of allowance allocated to:
Individually evaluated for impairment	$	241	$	—	$	8	$	9	$	—	$	238	$	399	$	—	$	895
Collectively evaluated for impairment	4,457		10,192		2,940		743		544		3,853		3,909		1,933		28,571
Acquired with deteriorated credit quality	107		2		164		—		—		18		313		1,069		1,673
Ending balance - December 31, 2019	$	4,805	$	10,194	$	3,112	$	752	$	544	$	4,109	$	4,621	$	3,002	$	31,139

The following table provides the amount of loans by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019:



	December 31, 2019
	Commercial and industrial		Construction		1-to-4 family residential mortgage		Residential line of credit		Multi- family residential mortgage		Commercial real estate owner occupied		Commercial real estate non-owner occupied		Consumer and other		Total
Loans, net of unearned income
Individually evaluated for impairment	$	9,026	$	2,061	$	1,347	$	579	$	—	$	2,993	$	7,755	$	49	$	23,810
Collectively evaluated for impairment	1,023,326		546,156		689,769		220,878		69,429		621,386		902,792		254,944		4,328,680
Acquired with deteriorated credit quality	1,684		2,884		19,338		73		—		5,891		10,197		17,085		57,152
Ending balance - December 31, 2019	$	1,034,036	$	551,101	$	710,454	$	221,530	$	69,429	$	630,270	$	920,744	$	272,078	$	4,409,642

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 that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually.

The Company uses the following definitions for risk ratings:

Pass. Loans rated Pass include those that are adequately performing and collateralized and which management believes do not have conditions that have occurred or may occur which would result in the loan being downgraded into an inferior category.

Watch. Loans rated as Watch include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category. Also included in watch are loans rated as special mention, which 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 rated 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 rated have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution 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.

Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes.

The following table presents the credit quality of our loan portfolio by year of origination as of March 31, 2020. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the table below.



As of March 31, 2020
	Term Loans
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial and industrial
Pass	$	29,008	$	178,014	$	82,142	$	46,942	$	38,723	$	34,087	$	502,092	$	911,008
Watch	—		10,643		29,243		6,647		5,766		4,691		32,191		89,181
Substandard	—		2,385		4,649		1,474		1,386		3,765		6,636		20,295
Doubtful	—		—		—		—		—		—		—		—
Total	29,008		191,042		116,034		55,063		45,875		42,543		540,919		1,020,484

Construction
Pass	22,601		180,870		103,731		59,843		33,080		81,213		98,582		579,920
Watch	—		529		825		10,099		769		2,877		—		15,099
Substandard	—		854		—		34		—		3,241		212		4,341
Doubtful	—		101		—		—		18		—		—		119
Total	22,601		182,354		104,556		69,976		33,867		87,331		98,794		599,479

Residential real estate:
1-to-4 family mortgage
Pass	46,111		183,701		149,607		97,244		68,876		156,697		—		702,236
Watch	325		3,425		1,195		2,286		3,921		13,358		—		24,510
Substandard	—		978		1,584		3,848		1,636		8,020		—		16,066
Doubtful	—		—		—		16		68		440		—		524
Total	46,436		188,104		152,386		103,394		74,501		178,515		—		743,336

Residential line of credit
Pass	88		586		426		333		608		4,404		236,775		243,220
Watch	—		—		—		14		—		—		858		872
Substandard	—		—		—		—		—		79		1,836		1,915
Doubtful	—		—		—		—		—		—		520		520
Total	88		586		426		347		608		4,483		239,989		246,527

Multi-family mortgage
Pass	18,706		13,848		6,819		23,602		2,972		28,629		—		94,576
Watch	—		—		—		—		—		62		—		62
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total	18,706		13,848		6,819		23,602		2,972		28,691		—		94,638



	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Total
Commercial real estate
Owner occupied
Pass	23,592		143,780		86,554		74,223		68,452		169,360		59,507		625,468
Watch	—		2,930		1,530		23,001		3,915		15,473		3,263		50,112
Substandard	—		1,804		321		982		60		6,555		1,241		10,963
Doubtful	—		—		—		—		—		—		—		—
Total	23,592		148,514		88,405		98,206		72,427		191,388		64,011		686,543

Non-owner occupied
Pass	27,593		144,200		192,928		131,450		178,873		182,983		24,904		882,931
Watch	—		—		1,716		312		214		11,705		133		14,080
Substandard	—		32		208		—		385		13,186		—		13,811
Doubtful	—		—		—		—		—		—		—		—
Total	27,593		144,232		194,852		131,762		179,472		207,874		25,037		910,822

Consumer and other loans
Pass	13,197		65,905		49,483		31,174		44,369		32,513		7,591		244,232
Watch	—		551		1,034		1,611		3,321		9,062		588		16,167
Substandard	20		79		592		691		650		2,036		352		4,420
Doubtful	—		146		373		421		104		346		—		1,390
Total	13,217		66,681		51,482		33,897		48,444		43,957		8,531		266,209

Total Loans
Pass	180,896		910,904		671,690		464,811		435,953		689,886		929,451		4,283,591
Watch	325		18,078		35,543		43,970		17,906		57,228		37,033		210,083
Substandard	20		6,132		7,354		7,029		4,117		36,882		10,277		71,811
Doubtful	—		247		373		437		190		786		520		2,553
Total	$	181,241	$	935,361	$	714,960	$	516,247	$	458,166	$	784,782	$	977,281	$	4,568,038

The following table shows credit quality indicators by class of financing receivable at December 31, 2019.



December 31, 2019	Pass		Watch		Substandard		Total
Loans, excluding purchased credit impaired loans
Commercial and industrial	$	946,247	$	66,910	$	19,195	$	1,032,352
Construction	541,201		4,790		2,226		548,217
Residential real estate:
1-to-4 family mortgage	666,177		11,380		13,559		691,116
Residential line of credit	218,086		1,343		2,028		221,457
Multi-family mortgage	69,366		63		—		69,429
Commercial real estate:
Owner occupied	576,737		30,379		17,263		624,379
Non-owner occupied	876,670		24,342		9,535		910,547
Consumer and other	248,632		3,304		3,057		254,993
Total loans, excluding purchased credit impaired loans	$	4,143,116	$	142,511	$	66,863	$	4,352,490
Purchased credit impaired loans
Commercial and industrial	$	—	$	1,224	$	460	$	1,684
Construction	—		2,681		203		2,884
Residential real estate:
1-to-4 family mortgage	—		15,091		4,247		19,338
Residential line of credit	—		—		73		73
Multi-family mortgage	—		—		—		—
Commercial real estate:
Owner occupied	—		4,535		1,356		5,891
Non-owner occupied	—		6,617		3,580		10,197
Consumer and other	—		13,521		3,564		17,085
Total purchased credit impaired loans	$	—	$	43,669	$	13,483	$	57,152
Total loans	$	4,143,116	$	186,180	$	80,346	$	4,409,642

Nonaccrual and Past Due Loans

Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest.

The following tables provide information on nonaccrual and past due loans as of March 31, 2020 and December 31, 2019. Purchased credit impaired ("PCI") loans have historically not been included in the nonperforming disclosures as these loans are considered to be performing, even though they may be contractually past due. This is because any non-payment of contractual principal or interest was considered in the periodic re-estimation of expected cash flows and was included in the 2019 loan loss provision or future period yield adjustments. Under PCD accounting, management considers changes in the credit quality of the borrower as part of its regular estimation of expected credit losses and does not make the same future yield adjustments as under the PCI accounting. Consequently, PCD loans that are contractually past due or on nonaccrual status, including those formerly accounted for as PCI loans, are included in the March 31, 2020 nonperforming disclosures.

The following table represents an analysis of the aging by class of financing receivable as of March 31, 2020:



March 31, 2020	30-89 days past due		90 days or more and accruing interest		Non-accrual loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	5,015	$	728	$	3,584	$	1,011,157	$	1,020,484
Construction	6,770		183		1,439		591,087		599,479
Residential real estate:
1-to-4 family mortgage	9,569		3,975		5,153		724,639		743,336
Residential line of credit	450		652		600		244,825		246,527
Multi-family mortgage	415		—		—		94,223		94,638
Commercial real estate:
Owner occupied	2,008		1		1,903		682,631		686,543
Non-owner occupied	2,931		32		9,735		898,124		910,822
Consumer and other	2,852		888		2,133		260,336		266,209
Total	$	30,010	$	6,459	$	24,547	$	4,507,022	$	4,568,038

The following table provides the amortized cost basis of loans on non-accrual status by class of financing receivable as of March 31, 2020:



March 31, 2020	Beginning of period non-accrual amortized cost		End of period non-accrual amortized cost		Related allowance		Non-accrual with no related allowance		Interest income on non-accrual loans

Commercial and industrial	$	5,586	$	3,584	$	185	$	2,496	$	152
Construction	1,254		1,439		14		1,226		27
Residential real estate:
1-to-4 family mortgage	4,585		5,153		54		176		7
Residential line of credit	489		600		6		151		1
Multi-family mortgage	—		—		—		—		—
Commercial real estate:
Owner occupied	2,285		1,903		79		1,098		21
Non-owner occupied	9,460		9,735		442		2,339		19
Consumer and other	1,623		2,133		84		—		—
Total	$	25,282	$	24,547	$	864	$	7,486	$	227

The following table provides the period-end amounts of loans that are past due, loans not accruing interest and loans current on payments accruing interest by category at December 31, 2019:



December 31, 2019	30-89 days past due		90 days or more and accruing interest		Non-accrual loans		Purchased Credit Impaired loans		Loans current on payments and accruing interest		Total
Commercial and industrial	$	1,918	$	291	$	5,587	$	1,684	$	1,024,556	$	1,034,036
Construction	1,021		42		1,087		2,884		546,067		551,101
Residential real estate:
1-to-4 family mortgage	10,738		3,965		3,332		19,338		673,081		710,454
Residential line of credit	658		412		416		73		219,971		221,530
Multi-family mortgage	63		—		—		—		69,366		69,429
Commercial real estate:
Owner occupied	1,375		—		1,793		5,891		621,211		630,270
Non-owner occupied	327		—		7,880		10,197		902,340		920,744
Consumer and other	2,377		833		967		17,085		250,816		272,078
Total	$	18,477	$	5,543	$	21,062	$	57,152	$	4,307,408	$	4,409,642

Impaired loans recognized in conformity with ASC 310 at December 31, 2019 segregated by class, were as follows:



December 31, 2019	Recorded investment		Unpaid principal		Related allowance
With a related allowance recorded:
Commercial and industrial	$	6,080	$	8,350	$	241
Construction	—		—		—
Residential real estate:
1-to-4 family mortgage	264		324		8
Residential line of credit	320		320		9
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	756		1,140		238
Non-owner occupied	6,706		6,747		399
Consumer and other	—		—		—
Total	$	14,126	$	16,881	$	895
With no related allowance recorded:
Commercial and industrial	$	2,946	$	3,074	$	—
Construction	2,061		2,499		—
Residential real estate:
1-to-4 family mortgage	1,083		1,449		—
Residential line of credit	259		280		—
Multi-family mortgage	—		—		—
Commercial real estate:
Owner occupied	2,237		2,627		—
Non-owner occupied	1,049		1,781		—
Consumer and other	49		49		—
Total	$	9,684	$	11,759	$	—
Total impaired loans	$	23,810	$	28,640	$	895

Average recorded investment and interest income on a cash basis recognized during the three months ended March 31, 2019 on impaired loans, segregated by class, were as follows:



Three months ended March 31, 2019	Average recorded investment		Interest income recognized (cash basis)
With a related allowance recorded:
Commercial and industrial	$	1,902	$	38
Construction	—		—
Residential real estate:
1-to-4 family mortgage	275		2
Residential line of credit	—		—
Multi-family mortgage	—		—
Commercial real estate:
Owner occupied	375		2
Non-owner occupied	5,668		—
Consumer and other	—		—
Total	$	8,220	$	42
With no related allowance recorded:
Commercial and industrial	1,044		14
Construction	1,221		48
Residential real estate:
1-to-4 family mortgage	656		8
Residential line of credit	425		2
Multi-family mortgage	—		—
Commercial real estate:
Owner occupied	1,957		28
Non-owner occupied	1,049		—
Consumer and other	72		2
Total	$	6,424	$	102
Total impaired loans	$	14,644	$	144

Purchased Credit Impaired Loans

As of December 31, 2019, the carrying value of PCI loans accounted for under ASC 310-30 "Loans and Debt Securities Acquired with Deteriorated Credit Quality" was $57,152. The following table presents changes in the value of the accretable yield for PCI loans for the periods indicated.



	Three Months Ended March 31,
	2019
Balance at the beginning of period	$	(16,587	)
Principal reductions and other reclassifications from nonaccretable difference	220
Accretion	2,183
Changes in expected cash flows	(630		)
Balance at end of period	$	(14,814	)

Included in the ending balance of the accretable yield on PCI loans at December 31, 2019, is a purchase accounting liquidity discount of $292. There is also a purchase accounting nonaccretable credit discount of $3,537 related to the PCI loan portfolio at December 31, 2019, and an accretable credit and liquidity discount on non-PCI loans of $8,964 and $3,924, respectively, as of December 31, 2019.

Interest revenue, through accretion of the difference between the recorded investment of the loans and the expected cash flows, is being recognized on all PCI loans. Accretion of interest income amounting to $2,183 was recognized on PCI loans during the three months ended March 31, 2019. This includes both the contractual interest income recognized and the purchase accounting contribution through accretion of the liquidity discount for changes in estimated cash flows. The total purchase accounting contribution through accretion excluding contractual interest collected for all purchased loans was $1,831 for the three months ended March 31, 2019.

Troubled Debt Restructuring (TDRs)

As of March 31, 2020 and December 31, 2019, the Company has a recorded investment in troubled debt restructurings of $11,566 and $12,206, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate to borrowers experiencing financial difficulty. The Company has calculated $143 and $360 of specific reserves for those loans at March 31, 2020 and December 31, 2019, respectively. There were no commitments to lend any additional amounts to these customers for either period end. Of these loans, $4,893 and $5,201 were classified as non-accrual loans as of March 31, 2020 and December 31, 2019, respectively.

The following tables present the financial effect of TDRs recorded during the periods indicated.



Three Months Ended March 31, 2020	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Residential real estate:
1-to-4 family mortgage	1	$	64	$	64	$	—
Total	1	$	64	$	64	$	—



Three Months Ended March 31, 2019	Number of loans	Pre-modification outstanding recorded investment		Post-modification outstanding recorded investment		Charge offs and specific reserves
Commercial and industrial	2	$	3,188	$	3,188	$	—
Total	2	$	3,188	$	3,188	$	—

There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three months ended March 31, 2020 and 2019. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

The terms of certain other loans were modified during the years ended March 31, 2020 and 2019 that did not meet the definition of a troubled debt restructuring. The modification of these loans usually involve either a modification of the terms of a loan to borrowers who are not experiencing financial difficulties or an insignificant delay in payments. During the three months ended March 31, 2020, the Company executed deferrals on loans with principal balances totaling $35,461 in connection with the COVID-19 relief provided by the CARES Act. These deferrals typically ranged from sixty to ninety days and were not considered troubled debt restructurings under the interagency regulatory guidance or the CARES Act issued in March 2020.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the company’s internal underwriting policy.

For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following table presents the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable.



	March 31, 2020
	Type of Collateral
	Real Estate		Land		Farmland		Equipment		Individually assessed allowance for credit loss
Commercial and industrial	$	—	$	—	$	—	$	36	$	—
Construction	—		1,024		—		—		—
Residential real estate:
1-to-4 family mortgage	125		—		—		—		—
Residential line of credit	320		—		—		—		9
Multi-family mortgage	—		—		—		—		—
Commercial real estate:
Owner occupied	744		—		—		—		41
Non-owner occupied	2,391		—		—		—		81
Consumer and other	—		—		332		—		—
Total	$	3,580	$	1,024	$	332	$	36	$	131