At June 30, 2021 and December 31, 2020, LHFI consisted of the following ($ in thousands):

Accrued interest receivable is not included in the amortized cost basis of Trustmark’s LHFI. At June 30, 2021 and December 31, 2020, accrued interest receivable for LHFI totaled $29.7 million and $33.0 million, respectively, with no related ACL and was reported in other assets on the accompanying consolidated balance sheet.

Trustmark does not have any loan concentrations other than those reflected in the preceding table, which exceed 10% of total LHFI. At June 30, 2021, Trustmark’s geographic loan distribution was concentrated primarily in its five key market regions: Alabama, Florida, Mississippi, Tennessee and Texas. Accordingly, the ultimate collectability of a substantial portion of these loans is susceptible to changes in market conditions in these areas.

No material interest income was recognized in the income statement on nonaccrual LHFI for each of the periods ended June 30, 2021 and 2020.

The following tables provide the amortized cost basis of loans on nonaccrual status and loans past due 90 days or more still accruing interest at June 30, 2021 and December 31, 2020 ($ in thousands):

The following tables provide an aging analysis of the amortized cost basis of past due LHFI at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021
	Past Due
	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total LHFI
Loans secured by real estate:
Construction, land development and other land	$	352	$	5,583	$	196	$	6,131	$	526,506	$	532,637
Other secured by 1-4 family residential properties		1,160		538		803		2,501		505,232		507,733
Secured by nonfarm, nonresidential properties		422		23		693		1,138		2,818,524		2,819,662
Other real estate secured		63		—		107		170		1,078,452		1,078,622
Other loans secured by real estate:
Other construction		—		—		—		—		827,665		827,665
Secured by 1-4 family residential properties		2,230		1,061		5,816		9,107		1,293,556		1,302,663
Commercial and industrial loans		291		65		3,797		4,153		1,322,452		1,326,605
Consumer loans		767		87		116		970		155,105		156,075
State and other political subdivision loans		—		—		177		177		1,136,587		1,136,764
Other commercial loans		400		73		5,086		5,559		458,884		464,443
Total	$	5,685	$	7,430	$	16,791	$	29,906	$	10,122,963	$	10,152,869

	December 31, 2020
	Past Due
	30-59 Days		60-89 Days		90 Days or More		Total Past Due		Current Loans		Total LHFI
Loans secured by real estate:
Construction, land development and other land	$	339	$	34	$	161	$	534	$	513,522	$	514,056
Other secured by 1-4 family residential properties		1,505		523		896		2,924		521,808		524,732
Secured by nonfarm, nonresidential properties		920		—		972		1,892		2,707,134		2,709,026
Other real estate secured		103		101		107		311		1,065,653		1,065,964
Other loans secured by real estate:
Other construction		—		—		—		—		794,983		794,983
Secured by 1-4 family residential properties		3,291		1,289		5,110		9,690		1,206,710		1,216,400
Commercial and industrial loans		271		196		1,543		2,010		1,307,068		1,309,078
Consumer loans		926		190		240		1,356		163,030		164,386
State and other political subdivision loans		117		—		177		294		1,000,482		1,000,776
Other commercial loans		2,143		2,971		346		5,460		519,663		525,123
Total	$	9,615	$	5,304	$	9,552	$	24,471	$	9,800,053	$	9,824,524

A TDR occurs when a borrower is experiencing financial difficulties, and for related economic or legal reasons, a concession is granted to the borrower that Trustmark would not otherwise consider. Whatever the form of concession that might be granted by Trustmark, Management’s objective is to enhance collectability by obtaining more cash or other value from the borrower or by increasing the probability of receipt by granting the concession than by not granting it. Other concessions may arise from court proceedings or may be imposed by law. In addition, TDRs also include those credits that are extended or renewed to a borrower who is not able to obtain funds from sources other than Trustmark at a market interest rate for new debt with similar risk.

At June 30, 2021 and 2020, LHFI classified as TDRs totaled $25.1 million and $26.9 million, respectively. At June 30, 2021, TDRs were primarily comprised of payment concessions, credits with interest-only payments for an extended period of time and credits renewed at a rate that was not commensurate with that of new debt with similar risk which totaled $16.4 million. At June 30, 2020, TDRs were primarily comprised of credits with interest-only payments for an extended period of time and credits renewed at a rate that was not commensurate with that of new debt with similar risk which totaled $14.6 million. The remaining TDRs at June 30, 2021 and 2020 resulted from bankruptcies or from payment or maturity extensions. Trustmark had $2.0 million of unused commitments on TDRs at June 30, 2021 compared to $5.6 million at June 30, 2020.

At June 30, 2021, TDRs had a related ACL of $3.9 million, compared to $2.0 million at June 30, 2020. Trustmark had $3.7 million in charge-offs on TDRs for the six months ended June 30, 2021, compared to $2.2 million for the six months ended June 30, 2020.

The following table illustrates the impact of modifications classified as TDRs for the periods presented ($ in thousands):

	Three Months Ended June 30,
	2021						2020
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Loans secured by real estate:
Construction, land development and other land		5	$	5,582	$	5,582		—	$	—	$	—
Other secured by 1-4 family residential properties		3		37		37		3		206		210
Secured by nonfarm, nonresidential properties		1		377		377		1		139		139
Other loans secured by real estate:
Secured by 1-4 family residential properties		1		123		123		—		—		—
Commercial and industrial loans		1		1,000		1,000		—		—		—
Consumer loans		—		—		—		2		6		6
State and other political subdivision loans		—		—		—		2		3,902		3,872
Other commercial loans		2		4,929		4,929		—		—		—
Total		13	$	12,048	$	12,048		8	$	4,253	$	4,227

	Six Months Ended June 30,
	2021						2020
	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Loans secured by real estate:
Construction, land development and other land		5		5,582		5,582		—	$	—	$	—
Other secured by 1-4 family residential properties		3		37		37		8		707		711
Secured by nonfarm, nonresidential properties		1		377		377		1		139		139
Other loans secured by real estate:
Secured by 1-4 family residential properties		3		249		249		—		—		—
Commercial and industrial loans		2		1,014		1,014		2		1,582		1,582
Consumer loans		—		—		—		6		26		26
State and other political subdivision loans		—		—		—		2		3,902		3,872
Other commercial loans		2		4,929		4,929		—		—		—
Total		16	$	12,188	$	12,188		19	$	6,356	$	6,330

The table below includes the balances at default for TDRs modified within the last 12 months for which there was a payment default during the periods presented ($ in thousands):

Trustmark’s TDRs have resulted primarily from allowing the borrower to pay interest-only for an extended period of time and credits renewed at a rate that was not commensurate with that of new debt with similar risk rather than from forgiveness. Accordingly, as shown above, these TDRs have a similar recorded investment for both the pre-modification and post-modification disclosure. Trustmark has utilized loans 90 days or more past due to define payment default in determining TDRs that have subsequently defaulted.

The following tables detail LHFI classified as TDRs by loan class at June 30, 2021 and 2020 ($ in thousands):

The CARES Act, as amended by subsequent legislation, specified that COVID-19 related modifications executed between March 1, 2020 and the earlier of either (i) 60 days after the date of termination of the national emergency declared by the President or (ii) January 1, 2022, on loans that were current as of December 31, 2019 were not TDRs. Additionally, under guidance from the federal banking agencies, other short-term modifications made on a good faith basis in response to COVID-19 to borrowers that were current prior to any relief are not TDRs under the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Subtopic 310-40, “Troubled Debt Restructuring by Creditors.” These modifications include short-term (e.g., up to six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or 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 is implemented. Commercial concessions were primarily either interest only for 90 days or full payment deferrals for 90 days. Consumer concessions were 90-day full payment deferrals. At June 30, 2021, the balance of loans remaining under some type of COVID-19 related concession totaled $19.0 million compared to $34.2 million at December 31, 2020.

The following table presents the amortized cost basis of collateral-dependent loans by class of loans and collateral type as of June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021
	Real Estate		Equipment and Machinery		Inventory and Receivables		Vehicles		Miscellaneous		Total
Loans secured by real estate:
Construction, land development and other land	$	5,903	$	—	$	—	$	—	$	—	$	5,903
Other secured by 1-4 family residential properties		—		—		—		—		—		—
Secured by nonfarm, nonresidential properties		11,763		—		—		—		—		11,763
Other real estate secured		57		—		—		—		—		57
Other loans secured by real estate:
Other construction		—		—		—		—		—		—
Secured by 1-4 family residential properties		1,376		—		—		—		—		1,376
Commercial and industrial loans		43		72		4,285		74		—		4,474
Consumer loans		—		—		—		—		—		—
State and other political subdivision loans		3,854		—		—		—		—		3,854
Other commercial loans		365		—		2,031		4		3,051		5,451
Total	$	23,361	$	72	$	6,316	$	78	$	3,051	$	32,878

	December 31, 2020
	Real Estate		Equipment and Machinery		Inventory and Receivables		Vehicles		Miscellaneous		Total
Loans secured by real estate:
Construction, land development and other land	$	5,756	$	—	$	—	$	—	$	—	$	5,756
Other secured by 1-4 family residential properties		454		—		—		—		—		454
Secured by nonfarm, nonresidential properties		12,037		—		—		—		—		12,037
Other real estate secured		60		—		—		—		—		60
Other loans secured by real estate:
Other construction		—		—		—		—		—		—
Secured by 1-4 family residential properties		1,441		—		—		—		—		1,441
Commercial and industrial loans		86		425		4,899		135		8,531		14,076
Consumer loans		—		—		—		—		—		—
State and other political subdivision loans		3,970		—		—		—		—		3,970
Other commercial loans		606		—		1,958		—		3,051		5,615
Total	$	24,410	$	425	$	6,857	$	135	$	11,582	$	43,409

A loan is collateral dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the sale of the collateral. The following provides a qualitative description by class of loan of the collateral that secures Trustmark’s collateral-dependent LHFI:

Trustmark’s LHFI portfolio credit quality indicators focus on six key quality ratios that are compared against bank tolerances. The loan indicators are total classified outstanding, total criticized outstanding, nonperforming loans, nonperforming assets, delinquencies and net loan losses. Due to the homogenous nature of consumer loans, Trustmark does not assign a formal internal risk rating to each credit and therefore the criticized and classified measures are primarily composed of commercial loans.

In addition to monitoring portfolio credit quality indicators, Trustmark also measures how effectively the lending process is being managed and risks are being identified. As part of an ongoing monitoring process, Trustmark grades the commercial portfolio segment as it relates to credit file completion and financial statement exceptions, underwriting, collateral documentation and compliance with law as shown below:

Trustmark has established a loan grading system that consists of ten individual credit risk grades (risk ratings) that encompass a range from loans where the expectation of loss is negligible to loans where loss has been established. The model is based on the risk of default for an individual credit and establishes certain criteria to delineate the level of risk across the ten unique credit risk grades. Credit risk grade definitions are as follows:

By definition, credit risk grades special mention (RR 7), substandard (RR 8), doubtful (RR 9) and loss (RR 10) are criticized loans while substandard (RR 8), doubtful (RR 9) and loss (RR 10) are classified loans. These definitions are standardized by all bank regulatory agencies and are generally equally applied to each individual lending institution. The remaining credit risk grades are considered pass credits and are solely defined by Trustmark.

To enhance this process, Trustmark has determined that loans will be individually assessed, and a formal analysis will be performed and based upon the analysis the loan will be written down to net realizable value. Trustmark will individually assess and remove loans from the pool in the following circumstances:

Each loan officer assesses the appropriateness of the internal risk rating assigned to their credits on an ongoing basis. Trustmark’s Asset Review area conducts independent credit quality reviews of the majority of Trustmark’s commercial loan portfolio both on the underlying credit quality of each individual loan class as well as the adherence to Trustmark’s loan policy and the loan administration process.

In addition to the ongoing internal risk rate monitoring described above, Trustmark’s Credit Quality Review Committee meets monthly and performs a review of all loans of $100 thousand or more that are either delinquent 30 days or more or on nonaccrual. This review includes recommendations regarding risk ratings, accrual status, charge-offs and appropriate servicing officer as well as evaluation of problem credits for determination of TDRs. Quarterly, the Credit Quality Review Committee reviews and modifies continuous action plans for all credits risk rated seven or worse for relationships of $100 thousand or more.

In addition, periodic reviews of significant development, commercial construction, multi-family and nonowner-occupied projects are performed. These reviews assess each particular project with respect to location, project valuations, progress of completion, leasing status, current financial information, rents, operating expenses, cash flow, adherence to budget and projections and other information as applicable. Summary results are reviewed by Senior and Regional Credit Officers in addition to the Chief Credit Officer with a determination made as to the appropriateness of existing risk ratings and accrual status.

Consumer LHFI that do not meet a minimum custom credit score are reviewed quarterly by Management. The Retail Credit Review Committee reviews the volume and percentage of approvals that did not meet the minimum passing custom score to ensure that Trustmark continues to originate quality loans.

Trustmark monitors the levels and severity of past due consumer LHFI on a daily basis through its collection activities. A detailed assessment of consumer LHFI delinquencies is performed monthly at both a product and market level by delivery channel, which incorporates the perceived level of risk at time of underwriting.

The tables below present the amortized cost basis of loans by credit quality indicator and class of loans based on analyses performed at June 30, 2021 and December 31, 2020 ($ in thousands):

	Term Loans by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total
As of June 30, 2021	Commercial LHFI
Loans secured by real estate:
Construction, land development and other land:
Pass - RR 1 through RR 6	$	188,112	$	163,334	$	36,863	$	15,430	$	1,880	$	5,231	$	33,860	$	444,710
Special Mention - RR 7		—		—		—		—		—		—		—		—
Substandard - RR 8		2,538		15		3,461		44		12		112		—		6,182
Doubtful - RR 9		—		—		—		—		—		42		—		42
Total		190,650		163,349		40,324		15,474		1,892		5,385		33,860		450,934

Other secured by 1-4 family residential properties:
Pass - RR 1 through RR 6	$	20,192	$	28,659	$	15,975	$	12,834	$	7,585	$	8,108	$	7,366	$	100,719
Special Mention - RR 7		143		181		—		47		—		—		—		371
Substandard - RR 8		649		432		7		181		157		676		—		2,102
Doubtful - RR 9		—		25		—		—		—		—		—		25
Total		20,984		29,297		15,982		13,062		7,742		8,784		7,366		103,217

Secured by nonfarm, nonresidential properties:
Pass - RR 1 through RR 6	$	281,444	$	635,065	$	590,473	$	445,938	$	241,109	$	404,951	$	79,715	$	2,678,695
Special Mention - RR 7		10,324		9,729		1,445		1,683		1,640		4,874		—		29,695
Substandard - RR 8		14,553		2,787		24,746		4,211		3,747		59,278		1,508		110,830
Doubtful - RR 9		48		—		150		—		—		206		—		404
Total		306,369		647,581		616,814		451,832		246,496		469,309		81,223		2,819,624

Other real estate secured:
Pass - RR 1 through RR 6	$	139,687	$	90,717	$	451,580	$	256,369	$	33,260	$	79,188	$	12,611	$	1,063,412
Special Mention - RR 7		—		—		—		—		—		808		—		808
Substandard - RR 8		3,836		9,999		—		12		—		179		—		14,026
Doubtful - RR 9		—		—		—		—		—		—		—		—
Total		143,523		100,716		451,580		256,381		33,260		80,175		12,611		1,078,246

	Term Loans by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total
As of June 30, 2021	Commercial LHFI
Other loans secured by real estate:
Other construction:
Pass - RR 1 through RR 6	$	178,219	$	389,105	$	231,297	$	19,166	$	—	$	—	$	8,505	$	826,292
Special Mention - RR 7		—		—		—		—		—		—		—		—
Substandard - RR 8		1,373		—		—		—		—		—		—		1,373
Doubtful - RR 9		—		—		—		—		—		—		—		—
Total		179,592		389,105		231,297		19,166		—		—		8,505		827,665

Commercial and industrial loans:
Pass - RR 1 through RR 6	$	277,330	$	304,664	$	140,848	$	43,836	$	57,941	$	77,328	$	367,148	$	1,269,095
Special Mention - RR 7		1,032		385		212		715		97		—		678		3,119
Substandard - RR 8		6,640		6,032		1,799		1,472		3,589		3,251		31,294		54,077
Doubtful - RR 9		1		134		43		111		—		25		—		314
Total		285,003		311,215		142,902		46,134		61,627		80,604		399,120		1,326,605

State and other political subdivision loans:
Pass - RR 1 through RR 6	$	232,696	$	193,403	$	92,035	$	36,643	$	100,328	$	466,386	$	8,069	$	1,129,560
Special Mention - RR 7		—		—		—		—		—		3,350		—		3,350
Substandard - RR 8		—		—		—		—		—		3,854		—		3,854
Doubtful - RR 9		—		—		—		—		—		—		—		—
Total		232,696		193,403		92,035		36,643		100,328		473,590		8,069		1,136,764

Other commercial loans:
Pass - RR 1 through RR 6	$	53,866	$	53,529	$	69,767	$	15,147	$	8,607	$	62,018	$	176,553	$	439,487
Special Mention - RR 7		—		—		—		—		—		—		—		—
Substandard - RR 8		—		7,235		2,113		415		—		316		14,804		24,883
Doubtful - RR 9		—		50		—		—		—		23		—		73
Total		53,866		60,814		71,880		15,562		8,607		62,357		191,357		464,443

Total commercial LHFI	$	1,412,683	$	1,895,480	$	1,662,814	$	854,254	$	459,952	$	1,180,204	$	742,111	$	8,207,498

	Term Loans by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total
As of June 30, 2021	Consumer LHFI
Loans secured by real estate:
Construction, land development and other land:
Current	$	17,103	$	43,274	$	11,951	$	4,272	$	1,092	$	3,183	$	451	$	81,326
Past due 30-89 days		—		—		162		19		—		65		—		246
Past due 90 days or more		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		131		—		131
Total		17,103		43,274		12,113		4,291		1,092		3,379		451		81,703

Other secured by 1-4 family residential properties:
Current	$	16,240	$	13,834	$	7,724	$	7,426	$	3,730	$	10,239	$	341,240	$	400,433
Past due 30-89 days		—		42		112		—		—		88		548		790
Past due 90 days or more		—		—		32		—		—		—		21		53
Nonaccrual		14		61		15		11		412		371		2,356		3,240
Total		16,254		13,937		7,883		7,437		4,142		10,698		344,165		404,516

Secured by nonfarm, nonresidential properties:
Current	$	35	$	—	$	—	$	—	$	3	$	—	$	—	$	38
Past due 30-89 days		—		—		—		—		—		—		—		—
Past due 90 days or more		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total		35		—		—		—		3		—		—		38

Other real estate secured:
Current	$	—	$	102	$	—	$	9	$	34	$	231	$	—	$	376
Past due 30-89 days		—		—		—		—		—		—		—		—
Past due 90 days or more		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total		—		102		—		9		34		231		—		376

	Term Loans by Origination Year
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total
As of June 30, 2021	Consumer LHFI
Other loans secured by real estate:
Secured by 1-4 family residential properties
Current	$	308,154	$	258,410	$	167,332	$	133,808	$	73,300	$	346,774	$	—	$	1,287,778
Past due 30-89 days		—		701		186		174		121		1,229		—		2,411
Past due 90 days or more		—		253		—		—		—		2		—		255
Nonaccrual		—		1,203		896		2,110		861		7,149		—		12,219
Total		308,154		260,567		168,414		136,092		74,282		355,154		—		1,302,663

Consumer loans:
Current	$	37,466	$	40,869	$	15,320	$	8,082	$	2,317	$	907	$	50,097	$	155,058
Past due 30-89 days		327		163		52		25		1		1		279		848
Past due 90 days or more		20		—		12		—		—		—		84		116
Nonaccrual		—		5		3		20		10		1		14		53
Total		37,813		41,037		15,387		8,127		2,328		909		50,474		156,075

Total consumer LHFI	$	379,359	$	358,917	$	203,797	$	155,956	$	81,881	$	370,371	$	395,090	$	1,945,371

Total LHFI	$	1,792,042	$	2,254,397	$	1,866,611	$	1,010,210	$	541,833	$	1,550,575	$	1,137,201	$	10,152,869

	Term Loans by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
As of December 31, 2020	Commercial LHFI
Loans secured by real estate:
Construction, land development and other land:
Pass - RR 1 through RR 6	$	287,218	$	62,078	$	26,401	$	4,487	$	3,274	$	3,564	$	28,548	$	415,570
Special Mention - RR 7		—		—		—		—		—		—		—		—
Substandard - RR 8		5,419		4,363		1,226		12		494		22		101		11,637
Doubtful - RR 9		—		—		—		—		—		42		—		42
Total		292,637		66,441		27,627		4,499		3,768		3,628		28,649		427,249

Other secured by 1-4 family residential properties:
Pass - RR 1 through RR 6	$	35,139	$	19,596	$	15,399	$	9,605	$	10,273	$	4,786	$	8,486	$	103,284
Special Mention - RR 7		255		—		50		—		—		—		—		305
Substandard - RR 8		1,155		8		914		341		302		337		3,950		7,007
Doubtful - RR 9		29		—		—		—		—		—		—		29
Total		36,578		19,604		16,363		9,946		10,575		5,123		12,436		110,625

Secured by nonfarm, nonresidential properties:
Pass - RR 1 through RR 6	$	697,439	$	496,476	$	442,264	$	293,072	$	254,747	$	251,219	$	96,098	$	2,531,315
Special Mention - RR 7		13,452		6,139		2,956		4,466		4,957		20,545		—		52,515
Substandard - RR 8		19,119		20,572		4,516		12,956		38,956		25,438		2,779		124,336
Doubtful - RR 9		52		163		—		—		217		306		—		738
Total		730,062		523,350		449,736		310,494		298,877		297,508		98,877		2,708,904

Other real estate secured:
Pass - RR 1 through RR 6	$	146,803	$	376,765	$	347,472	$	48,626	$	89,824	$	23,680	$	12,116	$	1,045,286
Special Mention - RR 7		—		—		—		—		—		841		—		841
Substandard - RR 8		18,649		14		18		—		556		122		—		19,359
Doubtful - RR 9		—		—		—		—		—		—		—		—
Total		165,452		376,779		347,490		48,626		90,380		24,643		12,116		1,065,486

	Term Loans by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
As of December 31, 2020	Commercial LHFI
Other loans secured by real estate:
Other construction
Pass - RR 1 through RR 6	$	262,544	$	425,936	$	81,476	$	14,074	$	2,464	$	—	$	7,735	$	794,229
Special Mention - RR 7		—		—		—		—		—		—		—		—
Substandard - RR 8		754		—		—		—		—		—		—		754
Doubtful - RR 9		—		—		—		—		—		—		—		—
Total		263,298		425,936		81,476		14,074		2,464		—		7,735		794,983

Commercial and industrial loans:
Pass - RR 1 through RR 6	$	444,304	$	165,163	$	77,611	$	77,985	$	59,131	$	43,214	$	372,486	$	1,239,894
Special Mention - RR 7		677		45		—		—		—		—		240		962
Substandard - RR 8		12,090		1,814		9,737		3,735		2,160		5,024		33,380		67,940
Doubtful - RR 9		151		95		—		—		32		4		—		282
Total		457,222		167,117		87,348		81,720		61,323		48,242		406,106		1,309,078

State and other political subdivision loans:
Pass - RR 1 through RR 6	$	250,363	$	79,595	$	41,334	$	113,817	$	132,634	$	372,831	$	1,446	$	992,020
Special Mention - RR 7		—		—		—		—		—		4,018		—		4,018
Substandard - RR 8		—		—		—		247		—		4,491		—		4,738
Doubtful - RR 9		—		—		—		—		—		—		—		—
Total		250,363		79,595		41,334		114,064		132,634		381,340		1,446		1,000,776

Other commercial loans:
Pass - RR 1 through RR 6	$	101,230	$	70,990	$	20,769	$	9,723	$	33,481	$	30,715	$	225,533	$	492,441
Special Mention - RR 7		7,500		—		—		—		—		—		11,333		18,833
Substandard - RR 8		381		2,099		683		6		707		—		9,948		13,824
Doubtful - RR 9		2		—		—		—		—		23		—		25
Total		109,113		73,089		21,452		9,729		34,188		30,738		246,814		525,123

Total commercial LHFI	$	2,304,725	$	1,731,911	$	1,072,826	$	593,152	$	634,209	$	791,222	$	814,179	$	7,942,224

	Term Loans by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
As of December 31, 2020	Consumer LHFI
Loans secured by real estate:
Construction, land development and other land:
Current	$	47,336	$	24,174	$	8,496	$	2,036	$	1,447	$	2,868	$	—	$	86,357
Past due 30-89 days		—		318		20		—		1		12		—		351
Past due 90 days or more		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		99		—		99
Total		47,336		24,492		8,516		2,036		1,448		2,979		—		86,807

Other secured by 1-4 family residential properties:
Current	$	20,864	$	10,253	$	12,037	$	4,177	$	2,082	$	11,124	$	348,830	$	409,367
Past due 30-89 days		93		12		—		13		—		133		1,058		1,309
Past due 90 days or more		—		—		—		—		—		30		22		52
Nonaccrual		6		44		121		428		—		382		2,398		3,379
Total		20,963		10,309		12,158		4,618		2,082		11,669		352,308		414,107

Secured by nonfarm, nonresidential properties:
Current	$	109	$	—	$	—	$	4	$	—	$	9	$	—	$	122
Past due 30-89 days		—		—		—		—		—		—		—		—
Past due 90 days or more		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total		109		—		—		4		—		9		—		122

Other real estate secured:
Current	$	107	$	—	$	38	$	37	$	96	$	200	$	—	$	478
Past due 30-89 days		—		—		—		—		—		—		—		—
Past due 90 days or more		—		—		—		—		—		—		—		—
Nonaccrual		—		—		—		—		—		—		—		—
Total		107		—		38		37		96		200		—		478

	Term Loans by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Total
As of December 31, 2020	Consumer LHFI
Other loans secured by real estate:
Secured by 1-4 family residential properties
Current	$	289,521	$	214,056	$	173,324	$	92,564	$	109,031	$	321,250	$	—	$	1,199,746
Past due 30-89 days		499		93		753		366		1,080		799		—		3,590
Past due 90 days or more		159		214		208		127		—		549		—		1,257
Nonaccrual		283		711		2,024		682		239		7,868		—		11,807
Total		290,462		215,074		176,309		93,739		110,350		330,466		—		1,216,400

Consumer loans:
Current	$	65,370	$	25,303	$	13,140	$	3,893	$	1,257	$	345	$	53,669	$	162,977
Past due 30-89 days		524		158		67		19		7		3		305		1,083
Past due 90 days or more		77		—		4		—		—		—		159		240
Nonaccrual		12		4		55		13		2		—		—		86
Total		65,983		25,465		13,266		3,925		1,266		348		54,133		164,386

Total consumer LHFI	$	424,960	$	275,340	$	210,287	$	104,359	$	115,242	$	345,671	$	406,441	$	1,882,300

Total LHFI	$	2,729,685	$	2,007,251	$	1,283,113	$	697,511	$	749,451	$	1,136,893	$	1,220,620	$	9,824,524

LHFS past due 90 days or more totaled $81.5 million and $119.4 million at June 30, 2021 and December 31, 2020, respectively. LHFS past due 90 days or more are serviced loans eligible for repurchase, which are fully guaranteed by the Government National Mortgage Association (GNMA). GNMA optional repurchase programs allow financial institutions to buy back individual delinquent mortgage loans that meet certain criteria from the securitized loan pool for which the institution provides servicing. At the servicer’s option and without GNMA’s prior authorization, the servicer may repurchase such a delinquent loan for an amount equal to 100% of the remaining principal balance of the loan. This buy-back option is considered a conditional option until the delinquency criteria are met, at which time the option becomes unconditional. When Trustmark is deemed to have regained effective control over these loans under the unconditional buy-back option, the loans can no longer be reported as sold and must be brought back onto the balance sheet as loans held for sale, regardless of whether Trustmark intends to exercise the buy-back option. These loans are reported as held for sale with the offsetting liability being reported as short-term borrowings.

Trustmark did not exercise its buy-back option on any delinquent loans serviced for GNMA during the first six months of 2021 or 2020.

Trustmark’s ACL methodology for LHFI is based upon guidance within the FASB ASC Subtopic 326-20 as well as applicable regulatory guidance. The ACL is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Credit quality within the LHFI portfolio is continuously monitored by Management and is reflected within the ACL for loans. The ACL is an estimate of expected losses inherent within Trustmark’s existing LHFI portfolio. The ACL for LHFI is adjusted through the PCL and reduced by the charge off of loan amounts, net of recoveries.

The methodology for estimating the amount of expected credit losses reported in the ACL has two basic components: a collective, or pooled, component for estimated expected credit losses for pools of loans that share similar risk characteristics, and an asset-specific component involving individual loans that do not share risk characteristics with other loans and the measurement of expected credit losses for such individual loans. In estimating the allowance for credit losses for the collective component, loans are segregated into loan pools based on loan product types and similar risk characteristics.

The loans secured by real estate and other loans secured by real estate portfolio segments include loans for both commercial and residential properties. The underwriting process for these loans includes analysis of the financial position and strength of both the borrower and guarantor, experience with similar projects in the past, market demand and prospects for successful completion of the proposed project within the established budget and schedule, values of underlying collateral, availability of permanent financing, maximum loan-to-value ratios, minimum equity requirements, acceptable amortization periods and minimum debt service coverage requirements, based on property type. The borrower’s financial strength and capacity to repay their obligations remain the primary focus of underwriting. Financial strength is evaluated based upon analytical tools that consider historical and projected cash flows and performance in addition to analysis of the proposed project for income-producing properties. Additional support offered by guarantors is also considered. Ultimate repayment of these loans is sensitive to interest rate changes, general economic conditions, liquidity and availability of long-term financing.

The commercial and industrial LHFI portfolio segment includes loans within Trustmark’s geographic markets made to many types of businesses for various purposes, such as short term working capital loans that are usually secured by accounts receivable and inventory and term financing for equipment and fixed asset purchases that are secured by those assets. Trustmark’s credit underwriting process for commercial and industrial loans includes analysis of historical and projected cash flows and performance, evaluation of financial strength of both borrowers and guarantors as reflected in current and detailed financial information and evaluation of underlying collateral to support the credit.

The consumer LHFI portfolio segment is comprised of loans which are underwritten after evaluating a borrower’s repayment capacity, credit and collateral. Several factors are considered when assessing a borrower’s capacity to repay the obligation, including the borrower’s employment, income, current debt and assets. Credit is assessed using a credit report that provides credit scores and the borrower’s current and past information about their credit history. Property appraisals are obtained to assist in evaluating collateral. Loan-to-value and debt-to-income ratios, loan amount and lien position are also considered in assessing whether to originate a loan. These borrowers are particularly susceptible to downturns in economic trends such as conditions that negatively affect housing prices and demand and levels of unemployment.

The state and other political subdivision LHFI and the other commercial LHFI portfolio segments primarily consist of loans to non-depository financial institutions, such as mortgage companies, finance companies and other financial intermediaries, loans to state and political subdivisions, and loans to non-profit and charitable organizations. These loans are underwritten based on the specific nature or purpose of the loan and underlying collateral with special consideration given to the specific source of repayment for the loan.

The following table provides a description of each of Trustmark’s portfolio segments, loan classes, loan pools and the ACL methodology and loss drivers:

Portfolio Segment	Loan Class	Loan Pool	Methodology	Loss Drivers
Loans secured by real estate	Construction, land development and other land	1-4 family residential construction	DCF	Prime Rate, National GDP
		Lots and development	DCF	Prime Rate, Southern Unemployment
		Unimproved land	DCF	Prime Rate, Southern Unemployment
		All other consumer	DCF	Southern Unemployment
	Other secured by 1-4 family residential properties	Consumer 1-4 family - 1st liens	DCF	Prime Rate, Southern Unemployment
		All other consumer	DCF	Southern Unemployment
		Nonresidential owner-occupied	DCF	Southern Unemployment, National GDP
	Secured by nonfarm, nonresidential properties	Nonowner-occupied - hotel/motel	DCF	Southern Vacancy Rate, Southern Unemployment
		Nonowner-occupied - office	DCF	Southern Vacancy Rate, Southern Unemployment
		Nonowner-occupied- Retail	DCF	Southern Vacancy Rate, Southern Unemployment
		Nonowner-occupied - senior living/nursing homes	DCF	Southern Vacancy Rate, Southern Unemployment
		Nonowner-occupied - all other	DCF	Southern Vacancy Rate, Southern Unemployment
		Nonresidential owner-occupied	DCF	Southern Unemployment, National GDP
	Other real estate secured	Nonresidential nonowner -occupied - apartments	DCF	Southern Vacancy Rate, Southern Unemployment
		Nonresidential owner-occupied	DCF	Southern Unemployment, National GDP
		Nonowner-occupied - all other	DCF	Southern Vacancy Rate, Southern Unemployment
Other loans secured by real estate	Other construction	Other construction	WARM	Prime Rate, National Unemployment
	Secured by 1-4 family residential properties	Trustmark mortgage	WARM	Southern Unemployment
Commercial and industrial loans	Commercial and industrial loans	Commercial and industrial - non-working capital	DCF	Trustmark historical data
		Commercial and industrial - working capital	DCF	Trustmark historical data
		Credit cards	WARM	Trustmark call report data
Consumer loans	Consumer loans	Credit cards	WARM	Trustmark call report data
		Overdrafts	Loss Rate	Trustmark historical data
		All other consumer	DCF	Southern Unemployment
State and other political subdivision loans	State and other political subdivision loans	Obligations of state and political subdivisions	DCF	Moody's Bond Default Study
Other commercial loans	Other commercial loans	Other loans	DCF	Prime Rate, Southern Unemployment
		Commercial and industrial - non-working capital	DCF	Trustmark historical data
		Commercial and industrial - working capital	DCF	Trustmark historical data

In general, Trustmark utilizes a DCF method to estimate the quantitative portion of the allowance for credit losses for loan pools. The DCF model consists of two key components, a loss driver analysis (LDA) and a cash flow analysis. For loan pools utilizing the DCF methodology, multiple assumptions are in place, depending on the loan pool. A reasonable and supportable forecast is utilized for each loan pool by developing a LDA for each loan class. The LDA uses charge off data from Federal Financial Institutions Examination Council (FFIEC) reports to construct a periodic default rate (PDR). The PDR is decomposed into a PD. Regressions are run using the data for various macroeconomic variables in order to determine which ones correlate to Trustmark’s losses. These

variables are then incorporated into the application to calculate a quarterly PD using a third-party baseline forecast. In addition to the PD, a LGD is derived using a method referred to as Frye Jacobs. The Frye Jacobs method is a mathematical formula that traces the relationship between LGD and PD over time and projects the LGD based on the levels of PD forecasts. This model approach is applicable to all pools within the construction, land development and other land, other secured by 1-4 family residential properties, secured by nonfarm, nonresidential properties and other real estate secured loan classes as well as the all other consumer and other loans pools.

For the commercial and industrial loans related pools, Trustmark uses its own PD and LGD data, instead of the macroeconomic variables and the Frye Jacobs method described above, to calculate the PD and LGD as there were no defensible macroeconomic variables that correlated to Trustmark’s losses. Trustmark utilizes a third-party Bond Default Study to derive the PD and LGD for the obligations of state and political subdivisions pool. Due to the lack of losses within this pool, no defensible macroeconomic factors were identified to correlate.

The PD and LGD measures are used in conjunction with prepayment data as inputs into the DCF model to calculate the cash flows at the individual loan level. Contractual cash flows based on loan terms are adjusted for PD, LGD and prepayments to derive loss cash flows. These loss cash flows are discounted by the loan’s coupon rate to arrive at the discounted cash flow based quantitative loss. The prepayment studies are updated quarterly by a third-party for each applicable pool.

An alternate method of estimating the ACL is used for certain loan pools due to specific characteristics of these loans. For the non-DCF pools, specifically, those using the weighted average remaining maturity (WARM) method, the remaining life is incorporated into the ACL quantitative calculation.

Trustmark determined that reasonable and supportable forecasts could be made for a twelve-month period for all of its loan pools. To the extent the lives of the loans in the LHFI portfolio extend beyond this forecast period, Trustmark uses a reversion period of four quarters and reverts to the historical mean on a straight-line basis over the remaining life of the loans. The econometric models currently in production reflect segment or pool level sensitivities of PD to changes in macroeconomic variables. By measuring the relationship between defaults and changes in the economy, the quantitative reserve incorporates reasonable and supportable forecasts of future conditions that will affect the value of its assets, as required by FASB ASC Topic 326. Under stable forecasts, these linear regressions will reasonably predict a pool’s PD. However, due to the COVID-19 pandemic, the macroeconomic variables used for reasonable and supportable forecasting have changed rapidly. At the current levels, it is not clear that the models currently in production will produce reasonably representative results since the models were originally estimated using data beginning in 2004 through 2019. During this period, a traditional, albeit severe, economic recession occurred. Thus, econometric models are sensitive to similar future levels of PD.

In order to prevent the econometric models from extrapolating beyond reasonable boundaries of their input variables, Trustmark chose to establish an upper and lower limit process when applying the periodic forecasts. In this way, Management will not rely upon unobserved and untested relationships in the setting of the quantitative reserve. This approach applies to all input variables, including: Southern Unemployment, National Unemployment, National GDP, Southern Vacancy Rate and the Prime Rate. The upper and lower limits are based on the distribution of the macroeconomic variable by selecting extreme percentiles at the upper and lower limits of the distribution, the 1^st and 99^th percentiles, respectively. These upper and lower limits are then used to calculate the PD for the forecast time period in which the forecasted values are outside of the upper and lower limit range. For the second quarter of 2021, the forecast related to the macroeconomic variables used in the quantitative modeling process were positively impacted due to the updated forecast effects. However, due to multiple periods in the second quarter of 2021 having a PD or LGD at or near zero as a result of the improving macroeconomic forecasts, Management implemented PD and LGD floors to account for the risk associated with each portfolio. The PD and LGD floors are based on Trustmark’s historical loss experience and applied at a portfolio level.

While all these factors are incorporated into the overall methodology, only three are currently considered active: (i) economic conditions and concentrations of credit, (ii) performance trends and (iii) external factors.

Two of Trustmark’s largest loan classes are the loans secured by nonfarm, nonresidential properties and the loans secured by other real estate. Trustmark elected to create a qualitative factor specifically for these loan classes which addresses changes in the economic

conditions of metropolitan areas and applies additional pool level reserves. This qualitative factor is based on third-party market data and forecast trends and is updated quarterly as information is available, by market and by loan pool.

For the performance trends factor, Trustmark uses migration analyses to allocate additional ACL to non-pass/delinquent loans within each pool. In this way, Management believes the ACL will directly reflect changes in risk, based on the performance of the loans within a pool, whether declining or improving.

The external factors qualitative factor is Management’s best judgement on the loan or pool level impact of all factors that affect the portfolio that are not accounted for using any other part of the ACL methodology (e.g., natural disasters, changes in legislation, impacts due to technology and pandemics). During the third quarter of 2020, Trustmark activated the External Factor – Pandemic to ensure reserve adequacy for collectively evaluated loans most likely to be impacted by the unique economic and behavioral conditions created by the COVID-19 pandemic. Additional qualitative reserves are derived based on two principles. The first is the disconnect of economic factors to Trustmark’s modeled probability of default (derived from the econometric models underpinning the quantitative pooled reserves). During the pandemic, extraordinary measures by the federal government were made available to consumers and businesses, including COVID-19 loan payment concessions, direct transfer payments to households, tax deferrals, and reduced interest rates, among others. These government interventions may have extended the lag between economic conditions and default, relative to what was captured in the model development data. Because Trustmark’s econometric PD models rely on the observed relationship from the economic downturn from 2007 to 2009 in both timing and severity, Management does not expect the models to reflect these current conditions. For example, while the models would predict contemporaneous unemployment peaks and loan defaults, this may not occur when borrowers can request payment deferrals. Thus, for the affected population, economic conditions are not fully considered as a part of Trustmark’s quantitative reserve. The second principle is the change in risk that is identified by rating changes. As a part of Trustmark’s credit review process, loans in the affected population have been given more frequent screening to ensure accurate ratings are maintained through this dynamic period. Trustmark’s quantitative reserve does not directly address changes in ratings, thus a migration qualitative factor was designed to work in concert with the quantitative reserve. In a downturn, the qualitative factor is inactive for most pools because changes in ratings are congruent with changes in macroeconomic conditions, which directly influence the PD models in the quantitative reserve.

As discussed above, the disconnect of economic factors means that changes in rating caused by deteriorating and weak economic conditions as a result of the pandemic are not being captured in the quantitative reserve. During the fourth quarter of 2020, due to unforeseen pandemic conditions that varied from Management’s expectations during the third quarter of 2020, additional reserves were further dimensioned in order to appropriately reflect the risk within the portfolio related to the COVID-19 pandemic. In an effort to ensure the External Factor-Pandemic qualitative factor is reasonable and supportable, historical Trustmark loss data was leveraged to construct a framework that is quantitative in nature. To dimension the additional reserve, Management uses the sensitivity of the quantitative commercial loan reserve to changes in macroeconomic conditions to apply to loans rated acceptable or better (RR 1-4). In addition, to account for the known changes in risk, a weighted average of the commercial loan portfolio loss rate, derived from the performance trends qualitative factor, is used to dimension additional reserves for downgraded credits. Loans rated acceptable with risk (RR 5) or watch (RR 6) received the additional reserves based on the average of the macroeconomic conditions and weighted- average of the commercial loan portfolio loss rate while the loans rated special mention and substandard received additional reserves based on the weighted-average described above.

The following tables disaggregate the ACL and the amortized cost basis of the loans by the measurement methodology used at June 30, 2021 and December 31, 2020 ($ in thousands):

	June 30, 2021
	ACL						LHFI
	Individually Evaluated for Credit Loss		Collectively Evaluated for Credit Loss		Total ACL		Individually Evaluated for Credit Loss		Collectively Evaluated for Credit Loss		Total LHFI
Loans secured by real estate:
Construction, land development and other land	$	—	$	5,110	$	5,110	$	5,903		526,734	$	532,637
Other secured by 1-4 family residential properties		—		10,399		10,399		—		507,733		507,733
Secured by nonfarm, nonresidential properties		—		44,416		44,416		11,763		2,807,899		2,819,662
Other real estate secured		—		5,311		5,311		57		1,078,565		1,078,622
Other loans secured by real estate:
Other construction		—		6,530		6,530		—		827,665		827,665
Secured by 1-4 family residential properties		—		2,910		2,910		1,376		1,301,287		1,302,663
Commercial and industrial loans		577		13,396		13,973		4,474		1,322,131		1,326,605
Consumer loans		—		4,876		4,876		—		156,075		156,075
State and other political subdivision loans		1,584		1,649		3,233		3,854		1,132,910		1,136,764
Other commercial loans		2,088		5,186		7,274		5,451		458,992		464,443
Total	$	4,249	$	99,783	$	104,032	$	32,878	$	10,119,991	$	10,152,869

	December 31, 2020
	ACL						LHFI
	Individually Evaluated		Collectively Evaluated		Total		Individually Evaluated		Collectively Evaluated		Total
Loans secured by real estate:
Construction, land development and other land	$	—	$	6,854	$	6,854	$	5,756	$	508,300	$	514,056
Other secured by 1-4 family residential properties		—		9,928		9,928		454		524,278		524,732
Secured by nonfarm, nonresidential properties		—		48,523		48,523		12,037		2,696,989		2,709,026
Other real estate secured		—		7,382		7,382		60		1,065,904		1,065,964
Other loans secured by real estate:
Other construction		—		8,158		8,158		—		794,983		794,983
Secured by 1-4 family residential properties		—		5,143		5,143		1,441		1,214,959		1,216,400
Commercial and industrial loans		579		14,272		14,851		14,076		1,295,002		1,309,078
Consumer loans		—		5,838		5,838		—		164,386		164,386
State and other political subdivision loans		1,700		1,490		3,190		3,970		996,806		1,000,776
Other commercial loans		2,100		5,339		7,439		5,615		519,508		525,123
Total	$	4,379	$	112,927	$	117,306	$	43,409	$	9,781,115	$	9,824,524

The following tables detail changes in the ACL by loan class for the periods presented ($ in thousands):

	Three Months Ended June 30, 2021
	Balance at Beginning of Period		Charge-offs			Recoveries		PCL			Balance at End of Period
Loans secured by real estate:
Construction, land development and other land	$	5,058	$	—		$	313	$	(261	)	$	5,110
Other secured by 1-4 family residential properties		8,667		(58	)		181		1,609			10,399
Secured by nonfarm, nonresidential properties		46,438		(79	)		1,027		(2,970	)		44,416
Other real estate secured		5,770		—			5		(464	)		5,311
Other loans secured by real estate:
Other construction		5,124		—			43		1,363			6,530
Secured by 1-4 family residential properties		3,753		(4	)		8		(847	)		2,910
Commercial and industrial loans		20,166		(3,674	)		652		(3,171	)		13,973
Consumer loans		4,750		(391	)		387		130			4,876
State and other political subdivision loans		3,015		—			—		218			3,233
Other commercial loans		6,450		(622	)		1,044		402			7,274
Total	$	109,191	$	(4,828	)	$	3,660	$	(3,991	)	$	104,032

The decreases in the PCL for the three months ended June 30, 2021 were primarily due to improvements in the macroeconomic forecasting variables used in the ACL modeling, such as National and Southern Unemployment, National GDP, Prime Rate and South Vacancy Rate and the implementation of the PD and LGD floors.

The PCL for the other construction portfolio and other secured by 1-4 family residential properties increased $1.4 million and $1.6 million, respectively, during the three months ended June 30, 2021 primarily due to the implementation of the PD and LGD floors using Trustmark’s historical experience.

	Three Months Ended June 30, 2020
	Balance at Beginning of Period		Charge-offs			Recoveries		PCL			Balance at End of Period
Loans secured by real estate:
Construction, land development and other land	$	9,079	$	(7	)	$	92	$	2,776		$	11,940
Other secured by 1-4 family residential properties		11,711		(36	)		83		958			12,716
Secured by nonfarm, nonresidential properties		28,127		—			445		7,845			36,417
Other real estate secured		5,273		—			12		2,315			7,600
Other loans secured by real estate:
Other construction		7,711		—			21		3,071			10,803
Secured by 1-4 family residential properties		8,042		—			13		2,844			10,899
Commercial and industrial loans		14,564		(297	)		191		(1,908	)		12,550
Consumer loans		6,596		(671	)		468		4			6,397
State and other political subdivision loans		3,441		—			—		(27	)		3,414
Other commercial loans		6,020		(859	)		984		307			6,452
Total	$	100,564	$	(1,870	)	$	2,309	$	18,185		$	119,188

The increases in the PCL for loans and other loans secured by real estate during the three months ended June 30, 2020 were primarily due to the negative impact of COVID-19 on the macroeconomic forecasting variables used in the ACL modeling, such as National and Southern Unemployment, National GDP, Prime Rate and Southern Vacancy Rate.

The PCL for the commercial and industrial loan portfolio decreased an $1.9 million during the three months ended June 30, 2020 primarily due to upgrades of loans from substandard to pass, paydowns and a slight decrease in the calculated PD and LGD, which uses Trustmark’s historical data.

	Six Months Ended June 30, 2021
	Balance at Beginning of Period		Charge-offs			Recoveries		PCL			Balance at End of Period
Loans secured by real estate:
Construction, land development and other land	$	6,854	$	—		$	1,079	$	(2,823	)	$	5,110
Other secured by 1-4 family residential properties		9,928		(84	)		252		303			10,399
Secured by nonfarm, nonresidential properties		48,523		(79	)		1,057		(5,085	)		44,416
Other real estate secured		7,382		—			11		(2,082	)		5,311
Other loans secured by real estate:
Other construction		8,158		—			44		(1,672	)		6,530
Secured by 1-4 family residential properties		5,143		(4	)		108		(2,337	)		2,910
Commercial and industrial loans		14,851		(3,697	)		1,939		880			13,973
Consumer loans		5,838		(833	)		749		(878	)		4,876
State and other political subdivision loans		3,190		—			—		43			3,233
Other commercial loans		7,439		(1,376	)		2,052		(841	)		7,274
Total	$	117,306	$	(6,073	)	$	7,291	$	(14,492	)	$	104,032

Decreases in the PCL for the first six months of 2021 were primarily due to improvements in the macroeconomic forecasting variables used in the ACL modeling, such as National and Southern Unemployment, National GDP, Prime Rate and Southern Vacancy Rate.

	Six Months Ended June 30, 2020
	Balance at Beginning of Period		FASB ASU 2016-13 Adoption Adjustment			Charge-offs			Recoveries		PCL			Balance at End of Period
Loans secured by real estate:
Construction, land development and other land	$	6,371	$	(188	)	$	(7	)	$	186	$	5,578		$	11,940
Other secured by 1-4 family residential properties		5,888		4,188			(100	)		146		2,594			12,716
Secured by nonfarm, nonresidential properties		26,158		(8,179	)		(2,448	)		506		20,380			36,417
Other real estate secured		4,024		(765	)		(8	)		18		4,331			7,600
Other loans secured by real estate:
Other construction		1,889		3,202			—			40		5,672			10,803
Secured by 1-4 family residential properties		3,044		2,891			(19	)		106		4,877			10,899
Commercial and industrial loans		25,992		(8,964	)		(1,279	)		733		(3,932	)		12,550
Consumer loans		3,379		2,059			(1,361	)		941		1,379			6,397
State and other political subdivision loans		2,229		2,455			—			—		(1,270	)		3,414
Other commercial loans		5,303		2,084			(2,193	)		2,101		(843	)		6,452
Total	$	84,277	$	(1,217	)	$	(7,415	)	$	4,777	$	38,766		$	119,188

The increase in the PCL for loans and other loans secured by real estate and consumer loans during the six months ended June 30, 2020 were primarily due to the negative impact of COVID-19 on the macroeconomic forecasting variables used in the ACL modeling, such as National and Southern Unemployment, National GDP, Prime Rate and Southern Vacancy Rate.

The PCL for the commercial and industrial loan portfolio decreased $3.9 million during the six months ended June 30, 2020 primarily due to loans that had been specifically reserved for being charged down, upgrades on loans from substandard to pass, paydowns as well as a slight decrease in the calculated PD and LGD, which uses Trustmark’s historical data. The decrease in the PCL for state and other political subdivision loans of $1.3 million was primarily due to a decrease in reserves based on routine updates to the qualitative portion of the allowance calculation. The PCL for other commercial loans decreased $843 thousand during the same time period due to a pay-off which decreased needed reserves.