Loans and Allowance for Credit Losses

6 Months Ended

Jun. 30, 2020

Loans and Leases Receivable Disclosure [Abstract]

Loans

LOANS AND ALLOWANCE FOR CREDIT LOSSES FOR LOANS

Loans are generally stated at the amount of unpaid principal, reduced by unearned discount and the ACLL. Interest on loans is accrued daily on the outstanding balances.  Loan origination fees and certain direct loan origination costs are deferred and amortized as adjustments of the related loan yield over its contractual life.

Generally, loans are placed on nonaccrual status when principal or interest is greater than 90 days past due based upon the loan's contractual terms. Interest on nonaccrual loans is recognized primarily using the cost-recovery method.  Loans may be returned to accrual status when repayment is reasonably assured and there has been demonstrated performance under the terms of the loan or, if applicable, the terms of the restructured loans.

Commercial-related loans or portions thereof are charged off to the ACLL when the loss has been confirmed.  This determination is made on a case by case basis considering many factors, including the prioritization of our claim in bankruptcy, expectations of the workout/restructuring of the loan and valuation of the borrower’s equity.  We deem a loss confirmed when a loan or a portion of a loan is classified “loss” in accordance with bank regulatory classification guidelines, which state, “Assets classified loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted”.

Consumer-related loans are generally charged to the ACLL upon reaching specified stages of delinquency, in accordance with the Federal Financial Institutions Examination Council policy.  For example, credit card loans are charged off by the end of the month in which the account becomes 180 days past due or within 60 days from receiving notification about a specified event (e.g., bankruptcy of the borrower), whichever is earlier.  Residential mortgage loans are generally charged off to net realizable value no later than when the account becomes 180 days past due.  Other consumer loans, if collateralized, are generally charged down to net realizable value at 120 days past due.

The following table presents the amortized cost of loans held for investment:

Dollars in thousands	June 30, 2020		December 31, 2019
Commercial	$	323,788	$	220,452
Commercial real estate - owner occupied
Professional & medical	100,370		81,973
Retail	119,794		100,993
Other	115,979		93,253
Commercial real estate - non-owner occupied
Hotels & motels	119,204		128,665
Mini-storage	55,828		50,913
Multifamily	144,583		164,398
Retail	109,078		102,989
Other	164,474		182,242
Construction and development
Land & land development	92,706		84,112
Construction	48,116		37,523
Residential 1-4 family real estate
Personal residence	267,170		260,843
Rental - small loan	104,055		101,080
Rental - large loan	76,360		63,986
Home equity	88,929		76,568
Mortgage warehouse lines	252,472		126,237
Consumer	34,640		35,021
Other
Credit cards	1,573		1,453
Overdrafts	588		798
Total loans, net of unearned fees	2,219,707		1,913,499
Less allowance for credit losses - loans	27,166		13,074
Loans, net	$	2,192,541	$	1,900,425

Allowance for Credit Losses - Loans

The ACLL is a valuation allowance, estimated at each balance sheet date in accordance with ASC 326, that is deducted from the amortized cost basis of loans to present the net amount expected to be collected. The amount of the ACLL represents our best estimate of current expected credit losses on loans considering available information, from internal and external sources, relevant to assessing collectability over the loans’ contractual terms, adjusted for expected prepayments when appropriate (the “life-of-loan” concept). The contractual term excludes expected extensions, renewals and modifications unless (i) management has a reasonable expectation that a troubled debt restructuring will be executed with an individual borrower or (ii) such extension or renewal options are not unconditionally cancellable by us and, in such cases, the borrower is likely to meet applicable conditions and likely to request extension or renewal. Relevant available information includes historical credit loss experience, current conditions and reasonable and supportable forecasts. While historical credit loss experience provides the basis for the estimation of expected credit losses, adjustments to historical loss information may be made for differences in current portfolio-specific risk characteristics, environmental conditions or other relevant factors. The ACLL losses is measured on a collective basis for portfolios of loans when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Expected credit losses for collateral dependent loans, including loans where the borrower is experiencing financial difficulty, but foreclosure is not probable, are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate.

Expected credit losses are reflected in the ACLL through a charge to provision for credit losses. When we deem all or a portion of a financial asset to be uncollectible the appropriate amount is written off and the ACLL is reduced by the same amount. The Company applies judgment to determine when a financial asset is deemed uncollectible; however, generally speaking, an asset will be considered uncollectible no later than when all efforts at collection have been exhausted. Subsequent recoveries, if any, are credited to the ACLL when received.

Loan Pools. In calculating the ACLL, most loans are segmented into pools based upon similar characteristics and risk profiles. Common characteristics and risk profiles include the type/purpose of loan, underlying collateral, geographical similarity and historical/expected credit loss patterns. In developing these loan pools for the purposes of modeling expected credit losses, we also analyzed the degree of correlation in how loans within each portfolio respond when subjected to varying economic conditions

and scenarios as well as other portfolio stress factors. We have identified the following pools of financial assets with similar risk characteristics for measuring expected credit losses:

▪ Commercial

• Commercial real estate - owner occupied

▪ Professional & medical

▪ Retail

▪ Other

• Commercial real estate - non-owner occupied

▪ Hotels & motels

▪ Mini-storage

▪ Multifamily

▪ Retail

▪ Other

• Construction & development

▪ Land & land development

▪ Construction

• Residential 1-4 family real estate

▪ Personal residence

▪ Rental - small loan

▪ Rental - large loan

▪ Home equity

• Mortgage warehouse lines

• Consumer

• Other

▪ Credit cards

▪ Overdrafts

Residential 1-4 family rentals are classified as small loan if the original loan amount is less than $600,000 and classified as large loan if the original loan amount equals or exceeds $600,000.

We periodically reassess each pool to ensure the loans within the pool continue to share similar characteristics and risk profiles and to determine whether further segmentation is necessary.

The Company’s methodology for estimating the ACLL considers available relevant information about the collectability of cash flows, including information about past events, current conditions, and reasonable and supportable forecasts. The methodology applies historical loss information, adjusted for asset-specific characteristics, economic conditions at the measurement date, and forecasts about future economic conditions expected to exist through the contractual lives of the financial assets that are reasonable and supportable, to the identified pools of financial assets with similar risk characteristics for which the historical loss experience was observed. Our methodology reverts to historical loss information immediately when it can no longer develop reasonable and supportable forecasts.

Loss-Rate Method. We use a loss-rate (“cohort”) method to estimate expected credit losses for all loan pools. The cohort method identifies and captures the balances of pooled loans with similar risk characteristics, as of a point in time to form a cohort, then tracks the respective losses generated by that cohort of loans over their remaining lives, or until the loans are “exhausted” (reached an acceptable stage at which a significant majority of all losses are expected to have been recognized). This method encompasses loan balances for as long as the loans are outstanding, so while significant history is required to represent the life-of-loan concept, this method does not require as much history due to its inclusion of loan balances in multiple cohort periods.

Qualitative Factors. We qualitatively adjust our loan loss rates for risk factors that are not otherwise considered within our model but are nonetheless relevant in assessing the expected credit losses within our loan pools. These qualitative factor (“Q-Factor”) adjustments may increase or decrease our estimate of expected credit losses by a calculated percentage or amount based upon the estimated level of risk.

One Q-Factor adjustment to our loss rates is consideration of reasonable and supportable forecasts of economic conditions. In arriving at a reasonable and supportable economic forecast, we primarily consider the forecasted unemployment rates for the U.S., West Virginia and Virginia as loss drivers for each segmented loan pool. Secondarily, we consider the following forecasted economic data for one or more of our segmented loan pools depending on the nature of the underlying loan pool: housing price indices (U.S., West Virginia & Virginia), single-family housing starts (West Virginia & Virginia), multi-family housing starts (West Virginia &

Virginia), personal income growth (U.S., West Virginia & Virginia), U.S. consumer confidence, rental vacancy rates (U.S.), and U.S. % change in gross domestic product.

Other risks that we may consider in making Q-Factor adjustments include, among other things, the impact of (i) changes in lending policies and procedures, including changes in underwriting standards and practices for collections, write-offs, and recoveries, (ii) changes in the nature and volume of the loan pools and in the terms of the underlying loans, (iii) changes in the experience, ability, and depth of our lending management and staff, (iv) changes in volume and severity of past due financial assets, the volume of non-accrual assets, and the volume and severity of adversely classified or graded assets, (v) changes in the quality of our credit review function, (vi) changes in the value of the underlying collateral for loans that are non-collateral dependent, (vii) the existence, growth, and effect of any concentrations of credit and (viii) other external factors such as the regulatory, legal and technological environments; competition; and events such as natural disasters or health pandemics.

Collateral Dependent Loans. We may determine that an individual loan exhibits unique risk characteristics which differentiate it from other loans within our loan pools. In such cases, the loans are evaluated for expected credit losses on an individual basis and excluded from the collective evaluation. Specific allocations of the allowance for credit losses are determined by analyzing the borrower’s ability to repay amounts owed, collateral deficiencies, the relative risk grade of the loan and economic conditions affecting the borrower’s industry, among other things. A loan is considered to be collateral dependent when, based upon management's assessment, the borrower is experiencing financial difficulty and repayment is expected to be provided substantially through the operation or sale of the collateral. In such cases, expected credit losses are based on the fair value of the collateral at the measurement date, adjusted for estimated selling costs if satisfaction of the loan depends on the sale of the collateral. We reevaluate the fair value of collateral supporting collateral dependent loans on a quarterly basis. The fair value of real estate collateral supporting collateral dependent loans is evaluated by appraisal services using a methodology that is consistent with the Uniform Standards of Professional Appraisal Practice.

Troubled Debt Restructuring. A loan that has been modified or renewed is considered a troubled debt restructuring (“TDR”) when two conditions are met: 1) the borrower is experiencing financial difficulty and 2) concessions are made for the borrower's benefit that would not otherwise be considered for a borrower or transaction with similar credit risk characteristics. The Company’s ACLL reflects all effects of a TDR when an individual asset is specifically identified as a reasonably expected TDR. The Company has determined that a TDR is reasonably expected no later than the point when the lender concludes that modification is the best course of action and it is at least reasonably possible that the troubled borrower will accept some form of concession from the lender to avoid a default. TDRs that are considered material ($500,000 and greater) are evaluated individually to determine the required ACLL. TDRs that are not considered material may be included in the Company’s existing pools based on the underlying risk characteristics of the loan to measure the ACLL.

The following table presents the activity in the ACLL by portfolio segment during the first six months of 2020:

	For the Six Months Ended June 30, 2020
	Allowance for Credit Losses - Loans
Dollars in thousands	Beginning Balance Prior to Adoption of ASC 326		Impact of Adoption of ASC 326			Provision for Credit Losses - Loans			Adjustment for PCD Acquired Loans		Charge- offs			Recoveries		Ending Balance
Commercial	$	1,221	$	1,064		$	1,053		$	—	$	(99	)	$	16	$	3,255
Commercial real estate - owner occupied
Professional & medical	1,058		(390		)	784			—		—			—		1,452
Retail	820		(272		)	540			153		—			116		1,357
Other	821		(137		)	402			—		—			—		1,086
Commercial real estate - non-owner occupied
Hotels & motels	1,235		(936		)	1,654			—		—			—		1,953
Mini-storage	485		(311		)	57			—		—			—		231
Multifamily	1,534		8			(838		)	—		—			4		708
Retail	964		279			471			—		(343		)	2		1,373
Other	1,721		(1,394		)	(12		)	—		—			—		315
Construction and development
Land & land development	600		2,136			1,213			111		(4		)	6		4,062
Construction	242		996			606			—		—			—		1,844
Residential 1-4 family real estate
Personal residence	1,275		1,282			356			146		(7		)	37		3,089
Rental - small loan	532		1,453			81			—		(27		)	117		2,156
Rental - large loan	49		2,884			(98		)	—		—			—		2,835
Home equity	138		308			635			—		(24		)	9		1,066
Mortgage warehouse lines	—		—			—			—		—			—		—
Consumer	379		(238		)	202			—		(176		)	68		235
Other
Credit cards	—		12			26			—		(30		)	6		14
Overdrafts	—		182			74			—		(206		)	85		135
Total	$	13,074	$	6,926		$	7,206		$	410	$	(916	)	$	466	$	27,166

The following table presents, as of June 30, 2020 segregated by loan portfolio segment, details of the loan portfolio and the ACLL calculated in accordance with our credit loss accounting methodology for loans described above.

	June 30, 2020
	Loan Balances						Allowance for Credit Losses - Loans
Dollars in thousands	Loans Individually Evaluated		Loans Collectively Evaluated		Total		Loans Individually Evaluated		Loans Collectively Evaluated		Total
Commercial	$	4,885	$	318,903	$	323,788	$	23	$	3,232	$	3,255
Commercial real estate - owner occupied
Professional & medical	3,819		96,551		100,370		1,117		335		1,452
Retail	6,557		113,237		119,794		—		1,357		1,357
Other	—		115,979		115,979		—		1,086		1,086
Commercial real estate - non-owner occupied
Hotels & motels	—		119,204		119,204		—		1,953		1,953
Mini-storage	—		55,828		55,828		—		231		231
Multifamily	—		144,583		144,583		—		708		708
Retail	2,516		106,562		109,078		57		1,316		1,373
Other	5,282		159,192		164,474		—		315		315
Construction and development
Land & land development	1,641		91,065		92,706		584		3,478		4,062
Construction	—		48,116		48,116		—		1,844		1,844
Residential 1-4 family real estate
Personal residence	611		266,559		267,170		—		3,089		3,089
Rental - small loan	781		103,274		104,055		50		2,106		2,156
Rental - large loan	4,448		71,912		76,360		—		2,835		2,835
Home equity	523		88,406		88,929		—		1,066		1,066
Consumer	—		34,640		34,640		—		235		235
Other
Credit cards	—		1,573		1,573		—		14		14
Overdrafts	—		588		588		—		135		135
Mortgage warehouse lines	—		252,472		252,472		—		—		—
Total	$	31,063	$	2,188,644	$	2,219,707	$	1,831	$	25,335	$	27,166

The following table presents the amortized cost basis of collateral dependent loans, which are individually evaluated to determine expected credit losses, and the related ACLL allocated to those loans:

	June 30, 2020
Dollars in thousands	Real Estate Secured Loans		Non-Real Estate Secured Loans		Total Loans		Allowance for Credit Losses - Loans
Commercial	$	—	$	4,885	$	4,885	$	23
Commercial real estate - owner occupied
Professional & medical	1,599		—		1,599		881
Retail	2,268		—		2,268		—
Other	—		—		—		—
Commercial real estate - non-owner occupied
Hotels & motels	—		—		—		—
Mini-storage	—		—		—		—
Multifamily	—		—		—		—
Retail	651		—		651		50
Other	2,922		—		2,922		—
Construction and development
Land & land development	1,006		—		1,006		584
Construction	—		—		—		—
Residential 1-4 family real estate
Personal residence	611		—		611		—
Rental - small loan	781		—		781		50
Rental - large loan	4,448		—		4,448		—
Home equity	—		—		—		—
Consumer	—		—		—		—
Other
Credit cards	—		—		—		—
Overdrafts	—		—		—		—
Total	$	14,286	$	4,885	$	19,171	$	1,588

The following table presents the activity in the ACLL by portfolio segment for the year ended December 31, 2019, as determined in accordance with ASC 310 prior to the January 1, 2020 adoption of ASC 326:

	For the Year Ended December 31, 2019
	Allowance for Credit Losses - Loans
Dollars in thousands	Beginning  Balance		Charge- offs			Recoveries		Provision			Ending Balance
Commercial	$	1,705	$	(281	)	$	17	$	(295	)	$	1,146
Commercial real estate
Owner occupied	2,214		(2		)	21		467			2,700
Non-owner occupied	5,742		(170		)	1		366			5,939
Construction and development
Land & land development	339		(2		)	108		155			600
Construction	64		—			—		178			242
Residential real estate
Non-jumbo	2,090		(979		)	125		576			1,812
Jumbo	379		—			—		(368		)	11
Home equity	167		(24		)	19		(24		)	138
Mortgage warehouse lines	—		—			—		—			—
Consumer	79		(285		)	168		173			135
Other	268		(360		)	121		322			351
Total	$	13,047	$	(2,103	)	$	580	$	1,550		$	13,074

The following table presents the contractual aging of the amortized cost basis of past due loans by class as of June 30, 2020 and December 31, 2019.

	At June 30, 2020
	Past Due										90 days or more and Accruing
Dollars in thousands	30-59 days		60-89 days		90 days or more		Total		Current
Commercial	$	141	$	138	$	418	$	697	$	323,091	$	—
Commercial real estate - owner occupied
Professional & medical	—		318		1,737		2,055		98,315		—
Retail	56		111		2,444		2,611		117,183		—
Other	265		194		149		608		115,371		—
Commercial real estate - non-owner occupied
Hotels & motels	—		—		—		—		119,204		—
Mini-storage	—		—		—		—		55,828		—
Multifamily	165		—		213		378		144,205		—
Retail	—		—		827		827		108,251		—
Other	—		234		52		286		164,188		—
Construction and development
Land & land development	—		8		14		22		92,684		—
Construction	—		—		—		—		48,116		—
Residential 1-4 family real estate
Personal residence	1,536		246		1,225		3,007		264,163		—
Rental - small loan	309		259		1,274		1,842		102,213		—
Rental - large loan	—		—		1,120		1,120		75,240		—
Home equity	342		250		134		726		88,203		—
Mortgage warehouse lines	—		—		—		—		252,472		—
Consumer	126		38		24		188		34,452		—
Other
Credit cards	2		—		2		4		1,569		2
Overdrafts	—		—		—		—		588		—
Total	$	2,942	$	1,796	$	9,633	$	14,371	$	2,205,336	$	2

	At December 31, 2019
	Past Due										90 days or more and Accruing
Dollars in thousands	30-59 days		60-89 days		90 days or more		Total		Current
Commercial	$	216	$	—	$	483	$	699	$	219,753	$	—
Commercial real estate - owner occupied
Professional & medical	—		137		1,602		1,739		80,234		—
Retail	118		—		2,434		2,552		98,441		—
Other	—		—		—		—		93,253		—
Commercial real estate - non-owner occupied
Hotels & motels	—		—		—		—		128,665		—
Mini-storage	—		—		—		—		50,913		—
Multifamily	809		—		7		816		163,582		—
Retail	71		179		968		1,218		101,771		—
Other	—		—		387		387		181,855		—
Construction and development
Land & land development	208		28		188		424		83,688		—
Construction	—		—		138		138		37,385		—
Residential 1-4 family real estate
Personal residence	3,361		806		937		5,104		255,739		—
Rental - small loan	810		21		940		1,771		99,309		—
Rental - large loan	—		—		—		—		63,986		—
Home equity	760		—		223		983		75,585		—
Mortgage warehouse lines	—		—		—		—		126,237		—
Consumer	190		79		70		339		34,682		—
Other
Credit cards	19		6		42		67		1,386		42
Overdrafts	—		—		—		—		798		—
Total	$	6,562	$	1,256	$	8,419	$	16,237	$	1,897,262	$	42

Nonaccrual loans:  The following table presents the nonaccrual loans included in the net balance of loans at June 30, 2020 and December 31, 2019.

	June 30,				December 31,
	2020				2019
Dollars in thousands	Nonaccrual		Nonaccrual with No Allowance for Credit Losses - Loans		Nonaccrual		Nonaccrual with No Allowance for Credit Losses - Loans
Commercial	$	789	$	—	$	864	$	76
Commercial real estate - owner occupied
Professional & medical	1,737		—		1,602		—
Retail	2,556		2,269		2,552		2,262
Other	384		—		43		—
Commercial real estate - non-owner occupied
Hotels & motels	—		—		—		—
Mini-storage	54		—		57		—
Multifamily	213		—		38		31
Retail	827		167		1,120		527
Other	52		—		388		40
Construction and development
Land & land development	14		—		188		—
Construction	—		—		138		—
Residential 1-4 family real estate
Personal residence	2,413		—		2,485		423
Rental - small loan	2,154		81		1,635		150
Rental - large loan	1,120		1,120		—		—
Home equity	186		—		284		—
Mortgage warehouse lines	—		—		—		—
Consumer	27		—		74		—
Other
Credit cards	—		—		—		—
Overdrafts	—		—		—		—
Total	$	12,526	$	3,637	$	11,468	$	3,509

Credit Quality Indicators: We categorize 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. We analyze loans individually by classifying the loans as to credit risk.  We internally grade all commercial loans at the time of loan origination. In addition, we perform an annual loan review on all non-homogenous commercial loan relationships with an aggregate exposure of $5.0 million, at which time these loans are re-graded. We use the following definitions for our risk grades:

Pass: Loans graded as Pass are loans to borrowers of acceptable credit quality and risk. They are higher quality loans that do not fit any of the other categories described below.

OLEM (Special Mention):  Commercial loans categorized as OLEM are potentially weak. The credit risk may be relatively minor yet represent a risk given certain specific circumstances. If the potential weaknesses are not monitored or mitigated, the asset may weaken or inadequately protect our position in the future.

Substandard:   Commercial loans categorized as Substandard are inadequately protected by the borrower’s ability to repay, equity and/or the collateral pledged to secure the loan. These loans have identified weaknesses that could hinder normal repayment or collection of the debt. These loans are characterized by the distinct possibility that we will sustain some loss if the identified weaknesses are not mitigated.

Doubtful:  Commercial loans categorized as Doubtful have all the weaknesses inherent in those loans classified as Substandard, with the added elements that the full collection of the loan is improbable and the possibility of loss is high.

Loss:  Loans classified as loss are considered to be non-collectible and of such little value that their continuance as a bankable asset is not warranted. This does not mean that the loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future.

Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal of loan constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for purposes of the table below. As of June 30, 2020, based on the most recent analysis performed, the risk category of loans based on year of origination is as follows:

	June 30, 2020
Dollars in thousands	Risk Rating	2020		2019		2018		2017		2016		Prior		Revolvi- ng		Revolving- Term		Total
Commercial	Pass	$	122,162	$	42,472	$	25,792	$	23,244	$	14,459	$	13,816	$	72,786	$	—	$	314,731
	Special Mention	51		43		1,963		85		111		924		415		—		3,592
	Substandard	1,018		204		228		9		77		105		3,824		—		5,465
Total Commercial		123,231		42,719		27,983		23,338		14,647		14,845		77,025		—		323,788
Commercial Real Estate    - Owner Occupied
Professional & medical	Pass	5,887		14,501		2,617		27,485		3,869		35,706		3,005		—		93,070
	Special Mention	—		319		—		—		—		5,244		—		—		5,563
	Substandard	—		—		—		—		138		1,599		—		—		1,737
Total Professional & Medical		5,887		14,820		2,617		27,485		4,007		42,549		3,005		—		100,370
Retail	Pass	19,077		40,260		5,274		11,386		6,172		30,886		2,713		—		115,768
	Special Mention	—		—		—		589		7		874		—		—		1,470
	Substandard	—		—		—		—		—		2,556		—		—		2,556
Total Retail		19,077		40,260		5,274		11,975		6,179		34,316		2,713		—		119,794
Other	Pass	13,854		15,167		17,207		9,665		13,522		35,497		9,457		—		114,369
	Special Mention	—		—		—		—		—		793		—		—		793
	Substandard	—		—		—		360		—		415		42		—		817
Total Other		13,854		15,167		17,207		10,025		13,522		36,705		9,499		—		115,979
Total Commercial Real Estate -    Owner Occupied		38,818		70,247		25,098		49,485		23,708		113,570		15,217		—		336,143
Commercial Real Estate    - Non-Owner Occupied
Hotels & motels	Pass	3,457		61,307		18,043		9,921		10,483		14,836		1,157		—		119,204
	Special Mention	—		—		—		—		—		—		—		—		—
	Substandard	—		—		—		—		—		—		—		—		—
Total Hotels & Motels		3,457		61,307		18,043		9,921		10,483		14,836		1,157		—		119,204
Mini-storage	Pass	3,983		19,825		15,114		4,066		7,325		5,283		178		—		55,774
	Special Mention	—		—		—		—		—		54		—		—		54
	Substandard	—		—		—		—		—		—		—		—		—
Total Mini-storage		3,983		19,825		15,114		4,066		7,325		5,337		178		—		55,828
Multifamily	Pass	6,409		27,156		27,150		19,154		11,384		50,324		2,692		—		144,269
	Special Mention	—		—		—		—		—		101		—		—		101
	Substandard	—		—		—		—		—		213		—		—		213
Total Multifamily		6,409		27,156		27,150		19,154		11,384		50,638		2,692		—		144,583

	June 30, 2020
Dollars in thousands	Risk Rating	2020	2019	2018	2017	2016	Prior	Revolvi- ng	Revolving- Term	Total
Retail	Pass	8,037	24,175	12,349	8,486	5,838	42,831	5,965	—	107,681
	Special Mention	—	—	—	176	—	570	—	—	746
	Substandard	—	—	—	—	—	651	—	—	651
Total Retail		8,037	24,175	12,349	8,662	5,838	44,052	5,965	—	109,078
Other	Pass	16,462	21,089	52,054	11,150	27,806	30,271	2,280	—	161,112
	Special Mention	—	—	—	—	—	388	—	—	388
	Substandard	—	—	—	—	—	2,974	—	—	2,974
Total Other		16,462	21,089	52,054	11,150	27,806	33,633	2,280	—	164,474
Total Commercial Real Estate -    Non-Owner Occupied		38,348	153,552	124,710	52,953	62,836	148,496	12,272	—	593,167
Construction and Development
Land & land development	Pass	4,997	30,603	9,448	4,896	6,844	24,147	9,750	—	90,685
	Special Mention	—	—	21	—	—	697	—	—	718
	Substandard	—	—	—	—	15	1,288	—	—	1,303
Total Land & land development		4,997	30,603	9,469	4,896	6,859	26,132	9,750	—	92,706
Construction	Pass	14,807	21,312	4,941	6,162	—	—	894	—	48,116
	Special Mention	—	—	—	—	—	—	—	—	—
	Substandard	—	—	—	—	—	—	—	—	—
Total Construction		14,807	21,312	4,941	6,162	—	—	894	—	48,116
Total Construction and    Development		19,804	51,915	14,410	11,058	6,859	26,132	10,644	—	140,822
Residential 1-4 Family Real Estate
Personal residence	Pass	18,052	29,477	26,425	20,200	24,107	124,972	—	—	243,233
	Special Mention	109	188	63	355	76	12,784	—	—	13,575
	Substandard	—	157	529	379	370	8,927	—	—	10,362
Total Personal Residence		18,161	29,822	27,017	20,934	24,553	146,683	—	—	267,170
Rental - small loan	Pass	8,540	18,345	13,621	11,812	11,493	29,373	4,312	—	97,496
	Special Mention	202	486	251	3	200	1,999	435	—	3,576
	Substandard	—	—	—	—	71	2,903	9	—	2,983
Total Rental - Small Loan		8,742	18,831	13,872	11,815	11,764	34,275	4,756	—	104,055
Rental - large loan	Pass	12,811	6,130	10,941	5,589	8,403	23,459	3,116	—	70,449
	Special Mention	—	1,430	—	—	—	33	—	—	1,463
	Substandard	—	—	—	—	1,120	3,328	—	—	4,448
Total Rental - Large Loan		12,811	7,560	10,941	5,589	9,523	26,820	3,116	—	76,360
Home equity	Pass	85	—	91	60	132	1,824	84,570	—	86,762
	Special Mention	—	—	—	40	—	152	1,335	—	1,527
	Substandard	—	—	—	—	—	336	304	—	640
Total Home Equity		85	—	91	100	132	2,312	86,209	—	88,929

	June 30, 2020
Dollars in thousands	Risk Rating	2020		2019		2018		2017		2016		Prior		Revolvi- ng		Revolving- Term		Total
Total Residential 1-4 Family Real    Estate		39,799		56,213		51,921		38,438		45,972		210,090		94,081		—		536,514
Mortgage warehouse lines	Pass	—		—		—		—		—		—		252,472		—		252,472
	Special Mention	—		—		—		—		—		—		—		—		—
	Substandard	—		—		—		—		—		—		—		—		—
Total Mortgage Warehouse Lines		—		—		—		—		—		—		252,472		—		252,472
Consumer	Pass	7,173		12,350		6,153		2,466		1,700		1,914		711		—		32,467
	Special Mention	410		636		318		209		93		69		17		—		1,752
	Substandard	126		153		25		19		63		7		28		—		421
Total Consumer		7,709		13,139		6,496		2,694		1,856		1,990		756		—		34,640
Other
Credit cards	Pass	1,573		—		—		—		—		—		—		—		1,573
	Special Mention	—		—		—		—		—		—		—		—		—
	Substandard	—		—		—		—		—		—		—		—		—
Total Credit Cards		1,573		—		—		—		—		—		—		—		1,573
Overdrafts	Pass	588		—		—		—		—		—		—		—		588
	Special Mention	—		—		—		—		—		—		—		—		—
	Substandard	—		—		—		—		—		—		—		—		—
Total Overdrafts		588		—		—		—		—		—		—		—		588
Total Other		2,161		—		—		—		—		—		—		—		2,161
Total		$	269,870	$	387,785	$	250,618	$	177,966	$	155,878	$	515,123	$	462,467	$	—	$	2,219,707

At June 30, 2020, we had TDRs of $25.1 million, of which $22.1 million were current with respect to restructured contractual payments. At December 31, 2019, our TDRs totaled $25.7 million, of which $22.9 million were current with respect to restructured contractual payments.  There were no commitments to lend additional funds under these restructurings at either balance sheet date.

The following table presents by class the TDRs that were restructured during the six months ended June 30, 2020 and June 30, 2019. Generally, the modifications were extensions of term, modifying the payment terms from principal and interest to interest only for an extended period, or reduction in interest rate.  TDRs are evaluated individually for allowance for credit loss purposes if the loan balance exceeds $500,000, otherwise, smaller balance TDR loans are included in the pools to determine ACLL. There were no restructurings during second quarter of 2020 or 2019.

	For the Six Months Ended   June 30, 2020					For the Six Months Ended   June 30, 2019
Dollars in thousands	Number of Modifications	Pre-modification Recorded Investment		Post-modification Recorded Investment		Number of Modifications	Pre-modification Recorded Investment		Post-modification Recorded Investment
Commercial real estate - owner occupied
Other	1	$	361	$	361	1	$	325	$	325
Commercial real estate - non-owner occupied
Multifamily	—	—		—		1	35		35
Retail	—	—		—		2	162		162
Other	—	—		—		1	127		127
Residential 1-4 family real estate
Personal residence	—	—		—		3	151		151
Rental - small loan	—	—		—		4	259		259
Consumer	—	—		—		1	16		16
Total	1	$	361	$	361	13	$	1,075	$	1,075

The following tables present defaults during the stated period of TDRs that were restructured during the prior 12 months. For purposes of these tables, a default is considered as either the loan was past due 30 days or more at any time during the period, or the loan was fully or partially charged off during the period.

	For the Three Months Ended   June 30, 2020			For the Three Months Ended   June 30, 2019
Dollars in thousands	Number of Defaults	Recorded Investment at Default Date		Number of Defaults	Recorded Investment at Default Date
Commercial real estate - owner occupied
Other	1	$	361	—	$	—
Commercial real estate - non-owner occupied
Other	—	—		1	126
Residential 1-4 family real estate
Personal residence	—	—		1	47
Rental - small loan	—	—		3	146
Total	1	$	361	5	$	319

	For the Six Months Ended   June 30, 2020			For the Six Months Ended   June 30, 2019
Dollars in thousands	Number of Defaults	Recorded Investment at Default Date		Number of Defaults	Recorded Investment at Default Date
Commercial real estate - owner occupied
Other	1	$	361	—	$	—
Commercial real estate - non-owner occupied
Other	—	—		1	126
Residential 1-4 family real estate
Personal residence	—	—		1	47
Rental - small loan	—	—		3	146
Total	1	$	361	5	$	319

As of June 30, 2020, we had executed 618 modifications to interest only or principal and interest deferrals on outstanding loan balances of $360 million in connection with the COVID-19 relief provided by the CARES Act. These modifications and deferrals were generally no more than 6 months in duration and were not considered troubled debt restructurings based on interagency guidance issued in March 2020.

On January 1, 2020, we purchased loans, for which there was, at the time of acquisition, more than significant deterioration of credit quality since origination (PCD loans). The carrying amount of these loans at acquisition is as follows:

Dollars in thousands	January 1, 2020
Purchase price of PCD loans at acquisition	$	1,877
Allowance for credit losses - loans at acquisition	410
Non-credit discount at acquisition	159
Par value of PCD loans at acquisition	1,308