The Company’s loan portfolio consisted of the following as of the dates indicated (in thousands):

	Principal Amount Outstanding		Net Deferred Loan (Fees) Costs			Loans, Net
September 30, 2019
Commercial business	$	573,610	$	845		$	574,455
Commercial mortgage		1,037,304		(1,854	)		1,035,450
Residential real estate loans		547,839		10,817			558,656
Residential real estate lines		104,545		3,070			107,615
Consumer indirect		834,968		28,646			863,614
Other consumer		16,467		163			16,630
Total	$	3,114,733	$	41,687			3,156,420
Allowance for loan losses							(31,668	)
Total loans, net						$	3,124,752
December 31, 2018
Commercial business	$	557,040	$	821		$	557,861
Commercial mortgage		960,265		(2,071	)		958,194
Residential real estate loans		514,981		9,174			524,155
Residential real estate lines		106,712		3,006			109,718
Consumer indirect		888,732		31,185			919,917
Other consumer		16,590		163			16,753
Total	$	3,044,320	$	42,278			3,086,598
Allowance for loan losses							(33,914	)
Total loans, net						$	3,052,684

Loans held for sale (not included above) were comprised entirely of residential real estate mortgages and totaled $6.4 million and $2.9 million as of September 30, 2019 and December 31, 2018, respectively.

The Company’s recorded investment, by loan class, in current and nonaccrual loans, as well as an analysis of accruing delinquent loans is set forth as of the dates indicated (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		Greater Than 90 Days		Total Past Due		Nonaccrual		Current		Total Loans
September 30, 2019
Commercial business	$	628	$	—	$	—	$	628	$	2,884	$	570,098	$	573,610
Commercial mortgage		286		—		—		286		2,867		1,034,151		1,037,304
Residential real estate loans		797		207		—		1,004		2,526		544,309		547,839
Residential real estate lines		173		46		—		219		182		104,144		104,545
Consumer indirect		2,672		592		—		3,264		1,326		830,378		834,968
Other consumer		73		6		3		82		—		16,385		16,467
Total loans, gross	$	4,629	$	851	$	3	$	5,483	$	9,785	$	3,099,465	$	3,114,733
December 31, 2018
Commercial business	$	227	$	1	$	—	$	228	$	912	$	555,900	$	557,040
Commercial mortgage		574		—		—		574		1,586		958,105		960,265
Residential real estate loans		1,295		242		—		1,537		2,391		511,053		514,981
Residential real estate lines		102		—		—		102		255		106,355		106,712
Consumer indirect		2,424		698		—		3,122		1,989		883,621		888,732
Other consumer		139		3		8		150		—		16,440		16,590
Total loans, gross	$	4,761	$	944	$	8	$	5,713	$	7,133	$	3,031,474	$	3,044,320

There were no loans past due greater than 90 days and still accruing interest as of September 30, 2019 and December 31, 2018. There were $3 thousand and $8 thousand in consumer overdrafts which were past due greater than 90 days as of September 30, 2019 and December 31, 2018, respectively. Consumer overdrafts are overdrawn deposit accounts which have been reclassified as loans but by their terms do not accrue interest.

A modification of a loan constitutes a troubled debt restructuring (“TDR”) when a borrower is experiencing financial difficulty and the modification constitutes a concession. Commercial loans modified in a TDR may involve temporary interest-only payments, term extensions, reducing the interest rate for the remaining term of the loan, extending the maturity date at an interest rate lower than the current market rate for new debt with similar risk, collateral concessions, forgiveness of principal, forbearance agreements, or substituting or adding a new borrower or guarantor.

There were no loans modified as a TDR during the nine months ended September 30, 2019 and 2018. There were no loans modified as a TDR within the previous 12 months that defaulted during the nine months ended September 30, 2019 and 2018. For purposes of this disclosure, a loan modified as a TDR is considered to have defaulted when the borrower becomes 90 days past due.

Management has determined that specific commercial loans on nonaccrual status and all loans that have had their terms restructured in a troubled debt restructuring are impaired loans. The following table presents the recorded investment, unpaid principal balance and related allowance of impaired loans as of the dates indicated and average recorded investment and interest income recognized on impaired loans for the nine months ended September 30, 2019 and twelve-month period ended December 31, 2018 (in thousands):

	Recorded Investment ⁽¹⁾		Unpaid Principal Balance ⁽¹⁾		Related Allowance		Average Recorded Investment		Interest Income Recognized
September 30, 2019
With no related allowance recorded:
Commercial business	$	307	$	373	$	—	$	365	$	—
Commercial mortgage		3,278		7,047		—		1,727		—
		3,585		7,420		—		2,092		—
With an allowance recorded:
Commercial business		2,703		2,703		1,563		883		—
Commercial mortgage		12		12		1		1,891		—
		2,715		2,715		1,564		2,774		—
	$	6,300	$	10,135	$	1,564	$	4,866	$	—
December 31, 2018
With no related allowance recorded:
Commercial business	$	319	$	487	$	—	$	1,156	$	—
Commercial mortgage		2,013		2,789		—		692		—
		2,332		3,276		—		1,848		—
With an allowance recorded:
Commercial business		725		725		205		2,458		—
Commercial mortgage		21		21		1		1,936		—
		746		746		206		4,394		—
	$	3,078	$	4,022	$	206	$	6,242	$	—

⁽¹⁾	Difference between recorded investment and unpaid principal balance represents partial charge-offs.

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 such as the fair value of collateral. The Company analyzes commercial business and commercial mortgage loans individually by classifying the loans as to credit risk. Risk ratings are updated any time the situation warrants. The Company uses the following definitions for risk ratings:

Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Company’s credit position at some future date.

Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

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

Loans that do not meet the criteria above that are analyzed individually as part of the process described above are considered “uncriticized” or pass-rated loans and are included in groups of homogeneous loans with similar risk and loss characteristics.

The following table sets forth the Company’s commercial loan portfolio, categorized by internally assigned asset classification, as of the dates indicated (in thousands):

The Company utilizes payment status as a means of identifying and reporting problem and potential problem retail loans. The Company considers nonaccrual loans and loans past due greater than 90 days and still accruing interest to be non-performing. The following table sets forth the Company’s retail loan portfolio, categorized by payment status, as of the dates indicated (in thousands):

	Residential Real Estate Loans		Residential Real Estate Lines		Consumer Indirect		Other Consumer
September 30, 2019
Performing	$	545,313	$	104,363	$	833,642	$	16,464
Non-performing		2,526		182		1,326		3
Total	$	547,839	$	104,545	$	834,968	$	16,467
December 31, 2018
Performing	$	512,590	$	106,457	$	886,743	$	16,582
Non-performing		2,391		255		1,989		8
Total	$	514,981	$	106,712	$	888,732	$	16,590

Loans and the related allowance for loan losses are presented below as of the dates indicated (in thousands):

	Commercial Business		Commercial Mortgage		Residential Real Estate Loans		Residential Real Estate Lines		Consumer Indirect		Other Consumer		Total
September 30, 2019
Loans:
Ending balance	$	573,610	$	1,037,304	$	547,839	$	104,545	$	834,968	$	16,467	$	3,114,733
Evaluated for impairment:
Individually	$	3,010	$	3,290	$	—	$	—	$	—	$	—	$	6,300
Collectively	$	570,600	$	1,034,014	$	547,839	$	104,545	$	834,968	$	16,467	$	3,108,433
Allowance for loan losses:
Ending balance	$	12,155	$	5,922	$	1,183	$	146	$	11,842	$	420	$	31,668
Evaluated for impairment:
Individually	$	1,563	$	1	$	—	$	—	$	—	$	—	$	1,564
Collectively	$	10,592	$	5,921	$	1,183	$	146	$	11,842	$	420	$	30,104
September 30, 2018
Loans:
Ending balance	$	537,160	$	907,107	$	498,883	$	108,227	$	878,316	$	16,975	$	2,946,668
Evaluated for impairment:
Individually	$	2,338	$	2,363	$	—	$	—	$	—	$	—	$	4,701
Collectively	$	534,822	$	904,744	$	498,883	$	108,227	$	878,316	$	16,975	$	2,941,967
Allowance for loan losses:
Ending balance	$	14,231	$	5,422	$	1,305	$	212	$	12,355	$	430	$	33,955
Evaluated for impairment:
Individually	$	431	$	460	$	—	$	—	$	—	$	—	$	891
Collectively	$	13,800	$	4,962	$	1,305	$	212	$	12,355	$	430	$	33,064

The following table sets forth the changes in the allowance for loan losses for the three and nine-month periods ended September 30, 2019 (in thousands):

	Commercial Business			Commercial Mortgage			Residential Real Estate Loans			Residential Real Estate Lines			Consumer Indirect			Other Consumer			Total
Three months ended September 30, 2019
Beginning balance	$	11,717		$	8,790		$	1,217		$	145		$	12,157		$	408		$	34,434
Charge-offs		(112	)		(2,994	)		(54	)		(8	)		(2,420	)		(315	)		(5,903	)
Recoveries		102			—			14			1			1,103			73			1,293
Provision (credit)		448			126			6			8			1,002			254			1,844
Ending balance	$	12,155		$	5,922		$	1,183		$	146		$	11,842		$	420		$	31,668
Nine months ended September 30, 2019
Beginning balance	$	14,312		$	5,219		$	1,112		$	210		$	12,572		$	489		$	33,914
Charge-offs		(380	)		(2,997	)		(172	)		(10	)		(8,102	)		(867	)		(12,528	)
Recoveries		333			17			31			6			4,205			299			4,891
Provision (credit)		(2,110	)		3,683			212			(60	)		3,167			499			5,391
Ending balance	$	12,155		$	5,922		$	1,183		$	146		$	11,842		$	420		$	31,668

The following table sets forth the changes in the allowance for loan losses for the three and nine-month periods ended September 30, 2018 (in thousands):

	Commercial Business			Commercial Mortgage			Residential Real Estate Loans			Residential Real Estate Lines			Consumer Indirect			Other Consumer			Total
Three months ended September 30, 2018
Beginning balance	$	14,242		$	5,371		$	1,255		$	248		$	12,520		$	319		$	33,955
Charge-offs		(672	)		(113	)		(24	)		(23	)		(2,474	)		(301	)		(3,607	)
Recoveries		241			3			8			2			1,228			64			1,546
Provision (credit)		420			161			66			(15	)		1,081			348			2,061
Ending balance	$	14,231		$	5,422		$	1,305		$	212		$	12,355		$	430		$	33,955
Nine months ended September 30, 2018
Beginning balance	$	15,668		$	3,696		$	1,322		$	180		$	13,415		$	391		$	34,672
Charge-offs		(1,113	)		(117	)		(53	)		(124	)		(8,089	)		(969	)		(10,465	)
Recoveries		438			11			140			17			3,862			230			4,698
Provision (credit)		(762	)		1,832			(104	)		139			3,167			778			5,050
Ending balance	$	14,231		$	5,422		$	1,305		$	212		$	12,355		$	430		$	33,955

Commercial business loans primarily consist of loans to small to mid-sized businesses in our market area in a diverse range of industries. These loans are of higher risk and typically are made on the basis of the borrower’s ability to make repayment from the cash flow of the borrower’s business. Further, the collateral securing the loans may depreciate over time, may be difficult to appraise and may fluctuate in value. The credit risk related to commercial loans is largely influenced by general economic conditions and the resulting impact on a borrower’s operations or on the value of underlying collateral, if any.

Commercial mortgage loans generally have larger balances and involve a greater degree of risk than residential mortgage loans, potentially resulting in higher potential losses on an individual customer basis. Loan repayment is often dependent on the successful operation and management of the properties, as well as on the collateral securing the loan. Economic events or conditions in the real estate market could have an adverse impact on the cash flows generated by properties securing the Company’s commercial real estate loans and on the value of such properties.

Residential real estate loans (comprised of conventional mortgages and home equity loans) and residential real estate lines (comprised of home equity lines) are generally made based on the borrower’s ability to make repayment from his or her employment and other income but are secured by real property whose value tends to be more easily ascertainable. Credit risk for these types of loans is generally influenced by general economic conditions, the characteristics of individual borrowers, and the nature of the loan collateral.

Consumer indirect and other consumer loans may entail greater credit risk than residential mortgage loans and home equities, particularly in the case of other consumer loans which are unsecured or, in the case of indirect consumer loans, secured by depreciable assets, such as automobiles. In such cases, any repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance. In addition, consumer loan collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be affected by adverse personal circumstances such as job loss, illness or personal bankruptcy. Furthermore, the application of various federal and state laws, including bankruptcy and insolvency laws, may limit the amount which can be recovered on such loans.