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BHB Bar Harbor Bankshares

Filed: 8 May 20, 4:29pm
0000743367us-gaap:ConsumerPortfolioSegmentMemberbhb:OtherConsumerLoansMember2019-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: March 31, 2020

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                    to

Commission File Number: 001-13349

Graphic

BAR HARBOR BANKSHARES

(Exact name of registrant as specified in its charter)

Maine

01-0393663

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

PO Box 400

82 Main Street, Bar Harbor, ME

04609-0400

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (207) 288-3314

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Stock, par value $2.00 per share

BHB

NYSE American

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes   No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes   No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See the definition of "large accelerated filer," "accelerated filer", "smaller reporting company", or "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer         Accelerated Filer        Non-Accelerated Filer       Smaller Reporting Company         Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes   No 

The Registrant had 15,533,659 shares of common stock, par value $2.00 per share, outstanding as of April 30, 2020.

BAR HARBOR BANKSHARES AND SUBSIDIARIES

FORM 10-Q

INDEX

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Consolidated Financial Statements (unaudited)

Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019

4

Consolidated Statements of Income for the Three Months Ended March 31, 2020 and 2019

6

Consolidated Statements of Comprehensive Income for the Three Months Ended March 31, 2020 and 2019

7

Consolidated Statements of Changes in Shareholders’ Equity for the Three Months Ended March 31, 2020 and 2019

8

Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019

9

Notes to Unaudited Consolidated Interim Financial Statements

Note 1

Basis of Presentation

11

Note 2

Securities Available for Sale

15

Note 3

Loans

18

Note 4

Allowance for Loan Losses

31

Note 5

Borrowed Funds

36

Note 6

Deposits

38

Note 7

Capital Ratios and Shareholders' Equity

39

Note 8

Earnings per Share

42

Note 9

Derivative Financial Instruments and Hedging Activities

43

Note 10

Fair Value Measurements

48

Note 11

Revenue from Contracts with Customers

54

Note 12

Leases

56

Note 13

Subsequent Events

58

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

59

Selected Financial Data

60

Consolidated Loan and Deposit Analysis

61

Average Balances and Average Yields/Rates

62

Non-GAAP Financial Measures

63

Reconciliation of Non-GAAP Financial Measures

64

Financial Summary

66

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

71

Item 4.

Controls and Procedures

73

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

73

Item 1A.

Risk Factors

73

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

74

Item 6.

Exhibits

75

Signatures

76

Bar Harbor Bankshares conducts business operations principally through Bar Harbor Bank & Trust, which may be referred to as the Bank and which is a subsidiary of Bar Harbor Bankshares. Unless the context requires otherwise, references in this report to “the Company” "our company, "our," "us," "we" and similar terms refer to Bar Harbor Bankshares and its subsidiaries, including the Bank, collectively.

FORWARD-LOOKING STATEMENTS

Certain statements contained in this document that are not historical facts may constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended ("Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended ("Exchange Act"), and are intended to be covered by the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. When used in this Form 10-Q the words "may," "will," "should," "could," "would," "plan," "potential," "estimate," "project," "believe," "intend," "anticipate," "expect," "target" and similar expressions are intended to identify forward-looking statements, but these terms are not the exclusive means of identifying forward-looking statements. These forward-looking statements are subject to significant risks, assumptions and uncertainties, including among other things, changes in general economic and business conditions, increased competitive pressures, changes in the interest rate environment, legislative and regulatory change, changes in the financial markets, and other risks and uncertainties disclosed from time to time in documents that the Company files with the Securities and Exchange Commission, including but not limited to those discussed in the section titled "Risk Factors" in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019. Because of these and other uncertainties, the Company’s actual results, performance or achievements, or industry results, may be materially different from the results indicated by these forward-looking statements. In addition, the Company’s past results of operations do not necessarily indicate future results. You should not place undue reliance on any of the forward-looking statements, which speak only as of the dates on which they were made. The Company is not undertaking an obligation to update forward-looking statements, even though its situation may change in the future, except as required under federal securities law. The Company qualifies all of its forward-looking statements by these cautionary statements.

3

PART I.          FINANCIAL INFORMATION

ITEM 1.          CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

    

March 31, 2020

    

December 31, 2019

Assets

 

  

 

  

Cash and due from banks

$

68,481

$

37,261

Interest-bearing deposit with the Federal Reserve Bank

 

17,174

 

19,649

Total cash and cash equivalents

 

85,655

 

56,910

Securities:

Securities available for sale, at fair value

 

626,341

 

663,230

Federal Home Loan Bank stock

 

19,897

 

20,679

Total securities

 

646,238

 

683,909

Loans:

 

  

 

  

Commercial real estate

 

948,178

 

930,661

Commercial and industrial

 

426,357

 

423,291

Residential real estate

 

1,132,328

 

1,151,857

Consumer

 

128,120

 

135,283

Total loans

 

2,634,983

 

2,641,092

Less: Allowance for loan losses

 

(15,297)

 

(15,353)

Net loans

 

2,619,686

 

2,625,739

Premises and equipment, net

 

49,978

 

51,205

Other real estate owned

 

2,205

 

2,236

Goodwill

 

119,477

 

118,649

Other intangible assets

 

8,398

 

8,641

Cash surrender value of bank-owned life insurance

 

76,400

 

75,863

Deferred tax assets, net

 

3,166

 

3,865

Other assets

 

66,139

 

42,111

Total assets

$

3,677,342

$

3,669,128

Liabilities

 

  

 

  

Deposits:

 

  

 

  

Demand

$

400,410

$

414,534

NOW

 

578,320

 

575,809

Savings

 

423,345

 

388,683

Money market

 

404,385

 

384,090

Time

 

844,097

 

932,635

Total deposits

 

2,650,557

 

2,695,751

Borrowings:

 

  

 

  

Senior

 

497,580

 

471,396

Subordinated

 

59,849

 

59,920

Total borrowings

 

557,429

 

531,316

Other liabilities

 

65,601

 

45,654

Total liabilities

 

3,273,587

 

3,272,721

The accompanying notes are an integral part of these consolidated financial statements.

4

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS (continued)

(in thousands, except share data)

    

March 31, 2020

    

December 31, 2019

Shareholders’ equity

    

    

Capital stock, par value $2.00; authorized 20,000,000 shares; issued 16,428,388 shares at March 31, 2020 and December 31, 2019

 

32,857

 

32,857

Additional paid-in capital

 

189,314

 

188,536

Retained earnings

 

180,072

 

175,780

Accumulated other comprehensive income

 

6,190

 

3,911

Less: 841,029 and 870,257 shares of treasury stock at March 31, 2020 and December 31, 2019, respectively

 

(4,678)

 

(4,677)

Total shareholders’ equity

 

403,755

 

396,407

Total liabilities and shareholders’ equity

$

3,677,342

$

3,669,128

The accompanying notes are an integral part of these consolidated financial statements.

5

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

Three Months Ended

March 31, 

(in thousands, except earnings per share data)

    

2020

    

2019

    

Interest and dividend income

Loans

$

27,987

$

26,864

Securities and other

 

5,507

 

6,363

Total interest and dividend income

 

33,494

 

33,227

Interest expense

 

  

 

  

Deposits

 

6,020

 

6,307

Borrowings

 

2,911

 

5,155

Total interest expense

 

8,931

 

11,462

Net interest income

 

24,563

 

21,765

Provision for loan losses

 

1,111

 

324

Net interest income after provision for loan losses

 

23,452

 

21,441

Non-interest income

 

  

 

  

Trust and investment management fee income

 

3,369

 

2,757

Customer service fees

 

3,112

 

2,165

Gain on sales of securities, net

 

135

 

Bank-owned life insurance income

 

537

 

542

Customer derivative income

 

588

 

Other income

 

680

 

703

Total non-interest income

 

8,421

 

6,167

Non-interest expense

 

  

 

  

Salaries and employee benefits

 

11,884

 

10,519

Occupancy and equipment

 

4,420

 

3,386

Loss on premises and equipment, net

 

92

 

Outside services

 

534

 

411

Professional services

 

672

 

544

Communication

 

289

 

235

Marketing

 

388

 

295

Amortization of intangible assets

 

256

 

207

Acquisition, restructuring and other expenses

 

103

 

Other expenses

 

3,721

 

3,027

Total non-interest expense

 

22,359

 

18,624

Income before income taxes

 

9,514

 

8,984

Income tax expense

 

1,793

 

1,703

Net income

$

7,721

$

7,281

Earnings per share:

 

  

 

  

Basic

$

0.50

$

0.47

Diluted

$

0.50

$

0.47

Weighted average common shares outstanding:

 

  

 

  

Basic

 

15,558

 

15,523

Diluted

 

15,593

 

15,587

The accompanying notes are an integral part of these consolidated financial statements.

6

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

    

Three Months Ended

    

March 31, 

(in thousands)

    

2020

    

2019

    

Net income

$

7,721

$

7,281

Other comprehensive income, before tax:

 

  

 

  

Changes in unrealized gain on securities available-for-sale

 

5,357

 

8,900

Changes in unrealized loss on hedging derivatives

 

(2,382)

 

(845)

Changes in unrealized loss on pension

 

 

Income taxes related to other comprehensive income:

 

  

 

  

Changes in unrealized gain on securities available-for-sale

 

(1,346)

 

(2,079)

Changes in unrealized loss on hedging derivatives

 

650

 

198

Changes in unrealized loss on pension

 

 

Total other comprehensive income

 

2,279

 

6,174

Total comprehensive income

$

10,000

$

13,455

The accompanying notes are an integral part of these consolidated financial statements.

7

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

    

    

    

Accumulated 

    

    

Common 

Additional 

other 

stock

paid-in

Retained 

comprehensive 

Treasury

(in thousands, except per share data)

    

 amount

    

 capital

    

earnings

    

income (loss)

    

 stock

    

Total

Balance at December 31, 2018

 

$

32,857

$

187,653

$

166,526

$

(11,802)

$

(4,655)

$

370,579

 

Net income

 

 

 

7,281

 

 

 

7,281

Other comprehensive income

 

 

 

 

6,174

 

 

6,174

Cash dividends declared ($0.20 per share)

 

 

 

(3,105)

 

 

 

(3,105)

Net issuance (441 shares) to employee stock plans, including related tax effects

 

 

(173)

 

 

 

4

 

(169)

Recognition of stock based compensation

 

 

263

 

 

 

 

263

Balance at March 31, 2019

 

32,857

 

187,743

 

170,702

 

(5,628)

 

(4,651)

 

381,023

Balance at December 31, 2019

$

32,857

$

188,536

$

175,780

$

3,911

$

(4,677)

$

396,407

Net income

 

 

 

7,721

 

 

 

7,721

Other comprehensive income

 

 

 

 

2,279

 

 

2,279

Cash dividends declared ($0.22 per share)

 

 

 

(3,429)

 

 

 

(3,429)

Treasury stock purchased (5,586 shares)

 

 

 

 

 

(130)

 

(130)

Net issuance (23,010 shares) to employee stock plans, including related tax effects

 

 

660

 

 

 

129

 

789

Recognition of stock based compensation

 

 

118

 

 

 

 

118

Balance at March 31, 2020

$

32,857

$

189,314

$

180,072

$

6,190

$

(4,678)

$

403,755

The accompanying notes are an integral part of these consolidated financial statements.

8

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

Three Months Ended March 31, 

(in thousands)

    

2020

    

2019

Cash flows from operating activities:

 

 

  

  

Net income

 

$

7,721

$

7,281

Adjustments to reconcile net income to net cash provided by operating activities:

 

  

 

  

Provision for loan losses

 

1,111

 

324

Net amortization of securities

 

686

 

693

Change in unamortized net loan costs and premiums

 

(132)

 

(85)

Premises and equipment depreciation

 

1,182

 

952

Stock-based compensation expense

 

118

 

90

Accretion of purchase accounting entries, net

 

(1,489)

 

(886)

Amortization of other intangibles

 

256

 

207

Income from cash surrender value of bank-owned life insurance policies

 

(537)

 

(542)

Gain on sales of securities, net

 

(135)

 

Loss on other real estate owned

 

31

 

Loss on premises and equipment, net

 

92

 

Net change in other assets and liabilities

 

(5,900)

 

(3,757)

Net cash provided by operating activities

 

3,004

 

4,277

Cash flows from investing activities:

 

  

 

  

Proceeds from sales of securities available for sale

 

32,017

 

Proceeds from maturities, calls and prepayments of securities available for sale

 

24,899

 

21,709

Purchases of securities available for sale

 

(15,739)

 

(35,290)

Net change in loans

 

6,300

 

(36,209)

Purchase of FHLB stock

 

(3,161)

 

(5,567)

Proceeds from sale of FHLB stock

 

3,943

 

6,119

Purchase of premises and equipment, net

 

(628)

 

(1,809)

Acquisitions, net of cash acquired

(340)

Proceeds from sale of other real estate owned

 

51

 

Net cash provided by (used in) investing activities

 

47,342

 

(51,047)

Cash flows from financing activities:

 

  

 

  

Net decrease in deposits

 

(44,959)

 

(17,260)

Net change in short-term FHLB borrowings

(160,970)

59,716

Net change in short-term FRB borrowings

62,000

Proceeds from long-term borrowings from the FHLB

 

139,000

 

Repayments of long-term borrowings from the FHLB

 

 

(35,705)

Net change in short-term other borrowings

 

(13,831)

 

(1,531)

Repayments of subordinated debt

(32)

Payment of subordinated debt issuance costs

(39)

Net issuance to employee stock plans

789

4

Purchase of treasury stock

(130)

Cash dividends paid on common stock

 

(3,429)

 

(3,105)

Net cash (used in) provided by financing activities

 

(21,601)

 

2,119

Net change in cash and cash equivalents

 

28,745

 

(44,651)

Cash and cash equivalents at beginning of year

 

56,910

 

98,754

Cash and cash equivalents at end of year

$

85,655

$

54,103

The accompanying notes are an integral part of these consolidated financial statements.

9

BAR HARBOR BANKSHARES AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

Three Months Ended March 31, 

(in thousands)

    

2020

    

2019

Supplemental cash flow information:

 

  

 

  

Interest paid

$

8,455

$

11,490

Income taxes paid, net

 

1,205

 

1,506

Acquisition of non-cash assets and liabilities:

Assets acquired

1,171

Liabilities acquired

(343)

The accompanying notes are an integral part of these consolidated financial statements.

10

BAR HARBOR BANKSHARES AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

NOTE 1.          BASIS OF PRESENTATION

The consolidated financial statements (the “financial statements”) of Bar Harbor Bankshares and its subsidiaries (the “Company” or “Bar Harbor”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Bar Harbor Bankshares is a Maine Financial Institution Holding Company for the purposes of the laws of the state of Maine, and as such is subject to the jurisdiction of the Superintendent of the Maine Bureau of Financial Institutions. These financial statements include the accounts of the Company, its wholly owned subsidiary Bar Harbor Bank & Trust (the "Bank") and the Bank’s consolidated subsidiaries. The results of operations of companies or assets acquired are included only from the dates of acquisition. All material wholly owned and majority owned subsidiaries are consolidated unless GAAP requires otherwise.

In addition, these interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X, and accordingly, certain information and footnote disclosures normally included in financial statements prepared according to GAAP have been omitted.

The results for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the audited financial statements and note disclosures for the Company's Annual Report on Form 10-K for the year ended December 31, 2019 previously filed with the Securities and Exchange Commission (the "SEC").  In management's opinion, all adjustments necessary for a fair statement are reflected in the interim periods presented.

Reclassifications: Whenever necessary, amounts in the prior years’ financial statements are reclassified to conform to current presentation. The reclassifications had no impact on net income in the Company’s consolidated income statement.

Summary of Significant Accounting Policies

The disclosures below supplement the accounting policies in previously disclosed in NOTE 1 – Summary of Significant Accounting Policies of the Company’s 2019 Annual Report on Form 10-K.

Operating, Accounting and Reporting Considerations related to COVID-19:

The COVID-19 pandemic has negatively impacted the global economy. In response to this crisis, the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act was passed by Congress and signed into law on March 27, 2020. The CARES Act provides an estimated $2.2 trillion to fight the COVID-19 pandemic and stimulate the economy by supporting individuals and businesses through loans, grants, tax changes, and other types of relief. Some of the provisions applicable to the Company include, but are not limited to:

Accounting for Loan Modifications - The CARES Act provides that a financial institution may elect to suspend (1) the requirements under GAAP for certain loan modifications that would otherwise be categorized as a TDR and (2) any determination that such loan modifications would be considered a TDR, including the related impairment for accounting purposes.

Paycheck Protection Program - The CARES Act established the Paycheck Protection Program (“PPP”), an expansion of the Small Business Administration’s 7(a) loan program and the Economic Injury Disaster Loan Program (“EIDL”), administered directly by the SBA. 

Mortgage Forbearance - Under the CARES Act, through the earlier of December 31, 2020, or the termination date of the COVID-19 national emergency, a borrower with a federally backed mortgage loan that is experiencing financial hardship due to COVID-19 may request a forbearance. A multifamily borrower with a federally backed multifamily mortgage loan that was current as of February 1, 2020, and is experiencing financial hardship due to COVID-19 may request forbearance on the loan for up to 30 days, with up to two additional 30-day periods at the borrower’s request.

11

Also in response to the COVID-19 pandemic, the Board of Governors of the Federal Reserve System (“FRB”), the Federal Deposit Insurance Corporation (“FDIC”), the National Credit Union Administration (“NCUA”), the Office of the Comptroller of the Currency (“OCC”), and the Consumer Financial Protection Bureau (“CFPB”), in consultation with the state financial regulators (collectively, the “agencies”) issued a joint interagency statement (issued March 22, 2020; revised statement issued April 7, 2020). Some of the provisions applicable to the Company include, but are not limited to:

Accounting for Loan Modifications - Loan modifications that do not meet the conditions of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. The agencies confirmed with FASB staff that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief are not TDRs. This includes short-term (e.g., six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or insignificant delays in payment.

Past Due Reporting - With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to COVID-19 as past due because of the deferral. A loan’s payment date is governed by the due date stipulated in the legal agreement. If a financial institution agrees to a payment deferral, these loans would not be considered past due during the period of the deferral.

Nonaccrual Status and Risk Rating - During short-term COVID-19 modifications, these loans generally should not be reported as nonaccrual or as having a classified risk rating.

12

Recent Accounting Pronouncements

The following table provides a brief description of recent accounting standards updates ("ASU") that could have a material impact to the Company’s consolidated financial statements upon adoption:

Standard

Description

Required Date of Adoption

Effect on financial statements

Standards Adopted in 2020

ASU 2017-04, Simplifying the Test for Goodwill Impairment

This ASU amends Topic 350, Intangibles-Goodwill and Other, and eliminates Step 2 from the goodwill impairment test. The Company still has the option to perform the qualitative assessment for a reporting unit to determine if the quantitative impairment test is necessary

January 1, 2020

The Company has adopted ASU 2017-04 effective January 1, 2020, as required, and the ASU did not have a material impact on its financial statements. Goodwill testing is normally scheduled to be completed during the fourth quarter, but was evaluated in the first quarter in light of the economic impacts of COVID-19. The Company recognized no impairments to goodwill in the first quarter of 2020. See management’s discussion and analysis for further details.

Early adoption is permitted

ASU 2018-13 Changes to Disclosure Requirements Fair Value Measurement, Topic 820

This ASU eliminates, adds and modifies certain disclosure requirements for fair value measurements. Among the changes, entities will no longer be required to disclose the amount and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy, but will be required to disclose the range and weighted average used to develop significant unobservable inputs for Level 3 fair value measurements.

January 1, 2020

The Company has adopted ASU 2018-13, as of January 1, 2020, as required, and the ASU did not have a material impact to the disclosures as a result of the adoption.

Early adoption is permitted.

Standards Not Yet Adopted

ASU 2016-13, Measurement of Credit Losses on Financial Instruments ASU 2018-19, Codification Improvements to ASU 2016-13

This ASU amends Topic 326, Financial Instruments- Credit Losses to replace the current incurred loss accounting model with a current expected credit loss approach (CECL) for financial instruments measured at amortized cost and other commitments to extend credit. The amendments require entities to consider all available relevant information when estimating current expected credit losses, including details about past events, current conditions, and reasonable and supportable forecasts. The resulting allowance for credit losses is to reflect the portion of the amortized cost basis that the entity does not expect to collect. The amendments also eliminate the current accounting model for purchased credit impaired loans and certain off-balance sheet exposures. Additional quantitative and qualitative disclosures are required upon adoption.

While the CECL model does not apply to available for sale debt securities, the ASU does require entities to record an allowance when recognizing credit losses for available for sale securities with unrealized losses, rather than reduce the amortized cost of the securities by direct write-offs. The guidance will require companies to recognize improvements to estimated credit losses immediately in earnings rather than interest income over time.

The ASU should be adopted on a modified retrospective basis. Entities that have loans accounted for under ASC 310-30 at the time of adoption should prospectively apply the guidance in this amendment for purchase credit deteriorated assets.

January 1, 2020

Adoption of this ASU is expected to primarily change how the Company estimates credit losses with the application of the expected credit loss model. The Company will apply the standard's provisions as a cumulative effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach). The Company's CECL implementation efforts in the first quarter focused on model validation, developing new disclosures, establishing formal policies and procedures and other governance and control documentation. Certain elements of the calculation were finalized in the first quarter, including refinement of the model assumptions, the qualitative framework, internal control design, model validation, and the operational control framework to support the new process. Furthermore, changes to the economic forecasts within the model could positively or negatively impact the actual results.

The ASU was effective for the Company beginning in the first quarter of 2020; however, the CARES Act, issued in 2020, provided temporary relief related to the implementation of this accounting guidance until the earlier of the date on which the national emergency concerning the COVID-19 virus terminates or December 31, 2020. The Company has elected to utilize this relief and has calculated the allowance for loan losses and the resulting provision for loan losses using the prior incurred loss method at March 31, 2020.

Early adoption is permitted.

ASU 2018-14 Compensation- Disclosure Requirements for Defined Pension Plans Topic 715-20

This ASU makes minor changes to the disclosure requirements for employers that sponsor defined benefit pension and/or other post-retirement benefit plans.

January 1, 2021

Adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

Early adoption is permitted.

13

Standard

Description

Required Date of Adoption

Effect on financial statements

Standards Not Yet Adopted

ASU 2020-04 Facilitation of the Effects of Reference Rate Reform, Topic 848

This ASU provides temporary optional expedients and exceptions to GAAP guidance on contract modifications and hedge accounting to ease the financial reporting burdens of the expected market transition from LIBOR and other interbank offered rates to alternative reference rates, such as SOFR. For instance, companies can (1) elect not to apply certain modification accounting requirements to contracts affected by reference rate reform, if certain criteria are met. A company that makes this election would not have to re-measure the contracts at the modification date or reassess a previous accounting determination. Companies, can also (2) elect various optional expedients that would allow them to continue applying hedge accounting for hedging relationships affected by reference rate reform, if certain criteria are met. Finally, companies can (3) make a one-time election to sell and/or reclassify held-to-maturity debt securities that reference an interest rate affected by reference rate reform.

May be elected between March 12, 2020 through December 31, 2022.

The Company is currently evaluating all of its contracts, hedging relationships and other transactions that will be effected by reference rates that are being discontinued and determining which elections that need to be made.

14

NOTE 2.           SECURITIES AVAILABLE FOR SALE

The following is a summary of securities available for sale:

Gross

Gross

 Unrealized

 Unrealized

(in thousands)

    

Amortized Cost

    

 Gains

    

 Losses

    

Fair Value

March 31, 2020

 

  

 

  

 

  

 

  

Debt securities:

 

  

 

  

 

  

 

  

Mortgage-backed securities:

 

  

 

  

 

  

 

  

US Government-sponsored enterprises

$

284,925

$

11,349

$

(617)

$

295,657

US Government agency

 

98,059

 

3,801

 

(191)

 

101,669

Private label

 

20,209

 

62

 

(1,772)

 

18,499

Obligations of states and political subdivisions thereof

 

134,258

 

3,636

 

(315)

 

137,579

Corporate bonds

 

76,191

 

1,497

 

(4,751)

 

72,937

Total securities available for sale

$

613,642

$

20,345

$

(7,646)

$

626,341

Gross

Gross

 Unrealized

 Unrealized

(in thousands)

    

Amortized Cost

    

 Gains

    

 Losses

    

Fair Value

December 31, 2019

 

  

 

  

 

  

 

  

Debt securities:

 

  

 

  

 

  

 

  

Mortgage-backed securities:

 

  

 

  

 

  

 

  

US Government-sponsored enterprises

$

319,064

$

4,985

$

(2,080)

$

321,969

US Government agency

 

98,568

 

1,640

 

(547)

 

99,661

Private label

 

20,212

 

68

 

(747)

 

19,533

Obligations of states and political subdivisions thereof

 

139,240

 

3,034

 

(268)

 

142,006

Corporate bonds

 

78,804

 

1,478

 

(221)

 

80,061

Total securities available for sale

$

655,888

$

11,205

$

(3,863)

$

663,230

The amortized cost and estimated fair value of available for sale (“AFS”) securities segregated by contractual maturity at March 31, 2020 are presented below. Expected maturities may differ from contractual maturities because issuers may have the right to call or prepay obligations. Mortgage-backed securities are shown in total, as their maturities are highly variable.

Available for sale

(in thousands)

    

Amortized Cost

    

Fair Value

Within 1 year

 

$

$

Over 1 year to 5 years

 

30,554

 

31,547

Over 5 years to 10 years

 

56,401

 

52,656

Over 10 years

 

123,494

 

126,313

Total bonds and obligations

 

210,449

 

210,516

Mortgage-backed securities

 

403,193

 

415,825

Total securities available for sale

$

613,642

$

626,341

15

Securities with unrealized losses, segregated by the duration of their continuous unrealized loss positions, are summarized as follows:

Less Than Twelve Months

Over Twelve Months

Total

Gross

    

    

Gross

    

    

Gross

    

Unrealized

Fair

Unrealized

Fair

Unrealized 

Fair

(In thousands)

    

Losses

    

Value

    

Losses

    

Value

    

Losses

    

Value

March 31, 2020

 

  

 

  

 

  

 

  

 

  

 

  

Debt securities:

 

  

 

  

 

  

 

  

 

  

 

  

Mortgage-backed securities:

 

  

 

  

 

  

 

  

 

  

 

  

US Government-sponsored enterprises

$

165

$

9,548

$

452

$

6,608

$

617

$

16,156

US Government agency

 

180

 

11,899

 

11

 

4,122

 

191

 

16,021

Private label

 

10

 

124

 

1,762

 

18,234

 

1,772

 

18,358

Obligations of states and political subdivisions thereof

 

315

 

17,862

 

 

 

315

 

17,862

Corporate bonds

 

3,831

 

29,977

 

920

 

5,330

 

4,751

 

35,307

Total securities available for sale

$

4,501

$

69,410

$

3,145

$

34,294

$

7,646

$

103,704

Less Than Twelve Months

Over Twelve Months

Total

    

Gross

    

    

Gross

    

    

Gross

    

Unrealized

Fair

Unrealized

Fair

Unrealized 

Fair

(In thousands)

Losses

Value

Losses

Value

Losses

Value

December 31, 2019

 

  

 

  

 

  

 

  

 

  

 

  

Debt securities:

 

  

 

  

 

  

 

  

 

  

 

  

Mortgage-backed securities:

 

  

 

  

 

  

 

  

 

  

 

  

US Government-sponsored enterprises

$

1,074

$

43,429

$

1,006

$

49,712

$

2,080

$

93,141

US Government agency

 

432

 

19,717

 

115

 

9,120

 

547

 

28,837

Private label

 

380

 

9,843

 

367

 

9,411

 

747

 

19,254

Obligations of states and political subdivisions thereof

 

137

 

29,355

 

131

 

1,682

 

268

 

31,037

Corporate bonds

 

142

 

9,888

 

79

 

12,276

 

221

 

22,164

Total securities available for sale

$

2,165

$

112,232

$

1,698

$

82,201

$

3,863

$

194,433

Securities Impairment: As a part of the Company’s ongoing security monitoring process, the Company identifies securities in an unrealized loss position that could potentially be other-than-temporarily impaired. For the three months ended March 31, 2020 and 2019 the Company did not record any other-than-temporary impairment (“OTTI”) losses.

The following table presents the changes in estimated credit losses recognized by the Company for the periods presented:

Three Months Ended

March 31, 

    

2020

    

2019

    

Estimated credit losses as of prior year-end

$

1,697

$

1,697

Reductions for securities paid off during the period

 

 

Estimated credit losses at end of the period

$

1,697

$

1,697

The Company expects to recover its amortized cost basis on all securities in its AFS portfolio. Furthermore, the Company does not intend to sell nor does it anticipate that it will be required to sell any of its securities in an unrealized loss position as of March 31, 2020, prior to this recovery. The Company’s ability and intent to hold these securities until recovery is supported by the Company’s strong capital and liquidity positions as well as its historically low portfolio turnover.

16

The following summarizes, by investment security type, the basis for the conclusion that securities in an unrealized loss position were not other-than-temporarily impaired at March 31, 2020:

US Government-sponsored enterprises

43 out of the total 675 securities in the Company’s portfolios of AFS US Government-sponsored enterprises were in unrealized loss positions. Aggregate unrealized losses represented 3.83% of the amortized cost of securities in unrealized loss positions. The FNMA and FHLMC guarantee the contractual cash flows of all of the Company’s US Government-sponsored enterprises. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

US Government agency

22 out of the total 179 securities in the Company’s portfolios of AFS US Government agency securities were in unrealized loss positions. Aggregate unrealized losses represented 1.18% of the amortized cost of securities in unrealized loss positions. The Government National Mortgage Association (“GNMA”) guarantees the contractual cash flows of all of the Company’s US Government agency securities. The securities are investment grade rated and there were no material underlying credit downgrades during the quarter. All securities are performing.

Private label

12 of the total 19 securities in the Company’s portfolio of AFS private label mortgage-backed securities were in unrealized loss positions. Aggregate unrealized losses represented 8.80% of the amortized cost of securities in unrealized loss positions. Based upon the expectation that the Company will receive all of the future contractual cash flows related to the amortized cost on these securities, the Company does not consider there to be any additional other-than-temporary impairment with respect to these securities.

Obligations of states and political subdivisions thereof

10 of the total 210 securities in the Company’s portfolio of AFS municipal bonds and obligations were in unrealized loss positions. Aggregate unrealized losses represented 0.91% of the amortized cost of securities in unrealized loss positions. The Company continually monitors the municipal bond sector of the market carefully and periodically evaluates the appropriate level of exposure to the market. At this time, the Company feels the bonds in this portfolio carry minimal risk of default and the Company is appropriately compensated for the risk. There were no material underlying credit downgrades during the quarter. All securities are performing.

Corporate bonds

12 out of the total 27 securities in the Company’s portfolio of AFS corporate bonds were in an unrealized loss position. The aggregate unrealized loss represents 12.13% of the amortized cost of bonds in unrealized loss positions. The Company reviews the financial strength of all of these bonds and has concluded that the amortized cost remains supported by the expected future cash flows of these securities.

17

NOTE 3.           LOANS

The Company’s loan portfolio is comprised of the following segments: commercial real estate, commercial and industrial, residential real estate, and consumer loans. Commercial real estate loans include multi-family, commercial construction and land development, and other commercial real estate classes. Commercial and industrial loans include loans to commercial and agricultural businesses and tax exempt entities. Residential real estate loans consist of mortgages for 1-to-4 family housing. Consumer loans include home equity loans, auto and other installment loans.

The Company’s lending activities are principally conducted in Maine, New Hampshire, and Vermont.

Total loans include business activity loans and acquired loans. Acquired loans are those loans previously acquired from other institutions. The following is a summary of total loans:

March 31, 2020

December 31, 2019

Business

Business

Activities

Acquired

Activities 

Acquired

(in thousands)

    

Loans

    

Loans

    

Total

    

Loans

    

Loans

    

Total

Commercial real estate:

 

  

 

  

 

  

 

  

 

  

 

  

Construction and land development

$

49,157

$

2,422

$

51,579

$

31,387

$

2,903

$

34,290

Other commercial real estate

 

680,578

 

216,021

 

896,599

 

666,051

 

230,320

 

896,371

Total commercial real estate

 

729,735

 

218,443

 

948,178

 

697,438

 

233,223

 

930,661

Commercial and industrial:

 

  

 

  

 

 

  

 

  

 

Commercial

 

288,082

 

52,713

 

340,795

 

239,692

 

59,072

 

298,764

Agricultural

 

18,597

 

200

 

18,797

 

20,018

 

206

 

20,224

Tax exempt

 

55,694

 

11,071

 

66,765

 

66,860

 

37,443

 

104,303

Total commercial and industrial

 

362,373

 

63,984

 

426,357

 

326,570

 

96,721

 

423,291

Total commercial loans

 

1,092,108

 

282,427

 

1,374,535

 

1,024,008

 

329,944

 

1,353,952

Residential real estate:

 

  

 

  

 

 

  

 

  

 

Residential mortgages

 

742,710

 

389,618

 

1,132,328

 

740,687

 

411,170

 

1,151,857

Total residential real estate

 

742,710

 

389,618

 

1,132,328

 

740,687

 

411,170

 

1,151,857

Consumer:

 

  

 

  

 

 

  

 

  

 

Home equity

 

64,514

 

53,030

 

117,544

 

59,368

 

63,033

 

122,401

Other consumer

 

9,226

 

1,350

 

10,576

 

11,167

 

1,715

 

12,882

Total consumer

 

73,740

 

54,380

 

128,120

 

70,535

 

64,748

 

135,283

Total loans

$

1,908,558

$

726,425

$

2,634,983

$

1,835,230

$

805,862

$

2,641,092

The carrying amount of the acquired loans at March 31, 2020 totaled $726.4 million. A subset of these loans was determined to have evidence of credit deterioration at acquisition date, which is accounted for in accordance with ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer. These purchased credit-impaired loans presently maintain a carrying value of $15.2 million (and total note balances of $19.3 million). These loans are evaluated for impairment through the periodic reforecasting of expected cash flows. Acquired loans considered not impaired at the acquisition date had a carrying amount of $711.2 million as of March 31, 2020.

18

The following table summarizes activity in the accretable yield for the acquired loan portfolio that falls under the purview of ASC 310-30, Accounting for Certain Loans or Debt Securities Acquired in a Transfer:

Three Months Ended March 31, 

(in thousands)

    

2020

    

2019

Balance at beginning of period

$

7,367

$

3,509

Reclassification from nonaccretable difference for loans with improved cash flows

 

 

2,031

Accretion

 

(528)

 

(1,063)

Balance at end of period

$

6,839

$

4,477

The following is a summary of past due loans at March 31, 2020 and December 31, 2019:

Business Activities Loans

90 Days or

Past Due >

    

30-59 Days

    

60-89 Days

    

 Greater 

    

Total Past

    

    

    

90 days and

(in thousands)

Past Due

Past Due

Past Due

Due

Current

Total Loans

Accruing

March 31, 2020

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Construction and land development

$

142

$

$

276

$

418

$

48,739

$

49,157

$

Other commercial real estate

 

1,521

 

533

 

1,010

 

3,064

 

677,514

 

680,578

 

Total commercial real estate

 

1,663

 

533

 

1,286

 

3,482

 

726,253

 

729,735

 

Commercial and industrial:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial

 

1,108

 

1,515

 

1,251

 

3,874

 

284,208

 

288,082

 

381

Agricultural

 

38

 

 

169

 

207

 

18,390

 

18,597

 

51

Tax exempt

 

 

 

 

 

55,694

 

55,694

 

Total commercial and industrial

 

1,146

 

1,515

 

1,420

 

4,081

 

358,292

 

362,373

 

432

Total commercial loans

 

2,809

 

2,048

 

2,706

 

7,563

 

1,084,545

 

1,092,108

 

432

Residential real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Residential mortgages

 

8,824

 

69

 

1,207

 

10,100

 

732,610

 

742,710

 

293

Total residential real estate

 

8,824

 

69

 

1,207

 

10,100

 

732,610

 

742,710

 

293

Consumer:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Home equity

 

471

 

20

 

412

 

903

 

63,611

 

64,514

 

221

Other consumer

 

19

 

5

 

2

 

26

 

9,200

 

9,226

 

Total consumer

 

490

 

25

 

414

 

929

 

72,811

 

73,740

 

221

Total loans

$

12,123

$

2,142

$

4,327

$

18,592

$

1,889,966

$

1,908,558

$

946

19

Acquired Loans

    

    

    

90 Days or 

    

    

Acquired

    

    

Past Due >

30-59 Days

60-89 Days

Greater

Total Past

Credit

90 days and

(in thousands)

Past Due

Past Due

 Past Due

Due

 

Impaired

Total Loans

 

Accruing

March 31, 2020

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Construction and land development

$

$

$

$

$

245

$

2,422

$

Other commercial real estate

 

1,843

 

256

 

1,024

 

3,123

 

7,275

 

216,021

 

737

Total commercial real estate

 

1,843

 

256

 

1,024

 

3,123

 

7,520

 

218,443

 

737

Commercial and industrial:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial

 

97

 

 

 

97

 

1,752

 

52,713

 

Agricultural

 

 

 

 

 

200

 

200

 

Tax exempt

 

 

 

 

 

 

11,071

 

Total commercial and industrial

 

97

 

 

 

97

 

1,952

 

63,984

 

Total commercial loans

 

1,940

 

256

 

1,024

 

3,220

 

9,472

 

282,427

 

737

Residential real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Residential mortgages

 

5,043

 

99

 

834

 

5,976

 

4,856

 

389,618

 

401

Total residential real estate

 

5,043

 

99

 

834

 

5,976

 

4,856

 

389,618

 

401

Consumer:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Home equity

 

626

 

 

199

 

825

 

789

 

53,030

 

43

Other consumer

 

1

 

 

 

1

 

58

 

1,350

 

Total consumer

 

627

 

 

199

 

826

 

847

 

54,380

 

43

Total loans

$

7,610

$

355

$

2,057

$

10,022

$

15,175

$

726,425

$

1,181

20

Business Activities Loans

90 Days or

Past Due >

    

30-59 Days

    

60-89 Days

    

 Greater 

    

Total Past

    

    

    

90 days and

(in thousands)

Past Due

Past Due

Past Due

Due

Current

Total Loans

Accruing

December 31, 2019

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Construction and land development

$

205

$

53

$

$

258

$

31,129

$

31,387

$

Other commercial real estate

 

40

 

1,534

 

1,810

 

3,384

 

662,667

 

666,051

 

Total commercial real estate

 

245

 

1,587

 

1,810

 

3,642

 

693,796

 

697,438

 

Commercial and industrial:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial

 

452

 

50

 

894

 

1,396

 

238,296

 

239,692

 

Agricultural

 

62

 

34

 

96

 

192

 

19,826

 

20,018

 

Tax exempt

 

 

 

 

 

66,860

 

66,860

 

Total commercial and industrial

 

514

 

84

 

990

 

1,588

 

324,982

 

326,570

 

Total commercial loans

 

759

 

1,671

 

2,800

 

5,230

 

1,018,778

 

1,024,008

 

Residential real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Residential mortgages

 

7,293

 

1,243

 

668

 

9,204

 

731,483

 

740,687

 

Total residential real estate

 

7,293

 

1,243

 

668

 

9,204

 

731,483

 

740,687

 

Consumer:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Home equity

 

597

 

43

 

429

 

1,069

 

58,299

 

59,368

 

50

Other consumer

 

36

 

12

 

 

48

 

11,119

 

11,167

 

Total consumer

 

633

 

55

 

429

 

1,117

 

69,418

 

70,535

 

50

Total loans

$

8,685

$

2,969

$

3,897

$

15,551

$

1,819,679

$

1,835,230

$

50

21

Acquired Loans

    

    

    

90 Days or

    

    

Acquired

    

    

Past Due >

30-59 Days

60-89 Days

 Greater

Total Past

Credit

90 days and

(in thousands)

Past Due

Past Due

 Past Due

Due

Impaired

Total Loans

Accruing

December 31, 2019

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Construction and land development

$

$

12

$

$

12

$

384

$

2,903

$

Other commercial real estate

 

2,029

 

245

 

231

 

2,505

 

8,289

 

230,320

 

Total commercial real estate

 

2,029

 

257

 

231

 

2,517

 

8,673

 

233,223

 

Commercial and industrial:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Commercial

 

440

 

335

 

140

 

915

 

2,723

 

59,072

 

Agricultural

 

 

 

 

 

173

 

206

 

Tax exempt

 

 

 

 

 

36

 

37,443

 

Total commercial and industrial

 

440

 

335

 

140

 

915

 

2,932

 

96,721

 

Total commercial loans

 

2,469

 

592

 

371

 

3,432

 

11,605

 

329,944

 

Residential real estate:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Residential mortgages

 

3,185

 

864

 

1,015

 

5,064

 

5,591

 

411,170

 

Total residential real estate

 

3,185

 

864

 

1,015

 

5,064

 

5,591

 

411,170

 

Consumer:

 

  

 

  

 

  

 

  

 

  

 

  

 

  

Home equity

 

208

 

548

 

217

 

973

 

1,291

 

63,033

 

217

Other consumer

 

2

 

9

 

 

11

 

66

 

1,715

 

Total consumer

 

210

 

557

 

217

 

984

 

1,357

 

64,748

 

217

Total loans

$

5,864

$

2,013

$

1,603

$

9,480

$

18,553

$

805,862

$

217

22

Non-Accrual Loans

The following is summary information pertaining to non-accrual loans at March 31, 2020 and December 31, 2019:

March 31, 2020

December 31, 2019

    

Business

    

    

    

Business

    

    

Activities  

Acquired

Activities

Acquired

(in thousands)

 

Loans

 

Loans

Total

 

  Loans

 

Loans

Total

Commercial real estate:

 

  

 

  

 

  

 

  

 

  

 

  

Construction and land development

$

276

$

$

276

$

258

$

$

258

Other commercial real estate

 

1,664

 

287

 

1,951

 

2,888

 

343

 

3,231

Total commercial real estate

 

1,940

 

287

 

2,227

 

3,146

 

343

 

3,489

Commercial and industrial:

 

  

 

  

 

  

 

  

 

  

 

  

Commercial

 

1,282

 

89

 

1,371

 

932

 

626

 

1,558

Agricultural

 

625

 

 

625

 

278

 

 

278

Tax exempt

 

 

 

 

 

 

Total commercial and industrial

 

1,907

 

89

 

1,996

 

1,210

 

626

 

1,836

Total commercial loans

 

3,847

 

376

 

4,223

 

4,356

 

969

 

5,325

Residential real estate:

 

  

 

  

 

  

 

  

 

  

 

  

Residential mortgages

 

4,077

 

1,012

 

5,089

 

3,362

 

1,973

 

5,335

Total residential real estate

 

4,077

 

1,012

 

5,089

 

3,362

 

1,973

 

5,335

Consumer:

 

  

 

  

 

  

 

  

 

  

 

  

Home equity

 

440

 

284

 

724

 

615

 

254

 

869

Other consumer

 

20

 

 

20

 

21

 

 

21

Total consumer

 

460

 

284

 

744

 

636

 

254

 

890

Total loans

$

8,384

$

1,672

$

10,056

$

8,354

$

3,196

$

11,550

Loans evaluated for impairment as of March 31, 2020 and December 31, 2019 are, as follows:

Business Activities Loans

Commercial

Commercial

Residential

(in thousands)

    

real estate

    

 and industrial

    

real estate

    

Consumer

    

Total

March 31, 2020

 

  

 

  

 

  

 

  

 

  

Balance at end of period

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

2,638

$

1,733

$

3,586

$

13

$

7,970

Collectively evaluated

 

727,097

 

360,640

 

739,124

 

73,727

 

1,900,588

Total

$

729,735

$

362,373

$

742,710

$

73,740

$

1,908,558

Acquired Loans

    

Commercial

    

Commercial

    

Residential

    

    

(in thousands)

real estate

 and industrial

real estate

Consumer

Total

March 31, 2020

 

  

 

  

 

  

 

  

 

  

Balance at end of period

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

70

$

$

296

$

$

366

Purchased credit impaired

 

7,520

 

1,952

 

4,856

 

847

 

15,175

Collectively evaluated

 

210,853

 

62,032

 

384,466

 

53,533

 

710,884

Total

$

218,443

$

63,984

$

389,618

$

54,380

$

726,425

23

Business Activities Loans

    

Commercial

    

Commercial

    

Residential

    

    

(in thousands)

real estate

 and industrial

real estate

Consumer

Total

December 31, 2019

 

  

 

  

 

  

 

  

 

  

Balance at end of period

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

3,964

$

1,353

$

2,620

$

13

$

7,950

Collectively evaluated

 

693,474

 

325,217

 

738,067

 

70,522

 

1,827,280

Total

$

697,438

$

326,570

$

740,687

$

70,535

$

1,835,230

Acquired Loans

    

Commercial

    

Commercial 

    

Residential

    

    

(in thousands)

real estate

and industrial

real estate

Consumer

Total

December 31, 2019

 

  

 

  

 

  

 

  

 

  

Balance at end of period

 

  

 

  

 

  

 

  

 

  

Individually evaluated for impairment

$

258

$

385

$

1,032

$

$

1,675

Purchased credit impaired

 

8,673

 

2,932

 

5,591

 

1,357

 

18,553

Collectively evaluated

 

224,292

 

93,404

 

404,547

 

63,391

 

785,634

Total

$

233,223

$

96,721

$

411,170

$

64,748

$

805,862

The following is a summary of impaired loans at March 31, 2020 and December 31, 2019:

Business Activities Loans

March 31, 2020

    

Recorded 

    

Unpaid Principal

    

Related 

(in thousands)

 Investment

 

Balance

 Allowance

With no related allowance:

 

  

 

  

 

  

Construction and land development

$

$

$

Other commercial real estate

 

1,341

 

2,060

 

Commercial

 

1,075

 

1,242

 

Agricultural

 

67

 

68

 

Tax exempt loans

 

 

 

Residential real estate

 

2,603

 

2,794

 

Home equity

 

 

 

Other consumer

 

 

 

With an allowance recorded:

 

  

 

  

 

  

Construction and land development

265

266

213

Other commercial real estate

1,032

1,082

462

Commercial

230

236

47

Agricultural

361

361

91

Tax exempt loans

Residential real estate

983

1,111

126

Home equity

13

13

Other consumer

Total

  

  

  

Commercial real estate

2,638

3,408

675

Commercial and industrial

 

1,733

 

1,907

 

138

Residential real estate

 

3,586

 

3,905

 

126

Consumer

 

13

 

13

 

Total impaired loans

$

7,970

$

9,233

$

939

24

Acquired Loans

March 31, 2020

    

Recorded 

    

Unpaid Principal

    

Related

(in thousands)

 Investment

 

Balance

  Allowance

With no related allowance:

 

  

 

  

 

  

Construction and land development

$

$

$

Other commercial real estate

 

 

 

Commercial

 

 

 

Agricultural

 

 

 

Tax exempt loans

 

 

 

Residential real estate

 

134

 

308

 

Home equity

 

 

 

Other consumer

 

 

 

With an allowance recorded:

 

  

 

  

 

  

Construction and land development

Other commercial real estate

70

71

13

Commercial

Agricultural

Tax exempt loans

Residential real estate

162

185

14

Home equity

Other consumer

Total

  

  

  

Commercial real estate

70

71

13

Commercial and industrial

 

 

 

Residential real estate

 

296

 

493

 

14

Consumer

 

 

 

Total impaired loans

$

366

$

564

$

27

25

Business Activities Loans

December 31, 2019

    

Recorded 

    

Unpaid Principal

    

Related  

(in thousands)

 

 Investment

 

Balance

 

Allowance

With no related allowance:

 

  

 

  

 

  

Construction and land development

$

$

$

Other commercial real estate

 

1,911

 

1,957

 

Commercial

 

710

 

773

 

Agricultural

 

361

 

261

 

Tax exempt loans

 

 

 

Residential real estate

 

2,067

 

2,227

 

Home equity

 

 

 

Other consumer

 

 

 

With an allowance recorded:

 

  

 

  

 

  

Construction and land development

258

258

205

Other commercial real estate

1,795

1,940

1,026

Commercial

282

289

164

Agricultural

Tax exempt loans

Residential real estate

553

590

57

Home equity

13

13

Other consumer

Total

  

  

  

Commercial real estate

3,964

4,155

1,231

Commercial and industrial

 

1,353

 

1,423

164

Residential real estate

 

2,620

 

2,817

 

57

Consumer

 

13

 

13

 

Total impaired loans

$

7,950

$

8,408

$

1,452

26

Acquired Loans

December 31, 2019

    

Recorded  

    

Unpaid Principal

    

Related  

(in thousands)

 

Investment

 

Balance

 

Allowance

With no related allowance:

 

  

 

  

 

  

Construction and land development

$

$

$

Other commercial real estate

 

90

 

90

 

Commercial

 

385

 

481

 

Agricultural

 

 

 

Tax exempt

 

 

 

Residential mortgages

 

678

 

938

 

Home equity

 

 

 

Other consumer

 

 

 

With an allowance recorded:

 

  

 

  

 

  

Construction and land development

Other commercial real estate

168

168

12

Commercial

Agricultural

Tax exempt

Residential mortgages

354

376

49

Home equity

Other consumer

��

Total

  

  

  

Commercial real estate

258

258

12

Commercial and industrial

 

385

 

481

 

Residential real estate

 

1,032

 

1,314

 

49

Consumer

 

 

 

Total impaired loans

$

1,675

$

2,053

$

61

27

The following is a summary of the average recorded investment and interest income recognized on impaired loans for the three months ended March 31, 2020 and 2019:

Business Activities Loans

Three Months Ended March 31, 2020

Three Months Ended March 31, 2019

    

Average Recorded

    

Interest

    

Average Recorded

    

Interest

(in thousands)

 

Investment

 

Income Recognized

 

Investment

 

Income Recognized

With no related allowance:

 

  

 

  

 

  

 

  

Construction and land development

$

$

$

$

Other commercial real estate

 

1,728

 

3

 

7,773

 

26

Commercial

 

1,071

 

1

 

527

 

2

Agricultural

 

 

 

 

Tax exempt loans

 

 

 

 

Residential real estate

 

2,589

 

17

 

1,965

 

15

Home equity

 

 

 

 

Other consumer

 

 

 

 

With an allowance recorded:

 

  

 

  

 

  

 

  

Construction and land development

261

1

5

Other commercial real estate

1,021

1,203

Commercial

233

890

Agricultural

Tax exempt loans

Residential real estate

979

2

652

2

Home equity

12

13

Other consumer

Total

  

  

  

  

Commercial real estate

3,010

4

8,981

26

Commercial and industrial

 

1,304

1

1,417

 

2

Residential real estate

 

3,568

 

19

2,617

 

17

Consumer

 

12

 

13

 

Total impaired loans

$

7,894

$

24

$

13,028

$

45

28

Acquired Loans

Three Months Ended March 31, 2020

Three Months Ended March 31, 2019

    

Average Recorded

    

Interest

    

Average Recorded

    

Interest

(in thousands)

 

Investment

 

Income Recognized

 

Investment

 

Income Recognized

With no related allowance:

 

  

 

  

 

  

 

  

Construction and land development

$

$

$

$

Other commercial real estate

 

 

 

90

 

Commercial

 

 

 

479

 

Agricultural

 

 

 

 

Tax exempt loans

 

 

 

 

Residential real estate

 

195

 

 

436

 

Home equity

 

 

 

 

Other consumer

 

 

 

 

With an allowance recorded:

 

  

 

  

 

  

 

  

Construction and land development

Other commercial real estate

70

36

Commercial

Agricultural

Tax exempt loans

Residential real estate

163

367

Home equity

Other consumer

Total

  

  

  

  

Commercial real estate

70

126

Commercial and industrial

 

 

479

Residential real estate

 

358

 

803

 

Consumer

 

 

 

 

Total impaired loans

$

428

$

$

1,408

$

Troubled Debt Restructuring Loans

The Company’s loan portfolio also includes certain loans that have been modified in a Troubled Debt Restructuring ("TDR"), where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from the Company’s loss mitigation activities and could include reductions in the interest rate, payment extensions, forgiveness of principal, forbearance, or other actions. Certain TDRs are classified as non-performing at the time of restructure and may only be returned to performing status after considering the borrower’s sustained repayment performance for a reasonable period, generally six months. TDRs are evaluated individually for impairment and may result in a specific allowance amount allocated to an individual loan.

The following tables include the recorded investment and number of modifications identified during the three months ended March 31, 2020 and 2019, respectively. The table includes the recorded investment in the loans prior to a modification and also the recorded investment in the loans after the loans were restructured. Modifications may include adjustments to interest rates, payment amounts, extensions of maturity, court ordered concessions or other actions intended to minimize economic loss and avoid foreclosure or repossession of collateral.

29

Three Months Ended March 31, 2020

Pre-Modification 

Post-Modification 

Number of 

Outstanding Recorded

Outstanding Recorded

(in thousands)

    

Modifications

    

 Investment

    

 Investment

Troubled Debt Restructurings

 

  

 

  

 

  

Other commercial real estate

 

1

$

54

$

259

Other commercial

 

3

 

41

 

208

Home equity

1

26

25

Other consumer

1

9

9

Total

 

6

$

130

$

501

Three Months Ended March 31, 2019

Pre-Modification 

Post-Modification 

Number of 

Outstanding Recorded

Outstanding Recorded

(in thousands)

    

Modifications

    

 Investment

    

 Investment

Troubled Debt Restructurings

 

  

 

  

 

  

Other commercial real estate

 

3

$

113

$

113

Other commercial

 

2

 

31

 

31

Residential mortgages

 

6

 

530

 

527

Total

 

11

$

674

$

671

The following tables summarize the types of loan concessions made for the periods presented:

Three Months Ended March 31, 

2020

2019

    

    

Post-Modification

    

    

Post-Modification

Outstanding

outstanding

Number of

Recorded

Number of

Recorded

(in thousands, except modifications)

    

Modifications

     

Investment

    

Modifications

     

Investment

Troubled Debt Restructurings

Interest rate and maturity concession

 

$

2

$

12

Interest rate, forbearance and maturity concession

 

4

 

467

 

Amortization and maturity concession

 

 

5

 

314

Amortization concession

 

 

1

 

156

Amortization, interest rate and maturity concession

1

77

Forbearance and interest only payments

1

25

2

112

Maturity concession

 

1

 

9

 

Total

 

6

$

501

11

$

671

For the three months ended March 31, 2020, there were 0 loans that were restructured that had subsequently defaulted during the period. The evaluation of certain loans individually for specific impairment includes loans that were previously classified as TDRs or continue to be classified as TDRs.

Modifications in response to COVID-19

The Company began offering short-term loan modifications to assist borrowers during the COVID-19 national emergency. The CARES Act along with a joint agency statement issued by banking agencies, provides that short-term modifications made in response to COVID-19 do not need to be accounted for as a TDR. Accordingly, the Company does not account for such loan modifications as TDRs. See Note 1 - Basis of Presentation for more information.

Foreclosure

As of March 31, 2020 and December 31, 2019, the Company maintained bank-owned residential real estate with a fair value of $2.2 million. Additionally, residential mortgage loans collateralized by real estate that are in the process of foreclosure as of March 31, 2020 and December 31, 2019 totaled $931 thousand and $810 thousand, respectively.

Mortgage Banking

Total residential loans included held for sale loans of $11.7 million and $6.5 million at March 31, 2020 and December 31, 2019, respectively.

30

NOTE 4.               ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is maintained at a level considered adequate to provide for an estimate of probable credit losses inherent in the loan portfolio. The allowance is increased by the provision charged to operating expense and reduced by net charge-offs. Loans are charged against the allowance for loan losses when the Company believes collectability has declined to a point where there is a distinct possibility of some loss of principal and interest. While the Company uses the best information available to make the evaluation, future adjustments may be necessary if there are significant changes in conditions.

The allowance is comprised of 4 distinct reserve components: (1) specific reserves related to loans individually evaluated; (2) quantitative reserves related to loans collectively evaluated; (3) qualitative reserves related to loans collectively evaluated; and (4) a temporal estimate is made for incurred loss emergence period for each loan category within the collectively evaluated pools.

A summary of the methodology employed on a quarterly basis with respect to each of these components in order to evaluate the overall adequacy of the Company's allowance for loan losses is as follows:

Specific Reserve for Loans Individually Evaluated

First, the Company identifies loan relationships having aggregate balances in excess of $150 thousand with potential credit weaknesses. Such loan relationships are identified primarily through the Company's analysis of internal loan evaluations, past due loan reports, TDRs and loans adversely classified. Each loan so identified is then individually evaluated for impairment. Loans are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the original loan agreement. Substantially all impaired loans have historically been collateral dependent, meaning repayment of the loan is expected or is considered to be provided solely from the sale of the loan's underlying collateral. For such loans, the Company measures impairment based on the fair value of the loan's collateral, which is generally determined utilizing current appraisals. A specific reserve is established in an amount equal to the excess, if any, of the recorded investment in each impaired loan over the fair value of its underlying collateral, less estimated costs to sell. The Company's policy is to re-evaluate the fair value of collateral dependent loans at least every twelve months unless there is a known deterioration in the collateral's value, in which case a new appraisal is obtained.

Purchase credit impaired (“PCI”) loans are collectively evaluated, but are not included in the general reserve as described below. The evaluation of the PCI loans requires continued quarterly assessment of key assumptions and estimates similar to the initial fair value estimate, including changes in the severity of loss, timing and speed of payments, collateral value changes, expected cash flows and other relevant factors. The quarterly assessment is compared to the initial fair value estimate and a determination is made if an adjustment to the allowance for loan loss is deemed necessary.

Quantitative Reserve for Loans Collectively Evaluated

Second, the Company stratifies the loan portfolio into 2 general business loan pools: substandard (7 risk-rated) and pass-rated (0 to 6 risk-rated) by loan type. Substandard rated loans are subject to higher credit loss rates in the allowance for loan loss calculation. The Company utilizes historical loss rates for commercial real estate and commercial and industrial loans assessed by internal risk rating. Historical loss rates on residential real estate and consumer loans are not risk graded. Residential real estate and consumer loans are considered as part of the pass-rated portfolio unless removed due to specific reserve evaluation based on past due status and/or other indications of credit deterioration. Quantitative reserves relative to each loan pool are established as follows: for all loan segments an allocation equaling 100% of the respective pool's average 3-year historical net loan charge-off rate (determined based upon the most recent 12 quarters) is applied to the aggregate recorded investment in the pool of loans. Purchased performing loans are collectively evaluated as their own separate category within each loan pool.

31

Qualitative Reserve for Loans Collectively Evaluated

Third, the Company considers the necessity to adjust the average historical net loan charge-off rates relative to each of the above 2 loan pools for potential risks factors that could result in actual losses deviating from prior loss experience. Such qualitative risk factors considered are: (1) lending policies and procedures, (2) business conditions, (3) volume and nature of the loan portfolio, (4) experience, ability and depth of lending management, (5) problem loan trends, (6) quality of the Company’s loan review system, (7) concentrations in the loan portfolio, (8) competition, legal, and regulatory environment and (9) collateral coverage and loan-to-value.

���

Loss Emergence Period for Loans Collectively Evaluated

Fourth, the general allowance related to loans collectively evaluated includes an estimate of incurred losses over an estimated loss emergence period ("LEP"). The LEP is generated utilizing a charge-off look-back analysis, which evaluates the time from the first indication of elevated risk of repayment (or other early event indicating a problem) to eventual charge-off to support the LEP considered in the allowance calculation. This reserving methodology establishes the approximate number of months of LEP that represents incurred losses for each loan portfolio within each portfolio segment in addition to the qualitative reserves.

Activity in the allowance for loan losses for the three months ended March 31, 2020 and 2019 are, as follows:

Business Activities Loans

At or for the Three Months Ended March 31, 2020

    

Commercial

    

Commercial

    

Residential

    

    

(in thousands)

real estate

and industrial

real estate

Consumer

Total

Balance at beginning of period

$

7,668

$

3,608

$

3,402

$

379

$

15,057

Charged-off loans

 

(770)

 

(150)

 

 

(148)

 

(1,068)

Recoveries on charged-off loans

 

25

 

1

 

 

3

 

29

Provision for loan losses

 

738

 

84

 

111

 

150

 

1,083

Balance at end of period

$

7,661

$

3,543

$

3,513

$

384

$

15,101

Individually evaluated for impairment

 

675

 

138

 

126

 

 

939

Collectively evaluated

 

6,986

 

3,405

 

3,387

 

384

 

14,162

Total

$

7,661

$

3,543

$

3,513

$

384

$

15,101

Acquired Loans

At or for the Three Months Ended March 31, 2020

    

Commercial

    

Commercial

    

Residential

    

    

(in thousands)

real estate

and industrial

real estate

Consumer

Total

Balance at beginning of period

$

147

$

6

$

143

$

$

296

Charged-off loans

 

(101)

 

(29)

 

(8)

 

(5)

 

(143)

Recoveries on charged-off loans

 

 

9

 

6

 

 

15

(Releases) provision for loan losses

 

18

 

17

 

(12)

 

5

 

28

Balance at end of period

$

64

$

3

$

129

$

$

196

Individually evaluated for impairment

 

13

 

 

14

 

 

27

Collectively evaluated

 

51

 

3

 

115

 

 

169

Total

$

64

$

3

$

129

$

$

196

32

Business Activities Loans

At or for the Three Months Ended March 31, 2019

    

Commercial

    

Commercial

    

Residential

    

    

(in thousands)

real estate

and industrial

real estate

Consumer

Total

Balance at beginning of period

$

6,811

$

2,380

$

3,982

$

408

$

13,581

Charged-off loans

 

(57)

 

 

 

(53)

 

(110)

Recoveries on charged-off loans

 

16

 

1

 

18

 

3

 

38

(Releases) provision for loan losses

 

(195)

 

397

 

(47)

 

38

 

193

Balance at end of period

$

6,575

$

2,778

$

3,953

$

396

$

13,702

Individually evaluated for impairment

 

396

 

53

 

83

 

1

 

533

Collectively evaluated

 

6,179

 

2,725

 

3,870

 

395

 

13,169

Total

$

6,575

$

2,778

$

3,953

$

396

$

13,702

Acquired Loans

At or for the Three Months Ended March 31, 2019

    

Commercial

    

Commercial

    

Residential

    

    

(in thousands)

real estate

and industrial

real estate

Consumer

Total

Balance at beginning of period

$

173

$

35

$

77

$

$

285

Charged-off loans

 

 

(16)

 

(104)

 

(1)

 

(121)

Recoveries on charged-off loans

 

 

 

 

 

Provision (releases) for loan losses

 

(12)

 

10

 

132

 

1

 

131

Balance at end of period

$

161

$

29

$

105

$

$

295

Individually evaluated for impairment

 

16

 

 

22

 

 

38

Collectively evaluated

 

145

 

29

 

83

 

 

257

Total

$

161

$

29

$

105

$

$

295

Loan Origination/Risk Management: The Company has certain lending policies and procedures in place designed to maximize loan income within an acceptable level of risk. The Company’s Board of Directors reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management and the Company's Board of Directors with frequent reports related to loan production, loan quality, concentration of credit, loan delinquencies, non-performing loans and potential problem loans. The Company seeks to diversify the loan portfolio as a means of managing risk associated with fluctuations in economic conditions.

Credit Quality Indicators/Classified Loans: In monitoring the credit quality of the portfolio, management applies a credit quality indicator and uses an internal risk rating system to categorize commercial loans. These credit quality indicators range from one through nine, with a higher number correlating to increasing risk of loss. These ratings are used as inputs to the calculation of the allowance for loan losses. Consistent with regulatory guidelines, the Company provides for the classification of loans which are considered to be of lesser quality as special mention, substandard, doubtful, or loss (i.e. risk-rated 6, 7, 8 and 9, respectively).

The following are the definitions of the Company’s credit quality indicators:

Pass: Loans the Company considers in the commercial portfolio segments that are not adversely rated, are contractually current as to principal and interest, and are otherwise in compliance with the contractual terms of the loan agreement. Management believes there is a low risk of loss related to these loans considered pass-rated.

Special Mention: Loans the Company considers having some potential weaknesses, but are deemed to not carry levels of risk inherent in one of the subsequent categories, are designated as special mention. A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. This might include loans which may require a higher level of supervision or internal reporting because of: (i) declining industry trends; (ii) increasing reliance on secondary sources of repayment; (iii) the poor condition of or lack of control over collateral; or (iv) failure to obtain proper documentation or any other deviations from prudent lending practices. Economic or market conditions which may, in the future, affect the obligor may warrant special mention of the asset. Loans for which an adverse trend in the borrower's operations or an imbalanced position in the balance sheet which has not reached a point

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where the liquidation is jeopardized may be included in this classification. Special mention loans are not adversely classified and do not expose the Company to sufficient risks to warrant classification.

Substandard: Loans the Company considers as substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Substandard loans have a well-defined weakness that jeopardizes liquidation of the debt. Substandard loans include those loans where there is the distinct possibility of some loss of principal, if the deficiencies are not corrected.

Doubtful: Loans the Company considers as doubtful have all of the weaknesses inherent in those loans that are classified as substandard. These loans have the added characteristic of a well-defined weakness which is inadequately protected by the current sound worth and paying capacity of borrower or of the collateral pledged, if any, and calls into question the collectability of the full balance of the loan. The possibility of loss is high but because of certain important and reasonably specific pending factors which may work to the advantage and strengthening of the loan, its classification as loss is deferred until its more exact status is determined. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral and refinancing plans. The entire amount of the loan might not be classified as doubtful when collection of a specific portion appears highly probable. Loans are generally not classified doubtful for an extended period of time (i.e., over a year).

Loss: Loans the Company considers as losses are those considered uncollectible and of such little value that their continuance as an asset is not warranted and the uncollectible amounts are charged-off. This classification does not mean the asset has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this worthless asset even though partial recovery may be affected in the future. Losses are taken in the period in which they are determined to be uncollectible.

The following tables present the Company’s loans by risk rating at March 31, 2020 and December 31, 2019:

Business Activities Loans

Commercial Real Estate

Commercial construction

and land development

Commercial real estate other

Total commercial real estate

(in thousands)

    

Mar 31, 2020

    

Dec 31, 2019

    

Mar 31, 2020

    

Dec 31, 2019

    

Mar 31, 2020

    

Dec 31, 2019

Grade:

  

  

  

  

  

  

Pass

$

48,881

$

31,057

$

659,494

$

646,886

$

708,375

$

677,943

Special mention

 

 

 

8,133

 

5,483

 

8,133

 

5,483

Substandard

 

11

 

330

 

11,824

 

11,974

 

11,835

 

12,304

Doubtful

 

265

 

 

1,127

 

1,708

 

1,392

 

1,708

Total

$

49,157

$

31,387

$

680,578

$

666,051

$

729,735

$

697,438

Acquired Loans

Commercial Real Estate

Commercial construction

and land development

Commercial real estate other

Total commercial real estate

(in thousands)

    

Mar 31, 2020

    

Dec 31, 2019

    

Mar 31, 2020

    

Dec 31, 2019

    

Mar 31, 2020

    

Dec 31, 2019

Grade:

  

  

  

  

  

  

Pass

$

2,083

$

2,412

$

205,309

$

218,491

$

207,392

$

220,903

Special mention

 

 

12

 

1,742

 

2,261

 

1,742

 

2,273

Substandard

 

339

 

479

 

8,900

 

9,400

 

9,239

 

9,879

Doubtful

 

 

 

70

 

168

 

70

 

168

Total

$

2,422

$

2,903

$

216,021

$

230,320

$

218,443

$

233,223

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