
	September 30, 2020				December 31, 2019
(dollars in thousands)	Amount		%		Amount		%
Commercial	$	1,524,613	19	%	$	1,545,906	20	%
PPP loans	456,115		6	%	—		—
Income producing - commercial real estate	3,724,839		47	%	3,702,747		50	%
Owner occupied - commercial real estate	997,645		13	%	985,409		13	%
Real estate mortgage - residential	82,385		1	%	104,221		1	%
Construction - commercial and residential	879,144		11	%	1,035,754		14	%
Construction - C&I (owner occupied)	140,357		2	%	89,490		1	%
Home equity	72,648		1	%	80,061		1	%
Other consumer	2,509		—		2,160		—
Total loans	7,880,255		100	%	7,545,748		100	%
Less: allowance for credit losses	(110,215)				(73,658)
Net loans (1)	$	7,770,040			$	7,472,090

The Company’s goal is to mitigate risks in the event of unforeseen threats to the loan portfolio as a result of economic downturn or other negative influences. Plans for mitigating inherent risks in managing loan assets include: carefully enforcing loan policies and procedures, evaluating each borrower’s business plan during the underwriting process and throughout the loan term, identifying and monitoring primary and alternative sources for loan repayment, and obtaining collateral to mitigate economic loss in the event of liquidation. Specific loan reserves are established based upon credit and/or collateral risks on an individual loan basis. A risk rating system is employed to proactively estimate loss exposure and provide a measuring system for setting general and specific reserve allocations.

The composition of the Company’s loan portfolio is heavily weighted toward commercial real estate, both owner occupied and income producing real estate. At September 30, 2020, owner occupied - commercial real estate and construction – C&I (owner occupied) represent approximately 14% of the loan portfolio. At September 30, 2020, non-owner occupied commercial real estate and real estate construction represented approximately 58% of the loan portfolio. The combined owner occupied and commercial real estate and construction loans represent approximately 73% of the loan portfolio. Real estate also serves as collateral for loans made for other purposes, resulting in 79% of all loans being secured by real estate. These loans are underwritten to mitigate lending risks typical of this type of loan such as declines in real estate values, changes in borrower cash flow and general economic conditions. The Bank typically requires a maximum loan to value of 80% and minimum cash flow debt service coverage of 1.15 to 1.0. Personal guarantees may be required, but may be limited. In making real estate commercial mortgage loans, the Bank generally requires that interest rates adjust not less frequently than five years.

The Company is also an active traditional commercial lender providing loans for a variety of purposes, including working capital, equipment and account receivable financing. This loan category represents approximately 19% of the loan portfolio at September 30, 2020 and was generally variable or adjustable rate. Commercial loans meet reasonable underwriting standards, including appropriate collateral and cash flow necessary to support debt service. Personal guarantees are generally required, but may be limited. SBA loans represent approximately 1% of the commercial loan category. In originating SBA loans, the Company assumes the risk of non-payment on the unguaranteed portion of the credit as well as potential recourse to the SBA guarantees. The Company generally sells the guaranteed portion of the loan generating noninterest income from the gains on sale, as well as servicing income on the portion participated. SBA loans are subject to the same cash flow analyses as other commercial loans. SBA loans are subject to a maximum loan size established by the SBA as well as internal loan size guidelines.

Approximately 6% of the loan portfolio at September 30, 2020 consists of PPP loans to eligible customers. PPP loans are expected to primarily be repaid via forgiveness provisions (under the CARES Act) from the SBA. These loans are fully guaranteed as to principal and interest by the SBA and ultimately by the full faith and credit of the U.S. Government; as a result, they were approved utilizing different underwriting standards than the Bank's other commercial loans. PPP loans are included in the CECL model but do not carry an allowance for credit loss due to the aforementioned government guarantees.

Approximately 1% of the loan portfolio consists of residential mortgage loans. The repricing duration of these loans was 17 months at September 30, 2020. These credits represent first liens on residential property loans originated by the Bank. While the Bank’s general practice is to originate and sell (servicing released) loans made by its Residential Lending department, from time to time certain loan characteristics do not meet the requirements of third party investors and these loans are instead maintained in the Bank’s portfolio until they are resold to another investor at a later date or mature.

Loans intended for residential land acquisition, lot development and construction are made on the premise that the land: 1) is or will be developed for building sites for residential structures, and 2) will ultimately be utilized for construction or improvement of residential zoned real properties, including the creation of housing. Residential development and construction loans will finance projects such as single family subdivisions, planned unit developments, townhouses, and condominiums. Residential land acquisition, development and construction loans generally are underwritten with a maximum term of 36 months, including extensions approved at origination.

Commercial land acquisition and construction loans are secured by real property where loan funds will be used to acquire land and to construct or improve appropriately zoned real property for the creation of income producing or owner user commercial properties. Borrowers are generally required to put equity into each project at levels determined by the appropriate Loan Committee. Commercial land acquisition and construction loans generally are underwritten with a maximum term of 24 months.

Substantially all construction draw requests must be presented in writing on American Institute of Architects documents and certified either by the contractor, the borrower and/or the borrower’s architect. Each draw request shall also include the borrower’s soft cost breakdown certified by the borrower or their Chief Financial Officer. Prior to an advance, the Bank or its contractor inspects the project to determine that the work has been completed, to justify the draw requisition.

The Company’s loan portfolio includes acquisition, development and construction (“ADC”) real estate loans including both investment and owner occupied projects. ADC loans amounted to $1.4 billion at September 30, 2020. A portion of the ADC portfolio, both speculative and non-speculative, includes loan funded interest reserves at origination. ADC loans that provide for the use of interest reserves represent approximately 58% of the outstanding ADC loan portfolio at September 30, 2020. The decision to establish a loan-funded interest reserve is made upon origination of the ADC loan and is based upon a number of factors considered during underwriting of the credit including: (1) the feasibility of the project; (2) the experience of the sponsor; (3) the creditworthiness of the borrower and guarantors; (4) the borrower equity contribution; and (5) the level of collateral protection. When appropriate, an interest reserve provides an effective means of addressing the cash flow characteristics of a properly underwritten ADC loan. The Company recognizes that one of the risks inherent in the use of interest reserves is the potential masking of underlying problems with the project and/or the borrower’s ability to repay the loan. In order to mitigate these inherent risks, the Company employs a series of reporting and monitoring mechanisms on all ADC loans, whether or not an interest reserve is provided, including: (1) construction and development timelines which are monitored on an ongoing basis which track the progress of a given project to the timeline projected at origination; (2) a construction loan administration department independent of the lending function; (3) third party independent construction loan inspection reports; (4) monthly interest reserve monitoring reports detailing the balance of the interest reserves approved at origination and the days of interest carry represented by the reserve balances as compared to the then current anticipated time to completion and/or sale of speculative projects; and (5) quarterly commercial real estate construction meetings among senior Company management, which includes monitoring of current and projected real estate market conditions. If a project has not performed as expected, it is not the customary practice of the Company to increase loan funded interest reserves.

The following tables detail activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2020 and 2019. PPP loans are excluded from these tables since they do not carry an allowance for credit loss, as these loans are fully guaranteed as to principal and interest by the SBA, whose guarantee is backed by the full faith and credit of the U.S. Government. Allocation of a portion of the allowance to one category of loans does not restrict the use of the allowance to absorb losses in other categories.


			Income Producing -		Owner Occupied -		Real Estate		Construction -
			Commercial		Commercial		Mortgage -		Commercial and		Home		Other
(dollars in thousands)	Commercial		Real Estate		Real Estate		Residential		Residential		Equity		Consumer		Total
Three Months Ended September 30, 2020
Allowance for credit losses:
Balance at beginning of period	$	28,078	$	51,863	$	12,341	$	1,550	$	13,808	$	1,112	$	44	$	108,796
Loans charged-off	(187)		(3,750)		(20)		—		(1,179)		(92)		—		(5,228)
Recoveries of loans previously charged-off	45		—		—		—		—		—		13		58
Net loans charged-off	(142)		(3,750)		(20)		—		(1,179)		(92)		13		(5,170)
Provision for credit losses	(712)		7,327		769		321		(1,088)		(13)		(15)		6,589
Ending balance	$	27,224	$	55,440	$	13,090	$	1,871	$	11,541	$	1,007	$	42	$	110,215

Nine Months Ended September 30, 2020
Allowance for credit losses:
Balance at beginning of period, prior to adoption of ASC 326	$	18,832	$	29,265	$	5,838	$	1,557	$	17,485	$	656	$	25	$	73,658
Impact of adopting ASC 326	892		11,230		4,674		(301)		(6,143)		245		17		10,614
Loans charged-off	(7,332)		(4,300)		(20)		—		(2,947)		(92)		—		(14,691)
Recoveries of loans previously charged-off	116		—		—		—		—		—		20		136
Net loans (charged-off) recoveries	(7,216)		(4,300)		(20)		—		(2,947)		(92)		20		(14,555)
Provision for credit losses	14,716		19,245		2,598		615		3,146		198		(20)		40,498


Ending balance	$	27,224	$	55,440	$	13,090	$	1,871	$	11,541	$	1,007	$	42	$	110,215

As of September 30, 2020
Allowance for credit losses:
Individually evaluated for impairment	$	9,593	$	5,999	$	670	$	1,148	$	204	$	—	$	3	$	17,617
Collectively evaluated for impairment	17,631		49,441		12,420		723		11,337		1,007		39		92,598
Ending balance	$	27,224	$	55,440	$	13,090	$	1,871	$	11,541	$	1,007	$	42	$	110,215

Three Months Ended September 30, 2019
Allowance for credit losses:
Balance at beginning of period	$	18,136	$	27,010	$	5,756	$	1,355	$	19,006	$	581	$	242	$	72,086
Loans charged-off	(1,794)				—		—		—		—		—		(1,794)
Recoveries of loans previously charged-off	210				—		—		15		—		17		242
Net loans charged-off	(1,584)		—		—		—		15		—		17		(1,552)
Provision for credit losses	1,617		1,517		(158)		(3)		251		(6)		(32)		3,186
Ending balance	$	18,169	$	28,527	$	5,598	$	1,352	$	19,272	$	575	$	227	$	73,720

Nine Months Ended September 30, 2019
Allowance for credit losses:
Balance at beginning of period	$	15,857	$	28,034	$	6,242	$	965	$	18,175	$	599	$	72	$	69,944
Loans charged-off	(1,799)		(5,343)		—		—		—		—		(2)		(7,144)
Recoveries of loans previously charged-off	377		302		2		3		52		—		38		774
Net loans (charged-off) recoveries	(1,422)		(5,041)		2		3		52		—		36		(6,370)
Provision for credit losses	3,734		5,534		(646)		384		1,045		(24)		119		10,146
Ending balance	$	18,169	$	28,527	$	5,598	$	1,352	$	19,272	$	575	$	227	$	73,720

As of September 30, 2019
Allowance for credit losses:
Individually evaluated for impairment	$	8,196	$	1,200	$	375	$	650	$	—	$	13	$	—	$	10,434
Collectively evaluated for impairment	9,973		27,327		5,223		702		19,272		562		227		63,286
Ending balance	$	18,169	$	28,527	$	5,598	$	1,352	$	19,272	$	575	$	227	$	73,720

During the first quarter of 2020, we adopted ASU 2016-13, which replaced the incurred loss methodology for determining our provision for credit losses and allowance for credit losses with an expected loss methodology that is referred to as the CECL model. Upon adoption, the allowance for credit losses was increased by $14.7 million, which included a $4.1 million increase to the allowance for unfunded commitments, with no impact to the consolidated Statement of Income, as the charges were recorded directly to Retained Earnings (net of taxes). We recorded a $6.6 million and $40.7 million provision for credit losses for the three and nine months ended September 30, 2020, respectively, under CECL. We recorded $5.2 million and $14.6 million in net charge-offs during the three and nine months ended September 30, 2020, respectively, compared to $1.6 million and $6.4 million during the three and nine months ended September 30, 2019, respectively.

The Company uses several credit quality indicators to manage credit risk in an ongoing manner. The Company’s primary credit quality indicators are to use an internal credit risk rating system that categorizes loans into pass, watch, special mention, or classified categories. Credit risk ratings are applied individually to those classes of loans that have significant or unique credit characteristics that benefit from a case-by-case evaluation. These are typically loans to businesses or individuals in the classes which comprise the commercial portfolio segment. Groups of loans that are underwritten and structured using standardized criteria and characteristics, such as statistical models (e.g., credit scoring or payment performance), are typically risk rated and monitored collectively. These are typically loans to individuals in the classes which comprise the consumer portfolio segment.


Pass:			Loans in all classes that comprise the commercial and consumer 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 that there is a low likelihood of loss related to those loans that are considered pass.

Watch:			Loan paying as agreed with generally acceptable asset quality; however the obligor’s performance has not met expectations. Balance sheet and/or income statement has shown deterioration to the point that the obligor could not sustain any further setbacks. Credit is expected to be strengthened through improved obligor performance and/or additional collateral within a reasonable period of time.

Special Mention:			Loans in the classes that comprise the commercial portfolio segment that have potential weaknesses that deserve management’s close attention. If not addressed, these potential weaknesses may result in deterioration of the repayment prospects for the loan. The special mention credit quality indicator is not used for classes of loans that comprise the consumer portfolio segment. Management believes that there is a moderate likelihood of some loss related to those loans that are considered special mention.

Classified:			Classified (a) Substandard – Loans inadequately protected by the current sound 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. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard.

			Classified (b) Doubtful – Loans that have all the weaknesses inherent in a loan classified 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. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work to the advantage and strengthening of the assets, its classification as an estimated loss is deferred until its more exact status may be determined.


September 30, 2020 (dollars in thousands)	Prior		2016		2017		2018		2019		2020		Total
Commercial
Pass	375,848		124,678		306,487		249,287		193,594		155,505		1,405,399
Watch	32,430		—		—		451		—		—		32,881
Special Mention	1,302		4,766		2,046		12,421		207		—		20,742
Substandard	16,915		3,125		32,399		9,478		3,674		—		65,591
Total	426,495		132,569		340,932		271,637		197,475		155,505		1,524,613
PPP loans
Pass	—		—		—		—		—		456,115		456,115
Total	—		—		—		—		—		456,115		456,115
Income producing - commercial real estate
Pass	756,002		402,690		421,428		685,804		705,972		377,721		3,349,617
Watch	150,215		—		—		—		47,644		—		197,859
Special Mention	203		800		4,656		4,883		5,542		—		16,084
Substandard	13,375		15,480		74,168		53,616		4,640		—		161,279
Total	919,795		418,970		500,252		744,303		763,798		377,721		3,724,839
Owner occupied - commercial real estate
Pass	344,863		105,381		115,144		139,991		74,286		29,169		808,834
Watch	50,018		764		—		355		3,475		—		54,612
Substandard	9,584		2,038		2,645		95,171		24,761		—		134,199
Total	404,465		108,183		117,789		235,517		102,522		29,169		997,645
Real estate mortgage - residential
Pass	18,121		3,410		10,377		14,593		23,100		6,837		76,438
Watch	612		4,154		—		—		—		—		4,766
Substandard	1,181		—		—		—		—		—		1,181
Total	19,914		7,564		10,377		14,593		23,100		6,837		82,385
Construction - commercial and residential
Pass	32,535		65,703		286,922		314,061		104,335		46,832		850,388
Substandard	853		1,866		408		—		—		—		3,127
Watch	—		—		25,629		—		—		—		25,629
Total	33,388		67,569		312,959		314,061		104,335		46,832		879,144
Construction - C&I (owner occupied)
Pass	11,162		10,577		6,501		29,963		18,761		43,997		120,961
Watch	787		—		2,121		3,251		13,237		—		19,396
Total	11,949		10,577		8,622		33,214		31,998		43,997		140,357
Home Equity
Pass	38,049		4,970		8,274		8,314		4,369		6,918		70,894
Watch	1,401		—		—		—		49		—		1,450
Substandard	304		—		—		—		—		—		304
Total	39,754		4,970		8,274		8,314		4,418		6,918		72,648
Other Consumer
Pass	2,039		169		108		50		100		33		2,499
Substandard	10		—		—		—		—		—		10
Total	2,049		169		108		50		100		33		2,509
Total Recorded Investment	$	1,857,809	$	750,571	$	1,299,313	$	1,621,689	$	1,227,746	$	1,123,127	$	7,880,255


											Total
(dollars in thousands)	Pass		Watch		Special Mention		Substandard		Doubtful		Loans
December 31, 2019
Commercial	$	1,470,636	$	38,522	$	11,460	$	25,288	$	—	$	1,545,906
Income producing - commercial real estate	3,667,585		16,069		—		19,093		—		3,702,747
Owner occupied - commercial real estate	925,800		53,146		—		6,463		—		985,409
Real estate mortgage - residential	98,228		628		—		5,365		—		104,221
Construction - commercial and residential	1,113,734		—		—		11,510		—		1,125,244
Home equity	78,626		948		—		487		—		80,061
Other consumer	2,160		—		—		—		—		2,160
Total	$	7,356,769	$	109,313	$	11,460	$	68,206	$	—	$	7,545,748

As part of its comprehensive loan review process, the Loan Committee or Credit Review Committee carefully evaluate loans which are past-due 30 days or more. The Committees make a thorough assessment of the conditions and circumstances surrounding each delinquent loan. The Bank’s loan policy requires that loans be placed on nonaccrual if they are ninety days past-due, unless they are well secured and in the process of collection. Additionally, Credit Administration specifically analyzes the status of development and construction projects, sales activities and utilization of interest reserves in order to carefully and prudently assess potential increased levels of risk requiring additional reserves.


			Loans		Loans		Loans						Total Recorded
	Current		30-59 Days		60-89 Days		90 Days or		Total Past				Investment in
(dollars in thousands)	Loans		Past Due		Past Due		More Past Due		Due Loans		Non-Accrual		Loans
September 30, 2020
Commercial	$	1,494,038	$	4,585	$	10,154	$	—	$	14,739	$	15,836	$	1,524,613
PPP loans	456,115		—		—		—		—		—		456,115
Income producing - commercial real estate	3,696,949		—		7,822		—		7,822		20,068		3,724,839
Owner occupied - commercial real estate	983,021		—		446		—		446		14,178		997,645
Real estate mortgage - residential	76,798		—		—		—		—		5,587		82,385
Construction - commercial and residential	876,361		—		509		—		509		2,274		879,144
Construction - C&I (owner occupied)	138,837		1,520		—		—		1,520		—		140,357
Home equity	71,837		656		46		—		702		109		72,648
Other consumer	2,492		9		—		—		9		8		2,509
Total	$	7,796,448	$	6,770	$	18,977	$	—	$	25,747	$	58,060	$	7,880,255

December 31, 2019
Commercial	$	1,527,134	$	3,063	$	781	$	—	$	3,844	$	14,928	$	1,545,906
Income producing - commercial real estate	3,687,494		—		5,542		—		5,542		9,711		3,702,747
Owner occupied - commercial real estate	965,938		13,008		—		—		13,008		6,463		985,409
Real estate mortgage – residential	95,057		3,533		—		—		3,533		5,631		104,221
Construction - commercial and residential	1,113,735		—		—		—		—		11,509		1,125,244
Home equity	79,246		136		192		—		328		487		80,061
Other consumer	2,151		—		9		—		9		—		2,160
Total	$	7,470,755	$	19,740	$	6,524	$	—	$	26,264	$	48,729	$	7,545,748


	September 30, 2020						December 31, 2019
	Nonaccrual with		Nonaccrual with		Total		Total
	No Allowance		an Allowance		Nonaccrual		Nonaccrual
(dollars in thousands)	for Credit Loss		for Credit Loss		Loans		Loans

Commercial	572		15,262		15,834		14,928
PPP loans	—		—		—		—
Income producing - commercial real estate	6,690		13,379		20,069		9,711
Owner occupied - commercial real estate	12,627		1,551		14,178		6,463
Real estate mortgage - residential	1,434		4,154		5,588		5,631
Construction - commercial and residential	1,866		408		2,274		11,509
Home equity	109		—		109		487
Other consumer	5		3		8		—
Total (1)(2)	$	23,303	$	34,757	$	58,060	$	48,729

(2)Gross interest income of $2.6 million and $2.7 million would have been recorded for the nine months ended September 30, 2020 and 2019, respectively, if nonaccrual loans shown above had been current and in accordance with their original terms, while the interest actually recorded on such loans was $282 thousand and $598 thousand for the nine months ended September 30, 2020 and 2019, respectively. See Note 1 to the Consolidated Financial Statements for a description of the Company’s policy for placing loans on nonaccrual status.

Loans were considered impaired when, based on current information and events, it was probable the Company would be unable to collect all amounts due in accordance with the original contractual terms of the loan agreement, including scheduled principal and interest payments. If a loan was impaired, a specific valuation allowance was allocated, if necessary, so that the loan was reported at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment was expected solely from the collateral. The Bank’s loan policy requires that loans be placed on nonaccrual if they are ninety days past-due, unless they are well secured and in the process of collection. Impaired loans, or portions thereof, were charged-off when deemed uncollectible.


	Unpaid		Recorded		Recorded						Average Recorded		Interest Income
	Contractual		Investment		Investment		Total				Investment		Recognized
	Principal		With No		With		Recorded		Related		Year		Year
(dollars in thousands)	Balance		Allowance		Allowance		Investment		Allowance		to Date		To Date
December 31, 2019
Commercial	$	15,814	$	11,858	$	3,956	$	15,814	$	5,714	$	15,682	$	270
Income producing - commercial real estate	14,093		2,713		11,380		14,093		2,145		18,133		382
Owner occupied - commercial real estate	7,349		6,388		961		7,349		415		6,107		197
Real estate mortgage - residential	5,631		3,175		2,456		5,631		650		5,638		—
Construction - commercial and residential	11,509		11,101		408		11,509		100		8,211		92
Home equity	487		—		487		487		100		487		—
Other consumer	—		—		—		—		—		—		—
Total	$	54,883	$	35,235	$	19,648	$	54,883	$	9,124	$	54,258	$	941

A modification of a loan constitutes a TDR when the borrower is experiencing financial difficulty and the modification constitutes a concession. The Company offers various types of concessions when modifying a loan. Commercial and industrial loans modified in a TDR often involve temporary interest-only payments, term extensions, and converting revolving credit lines to term loans. Additional collateral, a co-borrower, or a guarantor is often requested. The most common change in terms provided by the Company is an extension of an interest-only term. As of September 30, 2020, all performing TDRs were categorized as interest-only modifications.

Loans modified in a TDR for the Company may have the financial effect of increasing the specific allowance associated with the loan. An allowance for impaired consumer and commercial loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs, if the loan is collateral dependent. Management exercises significant judgment in developing these estimates.

In response to the COVID-19 pandemic and its economic impact to our customers, we implemented a short-term modification program that complies with the CARES Act and ASC 310-40 to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. This program allows for a deferral of payments for 90 days, which we extended for an additional 90 days, for a maximum of 180 days on a cumulative and successive basis. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date. As of September 30, 2020, we granted ongoing temporary modifications on approximately 321 loans representing approximately $851 million (10.8% of total loans) in outstanding exposure. Additionally, none of the deferrals are reflected in the Company's asset quality measures (i.e. non-performing loans) due to the provision of the CARES Act that permits U.S. financial institutions to temporarily suspend the GAAP requirements to treat such short-term loan modifications as TDR. Similar provisions have also been confirmed by interagency guidance issued by the federal banking agencies and confirmed with staff members of the Financial Accounting Standards Board.


	Nine Months Ended September 30, 2020
				Income		Owner
	Number			Producing -		Occupied -		Construction -
	of			Commercial		Commercial		Commercial
(dollars in thousands)	Contracts	Commercial		Real Estate		Real Estate		Real Estate		Total
Troubled debt restructurings
Restructured accruing	7	$	1,297	$	9,188	$	37	$	—	$	10,522
Restructured nonaccruing	4	138		6,342		2,370		—		8,850
Total	11	$	1,435	$	15,530	$	2,407	$	—	$	19,372

Specific allowance		$	227	$	629	$	—	$	—	$	856

Restructured and subsequently defaulted		$	138	$	11,161	$	2,370	$	—	$	13,669


	Nine Months Ended September 30, 2019
				Income		Owner
	Number			Producing -		Occupied -		Construction -
	of			Commercial		Commercial		Commercial
(dollars in thousands)	Contracts	Commercial		Real Estate		Real Estate		Real Estate		Total
Troubled debt restructurings
Restructured accruing	7	$	898	$	4,387	$	3,283	$	—	$	8,568
Restructured nonaccruing	3	1,521		—		—		—		1,521
Total	10	$	2,419	$	4,387	$	3,283	$	—	$	10,089

Specific allowance		$	—	$	1,000	$	—	$	—	$	1,000

Restructured and subsequently defaulted		$	—	$	2,300	$	—	$	—	$	2,300

The Company had eleven TDRs at September 30, 2020 totaling approximately $19.4 million. Seven of these loans totaling approximately $10.5 million are performing under their modified terms. For the first nine months of 2020 and 2019, there were two performing TDR loans each, totaling $6.3 million and $0.9 million, respectively, that defaulted on their modified terms. A default is considered to have occurred once the TDR is past due 90 days or more or it has been placed on non-accrual status. For the three months ended September 30, 2020, there were no restructured loans where the collateral was sold and the loans paid in full, as compared to the same period in 2019, when there was one restructured loan totaling approximately $309 thousand that was paid off from the sale proceeds of the collateral property. During the three months ended September 30, 2020 and 2019, no loans were re-underwritten and removed from TDR status. Commercial and consumer loans modified in a TDR are closely monitored for delinquency as an early indicator of possible future default. If loans modified in a TDR subsequently default, the Company evaluates the loan for possible further impairment. The allowance may be increased, adjustments may be made in the allocation of the allowance or partial charge-offs may be taken to further write-down the carrying value of the loan. For both the three months ended September 30, 2020 and 2019, there were no loans modified in a TDR.