Loans

6 Months Ended

Jun. 30, 2021

Receivables [Abstract]

Loans

Loans and Leases

Peoples' loan portfolio consists of various types of loans and leases originated primarily as a result of lending opportunities within Peoples' primary market areas of northeastern, central, southwestern and southeastern Ohio, central and eastern Kentucky and west central West Virginia. Peoples also originates insurance premium finance loans and leases nationwide through its Peoples Premium Finance and North Star Leasing divisions. Loans and leases throughout this document are referred to as "total loans" and "loans held for investment".

The major classifications of loan balances (in each case, net of deferred fees and costs) excluding loans held for sale, were as follows:

(Dollars in thousands)	June 30, 2021		December 31, 2020
Construction	$	100,599	$	106,792
Commercial real estate, other	948,260		929,853
Commercial and industrial	805,751		973,645
Premium finance	117,088		114,758
Leases	95,643		—
Residential real estate	566,597		574,007
Home equity lines of credit	118,401		120,913
Consumer, indirect	537,926		503,527
Consumer, direct	81,436		79,094
Deposit account overdrafts	498		351
Total loans, at amortized cost	$	3,372,199	$	3,402,940

    

Peoples Bank entered into an Asset Purchase Agreement, dated March 24, 2021 (the “Asset Purchase Agreement”), with NS Leasing, LLC, which is headquartered in Burlington, Vermont, and does business as North Star Leasing (“NSL”). Effective after the close of business on March 31, 2021, Peoples acquired $83.3 million in leases from NSL, of which $5.2 million were acquired as purchased credit deteriorated assets. Refer to Note 12, Acquisitions for more detail on the acquisition of leases from NSL.

Peoples began participating as a Small Business Administration ("SBA") Paycheck Protection Program ("PPP") lender during the second quarter of 2020. Peoples originated PPP loans of $159.2 million during the first six months of 2021 and $488.9 million of PPP loans during the full year of 2020. At June 30, 2021, the PPP loans had an amortized cost of $187.6 million, and were included in commercial and industrial loan balances. As of June 30, 2021, deferred loan origination fees, net of deferred origination costs, totaled $7.1 million. During the second quarter of 2021, Peoples recorded amortization of net deferred loan origination fees of $3.4 million on PPP loans compared to $1.9 million for the second quarter of 2020. Peoples recorded accretion of net deferred loan origination fees of $8.1 million and $1.9 million, for the six months ended June 30, 2021 and 2020, respectively. The remaining net deferred loan origination fees will be amortized over the life of the respective loans, or until forgiven by the SBA, and will be recognized in "Net interest income".

Accrued interest receivable is not included within the loan balances, but is presented in the “Other assets” line of the Unaudited Consolidated Balance Sheets, with no recorded allowance for credit losses. Total interest receivable on loans was $8.6 million at June 30, 2021 and $10.9 million at December 31, 2020.

Nonaccrual and Past Due Loans

A loan is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan agreement. A loan may be placed on nonaccrual status regardless of whether or not such loan is considered past due.

The amortized cost of loans on nonaccrual status and of loans delinquent for 90 days or more and accruing were as follows:

	June 30, 2021				December 31, 2020
(Dollars in thousands)	Nonaccrual (a)		Accruing Loans 90+ Days Past Due		Nonaccrual (a)		Accruing Loans 90+ Days Past Due
Construction	$	4	$	—	$	4	$	—
Commercial real estate, other	8,064		1,361		9,111		—
Commercial and industrial	5,712		161		6,192		50
Premium finance	—		216		—		204
Leases	—		1,522		—		—
Residential real estate	7,595		342		8,375		1,975
Home equity lines of credit	701		60		867		82
Consumer, indirect	897		39		1,073		39
Consumer, direct	106		40		171		17
Total loans, at amortized cost	$	23,079	$	3,741	$	25,793	$	2,367

(a) There were $1.0 million of nonaccrual loans for which there was no allowance for credit losses at June 30, 2021 and $1.3 million at December 31, 2020.

During the first six months of 2021, nonaccrual loans decreased compared to December 31, 2020, mostly due to three commercial loans and two consumer loans being charged-off coupled with three commercial and one consumer loan payoffs. As of June 30, 2021, the short-term modifications, such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment for current borrowers, Peoples had made were insignificant. Under the Coronavirus Aid, Relief and Economic Security Act (the "CARES Act"), borrowers that are considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. As such, these modifications made under the CARES Act were not included in Peoples' nonaccrual or accruing loans 90+ days past due at June 30, 2021. During the second quarter of 2021, accruing loans, 90+ days past due increased primarily due to the leases acquired from NSL.

The amount of interest income recognized on loans past due 90 days or more during the three and six months ended June 30, 2021 was $324,000 and $676,000, respectively.

The following table presents the aging of the amortized cost of past due loans:

	Loans Past Due								Current Loans		Total Loans
(Dollars in thousands)	30 - 59 days		60 - 89 days		90 + Days		Total
June 30, 2021
Construction	$	—	$	—	$	4	$	4	$	100,595	$	100,599
Commercial real estate, other	1,134		739		8,834		10,707		937,553		948,260
Commercial and industrial	50		264		5,873		6,187		799,564		805,751
Premium finance	397		122		216		735		116,353		117,088
Leases	344		527		1,522		2,393		93,250		95,643
Residential real estate	969		1,573		3,656		6,198		560,399		566,597
Home equity lines of credit	397		276		620		1,293		117,108		118,401
Consumer, indirect	2,660		531		214		3,405		534,521		537,926
Consumer, direct	145		35		88		268		81,168		81,436
Deposit account overdrafts	—		—		—		—		498		498
Total loans, at amortized cost	$	6,096	$	4,067	$	21,027	$	31,190	$	3,341,009	$	3,372,199
December 31, 2020
Construction	$	—	$	344	$	4	$	348	$	106,444	$	106,792
Commercial real estate, other	1,943		283		8,643		10,869		918,984		929,853
Commercial and industrial	567		552		4,535		5,654		967,991		973,645
Premium finance	928		1,073		204		2,205		112,553		114,758
Residential real estate	6,739		2,688		5,512		14,939		559,068		574,007
Home equity lines of credit	309		58		780		1,147		119,766		120,913
Consumer, indirect	4,362		733		348		5,443		498,084		503,527
Consumer, direct	424		43		123		590		78,504		79,094
Deposit account overdrafts	—		—		—		—		351		351
Total loans, at amortized cost	$	15,272	$	5,774	$	20,149	$	41,195	$	3,361,745	$	3,402,940

Delinquency trends remained stable, as 99.1% of Peoples' portfolio was considered “current” at June 30, 2021, compared to 98.8% at December 31, 2020.

Pledged Loans

Peoples has pledged certain loans secured by one-to-four family and multifamily residential mortgages, home equity lines of credit and commercial real estate loans under a blanket collateral agreement to secure borrowings from the FHLB. Peoples also has pledged eligible commercial and industrial loans to secure borrowings with the FRB. Loans pledged are summarized as follows:

(Dollars in thousands)	June 30, 2021		December 31, 2020
Loans pledged to FHLB	$	736,321	$	740,584
Loans pledged to FRB	120,531		107,340

Credit Quality Indicators

As discussed in "Note 1 Summary of Significant Accounting Policies" of the Notes to the Consolidated Financial Statements included in Peoples' 2020 Form 10-K, Peoples categorizes the majority of its loans into risk categories based upon an established risk grading matrix using a scale of 1 to 8. Loan grades are assigned at the time a new loan or lending commitment is extended by Peoples and may be changed at any time when circumstances warrant. Loans to borrowers with an aggregate unpaid principal balance in excess of $1.0 million are reviewed at least on an annual basis for possible credit deterioration. Loan relationships whose aggregate credit exposure to Peoples is equal to or less than $1.0 million are reviewed on an event driven basis. Triggers for review include knowledge of adverse events affecting the borrower's business, receipt of financial statements indicating deteriorating credit quality or other similar events. Adversely classified loans are reviewed on a quarterly basis. A description of the general characteristics of the risk grades used by Peoples is as follows:

“Pass” (grades 1 through 4): Loans in this risk category involve borrowers of acceptable-to-strong credit quality and risk who have the apparent ability to satisfy their loan obligations. Loans in this risk grade would possess sufficient mitigating

factors, such as adequate collateral or strong guarantors possessing the capacity to repay the loan if required, for any weakness that may exist.

“Special Mention” (grade 5): Loans in this risk grade are the equivalent of the regulatory definition of “Other Assets Especially Mentioned.” Loans in this risk category possess some credit deficiency or potential weakness, which requires a high level of management attention. Potential weaknesses include declining trends in operating earnings and cash flows and/or reliance on a secondary source of repayment. If left uncorrected, these potential weaknesses may result in noticeable deterioration of the repayment prospects for the loan or in Peoples' credit position.

“Substandard” (grade 6): Loans in this risk grade are inadequately protected by the borrower's current financial condition and payment capability or the collateral pledged, if any. Loans so classified have one or more well-defined weaknesses that jeopardize the orderly repayment of the loans. They are characterized by the distinct possibility that Peoples will sustain some loss if the deficiencies are not corrected.

“Doubtful” (grade 7): Loans in this risk grade have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or orderly repayment in full, on the basis of current existing facts, conditions and values, highly questionable and improbable. Possibility of loss is extremely high, but because of certain important and reasonably specific factors that may work to the advantage and strengthening of the exposure, classification of each of these loans as an estimated loss is deferred until its more exact status may be determined.

“Loss” (grade 8): Loans in this risk grade are considered to be non-collectible and of such little value that their continuance as bankable assets is not warranted. This does not mean a loan has absolutely no recovery value, but rather it is neither practical nor desirable to defer writing off the loan, even though partial recovery may be obtained in the future. Charge-offs against the allowance for credit losses are taken during the period in which the loan becomes uncollectible. Consequently, Peoples typically does not maintain a recorded investment in loans within this category.

Consumer loans and other smaller-balance loans are evaluated and categorized as “substandard,” or “loss” based upon the regulatory definition of these classes and consistent with regulatory requirements when they meet those criteria. Leases are categorized as special mention, substandard, or loss based upon delinquency status and the prospect of collecting the remaining net investment balance owed under the lease. All other loans not evaluated individually, nor meeting the regulatory conditions to be categorized as described above, would be considered as being “pass" for disclosure purposes.

The following table summarizes the risk category of loans within Peoples' loan portfolio based upon the most recent analysis performed at June 30, 2021:

	Term Loans at Amortized Cost by Origination Year														Revolving Loans Converted to Term
(Dollars in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans				Total Loans
Construction
Pass	$	23,080	$	38,402	$	34,630	$	174	$	659	$	1,308	$	158	$	2,673	$	98,411
Special mention	—		—		—		733		—		140		—		—		873
Substandard	—		—		—		81		169		1,065		—		—		1,315
Total	23,080		38,402		34,630		988		828		2,513		158		2,673		100,599
Commercial real estate, other
Pass	65,033		142,574		155,870		96,168		120,622		293,473		14,188		1,179		887,928
Special mention	—		238		2,760		326		4,631		18,339		—		52		26,294
Substandard	—		—		3,876		332		2,371		26,987		401		45		33,967
Doubtful	—		—		—		—		—		71		—		—		71
Total	65,033		142,812		162,506		96,826		127,624		338,870		14,589		1,276		948,260
Commercial and industrial
Pass	221,601		144,522		87,868		68,320		32,283		100,174		115,827		15,989		770,595
Special mention	66		1,289		1,891		3,289		165		992		9,250		11		16,942
Substandard	96		1,974		2,021		871		2,060		4,073		5,445		1,114		16,540
Doubtful	—		—		—		—		—		1,650		—		187		1,650
Loss	24		—		—		—		—		—		—		—		24
Total	221,787		147,785		91,780		72,480		34,508		106,889		130,522		17,301		805,751
Premium finance
Pass	95,511		21,574		3		—		—		—		—		—		117,088
Total	95,511		21,574		3		—		—		—		—		—		117,088
Leases
Pass	31,474		35,759		20,089		5,462		710		100		—		—		93,594
Special mention	118		161		232		16		1		—		—		—		528
Substandard	—		158		725		619		19		—		—		—		1,521
Total	31,592		36,078		21,046		6,097		730		100		—		—		95,643
Residential real estate
Pass	74,948		49,625		40,159		21,960		28,634		337,193		—		—		552,519
Substandard	—		—		—		—		—		13,959		—		—		13,959
Loss	—		—		—		—		—		119		—		—		119
Total	74,948		49,625		40,159		21,960		28,634		351,271		—		—		566,597
Home equity lines of credit
Pass	12,264		19,065		13,607		12,138		12,329		48,958		40		3,176		118,401
Total	12,264		19,065		13,607		12,138		12,329		48,958		40		3,176		118,401
Consumer, indirect
Pass	139,845		205,542		83,362		61,699		32,046		15,432		—		—		537,926
Total	139,845		205,542		83,362		61,699		32,046		15,432		—		—		537,926
Consumer, direct
Pass	22,265		28,186		13,957		9,057		3,505		4,466		—		—		81,436
Total	22,265		28,186		13,957		9,057		3,505		4,466		—		—		81,436
Deposit account overdrafts	498		—		—		—		—		—		—		—		498
Total loans, at amortized cost	$	686,823	$	689,069	$	461,050	$	281,245	$	240,204	$	868,499	$	145,309	$	24,426	$	3,372,199

At June 30, 2021, Peoples had a total of $1.3 million of loans secured by residential real estate mortgages that were in the process of foreclosure.

Collateral Dependent Loans

Peoples has certain loans for which repayment is dependent upon the operation or sale of collateral, as the borrower is experiencing financial difficulty. The underlying collateral can vary based upon the type of loan. The following provides more detail about the types of collateral that secure collateral dependent loans:

• Construction loans are typically secured by owner occupied commercial real estate or non-owner occupied investment real estate. Typically, owner occupied construction loans are secured by office buildings, warehouses, manufacturing facilities, and other commercial and industrial properties that are in process of construction. Non-owner occupied commercial construction loans are generally secured by office buildings and complexes, multi-family complexes, land under development, and other commercial and industrial real estate in process of construction.

•Commercial real estate loans can be secured by either owner occupied commercial real estate or non-owner occupied investment commercial real estate. Typically, owner occupied commercial real estate loans are secured by office buildings, warehouses, manufacturing facilities and other commercial and industrial properties occupied by operating companies. Non-owner occupied commercial real estate loans are generally secured by office buildings and complexes, retail facilities, multifamily complexes, land under development, industrial properties, as well as other commercial or industrial real estate.

•Commercial and industrial loans are general secured by equipment, inventory, accounts receivable, and other commercial property.

•Residential real estate loans are typically secured by first mortgages, and in some cases could be secured by a second mortgage.

•Home equity lines of credit are generally secured by second mortgages on residential real estate property.

•Consumer loans are generally secured by automobiles, motorcycles, recreational vehicles and other personal property. Some consumer loans are unsecured and have no underlying collateral.

•Leases are secured by commercial equipment and other essential business assets.

•Premium Finance loans are secured by the unearned portion of the insurance premium being financed.

The following table details Peoples' amortized cost of collateral dependent loans:

(Dollars in thousands)	June 30, 2021		December 31, 2020
Construction	$	344	$	—
Commercial real estate, other	8,000		8,467
Commercial and industrial	5,047		6,333
Residential real estate	1,322		1,670
Home equity lines of credit	395		403
Total collateral dependent loans	$	15,108	$	16,873

The decrease in collateral dependent loans at June 30, 2021, compared to December 31, 2020, was due to one commercial and industrial relationship that was no longer collateral dependent at June 30, 2021.

The following tables summarize the loans that were modified as troubled debt restructurings ("TDRs") during the three and six months ended June 30:

		Three Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2021
Commercial real estate, other	1	$	23	$	23	$	23
Leases	4	225		233		233
Residential real estate	5	245		245		245
Home equity lines of credit	4	260		260		258
Consumer, indirect	6	62		62		62
Consumer, direct	5	38		38		38
Consumer	11	100		100		100
Total	25	$	853	$	861	$	859
June 30, 2020
Residential real estate	5	$	303	$	303	$	303
Home equity lines of credit	2	14		14		14
Consumer, indirect	8	62		62		62
Total	15	$	379	$	379	$	379
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

		Six Months Ended
		Recorded Investment (a)
(Dollars in thousands)	Number of Contracts	Pre-Modification		Post-Modification		Remaining Recorded Investment
June 30, 2021
Construction	1	$	344	$	344	$	344
Commercial real estate, other	1	23		23		23
Leases	4	225		233		233
Residential real estate	8	415		419		416
Home equity lines of credit	4	260		260		258
Consumer, indirect	10	140		140		135
Consumer, direct	7	50		50		50
Consumer	17	190		190		185
Total	35	$	1,457	$	1,469	$	1,459
June 30, 2020
Commercial real estate, other	1	$	265	$	265	$	265
Commercial and industrial	1	145		145		145
Residential real estate	8	756		786		783
Home equity lines of credit	4	55		55		53
Consumer, indirect	13	128		128		122
Consumer, direct	3	51		51		49
Consumer	16	179		179		171
Total	30	$	1,400	$	1,430	$	1,417
(a) The amounts shown are inclusive of all partial paydowns and charge-offs. Loans modified in a TDR that were fully paid down, charged-off or foreclosed upon by period end are not reported.

On March 22, 2020, federal and state government banking regulators issued a joint statement, with which the FASB concurred as to the approach, regarding accounting for loan modifications for borrowers affected by COVID-19. In this guidance, 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 considered TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment which are insignificant. Under the guidance, borrowers that are considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. In addition, modification or deferral programs mandated by the U.S. federal government or any state government related to COVID-19 are not in the scope of accounting for TDRs, as defined in ASC 310-40.

Peoples did not have any loans that were modified as a TDR during the last twelve months that subsequently defaulted. Peoples had no commitments to lend additional funds to the related borrowers whose loan terms have been modified in a TDR.

Allowance for Credit Losses

Changes in the allowance for credit losses for the three months ended June 30, 2021 and June 30, 2020 are summarized below:

(Dollars in thousands)	Beginning Balance, March 31, 2021		Initial Allowance for Acquired Purchased Credit Deteriorated Assets		Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets		Provision for (Recovery of) Credit Losses (a)		Charge-offs		Recoveries		Ending Balance, June 30, 2021
Construction	$	829	$	—	$	—	$	85	$	—	$	—	$	914
Commercial real estate, other	17,834		—		—		(601)		(4)		4		17,233
Commercial and industrial	10,108		—		—		(1,435)		(5)		18		8,686
Premium finance	1,160		—		—		(155)		(7)		—		998
Leases	—		493		3,288		349		(525)		110		3,715
Residential real estate	4,935		—		—		(2)		(136)		40		4,837
Home equity lines of credit	1,494		—		—		14		(4)		—		1,504
Consumer, indirect	7,522		—		—		1,525		(269)		63		8,841
Consumer, direct	970		—		—		211		(31)		11		1,161
Deposit account overdrafts	45		—		—		53		(89)		44		53
Total	$	44,897	$	493	$	3,288	$	44	$	(1,070)	$	290	$	47,942

(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands)	Beginning Balance, March 31, 2020		Initial Allowance for Acquired Purchased Credit Deteriorated Assets		Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets		Provision for Credit Losses (a)		Charge-offs		Recoveries		Ending Balance, June 30, 2020
Construction	$	1,742	$	—	$	—	$	920	$	—	$	—	$	2,662
Commercial real estate, other	12,142		—		—		7,135		(135)		6		19,148
Commercial and industrial	8,743		—		—		573		(15)		805		10,106
Residential real estate	5,744		—		—		552		(16)		100		6,380
Home equity lines of credit	1,695		—		—		61		(9)		8		1,755
Consumer, indirect	10,878		—		—		1,679		(336)		72		12,293
Consumer, direct	1,803		—		—		179		(51)		10		1,941
Deposit account overdrafts	86		—		—		61		(119)		49		77
Total	$	42,833	$	—	$	—	$	11,160	$	(681)	$	1,050	$	54,362

(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.

Changes in the allowance for credit losses for the six months ended June 30, 2021 and June 30, 2020 are summarized below:

(Dollars in thousands)	Beginning Balance, December 31, 2020		Initial Allowance for Acquired Purchased Credit Deteriorated Assets		Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets		(Recovery of) Provision for Credit Losses (a)		Charge-offs		Recoveries		Ending Balance, June 30, 2021
Construction	$	1,887	$	—	$	—	$	(973)	$	—	$	—	$	914
Commercial real estate, other	17,536		—		—		(146)		(161)		4		17,233
Commercial and industrial	12,763		—		—		(3,797)		(298)		18		8,686
Premium finance	1,095		—		—		(74)		(23)		—		998
Leases	—		493		3,288		349		(525)		110		3,715
Residential real estate	6,044		—		—		(993)		(269)		55		4,837
Home equity lines of credit	1,860		—		—		(344)		(16)		4		1,504
Consumer, indirect	8,030		—		—		1,417		(774)		168		8,841
Consumer, direct	1,081		—		—		110		(67)		37		1,161
Deposit account overdrafts	63		—		—		84		(192)		98		53
Total	$	50,359	$	493	$	3,288	$	(4,367)	$	(2,325)	$	494	$	47,942

(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(Dollars in thousands)	Beginning Balance, January 1, 2020 (b)		Initial Allowance for Acquired Purchased Credit Deteriorated Assets		Provision for Credit Losses for Acquired Non-Purchased Credit Deteriorated Assets		Provision for Credit Losses (a)		Charge-offs		Recoveries		Ending Balance, June 30, 2020
Construction	$	600	$	51	$	—	$	2,011	$	—	$	—	$	2,662
Commercial real estate, other	7,193		1,356		—		10,622		(145)		122		19,148
Commercial and industrial	4,960		860		—		3,229		(952)		2,009		10,106
Residential real estate	3,977		383		—		1,997		(134)		157		6,380
Home equity lines of credit	1,570		2		—		197		(23)		9		1,755
Consumer, indirect	5,389		—		—		7,764		(1,057)		197		12,293
Consumer, direct	856		34		—		1,140		(113)		24		1,941
Deposit account overdrafts	94		—		—		206		(332)		109		77
Total	$	24,639	$	2,686	$	—	$	27,166	$	(2,756)	$	2,627	$	54,362

(a)Amount does not include the provision for the allowance for credit losses on unfunded commitments.

(b)Peoples adopted ASU 2016-13 - Financial Instruments - Credit Losses (Topic 326) on January 1, 2020.

During the second quarter of 2021, Peoples recorded provision for credit losses to establish the allowance for credit losses of $3.3 million on the leases acquired from NSL. Additionally, the decrease in specific reserves on individually evaluated loans resulted in a reduction of provision for credit losses of $916,000 during the second quarter of 2021. Lastly, economic assumptions used in the CECL model and Peoples' own credit portfolio developments related to COVID-19 continued to improve. The PPP loans originated during 2021 and 2020 are guaranteed by the SBA, and therefore, had no impact on the allowance for credit losses at June 30, 2021 and at December 31, 2020.

At June 30, 2021, Peoples had recorded an allowance for unfunded commitments of $2.2 million, a decrease compared to $2.4 million at March 31, 2021, and $2.9 million at December 31, 2020. The total amount of unfunded commitments had increased

compared to March 31, 2021 and December 31, 2020, but the improved economic forecast resulted in a lower allowance for unfunded commitments at June 30, 2021. The allowance for unfunded commitments (also referred to as "unfunded commitment liability") is presented in the “Accrued expenses and other liabilities” line of the Unaudited Consolidated Balance Sheets. The change in the allowance for unfunded commitments is also reflected in the "Provision for (recovery of) credit losses" line of the Unaudited Consolidated Statements of Operations.