Loans and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2021

Loans and Leases Receivable Disclosure [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure

Loans and Allowance for Credit Losses

Loans are presented in the Consolidated Statements of Financial Condition net of deferred fees and costs, and discounts related to purchased loans. Net deferred fees were $8.3 million and $6.0 million as of March 31, 2021 and December 31, 2020, respectively, and discounts on purchased loans were $6.8 million and $7.0 million at March 31, 2021 and December 31, 2020, respectively. The following table provides outstanding balances related to each of our loan types:

	March 31, 2021		December 31, 2020
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,555,671	$	1,555,986
Time and demand	1,541,280		1,541,382
Commercial credit cards	14,391		14,604
Real estate construction	404,580		427,221
Residential real estate	1,756,615		1,750,592
Residential first lien	1,152,314		1,144,323
Residential junior lien/home equity	604,301		606,269
Commercial real estate	2,167,506		2,211,569
Multifamily	363,604		371,239
Nonowner occupied	1,393,968		1,421,151
Owner occupied	409,934		419,179
Loans to individuals	852,522		815,815
Automobile	759,061		712,800
Consumer credit cards	10,901		12,360
Consumer other	82,560		90,655
Total loans	$	6,736,894	$	6,761,183

In the table above, Commercial, financial, agricultural and other loans at March 31, 2021 and December 31, 2020 includes $478.5 million and $478.9 million, respectively, in Paycheck Protection Program ("PPP") loans for small businesses who meet the necessary eligibility requirements. PPP loans are 100% guaranteed by the Small Business Administration ("SBA") under the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act") and are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted purposes in accordance with the PPP requirements. Because PPP loans are fully guaranteed by the SBA, there is no allowance for credit losses recognized for these loans. Although the Company believes that

the majority of these loans will ultimately be forgiven by the SBA in accordance with the terms of the program, there could be risks and liability to the Company associated with participation in the program.

On March 27, 2020, the CARES Act was signed into law, providing banking organizations with optional, temporary relief from complying with CECL. The Company elected to defer its adoption of CECL until the fourth quarter 2020. At the end of the deferral period, CECL was adopted effective January 1, 2020. The allowance for credit losses for the interim period ending March 31, 2020, was calculated in accordance with previously applicable GAAP.

First Commonwealth’s loan portfolio includes five primary loan categories. When calculating the allowance for credit losses these categories are classified into eleven portfolio segments. The composition of loans by portfolio segment includes:

Commercial, financial, agricultural and other

Time & Demand - Consists primarily of commercial and industrial loans. This category consists of loans that are typically cash flow dependent and therefore have different risk and loss characteristics than other commercial loans. Loans in this category include revolving and term structures with fixed and variable interest rates. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Commercial Credit Cards - Consists of unsecured credit cards for commercial customers. These commercial credit cards have separate characteristics outside of normal commercial non-real estate loans, as they tend to have shorter overall duration. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Real estate construction

Includes both 1-4 family and commercial construction loans. The risk and loss characteristics of the construction category are different than other real estate secured categories due to the collateral being at various stages of completion. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and measures of completed construction projects.

Residential real estate

Residential first lien - Consists of loans with collateral of 1-4 family residencies with a senior lien position. The risk and loss characteristics are unique for this group because the collateral for these loans are the borrower’s primary residence. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values.

Residential Junior Lien/Home Equity - Consists of loans with collateral of 1-4 family residencies with an open end line of credit or junior lien position. The junior lien position for the majority of these loans provides a higher risk of loss than other residential real estate loans. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and residential property values.

Commercial real estate

Multifamily - Consists of loans secured by commercial multifamily properties. Real estate related to rentals to consumers could provide unique risk and loss characteristics. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of commercial real estate values and rental vacancy.

Nonowner Occupied - Consists of loans secured by commercial real estate non-owner occupied and provides different loss characteristics than other real estate categories. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Owner Occupied - Consists of loans secured by commercial real estate owner occupied properties. The risk and loss characteristics of this category were considered different than other real estate categories because it is owner occupied and would impact the ability to conduct business. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of national unemployment and economic conditions measured by GDP.

Loans to individuals

Automobile - Consists of both direct and indirect loans with automobiles and recreational vehicles held as collateral. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and automobile retention value.

Consumer Credit Cards – Consists of unsecured consumer credit cards The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and economic conditions measured by GDP.

Other Consumer - Consists of lines of credit, student loans and other consumer loans, not secured by real estate or autos. The primary macroeconomic drivers for estimating credit losses for this category include forecasts of consumer sentiment and the level of household debt.

The allowance for credit losses is calculated by pooling loans of similar credit risk characteristics and applying a discounted cash flow methodology after incorporating probability of default and loss given default estimates. Probability of default represents an estimate of the likelihood of default and loss given default measures the expected loss upon default. Inputs impacting the expected losses include a forecast of macroeconomic factors, using a weighted forecast from a nationally recognized firm. Our model incorporates a one-year forecast of macroeconomic factors, after which the factors revert back to the historical mean over a one-year period. The most significant macroeconomic factor used in estimating credit losses is the national unemployment rate. The forecasted value for national unemployment at March 31, 2021 was 6.24% and during the one-year forecast period it was projected to average 5.54%, with a peak of 6.02%.

Credit Quality Information

As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our loans:

Pass	Acceptable levels of risk exist in the relationship. Includes all loans not classified as OAEM, substandard or doubtful.
Other Assets Especially Mentioned (OAEM)	Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Company’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected.
Substandard	Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard.
Doubtful	Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable.

The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance.

The following tables represent our credit risk profile by creditworthiness:

	March 31, 2021
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,499,180	$	36,188	$	20,303	$	—	$	—	$	56,491	$	1,555,671
Time and demand	1,484,789		36,188		20,303		—		—		56,491		1,541,280
Commercial credit cards	14,391		—		—		—		—		—		14,391
Real estate construction	404,044		482		54		—		—		536		404,580
Residential real estate	1,747,310		1,678		7,627		—		—		9,305		1,756,615
Residential first lien	1,146,787		1,562		3,965		—		—		5,527		1,152,314
Residential junior lien/home equity	600,523		116		3,662		—		—		3,778		604,301
Commercial real estate	1,962,008		161,769		43,729		—		—		205,498		2,167,506
Multifamily	362,937		128		539		—		—		667		363,604
Nonowner occupied	1,206,587		150,850		36,531		—		—		187,381		1,393,968
Owner occupied	392,484		10,791		6,659		—		—		17,450		409,934
Loans to individuals	852,209		—		313		—		—		313		852,522
Automobile	758,824		—		237		—		—		237		759,061
Consumer credit cards	10,901		—		—		—		—		—		10,901
Consumer other	82,484		—		76		—		—		76		82,560
Total loans	$	6,464,751	$	200,117	$	72,026	$	—	$	—	$	272,143	$	6,736,894

	December 31, 2020
			Non-Pass
	Pass		OAEM		Substandard		Doubtful		Loss		Total Non-Pass		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,491,916	$	48,233	$	15,837	$	—	$	—	$	64,070	$	1,555,986
Time and demand	1,477,312		48,233		15,837		—		—		64,070		1,541,382
Commercial credit cards	14,604		—		—		—		—		—		14,604
Real estate construction	426,663		504		54		—		—		558		427,221
Residential real estate	1,740,992		1,902		7,698		—		—		9,600		1,750,592
Residential first lien	1,138,409		1,780		4,134		—		—		5,914		1,144,323
Residential junior lien/home equity	602,583		122		3,564		—		—		3,686		606,269
Commercial real estate	1,983,258		175,995		52,316		—		—		228,311		2,211,569
Multifamily	369,883		131		1,225		—		—		1,356		371,239
Nonowner occupied	1,216,252		161,336		43,563		—		—		204,899		1,421,151
Owner occupied	397,123		14,528		7,528		—		—		22,056		419,179
Loans to individuals	815,541		—		274		—		—		274		815,815
Automobile	712,539		—		261		—		—		261		712,800
Consumer credit cards	12,360		—		—		—		—		—		12,360
Consumer other	90,642		—		13		—		—		13		90,655
Total loans	$	6,458,370	$	226,634	$	76,179	$	—	$	—	$	302,813	$	6,761,183

The following table summarizes the loan risk rating category by loan type including term loans on an amortized cost basis by origination year:

	March 31, 2021
	Term Loans												Revolving Loans
	2021		2020		2019		2018		2017		Prior				Total
	(dollars in thousands)
Time and demand	$	257,058	$	396,576	$	189,596	$	122,119	$	66,911	$	144,948	$	364,072	$	1,541,280
Pass	257,058		396,448		186,044		121,121		58,332		122,354		343,432		1,484,789
OAEM	—		92		3,182		407		2,208		14,292		16,007		36,188
Substandard	—		36		370		591		6,371		8,302		4,633		20,303
Commercial credit cards	—		—		—		—		—		—		14,391		14,391
Pass	—		—		—		—		—		—		14,391		14,391
Real estate construction	9,316		180,780		126,114		70,292		14,708		1,726		1,644		404,580
Pass	9,316		180,780		126,114		70,292		14,708		1,442		1,392		404,044
OAEM	—		—		—		—		—		230		252		482
Substandard	—		—		—		—		—		54		—		54
Residential first lien	83,849		331,249		165,945		122,959		99,601		346,732		1,979		1,152,314
Pass	83,849		331,226		165,945		122,578		99,536		341,751		1,902		1,146,787
OAEM	—		—		—		79		—		1,406		77		1,562
Substandard	—		23		—		302		65		3,575		—		3,965
Residential junior lien/home equity	6,749		2,922		5,294		4,154		1,801		7,763		575,618		604,301
Pass	6,749		2,922		5,211		4,154		1,801		7,522		572,164		600,523
OAEM	—		—		—		—		—		106		10		116
Substandard	—		—		83		—		—		135		3,444		3,662
Multifamily	7,020		76,288		16,794		70,837		79,170		112,089		1,406		363,604
Pass	7,020		76,288		16,794		70,837		79,170		111,422		1,406		362,937
OAEM	—		—		—		—		—		128		—		128
Substandard	—		—		—		—		—		539		—		539
Nonowner occupied	19,627		99,280		202,069		166,231		206,739		693,120		6,902		1,393,968
Pass	19,627		99,280		196,474		156,236		164,325		564,024		6,621		1,206,587
OAEM	—		—		5,595		9,995		35,497		99,636		127		150,850
Substandard	—		—		—		—		6,917		29,460		154		36,531
Owner occupied	13,323		57,587		66,580		55,783		39,600		172,403		4,658		409,934
Pass	13,323		55,839		65,010		53,992		38,257		161,623		4,440		392,484
OAEM	—		1,748		672		986		1,319		6,033		33		10,791
Substandard	—		—		898		805		24		4,747		185		6,659
Automobile	116,255		329,579		181,901		82,762		36,407		12,157		—		759,061
Pass	116,255		329,579		181,809		82,745		36,378		12,058		—		758,824
Substandard	—		—		92		17		29		99		—		237
Consumer credit cards	—		—		—		—		—		—		10,901		10,901
Pass	—		—		—		—		—		—		10,901		10,901
Consumer other	1,087		6,882		12,760		9,023		1,523		6,600		44,685		82,560
Pass	1,087		6,882		12,760		9,023		1,523		6,554		44,655		82,484
Substandard	—		—		—		—		—		46		30		76
Total	$	514,284	$	1,481,143	$	967,053	$	704,160	$	546,460	$	1,497,538	$	1,026,256	$	6,736,894

	December 31, 2020
	Term Loans												Revolving Loans
	2020		2019		2018		2017		2016		Prior				Total
	(dollars in thousands)
Time and demand	$	598,053	$	193,601	$	142,224	$	72,277	$	74,228	$	83,313	$	377,686	$	1,541,382
Pass	597,405		189,834		140,473		63,137		68,007		65,418		353,038		1,477,312
OAEM	93		3,373		972		8,820		6,182		8,043		20,750		48,233
Substandard	555		394		779		320		39		9,852		3,898		15,837
Commercial credit cards	—		—		—		—		—		—		14,604		14,604
Pass	—		—		—		—		—		—		14,604		14,604
Real estate construction	150,493		133,195		104,167		34,803		389		1,009		3,165		427,221
Pass	150,493		133,195		104,167		34,803		389		709		2,907		426,663
OAEM	—		—		—		—		—		246		258		504
Substandard	—		—		—		—		—		54		—		54
Residential first lien	316,052		184,550		142,823		110,365		91,495		297,057		1,981		1,144,323
Pass	316,028		184,533		142,467		110,260		91,059		292,158		1,904		1,138,409
OAEM	—		—		83		—		100		1,520		77		1,780
Substandard	24		17		273		105		336		3,379		—		4,134
Residential junior lien/home equity	3,055		5,783		4,545		2,005		1,303		7,127		582,451		606,269
Pass	3,055		5,698		4,545		2,005		1,303		6,909		579,068		602,583
OAEM	—		—		—		—		—		112		10		122
Substandard	—		85		—		—		—		106		3,373		3,564
Multifamily	76,249		16,287		69,439		66,963		34,383		106,328		1,590		371,239
Pass	76,249		16,287		69,439		66,963		34,383		104,972		1,590		369,883
OAEM	—		—		—		—		—		131		—		131
Substandard	—		—		—		—		—		1,225		—		1,225
Nonowner occupied	105,861		199,280		161,018		214,915		217,883		518,052		4,142		1,421,151
Pass	105,861		190,301		139,643		181,659		175,148		419,900		3,740		1,216,252
OAEM	—		8,979		21,375		26,339		37,762		66,752		129		161,336
Substandard	—		—		—		6,917		4,973		31,400		273		43,563
Owner occupied	59,519		72,313		61,079		40,796		27,415		152,555		5,502		419,179
Pass	58,551		70,726		55,478		39,351		26,359		141,376		5,282		397,123
OAEM	968		684		4,736		1,421		114		6,572		33		14,528
Substandard	—		903		865		24		942		4,607		187		7,528
Automobile	350,293		202,923		96,355		45,218		14,285		3,726		—		712,800
Pass	350,293		202,827		96,336		45,187		14,255		3,641		—		712,539
Substandard	—		96		19		31		30		85		—		261
Consumer credit cards	—		—		—		—		—		—		12,360		12,360
Pass	—		—		—		—		—		—		12,360		12,360
Consumer other	7,814		14,464		10,752		1,965		711		6,383		48,566		90,655
Pass	7,814		14,464		10,752		1,965		711		6,373		48,563		90,642
Substandard	—		—		—		—		—		10		3		13
Total	$	1,667,389	$	1,022,396	$	792,402	$	589,307	$	462,092	$	1,175,550	$	1,052,047	$	6,761,183

Portfolio Risks

The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting loans. Credit administration is independent of lending departments and oversight is provided by the Credit Committee of the First Commonwealth Board of Directors.

Total gross charge-offs for the three months ended March 31, 2021 and 2020 were $3.3 million and $3.5 million, respectively.

Age Analysis of Past Due Loans by Segment

The following tables delineate the aging analysis of the recorded investments in past due loans as of March 31, 2021 and December 31, 2020. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.

	March 31, 2021
	30 - 59 days past due			60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	155		$	31	$	6	$	8,729	$	8,921	$	1,546,750	$	1,555,671
Time and demand	78			19		—		8,729		8,826		1,532,454		1,541,280
Commercial credit cards	77		1	12		6		—		95		14,296		14,391
Real estate construction	—			—		—		54		54		404,526		404,580
Residential real estate	3,407			681		482		6,806		11,376		1,745,239		1,756,615
Residential first lien	1,703			378		228		3,367		5,676		1,146,638		1,152,314
Residential junior lien/home equity	1,704			303		254		3,439		5,700		598,601		604,301
Commercial real estate	671			154		—		27,782		28,607		2,138,899		2,167,506
Multifamily	—			—		—		459		459		363,145		363,604
Nonowner occupied	154			102		—		25,018		25,274		1,368,694		1,393,968
Owner occupied	517			52		—		2,305		2,874		407,060		409,934
Loans to individuals	1,198			540		591		313		2,642		849,880		852,522
Automobile	775		1	266		87		237		1,365		757,696		759,061
Consumer credit cards	58			56		42		—		156		10,745		10,901
Consumer other	365			218		462		76		1,121		81,439		82,560
Total loans	$	5,431		$	1,406	$	1,079	$	43,684	$	51,600	$	6,685,294	$	6,736,894

	December 31, 2020
	30 - 59 days past due			60 - 89 days past due		90 days or greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	146		$	62	$	112	$	3,317	$	3,637	$	1,552,349	$	1,555,986
Time and demand	97			28		23		3,317		3,465		1,537,917		1,541,382
Commercial credit cards	49		1	34		89		—		172		14,432		14,604
Real estate construction	936			—		—		54		990		426,231		427,221
Residential real estate	3,883			1,492		769		6,824		12,968		1,737,624		1,750,592
Residential first lien	1,775			660		267		3,489		6,191		1,138,132		1,144,323
Residential junior lien/home equity	2,108			832		502		3,335		6,777		599,492		606,269
Commercial real estate	237			160		3		35,072		35,472		2,176,097		2,211,569
Multifamily	—			—		—		460		460		370,779		371,239
Nonowner occupied	18			104		—		31,822		31,944		1,389,207		1,421,151
Owner occupied	219			56		3		2,790		3,068		416,111		419,179
Loans to individuals	2,870			852		639		274		4,635		811,180		815,815
Automobile	2,090		1	417		94		261		2,862		709,938		712,800
Consumer credit cards	52			39		123		—		214		12,146		12,360
Consumer other	728			396		422		13		1,559		89,096		90,655
Total loans	$	8,072		$	2,566	$	1,523	$	45,541	$	57,702	$	6,703,481	$	6,761,183

Nonaccrual Loans

The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans, which are placed on nonaccrual status at 150 days past due.

When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal becomes current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt.

Nonperforming Loans

Management considers loans to be nonperforming when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Nonperforming loans include nonaccrual loans and all troubled debt restructured loans. When management identifies a loan as nonperforming, the credit loss is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source for repayment of the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the loan is less than the recorded investment in the loan, a credit loss is recognized through an allowance estimate or a charge-off to the allowance for credit losses.

When the ultimate collectability of the total principal of a nonperforming loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal, under the cost recovery method. When the ultimate collectability of the total principal of a nonperforming loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method.

At March 31, 2021, there were no nonperforming loans held for sale. At December 31, 2020, there was one nonperforming loan totaling $13 thousand. During the three months ended March 31, 2021, a $5.0 million nonperforming relationship was

transferred to held for sale and sold resulting in a $0.4 million gain. During the three months ended March 31, 2020, there were no gains recognized on the sale of nonperforming loans.

The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of March 31, 2021 and December 31, 2020. Also presented are the average recorded investment in nonperforming loans and the related amount of interest recognized while the loan was considered nonperforming. Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position.

	March 31, 2021						December 31, 2020
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	1,780	$	7,659			$	2,025	$	2,725
Time and demand	1,780		7,659				2,025		2,725
Real estate construction	54		53				54		53
Residential real estate	10,814		13,199				10,939		13,258
Residential first lien	5,856		7,402				6,062		7,575
Residential junior lien/home equity	4,958		5,797				4,877		5,683
Commercial real estate	20,653		22,754				20,650		23,641
Multifamily	—		—				1		82
Nonowner occupied	18,125		19,933				16,786		19,459
Owner occupied	2,528		2,821				3,863		4,100
Loans to individuals	505		546				418		447
Automobile	429		465				405		430
Consumer other	76		81				13		17
Subtotal	33,806		44,211				34,086		40,124
With an allowance recorded:
Commercial, financial, agricultural and other	8,957		9,038		2,506		4,210		9,377		1,268
Time and demand	8,957		9,038		2,506		4,210		9,377		1,268
Real estate construction	—		—		—		—		—		—
Residential real estate	—		—		—		—		—		—
Residential first lien	—		—		—		—		—		—
Residential junior lien/home equity	—		—		—		—		—		—
Commercial real estate	7,618		7,693		601		15,757		15,830		3,638
Multifamily	459		473		115		459		470		116
Nonowner occupied	6,917		6,979		459		15,060		15,122		3,508
Owner occupied	242		241		27		238		238		14
Loans to individuals	—		—		—		—		—		—
Automobile	—		—		—		—		—		—
Consumer other	—		—		—		—		—		—
Subtotal	16,575		16,731		3,107		19,967		25,207		4,906
Total	$	50,381	$	60,942	$	3,107	$	54,053	$	65,331	$	4,906

	For the Three Months Ended March 31,
	2021				2020
	Total Loans				Originated Loans				Acquired Loans
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	2,280	$	11	$	925	$	4	$	74	$	—
Time and demand	2,280		11
Real estate construction	54		—		—		—		—		—
Residential real estate	10,892		63		10,529		78		2,090		2
Residential first lien	5,982		45
Residential junior lien/home equity	4,910		18
Commercial real estate	25,739		22		4,086		22		229		—
Multifamily	—		—
Nonowner occupied	22,593		7
Owner occupied	3,146		15
Loans to individuals	479		2		445		3		12		—
Automobile	437		2
Consumer other	42		—
Subtotal	39,444		98		15,985		107		2,405		2
With an allowance recorded:
Commercial, financial, agricultural and other	4,895		18		7,838		18		—		—
Time and demand	4,895		18
Real estate construction	—		—		—		—		—		—
Residential real estate	—		—		325		—		—		—
Residential first lien	—		—
Residential junior lien/home equity	—		—
Commercial real estate	7,462		—		13,114		1		616		—
Multifamily	464		—
Nonowner occupied	6,917		—
Owner occupied	81		—
Loans to individuals	—		—		—		—		—		—
Automobile	—		—
Consumer other	—		—
Subtotal	12,357		18		21,277		19		616		—
Total	$	51,801	$	116	$	37,262	$	126	$	3,021	$	2

Unfunded commitments related to nonperforming loans were $0.2 million at both March 31, 2021 and December 31, 2020. After consideration of the requirements to draw and available collateral related to these commitments, a reserve of $6 thousand and $26 thousand was established for these off balance sheet exposures at March 31, 2021 and December 31, 2020, respectively.

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as result of the financial difficulties experienced by the borrower, who could not obtain comparable terms from alternative financing sources. Troubled debt restructured loans are considered to be nonperforming loans.

In March 2020, the Company began offering short-term loan modifications to assist borrowers during the COVID-19 national emergency. These modifications typically provide for the deferral of both principal and interest for 90 days. The CARES Act, along with a joint agency statement issued by banking regulators, provides that short-term modifications, meeting certain criteria and in response to COVID-19, do not need to be accounted for as a troubled debt restructured loans. Additionally, short-term loan modifications that are not accounted for as a troubled debt restructured loan, in accordance with the CARES Act, would remain classified as current during the deferral period and therefore are not reflected in the past due loan tables provided on the prior page. As of March 31, 2021, loans with an aggregate principal balance of $136.6 million were in a forbearance period granted under the CARES Act.

The following table provides detail as to the total troubled debt restructured loans and total commitments outstanding on troubled debt restructured loans:

	March 31, 2021		December 31, 2020
	(dollars in thousands)
Troubled debt restructured loans
Accrual status	$	6,697	$	8,512
Nonaccrual status	20,628		14,740
Total	$	27,325	$	23,252
Commitments
Letters of credit	$	60	$	60
Unused lines of credit	12		11
Total	$	72	$	71

The following tables provide detail, including specific reserves and reasons for modification, related to loans identified as troubled debt restructurings:

	For the Three Months Ended March 31, 2021
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	2	$	6,373	$	—	$	—	$	6,373	$	6,339	$	1,190
Time and demand	2	6,373		—		—		6,373		6,339		1,190
Residential real estate	3	—		105		14		119		119		—
Residential first lien	2	—		105		—		105		106		—
Residential junior lien/home equity	1	—		—		14		14		13		—
Loans to individuals	2	—		64		—		64		61		—
Automobile	2	—		64		—		64		61		—
Total	7	$	6,373	$	169	$	14	$	6,556	$	6,519	$	1,190

	For the Three Months Ended March 31, 2020
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Residential real estate	2	—		—		118		118		117		—
Commercial real estate	2	—		—		12		12		12		—
Loans to individuals	8	—		18		129		147		144		—
Total	12	$	—	$	18	$	259	$	277	$	273	$	—

The troubled debt restructurings included in the above tables are also included in the nonperforming loan tables provided earlier in this note. Loans defined as modified due to a change in rate may include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For the three months ended March 31, 2021 and 2020, $169 thousand and $18 thousand, respectively, of total rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. For both 2021 and 2020 the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

A troubled debt restructuring is considered to be in default when a restructured loan is 90 days or more past due. The following table provides information related to loans that were restructured within the past twelve months and that were considered to be in default during the three months ended March 31:

	2021			2020
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(dollars in thousands)
Residential real estate	—	$	—	1	$	71
Total	—	$	—	1	$	71

The following tables provide detail related to the allowance for credit losses:

	For the Three Months Ended March 31, 2021
	Beginning balance			Charge-offs		Recoveries		Provision (credit)a		Ending balance
	(dollars in thousands)
Commercial, financial, agricultural and other	$	17,187		$	(569)	$	90	$	5,093	$	21,801
Time and demand	16,838			(460)		89		4,960		21,427
Commercial credit cards	349			(109)		1		133		374
Real estate construction	7,966			—		—		(3,945)		4,021
Residential real estate	14,358		—	(105)		37		(1,461)		12,829
Residential first lien	7,919			(23)		23		(692)		7,227
Residential junior lien/home equity	6,439			(82)		14		(769)		5,602
Commercial real estate	41,953			(1,550)		39		(2,774)		37,668
Multifamily	6,240			(1)		—		(1,988)		4,251
Nonowner occupied	28,414			(1,549)		39		985		27,889
Owner occupied	7,299		—	—		—		(1,771)		5,528
Loans to individuals	19,845			(1,541)		329		1,811		20,444
Automobile	16,133			(680)		181		1,254		16,888
Consumer credit cards	635			(168)		17		205		689
Consumer other	3,077			(693)		131		352		2,867
Total loans	$	101,309		$	(3,765)	$	495	$	(1,276)	$	96,763

a) The provision expense(credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.

	For the Three Months Ended March 31, 2021
							Loans
	Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses		Ending balance		Ending balance: individually evaluated for credit losses		Ending balance: collectively evaluated for credit losses
	(dollars in thousands)
Commercial, financial, agricultural and other	$	21,801	$	2,506	$	19,295	$	1,555,671	$	9,991	$	1,545,680
Time and demand	21,427		2,506		18,921		1,541,280		9,991		1,531,289
Commercial credit cards	374		—		374		14,391		—		14,391
Real estate construction	4,021		—		4,021		404,580		—		404,580
Residential real estate	12,829		—		12,829		1,756,615		1,055		1,755,560
Residential first lien	7,227		—		7,227		1,152,314		512		1,151,802
Residential junior lien/home equity	5,602		—		5,602		604,301		543		603,758
Commercial real estate	37,668		601		37,067		2,167,506		27,413		2,140,093
Multifamily	4,251		115		4,136		363,604		459		363,145
Nonowner occupied	27,889		459		27,430		1,393,968		24,883		1,369,085
Owner occupied	5,528		27		5,501		409,934		2,071		407,863
Loans to individuals	20,444		—		20,444		852,522		—		852,522
Automobile	16,888		—		16,888		759,061		—		759,061
Consumer credit cards	689		—		689		10,901		—		10,901
Consumer other	2,867		—		2,867		82,560		—		82,560
Total loans	$	96,763	$	3,107	$	93,656	$	6,736,894	$	38,459	$	6,698,435

	For the Three Months Ended March 31, 2020
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	20,221	$	2,558	$	4,091	$	19,731	$	4,984	$	51,585
Charge-offs	(486)		—		(552)		(265)		(2,483)		(3,786)
Recoveries	68		—		62		44		212		386
Provision (credit)	7,575		294		4,123		11,755		5,555		29,302
Ending balance	27,378		2,852		7,724		31,265		8,268		77,487
Acquired loans:
Beginning balance	13		—		2		37		—		52
Charge-offs	—		—		(25)		(1)		(136)		(162)
Recoveries	13		—		13		—		7		33
Provision (credit)	324		—		10		1,202		129		1,665
Ending balance	350		—		—		1,238		—		1,588
Total ending balance	$	27,728	$	2,852	$	7,724	$	32,503	$	8,268	$	79,075
Ending balance: individually evaluated for impairment	$	2,727	$	—	$	—	$	7,072	$	—	$	9,799
Ending balance: collectively evaluated for impairment	25,001		2,852		7,724		25,431		8,268		69,276
Loans:
Ending balance	1,272,240		413,458		1,691,140		2,190,098		747,008		6,313,944
Ending balance: individually evaluated for impairment	7,544		—		1,506		36,513		—		45,563
Ending balance: collectively evaluated for impairment	1,264,696		413,458		1,689,634		2,153,585		747,008		6,268,381