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Loans and Allowance for Credit Losses
 9 Months Ended
Sep. 30, 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 $2.6 million and $6.0 million as of September 30, 2021 and December 31, 2020, respectively, and discounts on purchased loans were $6.3 million and $7.0 million at September 30, 2021 and December 31, 2020, respectively. The following table provides outstanding balances related to each of our loan types:
 
September 30, 2021December 31, 2020
 (dollars in thousands)
Commercial, financial, agricultural and other$1,224,591 $1,555,986 
Time and demand1,210,694 1,541,382 
Commercial credit cards13,897 14,604 
Real estate construction424,016 427,221 
Residential real estate1,875,375 1,750,592 
Residential first lien1,254,142 1,144,323 
Residential junior lien/home equity621,233 606,269 
Commercial real estate2,231,890 2,211,569 
Multifamily405,720 371,239 
Nonowner occupied1,442,845 1,421,151 
Owner occupied383,325 419,179 
Loans to individuals976,708 815,815 
Automobile886,367 712,800 
Consumer credit cards10,617 12,360 
Consumer other79,724 90,655 
Total loans$6,732,580 $6,761,183 
In the table above, Commercial, financial, agricultural and other loans at September 30, 2021 and December 31, 2020 includes $152.1 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 September 30, 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 September 30, 2021 was 5.13% and during the one-year forecast period it was projected to average 5.00%, with a peak of 5.13%.
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.
SubstandardWell-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.
DoubtfulLoans 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:
 September 30, 2021
Non-Pass
PassOAEMSubstandardDoubtfulLossTotal Non-PassTotal
(dollars in thousands)
Commercial, financial, agricultural and other$1,185,987 $12,318 $26,286 $— $— $38,604 $1,224,591 
Time and demand1,172,090 12,318 26,286 — — 38,604 1,210,694 
Commercial credit cards13,897 — — — — — 13,897 
Real estate construction422,668 1,294 54 — — 1,348 424,016 
Residential real estate1,867,190 1,516 6,669 — — 8,185 1,875,375 
Residential first lien1,249,248 1,444 3,450 — — 4,894 1,254,142 
Residential junior lien/home equity617,942 72 3,219 — — 3,291 621,233 
Commercial real estate2,084,476 121,883 25,531 — — 147,414 2,231,890 
Multifamily390,579 14,635 506 — — 15,141 405,720 
Nonowner occupied1,323,095 99,917 19,833 — — 119,750 1,442,845 
Owner occupied370,802 7,331 5,192 — — 12,523 383,325 
Loans to individuals976,468 — 240 — — 240 976,708 
Automobile886,183 — 184 — — 184 886,367 
Consumer credit cards10,617 — — — — — 10,617 
Consumer other79,668 — 56 — — 56 79,724 
Total loans$6,536,789 $137,011 $58,780 $— $— $195,791 $6,732,580 
 
 December 31, 2020
Non-Pass
PassOAEMSubstandardDoubtfulLossTotal Non-PassTotal
(dollars in thousands)
Commercial, financial, agricultural and other$1,491,916 $48,233 $15,837 $— $— $64,070 $1,555,986 
Time and demand1,477,312 48,233 15,837 — — 64,070 1,541,382 
Commercial credit cards14,604 — — — — — 14,604 
Real estate construction426,663 504 54 — — 558 427,221 
Residential real estate1,740,992 1,902 7,698 — — 9,600 1,750,592 
Residential first lien1,138,409 1,780 4,134 — — 5,914 1,144,323 
Residential junior lien/home equity602,583 122 3,564 — — 3,686 606,269 
Commercial real estate1,983,258 175,995 52,316 — — 228,311 2,211,569 
Multifamily369,883 131 1,225 — — 1,356 371,239 
Nonowner occupied1,216,252 161,336 43,563 — — 204,899 1,421,151 
Owner occupied397,123 14,528 7,528 — — 22,056 419,179 
Loans to individuals815,541 — 274 — — 274 815,815 
Automobile712,539 — 261 — — 261 712,800 
Consumer credit cards12,360 — — — — — 12,360 
Consumer other90,642 — 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:
September 30, 2021
Term LoansRevolving Loans
20212020201920182017PriorTotal
(dollars in thousands)
Time and demand$305,101 $127,699 $145,265 $100,018 $54,657 $118,361 $359,593 $1,210,694 
Pass305,081 127,623 126,211 99,050 51,866 109,244 353,015 1,172,090 
OAEM— 75 1,173 816 67 7,323 2,864 12,318 
Substandard20 1 17,881 152 2,724 1,794 3,714 26,286 
Commercial credit cards— — — — — — 13,897 13,897 
Pass— — — — — — 13,897 13,897 
Real estate construction109,671 145,193 118,290 48,963 455 936 508 424,016 
Pass109,647 143,923 118,290 48,963 455 882 508 422,668 
OAEM24 1,270 — — — — — 1,294 
Substandard— — — — — 54 — 54 
Residential first lien280,135 372,184 138,407 95,498 81,299 284,645 1,974 1,254,142 
Pass280,124 372,164 138,236 95,081 81,160 280,586 1,897 1,249,248 
OAEM— — — 71 — 1,296 77 1,444 
Substandard11 20 171 346 139 2,763 — 3,450 
Residential junior lien/home equity42,602 2,207 3,682 3,038 1,161 6,297 562,246 621,233 
Pass42,602 2,207 3,604 3,038 1,161 6,141 559,189 617,942 
OAEM— — — — — 62 10 72 
Substandard— — 78 — — 94 3,047 3,219 
Multifamily81,608 80,628 16,466 54,180 65,075 106,420 1,343 405,720 
Pass81,608 80,628 16,466 54,180 50,974 105,380 1,343 390,579 
OAEM— — — — 14,101 534 — 14,635 
Substandard— — — — — 506 — 506 
Nonowner occupied113,742 111,404 198,003 163,617 195,894 655,679 4,506 1,442,845 
Pass113,742 111,404 198,003 145,792 163,703 587,138 3,313 1,323,095 
OAEM— — — 17,825 25,274 55,781 1,037 99,917 
Substandard— — — — 6,917 12,760 156 19,833 
Owner occupied49,257 59,485 56,875 34,738 33,796 143,789 5,385 383,325 
Pass49,257 57,858 54,392 34,212 32,449 137,363 5,271 370,802 
OAEM— 1,414 1,239 526 1,323 2,796 33 7,331 
Substandard— 213 1,244 — 24 3,630 81 5,192 
Automobile384,494 276,368 139,680 57,986 22,494 5,345 — 886,367 
Pass384,494 276,368 139,599 57,956 22,487 5,279 — 886,183 
Substandard— — 81 30 7 66 — 184 
Consumer credit cards— — — — — — 10,617 10,617 
Pass— — — — — — 10,617 10,617 
Consumer other10,223 5,288 9,439 6,166 854 5,793 41,961 79,724 
Pass10,223 5,288 9,439 6,166 854 5,749 41,949 79,668 
Substandard— — — — — 44 12 56 
Total$1,376,833 $1,180,456 $826,107 $564,204 $455,685 $1,327,265 $1,002,030 $6,732,580 
December 31, 2020
Term LoansRevolving Loans
20202019201820172016PriorTotal
(dollars in thousands)
Time and demand$598,053 $193,601 $142,224 $72,277 $74,228 $83,313 $377,686 $1,541,382 
Pass597,405 189,834 140,473 63,137 68,007 65,418 353,038 1,477,312 
OAEM93 3,373 972 8,820 6,182 8,043 20,750 48,233 
Substandard555 394 779 320 39 9,852 3,898 15,837 
Commercial credit cards— — — — — — 14,604 14,604 
Pass— — — — — — 14,604 14,604 
Real estate construction150,493 133,195 104,167 34,803 389 1,009 3,165 427,221 
Pass150,493 133,195 104,167 34,803 389 709 2,907 426,663 
OAEM— — — — — 246 258 504 
Substandard— — — — — 54 — 54 
Residential first lien316,052 184,550 142,823 110,365 91,495 297,057 1,981 1,144,323 
Pass316,028 184,533 142,467 110,260 91,059 292,158 1,904 1,138,409 
OAEM— — 83 — 100 1,520 77 1,780 
Substandard24 17 273 105 336 3,379 — 4,134 
Residential junior lien/home equity3,055 5,783 4,545 2,005 1,303 7,127 582,451 606,269 
Pass3,055 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 
Multifamily76,249 16,287 69,439 66,963 34,383 106,328 1,590 371,239 
Pass76,249 16,287 69,439 66,963 34,383 104,972 1,590 369,883 
OAEM— — — — — 131 — 131 
Substandard— — — — — 1,225 — 1,225 
Nonowner occupied105,861 199,280 161,018 214,915 217,883 518,052 4,142 1,421,151 
Pass105,861 190,301 139,643 181,659 175,148 419,900 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 occupied59,519 72,313 61,079 40,796 27,415 152,555 5,502 419,179 
Pass58,551 70,726 55,478 39,351 26,359 141,376 5,282 397,123 
OAEM968 684 4,736 1,421 114 6,572 33 14,528 
Substandard— 903 865 24 942 4,607 187 7,528 
Automobile350,293 202,923 96,355 45,218 14,285 3,726 — 712,800 
Pass350,293 202,827 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 other7,814 14,464 10,752 1,965 711 6,383 48,566 90,655 
Pass7,814 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 net charge-offs for the nine months ended September 30, 2021 and 2020 were $9.5 million and $12.4 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 September 30, 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.
 September 30, 2021
 30 - 59 days past due60 - 89 days past due90 days or greater and still accruingNonaccrualTotal past due and nonaccrualCurrentTotal
 (dollars in thousands)
Commercial, financial, agricultural and other$158 $478 $33 $4,554 $5,223 $1,219,368 $1,224,591 
Time and demand23 459 — 4,554 5,036 1,205,658 1,210,694 
Commercial credit cards135 19 33 — 187 13,710 13,897 
Real estate construction— — — 54 54 423,962 424,016 
Residential real estate3,354 824 411 6,046 10,635 1,864,740 1,875,375 
Residential first lien2,217 272 172 3,036 5,697 1,248,445 1,254,142 
Residential junior lien/home equity1,137 552 239 3,010 4,938 616,295 621,233 
Commercial real estate177 45 — 19,782 20,004 2,211,886 2,231,890 
Multifamily— — — 435 435 405,285 405,720 
Nonowner occupied175 — — 17,783 17,958 1,424,887 1,442,845 
Owner occupied2 45 — 1,564 1,611 381,714 383,325 
Loans to individuals1,751 351 691 240 3,033 973,675 976,708 
Automobile1,363 83 158 184 1,788 884,579 886,367 
Consumer credit cards50 22 25 — 97 10,520 10,617 
Consumer other338 246 508 56 1,148 78,576 79,724 
Total loans$5,440 $1,698 $1,135 $30,676 $38,949 $6,693,631 $6,732,580 
 
 December 31, 2020
 30 - 59 days past due60 - 89 days past due90 days or greater and still accruingNonaccrualTotal past due and nonaccrual CurrentTotal
 (dollars in thousands)
Commercial, financial, agricultural and other$146 $62 $112 $3,317 $3,637 $1,552,349 $1,555,986 
Time and demand97 28 23 3,317 3,465 1,537,917 1,541,382 
Commercial credit cards49 34 89 — 172 14,432 14,604 
Real estate construction936 — — 54 990 426,231 427,221 
Residential real estate3,883 1,492 769 6,824 12,968 1,737,624 1,750,592 
Residential first lien1,775 660 267 3,489 6,191 1,138,132 1,144,323 
Residential junior lien/home equity2,108 832 502 3,335 6,777 599,492 606,269 
Commercial real estate237 160 3 35,072 35,472 2,176,097 2,211,569 
Multifamily— — — 460 460 370,779 371,239 
Nonowner occupied18 104 — 31,822 31,944 1,389,207 1,421,151 
Owner occupied219 56 3 2,790 3,068 416,111 419,179 
Loans to individuals2,870 852 639 274 4,635 811,180 815,815 
Automobile2,090 417 94 261 2,862 709,938 712,800 
Consumer credit cards52 39 123 — 214 12,146 12,360 
Consumer other728 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 September 30, 2021, there were no nonperforming loans held for sale. Subsequent to September 30, 2021, as the result of a borrower initiated sale, a $6.9 million nonperforming commercial real estate loan with a $0.3 million specific reserve was sold
at par. At December 31, 2020, there was one nonperforming loan totaling $13 thousand classified as held for sale. During the nine months ended September 30, 2021, a $5.0 million nonperforming relationship was transferred to held for sale and sold, resulting in a $0.4 million gain. During the nine months ended September 30, 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 September 30, 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.
 September 30, 2021December 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$4,836 $15,308 $2,025 $2,725 
Time and demand4,836 15,308 2,025 2,725 
Real estate construction54 53 54 53 
Residential real estate9,910 12,101 10,939 13,258 
Residential first lien5,599 7,003 6,062 7,575 
Residential junior lien/home equity4,311 5,098 4,877 5,683 
Commercial real estate13,176 13,981 20,650 23,641 
Multifamily— — 1 82 
Nonowner occupied11,531 12,147 16,786 19,459 
Owner occupied1,645 1,834 3,863 4,100 
Loans to individuals498 537 418 447 
Automobile442 476 405 430 
Consumer other56 61 13 17 
Subtotal28,474 41,980 34,086 40,124 
With an allowance recorded:
Commercial, financial, agricultural and other1,899 1,898 $479 4,210 9,377 $1,268 
Time and demand1,899 1,898 479 4,210 9,377 1,268 
Real estate construction— — — — — — 
Residential real estate— — — — — — 
Residential first lien— — — — — — 
Residential junior lien/home equity— — — — — — 
Commercial real estate7,713 7,794 501 15,757 15,830 3,638 
Multifamily435 456 103 459 470 116 
Nonowner occupied6,917 6,979 338 15,060 15,122 3,508 
Owner occupied361 359 60 238 238 14 
Loans to individuals— — — — — — 
Automobile— — — — — — 
Consumer other— — — — — — 
Subtotal9,612 9,692 980 19,967 25,207 4,906 
Total$38,086 $51,672 $980 $54,053 $65,331 $4,906 
 For the Nine Months Ended September 30,
 20212020
Total LoansOriginated LoansAcquired 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$9,266 $50 $4,062 $15 $74 $— 
Time and demand9,266 50 
Real estate construction54 — 6 — 137 — 
Residential real estate10,504 275 10,380 235 1,772 18 
Residential first lien5,734 210 
Residential junior lien/home equity4,770 65 
Commercial real estate20,813 101 13,994 90 1,453 76 
Multifamily— — 
Nonowner occupied18,050 15 
Owner occupied2,763 86 
Loans to individuals486 12 469 9 11 — 
Automobile433 12 
Consumer other53 — 
Subtotal41,123 438 28,911 349 3,447 94 
With an allowance recorded:
Commercial, financial, agricultural and other1,820 50 4,569 45 — — 
Time and demand1,820 50 
Real estate construction— — — — — — 
Residential real estate— — — — — — 
Residential first lien— — 
Residential junior lien/home equity— — 
Commercial real estate7,408 — 13,830 9 — — 
Multifamily451 — 
Nonowner occupied6,917 — 
Owner occupied40 — 
Loans to individuals— — — — — — 
Automobile— — 
Consumer other— — 
Subtotal9,228 50 18,399 54 — — 
Total$50,351 $488 $47,310 $403 $3,447 $94 
For the Three Months Ended September 30,
20212020
Total LoansOriginated LoansAcquired 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$9,858 $3 $1,918 $10 $74 $— 
Time and demand9,858 3 
Real estate construction54 — 18 — 308 — 
Residential real estate10,060 54 10,198 72 1,473 1 
Residential first lien5,558 34 
Residential junior lien/home equity4,502 20 
Commercial real estate15,967 68 14,312 23 1,440 76 
Multifamily— — 
Nonowner occupied13,633 4 
Owner occupied2,334 64 
Loans to individuals504 6 494 3 11 — 
Automobile448 6 
Consumer other56 — 
Subtotal36,443 131 26,940 108 3,306 77 
With an allowance recorded:
Commercial, financial, agricultural and other1,842 19 6,423 16 — — 
Time and demand1,842 19 
Real estate construction— — — — — — 
Residential real estate— — — — — — 
Residential first lien— — 
Residential junior lien/home equity— — 
Commercial real estate7,476 — 17,407 3 — — 
Multifamily439 — 
Nonowner occupied6,917 — 
Owner occupied120 — 
Loans to individuals— — — — — — 
Automobile— — 
Consumer other— — 
Subtotal9,318 19 23,830 19 — — 
Total$45,761 $150 $50,770 $127 $3,306 $77 
Unfunded commitments related to nonperforming loans were $0.2 million at both September 30, 2021 and December 31, 2020. After consideration of the requirements to draw and available collateral related to these commitments, it was determined that no reserve was required at September 30, 2021. At December 31, 2020, a reserve of $26 thousand was established for these off balance sheet exposures.
Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a 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 September 30, 2021, loans with an aggregate principal balance of $29.9 million were in a forbearance period granted under the CARES Act compared to $113.8 million as of December 31, 2020 and $65.4 million as of September 30, 2020.
The following table provides detail as to the total troubled debt restructured loans and total commitments outstanding on troubled debt restructured loans:
September 30, 2021December 31, 2020
 (dollars in thousands)
Troubled debt restructured loans
Accrual status$7,410 $8,512 
Nonaccrual status16,210 14,740 
Total$23,620 $23,252 
Commitments
Letters of credit$60 $60 
Unused lines of credit15 11 
Total$75 $71 
The following tables provide detail, including specific reserves and reasons for modification, related to loans identified as troubled debt restructurings:
 For the Nine Months Ended September 30, 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 other6 $— $— $6,803 $6,803 $2,895 $— 
Time and demand6 — — 6,803 6,803 2,895 — 
Residential real estate13 — 219 301 520 500 — 
Residential first lien10 — 219 171 390 375 — 
Residential junior lien/home equity3 — — 130 130 125 — 
Commercial real estate2 — — 644 644 645 — 
Nonowner occupied2 — — 644 644 645 — 
Loans to individuals7 — 110 63 173 151 — 
Automobile7 — 110 63 173 151 — 
Total28 $— $329 $7,811 $8,140 $4,191 $— 

 For the Nine Months Ended September 30, 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)
Commercial, financial, agricultural and other1 $— $629 $— $629 $625 $489 
Residential real estate16 — 33 844 877 729 — 
Commercial real estate2 — — 12 12 8 — 
Loans to individuals14 — 114 149 263 245 — 
Total33 $— $776 $1,005 $1,781 $1,607 $489 
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 nine months ended September 30, 2021 and 2020, $284 thousand and $766 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.
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 September 30, 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 other5 $— $— $206 $206 $202 $— 
Time and demand5 — — 206 206 202 — 
Residential real estate5 — 113 117 230 221 — 
Residential first lien3 — 113 — 113 109 — 
Residential junior lien/home equity2 — — 117 117 112 — 
Commercial real estate2 — — 644 644 645 — 
Nonowner occupied2 — — 644 644 645 — 
Loans to individuals3 — 17 63 80 76 — 
Automobile3 — 17 63 80 76 — 
Total15 $— $130 $1,030 $1,160 $1,144 $— 

 For the Three Months Ended September 30, 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)
Commercial, financial, agricultural and other1 $— $629 $— $629 $625 $489 
Residential real estate12 — 33 580 613 477 — 
Loans to individuals4 — 43 24 67 63 — 
Total17 $— $705 $604 $1,309 $1,165 $489 

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 September 30, 2021 and 2020, $86 thousand and $694 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 nine months ended September 30:
 20212020
 Number of
Contracts		Recorded
Investment		Number of
Contracts		Recorded
Investment
 (dollars in thousands)
Residential real estate— $— 1 $50 
Commercial real estate— — 1 112 
Loans to individuals— — 2 78 
Total— $— 4 $240 
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 September 30:
 20212020
 Number of
Contracts		Recorded
Investment		Number of
Contracts		Recorded
Investment
 (dollars in thousands)
Commercial real estate— $— 1 $112 
Loans to individuals— — 2 78 
Total— $— 3 $190 
The following tables provide detail related to the allowance for credit losses:
 For the Nine Months Ended September 30, 2021
Beginning balanceCharge-offsRecoveries
Provision (credit)a
Ending balance
(dollars in thousands)
Commercial, financial, agricultural and other$17,187 $(6,522)$299 $6,898 $17,862 
Time and demand16,838 (6,397)292 6,849 17,582 
Commercial credit cards349 (125)7 49 280 
Real estate construction7,966 — 135 (3,768)4,333 
Residential real estate14,358 (130)309 (1,732)12,805 
Residential first lien7,919 (36)206 (632)7,457 
Residential junior lien/home equity6,439 (94)103 (1,100)5,348 
Commercial real estate41,953 (1,659)130 (5,784)34,640 
Multifamily6,240 (1)— (2,408)3,831 
Nonowner occupied28,414 (1,556)120 (880)26,098 
Owner occupied7,299 (102)10 (2,496)4,711 
Loans to individuals19,845 (3,199)1,163 6,736 24,545 
Automobile16,133 (1,399)826 5,642 21,202 
Consumer credit cards635 (372)51 182 496 
Consumer other3,077 (1,428)286 912 2,847 
Total loans$101,309 $(11,510)$2,036 $2,350 $94,185 
a) The provision expense(credit) shown here excludes the provision for off-balance sheet credit exposure included in the income statement.
For the Nine Months Ended September 30, 2021
Loans
Ending balanceEnding balance: individually evaluated for credit lossesEnding balance: collectively evaluated for credit lossesEnding balanceEnding balance: individually evaluated for credit lossesEnding balance: collectively evaluated for credit losses
(dollars in thousands)
Commercial, financial, agricultural and other$17,862 $479 $17,383 $1,224,591 $5,561 $1,219,030 
Time and demand17,582 479 17,103 1,210,694 5,561 1,205,133 
Commercial credit cards280 — 280 13,897 — 13,897 
Real estate construction4,333 — 4,333 424,016 — 424,016 
Residential real estate12,805 — 12,805 1,875,375 254 1,875,121 
Residential first lien7,457 — 7,457 1,254,142 — 1,254,142 
Residential junior lien/home equity5,348 — 5,348 621,233 254 620,979 
Commercial real estate34,640 501 34,139 2,231,890 20,333 2,211,557 
Multifamily3,831 103 3,728 405,720 435 405,285 
Nonowner occupied26,098 338 25,760 1,442,845 18,314 1,424,531 
Owner occupied4,711 60 4,651 383,325 1,584 381,741 
Loans to individuals24,545 — 24,545 976,708 — 976,708 
Automobile21,202 — 21,202 886,367 — 886,367 
Consumer credit cards496 — 496 10,617 — 10,617 
Consumer other2,847 — 2,847 79,724 — 79,724 
Total loans$94,185 $980 $93,205 $6,732,580 $26,148 $6,706,432 
 For the Nine Months Ended September 30, 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(5,166)— (720)(2,415)(4,958)(13,259)
Recoveries161 26 274 154 702 1,317 
Provision (credit)9,936 924 4,607 23,132 8,087 46,686 
Ending balance25,152 3,508 8,252 40,602 8,815 86,329 
Acquired loans:
Beginning balance13 — 2 37 — 52 
Charge-offs— — (213)(2)(287)(502)
Recoveries28 — 38 — 10 76 
Provision (credit)295 — 173 1,607 277 2,352 
Ending balance336 — — 1,642 — 1,978 
Total ending balance$25,488 $3,508 $8,252 $42,244 $8,815 $88,307 
Ending balance: individually evaluated for impairment$1,497 $— $— $5,921 $— $7,418 
Ending balance: collectively evaluated for impairment23,991 3,508 8,252 36,323 8,815 80,889 
Loans:
Ending balance1,736,736 452,989 1,744,020 2,215,311 800,660 6,949,716 
Ending balance: individually evaluated for impairment5,048 308 1,226 30,387 — 36,969 
Ending balance: collectively evaluated for impairment1,731,688 452,681 1,742,794 2,184,924 800,660 6,912,747 
For the Three Months Ended September 30, 2021
Beginning balanceCharge-offsRecoveries
Provision (credit)a
Ending balance
(dollars in thousands)
Commercial, financial, agricultural and other$21,466 $(2,066)$106 $(1,644)$17,862 
Time and demand21,098 (2,059)104 (1,561)17,582 
Commercial credit cards368 (7)2 (83)280 
Real estate construction4,285 — — 48 4,333 
Residential real estate12,933 (11)98 (215)12,805 
Residential first lien7,394 — 24 39 7,457 
Residential junior lien/home equity5,539 (11)74 (254)5,348 
Commercial real estate35,795 (102)90 (1,143)34,640 
Multifamily4,379 — — (548)3,831 
Nonowner occupied26,911 — 80 (893)26,098 
Owner occupied4,505 (102)10 298 4,711 
Loans to individuals22,559 (727)335 2,378 24,545 
Automobile19,298 (331)251 1,984 21,202 
Consumer credit cards528 (125)9 84 496 
Consumer other2,733 (271)75 310 2,847 
Total loans$97,038 $(2,906)$629 $(576)$94,185 
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 September 30, 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$24,812 $3,067 $9,239 $33,130 $9,334 $79,582 
Charge-offs(3,395)— (161)— (1,149)(4,705)
Recoveries44 — 153 110 226 533 
Provision (credit)3,691 441 (979)7,362 404 10,919 
Ending balance25,152 3,508 8,252 40,602 8,815 86,329 
Acquired loans:
Beginning balance332 171 — 1,356 — 1,859 
Charge-offs— — (122)— (80)(202)
Recoveries13 — 13 — 2 28 
Provision (credit)(9)(171)109 286 78 293 
Ending balance336 — — 1,642 — 1,978 
Total ending balance$25,488 $3,508 $8,252 $42,244 $8,815 $88,307 
Recorded Investment and Unpaid Principal Balance for Impaired Loans with Associated Allowance
The following tables include the recorded investment and unpaid principal balance for nonperforming loans with the associated allowance amount, if applicable, as of September 30, 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.
 September 30, 2021December 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$4,836 $15,308 $2,025 $2,725 
Time and demand4,836 15,308 2,025 2,725 
Real estate construction54 53 54 53 
Residential real estate9,910 12,101 10,939 13,258 
Residential first lien5,599 7,003 6,062 7,575 
Residential junior lien/home equity4,311 5,098 4,877 5,683 
Commercial real estate13,176 13,981 20,650 23,641 
Multifamily— — 1 82 
Nonowner occupied11,531 12,147 16,786 19,459 
Owner occupied1,645 1,834 3,863 4,100 
Loans to individuals498 537 418 447 
Automobile442 476 405 430 
Consumer other56 61 13 17 
Subtotal28,474 41,980 34,086 40,124 
With an allowance recorded:
Commercial, financial, agricultural and other1,899 1,898 $479 4,210 9,377 $1,268 
Time and demand1,899 1,898 479 4,210 9,377 1,268 
Real estate construction— — — — — — 
Residential real estate— — — — — — 
Residential first lien— — — — — — 
Residential junior lien/home equity— — — — — — 
Commercial real estate7,713 7,794 501 15,757 15,830 3,638 
Multifamily435 456 103 459 470 116 
Nonowner occupied6,917 6,979 338 15,060 15,122 3,508 
Owner occupied361 359 60 238 238 14 
Loans to individuals— — — — — — 
Automobile— — — — — — 
Consumer other— — — — — — 
Subtotal9,612 9,692 980 19,967 25,207 4,906 
Total$38,086 $51,672 $980 $54,053 $65,331 $4,906 
 For the Nine Months Ended September 30,
 20212020
Total LoansOriginated LoansAcquired 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$9,266 $50 $4,062 $15 $74 $— 
Time and demand9,266 50 
Real estate construction54 — 6 — 137 — 
Residential real estate10,504 275 10,380 235 1,772 18 
Residential first lien5,734 210 
Residential junior lien/home equity4,770 65 
Commercial real estate20,813 101 13,994 90 1,453 76 
Multifamily— — 
Nonowner occupied18,050 15 
Owner occupied2,763 86 
Loans to individuals486 12 469 9 11 — 
Automobile433 12 
Consumer other53 — 
Subtotal41,123 438 28,911 349 3,447 94 
With an allowance recorded:
Commercial, financial, agricultural and other1,820 50 4,569 45 — — 
Time and demand1,820 50 
Real estate construction— — — — — — 
Residential real estate— — — — — — 
Residential first lien— — 
Residential junior lien/home equity— — 
Commercial real estate7,408 — 13,830 9 — — 
Multifamily451 — 
Nonowner occupied6,917 — 
Owner occupied40 — 
Loans to individuals— — — — — — 
Automobile— — 
Consumer other— — 
Subtotal9,228 50 18,399 54 — — 
Total$50,351 $488 $47,310 $403 $3,447 $94 
For the Three Months Ended September 30,
20212020
Total LoansOriginated LoansAcquired 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$9,858 $3 $1,918 $10 $74 $— 
Time and demand9,858 3 
Real estate construction54 — 18 — 308 — 
Residential real estate10,060 54 10,198 72 1,473 1 
Residential first lien5,558 34 
Residential junior lien/home equity4,502 20 
Commercial real estate15,967 68 14,312 23 1,440 76 
Multifamily— — 
Nonowner occupied13,633 4 
Owner occupied2,334 64 
Loans to individuals504 6 494 3 11 — 
Automobile448 6 
Consumer other56 — 
Subtotal36,443 131 26,940 108 3,306 77 
With an allowance recorded:
Commercial, financial, agricultural and other1,842 19 6,423 16 — — 
Time and demand1,842 19 
Real estate construction— — — — — — 
Residential real estate— — — — — — 
Residential first lien— — 
Residential junior lien/home equity— — 
Commercial real estate7,476 — 17,407 3 — — 
Multifamily439 — 
Nonowner occupied6,917 — 
Owner occupied120 — 
Loans to individuals— — — — — — 
Automobile— — 
Consumer other— — 
Subtotal9,318 19 23,830 19 — — 
Total$45,761 $150 $50,770 $127 $3,306 $77