ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

3 Months Ended

Mar. 31, 2022

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

The Company maintains an allowance for credit losses to provide for expected credit losses. Losses are charged against the allowance when management believes that the principal is uncollectable. Subsequent recoveries, if any, are credited to the allowance. Allocations of the allowance are made for specific loans and for pools of similar types of loans, although the entire allowance is available for any loan that, in management’s judgment, should be charged against the allowance. A provision for credit losses is taken based on management’s ongoing evaluation of the appropriate allowance balance. A formal evaluation of the adequacy of the credit loss allowance is conducted monthly. The ultimate recovery of all loans is susceptible to future market factors beyond the Company’s control.

The level of credit loss provision is influenced by growth in the overall loan portfolio, emerging market risk, emerging concentration risk, commercial loan focus and large credit concentration, new industry lending activity, general economic conditions and historical loss analysis. In addition, management gives consideration to changes in the facts and circumstances of watch list credits, which includes the security position of the borrower, in determining the appropriate level of the credit loss provision. Furthermore, management’s overall view on credit quality is a factor in the determination of the provision.

The determination of the appropriate allowance is inherently subjective, as it requires significant estimates by management. The Company has an established process to determine the adequacy of the allowance for credit losses that generally includes consideration of changes in the nature and volume of the loan portfolio and overall portfolio quality, along with current and forecasted economic conditions that may affect borrowers’ ability to repay. Consideration is not limited to these factors although they represent the most commonly cited factors. To determine the specific allocation levels for individual credits, management considers the current valuation of collateral and the amounts and timing of expected future cash flows as the primary measures. Management also considers trends in adversely classified loans based upon an ongoing review of those credits. With respect to pools of similar loans, an appropriate level of general allowance is determined by portfolio segment using a probability of default-loss given default (“PD/LGD”) model, subject to a floor. A default can be triggered by one of several different asset quality factors, including past due status, nonaccrual status, TDR status or if the loan has had a charge-off. This PD is then combined with a LGD derived from historical charge-off data to construct a default rate. This loss rate is then supplemented with adjustments for reasonable and supportable forecasts of relevant economic indicators, particularly the unemployment rate forecast from the Federal Open Market Committee’s Summary of Economic Projections, and other environmental factors based on the risks present for each portfolio segment. These environmental factors include consideration of the following: levels of, and trends in, delinquencies and nonperforming loans; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedure, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations. It is also possible that these factors could include social, political, economic, and terrorist events or activities. All of these factors are susceptible to change, which may be significant. As a result of this detailed process, the allowance results in two forms of allocations, specific and general. These two components represent the total allowance for credit losses deemed adequate to cover probable losses inherent in the loan portfolio.

Commercial loans are subject to a dual standardized grading process administered by the credit administration function. These grade assignments are performed independent of each other and a consensus is reached by credit administration and the loan review officer. Specific allowances are established in cases where management has identified significant conditions or circumstances related to an individual credit that indicate it should be evaluated on an individual basis. Considerations with respect to specific allocations for these individual credits include, but are not limited to, the following: (a) the sufficiency of the customer’s cash flow or net worth to repay the loan; (b) the adequacy of the discounted value of collateral relative to the loan balance; (c) whether the loan has been criticized in a regulatory examination; (d) whether the loan is nonperforming; (e) any other reasons the ultimate collectability of the loan may be in question; or (f) any unique loan characteristics that require special monitoring.

Allocations are also applied to categories of loans considered not to be individually analyzed, but for which the rate of loss is expected to be consistent with or greater than historical averages. Such allocations are based on past loss experience and information about specific borrower situations and estimated collateral values. These general pooled loan allocations are performed for portfolio segments of commercial and industrial; commercial real estate, multi-family, and construction; agri-business and agricultural; other commercial loans; and consumer 1-4 family mortgage and other consumer loans. General allocations of the allowance are determined by a historical loss rate based on the calculation of each pool’s probability of default-loss given default, subject to a floor. The length of the historical period for each pool is based on the average life of the pool. The historical loss rates are supplemented with consideration of economic conditions and portfolio trends.

Due to the imprecise nature of estimating the allowance for credit losses, the Company’s allowance for credit losses includes an unallocated component. The unallocated component of the allowance for credit losses incorporates the Company’s judgmental determination of potential expected losses that may not be fully reflected in other allocations, including factors such as the level of classified credits, economic uncertainties, industry trends impacting specific portfolio segments, broad portfolio quality trends, and trends in the composition of the Company’s large commercial loan portfolio and related large dollar exposures to individual borrowers. As a practical expedient, the Company has elected to disclose accrued interest separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments are reversed through interest income.

For off balance sheet credit exposures outlined in the ASU at 326-20-30-11, it is the Company’s position that nearly all of the unfunded amounts on lines of credit are unconditionally cancellable, and therefore not subject to having a liability recorded.

The following tables present the activity in the allowance for credit losses by portfolio segment for the periods ended:

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended March 31, 2022
Beginning balance, January 1	$	30,595	$	26,535	$	5,034	$	1,146	$	2,866	$	1,147	$	450	$	67,773
Provision for credit losses	730		319		(273)		(88)		(248)		(55)		32		417
Loans charged-off	(19)		(597)		0		0		(22)		(102)		0		(740)
Recoveries	16		0		0		0		10		50		0		76
Net loans (charged-off) recovered	(3)		(597)		0		0		(12)		(52)		0		(664)
Ending balance	$	31,322	$	26,257	$	4,761	$	1,058	$	2,606	$	1,040	$	482	$	67,526

(dollars in thousands)	Commercial and Industrial		Commercial Real Estate and Multifamily Residential		Agri-business and Agricultural		Other Commercial		Consumer 1-4 Family Mortgage		Other Consumer		Unallocated		Total
Three Months Ended March 31, 2021
Beginning balance, January 1	$	28,333	$	22,907	$	3,043	$	416	$	2,619	$	951	$	3,139	$	61,408
Impact of adopting ASC 326	4,312		4,316		1,060		941		953		349		(2,881)		9,050
Provision for credit losses	(540)		2,285		(202)		(185)		(233)		13		339		1,477
Loans charged-off	(87)		(71)		0		0		(6)		(72)		0		(236)
Recoveries	34		8		0		0		51		52		0		145
Net loans (charged-off) recovered	(53)		(63)		0		0		45		(20)		0		(91)
Ending balance	$	32,052	$	29,445	$	3,901	$	1,172	$	3,384	$	1,293	$	597	$	71,844

Credit Quality Indicators:

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. This analysis is performed on a quarterly basis for Special Mention, Substandard and Doubtful grade loans and annually on Pass grade loans over $250,000.

The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as Special Mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard. Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard, with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans are considered to be "Pass" rated when they are reviewed as part of the previously described process and do not meet the criteria above with the exception of consumer troubled debt restructurings, which are evaluated and listed with Substandard commercial grade loans and consumer nonaccrual loans which are evaluated individually and listed with “Not Rated” loans. Loans listed as Not Rated are consumer loans or commercial loans with consumer characteristics included in groups of homogenous loans which are analyzed for credit quality indicators utilizing delinquency status.

The following table summarizes the risk category of loans by loan segment and origination date as of March 31, 2022:

(dollars in thousands)	2022			2021		2020		2019			2018		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	0		$	3,082	$	764	$	3,045		$	0	$	0	$	6,891	$	593,938	$	600,829
Special Mention	0			0		0		0			0		0		0		59,209		59,209
Substandard	0			0		74		0			0		0		74		18,542		18,616
Total	0			3,082		838		3,045			0		0		6,965		671,689		678,654
Non-working capital loans:
Pass	63,830			165,396		123,800		71,707			23,723		31,231		479,687		256,462		736,149
Special Mention	209			16,535		0		216			635		3,657		21,252		79		21,331
Substandard	0			2,937		6,380		862			2,370		5,217		17,766		3,835		21,601
Not Rated	399			2,105		1,627		710			417		96		5,354		0		5,354
Total	64,438			186,973		131,807		73,495			27,145		40,201		524,059		260,376		784,435
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	9,322			37,819		20,870		542			573		0		69,126		328,593		397,719
Special Mention	0			0		0		0			0		0		0		56		56
Total	9,322			37,819		20,870		542			573		0		69,126		328,649		397,775
Owner occupied loans:
Pass	20,705			166,777		174,001		108,181			78,260		126,142		674,066		28,228		702,294
Special Mention	0			6,277		0		865			909		9,180		17,231		0		17,231
Substandard	0			473		1,679		894			1,161		236		4,443		0		4,443
Total	20,705			173,527		175,680		109,940			80,330		135,558		695,740		28,228		723,968
Nonowner occupied loans:
Pass	41,921			142,070		146,588		105,635			21,701		87,080		544,995		47,604		592,599
Special Mention	0			11,667		307		0			0		14,120		26,094		0		26,094
Total	41,921			153,737		146,895		105,635			21,701		101,200		571,089		47,604		618,693
Multifamily loans:
Pass	2,665			67,930		37,909		36,337		17,105	11,969		21,061		177,871		13,605		191,476
Special Mention	22,178			0		0		0			0		0		22,178		0		22,178
Total	24,843			67,930		37,909		36,337			11,969		21,061		200,049		13,605		213,654
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	4,748			46,921		35,089		12,005			10,034		25,189		133,986		24,532		158,518
Special Mention	0			0		1,985		2,278			0		210		4,473		899		5,372
Substandard	0			0		0		0			190		145		335		0		335
Total	4,748			46,921		37,074		14,283			10,224		25,544		138,794		25,431		164,225
Loans for agricultural production:
Pass	1,573			31,444		24,820		3,985			10,372		5,356		77,550		166,721		244,271
Special Mention	0			432		7,727		1,160			0		0		9,319		5,905		15,224
Total	1,573			31,876		32,547		5,145			10,372		5,356		86,869		172,626		259,495
Other commercial loans:
Pass	2,964			6,417		20,425		3,082			1,175		15,043		49,106		25,363		74,469
Special Mention	0			0		0		0			0		3,649		3,649		0		3,649
Total	2,964			6,417		20,425		3,082			1,175		18,692		52,755		25,363		78,118
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans
Pass	1,360			13,558		15,386		5,197			5,722		4,604		45,827		6,191		52,018
Substandard	0			0		0		0			88		3,050		3,138		0		3,138
Not Rated	8,079			47,296		24,338		8,764			4,069		32,489		125,035		0		125,035
Total	9,439			60,854		39,724		13,961			9,879		40,143		174,000		6,191		180,191
Open end and junior lien loans
Pass	0		453	662		374		115			103		0		1,254		4,900		6,154
Substandard	0			0		0		0			0		2		2		26		28
Not Rated	14,626			18,637		4,667		4,967			2,976		3,304		49,177		104,879		154,056
Total	14,626			19,299		5,041		5,082			3,079		3,306		50,433		109,805		160,238
Residential construction loans
Not Rated	1,420		4,756	6,189		1,158		892			136		1,278		11,073		0		11,073
Total	1,420			6,189		1,158		892			136		1,278		11,073		0		11,073

Other consumer loans
Pass	78		2,302		787		1,167		0		1,088		5,422		17,046		22,468
Substandard	0		0		22		219		0		0		241		41		282
Not Rated	5,320		19,432		13,237		6,122		4,878		2,509		51,498		8,947		60,445
Total	5,398		21,734		14,046		7,508		4,878		3,597		57,161		26,034		83,195
TOTAL	$	201,397	$	816,358	$	664,014	$	378,947	$	181,461	$	395,936	$	2,638,113	$	1,715,601	$	4,353,714

As of March 31, 2022, $12.5 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the SBA.

The following table summarizes the risk category of loans by loan segment and origination date as of December 31, 2021:

(dollars in thousands)	2021			2020		2019		2018			2017		Prior		Term Total		Revolving		Total
Commercial and industrial loans:
Working capital lines of credit loans:
Pass	$	3,699		$	830	$	3,360	$	0		$	0	$	0	$	7,889	$	558,634	$	566,523
Special Mention	0			0		0		0			0		0		0		60,441		60,441
Substandard	0			0		35		0			0		0		35		25,928		25,963
Total	3,699			830		3,395		0			0		0		7,924		645,003		652,927
Non-working capital loans:
Pass	185,374			139,157		79,477		38,899			19,415		18,489		480,811		203,794		684,605
Special Mention	17,728			0		225		979			2,350		1,426		22,708		0		22,708
Substandard	2,996			6,948		1,091		2,534			5,465		426		19,460		3,321		22,781
Not Rated	2,265			1,758		837		563			128		14		5,565		0		5,565
Total	208,363			147,863		81,630		42,975			27,358		20,355		528,544		207,115		735,659
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	35,136			30,224		1,276		998			0		0		67,634		310,396		378,030
Total	35,136			30,224		1,276		998			0		0		67,634		310,396		378,030
Owner occupied loans:
Pass	135,861			169,404		124,117		85,070			78,155		93,925		686,532		29,611		716,143
Special Mention	6,555			0		880		933			7,387		1,235		16,990		0		16,990
Substandard	489			1,570		909		1,758			694		238		5,658		0		5,658
Total	142,905			170,974		125,906		87,761			86,236		95,398		709,180		29,611		738,791
Nonowner occupied loans:
Pass	146,342			154,433		107,262		19,054			31,023		59,154		517,268		44,362		561,630
Special Mention	11,825			331		0		0			0		14,253		26,409		0		26,409
Total	158,167			154,764		107,262		19,054			31,023		73,407		543,677		44,362		588,039
Multifamily loans:
Pass	84,678			53,195		36,575		12,286		17,105	14,574		9,793		211,101		13,434		224,535
Special Mention	0			0		0		0			22,252		0		22,252		0		22,252
Total	84,678			53,195		36,575		12,286			36,826		9,793		233,353		13,434		246,787
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	47,532			37,035		16,249		10,469			10,454		17,021		138,760		61,774		200,534
Special Mention	0			1,985		2,303		0			180		30		4,498		918		5,416
Substandard	207			0		0		0			0		145		352		0		352
Total	47,739			39,020		18,552		10,469			10,634		17,196		143,610		62,692		206,302
Loans for agricultural production:
Pass	36,238			25,855		4,224		11,072			1,331		4,178		82,898		138,142		221,040
Special Mention	448			8,642		1,171		0			0		0		10,261		8,272		18,533
Total	36,686			34,497		5,395		11,072			1,331		4,178		93,159		146,414		239,573
Other commercial loans:
Pass	6,556			21,111		3,243		1,273			8,592		7,460		48,235		21,145		69,380
Special Mention	0			0		0		0			0		3,798		3,798		0		3,798
Total	6,556			21,111		3,243		1,273			8,592		11,258		52,033		21,145		73,178
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans
Pass	14,635			16,173		5,312		5,903			3,049		3,221		48,293		5,005		53,298
Special Mention	0			0		0		0			0		1,274		1,274		0		1,274
Not Rated	45,089			27,738		9,248		5,217			7,628		26,321		121,241		482		121,723
Total	59,724			43,911		14,560		11,120			10,677		30,816		170,808		5,487		176,295
Open end and junior lien loans
Pass	679		453	379		159		313			0		0		1,530		5,074		6,604
Substandard	0			0		0		0			0		0		0		98		98
Not Rated	21,945			5,624		5,987		3,899			1,653		1,526		40,634		110,523		151,157
Total	22,624			6,003		6,146		4,212			1,653		1,526		42,164		115,695		157,859
Residential construction loans
Not Rated	7,926		4,756	1,537		960		138			171		1,125		11,857		0		11,857
Total	7,926			1,537		960		138			171		1,125		11,857		0		11,857

Other consumer loans
Pass	3,401		957		1,523		0		1,155		0		7,036		12,998		20,034
Substandard	36		23		230		0		0		0		289		0		289
Not Rated	21,652		14,931		7,474		5,844		1,890		1,203		52,994		9,227		62,221
Total	25,089		15,911		9,227		5,844		3,045		1,203		60,319		22,225		82,544
TOTAL	$	839,292	$	719,840	$	414,127	$	207,202	$	217,546	$	266,255	$	2,664,262	$	1,623,579	$	4,287,841

As of December 31, 2021, $26.2 million in PPP loans were included in the "Pass" category of non-working capital commercial and industrial loans. These loans were included in this risk rating category because they are fully guaranteed by the SBA.

Nonaccrual and Past Due Loans:

The Company does not record interest on nonaccrual loans until principal is recovered. For all loan classes, a loan is generally placed on nonaccrual status when principal or interest becomes 90 days past due unless it is well secured and in the process of collection, or earlier when concern exists as to the ultimate collectability of principal or interest. Interest accrued but not received is reversed against earnings. Cash interest received on these loans is applied to the principal balance until the principal is recovered or until the loan returns to accrual status. Loans may be returned to accrual status when all the principal and interest amounts contractually due are brought current, remain current for a prescribed period, and future payments are reasonably assured.

The following table presents the aging of the amortized cost basis in past due loans as of March 31, 2022 by class of loans and loans past due 90 days or more and still accruing by class of loan:

(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	678,654	$	0	$	0	$	674,338	$	4,316	$	238	$	678,654
Non-working capital loans	781,306		3,129		0		778,863		5,572		4,546		784,435
Commercial real estate and multi-family residential loans:
Construction and land development loans	397,775		0		0		397,775		0		0		397,775
Owner occupied loans	723,968		0		0		720,812		3,156		1,516		723,968
Nonowner occupied loans	618,693		0		0		618,693		0		0		618,693
Multifamily loans	213,654		0		0		213,654		0		0		213,654
Agri-business and agricultural loans:
Loans secured by farmland	164,225		0		0		163,890		335		0		164,225
Loans for agricultural production	259,495		0		0		259,495		0		0		259,495
Other commercial loans	78,118		0		0		78,118		0		0		78,118
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	179,872		301		18		179,980		211		140		180,191
Open end and junior lien loans	160,043		195		0		160,210		28		28		160,238
Residential construction loans	11,073		0		0		11,073		0		0		11,073
Other consumer loans	83,150		45		0		82,913		282		0		83,195
Total	$	4,350,026	$	3,670	$	18	$	4,339,814	$	13,900	$	6,468	$	4,353,714

As of March 31, 2022 there were an insignificant number of loans 30-89 days past due or greater than 89 days past due on nonaccrual. Additionally, interest income recognized on nonaccrual loans was insignificant during the three month period ended March 31, 2022.

The following table presents the aging of the amortized cost basis in past due loans as of December 31, 2021 by class of loans and loans past due 90 days or more and still accruing by class of loan:

(dollars in thousands)	Loans Not Past Due		30-89 Days Past Due		Greater than 89 Days Past Due and Accruing		Total Accruing		Total Nonaccrual		Nonaccrual With No Allowance For Credit Loss		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	652,903	$	24	$	0	$	646,961	$	5,966	$	5,200	$	652,927
Non-working capital loans	735,658		1		0		731,063		4,596		229		735,659
Commercial real estate and multi-family residential loans:
Construction and land development loans	378,030		0		0		378,030		0		0		378,030
Owner occupied loans	738,791		0		0		735,157		3,634		2,129		738,791
Nonowner occupied loans	588,039		0		0		588,039		0		0		588,039
Multifamily loans	246,787		0		0		246,787		0		0		246,787
Agri-business and agricultural loans:
Loans secured by farmland	206,302		0		0		205,967		335		0		206,302
Loans for agricultural production	239,573		0		0		239,573		0		0		239,573
Other commercial loans	73,178		0		0		73,178		0		0		73,178
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans	175,678		500		117		176,240		55		55		176,295
Open end and junior lien loans	157,729		130		0		157,761		98		98		157,859
Residential construction loans	11,857		0		0		11,857		0		0		11,857
Other consumer loans	82,472		72		0		82,255		289		0		82,544
Total	$	4,286,997	$	727	$	117	$	4,272,868	$	14,973	$	7,711	$	4,287,841

As of December 31, 2021 there were an insignificant number of loans 30-89 days past due or greater than 89 days past due on nonaccrual. Additionally, interest income recognized on nonaccrual loans was insignificant during the year ended December 31, 2021.

When management determines that foreclosure is probable, expected credit losses for collateral dependent loans are based on the fair value of the collateral at the reporting date, adjusted for selling costs as appropriate. A loan is considered collateral dependent when the borrower is experiencing financial difficulty and the loan is expected to be repaid substantially through the operation or sale of the collateral. The class of loan represents the primary collateral type associated with the loan. Significant quarter over quarter changes are reflective of changes in nonaccrual status and not necessarily associated with credit quality indicators like appraisal value.

The following tables present the amortized cost basis of collateral dependent loans by class of loan as of:

	March 31, 2022
(dollars in thousands)	Real Estate		General Business  Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	74	$	5,497	$	0	$	5,571
Non-working capital loans	1,581		9,525		229		11,335
Commercial real estate and multi-family residential loans:
Owner occupied loans	960		1,500		1,161		3,621
Agri-business and agricultural loans:
Loans secured by farmland	190		145		0		335
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	3,141		0		0		3,141
Open end and junior lien loans	28		0		0		28
Other consumer loans	0		0		63		63
Total	$	5,974	$	16,667	$	1,453	$	24,094

	December 31, 2021
(dollars in thousands)	Real Estate		General Business  Assets		Other		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	0	$	5,966	$	0	$	5,966
Non-working capital loans	1,606		9,475		229		11,310
Commercial real estate and multi-family residential loans:
Owner occupied loans	1,435		1,505		1,161		4,101
Agri-business and agricultural loans:
Loans secured by farmland	190		145		0		335
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans	3,081		0		0		3,081
Open end and junior lien loans	98		0		0		98
Other consumer loans	0		0		59		59
Total	$	6,312	$	17,091	$	1,449	$	24,950

Troubled Debt Restructurings:

Troubled debt restructured loans are included in the totals for individually analyzed loans. The Company has allocated $6.0 million and $5.8 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of March 31, 2022 and December 31, 2021, respectively. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.

(dollars in thousands)	March 31, 2022		December 31, 2021
Accruing troubled debt restructured loans	$	4,976	$	5,121
Nonaccrual troubled debt restructured loans	6,443		6,218
Total troubled debt restructured loans	$	11,419	$	11,339

During the three months ended March 31, 2022, one loan was identified as a troubled debt restructuring. This loan was an over line of credit extended to an existing borrower with other previously modified loans as a result of financial difficulty to assist with cash flow needs. No additional credit enhancements were obtained in conjunction with the extension of this over line of credit.

(dollars in thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
Troubled Debt Restructurings
Commercial and industrial loans:
Working capital lines of credit loans	1	$	226	$	226
Total	1	$	226	$	226

For the three month period ended March 31, 2022, the troubled debt restructuring described above did not increase the allowance for credit losses, and no charge-offs were recorded.

During the three months ended March 31, 2021, no loans were modified as troubled debt restructurings.