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ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

3 Months Ended

Mar. 31, 2021

ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

ALLOWANCE FOR LOAN LOSSES AND CREDIT QUALITY

NOTE 4. ALLOWANCE FOR CREDIT LOSSES AND CREDIT QUALITY

The Company adopted ASC 326 using the modified retrospective method for all financial assets measured at amortized cost. Results for reporting periods beginning after January 1, 2021 are presented under ASC 326 while prior period amounts continue to be reported in accordance with previously applicable GAAP.

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, 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 treat accrued interest the same way it is treated in the incurred loss model, wherein it is stated separately from loan principal balances on the consolidated balance sheet. Additionally, when a loan is placed on non-accrual, interest payments will be reversed through interest income, which is consistent with current practice.

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 set up, which matches the current accounting conclusion in the incurred loss environment.

The following tables present the activity in the allowance for credit losses by portfolio segment for the three-month period ended March 31, 2021:

Commercial

Real Estate

Commercial

and

Agri-business

Consumer

and

Multifamily

and

Other

1-4 Family

Other

(dollars in thousands)

Industrial

Residential

Agricultural

Commercial

Mortgage

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)

339

1,477

Loans charged-off

(87)

(71)

(6)

(72)

(236)

Recoveries

145

Net loans charged-off

(53)

(63)

(20)

(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 not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be “Pass” rated loans 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, 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	$	1,699	$	7,903	$	15,719	$	2,351	$	1,168	$	642	$	29,482	$	469,298	$	498,780
Special Mention		0		0		0		0		0		0		0		59,011		59,011
Substandard		0		0		35		0		173		35		243		16,662		16,905
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	1,699	$	7,903	$	15,754	$	2,351	$	1,341	$	677	$	29,725	$	544,971	$	574,696
Non-working capital loans:
Pass	$	163,261	$	448,279	$	115,200	$	100,782	$	37,144	$	28,151	$	892,817	$	150,459	$	1,043,276
Special Mention		4,424		5,394		1,468		3,302		3,609		1,635		19,832		2,896		22,728
Substandard		0		6,754		1,340		4,684		4,642		1,076		18,496		3,142		21,638
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		856		2,360		1,104		1,083		357		69		5,829		0		5,829
Total	$	168,541	$	462,787	$	119,112	$	109,851	$	45,752	$	30,931	$	936,974	$	156,497	$	1,093,471
Commercial real estate and multi-family residential loans:
Construction and land development loans:
Pass	$	4,739	$	36,704	$	12,586	$	57,515	$	1,639	$	17,070	$	130,253	$	239,380	$	369,633
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	4,739	$	36,704	$	12,586	$	57,515	$	1,639	$	17,070	$	130,253	$	239,380	$	369,633
Owner occupied loans:
Pass	$	44,701	$	181,024	$	72,230	$	85,797	$	86,522	$	116,435	$	586,709	$	44,030	$	630,739
Special Mention		1,675		0		2,183		1,401		23,062		2,242		30,563		0		30,563
Substandard		0		2,039		1,092		2,111		1,458		932		7,632		0		7,632
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	46,376	$	183,063	$	75,505	$	89,309	$	111,042	$	119,609	$	624,904	$	44,030	$	668,934
Nonowner occupied loans:
Pass	$	26,222	$	168,765	$	158,407	$	45,092	$	43,415	$	95,478	$	537,379	$	36,478	$	573,857
Special Mention		0		0		666		3,406		0		27,107		31,179		0		31,179
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	26,222	$	168,765	$	159,073	$	48,498	$	43,415	$	122,585	$	568,558	$	36,478	$	605,036
Multifamily loans:
Pass	$	13,224	$	109,440	$	79,629	$	14,830	$	17,242	$	30,423	$	264,788	$	13,956	$	278,744
Special Mention		0		0		0		0		22,252		0		22,252		0		22,252
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	13,224	$	109,440	$	79,629	$	14,830	$	39,494	$	30,423	$	287,040	$	13,956	$	300,996
Agri-business and agricultural loans:
Loans secured by farmland:
Pass	$	16,709	$	31,945	$	21,644	$	15,817	$	11,433	$	25,434	$	122,982	$	21,195	$	144,177
Special Mention		0		2,089		2,374		746		200		1,924		7,333		2,628		9,961
Substandard		0		220		0		0		0		428		648		0		648
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	16,709	$	34,254	$	24,018	$	16,563	$	11,633	$	27,786	$	130,963	$	23,823	$	154,786
Loans for agricultural production:
Pass	$	1,594	$	33,549	$	5,474	$	12,302	$	1,851	$	8,448	$	63,218	$	82,152	$	145,370
Special Mention		495		10,154		5,582		18,788		62		19		35,100		11,942		47,042
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	2,089	$	43,703	$	11,056	$	31,090	$	1,913	$	8,467	$	98,318	$	94,094	$	192,412
Other commercial loans:
Pass	$	919	$	30,687	$	5,766	$	2,524	$	10,249	$	14,206	$	64,351	$	22,028	$	86,379
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		0		0		0		0		0		0		0		0		0
Total	$	919	$	30,687	$	5,766	$	2,524	$	10,249	$	14,206	$	64,351	$	22,028	$	86,379
Consumer 1-4 family mortgage loans:
Closed end first mortgage loans
Pass	$	3,252	$	18,893	$	7,016	$	7,339	$	4,048	$	6,407	$	46,955	$	2,717	$	49,672
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		14		1,481		1,495		0		1,495
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		4,474		31,927		14,397		12,868		13,123		32,653		109,442		631		110,073
Total	$	7,726	$	50,820	$	21,413	$	20,207	$	17,185	$	40,541	$	157,892	$	3,348	$	161,240
Open end and junior lien loans
Pass	$	101	$	494	$	166	$	404	$	0	$	32	$	1,197	$	10,305	$	11,502
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		1,565		9,308		9,290		7,900		4,119		2,603		34,785		112,747		147,532
Total	$	1,666	$	9,802	$	9,456	$	8,304	$	4,119	$	2,635	$	35,982	$	123,052	$	159,034
Residential construction loans
Pass	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0	$	0
Special Mention		0		0		0		0		0		0		0		0		0
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		2,139		4,268		1,098		262		202		1,210		9,179		0		9,179
Total	$	2,139	$	4,268	$	1,098	$	262	$	202	$	1,210	$	9,179	$	0	$	9,179
Other consumer loans
Pass	$	253	$	6,503	$	1,687	$	0	$	1,395	$	0	$	9,838	$	24,887	$	34,725
Special Mention		0		0		253		0		0		0		253		0		253
Substandard		0		0		0		0		0		0		0		0		0
Doubtful		0		0		0		0		0		0		0		0		0
Not Rated		5,423		21,653		11,465		10,166		4,065		2,004		54,776		9,081		63,857
Total	$	5,676	$	28,156	$	13,405	$	10,166	$	5,460	$	2,004	$	64,867	$	33,968	$	98,835

TOTAL		297,725		1,170,352		547,871		411,470		293,444		418,144		3,139,006		1,335,625		4,474,631

As of March 31, 2021, $396.7 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 Small Business Administration (“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, 2021 by class of loans and loans past due 90 days or more and still accruing by class of loan:

Greater than

Nonaccrual

30-89

89 Days

With No

Loans Not

Days

Past Due

Total

Allowance

(dollars in thousands)

Past Due

and Accruing

Accruing

Nonaccrual

For Credit Loss

Total

Commercial and industrial loans:

Working capital lines of credit loans

574,696

574,096

600

173

574,696

Non-working capital loans

1,093,471

1,088,338

5,133

610

1,093,471

Commercial real estate and multi-family residential loans:

Construction and land development loans

369,633

Owner occupied loans

668,934

663,855

5,079

3,396

668,934

Nonowner occupied loans

605,036

Multifamily loans

300,996

Agri-business and agricultural loans:

Loans secured by farmland

154,786

154,358

428

283

154,786

Loans for agricultural production

192,412

Other commercial loans

86,379

Consumer 1‑4 family mortgage loans:

Closed end first mortgage loans

160,677

545

160,773

467

161,240

Open end and junior lien loans

158,924

110

159,034

Residential construction loans

9,179

Other consumer loans

98,753

98,835

Total

4,473,876

737

4,462,924

11,707

4,534

4,474,631

As of March 31, 2021 there were no 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, 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 table presents the amortized cost basis of collateral dependent loans by class of loan as of March 31, 2021:

General

(dollars in thousands)

Real Estate

Business Assets

Other

Total

Commercial and industrial loans:

Working capital lines of credit loans

427

Non-working capital loans

1,952

9,507

229

11,688

Commercial real estate and multi-family residential loans:

Owner occupied loans

2,707

1,682

1,161

5,550

Agri-business and agricultural loans:

Loans secured by farmland

283

145

428

Consumer 1-4 family mortgage loans:

Closed end first mortgage loans

1,496

Total

6,438

11,761

1,390

19,589

Troubled Debt Restructurings:

Troubled debt restructured loans are included in the totals for individually analyzed loans. The Company has allocated $6.1 million and $5.5 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of March 31, 2021 and December 31, 2020, respectively. The Company is not committed to lend additional funds to debtors whose loans have been modified in a troubled debt restructuring.


	March 31		December 31
(dollars in thousands)	2021		2020
Accruing troubled debt restructured loans	$	5,111	$	5,237
Nonaccrual troubled debt restructured loans		6,508		6,476
Total troubled debt restructured loans	$	11,619	$	11,713

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

During the three months ended March 31, 2020, certain loans were modified as troubled debt restructurings. The modified terms of these loans include one or a combination of the following: inadequate compensation for the terms of the restructure or renewal; a modification of the repayment terms which delays principal repayment for some period; or renewal terms offered to borrowers in financial distress where no additional credit enhancements were obtained at the time of renewal.

The following table presents loans by class modified as new troubled debt restructurings that occurred during the three months ended March 31, 2020:

Modified Repayment Terms

Pre-Modification

Post-Modification

Extension

Outstanding

Period or

Number of

Recorded

Number of

Range

(dollars in thousands)

Loans

Investment

Loans

(in months)

Troubled Debt Restructurings

Commercial and industrial loans:

Non-working capital loans

788

122

Total

788

122

For the three month period ended March 31, 2020, the troubled debt restructurings described above increased the allowance for credit losses by $122,000, and charge-offs of $666,000 were recorded.

As of March 31, 2021, total deferrals attributed to COVID-19 were $85.0 million representing 26 borrowers. This represented 2.0% of the total loan portfolio. Of that total 19 were commercial loan borrowers representing $84.4 million in loans, or 2.0% of commercial loans, and seven were retail loan borrowers representing $0.6 million, or 0.2% of total retail loans. The majority of all loan deferrals were for a period of 90 days. Of the total commercial deferrals attributed to COVID-19, $14.5 million represented a first deferral action, $14.9 million represented a second deferral action, $30.5 million represented a third deferral action and $24.5 million represented a fourth deferral action. Two borrowers represented 89% of the fourth deferral population and were commercial real estate nonowner occupied loans supported by adequate collateral and personal guarantors and consist of loans to the hotel and accommodation industry. All COVID-19 related loan deferrals remain on accrual status, as each deferral is evaluated individually, and management has determined that all contractual cashflows are collectable at this time. In accordance with Section 4013 of the CARES Act, loan deferrals granted to customers that resulted from the impact of COVID-19 and who were not past due at December 31, 2019 were not considered trouble debt restructurings as of March 31, 2021. This provision was extended to January 1, 2022 under the Consolidated Appropriations Act, 2021. Management continues to monitor these deferrals and has adequately considered these credits in the March 31, 2021 allowance for credit losses balance.

Allowance for Loan Losses (Prior to January 1, 2021):

Prior to the adoption of ASC 326 on January 1, 2021 the Company calculated the allowance for loan losses using the incurred losses methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

The following tables present the activity in the allowance for loan losses by portfolio segment for the three-month period ended March 31, 2020:


			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multifamily		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
Three Months Ended March 31, 2020
Beginning balance, January 1	$	25,789	$	15,796	$	3,869	$	447	$	2,086	$	345	$	2,320	$	50,652
Provision for credit losses		2,628		2,750		(167)		74		395		175		745		6,600
Loans charged-off		(3,735)		0		0		0		(13)		(101)		0		(3,849)
Recoveries		57		112		2		0		7		28		0		206
Net loans charged-off		(3,678)		112		2		0		(6)		(73)		0		(3,643)
Ending balance	$	24,739	$	18,658	$	3,704	$	521	$	2,475	$	447	$	3,065	$	53,609

The following table presents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020:


			Commercial
			Real Estate
	Commercial		and		Agri-business				Consumer
	and		Multi-family		and		Other		1-4 Family		Other
(dollars in thousands)	Industrial		Residential		Agricultural		Commercial		Mortgage		Consumer		Unallocated		Total
December 31, 2020
Allowance for loan losses:
Ending allowance balance attributable to loans:
Individually evaluated for impairment	$	6,310	$	1,377	$	84	$	0	$	270	$	0	$	0	$	8,041
Collectively evaluated for impairment		22,023		21,530		2,959		416		2,349		951		3,139		53,367
Total ending allowance balance	$	28,333	$	22,907	$	3,043	$	416	$	2,619	$	951	$	3,139	$	61,408

Loans:
Loans individually evaluated for impairment	$	12,533	$	5,518	$	428	$	0	$	1,700	$	0	$	0	$	20,179
Loans collectively evaluated for impairment		1,772,393		1,887,054		429,234		93,912		342,999		103,385		0		4,628,977
Total ending loans balance	$	1,784,926	$	1,892,572	$	429,662	$	93,912	$	344,699	$	103,385	$	0	$	4,649,156

The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2020:


	Unpaid				Allowance for
	Principal		Recorded		Loan Losses
(dollars in thousands)	Balance		Investment		Allocated
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	346	$	173	$	0
Non-working capital loans		2,399		968		0
Commercial real estate and multi-family residential loans:
Owner occupied loans		3,002		2,930		0
Agri-business and agricultural loans:
Loans secured by farmland		603		283		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		316		236		0
Open end and junior lien loans		5		5		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		433		433		255
Non-working capital loans		11,644		10,959		6,055
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,589		2,588		1,377
Agri-business and agricultural loans:
Loans secured by farmland		145		145		84
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,457		1,459		270
Total	$	22,939	$	20,179	$	8,041

The following table presents loans individually evaluated for impairment by class of loans as of and for the three-month period ended March 31, 2020:


	Average		Interest		Cash Basis
	Recorded		Income		Interest Income
(dollars in thousands)	Investment		Recognized		Recognized
With no related allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans	$	380	$	0	$	0
Non-working capital loans		558		1		1
Commercial real estate and multi-family residential loans:
Owner occupied loans		2,144		5		4
Agri-business and agricultural loans:
Loans secured by farmland		283		0		0
Consumer 1‑4 family loans:
Closed end first mortgage loans		325		1		1
Open end and junior lien loans		85		0		0
With an allowance recorded:
Commercial and industrial loans:
Working capital lines of credit loans		5,287		0		0
Non-working capital loans		11,719		90		90
Commercial real estate and multi-family residential loans:
Owner occupied loans		1,999		30		30
Agri-business and agricultural loans:
Loans secured by farmland		147		0		0
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		1,641		21		20
Open end and junior lien loans		638		0		0
Residential construction loans		52		0		0
Total	$	25,258	$	148	$	146

The following table presents the aging of the recorded investment in past due loans as of December 31, 2020 by class of loans:


			30‑89		Greater than		Greater than				Total Past
	Loans Not		Days		90 Days		90 Days				Due and
(dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Nonaccrual		Nonaccrual		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	625,493	$	0	$	0	$	0	$	606	$	606	$	626,099
Non-working capital loans		1,153,540		0		0		0		5,287		5,287		1,158,827
Commercial real estate and multi-family residential loans:
Construction and land development loans		361,664		0		0		0		0		0		361,664
Owner occupied loans		642,527		0		0		0		5,047		5,047		647,574
Nonowner occupied loans		579,050		0		0		0		0		0		579,050
Multifamily loans		304,284		0		0		0		0		0		304,284
Agri-business and agricultural loans:
Loans secured by farmland		194,935		0		0		0		428		428		195,363
Loans for agricultural production		234,191		108		0		0		0		108		234,299
Other commercial loans		93,912		0		0		0		0		0		93,912
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		165,895		877		116		116		613		1,606		167,501
Open end and junior lien loans		165,094		137		0		0		5		142		165,236
Residential construction loans		11,962		0		0		0		0		0		11,962
Other consumer loans		103,240		145		0		0		0		145		103,385
Total	$	4,635,787	$	1,267	$	116	$	116	$	11,986	$	13,369	$	4,649,156

As of December 31, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:


			Special						Not
(dollars in thousands)	Pass		Mention		Substandard		Doubtful		Rated		Total
Commercial and industrial loans:
Working capital lines of credit loans	$	535,071	$	81,095	$	9,718	$	0	$	215	$	626,099
Non-working capital loans		1,111,989		26,523		14,820		0		5,495		1,158,827
Commercial real estate and multi-family residential loans:
Construction and land development loans		361,664		0		0		0		0		361,664
Owner occupied loans		608,845		31,355		7,374		0		0		647,574
Nonowner occupied loans		547,790		31,260		0		0		0		579,050
Multi-family loans		282,031		22,253		0		0		0		304,284
Agri-business and agricultural loans:
Loans secured by farmland		183,983		10,728		652		0		0		195,363
Loans for agricultural production		185,875		48,424		0		0		0		234,299
Other commercial loans		93,912		0		0		0		0		93,912
Consumer 1‑4 family mortgage loans:
Closed end first mortgage loans		40,682		0		1,695		0		125,124		167,501
Open end and junior lien loans		8,424		0		5		0		156,807		165,236
Residential construction loans		0		0		0		0		11,962		11,962
Other consumer loans		36,979		253		0		0		66,153		103,385
Total	$	3,997,245	$	251,891	$	34,264	$	0	$	365,756	$	4,649,156