Note

Allowance for Loan Losses, Nonperforming Assets and Impaired Loans

The allowance for loan losses methodology incorporates individual evaluation of impaired loans and collective evaluation of groups of non-impaired loans. The Company performs ongoing analysis of the loan portfolio to determine credit quality and to identify impaired loans. Credit quality is rated based on the loan’s payment history, the borrower’s current financial situation and value of the underlying collateral.

Impaired Loans

Loans are designated as impaired when, in the judgment of management based on current information and events, it is probable that all amounts will

not

be collected when due according to the contractual terms of the loan agreement. Impaired loans are those loans that have been modified in a TDR and larger, usually non-homogeneous loans that are in nonaccrual or exhibit payment history or financial status that indicate that collection probably will

not

occur when due according to the loan’s terms. Generally, impaired loans are given risk ratings that indicate higher risk, such as “classified” or “special mention.” Impaired loans are individually evaluated to determine appropriate reserves and are measured at the lower of the invested amount or the fair value. Impaired loans that are

not

TDRs and for which fair value measurement indicates an impairment loss are designated nonaccrual. A restructured loan that maintains current status for at least

six

months

may

be in accrual status. Please refer to the Company’s

2019

Form

-K, Note

Summary of Significant Accounting Policies for additional information on evaluation of impaired loans and associated specific reserves, and policies regarding nonaccruals, past due status and charge-offs.

TDRs impact the estimation of the appropriate level of the allowance for loan losses. If the restructuring included forgiveness of a portion of principal or accrued interest, the charge-off is included in the historical charge-off rates applied to the collective evaluation methodology. Restructured loans are individually evaluated for impairment, and the amount of a restructured loan’s book value in excess of its fair value is accrued as a specific allocation in the allowance for loan losses. If a TDR loan payment exceeds

days past due, it is examined to determine whether the late payment indicates collateral dependency or cash flows below those that were used in the fair value measurement. TDRs, as well as all impaired loans, that are determined to be collateral dependent are charged down to fair value. Deficiencies indicated by impairment measurements for TDRs that are

not

collateral dependent

may

be accrued in the allowance for loan losses or charged off if deemed uncollectible.

Collectively Evaluated Loans

The Company evaluated characteristics in the loan portfolio and determined major segments and smaller classes within each segment. These characteristics include collateral type, repayment sources, and (if applicable) the borrower’s business model. The methodology for calculating reserves for collectively evaluated loans is applied at the class level.

Portfolio Segments and Classes

The segments and classes used in determining the allowance for loan losses are as follows.

Real Estate Construction

Construction, residential

Construction, other

Consumer Real Estate

Equity lines

Residential closed-end

first

liens

Residential closed-end junior liens

Investor-owned residential real estate

Commercial Real Estate

Multifamily real estate

Commercial real estate, owner-occupied

Commercial real estate, other

Commercial Non-Real Estate

Commercial and industrial

Public Sector and IDA

Public sector and IDA

Consumer Non-Real Estate

Credit cards

Automobile

Other consumer loans

Historical Loss Rates

The Company’s allowance methodology for collectively evaluated loans applies historical loss rates by class to current class balances as part of the process of determining required reserves. Class loss rates are calculated as the net charge-offs for the class as a percentage of average class balance. The Company averages loss rates for the most recent

quarters to determine the historical loss rate for each class.

Two loss rates for each class are calculated: total net charge-offs for the class as a percentage of average class loan balance (“class loss rate”), and total net charge-offs for the class as a percentage of average classified loans in the class (“classified loss rate”). Classified loans are those with risk ratings of “substandard” or lower. Net charge-offs in both calculations include charge-offs and recoveries of classified and non-classified loans as well as those associated with impaired loans. Class historical loss rates are applied to non-classified loan balances at the reporting date, and classified historical loss rates are applied to classified balances at the reporting date.

Risk Factors

In addition to historical loss rates, risk factors pertinent to credit risk for each class are analyzed to estimate reserves for collectively evaluated loans. Factors include changes in national and local economic and business conditions, the nature and volume of classes within the portfolio, loan quality, loan officers’ experience, lending policies and the Company’s loan review system.

The analysis of certain factors results in standard allocations to all segments and classes. These factors include the risk from changes in lending policies, loan officers’ average years of experience, unemployment levels, bankruptcy rates, interest rate environment, and competition/legal/regulatory environments. Factors analyzed for each class, with resultant allocations based upon the level of risk assessed for each class, include the risk from changes in loan review, levels of past due loans, levels of nonaccrual loans, current class balance as a percentage of total loans, and the percentage of high risk loans within the class. Additionally, factors specific to each segment are analyzed and result in allocations to the segment. Please refer to the Company’s

2019

Form

-K, Note

Summary of Significant Accounting Policies for a discussion of risk factors pertinent to each class.

Real estate construction loans are subject to general risks from changing commercial building and housing market trends and economic conditions that

may

impact demand for completed properties and the costs of completion. These risks are measured by market-area unemployment rates, bankruptcy rates, building market trends, and interest rates.

The credit quality of consumer real estate is subject to risks associated with the borrower’s repayment ability and collateral value, measured generally by analyzing local unemployment and bankruptcy trends, local housing market trends, and interest rates.

The commercial real estate segment includes loans secured by multifamily residential real estate, commercial real estate occupied by the owner/borrower, and commercial real estate leased to non-owners. Loans in the commercial real estate segment are impacted by economic risks from changing commercial real estate markets, rental markets for multi-family housing and commercial buildings, business bankruptcy rates, local unemployment and interest rate trends that would impact the businesses housed by the commercial real estate.

Commercial non-real estate loans are secured by collateral other than real estate, or are unsecured. Credit risk for commercial non-real estate loans is subject to economic conditions, generally monitored by local business bankruptcy trends, and interest rates.

Public sector and Industrial Development Authority (“IDA”) loans are extended to municipalities and related entities. Credit risk is based upon the entity’s ability to repay and interest rate trends.

Consumer non-real estate includes credit cards, automobile and other consumer loans. Credit cards and certain other consumer loans are unsecured, while collateral is obtained for automobile loans and other consumer loans. Credit risk stems primarily from the borrower’s ability to repay, measured by average unemployment, average personal bankruptcy rates and interest rates.

Factor allocations applied to each class are increased for loans rated special mention and increased to a greater extent for loans rated classified. The Company allocates additional reserves for “high risk” loans. High risk loans include junior liens, interest only and high loan to value loans.

A detailed analysis showing the allowance roll-forward by portfolio segment and related loan balance by segment follows.

	Activity in the Allowance for Loan Losses for the Three Months Ended March 31 , 20 20
	Real Estate Construction			Consumer Real Estate			Commercial Real Estate		Commercial Non - Real Estate			Public Sector and IDA		Consumer Non - Real Estate			Unallocated		Total
Balance, December 31, 2019	$	400		$	1,895		$	2,559	$	555		$	478	$	650		$	326	$	6,863
Charge-offs		---			(44	)		---		(65	)		---		(66	)		---		(175	)
Recoveries		---			---			12		1			---		60			---		73
Provision for (recovery of) loan losses		(25	)		219			29		230			33		(25	)		18		479
Balance, March 3 1 , 20 20	$	375		$	2,070		$	2,600	$	721		$	511	$	619		$	344	$	7,240

	A ctivity in the Allowance for Loan Losses for the Three Months Ended March 31 , 201 9
	Real Estate Construction		Consumer Real Estate			Commercial Real Estate			Commercial No n- Real Estate			Public Sector and IDA			Consumer Non -- Real Estate			Unallocated			Total
Balance, December 31, 2018	$	398	$	2,049		$	2,798		$	602		$	583		$	750		$	210		$	7,390
Charge-offs		---		(16	)		(150	)		---			---			(162	)		---			(328	)
Recoveries		---		---			12			---			---			86			---			98
Provision for (recovery of) loan losses		70		58			327			(27	)		(58	)		---			(170	)		200
Balance, March 31 , 201 9	$	468	$	2,091		$	2,987		$	575		$	525		$	674		$	40		$	7,360

	A ctivity in the Allowance for Loan Losses for the Year Ended December 31, 201 9
	Real Estate Construction		Consumer Real Estate			Commercial Real Estate			Commercial Non-Real Estate			Public Sector and IDA			Consumer Non - Real Estate			Unallocated		Total
Balance, December 31, 2018	$	398	$	2,049		$	2,798		$	602		$	583		$	750		$	210	$	7,390
Charge-offs		---		(192	)		(150	)		(47	)		---			(531	)		---		(920	)
Recoveries		---		---			49			1			---			217			---		267
Provision for (recovery of) loan losses		2		38			(138	)		(1	)		(105	)		214			116		126
Balance, December 31 , 201 9	$	400	$	1,895		$	2,559		$	555		$	478		$	650		$	326	$	6,863

	Allowance for Loan Losses as of March 31 , 20 20
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non-Real Estate		Public Sector and IDA		Consumer Non - Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	2	$	---	$	108	$	---	$	---	$	---	$	110
Collectively evaluated for impairment		375		2,068		2,600		613		511		619		344		7,130
Total	$	375	$	2,070	$	2,600	$	721	$	511	$	619	$	344	$	7,240

	Allowance for Loan Losses as of December 31, 201 9
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non - Real Estate		Public Sector and IDA		Consumer Non - Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	2	$	---	$	108	$	---	$	---	$	---	$	110
Collectively evaluated for impairment		400		1,893		2,559		447		478		650		326		6,753
Total	$	400	$	1,895	$	2,559	$	555	$	478	$	650	$	326	$	6,863

	Loans as of March 31 , 2020
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non - Real Estate		Public Sector and IDA		Consumer Non - Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	608	$	4,142	$	917	$	---	$	4	$	---	$	5,671
Collectively evaluated for impairment		40,483		178,475		358,577		50,201		62,296		34,313		---		724,345
Total	$	40,483	$	179,083	$	362,719	$	51,118	$	62,296	$	34,317	$	---	$	730,016

	Loans as of December 31, 201 9
	Real Estate Construction		Consumer Real Estate		Commercial Real Estate		Commercial Non-Real Estate		Public Sector and IDA		Consumer Non - Real Estate		Unallocated		Total
Individually evaluated for impairment	$	---	$	759	$	3,608	$	918	$	---	$	4	$	---	$	5,289
Collectively evaluated for impairment		42,303		180,713		361,765		45,658		63,764		34,535		---		728,738
Total	$	42,303	$	181,472	$	365,373	$	46,576	$	63,764	$	34,539	$	---	$	734,027

A summary of ratios for the allowance for loan losses follows.

	As of and for the
	Three Months Ended March 31,						Year E nded December 31,
	2020			2019			2019
Ratio of allowance for loan losses to the end of period loans, net of unearned income and deferred fees and costs		0.99	%		1.02	%		0.94	%
Ratio of net charge-offs to average loans, net of unearned income and deferred fees and costs (1)		0.06	%		0.13	%		0.09	%

(

)

Net charge-offs are on an annualized basis.

A summary of nonperforming assets follows.

	March 31,						December 31,
	2020			2019			2019
Nonperforming assets:
Nonaccrual loans	$	261		$	294		$	164
Restructured loans in nonaccrual		3,191			3,440			3,211
Total nonperforming loans		3,452			3,734			3,375
Other real estate owned, net		1,584			2,025			1,612
Total nonperforming assets	$	5,036		$	5,759		$	4,987
Ratio of nonperforming assets to loans, net of unearned income and deferred fees and costs, plus other real estate owned		0.69	%		0.80	%		0.68	%
Ratio of allowance for loan losses to nonperforming loans (1)		209.73	%		197.11	%		203.35	%

(

)

The Company defines nonperforming loans as nonaccrual loans and restructured loans that are nonaccrual. Nonperforming loans do

not

include loans

days past due and still accruing or accruing restructured loans.

A summary of loans past due

days or more and impaired loans follows.

	March 31,						December 31,
	2020			2019			2019
Loans past due 90 days or more and still accruing	$	170		$	55		$	231
Ratio of loans past due 90 days or more and still accruing to loans, net of unearned income and deferred fees and costs		0.02	%		0.01	%		0.03	%
Accruing restructured loans	$	1,592		$	1,995		$	1,729
Impaired loans:
Impaired loans with no valuation allowance	$	4,557		$	5,212		$	4,174
Impaired loans with a valuation allowance		1,114			1,125			1,115
Total impaired loans	$	5,671		$	6,337		$	5,289
Valuation allowance		(110	)		(132	)		(110	)
Impaired loans, net of allowance	$	5,561		$	6,205		$	5,179
Average recorded investment in impaired loans (1)	$	5,677		$	6,597		$	5,359
Interest income recognized on impaired loans, after designation as impaired	$	26		$	49		$	171
Amount of income recognized on a cash basis	$	---		$	---		$	---

(

)

Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

Nonaccrual loan relationships that meet the Company’s balance threshold of

$250

and all TDRs are designated as impaired. The Company also designates as impaired other loan relationships that meet the Company’s balance threshold of

$250

and for which the Company does

not

expect to collect according to the note’s contractual terms.

interest income was recognized on nonaccrual loans for the

three

months ended

March 31, 2020

March 31, 2019

or for the year ended

December 31, 2019.

A detailed analysis of investment in impaired loans and associated reserves, segregated by loan class follows.

	Impaired Loans as of March 31, 2020
	Principal Balance		Total Recorded Investment (1)		Recorded Investment (1 ) for Which There is No Related Allowance		Recorded Investmen t (1) for Which There is a Related Allowance		Related Allowance
Co nsumer Real Estate (2)
Equity lines	$	100	$	100	$	100	$	---	$	---
Residential closed-end first liens		23		22		22		---		---
Investor-owned residential real estate		488		486		289		197		2
Commercial Real Estate (2)
Commercial real estate, owner-occupied		921		885		885		---		---
Commercial real estate, other		3,705		3,257		3,257		---		---
Commercial Non-Real Estate (2)
Commercial and industrial		917		917		---		917		108
Consumer Non - Real Estate (2)
Automobile		4		4		4		---		---
Total	$	6,158	$	5,671	$	4,557	$	1,114	$	110

(

)

Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

(

)

Only classes with impaired loans are shown.

	Impaired Loans as of December 31, 2019
	Principal Balance		Total Recorded Investment (1)		Recorded Investment (1) for Which There is No Related Allowance		Recorded Investment (1) for Which There is a Related Allowance		Related Allowance
Co nsumer Real Estate (2)
Equity lines	$	100	$	100	$	100	$	---	$	---
Residential closed-end first liens		221		221		221		---		---
Investor-owned residential real estate		441		438		241		197		2
Commercial Real Estate (2)
Multifamily real estate		278		278		278		---		---
Commercial real estate, owner occupied		929		895		895		---		---
Commercial real estate, other		2,867		2,435		2,435		---		---
Commercial Non-Real Estate (2)
Commercial and industrial		917		918		---		918		108
Consumer Non-Real Estate (2)
Automobile		4		4		4		---		---
Total	$	5,757	$	5,289	$	4,174	$	1,115	$	110

(

)

Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

(

)

Only classes with impaired loans are shown.

The following tables show the average recorded investment and interest income recognized for impaired loans.

	For the Three Months Ended March 31, 2020
	Average Recorded Investment (1)		Interest Income Recognized
Co nsumer Real Estate (2)
Equity lines	$	100	$	2
Residential closed-end first liens		22		---
Investor-owned residential real estate		487		4
Commercial Real Estate (2)
Commercial real estate, owner occupied		890		6
Commercial real estate, other		3,257		8
Commercial Non - Real Estate (2)
Commercial and industrial		917		6
Consumer Non-Real Estate (2)
Automobile		4		---
Total	$	5,677	$	26

(

)

Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

(

)

Only classes with impaired loans are shown.

	For the Three Months Ended March 31, 2019
	Average Recorded Investment (1)		Interest Income Recognized
Consumer Real Estate (2)
Residential closed-end first liens	$	710	$	9
Residential closed-end junior liens		142		2
Investor-owned residential real estate		570		9
Commercial Real Estate (2)
Multifamily real estate		471		7
Commercial real estate, owner occupied		1,207		5
Commercial real estate, other		2,484		11
Commercial Non - Real Estate (2)
Commercial and industrial		1,002		6
Consumer Non-Real Estate (2)
Automobile		11		---
Total	$	6,597	$	49

(

)

Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

(

)

Only classes with impaired loans are shown.

	For the Year Ended December 31, 2019
	Average Recorded Investment (1)		Interest Income Recognized
Consumer Real Estate (2)
Equity lines	$	98	$	6
Residential closed-end junior liens		225		11
Investor-owned residential real estate		439		17
Commercial Real Estate (2)
Multifamily real estate		284		12
Commercial real estate, owner occupied		913		41
Commercial real estate, other		2,435		59
Commercial Non - Real Estate (2)
Commercial and industrial		962		25
Co nsumer Non - Real Estate (2)
Automobile		3		---
Total	$	5,359	$	171

(

)

Recorded investment is net of charge-offs and interest paid while a loan is in nonaccrual status.

(

)

Only classes with impaired loans are shown.

The Company reviews nonaccrual loans on an individual loan basis to determine whether future payments are reasonably assured. To satisfy this criteria, the Company’s evaluation must determine that the underlying cause of the original delinquency or weakness that indicated nonaccrual status has been resolved, such as receipt of new guarantees, increased cash flows that cover the debt service or other resolution. Nonaccrual loans that demonstrate reasonable assurance of future payments and that have made at least

six

consecutive payments in accordance with repayment terms and timeframes

may

be returned to accrual status.

An analysis of past due and nonaccrual loans

follows.

March 31, 2020
	30 – 89 Days Past Due and Accruing		90 or M ore Days Past Due		90 or More Days Past Due and Accruing		Nonaccruals (2)
Real Estate Construction (1)
Construction, other	$	---	$	21	$	---	$	21
Consumer Real Estate (1)
Equity lines		106		---		---		---
Residential closed-end first liens		990		158		54		104
Residential closed-end junior liens		---		83		83		---
Investor-owned residential real estate		109		264		---		263
Commercial Real Estate (1)
Commercial real estate, owner-occupied		---		287		---		510
Commercial real estate, other		838		---		---		2,419
Commercial Non- Real Estate (1)
Commercial and industrial		412		133		---		132
Consumer Non - Real Estate (1)
Credit cards		2		---		---		---
Automobile		293		22		22		---
Other consumer loans		103		11		11		3
Total	$	2,853	$	979	$	170	$	3,452

(

)

Only classes with past due or nonaccrual loans are shown.

(

)

Includes current and past due loans in nonaccrual status. Includes impaired loans in nonaccrual status.

December 31, 2019
	30 – 89 Days Past Due and Accruing		90 or M ore Days Past Due		90 or More Days Past Due and Accruing		Nonaccruals (2)
Real Estate Construction (1)
Construction, other	$	19	$	---	$	---	$	---
Consumer Real Estate (1)
Residential closed-end first liens		499		210		188		22
Residential closed-end junior liens		83		---		---		---
Investor-owned residential real estate		---		264		---		264
Commercial Real Estate (1)
Multifamily real estate		94		---		---		---
Commercial real estate, owner occupied		---		287		---		514
Commercial real estate, other		---		---		---		2,435
Commercial Non - Real Estate (1)
Commercial and industrial		45		153		17		136
Consumer Non - Real Estate (1)
Credit cards		4		---		---		---
Automobile		256		14		14		4
Other consumer loans		70		12		12		---
Total	$	1,070	$	940	$	231	$	3,375

(

)

Only classes with past due or nonaccrual loans are shown.

(

)

Includes current and past due loans in nonaccrual status. Includes impaired loans in nonaccrual status.

The estimate of credit risk for non-impaired loans is obtained by applying allocations for internal and external factors. The allocations are increased for loans that exhibit greater credit quality risk.

Credit quality indicators, which the Company terms risk grades, are assigned through the Company’s credit review function for larger loans and selective review of loans that fall below credit review thresholds. Loans that do

not

indicate heightened risk are graded as “pass.” Consumer loans are risk graded “classified” when they become

days past due. Loans that are

not

consumer loans that appear to have elevated credit risk because of frequent or persistent past due status, which is less than

days, or that show weakness in the borrower’s financial condition are risk graded “special mention.” Loans that are

not

consumer loans with frequent or persistent delinquency exceeding

days or that exhibit a higher level of weakness in the borrower’s financial condition are graded classified. Classified loans have regulatory risk ratings of “substandard” and “doubtful.” Allocations are increased by

50%

and by

100%

for loans with grades of “special mention” and “classified,” respectively.

Determination of risk grades was completed for the portfolio as of

March 31, 2020

and

December 31, 2019.

The following displays collectively evaluated loans by credit quality indicator.

March 31, 2020
	Pass (1)		Special Mention (1)		Classified (1)
Real Estate Construction
Construction, 1-4 family residential	$	7,610	$	---	$	---
Construction, other		32,852		---		21
Consumer Real Estate
Equity lines		16,619		---		37
Residential closed-end first liens		92,190		---		665
Residential closed-end junior liens		3,711		---		83
Investor-owned residential real estate		65,147		---		23
Commercial Real Estate
Multifamily residential real estate		83,688		---		---
Commercial real estate owner-occupied		130,191		17		133
Commercial real estate, other		144,548		---		---
Commercial Non - Real Estate
Commercial and industrial		49,932		136		133
Public Sector and IDA
States and political subdivisions		62,296		---		---
Consumer Non - Real Estate
Credit cards		5,231		---		---
Automobile		13,994		---		24
Other consumer		15,059		---		5
Total	$	723,068	$	153	$	1,124

(

)

Excludes impaired, if any.

The following displays collectively evaluated loans by credit quality indicator.

December 31, 201 9
	Pass (1)		Special Mention (1)		Classified (1)
Real Estate Construction
Construction, 1-4 family residential	$	7,590	$	---	$	---
Construction, other		34,713		---		---
Consumer Real Estate
Equity lines		16,435		---		---
Residential closed-end first liens		94,814		---		517
Residential closed-end junior liens		3,861		---		---
Investor-owned residential real estate		65,063		---		23
Commercial Real Estate
Multifamily residential real estate		87,934		---		94
Commercial real estate owner-occupied		127,937		---		164
Commercial real estate, other		145,636		---		---
Commercial Non - Real Estate
Commercial and industrial		45,387		135		136
Public Sector and IDA
States and political subdivisions		63,764		---		---
Consumer Non - Real Estate
Credit cards		5,703		---		---
Automobile		14,810		---		19
Other consumer		13,995		---		8
Total	$	727,642	$	135	$	961

(

)

Excludes impaired, if any.

Sales

Purchases and Reclassification of Loans

The Company finances mortgages under “best efforts” contracts with mortgage purchasers. The mortgages are designated as held for sale upon initiation. There have been

major reclassifications from portfolio loans to held for sale. Occasionally, the Company purchases or sells participations in loans. All participation loans purchased met the Company’s normal underwriting standards at the time the participation was entered. Participation loans are included in the appropriate portfolio balances to which the allowance methodology is applied.

Troubled Debt Restructurings

From time to time the Company modifies loans in a TDR. Total TDRs amounted to

$4,783

March 31, 2020,

$4,940

December 31, 2019,

and

$5,435

March 31, 2019.

All of the Company’s TDR loans are fully funded and

further increase in credit is available.

During the

three

months ended

March 31, 2020

and

2019,

the Company classified

additional loans as TDRs. As of

March 31, 2020,

the Company executed principal and/or interest deferrals on

loans with balances totaling

$37,703

for COVID-

related hardship. These deferrals were

more than

six

months in duration and were for loans

not

more than

days past due as of

December 31, 2019.

As such, they were

not

considered TDRs based on the relief provisions of the CARES Act and recent interagency regulatory guidance. The Company also provided relief to

loan affected by the pandemic with a rate reduction, which is

not

considered a TDR at this time. In the period subsequent to

March 31, 2020

and through

April 30, 2020,

the Company continued to provide COVID-

related relief and executed additional deferrals of principal and/or interest on

149

loans with outstanding balances of

$48,180,

and other modifications to

loans with balances aggregating to

$19,683.

The Company analyzed its TDR portfolio for loans that defaulted during the

three

month periods ended

March 31, 2020

and

March 31, 2019,

and that were modified within

months prior to default. The Company defines default as

one

or more payments that occur more than

days past the due date, charge-offs, or foreclosure after the date of restructuring.

Of the Company’s TDRs at

March 31, 2020,

none

of the defaulted TDRs were modified within

months prior to default. All of the defaulted TDRs are in nonaccrual status as of

March 31, 2020.

Of the Company's TDRs at

March 31, 2019,

consumer real estate loans totaling

$263,

all part of

one

relationship, defaulted within

months of modification. The impairment measurement was based upon the fair value of collateral, less estimated cost to sell, and resulted in

allocation. One commercial real estate loan defaulted within

months of modification. The impairment measurement was based upon the fair value of collateral, less estimated cost to sell, and resulted in

allocation. All of the defaulted loans were in nonaccrual status while the Company works with the borrowers to recover its investment.