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Loans
 6 Months Ended
Jun. 30, 2021
Loans and Leases Receivable Disclosure [Abstract]  
Loans Loans
 
The composition of the loan portfolio at June 30, 2021 and December 31, 2020 was as follows:
 
June 30, 2021December 31, 2020
(In thousands)Amortized CostAmortized CostAccrued Interest ReceivableRecorded Investment
Commercial, financial and agricultural: (1)
$1,588,989 $6,528 $1,595,517 
Commercial, financial and agricultural (1)
$1,211,258 (2)(2)(2)
PPP loans248,880 (2)(2)(2)
Overdrafts1,536 (2)(2)(2)
Commercial real estate (1)
1,777,806 1,748,189 6,017 1,754,206 
Construction real estate:  
Commercial210,681 226,991 572 227,563 
Retail118,819 116,430 235 116,665 
Residential real estate:  
Commercial517,114 526,222 1,161 527,383 
Mortgage1,062,865 1,096,358 947 1,097,305 
HELOC167,522 182,028 647 182,675 
Installment6,911 8,436 22 8,458 
Consumer:1,659,704 4,510 1,664,214 
Consumer1,683,749 (2)(2)(2)
GFSC3,750 (2)(2)(2)
Check loans2,082 (2)(2)(2)
Leases22,673 24,438 14 24,452 
Total$7,035,646 $7,177,785 $20,653 $7,198,438 
Allowance for credit losses(83,577)(85,675)
Net loans$6,952,069 $7,092,110 

(1) Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that were not broken out by class.
(2) 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 U.S. GAAP. Category was not broken out as a separate class at December 31, 2020.

In order to support customers, Park participated in the CARES Act Paycheck Protection Program ("PPP"). PPP loans were broken out as a separate class as of June 30, 2021. Included within commercial, financial and agricultural loans as of December 31, 2020 were $331.6 million of PPP loans. For its assistance in originating the first round of PPP loans during 2020, Park received an aggregate of $20.2 million in fees from the SBA, and for its assistance in originating additional PPP loans during 2021, Park received an aggregate of $12.9 million in fees from the SBA. During the three months ended June 30, 2021 and June 30, 2020, $5.0 million and $2.8 million, respectively, of PPP fee income was recognized within loan interest income. During the six months ended June 30, 2021 and June 30, 2020, $9.6 million and $2.8 million, respectively, of PPP fee income was recognized within loan interest income.

Loans are shown net of deferred origination fees, costs and unearned income of $26.8 million at June 30, 2021, and of $23.6 million at December 31, 2020, which represented a net deferred income position in both years. At June 30, 2021 and December 31, 2020, included in the net deferred origination fees, costs and unearned income was $9.3 million and $6.5 million, respectively, in net origination fees related to PPP loans. At June 30, 2021 and December 31, 2020, loans included purchase accounting adjustments of $5.6 million and $7.2 million, respectively, which represented a net deferred income position at each date. This fair market value purchase accounting adjustment related to loans which are PCD, and are expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans.
Overdrawn deposit accounts of $1.5 million and $2.0 million were reclassified to loans at June 30, 2021 and December 31, 2020, respectively. As of June 30, 2021, overdrafts were within their own class and as of December 31, 2020, were included in the commercial, financial and agricultural loan segment in the previous table.

Credit Quality
The following table presents the amortized cost of nonaccrual loans, accruing TDRs, and loans past due 90 days or more and still accruing, by class of loan, at June 30, 2021:
 
 June 30, 2021
(In thousands)Nonaccrual
Loans		Accruing
TDRs		Loans Past Due
90 Days
 or More
and Accruing		Total
Nonperforming
Loans
Commercial, financial and agricultural:
Commercial, financial and agricultural$19,655 $2,509 $— $22,164 
PPP loans— — 18 18 
Overdrafts— — — — 
Commercial real estate52,995 3,691 — 56,686 
Construction real estate:    
Commercial361 98 — 459 
Retail12 27 — 39 
Residential real estate:    
Commercial5,808 265 — 6,073 
Mortgage13,216 7,470 63 20,749 
HELOC1,297 773 259 2,329 
Installment160 1,632 — 1,792 
Consumer:
Consumer1,562 941 153 2,656 
GFSC159 14 22 195 
Check loans— — — — 
Leases1,535 — — 1,535 
Total loans$96,760 $17,420 $515 $114,695 
 
The following table presents the recorded investment in nonaccrual loans, accruing TDRs, and loans past due 90 days or more and still accruing, by class of loan, at December 31, 2020:

 December 31, 2020
(In thousands)Nonaccrual
Loans		Accruing
TDRs		Loans Past Due 90 Days or More and AccruingTotal
Nonperforming
Loans
Commercial, financial and agricultural$23,261 $5,619 $— $28,880 
Commercial real estate67,426 2,931 377 70,734 
Construction real estate:   
Commercial3,110 — — 3,110 
Mortgage14 31 — 45 
Residential real estate:    
Commercial4,304 253 — 4,557 
Mortgage14,016 8,400 416 22,832 
HELOC1,286 909 77 2,272 
Installment184 1,728 — 1,912 
Consumer2,172 1,017 724 3,913 
Leases1,595 — — 1,595 
Total loans$117,368 $20,888 $1,594 $139,850 

The following table provides additional detail on nonaccrual loans and the related ACL, by class of loan, at June 30, 2021:

June 30, 2021
(In thousands)Nonaccrual Loans With No ACLNonaccrual Loans With an ACLRelated ACL
Commercial, financial and agricultural:
Commercial, financial and agricultural$13,250 $6,405 $3,334 
PPP loans— — — 
Overdrafts— — — 
Commercial real estate50,922 2,073 360 
Construction real estate:
Commercial361 — — 
Retail— 12 — 
Residential real estate:
Commercial5,709 99 23 
Mortgage— 13,216 143 
HELOC— 1,297 161 
Installment— 160 37 
Consumer
Consumer— 1,562 493 
GFSC— 159 18 
Check loans— — — 
Leases569 966 205 
Total loans$70,811 $25,949 $4,774 
Nonaccrual commercial loans are evaluated on an individual basis and are excluded from the collective evaluation. Management’s general practice is to proactively charge down loans individually evaluated to the fair value of the underlying collateral. Nonaccrual consumer loans are collectively evaluated based on similar risk characteristics.

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

12/31/2020
(In thousands)Unpaid Principal BalanceRecorded InvestmentACL Allocated
With no related allowance recorded
Commercial, financial and agricultural$23,316 $22,970 $— 
Commercial real estate63,639 63,467 — 
Construction real estate:
Commercial3,110 3,110 — 
Residential real estate:
Commercial4,522 4,448 — 
Leases568 568 — 
With an allowance recorded
Commercial, financial and agricultural5,881 5,866 3,758 
Commercial real estate6,890 6,890 1,316 
Construction real estate:
Commercial— — — 
Residential real estate:
Commercial109 109 16 
Leases1,027 1,027 344 
Total$109,062 $108,455 $5,434 

The following table provides the amortized cost basis of collateral-dependent loans by class of loan, as of June 30, 2021:

 June 30, 2021
(In thousands)Real EstateBusiness AssetsOtherTotal
Commercial, financial and agricultural
Commercial, financial and agricultural$8,498 $12,958 $942 $22,398 
Commercial real estate63,276 41 60 63,377 
Construction real estate:
Commercial1,435 — — 1,435 
Residential real estate:
Commercial7,524 — — 7,524 
Mortgage379 — — 379 
HELOC140 — — 140 
Leases— 1,628 — 1,628 
Total loans$81,252 $14,627 $1,002 $96,881 
Interest income on nonaccrual loans individually evaluated for impairment is recognized on a cash basis only when Park expects to receive the entire recorded investment in the loans. Interest income on accruing TDRs individually evaluated for impairment continues to be recorded on an accrual basis. The following table presents interest income recognized on nonaccrual loans for the three-month and six-month periods ended June 30, 2021:

Interest Income Recognized
(In thousands)Three months ended
June 30, 2021		Six months ended
June 30, 2021
Commercial, financial and agricultural:
Commercial, financial and agricultural$50 $107 
PPP loans— — 
Overdrafts— — 
Commercial real estate507 1,022 
Construction real estate:
Commercial4 37 
Retail— 1 
Residential real estate:
Commercial74 120 
Mortgage64 143 
HELOC6 10 
Installment1 2 
Consumer:
Consumer25 48 
GFSC3 8 
Check loans— — 
Leases24 44 
Total loans$758 $1,542 

The following table presents the average recorded investment and interest income recognized subsequent to impairment on loans individually evaluated for impairment as of and for the three months and six months ended June 30, 2020:
  
Three months ended
June 30, 2020		Six months ended
June 30, 2020
(In thousands)Recorded Investment as of June 30, 2020Average Recorded InvestmentInterest Income RecognizedAverage Recorded InvestmentInterest Income Recognized
Commercial, financial and agricultural$30,183 $29,859 $180 30,931 384 
Commercial real estate54,071 49,599 409 46,582 890 
Construction real estate:
   Commercial631 493 4 460 8 
Residential real estate:
   Commercial5,257 5,400 78 3,960 101 
Leases1,641 506 — 346 — 
Total$91,783 $85,857 $671 $82,279 $1,383 
The following table presents the aging of the amortized cost in past due loans at June 30, 2021 by class of loan:

 June 30, 2021
(In thousands)Accruing Loans
Past Due 30-89
Days
Past Due 
Nonaccrual
Loans and Loans Past
Due 90 Days or
More and 
Accruing (1)
Total Past Due
Total Current (2)
Total 
Amortized Cost
Commercial, financial and agricultural:
Commercial, financial and agricultural$3,152 $11,688 $14,840 $1,196,418 $1,211,258 
PPP loans— 18 18 248,862 248,880 
Overdrafts— — — 1,536 1,536 
Commercial real estate76 722 798 1,777,008 1,777,806 
Construction real estate:
Commercial815 — 815 209,866 210,681 
Retail36 — 36 118,783 118,819 
Residential real estate:
Commercial— 391 391 516,723 517,114 
Mortgage6,222 6,321 12,543 1,050,322 1,062,865 
HELOC476 979 1,455 166,067 167,522 
Installment123 54 177 6,734 6,911 
Consumer:
Consumer2,178 261 2,439 1,681,310 1,683,749 
GFSC324 130 454 3,296 3,750 
Check loans6 — 6 2,076 2,082 
Leases15 37 52 22,621 22,673 
Total loans$13,423 $20,601 $34,024 $7,001,622 $7,035,646 

(1) Includes an aggregate of $0.5 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans.
(2) Includes an aggregate of $76.7 million of nonaccrual loans which were current in regards to contractual principal and interest payments.
The following table presents the aging of the recorded investment in past due loans at December 31, 2020 by class of loan:

 December 31, 2020
(in thousands)Accruing Loans
Past Due 30-89
Days
Past Due 
Nonaccrual
Loans and Loans Past
Due 90 Days or
More and 
Accruing (1)
Total Past Due
Total Current (2)
Total Recorded
Investment
Commercial, financial and agricultural$7,372 $13,968 $21,340 $1,574,177 $1,595,517 
Commercial real estate82 972 1,054 1,753,152 1,754,206 
Construction real estate:    
Commercial— 39 39 227,524 227,563 
Mortgage77 — 77 115,647 115,724 
Installment12 — 12 929 941 
Residential real estate:     
Commercial17 493 510 526,873 527,383 
Mortgage9,538 7,814 17,352 1,079,953 1,097,305 
HELOC805 810 1,615 181,060 182,675 
Installment67 71 138 8,320 8,458 
Consumer5,496 1,213 6,709 1,657,505 1,664,214 
Leases186 984 1,170 23,282 24,452 
Total loans$23,652 $26,364 $50,016 $7,148,422 $7,198,438 

(1) Includes an aggregate of $1.6 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans.
    (2) Includes an aggregate of $92.6 million of nonaccrual loans which were current in regards to contractual principal and interest payments.

Credit Quality Indicators
Management utilizes past due information as a credit quality indicator across the loan portfolio. Past due information at June 30, 2021 and December 31, 2020 is included in the previous tables. The past due information is the primary credit quality indicator within the following classes of loans: (1) overdrafts in the commercial, financial and agricultural portfolio segment; (2) retail loans in the construction real estate portfolio segment; (3) mortgage loans, HELOC and installment loans in the residential real estate portfolio segment; and (4) consumer loans, GFSC loans, and check loans in the consumer portfolio segment. The primary credit indicator for commercial loans is based on an internal grading system that grades all commercial loans on a scale from 1 to 8. Credit grades are continuously monitored by the responsible loan officer and adjustments are made when appropriate. A grade of 1 indicates little or no credit risk and a grade of 8 is considered a loss. Commercial loans that are pass-rated (graded a 1 through a 4) are considered to be of acceptable credit risk. Commercial loans graded a 5 (special mention) are considered to be watch list credits and a higher PD is applied to these loans. Loans classified as special mention have potential weaknesses that require management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of Park’s credit position at some future date. Commercial loans graded a 6 (substandard), also considered watch list credits, are considered to represent higher credit risk and, as a result, a higher PD is applied to these loans. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or the value 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 Park will sustain some loss if the deficiencies are not corrected. Commercial loans graded a 7 (doubtful) are shown as nonaccrual and Park generally charges these loans down to their fair value by taking a partial charge-off or recording a specific reserve. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Certain 6-rated loans and all 7-rated loans are placed on nonaccrual status and included within the impaired category. A loan is deemed impaired, and is individually evaluated, when management determines the borrower's ability to perform in accordance with the contractual loan agreement is in doubt. Any commercial loan graded an 8 (loss) is completely charged off.
Based on the most recent analysis performed, the risk category of loans by class of loans as of June 30, 2021 follows:

June 30, 2021Term Loans Amortized Cost Basis by Origination Year
(In thousands)20212020201920182017PriorRevolving Loans Amortized Cost BasisTotal
Commercial, financial and agricultural: Commercial, financial and agricultural (1)
Risk rating
Pass$128,054 $250,325 $134,327 $73,060 $51,532 $81,855 $463,559 $1,182,712 
Special Mention100 1,837 834 651 199 20 5,089 8,730 
Substandard1,039 1,794 358 1,302 741 8,129 1,202 14,565 
Doubtful1,257 41 221 492 1,938 730 572 5,251 
Total $130,450 $253,997 $135,740 $75,505 $54,410 $90,734 $470,422 $1,211,258 
Commercial, financial and agricultural: PPP
Risk rating
Pass$175,025 $73,855 $— $— $— $— $— $248,880 
Special Mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Total$175,025 $73,855 $— $— $— $— $— $248,880 
Commercial real estate (1)
Risk rating
Pass$190,442 $466,970 $279,205 $179,538 $126,126 $384,277 $8,339 $1,634,897 
Special Mention1,601 7,656 36,032 10,743 7,063 21,408 3,590 88,093 
Substandard207 3,908 6,541 12,912 10,427 19,810 442 54,247 
Doubtful— — — — 60 509 — 569 
Total$192,250 $478,534 $321,778 $203,193 $143,676 $426,004 $12,371 $1,777,806 
Construction real estate: Commercial
Risk rating
Pass$37,121 $90,656 $45,251 $6,447 $2,547 $6,041 $18,269 $206,332 
Special Mention— 2,913 98 — — — — 3,011 
Substandard— 57 8 976 — — 297 1,338 
Doubtful— — — — — — — — 
Total$37,121 $93,626 $45,357 $7,423 $2,547 $6,041 $18,566 $210,681 
Residential Real Estate: Commercial
Risk rating
Pass$71,502 $175,044 $70,072 $50,486 $31,383 $95,804 $14,825 $509,116 
Special Mention— — 108 81 — 332 277 798 
Substandard502 23 712 3,399 1,353 1,033 — 7,022 
Doubtful— — — 42 — — 136 178 
Total$72,004 $175,067 $70,892 $54,008 $32,736 $97,169 $15,238 $517,114 
Leases
Risk rating
Pass$3,970 $6,908 $4,585 $3,103 $1,164 $1,351 $— $21,081 
Special Mention— — — — — — — — 
Substandard— 426 210 74 25 36 — 771 
Doubtful— 491 172 37 53 68 — 821 
Total$3,970 $7,825 $4,967 $3,214 $1,242 $1,455 $— $22,673 
June 30, 2021Term Loans Amortized Cost Basis by Origination Year
(In thousands)20212020201920182017PriorRevolving Loans Amortized Cost BasisTotal
Total Commercial Loans
Risk rating
Pass$606,114 $1,063,758 $533,440 $312,634 $212,752 $569,328 $504,992 $3,803,018 
Special Mention1,701 12,406 37,072 11,475 7,262 21,760 8,956 100,632 
Substandard1,748 6,208 7,829 18,663 12,546 29,008 1,941 77,943 
Doubtful1,257 532 393 571 2,051 1,307 708 6,819 
Total$610,820 $1,082,904 $578,734 $343,343 $234,611 $621,403 $516,597 $3,988,412 

(1) Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class.

The table below presents the recorded investment by loan grade at December 31, 2020 for all commercial loans:
 
12/31/2020
(In thousands)5 Rated6 RatedNonaccrual and Accruing TDRsPCIPass-RatedRecorded
Investment
Commercial, financial and agricultural (1)
$14,638 $— $28,880 $337 $1,551,662 $1,595,517 
Commercial real estate (1)
87,439 117 70,357 7,461 1,588,832 1,754,206 
Construction real estate:
  Commercial164 — 3,110 1,002 223,287 227,563 
Residential real estate:
  Commercial798 22 4,557 1,510 520,496 527,383 
Leases331 — 1,595 112 22,414 24,452 
Total Commercial Loans$103,370 $139 $108,499 $10,422 $3,906,691 $4,129,121 

(1) Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that were not broken out by class.

Park considers the performance of the loan portfolio and its impact on the allowance for credit losses. For residential and consumer loan classes, Park also evaluates credit quality based on the aging status of the loan, which was previously presented, and by performing status. The following tables present the amortized cost in residential and consumer loans based on performing status. Park defines a loan as nonperforming if it is on nonaccrual status, designated as an accruing TDR, or is greater than 90 days past due and accruing.
June 30, 2021Term Loans Amortized Cost Basis by Origination Year
(In thousands)20212020201920182017PriorRevolving Loans Amortized Cost BasisTotal
Commercial, financial and agricultural: Overdrafts
Performing$1,536 $— $— $— $— $— $— $1,536 
Nonperforming— — — — — — — — 
Total $1,536 $— $— $— $— $— $— $1,536 
Construction Real Estate: Retail
Performing$26,301 $74,144 $10,309 $3,450 $1,960 $2,538 $78 $118,780 
Nonperforming— — — — 16 23 — 39 
Total $26,301 $74,144 $10,309 $3,450 $1,976 $2,561 $78 $118,819 
Residential Real Estate: Mortgage
Performing$145,384 $217,356 $137,995 $86,362 $70,931 $384,088 $— $1,042,116 
Nonperforming— — 703 981 979 18,086 — 20,749 
Total $145,384 $217,356 $138,698 $87,343 $71,910 $402,174 $— $1,062,865 
Residential Real Estate: HELOC
Performing$— $— $86 $23 $48 $2,999 $162,037 $165,193 
Nonperforming— — — — 74 1,853 402 2,329 
Total $— $— $86 $23 $122 $4,852 $162,439 $167,522 
Residential Real Estate: Installment
Performing$— $79 $645 $159 $1,329 $2,907 $— $5,119 
Nonperforming— 15 2 46 90 1,639 — 1,792 
Total $— $94 $647 $205 $1,419 $4,546 $— $6,911 
Consumer: Consumer
Performing$373,933 $620,977 $333,082 $160,404 $92,823 $89,690 $10,184 $1,681,093 
Nonperforming40 463 687 450 248 768 — 2,656 
Total $373,973 $621,440 $333,769 $160,854 $93,071 $90,458 $10,184 $1,683,749 
Consumer: GFSC
Performing$— $438 $2,210 $687 $181 $(106)$145 $3,555 
Nonperforming— 19 96 53 22 5 — 195 
Total $— $457 $2,306 $740 $203 $(101)$145 $3,750 
Consumer: Check loans
Performing$— $— $— $— $— $— $2,082 $2,082 
Nonperforming— — — — — — — — 
Total $— $— $— $— $— $— $2,082 $2,082 
Total Consumer Loans
Performing$547,154 $912,994 $484,327 $251,085 $167,272 $482,116 $174,526 $3,019,474 
Nonperforming
40 497 1,488 1,530 1,429 22,374 402 27,760 
Total $547,194 $913,491 $485,815 $252,615 $168,701 $504,490 $174,928 $3,047,234 


Loans and Leases Acquired with Deteriorated Credit Quality
In conjunction with the NewDominion acquisition, Park acquired loans with a book value of $277.9 million as of the July 1, 2018 acquisition date. These loans were recorded at the initial fair value of $272.8 million. Loans acquired with deteriorated credit quality (ASC 310-30) with a book value of $5.1 million were recorded at the initial fair value of $4.9 million. In conjunction with the Carolina Alliance acquisition, Park acquired loans and leases with a book value of $589.7 million as of the April 1, 2019 acquisition date. These loans and leases were recorded at the initial fair value of $578.6 million. Loans and leases acquired with deteriorated credit quality (ASC 310-30) with a book value of $19.9 million were recorded at the initial fair value of $18.4 million.
Upon adoption of CECL on January 1, 2021, $52,000 of credit mark on PCD loans was reclassified to the allowance for credit losses. At June 30, 2021, there was no allowance for credit losses on PCD loans. The carrying amount of loans acquired with deteriorated credit quality at June 30, 2021 and December 31, 2020 was $10.0 million and $11.2 million, respectively.

Troubled Debt Restructurings
Management typically classifies loans as TDRs when a borrower is experiencing financial difficulties and Park has granted a concession to the borrower as part of a modification or in the loan renewal process. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of the borrower's debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy. Management’s policy is to modify loans by extending the term or by granting a temporary or permanent contractual interest rate below the market rate, not by forgiving debt. A court's discharge of a borrower's debt in a Chapter 7 bankruptcy is considered a concession when the borrower does not reaffirm the discharged debt.

Additionally, Park is working with borrowers impacted by the COVID-19 pandemic and providing modifications to include either interest only deferral or principal and interest deferral, in each case, for initial periods up to 90 days. As necessary, Park is making available a second 90-day interest only deferral or principal and interest deferral bringing the total potential deferral period to six months. A majority of these modifications are excluded from TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. In accordance with this guidance, such modified loans will be considered current and will continue to accrue interest during the deferral period.

Certain other loans which were modified during the three-month and six-month periods ended June 30, 2021 and 2020 did not meet the definition of a TDR as the modification was a delay in a payment that was considered to be insignificant. Management considers a forbearance period of up to three months or a delay in payment of up to 30 days to be insignificant. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note. Management reviews all accruing TDRs quarterly to ensure payments continue to be made in accordance with the modified terms.

At June 30, 2021 and December 31, 2020, there were $21.3 million and $25.8 million, respectively, of TDRs included in the nonaccrual loan totals. At June 30, 2021 and December 31, 2020, $11.2 million and $12.9 million, respectively, of these nonaccrual TDRs were performing in accordance with the terms of the restructured notes. At June 30, 2021 and December 31, 2020, loans totaling $17.4 million and $20.9 million, respectively, were included in accruing TDR loan totals. Management will continue to review the restructured loans and may determine it is appropriate to move certain nonaccrual TDRs to accrual status in the future.

At June 30, 2021 and December 31, 2020, Park had commitments to lend $8.4 million and $6.7 million, respectively, of additional funds to borrowers whose outstanding loan terms had been modified in a TDR.
 
At June 30, 2021 and December 31, 2020, there were $0.3 million and $0.2 million, respectively, of specific reserves related to TDRs. Modifications made in 2021 and 2020 were largely the result of renewals and extending the maturity date of the loans at terms consistent with the original notes. These modifications were deemed to be TDRs primarily due to Park’s conclusion that the respective borrowers would likely not have qualified for similar terms through another lender. Many of the modifications deemed to be TDRs were previously identified as impaired loans, and thus were also previously evaluated for impairment under ASC 310. There were $18,000 of additional specific reserves recorded during both the three-month and six-month periods ended June 30, 2021 as a result of TDRs identified in the period. There were no additional specific reserves recorded during either the three-month or six-month periods ended June 30, 2020 as a result of TDRs identified in the period.

Quarterly, management reviews renewals/modifications of loans previously identified as TDRs to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms and the terms of the renewal/modification are considered to be market terms based on the current risk characteristics of the borrower, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed if the borrower has complied with the terms of the loan at the date of the renewal/modification and there was a reasonable expectation that the borrower will continue to comply with the terms of the loan subsequent to the date of the renewal/modification. The majority of these TDRs were originally considered restructurings in a prior year as a result of a renewal/modification with an interest rate that was not commensurate with the risk of the underlying loan at the time of the renewal/modification. There were no TDR classifications removed during the three-month period ended June 30, 2021. The TDR classification was removed on $3.9 million of loans during the six-
month period ended June 30, 2021. The TDR classification was removed on $884,000 of loans during the three-month and six-month periods ended June 30, 2020.

The terms of certain other loans were modified during the three-month period ended June 30, 2021 and 2020 that did not meet the definition of a TDR. Excluding COVID-19 related modifications, there were no substandard commercial loans modified during the three-month and six-month periods ended June 30, 2021, which did not meet the definition of a TDR. Excluding COVID-19 related modifications, there were $0.1 million and $0.2 million of substandard commercial loans modified during the three-month and six-month periods ended June 30, 2020, respectively, which did not meet the definition of a TDR. Excluding COVID-19 related modifications, consumer loans modified during the three-month and six-month periods ended June 30, 2021 which did not meet the definition of a TDR had a total recorded investment of $2.7 million and $3.7 million, respectively. Excluding COVID-19 related modifications, consumer loans modified during the three-month and six-month periods ended June 30, 2020 which did not meet the definition of a TDR had a total recorded investment of $39.4 million and $45.3 million, respectively. Many of these loans were to borrowers who were not experiencing financial difficulties but who were looking to reduce their cost of funds.

During the eighteen months ended June 30, 2021, Park modified 5,126 consumer loans, with an aggregate balance of $87.1 million, and modified 1,406 commercial loans, with an aggregate balance of $546.2 million, in each case related to a hardship caused by the COVID-19 pandemic and responses thereto. Of the $87.1 million in consumer COVID-19 related modifications, $1.9 million were already classified as TDRs due to previous modifications and $960,000 were classified as TDRs due to the COVID-19 modification. Of the $546.2 million in commercial COVID-19 related modifications, $6.2 million were already classified as TDRs due to previous modifications and $436,000 were classified as TDRs due to the COVID-19 modification. The remaining loans met the exclusion criteria for TDR accounting either in Section 4013 of the CARES Act or in applicable interagency guidance.
The following tables detail the number of contracts modified as TDRs during the three-month periods ended June 30, 2021 and 2020, as well as the amortized cost/recorded investment of these contracts at June 30, 2021 and 2020. The amortized cost/recorded investment pre- and post-modification is generally the same due to the fact that Park does not typically forgive principal.

 Three Months Ended
June 30, 2021
(In thousands)Number of
Contracts		AccruingNonaccrualTotal Amortized Cost
Commercial, financial and agricultural
Commercial, financial and agricultural3 $— $334 $334 
PPP loans— — — — 
Overdrafts— — — — 
Commercial real estate3 1,601 207 1,808 
Construction real estate:    
  Commercial1 98 — 98 
  Retail— — — — 
Residential real estate:    
  Commercial3 — 406 406 
  Mortgage4 58 195 253 
  HELOC4 134 33 167 
  Installment1 2 — 2 
Consumer:
Consumer42 77 289 366 
GFSC— — — — 
Check loans— — — — 
Leases1 — 362 362 
Total loans62 $1,970 $1,826 $3,796 

 Three Months Ended
June 30, 2020
(In thousands)Number of
Contracts		AccruingNonaccrualTotal
Recorded
Investment
Commercial, financial and agricultural3 $82 $2 $84 
Commercial real estate2 — 1,643 1,643 
Construction real estate:    
  Commercial— — — — 
  Mortgage— — — — 
  Installment— — — — 
Residential real estate:   
  Commercial1 — 16 16 
  Mortgage13 868 922 1,790 
  HELOC2 — 28 28 
  Installment5 108 32 140 
Consumer56 88 426 514 
Total loans82 $1,146 $3,069 $4,215 

Of those loans which were modified and determined to be a TDR during the three-month period ended June 30, 2021, $0.6 million were on nonaccrual status at December 31, 2020. Of those loans which were modified and determined to be a TDR during the three-month period ended June 30, 2020, $43,000 were on nonaccrual status at December 31, 2019.
The following tables detail the number of contracts modified as TDRs during the six-month periods ended June 30, 2021 and 2020, as well as the amortized cost/recorded investment of these contracts at June 30, 2021 and 2020. The amortized cost/recorded investment pre- and post-modification is generally the same due to the fact that Park does not typically forgive principal.

 Six Months Ended
June 30, 2021
(In thousands)Number of
Contracts		AccruingNonaccrualTotal Amortized Cost
Commercial, financial and agricultural
Commercial, financial and agricultural4 $— $334 $334 
PPP loans— — — — 
Overdrafts— — — — 
Commercial real estate8 1,601 1,099 2,700 
Construction real estate:— 
  Commercial1 98 — 98 
  Retail— — — — 
Residential real estate:— 
  Commercial3 — 406 406 
  Mortgage10 193 300 493 
  HELOC4 134 33 167 
  Installment6 42 28 70 
Consumer:— 
Consumer76 127 368 495 
GFSC— — — — 
Check loans— — — — 
Leases1 — 362 362 
Total loans113 $2,195 $2,930 $5,125 

 Six Months Ended
June 30, 2020
(In thousands)Number of
Contracts		AccruingNonaccrualTotal
Recorded
Investment
Commercial, financial and agricultural7 $82 $1,074 $1,156 
Commercial real estate4 1,141 1,703 2,844 
Construction real estate: 
  Commercial— — — — 
  Mortgage1 10 — 10 
  Installment1 14 — 14 
Residential real estate: 
  Commercial1 — 16 16 
  Mortgage19 980 1,123 2,103 
  HELOC5 3 37 40 
  Installment13 213 49 262 
Consumer113 136 539 675 
Total loans164 $2,579 $4,541 $7,120 

Of those loans which were modified and determined to be a TDR during the six-month period ended June 30, 2021, $1.6 million were on nonaccrual status at December 31, 2020. Of those loans which were modified and determined to be a TDR during the six-month period ended June 30, 2020, $0.3 million were on nonaccrual status at December 31, 2019.
The following tables present the amortized cost/recorded investment in loans which were modified as TDRs within the previous 12 months and for which there was a payment default during the three-month and six-month periods ended June 30, 2021 and 2020, respectively. For these tables, a loan is considered to be in default when it becomes 30 days contractually past due under the modified terms. The additional ACL resulting from the defaults on TDR loans was immaterial.
 
 Three Months Ended
June 30, 2021		Three Months Ended
June 30, 2020
(In thousands)Number of
Contracts		Amortized CostNumber of
Contracts		Recorded
Investment
Commercial, financial and agricultural:1 $4,043 
Commercial, financial and agricultural— $— (1)(1)
PPP loans— — (1)(1)
Overdrafts— — (1)(1)
Commercial real estate1 220 — — 
Construction real estate:
Commercial— — — — 
Retail— — 1 14 
Residential real estate:
Commercial— — 1 16 
Mortgage5 334 3 294 
HELOC— — 2 37 
Installment1 6 2 30 
Consumer20 179 
Consumer14 100 (1)(1)
GFSC— — (1)(1)
Check loans— — (1)(1)
Leases— — — — 
Total loans 21 $660 30 $4,613 

(1) 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 U.S. GAAP. Category was not broken out as a separate class at December 31, 2020.

Of the $0.7 million in modified TDRs which defaulted during the three-month period ended June 30, 2021, $44,000 were accruing loans and $0.6 million were nonaccrual loans. Of the $4.6 million in modified TDRs which defaulted during the three-month period ended June 30, 2020, $4.2 million were accruing loans and $0.4 million were nonaccrual loans.
 Six Months Ended
June 30, 2021		Six Months Ended
June 30, 2020
(In thousands)Number of
Contracts		Amortized CostNumber of
Contracts		Recorded
Investment
Commercial, financial and agricultural:2 4,051 
Commercial, financial and agricultural— — (1)(1)
PPP loans— — (1)(1)
Overdrafts— — (1)(1)
Commercial real estate1 220 — — 
Construction real estate:
Commercial— — — — 
Retail— — 1 14 
Residential real estate:
Commercial— — 1 16 
Mortgage6 373 3 294 
HELOC— — 2 37 
Installment2 34 2 30 
Consumer23 218 
Consumer17 113 (1)(1)
GFSC— — (1)(1)
Check loans— — (1)(1)
Leases1 362 — — 
Total loans 27 $1,102 34 $4,660 

(1) 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 U.S. GAAP. Category was not broken out as a separate class at December 31, 2020.

Of the $1.1 million in modified TDRs which defaulted during the six-month period ended June 30, 2021, $84,000 were accruing loans and $1.0 million were nonaccrual loans. Of the $4.7 million in modified TDRs which defaulted during the six-month period ended June 30, 2020, $4.2 million were accruing loans and $0.5 million were nonaccrual loans.