NOTE 3 – LOANS/LEASES RECEIVABLE

The composition of the loan/lease portfolio as of June 30, 2019 and December 31, 2018 is presented as follows:



	As of June 30,		As of December 31,
	2019		2018
	(dollars in thousands)

C&I loans *	$	1,548,657	$	1,429,410
CRE loans
Owner-occupied CRE		494,638		500,654
Commercial construction, land development, and other land		312,578		236,787
Other non owner-occupied CRE		1,030,257		1,028,670
		1,837,473		1,766,111

Direct financing leases **		101,180		117,969
Residential real estate loans ***		293,479		290,759
Installment and other consumer loans		120,947		119,381
		3,901,736		3,723,630
Plus deferred loan/lease origination costs, net of fees		8,783		9,124
		3,910,519		3,732,754
Less allowance		(41,104)		(39,847)
	$	3,869,415	$	3,692,907
** Direct financing leases:
Net minimum lease payments to be received	$	111,764	$	130,371
Estimated unguaranteed residual values of leased assets		690		828
Unearned lease/residual income		(11,274)		(13,230)
		101,180		117,969
Plus deferred lease origination costs, net of fees		2,760		3,642
		103,940		121,611
Less allowance		(1,459)		(1,792)
	$	102,481	$	119,819

* Includes equipment financing agreements outstanding at m2, totaling $122.6 million and $103.4 million as of June 30, 2019 and December 31, 2018, respectively.

** Management performs an evaluation of the estimated unguaranteed residual values of leased assets on an annual basis, at a minimum. The evaluation consists of discussions with reputable and current vendors, which is combined with management's expertise and understanding of the current states of particular industries to determine informal valuations of the equipment. As necessary and where available, management will utilize valuations by independent appraisers. The large majority of leases with residual values contain a lease options rider, which requires the lessee to pay the residual value directly, finance the payment of the residual value, or extend the lease term to pay the residual value. In these cases, the residual value is protected and the risk of loss is minimal. There were no losses related to residual values for the three and six months ended June 30, 2019 and 2018.

*** Includes residential real estate loans held for sale totaling $4.2 million and $1.3 million as of June 30, 2019 and December 31, 2018, respectively.

Changes in accretable yield for acquired loans were as follows:


	Three months ended June 30, 2019						Six months ended June 30, 2019
	PCI		Performing				PCI		Performing
	Loans		Loans		Total		Loans		Loans		Total
	(dollars in thousands)

Balance at the beginning of the period	$	(319)	$	(8,830)	$	(9,149)	$	(667)	$	(9,656)	$	(10,323)
Reclassification of nonaccretable discount to accretable		(159)		—		(159)		(159)		—		(159)
Accretion recognized		327		812		1,139		675		1,638		2,313
Balance at the end of the period	$	(151)	$	(8,018)	$	(8,169)	$	(151)	$	(8,018)	$	(8,169)


	Three months ended June 30, 2018						Six months ended June 30, 2018
	PCI		Performing				PCI		Performing
	Loans		Loans		Total		Loans		Loans		Total
	(dollars in thousands)

Balance at the beginning of the period	$	(157)	$	(5,659)	$	(5,816)	$	(191)	$	(6,280)	$	(6,471)
Accretion recognized		15		608		623		49		1,229		1,278
Balance at the end of the period	$	(142)	$	(5,051)	$	(5,193)	$	(142)	$	(5,051)	$	(5,193)

The aging of the loan/lease portfolio by classes of loans/leases as of June 30, 2019 and December 31, 2018 is presented as follows:


	As of June 30, 2019
										Accruing Past
				30-59 Days			60-89 Days			Due 90 Days or			Nonaccrual
Classes of Loans/Leases	Current			Past Due			Past Due			More			Loans/Leases			Total
	(dollars in thousands)

C&I	$	1,540,661		$	4,136		$	307		$	—		$	3,553		$	1,548,657
CRE
Owner-Occupied CRE		493,877			571			—			—			190			494,638
Commercial Construction, Land Development, and Other Land		312,288			96			—			—			194			312,578
Other Non Owner-Occupied CRE		1,024,769			67			11			—			5,410			1,030,257
Direct Financing Leases		98,581			971			80			—			1,548			101,180
Residential Real Estate		291,605			190			160			54			1,470			293,479
Installment and Other Consumer		120,082			78			—			4			783			120,947
	$	3,881,863		$	6,109		$	558		$	58		$	13,148		$	3,901,736

As a percentage of total loan/lease portfolio		99.49	%		0.16	%		0.01	%		0.00	%		0.34	%		100.00	%


	As of December 31, 2018
										Accruing Past
				30-59 Days			60-89 Days			Due 90 Days or			Nonaccrual
Classes of Loans/Leases	Current			Past Due			Past Due			More			Loans/Leases			Total
	(dollars in thousands)

C&I	$	1,423,406		$	930		$	597		$	389		$	4,088		$	1,429,410
CRE
Owner-Occupied CRE		500,138			—			193			107			216			500,654
Commercial Construction, Land Development, and Other Land		234,704			1,764			—			—			319			236,787
Other Non Owner-Occupied CRE		1,022,664			484			—			—			5,522			1,028,670
Direct Financing Leases		114,078			1,642			488			—			1,761			117,969
Residential Real Estate		284,844			3,877			206			89			1,743			290,759
Installment and Other Consumer		118,343			356			24			47			611			119,381
	$	3,698,177		$	9,053		$	1,508		$	632		$	14,260		$	3,723,630

As a percentage of total loan/lease portfolio		99.32	%		0.24	%		0.04	%		0.02	%		0.38	%		100.00	%

NPLs by classes of loans/leases as of June 30, 2019 and December 31, 2018 are presented as follows:


	As of June 30, 2019
	Accruing Past
	Due 90 Days or		Nonaccrual						Percentage of
Classes of Loans/Leases	More*		Loans/Leases*		Accruing TDRs		Total NPLs		Total NPLs
	(dollars in thousands)

C&I	$	—	$	3,553	$	1,112	$	4,665	32.13	%
CRE
Owner-Occupied CRE		—		190		104		294	2.02	%
Commercial Construction, Land Development, and Other Land		—		194		—		194	1.34	%
Other Non Owner-Occupied CRE		—		5,410		—		5,410	37.26	%
Direct Financing Leases		—		1,548		97		1,645	11.33	%
Residential Real Estate		54		1,470		—		1,524	10.50	%
Installment and Other Consumer		4		783		—		787	5.42	%
	$	58	$	13,148	$	1,313	$	14,519	100.00	%

* Nonaccrual loans/leases included $2.8 million of TDRs, including $28 thousand in C&I loans, $2.2 million in CRE loans, $314 thousand in direct financing leases, $286 thousand in residential real estate loans, and $2 thousand in installment loans.


	As of December 31, 2018
	Accruing Past
	Due 90 Days or		Nonaccrual						Percentage of
Classes of Loans/Leases	More*		Loans/Leases **		Accruing TDRs		Total NPLs		Total NPLs
		(dollars in thousands)

C&I	$	389	$	4,088	$	454	$	4,931	26.58	%
CRE
Owner-Occupied CRE		107		216		—		323	1.74	%
Commercial Construction, Land Development, and Other Land		—		319		—		319	1.72	%
Other Non Owner-Occupied CRE		—		5,522		2,984		8,506	45.86	%
Direct Financing Leases		—		1,761		111		1,872	10.09	%
Residential Real Estate		89		1,743		100		1,932	10.41	%
Installment and Other Consumer		47		611		9		667	3.60	%
	$	632	$	14,260	$	3,658	$	18,550	100.00	%

* As of December 31, 2018 accruing past due 90 days or more included $496 thousand of TDRs, including $389 thousand in C&I loans and $107 thousand in CRE loans.

** Nonaccrual loans/leases included $2.3 million of TDRs, including $265 thousand in C&I loans, $1.4 million in CRE loans, $321 thousand in direct financing leases, $344 thousand in residential real estate loans, and $3 thousand in installment loans.

Changes in the allowance by portfolio segment for the three and six months ended June 30, 2019 and 2018, respectively, are presented as follows:


	Three Months Ended June 30, 2019
					Direct Financing		Residential Real		Installment and
	C&I		CRE		Leases		Estate		Other Consumer		Total
	(dollars in thousands)

Balance, beginning	$	17,260	$	18,303	$	1,606	$	2,538	$	1,457	$	41,164
Provisions (credits) charged to expense		1,116		414		331		86		(6)		1,941
Loans/leases charged off		(193)		(1,369)		(497)		(73)		(20)		(2,152)
Recoveries on loans/leases previously charged off		65		15		19		31		21		151
Balance, ending	$	18,248	$	17,363	$	1,459	$	2,582	$	1,452	$	41,104


	Three Months Ended June 30, 2018
					Direct Financing		Residential Real		Installment and
	C&I		CRE		Leases		Estate		Other Consumer		Total
	(dollars in thousands)

Balance, beginning	$	15,065	$	14,938	$	2,730	$	2,375	$	1,424	$	36,532
Provisions (credits) charged to expense		777		872		688		57		(93)		2,301
Loans/leases charged off		(729)		—		(794)		—		(1)		(1,524)
Recoveries on loans/leases previously charged off		121		9		100		1		5		236
Balance, ending	$	15,234	$	15,819	$	2,724	$	2,433	$	1,335	$	37,545


	Six Months Ended June 30, 2019
					Direct Financing		Residential Real		Installment and
	C&I		CRE		Leases		Estate		Other Consumer		Total
	(dollars in thousands)

Balance, beginning	$	16,420	$	17,719	$	1,792	$	2,557	$	1,359	$	39,847
Provisions charged to expense		2,123		948		776		68		160		4,075
Loans/leases charged off		(527)		(1,369)		(1,149)		(73)		(94)		(3,212)
Recoveries on loans/leases previously charged off		232		65		40		30		27		394
Balance, ending	$	18,248	$	17,363	$	1,459	$	2,582	$	1,452	$	41,104


	Six Months Ended June 30, 2018
					Direct Financing		Residential Real		Installment and
	C&I		CRE		Leases		Estate		Other Consumer		Total
	(dollars in thousands)

Balance, beginning	$	14,323	$	13,963	$	2,382	$	2,466	$	1,222	$	34,356
Provisions charged to expense		1,585		1,837		1,293		18		108		4,841
Loans/leases charged off		(824)		—		(1,079)		(52)		(6)		(1,961)
Recoveries on loans/leases previously charged off		150		19		128		1		11		309
Balance, ending	$	15,234	$	15,819	$	2,724	$	2,433	$	1,335	$	37,545

The allowance by impairment evaluation and by portfolio segment as of June 30, 2019 and December 31, 2018 is presented as follows:


	As of June 30, 2019
							Direct Financing			Residential Real			Installment and
	C&I			CRE			Leases			Estate			Other Consumer			Total
	(dollars in thousands)

Allowance for impaired loans/leases	$	1,085		$	445		$	93		$	192		$	152		$	1,967
Allowance for nonimpaired loans/leases		17,163			16,918			1,366			2,390			1,300			39,137
	$	18,248		$	17,363		$	1,459		$	2,582		$	1,452		$	41,104

Impaired loans/leases	$	4,520		$	7,736		$	1,860		$	1,628		$	1,052		$	16,796
Nonimpaired loans/leases		1,544,137			1,829,737			99,320			291,851			119,895			3,884,940
	$	1,548,657		$	1,837,473		$	101,180		$	293,479		$	120,947		$	3,901,736

Allowance as a percentage of impaired loans/leases		24.00	%		5.75	%		5.00	%		11.79	%		14.45	%		11.71	%
Allowance as a percentage of nonimpaired loans/leases		1.11	%		0.92	%		1.38	%		0.82	%		1.08	%		1.01	%
Total allowance as a percentage of total loans/leases		1.18	%		0.94	%		1.44	%		0.88	%		1.20	%		1.05	%


	As of December 31, 2018
							Direct Financing			Residential Real			Installment and
	C&I			CRE			Leases			Estate			Other Consumer			Total
	(dollars in thousands)

Allowance for impaired loans/leases	$	973		$	2,124		$	194		$	257		$	111		$	3,659
Allowance for nonimpaired loans/leases		15,447			15,595			1,598			2,300			1,248			36,188
	$	16,420		$	17,719		$	1,792		$	2,557		$	1,359		$	39,847

Impaired loans/leases	$	4,499		$	10,447		$	2,249		$	2,110		$	898		$	20,203
Nonimpaired loans/leases		1,424,911			1,755,664			115,720			288,649			118,483			3,703,427
	$	1,429,410		$	1,766,111		$	117,969		$	290,759		$	119,381		$	3,723,630

Allowance as a percentage of impaired loans/leases		21.62	%		20.33	%		8.63	%		12.18	%		12.38	%		18.11	%
Allowance as a percentage of nonimpaired loans/leases		1.08	%		0.89	%		1.38	%		0.80	%		1.05	%		0.98	%
Total allowance as a percentage of total loans/leases		1.15	%		1.00	%		1.52	%		0.88	%		1.14	%		1.07	%

Information for impaired loans/leases is presented in the tables below. The recorded investment represents customer balances net of any partial charge-offs recognized on the loan/lease. The unpaid principal balance represents the recorded balance outstanding on the loan/lease prior to any partial charge-offs.

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the six months ended June 30, 2019 are presented as follows:



											Interest Income
							Average				Recognized for
	Recorded		Unpaid Principal		Related		Recorded		Interest Income		Cash Payments
Classes of Loans/Leases	Investment		Balance		Allowance		Investment		Recognized		Received
	(dollars in thousands)

Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	2,048	$	2,088	$	—	$	1,680	$	52	$	52
CRE
Owner-Occupied CRE		216		232		—		187		11		11
Commercial Construction, Land Development, and Other Land		546		902		—		628		13		13
Other Non Owner-Occupied CRE		3,417		4,296		—		4,183		92		92
Direct Financing Leases		1,600		1,600		—		1,901		16		16
Residential Real Estate		810		1,001		—		765		1		1
Installment and Other Consumer		875		875		—		797		7		7
	$	9,512	$	10,994	$	—	$	10,141	$	192	$	192

Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	2,472	$	2,478	$	1,085	$	1,917	$	18	$	18
CRE
Owner-Occupied CRE		124		124		21		129		—		—
Commercial Construction, Land Development, and Other Land		142		142		31		145		—		—
Other Non Owner-Occupied CRE		3,291		3,291		393		1,588		—		—
Direct Financing Leases		260		260		93		196		1		1
Residential Real Estate		818		818		192		829		3		3
Installment and Other Consumer		177		177		152		136		—		—
	$	7,284	$	7,290	$	1,967	$	4,940	$	22	$	22

Total Impaired Loans/Leases:
C&I	$	4,520	$	4,566	$	1,085	$	3,597	$	70	$	70
CRE
Owner-Occupied CRE		340		356		21		316		11		11
Commercial Construction, Land Development, and Other Land		688		1,044		31		773		13		13
Other Non Owner-Occupied CRE		6,708		7,587		393		5,771		92		92
Direct Financing Leases		1,860		1,860		93		2,097		17		17
Residential Real Estate		1,628		1,819		192		1,594		4		4
Installment and Other Consumer		1,052		1,052		152		933		7		7
	$	16,796	$	18,284	$	1,967	$	15,081	$	214	$	214

Loans/leases, by classes of financing receivable, considered to be impaired as of and for the three months ended June 30, 2019 and 2018, respectively are presented as follows:


	Three Months Ended June 30, 2019						Three Months Ended June 30, 2018
					Interest Income						Interest Income
	Average				Recognized for		Average				Recognized for
	Recorded		Interest Income		Cash Payments		Recorded		Interest Income		Cash Payments
Classes of Loans/Leases	Investment		Recognized		Received		Investment		Recognized		Received
	(dollars in thousands)

Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	1,683	$	29	$	29	$	1,401	$	59	$	59
CRE
Owner-Occupied CRE		194		7		7		289		6		6
Commercial Construction, Land Development, and Other Land		603		6		6		—		—		—
Other Non Owner-Occupied CRE		3,985		22		22		1,105		—		—
Direct Financing Leases		1,795		7		7		2,199		3		3
Residential Real Estate		801		—		—		929		—		—
Installment and Other Consumer		816		3		3		101		—		—
	$	9,877	$	74	$	74	$	6,024	$	68	$	68

Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	2,046	$	9	$	9	$	353	$	2	$	2
CRE
Owner-Occupied CRE		127		—		—		145		—		—
Commercial Construction, Land Development, and Other Land		143		—		—		5,492		—		—
Other Non Owner-Occupied CRE		1,980		—		—		—		—		—
Direct Financing Leases		227		—		—		566		—		—
Residential Real Estate		822		1		1		512		3		3
Installment and Other Consumer		150		—		—		117		—		—
	$	5,495	$	10	$	10	$	7,185	$	5	$	5

Total Impaired Loans/Leases:
C&I	$	3,729	$	38	$	38	$	1,754	$	61	$	61
CRE
Owner-Occupied CRE		321		7		7		434		6		6
Commercial Construction, Land Development, and Other Land		746		6		6		5,492		—		—
Other Non Owner-Occupied CRE		5,965		22		22		1,105		—		—
Direct Financing Leases		2,022		7		7		2,765		3		3
Residential Real Estate		1,623		1		1		1,441		3		3
Installment and Other Consumer		966		3		3		218		—		—
	$	15,372	$	84	$	84	$	13,209	$	73	$	73

Loans/leases, by classes of financing receivable, considered to be impaired as of December 31, 2018 are presented as follows:


			Unpaid
	Recorded		Principal		Related
Classes of Loans/Leases	Investment		Balance		Allowance
	(dollars in thousands)
Impaired Loans/Leases with No Specific Allowance Recorded:
C&I	$	1,846	$	4,540	$	—
CRE
Owner-Occupied CRE		106		106		—
Commercial Construction, Land Development, and Other Land		507		507		—
Other Non Owner-Occupied CRE		1,804		1,804		—
Direct Financing Leases		1,929		1,929		—
Residential Real Estate		984		1,058		—
Installment and Other Consumer		762		762		—
	$	7,938	$	10,706	$	—

Impaired Loans/Leases with Specific Allowance Recorded:
C&I	$	2,653	$	2,653	$	973
CRE
Owner-Occupied CRE		304		660		39
Commercial Construction, Land Development, and Other Land		149		149		33
Other Non Owner-Occupied CRE		7,577		7,577		2,052
Direct Financing Leases		320		320		194
Residential Real Estate		1,126		1,126		257
Installment and Other Consumer		136		136		111
	$	12,265	$	12,621	$	3,659

Total Impaired Loans/Leases:
C&I	$	4,499	$	7,193	$	973
CRE
Owner-Occupied CRE		410		766		39
Commercial Construction, Land Development, and Other Land		656		656		33
Other Non Owner-Occupied CRE		9,381		9,381		2,052
Direct Financing Leases		2,249		2,249		194
Residential Real Estate		2,110		2,184		257
Installment and Other Consumer		898		898		111
	$	20,203	$	23,327	$	3,659

Impaired loans/leases for which no allowance has been provided have adequate collateral, based on management's current estimates.

For C&I and CRE loans, the Company's credit quality indicator consists of internally assigned risk ratings. Each commercial loan is assigned a risk rating upon origination. The risk rating is reviewed every 15 months, at a minimum, and on an as-needed basis depending on the specific circumstances of the loan.

For certain C&I loans (equipment financing agreements), direct financing leases, residential real estate loans, and installment and other consumer loans, the Company's credit quality indicator is performance determined by delinquency status. Delinquency status is updated daily by the Company's loan system.

For each class of financing receivable, the following presents the recorded investment by credit quality indicator as of June 30, 2019 and December 31, 2018:


	As of June 30, 2019
			CRE
					Non-Owner Occupied
					Commercial
					Construction,
					Land
			Owner-Occupied		Development,						As a % of
Internally Assigned Risk Rating	C&I		CRE		and Other Land		Other CRE		Total		Total
	(dollars in thousands)

Pass (Ratings 1 through 5)	$	1,398,762	$	487,200	$	308,269	$	1,008,427	$	3,202,658	98.14	%
Special Mention (Rating 6)		9,811		4,236		64		5,802		19,913	0.61	%
Substandard (Rating 7)		17,460		3,202		4,245		16,028		40,935	1.25	%
Doubtful (Rating 8)		—		—		—		—		—	—	%
	$	1,426,033	$	494,638	$	312,578	$	1,030,257	$	3,263,506	100.00	%


	As of June 30, 2019
			Direct Financing		Residential Real		Installment and				As a % of
Delinquency Status *	C&I		Leases		Estate		Other Consumer		Total		Total
	(dollars in thousands)

Performing	$	121,836	$	99,536	$	291,955	$	120,160	$	633,487	99.26	%
Nonperforming		788		1,644		1,524		787		4,743	0.74	%
	$	122,624	$	101,180	$	293,479	$	120,947	$	638,230	100.00	%


	As of December 31, 2018
			CRE
					Non-Owner Occupied
					Commercial
					Construction,
					Land
			Owner-Occupied		Development,						As a % of
Internally Assigned Risk Rating	C&I		CRE		and Other Land		Other CRE		Total		Total
	(dollars in thousands)

Pass (Ratings 1 through 5)	$	1,294,418	$	487,949	$	230,473	$	1,008,626	$	3,021,466	97.72	%
Special Mention (Rating 6)		23,302		9,599		3,848		5,309		42,058	1.36	%
Substandard (Rating 7)		8,286		3,106		2,466		14,735		28,593	0.92	%
Doubtful (Rating 8)		—		—		—		—		—	—	%
	$	1,326,006	$	500,654	$	236,787	$	1,028,670	$	3,092,117	100.00	%


	As of December 31, 2018
			Direct Financing		Residential Real		Installment and				As a % of
Delinquency Status *	C&I		Leases		Estate		Other Consumer		Total		Total
	(dollars in thousands)

Performing	$	102,713	$	116,097	$	288,827	$	118,714	$	626,351	99.18	%
Nonperforming		691		1,872		1,932		667		5,162	0.82	%
	$	103,404	$	117,969	$	290,759	$	119,381	$	631,513	100.00	%

* Performing = loans/leases accruing and less than 90 days past due. Nonperforming = loans/leases on nonaccrual, accruing loans/leases that are greater than or equal to 90 days past due, and accruing TDRs.

As of June 30, 2019 and December 31, 2018, TDRs totaled $4.1 million and $6.5 million, respectively.

For each class of financing receivable, the following presents the number and recorded investment of TDRs, by type of concession, that were restructured during the three and six months ended June 30, 2019 and 2018. The difference between the pre-modification recorded investment and the post-modification recorded investment would be any partial charge-offs at the time of the restructuring.


	For the three months ended June 30, 2019							For the three months ended June 30, 2018
		Pre-		Post-					Pre-		Post-
		Modification		Modification					Modification		Modification
	Number of	Recorded		Recorded		Specific		Number of	Recorded		Recorded		Specific
Classes of Loans/Leases	Loans / Leases	Investment		Investment		Allowance		Loans / Leases	Investment		Investment		Allowance
	(dollars in thousands)
CONCESSION - Significant Payment Delay
C&I	1	$	52	$	52	$	—	—	$	—	$	—	$	—
	1	$	52	$	52	$	—	—	$	—	$	—	$	—

CONCESSION - Foregiveness of Principal
C&I	1	$	587	$	537	$	—	—	$	—	$	—	$	—
	1	$	587	$	537	$	—	—	$	—	$	—	$	—

TOTAL	2	$	639	$	589	$	—	—	$	—	$	—	$	—


	For the six months ended June 30, 2019							For the six months ended June 30, 2018
		Pre-		Post-					Pre-		Post-
		Modification		Modification					Modification		Modification
	Number of	Recorded		Recorded		Specific		Number of	Recorded		Recorded		Specific
Classes of Loans/Leases	Loans/Leases	Investment		Investment		Allowance		Loans/Leases	Investment		Investment		Allowance
	(dollars in thousands)
CONCESSION - Significant Payment Delay
C&I	2	$	71	$	71	$	—	—	$	—	$	—	$	—
Residential Real Estate	—		—		—		—	1		46		46		—
Direct Financing Leases	3		103		103		5	2		48		48		—
	5	$	174	$	174	$	5	3	$	94	$	94	$	—

CONCESSION - Forgiveness of Principal
C&I	1	$	587	$	537	$	—	—	$	—	$	—	$	—
	1	$	587	$	537	$	—	—	$	—	$	—	$	—

TOTAL	6	$	761	$	711	$	5	3	$	94	$	94	$	—

Of the loans restructured during the six months ended June 30, 2019, two with post-modification recorded balances of $65 thousand were on nonaccrual. Of the loans restructured during the six months ended June 30, 2018, one with a post-modification recorded balance of $46 thousand was on nonaccrual.

For the three and six months ended June 30, 2019, three of the Company's TDRs redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status. Two of these TDRs were related to one customer whose leases were restructured in the first quarter of 2019 with pre-modification balances totaling $66 thousand. The other TDR related to a customer whose loan was restructured in the third quarter of 2018 with an original pre-modification balance of $2.9 million and a current pre-modification balance of $1.5 million and a partial charge off of $879 thousand in the second quarter of 2019.

For the three and six months ended June 30, 2018, seven of the Company's TDRs redefaulted within 12 months subsequent to restructure where default is defined as delinquency of 90 days or more and/or placement on nonaccrual status. Three of these TDRs were related to one customer whose loans were restructured in the second quarter of 2017 with pre-modification balances totaling $78 thousand and the other TDRs related to other customers whose loans were restructured in the second and third quarters of 2017 with pre-modification balances totaling $378 thousand.

Not included in the table above, the Company had three TDRs that were restructured and charged off for the six months ended June 30, 2019, totaling $161 thousand. The Company had eight TDRs that were restructured and charged off for the six months ended June 30, 2018, totaling $577 thousand.