Loans and Leases and Allowance for Loan and Lease Losses | Note 5. Loans and Leases and Allowance for Loan and Lease Losses Portfolio Segmentation: Major categories of loans and leases are summarized as follows (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2021 ā December 31, 2020 ā ā PCI ā All Other ā ā ā ā PCI ā All Other ā ā ā ā Loans and Leases 1 Loans and Leases Total Loans and Leases 1 Loans and Leases Total Commercial real estate ā $ 23,156 ā $ 1,290,091 ā $ 1,313,247 ā $ 16,123 ā $ 996,853 ā $ 1,012,976 Consumer real estate ā 10,863 ā 467,298 ā 478,161 ā 10,258 ā 433,672 ā 443,930 Construction and land development ā 2,904 ā 323,470 ā 326,374 ā 5,348 ā 272,727 ā 278,075 Commercial and industrial ā 2,871 ā 466,868 ā 469,739 ā 308 ā 634,138 ā 634,446 Leases ā ā 3,748 ā ā 49,648 ā ā 53,396 ā ā ā ā ā ā ā ā ā Consumer and other ā 87 ā 11,659 ā 11,746 ā 27 ā 12,789 ā 12,816 Total loans and leases ā 43,629 ā 2,609,034 ā 2,652,663 ā 32,064 ā 2,350,179 ā 2,382,243 Less: Allowance for loan and lease losses ā (427) ā (18,868) ā (19,295) ā (309) ā (18,037) ā (18,346) Loans and leases, net ā $ 43,202 ā $ 2,590,166 ā $ 2,633,368 ā $ 31,755 ā $ 2,332,142 ā $ 2,363,897 1 ā For purposes of the disclosures required pursuant to ASC 310, the loan and lease portfolio was disaggregated into segments. A portfolio segment is defined as the level at which an entity develops and documents a systematic method for determining its allowance for credit losses. There are six loan and lease portfolio segments that include commercial real estate, consumer real estate, construction and land development, commercial and industrial, leases, and consumer and other. As previously mentioned in Note 1 ā Presentation of Financial Information ā The composition of loans and leases by loan classification for performing, impaired and PCI loan and leases status is summarized in the tables below (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā ā ā ā Consumer ā ā ā ā ā Real Estate ā Real Estate ā Development ā Industrial ā Leases ā and Other ā Total September 30, 2021: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans and leases $ 1,289,233 ā $ 464,881 ā $ 323,470 ā $ 466,769 ā $ 49,648 ā $ 11,659 ā $ 2,605,660 Impaired loans and leases ā 858 ā 2,417 ā ā ā 99 ā ā ā ā ā 3,374 ā ā 1,290,091 ā 467,298 ā 323,470 ā 466,868 ā 49,648 ā 11,659 ā 2,609,034 PCI loans and leases ā 23,156 ā 10,863 ā 2,904 ā 2,871 ā 3,748 ā 87 ā 43,629 Total loans and leases ā $ 1,313,247 ā $ 478,161 ā $ 326,374 ā $ 469,739 ā $ 53,396 ā $ 11,746 ā $ 2,652,663 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans and leases $ 992,982 ā $ 432,356 ā $ 272,727 ā $ 633,992 ā $ ā ā $ 12,789 ā $ 2,344,846 Impaired loans and leases ā 3,871 ā 1,316 ā ā ā 146 ā ā ā ā ā 5,333 ā ā 996,853 ā 433,672 ā 272,727 ā 634,138 ā ā ā 12,789 ā 2,350,179 PCI loans and leases ā 16,123 ā 10,258 ā 5,348 ā 308 ā ā ā 27 ā 32,064 Total loans and leases ā $ 1,012,976 ā $ 443,930 ā $ 278,075 ā $ 634,446 ā $ ā ā $ 12,816 ā $ 2,382,243 ā The following tables show the allowance for loan and lease losses allocation by loan and lease classification for impaired, PCI, and performing (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Construction ā Commercial ā ā ā ā Consumer ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā ā ā ā and ā ā ā ā ā Real Estate ā Real Estate ā Development ā Industrial ā Leases ā Other ā Total September 30, 2021: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans and leases $ 8,927 $ 3,316 $ 2,218 $ 3,493 $ 225 $ 103 $ 18,282 Impaired loans and leases ā 417 ā 70 ā ā ā 99 ā ā ā ā ā 586 ā ā 9,344 ā 3,386 ā 2,218 ā 3,592 ā 225 ā 103 ā 18,868 PCI loans and leases ā 61 ā 155 ā ā ā 209 ā ā ā 2 ā 427 Total loans and leases ā $ 9,405 ā $ 3,541 ā $ 2,218 ā $ 3,801 ā $ 225 ā $ 105 ā $ 19,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Performing loans and leases $ 7,579 $ 3,267 $ 2,076 $ 4,768 ā $ ā $ 110 $ 17,800 Impaired loans and leases ā ā ā 116 ā ā ā 121 ā ā ā ā ā 237 ā ā 7,579 ā 3,383 ā 2,076 ā 4,889 ā ā ā 110 ā 18,037 PCI loans and leases ā ā ā 88 ā ā ā 218 ā ā ā 3 ā 309 Total loans and leases ā $ 7,579 ā $ 3,471 ā $ 2,076 ā $ 5,107 ā $ ā ā $ 113 ā $ 18,346 ā ā The following tables detail the changes in the allowance for loan and lease losses by loan and lease classification (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2021 ā ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā ā ā ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā Leases ā and Other ā Total Beginning balance $ 8,382 $ 3,323 $ 2,061 $ 4,442 $ ā $ 102 $ 18,310 Charged-off loans and leases ā ā ā ā ā ā ā (41) ā (68) ā (132) ā (241) Recoveries of charge-offs ā 23 ā 13 ā ā ā 3 ā 5 ā 33 ā 77 Provision charged to expense ā 1,000 ā 205 ā 157 ā (603) ā 288 ā 102 ā 1,149 Ending balance ā $ 9,405 ā $ 3,541 ā $ 2,218 ā $ 3,801 ā $ 225 ā $ 105 ā $ 19,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, 2020 ā ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā ā ā ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā Leases ā and Other ā Total Beginning balance $ 6,595 $ 3,313 $ 1,795 $ 4,443 $ ā $ 108 $ 16,254 Charged-off loans and leases ā ā ā (21) ā ā ā (60) ā ā ā (89) ā (170) Recoveries of charge-offs ā 11 ā 17 ā ā ā 55 ā ā ā 16 ā 99 Provision charged to expense ā 1,123 ā 135 ā 265 ā 1,025 ā ā ā 86 ā 2,634 Ending balance ā $ 7,729 ā $ 3,444 ā $ 2,060 ā $ 5,463 ā $ ā ā $ 121 ā $ 18,817 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2021 ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā ā ā ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā Leases ā and Other ā Total Beginning balance $ 7,579 $ 3,471 $ 2,076 $ 5,107 $ ā $ 113 $ 18,346 Charged-off loans and leases ā ā ā (60) ā ā ā (45) ā (68) ā (341) ā (514) Recoveries of charge-offs ā 29 ā 34 ā ā ā 13 ā 5 ā 171 ā 252 Provision charged to expense ā 1,797 ā 96 ā 142 ā (1,274) ā 288 ā 162 ā 1,211 Ending balance ā $ 9,405 ā $ 3,541 ā $ 2,218 ā $ 3,801 ā $ 225 ā $ 105 ā $ 19,295 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, 2020 ā ā ā ā Consumer ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā Commercial ā Real ā and Land ā and ā ā ā ā Consumer ā ā ā ā ā Real Estate ā Estate Development ā Industrial ā Leases ā and Other ā Total Beginning balance $ 4,508 $ 2,576 $ 1,127 $ 1,957 $ ā $ 75 $ 10,243 Charged-off loans and leases ā ā ā (23) ā ā ā (77) ā ā ā (231) ā (331) Recoveries of charge-offs ā 16 ā 34 ā 2 ā 103 ā ā ā 67 ā 222 Provision charged to expense ā 3,205 ā 857 ā 931 ā 3,480 ā ā ā 210 ā 8,683 Ending balance ā $ 7,729 ā $ 3,444 ā $ 2,060 ā $ 5,463 ā $ ā ā $ 121 ā $ 18,817 ā We maintain the allowance at a level that we deem appropriate to adequately cover the probable losses inherent in the loan and lease portfolio. Our provision for loan and lease losses for the three and nine months ended September 30, 2021, is $1.1 million and $1.2 million, respectively, and $2.6 million $8.7 million, during the three and nine months ended September 30, 2020, respectively. As of September 30, 2021, and December 31, 2020, our allowance for loan and lease losses was $19.3 million and $18.3 million, respectively, which we deemed to be adequate at each of the respective dates. Our allowance for loan and lease losses as a percentage of total loans and leases was 0.73% at September 30, 2021 and 0.77% at December 31, 2020. ā ā The following tables outline the amount of each loan and lease classification and the amount categorized into each risk rating (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2021 ā ā ā ā ā ā ā ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā ā ā ā Consumer ā ā ā Non PCI Loans and Leases: ā Real Estate ā Real Estate Development ā Industrial ā Leases ā and Other ā Total Pass $ 1,245,064 $ 461,422 $ 323,156 $ 460,588 $ 49,648 $ 11,591 $ 2,551,469 Watch ā 40,106 ā 1,490 ā 240 ā 5,767 ā ā ā 45 ā 47,648 Special mention ā 3,841 ā 1,527 ā ā ā 244 ā ā ā ā ā 5,612 Substandard ā 1,080 ā 2,859 ā 74 ā 224 ā ā ā 23 ā 4,260 Doubtful ā ā ā ā ā ā ā 45 ā ā ā ā ā 45 Total ā ā 1,290,091 ā ā 467,298 ā ā 323,470 ā ā 466,868 ā ā 49,648 ā ā 11,659 ā ā 2,609,034 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā PCI Loans and Leases: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā 11,769 ā 8,473 ā 2,344 ā 2,824 ā 3,748 ā 69 ā 29,227 Watch ā 7,719 ā 754 ā 91 ā 1 ā ā ā 18 ā 8,583 Special mention ā 579 ā 70 ā ā ā ā ā ā ā ā ā 649 Substandard ā 3,089 ā 1,566 ā 469 ā 46 ā ā ā ā ā 5,170 Doubtful ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā ā 23,156 ā ā 10,863 ā ā 2,904 ā ā 2,871 ā ā 3,748 ā ā 87 ā ā 43,629 Total loans and leases ā $ 1,313,247 ā $ 478,161 ā $ 326,374 ā $ 469,739 ā $ 53,396 ā $ 11,746 ā $ 2,652,663 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā ā ā ā ā ā Construction ā Commercial ā ā ā ā ā ā ā ā ā ā Commercial ā Consumer ā and Land ā and ā ā ā ā Consumer ā ā ā Non PCI Loans and Leases: ā Real Estate ā Real Estate Development ā Industrial ā Leases ā and Other ā Total Pass $ 922,153 $ 417,302 $ 269,350 $ 625,836 $ ā $ 12,622 $ 2,247,263 Watch ā 66,287 ā 14,218 ā 3,296 ā 7,673 ā ā ā 137 ā 91,611 Special mention ā 4,446 ā 46 ā ā ā 320 ā ā ā ā ā 4,812 Substandard ā 3,967 ā 2,020 ā 81 ā 261 ā ā ā 30 ā 6,359 Doubtful ā ā ā 86 ā ā ā 48 ā ā ā ā ā 134 Total ā ā 996,853 ā ā 433,672 ā ā 272,727 ā ā 634,138 ā ā ā ā ā 12,789 ā ā 2,350,179 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā PCI Loans and Leases: ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Pass ā 11,072 ā 8,382 ā 1,008 ā 262 ā ā ā 25 ā 20,749 Watch ā 3,381 ā 224 ā 3,820 ā ā ā ā ā 2 ā 7,427 Special mention ā 19 ā 57 ā ā ā ā ā ā ā ā ā 76 Substandard ā 1,651 ā 1,595 ā 520 ā 46 ā ā ā ā ā 3,812 Doubtful ā ā ā ā ā ā ā ā ā ā ā ā ā ā Total ā ā 16,123 ā ā 10,258 ā ā 5,348 ā ā 308 ā ā ā ā ā 27 ā ā 32,064 Total loans and leases ā $ 1,012,976 ā $ 443,930 ā $ 278,075 ā $ 634,446 ā $ ā ā $ 12,816 ā $ 2,382,243 ā Past Due Loans and Leases: A loan or lease is considered past due if any required principal and interest payments have not been received as of the date such payments were required to be made under the terms of the loan or lease agreement. Generally, management places a loan or lease on nonaccrual when there is a clear indicator that the borrowerās cash flow may not be sufficient to meet payments as they become due, which is generally when a loan or lease is 90 days past due. ā ā The following tables present an aging analysis of our loan and lease portfolio (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2021 ā 30-60 Days 61-89 Days Past Due 90 ā ā Total ā ā ā ā ā ā ā Past Due and Past Due and Days or More ā ā ā Past Due and ā ā ā ā Accruing Accruing and Accruing ā Nonaccrual ā Nonaccrual ā PCI ā Current ā Total Commercial real estate ā $ 1,599 ā $ ā ā $ ā ā $ 858 ā $ 2,457 ā $ 23,156 ā $ 1,287,634 ā $ 1,313,247 Consumer real estate ā 170 ā ā ā ā ā 2,564 ā 2,734 ā 10,863 ā 464,564 ā 478,161 Construction and land development ā 45 ā ā ā ā ā ā ā 45 ā 2,904 ā 323,425 ā 326,374 Commercial and industrial ā 342 ā 214 ā ā ā 125 ā 681 ā 2,871 ā 466,187 ā 469,739 Leases ā ā 377 ā ā 42 ā ā ā ā ā ā ā ā 419 ā ā 3,748 ā ā 49,229 ā ā 53,396 Consumer and other ā 193 ā ā ā ā ā 20 ā 213 ā 87 ā 11,446 ā 11,746 Total ā $ 2,726 ā $ 256 ā $ ā ā $ 3,567 ā $ 6,549 ā $ 43,629 ā $ 2,602,485 ā $ 2,652,663 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā December 31, 2020 ā 30-60 Days 61-89 Days Past Due 90 ā ā Total ā ā ā ā ā ā ā Past Due and Past Due and Days or More ā ā ā Past Due and ā ā ā ā Accruing Accruing and Accruing ā Nonaccrual ā Nonaccrual ā PCI ā Current ā Total Commercial real estate ā $ 134 ā $ ā ā $ 67 ā $ 3,740 ā $ 3,941 ā $ 16,123 ā $ 992,912 ā $ 1,012,976 Consumer real estate ā 1,916 ā 51 ā 82 ā 1,823 ā 3,872 ā 10,258 ā 429,800 ā 443,930 Construction and land development ā 245 ā ā ā ā ā 12 ā 257 ā 5,348 ā 272,470 ā 278,075 Commercial and industrial ā 12 ā 76 ā ā ā 36 ā 124 ā 308 ā 634,014 ā 634,446 Leases ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā 14 ā 5 ā ā ā 22 ā 41 ā 27 ā 12,748 ā 12,816 Total ā $ 2,321 ā $ 132 ā $ 149 ā $ 5,633 ā $ 8,235 ā $ 32,064 ā $ 2,341,944 ā $ 2,382,243 ā Impaired Loans and Leases: The following is an analysis of the impaired loan and lease portfolio, including PCI loans and leases, detailing the related allowance recorded (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā September 30, 2021 December 31, 2020 ā ā ā Unpaid ā ā ā ā Unpaid ā ā ā Recorded Principal Related Recorded Principal Related ā ā Investment Balance ā Allowance ā Investment Balance ā Allowance Impaired loans and leases without a valuation allowance: ā ā ā ā ā ā Commercial real estate ā $ ā ā $ ā ā $ ā ā $ 3,871 ā $ 3,872 ā $ ā Consumer real estate ā 2,156 ā 2,157 ā ā ā 888 ā 888 ā ā Construction and land development ā ā ā ā ā ā ā ā ā ā ā ā Commercial and industrial ā ā ā ā ā ā ā ā ā ā ā ā Leases ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā 2,156 ā 2,157 ā ā ā 4,759 ā 4,760 ā ā Impaired loans and leases with a valuation allowance: ā ā ā ā ā ā Commercial real estate ā 858 ā 858 ā 417 ā ā ā ā ā ā Consumer real estate ā 261 ā 263 ā 70 ā 428 ā 428 ā 116 Construction and land development ā ā ā ā ā ā ā ā ā ā ā ā Commercial and industrial ā 99 ā 99 ā 99 ā 146 ā 146 ā 121 Leases ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā ā ā ā ā 1,218 ā 1,220 ā 586 ā 574 ā 574 ā 237 PCI loans and leases: ā ā ā ā ā ā Commercial real estate ā 1,206 ā 1,500 ā 61 ā ā ā ā ā ā Consumer real estate ā 1,196 ā 1,318 ā 155 ā 1,827 ā 2,086 ā 88 Construction and land development ā ā ā ā ā ā ā ā ā ā ā ā Commercial and industrial ā 255 ā 228 ā 209 ā 270 ā 234 ā 218 Leases ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā 6 ā 5 ā 2 ā 21 ā 20 ā 3 ā ā 2,663 ā 3,051 ā 427 ā 2,118 ā 2,340 ā 309 Total impaired loans and leases ā $ 6,037 ā $ 6,428 ā $ 1,013 ā $ 7,451 ā $ 7,674 ā $ 546 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended September 30, ā ā 2021 ā 2020 ā Average Interest Average Interest ā Recorded Income Recorded Income ā ā Investment ā Recognized Investment Recognized Impaired loans and leases without a valuation allowance: ā ā ā ā Commercial real estate ā $ ā ā $ ā ā $ 552 ā $ 3 Consumer real estate ā 2,171 ā 19 ā 758 ā 3 Construction and land development ā ā ā ā ā ā ā ā Commercial and industrial ā ā ā ā ā ā ā ā Leases ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā 2,171 ā 19 ā 1,310 ā 6 Impaired loans and leases with a valuation allowance: ā ā ā ā Commercial real estate ā 858 ā ā ā 198 ā ā Consumer real estate ā 261 ā 3 ā 440 ā 4 Construction and land development ā ā ā ā ā ā ā ā Commercial and industrial ā 154 ā 2 ā 379 ā 2 Leases ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā 1,273 ā 5 ā 1,017 ā 6 PCI loans and leases: ā ā ā ā Commercial real estate ā 1,230 ā 27 ā 8 ā ā Consumer real estate ā 1,176 ā 21 ā 1,869 ā 38 Construction and land development ā ā ā ā ā ā ā ā Commercial and industrial ā 258 ā 1 ā 305 ā 2 Leases ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā 10 ā ā ā 27 ā ā ā ā 2,674 ā 49 ā 2,209 ā 40 Total impaired loans and leases ā $ 6,118 ā $ 73 ā $ 4,536 ā $ 52 ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Nine Months Ended September 30, ā ā 2021 ā 2020 ā Average Interest Average Interest ā Recorded Income Recorded Income ā ā Investment ā Recognized Investment Recognized Impaired loans and leases without a valuation allowance: ā ā ā ā Commercial real estate ā $ 1,000 ā $ 1 ā $ 374 ā $ 7 Consumer real estate ā 1,778 ā 39 ā 653 ā 17 Construction and land development ā ā ā ā ā 289 ā ā Commercial and industrial ā ā ā ā ā ā ā ā Leases ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā 2,778 ā 40 ā 1,316 ā 24 Impaired loans and leases with a valuation allowance: ā ā ā ā ā Commercial real estate ā 1,218 ā 104 ā 198 ā 2 Consumer real estate ā 352 ā 11 ā 712 ā 18 Construction and land development ā ā ā ā ā ā ā ā Commercial and industrial ā 141 ā 7 ā 269 ā 7 Leases ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā ā ā ā ā ā ā ā ā ā 1,711 ā 122 ā 1,179 ā 27 PCI loans and leases: ā ā ā ā Commercial real estate ā 410 ā 27 ā 250 ā 1 Consumer real estate ā 1,169 ā 64 ā 1,344 ā 77 Construction and land development ā ā ā ā ā 58 ā ā Commercial and industrial ā 263 ā 3 ā 343 ā 5 Leases ā ā ā ā ā ā ā ā ā ā ā ā Consumer and other ā 15 ā ā ā 29 ā ā ā ā 1,857 ā 94 ā 2,024 ā 83 Total impaired loans and leases ā $ 6,346 ā $ 256 ā $ 4,519 ā $ 134 ā Troubled Debt Restructurings: For the periods presented, impaired loans included loans that were classified as TDRs. The restructuring of a loan is considered a TDR if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. In assessing whether or not a borrower is experiencing financial difficulties, the Company considers information currently available regarding the financial condition of the borrower. This information includes, but is not limited to, whether (i) the debtor is currently in payment default on any of its debt; (ii) a payment default is probable in the foreseeable future without the modification; (iii) the debtor has declared or is in the process of declaring bankruptcy; and (iv) the debtorās projected cash flow is sufficient to satisfy contractual payments due under the original terms of the loan without a modification. The Company considers all aspects of the modification to loan terms to determine whether or not a concession has been granted to the borrower. Key factors considered by the Company include the debtorās ability to access funds at a market rate for debt with similar risk characteristics, the significance of the modification relative to unpaid principal balance or collateral value of the debt, and the significance of a delay in the timing of payments relative to the original contractual terms of the loan. The most common concessions granted by the Company generally include one or more modifications to the terms of the debt, such as (i) a reduction in the interest rate for the remaining life of the debt; (ii) an extension of the maturity date at an interest rate lower than the current market rate for new debt with similar risk; (iii) a temporary period of interest-only payments; and (iv) a reduction in the contractual payment amount for either a short period or remaining term of the loan. As of September 30, 2021 and December 31, 2020, management had approximately $212 thousand and $257 thousand, respectively, in loans that met the criteria for TDR, none of which were on nonaccrual. A loan is placed back on accrual status when both principal and interest are current, and it is probable that the Company will be able to collect all amounts due (both principal and interest) according to the terms of the loan agreement. There were no loans that were modified as a TDR during the nine months ended September 30, 2021, and one loan that was modified during the nine months ended September 30, 2020. There were no loans that were modified as TDRs during the past nine months and for which there was a subsequent payment default. The Company began offering short-term loan modifications to assist borrowers during the COVID-19 national emergency. CARES Act along with a joint agency statement issued by banking agencies, provides that short-term modifications made in response to COVID-19 does not need to be accounted for as a TDR. Accordingly, the Company does not account for such loan modifications as TDRs. See Note 1 Presentation of Financial Information Foreclosure Proceedings and Balances : As of September 30, 2021, there were no residential properties secured by real estate included in other real estate owned and there was one residential real estate loan totaling $33 thousand in the process of foreclosure. ā Purchased Credit Impaired Loans and Leases: The Company has acquired loans and leases where there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans and leases are as follows (in thousands) ā ā ā ā ā ā ā ā ā September 30, December 31, ā 2021 2020 Commercial real estate ā $ 31,664 ā $ 23,787 Consumer real estate ā 13,211 ā 12,692 Construction and land development ā 3,686 ā 1,812 Commercial and industrial ā 3,794 ā 6,521 Leases ā ā 4,133 ā ā ā Consumer and other ā 154 ā 161 Total loans and leases ā 56,642 ā 44,973 Less: Remaining purchase discount ā (13,013) ā (12,909) Total loans and leases, net of purchase discount ā 43,629 ā 32,064 Less: Allowance for loan and leases losses ā (427) ā (309) Carrying amount, net of allowance ā $ 43,202 ā $ 31,755 ā Activity related to the accretable yield on loans and leases acquired with deteriorated credit quality is as follows (in thousands) ā ā ā ā ā ā ā ā ā ā ā ā ā ā ā Three Months Ended ā Nine Months Ended ā ā September 30, ā September 30, ā 2021 2020 2021 2020 Accretable yield, beginning of period ā $ 14,522 ā $ 11,777 ā $ 16,889 ā $ 8,454 Additions ā 4,072 ā ā ā 4,721 ā 2,515 Accretion income ā (2,151) ā (1,267) ā (5,180) ā (4,401) Reclassification ā 254 ā 265 ā 1,931 ā 2,428 Other changes, net ā (1,034) ā 7,405 ā (2,698) ā 9,184 Accretable yield, end of period ā $ 15,663 ā $ 18,180 ā $ 15,663 ā $ 18,180 ā |