| Loans and allowance for credit losses | Loans and allowance for credit losses: Loans outstanding at September 30, 2020 and December 31, 2019, by class of financing receivable are as follows: September 30, December 31, 2020 2019 Commercial and industrial (1) $ 1,417,671 $ 1,034,036 Construction 1,190,878 551,101 Residential real estate: 1-to-4 family mortgage 1,140,611 710,454 Residential line of credit 420,318 221,530 Multi-family mortgage 165,937 69,429 Commercial real estate: Owner occupied 924,987 630,270 Non-owner occupied 1,644,400 920,744 Consumer and other 308,736 272,078 Gross loans 7,213,538 4,409,642 Less: Allowance for credit losses (183,973) (31,139) Net loans $ 7,029,565 $ 4,378,503 (1) Includes $310,719 of loans originated as part of the PPP at September 30, 2020, established by the CARES Act, in response to the COVID-19 pandemic. The PPP is administered by the SBA; loans originated as part of the PPP may be forgiven by the SBA under a set of defined rules. An allowance for credit losses of $49 at September 30, 2020, has been calculated for these loans. PPP loans are federally guaranteed as part of the CARES Act, provided PPP loan recipients receive loan forgiveness under the SBA regulations. As such, there is minimal credit risk associated with these loans. As of September 30, 2020 and December 31, 2019, $1,083,393 and $412,966, respectively, of qualifying residential mortgage loans (including loans held for sale) and $996,582 and $545,540, respectively, of qualifying commercial mortgage loans were pledged to the Federal Home Loan Bank of Cincinnati securing advances against the Bank’s line of credit. Additionally, as of September 30, 2020 and December 31, 2019, $1,378,968 and $1,407,662, respectively, of qualifying loans were pledged to the Federal Reserve Bank under the Borrower-in-Custody program. The components of amortized cost for loans on the consolidated balance sheet excludes accrued interest receivable as the Company elected to present accrued interest receivable separately on the balance sheet. As of September 30, 2020, total accrued interest receivable on loans was $41,797. Allowance for Credit Losses As of January 1, 2020, the Company’s policy for the allowance changed with the adoption of CECL. As permitted, the new guidance was implemented using a modified retrospective approach with the impact of the initial adoption being recorded through retained earnings at January 1, 2020, with no restatement of prior periods. Before January 1, 2020, the Company calculated the allowance on an incurred loss approach. As of January 1, 2020, the Company calculated an expected credit loss using a lifetime loss rate methodology. As a result of the difference in methodology between periods, disclosures presented below may not be comparative in nature. The Company utilizes probability-weighted forecasts, which consider multiple macroeconomic variables from a third-party vendor that are applicable to the type of loan. The weighting of the economic forecast scenarios, macroeconomic variables, and the reasonable and supportable forecast period at the macroeconomic variable-level were reviewed and approved by the Company's forecast governance committee based on expectations of future economic conditions. Each of the Company's loss rate models incorporate forward-looking macroeconomic projections throughout the reasonable and supportable forecast period and the subsequent historical reversion at the macroeconomic variable input level. In order to estimate the life of a loan, the contractual term of the loan is adjusted for estimated prepayments based on market information and the Company’s prepayment history. The Company's loss rate models estimate the lifetime loss rate for pools of loans by combining the calculated loss rate based on each variable within the model (including the macroeconomic variables). The lifetime loss rate for the pool is then multiplied by the loan balances to determine the expected credit losses on the pool. The Company considers the need to qualitatively adjust its modeled quantitative expected credit loss estimate for information not already captured in the model loss estimation process. These qualitative factor adjustments may increase or decrease the Company’s estimate of expected credit losses. The Company reviews the qualitative adjustments so as to validate that information that has already been considered and included in the modeled quantitative loss estimation process is not also included in the qualitative adjustment. The Company considers the qualitative factors that are relevant to the institution as of the reporting date, which may include, but are not limited to: levels of and trends in delinquencies and performance of loans; levels of and trends in write-offs and recoveries collected; trends in volume and terms of loans; effects of any changes in reasonable and supportable economic forecasts; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and expertise; available relevant information sources that contradict the Company’s own forecast; effects of changes in prepayment expectations or other factors affecting assessments of loan contractual terms; industry conditions; and effects of changes in credit concentrations. The quantitative models require loan data and macroeconomic variables based on the inherent credit risks in each portfolio to more accurately measure the credit risks associated with each. Each of the quantitative models pools loans with similar risk characteristics and collectively assesses the lifetime loss rate for each pool to estimate its expected credit loss. When a loan no longer shares similar risk characteristics with other loans in any given pool, the loan is individually assessed. The Company has determined the following circumstances in which a loan may require an individual evaluation: collateral dependent loans; loans for which foreclosure is probable; TDRs and reasonably expected TDRs. A loan is deemed collateral dependent when 1) the borrower is experiencing financial difficulty and 2) the repayment is expected to be primarily through sale or operation of the collateral. The allowance for credit losses for collateral dependent loans as well as loans where foreclosure is probable is calculated as the amount for which the loan’s amortized cost basis exceeds fair value. Fair value is determined based on appraisals performed by qualified appraisers and reviewed by qualified personnel. In cases where repayment is to be provided substantially through the sale of collateral, the Company reduces the fair value by the estimated costs to sell. Loans experiencing financial difficulty for which a concession has not yet been provided may be identified as reasonably expected TDRs. Reasonably expected TDRs use the same methodology as TDRs. In cases where the expected credit loss can only be captured through a discounted cash flow analysis (such as an interest rate modification for a TDR loan), the allowance is measured by the amount which the loan’s amortized cost exceeds the discounted cash flow analysis. The allowance for credit losses on a TDR or a reasonably expected TDR is calculated individually using a discounted cash flow methodology, unless the loan is deemed to be collateral dependent or foreclosure is probable. The Company’s acquisitions and changes in reasonable and supportable forecasts of macroeconomic variables, primarily due to the impact of the COVID-19 pandemic, resulted in projected credit deterioration requiring the Company to recognize significant increases in the provision for credit losses during the nine months ended September 30, 2020. Specifically, the Company performed additional qualitative evaluations by class of financing receivable in line with the Company's established qualitative framework, weighting the impact of the current economic outlook, status of federal government stimulus programs, and other considerations, in order to identify specific industries or borrowers seeing credit improvement or deterioration specific to the COVID-19 pandemic. Loans acquired during the period from Franklin increased the allowance for credit losses by $77,653 as of the August 15, 2020 acquisition date and Farmers National increased the allowance for credit losses by $4,494 as of the February 14, 2020 acquisition date. Outside of the impact of Franklin on the provision for credit losses, the remaining loan portfolio benefited from improved economic forecasts, seen for the first time in 2020, reflective of the resumption of more normalized commercial activity within our markets. As such, excluding the increase recorded upon the acquisition of Franklin, we reduced the allowance for credit losses by $7,336 during the three months ended September 30, 2020 based on these improved economic forecasts. See Note 2, "Mergers and acquisitions" for additional details related to PCD loans acquired on February 14, 2020. The following provides the changes in the allowance for credit losses by class of financing receivable for the three and nine months ended September 30, 2020 and 2019: Commercial Construction 1-to-4 Residential Multi-family Commercial Commercial Consumer Total Three Months Ended September 30, 2020 Beginning balance - June 30, 2020 $ 8,878 $ 35,599 $ 12,463 $ 6,811 $ 4,499 $ 7,420 $ 30,444 $ 7,015 $ 113,129 Provision for credit losses (1,520) 22,383 4,194 4,053 1,908 (1,276) 12,364 3,728 45,834 Recoveries of loans previously charged-off 757 51 116 22 — 51 — 175 1,172 Loans charged off (249) — (8) — — (95) (166) (475) (993) Initial allowance on loans 743 5,596 1,533 569 784 605 14,998 3 24,831 Ending balance - September 30, 2020 $ 8,609 $ 63,629 $ 18,298 $ 11,455 $ 7,191 $ 6,705 $ 57,640 $ 10,446 $ 183,973 Nine Months Ended September 30, 2020 Beginning balance - December 31, 2019 $ 4,805 $ 10,194 $ 3,112 $ 752 $ 544 $ 4,109 $ 4,621 $ 3,002 $ 31,139 Impact of adopting ASC 326 on non-purchased credit deteriorated loans 5,300 1,533 7,920 3,461 340 1,879 6,822 3,633 30,888 Impact of adopting ASC 326 on purchased credit deteriorated loans 82 150 421 (3) — 162 184 (438) 558 Provision for credit losses (2,354) 45,962 5,412 6,633 5,523 132 31,282 5,247 97,837 Recoveries of loans previously charged-off 1,652 202 166 61 — 68 — 471 2,620 Loans charged off (1,630) (18) (373) (21) — (304) (711) (1,512) (4,569) Initial allowance on loans purchased with deteriorated credit quality 754 5,606 1,640 572 784 659 15,442 43 25,500 Ending balance - September 30, 2020 $ 8,609 $ 63,629 $ 18,298 $ 11,455 $ 7,191 $ 6,705 $ 57,640 $ 10,446 $ 183,973 Commercial Construction 1-to-4 Residential Multi-family Commercial Commercial Consumer Total Three Months Ended September 30, 2019 Beginning balance - June 30, 2019 $ 4,923 $ 9,655 $ 3,288 $ 755 $ 617 $ 3,512 $ 4,478 $ 2,910 $ 30,138 Provision for loan losses 234 186 18 67 (43) 194 461 714 1,831 Recoveries of loans previously charged-off 16 1 25 75 — 3 — 92 212 Loans charged off (3) — — (170) — — (12) (532) (717) Ending balance - September 30, 2019 $ 5,170 $ 9,842 $ 3,331 $ 727 $ 574 $ 3,709 $ 4,927 $ 3,184 $ 31,464 Nine Months Ended September 30, 2019 Beginning balance - December 31, 2018 $ 5,348 $ 9,729 $ 3,428 $ 811 $ 566 $ 3,132 $ 4,149 $ 1,769 $ 28,932 Provision for loan losses 17 105 (77) 100 8 482 790 2,678 4,103 Recoveries of loans previously charged-off 66 8 62 121 — 95 — 435 787 Loans charged off (261) — (82) (305) — — (12) (1,698) (2,358) Ending balance - September 30, 2019 $ 5,170 $ 9,842 $ 3,331 $ 727 $ 574 $ 3,709 $ 4,927 $ 3,184 $ 31,464 The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. The following table provides the amount of the allowance for credit losses by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019: December 31, 2019 Commercial Construction 1-to-4 Residential Multi-family Commercial Commercial Consumer Total Amount of allowance allocated to: Individually evaluated for impairment $ 241 $ — $ 8 $ 9 $ — $ 238 $ 399 $ — $ 895 Collectively evaluated for impairment 4,457 10,192 2,940 743 544 3,853 3,909 1,933 28,571 Acquired with deteriorated credit quality 107 2 164 — — 18 313 1,069 1,673 Ending balance - December 31, 2019 $ 4,805 $ 10,194 $ 3,112 $ 752 $ 544 $ 4,109 $ 4,621 $ 3,002 $ 31,139 The following table provides the amount of loans by class of financing receivable for loans individually evaluated for impairment, loans collectively evaluated for impairment and loans acquired with deteriorated credit quality as of December 31, 2019: December 31, 2019 Commercial Construction 1-to-4 Residential Multi-family Commercial Commercial Consumer Total Loans, net of unearned income Individually evaluated for impairment $ 9,026 $ 2,061 $ 1,347 $ 579 $ — $ 2,993 $ 7,755 $ 49 $ 23,810 Collectively evaluated for impairment 1,023,326 546,156 689,769 220,878 69,429 621,386 902,792 254,944 4,328,680 Acquired with deteriorated credit quality 1,684 2,884 19,338 73 — 5,891 10,197 17,085 57,152 Ending balance - December 31, 2019 $ 1,034,036 $ 551,101 $ 710,454 $ 221,530 $ 69,429 $ 630,270 $ 920,744 $ 272,078 $ 4,409,642 Credit Quality The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans that share similar risk characteristics collectively. Loans that do not share similar risk characteristics are evaluated individually. The Company uses the following definitions for risk ratings: Pass. Loans rated Pass include those that are adequately performing and collateralized and which management believes do not have conditions that have occurred or may occur which would result in the loan being downgraded into an inferior category. Watch. Loans rated as Watch include those that management believes have conditions that have occurred, or may occur, which could result in the loan being downgraded to an inferior category. Also included in watch are loans rated as special mention, which have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans rated as Substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so rated have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Risk ratings are updated on an ongoing basis and are subject to change by continuous loan monitoring processes. The following table presents the credit quality of our loan portfolio by year of origination as of September 30, 2020. Revolving loans are presented separately. Management considers the guidance in ASC 310-20 when determining whether a modification, extension, or renewal constitutes a current period origination. Generally, current period renewals of credit are reunderwritten at the point of renewal and considered current period originations for the purposes of the table below. September 30, 2020 Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total Commercial and industrial Pass $ 399,906 $ 186,100 $ 69,916 $ 53,213 $ 33,976 $ 45,860 $ 511,111 $ 1,300,082 Watch 3,236 3,034 6,283 3,652 11,293 6,245 36,083 69,826 Substandard 6 3,160 17,022 6,552 686 6,869 13,269 47,564 Doubtful 35 — — — — — 164 199 Total 403,183 192,294 93,221 63,417 45,955 58,974 560,627 1,417,671 Construction Pass 311,117 448,019 110,473 49,845 41,750 75,570 115,894 1,152,668 Watch 1,282 1,231 9,435 13,822 1,305 3,585 — 30,660 Substandard — 972 642 132 880 4,919 — 7,545 Doubtful — — — — — 5 — 5 Total 312,399 450,222 120,550 63,799 43,935 84,079 115,894 1,190,878 Residential real estate: 1-to-4 family mortgage Pass 232,248 203,167 188,471 170,725 119,327 168,732 — 1,082,670 Watch 1,257 786 3,318 12,580 4,155 14,506 — 36,602 Substandard 532 1,452 3,274 4,128 2,039 9,120 — 20,545 Doubtful — 34 — — 270 490 — 794 Total 234,037 205,439 195,063 187,433 125,791 192,848 — 1,140,611 Residential line of credit Pass 254 — 87 — 208 3,577 405,767 409,893 Watch — — — — — — 5,205 5,205 Substandard 109 1 — 3 — — 4,848 4,961 Doubtful — — — — — — 259 259 Total 363 1 87 3 208 3,577 416,079 420,318 Multi-family mortgage Pass 23,747 15,055 12,629 54,660 11,718 36,812 11,259 165,880 Watch — — — — — — — — Substandard — — — — — 57.00 — 57 Doubtful — — — — — — — — Total 23,747 15,055 12,629 54,660 11,718 36,869 11,259 165,937 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total Commercial real estate: Owner occupied Pass 99,827 181,214 106,212 97,689 81,383 221,365 49,382 837,072 Watch 3,596 4,343 6,843 22,939 7,858 19,233 3,188 68,000 Substandard 428 1,302 3,815 1,457 2,931 8,440 1,542 19,915 Doubtful — — — — — — — — Total 103,851 186,859 116,870 122,085 92,172 249,038 54,112 924,987 Non-owner occupied Pass 108,229 248,852 360,309 218,431 291,626 250,806 43,005 1,521,258 Watch — 6,181 5,897 26,361 21,775 43,984 45 104,243 Substandard — 149 12,130 1,166 1,693 3,761 — 18,899 Doubtful — — — — — — — — Total 108,229 255,182 378,336 245,958 315,094 298,551 43,050 1,644,400 Consumer and other loans Pass 65,261 57,677 42,388 28,207 42,014 32,720 18,440 286,707 Watch 159 707 1,714 1,418 3,044 8,352 392 15,786 Substandard 121 68 264 618 463 2,653 407 4,594 Doubtful — 260 295 544 196 354 — 1,649 Total 65,541 58,712 44,661 30,787 45,717 44,079 19,239 308,736 Total Pass 1,240,589 1,340,084 890,485 672,770 622,002 835,442 1,154,858 6,756,230 Watch 9,530 16,282 33,490 80,772 49,430 95,905 44,913 330,322 Substandard 1,196 7,104 37,147 14,056 8,692 35,819 20,066 124,080 Doubtful 35 294 295 544 466 849 423 2,906 Total $ 1,251,350 $ 1,363,764 $ 961,417 $ 768,142 $ 680,590 $ 968,015 $ 1,220,260 $ 7,213,538 The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. The following table shows credit quality indicators by class of financing receivable at December 31, 2019. December 31, 2019 Pass Watch Substandard Total Loans, excluding purchased credit impaired loans Commercial and industrial $ 946,247 $ 66,910 $ 19,195 $ 1,032,352 Construction 541,201 4,790 2,226 548,217 Residential real estate: 1-to-4 family mortgage 666,177 11,380 13,559 691,116 Residential line of credit 218,086 1,343 2,028 221,457 Multi-family mortgage 69,366 63 — 69,429 Commercial real estate: Owner occupied 576,737 30,379 17,263 624,379 Non-owner occupied 876,670 24,342 9,535 910,547 Consumer and other 248,632 3,304 3,057 254,993 Total loans, excluding purchased credit impaired loans $ 4,143,116 $ 142,511 $ 66,863 $ 4,352,490 Purchased credit impaired loans Commercial and industrial $ — $ 1,224 $ 460 $ 1,684 Construction — 2,681 203 2,884 Residential real estate: 1-to-4 family mortgage — 15,091 4,247 19,338 Residential line of credit — — 73 73 Multi-family mortgage — — — — Commercial real estate: Owner occupied — 4,535 1,356 5,891 Non-owner occupied — 6,617 3,580 10,197 Consumer and other — 13,521 3,564 17,085 Total purchased credit impaired loans — 43,669 13,483 57,152 Total loans $ 4,143,116 $ 186,180 $ 80,346 $ 4,409,642 Nonaccrual and Past Due Loans Nonperforming loans include loans that are no longer accruing interest (nonaccrual loans) and loans past due ninety or more days and still accruing interest. The following tables provide information on nonaccrual and past due loans as of September 30, 2020 and December 31, 2019. For December 31, 2019, purchased credit impaired ("PCI") loans are not included in the nonperforming disclosures as these loans are considered to be performing, even though they may be contractually past due. This is because any non-payment of contractual principal or interest was considered in the periodic re-estimation of expected cash flows and was included in the 2019 loan loss provision or future period yield adjustments. Under PCD accounting, management considers changes in the credit quality of the borrower as part of its regular estimation of expected credit losses and does not make the same future yield adjustments as under the PCI accounting. Consequently, PCD loans that are contractually past due or on nonaccrual status, including those formerly accounted for as PCI loans, are included in the September 30, 2020 nonperforming disclosures. The following table represents an analysis of the aging by class of financing receivable as of September 30, 2020: September 30, 2020 30-89 days 90 days or Non-accrual Loans current Total Commercial and industrial $ 1,581 $ 11 $ 6,579 $ 1,409,500 $ 1,417,671 Construction 4,346 196 2,018 1,184,318 1,190,878 Residential real estate: 1-to-4 family mortgage 4,143 7,452 6,752 1,122,264 1,140,611 Residential line of credit 287 216 1,925 417,890 420,318 Multi-family mortgage — 57 — 165,880 165,937 Commercial real estate: Owner occupied 1,096 — 2,194 921,697 924,987 Non-owner occupied 114 — 12,358 1,631,928 1,644,400 Consumer and other 3,584 1,132 2,759 301,261 308,736 Total $ 15,151 $ 9,064 $ 34,585 $ 7,154,738 $ 7,213,538 The following tables provide the amortized cost basis of loans on non-accrual status, as well as any related allowance and interest income, by class of financing receivable as of and for the three and nine months ended September 30, 2020: September 30, 2020 u End of period amortized cost Beginning of Non-accrual Non-accrual Related Commercial and industrial $ 5,586 $ 913 $ 5,666 $ 936 Construction 1,254 980 1,038 145 Residential real estate: 1-to-4 family mortgage 4,585 4,247 2,505 62 Residential line of credit 489 — 1,925 74 Commercial real estate: Owner occupied 2,285 1,469 725 66 Non-owner occupied 9,460 5,475 6,883 1,568 Consumer and other 1,623 88 2,671 165 Total $ 25,282 $ 13,172 $ 21,413 $ 3,016 Interest Income September 30, 2020 Three Months Ended Nine Months Ended Commercial and industrial $ 287 $ 304 Construction 42 48 Residential real estate: 1-to-4 family mortgage 15 21 Residential line of credit 72 72 Commercial real estate: Owner occupied 32 75 Non-owner occupied 76 185 Consumer and other — 24 Total $ 524 $ 729 The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. The following table provides the period-end amounts of loans that are past due, loans not accruing interest and loans current on payments accruing interest by category at December 31, 2019: December 31, 2019 30-89 days 90 days or Non-accrual Purchased Credit Loans current on payments and accruing interest Total Commercial and industrial $ 1,918 $ 291 $ 5,587 $ 1,684 $ 1,024,556 $ 1,034,036 Construction 1,021 42 1,087 2,884 546,067 551,101 Residential real estate: 1-to-4 family mortgage 10,738 3,965 3,332 19,338 673,081 710,454 Residential line of credit 658 412 416 73 219,971 221,530 Multi-family mortgage 63 — — — 69,366 69,429 Commercial real estate: Owner occupied 1,375 — 1,793 5,891 621,211 630,270 Non-owner occupied 327 — 7,880 10,197 902,340 920,744 Consumer and other 2,377 833 967 17,085 250,816 272,078 Total $ 18,477 $ 5,543 $ 21,062 $ 57,152 $ 4,307,408 $ 4,409,642 Impaired Loans The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. Impaired loans recognized in conformity with ASC 310 at December 31, 2019 segregated by class, were as follows: December 31, 2019 Recorded Unpaid Related With a related allowance recorded: Commercial and industrial $ 6,080 $ 8,350 $ 241 Residential real estate: 1-to-4 family mortgage 264 324 8 Residential line of credit 320 320 9 Commercial real estate: Owner occupied 756 1,140 238 Non-owner occupied 6,706 6,747 399 Consumer and other — — — Total $ 14,126 $ 16,881 $ 895 With no related allowance recorded: Commercial and industrial $ 2,946 $ 3,074 $ — Construction 2,061 2,499 — Residential real estate: 1-to-4 family mortgage 1,083 1,449 — Residential line of credit 259 280 — Commercial real estate: Owner occupied 2,237 2,627 — Non-owner occupied 1,049 1,781 — Consumer and other 49 49 — Total $ 9,684 $ 11,759 $ — Total impaired loans $ 23,810 $ 28,640 $ 895 Average recorded investment and interest income on a cash basis recognized during the three and nine months ended September 30, 2019 on impaired loans, segregated by class, were as follows: Three Months Ended Nine Months Ended September 30, 2019 Average recorded investment Interest income recognized (cash basis) Average recorded investment Interest income recognized (cash basis) With a related allowance recorded: Commercial and industrial $ 3,109 $ 51 $ 1,850 $ 156 Residential real estate: 1-to-4 family mortgage 265 2 205 13 Commercial real estate: Owner occupied 184 4 371 10 Non-owner occupied 6,143 56 6,241 90 Consumer and other 447 — 198 19 Total $ 10,148 $ 113 $ 8,865 $ 288 With no related allowance recorded: Commercial and industrial $ 766 $ 11 $ 991 $ 36 Construction 1,639 90 1,641 142 Residential real estate: 1-to-4 family mortgage 835 24 962 50 Residential line of credit 427 — 245 2 Commercial real estate: Owner occupied 2,045 41 2,171 103 Non-owner occupied 1,050 — 1,050 — Consumer and other 66 2 69 5 Total $ 6,828 $ 168 $ 7,129 $ 338 Total impaired loans $ 16,976 $ 281 $ 15,994 $ 626 Purchased Credit Impaired Loans The following disclosures are presented in accordance with GAAP in effect prior to the adoption of CECL. The Company has included these disclosures to address the applicable prior periods presented. As of December 31, 2019, the carrying value of PCI loans accounted for under ASC 310-30 "Loans and Debt Securities Acquired with Deteriorated Credit Quality" was $57,152. The following table presents changes in the value of the accretable yield for PCI loans for the periods indicated. Three Months Ended September 30, Nine Months Ended September 30, 2019 2019 Balance at the beginning of period $ (14,862) $ (16,587) Additions through business combinations — (1,167) Principal reductions and other reclassifications from nonaccretable difference (150) 100 Accretion 1,583 5,471 Changes in expected cash flows 110 (1,136) Balance at end of period $ (13,319) $ (13,319) Included in the ending balance of the accretable yield on PCI loans at December 31, 2019, was a purchase accounting liquidity discount of $292. There was also a purchase accounting nonaccretable credit discount of $3,537 related to the PCI loan portfolio at December 31, 2019, and an accretable credit and liquidity discount on non-PCI loans of $8,964 and $3,924, respectively, as of December 31, 2019. Interest revenue, through accretion of the difference between the recorded investment of the loans and the expected cash flows, was recognized on all PCI loans. Accretion of interest income amounting to $1,583 and $5,471 was recognized on PCI loans during the three and nine months ended September 30, 2019, respectively. This included both the contractual interest income recognized and the purchase accounting contribution through accretion of the liquidity discount for changes in estimated cash flows. The total purchase accounting contribution through accretion excluding contractual interest collected for all purchased loans was $2,102 and $6,030 for the three and nine months ended September 30, 2019, respectively. Restructured Loans As of September 30, 2020 and December 31, 2019, the Company has a recorded investment in TDRs of $16,681 and $12,206, respectively. The modifications included extensions of the maturity date and/or a stated rate of interest to one lower than the current market rate to borrowers experiencing financial difficulty. The Company has calculated $854 and $360 of specific reserves for those loans at September 30, 2020 and December 31, 2019, respectively. There were no commitments to lend any additional amounts to these customers for either period end. Of these loans, $12,243 and $5,201 were classified as non-accrual loans as of September 30, 2020 and December 31, 2019, respectively. The following tables present the financial effect of TDRs recorded during the periods indicated. Three Months Ended September 30, 2020 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 2 $ 420 $ 420 $ — Total 2 $ 420 $ 420 $ — Three Months Ended September 30, 2019 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 1 $ 16 $ 16 $ — Construction 1 1,070 1,070 Commercial real estate: Owner occupied 1 927 927 — Non-owner occupied 1 1,366 1,366 106 Residential real estate: 1-to-4 family mortgage 1 128 128 — Total 5 $ 3,507 $ 3,507 $ 106 Nine Months Ended September 30, 2020 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 3 $ 1,573 $ 1,573 $ — Commercial real estate: Owner occupied 1 788 788 — Non-owner occupied 2 3,752 3,752 $ — Residential real estate: 1-to-4 family mortgage 2 77 77 — Total 8 $ 6,190 $ 6,190 $ — Nine Months Ended September 30, 2019 Number of loans Pre-modification outstanding recorded investment Post-modification outstanding recorded investment Charge offs and specific reserves Commercial and industrial 3 $ 3,204 $ 3,204 $ — Construction 1 1,070 1,070 — Commercial real estate: Owner occupied 1 927 927 — Non-owner occupied 1 1,366 1,366 106 Residential real estate: 1-4 family mortgage 1 128 128 — Total 7 $ 6,695 $ 6,695 $ 106 There were no loans modified as troubled debt restructurings for which there was a payment default within twelve months following the modification during the three or nine months ended September 30, 2020 and 2019. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. 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 its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The terms of certain other loans were modified during the three and nine months ended September 30, 2020 and 2019 that did not meet the definition of a TDR. The modification of these loans usually involve either a modification of the terms of a loan to borrowers who are not experiencing financial difficulties or an insignificant delay in payments. Collateral Dependent Loans For loans for which the repayment (based on the Company's assessment) is expected to be provided substantially through the operation or sale of collateral and the borrower is experiencing financial difficulty, the following table presents the loans and the corresponding individually assessed allowance for credit losses by class of financing receivable. September 30, 2020 Type of Collateral Real Estate Financial Assets and Equipment Individually assessed allowance for credit loss Commercial and industrial $ — $ 4,697 $ 668 Construction 1,817 — — Residential real estate: 1-to-4 family mortgage 190 — — Residential line of credit 1,195 — 9 Multi-family mortgage — — — Commercial real estate: Owner occupied 928 — 34 Non-owner occupied 8,181 — 1,544 Consumer and other 333 — 36 Total $ 12,644 $ 4,697 $ 2,291 Deferrals Program as part of COVID-19 Relief On March 22, |
