Loans | LOANS Total net loans at June 30, 2021 and December 31, 2020 are summarized as follows: June 30, 2021 Percentage December 31, 2020 Percentage Farmland $ 20,737 0.6 % $ 23,316 0.7 % Owner-occupied, nonfarm nonresidential properties 425,444 12.3 % 407,924 12.1 % Agricultural production and other loans to farmers 2,411 0.1 % 2,664 0.1 % Commercial and Industrial 687,333 19.8 % 663,550 19.7 % Obligations (other than securities and leases) of states and political subdivisions 131,862 3.8 % 132,818 3.9 % Other loans 13,404 0.4 % 11,961 0.4 % Other construction loans and all land development and other land loans 240,957 6.9 % 205,734 6.1 % Multifamily (5 or more) residential properties 231,417 6.7 % 212,815 6.3 % Non-owner occupied, nonfarm nonresidential properties 628,669 18.1 % 640,945 19.0 % 1-4 Family Construction 34,394 1.0 % 27,768 0.8 % Home equity lines of credit 104,897 3.0 % 109,444 3.2 % Residential Mortgages secured by first liens 795,738 22.9 % 777,030 23.0 % Residential Mortgages secured by junior liens 55,177 1.6 % 53,726 1.6 % Other revolving credit plans 24,691 0.7 % 25,507 0.8 % Automobile 22,924 0.7 % 25,344 0.8 % Other consumer 41,103 1.2 % 42,792 1.3 % Credit cards 8,453 0.2 % 8,115 0.2 % Overdrafts 234 0.0 % 336 0.0 % Total loans $ 3,469,845 100.0 % $ 3,371,789 100.0 % Less: Allowance for credit losses (36,908) (34,340) Loans, net $ 3,432,937 $ 3,337,449 Net deferred loan origination fees (costs) included in the above loan table $ 10,514 $ 8,789 The Corporation’s outstanding loans and related unfunded commitments are primarily concentrated within central and northwest Pennsylvania, central and northeast Ohio, and western New York. The Bank attempts to limit concentrations within specific industries by utilizing dollar limitations to single industries or customers, and by entering into participation agreements with third parties. Collateral requirements are established based on management’s assessment of the customer. The Corporation maintains lending policies to control the quality of the loan portfolio. These policies delegate the authority to extend loans under specific guidelines and underwriting standards. These policies are prepared by the Corporation’s management and reviewed and ratified annually by the Corporation’s Board of Directors. As a result of the adoption of ASC 326 effective January 1, 2020, there is a lack of comparability in both the allowance and provisions for credit losses for the periods presented. Beginning with the quarter ended December 31, 2020, the Corporation adopted ASC 326 and subsequent results are presented using the current expected credit losses (“CECL”) methodology. Prior to the quarter ended December 31, 2020, the results were reported in accordance with the incurred loss methodology and have not been restated. Transactions in the allowance for credit losses for the three months ended June 30, 2021 were as follows: Beginning (Charge-offs) Recoveries Provision (Benefit) for Credit Loss Expense Ending Allowance Farmland $ 224 $ 0 $ 0 $ (100) $ 124 Owner-occupied, nonfarm nonresidential properties 2,935 0 3 (58) 2,880 Agricultural production and other loans to farmers 28 0 0 (16) 12 Commercial and Industrial 6,479 (14) 15 832 7,312 Obligations (other than securities and leases) of states and political subdivisions 1,715 (250) 0 860 2,325 Other loans 73 0 0 44 117 Other construction loans and all land development and other land loans 2,006 0 0 358 2,364 Multifamily (5 or more) residential properties 2,754 0 0 (440) 2,314 Non-owner occupied, nonfarm nonresidential properties 11,326 0 0 (1,164) 10,162 1-4 Family Construction 67 0 0 43 110 Home equity lines of credit 843 0 2 184 1,029 Residential Mortgages secured by first liens 3,550 (42) 1 889 4,398 Residential Mortgages secured by junior liens 224 0 0 184 408 Other revolving credit plans 527 (17) 3 (54) 459 Automobile 182 0 3 56 241 Other consumer 2,374 (246) 47 227 2,402 Credit cards 65 (39) 3 39 68 Overdrafts 183 (107) 24 83 183 Total loans $ 35,555 $ (715) $ 101 $ 1,967 $ 36,908 Transactions in the allowance for credit losses for the six months ended June 30, 2021 were as follows: Beginning (Charge-offs) Recoveries Provision (Benefit) for Credit Loss Expense Ending Allowance Farmland $ 221 $ 0 $ 0 $ (97) $ 124 Owner-occupied, nonfarm nonresidential properties 3,700 (531) 5 (294) 2,880 Agricultural production and other loans to farmers 24 0 0 (12) 12 Commercial and Industrial 6,233 (70) 20 1,129 7,312 Obligations (other than securities and leases) of states and political subdivisions 998 (250) 0 1,577 2,325 Other loans 68 0 0 49 117 Other construction loans and all land development and other land loans 1,956 0 0 408 2,364 Multifamily (5 or more) residential properties 2,724 0 0 (410) 2,314 Non-owner occupied, nonfarm nonresidential properties 8,658 0 0 1,504 10,162 1-4 Family Construction 82 0 0 28 110 Home equity lines of credit 985 0 2 42 1,029 Residential Mortgages secured by first liens 4,539 (70) 32 (103) 4,398 Residential Mortgages secured by junior liens 241 0 0 167 408 Other revolving credit plans 507 (23) 5 (30) 459 Automobile 132 (5) 3 111 241 Other consumer 2,962 (561) 95 (94) 2,402 Credit cards 66 (72) 11 63 68 Overdrafts 244 (191) 79 51 183 Total loans $ 34,340 $ (1,773) $ 252 $ 4,089 $ 36,908 The Corporation's allowance for credit losses is influenced by loan volumes, risk rating migration, delinquency status and other conditions influencing loss expectations, such as reasonable and supportable forecasts of economic conditions. For the three and six months ended June 30, 2021, the allowance for credit losses increased due to the growth in the Corporation's loan portfolio, coupled with quantitative and qualitative analysis, the impact of net charge-offs and continued uncertainty within the economic environment. Transactions in the allowance for loan losses for the three months ended June 30, 2020 were as follows: Commercial, Industrial Commercial Residential Consumer Credit Overdrafts Total Allowance for loan losses, April 1, 2020 $ 10,532 $ 7,492 $ 1,458 $ 2,138 $ 112 $ 183 $ 21,915 Charge-offs (2,623) 0 (19) (413) (41) (95) (3,191) Recoveries 7 2 0 38 10 68 125 Provision for loan losses 1,886 2,134 1,237 377 33 13 5,680 Allowance for loan losses, June 30, 2020 $ 9,802 $ 9,628 $ 2,676 $ 2,140 $ 114 $ 169 $ 24,529 Transactions in the allowance for loan losses for the six months ended June 30, 2020 were as follows: Commercial, Industrial Commercial Residential Consumer Credit Overdrafts Total Allowance for loan losses, January 1, 2020 $ 8,287 $ 6,952 $ 1,499 $ 2,411 $ 84 $ 240 $ 19,473 Charge-offs (2,648) 0 (162) (1,005) (72) (214) (4,101) Recoveries 25 174 3 81 11 104 398 Provision for loan losses 4,138 2,502 1,336 653 91 39 8,759 Allowance for loan losses, June 30, 2020 $ 9,802 $ 9,628 $ 2,676 $ 2,140 $ 114 $ 169 $ 24,529 The unpaid principal balance of impaired loans includes the Corporation’s recorded investment in the loan and amounts that have been recorded as charge-offs. Three months ended June 30, 2020 Six months ended June 30, 2020 Average Interest Cash Basis Average Interest Cash Basis With an allowance recorded: Commercial, industrial and agricultural $ 2,052 $ 28 $ 28 $ 3,532 $ 45 $ 45 Commercial mortgage $ 4,330 $ 4 $ 4 4,330 41 41 Residential real estate $ 461 $ 0 $ 0 462 5 5 With no related allowance recorded: Commercial, industrial and agricultural $ 7,367 $ 49 $ 49 7,196 91 91 Commercial mortgage $ 14,684 $ 66 $ 66 11,293 224 224 Residential real estate $ 114 $ 2 $ 2 38 2 2 Total $ 29,008 $ 149 $ 149 $ 26,851 $ 408 $ 408 The following tables presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of June 30, 2021 and December 31, 2020, respectively: June 30, 2021 Nonaccrual Nonaccrual With No Allowance for Credit Loss Loans Past Due over 89 Days Still Accruing Farmland $ 1,817 $ 606 $ 0 Owner-occupied, nonfarm nonresidential properties 1,501 1,397 0 Commercial and Industrial 6,318 1,302 141 Obligations (other than securities and leases) of states and political subdivisions 430 430 0 Other construction loans and all land development and other land loans 1,905 77 0 Multifamily (5 or more) residential properties 1,181 5 0 Non-owner occupied, nonfarm nonresidential properties 14,352 11,946 312 Home equity lines of credit 850 850 0 Residential Mortgages secured by first liens 3,273 3,273 154 Residential Mortgages secured by junior liens 182 182 0 Other revolving credit plans 9 9 0 Automobile 51 51 0 Other consumer 430 430 0 Credit cards 0 0 4 Total loans $ 32,299 $ 20,558 $ 611 December 31, 2020 Nonaccrual Nonaccrual With No Allowance for Credit Loss Loans Past Due over 89 Days Still Accruing Farmland $ 1,844 $ 633 $ 0 Owner-occupied, nonfarm nonresidential properties 1,781 967 0 Commercial and Industrial 6,657 959 0 Other construction loans and all land development and other land loans 2,349 77 0 Multifamily (5 or more) residential properties 288 0 0 Non-owner occupied, nonfarm nonresidential properties 11,932 9,466 0 Home equity lines of credit 685 685 0 Residential Mortgages secured by first liens 4,175 3,495 283 Residential Mortgages secured by junior liens 114 114 0 Other revolving credit plans 6 6 0 Automobile 32 32 0 Other consumer 496 496 8 Credit cards 0 0 34 Total loans $ 30,359 $ 16,930 $ 325 All payments received while on nonaccrual status are applied against the principal balance of the loan. The Corporation does not recognize interest income while loans are on nonaccrual status. The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2021: Real Estate Collateral Non-Real Estate Collateral Farmland $ 1,768 $ 0 Owner-occupied, nonfarm nonresidential properties 247 17 Commercial and Industrial 347 2,197 Obligations (other than securities and leases) of states and political subdivisions 430 0 Other construction loans and all land development and other land loans 1,828 0 Multifamily (5 or more) residential properties 972 0 Non-owner occupied, nonfarm nonresidential properties 3,442 0 Residential Mortgages secured by first liens 445 0 Total loans $ 9,479 $ 2,214 The following table presents the amortized cost basis of collateral-dependent loans by class of loans as of December 31, 2020: Real Estate Collateral Non-Real Estate Collateral Farmland $ 1,793 $ 0 Owner-occupied, nonfarm nonresidential properties 285 587 Commercial and Industrial 594 5,600 Other construction loans and all land development and other land loans 2,272 0 Multifamily (5 or more) residential properties 288 0 Non-owner occupied, nonfarm nonresidential properties 9,072 880 Residential Mortgages secured by first liens 1,135 0 Total loans $ 15,439 $ 7,067 The following table presents the aging of the amortized cost basis in past-due loans as of June 30, 2021 by class of loans: 30 - 59 60 - 89 Greater Than 89 Total Past Due Loans Not Past Due Total Farmland $ 0 $ 0 $ 1,211 $ 1,211 $ 19,526 $ 20,737 Owner-occupied, nonfarm nonresidential properties 99 53 961 1,113 424,331 425,444 Agricultural production and other loans to farmers 0 0 0 0 2,411 2,411 Commercial and Industrial 252 272 1,275 1,799 685,534 687,333 Obligations (other than securities and leases) of states and political subdivisions 0 0 0 0 131,862 131,862 Other loans 0 0 0 0 13,404 13,404 Other construction loans and all land development and other land loans 0 0 1,467 1,467 239,490 240,957 Multifamily (5 or more) residential properties 0 0 209 209 231,208 231,417 Non-owner occupied, nonfarm nonresidential properties 112 203 10,543 10,858 617,811 628,669 1-4 Family Construction 6 0 0 6 34,388 34,394 Home equity lines of credit 320 87 254 661 104,236 104,897 Residential Mortgages secured by first liens 2,221 544 1,050 3,815 791,923 795,738 Residential Mortgages secured by junior liens 73 91 8 172 55,005 55,177 Other revolving credit plans 16 17 5 38 24,653 24,691 Automobile 5 6 50 61 22,863 22,924 Other consumer 250 136 162 548 40,555 41,103 Credit cards 79 35 4 118 8,335 8,453 Overdrafts 0 0 0 0 234 234 Total loans $ 3,433 $ 1,444 $ 17,199 $ 22,076 $ 3,447,769 $ 3,469,845 The following table presents the aging of the amortized cost basis in past-due loans as of December 31, 2020 by class of loans: 30 - 59 60 - 89 Greater Than 89 Total Past Due Loans Not Past Due Total Farmland $ 195 $ 0 $ 1,211 $ 1,406 $ 21,910 $ 23,316 Owner-occupied, nonfarm nonresidential properties 10 885 732 1,627 406,297 407,924 Agricultural production and other loans to farmers 0 0 0 0 2,664 2,664 Commercial and Industrial 476 335 3,887 4,698 658,852 663,550 Obligations (other than securities and leases) of states and political subdivisions 0 0 0 0 132,818 132,818 Other loans 0 0 0 0 11,961 11,961 Other construction loans and all land development and other land loans 0 0 1,917 1,917 203,817 205,734 Multifamily (5 or more) residential properties 0 0 0 0 212,815 212,815 Non-owner occupied, nonfarm nonresidential properties 314 156 10,184 10,654 630,291 640,945 1-4 Family Construction 0 0 0 0 27,768 27,768 Home equity lines of credit 166 235 486 887 108,557 109,444 Residential Mortgages secured by first liens 2,834 629 1,911 5,374 771,656 777,030 Residential Mortgages secured by junior liens 8 0 66 74 53,652 53,726 Other revolving credit plans 36 19 0 55 25,452 25,507 Automobile 73 0 9 82 25,262 25,344 Other consumer 246 132 245 623 42,169 42,792 Credit cards 72 39 34 145 7,970 8,115 Overdrafts 0 0 0 0 336 336 Total loans $ 4,430 $ 2,430 $ 20,682 $ 27,542 $ 3,344,247 $ 3,371,789 Troubled Debt Restructurings 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 a loan modification. This evaluation is performed using the Corporation’s internal underwriting policies. The Corporation has no further loan commitments to customers whose loans are classified as a troubled debt restructuring. As of June 30, 2021 and December 31, 2020, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included either or both of the following: a reduction of the stated interest rate of the loan; or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The Corporation had an amortized cost in troubled debt restructurings of $16,969 and $15,088 as of June 30, 2021 and December 31, 2020, respectively. The Corporation has allocated $1,746 and $779 of allowance for those loans as of June 30, 2021 and December 31, 2020, respectively. The following table presents loans modified as TDRs during the three months ended June 30, 2021: Three Months Ended June 30, 2021 Number of Pre-Modification Post-Modification Commercial and Industrial 1 $ 578 $ 578 Total loans 1 $ 578 $ 578 The following table presents loans modified as TDRs during the six months ended June 30, 2021: Six Months Ended June 30, 2021 Number of Pre-Modification Post-Modification Commercial and Industrial 1 $ 578 $ 578 Multifamily (5 or more) residential properties 1 717 717 Non-owner occupied, nonfarm nonresidential properties 1 1,604 1,604 Total loans 3 $ 2,899 $ 2,899 There were nine loans modified as troubled debt restructurings during the three and six months ended June 30, 2020. Three and six months ended June 30, 2020 Number of Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial, industrial and agricultural 8 $ 1,593 $ 1,593 Residential real estate 1 116 116 Total 9 $ 1,709 $ 1,709 The troubled debt restructurings described above increased the allowance for credit losses by an immaterial amount for the three and six months ended June 30, 2021 and 2020, respectively. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no loans modified as troubled debt restructurings for which there was a payment default within a twelve-month cycle following the modification during the three and six months months ended June 30, 2021 and June 30, 2020. There were no principal balances forgiven in connection with the loan restructurings. Generally, nonperforming troubled debt restructurings are restored to accrual status when the obligation is brought current, has performed in accordance with the contractual terms for a reasonable period of time (generally six months) and the ultimate collectability of the total contractual principal and interest is no longer in doubt. Credit Quality Indicators The Corporation 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 Corporation analyzes loans individually to classify the loans as to credit risk. The Corporation uses the following definitions for risk ratings: Special Mention: Loans classified as special mention 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 Corporation’s credit position at some future date. Substandard: Loans classified 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 classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Corporation 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. The following tables represent the Corporation's credit risk profile by risk rating. Loans not rated as special mention, substandard, or doubtful are considered to be pass rated loans. June 30, 2021 Pass Special Mention Substandard Doubtful Total Farmland $ 17,406 $ 1,514 $ 1,817 $ 0 $ 20,737 Owner-occupied, nonfarm nonresidential properties 412,406 2,563 10,475 0 425,444 Agricultural production and other loans to farmers 2,411 0 0 0 2,411 Commercial and Industrial 660,505 11,682 15,146 0 687,333 Obligations (other than securities and leases) of states and political subdivisions 131,031 0 831 0 131,862 Other loans 13,404 0 0 0 13,404 Other construction loans and all land development and other land loans 234,533 4,957 1,467 0 240,957 Multifamily (5 or more) residential properties 230,235 0 1,182 0 231,417 Non-owner occupied, nonfarm nonresidential properties 581,865 11,610 35,194 0 628,669 Total loans $ 2,283,796 $ 32,326 $ 66,112 $ 0 $ 2,382,234 December 31, 2020 Pass Special Mention Substandard Doubtful Total Farmland $ 20,316 $ 1,156 $ 1,844 $ 0 $ 23,316 Owner-occupied, nonfarm nonresidential properties 391,899 2,826 13,199 0 407,924 Agricultural production and other loans to farmers 2,664 0 0 0 2,664 Commercial and Industrial 637,071 11,368 15,111 0 663,550 Obligations (other than securities and leases) of states and political subdivisions 132,110 0 708 0 132,818 Other loans 11,961 0 0 0 11,961 Other construction loans and all land development and other land loans 198,206 5,611 1,917 0 205,734 Multifamily (5 or more) residential properties 211,563 0 1,252 0 212,815 Non-owner occupied, nonfarm nonresidential properties 594,603 12,496 33,846 0 640,945 Total loans $ 2,200,393 $ 33,457 $ 67,877 $ 0 $ 2,301,727 The following tables detail the amortized cost of loans, by year of origination (for term loans) and by risk grade within each portfolio segment as of June 30, 2021. The current period originations may include modifications, extensions and renewals. Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Farmland Risk rating Pass $ 3,923 $ 1,751 $ 3,310 $ 3,662 $ 592 $ 3,761 $ 407 $ 0 $ 17,406 Special mention 0 0 0 0 394 1,120 0 0 1,514 Substandard 0 0 0 0 49 1,768 0 0 1,817 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 3,923 $ 1,751 $ 3,310 $ 3,662 $ 1,035 $ 6,649 $ 407 $ 0 $ 20,737 Owner-occupied, nonfarm nonresidential properties Risk rating Pass $ 77,959 $ 91,385 $ 82,593 $ 44,966 $ 46,002 $ 61,044 $ 8,457 $ 0 $ 412,406 Special mention 0 0 819 57 143 1,399 145 0 2,563 Substandard 530 975 2,329 654 362 5,438 187 0 10,475 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 78,489 $ 92,360 $ 85,741 $ 45,677 $ 46,507 $ 67,881 $ 8,789 $ 0 $ 425,444 Agricultural production and other loans to farmers Risk rating Pass $ 911 $ 149 $ 87 $ 298 $ 0 $ 11 $ 955 $ 0 $ 2,411 Special mention 0 0 0 0 0 0 0 0 0 Substandard 0 0 0 0 0 0 0 0 0 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 911 $ 149 $ 87 $ 298 $ 0 $ 11 $ 955 $ 0 $ 2,411 Commercial and Industrial Risk rating Pass $ 251,172 $ 131,978 $ 43,080 $ 25,456 $ 21,701 $ 19,158 $ 167,960 $ 0 $ 660,505 Special mention 0 313 929 3,502 199 898 5,841 0 11,682 Substandard 642 829 1,930 498 111 5,529 5,607 0 15,146 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 251,814 $ 133,120 $ 45,939 $ 29,456 $ 22,011 $ 25,585 $ 179,408 $ 0 $ 687,333 Obligations (other than securities and leases) of states and political subdivisions Risk rating Pass $ 12,158 $ 17,096 $ 11,610 $ 22,676 $ 20,495 $ 38,153 $ 8,843 $ 0 $ 131,031 Special mention 0 0 0 0 0 0 0 0 0 Substandard 401 430 0 0 0 0 0 0 831 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 12,559 $ 17,526 $ 11,610 $ 22,676 $ 20,495 $ 38,153 $ 8,843 $ 0 $ 131,862 Other loans Risk rating Pass $ 261 $ 7,691 $ 644 $ 346 $ 0 $ 0 $ 4,462 $ 0 $ 13,404 Special mention 0 0 0 0 0 0 0 0 0 Substandard 0 0 0 0 0 0 0 0 0 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 261 $ 7,691 $ 644 $ 346 $ 0 $ 0 $ 4,462 $ 0 $ 13,404 Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Other construction loans and all land development and other land loans Risk rating Pass $ 37,942 $ 136,277 $ 43,083 $ 11,319 $ 912 $ 1,456 $ 3,544 $ 0 $ 234,533 Special mention 1,492 0 661 29 2,775 0 0 0 4,957 Substandard 0 0 0 0 0 1,390 77 0 1,467 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 39,434 $ 136,277 $ 43,744 $ 11,348 $ 3,687 $ 2,846 $ 3,621 $ 0 $ 240,957 Multifamily (5 or more) residential properties Risk rating Pass $ 59,150 $ 69,019 $ 33,183 $ 10,540 $ 38,712 $ 17,327 $ 2,304 $ 0 $ 230,235 Special mention 0 0 0 0 0 0 0 0 0 Substandard 0 6 703 269 204 0 0 0 1,182 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 59,150 $ 69,025 $ 33,886 $ 10,809 $ 38,916 $ 17,327 $ 2,304 $ 0 $ 231,417 Non-owner occupied, nonfarm nonresidential properties Risk rating Pass $ 82,669 $ 125,257 $ 102,674 $ 69,173 $ 48,773 $ 142,211 $ 11,108 $ 0 $ 581,865 Special mention 0 83 750 1,177 3,627 5,523 450 0 11,610 Substandard 841 0 12,689 1,672 7,521 11,877 594 0 35,194 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 83,510 $ 125,340 $ 116,113 $ 72,022 $ 59,921 $ 159,611 $ 12,152 $ 0 $ 628,669 The following tables detail the amortized cost of loans, by year of origination (for term loans) and by risk grade within each portfolio segment as of December 31, 2020. The current period originations may include modifications, extensions and renewals. Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Farmland Risk rating Pass $ 1,617 $ 4,448 $ 3,767 $ 3,648 $ 894 $ 5,280 $ 662 $ 0 $ 20,316 Special mention 1,156 0 0 0 0 0 0 0 1,156 Substandard 0 0 0 51 582 1,211 0 0 1,844 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 2,773 $ 4,448 $ 3,767 $ 3,699 $ 1,476 $ 6,491 $ 662 $ 0 $ 23,316 Owner-occupied, nonfarm nonresidential properties Risk rating Pass $ 86,694 $ 109,228 $ 52,818 $ 56,948 $ 26,119 $ 50,839 $ 9,253 $ 0 $ 391,899 Special mention 0 452 74 541 318 1,310 131 0 2,826 Substandard 1,021 2,449 2,438 938 3,675 2,430 248 0 13,199 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 87,715 $ 112,129 $ 55,330 $ 58,427 $ 30,112 $ 54,579 $ 9,632 $ 0 $ 407,924 Agricultural production and other loans to farmers Risk rating Pass $ 267 $ 155 $ 601 $ 0 $ 54 $ 0 $ 1,587 $ 0 $ 2,664 Special mention 0 0 0 0 0 0 0 0 0 Substandard 0 0 0 0 0 0 0 0 0 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 267 $ 155 $ 601 $ 0 $ 54 $ 0 $ 1,587 $ 0 $ 2,664 Commercial and Industrial Risk rating Pass $ 318,323 $ 54,620 $ 46,854 $ 32,426 $ 7,197 $ 7,265 $ 170,386 $ 0 $ 637,071 Special mention 127 1,017 3,489 712 300 1,033 4,690 0 11,368 Substandard 801 1,916 1,212 112 37 4,858 6,175 0 15,111 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 319,251 $ 57,553 $ 51,555 $ 33,250 $ 7,534 $ 13,156 $ 181,251 $ 0 $ 663,550 Obligations (other than securities and leases) of states and political subdivisions Risk rating Pass $ 10,722 $ 12,279 $ 35,176 $ 20,891 $ 19,365 $ 24,789 $ 8,888 $ 0 $ 132,110 Special mention 0 0 0 0 0 0 0 0 0 Substandard 708 0 0 0 0 0 0 0 708 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 11,430 $ 12,279 $ 35,176 $ 20,891 $ 19,365 $ 24,789 $ 8,888 $ 0 $ 132,818 Other loans Risk rating Pass $ 7,268 $ 1,237 $ 386 $ 0 $ 0 $ 0 $ 3,070 $ 0 $ 11,961 Special mention 0 0 0 0 0 0 0 0 0 Substandard 0 0 0 0 0 0 0 0 0 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 7,268 $ 1,237 $ 386 $ 0 $ 0 $ 0 $ 3,070 $ 0 $ 11,961 Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Other construction loans and all land development and other land loans Risk rating Pass $ 119,380 $ 52,078 $ 19,977 $ 2,300 $ 28 $ 1,895 $ 2,548 $ 0 $ 198,206 Special mention 1,417 672 29 3,303 0 190 0 0 5,611 Substandard 0 0 0 0 0 1,840 77 0 1,917 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 120,797 $ 52,750 $ 20,006 $ 5,603 $ 28 $ 3,925 $ 2,625 $ 0 $ 205,734 Multifamily (5 or more) residential properties Risk rating Pass $ 73,572 $ 39,633 $ 26,230 $ 49,178 $ 4,086 $ 16,957 $ 1,907 $ 0 $ 211,563 Special mention 0 0 0 0 0 0 0 0 0 Substandard 6 753 288 205 0 0 0 0 1,252 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 73,578 $ 40,386 $ 26,518 $ 49,383 $ 4,086 $ 16,957 $ 1,907 $ 0 $ 212,815 Non-owner occupied, nonfarm nonresidential properties Risk rating Pass $ 161,045 $ 127,518 $ 89,520 $ 55,966 $ 44,959 $ 105,962 $ 9,633 $ 0 $ 594,603 Special mention 99 895 2,111 3,969 835 4,137 450 0 12,496 Substandard 0 12,325 326 7,584 722 12,289 600 0 33,846 Doubtful 0 0 0 0 0 0 0 0 0 Total $ 161,144 $ 140,738 $ 91,957 $ 67,519 $ 46,516 $ 122,388 $ 10,683 $ 0 $ 640,945 The Corporation considers the performance of the loan portfolio and its impact on the allowance for credit losses. For 1-4 family construction, home equity lines of credit, residential mortgages secured by first liens, residential mortgages secured by junior liens, automobile, credit cards, other revolving credit plans and other consumer segments, the Corporation evaluates credit quality based on the performance status the loan, which was previously presented, and by payment activity. Nonperforming loans include loans on nonaccrual status and loans past due over 89 days and still accruing interest. June 30, 2021 December 31, 2020 Performing Nonperforming Total Performing Nonperforming Total 1-4 Family Construction $ 34,394 $ 0 $ 34,394 $ 27,768 $ 0 $ 27,768 Home equity lines of credit 104,047 850 104,897 108,759 685 109,444 Residential Mortgages secured by first liens 792,311 3,427 795,738 772,572 4,458 777,030 Residential Mortgages secured by junior liens 54,995 182 55,177 53,612 114 53,726 Other revolving credit plans 24,682 9 24,691 25,501 6 25,507 Automobile 22,873 51 22,924 25,312 32 25,344 Other consumer 40,673 430 41,103 42,288 504 42,792 Total loans $ 1,073,975 $ 4,949 $ 1,078,924 $ 1,055,812 $ 5,799 $ 1,061,611 The following tables detail the amortized cost of loans, by year of origination (for term loans) and by payment activity within each portfolio segment as of June 30, 2021. The current period originations may include modifications, extensions and renewals. Term Loans Amortized Cost Basis by Origination Year 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 1-4 Family Construction Payment performance Performing $ 13,053 $ 15,467 $ 5,806 $ 68 $ 0 $ 0 $ 0 $ 0 $ 34,394 Nonperforming 0 0 0 0 0 0 0 0 0 Total $ 13,053 $ 15,467 $ 5,806 $ 68 $ 0 $ 0 $ 0 $ 0 $ 34,394 Home equity lines of credit Payment performance Performing $ 5,827 $ 19,165 $ 10,728 $ 10,767 $ 7,792 $ 43,928 $ 5,840 $ 0 $ 104,047 Nonperforming 0 0 0 0 391 459 0 0 850 Total $ 5,827 $ 19,165 $ 10,728 $ 10,767 $ 8,183 $ 44,387 $ 5,840 $ 0 $ 104,897 Residential mortgages secured by first lien Payment performance Performing $ 130,371 $ 190,117 $ 119,522 $ 76,305 $ 83,981 $ 188,543 $ 3,472 $ 0 $ 792,311 Nonperforming 0 153 82 0 199 2,950 43 0 3,427 Total $ 130,371 $ 190,270 $ 119,604 $ 76,305 $ 84,180 $ 191,493 $ 3,515 $ 0 $ 795,738 Residential mortgages secured by junior liens Payment performance Performing $ 11,106 $ 13,489 $ 9,130 $ 5,240 $ 4,705 $ 10,883 $ 442 $ 0 $ 54,995 Nonperforming 0 0 0 0 91 91 0 0 182 Total $ 11,106 $ 13,489 $ 9,130 $ 5,240 $ 4,796 $ 10,974 $ 442 $ 0 $ 55,177 Other revolving credit plans Payment performance Performing $ 1,259 $ 3,371 $ 4,383 $ 2,996 $ 3,177 $ 9,496 $ 0 $ 0 $ 24,682 Nonperforming 0 0 0 4 5 0 0 0 9 Total $ 1,259 $ 3,371 $ 4,383 $ 3,000 $ 3,182 $ 9,496 $ 0 $ 0 $ 24,691 Automobile Payment performance Performing $ 3,715 $ 7,311 $ 6,475 $ 3,380 $ 1,044 $ 948 $ 0 $ 0 $ 22,873 Nonperforming 0 0 45 0 5 1 0 0 51 Total $ 3,715 $ 7,311 $ 6,520 $ 3,380 $ 1,049 $ 949 $ 0 $ 0 $ 22,924 Other consumer Payment performance Performing $ 12,195 $ 17,071 $ 7,190 $ 2,185 $ 483 $ 1,549 $ 0 $ 0 $ 40,673 Nonperforming 2 173 125 48 14 68 0 0 430 Total $ 12,197 $ 17,244 $ 7,315 $ 2,233 $ 497 $ 1,617 $ 0 $ 0 $ 41,103 The following tables detail the amortized cost of loans, by year of origination (for term loans) and by payment activity within each portfolio segment as of December 31, 2020. The current period originations may include modifications, extensions and renewals. Term Loans Amortized Cost Basis by Origination Year 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total 1-4 Family Construction Payment performance Performing $ 16,081 $ 11,547 $ 140 $ 0 $ 0 $ 0 $ 0 $ 0 $ 27,768 Nonperforming 0 0 0 0 0 0 0 0 0 Total $ 16,081 $ 11,547 $ 140 $ 0 $ 0 $ 0 $ 0 $ 0 $ 27,768 Home equity lines of credit Payment performance Performing $ 19,764 $ 12,823 $ 12,842 $ 8,793 $ 8,182 $ 42,514 $ 3,841 $ 0 $ 108,759 Nonperforming 0 0 0 302 33 350 0 0 685 Total $ 19,764 $ 12,823 $ 12,842 $ 9,095 $ 8,215 $ 42,864 $ 3,841 $ 0 $ 109,444 Residential mortgages secured by first lien Payment performance Performing $ 211,910 $ 136,181 $ 93,588 $ 99,520 $ 62,312 $ 163,556 $ 5,505 $ 0 $ 772,572 Nonperforming 0 84 887 143 61 3,261 22 0 4,458 Total $ 211,910 $ 136,265 $ 94,475 $ 99,663 $ 62,373 $ 166,817 $ 5,527 $ 0 $ 777,030 Residential mortgages secured by junior liens Payment performance Performing $ 14,552 $ 12,255 $ 7,031 $ 5,660 $ 3,347 $ 10,389 $ 378 $ 0 $ 53,612 Nonperforming 0 0 0 0 19 95 0 0 114 Total $ 14,552 $ 12,255 $ 7,031 $ 5,660 $ 3,366 $ 10,484 $ 378 $ 0 $ 53,726 Other revolving credit plans Payment performance Performing $ 4,088 $ 4,516 $ 3,320 $ 3,149 $ 1,301 $ 9,127 $ 0 $ 0 $ 25,501 Nonperforming 0 0 4 0 0 2 0 0 6 Total $ 4,088 $ 4,516 $ 3,324 $ 3,149 $ 1,301 $ 9,129 $ 0 $ 0 $ 25,507 Automobile Payment performance Performing $ 8,965 $ 8,595 $ 4,652 $ 1,635 $ 764 $ 701 $ 0 $ 0 $ 25,312 Nonperforming 0 4 0 6 0 22 0 0 32 Total $ 8,965 $ 8,599 $ 4,652 $ 1,641 $ 764 $ 723 $ 0 $ 0 $ 25,344 Other consumer Payment performance Performing $ 24,857 $ 11,183 $ 3,579 $ 796 $ 218 $ 1,655 $ 0 $ 0 $ 42,288 Nonperforming 82 264 75 13 0 70 0 0 504 Total $ 24,939 $ 11,447 $ 3,654 $ 809 $ 218 $ 1,725 $ 0 $ 0 $ 42,792 June 30, 2021 December 31, 2020 Credit card Payment performance Performing $ 8,449 $ 8,081 Nonperforming 4 34 Total $ 8,453 $ 8,115 Purchased Credit Deteriorated Loans The Corporation has purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows: July 17, 2020 Purchase price of loans at acquisition $ 21,768 Allowance for credit losses at acquisition 980 Non-credit discount / (premium) at acquisition 1,063 Par valu |