Loans and Related Allowance for Loan Losses | Note 5 – Loans and Related Allowance for Loan Losses The following table summarizes the primary segments of the loan portfolio at June 30, 2019 and December 31, 2018: (in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Residential Mortgage Consumer Total June 30, 2019 Individually evaluated for impairment $ 5,778 $ 8,144 $ 27 $ 3,787 $ 7 $ 17,743 Collectively evaluated for impairment $ 294,054 $ 110,582 $ 108,244 $ 438,482 $ 34,511 $ 985,873 Total loans $ 299,832 $ 118,726 $ 108,271 $ 442,269 $ 34,518 $ 1,003,616 December 31, 2018 Individually evaluated for impairment $ 5,239 $ 693 $ 17 $ 4,616 $ 10 $ 10,575 Collectively evaluated for impairment $ 301,682 $ 117,667 $ 111,449 $ 432,291 $ 34,050 $ 997,139 Total loans $ 306,921 $ 118,360 $ 111,466 $ 436,907 $ 34,060 $ 1,007,714 The segments of the Bank’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The commercial real estate (“CRE”) loan segment is then segregated into two classes. Non-owner occupied CRE loans, which include loans secured by non-owner occupied, non-farm, and nonresidential properties, generally have a greater risk profile than all other CRE loans, which include loans secured by farmland, multifamily structures and owner-occupied commercial structures. The acquisition and development (“A&D”) loan segment is segregated into two classes. One-to-four family residential construction loans are generally made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. All other A&D loans are generally made to developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures. A&D loans have a higher risk profile because the ultimate buyer, once development is completed, is generally not known at the time of the loan is made. The commercial and industrial (“C&I”) loan segment consists of loans made for the purpose of financing the activities of commercial customers. The residential mortgage loan segment is segregated into two classes: amortizing term loans, which are primarily first lien loans and home equity lines of credit, which are generally second liens. The consumer loan segment consists primarily of installment loans (direct and indirect) and overdraft lines of credit connected with customer deposit accounts. Management uses a 10-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized; and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a substandard classification. Loans in the substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. All loans greater than 90 days past due are considered Substandard. The portion of a specific allocation of the allowance for loan losses that management believes is associated with a pending event that could trigger loss in the short-term will be classified in the Doubtful category. Any portion of a loan that has been charged off is placed in the Loss category. To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Bank has a structured loan rating process with several layers of internal and external oversight. Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Bank’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in the commercial segments at origination and on an ongoing basis. The Bank’s experienced Credit Quality and Portfolio Risk departments perform an annual review of all commercial relationships of $500,000 or greater. Confirmation of the appropriate risk grade is included as part of the review process on an ongoing basis. The Credit Quality and Portfolio Risk Management departments continually review and assess loans within the portfolio. In addition, the Bank engages an external consultant to conduct loan reviews on at least an annual basis. Generally, the external consultant reviews commercial relationships greater than $1,000,000 and/or criticized non-consumer loans greater than $500,000 . Detailed reviews, including plans for resolution, are performed on loans classified as Substandard on a quarterly basis. Loans in the Special Mention and Substandard categories that are collectively evaluated for impairment are given separate consideration in the determination of the allowance. The following table presents the classes of the loan portfolio summarized by the aggregate Pass and the criticized categories of Special Mention and Substandard within the internal risk rating system at June 30, 2019 and December 31, 2018: (in thousands) Pass Special Mention Substandard Total June 30, 2019 Commercial real estate Non owner-occupied $ 137,348 $ 7,457 $ 2,012 $ 146,817 All other CRE 145,127 1,721 6,167 153,015 Acquisition and development 1-4 family residential construction 10,301 — — 10,301 All other A&D 100,490 — 7,935 108,425 Commercial and industrial 104,496 — 3,775 108,271 Residential mortgage Residential mortgage - term 367,344 — 4,250 371,594 Residential mortgage - home equity 69,142 141 1,392 70,675 Consumer 34,413 4 101 34,518 Total $ 968,661 $ 9,323 $ 25,632 $ 1,003,616 December 31, 2018 Commercial real estate Non owner-occupied $ 145,260 $ 2,904 $ 2,348 $ 150,512 All other CRE 149,076 1,752 5,581 156,409 Acquisition and development 1-4 family residential construction 16,003 — — 16,003 All other A&D 94,428 7,378 551 102,357 Commercial and industrial 107,174 3,703 589 111,466 Residential mortgage Residential mortgage - term 359,305 — 4,703 364,008 Residential mortgage - home equity 71,666 143 1,090 72,899 Consumer 33,952 4 104 34,060 Total $ 976,864 $ 15,884 $ 14,966 $ 1,007,714 Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. A loan is considered to be past due when a payment remains unpaid 30 days past its contractual due date. For all loan segments, the accrual of interest is discontinued when principal or interest is delinquent for 90 days or more unless the loan is well-secured and in the process of collection. All non-accrual loans are considered to be impaired. Interest payments received on non-accrual loans are applied as a reduction of the loan principal balance. Loans are returned to accrual status when all principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Corporation’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and non-accrual loans at June 30, 2019 and December 31, 2018: (in thousands) Current 30-59 Days Past Due 60-89 Days Past Due 90 Days+ Past Due Total Past Due and Accruing Non- Accrual Total Loans June 30, 2019 Commercial real estate Non owner-occupied $ 146,684 $ — $ — $ — $ — $ 133 $ 146,817 All other CRE 147,818 2,116 — — 2,116 3,081 153,015 Acquisition and development 1-4 family residential construction 10,301 — — — — — 10,301 All other A&D 100,702 — 74 34 108 7,615 108,425 Commercial and industrial 108,158 — 86 — 86 27 108,271 Residential mortgage Residential mortgage - term 368,467 138 1,464 197 1,799 1,328 371,594 Residential mortgage - home equity 69,403 241 25 79 345 927 70,675 Consumer 34,375 94 35 7 136 7 34,518 Total $ 985,908 $ 2,589 $ 1,684 $ 317 $ 4,590 $ 13,118 $ 1,003,616 December 31, 2018 Commercial real estate Non owner-occupied $ 150,339 $ — $ — $ — $ — $ 173 $ 150,512 All other CRE 153,977 464 — — 464 1,968 156,409 Acquisition and development 1-4 family residential construction 16,003 — — — — — 16,003 All other A&D 94,540 197 7,411 62 7,670 147 102,357 Commercial and industrial 111,436 29 1 — 30 — 111,466 Residential mortgage Residential mortgage - term 360,073 302 1,359 363 2,024 1,911 364,008 Residential mortgage - home equity 71,611 461 114 — 575 713 72,899 Consumer 33,832 140 73 5 218 10 34,060 Total $ 991,811 $ 1,593 $ 8,958 $ 430 $ 10,981 $ 4,922 $ 1,007,714 Non-accrual loans totaled $13.1 million at June 30, 2019, compared to $4.9 million at December 31, 2018. The increase in non-accrual balances at June 30, 2019 was primarily due to entering a forbearance agreement with one large A&D loan totaling $7.0 million during the first quarter 2019. At December 31, 2018, it was expected that this loan would be paid off by a prospective buyer. In the first quarter of 2019, the buyer declined to pursue the transaction and, subsequently, the Corporation entered into a forbearance agreement and placed the loan on non-accrual. During the second quarter of 2019, two additional CRE credits were added to non-accrual. Non-accrual loans that have been subject to partial charge-offs totaled $.2 million at June 30, 2019, compared to $.3 million at December 31, 2018. For the six months ended June 30, 2019, $1.7 million in specific allocations have been made related to the A&D portfolio. Loans secured by 1-4 family residential real estate properties in the process of foreclosure were $.2 million at June 30, 2019 and $.3 million at December 31, 2018. Accruing loans past due 30 days or more decreased to .46% of the loan portfolio at June 30, 2019, compared to 1.09% at December 31, 2018. The decrease for the first six months of 2019 was primarily related to one large relationship in the commercial A&D portfolio that moved to non-accrual status in the first quarter of 2019. An allowance for loan losses (“ALL”) is maintained to absorb losses from the loan portfolio. The ALL is based on management’s continuing evaluation of the risk characteristics and credit quality of the loan portfolio, assessment of current economic conditions, diversification and size of the portfolio, adequacy of collateral, past and anticipated loss experience, and the amount of non-performing loans. The Bank’s methodology for determining the ALL is based on the requirements of ASC Section 310-10-35, Receivables-Overall-Subsequent Measurement , for loans individually evaluated for impairment and ASC Subtopic 450-20, Contingencies - Loss Contingencies , for loans collectively evaluated for impairment, as well as the Interagency Policy Statement on the Allowance for Loan and Lease Losses and other bank regulatory guidance. The total of the two components represents the allocated portion of the Bank’s ALL. In the second quarter of 2015, management determined that it would be prudent to establish an unallocated portion of the ALL to protect the Bank from other risks associated with the loan portfolio that may not be specifically identifiable. The following table summarizes the primary segments of the ALL at June 30, 2019 and December 31, 2018, segregated by the amount required for loans individually evaluated for impairment and the amount required for loans collectively evaluated for impairment: (in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Residential Mortgage Consumer Unallocated Total June 30, 2019 Individually evaluated for impairment $ 11 $ 1,728 $ — $ 65 $ — $ — $ 1,804 Collectively evaluated for impairment $ 2,724 $ 1,566 $ 1,147 $ 3,916 $ 319 $ 500 $ 10,172 Total ALL $ 2,735 $ 3,294 $ 1,147 $ 3,981 $ 319 $ 500 $ 11,976 December 31, 2018 Individually evaluated for impairment $ 13 $ 25 $ — $ 106 $ — $ — $ 144 Collectively evaluated for impairment $ 2,767 $ 1,696 $ 1,187 $ 4,438 $ 315 $ 500 $ 10,903 Total ALL $ 2,780 $ 1,721 $ 1,187 $ 4,544 $ 315 $ 500 $ 11,047 The evaluation of the need and amount of a specific allocation of the ALL and whether a loan can be removed from impairment status is made on a quarterly basis. The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was not required at June 30, 2019 and December 31, 2018: Impaired Loans with Specific Allowance Impaired Loans with No Specific Allowance Total Impaired Loans (in thousands) Recorded Investment Related Allowances Recorded Investment Recorded Investment Unpaid Principal Balance June 30, 2019 Commercial real estate Non owner-occupied $ 119 $ 11 $ 133 $ 252 $ 8,445 All other CRE — — 5,526 5,526 5,526 Acquisition and development 1-4 family residential construction — — 304 304 304 All other A&D 7,805 1,728 35 7,840 7,907 Commercial and industrial — — 27 27 2,241 Residential mortgage Residential mortgage – term 1,205 56 1,655 2,860 3,063 Residential mortgage – home equity 171 9 756 927 941 Consumer — — 7 7 7 Total impaired loans $ 9,300 $ 1,804 $ 8,443 $ 17,743 $ 28,434 December 31, 2018 Commercial real estate Non owner-occupied $ 121 $ 13 $ 173 $ 294 $ 8,488 All other CRE — — 4,945 4,945 4,945 Acquisition and development 1-4 family residential construction — — 316 316 316 All other A&D 230 25 147 377 525 Commercial and industrial — — 17 17 2,231 Residential mortgage Residential mortgage – term 993 106 2,910 3,903 4,130 Residential mortgage – home equity — — 713 713 726 Consumer — — 10 10 10 Total impaired loans $ 1,344 $ 144 $ 9,231 $ 10,575 $ 21,371 Loans that are collectively evaluated for impairment are analyzed with general allowances being made as appropriate. For general allowances, historical loss trends are used in the estimation of losses in the current portfolio. These historical loss amounts are modified by other qualitative factors. The classes described above, which are based on the Federal call code assigned to each loan, provide the starting point for the ALL analysis. Management tracks the historical net charge-off activity (full and partial charge-offs, net of full and partial recoveries) at the call code level. A historical charge-off factor is calculated utilizing a defined number of consecutive historical quarters. Consumer pools currently utilize a rolling 12 quarters, while Commercial pools currently utilize a rolling eight quarters. “Pass” rated credits are segregated from “Criticized” credits for the application of qualitative factors. Most “Pass” pools for commercial and residential real estate are further segmented based upon the geographic location of the underlying collateral. There are seven geographic regions utilized – six that represent the Bank’s lending footprint and a seventh for all out-of-market credits. Different economic environments and resultant credit risks exist in each region that are acknowledged in the assignment of qualitative factors. Loans in the criticized pools, which possess certain qualities or characteristics that may lead to collection and loss issues, are closely monitored by management and subject to additional qualitative factors. Management supplements the historical charge-off factor with a number of additional qualitative factors that are likely to cause estimated credit losses associated with the existing loan pools to differ from historical loss experience. The additional factors, which are evaluated quarterly and updated using information obtained from internal, regulatory, and governmental sources, are: (a) national and local economic trends and conditions; (b) levels of and trends in delinquency rates and non-accrual loans; (c) trends in volumes and terms of loans; (d) effects of changes in lending policies; (e) experience, ability, and depth of lending staff; (f) value of underlying collateral; and (g) concentrations of credit from a loan type, industry and/or geographic standpoint. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ALL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ALL. Residential mortgage and consumer loans are charged off after they are 120 days contractually past due. All other loans are charged off based on an evaluation of the facts and circumstances of each individual loan. When the Bank believes that its ability to collect is solely dependent on the liquidation of the collateral, a full or partial charge-off is recorded promptly to bring the recorded investment to an amount that the Bank believes is supported by an ability to collect on the collateral. The circumstances that may impact the Bank’s decision to charge-off all or a portion of a loan include default or non-payment by the borrower, scheduled foreclosure actions, and/or prioritization of the Bank’s claim in bankruptcy. There may be circumstances where, due to pending events, the Bank will place a specific allocation of the ALL on a loan for which a partial charge-off has been previously recognized. This specific allocation may be either charged off or removed depending upon the outcome of the pending event. Full or partial charge-offs are not recovered until full principal and interest on the loan have been collected, even if a subsequent appraisal supports a higher value. Loans with partial charge-offs generally remain in non-accrual status. Both full and partial charge-offs reduce the recorded investment of the loan and the ALL and are considered to be charge-offs for purposes of all credit loss metrics and trends, including the historical rolling charge-off rates used in the determination of the ALL. The following tables present the activity in the ALL for the six- and three-month periods ended June 30, 2019 and 2018: (in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Residential Mortgage Consumer Unallocated Total ALL balance at January 1, 2019 $ 2,780 $ 1,721 $ 1,187 $ 4,544 $ 315 $ 500 $ 11,047 Charge-offs — (29) (5) (86) (136) — (256) Recoveries 30 111 76 195 91 — 503 Provision (75) 1,491 (111) (672) 49 — 682 ALL balance at June 30, 2019 $ 2,735 $ 3,294 $ 1,147 $ 3,981 $ 319 $ 500 $ 11,976 ALL balance at January 1, 2018 $ 3,699 $ 1,257 $ 869 $ 3,444 $ 203 $ 500 $ 9,972 Charge-offs (889) (98) (10) (240) (175) — (1,412) Recoveries 60 258 31 65 79 — 493 Provision 433 (245) (104) 475 157 — 716 ALL balance at June 30, 2018 $ 3,303 $ 1,172 $ 786 $ 3,744 $ 264 $ 500 $ 9,769 (in thousands) Commercial Real Estate Acquisition and Development Commercial and Industrial Residential Mortgage Consumer Unallocated Total ALL balance at April 1, 2019 $ 2,775 $ 2,338 $ 1,125 $ 4,497 $ 313 $ 500 $ 11,548 Charge-offs — — (5) (74) (68) — (147) Recoveries 1 99 25 87 30 — 242 Provision (41) 857 2 (529) 44 — 333 ALL balance at June 30, 2019 $ 2,735 $ 3,294 $ 1,147 $ 3,981 $ 319 $ 500 $ 11,976 ALL balance at April 1, 2018 $ 3,976 $ 1,160 $ 860 $ 3,678 $ 296 $ 500 $ 10,470 Charge-offs (889) (7) (10) (86) (107) — (1,099) Recoveries 1 44 13 27 44 — 129 Provision 215 (25) (77) 125 31 — 269 ALL balance at June 30, 2018 $ 3,303 $ 1,172 $ 786 $ 3,744 $ 264 $ 500 $ 9,769 The ALL is based on estimates, and actual losses may vary from current estimates. Management believes that the granularity of the homogeneous pools and the related historical loss ratios and other qualitative factors, as well as the consistency in the application of assumptions, result in an ALL that is representative of the risk found in the components of the portfolio at any given date. The following table presents the average recorded investment in impaired loans by class and related interest income recognized for the periods indicated: Six months ended Six months ended June 30, 2019 June 30, 2018 (in thousands) Average investment Interest income recognized on an accrual basis Interest income recognized on a cash basis Average investment Interest income recognized on an accrual basis Interest income recognized on a cash basis Commercial real estate Non owner-occupied $ 270 $ 6 $ — $ 813 $ 7 $ 66 All other CRE 4,853 76 — 6,625 99 56 Acquisition and development 1-4 family residential construction 310 9 — 457 12 — All other A&D 5,306 6 — 276 6 — Commercial and industrial 24 — — 305 10 — Residential mortgage Residential mortgage – term 3,261 53 10 3,487 62 — Residential mortgage – home equity 854 — 2 553 — 7 Consumer 14 — — 23 — — Total $ 14,892 $ 150 $ 12 $ 12,539 $ 196 $ 129 Three months ended Three months ended June 30, 2019 June 30, 2018 (in thousands) Average investment Interest income recognized on an accrual basis Interest income recognized on a cash basis Average investment Interest income recognized on an accrual basis Interest income recognized on a cash basis Commercial real estate Non owner-occupied $ 258 $ 3 $ — $ 1,258 $ 3 $ — All other CRE 4,807 38 — 5,726 50 — Acquisition and development 1-4 family residential construction 307 4 — 492 6 — All other A&D 7,772 3 — 340 3 — Commercial and industrial 27 — — 311 5 — Residential mortgage Residential mortgage – term 2,941 25 2 3,529 30 — Residential mortgage – home equity 925 — 2 614 — — Consumer 16 — — 24 — — Total $ 17,053 $ 73 $ 4 $ 12,294 $ 97 $ — The Bank modifies loan terms in the normal course of business. Among other reasons, modifications might be made in an effort to retain the loan relationship, to remain competitive in the current interest rate environment and/or to re-amortize or extend the loan’s term to better match the loan’s payment stream with the borrower’s cash flow. A modified loan is considered to be a troubled debt restructuring (“TDR”) when the Bank has determined that the borrower is troubled (i.e., experiencing financial difficulties). The Bank evaluates the probability that the borrower will be in payment default on any of its debt obligations in the foreseeable future without modification. To make this determination, the Bank performs a global financial review of the borrower and loan guarantors to assess their current ability to meet their financial obligations. When the Bank restructures a loan to a troubled borrower, the loan terms (i.e., interest rate, payment amount, amortization period, and/or maturity date) are modified in such a way as to enable the borrower to cover the modified debt service payments based on current financials and cash flow adequacy. If a borrower’s hardship is thought to be temporary, then modified terms are offered only for that time period. Where possible, the Bank obtains additional collateral and/or secondary payment sources at the time the loan is restructured in order to put the Bank in the best possible position if the borrower is not able to meet the modified terms. To date, the Bank has not forgiven any principal as a restructuring concession. The Bank will not offer modified terms if it believes that modifying the loan terms will only delay an inevitable permanent default. All loans designated as TDRs are considered impaired loans and may be in either accruing or non-accruing status. The Bank’s policy for recognizing interest income on impaired loans does not differ from its overall policy for interest recognition. Accordingly, the accrual of interest is discontinued when principal or interest is delinquent for 90 days or more unless the loan is well-secured and in the process of collection. If the loan was accruing at the time of the modification, then it continues to be in accruing status subsequent to the modification. Non-accrual TDRs may return to accruing status when there has been sufficient payment performance for a period of at least six months. TDRs are considered to be in payment default if, subsequent to modification, the loans are transferred to non-accrual status or to foreclosure. Loans may be removed from being reported as a TDR in the calendar year following the modification if the interest rate at the time of modification was consistent with the interest rate for a loan with comparable credit risk and the loan has performed according to its modified terms for at least six months. The volume and type of TDR activity is considered in the assessment of the local economic trends’ qualitative factor used in the determination of the ALL for loans that are evaluated collectively for impairment. There were 13 loans totaling $4.0 million and 16 loans totaling $4.9 million that were classified as TDRs at June 30, 2019 and December 31, 2018, respectively. The following tables present the volume and recorded investment at that time of modification of TDRs by class and type of modification that occurred during the periods indicated: Temporary Rate Modification Extension of Maturity Modification of Payment and Other Terms (in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Number of Contracts Recorded Investment Six months ended June 30, 2019 Commercial real estate Non owner-occupied — $ — — $ — — $ — All other CRE — — — — — — Acquisition and development 1-4 family residential construction — — — — — — All other A&D — — — — 1 227 Commercial and industrial — — — — — — Residential mortgage Residential mortgage – term — — — — 1 243 Residential mortgage – home equity — — — — — — Consumer — — — — — — Total — $ — — $ — 2 $ 470 Temporary Rate Modification Extension of Maturity Modification of Payment and Other Terms (in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Number of Contracts Recorded Investment Six months ended June 30, 2018 Commercial real estate Non owner-occupied — $ — — $ — 1 $ 126 All other CRE — — 1 179 — — Acquisition and development 1-4 family residential construction — — — — — — All other A&D — — — — — — Commercial and industrial — — — — — — Residential mortgage Residential mortgage – term — — — — — — Residential mortgage – home equity — — — — — — Consumer — — — — — — Total — $ — 1 $ 179 1 $ 126 During the six months ended June 30, 2019, there were no new TDRs but two existing TDRs that had reached their modification maturity dates were re-modified. These re-modifications did not impact the ALL. During the six months ended June 30, 2019, there were no payment defaults. During the six months ended June 30, 2018, there were no new TDRs but two existing TDRs that had reached their modification maturity dates were re-modified. These re-modifications did not impact the ALL. During the six months ended June 30, 2018, there were no payment defaults. Temporary Rate Modification Extension of Maturity Modification of Payment and Other Terms (in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Number of Contracts Recorded Investment Three months ended June 30, 2018 Commercial real estate Non owner-occupied — $ — — $ — 1 $ 126 All other CRE — — 1 179 — — Acquisition and development 1-4 family residential construction — — — — — — All other A&D — — — — — — Commercial and industrial — — — — — — Residential mortgage Residential mortgage – term — — — — — — Residential mortgage – home equity — — — — — — Consumer — — — — — — Total — $ — 1 $ 179 1 $ 126 During the three months ended June 30, 2019, there were no new TDRs, no modifications on existing TDRs and no payment defaults. During the three months ended June 30, 2018, there were no new TDRs but two existing TDRs that had reached their modification maturity dates were re-modified. These re-modifications did not impact the ALL. During the second quarter of 2018, there were no payment defaults. |