Major classifications of loans are summarized in the following table

.

 

From time to time the Company purchase a limited amount of loans originated by otherwise nonaffiliated parties. The Company performs its own risk assessment and makes the credit decision on each loan prior to purchase. The Company purchased smaller balance commercial loans totaling million and million in the aggregate during and respectively. The average amount of the purchased loans was thousand for and thousand for

 

Loans with a carrying value of million and million at and respectively, were pledged to secure borrowings and lines of credit. Such borrowings primarily include FHLB advances and short-term borrowing arrangements with the Federal Reserve

.

Loans to directors, executive officers, and principal shareholders of the Company and its subsidiaries (including loans to affiliated companies of which they are principal owners) and loans to members of the immediate family of such persons were million at Such loans were made in the normal course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers and did not involve more than the normal risk of collectability

. An analysis of the activity with respect to these loans is presented in the table below.

 

 

Activity in the allowance for loan losses by portfolio segment was as follows for each of the years in the period ended

 

The following tables present individually impaired loans by class of loans for the dates indicated.

 

 

The following tables present the balance of the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment method as of and

 

 

The following tables present the recorded investment in nonperforming loans by class of loans as of and

.

 

The Company has allocated million and million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings and that are in compliance with those terms as of and respectively. The Company had commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings at and

There were loans modified as troubled debt restructurings during The Company had credits modified as troubled debt restructurings during Additionally, troubled debt restructurings increased during the quarter of as a result of the purchase of a previously-participated portion of a loan to a nonaffiliated bank. This loan was participated prior to it being restructured. The purchase price paid represented a discount of thousand or of the purchased principal amount. The loan is performing under the terms of the restructuring and the borrower’s financial position has steadily improved. Accretion of the discount was recognized over the contractual life of the loan, which ended in The total outstanding balance related to this credit, which was renewed during was million at This represents of the Company’s total restructured loans and is the largest such individual credit. This credit was restructured in following an interest rate concession and extended amortization term.

 

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended There were none during

.

The troubled debt restructurings identified above increased the allowance for loan losses by thousand for There were charge-offs related to these loans.

There were payment defaults during or for credits that were restructured during the previous months.

The tables below present an age analysis of loans past due days or more by class of loans as of the dates indicated. Past due loans that are also classified as nonaccrual are included in their respective past due category

.

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 and conditions. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes large-balance loans and non-homogeneous loans, such as commercial real estate and certain residential real estate loans. Loan rating grades, as described further below, are assigned based on a continuous process. The amount and adequacy of the allowance for loan loss is determined on a quarterly basis. The Company uses the following definitions for its risk ratings:

Loans not meeting the criteria above which are analyzed individually as part of the above described process are considered to be pass rated loans, which are considered to have a low risk of loss. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the dates indicated.

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the consumer loans outstanding based on payment activity as of and