Allowance for Loan and Lease Losses (ALLL) | NOTE 6: ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL) The following tables summarize the Company's allowance for loan and lease losses for the periods indicated (dollars in thousands) : Three Months Ended September 30 2017 2016 Organic Loans Purchased Non-Credit Impaired Loans Purchased Credit Impaired Loans Total Organic Loans Purchased Non-Credit Impaired Loans Purchased Credit Impaired Loans Total Balance, beginning of period $ 22,560 $ 667 $ 4,761 $ 27,988 $ 22,008 $ 158 $ 5,433 $ 27,599 Charge-offs (912 ) (152 ) (643 ) (1,707 ) (311 ) (16 ) (223 ) (550 ) Recoveries 106 40 — 146 39 1 — 40 Net (charge-offs) recoveries (806 ) (112 ) (643 ) (1,561 ) (272 ) (15 ) (223 ) (510 ) Provision for loan and lease losses 955 345 (885 ) 415 — 7 81 88 Balance, end of period $ 22,709 $ 900 $ 3,233 $ 26,842 $ 21,736 $ 150 $ 5,291 $ 27,177 Nine Months Ended September 30 2017 2016 Organic Loans Purchased Non-Credit Impaired Loans Purchased Credit Impaired Loans Total Organic Loans Purchased Non-Credit Impaired Loans Purchased Credit Impaired Loans Total Balance, beginning of period $ 21,086 $ 439 $ 5,073 $ 26,598 $ 21,224 $ 53 $ 7,798 $ 29,075 Charge-offs (1,988 ) (397 ) (971 ) (3,356 ) (2,858 ) (80 ) (2,345 ) (5,283 ) Recoveries 296 42 — 338 189 62 3,174 3,425 Net recoveries (charge-offs) (1,692 ) (355 ) (971 ) (3,018 ) (2,669 ) (18 ) 829 (1,858 ) Provision for loan and lease losses 3,315 816 (869 ) 3,262 3,181 115 (3,336 ) (40 ) Balance, end of period $ 22,709 $ 900 $ 3,233 $ 26,842 $ 21,736 $ 150 $ 5,291 $ 27,177 Activity in the allowance for loan and lease losses on organic loans is detailed as follows by portfolio segment for the periods indicated (dollars in thousands) : Organic Loans Commercial Real Estate Residential Real Estate Owner-Occupied Real Estate Commercial, Financial & Agricultural Leases Consumer Total Three Months Ended September 30, 2017 Beginning balance $ 13,337 $ 1,841 $ 2,036 $ 3,663 $ 825 $ 858 $ 22,560 Charge-offs (746 ) — — (98 ) (2 ) (66 ) (912 ) Recoveries — 3 — 20 67 16 106 Provision 469 132 374 97 (194 ) 77 955 Ending balance $ 13,060 $ 1,976 $ 2,410 $ 3,682 $ 696 $ 885 $ 22,709 Nine Months Ended September 30, 2017 Beginning balance $ 11,767 $ 1,786 $ 2,239 $ 4,093 $ 655 $ 546 $ 21,086 Charge-offs (933 ) (48 ) — (240 ) (501 ) (266 ) (1,988 ) Recoveries — 9 — 71 176 40 296 Provision 2,226 229 171 (242 ) 366 565 3,315 Ending balance $ 13,060 $ 1,976 $ 2,410 $ 3,682 $ 696 $ 885 $ 22,709 Three Months Ended September 30, 2016 Beginning balance $ 12,943 $ 1,890 $ 1,982 $ 3,834 $ 881 $ 478 $ 22,008 Charge-offs — (1 ) — (172 ) (112 ) (26 ) (311 ) Recoveries — 2 — 35 2 — 39 Provision (818 ) 2 56 699 (55 ) 116 — Ending balance $ 12,125 $ 1,893 $ 2,038 $ 4,396 $ 716 $ 568 $ 21,736 Nine Months Ended September 30, 2016 Beginning balance $ 13,607 $ 2,053 $ 1,920 $ 2,509 $ 865 $ 270 $ 21,224 Charge-offs (2,125 ) (29 ) — (336 ) (327 ) (41 ) (2,858 ) Recoveries — 5 44 130 9 1 189 Provision 643 (136 ) 74 2,093 169 338 3,181 Ending balance $ 12,125 $ 1,893 $ 2,038 $ 4,396 $ 716 $ 568 $ 21,736 The following table presents the balance of organic loans and the allowance for loan and lease losses based on the method of determining the allowance at the dates indicated (dollars in thousands) : Allowance for Loan and Lease Losses Loans Organic Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Allowance Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Loans September 30, 2017 Commercial real estate $ 69 $ 12,991 $ 13,060 $ 3,417 $ 1,372,678 $ 1,376,095 Residential real estate 360 1,616 1,976 720 174,538 175,258 Owner-occupied real estate 83 2,327 2,410 759 261,025 261,784 Commercial, financial & agricultural 129 3,553 3,682 511 363,040 363,551 Leases — 696 696 — 66,765 66,765 Consumer 37 848 885 75 61,125 61,200 Total organic loans $ 678 $ 22,031 $ 22,709 $ 5,482 $ 2,299,171 $ 2,304,653 December 31, 2016 Commercial real estate $ 201 $ 11,566 $ 11,767 $ 5,057 $ 1,249,751 $ 1,254,808 Residential real estate 413 1,373 1,786 825 143,470 144,295 Owner-occupied real estate — 2,239 2,239 — 256,317 256,317 Commercial, financial & agricultural 146 3,947 4,093 298 327,083 327,381 Leases — 655 655 — 71,724 71,724 Consumer 27 519 546 54 35,985 36,039 Total organic loans $ 787 $ 20,299 $ 21,086 $ 6,234 $ 2,084,330 $ 2,090,564 Activity in the allowance for loan and lease losses on purchased non-credit impaired loans is detailed as follows by portfolio segment for the periods indicated (dollars in thousands) : Purchased Non-Credit Impaired Loans Commercial Real Estate Residential Real Estate Owner-Occupied Real Estate Commercial, Financial & Agricultural Consumer Total Three Months Ended September 30, 2017 Beginning balance $ 145 $ 342 $ 152 $ 26 $ 2 $ 667 Charge-offs (50 ) (7 ) — (91 ) (4 ) (152 ) Recoveries 1 5 — 32 2 40 Provision 93 120 68 61 3 345 Ending balance $ 189 $ 460 $ 220 $ 28 $ 3 $ 900 Nine Months Ended September 30, 2017 Beginning balance $ 88 $ 72 $ 44 $ 235 $ — $ 439 Charge-offs (50 ) (7 ) (80 ) (251 ) (9 ) (397 ) Recoveries 1 5 — 32 4 42 Provision 150 390 256 12 8 816 Ending balance $ 189 $ 460 $ 220 $ 28 $ 3 $ 900 Three Months Ended September 30, 2016 Beginning balance $ — $ — $ — $ 158 $ — $ 158 Charge-offs — (14 ) — — (2 ) (16 ) Recoveries — 1 — — — 1 Provision — 13 — (8 ) 2 7 Ending balance $ — $ — $ — $ 150 $ — $ 150 Nine Months Ended September 30, 2016 Beginning balance $ — $ 53 $ — $ — $ — $ 53 Charge-offs — (76 ) — (1 ) (3 ) (80 ) Recoveries — 45 — — 17 62 Provision — (22 ) — 151 (14 ) 115 Ending balance $ — $ — $ — $ 150 $ — $ 150 The following table presents the balance of purchased non-credit impaired loans and the allowance for loan and lease losses based on the method of determining the allowance at the dates indicated (dollars in thousands) : Allowance for Loan and Lease Losses Loans Purchased Non-Credit Impaired Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Allowance Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Loans September 30, 2017 Commercial real estate $ — $ 189 $ 189 $ 525 $ 264,631 $ 265,156 Residential real estate — 460 460 387 111,857 112,244 Owner-occupied real estate — 220 220 2,664 122,774 125,438 Commercial, financial & agricultural 28 — 28 2,031 556,961 558,992 Consumer — 3 3 8 2,639 2,647 Total purchased non-credit impaired loans $ 28 $ 872 $ 900 $ 5,615 $ 1,058,862 $ 1,064,477 December 31, 2016 Commercial real estate $ — $ 88 $ 88 $ 56 $ 260,683 $ 260,739 Residential real estate — 72 72 320 144,276 144,596 Owner-occupied real estate 44 — 44 1,875 113,691 115,566 Commercial, financial & agricultural — 235 235 1,128 35,078 36,206 Consumer — — — 2 6,253 6,255 Total purchased non-credit impaired loans $ 44 $ 395 $ 439 $ 3,381 $ 559,981 $ 563,362 Activity in the allowance for loan and lease losses on purchased credit impaired loans is detailed as follows by portfolio segment for the periods indicated (dollars in thousands) : Purchased Credit Impaired Loans Commercial Real Estate Residential Real Estate Owner-Occupied Real Estate Commercial, Financial & Agricultural Consumer Total Three Months Ended September 30, 2017 Beginning balance $ 2,131 $ 968 $ 1,611 $ 37 $ 14 $ 4,761 Charge-offs (168 ) (50 ) (416 ) (6 ) (3 ) (643 ) Recoveries — — — — — — Provision (506 ) 310 (697 ) 5 3 (885 ) Ending balance $ 1,457 $ 1,228 $ 498 $ 36 $ 14 $ 3,233 Nine Months Ended September 30, 2017 Beginning balance $ 2,183 $ 1,196 $ 1,655 $ 38 $ 1 $ 5,073 Charge-offs (401 ) (92 ) (452 ) (22 ) (4 ) (971 ) Recoveries — — — — — — Provision (325 ) 124 (705 ) 20 17 (869 ) Ending balance $ 1,457 $ 1,228 $ 498 $ 36 $ 14 $ 3,233 Three Months Ended September 30, 2016 Beginning balance $ 2,834 $ 1,025 $ 1,502 $ 69 $ 3 $ 5,433 Charge-offs (131 ) (5 ) (87 ) — — (223 ) Recoveries — — — — — — Provision (341 ) 254 173 (4 ) (1 ) 81 Ending balance $ 2,362 $ 1,274 $ 1,588 $ 65 $ 2 $ 5,291 Nine Months Ended September 30, 2016 Beginning balance $ 3,388 $ 1,893 $ 2,449 $ 60 $ 8 $ 7,798 Charge-offs (864 ) (899 ) (298 ) (228 ) (56 ) (2,345 ) Recoveries 2,281 400 207 233 53 3,174 Provision (2,443 ) (120 ) (770 ) — (3 ) (3,336 ) Ending balance $ 2,362 $ 1,274 $ 1,588 $ 65 $ 2 $ 5,291 The following table presents the balance of purchased credit impaired loans and the allowance for loan and lease losses based on the method of determining the allowance at the dates indicated (dollars in thousands) : Allowance for Loan and Lease Losses Loans Purchased Credit Impaired Loans Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Allowance Individually Evaluated for Impairment Collectively Evaluated for Impairment Total Loans September 30, 2017 Commercial real estate $ 1,129 $ 328 $ 1,457 $ 89,812 $ 30,040 $ 119,852 Residential real estate 153 1,075 1,228 3,058 39,132 42,190 Owner-occupied real estate 353 145 498 14,732 11,478 26,210 Commercial, financial & agricultural 22 14 36 2,345 12,794 15,139 Consumer 14 — 14 134 135 269 Total purchased credit impaired loans $ 1,671 $ 1,562 $ 3,233 $ 110,081 $ 93,579 $ 203,660 December 31, 2016 Commercial real estate $ 760 $ 1,423 $ 2,183 $ 29,387 $ 47,892 $ 77,279 Residential real estate 156 1,040 1,196 1,897 52,610 54,507 Owner-occupied real estate 1,471 184 1,655 8,376 15,604 23,980 Commercial, financial & agricultural 2 36 38 86 4,447 4,533 Consumer — 1 1 8 339 347 Total purchased credit impaired loans $ 2,389 $ 2,684 $ 5,073 $ 39,754 $ 120,892 $ 160,646 Impaired loans, segregated by class of loans, are presented in the following table (dollars in thousands) : September 30, 2017 December 31, 2016 Unpaid Principal Balance Recorded Investment Related Allowance Unpaid Principal Balance Recorded Investment Related Allowance Impaired Loans (1) With no related allowance recorded: Construction, land & land development $ 5 $ 5 $ — $ 4,565 $ 2,933 $ — Other commercial real estate 4,606 3,800 — 56 56 — Total commercial real estate 4,611 3,805 — 4,621 2,989 — Residential real estate 413 387 — 388 320 — Owner-occupied real estate 3,392 3,257 — 193 188 — Commercial, financial & agricultural 2,012 1,457 — 1,335 1,128 — Consumer 16 8 — 2 2 — Subtotal 10,444 8,914 — 6,539 4,627 — With related allowance recorded: Construction, land & land development 139 137 69 4,277 2,124 201 Other commercial real estate — — — — — — Total commercial real estate 139 137 69 4,277 2,124 201 Residential real estate 782 720 360 891 825 413 Owner-occupied real estate 166 166 83 1,706 1,687 44 Commercial, financial & agricultural 1,127 1,085 157 308 298 146 Consumer 85 75 37 55 54 27 Subtotal 2,299 2,183 706 7,237 4,988 831 Total impaired loans $ 12,743 $ 11,097 $ 706 $ 13,776 $ 9,615 $ 831 (1) Includes loans with SBA guaranteed balances of $4.7 million and $3.0 million at September 30, 2017 and December 31, 2016 , respectively. The following table presents information related to the average recorded investment and interest income recognized on impaired loans, for the periods presented (dollars in thousands) : September 30, 2017 September 30, 2016 Impaired Loans Average Recorded Investment (1) Interest Income Recognized (2) Average Recorded Investment (1) Interest Income Recognized (2) Three Months Ended Construction, land & land development $ 146 $ — $ 5,062 $ — Other commercial real estate 4,347 — — — Total commercial real estate 4,493 — 5,062 — Residential real estate 1,120 — 1,743 — Owner-occupied real estate 3,446 — — — Commercial, financial & agricultural 2,653 — 1,163 — Consumer 87 — 50 — Total impaired loans $ 11,799 $ — $ 8,018 $ — Nine Months Ended Construction, land & land development $ 2,862 $ — $ 6,070 $ — Other commercial real estate 4,558 — 201 — Total commercial real estate 7,420 — 6,271 — Residential real estate 1,154 — 1,794 — Owner-occupied real estate 3,500 — 148 3 Commercial, financial & agricultural 2,761 1 1,722 24 Consumer 94 — 38 — Total impaired loans $ 14,929 $ 1 $ 9,973 $ 27 (1) The average recorded investment for troubled debt restructurings was $0.0 million and $2.7 million for the three and nine months ended September 30, 2017 , respectively, and was $5.0 million and $6.4 million for the three and nine months ended September 30, 2016 , respectively. (2) The interest income recognized on troubled debt restructurings was $0 for both the three and nine months ended September 30, 2017 , and was $0 and $24,000 for the three and nine months ended September 30, 2016 , respectively. The following table presents the recorded investment in nonaccrual loans by loan class at the dates indicated (dollars in thousands) : Nonaccrual Loans September 30, 2017 December 31, 2016 Construction, land & land development $ 142 $ 5,057 Other commercial real estate 3,800 56 Total commercial real estate 3,942 5,113 Residential real estate 1,107 1,146 Owner-occupied real estate 3,423 1,874 Commercial, financial & agricultural 2,542 1,426 Consumer 83 56 Total nonaccrual loans $ 11,097 $ 9,615 The following table presents an analysis of past due organic loans, by class of loans, at the dates indicated (dollars in thousands) : Organic Loans 30 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans Loans > 90 Days and Accruing September 30, 2017 Construction, land & land development $ 262 $ 45 $ 307 $ 460,061 $ 460,368 $ — Other commercial real estate — — — 915,727 915,727 — Total commercial real estate 262 45 307 1,375,788 1,376,095 — Residential real estate 286 136 422 174,836 175,258 — Owner-occupied real estate 424 593 1,017 260,767 261,784 — Commercial, financial & agricultural 543 437 980 362,571 363,551 — Leases — — — 66,765 66,765 — Consumer 66 22 88 61,112 61,200 — Total organic loans $ 1,581 $ 1,233 $ 2,814 $ 2,301,839 $ 2,304,653 $ — December 31, 2016 Construction, land & land development $ 49 $ 12 $ 61 $ 499,957 $ 500,018 $ — Other commercial real estate — — — 754,790 754,790 — Total commercial real estate 49 12 61 1,254,747 1,254,808 — Residential real estate 157 118 275 144,020 144,295 — Owner-occupied real estate 40 — 40 256,277 256,317 — Commercial, financial & agricultural 247 283 530 326,851 327,381 — Leases — — — 71,724 71,724 — Consumer 350 31 381 35,658 36,039 — Total organic loans $ 843 $ 444 $ 1,287 $ 2,089,277 $ 2,090,564 $ — The following table presents an analysis of past due purchased non-credit impaired loans, by class of loans, at the dates indicated (dollars in thousands) : Purchased Non-Credit Impaired Loans 30 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans Loans > 90 Days and Accruing September 30, 2017 Construction, land & land development $ 39 $ 5 $ 44 $ 30,626 $ 30,670 $ — Other commercial real estate 47 — 47 234,439 234,486 — Total commercial real estate 86 5 91 265,065 265,156 — Residential real estate 257 56 313 111,931 112,244 — Owner-occupied real estate 256 2,500 2,756 122,682 125,438 — Commercial, financial & agricultural 547 1,386 1,933 557,059 558,992 — Consumer 8 6 14 2,633 2,647 — Total purchased non-credit impaired loans $ 1,154 $ 3,953 $ 5,107 $ 1,059,370 $ 1,064,477 $ — December 31, 2016 Construction, land & land development $ 495 $ — $ 495 $ 50,713 $ 51,208 $ — Other commercial real estate 17 56 73 209,458 209,531 — Total commercial real estate 512 56 568 260,171 260,739 — Residential real estate 274 165 439 144,157 144,596 — Owner-occupied real estate 387 1,687 2,074 113,492 115,566 — Commercial, financial & agricultural 144 552 696 35,510 36,206 — Consumer 38 2 40 6,215 6,255 — Total purchased non-credit impaired loans $ 1,355 $ 2,462 $ 3,817 $ 559,545 $ 563,362 $ — The following table presents an analysis of past due purchased credit impaired loans, by class of loans, at the dates indicated (dollars in thousands) : Purchased Credit Impaired Loans 30 - 89 Days Past Due 90 Days or Greater Past Due Total Past Due Current Total Loans September 30, 2017 Construction, land & land development $ 10 $ 1,872 $ 1,882 $ 15,036 $ 16,918 Other commercial real estate 534 3,336 3,870 99,064 102,934 Total commercial real estate 544 5,208 5,752 114,100 119,852 Residential real estate 1,678 2,430 4,108 38,082 42,190 Owner-occupied real estate — 6,162 6,162 20,048 26,210 Commercial, financial & agricultural 243 261 504 14,635 15,139 Consumer 15 — 15 254 269 Total purchased credit impaired loans $ 2,480 $ 14,061 $ 16,541 $ 187,119 $ 203,660 December 31, 2016 Construction, land & land development $ 722 $ 1,853 $ 2,575 $ 13,962 $ 16,537 Other commercial real estate 346 3,148 3,494 57,248 60,742 Total commercial real estate 1,068 5,001 6,069 71,210 77,279 Residential real estate 1,210 2,787 3,997 50,510 54,507 Owner-occupied real estate 661 3,507 4,168 19,812 23,980 Commercial, financial & agricultural 29 61 90 4,443 4,533 Consumer — 5 5 342 347 Total purchased credit impaired loans $ 2,968 $ 11,361 $ 14,329 $ 146,317 $ 160,646 For each period indicated, a portion of the Company's purchased credit impaired loans were past due, including many that were 90 days or more past due; however, such delinquencies were included in the Company's performance expectations in determining the fair values of purchased credit impaired loans at each acquisition and at subsequent valuation dates. All purchased credit impaired loan cash flows and the timing of such cash flows continue to be estimable and probable of collection and thus accretion income continues to be recognized on these assets. As such, the referenced purchased credit impaired loans are not considered nonperforming assets. Asset Quality Grades: The Company assigns loans into risk categories based on relevant information about the ability of borrowers to pay their debts, such as current financial information, historical payment experience, credit documentation, public information and current economic trends, among other factors. A loan's risk grade is assigned at inception based upon the strength of the repayment sources and reassessed periodically throughout the year. Loans over certain dollar thresholds identified as having weaknesses are subject to more frequent review. In addition, the Company's internal loan review department provides an ongoing, comprehensive and independent assessment of credit risk within the Company. Loans are graded on a scale of 1 to 8. Pass grades are from 1 to 4. Descriptions of the general characteristics of grades 5 and above are as follows: Watch (Grade 5) —Loans graded Watch are pass credits that have not met performance expectations or that have higher inherent risk characteristics warranting continued supervision and attention. OAEM (Grade 6) —Loans graded OAEM (other assets especially mentioned) have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Company's credit position at some future date. OAEM loans are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification. Substandard (Grade 7) —Loans classified as substandard are inadequately protected by the current sound worth and payment 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 institution will sustain some loss if the deficiencies are not corrected. Doubtful (Grade 8) —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 table presents the risk grades of the organic loan portfolio, by class of loans, at the dates indicated (dollars in thousands) : Organic Loans Pass Watch OAEM Substandard Doubtful Total September 30, 2017 Construction, land & land development $ 433,737 $ 24,628 $ 1,866 $ 137 $ — $ 460,368 Other commercial real estate 885,428 24,134 2,823 3,342 — 915,727 Total commercial real estate 1,319,165 48,762 4,689 3,479 — 1,376,095 Residential real estate 169,972 3,348 615 1,323 — 175,258 Owner-occupied real estate 237,134 22,637 1,083 930 — 261,784 Commercial, financial & agricultural 354,520 8,193 124 714 — 363,551 Leases 61,096 5,669 — — — 66,765 Consumer 60,953 102 66 79 — 61,200 Total organic loans $ 2,202,840 $ 88,711 $ 6,577 $ 6,525 $ — $ 2,304,653 December 31, 2016 Construction, land & land development $ 470,686 $ 24,178 $ 97 $ 5,057 $ — $ 500,018 Other commercial real estate 718,969 35,821 — — — 754,790 Total commercial real estate 1,189,655 59,999 97 5,057 — 1,254,808 Residential real estate 139,393 2,484 460 1,958 — 144,295 Owner-occupied real estate 237,753 14,967 3,577 20 — 256,317 Commercial, financial & agricultural 325,161 920 624 676 — 327,381 Leases 60,849 10,875 — — — 71,724 Consumer 35,844 47 2 145 1 36,039 Total organic loans $ 1,988,655 $ 89,292 $ 4,760 $ 7,856 $ 1 $ 2,090,564 The following table presents the risk grades of the purchased non-credit impaired loan portfolio, by class of loans, at the dates indicated (dollars in thousands) : Purchased Non-Credit Impaired Loans Pass Watch OAEM Substandard Doubtful Total September 30, 2017 Construction, land & land development $ 30,205 $ 419 $ — $ 46 $ — $ 30,670 Other commercial real estate 229,919 2,199 1,849 519 — 234,486 Total commercial real estate 260,124 2,618 1,849 565 — 265,156 Residential real estate 107,613 2,446 569 1,616 — 112,244 Owner-occupied real estate 117,516 3,443 1,285 3,194 — 125,438 Commercial, financial & agricultural 473,093 74,032 6,640 5,227 — 558,992 Consumer 2,636 2 — 9 — 2,647 Total purchased non-credit impaired loans $ 960,982 $ 82,541 $ 10,343 $ 10,611 $ — $ 1,064,477 December 31, 2016 Construction, land & land development $ 51,208 $ — $ — $ — $ — $ 51,208 Other commercial real estate 206,515 803 2,157 56 — 209,531 Total commercial real estate 257,723 803 2,157 56 — 260,739 Residential real estate 142,079 1,883 314 320 — 144,596 Owner-occupied real estate 107,096 6,310 — 2,160 — 115,566 Commercial, financial & agricultural 34,747 310 21 1,128 — 36,206 Consumer 6,247 5 — 3 — 6,255 Total purchased non-credit impaired loans $ 547,892 $ 9,311 $ 2,492 $ 3,667 $ — $ 563,362 Classifications on purchased credit impaired loans are based upon the borrower's ability to pay the current unpaid principal balance without regard to the net carrying value of the loan on the Company's balance sheet. Because the values shown in the table below are based on each loan's estimated cash flows, any expected losses should be covered by a combination of the specific reserves established in the allowance for loan and lease losses on purchased credit impaired loans plus the discounts to the unpaid principal balances reflected in the recorded investment of each loan. The following table presents the risk grades of the purchased credit impaired loan portfolio, by class of loans (dollars in thousands) : Purchased Credit Impaired Loans Pass Watch OAEM Substandard Doubtful Total September 30, 2017 Construction, land & land development $ 10,114 $ 863 $ 941 $ 5,000 $ — $ 16,918 Other commercial real estate 78,310 12,435 2,465 9,724 — 102,934 Total commercial real estate 88,424 13,298 3,406 14,724 — 119,852 Residential real estate 22,728 6,523 1,624 11,182 133 42,190 Owner-occupied real estate 7,347 4,940 816 13,104 3 26,210 Commercial, financial & agricultural 2,194 253 9,432 3,242 18 15,139 Consumer 57 30 154 28 — 269 Total purchased credit impaired loans $ 120,750 $ 25,044 $ 15,432 $ 42,280 $ 154 $ 203,660 December 31, 2016 Construction, land & land development $ 7,798 $ 1,150 $ 1,416 $ 6,173 $ — $ 16,537 Other commercial real estate 33,423 13,103 2,770 11,446 — 60,742 Total commercial real estate 41,221 14,253 4,186 17,619 — 77,279 Residential real estate 28,628 10,371 2,840 12,396 272 54,507 Owner-occupied real estate 7,736 4,884 794 10,566 — 23,980 Commercial, financial & agricultural 3,381 310 273 569 — 4,533 Consumer 53 100 173 21 — 347 Total purchased credit impaired loans $ 81,019 $ 29,918 $ 8,266 $ 41,171 $ 272 $ 160,646 Allowance Estimation During the first quarter of 2017, the Company implemented an automated solution broadly deployed throughout the industry for its estimation of the allowance for loan and lease losses on its organic and purchased non-credit impaired loans. No change was made to the allowance estimation for purchased credit impaired loans. No material changes were made to the methodology used. However, the new model does allow for further granularity within our loan pools. The Company validated the new model against its existing model for three quarters prior to implementation. Troubled Debt Restructurings (TDRs) There were no troubled debt restructurings (TDRs) at September 30, 2017 . At December 31, 2016 , TDRs totaled $5.0 million with $148,000 in related allowance. At December 31, 2016 , there was no commitment to extend credit to a borrower with an existing troubled debt restructuring. Purchased credit impaired loans modified post-acquisition are not removed from their accounting pools and accounted for as TDRs, even if those loans would otherwise be deemed TDRs. The following table provides information on loans that were modified as TDRs during the periods presented (dollars in thousands) : September 30, 2017 September 30, 2016 TDR Additions (1) Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Contracts Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Nine Months Ended Construction, land & land development — $ — $ — 1 $ 4,168 $ 4,168 Other commercial real estate — — — — — — Total commercial real estate — — — 1 4,168 4,168 Commercial & industrial — — — — — — Owner-occupied real estate — — — — — — Residential real estate — — — — — — Consumer & Other — — — — — — Total modifications — $ — $ — 1 $ 4,168 $ 4,168 (1) The pre-modification and post-modification recorded investment amount represents the recorded investment on the date of the loan modification. Since the modifications on this loan were an interest rate concession and payment term extension, not principal reductions, the pre-modification and post-modification recorded investment amount is the same. During the nine months ended September 30, 2017 and 2016 , there were no TDRs that subsequently defaulted within twelve months of their modification dates. |