Allowance for Loan and Lease Losses (ALLL) | NOTE 5: ALLOWANCE FOR LOAN AND LEASE LOSSES (ALLL) The following table summarizes the Company’s loan loss experience on the total loan portfolio as well as the breakdown between the organic, purchased non-credit impaired, and purchased credit impaired portfolios for the periods presented (dollars in thousands) : December 31 2017 2016 2015 Total Loans Balance, beginning of period $ 26,598 $ 29,075 $ 28,638 Charge-offs (4,418 ) (6,174 ) (12,494 ) Recoveries 460 3,460 8,400 Net charge-offs (3,958 ) (2,714 ) (4,094 ) Provision for loan and lease losses before amount attributable to FDIC loss share agreements 6,110 237 4,531 Amount attributable to FDIC loss share agreements — — (1,045 ) Total provision for loan and lease losses charged to operations 6,110 237 3,486 Provision for loan and lease losses recorded through the FDIC loss share receivable — — 1,045 Balance, end of period $ 28,750 $ 26,598 $ 29,075 Organic Loans Balance, beginning of period $ 21,086 $ 21,224 $ 18,392 Charge-offs (2,462 ) (3,411 ) (313 ) Recoveries 373 223 288 Net charge-offs (2,089 ) (3,188 ) (25 ) Provision for loan and lease losses 5,042 3,050 2,857 Balance, end of period $ 24,039 $ 21,086 $ 21,224 Purchased Non-Credit Impaired Loans Balance, beginning of period $ 439 $ 53 $ — Charge-offs (670 ) (223 ) (48 ) Recoveries 87 63 7 Net charge-offs (583 ) (160 ) (41 ) Provision for loan and lease losses 1,139 546 94 Balance, end of period $ 995 $ 439 $ 53 Purchased Credit Impaired Loans Balance, beginning of period $ 5,073 $ 7,798 $ 10,246 Charge-offs (1,286 ) (2,540 ) (12,133 ) Recoveries — 3,174 8,105 Net (charge-offs) recoveries (1,286 ) 634 (4,028 ) Provision for loan and lease losses before amount attributable to FDIC loss share agreements (71 ) (3,359 ) 1,580 Amount attributable to FDIC loss share agreements — — (1,045 ) Total provision for loan and lease losses charged to operations (71 ) (3,359 ) 535 Provision for loan and lease losses recorded through the FDIC loss share receivable — — 1,045 Balance, end of period $ 3,716 $ 5,073 $ 7,798 Segment and Class Risk Descriptions Each of our portfolio segments and the classes within those segments are subject to risks that could have an adverse impact on the credit quality of our loan portfolio. Management has identified the most significant risks associated with segments and classes as described below. While the list is not exhaustive, it provides a description of the risks that management has determined are the most significant. Real Estate Loans Loans secured by real estate are the principal component of our loan portfolio. Real estate loans are subject to the same general risks as other loans and are particularly sensitive to fluctuations in the value of real estate. Increases in interest rates, decline in occupancy rates, fluctuations in the value of real estate, as well as other factors arising after a loan has been made, could negatively affect a borrower's cash flow, creditworthiness and ability to repay the loan. When we make new real estate loans, we typically obtain a security interest in the real estate, as well as other available credit enhancements, to increase the likelihood of the ultimate repayment of the loan. To control concentration risk, we monitor collateral type concentrations within this portfolio. In addition to these common risks for the majority of our real estate loans, additional risks are inherent in certain of our classes of real estate loans which are addressed below: Commercial Real Estate Commercial real estate loans consist of commercial construction and land development loans and other commercial real estate loans. Commercial construction and land development loans are highly dependent upon the supply and demand for commercial real estate in the markets we serve as well as the demand for newly constructed residential homes and lots that our customers are developing. Construction and development loans generally carry a higher degree of risk than long-term financing of existing properties because repayment depends upon the ultimate completion of the project and usually on the subsequent lease-up and/or sale of the property. Additionally, deterioration in demand could result in significant decreases in the underlying collateral values and make repayment of the outstanding loans more difficult for our customers. Other commercial real estate loans consist primarily of loans secured by other nonfarm nonresidential properties such as retail, office and hotel/motel and multifamily housing. These loans typically have terms of five years or less, although payments may be structured on a longer amortization basis. We evaluate each borrower on an individual basis and attempt to determine the business risks and credit profile of each borrower. The primary risk associated with loans secured with income-producing property is the inability of that property to produce adequate cash flow to service the debt. High unemployment, generally weak economic conditions and/or an oversupply in the market may result in our customer having difficulty achieving adequate occupancy rates. Residential Real Estate Residential real estate loans are typically to individuals and are secured by owner-occupied and investor-owned 1-4 family residential property. We generally originate and hold certain first mortgages and traditional second mortgages, adjustable rate mortgages and home equity lines of credit. We also originate and sell fixed and adjustable rate residential real estate loans in the secondary market. Significant and rapid declines in real estate values can result in residential mortgage loan borrowers having debt levels in excess of the current market value of the collateral. Owner-Occupied Real Estate Owner-occupied loans consist of loans secured by nonfarm nonresidential properties, such as office and industrial properties, churches, convenience stores and restaurants occupied by an affiliated tenant. Loan repayment is primarily dependent on the ability of the operating company to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. Adverse changes in the business's results, specifically declines in cash flows, could jeopardize the ability for the loan to be serviced in accordance with the contractual terms. Commercial, Financial & Agricultural Loans Commercial, financial and industrial loans include loans to individuals and businesses for commercial purposes in various lines of business, including the manufacturing, professional service, and crop production industries. This segment also includes loans to states and political subdivisions, as well as equipment finance agreements, asset-based loans and lender finance loans. Repayment is primarily dependent on the ability of the borrower to achieve business results consistent with those projected at loan origination resulting in cash flow sufficient to service the debt. To the extent that a borrower's business results are significantly unfavorable versus the original projections, the ability for the loan to be serviced on a basis consistent with the contractual terms may be at risk. While these loans may be partially secured by real estate, they are generally considered to have greater collateral risk than first or second mortgages on real estate because these loans may be unsecured or, if they are secured, the value of the non-real estate collateral may be difficult to assess and less marketable than real estate, and the control of the collateral is more at risk. Leases Leases include purchased commercial, business purpose and municipal leases. The stream of payments and a first security interest in the collateral is assigned to us. Our lease funding is based on a present value of the lease payments at a discounted interest rate, which is determined based on the credit quality of the lessee, the term of the lease compared to expected useful life, and the type of collateral. Types of collateral include, but are not limited to, medical equipment, rolling stock, franchise restaurant equipment and hardware/software. Servicing of purchased leases is primarily retained by the loan originator, as well as ownership of all residuals, if applicable. Lease financing is underwritten using similar underwriting standards as would be applied to a secured commercial loan requesting high loan-to-value financing. Risks that are involved with lease financing receivables are credit underwriting and borrower industry concentrations. Consumer Loans The consumer loan portfolio includes loans to individuals for personal, family and household purposes, including secured and unsecured installment loans and revolving lines of credit. Consumer loans not secured by real estate are generally considered to have greater risk than first or second mortgages on real estate because they may be unsecured, or, if they are secured, the value of the collateral may be difficult to assess and more likely to decrease in value, and is more difficult to control, than real estate. Consumer loans may be secured by cash value life insurance policies which presents a lower collateral risk than other non-real estate secured consumer loans. Activity in the allowance for loan and lease losses on organic loans is detailed as follows by portfolio segment for the periods presented (dollars in thousands) : Organic Loans Commercial Real Estate Residential Real Estate Owner- Occupied Real Estate Commercial, Financial & Agricultural Leases Consumer Total December 31, 2017 Beginning balance $ 11,767 $ 1,786 $ 2,239 $ 4,093 $ 655 $ 546 $ 21,086 Charge-offs (933 ) (61 ) — (380 ) (728 ) (360 ) (2,462 ) Recoveries — 14 — 133 182 44 373 Provision 2,203 1,070 (164 ) 689 520 724 5,042 Ending balance $ 13,037 $ 2,809 $ 2,075 $ 4,535 $ 629 $ 954 $ 24,039 December 31, 2016 Beginning balance $ 13,607 $ 2,053 $ 1,920 $ 2,509 $ 865 $ 270 $ 21,224 Charge-offs (2,122 ) (53 ) — (653 ) (486 ) (97 ) (3,411 ) Recoveries — 6 45 154 11 7 223 Provision 282 (220 ) 274 2,083 265 366 3,050 Ending balance $ 11,767 $ 1,786 $ 2,239 $ 4,093 $ 655 $ 546 $ 21,086 December 31, 2015 Beginning balance $ 13,134 $ 1,190 $ 1,928 $ 1,770 $ 262 $ 108 $ 18,392 Charge-offs (3 ) — — (289 ) — (21 ) (313 ) Recoveries 173 10 — 98 — 7 288 Provision 303 853 (8 ) 930 603 176 2,857 Ending balance $ 13,607 $ 2,053 $ 1,920 $ 2,509 $ 865 $ 270 $ 21,224 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 December 31, 2017 Commercial real estate $ — $ 13,037 $ 13,037 $ 3,822 $ 1,358,312 $ 1,362,134 Residential real estate — 2,809 2,809 49 196,176 196,225 Owner-occupied real estate 65 2,010 2,075 808 259,465 260,273 Commercial, financial & agricultural 34 4,501 4,535 280 429,925 430,205 Leases — 629 629 — 52,396 52,396 Consumer — 954 954 — 64,610 64,610 Total organic loans $ 99 $ 23,940 $ 24,039 $ 4,959 $ 2,360,884 $ 2,365,843 December 31, 2016 Commercial real estate $ 148 $ 11,619 $ 11,767 $ 4,950 $ 1,249,858 $ 1,254,808 Residential real estate — 1,786 1,786 — 144,295 144,295 Owner-occupied real estate — 2,239 2,239 — 256,317 256,317 Commercial, financial & agricultural 1 4,092 4,093 9 327,372 327,381 Leases — 655 655 — 71,724 71,724 Consumer — 546 546 — 36,039 36,039 Total organic loans $ 149 $ 20,937 $ 21,086 $ 4,959 $ 2,085,605 $ 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 presented (dollars in thousands) : Purchased Non-Credit Impaired Loans Commercial Real Estate Residential Real Estate Owner- Occupied Real Estate Commercial, Financial & Agricultural Consumer Total December 31, 2017 Beginning balance $ 88 $ 72 $ 44 $ 235 $ — $ 439 Charge-offs (50 ) (7 ) (80 ) (524 ) (9 ) (670 ) Recoveries 26 11 — 43 7 87 Provision 166 588 124 254 7 1,139 Ending balance $ 230 $ 664 $ 88 $ 8 $ 5 $ 995 December 31, 2016 Beginning balance $ — $ 53 $ — $ — $ — $ 53 Charge-offs — (83 ) — (137 ) (3 ) (223 ) Recoveries — 45 — — 18 63 Provision 88 57 44 372 (15 ) 546 Ending balance $ 88 $ 72 $ 44 $ 235 $ — $ 439 December 31, 2015 Beginning balance $ — $ — $ — $ — $ — $ — Charge-offs — (24 ) — — (24 ) (48 ) Recoveries — 1 — — 6 7 Provision — 76 — — 18 94 Ending balance $ — $ 53 $ — $ — $ — $ 53 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 date 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 December 31, 2017 Commercial real estate $ — $ 230 $ 230 $ — $ 244,568 $ 244,568 Residential real estate — 664 664 19 96,510 96,529 Owner-occupied real estate — 88 88 3,264 115,030 118,294 Commercial, financial & agricultural 8 — 8 1,491 527,693 529,184 Consumer — 5 5 — 2,161 2,161 Total purchased non-credit impaired loans $ 8 $ 987 $ 995 $ 4,774 $ 985,962 $ 990,736 December 31, 2016 Commercial real estate $ — $ 88 $ 88 $ — $ 260,739 $ 260,739 Residential real estate — 72 72 157 144,439 144,596 Owner-occupied real estate 44 — 44 1,686 113,880 115,566 Commercial, financial & agricultural — 235 235 568 35,638 36,206 Consumer — — — — 6,255 6,255 Total purchased non-credit impaired loans $ 44 $ 395 $ 439 $ 2,411 $ 560,951 $ 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 presented (dollars in thousands) : Purchased Credit Impaired Loans Commercial Real Estate Residential Real Estate Owner-Occupied Real Estate Commercial, Financial & Agricultural Consumer Total December 31, 2017 Beginning balance $ 2,183 $ 1,196 $ 1,655 $ 38 $ 1 $ 5,073 Charge-offs (446 ) (140 ) (457 ) (238 ) (5 ) (1,286 ) Recoveries — — — — — — Provision for loan and lease losses before amount attributable to FDIC loss share agreements (31 ) 186 (480 ) 242 12 (71 ) Amount attributable to FDIC loss share agreements — — — — — — Total provision for loan and lease losses charged to operations (31 ) 186 (480 ) 242 12 (71 ) Provision for loan and lease losses recorded through the FDIC loss share receivable — — — — — — Ending balance $ 1,706 $ 1,242 $ 718 $ 42 $ 8 $ 3,716 December 31, 2016 Beginning balance $ 3,388 $ 1,893 $ 2,449 $ 60 $ 8 $ 7,798 Charge-offs (936 ) (977 ) (298 ) (273 ) (56 ) (2,540 ) Recoveries 2,281 401 207 232 53 3,174 Provision for loan and lease losses before amount attributable to FDIC loss share agreements (2,550 ) (121 ) (703 ) 19 (4 ) (3,359 ) Amount attributable to FDIC loss share agreements — — — — — — Total provision for loan and lease losses charged to operations (2,550 ) (121 ) (703 ) 19 (4 ) (3,359 ) Provision for loan and lease losses recorded through the FDIC loss share receivable — — — — — — Ending balance $ 2,183 $ 1,196 $ 1,655 $ 38 $ 1 $ 5,073 December 31, 2015 Beginning balance $ 5,461 $ 2,298 $ 1,916 $ 567 $ 4 $ 10,246 Charge-offs (7,251 ) (1,441 ) (1,374 ) (1,929 ) (138 ) (12,133 ) Recoveries 5,326 382 1,120 1,080 197 8,105 Provision for loan and lease losses before amount attributable to FDIC loss share agreements (148 ) 654 787 342 (55 ) 1,580 Amount attributable to FDIC loss share agreements (313 ) (182 ) (402 ) (140 ) (8 ) (1,045 ) Total provision for loan and lease losses charged to operations (461 ) 472 385 202 (63 ) 535 Provision for loan and lease losses recorded through the FDIC loss share receivable 313 182 402 140 8 1,045 Ending balance $ 3,388 $ 1,893 $ 2,449 $ 60 $ 8 $ 7,798 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 December 31, 2017 Commercial real estate $ 1,052 $ 654 $ 1,706 $ 38,444 $ 61,849 $ 100,293 Residential real estate 128 1,114 1,242 3,029 37,303 40,332 Owner-occupied real estate 586 132 718 9,483 11,320 20,803 Commercial, financial & agricultural 32 10 42 2,318 11,733 14,051 Consumer — 8 8 — 135 135 Total purchased credit impaired loans $ 1,798 $ 1,918 $ 3,716 $ 53,274 $ 122,340 $ 175,614 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 For each period indicated, a significant 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. Impaired loans, segregated by class of loans, are presented in the following table (dollars in thousands) : December 31, 2017 December 31, 2016 Impaired Loans (1): Unpaid Principal Balance Recorded Investment Related Allowance Unpaid Principal Balance Recorded Investment Related Allowance With no related allowance recorded: Construction, land & land development $ 82 $ 79 $ — $ 4,565 $ 2,933 $ — Other commercial real estate 4,617 3,822 — 56 56 — Total commercial real estate 4,699 3,901 — 4,621 2,989 — Residential real estate 453 456 — 388 320 — Owner-occupied real estate 4,172 4,015 — 193 188 — Commercial, financial & agricultural 2,739 1,882 — 1,335 1,128 — Consumer 51 40 — 2 2 — Subtotal 12,114 10,294 — 6,539 4,627 — With related allowance recorded: Construction, land & land development 113 112 56 4,277 2,124 201 Other commercial real estate — — — — — — Total commercial real estate 113 112 56 4,277 2,124 201 Residential real estate 1,452 1,399 699 891 825 413 Owner-occupied real estate 350 335 125 1,706 1,687 44 Commercial, financial & agricultural 872 821 318 308 298 146 Consumer 83 81 40 55 54 27 Subtotal 2,870 2,748 1,238 7,237 4,988 831 Total impaired loans $ 14,984 $ 13,042 $ 1,238 $ 13,776 $ 9,615 $ 831 (1) Includes loans with SBA guaranteed balances of $5.7 million and $3.0 million at December 31, 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) : December 31, 2017 December 31, 2016 December 31, 2015 Impaired Loans: Average Recorded Investment (1) Interest Income Recognized (2) Average Recorded Investment (1) Interest Income Recognized (2) Average Recorded Investment (1) Interest Income Recognized (2) Construction, land & land development $ 3,526 $ — $ 5,824 $ — $ 3,354 $ 75 Other commercial real estate 2,076 8 165 — 1,106 56 Total commercial real estate 5,602 8 5,989 — 4,460 131 Residential real estate 1,218 — 1,641 — 818 18 Owner-occupied real estate 3,150 — 538 3 542 15 Commercial, financial & agricultural 2,565 1 1,670 24 733 20 Consumer 85 — 43 — 39 1 Total impaired loans $ 12,620 $ 9 $ 9,881 $ 27 $ 6,592 $ 185 (1) The average recorded investment for troubled debt restructurings was $2.8 million , $6.0 million and $3.5 million for the years ended December 31, 2017 , 2016 and 2015 , respectively. (2) The total interest income recognized on troubled debt restructurings was $8,000 , $24,000 and $82,000 for the years ended December 31, 2017 , 2016 , 2015 , respectively. The following table presents the recorded investment in nonaccrual loans by loan class at the dates indicated (dollars in thousands) : December 31 Nonaccrual Loans 2017 2016 Construction, land & land development $ 191 $ 5,057 Other commercial real estate 3,257 56 Total commercial real estate 3,448 5,113 Residential real estate 1,855 1,146 Owner-occupied real estate 4,350 1,874 Commercial, financial & agricultural 2,703 1,426 Consumer 121 56 Total nonaccrual loans $ 12,477 $ 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 December 31, 2017 Construction, land & land development $ 487 $ 45 $ 532 $ 412,008 $ 412,540 $ — Other commercial real estate — — — 949,594 949,594 — Total commercial real estate 487 45 532 1,361,602 1,362,134 — Residential real estate 1,868 92 1,960 194,265 196,225 — Owner-occupied real estate 474 713 1,187 259,086 260,273 — Commercial, financial & agricultural 865 122 987 429,218 430,205 — Leases — — — 52,396 52,396 — Consumer 67 28 95 64,515 64,610 — Total organic loans $ 3,761 $ 1,000 $ 4,761 $ 2,361,082 $ 2,365,843 $ — 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 December 31, 2017 Construction, land & land development $ 35 $ — $ 35 $ 25,873 $ 25,908 $ — Other commercial real estate — 45 45 218,615 218,660 — Total commercial real estate 35 45 80 244,488 244,568 — Residential real estate 537 126 663 95,866 96,529 — Owner-occupied real estate 283 1,590 1,873 116,421 118,294 — Commercial, financial & agricultural 640 628 1,268 527,916 529,184 — Consumer 28 13 41 2,120 2,161 — Total purchased non-credit impaired loans $ 1,523 $ 2,402 $ 3,925 $ 986,811 $ 990,736 $ — 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 & industrial 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 December 31, 2017 Construction, land & land development $ 1 $ 1,881 $ 1,882 $ 11,663 $ 13,545 Other commercial real estate 363 3,303 3,666 83,082 86,748 Total commercial real estate 364 5,184 5,548 94,745 100,293 Residential real estate 1,519 1,876 3,395 36,937 40,332 Owner-occupied real estate 85 786 871 19,932 20,803 Commercial, financial & agricultural 201 224 425 13,626 14,051 Consumer — 15 15 120 135 Total purchased credit impaired loans $ 2,169 $ 8,085 $ 10,254 $ 165,360 $ 175,614 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 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 9. 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. Loss (Grade 9) —Loans classified as loss are considered uncollectible and have little value to the Company and their continuance as an active relationship is not warranted. 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 December 31, 2017 Construction, land & land development $ 371,358 $ 38,939 $ 2,086 $ 157 $ — $ 412,540 Other commercial real estate 920,168 22,229 3,365 3,832 — 949,594 Total commercial real estate 1,291,526 61,168 5,451 3,989 — 1,362,134 Residential real estate 188,918 3,668 1,488 2,151 — 196,225 Owner-occupied real estate 240,987 16,891 1,067 1,328 — 260,273 Commercial, financial & agricultural 421,114 7,870 123 1,098 — 430,205 Leases 47,908 4,488 — — — 52,396 Consumer 64,361 58 81 110 — 64,610 Total organic loans $ 2,254,814 $ 94,143 $ 8,210 $ 8,676 $ — $ 2,365,843 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 December 31, 2017 Construction, land & land development $ 25,486 $ 385 $ — $ 37 $ — $ 25,908 Other commercial real estate 214,916 1,341 1,825 578 — 218,660 Total commercial real estate 240,402 1,726 1,825 615 — 244,568 Residential real estate 92,119 2,216 791 1,369 34 96,529 Owner-occupied real estate 110,034 3,227 1,280 3,753 — 118,294 Commercial, financial & agricultural 452,822 59,306 5,223 11,833 — 529,184 Consumer 2,091 3 — 37 30 2,161 Total purchased non-credit impaired loans $ 897,468 $ 66,478 $ 9,119 $ 17,607 $ 64 $ 990,736 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, at the dates indicated (dollars in thousands) : Purchased Credit Impaired Loans Pass Watch OAEM Substandard Doubtful Total December 31, 2017 Construction, land & land development $ 6,677 $ 809 $ 973 $ 5,086 $ — $ 13,545 Other commercial real estate 63,210 11,998 2,361 9,179 — 86,748 Total commercial real estate 69,887 12,807 3,334 14,265 — 100,293 Residential real estate 21,706 6,419 1,590 10,504 113 40,332 Owner-occupied real estate 7,181 4,896 818 7,908 — 20,803 Commercial, financial & agricultural 2,094 211 323 11,423 — 14,051 Consumer 60 28 21 26 — 135 Total purchased credit impaired loans $ 100,928 $ 24,361 $ 6,086 $ 44,126 $ 113 $ 175,614 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 Troubled Debt Restructurings (TDRs) Total troubled debt restructurings were $1.5 million and $5.0 million at December 31, 2017 and 2016 , respectively. There was no related allowance for loan and lease losses at December 31, 2017 and $148,000 at December 31, 2016 . At December 31, 2017 and 2016 , there were no commitments 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 troubled debt restructured loans that were modified during the periods presented (dollars in thousands) : December 31, 2017 December 31, 2016 December 31, 2015 TDR Additions (1) Number of Contracts Pre-Modification Recorded Investment Post-Modification Recorded Investment Number o |