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 June 30 2018 2017 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 $ 24,882 $ 2,249 $ 4,186 $ 31,317 $ 21,885 $ 491 $ 4,600 $ 26,976 Charge-offs (171 ) (285 ) (35 ) (491 ) (536 ) (197 ) (214 ) (947 ) Recoveries 70 46 — 116 113 1 — 114 Net (charge-offs) recoveries (101 ) (239 ) (35 ) (375 ) (423 ) (196 ) (214 ) (833 ) Provision for loan and lease losses 1,585 971 (163 ) 2,393 1,098 372 375 1,845 Balance, end of period $ 26,366 $ 2,981 $ 3,988 $ 33,335 $ 22,560 $ 667 $ 4,761 $ 27,988 Six Months Ended June 30 2018 2017 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 $ 24,039 $ 995 $ 3,716 $ 28,750 $ 21,086 $ 439 $ 5,073 $ 26,598 Charge-offs (835 ) (325 ) (123 ) (1,283 ) (1,076 ) (245 ) (328 ) (1,649 ) Recoveries 203 64 — 267 190 2 — 192 Net (charge-offs) recoveries (632 ) (261 ) (123 ) (1,016 ) (886 ) (243 ) (328 ) (1,457 ) Provision for loan and lease losses 2,959 2,247 395 5,601 2,360 471 16 2,847 Balance, end of period $ 26,366 $ 2,981 $ 3,988 $ 33,335 $ 22,560 $ 667 $ 4,761 $ 27,988 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 June 30, 2018 Beginning balance $ 11,932 $ 2,894 $ 2,281 $ 6,230 $ 494 $ 1,051 $ 24,882 Charge-offs (9 ) (64 ) — (46 ) (17 ) (35 ) (171 ) Recoveries 20 7 — 25 4 14 70 Provision 211 (425 ) 673 1,229 (70 ) (33 ) 1,585 Ending balance $ 12,154 $ 2,412 $ 2,954 $ 7,438 $ 411 $ 997 $ 26,366 Six Months Ended June 30, 2018 Beginning balance $ 13,037 $ 2,809 $ 2,075 $ 4,535 $ 629 $ 954 $ 24,039 Charge-offs (277 ) (212 ) — (159 ) (80 ) (107 ) (835 ) Recoveries 20 10 — 106 33 34 203 Provision (626 ) (195 ) 879 2,956 (171 ) 116 2,959 Ending balance $ 12,154 $ 2,412 $ 2,954 $ 7,438 $ 411 $ 997 $ 26,366 Three Months Ended June 30, 2017 Beginning balance $ 12,112 $ 1,666 $ 2,108 $ 4,514 $ 710 $ 775 $ 21,885 Charge-offs (187 ) (25 ) — (82 ) (135 ) (107 ) (536 ) Recoveries — 3 — 22 68 20 113 Provision 1,412 197 (72 ) (791 ) 182 170 1,098 Ending balance $ 13,337 $ 1,841 $ 2,036 $ 3,663 $ 825 $ 858 $ 22,560 Six Months Ended June 30, 2017 Beginning balance $ 11,767 $ 1,786 $ 2,239 $ 4,093 $ 655 $ 546 $ 21,086 Charge-offs (187 ) (48 ) — (142 ) (499 ) (200 ) (1,076 ) Recoveries — 6 — 51 109 24 190 Provision 1,757 97 (203 ) (339 ) 560 488 2,360 Ending balance $ 13,337 $ 1,841 $ 2,036 $ 3,663 $ 825 $ 858 $ 22,560 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 June 30, 2018 Commercial real estate $ — $ 12,154 $ 12,154 $ 3,334 $ 1,398,995 $ 1,402,329 Residential real estate — 2,412 2,412 1,350 221,536 222,886 Owner-occupied real estate — 2,954 2,954 1,456 268,597 270,053 Commercial, financial & agricultural — 7,438 7,438 5,039 661,533 666,572 Leases — 411 411 — 36,863 36,863 Consumer — 997 997 — 65,019 65,019 Total organic loans $ — $ 26,366 $ 26,366 $ 11,179 $ 2,652,543 $ 2,663,722 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 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 June 30, 2018 Beginning balance $ 336 $ 524 $ 316 $ 1,067 $ 6 $ 2,249 Charge-offs — (36 ) (249 ) — — (285 ) Recoveries 2 2 21 20 1 46 Provision (46 ) (156 ) 353 823 (3 ) 971 Ending balance $ 292 $ 334 $ 441 $ 1,910 $ 4 $ 2,981 Six Months Ended June 30, 2018 Beginning balance $ 230 $ 664 $ 88 $ 8 $ 5 $ 995 Charge-offs — (36 ) (249 ) (37 ) (3 ) (325 ) Recoveries 7 10 21 24 2 64 Provision 55 (304 ) 581 1,915 — 2,247 Ending balance $ 292 $ 334 $ 441 $ 1,910 $ 4 $ 2,981 Three Months Ended June 30, 2017 Beginning balance $ 239 $ 175 $ 76 $ — $ 1 $ 491 Charge-offs — — (80 ) (115 ) (2 ) (197 ) Recoveries — — — — 1 1 Provision (94 ) 167 156 141 2 372 Ending balance $ 145 $ 342 $ 152 $ 26 $ 2 $ 667 Six Months Ended June 30, 2017 Beginning balance $ 88 $ 72 $ 44 $ 235 $ — $ 439 Charge-offs — — (80 ) (160 ) (5 ) (245 ) Recoveries — — — — 2 2 Provision 57 270 188 (49 ) 5 471 Ending balance $ 145 $ 342 $ 152 $ 26 $ 2 $ 667 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 June 30, 2018 Commercial real estate $ — $ 292 $ 292 $ — $ 209,277 $ 209,277 Residential real estate — 334 334 15 72,802 72,817 Owner-occupied real estate 28 413 441 848 81,652 82,500 Commercial, financial & agricultural 782 1,128 1,910 55,166 371,826 426,992 Consumer — 4 4 — 1,503 1,503 Total purchased non-credit impaired loans $ 810 $ 2,171 $ 2,981 $ 56,029 $ 737,060 $ 793,089 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 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 June 30, 2018 Beginning balance $ 2,304 $ 830 $ 825 $ 217 $ 10 $ 4,186 Charge-offs (1 ) (28 ) — — (6 ) (35 ) Recoveries — — — — — — Provision (131 ) (16 ) (9 ) (3 ) (4 ) (163 ) Ending balance $ 2,172 $ 786 $ 816 $ 214 $ — $ 3,988 Six Months Ended June 30, 2018 Beginning balance $ 1,706 $ 1,242 $ 718 $ 42 $ 8 $ 3,716 Charge-offs (34 ) (73 ) (10 ) — (6 ) (123 ) Recoveries — — — — — — Provision 500 (383 ) 108 172 (2 ) 395 Ending balance $ 2,172 $ 786 $ 816 $ 214 $ — $ 3,988 Three Months Ended June 30, 2017 Beginning balance $ 2,073 $ 959 $ 1,531 $ 37 $ — $ 4,600 Charge-offs (160 ) (38 ) — (15 ) (1 ) (214 ) Recoveries — — — — — — Provision 218 47 80 15 15 375 Ending balance $ 2,131 $ 968 $ 1,611 $ 37 $ 14 $ 4,761 Six Months Ended June 30, 2017 Beginning balance $ 2,183 $ 1,196 $ 1,655 $ 38 $ 1 $ 5,073 Charge-offs (233 ) (42 ) (36 ) (16 ) (1 ) (328 ) Recoveries — — — — — — Provision 181 (186 ) (8 ) 15 14 16 Ending balance $ 2,131 $ 968 $ 1,611 $ 37 $ 14 $ 4,761 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 June 30, 2018 Commercial real estate $ 996 $ 1,176 $ 2,172 $ 74,876 $ 11,958 $ 86,834 Residential real estate 68 718 786 2,262 29,825 32,087 Owner-occupied real estate 695 121 816 7,646 10,373 18,019 Commercial, financial & agricultural 8 206 214 548 10,892 11,440 Consumer — — — — 82 82 Total purchased credit impaired loans $ 1,767 $ 2,221 $ 3,988 $ 85,332 $ 63,130 $ 148,462 December 31, 2017 Commercial real estate $ 1,052 $ 654 $ 1,706 $ 79,085 $ 21,208 $ 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 $ 93,915 $ 81,699 $ 175,614 Impaired loans, segregated by class of loans, are presented in the following table (dollars in thousands) : June 30, 2018 December 31, 2017 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 $ 75 $ 71 $ — $ 82 $ 79 $ — Other commercial real estate 3,291 3,289 — 4,617 3,822 — Total commercial real estate 3,366 3,360 — 4,699 3,901 — Residential real estate 2,491 2,340 — 453 456 — Owner-occupied real estate 1,640 1,600 — 4,172 4,015 — Commercial, financial & agricultural 61,145 58,974 — 2,739 1,882 — Consumer 39 33 — 51 40 — Subtotal 68,681 66,307 — 12,114 10,294 — With related allowance recorded: Construction, land & land development — — — 113 112 56 Other commercial real estate — — — — — — Total commercial real estate — — — 113 112 56 Residential real estate 789 741 371 1,452 1,399 699 Owner-occupied real estate 966 930 69 350 335 125 Commercial, financial & agricultural 2,949 2,858 1,465 872 821 318 Consumer 80 76 38 83 81 40 Subtotal 4,784 4,605 1,943 2,870 2,748 1,238 Total impaired loans $ 73,465 $ 70,912 $ 1,943 $ 14,984 $ 13,042 $ 1,238 (1) Includes loans with SBA guaranteed balances of $3.6 million and $5.7 million at June 30, 2018 and December 31, 2017 , 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) : June 30, 2018 June 30, 2017 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 $ 75 $ — $ 3,458 $ — Other commercial real estate 3,312 8 51 — Total commercial real estate 3,387 8 3,509 — Residential real estate 3,873 — 1,018 — Owner-occupied real estate 2,525 — 2,788 — Commercial, financial & agricultural 57,434 661 2,682 1 Consumer 117 — 72 — Total impaired loans $ 67,336 $ 669 $ 10,069 $ 1 Six Months Ended Construction, land & land development $ 132 $ — $ 4,297 $ — Other commercial real estate 3,359 16 53 — Total commercial real estate 3,491 16 4,350 — Residential real estate 4,099 — 1,031 — Owner-occupied real estate 4,099 — 2,824 — Commercial, financial & agricultural 41,624 1,027 2,736 1 Consumer 131 — 77 — Total impaired loans $ 53,444 $ 1,043 $ 11,018 $ 1 (1) The average recorded investment for troubled debt restructurings was $6.9 million and $7.0 million for the three and six months ended June 30, 2018 , respectively, and was $3.2 million and $4.1 million for the three and six months ended June 30, 2017 , respectively. (2) The interest income recognized on troubled debt restructurings was $67,000 and $131,000 for the three and six months ended June 30, 2018 , respectively, and was $0 for both the three and six months ended June 30, 2017 . The following table presents the recorded investment in nonaccrual loans by loan class at the dates indicated (dollars in thousands) : Nonaccrual Loans June 30, 2018 December 31, 2017 Construction, land & land development $ 71 $ 191 Other commercial real estate 2,799 3,257 Total commercial real estate 2,870 3,448 Residential real estate 3,081 1,855 Owner-occupied real estate 2,530 4,350 Commercial, financial & agricultural 22,114 2,703 Consumer 109 121 Total nonaccrual loans $ 30,704 $ 12,477 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 June 30, 2018 Construction, land & land development $ 138 $ 45 $ 183 $ 454,442 $ 454,625 $ — Other commercial real estate 12 — 12 947,692 947,704 — Total commercial real estate 150 45 195 1,402,134 1,402,329 — Residential real estate 1,114 269 1,383 221,503 222,886 — Owner-occupied real estate 1,591 242 1,833 268,220 270,053 — Commercial, financial & agricultural 193 471 664 665,908 666,572 — Leases — — — 36,863 36,863 — Consumer 117 9 126 64,893 65,019 — Total organic loans $ 3,165 $ 1,036 $ 4,201 $ 2,659,521 $ 2,663,722 $ — 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 $ — 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 June 30, 2018 Construction, land & land development $ — $ — $ — $ 14,282 $ 14,282 $ — Other commercial real estate — — — 194,995 194,995 — Total commercial real estate — — — 209,277 209,277 — Residential real estate 1,449 195 1,644 71,173 72,817 — Owner-occupied real estate 46 144 190 82,310 82,500 — Commercial, financial & agricultural 71 930 1,001 425,991 426,992 — Consumer 29 8 37 1,466 1,503 — Total purchased non-credit impaired loans $ 1,595 $ 1,277 $ 2,872 $ 790,217 $ 793,089 $ — 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 $ — 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 June 30, 2018 Construction, land & land development $ 8 $ 1,798 $ 1,806 $ 11,421 $ 13,227 Other commercial real estate 298 2,364 2,662 70,945 73,607 Total commercial real estate 306 4,162 4,468 82,366 86,834 Residential real estate 962 1,206 2,168 29,919 32,087 Owner-occupied real estate 187 598 785 17,234 18,019 Commercial, financial & agricultural — 1,414 1,414 10,026 11,440 Consumer — — — 82 82 Total purchased credit impaired loans $ 1,455 $ 7,380 $ 8,835 $ 139,627 $ 148,462 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 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 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 June 30, 2018 Construction, land & land development $ 418,587 $ 30,238 $ 5,755 $ 45 $ — $ 454,625 Other commercial real estate 904,916 37,816 2,161 2,811 — 947,704 Total commercial real estate 1,323,503 68,054 7,916 2,856 — 1,402,329 Residential real estate 215,547 4,180 311 2,848 — 222,886 Owner-occupied real estate 238,941 23,746 2,214 5,152 — 270,053 Commercial, financial & agricultural 617,246 42,647 262 6,417 — 666,572 Leases 34,481 2,382 — — — 36,863 Consumer 64,828 49 61 78 3 65,019 Total organic loans $ 2,494,546 $ 141,058 $ 10,764 $ 17,351 $ 3 $ 2,663,722 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 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 June 30, 2018 Construction, land & land development $ 14,210 $ 44 $ — $ 28 $ — $ 14,282 Other commercial real estate 155,344 35,540 3,584 527 — 194,995 Total commercial real estate 169,554 35,584 3,584 555 — 209,277 Residential real estate 69,339 1,308 294 1,802 74 72,817 Owner-occupied real estate 72,994 6,148 — 3,358 — 82,500 Commercial, financial & agricultural 321,831 49,628 15,760 39,773 — 426,992 Consumer 1,432 12 — 39 20 1,503 Total purchased non-credit impaired loans $ 635,150 $ 92,680 $ 19,638 $ 45,527 $ 94 $ 793,089 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 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 June 30, 2018 Construction, land & land development $ 6,466 $ 609 $ 915 $ 5,237 $ — $ 13,227 Other commercial real estate 46,059 15,756 1,273 10,519 — 73,607 Total commercial real estate 52,525 16,365 2,188 15,756 — 86,834 Residential real estate 17,187 4,522 1,274 9,036 68 32,087 Owner-occupied real estate 6,356 3,759 791 7,113 — 18,019 Commercial, financial & agricultural 513 121 — 10,806 — 11,440 Consumer 31 24 19 8 — 82 Total purchased credit impaired loans $ 76,612 $ 24,791 $ 4,272 $ 42,719 $ 68 $ 148,462 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 Troubled Debt Restructurings (TDRs) Total troubled debt restructurings (TDRs) were $6.9 million at June 30, 2018 , with $28,000 in related allowance. At December 31, 2017 , TDRs totaled $1.5 million with no related allowance. At June 30, 2018 , there was one commitment to extend credit to a borrower with an existing troubled debt restructuring totaling $599,000 . At December 31, 2017 , there were no commitments to extend credit to borrowers 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) : June 30, 2018 June 30, 2017 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 Six Months Ended Construction, land & land development — $ — $ — — $ — $ — Other commercial real estate 2 2,801 2,801 — — — Total commercial real estate 2 2,801 2,801 — — — Commercial & industrial — — — — — — Owner-occupied real estate — — — — — — Residential real estate 1 2,769 2,769 — — — Consumer & Other — — — — — — Total modifications 3 $ 5,570 $ 5,570 — $ — $ — (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 these loans were either an interest rate concession or payment term extension, not principal reductions, the pre-modification and post-modification recorded investment amount is the same. There were no loans modified as a TDR during the three months ended June 30, 2018 or 2017 . During the six months ended June 30, 2018 , there was one loan modified as a TDR which subsequently defaulted within twelve months of its modification date with a recorded investment of $848,000 . During the six months ended June 30, 2017 , there were no TDRs that subsequently defaulted within twelve months of their modification dates. |