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 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 $ 26,366 $ 2,981 $ 3,988 $ 33,335 $ 22,560 $ 667 $ 4,761 $ 27,988 Charge-offs (326 ) (451 ) (124 ) (901 ) (912 ) (152 ) (643 ) (1,707 ) Recoveries 87 59 — 146 106 40 — 146 Net (charge-offs) recoveries (239 ) (392 ) (124 ) (755 ) (806 ) (112 ) (643 ) (1,561 ) Provision for loan and lease losses 1,300 800 109 2,209 955 345 (885 ) 415 Balance, end of period $ 27,427 $ 3,389 $ 3,973 $ 34,789 $ 22,709 $ 900 $ 3,233 $ 26,842 Nine Months Ended September 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 (1,161 ) (776 ) (247 ) (2,184 ) (1,988 ) (397 ) (971 ) (3,356 ) Recoveries 290 123 — 413 296 42 — 338 Net (charge-offs) recoveries (871 ) (653 ) (247 ) (1,771 ) (1,692 ) (355 ) (971 ) (3,018 ) Provision for loan and lease losses 4,259 3,047 504 7,810 3,315 816 (869 ) 3,262 Balance, end of period $ 27,427 $ 3,389 $ 3,973 $ 34,789 $ 22,709 $ 900 $ 3,233 $ 26,842 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, 2018 Beginning balance $ 12,154 $ 2,412 $ 2,954 $ 7,438 $ 411 $ 997 $ 26,366 Charge-offs — (28 ) — (201 ) (39 ) (58 ) (326 ) Recoveries 1 14 — 50 4 18 87 Provision (668 ) 88 496 1,664 (31 ) (249 ) 1,300 Ending balance $ 11,487 $ 2,486 $ 3,450 $ 8,951 $ 345 $ 708 $ 27,427 Nine Months Ended September 30, 2018 Beginning balance $ 13,037 $ 2,809 $ 2,075 $ 4,535 $ 629 $ 954 $ 24,039 Charge-offs (277 ) (240 ) — (360 ) (119 ) (165 ) (1,161 ) Recoveries 21 24 — 156 37 52 290 Provision (1,294 ) (107 ) 1,375 4,620 (202 ) (133 ) 4,259 Ending balance $ 11,487 $ 2,486 $ 3,450 $ 8,951 $ 345 $ 708 $ 27,427 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 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, 2018 Commercial real estate $ — $ 11,487 $ 11,487 $ 2,799 $ 1,416,989 $ 1,419,788 Residential real estate — 2,486 2,486 1,333 236,959 238,292 Owner-occupied real estate 25 3,425 3,450 3,456 271,639 275,095 Commercial, financial & agricultural 108 8,843 8,951 5,917 752,980 758,897 Leases — 345 345 — 30,410 30,410 Consumer — 708 708 — 64,361 64,361 Total organic loans $ 133 $ 27,294 $ 27,427 $ 13,505 $ 2,773,338 $ 2,786,843 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 September 30, 2018 Beginning balance $ 292 $ 334 $ 441 $ 1,910 $ 4 $ 2,981 Charge-offs (406 ) (44 ) — — (1 ) (451 ) Recoveries 23 8 9 18 1 59 Provision 439 (42 ) 30 375 (2 ) 800 Ending balance $ 348 $ 256 $ 480 $ 2,303 $ 2 $ 3,389 Nine Months Ended September 30, 2018 Beginning balance $ 230 $ 664 $ 88 $ 8 $ 5 $ 995 Charge-offs (406 ) (80 ) (249 ) (37 ) (4 ) (776 ) Recoveries 30 18 30 42 3 123 Provision 494 (346 ) 611 2,290 (2 ) 3,047 Ending balance $ 348 $ 256 $ 480 $ 2,303 $ 2 $ 3,389 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 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, 2018 Commercial real estate $ — $ 348 $ 348 $ — $ 199,840 $ 199,840 Residential real estate — 256 256 181 60,960 61,141 Owner-occupied real estate 24 456 480 823 72,643 73,466 Commercial, financial & agricultural 629 1,674 2,303 55,668 334,429 390,097 Consumer — 2 2 — 1,197 1,197 Total purchased non-credit impaired loans $ 653 $ 2,736 $ 3,389 $ 56,672 $ 669,069 $ 725,741 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 September 30, 2018 Beginning balance $ 2,172 $ 786 $ 816 $ 214 $ — $ 3,988 Charge-offs — (1 ) (123 ) — — (124 ) Recoveries — — — — — — Provision (379 ) 380 112 (4 ) — 109 Ending balance $ 1,793 $ 1,165 $ 805 $ 210 $ — $ 3,973 Nine Months Ended September 30, 2018 Beginning balance $ 1,706 $ 1,242 $ 718 $ 42 $ 8 $ 3,716 Charge-offs (34 ) (74 ) (133 ) — (6 ) (247 ) Recoveries — — — — — — Provision 121 (3 ) 220 168 (2 ) 504 Ending balance $ 1,793 $ 1,165 $ 805 $ 210 $ — $ 3,973 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 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, 2018 Commercial real estate $ 996 $ 797 $ 1,793 $ 55,816 $ 11,375 $ 67,191 Residential real estate 68 1,097 1,165 2,257 27,780 30,037 Owner-occupied real estate 695 110 805 7,539 9,606 17,145 Commercial, financial & agricultural 5 205 210 52 10,248 10,300 Consumer — — — — 77 77 Total purchased credit impaired loans $ 1,764 $ 2,209 $ 3,973 $ 65,664 $ 59,086 $ 124,750 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) : September 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 $ 26 $ 23 $ — $ 82 $ 79 $ — Other commercial real estate 2,801 2,799 — 4,617 3,822 — Total commercial real estate 2,827 2,822 — 4,699 3,901 — Residential real estate 2,579 2,345 — 453 456 — Owner-occupied real estate 1,620 1,554 — 4,172 4,015 — Commercial, financial & agricultural 44,851 42,844 — 2,739 1,882 — Consumer 30 22 — 51 40 — Subtotal 51,907 49,587 — 12,114 10,294 — With related allowance recorded: Construction, land & land development 178 177 88 113 112 56 Other commercial real estate — — — — — — Total commercial real estate 178 177 88 113 112 56 Residential real estate 694 619 310 1,452 1,399 699 Owner-occupied real estate 3,544 3,411 331 350 335 125 Commercial, financial & agricultural 20,376 20,160 1,303 872 821 318 Consumer 261 73 36 83 81 40 Subtotal 25,053 24,440 2,068 2,870 2,748 1,238 Total impaired loans $ 76,960 $ 74,027 $ 2,068 $ 14,984 $ 13,042 $ 1,238 (1) Includes loans with SBA guaranteed balances of $5.0 million and $5.7 million at September 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) : September 30, 2018 September 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 $ 202 $ — $ 146 $ — Other commercial real estate 2,800 — 4,347 — Total commercial real estate 3,002 — 4,493 — Residential real estate 3,274 — 1,120 — Owner-occupied real estate 5,021 — 3,446 — Commercial, financial & agricultural 62,768 548 2,653 — Consumer 100 — 87 — Total impaired loans $ 74,165 $ 548 $ 11,799 $ — Nine Months Ended Construction, land & land development $ 156 $ — $ 2,862 $ — Other commercial real estate 3,172 16 4,558 — Total commercial real estate 3,328 16 7,420 — Residential real estate 3,824 — 1,154 — Owner-occupied real estate 4,406 — 3,500 — Commercial, financial & agricultural 48,672 1,575 2,761 1 Consumer 121 — 94 — Total impaired loans $ 60,351 $ 1,591 $ 14,929 $ 1 (1) The average recorded investment for troubled debt restructurings was $6.4 million and $6.8 million for the three and nine months ended September 30, 2018 , respectively, and was $0 and $2.7 million for the three and nine months ended September 30, 2017 , respectively. (2) The interest income recognized on troubled debt restructurings was $60,000 and $191,000 for the three and nine months ended September 30, 2018 , respectively, and was $0 for both the three and nine months ended September 30, 2017 . The following table presents the recorded investment in nonaccrual loans by loan class at the dates indicated (dollars in thousands) : Nonaccrual Loans September 30, 2018 December 31, 2017 Construction, land & land development $ 200 $ 191 Other commercial real estate 2,799 3,257 Total commercial real estate 2,999 3,448 Residential real estate 2,964 1,855 Owner-occupied real estate 4,965 4,350 Commercial, financial & agricultural 21,832 2,703 Consumer 95 121 Total nonaccrual loans $ 32,855 $ 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 September 30, 2018 Construction, land & land development $ 186 $ 130 $ 316 $ 480,214 $ 480,530 $ — Other commercial real estate — — — 939,258 939,258 — Total commercial real estate 186 130 316 1,419,472 1,419,788 — Residential real estate 960 50 1,010 237,282 238,292 — Owner-occupied real estate 4,761 967 5,728 269,367 275,095 — Commercial, financial & agricultural 1,749 535 2,284 756,613 758,897 — Leases — — — 30,410 30,410 — Consumer 58 22 80 64,281 64,361 — Total organic loans $ 7,714 $ 1,704 $ 9,418 $ 2,777,425 $ 2,786,843 $ — 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 September 30, 2018 Construction, land & land development $ — $ — $ — $ 13,284 $ 13,284 $ — Other commercial real estate — — — 186,556 186,556 — Total commercial real estate — — — 199,840 199,840 — Residential real estate 326 45 371 60,770 61,141 — Owner-occupied real estate 156 — 156 73,310 73,466 — Commercial, financial & agricultural 18,848 391 19,239 370,858 390,097 — Consumer — 18 18 1,179 1,197 — Total purchased non-credit impaired loans $ 19,330 $ 454 $ 19,784 $ 705,957 $ 725,741 $ — 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 September 30, 2018 Construction, land & land development $ 11 $ 1,765 $ 1,776 $ 4,505 $ 6,281 Other commercial real estate 36 2,377 2,413 58,497 60,910 Total commercial real estate 47 4,142 4,189 63,002 67,191 Residential real estate 975 1,186 2,161 27,876 30,037 Owner-occupied real estate 416 140 556 16,589 17,145 Commercial, financial & agricultural — 1,427 1,427 8,873 10,300 Consumer — — — 77 77 Total purchased credit impaired loans $ 1,438 $ 6,895 $ 8,333 $ 116,417 $ 124,750 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 September 30, 2018 Construction, land & land development $ 453,014 $ 20,906 $ 6,350 $ 130 $ 130 $ 480,530 Other commercial real estate 902,471 33,420 556 2,811 — 939,258 Total commercial real estate 1,355,485 54,326 6,906 2,941 130 1,419,788 Residential real estate 230,722 4,254 401 2,915 — 238,292 Owner-occupied real estate 236,779 30,673 667 6,976 — 275,095 Commercial, financial & agricultural 673,850 76,901 1,096 7,050 — 758,897 Leases 28,749 1,661 — — — 30,410 Consumer 64,163 125 — 73 — 64,361 Total organic loans $ 2,589,748 $ 167,940 $ 9,070 $ 19,955 $ 130 $ 2,786,843 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 September 30, 2018 Construction, land & land development $ 13,217 $ 43 $ — $ 24 $ — $ 13,284 Other commercial real estate 145,202 39,078 1,752 524 — 186,556 Total commercial real estate 158,419 39,121 1,752 548 — 199,840 Residential real estate 58,406 1,297 153 1,212 73 61,141 Owner-occupied real estate 65,546 4,627 — 3,293 — 73,466 Commercial, financial & agricultural 258,546 63,524 29,475 38,552 — 390,097 Consumer 1,144 6 — 29 18 1,197 Total purchased non-credit impaired loans $ 542,061 $ 108,575 $ 31,380 $ 43,634 $ 91 $ 725,741 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 September 30, 2018 Construction, land & land development $ 869 $ 581 $ 908 $ 3,923 $ — $ 6,281 Other commercial real estate 33,835 15,631 1,261 10,183 — 60,910 Total commercial real estate 34,704 16,212 2,169 14,106 — 67,191 Residential real estate 15,133 5,747 553 8,538 66 30,037 Owner-occupied real estate 7,045 2,897 1,716 5,487 — 17,145 Commercial, financial & agricultural 6 110 5,030 5,154 — 10,300 Consumer 29 24 18 6 — 77 Total purchased credit impaired loans $ 56,917 $ 24,990 $ 9,486 $ 33,291 $ 66 $ 124,750 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 $6.4 million at September 30, 2018 , with $24,000 in related allowance. At December 31, 2017 , TDRs totaled $1.5 million with no related allowance. At September 30, 2018 , there was one commitment to extend credit to a borrower with an existing troubled debt restructuring totaling $7,000 . 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) : September 30, 2018 September 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 Nine 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 September 30, 2018 or 2017 . During the nine months ended September 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 $823,000 . During the nine months ended September 30, 2017 , there were no TDRs that subsequently defaulted within twelve months of their modification dates. |