Loans | Loans The composition of the loan portfolio, by class of loan, as of June 30, 2019 and December 31, 2018 was as follows: June 30, 2019 December 31, 2018 (In thousands) Loan Balance Accrued Interest Receivable Recorded Investment Loan Balance Accrued Interest Receivable Recorded Investment Commercial, financial and agricultural * $ 1,159,056 $ 5,396 $ 1,164,452 $ 1,072,786 $ 4,603 $ 1,077,389 Commercial real estate * 1,612,291 5,661 1,617,952 1,283,045 4,750 1,287,795 Construction real estate: Commercial 222,505 869 223,374 175,300 801 176,101 Mortgage 89,457 250 89,707 70,541 151 70,692 Installment 1,985 7 1,992 2,433 7 2,440 Residential real estate: Commercial 476,991 1,354 478,345 429,730 1,150 430,880 Mortgage 1,167,808 1,893 1,169,701 1,134,278 1,227 1,135,505 HELOC 239,017 1,324 240,341 215,283 1,159 216,442 Installment 13,387 36 13,423 14,327 36 14,363 Consumer 1,363,186 4,138 1,367,324 1,292,136 3,756 1,295,892 Leases 31,054 18 31,072 2,273 26 2,299 Total loans $ 6,376,737 $ 20,946 $ 6,397,683 $ 5,692,132 $ 17,666 $ 5,709,798 * Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class. Loans are shown net of deferred origination fees, costs and unearned income of $12.7 million at June 30, 2019 and $12.5 million at December 31, 2018 , which represented a net deferred income position at each date. At June 30, 2019 and December 31, 2018 , loans included purchase accounting adjustments of $15.2 million and $4.4 million , respectively, which represented a net deferred income position at each date. This fair market value adjustment is expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans. Overdrawn deposit accounts of $2.2 million and $2.3 million had been reclassified to loans at June 30, 2019 and December 31, 2018 , respectively, and are included in the commercial, financial and agricultural loan class above. Credit Quality The following tables present the recorded investment in nonaccrual loans, accruing troubled debt restructurings, and loans past due 90 days or more and still accruing by class of loan as of June 30, 2019 and December 31, 2018 : June 30, 2019 (In thousands) Nonaccrual Loans Accruing TDRs Loans Past Due 90 Days or More and Accruing Total Nonperforming Loans Commercial, financial and agricultural $ 17,670 $ 1,985 $ 25 $ 19,680 Commercial real estate 23,846 2,615 606 27,067 Construction real estate: Commercial 1,788 455 224 2,467 Mortgage 86 79 — 165 Installment 59 7 — 66 Residential real estate: Commercial 1,806 68 — 1,874 Mortgage 15,728 9,029 1,061 25,818 HELOC 1,667 1,085 55 2,807 Installment 533 1,601 — 2,134 Consumer 3,401 913 500 4,814 Leases 91 — — 91 Total loans $ 66,675 $ 17,837 $ 2,471 $ 86,983 December 31, 2018 (In thousands) Nonaccrual Loans Accruing TDRs Loans Past Due 90 Days or More and Accruing Total Nonperforming Loans Commercial, financial and agricultural $ 14,998 $ 196 $ 10 $ 15,204 Commercial real estate 25,566 2,860 — 28,426 Construction real estate: Commercial 1,866 — — 1,866 Mortgage — 15 20 35 Installment 19 9 — 28 Residential real estate: Commercial 2,610 122 — 2,732 Mortgage 16,892 9,100 1,124 27,116 HELOC 2,158 1,028 9 3,195 Installment 468 1,049 24 1,541 Consumer 3,377 843 1,115 5,335 Leases — — — — Total loans $ 67,954 $ 15,222 $ 2,302 $ 85,478 The following table provides additional information regarding those nonaccrual loans and accruing TDR loans that were individually evaluated for impairment and those collectively evaluated for impairment, as of June 30, 2019 and December 31, 2018 . June 30, 2019 December 31, 2018 (In thousands) Nonaccrual and Accruing TDRs Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment Nonaccrual and Accruing TDRs Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment Commercial, financial and agricultural $ 19,655 $ 19,586 $ 69 $ 15,194 $ 15,120 $ 74 Commercial real estate 26,461 26,461 — 28,426 28,426 — Construction real estate: Commercial 2,243 2,243 — 1,866 1,866 — Mortgage 165 — 165 15 — 15 Installment 66 — 66 28 — 28 Residential real estate: Commercial 1,874 1,874 — 2,732 2,732 — Mortgage 24,757 — 24,757 25,992 — 25,992 HELOC 2,752 — 2,752 3,186 — 3,186 Installment 2,134 — 2,134 1,517 — 1,517 Consumer 4,314 — 4,314 4,220 — 4,220 Leases 91 91 — — — — Total loans $ 84,512 $ 50,255 $ 34,257 $ 83,176 $ 48,144 $ 35,032 All of the loans individually evaluated for impairment were evaluated using the fair value of the underlying collateral or the present value of expected future cash flows as the measurement method. The following table presents loans individually evaluated for impairment by class of loan, together with the related allowance recorded, as of June 30, 2019 and December 31, 2018 . June 30, 2019 December 31, 2018 (In thousands) Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated With no related allowance recorded: Commercial, financial and agricultural $ 8,875 $ 8,057 $ — $ 8,999 $ 3,713 $ — Commercial real estate 26,386 26,122 — 26,663 26,213 — Construction real estate: Commercial 4,601 1,787 — 4,679 1,866 — Residential real estate: Commercial 1,831 1,779 — 2,691 2,374 — Leases — — — — — — With an allowance recorded: Commercial, financial and agricultural 13,666 11,529 2,279 13,736 11,407 2,169 Commercial real estate 339 339 48 2,255 2,213 86 Construction real estate: Commercial 455 456 3 — — — Residential real estate: Commercial 95 95 21 358 358 18 Leases 91 91 28 — — — Total $ 56,339 $ 50,255 $ 2,379 $ 59,381 $ 48,144 $ 2,273 Management’s general practice is to charge down loans individually evaluated for impairment to the fair value of the underlying collateral. At June 30, 2019 and December 31, 2018 , there were $4.0 million and $8.8 million , respectively, of partial charge-offs on loans individually evaluated for impairment with no related allowance recorded and $2.1 million and $2.4 million , respectively, of partial charge-offs on loans individually evaluated for impairment that also had a specific reserve allocated. The allowance included specific reserves related to loans individually evaluated for impairment at June 30, 2019 and December 31, 2018 of $2.4 million and $2.3 million , respectively. These loans with specific reserves had a recorded investment of $12.5 million and $14.0 million as of June 30, 2019 and December 31, 2018 , respectively. Interest income on nonaccrual loans individually evaluated for impairment is recognized on a cash basis only when Park expects to receive the entire recorded investment of the loans. Interest income on accruing TDRs individually evaluated for impairment continues to be recorded on an accrual basis. The following table presents the average recorded investment and interest income recognized subsequent to impairment on loans individually evaluated for impairment as of and for the three and six months ended June 30, 2019 and June 30, 2018 : Three Months Ended Three Months Ended (In thousands) Recorded Investment as of June 30, 2019 Average Recorded Investment Interest Income Recognized Recorded Investment as of June 30, 2018 Average Recorded Investment Interest Income Recognized Commercial, financial and agricultural $ 19,586 $ 16,136 $ 90 $ 29,943 $ 27,637 $ 145 Commercial real estate 26,461 30,050 255 26,528 20,711 201 Construction real estate: Commercial 2,243 2,559 10 2,529 1,510 13 Residential real estate: Commercial 1,874 1,909 25 2,750 2,653 27 Leases 91 23 — — — — Total $ 50,255 $ 50,677 $ 380 $ 61,750 $ 52,511 $ 386 Six Months Ended Six Months Ended (In thousands) Recorded Investment as of June 30, 2019 Average Recorded Investment Interest Income Recognized Recorded Investment as of June 30, 2018 Average Recorded Investment Interest Income Recognized Commercial, financial and agricultural $ 19,586 $ 15,628 $ 137 — $ 29,943 $ 23,402 $ 319 Commercial real estate 26,461 29,209 526 — 26,528 19,519 403 Construction real estate: Commercial 2,243 2,330 22 — 2,529 1,451 27 Residential real estate: Commercial 1,874 2,277 45 — 2,750 7,511 58 Leases 91 13 — — — — Total $ 50,255 $ 49,457 $ 730 — $ 61,750 $ 51,883 $ 807 The following tables present the aging of the recorded investment in past due loans as of June 30, 2019 and December 31, 2018 by class of loan. June 30, 2019 (In thousands) Accruing Loans Past Due 30-89 Days Past Due Nonaccrual Loans and Loans Past Due 90 Days or More and Accruing (1) Total Past Due Total Current (2) Total Recorded Investment Commercial, financial and agricultural $ 402 $ 10,672 $ 11,074 $ 1,153,378 $ 1,164,452 Commercial real estate 3,026 1,565 4,591 1,613,361 1,617,952 Construction real estate: Commercial — 1,748 1,748 221,626 223,374 Mortgage 114 301 415 89,292 89,707 Installment 29 — 29 1,963 1,992 Residential real estate: Commercial 39 811 850 477,495 478,345 Mortgage 9,322 9,574 18,896 1,150,805 1,169,701 HELOC 235 843 1,078 239,263 240,341 Installment 82 337 419 13,004 13,423 Consumer 6,005 1,731 7,736 1,359,588 1,367,324 Leases — — — 31,072 31,072 Total loans $ 19,254 $ 27,582 $ 46,836 $ 6,350,847 $ 6,397,683 (1) Includes an aggregate of $2.5 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans. (2) Includes an aggregate of $41.6 million of nonaccrual loans which were current in regards to contractual principal and interest payments. December 31, 2018 (in thousands) Accruing Loans Past Due 30-89 Days Past Due (1) Total Past Due Total Current (2) Total Recorded Investment Commercial, financial and agricultural $ 4,786 $ 1,375 $ 6,161 $ 1,071,228 $ 1,077,389 Commercial real estate 780 3,584 4,364 1,283,431 1,287,795 Construction real estate: Commercial — 1,635 1,635 174,466 176,101 Mortgage 133 20 153 70,539 70,692 Installment 28 19 47 2,393 2,440 Residential real estate: Commercial 683 1,104 1,787 429,093 430,880 Mortgage 13,210 8,553 21,763 1,113,742 1,135,505 HELOC 620 907 1,527 214,915 216,442 Installment 155 274 429 13,934 14,363 Consumer 9,524 2,131 11,655 1,284,237 1,295,892 Leases — — — 2,299 2,299 Total loans $ 29,919 $ 19,602 $ 49,521 $ 5,660,277 $ 5,709,798 (1) Includes an aggregate of $2.3 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans. (2) Includes an aggregate of $50.7 million of nonaccrual loans which were current in regards to contractual principal and interest payments. Credit Quality Indicators Management utilizes past due information as a credit quality indicator across the loan portfolio. Past due information as of June 30, 2019 and December 31, 2018 is included in the tables above. The past due information is the primary credit quality indicator within the following classes of loans: (1) mortgage loans and installment loans in the construction real estate segment; (2) mortgage loans, HELOC and installment loans in the residential real estate segment; and (3) consumer loans. The primary credit indicator for commercial loans is based on an internal grading system that grades commercial loans on a scale from 1 to 8. Credit grades are continuously monitored by the responsible loan officer and adjustments are made when appropriate. A grade of 1 indicates little or no credit risk and a grade of 8 is considered a loss. Commercial loans that are pass-rated (graded an 1 through a 4) are considered to be of acceptable credit risk. Commercial loans graded a 5 (special mention) are considered to be watch list credits and a higher loan loss reserve percentage is allocated to these loans. Loans classified as special mention have potential weaknesses that require management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of Park’s credit position at some future date. Commercial loans graded a 6 (substandard), also considered to be watch list credits, are considered to represent higher credit risk and, as a result, a higher loan loss reserve percentage is allocated to these loans. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or the value 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 Park will sustain some loss if the deficiencies are not corrected. Commercial loans that are graded a 7 (doubtful) are shown as nonaccrual and Park generally charges these loans down to their fair value by taking a partial charge-off or recording a specific reserve. 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. Certain 6-rated loans and all 7-rated loans are placed on nonaccrual status and included within the impaired category. A loan is deemed impaired when management determines the borrower's ability to perform in accordance with the contractual loan agreement is in doubt. Any commercial loan graded an 8 (loss) is completely charged off. The tables below present the recorded investment by loan grade at June 30, 2019 and December 31, 2018 for all commercial loans: June 30, 2019 (In thousands) 5 Rated 6 Rated Nonaccrual and Accruing TDRs Purchase Credit Impaired (1) Pass-Rated Recorded Investment Commercial, financial and agricultural * $ 13,271 $ 555 $ 19,655 $ 3,836 $ 1,127,135 $ 1,164,452 Commercial real estate * 9,670 — 26,461 14,055 1,567,766 1,617,952 Construction real estate: Commercial 100 1 2,243 1,304 219,726 223,374 Residential real estate: Commercial 1,585 101 1,874 1,964 472,821 478,345 Leases — — 91 634 30,347 31,072 Total commercial loans $ 24,626 $ 657 $ 50,324 $ 21,793 $ 3,417,795 $ 3,515,195 * Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class. (1) Excludes loans acquired with deteriorated credit quality which are nonaccrual or TDRs due to additional credit deterioration or modification post acquisition. These loans had a recorded investment of $890,000 at June 30, 2019 . December 31, 2018 (In thousands) 5 Rated 6 Rated Nonaccrual and Accruing TDRs Purchase Credit Impaired (1) Pass-Rated Recorded Investment Commercial, financial and agricultural * $ 11,509 $ 444 $ 15,194 $ 148 $ 1,050,094 $ 1,077,389 Commercial real estate * 2,707 — 28,426 3,059 1,253,603 1,287,795 Construction real estate: Commercial 1,560 — 1,866 503 172,172 176,101 Residential real estate: Commercial 272 41 2,732 251 427,584 430,880 Leases — — — — 2,299 2,299 Total Commercial Loans $ 16,048 $ 485 $ 48,218 $ 3,961 $ 2,905,752 $ 2,974,464 * Included within each of commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class. (1) Excludes loans acquired with deteriorated credit quality which are nonaccrual or TDRs due to additional credit deterioration or modification post acquisition. These loans had a recorded investment of $475,000 at December 31, 2018. Loans and Leases Acquired with Deteriorated Credit Quality In conjunction with the NewDominion Bank acquisition, Park acquired loans with a book value of $277.9 million as of July 1, 2018. These loans were recorded at the initial fair value of $272.8 million . Loans acquired with deteriorated credit quality with a book value of $5.1 million were recorded at the initial fair value of $4.9 million . The carrying amount of loans acquired with deteriorated credit quality at June 30, 2019 and December 31, 2018 was $4.2 million and $4.4 million , respectively, while the outstanding customer balance was $4.4 million and $4.6 million , respectively. At June 30, 2019 a $3,000 allowance for loan losses had been recognized related to the acquired impaired loans. At December 31, 2018, no allowance had been recognized related to the acquired impaired loans. In conjunction with the Carolina Alliance acquisition, Park acquired loans and leases with a book value of $589.7 million as of April 1, 2019. These loans and leases were recorded at the initial fair value of $578.6 million . Loans and leases acquired with deteriorated credit quality with a book value of $21.8 million were recorded at the initial fair value of $19.9 million . The carrying amount of loans and leases acquired with deteriorated credit quality at June 30, 2019 was $19.7 million , while the outstanding customer balance was $22.5 million . At June 30, 2019 , no allowance had been recognized related to the acquired impaired loans and leases. Troubled Debt Restructurings Management classifies loans as TDRs when a borrower is experiencing financial difficulties and Park has granted a concession to the borrower as part of a modification or in the loan renewal process. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of the borrower's debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy. Management’s policy is to modify loans by extending the term or by granting a temporary or permanent contractual interest rate below the market rate, not by forgiving debt. A court's discharge of a borrower's debt in a Chapter 7 bankruptcy is considered a concession when the borrower does not reaffirm the discharged debt. Certain loans which were modified during the three -month and six -month periods ended June 30, 2019 and June 30, 2018 did not meet the definition of a TDR as the modification was a delay in a payment that was considered to be insignificant. Management considers a forbearance period of up to three months or a delay in payment of up to 30 days to be insignificant. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note. Management reviews all accruing TDRs quarterly to ensure payments continue to be made in accordance with the modified terms. Quarterly, management reviews renewals/modifications of loans previously identified as TDRs to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification did not contain a concessionary interest rate or other concessionary terms and the terms of the renewal/modification are considered to be market terms based on the current risk characteristics of the borrower, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed if the borrower has complied with the terms of the loan at the date of the renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan subsequent to the date of the renewal/modification. The majority of these TDRs were originally considered restructurings in a prior year as a result of a renewal/modification with an interest rate that was not commensurate with the risk of the underlying loan at the time of the renewal/modification. There were no TDR classifications removed during the three -month period ended June 30, 2019 . The TDR classification was removed on $23,000 of loans during the six -month period ended June 30, 2019 . The TDR classification was removed on $1.9 million of loans during the three -month period ended June 30, 2018 and on $2.2 million of loans during the six -month period ended June 30, 2018 . At June 30, 2019 and December 31, 2018 , there were $24.1 million and $24.6 million , respectively, of TDRs included in the nonaccrual loan totals. At June 30, 2019 and December 31, 2018 , $12.1 million and $19.2 million , respectively, of these nonaccrual TDRs were performing in accordance with the terms of the restructured note. As of June 30, 2019 and December 31, 2018 , loans with a recorded investment of $17.8 million and $15.2 million , respectively, were included in accruing TDR loan totals. Management will continue to review the restructured loans and may determine it is appropriate to move certain nonaccrual TDRs to accrual status in the future. At June 30, 2019 and December 31, 2018 , Park had commitments to lend $2.7 million and $0.3 million , respectively, of additional funds to borrowers whose outstanding loan terms had been modified in a TDR. At both June 30, 2019 and December 31, 2018 , there were $1.2 million of specific reserves related to TDRs. Modifications made in 2019 and 2018 were largely the result of renewals and extending the maturity date of the loans at terms consistent with the original notes. These modifications were deemed to be TDRs primarily due to Park’s conclusion that the borrower would likely not have qualified for similar terms through another lender. Many of the modifications deemed to be TDRs were previously identified as impaired loans, and thus were also previously evaluated for impairment under Accounting Standards Codification (ASC) 310. There were $1,000 of additional specific reserves recorded during the three -month and six -month periods ended June 30, 2019 as a result of TDRs identified in the period. There were no additional specific reserves recorded during the three -month period ended June 30, 2018 as a result of TDRs identified in the period. Additional specific reserves of $10,000 were recorded during the six -month period ended June 30, 2018 as a result of TDRs identified in the period. The terms of certain other loans were modified during the three -month and six -month periods ended June 30, 2019 and June 30, 2018 that did not meet the definition of a TDR. There were no substandard commercial loans modified during the three -month and six -month periods ended June 30, 2019 which did not meet the definition of a TDR. Substandard commercial loans modified during the three -month and six -month periods ended June 30, 2018 which did not meet the definition of a TDR had a total recorded investment of $0.1 million and $0.2 million , respectively. Consumer loans modified during the three -month and six -month periods ended June 30, 2019 which did not meet the definition of a TDR had a total recorded investment of $7.4 million and $13.4 million , respectively. Consumer loans with a recorded investment of $4.7 million and $11.0 million were modified during the three -month and six -month periods ended June 30, 2018 and did not meet the definition of a TDR. Many of these loans were to borrowers who were not experiencing financial difficulties but who were looking to reduce their cost of funds. The following tables detail the number of contracts modified as TDRs during the three -month periods ended June 30, 2019 and June 30, 2018 , as well as the recorded investment of these contracts at June 30, 2019 and June 30, 2018 . The recorded investment pre- and post-modification is generally the same due to the fact that Park does not typically forgive principal. Three Months Ended (In thousands) Number of Contracts Accruing Nonaccrual Total Recorded Investment Commercial, financial and agricultural 11 $ 1,802 $ 642 $ 2,444 Commercial real estate 2 — 780 780 Construction real estate: Commercial — — — — Mortgage 1 71 — 71 Installment — — — — Residential real estate: Commercial 1 — 36 36 Mortgage 6 — 374 374 HELOC 5 99 67 166 Installment 8 365 45 410 Consumer 105 60 903 963 Total loans 139 $ 2,397 $ 2,847 $ 5,244 Three Months Ended (In thousands) Number of Contracts Accruing Nonaccrual Total Recorded Investment Commercial, financial and agricultural 4 $ 123 $ 26 $ 149 Commercial real estate 3 455 134 589 Construction real estate: Commercial — — — — Mortgage — — — — Installment 2 14 — 14 Residential real estate: Commercial — — — — Mortgage 4 93 224 317 HELOC 6 409 43 452 Installment 4 71 4 75 Consumer 85 58 720 778 Total loans 108 $ 1,223 $ 1,151 $ 2,374 Of those loans which were modified and determined to be a TDR during the three -month period ended June 30, 2019 , $0.6 million were on nonaccrual status as of December 31, 2018 . Of those loans which were modified and determined to be a TDR during the three -month period ended June 30, 2018 , $5,000 were on nonaccrual status as of December 31, 2017 . The following tables detail the number of contracts modified as TDRs during the six -month periods ended June 30, 2019 and June 30, 2018 , as well as the recorded investment of these contracts at June 30, 2019 and June 30, 2018 . The recorded investment pre- and post-modification is generally the same due to the fact that Park does not typically forgive principal. Six Months Ended (In thousands) Number of Contracts Accruing Nonaccrual Total Recorded Investment Commercial, financial and agricultural 16 $ 1,801 $ 1,099 $ 2,900 Commercial real estate 4 — 2,995 2,995 Construction real estate: Commercial 1 456 — 456 Mortgage 1 71 — 71 Installment — — — — Residential real estate: Commercial 1 — 36 36 Mortgage 14 54 619 673 HELOC 8 100 136 236 Installment 16 550 46 596 Consumer 174 60 1,159 1,219 Total loans 235 $ 3,092 $ 6,090 $ 9,182 Six Months Ended (In thousands) Number of Contracts Accruing Nonaccrual Total Recorded Investment Commercial, financial and agricultural 8 $ 123 $ 70 $ 193 Commercial real estate 6 455 265 720 Construction real estate: Commercial 1 — — — Mortgage — — — — Installment 2 14 — 14 Residential real estate: Commercial — — — — Mortgage 13 93 868 961 HELOC 8 661 130 791 Installment 9 104 17 121 Consumer 135 61 906 967 Total loans 182 $ 1,511 $ 2,256 $ 3,767 Of those loans which were modified and determined to be a TDR during the six -month period ended June 30, 2019 , $1.3 million were on nonaccrual status as of December 31, 2018 . Of those loans which were modified and determined to be a TDR during the six -month period ended June 30, 2018 , $0.4 million were on nonaccrual status as of December 31, 2017 . The following tables present the recorded investment in loans which were modified as TDRs within the previous 12 months and for which there was a payment default during the three -month and six -month periods ended June 30, 2019 and June 30, 2018 , respectively. For these tables, a loan is considered to be in default when it becomes 30 days contractually past due under the modified terms. The additional allowance for loan loss resulting from the defaults on TDR loans was immaterial. Three Months Ended Three Months Ended (In thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Commercial, financial and agricultural 6 $ 91 3 $ 144 Commercial real estate — — — — Construction real estate: Commercial — — — — Mortgage — — — — Installment — — — — Residential real estate: Commercial — — — — Mortgage 5 345 6 600 HELOC 5 67 1 88 Installment 2 67 — — Consumer 61 674 42 403 Leases — — — — Total loans 79 $ 1,244 52 $ 1,235 Of the $1.2 million in modified TDRs which defaulted during the three -month period ended June 30, 2019 , $30,000 were accruing loans and $1.2 million were nonaccrual loans. Of the $1.2 million in modified TDRs which defaulted during the three -month period ended June 30, 2018 , $21,000 were accruing loans and $1.2 million were nonaccrual loans. Six Months Ended Six Months Ended (In thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Commercial, financial and agricultural 7 $ 160 3 $ 144 Commercial real estate — — — — Construction real estate: Commercial — — — — Mortgage — — — — Installment — — — — Residential real estate: Commercial — — — — Mortgage 7 382 7 703 HELOC 5 67 1 88 Installment 2 67 — — Consumer 69 720 47 445 Leases — — — — Total loans 90 $ 1,396 58 $ 1,380 Of the $1.4 million in modified TDRs which defaulted during the six-month period ended June 30, 2019 , $30,000 were accruing loans and $1.4 million were nonaccrual loans. Of the $1.4 million in modified TDRs which defaulted during the six -month period ended June 30, 2018 , $21,000 were accruing loans and $1.4 million were nonaccrual loans. |