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Purchased Loans
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Purchased Loans
Non Purchased Loans
(In Thousands, Except Number of Loans)

For purposes of this Note 4, all references to “loans” mean non purchased loans.

The following is a summary of non purchased loans and leases as of the dates presented:
 
 
September 30,
2018
 
December 31, 2017
Commercial, financial, agricultural
$
817,799

 
$
763,823

Lease financing
57,576

 
57,354

Real estate – construction
624,892

 
547,658

Real estate – 1-4 family mortgage
2,000,770

 
1,729,534

Real estate – commercial mortgage
2,609,510

 
2,390,076

Installment loans to individuals
102,995

 
103,452

Gross loans
6,213,542

 
5,591,897

Unearned income
(3,304
)
 
(3,341
)
Loans, net of unearned income
$
6,210,238

 
$
5,588,556



Past Due and Nonaccrual Loans
Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Generally, the recognition of interest on mortgage and commercial loans is discontinued at the time the loan is 90 days past due unless the credit is well-secured and in process of collection. Consumer and other retail loans are typically charged-off no later than the time the loan is 120 days past due. In all cases, loans are placed on nonaccrual status or charged-off at an earlier date if collection of principal or interest is considered doubtful. Loans may be placed on nonaccrual status regardless of whether or not such loans are considered past due. All interest accrued for the current year, but not collected, for loans that are placed on nonaccrual status or charged-off is reversed against interest income. The interest on these loans is accounted for on the cash-basis or cost-recovery method, until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.
The following table provides an aging of past due and nonaccrual loans, segregated by class, as of the dates presented:
 
 
Accruing Loans
 
Nonaccruing Loans
 
 
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
Total
Loans
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
1,606

 
$
319

 
$
814,246

 
$
816,171

 
$
—

 
$
1,423

 
$
205

 
$
1,628

 
$
817,799

Lease financing
320

 
—

 
57,256

 
57,576

 
—

 
—

 
—

 
—

 
57,576

Real estate – construction
1,069

 
—

 
623,823

 
624,892

 
—

 
—

 
—

 
—

 
624,892

Real estate – 1-4 family mortgage
7,928

 
2,965

 
1,986,079

 
1,996,972

 
207

 
2,678

 
913

 
3,798

 
2,000,770

Real estate – commercial mortgage
3,080

 
480

 
2,601,728

 
2,605,288

 
324

 
2,328

 
1,570

 
4,222

 
2,609,510

Installment loans to individuals
860

 
42

 
102,045

 
102,947

 
6

 
38

 
4

 
48

 
102,995

Unearned income
—

 
—

 
(3,304
)
 
(3,304
)
 
—

 
—

 
—

 
—

 
(3,304
)
Total
$
14,863

 
$
3,806

 
$
6,181,873

 
$
6,200,542

 
$
537

 
$
6,467

 
$
2,692

 
$
9,696

 
$
6,210,238

December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
2,722

 
$
22

 
$
759,143

 
$
761,887

 
$
205

 
$
1,033

 
$
698

 
$
1,936

 
$
763,823

Lease financing
47

 
—

 
57,148

 
57,195

 
—

 
159

 
—

 
159

 
57,354

Real estate – construction
50

 
—

 
547,608

 
547,658

 
—

 
—

 
—

 
—

 
547,658

Real estate – 1-4 family mortgage
11,810

 
2,194

 
1,712,982

 
1,726,986

 
—

 
1,818

 
730

 
2,548

 
1,729,534

Real estate – commercial mortgage
1,921

 
727

 
2,381,871

 
2,384,519

 
—

 
2,877

 
2,680

 
5,557

 
2,390,076

Installment loans to individuals
429

 
72

 
102,901

 
103,402

 
1

 
28

 
21

 
50

 
103,452

Unearned income
—

 
—

 
(3,341
)
 
(3,341
)
 
—

 
—

 
—

 
—

 
(3,341
)
Total
$
16,979

 
$
3,015

 
$
5,558,312

 
$
5,578,306

 
$
206

 
$
5,915

 
$
4,129

 
$
10,250

 
$
5,588,556


Impaired Loans
A loan is considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due according to the contractual terms of the loan agreement. Impairment is measured on a loan-by-loan basis for commercial, consumer and construction loans of $500 or more by, as applicable, the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s obtainable market price or the fair value of the collateral if the loan is collateral dependent. Large groups of smaller balance homogeneous loans are evaluated collectively for impairment. When the ultimate collectability of an impaired loan’s principal is in doubt, wholly or partially, the loan is placed on nonaccrual status and all cash receipts are applied to principal. Once the recorded balance has been reduced to zero, future cash receipts are applied to interest income, to the extent any interest has been foregone, and then they are recorded as recoveries of any amounts previously charged-off. For impaired loans, a specific reserve is established to adjust the carrying value of the loan to its estimated net realizable value.
Loans accounted for under FASB ASC 310-20, “Nonrefundable Fees and Other Cost” (“ASC 310-20”), and which are impaired loans recognized in conformity with ASC 310, “Receivables” (“ASC 310”), segregated by class, were as follows as of the dates presented:
 
 
Unpaid
Contractual
Principal
Balance
 
Recorded
Investment
With
Allowance
 
Recorded
Investment
With No
Allowance
 
Total
Recorded
Investment
 
Related
Allowance
September 30, 2018
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
2,426

 
$
1,952

 
$
—

 
$
1,952

 
$
377

Lease financing
—

 
—

 
—

 
—

 
—

Real estate – construction
9,725

 
7,560

 
2,165

 
9,725

 
65

Real estate – 1-4 family mortgage
8,841

 
8,115

 
—

 
8,115

 
58

Real estate – commercial mortgage
8,781

 
4,954

 
1,277

 
6,231

 
611

Installment loans to individuals
119

 
112

 
—

 
112

 
1

Total
$
29,892

 
$
22,693

 
$
3,442

 
$
26,135

 
$
1,112

December 31, 2017
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
3,043

 
$
2,365

 
$
—

 
$
2,365

 
$
138

Lease financing
159

 
159

 
—

 
159

 
2

Real estate – construction
578

 
578

 
—

 
578

 
4

Real estate – 1-4 family mortgage
10,018

 
8,169

 
703

 
8,872

 
561

Real estate – commercial mortgage
12,463

 
9,652

 
—

 
9,652

 
1,861

Installment loans to individuals
121

 
117

 
—

 
117

 
1

Totals
$
26,382

 
$
21,040

 
$
703

 
$
21,743

 
$
2,567



The following table presents the average recorded investment and interest income recognized on loans accounted for under ASC 310-20 and which are impaired loans for the periods presented:
 
Three Months Ended
 
Three Months Ended
 
September 30, 2018
 
September 30, 2017
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Commercial, financial, agricultural
$
1,979

 
$
11

 
$
1,960

 
$
8

Lease financing
—

 
—

 
—

 
—

Real estate – construction
9,725

 
42

 
897

 
33

Real estate – 1-4 family mortgage
8,136

 
51

 
8,897

 
71

Real estate – commercial mortgage
6,258

 
37

 
7,575

 
46

Installment loans to individuals
118

 
1

 
140

 
1

Total
$
26,216

 
$
142

 
$
19,469

 
$
159

 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Commercial, financial, agricultural
$
2,204

 
$
31

 
$
2,140

 
$
8

Lease financing
—

 
—

 
—

 
—

Real estate – construction
9,621

 
109

 
861

 
36

Real estate – 1-4 family mortgage
8,388

 
174

 
8,944

 
165

Real estate – commercial mortgage
6,354

 
117

 
7,844

 
134

Installment loans to individuals
121

 
2

 
148

 
2

Total
$
26,688

 
$
433

 
$
19,937

 
$
345



Restructured Loans
Restructured loans are those for which concessions have been granted to the borrower due to a deterioration of the borrower’s financial condition and which are performing in accordance with the new terms. Such concessions may include reduction in interest rates or deferral of interest or principal payments. In evaluating whether to restructure a loan, management analyzes the long-term financial condition of the borrower, including guarantor and collateral support, to determine whether the proposed concessions will increase the likelihood of repayment of principal and interest.
The tables below illustrate the impact of modifications classified as restructured loans which were made during the periods presented and held on the Consolidated Balance Sheets at the respective period end. There were no newly restructured loans during the three months ended September 30, 2018.
 
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
Three months ended September 30, 2017
 
 
 
 
 
Real estate – 1-4 family mortgage
4

 
$
307

 
$
307

Real estate – commercial mortgage
1

 
230

 
175

Total
5

 
$
537

 
$
482


 
 
 
 
 
 
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
Nine months ended September 30, 2018
 
 
 
 
 
Real estate – 1-4 family mortgage
4

 
$
625

 
$
625

Real estate – commercial mortgage
1

 
83

 
78

Total
5

 
$
708

 
$
703

Nine months ended September 30, 2017
 
 
 
 
 
Real estate – 1-4 family mortgage
9

 
$
611

 
$
601

Real estate – commercial mortgage
3

 
683

 
318

Installment loans to individuals
1

 
4

 
3

Total
13

 
$
1,298

 
$
922



With respect to loans that were restructured during the nine months ended September 30, 2018, none have subsequently defaulted as of the date of this report. With respect to loans that were restructured during the nine months ended September 30, 2017, $230 subsequently defaulted within twelve months of the restructuring.

Restructured loans not performing in accordance with their restructured terms that are either contractually 90 days or more past due or placed on nonaccrual status are reported as nonperforming loans. There were two restructured loans in the amount of $228 contractually 90 days past due or more and still accruing at September 30, 2018 and three restructured loans in the amount of $597 contractually 90 days past due or more and still accruing at September 30, 2017. The outstanding balance of restructured loans on nonaccrual status was $3,147 and $4,651 at September 30, 2018 and September 30, 2017, respectively.

Changes in the Company’s restructured loans are set forth in the table below:
 
 
Number of
Loans
 
Recorded
Investment
Totals at January 1, 2018
54

 
$
5,588

Additional loans with concessions
5

 
709

Reclassified as performing
2

 
154

Reductions due to:
 
 
 
Reclassified as nonperforming
(7
)
 
(598
)
Paid in full
(8
)
 
(1,448
)
Principal paydowns
—

 
(165
)
Totals at September 30, 2018
46

 
$
4,240



The allocated allowance for loan losses attributable to restructured loans was $33 and $98 at September 30, 2018 and September 30, 2017, respectively. The Company had $19 in remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2018. There was no remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2017.
Credit Quality
For commercial and commercial real estate loans, internal risk-rating grades are assigned by lending, credit administration or loan review personnel, based on an analysis of the financial and collateral strength and other credit attributes underlying each loan. Management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the portfolio balances of these loans. Loan grades range between 1 and 9, with 1 being loans with the least credit risk. Loans within the “Pass” grade (historically, those with a risk rating between 1 and 4) generally have a lower risk of loss and therefore a lower risk factor applied to the loan balances. Management has established more granular risk rating categories to better identify heightened credit risk as loans migrate downward in the risk rating system. The “Pass” grade is now reserved for loans with a risk rating between 1 and 4A, and the “Watch” grade (those with a risk rating of 4B and 4E) is utilized on a temporary basis for “Pass” grade loans where a significant adverse risk-modifying action is anticipated in the near term. Loans that migrate toward the “Substandard” grade (those with a risk rating between 5 and 9) generally have a higher risk of loss and therefore a higher risk factor applied to the related loan balances. The following table presents the Company’s loan portfolio by risk-rating grades as of the dates presented:
 
 
Pass
 
Watch
 
Substandard
 
Total
September 30, 2018
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
596,176

 
$
12,885

 
$
4,729

 
$
613,790

Real estate – construction
548,080

 
764

 
9,695

 
558,539

Real estate – 1-4 family mortgage
298,125

 
1,093

 
5,803

 
305,021

Real estate – commercial mortgage
2,200,150

 
52,845

 
22,073

 
2,275,068

Installment loans to individuals
570

 
—

 
—

 
570

Total
$
3,643,101

 
$
67,587

 
$
42,300

 
$
3,752,988

December 31, 2017
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
554,943

 
$
11,496

 
$
4,402

 
$
570,841

Real estate – construction
483,498

 
662

 
81

 
484,241

Real estate – 1-4 family mortgage
254,643

 
505

 
8,697

 
263,845

Real estate – commercial mortgage
1,983,750

 
50,428

 
24,241

 
2,058,419

Installment loans to individuals
921

 
—

 
—

 
921

Total
$
3,277,755

 
$
63,091

 
$
37,421

 
$
3,378,267



For portfolio balances of consumer, small balance consumer mortgage loans, such as 1-4 family mortgage loans, and certain other loans originated for other than commercial purposes, allowance factors are determined based on historical loss ratios by portfolio for the preceding eight quarters and may be adjusted by other qualitative criteria. The following table presents the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
 
 
Performing
 
Non-
Performing
 
Total
September 30, 2018
 
 
 
 
 
Commercial, financial, agricultural
$
202,633

 
$
1,376

 
$
204,009

Lease financing
54,272

 
—

 
54,272

Real estate – construction
66,353

 
—

 
66,353

Real estate – 1-4 family mortgage
1,690,667

 
5,082

 
1,695,749

Real estate – commercial mortgage
333,452

 
990

 
334,442

Installment loans to individuals
102,335

 
90

 
102,425

Total
$
2,449,712

 
$
7,538

 
$
2,457,250

December 31, 2017
 
 
 
 
 
Commercial, financial, agricultural
$
191,473

 
$
1,509

 
$
192,982

Lease financing
53,854

 
159

 
54,013

Real estate – construction
63,417

 
—

 
63,417

Real estate – 1-4 family mortgage
1,462,347

 
3,342

 
1,465,689

Real estate – commercial mortgage
330,441

 
1,216

 
331,657

Installment loans to individuals
102,409

 
122

 
102,531

Total
$
2,203,941

 
$
6,348

 
$
2,210,289

Purchased Loans
(In Thousands, Except Number of Loans)

For purposes of this Note 5, all references to “loans” mean purchased loans.

The following is a summary of purchased loans as of the dates presented:
 
 
September 30,
2018
 
December 31, 2017
Commercial, financial, agricultural
$
495,545

 
$
275,570

Real estate – construction
112,093

 
85,731

Real estate – 1-4 family mortgage
761,913

 
614,187

Real estate – commercial mortgage
1,503,075

 
1,037,454

Installment loans to individuals
40,043

 
18,824

Gross loans
2,912,669

 
2,031,766

Unearned income
—

 
—

Loans, net of unearned income
$
2,912,669

 
$
2,031,766



Past Due and Nonaccrual Loans
The Company’s policies with respect to placing loans on nonaccrual status or charging off loans, and its accounting for interest on any such loans, are described above in Note 4, “Non Purchased Loans.”
The following table provides an aging of past due and nonaccrual loans, segregated by class, as of the dates presented:
 
 
Accruing Loans
 
Nonaccruing Loans
 
 
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
30-89 Days
Past Due
 
90 Days
or More
Past Due
 
Current
Loans
 
Total
Loans
 
Total
Loans
September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
5,508

 
$
487

 
$
489,237

 
$
495,232

 
$
—

 
$
239

 
$
74

 
$
313

 
$
495,545

Real estate – construction
2,676

 
—

 
109,153

 
111,829

 
—

 
264

 
—

 
264

 
112,093

Real estate – 1-4 family mortgage
6,737

 
3,648

 
748,488

 
758,873

 
353

 
1,357

 
1,330

 
3,040

 
761,913

Real estate – commercial mortgage
5,140

 
3,767

 
1,493,220

 
1,502,127

 
412

 
329

 
207

 
948

 
1,503,075

Installment loans to individuals
772

 
58

 
38,969

 
39,799

 
54

 
—

 
190

 
244

 
40,043

Total
$
20,833

 
$
7,960

 
$
2,879,067

 
$
2,907,860

 
$
819

 
$
2,189

 
$
1,801

 
$
4,809

 
$
2,912,669

December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
1,119

 
$
532

 
$
273,488

 
$
275,139

 
$
—

 
$
199

 
$
232

 
$
431

 
$
275,570

Real estate – construction
415

 
—

 
85,316

 
85,731

 
—

 
—

 
—

 
—

 
85,731

Real estate – 1-4 family mortgage
6,070

 
2,280

 
602,464

 
610,814

 
385

 
879

 
2,109

 
3,373

 
614,187

Real estate – commercial mortgage
2,947

 
2,910

 
1,031,141

 
1,036,998

 
191

 
99

 
166

 
456

 
1,037,454

Installment loans to individuals
208

 
9

 
18,443

 
18,660

 
59

 
—

 
105

 
164

 
18,824

Total
$
10,759

 
$
5,731

 
$
2,010,852

 
$
2,027,342

 
$
635

 
$
1,177

 
$
2,612

 
$
4,424

 
$
2,031,766


Impaired Loans
The Company’s policies with respect to the determination of whether a loan is impaired and the treatment of such loans are described above in Note 4, “Non Purchased Loans.”
Loans accounted for under ASC 310-20, and which are impaired loans recognized in conformity with ASC 310, segregated by class, were as follows as of the dates presented:
 
 
Unpaid
Contractual
Principal
Balance
 
Recorded
Investment
With
Allowance
 
Recorded
Investment
With No
Allowance
 
Total
Recorded
Investment
 
Related
Allowance
September 30, 2018
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
391

 
$
327

 
$
2

 
$
329

 
$
44

Real estate – construction
520

 
520

 
—

 
520

 
5

Real estate – 1-4 family mortgage
4,924

 
834

 
3,495

 
4,329

 
12

Real estate – commercial mortgage
1,521

 
1,337

 
152

 
1,489

 
104

Installment loans to individuals
245

 
244

 
—

 
244

 
4

Total
$
7,601

 
$
3,262

 
$
3,649

 
$
6,911

 
$
169

December 31, 2017
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
757

 
$
625

 
$
74

 
$
699

 
$
52

Real estate – construction
1,207

 
—

 
1,199

 
1,199

 
—

Real estate – 1-4 family mortgage
6,173

 
1,385

 
4,225

 
5,610

 
45

Real estate – commercial mortgage
901

 
728

 
165

 
893

 
6

Installment loans to individuals
165

 
154

 
9

 
163

 
4

Totals
$
9,203

 
$
2,892

 
$
5,672

 
$
8,564

 
$
107



The following table presents the average recorded investment and interest income recognized on loans accounted for under ASC 310-20 and which are impaired loans for the periods presented:
 
Three Months Ended
 
Three Months Ended
 
September 30, 2018
 
September 30, 2017
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Commercial, financial, agricultural
$
331

 
$
3

 
$
413

 
$
6

Real estate – construction
520

 
1

 
829

 
62

Real estate – 1-4 family mortgage
4,817

 
33

 
5,174

 
41

Real estate – commercial mortgage
1,511

 
12

 
899

 
8

Installment loans to individuals
244

 
—

 
167

 
—

Total
$
7,423

 
$
49

 
$
7,482

 
$
117

 
 
 
 
 
 
 
 
 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Commercial, financial, agricultural
$
334

 
$
8

 
$
332

 
$
9

Real estate – construction
520

 
2

 
741

 
62

Real estate – 1-4 family mortgage
4,907

 
107

 
5,221

 
103

Real estate – commercial mortgage
1,545

 
43

 
915

 
25

Installment loans to individuals
244

 
—

 
169

 
—

Total
$
7,550

 
$
160

 
$
7,378

 
$
199



Loans accounted for under ASC 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality” (“ASC 310-30”), and which are impaired loans recognized in conformity with ASC 310, segregated by class, were as follows as of the dates presented:
 
 
Unpaid
Contractual
Principal
Balance
 
Recorded
Investment
With
Allowance
 
Recorded
Investment
With No
Allowance
 
Total
Recorded
Investment
 
Related
Allowance
September 30, 2018
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
43,724

 
$
4,680

 
$
27,959

 
$
32,639

 
$
360

Real estate – 1-4 family mortgage
62,126

 
13,469

 
35,724

 
49,193

 
505

Real estate – commercial mortgage
171,754

 
63,323

 
81,930

 
145,253

 
1,961

Installment loans to individuals
9,009

 
701

 
4,277

 
4,978

 
2

Total
$
286,613

 
$
82,173

 
$
149,890

 
$
232,063

 
$
2,828

December 31, 2017
 
 
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
24,179

 
$
5,768

 
$
9,547

 
$
15,315

 
$
312

Real estate – 1-4 family mortgage
65,049

 
15,910

 
38,059

 
53,969

 
572

Real estate – commercial mortgage
186,720

 
65,108

 
91,230

 
156,338

 
892

Installment loans to individuals
1,761

 
698

 
940

 
1,638

 
1

Totals
$
277,709

 
$
87,484

 
$
139,776

 
$
227,260

 
$
1,777



The following table presents the average recorded investment and interest income recognized on loans accounted for under ASC 310-30 and which are impaired loans for the periods presented:
 
Three Months Ended
 
Three Months Ended
 
September 30, 2018
 
September 30, 2017
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Commercial, financial, agricultural
$
11,705

 
$
162

 
$
14,201

 
$
507

Real estate – 1-4 family mortgage
51,957

 
621

 
67,802

 
808

Real estate – commercial mortgage
141,780

 
1,705

 
174,394

 
2,578

Installment loans to individuals
1,608

 
18

 
1,812

 
18

Total
$
207,050

 
$
2,506

 
$
258,209

 
$
3,911


 
Nine Months Ended
 
Nine Months Ended
 
September 30, 2018
 
September 30, 2017
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
Average
Recorded
Investment
 
Interest
Income
Recognized
Commercial, financial, agricultural
$
12,117

 
$
579

 
$
13,530

 
$
988

Real estate – 1-4 family mortgage
53,093

 
1,941

 
68,933

 
2,301

Real estate – commercial mortgage
144,530

 
5,610

 
177,039

 
6,886

Installment loans to individuals
1,616

 
54

 
1,865

 
55

Total
$
211,356

 
$
8,184

 
$
261,367

 
$
10,230



Restructured Loans
An explanation of what constitutes a “restructured loan,” and management’s analysis in determining whether to restructure a loan, are described above in Note 4, “Non Purchased Loans.”
The tables below illustrate the impact of modifications classified as restructured loans which were made during the periods presented and held on the Consolidated Balance Sheets at the respective period end. There were no newly restructured loans during the three months ended September 30, 2018.

 
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
Three months ended September 30, 2017
 
 
 
 
 
Real estate – 1-4 family mortgage
18

 
$
1,624

 
$
1,189

Real estate – commercial mortgage
1

 
393

 
244

Total
19

 
$
2,017

 
$
1,433




 
 
 
 
 
 
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
Nine months ended September 30, 2018
 
 
 
 
 
Commercial, financial, agricultural
1

 
$
48

 
$
44

Real estate – 1-4 family mortgage
1

 
$
18

 
$
17

Real estate – commercial mortgage
1

 
8

 
7

Total
3

 
$
74

 
$
68

Nine months ended September 30, 2017
 
 
 
 
 
Real estate – 1-4 family mortgage
28

 
$
3,789

 
$
3,062

Real estate – commercial mortgage
3

 
2,851

 
2,025

Total
31

 
$
6,640

 
$
5,087



With respect to loans that were restructured during the nine months ended September 30, 2018, none have subsequently defaulted as of the date of this report. With respect to loans that were restructured during the nine months ended September 30, 2017, $372 subsequently defaulted within twelve months of the restructuring.

There were three restructured loans in the amount of $503 contractually 90 days past due or more and still accruing at September 30, 2018 and two restructured loans in the amount of $146 contractually 90 days past due or more and still accruing at September 30, 2017. The outstanding balance of restructured loans on nonaccrual status was $493 and $504 at September 30, 2018 and September 30, 2017, respectively.

Changes in the Company’s restructured loans are set forth in the table below:
 
 
Number of
Loans
 
Recorded
Investment
Totals at January 1, 2018
68

 
$
8,965

Additional loans with concessions
3

 
220

Reclassified as performing restructured loan
3

 
175

Reductions due to:
 
 
 
Reclassified to nonperforming loans
(5
)
 
(688
)
Paid in full
(4
)
 
(411
)
Principal paydowns
—

 
(570
)
Totals at September 30, 2018
65

 
$
7,691



The allocated allowance for loan losses attributable to restructured loans was $62 and $97 at September 30, 2018 and September 30, 2017, respectively. The Company had $2 and $7 in remaining availability under commitments to lend additional funds on these restructured loans at September 30, 2018 and September 30, 2017, respectively.
Credit Quality
A discussion of the Company’s policies regarding internal risk-rating of loans is discussed above in Note 4, “Non Purchased Loans.” The following table presents the Company’s loan portfolio by risk-rating grades as of the dates presented:

 
Pass
 
Watch
 
Substandard
 
Total
September 30, 2018
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
409,790

 
$
38,947

 
$
2,487

 
$
451,224

Real estate – construction
77,950

 
—

 
264

 
78,214

Real estate – 1-4 family mortgage
134,136

 
7,591

 
5,993

 
147,720

Real estate – commercial mortgage
1,232,028

 
38,418

 
9,538

 
1,279,984

Installment loans to individuals
1,720

 
—

 
2

 
1,722

Total
$
1,855,624

 
$
84,956

 
$
18,284

 
$
1,958,864

December 31, 2017
 
 
 
 
 
 
 
Commercial, financial, agricultural
$
241,195

 
$
4,974

 
$
2,824

 
$
248,993

Real estate – construction
81,220

 
—

 
—

 
81,220

Real estate – 1-4 family mortgage
91,369

 
2,498

 
6,172

 
100,039

Real estate – commercial mortgage
827,372

 
17,123

 
9,003

 
853,498

Installment loans to individuals
678

 
—

 
3

 
681

Total
$
1,241,834

 
$
24,595

 
$
18,002

 
$
1,284,431



The following table presents the performing status of the Company’s loan portfolio not subject to risk rating as of the dates presented:
 
 
Performing
 
Non-
Performing
 
Total
September 30, 2018
 
 
 
 
 
Commercial, financial, agricultural
$
11,613

 
$
69

 
$
11,682

Real estate – construction
33,879

 
—

 
33,879

Real estate – 1-4 family mortgage
562,989

 
2,011

 
565,000

Real estate – commercial mortgage
77,722

 
116

 
77,838

Installment loans to individuals
33,081

 
262

 
33,343

Total
$
719,284

 
$
2,458

 
$
721,742

December 31, 2017
 
 
 
 
 
Commercial, financial, agricultural
$
11,216

 
$
46

 
$
11,262

Real estate – construction
4,511


—

 
4,511

Real estate – 1-4 family mortgage
459,038

 
1,141

 
460,179

Real estate – commercial mortgage
27,495

 
123

 
27,618

Installment loans to individuals
16,344

 
161

 
16,505

Total
$
518,604

 
$
1,471

 
$
520,075



Loans Purchased with Deteriorated Credit Quality
Loans purchased in business combinations that exhibited, at the date of acquisition, evidence of deterioration of the credit quality since origination, such that it was probable that all contractually required payments would not be collected, were as follows as of the dates presented:
 
 
Total Purchased Credit Deteriorated Loans
September 30, 2018
 
Commercial, financial, agricultural
$
32,639

Real estate – 1-4 family mortgage
49,193

Real estate – commercial mortgage
145,253

Installment loans to individuals
4,978

Total
$
232,063

December 31, 2017
 
Commercial, financial, agricultural
$
15,315

Real estate – 1-4 family mortgage
53,969

Real estate – commercial mortgage
156,338

Installment loans to individuals
1,638

Total
$
227,260



The following table presents the fair value of loans that exhibited evidence of deteriorated credit quality at the time of acquisition at September 30, 2018:
 
 
Total Purchased Credit Deteriorated Loans
Contractually-required principal and interest
$
330,403

Nonaccretable difference(1)
(62,705
)
Cash flows expected to be collected
267,698

Accretable yield(2)
(35,635
)
Fair value
$
232,063

 
(1)
Represents contractual principal and interest cash flows of $52,680 and $10,025, respectively, not expected to be collected.
(2)
Represents contractual principal and interest cash flows of $1,444 and $34,191, respectively, expected to be collected.
Changes in the accretable yield of loans purchased with deteriorated credit quality were as follows as of September 30, 2018:
 
Total Purchased Credit Deteriorated Loans
Balance at January 1, 2018
$
(32,207
)
Additions due to acquisition
(9,353
)
Reclassification from nonaccretable difference
(5,952
)
Accretion
11,285

Charge-offs
592

Balance at September 30, 2018
$
(35,635
)


The following table presents the fair value of loans purchased from Brand as of the September 1, 2018 acquisition date.
At acquisition date:
 
September 1, 2018
  Contractually-required principal and interest
 
$
1,625,137

  Nonaccretable difference
 
(120,033
)
  Cash flows expected to be collected
 
1,505,104

  Accretable yield
 
(169,631
)
      Fair value
 
$
1,335,473


The following table presents the fair value of loans purchased from Metropolitan as of the July 1, 2017 acquisition date.
At acquisition date:
 
July 1, 2017
  Contractually-required principal and interest
 
$
1,198,741

  Nonaccretable difference
 
(79,165
)
  Cash flows expected to be collected
 
1,119,576

  Accretable yield
 
(154,543
)
      Fair value
 
$
965,033