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Loans and Asset Quality Information
 6 Months Ended
Jun. 30, 2019
Receivables [Abstract]  
Loans and Asset Quality Information Loans and Asset Quality Information
The following is a summary of the major categories of total loans outstanding:
($ in thousands)
June 30, 2019
 
December 31, 2018
 
June 30, 2018
 
Amount
 
Percentage
 
Amount
 
Percentage
 
Amount
 
Percentage
All  loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
471,188

 
11
%
 
$
457,037

 
11
%
 
$
417,366

 
10
%
Real estate – construction, land development & other land loans
456,781

 
10
%
 
518,976

 
12
%
 
600,031

 
14
%
Real estate – mortgage – residential (1-4 family) first mortgages
1,090,601

 
25
%
 
1,054,176

 
25
%
 
1,000,189

 
24
%
Real estate – mortgage – home equity loans / lines of credit
349,355

 
8
%
 
359,162

 
8
%
 
369,875

 
9
%
Real estate – mortgage – commercial and other
1,900,188

 
44
%
 
1,787,022

 
42
%
 
1,690,175

 
41
%
Installment loans to individuals
69,600

 
2
%
 
71,392

 
2
%
 
71,823

 
2
%
Subtotal
4,337,713

 
100
%
 
4,247,765

 
100
%
 
4,149,459

 
100
%
Unamortized net deferred loan costs (fees)
1,784

 
 
 
1,299

 
 
 
(69
)
 
 
Total loans
$
4,339,497

 
 
 
$
4,249,064

 
 
 
$
4,149,390

 
 

Included in the table above are the following amounts of SBA loans:
($ in thousands)
June 30,
2019
 
December 31,
2018
 
June 30,
2018
Guaranteed portions of SBA Loans included in table above
$
43,157


53,205


20,466

Unguaranteed portions of SBA Loans included in table above
106,154


97,572


98,013

Total SBA loans included in the table above
$
149,311


150,777


118,479

 








Sold portions of SBA loans with servicing retained - not included in table above
$
288,914


230,424


171,462


At June 30, 2019 and December 31, 2018, there was a remaining unaccreted discount on the retained portion of sold SBA loans amounting to $6.9 million and $5.7 million, respectively. As of June 30, 2019 and December 31, 2018, there was a remaining accretable discount of $13.0 million and $15.0 million, respectively, related to purchased non-impaired loans. Both types of discounts are amortized as yield adjustments over the respective lives of the loans, so long as the loans perform.
The following table presents changes in the recorded investment of purchased credit impaired (“PCI”) loans.
PCI loans
For the Six Months Ended June 30,
2019
 
For the Year Ended December 31,
2018
Balance at beginning of period
$
17,393

 
23,165

Change due to payments received and accretion
(3,273
)
 
(5,799
)
Change due to loan charge-offs
(11
)
 
(10
)
Transfers to foreclosed real estate
—

 
(4
)
Other
66

 
41

Balance at end of period
$
14,175

 
17,393

The following table presents changes in the accretable yield for PCI loans.
Accretable Yield for PCI loans
For the Six Months Ended June 30,
2019
 
For the Year Ended December 31,
2018
Balance at beginning of period
$
4,750

 
4,688

Accretion
(811
)
 
(2,050
)
Reclassification from (to) nonaccretable difference
502

 
849

Other, net
(89
)
 
1,263

Balance at end of period
$
4,352

 
4,750



During the six months of 2019, the Company received $290,000 in payments that exceeded the carrying amount of the related PCI loans, of which $263,000 was recognized as loan discount accretion income and $27,000 was recorded as additional loan interest income. During the first six months of 2018, the Company received $190,000 in payments that exceeded the carrying amount of the related PCI loans, of which $149,000 was recognized as loan discount accretion income and $41,000 was recorded as additional loan interest income.
Nonperforming assets are defined as nonaccrual loans, troubled debt restructured (“TDR”) loans, loans past due 90 or more days and still accruing interest, and foreclosed real estate. Nonperforming assets are summarized as follows.
($ in thousands)
June 30,
2019

December 31,
2018

June 30,
2018
Nonperforming assets
 


 


 

Nonaccrual loans
$
17,375


22,575


25,494

TDRs- accruing
11,890


13,418


17,386

Accruing loans > 90 days past due
—


—


—

Total nonperforming loans
29,265


35,993


42,880

Foreclosed real estate
5,107


7,440


8,296

Total nonperforming assets
$
34,372


43,433


51,176










Purchased credit impaired loans not included above (1)
$
14,175


17,393


20,832










(1) In the March 3, 2017 acquisition of Carolina Bank, and the October 1, 2017 acquisition of Asheville Savings Bank, the Company acquired $19.3 million and $9.9 million, respectively, in PCI loans in accordance with ASC 310-30 accounting guidance. These loans are excluded from nonperforming loans, including $0.6 million, $0.6 million, and $0.5 million in PCI loans at June 30, 2019, December 31, 2018, and June 30, 2018, respectively, that were contractually past due 90 days or more.
At June 30, 2019 and December 31, 2018, the Company had $1.3 million and $0.7 million in residential mortgage loans in process of foreclosure, respectively.
The following is a summary of the Company’s nonaccrual loans by major categories.
($ in thousands)
June 30,
2019
 
December 31,
2018
Commercial, financial, and agricultural
$
1,490

 
919

Real estate – construction, land development & other land loans
1,420

 
2,265

Real estate – mortgage – residential (1-4 family) first mortgages
8,697

 
10,115

Real estate – mortgage – home equity loans / lines of credit
1,404

 
1,685

Real estate – mortgage – commercial and other
4,260

 
7,452

Installment loans to individuals
104

 
139

Total
$
17,375

 
22,575


The following table presents an analysis of the payment status of the Company’s loans as of June 30, 2019.
($ in thousands)
Accruing
30-59
Days Past
Due
 
Accruing
60-89
Days
Past
Due
 
Accruing
90 Days
or More
Past
Due
 
Nonaccrual
Loans
 
Accruing
Current
 
Total Loans
Receivable
Commercial, financial, and agricultural
$
3,716

 
606

 
—

 
1,490

 
465,112

 
470,924

Real estate – construction, land development & other land loans
299

 
—

 
—

 
1,420

 
454,890

 
456,609

Real estate – mortgage – residential (1-4 family) first mortgages
4,821

 
101

 
—

 
8,697

 
1,071,040

 
1,084,659

Real estate – mortgage – home equity loans / lines of credit
856

 
620

 
—

 
1,404

 
346,265

 
349,145

Real estate – mortgage – commercial and other
1,007

 
2,514

 
—

 
4,260

 
1,884,964

 
1,892,745

Installment loans to individuals
354

 
77

 
—

 
104

 
68,921

 
69,456

Purchased credit impaired
167

 
174

 
622

 
—

 
13,212

 
14,175

Total
$
11,220

 
4,092

 
622

 
17,375

 
4,304,404

 
4,337,713

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
 
 
1,784

Total loans
 
 
 
 
 
 
 
 
 
 
$
4,339,497

The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2018.
($ in thousands)
Accruing
30-59
Days
Past
Due
 
Accruing
60-89
Days
Past
Due
 
Accruing
90 Days
or More
Past
Due
 
Nonaccrual
Loans
 
Accruing
Current
 
Total Loans
Receivable
Commercial, financial, and agricultural
$
191

 
5

 
—

 
919

 
455,691

 
456,806

Real estate – construction, land development & other land loans
849

 
212

 
—

 
2,265

 
515,472

 
518,798

Real estate – mortgage – residential (1-4 family) first mortgages
14,178

 
1,369

 
—

 
10,115

 
1,022,262

 
1,047,924

Real estate – mortgage – home equity loans / lines of credit
1,048

 
254

 
—

 
1,685

 
355,831

 
358,818

Real estate – mortgage – commercial and other
709

 
520

 
—

 
7,452

 
1,768,205

 
1,776,886

Installment loans to individuals
359

 
220

 
—

 
139

 
70,422

 
71,140

Purchased credit impaired
990

 
138

 
583

 
—

 
15,682

 
17,393

Total
$
18,324

 
2,718

 
583

 
22,575

 
4,203,565

 
4,247,765

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
 
 
1,299

Total loans
 
 
 
 
 
 
 
 
 
 
$
4,249,064


The following table presents the activity in the allowance for loan losses for all loans for the three and six months ended June 30, 2019.
($ in thousands)
Commercial,
Financial,
and
Agricultural
 
Real Estate
–
Construction,
Land
Development
& Other Land
Loans
 
Real Estate
–
Residential
(1-4 Family)
First
Mortgages
 
Real Estate
– Mortgage
– Home
Equity
Lines of
Credit
 
Real Estate
– Mortgage
–
Commercial
and Other
 
Installment
Loans to
Individuals
 
Unallocated
 
Total
As of and for the three months ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,709

 
2,284

 
4,510

 
1,374

 
8,120

 
1,006

 
92

 
21,095

Charge-offs
(690
)
 
(29
)
 
(155
)
 
(66
)
 
(2
)
 
(155
)
 
—

 
(1,097
)
Recoveries
191

 
202

 
222

 
327

 
103

 
54

 
—

 
1,099

Provisions
8

 
(642
)
 
(454
)
 
(364
)
 
631

 
306

 
207

 
(308
)
Ending balance
$
3,218

 
1,815

 
4,123

 
1,271

 
8,852

 
1,211

 
299

 
20,789

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of and for the six months ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
2,889

 
2,243

 
5,197

 
1,665

 
7,983

 
952

 
110

 
21,039

Charge-offs
(936
)
 
(293
)
 
(185
)
 
(146
)
 
(838
)
 
(436
)
 
—

 
(2,834
)
Recoveries
605

 
489

 
382

 
455

 
374

 
87

 
—

 
2,392

Provisions
660

 
(624
)
 
(1,271
)
 
(703
)
 
1,333

 
608

 
189

 
192

Ending balance
$
3,218

 
1,815

 
4,123

 
1,271

 
8,852

 
1,211

 
299

 
20,789

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance as of June 30, 2019: Allowance for loan losses
Individually evaluated for impairment
$
435

 
44

 
770

 
—

 
783

 
—

 
—

 
2,032

Collectively evaluated for impairment
$
2,776

 
1,771

 
3,289

 
1,271

 
8,013

 
1,195

 
299

 
18,614

Purchased credit impaired
$
7

 
—

 
64

 
—

 
56

 
16

 
—

 
143

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable as of June 30, 2019
Ending balance – total
$
471,188

 
456,781

 
1,090,601

 
349,355

 
1,900,188

 
69,600

 
—

 
4,337,713

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,784

Total loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,339,497

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of June 30, 2019: Loans
Individually evaluated for impairment
$
992

 
1,020

 
10,334

 
21

 
7,451

 
—

 
—

 
19,818

Collectively evaluated for impairment
$
469,932

 
455,589

 
1,074,325

 
349,124

 
1,885,294

 
69,456

 
—

 
4,303,720

Purchased credit impaired
$
264

 
172

 
5,942

 
210

 
7,443

 
144

 
—

 
14,175

The following table presents the activity in the allowance for loan losses for the year ended December 31, 2018.
($ in thousands)
Commercial,
Financial,
and
Agricultural
 
Real Estate
–
Construction,
Land
Development
& Other Land
Loans
 
Real Estate
–
Residential
(1-4 Family)
First
Mortgages
 
Real Estate
– Mortgage
– Home
Equity
Lines of
Credit
 
Real Estate
– Mortgage
–
Commercial
and Other
 
Installment
Loans to
Individuals
 
Unallocated
 
Total
As of and for the year ended December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,111

 
2,816

 
6,147

 
1,827

 
6,475

 
950

 
1,972

 
23,298

Charge-offs
(2,128
)
 
(158
)
 
(1,734
)
 
(711
)
 
(1,459
)
 
(781
)
 
—

 
(6,971
)
Recoveries
1,195

 
4,097

 
833

 
364

 
1,503

 
309

 
—

 
8,301

Provisions
711

 
(4,512
)
 
(49
)
 
185

 
1,464

 
474

 
(1,862
)
 
(3,589
)
Ending balance
$
2,889

 
2,243

 
5,197

 
1,665

 
7,983

 
952

 
110

 
21,039

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of December 31, 2018: Allowance for loan losses
Individually evaluated for impairment
$
226

 
134

 
955

 
48

 
906

 
—

 
—

 
2,269

Collectively evaluated for impairment
$
2,661

 
2,109

 
4,143

 
1,608

 
7,070

 
941

 
110

 
18,642

Purchased credit impaired
$
2

 
—

 
99

 
9

 
7

 
11

 
—

 
128

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable as of December 31, 2018:
Ending balance – total
$
457,037

 
518,976

 
1,054,176

 
359,162

 
1,787,022

 
71,392

 
—

 
4,247,765

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,299

Total loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,249,064

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of December 31, 2018: Loans
Individually evaluated for impairment
$
696

 
1,345

 
12,391

 
296

 
9,525

 
—

 
—

 
24,253

Collectively evaluated for impairment
$
456,111

 
517,453

 
1,035,532

 
358,522

 
1,767,361

 
71,140

 
—

 
4,206,119

Purchased credit impaired
$
230

 
178

 
6,253

 
344

 
10,136

 
252

 
—

 
17,393

The following table presents the activity in the allowance for loan losses for all loans for the three and six months ended June 30, 2018.
($ in thousands)
Commercial,
Financial,
and
Agricultural
 
Real Estate
–
Construction,
Land
Development,
& Other
Land Loans
 
Real Estate
–
Residential
(1-4 Family)
First
Mortgages
 
Real Estate
– Mortgage
– Home
Equity
Lines of
Credit
 
Real Estate
– Mortgage
–
Commercial
and Other
 
Installment
Loans to
Individuals
 
Unallocated
 
Total
As of and for the three months ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
2,536

 
2,317

 
5,892

 
2,266

 
5,991

 
844

 
3,452

 
23,298

Charge-offs
(370
)
 
(30
)
 
(172
)
 
(10
)
 
(271
)
 
(144
)
 
—

 
(997
)
Recoveries
313

 
341

 
371

 
90

 
542

 
50

 
—

 
1,707

Provisions
(211
)
 
64

 
968

 
(96
)
 
1,033

 
147

 
(2,615
)
 
(710
)
Ending balance
$
2,268

 
2,692

 
7,059

 
2,250

 
7,295

 
897

 
837

 
23,298

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of and for the six months ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,111

 
2,816

 
6,147

 
1,827

 
6,475

 
950

 
1,972

 
23,298

Charge-offs
(609
)
 
(32
)
 
(415
)
 
(186
)
 
(312
)
 
(262
)
 
—

 
(1,816
)
Recoveries
812

 
3,387

 
516

 
243

 
1,124

 
103

 
—

 
6,185

Provisions
(1,046
)
 
(3,479
)
 
811

 
366

 
8

 
106

 
(1,135
)
 
(4,369
)
Ending balance
$
2,268

 
2,692

 
7,059

 
2,250

 
7,295

 
897

 
837

 
23,298

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of June 30, 2018: Allowance for loan losses
Individually evaluated for impairment
$
277

 
302

 
2,756

 
415

 
1,231

 
6

 
—

 
4,987

Collectively evaluated for impairment
$
1,991

 
2,390

 
4,133

 
1,794

 
6,052

 
891

 
837

 
18,088

Purchased credit impaired
$
—

 
—

 
170

 
41

 
12

 
—

 
—

 
223

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable as of June 30, 2018
Ending balance – total
$
417,366

 
600,031

 
1,000,189

 
369,875

 
1,690,175

 
71,823

 
—

 
4,149,459

Unamortized net deferred loan fees
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(69
)
Total loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,149,390

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of June 30, 2018: Loans
Individually evaluated for impairment
$
3,208

 
3,549

 
15,247

 
671

 
10,333

 
10

 
—

 
33,018

Collectively evaluated for impairment
$
413,889

 
596,157

 
977,549

 
368,831

 
1,667,700

 
71,483

 
—

 
4,095,609

Purchased credit impaired
$
269

 
325

 
7,393

 
373

 
12,142

 
330

 
—

 
20,832


The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of June 30, 2019.
($ in thousands)
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
Impaired loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
—

 
—

 
—

 
113

Real estate – mortgage – construction, land development & other land loans
439

 
766

 
—

 
461

Real estate – mortgage – residential (1-4 family) first mortgages
4,645

 
4,972

 
—

 
4,687

Real estate – mortgage –home equity loans / lines of credit
21

 
30

 
—

 
21

Real estate – mortgage –commercial and other
3,287

 
4,276

 
—

 
3,593

Installment loans to individuals
—

 
—

 
—

 
—

Total impaired loans with no allowance
$
8,392

 
10,044

 
—

 
8,875

 
 
 
 
 
 
 
 
Impaired loans with an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
992

 
1,323

 
435

 
798

Real estate – mortgage – construction, land development & other land loans
581

 
581

 
44

 
593

Real estate – mortgage – residential (1-4 family) first mortgages
5,689

 
5,881

 
770

 
6,519

Real estate – mortgage –home equity loans / lines of credit
—

 
—

 
—

 
91

Real estate – mortgage –commercial and other
4,164

 
4,763

 
783

 
4,865

Installment loans to individuals
—

 
—

 
—

 
—

Total impaired loans with allowance
$
11,426

 
12,548

 
2,032

 
12,866

Interest income recorded on impaired loans during the six months ended June 30, 2019 was insignificant.
The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of December 31, 2018.
($ in thousands)
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
Impaired loans with no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
310

 
310

 
—

 
957

Real estate – mortgage – construction, land development & other land loans
485

 
803

 
—

 
2,366

Real estate – mortgage – residential (1-4 family) first mortgages
4,626

 
4,948

 
—

 
4,804

Real estate – mortgage –home equity loans / lines of credit
22

 
31

 
—

 
91

Real estate – mortgage –commercial and other
3,475

 
4,237

 
—

 
3,670

Installment loans to individuals
—

 
—

 
—

 
—

Total impaired loans with no allowance
$
8,918

 
10,329

 
—

 
11,888

 
 
 
 
 
 
 
 
Impaired loans with an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
386

 
387

 
226

 
422

Real estate – mortgage – construction, land development & other land loans
860

 
864

 
134

 
385

Real estate – mortgage – residential (1-4 family) first mortgages
7,765

 
7,904

 
955

 
8,963

Real estate – mortgage –home equity loans / lines of credit
274

 
275

 
48

 
184

Real estate – mortgage –commercial and other
6,050

 
6,054

 
906

 
5,911

Installment loans to individuals
—

 
—

 
—

 
2

Total impaired loans with allowance
$
15,335

 
15,484

 
2,269

 
15,867


Interest income recorded on impaired loans during the year ended December 31, 2018 was insignificant.
The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type.
The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
 
Risk Grade
Description
Pass:
 
 
 
1
Loans with virtually no risk, including cash secured loans.
 
2
Loans with documented significant overall financial strength.  These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
 
3
Loans with documented satisfactory overall financial strength.  These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
 
4
Loans to borrowers with acceptable financial condition.  These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.  
 
5
Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management.  Collateral is generally required and felt to provide reasonable coverage with realizable liquidation values in normal circumstances.  Repayment performance is satisfactory.
 
P
(Pass)
Consumer loans (<$500,000) that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels.  These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.  
Special Mention:
 
 
 
6
Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Bank.
Classified:
 
 
 
7
An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any.  These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
 
8
Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable.  Loss appears imminent, but the exact amount and timing is uncertain.
 
9
Loans that are considered uncollectible and are in the process of being charged-off.  This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
 
F
(Fail)
Consumer loans (<$500,000) with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.
The following table presents the Company’s recorded investment in loans by credit quality indicators as of June 30, 2019.
($ in thousands)
Pass
 
Special
Mention Loans
 
Classified
Accruing Loans
 
Classified
Nonaccrual
Loans
 
Total
Commercial, financial, and agricultural
$
460,804

 
7,643

 
987

 
1,490

 
470,924

Real estate – construction, land development & other land loans
447,686

 
4,680

 
2,823

 
1,420

 
456,609

Real estate – mortgage – residential (1-4 family) first mortgages
1,040,778

 
16,274

 
18,910

 
8,697

 
1,084,659

Real estate – mortgage – home equity loans / lines of credit
340,085

 
1,361

 
6,295

 
1,404

 
349,145

Real estate – mortgage – commercial and other
1,857,389

 
20,539

 
10,557

 
4,260

 
1,892,745

Installment loans to individuals
68,190

 
223

 
939

 
104

 
69,456

Purchased credit impaired
8,060

 
2,884

 
3,231

 
—

 
14,175

Total
$
4,222,992

 
53,604

 
43,742

 
17,375

 
4,337,713

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
1,784

Total loans
 
 
 
 
 
 
 
 
4,339,497

The following table presents the Company’s recorded investment in loans by credit quality indicators as of December 31, 2018.
($ in thousands)
Pass
 
Special
Mention Loans
 
Classified
Accruing Loans
 
Classified
Nonaccrual
Loans
 
Total
Commercial, financial, and agricultural
$
452,372

 
3,056

 
459

 
919

 
456,806

Real estate – construction, land development & other land loans
509,251

 
5,668

 
1,614

 
2,265

 
518,798

Real estate – mortgage – residential (1-4 family) first mortgages
1,004,458

 
12,238

 
21,113

 
10,115

 
1,047,924

Real estate – mortgage – home equity loans / lines of credit
348,792

 
1,688

 
6,653

 
1,685

 
358,818

Real estate – mortgage – commercial and other
1,750,810

 
14,484

 
4,140

 
7,452

 
1,776,886

Installment loans to individuals
70,357

 
231

 
413

 
139

 
71,140

Purchased credit impaired
8,355

 
5,214

 
3,824

 
—

 
17,393

Total
$
4,144,395

 
42,579

 
38,216

 
22,575

 
4,247,765

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
1,299

Total loans
 
 
 
 
 
 
 
 
4,249,064


Troubled Debt Restructurings
The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses.
The vast majority of the Company’s troubled debt restructurings are due to interest rate reductions combined with restructured amortization schedules. The Company does not generally grant principal forgiveness.
All loans classified as troubled debt restructurings are considered to be impaired and are evaluated as such for determination of the allowance for loan losses. The Company’s troubled debt restructurings can be classified as either nonaccrual or accruing based on the loan’s payment status. The troubled debt restructurings that are nonaccrual are reported within the nonaccrual loan totals presented previously.
The following table presents information related to loans modified in a troubled debt restructuring during the three months ended June 30, 2019 and 2018.
($ in thousands)
For the three months ended
June 30, 2019
 
For the three months ended
June 30, 2018
 
Number of
Contracts
 
Pre-
Modification
Restructured
Balances
 
Post-
Modification
Restructured
Balances
 
Number of
Contracts
 
Pre-
Modification
Restructured
Balances
 
Post-
Modification
Restructured
Balances
TDRs – Accruing
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
1

 
$
143

 
$
143

 
—

 
$
—

 
$
—

Real estate – construction, land development & other land loans
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – residential (1-4 family) first mortgages
—

 
—

 
—

 
1

 
18

 
18

Real estate – mortgage – home equity loans / lines of credit
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – commercial and other
—

 
—

 
—

 
—

 
—

 
—

Installment loans to individuals
—

 
—

 
—

 
—

 
—

 
—

TDRs – Nonaccrual
 
 
 
 
 
 
 
 


 
 
Commercial, financial, and agricultural
—

 
—

 
—

 
—

 
—

 
—

Real estate – construction, land development & other land loans
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – residential (1-4 family) first mortgages
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – home equity loans / lines of credit
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – commercial and other
—

 
—

 
—

 
—

 
—

 
—

Installment loans to individuals
—

 
—

 
—

 
—

 
—

 
—

Total TDRs arising during period
1

 
$
143

 
$
143

 
1

 
$
18

 
$
18


The following table presents information related to loans modified in a troubled debt restructuring during the six months ended June 30, 2019 and 2018.
($ in thousands)
For the six months ended
June 30, 2019
 
For the six months ended
June 30, 2018
 
Number of Contracts
 
Pre- Modification Restructured Balances
 
Post- Modification Restructured Balances
 
Number of Contracts
 
Pre- Modification Restructured Balances
 
Post- Modification Restructured Balances
TDRs – Accruing
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
1

 
$
143

 
$
143

 
—

 
$
—

 
$
—

Real estate – construction, land development & other land loans
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – residential (1-4 family) first mortgages
1

 
55

 
55

 
1

 
18

 
18

Real estate – mortgage – home equity loans / lines of credit
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – commercial and other
—

 
—

 
—

 
—

 
—

 
—

Installment loans to individuals
—

 
—

 
—

 
—

 
—

 
—

TDRs – Nonaccrual
 
 
 
 
 
 
 
 


 
 
Commercial, financial, and agricultural
—

 
—

 
—

 
—

 
—

 
—

Real estate – construction, land development & other land loans
—

 
—

 
—

 
1

 
61

 
61

Real estate – mortgage – residential (1-4 family) first mortgages
—

 
—

 
—

 
2

 
254

 
264

Real estate – mortgage – home equity loans / lines of credit
—

 
—

 
—

 
—

 
—

 
—

Real estate – mortgage – commercial and other
—

 
—

 
—

 
—

 
—

 
—

Installment loans to individuals
—

 
—

 
—

 
—

 
—

 
—

Total TDRs arising during period
2

 
$
198

 
$
198

 
4

 
$
333

 
$
343

Accruing restructured loans that were modified in the previous 12 months and that defaulted during the three months ended June 30, 2019 and 2018 are presented in the table below. The Company considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to nonaccrual status, or has been transferred to foreclosed real estate.
($ in thousands)
For the Three Months Ended June 30, 2019
 
For the Three Months Ended June 30, 2018
 
Number of
Contracts
 
Recorded
Investment
 
Number of
Contracts
 
Recorded
Investment
Accruing TDRs that subsequently defaulted
 
 
 
 
 
 
 
Real estate – mortgage – residential (1-4 family first mortgages)
—

 
$
—

 
1

 
$
60

Real estate – mortgage – commercial and other
—

 
—

 
2

 
763

Total accruing TDRs that subsequently defaulted
—

 
$
—

 
3

 
$
823


Accruing restructured loans that were modified in the previous 12 months and that defaulted during the six months ended June 30, 2019 and 2018 are presented in the table below.
($ in thousands)
For the Six Months Ended June 30, 2019
 
For the Six Months Ended June 30, 2018
 
Number of
Contracts
 
Recorded
Investment
 
Number of
Contracts
 
Recorded
Investment
Accruing TDRs that subsequently defaulted
 
 
 
 
 
 
 
Real estate – mortgage – residential (1-4 family first mortgages)
—

 
$
—

 
1

 
$
60

Real estate – mortgage – commercial and other
—

 
—

 
2

 
763

Total accruing TDRs that subsequently defaulted
—

 
$
—

 
3

 
$
823