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Loans and Asset Quality Information
 9 Months Ended
Sep. 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)
September 30, 2019
 
December 31, 2018
 
Amount
 
Percentage
 
Amount
 
Percentage
All  loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
486,768

 
11
%
 
$
457,037

 
11
%
Real estate – construction, land development & other land loans
471,326

 
11
%
 
518,976

 
12
%
Real estate – mortgage – residential (1-4 family) first mortgages
1,093,619

 
25
%
 
1,054,176

 
25
%
Real estate – mortgage – home equity loans / lines of credit
343,378

 
8
%
 
359,162

 
8
%
Real estate – mortgage – commercial and other
1,928,931

 
44
%
 
1,787,022

 
42
%
Installment loans to individuals
70,962

 
1
%
 
71,392

 
2
%
Subtotal
4,394,984

 
100
%
 
4,247,765

 
100
%
Unamortized net deferred loan costs
1,560

 
 
 
1,299

 
 
Total loans
$
4,396,544

 
 
 
$
4,249,064

 
 


Included in the table above are the following amounts of SBA loans:
($ in thousands)
September 30,
2019
 
December 31,
2018
Guaranteed portions of SBA Loans included in table above
$
47,280


53,205

Unguaranteed portions of SBA Loans included in table above
112,976


97,572

Total SBA loans included in the table above
$
160,256


150,777

 





Sold portions of SBA loans with servicing retained - not included in table above
$
308,842


230,424


At September 30, 2019 and December 31, 2018, there was a remaining unaccreted discount on the retained portion of sold SBA loans amounting to $7.2 million and $5.7 million, respectively. As of September 30, 2019 and December 31, 2018, there was a remaining accretable discount of $12.1 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 Nine Months Ended September 30, 2019
 
For the Year Ended September 30,
2018
Balance at beginning of period
$
17,393

 
23,165

Change due to payments received and accretion
(3,694
)
 
(2,994
)
Change due to loan charge-offs
(11
)
 
—

Transfers to foreclosed real estate
—

 
(10
)
Other
110

 
28

Balance at end of period
$
13,798

 
20,189

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

 
4,688

Accretion
(1,050
)
 
(1,169
)
Reclassification from (to) nonaccretable difference
583

 
712

Other, net
211

 
831

Balance at end of period
$
4,494

 
5,062


During the first nine months of 2019, the Company received $291,000 in payments that exceeded the carrying amount of the related PCI loans, of which $263,000 was recognized as loan discount accretion income and $28,000 was recorded as additional loan interest income. During the first nine months of 2018, the Company received $225,000 in payments that exceeded the carrying amount of the related PCI loans, of which $184,000 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)
September 30,
2019

December 31,
2018
Nonperforming assets
 


 

Nonaccrual loans
$
19,720


22,575

TDRs- accruing
9,566


13,418

Accruing loans > 90 days past due
—


—

Total nonperforming loans
29,286


35,993

Foreclosed real estate
4,589


7,440

Total nonperforming assets
$
33,875


43,433







Purchased credit impaired loans not included above (1)
$
13,798


17,393







(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 $1.1 million and $0.6 million in PCI loans at September 30, 2019 and December 31, 2018, respectively, that were contractually past due 90 days or more.
At September 30, 2019 and December 31, 2018, the Company had $1.0 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)
September 30,
2019
 
December 31,
2018
Commercial, financial, and agricultural
$
2,472

 
919

Real estate – construction, land development & other land loans
1,235

 
2,265

Real estate – mortgage – residential (1-4 family) first mortgages
7,661

 
10,115

Real estate – mortgage – home equity loans / lines of credit
1,878

 
1,685

Real estate – mortgage – commercial and other
6,370

 
7,452

Installment loans to individuals
104

 
139

Total
$
19,720

 
22,575


The following table presents an analysis of the payment status of the Company’s loans as of September 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
$
5,995

 
95

 
—

 
2,472

 
477,964

 
486,526

Real estate – construction, land development & other land loans
803

 
—

 
—

 
1,235

 
469,119

 
471,157

Real estate – mortgage – residential (1-4 family) first mortgages
2,392

 
1,185

 
—

 
7,661

 
1,076,708

 
1,087,946

Real estate – mortgage – home equity loans / lines of credit
712

 
399

 
—

 
1,878

 
340,180

 
343,169

Real estate – mortgage – commercial and other
3,376

 
121

 
—

 
6,370

 
1,911,677

 
1,921,544

Installment loans to individuals
299

 
46

 
—

 
104

 
70,395

 
70,844

Purchased credit impaired
6

 
390

 
1,065

 
—

 
12,337

 
13,798

Total
$
13,583

 
2,236

 
1,065

 
19,720

 
4,358,380

 
4,394,984

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
 
 
1,560

Total loans
 
 
 
 
 
 
 
 
 
 
$
4,396,544

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 nine months ended September 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 September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,218

 
1,815

 
4,123

 
1,271

 
8,852

 
1,211

 
299

 
20,789

Charge-offs
(288
)
 
(47
)
 
(194
)
 
(70
)
 
(617
)
 
(119
)
 
—

 
(1,335
)
Recoveries
163

 
308

 
139

 
58

 
176

 
67

 
—

 
911

Provisions
(226
)
 
(270
)
 
(112
)
 
(122
)
 
(199
)
 
(141
)
 
(35
)
 
(1,105
)
Ending balance
$
2,867

 
1,806

 
3,956

 
1,137

 
8,212

 
1,018

 
264

 
19,260

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of and for the nine months ended September 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
2,889

 
2,243

 
5,197

 
1,665

 
7,983

 
952

 
110

 
21,039

Charge-offs
(1,224
)
 
(340
)
 
(379
)
 
(216
)
 
(1,455
)
 
(555
)
 
—

 
(4,169
)
Recoveries
768

 
797

 
521

 
513

 
550

 
154

 
—

 
3,303

Provisions
434

 
(894
)
 
(1,383
)
 
(825
)
 
1,134

 
467

 
154

 
(913
)
Ending balance
$
2,867

 
1,806

 
3,956

 
1,137

 
8,212

 
1,018

 
264

 
19,260

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance as of September 30, 2019: Allowance for loan losses
Individually evaluated for impairment
$
168

 
45

 
828

 
—

 
230

 
—

 
—

 
1,271

Collectively evaluated for impairment
$
2,657

 
1,761

 
3,060

 
1,137

 
7,925

 
1,005

 
264

 
17,809

Purchased credit impaired
$
42

 
—

 
68

 
—

 
57

 
13

 
—

 
180

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable as of September 30, 2019
Ending balance – total
$
486,768

 
471,326

 
1,093,619

 
343,378

 
1,928,931

 
70,962

 
—

 
4,394,984

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
 
 
 
 
 
 
1,560

Total loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
$
4,396,544

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of September 30, 2019: Loans
Individually evaluated for impairment
$
1,090

 
804

 
9,942

 
338

 
6,941

 
—

 
—

 
19,115

Collectively evaluated for impairment
$
485,436

 
470,353

 
1,078,004

 
342,831

 
1,914,603

 
70,844

 
—

 
4,362,071

Purchased credit impaired
$
242

 
169

 
5,673

 
209

 
7,387

 
118

 
—

 
13,798

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 nine months ended September 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 September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
2,268

 
2,692

 
7,059

 
2,250

 
7,295

 
897

 
837

 
23,298

Charge-offs
(933
)
 
(126
)
 
(1,183
)
 
(192
)
 
(1,086
)
 
(232
)
 
—

 
(3,752
)
Recoveries
159

 
181

 
155

 
51

 
209

 
158

 
—

 
913

Provisions
1,221

 
(366
)
 
(664
)
 
(330
)
 
753

 
79

 
(606
)
 
87

Ending balance
$
2,715

 
2,381

 
5,367

 
1,779

 
7,171

 
902

 
231

 
20,546

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of and for the nine months ended September 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
3,111

 
2,816

 
6,147

 
1,827

 
6,475

 
950

 
1,972

 
23,298

Charge-offs
(1,542
)
 
(158
)
 
(1,598
)
 
(378
)
 
(1,398
)
 
(494
)
 
—

 
(5,568
)
Recoveries
971

 
3,568

 
671

 
294

 
1,333

 
261

 
—

 
7,098

Provisions
175

 
(3,845
)
 
147

 
36

 
761

 
185

 
(1,741
)
 
(4,282
)
Ending balance
$
2,715

 
2,381

 
5,367

 
1,779

 
7,171

 
902

 
231

 
20,546

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of September 30, 2018: Allowance for loan losses
Individually evaluated for impairment
$
126

 
—

 
1,004

 
—

 
502

 
—

 
—

 
1,632

Collectively evaluated for impairment
$
2,585

 
2,335

 
4,306

 
1,765

 
6,662

 
887

 
231

 
18,771

Purchased credit impaired
$
4

 
46

 
57

 
14

 
7

 
15

 
—

 
143

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans receivable as of September 30, 2018
Ending balance – total
$
435,730

 
559,450

 
1,038,436

 
362,829

 
1,723,598

 
70,096

 
—

 
4,190,139

Unamortized net deferred loan fees
 
 
 
 
 
 
 
 
 
 
 
 
 
 
489

Total loans
 
 
 
 
 
 
 
 
 
 
 
 
 
 
4,190,628

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balances as of September 30, 2018: Loans
Individually evaluated for impairment
$
1,981

 
2,642

 
12,617

 
22

 
10,490

 
—

 
—

 
27,752

Collectively evaluated for impairment
$
433,485

 
556,283

 
1,019,645

 
362,462

 
1,700,519

 
69,804

 
—

 
4,142,198

Purchased credit impaired
$
264

 
525

 
6,174

 
345

 
12,589

 
292

 
—

 
20,189


The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of September 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
$
18

 
20

 
—

 
89

Real estate – mortgage – construction, land development & other land loans
227

 
263

 
—

 
403

Real estate – mortgage – residential (1-4 family) first mortgages
3,713

 
3,951

 
—

 
4,443

Real estate – mortgage –home equity loans / lines of credit
338

 
358

 
—

 
100

Real estate – mortgage –commercial and other
2,781

 
3,758

 
—

 
3,390

Installment loans to individuals
—

 
—

 
—

 
—

Total impaired loans with no allowance
$
7,077

 
8,350

 
—

 
8,425

 
 
 
 
 
 
 
 
Impaired loans with an allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial, and agricultural
$
1,072

 
1,125

 
168

 
866

Real estate – mortgage – construction, land development & other land loans
577

 
577

 
45

 
589

Real estate – mortgage – residential (1-4 family) first mortgages
6,229

 
6,466

 
828

 
6,446

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

 
—

 
—

 
69

Real estate – mortgage –commercial and other
4,160

 
4,795

 
230

 
4,689

Installment loans to individuals
—

 
—

 
—

 
—

Total impaired loans with allowance
$
12,038

 
12,963

 
1,271

 
12,659

Interest income recorded on impaired loans during the nine months ended September 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 (<$500,000) with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.
The following table presents the Company’s recorded investment in loans by credit quality indicators as of September 30, 2019.
($ in thousands)
Pass
 
Special
Mention Loans
 
Classified
Accruing Loans
 
Classified
Nonaccrual
Loans
 
Total
Commercial, financial, and agricultural
$
471,225

 
7,735

 
5,094

 
2,472

 
486,526

Real estate – construction, land development & other land loans
463,122

 
4,640

 
2,160

 
1,235

 
471,157

Real estate – mortgage – residential (1-4 family) first mortgages
1,047,592

 
15,193

 
17,500

 
7,661

 
1,087,946

Real estate – mortgage – home equity loans / lines of credit
334,054

 
1,267

 
5,970

 
1,878

 
343,169

Real estate – mortgage – commercial and other
1,888,049

 
20,081

 
7,044

 
6,370

 
1,921,544

Installment loans to individuals
70,122

 
218

 
400

 
104

 
70,844

Purchased credit impaired
8,279

 
2,797

 
2,722

 
—

 
13,798

Total
$
4,282,443

 
51,931

 
40,890

 
19,720

 
4,394,984

Unamortized net deferred loan costs
 
 
 
 
 
 
 
 
1,560

Total loans
 
 
 
 
 
 
 
 
4,396,544

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 September 30, 2019 and 2018.
($ in thousands)
For the three months ended
September 30, 2019
 
For the three months ended
September 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
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

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

 
—

 
—

 
—

 
—

 
—

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

 
133

 
133

 
—

 
—

 
—

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

 
$
133

 
$
133

 
—

 
$
—

 
$
—


The following table presents information related to loans modified in a troubled debt restructuring during the nine months ended September 30, 2019 and 2018.
($ in thousands)
For the nine months ended
September 30, 2019
 
For the nine months ended
September 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
3

 
387

 
391

 
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
4

 
$
530

 
$
534

 
4

 
$
333

 
$
343

Accruing restructured loans that were modified in the previous 12 months and that defaulted during the three months ended September 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.
Accruing restructured loans that were modified in the previous 12 months and that defaulted during the nine months ended September 30, 2019 and 2018 are presented in the table below.
($ in thousands)
For the Nine Months Ended September 30, 2019
 
For the Nine Months Ended September 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

 
$
93

 
1

 
$
60

Real estate – mortgage – commercial and other
—

 
—

 
3

 
1,333

Total accruing TDRs that subsequently defaulted
1

 
$
93

 
4

 
$
1,393



There were no accruing restructured loans that were modified in the previous 12 months and defaulted during the three months ended September 30, 2019 or 2018.