Loans and Allowance for Credit Losses

The following table provides outstanding balances related to each of our loan types:



	September 30, 2018						December 31, 2017
	Originated		Acquired		Total		Originated		Acquired		Total
	(dollars in thousands)
Commercial, financial, agricultural and other	$	1,079,537	$	36,667	$	1,116,204	$	1,122,741	$	40,642	$	1,163,383
Real estate construction	291,645		6,750		298,395		242,905		5,963		248,868
Residential real estate	1,277,427		255,911		1,533,338		1,206,119		220,251		1,426,370
Commercial real estate	1,929,219		207,212		2,136,431		1,892,185		126,911		2,019,096
Loans to individuals	572,696		5,718		578,414		543,411		6,248		549,659
Total loans	$	5,150,524	$	512,258	$	5,662,782	$	5,007,361	$	400,015	$	5,407,376

Credit Quality Information

As part of the on-going monitoring of credit quality within the loan portfolio, the following credit worthiness categories are used in grading our loans:



Pass		Acceptable levels of risk exist in the relationship. Includes all loans not classified as OAEM, substandard or doubtful.



Other Assets Especially Mentioned (OAEM)		Potential weaknesses that deserve management’s close attention. The potential weaknesses may result in deterioration of the repayment prospects or weaken the Company’s credit position at some future date. The credit risk may be relatively minor, yet constitute an undesirable risk in light of the circumstances surrounding the specific credit. No loss of principal or interest is expected.



Substandard		Well-defined weakness or a weakness that jeopardizes the repayment of the debt. A loan may be classified as substandard as a result of deterioration of the borrower’s financial condition and repayment capacity. Loans for which repayment plans have not been met or collateral equity margins do not protect the Company may also be classified as substandard.



Doubtful		Loans with the characteristics of substandard loans with the added characteristic that collection or liquidation in full, on the basis of presently existing facts and conditions, is highly improbable.

The use of creditworthiness categories to grade loans permits management’s use of migration analysis to estimate a portion of credit risk. The Company’s internal creditworthiness grading system provides a measurement of credit risk based primarily on an evaluation of the borrower’s cash flow and collateral. Movement between these rating categories provides a predictive measure of credit losses and therefore assists in determining the appropriate level for the loan loss reserves. Category ratings are reviewed each quarter, at which time management analyzes the results, as well as other external statistics and factors related to loan performance. Loans that migrate towards higher risk rating levels generally have an increased risk of default, whereas loans that migrate toward lower risk ratings generally will result in a lower risk factor being applied to those related loan balances.

The following tables represent our credit risk profile by creditworthiness:



	September 30, 2018
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Originated loans
Pass	$	1,023,855	$	282,713	$	1,266,805	$	1,876,336	$	572,504	$	5,022,213
Non-Pass
OAEM	40,624		8,932		1,135		32,825		—		83,516
Substandard	10,740		—		9,487		20,058		192		40,477
Doubtful	4,318		—		—		—		—		4,318
Total Non-Pass	55,682		8,932		10,622		52,883		192		128,311
Total	$	1,079,537	$	291,645	$	1,277,427	$	1,929,219	$	572,696	$	5,150,524

Acquired loans
Pass	$	30,328	$	6,104	$	252,769	$	204,074	$	5,703	$	498,978
Non-Pass
OAEM	6,238		646		652		460		—		7,996
Substandard	101		—		2,490		2,678		15		5,284
Doubtful	—		—		—		—		—		—
Total Non-Pass	6,339		646		3,142		3,138		15		13,280
Total	$	36,667	$	6,750	$	255,911	$	207,212	$	5,718	$	512,258



	December 31, 2017
	Commercial, financial, agricultural and other		Real estate construction		Residential real estate		Commercial real estate		Loans to individuals		Total
	(dollars in thousands)
Originated loans
Pass	$	1,061,147	$	242,905	$	1,194,352	$	1,855,253	$	543,175	$	4,896,832
Non-Pass
OAEM	26,757		—		1,435		13,326		—		41,518
Substandard	30,431		—		10,332		23,606		236		64,605
Doubtful	4,406		—		—		—		—		4,406
Total Non-Pass	61,594		—		11,767		36,932		236		110,529
Total	$	1,122,741	$	242,905	$	1,206,119	$	1,892,185	$	543,411	$	5,007,361

Acquired loans
Pass	$	34,573	$	5,963	$	217,824	$	121,536	$	6,231	$	386,127
Non-Pass
OAEM	5,567		—		798		3,517		—		9,882
Substandard	502		—		1,629		1,858		17		4,006
Doubtful	—		—		—		—		—		—
Total Non-Pass	6,069		—		2,427		5,375		17		13,888
Total	$	40,642	$	5,963	$	220,251	$	126,911	$	6,248	$	400,015

Portfolio Risks

The credit quality of our loan portfolio can potentially represent significant risk to our earnings, capital and liquidity. First Commonwealth devotes substantial resources to managing this risk primarily through our credit administration department that develops and administers policies and procedures for underwriting, maintaining, monitoring and collecting loans. Credit administration is independent of our lending departments and oversight is provided by the credit committee of the First Commonwealth Board of Directors.

Criticized loans have been evaluated when determining the appropriateness of the allowance for credit losses, which we believe is adequate to absorb losses inherent to the portfolio as of September 30, 2018. However, changes in economic conditions, interest rates, borrower financial condition, delinquency trends or previously established fair values of collateral factors could significantly change those judgmental estimates.

Age Analysis of Past Due Loans by Segment

The following tables delineate the aging analysis of the recorded investments in past due loans as of September 30, 2018 and December 31, 2017. Also included in these tables are loans that are 90 days or more past due and still accruing because they are well-secured and in the process of collection.



	September 30, 2018
	30 - 59 days past due		60 - 89 days past due		90 days and greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Originated loans
Commercial, financial, agricultural and other	$	340	$	—	$	66	$	11,506	$	11,912	$	1,067,625	$	1,079,537
Real estate construction	—		—		—		—		—		291,645		291,645
Residential real estate	2,994		1,084		486		5,890		10,454		1,266,973		1,277,427
Commercial real estate	1,351		383		270		9,805		11,809		1,917,410		1,929,219
Loans to individuals	2,204		644		573		193		3,614		569,082		572,696
Total	$	6,889	$	2,111	$	1,395	$	27,394	$	37,789	$	5,112,735	$	5,150,524

Acquired loans
Commercial, financial, agricultural and other	$	—	$	—	$	20	$	73	$	93	$	36,574	$	36,667
Real estate construction	1,126		—		—		—		1,126		5,624		6,750
Residential real estate	391		95		191		2,395		3,072		252,839		255,911
Commercial real estate	43		—		—		1,920		1,963		205,249		207,212
Loans to individuals	25		22		41		15		103		5,615		5,718
Total	$	1,585	$	117	$	252	$	4,403	$	6,357	$	505,901	$	512,258



	December 31, 2017
	30 - 59 days past due		60 - 89 days past due		90 days and greater and still accruing		Nonaccrual		Total past due and nonaccrual		Current		Total
	(dollars in thousands)
Originated loans
Commercial, financial, agricultural and other	$	378	$	61	$	40	$	18,741	$	19,220	$	1,103,521	$	1,122,741
Real estate construction	199		—		—		—		199		242,706		242,905
Residential real estate	4,618		1,025		1,076		6,225		12,944		1,193,175		1,206,119
Commercial real estate	2,198		28		6		3,240		5,472		1,886,713		1,892,185
Loans to individuals	1,899		769		623		236		3,527		539,884		543,411
Total	$	9,292	$	1,883	$	1,745	$	28,442	$	41,362	$	4,965,999	$	5,007,361

Acquired loans
Commercial, financial, agricultural and other	$	6	$	7	$	—	$	436	$	449	$	40,193	$	40,642
Real estate construction	—		—		—		—		—		5,963		5,963
Residential real estate	148		9		83		705		945		219,306		220,251
Commercial real estate	—		—		—		1,077		1,077		125,834		126,911
Loans to individuals	36		20		26		17		99		6,149		6,248
Total	$	190	$	36	$	109	$	2,235	$	2,570	$	397,445	$	400,015

Nonaccrual Loans

The previous tables summarize nonaccrual loans by loan segment. The Company generally places loans on nonaccrual status when the full and timely collection of interest or principal becomes uncertain, when part of the principal balance has been charged off and no restructuring has occurred, or the loans reach a certain number of days past due. Generally, loans 90 days or more past due are placed on nonaccrual status, except for consumer loans, which are placed on nonaccrual status at 150 days past due.

When a loan is placed on nonaccrual, the accrued unpaid interest receivable is reversed against interest income and all future payments received are applied as a reduction to the loan principal. Generally, the loan is returned to accrual status when (a) all delinquent interest and principal becomes current under the terms of the loan agreement or (b) the loan is both well-secured and in the process of collection and collectability is no longer in doubt.

Impaired Loans

Management considers loans to be impaired when, based on current information and events, it is determined that the Company will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Determination of impairment is treated the same across all loan categories. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole source for repayment of the loan is the operation or liquidation of collateral. When the loan is collateral dependent, the appraised value less estimated cost to sell is utilized. If management determines the value of the impaired loan is less than the recorded investment in the loan, impairment is recognized through an allowance estimate or a charge-off to the allowance. Troubled debt restructured loans on accrual status are also considered to be impaired loans.

When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on nonaccrual status, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on nonaccrual status, contractual interest is credited to interest income when received under the cash basis method.

At September 30, 2018 and December 31, 2017, there were no nonaccrual loans held for sale. During the nine months ended, September 30, 2018, a gain of $1.2 million was recognized on the sale of an impaired commercial, financial, agricultural and other relationship. There were $21 thousand in gains recognized in the same period in 2017 on the sale of an impaired commercial, financial, agricultural and other loan.

The following tables include the recorded investment and unpaid principal balance for impaired loans with the associated allowance amount, if applicable, as of September 30, 2018 and December 31, 2017. Also presented are the average recorded investment in impaired loans and the related amount of interest recognized while the loan was considered impaired. Average balances are calculated using month-end balances of the loans for the period reported and are included in the table below based on their period-end allowance position.



	September 30, 2018						December 31, 2017
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
Originated loans:
With no related allowance recorded:
Commercial, financial, agricultural and other	$	3,177	$	9,585			$	5,548	$	12,153
Real estate construction	—		—				—		—
Residential real estate	10,302		12,163				10,625		12,470
Commercial real estate	4,951		7,559				5,155		5,489
Loans to individuals	287		414				347		383
Subtotal	18,717		29,721				21,675		30,495
With an allowance recorded:
Commercial, financial, agricultural and other	9,998		10,219		$	3,474	16,866		21,094		$	3,478
Real estate construction	—		—		—		—		—		—
Residential real estate	596		602		167		456		478		107
Commercial real estate	6,094		6,161		1,722		954		954		128
Loans to individuals	—		—		—		—		—		—
Subtotal	16,688		16,982		5,363		18,276		22,526		3,713
Total	$	35,405	$	46,703	$	5,363	$	39,951	$	53,021	$	3,713



	September 30, 2018						December 31, 2017
	Recorded investment		Unpaid principal balance		Related allowance		Recorded investment		Unpaid principal balance		Related allowance
	(dollars in thousands)
Acquired loans
With no related allowance recorded:
Commercial, financial, agricultural and other	$	73	$	73			$	436	$	449
Real estate construction	—		—				—		—
Residential real estate	2,436		3,006				666		965
Commercial real estate	1,920		2,919				940		1,842
Loans to individuals	15		17				17		17
Subtotal	4,444		6,015				2,059		3,273
With an allowance recorded:
Commercial, financial, agricultural and other	—		—		$	—	—		—		$	—
Real estate construction	—		—		—		—		—		—
Residential real estate	—		—		—		93		122		4
Commercial real estate	—		—		—		137		150		29
Loans to individuals	—		—		—		—		—		—
Subtotal	—		—		—		230		272		33
Total	$	4,444	$	6,015	$	—	$	2,289	$	3,545	$	33



	For the Nine Months Ended September 30,
	2018								2017
	Originated Loans				Acquired Loans				Originated Loans				Acquired Loans
	Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized		Average recorded investment		Interest income recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	17,838	$	576	$	261	$	10	$	11,627	$	142	$	48	$	1
Real estate construction	—		—		—		—		—		—		33		—
Residential real estate	10,639		191		1,779		3		11,417		245		487		—
Commercial real estate	7,632		146		1,558		—		6,439		522		2,076		—
Loans to individuals	322		6		16		—		350		16		2		—
Subtotal	36,431		919		3,614		13		29,833		925		2,646		1
With an allowance recorded:
Commercial, financial, agricultural and other	5,979		16		—		—		8,984		77		316		—
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	532		11		—		—		266		—		68		—
Commercial real estate	1,787		3		—		—		354		14		159		—
Loans to individuals	—		—		—		—		—		—		—		—
Subtotal	8,298		30		—		—		9,604		91		543		—
Total	$	44,729	$	949	$	3,614	$	13	$	39,437	$	1,016	$	3,189	$	1



	For the Three Months Ended September 30,
	2018								2017
	Originated Loans				Acquired Loans				Originated Loans				Acquired Loans
	Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized		Average recorded investment		Interest Income Recognized
	(dollars in thousands)
With no related allowance recorded:
Commercial, financial, agricultural and other	$	5,697	$	8	$	73	$	10	$	7,106	$	62	$	72	$	1
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	10,627		59		2,541		2		11,217		82		653		—
Commercial real estate	6,810		59		1,955		—		5,928		452		3,078		—
Loans to individuals	320		2		16		—		366		5		6		—
Subtotal	23,454		128		4,585		12		24,617		601		3,809		1
With an allowance recorded:
Commercial, financial, agricultural and other	10,298		4		—		—		8,510		32		786		—
Real estate construction	—		—		—		—		—		—		—		—
Residential real estate	565		2		—		—		377		—		95		—
Commercial real estate	4,342		1		—		—		315		4		154		—
Loans to individuals	—		—		—		—		—		—		—		—
Subtotal	15,205		7		—		—		9,202		36		1,035		—
Total	$	38,659	$	135	$	4,585	$	12	$	33,819	$	637	$	4,844	$	1

Unfunded commitments related to nonperforming loans were $1.5 million at September 30, 2018 and $2.4 million at December 31, 2017. After consideration of the requirements to draw and available collateral related to these commitments, a reserve of $12 thousand and $0.2 million was established for these off balance sheet exposures at September 30, 2018 and December 31, 2017, respectively.

Troubled debt restructured loans are those loans whose terms have been renegotiated to provide a reduction or deferral of principal or interest as a result of the financial difficulties experienced by the borrower, who could not obtain comparable terms from alternate financing sources.

The following table provides detail as to the total troubled debt restructured loans and total commitments outstanding on troubled debt restructured loans:



	September 30, 2018		December 31, 2017
	(dollars in thousands)
Troubled debt restructured loans
Accrual status	$	8,052	$	11,563
Nonaccrual status	13,876		11,222
Total	$	21,928	$	22,785
Commitments
Letters of credit	$	60	$	60
Unused lines of credit	895		54
Total	$	955	$	114

The following tables provide detail, including specific reserves and reasons for modification, related to loans identified as troubled debt restructurings:



	For the Nine Months Ended September 30, 2018
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	3	$	74	$	—	$	8,250	$	8,324	$	7,393	$	2,811
Residential real estate	24	85		145		959		1,189		1,108		—
Commercial real estate	2	—		—		966		966		943		—
Loans to individuals	13	—		77		44		121		103		—
Total	42	$	159	$	222	$	10,219	$	10,600	$	9,547	$	2,811



	For the Nine Months Ended September 30, 2017
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	6	$	6,768	$	1,786	$	47	$	8,601	$	6,307	$	669
Residential real estate	15	129		204		513		846		777		2
Commercial real estate	4	179		—		111		290		280		—
Loans to individuals	8	—		17		60		77		62		—
Total	33	$	7,076	$	2,007	$	731	$	9,814	$	7,426	$	671

The troubled debt restructurings included in the above tables are also included in the impaired loan tables provided earlier in this note. Loans defined as modified due to a change in rate may include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For the nine months ended September 30, 2018 and 2017, $0.2 million and $0.3 million, respectively, of total rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. For both 2018 and 2017 the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

The following tables provide detail, including specific reserves and reasons for modification, related to loans identified as troubled debt restructurings:



	For the Three Months Ended September 30, 2018
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	1	$	74	$	—	$	—	$	74	$	74	$	—
Residential real estate	7	65		70		230		365		338		—
Loans to individuals	6	—		26		17		43		40		—
Total	14	$	139	$	96	$	247	$	482	$	452	$	—



	For the Three Months Ended, September 30, 2017
		Type of Modification
	Number of Contracts	Extend Maturity		Modify Rate		Modify Payments		Total Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Specific Reserve
	(dollars in thousands)
Commercial, financial, agricultural and other	1	$	—	$	—	$	47	$	47	$	47	$	—
Residential real estate	4	—		17		100		117		106		—
Commercial real estate	1	—		—		27		27		25		—
Loans to individuals	1	—		—		12		12		11		—
Total	7	$	—	$	17	$	186	$	203	$	189	$	—

The troubled debt restructurings included in the above tables are also included in the impaired loan tables provided earlier in this note. Loans defined as modified due to a change in rate may include loans that were modified for a change in rate as well as a re-amortization of the principal and an extension of the maturity. For the three months ended September 30, 2018 and 2017, $96 thousand and $17 thousand, respectively, of total rate modifications represent loans with modifications to the rate as well as payment as a result of re-amortization. For both 2018 and 2017 the changes in loan balances between the pre-modification balance and the post-modification balance are due to customer payments.

A troubled debt restructuring is considered to be in default when a restructured loan is 90 days or more past due. The following table provides information related to loans that were restructured within the past twelve months and that were considered to be in default during the nine months ended September 30:



	2018			2017
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(dollars in thousands)
Commercial, financial, agricultural and other	1	$	272	—	$	—
Residential real estate	1	$	49	1	$	9
Loans to individuals	1	8		1	2
Total	3	$	329	2	$	11

The following table provides information related to loans that were restructured within the past twelve months and that were considered to be in default during the three months ended September 30:



	2018			2017
	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
	(dollars in thousands)
Residential real estate	1	$	49	—	$	—
Loans to individuals	1	$	8	1	$	2
Total	2	$	57	1	$	2

The following tables provide detail related to the allowance for credit losses:



	For the Nine Months Ended September 30, 2018
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	23,418		$	1,349		$	2,753		$	17,328		$	3,404		$	48,252
Charge-offs	(3,443		)	—			(949		)	(2,411		)	(3,321		)	(10,124		)
Recoveries	671			93			222			123			460			1,569
Provision (credit)	1,343			150			1,584			4,623			3,274			10,974
Ending balance	21,989			1,592			3,610			19,663			3,817			50,671
Acquired loans:
Beginning balance	11			—			6			29			—			46
Charge-offs	(93		)	—			(57		)	—			(15		)	(165		)
Recoveries	31			6			75			—			24			136
Provision (credit)	71			(6		)	23			(21		)	(9		)	58
Ending balance	20			—			47			8			—			75
Total ending balance	$	22,009		$	1,592		$	3,657		$	19,671		$	3,817		$	50,746
Ending balance: individually evaluated for impairment	$	3,474		$	—		$	167		$	1,722		$	—		$	5,363
Ending balance: collectively evaluated for impairment	18,535			1,592			3,490			17,949			3,817			45,383
Loans:
Ending balance	1,116,204			298,395			1,533,338			2,136,431			578,414			5,662,782
Ending balance: individually evaluated for impairment	12,864			—			4,522			12,012			—			29,398
Ending balance: collectively evaluated for impairment	1,103,340			298,395			1,528,816			2,124,419			578,414			5,633,384



	For the Nine Months Ended September 30, 2017
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	35,974		$	577		$	2,492		$	6,619		$	4,504		$	50,166
Charge-offs	(5,776		)	—			(954		)	(95		)	(3,185		)	(10,010		)
Recoveries	3,819			465			259			206			355			5,104
Provision (credit)	(11,353		)	299			1,095			10,593			1,752			2,386
Ending balance	22,664			1,341			2,892			17,323			3,426			47,646
Acquired loans:
Beginning balance	—			—			19			—			—			19
Charge-offs	—			—			(26		)	—			(17		)	(43		)
Recoveries	1			5			45			4			51			106
Provision (credit)	479			(5		)	(32		)	40			(34		)	448
Ending balance	480			—			6			44			—			530
Total ending balance	$	23,144		$	1,341		$	2,898		$	17,367		$	3,426		$	48,176
Ending balance: individually evaluated for impairment	$	1,818		$	—		$	102		$	261		$	—		$	2,181
Ending balance: collectively evaluated for impairment	21,326			1,341			2,796			17,106			3,426			45,995
Loans:
Ending balance	1,154,225			259,129			1,423,422			1,990,264			548,807			5,375,847
Ending balance: individually evaluated for impairment	15,995			—			7,142			8,189			—			31,326
Ending balance: collectively evaluated for impairment	1,138,230			259,129			1,416,280			1,982,075			548,807			5,344,521



	For the Three Months Ended September 30, 2018
	Commercial, financial, agricultural and other			Real estate construction		Residential real estate			Commercial real estate		Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	25,082		$	1,262	$	3,556		$	17,731	$	3,527		$	51,158
Charge-offs	(2,582		)	—		(268		)	—		(1,076		)	(3,926		)
Recoveries	53			92		26			36		153			360
Provision (credit)	(564		)	238		296			1,896		1,213			3,079
Ending balance	21,989			1,592		3,610			19,663		3,817			50,671
Acquired loans:
Beginning balance	23			—		127			6		—			156
Charge-offs	—			—		(9		)	—		(4		)	(13		)
Recoveries	13			—		25			—		12			50
Provision (credit)	(16		)	—		(96		)	2		(8		)	(118		)
Ending balance	20			—		47			8		—			75
Total ending balance	$	22,009		$	1,592	$	3,657		$	19,671	$	3,817		$	50,746




	For the Three Months Ended, September 30, 2017
	Commercial, financial, agricultural and other			Real estate construction			Residential real estate			Commercial real estate			Loans to individuals			Total
	(dollars in thousands)
Allowance for credit losses:
Originated loans:
Beginning balance	$	33,372		$	768		$	2,116		$	7,307		$	4,332		$	47,895
Charge-offs	(499		)	—			(344		)	(35		)	(1,015		)	(1,893		)
Recoveries	183			369			67			60			107			786
Provision (credit)	(10,392		)	204			1,053			9,991			2			858
Ending balance	22,664			1,341			2,892			17,323			3,426			47,646
Acquired loans:
Beginning balance	118			—			4			50			—			172
Charge-offs	—			—			(17		)	—			(9		)	(26		)
Recoveries	1			4			18			—			5			28
Provision (credit)	361			(4		)	1			(6		)	4			356
Ending balance	480			—			6			44			—			530
Total ending balance	$	23,144		$	1,341		$	2,898		$	17,367		$	3,426		$	48,176