Loans

The composition of the loan portfolio, by class of loan, as of September 30, 2016 and December 31, 2015 was as follows:



	September 30, 2016						December 31, 2015
(In thousands)	Loan Balance		Accrued Interest Receivable		Recorded Investment		Loan Balance		Accrued Interest Receivable		Recorded Investment
Commercial, financial and agricultural *	$	958,029	$	3,786	$	961,815	$	955,727	$	3,437	$	959,164
Commercial real estate *	1,141,002		4,268		1,145,270		1,113,603		4,009		1,117,612
Construction real estate:
SEPH commercial land and development	1,700		—		1,700		2,044		—		2,044
Remaining commercial	136,883		316		137,199		128,046		321		128,367
Mortgage	41,848		88		41,936		36,722		75		36,797
Installment	5,544		18		5,562		6,533		21		6,554
Residential real estate:
Commercial	408,372		925		409,297		410,571		1,014		411,585
Mortgage	1,189,232		1,382		1,190,614		1,210,819		1,469		1,212,288
HELOC	212,968		788		213,756		211,415		769		212,184
Installment	19,481		65		19,546		22,638		78		22,716
Consumer	1,068,343		2,884		1,071,227		967,111		3,032		970,143
Leases	3,602		55		3,657		2,856		14		2,870
Total loans	$	5,187,004	$	14,575	$	5,201,579	$	5,068,085	$	14,239	$	5,082,324

* Included within commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class.

Loans are shown net of deferred origination fees, costs and unearned income of $11.0 million at September 30, 2016 and $10.4 million at December 31, 2015, which represented a net deferred income position in both periods.

Overdrawn deposit accounts of $2.8 million and $1.7 million have been reclassified to loans at September 30, 2016 and December 31, 2015, respectively, and are included in the commercial, financial and agricultural loan class above.

Credit Quality

The following tables present the recorded investment in nonaccrual loans, accruing troubled debt restructurings ("TDRs"), and loans past due 90 days or more and still accruing by class of loan as of September 30, 2016 and December 31, 2015:



	September 30, 2016
(In thousands)	Nonaccrual Loans		Accruing Troubled Debt Restructurings		Loans Past Due 90 Days or More and Accruing		Total Nonperforming Loans
Commercial, financial and agricultural	$	22,951	$	953	$	—	$	23,904
Commercial real estate	21,760		4,305		—		26,065
Construction real estate:
SEPH commercial land and development	1,700		—		—		1,700
Remaining commercial	2,257		420		—		2,677
Mortgage	—		105		—		105
Installment	46		96		—		142
Residential real estate:
Commercial	23,700		—		—		23,700
Mortgage	19,768		9,570		750		30,088
HELOC	2,111		629		51		2,791
Installment	589		609		25		1,223
Consumer	2,950		716		897		4,563
Total loans	$	97,832	$	17,403	$	1,723	$	116,958



	December 31, 2015
(In thousands)	Nonaccrual Loans		Accruing Troubled Debt Restructurings		Loans Past Due 90 Days or More and Accruing		Total Nonperforming Loans
Commercial, financial and agricultural	$	21,676	$	8,947	$	—	$	30,623
Commercial real estate	15,268		2,757		—		18,025
Construction real estate:
SEPH commercial land and development	2,044		—		—		2,044
Remaining commercial	4,162		514		—		4,676
Mortgage	7		110		—		117
Installment	64		114		—		178
Residential real estate:
Commercial	25,063		261		—		25,324
Mortgage	20,378		10,143		851		31,372
HELOC	1,749		873		27		2,649
Installment	1,657		635		4		2,296
Consumer	3,819		734		1,093		5,646
Total loans	$	95,887	$	25,088	$	1,975	$	122,950

The following table provides additional information regarding those nonaccrual loans and accruing TDR loans that were individually evaluated for impairment and those collectively evaluated for impairment as of September 30, 2016 and December 31, 2015.



	September 30, 2016						December 31, 2015
(In thousands)	Nonaccrual and Accruing Troubled Debt Restructurings		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Nonaccrual and Accruing Troubled Debt Restructurings		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment
Commercial, financial and agricultural	$	23,904	$	23,856	$	48	$	30,623	$	30,595	$	28
Commercial real estate	26,065		26,065		—		18,025		18,025		—
Construction real estate:
SEPH commercial land and development	1,700		1,700		—		2,044		2,044		—
Remaining commercial	2,677		2,677		—		4,676		4,676		—
Mortgage	105		—		105		117		—		117
Installment	142		—		142		178		—		178
Residential real estate:
Commercial	23,700		23,700		—		25,324		25,324		—
Mortgage	29,338		—		29,338		30,521		—		30,521
HELOC	2,740		—		2,740		2,622		—		2,622
Installment	1,198		—		1,198		2,292		—		2,292
Consumer	3,666		—		3,666		4,553		—		4,553
Total loans	$	115,235	$	77,998	$	37,237	$	120,975	$	80,664	$	40,311

All of the loans individually evaluated for impairment were evaluated using the fair value of the underlying collateral or the present value of expected future cash flows as the measurement method.

The following table presents loans individually evaluated for impairment by class of loan, together with the related allowance recorded, as of September 30, 2016 and December 31, 2015.



	September 30, 2016						December 31, 2015
(In thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated
With no related allowance recorded:
Commercial, financial and agricultural	$	27,346	$	13,225	$	—	$	32,583	$	18,763	$	—
Commercial real estate	23,558		23,294		—		15,138		14,916		—
Construction real estate:
SEPH commercial land and development	3,268		1,700		—		10,834		2,044		—
Remaining commercial	1,882		1,834		—		2,506		1,531		—
Residential real estate:
Commercial	22,671		21,975		—		23,798		23,480		—

With an allowance recorded:
Commercial, financial and agricultural	14,777		10,631		3,191		16,155		11,832		1,904
Commercial real estate	2,771		2,771		525		3,195		3,109		381
Construction real estate:
Remaining commercial	2,112		843		61		3,145		3,145		1,356
Residential real estate:
Commercial	1,803		1,725		455		1,951		1,844		550
Consumer	—		—		—		—		—		—
Total	$	100,188	$	77,998	$	4,232	$	109,305	$	80,664	$	4,191

Management’s general practice is to proactively charge down loans individually evaluated for impairment to the fair value of the underlying collateral. At September 30, 2016 and December 31, 2015, there were $16.7 million and $24.2 million, respectively, of partial charge-offs on loans individually evaluated for impairment with no related allowance recorded and $5.5 million and $4.5 million, respectively, of partial charge-offs on loans individually evaluated for impairment that also had a specific reserve allocated.

The allowance for loan losses included specific reserves of $4.2 million related to loans individually evaluated for impairment at each of September 30, 2016 and December 31, 2015. These loans with specific reserves had a recorded investment of $16.0 million and $19.9 million as of September 30, 2016 and December 31, 2015, respectively.

Interest income on loans individually evaluated for impairment is recognized on a cash basis only when Park expects to receive the entire recorded investment of the loan. The following table presents the average recorded investment and interest income recognized subsequent to impairment on loans individually evaluated for impairment as of and for the three months and nine months ended September 30, 2016 and September 30, 2015:



	Three Months Ended September 30, 2016						Three Months Ended September 30, 2015
(In thousands)	Recorded Investment as of September 30, 2016		Average Recorded Investment		Interest Income Recognized		Recorded Investment as of September 30, 2015		Average Recorded Investment		Interest Income Recognized
Commercial, financial and agricultural	$	23,856	$	26,679	$	194	$	19,154	$	19,793	$	35
Commercial real estate	26,065		27,982		243		17,662		17,453		132
Construction real estate:
SEPH commercial land and development	1,700		1,700		—		2,045		2,068		—
Remaining commercial	2,677		3,943		16		5,993		6,059		2
Residential real estate:
Commercial	23,700		24,422		314		24,370		24,560		240
Consumer	—		10		—		—		—		—
Total	$	77,998	$	84,736	$	767	$	69,224	$	69,933	$	409



	Nine Months Ended September 30, 2016						Nine Months Ended September 30, 2015
(In thousands)	Recorded investment as of September 30, 2016		Average recorded investment		Interest income recognized		Recorded investment as of September 30, 2015		Average recorded investment		Interest income recognized
Commercial, financial and agricultural	$	23,856	$	28,217	$	740	$	19,154	$	19,056	$	306
Commercial real estate	26,065		22,108		608		17,662		17,857		418
Construction real estate:
SEPH commercial land and development	1,700		1,906		—		2,045		2,073		8
Remaining commercial	2,677		4,338		44		5,993		5,771		13
Residential real estate:
Commercial	23,700		24,618		2,619		24,370		24,784		768
Consumer	—		4		—		—		—		—
Total	$	77,998	$	81,191	$	4,011	$	69,224	$	69,541	$	1,513

The following tables present the aging of the recorded investment in past due loans as of September 30, 2016 and December 31, 2015 by class of loan.



	September 30, 2016
(In thousands)	Accruing Loans Past Due 30-89 Days		Past Due Nonaccrual Loans and Loans Past Due 90 Days or More and Accruing (1)		Total Past Due		Total Current (2)		Total Recorded Investment
Commercial, financial and agricultural	$	1,368	$	4,071	$	5,439	$	956,376	$	961,815
Commercial real estate	448		2,724		3,172		1,142,098		1,145,270
Construction real estate:
SEPH commercial land and development	—		1,700		1,700		—		1,700
Remaining commercial	—		79		79		137,120		137,199
Mortgage	45		—		45		41,891		41,936
Installment	93		—		93		5,469		5,562
Residential real estate:
Commercial	120		3,878		3,998		405,299		409,297
Mortgage	8,753		9,637		18,390		1,172,224		1,190,614
HELOC	277		1,190		1,467		212,289		213,756
Installment	293		882		1,175		18,371		19,546
Consumer	10,046		1,955		12,001		1,059,226		1,071,227
Leases	—		—		—		3,657		3,657
Total loans	$	21,443	$	26,116	$	47,559	$	5,154,020	$	5,201,579

(1) Includes $1.7 million of loans past due 90 days or more and accruing. The remaining are past due nonaccrual loans.

(2) Includes $73.4 million of nonaccrual loans which are current in regards to contractual principal and interest payments.



	December 31, 2015
(in thousands)	Accruing Loans Past Due 30-89 Days		Past Due Nonaccrual Loans and Loans Past Due 90 Days or More and Accruing (1)		Total Past Due		Total Current (2)		Total Recorded Investment
Commercial, financial and agricultural	$	670	$	7,536	$	8,206	$	950,958	$	959,164
Commercial real estate	142		530		672		1,116,940		1,117,612
Construction real estate:
SEPH commercial land and development	—		2,044		2,044		—		2,044
Remaining commercial	165		84		249		128,118		128,367
Mortgage	63		7		70		36,727		36,797
Installment	200		46		246		6,308		6,554
Residential real estate:
Commercial	325		19,521		19,846		391,739		411,585
Mortgage	10,569		8,735		19,304		1,192,984		1,212,288
HELOC	487		186		673		211,511		212,184
Installment	426		318		744		21,972		22,716
Consumer	11,458		3,376		14,834		955,309		970,143
Leases	—		—		—		2,870		2,870
Total loans	$	24,505	$	42,383	$	66,888	$	5,015,436	$	5,082,324

(1) Includes $2.0 million of loans past due 90 days or more and accruing. The remaining are past due nonaccrual loans.

(2) Includes $55.5 million of nonaccrual loans which are current in regards to contractual principal and interest payments.

Credit Quality Indicators

Management utilizes past due information as a credit quality indicator across the loan portfolio. Past due information as of September 30, 2016 and December 31, 2015 is included in the tables above. The past due information is the primary credit quality indicator within the following classes of loans: (1) mortgage loans and installment loans in the construction real estate segment; (2) mortgage loans, HELOC and installment loans in the residential real estate segment; and (3) consumer loans. The primary credit indicator for commercial loans is based on an internal grading system that grades commercial loans on a scale from 1 to 8. Credit grades are continuously monitored by the responsible loan officer and adjustments are made when appropriate. A grade of 1 indicates little or no credit risk and a grade of 8 is considered a loss. Commercial loans that are pass-rated (graded an 1 through a 4) are considered to be of acceptable credit risk. Commercial loans graded a 5 (special mention) are considered to be watch list credits and a higher loan loss reserve percentage is allocated to these loans. Loans classified as special mention have potential weaknesses that require management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of Park’s credit position at some future date. Commercial loans graded 6 (substandard), also considered to be watch list credits, are considered to represent higher credit risk and, as a result, a higher loan loss reserve percentage is allocated to these loans. Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or the value of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that Park will sustain some loss if the deficiencies are not corrected. Commercial loans that are graded a 7 (doubtful) are shown as nonaccrual and Park generally charges these loans down to their fair value by taking a partial charge-off or recording a specific reserve. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Certain 6-rated loans and all 7-rated loans are placed on nonaccrual status and included within the impaired category. A loan is deemed impaired when management determines the borrower's ability to perform in accordance with the contractual loan agreement is in doubt. Any commercial loan graded an 8 (loss) is completely charged off.

The tables below present the recorded investment by loan grade at September 30, 2016 and December 31, 2015 for all commercial loans:



	September 30, 2016
(In thousands)	5 Rated		6 Rated		Nonaccrual and Accruing Troubled Debt Restructurings		Pass-Rated		Recorded Investment
Commercial, financial and agricultural *	$	5,339	$	25	$	23,904	$	932,547	$	961,815
Commercial real estate *	6,917		434		26,065		1,111,854		1,145,270
Construction real estate:
SEPH commercial land and development	—		—		1,700		—		1,700
Remaining commercial	504		119		2,677		133,899		137,199
Residential real estate:
Commercial	989		177		23,700		384,431		409,297
Leases	—		—		—		3,657		3,657
Total commercial loans	$	13,749	$	755	$	78,046	$	2,566,388	$	2,658,938

* Included within commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class.



	December 31, 2015
(In thousands)	5 Rated		6 Rated		Nonaccrual and Accruing Troubled Debt Restructurings		Pass-Rated		Recorded Investment
Commercial, financial and agricultural *	$	4,392	$	347	$	30,623	$	923,802	$	959,164
Commercial real estate *	14,880		3,417		18,025		1,081,290		1,117,612
Construction real estate:
SEPH commercial land and development	—		—		2,044		—		2,044
Remaining commercial	2,151		122		4,676		121,418		128,367
Residential real estate:
Commercial	3,280		386		25,324		382,595		411,585
Leases	—		—		—		2,870		2,870
Total Commercial Loans	$	24,703	$	4,272	$	80,692	$	2,511,975	$	2,621,642

* Included within commercial, financial and agricultural loans and commercial real estate loans is an immaterial amount of consumer loans that are not broken out by class.

Troubled Debt Restructurings ("TDRs")

Management classifies loans as TDRs when a borrower is experiencing financial difficulties and Park has granted a concession to the borrower as part of a modification or in the loan renewal process. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of the borrower's debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy. Management’s policy is to modify loans by extending the term or by granting a temporary or permanent contractual interest rate below the market rate, not by forgiving debt. A court's discharge of a borrower's debt in a Chapter 7 bankruptcy is considered a concession when the borrower does not reaffirm the discharged debt. Certain loans which were modified during the three-month and nine-month periods ended September 30, 2016 and September 30, 2015 did not meet the definition of a TDR as the modification was a delay in a payment that was considered to be insignificant. Management considers a forbearance period of up to three months or a delay in payment of up to 30 days to be insignificant. TDRs may be classified as accruing if the borrower has been current for a period of at least six months with respect to loan payments and management expects that the borrower will be able to continue to make payments in accordance with the terms of the restructured note. Management reviews all accruing TDRs quarterly to ensure payments continue to be made in accordance with the modified terms.

Management reviews renewals/modifications of loans previously identified as TDRs to consider if it is appropriate to remove the TDR classification. If the borrower is no longer experiencing financial difficulty and the renewal/modification does not contain a concessionary interest rate or other concessionary terms, management considers the potential removal of the TDR classification. If deemed appropriate, the TDR classification is removed as the borrower has complied with the terms of the loan at the date of the renewal/modification and there was a reasonable expectation that the borrower would continue to comply with the terms of the loan subsequent to the date of the renewal/modification. The majority of these TDRs were originally considered restructurings in a prior year as a result of a renewal/modification with an interest rate that was not commensurate with the risk of the underlying loan at the time of the renewal/modification. During the three-month and nine-month periods ended September 30, 2016, Park removed the TDR classification on $335,000 and $2.0 million, respectively, of loans that met the requirements discussed above. The TDR classification was not removed on any loans during the three-month and nine-month periods ended September 30, 2015.

At September 30, 2016 and December 31, 2015, there were $51.2 million and $41.1 million, respectively, of TDRs included in the nonaccrual loan totals. At September 30, 2016 and December 31, 2015, $42.7 million and $19.1 million of these nonaccrual TDRs were performing in accordance with the terms of the restructured note. As of September 30, 2016 and December 31, 2015, there were $17.4 million and $25.1 million, respectively, of TDRs included in accruing loan totals. Management will continue to review the restructured loans and may determine it appropriate to move certain of the loans back to accrual status in the future.

At September 30, 2016 and December 31, 2015, Park had commitments to lend $1.2 million and $2.3 million, respectively, of additional funds to borrowers whose outstanding loan terms had been modified in a TDR.

There were $1.9 million and $2.3 million of specific reserves related to TDRs at September 30, 2016 and December 31, 2015, respectively. Modifications made in 2015 and 2016 were largely the result of renewals and extending the maturity date of the loan at terms consistent with the original note. These modifications were deemed to be TDRs primarily due to Park’s conclusion that the borrower would likely not have qualified for similar terms through another lender. Many of the modifications deemed to be TDRs were previously identified as impaired loans, and thus were also previously evaluated for impairment under Accounting Standards Codification (ASC) 310. There were no additional specific reserves recorded during the three-month period ended September 30, 2016 as a result of TDRs identified in 2016. During the nine-month period ended September 30, 2016, $975,000 of additional specific reserves were recorded as a result of TDRs identified in 2016. Additional specific reserves of $212,000 and $1.2 million were recorded during the three-month and nine-month periods ended September 30, 2015, respectively, as a result of TDRs identified in 2015.

The terms of certain other loans were modified during the nine-month periods ended September 30, 2016 and September 30, 2015 that did not meet the definition of a TDR. Modified substandard commercial loans which did not meet the definition of a TDR had a total recorded investment as of September 30, 2016 and September 30, 2015 of $437,000 and $245,000, respectively. The renewal/modification of these loans: (1) resulted in a delay in a payment that was considered to be insignificant, or (2) resulted in Park obtaining additional collateral or guarantees that improved the likelihood of the ultimate collection of the loan such that the modification was deemed to be at market terms. Modified consumer loans which did not meet the definition of a TDR had a total recorded investment of $5.1 million and $12.8 million, as of September 30, 2016 and September 30, 2015, respectively. Many of these loans were to borrowers who were not experiencing financial difficulties but who were looking to reduce their cost of funds.

The following tables detail the number of contracts modified as TDRs during the three-month and nine-month periods ended September 30, 2016 and September 30, 2015, as well as the recorded investment of these contracts at September 30, 2016 and September 30, 2015. The recorded investment pre- and post-modification is generally the same due to the fact that Park does not typically provide for forgiveness of principal.



	Three Months Ended September 30, 2016
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	12	$	152	$	6,451	$	6,603
Commercial real estate	6	—		1,777		1,777
Construction real estate:
SEPH commercial land and development	—	—		—		—
Remaining commercial	1	—		947		947
Mortgage	—	—		—		—
Installment	—	—		—		—
Residential real estate:
Commercial	4	—		225		225
Mortgage	14	—		1,173		1,173
HELOC	2	—		91		91
Installment	2	33		4		37
Consumer	74	61		1,508		1,569
Total loans	115	$	246	$	12,176	$	12,422



	Three Months Ended September 30, 2015
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	8	$	245	$	3,818	$	4,063
Commercial real estate	5	—		1,512		1,512
Construction real estate:
SEPH commercial land and development	—	—		—		—
Remaining commercial	1	196		—		196
Mortgage	—	—		—		—
Installment	—	—		—		—
Residential real estate:
Commercial	1	200		—		200
Mortgage	9	—		748		748
HELOC	5	16		31		47
Installment	1	—		4		4
Consumer	61	51		412		463
Total loans	91	$	708	$	6,525	$	7,233

Of those loans which were modified and determined to be a TDR during the three-month period ended September 30, 2016, $7.6 million were on nonaccrual status as of December 31, 2015. Of those loans which were modified and determined to be a TDR during the three-month period ended September 30, 2015, $160,000 were on nonaccrual status as of December 31, 2014.



	Nine Months Ended September 30, 2016
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	29	$	102	$	7,242	$	7,344
Commercial real estate	10	2,812		2,306		5,118
Construction real estate:
SEPH commercial land and development	—	—		—		—
Remaining commercial	2	—		1,144		1,144
Mortgage	—	—		—		—
Installment	1	—		9		9
Residential real estate:
Commercial	7	—		918		918
Mortgage	23	96		1,713		1,809
HELOC	10	17		184		201
Installment	4	72		7		79
Consumer	223	115		2,042		2,157
Total loans	309	$	3,214	$	15,565	$	18,779



	Nine Months Ended September 30, 2015
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	33	$	1,014	$	5,168	$	6,182
Commercial real estate	11	—		2,525		2,525
Construction real estate:
SEPH commercial land and development	—	—		—		—
Remaining commercial	1	196		—		196
Mortgage	1	—		20		20
Installment	—	—		—		—
Residential real estate:
Commercial	10	200		1,144		1,344
Mortgage	24	325		1,199		1,524
HELOC	21	242		105		347
Installment	4	—		36		36
Consumer	217	71		748		819
Total loans	322	$	2,048	$	10,945	$	12,993

Of those loans which were modified and determined to be a TDR during the nine-month period ended September 30, 2016, $8.5 million were on nonaccrual status as of December 31, 2015. Of those loans which were modified and determined to be a TDR during the nine-month period ended September 30, 2015, $1.0 million were on nonaccrual status as of December 31, 2014.

The following tables present the recorded investment in financing receivables which were modified as TDRs within the previous 12 months and for which there was a payment default during the three-month and nine-month periods ended September 30, 2016 and September 30, 2015, respectively. For these tables, a loan is considered to be in default when it becomes 30 days contractually past due under the modified terms. The additional allowance for loan loss resulting from the defaults on TDR loans was immaterial.



	Three Months Ended September 30, 2016			Three Months Ended September 30, 2015
(In thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, financial and agricultural	5	$	129	7	$	821
Commercial real estate	4	808		—	—
Construction real estate:
SEPH commercial land and development	—	—		—	—
Remaining commercial	—	—		—	—
Mortgage	—	—		—	—
Installment	—	—		—	—
Residential real estate:
Commercial	3	679		1	603
Mortgage	13	1,687		13	902
HELOC	—	—		—	—
Installment	2	7		1	28
Consumer	53	559		50	310
Leases	—	—		—	—
Total loans	80	$	3,869	72	$	2,664

Of the $3.9 million in modified TDRs which defaulted during the three months ended September 30, 2016, $14,000 were accruing loans and $3.9 million were nonaccrual loans. Of the $2.7 million in modified TDRs which defaulted during the three months ended September 30, 2015, there were $61,000 accruing loans and $2.6 million were nonaccrual loans.



	Nine Months Ended September 30, 2016			Nine Months Ended September 30, 2015
(In thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, financial and agricultural	5	$	129	7	$	821
Commercial real estate	4	808		—	—
Construction real estate:
SEPH commercial land and development	—	—		—	—
Remaining commercial	—	—		—	—
Mortgage	—	—		—	—
Installment	—	—		—	—
Residential real estate:
Commercial	4	709		1	603
Mortgage	13	1,687		13	902
HELOC	—	—		—	—
Installment	2	7		1	28
Consumer	60	611		55	356
Leases	—	—		—	—
Total loans	88	$	3,951	77	$	2,710

Of the $4.0 million in modified TDRs which defaulted during the nine months ended September 30, 2016, $14,000 were accruing loans and $3.9 million were nonaccrual loans. Of the $2.7 million in modified TDRs which defaulted during the nine months ended September 30, 2015, $61,000 were accruing loans and $2.6 million were nonaccrual loans.