Loans

The composition of the loan portfolio, by class of loan, as of September 30, 2018 and December 31, 2017 was as follows:



	September 30, 2018						December 31, 2017
(In thousands)	Loan Balance		Accrued Interest Receivable		Recorded Investment		Loan Balance		Accrued Interest Receivable		Recorded Investment
Commercial, financial and agricultural *	$	1,031,500	$	5,606	$	1,037,106	$	1,053,453	$	4,413	$	1,057,866
Commercial real estate *	1,302,630		5,169		1,307,799		1,167,607		4,283		1,171,890
Construction real estate:
Commercial	151,757		474		152,231		125,389		401		125,790
Mortgage	65,842		158		66,000		52,203		133		52,336
Installment	2,597		8		2,605		3,878		13		3,891
Residential real estate:
Commercial	403,147		1,156		404,303		393,094		1,029		394,123
Mortgage	1,140,648		1,719		1,142,367		1,110,426		1,516		1,111,942
HELOC	221,632		964		222,596		203,178		974		204,152
Installment	15,556		43		15,599		18,526		53		18,579
Consumer	1,287,382		3,773		1,291,155		1,241,736		3,808		1,245,544
Leases	2,632		40		2,672		2,993		36		3,029
Total loans	$	5,625,323	$	19,110	$	5,644,433	$	5,372,483	$	16,659	$	5,389,142

* Included within each of 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 $12.4 million at September 30, 2018 and $12.2 million at December 31, 2017, which represented a net deferred income position in both periods. At September 30, 2018, loans included a purchase accounting adjustment of $5.1 million, which represented a net deferred income position. This fair market value adjustment is expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans.

Overdrawn deposit accounts of $1.1 million and $1.9 million had been reclassified to loans at September 30, 2018 and December 31, 2017, 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, 2018 and December 31, 2017:



	September 30, 2018
(In thousands)	Nonaccrual Loans		Accruing TDRs		Loans Past Due 90 Days or More and Accruing		Total Nonperforming Loans
Commercial, financial and agricultural	$	15,837	$	264	$	16	$	16,117
Commercial real estate	22,806		2,999		—		25,805
Construction real estate:
Commercial	2,016		—		—		2,016
Mortgage	16		16		—		32
Installment	21		12		—		33
Residential real estate:
Commercial	2,786		127		—		2,913
Mortgage	17,411		8,175		720		26,306
HELOC	1,901		1,251		144		3,296
Installment	410		1,074		—		1,484
Consumer	3,450		789		1,203		5,442
Total loans	$	66,654	$	14,707	$	2,083	$	83,444



	December 31, 2017
(In thousands)	Nonaccrual Loans		Accruing TDRs		Loans Past Due 90 Days or More and Accruing		Total Nonperforming Loans
Commercial, financial and agricultural	$	16,773	$	1,291	$	—	$	18,064
Commercial real estate	12,979		5,163		—		18,142
Construction real estate:
Commercial	986		338		—		1,324
Mortgage	8		92		—		100
Installment	52		—		—		52
Residential real estate:
Commercial	18,835		224		—		19,059
Mortgage	16,841		10,766		568		28,175
HELOC	1,593		1,025		14		2,632
Installment	586		616		7		1,209
Consumer	3,403		662		1,256		5,321
Total loans	$	72,056	$	20,177	$	1,845	$	94,078

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, 2018 and December 31, 2017.



	September 30, 2018						December 31, 2017
(In thousands)	Nonaccrual and Accruing TDRs		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment		Nonaccrual and Accruing TDRs		Loans Individually Evaluated for Impairment		Loans Collectively Evaluated for Impairment
Commercial, financial and agricultural	$	16,101	$	16,026	$	75	$	18,064	$	18,039	$	25
Commercial real estate	25,805		25,805		—		18,142		18,142		—
Construction real estate:
Commercial	2,016		2,016		—		1,324		1,324		—
Mortgage	32		—		32		100		—		100
Installment	33		—		33		52		—		52
Residential real estate:
Commercial	2,913		2,913		—		19,059		19,059		—
Mortgage	25,586		—		25,586		27,607		—		27,607
HELOC	3,152		—		3,152		2,618		—		2,618
Installment	1,484		—		1,484		1,202		—		1,202
Consumer	4,239		—		4,239		4,065		—		4,065
Total loans	$	81,361	$	46,760	$	34,601	$	92,233	$	56,564	$	35,669

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, 2018 and December 31, 2017.



	September 30, 2018						December 31, 2017
(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	$	18,067	$	12,801	$	—	$	19,899	$	14,704	$	—
Commercial real estate	24,518		24,004		—		18,974		18,060		—
Construction real estate:
Commercial	4,829		2,016		—		2,788		1,324		—
Residential real estate:
Commercial	3,004		2,716		—		19,346		19,012		—

With an allowance recorded:
Commercial, financial and agricultural	5,317		3,225		1,716		5,394		3,335		681
Commercial real estate	1,832		1,801		71		137		82		2
Construction real estate:
Commercial	—		—		—		—		—		—
Residential real estate:
Commercial	200		197		59		47		47		1
Consumer	—		—		—		—		—		—
Total	$	57,767	$	46,760	$	1,846	$	66,585	$	56,564	$	684

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, 2018 and December 31, 2017, there were $8.9 million and $7.9 million, respectively, of partial charge-offs on loans individually evaluated for impairment with no related allowance recorded. At both September 30, 2018 and December 31, 2017, there were $2.1 million 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 related to loans individually evaluated for impairment at September 30, 2018 and December 31, 2017 of $1.8 million and $0.7 million, respectively. These loans with specific reserves had a recorded investment of $5.2 million and $3.5 million as of September 30, 2018 and December 31, 2017, respectively.

Interest income on nonaccrual loans individually evaluated for impairment is recognized on a cash basis only when Park expects to receive the entire recorded investment of the loan. Interest income on accruing TDRs individually evaluated for impairment continues to be recorded on an accrual basis. 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 and nine months ended September 30, 2018 and September 30, 2017:



	Three Months Ended September 30, 2018						Three Months Ended September 30, 2017
(In thousands)	Recorded Investment as of September 30, 2018		Average Recorded Investment		Interest Income Recognized		Recorded Investment as of September 30, 2017		Average Recorded Investment		Interest Income Recognized
Commercial, financial and agricultural	$	16,026	$	23,247	$	187	$	29,848	$	28,412	$	398
Commercial real estate	25,805		26,428		268		22,995		22,241		192
Construction real estate:
Commercial	2,016		2,246		4		1,460		1,554		18
Residential real estate:
Commercial	2,913		2,758		26		19,298		20,365		46
Consumer	—		—		—		8		8		—
Total	$	46,760	$	54,679	$	485	$	73,609	$	72,580	$	654



	Nine Months Ended September 30, 2018						Nine Months Ended September 30, 2017
(In thousands)	Recorded Investment as of September 30, 2018		Average Recorded Investment		Interest Income Recognized		Recorded Investment as of September 30, 2017		Average Recorded Investment		Interest Income Recognized
Commercial, financial and agricultural	$	16,026	$	22,686	$	506	$	29,848	$	23,770	$	738
Commercial real estate	25,805		21,582		671		22,995		22,470		663
Construction real estate:
Commercial	2,016		1,661		31		1,460		1,830		49
Residential real estate:
Commercial	2,913		6,086		84		19,298		20,876		452
Consumer	—		—		—		8		7		—
Total	$	46,760	$	52,015	$	1,292	$	73,609	$	68,953	$	1,902

The following tables present the aging of the recorded investment in past due loans as of September 30, 2018 and December 31, 2017 by class of loan.



	September 30, 2018
(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	$	2,769	$	1,817	$	4,586	$	1,032,520	$	1,037,106
Commercial real estate	96		1,425		1,521		1,306,278		1,307,799
Construction real estate:
Commercial	—		1,837		1,837		150,394		152,231
Mortgage	241		—		241		65,759		66,000
Installment	179		21		200		2,405		2,605
Residential real estate:
Commercial	79		1,268		1,347		402,956		404,303
Mortgage	13,669		8,241		21,910		1,120,457		1,142,367
HELOC	749		1,089		1,838		220,758		222,596
Installment	273		212		485		15,114		15,599
Consumer	10,221		2,251		12,472		1,278,683		1,291,155
Leases	—		—		—		2,672		2,672
Total loans	$	28,276	$	18,161	$	46,437	$	5,597,996	$	5,644,433

(1) Includes $2.1 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans.

(2) Includes $50.1 million of nonaccrual loans which were current in regards to contractual principal and interest payments.



	December 31, 2017
(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	$	145	$	1,043	$	1,188	$	1,056,678	$	1,057,866
Commercial real estate	856		2,360		3,216		1,168,674		1,171,890
Construction real estate:
Commercial	29		—		29		125,761		125,790
Mortgage	256		—		256		52,080		52,336
Installment	54		19		73		3,818		3,891
Residential real estate:
Commercial	16		1,586		1,602		392,521		394,123
Mortgage	11,515		9,232		20,747		1,091,195		1,111,942
HELOC	616		876		1,492		202,660		204,152
Installment	239		253		492		18,087		18,579
Consumer	11,515		2,407		13,922		1,231,622		1,245,544
Leases	—		—		—		3,029		3,029
Total loans	$	25,241	$	17,776	$	43,017	$	5,346,125	$	5,389,142

(1) Includes $1.8 million of loans past due 90 days or more and accruing. The remaining loans were past due nonaccrual loans.

(2) Includes $56.1 million of nonaccrual loans which were 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, 2018 and December 31, 2017 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 a 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, 2018 and December 31, 2017 for all commercial loans:



	September 30, 2018
(In thousands)	5 Rated		6 Rated		Nonaccrual and Accruing TDRs		Purchase Credit Impaired		Pass-Rated		Recorded Investment
Commercial, financial and agricultural *	$	980	$	451	$	16,101	$	405	$	1,019,169	$	1,037,106
Commercial real estate *	2,147		—		25,805		3,546		1,276,301		1,307,799
Construction real estate:
Commercial	1,588		—		2,016		499		148,128		152,231
Residential real estate:
Commercial	195		44		2,913		44		401,107		404,303
Leases	—		—		—		—		2,672		2,672
Total commercial loans	$	4,910	$	495	$	46,835	$	4,494	$	2,847,377	$	2,904,111

* Included within each of 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, 2017
(In thousands)	5 Rated		6 Rated		Nonaccrual and Accruing TDRs		Purchase Credit Impaired		Pass-Rated		Recorded Investment
Commercial, financial and agricultural *	$	17,272	$	153	$	18,064	$	—	$	1,022,377	$	1,057,866
Commercial real estate *	5,322		457		18,142		—		1,147,969		1,171,890
Construction real estate:
Commercial	278		—		1,324		—		124,188		125,790
Residential real estate:
Commercial	216		1		19,059		—		374,847		394,123
Leases	—		—		—		—		3,029		3,029
Total Commercial Loans	$	23,088	$	611	$	56,589	$	—	$	2,672,410	$	2,752,698

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

Purchase Credit Impaired ("PCI") Loans

In conjunction with the NewDominion acquisition, Park acquired loans with a book value of $277.9 million as of July 1, 2018. These loans were recorded at the preliminary fair value of $272.8 million.

Loans acquired with deteriorated credit quality with a book value of $5.1 million were recorded at the preliminary fair value of $4.9 million. The carrying amount of loans acquired with deteriorated credit quality at September 30, 2018 was $4.5 million, while the outstanding customer balance was $4.7 million. At September 30, 2018, no allowance for loan losses had been recognized related to the acquired impaired loans.

The following table provides changes in accretable discount for loans acquired with deteriorated credit quality:



	For the Nine Months Ended
(in thousands)	September 30, 2018		September 30, 2017
Balance at the beginning of the period	$	—	$	—
Acquisitions	176		—
Reductions due to change in projected cash flows	—		—
Reclass from non-accretable difference	—		—
Transfers out	11		—
Accretion	—		—
Balance at end of period	$	165	$	—

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 periods ended September 30, 2018 and September 30, 2017 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.

Quarterly, 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 did 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 if 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. The TDR classification was removed on $0.2 million of loans during the three-month period ended September 30, 2018 and on $2.4 million of loans during the nine-month period ended September 30, 2018. There were no TDR classifications removed during the three-month or nine-month periods ended September 30, 2017.

At September 30, 2018 and December 31, 2017, there were $25.2 million and $38.5 million, respectively, of TDRs included in the nonaccrual loan totals. At September 30, 2018 and December 31, 2017, $19.4 million and $32.4 million, respectively, of these nonaccrual TDRs were performing in accordance with the terms of the restructured note. As of September 30, 2018 and December 31, 2017, loans with a recorded investment of $14.7 million and $20.2 million, respectively, were included in accruing TDR loan totals. Management will continue to review the restructured loans and may determine it is appropriate to move certain nonaccrual TDRs to accrual status in the future.

At September 30, 2018 and December 31, 2017, Park had commitments to lend $0.2 million and $1.3 million, respectively, of additional funds to borrowers whose outstanding loan terms had been modified in a TDR.

At September 30, 2018 and December 31, 2017, there were $0.9 million and $0.5 million of specific reserves related to TDRs. Modifications made in 2017 and 2018 were largely the result of renewals and extending the maturity date of the loans at terms consistent with the original notes. 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. Additional specific reserves of $150,000 were recorded during the three-month period ended September 30, 2018 as a result of TDRs identified in the period. There were no additional specific reserves recorded during the three-month period ended September 30, 2017 as a result of TDRs identified in the period. Additional specific reserves of $160,000 and $290,000 were recorded during the nine-month periods ended September 30, 2018 and September 30, 2017, respectively, as a result of TDRs identified in the respective periods.

The terms of certain other loans were modified during the three-month and nine-month periods ended September 30, 2018 and September 30, 2017 that did not meet the definition of a TDR. There were no substandard commercial loans modified during the three-month period ended September 30, 2018 which did not meet the definition of a TDR. Substandard commercial loans modified during the nine-month period ended September 30, 2018 which did not meet the definition of a TDR had a total recorded investment of $0.2 million. Substandard commercial loans modified during the three-month and nine-month periods ended September 30, 2017 which did not meet the definition of a TDR had a total recorded investment of $0.9 million and $1.0 million, 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 loans such that each modification was deemed to be at market terms. Consumer loans modified during the three-month and nine-month periods ended September 30, 2018 which did not meet the definition of a TDR had a total recorded investment of $6.6 million and $17.0 million, respectively. Consumer loans with a recorded investment of $3.1 million and $6.7 million were modified during the three-month and nine-month periods ended September 30, 2017, respectively, and did not meet the definition of a TDR. 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 periods ended September 30, 2018 and September 30, 2017, as well as the recorded investment of these contracts at September 30, 2018 and September 30, 2017. The recorded investment pre- and post-modification is generally the same due to the fact that Park does not typically forgive principal.



	Three Months Ended September 30, 2018
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	8	$	22	$	552	$	574
Commercial real estate	3	—		1,154		1,154
Construction real estate:
Commercial	—	—		—		—
Mortgage	—	—		—		—
Installment	—	—		—		—
Residential real estate:
Commercial	2	55		249		304
Mortgage	4	—		246		246
HELOC	10	453		16		469
Installment	8	336		—		336
Consumer	71	31		590		621
Total loans	106	$	897	$	2,807	$	3,704



	Three Months Ended September 30, 2017
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	14	$	400	$	1,015	$	1,415
Commercial real estate	3	974		481		1,455
Construction real estate:
Commercial	—	—		—		—
Mortgage	—	—		—		—
Installment	—	—		—		—
Residential real estate:
Commercial	10	144		354		498
Mortgage	5	211		206		417
HELOC	4	123		45		168
Installment	4	110		41		151
Consumer	99	99		735		834
Total loans	139	$	2,061	$	2,877	$	4,938

Of those loans which were modified and determined to be a TDR during the three-month period ended September 30, 2018, $0.1 million were on nonaccrual status as of December 31, 2017. Of those loans which were modified and determined to be a TDR during the three-month period ended September 30, 2017, $0.5 million were on nonaccrual status as of December 31, 2016.



	Nine Months Ended September 30, 2018
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	16	$	208	$	592	$	800
Commercial real estate	10	447		1,412		1,859
Construction real estate:
Commercial	1	—		—		—
Mortgage	—	—		—		—
Installment	2	12		—		12
Residential real estate:
Commercial	2	55		249		304
Mortgage	17	90		972		1,062
HELOC	18	735		125		860
Installment	17	437		16		453
Consumer	206	59		1,157		1,216
Total loans	289	$	2,043	$	4,523	$	6,566



	Nine Months Ended September 30, 2017
(In thousands)	Number of Contracts	Accruing		Nonaccrual		Total Recorded Investment
Commercial, financial and agricultural	25	$	400	$	3,769	$	4,169
Commercial real estate	9	1,525		795		2,320
Construction real estate:
Commercial	—	—		—		—
Mortgage	1	—		8		8
Installment	—	—		—		—
Residential real estate:
Commercial	15	144		558		702
Mortgage	24	746		923		1,669
HELOC	16	478		51		529
Installment	7	175		41		216
Consumer	228	140		1,012		1,152
Total loans	325	$	3,608	$	7,157	$	10,765

Of those loans which were modified and determined to be a TDR during the nine-month period ended September 30, 2018, $0.5 million were on nonaccrual status as of December 31, 2017. Of those loans which were modified and determined to be a TDR during the nine-month period ended September 30, 2017, $3.0 million were on nonaccrual status as of December 31, 2016.

The following table presents the recorded investment in loans 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, 2018 and September 30, 2017, respectively. For this table, 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, 2018			Three Months Ended September 30, 2017
(In thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, financial and agricultural	1	$	1	1	$	20
Commercial real estate	—	—		1	72
Construction real estate:
Commercial	—	—		—	—
Mortgage	—	—		—	—
Installment	—	—		—	—
Residential real estate:
Commercial	—	—		1	17
Mortgage	8	688		6	427
HELOC	3	108		2	27
Installment	—	—		—	—
Consumer	40	315		33	262
Leases	—	—		—	—
Total loans	52	$	1,112	44	$	825

Of the $1.1 million in modified TDRs which defaulted during the three-month period ended September 30, 2018, $67,000 were accruing loans and $1.0 million were nonaccrual loans. Of the $0.8 million in modified TDRs which defaulted during the three-month period ended September 30, 2017, all were nonaccrual loans.



	Nine Months Ended September 30, 2018			Nine Months Ended September 30, 2017
(In thousands)	Number of Contracts	Recorded Investment		Number of Contracts	Recorded Investment
Commercial, financial and agricultural	1	$	1	1	$	20
Commercial real estate	—	—		2	248
Construction real estate:
Commercial	—	—		—	—
Mortgage	—	—		—	—
Installment	—	—		—	—
Residential real estate:
Commercial	—	—		1	17
Mortgage	9	789		6	426
HELOC	3	108		3	32
Installment	—	—		—	—
Consumer	50	392		45	345
Leases	—	—		—	—
Total loans	63	$	1,290	58	$	1,088

Of the $1.3 million in modified TDRs which defaulted during the nine-month period ended September 30, 2018, $67,000 were accruing loans and $1.2 million were nonaccrual loans. Of the $1.1 million in modified TDRs which defaulted during the nine-month period ended September 30, 2017, $2,000 were accruing loans and $1.1 million were nonaccrual loans.