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Loans and Asset Quality Information | 9 Months Ended
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Sep. 30, 2015
Loans and Asset Quality Information [Abstract] |
Loans and Asset Quality Information | Note 7 – Loans and Asset Quality Information The loans and foreclosed real estate that were acquired in FDIC-assisted transactions are covered by loss share agreements between the FDIC and the Company's banking subsidiary, First Bank, which afford First Bank significant loss protection - see Note 2 to the financial statements included in the Company's 2011 Annual Report on Form 10-K for detailed information regarding these transactions. Because of the loss protection provided by the FDIC, the risk of the loans and foreclosed real estate that are covered by loss share agreements are significantly different from those assets not covered under the loss share agreements. Accordingly, the Company presents separately loans subject to the loss share agreements as “covered loans” in the information below and loans that are not subject to the loss share agreements as “non-covered loans.” On July 1, 2014, one of the Company's loss share agreements with the FDIC expired. The agreement that expired related to the non-single family assets of Cooperative Bank, a failed bank acquisition in 2009. Accordingly, the remaining balances associated with these loans and foreclosed real estate were transferred from the covered portfolio to the non-covered portfolio on July 1, 2014. The Company will bear all future losses on this portfolio of loans and foreclosed real estate. Immediately prior to the transfer to non-covered status, the loans in this portfolio had a carrying value of $39.7 million and the foreclosed real estate in this portfolio had a carrying value of $3.0 million. Of the $39.7 million in loans that lost loss share protection, approximately $9.7 million were on nonaccrual status and $2.1 million were classified as accruing troubled debt restructurings as of July 1, 2014. Additionally, approximately $1.7 million in allowance for loan losses associated with this portfolio of loans was transferred to the allowance for loan losses for non-covered loans on July 1, 2014. The following is a summary of the major categories of total loans outstanding:
($ in thousands) |  | September 30, 2015 |  | December 31, 2014 |  | September 30, 2014
|  | Amount |  | Percentage |  | Amount |  | Percentage |  | Amount |  | Percentage
All loans (non-covered and covered): |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural |  | $ | 199,630 |  |  | 8% |  | $ | 160,878 |  |  | 7% |  | $ | 165,215 |  |  | 7%
Real estate – construction, land development & other land loans |  |  | 294,426 |  |  | 12% |  |  | 288,148 |  |  | 12% |  |  | 298,091 |  |  | 13%
Real estate – mortgage – residential (1-4 family) first mortgages |  |  | 770,691 |  |  | 31% |  |  | 789,871 |  |  | 33% |  |  | 806,954 |  |  | 33%
Real estate – mortgage – home equity loans / lines of credit |  |  | 224,639 |  |  | 9% |  |  | 223,500 |  |  | 9% |  |  | 224,553 |  |  | 9%
Real estate – mortgage – commercial and other |  |  | 944,432 |  |  | 38% |  |  | 882,127 |  |  | 37% |  |  | 879,122 |  |  | 36%
Installment loans to individuals |  |  | 47,120 |  |  | 2% |  |  | 50,704 |  |  | 2% |  |  | 51,425 |  |  | 2%
Subtotal |  |  | 2,480,938 |  |  | 100% |  |  | 2,395,228 |  |  | 100% |  |  | 2,425,360 |  |  | 100%
Unamortized net deferred loan costs |  |  | 765 |  |  |  |  |  |  | 946 |  |  |  |  |  |  | 730 |  |  |  |
Total loans |  | $ | 2,481,703 |  |  |  |  |  | $ | 2,396,174 |  |  |  |  |  | $ | 2,426,090 |  |  |  |
The following is a summary of the major categories of non-covered loans outstanding:
($ in thousands) |  | September 30, 2015 |  | December 31, 2014 |  | September 30, 2014
|  | Amount |  | Percentage |  | Amount |  | Percentage |  | Amount |  | Percentage
Non-covered loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural |  | $ | 198,624 |  |  | 9% |  | $ | 159,195 |  |  | 7% |  | $ | 162,994 |  |  | 7%
Real estate – construction, land development & other land loans |  |  | 290,465 |  |  | 12% |  |  | 282,604 |  |  | 13% |  |  | 292,401 |  |  | 13%
Real estate – mortgage – residential (1-4 family) first mortgages |  |  | 692,431 |  |  | 29% |  |  | 700,101 |  |  | 31% |  |  | 714,879 |  |  | 31%
Real estate – mortgage – home equity loans / lines of credit |  |  | 213,435 |  |  | 9% |  |  | 210,697 |  |  | 9% |  |  | 211,477 |  |  | 9%
Real estate – mortgage – commercial and other |  |  | 932,254 |  |  | 39% |  |  | 864,333 |  |  | 38% |  |  | 858,935 |  |  | 38%
Installment loans to individuals |  |  | 47,120 |  |  | 2% |  |  | 50,704 |  |  | 2% |  |  | 51,425 |  |  | 2%
Subtotal |  |  | 2,374,329 |  |  | 100% |  |  | 2,267,634 |  |  | 100% |  |  | 2,292,111 |  |  | 100%
Unamortized net deferred loan costs |  |  | 765 |  |  |  |  |  |  | 946 |  |  |  |  |  |  | 730 |  |  |  |
Total non-covered loans |  | $ | 2,375,094 |  |  |  |  |  | $ | 2,268,580 |  |  |  |  |  | $ | 2,292,841 |  |  |  |
The carrying amount of the covered loans at September 30, 2015 consisted of impaired and nonimpaired purchased loans (as determined on the date of acquisition), as follows:
($ in thousands) |  | Impaired Purchased Loans – Carrying Value |  | Impaired Purchased Loans – Unpaid Principal Balance |  | Nonimpaired Purchased Loans – Carrying Value |  | Nonimpaired Purchased Loans - Unpaid Principal Balance |  | Total Covered Loans – Carrying Value |  | Total Covered Loans – Unpaid Principal Balance
Covered loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural |  | $ | 59 |  |  | 116 |  |  | 947 |  |  | 975 |  |  | 1,006 |  |  | 1,091
Real estate – construction, land development & other land loans |  |  | 297 |  |  | 522 |  |  | 3,664 |  |  | 3,912 |  |  | 3,961 |  |  | 4,434
Real estate – mortgage – residential (1-4 family) first mortgages |  |  | 109 |  |  | 636 |  |  | 78,151 |  |  | 91,570 |  |  | 78,260 |  |  | 92,206
Real estate – mortgage – home equity loans / lines of credit |  |  | 8 |  |  | 15 |  |  | 11,196 |  |  | 12,912 |  |  | 11,204 |  |  | 12,927
Real estate – mortgage – commercial and other |  |  | 1,047 |  |  | 3,154 |  |  | 11,131 |  |  | 11,871 |  |  | 12,178 |  |  | 15,025
Total |  | $ | 1,520 |  |  | 4,443 |  |  | 105,089 |  |  | 121,240 |  |  | 106,609 |  |  | 125,683
The carrying amount of the covered loans at December 31, 2014 consisted of impaired and nonimpaired purchased loans (as determined on the date of the acquisition), as follows:
($ in thousands) |  | Impaired Purchased Loans – Carrying Value |  | Impaired Purchased Loans – Unpaid Principal Balance |  | Nonimpaired Purchased Loans – Carrying Value |  | Nonimpaired Purchased Loans - Unpaid Principal Balance |  | Total Covered Loans – Carrying Value |  | Total Covered Loans – Unpaid Principal Balance
Covered loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural |  | $ | 66 |  |  | 123 |  |  | 1,617 |  |  | 1,661 |  |  | 1,683 |  |  | 1,784
Real estate – construction, land development & other land loans |  |  | 309 |  |  | 534 |  |  | 5,235 |  |  | 6,471 |  |  | 5,544 |  |  | 7,005
Real estate – mortgage – residential (1-4 family) first mortgages |  |  | 362 |  |  | 1,298 |  |  | 89,408 |  |  | 104,678 |  |  | 89,770 |  |  | 105,976
Real estate – mortgage – home equity loans / lines of credit |  |  | 12 |  |  | 19 |  |  | 12,791 |  |  | 15,099 |  |  | 12,803 |  |  | 15,118
Real estate – mortgage – commercial and other |  |  | 1,201 |  |  | 3,209 |  |  | 16,593 |  |  | 17,789 |  |  | 17,794 |  |  | 20,998
Total |  | $ | 1,950 |  |  | 5,183 |  |  | 125,644 |  |  | 145,698 |  |  | 127,594 |  |  | 150,881
The following table presents information regarding covered purchased nonimpaired loans since December 31, 2013. The amounts include principal only and do not reflect accrued interest as of the date of the acquisition or beyond.
($ in thousands) |  |
Carrying amount of nonimpaired covered loans at December 31, 2013 |  | $ | 207,167 |
Principal repayments |  |  | (50,183 | )
Transfers to foreclosed real estate |  |  | (5,061 | )
Transfers to non-covered loans due to expiration of loss-share agreement |  |  | (38,987 | )
Net loan (charge-offs) / recoveries |  |  | (3,301 | )
Accretion of loan discount |  |  | 16,009 |
Carrying amount of nonimpaired covered loans at December 31, 2014 |  |  | 125,644 |
Principal repayments |  |  | (25,051 | )
Transfers to foreclosed real estate |  |  | (1,129 | )
Net loan (charge-offs) / recoveries |  |  | 1,728 |
Accretion of loan discount |  |  | 3,897 |
Carrying amount of nonimpaired covered loans at September 30, 2015 |  | $ | 105,089 |
As reflected in the table above, the Company accreted $3,897,000 of the loan discount on purchased nonimpaired loans into interest income during the first nine months of 2015. As of September 30, 2015, there was remaining loan discount of $14,151,000 related to purchased accruing loans. If these loans continue to be repaid by the borrowers, the Company will accrete the remaining loan discount into interest income over the covered lives of the respective loans. In such circumstances, a corresponding entry to reduce the indemnification asset will be recorded amounting to approximately 80% of the loan discount accretion, which reduces noninterest income. At September 30, 2015, the Company also had $2,043,000 of loan discount related to purchased nonaccruing loans. It is not expected that a significant amount of this discount will be accreted, as it represents estimated losses on these loans. The following table presents information regarding all purchased impaired loans since December 31, 2013, the majority of which are covered loans. The Company has applied the cost recovery method to all purchased impaired loans at their respective acquisition dates due to the uncertainty as to the timing of expected cash flows, as reflected in the following table.
($ in thousands) Purchased Impaired Loans |  | Contractual Principal Receivable |  | Fair Market Value Adjustment – Write Down (Nonaccretable Difference) |  | Carrying Amount
Balance at December 31, 2013 |  | $ | 6,263 |  |  | 3,121 |  |  | 3,142
Change due to payments received |  |  | (599) |  |  | 227 |  |  | (826)
Change due to loan charge-off |  |  | (2) |  |  | 29 |  |  | (31)
Other |  |  | 197 |  |  | (115) |  |  | 312
Balance at December 31, 2014 |  | $ | 5,859 |  |  | 3,262 |  |  | 2,597
Change due to payments received |  |  | (330 | ) |  | 55 |  |  | (385)
Transfer to foreclosed real estate |  |  | (431 | ) |  | (336 | ) |  | (95)
Other |  |  | (3 | ) |  | (3 | ) |  | —
Balance at September 30, 2015 |  | $ | 5,095 |  |  | 2,978 |  |  | 2,117
Because of the uncertainty of the expected cash flows, the Company is accounting for each purchased impaired loan under the cost recovery method, in which all cash payments are applied to principal. Thus, there is no accretable yield associated with the above loans. During the first nine months of 2015 and 2014, the Company received $56,000 and $179,000, respectively, in payments that exceeded the initial carrying amount of the purchased impaired loans, which is included in the loan discount accretion amount discussed previously. Nonperforming assets are defined as nonaccrual loans, restructured loans, loans past due 90 or more days and still accruing interest, nonperforming loans held for sale, and foreclosed real estate. Nonperforming assets are summarized as follows:
ASSET QUALITY DATA ($ in thousands) |  | September 30, 2015 |  | December 31, 2014 |  | September 30, 2014
Non-covered nonperforming assets |  |  |  |  |  |
Nonaccrual loans |  | $ | 42,347 |  | $ | 50,066 |  | $ | 53,620
Restructured loans - accruing |  |  | 29,250 |  |  | 35,493 |  |  | 31,501
Accruing loans > 90 days past due |  |  | — |  |  | — |  |  | —
Total non-covered nonperforming loans |  |  | 71,597 |  |  | 85,559 |  |  | 85,121
Foreclosed real estate |  |  | 9,304 |  |  | 9,771 |  |  | 11,705
Total non-covered nonperforming assets |  | $ | 80,901 |  | $ | 95,330 |  | $ | 96,826
Covered nonperforming assets |  |  |  |  |  |  |  |  |  |  |  |
Nonaccrual loans (1) |  | $ | 5,373 |  | $ | 10,508 |  | $ | 10,478
Restructured loans - accruing |  |  | 3,825 |  |  | 5,823 |  |  | 6,273
Accruing loans > 90 days past due |  |  | — |  |  | — |  |  | —
Total covered nonperforming loans |  |  | 9,198 |  |  | 16,331 |  |  | 16,751
Foreclosed real estate |  |  | 1,569 |  |  | 2,350 |  |  | 3,237
Total covered nonperforming assets |  | $ | 10,767 |  | $ | 18,681 |  | $ | 19,988
Total nonperforming assets |  | $ | 91,668 |  | $ | 114,011 |  | $ | 116,814
(1) | At September 30, 2015, December 31, 2014, and September 30, 2014, the contractual balance of the nonaccrual loans covered by FDIC loss share agreements was $10.1 million, $16.0 million, and $16.3 million, respectively.
At September 30, 2015, the Company had $3.0 million in residential mortgage loans in process of foreclosure. The remaining tables in this note present information derived from the Company's allowance for loan loss model. Relevant accounting guidance requires certain disclosures to be disaggregated based on how the Company develops its allowance for loan losses and manages its credit exposure. This model combines loan types in a different manner than the tables previously presented. The following table presents the Company's nonaccrual loans as of September 30, 2015.
($ in thousands) |  | Non-covered |  | Covered |  | Total
Commercial, financial, and agricultural: |  |  |  |  |  |
Commercial – unsecured |  | $ | 470 |  |  | 22 |  |  | 492
Commercial – secured |  |  | 2,253 |  |  | — |  |  | 2,253
Secured by inventory and accounts receivable |  |  | 84 |  |  | 23 |  |  | 107
Real estate – construction, land development & other land loans |  |  | 5,374 |  |  | 60 |  |  | 5,434
Real estate – residential, farmland and multi-family |  |  | 21,936 |  |  | 3,270 |  |  | 25,206
Real estate – home equity lines of credit |  |  | 2,110 |  |  | 362 |  |  | 2,472
Real estate – commercial |  |  | 9,762 |  |  | 1,636 |  |  | 11,398
Consumer |  |  | 358 |  |  | — |  |  | 358
Total |  | $ | 42,347 |  |  | 5,373 |  |  | 47,720
The following table presents the Company's nonaccrual loans as of December 31, 2014.
($ in thousands) |  | Non-covered |  | Covered |  | Total
Commercial, financial, and agricultural: |  |  |  |  |  |
Commercial – unsecured |  | $ | 187 |  |  | 1 |  |  | 188
Commercial – secured |  |  | 2,927 |  |  | — |  |  | 2,927
Secured by inventory and accounts receivable |  |  | 454 |  |  | 103 |  |  | 557
Real estate – construction, land development & other land loans |  |  | 7,891 |  |  | 1,140 |  |  | 9,031
Real estate – residential, farmland and multi-family |  |  | 24,459 |  |  | 7,785 |  |  | 32,244
Real estate – home equity lines of credit |  |  | 2,573 |  |  | 278 |  |  | 2,851
Real estate – commercial |  |  | 11,070 |  |  | 1,201 |  |  | 12,271
Consumer |  |  | 505 |  |  | — |  |  | 505
Total |  | $ | 50,066 |  |  | 10,508 |  |  | 60,574
The following table presents an analysis of the payment status of the Company's loans as of September 30, 2015.
($ in thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Nonaccrual Loans |  | Current |  | Total Loans Receivable
Non-covered loans |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 734 |  |  | — |  |  | 470 |  |  | 49,325 |  |  | 50,529
Commercial - secured |  |  | 772 |  |  | 73 |  |  | 2,253 |  |  | 114,989 |  |  | 118,087
Secured by inventory and accounts receivable |  |  | 366 |  |  | — |  |  | 84 |  |  | 33,177 |  |  | 33,627
Real estate – construction, land development & other land loans |  |  | 938 |  |  | 90 |  |  | 5,374 |  |  | 269,002 |  |  | 275,404
Real estate – residential, farmland, and multi-family |  |  | 5,404 |  |  | 1,948 |  |  | 21,936 |  |  | 822,084 |  |  | 851,372
Real estate – home equity lines of credit |  |  | 996 |  |  | 332 |  |  | 2,110 |  |  | 199,180 |  |  | 202,618
Real estate - commercial |  |  | 4,013 |  |  | 234 |  |  | 9,762 |  |  | 785,182 |  |  | 799,191
Consumer |  |  | 379 |  |  | 239 |  |  | 358 |  |  | 42,525 |  |  | 43,501
Total non-covered |  | $ | 13,602 |  |  | 2,916 |  |  | 42,347 |  |  | 2,315,464 |  |  | 2,374,329
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 765
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,375,094
Covered loans |  | $ | 340 |  |  | 751 |  |  | 5,373 |  |  | 100,145 |  |  | 106,609
Total loans |  | $ | 13,942 |  |  | 3,667 |  |  | 47,720 |  |  | 2,415,609 |  |  | 2,481,703
The Company had no non-covered or covered loans that were past due greater than 90 days and accruing interest at September 30, 2015. The following table presents an analysis of the payment status of the Company's loans as of December 31, 2014.
($ in thousands) |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | Nonaccrual Loans |  | Current |  | Total Loans Receivable
Non-covered loans |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 191 |  |  | 35 |  |  | 187 |  |  | 36,871 |  |  | 37,284
Commercial - secured |  |  | 1,003 |  |  | 373 |  |  | 2,927 |  |  | 102,671 |  |  | 106,974
Secured by inventory and accounts receivable |  |  | 30 |  |  | 225 |  |  | 454 |  |  | 21,761 |  |  | 22,470
Real estate – construction, land development & other land loans |  |  | 1,950 |  |  | 139 |  |  | 7,891 |  |  | 247,535 |  |  | 257,515
Real estate – residential, farmland, and multi-family |  |  | 11,272 |  |  | 3,218 |  |  | 24,459 |  |  | 807,884 |  |  | 846,833
Real estate – home equity lines of credit |  |  | 1,585 |  |  | 352 |  |  | 2,573 |  |  | 194,067 |  |  | 198,577
Real estate - commercial |  |  | 3,738 |  |  | 996 |  |  | 11,070 |  |  | 738,981 |  |  | 754,785
Consumer |  |  | 695 |  |  | 131 |  |  | 505 |  |  | 41,865 |  |  | 43,196
Total non-covered |  | $ | 20,464 |  |  | 5,469 |  |  | 50,066 |  |  | 2,191,635 |  |  | 2,267,634
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 946
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,268,580
Covered loans |  | $ | 4,385 |  |  | 964 |  |  | 10,508 |  |  | 111,737 |  |  | 127,594
Total loans |  | $ | 24,849 |  |  | 6,433 |  |  | 60,574 |  |  | 2,303,372 |  |  | 2,396,174
The Company had no non-covered or covered loans that were past due greater than 90 days and accruing interest at December 31, 2014. The following table presents the activity in the allowance for loan losses for non-covered loans for the three and nine months ended September 30, 2015.
($ in thousands) |  | Commercial, Financial and Agricultural |  | Real Estate – Construction, Land Development, & Other Land Loans |  | Real Estate – Residential, Farmland, and Multi- family |  | Real Estate – Home Equity Lines of Credit |  | Real Estate – Commercial and Other |  | Consumer |  | Unallo- cated |  | Total
As of and for the three months ended September 30, 2015 |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 5,564 |  | 5,016 |  | 9,641 |  | 3,167 |  | 4,723 |  | 948 |  | 1,096 |  | 30,155
Charge-offs |  | (523 | ) | (574 | ) | (1,949 | ) | (31 | ) | (198 | ) | (369 | ) | — |  | (3,644)
Recoveries |  | 387 |  | 625 |  | 98 |  | 43 |  | 140 |  | 84 |  | — |  | 1,377
Provisions |  | (185 | ) | (1,105 | ) | 1,341 |  | (565 | ) | 249 |  | 216 |  | 316 |  | 267
Ending balance |  | $ | 5,243 |  | 3,962 |  | 9,131 |  | 2,614 |  | 4,914 |  | 879 |  | 1,412 |  | 28,155
As of and for the nine months ended September 30, 2015 |  |  |  |  |  |  |  |
Beginning balance |  | $ | 8,391 |  |  | 6,470 |  |  | 9,720 |  |  | 3,731 |  |  | 9,045 |  |  | 841 |  |  | 147 |  |  | 38,345
Charge-offs |  |  | (3,550 | ) |  | (2,532 | ) |  | (4,362 | ) |  | (594 | ) |  | (2,147 | ) |  | (1,222 | ) |  | — |  |  | (14,407)
Recoveries |  |  | 735 |  |  | 942 |  |  | 270 |  |  | 88 |  |  | 535 |  |  | 275 |  |  | — |  |  | 2,845
Provisions |  |  | (333 | ) |  | (918 | ) |  | 3,503 |  |  | (611 | ) |  | (2,519 | ) |  | 985 |  |  | 1,265 |  |  | 1,372
Ending balance |  | $ | 5,243 |  |  | 3,962 |  |  | 9,131 |  |  | 2,614 |  |  | 4,914 |  |  | 879 |  |  | 1,412 |  |  | 28,155
Ending balances as of September 30, 2015: Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 135 |  |  | 250 |  |  | 1,575 |  |  | — |  |  | 449 |  |  | — |  |  | — |  |  | 2,409
Collectively evaluated for impairment |  | $ | 5,108 |  |  | 3,712 |  |  | 7,556 |  |  | 2,614 |  |  | 4,465 |  |  | 879 |  |  | 1,412 |  |  | 25,746
Loans acquired with deteriorated credit quality |  | $ | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loans receivable as of September 30, 2015: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance - total |  | $ | 202,243 |  |  | 275,404 |  |  | 851,372 |  |  | 202,618 |  |  | 799,191 |  |  | 43,501 |  |  | — |  |  | 2,374,329
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 765
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,375,094
Ending balances as of September 30, 2015: Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 986 |  |  | 4,685 |  |  | 23,599 |  |  | — |  |  | 16,655 |  |  | — |  |  | — |  |  | 45,925
Collectively evaluated for impairment |  | $ | 201,257 |  |  | 270,719 |  |  | 827,773 |  |  | 202,618 |  |  | 781,939 |  |  | 43,501 |  |  | — |  |  | 2,327,807
Loans acquired with deteriorated credit quality |  | $ | — |  |  | — |  |  | — |  |  | — |  |  | 597 |  |  | — |  |  | — |  |  | 597
The following table presents the activity in the allowance for loan losses for non-covered loans for the year ended December 31, 2014.
($ in thousands) |  | Commercial, Financial, and Agricultural |  | Real Estate – Construction, Land Development, & Other Land Loans |  | Real Estate – Residential, Farmland, and Multi- family |  | Real Estate – Home Equity Lines of Credit |  | Real Estate – Commercial and Other |  | Consumer |  | Unallo- cated |  | Total
As of and for the year ended December 31, 2014 |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 7,432 |  |  | 12,966 |  |  | 15,142 |  |  | 1,838 |  |  | 5,524 |  |  | 1,513 |  |  | (152) |  |  | 44,263
Charge-offs |  |  | (4,039) |  |  | (2,148) |  |  | (4,417) |  |  | (912) |  |  | (3,048) |  |  | (1,724) |  |  | — |  |  | (16,288)
Recoveries |  |  | 140 |  |  | 398 |  |  | 331 |  |  | 45 |  |  | 181 |  |  | 451 |  |  | — |  |  | 1,546
Transfer from covered category |  |  | 36 |  |  | 813 |  |  | 51 |  |  | — |  |  | 833 |  |  | 4 |  |  | — |  |  | 1,737
Provisions |  |  | 4,822 |  |  | (5,559) |  |  | (1,387) |  |  | 2,760 |  |  | 5,555 |  |  | 597 |  |  | 299 |  |  | 7,087
Ending balance |  | $ | 8,391 |  |  | 6,470 |  |  | 9,720 |  |  | 3,731 |  |  | 9,045 |  |  | 841 |  |  | 147 |  |  | 38,345
Endi ng balances as of December 31, 2014: Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 211 |  |  | 415 |  |  | 1,686 |  |  | — |  |  | 165 |  |  | — |  |  | — |  |  | 2,477
Collectively evaluated for impairment |  | $ | 8,180 |  |  | 6,055 |  |  | 8,034 |  |  | 3,731 |  |  | 8,880 |  |  | 841 |  |  | 147 |  |  | 35,868
Loans acquired with deteriorated credit quality |  | $ | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loans receivable as of December 31, 2014: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance - total |  | $ | 166,728 |  |  | 257,515 |  |  | 846,833 |  |  | 198,577 |  |  | 754,785 |  |  | 43,196 |  |  | — |  |  | 2,267,634
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 946
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,268,580
Ending balances as of December 31, 2014: Loans |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 784 |  |  | 7,991 |  |  | 20,263 |  |  | 476 |  |  | 20,263 |  |  | 7 |  |  | — |  |  | 53,531
Collectively evaluated for impairment |  | $ | 165,944 |  |  | 249,524 |  |  | 733,875 |  |  | 198,101 |  |  | 733,875 |  |  | 43,189 |  |  | — |  |  | 2,213,456
Loans acquired with deteriorated credit quality |  | $ | — |  |  | — |  |  | — |  |  | — |  |  | 647 |  |  | — |  |  | — |  |  | 647
The following table presents the activity in the allowance for loan losses for non-covered loans for the three and nine months ended September 30, 2014.
($ in thousands) |  | Commercial, Financial, and Agricultural |  | Real Estate – Construction, Land Development, & Other Land Loans |  | Real Estate – Residential, Farmland, and Multi- family |  | Real Estate – Home Equity Lines of Credit |  | Real Estate – Commercial and Other |  | Consumer |  | Unallo- cated |  | Total
As of and for the three months ended September 30, 2014 |  |  |  |  |  |  |  |
Beginning balance |  | $ | 8,948 |  | 7,414 |  | 11,132 |  | 3,755 |  | 9,212 |  | 906 |  | 599 |  | 41,966
Charge-offs |  | (840) |  | (470) |  | (874) |  | (116) |  | (987) |  | (463) |  | — |  | (3,750)
Recoveries |  | 32 |  | 40 |  | 111 |  | 7 |  | 14 |  | 128 |  | — |  | 332
Transfer from covered category |  | 36 |  | 813 |  | 51 |  | — |  | 833 |  | 4 |  | — |  | 1,737
Provisions |  | 1,185 |  | (574) |  | (194) |  | 49 |  | 971 |  | 343 |  | (501) |  | 1,279
Ending balance |  | $ |  | 9,361 |  | 7,223 |  | 10,226 |  | 3,695 |  | 10,043 |  | 918 |  | 98 |  | 41,564
As of and for the nine months ended September 30, 2014 |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 7,432 |  |  | 12,966 |  |  | 15,142 |  |  | 1,838 |  |  | 5,524 |  |  | 1,513 |  |  | (152) |  |  | 44,263
Charge-offs |  |  | (3,506) |  |  | (1,704) |  |  | (2,505) |  |  | (619) |  |  | (1,876) |  |  | (1,262) |  |  | — |  |  | (11,472)
Recoveries |  |  | 81 |  |  | 349 |  |  | 290 |  |  | 18 |  |  | 135 |  |  | 361 |  |  | — |  |  | 1,234
Transfer from covered category |  |  | 36 |  |  | 813 |  |  | 51 |  |  | — |  |  | 833 |  |  | 4 |  |  | — |  |  | 1,737
Provisions |  |  | 5,318 |  |  | (5,201) |  |  | (2,752) |  |  | 2,458 |  |  | 5,427 |  |  | 302 |  |  | 250 |  |  | 5,802
Ending balance |  | $ | 9,361 |  |  | 7,223 |  |  | 10,226 |  |  | 3,695 |  |  | 10,043 |  |  | 918 |  |  | 98 |  |  | 41,564
Endi ng balances as of September 30, 2014: Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 381 |  |  | 513 |  |  | 1,771 |  |  | — |  |  | 229 |  |  | 20 |  |  | — |  |  | 2,914
Collectively evaluated for impairment |  | $ | 8,980 |  |  | 6,710 |  |  | 8,455 |  |  | 3,695 |  |  | 9,814 |  |  | 898 |  |  | 98 |  |  | 38,650
Loans acquired with deteriorated credit quality |  | $ | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | —
Loans receivable as of September 30, 2014: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance - total |  | $ | 170,648 |  |  | 266,419 |  |  | 860,218 |  |  | 198,977 |  |  | 752,108 |  |  | 43,741 |  |  | — |  |  | 2,292,111
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 730
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,292,841
Ending balances as of September 30, 2014: Loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 972 |  |  | 8,613 |  |  | 24,233 |  |  | 481 |  |  | 20,128 |  |  | 34 |  |  | — |  |  | 54,461
Collectively evaluated for impairment |  | $ | 169,676 |  |  | 257,806 |  |  | 835,985 |  |  | 198,496 |  |  | 731,316 |  |  | 43,707 |  |  | — |  |  | 2,236,986
Loans acquired with deteriorated credit quality |  | $ | — |  |  | — |  |  | — |  |  | — |  |  | 664 |  |  | — |  |  | — |  |  | 664
The following table presents the activity in the allowance for loan losses for covered loans for the three and nine months ended September 30, 2015.
($ in thousands) |  | Covered Loans |
As of and for the three months ended September 30, 2015 |  |  |  |
Beginning balance |  | $ | 1,935 |
Charge-offs |  |  | (84 | )
Recoveries |  |  | 1,730 |
Provisions |  |  | (1,681 | )
Ending balance |  | $ | 1,900 |
As of and for the nine months ended September 30, 2015
Beginning balance |  | $ | 2,281 |
Charge-offs |  |  | (1,200 | )
Recoveries |  |  | 2,928 |
Provisions |  |  | (2,109 | )
Ending balance |  | $ | 1,900 |
Ending balances as of September 30, 2015: Allowance for loan losses |  |  |  |
Individually evaluated for impairment |  | $ | 466 |
Collectively evaluated for impairment |  |  | 1,391 |
Loans acquired with deteriorated credit quality |  |  | 43 |
Loans receivable as of September 30, 2015: |  |  |  |
Ending balance – total |  | $ | 106,609 |
Ending balances as of September 30, 2015: Loans |  |  |  |
Individually evaluated for impairment |  | $ | 5,197 |
Collectively evaluated for impairment |  |  | 99,892 |
Loans acquired with deteriorated credit quality |  |  | 1,520 |
The following table presents the activity in the allowance for loan losses for covered loans for the year ended December 31, 2014.
($ in thousands) |  | Covered Loans |
As of and for the year ended December 31, 2014
Beginning balance |  | $ | 4,242 |
Charge-offs |  |  | (6,948 | )
Recoveries |  |  | 3,616 |
Transferred to non-covered |  |  | (1,737 | )
Provisions |  |  | 3,108 |
Ending balance |  | $ | 2,281 |
Ending balances as of December 31, 2014: Allowance for loan losses |  |  |  |
Individually evaluated for impairment |  | $ | 1,161 |
Collectively evaluated for impairment |  |  | 1,046 |
Loans acquired with deteriorated credit quality |  |  | 74 |
Loans receivable as of December 31, 2014: |  |  |  |
Ending balance – total |  | $ | 127,594 |
Ending balances as of December 31, 2014: Loans |  |  |  |
Individually evaluated for impairment |  | $ | 11,484 |
Collectively evaluated for impairment |  |  | 114,160 |
Loans acquired with deteriorated credit quality |  |  | 1,950 |
The following table presents the activity in the allowance for loan losses for covered loans for the three and nine months ended September 30, 2014.
($ in thousands) |  | Covered Loans |
As of and for the three months ended September 30, 2014 |  |  |  |
Beginning balance |  | $ | 3,830 |
Charge-offs |  |  | (195 | )
Recoveries |  |  | 463 |
Transferred to non-covered |  |  | (1,737 | )
Provisions |  |  | 206 |
Ending balance |  | $ | 2,567 |
As of and for the nine months ended September 30, 2014
Beginning balance |  | $ | 4,242 |
Charge-offs |  |  | (5,865 | )
Recoveries |  |  | 3,010 |
Transferred to non-covered |  |  | (1,737 | )
Provisions |  |  | 2,917 |
Ending balance |  | $ | 2,567 |
Ending balances as of September 30, 2014: Allowance for loan losses |  |  |  |
Individually evaluated for impairment |  | $ | 1,537 |
Collectively evaluated for impairment |  |  | 1,003 |
Loans acquired with deteriorated credit quality |  |  | 27 |
Loans receivable as of September 30, 2014: |  |  |  |
Ending balance – total |  | $ | 133,249 |
Ending balances as of September 30, 2014: Loans |  |  |  |
Individually evaluated for impairment |  | $ | 11,258 |
Collectively evaluated for impairment |  |  | 119,953 |
Loans acquired with deteriorated credit quality |  |  | 2,038 |
The following table presents loans individually evaluated for impairment by class of loans as of September 30, 2015.
($ in thousands) |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |
Non-covered loans with no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 271 |  |  |  | 311 |  |  |  | — |  |  |  | 102 |
Commercial - secured |  |  | 92 |  |  |  | 95 |  |  |  | — |  |  |  | 56 |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 3,729 |  |  |  | 7,090 |  |  |  | — |  |  |  | 4,716 |
Real estate – residential, farmland, and multi-family |  |  | 9,466 |  |  |  | 10,839 |  |  |  | — |  |  |  | 9,548 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 119 |
Real estate – commercial |  |  | 12,531 |  |  |  | 14,149 |  |  |  | — |  |  |  | 15,731 |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Total non-covered impaired loans with no allowance |  | $ | 26,089 |  |  |  | 32,484 |  |  |  | — |  |  |  | 30,274 |
Total covered impaired loans with no allowance |  | $ | 3,742 |  |  |  | 7,380 |  |  |  | — |  |  |  | 5,701 |
Total impaired loans with no allowance recorded |  | $ | 29,831 |  |  |  | 39,864 |  |  |  | — |  |  |  | 35,975 |
Non-covered loans with an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 148 |  |  |  | 155 |  |  |  | 43 |  |  |  | 139 |
Commercial - secured |  |  | 475 |  |  |  | 496 |  |  |  | 92 |  |  |  | 538 |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 956 |  |  |  | 1,002 |  |  |  | 250 |  |  |  | 1,363 |
Real estate – residential, farmland, and multi-family |  |  | 14,133 |  |  |  | 14,526 |  |  |  | 1,575 |  |  |  | 14,194 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | 4,721 |  |  |  | 4,793 |  |  |  | 449 |  |  |  | 3,608 |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total non-covered impaired loans with allowance |  | $ | 20,433 |  |  |  | 20,972 |  |  |  | 2,409 |  |  |  | 19,842 |
Total covered impaired loans with allowance |  | $ | 2,975 |  |  |  | 3,268 |  |  |  | 509 |  |  |  | 3,874 |
Total impaired loans with an allowance recorded |  | $ | 23,408 |  |  |  | 24,240 |  |  |  | 2,918 |  |  |  | 23,716 |
Interest income recorded on non-covered and covered impaired loans during the nine months September 30, 2015 was insignificant. The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2014.
($ in thousands) |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |
Non-covered loans with no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 33 |  |  |  | 35 |  |  |  | — |  |  |  | 20 |
Commercial - secured |  |  | 5 |  |  |  | 6 |  |  |  | — |  |  |  | 95 |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 6,877 |  |  |  | 7,944 |  |  |  | — |  |  |  | 6,430 |
Real estate – residential, farmland, and multi-family |  |  | 9,165 |  |  |  | 10,225 |  |  |  | — |  |  |  | 7,776 |
Real estate – home equity lines of credit |  |  | 476 |  |  |  | 498 |  |  |  | — |  |  |  | 388 |
Real estate – commercial |  |  | 17,409 |  |  |  | 20,786 |  |  |  | — |  |  |  | 11,911 |
Consumer |  |  | 7 |  |  |  | 10 |  |  |  | — |  |  |  | 7 |
Total non-covered impaired loans with no allowance |  | $ | 33,972 |  |  |  | 39,504 |  |  |  | — |  |  |  | 26,627 |
Total covered impaired loans with no allowance |  | $ | 8,097 |  |  |  | 12,081 |  |  |  | — |  |  |  | 16,986 |
Total impaired loans with no allowance recorded |  | $ | 42,069 |  |  |  | 51,585 |  |  |  | — |  |  |  | 43,613 |
Non-covered loans with an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 140 |  |  |  | 143 |  |  |  | 47 |  |  |  | 142 |
Commercial - secured |  |  | 606 |  |  |  | 612 |  |  |  | 164 |  |  |  | 550 |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 15 |
Real estate – construction, land development & other land loans |  |  | 1,114 |  |  |  | 3,243 |  |  |  | 415 |  |  |  | 1,487 |
Real estate – residential, farmland, and multi-family |  |  | 14,845 |  |  |  | 15,257 |  |  |  | 1,686 |  |  |  | 14,418 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4 |
Real estate – commercial |  |  | 3,501 |  |  |  | 3,530 |  |  |  | 165 |  |  |  | 6,420 |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 8 |
Total non-covered impaired loans with allowance |  | $ | 20,206 |  |  |  | 22,785 |  |  |  | 2,477 |  |  |  | 23,044 |
Total covered impaired loans with allowance |  | $ | 5,220 |  |  |  | 5,719 |  |  |  | 1,229 |  |  |  | 8,513 |
Total impaired loans with an allowance recorded |  | $ | 25,426 |  |  |  | 28,504 |  |  |  | 3,706 |  |  |  | 31,557 |
Interest income recorded on non-covered and covered impaired loans during the year ended December 31, 2014 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 monthly 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:
| Numerical Risk Grade | Description
Pass: |
| 1 | Loans with virtually no risk, including cash secured loans.
| 2 | Loans with documented significant overall financial strength, including non-cash secured or unsecured loans that have no minor or major exceptions to the lending guidelines.
| 3 | Loans with documented satisfactory overall financial strength, including non-cash secured or unsecured loans that have no major exceptions to the lending guidelines. If unsecured, loans would include support of a strong guarantor or co-maker.
| 4 | Loans to borrowers with acceptable financial condition, including non-cash secured or unsecured loans that have minor or major exceptions to the lending guidelines, but the exceptions are properly mitigated. Primary or secondary source of repayment is sufficient and if secured, loan would include the support of a satisfactory guarantor or co-maker.
Watch or Standard: |
| 9 | Existing loans that meet the guidelines for a Risk Graded 5 loan, except the collateral coverage is sufficient to satisfy the debt with no risk of loss under reasonable circumstances.
Special Mention: |
| 5 | Existing loans with major exceptions that cannot be mitigated. Potential for loss is possible.
Classified: |
| 6 | Loans that have a well-defined weakness that may jeopardize the liquidation of the debt if deficiencies are not corrected. Loss is not only possible, but probable.
| 7 | Loans that have a well-defined weakness that make the collection or liquidation improbable. Loss appears imminent, but the exact amount and timing is uncertain.
| 8 | 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.
The following table presents the Company's recorded investment in loans by credit quality indicators as of September 30, 2015.
($ in thousands) |  | Credit Quality Indicator (Grouped by Internally Assigned Grade) |  |
|  | Pass (Grades 1, 2, & 3) |  |  | Pass – Acceptable/ Average (Grade 4) |  |  | Watch or Standard Loans (Grade 9) |  |  | Special Mention Loans (Grade 5) |  |  | Classified Loans (Grades 6, 7, & 8) |  |  | Nonaccrual Loans |  |  | Total |
Non-covered loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 28,490 |  |  |  | 19,737 |  |  |  | — |  |  |  | 1,161 |  |  |  | 671 |  |  |  | 470 |  |  |  | 50,529 |
Commercial - secured |  |  | 54,927 |  |  |  | 55,401 |  |  |  | 32 |  |  |  | 3,224 |  |  |  | 2,250 |  |  |  | 2,253 |  |  |  | 118,087 |
Secured by inventory and accounts receivable |  |  | 13,154 |  |  |  | 19,525 |  |  |  | — |  |  |  | 273 |  |  |  | 591 |  |  |  | 84 |  |  |  | 33,627 |
Real estate – construction, land development & other land loans |  |  | 96,745 |  |  |  | 151,784 |  |  |  | 679 |  |  |  | 12,355 |  |  |  | 8,467 |  |  |  | 5,374 |  |  |  | 275,404 |
Real estate – residential, farmland, and multi-family |  |  | 213,179 |  |  |  | 535,203 |  |  |  | 4,420 |  |  |  | 44,175 |  |  |  | 32,459 |  |  |  | 21,936 |  |  |  | 851,372 |
Real estate – home equity lines of credit |  |  | 129,421 |  |  |  | 60,464 |  |  |  | 1,412 |  |  |  | 5,067 |  |  |  | 4,144 |  |  |  | 2,110 |  |  |  | 202,618 |
Real estate - commercial |  |  | 281,428 |  |  |  | 461,060 |  |  |  | 8,102 |  |  |  | 26,880 |  |  |  | 11,959 |  |  |  | 9,762 |  |  |  | 799,191 |
Consumer |  |  | 29,371 |  |  |  | 12,841 |  |  |  | 52 |  |  |  | 400 |  |  |  | 479 |  |  |  | 358 |  |  |  | 43,501 |
Total |  | $ | 846,715 |  |  |  | 1,316,015 |  |  |  | 14,697 |  |  |  | 93,535 |  |  |  | 61,020 |  |  |  | 42,347 |  |  |  | 2,374,329 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 765 |
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,375,094 |
Total covered loans |  | $ | 12,332 |  |  |  | 61,065 |  |  |  | 253 |  |  |  | 8,505 |  |  |  | 19,081 |  |  |  | 5,373 |  |  |  | 106,609 |
Total loans |  | $ | 859,047 |  |  |  | 1,377,080 |  |  |  | 14,950 |  |  |  | 102,040 |  |  |  | 80,101 |  |  |  | 47,720 |  |  |  | 2,481,703 |
At September 30, 2015, there was an insignificant amount of loans that were graded “8” with an accruing status. The following table presents the Company's recorded investment in loans by credit quality indicators as of December 31, 2014.
($ in thousands) |  | Credit Quality Indicator (Grouped by Internally Assigned Grade) |  |
|  | Pass (Grades 1, 2, & 3) |  |  | Pass – Acceptable/ Average (Grade 4) |  |  | Watch or Standard Loans (Grade 9) |  |  | Special Mention Loans (Grade 5) |  |  | Classified Loans (Grades 6, 7, & 8) |  |  | Nonaccrual Loans |  |  | Total |
Non-covered loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial - unsecured |  | $ | 17,856 |  |  |  | 15,649 |  |  |  | 5 |  |  |  | 1,356 |  |  |  | 2,231 |  |  |  | 187 |  |  |  | 37,284 |
Commercial - secured |  |  | 32,812 |  |  |  | 62,361 |  |  |  | 62 |  |  |  | 4,481 |  |  |  | 4,331 |  |  |  | 2,927 |  |  |  | 106,974 |
Secured by inventory and accounts receivable |  |  | 10,815 |  |  |  | 9,928 |  |  |  | — |  |  |  | 767 |  |  |  | 506 |  |  |  | 454 |  |  |  | 22,470 |
Real estate – construction, land development & other land loans |  |  | 87,806 |  |  |  | 135,072 |  |  |  | 771 |  |  |  | 13,066 |  |  |  | 12,909 |  |  |  | 7,891 |  |  |  | 257,515 |
Real estate – residential, farmland, and multi-family |  |  | 221,581 |  |  |  | 520,790 |  |  |  | 4,536 |  |  |  | 40,993 |  |  |  | 34,474 |  |  |  | 24,459 |  |  |  | 846,833 |
Real estate – home equity lines of credit |  |  | 122,528 |  |  |  | 62,642 |  |  |  | 1,135 |  |  |  | 5,166 |  |  |  | 4,533 |  |  |  | 2,573 |  |  |  | 198,577 |
Real estate - commercial |  |  | 223,197 |  |  |  | 465,395 |  |  |  | 9,057 |  |  |  | 30,318 |  |  |  | 15,748 |  |  |  | 11,070 |  |  |  | 754,785 |
Consumer |  |  | 25,520 |  |  |  | 15,614 |  |  |  | 54 |  |  |  | 855 |  |  |  | 648 |  |  |  | 505 |  |  |  | 43,196 |
Total |  | $ | 742,115 |  |  |  | 1,287,451 |  |  |  | 15,620 |  |  |  | 97,002 |  |  |  | 75,380 |  |  |  | 50,066 |  |  |  | 2,267,634 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 946 |
Total non-covered loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 2,268,580 |
Total covered loans |  | $ | 14,349 |  |  |  | 70,989 |  |  |  | 632 |  |  |  | 10,503 |  |  |  | 20,613 |  |  |  | 10,508 |  |  |  | 127,594 |
Total loans |  | $ | 756,464 |  |  |  | 1,358,440 |  |  |  | 16,252 |  |  |  | 107,505 |  |  |  | 95,993 |  |  |  | 60,574 |  |  |  | 2,396,174 |
At December 31, 2014, there was an insignificant amount of loans that were graded “8” with an accruing status. 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 modified during the periods ended September 30, 2015 and 2014 related 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, 2015 and 2014.
($ in thousands) |  | For the three months ended |  |  | For the three months ended |
|  | September 30, 2015 |  |  | September 30, 2014 |
|  | Number of Contracts |  |  | Pre-Modification Restructured Balances |  |  | Post-Modification Restructured Balances |  |  | Number of Contracts |  |  | Pre-Modification Restructured Balances |  |  | Post-Modification Restructured Balances |
Non-covered TDRs – Accruing |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial – unsecured |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | — |  |  | $ | — |  |  | $ | — |
Commercial – secured |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 1 |  |  |  | 235 |  |  |  | 235 |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – residential, farmland, and multi-family |  |  | 1 |  |  |  | 21 |  |  |  | 21 |  |  |  | 1 |  |  |  | 36 |  |  |  | 36 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | 1 |  |  |  | 390 |  |  |  | 390 |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Non-covered TDRs – Nonaccrual |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial – unsecured |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial – secured |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 15 |  |  |  | 15 |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 2 |  |  |  | 495 |  |  |  | 495 |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – residential, farmland, and multi-family |  |  | 1 |  |  |  | 95 |  |  |  | 95 |  |  |  | 3 |  |  |  | 275 |  |  |  | 275 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total non-covered TDRs arising during period |  |  | 6 |  |  |  | 1,236 |  |  |  | 1,236 |  |  |  | 5 |  |  |  | 326 |  |  |  | 326 |
Total covered TDRs arising during period – Accruing |  |  | — |  |  | $ | — |  |  | $ | — |  |  |  | 1 |  |  | $ | 680 |  |  | $ | 667 |
Total covered TDRs arising during period – Nonaccrual |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 150 |  |  |  | 145 |
Total TDRs arising during period |  |  | 6 |  |  | $ | 1,236 |  |  | $ | 1,236 |  |  |  | 8 |  |  | $ | 1,156 |  |  | $ | 1,138 |
The following table presents information related to loans modified in a troubled debt restructuring during the nine months ended September 30, 2015 and 2014.
($ in thousands) |  | For the nine months ended September 30, 2015 |  |  | For the nine months ended September 30, 2014 |
|  | Number of Contracts |  |  | Pre- Modification Restructured Balances |  |  | Post- Modification Restructured Balances |  |  | Number of Contracts |  |  | Pre- Modification Restructured Balances |  |  | Post- Modification Restructured Balances |
Non-covered TDRs – Accruing |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial – unsecured |  |  | 1 |  |  | $ | 8 |  |  | $ | 8 |  |  |  | — |  |  | $ | — |  |  | $ | — |
Commercial – secured |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 1 |  |  |  | 235 |  |  |  | 235 |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – residential, farmland, and multi-family |  |  | 3 |  |  |  | 286 |  |  |  | 286 |  |  |  | 8 |  |  |  | 784 |  |  |  | 784 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | 2 |  |  |  | 441 |  |  |  | 441 |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Non-covered TDRs – Nonaccrual |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial – unsecured |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial – secured |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 15 |  |  |  | 15 |
Secured by inventory and accounts receivable |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – construction, land development & other land loans |  |  | 2 |  |  |  | 495 |  |  |  | 495 |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – residential, farmland, and multi-family |  |  | 5 |  |  |  | 400 |  |  |  | 400 |  |  |  | 7 |  |  |  | 713 |  |  |  | 713 |
Real estate – home equity lines of credit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Consumer |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total non-covered TDRs arising during period |  |  | 14 |  |  |  | 1,865 |  |  |  | 1,865 |  |  |  | 16 |  |  |  | 1,512 |  |  |  | 1,512 |
Total covered TDRs arising during period– Accruing |  |  | 2 |  |  | $ | 139 |  |  | $ | 139 |  |  |  | 3 |  |  | $ | 928 |  |  | $ | 912 |
Total covered TDRs arising during period – Nonaccrual |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | 860 |  |  |  | 827 |
Total TDRs arising during period |  |  | 16 |  |  | $ | 2,004 |  |  | $ | 2,004 |  |  |  | 26 |  |  | $ | 3,300 |  |  | $ | 3,251 |
Accruing restructured loans that were modified in the previous 12 months and that defaulted during the three months ended September 30, 2015 and 2014 are presented in the table below. The Company considers a loan to have defaulted when it becomes 90 or more days delinquent under the modified terms, has been transferred to nonaccrual status, or has been transferred to foreclosed real estate.
($ in thousands) |  | For the three months ended |  |  | For the three months ended |
|  | September 30, 2015 |  |  | September 30, 2014 |
|  | Number of Contracts |  |  | Recorded Investment |  |  | Number of Contracts |  |  | Recorded Investment |
Non-covered accruing TDRs that subsequently defaulted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial – unsecured |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Real estate – construction, land development & other land loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Real estate – residential, farmland, and multi-family |  |  | 1 |  |  |  | 152 |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |
Total non-covered TDRs that subsequently defaulted |  |  | 1 |  |  | $ | 152 |  |  |  | — |  |  | $ | — |
Total accruing covered TDRs that subsequently defaulted |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Total accruing TDRs that subsequently defaulted |  |  | 1 |  |  | $ | 152 |  |  |  | — |  |  | $ | — |
Accruing restructured loans that were modified in the previous 12 months and that defaulted during the nine months ended September 30, 2015 and 2014 are presented in the table below.
($ in thousands) |  | For the nine months ended September 30, 2015 |  |  | For the nine months ended September 30, 2014 |
|  | Number of Contracts |  |  | Recorded Investment |  |  | Number of Contracts |  |  | Recorded Investment |
Non-covered accruing TDRs that subsequently defaulted |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial – unsecured |  |  | 1 |  |  | $ | 7 |  |  |  | — |  |  | $ | — |
Real estate – construction, land development & other land loans |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 5 |
Real estate – residential, farmland, and multi-family |  |  | 2 |  |  |  | 186 |  |  |  | — |  |  |  | — |
Real estate – commercial |  |  | — |  |  |  | — |  |  |  | 1 |  |  |  | 71 |
Total non-covered TDRs that subsequently defaulted |  |  | 3 |  |  | $ | 193 |  |  |  | 2 |  |  | $ | 76 |
Total accruing covered TDRs that subsequently defaulted |  |  | — |  |  | $ | — |  |  |  | — |  |  | $ | — |
Total accruing TDRs that subsequently defaulted |  |  | 3 |  |  | $ | 193 |  |  |  | 2 |  |  | $ | 76 |

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e4975-111524 + Details
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