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Loans and Asset Quality Information | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Loans and Asset Quality Information | Loans and Asset Quality Information The following is a summary of the major categories of total loans outstanding:
($ in thousands) | September 30, 2020 |  | December 31, 2019
| Amount |  | Percentage |  | Amount |  | Percentage
All loans: |  |  |  |  |  |  |
Commercial, financial, and agricultural | $ | 804,831 |  |  | 17 | % |  | $ | 504,271 |  |  | 11 | %
Real estate – construction, land development & other land loans | 653,120 |  |  | 14 | % |  | 530,866 |  |  | 12 | %
Real estate – mortgage – residential (1-4 family) first mortgages | 1,017,087 |  |  | 21 | % |  | 1,105,014 |  |  | 25 | %
Real estate – mortgage – home equity loans / lines of credit | 310,326 |  |  | 6 | % |  | 337,922 |  |  | 8 | %
Real estate – mortgage – commercial and other | 1,983,622 |  |  | 41 | % |  | 1,917,280 |  |  | 43 | %
Consumer loans | 50,189 |  |  | 1 | % |  | 56,172 |  |  | 1 | %
Subtotal | 4,819,175 |  |  | 100 | % |  | 4,451,525 |  |  | 100 | %
Unamortized net deferred loan costs (fees) | (5,439) |  |  |  |  | 1,941 |  |  |
Total loans | $ | 4,813,736 |  |  |  |  | $ | 4,453,466 |  |  |
Included in the table above are PPP loans totaling $244.9 million that are in the line item "Commercial, financial and agricultural." PPP loans are fully guaranteed by the SBA. Included in unamortized net deferred loan fees are $7.6 million in unamortized net deferred loan fees associated with PPP loans. These fees are being amortized under the effective interest method over the terms of the loans. Accelerated amortization will be recorded in the periods in which principal amounts are forgiven in accordance with the terms of the program. Also included in the table above are various non-PPP SBA loans, with additional information on these loans presented in the table below.
($ in thousands) | September 30, 2020 |  | December 31, 2019
Guaranteed portions of non-PPP SBA loans included in table above | $ | 46,085 |  |  | 54,400 |
Unguaranteed portions of SBA Loans included in table above | 134,953 |  |  | 110,782 |
Total non-PPP SBA loans included in the table above | $ | 181,038 |  |  | 165,182 |
Sold portions of SBA with servicing retained - not included in tables above | $ | 379,123 |  |  | 316,730 |
At September 30, 2020 and December 31, 2019, there was a remaining unaccreted discount on the retained portion of sold SBA loans amounting to $7.1 million at both period ends. The Company has several acquired loan portfolios as a result of merger and acquisition transactions. In these transactions, the Company recorded loans at their fair value as required by applicable accounting guidance. Included in these loan portfolios were purchased credit impaired (“PCI”) loans, which are loans for which it is probable at acquisition date that all contractually required payments will not be collected. The remaining loans were considered to be purchased non-impaired loans and their related fair value discount or premium is being recognized as an adjustment to yield over the remaining life of each loan. As of September 30, 2020 and December 31, 2019, there were remaining accretable discounts of $8.6 million and $11.1 million, respectively, related to purchased non-impaired loans. The discounts are amortized as yield adjustments over the respective lives of the loans, so long as the loans perform. The following table presents changes in the carrying value of PCI loans.
PCI loans | For the Nine Months Ended September 30, 2020 |  | For the Nine Months Ended September 30, 2019
Balance at beginning of period | $ | 12,664 |  |  | 17,393 |
Change due to payments received and accretion | (3,062) |  |  | (3,694) |
Change due to loan charge-offs | (13) |  |  | (11) |
Transfers to foreclosed real estate | — |  |  | — |
Other | 27 |  |  | 110 |
Balance at end of period | $ | 9,616 |  |  | 13,798 |
The following table presents changes in the accretable yield for PCI loans.
Accretable Yield for PCI loans | For the Nine Months Ended September 30, 2020 |  | For the Nine Months Ended September 30, 2019
Balance at beginning of period | $ | 4,149 |  |  | 4,750 |
Accretion | (927) |  |  | (1,050) |
Reclassification from (to) nonaccretable difference | 400 |  |  | 583 |
Other, net | (481) |  |  | 211 |
Balance at end of period | $ | 3,141 |  |  | 4,494 |
During the first nine months of 2020, the Company received $446,000 in payments that exceeded the carrying amount of the related PCI loans, of which $352,000 was recognized as loan discount accretion income, $80,000 was recorded as additional loan interest income, and $14,000 was recorded as a recovery. During the first nine months of 2019, the Company received $291,000 in payments that exceeded the carrying amount of the related PCI loans, of which $263,000 was recognized as loan discount accretion income and $28,000 was recorded as additional loan interest income. Nonperforming assets are defined as nonaccrual loans, restructured loans, loans past due 90 or more days and still accruing interest, and foreclosed real estate. Nonperforming assets are summarized as follows.
($ in thousands) | September 30, 2020 |  | December 31, 2019
Nonperforming assets |  |  |
Nonaccrual loans | $ | 31,656 |  |  | 24,866 |
TDR's - accruing | 9,896 |  |  | 9,053 |
Accruing loans > 90 days past due | — |  |  | — |
Total nonperforming loans | 41,552 |  |  | 33,919 |
Foreclosed real estate | 2,741 |  |  | 3,873 |
Total nonperforming assets | $ | 44,293 |  |  | 37,792 |
Purchased credit impaired loans not included above (1) | $ | 9,616 |  |  | 12,664 |
(1) In the March 3, 2017 acquisition of Carolina Bank, and the October 1, 2017 acquisition of Asheville Savings Bank, the Company acquired $19.3 million and $9.9 million, respectively, in PCI loans in accordance with ASC 310-30 accounting guidance. These loans are excluded from nonperforming loans, including $0.8 million and $0.8 million in PCI loans at September 30, 2020 and December 31, 2019, respectively, that were contractually past due 90 days or more. At September 30, 2020 and December 31, 2019, the Company had $1.8 million and $0.6 million in residential mortgage loans in process of foreclosure, respectively. The following is a summary of the Company’s nonaccrual loans by major categories.
($ in thousands) | September 30, 2020 |  | December 31, 2019
Commercial, financial, and agricultural | $ | 8,473 |  |  | 5,518 |
Real estate – construction, land development & other land loans | 872 |  |  | 1,067 |
Real estate – mortgage – residential (1-4 family) first mortgages | 5,742 |  |  | 7,552 |
Real estate – mortgage – home equity loans / lines of credit | 1,594 |  |  | 1,797 |
Real estate – mortgage – commercial and other | 14,795 |  |  | 8,820 |
Consumer loans | 180 |  |  | 112 |
Total | $ | 31,656 |  |  | 24,866 |
The following table presents an analysis of the payment status of the Company’s loans as of September 30, 2020. Due to the onset of the COVID-19 pandemic not occurring until late in the first quarter of 2020, as well as the Company's COVID-19 deferral program and the SBA's relief program, whereby the SBA is making six months of principal and interest payments on most SBA loans held in the Company's portfolio, the past due amounts below were not negatively impacted by the pandemic in a significant manner.
($ in thousands) | Accruing 30-59 Days Past Due |  | Accruing 60-89 Days Past Due |  | Accruing 90 Days or More Past Due |  | Nonaccrual Loans |  | Accruing Current |  | Total Loans Receivable
Commercial, financial, and agricultural | $ | 629 |  |  | 116 |  |  | — |  |  | 8,473 |  |  | 795,437 |  |  | 804,655 |
Real estate – construction, land development & other land loans | 41 |  |  | — |  |  | — |  |  | 872 |  |  | 652,057 |  |  | 652,970 |
Real estate – mortgage – residential (1-4 family) first mortgages | 1,122 |  |  | 1,307 |  |  | — |  |  | 5,742 |  |  | 1,003,741 |  |  | 1,011,912 |
Real estate – mortgage – home equity loans / lines of credit | 678 |  |  | 40 |  |  | — |  |  | 1,594 |  |  | 307,918 |  |  | 310,230 |
Real estate – mortgage – commercial and other | 466 |  |  | — |  |  | — |  |  | 14,795 |  |  | 1,964,390 |  |  | 1,979,651 |
Consumer loans | 113 |  |  | 37 |  |  | — |  |  | 180 |  |  | 49,811 |  |  | 50,141 |
Purchased credit impaired | — |  |  | 13 |  |  | 799 |  |  | — |  |  | 8,804 |  |  | 9,616 |
Total | $ | 3,049 |  |  | 1,513 |  |  | 799 |  |  | 31,656 |  |  | 4,782,158 |  |  | 4,819,175 |
Unamortized net deferred loan costs (fees) |  |  |  |  |  |  |  |  |  |  | (5,439) |
Total loans |  |  |  |  |  |  |  |  |  |  | $ | 4,813,736 |
The following table presents an analysis of the payment status of the Company’s loans as of December 31, 2019.
($ in thousands) | Accruing 30-59 Days Past Due |  | Accruing 60-89 Days Past Due |  | Accruing 90 Days or More Past Due |  | Nonaccrual Loans |  | Accruing Current |  | Total Loans Receivable
Commercial, financial, and agricultural | $ | 752 |  |  | — |  |  | — |  |  | 5,518 |  |  | 497,788 |  |  | 504,058 |
Real estate – construction, land development & other land loans | 37 |  |  | 152 |  |  | — |  |  | 1,067 |  |  | 529,444 |  |  | 530,700 |
Real estate – mortgage – residential (1-4 family) first mortgages | 10,858 |  |  | 5,056 |  |  | — |  |  | 7,552 |  |  | 1,076,205 |  |  | 1,099,671 |
Real estate – mortgage – home equity loans / lines of credit | 770 |  |  | 300 |  |  | — |  |  | 1,797 |  |  | 334,832 |  |  | 337,699 |
Real estate – mortgage – commercial and other | 4,257 |  |  | — |  |  | — |  |  | 8,820 |  |  | 1,897,573 |  |  | 1,910,650 |
Consumer loans | 344 |  |  | 137 |  |  | — |  |  | 112 |  |  | 55,490 |  |  | 56,083 |
Purchased credit impaired | 218 |  |  | 38 |  |  | 762 |  |  | — |  |  | 11,646 |  |  | 12,664 |
Total | $ | 17,236 |  |  | 5,683 |  |  | 762 |  |  | 24,866 |  |  | 4,402,978 |  |  | 4,451,525 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  | 1,941 |
Total loans |  |  |  |  |  |  |  |  |  |  | $ | 4,453,466 |
The following table presents the activity in the allowance for loan losses for all loans for the three and nine months ended September 30, 2020.
($ in thousands) | Commercial, Financial, and Agricultural |  | Real Estate – Construction, Land Development & Other Land Loans |  | Real Estate – Residential (1-4 Family) First Mortgages |  | Real Estate – Mortgage – Home Equity Lines of Credit |  | Real Estate – Mortgage – Commercial and Other |  | Consumer Loans |  | Unallocated |  | Total
As of and for the three months ended September 30, 2020
Beginning balance | $ | 5,989 |  |  | 5,677 |  |  | 8,339 |  |  | 2,359 |  |  | 18,755 |  |  | 1,223 |  |  | — |  |  | 42,342 |
Charge-offs | (325) |  |  | (6) |  |  | (4) |  |  | (23) |  |  | — |  |  | (310) |  |  | — |  |  | (668) |
Recoveries | 126 |  |  | 213 |  |  | 279 |  |  | 207 |  |  | 482 |  |  | 125 |  |  | — |  |  | 1,432 |
Provisions | 2,986 |  |  | 388 |  |  | 82 |  |  | (83) |  |  | 2,369 |  |  | 308 |  |  | 70 |  |  | 6,120 |
Ending balance | $ | 8,776 |  |  | 6,272 |  |  | 8,696 |  |  | 2,460 |  |  | 21,606 |  |  | 1,346 |  |  | 70 |  |  | 49,226 |
As of and for the nine months ended September 30, 2020
Beginning balance | $ | 4,553 |  |  | 1,976 |  |  | 3,832 |  |  | 1,127 |  |  | 8,938 |  |  | 972 |  |  | — |  |  | 21,398 |
Charge-offs | (4,256) |  |  | (51) |  |  | (478) |  |  | (404) |  |  | (545) |  |  | (707) |  |  | — |  |  | (6,441) |
Recoveries | 603 |  |  | 856 |  |  | 594 |  |  | 373 |  |  | 584 |  |  | 251 |  |  | — |  |  | 3,261 |
Provisions | 7,876 |  |  | 3,491 |  |  | 4,748 |  |  | 1,364 |  |  | 12,629 |  |  | 830 |  |  | 70 |  |  | 31,008 |
Ending balance | $ | 8,776 |  |  | 6,272 |  |  | 8,696 |  |  | 2,460 |  |  | 21,606 |  |  | 1,346 |  |  | 70 |  |  | 49,226 |
Ending balance as of September 30, 2020: Allowance for loan losses
Individually evaluated for impairment | $ | 1,814 |  |  | 56 |  |  | 820 |  |  | — |  |  | 1,624 |  |  | — |  |  | — |  |  | 4,314 |
Collectively evaluated for impairment | $ | 6,921 |  |  | 6,216 |  |  | 7,760 |  |  | 2,460 |  |  | 19,982 |  |  | 1,342 |  |  | 70 |  |  | 44,751 |
Purchased credit impaired | $ | 41 |  |  | — |  |  | 116 |  |  | — |  |  | — |  |  | 4 |  |  | — |  |  | 161 |
Loans receivable as of September 30, 2020
Ending balance – total | $ | 804,831 |  |  | 653,120 |  |  | 1,017,087 |  |  | 310,326 |  |  | 1,983,622 |  |  | 50,189 |  |  | — |  |  | 4,819,175 |
Unamortized net deferred loan fees |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (5,439) |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,813,736 |
Ending balances as of September 30, 2020: Loans
Individually evaluated for impairment | $ | 7,001 |  |  | 853 |  |  | 9,657 |  |  | 319 |  |  | 16,349 |  |  | — |  |  | — |  |  | 34,179 |
Collectively evaluated for impairment | $ | 797,654 |  |  | 652,117 |  |  | 1,002,254 |  |  | 309,911 |  |  | 1,963,303 |  |  | 50,141 |  |  | — |  |  | 4,775,380 |
Purchased credit impaired | $ | 176 |  |  | 150 |  |  | 5,176 |  |  | 96 |  |  | 3,970 |  |  | 48 |  |  | — |  |  | 9,616 |
The following table presents the activity in the allowance for loan losses for the year ended December 31, 2019.
($ in thousands) | Commercial, Financial, and Agricultural |  | Real Estate – Construction, Land Development & Other Land Loans |  | Real Estate – Residential (1-4 Family) First Mortgages |  | Real Estate – Mortgage – Home Equity Lines of Credit |  | Real Estate – Mortgage – Commercial and Other |  | Consumer Loans |  | Unallocated |  | Total
As of and for the year ended December 31, 2019
Beginning balance | $ | 2,889 |  |  | 2,243 |  |  | 5,197 |  |  | 1,665 |  |  | 7,983 |  |  | 952 |  |  | 110 |  |  | 21,039 |
Charge-offs | (2,473) |  |  | (553) |  |  | (657) |  |  | (307) |  |  | (1,556) |  |  | (757) |  |  | — |  |  | (6,303) |
Recoveries | 980 |  |  | 1,275 |  |  | 705 |  |  | 629 |  |  | 575 |  |  | 235 |  |  | — |  |  | 4,399 |
Provisions | 3,157 |  |  | (989) |  |  | (1,413) |  |  | (860) |  |  | 1,936 |  |  | 542 |  |  | (110) |  |  | 2,263 |
Ending balance | $ | 4,553 |  |  | 1,976 |  |  | 3,832 |  |  | 1,127 |  |  | 8,938 |  |  | 972 |  |  | — |  |  | 21,398 |
Ending balances as of December 31, 2019: Allowance for loan losses
Individually evaluated for impairment | $ | 1,791 |  |  | 50 |  |  | 750 |  |  | — |  |  | 983 |  |  | — |  |  | — |  |  | 3,574 |
Collectively evaluated for impairment | $ | 2,720 |  |  | 1,926 |  |  | 2,976 |  |  | 1,127 |  |  | 7,931 |  |  | 961 |  |  | — |  |  | 17,641 |
Purchased credit impaired | $ | 42 |  |  | — |  |  | 106 |  |  | — |  |  | 24 |  |  | 11 |  |  | — |  |  | 183 |
Loans receivable as of December 31, 2019:
Ending balance – total | $ | 504,271 |  |  | 530,866 |  |  | 1,105,014 |  |  | 337,922 |  |  | 1,917,280 |  |  | 56,172 |  |  | — |  |  | 4,451,525 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,941 |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,453,466 |
Ending balances as of December 31, 2019: Loans
Individually evaluated for impairment | $ | 4,957 |  |  | 796 |  |  | 9,546 |  |  | 333 |  |  | 9,570 |  |  | — |  |  | — |  |  | 25,202 |
Collectively evaluated for impairment | $ | 499,101 |  |  | 529,904 |  |  | 1,090,125 |  |  | 337,366 |  |  | 1,901,080 |  |  | 56,083 |  |  | — |  |  | 4,413,659 |
Purchased credit impaired | $ | 213 |  |  | 166 |  |  | 5,343 |  |  | 223 |  |  | 6,630 |  |  | 89 |  |  | — |  |  | 12,664 |
The following table presents the activity in the allowance for loan losses for all loans for the three and nine months ended September 30, 2019.
($ in thousands) | Commercial, Financial, and Agricultural |  | Real Estate – Construction, Land Development & Other Land Loans |  | Real Estate – Residential (1-4 Family) First Mortgages |  | Real Estate – Mortgage – Home Equity Lines of Credit |  | Real Estate – Mortgage – Commercial and Other |  | Consumer Loans |  | Unallocated |  | Total
As of and for the three months ended September 30, 2019
Beginning balance | $ | 3,218 |  |  | 1,815 |  |  | 4,123 |  |  | 1,271 |  |  | 8,852 |  |  | 1,211 |  |  | 299 |  |  | 20,789 |
Charge-offs | (288) |  |  | (47) |  |  | (194) |  |  | (70) |  |  | (617) |  |  | (119) |  |  | — |  |  | (1,335) |
Recoveries | 163 |  |  | 308 |  |  | 139 |  |  | 58 |  |  | 176 |  |  | 67 |  |  | — |  |  | 911 |
Provisions | (226) |  |  | (270) |  |  | (112) |  |  | (122) |  |  | (199) |  |  | (141) |  |  | (35) |  |  | (1,105) |
Ending balance | $ | 2,867 |  |  | 1,806 |  |  | 3,956 |  |  | 1,137 |  |  | 8,212 |  |  | 1,018 |  |  | 264 |  |  | 19,260 |
As of and for the nine months ended September 30, 2019
Beginning balance | $ | 2,889 |  |  | 2,243 |  |  | 5,197 |  |  | 1,665 |  |  | 7,983 |  |  | 952 |  |  | 110 |  |  | 21,039 |
Charge-offs | (1,224) |  |  | (340) |  |  | (379) |  |  | (216) |  |  | (1,455) |  |  | (555) |  |  | — |  |  | (4,169) |
Recoveries | 768 |  |  | 797 |  |  | 521 |  |  | 513 |  |  | 550 |  |  | 154 |  |  | — |  |  | 3,303 |
Provisions | 434 |  |  | (894) |  |  | (1,383) |  |  | (825) |  |  | 1,134 |  |  | 467 |  |  | 154 |  |  | (913) |
Ending balance | $ | 2,867 |  |  | 1,806 |  |  | 3,956 |  |  | 1,137 |  |  | 8,212 |  |  | 1,018 |  |  | 264 |  |  | 19,260 |
Ending balance as of September 30, 2019: Allowance for loan losses
Individually evaluated for impairment | $ | 168 |  |  | 45 |  |  | 828 |  |  | — |  |  | 230 |  |  | — |  |  | — |  |  | 1,271 |
Collectively evaluated for impairment | $ | 2,657 |  |  | 1,761 |  |  | 3,060 |  |  | 1,137 |  |  | 7,925 |  |  | 1,005 |  |  | 264 |  |  | 17,809 |
Purchased credit impaired | $ | 42 |  |  | — |  |  | 68 |  |  | — |  |  | 57 |  |  | 13 |  |  | — |  |  | 180 |
Loans receivable as of September 30, 2019
Ending balance – total | $ | 486,768 |  |  | 471,326 |  |  | 1,093,619 |  |  | 343,378 |  |  | 1,928,931 |  |  | 70,962 |  |  | — |  |  | 4,394,984 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,560 |
Total loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 4,396,544 |
Ending balances as of September 30, 2019: Loans
Individually evaluated for impairment | $ | 1,090 |  |  | 804 |  |  | 9,942 |  |  | 338 |  |  | 6,941 |  |  | — |  |  | — |  |  | 19,115 |
Collectively evaluated for impairment | $ | 485,436 |  |  | 470,353 |  |  | 1,078,004 |  |  | 342,831 |  |  | 1,914,603 |  |  | 70,844 |  |  | — |  |  | 4,362,071 |
Purchased credit impaired | $ | 242 |  |  | 169 |  |  | 5,673 |  |  | 209 |  |  | 7,387 |  |  | 118 |  |  | — |  |  | 13,798 |
The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of September 30, 2020.
($ in thousands) | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance |  | Average Recorded Investment
Impaired loans with no related allowance recorded: |  |  |  |  |  |  |
Commercial, financial, and agricultural | $ | 12 |  |  | 16 |  |  | — |  |  | 15 |
Real estate – mortgage – construction, land development & other land loans | 316 |  |  | 494 |  |  | — |  |  | 246 |
Real estate – mortgage – residential (1-4 family) first mortgages | 4,336 |  |  | 4,674 |  |  | — |  |  | 4,530 |
Real estate – mortgage –home equity loans / lines of credit | 319 |  |  | 357 |  |  | — |  |  | 327 |
Real estate – mortgage –commercial and other | 10,959 |  |  | 12,004 |  |  | — |  |  | 8,342 |
Consumer loans | — |  |  | — |  |  | — |  |  | — |
Total impaired loans with no allowance | $ | 15,942 |  |  | 17,545 |  |  | — |  |  | 13,460 |
Impaired loans with an allowance recorded: |  |  |  |  |  |  |
Commercial, financial, and agricultural | $ | 6,989 |  |  | 7,042 |  |  | 1,814 |  |  | 5,421 |
Real estate – mortgage – construction, land development & other land loans | 537 |  |  | 546 |  |  | 56 |  |  | 597 |
Real estate – mortgage – residential (1-4 family) first mortgages | 5,321 |  |  | 5,498 |  |  | 820 |  |  | 5,185 |
Real estate – mortgage –home equity loans / lines of credit | — |  |  | — |  |  | — |  |  | 26 |
Real estate – mortgage –commercial and other | 5,390 |  |  | 6,231 |  |  | 1,624 |  |  | 5,528 |
Consumer loans | — |  |  | — |  |  | — |  |  | — |
Total impaired loans with allowance | $ | 18,237 |  |  | 19,317 |  |  | 4,314 |  |  | 16,757 |
Interest income recorded on impaired loans during the nine months ended September 30, 2020 was insignificant. The following table presents loans individually evaluated for impairment by class of loans, excluding PCI loans, as of December 31, 2019.
($ in thousands) | Recorded Investment |  | Unpaid Principal Balance |  | Related Allowance |  | Average Recorded Investment
Impaired loans with no related allowance recorded: |  |  |  |  |  |  |
Commercial, financial, and agricultural | $ | 16 |  |  | 19 |  |  | — |  |  | 74 |
Real estate – mortgage – construction, land development & other land loans | 221 |  |  | 263 |  |  | — |  |  | 366 |
Real estate – mortgage – residential (1-4 family) first mortgages | 4,300 |  |  | 4,539 |  |  | — |  |  | 4,415 |
Real estate – mortgage –home equity loans / lines of credit | 333 |  |  | 357 |  |  | — |  |  | 147 |
Real estate – mortgage –commercial and other | 2,643 |  |  | 3,328 |  |  | — |  |  | 3,240 |
Consumer loans | — |  |  | — |  |  | — |  |  | — |
Total impaired loans with no allowance | $ | 7,513 |  |  | 8,506 |  |  | — |  |  | 8,242 |
Impaired loans with an allowance recorded: |  |  |  |  |  |  |
Commercial, financial, and agricultural | $ | 4,941 |  |  | 4,995 |  |  | 1,791 |  |  | 1,681 |
Real estate – mortgage – construction, land development & other land loans | 575 |  |  | 575 |  |  | 50 |  |  | 586 |
Real estate – mortgage – residential (1-4 family) first mortgages | 5,246 |  |  | 5,469 |  |  | 750 |  |  | 6,206 |
Real estate – mortgage –home equity loans / lines of credit | — |  |  | — |  |  | — |  |  | 55 |
Real estate – mortgage –commercial and other | 6,927 |  |  | 7,914 |  |  | 983 |  |  | 5,136 |
Consumer loans | — |  |  | — |  |  | — |  |  | — |
Total impaired loans with allowance | $ | 17,689 |  |  | 18,953 |  |  | 3,574 |  |  | 13,664 |
Interest income recorded on impaired loans during the year ended December 31, 2019 was $1.3 million, and reflects interest income recorded on nonaccrual loans prior to them being placed on nonaccrual status and interest income recorded on accruing restructured loans. The Company tracks credit quality based on its internal risk ratings. Upon origination, a loan is assigned an initial risk grade, which is generally based on several factors such as the borrower’s credit score, the loan-to-value ratio, the debt-to-income ratio, etc. Loans that are risk-graded as substandard during the origination process are declined. After loans are initially graded, they are monitored regularly for credit quality based on many factors, such as payment history, the borrower’s financial status, and changes in collateral value. Loans can be downgraded or upgraded depending on management’s evaluation of these factors. Internal risk-grading policies are consistent throughout each loan type. The following describes the Company’s internal risk grades in ascending order of likelihood of loss:
| Risk Grade | Description
Pass: |  |
| 1 | Loans with virtually no risk, including cash secured loans.
| 2 | Loans with documented significant overall financial strength. These loans have minimum chance of loss due to the presence of multiple sources of repayment – each clearly sufficient to satisfy the obligation.
| 3 | Loans with documented satisfactory overall financial strength. These loans have a low loss potential due to presence of at least two clearly identified sources of repayment – each of which is sufficient to satisfy the obligation under the present circumstances.
| 4 | Loans to borrowers with acceptable financial condition. These loans could have signs of minor operational weaknesses, lack of adequate financial information, or loans supported by collateral with questionable value or marketability.
| 5 | Loans that represent above average risk due to minor weaknesses and warrant closer scrutiny by management. Collateral is generally required and felt to provide reasonable coverage with realizable liquidation values in normal circumstances. Repayment performance is satisfactory.
| P (Pass) | Consumer loans (<$500,000) that are of satisfactory credit quality with borrowers who exhibit good personal credit history, average personal financial strength and moderate debt levels. These loans generally conform to Bank policy, but may include approved mitigated exceptions to the guidelines.
Special Mention: |  |
| 6 | Existing loans with defined weaknesses in primary source of repayment that, if not corrected, could cause a loss to the Bank.
Classified: |  |
| 7 | An existing loan inadequately protected by the current sound net worth and paying capacity of the obligor or the collateral pledged, if any. These loans have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt.
| 8 | Loans that have a well-defined weakness that make the collection or liquidation in full highly questionable and improbable. Loss appears imminent, but the exact amount and timing is uncertain.
| 9 | Loans that are considered uncollectible and are in the process of being charged-off. This grade is a temporary grade assigned for administrative purposes until the charge-off is completed.
| F (Fail) | Consumer loans (<$500,000) with a well-defined weakness, such as exceptions of any kind with no mitigating factors, history of paying outside the terms of the note, insufficient income to support the current level of debt, etc.
The following table presents the Company’s recorded investment in loans by credit quality indicators as of September 30, 2020.
($ in thousands) | Pass |  | Special Mention Loans |  | Classified Accruing Loans |  | Classified Nonaccrual Loans |  | Total
Commercial, financial, and agricultural | $ | 778,593 |  |  | 16,517 |  |  | 1,072 |  |  | 8,473 |  |  | 804,655 |
Real estate – construction, land development & other land loans | 643,826 |  |  | 7,058 |  |  | 1,214 |  |  | 872 |  |  | 652,970 |
Real estate – mortgage – residential (1-4 family) first mortgages | 985,925 |  |  | 7,634 |  |  | 12,611 |  |  | 5,742 |  |  | 1,011,912 |
Real estate – mortgage – home equity loans / lines of credit | 300,708 |  |  | 1,854 |  |  | 6,074 |  |  | 1,594 |  |  | 310,230 |
Real estate – mortgage – commercial and other | 1,928,787 |  |  | 32,052 |  |  | 4,017 |  |  | 14,795 |  |  | 1,979,651 |
Consumer loans | 49,658 |  |  | 85 |  |  | 218 |  |  | 180 |  |  | 50,141 |
Purchased credit impaired | 7,778 |  |  | 86 |  |  | 1,752 |  |  | — |  |  | 9,616 |
Total | $ | 4,695,275 |  |  | 65,286 |  |  | 26,958 |  |  | 31,656 |  |  | 4,819,175 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  | (5,439) |
Total loans |  |  |  |  |  |  |  |  | 4,813,736 |
The following table presents the Company’s recorded investment in loans by credit quality indicators as of December 31, 2019.
($ in thousands) | Pass |  | Special Mention Loans |  | Classified Accruing Loans |  | Classified Nonaccrual Loans |  | Total
Commercial, financial, and agricultural | $ | 486,081 |  |  | 7,998 |  |  | 4,461 |  |  | 5,518 |  |  | 504,058 |
Real estate – construction, land development & other land loans | 522,767 |  |  | 4,075 |  |  | 2,791 |  |  | 1,067 |  |  | 530,700 |
Real estate – mortgage – residential (1-4 family) first mortgages | 1,063,735 |  |  | 13,187 |  |  | 15,197 |  |  | 7,552 |  |  | 1,099,671 |
Real estate – mortgage – home equity loans / lines of credit | 328,903 |  |  | 1,258 |  |  | 5,741 |  |  | 1,797 |  |  | 337,699 |
Real estate – mortgage – commercial and other | 1,873,594 |  |  | 20,800 |  |  | 7,436 |  |  | 8,820 |  |  | 1,910,650 |
Consumer loans | 55,203 |  |  | 413 |  |  | 355 |  |  | 112 |  |  | 56,083 |
Purchased credit impaired | 8,098 |  |  | 2,590 |  |  | 1,976 |  |  | — |  |  | 12,664 |
Total | $ | 4,338,381 |  |  | 50,321 |  |  | 37,957 |  |  | 24,866 |  |  | 4,451,525 |
Unamortized net deferred loan costs |  |  |  |  |  |  |  |  | 1,941 |
Total loans |  |  |  |  |  |  |  |  | 4,453,466 |
Troubled Debt Restructurings The restructuring of a loan is considered a “troubled debt restructuring” ("TDR") 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, extension of terms and other actions intended to minimize potential losses. As previously noted, under the CARES Act and banking regulator guidance, which the Company has applied, modifications deemed to be COVID-19-related are not considered a TDR if the loan was not more than 30 days past due as of December 31, 2019 and the deferral was executed between March 1, 2020 and the earlier of 60 days after the date of termination of the COVID-19 national emergency or December 31, 2020. As the initial 90 day deferrals began to expire late in the second quarter and early in the third quarter, the Company approved second deferral requests of another 90 days based on the circumstances of each borrower. Under these terms, as of September 30, 2020, the Company had payment deferrals for 207 loans with an aggregate loan balance of $186 million, and for the reasons previously noted, these loans are not included in the TDR's disclosed in this report. Approximately $158 million of the $186 million in deferrals were second deferrals and for $100 million of the total deferrals, the borrower is scheduled to make interest payments with only principal being deferred. The Company continues to accrue interest on these loans during the deferral period. The vast majority of the Company’s TDR's modified during the periods ended September 30, 2020 and September 30, 2019 related to interest rate reductions combined with extension of terms. The Company does not generally grant principal forgiveness. All loans classified as TDR's are considered to be impaired and are evaluated as such for determination of the allowance for loan losses. The Company’s TDR's can be classified as either nonaccrual or accruing based on the loan’s payment status. The TDR's that are nonaccrual are reported within the nonaccrual loan totals presented previously. The following table presents information related to loans modified in a TDR during the three months ended September 30, 2020 and 2019.
($ in thousands) | For the three months ended September 30, 2020 |  | For the three months ended September 30, 2019
| Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances |  | Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances
TDRs – Accruing |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
Real estate – construction, land development & other land loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – residential (1-4 family) first mortgages | — |  |  | — |  |  | — |  |  | 1 |  |  | 133 |  |  | 133 |
Real estate – mortgage – home equity loans / lines of credit | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – commercial and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
TDRs – Nonaccrual |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – construction, land development & other land loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – residential (1-4 family) first mortgages | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – home equity loans / lines of credit | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – commercial and other | 1 |  |  | 2,344 |  |  | 2,344 |  |  | — |  |  | — |  |  | — |
Consumer loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total TDRs arising during period | 1 |  |  | $ | 2,344 |  |  | $ | 2,344 |  |  | 1 |  |  | $ | 133 |  |  | $ | 133 |
The following table presents information related to loans modified in a TDR during the nine months ended September 30, 2020 and 2019.
($ in thousands) | For the nine months ended September 30, 2020 |  | For the nine months ended September 30, 2019
| Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances |  | Number of Contracts |  | Pre- Modification Restructured Balances |  | Post- Modification Restructured Balances
TDRs – Accruing |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural | 2 |  |  | $ | 143 |  |  | $ | 143 |  |  | 1 |  |  | $ | 143 |  |  | $ | 143 |
Real estate – construction, land development & other land loans | 1 |  |  | 67 |  |  | 67 |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – residential (1-4 family) first mortgages | 2 |  |  | 75 |  |  | 78 |  |  | 4 |  |  | 523 |  |  | 527 |
Real estate – mortgage – home equity loans / lines of credit | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – commercial and other | — |  |  | — |  |  | — |  |  | 1 |  |  | 965 |  |  | 965 |
Consumer loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
TDRs – Nonaccrual |  |  |  |  |  |  |  |  |  |  |
Commercial, financial, and agricultural | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – construction, land development & other land loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – residential (1-4 family) first mortgages | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – home equity loans / lines of credit | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – mortgage – commercial and other | 1 |  |  | 2,344 |  |  | 2,344 |  |  | — |  |  | — |  |  | — |
Consumer loans | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total TDRs arising during period | 6 |  |  | $ | 2,629 |  |  | $ | 2,632 |  |  | 6 |  |  | $ | 1,631 |  |  | $ | 1,635 |
Accruing TDR's that were modified in the previous twelve months and that defaulted during the three months ended September 30, 2020 and 2019 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 September 30, 2020 |  | For the Three Months Ended September 30, 2019
| Number of Contracts |  | Recorded Investment |  | Number of Contracts |  | Recorded Investment
Accruing TDRs that subsequently defaulted |  |  |  |  |  |  |
Real estate – mortgage – residential (1-4 family first mortgages) | — |  |  | $ | — |  |  | — |  |  | $ | — |
Real estate – mortgage – commercial and other | — |  |  | — |  |  | — |  |  | — |
Total accruing TDRs that subsequently defaulted | 1 |  |  | $ | 274 |  |  | 1 |  |  | $ | 93 |
Accruing TDR's that were modified in the previous twelve months and that defaulted during the nine months ended September 30, 2020 and 2019 are presented in the table below.
($ in thousands) | For the Nine Months Ended September 30, 2020 |  | For the Nine Months Ended September 30, 2019
| Number of Contracts |  | Recorded Investment |  | Number of Contracts |  | Recorded Investment
Accruing TDRs that subsequently defaulted |  |  |  |  |  |  |
Real estate – mortgage – residential (1-4 family first mortgages) | — |  |  | $ | — |  |  | 1 |  |  | $ | 93 |
Real estate – mortgage – commercial and other | 1 |  |  | 274 |  |  | — |  |  | — |
Total accruing TDRs that subsequently defaulted | 1 |  |  | $ | 274 |  |  | 1 |  |  | $ | 93 |

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