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Loans and Loans Held for Sale | 6 Months Ended
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Jun. 30, 2017
Receivables [Abstract] |
LOANS AND LOANS HELD FOR SALE | Loans are presented net of unearned income of $4.5 million and $5.2 million at June 30, 2017 and December 31, 2016 and net of a discount related to purchase accounting fair value adjustments of $4.9 million and $7.1 million at June 30, 2017 and December 31, 2016. The following table indicates the composition of loans as of the dates presented:
(dollars in thousands) | June 30, 2017 |  | December 31, 2016
Commercial |  |  |
Commercial real estate | $ | 2,664,642 |  |  | $ | 2,498,476 |
Commercial and industrial | 1,401,283 |  |  | 1,401,035 |
Commercial construction | 426,754 |  |  | 455,884 |
Total Commercial Loans | 4,492,679 |  |  | 4,355,395 |
Consumer |  |  |
Residential mortgage | 706,143 |  |  | 701,982 |
Home equity | 484,960 |  |  | 482,284 |
Installment and other consumer | 70,068 |  |  | 65,852 |
Consumer construction | 3,969 |  |  | 5,906 |
Total Consumer Loans | 1,265,140 |  |  | 1,256,024 |
Total Portfolio Loans | 5,757,819 |  |  | 5,611,419 |
Loans held for sale | 23,120 |  |  | 3,793 |
Total Loans | $ | 5,780,939 |  |  | $ | 5,615,212 |
As of June 30, 2017, our acquired loans from the 2015 Integrity Bancshares, Inc. merger, or the Merger, were $443 million which included $231 million of Commercial Real Estate, or CRE, $109 million of Commercial & Industrial, or C&I, $18.7 million of commercial construction, $64.4 million of residential mortgage and $19.9 million of home equity, installment and other consumer construction. As of December 31, 2016 acquired loans were $543 million and which included $273 million of CRE, $141 million of C&I, $33.0 million of commercial construction, $74.0 million of residential mortgage and $22.0 million of home equity, installment and other consumer construction. We attempt to limit our exposure to credit risk by diversifying our loan portfolio by segment, geography, collateral and industry and actively managing concentrations. When concentrations exist in certain segments, we monitor this risk by reviewing the relevant economic indicators and internal risk rating trends and through stress testing of the loans in these segments. Total commercial loans represented 78 percent of total portfolio loans at June 30, 2017 and December 31, 2016. Within our commercial portfolio, the CRE and Commercial Construction portfolios combined comprised $3.1 billion or 69 percent of total commercial loans and 54 percent of total portfolio loans at June 30, 2017 and comprised of $3.0 billion or 68 percent of total commercial loans and 53 percent of total portfolio loans at December 31, 2016. Further segmentation of the CRE and Commercial Construction portfolios by collateral type reveals no concentration in excess of seven percent of total loans at June 30, 2017 and December 31, 2016. Our market area includes Pennsylvania and the contiguous states of Ohio, West Virginia, New York and Maryland. The majority of our commercial and consumer loans are made to businesses and individuals in this market area, resulting in a regional geographic concentration. We believe our knowledge and familiarity with customers and conditions locally outweighs this geographic concentration risk. The conditions of the local and regional economies are monitored closely through publicly available data as well as information supplied by our customers. Our CRE and Commercial Construction portfolios have out-of-market exposure of 5.3 percent of the combined portfolio and 2.8 percent of total loans at June 30, 2017 and 5.2 percent of the combined portfolio and 2.7 percent of total loans at December 31, 2016. The increase in loans held for sale of $19.3 million relates to three commercial participation loans totaling $18.0 million that were held for sale at June 30, 2017. We individually evaluate all substandard commercial loans that have experienced a forbearance or change in terms agreement, as well as all substandard consumer and residential mortgage loans that entered into an agreement to modify their existing loan, to determine if they should be designated as troubled debt restructurings, or TDRs. All TDRs are considered to be impaired loans and will be reported as impaired loans for the remaining life of the loan, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the remaining principal and interest will be collected according to the restructured agreement. Further, all impaired loans are reported as nonaccrual loans unless the loan is a TDR that has met the requirements to be returned to accruing status. TDRs can be returned to accruing status if the ultimate collectability of all contractual amounts due, according to the restructured agreement, is not in doubt and there is a period of a minimum of six months of satisfactory payment performance by the borrower either immediately before or after the restructuring. The following table summarizes the restructured loans as of the dates presented:
| June 30, 2017 |  | December 31, 2016
(dollars in thousands) | Performing TDRs |  | Nonperforming TDRs |  | Total TDRs |  | Performing TDRs |  | Nonperforming TDRs |  | Total TDRs
Commercial real estate | $ | 2,672 |  |  | $ | 704 |  |  | $ | 3,376 |  |  | $ | 2,994 |  |  | $ | 646 |  |  | $ | 3,640 |
Commercial and industrial | 3,324 |  |  | 3,944 |  |  | 7,268 |  |  | 1,387 |  |  | 4,493 |  |  | 5,880 |
Commercial construction | 2,953 |  |  | 423 |  |  | 3,376 |  |  | 2,966 |  |  | 430 |  |  | 3,396 |
Residential mortgage | 2,235 |  |  | 4,111 |  |  | 6,346 |  |  | 2,375 |  |  | 5,068 |  |  | 7,443 |
Home equity | 3,866 |  |  | 918 |  |  | 4,784 |  |  | 3,683 |  |  | 954 |  |  | 4,637 |
Installment and other consumer | 30 |  |  | 5 |  |  | 35 |  |  | 18 |  |  | 7 |  |  | 25 |
Total | $ | 15,080 |  |  | $ | 10,105 |  |  | $ | 25,185 |  |  | $ | 13,423 |  |  | $ | 11,598 |  |  | $ | 25,021 |
There was one TDR that returned to accruing status totaling $2.0 million during the three and six months ended June 30, 2017 and no TDRs returned to accruing status during the three and six months ended June 30, 2016. The following tables present the restructured loans categorized by type of concession during the periods presented:
| Three Months Ended June 30, 2017 |  | Three months ended June 30, 2016
(dollars in thousands) | Number of Loans |  | Pre-Modification Outstanding Recorded Investment(1) |  | Post-Modification Outstanding Recorded Investment(1) |  | Total Difference in Recorded Investment |  | Number of Loans |  | Pre-Modification Outstanding Recorded Investment(1) |  | Post-Modification Outstanding Recorded Investment(1) |  | Total Difference in Recorded Investment
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | 1 |  |  | 100 |  |  | 100 |  |  | — |  |  | 1 |  |  | 4,721 |  |  | 2,270 |  |  | (2,451 | )
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | 1 |  |  | 429 |  |  | 429 |  |  | — |  |  | 5 |  |  | 985 |  |  | 985 |  |  | — |
Maturity date extension and interest rate reduction | 2 |  |  | 1,800 |  |  | 1,800 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Maturity date extension | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 130 |  |  | 130 |  |  | — |
Commercial Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Maturity date extension | — |  |  | — |  |  | — |  |  | — |  |  | 4 |  |  | 1,324 |  |  | 1,269 |  |  | (55 | )
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 3,273 |  |  | 3,273 |  |  | — |
Chapter 7 bankruptcy(2) | 1 |  |  | 33 |  |  | 33 |  |  | — |  |  | 1 |  |  | 65 |  |  | 64 |  |  | (1 | )
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Chapter 7 bankruptcy(2) | 3 |  |  | 40 |  |  | 38 |  |  | (2 | ) |  | 4 |  |  | 73 |  |  | 69 |  |  | (4 | )
Maturity date extension | 1 |  |  | 231 |  |  | 231 |  |  | — |  |  | 3 |  |  | 120 |  |  | 120 |  |  | — |
Installment and other consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Chapter 7 bankruptcy(2) | 2 |  |  | 37 |  |  | 34 |  |  | (3 | ) |  | 2 |  |  | 16 |  |  | 13 |  |  | (3 | )
Total by Concession Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | 2 |  |  | $ | 529 |  |  | $ | 529 |  |  | $ | — |  |  | 7 |  |  | $ | 8,979 |  |  | $ | 6,528 |  |  | $ | (2,451 | )
Chapter 7 bankruptcy(2) | 6 |  |  | 110 |  |  | 105 |  |  | (5 | ) |  | 7 |  |  | 154 |  |  | 146 |  |  | (8 | )
Maturity date extension and interest rate reduction | 2 |  |  | 1,800 |  |  | 1,800 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Maturity date extension | 1 |  |  | 231 |  |  | 231 |  |  | — |  |  | 8 |  |  | 1,574 |  |  | 1,519 |  |  | (55 | )
Total | 11 |  |  | $ | 2,670 |  |  | $ | 2,665 |  |  | $ | (5 | ) |  | 22 |  |  | $ | 10,707 |  |  | $ | 8,193 |  |  | $ | (2,514 | )
(1) Excludes loans that were fully paid off or fully charged-off by period end. The pre-modification balance represents the balance outstanding prior to modification. The post-modification balance represents the outstanding balance at period end. (2) Chapter 7 bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
| Six Months Ended June 30, 2017 |  | Six Months Ended June 30, 2016
(dollars in thousands) | Number of Loans |  | Pre-Modification Outstanding Recorded Investment(1) |  | Post-Modification Outstanding Recorded Investment(1) |  | Total Difference in Recorded Investment |  | Number of Loans |  | Pre-Modification Outstanding Recorded Investment(1) |  | Post-Modification Outstanding Recorded Investment(1) |  | Total Difference in Recorded Investment
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | 1 |  |  | $ | 100 |  |  | $ | 100 |  |  | $ | — |  |  | 1 |  |  | $ | 4,721 |  |  | $ | 2,270 |  |  | $ | (2,451 | )
Chapter 7 bankruptcy(2) | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 709 |  |  | 681 |  |  | (28 | )
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | 1 |  |  | 429 |  |  | 429 |  |  | — |  |  | 5 |  |  | 985 |  |  | 985 |  |  | — |
Maturity Date extension and interest rate reduction | 2 |  |  | 1,800 |  |  | 1,800 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Maturity date extension | — |  |  | — |  |  | — |  |  | — |  |  | 3 |  |  | 755 |  |  | 728 |  |  | (27 | )
Commercial Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Maturity date extension | — |  |  | — |  |  | — |  |  | — |  |  | 5 |  |  | 1,357 |  |  | 1,303 |  |  | (54 | )
Residential mortgage |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 3,273 |  |  | 3,273 |  |  | — |
Chapter 7 bankruptcy(2) | 1 |  |  | 33 |  |  | 33 |  |  | — |  |  | 4 |  |  | 285 |  |  | 280 |  |  | (5 | )
Maturity date extension | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 483 |  |  | 483 |  |  | — |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | — |  |  | — |  |  | — |  |  | — |  |  | 1 |  |  | 47 |  |  | 46 |  |  | (1 | )
Chapter 7 bankruptcy(2) | 9 |  |  | 309 |  |  | 304 |  |  | (5 | ) |  | 9 |  |  | 318 |  |  | 309 |  |  | (9 | )
Maturity date extension and interest rate reduction | 1 |  |  | 173 |  |  | 172 |  |  | (1 | ) |  | 1 |  |  | 130 |  |  | 128 |  |  | (2 | )
Maturity date extension | 1 |  |  | 231 |  |  | 231 |  |  | — |  |  | 4 |  |  | 274 |  |  | 272 |  |  | (2 | )
Installment and other consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Chapter 7 bankruptcy(2) | 2 |  |  | 37 |  |  | 34 |  |  | (3 | ) |  | 2 |  |  | 16 |  |  | 13 |  |  | (3 | )
Total by Concession Type |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Principal deferral | 2 |  |  | 529 |  |  | 529 |  |  | — |  |  | 8 |  |  | 9,026 |  |  | 6,574 |  |  | (2,452 | )
Chapter 7 bankruptcy(2) | 12 |  |  | 379 |  |  | 371 |  |  | (8 | ) |  | 16 |  |  | 1,328 |  |  | 1,283 |  |  | (45 | )
Maturity date extension and interest rate reduction | 3 |  |  | 1,973 |  |  | 1,972 |  |  | (1 | ) |  | 1 |  |  | 130 |  |  | 128 |  |  | (2 | )
Maturity date extension | 1 |  |  | 231 |  |  | 231 |  |  | — |  |  | 13 |  |  | 2,869 |  |  | 2,786 |  |  | (83 | )
Total | 18 |  |  | $ | 3,112 |  |  | $ | 3,103 |  |  | $ | (9 | ) |  | 38 |  |  | $ | 13,353 |  |  | $ | 10,771 |  |  | $ | (2,582 | )
(1) Excludes loans that were fully paid off or fully charged-off by period end. The pre-modification balance represents the balance outstanding prior to modification. The post-modification balance represents the outstanding balance at period end. (2) Chapter 7 bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
For the three months ended June 30, 2017, we modified two C&I loans totaling $3.9 million that were not considered to be TDRs. For the six months ended June 30, 2017, we modified 12 loans totaling $11.8 million of which nine were C&I loans totaling $10.4 million and three CRE loans totaling $1.4 million. The modifications primarily related to maturity date extensions that were deemed to be an insignificant time period. As of June 30, 2017, we have $0.6 million of commitments to lend additional funds on TDRs. Defaulted TDRs are defined as loans having a payment default of 90 days or more after the restructuring takes place. There were no TDRs that defaulted during the three months ended June 30, 2017 and June 30, 2016. There were no TDRs that defaulted during the six months ended June 30, 2017 and one commercial construction loan for $0.6 million that defaulted for the six months ended June 30, 2016. The following table is a summary of nonperforming assets as of the dates presented:
| Nonperforming Assets
(dollars in thousands) | June 30, 2017 |  | December 31, 2016
Nonperforming Assets |  |  |
Nonaccrual loans | $ | 26,564 |  |  | $ | 31,037 |
Nonaccrual TDRs | 10,105 |  |  | 11,598 |
Total nonaccrual loans | 36,669 |  |  | 42,635 |
OREO | 1,620 |  |  | 679 |
Total Nonperforming Assets | $ | 38,289 |  |  | $ | 43,314 |

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=84173941&loc=d3e5066-111524 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(4)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 946 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.6-04(6)) -URI http://asc.fasb.org/extlink&oid=6488278&loc=d3e603758-122996 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02(3)) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 11 -URI http://asc.fasb.org/extlink&oid=84173941&loc=d3e5162-111524 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 944 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.7-03(a)(5)) -URI http://asc.fasb.org/extlink&oid=6879938&loc=d3e572229-122910 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 942 -SubTopic 210 -Section S99 -Paragraph 1 -Subparagraph (SX 210.9-03(7)) -URI http://asc.fasb.org/extlink&oid=6876686&loc=d3e534808-122878 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=84173941&loc=d3e5074-111524 + Details
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