LOANS AND LOANS HELD FOR SALE

Loans are presented net of unearned income of $5.2 million at December 31, 2017 and 2016 and net of a discount related to purchase accounting fair value adjustments of $2.8 million and $7.1 million at December 31, 2017 and December 31, 2016. The following table indicates the composition of the acquired and originated loans as of the dates presented:



	December 31,
(dollars in thousands)	2017		2016
Commercial
Commercial real estate	$	2,685,994	$	2,498,476
Commercial and industrial	1,433,266		1,401,035
Commercial construction	384,334		455,884
Total Commercial Loans	4,503,594		4,355,395
Consumer
Residential mortgage	698,774		701,982
Home equity	487,326		482,284
Installment and other consumer	67,204		65,852
Consumer construction	4,551		5,906
Total Consumer Loans	1,257,855		1,256,024
Total Portfolio Loans	5,761,449		5,611,419
Loans held for sale	4,485		3,793
Total Loans	$	5,765,934	$	5,615,212

As of December 31, 2017, our acquired loans from the Merger were $387 million including $209 million of CRE, $92.1 million of C&I, $11.1 million of commercial construction, $57.5 million of residential mortgage and $17.3 million of home equity, installment and other consumer construction. These acquired loans decreased from acquired loans at December 31, 2016 of $543 million, including $273 million of CRE, $141 million of C&I, $33.0 million of commercial construction, $74.0 million of residential mortgage, $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 mitigate 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 both December 31, 2017 and 2016. Within our commercial portfolio, the CRE and Commercial Construction portfolios combined comprised $3.1 billion or 68 percent of total commercial loans and 53 percent of total portfolio loans at December 31, 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 14 percent of both total CRE and Commercial Construction loans at either December 31, 2017 or 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 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 and information supplied by our customers. Our CRE and Commercial Construction portfolios have out-of-market exposure of 5.2 percent of their combined portfolios and 2.8 percent of total portfolio loans at December 31, 2017 and 5.2 percent of their combined portfolios and 2.7 percent of total portfolio loans at December 31, 2016.

The following table summarizes our restructured loans as of the dates presented:



	December 31, 2017						December 31, 2016
(dollars in thousands)	Performing TDRs		Nonperforming TDRs		Total TDRs		Performing TDRs		Nonperforming TDRs		Total TDRs
Commercial real estate	$	2,579	$	967	$	3,546	$	2,994	$	646	$	3,640
Commercial and industrial	3,946		3,197		7,143		1,387		4,493		5,880
Commercial construction	2,420		2,413		4,833		2,966		430		3,396
Residential mortgage	2,039		3,585		5,624		2,375		5,068		7,443
Home equity	3,885		979		4,864		3,683		954		4,637
Installment and other consumer	32		9		41		18		7		25
Total	$	14,901	$	11,150	$	26,051	$	13,423	$	11,598	$	25,021

The following tables present the restructured loans by type of concession for the years ended December 31:



	2017								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
Chapter 7 bankruptcy⁽²⁾	—	$	—	$	—	$	—		1	$	709	$	646	$	(63	)
Interest Rate Reduction	—	—		—		—			1	250		242		(8		)
Maturity date extension	1	400		398		(2		)	—	—		—		—
Commercial and industrial
Maturity date extension	1	274		777		503			4	4,756		3,334		(1,422		)
Maturity date extension and interest rate reduction	2	1,800		1,805		5			—	—		—		—
Principal deferral	2	113		113		—			5	985		986		1
Commercial construction
Maturity date extension	—	—		—		—			3	1,251		1,151		(100		)
Principal forgiveness	2	1,996		1,996		—			—	—		—		—
Residential mortgage
Chapter 7 bankruptcy⁽²⁾	1	33		31		(2		)	7	439		413		(26		)
Maturity date extension	—	—		—		—			1	483		414		(69		)
Maturity date extension and interest rate reduction	—	—		—		—			1	280		279		(1		)
Principal deferral	—	—		—		—			1	3,273		3,133		(140		)
Home equity
Chapter 7 bankruptcy⁽²⁾	21	689		643		(46		)	19	676		643		(33		)
Maturity date extension	1	231		231		—			5	305		298		(7		)
Maturity date extension and interest rate reduction	1	173		113		(60		)	2	604		598		(6		)
Principal deferral	—	—		—		—			1	47		45		(2		)
Installment and other consumer
Chapter 7 bankruptcy⁽²⁾	4	48		35		(13		)	2	16		10		(6		)
Total by Concession Type
Chapter 7 bankruptcy⁽²⁾	26	$	770	$	709	$	(61	)	29	$	1,840	$	1,712	$	(128	)
Interest rate reduction	—	—		—		—			1	250		242		(8		)
Maturity date extension	3	905		1,406		501			13	6,795		5,197		(1,598		)
Maturity date extension and interest rate reduction	3	1,973		1,918		(55		)	3	884		877		(7		)
Principal deferral	2	113		113		—			7	4,305		4,164		(141		)
Principal forgiveness	2	1,996		1,996		—			—	—		—		—
Total	36	$	5,757	$	6,142	$	385		53	$	14,074	$	12,192	$	(1,882	)

⁽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.

During 2017, we modified 15 loans that were not considered to be TDRs, including 10 C&I loans for $10.8 million, and five CRE loans for $7.5 million. These modifications primarily represented insignificant delays in the timing of payments, concessions where we were adequately compensated through principal pay downs, fees or additional collateral or circumstances where we concluded that no concession was granted. As of December 31, 2017, we have two commitments totaling $0.2 million to lend additional funds on a TDR.

We returned one TDR totaling $2.0 million to accruing status during 2017. We returned five TDRs to accruing status during 2016 totaling $0.9 million.

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 years ended December 31, 2017 and 2016 that were restructured within the last 12 months prior to defaulting.

The following table is a summary of nonperforming assets as of the dates presented:



	December 31,
(dollars in thousands)	2017		2016
Nonperforming Assets
Nonaccrual loans	$	12,788	$	31,037
Nonaccrual TDRs	11,150		11,598
Total nonaccrual loans	23,938		42,635
OREO	469		679
Total Nonperforming Assets	$	24,407	$	43,314

NPAs decreased $18.9 million to $24.4 million during 2017 compared to $43.3 million for the year ended 2016. The decrease primarily related to two large commercial nonperforming, impaired loans that paid off during the year that totaled $10.5 million.

The following table presents a summary of the aggregate amount of loans to certain officers, directors of S&T or any affiliates of such persons as of December 31:



(dollars in thousands)	2017			2016
Balance at beginning of year	$	25,167		$	24,517
New loans	25,203			22,740
Repayments or no longer considered a related party	(40,300		)	(22,090		)
	$	10,070		$	25,167