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Loans and Loans Held for Sale | 3 Months Ended
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Mar. 31, 2020
Receivables [Abstract] |
LOANS AND LOANS HELD FOR SALE | LOANS AND LOANS HELD FOR SALE Loans are presented net of unearned income of $5.0 million at March 31, 2020 and $4.6 million at December 31, 2019 and net of a discount related to purchase accounting fair value adjustments of $10.9 million and $12.3 million at March 31, 2020 and December 31, 2019. The following table presents loans as of the dates presented:
(dollars in thousands) | March 31, 2020 |  | December 31, 2019
Commercial |  |  |
Commercial real estate | $ | 3,442,495 |  |  | $ | 3,416,518 |
Commercial and industrial | 1,781,402 |  |  | 1,720,833 |
Commercial construction | 396,518 |  |  | 375,445 |
Total Commercial Loans | 5,620,415 |  |  | 5,512,796 |
Consumer |  |  |
Residential mortgage | 988,816 |  |  | 998,585 |
Home Equity | 544,405 |  |  | 538,348 |
Installment and other consumer | 79,887 |  |  | 79,033 |
Consumer construction | 13,222 |  |  | 8,390 |
Total Consumer Loans | 1,626,330 |  |  | 1,624,356 |
Total Portfolio Loans | 7,246,745 |  |  | 7,137,152 |
Loans held for sale | 7,309 |  |  | 5,256 |
Total Loans(1) | $ | 7,254,054 |  |  | $ | 7,142,408 |
(1) Excludes interest receivable of $22.1 million at both March 31, 2020 and December 31, 2019. Interest receivable is included in other assets in the consolidated balance sheets. 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 77.6 percent of total portfolio loans at March 31, 2020 and 77.2 percent at December 31, 2019. Within our commercial portfolio, the CRE and Commercial Construction portfolios combined comprised $3.8 billion or 68.3 percent of total commercial loans at March 31, 2020 and $3.8 billion or 68.8 percent of total commercial loans at December 31, 2019 and 53.0 percent of total portfolio loans at March 31, 2020 and 53.1 percent at December 31, 2019. Further segmentation of the CRE and commercial construction portfolios by collateral type reveals no concentration in excess of 13.6 percent of both total CRE and commercial construction loans at March 31, 2020 and 11 percent at December 31, 2019. We lend primarily in Pennsylvania and the contiguous states of Ohio, New York, West Virginia and Maryland. The majority of our commercial and consumer loans are made to businesses and individuals in this geography, resulting in a 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. We also use subscription services for additional geographic and industry specific information. Our CRE and commercial construction portfolios have exposure outside of this geography of 5.4 percent of the combined portfolios and 2.8 percent of total portfolio loans at March 31, 2020. This compares to 5.4 percent of the combined portfolios and 2.9 percent of total portfolio loans at December 31, 2019. We individually evaluate all substandard and nonaccrual commercial loans that have experienced a forbearance or change in terms agreement, and 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 will be reported as such 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. 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 tables summarize restructured loans as of the dates presented:
| March 31, 2020
(dollars in thousands) | Performing TDRs |  | Nonperforming TDRs |  | Total TDRs
Commercial real estate | $ | 30 |  |  | $ | 28,973 |  |  | $ | 29,003 |
Commercial and industrial | 4,566 |  |  | 4,665 |  |  | 9,231 |
Commercial construction | 3,316 |  |  | — |  |  | 3,316 |
Business banking | 1,524 |  |  | 352 |  |  | 1,876 |
Consumer real estate | 5,749 |  |  | 2,064 |  |  | 7,813 |
Other consumer | 4 |  |  | — |  |  | 4 |
Total(1) | $ | 15,189 |  |  | $ | 36,055 |  |  | $ | 51,243 |
(1) Refer to Note 1, Basis of Presentation for details of reclassification of our portfolio segments related to the adoption of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
| December 31, 2019
(dollars in thousands) | Performing TDRs |  | Nonperforming TDRs |  | Total TDRs
Commercial real estate | $ | 22,233 |  |  | $ | 6,713 |  |  | $ | 28,946 |
Commercial and industrial | 6,909 |  |  | 695 |  |  | 7,604 |
Commercial construction | 1,425 |  |  | — |  |  | 1,425 |
Residential mortgage | 2,013 |  |  | 822 |  |  | 2,835 |
Home equity | 4,371 |  |  | 678 |  |  | 5,049 |
Installment and other consumer | 9 |  |  | 4 |  |  | 13 |
Total | $ | 36,960 |  |  | $ | 8,912 |  |  | $ | 45,872 |
The significant increase in nonperforming TDRs at March 31, 2020 compared to December 31, 2019 primarily related to a $20.9 million CRE relationship that became a performing TDR in the third quarter of 2019 and then moved to nonperforming in the first quarter of 2020 when the borrower experienced financial deterioration that led to cash flow issues. The relationship was individually assessed at March 31, 2020 resulting in no ACL due to the borrower being current on their payments under the modified terms and the relationship is fully collateralized. There were no TDRs that returned to accruing status during the three months ended March 31, 2020. There were three TDRs totaling $1.7 million that returned to accruing status during the three months ended March 31, 2019. The following tables present the restructured loans by portfolio segment and by type of concession for the three months ended March 31, 2020 and 2019:
| Three Months Ended March 31, 2020
(dollars in thousands) | Number of Loans |  | Pre-Modification Outstanding Recorded Investment(1) |  | Post-Modification Outstanding Recorded Investment(1) |  | Total Difference in Recorded Investment
Totals by Loan Segment |  |  |  |  |  |  |
Commercial Real Estate |  |  |  |  |  |  |
Principal deferral and maturity date extension | 1 |  |  | $ | 2,210 |  |  | $ | 2,210 |  |  | $ | — |
Total Commercial Real Estate | 1 |  |  | 2,210 |  |  | 2,210 |  |  | — |
Commercial and Industrial |  |  |  |  |  |  |
Principal deferral and maturity date extension | 5 |  |  | 3,780 |  |  | 3,780 |  |  | — |
Total Commercial and Industrial | 5 |  |  | 3,780 |  |  | 3,780 |  |  | — |
Commercial Construction |  |  | — |  |  |  |  |
Maturity date extension | 1 |  |  | 1,891 |  |  | 1,891 |  |  | — |
Total Commercial Construction | 1 |  |  | 1,891 |  |  | 1,891 |  |  | — |
Consumer Real Estate |  |  |  |  |  |  |
Consumer bankruptcy(2) | 6 |  |  | 388 |  |  | 388 |  |  | — |
Maturity date extension and reduction in payment | 1 |  |  | 27 |  |  | 27 |  |  | — |
Total Consumer Real Estate | 7 |  |  | 415 |  |  | 415 |  |  | — |
Totals by Concession Type |  |  |  |  |  |  |
Principal deferral and maturity date extension | 6 |  |  | 5,991 |  |  | 5,991 |  |  | — |
Maturity date extension | 1 |  |  | 1,891 |  |  | 1,891 |  |  | — |
Consumer bankruptcy(2) | 6 |  |  | 388 |  |  | 388 |  |  | — |
Maturity date extension and payment reduction | 1 |  |  | 27 |  |  | 27 |  |  | — |
Total(3) | 14 |  |  | $ | 8,297 |  |  | $ | 8,297 |  |  | $ | — |
(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) Consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed. (3) Refer to Note 1, Basis of Presentation for details of reclassification of our portfolio segments related to the adoption of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
| Three Months Ended March 31, 2019
(dollars in thousands) | Number of Loans |  | Pre-Modification Outstanding Recorded Investment(1) |  | Post-Modification Outstanding Recorded Investment(1) |  | Total Difference in Recorded Investment
Totals by Loan Segment |  |  |  |  |  |  |
Commercial and Industrial |  |  |  |  |  |  |
Maturity date extension and interest rate reduction | 1 |  |  | $ | 5,201 |  |  | $ | 5,201 |  |  | $ | — |
Principal deferral and maturity date extension | — |  |  | — |  |  | — |  |  | — |
Total Commercial and Industrial | 1 |  |  | 5,201 |  |  | 5,201 |  |  | — |
Residential Mortgage |  |  |  |  |  |  |
Consumer bankruptcy(2) | 1 |  |  | 49 |  |  | 49 |  |  | — |
Total Residential Mortgage | 1 |  |  | 49 |  |  | 49 |  |  | — |
Home Equity |  |  |  |  |  |  |
Consumer bankruptcy(2) | 7 |  |  | 191 |  |  | 168 |  |  | (23 | )
Interest rate reduction | 1 |  |  | 81 |  |  | 81 |  |  | — |
Maturity date extension and reduction in payment | — |  |  | — |  |  | — |  |  | — |
Total Home Equity | 8 |  |  | 272 |  |  | 249 |  |  | (23 | )
Totals by Concession Type |  |  |  |  |  |  |
Maturity date extension and interest rate reduction | 1 |  |  | 5,201 |  |  | 5,201 |  |  | — |
Consumer bankruptcy(2) | 8 |  |  | 240 |  |  | 217 |  |  | (23 | )
Interest rate reduction | 1 |  |  | 81 |  |  | 81 |  |  | — |
Total | 10 |  |  | $ | 5,522 |  |  | $ | 5,499 |  |  | $ | (23 | )
(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) Consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
In response to the COVID-19 pandemic and its economic impact to our customers, we implemented a short-term modification program that complies with the Coronavirus Aid, Relief, and Economic Security, or CARES Act to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. This program allows for a deferral of payments for 90 days, up to a maximum of 180 days for our commercial customers. The deferred payments along with interest accrued during the deferral period are due and payable on the maturity date. For our consumer customers interest does not accrue during the deferral period and the maturity date is extended by the length of the deferral period. Under the applicable guidance, none of these loans were considered restructured as of March 31, 2020. As of March 31, 2020, we had 20 commitments to lend an additional $2.3 million on TDRs. Defaulted TDRs are defined as loans having a payment default of 90 days or more after the restructuring takes place. There were 11 TDRs that defaulted during the three months ended March 31, 2020 totaling $21.1 million and no TDRs that defaulted during the three months ended March 31, 2019 that were restructured within the last 12 months prior to defaulting. The large increase in defaulted TDRs is related to one CRE customer with five notes totaling $20.9 million discussed above. The following table is a summary of nonperforming assets as of the dates presented:
| Nonperforming Assets
(dollars in thousands) | March 31, 2020 |  |  | December 31, 2019 |
Nonperforming Assets |  |  |  |  |
Nonaccrual loans |  | $ | 37,744 |  |  |  | $ | 45,145 |
Nonaccrual TDRs |  | 36,055 |  |  |  | 8,912 |
Total Nonaccrual Loans |  | 73,799 |  |  |  | 54,057 |
OREO |  | 3,389 |  |  |  | 3,525 |
Total Nonperforming Assets |  | $ | 77,188 |  |  |  | $ | 57,582 |
The significant increase in nonperforming TDRs primarily related to a $20.9 million CRE relationship discussed above.

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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/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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