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Loans, net and allowance for loan losses | 12 Months Ended
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Dec. 31, 2014
Receivables [Abstract] |
Loans, net and allowance for loan losses | 5. Loans, net and allowance for loan losses: The major classifications of loans outstanding, net of deferred loan origination fees and costs at December 31, 2014 and 2013 are summarized as follows. Net deferred loan costs were $651 and $24 in 2014 and 2013, respectively.
December 31 |  | 2014 |  |  | 2013 |
Commercial |  | $ | 319,590 |  |  | $ | 350,680 |
Real estate: |  |  |  |  |  |  |  |
Commercial |  |  | 493,481 |  |  |  | 413,058 |
Residential |  |  | 310,667 |  |  |  | 322,062 |
Consumer |  |  | 86,156 |  |  |  | 90,817 |
Total |  | $ | 1,209,894 |  |  | $ | 1,176,617 |
Loans outstanding to directors, executive officers, principal stockholders or to their affiliates totaled $16,484 and $14,205 at December 31, 2014 and 2013, respectively. Advances and repayments during 2014 totaled $2,764 and $485 respectively. These loans are made during the ordinary course of business at the Company’s normal credit terms. There were no related party loans that were classified as nonaccrual, past due, or restructured or considered a potential credit risk at December 31, 2014 and 2013. At December 31, 2014, the majority of the Company’s loans were at least partially secured by real estate in Northeastern Pennsylvania. Therefore, a primary concentration of credit risk is directly related to the real estate market in this area. Changes in the general economy, local economy or in the real estate market could affect the ultimate collectability of this portion of the loan portfolio. Management does not believe there are any other significant concentrations of credit risk that could affect the loan portfolio. The changes in the allowance for loan losses account by major classification of loan for the year ended December 31, 2014, 2013, and 2012 were as follows:
|  |  |  |  | Real estate |  |  |  |  |  |  |  |  |  |
December 31, 2014 |  | Commercial |  |  | Commercial |  |  | Residential |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 2,008 |  |  | $ | 2,394 |  |  | $ | 3,135 |  |  | $ | 1,114 |  |  | $ |  |  |  | $ | 8,651 |
Charge-offs |  |  | (601 | ) |  |  | (500 | ) |  |  | (804 | ) |  |  | (386 | ) |  |  |  |  |  |  | (2,291 | )
Recoveries |  |  | 9 |  |  |  | 292 |  |  |  | 38 |  |  |  | 115 |  |  |  |  |  |  |  | 454 |
Provisions |  |  | 905 |  |  |  | 851 |  |  |  | 1,321 |  |  |  | 447 |  |  |  |  |  |  |  | 3,524 |
Ending balance |  | $ | 2,321 |  |  | $ | 3,037 |  |  | $ | 3,690 |  |  | $ | 1,290 |  |  | $ |  |  |  | $ | 10,338 |
Ending balance: individually evaluated for impairment |  |  | 1,072 |  |  |  | 805 |  |  |  | 767 |  |  |  | 38 |  |  |  |  |  |  |  | 2,682 |
Ending balance: collectively evaluated for impairment |  |  | 1,081 |  |  |  | 2,125 |  |  |  | 2,921 |  |  |  | 1,252 |  |  |  |  |  |  |  | 7,379 |
Ending balance: loans acquired with deteriorated credit quality |  | $ | 168 |  |  | $ | 107 |  |  | $ | 2 |  |  | $ |  |  |  | $ |  |  |  | $ | 277 |
Loans receivable: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 319,590 |  |  | $ | 493,481 |  |  | $ | 310,667 |  |  | $ | 86,156 |  |  | $ |  |  |  | $ | 1,209,894 |
Ending balance: individually evaluated for impairment |  |  | 2,595 |  |  |  | 5,084 |  |  |  | 4,001 |  |  |  | 127 |  |  |  |  |  |  |  | 11,807 |
Ending balance: collectively evaluated for impairment |  |  | 315,642 |  |  |  | 487,024 |  |  |  | 306,608 |  |  | $ | 86,029 |  |  |  |  |  |  |  | 1,195,303 |
Ending balance: loans acquired with deteriorated credit quality |  | $ | 1,353 |  |  | $ | 1,373 |  |  | $ | 58 |  |  |  |  |  |  | $ |  |  |  | $ | 2,784 |
|  |  |  |  | Real estate |  |  |  |  |  |  |  |  |  |
December 31, 2013 |  | Commercial |  |  | Commercial |  |  | Residential |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 799 |  |  | $ | 2,304 |  |  | $ | 2,981 |  |  | $ | 866 |  |  | $ |  |  |  | $ | 6,950 |
Charge-offs |  |  | (5 | ) |  |  | (15 | ) |  |  | (508 | ) |  |  | (313 | ) |  |  |  |  |  |  | (841 | )
Recoveries |  |  | 1 |  |  |  | 20 |  |  |  | 111 |  |  |  | 49 |  |  |  |  |  |  |  | 181 |
Provisions |  |  | 1,213 |  |  |  | 85 |  |  |  | 551 |  |  |  | 512 |  |  |  |  |  |  |  | 2,361 |
Ending balance |  | $ | 2,008 |  |  | $ | 2,394 |  |  | $ | 3,135 |  |  | $ | 1,114 |  |  | $ |  |  |  | $ | 8,651 |
Ending balance: individually evaluated for impairment |  |  | 1,500 |  |  |  | 300 |  |  |  | 224 |  |  |  |  |  |  |  |  |  |  |  | 2,024 |
Ending balance: collectively evaluated for impairment |  |  | 508 |  |  |  | 2,094 |  |  |  | 2,911 |  |  |  | 1,114 |  |  |  |  |  |  |  | 6,627 |
Ending balance: loans acquired with deteriorated credit quality |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |  |  | $ |  |
Loans receivable: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 350,680 |  |  | $ | 413,058 |  |  | $ | 322,062 |  |  | $ | 90,817 |  |  | $ |  |  |  | $ | 1,176,617 |
Ending balance: individually evaluated for impairment |  |  | 4,504 |  |  |  | 7,711 |  |  |  | 3,321 |  |  |  | 90 |  |  |  |  |  |  |  | 15,626 |
Ending balance: collectively evaluated for impairment |  |  | 343,502 |  |  |  | 401,168 |  |  |  | 318,274 |  |  | $ | 90,727 |  |  |  |  |  |  |  | 1,153,671 |
Ending balance: loans acquired with deteriorated credit quality |  | $ | 2,674 |  |  | $ | 4,179 |  |  | $ | 467 |  |  |  |  |  |  | $ |  |  |  | $ | 7,320 |
|  |  |  |  | Real estate |  |  |  |  |  |  |  |  |  |
December 31, 2012 |  | Commercial |  |  | Commercial |  |  | Residential |  |  | Consumer |  |  | Unallocated |  |  | Total |
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 793 |  |  | $ | 2,294 |  |  | $ | 2,855 |  |  | $ | 769 |  |  | $ |  |  |  | $ | 6,711 |
Charge-offs |  |  | (78 | ) |  |  | (33 | ) |  |  | (431 | ) |  |  | (275 | ) |  |  |  |  |  |  | (817 | )
Recoveries |  |  | 1 |  |  |  | 6 |  |  |  | 67 |  |  |  | 58 |  |  |  |  |  |  |  | 132 |
Provisions |  |  | 83 |  |  |  | 37 |  |  |  | 490 |  |  |  | 314 |  |  |  |  |  |  |  | 924 |
Ending balance |  | $ | 799 |  |  | $ | 2,304 |  |  | $ | 2,981 |  |  | $ | 866 |  |  | $ |  |  |  | $ | 6,950 |
Ending balance: individually evaluated for impairment |  |  | 351 |  |  |  | 550 |  |  |  | 325 |  |  |  |  |  |  |  |  |  |  |  | 1,226 |
Ending balance: collectively evaluated for impairment |  | $ | 448 |  |  | $ | 1,754 |  |  | $ | 2,656 |  |  | $ | 866 |  |  | $ |  |  |  | $ | 5,724 |
Loans receivable: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending balance |  | $ | 91,724 |  |  | $ | 217,496 |  |  | $ | 261,912 |  |  | $ | 52,398 |  |  | $ |  |  |  | $ | 623,530 |
Ending balance: individually evaluated for impairment |  |  | 655 |  |  |  | 2,160 |  |  |  | 2,425 |  |  |  | 31 |  |  |  |  |  |  |  | 5,271 |
Ending balance: collectively evaluated for impairment |  | $ | 91,069 |  |  | $ | 215,336 |  |  | $ | 259,487 |  |  | $ | 52,367 |  |  | $ |  |  |  | $ | 618,259 |
The following tables present the major classification of loans summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company’s internal risk rating system at December 31, 2014 and 2013:
December 31, 2014: |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
Commercial |  | $ | 306,066 |  |  | $ | 6,135 |  |  | $ | 7,389 |  |  | $ |  |  |  | $ | 319,590 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 472,270 |  |  |  | 9,858 |  |  |  | 11,353 |  |  |  |  |  |  |  | 493,481 |
Residential |  |  | 300,299 |  |  |  | 2,123 |  |  |  | 8,245 |  |  |  |  |  |  |  | 310,667 |
Consumer |  |  | 86,037 |  |  |  | 13 |  |  |  | 106 |  |  |  |  |  |  |  | 86,156 |
Total |  | $ | 1,164,672 |  |  | $ | 18,129 |  |  | $ | 27,093 |  |  | $ |  |  |  | $ | 1,209,894 |
December 31, 2013: |  | Pass |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
Commercial |  | $ | 332,257 |  |  | $ | 7,025 |  |  | $ | 11,398 |  |  | $ |  |  |  | $ | 350,680 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 386,825 |  |  |  | 10,701 |  |  |  | 15,532 |  |  |  |  |  |  |  | 413,058 |
Residential |  |  | 314,544 |  |  |  | 861 |  |  |  | 6,657 |  |  |  |  |  |  |  | 322,062 |
Consumer |  |  | 90,718 |  |  |  | 9 |  |  |  | 90 |  |  |  |  |  |  |  | 90,817 |
Total |  | $ | 1,124,344 |  |  | $ | 18,596 |  |  | $ | 33,677 |  |  | $ |  |  |  | $ | 1,176,617 |
Information concerning nonaccrual loans by major loan classification at December 31, 2014 and 2013 is summarized as follows:
December 31, |  | 2014 |  |  | 2013 |
Commercial |  | $ | 1,322 |  |  | $ | 2,035 |
Real estate: |  |  |  |  |  |  |  |
Commercial |  |  | 3,732 |  |  |  | 9,172 |
Residential |  |  | 3,523 |  |  |  | 3,569 |
Consumer |  |  | 122 |  |  |  | 90 |
Total |  | $ | 8,699 |  |  | $ | 14,866 |
The major classification of loans by past due status at December 31, 2014 and 2013 are summarized as follows:
December 31, 2014 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater than 90 Days |  |  | Total Past Due |  |  | Current |  |  | Total Loans |  |  | Loans > 90 Days and Accruing |
Commercial |  | $ | 898 |  |  | $ | 117 |  |  | $ | 1,322 |  |  | $ | 2,337 |  |  | $ | 317,253 |  |  | $ | 319,590 |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 2,100 |  |  |  | 888 |  |  |  | 3,868 |  |  |  | 6,856 |  |  |  | 486,625 |  |  |  | 493,481 |  |  | $ | 136 |
Residential |  |  | 3,154 |  |  |  | 1,239 |  |  |  | 4,585 |  |  |  | 8,978 |  |  |  | 301,689 |  |  |  | 310,667 |  |  |  | 1,062 |
Consumer |  |  | 848 |  |  |  | 247 |  |  |  | 547 |  |  |  | 1,642 |  |  |  | 84,514 |  |  |  | 86,156 |  |  |  | 425 |
Total |  | $ | 7,000 |  |  | $ | 2,491 |  |  | $ | 10,322 |  |  | $ | 19,813 |  |  | $ | 1,190,081 |  |  | $ | 1,209,894 |  |  | $ | 1,623 |
December 31, 2013 |  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | Greater than 90 Days |  |  | Total Past Due |  |  | Current |  |  | Total Loans |  |  | Loans > 90 Days and Accruing |
Commercial |  | $ | 1,052 |  |  | $ | 105 |  |  | $ | 2,041 |  |  | $ | 3,198 |  |  | $ | 347,482 |  |  | $ | 350,680 |  |  | $ | 6 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 1,641 |  |  |  | 75 |  |  |  | 9,372 |  |  |  | 11,088 |  |  |  | 401,970 |  |  |  | 413,058 |  |  |  | 200 |
Residential |  |  | 3,676 |  |  |  | 985 |  |  |  | 4,247 |  |  |  | 8,908 |  |  |  | 313,154 |  |  |  | 322,062 |  |  |  | 678 |
Consumer |  |  | 798 |  |  |  | 313 |  |  |  | 661 |  |  |  | 1,772 |  |  |  | 89,045 |  |  |  | 90,817 |  |  |  | 571 |
Total |  | $ | 7,167 |  |  | $ | 1,478 |  |  | $ | 16,321 |  |  | $ | 24,966 |  |  | $ | 1,151,651 |  |  | $ | 1,176,617 |  |  | $ | 1,455 |
The following tables summarize information concerning impaired loans as of and for the years ended December 31, 2014, 2013 and 2012 by major loan classification:
|  |  |  |  |  |  |  |  |  |  | For the Year Ended |
December 31, 2014 |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 2,379 |  |  | $ | 4,084 |  |  |  |  |  |  | $ | 2,669 |  |  | $ | 141 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 2,932 |  |  |  | 3,690 |  |  |  |  |  |  |  | 7,944 |  |  |  | 120 |
Residential |  |  | 2,672 |  |  |  | 2,857 |  |  |  |  |  |  |  | 2,731 |  |  |  | 4 |
Consumer |  |  | 83 |  |  |  | 83 |  |  |  |  |  |  |  | 94 |  |  |  |  |
Total |  |  | 8,066 |  |  |  | 10,714 |  |  |  |  |  |  |  | 13,438 |  |  |  | 265 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 1,569 |  |  |  | 1,569 |  |  | $ | 1,240 |  |  |  | 1,787 |  |  |  | 58 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 3,525 |  |  |  | 3,525 |  |  |  | 912 |  |  |  | 2,293 |  |  |  | 28 |
Residential |  |  | 1,387 |  |  |  | 1,387 |  |  |  | 769 |  |  |  | 590 |  |  |  | 10 |
Consumer |  |  | 44 |  |  |  | 44 |  |  |  | 38 |  |  |  | 10 |  |  |  | 1 |
Total |  |  | 6,525 |  |  |  | 6,525 |  |  |  | 2,959 |  |  |  | 4,680 |  |  |  | 97 |
Commercial |  |  | 3,948 |  |  |  | 5,653 |  |  |  | 1,240 |  |  |  | 4,456 |  |  |  | 199 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 6,457 |  |  |  | 7,215 |  |  |  | 912 |  |  |  | 10,237 |  |  |  | 148 |
Residential |  |  | 4,059 |  |  |  | 4,244 |  |  |  | 769 |  |  |  | 3,321 |  |  |  | 14 |
Consumer |  |  | 127 |  |  |  | 127 |  |  |  | 38 |  |  |  | 104 |  |  |  | 1 |
Total |  | $ | 14,591 |  |  | $ | 17,239 |  |  | $ | 2,959 |  |  | $ | 18,118 |  |  | $ | 362 |
|  |  |  |  |  |  |  |  |  |  | For the Year Ended |
December 31, 2013 |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 4,978 |  |  | $ | 9,474 |  |  |  |  |  |  | $ | 5,824 |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 10,496 |  |  |  | 13,352 |  |  |  |  |  |  |  | 10,095 |  |  |  |  |
Residential |  |  | 3,004 |  |  |  | 3,437 |  |  |  |  |  |  |  | 2,614 |  |  |  |  |
Consumer |  |  | 90 |  |  |  | 90 |  |  |  |  |  |  |  | 95 |  |  |  |  |
Total |  |  | 18,568 |  |  |  | 26,353 |  |  |  |  |  |  |  | 18,628 |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 2,200 |  |  |  | 2,200 |  |  | $ | 1,500 |  |  |  | 2,182 |  |  | $ | 95 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 1,394 |  |  |  | 1,394 |  |  |  | 300 |  |  |  | 1,409 |  |  |  | 76 |
Residential |  |  | 784 |  |  |  | 784 |  |  |  | 224 |  |  |  | 672 |  |  |  | 13 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total |  |  | 4,378 |  |  |  | 4,378 |  |  |  | 2,024 |  |  |  | 4,263 |  |  |  | 184 |
Commercial |  |  | 7,178 |  |  |  | 11,674 |  |  |  | 1,500 |  |  |  | 8,006 |  |  |  | 95 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 11,890 |  |  |  | 14,746 |  |  |  | 300 |  |  |  | 11,504 |  |  |  | 76 |
Residential |  |  | 3,788 |  |  |  | 4,221 |  |  |  | 224 |  |  |  | 3,286 |  |  |  | 13 |
Consumer |  |  | 90 |  |  |  | 90 |  |  |  |  |  |  |  | 95 |  |  |  |  |
Total |  | $ | 22,946 |  |  | $ | 30,731 |  |  | $ | 2,024 |  |  | $ | 22,891 |  |  | $ | 184 |
|  |  |  |  |  |  |  |  |  |  | For the Year Ended |
December 31, 2012 |  | Recorded Investment |  |  | Unpaid Principal Balance |  |  | Related Allowance |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  | $ | 304 |  |  | $ | 304 |  |  |  |  |  |  | $ | 152 |  |  |  |  |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 145 |  |  |  | 145 |  |  |  |  |  |  |  | 201 |  |  |  |  |
Residential |  |  | 928 |  |  |  | 928 |  |  |  |  |  |  |  | 1,152 |  |  |  |  |
Consumer |  |  | 31 |  |  |  | 31 |  |  |  |  |  |  |  | 68 |  |  |  |  |
Total |  |  | 1,408 |  |  |  | 1,408 |  |  |  |  |  |  |  | 1,573 |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 351 |  |  |  | 351 |  |  | $ | 351 |  |  |  | 351 |  |  | $ | 17 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 2,015 |  |  |  | 2,015 |  |  |  | 550 |  |  |  | 2,104 |  |  |  | 114 |
Residential |  |  | 1,497 |  |  |  | 1,497 |  |  |  | 325 |  |  |  | 1,040 |  |  |  | 44 |
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Total |  |  | 3,863 |  |  |  | 3,863 |  |  |  | 1,226 |  |  |  | 3,495 |  |  |  | 175 |
Commercial |  |  | 655 |  |  |  | 655 |  |  |  | 351 |  |  |  | 503 |  |  |  | 17 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial |  |  | 2,160 |  |  |  | 2,160 |  |  |  | 550 |  |  |  | 2,305 |  |  |  | 114 |
Residential |  |  | 2,425 |  |  |  | 2,425 |  |  |  | 325 |  |  |  | 2,192 |  |  |  | 44 |
Consumer |  |  | 31 |  |  |  | 31 |  |  |  |  |  |  |  | 68 |  |  |  |  |
Total |  | $ | 5,271 |  |  | $ | 5,271 |  |  | $ | 1,226 |  |  | $ | 5,068 |  |  | $ | 175 |
There were no amounts of interest income recognized using the cash-basis method on impaired loans for the years ended December 31, 2014, 2013 and 2012. As a part of the Merger, an adjustment was made to reflect the elimination of the allowance for loan losses related to the Peoples Bank loan portfolio, as required by purchase accounting standards. As a result, the acquired loan portfolio was evaluated based on risk characteristics and other credit and market criteria to determine a credit quality adjustment to the fair value of the loan acquired. The acquired loan balance was reduced by the aggregate amount of the credit quality adjustment in determining the fair value of the loans. The credit quality adjustment does not account for acquired loans deemed to be impaired in accordance with Accounting Standard Codification 310-30-30, previously known as Statement of Position (SOP) 03-3, “Accounting for Certain Loans Acquired in a Transfer.” These impaired loans are accounted for in the credit adjustment on distressed loans, which represents the portion of the loan balance that has been deemed uncollectible based on the management’s expectations of future cash flows for each respective loan. Based on management’s evaluation of the acquired loan portfolio, 29 loans were deemed impaired resulting in a credit adjustment on distressed loans of $6,892. As of December 31, 2014, there were a total of 15 loans remaining with a credit adjustment of $2,588. At December 31, 2014, the Company had total impaired loans of $14,591. The impaired loan balance includes $2,784 of impaired loans acquired as part of the merger net of a remaining fair value adjustment of $2,648. Management performed an evaluation of expected future cash flows, including the anticipated cash flow from the sale of collateral, and compared that to the carrying amount of the impaired loans. Based on these evaluations, the Company has determined that an additional reserve of $277 was required against the impaired loans at December 31, 2014. The changes in the accretible yield and nonaccretible difference of acquired loans accounted for under ASC310 for the years ended December 31, 2014, 2013 and 2012, were as follows:
|  | 2014 |  |  | 2013 |  |  | 2012 |
Year ended December 31 |  | Accretible |  |  | Nonaccretible |  |  | Accretible |  |  | Nonaccretible |  |  | Accretible |  |  | Nonaccretible |
Beginning Balance, January 1 |  | $ | 895 |  |  | $ | 6,892 |  |  |  |  |  |  |  |  |  |  | $ |  |  |  | $ | 211 |
Additions |  |  |  |  |  |  |  |  |  | $ | 934 |  |  | $ | 6,892 |  |  |  |  |  |  |  |  |
Accretion |  |  | (280 | ) |  |  |  |  |  |  | (39 | ) |  |  |  |  |  |  |  |  |  |  |  |
Charge-offs |  |  | (398 | ) |  |  | (2,703 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Payments |  |  | (157 | ) |  |  | (1,601 | ) |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (211 | )
Ending Balance, December 31 |  | $ | 60 |  |  | $ | 2,588 |  |  | $ | 895 |  |  | $ | 6,892 |  |  | $ |  |  |  | $ |  |
Included in the commercial loan and commercial real estate categories are troubled debt restructurings that were classified as impaired. Trouble debt restructurings totaled $2,933, $2,487 and $351 at December 31, 2014, 2013 and 2012, respectively. There were three loans modified in 2014 and no loans modified in 2013 or 2012 that resulted in troubled debt restructurings. The following table summarizes the loans whose terms have been modified resulting in troubled debt restructurings during the year ended December 31, 2014.
December 31, 2014 |  | Number of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Recorded Investment |
Commercial real estate |  |  | 1 |  |  | $ | 4,408 |  |  | $ | 2,500 |  |  | $ | 2,457 |
Residential mortgage |  |  | 2 |  |  |  | 479 |  |  |  | 479 |  |  |  | 476 |
Total |  |  | 3 |  |  | $ | 4,887 |  |  | $ | 2,979 |  |  | $ | 2,933 |
There were no payment defaults within 12 months of their modification on loans considered troubled debt restructurings for the years ended December 31, 2014, 2013 and 2012.

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