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Loan and Lease Receivables, Impaired Loans and Leases and Allowance for Loan and Lease Losses (Tables)
12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Loan Composition Schedule
Loan and lease receivables consist of the following:
 
 
December 31,
2017
 
December 31,
2016
 
 
(In Thousands)
Commercial real estate:
 
 
 
 
Commercial real estate — owner occupied
 
$
200,387

 
$
176,459

Commercial real estate — non-owner occupied
 
470,236

 
473,158

Land development
 
40,154

 
56,638

Construction
 
125,157

 
101,206

Multi-family
 
136,978

 
92,762

1-4 family
 
44,976

 
45,651

Total commercial real estate
 
1,017,888

 
945,874

Commercial and industrial
 
429,002

 
450,298

Direct financing leases, net
 
30,787

 
30,951

Consumer and other:
 
 
 
 
Home equity and second mortgages
 
7,262

 
8,412

Other
 
18,099

 
16,329

Total consumer and other
 
25,361

 
24,741

Total gross loans and leases receivable
 
1,503,038

 
1,451,864

Less:
 
 
 
 
Allowance for loan and lease losses
 
18,763

 
20,912

Deferred loan fees
 
1,443

 
1,189

Loans and leases receivable, net
 
$
1,482,832

 
$
1,429,763

Ownership of SBA Loans
As of December 31, 2017 and 2016, the total amount of the Corporation’s ownership of SBA loans on the Consolidated Balance Sheets comprised of the following:
 
 
December 31,
2017
 
December 31,
2016
 
 
(In Thousands)
Retained, unguaranteed portions of sold SBA loans
 
$
30,071

 
$
30,418

Other SBA loans(1)
 
22,254

 
30,617

Total SBA loans
 
$
52,325

 
$
61,035

(1)
Primarily consisted of SBA Express loans and impaired SBA loans that were repurchased from the secondary market, all of which were not saleable as of December 31, 2017 and December 31, 2016, respectively.
Financing Receivable by Credit Quality Indicators
The following tables illustrate ending balances of the Corporation’s loan and lease portfolio, including impaired loans by class of receivable, and considering certain credit quality indicators as of December 31, 2017 and 2016:
 
 
December 31, 2017
 
 
Category
 
 
 
 
I
 
II
 
III
 
IV
 
Total
 
 
(Dollars in Thousands)
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
Commercial real estate — owner occupied
 
$
166,018

 
$
18,442

 
$
8,850

 
$
7,077

 
$
200,387

Commercial real estate — non-owner occupied
 
441,246

 
27,854

 
1,102

 
34

 
470,236

Land development
 
36,470

 
1,057

 

 
2,627

 
40,154

Construction
 
121,528

 
757

 

 
2,872

 
125,157

Multi-family
 
136,978

 

 

 

 
136,978

1-4 family
 
34,598

 
7,735

 
1,220

 
1,423

 
44,976

Total commercial real estate
 
936,838

 
55,845

 
11,172

 
14,033

 
1,017,888

Commercial and industrial
 
341,875

 
25,344

 
49,453

 
12,330

 
429,002

Direct financing leases, net
 
28,866

 
342

 
1,579

 

 
30,787

Consumer and other:
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
7,250

 
8

 

 
4

 
7,262

Other
 
17,745

 

 

 
354

 
18,099

Total consumer and other
 
24,995

 
8

 

 
358

 
25,361

Total gross loans and leases receivable
 
$
1,332,574

 
$
81,539

 
$
62,204

 
$
26,721

 
$
1,503,038

Category as a % of total portfolio
 
88.66
%
 
5.42
%
 
4.14
%
 
1.78
%
 
100.00
%


 
 
December 31, 2016
 
 
Category
 
 
 
 
I
 
II
 
III
 
IV
 
Total
 
 
(Dollars in Thousands)
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
Commercial real estate — owner occupied
 
$
142,704

 
$
20,294

 
$
11,174

 
$
2,287

 
$
176,459

Commercial real estate — non-owner occupied
 
447,895

 
20,933

 
2,721

 
1,609

 
473,158

Land development
 
52,082

 
823

 
293

 
3,440

 
56,638

Construction
 
93,510

 
3,154

 
1,624

 
2,918

 
101,206

Multi-family
 
87,418

 
1,937

 
3,407

 

 
92,762

1-4 family
 
38,504

 
3,144

 
1,431

 
2,572

 
45,651

Total commercial real estate
 
862,113

 
50,285

 
20,650

 
12,826

 
945,874

Commercial and industrial
 
348,201

 
42,949

 
46,675

 
12,473

 
450,298

Direct financing leases, net
 
29,351

 
1,600

 

 

 
30,951

Consumer and other:
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
8,271

 
121

 
12

 
8

 
8,412

Other
 
15,714

 

 
11

 
604

 
16,329

Total consumer and other
 
23,985

 
121

 
23

 
612

 
24,741

Total gross loans and leases receivable
 
$
1,263,650

 
$
94,955

 
$
67,348

 
$
25,911

 
$
1,451,864

Category as a % of total portfolio
 
87.04
%
 
6.54
%
 
4.64
%
 
1.78
%
 
100.00
%
Past Due Financing Receivables
The delinquency aging of the loan and lease portfolio by class of receivable as of December 31, 2017 and 2016 was as follows:
 
 
December 31, 2017
 
 
30-59
Days Past Due
 
60-89
Days Past Due
 
Greater
Than 90
Days Past Due
 
Total Past Due
 
Current
 
Total Loans and Leases
 
 
(Dollars in Thousands)
Accruing loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
$

 
$

 
$

 
$

 
$
193,366

 
$
193,366

Non-owner occupied
 

 

 

 

 
470,202

 
470,202

Land development
 

 

 

 

 
37,528

 
37,528

Construction
 

 
196

 

 
196

 
122,089

 
122,285

Multi-family
 

 

 

 

 
136,978

 
136,978

1-4 family
 
496

 

 

 
496

 
43,319

 
43,815

Commercial and industrial
 
1,169

 
197

 

 
1,366

 
415,315

 
416,681

Direct financing leases, net
 

 

 

 

 
30,787

 
30,787

Consumer and other:
 
 
 
 
 
 
 

 
 
 

Home equity and second mortgages
 
106

 

 

 
106

 
7,156

 
7,262

Other
 

 

 

 

 
17,745

 
17,745

Total
 
1,771

 
393

 

 
2,164

 
1,474,485

 
1,476,649

Non-accruing loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
405

 

 
4,836

 
5,241

 
1,780

 
7,021

Non-owner occupied
 

 

 

 

 
34

 
34

Land development
 

 

 

 

 
2,626

 
2,626

Construction
 

 

 
2,872

 
2,872

 

 
2,872

Multi-family
 

 

 

 

 

 

1-4 family
 

 

 
948

 
948

 
213

 
1,161

Commercial and industrial
 
782

 

 
7,349

 
8,131

 
4,190

 
12,321

Direct financing leases, net
 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 

 
 
 

Home equity and second mortgages
 

 

 

 

 

 

Other
 

 

 
345

 
345

 
9

 
354

Total
 
1,187

 

 
16,350

 
17,537

 
8,852

 
26,389

Total loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
405

 

 
4,836

 
5,241

 
195,146

 
200,387

Non-owner occupied
 

 

 

 

 
470,236

 
470,236

Land development
 

 

 

 

 
40,154

 
40,154

Construction
 

 
196

 
2,872

 
3,068

 
122,089

 
125,157

Multi-family
 

 

 

 

 
136,978

 
136,978

1-4 family
 
496

 

 
948

 
1,444

 
43,532

 
44,976

Commercial and industrial
 
1,951

 
197

 
7,349

 
9,497

 
419,505

 
429,002

Direct financing leases, net
 

 

 

 

 
30,787

 
30,787

Consumer and other:
 
 
 
 
 
 
 

 

 

Home equity and second mortgages
 
106

 

 

 
106

 
7,156

 
7,262

Other
 

 

 
345

 
345

 
17,754

 
18,099

Total
 
$
2,958

 
$
393

 
$
16,350

 
$
19,701

 
$
1,483,337

 
$
1,503,038

Percent of portfolio
 
0.20
%
 
0.03
%
 
1.09
%
 
1.32
%
 
98.68
%
 
100.00
%

 
 
December 31, 2016
 
 
30-59
Days Past Due
 
60-89
Days Past Due
 
Greater
Than 90
Days Past Due
 
Total Past Due
 
Current
 
Total Loans and Leases
 
 
(Dollars in Thousands)
Accruing loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
$

 
$

 
$

 
$

 
$
174,236

 
$
174,236

Non-owner occupied
 

 

 

 

 
471,549

 
471,549

Land development
 

 

 

 

 
53,198

 
53,198

Construction
 

 

 

 

 
98,288

 
98,288

Multi-family
 

 

 

 

 
92,762

 
92,762

1-4 family
 
75

 

 

 
75

 
43,639

 
43,714

Commercial and industrial
 
55

 
468

 

 
523

 
437,312

 
437,835

Direct financing leases, net
 

 

 

 

 
30,951

 
30,951

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 

 

 

 

 
8,412

 
8,412

Other
 

 

 

 

 
15,725

 
15,725

Total
 
130

 
468

 

 
598

 
1,426,072

 
1,426,670

Non-accruing loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 

 

 
1,183

 
1,183

 
1,040

 
2,223

Non-owner occupied
 

 

 

 

 
1,609

 
1,609

Land development
 

 

 

 

 
3,440

 
3,440

Construction
 
2,482

 

 
436

 
2,918

 

 
2,918

Multi-family
 

 

 

 

 

 

1-4 family
 

 

 
1,240

 
1,240

 
697

 
1,937

Commercial and industrial
 
3,345

 
168

 
6,740

 
10,253

 
2,210

 
12,463

Direct financing leases, net
 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 

 

 

 

 

 

Other
 
186

 

 
378

 
564

 
40

 
604

Total
 
6,013

 
168

 
9,977

 
16,158

 
9,036

 
25,194

Total loans and leases
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 

 

 
1,183

 
1,183

 
175,276

 
176,459

Non-owner occupied
 

 

 

 

 
473,158

 
473,158

Land development
 

 

 

 

 
56,638

 
56,638

Construction
 
2,482

 

 
436

 
2,918

 
98,288

 
101,206

Multi-family
 

 

 

 

 
92,762

 
92,762

1-4 family
 
75

 

 
1,240

 
1,315

 
44,336

 
45,651

Commercial and industrial
 
3,400

 
636

 
6,740

 
10,776

 
439,522

 
450,298

Direct financing leases, net
 

 

 

 

 
30,951

 
30,951

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 

 

 

 

 
8,412

 
8,412

Other
 
186

 

 
378

 
564

 
15,765

 
16,329

Total
 
$
6,143

 
$
636

 
$
9,977

 
$
16,756

 
$
1,435,108

 
$
1,451,864

Percent of portfolio
 
0.42
%
 
0.04
%
 
0.69
%
 
1.15
%
 
98.85
%
 
100.00
%
Schedule of Financing Receivables, Non Accrual Status
The Corporation’s total impaired assets consisted of the following at December 31, 2017 and 2016, respectively.
 
 
December 31,
2017
 
December 31,
2016
 
 
(In Thousands)
Non-accrual loans and leases
 
 
 
 
Commercial real estate:
 
 
 
 
Commercial real estate — owner occupied
 
$
7,021

 
$
2,223

Commercial real estate — non-owner occupied
 
34

 
1,609

Land development
 
2,626

 
3,440

Construction
 
2,872

 
2,918

Multi-family
 

 

1-4 family
 
1,161

 
1,937

Total non-accrual commercial real estate
 
13,714

 
12,127

Commercial and industrial
 
12,321

 
12,463

Direct financing leases, net
 

 

Consumer and other:
 
 
 
 
Home equity and second mortgages
 

 

Other
 
354

 
604

Total non-accrual consumer and other loans
 
354

 
604

Total non-accrual loans and leases
 
26,389

 
25,194

Foreclosed properties, net
 
1,069

 
1,472

Total non-performing assets
 
27,458

 
26,666

Performing troubled debt restructurings
 
332

 
717

Total impaired assets
 
$
27,790

 
$
27,383

 
 
December 31,
2017
 
December 31,
2016
Total non-accrual loans and leases to gross loans and leases
 
1.76
%
 
1.74
%
Total non-performing assets to total gross loans and leases plus foreclosed properties, net
 
1.83

 
1.83

Total non-performing assets to total assets
 
1.53

 
1.50

Allowance for loan and lease losses to gross loans and leases
 
1.25

 
1.44

Allowance for loan and lease losses to non-accrual loans and leases
 
71.10

 
83.00

Troubled Debt Restructurings on Financing Receivables
 
 
As of December 31, 2017
 
As of December 31, 2016
 
 
Number
of
Loans
 
Pre-Modification
Recorded
Investment
 
Post-Modification
Recorded
Investment
 
Number
of Loans
 
Pre-Modification
Recorded
Investment
 
Post-Modification
Recorded
Investment
 
 
(Dollars in Thousands)
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate — owner occupied
 
3
 
$
1,065

 
$
880

 
3
 
$
1,065

 
$
930

Commercial real estate — non-owner occupied
 
1
 
158

 
34

 
1
 
158

 
39

Land development
 
1
 
5,745

 
2,626

 
1
 
5,745

 
3,440

Construction
 
 

 

 
2
 
331

 
314

Multi-family
 
 

 

 
 

 

1-4 family
 
8
 
627

 
307

 
11
 
1,391

 
1,393

Commercial and industrial
 
10
 
8,759

 
4,951

 
10
 
8,094

 
7,058

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgage
 
2
 
37

 
4

 
1
 
37

 
8

Other
 
2
 
2,094

 
345

 
1
 
2,076

 
378

Total
 
27
 
$
18,485

 
$
9,147

 
30
 
$
18,897

 
$
13,560


Troubled Debt Restructurings by Modification Type
As of December 31, 2017 and 2016, the Corporation’s troubled debt restructurings grouped by type of concession were as follows:
 
 
As of December 31, 2017
 
As of December 31, 2016
 
 
Number of Loans
 
Recorded Investment
 
Number of Loans
 
Recorded Investment
 
 
(Dollars in Thousands)
Commercial real estate:
 
 
 
 
 
 
 
 
Extension of term
 

 
$

 
1

 
$
8

Interest rate concession
 
12

 
3,793

 
1

 
52

Combination of extension of term and interest rate concession
 
1

 
54

 
16

 
6,056

Commercial and industrial:
 
 
 
 
 
 
 
 
Combination of extension of term and interest rate concession
 
10

 
4,951

 
10

 
7,058

Consumer and other:
 
 
 
 
 
 
 
 
Extension of term
 
1

 
328

 
1

 
378

Combination of extension of term and interest rate concession
 
3

 
21

 
1

 
8

Total
 
27

 
$
9,147

 
30

 
$
13,560

Impaired Financing Receivables
The following represents additional information regarding the Corporation’s impaired loans and leases, including performing troubled debt restructurings, by class:
 
 
As of and for the Year Ended December 31, 2017
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Impairment
Reserve
 
Average
Recorded
Investment(1)
 
Foregone
Interest
Income
 
Interest
Income
Recognized
 
Net Foregone
Interest
Income
 
 
(In Thousands)
With no impairment reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
$
7,077

 
$
7,077

 
$

 
$
5,549

 
$
613

 
$

 
$
613

Non-owner occupied
 
34

 
75

 

 
1,830

 
97

 
226

 
(129
)
Land development
 
2,627

 
5,297

 

 
3,092

 
84

 

 
84

Construction
 

 

 

 
2,000

 
134

 
214

 
(80
)
Multi-family
 

 

 

 
1

 

 

 

1-4 family
 
1,423

 
1,706

 

 
2,146

 
53

 
7

 
46

Commercial and industrial
 
5,465

 
6,502

 

 
3,634

 
858

 
7

 
851

Direct financing leases, net
 

 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
4

 
3

 

 
7

 

 

 

Other
 
345

 
1,011

 

 
365

 
59

 

 
59

Total
 
16,975

 
21,671

 

 
18,624

 
1,898

 
454

 
1,444

With impairment reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 

 

 

 

 

 

 

Non-owner occupied
 

 

 

 

 

 

 

Land development
 

 

 

 

 

 

 

Construction
 
2,872

 
2,872

 
415

 
2,252

 
158

 

 
158

Multi-family
 

 

 

 

 

 

 

1-4 family
 

 

 

 

 

 

 

Commercial and industrial
 
6,865

 
8,813

 
4,067

 
12,288

 
639

 

 
639

Direct financing leases, net
 

 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 

 

 

 

 

 

 

Other
 
9

 
9

 
9

 

 

 

 

Total
 
9,746

 
11,694

 
4,491

 
14,540

 
797

 

 
797

Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
7,077

 
7,077

 

 
5,549

 
613

 

 
613

Non-owner occupied
 
34

 
75

 

 
1,830

 
97

 
226

 
(129
)
Land development
 
2,627

 
5,297

 

 
3,092

 
84

 

 
84

Construction
 
2,872

 
2,872

 
415

 
4,252

 
292

 
214

 
78

Multi-family
 

 

 

 
1

 

 

 

1-4 family
 
1,423

 
1,706

 

 
2,146

 
53

 
7

 
46

Commercial and industrial
 
12,330

 
15,315

 
4,067

 
15,922

 
1,497

 
7

 
1,490

Direct financing leases, net
 

 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
4

 
3

 

 
7

 

 

 

Other
 
354

 
1,020

 
9

 
365

 
59

 

 
59

Grand total
 
$
26,721

 
$
33,365

 
$
4,491

 
$
33,164

 
$
2,695

 
$
454

 
$
2,241

(1)
Average recorded investment is calculated primarily using daily average balances.
 
 
As of and for the Year Ended December 31, 2016
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Impairment
Reserve
 
Average
Recorded
Investment(1)
 
Foregone
Interest
Income
 
Interest
Income
Recognized
 
Net Foregone
Interest
Income
 
 
(In Thousands)
With no impairment reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Owner occupied
 
$
1,788

 
$
1,788

 
$

 
$
3,577

 
$
328

 
$
118

 
$
210

   Non-owner occupied
 
1,609

 
1,647

 

 
1,318

 
91

 
79

 
12

   Land development
 
3,440

 
6,111

 

 
3,898

 
107

 

 
107

   Construction
 
436

 
438




291


20



 
20

   Multi-family
 

 

 

 

 
1

 
134

 
(133
)
   1-4 family
 
2,379

 
2,379

 

 
2,755

 
125

 
94

 
31

Commercial and industrial
 
1,307

 
1,307

 

 
709

 
79

 
62

 
17

Direct financing leases, net
 

 

 

 
6

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Home equity and second mortgages
 
8

 
8

 

 
307

 
16

 
127

 
(111
)
   Other
 
378

 
1,044

 

 
510

 
71

 

 
71

      Total
 
11,345

 
14,722

 

 
13,371

 
838

 
614

 
224

With impairment reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Owner occupied
 
499

 
499

 
70

 
111

 
28

 

 
28

   Non-owner occupied
 

 

 

 

 

 

 

   Land development
 

 









 

   Construction
 
2,482

 
2,482


1,790


834


45



 
45

   Multi-family
 

 

 

 

 

 

 

   1-4 family
 
193

 
199

 
39

 
203

 
5

 

 
5

Commercial and industrial
 
11,166

 
11,166

 
3,700

 
8,448

 
701

 

 
701

Direct financing leases, net
 

 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Home equity and second mortgages
 

 

 

 

 

 

 

   Other
 
226

 
226

 

 
19

 

 

 

      Total
 
14,566

 
14,572

 
5,599

 
9,615

 
779

 

 
779

Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
   Owner occupied
 
2,287

 
2,287

 
70

 
3,688

 
356

 
118

 
238

   Non-owner occupied
 
1,609

 
1,647

 

 
1,318

 
91

 
79

 
12

   Land development
 
3,440

 
6,111

 

 
3,898

 
107

 

 
107

   Construction
 
2,918

 
2,920

 
1,790

 
1,125

 
65

 

 
65

   Multi-family
 

 

 

 

 
1

 
134

 
(133
)
   1-4 family
 
2,572

 
2,578

 
39

 
2,958

 
130

 
94

 
36

Commercial and industrial
 
12,473

 
12,473

 
3,700

 
9,157

 
780

 
62

 
718

Direct financing leases, net
 

 

 

 
6

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
8

 
8

 

 
307

 
16

 
127

 
(111
)
Other
 
604

 
1,270

 

 
529

 
71

 

 
71

      Grand total
 
$
25,911

 
$
29,294

 
$
5,599

 
$
22,986

 
$
1,617

 
$
614

 
$
1,003

(1)
Average recorded investment is calculated primarily using daily average balances.
 
 
As of and for the Year Ended December 31, 2015
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Impairment
Reserve
 
Average
Recorded
Investment(1)
 
Foregone
Interest
Income
 
Interest
Income
Recognized
 
Net Foregone
Interest
Income
 
 
(In Thousands)
With no impairment reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
$
2,164

 
$
2,164

 
$

 
$
712

 
$
53

 
$
12

 
$
41

Non-owner occupied
 
2,314

 
2,355

 

 
962

 
25

 

 
25

Land development
 
4,413

 
7,083

 

 
4,333

 
133

 

 
133

Construction
 
120

 
120

 

 
474

 

 

 

Multi-family
 
2

 
369

 

 
10

 
27

 

 
27

1-4 family
 
2,423

 
2,486

 

 
1,604

 
82

 
4

 
78

Commercial and industrial
 
2,546

 
2,590

 

 
544

 
172

 
6

 
166

Direct financing leases, net
 
38

 
38

 

 
4

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
500

 
500

 

 
390

 
23

 
63

 
(40
)
Other
 
655

 
1,321

 

 
688

 
82

 

 
82

Total
 
15,175

 
19,026

 

 
9,721

 
597

 
85

 
512

With impairment reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
814

 
814

 
20

 
215

 
7

 
2

 
5

Non-owner occupied
 

 

 

 

 

 

 

Land development
 

 

 

 

 

 

 

Construction
 
397

 
397

 
48

 
34

 

 

 

Multi-family
 

 

 

 

 

 

 

1-4 family
 
945

 
950

 
173

 
605

 
34

 

 
34

Commercial and industrial
 
6,603

 
6,603

 
847

 
810

 
102

 

 
102

Direct financing leases, net
 

 

 

 

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
99

 
99

 
25

 
58

 
10

 

 
10

Other
 

 

 

 

 

 

 

Total
 
8,858

 
8,863

 
1,113

 
1,722

 
153

 
2

 
151

Total:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
2,978

 
2,978

 
20

 
927

 
60

 
14

 
46

Non-owner occupied
 
2,314

 
2,355

 

 
962

 
25

 

 
25

Land development
 
4,413

 
7,083

 

 
4,333

 
133

 

 
133

Construction
 
517

 
517

 
48

 
508

 

 

 

Multi-family
 
2

 
369

 

 
10

 
27

 

 
27

1-4 family
 
3,368

 
3,436

 
173

 
2,209

 
116

 
4

 
112

Commercial and industrial
 
9,149

 
9,193

 
847

 
1,354

 
274

 
6

 
268

Direct financing leases, net
 
38

 
38

 

 
4

 

 

 

Consumer and other:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Home equity and second mortgages
 
599

 
599

 
25

 
448

 
33

 
63

 
(30
)
Other
 
655

 
1,321

 

 
688

 
82

 

 
82

Grand total
 
$
24,033

 
$
27,889

 
$
1,113

 
$
11,443

 
$
750

 
$
87

 
$
663

(1)
Average recorded investment is calculated primarily using daily average balances.
Summary of Allowance for Loan and Lease Loss Activity by Portfolio Segment
A summary of the activity in the allowance for loan and lease losses by portfolio segment is as follows:
 
 
As of and for the Year Ended December 31, 2017
 
 
Commercial
Real Estate
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
 
 
(Dollars in Thousands)
Beginning balance
 
$
12,384

 
$
7,970

 
$
558

 
$
20,912

Charge-offs
 
(127
)
 
(8,621
)
 
(92
)
 
(8,840
)
Recoveries
 
153

 
323

 
43

 
519

Net recoveries (charge-offs)
 
26

 
(8,298
)
 
(49
)
 
(8,321
)
Provision for credit losses
 
(2,279
)
 
8,553

 
(102
)
 
6,172

Ending balance
 
$
10,131

 
$
8,225

 
$
407

 
$
18,763

 
 
As of and for the Year Ended December 31, 2016
 
 
Commercial
Real Estate
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
 
 
(Dollars in Thousands)
Beginning balance
 
$
11,220

 
$
4,387

 
$
709

 
$
16,316

Charge-offs
 
(1,194
)
 
(2,273
)
 
(127
)
 
(3,594
)
Recoveries
 
274

 
91

 
7

 
372

Net charge-offs
 
(920
)
 
(2,182
)
 
(120
)
 
(3,222
)
Provision for credit losses
 
2,084

 
5,765

 
(31
)
 
7,818

Ending balance
 
$
12,384

 
$
7,970

 
$
558

 
$
20,912

 
 
As of and for the Year Ended December 31, 2015
 
 
Commercial
Real Estate
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
 
 
(Dollars in Thousands)
Beginning balance
 
$
8,619

 
$
5,492

 
$
218

 
$
14,329

Charge-offs
 
(793
)
 
(711
)
 
(9
)
 
(1,513
)
Recoveries
 
104

 
6

 
4

 
114

Net charge-offs
 
(689
)
 
(705
)
 
(5
)
 
(1,399
)
Provision for credit losses
 
3,290

 
(400
)
 
496

 
3,386

Ending balance
 
$
11,220

 
$
4,387

 
$
709

 
$
16,316

Allowance for Credit Losses on Financing Receivables
The following tables provide information regarding the allowance for loan and lease losses and balances by type of allowance methodology.
 
 
As of December 31, 2017
 
 
Commercial
Real Estate
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
 
 
(Dollars in Thousands)
Allowance for loan and lease losses:
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
$
9,716

 
$
4,158

 
$
398

 
$
14,272

Individually evaluated for impairment
 
415

 
4,067

 
9

 
4,491

Loans acquired with deteriorated credit quality
 

 

 

 

Total
 
$
10,131

 
$
8,225

 
$
407

 
$
18,763

Loans and lease receivables:
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
$
1,003,855

 
$
447,459

 
$
25,003

 
1,476,317

Individually evaluated for impairment
 
13,506

 
12,324

 
358

 
26,188

Loans acquired with deteriorated credit quality
 
527

 
6

 

 
533

Total
 
$
1,017,888

 
$
459,789

 
$
25,361

 
$
1,503,038

 
 
As of December 31, 2016
 
 
Commercial
Real Estate
 
Commercial
and
Industrial
 
Consumer
and Other
 
Total
 
 
(Dollars in Thousands)
Allowance for loan and lease losses:
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
$
10,485

 
$
4,270

 
$
558

 
$
15,313

Individually evaluated for impairment
 
1,899

 
3,700

 

 
5,599

Loans acquired with deteriorated credit quality
 

 

 

 

Total
 
$
12,384

 
$
7,970

 
$
558

 
$
20,912

Loans and lease receivables:
 
 
 
 
 
 
 
 
Collectively evaluated for impairment
 
$
933,048

 
$
468,776

 
$
24,129

 
$
1,425,953

Individually evaluated for impairment
 
11,222

 
12,452

 
612

 
24,286

Loans acquired with deteriorated credit quality
 
1,604

 
21

 

 
1,625

Total
 
$
945,874

 
$
481,249

 
$
24,741

 
$
1,451,864

Net Investment In Direct Financing Leases
The Corporation’s net investment in direct financing leases consists of the following:
 
 
As of December 31,
 
 
2017
 
2016
 
 
(In Thousands)
Minimum lease payments receivable
 
$
24,898

 
$
26,096

Estimated unguaranteed residual values in leased property
 
8,312

 
7,625

Initial direct costs
 
76

 
106

Unearned lease and residual income
 
(2,499
)
 
(2,876
)
Investment in commercial direct financing leases
 
$
30,787

 
$
30,951

Schedule of Future Minimum Lease Payments for Capital Leases
Future aggregate maturities of minimum lease payments to be received are as follows:
(In Thousands)
 
 
Maturities during year ended December 31,
 
 
2018
 
$
8,866

2019
 
6,635

2020
 
4,632

2021
 
2,301

2022
 
1,393

Thereafter
 
1,071

 
 
$
24,898