Loans and Leases | Loans and Leases Summary of Major Loan and Lease Categories At December 31, 2016 (Dollars in thousands) Originated Acquired Total Commercial, financial and agricultural $ 663,221 $ 160,045 $ 823,266 Real estate-commercial 909,581 465,368 1,374,949 Real estate-construction 142,891 31,953 174,844 Real estate-residential secured for business purpose 151,931 142,137 294,068 Real estate-residential secured for personal purpose 210,377 80,431 290,808 Real estate-home equity secured for personal purpose 147,982 14,857 162,839 Loans to individuals 30,110 263 30,373 Lease financings 134,739 — 134,739 Total loans and leases held for investment, net of deferred income $ 2,390,832 $ 895,054 $ 3,285,886 Unearned lease income, included in the above table $ (15,970 ) $ — $ (15,970 ) Net deferred costs, included in the above table 4,503 — 4,503 Overdraft deposits included in the above table 84 — 84 At December 31, 2015 (Dollars in thousands) Originated Acquired Total Commercial, financial and agricultural $ 479,980 $ 24,535 $ 504,515 Real estate-commercial 759,342 126,550 885,892 Real estate-construction 91,904 4,637 96,541 Real estate-residential secured for business purpose 94,280 124,503 218,783 Real estate-residential secured for personal purpose 177,850 3,305 181,155 Real estate-home equity secured for personal purpose 125,361 11,594 136,955 Loans to individuals 29,406 326 29,732 Lease financings 125,440 — 125,440 Total loans and leases held for investment, net of deferred income $ 1,883,563 $ 295,450 $ 2,179,013 Unearned lease income, included in the above table $ (13,829 ) $ — $ (13,829 ) Net deferred costs, included in the above table 4,244 — 4,244 Overdraft deposits included in the above table 35 — 35 Overdraft deposits are re-classified as loans and are included in the total loans and leases on the balance sheet. The carrying amount of acquired loans at December 31, 2016 totaled $895.1 million , including $673.4 million of loans from the Fox Chase acquisition and $221.7 million from the Valley Green Bank acquisition. At December 31, 2016 , loans acquired with deteriorated credit quality, or acquired credit impaired loans, were $6.4 million from the Fox Chase acquisition and $990 thousand from the Valley Green Bank acquisition. Acquired credit impaired loans are accounted for in accordance with Accounting Standards Codification (ASC) Topic 310-30. See Note 3, "Acquisition" for additional information. The outstanding principal balance and carrying amount for acquired credit impaired loans at December 31, 2016 and 2015 were as follows: (Dollars in thousands) At December 31, 2016 At December 31, 2015 Outstanding principal balance $ 8,993 $ 3,551 Carrying amount 7,352 1,253 Allowance for loan losses — 8 The following table presents the changes in accretable yield on acquired credit impaired loans: For the Years Ended December 31, (Dollars in thousands) 2016 2015 Beginning of period $ 144 $ — Acquisition of credit impaired loans 283 305 Reclassification from nonaccretable discount 1,329 574 Accretable yield amortized to interest income (1,672 ) (717 ) Disposals (34 ) (18 ) End of period $ 50 $ 144 The Corporation is a lessor of equipment under agreements expiring at various dates through the year 2024 . At December 31, 2016 and 2015 , the schedule of minimum lease payments receivable is as follows: At December 31, (Dollars in thousands) 2016 2015 Within 1 year $ 56,872 $ 54,093 After 1 year through 2 years 41,931 40,250 After 2 years through 3 years 28,340 25,940 After 3 years through 4 years 16,369 13,914 After 4 years through 5 years 6,753 4,853 Thereafter 444 219 Total future minimum lease payments receivable 150,709 139,269 Less: Unearned income (15,970 ) (13,829 ) Total lease financing receivables, net of unearned income $ 134,739 $ 125,440 Age Analysis of Past Due Loans and Leases The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and the recorded investment in loans and leases 90 days or more past due which are accruing interest at December 31, 2016 and 2015 : (Dollars in thousands) 30-59 60-89 90 Days Total Current Acquired Credit Impaired Total Loans Recorded At December 31, 2016 Commercial, financial and agricultural $ 1,536 $ 256 $ 1,335 $ 3,127 $ 819,550 $ 589 $ 823,266 $ — Real estate—commercial real estate and construction: Commercial real estate 1,482 1,560 2,591 5,633 1,363,606 5,710 1,374,949 — Construction 202 — — 202 174,642 — 174,844 — Real estate—residential and home equity: Residential secured for business purpose 1,390 428 1,539 3,357 289,927 784 294,068 — Residential secured for personal purpose 3,243 905 879 5,027 285,512 269 290,808 481 Home equity secured for personal purpose 717 142 521 1,380 161,459 — 162,839 171 Loans to individuals 324 95 142 561 29,812 — 30,373 142 Lease financings 1,731 1,418 729 3,878 130,861 — 134,739 193 Total $ 10,625 $ 4,804 $ 7,736 $ 23,165 $ 3,255,369 $ 7,352 $ 3,285,886 $ 987 At December 31, 2015 Commercial, financial and agricultural $ 864 $ 298 $ 4,279 $ 5,441 $ 498,757 $ 317 $ 504,515 $ — Real estate—commercial real estate and construction: Commercial real estate 12,103 — 1,102 13,205 872,174 513 885,892 — Construction — — — — 96,541 — 96,541 — Real estate—residential and home equity: Residential secured for business purpose 1,406 2,356 727 4,489 213,871 423 218,783 — Residential secured for personal purpose 990 69 309 1,368 179,787 — 181,155 — Home equity secured for personal purpose 777 52 174 1,003 135,952 — 136,955 — Loans to individuals 198 97 173 468 29,264 — 29,732 173 Lease financings 1,294 652 646 2,592 122,848 — 125,440 206 Total $ 17,632 $ 3,524 $ 7,410 $ 28,566 $ 2,149,194 $ 1,253 $ 2,179,013 $ 379 Non-Performing Loans and Leases The following presents, by class of loans and leases, non-performing loans and leases at December 31, 2016 and 2015 : At December 31, 2016 2015 (Dollars in thousands) Nonaccrual Accruing Loans and Total Non- Nonaccrual Accruing Loans and Total Non- Commercial, financial and agricultural $ 5,746 $ 967 $ — $ 6,713 $ 6,915 $ 1,602 $ — $ 8,517 Real estate—commercial real estate and construction: Commercial real estate 5,651 1,519 — 7,170 4,314 2,449 — 6,763 Real estate—residential and home equity: Residential secured for business purpose 4,898 766 — 5,664 1,863 763 — 2,626 Residential secured for personal purpose 560 — 481 1,041 376 421 — 797 Home equity secured for personal purpose 525 — 171 696 275 — — 275 Loans to individuals — — 142 142 — — 173 173 Lease financings 536 — 193 729 440 10 206 656 Total $ 17,916 $ 3,252 $ 987 $ 22,155 $ 14,183 $ 5,245 $ 379 $ 19,807 * Includes nonaccrual troubled debt restructured loans and lease modifications of $1.8 million and $93 thousand at December 31, 2016 and December 31, 2015 , respectively. Credit Quality Indicators The following tables present by class, the recorded investment in loans and leases held for investment by credit quality indicator at December 31, 2016 and 2015 . The Corporation employs a ten (10) grade risk rating system related to the credit quality of commercial loans and residential real estate loans secured for a business purpose of which the first six categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating. Loans with risk ratings of one through five are reviewed based on the relationship dollar amount with the borrower: loans with a relationship total of $2.5 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.5 million but greater than $500 thousand are reviewed annually based on the borrower’s fiscal year; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with a risk rating of six are also reviewed based on the relationship dollar amount with the borrower: loans with a relationship balance of $2.0 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.0 million but greater than $500 thousand are reviewed annually; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with a risk rating of seven are reviewed at least quarterly, and as often as monthly, at management’s discretion. Loans with risk ratings of eight through ten are reviewed monthly. 1. Cash Secured—No credit risk 2. Fully Secured—Negligible credit risk 3. Strong—Minimal credit risk 4. Satisfactory—Nominal credit risk 5. Acceptable—Moderate credit risk 6. Pre-Watch—Marginal, but stable credit risk 7. Special Mention—Potential weakness 8. Substandard—Well-defined weakness 9. Doubtful—Collection in-full improbable 10. Loss—Considered uncollectible Commercial Credit Exposure Credit Risk by Internally Assigned Grades The following table presents classifications for originated loans: (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Total At December 31, 2016 Grade: 1. Cash secured/ 2. Fully secured $ 272 $ — $ 13,714 $ 162 $ 14,148 3. Strong 14,980 2,045 — — 17,025 4. Satisfactory 35,529 38,861 — 367 74,757 5. Acceptable 465,675 676,212 110,650 133,716 1,386,253 6. Pre-watch 113,499 128,646 18,213 12,025 272,383 7. Special Mention 8,820 22,439 314 1,199 32,772 8. Substandard 24,446 41,378 — 4,462 70,286 9. Doubtful — — — — — 10. Loss — — — — — Total $ 663,221 $ 909,581 $ 142,891 $ 151,931 $ 1,867,624 At December 31, 2015 Grade: 1. Cash secured/ 2. Fully secured $ 968 $ — $ 5,417 $ — $ 6,385 3. Strong 17,328 10,877 — — 28,205 4. Satisfactory 36,697 36,023 450 9 73,179 5. Acceptable 328,140 530,766 72,630 78,659 1,010,195 6. Pre-watch 61,098 119,117 13,262 7,161 200,638 7. Special Mention 6,074 20,286 — 2,347 28,707 8. Substandard 29,675 42,273 145 6,104 78,197 9. Doubtful — — — — — 10. Loss — — — — — Total $ 479,980 $ 759,342 $ 91,904 $ 94,280 $ 1,425,506 The following table presents classifications for acquired loans: (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Total At December 31, 2016 Grade: 1. Cash secured/ 2. Fully secured $ 583 $ — $ — $ — $ 583 3. Strong — — — — — 4. Satisfactory 4,399 1,018 — — 5,417 5. Acceptable 113,512 282,199 20,565 117,322 533,598 6. Pre-watch 31,697 163,623 11,388 14,405 221,113 7. Special Mention 73 7,705 — 6,245 14,023 8. Substandard 9,781 10,823 — 4,165 24,769 9. Doubtful — — — — — 10. Loss — — — — — Total $ 160,045 $ 465,368 $ 31,953 $ 142,137 $ 799,503 At December 31, 2015 Grade: 1. Cash secured/ 2. Fully secured $ 1,411 $ — $ — $ — $ 1,411 3. Strong — — — — — 4. Satisfactory 1,181 3,561 — 608 5,350 5. Acceptable 18,446 102,122 4,637 113,002 238,207 6. Pre-watch 2,273 10,365 — 8,153 20,791 7. Special Mention 417 8,853 — 367 9,637 8. Substandard 807 1,649 — 2,373 4,829 9. Doubtful — — — — — 10. Loss — — — — — Total $ 24,535 $ 126,550 $ 4,637 $ 124,503 $ 280,225 Credit Exposure—Real Estate—Residential Secured for Personal Purpose, Real Estate—Home Equity Secured for Personal Purpose, Loans to Individuals, Lease Financing Credit Risk Profile by Payment Activity The Corporation monitors the credit risk profile by payment activity for the following classifications of loans and leases: residential real estate loans secured for a personal purpose, home equity loans secured for a personal purpose, loans to individuals and lease financings. Nonperforming loans and leases are loans past due 90 days or more, loans and leases on nonaccrual of interest and troubled debt restructured loans and lease modifications. Performing loans and leases are reviewed only if the loan becomes 60 days or more past due. Nonperforming loans and leases are reviewed monthly. Performing loans and leases have a nominal to moderate risk of loss. The following table presents classifications for originated loans: (Dollars in thousands) Real Estate— Real Estate— Loans to Lease Total At December 31, 2016 Performing $ 210,208 $ 147,286 $ 29,968 $ 134,010 $ 521,472 Nonperforming 169 696 142 729 1,736 Total $ 210,377 $ 147,982 $ 30,110 $ 134,739 $ 523,208 At December 31, 2015 Performing $ 177,053 $ 125,086 $ 29,233 $ 124,784 $ 456,156 Nonperforming 797 275 173 656 1,901 Total $ 177,850 $ 125,361 $ 29,406 $ 125,440 $ 458,057 The following table presents classifications for acquired loans: (Dollars in thousands) Real Estate— Real Estate— Loans to Lease Total At December 31, 2016 Performing $ 79,559 $ 14,857 $ 263 $ — $ 94,679 Nonperforming 872 — — — 872 Total $ 80,431 $ 14,857 $ 263 $ — $ 95,551 At December 31, 2015 Performing $ 3,305 $ 11,594 $ 326 $ — $ 15,225 Nonperforming — — — — — Total $ 3,305 $ 11,594 $ 326 $ — $ 15,225 Risks associated with lending activities include, among other things, the impact of changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans, and impact the value of the associated collateral. Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans with a business purpose are generally perceived as having more risk of default than residential real estate loans with a personal purpose and consumer loans. These types of loans involve larger loan balances to a single borrower or groups of related borrowers. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful development of their properties and factors affecting residential real estate borrowers. Commercial, financial and agricultural business loans are typically based on the borrowers’ ability to repay the loans from the cash flow of their businesses. These loans may involve greater risk because the availability of funds to repay each loan depends substantially on the success of the business itself. In addition, the collateral securing the loans often depreciates over time, is difficult to appraise and liquidate and fluctuates in value based on the success of the business. Risk of loss on a construction loan depends largely upon whether our initial estimate of the property’s value at completion of construction equals or exceeds the cost of the property construction (including interest). During the construction phase, a number of factors can result in delays and cost overruns. If estimates of value are inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan or by seizure of collateral. Included in real estate-construction is track development financing. Risk factors related to track development financing include the demand for residential housing and the real estate valuation market. When projects move slower than anticipated, the properties may have significantly lower values than when the original underwriting was completed, resulting in lower collateral values to support the loan. Extended time frames also cause the interest carrying cost for a project to be higher than the builder projected, negatively impacting the builder’s profit and cash flow and, therefore, their ability to make principal and interest payments. Commercial real estate loans and residential real estate loans with a business purpose secured by owner-occupied properties are dependent upon the successful operation of the borrower’s business. If the operating company suffers difficulties in terms of sales volume and/or profitability, the borrower’s ability to repay the loan may be impaired. Loans secured by properties where repayment is dependent upon payment of rent by third party tenants or the sale of the property may be impacted by loss of tenants, lower lease rates needed to attract new tenants or the inability to sell a completed project in a timely fashion and at a profit. Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans secured for a business purpose are more susceptible to a risk of loss during a downturn in the business cycle. While the Corporation has strict underwriting, review, and monitoring procedures in place, these procedures cannot eliminate all of the risks related to these loans. The Corporation focuses on both assessing the borrower’s capacity and willingness to repay and on obtaining sufficient collateral. Commercial, financial and agricultural loans are generally secured by the borrower’s assets and by personal guarantees. Commercial real estate and residential real estate loans secured for a business purpose are originated primarily within the Southeastern Pennsylvania market area at conservative loan-to-value ratios and often with a guarantee of the borrowers. Management closely monitors the composition and quality of the total commercial loan portfolio to ensure that any credit concentrations by borrower or industry are closely monitored. The Corporation originates fixed-rate and adjustable-rate real estate-residential mortgage loans that are secured by the underlying 1-to-4 family residential properties for personal purposes. Credit risk exposure in this area of lending is minimized by the evaluation of the credit worthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80% . Residential mortgage loans granted in excess of the 80% loan-to-value ratio criterion are generally insured by private mortgage insurance. In the real estate-home equity loan portfolio secured for a personal purpose, credit exposure is minimized by the evaluation of the creditworthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to the Corporation’s underwriting policies. Combined loan-to-value ratios are generally limited to 80% , but increased to 85% for the Corporation’s strongest profile borrower. Other credit considerations and compensating factors may support higher combined loan-to-value ratios. Credit risk for direct consumer loans is controlled by strict adherence to underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values. These loans are included within the portfolio of loans to individuals. The primary risks that are involved with lease financing receivables are credit underwriting and borrower industry concentrations. The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate this risk. Risk also lies in the residual value of the underlying equipment. Residual values are subject to judgments as to the value of the underlying equipment that can be affected by changes in economic and market conditions and the financial viability of the residual guarantors and insurers. To the extent not guaranteed or assumed by a third party, or otherwise insured against, the Corporation bears the risk of ownership of the leased assets. This includes the risk that the actual value of the leased assets at the end of the lease term will be less than the residual value. The Corporation greatly reduces this risk primarily by using $1.00 buyout leases, in which the entire cost of the leased equipment is included in the contractual payments, leaving no residual payment at the end of the lease term. Reserve for Loan and Lease Losses and Recorded Investment in Loans and Leases The following presents, by portfolio segment, a summary of the activity in the reserve for loan and lease losses for the years ended December 31, 2016 , 2015 and 2014 : (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Loans to Lease Unallocated Total For the Year Ended December 31, 2016 Reserve for loan and lease losses: Beginning balance $ 6,418 $ 6,572 $ 763 $ 1,575 $ 346 $ 1,042 $ 912 $ 17,628 Charge-offs (4,827 ) (307 ) (522 ) (178 ) (395 ) (759 ) N/A (6,988 ) Recoveries 1,454 101 71 88 133 191 N/A 2,038 Provision (recovery of provision) 3,992 961 462 (489 ) 280 314 (874 ) 4,646 Provision (recovery of provision) for acquired credit impaired loans — 178 — (3 ) — — — 175 Ending balance $ 7,037 $ 7,505 $ 774 $ 993 $ 364 $ 788 $ 38 $ 17,499 For the Year Ended December 31, 2015 Reserve for loan and lease losses: Beginning balance $ 6,920 $ 8,943 $ 763 $ 1,124 $ 360 $ 985 $ 1,567 $ 20,662 Charge-offs* (4,793 ) (1,895 ) (179 ) (279 ) (549 ) (801 ) N/A (8,496 ) Recoveries 1,032 200 28 10 176 214 N/A 1,660 Provision (recovery of provision) 3,259 (684 ) 43 657 359 644 (655 ) 3,623 Provision for acquired credit impaired loans — 8 108 63 — — — 179 Ending balance $ 6,418 $ 6,572 $ 763 $ 1,575 $ 346 $ 1,042 $ 912 $ 17,628 For the Year Ended December 31, 2014 Reserve for loan and lease losses: Beginning balance $ 9,789 $ 8,780 $ 1,062 $ 1,284 $ 694 $ 1,285 $ 1,600 $ 24,494 Charge-offs (2,834 ) (4,363 ) (140 ) (141 ) (796 ) (576 ) N/A (8,850 ) Recoveries 247 524 60 34 265 281 N/A 1,411 (Recovery of provision) provision (282 ) 4,002 (219 ) (53 ) 197 (5 ) (33 ) 3,607 Provision for acquired credit impaired loans — — — — — — — — Ending balance $ 6,920 $ 8,943 $ 763 $ 1,124 $ 360 $ 985 $ 1,567 $ 20,662 * Includes charge-offs of $1.3 million on two real estate construction loans for one borrower which were subsequently transferred to loans held for sale in the second quarter of 2015 and sold in the fourth quarter of 2015. N/A – Not applicable The following presents, by portfolio segment, the balance in the reserve for loan and lease losses disaggregated on the basis of impairment method and the recorded investment in loans and leases disaggregated on the basis of impairment method at December 31, 2016 and 2015 : (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Loans to Lease Unallocated Total At December 31, 2016 Reserve for loan and lease losses: Ending balance: individually evaluated for impairment $ 19 $ 25 $ 191 $ — $ — $ — N/A $ 235 Ending balance: collectively evaluated for impairment 7,018 7,480 583 993 364 788 38 17,264 Total ending balance $ 7,037 $ 7,505 $ 774 $ 993 $ 364 $ 788 $ 38 $ 17,499 Loans and leases held for investment: Ending balance: individually evaluated for impairment $ 11,077 $ 25,066 $ 6,687 $ 1,085 $ — $ — $ 43,915 Ending balance: collectively evaluated for impairment 652,144 1,027,406 145,244 357,274 30,110 134,739 2,346,917 Loans measured at fair value — 2,138 — — — — 2,138 Acquired non-credit impaired loans 159,456 489,473 141,353 95,019 263 — 885,564 Acquired credit impaired loans 589 5,710 784 269 — — 7,352 Total ending balance $ 823,266 $ 1,549,793 $ 294,068 $ 453,647 $ 30,373 $ 134,739 $ 3,285,886 At December 31, 2015 Reserve for loan and lease losses: Ending balance: individually evaluated for impairment $ 208 $ — $ 45 $ 69 $ — $ — N/A $ 322 Ending balance: collectively evaluated for impairment 6,210 6,564 718 1,506 346 1,042 912 17,298 Ending balance: acquired credit impaired loans evaluated for impairment — 8 — — — — — 8 Total ending balance $ 6,418 $ 6,572 $ 763 $ 1,575 $ 346 $ 1,042 $ 912 $ 17,628 Loans and leases held for investment: Ending balance: individually evaluated for impairment $ 12,881 $ 30,088 $ 4,892 $ 1,072 $ — $ — $ 48,933 Ending balance: collectively evaluated for impairment 467,099 821,158 89,388 302,139 29,406 125,440 1,834,630 Acquired non-credit impaired loans 24,218 130,674 124,080 14,899 326 — 294,197 Acquired credit impaired loans 317 513 423 — — — 1,253 Total ending balance $ 504,515 $ 982,433 $ 218,783 $ 318,110 $ 29,732 $ 125,440 $ 2,179,013 N/A – Not applicable Subsequent to the acquisition, the Corporation records a provision for loan loss for the acquired non-impaired loans only when additional deterioration of the portfolio is identified over the projections utilized in the initial fair value analysis. After the acquisition measurement period, the present value of any decreases in expected cash flows of purchased impaired loans will generally result in an impairment charge recorded as a provision for loan loss, resulting in an increase to the allowance. Impaired Loans The following presents, by class of loans, the recorded investment and unpaid principal balance of impaired loans, the amounts of the impaired loans for which there is not a reserve for credit losses and the amounts for which there is a reserve for credit losses at December 31, 2016 and 2015 . The impaired loans exclude loans acquired with deteriorated credit quality. At December 31, 2016 2015 (Dollars in thousands) Recorded Unpaid Related Recorded Unpaid Related Impaired loans with no related reserve recorded: Commercial, financial and agricultural $ 10,911 $ 12,561 $ 10,337 $ 13,318 Real estate—commercial real estate 24,469 25,342 30,088 30,996 Real estate—residential secured for business purpose 5,704 6,253 4,597 4,717 Real estate—residential secured for personal purpose 560 594 545 554 Real estate—home equity secured for personal purpose 525 528 170 170 Total impaired loans with no related reserve recorded $ 42,169 $ 45,278 $ 45,737 $ 49,755 Impaired loans with a reserve recorded: Commercial, financial and agricultural $ 166 $ 166 $ 19 $ 2,544 $ 2,544 $ 208 Real estate—commercial real estate 597 597 25 — — — Real estate—residential secured for business purpose 983 1,105 191 295 295 45 Real estate—residential secured for personal purpose — — — 252 252 16 Real estate—home equity secured for personal purpose — — — 105 105 53 Total impaired loans with a reserve recorded $ 1,746 $ 1,868 $ 235 $ 3,196 $ 3,196 $ 322 Total impaired loans: Commercial, financial and agricultural $ 11,077 $ 12,727 $ 19 $ 12,881 $ 15,862 $ 208 Real estate—commercial real estate 25,066 25,939 25 30,088 30,996 — Real estate—residential secured for business purpose 6,687 7,358 191 4,892 5,012 45 Real estate—residential secured for personal purpose 560 594 — 797 806 16 Real estate—home equity secured for personal purpose 525 528 — 275 275 53 Total impaired loans $ 43,915 $ 47,146 $ 235 $ 48,933 $ 52,951 $ 322 Impaired loans includes nonaccrual loans, accruing troubled debt restructured loans and other accruing impaired loans for which it is probable that not all principal and interest payments due will be collectible in accordance with the contractual terms. These loans are individually measured to determine the amount of potential impairment. The loans are reviewed for impairment based on the fair value of the collateral for collateral dependent loans and for certain loans based on discounted cash flows using the loans’ initial effective interest rates. Impaired loans included other accruing impaired loans of $23.3 million and $30.0 million at December 31, 2016 and 2015 , respectively. Specific reserves on other accruing impaired loans were $84 thousand and $186 thousand at December 31, 2016 and 2015 , respectively. The following presents by class of loans, the average recorded investment in impaired loans and an analysis of interest on impaired loans. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Therefore, interest income on accruing impaired loans is recognized using the accrual method. For the Years Ended December 31, 2016 2015 2014 (Dollars in thousands) Average Interest Additional Average Interest Additional Average Interest Additional Loans held for sale $ — $ — $ — $ 1,832 $ — $ 110 $ — $ — $ — Loans held for investment: Commercial, financial and agricultural 13,126 258 381 15,383 423 481 15,334 540 258 Real estate—commercial real estate 26,698 1,106 272 23,692 996 330 26,662 1,143 323 Real estate—construction — — — 3,164 — 162 10,412 103 463 Real estate—residential secured for business purpose 4,084 67 207 3,805 144 161 2,524 77 61 Real estate—residential secured for personal purpose 498 2 24 729 2 43 719 — 49 Real estate—home equity secured for personal purpose 440 — 25 184 — 11 106 — 10 Total $ 44,846 $ 1,433 $ 909 $ 48,789 $ 1,565 $ 1,298 $ 55,761 $ 1,863 $ 1,164 * Includes interest income recognized on a cash basis for nonaccrual loans of $8 thousand , $37 thousand and $23 thousand for the years ended December 31, 2016 , 2015 and 2014 , respectively and interest income recognized on the accrual method for accruing impaired loans of $1.4 million , $1.5 million and $1.8 million for the years ended December 31, 2016 , 2015 and 2014 , respectively. Any income accrued on 1-to-4 family residential properties after the loan becomes 90 days past due, which is not placed on non-accrual, is held in a reserve for uncollected interest. The reserve for uncollected interest was $10 thousand and $0 thousand at December 31, 2016 and 2015 , respectively. The Bank maintains a reserve in other liabilities for off-balance sheet credit exposures that currently are unfunded. The reserve for these off-balance sheet credits was $385 thousand and $381 thousand at December 31, 2016 and 2015 , respectively. Troubled Debt Restructured Loans The following presents, by class of loans, information regarding accruing and nonaccrual loans that were restructured during the years ended December 31, 2016 and 2015 : For the Years Ended December 31, 2016 2015 (Dollars in thousands) Number Pre- Post- Related Number Pre- Post- Related Accruing Troubled Debt Restructured Loans: Commercial, financial and agricultural 1 $ 1,545 $ 1,545 $ — 4 $ 1,140 $ 1,140 $ — Real estate—commercial real estate — — — — 1 405 405 — Real estate—residential secured for business purpose 1 415 415 — 1 353 353 — Total 2 $ 1,960 $ 1,960 $ — 6 $ 1,898 $ 1,898 $ — Nonaccrual Troubled Debt Restructured Loans: Commercial, financial and agricultural — $ — $ — $ — 1 $ 122 $ 122 $ 22 Real estate—residential secured for business purpose 1 313 312 — — — — — Real estate—residential secured for personal purpose 1 34 34 — — — — — Real estate—home equity secured for personal purpose 1 152 152 — — — — — Total 3 $ 499 $ 498 $ — 1 $ 122 $ 122 $ 22 The Corporation grants concessions primarily related to extensions of interest-only payment periods and an occasional payment modification. These modifications typically are for a short-term basis up to one year . The goal when restructuring a credit is to establish a reasonable period of time to provide cash flow relief to customers experiencing cash flow difficulties. Accruing troubled debt restructured loans are primarily comprised of loans on which interest is being accrued under the restructured terms, and the loans are current or less than ninety days past due . The following presents, by class of loans, information regarding the types of concessions granted on accruing and nonaccrual loans that were restructured during the years ended December 31, 2016 and 2015 : Interest Only Term Temporary Payment Maturity Date Amortization Period Extension Total Concessions (Dollars in thousands) No. of Amount No. of Amount No. of Amount No. of Amount No. of Amount For the Year Ended December 31, 2016 Accruing Troubled Debt Restructured Loans: Commercial, financial and agricultural — $ — — $ — — $ — 1 $ 1,545 1 $ 1,545 Real estate—residential secured for business purpose 1 415 — — — — — — 1 415 Total 1 $ 415 — $ — — $ — 1 $ 1,545 2 $ 1,960 Nonaccrual Troubled Debt Restructured Loans: Real estate—residential secured for business purpose — $ — — $ — 1 $ 312 — $ — 1 $ 312 Real estate—residential secured for personal purpose — — — — 1 34 — — 1 34 Real estate—home equity secured for personal purpose — — — — 1 152 — — 1 152 Total — $ — — $ — 3 $ 498 — $ — 3 $ 498 For the Year Ended December 31, 2015 Accruing Troubled Debt Restructured Loans: Commercial, financial and agricultural — $ — 1 $ 143 1 $ 500 2 $ 497 4 $ 1,140 Real estate—commercial real estate — — — — — — 1 405 1 405 Real estate—residential secured for business purpose — — 1 353 — — — — 1 353 Total — $ — 2 $ 496 1 $ 500 3 $ 902 6 $ 1,898 Nonaccrual Troubled Debt Restructured Loans: Commercial, financial and agricultural — $ — 1 $ 122 — $ — — $ — 1 $ 122 Total — $ — 1 $ 122 — $ — — $ — 1 $ 122 The following presents, by class of loans, information regarding accruing and nonaccrual troubled debt restructured loans, for which there were payment defaults within twelve months of the restructuring date: For the Years Ended December 31, 2016 2015 (Dollars in thousands) Number Recorded Number Recorded Accruing Troubled Debt Restructured Loans: Total — $ — — $ — Nonaccrual Troubled Debt Restructured Loans: Commercial, financial and agricultural — $ — 1 $ 143 Real estate—residential secured for personal purpose 1 34 — — Total 1 $ |