Loans and Leases | Loans and Leases Summary of Major Loan and Lease Categories At December 31, 2017 (Dollars in thousands) Originated Acquired Total Commercial, financial and agricultural $ 833,100 $ 63,111 $ 896,211 Real estate-commercial 1,235,681 306,460 1,542,141 Real estate-construction 171,244 4,592 175,836 Real estate-residential secured for business purpose 250,800 91,167 341,967 Real estate-residential secured for personal purpose 260,654 60,920 321,574 Real estate-home equity secured for personal purpose 171,884 12,386 184,270 Loans to individuals 28,156 144 28,300 Lease financings 129,768 — 129,768 Total loans and leases held for investment, net of deferred income $ 3,081,287 $ 538,780 $ 3,620,067 Unearned lease income, included in the above table $ (14,243 ) $ — $ (14,243 ) Net deferred costs, included in the above table 4,669 — 4,669 Overdraft deposits included in the above table 222 — 222 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 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, 2017 totaled $538.8 million , including $424.1 million of loans from the Fox Chase acquisition and $114.7 million from the Valley Green Bank acquisition. At December 31, 2017 , loans acquired with deteriorated credit quality, or acquired credit impaired loans, totaled $1.6 million representing $792 thousand from the Fox Chase acquisition and $791 thousand from the Valley Green Bank acquisition. Acquired credit impaired loans are accounted for in accordance with Accounting Standards Codification (ASC) Topic 310-30. The outstanding principal balance and carrying amount for acquired credit impaired loans at December 31, 2017 and 2016 were as follows: (Dollars in thousands) At December 31, 2017 At December 31, 2016 Outstanding principal balance $ 2,325 $ 8,993 Carrying amount 1,583 7,352 Allowance for loan losses — — The following table presents the changes in accretable yield on acquired credit impaired loans: For the Years Ended December 31, (Dollars in thousands) 2017 2016 Beginning of period $ 50 $ 144 Acquisition of credit impaired loans — 283 Reclassification from nonaccretable discount 891 1,329 Accretable yield amortized to interest income (926 ) (1,672 ) Disposals (4 ) (34 ) End of period $ 11 $ 50 The Corporation is a lessor of equipment under agreements expiring at various dates through the year 2029 . At December 31, 2017 and 2016 , the schedule of minimum lease payments receivable is as follows: At December 31, (Dollars in thousands) 2017 2016 Within 1 year $ 53,625 $ 56,872 After 1 year through 2 years 41,351 41,931 After 2 years through 3 years 27,411 28,340 After 3 years through 4 years 15,557 16,369 After 4 years through 5 years 5,375 6,753 Thereafter 692 444 Total future minimum lease payments receivable 144,011 150,709 Less: Unearned income (14,243 ) (15,970 ) Total lease financing receivables, net of unearned income $ 129,768 $ 134,739 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, 2017 and 2016 : (Dollars in thousands) 30-59 60-89 90 Days Total Current Acquired Credit Impaired Total Loans Recorded At December 31, 2017 Commercial, financial and agricultural $ 2,182 $ 1,440 $ 1,509 $ 5,131 $ 890,658 $ 422 $ 896,211 $ — Real estate—commercial real estate and construction: Commercial real estate 733 548 1,410 2,691 1,539,094 356 1,542,141 — Construction 1,970 — 365 2,335 173,501 — 175,836 — Real estate—residential and home equity: Residential secured for business purpose 1,651 315 1,355 3,321 338,061 585 341,967 162 Residential secured for personal purpose 4,368 1,118 23 5,509 315,845 220 321,574 — Home equity secured for personal purpose 1,414 333 464 2,211 182,059 — 184,270 148 Loans to individuals 221 139 195 555 27,745 — 28,300 195 Lease financings 1,143 392 1,855 3,390 126,378 — 129,768 256 Total $ 13,682 $ 4,285 $ 7,176 $ 25,143 $ 3,593,341 $ 1,583 $ 3,620,067 $ 761 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 Nonperforming Loans and Leases The following presents, by class of loans and leases, nonperforming loans and leases at December 31, 2017 and 2016 . Nonperforming loans exclude acquired credit impaired loans from Fox Chase and Valley Green. At December 31, 2017 2016 (Dollars in thousands) Nonaccrual Accruing Loans and Total Nonperforming Nonaccrual Accruing Loans and Total Nonperforming Commercial, financial and agricultural $ 4,448 $ 921 $ — $ 5,369 $ 5,746 $ 967 $ — $ 6,713 Real estate—commercial real estate and construction: Commercial real estate 4,285 10,266 — 14,551 5,651 1,519 — 7,170 Construction 365 — — 365 — — — — Real estate—residential and home equity: Residential secured for business purpose 2,843 206 162 3,211 4,898 766 — 5,664 Residential secured for personal purpose 466 42 — 508 560 — 481 1,041 Home equity secured for personal purpose 511 — 148 659 525 — 171 696 Loans to individuals — — 195 195 — — 142 142 Lease financings 1,599 — 256 1,855 536 — 193 729 Total $ 14,517 $ 11,435 $ 761 $ 26,713 $ 17,916 $ 3,252 $ 987 $ 22,155 * Includes nonaccrual troubled debt restructured loans and lease modifications of $2.5 million and $1.8 million at December 31, 2017 and December 31, 2016 , respectively. Accruing troubled debt restructuring loans of $11.4 million includes incremental balances $9.2 million related to one borrower which was classified as troubled debt restructurings as the related loans were granted amortization period extensions during the second quarter of 2017. 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, 2017 and 2016 . 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 a relationship balance of less than $1 million are reviewed on a performance basis, with the primary monitored metrics being delinquency (60 days or more past due) and revolving stagnancy. Loans with relationships greater than $1 million are reviewed at least annually. Loan relationships exceeding $15 million or classified as special mention or substandard are reviewed at least quarterly, or more frequently based on management’s discretion. 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, 2017 Grade: 1. Cash secured/ 2. Fully secured $ 2,521 $ — $ 20,420 $ — $ 22,941 3. Strong 9,206 1,821 — — 11,027 4. Satisfactory 30,283 26,950 — 274 57,507 5. Acceptable 593,205 960,258 76,899 215,750 1,846,112 6. Pre-watch 179,990 209,844 72,168 29,738 491,740 7. Special Mention 4,027 12,974 1,392 296 18,689 8. Substandard 13,868 23,834 365 4,742 42,809 9. Doubtful — — — — — 10. Loss — — — — — Total $ 833,100 $ 1,235,681 $ 171,244 $ 250,800 $ 2,490,825 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 The following table presents classifications for acquired loans: (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Total At December 31, 2017 Grade: 1. Cash secured/ 2. Fully secured $ 1,120 $ — $ — $ — $ 1,120 3. Strong — — — — — 4. Satisfactory 125 482 — — 607 5. Acceptable 49,949 183,490 — 73,402 306,841 6. Pre-watch 6,183 98,977 4,592 15,861 125,613 7. Special Mention 1,007 17,028 — — 18,035 8. Substandard 4,727 6,483 — 1,904 13,114 9. Doubtful — — — — — 10. Loss — — — — — Total $ 63,111 $ 306,460 $ 4,592 $ 91,167 $ 465,330 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 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, 2017 Performing $ 260,589 $ 171,527 $ 27,961 $ 127,913 $ 587,990 Nonperforming 65 357 195 1,855 2,472 Total $ 260,654 $ 171,884 $ 28,156 $ 129,768 $ 590,462 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 The following table presents classifications for acquired loans: (Dollars in thousands) Real Estate— Real Estate— Loans to Lease Total At December 31, 2017 Performing $ 60,477 $ 12,084 $ 144 $ — $ 72,705 Nonperforming 443 302 — — 745 Total $ 60,920 $ 12,386 $ 144 $ — $ 73,450 At December 31, 2016 Performing $ 79,559 $ 14,857 $ 263 $ — $ 94,679 Nonperforming 872 — — — 872 Total $ 80,431 $ 14,857 $ 263 $ — $ 95,551 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. The Corporation originates fixed-rate and adjustable-rate real estate-residential mortgage loans and home equity 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. 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, 2017 , 2016 and 2015 : (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Loans to Lease Unallocated Total For the Year Ended December 31, 2017 Reserve for loan and lease losses: Beginning balance $ 7,037 $ 7,505 $ 774 $ 993 $ 364 $ 788 $ 38 $ 17,499 Charge-offs (1,030 ) (232 ) (1,370 ) (196 ) (317 ) (3,992 ) N/A (7,137 ) Recoveries 801 5 54 99 136 206 N/A 1,301 (Recovery of provision) provision (66 ) 2,561 2,204 857 190 4,130 16 9,892 (Recovery of provision) provision for acquired credit impaired loans — — (1 ) 1 — — — — Ending balance $ 6,742 $ 9,839 $ 1,661 $ 1,754 $ 373 $ 1,132 $ 54 $ 21,555 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 N/A – Not applicable During 2017, the Corporation recorded charge-offs of $2.8 million related to $5.0 million of software leases under a vendor referral program. These leases are personally guaranteed by 29 high net worth individuals. During 2017, the lessees stopped making payments due to disputes with the vendor, and Univest Capital, Inc., a subsidiary of the Corporation, filed legal complaints to pursue collection of all amounts owed. A complaint was subsequently filed against Univest Capital Inc. and certain other defendants by one of the lessees in federal court in Texas seeking, among other things, class action certification and a declaration that the contracts and related guarantees are null and void. On September 25, 2017 , Univest Capital, Inc. entered into a Release and Settlement Agreement whereby Univest Capital, Inc. received $1.0 million based upon court approval of the Agreement and is eligible to receive up to an additional $1.3 million . Payment of the $1.3 million is subject to the individual guarantor's election of whether or not they will be subject to the Release and Settlement Agreement. It is expected this election process will be completed by March 31, 2018 and related funds are expected to be received by June 30, 2018. If a guarantor elects to be subject to the Release and Settlement Agreement, Univest Capital, Inc. shall receive a payment of $43 thousand per guarantor. If a guarantor elects not to be subject to the Release and Settlement Agreement, Univest Capital, Inc. has the right to pursue collection of the full amount owed, which ranges from $108 thousand to $228 thousand per guarantor, via the normal collection process. As of December 31, 2017, Univest Capital, Inc. has a receivable totaling $1.3 million related to this matter, which is recorded as a non-accruing lease receivable. 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, 2017 and 2016 : (Dollars in thousands) Commercial, Real Estate— Real Estate— Real Estate— Loans to Lease Unallocated Total At December 31, 2017 Reserve for loan and lease losses: Ending balance: individually evaluated for impairment $ 31 $ 99 $ 1 $ — $ — $ — N/A $ 131 Ending balance: collectively evaluated for impairment 6,711 9,740 1,660 1,754 373 1,132 54 21,424 Total ending balance $ 6,742 $ 9,839 $ 1,661 $ 1,754 $ 373 $ 1,132 $ 54 $ 21,555 Loans and leases held for investment: Ending balance: individually evaluated for impairment $ 7,079 $ 16,919 $ 3,465 $ 1,019 $ — $ 1,250 $ 29,732 Ending balance: collectively evaluated for impairment 826,021 1,388,048 247,335 431,519 28,156 128,518 3,049,597 Loans measured at fair value — 1,958 — — — — 1,958 Acquired non-credit impaired loans 62,689 310,696 90,582 73,086 144 — 537,197 Acquired credit impaired loans 422 356 585 220 — — 1,583 Total ending balance $ 896,211 $ 1,717,977 $ 341,967 $ 505,844 $ 28,300 $ 129,768 $ 3,620,067 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 N/A – Not applicable T he 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 acquired credit 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 (excludes Lease Financings) 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, 2017 and 2016 . The impaired loans exclude acquired credit impaired loans. At December 31, 2017 2016 (Dollars in thousands) Recorded Unpaid Related Recorded Unpaid Related Impaired loans with no related reserve recorded: Commercial, financial and agricultural $ 7,019 $ 8,301 $ 10,911 $ 12,561 Real estate—commercial real estate 15,621 16,507 24,469 25,342 Real estate—construction 365 365 — — Real estate—residential secured for business purpose 3,430 4,620 5,704 6,253 Real estate—residential secured for personal purpose 508 566 560 594 Real estate—home equity secured for personal purpose 511 523 525 528 Total impaired loans with no related reserve recorded $ 27,454 $ 30,882 $ 42,169 $ 45,278 Impaired loans with a reserve recorded: Commercial, financial and agricultural $ 60 $ 60 $ 31 $ 166 $ 166 $ 19 Real estate—commercial real estate 933 933 99 597 597 25 Real estate—residential secured for business purpose 35 37 1 983 1,105 191 Total impaired loans with a reserve recorded $ 1,028 $ 1,030 $ 131 $ 1,746 $ 1,868 $ 235 Total impaired loans: Commercial, financial and agricultural $ 7,079 $ 8,361 $ 31 $ 11,077 $ 12,727 $ 19 Real estate—commercial real estate 16,554 17,440 99 25,066 25,939 25 Real estate—construction 365 365 — — — — Real estate—residential secured for business purpose 3,465 4,657 1 6,687 7,358 191 Real estate—residential secured for personal purpose 508 566 — 560 594 — Real estate—home equity secured for personal purpose 511 523 — 525 528 — Total impaired loans $ 28,482 $ 31,912 $ 131 $ 43,915 $ 47,146 $ 235 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 $4.1 million and $23.3 million at December 31, 2017 and 2016 , respectively. Specific reserves on other accruing impaired loans were $99 thousand and $84 thousand at December 31, 2017 and 2016 , 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, 2017 2016 2015 (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 10,456 200 347 13,126 258 381 15,383 423 481 Real estate—commercial real estate 20,054 792 289 26,698 1,106 272 23,692 996 330 Real estate—construction 253 — 19 — — — 3,164 — 162 Real estate—residential secured for business purpose 3,801 65 169 4,084 67 207 3,805 144 161 Real estate—residential secured for personal purpose 614 3 39 498 2 24 729 2 43 Real estate—home equity secured for personal purpose 406 — 26 440 — 25 184 — 11 Total $ 35,584 $ 1,060 $ 889 $ 44,846 $ 1,433 $ 909 $ 48,789 $ 1,565 $ 1,298 * Includes interest income recognized on a cash basis for nonaccrual loans of $4 thousand , $8 thousand and $37 thousand for the years ended December 31, 2017 , 2016 and 2015 , respectively and interest income recognized on the accrual method for accruing impaired loans of $1.1 million , $1.4 million and $1.5 million for the years ended December 31, 2017 , 2016 and 2015 , 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 $3 thousand and $10 thousand at December 31, 2017 and 2016 , 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 $390 thousand and $385 thousand at December 31, 2017 and 2016 , respectively. Impaired Leases The Corporation had impaired leases of $1.3 million with $0 thousand related reserve at December 31, 2017 . The Corporation had no impaired leases at December 31, 2016 . See discussion in Reserve for Loan and Lease Losses and Recorded Investment in Loans and Leases. 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, 2017 and 2016 : For the Years Ended December 31, 2017 2016 (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 $ — Real estate—commercial real estate 3 9,206 9,206 — — — — — Real estate—residential secured for business purpose — — — — 1 415 415 — Total 3 $ 9,206 $ 9,206 $ — 2 $ 1,960 $ 1,960 $ — Nonaccrual Troubled Debt Restructured Loans: Commercial, financial and agricultural 2 $ 1,127 $ 1,127 $ — — $ — $ — $ — Real estate—commercial real estate 1 328 328 — — — — — 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 $ 1,455 $ 1,455 $ — 3 $ 499 $ 498 $ — The Corporation grants concessions to existing borrowers primarily related to extensions of interest-only payment periods and an occasional payment modification. These modifications typically are for 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, 2017 and 2016 : Interest Only Term Maturity Date Amortization Period Extension Total Concessions (Dollars in thousands) No. of Amount No. of Amount No. of Amount No. of Amount For the Year Ended December 31, 2017 Accruing Troubled Debt Restructured Loans: Real estate—commercial real estate — $ — — $ — 3 $ 9,206 3 $ 9,206 Total — $ — — $ — 3 $ 9,206 3 $ 9,206 Nonaccrual Troubled Debt Restructured Loans: Commercial, financial and agricultural — $ — — $ — 2 $ 1,127 2 $ 1,127 Real estate—commercial real estate — — 1 328 — — 1 328 Total — $ — 1 $ 328 2 $ 1,127 3 $ 1,455 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 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, 2017 2016 (Dollars in thousands) Number Recorded Number Recorded Accruing Troubled Debt Restructured Loans: Total — $ — — $ — Nonaccrual Troubled Debt Restructured Loans: Real estate—residential secured for personal purpose — $ — 1 $ 34 Total — $ — 1 $ 34 The following presents, by class of loans, information regarding consumer mortgages collateralized by residential real estate property that are in the process of foreclosure at December 31, 2017 and 2016 : (Dollars in thousands) At December 31, 2017 At December 31, 2016 Real estate-residential secured for personal purpose $ 31 $ — Real estate-home |