Loans | Loans Loan portfolio segments are defined as the level at which an entity develops and documents a systematic methodology to determine its allowance. The Corporation has two loan portfolio segments (commercial loans and consumer loans) that it uses in determining the allowance. Both quantitative and qualitative factors are used by management at the loan portfolio segment level in determining the adequacy of the allowance for the Corporation. Classes of loans are a disaggregation of an entity’s loan portfolio segments. Classes of loans are defined as a group of loans which share similar initial measurement attributes, risk characteristics, and methods for monitoring and assessing credit risk. The Corporation has seven classes of loans, which are set forth below. Commercial — Loans and lines of credit to varying types of businesses, including municipalities, school districts and nonprofit organizations, for the purpose of supporting working capital, operational needs and term financing of equipment. Repayment of such loans is generally provided through operating cash flows of the business. Commercial loans are predominately secured by equipment, inventory, accounts receivable, personal guarantees of the owner and other sources of repayment, although the Corporation may also secure commercial loans with real estate. Commercial real estate — Loans secured by real estate occupied by the borrower for ongoing operations, non-owner occupied real estate leased to one or more tenants and vacant land that has been acquired for investment or future land development. Real estate construction — Secured loans for the construction of business properties. Real estate construction loans often convert to a commercial real estate loan at the completion of the construction period. Land development — Secured development loans made to borrowers for the purpose of infrastructure improvements to vacant land to create finished marketable residential and commercial lots/land. Most land development loans are originated with the intention that the loans will be paid through the sale of developed lots/land by the developers within twelve months of the completion date. Land development loans at June 30, 2015 , December 31, 2014 and June 30, 2014 were primarily comprised of loans to develop residential properties. Residential mortgage — Loans secured by one - to four -family residential properties, generally with fixed interest rates for periods of fifteen years or less. The loan-to-value ratio at the time of origination is generally 80% or less. Residential mortgage loans with a loan-to-value ratio of more than 80% generally require private mortgage insurance. Consumer installment — Loans to consumers primarily for the purpose of acquiring automobiles, recreational vehicles and personal watercraft and comprised primarily of indirect loans purchased from dealers. These loans consist of relatively small amounts that are spread across many individual borrowers. Home equity — Loans and lines of credit whereby consumers utilize equity in their personal residence, generally through a second mortgage, as collateral to secure the loan. Commercial, commercial real estate, real estate construction and land development loans are referred to as the Corporation’s commercial loan portfolio, while residential mortgage, consumer installment and home equity loans are referred to as the Corporation’s consumer loan portfolio. A summary of loans follows: June 30, December 31, June 30, (In thousands) Commercial loan portfolio: Commercial $ 1,754,873 $ 1,354,881 $ 1,212,383 Commercial real estate 2,243,513 1,557,648 1,298,365 Real estate construction 101,717 152,745 101,168 Land development 10,595 18,750 10,956 Subtotal 4,110,698 3,084,024 2,622,872 Consumer loan portfolio: Residential mortgage 1,310,167 1,110,390 970,397 Consumer installment 887,907 829,570 744,781 Home equity 725,971 664,246 560,754 Subtotal 2,924,045 2,604,206 2,275,932 Total loans $ 7,034,743 $ 5,688,230 $ 4,898,804 Credit Quality Monitoring The Corporation maintains loan policies and credit underwriting standards as part of the process of managing credit risk. These standards include making loans generally only within the Corporation’s market areas. The Corporation’s lending markets generally consist of communities across the lower peninsula of Michigan, except for the southeastern portion of Michigan. The Corporation has no foreign loans. The Corporation, through its subsidiary banks, has a commercial loan portfolio approval process involving underwriting and individual and group loan approval authorities to consider credit quality and loss exposure at loan origination. The loans in the Corporation’s commercial loan portfolio are risk rated at origination based on the grading system set forth below. The approval authority of relationship managers is established based on experience levels, with credit decisions greater than $1.0 million requiring group loan authority approval, except for six executive and senior officers who have varying limits exceeding $1.5 million and up to $3.5 million . During the first quarter of 2015, the Corporation increased the upper range for each level of group loan authority by $5.0 million , resulting in group loan authorities as follows. Chemical Bank has a loan committee, consisting of certain executive and senior officers, that meets weekly to consider loans ranging in amounts from $1.0 million to $10.0 million , depending on risk rating and credit action required. A directors’ loan committee of Chemical Bank, consisting of eight independent members of the board of directors of Chemical Bank, the chief executive officer of Chemical Bank and senior credit officer of Chemical Bank, meets bi-weekly to consider loans in amounts over $10.0 million , and certain loans under $10.0 million depending on a loan’s risk rating and credit action required. Loans over $15.0 million require majority approval of the board of directors of Chemical Bank. The approval authorities of relationship managers at The Bank of Holland and The Bank of Northern Michigan are similar to those at Chemical Bank, while approval authority for the loan committees at The Bank of Holland and The Bank of Northern Michigan are lower than those at Chemical Bank. Further, certain loan relationships of The Bank of Holland and The Bank of Northern Michigan, depending on a loan’s risk rating and credit action needed, require approval by the directors' loan committee of Chemical Bank, in addition to approval by the respective board of directors of The Bank of Holland or The Bank of Northern Michigan. The majority of the Corporation’s consumer loan portfolio is comprised of secured loans that are relatively small. The Corporation’s consumer loan portfolio has a centralized approval process which utilizes standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Corporation’s collection department for resolution, resulting in repossession or foreclosure if payments are not brought current. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred. Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various loan committees within the Corporation at least quarterly. The Corporation maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Corporation also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Corporation for loans in the commercial loan portfolio. Credit Quality Indicators Commercial Loan Portfolio The Corporation uses a nine grade risk rating system to monitor the ongoing credit quality of its commercial loan portfolio. These loan grades rank the credit quality of a borrower by measuring liquidity, debt capacity, coverage and payment behavior as shown in the borrower’s financial statements. The loan grades also measure the quality of the borrower’s management and the repayment support offered by any guarantors. A summary of the Corporation’s loan grades (or characteristics of the loans within each grade) follows: Risk Grades 1-5 (Acceptable Credit Quality) — All loans in risk grades 1 through 5 are considered to be acceptable credit risks by the Corporation and are grouped for purposes of allowance for loan loss considerations and financial reporting. The five grades essentially represent a ranking of loans that are all viewed to be of acceptable credit quality, taking into consideration the various factors mentioned above, but with varying degrees of financial strength, debt coverage, management and factors that could impact credit quality. Business credits within risk grades 1 through 5 range from Risk Grade 1: Prime Quality (factors include: excellent business credit; excellent debt capacity and coverage; outstanding management; strong guarantors; superior liquidity and net worth; favorable loan-to-value ratios; debt secured by cash or equivalents, or backed by the full faith and credit of the U.S. Government) to Risk Grade 5: Acceptable Quality With Care (factors include: acceptable business credit, but with added risk due to specific industry or internal situations). Risk Grade 6 (Watch) — A business credit that is not acceptable within the Corporation’s loan origination criteria; cash flow may not be adequate or is continually inconsistent to service current debt; financial condition has deteriorated as company trends/management have become inconsistent; the company is slow in furnishing quality financial information; working capital needs of the company are reliant on short-term borrowings; personal guarantees are weak and/or with little or no liquidity; the net worth of the company has deteriorated after recent or continued losses; the loan requires constant monitoring and attention from the Corporation; payment delinquencies becoming more serious; if left uncorrected, these potential weaknesses may, at some future date, result in deterioration of repayment prospects. Risk Grade 7 (Substandard — Accrual) — A business credit that is inadequately protected by the current financial net worth and paying capacity of the obligor or of the collateral pledged, if any; management has deteriorated or has become non-existent; quality financial information is not available; a high level of maintenance is required by the Corporation; cash flow can no longer support debt requirements; loan payments are continually and/or severely delinquent; negative net worth; personal guaranty has become insignificant; a credit that has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. The Corporation still expects a full recovery of all contractual principal and interest payments; however, a possibility exists that the Corporation will sustain some loss if deficiencies are not corrected. Risk Grade 8 (Substandard — Nonaccrual ) — A business credit accounted for on a nonaccrual basis that has all the weaknesses inherent in a loan classified as risk grade 7 with the added characteristic that the weaknesses are so pronounced that, on the basis of current financial information, conditions, and values, collection in full is highly questionable; a partial loss is possible and interest is no longer being accrued. This loan meets the definition of an impaired loan. The risk of loss requires analysis to determine whether a valuation allowance needs to be established. Risk Grade 9 (Substandard — Doubtful) — A business credit that has all the weaknesses inherent in a loan classified as risk grade 8 and interest is no longer being accrued, but additional deficiencies make it highly probable that liquidation will not satisfy the majority of the obligation; the primary source of repayment is nonexistent and there is doubt as to the value of the secondary source of repayment; the possibility of loss is likely, but current pending factors could strengthen the credit. This loan meets the definition of an impaired loan. A loan charge-off is recorded when management deems an amount uncollectible; however, the Corporation will establish a valuation allowance for probable losses, if required. The Corporation considers all loans graded 1 through 5 as acceptable credit risks and structures and manages such relationships accordingly. Periodic financial and operating data combined with regular loan officer interactions are deemed adequate to monitor borrower performance. Loans graded 6 and 7 are considered higher-risk credits than loans graded 1 through 5 and the frequency of loan officer contact and receipt of financial data is increased to stay abreast of borrower performance. Loans graded 8 and 9 are considered problematic and require special care. Further, loans graded 6 through 9 are managed and monitored regularly through a number of processes, procedures and committees, including oversight by a loan administration committee comprised of executive and senior management of the Corporation, which include highly structured reporting of financial and operating data, intensive loan officer intervention and strategies to exit, as well as potential management by the Corporation’s special assets group. The following schedule presents the recorded investment of loans in the commercial loan portfolio by risk rating categories at June 30, 2015 , December 31, 2014 and June 30, 2014 : Commercial Commercial Real Estate Real Estate Construction Land Development Total (In thousands) June 30, 2015 Originated Portfolio: Risk Grades 1-5 $ 1,269,091 $ 1,273,725 $ 94,894 $ 2,470 $ 2,640,180 Risk Grade 6 32,189 34,677 — 433 67,299 Risk Grade 7 41,316 29,737 1,249 878 73,180 Risk Grade 8 17,260 25,283 247 255 43,045 Risk Grade 9 — 4 — — 4 Subtotal 1,359,856 1,363,426 96,390 4,036 2,823,708 Acquired Portfolio: Risk Grades 1-5 347,914 820,400 5,122 5,017 1,178,453 Risk Grade 6 29,412 22,796 — 71 52,279 Risk Grade 7 13,910 30,288 — 119 44,317 Risk Grade 8 3,781 6,603 205 1,352 11,941 Risk Grade 9 — — — — — Subtotal 395,017 880,087 5,327 6,559 1,286,990 Total $ 1,754,873 $ 2,243,513 $ 101,717 $ 10,595 $ 4,110,698 December 31, 2014 Originated Portfolio: Risk Grades 1-5 $ 1,171,817 $ 1,114,529 $ 134,668 $ 2,952 $ 2,423,966 Risk Grade 6 37,800 34,996 1,408 738 74,942 Risk Grade 7 29,863 29,935 2,502 613 62,913 Risk Grade 8 16,417 24,958 162 225 41,762 Risk Grade 9 1 8 — — 9 Subtotal 1,255,898 1,204,426 138,740 4,528 2,603,592 Acquired Portfolio: Risk Grades 1-5 76,780 321,018 14,005 11,789 423,592 Risk Grade 6 12,687 8,698 — 583 21,968 Risk Grade 7 4,089 12,478 — 197 16,764 Risk Grade 8 5,427 11,028 — 1,653 18,108 Risk Grade 9 — — — — — Subtotal 98,983 353,222 14,005 14,222 480,432 Total $ 1,354,881 $ 1,557,648 $ 152,745 $ 18,750 $ 3,084,024 June 30, 2014 Originated Portfolio: Risk Grades 1-5 $ 1,067,000 $ 1,063,555 $ 85,754 $ 2,514 $ 2,218,823 Risk Grade 6 15,459 30,053 666 965 47,143 Risk Grade 7 37,291 35,946 1,995 627 75,859 Risk Grade 8 18,560 25,347 160 2,184 46,251 Risk Grade 9 213 14 — — 227 Subtotal 1,138,523 1,154,915 88,575 6,290 2,388,303 Acquired Portfolio: Risk Grades 1-5 59,993 132,898 12,593 2,546 208,030 Risk Grade 6 6,769 3,822 — — 10,591 Risk Grade 7 3,197 6,730 — 143 10,070 Risk Grade 8 3,901 — — 1,977 5,878 Risk Grade 9 — — — — — Subtotal 73,860 143,450 12,593 4,666 234,569 Total $ 1,212,383 $ 1,298,365 $ 101,168 $ 10,956 $ 2,622,872 Consumer Loan Portfolio The Corporation evaluates the credit quality of loans in the consumer loan portfolio based on the performing or nonperforming status of the loan. Loans in the consumer loan portfolio that are performing in accordance with original contractual terms and are less than 90 days past due and accruing interest are considered to be in a performing status, while those that are in nonaccrual status, contractually past due 90 days or more as to interest or principal payments or classified as a nonperforming TDR are considered to be in a nonperforming status. Nonaccrual TDRs in the consumer loan portfolio are included with nonaccrual loans, while other TDRs in the consumer loan portfolio are considered in a nonperforming status until they meet the Corporation’s definition of a performing TDR, at which time they are considered in a performing status. The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at June 30, 2015 , December 31, 2014 and June 30, 2014 : Residential Mortgage Consumer Installment Home Equity Total Consumer (In thousands) June 30, 2015 Originated Loans: Performing $ 1,058,696 $ 871,543 $ 584,520 $ 2,514,759 Nonperforming 9,793 393 2,357 12,543 Subtotal 1,068,489 871,936 586,877 2,527,302 Acquired Loans: Performing 238,698 15,966 138,086 392,750 Nonperforming 2,980 5 1,008 3,993 Subtotal 241,678 15,971 139,094 396,743 Total $ 1,310,167 $ 887,907 $ 725,971 $ 2,924,045 December 31, 2014 Originated Loans: Performing $ 987,542 $ 818,878 $ 566,083 $ 2,372,503 Nonperforming 10,459 500 3,013 13,972 Subtotal 998,001 819,378 569,096 2,386,475 Acquired Loans: Performing 111,101 10,174 94,696 215,971 Nonperforming 1,288 18 454 1,760 Subtotal 112,389 10,192 95,150 217,731 Total $ 1,110,390 $ 829,570 $ 664,246 $ 2,604,206 June 30, 2014 Originated Loans: Performing $ 947,768 $ 743,121 $ 529,093 $ 2,219,982 Nonperforming 12,217 536 3,371 16,124 Subtotal 959,985 743,657 532,464 2,236,106 Acquired Loans: Performing 10,343 1,124 28,227 39,694 Nonperforming 69 — 63 132 Subtotal 10,412 1,124 28,290 39,826 Total $ 970,397 $ 744,781 $ 560,754 $ 2,275,932 Nonperforming Loans A summary of nonperforming loans follows: June 30, December 31, June 30, (In thousands) Nonaccrual loans: Commercial $ 17,260 $ 16,418 $ 18,773 Commercial real estate 25,287 24,966 25,361 Real estate construction 247 162 160 Land development 255 225 2,184 Residential mortgage 6,004 6,706 6,325 Consumer installment 393 500 536 Home equity 1,769 1,667 2,296 Total nonaccrual loans 51,215 50,644 55,635 Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial 711 170 15 Commercial real estate 56 — 69 Real estate construction — — — Land development — — — Residential mortgage 424 557 376 Consumer installment — — — Home equity 588 1,346 1,075 Total accruing loans contractually past due 90 days or more as to interest or principal payments 1,779 2,073 1,535 Nonperforming TDRs: Commercial loan portfolio 14,547 15,271 11,049 Consumer loan portfolio 3,365 3,196 5,516 Total nonperforming TDRs 17,912 18,467 16,565 Total nonperforming loans $ 70,906 $ 71,184 $ 73,735 The Corporation’s nonaccrual loans at June 30, 2015 , December 31, 2014 and June 30, 2014 included $35.7 million , $37.2 million and $43.7 million , respectively, of nonaccrual TDRs. The Corporation had $2.0 million of residential mortgage loans that were in the process of foreclosure at June 30, 2015 , compared to $2.3 million and $3.6 million at December 31, 2014 and June 30, 2014 , respectively. Impaired Loans The following schedule presents impaired loans by classes of loans at June 30, 2015 , December 31, 2014 and June 30, 2014 : Recorded Investment Unpaid Principal Balance Related Valuation Allowance (In thousands) June 30, 2015 Impaired loans with a valuation allowance: Commercial $ 4,044 $ 4,137 $ 718 Commercial real estate 2,789 2,948 603 Residential mortgage 20,970 20,970 260 Subtotal 27,803 28,055 1,581 Impaired loans with no related valuation allowance: Commercial 32,461 38,160 — Commercial real estate 56,052 78,490 — Real estate construction 451 531 — Land development 1,942 3,644 — Residential mortgage 8,984 8,984 — Consumer installment 398 398 — Home equity 2,778 2,778 — Subtotal 103,066 132,985 — Total impaired loans: Commercial 36,505 42,297 718 Commercial real estate 58,841 81,438 603 Real estate construction 451 531 — Land development 1,942 3,644 — Residential mortgage 29,954 29,954 260 Consumer installment 398 398 — Home equity 2,778 2,778 — Total $ 130,869 $ 161,040 $ 1,581 December 31, 2014 Impaired loans with a valuation allowance: Commercial $ 966 $ 1,040 $ 293 Commercial real estate 2,587 2,927 710 Residential mortgage 19,681 19,681 335 Subtotal 23,234 23,648 1,338 Impaired loans with no related valuation allowance: Commercial 38,094 44,557 — Commercial real estate 60,616 82,693 — Real estate construction 162 255 — Land development 1,928 3,484 — Residential mortgage 7,994 7,994 — Consumer installment 518 518 — Home equity 2,121 2,121 — Subtotal 111,433 141,622 — Total impaired loans: Commercial 39,060 45,597 293 Commercial real estate 63,203 85,620 710 Real estate construction 162 255 — Land development 1,928 3,484 — Residential mortgage 27,675 27,675 335 Consumer installment 518 518 — Home equity 2,121 2,121 — Total $ 134,667 $ 165,270 $ 1,338 Recorded Investment Unpaid Principal Balance Related Valuation Allowance (In thousands) June 30, 2014 Impaired loans with a valuation allowance: Commercial $ 2,905 $ 3,258 $ 563 Commercial real estate 4,369 5,605 777 Residential mortgage 20,353 20,353 379 Subtotal 27,627 29,216 1,719 Impaired loans with no related valuation allowance: Commercial 39,420 43,463 — Commercial real estate 46,205 58,997 — Real estate construction 160 366 — Land development 4,211 7,506 — Residential mortgage 6,325 6,325 — Consumer installment 536 536 — Home equity 2,296 2,296 — Subtotal 99,153 119,489 — Total impaired loans: Commercial 42,325 46,721 563 Commercial real estate 50,574 64,602 777 Real estate construction 160 366 — Land development 4,211 7,506 — Residential mortgage 26,678 26,678 379 Consumer installment 536 536 — Home equity 2,296 2,296 — Total $ 126,780 $ 148,705 $ 1,719 The difference between an impaired loan’s recorded investment and the unpaid principal balance for originated loans represents a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan balance and management’s assessment that full collection of the loan balance is not likely, and for acquired loans that meet the definition of an impaired loan represents fair value adjustments recognized at the acquisition date attributable to expected credit losses and the discounting of expected cash flows at market interest rates. The difference between the recorded investment and the unpaid principal balance of $30.2 million , $30.6 million and $21.9 million at June 30, 2015 , December 31, 2014 and June 30, 2014 , respectively, includes confirmed losses (partial charge-offs) of $15.2 million , $15.4 million and $18.2 million , respectively, and fair value discount adjustments of $15.0 million , $15.2 million and $3.7 million , respectively. Impaired loans included $15.9 million , $19.9 million and $10.4 million at June 30, 2015 , December 31, 2014 and June 30, 2014 , respectively, of acquired loans that were not performing in accordance with original contractual terms. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming loans because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. Impaired loans also included $45.8 million , $45.7 million and $44.1 million at June 30, 2015 , December 31, 2014 and June 30, 2014 , respectively, of performing TDRs. The following schedule presents information related to impaired loans for the three and six months ended June 30, 2015 and 2014 : Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status (In thousands) Commercial $ 36,735 $ 263 $ 37,655 $ 552 Commercial real estate 60,393 458 60,317 983 Real estate construction 390 2 515 2 Land development 1,900 34 1,888 61 Residential mortgage 29,432 380 28,392 711 Consumer installment 426 1 463 1 Home equity 2,529 14 2,440 22 Total $ 131,805 $ 1,152 $ 131,670 $ 2,332 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status (In thousands) Commercial $ 42,629 $ 347 $ 42,118 $ 680 Commercial real estate 51,260 366 52,290 727 Real estate construction 163 — 165 — Land development 4,312 34 4,478 71 Residential mortgage 26,737 328 26,758 631 Consumer installment 634 — 704 — Home equity 2,221 — 2,194 — Total $ 127,956 $ 1,075 $ 128,707 $ 2,109 The following schedule presents the aging status of the recorded investment in loans by classes of loans at June 30, 2015 , December 31, 2014 and June 30, 2014 : 31-60 Days Past Due 61-89 Days Past Due Accruing Loans Past Due 90 Days or More Non-accrual Loans Total Past Due Current Total Loans (In thousands) June 30, 2015 Originated Portfolio: Commercial $ 4,055 $ 2,317 $ 711 $ 17,260 $ 24,343 $ 1,335,513 $ 1,359,856 Commercial real estate 2,754 1,117 56 25,287 29,214 1,334,212 1,363,426 Real estate construction 413 — — 247 660 95,730 96,390 Land development — — — 255 255 3,781 4,036 Residential mortgage 1,536 — 424 6,004 7,964 1,060,525 1,068,489 Consumer installment 2,526 302 — 393 3,221 868,715 871,936 Home equity 2,334 204 588 1,769 4,895 581,982 586,877 Total $ 13,618 $ 3,940 $ 1,779 $ 51,215 $ 70,552 $ 5,280,458 $ 5,351,010 Acquired Portfolio: Commercial $ 690 $ — $ 3,781 $ — $ 4,471 $ 390,546 $ 395,017 Commercial real estate 969 291 6,603 — 7,863 872,224 880,087 Real estate construction — — 205 — 205 5,122 5,327 Land development — — 1,352 — 1,352 5,207 6,559 Residential mortgage 1,077 138 2,980 — 4,195 237,483 241,678 Consumer installment — 56 5 — 61 15,910 15,971 Home equity 1,153 210 1,008 — 2,371 136,723 139,094 Total $ 3,889 $ 695 $ 15,934 $ — $ 20,518 $ 1,663,215 $ 1,683,733 31-60 Days Past Due 61-89 Days Past Due Accruing Loans Past Due 90 Days or More Non-accrual Loans Total Past Due Current Total Loans (In thousands) December 31, 2014 Originated Portfolio: Commercial $ 4,033 $ 743 $ 170 $ 16,418 $ 21,364 $ 1,234,534 $ 1,255,898 Commercial real estate 7,515 1,383 — 24,966 33,864 1,170,562 1,204,426 Real estate construction 262 — — 162 424 138,316 138,740 Land development — — — 225 225 4,303 4,528 Residential mortgage 2,126 54 557 6,706 9,443 988,558 998,001 Consumer installment 3,620 512 — 500 4,632 814,746 819,378 Home equity 3,039 660 1,346 1,667 6,712 562,384 569,096 Total $ 20,595 $ 3,352 $ 2,073 $ 50,644 $ 76,664 $ 4,913,403 $ 4,990,067 Acquired Portfolio: Commercial $ 133 $ — $ 5,427 $ — $ 5,560 $ 93,423 $ 98,983 Commercial real estate 2,014 352 11,052 — 13,418 339,804 353,222 Real estate construction — — — — — 14,005 14,005 Land development — — 1,653 — 1,653 12,569 14,222 Residential mortgage 156 — 18 — 174 112,215 112,389 Consumer installment 55 3 454 — 512 9,680 10,192 Home equity 636 106 1,288 — 2,030 93,120 95,150 Total $ 2,994 $ 461 $ 19,892 $ — $ 23,347 $ 674,816 $ 698,163 June 30, 2014 Originated Portfolio: Commercial $ 4,149 $ 1,901 $ 15 $ 18,773 $ 24,838 $ 1,113,685 $ 1,138,523 Commercial real estate 5,933 233 69 25,361 31,596 1,123,319 1,154,915 Real estate construction — — — 160 160 88,415 88,575 Land development — — — 2,184 2,184 4,106 6,290 Residential mortgage 2,515 — 376 6,325 9,216 950,769 959,985 Consumer installment 2,513 313 — 536 3,362 740,295 743,657 Home equity 2,002 985 1,075 2,296 6,358 526,106 532,464 Total $ 17,112 $ 3,432 $ 1,535 $ 55,635 $ 77,714 $ 4,546,695 $ 4,624,409 Acquired Portfolio: Commercial $ — $ — $ 6,744 $ — $ 6,744 $ 67,116 $ 73,860 Commercial real estate — — 1,594 — 1,594 141,856 143,450 Real estate construction — — — — — 12,593 12,593 Land development — — 1,977 — 1,977 2,689 4,666 Residential mortgage — — 69 — 69 10,343 10,412 Consumer installment 20 — — — 20 1,104 1,124 Home equity 325 49 63 — 437 27,853 28,290 Total $ 345 $ 49 $ 10,447 $ — $ 10,841 $ 263,554 $ 274,395 Loans Modified Under Troubled Debt Restructurings (TDRs) The following schedule presents the Corporation’s loans reported as TDRs at June 30, 2015 , December 31, 2014 and June 30, 2014 : Performing TDRs Non-Performing TDRs Nonaccrual TDRs Total (In thousands) June 30, 2015 Commercial loan portfolio $ 28,203 $ 14,547 $ 32,001 $ 74,751 Consumer loan portfolio 17,605 3,365 3,707 24,677 Total $ 45,808 $ 17,912 $ 35,708 $ 99,428 December 31, 2014 Commercial loan portfolio $ 29,179 $ 15,271 $ 32,597 $ 77,047 Consumer loan portfolio 16,485 3,196 4,594 24,275 Total $ 45,664 $ 18,467 $ 37,191 $ 101,322 June 30, 2014 Commercial loan portfolio $ 29,296 $ 11,049 $ 40,351 $ 80,696 Consumer loan portfolio 14,837 5,516 3,334 23,687 Total $ 44,133 $ 16,565 $ 43,685 $ 104,383 The following schedule provides information on the Corporation's TDRs that were modified during the three and six months ended June 30, 2015 and 2014 : Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 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 loan portfolio: Commercial 13 $ 2,332 $ 2,332 18 $ 4,264 $ 4,264 Commercial real estate 4 527 527 9 3,061 3,061 Land development 1 305 305 1 305 305 Subtotal – commercial loan portfolio 18 3,164 3,164 28 7,630 7,630 Consumer loan portfolio 29 1,633 1,631 39 1,969 1,967 Total 47 $ 4,797 $ 4,795 67 $ 9,599 $ 9,597 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 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 loan portfolio: Commercial 15 $ 3,575 $ 3,575 27 $ 11,931 $ 11,931 Commercial real estate 12 3,134 3,134 21 5,924 5,924 Land development — — — 1 72 72 Subtotal – commercial loan portfolio 27 6,709 6,709 49 17,927 17,927 Consumer loan portfolio 63 1,649 1,648 93 2,636 2,626 Total 90 $ 8,358 $ 8,357 142 $ 20,563 $ 20,553 The pre-modification and post-modification recorded investment represents amounts as of the date of loan modification. The difference between the pre-modification and post-modification recorded investment of residential mortgage TDRs represents impairment recognized by the Corporation through the provision for loan losses computed based on a loan's post-modification present value of expected future cash flows discounted at the loan's original effective interest rate. The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2015 and 2014 , whereby the borrower was past due with respect to principal and/or interest for 90 days or more, and the loan became a TDR during the twelve-month period prior to the default: Three Months Ended June 30, 2015 Six Months Ended June 30, 2015 Number of Loans Principal Balance at End of Period Number of Loans Principal Balance at End of Period (Dollars in thousands) Commercial loan portfolio: Commercial — $ — — $ — Commercial real estate 1 183 4 942 Subtotal – commercial loan portfolio 1 183 4 942 Consumer loan portfolio — — 1 33 Total 1 $ 183 5 $ 975 Three Months Ended June 30, 2014 Six Months Ended June 30, 2014 Number of Loans Principal Balance at End of Period Number of Loans Principal Balance at End of Period (Dollars in thousands) Commercial loan portfolio: Commercial 5 $ 771 6 $ 875 Commercial real estate 3 603 5 2,273 Subtotal – commercial loan portfolio 8 1,374 11 3,148 Consumer loan portfolio 3 80 3 80 Total 11 $ 1,454 14 $ 3,228 Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and s |