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 December 31, 2015 and 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, through a first or second lien 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 the Corporation's loans follows: December 31, 2015 2014 (In thousands) Commercial loan portfolio: Commercial $ 1,905,879 $ 1,354,881 Commercial real estate 2,112,162 1,557,648 Real estate construction 210,231 152,745 Land development 21,845 18,750 Subtotal 4,250,117 3,084,024 Consumer loan portfolio: Residential mortgage 1,429,636 1,110,390 Consumer installment 877,457 829,570 Home equity 713,937 664,246 Subtotal 3,021,030 2,604,206 Total loans $ 7,271,147 $ 5,688,230 Chemical Bank has extended loans to its directors, executive officers and their affiliates. These loans were made in the ordinary course of business upon normal terms, including collateralization and interest rates prevailing at the time, and did not involve more than the normal risk of repayment by the borrower. The aggregate loans outstanding to the directors, executive officers and their affiliates totaled $21.7 million at December 31, 2015 and $31.2 million at December 31, 2014 . During 2015 and 2014 , there were $33.3 million and $39.3 million , respectively, of new loans and other additions, while repayments and other reductions totaled $42.8 million and $34.9 million , respectively. Loans held-for-sale, comprised of fixed-rate residential mortgage loans, were $10.3 million at December 31, 2015 and $9.1 million at December 31, 2014 . The Corporation sold residential mortgage loans totaling $223 million in 2015 and $149 million in 2014 . 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 Chemical Bank, 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 loan limits exceeding $1.5 million and up to $3.5 million . With respect to the group loan authorities, 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 the 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 the approval of the board of directors of Chemical Bank. 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, and 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 December 31, 2015 and 2014 : Commercial Commercial Real Estate Real Estate Construction Land Development Total (In thousands) December 31, 2015 Originated Portfolio: Risk Grades 1-5 $ 1,418,301 $ 1,341,202 $ 173,828 $ 9,495 $ 2,942,826 Risk Grade 6 34,727 31,036 180 — 65,943 Risk Grade 7 39,933 26,658 291 832 67,714 Risk Grade 8 26,459 25,163 247 274 52,143 Risk Grade 9 2,095 — — — 2,095 Subtotal 1,521,515 1,424,059 174,546 10,601 3,130,721 Acquired Portfolio: Risk Grades 1-5 340,782 629,430 35,685 5,998 1,011,895 Risk Grade 6 28,321 23,926 — 2,556 54,803 Risk Grade 7 11,607 29,975 — 1,537 43,119 Risk Grade 8 3,654 4,772 — 1,153 9,579 Risk Grade 9 — — — — — Subtotal 384,364 688,103 35,685 11,244 1,119,396 Total $ 1,905,879 $ 2,112,162 $ 210,231 $ 21,845 $ 4,250,117 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 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 to be in a nonperforming status until they meet the Corporation's definition of a performing TDR, at which time they are considered to be 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 December 31, 2015 and 2014 : Residential Mortgage Consumer Installment Home Equity Total (In thousands) December 31, 2015 Originated Portfolio: Performing $ 1,207,945 $ 868,975 $ 587,566 $ 2,664,486 Nonperforming 9,030 451 3,246 12,727 Subtotal 1,216,975 869,426 590,812 2,677,213 Acquired Portfolio: Performing 210,580 7,984 122,118 340,682 Nonperforming 2,081 47 1,007 3,135 Subtotal 212,661 8,031 123,125 343,817 Total $ 1,429,636 $ 877,457 $ 713,937 $ 3,021,030 December 31, 2014 Originated Portfolio: 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 Portfolio: 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 Nonperforming Loans A summary of nonperforming loans follows: December 31, 2015 2014 (In thousands) Nonaccrual loans: Commercial $ 28,554 $ 16,418 Commercial real estate 25,163 24,966 Real estate construction 247 162 Land development 274 225 Residential mortgage 5,557 6,706 Consumer installment 451 500 Home equity 1,979 1,667 Total nonaccrual loans 62,225 50,644 Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial 364 170 Commercial real estate 254 — Residential mortgage 402 557 Home equity 1,267 1,346 Total accruing loans contractually past due 90 days or more as to interest or principal payments 2,287 2,073 Nonperforming TDRs: Commercial loan portfolio 16,297 15,271 Consumer loan portfolio 3,071 3,196 Total nonperforming TDRs 19,368 18,467 Total nonperforming loans $ 83,880 $ 71,184 The Corporation's nonaccrual loans at December 31, 2015 and 2014 included $35.9 million and $37.2 million , respectively, of nonaccrual TDRs. There was no interest income recognized on nonaccrual loans during 2015 , 2014 and 2013 while the loans were in nonaccrual status. During 2015 , 2014 and 2013 , the Corporation recognized $0.9 million , $0.5 million and $0.9 million , respectively, of interest income on these loans while they were in an accruing status. Additional interest income that would have been recorded on nonaccrual loans had they been current in accordance with their original terms was $3.2 million in 2015 , $3.3 million in 2014 and $3.5 million in 2013 . During 2015 , 2014 and 2013 , the Corporation recognized interest income of $3.9 million , $3.6 million and $3.2 million , respectively, on performing and nonperforming TDRs. The Corporation had $2.9 million of residential mortgage loans that were in the process of foreclosure at December 31, 2015, compared to $2.3 million at December 31, 2014. Impaired Loans The following schedule presents impaired loans by classes of loans at December 31, 2015 : Recorded Investment Unpaid Principal Balance Related Valuation Allowance Average Annual Recorded Investment Interest Income Recognized While on Impaired Status (In thousands) Impaired loans with a valuation allowance: Commercial $ 18,898 $ 19,426 $ 5,700 $ 9,511 $ — Commercial real estate 4,448 4,688 497 2,918 — Residential mortgage 21,037 21,037 192 20,661 1,312 Subtotal 44,383 45,151 6,389 33,090 1,312 Impaired loans with no related valuation allowance: Commercial 31,039 37,703 — 32,172 1,303 Commercial real estate 53,518 69,130 — 56,562 1,985 Real estate construction 400 480 — 457 11 Land development 1,736 2,628 — 1,768 104 Residential mortgage 7,638 8,644 — 8,465 165 Consumer installment 498 512 — 480 2 Home equity 2,986 3,270 — 2,736 58 Subtotal 97,815 122,367 — 102,640 3,628 Total impaired loans: Commercial 49,937 57,129 5,700 41,683 1,303 Commercial real estate 57,966 73,818 497 59,480 1,985 Real estate construction 400 480 — 457 11 Land development 1,736 2,628 — 1,768 104 Residential mortgage 28,675 29,681 192 29,126 1,477 Consumer installment 498 512 — 480 2 Home equity 2,986 3,270 — 2,736 58 Total $ 142,198 $ 167,518 $ 6,389 $ 135,730 $ 4,940 The following schedule presents impaired loans by classes of loans at December 31, 2014 : Recorded Investment Unpaid Principal Balance Related Valuation Allowance Average Annual Recorded Investment Interest Income Recognized While on Impaired Status (In thousands) Impaired loans with a valuation allowance: Commercial $ 966 $ 1,040 $ 293 $ 2,117 $ — Commercial real estate 2,587 2,927 710 3,699 — Residential mortgage 19,681 19,681 335 19,740 1,252 Subtotal 23,234 23,648 1,338 25,556 1,252 Impaired loans with no related valuation allowance: Commercial 38,094 44,557 — 39,020 1,375 Commercial real estate 60,616 82,693 — 49,676 1,567 Real estate construction 162 255 — 164 — Land development 1,928 3,484 — 3,551 131 Residential mortgage 7,994 7,994 — 7,005 15 Consumer installment 518 518 — 602 1 Home equity 2,121 2,121 — 2,302 12 Subtotal 111,433 141,622 — 102,320 3,101 Total impaired loans: Commercial 39,060 45,597 293 41,137 1,375 Commercial real estate 63,203 85,620 710 53,375 1,567 Real estate construction 162 255 — 164 — Land development 1,928 3,484 — 3,551 131 Residential mortgage 27,675 27,675 335 26,745 1,267 Consumer installment 518 518 — 602 1 Home equity 2,121 2,121 — 2,302 12 Total $ 134,667 $ 165,270 $ 1,338 $ 127,876 $ 4,353 The average annual recorded investment of impaired loans during 2013 was $121.0 million and was comprised of the following classes of loans: commercial - $29.6 million ; commercial real estate - $50.8 million ; real estate construction - $0.4 million ; land development - $9.8 million ; residential mortgage - $26.8 million ; consumer installment - $0.7 million ; and home equity - $2.9 million . Interest income recognized during 2013 while these loans were in impaired status was $3.8 million , including $1.0 million on commercial loans, $1.3 million on commercial real estate loans, $0.3 million on land development loans and $1.1 million on residential mortgage loans. 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 $25.3 million and $30.6 million at December 31, 2015 and December 31, 2014 , respectively, includes confirmed losses (partial charge-offs) of $17.1 million and $15.4 million , respectively, and fair value discount adjustments of $8.2 million and $15.2 million , respectively. Impaired loans included $12.8 million and $19.9 million at December 31, 2015 and December 31, 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 $47.8 million and $45.7 million at December 31, 2015 and December 31, 2014 , respectively, of performing TDRs. The following schedule presents the aging status of the recorded investment in loans by classes of loans at December 31, 2015 and 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) December 31, 2015 Originated Portfolio: Commercial $ 3,685 $ 1,230 $ 364 $ 28,554 $ 33,833 $ 1,487,682 $ 1,521,515 Commercial real estate 4,168 1,603 254 25,163 31,188 1,392,871 1,424,059 Real estate construction — — — 247 247 174,299 174,546 Land development — — — 274 274 10,327 10,601 Residential mortgage 1,737 — 402 5,557 7,696 1,209,279 1,216,975 Consumer installment 3,145 644 — 451 4,240 865,186 869,426 Home equity 1,767 788 1,267 1,979 5,801 585,011 590,812 Total $ 14,502 $ 4,265 $ 2,287 $ 62,225 $ 83,279 $ 5,724,655 $ 5,807,934 Acquired Portfolio: Commercial $ 490 $ 532 $ 3,735 $ — $ 4,757 $ 379,607 $ 384,364 Commercial real estate 3,557 691 4,771 — 9,019 679,084 688,103 Real estate construction — — — — — 35,685 35,685 Land development — — 1,154 — 1,154 10,090 11,244 Residential mortgage 1,370 — 2,081 — 3,451 209,210 212,661 Consumer installment 55 — 47 — 102 7,929 8,031 Home equity 847 78 1,007 — 1,932 121,193 123,125 Total $ 6,319 $ 1,301 $ 12,795 $ — $ 20,415 $ 1,442,798 $ 1,463,213 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 Loans Modified Under Troubled Debt Restructurings (TDRs) The following schedule presents the Corporation's TDRs at December 31, 2015 and 2014 : Performing TDRs Non-Performing TDRs Nonaccrual TDRs Total (In thousands) December 31, 2015 Commercial loan portfolio $ 29,844 $ 16,297 $ 32,682 $ 78,823 Consumer loan portfolio 17,966 3,071 3,251 24,288 Total $ 47,810 $ 19,368 $ 35,933 $ 103,111 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 The following schedule provides information on the Corporation's TDRs that were modified during the years ended December 31, 2015 , 2014 and 2013 : Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment (Dollars in thousands) Year ended December 31, 2015 Commercial loan portfolio: Commercial 53 $ 11,446 $ 11,446 Commercial real estate 21 7,196 7,196 Real estate construction 2 400 400 Land development 1 305 305 Subtotal — commercial loan portfolio 77 19,347 19,347 Consumer loan portfolio (residential mortgage) 65 3,249 3,247 Total 142 $ 22,596 $ 22,594 Year ended December 31, 2014 Commercial loan portfolio: Commercial 53 $ 13,781 $ 13,781 Commercial real estate 46 12,075 12,075 Real estate construction — — — Land development 1 72 72 Subtotal — commercial loan portfolio 100 25,928 25,928 Consumer loan portfolio (residential mortgage) 119 4,184 4,158 Total 219 $ 30,112 $ 30,086 Year ended December 31, 2013 Commercial loan portfolio: Commercial 57 $ 12,123 $ 12,123 Commercial real estate 49 16,222 16,222 Real estate construction 4 575 575 Land development 4 1,958 1,958 Subtotal — commercial loan portfolio 114 30,878 30,878 Consumer loan portfolio (residential mortgage) 85 4,943 4,840 Total 199 $ 35,821 $ 35,718 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 years ended December 31, 2015 , 2014 and 2013 , 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: Years Ended December 31, 2015 2014 2013 Number of Loans Principal Balance at Year End Number of Loans Principal Balance at Year End Number of Loans Principal Balance at Year End (Dollars in thousands) Commercial loan portfolio: Commercial 1 $ 1,206 7 $ 885 23 $ 2,745 Commercial real estate 5 1,016 6 2,352 8 4,278 Real estate construction — — — — 3 371 Land development — — — — 2 1,526 Subtotal — commercial loan portfolio 6 2,222 13 3,237 36 8,920 Consumer loan portfolio (residential mortgage) 3 65 12 259 22 1,826 Total 9 $ 2,287 25 $ 3,496 58 $ 10,746 Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the year ended December 31, 2015 and details regarding the balance in the allowance and the recorded investment in loans at December 31, 2015 by impairment evaluation method. Commercial Loan Portfolio Consumer Loan Portfolio Unallocated Total (In thousands) Changes in allowance for loan losses for the year ended December 31, 2015: Beginning balance $ 44,156 $ 28,803 $ 2,724 $ 75,683 Provision for loan losses 7,275 1,949 (2,724 ) 6,500 Charge-offs (6,385 ) (7,116 ) — (13,501 ) Recoveries 2,188 2,458 — 4,646 Ending balance $ 47,234 $ 26,094 $ — $ 73,328 Allowance for loan losses balance at December 31, 2015 attributable to: Loans individually evaluated for impairment $ 6,197 $ 192 $ — $ 6,389 Loans collectively evaluated for impairment 41,037 25,902 — 66,939 Loans acquired with deteriorated credit quality — — — — Total $ 47,234 $ 26,094 $ — $ 73,328 Recorded investment (loan balance) at December 31, 2015: Loans individually evaluated for impairment $ 100,379 $ 21,037 $ — $ 121,416 Loans collectively evaluated for impairment 3,030,342 2,656,176 — 5,686,518 Loans acquired with deteriorated credit quality 1,119,396 343,817 — 1,463,213 Total $ 4,250,117 $ 3,021,030 $ — $ 7,271,147 The following presents, by loan portfolio segment, the changes in the allowance for the year ended December 31, 2014 and details regarding the balance in the allowance and the recorded investment in loans at December 31, 2014 by impairment evaluation method. Commercial Loan Portfolio Consumer Loan Portfolio Unallocated Total (In thousands) Changes in allowance for loan losses for the year ended December 31, 2014: Beginning balance $ 44,482 $ 30,145 $ 4,445 $ 79,072 Provision for loan losses 3,464 4,357 (1,721 ) 6,100 Charge-offs (6,399 ) (7,830 ) — (14,229 ) Recoveries 2,609 2,131 — 4,740 Ending balance $ 44,156 $ 28,803 $ 2,724 $ 75,683 Allowance for loan losses balance at December 31, 2014 attributable to: Loans individually evaluated for impairment $ 1,003 $ 335 $ — $ 1,338 Loans collectively evaluated for impairment 43,153 27,968 2,724 73,845 Loans acquired with deteriorated credit quality — 500 — 500 Total $ 44,156 $ 28,803 $ 2,724 $ 75,683 Recorded investment (loan balance) at December 31, 2014: Loans individually evaluated for impairment $ 86,221 $ 19,681 $ — $ 105,902 Loans collectively evaluated for impairment 2,517,371 2,366,794 — 4,884,165 Loans acquired with deteriorated credit quality 480,432 217,731 — 698,163 Total $ 3,084,024 $ 2,604,206 $ — $ 5,688,230 The allowance attributable to acquired loans of $0.5 million at December 31, 2014 was primarily attributable to two consumer loan pools in the acquired loan portfolio that had a decline in expected cash flows. There were no material changes in expected cash flows for the acquired loan pools at December 31, 2015 . |