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 six 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 and land development — Real estate construction loans represent 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 loans represent 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 are 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, and 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: (Dollars in thousands) September 30, December 31, Commercial loan portfolio: Commercial $ 3,159,936 $ 1,905,879 Commercial real estate 3,773,017 2,112,162 Real estate construction and land development 500,494 232,076 Subtotal 7,433,447 4,250,117 Consumer loan portfolio: Residential mortgage 3,046,959 1,429,636 Consumer installment 1,335,707 877,457 Home equity 899,676 713,937 Subtotal 5,282,342 3,021,030 Total loans $ 12,715,789 $ 7,271,147 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 throughout Michigan and additional communities located within northeast Ohio and northern Indiana. The Corporation has no foreign loans. The Corporation, through Chemical Bank and Talmer Bank and Trust, 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 September 30, 2016 and December 31, 2015 : (Dollars in thousands) Commercial Commercial Real Estate Real Estate Construction and Land Development Total September 30, 2016 Originated Portfolio: Risk Grades 1-5 $ 1,624,836 $ 1,528,013 $ 291,841 $ 3,444,690 Risk Grade 6 49,934 40,710 288 90,932 Risk Grade 7 35,719 15,132 515 51,366 Risk Grade 8 12,612 19,913 80 32,605 Risk Grade 9 1,130 1 — 1,131 Subtotal 1,724,231 1,603,769 292,724 3,620,724 Acquired Portfolio: Risk Grades 1-5 1,331,689 1,988,676 203,159 3,523,524 Risk Grade 6 49,679 94,829 742 145,250 Risk Grade 7 37,813 52,317 886 91,016 Risk Grade 8 16,524 33,426 2,983 52,933 Subtotal 1,435,705 2,169,248 207,770 3,812,723 Total $ 3,159,936 $ 3,773,017 $ 500,494 $ 7,433,447 December 31, 2015 Originated Portfolio: Risk Grades 1-5 $ 1,418,301 $ 1,341,202 $ 183,323 $ 2,942,826 Risk Grade 6 34,727 31,036 180 65,943 Risk Grade 7 39,933 26,658 1,123 67,714 Risk Grade 8 26,459 25,163 521 52,143 Risk Grade 9 2,095 — — 2,095 Subtotal 1,521,515 1,424,059 185,147 3,130,721 Acquired Portfolio: Risk Grades 1-5 340,782 629,430 41,683 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 Subtotal 384,364 688,103 46,929 1,119,396 Total $ 1,905,879 $ 2,112,162 $ 232,076 $ 4,250,117 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. Acquired loans that are not performing in accordance with contractual terms are not reported 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. 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 September 30, 2016 and December 31, 2015 : (Dollars in thousands) Residential Mortgage Consumer Installment Home Equity Total Consumer September 30, 2016 Originated Loans: Performing $ 1,363,819 $ 1,171,759 $ 589,374 $ 3,124,952 Nonperforming 7,185 378 2,692 10,255 Subtotal 1,371,004 1,172,137 592,066 3,135,207 Acquired Loans 1,675,955 163,570 307,610 2,147,135 Total $ 3,046,959 $ 1,335,707 $ 899,676 $ 5,282,342 December 31, 2015 Originated Loans: 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 Loans 212,661 8,031 123,125 343,817 Total $ 1,429,636 $ 877,457 $ 713,937 $ 3,021,030 Nonperforming Loans A summary of nonperforming loans follows: (Dollars in thousands) September 30, December 31, Nonaccrual loans: Commercial $ 13,742 $ 28,554 Commercial real estate 19,914 25,163 Real estate construction and land development 80 521 Residential mortgage 5,119 5,557 Consumer installment 378 451 Home equity 2,064 1,979 Total nonaccrual loans 41,297 62,225 Accruing loans contractually past due 90 days or more as to interest or principal payments: Commercial 221 364 Commercial real estate 739 254 Real estate construction and land development 1,439 — Residential mortgage 375 402 Home equity 628 1,267 Total accruing loans contractually past due 90 days or more as to interest or principal payments 3,402 2,287 Nonperforming TDRs: Commercial loan portfolio 15,261 16,297 Consumer loan portfolio 1,691 3,071 Total nonperforming TDRs 16,952 19,368 Total nonperforming loans (1) $ 61,651 $ 83,880 (1) 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. The Corporation’s nonaccrual loans at September 30, 2016 and December 31, 2015 included $29.5 million and $35.9 million , respectively, of nonaccrual TDRs. The Corporation had $8.1 million of residential mortgage loans that were in the process of foreclosure at September 30, 2016 , compared to $2.9 million at December 31, 2015 . Impaired Loans The following schedule presents impaired loans by classes of loans at September 30, 2016 and December 31, 2015 : (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Valuation Allowance September 30, 2016 Impaired loans with a valuation allowance: Commercial $ 4,906 $ 4,911 $ 2,729 Commercial real estate 2,741 2,741 516 Residential mortgage 19,864 19,864 154 Subtotal 27,511 27,516 3,399 Impaired loans with no related valuation allowance: Commercial 53,542 78,494 — Commercial real estate 69,713 118,751 — Real estate construction and land development 3,362 8,894 — Residential mortgage 34,310 54,414 — Consumer installment 1,004 1,538 — Home equity 7,573 10,245 — Subtotal 169,504 272,336 — Total impaired loans: Commercial 58,448 83,405 2,729 Commercial real estate 72,454 121,492 516 Real estate construction and land development 3,362 8,894 — Residential mortgage 54,174 74,278 154 Consumer installment 1,004 1,538 — Home equity 7,573 10,245 — Total $ 197,015 $ 299,852 $ 3,399 December 31, 2015 Impaired loans with a valuation allowance: Commercial $ 18,898 $ 19,426 $ 5,700 Commercial real estate 4,448 4,688 497 Residential mortgage 21,037 21,037 192 Subtotal 44,383 45,151 6,389 Impaired loans with no related valuation allowance: Commercial 31,039 37,703 — Commercial real estate 53,518 69,130 — Real estate construction and land development 2,136 3,108 — Residential mortgage 7,638 8,644 — Consumer installment 498 512 — Home equity 2,986 3,270 — Subtotal 97,815 122,367 — Total impaired loans: Commercial 49,937 57,129 5,700 Commercial real estate 57,966 73,818 497 Real estate construction and land development 2,136 3,108 — Residential mortgage 28,675 29,681 192 Consumer installment 498 512 — Home equity 2,986 3,270 — Total $ 142,198 $ 167,518 $ 6,389 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 $102.8 million and $25.3 million at September 30, 2016 and December 31, 2015 , respectively, includes confirmed losses (partial charge-offs) of $17.4 million and $17.1 million , respectively, and fair value discount adjustments of $85.4 million and $8.2 million , respectively. Impaired loans included $89.9 million and $12.8 million at September 30, 2016 and December 31, 2015 , 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 $48.8 million and $47.8 million at September 30, 2016 and December 31, 2015 , respectively, of performing TDRs. The following schedule presents information related to impaired loans for the three and nine months ended September 30, 2016 and 2015 , respectively: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (Dollars in thousands) Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status Commercial $ 43,812 $ 1,073 $ 42,478 $ 1,750 Commercial real estate 58,658 1,219 56,779 2,068 Real estate construction and land development 2,400 64 2,243 115 Residential mortgage 35,986 818 30,499 1,540 Consumer installment 601 17 439 19 Home equity 4,466 95 3,504 123 Total $ 145,923 $ 3,286 $ 135,942 $ 5,615 Three Months Ended September 30, 2015 Nine months ended September 30, 2015 (Dollars in thousands) Average Recorded Investment Interest Income Recognized While on Impaired Status Average Recorded Investment Interest Income Recognized While on Impaired Status Commercial $ 42,847 $ 310 $ 39,387 $ 862 Commercial real estate 59,150 470 59,927 1,453 Real estate construction and land development 2,210 26 2,338 89 Residential mortgage 30,467 387 29,084 1,098 Consumer installment 497 — 474 1 Home equity 3,026 20 2,635 42 Total $ 138,197 $ 1,213 $ 133,845 $ 3,545 The following schedule presents the aging status of the recorded investment in loans by classes of loans at September 30, 2016 and December 31, 2015 : (Dollars in thousands) 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 September 30, 2016 Originated Portfolio: Commercial $ 6,313 $ 2,675 $ 221 $ 13,742 $ 22,951 $ 1,701,280 $ 1,724,231 Commercial real estate 11,913 726 739 19,914 33,292 1,570,477 1,603,769 Real estate construction and land development 3,003 — 1,439 80 4,522 288,202 292,724 Residential mortgage 2,627 — 375 5,119 8,121 1,362,883 1,371,004 Consumer installment 2,425 448 — 378 3,251 1,168,886 1,172,137 Home equity 3,097 940 628 2,064 6,729 585,337 592,066 Total $ 29,378 $ 4,789 $ 3,402 $ 41,297 $ 78,866 $ 6,677,065 $ 6,755,931 Acquired Portfolio: Commercial $ 3,116 $ 1,146 $ 11,984 $ — $ 16,246 $ 1,419,459 $ 1,435,705 Commercial real estate 4,315 2,844 25,444 — 32,603 2,136,645 2,169,248 Real estate construction and land development 208 153 2,902 — 3,263 204,507 207,770 Residential mortgage 1,452 2,895 10,719 — 15,066 1,660,889 1,675,955 Consumer installment 1,367 200 203 — 1,770 161,800 163,570 Home equity 1,082 1,143 1,461 — 3,686 303,924 307,610 Total $ 11,540 $ 8,381 $ 52,713 $ — $ 72,634 $ 5,887,224 $ 5,959,858 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 and land development — — — 521 521 184,626 185,147 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 and land development — — 1,154 — 1,154 45,775 46,929 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 Loans Modified Under Troubled Debt Restructurings (TDRs) The following schedule presents the Corporation’s TDRs at September 30, 2016 and December 31, 2015 : (Dollars in thousands) Performing TDRs Non-Performing TDRs Nonaccrual TDRs Total September 30, 2016 Commercial loan portfolio $ 30,662 $ 15,261 $ 26,340 $ 72,263 Consumer loan portfolio 18,173 1,691 3,165 23,029 Total $ 48,835 $ 16,952 $ 29,505 $ 95,292 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 The following schedule provides information on the Corporation's TDRs that were modified during the three and nine months ended September 30, 2016 and 2015 : Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (Dollars in thousands) Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Commercial loan portfolio: Commercial 4 $ 4,160 $ 4,160 32 $ 12,141 $ 12,141 Commercial real estate — — — 6 2,441 2,441 Subtotal – commercial loan portfolio 4 4,160 4,160 38 14,582 14,582 Consumer loan portfolio 2 89 89 23 783 783 Total 6 $ 4,249 $ 4,249 61 $ 15,365 $ 15,365 Three Months Ended September 30, 2015 Nine months ended September 30, 2015 (Dollars in thousands) Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Number of Loans Pre- Modification Recorded Investment Post- Modification Recorded Investment Commercial loan portfolio: Commercial 3 $ 882 $ 882 21 $ 5,146 $ 5,146 Commercial real estate 3 2,044 2,044 12 5,105 5,105 Real estate construction and land development — — — 1 305 305 Subtotal – commercial loan portfolio 6 2,926 2,926 34 10,556 10,556 Consumer loan portfolio 15 481 481 54 2,450 2,448 Total 21 $ 3,407 $ 3,407 88 $ 13,006 $ 13,004 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 nine months ended September 30, 2016 and 2015 , 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 September 30, 2016 Nine Months Ended September 30, 2016 (Dollars in thousands) Number of Loans Principal Balance at End of Period Number of Loans Principal Balance at End of Period Commercial loan portfolio: Commercial real estate — $ — 2 $ 1,721 Subtotal – commercial loan portfolio — — 2 1,721 Consumer loan portfolio 1 — 3 — Total 1 $ — 5 $ 1,721 Three Months Ended September 30, 2015 Nine months ended September 30, 2015 (Dollars in thousands) Number of Loans Principal Balance at End of Period Number of Loans Principal Balance at End of Period Commercial loan portfolio: Commercial real estate 1 $ 74 5 $ 1,016 Subtotal – commercial loan portfolio 1 74 5 1,016 Consumer loan portfolio 1 13 2 46 Total 2 $ 87 7 $ 1,062 Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and nine months ended September 30, 2016 and 2015 , respectively, and details regarding the balance in the allowance and the recorded investment in loans at September 30, 2016 by impairment evaluation method. (Dollars in thousands) Commercial Loan Portfolio Consumer Loan Portfolio Unallocated Total Changes in allowance for loan losses for the three months ended September 30, 2016: Beginning balance $ 44,228 $ 27,278 $ — $ 71,506 Provision for loan losses 3,537 566 — 4,103 Charge-offs (824 ) (2,037 ) — (2,861 ) Recoveries 489 538 — 1,027 Ending balance $ 47,430 $ 26,345 $ — $ 73,775 Changes in allowance for loan losses for the nine months ended September 30, 2016: Beginning balance $ 47,234 $ 26,094 $ — $ 73,328 Provision for loan losses 5,437 3,166 — 8,603 Charge-offs (7,262 ) (4,677 ) — (11,939 ) Recoveries 2,021 1,762 — 3,783 Ending balance $ 47,430 $ 26,345 $ — $ 73,775 Changes in allowance for loan losses for the three months ended September 30, 2015: Beginning balance $ 45,527 $ 23,321 $ 6,093 $ 74,941 Provision for loan losses 2,637 (351 ) (786 ) 1,500 Charge-offs (539 ) (1,656 ) — (2,195 ) Recoveries 769 611 — 1,380 Ending balance $ 48,394 $ 21,925 $ 5,307 $ 75,626 Changes in allowance for loan losses for the nine months ended September 30, 2015: Beginning balance $ 44,156 $ 28,803 $ 2,724 $ 75,683 Provision for loan losses 5,604 (3,687 ) 2,583 4,500 Charge-offs (2,958 ) (5,104 ) — (8,062 ) Recoveries 1,592 1,913 — 3,505 Ending balance $ 48,394 $ 21,925 $ 5,307 $ 75,626 Allowance for loan losses balance at September 30, 2016 attributable to: Loans individually evaluated for impairment $ 3,245 $ 154 $ — $ 3,399 Loans collectively evaluated for impairment 44,185 26,191 — 70,376 Loans acquired with deteriorated credit quality — — — — Total $ 47,430 $ 26,345 $ — $ 73,775 Recorded investment (loan balance) at September 30, 2016: Loans individually evaluated for impairment $ 79,659 $ 19,864 $ — $ 99,523 Loans collectively evaluated for impairment 3,541,065 3,115,343 — 6,656,408 Loans acquired with deteriorated credit quality 3,812,723 2,147,135 — 5,959,858 Total $ 7,433,447 $ 5,282,342 $ — $ 12,715,789 The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2015 by impairment evaluation method. (Dollars in thousands) Commercial Loan Portfolio Consumer Loan Portfolio Total 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 |