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 at June 30, 2017 and December 31, 2016 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, 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 the Corporation's loans follows: (Dollars in thousands) Originated Acquired (1) Total Loans June 30, 2017 Commercial loan portfolio: Commercial $ 2,184,283 $ 1,175,878 $ 3,360,161 Commercial real estate 2,405,772 1,918,551 4,324,323 Real estate construction and land development 349,395 97,283 446,678 Subtotal 4,939,450 3,191,712 8,131,162 Consumer loan portfolio: Residential mortgage 1,683,550 1,441,847 3,125,397 Consumer installment 1,429,088 124,879 1,553,967 Home equity 607,534 249,312 856,846 Subtotal 3,720,172 1,816,038 5,536,210 Total loans $ 8,659,622 $ 5,007,750 $ 13,667,372 (2) December 31, 2016 Commercial loan portfolio: Commercial $ 1,901,526 $ 1,315,774 $ 3,217,300 Commercial real estate 1,921,799 2,051,341 3,973,140 Real estate construction and land development 281,724 122,048 403,772 Subtotal 4,105,049 3,489,163 7,594,212 Consumer loan portfolio: Residential mortgage 1,475,342 1,611,132 3,086,474 Consumer installment 1,282,588 151,296 1,433,884 Home equity 595,422 280,787 876,209 Subtotal 3,353,352 2,043,215 5,396,567 Total loans $ 7,458,401 $ 5,532,378 $ 12,990,779 (2) (1) Acquired loans are accounted for under ASC 310-30. (2) Reported net of deferred costs totaling $20.0 million and $14.8 million at June 30, 2017 and December 31, 2016 , respectively. The Corporation acquired loans at fair value as of the acquisition date, which includes loans acquired in the acquisitions of Talmer, Lake Michigan Financial Corporation ("Lake Michigan"), Monarch Community Bancorp, Inc. ("Monarch"), Northwestern Bancorp, Inc. ("Northwestern") and O.A.K. Financial Corporation ("OAK"). Acquired loans are accounted for under ASC 310-30 which recognizes the expected shortfall of expected future cash flows, as compared to the contractual amount due, as nonaccretable discount. Any excess of the net present value of expected future cash flows over the acquisition date fair value is recognized as the accretable discount, or accretable yield. The accretable discount is recognized over the expected remaining life of the acquired loans on a pool basis. Activity for the accretable yield, which includes contractually due interest for acquired loans that have been renewed or extended since the date of acquisition and continue to be accounted for in loan pools in accordance with ASC 310-30, follows: (Dollars in thousands) Talmer Lake Michigan Monarch North-western OAK Total Three Months Ended June 30, 2017 Balance at beginning of period $ 774,778 $ 113,211 $ 26,055 $ 64,897 $ 21,467 $ 1,000,408 Accretion recognized in interest income (45,091 ) (7,583 ) (1,159 ) (5,467 ) (3,314 ) (62,614 ) Net reclassification (to) from nonaccretable difference (1) 71,682 15,944 (626 ) 11,782 1,643 100,425 Balance at end of period $ 801,369 $ 121,572 $ 24,270 $ 71,212 $ 19,796 $ 1,038,219 Three Months Ended June 30, 2016 Balance at beginning of period $ — $ 137,975 $ 33,235 $ 76,368 $ 27,036 $ 274,614 Accretion recognized in interest income — (8,338 ) (1,385 ) (4,028 ) (3,727 ) (17,478 ) Net reclassification (to) from nonaccretable difference (1) — (4,294 ) (991 ) 1,406 3,283 (596 ) Balance at end of period $ — $ 125,343 $ 30,859 $ 73,746 $ 26,592 $ 256,540 Six Months Ended June 30, 2017 Balance at beginning of period $ 798,210 $ 121,416 $ 27,182 $ 69,847 $ 23,316 $ 1,039,971 Accretion recognized in interest income (89,662 ) (14,849 ) (2,340 ) (9,359 ) (6,591 ) (122,801 ) Net reclassification (to) from nonaccretable difference (1) 92,821 15,005 (572 ) 10,724 3,071 121,049 Balance at end of period $ 801,369 $ 121,572 $ 24,270 $ 71,212 $ 19,796 $ 1,038,219 Six Months Ended June 30, 2016 Balance at beginning of period $ — $ 152,999 $ 34,558 $ 82,623 $ 28,077 $ 298,257 Accretion recognized in interest income — (17,291 ) (2,836 ) (8,029 ) (6,284 ) (34,440 ) Net reclassification (to) from nonaccretable difference (1) — (10,365 ) (863 ) (848 ) 4,799 (7,277 ) Balance at end of period $ — $ 125,343 $ 30,859 $ 73,746 $ 26,592 $ 256,540 (1) The net reclassification results from changes in expected cash flows of the acquired loans which may include increases in the amount of contractual principal and interest expected to be collected due to improvement in credit quality, increases in balances outstanding from advances, renewals, extensions and interest rates; as well as reductions in contractual principal and interest expected to be collected due to credit deterioration, payoffs, and decreases in interest rates. 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, 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 $2.0 million requiring group loan authority approval, except for six executive and senior officers who have varying loan limits exceeding $2.0 million and up to $3.5 million . With respect to the group loan authorities, Chemical Bank has various regional loan committees that meet weekly to consider loans ranging in amounts of $2.0 million to $5.0 million , and a senior loan committee, consisting of certain executive and senior officers, that meets weekly to consider loans ranging in amounts from $5.0 million to $10.0 million , depending on risk rating and credit action required. A directors’ loan committee of Chemical Bank, consisting of eight independent directors of Chemical Bank, the chief executive officer of Chemical Bank and the chief 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 $25.0 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 Risk categories for the Corporation's commercial loan portfolio establish the credit quality of a borrower by measuring liquidity, debt capacity, coverage and payment behavior as shown in the borrower's financial statements. The risk categories also measure the quality of the borrower's management and the repayment support offered by any guarantors. Risk categories for the Corporation's commercial loan portfolio are described as follows: Pass: Includes all loans without weaknesses or potential weaknesses identified in the categories of special mention, substandard or doubtful. Special Mention: Loans with potential credit weakness or credit deficiency, which, if not corrected, pose an unwarranted financial risk that could weaken the loan by adversely impacting the future repayment ability of the borrower. Substandard: Loans with a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected. Doubtful: Loans with all the characteristics of a loan classified as Substandard, with the added characteristic that credit weaknesses make collection in full highly questionable and improbable. The primary source of repayment is nonexistent and there is doubt as to the value of the secondary source of repayments. A doubtful asset has a high probability of total or substantial loss, but because of pending events that may strengthen the asset, its classification as loss is deferred. Loss: An asset classified as loss is considered uncollectible and of such little value that the continuance as a bankable asset is not warranted. This classification does not mean that an asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even through partial recovery may occur in the future. The following schedule presents the recorded investment of loans in the commercial loan portfolio by credit risk categories at June 30, 2017 and December 31, 2016 : (Dollars in thousands) Pass Special Mention Substandard Doubtful Total June 30, 2017 Originated Portfolio: Commercial $ 2,101,781 $ 31,051 $ 47,871 $ 3,580 $ 2,184,283 Commercial real estate 2,341,493 29,840 33,390 1,049 2,405,772 Real estate construction and land development 349,339 — 56 — 349,395 Subtotal 4,792,613 60,891 81,317 4,629 4,939,450 Acquired Portfolio: Commercial 1,100,238 30,686 44,951 3 1,175,878 Commercial real estate 1,777,461 62,807 78,118 165 1,918,551 Real estate construction and land development 93,301 1,941 2,041 — 97,283 Subtotal 2,971,000 95,434 125,110 168 3,191,712 Total $ 7,763,613 $ 156,325 $ 206,427 $ 4,797 $ 8,131,162 December 31, 2016 Originated Portfolio: Commercial $ 1,803,750 $ 44,809 $ 51,898 $ 1,069 $ 1,901,526 Commercial real estate 1,849,315 36,981 35,502 1 1,921,799 Real estate construction and land development 280,968 157 599 — 281,724 Subtotal 3,934,033 81,947 87,999 1,070 4,105,049 Acquired Portfolio: Commercial 1,218,848 46,643 50,283 — 1,315,774 Commercial real estate 1,897,011 61,441 92,636 253 2,051,341 Real estate construction and land development 117,505 1,982 2,561 — 122,048 Subtotal 3,233,364 110,066 145,480 253 3,489,163 Total $ 7,167,397 $ 192,013 $ 233,479 $ 1,323 $ 7,594,212 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, are considered to be in a nonperforming status. Loans accounted for under ASC 310-30, "Acquired loans", that are not performing in accordance with contractual terms are not reported as nonperforming 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 June 30, 2017 and December 31, 2016 : (Dollars in thousands) Residential Mortgage Consumer Installment Home Equity Total Consumer June 30, 2017 Originated Loans: Performing $ 1,675,836 $ 1,428,331 $ 603,663 $ 3,707,830 Nonperforming 7,714 757 3,871 12,342 Subtotal 1,683,550 1,429,088 607,534 3,720,172 Acquired Loans 1,441,847 124,879 249,312 1,816,038 Total $ 3,125,397 $ 1,553,967 $ 856,846 $ 5,536,210 December 31, 2016 Originated Loans: Performing $ 1,468,373 $ 1,281,709 $ 592,071 $ 3,342,153 Nonperforming 6,969 879 3,351 11,199 Subtotal 1,475,342 1,282,588 595,422 3,353,352 Acquired Loans 1,611,132 151,296 280,787 2,043,215 Total $ 3,086,474 $ 1,433,884 $ 876,209 $ 5,396,567 Nonperforming Assets and Past Due Loans Nonperforming assets consist of loans for which the accrual of interest has been discounted, other real estate owned acquired through acquisitions, other real estate owned obtained through foreclosure and other repossessed assets. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof remains unpaid after the due date of the scheduled payments. Loans outside of those accounted for under ASC 310-30 are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful. The accrual of interest is discontinued when a loan is placed in nonaccrual status and any payments received reduce the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments are no longer doubtful. Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming 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. A summary of nonperforming loans follows: (Dollars in thousands) June 30, December 31, Nonperforming assets Nonaccrual loans: Commercial $ 18,773 $ 13,178 Commercial real estate 19,723 19,877 Real estate construction and land development 56 80 Residential mortgage 7,714 6,969 Consumer installment 757 879 Home equity 3,871 3,351 Total nonaccrual loans 50,894 44,334 Other real estate owned and repossessed assets 14,582 17,187 Total nonperforming assets $ 65,476 $ 61,521 Accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30 Commercial 58 11 Commercial real estate 262 277 Home equity 2,026 995 Total accruing loans contractually past due 90 days or more as to interest or principal payments, excluding acquired loans accounted for under ASC 310-30 $ 2,346 $ 1,283 The Corporation’s nonaccrual loans at June 30, 2017 and December 31, 2016 included $25.7 million and $30.5 million , respectively, of nonaccrual TDRs. The Corporation had $4.6 million of residential mortgage loans that were in the process of foreclosure at June 30, 2017 , compared to $7.3 million at December 31, 2016 . Loan delinquency, excluding acquired loans accounted for under ASC 310-30, was as follows: (Dollars in thousands) 30-59 days past due 60-89 days past due 90 days or more past due Total past due Current Total loans 90 days or more past due and still accruing June 30, 2017 Originated Portfolio: Commercial $ 6,578 $ 5,408 $ 7,604 $ 19,590 $ 2,164,693 $ 2,184,283 $ 58 Commercial real estate 21,106 7,518 5,221 33,845 2,371,927 2,405,772 262 Real estate construction and land development — — — — 349,395 349,395 — Residential mortgage 411 2,607 1,418 4,436 1,679,114 1,683,550 — Consumer installment 2,553 363 156 3,072 1,426,016 1,429,088 — Home equity 3,798 1,095 2,775 7,668 599,866 607,534 2,026 Total $ 34,446 $ 16,991 $ 17,174 $ 68,611 $ 8,591,011 $ 8,659,622 $ 2,346 December 31, 2016 Originated Portfolio: Commercial $ 10,421 $ 4,842 $ 3,641 $ 18,904 $ 1,882,622 $ 1,901,526 $ 11 Commercial real estate 6,551 1,589 5,165 13,305 1,908,494 1,921,799 277 Real estate construction and land development 2,721 499 — 3,220 278,504 281,724 — Residential mortgage 3,147 62 1,752 4,961 1,470,381 1,475,342 — Consumer installment 3,991 675 238 4,904 1,277,684 1,282,588 — Home equity 3,097 893 2,349 6,339 589,083 595,422 995 Total $ 29,928 $ 8,560 $ 13,145 $ 51,633 $ 7,406,768 $ 7,458,401 $ 1,283 Impaired Loans A loan is impaired when, based on current information and events, it is probable that the Corporation will be unable to collect all amounts due according to the contractual terms of the loan agreement. Impaired loans include nonperforming loans and all TDRs. Impaired loans are accounted for at the lower of the present value of expected cash flows or the estimated fair value of the collateral. When the present value of expected cash flows or the fair value of the collateral of an impaired loan not accounted for under ASC 310-30 is less than the amount of unpaid principal outstanding on the loan, the recorded principal balance of the loan is reduced to its carrying value through either a specific allowance for loan loss or a partial charge-off of the loan balance. The following schedules present impaired loans by classes of loans at June 30, 2017 and December 31, 2016 : (Dollars in thousands) Recorded Investment Unpaid Principal Balance Related Valuation Allowance June 30, 2017 Impaired loans with a valuation allowance: Commercial $ 28,623 $ 31,419 $ 4,335 Commercial real estate 20,209 25,552 1,334 Real estate construction and land development 189 189 4 Residential mortgage 16,711 16,711 724 Consumer installment 851 851 88 Home equity 4,658 4,658 1,062 Subtotal 71,241 79,380 7,547 Impaired loans with no related valuation allowance: Commercial 7,677 9,761 — Commercial real estate 21,512 25,411 — Real estate construction and land development 56 56 — Residential mortgage 4,386 4,386 — Home equity 1,258 1,258 — Subtotal 34,889 40,872 — Total impaired loans: Commercial 36,300 41,180 4,335 Commercial real estate 41,721 50,963 1,334 Real estate construction and land development 245 245 4 Residential mortgage 21,097 21,097 724 Consumer installment 851 851 88 Home equity 5,916 5,916 1,062 Total $ 106,130 $ 120,252 $ 7,547 December 31, 2016 Impaired loans with a valuation allowance: Commercial $ 28,925 $ 33,209 $ 3,128 Commercial real estate 21,318 27,558 2,102 Real estate construction and land development 177 177 4 Residential mortgage 20,864 20,864 3,528 Consumer installment 879 879 240 Home equity 2,577 2,577 390 Subtotal 74,740 85,264 9,392 Impaired loans with no related valuation allowance: Commercial 7,435 11,153 — Commercial real estate 20,588 23,535 — Real estate construction and land development 80 80 — Residential mortgage 3,252 3,252 — Home equity 774 774 — Subtotal 32,129 38,794 — Total impaired loans: Commercial 36,360 44,362 3,128 Commercial real estate 41,906 51,093 2,102 Real estate construction and land development 257 257 4 Residential mortgage 24,116 24,116 3,528 Consumer installment 879 879 240 Home equity 3,351 3,351 390 Total $ 106,869 $ 124,058 $ 9,392 The following schedule presents additional information regarding impaired loans by classes of loans segregated by those requiring a valuation allowance and those not requiring a valuation allowance for the three and six months ended June 30, 2017 and 2016 , and the respective interest income amounts recognized: Three Months Ended June 30, 2017 Three Months Ended June 30, 2016 Six Months Ended June 30, 2017 Six Months Ended June 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 Average Interest income Average Interest income Impaired loans with a valuation allowance: Commercial $ 24,493 $ 201 $ 3,867 $ — $ 25,103 $ 425 $ 7,209 $ — Commercial real estate 19,026 202 3,360 — 19,530 405 5,476 — Real estate construction and land development 141 3 — — 151 5 — — Residential mortgage 16,243 68 20,949 333 16,821 302 20,969 666 Consumer installment 682 1 — — 731 2 — — Home equity 4,024 16 — — 4,047 37 — — Subtotal $ 64,609 $ 491 $ 28,176 $ 333 $ 66,383 $ 1,176 $ 33,654 $ 666 Impaired loans with no related valuation allowance: Commercial $ 11,010 $ 48 $ 32,502 $ 310 $ 10,153 $ 78 $ 31,952 $ 587 Commercial real estate 25,183 99 45,679 312 24,329 203 45,708 692 Real estate construction and land development 106 — 860 2 93 — 889 8 Residential mortgage 4,581 10 5,094 — 4,194 17 5,121 — Consumer installment 142 — 281 — 179 — 311 — Home equity 1,162 5 1,984 — 1,021 6 2,186 — Subtotal $ 42,184 $ 162 $ 86,400 $ 624 $ 39,969 $ 304 $ 86,167 $ 1,287 Total impaired loans: Commercial $ 35,503 $ 249 $ 36,369 $ 310 $ 35,256 $ 503 $ 39,161 $ 587 Commercial real estate 44,209 301 49,039 312 43,859 608 51,184 692 Real estate construction and land development 247 3 860 2 244 5 889 8 Residential mortgage 20,824 78 26,043 333 21,015 319 26,090 666 Consumer installment 824 1 281 — 910 2 311 — Home equity 5,186 21 1,984 — 5,068 43 2,186 — Total $ 106,793 $ 653 $ 114,576 $ 957 $ 106,352 $ 1,480 $ 119,821 $ 1,953 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. Impaired loans included $55.2 million and $62.5 million at June 30, 2017 and December 31, 2016 , respectively, of accruing TDRs. Loans Modified Under Troubled Debt Restructurings (TDRs) The following tables present the recorded investment of loans modified into TDRs during the three and six months ended June 30, 2017 and 2016 by type of concession granted. In cases where more than one type of concession was granted, the loans were categorized based on the most significant concession. Concession type (Dollars in thousands) Principal Interest Forbearance Total Pre-modification recorded investment Post-modification recorded investment For the three months ended June 30, 2017 Commercial loan portfolio: Commercial $ 285 $ 266 $ — 7 $ 564 $ 551 Commercial real estate — 65 122 3 194 187 Subtotal 285 331 122 10 758 738 Consumer loan portfolio: Residential mortgage 37 261 — 5 316 298 Consumer installment 22 — — 4 24 22 Home equity 153 — — 4 160 153 Subtotal 212 261 — 13 500 473 Total loans $ 497 $ 592 $ 122 23 $ 1,258 $ 1,211 For the six months ended June 30, 2017 Commercial loan portfolio: Commercial $ 335 $ 1,367 $ 579 12 $ 2,303 $ 2,281 Commercial real estate 447 140 122 6 716 709 Subtotal 782 1,507 701 18 3,019 2,990 Consumer loan portfolio: Residential mortgage 135 261 — 6 414 396 Consumer installment 32 — — 6 35 32 Home equity 264 — — 5 325 264 Subtotal 431 261 — 17 774 692 Total loans $ 1,213 $ 1,768 $ 701 35 $ 3,793 $ 3,682 Concession type (Dollars in thousands) Principal Interest Forbearance Total Pre-modification recorded investment Post-modification recorded investment For the three months ended June 30, 2016 Commercial loan portfolio: Commercial $ 2,399 $ — $ 1,750 21 $ 4,149 $ 4,149 Commercial real estate 1,454 — — 2 1,454 1,454 Subtotal 3,853 — 1,750 23 5,603 5,603 Consumer loan portfolio: Residential mortgage 174 — — 2 174 174 Consumer installment 47 — — 8 47 47 Home equity 98 171 — 4 269 269 Subtotal 319 171 — 14 490 490 Total loans $ 4,172 $ 171 $ 1,750 37 $ 6,093 $ 6,093 For the six months ended June 30, 2016 Commercial loan portfolio: Commercial $ 6,231 $ — $ 1,750 28 $ 7,981 $ 7,981 Commercial real estate 2,441 — — 6 2,441 2,441 Subtotal 8,672 — 1,750 34 10,422 10,422 Consumer loan portfolio: Residential mortgage 279 — — 3 279 279 Consumer installment 80 — — 12 80 80 Home equity 127 208 — 6 335 335 Subtotal 486 208 — 21 694 694 Total loans $ 9,158 $ 208 $ 1,750 55 $ 11,116 $ 11,116 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 presents the Corporation's TDRs at June 30, 2017 and December 31, 2016 : (Dollars in thousands) Accruing TDRs Nonaccrual TDRs Total June 30, 2017 Commercial loan portfolio $ 39,714 $ 21,296 $ 61,010 Consumer loan portfolio 15,522 4,409 19,931 Total $ 55,236 $ 25,705 $ 80,941 December 31, 2016 Commercial loan portfolio $ 45,388 $ 25,397 $ 70,785 Consumer loan portfolio 17,147 5,134 22,281 Total $ 62,535 $ 30,531 $ 93,066 The following schedule includes TDRs for which there was a payment default during the three and six months ended June 30, 2017 and 2016 , 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: For The Three Months Ended June 30, 2017 For The Six Months Ended June 30, 2017 (Dollars in thousands) Number of loans Principal balance Number of loans Principal balance Commercial loan portfolio (commercial) 2 $ 997 5 $ 1,617 Consumer loan portfolio (residential mortgage) 3 58 5 163 Total 5 $ 1,055 10 $ 1,780 For The Three Months Ended June 30, 2016 For The Six Months Ended June 30, 2016 (Dollars in thousands) Number of loans Principal balance Number of loans Principal balance Commercial loan portfolio (commercial real estate) 1 $ 788 2 $ 1,721 Consumer loan portfolio (residential mortgage) 1 — 2 — Total 2 $ 788 4 $ 1,721 At June 30, 2017 , commitments to lend additional funds to borrowers whose terms have been modified in TDRs totaled $1.6 million . Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the three and six months ended June 30, 2017 and 2016 , and details regarding the balance in the allowance and the recorded investment in loans at June 30, 2017 by impairment evaluation method. (Dollars in thousands) Commercial Loan Portfolio Consumer Loan Portfolio Total Changes in allowance for loan losses for the three months ended June 30, 2017: Beginning balance $ 54,315 $ 24,459 $ 78,774 Provision for loan losses 4,084 2,145 6,229 Charge-offs (726 ) (1,578 ) (2,304 ) Recoveries 282 816 1,098 Ending balance $ 57,955 $ 25,842 $ 83,797 Changes in allowance for loan losses for the six months ended June 30, 2017: Beginning balance $ 51,201 $ 27,067 $ 78,268 Provision for loan losses 8,476 1,803 10,279 Charge-offs (3,417 ) (4,461 ) (7,878 ) Recoveries 1,695 1,433 3,128 Ending balance $ 57,955 $ 25,842 $ 83,797 Changes in allowance for loan losses for the three months ended June 30, 2016: Beginning balance $ 44,668 $ 25,650 $ 70,318 Provision for loan losses 900 2,100 3,000 Charge-offs (2,542 ) (1,078 ) (3,620 ) Recoveries 1,202 606 1,808 Ending balance $ 44,228 $ 27,278 $ 71,506 Changes in allowance for loan losses for the six months ended June 30, 2016: Beginning balance $ 47,234 $ 26,094 $ 73,328 Provision for loan losses 1,900 2,600 4,500 Charge-offs (6,438 ) (2,640 ) (9,078 ) Recoveries 1,532 1,224 2,756 Ending balance $ 44,228 $ 27,278 $ 71,506 Allowance for loan losses balance at June 30, 2017 attributable to: Loans individually evaluated for impairment $ 5,673 $ 1,874 $ 7,547 Loans collectively evaluated for impairment 52,282 23,968 76,250 Loans acquired with deteriorated credit quality — — — Total $ 57,955 $ 25,842 $ 83,797 Recorded investment (loan balance) at June 30, 2017: Loans individually evaluated for impairment $ 78,266 $ 27,864 $ 106,130 Loans collectively evaluated for impairment 4,861,184 3,692,308 8,553,492 Loans acquired with deteriorated credit quality 3,191,712 1,816,038 5,007,750 Total $ 8,131,162 $ 5,536,210 $ 13,667,372 The following schedule presents, by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2016 by impairment evaluation method. (Dollars in thousands) Commercial Loan Portfolio Consumer Loan Portfolio Total Allowance for loan losses balance at December 31, 2016 attributable to: Loans individually evaluated for i |