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 December 31, 2017 and 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, 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 December 31, 2017 Commercial loan portfolio: Commercial $ 2,407,606 $ 978,036 $ 3,385,642 Commercial real estate 2,751,425 1,749,245 4,500,670 Real estate construction and land development 498,155 76,060 574,215 Subtotal 5,657,186 2,803,341 8,460,527 Consumer loan portfolio: Residential mortgage 1,967,857 1,284,630 3,252,487 Consumer installment 1,510,540 102,468 1,613,008 Home equity 611,846 217,399 829,245 Subtotal 4,090,243 1,604,497 5,694,740 Total loans (2) $ 9,747,429 $ 4,407,838 $ 14,155,267 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 (2) $ 7,458,401 $ 5,532,378 $ 12,990,779 (1) Acquired loans are accounted for under ASC 310-30. (2) Reported net of deferred costs totaling $26.1 million and $14.8 million at December 31, 2017 and 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. In the event an acquired loan is renewed or extended, the loan continues to be accounted for as an acquired loan on a pool basis in accordance with ASC 310-30. Activity for the accretable yield is as follows: (Dollars in thousands) Talmer Lake Michigan Monarch North-western OAK Total Year Ended December 31, 2017 Balance at beginning of period $ 798,210 $ 121,416 $ 27,182 $ 69,847 $ 23,316 $ 1,039,971 Accretion recognized in interest income (175,678 ) (29,077 ) (4,533 ) (20,318 ) (12,563 ) (242,169 ) Net reclassification (to) from nonaccretable difference (1) 108,821 2,785 (153 ) 11,285 6,357 129,095 Balance at end of period $ 731,353 $ 95,124 $ 22,496 $ 60,814 $ 17,110 $ 926,897 Year Ended December 31, 2016 Balance at beginning of period $ — $ 152,999 $ 34,558 $ 82,623 $ 28,077 $ 298,257 Addition attributable to acquisitions 862,127 — — — — 862,127 Additions (reductions) (1) — (3,552 ) (1,908 ) (6,985 ) 1,091 (11,354 ) Accretion recognized in interest income (63,917 ) (33,031 ) (5,468 ) (15,791 ) (13,352 ) (131,559 ) Net reclassification (to) from nonaccretable difference (1) — 5,000 — 10,000 7,500 22,500 Balance at end of period $ 798,210 $ 121,416 $ 27,182 $ 69,847 $ 23,316 $ 1,039,971 Year Ended December 31, 2015 Balance at beginning of period $ — $ — $ — $ 104,675 $ 33,286 $ 137,961 Addition attributable to acquisitions — 190,246 37,914 — — 228,160 Additions (reductions) (1) — (12,991 ) 1,336 (3,396 ) 6,601 (8,450 ) Accretion recognized in interest income — (24,256 ) (4,692 ) (18,656 ) (11,810 ) (59,414 ) Net reclassification (to) from nonaccretable difference (1) — — — — — — Balance at end of period $ — $ 152,999 $ 34,558 $ 82,623 $ 28,077 $ 298,257 (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. 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 $3.8 million at December 31, 2017 and $23.9 million at December 31, 2016 . During 2017 and 2016 , there were $44.1 million and $33.8 million , respectively, of new loans and other additions, while repayments and other reductions totaled $64.2 million and $31.6 million , respectively. Loans held-for-sale, comprised of fixed-rate residential mortgage loans, were $52.1 million at December 31, 2017 and $81.8 million at December 31, 2016 . The Corporation sold loans totaling $806.8 million in 2017 , $707.8 million in 2016 and $222.6 million in 2015 . 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 northwest 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 $1.25 million requiring credit officer approval and credit decisions greater than $3.0 million requiring group loan authority approval, except for six executive and senior officers who have varying loan limits up to $8.0 million . With respect to the group loan authorities, Chemical Bank has various regional loan committees that meet weekly to consider loan ranging in amounts from $3.0 million to $7.0 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 up to Chemical Bank's internal lending limit, depending on risk rating and credit action required. Credit decisions exceeding Chemical Bank's internal lending limit require the approval of the board of directors. 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 December 31, 2017 and 2016 : (Dollars in thousands) Pass Special Mention Substandard Doubtful Total December 31, 2017 Originated Portfolio: Commercial $ 2,316,464 $ 41,059 $ 50,083 $ — $ 2,407,606 Commercial real estate 2,677,579 24,204 49,642 — 2,751,425 Real estate construction and land development 494,528 837 2,790 — 498,155 Subtotal 5,488,571 66,100 102,515 — 5,657,186 Acquired Portfolio: Commercial 873,861 68,418 35,539 218 978,036 Commercial real estate 1,603,685 67,970 76,803 787 1,749,245 Real estate construction and land development 72,346 2,218 1,496 — 76,060 Subtotal 2,549,892 138,606 113,838 1,005 2,803,341 Total $ 8,038,463 $ 204,706 $ 216,353 $ 1,005 $ 8,460,527 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 December 31, 2017 and 2016 : (Dollars in thousands) Residential mortgage Consumer installment Home equity Total consumer December 31, 2017 Originated Portfolio: Performing $ 1,959,222 $ 1,509,698 $ 607,541 $ 4,076,461 Nonperforming 8,635 842 4,305 13,782 Subtotal 1,967,857 1,510,540 611,846 4,090,243 Acquired Loans 1,284,630 102,468 217,399 1,604,497 Total $ 3,252,487 $ 1,613,008 $ 829,245 $ 5,694,740 December 31, 2016 Originated Portfolio: 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 discontinued, 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 assets follows: December 31, (Dollars in thousands) 2017 2016 Nonperforming assets Nonaccrual loans: Commercial $ 19,691 $ 13,178 Commercial real estate 29,545 19,877 Real estate construction and land development 77 80 Residential mortgage 8,635 6,969 Consumer installment 842 879 Home equity 4,305 3,351 Total nonaccrual loans 63,095 44,334 Other real estate owned and repossessed assets 8,807 17,187 Total nonperforming assets $ 71,902 $ 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 $ — $ 11 Commercial real estate 13 277 Residential mortgage — — Home equity 1,364 995 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 $ 1,377 $ 1,283 The Corporation's nonaccrual loans at December 31, 2017 and 2016 included $29.1 million and $30.5 million , respectively, of nonaccrual TDRs. There was no interest income recognized on nonaccrual loans during 2017 , 2016 and 2015 while the loans were in nonaccrual status. During 2017 , 2016 and 2015 , the Corporation recognized $1.3 million , $0.4 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 $3.1 million in 2017 , $2.9 million in 2016 and $3.2 million in 2015 . During 2017 , 2016 and 2015 , the Corporation recognized interest income of $2.6 million , $3.9 million and $3.9 million , respectively, on performing TDRs. The Corporation had $4.2 million of residential mortgage loans that were in the process of foreclosure at December 31, 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 December 31, 2017 Originated Portfolio: Commercial $ 13,906 $ 3,766 $ 9,494 $ 27,166 $ 2,380,440 $ 2,407,606 $ — Commercial real estate 9,380 1,562 5,873 16,815 2,734,610 2,751,425 13 Real estate construction and land development — — — — 498,155 498,155 — Residential mortgage 2,795 1,415 858 5,068 1,962,789 1,967,857 — Consumer installment 3,324 442 226 3,992 1,506,548 1,510,540 — Home equity 2,319 1,301 2,196 5,816 606,030 611,846 1,364 Total $ 31,724 $ 8,486 $ 18,647 $ 58,857 $ 9,688,572 $ 9,747,429 $ 1,377 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 December 31, 2017 and December 31, 2016 : (Dollars in thousands) Recorded investment Unpaid principal balance Related valuation allowance December 31, 2017 Impaired loans with a valuation allowance: Commercial $ 28,897 $ 31,655 $ 2,296 Commercial real estate 28,003 34,580 3,227 Real estate construction and land development 313 313 14 Residential mortgage 15,872 15,872 1,487 Consumer installment 966 966 120 Home equity 4,570 4,570 858 Subtotal 78,621 87,956 8,002 Impaired loans with no related valuation allowance: Commercial 8,504 9,291 — Commercial real estate 18,080 19,861 — Real estate construction and land development — — — Residential mortgage 4,902 4,902 — Consumer installment — — — Home equity 1,770 1,770 — Subtotal 33,256 35,824 — Total impaired loans: Commercial 37,401 40,946 2,296 Commercial real estate 46,083 54,441 3,227 Real estate construction and land development 313 313 14 Residential mortgage 20,774 20,774 1,487 Consumer installment 966 966 120 Home equity 6,340 6,340 858 Total $ 111,877 $ 123,780 $ 8,002 (Dollars in thousands) Recorded investment Unpaid principal balance Related valuation allowance 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 — Consumer installment — — — 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 at December 31, 2017 , 2016 and 2015 and the respective interest income amounts recognized: For the years ended December 31, 2017 2016 2015 (Dollars in thousands) Average annual recorded investment Interest income recognized while on impaired status Average annual recorded investment Interest income recognized while on impaired status Average annual recorded investment Interest income recognized while on impaired status Impaired loans with a valuation allowance: Commercial $ 25,099 $ 939 $ 7,829 $ — $ 9,511 $ — Commercial real estate 19,983 677 5,658 — 2,918 — Real estate construction and land development 175 10 19 — — — Residential mortgage 16,390 538 23,958 1,285 20,661 1,312 Consumer installment 744 4 359 — — — Home equity 4,201 82 1,759 — — — Subtotal 66,592 2,250 39,582 1,285 33,090 1,312 Impaired loans with no related valuation allowance: Commercial 10,196 28 29,559 1,343 27,778 1,005 Commercial real estate 24,658 245 41,646 1,236 50,079 1,547 Real estate construction and land development 78 — 585 22 889 25 Residential mortgage 4,622 38 1,519 — 6,027 — Consumer installment 205 — — — 448 — Home equity 1,392 14 555 — 1,872 — Subtotal 41,151 325 73,864 2,601 87,093 2,577 Total impaired loans: Commercial 35,295 967 37,388 1,343 37,289 1,005 Commercial real estate 44,641 922 47,304 1,236 52,997 1,547 Real estate construction and land development 253 10 604 22 889 25 Residential mortgage 21,012 576 25,477 1,285 26,688 1,312 Consumer installment 949 4 359 — 448 — Home equity 5,593 96 2,314 — 1,872 — Total $ 107,743 $ 2,575 $ 113,446 $ 3,886 $ 120,183 $ 3,889 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 $48.8 million and $62.5 million at December 31, 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 years ended December 31, 2017 , 2016 and 2015 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 Principal A/B Note Restructure (1) Interest Forbearance Total Pre- modification recorded investment Post- modification recorded investment For the year ended December 31, 2017 Commercial loan portfolio: Commercial $ 2,308 $ — $ — $ 1,827 $ 2,176 36 $ 6,416 $ 6,311 Commercial real estate 706 — — 338 953 16 2,097 1,997 Real estate construction and land development 35 — — — — 1 36 35 Subtotal 3,049 — — 2,165 3,129 53 8,549 8,343 Consumer loan portfolio: Residential mortgage 297 — — 383 — 11 763 680 Consumer installment 118 37 — 37 — 34 208 192 Home equity 389 — — 52 — 14 537 441 Subtotal 804 37 — 472 — 59 1,508 1,313 Total loans $ 3,853 $ 37 $ — $ 2,637 $ 3,129 112 $ 10,057 $ 9,656 For the year ended December 31, 2016 Commercial loan portfolio: Commercial $ 11,533 $ 1,527 $ 43 $ — $ 1,750 54 $ 14,853 $ 14,853 Commercial real estate 2,993 1,866 — — — 16 4,859 4,859 Subtotal 14,526 3,393 43 — 1,750 70 19,712 19,712 Consumer loan portfolio: Residential mortgage 477 — — — — 4 477 477 Consumer installment 87 — — — — 14 87 87 Home equity 179 — — 364 — 10 543 543 Subtotal 743 — — 364 — 28 1,107 1,107 Total loans $ 15,269 $ 3,393 $ 43 $ 364 $ 1,750 98 $ 20,819 $ 20,819 For the year ended December 31, 2015 Commercial loan portfolio: Commercial $ 6,031 $ — $ — $ 117 $ 5,298 53 $ 11,446 $ 11,446 Commercial real estate 5,904 450 — 102 740 21 7,196 7,196 Real estate construction and land development 705 — — — — 3 705 705 Subtotal 12,640 450 — 219 6,038 77 19,347 19,347 Consumer loan portfolio: Residential mortgage 1,246 — — 635 — 20 1,881 1,881 Consumer installment 210 — — — — 19 210 210 Home equity 1,110 — — 46 — 26 1,158 1,156 Subtotal 2,566 — — 681 — 65 3,249 3,247 Total loans $ 15,206 $ 450 $ — $ 900 $ 6,038 142 $ 22,596 $ 22,594 (1) Loan restructurings whereby the original loan is restructured into two notes: an "A" note, which generally reflects the portion of the modified loans which is expected to be collected: and a "B" note, which is fully charged off. 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 December 31, 2017 and 2016 : (Dollars in thousands) Accruing TDRs Nonaccrual TDRs Total December 31, 2017 Commercial loan portfolio $ 34,484 $ 24,358 $ 58,842 Consumer loan portfolio 14,298 4,748 19,046 Total $ 48,782 $ 29,106 $ 77,888 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 years ended December 31, 2017 , 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: For the years ended December 31, 2017 2016 2015 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 5 $ 1,617 — $ — 1 $ 1,206 Commercial real estate — — 2 1,721 5 1,016 Subtotal - commercial loan portfolio 5 1,617 2 1,721 6 2,222 Consumer loan portfolio (residential mortgage) 17 434 14 259 3 65 Total 22 $ 2,051 16 $ 1,980 9 $ 2,287 At December 31, 2017 , commitments to lend additional funds to borrowers whose terms have been modified in TDRs totaled $2.0 million . Allowance for Loan Losses The following schedule presents, by loan portfolio segment, the changes in the allowance for the originated loan portfolio for the years ended December 31, 2017 , 2016 and 2015 . (Dollars in thousands) Commercial loan portfolio Consumer loan portfolio Unallocated Total Originated Loan Portfolio Changes in allowance for loan losses for the year ended December 31, 2017: Beginning balance $ 51,201 $ 27,067 $ — $ 78,268 Provision for loan losses 19,007 4,293 — 23,300 Charge-offs (8,570 ) (8,297 ) — (16,867 ) Recoveries 4,495 2,691 — 7,186 Ending balance $ 66,133 $ 25,754 $ — $ 91,887 Changes in allowance for loan losses for the year ended December 31, 2016: Beginning balance $ 47,234 $ 26,094 $ — $ 73,328 Provision (benefit) for loan losses 9,788 5,087 — 14,875 Charge-offs (8,906 ) (6,396 ) — (15,302 ) Recoveries 3,085 2,282 — 5,367 Ending balance $ 51,201 $ 27,067 $ — $ 78,268 Changes in allowance for loan losses for the year ended December 31, 2015: Beginning balance $ 44,156 $ 28,803 $ 2,724 $ 75,683 Provision (benefit) 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 The following schedule presents by loan portfolio segment, details regarding the balance in the allowance and the recorded investment in loans at December 31, 2017 and 2016 by impairment evaluation method. (Dollars in thousands) Commercial Consumer |