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 (owner-occupied), non-owner occupied real estate leased to one or more tenants (non-owner occupied) and vacant land that has been acquired for investment or future land development (vacant land). 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, 2019 and December 31, 2018 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 watercraft and comprised primarily of indirect loans purchased from dealers. These loans generally 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. Loans held-for-sale, comprised of fixed-rate residential mortgage and construction loans, were $33.0 million at June 30, 2019 and $85.0 million at December 31, 2018 . The Corporation sold loans totaling $196.9 million and $392.7 million during the three and six months ended June 30, 2019 , respectively, and $202.1 million and $392.6 million during the three and six months ended June 30, 2018 , respectively. 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, 2019 Commercial loan portfolio: Commercial $ 3,752,528 $ 595,357 $ 4,347,885 Commercial real estate: Owner-occupied 1,528,802 495,759 2,024,561 Non-owner occupied 2,056,531 716,146 2,772,677 Vacant land 37,155 12,807 49,962 Total commercial real estate 3,622,488 1,224,712 4,847,200 Real estate construction and land development 671,773 28,997 700,770 Subtotal 8,046,789 1,849,066 9,895,855 Consumer loan portfolio: Residential mortgage 2,722,019 944,594 3,666,613 Consumer installment 1,497,467 55,368 1,552,835 Home equity 604,835 141,765 746,600 Subtotal 4,824,321 1,141,727 5,966,048 Total loans (2) $ 12,871,110 $ 2,990,793 $ 15,861,903 December 31, 2018 Commercial loan portfolio: Commercial $ 3,287,087 $ 715,481 $ 4,002,568 Commercial real estate: Owner-occupied 1,513,532 546,025 2,059,557 Non-owner occupied 1,966,330 818,690 2,785,020 Vacant land 40,295 27,215 67,510 Total commercial real estate 3,520,157 1,391,930 4,912,087 Real estate construction and land development 566,726 30,486 597,212 Subtotal 7,373,970 2,137,897 9,511,867 Consumer loan portfolio: Residential mortgage 2,407,305 1,051,361 3,458,666 Consumer installment 1,451,352 69,722 1,521,074 Home equity 612,129 166,043 778,172 Subtotal 4,470,786 1,287,126 5,757,912 Total loans (2) $ 11,844,756 $ 3,425,023 $ 15,269,779 (1) Loans acquired in the Talmer, Lake Michigan, Monarch, Northwestern and OAK acquisitions were elected to be accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30), by analogy. (2) Reported net of deferred costs totaling $27.2 million and $19.7 million at June 30, 2019 and December 31, 2018 , respectively. The Corporation acquired loans at fair value as of the acquisition date, which includes loans acquired in the acquisitions of Talmer Bancorp, Inc. ("Talmer"), Lake Michigan Financial Corporation ("Lake Michigan"), Monarch Community Bancorp, Inc. ("Monarch"), Northwestern Bancorp, Inc. ("Northwestern") and O.A.K. Financial Corporation ("OAK"). Loans acquired in each of these transactions ("Acquired Loans") were elected to be accounted for under ASC 310-30, by analogy, which recognizes the expected shortfall of expected future cash flows, as compared to the contractual amount due, as nonaccretable difference. 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 yield 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, which includes contractually due expected cash flows 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, 2019 Balance at beginning of period $ 469,713 $ 68,995 $ 16,967 $ 38,644 $ 8,345 $ 602,664 Accretion recognized in interest income (36,730 ) (5,291 ) (852 ) (3,214 ) (1,334 ) (47,421 ) Net reclassification (to) from nonaccretable difference (1) 730 409 750 745 913 3,547 Balance at end of period $ 433,713 $ 64,113 $ 16,865 $ 36,175 $ 7,924 $ 558,790 Three Months Ended June 30, 2018 Balance at beginning of period $ 685,830 $ 90,156 $ 21,154 $ 55,400 $ 16,158 $ 868,698 Accretion recognized in interest income (42,136 ) (6,302 ) (962 ) (4,618 ) (2,882 ) (56,900 ) Net reclassification (to) from nonaccretable difference (1) (27,526 ) (3,412 ) (61 ) (1,051 ) 1,016 (31,034 ) Balance at end of period $ 616,168 $ 80,442 $ 20,131 $ 49,731 $ 14,292 $ 780,764 Six Months Ended June 30, 2019 Balance at beginning of period $ 505,332 $ 73,132 $ 17,832 $ 41,455 $ 9,574 $ 647,325 Accretion recognized in interest income (74,761 ) (10,842 ) (1,626 ) (6,634 ) (2,703 ) (96,566 ) Net reclassification (to) from nonaccretable difference (1) 3,142 1,823 659 1,354 1,053 8,031 Balance at end of period $ 433,713 $ 64,113 $ 16,865 $ 36,175 $ 7,924 $ 558,790 Six Months Ended June 30, 2018 Balance at beginning of period $ 731,353 $ 95,124 $ 22,496 $ 60,814 $ 17,110 $ 926,897 Accretion recognized in interest income (84,776 ) (13,060 ) (2,118 ) (9,522 ) (5,985 ) (115,461 ) Net reclassification (to) from nonaccretable difference (1) (30,409 ) (1,622 ) (247 ) (1,561 ) 3,167 (30,672 ) Balance at end of period $ 616,168 $ 80,442 $ 20,131 $ 49,731 $ 14,292 $ 780,764 (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, 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 loans ranging in amounts of $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 of $7.0 million up to Chemical Bank's internal lending limit, depending on risk rating and credit action required. Credit actions exceeding Chemical Bank's internal lending limit 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, 2019 and December 31, 2018 : (Dollars in thousands) Pass Special Mention Substandard Doubtful Total June 30, 2019 Originated Portfolio: Commercial $ 3,513,993 $ 123,194 $ 108,373 $ 6,968 $ 3,752,528 Commercial real estate: Owner-occupied 1,452,031 25,913 50,697 161 1,528,802 Non-owner occupied 2,023,577 5,516 27,433 5 2,056,531 Vacant land 35,546 96 1,513 — 37,155 Total commercial real estate 3,511,154 31,525 79,643 166 3,622,488 Real estate construction and land development 664,122 3,612 4,039 — 671,773 Subtotal 7,689,269 158,331 192,055 7,134 8,046,789 Acquired Portfolio: Commercial 505,823 62,253 25,512 1,769 595,357 Commercial real estate: Owner-occupied 462,266 18,226 14,835 432 495,759 Non-owner occupied 655,602 43,147 17,382 15 716,146 Vacant land 12,614 193 — — 12,807 Total commercial real estate 1,130,482 61,566 32,217 447 1,224,712 Real estate construction and land development 28,715 42 240 — 28,997 Subtotal 1,665,020 123,861 57,969 2,216 1,849,066 Total $ 9,354,289 $ 282,192 $ 250,024 $ 9,350 $ 9,895,855 December 31, 2018 Originated Portfolio: Commercial $ 3,118,894 $ 87,222 $ 77,036 $ 3,935 $ 3,287,087 Commercial real estate: Owner-occupied 1,430,948 32,056 50,286 242 1,513,532 Non-owner occupied 1,901,822 39,416 25,092 — 1,966,330 Vacant land 36,499 — 3,741 55 40,295 Total commercial real estate 3,369,269 71,472 79,119 297 3,520,157 Real estate construction and land development 557,040 6,108 3,578 — 566,726 Subtotal 7,045,203 164,802 159,733 4,232 7,373,970 Acquired Portfolio: Commercial 655,883 36,809 22,773 16 715,481 Commercial real estate: Owner-occupied 500,072 28,909 17,033 11 546,025 Non-owner occupied 740,900 52,546 25,244 — 818,690 Vacant land 26,978 237 — — 27,215 Total commercial real estate 1,267,950 81,692 42,277 11 1,391,930 Real estate construction and land development 29,248 97 1,141 — 30,486 Subtotal 1,953,081 118,598 66,191 27 2,137,897 Total $ 8,998,284 $ 283,400 $ 225,924 $ 4,259 $ 9,511,867 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, 2019 and December 31, 2018 : (Dollars in thousands) Residential Mortgage Consumer Installment Home Equity Total Consumer June 30, 2019 Originated Loans: Performing $ 2,714,383 $ 1,496,056 $ 601,348 $ 4,811,787 Nonperforming 7,636 1,411 3,487 12,534 Subtotal 2,722,019 1,497,467 604,835 4,824,321 Acquired Loans 944,594 55,368 141,765 1,141,727 Total $ 3,666,613 $ 1,552,835 $ 746,600 $ 5,966,048 December 31, 2018 Originated Loans: Performing $ 2,399,317 $ 1,450,076 $ 608,525 $ 4,457,918 Nonperforming 7,988 1,276 3,604 12,868 Subtotal 2,407,305 1,451,352 612,129 4,470,786 Acquired Loans 1,051,361 69,722 166,043 1,287,126 Total $ 3,458,666 $ 1,521,074 $ 778,172 $ 5,757,912 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: (Dollars in thousands) June 30, December 31, Nonperforming assets Nonaccrual loans: Commercial $ 37,762 $ 30,139 Commercial real estate: Owner-occupied 20,814 16,056 Non-owner occupied 21,639 23,021 Vacant land 1,446 3,337 Total commercial real estate 43,899 42,414 Real estate construction and land development 3,501 12 Residential mortgage 7,636 7,988 Consumer installment 1,411 1,276 Home equity 3,487 3,604 Total nonaccrual loans 97,696 85,433 Other real estate owned and repossessed assets 8,267 6,256 Total nonperforming assets $ 105,963 $ 91,689 The Corporation's nonaccrual loans at June 30, 2019 and December 31, 2018 included $29.9 million and $28.1 million , respectively, of nonaccrual TDRs. The Corporation had $3.6 million of residential mortgage loans that were in the process of foreclosure at June 30, 2019 , compared to $4.5 million at December 31, 2018 . Loan delinquency, excluding acquired loans accounted for under ASC 310-30, was as follows: Loans Past Due and Still Accruing (Dollars in thousands) 30-89 days past due 90 days or more past due Total past due Nonaccrual Loans Current Total loans June 30, 2019 Originated Portfolio: Commercial $ 19,158 $ 146 $ 19,304 $ 37,762 $ 3,695,462 $ 3,752,528 Commercial real estate: Owner-occupied 3,368 — 3,368 20,814 1,504,620 1,528,802 Non-owner occupied 1,714 — 1,714 21,639 2,033,178 2,056,531 Vacant land 501 — 501 1,446 35,208 37,155 Total commercial real estate 5,583 — 5,583 43,899 3,573,006 3,622,488 Real estate construction and land development 538 — 538 3,501 667,734 671,773 Residential mortgage 6,183 — 6,183 7,636 2,708,200 2,722,019 Consumer installment 3,076 — 3,076 1,411 1,492,980 1,497,467 Home equity 2,557 — 2,557 3,487 598,791 604,835 Total $ 37,095 $ 146 $ 37,241 $ 97,696 $ 12,736,173 $ 12,871,110 December 31, 2018 Originated Portfolio: Commercial $ 16,835 $ — $ 16,835 $ 30,139 $ 3,240,113 $ 3,287,087 Commercial real estate: Owner-occupied 4,657 52 4,709 16,056 1,492,767 1,513,532 Non-owner occupied 1,793 887 2,680 23,021 1,940,629 1,966,330 Vacant land 160 — 160 3,337 36,798 40,295 Total commercial real estate 6,610 939 7,549 42,414 3,470,194 3,520,157 Real estate construction and land development 247 — 247 12 566,467 566,726 Residential mortgage 1,688 — 1,688 7,988 2,397,629 2,407,305 Consumer installment 4,731 — 4,731 1,276 1,445,345 1,451,352 Home equity 3,843 488 4,331 3,604 604,194 612,129 Total $ 33,954 $ 1,427 $ 35,381 $ 85,433 $ 11,723,942 $ 11,844,756 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, 2019 and December 31, 2018 : (Dollars in thousands) Recorded investment Unpaid principal balance Related valuation allowance June 30, 2019 Impaired loans with a valuation allowance: Commercial $ 28,732 $ 31,556 $ 5,805 Commercial real estate: Owner-occupied 20,050 22,193 2,168 Non-owner occupied 18,080 19,966 1,366 Vacant land 786 1,003 59 Total commercial real estate 38,916 43,162 3,593 Real estate construction and land development 3,612 3,612 365 Residential mortgage 10,060 10,060 790 Consumer installment 1,594 1,594 109 Home equity 4,290 4,290 356 Subtotal 87,204 94,274 11,018 Impaired loans with no related valuation allowance: Commercial 28,775 29,586 — Commercial real estate: Owner-occupied 12,057 12,895 — Non-owner occupied 7,827 8,339 — Vacant land 776 1,704 — Total commercial real estate 20,660 22,938 — Real estate construction and land development 164 164 — Residential mortgage 7,235 7,235 — Consumer installment 7 7 — Home equity 1,656 1,656 — Subtotal 58,497 61,586 — Total impaired loans: Commercial 57,507 61,142 5,805 Commercial real estate: Owner-occupied 32,107 35,088 2,168 Non-owner occupied 25,907 28,305 1,366 Vacant land 1,562 2,707 59 Total commercial real estate 59,576 66,100 3,593 Real estate construction and land development 3,776 3,776 365 Residential mortgage 17,295 17,295 790 Consumer installment 1,601 1,601 109 Home equity 5,946 5,946 356 Total $ 145,701 $ 155,860 $ 11,018 (Dollars in thousands) Recorded Unpaid Related December 31, 2018 Impaired loans with a valuation allowance: Commercial $ 20,957 $ 23,781 $ 3,546 Commercial real estate: Owner-occupied 14,702 16,519 1,359 Non-owner occupied 16,833 17,452 462 Vacant land 1,008 1,208 96 Total commercial real estate 32,543 35,179 1,917 Real estate construction and land development 126 126 11 Residential mortgage 10,867 10,867 816 Consumer installment 1,126 1,126 186 Home equity 4,432 4,432 328 Subtotal 70,051 75,511 6,804 Impaired loans with no related valuation allowance: Commercial 25,093 25,934 — Commercial real estate: Owner-occupied 10,971 11,601 — Non-owner occupied 12,412 13,411 — Vacant land 2,825 3,911 — Total commercial real estate 26,208 28,923 — Real estate construction and land development 111 111 — Residential mortgage 7,537 7,537 — Consumer installment 377 377 — Home equity 1,496 1,496 — Subtotal 60,822 64,378 — Total impaired loans: Commercial 46,050 49,715 3,546 Commercial real estate: Owner-occupied 25,673 28,120 1,359 Non-owner occupied 29,245 30,863 462 Vacant land 3,833 5,119 96 Total commercial real estate 58,751 64,102 1,917 Real estate construction and land development 237 237 11 Residential mortgage 18,404 18,404 816 Consumer installment 1,503 1,503 186 Home equity 5,928 5,928 328 Total $ 130,873 $ 139,889 $ 6,804 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, 2019 and 2018 , and the respective interest income amounts recognized: Three Months Ended June 30, 2019 Three Months Ended June 30, 2018 Six Months Ended June 30, 2019 Six Months Ended June 30, 2018 (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 $ 26,587 $ 93 $ 18,139 $ 111 $ 24,109 $ 179 $ 19,271 $ 276 Commercial real estate: Owner-occupied 17,515 130 12,949 81 17,522 255 13,510 163 Non-owner occupied 9,050 9 2,246 10 11,055 54 3,058 21 Vacant land 788 2 1,308 17 896 10 2,502 32 Total commercial real estate 27,353 141 16,503 108 29,473 319 19,070 216 Real estate construction and land development 3,730 2 243 2 3,174 4 234 4 Residential mortgage 10,011 97 12,762 115 10,005 198 13,183 232 Consumer installment 1,250 2 1,067 2 1,213 4 986 3 Home equity 3,830 24 2,812 21 3,739 46 3,253 38 Subtotal 72,761 359 51,526 359 $ 71,713 $ 750 $ 55,997 $ 769 Impaired loans with no related valuation allowance: Commercial 27,865 201 20,078 147 $ 27,510 $ 384 $ 19,102 $ 242 Commercial real estate: Owner-occupied 14,110 73 14,565 81 12,841 126 14,967 137 Non-owner occupied 16,677 58 9,539 38 16,073 105 8,349 103 Vacant land 1,140 — 3,440 — 1,787 — 2,604 — Total commercial real estate 31,927 131 27,544 119 30,701 231 25,920 240 Real estate construction and land development 102 2 1,994 2 76 4 1,051 3 Residential mortgage 7,241 29 7,075 25 7,488 57 6,606 48 Consumer installment 36 — 41 — 226 — 91 — Home equity 1,987 5 2,487 2 2,096 12 2,266 9 Subtotal 69,158 368 59,219 295 $ 68,097 $ 688 $ 55,036 $ 542 Total impaired loans: Commercial 54,452 294 38,217 258 $ 51,619 $ 563 $ 38,373 $ 518 Commercial real estate: Owner-occupied 31,625 203 27,514 162 30,363 381 28,477 300 Non-owner occupied 25,727 67 11,785 48 27,128 159 11,407 124 Vacant land 1,928 2 4,748 17 2,683 10 5,106 32 Total commercial real estate 59,280 272 44,047 227 60,174 550 44,990 456 Real estate construction and land development 3,832 4 2,237 4 3,250 8 1,285 7 Residential mortgage 17,252 126 19,837 140 17,493 255 19,789 280 Consumer installment 1,286 2 1,108 2 1,439 4 1,077 3 Home equity 5,817 29 5,299 23 5,835 58 5,519 47 Total $ 141,919 $ 727 $ 110,745 $ 654 $ 139,810 $ 1,438 $ 111,033 $ 1,311 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 $47.9 million and $45.6 million at June 30, 2019 and December 31, 2018 , 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, 2019 and 2018 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 Interest Forbearance Total Pre-modification recorded investment Post-modification recorded investment For the three months ended June 30, 2019 Commercial loan portfolio: Commercial $ 14 $ 12 $ 426 $ 3,351 13 $ 3,818 $ 3,803 Commercial real estate: Owner-occupied 156 — 268 — 4 436 424 Non-owner occupied — — 140 — 1 154 140 Vacant land — — — 244 1 269 244 Total commercial real estate 156 — 408 244 6 859 808 Total commercial 170 12 834 3,595 19 4,677 4,611 Consumer loan portfolio: Residential mortgage 81 — 330 — 4 422 411 Consumer installment 15 39 13 — 6 70 67 Home equity 167 19 168 — 8 371 354 Total consumer 263 58 511 — 18 863 832 Total loans $ 433 $ 70 $ 1,345 $ 3,595 37 $ 5,540 $ 5,443 For the six months ended June 30, 2019 Commercial loan portfolio: Commercial $ 388 $ 12 $ 867 $ 6,892 24 $ 8,386 $ 8,159 Commercial real estate: Owner-occupied 2,863 103 297 1,360 9 4,649 4,623 Non-owner occupied — — 140 — 1 154 140 Vacant land 22 — — 244 2 293 266 Total commercial real estate 2,885 103 437 1,604 12 5,096 5,029 Total Commercial 3,273 115 1,304 8,496 36 13,482 13,188 Consumer loan portfolio: Residential mortgage 248 75 330 — 6 679 653 Consumer installment 61 65 13 — 17 149 139 Home equity 275 19 168 — 11 482 462 Total Consumer 584 159 511 — 34 1,310 1,254 Total loans $ 3,857 $ 274 $ 1,815 $ 8,496 70 $ 14,792 $ 14,442 Concession type (Dollars in thousands) Principal Principal Interest Forbearance Total Pre-modification recorded investment Post-modification recorded investment For the three months ended June 30, 2018 Commercial loan portfolio: Commercial $ 740 $ — $ 218 $ — 13 $ 969 $ 958 Commercial real estate: Owner-occupied 370 — 162 31 6 575 563 Total commercial real estate 370 — 162 31 6 575 563 Total commercial 1,110 — 380 31 19 1,544 1,521 Consumer loan portfolio: Residential mortgage 131 40 39 — 3 215 210 Consumer installment 15 44 10 — 9 72 69 Home equity 81 — 87 — 4 171 168 Total consumer 227 84 136 — 16 458 447 Total loans $ 1,337 $ 84 $ 516 $ 31 35 $ 2,002 $ 1,968 For the six months ended June 30, 2018 Commercial loan portfolio: Commercial $ 1,643 $ — $ 1,283 $ 261 31 $ 3,204 $ 3,187 Commercial real estate: Owner-occupied 370 — 888 513 8 1,783 1,771 Non-owner occupied 68 — — — 1 74 68 Total commercial real estate 438 — 888 513 9 1,857 1,839 Total Commercial 2,081 — 2,171 774 40 5,061 5,026 Consumer loan portfolio: Residential mortgage 269 40 39 — 7 357 348 Consumer installment 86 67 38 — 25 200 191 Home equity 266 — 115 — 9 424 381 Total Consumer 621 107 192 — 41 981 920 Total loans $ 2,702 $ 107 $ 2,363 $ 774 81 $ 6,042 $ 5,946 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, 2019 and December 31, 2018 : (Dollars in thousands) Accruing TDRs Nonaccrual TDRs Total Jun |