Loans and Leases | 5. LOANS AND LEASES Following is a summary of loans and leases, net of unearned income: (in thousands) Originated Loans and Leases Acquired Loans Total Loans and September 30, 2016 Commercial real estate $ 3,918,575 $ 1,448,716 $ 5,367,291 Commercial and industrial 2,696,210 392,195 3,088,405 Commercial leases 195,271 — 195,271 Total commercial loans and leases 6,810,056 1,840,911 8,650,967 Direct installment 1,750,189 87,206 1,837,395 Residential mortgages 1,355,476 424,391 1,779,867 Indirect installment 1,150,575 237 1,150,812 Consumer lines of credit 1,088,807 214,416 1,303,223 Other 51,182 — 51,182 Total loans and leases, net of unearned income $ 12,206,285 $ 2,567,161 $ 14,773,446 (in thousands) Originated Loans and Leases Acquired Loans Total Loans and December 31, 2015 Commercial real estate $ 3,531,146 $ 577,910 $ 4,109,056 Commercial and industrial 2,534,351 67,371 2,601,722 Commercial leases 204,553 — 204,553 Total commercial loans and leases 6,270,050 645,281 6,915,331 Direct installment 1,660,717 45,919 1,706,636 Residential mortgages 1,044,689 351,282 1,395,971 Indirect installment 996,175 554 996,729 Consumer lines of credit 1,021,830 115,425 1,137,255 Other 38,518 — 38,518 Total loans and leases, net of unearned income $ 11,031,979 $ 1,158,461 $ 12,190,440 The loans and leases portfolio categories are comprised of the following: • Commercial real estate includes both owner-occupied and non-owner-occupied loans secured by commercial properties; • Commercial and industrial includes loans to business that are not secured by real estate; • Commercial leases are made for new or used equipment; • Direct installment is comprised of fixed-rate, closed-end consumer loans for personal, family or household use, such as home equity loans and automobile loans; • Residential mortgages consist of conventional and jumbo mortgage loans for non-commercial properties; • Indirect installment is comprised of loans originated by third parties and underwritten by the Corporation, primarily automobile loans; • Consumer lines of credit include home equity lines of credit (HELOC) and consumer lines of credit that are either unsecured or secured by collateral other than home equity; and • Other is comprised primarily of credit cards, mezzanine loans and student loans. The loans and leases portfolio consists principally of loans to individuals and small- and medium-sized businesses within the Corporation’s primary market area of Pennsylvania, eastern Ohio, Maryland and northern West Virginia. The loans and leases portfolio also contains Regency consumer finance loans to individuals in Pennsylvania, Ohio, Tennessee and Kentucky. Due to the relative size of the Regency consumer finance loan portfolio, these loans are not segregated from other consumer loans. The following table shows certain information relating to the Regency consumer finance loans: September 30, December 31, (dollars in thousands) 2016 2015 Regency consumer finance loans $ 182,527 $ 186,162 Percent of total loans and leases 1.2 % 1.5 % The following table shows certain information relating to commercial real estate loans: September 30, December 31, (dollars in thousands) 2016 2015 Commercial construction loans $ 454,239 $ 352,322 Percent of total loans and leases 3.1 % 2.9 % Commercial real estate: Percent owner-occupied 36.3 % 38.1 % Percent non-owner-occupied 63.7 % 61.9 % Acquired Loans All acquired loans were initially recorded at fair value at the acquisition date. Refer to the Acquired Loans section in Note 1 of the Corporation’s 2015 Annual Report on Form 10-K for a discussion of ASC 310-20 and ASC 310-30. The outstanding balance and the carrying amount of acquired loans included in the consolidated balance sheets are as follows: (in thousands) September 30, 2016 December 31, Accounted for under ASC 310-30: Outstanding balance $ 2,534,180 $ 1,258,418 Carrying amount 2,206,380 1,011,139 Accounted for under ASC 310-20: Outstanding balance 372,419 146,161 Carrying amount 354,400 140,595 Total acquired loans: Outstanding balance 2,906,599 1,404,579 Carrying amount 2,560,780 1,151,734 The carrying amount of purchased credit impaired loans included in the table above totaled $2.9 million at September 30, 2016 and $5.9 million at December 31, 2015, representing less than 1% of the carrying amount of total acquired loans as of each date. The following table provides changes in accretable yield for all acquired loans accounted for under ASC 310-30. Loans accounted for under ASC 310-20 are not included in this table. Nine Months Ended September 30, (in thousands) 2016 2015 Balance at beginning of period $ 256,120 $ 331,899 Acquisitions 308,311 — Reduction due to unexpected early payoffs (60,920 ) (35,601 ) Reclass from non-accretable difference 66,807 24,489 Disposals/transfers (343 ) (509 ) Accretion (77,180 ) (46,207 ) Balance at end of period $ 492,795 $ 274,071 Cash flows expected to be collected on acquired loans are estimated quarterly by incorporating several key assumptions similar to the initial estimate of fair value. These key assumptions include probability of default and the amount of actual prepayments after the acquisition date. Prepayments affect the estimated life of the loans and could change the amount of interest income, and possibly principal expected to be collected. In reforecasting future estimated cash flows, credit loss expectations are adjusted as necessary. Improved cash flow expectations for loans or pools are recorded first as a reversal of previously recorded impairment, if any, and then as an increase in prospective yield when all previously recorded impairment has been recaptured. Decreases in expected cash flows are recognized as an impairment through a provision for loan loss and an increase to the allowance for acquired loans. During the nine months ended September 30, 2016, there was an overall improvement in cash flow expectations which resulted in a net reclassification of $66.8 million from the non-accretable difference to accretable yield. This reclassification was $24.5 million for the nine months ended September 30, 2015. The reclassification from the non-accretable difference to the accretable yield results in prospective yield adjustments on the loan pools. The following table reflects amounts at acquisition for all purchased loans subject to ASC 310-30 (impaired and non-impaired loans with deteriorated credit quality) acquired from METR and Fifth Third. (in thousands) Acquired Acquired Performing Loans Total Contractually required cash flows at acquisition $ 99,611 $ 2,191,476 $ 2,291,087 Non-accretable difference (expected losses and foregone interest) (52,995 ) (264,233 ) (317,228 ) Cash flows expected to be collected at acquisition 46,616 1,927,243 1,973,859 Accretable yield (1,063 ) (307,248 ) (308,311 ) Basis in acquired loans at acquisition $ 45,553 $ 1,619,995 $ 1,665,548 In addition, loans purchased in the METR acquisition and Fifth Third branch purchase that were not subject to ASC 310-30 had the following balances at the date of acquisition: fair value of $292.3 million; unpaid principal balance of $315.1 million; and contractual cash flows not expected to be collected of $103.0 million. Credit Quality Management monitors the credit quality of the Corporation’s loan and lease portfolio. Measurement of delinquency and past due status is based on the contractual terms of each loan. Non-performing loans include non-accrual loans and non-performing troubled debt restructurings (TDRs). Past due loans are reviewed on a monthly basis to identify loans for non-accrual status. The Corporation places originated loans on non-accrual status and discontinues interest accruals on originated loans generally when principal or interest is due and has remained unpaid for a certain number of days or when the principal and interest is deemed uncollectible, unless the loan is both well secured and in the process of collection. Commercial loans are placed on non-accrual at 90 days, installment loans are placed on non-accrual at 120 days and residential mortgages and consumer lines of credit are generally placed on non-accrual at 180 days. When a loan is placed on non-accrual status, all unpaid interest is reversed. Non-accrual loans may not be restored to accrual status until all delinquent principal and interest have been paid and the ultimate ability to collect the remaining principal and interest is reasonably assured. TDRs are loans in which the borrower has been granted a concession on the interest rate or the original repayment terms due to financial distress. Following is a summary of non-performing assets: (dollars in thousands) September 30, 2016 December 31, Non-accrual loans $ 74,828 $ 49,897 Troubled debt restructurings 20,638 22,028 Total non-performing loans 95,466 71,925 Other real estate owned (OREO) 40,523 38,918 Total non-performing assets $ 135,989 $ 110,843 Asset quality ratios: Non-performing loans / total loans and leases 0.65 % 0.59 % Non-performing loans + OREO / total loans and leases + OREO 0.92 % 0.91 % Non-performing assets / of total assets 0.63 % 0.63 % The carrying value of residential OREO held as a result of obtaining physical possession upon completion of a foreclosure or through completion of a deed in lieu of foreclosure totaled $5.1 million at September 30, 2016 and $5.2 million at December 31, 2015. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process at September 30, 2016 and December 31, 2015 totaled $9.5 million and $11.7 million, respectively. The following tables provide an analysis of the aging of the Corporation’s past due loans by class, segregated by loans and leases originated and loans acquired: (in thousands) 30-89 Days Past ³ 90 Days Non- Accrual Total Past Due Current Total Loans and Originated Loans and Leases September 30, 2016 Commercial real estate $ 7,971 $ 1 $ 18,186 $ 26,158 $ 3,892,417 $ 3,918,575 Commercial and industrial 5,479 3 36,174 41,656 2,654,554 2,696,210 Commercial leases 1,106 — 3,359 4,465 190,806 195,271 Total commercial loans and leases 14,556 4 57,719 72,279 6,737,777 6,810,056 Direct installment 9,003 3,502 6,368 18,873 1,731,316 1,750,189 Residential mortgages 9,550 2,454 3,106 15,110 1,340,366 1,355,476 Indirect installment 6,468 467 1,741 8,676 1,141,899 1,150,575 Consumer lines of credit 3,467 408 1,564 5,439 1,083,368 1,088,807 Other 27 71 1,000 1,098 50,084 51,182 Total originated loans and leases $ 43,071 $ 6,906 $ 71,498 $ 121,475 $ 12,084,810 $ 12,206,285 December 31, 2015 Commercial real estate $ 11,006 $ 1 $ 23,503 $ 34,510 $ 3,496,636 $ 3,531,146 Commercial and industrial 5,409 3 14,382 19,794 2,514,557 2,534,351 Commercial leases 924 — 659 1,583 202,970 204,553 Total commercial loans and leases 17,339 4 38,544 55,887 6,214,163 6,270,050 Direct installment 9,254 3,813 4,806 17,873 1,642,844 1,660,717 Residential mortgages 8,135 1,470 2,882 12,487 1,032,202 1,044,689 Indirect installment 9,472 379 1,361 11,212 984,963 996,175 Consumer lines of credit 2,410 1,189 1,181 4,780 1,017,050 1,021,830 Other 73 169 — 242 38,276 38,518 Total originated loans and leases $ 46,683 $ 7,024 $ 48,774 $ 102,481 $ 10,929,498 $ 11,031,979 (in thousands) 30-89 Days Past Due ³ 90 Days and Still Non- Accrual Total Past Due (1) (2) Current Discount Total Loans Acquired Loans September 30, 2016 Commercial real estate $ 14,576 $ 25,048 $ 1,754 $ 41,378 $ 1,489,415 $ (82,077 ) $ 1,448,716 Commercial and industrial 1,283 2,941 1,153 5,377 418,122 (31,304 ) 392,195 Total commercial loans 15,859 27,989 2,907 46,755 1,907,537 (113,381 ) 1,840,911 Direct installment 2,712 947 — 3,659 81,332 2,215 87,206 Residential mortgages 8,224 12,625 — 20,849 442,023 (38,481 ) 424,391 Indirect installment 4 3 — 7 169 61 237 Consumer lines of credit 2,288 1,020 423 3,731 215,455 (4,770 ) 214,416 Total acquired loans $ 29,087 $ 42,584 $ 3,330 $ 75,001 $ 2,646,516 $ (154,356 ) $ 2,567,161 December 31, 2015 Commercial real estate $ 6,399 $ 12,752 $ 931 $ 20,082 $ 593,128 $ (35,300 ) $ 577,910 Commercial and industrial 1,065 616 103 1,784 72,037 (6,450 ) 67,371 Total commercial loans 7,464 13,368 1,034 21,866 665,165 (41,750 ) 645,281 Direct installment 837 659 — 1,496 43,596 827 45,919 Residential mortgages 5,871 15,136 — 21,007 366,742 (36,467 ) 351,282 Indirect installment 32 9 — 41 571 (58 ) 554 Consumer lines of credit 830 546 89 1,465 117,443 (3,483 ) 115,425 Total acquired loans $ 15,034 $ 29,718 $ 1,123 $ 45,875 $ 1,193,517 $ (80,931 ) $ 1,158,461 (1) Past due information for acquired loans is based on the contractual balance outstanding at September 30, 2016 and December 31, 2015. (2) Acquired loans are considered performing upon acquisition, regardless of whether the customer is contractually delinquent, as long as the Corporation can reasonably estimate the timing and amount of expected cash flows on such loans. In these instances, the Corporation does not consider acquired contractually delinquent loans to be non-accrual or non-performing and continues to recognize interest income on these loans using the accretion method. Acquired loans are considered non-accrual or non-performing when, due to credit deterioration or other factors, the Corporation determines it is no longer able to reasonably estimate the timing and amount of expected cash flows on such loans. The Corporation does not recognize interest income on acquired loans considered non-accrual or non-performing. The Corporation utilizes the following categories to monitor credit quality within its commercial loan and lease portfolio: Rating Category Definition Pass in general, the condition and performance of the borrower is satisfactory or better Special Mention in general, the condition of the borrower has deteriorated, requiring an increased level of monitoring Substandard in general, the condition and performance of the borrower has significantly deteriorated and could further deteriorate if deficiencies are not corrected Doubtful in general, the condition of the borrower has significantly deteriorated and the collection in full of both principal and interest is highly questionable or improbable The use of these internally assigned credit quality categories within the commercial loan and lease portfolio permits management’s use of transition matrices to estimate a quantitative portion of credit risk. The Corporation’s internal credit risk grading system is based on past experiences with similarly graded loans and leases and conforms with regulatory categories. In general, loan and lease risk ratings within each category are reviewed on an ongoing basis according to the Corporation’s policy for each class of loans and leases. Each quarter, management analyzes the resulting ratings, as well as other external statistics and factors such as delinquency, to track the migration performance of the commercial loan and lease portfolio. Loans and leases within the Pass credit category or that migrate toward the Pass credit category generally have a lower risk of loss compared to loans and leases that migrate toward the Substandard or Doubtful credit categories. Accordingly, management applies higher risk factors to Substandard and Doubtful credit categories. The following tables present a summary of the Corporation’s commercial loans and leases by credit quality category, segregated by loans and leases originated and loans acquired: Commercial Loan and Lease Credit Quality Categories (in thousands) Pass Special Substandard Doubtful Total Originated Loans and Leases September 30, 2016 Commercial real estate $ 3,737,877 $ 120,184 $ 59,964 $ 550 $ 3,918,575 Commercial and industrial 2,466,207 85,586 135,322 9,095 2,696,210 Commercial leases 186,357 4,446 4,468 — 195,271 Total originated commercial loans and leases $ 6,390,441 $ 210,216 $ 199,754 $ 9,645 $ 6,810,056 December 31, 2015 Commercial real estate $ 3,416,527 $ 52,887 $ 61,411 $ 321 $ 3,531,146 Commercial and industrial 2,335,103 109,539 87,380 2,329 2,534,351 Commercial leases 198,207 2,447 3,899 — 204,553 Total originated commercial loans and leases $ 5,949,837 $ 164,873 $ 152,690 $ 2,650 $ 6,270,050 Acquired Loans September 30, 2016 Commercial real estate $ 1,249,051 $ 75,085 $ 123,560 $ 1,020 $ 1,448,716 Commercial and industrial 336,545 13,110 42,024 516 392,195 Total acquired commercial loans $ 1,585,596 $ 88,195 $ 165,584 $ 1,536 $ 1,840,911 December 31, 2015 Commercial real estate $ 464,162 $ 47,619 $ 66,129 — $ 577,910 Commercial and industrial 56,446 3,182 7,743 — 67,371 Total acquired commercial loans $ 520,608 $ 50,801 $ 73,872 — $ 645,281 Credit quality information for acquired loans is based on the contractual balance outstanding at September 30, 2016 and December 31, 2015. The increase in acquired loans in 2016 relates to the METR acquisition completed on February 13, 2016. The Corporation uses delinquency transition matrices within the consumer and other loan classes to enable management to estimate a quantitative portion of credit risk. Each month, management analyzes payment and volume activity, FICO scores and other external factors such as unemployment, to determine how consumer loans are performing. Following is a table showing originated consumer loans by payment status: Originated Consumer Loan Credit Quality by Payment Status (in thousands) Performing Non-Performing Total September 30, 2016 Direct installment $ 1,735,117 $ 15,072 $ 1,750,189 Residential mortgages 1,342,077 13,399 1,355,476 Indirect installment 1,148,649 1,926 1,150,575 Consumer lines of credit 1,086,167 2,640 1,088,807 Other 51,182 — 51,182 Total originated consumer loans $ 5,363,192 $ 33,037 $ 5,396,229 December 31, 2015 Direct installment $ 1,646,925 $ 13,792 $ 1,660,717 Residential mortgages 1,031,926 12,763 1,044,689 Indirect installment 994,661 1,514 996,175 Consumer lines of credit 1,019,783 2,047 1,021,830 Other 38,518 — 38,518 Total originated consumer loans $ 4,731,813 $ 30,116 $ 4,761,929 Loans and leases are designated as impaired when, in the opinion of management, based on current information and events, the collection of principal and interest in accordance with the loan and lease contract is doubtful. Typically, the Corporation does not consider loans and leases for impairment unless a sustained period of delinquency (i.e., 90-plus days) is noted or there are subsequent events that impact repayment probability (i.e., negative financial trends, bankruptcy filings, imminent foreclosure proceedings, etc.). Impairment is evaluated in the aggregate for consumer installment loans, residential mortgages, consumer lines of credit and commercial loan and lease relationships less than $500,000 based on loan and lease segment loss given default. For commercial loan relationships greater than or equal to $500,000, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using a market interest rate or at the fair value of collateral if repayment is expected solely from the collateral. Consistent with the Corporation’s existing method of income recognition for loans and leases, interest, except for those loans classified as non-accrual, is recognized as income using the accrual method. Impaired loans, or portions thereof, are charged off when deemed uncollectible. Following is a summary of information pertaining to originated loans and leases considered to be impaired, by class of loan and lease: (in thousands) Unpaid Principal Balance Recorded Investment Reserve Recorded Investment Specific Reserve Total Recorded Investment Specific Average Recorded Investment At or for the Nine Months Ended September 30, 2016 Commercial real estate $ 20,836 $ 15,057 $ 3,214 $ 18,271 $ 550 $ 21,677 Commercial and industrial 41,296 18,654 17,028 35,682 9,095 31,603 Commercial leases 3,359 3,359 — 3,359 — 1,514 Total commercial loans and leases 65,491 37,070 20,242 57,312 9,645 54,794 Direct installment 16,465 15,072 — 15,072 — 14,972 Residential mortgages 14,049 13,399 — 13,399 — 13,164 Indirect installment 4,668 1,926 — 1,926 — 1,846 Consumer lines of credit 3,413 2,640 — 2,640 — 2,825 Total $ 104,086 $ 70,107 $ 20,242 $ 90,349 $ 9,645 $ 87,601 At or for the Year Ended December 31, 2015 Commercial real estate $ 33,780 $ 24,423 $ 772 $ 25,195 $ 321 $ 26,143 Commercial and industrial 15,860 9,176 5,543 14,719 2,329 12,298 Commercial leases 659 659 — 659 — 747 Total commercial loans and leases 50,299 34,258 6,315 40,573 2,650 39,188 Direct installment 14,679 13,792 — 13,792 — 13,267 Residential mortgages 13,394 12,763 — 12,763 — 12,896 Indirect installment 3,745 1,514 — 1,514 — 1,401 Consumer lines of credit 2,408 2,047 — 2,047 — 2,198 Total $ 84,525 $ 64,374 $ 6,315 $ 70,689 $ 2,650 $ 68,950 Interest income is generally no longer recognized once a loan becomes impaired. The above tables do not reflect the additional allowance for credit losses relating to acquired loans in the following pools and categories: (in thousands) September 30, December 31, Commercial real estate $ 3,631 $ 3,073 Commercial and industrial 493 695 Total commercial loans 4,124 3,768 Direct installment 1,110 1,557 Residential mortgages 659 659 Indirect installment 221 221 Consumer lines of credit 267 522 Total $ 6,381 $ 6,727 Troubled Debt Restructurings TDRs are loans whose contractual terms have been modified in a manner that grants a concession to a borrower experiencing financial difficulties. TDRs typically result from loss mitigation activities and could include the extension of a maturity date, interest rate reduction, principal forgiveness, deferral or decrease in payments for a period of time and other actions intended to minimize the economic loss and to avoid foreclosure or repossession of collateral. Following is a summary of the payment status of originated TDRs: (in thousands) September 30, 2016 December 31, Accruing: Performing $ 17,030 $ 15,165 Non-performing 20,638 22,028 Non-accrual 9,307 8,307 Total TDRs $ 46,975 $ 45,500 TDRs that are accruing and performing include loans that met the criteria for non-accrual of interest prior to restructuring for which the Corporation can reasonably estimate the timing and amount of the expected cash flows on such loans and for which the Corporation expects to fully collect the new carrying value of the loans. During the nine months ended September 30, 2016, the Corporation returned to performing status $4.9 million in restructured residential mortgage loans that have consistently met their modified obligations for more than nine months. TDRs that are accruing and non-performing are comprised of consumer loans that have not demonstrated a consistent repayment pattern on the modified terms for more than nine months, however it is expected that the Corporation will collect all future principal and interest payments. TDRs that are on non-accrual are not placed on accruing status until all delinquent principal and interest have been paid and the ultimate collectability of the remaining principal and interest is reasonably assured. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, and may result in potential incremental losses which are factored into the allowance for credit losses. Excluding purchased impaired loans, commercial loans over $500,000 whose terms have been modified in a TDR are generally placed on non-accrual, individually analyzed and measured for estimated impairment based on the fair value of the underlying collateral. The Corporation’s allowance for credit losses included specific reserves for commercial TDRs and pooled reserves for individual loans under $500,000 based on loan segment loss given default. Upon default, the amount of the recorded investment in the TDR in excess of the fair value of the collateral, less estimated selling costs, is generally considered a confirmed loss and is charged-off against the allowance for credit losses. The reserve for commercial TDRs included in the allowance for credit losses are as follows: (in thousands) September 30, 2016 December 31, Specific reserves $ 608 $ 300 Pooled reserves for individual loans under $500 302 929 All other classes of loans, which are primarily secured by residential properties, whose terms have been modified in a TDR are pooled and measured for estimated impairment based on the expected net present value of the estimated future cash flows of the pool. The Corporation’s allowance for credit losses included pooled reserves for these classes of loans of $3.6 million and $3.5 million at September 30, 2016 and December 31, 2015, respectively. Upon default of an individual loan, the Corporation’s charge-off policy is followed accordingly for that class of loan. The majority of TDRs are the result of interest rate concessions for a limited period of time. Following is a summary of originated loans, by class, that have been restructured: Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (dollars in thousands) Number of Contracts Pre- Modification Recorded Investment Post- Outstanding Recorded Investment Number of Contracts Pre- Modification Recorded Investment Post- Outstanding Recorded Investment Commercial real estate — $ — $ — 4 $ 778 $ 737 Commercial and industrial 3 1,504 1,504 3 1,727 1,504 Total commercial loans 3 1,504 1,504 7 2,505 2,241 Direct installment 123 1,029 1,018 388 5,051 4,749 Residential mortgages 9 508 532 36 1,946 1,893 Indirect installment 9 23 22 14 40 40 Consumer lines of credit 20 395 364 56 878 837 Total 164 $ 3,459 $ 3,440 501 $ 10,420 $ 9,760 Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 (dollars in thousands) Number of Contracts Pre- Modification Recorded Investment Post- Outstanding Recorded Investment Number of Contracts Pre- Modification Recorded Investment Post- Outstanding Recorded Investment Commercial real estate — $ — $ — 2 $ 312 $ 168 Commercial and industrial — — — 1 5 4 Total commercial loans — — — 3 317 172 Direct installment 121 1,757 1,726 361 5,064 4,835 Residential mortgages 10 232 233 31 1,048 1,074 Indirect installment 3 13 10 13 43 40 Consumer lines of credit 10 146 143 40 666 610 Total 144 $ 2,148 $ 2,112 448 $ 7,138 $ 6,731 Following is a summary of originated TDRs, by class, for which there was a payment default, excluding loans that were either charged-off or cured by period end. Default occurs when a loan is 90 days or more past due and is within 12 months of restructuring. Three Months Ended September 30, 2016 Nine Months Ended September 30, 2016 (dollars in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Commercial real estate — $ — — $ — Commercial and industrial — — — — Total commercial loans — — — — Direct installment 26 408 76 377 Residential mortgages 5 189 7 282 Indirect installment 6 19 12 19 Consumer lines of credit 1 25 3 91 Total 38 $ 641 98 $ 769 Three Months Ended September 30, 2015 Nine Months Ended September 30, 2015 (dollars in thousands) Number of Contracts Recorded Investment Number of Contracts Recorded Investment Commercial real estate — $ — — $ — Commercial and industrial — — 1 204 Total commercial loans — — 1 204 Direct installment 22 87 75 254 Residential mortgages 2 75 5 179 Indirect installment 1 6 6 12 Consumer lines of credit — — 1 8 Other — — — — Total 25 $ 168 88 $ 657 |