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, 2016 and 2015 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, 2016
Commercial loan portfolio:
Commercial	$	1,901,526	$	1,315,774	$	3,217,300
Commercial real estate	1,921,799		2,051,341		3,973,140
Real estate construction and land development	281,724		122,048		403,772
Subtotal	4,105,049		3,489,163		7,594,212
Consumer loan portfolio:
Residential mortgage	1,475,342		1,611,132		3,086,474
Consumer installment	1,282,588		151,296		1,433,884
Home equity	595,422		280,787		876,209
Subtotal	3,353,352		2,043,215		5,396,567
Total loans	$	7,458,401	$	5,532,378	$	12,990,779	⁽²⁾
December 31, 2015
Commercial loan portfolio:
Commercial	$	1,521,515	$	384,364	$	1,905,879
Commercial real estate	1,424,059		688,103		2,112,162
Real estate construction and land development	185,147		46,929		232,076
Subtotal	3,130,721		1,119,396		4,250,117
Consumer loan portfolio:
Residential mortgage	1,216,975		212,661		1,429,636
Consumer installment	869,426		8,031		877,457
Home equity	590,812		123,125		713,937
Subtotal	2,677,213		343,817		3,021,030
Total loans	$	5,807,934	$	1,463,213	$	7,271,147	⁽²⁾

(1) Acquired loans are accounted for under ASC 310-30.

(2) Reported net of deferred costs totaling $14.8 million and $10.7 million at December 31, 2016 and 2015, respectively.

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 $23.9 million at December 31, 2016 and $21.7 million at December 31, 2015. During 2016 and 2015, there were $33.8 million and $33.3 million, respectively, of new loans and other additions, while repayments and other reductions totaled $31.6 million and $42.8 million, respectively.

Loans held-for-sale, comprised of fixed-rate residential mortgage loans, were $81.8 million at December 31, 2016 and $10.3 million at December 31, 2015. The Corporation sold loans totaling $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 $2.0 million requiring group loan authority approval, except for six executive and senior officers who have varying loan limits exceeding $2.0 million and up to $3.5 million. With respect to the group loan authorities, Chemical Bank has various regional loan committees hat meet weekly to consider loan ranging in amounts from $2.0 million to $5.0 million, and a senior loan committee, consisting of certain executive and senior officers, that meets weekly to consider loans ranging in amounts from $5.0 million to $10.0 million, depending on risk rating and credit action required. A directors' loan committee of Chemical Bank, consisting of eight independent members of the board of directors of Chemical Bank, the chief executive officer of Chemical Bank and the chief credit officer of Chemical Bank, meets bi-weekly to consider loans in amounts over $10.0 million, and certain loans under $10.0 million depending on a loan's risk rating and credit action required. Loans over $25.0 million require the approval of the board of directors of Chemical Bank.

The majority of the Corporation's consumer loan portfolio is comprised of secured loans that are relatively small. The Corporation's consumer loan portfolio has a centralized approval process which utilizes standardized underwriting criteria. The ongoing measurement of credit quality of the consumer loan portfolio is largely done on an exception basis. If payments are made on schedule, as agreed, then no further monitoring is performed. However, if delinquency occurs, the delinquent loans are turned over to the Corporation's collection department for resolution, resulting in repossession or foreclosure if payments are not brought current. Credit quality for the entire consumer loan portfolio is measured by the periodic delinquency rate, nonaccrual amounts and actual losses incurred.

Loans in the commercial loan portfolio tend to be larger and more complex than those in the consumer loan portfolio, and therefore, are subject to more intensive monitoring. All loans in the commercial loan portfolio have an assigned relationship manager, and most borrowers provide periodic financial and operating information that allows the relationship managers to stay abreast of credit quality during the life of the loans. The risk ratings of loans in the commercial loan portfolio are reassessed at least annually, with loans below an acceptable risk rating reassessed more frequently and reviewed by various loan committees within the Corporation at least quarterly.

The Corporation maintains a centralized independent loan review function that monitors the approval process and ongoing asset quality of the loan portfolio, including the accuracy of loan grades. The Corporation also maintains an independent appraisal review function that participates in the review of all appraisals obtained by the Corporation for loans in the commercial loan portfolio.

Credit Quality Indicators

Commercial Loan Portfolio

Risk categories for the Corporation's commercial loan portfolio establish the credit quality of a borrower by measuring liquidity, debt capacity, coverage and payment behavior as shown in the borrower's financial statements. The risk categories also measure the quality of the borrower's management and the repayment support offered by any guarantors. Risk categories for the Corporation's commercial loan portfolio are described as follows:

Pass: Includes all loans without weaknesses or potential weaknesses identified in the categories of special mention, substandard or doubtful.

Special Mention: Loans with potential credit weakness or credit deficiency, which, if not corrected, pose an unwarranted financial risk that could weaken the loan by adversely impacting the future repayment ability of the borrower.

Substandard: Loans with a well-defined weakness, or weaknesses, such as loans to borrowers who may be experiencing losses from operations or inadequate liquidity of a degree and duration that jeopardizes the orderly repayment of the loan. Substandard loans also are distinguished by the distinct possibility of loss in the future if these weaknesses are not corrected.

Doubtful: Loans with all the characteristics of a loan classified as Substandard, with the added characteristic that credit weaknesses make collection in full highly questionable and improbable.

The following schedule presents the recorded investment of loans in the commercial loan portfolio by credit risk categories at December 31, 2016 and 2015:



(Dollars in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
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
December 31, 2015
Originated Portfolio:
Commercial	$	1,418,301	$	34,727	$	66,392	$	2,095	$	1,521,515
Commercial real estate	1,341,202		31,036		51,821		—		1,424,059
Real estate construction and land development	183,323		180		1,644		—		185,147
Subtotal	2,942,826		65,943		119,857		2,095		3,130,721
Acquired Portfolio:
Commercial	340,782		28,321		15,261		—		384,364
Commercial real estate	629,430		23,926		34,747		—		688,103
Real estate construction and land development	41,683		2,556		2,690		—		46,929
Subtotal	1,011,895		54,803		52,698		—		1,119,396
Total	$	3,954,721	$	120,746	$	172,555	$	2,095	$	4,250,117

Consumer Loan Portfolio

The Corporation evaluates the credit quality of loans in the consumer loan portfolio based on the performing or nonperforming status of the loan. Loans in the consumer loan portfolio that are performing in accordance with original contractual terms and are less than 90 days past due and accruing interest are considered to be in a performing status, while those that are in nonaccrual status, contractually past due 90 days or more as to interest or principal payments 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, 2016 and 2015:



(Dollars in thousands)	Residential mortgage		Consumer installment		Home equity		Total consumer
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
December 31, 2015
Originated Portfolio:
Performing	$	1,211,418	$	868,975	$	588,833	$	2,669,226
Nonperforming	5,557		451		1,979		7,987
Subtotal	1,216,975		869,426		590,812		2,677,213
Acquired Loans	212,661		8,031		123,125		343,817
Total	$	1,429,636	$	877,457	$	713,937	$	3,021,030

Nonperforming 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)	2016		2015
Nonperforming assets
Nonaccrual loans:
Commercial	$	13,178	$	28,554
Commercial real estate	19,877		25,163
Real estate construction and land development	80		521
Residential mortgage	6,969		5,557
Consumer installment	879		451
Home equity	3,351		1,979
Total nonaccrual loans	44,334		62,225
Other real estate owned and repossessed assets	17,187		9,935
Total nonperforming assets	$	61,521	$	72,160
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		364
Commercial real estate	277		254
Residential mortgage	—		402
Home equity	995		1,267
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	$	1,283	$	2,287

The Corporation's nonaccrual loans at December 31, 2016 and 2015 included $30.5 million and $35.9 million, respectively, of nonaccrual TDRs.

There was no interest income recognized on nonaccrual loans during 2016, 2015 and 2014 while the loans were in nonaccrual status. During 2016, 2015 and 2014, the Corporation recognized $0.4 million, $0.9 million and $0.5 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 $2.9 million in 2016, $3.2 million in 2015 and $3.3 million in 2014. During 2016, 2015 and 2014, the Corporation recognized interest income of $3.9 million, $3.9 million and $3.6 million, respectively, on performing TDRs.

The Corporation had $7.3 million of residential mortgage loans that were in the process of foreclosure at December 31, 2016, compared to $2.9 million at December 31, 2015.

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, 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
December 31, 2015
Originated Portfolio:
Commercial	$	9,393	$	5,243	$	364	$	15,000	$	1,506,515	$	1,521,515	$	364
Commercial real estate	6,941		2,262		254		9,457		1,414,602		1,424,059		254
Real estate construction and land development	596		—		—		596		184,551		185,147		—
Residential mortgage	7,475		1,170		402		9,047		1,207,928		1,216,975		402
Consumer installment	3,347		741		—		4,088		865,338		869,426		—
Home equity	2,075		1,113		1,267		4,455		586,357		590,812		1,267
Total	$	29,827	$	10,529	$	2,287	$	42,643	$	5,765,291	$	5,807,934	$	2,287

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, 2016 and December 31, 2015:



(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	71,284		81,808		8,762
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		—
Home equity	3,351		3,351		—
Total	$	106,869	$	124,058	$	8,762



(Dollars in thousands)	Recorded investment		Unpaid principal balance		Related valuation allowance
December 31, 2015
Impaired loans with a valuation allowance:
Commercial	$	18,898	$	19,426	$	5,700
Commercial real estate	4,448		4,688		497
Residential mortgage	21,037		21,037		192
Subtotal	44,383		45,151		6,389
Impaired loans with no related valuation allowance:
Commercial	27,304		32,395		—
Commercial real estate	48,747		59,949		—
Real estate construction and land development	982		1,062		—
Residential mortgage	5,557		5,557		—
Consumer installment	451		451		—
Home equity	1,979		1,979		—
Subtotal	85,020		101,393		—
Total impaired loans:
Commercial	46,202		51,821		5,700
Commercial real estate	53,195		64,637		497
Real estate construction and land development	982		1,062		—
Residential mortgage	26,594		26,594		192
Consumer installment	451		451		—
Home equity	1,979		1,979		—
Total	$	129,403	$	146,544	$	6,389

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, 2016, 2015 and 2014 and the respective interest income amounts recognized:



	For the years ended December 31,
	2016				2015				2014
(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	$	7,829	$	—	$	9,511	$	—	$	2,117	$	—
Commercial real estate	5,658		—		2,918		—		3,699		—
Real estate construction and land development	19		—		—		—		—		—
Residential mortgage	23,958		1,285		20,661		1,312		19,740		1,252
Consumer installment	359		—		—		—		—		—
Home equity	1,759		—		—		—		—		—
Subtotal	37,464		1,285		33,090		1,312		25,556		1,252
Impaired loans with no related valuation allowance:
Commercial	29,559		1,343		27,778		1,005		32,895		961
Commercial real estate	41,646		1,236		50,079		1,547		46,344		1,342
Real estate construction and land development	585		22		889		25		1,831		3
Residential mortgage	1,519		—		6,027		—		6,783		—
Consumer installment	—		—		448		—		592		—
Home equity	555		—		1,872		—		2,118		—
Subtotal	73,864		2,601		87,093		2,577		90,563		2,306
Total impaired loans:
Commercial	37,388		1,343		37,289		1,005		35,012		961
Commercial real estate	47,304		1,236		52,997		1,547		50,043		1,342
Real estate construction and land development	604		22		889		25		1,831		3
Residential mortgage	25,477		1,285		26,688		1,312		26,523		1,252
Consumer installment	359		—		448		—		592		—
Home equity	2,314		—		1,872		—		2,118		—
Total	$	113,446	$	3,886	$	120,183	$	3,889	$	116,119	$	3,558

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 $62.5 million and $67.2 million at December 31, 2016 and December 31, 2015, 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, 2016, 2015 and 2014 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 deferral		Principal reduction		A/B Note Restructure⁽¹⁾		Interest rate		Forbearance agreement		Total number of loans	Pre- modification recorded investment		Post- modification recorded investment
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

⁽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.



	Concession type
(Dollars in thousands)	Principal deferral		Principal reduction		A/B Note Restructure⁽¹⁾		Interest rate		Forbearance agreement		Total number of loans	Pre- modification recorded investment		Post- modification recorded investment
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



	Concession type
(Dollars in thousands)	Principal deferral		Principal reduction		A/B Note Restructure⁽¹⁾		Interest rate		Forbearance agreement		Total number of loans	Pre- modification recorded investment		Post- modification recorded investment
For the year ended December 31, 2014
Commercial loan portfolio:
Commercial	$	12,657	$	112	$	111	$	901	$	—	53	$	13,781	$	13,781
Commercial real estate	10,713		154		223		671		314		46	12,075		12,075
Real estate construction and land development	72		—		—		—		—		1	72		72
Subtotal	23,442		266		334		1,572		314		100	25,928		25,928
Consumer loan portfolio:
Residential mortgage	1,832		—		—		991		—		36	2,847		2,823
Consumer installment	572		—		—		—		—		52	572		572
Home equity	606		—		—		157		—		31	765		763
Subtotal	3,010		—		—		1,148		—		119	4,184		4,158
Total loans	$	26,452	$	266	$	334	$	2,720	$	314	219	$	30,112	$	30,086

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, 2016 and 2015:



(Dollars in thousands)	Accruing TDRs		Nonaccrual TDRs		Total
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
December 31, 2015
Commercial loan portfolio	$	46,141	$	32,682	$	78,823
Consumer loan portfolio	21,037		3,251		24,288
Total	$	67,178	$	35,933	$	103,111

The following schedule includes TDRs for which there was a payment default during the years ended December 31, 2016, 2015 and 2014, 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,
	2016			2015			2014
	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)	Number of loans	Principal balance at year end		Number of loans	Principal balance at year end		Number of loans	Principal balance at year end
Commercial loan portfolio:
Commercial	—	$	—	1	$	1,206	7	$	885
Commercial real estate	2	1,721		5	1,016		6	2,352
Subtotal — commercial loan portfolio	2	1,721		6	2,222		13	3,237
Consumer loan portfolio (residential mortgage)	14	259		3	65		12	259
Total	16	$	1,980	9	$	2,287	25	$	3,496

At December 31, 2016, commitments to lend additional funds to borrowers whose terms have been modified in TDRs totaled $1.5 million

Allowance for Loan Losses

The following schedule presents, by loan portfolio segment, the changes in the allowance for the years ended December 31, 2016, 2015 and 2014, and details regarding the balance in the allowance and the recorded investment in loans at December 31, 2016 and 2015 by impairment evaluation method.



(Dollars in thousands)	Commercial loan portfolio			Consumer loan portfolio			Unallocated			Total
Changes in allowance for loan losses for the year ended December 31, 2016:
Beginning balance	$	47,234		$	26,094		$	—		$	73,328
Provision 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
Allowance for loan losses balance at December 31, 2016 attributable to:
Loans individually evaluated for impairment	$	5,234		$	3,528		$	—		$	8,762
Loans collectively evaluated for impairment	45,967			23,539			—			69,506
Loans accounted for under ASC 310-30	—			—			—			—
Total	$	51,201		$	27,067		$	—		$	78,268
Recorded investment (loan balance) at December 31, 2016:
Loans individually evaluated for impairment	$	78,523		$	28,346		$	—		$	106,869
Loans collectively evaluated for impairment	4,026,526			3,325,006			—			7,351,532
Loans accounted for under ASC 310-30	3,489,163			2,043,215			—			5,532,378
Total	$	7,594,212		$	5,396,567		$	—		$	12,990,779
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
Allowance for loan losses balance at December 31, 2015 attributable to:
Loans individually evaluated for impairment	$	6,197		$	192		$	—		$	6,389
Loans collectively evaluated for impairment	41,037			25,902			—			66,939
Loans accounted for under ASC 310-30	—			—			—			—
Total	$	47,234		$	26,094		$	—		$	73,328
Recorded investment (loan balance) at December 31, 2015:
Loans individually evaluated for impairment	$	100,379		$	29,024		$	—		$	129,403
Loans collectively evaluated for impairment	3,030,342			2,648,189			—			5,678,531
Loans accounted for under ASC 310-30	1,119,396			343,817			—			1,463,213
Total	$	4,250,117		$	3,021,030		$	—		$	7,271,147
Changes in allowance for loan losses for the year ended December 31, 2014:
Beginning balance	$	44,482		$	30,145		$	4,445		$	79,072
Provision (benefit) for loan losses	3,464			4,357			(1,721		)	6,100
Charge-offs	(6,399		)	(7,830		)	—			(14,229		)
Recoveries	2,609			2,131			—			4,740
Ending balance	$	44,156		$	28,803		$	2,724		$	75,683