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Loans
 6 Months Ended
Jun. 30, 2016
Loans [Abstract]  
Loans
.  Loans

Our assessment of the allowance for loan losses is based on an evaluation of the loan portfolio, recent loss experience, current economic conditions and other pertinent factors.

An analysis of the allowance for loan losses by portfolio segment for the three months ended June 30, follows:
 
  
Commercial
  
Mortgage
  
Installment
  
Payment
Plan
Receivables
  
Subjective
Allocation
  
Total
 
  
(In thousands)
 
2016
                  
Balance at beginning of period
 
$
5,622
  
$
10,296
  
$
1,161
  
$
53
  
$
5,363
  
$
22,495
 
Additions (deductions)
                        
Provision for loan losses
  
(663
)
  
(359
)
  
126
   
(1
)
  
163
   
(734
)
Recoveries credited to allowance
  
1,114
   
294
   
351
   
-
   
-
   
1,759
 
Loans charged against the allowance
  
(34
)
  
(275
)
  
(499
)
  
-
   
-
   
(808
)
Balance at end of period
 
$
6,039
  
$
9,956
  
$
1,139
  
$
52
  
$
5,526
  
$
22,712
 
                         
2015
                        
Balance at beginning of period
 
$
5,916
  
$
12,081
  
$
1,564
  
$
62
  
$
5,056
  
$
24,679
 
Additions (deductions)
                        
Provision for loan losses
  
177
   
(101
)
  
(45
)
  
3
   
(168
)
  
(134
)
Recoveries credited to allowance
  
652
   
319
   
284
   
-
   
-
   
1,255
 
Loans charged against the allowance
  
(38
)
  
(834
)
  
(342
)
  
-
   
-
   
(1,214
)
Balance at end of period
 
$
6,707
  
$
11,465
  
$
1,461
  
$
65
  
$
4,888
  
$
24,586
 
 
An analysis of the allowance for loan losses by portfolio segment for the six months ended June 30, follows:
 
  
Commercial
  
Mortgage
  
Installment
  
Payment
Plan
Receivables
  
Subjective
Allocation
  
Total
 
  
(In thousands)
 
2016
                  
Balance at beginning of period
 
$
5,670
  
$
10,391
  
$
1,181
  
$
56
  
$
5,272
  
$
22,570
 
Additions (deductions)
                        
Provision for loan losses
  
(1,067
)
  
(638
)
  
191
   
(4
)
  
254
   
(1,264
)
Recoveries credited to allowance
  
1,470
   
676
   
572
   
-
   
-
   
2,718
 
Loans charged against the allowance
  
(34
)
  
(473
)
  
(805
)
  
-
   
-
   
(1,312
)
Balance at end of period
 
$
6,039
  
$
9,956
  
$
1,139
  
$
52
  
$
5,526
  
$
22,712
 
                         
2015
                        
Balance at beginning of period
 
$
5,445
  
$
13,444
  
$
1,814
  
$
64
  
$
5,223
  
$
25,990
 
Additions (deductions)
                        
Provision for loan losses
  
505
   
(834
)
  
(130
)
  
1
   
(335
)
  
(793
)
Recoveries credited to allowance
  
1,085
   
557
   
603
   
-
   
-
   
2,245
 
Loans charged against the allowance
  
(328
)
  
(1,702
)
  
(826
)
  
-
   
-
   
(2,856
)
Balance at end of period
 
$
6,707
  
$
11,465
  
$
1,461
  
$
65
  
$
4,888
  
$
24,586
 
 
Allowance for loan losses and recorded investment in loans by portfolio segment follows:
 
  
Commercial
  
Mortgage
  
Installment
  
Payment
Plan
Receivables
  
Subjective
Allocation
  
Total
 
  
(In thousands)
 
June 30, 2016
                  
Allowance for loan losses                        
Individually evaluated for impairment
 
$
3,271
  
$
7,262
  
$
408
  
$
-
  
$
-
  
$
10,941
 
Collectively evaluated for impairment
  
2,768
   
2,694
   
731
   
52
   
5,526
   
11,771
 
Total ending allowance balance
 
$
6,039
  
$
9,956
  
$
1,139
  
$
52
  
$
5,526
  
$
22,712
 
                         
Loans
                        
Individually evaluated for impairment
 
$
17,802
  
$
63,430
  
$
5,427
  
$
-
      
$
86,659
 
Collectively evaluated for impairment
  
775,794
   
444,865
   
247,973
   
31,389
       
1,500,021
 
Total loans recorded investment
  
793,596
   
508,295
   
253,400
   
31,389
       
1,586,680
 
Accrued interest included in recorded investment
  
1,596
   
2,274
   
688
   
-
       
4,558
 
Total loans
 
$
792,000
  
$
506,021
  
$
252,712
  
$
31,389
      
$
1,582,122
 
                         
December 31, 2015
                        
Allowance for loan losses
                        
Individually evaluated for impairment
 
$
2,708
  
$
7,818
  
$
457
  
$
-
  
$
-
  
$
10,983
 
Collectively evaluated for impairment
  
2,962
   
2,573
   
724
   
56
   
5,272
   
11,587
 
Total ending allowance balance
 
$
5,670
  
$
10,391
  
$
1,181
  
$
56
  
$
5,272
  
$
22,570
 
                         
Loans
                        
Individually evaluated for impairment
 
$
16,868
  
$
66,375
  
$
5,888
  
$
-
      
$
89,131
 
Collectively evaluated for impairment
  
733,399
   
436,349
   
226,409
   
34,599
       
1,430,756
 
Total loans recorded investment
  
750,267
   
502,724
   
232,297
   
34,599
       
1,519,887
 
Accrued interest included in recorded investment
  
1,869
   
2,270
   
698
   
-
       
4,837
 
Total loans
 
$
748,398
  
$
500,454
  
$
231,599
  
$
34,599
      
$
1,515,050
 
 
Loans on non-accrual status and past due more than 90 days (“Non-performing Loans”) follow:

  
90+ and
Still
Accruing
  
Non-
Accrual
  
Total Non-
Performing
Loans
 
  
(In thousands)
 
June 30, 2016
         
Commercial
         
Income producing - real estate
 
$
-
  
$
950
  
$
950
 
Land, land development and construction - real estate
  
-
   
133
   
133
 
Commercial and industrial
  
95
   
2,533
   
2,628
 
Mortgage
            
1-4 family
  
-
   
5,013
   
5,013
 
Resort lending
  
-
   
803
   
803
 
Home equity - 1st lien
  
-
   
180
   
180
 
Home equity - 2nd lien
  
-
   
262
   
262
 
Purchased loans
  
-
   
6
   
6
 
Installment
            
Home equity - 1st lien
  
-
   
181
   
181
 
Home equity - 2nd lien
  
-
   
327
   
327
 
Loans not secured by real estate
  
-
   
382
   
382
 
Other
  
-
   
15
   
15
 
Payment plan receivables
            
Full refund
  
-
   
2
   
2
 
Partial refund
  
-
   
13
   
13
 
Other
  
-
   
3
   
3
 
Total recorded investment
 
$
95
  
$
10,803
  
$
10,898
 
Accrued interest included in recorded investment
 
$
1
  
$
-
  
$
1
 
December 31, 2015
            
Commercial
            
Income producing - real estate
 
$
-
  
$
1,027
  
$
1,027
 
Land, land development and construction - real estate
  
49
   
401
   
450
 
Commercial and industrial
  
69
   
2,028
   
2,097
 
Mortgage
            
1-4 family
  
-
   
4,744
   
4,744
 
Resort lending
  
-
   
1,094
   
1,094
 
Home equity - 1st lien
  
-
   
187
   
187
 
Home equity - 2nd lien
  
-
   
147
   
147
 
Purchased loans
  
-
   
2
   
2
 
Installment
            
Home equity - 1st lien
  
-
   
106
   
106
 
Home equity - 2nd lien
  
-
   
443
   
443
 
Loans not secured by real estate
  
-
   
421
   
421
 
Other
  
-
   
2
   
2
 
Payment plan receivables
            
Full refund
  
-
   
2
   
2
 
Partial refund
  
-
   
2
   
2
 
Other
  
-
   
1
   
1
 
Total recorded investment
 
$
118
  
$
10,607
  
$
10,725
 
Accrued interest included in recorded investment
 
$
2
  
$
-
  
$
2
 
 
An aging analysis of loans by class follows:

  
Loans Past Due
  
Loans not
  
Total
 
  
30-59 days
  
60-89 days
  
90+ days
  
Total
  
Past Due
  
Loans
 
  
(In thousands)
 
June 30, 2016
                  
Commercial
                  
Income producing - real estate
 
$
30
  
$
176
  
$
774
  
$
980
  
$
306,698
  
$
307,678
 
Land, land development and construction - real estate
  
9
   
114
   
133
   
256
   
48,189
   
48,445
 
Commercial and industrial
  
205
   
194
   
516
   
915
   
436,558
   
437,473
 
Mortgage
                        
1-4 family
  
2,142
   
687
   
5,013
   
7,842
   
281,979
   
289,821
 
Resort lending
  
328
   
78
   
803
   
1,209
   
107,824
   
109,033
 
Home equity - 1st lien
  
228
   
35
   
180
   
443
   
26,988
   
27,431
 
Home equity - 2nd lien
  
494
   
152
   
262
   
908
   
51,461
   
52,369
 
Purchased loans
  
5
   
1
   
6
   
12
   
29,629
   
29,641
 
Installment
                        
Home equity - 1st lien
  
268
   
37
   
181
   
486
   
14,430
   
14,916
 
Home equity - 2nd lien
  
210
   
121
   
327
   
658
   
16,612
   
17,270
 
Loans not secured by real estate
  
239
   
128
   
382
   
749
   
218,181
   
218,930
 
Other
  
13
   
-
   
15
   
28
   
2,256
   
2,284
 
Payment plan receivables
                        
Full refund
  
377
   
137
   
2
   
516
   
12,683
   
13,199
 
Partial refund
  
397
   
116
   
13
   
526
   
10,572
   
11,098
 
Other
  
230
   
68
   
3
   
301
   
6,791
   
7,092
 
Total recorded investment
 
$
5,175
  
$
2,044
  
$
8,610
  
$
15,829
  
$
1,570,851
  
$
1,586,680
 
Accrued interest included in recorded investment
 
$
44
  
$
22
  
$
1
  
$
67
  
$
4,491
  
$
4,558
 
                         
December 31, 2015
                        
Commercial
                        
Income producing - real estate
 
$
203
  
$
209
  
$
647
  
$
1,059
  
$
305,155
  
$
306,214
 
Land, land development and construction - real estate
  
-
   
-
   
252
   
252
   
44,231
   
44,483
 
Commercial and industrial
  
785
   
16
   
151
   
952
   
398,618
   
399,570
 
Mortgage
                        
1-4 family
  
1,943
   
640
   
4,744
   
7,327
   
272,298
   
279,625
 
Resort lending
  
307
   
-
   
1,094
   
1,401
   
114,619
   
116,020
 
Home equity - 1st lien
  
50
   
-
   
187
   
237
   
22,327
   
22,564
 
Home equity - 2nd lien
  
439
   
54
   
147
   
640
   
50,618
   
51,258
 
Purchased loans
  
9
   
1
   
2
   
12
   
33,245
   
33,257
 
Installment
                        
Home equity - 1st lien
  
315
   
107
   
106
   
528
   
16,707
   
17,235
 
Home equity - 2nd lien
  
231
   
149
   
443
   
823
   
19,727
   
20,550
 
Loans not secured by real estate
  
567
   
83
   
421
   
1,071
   
191,262
   
192,333
 
Other
  
15
   
3
   
2
   
20
   
2,159
   
2,179
 
Payment plan receivables
                        
Full refund
  
492
   
62
   
2
   
556
   
21,294
   
21,850
 
Partial refund
  
415
   
228
   
2
   
645
   
5,834
   
6,479
 
Other
  
110
   
3
   
1
   
114
   
6,156
   
6,270
 
Total recorded investment
 
$
5,881
  
$
1,555
  
$
8,201
  
$
15,637
  
$
1,504,250
  
$
1,519,887
 
Accrued interest included in recorded investment
 
$
53
  
$
17
  
$
2
  
$
72
  
$
4,765
  
$
4,837
 
 
Impaired loans are as follows :

  
June 30,
2016
  
December 31,
2015
 
Impaired loans with no allocated allowance
 
(In thousands)
 
TDR
 
$
173
  
$
2,518
 
Non - TDR
  
542
   
203
 
Impaired loans with an allocated allowance
        
TDR - allowance based on collateral
  
5,036
   
4,810
 
TDR - allowance based on present value cash flow
  
80,205
   
81,002
 
Non - TDR - allowance based on collateral
  
398
   
260
 
Non - TDR - allowance based on present value cash flow
  
-
   
-
 
Total impaired loans
 
$
86,354
  
$
88,793
 
         
Amount of allowance for loan losses allocated
        
TDR - allowance based on collateral
 
$
2,127
  
$
2,436
 
TDR - allowance based on present value cash flow
  
8,603
   
8,471
 
Non - TDR - allowance based on collateral
  
211
   
76
 
Non - TDR - allowance based on present value cash flow
  
-
   
-
 
Total amount of allowance for loan losses allocated
 
$
10,941
  
$
10,983
 
 
Impaired loans by class  are as follows (1):
 
  
June 30, 2016
  
December 31, 2015
 
  
Recorded
Investment
  
Unpaid
Principal
Balance
  
Related
Allowance
  
Recorded
Investment
  
Unpaid
Principal
Balance
  
Related
Allowance
 
With no related allowance recorded:
 
(In thousands)
    
Commercial
                  
Income producing - real estate
 
$
560
  
$
806
  
$
-
  
$
641
  
$
851
  
$
-
 
Land, land development & construction-real estate
  
133
   
709
   
-
   
818
   
1,393
   
-
 
Commercial and industrial
  
-
   
-
   
-
   
1,245
   
1,241
   
-
 
Mortgage
                        
1-4 family
  
22
   
348
   
-
   
23
   
183
   
-
 
Resort lending
  
-
   
-
   
-
   
-
   
-
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
   
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
   
-
   
-
 
Installment
                        
Home equity - 1st lien
  
-
   
43
   
-
   
-
   
76
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
   
-
   
-
 
Loans not secured by real estate
  
-
   
-
   
-
   
-
   
-
   
-
 
Other
  
-
   
-
   
-
   
-
   
-
   
-
 
   
715
   
1,906
   
-
   
2,727
   
3,744
   
-
 
With an allowance recorded:
                        
Commercial
                        
Income producing - real estate
  
8,186
   
8,935
   
663
   
8,377
   
9,232
   
516
 
Land, land development & construction-real estate
  
1,844
   
1,843
   
158
   
1,690
   
1,778
   
296
 
Commercial and industrial
  
7,079
   
7,359
   
2,450
   
4,097
   
4,439
   
1,896
 
Mortgage
                        
1-4 family
  
45,474
   
47,259
   
4,700
   
47,792
   
49,808
   
5,132
 
Resort lending
  
17,449
   
17,484
   
2,529
   
18,148
   
18,319
   
2,662
 
Home equity - 1st lien
  
243
   
246
   
11
   
168
   
172
   
9
 
Home equity - 2nd lien
  
242
   
324
   
22
   
244
   
325
   
15
 
Installment
                        
Home equity - 1st lien
  
2,172
   
2,315
   
130
   
2,364
   
2,492
   
143
 
Home equity - 2nd lien
  
2,709
   
2,725
   
245
   
2,929
   
2,951
   
271
 
Loans not secured by real estate
  
541
   
575
   
33
   
587
   
658
   
42
 
Other
  
5
   
5
   
-
   
8
   
8
   
1
 
   
85,944
   
89,070
   
10,941
   
86,404
   
90,182
   
10,983
 
Total
                        
Commercial
                        
Income producing - real estate
  
8,746
   
9,741
   
663
   
9,018
   
10,083
   
516
 
Land, land development & construction-real estate
  
1,977
   
2,552
   
158
   
2,508
   
3,171
   
296
 
Commercial and industrial
  
7,079
   
7,359
   
2,450
   
5,342
   
5,680
   
1,896
 
Mortgage
                        
1-4 family
  
45,496
   
47,607
   
4,700
   
47,815
   
49,991
   
5,132
 
Resort lending
  
17,449
   
17,484
   
2,529
   
18,148
   
18,319
   
2,662
 
Home equity - 1st lien
  
243
   
246
   
11
   
168
   
172
   
9
 
Home equity - 2nd lien
  
242
   
324
   
22
   
244
   
325
   
15
 
Installment
                        
Home equity - 1st lien
  
2,172
   
2,358
   
130
   
2,364
   
2,568
   
143
 
Home equity - 2nd lien
  
2,709
   
2,725
   
245
   
2,929
   
2,951
   
271
 
Loans not secured by real estate
  
541
   
575
   
33
   
587
   
658
   
42
 
Other
  
5
   
5
   
-
   
8
   
8
   
1
 
Total
 
$
86,659
  
$
90,976
  
$
10,941
  
$
89,131
  
$
93,926
  
$
10,983
 
                         
Accrued interest included in recorded investment
 
$
305
          
$
338
         

(1)
There were no impaired payment plan receivables or purchased mortgage loans at June 30, 2016 or December 31, 2015.
 
Average recorded investment in and interest income earned on impaired loans by class for the three month periods ending June 30, follows (1):

  
2016
  
2015
 
  
Average
Recorded
Investment
  
Interest
Income
Recognized
  
Average
Recorded
Investment
  
Interest
Income
Recognized
 
With no related allowance recorded:
 
(In thousands)
 
Commercial
            
Income producing - real estate
 
$
673
  
$
-
  
$
5,658
  
$
50
 
Land, land development & construction-real estate
  
335
   
-
   
1,021
   
15
 
Commercial and industrial
  
609
   
-
   
2,855
   
37
 
Mortgage
                
1-4 family
  
11
   
5
   
25
   
2
 
Resort lending
  
-
   
-
   
7
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
 
Installment
                
Home equity - 1st lien
  
1
   
-
   
-
   
1
 
Home equity - 2nd lien
  
7
   
-
   
-
   
-
 
Loans not secured by real estate
  
-
   
-
   
-
   
-
 
Other
  
-
   
-
   
-
   
-
 
   
1,636
   
5
   
9,566
   
105
 
With an allowance recorded:
                
Commercial
                
Income producing - real estate
  
8,210
   
100
   
12,878
   
163
 
Land, land development & construction-real estate
  
1,664
   
13
   
1,943
   
13
 
Commercial and industrial
  
6,203
   
59
   
7,863
   
67
 
Mortgage
                
1-4 family
  
46,041
   
475
   
50,931
   
539
 
Resort lending
  
17,689
   
159
   
18,482
   
173
 
Home equity - 1st lien
  
243
   
2
   
160
   
2
 
Home equity - 2nd lien
  
181
   
4
   
185
   
4
 
Installment
                
Home equity - 1st lien
  
2,230
   
42
   
2,576
   
44
 
Home equity - 2nd lien
  
2,751
   
41
   
3,101
   
49
 
Loans not secured by real estate
  
555
   
10
   
668
   
9
 
Other
  
6
   
-
   
11
   
1
 
   
85,773
   
905
   
98,798
   
1,064
 
Total
                
Commercial
                
Income producing - real estate
  
8,883
   
100
   
18,536
   
213
 
Land, land development & construction-real estate
  
1,999
   
13
   
2,964
   
28
 
Commercial and industrial
  
6,812
   
59
   
10,718
   
104
 
Mortgage
                
1-4 family
  
46,052
   
480
   
50,956
   
541
 
Resort lending
  
17,689
   
159
   
18,489
   
173
 
Home equity - 1st lien
  
243
   
2
   
160
   
2
 
Home equity - 2nd lien
  
181
   
4
   
185
   
4
 
Installment
                
Home equity - 1st lien
  
2,231
   
42
   
2,576
   
45
 
Home equity - 2nd lien
  
2,758
   
41
   
3,101
   
49
 
Loans not secured by real estate
  
555
   
10
   
668
   
9
 
Other
  
6
   
-
   
11
   
1
 
Total
 
$
87,409
  
$
910
  
$
108,364
  
$
1,169
 

(1)
There were no impaired payment plan receivables or purchased mortgage loans during the three month periods ended June 30, 2016 and 2015, respectively.
 
Average recorded investment in and interest income earned on impaired loans by class for the six month periods ending June 30, follows (1):
 
  
2016
  
2015
 
  
Average
Recorded
Investment
  
Interest
Income
Recognized
  
Average
Recorded
Investment
  
Interest
Income
Recognized
 
With no related allowance recorded:
 
(In thousands)
 
Commercial
            
Income producing - real estate
 
$
662
  
$
2
  
$
5,728
  
$
103
 
Land, land development & construction-real estate
  
496
   
7
   
1,031
   
49
 
Commercial and industrial
  
821
   
21
   
2,798
   
74
 
Mortgage
                
1-4 family
  
15
   
6
   
17
   
2
 
Resort lending
  
-
   
-
   
20
   
-
 
Home equity line of credit - 1st lien
  
-
   
-
   
-
   
-
 
Home equity line of credit - 2nd lien
  
-
   
-
   
-
   
-
 
Installment
                
Home equity installment - 1st lien
  
-
   
1
   
-
   
1
 
Home equity installment - 2nd lien
  
5
   
-
   
-
   
-
 
Loans not secured by real estate
  
-
   
-
   
-
   
-
 
Other
  
-
   
-
   
-
   
-
 
   
1,999
   
37
   
9,594
   
229
 
With an allowance recorded:
                
Commercial
                
Income producing - real estate
  
8,266
   
207
   
12,864
   
320
 
Land, land development & construction-real estate
  
1,673
   
26
   
2,447
   
27
 
Commercial and industrial
  
5,501
   
82
   
7,992
   
133
 
Mortgage
                
1-4 family
  
46,625
   
977
   
51,689
   
1,090
 
Resort lending
  
17,842
   
319
   
18,587
   
344
 
Home equity line of credit - 1st lien
  
218
   
4
   
160
   
4
 
Home equity line of credit - 2nd lien
  
202
   
5
   
165
   
6
 
Installment
                
Home equity installment - 1st lien
  
2,274
   
84
   
2,632
   
94
 
Home equity installment - 2nd lien
  
2,810
   
85
   
3,138
   
100
 
Loans not secured by real estate
  
566
   
19
   
682
   
19
 
Other
  
6
   
-
   
11
   
1
 
   
85,983
   
1,808
   
100,367
   
2,138
 
Total
                
Commercial
                
Income producing - real estate
  
8,928
   
209
   
18,592
   
423
 
Land, land development & construction-real estate
  
2,169
   
33
   
3,478
   
76
 
Commercial and industrial
  
6,322
   
103
   
10,790
   
207
 
Mortgage
                
1-4 family
  
46,640
   
983
   
51,706
   
1,092
 
Resort lending
  
17,842
   
319
   
18,607
   
344
 
Home equity line of credit - 1st lien
  
218
   
4
   
160
   
4
 
Home equity line of credit - 2nd lien
  
202
   
5
   
165
   
6
 
Installment
                
Home equity installment - 1st lien
  
2,274
   
85
   
2,632
   
95
 
Home equity installment - 2nd lien
  
2,815
   
85
   
3,138
   
100
 
Loans not secured by real estate
  
566
   
19
   
682
   
19
 
Other
  
6
   
-
   
11
   
1
 
Total
 
$
87,982
  
$
1,845
  
$
109,961
  
$
2,367
 

(1)There were no impaired payment plan receivables or purchased mortgage loans during the six month periods ended June 30, 2016 and 2015, respectively.
 
Our average investment in impaired loans was approximately $87.4 million and $108.4 million for the three-month periods ended June 30, 2016 and 2015, respectively and $88.0 million and $110.0 million for the six-month periods ended June 30, 2016 and 2015, respectively.  Cash receipts on impaired loans on non-accrual status are generally applied to the principal balance.  Interest income recognized on impaired loans during the three months ending June 30, 2016 and 2015, was approximately $0.9 million and $1.2 million, respectively and was approximately $1.8 million and $2.4 million during the six months ending June 30, 2016 and 2015, respectively.

Troubled debt restructurings follow:

 
June 30, 2016
 
 
Commercial
  
Retail
  
Total
 
 
(In thousands)
 
Performing TDRs
 
$
14,130
  
$
64,818
  
$
78,948
 
Non-performing TDRs(1)
  
2,678
   
3,788
(2)  
6,466
 
  Total
 
$
16,808
  
$
68,606
  
$
85,414
 

 
December 31, 2015
 
 
Commercial
  
Retail
  
Total
 
 
(In thousands)
 
Performing TDRs
 
$
13,318
  
$
68,194
  
$
81,512
 
Non-performing TDRs(1)
  
3,041
   
3,777
(2)  
6,818
 
  Total
 
$
16,359
  
$
71,971
  
$
88,330
 
 
(1)Included in non-performing loans table above.
(2)Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

We allocated $10.7 million and $10.9 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2016 and December 31, 2015, respectively.

During the six months ended June 30, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans generally included one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan.

Modifications involving a reduction of the stated interest rate of the loan have generally been for periods ranging from 9 months to 36 months but have extended to as much as 480 months in certain circumstances. Modifications involving an extension of the maturity date have generally been for periods ranging from 1 month to 60 months but have extended to as much as 230 months in certain circumstances.
 
Loans that have been classified as troubled debt restructurings during the three-month periods ended June 30 follow:
 
  
Number of
Contracts
  
Pre-modification
Recorded
Balance
  
Post-modification
Recorded
Balance
 
  
(Dollars in thousands)
 
2016
         
Commercial
         
Income producing - real estate
  
-
  
$
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
   
-
 
Commercial and industrial
  
-
   
-
   
-
 
Mortgage
            
1-4 family
  
1
   
109
   
110
 
Resort lending
  
-
   
-
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
3
   
29
   
29
 
Home equity - 2nd lien
  
2
   
71
   
73
 
Loans not secured by real estate
  
1
   
12
   
12
 
Other
  
-
   
-
   
-
 
Total
  
7
  
$
221
  
$
224
 
             
2015
            
Commercial
            
Income producing - real estate
  
1
  
$
73
  
$
73
 
Land, land development & construction-real estate
  
-
   
-
   
-
 
Commercial and industrial
  
1
   
17
   
17
 
Mortgage
            
1-4 family
  
1
   
25
   
40
 
Resort lending
  
1
   
313
   
309
 
Home equity - 1st lien
  
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
1
   
23
   
24
 
Home equity - 2nd lien
  
3
   
58
   
58
 
Loans not secured by real estate
  
1
   
-
   
6
 
Other
  
-
   
-
   
-
 
Total
  
9
  
$
509
  
$
527
 
 
Loans that have been classified as troubled debt restructurings during the six-month periods ended June 30 follow:
 
  
Number of
Contracts
  
Pre-modification
Recorded
Balance
  
Post-modification
Recorded
Balance
 
  
(Dollars in thousands)
 
2016
         
Commercial
         
Income producing - real estate
  
2
  
$
110
  
$
110
 
Land, land development & construction-real estate
  
-
   
-
   
-
 
Commercial and industrial
  
4
   
1,758
   
1,758
 
Mortgage
            
1-4 family
  
3
   
192
   
263
 
Resort lending
  
1
   
116
   
117
 
Home equity - 1st lien
  
1
   
107
   
78
 
Home equity - 2nd lien
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
4
   
59
   
60
 
Home equity - 2nd lien
  
4
   
126
   
129
 
Loans not secured by real estate
  
1
   
12
   
12
 
Other
  
-
   
-
   
-
 
Total
  
20
  
$
2,480
  
$
2,527
 
             
2015
            
Commercial
            
Income producing - real estate
  
2
  
$
229
  
$
234
 
Land, land development & construction-real estate
  
-
   
-
   
-
 
Commercial and industrial
  
3
   
253
   
247
 
Mortgage
            
1-4 family
  
6
   
1,030
   
845
 
Resort lending
  
1
   
313
   
309
 
Home equity - 1st lien
  
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
5
   
190
   
164
 
Home equity - 2nd lien
  
3
   
58
   
58
 
Loans not secured by real estate
  
1
   
-
   
6
 
Other
  
-
   
-
   
-
 
Total
  
21
  
$
2,073
  
$
1,863
 

The troubled debt restructurings described above for 2016 had no impact on the allowance for loan losses and resulted in zero charge offs during the three months ended June 30, 2016, and increased the allowance by $0.3 million and resulted in zero charge offs during the six months ended June 30, 2016.

The troubled debt restructurings described above for 2015 increased the allowance for loan losses by $0.1 million and resulted in zero charge offs during the three months ended June 30, 2015, and increased the allowance by $0.1 million and resulted in zero charge offs during the six months ended June 30, 2015.
 
Loans that have been classified as troubled debt restructurings during the past twelve months and that have subsequently defaulted during the three-month periods ended June 30 follow:

  
Number of
Contracts
  
Recorded
Balance
 
  
(Dollars in thousands)
 
2016
      
Commercial
      
Income producing - real estate
  
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
 
Commercial and industrial
  
-
   
-
 
Mortgage
        
1-4 family
  
-
   
-
 
Resort lending
  
-
   
-
 
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Installment
        
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Loans not secured by real estate
  
-
   
-
 
Other
  
-
   
-
 
   
-
  
$
-
 
         
2015
        
Commercial
        
Income producing - real estate
  
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
 
Commercial and industrial
  
1
   
65
 
Mortgage
        
1-4 family
  
-
   
-
 
Resort lending
  
-
   
-
 
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Installment
        
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Loans not secured by real estate
  
1
   
4
 
Other
  
-
   
-
 
   
2
  
$
69
 
 
Loans that have been classified as troubled debt restructurings during the past twelve months and that have subsequently defaulted during the six-month periods ended June 30 follow:

  
Number of
Contracts
  
Recorded
Balance
 
  
(Dollars in thousands)
 
2016
      
Commercial
      
Income producing - real estate
  
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
 
Commercial and industrial
  
-
   
-
 
Mortgage
        
1-4 family
  
-
   
-
 
Resort lending
  
-
   
-
 
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Installment
        
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Loans not secured by real estate
  
-
   
-
 
Other
  
-
   
-
 
   
-
  
$
-
 
         
2015
        
Commercial
        
Income producing - real estate
  
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
 
Commercial and industrial
  
2
   
157
 
Mortgage
        
1-4 family
  
-
   
-
 
Resort lending
  
-
   
-
 
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Installment
        
Home equity - 1st lien
  
-
   
-
 
Home equity - 2nd lien
  
-
   
-
 
Loans not secured by real estate
  
1
   
4
 
Other
  
-
   
-
 
   
3
  
$
161
 

A loan is considered to be in payment default generally once it is 90 days contractually past due under the modified terms.

There were no troubled debt restructurings that subsequently defaulted during the three and six months ended June 30, 2016.

The troubled debt restructurings that subsequently defaulted described above for 2015 had no impact on the allowance for loan losses and resulted in zero charge offs during the three months ended June 30, 2015 and decreased the allowance for loan losses by $0.01 million and resulted in zero charge offs during the six months ended June 30, 2015.
 
In order to determine whether a borrower is experiencing financial difficulty, we perform an evaluation of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under our internal underwriting policy.

Credit Quality Indicators – As part of our on on-going monitoring of the credit quality of our loan portfolios, we track certain credit quality indicators including (a) weighted-average risk grade of commercial loans, (b) the level of classified commercial loans, (c) credit scores of mortgage and installment loan borrowers, (d) financial performance of certain counterparties for payment plan receivables and (e) delinquency history and non-performing loans.

For commercial loans, we use a loan rating system that is similar to those employed by state and federal banking regulators. Loans are graded on a scale of 1 to 12. A description of the general characteristics of the ratings follows:

Rating 1 through 6: These loans are generally referred to as our “non-watch” commercial credits that include very high or exceptional credit fundamentals through acceptable credit fundamentals.

Rating 7 and 8: These loans are generally referred to as our “watch” commercial credits. This rating includes loans to borrowers that exhibit potential credit weakness or downward trends. If not checked or cured these trends could weaken our asset or credit position. While potentially weak, no loss of principal or interest is envisioned with these ratings.

Rating 9: These loans are generally referred to as our “substandard accruing” commercial credits. This rating includes loans to borrowers that exhibit a well-defined weakness where payment default is probable and loss is possible if deficiencies are not corrected. Generally, loans with this rating are considered collectible as to both principal and interest primarily due to collateral coverage.

Rating 10 and 11: These loans are generally referred to as our “substandard - non-accrual” and “doubtful” commercial credits. This rating includes loans to borrowers with weaknesses that make collection of debt in full, on the basis of current facts, conditions and values at best questionable and at worst improbable. All of these loans are placed in non-accrual.

Rating 12: These loans are generally referred to as our “loss” commercial credits. This rating includes loans to borrowers that are deemed incapable of repayment and are charged-off.
 
The following table summarizes loan ratings by loan class for our commercial loan segment:

  
Commercial
 
   
Non-watch
1-6
   
Watch
7-8
   
Substandard
Accrual
9
   
Non-
Accrual
10-11
  
Total
 
          
(In thousands)
        
June 30, 2016
                   
Income producing - real estate
 
$
300,344
  
$
5,334
  
$
1,050
  
$
950
  
$
307,678
 
Land, land development and construction - real estate
  
46,529
   
1,669
   
114
   
133
   
48,445
 
Commercial and industrial
  
416,102
   
12,516
   
6,322
   
2,533
   
437,473
 
Total
 
$
762,975
  
$
19,519
  
$
7,486
  
$
3,616
  
$
793,596
 
Accrued interest included in total
 
$
1,509
  
$
62
  
$
25
  
$
-
  
$
1,596
 
                     
December 31, 2015
                    
Income producing - real estate
 
$
296,898
  
$
6,866
  
$
1,423
  
$
1,027
  
$
306,214
 
Land, land development and construction - real estate
  
40,844
   
2,995
   
243
   
401
   
44,483
 
Commercial and industrial
  
371,357
   
19,502
   
6,683
   
2,028
   
399,570
 
Total
 
$
709,099
  
$
29,363
  
$
8,349
  
$
3,456
  
$
750,267
 
Accrued interest included in total
 
$
1,729
  
$
108
  
$
32
  
$
-
  
$
1,869
 

For each of our mortgage and installment segment classes, we generally monitor credit quality based on the credit scores of the borrowers. These credit scores are generally updated semi-annually.
 
The following tables summarize credit scores by loan class for our mortgage and installment loan segments:

   
Mortgage (1)
 
   
1-4 Family
  
Resort
Lending
  
Home
Equity
1st Lien
  
Home
Equity
2nd Lien
  
Purchased
Loans
      
Total
   
   
(In thousands)
 
June 30, 2016
                   
800 and above
  
$
31,459
  
$
12,187
  
$
6,000
  
$
8,476
  
$
2,287
  
$
60,409
 
750-799
   
83,455
   
39,058
   
9,279
   
18,317
   
19,259
   
169,368
 
700-749
   
59,358
   
31,410
   
4,840
   
10,455
   
7,601
   
113,664
 
650-699
   
52,187
   
13,815
   
3,646
   
8,249
   
-
   
77,897
 
600-649
   
28,791
   
6,525
   
1,347
   
3,375
   
-
   
40,038
 
550-599
   
15,745
   
2,485
   
743
   
1,573
   
-
   
20,546
 
500-549
   
8,594
   
882
   
581
   
1,280
   
-
   
11,337
 
Under 500
   
5,332
   
600
   
172
   
305
   
-
   
6,409
 
Unknown
   
4,900
   
2,071
   
823
   
339
   
494
   
8,627
 
Total
  
$
289,821
  
$
109,033
  
$
27,431
  
$
52,369
  
$
29,641
  
$
508,295
 
Accrued interest included in total
  
$
1,383
  
$
479
  
$
104
  
$
210
  
$
98
  
$
2,274
 
                           
December 31, 2015
                         
800 and above
  
$
28,760
  
$
13,943
  
$
4,374
  
$
7,696
  
$
2,310
  
$
57,083
 
750-799
   
78,802
   
40,888
   
7,137
   
17,405
   
23,283
   
167,515
 
700-749
   
56,519
   
31,980
   
4,341
   
11,022
   
6,940
   
110,802
 
650-699
   
51,813
   
17,433
   
3,203
   
7,691
   
-
   
80,140
 
600-649
   
27,966
   
4,991
   
1,467
   
3,684
   
-
   
38,108
 
550-599
   
16,714
   
3,070
   
1,027
   
1,918
   
-
   
22,729
 
500-549
   
10,610
   
1,051
   
572
   
1,295
   
-
   
13,528
 
Under 500
   
4,708
   
554
   
244
   
265
   
-
   
5,771
 
Unknown
   
3,733
   
2,110
   
199
   
282
   
724
   
7,048
 
Total
  
$
279,625
  
$
116,020
  
$
22,564
  
$
51,258
  
$
33,257
  
$
502,724
 
Accrued interest included in total
  
$
1,396
  
$
477
  
$
87
  
$
196
  
$
114
  
$
2,270
 

(1)
Credit scores have been updated within the last twelve months.
 
   
Installment(1)
 
   
Home
Equity
1st Lien
  
Home
Equity
2nd Lien
  
Loans not
Secured by
Real Estate
  
Other
  
Total
 
   
(In thousands)
 
June 30, 2016
                
800 and above
  
$
1,518
  
$
2,133
  
$
50,680
  
$
81
  
$
54,412
 
750-799
   
3,337
   
4,198
   
101,146
   
577
   
109,258
 
700-749
   
2,383
   
3,299
   
38,660
   
694
   
45,036
 
650-699
   
2,863
   
3,503
   
18,041
   
477
   
24,884
 
600-649
   
2,356
   
1,820
   
4,311
   
285
   
8,772
 
550-599
   
1,363
   
1,423
   
1,855
   
64
   
4,705
 
500-549
   
922
   
649
   
1,212
   
50
   
2,833
 
Under 500
   
141
   
240
   
345
   
25
   
751
 
Unknown
   
33
   
5
   
2,680
   
31
   
2,749
 
Total
  
$
14,916
  
$
17,270
  
$
218,930
  
$
2,284
  
$
253,400
 
Accrued interest included in total
  
$
57
  
$
64
  
$
551
  
$
16
  
$
688
 
                       
December 31, 2015
                     
800 and above
  
$
1,792
  
$
1,782
  
$
44,254
  
$
58
  
$
47,886
 
750-799
   
4,117
   
5,931
   
86,800
   
531
   
97,379
 
700-749
   
2,507
   
3,899
   
34,789
   
694
   
41,889
 
650-699
   
3,508
   
4,182
   
16,456
   
499
   
24,645
 
600-649
   
2,173
   
2,153
   
4,979
   
200
   
9,505
 
550-599
   
1,800
   
1,346
   
1,997
   
109
   
5,252
 
500-549
   
1,056
   
855
   
1,170
   
61
   
3,142
 
Under 500
   
223
   
370
   
385
   
23
   
1,001
 
Unknown
   
59
   
32
   
1,503
   
4
   
1,598
 
Total
  
$
17,235
  
$
20,550
  
$
192,333
  
$
2,179
  
$
232,297
 
Accrued interest included in total
  
$
78
  
$
83
  
$
520
  
$
17
  
$
698
 

(1)
Credit scores have been updated within the last twelve months.

Mepco Finance Corporation (“Mepco”) is a wholly-owned subsidiary of our Bank that operates a vehicle service contract payment plan business throughout the United States. See Note #14 for more information about Mepco’s business. As of June 30, 2016, approximately 42.0% of Mepco’s outstanding payment plan receivables relate to programs in which a third party insurer or risk retention group is obligated to pay Mepco the full refund owing upon cancellation of the related service contract (including with respect to both the portion funded to the service contract seller and the portion funded to the administrator). These receivables are shown as “Full Refund” in the table below. Another approximately 35.4% of Mepco’s outstanding payment plan receivables as of June 30, 2016, relate to programs in which a third party insurer or risk retention group is obligated to pay Mepco the refund owing upon cancellation only with respect to the unearned portion previously funded by Mepco to the administrator (but not to the service contract seller). These receivables are shown as “Partial Refund” in the table below. The balance of Mepco’s outstanding payment plan receivables relate to programs in which there is no insurer or risk retention group that has any contractual liability to Mepco for any portion of the refund amount. These receivables are shown as “Other” in the table below. For each class of our payment plan receivables we monitor financial information on the counterparties as we evaluate the credit quality of this portfolio.
 
The following table summarizes credit ratings of insurer or risk retention group counterparties by class of payment plan receivable:

   
Payment Plan Receivables
 
   
Full
Refund
  
Partial
Refund
  
Other
  
Total
 
   
(In thousands)
 
June 30, 2016
             
AM Best rating
             
A+
 
$
-
  
$
11
  
$
-
  
$
11
 
A
  
1,358
   
9,715
   
-
   
11,073
 
A-
   
1,644
   
1,333
   
3,374
   
6,351
 
B+
  
-
   
-
   
3,717
   
3,717
 
Not rated
   
10,197
   
39
   
1
   
10,237
 
Total
  
$
13,199
  
$
11,098
  
$
7,092
  
$
31,389
 
                   
December 31, 2015
                 
AM Best rating
                 
A+
 
$
-
  
$
6
  
$
-
  
$
6
 
A
  
2,712
   
5,203
   
-
   
7,915
 
A-
   
3,418
   
1,177
   
6,265
   
10,860
 
Not rated
   
15,720
   
93
   
5
   
15,818
 
Total
  
$
21,850
  
$
6,479
  
$
6,270
  
$
34,599
 
 
Although Mepco has contractual recourse against various counterparties for refunds owing upon cancellation of vehicle service contracts, see Note #14 below regarding certain risks and difficulties associated with collecting these refunds.

Foreclosed residential real estate properties included in other real estate and repossessed assets on our Condensed Consolidated Statements of Financial Condition totaled $1.9 million and $2.8 million at June 30, 2016 and December 31, 2015, respectively.  Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $1.1 million at both June 30, 2016 and December 31, 2015.