XML 22 R11.htm IDEA: XBRL DOCUMENT v3.7.0.1
Loans
 6 Months Ended
Jun. 30, 2017
Loans [Abstract]  
Loans
4.
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(1)
  
Subjective
Allocation
  
Total
 
  
(In thousands)
 
2017
                  
Balance at beginning of period
 
$
5,088
  
$
8,109
  
$
911
  
$
-
  
$
5,930
  
$
20,038
 
Additions (deductions)
                        
Provision for loan losses
  
(39
)
  
38
   
73
   
-
   
511
   
583
 
Recoveries credited to the allowance
  
202
   
191
   
264
   
-
   
-
   
657
 
Loans charged against the allowance
  
(151
)
  
(193
)
  
(348
)
  
-
   
-
   
(692
)
Balance at end of period
 
$
5,100
  
$
8,145
  
$
900
  
$
-
  
$
6,441
  
$
20,586
 
                         
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 the 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
 

(1) Payment plan receivables were reclassified to held for sale at December 31, 2016.  See note #15.
 
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(1)
  
Subjective
Allocation
  
Total
 
  
(In thousands)
 
2017
                  
Balance at beginning of period
 
$
4,880
  
$
8,681
  
$
1,011
  
$
-
  
$
5,662
  
$
20,234
 
Additions (deductions)
                        
Provision for loan losses
  
(100
)
  
(661
)
  
206
   
-
   
779
   
224
 
Recoveries credited to the allowance
  
606
   
677
   
503
   
-
   
-
   
1,786
 
Loans charged against the allowance
  
(286
)
  
(552
)
  
(820
)
  
-
   
-
   
(1,658
)
Balance at end of period
 
$
5,100
  
$
8,145
  
$
900
  
$
-
  
$
6,441
  
$
20,586
 
                         
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 the 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
 

(1) Payment plan receivables were reclassified to held for sale at December 31, 2016.  See note #15.
 
Allowance for loan losses and recorded investment in loans by portfolio segment follows:

  
Commercial
  
Mortgage
  
Installment
  
Subjective
Allocation
  
Total
 
  
(In thousands)
 
June 30, 2017
               
Allowance for loan losses
               
Individually evaluated for impairment
 
$
1,094
  
$
5,873
  
$
277
  
$
-
  
$
7,244
 
Collectively evaluated for impairment
  
4,006
   
2,272
   
623
   
6,441
   
13,342
 
Total ending allowance balance
 
$
5,100
  
$
8,145
  
$
900
  
$
6,441
  
$
20,586
 
                     
Loans
                    
Individually evaluated for impairment
 
$
11,351
  
$
56,106
  
$
4,437
      
$
71,894
 
Collectively evaluated for impairment
  
819,442
   
621,015
   
304,762
       
1,745,219
 
Total loans recorded investment
  
830,793
   
677,121
   
309,199
       
1,817,113
 
Accrued interest included in recorded investment
  
2,015
   
2,622
   
799
       
5,436
 
Total loans
 
$
828,778
  
$
674,499
  
$
308,400
      
$
1,811,677
 
                     
December 31, 2016
                    
Allowance for loan losses
                    
Individually evaluated for impairment
 
$
2,244
  
$
6,579
  
$
329
  
$
-
  
$
9,152
 
Collectively evaluated for impairment
  
2,636
   
2,102
   
682
   
5,662
   
11,082
 
Total ending allowance balance
 
$
4,880
  
$
8,681
  
$
1,011
  
$
5,662
  
$
20,234
 
                     
Loans
                    
Individually evaluated for impairment
 
$
15,767
  
$
59,151
  
$
4,913
      
$
79,831
 
Collectively evaluated for impairment
  
790,228
   
481,828
   
261,474
       
1,533,530
 
Total loans recorded investment
  
805,995
   
540,979
   
266,387
       
1,613,361
 
Accrued interest included in recorded investment
  
1,978
   
2,364
   
771
       
5,113
 
Total loans
 
$
804,017
  
$
538,615
  
$
265,616
      
$
1,608,248
 

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, 2017
         
Commercial
         
Income producing - real estate
 
$
-
  
$
203
  
$
203
 
Land, land development and construction - real estate
  
-
   
10
   
10
 
Commercial and industrial
  
-
   
541
   
541
 
Mortgage
            
1-4 family
  
-
   
5,481
   
5,481
 
Resort lending
  
-
   
1,043
   
1,043
 
Home equity - 1st lien
  
-
   
198
   
198
 
Home equity - 2nd lien
  
-
   
312
   
312
 
Purchased loans
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
-
   
203
   
203
 
Home equity - 2nd lien
  
-
   
308
   
308
 
Boat lending
  
-
   
93
   
93
 
Recreational vehicle lending
  
-
   
20
   
20
 
Other
  
-
   
130
   
130
 
Total recorded investment
 
$
-
  
$
8,542
  
$
8,542
 
Accrued interest included in recorded investment
 
$
-
  
$
-
  
$
-
 
December 31, 2016
            
Commercial
            
Income producing - real estate
 
$
-
  
$
628
  
$
628
 
Land, land development and construction - real estate
  
-
   
105
   
105
 
Commercial and industrial
  
-
   
4,430
   
4,430
 
Mortgage
            
1-4 family
  
-
   
5,248
   
5,248
 
Resort lending
  
-
   
1,507
   
1,507
 
Home equity - 1st lien
  
-
   
222
   
222
 
Home equity - 2nd lien
  
-
   
317
   
317
 
Purchased loans
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
-
   
266
   
266
 
Home equity - 2nd lien
  
-
   
289
   
289
 
Boat lending
  
-
   
219
   
219
 
Recreational vehicle lending
  
-
   
21
   
21
 
Other
  
-
   
112
   
112
 
Total recorded investment
 
$
-
  
$
13,364
  
$
13,364
 
Accrued interest included in recorded investment
 
$
-
  
$
-
  
$
-
 
 
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, 2017
                  
Commercial
                  
Income producing - real estate
 
$
36
  
$
-
  
$
30
  
$
66
  
$
280,018
  
$
280,084
 
Land, land development and construction - real estate
  
-
   
-
   
-
   
-
   
58,353
   
58,353
 
Commercial and industrial
  
254
   
-
   
121
   
375
   
491,981
   
492,356
 
Mortgage
                        
1-4 family
  
1,894
   
1,007
   
5,481
   
8,382
   
448,747
   
457,129
 
Resort lending
  
136
   
264
   
1,043
   
1,443
   
94,764
   
96,207
 
Home equity - 1st lien
  
60
   
76
   
198
   
334
   
33,697
   
34,031
 
Home equity - 2nd lien
  
644
   
177
   
312
   
1,133
   
52,598
   
53,731
 
Purchased loans
  
5
   
4
   
-
   
9
   
36,014
   
36,023
 
Installment
                        
Home equity - 1st lien
  
124
   
60
   
203
   
387
   
10,589
   
10,976
 
Home equity - 2nd lien
  
163
   
140
   
308
   
611
   
10,791
   
11,402
 
Boat lending
  
173
   
12
   
93
   
278
   
126,150
   
126,428
 
Recreational vehicle lending
  
50
   
13
   
20
   
83
   
89,132
   
89,215
 
Other
  
130
   
44
   
130
   
304
   
70,874
   
71,178
 
Total recorded investment
 
$
3,669
  
$
1,797
  
$
7,939
  
$
13,405
  
$
1,803,708
  
$
1,817,113
 
Accrued interest included in recorded investment
 
$
44
  
$
34
  
$
-
  
$
78
  
$
5,358
  
$
5,436
 
                         
December 31, 2016
                        
Commercial
                        
Income producing - real estate
 
$
-
  
$
-
  
$
383
  
$
383
  
$
287,255
  
$
287,638
 
Land, land development and construction - real estate
  
74
   
-
   
31
   
105
   
51,670
   
51,775
 
Commercial and industrial
  
100
   
1,385
   
66
   
1,551
   
465,031
   
466,582
 
Mortgage
                        
1-4 family
  
2,361
   
869
   
5,248
   
8,478
   
306,063
   
314,541
 
Resort lending
  
-
   
-
   
1,507
   
1,507
   
101,541
   
103,048
 
Home equity - 1st lien
  
149
   
-
   
222
   
371
   
28,645
   
29,016
 
Home equity - 2nd lien
  
470
   
218
   
317
   
1,005
   
54,232
   
55,237
 
Purchased loans
  
13
   
2
   
-
   
15
   
39,122
   
39,137
 
Installment
                        
Home equity - 1st lien
  
311
   
48
   
266
   
625
   
12,025
   
12,650
 
Home equity - 2nd lien
  
238
   
41
   
289
   
568
   
13,390
   
13,958
 
Boat lending
  
184
   
33
   
219
   
436
   
102,489
   
102,925
 
Recreational vehicle lending
  
68
   
33
   
21
   
122
   
74,413
   
74,535
 
Other
  
289
   
30
   
112
   
431
   
61,888
   
62,319
 
Total recorded investment
 
$
4,257
  
$
2,659
  
$
8,681
  
$
15,597
  
$
1,597,764
  
$
1,613,361
 
Accrued interest included in recorded investment
 
$
45
  
$
19
  
$
-
  
$
64
  
$
5,049
  
$
5,113
 
 
Impaired loans are as follows:

  
June 30,
2017
  
December 31,
2016
 
Impaired loans with no allocated allowance
 
(In thousands)
 
TDR
 
$
602
  
$
1,782
 
Non - TDR
  
-
   
1,107
 
Impaired loans with an allocated allowance
        
TDR - allowance based on collateral
  
2,375
   
3,527
 
TDR - allowance based on present value cash flow
  
68,350
   
72,613
 
Non - TDR - allowance based on collateral
  
262
   
491
 
Total impaired loans
 
$
71,589
  
$
79,520
 
         
Amount of allowance for loan losses allocated
        
TDR - allowance based on collateral
 
$
683
  
$
1,868
 
TDR - allowance based on present value cash flow
  
6,525
   
7,146
 
Non - TDR - allowance based on collateral
  
36
   
138
 
Total amount of allowance for loan losses allocated
 
$
7,244
  
$
9,152
 
 
Impaired loans by class  are as follows (1):

  
June 30, 2017
  
December 31, 2016
 
  
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
 
$
-
  
$
-
  
$
-
  
$
517
  
$
768
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
   
-
   
31
   
709
   
-
 
Commercial and industrial
  
354
   
352
   
-
   
2,341
   
3,261
   
-
 
Mortgage
                        
1-4 family
  
251
   
915
   
-
   
2
   
387
   
-
 
Resort lending
  
-
   
-
   
-
   
-
   
-
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
   
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
   
-
   
-
 
Installment
                        
Home equity - 1st lien
  
1
   
72
   
-
   
-
   
66
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
   
-
   
-
 
Boat lending
  
-
   
-
   
-
   
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
   
-
   
-
   
-
 
Other
  
-
   
-
   
-
   
-
   
-
   
-
 
   
606
   
1,339
   
-
   
2,891
   
5,191
   
-
 
With an allowance recorded:
                        
Commercial
                        
Income producing - real estate
  
7,647
   
7,835
   
594
   
7,737
   
7,880
   
554
 
Land, land development & construction-real estate
  
172
   
199
   
11
   
239
   
244
   
36
 
Commercial and industrial
  
3,178
   
3,256
   
489
   
4,902
   
5,246
   
1,654
 
Mortgage
                        
1-4 family
  
39,194
   
40,728
   
3,590
   
41,701
   
43,479
   
4,100
 
Resort lending
  
16,251
   
16,318
   
2,249
   
16,898
   
16,931
   
2,453
 
Home equity - 1st lien
  
230
   
239
   
10
   
235
   
242
   
10
 
Home equity - 2nd lien
  
180
   
214
   
24
   
315
   
398
   
16
 
Installment
                        
Home equity - 1st lien
  
1,825
   
1,952
   
87
   
1,994
   
2,117
   
118
 
Home equity - 2nd lien
  
2,147
   
2,173
   
165
   
2,415
   
2,443
   
182
 
Boat lending
  
1
   
6
   
1
   
1
   
6
   
-
 
Recreational vehicle lending
  
102
   
102
   
5
   
109
   
108
   
6
 
Other
  
361
   
394
   
19
   
394
   
426
   
23
 
   
71,288
   
73,416
   
7,244
   
76,940
   
79,520
   
9,152
 
Total
                        
Commercial
                        
Income producing - real estate
  
7,647
   
7,835
   
594
   
8,254
   
8,648
   
554
 
Land, land development & construction-real estate
  
172
   
199
   
11
   
270
   
953
   
36
 
Commercial and industrial
  
3,532
   
3,608
   
489
   
7,243
   
8,507
   
1,654
 
Mortgage
                        
1-4 family
  
39,445
   
41,643
   
3,590
   
41,703
   
43,866
   
4,100
 
Resort lending
  
16,251
   
16,318
   
2,249
   
16,898
   
16,931
   
2,453
 
Home equity - 1st lien
  
230
   
239
   
10
   
235
   
242
   
10
 
Home equity - 2nd lien
  
180
   
214
   
24
   
315
   
398
   
16
 
Installment
                        
Home equity - 1st lien
  
1,826
   
2,024
   
87
   
1,994
   
2,183
   
118
 
Home equity - 2nd lien
  
2,147
   
2,173
   
165
   
2,415
   
2,443
   
182
 
Boat lending
  
1
   
6
   
1
   
1
   
6
   
-
 
Recreational vehicle lending
  
102
   
102
   
5
   
109
   
108
   
6
 
Other
  
361
   
394
   
19
   
394
   
426
   
23
 
Total
 
$
71,894
  
$
74,755
  
$
7,244
  
$
79,831
  
$
84,711
  
$
9,152
 
                         
Accrued interest included in recorded investment
 
$
305
          
$
311
         

(1) There were no impaired purchased mortgage loans at June 30, 2017 or December 31, 2016.
 
Average recorded investment in and interest income earned on impaired loans by class for the three month periods ending June 30, follows (1):

  
2017
  
2016
 
  
Average
Recorded
Investment
  
Interest
Income
Recognized
  
Average
Recorded
Investment
  
Interest
Income
Recognized
 
With no related allowance recorded:
 
(In thousands)
 
Commercial
            
Income producing - real estate
 
$
185
  
$
-
  
$
673
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
   
335
   
-
 
Commercial and industrial
  
177
   
8
   
609
   
-
 
Mortgage
                
1-4 family
  
126
   
5
   
11
   
5
 
Resort lending
  
-
   
-
   
-
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
 
Installment
                
Home equity - 1st lien
  
1
   
2
   
1
   
-
 
Home equity - 2nd lien
  
-
   
-
   
7
   
-
 
Boat lending
  
-
   
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
   
-
 
Other
  
-
   
-
   
-
   
-
 
   
489
   
15
   
1,636
   
5
 
With an allowance recorded:
                
Commercial
                
Income producing - real estate
  
7,694
   
104
   
8,210
   
100
 
Land, land development & construction-real estate
  
170
   
2
   
1,664
   
13
 
Commercial and industrial
  
3,237
   
37
   
6,203
   
59
 
Mortgage
                
1-4 family
  
39,646
   
494
   
46,041
   
475
 
Resort lending
  
16,471
   
150
   
17,689
   
159
 
Home equity - 1st lien
  
232
   
2
   
243
   
2
 
Home equity - 2nd lien
  
186
   
1
   
181
   
4
 
Installment
                
Home equity - 1st lien
  
1,855
   
33
   
2,230
   
42
 
Home equity - 2nd lien
  
2,228
   
35
   
2,751
   
41
 
Boat lending
  
1
   
-
   
2
   
-
 
Recreational vehicle lending
  
104
   
2
   
117
   
1
 
Other
  
369
   
6
   
442
   
9
 
   
72,193
   
866
   
85,773
   
905
 
Total
                
Commercial
                
Income producing - real estate
  
7,879
   
104
   
8,883
   
100
 
Land, land development & construction-real estate
  
170
   
2
   
1,999
   
13
 
Commercial and industrial
  
3,414
   
45
   
6,812
   
59
 
Mortgage
                
1-4 family
  
39,772
   
499
   
46,052
   
480
 
Resort lending
  
16,471
   
150
   
17,689
   
159
 
Home equity - 1st lien
  
232
   
2
   
243
   
2
 
Home equity - 2nd lien
  
186
   
1
   
181
   
4
 
Installment
                
Home equity - 1st lien
  
1,856
   
35
   
2,231
   
42
 
Home equity - 2nd lien
  
2,228
   
35
   
2,758
   
41
 
Boat lending
  
1
   
-
   
2
   
-
 
Recreational vehicle lending
  
104
   
2
   
117
   
1
 
Other
  
369
   
6
   
442
   
9
 
Total
 
$
72,682
  
$
881
  
$
87,409
  
$
910
 

(1)
There were no impaired purchased mortgage loans during the three month periods ended June 30, 2017 and 2016, respectively.
 
Average recorded investment in and interest income earned on impaired loans by class for the six month periods ending June 30, follows (1):

  
2017
  
2016
 
  
Average
Recorded
Investment
  
Interest
Income
Recognized
  
Average
Recorded
Investment
  
Interest
Income
Recognized
 
With no related allowance recorded:
 
(In thousands)
 
Commercial
            
Income producing - real estate
 
$
296
  
$
-
  
$
662
  
$
2
 
Land, land development & construction-real estate
  
10
   
-
   
496
   
7
 
Commercial and industrial
  
898
   
8
   
821
   
21
 
Mortgage
                
1-4 family
  
85
   
9
   
15
   
6
 
Resort lending
  
-
   
-
   
-
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
   
-
 
Installment
                
Home equity - 1st lien
  
-
   
3
   
-
   
1
 
Home equity - 2nd lien
  
-
   
-
   
5
   
-
 
Boat lending
  
-
   
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
   
-
 
Other
  
-
   
-
   
-
   
-
 
   
1,289
   
20
   
1,999
   
37
 
With an allowance recorded:
                
Commercial
                
Income producing - real estate
  
7,708
   
209
   
8,266
   
207
 
Land, land development & construction-real estate
  
193
   
4
   
1,673
   
26
 
Commercial and industrial
  
3,792
   
72
   
5,501
   
82
 
Mortgage
                
1-4 family
  
40,331
   
958
   
46,625
   
977
 
Resort lending
  
16,613
   
311
   
17,842
   
319
 
Home equity - 1st lien
  
233
   
4
   
218
   
4
 
Home equity - 2nd lien
  
229
   
3
   
202
   
5
 
Installment
                
Home equity - 1st lien
  
1,901
   
67
   
2,274
   
84
 
Home equity - 2nd lien
  
2,290
   
70
   
2,810
   
85
 
Boat lending
  
1
   
-
   
2
   
-
 
Recreational vehicle lending
  
106
   
3
   
119
   
3
 
Other
  
377
   
13
   
451
   
16
 
   
73,774
   
1,714
   
85,983
   
1,808
 
Total
                
Commercial
                
Income producing - real estate
  
8,004
   
209
   
8,928
   
209
 
Land, land development & construction-real estate
  
203
   
4
   
2,169
   
33
 
Commercial and industrial
  
4,690
   
80
   
6,322
   
103
 
Mortgage
                
1-4 family
  
40,416
   
967
   
46,640
   
983
 
Resort lending
  
16,613
   
311
   
17,842
   
319
 
Home equity - 1st lien
  
233
   
4
   
218
   
4
 
Home equity - 2nd lien
  
229
   
3
   
202
   
5
 
Installment
                
Home equity - 1st lien
  
1,901
   
70
   
2,274
   
85
 
Home equity - 2nd lien
  
2,290
   
70
   
2,815
   
85
 
Boat lending
  
1
   
-
   
2
   
-
 
Recreational vehicle lending
  
106
   
3
   
119
   
3
 
Other
  
377
   
13
   
451
   
16
 
Total
 
$
75,063
  
$
1,734
  
$
87,982
  
$
1,845
 

(1)
There were no impaired purchased mortgage loans during the six month periods ended June 30, 2017 and 2016, respectively.
 
Cash receipts on impaired loans on non-accrual status are generally applied to the principal balance.

Troubled debt restructurings follow:
 
  
June 30, 2017
 
  
Commercial
  
Retail (1)
  
Total
 
  
(In thousands)
 
Performing TDRs
 
$
10,551
  
$
56,100
  
$
66,651
 
Non-performing TDRs(2)
  
492
   
4,184
(3) 
  
4,676
 
Total
 
$
11,043
  
$
60,284
  
$
71,327
 

  
December 31, 2016
 
  
Commercial
  
Retail (1)
  
Total
 
  
(In thousands)
 
Performing TDRs
 
$
10,560
  
$
59,726
  
$
70,286
 
Non-performing TDRs(2)
  
3,565
   
4,071
(3) 
  
7,636
 
Total
 
$
14,125
  
$
63,797
  
$
77,922
 
 
(1)
Retail loans include mortgage and installment loan segments.
(2)
Included in non-performing loans table above.
(3)
Also includes loans on non-accrual at the time of modification until six payments are received on a timely basis.

We allocated $7.2 million and $9.0 million of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2017 and December 31, 2016, respectively.

During the six months ended June 30, 2017 and 2016, 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(1):

  
Number of
Contracts
  
Pre-modification
Recorded
Balance
  
Post-modification
Recorded
Balance
 
  
(Dollars in thousands)
 
2017
         
Commercial
         
Income producing - real estate
  
-
  
$
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
   
-
 
Commercial and industrial
  
9
   
653
   
653
 
Mortgage
            
1-4 family
  
1
   
32
   
32
 
Resort lending
  
-
   
-
   
-
 
Home equity - 1st lien
  
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
-
   
-
   
-
 
Home equity - 2nd lien
  
3
   
204
   
205
 
Boat lending
  
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
 
Other
  
-
   
-
   
-
 
Total
  
13
  
$
889
  
$
890
 
             
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
 
Boat lending
  
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
 
Other
  
1
   
12
   
12
 
Total
  
7
  
$
221
  
$
224
 

(1)
There were no purchased mortgage loans classified as troubled debt restructurings during the three month periods ended June 30, 2017 and 2016, respectively.
 
Loans that have been classified as troubled debt restructurings during the six-month periods ended June 30 follow(1):

  
Number of
Contracts
  
Pre-modification
Recorded
Balance
  
Post-modification
Recorded
Balance
 
  
(Dollars in thousands)
 
2017
         
Commercial
         
Income producing - real estate
  
-
  
$
-
  
$
-
 
Land, land development & construction-real estate
  
-
   
-
   
-
 
Commercial and industrial
  
12
   
786
   
786
 
Mortgage
            
1-4 family
  
2
   
49
   
49
 
Resort lending
  
1
   
189
   
189
 
Home equity - 1st lien
  
-
   
-
   
-
 
Home equity - 2nd lien
  
-
   
-
   
-
 
Installment
            
Home equity - 1st lien
  
2
   
34
   
37
 
Home equity - 2nd lien
  
5
   
249
   
251
 
Boat lending
  
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
 
Other
  
-
   
-
   
-
 
Total
  
22
  
$
1,307
  
$
1,312
 
             
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
 
Boat lending
  
-
   
-
   
-
 
Recreational vehicle lending
  
-
   
-
   
-
 
Other
  
1
   
12
   
12
 
Total
  
20
  
$
2,480
  
$
2,527
 

(1)
There were no purchased mortgage loans classified as troubled debt restructurings during the six month periods ended June 30, 2017 and 2016, respectively.

The troubled debt restructurings described above for 2017 had no impact on the allowance for loan losses and resulted in zero charge offs during the three months ended June 30, 2017, and increased the allowance by $0.1 million and resulted in zero charge offs during the six months ended June 30, 2017.
 
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.

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 within twelve months following the modification during the three and six months ended June 30, 2017 or 2016.

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-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, and (d) 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, respectively. These ratings include 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, 2017
               
Income producing - real estate
 
$
276,218
  
$
3,344
  
$
320
  
$
202
  
$
280,084
 
Land, land development and construction - real estate
  
58,278
   
65
   
-
   
10
   
58,353
 
Commercial and industrial
  
475,372
   
13,171
   
3,272
   
541
   
492,356
 
Total
 
$
809,868
  
$
16,580
  
$
3,592
  
$
753
  
$
830,793
 
Accrued interest included in total
 
$
1,952
  
$
48
  
$
15
  
$
-
  
$
2,015
 
                     
December 31, 2016
                    
Income producing - real estate
 
$
282,886
  
$
3,787
  
$
337
  
$
628
  
$
287,638
 
Land, land development and construction - real estate
  
51,603
   
67
   
-
   
105
   
51,775
 
Commercial and industrial
  
449,365
   
9,788
   
2,998
   
4,431
   
466,582
 
Total
 
$
783,854
  
$
13,642
  
$
3,335
  
$
5,164
  
$
805,995
 
Accrued interest included in total
 
$
1,915
  
$
52
  
$
11
  
$
-
  
$
1,978
 

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, 2017
                   
800 and above
  
$
51,751
  
$
11,770
  
$
7,477
  
$
8,575
  
$
8,122
  
$
87,695
 
750-799
   
175,169
   
34,856
   
14,175
   
19,038
   
19,302
   
262,540
 
700-749
   
98,924
   
25,749
   
6,019
   
12,087
   
8,041
   
150,820
 
650-699
   
69,420
   
13,070
   
3,501
   
7,359
   
432
   
93,782
 
600-649
   
27,633
   
4,790
   
1,080
   
2,471
   
-
   
35,974
 
550-599
   
15,598
   
2,790
   
478
   
1,555
   
-
   
20,421
 
500-549
   
8,948
   
1,407
   
543
   
1,340
   
-
   
12,238
 
Under 500
   
3,839
   
90
   
253
   
182
   
-
   
4,364
 
Unknown
   
5,847
   
1,685
   
505
   
1,124
   
126
   
9,287
 
Total
  
$
457,129
  
$
96,207
  
$
34,031
  
$
53,731
  
$
36,023
  
$
677,121
 
Accrued interest included in total
  
$
1,761
  
$
379
  
$
137
  
$
244
  
$
101
  
$
2,622
 
                           
December 31, 2016
                         
800 and above
  
$
36,534
  
$
10,484
  
$
6,048
  
$
8,392
  
$
8,462
  
$
69,920
 
750-799
   
102,382
   
41,999
   
10,006
   
20,113
   
20,984
   
195,484
 
700-749
   
69,337
   
24,727
   
5,706
   
12,360
   
9,115
   
121,245
 
650-699
   
50,621
   
13,798
   
4,106
   
8,167
   
437
   
77,129
 
600-649
   
25,270
   
5,769
   
1,674
   
3,067
   
-
   
35,780
 
550-599
   
13,747
   
3,030
   
455
   
1,699
   
-
   
18,931
 
500-549
   
9,215
   
1,438
   
486
   
981
   
-
   
12,120
 
Under 500
   
5,145
   
92
   
255
   
279
   
-
   
5,771
 
Unknown
   
2,290
   
1,711
   
280
   
179
   
139
   
4,599
 
Total
  
$
314,541
  
$
103,048
  
$
29,016
  
$
55,237
  
$
39,137
  
$
540,979
 
Accrued interest included in total
  
$
1,466
  
$
450
  
$
111
  
$
226
  
$
111
  
$
2,364
 

(1) Credit scores have been updated within the last twelve months.
 
   
Installment(1)
 
   
Home
Equity
1st Lien
  
Home
Equity
2nd Lien
  
Boat Lending
  
Recreational
Vehicle
Lending
  
Other
  
Total
 
   
(In thousands)
 
June 30, 2017
                   
800 and above
  
$
1,182
  
$
925
  
$
26,334
  
$
25,972
  
$
10,384
  
$
64,797
 
750-799
   
2,168
   
3,030
   
64,018
   
44,949
   
24,758
   
138,923
 
700-749
   
1,713
   
2,438
   
24,380
   
12,980
   
14,671
   
56,182
 
650-699
   
2,312
   
1,991
   
8,913
   
3,825
   
8,894
   
25,935
 
600-649
   
1,506
   
1,506
   
1,754
   
863
   
2,420
   
8,049
 
550-599
   
1,295
   
945
   
510
   
255
   
956
   
3,961
 
500-549
   
677
   
501
   
289
   
189
   
513
   
2,169
 
Under 500
   
97
   
59
   
66
   
12
   
133
   
367
 
Unknown
   
26
   
7
   
164
   
170
   
8,449
   
8,816
 
Total
  
$
10,976
  
$
11,402
  
$
126,428
  
$
89,215
  
$
71,178
  
$
309,199
 
Accrued interest included in total
  
$
44
  
$
49
  
$
291
  
$
215
  
$
200
  
$
799
 
                           
December 31, 2016
                         
800 and above
  
$
1,354
  
$
1,626
  
$
21,422
  
$
23,034
  
$
8,911
  
$
56,347
 
750-799
   
2,478
   
3,334
   
50,508
   
35,827
   
21,918
   
114,065
 
700-749
   
1,920
   
2,686
   
20,045
   
11,049
   
13,183
   
48,883
 
650-699
   
2,852
   
2,541
   
7,559
   
3,205
   
8,913
   
25,070
 
600-649
   
1,691
   
1,775
   
1,846
   
821
   
2,269
   
8,402
 
550-599
   
1,231
   
1,063
   
882
   
280
   
833
   
4,289
 
500-549
   
981
   
692
   
440
   
189
   
511
   
2,813
 
Under 500
   
114
   
220
   
73
   
16
   
211
   
634
 
Unknown
   
29
   
21
   
150
   
114
   
5,570
   
5,884
 
Total
  
$
12,650
  
$
13,958
  
$
102,925
  
$
74,535
  
$
62,319
  
$
266,387
 
Accrued interest included in total
  
$
54
  
$
59
  
$
264
  
$
203
  
$
191
  
$
771
 

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

Foreclosed residential real estate properties included in other real estate and repossessed assets on our Condensed Consolidated Statements of Financial Condition totaled $2.0 million and $1.9 million at June 30, 2017 and December 31, 2016, respectively.  Retail mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process according to local requirements totaled $1.2 million and $1.0 million at  June 30, 2017 and December 31, 2016, respectively.