Loans are presented net of unearned income of $2.7 million and $2.1 million at September 30, 2015 and December 31, 2014 and net of a discount related to purchase accounting fair value adjustments of $12.0 million and $2.0 million at September 30, 2015 and December 31, 2014. The following table indicates the composition of the loans as of the dates presented:



(dollars in thousands)	September 30, 2015		December 31, 2014
Commercial
Commercial real estate	$	2,111,585	$	1,682,236
Commercial and industrial	1,237,915		994,138
Commercial construction	384,328		216,148
Total Commercial Loans	3,733,828		2,892,522
Consumer
Residential mortgage	625,251		489,586
Home equity	467,698		418,563
Installment and other consumer	91,122		65,567
Consumer construction	8,064		2,508
Total Consumer Loans	1,192,135		976,224
Total Portfolio Loans	4,925,963		3,868,746
Loans held for sale	13,794		2,970
Total Loans	$	4,939,757	$	3,871,716

We attempt to limit our exposure to credit risk by diversifying our loan portfolio by segment, geography, collateral and industry and actively managing concentrations. When concentrations exist in certain segments, we mitigate this risk by monitoring the relevant economic indicators and internal risk rating trends and through stress testing of the loans in these segments. Total commercial loans represented 76 percent of total portfolio loans at September 30, 2015 and 75 percent of total portfolio loans at December 31, 2014. Within our commercial portfolio, the CRE and commercial construction portfolios combined comprised $2.5 billion or 67 percent of total commercial loans and 51 percent of total portfolio loans at September 30, 2015 and 66 percent of total commercial loans and 49 percent of total portfolio loans at December 31, 2014. Of the $2.5 billion of CRE and commercial construction loans, $424.0 million were added as a result of the Merger. Further segmentation of the CRE and commercial construction portfolios by industry and collateral type reveal no concentration in excess of 7.0 percent of total loans at September 30, 2015 and December 31, 2014.

Our market area includes Pennsylvania and the contiguous states of Ohio, West Virginia, New York and Maryland. The majority of our commercial and consumer loans are made to businesses and individuals in this market area resulting in a geographic concentration. We believe our knowledge and familiarity with customers and conditions locally outweighs this geographic concentration risk. The conditions of the local and regional economies are monitored closely through publicly available data as well as information supplied by our customers. Management believes underwriting guidelines, active monitoring of economic conditions and ongoing review by credit administration mitigates the concentration risk present in the loan portfolio. Our CRE and commercial construction portfolios had out-of-market exposure of 6.4 percent of the combined portfolio and 3.3 percent of total loans at September 30, 2015 and 8.0 percent of the combined portfolio and 3.9 percent of total loans at December 31, 2014.

Troubled debt restructurings, or TDRs, are loans where we, for economic or legal reasons related to a borrower’s financial difficulties, grant a concession to the borrower that we would not otherwise grant. We strive to identify borrowers in financial difficulty early and work with them to modify the terms before their loan reaches nonaccrual status. These modified terms generally include extensions of maturity dates at a stated interest rate lower than the current market rate for a new loan with similar risk characteristics, reductions in contractual interest rates or principal deferment. While unusual, there may be instances of principal forgiveness. These modifications are generally for longer term periods that would not be considered insignificant. Additionally, we classify loans where the debt obligation has been discharged through a Chapter 7 Bankruptcy and not reaffirmed as TDRs.

We individually evaluate all substandard commercial loans that have experienced a forbearance or change in terms agreement, as well as all substandard consumer and residential mortgage loans that entered into an agreement to modify their existing loan to determine if they should be designated as TDRs. All TDRs are considered to be impaired loans and will be reported as impaired loans for the remaining life of the loan, unless the restructuring agreement specifies an interest rate equal to or greater than the rate that would be accepted at the time of the restructuring for a new loan with comparable risk and it is fully expected that the remaining principal and interest will be collected according to the restructured agreement. Further, all impaired loans are reported as nonaccrual loans unless the loan is a TDR that has met the requirements to be returned to accruing status. TDRs can be returned to accruing status if the ultimate collectability of all contractual amounts due, according to the restructured agreement, is not in doubt and there is a period of a minimum of six months of satisfactory payment performance by the borrower either immediately before or after the restructuring.

The following table summarizes the restructured loans as of the dates presented:



	September 30, 2015						December 31, 2014
(dollars in thousands)	Performing TDRs		Nonperforming TDRs		Total TDRs		Performing TDRs		Nonperforming TDRs		Total TDRs
Commercial real estate	$	8,062	$	3,552	$	11,614	$	16,939	$	2,180	$	19,119
Commercial and industrial	6,360		1,839		8,199		8,074		356		8,430
Commercial construction	5,627		1,610		7,237		5,736		1,869		7,605
Residential mortgage	2,609		591		3,200		2,839		459		3,298
Home equity	3,363		412		3,775		3,342		562		3,904
Installment and other consumer	28		88		116		53		10		63
Total	$	26,049	$	8,092	$	34,141	$	36,983	$	5,436	$	42,419

There were three TDRs that returned to accruing status totaling $0.2 million during the three months ended September 30, 2015 and nine TDRs that returned to accruing status totaling $0.5 million for the nine months ended September 30, 2015. There were five TDRs for $0.5 million returned to accruing status during the three months ended September 30, 2014 and ten TDRs for $2.0 million were returned to accruing status during the nine months ended September 30, 2014.

The following tables present the restructured loans during the periods presented:



	Three Months Ended September 30, 2015								Three Months Ended September 30, 2014
(dollars in thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽¹⁾		Total Difference in Recorded Investment			Number of Loans	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽¹⁾		Total Difference in Recorded Investment
Commercial real estate
Principal deferral	—	$	—	$	—	$	—		1	$	487	$	475	$	(12	)
Chapter 7 bankruptcy⁽²⁾	—	—		—		—			1	83		83		—
Maturity date extension	1	264		260		(4		)	—	—		—		—
Commercial and industrial
Principal deferral	—	—		—		—			2	381		366		(15		)
Commercial Construction
Maturity date extension	2	813		812		(1		)	—	—		—		—
Residential mortgage
Chapter 7 bankruptcy⁽²⁾	2	74		74		—			2	135		134		(1		)
Maturity date extension	1	180		180		—			—	—		—		—
Home equity
Chapter 7 bankruptcy⁽²⁾	5	115		110		(5		)	2	14		14		—
Maturity date extension and interest rate reduction	2	138		138		—			2	96		96		—
Installment and other consumer
Chapter 7 bankruptcy⁽²⁾	1	9		4		$	(5	)	2	14		11		$	(3	)
Total by Concession Type
Principal deferral	—	—		—		—			3	868		841		(27		)
Maturity date extension and interest rate reduction	2	138		138		—			2	96		96		—
Chapter 7 bankruptcy⁽²⁾	8	198		188		(10		)	7	246		242		(4		)
Maturity date extension	4	1,257		1,252		(5		)	—	—		—		—
Total	14	$	1,593	$	1,578	$	(15	)	12	$	1,210	$	1,179	$	(31	)
⁽¹⁾ Excludes loans that were fully paid off or fully charged-off by period end. The pre-modification balance represents the balance outstanding prior to modification. The post-modification balance represents the outstanding balance at period end. ⁽²⁾ Chapter 7 bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.



	Nine Months Ended September 30, 2015								Nine Months Ended September 30, 2014
(dollars in thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽¹⁾		Total Difference in Recorded Investment			Number of Loans	Pre-Modification Outstanding Recorded Investment⁽¹⁾		Post-Modification Outstanding Recorded Investment⁽¹⁾		Total Difference in Recorded Investment
Commercial real estate
Principal deferral	2	$	2,851	$	1,841	$	(1,010	)	2	$	616	$	602	$	(14	)
Chapter 7 bankruptcy⁽²⁾	—	—		—		—			1	83		83		—
Maturity date extension	1	264		260		(4		)	—	—		—		—
Commercial and industrial
Principal forgiveness	1	400		273		(127		)	—	—		—		—
Principal deferral	6	661		363		(298		)	2	381		366		(15		)
Chapter 7 bankruptcy⁽²⁾	1	3		—		(3		)	1	287		286		(1		)
Maturity date extension	1	780		720		(60		)	—	—		—		—
Commercial Construction
Principal deferral	1	104		—		(104		)	—	—		—		—
Maturity date extension	2	813		812		(1		)	1	1,019		1,019		—
Residential mortgage
Chapter 7 bankruptcy⁽²⁾	2	74		74		—			7	464		461		(3		)
Maturity date extension	1	180		180		—			—	—		—		—
Maturity date extension and interest rate reduction	2	225		229		4			—	—		—		—
Home equity
Chapter 7 bankruptcy⁽²⁾	17	428		389		(39		)	12	283		265		(18		)
Maturity date extension and interest rate reduction	2	138		138		—			2	96		96		—
Maturity date extension	1	71		70		(1		)	—	—		—		—
Installment and other consumer
Chapter 7 bankruptcy⁽²⁾	1	9		4		$	(5	)	3	23		20		$	(3	)
Total by Concession Type
Principal forgiveness	1	$	400	$	273	$	(127	)	—	$	—	$	—	$	—
Principal deferral	9	3,616		2,204		(1,412		)	4	997		968		(29		)
Chapter 7 bankruptcy⁽²⁾	21	514		467		(47		)	24	1,140		1,115		(25		)
Maturity date extension and interest rate reduction	4	363		367		4			2	96		96		—
Maturity date extension	6	2,108		2,042		(66		)	1	1,019		1,019		—
Total	41	7,001		5,353		$	(1,648	)	31	$	3,252	$	3,198	$	(54	)
⁽¹⁾ Excludes loans that were fully paid off or fully charged-off by period end. The pre-modification balance represents the balance outstanding prior to modification. The post-modification balance represents the outstanding balance at period end. ⁽²⁾ Chapter 7 bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.

For the three months ended September 30, 2015, we modified two C&I loans totaling $1.1 million, 11 commercial construction loans totaling $7.1 million, three CRE loans totaling $4.3 million, one home equity loan totaling $0.1 million and one residential real estate loan totaling $0.1 million that were not considered to be TDRs. For the nine months ended September 30, 2015 we modified eight C&I loans totaling $6.8 million, 13 commercial construction loans totaling $8.4 million, six CRE loans totaling $5.3 million, three home equity loans totaling $0.3 million and one residential real estate loan totaling $0.1 million that were not considered to be TDRs. The modifications primarily represented instances where we were adequately compensated through additional collateral or a higher interest rate or there was an insignificant delay in payment of three months or less. As of September 30, 2015 we have no commitments to lend additional funds on any TDRs.

Defaulted TDRs are defined as loans having a payment default of 90 days or more after the restructuring takes place. The following tables present a summary of TDRs which defaulted during the periods presented that had been restructured within the last 12 months prior to defaulting:



	Defaulted TDRs
	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014
	Three Months Ended September 30, 2015			Three Months Ended September 30, 2014
(dollars in thousands)	Number of Defaults	Recorded Investment		Number of Defaults	Recorded Investment
Commercial real estate	—	$	—	—	$	—
Commercial and Industrial	—	—		—	—
Commercial construction	—	—		—	—
Residential mortgage	—	—		—	—
Home equity	—	$	—	—	$	—
Installment and other consumer	—	—		—	—
Consumer construction	—	—		—	—
Total	—	$	—	—	$	—



	Defaulted TDRs
	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
	Nine Months Ended September 30, 2015			Nine Months Ended September 30, 2014
(dollars in thousands)	Number of Defaults	Recorded Investment		Number of Defaults	Recorded Investment
Commercial real estate	—	$	—	—	$	—
Commercial and Industrial	—	—		—	—
Commercial construction	—	—		—	—
Residential mortgage	1	$	183	1	$	72
Home equity	3	124		—	—
Installment and other consumer	—	—		—	—
Consumer construction	—	—		—	—
Total	4	$	307	1	$	72

The following table is a summary of nonperforming assets as of the dates presented:



	Nonperforming Assets
(dollars in thousands)	September 30, 2015		December 31, 2014
Nonperforming Assets
Nonaccrual loans	$	15,716	$	7,021
Nonaccrual TDRs	8,092		5,436
Total nonaccrual loans	23,808		12,457
OREO	472		166
Total Nonperforming Assets	$	24,280	$	12,623