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Loans and Loans Held for Sale
 12 Months Ended
Dec. 31, 2016
Receivables [Abstract]  
Loans and Loans Held for Sale
LOANS AND LOANS HELD FOR SALE
Loans are presented net of unearned income of $5.2 million and $3.2 million at December 31, 2016 and 2015 and net of a discount related to purchase accounting fair value adjustments of $7.1 million and $10.9 million at December 31, 2016 and December 31, 2015. The following table indicates the composition of the acquired and originated loans as of the dates presented:
 
December 31,
(dollars in thousands)
2016
2015
Commercial
 
 
Commercial real estate
$
2,498,476

$
2,166,603

Commercial and industrial
1,401,035

1,256,830

Commercial construction
455,884

413,444

Total Commercial Loans
4,355,395

3,836,877

Consumer
 
 
Residential mortgage
701,982

639,372

Home equity
482,284

470,845

Installment and other consumer
65,852

73,939

Consumer construction
5,906

6,579

Total Consumer Loans
1,256,024

1,190,735

Total Portfolio Loans
5,611,419

5,027,612

Loans held for sale
3,793

35,321

Total Loans
$
5,615,212

$
5,062,933



As of December 31, 2016, our acquired loans from the Merger were $543.3 million including $273.0 million of CRE, $140.8 million of C&I, $33.5 million of commercial construction, $74.0 million of residential mortgage and $22.0 million of home equity, installment and other consumer construction. These acquired loans decreased from acquired loans at December 31, 2015 of $673.3 million, including $293.2 million of CRE, $167.7 million of C&I, $69.2 million of commercial construction, $115.6 million of residential mortgage, $27.5 million of home equity, installment and other consumer construction.
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 reviewing the relevant economic indicators and internal risk rating trends and through stress testing of the loans in these segments. Total commercial loans represented 78 percent of total portfolio loans at December 31, 2016 and 76 percent of total portfolio loans at December 31, 2015. Within our commercial portfolio, the CRE and Commercial Construction portfolios combined comprised $3.0 billion or 68 percent of total commercial loans and 53 percent of total portfolio loans at December 31, 2016 and comprised of $2.6 billion or 67 percent of total commercial loans and 51 percent of total portfolio loans at December 31, 2015. Further segmentation of the CRE and Commercial Construction portfolios by collateral type reveals no concentration in excess of seven percent of total loans at either December 31, 2016 or December 31, 2015.
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 and information supplied by our customers. Our CRE and Commercial Construction portfolios have out-of-market exposure of 5.2 percent of the combined portfolio and 2.7 percent of total portfolio loans at December 31, 2016 and 5.8 percent of the combined portfolio and 3.0 percent of total portfolio loans at December 31, 2015.
The decrease in loans held for sale of $31.5 million from December 31, 2015 primarily related to the sale of our credit card portfolio in the first quarter of 2016, which was sold for $25.0 million and resulted in a $2.1 million gain in 2016. The remaining balance related to mortgages held for sale.
The following table summarizes the restructured loans as of the dates presented:
 
December 31, 2016
 
December 31, 2015
(dollars in thousands)
Performing
TDRs

Nonperforming
TDRs

Total
TDRs

 
Performing
TDRs

Nonperforming
TDRs

Total
TDRs

Commercial real estate
$
2,994

$
646

$
3,640

 
$
6,822

$
3,548

$
10,370

Commercial and industrial
1,387

4,493

5,880

 
6,321

1,570

7,891

Commercial construction
2,966

430

3,396

 
5,013

1,265

6,278

Residential mortgage
2,375

5,068

7,443

 
2,590

665

3,255

Home equity
3,683

954

4,637

 
3,184

523

3,707

Installment and other consumer
18

7

25

 
25

88

113

Total
$
13,423

$
11,598

$
25,021

 
$
23,955

$
7,659

$
31,614


The following tables present the restructured loans for the 12 months ended December 31:
 
2016
(dollars in thousands)
Number of
Loans

 
Pre-Modification
Outstanding
Recorded
Investment(1)

 
Post-Modification
Outstanding
Recorded
Investment(1)

 
Total
Difference
in Recorded
Investment

Commercial real estate
 
 
 
 
 
 
 
Interest Rate Reduction
1

 
$
250

 
$
242

 
$
(8
)
Chapter 7 bankruptcy(2)
1

 
709

 
646

 
(63
)
Commercial and industrial
 
 
 
 
 
 
 
Principal deferral
5

 
985

 
986

 
1

Maturity date extension
4

 
4,756

 
3,334

 
(1,422
)
Commercial construction
 
 
 
 
 
 
 
Maturity date extension
3

 
1,251

 
1,151

 
(100
)
Residential mortgage
 
 
 
 
 
 
 
Principal deferral
1

 
3,273

 
3,133

 
(140
)
Maturity date extension
1

 
483

 
414

 
(69
)
Maturity date extension and interest rate reduction
1

 
280

 
279

 
(1
)
Chapter 7 bankruptcy(2)
7

 
439

 
413

 
(26
)
Home equity
 
 
 
 
 
 
 
Maturity date extension
5

 
305

 
298

 
(7
)
Maturity date extension and interest rate reduction
2

 
604

 
598

 
(6
)
Principal deferral
1

 
47

 
45

 
(2
)
Chapter 7 bankruptcy(2)
19

 
676

 
643

 
(33
)
Installment and other consumer
 
 
 
 
 
 
 
Chapter 7 bankruptcy(2)
2

 
16

 
10

 
(6
)
Total by Concession Type
 
 
 
 
 
 
 
Principal deferral
7

 
4,305

 
4,164

 
(141
)
Interest rate reduction
1

 
250

 
242

 
(8
)
Maturity date extension and interest rate reduction
3

 
884

 
877

 
(7
)
Maturity date extension
13

 
6,795

 
5,197

 
(1,598
)
Chapter 7 bankruptcy(2)
29

 
1,840

 
1,712

 
(128
)
Total
53

 
$
14,074

 
$
12,192

 
$
(1,882
)
(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.
 
2015
(dollars in thousands)
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
)
Maturity date extension
3

 
438

 
427

 
(11
)
Commercial and industrial
 
 
 
 
 
 
 
Principal deferral
6

 
661

 
363

 
(298
)
Maturity date extension
2

 
824

 
728

 
(96
)
Commercial construction
 
 
 
 
 
 
 
Maturity date extension
3

 
1,434

 
1,432

 
(2
)
Residential mortgage
 
 
 
 
 
 
 
Maturity date extension
8

 
545

 
265

 
(280
)
Maturity date extension and interest rate reduction
1

 
207

 
205

 
(2
)
Chapter 7 bankruptcy(2)
7

 
428

 
226

 
(202
)
Home Equity
 
 
 
 
 
 
 
Maturity date extension and interest rate reduction
3

 
203

 
201

 
(2
)
Maturity date extension
1

 
71

 
70

 
(1
)
Chapter 7 bankruptcy(2)
23

 
619

 
576

 
(43
)
Installment and other consumer
 
 
 
 
 
 
 
Chapter 7 bankruptcy(2)
1

 
9

 
4

 
(5
)
Total by Concession Type
 
 
 
 
 
 
 
Principal deferral
8

 
3,512

 
2,204

 
(1,308
)
Maturity date extension and interest rate reduction
4

 
410

 
406

 
(4
)
Maturity date extension
17

 
3,312

 
2,922

 
(390
)
Chapter 7 bankruptcy(2)
31

 
1,056

 
806

 
(250
)
Total
60

 
$
8,290

 
$
6,338

 
$
(1,952
)
(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.
During 2016, we modified 18 loans that were not considered to be TDRs, including 15 C&I loans for $25.6 million, and three CRE loans for $3.1 million. 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. As of December 31, 2016, we have one commitment for $0.8 million to lend additional funds on any TDRs.
We returned five TDRs totaling $0.9 million to accruing status during 2016. We returned eight TDRs to accruing status during 2015 totaling $0.4 million.
Defaulted TDRs are defined as loans having a payment default of 90 days or more after the restructuring takes place. There were no TDRs that defaulted during the years ended December 31, 2016 and 2015 that were restructured within the last 12 months prior to defaulting.
The following table is a summary of nonperforming assets as of the dates presented:
 
December 31,
(dollars in thousands)
2016
 
2015
Nonperforming Assets
 
 
 
Nonaccrual loans
$
31,037

 
$
27,723

Nonaccrual TDRs
11,598

 
7,659

Total nonaccrual loans
42,635

 
35,382

OREO
679

 
354

Total Nonperforming Assets
$
43,314

 
$
35,736


NPAs increased $7.6 million to $43.3 million during 2016 compared to $35.7 million for the year ended 2015, primarily due to subsequent deterioration on acquired loans since the acquisition date of $16.9 million offset by loan payoffs and charge-offs.
We have granted loans to certain officers and directors of S&T and to certain affiliates of the officers and directors in the ordinary course of business. These loans were made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and did not involve more than normal risk of collectability.
The following table presents a summary of the aggregate amount of loans to any such persons as of December 31:
(dollars in thousands)
2016
 
2015
Balance at beginning of year
$
24,517

 
$
27,368

New loans
22,740

 
24,743

Repayments
(22,090
)
 
(27,594
)
Balance at End of Year
$
25,167

 
$
24,517