LOANS AND LOANS HELD FOR SALE

Loans are presented net of unearned income of $4.7 million and $5.3 million at March 31, 2019 and December 31, 2018.

The following table indicates the composition of loans as of the dates presented:



(dollars in thousands)	March 31, 2019		December 31, 2018
Commercial
Commercial real estate	$	2,901,625	$	2,921,832
Commercial and industrial	1,513,007		1,493,416
Commercial construction	245,658		257,197
Total Commercial Loans	4,660,290		4,672,445
Consumer
Residential mortgage	729,914		726,679
Home equity	463,566		471,562
Installment and other consumer	70,960		67,546
Consumer construction	10,722		8,416
Total Consumer Loans	1,275,162		1,274,203
Total Portfolio Loans	5,935,452		5,946,648
Loans held for sale	2,706		2,371
Total Loans	$	5,938,158	$	5,949,019

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 79 percent of total portfolio loans at both March 31, 2019 and December 31, 2018. Within our commercial portfolio, the Commercial Real Estate, or CRE, and Commercial Construction portfolios combined comprised $3.1 billion or 68 percent of total commercial loans at March 31, 2019 and $3.2 billion or 68 percent of total commercial loans at December 31, 2018 and 53 percent of total portfolio loans at both March 31, 2019 and December 31, 2018. Further segmentation of the CRE and Commercial Construction portfolios by collateral type reveals no concentration in excess of 13.2 percent of both total CRE and Commercial Construction loans at March 31, 2019 and 14.0 percent at December 31, 2018.

We lend primarily in 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 geography, resulting in a 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 exposure outside of this geography of 5.7 percent of the combined portfolios and 3.0 percent of total portfolio loans at March 31, 2019. This compares to 5.4 percent of the combined portfolios and 2.9 percent of total portfolio loans at December 31, 2018.

We individually evaluate all substandard commercial loans that have experienced a forbearance or change in terms agreement, and 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 troubled debt restructurings, or 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 restructured loans as of the dates presented:



	March 31, 2019						December 31, 2018
(dollars in thousands)	Performing TDRs		Nonperforming TDRs		Total TDRs		Performing TDRs		Nonperforming TDRs		Total TDRs
Commercial real estate	$	2,019	$	1,074	$	3,093	$	2,054	$	1,139	$	3,193
Commercial and industrial	13,447		3,463		16,910		7,026		6,646		13,672
Commercial construction	1,913		406		2,319		1,912		406		2,318
Residential mortgage	2,025		1,520		3,545		2,214		1,543		3,757
Home equity	3,590		1,406		4,996		3,568		1,349		4,917
Installment and other consumer	8		4		12		12		5		17
Total	$	23,002	$	7,873	$	30,875	$	16,786	$	11,088	$	27,874

There were three TDRs totaling $1.7 million that returned to accruing status during the three months ended March 31, 2019 and no TDRs that returned to accruing status during the three months ended March 31, 2018.

The following tables present the restructured loans by loan segment and by type of concession for the three months ended March 31, 2019 and 2018:



	Three Months Ended March 31, 2019								Three Months Ended March 31, 2018
(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
Totals by Loan Segment
Commercial and Industrial
Maturity date extension	—	$	—	$	—	$	—		2	$	768	$	708	$	(60	)
Maturity date extension and interest rate reduction	1	5,201		5,201		—			—	—		—		—
Principal deferral	—	—		—		—			6	5,355		5,333		(22		)
Total Commercial and Industrial	1	5,201		5,201		—			8	6,123		6,041		(82		)
Commercial Construction		.
Chapter 7 bankruptcy⁽²⁾	—	—		—		—			2	158		157		(1		)
Total Commercial Construction	—	—		—		—			2	158		157		(1		)
Residential Mortgage
Chapter 7 bankruptcy⁽²⁾	1	49		49		—			—	—		—		—
Total Residential Mortgage	1	49		49		—			—	—		—		—
Home equity
Chapter 7 bankruptcy⁽²⁾	7	191		168		(23		)	9	578		555		(23		)
Interest rate reduction	1	81		81		—			—	—		—		—
Total Home Equity	8	272		249		(23		)	9	578		555		(23		)
Installment and Other Consumer
Chapter 7 bankruptcy⁽²⁾	—	—		—		—			2	17		17		—
Total Installment and Other Consumer	—	$	—	$	—	$	—		2	$	17	$	17	$	—
Totals by Concession Type
Maturity date extension	—	$	—	$	—	$	—		2	$	768	$	708	$	(60	)
Maturity date extension and interest rate reduction	1	5,201		5,201		—			—	—		—		—
Principal deferral	—	—		—		—			6	5,355		5,333		(22		)
Chapter 7 bankruptcy(2)	8	240		217		(23		)	13	753		729		(24		)
Interest rate reduction	1	81		81		—			—	—		—		—
Total	10	$	5,522	$	5,499	$	(23	)	21	$	6,876	$	6,770	$	(106	)
⁽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.

As of March 31, 2019, we had 14 commitments to lend an additional $13.0 million on TDRs. 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 three months ended March 31, 2019 and 2018 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:



		Nonperforming Assets
(dollars in thousands)	March 31, 2019			December 31, 2018
Nonperforming Assets
Nonaccrual loans		$	40,077		$	34,985
Nonaccrual TDRs		7,873			11,088
Total Nonaccrual Loans		47,950			46,073
OREO		2,828			3,092
Total Nonperforming Assets		$	50,778		$	49,165