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Loans and Loans Held for Sale
 12 Months Ended
Dec. 31, 2020
Receivables [Abstract]  
LOANS AND LOANS HELD FOR SALE LOANS AND LOANS HELD FOR SALE
Loans are presented net of unearned income of $16.0 million and $4.6 million at December 31, 2020 and 2019 and net of a discount related to purchase accounting fair value adjustments of $8.6 million and $12.3 million at December 31, 2020 and December 31, 2019.
The following table summarizes the composition of originated and acquired loans as of the dates presented:
December 31,
(dollars in thousands)20202019
Commercial
Commercial real estate$2,791,947 $3,059,592 
Commercial and industrial1,559,552 1,480,529 
Commercial construction466,077 370,060 
Business banking1,160,067 846,790 
Total Commercial Loans5,977,643 5,756,971 
Consumer
Consumer Real Estate1,167,332 1,295,207 
Other Consumer80,885 84,974 
Total Consumer Loans1,248,217 1,380,181 
Total Portfolio Loans7,225,860 7,137,152 
Loans held for sale18,528 5,256 
Total Loans(1)
$7,244,388 $7,142,408 
(1) Excludes interest receivable of $24.7 million at December 31, 2020 and $22.1 million at December 31, 2019. Interest receivable is included in other assets in the Consolidated Balance Sheets.

Commercial and industrial loans, or C&I, included $465 million of loans originated under the Paycheck Protection Program, or PPP, at December 31, 2020. On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security, or CARES Act was signed into law. The CARES Act included the PPP, a program designed to aid small and medium sized businesses through federally guaranteed loans distributed through banks. PPP loans are forgivable, in whole or in part, if the proceeds are used for payroll and other permitted expenses in accordance with the requirements of the PPP. The loans are 100 percent guaranteed by the Small Business Administration, or SBA. These loans carry a fixed rate of 1.00 percent and a term of two years, or five years for loans approved by the SBA, on or after June 5, 2020. Payments are deferred for at least six months of the loan. The SBA pays us a processing fee ranging from 1.0 percent to 5.0 percent based on the size of the loan. Interest is accrued as earned and loan origination fees and direct costs are deferred and accreted or amortized into interest income over the contractual life of the loan using the level yield method. When a PPP loan is paid off or forgiven by the SBA, the remaining unaccreted or unamortized net origination fees or costs will be immediately recognized into income.
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 December 31, 2020 and 77 percent at December 31, 2019. Within our commercial portfolio, the CRE and Commercial Construction portfolios combined comprised $3.7 billion or 66 percent of total commercial loans and 51 percent of total portfolio loans at December 31, 2020 and comprised $3.8 billion or 69 percent of total commercial loans and 53 percent of total portfolio loans at December 31, 2019. Further segmentation of the CRE and Commercial Construction portfolios by collateral type reveals no concentration in excess of 15 percent of both total CRE and Commercial Construction loans at December 31, 2020 and 11 percent at December 31, 2019.
We lend primarily in Pennsylvania and the contiguous states of Ohio, New York, West Virginia 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. We also use subscription services for additional geographic and industry specific information. Our CRE and Commercial Construction portfolios have exposure outside this geography of 5.9 percent of the combined portfolios at December 31, 2020 and 5.4 percent at December 31, 2019. Exposure of total portfolio loans was 3.0 percent at December 31, 2020 compared to 2.9 percent of total portfolio loans at December 31, 2019.
The following table summarizes our restructured loans as of the dates presented:
December 31, 2020
(dollars in thousands)Performing
TDRs		Nonperforming
TDRs		Total
TDRs
Commercial real estate$14 $16,654 $16,668 
Commercial and industrial7,090 9,885 16,975 
Commercial construction3,267 — 3,267 
Business banking1,503 430 1,933 
Consumer real estate5,581 2,319 7,900 
Other consumer5 — 5 
Total(1)
$17,460 $29,289 $46,748 
(1) Refer to Note 1, Basis of Presentation for details of reclassification of our portfolio segments related to the adoption of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
December 31, 2019
(dollars in thousands)Performing
TDRs		Nonperforming
TDRs		Total
TDRs
Commercial real estate$22,233 $6,713 $28,946 
Commercial and industrial6,909 695 7,604 
Commercial construction1,425 — 1,425 
Residential mortgage2,013 822 2,835 
Home equity4,371 678 5,049 
Other consumer9 4 13 
Total$36,960 $8,912 $45,872 
The significant increase in nonperforming TDRs at December 31, 2020 compared to December 31, 2019 was primarily related to a $21.3 million CRE relationship that went nonaccrual in the first quarter of 2020 and was charged down by $10.0 million in the third quarter of 2020, leaving a remaining outstanding balance of $11.3 million and an $11.2 million C&I relationship that went nonaccrual and was charged down by $1.6 million during the fourth quarter of 2020 leaving a remaining outstanding balance of $9.6 million. Both relationships experienced continued deterioration as a result of the COVID-19 pandemic.
The following tables present the restructured loans by loan segment and by type of concession for the years ended December 31:
2020
(dollars in thousands)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 Real Estate
Payment deferral 1 5,292 4,791 (501)
Total Commercial Real Estate1 5,292 4,791 (501)
Business Banking
Maturity date extension1 333 165 (168)
Total Business Banking1 333 165 (168)
Commercial and Industrial
Maturity date extension1 11,195 9,605 (1,590)
Maturity date extension and interest rate reduction1 3,735 3,735 — 
Payment delay and below market interest rate2 362 354 (8)
Payment deferral 1 93 22 (71)
Total Commercial and Industrial5 15,385 13,716 (1,669)
Commercial Construction
Maturity date extension3 2,592 2,329 (263)
Total Commercial Construction3 2,592 2,329 (263)
Consumer Real Estate
Consumer bankruptcy(2)
22 988 956 (32)
Maturity date extension and reduction in payment6 670 660 (10)
Payment deferral1 30 29 (1)
Total Consumer Real Estate29 1,688 1,645 (43)
Other Consumer
Consumer bankruptcy(2)
1 5 4 (1)
Total Other Consumer1 $5 $4 $(1)
Totals by Concession Type
Payment deferral 3 5,415 4,842 (573)
Maturity date extension 5 14,120 12,099 (2,021)
Maturity date extension and interest rate reduction1 3,735 3,735 — 
Payment delay and below market interest rate2 362 354 (8)
Consumer bankruptcy(2)
23 993 960 (33)
Maturity date extension and reduction in payment6 670 660 (10)
Total(3)
40 $25,295 $22,650 $(2,645)
(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) Consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(3) Refer to Note 1, Basis of Presentation for details of reclassification of our portfolio segments related to the adoption of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
2019
(dollars in thousands)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 Real Estate
Maturity date extension and interest rate reduction1 150 145 (6)
Principal deferral3 23,517 23,059 (458)
Principal deferral and maturity date extension1 436 436 — 
Below market interest rate2 569 1,519 950 
Total Commercial Real Estate7 24,672 25,159 486 
Commercial and Industrial
Maturity date extension and interest rate reduction1 4,751 4,136 (616)
Principal deferral1 1,250 1,250 — 
Principal deferral and maturity date extension1 292 275 (17)
Total Commercial and Industrial3 6,294 5,661 (633)
Residential Mortgage
Principal deferral and maturity date extension3 183 183 — 
Consumer bankruptcy(2)
3 165 157 (9)
Total Residential Mortgage6 348 340 (9)
Home equity
Principal deferral and maturity date extension2 39 39 — 
Interest rate reduction2 190 188 (2)
Consumer bankruptcy(2)
29 886 810 (77)
Total Home Equity33 1,116 1,037 (79)
Installment and Other Consumer
Consumer bankruptcy(2)
4 16 11 (5)
Total Installment and Other Consumer4 $16 $11 $(5)
Totals by Concession Type
Maturity date extension and interest rate reduction2 4,902 4,280 (622)
Principal deferral4 24,767 24,309 (458)
Principal deferral and Maturity date extension7 950 933 (17)
Interest rate reduction2 190 188 (2)
Below market interest rate2 569 1,519 950 
Consumer bankruptcy(2)
36 1,068 977 (91)
Total(3)
53 $32,446 $32,206 $(240)
(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) Consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(3) Refer to Note 1, Basis of Presentation for details of reclassification of our portfolio segments related to the adoption of ASU 2016-13 Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.
In response to the coronavirus, or COVID-19, pandemic and its economic impact on our customers, we implemented a short-term modification program that complies with the CARES Act to provide temporary payment relief to those borrowers directly impacted by COVID-19 who were not more than 30 days past due as of December 31, 2019. This program allows for a deferral of payments for 90 days and up to a maximum of 180 days for our commercial customers. The customer remains responsible for deferred payments along with any additional interest accrued during the deferral period. For our consumer customers, interest does not accrue during the deferral period and the maturity date is extended by the length of the deferral period. Under the applicable guidance, none of these loans were considered restructured during 2020. We had 52 loans that were modified totaling $195.6 million at December 31, 2020.
We had 20 commitments for $0.8 million to lend additional funds on TDRs at December 31, 2020 compared to 24 commitments for $4.6 million at December 31, 2019. We had one TDR with a total loan balance of $0.1 million that returned to accruing status during 2020. We returned six TDRs totaling $0.5 million to accruing status during 2019.
Defaulted TDRs are defined as loans having a payment default of 90 days or more after the restructuring takes place that were restructured within the last 12 months prior to defaulting. There were six TDRs totaling $11.8 million that defaulted during the year ended December 31, 2020 compared to no TDRs that defaulted during 2019. The increase in defaulted TDRs was primarily related to a $21.3 million CRE relationship that went nonaccrual in the first quarter of 2020 and charged down by $10.0 million in the third quarter of 2020, leaving a remaining outstanding balance of $11.3 million. The relationship experienced continued deterioration as a result of the COVID-19 pandemic.
The following table is a summary of nonperforming assets as of the dates presented:
December 31,
(dollars in thousands)20202019
Nonperforming Assets
Nonaccrual loans$117,485 $45,145 
Nonaccrual TDRs29,289 8,912 
Total nonaccrual loans146,774 54,057 
OREO2,155 3,525 
Total Nonperforming Assets$148,929 $57,582 
NPAs increased $91.3 million to $148.9 million during 2020 compared to $57.6 million at December 31, 2019. The significant increase in nonperforming loans primarily related to the addition of $56.3 million of hotel loans that moved to nonperforming during the fourth quarter of 2020 as a result of continued deterioration due to the COVID-19 pandemic. Also moving to nonperforming during 2020 were $11.3 million and $6.7 million CRE relationships that experienced financial deterioration that led to cash flow shortfalls, a $5.9 million CRE relationship that was associated with the customer fraud and a $15.1 million C&I relationship that experienced financial deterioration that led to cash flow shortfalls.
The following table presents a summary of the aggregate amount of loans to certain officers, directors of S&T or any affiliates of such persons as of December 31:
20202019
Balance at beginning of year$8,225 $8,682 
New loans3,343 2,442 
Repayments or no longer considered a related party(5,239)(2,899)
Balance at end of year$6,329 $8,225