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Loans and Loans Held for Sale
 6 Months Ended
Jun. 30, 2021
Receivables [Abstract]  
LOANS AND LOANS HELD FOR SALE LOANS AND LOANS HELD FOR SALE
Loans are presented net of unearned income of $16.5 million at June 30, 2021 and $16.0 million at December 31, 2020 and net of a discount related to purchase accounting fair value adjustments of $6.9 million at June 30, 2021 and $8.6 million at December 31, 2020. The following table presents loans as of the dates presented:
(dollars in thousands)June 30, 2021December 31, 2020
Commercial
Commercial real estate$3,246,533 $3,244,974 
Commercial and industrial1,774,358 1,954,453 
Commercial construction478,153 474,280 
Total Commercial Loans5,499,044 5,673,707 
Consumer
Consumer real estate1,420,097 1,471,238 
Other consumer88,210 80,915 
Total Consumer Loans1,508,307 1,552,153 
Total Portfolio Loans7,007,351 7,225,860 
Loans held for sale7,648 18,528 
Total Loans (1)
$7,014,999 $7,244,388 
(1) Excludes interest receivable of $21.0 million at June 30, 2021 and $24.7 million at December 31, 2020. Interest receivable is included in other assets in the consolidated balance sheets.

Commercial and industrial loans, or C&I, included $336.1 million of loans originated under the Paycheck Protection Program, or PPP, at June 30, 2021 compared to $465.0 million 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 percent to 5 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 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.
At June 30, 2021, our business banking segment was $1.1 billion compared to $1.2 billion at December 31, 2020. Business banking consists of commercial loans made to small businesses that are standard, non-complex products evaluated through a streamlined credit approval process that has been designed to maximize efficiency while maintaining high credit quality standards that meet small business market customers’ needs. Business banking consisted of $506.2 million of commercial real estate loans, $228.1 million of C&I loans, $10.3 million of commercial construction loans, $326.2 million of consumer real estate loans and $0.03 million of other consumer loans that have a commercial purpose at June 30, 2021. At December 31, 2020 business banking consisted of $453.0 million of commercial real estate loans, $394.9 million of C&I loans, $8.2 million of commercial construction loans and $303.9 million of consumer real estate loans that have a commercial purpose. During the first quarter of 2021, $90.2 million of commercial loans and $23.2 million of consumer loans were reclassified into the business banking segment.
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 78.5 percent of total portfolio loans at both June 30, 2021 and December 31, 2020. Within our commercial portfolio, the CRE and commercial construction portfolios combined comprised $3.7 billion, or 67.7 percent, of total commercial loans at June 30, 2021 and $3.7 billion, or 65.6 percent, of total commercial loans at December 31, 2020 and 53.2 percent of total portfolio loans at June 30, 2021 and 51.5 percent at December 31, 2020.
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 of this geography of 5.4 percent of the combined portfolios and 2.9 percent of total portfolio loans at June 30, 2021. This compares to 5.9 percent of the combined portfolios and 3.0 percent of total portfolio loans at December 31, 2020.
We individually evaluate all substandard and nonaccrual 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 will be reported as such 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. 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 tables summarize restructured loans as of the dates presented:
June 30, 2021December 31, 2020
(dollars in thousands)Performing
TDRs		Nonperforming
TDRs		Total
TDRs		Performing
TDRs		Nonperforming
TDRs		Total
TDRs
Commercial real estate$4 $6,415 $6,418 $14 $16,654 $16,668 
Commercial and industrial3,579 11,183 14,763 7,090 9,885 16,975 
Commercial construction3,222 — 3,222 3,267 — 3,267 
Business banking1,439 1,508 2,947 1,503 430 1,933 
Consumer real estate6,073 1,544 7,617 5,581 2,319 7,900 
Other consumer4 — 4 5 — 5 
Total$14,321 $20,650 $34,971 $17,460 $29,288 $46,748 
There were 4 TDRs for a total of $0.5 million that returned to accruing status during the three months ended June 30, 2021 compared to 4 TDRs for a total of $0.1 million for the three months ended June 30, 2020. There were 5 TDRs for a total of $0.5 million that returned to accruing status during the six months ended June 30, 2021 compared to 4 TDRs for a total of $0.1 million for the six months ended June 30, 2020.
The following tables present the restructured loans by portfolio segment and by type of concession for the periods presented:
Three Months Ended June 30, 2021
Number
of
Contracts		Type of Modification
Total
Post-Modification Outstanding Recorded Investment(2)
Total
Pre-Modification Outstanding Recorded Investment(2)
(dollars in thousands)
Bankruptcy(1)
ForbearanceExtend
Maturity		Modify
Rate		Modify
Payments
Commercial real estate— $— $— $— $— $— $— $— 
Commercial industrial— — — — — — — — 
Commercial construction— — — — — — — — 
Business banking4 — — 1,130 — — 1,130 1,130 
Consumer real estate4 247 — — — — 247 254 
Other consumer— — — — — — — — 
Total8 $247 $— $1,130 $— $— $1,377 $1,384 
(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(2) 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.

Three Months Ended June 30, 2020
Number
of
Contracts		Type of Modification
Total
Post-Modification Outstanding Recorded Investment(2)
Total
Pre-Modification Outstanding Recorded Investment(2)
(dollars in thousands)
Bankruptcy(1)
ForbearanceExtend
Maturity		Modify
Rate		Modify
Payments
Commercial real estate— $— $— $— $— $— $— $— 
Commercial industrial1 — — — — 75 75 75 
Commercial construction2 — — 701 — — 701 701 
Business banking1 — — — — 27 27 93 
Consumer real estate7 350 — 150 — — 500 500 
Other consumer— — — — — — — — 
Total11 $350 $— $851 $— $102 $1,303 $1,369 
(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(2) 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.
Six Months Ended June 30, 2021
Number
of
Contracts		Type of Modification
Total
Post-Modification Outstanding Recorded Investment(2)
Total
Pre-Modification Outstanding Recorded Investment(2)
(dollars in thousands)
Bankruptcy(1)
ForbearanceExtend
Maturity		Modify
Rate		Modify
Payments
Commercial real estate— $— $— $— $— $— $— $— 
Commercial industrial2 — — 796 5,433 — 6,229 6,304 
Commercial construction— — — — — — — — 
Business banking5 — 80 1,130 — — 1,210 1,210 
Consumer real estate13 573 — — — 147 720 739 
Other consumer1 — — — — — — 1 
Total21 $573 $80 $1,926 $5,433 $147 $8,159 $8,254 
(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(2) 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.

Six Months Ended June 30, 2020
Number
of
Contracts		Type of Modification
Total
Post-Modification Outstanding Recorded Investment(2)
Total
Pre-Modification Outstanding Recorded Investment(2)
(dollars in thousands)
Bankruptcy(1)
ForbearanceExtend
Maturity		Modify
Rate		Modify
Payments
Commercial real estate1 $— $— $2,210 $— $— $2,210 $2,210 
Commercial industrial2 — — 2,068 — 75 2,143 2,542 
Commercial construction3 — — 2,572 — — 2,572 2,592 
Business banking1 — — — — 27 27 93 
Consumer real estate13 723 — 177 — — 900 912 
Other consumer— — — — — — — — 
Total20 $723 $— $7,027 $— $102 $7,852 $8,349 
(1) Bankruptcy is consumer bankruptcy loans where the debt has been legally discharged through the bankruptcy court and not reaffirmed.
(2) 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.

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 the pandemic 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. Under the applicable guidance, none of these loans were considered restructured as of June 30, 2021. We had 42 commercial loans that were modified totaling $68.7 million at June 30, 2021 compared to 52 commercial loans that were modified totaling $195.6 million at December 31, 2020.
As of June 30, 2021, we had 14 commitments to lend an additional $0.7 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 and six months ended June 30, 2021. There was 1 TDR that defaulted during the three months ended June 30, 2020 for a total of $0.1 million and 11 TDRs that defaulted during the six months ended June 30, 2020 for a total of $21.1 million 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)June 30, 2021December 31, 2020
Nonperforming Assets
Nonaccrual loans$91,969 $117,485 
Nonaccrual TDRs20,650 29,289 
Total Nonaccrual Loans112,619 146,774 
OREO1,145 2,155 
Total Nonperforming Assets$113,764 $148,929 
The decrease in nonaccrual loans of $34.2 million at June 30, 2021 compared to December 31, 2020 was primarily related to the payoff of three CRE relationships for a total of $14.4 million and a charge off of a $4.9 million CRE relationship and a $3.9 million C&I relationship.