XML 30 R12.htm IDEA: XBRL DOCUMENT v3.8.0.1
Loans and Leases and Other Real Estate
 12 Months Ended
Dec. 31, 2017
Receivables [Abstract]  
Loans and Leases and Other Real Estate
LOANS AND LEASES AND OTHER REAL ESTATE
The following sets forth the composition of Lakeland’s loan and lease portfolio:
 
 
 
December 31,
  
 
2017
 
2016
 
 
(in thousands)
Commercial, secured by real estate
 
$
2,831,184

 
$
2,556,601

Commercial, industrial and other
 
340,400

 
350,228

Leases
 
75,039

 
67,016

Real estate - residential mortgage
 
322,880

 
349,581

Real estate - construction
 
264,908

 
211,109

Home equity and consumer
 
322,269

 
339,360

Total loans and leases
 
4,156,680

 
3,873,895

Less deferred fees
 
(3,960
)
 
(3,297
)
Loans and leases, net of deferred fees
 
$
4,152,720

 
$
3,870,598


At December 31, 2017 and December 31, 2016, Lakeland had $1.1 billion and $942.0 million in loans pledged for potential borrowings at the Federal Home Loan Bank of New York (“FHLB”). As of December 31, 2017 and 2016, home equity and consumer loans included overdraft deposit balances of $966,000 and $364,000, respectively.
Purchased Credit Impaired Loans
The carrying value of loans acquired in the Pascack acquisition and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $190,000 at December 31, 2017, which was $627,000 less than the balance at the time of acquisition on January 7, 2016. In the first quarter of 2017, one of the Pascack purchased credit impaired loans totaling $127,000 experienced further credit deterioration and was fully charged off. Also in the second quarter of 2017, one of the Pascack PCI loans totaling $218,000 was fully paid off. The carrying value of loans acquired in the Harmony acquisition was $520,000 at December 31, 2017 which was $249,000 less than the balance at acquisition date on July 1, 2016. In the second quarter of 2017, a Harmony PCI loan with a net value of $247,000 was fully paid off.
Under ASC Subtopic 310-30, PCI loans may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. The Company elected to account for the loans with evidence of credit deterioration individually rather than aggregate them into pools.
The following table presents changes in the accretable yield for PCI loans (in thousands):
 
 
Years Ended December 31,
  
 
2017
 
2016
Balance, beginning of period
 
$
145

 
$
—

Acquisitions
 
—

 
182

Accretion
 
(202
)
 
(98
)
Net reclassification non-accretable difference
 
186

 
61

Balance, end of period
 
$
129

 
$
145


Portfolio Segments
Lakeland currently manages its credit products and the respective exposure to credit losses (credit risk) by the following specific portfolio segments which are levels at which Lakeland develops and documents its systematic methodology to determine the allowance for loan and lease losses attributable to each respective portfolio segment. These segments are:
•
Commercial, secured by real estate - consists of commercial mortgage loans secured by owner occupied properties and non-owner occupied properties. The loans secured by owner occupied properties involve a variety of property types to conduct the borrower’s operations. The primary source of repayment for this type of loan is the cash flow from the business and is based upon the borrower’s financial health and the ability of the borrower and the business to repay. The loans secured by non-owner occupied properties involve investment properties for warehouse, retail, office space, etc., with a history of occupancy and cash flow. This commercial real estate category contains mortgage loans to the developers and owners of commercial real estate where the borrower intends to operate or sell the property at a profit and use the income stream or proceeds from the sale to repay the loan.
•
Commercial, industrial and other - are loans made to provide funds for equipment and general corporate needs. Repayment of a loan primarily uses the funds obtained from the operation of the borrower’s business. Commercial loans also include lines of credit that are utilized to finance a borrower’s short-term credit needs and/or to finance a percentage of eligible receivables and inventory.
•
Leases - includes a small portfolio of equipment leases, which consists of leases primarily for essential equipment used by small to medium sized businesses.
•
Real estate - residential mortgage - contains permanent mortgage loans principally to consumers secured by residential real estate. Residential real estate loans are evaluated for the adequacy of repayment sources at the time of approval, based upon measures including credit scores, debt-to-income ratios, and collateral values. Loans may be either conforming or non-conforming.
•
Real estate - construction - construction loans, as defined, are intended to finance the construction of commercial properties and include loans for the acquisition and development of land. Construction loans represent a higher degree of risk than permanent real estate loans and may be affected by a variety of factors such as the borrower’s ability to control costs and adhere to time schedules and the risk that constructed units may not be absorbed by the market within the anticipated time frame or at the anticipated price. The loan commitment on these loans often includes an interest reserve to pay interest charges on the outstanding balance of the loan.
•
Home equity and consumer - includes primarily home equity loans and lines, installment loans, personal lines of credit and automobile loans. The home equity category consists mainly of loans and revolving lines of credit to consumers which are secured by residential real estate. These loans are typically secured with second mortgages on the homes, although many are secured with first mortgages. Other consumer loans include installment loans used by customers to purchase automobiles, boats and recreational vehicles.
Non-accrual and Past Due Loans
The following schedule sets forth certain information regarding Lakeland’s non-accrual loans and leases, its other real estate owned and other repossessed assets, and accruing troubled debt restructurings (“TDRs”) (in thousands):
 
 
 
At December 31,
  
 
2017
 
2016
Commercial, secured by real estate
 
$
5,890

 
$
10,413

Commercial, industrial and other
 
184

 
167

Leases
 
144

 
153

Real estate - residential mortgage
 
3,860

 
6,048

Real estate - construction
 
1,472

 
1,472

Home equity and consumer
 
2,105

 
2,151

Total non-accrual loans and leases
 
13,655

 
20,404

Other real estate and other repossessed assets
 
843

 
1,072

TOTAL NON-PERFORMING ASSETS
 
$
14,498

 
$
21,476

Troubled debt restructurings, still accruing
 
$
11,462

 
$
8,802


Non-accrual loans included $2.7 million and $2.4 million of TDRs for the years ended December 31, 2017 and 2016, respectively. As of December 31, 2017, the Company had $2.7 million in residential mortgages and consumer home equity loans included in the table above that were in the process of foreclosure.
An age analysis of past due loans, segregated by class of loans as of December 31, 2017 and 2016 is as follows:
December 31, 2017
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
Than
89 Days
 
Total
Past Due
 
Current
 
Total Loans
and Leases
 
Recorded
Investment Greater
than 89 Days and
Still Accruing
 
 
(in thousands)
Commercial, secured by real estate
 
$
3,663

 
$
1,082

 
$
3,817

 
$
8,562

 
$
2,822,622

 
$
2,831,184

 
$
—

Commercial, industrial and other
 
80

 
121

 
56

 
257

 
340,143

 
340,400

 
—

Leases
 
496

 
139

 
144

 
779

 
74,260

 
75,039

 
—

Real estate - residential mortgage
 
939

 
908

 
3,137

 
4,984

 
317,896

 
322,880

 
—

Real estate - construction
 
—

 
—

 
1,472

 
1,472

 
263,436

 
264,908

 
—

Home equity and consumer
 
1,258

 
310

 
1,386

 
2,954

 
319,315

 
322,269

 
200

 
 
$
6,436

 
$
2,560

 
$
10,012

 
$
19,008

 
$
4,137,672

 
$
4,156,680

 
$
200

December 31, 2016
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater
Than
89 Days
 
Total
Past Due
 
Current
 
Total Loans
and Leases
 
Recorded
Investment Greater
than 89 Days and
Still Accruing
 
 
(in thousands)
Commercial, secured by real estate
 
$
6,082

 
$
1,234

 
$
9,313

 
$
16,629

 
$
2,539,972

 
$
2,556,601

 
$
—

Commercial, industrial and other
 
1,193

 
213

 
42

 
1,448

 
348,780

 
350,228

 
—

Leases
 
132

 
78

 
153

 
363

 
66,653

 
67,016

 
—

Real estate - residential mortgage
 
2,990

 
1,057

 
5,330

 
9,377

 
340,204

 
349,581

 
—

Real estate - construction
 
3,409

 
—

 
1,472

 
4,881

 
206,228

 
211,109

 
—

Home equity and consumer
 
1,260

 
129

 
2,049

 
3,438

 
335,922

 
339,360

 
10

 
 
$
15,066

 
$
2,711

 
$
18,359

 
$
36,136

 
$
3,837,759

 
$
3,873,895

 
$
10



Impaired Loans
Lakeland’s policy regarding impaired loans is discussed in Note 1 – Summary of Accounting Policies – Loans and Leases and Allowance for Loan and Lease Losses. The Company defines impaired loans as all non-accrual loans with recorded investments of $500,000 or greater. Impaired loans also includes all loans modified in troubled debt restructurings. The following tables represent the Company's impaired loans at December 31, 2017, 2016 and 2015.
 
December 31, 2017
 
Recorded
Investment in
Impaired Loans
 
Contractual
Unpaid
Principal
Balance
 
Related
Allowance
 
Interest
Income
Recognized
 
Average
Investment in
Impaired Loans
 
 
(in thousands)
Loans without related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
12,155

 
$
12,497

 
$
—

 
$
366

 
$
12,774

Commercial, industrial and other
 
618

 
618

 
—

 
25

 
618

Leases
 
—

 
—

 
—

 
—

 
—

Real estate - residential mortgage
 
963

 
980

 
—

 
15

 
996

Real estate - construction
 
1,471

 
1,471

 
—

 
—

 
1,471

Home equity and consumer
 
—

 
—

 
—

 
—

 
6

Loans with related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
5,381

 
5,721

 
454

 
206

 
5,029

Commercial, industrial and other
 
164

 
164

 
9

 
14

 
283

Leases
 
65

 
65

 
30

 
—

 
29

Real estate - residential mortgage
 
781

 
919

 
4

 
27

 
940

Real estate - construction
 
—

 
—

 
—

 
—

 
—

Home equity and consumer
 
993

 
1,026

 
8

 
52

 
1,090

Total:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
17,536

 
$
18,218

 
$
454

 
$
572

 
$
17,803

Commercial, industrial and other
 
782

 
782

 
9

 
39

 
901

Leases
 
65

 
65

 
30

 
—

 
29

Real estate - residential mortgage
 
1,744

 
1,899

 
4

 
42

 
1,936

Real estate - construction
 
1,471

 
1,471

 
—

 
—

 
1,471

Home equity and consumer
 
993

 
1,026

 
8

 
52

 
1,096

 
 
$
22,591

 
$
23,461

 
$
505

 
$
705

 
$
23,236

December 31, 2016
 
Recorded
Investment in
Impaired Loans
 
Contractual
Unpaid
Principal
Balance
 
Related
Allowance
 
Interest
Income
Recognized
 
Average
Investment in
Impaired Loans
 
 
(in thousands)
Loans without related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
12,764

 
$
13,195

 
$
—

 
$
229

 
$
13,631

Commercial, industrial and other
 
603

 
603

 
—

 
24

 
1,109

Leases
 
—

 
—

 
—

 
—

 
—

Real estate - residential mortgage
 
1,880

 
3,146

 
—

 
16

 
2,430

Real estate - construction
 
1,471

 
1,471

 
—

 
—

 
12

Home equity and consumer
 
139

 
139

 
—

 
—

 
388

Loans with related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
5,860

 
6,142

 
392

 
273

 
6,549

Commercial, industrial and other
 
349

 
349

 
12

 
17

 
360

Leases
 
—

 
—

 
—

 
—

 
1

Real estate - residential mortgage
 
1,031

 
1,100

 
31

 
30

 
1,011

Real estate - construction
 
—

 
—

 
—

 
—

 
—

Home equity and consumer
 
1,188

 
1,211

 
94

 
59

 
1,184

Total:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
18,624

 
$
19,337

 
$
392

 
$
502

 
$
20,180

Commercial, industrial and other
 
952

 
952

 
12

 
41

 
1,469

Leases
 
—

 
—

 
—

 
—

 
1

Real estate - residential mortgage
 
2,911

 
4,246

 
31

 
46

 
3,441

Real estate - construction
 
1,471

 
1,471

 
—

 
—

 
12

Home equity and consumer
 
1,327

 
1,350

 
94

 
59

 
1,572

 
 
$
25,285

 
$
27,356

 
$
529

 
$
648

 
$
26,675

 
December 31, 2015
 
Recorded
Investment in
Impaired Loans
 
Contractual
Unpaid
Principal
Balance
 
Related
Allowance
 
Interest
Income
Recognized
 
Average
Investment in
Impaired Loans
 
 
(in thousands)
Loans without related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
14,065

 
$
14,712

 
$
—

 
$
344

 
$
12,928

Commercial, industrial and other
 
209

 
887

 
—

 
14

 
749

Leases
 
—

 
—

 
—

 
—

 
—

Real estate - residential mortgage
 
2,195

 
2,242

 
—

 
—

 
2,096

Real estate - construction
 
—

 
—

 
—

 
—

 
94

Home equity and consumer
 
574

 
575

 
—

 
5

 
762

Loans with related allowance:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
5,721

 
5,918

 
598

 
271

 
6,249

Commercial, industrial and other
 
1,023

 
1,023

 
77

 
32

 
717

Leases
 
6

 
6

 
1

 
—

 
—

Real estate - residential mortgage
 
832

 
865

 
73

 
37

 
840

Real estate - construction
 
380

 
380

 
21

 
13

 
308

Home equity and consumer
 
1,001

 
1,013

 
73

 
54

 
1,006

Total:
 
 
 
 
 
 
 
 
 
 
Commercial, secured by real estate
 
$
19,786

 
$
20,630

 
$
598

 
$
615

 
$
19,177

Commercial, industrial and other
 
1,232

 
1,910

 
77

 
46

 
1,466

Leases
 
6

 
6

 
1

 
—

 
—

Real estate - residential mortgage
 
3,027

 
3,107

 
73

 
37

 
2,936

Real estate - construction
 
380

 
380

 
21

 
13

 
402

Home equity and consumer
 
1,575

 
1,588

 
73

 
59

 
1,768

 
 
$
26,006

 
$
27,621

 
$
843

 
$
770

 
$
25,749


Interest which would have been accrued on impaired loans and leases during 2017, 2016 and 2015 was $1.5 million, $1.7 million and $1.6 million, respectively.
Credit Quality Indicators
The class of loans are determined by internal risk rating. Management closely and continually monitors the quality of its loans and leases and assesses the quantitative and qualitative risks arising from the credit quality of its loans and leases. It is the policy of Lakeland to require that a Credit Risk Rating be assigned to all commercial loans and loan commitments. The Credit Risk Rating System has been developed by management to provide a methodology to be used by Loan Officers, Department Heads and Senior Management in identifying various levels of credit risk that exist within Lakeland’s loan portfolios. The risk rating system assists Senior Management in evaluating Lakeland’s loan portfolio, analyzing trends and determining the proper level of required reserves to be recommended to the Board. In assigning risk ratings, management considers, among other things, a borrower’s debt service coverage, earnings strength, loan to value ratios, industry conditions and economic conditions. Management categorizes loans and commitments into a one (1) to nine (9) numerical structure with rating 1 being the strongest rating and rating 9 being the weakest. Ratings 1 through 5W are considered “Pass” ratings. “Pass” ratings on loans are given to loans that management considers to be of acceptable or better quality. A rating of 5W, or “Watch” is a loan that requires more than the usual amount of monitoring due to declining earnings, strained cash flow, increasing leverage and/or weakening market. These borrowers generally have limited additional debt capacity and modest coverage and average or below average asset quality, margins and market share. Rating 6, “Other Assets Especially Mentioned” is used for loans exhibiting identifiable credit weakness which if not checked or corrected could weaken the loan quality or inadequately protect the bank’s credit position at some future date. Rating 7, “Substandard,” is used on loans that are inadequately protected by the current sound worth and paying capacity of the obligors or of the collateral pledged, if any. A substandard loan has a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. Rating 8, “Doubtful,” are loans that exhibit all of the weaknesses inherent in substandard loans, but have the added characteristics that the weaknesses make collection or liquidation in full improbable on the basis of existing facts. Rating 9, “Loss,” is a rating for loans or portions of loans that are considered uncollectible and of such little value that their continuance as bankable loans is not warranted.
The following table shows Lakeland’s commercial loan portfolio as of December 31, 2017 and 2016, by the risk ratings discussed above (in thousands):
December 31, 2017
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and  Other
 
 
RISK RATING
 
Real Estate -
Construction
1
 
$
—

 
$
392

 
$
—

2
 
—

 
26,968

 
—

3
 
76,824

 
35,950

 
—

4
 
862,537

 
96,426

 
15,502

5
 
1,779,908

 
150,928

 
246,806

5W - Watch
 
47,178

 
8,779

 
—

6 - Other assets especially mentioned
 
40,245

 
8,670

 
—

7 - Substandard
 
24,492

 
12,287

 
2,600

8 - Doubtful
 
—

 
—

 
—

9 - Loss
 
—

 
—

 
—

Total
 
$
2,831,184

 
$
340,400

 
$
264,908

December 31, 2016
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and  Other
 
 
RISK RATING
 
Real Estate -
Construction
1
 
$
—

 
$
1,449

 
$
—

2
 
—

 
26,743

 
—

3
 
82,102

 
36,644

 
—

4
 
729,281

 
135,702

 
28,177

5
 
1,615,331

 
129,366

 
175,595

5W - Watch
 
68,372

 
6,395

 
1,223

6 - Other assets especially mentioned
 
33,015

 
5,242

 
—

7 - Substandard
 
28,500

 
8,687

 
6,114

8 - Doubtful
 
—

 
—

 
—

9 - Loss
 
—

 
—

 
—

Total
 
$
2,556,601

 
$
350,228

 
$
211,109


This table does not include residential mortgage loans, consumer loans, or leases because they are evaluated on their payment status as pass or substandard, which is defined as non-accrual or past due 90 days or more.
Allowance for Loan and Lease Losses
The following table details activity in the allowance for loan and lease losses by portfolio segment and the related recorded investment in loans and leases for the years ended December 31, 2017 and 2016:
 
December 31, 2017
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and  Other
 
Leases
 
Real
Estate  -
Residential
Mortgage
 
Real Estate -
Construction
 
Home
Equity and
Consumer
 
Total
 
 
(in thousands)
Beginning balance
 
$
21,223

 
$
1,723

 
$
548

 
$
1,964

 
$
2,352

 
$
3,435

 
$
31,245

Charge-offs
 
(762
)
 
(477
)
 
(305
)
 
(441
)
 
(609
)
 
(852
)
 
(3,446
)
Recoveries
 
396

 
172

 
59

 
5

 
31

 
903

 
1,566

Provision
 
4,847

 
895

 
328

 
29

 
957

 
(966
)
 
6,090

Ending balance
 
$
25,704

 
$
2,313

 
$
630

 
$
1,557

 
$
2,731

 
$
2,520

 
$
35,455

Ending balance: Individually evaluated for impairment
 
$
454

 
$
9

 
$
30

 
$
4

 
$
—

 
$
8

 
$
505

Ending balance: Collectively evaluated for impairment
 
25,250

 
2,304

 
600

 
1,553

 
2,731

 
2,512

 
$
34,950

Ending balance
 
$
25,704

 
$
2,313

 
$
630

 
$
1,557

 
$
2,731

 
$
2,520

 
$
35,455

LOANS AND LEASES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: Individually evaluated for impairment
 
$
17,536

 
$
782

 
$
65

 
$
1,744

 
$
1,471

 
$
993

 
$
22,591

Ending balance: Collectively evaluated for impairment
 
2,812,941

 
339,618

 
74,974

 
321,136

 
263,437

 
321,273

 
$
4,133,379

Ending balance: Loans acquired with deteriorated credit quality
 
707

 
—

 
—

 
—

 
—

 
3

 
$
710

Ending balance (1)
 
$
2,831,184

 
$
340,400

 
$
75,039

 
$
322,880

 
$
264,908

 
$
322,269

 
$
4,156,680

 
(1)
Excludes deferred fees
December 31, 2016
 
Commercial,
Secured by
Real Estate
 
Commercial,
Industrial
and Other
 
Leases
 
Real
Estate -
Residential
Mortgage
 
Real Estate -
Construction
 
Home
Equity and
Consumer
 
Total
 
 
(in thousands)
Beginning balance
 
$
20,223

 
$
2,637

 
$
460

 
$
2,588

 
$
1,591

 
$
3,375

 
$
30,874

Charge-offs
 
(410
)
 
(796
)
 
(366
)
 
(1,103
)
 
—

 
(1,980
)
 
(4,655
)
Recoveries
 
297

 
202

 
31

 
8

 
18

 
247

 
803

Provision
 
1,113

 
(320
)
 
423

 
471

 
743

 
1,793

 
4,223

Ending balance
 
$
21,223

 
$
1,723

 
$
548

 
$
1,964

 
$
2,352

 
$
3,435

 
$
31,245

Ending balance: Individually evaluated for impairment
 
$
392

 
$
12

 
$
—

 
$
31

 
$
—

 
$
94

 
$
529

Ending balance: Collectively evaluated for impairment
 
20,831

 
1,711

 
548

 
1,933

 
2,352

 
3,341

 
$
30,716

Ending balance
 
$
21,223

 
$
1,723

 
$
548

 
$
1,964

 
$
2,352

 
$
3,435

 
$
31,245

LOANS AND LEASES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: Individually evaluated for impairment
 
$
18,624

 
$
952

 
$
—

 
$
2,911

 
$
1,471

 
$
1,327

 
$
25,285

Ending balance: Collectively evaluated for impairment
 
2,536,858

 
349,001

 
67,016

 
346,670

 
209,638

 
338,019

 
$
3,847,202

Ending balance: Loans acquired with deteriorated credit quality
 
1,119

 
275

 
—

 
—

 
—

 
14

 
$
1,408

Ending balance (1)
 
$
2,556,601

 
$
350,228

 
$
67,016

 
$
349,581

 
$
211,109

 
$
339,360

 
$
3,873,895

 
(1)
Excludes deferred fees
 

Lakeland also maintains a reserve for unfunded lending commitments which are included in other liabilities. This reserve was $2.5 million for each of the years ended December 31, 2017 and December 31, 2016. Lakeland analyzes the adequacy of the reserve for unfunded lending commitments in conjunction with its analysis of the adequacy of the allowance for loan and lease losses. For more information on this analysis, see “Risk Elements” in Management’s Discussion and Analysis.
Troubled Debt Restructurings ("TDRs")
TDRs are those loans where significant concessions have been made to borrowers experiencing financial difficulties. Restructured loans typically involve a modification of terms such as a reduction of the stated interest rate lower than the current market rate of a new loan with similar risk, an extended moratorium of principal payments and/or an extension of the maturity date. Lakeland considers the potential losses on these loans as well as the remainder of its impaired loans when considering the adequacy of the allowance for loan losses.
The following table summarizes loans and leases that have been restructured during the periods presented:
  
 
For the Year Ended December 31, 2017
 
For the Year Ended December 31, 2016
  
 
Number of
Contracts
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
Number of
Contracts
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
 
(dollars in thousands)
Commercial, secured by real estate
 
8

 
$
4,618

 
$
4,618

 
1

 
$
303

 
$
303

Commercial, industrial and other
 
2

 
124

 
124

 
—

 
—

 
—

Leases
 
6

 
65

 
65

 
—

 
—

 
—

Real estate - residential mortgage
 
—

 
—

 
—

 
1

 
255

 
255

Home equity and consumer
 
—

 
—

 
—

 
3

 
285

 
285

 
 
16

 
$
4,807

 
$
4,807

 
5

 
$
843

 
$
843


The following table presents loans and leases modified as TDRs within the previous 12 months from December 31, 2017 and 2016 that have defaulted during the subsequent twelve months:
  
 
For the Year Ended December 31, 2017
 
For the Year Ended December 31, 2016
  
 
Number of
Contracts
 
Recorded
Investment
 
Number of
Contracts
 
Recorded
Investment
 
 
(dollars in thousands)
 
 
 
 
 
 
 
 
 
Leases
 
2

 
$
35

 
—

 
$
—

Real estate - residential mortgage
 
—

 
—

 
1

 
255

Home equity and consumer
 
—

 
—

 
1

 
162

 
 
2

 
$
35

 
2

 
$
417


Related Party Loans
Lakeland has entered into lending transactions in the ordinary course of business with directors, executive officers, principal stockholders and affiliates of such persons on similar terms, including interest rates and collateral, as those prevailing for comparable transactions with other borrowers not related to Lakeland. At December 31, 2017 and 2016, loans to these related parties amounted to $27.5 million and $22.3 million, respectively. There were new loans of $9.7 million to related parties and repayments of $4.5 million from related parties in 2017.
Mortgages Held for Sale
Residential mortgages originated by the bank and held for sale in the secondary market are carried at the lower of cost or fair market value. Fair value is generally determined by the value of purchase commitments on individual loans. Losses are recorded as a valuation allowance and charged to earnings. As of December 31, 2017, Lakeland had $456,000 in mortgages held for sale compared to $1.7 million as of December 31, 2016.
Lease Receivables
Future minimum lease payments of lease receivables are expected as follows (in thousands):
2018
$
26,796

2019
20,356

2020
15,113

2021
9,046

2022
3,280

Thereafter
448

 
$
75,039


Other Real Estate and Other Repossessed Assets
At December 31, 2017, Lakeland had other real estate and other repossessed assets of $843,000 and $0, respectively. The other real estate that the Company held at December 31, 2017 consisted of $843,000 in residential property acquired as a result of foreclosure proceedings or through a deed in lieu of foreclosure. At December 31, 2016, Lakeland had other real estate and other repossessed assets of $1.1 million and $9,000, respectively. The other real estate that the Company held at December 31, 2016 consisted of $1.1 million in residential property acquired as a result of foreclosure proceedings or through a deed in lieu of foreclosure. For the years ended December 31, 2017, 2016 and 2015, Lakeland had writedowns of $98,000, $0 and $119,000, respectively, on other real estate and other repossessed assets which are included in other real estate and repossessed asset expense in the Consolidated Statement of Income.