Loans Receivable, Net

The Company’s loan portfolio is comprised of three segments: residential real estate, commercial, and consumer and other loans. The loan segments are further disaggregated into the following classes: residential real estate, commercial real estate, other commercial, home equity and other consumer loans. The following table presents loans receivable for each portfolio class of loans:



	At or for the Year ended
(Dollars in thousands)	December 31, 2016			December 31, 2015
Residential real estate loans	$	674,347		688,912
Commercial loans
Real estate	2,990,141			2,633,953
Other commercial	1,342,250			1,099,564
Total	4,332,391			3,733,517
Consumer and other loans
Home equity	434,774			420,901
Other consumer	242,951			235,351
Total	677,725			656,252
Loans receivable ¹	5,684,463			5,078,681
Allowance for loan and lease losses	(129,572		)	(129,697	)
Loans receivable, net	$	5,554,891		4,948,984
Weighted-average interest rate on loans (tax-equivalent)	4.77		%	4.84	%

__________


¹	Includes net deferred fees, costs, premiums and discounts of $13,372,000 and $15,529,000 at December 31, 2016 and 2015, respectively.

The following tables summarize the activity in the ALLL by portfolio segment:



	Year ended December 31, 2016
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,697		14,427		67,877		32,525		8,998		5,870
Provision for loan losses	2,333			(1,734	)	(2,686	)	4,835		(520	)	2,438
Charge-offs	(11,496		)	(464	)	(3,082	)	(1,144	)	(1,185	)	(5,621	)
Recoveries	9,038			207		3,664		1,607		279		3,281
Balance at end of period	$	129,572		12,436		65,773		37,823		7,572		5,968



	Year ended December 31, 2015
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	129,753		14,680		67,799		30,891		9,963		6,420
Provision for loan losses	2,284			640		(696	)	3,030		(480	)	(210	)
Charge-offs	(7,002		)	(985	)	(1,920	)	(2,322	)	(809	)	(966	)
Recoveries	4,662			92		2,694		926		324		626
Balance at end of period	$	129,697		14,427		67,877		32,525		8,998		5,870

Note 3. Loans Receivable, Net (continued)



	Year ended December 31, 2014
(Dollars in thousands)	Total			Residential Real Estate		Commercial Real Estate		Other Commercial		Home Equity		Other Consumer
Balance at beginning of period	$	130,351		14,067		70,332		28,630		9,299		8,023
Provision for loan losses	1,912			716		(2,877	)	3,708		1,254		(889	)
Charge-offs	(7,603		)	(431	)	(1,802	)	(3,058	)	(1,038	)	(1,274	)
Recoveries	5,093			328		2,146		1,611		448		560
Balance at end of period	$	129,753		14,680		67,799		30,891		9,963		6,420

The following tables disclose the balance in the ALLL and the recorded investment in loans by portfolio segment:



	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	6,881	856	922	4,419	296	388
Collectively evaluated for impairment	122,691		11,580	64,851	33,404	7,276	5,580
Total allowance for loan and lease losses	$	129,572	12,436	65,773	37,823	7,572	5,968
Loans receivable
Individually evaluated for impairment	$	130,263	11,612	85,634	23,950	5,934	3,133
Collectively evaluated for impairment	5,554,200		662,735	2,904,507	1,318,300	428,840	239,818
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951



	December 31, 2015
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Allowance for loan and lease losses
Individually evaluated for impairment	$	8,124	782	1,629	5,277	64	372
Collectively evaluated for impairment	121,573		13,645	66,248	27,248	8,934	5,498
Total allowance for loan and lease losses	$	129,697	14,427	67,877	32,525	8,998	5,870
Loans receivable
Individually evaluated for impairment	$	140,773	20,767	85,845	23,874	6,493	3,794
Collectively evaluated for impairment	4,937,908		668,145	2,548,108	1,075,690	414,408	231,557
Total loans receivable	$	5,078,681	688,912	2,633,953	1,099,564	420,901	235,351

Substantially all of the Company’s loans receivable are with customers in the Company’s geographic market areas. Although the Company has a diversified loan portfolio, a substantial portion of its customers’ ability to honor their obligations is dependent upon the economic performance in the Company’s market areas. The Company is subject to regulatory limits for the amount of loans to any individual borrower and the Company is in compliance with this regulation as of December 31, 2016 and 2015. No borrower had outstanding loans or commitments exceeding 10 percent of the Company’s consolidated stockholders’ equity as of December 31, 2016.

At December 31, 2016, the Company had $3,585,328,000 in variable rate loans and $2,099,135,000 in fixed rate loans. At December 31, 2016, the Company had loans of $3,242,380,000 pledged as collateral for FHLB advances and FRB discount window. There were no significant purchases or sales of portfolio loans during 2016, 2015 and 2014.

Note 3. Loans Receivable, Net (continued)

The Company has entered into transactions with its executive officers and directors and their affiliates. The aggregate amount of loans outstanding to such related parties at December 31, 2016 and 2015 was $58,438,000 and $53,233,000, respectively. During 2016, new loans to such related parties were $10,272,000, repayments were $9,172,000 and the effect of changes in composition of related parties was $4,105,000. In management’s opinion, such loans were made in the ordinary course of business and were made on substantially the same terms as those prevailing at the time for comparable transaction with other persons.

The following tables disclose information related to impaired loans by portfolio segment:



	At or for the Year ended December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	22,128	2,759	9,129	8,814	334	1,092
Unpaid principal balance	22,374		2,825	9,130	8,929	345	1,145
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	26,745		4,942	10,441	9,840	257	1,265
Loans without a specific valuation allowance
Recorded balance	$	108,135	8,853	76,505	15,136	5,600	2,041
Unpaid principal balance	131,059		9,925	94,180	17,724	7,120	2,110
Average balance	108,827		12,858	72,323	15,537	6,004	2,105
Total
Recorded balance	$	130,263	11,612	85,634	23,950	5,934	3,133
Unpaid principal balance	153,433		12,750	103,310	26,653	7,465	3,255
Specific valuation allowance	6,881		856	922	4,419	296	388
Average balance	135,572		17,800	82,764	25,377	6,261	3,370



	At or for the Year ended December 31, 2015
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Loans with a specific valuation allowance
Recorded balance	$	34,683	8,253	12,554	11,923	102	1,851
Unpaid principal balance	36,157		9,198	12,581	12,335	109	1,934
Specific valuation allowance	8,124		782	1,629	5,277	64	372
Average balance	36,176		6,393	15,827	11,768	426	1,762
Loans without a specific valuation allowance
Recorded balance	$	106,090	12,514	73,291	11,951	6,391	1,943
Unpaid principal balance	132,718		13,969	94,028	15,539	7,153	2,029
Average balance	116,356		13,615	78,684	15,479	6,350	2,228
Total
Recorded balance	$	140,773	20,767	85,845	23,874	6,493	3,794
Unpaid principal balance	168,875		23,167	106,609	27,874	7,262	3,963
Specific valuation allowance	8,124		782	1,629	5,277	64	372
Average balance	152,532		20,008	94,511	27,247	6,776	3,990

Interest income recognized on impaired loans for the years ended December 31, 2016, 2015, and 2014 was not significant.

Note 3. Loans Receivable, Net (continued)

The following tables present an aging analysis of the recorded investment in loans by portfolio segment:



	December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	20,599	6,338	5,079	5,388	2,439	1,355
Accruing loans 60-89 days past due	5,018		1,398	754	1,352	844	670
Accruing loans 90 days or more past due	1,099		266	145	283	191	214
Non-accrual loans	49,332		4,528	30,216	8,817	5,240	531
Total past due and non-accrual loans	76,048		12,530	36,194	15,840	8,714	2,770
Current loans receivable	5,608,415		661,817	2,953,947	1,326,410	426,060	240,181
Total loans receivable	$	5,684,463	674,347	2,990,141	1,342,250	434,774	242,951



	December 31, 2015
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
Accruing loans 30-59 days past due	$	15,801	4,895	4,393	3,564	1,601	1,348
Accruing loans 60-89 days past due	3,612		961	1,841	286	280	244
Accruing loans 90 days or more past due	2,131		—	231	1,820	15	65
Non-accrual loans	51,133		8,073	28,819	7,691	6,022	528
Total past due and non-accrual loans	72,677		13,929	35,284	13,361	7,918	2,185
Current loans receivable	5,006,004		674,983	2,598,669	1,086,203	412,983	233,166
Total loans receivable	$	5,078,681	688,912	2,633,953	1,099,564	420,901	235,351

Interest income that would have been recorded on non-accrual loans if such loans had been current for the entire period would have been approximately $2,364,000, $2,471,000, and $3,005,000 for the years ended December 31, 2016, 2015, and 2014, respectively.

The following tables present TDRs that occurred during the periods presented and the TDRs that occurred within the previous twelve months that subsequently defaulted during the periods presented:



	Year ended December 31, 2016
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	34		—	10	21	3	—
Pre-modification recorded balance	$	22,907	—	8,454	14,183	270	—
Post-modification recorded balance	$	22,848	—	8,415	14,166	267	—
TDRs that subsequently defaulted
Number of loans	1		—	—	1	—	—
Recorded balance	$	6	—	—	6	—	—

Note 3. Loans Receivable, Net (continued)



	Year ended December 31, 2015
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	64		3	25	22	1	13
Pre-modification recorded balance	$	22,316	2,259	8,877	10,545	137	498
Post-modification recorded balance	$	23,110	2,203	9,927	10,325	157	498
TDRs that subsequently defaulted
Number of loans	7		1	1	4	—	1
Recorded balance	$	2,556	1,947	78	529	—	2



	Year ended December 31, 2014
(Dollars in thousands)	Total		Residential Real Estate	Commercial Real Estate	Other Commercial	Home Equity	Other Consumer
TDRs that occurred during the period
Number of loans	51		—	18	24	6	3
Pre-modification recorded balance	$	37,781	—	21,760	12,522	3,385	114
Post-modification recorded balance	$	37,075	—	21,803	11,884	3,274	114
TDRs that subsequently defaulted
Number of loans	5		—	2	1	2	—
Recorded balance	$	4,453	—	927	693	2,833	—

The modifications for the TDRs that occurred during the years ended December 31, 2016, 2015 and 2014 included one or a combination of the following: an extension of the maturity date, a reduction of the interest rate or a reduction in the principal amount.

In addition to the TDRs that occurred during the period provided in the preceding tables, the Company had TDRs with pre-modification loan balances of $5,331,000, $8,893,000 and $12,674,000 for the years ended December 31, 2016, 2015 and 2014, respectively, for which OREO was received in full or partial satisfaction of the loans. The majority of such TDRs were in residential real estate for the year ended December 31, 2016 and in commercial real estate for the years ended December 31, 2015 and 2014. At December 31, 2016 and 2015, the Company had $1,770,000 and $3,253,000, respectively, of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings are in process. At December 31, 2016 and 2015, the Company had $2,699,000 and $1,496,000, respectively, of OREO secured by residential real estate properties.

There were $4,785,000 and $2,803,000 of additional unfunded commitments on TDRs outstanding at December 31, 2016 and 2015, respectively. The amount of charge-offs on TDRs during 2016, 2015 and 2014 was $557,000, $1,310,000 and $1,361,000, respectively.