Loans and Leases

Summary of Major Loan and Lease Categories



	At March 31, 2015								At December 31, 2014
(Dollars in thousands)	Originated			Acquired		Total			Total
Commercial, financial and agricultural	$	461,490		$	29,789	$	491,279		$	457,827
Real estate-commercial	642,967			139,857		782,824			628,478
Real estate-construction	91,994			49,946		141,940			79,887
Real estate-residential secured for business purpose	41,897			141,398		183,295			36,932
Real estate-residential secured for personal purpose	170,430			3,839		174,269			166,850
Real estate-home equity secured for personal purpose	111,599			12,685		124,284			108,250
Loans to individuals	29,620			371		29,991			29,941
Lease financings	115,958			—		115,958			118,460
Total loans and leases held for investment, net of deferred income	$	1,665,955		$	377,885	$	2,043,840		$	1,626,625
Unearned lease income, included in the above table	$	(13,114	)	$	—	$	(13,114	)	$	(14,131	)
Net deferred costs, included in the above table	3,163			—		3,163			3,218
Overdraft deposits included in the above table	506			27		533			50

Overdraft deposits are re-classified as loans and are included in the total loans and leases on the balance sheet.

The carrying amount of acquired loans at March 31, 2015 totaled $377.9 million, including $1.6 million of loans acquired with deteriorated credit quality, or acquired credit impaired loans from the Valley Green Bank acquisition. Acquired credit impaired loans are accounted for in accordance with ASC Topic 310-30. See Note 2, "Acquisition" for additional information.

The outstanding principal balance and carrying amount for acquired credit impaired loans at March 31, 2015 were as follows:



(Dollars in thousands)	March 31, 2015
Outstanding principal balance	$	5,738
Carrying amount	1,631
Allowance for loan losses	—

The following table presents the changes in accretable yield on acquired credit impaired loans:



(Dollars in thousands)	Three Months Ended March 31, 2015
Beginning of period	$	—
Acquisition of credit impaired loans	322
Accretable yield amortized to interest income	(35		)
End of period	$	287

Age Analysis of Past Due Loans and Leases

The following presents, by class of loans and leases, an aging of past due loans and leases, loans and leases which are current and the recorded investment in loans and leases 90 days or more past due which are accruing interest at March 31, 2015 and December 31, 2014:



(Dollars in thousands)	30-59 Days Past Due		60-89 Days Past Due		90 Days or more Past Due		Total Past Due		Current		Acquired Credit Impaired		Total Loans and Leases Held for Investment		Recorded Investment 90 Days or more Past Due and Accruing Interest
At March 31, 2015
Commercial, financial and agricultural	$	2,408	$	540	$	3,218	$	6,166	$	484,742	$	371	$	491,279	$	—
Real estate—commercial real estate and construction:
Commercial real estate	1,831		—		1,611		3,442		778,804		578		782,824		—
Construction	—		—		5,660		5,660		136,280		—		141,940		—
Real estate—residential and home equity:
Residential secured for business purpose	803		276		785		1,864		180,812		619		183,295		679
Residential secured for personal purpose	1,582		—		352		1,934		172,332		3		174,269		—
Home equity secured for personal purpose	126		101		166		393		123,831		60		124,284		60
Loans to individuals	317		48		248		613		29,378		—		29,991		247
Lease financings	1,445		445		480		2,370		113,588		—		115,958		77
Total	$	8,512	$	1,410	$	12,520	$	22,442	$	2,019,767	$	1,631	$	2,043,840	$	1,063
At December 31, 2014
Commercial, financial and agricultural	$	145	$	747	$	2,567	$	3,459	$	454,368	$	—	$	457,827	$	—
Real estate—commercial real estate and construction:
Commercial real estate	361		913		1,163		2,437		626,041		—		628,478		—
Construction	—		405		5,525		5,930		73,957		—		79,887		—
Real estate—residential and home equity:
Residential secured for business purpose	167		56		713		936		35,996		—		36,932		—
Residential secured for personal purpose	409		604		60		1,073		165,777		—		166,850		—
Home equity secured for personal purpose	348		—		215		563		107,687		—		108,250		31
Loans to individuals	365		65		365		795		29,146		—		29,941		365
Lease financings	1,610		406		435		2,451		116,009		—		118,460		55
Total	$	3,405	$	3,196	$	11,043	$	17,644	$	1,608,981	$	—	$	1,626,625	$	451

Non-Performing Loans and Leases

The following presents, by class of loans and leases, non-performing loans and leases at March 31, 2015 and December 31, 2014:



	At March 31, 2015								At December 31, 2014
(Dollars in thousands)	Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Loans and Leases 90 Days or more Past Due and Accruing Interest		Total Non- Performing Loans and Leases		Nonaccrual Loans and Leases*		Accruing Troubled Debt Restructured Loans and Lease Modifications		Loans and Leases 90 Days or more Past Due and Accruing Interest		Total Non- Performing Loans and Leases
Commercial, financial and agricultural	$	5,809	$	2,363	$	—	$	8,172	$	5,002	$	2,851	$	—	$	7,853
Real estate—commercial real estate and construction:
Commercial real estate	4,805		2,608		—		7,413		4,413		2,618		—		7,031
Construction	5,660		—		—		5,660		5,931		—		—		5,931
Real estate—residential and home equity:
Residential secured for business purpose	1,019		350		679		2,048		915		—		—		915
Residential secured for personal purpose	802		—		—		802		512		—		—		512
Home equity secured for personal purpose	107		—		60		167		184		—		31		215
Loans to individuals	—		—		247		247		—		—		365		365
Lease financings	402		20		77		499		380		—		55		435
Total	$	18,604	$	5,341	$	1,063	$	25,008	$	17,337	$	5,469	$	451	$	23,257

* Includes nonaccrual troubled debt restructured loans and lease modifications of $3.5 million and $3.1 million at March 31, 2015 and December 31, 2014, respectively.

Credit Quality Indicators

The following tables present by class, the recorded investment in loans and leases held for investment by credit quality indicator at March 31, 2015 and December 31, 2014.

The Corporation employs a ten (10) grade risk rating system related to the credit quality of commercial loans and residential real estate loans secured for a business purpose of which the first six categories are pass categories (credits not adversely rated). The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating. Loans with risk ratings of one through five are reviewed based on the relationship dollar amount with the borrower: loans with a relationship total of $2.5 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.5 million but greater than $500 thousand are reviewed annually based on the borrower’s fiscal year; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with risk ratings of six are also reviewed based on the relationship dollar amount with the borrower: loans with a relationship balance of $2.0 million or greater are reviewed quarterly; loans with a relationship balance of less than $2.0 million but greater than $500 thousand are reviewed annually; loans with a relationship balance of less than $500 thousand are reviewed only if the loan becomes 60 days or more past due. Loans with risk ratings of seven are reviewed at least quarterly, and as often as monthly, at management’s discretion. Loans with risk ratings of eight through ten are reviewed monthly.


1.	Cash Secured—No credit risk


2.	Fully Secured—Negligible credit risk


3.	Strong—Minimal credit risk


4.	Satisfactory—Nominal credit risk


5.	Acceptable—Moderate credit risk


6.	Pre-Watch—Marginal, but stable credit risk


7.	Special Mention—Potential weakness


8.	Substandard—Well-defined weakness


9.	Doubtful—Collection in-full improbable


10.	Loss—Considered uncollectible

Commercial Credit Exposure Credit Risk by Internally Assigned Grades

The following table presents classifications for originated loans:



(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate— Commercial		Real Estate— Construction		Real Estate— Residential Secured for Business Purpose		Total
At March 31, 2015
Grade:
1. Cash secured/ 2. Fully secured	$	4,234	$	—	$	1,918	$	—	$	6,152
3. Strong	16,316		19,889		10,290		4,934		51,429
4. Satisfactory	20,654		24,463		10,011		1,235		56,363
5. Acceptable	300,971		408,148		56,128		24,218		789,465
6. Pre-watch	75,963		123,543		7,987		4,778		212,271
7. Special Mention	5,559		18,272		—		1,677		25,508
8. Substandard	37,793		48,652		5,660		5,055		97,160
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	461,490	$	642,967	$	91,994	$	41,897	$	1,238,348
At December 31, 2014
Grade:
1. Cash secured/ 2. Fully secured	$	4,248	$	—	$	1,262	$	—	$	5,510
3. Strong	14,013		8,504		3,897		—		26,414
4. Satisfactory	23,931		30,587		8,731		339		63,588
5. Acceptable	301,425		402,719		55,111		24,535		783,790
6. Pre-watch	65,993		123,129		4,956		5,384		199,462
7. Special Mention	7,166		17,505		—		1,304		25,975
8. Substandard	41,051		46,034		5,930		5,370		98,385
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	457,827	$	628,478	$	79,887	$	36,932	$	1,203,124

The following table presents classifications for acquired loans:



(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate— Commercial		Real Estate— Construction		Real Estate— Residential Secured for Business Purpose		Total
At March 31, 2015
Grade:
1. Cash secured/ 2. Fully secured	$	1,118	$	—	$	—	$	—	$	1,118
3. Strong	—		—		—		—		—
4. Satisfactory	1,490		3,424		1,274		3,062		9,250
5. Acceptable	26,011		134,521		48,644		136,036		345,212
6. Pre-watch	316		328		—		588		1,232
7. Special Mention	285		184		—		1,093		1,562
8. Substandard	569		1,400		28		619		2,616
9. Doubtful	—		—		—		—		—
10.Loss	—		—		—		—		—
Total	$	29,789	$	139,857	$	49,946	$	141,398	$	360,990

The Corporation did not have any acquired loans at December 31, 2014.

Credit Exposure—Real Estate—Residential Secured for Personal Purpose, Real Estate—Home Equity Secured for Personal Purpose, Loans to individuals, Lease Financing Credit Risk Profile by Payment Activity

The Corporation monitors the credit risk profile by payment activity for the following classifications of loans and leases: residential real estate loans secured for a personal purpose, home equity loans secured for a personal purpose, loans to individuals and lease financings. Nonperforming loans and leases are loans past due 90 days or more, loans and leases on nonaccrual of interest and troubled debt restructured loans and lease modifications. Performing loans and leases are reviewed only if the loan becomes 60 days or more past due. Nonperforming loans and leases are reviewed monthly. Performing loans and leases have a nominal to moderate risk of loss. Nonperforming loans and leases are loans or leases with a well-defined weakness and where collection in-full is unlikely.

The following table presents classifications for originated loans:



(Dollars in thousands)	Real Estate— Residential Secured for Personal Purpose		Real Estate— Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financing		Total
At March 31, 2015
Performing	$	169,628	$	111,432	$	29,373	$	115,459	$	425,892
Nonperforming	802		167		247		499		1,715
Total	$	170,430	$	111,599	$	29,620	$	115,958	$	427,607
At December 31, 2014
Performing	$	166,338	$	108,035	$	29,576	$	118,025	$	421,974
Nonperforming	512		215		365		435		1,527
Total	$	166,850	$	108,250	$	29,941	$	118,460	$	423,501

The following table presents classifications for acquired loans:



(Dollars in thousands)	Real Estate— Residential Secured for Personal Purpose		Real Estate— Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financing		Total
At March 31, 2015
Performing	$	3,836	$	12,625	$	371	$	—	$	16,832
Nonperforming	3		60		—		—		63
Total	$	3,839	$	12,685	$	371	$	—	$	16,895

The Corporation did not have any acquired loans at December 31, 2014.

Risks associated with lending activities include, among other things, the impact of changes in interest rates and economic conditions, which may adversely impact the ability of borrowers to repay outstanding loans, and impact the value of the associated collateral.

Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans with a business purpose are generally perceived as having more risk of default than residential real estate loans with a personal purpose and consumer loans. These types of loans involve larger loan balances to a single borrower or groups of related borrowers. Commercial real estate loans may be affected to a greater extent than residential loans by adverse conditions in real estate markets or the economy because commercial real estate borrowers’ ability to repay their loans depends on successful development of their properties and factors affecting residential real estate borrowers.

Commercial, financial and agricultural business loans are typically based on the borrowers’ ability to repay the loans from the cash flow of their businesses. These loans may involve greater risk because the availability of funds to repay each loan depends substantially on the success of the business. In addition, the collateral securing the loans often depreciates over time, is difficult to appraise and liquidate and fluctuates in value based on the success of the business.

Risk of loss on a construction loan depends largely upon whether our initial estimate of the property’s value at completion of construction equals or exceeds the cost of the property construction (including interest). During the construction phase, a number of factors can result in delays and cost overruns. If estimates of value are inaccurate or if actual construction costs exceed estimates, the value of the property securing the loan may be insufficient to ensure full repayment when completed through a permanent loan or by seizure of collateral. Included in real estate-construction is track development financing. Risk factors related to track development financing include the demand for residential housing and the real estate valuation market. When projects move slower than anticipated, the properties may have significantly lower values than when the original underwriting was completed, resulting in lower collateral values to support the loan. Extended time frames also cause the interest carrying cost for a project to be higher than the builder projected, negatively impacting the builder’s profit and cash flow and, therefore, their ability to make principal and interest payments.

Commercial real estate loans and residential real estate loans with a business purpose secured by owner-occupied properties are dependent upon the successful operation of the borrower’s business. If the operating company suffers difficulties in terms of sales volume and/or profitability, the borrower’s ability to repay the loan may be impaired. Loans secured by properties where repayment is dependent upon payment of rent by third party tenants or the sale of the property may be impacted by loss of tenants, lower lease rates needed to attract new tenants or the inability to sell a completed project in a timely fashion and at a profit.

Commercial, financial and agricultural loans, commercial real estate loans, construction loans and residential real estate loans secured for a business purpose are more susceptible to a risk of loss during a downturn in the business cycle. The Corporation has strict underwriting, review, and monitoring procedures in place, however, these procedures cannot eliminate all of the risks related to these loans.

The Corporation focuses on both assessing the borrower’s capacity and willingness to repay and on obtaining sufficient collateral. Commercial, financial and agricultural loans are generally secured by the borrower’s assets and by personal guarantees. Commercial real estate and residential real estate loans secured for a business purpose are originated primarily within the Southeastern Pennsylvania market area at conservative loan-to-value ratios and often with a guarantee of the borrowers. Management closely monitors the composition and quality of the total commercial loan portfolio to ensure that any credit concentrations by borrower or industry are closely monitored.

The Corporation originates fixed-rate and adjustable-rate real estate-residential mortgage loans that are secured by the underlying 1- to 4-family residential properties for personal purposes. Credit risk exposure in this area of lending is minimized by the evaluation of the credit worthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to underwriting policies that emphasize conservative loan-to-value ratios of generally no more than 80%. Residential mortgage loans granted in excess of the 80% loan-to-value ratio criterion are generally insured by private mortgage insurance.

In the real estate-home equity loan portfolio secured for a personal purpose, credit exposure is minimized by the evaluation of the creditworthiness of the borrower, including debt-to-equity ratios, credit scores and adherence to the Corporation’s underwriting policies. Combined loan-to-value ratios are generally limited to 80%, but increased to 85% for the Corporation’s strongest profile borrower. Other credit considerations and compensating factors may support higher combined loan-to-value ratios.

Credit risk for direct consumer loans is controlled by strict adherence to conservative underwriting standards that consider debt-to-income levels and the creditworthiness of the borrower and, if secured, collateral values. These loans are included within the portfolio of loans to individuals.

The primary risks that are involved with lease financing receivables are credit underwriting and borrower industry concentrations. The Corporation has strict underwriting, review, and monitoring procedures in place to mitigate this risk. Risk also lies in the residual value of the underlying equipment. Residual values are subject to judgments as to the value of the underlying equipment that can be affected by changes in economic and market conditions and the financial viability of the residual guarantors and insurers. To the extent not guaranteed or assumed by a third party, or otherwise insured against, the Corporation bears the risk of ownership of the leased assets. This includes the risk that the actual value of the leased assets at the end of the lease term will be less than the residual value. The Corporation greatly reduces this risk primarily by using $1.00 buyout leases, in which the entire cost of the leased equipment is included in the contractual payments, leaving no residual payment at the end of the lease term.

Reserve for Loan and Lease Losses and Recorded Investment in Loans and Leases

The following presents, by portfolio segment, for originated loans, a summary of the activity in the reserve for loan and lease losses, the balance in the reserve for loan and lease losses disaggregated on the basis of impairment method and the recorded investment in loans and leases disaggregated on the basis of impairment method for the three months ended March 31, 2015 and 2014:



(Dollars in thousands)	Commercial, Financial and Agricultural			Real Estate— Commercial and Construction			Real Estate— Residential Secured for Business Purpose			Real Estate— Residential and Home Equity Secured for Personal Purpose			Loans to Individuals			Lease Financings			Unallocated			Total
Three Months Ended March 31, 2015
Reserve for loan and lease losses:
Beginning balance	$	6,920		$	8,943		$	763		$	1,124		$	360		$	985		$	1,567		$	20,662
Charge-offs	(300		)	(348		)	—			(31		)	(184		)	(230		)	N/A			(1,093		)
Recoveries	110			65			6			1			48			61			N/A			291
(Recovery of provision) provision	(18		)	988			(101		)	34			141			197			(167		)	1,074
Ending balance	$	6,712		$	9,648		$	668		$	1,128		$	365		$	1,013		$	1,400		$	20,934
Three Months Ended March 31, 2014
Reserve for loan and lease losses:
Beginning balance	$	9,789		$	8,780		$	1,062		$	1,284		$	694		$	1,285		$	1,600		$	24,494
Charge-offs	(1,439		)	(57		)	(15		)	(80		)	(223		)	(147		)	N/A			(1,961		)
Recoveries	45			370			3			1			78			62			N/A			559
Provision	1,152			154			6			16			49			95			3			1,475
Ending balance	$	9,547		$	9,247		$	1,056		$	1,221		$	598		$	1,295		$	1,603		$	24,567

N/A – Not applicable



(Dollars in thousands)	Commercial, Financial and Agricultural		Real Estate— Commercial and Construction		Real Estate— Residential Secured for Business Purpose		Real Estate— Residential and Home Equity Secured for Personal Purpose		Loans to Individuals		Lease Financings		Unallocated		Total
At March 31, 2015
Reserve for loan and lease losses:
Ending balance: individually evaluated for impairment	$	1,004	$	—	$	—	$	—	$	—	$	—	N/A		$	1,004
Ending balance: collectively evaluated for impairment	5,708		9,648		668		1,128		365		1,013		1,400		19,930
Total ending balance	$	6,712	$	9,648	$	668	$	1,128	$	365	$	1,013	$	1,400	$	20,934
Loans and leases held for investment:
Ending balance: individually evaluated for impairment	$	15,124	$	34,380	$	3,239	$	909	$	—	$	—			$	53,652
Ending balance: collectively evaluated for impairment	446,366		700,581		38,658		281,120		29,620		115,958				1,612,303
Total ending balance	$	461,490	$	734,961	$	41,897	$	282,029	$	29,620	$	115,958			$	1,665,955
At March 31, 2014
Reserve for loan and lease losses:
Ending balance: individually evaluated for impairment	$	1,022	$	17	$	533	$	—	$	—	$	—	N/A		$	1,572
Ending balance: collectively evaluated for impairment	8,525		9,230		523		1,221		598		1,295		1,603		22,995
Total ending balance	$	9,547	$	9,247	$	1,056	$	1,221	$	598	$	1,295	$	1,603	$	24,567
Loans and leases held for investment:
Ending balance: individually evaluated for impairment	$	12,931	$	36,849	$	2,629	$	1,029	$	2	$	—			$	53,440
Ending balance: collectively evaluated for impairment	435,796		647,250		34,367		245,346		36,819		107,428				1,507,006
Total ending balance	$	448,727	$	684,099	$	36,996	$	246,375	$	36,821	$	107,428			$	1,560,446

N/A – Not applicable

Subsequent to the acquisition date, the methods utilized to estimate the required allowance for loan losses for acquired non-impaired loans is similar to originated loans, however, the Corporation records a provision for loan losses only when the required allowance exceeds the remaining fair value adjustment. The present value of any decreases in expected cash flows after the acquisition date of purchased impaired loans will generally result in an impairment charge recorded as a provision for loan losses, resulting in an increase to the allowance. At March 31, 2015, there was no allowance for loan losses related to acquired loans.

Impaired Loans

The following presents, by class of loans, the recorded investment and unpaid principal balance of impaired loans , the amounts of the impaired loans for which there is not an allowance for credit losses and the amounts for which there is an allowance for credit losses at March 31, 2015 and December 31, 2014. The impaired loans exclude loans acquired with deteriorated credit quality.



	At March 31, 2015						At December 31, 2014
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Impaired loans with no related allowance recorded:
Commercial, financial and agricultural	$	11,112	$	11,778			$	12,628	$	13,050
Real estate—commercial real estate	28,720		29,782				29,779		30,810
Real estate—construction	5,660		6,006				5,931		6,474
Real estate—residential secured for business purpose	3,239		3,295				3,008		3,044
Real estate—residential secured for personal purpose	802		839				512		547
Real estate—home equity secured for personal purpose	107		107				184		184
Total impaired loans with no allowance recorded	$	49,640	$	51,807			$	52,042	$	54,109
Impaired loans with an allowance recorded:
Commercial, financial and agricultural	$	4,012	$	4,017	$	1,004	$	3,933	$	3,935	$	920
Real estate—commercial real estate	—		—		—		216		216		78
Total impaired loans with an allowance recorded	$	4,012	$	4,017	$	1,004	$	4,149	$	4,151	$	998



	At March 31, 2015						At December 31, 2014
(Dollars in thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Related Allowance
Total impaired loans:
Commercial, financial and agricultural	$	15,124	$	15,795	$	1,004	$	16,561	$	16,985	$	920
Real estate—commercial real estate	28,720		29,782		—		29,995		31,026		78
Real estate—construction	5,660		6,006		—		5,931		6,474		—
Real estate—residential secured for business purpose	3,239		3,295		—		3,008		3,044		—
Real estate—residential secured for personal purpose	802		839		—		512		547		—
Real estate—home equity secured for personal purpose	107		107		—		184		184		—
Total impaired loans	$	53,652	$	55,824	$	1,004	$	56,191	$	58,260	$	998

Impaired loans includes nonaccrual loans and leases, accruing troubled debt restructured loans and lease modifications and other accruing impaired loans for which it is probable that not all principal and interest payments due will be collectible in accordance with the contractual terms. These loans are individually measured to determine the amount of potential impairment. The loans are reviewed for impairment based on the fair value of the collateral for collateral dependent loans and for certain loans based on discounted cash flows using the loans’ initial effective interest rates. Impaired loans included other accruing impaired loans of $30.1 million and $33.8 million at March 31, 2015 and December 31, 2014, respectively. Specific reserves on other accruing impaired loans were $428 thousand and $476 thousand at March 31, 2015 and December 31, 2014, respectively.

The following presents by class of loans, the average recorded investment in impaired loans and an analysis of interest on impaired loans. A loan may remain on accrual status if it is in the process of collection and is either guaranteed or well secured. Therefore, interest income on accruing impaired loans is recognized using the accrual method.



	Three Months Ended March 31, 2015						Three Months Ended March 31, 2014
(Dollars in thousands)	Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms		Average Recorded Investment		Interest Income Recognized*		Additional Interest Income That Would Have Been Recognized Under Original Terms
Commercial, financial and agricultural	$	16,094	$	142	$	87	$	14,075	$	127	$	65
Real estate—commercial real estate	29,124		320		83		25,957		282		94
Real estate—construction	5,748		—		77		12,500		42		124
Real estate—residential secured for business purpose	3,183		29		16		2,058		16		20
Real estate—residential secured for personal purpose	584		—		13		1,029		—		14
Real estate—home equity secured for personal purpose	165		—		3		77		—		1
Loans to individuals	—		—		—		10		—		—
Total	$	54,898	$	491	$	279	$	55,706	$	467	$	318


*	Includes interest income recognized on a cash basis for nonaccrual loans of $4 thousand and $23 thousand for the three months ended March 31, 2015 and 2014, respectively and interest income recognized on the accrual method for accruing impaired loans of $487 thousand and $444 thousand for the three months ended March 31, 2015 and 2014, respectively.

Troubled Debt Restructured Loans

The following presents, by class of loans, information regarding accruing and nonaccrual loans that were restructured:



	Three Months Ended March 31, 2015							Three Months Ended March 31, 2014
(Dollars in thousands)	Number of Loans	Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Allowance		Number of Loans	Pre- Restructuring Outstanding Recorded Investment		Post- Restructuring Outstanding Recorded Investment		Related Allowance
Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural	1	$	143	$	143	$	—	—	$	—	$	—	$	—
Real estate—residential secured for business purpose	1	353		353		—		—	—		—		—
Total	2	$	496	$	496	$	—	—	$	—	$	—	$	—
Nonaccrual Troubled Debt Restructured Loans:
Commercial, financial and agricultural	1	$	122	$	122	$	—	—	$	—	$	—	$	—
Real estate—commercial real estate	—	—		—		—		1	50		50		—
Real estate—residential secured for business purpose	—	—		—		—		2	688		688		—
Total	1	$	122	$	122	$	—	3	$	738	$	738	$	—

The Corporation grants concessions primarily related to extensions of interest-only payment periods and an occasional payment modification. These modifications typically are for a short-term basis up to one year. Our goal when restructuring a credit is to establish a reasonable period of time to provide cash flow relief to customers experiencing cash flow difficulties. Accruing troubled debt restructured loans are primarily comprised of loans on which interest is being accrued under the restructured terms, and the loans are current or less than ninety days past due.

The following presents, by class of loans, information regarding the types of concessions granted on accruing and nonaccrual loans that were restructured during the three months ended March 31, 2015 and 2014.



	Temporary Payment Reduction			Interest Rate Reduction			Maturity Date Extension			Total Concessions Granted
(Dollars in thousands)	No. of Loans	Amount		No. of Loans	Amount		No. of Loans	Amount		No. of Loans	Amount
Three Months Ended March 31, 2015
Accruing Troubled Debt Restructured Loans:
Commercial, financial and agricultural	1	$	143	—	$	—	—	$	—	1	$	143
Real estate—residential secured for business purpose	1	353		—	—		—	—		1	353
Total	2	$	496	—	$	—	—	$	—	2	$	496
Nonaccrual Troubled Debt Restructured Loans:
Commercial, financial and agricultural	1	$	122	—	$	—	—	$	—	1	$	122
Total	1	$	122	—	$	—	—	$	—	1	$	122
Three Months Ended March 31, 2014
Accruing Troubled Debt Restructured Loans:
Total	—	$	—	—	$	—	—	$	—	—	$	—
Nonaccrual Troubled Debt Restructured Loans:
Real estate—commercial real estate	—	$	—	1	$	50	—	$	—	1	$	50
Real estate—residential secured for business purpose	—	—		1	55		1	633		2	688
Total	—	$	—	2	$	105	1	$	633	3	$	738

The following presents, by class of loans, information regarding accruing and nonaccrual troubled debt restructured loans, for which there were payment defaults within twelve months of the restructuring date:



	Three Months Ended March 31,
	2015			2014
(Dollars in thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Accruing Troubled Debt Restructured Loans:
Total	—	$	—	—	$	—
Nonaccrual Troubled Debt Restructured Loans:
Commercial, financial and agricultural	2	$	200	—	$	—
Total	2	$	200	—	$	—

As a result of payment defaults during the first quarter of 2015, commercial accruing troubled debt restructured loans totaling $200 thousand were placed on nonaccrual of interest status and subsequently charged-off.

The following presents, by class of loans, information regarding consumer mortgages collateralized by residential real estate property that are in the process of foreclosure at March 31, 2015 and December 31, 2014:



(Dollars in thousands)	At March 31, 2015		At December 31, 2014
Real estate-residential secured for personal purpose	$	354	$	62
Real estate-home equity secured for personal purpose	166		—
Total	$	520	$	62

The Corporation held no foreclosed consumer residential real estate property at March 31, 2015 and December 31, 2014.