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Loans and Leases
 6 Months Ended
Jun. 30, 2019
Receivables [Abstract]  
Loans and Leases Loans and Leases
Summary of Major Loan and Lease Categories
 
At June 30, 2019
(Dollars in thousands)
Originated
 
Acquired
 
Total
Commercial, financial and agricultural
$
921,182

 
$
15,967

 
$
937,149

Real estate-commercial
1,650,052

 
212,095

 
1,862,147

Real estate-construction
230,459

 
—

 
230,459

Real estate-residential secured for business purpose
314,629

 
51,011

 
365,640

Real estate-residential secured for personal purpose
373,792

 
46,017

 
419,809

Real estate-home equity secured for personal purpose
170,482

 
7,446

 
177,928

Loans to individuals
32,345

 
140

 
32,485

Lease financings
142,287

 
—

 
142,287

Total loans and leases held for investment, net of deferred income
$
3,835,228

 
$
332,676

 
$
4,167,904

Imputed interest on lease financings, included in the above table
$
(15,415
)
 
$
—

 
$
(15,415
)
Net deferred costs, included in the above table
4,701

 
—

 
4,701

Overdraft deposits included in the above table
127

 
—

 
127



 
At December 31, 2018
(Dollars in thousands)
Originated
 
Acquired
 
Total
Commercial, financial and agricultural
$
913,166

 
$
24,519

 
$
937,685

Real estate-commercial
1,507,579

 
233,625

 
1,741,204

Real estate-construction
215,513

 
—

 
215,513

Real estate-residential secured for business purpose
302,393

 
60,403

 
362,796

Real estate-residential secured for personal purpose
338,451

 
49,959

 
388,410

Real estate-home equity secured for personal purpose
177,523

 
8,728

 
186,251

Loans to individuals
32,617

 
142

 
32,759

Lease financings
141,956

 
—

 
141,956

Total loans and leases held for investment, net of deferred income
$
3,629,198

 
$
377,376

 
$
4,006,574

Imputed interest on lease financings, included in the above table
$
(15,118
)
 
$
—

 
$
(15,118
)
Net deferred costs, included in the above table
3,930

 
—

 
3,930

Overdraft deposits included in the above table
139

 
—

 
139


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 June 30, 2019 totaled $332.7 million, including $289.2 million of loans from the Fox Chase acquisition and $43.5 million from the Valley Green Bank acquisition. At June 30, 2019, loans acquired with deteriorated credit quality, or acquired credit impaired loans, totaled $569 thousand representing $61 thousand from the Fox Chase acquisition and $508 thousand from the Valley Green Bank acquisition. Acquired credit impaired loans are accounted for in accordance with Accounting Standards Codification (ASC) Topic 310-30.
The outstanding principal balance and carrying amount for acquired credit impaired loans at June 30, 2019 and December 31, 2018 were as follows:
(Dollars in thousands)
At June 30, 2019
 
At December 31, 2018
Outstanding principal balance
$
677

 
$
893

Carrying amount
569

 
695

Reserve for loan losses
—

 
—

The following table presents the changes in accretable yield on acquired credit impaired loans:
 
Six Months Ended June 30,
(Dollars in thousands)
2019
 
2018
Beginning of period
$
—

 
$
11

Reclassification from nonaccretable discount
215

 
375

Accretable yield amortized to interest income
(215
)
 
(386
)
End of period
$
—

 
$
—



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, acquired credit impaired loans and nonaccrual loans and leases at June 30, 2019 and December 31, 2018:
 
Accruing Loans and Leases
 
 
 
 
 
 
(Dollars in thousands)
30-59
Days
Past Due
 
60-89
Days
Past Due
 
90 Days
or more
Past Due
 
Total
Past Due
 
Current
 
Total Accruing Loans and Leases
 
Acquired Credit Impaired
 
Nonaccrual Loans and Leases
 
Total Loans
and Leases
Held for
Investment
At June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
527

 
$
274

 
$
—

 
$
801

 
$
934,198

 
$
934,999

 
$
—

 
$
2,150

 
$
937,149

Real estate—commercial real estate and construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
2,057

 
6,190

 
516

 
8,763

 
1,835,439

 
1,844,202

 
206

 
17,739

 
1,862,147

Construction
500

 
1,158

 
230

 
1,888

 
228,465

 
230,353

 
—

 
106

 
230,459

Real estate—residential and home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential secured for business purpose
919

 
2,284

 
434

 
3,637

 
360,105

 
363,742

 
302

 
1,596

 
365,640

Residential secured for personal purpose
1,529

 
258

 
—

 
1,787

 
415,794

 
417,581

 
61

 
2,167

 
419,809

Home equity secured for personal purpose
206

 
—

 
—

 
206

 
176,433

 
176,639

 
—

 
1,289

 
177,928

Loans to individuals
101

 
47

 
129

 
277

 
32,208

 
32,485

 
—

 
—

 
32,485

Lease financings
620

 
195

 
70

 
885

 
141,302

 
142,187

 
—

 
100

 
142,287

Total
$
6,459

 
$
10,406

 
$
1,379

 
$
18,244

 
$
4,123,944

 
$
4,142,188

 
$
569

 
$
25,147

 
$
4,167,904

At December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
1,043

 
$
122

 
$
—

 
$
1,165

 
$
933,155

 
$
934,320

 
$
—

 
$
3,365

 
$
937,685

Real estate—commercial real estate and construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
4,995

 
1,538

 
—

 
6,533

 
1,716,251

 
1,722,784

 
206

 
18,214

 
1,741,204

Construction
2,163

 
—

 
—

 
2,163

 
213,244

 
215,407

 
—

 
106

 
215,513

Real estate—residential and home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential secured for business purpose
2,497

 
728

 
—

 
3,225

 
357,827

 
361,052

 
426

 
1,318

 
362,796

Residential secured for personal purpose
2,334

 
—

 
—

 
2,334

 
384,426

 
386,760

 
63

 
1,587

 
388,410

Home equity secured for personal purpose
305

 
96

 
—

 
401

 
184,402

 
184,803

 
—

 
1,448

 
186,251

Loans to individuals
207

 
29

 
55

 
291

 
32,468

 
32,759

 
—

 
—

 
32,759

Lease financings
2,460

 
411

 
137

 
3,008

 
138,778

 
141,786

 
—

 
170

 
141,956

Total
$
16,004

 
$
2,924

 
$
192

 
$
19,120

 
$
3,960,551

 
$
3,979,671

 
$
695

 
$
26,208

 
$
4,006,574



Nonperforming Loans and Leases
The following presents, by class of loans and leases, nonperforming loans and leases at June 30, 2019 and December 31, 2018. Nonperforming loans exclude acquired credit impaired loans from Fox Chase and Valley Green.
 
At June 30, 2019
 
At December 31, 2018
(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 Nonperforming
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 Nonperforming
Loans and
Leases
Commercial, financial and agricultural
$
2,150

 
$
—

 
$
—

 
$
2,150

 
$
3,365

 
$
382

 
$
—

 
$
3,747

Real estate—commercial real estate and construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
17,739

 
—

 
516

 
18,255

 
18,214

 
—

 
—

 
18,214

Construction
106

 
—

 
230

 
336

 
106

 
—

 
—

 
106

Real estate—residential and home equity:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Residential secured for business purpose
1,596

 
—

 
434

 
2,030

 
1,318

 
160

 
—

 
1,478

Residential secured for personal purpose
2,167

 
—

 
—

 
2,167

 
1,587

 
—

 
—

 
1,587

Home equity secured for personal purpose
1,289

 
55

 
—

 
1,344

 
1,448

 
—

 
—

 
1,448

Loans to individuals
—

 
—

 
129

 
129

 
—

 
—

 
55

 
55

Lease financings
100

 
—

 
70

 
170

 
170

 
—

 
137

 
307

Total
$
25,147

 
$
55

 
$
1,379

 
$
26,581

 
$
26,208

 
$
542

 
$
192

 
$
26,942

 * Includes nonaccrual troubled debt restructured loans of $2.6 million and $1.3 million at June 30, 2019 and December 31, 2018, 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 June 30, 2019 and December 31, 2018.
The Corporation employs a risk rating system related to the credit quality of commercial loans and residential real estate loans secured for a business purpose. The following is a description of the internal risk ratings and the likelihood of loss related to each risk rating. Loans with a relationship balance of less than $1 million are reviewed on a performance basis, with the primary monitored metrics being delinquency (60 days or more past due). Loans with relationships greater than $1 million are reviewed at least annually.  Loan relationships with a higher risk profile or classified as special mention or substandard are reviewed at least quarterly, or more frequently based on management’s discretion. 

1.
Pass—Loans considered satisfactory with no indications of deterioration
2.
Special Mention—Potential weakness that deserves management's close attention
3.
Substandard—Well-defined weakness or weaknesses that jeopardize the liquidation of the debt
4.
Doubtful—Collection or liquidation in-full, on the basis of current existing facts, conditions and values, highly questionable and improbable

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 June 30, 2019
 
 
 
 
 
 
 
 
 
Grade:
 
 
 
 
 
 
 
 
 
1. Pass
$
874,098

 
$
1,622,980

 
$
228,421

 
$
309,658

 
$
3,035,157

2. Special Mention
27,036

 
17,773

 
1,932

 
1,705

 
48,446

3. Substandard
20,048

 
9,299

 
106

 
3,266

 
32,719

4. Doubtful
—

 
—

 
—

 
—

 
—

Total
$
921,182

 
$
1,650,052

 
$
230,459

 
$
314,629

 
$
3,116,322

At December 31, 2018
 
 
 
 
 
 
 
 
 
Grade:
 
 
 
 
 
 
 
 
 
1. Pass
$
882,736

 
$
1,455,234

 
$
215,407

 
$
298,356

 
$
2,851,733

2. Special Mention
23,287

 
31,791

 
—

 
721

 
55,799

3. Substandard
7,143

 
20,554

 
106

 
3,316

 
31,119

4. Doubtful
—

 
—

 
—

 
—

 
—

Total
$
913,166

 
$
1,507,579

 
$
215,513

 
$
302,393

 
$
2,938,651

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 June 30, 2019
 
 
 
 
 
 
 
 
 
Grade:
 
 
 
 
 
 
 
 
 
1. Pass
$
15,967

 
$
199,560

 
$
—

 
$
50,446

 
$
265,973

2. Special Mention
—

 
—

 
—

 
—

 
—

3. Substandard
—

 
12,535

 
—

 
565

 
13,100

4. Doubtful
—

 
—

 
—

 
—

 
—

Total
$
15,967

 
$
212,095

 
$
—

 
$
51,011

 
$
279,073

December 31, 2018
 
 
 
 
 
 
 
 
 
Grade:
 
 
 
 
 
 
 
 
 
1. Pass
$
24,450

 
$
220,911

 
$
—

 
$
59,567

 
$
304,928

2. Special Mention
—

 
—

 
—

 
—

 
—

3. Substandard
69

 
12,714

 
—

 
836

 
13,619

4. Doubtful
—

 
—

 
—

 
—

 
—

Total
$
24,519

 
$
233,625

 
$
—

 
$
60,403

 
$
318,547


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 and leases 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.
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
Financings
 
Total
At June 30, 2019
 
 
 
 
 
 
 
 
 
Performing
$
372,578

 
$
170,172

 
$
32,216

 
$
142,117

 
$
717,083

Nonperforming
1,214

 
310

 
129

 
170

 
1,823

Total
$
373,792

 
$
170,482

 
$
32,345

 
$
142,287

 
$
718,906

At December 31, 2018
 
 
 
 
 
 
 
 
 
Performing
$
337,762

 
$
177,139

 
$
32,562

 
$
141,649

 
$
689,112

Nonperforming
689

 
384

 
55

 
307

 
1,435

Total
$
338,451

 
$
177,523

 
$
32,617

 
$
141,956

 
$
690,547


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
Financings
 
Total
At June 30, 2019
 
 
 
 
 
 
 
 
 
Performing
$
45,064

 
$
6,412

 
$
140

 
$
—

 
$
51,616

Nonperforming
953

 
1,034

 
—

 
—

 
1,987

Total
$
46,017

 
$
7,446

 
$
140

 
$
—

 
$
53,603

At December 31, 2018
 
 
 
 
 
 
 
 
 
Performing
$
49,061

 
$
7,664

 
$
142

 
$
—

 
$
56,867

Nonperforming
898

 
1,064

 
—

 
—

 
1,962

Total
$
49,959

 
$
8,728

 
$
142

 
$
—

 
$
58,829



Reserve for Loan and Lease Losses and Recorded Investment in Loans and Leases
The following presents, by portfolio segment, a summary of the activity in the reserve for loan and lease losses for the three and six months ended June 30, 2019 and 2018:
(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 June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserve for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
8,950

 
$
14,981

 
$
2,302

 
$
3,379

 
$
469

 
$
1,275

 
$
246

 
$
31,602

Charge-offs
(1,018
)
 
(33
)
 
—

 
(4
)
 
(51
)
 
(110
)
 
N/A

 
(1,216
)
Recoveries
19

 
—

 
6

 
7

 
16

 
90

 
N/A

 
138

Provision (recovery of provision)
1,178

 
530

 
170

 
136

 
47

 
(14
)
 
29

 
2,076

Ending balance
$
9,129

 
$
15,478

 
$
2,478

 
$
3,518

 
$
481

 
$
1,241

 
$
275

 
$
32,600

Three Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserve for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
6,942

 
$
11,178

 
$
1,871

 
$
1,908

 
$
372

 
$
1,079

 
$
60

 
$
23,410

Charge-offs
(13,048
)
 
—

 
—

 
—

 
(79
)
 
(169
)
 
N/A

 
(13,296
)
Recoveries
23

 
—

 
7

 
8

 
16

 
75

 
N/A

 
129

Provision (recovery of provision)
13,341

 
1,149

 
126

 
578

 
138

 
86

 
(9
)
 
15,409

Ending balance
$
7,258

 
$
12,327

 
$
2,004

 
$
2,494

 
$
447

 
$
1,071

 
$
51

 
$
25,652

Six Months Ended June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserve for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
7,983

 
$
13,903

 
$
2,236

 
$
3,199

 
$
484

 
$
1,288

 
$
271

 
$
29,364

Charge-offs
(1,486
)
 
(74
)
 
—

 
(15
)
 
(136
)
 
(214
)
 
N/A

 
(1,925
)
Recoveries
101

 
91

 
10

 
12

 
38

 
148

 
N/A

 
400

Provision
2,531

 
1,558

 
232

 
321

 
95

 
19

 
4

 
4,760

Provision for acquired credit impaired loans
—

 
—

 
—

 
1

 
—

 
—

 
—

 
1

Ending balance
$
9,129

 
$
15,478

 
$
2,478

 
$
3,518

 
$
481

 
$
1,241

 
$
275

 
$
32,600

Six Months Ended June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserve for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
$
6,742

 
$
9,839

 
$
1,661

 
$
1,754

 
$
373

 
$
1,132

 
$
54

 
$
21,555

Charge-offs
(13,649
)
 
(40
)
 
—

 
—

 
(171
)
 
(305
)
 
N/A

 
(14,165
)
Recoveries
249

 
73

 
258

 
65

 
46

 
109

 
N/A

 
800

Provision (recovery of provision)
13,916

 
2,455

 
85

 
674

 
199

 
135

 
(3
)
 
17,461

Provision for acquired credit impaired loans
—

 
—

 
—

 
1

 
—

 
—

 
—

 
1

Ending balance
$
7,258

 
$
12,327

 
$
2,004

 
$
2,494

 
$
447

 
$
1,071

 
$
51

 
$
25,652

N/A – Not applicable
Charge-offs for the three and six months ended June 30, 2018 included a charge-off of $12.7 million for a commercial loan relationship related to fraudulent activities perpetrated by employees of a borrower. The Bank owned a participating interest which originally totaled $13.0 million in an approximately $80.0 million commercial lending facility. The charge-off represented the entire principal amount owed to the Bank.
The following presents, by portfolio segment, 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 at June 30, 2019 and 2018:
(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 June 30, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserve for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
$
99

 
$
1,840

 
$
165

 
$
335

 
$
—

 
$
—

 
N/A

 
$
2,439

Ending balance: collectively evaluated for impairment
9,030

 
13,630

 
2,313

 
3,183

 
481

 
1,241

 
275

 
30,153

Ending balance: acquired non-credit impaired loans evaluated for impairment
—

 
8

 
—

 
—

 
—

 
—

 
—

 
8

Total ending balance
$
9,129

 
$
15,478

 
$
2,478

 
$
3,518

 
$
481

 
$
1,241

 
$
275

 
$
32,600

Loans and leases held for investment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment (1)
$
2,150

 
$
17,845

 
$
1,596

 
$
3,511

 
$
—

 
$
—

 
 
 
$
25,102

Ending balance: collectively evaluated for impairment
919,032

 
1,873,296

 
313,291

 
542,751

 
32,345

 
142,287

 
 
 
3,823,002

Loans measured at fair value
—

 
1,725

 
—

 
—

 
—

 
—

 
 
 
1,725

Acquired non-impaired loans
15,967

 
199,534

 
50,451

 
51,414

 
140

 
—

 
 
 
317,506

Acquired credit impaired loans
—

 
206

 
302

 
61

 
—

 
—

 
 
 
569

Total ending balance
$
937,149

 
$
2,092,606

 
$
365,640

 
$
597,737

 
$
32,485

 
$
142,287

 
 
 
$
4,167,904

At June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reserve for loan and lease losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment
$
646

 
$
866

 
$
12

 
$
—

 
$
—

 
$
—

 
N/A

 
$
1,524

Ending balance: collectively evaluated for impairment
6,612

 
11,420

 
1,951

 
2,494

 
447

 
1,071

 
51

 
24,046

Ending balance: acquired non-credit impaired loans evaluated for impairment
—

 
41

 
41

 
—

 
—

 
—

 
—

 
82

Total ending balance
$
7,258

 
$
12,327

 
$
2,004

 
$
2,494

 
$
447

 
$
1,071

 
$
51

 
$
25,652

Loans and leases held for investment:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance: individually evaluated for impairment (1)
$
6,238

 
$
21,004

 
$
2,132

 
$
3,306

 
$
—

 
$
1,250

 
 
 
$
33,930

Ending balance: collectively evaluated for impairment
875,390

 
1,569,475

 
265,283

 
470,994

 
31,048

 
131,872

 
 
 
3,344,062

Loans measured at fair value
—

 
1,847

 
—

 
—

 
—

 
—

 
 
 
1,847

Acquired non-impaired loans
44,265

 
259,998

 
70,837

 
62,318

 
143

 
—

 
 
 
437,561

Acquired credit impaired loans
267

 
206

 
460

 
65

 
—

 
—

 
 
 
998

Total ending balance
$
926,160

 
$
1,852,530

 
$
338,712

 
$
536,683

 
$
31,191

 
$
133,122

 
 
 
$
3,818,398

(1) Includes $14.6 million and $17.9 million of acquired loans which were individually evaluated for impairment at June 30, 2019 and 2018, respectively.
N/A – Not applicable
The Corporation does not provide a reserve for loan loss for acquired loans unless additional deterioration of the portfolio is identified over the projections utilized in the initial fair value analysis. After the acquisition measurement period, the present value of any decreases in expected cash flows of acquired credit impaired loans will generally result in an impairment charge recorded as a provision for loan loss.
Impaired Loans (excludes Lease Financings)
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 a reserve for credit losses and the amounts for which there is a reserve for credit losses at June 30, 2019 and December 31, 2018. The impaired loans exclude acquired credit impaired loans.
 
At June 30, 2019
 
At December 31, 2018
(Dollars in thousands)
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Reserve
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Reserve
Impaired loans with no related reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
1,980

 
$
2,590

 
 
 
$
2,776

 
$
3,361

 
 
Real estate—commercial real estate
5,158

 
6,163

 
 
 
6,578

 
7,516

 
 
Real estate—construction
106

 
111

 
 
 
106

 
111

 
 
Real estate—residential secured for business purpose
829

 
1,006

 
 
 
1,478

 
1,660

 
 
Real estate—residential secured for personal purpose
1,443

 
1,516

 
 
 
863

 
911

 
 
Real estate—home equity secured for personal purpose
1,269

 
1,329

 
 
 
1,373

 
1,404

 
 
Total impaired loans with no related reserve recorded
$
10,785

 
$
12,715

 
 
 
$
13,174

 
$
14,963

 
 
Impaired loans with a reserve recorded:
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
170

 
$
170

 
$
99

 
$
971

 
$
1,024

 
$
413

Real estate—commercial real estate
12,581

 
13,336

 
1,840

 
11,637

 
12,162

 
675

Real estate—residential secured for business purpose
767

 
769

 
165

 
—

 
—

 
—

Real estate—residential secured for personal purpose
724

 
724

 
260

 
724

 
724

 
252

Real estate—home equity secured for personal purpose
75

 
75

 
75

 
75

 
75

 
75

Total impaired loans with a reserve recorded
$
14,317

 
$
15,074

 
$
2,439

 
$
13,407

 
$
13,985

 
$
1,415

Total impaired loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
$
2,150

 
$
2,760

 
$
99

 
$
3,747

 
$
4,385

 
$
413

Real estate—commercial real estate
17,739

 
19,499

 
1,840

 
18,215

 
19,678

 
675

Real estate—construction
106

 
111

 
—

 
106

 
111

 
—

Real estate—residential secured for business purpose
1,596

 
1,775

 
165

 
1,478

 
1,660

 
—

Real estate—residential secured for personal purpose
2,167

 
2,240

 
260

 
1,587

 
1,635

 
252

Real estate—home equity secured for personal purpose
1,344

 
1,404

 
75

 
1,448

 
1,479

 
75

Total impaired loans
$
25,102

 
$
27,789

 
$
2,439

 
$
26,581

 
$
28,948

 
$
1,415


Impaired loans include nonaccrual loans and accruing troubled debt restructured loans for which it is probable that not all principal and interest payments due will be collectible in accordance with the original 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.
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 an accruing troubled debt restructured loan or 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 June 30, 2019
 
Three Months Ended June 30, 2018
(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
$
2,509

 
$
12

 
$
49

 
$
6,394

 
$
32

 
$
134

Real estate—commercial real estate
18,058

 
—

 
242

 
22,914

 
18

 
265

Real estate—construction
106

 
—

 
2

 
56

 
—

 
3

Real estate—residential secured for business purpose
1,557

 
—

 
36

 
1,966

 
5

 
23

Real estate—residential secured for personal purpose
1,937

 
—

 
29

 
889

 
2

 
33

Real estate—home equity secured for personal purpose
1,358

 
1

 
20

 
1,033

 
—

 
31

Total
$
25,525

 
$
13

 
$
378

 
$
33,252

 
$
57

 
$
489

*
Includes interest income recognized on a cash basis for nonaccrual loans of $12 thousand and $2 thousand for the three months ended June 30, 2019 and 2018, respectively, and interest income recognized on the accrual method for accruing impaired loans of $1 thousand and $55 thousand for the three months ended June 30, 2019 and 2018, respectively.
 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
(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
$
3,066

 
$
17

 
$
103

 
$
7,090

 
$
72

 
$
211

Real estate—commercial real estate
18,122

 
3

 
496

 
20,105

 
190

 
552

Real estate—construction
106

 
—

 
3

 
137

 
—

 
5

Real estate—residential secured for business purpose
1,443

 
—

 
56

 
2,107

 
10

 
47

Real estate—residential secured for personal purpose
1,792

 
—

 
54

 
720

 
3

 
44

Real estate—home equity secured for personal purpose
1,384

 
1

 
43

 
819

 
—

 
39

Total
$
25,913

 
$
21

 
$
755

 
$
30,978

 
$
275

 
$
898


*
Includes interest income recognized on a cash basis for nonaccrual loans of $15 thousand and $8 thousand for the six months ended June 30, 2019 and 2018, respectively, and interest income recognized on the accrual method for accruing impaired loans of $6 thousand and $267 thousand for the six months ended June 30, 2019 and 2018, respectively.

Impaired Leases
The Corporation had no impaired leases at June 30, 2019 or December 31, 2018.
Troubled Debt Restructured Loans
The following presents, by class of loans, information regarding accruing and nonaccrual loans that were restructured:
 
Three Months Ended June 30, 2019
 
Three Months Ended June 30, 2018
(Dollars in thousands)
Number
of
Loans
 
Pre-
Restructuring
Outstanding
Recorded
Investment
 
Post-
Restructuring
Outstanding
Recorded
Investment
 
Related
Reserve
 
Number
of
Loans
 
Pre-
Restructuring
Outstanding
Recorded
Investment
 
Post-
Restructuring
Outstanding
Recorded
Investment
 
Related
Reserve
Accruing Troubled Debt Restructured Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate—home equity secured for personal purpose
1

 
$
55

 
$
55

 
$
—

 
—

 
$
—

 
$
—

 
$
—

Total
1

 
$
55

 
$
55

 
$
—

 
—

 
$
—

 
$
—

 
$
—

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate—residential secured for personal purpose
—

 
$
—

 
$
—

 
$
—

 
1

 
$
66

 
$
66

 
$
—

Total
—

 
$
—

 
$
—

 
$
—

 
1

 
$
66

 
$
66

 
$
—


 
Six Months Ended June 30, 2019
 
Six Months Ended June 30, 2018
(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:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate—home equity secured for personal purpose
1

 
$
55

 
$
55

 
$
—

 
—

 
$
—

 
$
—

 
$
—

Total
1

 
$
55

 
$
55

 
$
—

 
—

 
$
—

 
$
—

 
$
—

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural*
2

 
$
956

 
$
956

 
$
—

 
—

 
$
—

 
$
—

 
$
—

Real estate—commercial real estate*
1

 
1,313

 
1,313

 
—

 
—

 
—

 
—

 
—

Real estate—residential secured for personal purpose
—

 
—

 
—

 
—

 
1

 
66

 
66

 
—

Total
3

 
$
2,269

 
$
2,269

 
$
—

 
1

 
$
66

 
$
66

 
$
—


* The three nonaccrual troubled debt restructured loans during the six months ended June 30, 2019 in the above table were modified via the execution of a forbearance agreement. These loans relate to one borrower and were on nonaccrual status at the time of modification.

The Corporation grants concessions to existing borrowers primarily related to extensions of interest-only payment periods and an occasional payment modification. These modifications typically are for up to one year. The 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 and six months ended June 30, 2019 and 2018.
 
Amortization Period Extension
(Dollars in thousands)
No. of
Loans
 
Amount
Three Months Ended June 30, 2019
 
 
 
Accruing Troubled Debt Restructured Loans:
 
 
 
Real estate—home equity secured for personal purpose
1

 
$
55

Total
1

 
$
55

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
Total
—

 
$
—

Three Months Ended June 30, 2018
 
 
 
Accruing Troubled Debt Restructured Loans:
 
 
 
Total
—

 
$
—

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
Real estate—residential secured for personal purpose
1

 
$
66

Total
1

 
$
66

Six Months Ended June 30, 2019
 
 
 
Accruing Troubled Debt Restructured Loans:
 
 
 
Real estate—home equity secured for personal purpose
1

 
$
55

Total
1

 
$
55

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
Commercial, financial and agricultural
2

 
$
956

Real estate—commercial real estate
1

 
1,313

Total
3

 
$
2,269

Six Months Ended June 30, 2018
 
 
 
Accruing Troubled Debt Restructured Loans:
 
 
 
Total
—

 
$
—

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
Real estate—residential secured for personal purpose
1

 
$
66

Total
1

 
$
66


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 June 30,
 
Six Months Ended June 30,
 
2019
 
2018
 
2019
 
2018
(Dollars in thousands)
Number
of Loans
 
Recorded
Investment
 
Number
of Loans
 
Recorded
Investment
 
Number
of Loans
 
Recorded
Investment
 
Number
of Loans
 
Recorded
Investment
Accruing Troubled Debt Restructured Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial, financial and agricultural
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
1

 
$
953

Total
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
1

 
$
953

Nonaccrual Troubled Debt Restructured Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
—

 
$
—

 
—

 
$
—

 
—

 
$
—

 
—

 
$
—


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 June 30, 2019 and December 31, 2018:
(Dollars in thousands)
At June 30, 2019
 
At December 31, 2018
Real estate-residential secured for personal purpose
$
714

 
$
563

Real estate-home equity secured for personal purpose
1,134

 
1,134

Total
$
1,848

 
$
1,697


    
The Corporation held no foreclosed residential real estate property at June 30, 2019 and December 31, 2018.
 
 
 
 
Lease Financings

In February 2016, the FASB issued ASU No. 2016-02, "Leases (Topic 842)", and subsequent related updates, to revise the accounting for leases. The Corporation adopted this guidance effective January 1, 2019 on a modified retrospective basis at January 1, 2019. Additionally, the Corporation early adopted (ASU) No. 2019-01, "Codification Improvements", as of January 1, 2019, which serves as an update to (ASU) No. 2016-02, and is effective for the first interim period within annual periods beginning after December 15, 2019, or January 1, 2020, for the Corporation. See Note 1, "Summary of Significant Accounting Policies - Accounting Pronouncements Adopted in 2019" for additional information. Lessor accounting was largely unchanged as a result of the standard. Additional disclosures required under the standard are included in the following section.
The Corporation, through Univest Capital, Inc., an equipment financing business and a subsidiary of the Bank, provides lease financing to customers primarily in the form of sales-type leases with fixed payment terms and $1.00 dollar buyout clauses. A minor number of contracts are classified as either direct financing leases or operating leases. The fair value of the identified assets within sales-type and direct financing leases are equal to the carrying amount such that there is no profit or loss recorded or deferred upon lease commencement. All receivables related to the equipment financing business are recorded within lease financings as of June 30, 2019.
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 by primarily 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 for the majority of its lease portfolio.
Lease financings are stated at net investment amount, consisting of the present value of lease payments and unguaranteed residual value, plus initial direct costs. Initial direct costs, comprised of commissions paid that would not have been incurred if the lease had not been obtained, are deferred and amortized over the life of the contract, and are presented within net interest income on leases.
The following presents the schedule of minimum lease payments receivable:
(Dollars in thousands)
At June 30, 2019
 
At December 31, 2018
2019 (excluding the six months ended June 30, 2019)
$
29,479

 
$
55,201

2020
49,897

 
43,355

2021
36,433

 
29,678

2022
23,877

 
17,687

2023
11,722

 
6,674

Thereafter
3,478

 
1,975

Total future minimum lease payments receivable
154,886

 
154,570

Plus: Unguaranteed residual
823

 
600

Plus: Initial direct costs
1,993

 
1,904

Less: Imputed interest
(15,415
)
 
(15,118
)
Lease financings
$
142,287

 
$
141,956


Included within the "2019 (excluding the six months ended June 30, 2019)" line item above as of June 30, 2019 and December 31, 2018 are $20 thousand and $0 thousand, respectively, of receivables related to an operating lease contract.
For the six months ended June 30, 2019 and 2018, the Corporation recognized $4.0 million and $3.7 million, respectively, of interest income on lease financings within total interest and fees on loans and leases on the condensed consolidated statements of income. The Corporation did not record any profit or loss upon the commencement date of its leases or any lease income related to variable lease payments.