NOTE 5. LOANS AND THE ALLOWANCE FOR CREDIT LOSSES

The recorded investment in loans is presented in the Consolidated Balance Sheets net of deferred loan fees and costs and discounts on purchased loans. The deferred loan fees and costs were $0.3 million and $1.0 million at December 31, 2016 and 2015, respectively. The discounts on purchased loans from acquisitions were $24.1 million, including $11.0 million related to YCB, and $15.7 million at December 31, 2016 and 2015, respectively.


	December 31,		December 31,
*(in thousands)*	2016		2015
Commercial real estate:
Land and construction	$	496,539	$	344,748
Improved property		2,376,972		1,911,633

Total commercial real estate		2,873,511		2,256,381

Commercial and industrial		1,088,118		737,878
Residential real estate		1,383,390		1,247,800
Home equity		508,359		416,889
Consumer		396,058		406,894

Total portfolio loans		6,249,436		5,065,842

Loans held for sale		17,315		7,899

Total loans	$	6,266,751	$	5,073,741

The following tables summarize changes in the allowance for credit losses applicable to each category of the loan portfolio:

For the Year Ended December 31, 2016

(in thousands)

Commercial
Real Estate-
Land and
Construction

Commercial
Real Estate-
Improved
Property

Commercial
& Industrial

Residential
Real
Estate

Home
Equity

Consumer

Deposit
Overdraft

Total

Balance at beginning of year:

Allowance for loan losses

4,390

14,748

10,002

4,582

2,883

4,763

342

41,710

Allowance for loan commitments

157

260

117

—

613

Total beginning allowance for credit losses

4,547

14,774

10,262

4,589

3,000

4,809

342

42,323

Provision for credit losses:

Provision for loan losses

4,223

1,160

662

1,356

1,077

8,520

Provision for loan commitments

)

(72

)

—

(42

)

Total provision for credit losses

4,214

1,088

707

1,354

1,077

8,478

Charge-offs

(73

)

(1,886

)

(3,070

)

(937

)

(397

)

(3,606

)

(884

)

(10,853

)

Recoveries

1,543

320

445

274

1,485

225

4,297

Net charge-offs

(68

)

(343

)

(2,750

)

(492

)

(123

)

(2,121

)

(659

)

(6,556

)

Balance at end of period:

Allowance for loan losses

4,348

18,628

8,412

4,106

3,422

3,998

760

43,674

Allowance for loan commitments

151

188

162

—

571

Total ending allowance for credit losses

4,499

18,645

8,600

4,115

3,584

4,042

760

44,245


	For the Year Ended December 31, 2015
*(in thousands)*	Commercial Real Estate- Land and Construction			Commercial Real Estate- Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit Overdraft			Total
Balance at beginning of year:
Allowance for loan losses	$	5,654		$	17,573		$	9,063		$	5,382		$	2,329		$	4,078		$	575		$	44,654
Allowance for loan commitments		194			10			112			9			90			40			—			455

Total beginning allowance for credit losses		5,848			17,583			9,175			5,391			2,419			4,118			575			45,109

Provision for credit losses:
Provision for loan losses		(1,265	)		1,250			3,289			399			1,794			2,337			391			8,195
Provision for loan commitments		(37	)		16			148			(2	)		27			6			—			158

Total provision for credit losses		(1,302	)		1,266			3,437			397			1,821			2,343			391			8,353

Charge-offs		—			(4,915	)		(2,785	)		(1,803	)		(1,502	)		(2,892	)		(846	)		(14,743	)
Recoveries		1			840			435			604			262			1,240			222			3,604

Net charge-offs		1			(4,075	)		(2,350	)		(1,199	)		(1,240	)		(1,652	)		(624	)		(11,139	)

Balance at end of period:
Allowance for loan losses		4,390			14,748			10,002			4,582			2,883			4,763			342			41,710
Allowance for loan commitments		157			26			260			7			117			46			—			613

Total ending allowance for credit losses	$	4,547		$	14,774		$	10,262		$	4,589		$	3,000		$	4,809		$	342		$	42,323


	For the Year Ended December 31, 2014
*(in thousands)*	Commercial Real Estate- Land and Construction			Commercial Real Estate- Improved Property			Commercial & Industrial			Residential Real Estate			Home Equity			Consumer			Deposit Overdraft			Total
Balance at beginning of year:
Allowance for loan losses	$	6,056		$	18,157		$	9,925		$	5,673		$	2,017		$	5,020		$	520		$	47,368
Allowance for loan commitments		301			62			130			5			85			19			—			602

Total beginning allowance for credit losses		6,357			18,219			10,055			5,678			2,102			5,039			520			47,970

Provision for credit losses:
Provision for loan losses		(402	)		1,239			1,429			1,692			849			1,144			601			6,552
Provision for loan commitments		(107	)		(52	)		(18	)		4			5			21			—			(147	)

Total provision for credit losses		(509	)		1,187			1,411			1,696			854			1,165			601			6,405

Charge-offs		—			(2,426	)		(3,485	)		(2,437	)		(652	)		(3,120	)		(779	)		(12,899	)
Recoveries		—			603			1,194			454			115			1,034			233			3,633

Net charge-offs		—			(1,823	)		(2,291	)		(1,983	)		(537	)		(2,086	)		(546	)		(9,266	)

Balance at end of period:
Allowance for loan losses		5,654			17,573			9,063			5,382			2,329			4,078			575			44,654
Allowance for loan commitments		194			10			112			9			90			40			—			455

Total ending allowance for credit losses	$	5,848		$	17,583		$	9,175		$	5,391		$	2,419		$	4,118		$	575		$	45,109

The following tables present the allowance for credit losses and recorded investments in loans by category:


	Allowance for Credit Losses and Recorded Investment in Loans
*(in thousands)*	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial and Industrial		Residential Real Estate		Home Equity		Consumer		Deposit Over- draft		Total
December 31, 2016
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	470	$	407	$	—	$	—	$	—	$	—	$	877
Allowance for loans collectively evaluated for impairment		4,348		18,158		8,005		4,106		3,422		3,998		760		42,797
Allowance for loan commitments		151		17		188		9		162		44		—		571

Total allowance for credit losses	$	4,499	$	18,645	$	8,600	$	4,115	$	3,584	$	4,042	$	760	$	44,245

Portfolio loans:
Individually evaluated for impairment⁽¹⁾	$	—	$	3,012	$	1,270	$	—	$	—	$	—	$	—	$	4,282
Collectively evaluated for impairment		494,928		2,364,067		1,086,445		1,382,447		508,359		396,049		—		6,232,295
Acquired with deteriorated credit quality		1,611		9,893		403		943		—		9		—		12,859

Total portfolio loans	$	496,539	$	2,376,972	$	1,088,118	$	1,383,390	$	508,359	$	396,058	$	—	$	6,249,436

December 31, 2015
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	668	$	853	$	—	$	—	$	—	$	—	$	1,521
Allowance for loans collectively evaluated for impairment		4,390		14,080		9,149		4,582		2,883		4,763		342		40,189
Allowance for loan commitments		157		26		260		7		117		46		—		613

Total allowance for credit losses	$	4,547	$	14,774	$	10,262	$	4,589	$	3,000	$	4,809	$	342	$	42,323

Portfolio loans:
Individually evaluated for impairment⁽¹⁾	$	—	$	4,031	$	4,872	$	—	$	—	$	—	$	—	$	8,903
Collectively evaluated for impairment		343,832		1,899,738		732,957		1,247,639		416,862		406,622		—		5,047,650
Acquired with deteriorated credit quality		916		7,864		49		161		27		272		—		9,289

Total portfolio loans	$	344,748	$	1,911,633	$	737,878	$	1,247,800	$	416,889	$	406,894	$	—	$	5,065,842

(1)	Commercial loans greater than $1 million that are reported as non-accrual or as a TDR are individually evaluated for impairment.

WesBanco maintains an internal loan grading system to reflect the credit quality of commercial loans. Commercial loan risk grades are determined based on an evaluation of the relevant characteristics of each loan, assigned at the inception of each loan and adjusted thereafter at any time to reflect changes in the risk profile throughout the life of each loan. The primary factors used to determine the risk grade are the reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. This includes an analysis of cash flow available to repay debt, profitability, liquidity, leverage, and overall financial trends. Other factors include management, industry or property type risks, an assessment of secondary sources of repayment such as collateral or guarantees, other terms and conditions of the loan that may increase or reduce its risk, and economic conditions and other external factors that may influence repayment capacity and financial condition.

Commercial real estate—land and construction consists of loans to finance investments in vacant land, land development, construction of residential housing, and construction of commercial buildings. Commercial real estate—improved property consists of loans for the purchase or refinance of all types of improved owner-occupied and investment properties. Factors that are considered in assigning the risk grade vary depending on the type of property financed. The risk grade assigned to construction and development loans is based on the overall viability of the project, the experience and financial capacity of the developer or builder to successfully complete the project, project specific and market absorption rates and comparable property values, and the amount of pre-sales for residential housing construction or pre-leases for commercial investment property. The risk grade assigned to commercial investment property loans is based primarily on the adequacy of net rental income generated by the property to service the debt, the type, quality, industry and mix of tenants, and the terms of leases, but also considers the overall financial capacity of the investors and their experience in owning and managing investment property. The risk grade assigned to owner-occupied commercial real estate and commercial and industrial loans is based primarily on historical and projected earnings, the adequacy of operating cash flow to service all of the business’ debt, and the capital resources, liquidity and leverage of the business, but also considers the industry in which the business operates, the business’ specific competitive advantages or disadvantages, the quality and experience of management, and external influences on the business such as economic conditions. Other factors that are considered for commercial and industrial loans include the type, quality and marketability of non-real estate collateral and whether the structure of the loan increases or reduces its risk. The type, age, condition, location and any environmental risks associated with a property are also considered for all types of commercial real estate. The overall financial condition and repayment capacity of any guarantors is also evaluated to determine the extent to which they mitigate other risks of the loan. The following paragraphs provide descriptions of risk grades that are applicable to commercial real estate and commercial and industrial loans.

Pass loans are those that exhibit a history of positive financial results that are at least comparable to the average for their industry or type of real estate. The primary source of repayment is acceptable and these loans are expected to perform satisfactorily during most economic cycles. Pass loans typically have no significant external factors that are expected to adversely affect these borrowers more than others in the same industry or property type. Any minor unfavorable characteristics of these loans are outweighed or mitigated by other positive factors including but not limited to adequate secondary or tertiary sources of repayment.

Criticized or compromised loans are currently protected but have weaknesses, which, if not corrected, may be inadequately protected at some future date. These loans represent an unwarranted credit risk and would generally not be extended in the normal course of lending. Specific issues which may warrant this grade include declining financial results, increased reliance on secondary sources of repayment or guarantor support and adverse external influences that may negatively impact the business or property.

Substandard and doubtful loans are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current repayment capacity and equity of the borrower or collateral pledged, if any. Substandard loans have one or more well-defined weaknesses that jeopardize their repayment or collection in full. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent to a substandard loan with the added characteristic that full repayment is highly questionable or improbable on the basis of currently existing facts, conditions and collateral values. However, recognition of loss may be deferred if there are reasonably specific pending factors that will reduce the risk if they occur.

The following tables summarize commercial loans by their assigned risk grade:


	Commercial Loans by Internally Assigned Risk Grade
*(in thousands)*	Commercial Real Estate- Land and Construction		Commercial Real Estate- Improved Property		Commercial & Industrial		Total Commercial Loans
As of December 31, 2016
Pass	$	489,380	$	2,324,755	$	1,072,751	$	3,886,886
Criticized—compromised		4,405		15,295		5,078		24,778
Classified—substandard		2,754		36,922		10,289		49,965
Classified—doubtful		—		—		—		—

Total	$	496,539	$	2,376,972	$	1,088,118	$	3,961,629

As of December 31, 2015
Pass	$	335,989	$	1,864,986	$	713,578	$	2,914,553
Criticized—compromised		5,527		10,911		9,860		26,298
Classified—substandard		3,232		35,736		14,440		53,408
Classified—doubtful		—		—		—		—

Total	$	344,748	$	1,911,633	$	737,878	$	2,994,259

Residential real estate, home equity and consumer loans are not assigned internal risk grades other than as required by regulatory guidelines that are based primarily on the age of past due loans. WesBanco primarily evaluates the credit quality of residential real estate, home equity and consumer loans based on repayment performance and historical loss rates. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard in accordance with regulatory guidelines were $20.6 million at December 31, 2016 and $15.8 million at December 31, 2015, of which $3.4 and $3.1 million were accruing, for each period, respectively. The aggregate amount of residential real estate, home equity and consumer loans classified as substandard are not included in the tables above.

Acquired YCB Loans—In conjunction with the YCB acquisition, WesBanco acquired loans with a book value of $1,027.2 million. These loans were recorded at their fair value of $1,014.0 million, with $1,006.9 million categorized as ASC 310-20 loans. The fair market value adjustment on these loans of $9.2 million at acquisition date is expected to be recognized into interest income on a level yield basis over the remaining expected life of the loans.

Loans acquired with deteriorated credit quality with a book value of $11.1 million and contractually required payments of $13.3 million were recorded at their estimated fair value of $7.1 million, of which $2.7 million were accounted for under the cost recovery method in accordance with ASC 310-30 as cash flows cannot be reasonably estimated, and categorized as non-accrual. The accretable yield on the acquired impaired loans was estimated at $0.8 million, while the non-accretable difference is estimated at $5.3 million on the date of acquisition.

At December 31, 2016, the carrying amount of loans acquired with deteriorated credit quality was $5.7 million, while the outstanding customer balance was $9.2 million. At December 31, 2016, no allowance for loan losses has been recognized related to the acquired impaired loans.

Acquired ESB Loans—The carrying amount of loans acquired from ESB with deteriorated credit quality at December 31, 2016 and 2015 were $7.2 million and $9.3 million, respectively. At December 31, 2016, the accretable yield was $0.9 million. At December 31, 2016 an allowance for loan loss of $1.8 million was recognized related to the acquired impaired loans, as the estimates for future cash flows on these loans have been negatively impacted. At December 31, 2015, no allowance for loan losses was recognized related to the acquired impaired loans.

The following table provides changes in accretable yield for all loans acquired with deteriorated credit quality:


	For the Years Ended
*(in thousands)*	December 31, 2016			December 31, 2015
Balance at beginning of period	$	1,206		$	—
Acquisitions		837			1,815
Reduction due to change in projected cash flows		(484	)		—
Reclass from non-accretable difference		1,065			—
Transfers out		(328	)		—
Accretion		(579	)		(609	)

Balance at end of period	$	1,717		$	1,206

The following tables summarize the age analysis of all categories of loans.


	Age Analysis of Loans
*(in thousands)*	Current		30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Total Loans		90 Days or More Past Due and Accruing (1)
As of December 31, 2016
Commercial real estate:
Land and construction	$	496,245	$	—	$	—	$	294	$	294	$	496,539	$	—
Improved property		2,367,790		1,154		363		7,665		9,182		2,376,972		318

Total commercial real estate		2,864,035		1,154		363		7,959		9,476		2,873,511		318
Commercial and industrial		1,082,390		2,508		1,011		2,209		5,728		1,088,118		229
Residential real estate		1,365,956		6,701		1,043		9,690		17,434		1,383,390		1,922
Home equity		502,087		2,358		862		3,052		6,272		508,359		626
Consumer		390,354		3,674		1,149		881		5,704		396,058		644

Total portfolio loans		6,204,822		16,395		4,428		23,791		44,614		6,249,436		3,739
Loans held for sale		17,315		—		—		—		—		17,315		—

Total loans	$	6,222,137	$	16,395	$	4,428	$	23,791	$	44,614	$	6,266,751	$	3,739

Impaired loans included above are as follows:
Non-accrual loans	$	7,570	$	3,479	$	923	$	19,812		24,214	$	31,784
TDRs accruing interest (1)		7,014		342		50		240		632		7,646

Total impaired	$	14,584	$	3,821	$	973	$	20,052	$	24,846	$	39,430


As of December 31, 2015
Commercial real estate:
Land and construction	$	344,184	$	—	$	—	$	564	$	564	$	344,748	$	—
Improved property		1,901,466		909		1,097		8,161		10,167		1,911,633		—

Total commercial real estate		2,245,650		909		1,097		8,725		10,731		2,256,381		—
Commercial and industrial		734,660		298		714		2,206		3,218		737,878		33
Residential real estate		1,234,839		1,389		2,871		8,701		12,961		1,247,800		2,159
Home equity		412,450		2,252		314		1,873		4,439		416,889		407
Consumer		401,242		4,115		764		773		5,652		406,894		527

Total portfolio loans		5,028,841		8,963		5,760		22,278		37,001		5,065,842		3,126
Loans held for sale		7,899		—		—		—		—		7,899		—

Total loans	$	5,036,740	$	8,963	$	5,760	$	22,278	$	37,001	$	5,073,741	$	3,126

Impaired loans included above are as follows:
Non-accrual loans	$	11,349	$	943	$	2,147	$	18,942	$	22,032	$	33,381
TDRs accruing interest (1)		10,710		390		238		210		838		11,548

Total impaired	$	22,059	$	1,333	$	2,385	$	19,152	$	22,870	$	44,929

(1)	Loans 90 days or more past due and accruing interest exclude TDRs 90 days or more past due and accruing interest.

The following tables summarize impaired loans:


	Impaired Loans
	December 31, 2016						December 31, 2015
*(in thousands)*	Unpaid Principal Balance (1)		Recorded Investment		Related Allowance		Unpaid Principal Balance (1)		Recorded Investment		Related Allowance
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	1,212	$	766	$	—	$	2,126	$	1,990	$	—
Improved property		9,826		8,141		—		14,817		10,559		—
Commercial and industrial		4,456		3,181		—		4,263		3,481		—
Residential real estate		20,152		18,305		—		18,560		16,688		—
Home equity		4,589		4,011		—		3,562		3,033		—
Consumer		884		744		—		1,603		1,294		—

Total impaired loans without a specific allowance		41,119		35,148		—		44,931		37,045		—

With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—
Improved property		3,012		3,012		470		3,012		3,012		668
Commercial and industrial		4,875		1,270		407		6,176		4,872		853

Total impaired loans with a specific allowance		7,887		4,282		877		9,188		7,884		1,521

Total impaired loans	$	49,006	$	39,430	$	877	$	54,119	$	44,929	$	1,521

(1)	The difference between the unpaid principal balance and the recorded investment generally reflects amounts that have been previously charged-off and fair market value adjustments on acquired impaired loans.


	Impaired Loans
	For the Year Ended December 31, 2016				For the Year Ended December 31, 2015				For the Year Ended December 31, 2014
*(in thousands)*	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related specific allowance recorded:
Commercial real estate:
Land and construction	$	993	$	—	$	2,156	$	41	$	1,977	$	35
Improved property		9,128		115		17,192		437		17,669		441
Commercial and industrial		3,188		9		2,979		170		3,561		103
Residential real estate		17,021		308		17,876		862		18,829		855
Home equity		3,502		20		2,924		90		2,356		75
Consumer		909		8		1,199		105		1,122		97

Total impaired loans without a specific allowance		34,741		460		44,326		1,705		45,514		1,606

With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—
Improved property		3,012		—		5,896		—		2,795		348
Commercial and industrial		3,214		—		3,579		292		2,075		95

Total impaired loans with a specific allowance		6,226		—		9,475		292		4,870		443

Total impaired loans	$	40,967	$	460	$	53,801	$	1,997	$	50,384	$	2,049

The following tables present the recorded investment in non-accrual loans and TDRs:


	Non-accrual Loans (1)
*(in thousands)*	December 31, 2016		December 31, 2015
Commercial real estate:
Land and construction	$	766	$	1,023
Improved property		9,535		11,507

Total commercial real estate		10,301		12,530

Commercial and industrial		4,299		8,148
Residential real estate		12,994		9,461
Home equity		3,538		2,391
Consumer		652		851

Total	$	31,784	$	33,381

(1)	At December 31, 2016, there were two borrowers with loans greater than $1.0 million totaling $4.3 million. Total non-accrual loans include loans that are also restructured. Such loans are also set forth in the following table as non-accrual TDRs.


	TDRs
	December 31, 2016						December 31, 2015
*(in thousands)*	Accruing		Non-Accrual		Total		Accruing		Non-Accrual		Total
Commercial real estate:
Land and construction	$	—	$	8	$	8	$	967	$	431	$	1,398
Improved property		1,618		688		2,306		2,064		1,442		3,506

Total commercial real estate		1,618		696		2,314		3,031		1,873		4,904

Commercial and industrial		152		151		303		205		282		487
Residential real estate		5,311		2,212		7,523		7,227		2,060		9,287
Home equity		473		297		770		642		218		860
Consumer		92		190		282		443		184		627

Total	$	7,646	$	3,546	$	11,192	$	11,548	$	4,617	$	16,165

As of December 31, 2016, there were no TDRs greater than $1.0 million. The concessions granted in the majority of loans reported as accruing and non-accrual TDRs are extensions of the maturity date or the amortization period, reductions in the interest rate below the prevailing market rate for loans with comparable characteristics, and/or permitting interest-only payments for longer than three months. WesBanco had no unfunded commitments to debtors whose loans were classified as impaired as of December 31, 2016 and $0.2 million as of December 31, 2015.

The following table presents details related to loans identified as TDRs during the years ended December 31, 2016 and 2015:


	New TDRs (1) For the Year Ended December 31, 2016						New TDRs (1) For the Year Ended December 31, 2015
*(dollars in thousands)*	Number of Modifications		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Number of Modifications		Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment
Commercial real estate:
Land and construction		—	$	—	$	—		3	$	128	$	115
Improved property		—		—		—		5		1,084		603

Total commercial real estate		—		—		—		8		1,212		718

Commercial and industrial		2		125		120		1		57		43
Residential real estate		4		178		166		7		456		426
Home equity		1		44		40		1		7		6
Consumer		14		98		74		7		69		58

Total		21	$	445	$	400		24	$	1,801	$	1,251

(1)	Excludes loans that were either paid off or charged-off by period end. The pre-modification balance represents the balance outstanding at the beginning of the period. The post-modification balance represents the outstanding balance at period end.

The following table summarizes TDRs which defaulted (defined as past due 90 days) during the years ended December 31, 2016 and 2015 that were restructured within the last twelve months prior to December 31, 2016 and 2015:


	Defaulted TDRs (1) For the Year Ended December 31, 2016				Defaulted TDRs (1) For the Year Ended December 31, 2015
*(dollars in thousands)*	Number of Defaults		Recorded Investment		Number of Defaults		Recorded Investment
Commercial real estate:
Land and construction		—	$	—		—	$	—
Improved property		—		—		2		370

Total commercial real estate		—		—		2		370

Commercial and industrial		—		—		—		—
Residential real estate		—		—		1		22
Home equity		—		—		—		—
Consumer		1		16		—		—

Total		1	$	16		3	$	392

(1)	Excludes loans that were either charged-off or cured by period end. The recorded investment is as of December 31, 2016 and 2015.

TDRs that defaulted during the twelve month period that were restructured during the twelve months ended December 31, 2016 represented 0.1% of the total TDR balance at December 31, 2016. These loans are placed on non-accrual status unless they are both well-secured and in the process of collection. At December 31, 2016, the loan in the table above was not accruing interest.

The following table summarizes the recognition of interest income on impaired loans:


	For the years ended December 31,
*(in thousands)*	2016		2015		2014
Average impaired loans	$	40,967	$	53,801	$	50,384
Amount of contractual interest income on impaired loans		2,747		3,061		3,260
Amount of interest income recognized on impaired loans		460		1,997		2,049

The following table summarizes other real estate owned and repossessed assets included in other assets:


	December 31,
*(in thousands)*	2016		2015
Other real estate owned	$	8,206	$	5,669
Repossessed assets		140		156

Total other real estate owned and repossessed assets	$	8,346	$	5,825

At December 31, 2016, other real estate owned included $3.1 million from the YCB acquisition. Residential real estate included in other real estate owned at December 31, 2016 and December 31, 2015 was $1.6 million and $2.0 million, respectively. At December 31, 2016, formal foreclosure proceedings were in process on residential real estate loans totaling $4.1 million.