The recorded investment in loans is presented in the Consolidated Balance Sheets net of deferred loan fees and costs, and discounts on purchased loans. Net deferred loan costs were $4.8 million and $3.2 million at December 31, 2019 and 2018, respectively. The unaccreted discount on purchased loans from acquisitions was $51.9 million at December 31, 2019, including $4.6 million related to FTSB, $15.3 million related to FFKT and $24.0 million related to OLBK. The unaccreted discount was $49.3 million at December 31, 2018.

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, 2019
(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	$	4,039		$	20,848		$	12,114		$	3,822		$	4,356		$	2,797		$	972		$	48,948
Allowance for loan commitments		169			33			262			12			226			39			—			741
Total beginning allowance for credit losses		4,208			20,881			12,376			3,834			4,582			2,836			972			49,689
Provision for credit losses:
Provision for loan losses		746			2,560			2,714			1,400			851			1,130			1,664			11,065
Provision for loan commitments		66			(11	)		49			3			24			2			—			133
Total provision for credit losses		812			2,549			2,763			1,403			875			1,132			1,664			11,198
Charge-offs		(107	)		(3,867	)		(1,816	)		(1,276	)		(1,213	)		(2,719	)		(1,659	)		(12,657	)
Recoveries		271			752			1,104			365			428			1,743			410			5,073
Net recoveries (charge-offs)		164			(3,115	)		(712	)		(911	)		(785	)		(976	)		(1,249	)		(7,584	)
Balance at end of period:
Allowance for loan losses		4,949			20,293			14,116			4,311			4,422			2,951			1,387			52,429
Allowance for loan commitments		235			22			311			15			250			41			—			874
Total ending allowance for credit losses	$	5,184		$	20,315		$	14,427		$	4,326		$	4,672		$	2,992		$	1,387		$	53,303

	For the Year Ended December 31, 2018
(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	$	3,117		$	21,166		$	9,414		$	3,206		$	4,497		$	3,063		$	821		$	45,284
Allowance for loan commitments		119			26			173			7			212			37			—			574
Total beginning allowance for credit losses		3,236			21,192			9,587			3,213			4,709			3,100			821			45,858
Provision for credit losses:
Provision for loan losses		650			(521	)		3,430			1,612			138			1,142			1,146			7,597
Provision for loan commitments		50			7			89			5			14			2			—			167
Total provision for credit losses		700			(514	)		3,519			1,617			152			1,144			1,146			7,764
Charge-offs		(137	)		(1,090	)		(1,830	)		(1,435	)		(1,193	)		(3,508	)		(1,374	)		(10,567	)
Recoveries		409			1,293			1,100			439			914			2,100			379			6,634
Net recoveries (charge-offs)		272			203			(730	)		(996	)		(279	)		(1,408	)		(995	)		(3,933	)
Balance at end of period:
Allowance for loan losses		4,039			20,848			12,114			3,822			4,356			2,797			972			48,948
Allowance for loan commitments		169			33			262			12			226			39			—			741
Total ending allowance for credit losses	$	4,208		$	20,881		$	12,376		$	3,834		$	4,582		$	2,836		$	972		$	49,689

	For the Year Ended December 31, 2017
(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	$	4,348		$	18,628		$	8,412		$	4,106		$	3,422		$	3,998		$	760		$	43,674
Allowance for loan commitments		151			17			188			9			162			44			—			571
Total beginning allowance for credit losses		4,499			18,645			8,600			4,115			3,584			4,042			760			44,245
Provision for credit losses:
Provision for loan losses		(1,259	)		4,386			2,733			(175	)		2,066			1,231			1,001			9,983
Provision for loan commitments		(32	)		9			(15	)		(2	)		50			(7	)		—			3
Total provision for credit losses		(1,291	)		4,395			2,718			(177	)		2,116			1,224			1,001			9,986
Charge-offs		(72	)		(2,381	)		(2,669	)		(1,064	)		(1,221	)		(3,989	)		(1,293	)		(12,689	)
Recoveries		100			533			938			339			230			1,823			353			4,316
Net recoveries (charge-offs)		28			(1,848	)		(1,731	)		(725	)		(991	)		(2,166	)		(940	)		(8,373	)
Balance at end of period:
Allowance for loan losses		3,117			21,166			9,414			3,206			4,497			3,063			821			45,284
Allowance for loan commitments		119			26			173			7			212			37			—			574
Total ending allowance for credit losses	$	3,236		$	21,192		$	9,587		$	3,213		$	4,709		$	3,100		$	821		$	45,858

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 Overdraft		Total
December 31, 2019
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	93	$	10	$	14	$	6	$	1	$	—	$	124
Allowance for loans collectively evaluated for impairment		4,949		20,200		14,106		4,297		4,416		2,950		1,387		52,305
Allowance for loan commitments		235		22		311		15		250		41		—		874
Total allowance for credit losses	$	5,184	$	20,315	$	14,427	$	4,326	$	4,672	$	2,992	$	1,387	$	53,303
Portfolio loans:
Individually evaluated for impairment (1)	$	—	$	3,907	$	11,961	$	4,392	$	704	$	53	$	—	$	21,017
Collectively evaluated for impairment		777,033		4,935,383		1,631,855		1,865,151		648,221		374,812		—		10,232,455
Acquired with deteriorated credit quality		118		8,567		883		4,104		753		88		—		14,513
Total portfolio loans	$	777,151	$	4,947,857	$	1,644,699	$	1,873,647	$	649,678	$	374,953	$	—	$	10,267,985
December 31, 2018
Allowance for credit losses:
Allowance for loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Allowance for loans collectively evaluated for impairment		4,039		20,848		12,114		3,822		4,356		2,797		972		48,948
Allowance for loan commitments		169		33		262		12		226		39		-		741
Total allowance for credit losses	$	4,208	$	20,881	$	12,376	$	3,834	$	4,582	$	2,836	$	972	$	49,689
Portfolio loans:
Individually evaluated for impairment (1)	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		527,737		3,319,672		1,264,560		1,609,177		599,331		326,063		—		7,646,540
Acquired with deteriorated credit quality		335		5,951		900		2,430		-		125		—		9,741
Total portfolio loans	$	528,072	$	3,325,623	$	1,265,460	$	1,611,607	$	599,331	$	326,188	$	—	$	7,656,281

Wesbanco is transitioning to a more objective 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 inception 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 sufficiency, reliability and sustainability of the primary source of repayment and overall financial strength of the borrower. The rating system more heavily weights the debt service coverage, leverage and loan to value factors to derive the risk grade. Other factors that are considered at a lesser weighting include management, industry or property type risks, payment history, collateral or guarantees.

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 the net operating income generated by the property to service the debt, the loan to appraised value, the type, quality, industry and mix of tenants, and the terms of leases. The risk grade assigned to owner-occupied commercial real estate is based primarily on global debt service coverage and the leverage of the business, but may also consider the industry in which the business operates, the business’ specific competitive advantages or disadvantages, collateral margins and the quality and experience of management.

Commercial and industrial (“C&I”) loans consist of revolving lines of credit to finance accounts receivable, inventory and other general business purposes; term loans to finance fixed assets other than real estate, and letters of credit to support trade, insurance or governmental requirements for a variety of businesses. Most C&I borrowers are privately-held companies with annual sales up to $100 million. Primary factors that are considered in risk rating C&I loans include debt service coverage and leverage. Other factors including operating trends, collateral coverage along with management experience are also considered.

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 assets have potential weaknesses that deserve management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the bank's credit position at some future date. Criticized assets are not adversely classified and do not expose the bank to sufficient risk to warrant adverse classification.

Substandard and doubtful loans are equivalent to the classifications used by banking regulators. Substandard loans are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the bank will sustain some loss if the deficiencies are not corrected. These loans may or may not be reported as non-accrual. Doubtful loans have all the weaknesses inherent in those classified Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. These loans are reported as non-accrual.

	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, 2019
Pass	$	769,537	$	4,807,003	$	1,570,689	$	7,147,229
Criticized—compromised		4,338		65,612		49,009		118,959
Classified—substandard		3,276		75,242		13,231		91,749
Classified—doubtful		—		—		11,770		11,770
Total	$	777,151	$	4,947,857	$	1,644,699	$	7,369,707
As of December 31, 2018
Pass	$	523,707	$	3,267,304	$	1,245,190	$	5,036,201
Criticized—compromised		2,297		35,566		13,847		51,710
Classified—substandard		2,068		22,753		6,423		31,244
Classified—doubtful		-		-		-		-
Total	$	528,072	$	3,325,623	$	1,265,460	$	5,119,155

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 $28.3 million at December 31, 2019 and $22.9 million at December 31, 2018, of which $5.1 and $3.9 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 OLBK Loans —In conjunction with the OLBK acquisition, Wesbanco acquired loans with a book value of $2,570.0 million as of November 22, 2019. These loans were recorded at the preliminary fair value of $2,545.6 million, with $2,535.2 million categorized as ASC 310-20 loans. The fair market value adjustment on these loans of $24.1 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 $10.7 million were recorded at the preliminary fair value of $10.4 million, of which $4.0 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 carrying amount of loans acquired with deteriorated credit quality at December 31, 2019 was $10.1 million, while the outstanding customer balance was $10.5 million. At December 31, 2019, no allowance for loan losses has been recognized related to the OLBK-acquired impaired loans.

Acquired FFKT Loans —In conjunction with the FFKT acquisition, Wesbanco acquired loans with a book value of $1,064.8 million as of August 20, 2018. These loans were recorded at the preliminary fair value of $1,025.8 million, with $988.3 million categorized as ASC 310-20 loans. The fair market value adjustment on these loans of $26.0 million at the 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 $5.3 million were recorded at the preliminary fair value of $4.6 million, of which $2.4 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 carrying amount of loans acquired with deteriorated credit quality at December 31, 2019 was $2.8 million, while the outstanding customer balance was $3.3 million. At December 31, 2019, no allowance for loan losses has been recognized related to the FFKT-acquired impaired loans. Certain acquired underperforming loans with an acquired book value of $45.2 million were sold during the fourth quarter of 2018 for $32.9 million. The acquisition date fair value of the acquired loans was adjusted to the sale price resulting in no recognized gain or loss.

Acquired FTSB Loans – In conjunction with the FTSB acquisition, Wesbanco acquired loans with a book value of $465.9 million as of April 5, 2018. These loans were recorded at the fair value of $447.3 million, with $429.3 million categorized as ASC 310-20 loans. The fair market value adjustment on these loans of $9.7 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 $5.1 million were recorded at the preliminary fair value of $2.3 million, of which $0.7 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 carrying amount of loans acquired with deteriorated credit quality at December 31, 2019 was $0.5 million, while the outstanding customer balance was $1.2 million. At December 31, 2019, no allowance for loan losses has been recognized related to the FTSB-acquired impaired loans. Certain acquired underperforming loans with an acquired book value of $21.7 million were sold during the second and fourth quarters of 2018 for $15.7 million. The acquisition date fair value of the acquired loans was adjusted to the sale price resulting in no recognized gain or loss.

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

	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, 2019
Commercial real estate:
Land and construction	$	776,153	$	529	$	121	$	348	$	998	$	777,151	$	26
Improved property		4,921,721		10,207		5,639		10,290		26,136		4,947,857		4,709
Total commercial real estate		5,697,874		10,736		5,760		10,638		27,134		5,725,008		4,735
Commercial and industrial		1,635,232		2,519		2,813		4,135		9,467		1,644,699		1,793
Residential real estate		1,850,806		4,421		5,372		13,048		22,841		1,873,647		3,643
Home equity		641,026		3,323		621		4,708		8,652		649,678		985
Consumer		370,934		2,537		965		517		4,019		374,953		457
Total portfolio loans		10,195,872		23,536		15,531		33,046		72,113		10,267,985		11,613
Loans held for sale		43,013		—		—		—		—		43,013		—
Total loans	$	10,238,885	$	23,536	$	15,531	$	33,046	$	72,113	$	10,310,998	$	11,613
Impaired loans included above are as follows:
Non-accrual loans	$	21,061	$	897	$	1,559	$	21,396		23,852	$	44,913
TDRs accruing interest (1)		5,113		151		130		37		318		5,431
Total impaired	$	26,174	$	1,048	$	1,689	$	21,433	$	24,170	$	50,344
As of December 31, 2018
Commercial real estate:
Land and construction	$	526,660	$	62	$	1,350	$	—	$	1,412	$	528,072	$	—
Improved property		3,314,765		2,266		2,250		6,342		10,858		3,325,623		175
Total commercial real estate		3,841,425		2,328		3,600		6,342		12,270		3,853,695		175
Commercial and industrial		1,261,536		323		594		3,007		3,924		1,265,460		13
Residential real estate		1,593,519		2,717		5,001		10,370		18,088		1,611,607		2,820
Home equity		591,623		2,500		1,273		3,935		7,708		599,331		705
Consumer		322,584		2,084		1,007		513		3,604		326,188		364
Total portfolio loans		7,610,687		9,952		11,475		24,167		45,594		7,656,281		4,077
Loans held for sale		8,994		—		—		—		—		8,994		—
Total loans	$	7,619,681	$	9,952	$	11,475	$	24,167	$	45,594	$	7,665,275	$	4,077
Impaired loans included above are as follows:
Non-accrual loans	$	8,910	$	337	$	1,370	$	20,083		21,790	$	30,700
TDRs accruing interest (1)		5,586		59		92		7		158		5,744
Total impaired	$	14,496	$	396	$	1,462	$	20,090	$	21,948	$	36,444

	Impaired Loans
	December 31, 2019						December 31, 2018
(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	$	616	$	580	$	—	$	—	$	—	$	—
Improved property		5,097		4,229		—		14,038		9,293		—
Commercial and industrial		15,182		14,313		—		4,610		3,428		—
Residential real estate		17,753		15,952		—		20,270		18,016		—
Home equity		6,523		5,610		—		5,924		5,036		—
Consumer		546		413		—		846		671		—
Total impaired loans without a specific allowance		45,717		41,097		—		45,688		36,444		—
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—
Improved property		4,207		3,907		93		—		—		—
Commercial and industrial		193		191		10		—		—		—
Residential real estate		4,772		4,392		14		—		—		—
Home equity		724		704		6		—		—		—
Consumer		104		53		1		—		—		—
Total impaired loans with a specific allowance		10,000		9,247		124		-		-		-
Total impaired loans	$	55,717	$	50,344	$	124	$	45,688	$	36,444	$	-

	Impaired Loans
	For the Year Ended December 31, 2019				For the Year Ended December 31, 2018				For the Year Ended December 31, 2017
(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	$	343	$	—	$	208	$	—	$	460	$	—
Improved property		7,216		84		10,658		381		10,790		436
Commercial and industrial		5,207		15		3,076		12		3,577		8
Residential real estate		14,192		211		19,026		240		17,991		252
Home equity		4,930		28		5,005		25		4,599		19
Consumer		423		3		808		7		787		7
Total impaired loans without a specific allowance		32,311		341		38,781		665		38,204		722
With a specific allowance recorded:
Commercial real estate:
Land and construction		—		—		—		—		—		—
Improved property		3,317		—		842		—		4,446		—
Commercial and industrial		175		—		—		—		254		—
Residential real estate		3,811		—		—		—		—		—
Home equity		634		—		—		—		—		—
Consumer		58		—		—		—		—		—
Total impaired loans with a specific allowance		7,995		—		842		—		4,700		—
Total impaired loans	$	40,306	$	341	$	39,623	$	665	$	42,904	$	722

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

	TDRs
	December 31, 2019						December 31, 2018
(in thousands)	Accruing		Non-Accrual		Total		Accruing		Non-Accrual		Total
Commercial real estate:
Land and construction	$	—	$	—	$	—	$	—	$	—	$	—
Improved property		1,321		191		1,512		880		1,529		2,409
Total commercial real estate		1,321		191		1,512		880		1,529		2,409
Commercial and industrial		191		—		191		168		169		337
Residential real estate		3,477		909		4,386		4,185		921		5,106
Home equity		411		293		704		426		198		624
Consumer		31		29		60		85		38		123
Total	$	5,431	$	1,422	$	6,853	$	5,744	$	2,855	$	8,599

As of December 31, 2019 and December 31, 2018, 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 unfunded commitments to debtors whose loans were classified as impaired of $3.3 million and $0.1 million as of December 31, 2019 and 2018, respectively.

The following table presents details related to loans identified as TDRs during the years ended December 31, 2019 and 2018:

	New TDRs (1) For the Year Ended December 31,2019						New TDRs (1) For the Year Ended December 31, 2018
(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		—	$	—	$	—		—	$	—	$	—
Improved property		1		610		603		2		837		805
Total commercial real estate		1		610		603		2		837		805
Commercial and industrial		2		57		48		4		240		188
Residential real estate		4		194		177		4		218		190
Home equity		2		187		181		2		91		84
Consumer		2		45		28		5		69		49
Total		11	$	1,093	$	1,037		17	$	1,455	$	1,316

The following table summarizes TDRs which defaulted (defined as past due 90 days) during the years ended December 31, 2019 and 2018 that were restructured within the last twelve months prior to December 31, 2019 and 2018:

TDRs that default are placed on non-accrual status unless they are both well-secured and in the process of collection. The loans in the table above were not accruing interest.

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

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

Residential real estate included in other real estate owned at December 31, 2019 and December 31, 2018 was $0.6 million and $1.3 million, respectively. At December 31, 2019 and 2018, formal foreclosure proceedings were in process on residential real estate loans totaling $8.1 million and $6.0 million, respectively.