CHFC 2017 Annual Report

The following schedule presents additional information regarding impaired loans by classes of loans segregated by those requiring a valuation allowance and those not requiring a valuation allowance at December 31, 2017, 2016 and 2015 and the respective interest income amounts recognized: For the years ended December 31, 2017 2016 2015 (Dollars in thousands) Average annual recorded investment Interest income recognized while on impaired status Average annual recorded investment Interest income recognized while on impaired status Average annual recorded investment Interest income recognized while on impaired status Impaired loans with a valuation allowance: Commercial $ 25,099 $ 939 $ 7,829 $ — $ 9,511 $ — Commercial real estate 19,983 677 5,658 — 2,918 — Real estate construction and land development 175 10 19 — — — Residential mortgage 16,390 538 23,958 1,285 20,661 1,312 Consumer installment 744 4 359 — — — Home equity 4,201 82 1,759 — — — Subtotal 66,592 2,250 39,582 1,285 33,090 1,312 Impaired loans with no related valuation allowance: Commercial 10,196 28 29,559 1,343 27,778 1,005 Commercial real estate 24,658 245 41,646 1,236 50,079 1,547 Real estate construction and land development 78 — 585 22 889 25 Residential mortgage 4,622 38 1,519 — 6,027 — Consumer installment 205 — — — 448 — Home equity 1,392 14 555 — 1,872 — Subtotal 41,151 325 73,864 2,601 87,093 2,577 Total impaired loans: Commercial 35,295 967 37,388 1,343 37,289 1,005 Commercial real estate 44,641 922 47,304 1,236 52,997 1,547 Real estate construction and land development 253 10 604 22 889 25 Residential mortgage 21,012 576 25,477 1,285 26,688 1,312 Consumer installment 949 4 359 — 448 — Home equity 5,593 96 2,314 — 1,872 — Total $ 107,743 $ 2,575 $ 113,446 $ 3,886 $ 120,183 $ 3,889 The difference between an impaired loan's recorded investment and the unpaid principal balance for originated loans represents a partial charge-off resulting from a confirmed loss due to the value of the collateral securing the loan being below the loan balance and management's assessment that full collection of the loan balance is not likely. Impaired loans included $48.8 million and $62.5 million at December 31, 2017 and December 31, 2016, respectively, of accruing TDRs. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2017 122