CHFC 2018 Annual Report

Consumer Loan Portfolio The Corporation evaluates the credit quality of loans in the consumer loan portfolio based on the performing or nonperforming status of the loan. Loans in the consumer loan portfolio that are performing in accordance with original contractual terms and are less than 90 days past due and accruing interest are considered to be in a performing status, while those that are in nonaccrual status, contractually past due 90 days or more as to interest or principal payments are considered to be in a nonperforming status. Loans accounted for under ASC 310-30, "Acquired loans", that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. The following schedule presents the recorded investment of loans in the consumer loan portfolio based on loans in a performing status and loans in a nonperforming status at December 31, 2018 and 2017: (Dollars in thousands) Residential mortgage Consumer installment Home equity Total consumer December 31, 2018 Originated Portfolio: Performing $ 2,399,317 $ 1,450,076 $ 608,525 $ 4,457,918 Nonperforming 7,988 1,276 3,604 12,868 Subtotal 2,407,305 1,451,352 612,129 4,470,786 Acquired Loans 1,051,361 69,722 166,043 1,287,126 Total $ 3,458,666 $ 1,521,074 $ 778,172 $ 5,757,912 December 31, 2017 Originated Portfolio: Performing $ 1,959,222 $ 1,509,698 $ 607,541 $ 4,076,461 Nonperforming 8,635 842 4,305 13,782 Subtotal 1,967,857 1,510,540 611,846 4,090,243 Acquired Loans 1,284,630 102,468 217,399 1,604,497 Total $ 3,252,487 $ 1,613,008 $ 829,245 $ 5,694,740 Nonperforming Assets and Past Due Loans Nonperforming assets consist of loans for which the accrual of interest has been discontinued, other real estate owned acquired through acquisitions, other real estate owned obtained through foreclosure and other repossessed assets. Loans are considered past due or delinquent when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof remains unpaid after the due date of the scheduled payments. Loans outside of those accounted for under ASC 310-30 are classified as nonaccrual when, in the opinion of management, collection of principal or interest is doubtful. The accrual of interest is discontinued when a loan is placed in nonaccrual status and any payments received reduce the carrying value of the loan. A loan may be placed back on accrual status if all contractual payments have been received and collection of future principal and interest payments are no longer doubtful.Acquired loans that are not performing in accordance with contractual terms are not reported as nonperforming because these loans are recorded in pools at their net realizable value based on the principal and interest the Corporation expects to collect on these loans. Chemical Financial Corporation Notes to Consolidated Financial Statements December 31, 2018 121