Portfolio Loans | PORTFOLIO LOANS Below is a summary of Portfolio loans by category at September 30, 2015 and December 31, 2014 : (in thousands) September 30, 2015 December 31, 2014 Commercial and industrial $ 1,371,095 $ 1,270,259 Real estate loans: Commercial - investor owned 424,090 413,026 Commercial - owner occupied 354,178 357,503 Construction and land development 152,979 144,773 Residential 188,985 185,252 Total real estate loans 1,120,232 1,100,554 Consumer and other 109,853 62,208 Portfolio loans 2,601,180 2,433,021 Unearned loan fees, net 976 895 Portfolio loans, including unearned loan costs $ 2,602,156 $ 2,433,916 A summary of the year-to-date activity in the allowance for loan losses and the recorded investment in Portfolio loans by class and category based on impairment method through September 30, 2015 , and at December 31, 2014 , is as follows: (in thousands) Commercial and industrial CRE - investor owned CRE - owner occupied Construction and land development Residential real estate Consumer and other Total Allowance for loan losses: Balance at $ 17,004 $ 4,598 $ 3,625 $ 1,720 $ 2,830 $ 408 $ 30,185 Provision charged to expense 823 (12 ) (175 ) 914 74 (44 ) 1,580 Losses charged off (1,484 ) — — — (1,073 ) (11 ) (2,568 ) Recoveries 769 29 127 60 26 80 1,091 Balance at $ 17,112 $ 4,615 $ 3,577 $ 2,694 $ 1,857 $ 433 $ 30,288 Provision charged to expense 2,927 (519 ) (347 ) (91 ) 100 80 2,150 Losses charged off (1,578 ) (664 ) — (350 ) — (4 ) (2,596 ) Recoveries 420 13 1,287 115 87 1 1,923 Balance at $ 18,881 $ 3,445 $ 4,517 $ 2,368 $ 2,044 $ 510 $ 31,765 Provision charged to expense 1,501 788 (1,340 ) (660 ) 40 270 599 Losses charged off (572 ) — — — (240 ) (9 ) (821 ) Recoveries 389 16 68 125 108 2 708 Balance at $ 20,199 $ 4,249 $ 3,245 $ 1,833 $ 1,952 $ 773 $ 32,251 (in thousands) Commercial and industrial CRE - investor owned CRE - owner occupied Construction and land development Residential real estate Consumer and other Total Balance September 30, 2015 Allowance for loan losses - Ending balance: Individually evaluated for impairment $ 1,802 $ — $ — $ 403 $ — $ — $ 2,205 Collectively evaluated for impairment 18,397 4,249 3,245 1,430 1,952 773 30,046 Total $ 20,199 $ 4,249 $ 3,245 $ 1,833 $ 1,952 $ 773 $ 32,251 Loans - Ending balance: Individually evaluated for impairment $ 2,975 $ 2,954 $ 2,248 $ 2,823 $ 714 $ — $ 11,714 Collectively evaluated for impairment 1,368,120 421,136 351,930 150,156 188,271 110,829 2,590,442 Total $ 1,371,095 $ 424,090 $ 354,178 $ 152,979 $ 188,985 $ 110,829 $ 2,602,156 Balance December 31, 2014 Allowance for Loan Losses - Ending Balance: Individually evaluated for impairment $ 704 $ — $ 286 $ 352 $ 1,052 $ — $ 2,394 Collectively evaluated for impairment 16,300 4,598 3,339 1,368 1,778 408 27,791 Total $ 17,004 $ 4,598 $ 3,625 $ 1,720 $ 2,830 $ 408 $ 30,185 Loans - Ending balance: Individually evaluated for impairment $ 5,998 $ 5,036 $ 3,384 $ 6,866 $ 3,082 $ — $ 24,366 Collectively evaluated for impairment 1,264,261 407,990 354,119 137,907 182,170 63,103 2,409,550 Total $ 1,270,259 $ 413,026 $ 357,503 $ 144,773 $ 185,252 $ 63,103 $ 2,433,916 A summary of Portfolio loans individually evaluated for impairment by category at September 30, 2015 and December 31, 2014 , is as follows: September 30, 2015 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 3,702 $ 658 $ 2,433 $ 3,091 $ 1,802 $ 5,696 Real estate loans: Commercial - investor owned 3,047 2,437 — 2,437 — 1,294 Commercial - owner occupied 321 240 — 240 — 967 Construction and land development 3,728 2,862 542 3,404 403 5,934 Residential 714 735 — 735 — 2,450 Consumer and other — — — — — — Total $ 11,512 $ 6,932 $ 2,975 $ 9,907 $ 2,205 $ 16,341 December 31, 2014 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 8,042 $ 2,609 $ 3,464 $ 6,073 $ 704 $ 4,136 Real estate loans: Commercial - investor owned 5,036 — 5,187 5,187 — 4,375 Commercial - owner occupied 1,376 770 519 1,289 286 1,281 Construction and land development 7,961 419 6,929 7,348 352 7,280 Residential 3,082 2,943 150 3,093 1,052 954 Consumer and other — — — — — 581 Total $ 25,497 $ 6,741 $ 16,249 $ 22,990 $ 2,394 $ 18,607 The following table presents details for past due and impaired loans: Three months ended September 30, Nine months ended September 30, (in thousands) 2015 2014 2015 2014 Total interest income that would have been recognized under original terms $ 369 $ 246 $ 913 $ 927 Total cash received and recognized as interest income on non-accrual loans 81 51 206 83 Total interest income recognized on impaired loans 4 11 31 27 There were no loans over 90 days past due and still accruing interest at September 30, 2015 or December 31, 2014 . At September 30, 2015 , there were $0.3 million unadvanced commitments on impaired loans. Other liabilities include approximately $0.2 million for estimated losses attributable to the unadvanced commitments. The recorded investment in impaired Portfolio loans by category at September 30, 2015 and December 31, 2014 , is as follows: September 30, 2015 (in thousands) Non-accrual Restructured Loans over 90 days past due and still accruing interest Total Commercial and industrial $ 3,091 $ — $ — $ 3,091 Real estate loans: Commercial - investor owned 2,437 — — 2,437 Commercial - owner occupied 240 — — 240 Construction and land development 3,404 — — 3,404 Residential 735 — — 735 Consumer and other — — — — Total $ 9,907 $ — $ — $ 9,907 December 31, 2014 (in thousands) Non-accrual Restructured Loans over 90 days past due and still accruing interest Total Commercial and industrial $ 6,073 $ — $ — $ 6,073 Real estate loans: Commercial - investor owned 4,597 590 — 5,187 Commercial - owner occupied 519 770 — 1,289 Construction and land development 7,348 — — 7,348 Residential 3,093 — — 3,093 Consumer and other — — — — Total $ 21,630 $ 1,360 $ — $ 22,990 The recorded investment by category for the Portfolio loans that have been restructured during the three and nine months ended September 30, 2015 and 2014 , is as follows: Three months ended September 30, 2015 Three months ended September 30, 2014 (in thousands, except for number of loans) Number of Loans Pre-Modification Outstanding Recorded Balance Post-Modification Outstanding Recorded Balance Number of Loans Pre-Modification Outstanding Recorded Balance Post-Modification Outstanding Recorded Balance Commercial and industrial — $ — $ — 2 $ 658 $ 658 Real estate loans: Commercial - investor owned — — — — — — Commercial - owner occupied — — — 1 357 357 Construction and land development — — — 1 2,827 2,827 Residential — — — — — — Consumer and other — — — — — — Total — $ — $ — 4 $ 3,842 $ 3,842 Nine months ended September 30, 2015 Nine months ended September 30, 2014 (in thousands, except for number of loans) Number of Loans Pre-Modification Outstanding Post-Modification Outstanding Number of Loans Pre-Modification Outstanding Post-Modification Outstanding Commercial and industrial — $ — $ — 2 $ 658 $ 658 Real estate loans: Commercial - investor owned — — — 1 603 603 Commercial - owner occupied — — — 3 1,649 1,399 Construction and land development — — — 1 2,827 2,827 Residential — — — 1 125 125 Consumer and other — — — — — — Total — $ — $ — 8 $ 5,862 $ 5,612 The restructured Portfolio loans primarily resulted from interest rate concessions and changing the terms of the loans. As of September 30, 2015 , the Company had no specific reserves allocated to the loans that have been restructured. There were no Portfolio loans that were restructured and subsequently defaulted during the nine months ended September 30, 2015 or 2014 . The aging of the recorded investment in past due Portfolio loans by portfolio class and category at September 30, 2015 and December 31, 2014 is shown below. September 30, 2015 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 5,472 $ 1,043 $ 6,515 $ 1,364,580 $ 1,371,095 Real estate loans: Commercial - investor owned 577 2,382 2,959 421,131 424,090 Commercial - owner occupied — 85 85 354,093 354,178 Construction and land development 148 2,283 2,431 150,548 152,979 Residential 13 714 727 188,258 188,985 Consumer and other — — — 110,829 110,829 Total $ 6,210 $ 6,507 $ 12,717 $ 2,589,439 $ 2,602,156 December 31, 2014 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 3,059 $ 232 $ 3,291 $ 1,266,968 $ 1,270,259 Real estate loans: Commercial - investor owned 261 4,450 4,711 408,315 413,026 Commercial - owner occupied 766 496 1,262 356,241 357,503 Construction and land development 702 2,524 3,226 141,547 144,773 Residential 168 — 168 185,084 185,252 Consumer and other 8 — 8 63,095 63,103 Total $ 4,964 $ 7,702 $ 12,666 $ 2,421,250 $ 2,433,916 The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, historical payment experience, credit documentation, and current economic factors among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings: • Grades 1 , 2 , and 3 – Includes loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow, and whose management team has experience and depth within their industry. • Grade 4 – Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow. • Grade 5 – Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow. • Grade 6 – Includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the borrower is starting to reverse a negative trend or condition, or has recently been upgraded from a 7 , 8 , or 9 rating. • Grade 7 – Watch credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support. • Grade 8 – Substandard credits will include those borrowers characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted. • Grade 9 – Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual. The recorded investment by risk category of the Portfolio loans by portfolio class and category at September 30, 2015 , which is based upon the most recent analysis performed, and December 31, 2014 is as follows: September 30, 2015 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,267,697 $ 67,560 $ 35,838 $ — $ 1,371,095 Real estate loans: Commercial - investor owned 390,403 22,034 11,653 — 424,090 Commercial - owner occupied 328,753 20,813 4,612 — 354,178 Construction and land development 136,374 12,139 4,466 — 152,979 Residential 174,883 10,576 3,526 — 188,985 Consumer and other 110,336 — 493 — 110,829 Total $ 2,408,446 $ 133,122 $ 60,588 $ — $ 2,602,156 December 31, 2014 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,167,751 $ 62,315 $ 40,193 $ — $ 1,270,259 Real estate loans: Commercial - investor owned 372,818 24,088 16,120 — 413,026 Commercial - owner occupied 334,347 18,025 5,131 — 357,503 Construction and land development 123,260 12,993 8,520 — 144,773 Residential 168,543 11,012 5,697 — 185,252 Consumer and other 62,711 51 341 — 63,103 Total $ 2,229,430 $ 128,484 $ 76,002 $ — $ 2,433,916 |