Portfolio Loans | PORTFOLIO LOANS Below is a summary of Portfolio loans by category at December 31, 2015 and 2014 : (in thousands) December 31, 2015 December 31, 2014 Commercial and industrial $ 1,484,327 $ 1,264,487 Real estate loans: Commercial - investor owned 428,064 396,751 Commercial - owner occupied 342,959 344,003 Construction and land development 161,061 143,878 Residential 196,498 185,252 Total real estate loans 1,128,582 1,069,884 Consumer and other 137,537 98,650 Portfolio loans 2,750,446 2,433,021 Unearned loan fees, net 291 895 Portfolio loans, including unearned loan fees $ 2,750,737 $ 2,433,916 Note: In 2015, the Company redefined certain loan categories by borrower type and purpose of the loan. To conform to the current year classification, the Company reclassified $36.4 million into Consumer and other loans as of December 31, 2014. This includes $5.8 million from C&I, $16.2 million from CRE-investor owned, $13.5 million from CRE-owner occupied, and $0.9 million from Construction and land development. Following is a summary of activity for the years ended December 31, 2015 , 2014 , and 2013 of loans to executive officers and directors, or to entities in which such individuals had beneficial interests as a shareholder, officer, or director. Such loans were made in the normal course of business on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers and did not involve more than the normal risk of collectibility. (in thousands) December 31, 2015 December 31, 2014 December 31, 2013 Balance at beginning of year $ 13,513 $ 11,752 $ 16,875 New loans and advances 641 11,796 6,519 Payments and other reductions (9,760 ) (10,035 ) (11,642 ) Balance at end of year $ 4,394 $ 13,513 $ 11,752 A summary of activity in the allowance for loan losses and the recorded investment in Portfolio loans by class and category based on impairment method for the years ended indicated below is as follows: (in thousands) Commercial and industrial CRE - investor owned CRE - owner occupied Construction and land development Residential real estate Consumer and other Unallocated Total Balance at Allowance for Loan Losses: Balance, beginning of year $ 16,983 $ 4,382 $ 3,135 $ 1,715 $ 2,830 $ 1,140 $ — $ 30,185 Provision (provision reversal) 6,976 (303 ) (1,626 ) (335 ) (58 ) 218 — 4,872 Losses charged off (3,699 ) (664 ) (38 ) (350 ) (1,313 ) (27 ) — (6,091 ) Recoveries 1,796 69 1,498 674 337 101 — 4,475 Balance, end of year $ 22,056 $ 3,484 $ 2,969 $ 1,704 $ 1,796 $ 1,432 $ — $ 33,441 Balance at Allowance for Loan Losses: Balance, beginning of year $ 12,246 $ 6,600 $ 4,096 $ 2,136 $ 2,019 $ 192 $ — $ 27,289 Provision (provision reversal) 6,707 (2,063 ) (1,517 ) (322 ) 525 1,079 — 4,409 Losses charged off (3,738 ) (250 ) (450 ) (905 ) (48 ) (165 ) — (5,556 ) Recoveries 1,768 95 1,006 806 334 34 — 4,043 Balance, end of year $ 16,983 $ 4,382 $ 3,135 $ 1,715 $ 2,830 $ 1,140 $ — $ 30,185 Balance at Allowance for Loan Losses: Balance, beginning of year $ 10,064 $ 10,403 $ 4,192 $ 5,239 $ 2,026 $ 31 $ 2,375 $ 34,330 Provision (provision reversal) 3,810 (94 ) 410 (2,695 ) 107 195 (2,375 ) (642 ) Losses charged off (3,404 ) (4,441 ) (550 ) (896 ) (1,053 ) (34 ) — (10,378 ) Recoveries 1,776 732 44 488 939 — — 3,979 Balance, end of year $ 12,246 $ 6,600 $ 4,096 $ 2,136 $ 2,019 $ 192 $ — $ 27,289 (in thousands) Commercial and industrial CRE - investor owned CRE - owner occupied Construction and land development Residential real estate Consumer and other Total Balance December 31, 2015 Allowance for Loan Losses - Ending Balance: Individually evaluated for impairment $ 1,953 $ — $ 6 $ 369 $ 7 $ — $ 2,335 Collectively evaluated for impairment 20,103 3,484 2,963 1,335 1,789 1,432 31,106 Total $ 22,056 $ 3,484 $ 2,969 $ 1,704 $ 1,796 $ 1,432 $ 33,441 Loans - Ending Balance: Individually evaluated for impairment $ 4,514 $ 921 $ 1,962 $ 2,800 $ 681 $ — $ 10,878 Collectively evaluated for impairment 1,479,813 427,143 340,997 158,261 195,817 137,828 2,739,859 Total $ 1,484,327 $ 428,064 $ 342,959 $ 161,061 $ 196,498 $ 137,828 $ 2,750,737 Balance December 31, 2014 Allowance for Loan Losses - Ending Balance: Individually evaluated for impairment $ 704 $ — $ — $ 352 $ 1,052 $ 286 $ 2,394 Collectively evaluated for impairment 16,279 4,382 3,135 1,363 1,778 854 27,791 Total $ 16,983 $ 4,382 $ 3,135 $ 1,715 $ 2,830 $ 1,140 $ 30,185 Loans - Ending Balance: Individually evaluated for impairment $ 5,998 $ 5,036 $ 2,618 $ 6,866 $ 3,082 $ 766 $ 24,366 Collectively evaluated for impairment 1,258,489 391,715 341,385 137,012 182,170 98,779 2,409,550 Total $ 1,264,487 $ 396,751 $ 344,003 $ 143,878 $ 185,252 $ 99,545 $ 2,433,916 A summary of Portfolio loans individually evaluated for impairment by category at December 31, 2015 and 2014 , is as follows: December 31, 2015 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 5,554 $ 509 $ 4,204 $ 4,713 $ 1,953 $ 6,970 Real estate: Commercial - investor owned 927 927 — 927 — 970 Commercial - owner occupied 329 85 113 198 6 301 Construction and land development 4,349 2,914 530 3,444 369 3,001 Residential 705 637 68 705 7 682 Consumer and other — — — — — — Total $ 11,864 $ 5,072 $ 4,915 $ 9,987 $ 2,335 $ 11,924 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: Commercial - investor owned 5,036 — 5,187 5,187 — 4,375 Commercial - owner occupied 610 — 519 519 — 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 766 770 — 770 286 581 Total $ 25,497 $ 6,741 $ 16,249 $ 22,990 $ 2,394 $ 18,607 The following table presents details for past due and impaired loans: December 31, (in thousands) 2015 2014 2013 Total interest income that would have been recognized under original terms on impaired loans $ 1,038 $ 1,013 $ 1,538 Total cash received and recognized as interest income on impaired loans 226 118 257 Total interest income recognized on impaired loans still accruing 36 39 16 There were no loans over 90 days past due and still accruing interest at December 31, 2015 or 2014 . At December 31, 2015 , there were $0.01 million of unadvanced commitments on impaired loans. The recorded investment in impaired Portfolio loans by category at December 31, 2015 and 2014 , is as follows: December 31, 2015 (in thousands) Non-accrual Restructured Loans over 90 days past due and still accruing interest Total Commercial and industrial $ 4,406 $ 307 $ — $ 4,713 Real estate: Commercial - investor owned 927 — — 927 Commercial - owner occupied 198 — — 198 Construction and land development 3,444 — — 3,444 Residential 705 — — 705 Consumer and other — — — — Total $ 9,680 $ 307 $ — $ 9,987 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: Commercial - investor owned 4,597 590 — 5,187 Commercial - owner occupied 519 — — 519 Construction and land development 7,348 — — 7,348 Residential 3,093 — — 3,093 Consumer and other — 770 — 770 Total $ 21,630 $ 1,360 $ — $ 22,990 The recorded investment by category for the Portfolio loans that have been restructured during the years ended December 31, 2015 and 2014 , is as follows: Year ended December 31, 2015 Year ended December 31, 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 1 $ 303 $ 303 2 $ 658 $ 658 Real estate: Commercial - investor owned — — — 1 603 603 Commercial - owner occupied — — — 2 606 606 Construction and land development — — — 1 2,827 2,827 Residential — — — 1 125 125 Consumer and other — — — 1 1,043 793 Total 1 $ 303 $ 303 8 $ 5,862 $ 5,612 The restructured Portfolio loans primarily resulted from interest rate concessions and changing the terms of the loans. As of December 31, 2015 , the Company allocated $0.2 million of specific reserves to the loans that have been restructured. The recorded investment by category for Portfolio loans that have been restructured and subsequently defaulted during 2015 and 2014 is as follows: Year ended December 31, 2015 Year ended December 31, 2014 (in thousands, except for number of loans) Number of Loans Recorded Balance Number of Loans Recorded Balance Commercial and industrial — $ — — $ — Real estate: Commercial - investor owned — — — — Commercial - owner occupied — — — — Construction and land development — — 1 241 Residential — — — — Consumer and other — — — — Total — $ — 1 $ 241 The aging of the recorded investment in past due Portfolio loans by portfolio class and category at December 31, 2015 and 2014 is shown below. December 31, 2015 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 505 $ 888 $ 1,393 $ 1,482,934 $ 1,484,327 Real estate: Commercial - investor owned 464 — 464 427,600 428,064 Commercial - owner occupied 94 184 278 342,681 342,959 Construction and land development 384 2,273 2,657 158,404 161,061 Residential 70 681 751 195,747 196,498 Consumer and other 20 — 20 137,808 137,828 Total $ 1,537 $ 4,026 $ 5,563 $ 2,745,174 $ 2,750,737 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 $ 1,261,196 $ 1,264,487 Real estate: Commercial - investor owned 261 4,450 4,711 392,040 396,751 Commercial - owner occupied — 496 496 343,507 344,003 Construction and land development 702 2,524 3,226 140,652 143,878 Residential 168 — 168 185,084 185,252 Consumer and other 774 — 774 98,771 99,545 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 December 31, 2015 and December 31, 2014 is as follows: December 31, 2015 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,356,864 $ 90,370 $ 37,093 $ — $ 1,484,327 Real estate: Commercial - investor owned 403,820 18,868 5,376 — 428,064 Commercial - owner occupied 314,791 24,727 3,441 — 342,959 Construction and land development 146,601 10,114 4,346 — 161,061 Residential 188,269 5,138 3,091 — 196,498 Consumer and other 131,060 721 6,047 — 137,828 Total $ 2,541,405 $ 149,938 $ 59,394 $ — $ 2,750,737 December 31, 2014 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,161,979 $ 62,315 $ 40,193 $ — $ 1,264,487 Real estate: Commercial - investor owned 361,991 18,640 16,120 — 396,751 Commercial - owner occupied 322,725 18,025 3,253 — 344,003 Construction and land development 122,365 12,993 8,520 — 143,878 Residential 168,543 11,012 5,697 — 185,252 Consumer and other 91,827 5,499 2,219 — 99,545 Total $ 2,229,430 $ 128,484 $ 76,002 $ — $ 2,433,916 |