Portfolio Loans | PORTFOLIO LOANS Below is a summary of Portfolio loans by category at June 30, 2016 and December 31, 2015 : (in thousands) June 30, 2016 December 31, 2015 Commercial and industrial $ 1,540,457 $ 1,484,327 Real estate: Commercial - investor owned 466,713 428,064 Commercial - owner occupied 332,639 342,959 Construction and land development 171,778 161,061 Residential 211,155 196,498 Total real estate loans 1,182,285 1,128,582 Consumer and other 161,417 137,537 Portfolio loans 2,884,159 2,750,446 Unearned loan fees, net (250 ) 291 Portfolio loans, including unearned loan fees $ 2,883,909 $ 2,750,737 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 June 30, 2016 , and at December 31, 2015 , 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 December 31, 2015 $ 22,056 $ 3,484 $ 2,969 $ 1,704 $ 1,796 $ 1,432 $ 33,441 Provision (provision reversal) charged to expense 1,120 (116 ) 80 (65 ) 11 (197 ) 833 Losses charged off (68 ) — — — — (5 ) (73 ) Recoveries 53 7 68 6 34 4 172 Balance at March 31, 2016 $ 23,161 $ 3,375 $ 3,117 $ 1,645 $ 1,841 $ 1,234 $ 34,373 Provision (provision reversal) charged to expense 302 (27 ) (541 ) (434 ) (80 ) 1,496 716 Losses charged off (157 ) — — — — (6 ) (163 ) Recoveries 502 8 15 8 36 3 572 Balance at June 30, 2016 $ 23,808 $ 3,356 $ 2,591 $ 1,219 $ 1,797 $ 2,727 $ 35,498 (in thousands) Commercial and industrial CRE - investor owned CRE - owner occupied Construction and land development Residential real estate Consumer and other Total Balance June 30, 2016 Allowance for loan losses - Ending balance: Individually evaluated for impairment $ 2,716 $ — $ — $ 31 $ 3 $ 1,927 $ 4,677 Collectively evaluated for impairment 21,092 3,356 2,591 1,188 1,794 800 30,821 Total $ 23,808 $ 3,356 $ 2,591 $ 1,219 $ 1,797 $ 2,727 $ 35,498 Loans - Ending balance: Individually evaluated for impairment $ 5,019 $ 248 $ 1,704 $ 2,576 $ 670 $ 4,571 $ 14,788 Collectively evaluated for impairment 1,535,438 466,465 330,935 169,202 210,485 156,596 2,869,121 Total $ 1,540,457 $ 466,713 $ 332,639 $ 171,778 $ 211,155 $ 161,167 $ 2,883,909 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 A summary of Portfolio loans individually evaluated for impairment by category at June 30, 2016 and December 31, 2015 , is as follows: June 30, 2016 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 4,840 $ 134 $ 4,700 $ 4,834 $ 2,716 $ 4,873 Real estate loans: Commercial - investor owned — 249 — 249 — 250 Commercial - owner occupied — — — — — — Construction and land development 3,481 2,970 367 3,337 31 2,646 Residential 670 642 65 707 3 679 Consumer and other 4,571 — 4,580 4,580 1,927 4,628 Total $ 13,562 $ 3,995 $ 9,712 $ 13,707 $ 4,677 $ 13,076 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 loans: 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 The following table presents details for past due and impaired loans: Three months ended June 30, Six months ended June 30, (in thousands) 2016 2015 2016 2015 Total interest income that would have been recognized under original terms $ 329 $ 229 $ 477 $ 544 Total cash received and recognized as interest income on non-accrual loans 44 98 50 125 Total interest income recognized on impaired loans 25 14 31 27 There were no loans over 90 days past due and still accruing interest at June 30, 2016 or December 31, 2015 . The recorded investment in impaired Portfolio loans by category at June 30, 2016 and December 31, 2015 , is as follows: June 30, 2016 (in thousands) Non-accrual Restructured Loans over 90 days past due and still accruing interest Total Commercial and industrial $ 2,524 $ 2,310 $ — $ 4,834 Real estate: Commercial - investor owned 249 — — 249 Commercial - owner occupied — — — — Construction and land development 3,317 20 — 3,337 Residential 707 — — 707 Consumer and other 4,580 — — 4,580 Total $ 11,377 $ 2,330 $ — $ 13,707 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 The recorded investment by category for the Portfolio loans that have been restructured during the three and six months ended June 30, 2016 and 2015 , is as follows: Three months ended June 30, 2016 Three months ended June 30, 2015 (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 $ 2,300 $ 2,300 — $ — $ — Real estate: Commercial - investor owned — — — — — — Commercial - owner occupied — — — — — — Construction and land development 1 20 20 — — — Residential — — — — — — Consumer and other — — — — — — Total 2 $ 2,320 $ 2,320 — $ — $ — Six months ended June 30, 2016 Six months ended June 30, 2015 (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 $ 2,341 $ 2,341 — $ — $ — Real estate: Commercial - investor owned 1 248 248 — — — Commercial - owner occupied — — — — — — Construction and land development 1 20 20 — — — Residential — — — — — — Consumer and other — — — — — — Total 4 $ 2,609 $ 2,609 — $ — $ — The restructured loans resulted from deferral of principal and extending the term to maturity. As of June 30, 2016 , the Company had $1.2 million specific reserves allocated to loans that have been restructured. There were no Portfolio loans restructured that subsequently defaulted during the six months ended June 30, 2016 or 2015 . The aging of the recorded investment in past due Portfolio loans by portfolio class and category at June 30, 2016 and December 31, 2015 is shown below. June 30, 2016 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 83 $ 2,407 $ 2,490 $ 1,537,967 $ 1,540,457 Real estate: Commercial - investor owned — — — 466,713 466,713 Commercial - owner occupied — — — 332,639 332,639 Construction and land development 367 2,189 2,556 169,222 171,778 Residential 10 605 615 210,540 211,155 Consumer and other 4 — 4 161,163 161,167 Total $ 464 $ 5,201 $ 5,665 $ 2,878,244 $ 2,883,909 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 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, 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 June 30, 2016 , which is based upon the most recent analysis performed, and December 31, 2015 is as follows: June 30, 2016 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,396,684 $ 82,775 $ 60,998 $ — $ 1,540,457 Real estate: Commercial - investor owned 448,321 13,223 5,169 — 466,713 Commercial - owner occupied 302,411 27,144 3,084 — 332,639 Construction and land development 161,528 6,258 3,992 — 171,778 Residential 202,880 4,840 3,435 — 211,155 Consumer and other 154,500 714 5,953 — 161,167 Total $ 2,666,324 $ 134,954 $ 82,631 $ — $ 2,883,909 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 |