Portfolio Loans | PORTFOLIO LOANS Below is a summary of Portfolio loans by category at September 30, 2016 and December 31, 2015 : (in thousands) September 30, 2016 December 31, 2015 Commercial and industrial $ 1,598,815 $ 1,484,327 Real estate: Commercial - investor owned 515,055 428,064 Commercial - owner occupied 340,916 342,959 Construction and land development 188,856 161,061 Residential 233,960 196,498 Total real estate loans 1,278,787 1,128,582 Consumer and other 160,535 137,537 Portfolio loans 3,038,137 2,750,446 Unearned loan fees, net (432 ) 291 Portfolio loans, including unearned loan fees $ 3,037,705 $ 2,750,737 A summary of the 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, 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) for loan losses 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) for loan losses 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 Provision (provision reversal) for loan losses 3,575 10 94 (730 ) 168 (79 ) 3,038 Losses charged off (2,044 ) — — — (25 ) (4 ) (2,073 ) Recoveries 69 8 17 913 26 2 1,035 Balance at September 30, 2016 $ 25,408 $ 3,374 $ 2,702 $ 1,402 $ 1,966 $ 2,646 $ 37,498 (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, 2016 Allowance for loan losses - Ending balance: Individually evaluated for impairment $ 3,785 $ — $ — $ 158 $ 3 $ 1,855 $ 5,801 Collectively evaluated for impairment 21,623 3,374 2,702 1,244 1,963 791 31,697 Total $ 25,408 $ 3,374 $ 2,702 $ 1,402 $ 1,966 $ 2,646 $ 37,498 Loans - Ending balance: Individually evaluated for impairment $ 13,414 $ 252 $ 1,666 $ 1,907 $ 124 $ 4,499 $ 21,862 Collectively evaluated for impairment 1,585,401 514,803 339,250 186,949 233,836 155,604 3,015,843 Total $ 1,598,815 $ 515,055 $ 340,916 $ 188,856 $ 233,960 $ 160,103 $ 3,037,705 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 September 30, 2016 and December 31, 2015 , is as follows: September 30, 2016 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 14,895 $ 136 $ 13,134 $ 13,270 $ 3,785 $ 15,666 Real estate loans: Commercial - investor owned 252 253 — 253 — 250 Commercial - owner occupied — — — — — — Construction and land development 1,907 1,920 358 2,278 158 2,403 Residential 149 65 64 129 3 652 Consumer and other 4,499 — 4,508 4,508 1,855 4,598 Total $ 21,702 $ 2,374 $ 18,064 $ 20,438 $ 5,801 $ 23,569 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 September 30, Nine months ended September 30, (in thousands) 2016 2015 2016 2015 Total interest income that would have been recognized under original terms $ 226 $ 369 $ 703 $ 913 Total cash received and recognized as interest income on non-accrual loans 203 81 253 206 Total interest income recognized on impaired loans 32 4 63 31 There were no loans over 90 days past due and still accruing interest at September 30, 2016 or December 31, 2015 . The recorded investment in impaired Portfolio loans by category at September 30, 2016 and December 31, 2015 , is as follows: September 30, 2016 (in thousands) Non-accrual Restructured Loans over 90 days past due and still accruing interest Total Commercial and industrial $ 10,959 $ 2,311 $ — $ 13,270 Real estate: Commercial - investor owned 253 — — 253 Commercial - owner occupied — — — — Construction and land development 2,258 20 — 2,278 Residential 129 — — 129 Consumer and other 4,508 — — 4,508 Total $ 18,107 $ 2,331 $ — $ 20,438 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 nine months ended September 30, 2016 and 2015 , is as follows: Three months ended September 30, 2016 Three months ended September 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 — $ — $ — — $ — $ — Real estate: Commercial - investor owned — — — — — — Commercial - owner occupied — — — — — — Construction and land development — — — — — — Residential — — — — — — Consumer and other — — — — — — Total — $ — $ — — $ — $ — Nine months ended September 30, 2016 Nine months ended September 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 September 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 three and nine months ended September 30, 2016 or 2015 . The aging of the recorded investment in past due Portfolio loans by portfolio class and category at September 30, 2016 and December 31, 2015 is shown below. September 30, 2016 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ — $ 364 $ 364 $ 1,598,451 $ 1,598,815 Real estate: Commercial - investor owned 136 — 136 514,919 515,055 Commercial - owner occupied 225 — 225 340,691 340,916 Construction and land development — 1,529 1,529 187,327 188,856 Residential 73 60 133 233,827 233,960 Consumer and other — — — 160,103 160,103 Total $ 434 $ 1,953 $ 2,387 $ 3,035,318 $ 3,037,705 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 September 30, 2016 , which is based upon the most recent analysis performed, and December 31, 2015 is as follows: September 30, 2016 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,457,729 $ 63,572 $ 77,514 $ — $ 1,598,815 Real estate: Commercial - investor owned 501,228 9,549 4,278 — 515,055 Commercial - owner occupied 311,427 25,369 4,120 — 340,916 Construction and land development 179,515 6,050 3,291 — 188,856 Residential 226,287 4,224 3,449 — 233,960 Consumer and other 153,458 711 5,934 — 160,103 Total $ 2,829,644 $ 109,475 $ 98,586 $ — $ 3,037,705 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 |