Portfolio Loans | PORTFOLIO LOANS Below is a summary of portfolio loans by category at December 31, 2016 and 2015 : (in thousands) December 31, 2016 December 31, 2015 Commercial and industrial $ 1,632,714 $ 1,484,327 Real estate loans: Commercial - investor owned 544,808 428,064 Commercial - owner occupied 350,148 342,959 Construction and land development 194,542 161,061 Residential 240,760 196,498 Total real estate loans 1,330,258 1,128,582 Consumer and other 156,182 137,537 Portfolio loans, before unearned loan (fees) costs 3,119,154 2,750,446 Unearned loan (fees) costs, net (762 ) 291 Portfolio loans $ 3,118,392 $ 2,750,737 Following is a summary of activity for the years ended December 31, 2016 , 2015 , and 2014 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, 2016 December 31, 2015 December 31, 2014 Balance at beginning of year $ 4,394 $ 13,513 $ 11,752 New loans and advances 11,539 641 11,796 Payments and other reductions (527 ) (9,760 ) (10,035 ) Balance at end of year $ 15,406 $ 4,394 $ 13,513 A summary of activity in the allowance for portfolio 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 Total Balance at December 31, 2016 Allowance for loan losses: Balance, beginning of year $ 22,056 $ 3,484 $ 2,969 $ 1,704 $ 1,796 $ 1,432 $ 33,441 Provision (provision reversal) 6,569 (11 ) (1,202 ) (1,334 ) 129 1,400 5,551 Losses charged off (2,303 ) (95 ) — — (25 ) (1,912 ) (4,335 ) Recoveries 674 42 1,123 934 123 12 2,908 Balance, end of year $ 26,996 $ 3,420 $ 2,890 $ 1,304 $ 2,023 $ 932 $ 37,565 Balance at December 31, 2015 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 December 31, 2014 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 (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, 2016 Allowance for loan losses - Ending balance: Individually evaluated for impairment $ 2,909 $ — $ — $ 155 $ — $ — $ 3,064 Collectively evaluated for impairment 24,087 3,420 2,890 1,149 2,023 932 34,501 Total $ 26,996 $ 3,420 $ 2,890 $ 1,304 $ 2,023 $ 932 $ 37,565 Loans - Ending balance: Individually evaluated for impairment $ 12,523 $ 430 $ 1,854 $ 1,903 $ 62 $ — $ 16,772 Collectively evaluated for impairment 1,620,191 544,378 348,294 192,639 240,698 155,420 3,101,620 Total $ 1,632,714 $ 544,808 $ 350,148 $ 194,542 $ 240,760 $ 155,420 $ 3,118,392 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 December 31, 2016 and 2015 , is as follows: December 31, 2016 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 12,341 $ 566 $ 11,791 $ 12,357 $ 2,909 $ 4,489 Real estate: Commercial - investor owned 525 435 — 435 — 668 Commercial - owner occupied 225 231 — 231 — 227 Construction and land development 1,904 1,947 359 2,306 155 1,918 Residential 62 62 — 62 — 64 Consumer and other — — — — — — Total $ 15,057 $ 3,241 $ 12,150 $ 15,391 $ 3,064 $ 7,366 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 The following table presents details for past due and impaired loans: December 31, (in thousands) 2016 2015 2014 Total interest income that would have been recognized under original terms on impaired loans $ 1,079 $ 1,038 $ 1,013 Total cash received and recognized as interest income on impaired loans 251 226 118 Total interest income recognized on impaired loans still accruing 155 36 39 There were no loans over 90 days past due and still accruing interest at December 31, 2016 or 2015 . The recorded investment in impaired portfolio loans by category at December 31, 2016 and 2015 , is as follows: December 31, 2016 (in thousands) Non-accrual Restructured Total Commercial and industrial $ 10,046 $ 2,311 $ 12,357 Real estate: Commercial - investor owned 435 — 435 Commercial - owner occupied 231 — 231 Construction and land development 2,286 20 2,306 Residential 62 — 62 Consumer and other — — — Total $ 13,060 $ 2,331 $ 15,391 December 31, 2015 (in thousands) Non-accrual Restructured 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 years ended December 31, 2016 and 2015 , is as follows: Year ended December 31, 2016 Year ended December 31, 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 4 $ 12,114 $ 12,114 1 $ 303 $ 303 Real estate: Commercial - investor owned 1 248 248 — — — Commercial - owner occupied 1 13 13 — — — Construction and land development 1 20 20 — — — Residential — — — — — — Consumer and other — — — — — — Total 7 $ 12,395 $ 12,395 1 $ 303 $ 303 The restructured portfolio loans primarily resulted from interest rate concessions and changing the terms of the loans. As of December 31, 2016 , the Company allocated $0.7 million of specific reserves to loans that have been restructured. No loans that were previously restructured subsequently defaulted during the years ended December 31, 2016 and 2015 . The aging of the recorded investment in past due portfolio loans by portfolio class and category at December 31, 2016 and 2015 is shown below: December 31, 2016 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 334 $ 171 $ 505 $ 1,632,209 $ 1,632,714 Real estate: Commercial - investor owned — 175 175 544,633 544,808 Commercial - owner occupied 212 225 437 349,711 350,148 Construction and land development 355 1,528 1,883 192,659 194,542 Residential 91 — 91 240,669 240,760 Consumer and other 7 — 7 155,413 155,420 Total $ 999 $ 2,099 $ 3,098 $ 3,115,294 $ 3,118,392 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, 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, 2016 and December 31, 2015 is as follows: December 31, 2016 (in thousands) Pass (1-6) Watch (7) Substandard (8) Total Commercial and industrial $ 1,499,114 $ 57,416 $ 76,184 $ 1,632,714 Real estate: Commercial - investor owned 530,494 10,449 3,865 544,808 Commercial - owner occupied 306,658 39,249 4,241 350,148 Construction and land development 185,505 6,575 2,462 194,542 Residential 233,479 2,997 4,284 240,760 Consumer and other 153,984 — 1,436 155,420 Total $ 2,909,234 $ 116,686 $ 92,472 $ 3,118,392 December 31, 2015 (in thousands) Pass (1-6) Watch (7) Substandard (8) 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 |