Portfolio Loans | LOANS The loan portfolio is comprised of loans originated by the Company and loans that were acquired in connection with the Company’s acquisitions. These loans are accounted for using the guidance in the Accounting Standards Codification (ASC) section 310-30 and 310-20. Loans accounted for using ASC 310-30 are sometimes referred to as purchased credit impaired, or PCI, loans. The table below shows the loan portfolio composition including carrying value by segment of loans accounted for under ASC 310-30 (PCI loans) and loans not accounted for under this guidance, which includes our originated loans. (in thousands) June 30, 2017 December 31, 2016 Loans not accounted for as ASC 310-30 $ 3,810,470 $ 3,118,392 Loans accounted for as ASC 310-30 84,300 39,769 Total loans $ 3,894,770 $ 3,158,161 The following tables refer to loans not accounted for as ASC 310-30 loans. Below is a summary of loans by category at June 30, 2017 and December 31, 2016 : (in thousands) June 30, 2017 December 31, 2016 Commercial and industrial $ 1,795,667 $ 1,632,714 Real estate: Commercial - investor owned 711,702 544,808 Commercial - owner occupied 523,185 350,148 Construction and land development 283,226 194,542 Residential 345,895 240,760 Total real estate loans 1,864,008 1,330,258 Consumer and other 151,670 156,182 Loans, before unearned loan fees 3,811,345 3,119,154 Unearned loan fees, net (875 ) (762 ) Loans, including unearned loan fees $ 3,810,470 $ 3,118,392 A summary of the activity in the allowance for loan losses and the recorded investment in loans by class and category based on impairment method through June 30, 2017 , and at December 31, 2016 , 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, 2016 $ 26,996 $ 3,420 $ 2,890 $ 1,304 $ 2,023 $ 932 $ 37,565 Provision (provision reversal) for loan losses 1,835 (105 ) (249 ) (11 ) (3 ) 66 1,533 Losses charged off (133 ) — — — (9 ) (29 ) (171 ) Recoveries 80 9 89 9 25 9 221 Balance at March 31, 2017 $ 28,778 $ 3,324 $ 2,730 $ 1,302 $ 2,036 $ 978 $ 39,148 Provision (provision reversal) for loan losses 2,955 (39 ) 354 (51 ) 451 (47 ) 3,623 Losses charged off (6,035 ) — (45 ) (5 ) (265 ) (39 ) (6,389 ) Recoveries 57 102 1 49 62 20 291 Balance at June 30, 2017 $ 25,755 $ 3,387 $ 3,040 $ 1,295 $ 2,284 $ 912 $ 36,673 (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, 2017 Allowance for loan losses - Ending balance: Individually evaluated for impairment $ 1,616 $ — $ — $ 131 $ 52 $ — $ 1,799 Collectively evaluated for impairment 24,139 3,387 3,040 1,164 2,232 912 34,874 Total $ 25,755 $ 3,387 $ 3,040 $ 1,295 $ 2,284 $ 912 $ 36,673 Loans - Ending balance: Individually evaluated for impairment $ 10,209 $ 287 $ 1,552 $ 1,489 $ 1,293 $ 9 $ 14,839 Collectively evaluated for impairment 1,785,458 711,415 521,633 281,737 344,602 150,786 3,795,631 Total $ 1,795,667 $ 711,702 $ 523,185 $ 283,226 $ 345,895 $ 150,795 $ 3,810,470 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 A summary of non-performing loans individually evaluated for impairment by category at June 30, 2017 and December 31, 2016 , is as follows: June 30, 2017 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 15,548 $ 3,751 $ 6,534 $ 10,285 $ 1,572 $ 15,283 Real estate: Commercial - investor owned 288 288 — 288 — 288 Commercial - owner occupied — — — — — — Construction and land development 1,935 1,603 332 1,935 131 1,550 Residential 1,540 632 678 1,310 52 1,514 Consumer and other 9 9 — 9 — 9 Total $ 19,320 $ 6,283 $ 7,544 $ 13,827 $ 1,755 $ 18,644 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 The following table presents details for past due and impaired loans: Three months ended June 30, Six months ended June 30, (in thousands) 2017 2016 2017 2016 Total interest income that would have been recognized under original terms $ 340 $ 329 $ 655 $ 477 Total cash received and recognized as interest income on non-accrual loans 16 44 39 50 Total interest income recognized on impaired loans 14 25 47 31 There were no loans over 90 days past due and still accruing interest at June 30, 2017 or December 31, 2016 . The recorded investment in impaired loans by category at June 30, 2017 and December 31, 2016 , is as follows: June 30, 2017 (in thousands) Non-accrual Restructured Total Commercial and industrial $ 9,608 $ 677 $ 10,285 Real estate: Commercial - investor owned 288 — 288 Commercial - owner occupied — — — Construction and land development 1,935 — 1,935 Residential 1,310 — 1,310 Consumer and other 9 — 9 Total $ 13,150 $ 677 $ 13,827 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 The recorded investment by category for the Portfolio loans that have been restructured during the three and six months ended June 30, 2017 and 2016 , is as follows: Three months ended June 30, 2017 Three months ended June 30, 2016 (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 $ 676 $ 676 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 1 $ 676 $ 676 2 $ 2,320 $ 2,320 Six months ended June 30, 2017 Six months ended June 30, 2016 (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 $ 676 $ 676 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 1 $ 676 $ 676 4 $ 2,609 $ 2,609 As of June 30, 2017 , the Company had $0.7 million specific reserves allocated to loans that have been restructured. During the three and six months ended June 30, 2016 , there were no portfolio loans that subsequently defaulted. Portfolio loans restructured that subsequently defaulted during the three and six months ended June 30, 2017 , are as follows: Three months ended June 30, 2017 Six months ended June 30, 2017 (in thousands, except for number of loans) Number of loans Recorded Balance Number of loans Recorded Balance Commercial and industrial 2 $ 343 2 $ 343 Real estate: Commercial - investor owned — — — — Commercial - owner occupied — — — — Construction and land development — — — — Residential 1 5 1 5 Consumer and other — — — — Total 3 $ 348 3 $ 348 The aging of the recorded investment in past due loans by portfolio class and category at June 30, 2017 and December 31, 2016 is shown below. June 30, 2017 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 936 $ — $ 936 $ 1,794,731 $ 1,795,667 Real estate: Commercial - investor owned 205 — 205 711,497 711,702 Commercial - owner occupied — — — 523,185 523,185 Construction and land development 47 1,489 1,536 281,690 283,226 Residential 836 621 1,457 344,438 345,895 Consumer and other 11 9 20 150,775 150,795 Total $ 2,035 $ 2,119 $ 4,154 $ 3,806,316 $ 3,810,470 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 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 loans by portfolio class and category at June 30, 2017 , which is based upon the most recent analysis performed, and December 31, 2016 is as follows: June 30, 2017 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,656,173 $ 67,262 $ 72,232 $ — $ 1,795,667 Real estate: Commercial - investor owned 692,743 14,955 4,004 — 711,702 Commercial - owner occupied 483,183 32,800 7,202 — 523,185 Construction and land development 278,365 2,730 2,131 — 283,226 Residential 335,818 2,743 7,334 — 345,895 Consumer and other 149,060 375 1,360 — 150,795 Total $ 3,595,342 $ 120,865 $ 94,263 $ — $ 3,810,470 December 31, 2016 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) 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 |