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) September 30, 2017 December 31, 2016 Loans not accounted for as ASC 310-30 $ 3,948,676 $ 3,118,392 Loans accounted for as ASC 310-30 81,982 39,769 Total loans $ 4,030,658 $ 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 September 30, 2017 and December 31, 2016 : (in thousands) September 30, 2017 December 31, 2016 Commercial and industrial $ 1,861,285 $ 1,632,714 Real estate: Commercial - investor owned 737,986 544,808 Commercial - owner occupied 553,512 350,148 Construction and land development 302,182 194,542 Residential 339,377 240,760 Total real estate loans 1,933,057 1,330,258 Consumer and other 155,514 156,182 Loans, before unearned loan fees 3,949,856 3,119,154 Unearned loan fees, net (1,180 ) (762 ) Loans, including unearned loan fees $ 3,948,676 $ 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 methodology through September 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 Provision (provision reversal) for loan losses 1,126 376 245 305 299 71 2,422 Losses charged off (613 ) — (45 ) — (503 ) (75 ) (1,236 ) Recoveries 205 12 6 25 172 13 433 Balance at September 30, 2017 $ 26,473 $ 3,775 $ 3,246 $ 1,625 $ 2,252 $ 921 $ 38,292 (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, 2017 Allowance for loan losses - Ending balance: Individually evaluated for impairment $ 2,063 $ 120 $ — $ 186 $ 48 $ — $ 2,417 Collectively evaluated for impairment 24,410 3,655 3,246 1,439 2,204 921 35,875 Total $ 26,473 $ 3,775 $ 3,246 $ 1,625 $ 2,252 $ 921 $ 38,292 Loans - Ending balance: Individually evaluated for impairment $ 7,646 $ 544 $ 1,513 $ 323 $ 667 $ — $ 10,693 Collectively evaluated for impairment 1,853,639 737,442 551,999 301,859 338,710 154,334 3,937,983 Total $ 1,861,285 $ 737,986 $ 553,512 $ 302,182 $ 339,377 $ 154,334 $ 3,948,676 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 nonperforming loans individually evaluated for impairment by category at September 30, 2017 and December 31, 2016 , and the income recognized on impaired loans is as follows: September 30, 2017 (in thousands) Unpaid Recorded Recorded Allowance Total Related Allowance Average Commercial and industrial $ 13,981 $ 6,407 $ 1,044 $ 7,451 $ 2,020 $ 11,735 Real estate: Commercial - investor owned 562 259 285 544 120 542 Commercial - owner occupied — — — — — — Construction and land development 444 322 — 322 186 337 Residential 673 668 — 668 48 676 Consumer and other — — — — — — Total $ 15,660 $ 7,656 $ 1,329 $ 8,985 $ 2,374 $ 13,290 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 Three months ended September 30, Nine months ended September 30, (in thousands) 2017 2016 2017 2016 Total interest income that would have been recognized under original terms $ 306 $ 226 $ 961 $ 703 Total cash received and recognized as interest income on non-accrual loans 117 203 156 253 Total interest income recognized on accruing, impaired loans 8 32 55 63 There were no loans over 90 days past due and still accruing interest at September 30, 2017 or December 31, 2016 . The recorded investment in nonperforming loans by category at September 30, 2017 and December 31, 2016 , is as follows: September 30, 2017 (in thousands) Non-accrual Restructured, not on non-accrual Total Commercial and industrial $ 6,730 $ 721 $ 7,451 Real estate: Commercial - investor owned 544 — 544 Commercial - owner occupied — — — Construction and land development 322 — 322 Residential 668 — 668 Consumer and other — — — Total $ 8,264 $ 721 $ 8,985 December 31, 2016 (in thousands) Non-accrual Restructured, not on non-accrual 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 There were no portfolio loans restructured during the three months ended September 30, 2017 and 2016. The recorded investment by category for the portfolio loans that have been restructured during the nine months ended September 30, 2017 and 2016 , is as follows: Nine months ended September 30, 2017 Nine months ended September 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 September 30, 2017 , the Company had $2.2 million in specific reserves allocated to $9.5 million of loans that have been restructured. During the three and nine months ended September 30, 2016 , there were no portfolio loans that subsequently defaulted. There were no portfolio loans restructured that subsequently defaulted during the three months ended September 30, 2017 . Portfolio loans restructured that subsequently defaulted during the nine months ended September 30, 2017 , are as follows: Nine months ended September 30, 2017 (in thousands, except for number of loans) Number of loans Recorded Balance Commercial and industrial 2 $ 343 Real estate: Commercial - investor owned — — Commercial - owner occupied — — Construction and land development — — Residential 1 5 Consumer and other — — Total 3 $ 348 The aging of the recorded investment in past due loans by portfolio class and category at September 30, 2017 and December 31, 2016 is shown below. September 30, 2017 (in thousands) 30-89 Days Past Due 90 or More Past Due Total Past Due Current Total Commercial and industrial $ 9,147 $ 283 $ 9,430 $ 1,851,855 $ 1,861,285 Real estate: Commercial - investor owned 986 — 986 737,000 737,986 Commercial - owner occupied 266 — 266 553,246 553,512 Construction and land development — 323 323 301,859 302,182 Residential 485 668 1,153 338,224 339,377 Consumer and other 1,542 — 1,542 152,792 154,334 Total $ 12,426 $ 1,274 $ 13,700 $ 3,934,976 $ 3,948,676 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 September 30, 2017 , which is based upon the most recent analysis performed, and December 31, 2016 is as follows: September 30, 2017 (in thousands) Pass (1-6) Watch (7) Substandard (8) Doubtful (9) Total Commercial and industrial $ 1,708,153 $ 90,885 $ 62,247 $ — $ 1,861,285 Real estate: Commercial - investor owned 720,912 12,592 4,482 — 737,986 Commercial - owner occupied 513,939 33,249 6,324 — 553,512 Construction and land development 298,613 2,558 1,011 — 302,182 Residential 328,434 3,989 6,954 — 339,377 Consumer and other 153,113 375 846 — 154,334 Total $ 3,723,164 $ 143,648 $ 81,864 $ — $ 3,948,676 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 |