Loans | Loans Loans Receivable, Net Loans receivable consisted of the following as of the dates indicated: March 31, 2016 December 31, 2015 Non-PCI Loans PCI Loans Total Non-PCI Loans PCI Loans Total (in thousands) Real estate loans: Commercial property (1) Retail $ 772,454 $ 4,264 $ 776,718 $ 735,501 $ 4,849 $ 740,350 Hospitality 544,708 4,099 548,807 539,345 4,080 543,425 Gas station 313,571 4,613 318,184 319,363 4,292 323,655 Other (2) 1,053,306 5,495 1,058,801 973,243 5,418 978,661 Construction 27,017 — 27,017 23,387 — 23,387 Residential property 255,334 1,154 256,488 234,879 1,157 236,036 Total real estate loans 2,966,390 19,625 2,986,015 2,825,718 19,796 2,845,514 Commercial and industrial loans: Commercial term 140,559 161 140,720 152,602 171 152,773 Commercial lines of credit 124,962 — 124,962 128,224 — 128,224 International loans 29,950 — 29,950 31,879 — 31,879 Total commercial and industrial loans 295,471 161 295,632 312,705 171 312,876 Consumer loans (3) 24,783 49 24,832 24,879 47 24,926 Loans receivable 3,286,644 19,835 3,306,479 3,163,302 20,014 3,183,316 Allowance for loans losses (35,381 ) (5,645 ) (41,026 ) (37,494 ) (5,441 ) (42,935 ) Loans receivable, net $ 3,251,263 $ 14,190 $ 3,265,453 $ 3,125,808 $ 14,573 $ 3,140,381 (1) Includes owner-occupied property loans of $1.23 billion and $1.20 billion as of March 31, 2016 and December 31, 2015 , respectively. (2) Includes, among other property types, mixed-use, apartment, office, industrial, faith-based facilities and warehouse; the remaining real estate categories represent less than one percent of the Bank's total loans. (3) Consumer loans include home equity lines of credit of $21.7 million and $21.8 million as of March 31, 2016 and December 31, 2015, respectively. Accrued interest on loans receivable was $7.1 million and $7.9 million at March 31, 2016 and December 31, 2015 , respectively. At March 31, 2016 and December 31, 2015 , loans receivable of $518.9 million and $557.7 million , respectively, were pledged to secure advances from the FHLB and the FRB's discount window. Loans Held for Sale The following table includes the activity for loans held for sale (excluding PCI loans) by portfolio segment for the three months ended March 31, 2016 and 2015 : Real Estate Commercial and Industrial Total Non-PCI (in thousands) March 31, 2016 Loans held for sale, at beginning of period $ 840 $ 2,034 $ 2,874 Originations 6,473 5,679 12,152 Sales (5,488 ) (6,935 ) (12,423 ) Principal payoffs and amortization (1 ) (19 ) (20 ) Loans held for sale, at end of period $ 1,824 $ 759 $ 2,583 March 31, 2015 Loans held for sale, at beginning of period $ 3,323 $ 2,128 $ 5,451 Originations 16,927 6,181 23,108 Sales (13,014 ) (6,840 ) (19,854 ) Principal payoffs and amortization (10 ) (18 ) (28 ) Loans held for sale, at end of period $ 7,226 $ 1,451 $ 8,677 There was no reclassification of Non-PCI loans receivable to loans held for sale during the three months ended March 31, 2016 and 2015 . Allowance for Loan Losses Activity in the allowance for loan losses was as follows for the periods indicated: As of and for the Three Months Ended March 31, 2016 March 31, 2015 Non-PCI Loans PCI Loans Total Non-PCI Loans PCI Loans Total Allowance for loan losses: Balance at beginning of period $ 37,494 $ 5,441 $ 42,935 $ 51,640 $ 1,026 52,666 Charge-offs (637 ) — (637 ) (34 ) (52 ) (86 ) Recoveries on loans previously charged off 253 — 253 1,692 352 2,044 Net loan (charge-offs) recoveries (384 ) — (384 ) 1,658 300 1,958 (Negative provision) provision (1,729 ) 204 (1,525 ) (1,783 ) 110 (1,673 ) Balance at end of period $ 35,381 $ 5,645 $ 41,026 $ 51,515 $ 1,436 52,951 Management believes the allowance for loan losses is appropriate to provide for probable losses inherent in the loan portfolio. However, the allowance is an estimate that is inherently uncertain and depends on the outcome of future events. Management’s estimates are based on previous loss experience; volume, growth and composition of the loan portfolio; the value of collateral; and current economic conditions. Our lending is concentrated generally in real estate, commercial, SBA and trade finance lending to small and middle market businesses primarily in California, Texas and Illinois. The following table details the information on the allowance for loan losses by portfolio segment as of and for the three months ended March 31, 2016 and 2015 : Real Estate Commercial and Industrial Consumer Unallocated Total (in thousands) March 31, 2016 Allowance for loan losses on Non-PCI loans: Beginning balance $ 29,800 $ 7,081 $ 242 $ 371 $ 37,494 Charge-offs (535 ) (102 ) — — (637 ) Recoveries on loans previously charged off 93 160 — — 253 (Negative provision) provision (1,080 ) (850 ) 13 188 (1,729 ) Ending balance $ 28,278 $ 6,289 $ 255 $ 559 $ 35,381 Ending balance: individually evaluated for impairment $ 3,334 $ 759 $ — $ — $ 4,093 Ending balance: collectively evaluated for impairment $ 24,944 $ 5,530 $ 255 $ 559 $ 31,288 Non-PCI loans receivable: Ending balance $ 2,966,390 $ 295,471 $ 24,783 $ — $ 3,286,644 Ending balance: individually evaluated for impairment $ 25,595 $ 6,441 $ 700 $ — $ 32,736 Ending balance: collectively evaluated for impairment $ 2,940,795 $ 289,030 $ 24,083 $ — $ 3,253,908 Allowance for loan losses on PCI loans: Beginning balance $ 5,397 $ 42 $ 2 $ — $ 5,441 Provision 202 2 — — 204 Ending balance: acquired with deteriorated credit quality $ 5,599 $ 44 $ 2 $ — $ 5,645 PCI loans receivable $ 19,625 $ 161 $ 49 $ — $ 19,835 March 31, 2015 Allowance for loan losses on Non-PCI loans: Beginning balance $ 41,194 $ 9,142 $ 220 $ 1,084 $ 51,640 Charge-offs — (34 ) — — (34 ) Recoveries on loans previously charged off 32 1,660 — — 1,692 Provision (negative provision) 1,324 (2,982 ) (35 ) (90 ) (1,783 ) Ending balance $ 42,550 $ 7,786 $ 185 $ 994 $ 51,515 Ending balance: individually evaluated for impairment $ 3,386 $ 1,913 $ — $ — $ 5,299 Ending balance: collectively evaluated for impairment $ 39,164 $ 5,873 $ 185 $ 994 $ 46,216 Non-PCI loans receivable: Ending balance $ 2,499,323 $ 250,351 $ 25,942 $ — $ 2,775,616 Ending balance: individually evaluated for impairment $ 33,537 $ 11,570 $ 1,823 $ — $ 46,930 Ending balance: collectively evaluated for impairment $ 2,465,786 $ 238,781 $ 24,119 $ — $ 2,728,686 Allowance for loan losses on PCI loans: Beginning balance $ 895 $ 131 $ — $ — $ 1,026 Charge-offs (52 ) — — — (52 ) Recoveries on loans previously charged off — 352 — — 352 Provision (negative provision) 475 (365 ) — — 110 Ending balance: acquired with deteriorated credit quality $ 1,318 $ 118 $ — $ — $ 1,436 PCI loans receivable $ 40,616 $ 281 $ 44 $ — $ 40,941 Loan Quality Indicators As part of the on-going monitoring of the credit quality of our loan portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade, from 0 to 8, for each loan in our loan portfolio. Third party loan reviews are performed throughout the year. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows: Pass and Pass-Watch: Pass and pass-watch loans, grades 0-4, are in compliance in all respects with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under “Special Mention,” “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It incorporates all performing loans with no credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans. Special Mention: A special mention credit, grade 5, has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified. Substandard: A substandard credit, grade 6, has a well-defined weakness that jeopardizes the liquidation of the debt. A credit graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected. Doubtful: A doubtful credit, grade 7, is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the credit, and therefore the amount or timing of a possible loss cannot be determined at the current time. Loss: A loan classified as loss, grade 8, is considered uncollectible and of such little value that their continuance as an active bank asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as loss are charged off in a timely manner. Under regulatory guidance, loans graded special mention or worse are considered criticized loans and loans graded substandard or worse are considered classified loans. As of March 31, 2016 and December 31, 2015 , pass/pass-watch, special mention and classified loans (excluding PCI loans), disaggregated by loan class, were as follows: Pass/Pass-Watch Special Mention Classified Total (in thousands) March 31, 2016 Real estate loans: Commercial property Retail $ 764,216 $ 4,826 $ 3,412 $ 772,454 Hospitality 526,393 6,636 11,679 544,708 Gas station 306,330 3,772 3,469 313,571 Other 1,039,280 6,352 7,674 1,053,306 Construction 27,017 — — 27,017 Residential property 254,407 52 875 255,334 Commercial and industrial loans: Commercial term 134,120 2,366 4,073 140,559 Commercial lines of credit 124,659 195 108 124,962 International loans 27,940 2,010 — 29,950 Consumer loans 23,715 81 987 24,783 Total Non-PCI loans $ 3,228,077 $ 26,290 $ 32,277 $ 3,286,644 December 31, 2015 Real estate loans: Commercial property Retail $ 722,483 $ 9,519 $ 3,499 $ 735,501 Hospitality 517,462 9,604 12,279 539,345 Gas station 309,598 5,897 3,868 319,363 Other 953,839 8,662 10,742 973,243 Construction 23,387 — — 23,387 Residential property 232,862 58 1,959 234,879 Commercial and industrial loans: Commercial term 145,773 2,370 4,459 152,602 Commercial lines of credit 127,579 195 450 128,224 International loans 29,719 2,160 — 31,879 Consumer loans 22,707 91 2,081 24,879 Total Non-PCI loans $ 3,085,409 $ 38,556 $ 39,337 $ 3,163,302 The following is an aging analysis of loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated: 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Accruing 90 Days or More Past Due (in thousands) March 31, 2016 Real estate loans: Commercial property Retail $ — $ 201 $ 884 $ 1,085 $ 771,369 $ 772,454 $ — Hospitality 1,201 1,610 3,299 6,110 538,598 544,708 — Gas station 2,503 711 1,473 4,687 308,884 313,571 — Other 428 1,454 364 2,246 1,051,060 1,053,306 — Construction — — — — 27,017 27,017 — Residential property — — 394 394 254,940 255,334 — Commercial and industrial loans: Commercial term 199 314 1,084 1,597 138,962 140,559 — Commercial lines of credit — — 108 108 124,854 124,962 — International loans — — — — 29,950 29,950 — Consumer loans 236 — — 236 24,547 24,783 — Total Non-PCI loans $ 4,567 $ 4,290 $ 7,606 $ 16,463 $ 3,270,181 $ 3,286,644 $ — December 31, 2015 Real estate loans: Commercial property Retail $ 441 $ 343 $ 399 $ 1,183 $ 734,318 $ 735,501 $ — Hospitality 1,250 49 3,840 5,139 534,206 539,345 — Gas station 959 406 1,517 2,882 316,481 319,363 — Other 1,144 661 1,636 3,441 969,802 973,243 — Construction — — — — 23,387 23,387 — Residential property — — 396 396 234,483 234,879 — Commercial and industrial loans: Commercial term 420 253 458 1,131 151,471 152,602 — Commercial lines of credit 58 — 392 450 127,774 128,224 — International loans — 497 — 497 31,382 31,879 — Consumer loans 250 5 — 255 24,624 24,879 — Total Non-PCI loans $ 4,522 $ 2,214 $ 8,638 $ 15,374 $ 3,147,928 $ 3,163,302 $ — Impaired Loans Loans are considered impaired when the Bank will be unable to collect all interest and principal payments per contractual terms of the loan agreement, unless the loan is well-collateralized and in the process of collection; or they are classified as Troubled Debt Restructurings (“TDRs”) because, due to the financial difficulties of the borrowers, we have granted concessions to the borrowers we would not otherwise consider; or when current information or events make it unlikely to collect in full according to the contractual terms of the loan agreements; or there is a deterioration in the borrower’s financial condition that raises uncertainty as to timely collection of either principal or interest; or full payment of both interest and principal is in doubt according to the original contractual terms. We evaluate loan impairment in accordance with applicable GAAP. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent, less estimated costs to sell. If the measure of the impaired loan is less than the recorded investment in the loan, the deficiency is either charged off against the allowance for loan losses or we establish a specific allocation in the allowance for loan losses. Additionally, loans that are considered impaired are specifically excluded from the quarterly migration analysis when determining the amount of the allowance for loan losses required for the period. The allowance for collateral-dependent loans is determined by calculating the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as nonperforming. We continue to monitor the collateral coverage, using recent appraisals, on these loans on a quarterly basis and adjust the allowance accordingly. The following tables provide information on impaired loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated: Recorded Unpaid With No With an Related Average Recorded Investment Interest Income Recognized (in thousands) As of or for The Period Ended Real estate loans: Commercial property Retail $ 2,838 $ 3,133 $ 2,683 $ 155 $ 59 $ 2,872 $ 41 Hospitality 6,666 7,082 3,264 3,402 2,582 6,703 154 Gas station 5,063 5,567 4,099 965 84 5,107 162 Other 8,187 9,334 6,142 2,045 605 8,249 212 Residential property 2,841 2,886 2,554 287 4 2,770 30 Commercial and industrial loans: Commercial term 5,144 5,510 1,550 3,593 726 5,213 77 Commercial lines of credit 38 135 38 — — 45 5 International loans 1,259 1,259 496 763 33 1,260 — Consumer loans 700 757 700 — — 693 8 Total Non-PCI loans $ 32,736 $ 35,663 $ 21,526 $ 11,210 $ 4,093 $ 32,912 $ 689 As of or for The Year Ended Real estate loans: Commercial property Retail $ 2,597 $ 2,892 $ 2,435 $ 162 $ 27 $ 3,878 $ 277 Hospitality 7,168 7,538 2,873 4,295 3,068 6,628 572 Gas station 5,393 5,815 4,400 993 112 7,116 436 Other 9,288 10,810 7,219 2,069 647 10,218 795 Residential property 2,895 3,081 2,608 287 4 2,839 120 Commercial and industrial loans: Commercial term 5,257 5,621 1,858 3,399 457 6,637 368 Commercial lines of credit 381 493 280 101 100 1,515 42 International loans 1,215 1,215 647 568 30 1,257 — Consumer loans 1,665 1,898 1,665 — — 1,753 73 Total Non-PCI loans $ 35,859 $ 39,363 $ 23,985 $ 11,874 $ 4,445 $ 41,841 $ 2,683 The following is a summary of interest foregone on impaired loans (excluding PCI loans) for the periods indicated: Three Months Ended March 31, 2016 March 31, 2015 (in thousands) Interest income that would have been recognized had impaired loans performed in accordance with their original terms $ 893 $ 740 Less: Interest income recognized on impaired loans (689 ) (710 ) Interest foregone on impaired loans $ 204 $ 30 There were no commitments to lend additional funds to borrowers whose loans are included in the table above. Nonaccrual Loans and Nonperforming Assets Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless management believes the loan is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s delinquency. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest payments become current and full repayment is expected. The following table details nonaccrual loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated: March 31, 2016 December 31, 2015 (in thousands) Real estate loans: Commercial property Retail $ 1,271 $ 946 Hospitality 5,277 5,790 Gas station 2,531 2,774 Other 3,565 4,068 Residential property 546 1,386 Commercial and industrial loans: Commercial term 2,557 2,193 Commercial lines of credit 108 450 Consumer loans 421 1,511 Total nonaccrual Non-PCI loans $ 16,276 $ 19,118 The following table details nonperforming assets (excluding PCI loans) as of the dates indicated: March 31, 2016 December 31, 2015 (in thousands) Nonaccrual Non-PCI loans $ 16,276 $ 19,118 Loans 90 days or more past due and still accruing — — Total nonperforming Non-PCI loans 16,276 19,118 OREO 9,411 8,511 Total nonperforming assets $ 25,687 $ 27,629 As of March 31, 2016 , OREO consisted of 17 properties with a combined carrying value of $9.4 million . Of the $9.4 million , $6.9 million were OREO acquired in the Central Bancorp Inc. ("CBI") acquisition on August 31, 2014, or were obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. As of December 31, 2015, OREO consisted of 14 properties with a combined carrying value of $8.5 million , including a $7.4 million OREO acquired in the CBI acquisition or were obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. Troubled Debt Restructurings The following table details TDRs (excluding PCI loans), disaggregated by concession type and loan type, as of March 31, 2016 and December 31, 2015 : Nonaccrual TDRs Accrual TDRs Deferral of Principal Deferral of Principal and Interest Reduction of Principal and Interest Extension of Maturity Total Deferral of Principal Deferral of Principal and Interest Reduction of Principal and Interest Extension of Maturity Total (in thousands) March 31, 2016 Real estate loans: Commercial property Retail $ — $ — $ 20 $ 328 $ 348 $ — $ — $ 1,225 $ — $ 1,225 Hospitality 1,180 18 — — 1,198 411 — — — 411 Gas station 917 — — — 917 — — — — — Other 719 804 197 3 1,723 2,780 — 314 1,372 4,466 Residential property — — — — — 801 — — 296 1,097 Commercial and industrial loans: Commercial term 42 — 1,044 622 1,708 186 211 1,522 824 2,743 Commercial lines of credit — — — 38 38 — — — — — Consumer loans — — — — — 250 — 127 — 377 Total Non-PCI TDR loans $ 2,858 $ 822 $ 1,261 $ 991 $ 5,932 $ 4,428 $ 211 $ 3,188 $ 2,492 $ 10,319 December 31, 2015 Real estate loans: Commercial property Retail $ — $ — $ — $ 344 $ 344 $ — $ — $ 1,227 $ — $ 1,227 Hospitality 1,216 28 — — 1,244 414 — — — 414 Gas station 959 — — — 959 — — — — — Other — 1,301 216 8 1,525 3,537 — 322 1,378 5,237 Residential property 689 — — — 689 — — — 299 299 Commercial and industrial loans: Commercial term 45 — 997 679 1,721 40 214 1,673 945 2,872 Commercial lines of credit 222 — — 58 280 — — — — — Consumer loans — — 116 — 116 250 — — — 250 Total Non-PCI TDR loans $ 3,131 $ 1,329 $ 1,329 $ 1,089 $ 6,878 $ 4,241 $ 214 $ 3,222 $ 2,622 $ 10,299 As of March 31, 2016 and December 31, 2015 , total TDRs were $16.3 million and $17.2 million , respectively. A debt restructuring is considered a TDR if we grant a concession, that we would not have otherwise considered to the borrower, for economic or legal reasons related to the borrower’s financial difficulties. Loans are considered to be TDRs if they were restructured through payment structure modifications such as reducing the amount of principal and interest due monthly and/or allowing for interest only monthly payments for three months or more. All TDRs are impaired and are individually evaluated for specific impairment using one of these three criteria: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent. At March 31, 2016 and December 31, 2015 , $ 0.9 million and $1.0 million , respectively, of reserves relating to these loans were included in the allowance for loan losses. The following table details TDRs (excluding PCI loans), disaggregated by loan class, for the three months ended March 31, 2016 and 2015 : March 31, 2016 March 31, 2015 Number of Pre- Post- Number of Pre- Post- (in thousands, except number of loans) Real estate loans: Commercial property Retail (1) 1 $ 21 $ 20 — $ — $ — Commercial and industrial loans: Commercial term (2) 2 214 209 4 543 508 Total Non-PCI TDR loans 3 $ 235 $ 229 4 $ 543 $ 508 (1) Includes a modification of $20,000 through a reduction of principal or accrued interest for the three months ended March 31, 2016 . (2) Includes modifications of $152,000 through payment deferrals and $57,000 through extensions of maturity for the three months ended March 31, 2016 , and modifications of $508,000 through extensions of maturity for the three months ended March 31, 2015. During the three months ended March 31, 2016 , we restructured monthly payments on three loans, with a net carrying value of $229,000 as of March 31, 2016 , through temporary payment structure modifications. For the restructured loans on accrual status, we determined that, based on the financial capabilities of the borrowers at the time of the loan restructuring and the borrowers’ past performance in the payment of debt service under the previous loan terms, performance and collection under the revised terms are probable. The following table details TDRs (excluding PCI loans) that defaulted subsequent to the modifications occurring within the previous 12 months, disaggregated by loan class, for the three months ended March 31, 2016 and 2015 , respectively: Three Months Ended March 31, 2016 March 31, 2015 Number of Loans Recorded Investment Number of Loans Recorded Investment (in thousands, except number of loans) Real estate loans: Commercial property Retail — $ — 1 $ 1,832 Gas station — — 1 1,990 Other 2 719 1 379 Commercial and industrial loans: Commercial term 1 30 — — Commercial lines of credit — — 1 124 Total Non-PCI TDR loans 3 $ 749 4 $ 4,325 Purchased Credit Impaired Loans As part of the acquisition of CBI, the Company purchased loans for which there was, at acquisition, evidence of deterioration of credit quality subsequent to origination and it was probable that all contractually required payments would not be collected. Outstanding balance of PCI loans, the undiscounted sum of all amounts including amounts deemed principal, interest, fees and penalties, were $ 29.5 million and $30.9 million , respectively as of March 31, 2016 and December 31, 2015. For PCI loans, at the time of acquisition we (i) calculated the contractual amount and timing of undiscounted principal and interest payments (the “undiscounted contractual cash flows”) and (ii) estimated the amount and timing of undiscounted expected principal and interest payments (the “undiscounted expected cash flows”). The difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loan portfolios; such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income. The excess of expected cash flows at acquisition over the initial fair value of acquired impaired loans is referred to as the “accretable yield” and is recorded as interest income over the estimated life of the loans using the effective yield. If estimated cash flows are indeterminable, the recognition of interest income will cease to be recognized. At acquisition, the Company may aggregate PCI loans into pools having common credit risk characteristics such as product type, geographic location and risk rating. Increases in expected cash flows over those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in the amount and changes in the timing of expected cash flows compared to those previously estimated decrease the accretable yield and usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. The Company removes loans from loan pools when the Company receives payment in settlement with the borrower, sells the loan, or foreclose upon the collateral securing the loan. The Company recognizes "Disposition gain on Purchased Credit Impaired Loans" when the cash proceeds or the amount received are in excess of the loan's carrying amount. The removal of the loan from the loan pool and the recognition of disposition gains do not affect the then applicable loan pool accretable yield. The following table summarizes the changes in carrying value of PCI loans during the three months ended March 31, 2016 and 2015: Carrying Amount Accretable Yield (in thousands) Balance at January 1, 2016 $ 14,573 $ (5,944 ) Accretion 421 421 Payments received (811 ) — Disposal/transfer to OREO 211 — Change in expected cash flows, net — (578 ) Provision for credit losses (204 ) — Balance at March 31, 2016 $ 14,190 $ (6,101 ) Balance at January 1, 2015 $ 43,475 $ (11,025 ) Accretion 843 843 Payments received (5,425 ) — Disposal/transfer to OREO 722 — Change in expected cash flows, net — 376 Provision for credit losses (110 ) — Balance at March 31, 2015 $ 39,505 $ (9,806 ) As of March 31, 2016 and December 31, 2015, pass/pass-watch, special mention and classified PCI loans, disaggregated by loan class, were as follows: Pass/Pass-Watch Special Mention Classified Total Allowance Total (in thousands) March 31, 2016 Real estate loans: Commercial property Retail $ — $ — $ 4,264 $ 4,264 $ 421 $ 3,843 Hospitality 184 — 3,915 4,099 — 4,099 Gas station 85 166 4,362 4,613 484 4,129 Other — — 5,495 5,495 4,497 998 Residential property 991 — 163 1,154 197 957 Commercial and industrial loans: Commercial term — — 161 161 44 117 Consumer loans — — 49 49 2 47 Total PCI loans $ 1,260 $ 166 $ 18,409 $ 19,835 $ 5,645 $ 14,190 December 31, 2015 Real estate loans: Commercial property Retail $ — $ — $ 4,849 $ 4,849 $ 269 $ 4,580 Hospitality 186 — 3,894 4,080 88 3,992 Gas station — 176 4,116 4,292 477 3,815 Other — — 5,418 5,418 4,412 1,006 Residential property 999 — 158 1,157 151 1,006 Commercial and industrial loans: Commercial term — — 171 171 42 129 Consumer loans — — 47 47 2 45 Total PCI loans $ 1,185 $ 176 $ 18,653 $ 20,014 $ 5,441 $ 14,573 Loans accounted for as PCI are generally considered accruing and performing loans as the accretable discount is accreted to interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans are classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. As of March 31, 2016 and December 31, 2015 , we had no PCI loans on nonaccrual status and included in the delinquency table below. The following table presents a summary of the borrowers' underlying payment status of PCI loans as of the dates indicated: 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Allowance Amount Total (in thousands) March 31, 2016 Real estate loans: Commercial property Retail $ 978 $ 61 $ 1,117 $ 2,156 $ 2,108 $ 4,264 $ 421 $ 3,843 Hospitality — — 160 160 3,939 4,099 — 4,099 Gas station — — 450 450 4,163 4,613 484 4,129 Other — — 4,981 4,981 514 5,495 4,497 998 Residential property — — 158 158 996 1,154 197 957 Commercial and industrial loans: Commercial term — — 6 6 155 161 44 117 Consumer loans — 12 37 49 — 49 2 47 Total PCI loans $ 978 $ 73 $ 6,909 $ 7,960 $ 11,875 $ 19,835 $ 5,645 $ 14,190 December 31, 2015 Real estate loans: Commercial property Retail $ — $ 267 $ 1,109 $ 1,376 $ 3,473 $ 4,849 $ 269 $ 4,580 Hospitality — 9 154 163 3,917 4,080 88 3,992 Gas station — — 457 457 3,835 4,292 477 3,815 Other 4 — 4,996 5,000 418 5,418 4,412 1,006 Residential property — — 158 158 999 1,157 151 1,006 Commercial and industrial loans: Commercial term — — 4 4 167 171 42 129 Consumer loans — — 47 47 — 47 2 45 Total PCI loans $ 4 $ 276 $ 6,925 $ 7,205 $ 12,809 $ 20,014 $ 5,441 $ 14,573 Below is a summary of PCI as of March 31, 2016 and December 31, 2015, respectively: Pooled PCI Loans Non-pooled PCI Loans Number of Loans Number of Pools Carrying Amount (in thousands) Percentage of Total Number of Loans Carrying Amount (in thousands) Percentage of Total Total PCI Loans (in thousands) As of March 31, 2016 Real estate loans: Commercial property 67 8 $ 17,498 94.7 % 1 $ 973 5.3 % $ 18,471 Residential property 2 2 126 10.9 % 2 1,028 89.1 % 1,154 Total real estate loans 69 10 17,624 89.8 % 3 2,001 10.2 % 19,625 Commercial and industrial loans 8 3 161 100.0 % — — — % 161 Consumer loans 1 1 49 100.0 % — — — % 49 Total acquired loans 78 14 17,834 89.9 % 3 2,001 10.1 % 19,835 Allowance for loan losses (5,325 ) (320 ) (5,645 ) Total carrying amount $ 12,509 $ 1,681 $ 14,190 Pooled PCI Loans Non-pooled PCI Loans Number of Loans Number of Pools Carrying Amount (in thousands) Percentage of Total Number of Loans Carrying Amount (in thousands) Percentage of Total Total PCI Loans (in thousands) As of December 31, 2015 Real estate loans: Commercial property 71 9 $ 17,644 94.7 % 2 $ 995 5.3 % $ 18,639 Residential property 2 2 119 10.3 % 2 1,038 89.7 % 1,157 Total real estate loans 73 11 17,763 89.7 % 4 2,033 10.3 % 19,796 Commercial and industrial loans 11 3 171 100.0 % — — — % 171 Consumer loans 1 1 47 100.0 % — — — % 47 Total acquired loans 85 15 17,981 89.8 % 4 2,033 10.2 % 20,014 Allowance for loan losses (5,136 ) (305 ) (5,441 ) Total carrying amount $ 12,845 $ 1,728 $ 14,573 |