Loans | Loans Loans Receivable, Net Loans receivable consisted of the following as of the dates indicated: September 30, 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 $ 819,604 $ 2,470 $ 822,074 $ 735,501 $ 4,849 $ 740,350 Hospitality 618,355 3,925 622,280 539,345 4,080 543,425 Gas station 271,552 2,833 274,385 319,363 4,292 323,655 Other (2) 1,088,687 5,147 1,093,834 973,243 5,418 978,661 Construction 67,439 — 67,439 23,387 — 23,387 Residential property 329,695 980 330,675 234,879 1,157 236,036 Total real estate loans 3,195,332 15,355 3,210,687 2,825,718 19,796 2,845,514 Commercial and industrial loans: Commercial term 144,754 135 144,889 152,602 171 152,773 Commercial lines of credit 145,738 — 145,738 128,224 — 128,224 International loans 29,029 — 29,029 31,879 — 31,879 Total commercial and industrial loans 319,521 135 319,656 312,705 171 312,876 Consumer loans (3) 22,266 50 22,316 24,879 47 24,926 Loans receivable 3,537,119 15,540 3,552,659 3,163,302 20,014 3,183,316 Allowance for loans losses (33,439 ) (5,533 ) (38,972 ) (37,494 ) (5,441 ) (42,935 ) Loans receivable, net $ 3,503,680 $ 10,007 $ 3,513,687 $ 3,125,808 $ 14,573 $ 3,140,381 (1) Includes owner-occupied property loans of $715.9 million and $737.5 million as of September 30, 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 $19.3 million and $21.8 million as of September 30, 2016 and December 31, 2015 , respectively. Accrued interest on loans receivable was $7.5 million and $7.9 million at September 30, 2016 and December 31, 2015 , respectively. At September 30, 2016 and December 31, 2015 , loans receivable of $1.0 billion and $557.7 million , respectively, were pledged to secure borrowing facilities 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 September 30, 2016 and 2015 : Real Estate Commercial and Industrial Total Non-PCI (in thousands) September 30, 2016 Loans held for sale, at beginning of period $ 9,293 $ 3,540 $ 12,833 Originations 11,272 6,417 17,689 Sales (15,968 ) (8,122 ) (24,090 ) Principal payoffs and amortization (2 ) (5 ) (7 ) Loans held for sale, at end of period $ 4,595 $ 1,830 $ 6,425 September 30, 2015 Loans held for sale, at beginning of period $ 2,067 $ 2,091 $ 4,158 Originations 13,867 7,464 21,331 Sales (12,199 ) (8,408 ) (20,607 ) Principal payoffs and amortization (3 ) (8 ) (11 ) Loans held for sale, at end of period $ 3,732 $ 1,139 $ 4,871 The following table includes the activity for loans held for sale (excluding PCI loans) by portfolio segment for the nine months ended September 30, 2016 and 2015 : Real Estate Commercial and Industrial Total Non-PCI (in thousands) September 30, 2016 Loans held for sale, at beginning of period $ 840 $ 2,034 $ 2,874 Originations 40,120 20,128 60,248 Sales (36,361 ) (20,304 ) (56,665 ) Principal payoffs and amortization (4 ) (28 ) (32 ) Loans held for sale, at end of period $ 4,595 $ 1,830 $ 6,425 September 30, 2015 Loans held for sale, at beginning of period $ 3,323 $ 2,128 $ 5,451 Originations 37,601 21,672 59,273 Reclassification from loans receivable 360 — 360 Sales (37,534 ) (22,616 ) (60,150 ) Principal payoffs and amortization (18 ) (45 ) (63 ) Loans held for sale, at end of period $ 3,732 $ 1,139 $ 4,871 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 September 30, 2016 September 30, 2015 Non-PCI Loans PCI Loans Total Non-PCI Loans PCI Loans Total (in thousands) Allowance for loan losses: Balance at beginning of period $ 34,259 $ 5,448 $ 39,707 $ 49,468 $ 1,352 $ 50,820 Charge-offs (111 ) (5 ) (116 ) (1,748 ) — (1,748 ) Recoveries on loans previously charged off 831 — 831 992 — 992 Net loan (charge-offs) recoveries 720 (5 ) 715 (756 ) — (756 ) (Negative provision) provision (1,540 ) 90 (1,450 ) (5,490 ) 1,786 (3,704 ) Balance at end of period $ 33,439 $ 5,533 $ 38,972 $ 43,222 $ 3,138 $ 46,360 As of and for the Nine Months Ended September 30, 2016 September 30, 2015 Non-PCI Loans PCI Loans Total Non-PCI Loans PCI Loans Total (in thousands) Allowance for loan losses: Balance at beginning of period $ 37,494 $ 5,441 $ 42,935 $ 51,640 $ 1,026 $ 52,666 Charge-offs (1,410 ) (142 ) (1,552 ) (3,004 ) — (3,004 ) Recoveries on loans previously charged off 2,079 — 2,079 4,477 — 4,477 Net loan (charge-offs) recoveries 669 (142 ) 527 1,473 — 1,473 (Negative provision) provision (4,724 ) 234 (4,490 ) (9,891 ) 2,112 (7,779 ) Balance at end of period $ 33,439 $ 5,533 $ 38,972 $ 43,222 $ 3,138 $ 46,360 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 September 30, 2016 and 2015 : Real Estate Commercial and Industrial Consumer Unallocated Total (in thousands) September 30, 2016 Allowance for loan losses on Non-PCI loans: Beginning balance $ 28,116 $ 5,502 $ 242 $ 399 $ 34,259 Charge-offs (18 ) (93 ) — — (111 ) Recoveries on loans previously charged off 337 494 — — 831 Negative provision (479 ) (622 ) (40 ) (399 ) (1,540 ) Ending balance $ 27,956 $ 5,281 $ 202 $ — $ 33,439 Ending balance: individually evaluated for impairment $ 2,723 $ 495 $ — $ — $ 3,218 Ending balance: collectively evaluated for impairment $ 25,233 $ 4,786 $ 202 $ — $ 30,221 Non-PCI loans receivable: Ending balance $ 3,195,332 $ 319,521 $ 22,266 $ — $ 3,537,119 Ending balance: individually evaluated for impairment $ 18,522 $ 4,705 $ 680 $ — $ 23,907 Ending balance: collectively evaluated for impairment $ 3,176,810 $ 314,816 $ 21,586 $ — $ 3,513,212 Allowance for loan losses on PCI loans: Beginning balance $ 5,400 $ 41 $ 7 $ — $ 5,448 Charge-offs (5 ) — — — (5 ) Provision 89 1 — — 90 Ending balance: acquired with deteriorated credit quality $ 5,484 $ 42 $ 7 $ — $ 5,533 PCI loans receivable $ 15,355 $ 135 $ 50 $ — $ 15,540 September 30, 2015 Allowance for loan losses on Non-PCI loans: Beginning balance $ 39,898 $ 8,245 $ 172 $ 1,153 $ 49,468 Charge-offs (334 ) (1,414 ) — — (1,748 ) Recoveries on loans previously charged off 745 244 3 — 992 (Negative provision) provision (5,867 ) 700 (78 ) (245 ) (5,490 ) Ending balance $ 34,442 $ 7,775 $ 97 $ 908 $ 43,222 Ending balance: individually evaluated for impairment $ 3,500 $ 846 $ — $ — $ 4,346 Ending balance: collectively evaluated for impairment $ 30,942 $ 6,929 $ 97 $ 908 $ 38,876 Non-PCI loans receivable: Ending balance $ 2,714,645 $ 280,591 $ 24,691 $ — $ 3,019,927 Ending balance: individually evaluated for impairment $ 28,372 $ 7,851 $ 1,689 $ — $ 37,912 Ending balance: collectively evaluated for impairment $ 2,686,273 $ 272,740 $ 23,002 $ — $ 2,982,015 Allowance for loan losses on PCI loans: Beginning balance $ 1,289 $ 63 $ — $ — $ 1,352 Provision (negative provision) 1,830 (46 ) 2 — 1,786 Ending balance: acquired with deteriorated credit quality $ 3,119 $ 17 $ 2 $ — $ 3,138 PCI loans receivable $ 24,909 $ 193 $ 43 $ — $ 25,145 The following table details the information on the allowance for loan losses by portfolio segment as of and for the nine months ended September 30, 2016 and 2015 : Real Estate Commercial and Industrial Consumer Unallocated Total (in thousands) September 30, 2016 Allowance for loan losses on Non-PCI loans: Beginning balance $ 29,800 $ 7,081 $ 242 $ 371 $ 37,494 Charge-offs (709 ) (701 ) — — (1,410 ) Recoveries on loans previously charged off 527 1,499 53 — 2,079 Negative provision (1,662 ) (2,598 ) (93 ) (371 ) (4,724 ) Ending balance $ 27,956 $ 5,281 $ 202 $ — $ 33,439 Ending balance: individually evaluated for impairment $ 2,723 $ 495 $ — $ — $ 3,218 Ending balance: collectively evaluated for impairment $ 25,233 $ 4,786 $ 202 $ — $ 30,221 Non-PCI loans receivable: Ending balance $ 3,195,332 $ 319,521 $ 22,266 $ — $ 3,537,119 Ending balance: individually evaluated for impairment $ 18,522 $ 4,705 $ 680 $ — $ 23,907 Ending balance: collectively evaluated for impairment $ 3,176,810 $ 314,816 $ 21,586 $ — $ 3,513,212 Allowance for loan losses on PCI loans: Beginning balance $ 5,397 $ 42 $ 2 $ — $ 5,441 Charge-offs (142 ) — — — (142 ) Provision 229 — 5 — 234 Ending balance: acquired with deteriorated credit quality $ 5,484 $ 42 $ 7 $ — $ 5,533 PCI loans receivable $ 15,355 $ 135 $ 50 $ — $ 15,540 September 30, 2015 Allowance for loan losses on Non-PCI loans: Beginning balance $ 41,194 $ 9,142 $ 220 $ 1,084 $ 51,640 Charge-offs (435 ) (2,569 ) — — (3,004 ) Recoveries on loans previously charged off 2,040 2,434 3 — 4,477 Negative provision (8,357 ) (1,232 ) (126 ) (176 ) (9,891 ) Ending balance $ 34,442 $ 7,775 $ 97 $ 908 $ 43,222 Ending balance: individually evaluated for impairment $ 3,500 $ 846 $ — $ — $ 4,346 Ending balance: collectively evaluated for impairment $ 30,942 $ 6,929 $ 97 $ 908 $ 38,876 Non-PCI loans receivable: Ending balance $ 2,714,645 $ 280,591 $ 24,691 $ — $ 3,019,927 Ending balance: individually evaluated for impairment $ 28,372 $ 7,851 $ 1,689 $ — $ 37,912 Ending balance: collectively evaluated for impairment $ 2,686,273 $ 272,740 $ 23,002 $ — $ 2,982,015 Allowance for loan losses on PCI loans: Beginning balance $ 895 $ 131 $ — $ — $ 1,026 Provision (negative provision) 2,224 (114 ) 2 — 2,112 Ending balance: acquired with deteriorated credit quality $ 3,119 $ 17 $ 2 $ — $ 3,138 PCI loans receivable $ 24,909 $ 193 $ 43 $ — $ 25,145 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 its 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 September 30, 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) September 30, 2016 Real estate loans: Commercial property Retail $ 811,506 $ 3,608 $ 4,490 $ 819,604 Hospitality 597,533 4,811 16,011 618,355 Gas station 263,947 1,917 5,688 271,552 Other 1,080,597 1,701 6,389 1,088,687 Construction 67,439 — — 67,439 Residential property 329,159 — 536 329,695 Commercial and industrial loans: Commercial term 139,999 1,980 2,775 144,754 Commercial lines of credit 145,535 195 8 145,738 International loans 26,649 2,380 — 29,029 Consumer loans 21,309 — 957 22,266 Total Non-PCI loans $ 3,483,673 $ 16,592 $ 36,854 $ 3,537,119 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 (in thousands) September 30, 2016 Real estate loans: Commercial property Retail $ 300 $ — $ 223 $ 523 $ 819,081 $ 819,604 Hospitality 489 47 1,607 2,143 616,212 618,355 Gas station — 662 3,433 4,095 267,457 271,552 Other (1 ) 627 1,236 1,862 1,086,825 1,088,687 Construction — — — — 67,439 67,439 Residential property — — 101 101 329,594 329,695 Commercial and industrial loans: Commercial term 617 18 246 881 143,873 144,754 Commercial lines of credit 176 — 8 184 145,554 145,738 International loans — — — — 29,029 29,029 Consumer loans 90 92 — 182 22,084 22,266 Total Non-PCI loans $ 1,671 $ 1,446 $ 6,854 $ 9,971 $ 3,527,148 $ 3,537,119 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 There were no loans that were 90 days or more past due and accruing interest as of September 30, 2016 and 2015. Impaired Loans Loans are considered impaired when the Bank will be unable to collect all interest and principal payments per the 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 (in thousands) September 30, 2016 Real estate loans: Commercial property Retail $ 1,976 $ 2,028 $ 1,813 $ 163 $ 4 Hospitality 3,060 3,595 2,794 266 2,542 Gas station 4,496 5,144 4,496 — — Other 6,491 7,203 5,790 701 177 Residential property 2,499 2,550 2,499 — — Commercial and industrial loans: Commercial term 4,697 4,767 1,246 3,451 495 Commercial lines of credit 8 112 8 — — Consumer loans 680 746 680 — — Total Non-PCI loans $ 23,907 $ 26,145 $ 19,326 $ 4,581 $ 3,218 December 31, 2015 Real estate loans: Commercial property Retail $ 2,597 $ 2,892 $ 2,435 $ 162 $ 27 Hospitality 7,168 7,538 2,873 4,295 3,068 Gas station 5,393 5,815 4,400 993 112 Other 9,288 10,810 7,219 2,069 647 Residential property 2,895 3,081 2,608 287 4 Commercial and industrial loans: Commercial term 5,257 5,621 1,858 3,399 457 Commercial lines of credit 381 493 280 101 100 International loans 1,215 1,215 647 568 30 Consumer loans 1,665 1,898 1,665 — — Total Non-PCI loans $ 35,859 $ 39,363 $ 23,985 $ 11,874 $ 4,445 Three Months Ended Nine Months Ended Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (in thousands) September 30, 2016 Real estate loans: Commercial property Retail $ 1,985 $ 31 $ 2,430 $ 117 Hospitality 3,222 66 4,429 367 Gas station 4,557 134 4,772 395 Other 6,541 138 7,438 533 Residential property 2,512 28 2,606 85 Commercial and industrial loans: Commercial term 4,792 71 5,032 235 Commercial lines of credit 15 3 29 12 International loans — — 420 — Consumer loans 682 7 688 22 Total Non-PCI loans $ 24,306 $ 478 $ 27,844 $ 1,766 September 30, 2015 Real estate loans: Commercial property Retail $ 2,635 $ 46 $ 4,301 $ 244 Hospitality 6,151 143 6,517 443 Gas station 6,298 117 7,668 399 Other 9,967 202 10,505 606 Residential property 2,655 28 2,815 88 Commercial and industrial loans: Commercial term 5,918 86 7,062 282 Commercial lines of credit 901 4 1,804 40 International loans 1,236 — 1,259 — Consumer loans 1,695 17 1,779 51 Total Non-PCI loans $ 37,456 $ 643 $ 43,710 $ 2,153 The following is a summary of interest foregone on impaired loans (excluding PCI loans) for the periods indicated: Three Months Ended Nine Months Ended 2016 2015 2016 2015 (in thousands) Interest income that would have been recognized had impaired loans performed in accordance with their original terms $ 695 $ 1,444 $ 2,306 $ 3,361 Less: Interest income recognized on impaired loans (478 ) (643 ) (1,766 ) (2,153 ) Interest foregone on impaired loans $ 217 $ 801 $ 540 $ 1,208 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: September 30, 2016 December 31, 2015 (in thousands) Real estate loans: Commercial property Retail $ 397 $ 946 Hospitality 2,095 5,790 Gas station 4,343 2,774 Other 2,421 4,068 Residential property 244 1,386 Commercial and industrial loans: Commercial term 1,038 2,193 Commercial lines of credit 8 450 Consumer loans 402 1,511 Total nonaccrual Non-PCI loans $ 10,948 $ 19,118 The following table details nonperforming assets (excluding PCI loans) as of the dates indicated: September 30, 2016 December 31, 2015 (in thousands) Nonaccrual Non-PCI loans $ 10,948 $ 19,118 Loans 90 days or more past due and still accruing — — Total nonperforming Non-PCI loans 10,948 19,118 OREO 10,971 8,511 Total nonperforming assets $ 21,919 $ 27,629 As of September 30, 2016 , OREO consisted of 15 properties with a combined carrying value of $11.0 million . Of the $11.0 million , $5.8 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 $7.4 million OREO acquired in the CBI acquisition or 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 September 30, 2016 and December 31, 2015 : Nonaccrual TDRs Accrual TDRs Deferral Deferral Reduction Extension Total Deferral Deferral Reduction Extension Total (in thousands) September 30, 2016 Real estate loans: Commercial property Retail $ — $ — $ — $ 140 $ 140 $ — $ — $ 1,238 $ — $ 1,238 Hospitality 1,319 — — — 1,319 — — — — — Gas station 854 — — — 854 — — — — — Other 394 658 158 — 1,210 2,716 — 296 1,349 4,361 Residential property — — — — — 789 — — 291 1,080 Commercial and industrial loans: Commercial term 155 6 216 447 824 26 202 2,496 723 3,447 Commercial lines of credit — — — 8 8 — — — — — Consumer loans — — — — — 250 121 — 371 Total Non-PCI TDR loans $ 2,722 $ 664 $ 374 $ 595 $ 4,355 $ 3,781 $ 202 $ 4,151 $ 2,363 $ 10,497 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 September 30, 2016 and December 31, 2015 , total TDRs were $14.9 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 September 30, 2016 and December 31, 2015 , $595,000 and $1.0 million , respectively, of allowance 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 September 30, 2016 and 2015 : September 30, 2016 September 30, 2015 Number of Pre- Post- Number of Pre- Post- (in thousands, except number of loans) Real estate loans: Commercial property Retail (1) — $ — $ — 1 $ 1,230 $ 1,228 Other (2) — — — 1 412 412 Commercial and industrial loans: Commercial term (3) 1 100 89 5 420 396 Total Non-PCI TDR loans 1 $ 100 $ 89 7 $ 2,062 $ 2,036 (1) Includes a modification of $1.2 million through a reduction of principal or accrued interest for the three months ended September 30, 2015 . (2) Includes a modification of $412,000 through a payment deferral for the three months ended September 30, 2015 . (3) Includes a modification of $89,000 through a reduction of principal or accrued interest for the three months ended September 30, 2016 , and modifications of $31,000 through a reduction of principal or accrued interest, $71,000 through payment deferrals and $293,000 through extensions of maturity for the three months ended September 30, 2015 . The following table details TDRs (excluding PCI loans), disaggregated by loan class, for the nine months ended September 30, 2016 and 2015 : September 30, 2016 September 30, 2015 Number of Pre- Post- Number of Pre- Post- (in thousands, except number of loans) Real estate loans: Commercial property Retail (1) 1 $ 21 $ 23 1 $ 1,248 $ 1,228 Other (2) — — — 2 731 725 Commercial and industrial loans: Commercial term (3) 4 335 296 10 1,052 858 Consumer loans (4) — — — 1 250 250 Total Non-PCI TDR loans 5 $ 356 $ 319 14 $ 3,281 $ 3,061 (1) Includes a modification of $23,000 through a reduction of principal or accrued interest for the nine months ended September 30, 2016 , and a modification of $1.2 million through a reduction of principal or accrued interest for the nine months ended September 30, 2015 . (2) Includes modifications of $725,000 through a payment deferral for the nine months ended September 30, 2015 . (3) Includes modifications of $154,000 through payment deferrals, $89,000 through a reduction of principal or accrued interest and $53,000 through an extension of maturity for the nine months ended September 30, 2016 , and modifications of $749,000 through extensions of maturity, $38,000 through payment deferrals and $71,000 through a reduction of principal or accrued interest for the nine months ended September 30, 2015 . (4) Includes a modification of $250,000 through a payment deferral for the nine months ended September 30, 2015 . 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 September 30, 2016 and 2015 , respectively: September 30, 2016 September 30, 2015 Number of Loans Recorded Investment Number of Loans Recorded Investment (in thousands, except number of loans) Real estate loans: Commercial property Hospitality — $ — 1 $ 466 Commercial and industrial loans: Commercial term 1 53 — — Total Non-PCI TDR loans 1 $ 53 1 $ 466 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 nine months ended September 30, 2016 and 2015 , respectively: September 30, 2016 September 30, 2015 Number of Loans Recorded Investment Number of Loans Recorded Investment (in thousands, except number of loans) Real estate loans: Commercial property Hospitality — $ — 1 $ 466 Commercial and industrial loans: Commercial term 1 53 — — Total Non-PCI TDR loans 1 $ 53 1 $ 466 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 $ 19.6 million and $30.9 million , respectively as of September 30, 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. 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 collatera |