Loans and Leases | Loans and Leases The Board of Directors and management review and approve the Bank’s loan and lease policy and procedures on a regular basis to reflect issues such as regulatory and organizational structure changes, strategic planning revisions, concentrations of credit, loan and lease delinquencies and nonperforming loans and leases, problem loans and leases, and policy adjustments. Real estate loans are loans secured by liens or interest in real estate, to provide purchase, construction, and refinance on real estate properties. Commercial and industrial loans consist of commercial term loans, commercial lines of credit, and Small Business Administration (“SBA”) loans. Leases receivables include equipment finance agreements which are typically secured by the business assets being financed. Consumer loans consist of auto loans, credit cards, personal loans, and home equity lines of credit. We maintain management loan review and monitoring departments that review and monitor pass graded loans as well as problem loans to prevent further deterioration. Concentrations of Credit: The majority of the Bank’s loan and lease portfolio consists of commercial real estate and commercial and industrial loans. The Bank has been diversifying and monitoring commercial real estate loans based on property types, tightening underwriting standards, and portfolio liquidity and management, and has not exceeded certain specified limits set forth in the Bank’s loan and lease policy. Loans and leases receivable Loans and leases receivable consisted of the following as of the dates indicated: December 31, 2016 December 31, 2015 Non-PCI Loans and Leases PCI Loans Total Non-PCI Loans and Leases PCI Loans Total (In thousands) Real estate loans: Commercial property Retail $ 857,629 $ 2,324 $ 859,953 $ 735,501 $ 4,849 $ 740,350 Hotel/motel 649,540 1,618 651,158 539,345 4,080 543,425 Gas station 260,187 2,692 262,879 319,363 4,292 323,655 Other (1) 1,107,589 2,067 1,109,656 973,243 5,418 978,661 Construction 55,962 — 55,962 23,387 — 23,387 Residential property 337,791 976 338,767 234,879 1,157 236,036 Total real estate loans 3,268,698 9,677 3,278,375 2,825,718 19,796 2,845,514 Commercial and industrial loans: Commercial term 138,032 136 138,168 152,602 171 152,773 Commercial lines of credit 136,231 — 136,231 128,224 — 128,224 International loans 25,821 — 25,821 31,879 — 31,879 Total commercial and industrial loans 300,084 136 300,220 312,705 171 312,876 Leases receivable 243,294 — 243,294 — — — Consumer loans (2) 22,830 50 22,880 24,879 47 24,926 Total loans and leases 3,834,906 9,863 3,844,769 3,163,302 20,014 3,183,316 Allowance for loan and lease losses (31,458 ) (971 ) (32,429 ) (37,494 ) (5,441 ) (42,935 ) Loans and leases receivable, net $ 3,803,448 $ 8,892 $ 3,812,340 $ 3,125,808 $ 14,573 $ 3,140,381 (1) Includes, among other property types, mixed-use, apartment, office, industrial, faith-based facilities and warehouse; the remaining real estate categories represents less than one percent of the Bank's total loans and leases. (2) Consumer loans include home equity lines of credit of $17.7 million and $21.8 million as of December 31, 2016 and 2015 , respectively. Accrued interest on loans and leases receivable was $8.2 million and $7.9 million at December 31, 2016 and 2015, respectively. At December 31, 2016 and 2015 , loans and leases receivable totaling $1.0 billion and $557.7 million , respectively, were pledged to secure advances from the FHLB and the FRB’s discount window. The following table details the information on the sales and reclassifications of loans receivable to loans held for sale (excluding PCI loans) by portfolio segment for the years ended December 31, 2016 and 2015 : Real Estate Commercial and Total (In thousands) December 31, 2016 Balance at beginning of period $ 840 $ 2,034 $ 2,874 Origination of loans held for sale 65,416 25,951 91,367 Sales of loans held for sale (58,836 ) (26,065 ) (84,901 ) Principal payoffs and amortization (10 ) (14 ) (24 ) Balance at end of period $ 7,410 $ 1,906 $ 9,316 December 31, 2015 Balance at beginning of period $ 3,323 $ 2,128 $ 5,451 Origination of loans held for sale 56,247 30,410 86,657 Reclassification from loans receivable to loans held for sale 360 — 360 Sales of loans held for sale (59,030 ) (30,441 ) (89,471 ) Principal payoffs and amortization (60 ) (63 ) (123 ) Balance at end of period $ 840 $ 2,034 $ 2,874 Allowance for Loan and Lease Losses Activity in the allowance for loan and lease losses and allowance for off-balance sheet items was as follows for the periods indicated: Non-PCI Loans and Leases PCI Loans Total As of and for the Year Ended December 31, 2016 (In thousands) Balance at beginning of period $ 37,494 $ 5,441 $ 42,935 Charge-offs (3,736 ) (5,133 ) (8,869 ) Recoveries on loans and leases previously charged off 2,702 — 2,702 Net loan and lease recoveries (charge-offs) (1,034 ) (5,133 ) (6,167 ) (Negative provision) provision charged to operating expense (5,002 ) 663 (4,339 ) Balance at end of period $ 31,458 $ 971 $ 32,429 As of and for the Year Ended December 31, 2015 Balance at beginning of period $ 51,640 $ 1,026 $ 52,666 Charge-offs (3,531 ) — (3,531 ) Recoveries on loans and leases previously charged off 5,423 — 5,423 Net loan and lease recoveries (charge-offs) 1,892 — 1,892 (Negative provision) provision charged to operating expense (16,038 ) 4,415 (11,623 ) Balance at end of period $ 37,494 $ 5,441 $ 42,935 As of and for the Year Ended December 31, 2014 Balance at beginning of period $ 57,555 $ — $ 57,555 Charge-offs (6,992 ) — (6,992 ) Recoveries on loans and leases previously charged off 8,361 — 8,361 Net loan and lease recoveries (charge-offs) 1,369 — 1,369 (Negative provision) provision charged to operating expense (7,284 ) 1,026 (6,258 ) Balance at end of period $ 51,640 $ 1,026 $ 52,666 The following table details the information on the allowance for loan and lease losses on non-PCI loans leases by portfolio segment for the years ended December 31, 2016 and 2015 : Real Estate Commercial Leases Receivable Consumer Unallocated Total (In thousands) December 31, 2016 Allowance for loan losses on non-PCI loans and leases: Beginning balance $ 29,800 $ 7,081 — $ 242 $ 371 $ 37,494 Charge-offs (3,022 ) (706 ) (6 ) (2 ) — (3,736 ) Recoveries on loans and leases previously charged off 667 1,978 1 56 — 2,702 (Negative provision) provision (2,233 ) (2,771 ) 312 (105 ) (205 ) (5,002 ) Ending balance $ 25,212 $ 5,582 $ 307 $ 191 $ 166 $ 31,458 Ending balance: individually evaluated for impairment $ 3,980 $ 347 $ — $ — $ — $ 4,327 Ending balance: collectively evaluated for impairment $ 21,232 $ 5,235 $ 307 $ 191 $ 166 $ 27,131 Non-PCI loans and leases receivable: Ending balance $ 3,268,698 $ 300,084 $ 243,294 $ 22,830 $ — $ 3,834,906 Ending balance: individually evaluated for impairment $ 21,757 $ 4,174 $ — $ 419 $ — $ 26,350 Ending balance: collectively evaluated for impairment $ 3,246,941 $ 295,910 $ 243,294 $ 22,411 $ — $ 3,808,556 Allowance for loan losses on PCI loans: Beginning balance $ 5,397 $ 42 $ — $ 2 $ — $ 5,441 Charge-offs (5,133 ) — — — — (5,133 ) Provision 658 (1 ) — 6 — 663 Ending balance: acquired with deteriorated credit quality $ 922 $ 41 $ — $ 8 $ — $ 971 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 9,677 $ 136 $ — $ 50 $ — $ 9,863 Real Estate Commercial and Industrial Consumer Unallocated Total December 31, 2015 Allowance for loan and lease losses on non-PCI loans: Beginning balance $ 41,194 $ 9,142 $ 220 $ 1,084 $ 51,640 Charge-offs (565 ) (2,966 ) — — (3,531 ) Recoveries on loans and leases previously charged off 2,080 3,339 4 — 5,423 Provision (negative provision) (12,909 ) (2,434 ) 18 (713 ) (16,038 ) Ending balance $ 29,800 $ 7,081 $ 242 $ 371 $ 37,494 Ending balance: individually evaluated for impairment $ 3,858 $ 587 $ — $ — $ 4,445 Ending balance: collectively evaluated for impairment $ 25,942 $ 6,494 $ 242 $ 371 $ 33,049 Non-PCI loans and leases receivable: Ending balance $ 2,825,718 $ 312,705 $ 24,879 $ — $ 3,163,302 Ending balance: individually evaluated for impairment $ 27,341 $ 6,853 $ 1,665 $ — $ 35,859 Ending balance: collectively evaluated for impairment $ 2,798,377 $ 305,852 $ 23,214 $ — $ 3,127,443 Allowance for loan losses on PCI loans: Beginning balance $ 895 $ 131 $ — $ — $ 1,026 Provision 4,502 (89 ) 2 — 4,415 Ending balance: acquired with deteriorated credit quality $ 5,397 $ 42 $ 2 $ — $ 5,441 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 19,796 $ 171 $ 47 $ — $ 20,014 Loan Quality Indicators As part of the on-going monitoring of the quality of our loan and lease portfolio, we utilize an internal loan and lease grading system to identify credit risk and assign an appropriate grade (from 0 to (8)) for each and every loan or lease in our loan and lease portfolio. A third-party loan review is required on an annual basis. Additional adjustments are made when determined to be necessary. The loan and lease grade definitions are as follows: Pass and Pass-Watch: Pass and Pass-Watch loans and leases, grades (0-4), are in compliance 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 and lease grading system. It consists of all performing loans and lease with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans. Special Mention: A Special Mention loan or lease, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment of the debt and result in a Substandard classification. Loans and leases that have significant actual, not potential, weaknesses are considered more severely classified. Substandard: A Substandard loan or lease, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan or lease 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 or lease, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected. Doubtful: A Doubtful loan or lease, 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 loan or lease, and therefore the amount or timing of a possible loss cannot be determined at the current time. Loss: A loan or lease classified as Loss, grade (8), is considered uncollectible and of such little value that their continuance as active bank assets is not warranted. This classification does not mean that the loan or lease 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 and leases classified as Loss will be charged off in a timely manner. As of December 31, 2016 and 2015 , pass/pass-watch, special mention and classified (substandard and doubtful) loans and leases (excluding PCI loans), disaggregated by loan class, were as follows: Pass/Pass-Watch Special Mention Classified Total (In thousands) December 31, 2016 Real estate loans: Commercial property Retail $ 851,147 $ 2,275 $ 4,207 $ 857,629 Hotel/motel 634,397 5,497 9,646 649,540 Gas station 252,123 1,911 6,153 260,187 Other 1,100,070 1,645 5,874 1,107,589 Construction 55,962 — — 55,962 Residential property 337,227 — 564 337,791 Commercial and industrial loans: Commercial term 133,811 2,060 2,161 138,032 Commercial lines of credit 135,699 464 68 136,231 International loans 23,406 2,415 — 25,821 Leases receivable 242,393 — 901 243,294 Consumer loans 22,139 — 691 22,830 Total Non-PCI loans and leases $ 3,788,374 $ 16,267 $ 30,265 $ 3,834,906 December 31, 2015 Real estate loans: Commercial property Retail $ 722,483 $ 9,519 $ 3,499 $ 735,501 Hotel/motel 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 and leases $ 3,085,409 $ 38,556 $ 39,337 $ 3,163,302 The following is an aging analysis of gross loans and leases (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) December 31, 2016 Real estate loans: Commercial property Retail $ 9 $ 137 $ 234 $ 380 $ 857,249 $ 857,629 $ — Hotel/motel 1,037 46 600 1,683 647,857 649,540 — Gas station 245 643 137 1,025 259,162 260,187 — Other 432 79 1,100 1,611 1,105,978 1,107,589 — Construction — — — — 55,962 55,962 — Residential property 730 89 423 1,242 336,549 337,791 — Commercial and industrial loans: Commercial term 484 42 111 637 137,395 138,032 — Commercial lines of credit — — — — 136,231 136,231 — International loans 80 — — 80 25,741 25,821 — Leases receivable 2,090 1,043 385 3,518 239,776 243,294 Consumer loans 170 — — 170 22,660 22,830 — Total Non-PCI loans $ 5,277 $ 2,079 $ 2,990 $ 10,346 $ 3,824,560 $ 3,834,906 $ — December 31, 2015 Real estate loans: Commercial property Retail $ 441 $ 343 $ 399 $ 1,183 $ 734,318 $ 735,501 $ — Hotel/motel 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 nonaccrual and principal or interest payments have been contractually past due for 90 days or more, unless the loan is both well-collateralized and in the process of collection; or they are classified as TDR loans to offer terms not typically granted by the Bank; 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 costs to sell. If the measure of the impaired loan is less than the recorded investment in the loan, the deficiency will be charged off against the allowance for loan losses or, alternatively, a specific allocation will be established. 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 table provides information on impaired loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated: Recorded Unpaid Principal With No With an Related Average Interest (In thousands) As of or for The Year Ended December 31, 2016 Real estate loans: Commercial property Retail $ 1,678 $ 1,684 $ 151 $ 1,527 $ 120 $ 2,243 $ 141 Hotel/motel 6,227 6,823 2,243 3,984 3,078 4,887 454 Gas station 4,984 5,092 4,984 — — 4,831 645 Other 6,070 6,808 3,127 2,943 782 7,104 681 Residential property 2,798 2,851 2,798 — — 2,656 112 Commercial and industrial loans: Commercial term 4,106 4,171 1,229 2,877 347 4,815 307 Commercial lines of credit 68 68 68 — — 45 14 International loans — — — — — 315 — Consumer loans 419 489 419 — — 622 29 Total Non-PCI loans $ 26,350 $ 27,986 $ 15,019 $ 11,331 $ 4,327 $ 27,518 $ 2,383 As of or for The Year Ended December 31, 2015 Real estate loans: Commercial property Retail $ 2,597 $ 2,892 $ 2,435 $ 162 $ 27 $ 3,878 $ 277 Hotel/motel 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 As of or for The Year Ended December 31, 2014 Real estate loans: Commercial property Retail $ 4,436 $ 4,546 $ 1,938 $ 2,498 $ 220 $ 5,373 $ 251 Hotel/motel 5,835 6,426 4,581 1,254 1,828 4,583 398 Gas station 8,974 9,594 8,526 448 150 11,281 787 Other 10,125 11,591 8,890 1,235 319 10,579 885 Residential property 3,127 3,268 3,127 — — 2,924 115 Commercial and industrial loans: Commercial term 7,614 8,133 2,999 4,615 2,443 9,458 566 Commercial lines of credit 466 575 466 — — 1,205 66 International loans 3,546 3,546 2,628 918 286 1,736 33 Consumer loans 1,742 1,907 1,742 — — 1,651 59 Total Non-PCI loans $ 45,865 $ 49,586 $ 34,897 $ 10,968 $ 5,246 $ 48,790 $ 3,160 The following is a summary of interest foregone on impaired loans (excluding PCI loans) for the periods indicated: Year Ended December 31, 2016 2015 2014 (In thousands) Interest income that would have been recognized had impaired loans performed in accordance with their original terms $ 3,053 $ 4,168 $ 4,468 Less: Interest income recognized on impaired loans (2,383 ) (2,683 ) (3,160 ) Interest foregone on impaired loans $ 670 $ 1,485 $ 1,308 There were no commitments to lend additional funds to borrowers whose loans are included above. Nonaccrual Loans and Leases Loans and leases 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 or lease on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan or lease’s delinquency. When a loan or lease 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 and leases may be restored to accrual status when principal and interest payments become current and full repayment is expected. The following table details nonaccrual loans and leases (excluding PCI loans), disaggregated by loan class, as of the dates indicated: As of December 31, 2016 2015 (In thousands) Real estate loans: Commercial property Retail $ 404 $ 946 Hotel/motel 5,266 5,790 Gas station 1,025 2,774 Other 2,033 4,068 Residential property 564 1,386 Commercial and industrial loans: Commercial term 824 2,193 Commercial lines of credit — 450 Leases receivable 901 — Consumer loans 389 1,511 Total nonaccrual Non-PCI loans and leases $ 11,406 $ 19,118 The following table details nonperforming assets (excluding PCI loans) as of the dates indicated: As of December 31, 2016 2015 (In thousands) Nonaccrual Non-PCI loans and leases $ 11,406 $ 19,118 Loans and leases 90 days or more past due and still accruing — — Total nonperforming Non-PCI loans and leases 11,406 19,118 Other real estate owned 7,484 8,511 Total nonperforming assets $ 18,890 $ 27,629 As of December 31, 2016 , OREO consisted of twelve properties with a combined carrying value of $7.5 million , including a $5.7 million OREO acquired in the CBI acquisition or were obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. As of December 31, 2015 , OREO consisted of fourteen 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 Restructuring The following table details TDRs (excluding PCI loans), disaggregated by concession type and by loan type, as of December 31, 2016 , 2015 and 2014 : Nonaccrual TDRs Accrual TDRs Deferral of Deferral of Reduction of Extension of Total Deferral of Deferral of Reduction of Extension of Total (In thousands) December 31, 2016 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ — $ — $ — $ 1,228 $ 1,228 Hotel/motel 1,292 3,722 — — 5,014 — — — — Gas station — — — — — 1,324 — 1,324 Other 387 651 143 — 1,181 2,688 286 1,344 4,318 Residential property — — 783 — 289 1,072 Commercial and industrial loans: Commercial term 149 71 69 419 708 22 198 2,135 662 3,017 Commercial lines of credit — — — — — 68 68 Consumer loans — — — 119 119 Total Non-PCI loans $ 1,828 $ 4,444 $ 212 $ 419 $ 6,903 $ 4,817 $ 198 $ 3,768 $ 2,363 $ 11,146 December 31, 2015 Real estate loans: Commercial property Retail $ — $ — $ — $ 344 $ 344 $ — $ — $ 1,227 $ — $ 1,227 Hotel/motel 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 loans $ 3,131 $ 1,329 $ 1,329 $ 1,089 $ 6,878 $ 4,241 $ 214 $ 3,222 $ 2,622 $ 10,299 December 31, 2014 Real estate loans: Commercial property Retail $ — $ — $ — $ 2,032 $ 2,032 $ 306 $ — $ — $ — $ 306 Hotel/motel 1,115 (53 ) — — 1,062 1,807 — — — 1,807 Gas station 1,075 — — — 1,075 2,335 — — — 2,335 Other 943 1,498 433 24 2,898 2,343 — 782 1,372 4,497 Residential property 742 — — — 742 — — — 308 308 Commercial and industrial loans: Commercial term 14 (1 ) 2,556 1,481 4,050 57 226 567 1,358 2,208 Commercial lines of credit 227 — 126 113 466 2,156 — — — 2,156 International loans — — — — — — — 200 — 200 Consumer loans — — 131 — 131 — — — — — Total Non-PCI loans $ 4,116 $ 1,444 $ 3,246 $ 3,650 $ 12,456 $ 9,004 $ 226 $ 1,549 $ 3,038 $ 13,817 As of December 31, 2016 , 2015 and 2014 , total TDRs, excluding loans held for sale, were $18.0 million , $17.2 million and $26.3 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 six months or less. 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 December 31, 2016 , 2015 and 2014 , TDRs, excluding loans held for sale, were subjected to specific impairment analysis, and we determined impairment reserves of $3.4 million , $1.0 million and $2.9 million , respectively, related to these loans which were included in the allowance for loan losses. The following table details TDRs (excluding PCI loans), disaggregated by loan class, for the years ended December 31, 2016 , 2015 and 2014 : December 31, 2016 December 31, 2015 December 31, 2014 Number of Pre- Post- 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 $ 1,230 $ 1,227 2 $ 2,205 $ 2,032 Hotel/motel (2) 1 3,764 3,722 — — — 1 832 821 Gas station (3) — — — — — — 1 2,040 1,979 Other (4) — — — 2 725 724 3 1,422 1,352 Residential property (5) — — — — — — 1 317 308 Commercial and industrial loans: Commercial term (6) 5 403 331 10 973 801 5 721 629 Commercial lines of credit (7) — — — — — — 3 2,366 2,509 International loans (8) — — — — — — 1 480 200 Consumer loans (9) — — — 1 250 250 — — — Total Non-PCI loans 7 $ 4,188 $ 4,076 14 $ 3,178 $ 3,002 17 $ 10,383 $ 9,830 (1) Includes a modification of $23,000 through a reduction of principal or accrued interest payment for the year ended December 31, 2016 , a modification of $1.2 million through payment deferrals for the year ended December 31, 2015 and a modification of $2.0 million through payment deferrals for the year ended December 31, 2014 . (2) Includes a modification of $3.7 million through a payment deferral for the year ended December 31, 2016 and a modification of $821,000 through a payment deferral for the year ended December 31, 2014 . (3) Includes a modification of $2.0 million through a payment deferral for the year ended December 31, 2014 . (4) Includes a modification of $724,000 through a payment deferral for the year ended December 31, 2015 and modifications of $943,000 through a payment deferral, $385,000 through a reduction of principal or accrued interest and $24,000 through an extension of maturity for the year ended December 31, 2014 . (5) Includes a modification of $308,000 through an extension of maturity for the year ended December 31, 2014 . (6) Includes three modifications of $216,000 through payment deferrals, a modification of $65,000 through a reduction of principal or accrued interest payment and a modification of $50,000 through and extension of maturity for the year ended December 31, 2016 . Includes modifications of $34,000 through payment deferral, $60,000 through reductions of principal or accrued interest and $707,000 through extensions of maturity for the year ended December 31, 2015 and modifications of $184,000 through reductions of principal or accrued interest and $445,000 through extensions of maturity for the year ended December 31, 2014 . (7) Includes modifications of $2.4 million through payment deferrals and $126,000 through a reduction of principal or accrued interest for the year ended December 31, 2014 . (8) Includes a modification of $200,000 through a reduction of principal or accrued interest for the year ended December 31, 2014 . (9) Includes a modification of $250,000 through a payment deferral for the year ended December 31, 2015 . During the year ended December 31, 2016 , we restructured monthly payments on 7 loans, with a net carrying value of $4.1 million as of December 31, 2016 , through temporary payment structure modifications or re-amortization. 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 twelve months, disaggregated by loan class, for years ended December 31, 2016 , 2015 and 2014 , respectively: For the Year Ended December 31, 2016 December 31, 2015 December 31, 2014 Number of Recorded Number of Recorded Number of Recorded (In thousands, except number of loans) Real estate loans: Commercial property Retail — $ — — $ — 1 $ 1,856 Gas station — — — — — — Other — — 1 412 3 1,352 Commercial and industrial loans: Commercial term 1 50 1 178 — — Commercial lines of credit — — — — 2 353 Total Non-PCI loans 1 $ 50 2 $ 590 6 $ 3,561 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, at acquisition, that all contractually required payments would not be collected. The following table summarizes the changes in carrying value of PCI loans for the three-year period ended December 31, 2016 : For the Year Ended December 31, 2016 For the Year Ended December 31, 2015 For the Year Ended December 31, 2014 Carrying Amount Accretable Yield Carrying Amount Accretable Yield Carrying Accretable (In thousands) (In thousands) (In thousands) Beginning Balance $ 14,573 $ (5,944 ) $ 43,475 $ (11,025 ) $ — $ — Additions from CBI Acquisition at August 31, 2014 — — — — 65,346 (10,856 ) Accretion 1,144 1,144 2,956 2,956 1,448 1,448 Payments received (7,138 ) — (31,215 ) — (17,803 ) — Disposal/transfers to OREO 977 — 3,772 — (4,490 ) — Change in expected cash flows, net — (877 ) — 2,125 — (1,617 ) Provision for credit losses (664 ) — (4,415 ) — (1,026 ) — Ending Balance $ 8,892 $ (5,677 ) $ 14,573 $ (5,944 ) $ 43,475 $ (11,025 ) As of December 31, 2016 and 2015, pass/pass-watch, special mention and classified (substandard and doubtful) PCI loans, disaggregated by loan class, were as follows: December 31, 2016 Pass/Pass-Watch Special Mention Classified Total Allowance Total (In thousands) Real estate loans: Commercial property Retail $ — $ — $ 2,324 $ 2,324 $ 122 $ 2,202 Hotel/motel 177 — 1,441 $ 1,618 138 1,480 Gas station — 1,180 1,512 $ 2,692 589 2,103 Other — — 2,067 $ 2,067 1 2,066 Residential property 976 — — $ 976 72 904 Commercial and industrial loans: Commercial term — — 136 $ 136 41 95 Consumer loans — — 50 $ 50 8 42 Total PCI loans $ 1,153 $ 1,180 $ 7,530 $ 9,863 $ 971 $ 8,892 December 31, 2015 Pass/Pass-Watch Special Mention Classified Total Allowance Amount Total PCI Loans (In thousands) Real estate loans: Commercial property Retail $ — $ — $ 4,849 $ 4,849 $ 269 $ 4,580 Hotel/motel 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 December 31, 2016 , we had no PCI loans on nonaccrual status and included in the delinquency table below. As of December 31, 2016 Pooled PCI Loans Non-pooled PCI Loans #Loans #Pools Carrying Amount (In thousands) % of total #Loans Carrying Amount (In thousands) % of total Total PCI Loans (In thousands) Real estate loans: Commercial property 45 6 $ 7,780 89 % 1 $ 921 11 % $ 8,701 Construction — — — — % — — — % — Residential property — — — — % 2 976 100 % 976 Total real estate loans 45 6 7,780 80 % 3 1,897 20 % 9,677 Commercial and industrial loans 6 3 136 100 % — — — % 136 Consumer loans 1 1 50 100 % — — — % 50 Total acquired loans 52 10 $ 7,966 81 % 3 $ 1,897 19 % $ 9,863 Allowance |