Loans and Leases | Loans and leases Loans and Leases Receivable, Net Loans and leases receivable consisted of the following as of the dates indicated: June 30, 2017 December 31, 2016 Non-PCI Loans and Leases PCI Loans Total Non-PCI Loans and Leases PCI Loans Total (in thousands) Real estate loans: Commercial property Retail $ 914,470 $ 1,643 $ 916,113 $ 857,629 $ 2,324 $ 859,953 Hospitality 737,369 1,698 739,067 649,540 1,618 651,158 Gas station 247,566 2,363 249,929 260,187 2,692 262,879 Other (1) 1,102,084 2,016 1,104,100 1,107,589 2,067 1,109,656 Construction 58,159 — 58,159 55,962 — 55,962 Residential property 382,692 965 383,657 337,791 976 338,767 Total real estate loans 3,442,340 8,685 3,451,025 3,268,698 9,677 3,278,375 Commercial and industrial loans: Commercial term 159,432 55 159,487 138,032 136 138,168 Commercial lines of credit 148,421 — 148,421 136,231 — 136,231 International loans 39,328 — 39,328 25,821 — 25,821 Total commercial and industrial loans 347,181 55 347,236 300,084 136 300,220 Leases receivable 257,525 — 257,525 243,294 — 243,294 Consumer loans (2) 17,232 44 17,276 22,830 50 22,880 Loans and leases receivable 4,064,278 8,784 4,073,062 3,834,906 9,863 3,844,769 Allowance for loan and lease losses (33,038 ) (720 ) (33,758 ) (31,458 ) (971 ) (32,429 ) Loans and leases receivable, net $ 4,031,240 $ 8,064 $ 4,039,304 $ 3,803,448 $ 8,892 $ 3,812,340 (1) The remaining other real estate categories represent less than one percent of total loans and leases, which, among other property types, include mixed-use, apartment, office, industrial, faith-based facilities and warehouse. (2) Consumer loans include home equity lines of credit of $15.1 million and $17.7 million as of June 30, 2017 and December 31, 2016 , respectively. Accrued interest on loans and leases receivable was $8.3 million and $8.2 million at June 30, 2017 and December 31, 2016 , respectively. At June 30, 2017 and December 31, 2016 , loans receivable of $1.0 billion were pledged to secure borrowing facilities from the FHLB. Loans Held for Sale The following is the activity for SBA loans held for sale for the three months ended June 30, 2017 and 2016 : SBA Loans Held for Sale Real Estate Commercial and Industrial Total (in thousands) June 30, 2017 Balance at beginning of period $ 7,789 $ 1,060 $ 8,849 Originations 22,130 12,344 34,474 Sales (21,083 ) (11,271 ) (32,354 ) Principal payoffs and amortization (19 ) (1 ) (20 ) Balance at end of period $ 8,817 $ 2,132 $ 10,949 June 30, 2016 Balance at beginning of period $ 1,824 $ 759 $ 2,583 Originations 22,376 8,031 30,407 Sales (14,905 ) (5,247 ) (20,152 ) Principal payoffs and amortization (1 ) (4 ) (5 ) Balance at end of period $ 9,294 $ 3,539 $ 12,833 The following is the activity for SBA loans held for sale for the six months ended June 30, 2017 and 2016 : SBA Loans Held for Sale Real Estate Commercial and Industrial Total (in thousands) June 30, 2017 Balance at beginning of period $ 7,410 $ 1,906 $ 9,316 Originations 34,763 18,904 53,667 Sales (33,337 ) (18,660 ) (51,997 ) Principal payoffs and amortization (19 ) (18 ) (37 ) Balance at end of period $ 8,817 $ 2,132 $ 10,949 June 30, 2016 Balance at beginning of period $ 840 $ 2,034 $ 2,874 Originations 28,849 13,710 42,559 Sales (20,393 ) (12,182 ) (32,575 ) Principal payoffs and amortization (2 ) (23 ) (25 ) Balance at end of period $ 9,294 $ 3,539 $ 12,833 Allowance for Loan and Lease Losses Activity in the allowance for loan and lease losses was as follows for the periods indicated: As of and for the Three Months Ended June 30, 2017 June 30, 2016 Non-PCI Loans and Leases PCI Loans Total Non-PCI Loans and Leases PCI Loans Total (in thousands) Allowance for loan and lease losses: Balance at beginning of period $ 32,261 $ 891 $ 33,152 $ 35,381 $ 5,645 $ 41,026 Charge-offs (665 ) — (665 ) (662 ) (137 ) (799 ) Recoveries on loans and leases previously charged off 849 — 849 995 — 995 Net loan and lease (charge-offs) recoveries 184 — 184 333 (137 ) 196 Loan and lease loss provision (income) 593 (171 ) 422 (1,455 ) (60 ) (1,515 ) Balance at end of period $ 33,038 $ 720 $ 33,758 $ 34,259 $ 5,448 $ 39,707 As of and for the Six Months Ended June 30, 2017 June 30, 2016 Non-PCI Loans and Leases PCI Loans Total Non-PCI Loans and Leases PCI Loans Total (in thousands) Allowance for loan and lease losses: Balance at beginning of period $ 31,458 $ 971 $ 32,429 $ 37,494 $ 5,441 $ 42,935 Charge-offs (851 ) — (851 ) (1,299 ) (137 ) (1,436 ) Recoveries on loans and leases previously charged off 1,838 — 1,838 1,248 — 1,248 Net loan and lease (charge-offs) recoveries 987 — 987 (51 ) (137 ) (188 ) Loan and lease loss provision (income) 593 (251 ) 342 (3,184 ) 144 (3,040 ) Balance at end of period $ 33,038 $ 720 $ 33,758 $ 34,259 $ 5,448 $ 39,707 Management believes the allowance for loan and lease losses is appropriate to provide for probable losses inherent in the loan and lease 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 and lease 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 tables detail the information on the allowance for loan and lease losses by portfolio segment as of and for the three and six months ended June 30, 2017 and 2016 : Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Three Months Ended June 30, 2017 Allowance for loan and lease losses on non-PCI loans and leases: Beginning balance $ 24,760 $ 5,914 980 $ 122 $ 485 $ 32,261 Charge-offs (38 ) — (627 ) — — (665 ) Recoveries on loans and leases previously charged off 447 367 20 15 — 849 Loan and lease loss provision (income) (2,407 ) 698 1,660 (50 ) 692 593 Ending balance $ 22,762 $ 6,979 $ 2,033 $ 87 $ 1,177 $ 33,038 Ending balance: individually evaluated for impairment $ 3,638 $ 1,841 $ — $ — $ — $ 5,479 Ending balance: collectively evaluated for impairment $ 19,124 $ 5,138 $ 2,033 $ 87 $ 1,177 $ 27,559 Non-PCI loans and leases receivable: Ending balance $ 3,442,340 $ 347,181 $ 257,525 $ 17,232 $ — $ 4,064,278 Ending balance: individually evaluated for impairment $ 19,695 $ 5,275 $ — $ 1,224 $ — $ 26,194 Ending balance: collectively evaluated for impairment $ 3,422,645 $ 341,906 $ 257,525 $ 16,008 $ — $ 4,038,084 Allowance for loan losses on PCI loans: Beginning balance $ 842 $ 41 $ — $ 8 $ — $ 891 Charge-offs — — — — — — Loan loss provision (income) (171 ) — — — — (171 ) Ending balance $ 671 $ 41 $ — $ 8 $ — $ 720 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 8,685 $ 55 $ — $ 44 $ — $ 8,784 Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Three Months Ended June 30, 2016 Allowance for loan and lease losses on non-PCI loans and leases: Beginning balance $ 28,278 $ 6,289 — $ 255 $ 559 $ 35,381 Charge-offs (156 ) (506 ) — — — (662 ) Recoveries on loans and leases previously charged off 97 845 — 53 — 995 Loan and lease loss provision (income) (103 ) (1,126 ) — (66 ) (160 ) (1,455 ) Ending balance $ 28,116 $ 5,502 $ — $ 242 $ 399 $ 34,259 Ending balance: individually evaluated for impairment $ 2,589 $ 422 $ — $ — $ — $ 3,011 Ending balance: collectively evaluated for impairment $ 25,527 $ 5,080 $ — $ — $ 242 $ 399 $ 31,248 Non-PCI loans and leases receivable: Ending balance $ 3,116,749 $ 292,927 $ — $ 24,614 $ — $ 3,434,290 Ending balance: individually evaluated for impairment $ 20,412 $ 5,089 $ — $ 686 $ — $ 26,187 Ending balance: collectively evaluated for impairment $ 3,096,337 $ 287,838 $ — $ 23,928 $ — $ 3,408,103 Allowance for loan losses on PCI loans: Beginning balance $ 5,599 $ 44 $ — $ 2 $ — $ 5,645 Charge-offs (137 ) — — — — (137 ) Loan loss provision (income) (62 ) (3 ) — 5 — (60 ) Ending balance $ 5,400 $ 41 $ — $ 7 $ — $ 5,448 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 14,823 $ 146 $ — $ 51 $ — $ 15,020 Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Six Months Ended June 30, 2017 Allowance for loan and lease losses on non-PCI loans and leases: Beginning balance $ 25,212 $ 5,582 307 $ 191 $ 166 $ 31,458 Charge-offs (142 ) (40 ) (669 ) — — (851 ) Recoveries on loans and leases previously charged off 1,159 644 20 15 — 1,838 Loan and lease loss provision (income) (3,467 ) 793 2,375 (119 ) 1,011 593 Ending balance $ 22,762 $ 6,979 $ 2,033 $ 87 $ 1,177 $ 33,038 Ending balance: individually evaluated for impairment $ 3,638 $ 1,841 $ — $ — $ — $ 5,479 Ending balance: collectively evaluated for impairment $ 19,124 $ 5,138 $ 2,033 $ 87 $ 1,177 $ 27,559 Non-PCI loans and leases receivable: Ending balance $ 3,442,340 $ 347,181 $ 257,525 $ 17,232 $ — $ 4,064,278 Ending balance: individually evaluated for impairment $ 19,695 $ 5,275 $ — $ 1,224 $ — $ 26,194 Ending balance: collectively evaluated for impairment $ 3,422,645 $ 341,906 $ 257,525 $ 16,008 $ — $ 4,038,084 Allowance for loan losses on PCI loans: Beginning balance $ 922 $ 41 $ — $ 8 $ — $ 971 Charge-offs — — — — — — Loan loss provision (income) (251 ) — — — — (251 ) Ending balance $ 671 $ 41 $ — $ 8 $ — $ 720 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 8,685 $ 55 $ — $ 44 $ — $ 8,784 Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Six Months Ended Allowance for loan and lease losses on non-PCI loans and leases: Beginning balance $ 29,800 $ 7,081 — $ 242 $ 371 $ 37,494 Charge-offs (691 ) (608 ) — — — (1,299 ) Recoveries on loans and leases previously charged off 190 1,005 — 53 — 1,248 Loan and lease loss provision (income) (1,183 ) (1,976 ) — (53 ) 28 (3,184 ) Ending balance $ 28,116 $ 5,502 $ — $ 242 $ 399 $ 34,259 Ending balance: individually evaluated for impairment $ 2,589 $ 422 $ — $ — $ — $ 3,011 Ending balance: collectively evaluated for impairment $ 25,527 $ 5,080 $ — $ 242 $ 399 $ 31,248 Non-PCI loans and leases receivable: Ending balance $ 3,116,749 $ 292,927 $ — $ 24,614 $ — $ 3,434,290 Ending balance: individually evaluated for impairment $ 20,412 $ 5,089 $ — $ 686 $ — $ 26,187 Ending balance: collectively evaluated for impairment $ 3,096,337 $ 287,838 $ — $ 23,928 $ — $ 3,408,103 Allowance for loan losses on PCI loans: Beginning balance $ 5,397 $ 42 $ — $ 2 $ — $ 5,441 Charge-offs (137 ) — — — — (137 ) Loan loss provision (income) 140 (1 ) — 5 — 144 Ending balance $ 5,400 $ 41 $ — $ 7 $ — $ 5,448 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 14,823 $ 146 $ — $ 51 $ — $ 15,020 Loan and Lease Quality Indicators As part of the on-going monitoring of the credit 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 loan or lease in our loan and lease portfolio. Third party loan reviews are performed throughout the year. 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 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 and lease grading system. It incorporates all performing loans and leases 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 and leases 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 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 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 or lease 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 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 are charged off in a timely manner. Under regulatory guidance, loans and leases graded special mention or worse are considered criticized loans and leases, and loans and leases graded substandard or worse are considered classified loans and leases. As of June 30, 2017 and December 31, 2016 , pass/pass-watch, special mention and classified loans and leases (excluding PCI loans), disaggregated by loan class, were as follows: Pass/Pass-Watch Special Mention Classified Total (in thousands) June 30, 2017 Real estate loans: Commercial property Retail $ 909,076 $ 1,601 $ 3,793 $ 914,470 Hospitality 724,423 5,798 7,148 737,369 Gas station 243,388 2,006 2,172 247,566 Other 1,089,244 9,483 3,357 1,102,084 Construction 58,159 — — 58,159 Residential property 382,068 320 304 382,692 Total real estate loans 3,406,358 19,208 16,774 3,442,340 Commercial and industrial loans: Commercial term 155,226 2,143 2,063 159,432 Commercial lines of credit 146,921 — 1,500 148,421 International loans 39,328 — — 39,328 Total commercial and industrial loans 341,475 2,143 3,563 347,181 Leases receivable 253,881 — 3,644 257,525 Consumer loans 15,956 — 1,276 17,232 Total Non-PCI loans and leases $ 4,017,670 $ 21,351 $ 25,257 $ 4,064,278 December 31, 2016 Real estate loans: Commercial property Retail $ 851,147 $ 2,275 $ 4,207 $ 857,629 Hospitality 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 Total real estate loans 3,230,926 11,328 26,444 3,268,698 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 Total commercial and industrial loans 292,916 4,939 2,229 300,084 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 The following is an aging analysis of 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 (in thousands) June 30, 2017 Real estate loans: Commercial property Retail $ 128 $ 138 $ 143 $ 409 $ 914,061 $ 914,470 Hospitality 1,336 999 3,797 6,132 731,237 737,369 Gas station 264 1,582 130 1,976 245,590 247,566 Other 876 433 69 1,378 1,100,706 1,102,084 Construction — — — — 58,159 58,159 Residential property 1,165 50 456 1,671 381,021 382,692 Total real estate loans 3,769 3,202 4,595 11,566 3,430,774 3,442,340 Commercial and industrial loans: Commercial term 186 418 372 976 158,456 159,432 Commercial lines of credit 95 — — 95 148,326 148,421 International loans — — — — 39,328 39,328 Total commercial and industrial loans 281 418 372 1,071 346,110 347,181 Leases receivable 1,983 1,787 1,971 5,741 251,784 257,525 Consumer loans 121 — 990 1,111 16,121 17,232 Total Non-PCI loans and leases $ 6,154 $ 5,407 $ 7,928 $ 19,489 $ 4,044,789 $ 4,064,278 December 31, 2016 Real estate loans: Commercial property Retail $ 9 $ 137 $ 234 $ 380 $ 857,249 $ 857,629 Hospitality 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 Total real estate loans 2,453 994 2,494 5,941 3,262,757 3,268,698 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 Total commercial and industrial loans 564 42 111 717 299,367 300,084 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 and leases $ 5,277 $ 2,079 $ 2,990 $ 10,346 $ 3,824,560 $ 3,834,906 There were no loans that were 90 days or more past due and accruing interest as of June 30, 2017 and 2016 . Impaired Loans and Leases Loans and leases are considered impaired when the Bank will be unable to collect all interest and principal payments per the contractual terms of the loan and lease 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 or lease 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 and lease impairment in accordance with applicable GAAP. Impaired loans and leases are measured based on the present value of expected future cash flows discounted at the receivable's effective interest rate or, as a practical expedient, at the receivable's observable market price or the fair value of the collateral if the loan or lease is collateral dependent, less estimated costs to sell. If the measure of the impaired loan or lease is less than the recorded investment in the loan or lease, the deficiency is either charged off against the allowance for loan and lease losses or we establish a specific allocation in the allowance for loan and lease losses. Additionally, loans and leases that are considered impaired are specifically excluded from the quarterly migration analysis when determining the amount of the allowance for loan and lease 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 and leases (excluding PCI loans), disaggregated by loan class, as of the dates indicated: Recorded Unpaid With No With an Related (in thousands) June 30, 2017 Real estate loans: Commercial property Retail $ 1,495 $ 1,506 $ 1,186 $ 309 $ 66 Hospitality 6,057 6,730 2,341 3,716 3,078 Gas station 4,828 4,991 4,828 — — Other 4,502 4,810 3,652 850 494 Residential property 2,813 2,837 2,813 — — Total real estate loans 19,695 20,874 14,820 4,875 3,638 Commercial and industrial loans: Commercial term 3,775 3,859 1,252 2,523 651 Commercial lines of credit 1,500 1,500 — 1,500 1,190 Total commercial and industrial loans 5,275 5,359 1,252 4,023 1,841 Consumer loans 1,224 1,228 1,224 — — Total Non-PCI loans and leases $ 26,194 $ 27,461 $ 17,296 $ 8,898 $ 5,479 December 31, 2016 Real estate loans: Commercial property Retail $ 1,678 $ 1,684 $ 151 $ 1,527 $ 120 Hospitality 6,227 6,823 2,243 3,984 3,078 Gas station 4,984 5,092 4,984 — — Other 6,070 6,808 3,127 2,943 782 Residential property 2,798 2,851 2,798 — — Total real estate loans 21,757 23,258 13,303 8,454 3,980 Commercial and industrial loans: Commercial term 4,106 4,171 1,229 2,877 347 Commercial lines of credit 68 68 68 — — Total commercial and industrial loans 4,174 4,239 1,297 2,877 347 Consumer loans 419 489 419 — — Total Non-PCI loans and leases $ 26,350 $ 27,986 $ 15,019 $ 11,331 $ 4,327 Three Months Ended Six Months Ended Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (in thousands) June 30, 2017 Real estate loans: Commercial property Retail $ 1,500 $ 29 $ 1,584 $ 61 Hospitality 6,074 99 6,164 167 Gas station 4,860 117 4,844 211 Other 4,532 98 4,932 187 Residential property 2,823 28 2,798 61 Total real estate loans 19,789 371 20,322 687 Commercial and industrial loans: Commercial term 3,829 52 3,861 110 Commercial lines of credit 1,500 16 750 16 Total commercial and industrial loans 5,329 68 4,611 126 Consumer loans 1,226 3 775 6 Total Non-PCI loans and leases $ 26,344 $ 442 $ 25,708 $ 819 June 30, 2016 Real estate loans: Commercial property Retail $ 2,434 $ 44 $ 2,653 $ 85 Hospitality 3,362 146 5,032 300 Gas station 4,653 99 4,880 261 Other 7,525 183 7,887 395 Residential property 2,537 27 2,653 57 Total real estate loans 20,511 499 23,105 1,098 Commercial and industrial loans: Commercial term 5,089 87 5,151 164 Commercial lines of credit 28 4 37 9 International loans — — 630 — Total commercial and industrial loans 5,117 91 5,818 173 Consumer loans 690 8 692 16 Total Non-PCI loans and leases $ 26,318 $ 598 $ 29,615 $ 1,287 The following is a summary of interest foregone on impaired loans and leases (excluding PCI loans) for the periods indicated: Three Months Ended Six Months Ended 2017 2016 2017 2016 (in thousands) Interest income that would have been recognized had impaired loans and leases performed in accordance with their original terms $ 622 $ 718 $ 1,213 $ 1,611 Less: Interest income recognized on impaired loans and leases (442 ) (598 ) (819 ) (1,287 ) Interest foregone on impaired loans and leases $ 180 $ 120 $ 394 $ 324 There were no commitments to lend additional funds to borrowers whose loans are included in the table above. Nonaccrual Loans and Leases and Nonperforming Assets 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 receivable is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan or lease receivable on nonaccrual status earlier, depending upon the individual circumstances surrounding the delinquency. When a receivable 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: June 30, 2017 December 31, 2016 (in thousands) Real estate loans: Commercial property Retail $ 210 $ 404 Hospitality 5,199 5,266 Gas station 945 1,025 Other 1,990 2,033 Residential property 667 564 Total real estate loans 9,011 9,292 Commercial and industrial loans: Commercial term 1,199 824 Commercial lines of credit 1,500 — Total commercial and industrial loans 2,699 824 Leases receivable 3,644 901 Consumer loans 1,110 389 Total nonaccrual Non-PCI loans and leases $ 16,464 $ 11,406 The following table details nonperforming assets (excluding PCI loans) as of the dates indicated: June 30, 2017 December 31, 2016 (in thousands) Nonaccrual Non-PCI loans and leases $ 16,464 $ 11,406 Loans and leases 90 days or more past due and still accruing — — Total nonperforming Non-PCI loans and leases 16,464 11,406 OREO 4,321 7,484 Total nonperforming assets $ 20,785 $ 18,890 As of June 30, 2017 , OREO consisted of seven properties with a combined carrying value of $4.3 million , six of which with a combined carrying value of $4.2 million were 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, 2016, OREO consisted of 12 properties with a combined carrying value of $7.5 million , including $5.7 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) as of June 30, 2017 and December 31, 2016 : Nonaccrual TDRs Accrual TDRs Deferral Deferral Reduction Extension Total Deferral Deferral Reduction Extension Total (in thousands) June 30, 2017 Real estate loans $ 2,083 $ 3,989 $ 69 $ — $ 6,141 $ 3,772 $ — $ 1,255 $ 1,255 $ 6,282 Commercial and industrial loans 139 67 352 385 943 14 189 1,709 540 2,452 Consumer loans — — — — — — — 114 — 114 Total Non-PCI TDR loans $ 2,222 $ 4,056 $ 421 $ 385 $ 7,084 $ 3,786 $ 189 $ 3,078 $ 1,795 $ 8,848 December 31, 2016 Real estate loans $ 1,679 $ 4,373 $ 143 $ — $ 6,195 $ 4,795 $ — $ 1,514 $ 1,633 $ 7,942 Commercial and industrial loans 149 71 69 419 708 22 198 2,135 730 3,085 Consumer loans — — — — — — — 119 — 119 Total Non-PCI TDR loans $ 1,828 $ 4,444 $ 212 $ 419 $ 6,903 $ 4,817 $ 198 $ 3,768 $ 2,363 $ 11,146 As of June 30, 2017 and December 31, 2016 , total TDRs were $15.9 million and $18.0 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 June 30, 2017 and December 31, 2016 , $3.5 million and $3.4 million , respectively, of allowance relating to these loans were included in the allowance for loan and lease losses. 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. During the three months ended June 30, 2016, there was one commercial term loan with recorded investment of $55,000 that defaulted subsequent to the modifications occurring within the previous 12 months. During the six months ended June 30, 2016, there was one commercial real estate loan with recorded investment of $399,000 and two commercial term loans with combined recorded investment of $85,000 that defaulted subsequent to the modifications occurring within the previous 12 months. There were no such defaults during the three and six months periods ended June 30, 2017. Purchased Credit Impaired Loans The following table summarizes the changes in carrying value of PCI loans during the three months ended June 30, 2017 and 2016: Carrying Amount Accretable Yield (in thousands) Balance at January 1, 2017 $ 8,892 $ (5,677 ) Accretion 317 317 Payments received (1,434 ) — Disposal/transfer to OREO 37 — Change in expected cash flows, net — 121 Loan loss (provision) income 252 — Balance at June 30, 2017 $ 8,064 $ (5,239 ) Balance at January 1, 2016 $ 14,573 $ (5,944 ) Accretion 753 753 Payments received (6,713 ) — Disposal/transfer to OREO 1,103 — Change in expected cash flows, net — 683 Loan loss (provision) income (144 ) — Balance at June 30, 2016 $ 9,572 $ (4,508 ) As of June 30, 2017 and December 31, 2016, 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) June 30, 2017 Real estate loans $ 1,243 $ 1,108 $ 6,334 $ 8,685 $ 658 $ 8,027 Commercial and industrial loans — — 55 55 41 14 Consumer loans — — 44 44 21 23 Total PCI loans $ 1,243 $ 1,108 $ 6,433 $ 8,784 $ 720 $ 8,064 December 31, 2016 Real estate loans $ 1,153 $ 1,180 $ 7,344 $ 9,677 $ 922 $ 8,755 Commercial and industrial loans — — 136 136 41 95 Consumer loans — — 50 50 8 42 Total PCI loans $ 1,153 $ 1,180 $ 7,530 $ 9,863 $ 971 $ 8,892 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 June 30, 2017 and December 31, 2016 , 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) June 30, 2017 Real estate loans $ 349 $ — $ 425 $ 774 $ 7,911 $ 8,685 $ 658 $ 8,027 Commercial and industrial loans — — 5 5 50 55 41 14 Consumer loans — — 39 39 5 44 21 23 Total PCI loans $ 349 $ — $ 469 $ 818 $ 7,966 $ 8,784 $ 720 $ 8,064 December 31, 2016 Real estate loans $ 975 $ — $ 361 $ 1,336 $ 8,341 $ 9,677 $ 922 $ 8,755 Commercial and industrial loans — — 6 6 130 136 41 95 Consumer loans — — 50 50 — 50 8 42 Total PCI loans $ 975 $ — $ 417 $ 1,392 $ 8,471 $ 9,863 $ 971 $ 8,892 Below is a summary of PCI loans as of June 30, 2017 and December 31, 2016 : 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) June 30, 2017 Real estate loans: Commercial property 41 6 $ 6,837 88.6 % 1 $ 883 11.4 % $ 7,720 Residential property — — — — % 1 965 100.0 % $ 965 Total real estate loans 41 6 6,837 78.7 % 2 1,848 21.3 % 8,685 Commercial and industrial loans 3 3 55 100.0 % — — — % 55 Consumer loans 1 1 5 11.4 % 1 39 88.6 % 44 Total acquired loans 45 10 6,897 78.5 % 3 1,887 21.5 % 8,784 Allowance for loan losses (355 ) (365 ) (720 ) Total carrying amount $ 6,542 $ 1,522 $ 8,064 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) December 31, 2016 Real estate loans: Commercial property 45 6 $ 7,780 89.4 % 1 $ 921 10.6 % $ 8,701 Residential property — — — — % 2 976 100.0 % $ 976 Total real estate loans 45 6 7,780 80.4 % 3 1,897 19.6 % 9,677 Commercial and industrial loans 6 3 136 100.0 % — — — % 136 Consumer loans 1 1 50 100.0 % — — — % 50 Total acquired loans 52 10 7,9 |