Loans and Leases | Loans and leases Loans and Leases Receivable, Net Loans and leases receivable consisted of the following as of the dates indicated: September 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 $ 916,236 $ 1,587 $ 917,823 $ 857,629 $ 2,324 $ 859,953 Hospitality 731,562 1,664 733,226 649,540 1,618 651,158 Gas station 245,042 2,388 247,430 260,187 2,692 262,879 Other (1) 1,144,176 2,013 1,146,189 1,107,589 2,067 1,109,656 Construction 64,263 — 64,263 55,962 — 55,962 Residential property 429,669 958 430,627 337,791 976 338,767 Total real estate loans 3,530,948 8,610 3,539,558 3,268,698 9,677 3,278,375 Commercial and industrial loans: Commercial term 170,891 51 170,942 138,032 136 138,168 Commercial lines of credit 149,937 — 149,937 136,231 — 136,231 International loans 43,577 — 43,577 25,821 — 25,821 Total commercial and industrial loans 364,405 51 364,456 300,084 136 300,220 Leases receivable 272,271 — 272,271 243,294 — 243,294 Consumer loans (2) 19,027 43 19,070 22,830 50 22,880 Loans and leases receivable 4,186,651 8,704 4,195,355 3,834,906 9,863 3,844,769 Allowance for loan and lease losses (31,698 ) (794 ) (32,492 ) (31,458 ) (971 ) (32,429 ) Loans and leases receivable, net $ 4,154,953 $ 7,910 $ 4,162,863 $ 3,803,448 $ 8,892 $ 3,812,340 (1) Includes other property types which individually represent less than one percent of loans and leases receivable; other property types include mixed-use, apartment, office, industrial, faith-based facilities and warehouse. (2) Consumer loans include home equity lines of credit of $14.7 million and $17.7 million as of September 30, 2017 and December 31, 2016 , respectively. Accrued interest on loans and leases receivable was $9.5 million and $8.2 million at September 30, 2017 and December 31, 2016 , respectively. At September 30, 2017 and December 31, 2016 , loans receivable of $1.1 billion and $1.0 billion , respectively, 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 September 30, 2017 and 2016 : SBA Loans Held for Sale Real Estate Commercial and Industrial Total (in thousands) September 30, 2017 Balance at beginning of period $ 8,817 $ 2,132 $ 10,949 Originations 16,326 11,723 28,049 Sales (20,593 ) (11,926 ) (32,519 ) Principal payoffs and amortization (4 ) (6 ) (10 ) Balance at end of period $ 4,546 $ 1,923 $ 6,469 September 30, 2016 Balance 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 ) Balance at end of period $ 4,595 $ 1,830 $ 6,425 The following is the activity for SBA loans held for sale for the nine months ended September 30, 2017 and 2016 : SBA Loans Held for Sale Real Estate Commercial and Industrial Total (in thousands) September 30, 2017 Balance at beginning of period $ 7,410 $ 1,906 $ 9,316 Originations 51,090 30,626 81,716 Sales (53,930 ) (30,586 ) (84,516 ) Principal payoffs and amortization (24 ) (23 ) (47 ) Balance at end of period $ 4,546 $ 1,923 $ 6,469 September 30, 2016 Balance 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 ) Balance at end of period $ 4,595 $ 1,830 $ 6,425 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 September 30, 2017 September 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 $ 33,038 $ 720 $ 33,758 $ 34,259 $ 5,448 $ 39,707 Charge-offs (2,405 ) — (2,405 ) (111 ) (5 ) (116 ) Recoveries on loans and leases previously charged off 871 — 871 831 — 831 Net loan and lease (charge-offs) recoveries (1,534 ) — (1,534 ) 720 (5 ) 715 Loan and lease loss provision (income) 194 74 268 (1,540 ) 90 (1,450 ) Balance at end of period $ 31,698 $ 794 $ 32,492 $ 33,439 $ 5,533 $ 38,972 As of and for the Nine Months Ended September 30, 2017 September 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 (3,256 ) — (3,256 ) (1,410 ) (142 ) (1,552 ) Recoveries on loans and leases previously charged off 2,709 — 2,709 2,079 — 2,079 Net loan and lease (charge-offs) recoveries (547 ) — (547 ) 669 (142 ) 527 Loan and lease loss provision (income) 787 (177 ) 610 (4,724 ) 234 (4,490 ) Balance at end of period $ 31,698 $ 794 $ 32,492 $ 33,439 $ 5,533 $ 38,972 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 nine months ended September 30, 2017 and 2016 : Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Three Months Ended September 30, 2017 Allowance for loan and lease losses on non-PCI loans and leases: Beginning balance $ 22,762 $ 6,979 2,033 $ 87 $ 1,177 $ 33,038 Charge-offs (146 ) (1,976 ) (283 ) — — (2,405 ) Recoveries on loans and leases previously charged off 343 308 220 — — 871 Loan and lease loss provision (income) (3,374 ) 1,183 2,867 (23 ) (459 ) 194 Ending balance $ 19,585 $ 6,494 $ 4,837 $ 64 $ 718 $ 31,698 Ending balance: individually evaluated for impairment $ 3,882 $ 531 $ 2,008 $ — $ — $ 6,421 Ending balance: collectively evaluated for impairment $ 15,703 $ 5,963 $ 2,829 $ 64 $ 718 $ 25,277 Non-PCI loans and leases receivable: Ending balance $ 3,530,948 $ 364,405 $ 272,271 $ 19,027 $ — $ 4,186,651 Ending balance: individually evaluated for impairment $ 19,466 $ 3,610 $ 3,378 $ 1,045 $ — $ 27,499 Ending balance: collectively evaluated for impairment $ 3,511,482 $ 360,795 $ 268,893 $ 17,982 $ — $ 4,159,152 Allowance for loan losses on PCI loans: Beginning balance $ 671 $ 41 $ — $ 8 $ — $ 720 Charge-offs — — — — — — Loan loss provision (income) 81 — — (7 ) — 74 Ending balance $ 752 $ 41 $ — $ 1 $ — $ 794 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 8,610 $ 51 $ — $ 43 $ — $ 8,704 Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Three Months Ended September 30, 2016 Allowance for loan and lease losses on non-PCI loans and leases: Beginning balance $ 28,116 $ 5,502 — $ 242 $ 399 $ 34,259 Charge-offs (18 ) (93 ) — — — (111 ) Recoveries on loans and leases previously charged off 337 494 — — — 831 Loan and lease loss provision (income) (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 and leases 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 ) Loan loss provision (income) 89 1 — — — 90 Ending balance $ 5,484 $ 42 $ — $ 7 $ — $ 5,533 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 15,355 $ 135 $ — $ 50 $ — $ 15,540 Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Nine Months Ended September 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 (289 ) (2,017 ) (950 ) — — (3,256 ) Recoveries on loans and leases previously charged off 1,434 1,021 239 15 — 2,709 Loan and lease loss provision (income) (6,772 ) 1,908 5,241 (142 ) 552 787 Ending balance $ 19,585 $ 6,494 $ 4,837 $ 64 $ 718 $ 31,698 Ending balance: individually evaluated for impairment $ 3,882 $ 531 $ 2,008 $ — $ — $ 6,421 Ending balance: collectively evaluated for impairment $ 15,703 $ 5,963 $ 2,829 $ 64 $ 718 $ 25,277 Non-PCI loans and leases receivable: Ending balance $ 3,530,948 $ 364,405 $ 272,271 $ 19,027 $ — $ 4,186,651 Ending balance: individually evaluated for impairment $ 19,466 $ 3,610 $ 3,378 $ 1,045 $ — $ 27,499 Ending balance: collectively evaluated for impairment $ 3,511,482 $ 360,795 $ 268,893 $ 17,982 $ — $ 4,159,152 Allowance for loan losses on PCI loans: Beginning balance $ 922 $ 41 $ — $ 8 $ — $ 971 Charge-offs — — — — — — Loan loss provision (income) (170 ) — — (7 ) — (177 ) Ending balance $ 752 $ 41 $ — $ 1 $ — $ 794 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 8,610 $ 51 $ — $ 43 $ — $ 8,704 Real Estate Commercial and Industrial Leases Receivable Consumer Unallocated Total (In thousands) As of and for the Nine 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 (709 ) (701 ) — — — (1,410 ) Recoveries on loans and leases previously charged off 527 1,499 — 53 — 2,079 Loan and lease loss provision (income) (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 and leases 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 ) Loan loss provision (income) 229 — — 5 — 234 Ending balance $ 5,484 $ 42 $ — $ 7 $ — $ 5,533 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 15,355 $ 135 $ — $ 50 $ — $ 15,540 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 September 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) September 30, 2017 Real estate loans: Commercial property Retail $ 910,890 $ 1,577 $ 3,769 $ 916,236 Hospitality 718,244 4,979 8,339 731,562 Gas station 240,952 2,274 1,816 245,042 Other 1,131,423 8,840 3,913 1,144,176 Construction 64,263 — — 64,263 Residential property 429,048 326 295 429,669 Total real estate loans 3,494,820 17,996 18,132 3,530,948 Commercial and industrial loans: Commercial term 167,492 1,623 1,776 170,891 Commercial lines of credit 149,646 110 181 149,937 International loans 43,577 — — 43,577 Total commercial and industrial loans 360,715 1,733 1,957 364,405 Leases receivable 268,893 — 3,378 272,271 Consumer loans 17,930 — 1,097 19,027 Total Non-PCI loans and leases $ 4,142,358 $ 19,729 $ 24,564 $ 4,186,651 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) September 30, 2017 Real estate loans: Commercial property Retail $ 7 $ 1 $ 223 $ 231 $ 916,005 $ 916,236 Hospitality 1,869 — 975 2,844 728,718 731,562 Gas station 43 63 128 234 244,808 245,042 Other 1,043 280 739 2,062 1,142,114 1,144,176 Construction — — — — 64,263 64,263 Residential property 500 — 326 826 428,843 429,669 Total real estate loans 3,462 344 2,391 6,197 3,524,751 3,530,948 Commercial and industrial loans: Commercial term 236 53 510 799 170,092 170,891 Commercial lines of credit — — 181 181 149,756 149,937 International loans — — — — 43,577 43,577 Total commercial and industrial loans 236 53 691 980 363,425 364,405 Leases receivable 3,042 476 2,033 5,551 266,720 272,271 Consumer loans — — — — 19,027 19,027 Total Non-PCI loans and leases $ 6,740 $ 873 $ 5,115 $ 12,728 $ 4,173,923 $ 4,186,651 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 September 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) September 30, 2017 Real estate loans: Commercial property Retail $ 1,475 $ 1,495 $ 124 $ 1,351 $ 61 Hospitality 6,288 7,233 2,165 4,123 3,057 Gas station 4,260 4,732 4,155 105 — Other 4,777 5,170 1,881 2,897 764 Residential property 2,666 2,812 2,666 — — Total real estate loans 19,466 21,442 10,991 8,476 3,882 Commercial and industrial loans: Commercial term 3,429 3,482 361 3,068 531 Commercial lines of credit 181 181 181 — — Total commercial and industrial loans 3,610 3,663 542 3,068 531 Leases receivable 3,378 3,482 658 2,720 2,008 Consumer loans 1,045 1,221 1,045 — — Total Non-PCI loans and leases $ 27,499 $ 29,808 $ 13,236 $ 14,264 $ 6,421 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 Nine Months Ended Average Recorded Investment Interest Income Recognized Average Recorded Investment Interest Income Recognized (in thousands) September 30, 2017 Real estate loans: Commercial property Retail $ 1,487 $ 24 $ 1,551 $ 85 Hospitality 6,476 143 6,268 309 Gas station 4,603 85 4,764 297 Other 4,886 117 4,917 304 Residential property 2,794 26 2,797 87 Total real estate loans 20,246 395 20,297 1,082 Commercial and industrial loans: Commercial term 3,495 54 3,739 165 Commercial lines of credit 1,060 — 853 16 Total commercial and industrial loans 4,555 54 4,592 181 Leases receivable 3,560 12 4,044 36 Consumer loans 1,201 15 917 21 Total Non-PCI loans and leases $ 29,562 $ 476 $ 29,850 $ 1,320 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 Total real estate loans 18,817 397 21,675 1,497 Commercial and industrial loans: Commercial term 4,792 71 5,032 235 Commercial lines of credit 15 3 29 12 International loans — — 420 — Total commercial and industrial loans 4,807 74 5,481 247 Consumer loans 682 7 688 22 Total Non-PCI loans and leases $ 24,306 $ 478 $ 27,844 $ 1,766 The following is a summary of interest foregone on impaired loans and leases (excluding PCI loans) for the periods indicated: Three Months Ended Nine 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 $ 696 $ 695 $ 1,934 $ 2,306 Less: Interest income recognized on impaired loans and leases (476 ) (478 ) (1,320 ) (1,766 ) Interest foregone on impaired loans and leases $ 220 $ 217 $ 614 $ 540 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: September 30, 2017 December 31, 2016 (in thousands) Real estate loans: Commercial property Retail $ 253 $ 404 Hospitality 5,368 5,266 Gas station 742 1,025 Other 2,097 2,033 Residential property 621 564 Total real estate loans 9,081 9,292 Commercial and industrial loans: Commercial term 984 824 Commercial lines of credit 181 — Total commercial and industrial loans 1,165 824 Leases receivable 3,378 901 Consumer loans 934 389 Total nonaccrual Non-PCI loans and leases $ 14,558 $ 11,406 The following table details nonperforming assets (excluding PCI loans) as of the dates indicated: September 30, 2017 December 31, 2016 (in thousands) Nonaccrual Non-PCI loans and leases $ 14,558 $ 11,406 Loans and leases 90 days or more past due and still accruing — — Total nonperforming Non-PCI loans and leases 14,558 11,406 OREO 1,946 7,484 Total nonperforming assets $ 16,504 $ 18,890 As of September 30, 2017 , OREO consisted of six properties with a combined carrying value of $1.9 million , five of which with a combined carrying value of $1.8 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 September 30, 2017 and December 31, 2016 : Nonaccrual TDRs Accrual TDRs Deferral Deferral Reduction Extension Total Deferral Deferral Reduction Extension Total (in thousands) September 30, 2017 Real estate loans $ 1,959 $ 3,836 $ 67 $ — $ 5,862 $ 3,389 $ — $ 1,399 $ 1,245 $ 6,033 Commercial and industrial loans 132 186 48 109 475 10 184 1,667 485 2,346 Consumer loans 820 — — — 820 — — 111 — 111 Total Non-PCI TDR loans $ 2,911 $ 4,022 $ 115 $ 109 $ 7,157 $ 3,399 $ 184 $ 3,177 $ 1,730 $ 8,490 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 September 30, 2017 and December 31, 2016 , total TDRs were $15.6 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 September 30, 2017 and December 31, 2016 , $2.2 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 and nine month periods ended September 30, 2016, there was one commercial term loan with recorded investment of $53,000 that defaulted subsequent to the modifications occurring within the previous 12 months.There were no such defaults during the three and nine months periods ended September 30, 2017. Purchased Credit Impaired Loans The following table summarizes the changes in carrying value of PCI loans during the nine months ended September 30, 2017 and 2016: Carrying Amount Accretable Yield (in thousands) Balance at January 1, 2017 $ 8,892 $ (5,677 ) Accretion 501 501 Payments received (1,770 ) — Disposal/transfer to OREO 110 — Change in expected cash flows, net — (306 ) Loan loss (provision) income 177 — Balance at September 30, 2017 $ 7,910 $ (5,482 ) Balance at January 1, 2016 $ 14,573 $ (5,944 ) Accretion 933 933 Payments received (6,408 ) — Disposal/transfer to OREO 1,143 — Change in expected cash flows, net — (900 ) Loan loss (provision) income (234 ) — Balance at September 30, 2016 $ 10,007 $ (5,911 ) As of September 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) September 30, 2017 Real estate loans $ 1,257 $ 357 $ 6,996 $ 8,610 $ 752 $ 7,858 Commercial and industrial loans — — 51 51 41 10 Consumer loans — — 43 43 1 42 Total PCI loans $ 1,257 $ 357 $ 7,090 $ 8,704 $ 794 $ 7,910 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 September 30, 2017 and December 31, 2016 , we had no PCI loans on nonaccrual status. 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) September 30, 2017 Real estate loans $ 689 $ — $ 579 $ 1,268 $ 7,342 $ 8,610 $ 752 $ 7,858 Commercial and industrial loans — — 5 5 46 51 41 10 Consumer loans — — — — 43 43 1 42 Total PCI loans $ 689 $ — $ 584 $ 1,273 $ 7,431 $ 8,704 $ 794 $ 7,910 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 September 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) September 30, 2017 Real estate loans: Commercial property 41 6 $ 6,788 88.7 % 1 $ 864 11.3 % $ 7,652 Residential property — — — — % 1 958 100.0 % $ 958 Total real estate loans 41 6 6,788 78.8 % 2 1,822 21.2 % 8,610 Commercial and industrial loans 3 3 51 100.0 % — — — % 51 Consumer loans 1 1 4 9.3 % 1 39 90.4 % 43 Total acquired loans 45 10 6,843 78.6 % 3 1,861 21.4 % 8,704 Allowance for loan losses (378 ) (416 ) (794 ) Total carrying amount $ 6,465 $ 1,445 $ 7,910 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 7,966 |