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, residential 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, 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 $ 913,628 $ 1,645 $ 915,273 $ 857,629 $ 2,324 $ 859,953 Hotel/motel 679,683 1,642 681,325 649,540 1,618 651,158 Other (1) 1,413,852 3,421 1,417,273 1,367,776 4,759 1,372,535 Total commercial property loans 3,007,163 6,708 3,013,871 2,874,945 8,701 2,883,646 Construction 55,190 — 55,190 55,962 — 55,962 Residential property 520,902 951 521,853 337,791 976 338,767 Total real estate loans 3,583,255 7,659 3,590,914 3,268,698 9,677 3,278,375 Commercial and industrial loans: Commercial term 182,636 49 182,685 138,032 136 138,168 Commercial lines of credit 181,894 — 181,894 136,231 — 136,231 International loans 34,622 — 34,622 25,821 — 25,821 Total commercial and industrial loans 399,152 49 399,201 300,084 136 300,220 Leases receivable 297,284 — 297,284 243,294 — 243,294 Consumer loans (2) 17,019 40 17,059 22,830 50 22,880 Total loans and leases 4,296,710 7,748 4,304,458 3,834,906 9,863 3,844,769 Allowance for loan and lease losses (30,723 ) (320 ) (31,043 ) (31,458 ) (971 ) (32,429 ) Loans and leases receivable, net $ 4,265,987 $ 7,428 $ 4,273,415 $ 3,803,448 $ 8,892 $ 3,812,340 (1) Includes, among other property types, mixed-use, gas station, 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 $14.2 million and $17.7 million as of December 31, 2017 and 2016 , respectively. Accrued interest on loans and leases receivable was $10.2 million and $8.2 million at December 31, 2017 and 2016 , respectively. At December 31, 2017 and 2016 , loans and leases receivable totaling $1.1 billion and $1.0 billion , respectively, were pledged to secure advances from the FHLB. The following table details the information on the sales and reclassifications of SBA loans receivable to loans held for sale by portfolio segment for the years ended December 31, 2017 and 2016 : Real Estate Commercial and Total (In thousands) December 31, 2017 Balance at beginning of period $ 7,410 $ 1,906 $ 9,316 Origination of loans held for sale 70,710 38,401 109,111 Sales of loans held for sale (74,344 ) (37,633 ) (111,977 ) Principal payoffs and amortization (30 ) (26 ) (56 ) Balance at end of period $ 3,746 $ 2,648 $ 6,394 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 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, 2017 (In thousands) Balance at beginning of period $ 31,458 $ 971 $ 32,429 Charge-offs (5,899 ) — (5,899 ) Recoveries on loans and leases previously charged off 3,682 — 3,682 Net loan and lease charge-offs (2,217 ) — (2,217 ) Loan and lease loss provision (income) 1,482 (651 ) 831 Balance at end of period $ 30,723 $ 320 $ 31,043 As of and for the Year Ended December 31, 2016 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 charge-offs (1,034 ) (5,133 ) (6,167 ) Loan and lease loss provision (income) (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 1,892 — 1,892 Loan and lease loss provision (income) (16,038 ) 4,415 (11,623 ) Balance at end of period $ 37,494 $ 5,441 $ 42,935 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, 2017 and 2016 : Real Estate Commercial Leases Receivable Consumer Unallocated Total (In thousands) December 31, 2017 Allowance for loan losses on non-PCI loans and leases: Beginning balance $ 25,212 $ 5,582 307 $ 191 $ 166 $ 31,458 Charge-offs (2,150 ) (2,516 ) (1,233 ) — — (5,899 ) Recoveries on loans and leases previously charged off 1,527 1,901 239 15 — 3,682 Loan and lease loss provision (income) (7,836 ) 2,392 6,966 (104 ) 64 1,482 Ending balance $ 16,753 $ 7,359 $ 6,279 $ 102 $ 230 $ 30,723 Ending balance: individually evaluated for impairment $ 2,093 $ 441 $ 3,334 $ 10 $ — $ 5,878 Ending balance: collectively evaluated for impairment $ 14,660 $ 6,918 $ 2,945 $ 92 $ 230 $ 24,845 Non-PCI loans and leases receivable: Ending balance $ 3,583,255 $ 399,152 $ 297,284 $ 17,019 $ — $ 4,296,710 Ending balance: individually evaluated for impairment $ 18,663 $ 3,040 $ 4,452 $ 1,029 $ — $ 27,184 Ending balance: collectively evaluated for impairment $ 3,564,592 $ 396,112 $ 292,832 $ 15,990 $ — $ 4,269,526 Allowance for loan losses on PCI loans: Beginning balance $ 922 $ 41 $ — $ 8 $ — $ 971 Provision (663 ) — — 12 — (651 ) Ending balance $ 259 $ 41 $ — $ 20 $ — $ 320 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 7,659 $ 49 $ — $ 40 $ — $ 7,748 Real Estate Commercial and Industrial 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 Loan and lease loss provision (income) (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 $ 922 $ 41 $ — $ 8 $ — $ 971 PCI loans receivable: Ending balance: acquired with deteriorated credit quality $ 9,677 $ 136 $ — $ 50 $ — $ 9,863 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, 2017 and 2016 , 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, 2017 Real estate loans: Commercial property Retail $ 909,462 $ 454 $ 3,712 $ 913,628 Hotel/motel 667,085 4,880 7,718 679,683 Other 1,397,657 10,813 5,382 1,413,852 Construction 55,190 — — 55,190 Residential property 520,310 305 287 520,902 Total real estate loans 3,549,704 16,452 17,099 3,583,255 Commercial and industrial loans: Commercial term 179,835 439 2,362 182,636 Commercial lines of credit 181,462 250 182 181,894 International loans 34,622 — — 34,622 Leases receivable 292,832 — 4,452 297,284 Consumer loans 15,995 — 1,024 17,019 Total $ 4,254,450 $ 17,141 $ 25,119 $ 4,296,710 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 Other 1,352,193 3,556 12,027 1,367,776 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 Leases receivable 242,393 — 901 243,294 Consumer loans 22,139 — 691 22,830 Total $ 3,788,374 $ 16,267 $ 30,265 $ 3,834,906 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, 2017 Real estate loans: Commercial property Retail $ 96 $ 15 $ 196 $ 307 $ 913,321 $ 913,628 $ — Hotel/motel 3,421 — 398 3,819 675,864 679,683 — Other 1,245 1,333 467 3,045 1,410,807 1,413,852 — Construction — — — — 55,190 55,190 — Residential property 609 — — 609 520,293 520,902 — Total real estate loans 5,371 1,348 1,061 7,780 3,575,475 3,583,255 — Commercial and industrial loans: Commercial term 425 567 829 1,821 180,815 182,636 — Commercial lines of credit 250 — 182 432 181,462 181,894 — International loans — — — — 34,622 34,622 — Leases receivable 2,295 944 3,554 6,793 290,491 297,284 Consumer loans — — — — 17,019 17,019 — Total $ 8,341 $ 2,859 $ 5,626 $ 16,826 $ 4,279,884 $ 4,296,710 $ — 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 — Other 677 722 1,237 2,636 1,365,140 1,367,776 — 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 — Leases receivable 2,090 1,043 385 3,518 239,776 243,294 Consumer loans 170 — — 170 22,660 22,830 — Total $ 5,277 $ 2,079 $ 2,990 $ 10,346 $ 3,824,560 $ 3,834,906 $ — 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; they are classified as TDR loans to offer terms not typically granted by the Bank; when current information or events make it unlikely to collect in full according to the contractual terms of the loan agreements; 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 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, 2017 Real estate loans: Commercial property Retail $ 1,403 $ 1,423 $ 1,246 $ 157 $ 1 $ 1,528 $ 106 Hotel/motel 6,184 7,220 2,144 4,040 1,677 6,080 431 Other 8,513 9,330 7,569 944 394 9,551 842 Residential property 2,563 2,728 824 1,739 21 2,771 122 Total real estate loans 18,663 20,701 11,783 6,880 2,093 19,930 1,501 Commercial and industrial loans: Commercial term 2,857 2,899 886 1,971 441 3,529 192 Commercial lines of credit 182 182 182 — — 685 16 International loans — — — — — — — Leases receivable 4,452 4,626 455 3,997 3,334 4,464 47 Consumer loans 1,029 1,215 919 110 10 982 33 Total $ 27,183 $ 29,623 $ 14,225 $ 12,958 $ 5,878 $ 29,590 $ 1,789 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 Other 11,054 11,900 8,111 2,943 782 11,935 1,326 Residential property 2,798 2,851 2,798 — — 2,656 112 Total real estate loans 21,757 23,258 13,303 8,454 3,980 21,721 2,033 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 $ 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 Other 14,681 16,625 11,619 3,062 759 17,334 1,231 Residential property 2,895 3,081 2,608 287 4 2,839 120 Total real estate loans 27,341 30,136 19,535 7,806 3,858 30,679 2,200 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 $ 35,859 $ 39,363 $ 23,985 $ 11,874 $ 4,445 $ 41,841 $ 2,683 The following is a summary of interest foregone on impaired loans (excluding PCI loans) for the periods indicated: Year Ended December 31, 2017 2016 2015 (In thousands) Interest income that would have been recognized had impaired loans performed in accordance with their original terms $ 2,575 $ 3,053 $ 4,168 Less: Interest income recognized on impaired loans (1,790 ) (2,383 ) (2,683 ) Interest foregone on impaired loans $ 785 $ 670 $ 1,485 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, 2017 2016 (In thousands) Real estate loans: Commercial property Retail $ 224 $ 404 Hotel/motel 5,263 5,266 Other 2,462 3,058 Residential property 591 564 Total real estate loans 8,540 9,292 Commercial and industrial loans: Commercial term 1,710 824 Commercial lines of credit 182 — Leases receivable 4,452 901 Consumer loans 921 389 Total nonaccrual loans and leases $ 15,805 $ 11,406 The following table details nonperforming assets (excluding PCI loans) as of the dates indicated: As of December 31, 2017 2016 (In thousands) Nonaccrual loans and leases $ 15,805 $ 11,406 Loans and leases 90 days or more past due and still accruing — — Total nonperforming loans and leases 15,805 11,406 Other real estate owned 1,946 7,484 Total nonperforming assets $ 17,751 $ 18,890 As of December 31, 2017 , OREO consisted of six properties with a combined carrying value of $1.9 million , including $1.8 million of OREO properties acquired in the CBI acquisition or obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. As of December 31, 2016 , OREO consisted of twelve properties with a combined carrying value of $7.5 million , including a $5.7 million of OREO properties acquired in the CBI acquisition or 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, 2017 , 2016 and 2015 : 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, 2017 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ — $ — $ — $ 1,188 $ — $ 1,188 Hotel/motel 1,156 3,495 — — 4,651 — — 169 — 169 Other 779 266 64 — 1,109 2,777 — 30 959 3,766 Residential property — — — — — 632 — — 278 910 Total real estate loans 1,935 3,761 64 — 5,760 3,409 — 1,387 1,237 6,033 Commercial and industrial loans: Commercial term 131 123 1,173 102 1,529 6 182 503 427 1,118 Consumer loans 811 — — — 811 — — 108 — 108 Total $ 2,877 $ 3,884 $ 1,237 $ 102 $ 8,100 $ 3,415 $ 182 $ 1,998 $ 1,664 $ 7,259 December 31, 2016 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ — $ — $ — $ 1,228 $ 1,228 Hotel/motel 1,292 3,722 — — 5,014 — — — — Other 387 651 143 — 1,181 4,012 286 1,344 5,642 Residential property — — 783 — 289 1,072 Total real estate loans 1,679 4,373 143 — 6,195 4,795 — 1,514 1,633 7,942 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 $ 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 Other 959 1,301 216 8 2,484 3,537 — 322 1,378 5,237 Residential property 689 — — — 689 — — — 299 299 Total real estate loans 2,864 1,329 216 352 4,761 3,951 — 1,549 1,677 7,177 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 $ 3,131 $ 1,329 $ 1,329 $ 1,089 $ 6,878 $ 4,241 $ 214 $ 3,222 $ 2,622 $ 10,299 As of December 31, 2017 , 2016 and 2015 , total TDRs were $15.4 million , $18.0 million and $17.2 million , respectively. A debt restructuring is considered a TDR if we grant a concession that we would not have otherwise considered to the borrower, for economic or legal reasons related to the borrower’s financial difficulties. Loans are considered to be TDRs if they were restructured through payment structure modifications such as reducing the amount of principal and interest due monthly and/or allowing for interest only monthly payments for 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, 2017 , 2016 and 2015 , TDRs, excluding loans held for sale, were subjected to specific impairment analysis, and we determined impairment allowances of $2.2 million , $3.4 million and $1.0 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, 2017 , 2016 and 2015 : December 31, 2017 December 31, 2016 December 31, 2015 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 Hotel/motel (2) 1 167 169 1 3,764 3,722 — — — Other (3) 1 15 15 — — — 2 725 724 Total real estate loans 2 182 184 2 3,785 3,745 3 1,955 1,951 Commercial and Industrial Loans: Commercial term (4) 1 123 123 5 403 331 10 973 801 Consumer loans (5) 1 820 811 — — — 1 250 250 Total TDRs 4 $ 1,125 $ 1,118 7 $ 4,188 $ 4,076 14 $ 3,178 $ 3,002 (1) Includes a modification of $23,000 through a reduction of principal or interest for the year ended December 31, 2016 , and a modification of $1.2 million through payment deferrals for the year ended December 31, 2015 . (2) Includes a modification of $169,000 through a reduction of principal or interest for the year ended December 31, 2017 , and a modification of $3.7 million through a payment deferral for the year ended December 31, 2016 . (3) Includes a modification of $15,000 through a payment deferral for the year ended December 31, 2017 , and modifications of $724,000 through payment deferrals for the year ended December 31, 2015 . (4) Includes a modification of $123,000 through a payment deferral for the year ended December 31, 2017 , and three modifications of $216,000 through payment deferrals, a modification of $65,000 through a reduction of principal or interest and a modification of $50,000 through an extension of maturity for the year ended December 31, 2016 . Includes modifications of $34,000 through payment deferrals, $60,000 through reductions of principal or interest and $707,000 through extensions of maturity for the year ended December 31, 2015 . (5) Includes a modification of $811,000 through a payment deferral for the year ended December 31, 2017 , and a modification of $250,000 through a payment deferral for the year ended December 31, 2015 . During the year ended December 31, 2017 , we restructured monthly payments on 4 loans, with a net carrying value of $1.1 million as of December 31, 2017 , 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. There were no TDRs for the year ended December December 31, 2017 that defaulted subsequent to the modifications occurring within the previous twelve months. 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 and 2015 , respectively: For the Year Ended December 31, 2016 December 31, 2015 Number of Recorded Number of Recorded (In thousands, except number of loans) Real estate loans: Commercial property — — 1 412 Commercial and industrial loans: Commercial term 1 50 1 178 Total TDRs 1 $ 50 2 $ 590 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, 2017 : For the Year Ended December 31, 2017 December 31, 2016 December 31, 2015 Carrying Amount Accretable Yield Carrying Amount Accretable Yield Carrying Accretable (In thousands) (In thousands) (In thousands) Beginning Balance $ 8,892 $ (5,677 ) $ 14,573 $ (5,944 ) $ 43,475 $ (11,025 ) Accretion 602 602 1,144 1,144 2,956 2,956 Payments received (2,827 ) — (7,138 ) — (31,215 ) — Disposal/transfers to OREO 110 — 977 — 3,772 — Change in expected cash flows, net — (410 ) — (877 ) — 2,125 Provision for credit losses 651 — (664 ) — (4,415 ) — Ending Balance $ 7,428 $ (5,485 ) $ 8,892 $ (5,677 ) $ 14,573 $ (5,944 ) As of December 31, 2017 and 2016, pass/pass-watch, special mention and classified (substandard and doubtful) PCI loans, disaggregated by loan class, were as follows: December 31, 2017 Pass/Pass-Watch Special Mention Classified Total Allowance Total (In thousands) Real estate loans: Commercial property Retail $ 220 $ — $ 1,425 $ 1,645 $ 31 $ 1,614 Hotel/motel 169 96 1,377 $ 1,642 129 1,513 Other 1 232 3,188 $ 3,421 16 3,405 Residential property 951 — — $ 951 83 868 Total real estate loans 1,341 328 5,990 7,659 259 7,400 Commercial and industrial loans: Commercial term — — 49 $ 49 41 8 Consumer loans — — 40 $ 40 20 20 Total PCI loans $ 1,341 $ 328 $ 6,079 $ 7,748 $ 320 $ 7,428 December 31, 2016 Pass/Pass-Watch Special Mention Classified Total Allowance Amount Total PCI Loans (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 Other — 1,180 3,579 $ 4,759 590 4,169 Residential property 976 — — $ 976 72 904 Total real estate loans 1,153 1,180 7,344 9,677 922 8,755 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 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, 2017 , we had no PCI loans on nonaccrual status and included in the delinquency table below. As of December 31, 2017 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 40 7 $ 6,708 100 % — $ — — % $ 6,708 Construction — — — — % — — — % — Residential property — — — — % 1 951 100 % 951 Total real estate loans 40 7 6,708 87.6 % 1 951 12.4 % 7,659 Commercial and industrial loans 3 3 49 100 % — — — % 49 Consumer loans 1 1 3 7.5 % 1 37 92.5 % 40 Total acquired loans 44 11 $ 6,760 87.2 % 2 $ 988 12.8 % $ 7,748 Allowance for loan losses $ (218 ) $ (102 ) $ (320 ) Total carrying amount $ 6,542 $ 886 $ 7,428 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 for loan losses $ (617 ) $ (354 ) $ (971 ) Total carrying amount $ 7,349 $ 1,543 $ 8,892 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 Total Past Due Current Total Allowance Total (In thousands) December 31, 2017 Real estate loans: Commercial property Retail $ — $ — $ 434 $ 43 |