Loans | Loans Major classifications of loans, including loans held for sale, are as follows: (Dollars in thousands) March 31, 2017 December 31, 2016 Non-owner occupied commercial real estate $ 1,187,344 $ 1,130,883 Other commercial construction and land 350,401 327,622 Multifamily commercial real estate 115,996 117,515 1-4 family residential construction and land 157,920 140,030 Total commercial real estate 1,811,661 1,716,050 Owner occupied commercial real estate 1,313,086 1,321,405 Commercial and industrial 1,443,828 1,468,874 Total commercial 2,756,914 2,790,279 1-4 family residential 1,787,097 1,714,702 Home equity loans 502,099 507,759 Other consumer loans 422,775 448,972 Total consumer 2,711,971 2,671,433 Other 231,409 228,430 Total loans $ 7,511,955 $ 7,406,192 Total loans include $5.0 million and $12.9 million of loans held for sale and $16.4 million and $15.5 million of net deferred loan origination costs and fees as of March 31, 2017 and December 31, 2016 , respectively. As of March 31, 2017 , other loans include $43.5 million , $151.6 million and $1.4 million of farm land, state and political subdivision obligations and deposit customer overdrafts, respectively. As of December 31, 2016 , other loans include $41.9 million , $149.0 million and $1.6 million of farm land, state and political subdivision obligations and deposit customer overdrafts, respectively. The Company designates purchased credit impaired loans as "PCI" by evaluating both qualitative and quantitative factors. At the time of acquisition, the Company accounted for the PCI loans by segregating each portfolio into loan pools with similar risk characteristics. Over the lives of the acquired PCI loans, the Company continues to estimate cash flows expected to be collected on each loan pool. The Company evaluates, at each balance sheet date, whether its estimates of the present value of the cash flows from the loan pools, determined using the effective interest rates, has decreased, such that the present value of such cash flows is less than the recorded investment of the pool, and if so, recognizes a provision for loan loss in its Consolidated Statements of Income, unless related to non-credit events. Additionally, if the Company has favorable changes in estimates of cash flows expected to be collected for a loan pool such that the then-present value exceeds the recorded investment of that pool, the Company will first reverse any previously established allowance for loan and lease losses for the pool. If such estimate exceeds the amount of any previously established allowance, the Company will accrete future interest income over the remaining life of the pool at a rate which, when used to discount the expected cash flows, results in the then-present value of such cash flows equaling the recorded investment of the pool at the time of the revised estimate. The table below presents a roll forward of accretable yield and income expected to be earned related to PCI loans and the amount of nonaccretable difference at the end of the period. Nonaccretable difference represents estimated contractually required payments in excess of estimated cash flows expected to be collected. The accretable yield represents the excess of estimated cash flows expected to be collected over the carrying amount of the PCI loans. Other represents reductions of accretable yield due to non-credit events such as interest rate reductions on variable rate PCI loans and prepayment activity on PCI loans. (Dollars in thousands) Three Months Ended March 31, 2017 March 31, 2016 Accretable Yield Balance at beginning of period $ 161,639 $ 208,844 Accretion of income (18,783 ) (20,843 ) Reclassification from nonaccretable difference 16,357 14,937 Other (6,559 ) (7,873 ) Balance at end of period $ 152,654 $ 195,065 Nonaccretable difference, balance at the end of the period $ 127,657 $ 134,060 The accretable yield is accreted into interest income over the estimated life of the PCI loans using the level yield method. The accretable yield will change due to changes in: • The estimate of the remaining life of PCI loans which may change the amount of future interest income, and possibly principal, expected to be collected; • The estimate of the amount of contractually required principal and interest payments over the estimated life that will not be collected (the nonaccretable difference); and • Indices for PCI loans with variable rates of interest. For PCI loans, the impact of loan modifications is included in the evaluation of expected cash flows for subsequent decreases or increases of cash flows. For variable rate PCI loans, expected future cash flows will be recalculated as the rates adjust over the lives of the loans. At acquisition, the expected future cash flows were based on the variable rates that were in effect at that time. The following is a summary of the major categories of loans outstanding as of March 31, 2017 and December 31, 2016 : (Dollars in thousands) Non-PCI Loans March 31, 2017 New Acquired PCI Loans Total Non-owner occupied commercial real estate $ 744,502 $ 215,582 $ 227,260 $ 1,187,344 Other commercial construction and land 208,508 76,406 65,487 350,401 Multifamily commercial real estate 79,411 16,266 20,319 115,996 1-4 family residential construction and land 131,600 26,007 313 157,920 Total commercial real estate 1,164,021 334,261 313,379 1,811,661 Owner occupied commercial real estate 910,444 233,223 169,419 1,313,086 Commercial and industrial loans 1,270,575 89,755 83,498 1,443,828 Total commercial 2,181,019 322,978 252,917 2,756,914 1-4 family residential 1,089,469 497,469 200,159 1,787,097 Home equity loans 179,315 259,135 63,649 502,099 Other consumer loans 315,339 80,287 27,149 422,775 Total consumer 1,584,123 836,891 290,957 2,711,971 Other 194,182 8,207 29,020 231,409 Total loans $ 5,123,345 $ 1,502,337 $ 886,273 $ 7,511,955 (Dollars in thousands) Non-PCI Loans December 31, 2016 New Acquired PCI Loans Total Loans Non-owner occupied commercial real estate $ 680,044 $ 221,304 $ 229,535 $ 1,130,883 Other commercial construction and land 182,486 73,248 71,888 327,622 Multifamily commercial real estate 77,694 19,108 20,713 117,515 1-4 family residential construction and land 105,816 33,831 383 140,030 Total commercial real estate 1,046,040 347,491 322,519 1,716,050 Owner occupied commercial real estate 901,957 239,982 179,466 1,321,405 Commercial and industrial loans 1,283,012 96,494 89,368 1,468,874 Total commercial 2,184,969 336,476 268,834 2,790,279 1-4 family residential 994,323 505,420 214,959 1,714,702 Home equity loans 172,883 268,093 66,783 507,759 Other consumer loans 330,423 88,134 30,415 448,972 Total consumer 1,497,629 861,647 312,157 2,671,433 Other 185,839 9,776 32,815 228,430 Total loans $ 4,914,477 $ 1,555,390 $ 936,325 $ 7,406,192 The following tables present the aging of the recorded investment in past due loans, based on contractual terms, as of March 31, 2017 : (Dollars in thousands) 30-89 Days Past Due Greater than 90 Days Past Due Non-accrual Total Non-purchased credit impaired loans Non-owner occupied commercial real estate $ — $ — $ 2,324 $ 2,324 Other commercial construction and land 120 — 192 312 Multifamily commercial real estate — — — — 1-4 family residential construction and land — — — — Total commercial real estate 120 — 2,516 2,636 Owner occupied commercial real estate — — 4,443 4,443 Commercial and industrial loans 3 — 760 763 Total commercial 3 — 5,203 5,206 1-4 family residential 625 — 968 1,593 Home equity loans 1,350 — 2,246 3,596 Other consumer loans 4,854 — 2,675 7,529 Total consumer 6,829 — 5,889 12,718 Other — — — — Total loans $ 6,952 $ — $ 13,608 $ 20,560 (Dollars in thousands) 30-89 Days Past Due Greater than 90 Days Past Due Non-accrual Total Purchased credit impaired loans * Non-owner occupied commercial real estate $ 13 $ 400 $ — $ 413 Other commercial construction and land 276 880 — 1,156 Multifamily commercial real estate — 432 — 432 1-4 family residential construction and land — — — — Total commercial real estate 289 1,712 — 2,001 Owner occupied commercial real estate 1,158 4,101 — 5,259 Commercial and industrial loans 333 333 — 666 Total commercial 1,491 4,434 — 5,925 1-4 family residential 1,920 2,592 — 4,512 Home equity loans 855 1,129 — 1,984 Other consumer loans 2,467 894 — 3,361 Total consumer 5,242 4,615 — 9,857 Other 294 681 — 975 Total loans $ 7,316 $ 11,442 $ — $ 18,758 The following tables present the aging of the recorded investment in past due loans, based on contractual terms, as of December 31, 2016 : (Dollars in thousands) 30-89 Days Past Due Greater than 90 Days Past Due and Still Accruing/Accreting Non-accrual Total Non-purchased credit impaired loans Non-owner occupied commercial real estate $ — $ — $ 2,584 $ 2,584 Other commercial construction and land 23 — 204 227 Multifamily commercial real estate — — — — 1-4 family residential construction and land 148 — — 148 Total commercial real estate 171 — 2,788 2,959 Owner occupied commercial real estate 2,633 — 2,950 5,583 Commercial and industrial loans 169 — 698 867 Total commercial 2,802 — 3,648 6,450 1-4 family residential 493 — 1,048 1,541 Home equity loans 1,336 — 1,568 2,904 Other consumer loans 8,143 — 2,397 10,540 Total consumer 9,972 — 5,013 14,985 Other — — — — Total loans $ 12,945 $ — $ 11,449 $ 24,394 (Dollars in thousands) 30-89 Days Past Due Greater than 90 Days Past Due and Still Accruing/Accreting Non-accrual Total Purchased credit impaired loans * Non-owner occupied commercial real estate $ — $ 1,130 $ — $ 1,130 Other commercial construction and land 550 777 — 1,327 Multifamily commercial real estate — 420 — 420 1-4 family residential construction and land — — — — Total commercial real estate 550 2,327 — 2,877 Owner occupied commercial real estate 1,844 3,776 — 5,620 Commercial and industrial loans 592 509 — 1,101 Total commercial 2,436 4,285 — 6,721 1-4 family residential 4,288 6,060 — 10,348 Home equity loans 1,128 1,470 — 2,598 Other consumer loans 2,558 1,048 — 3,606 Total consumer 7,974 8,578 — 16,552 Other 87 716 — 803 Total loans $ 11,047 $ 15,906 $ — $ 26,953 * Pooled PCI loans are not classified as nonaccrual as they are considered to be accruing because their interest income relates to the accretable yield recognized under accounting for purchased credit-impaired loans and not to contractual interest payments. Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed at origination and upon identification of a material change for all loans, on an annual basis for commercial loans exceeding $0.5 million , and at least quarterly for commercial loans not rated pass. The Company uses the following definitions for risk ratings: • Pass —These loans range from superior quality with minimal credit risk to loans requiring heightened management attention but that are still an acceptable risk and continue to perform as contracted. • Special Mention —Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. • Substandard —Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. • Doubtful —Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table summarizes loans, excluding PCI loans, by internal rating at March 31, 2017 : Substandard (Dollars in thousands) Pass Special Mention Accruing Non-accrual Doubtful Total Non-owner occupied commercial real estate $ 954,965 $ 2,795 $ — $ 2,324 $ — $ 960,084 Other commercial construction and land 284,722 — — 192 — 284,914 Multifamily commercial real estate 95,477 — 200 — — 95,677 1-4 family residential construction and land 157,607 — — — — 157,607 Total commercial real estate 1,492,771 2,795 200 2,516 — 1,498,282 Owner occupied commercial real estate 1,108,754 26,546 3,924 4,443 — 1,143,667 Commercial and industrial loans 1,327,963 16,219 15,388 760 — 1,360,330 Total commercial 2,436,717 42,765 19,312 5,203 — 2,503,997 1-4 family residential 1,582,693 1,146 2,131 968 — 1,586,938 Home equity loans 434,571 60 1,573 2,246 — 438,450 Other consumer loans 392,908 — 43 2,675 — 395,626 Total consumer 2,410,172 1,206 3,747 5,889 — 2,421,014 Other 202,389 — — — — 202,389 Total loans $ 6,542,049 $ 46,766 $ 23,259 $ 13,608 $ — $ 6,625,682 The following table summarizes loans, excluding PCI loans, by internal rating at December 31, 2016 : Substandard (Dollars in thousands) Pass Special Mention Accruing Non-accrual Doubtful Total Non-owner occupied commercial real estate $ 896,394 $ 1,251 $ 1,119 $ 2,584 $ — $ 901,348 Other commercial construction and land 255,530 — — 204 — 255,734 Multifamily commercial real estate 96,802 — — — — 96,802 1-4 family residential construction and land 139,647 — — — — 139,647 Total commercial real estate 1,388,373 1,251 1,119 2,788 — 1,393,531 Owner occupied commercial real estate 1,124,285 10,210 4,494 2,950 — 1,141,939 Commercial and industrial loans 1,351,581 16,709 10,518 698 — 1,379,506 Total commercial 2,475,866 26,919 15,012 3,648 — 2,521,445 1-4 family residential 1,495,653 899 2,143 1,048 — 1,499,743 Home equity loans 437,880 62 1,466 1,568 — 440,976 Other consumer loans 416,117 — 43 2,397 — 418,557 Total consumer 2,349,650 961 3,652 5,013 — 2,359,276 Other 195,615 — — — — 195,615 Total loans $ 6,409,504 $ 29,131 $ 19,783 $ 11,449 $ — $ 6,469,867 |