Loans | NOTE 4 – LOANS The Company engages in a full complement of lending activities, including real estate-related loans, agriculture-related loans, commercial and financial loans and consumer installment loans within select markets in Georgia, Alabama, Florida and South Carolina. Ameris concentrates the majority of its lending activities in real estate loans. While the risk of loss in the Company’s portfolio is primarily tied to the credit quality of the various borrowers, risk of loss may increase due to factors beyond the Company’s control, such as local, regional and/or national economic downturns. General conditions in the real estate market may also impact the relative risk in the real estate portfolio. Commercial, financial and agricultural loans include both secured and unsecured loans for working capital, expansion, crop production and other business purposes. Short-term working capital loans are secured by non-real estate collateral such as accounts receivable, crops, inventory and equipment. The Company evaluates the financial strength, cash flow, management, credit history of the borrower and the quality of the collateral securing the loan. The Bank often requires personal guarantees and secondary sources of repayment on commercial, financial and agricultural loans. Real estate loans include construction and development loans, commercial and farmland loans and residential loans. Construction and development loans include loans for the development of residential neighborhoods, one-to-four family residential construction loans to builders and consumers, and commercial real estate construction loans, primarily for owner-occupied properties. The Company limits its construction lending risk through adherence to established underwriting procedures. Commercial real estate loans include loans secured by owner-occupied commercial buildings for office, storage, retail, farmland and warehouse space. They also include non-owner occupied commercial buildings such as leased retail and office space. Commercial real estate loans may be larger in size and may involve a greater degree of risk than one-to-four family residential mortgage loans. Payments on such loans are often dependent on successful operation or management of the properties. The Company’s residential loans represent permanent mortgage financing and are secured by residential properties located within the Bank’s market areas. Consumer installment loans and other loans include automobile loans, boat and recreational vehicle financing, and secured and unsecured personal loans. Consumer loans carry greater risks than other loans, as the collateral can consist of rapidly depreciating assets such as automobiles and equipment that may not provide an adequate source of repayment of the loan in the case of default. Loans are stated at unpaid balances, net of unearned income and deferred loan fees. Balances within the major loans receivable categories are presented in the following table, excluding purchased non-covered and covered loans: (Dollars in Thousands) June 30, December 31, June 30, Commercial, financial and agricultural $ 373,202 $ 319,654 $ 304,588 Real estate – construction and development 205,019 161,507 149,346 Real estate – commercial and farmland 1,010,195 907,524 850,000 Real estate – residential 537,201 456,106 422,731 Consumer installment 30,080 30,782 31,902 Other 15,903 14,308 11,492 $ 2,171,600 $ 1,889,881 $ 1,770,059 Purchased non-covered loans are defined as loans that were acquired in bank acquisitions that are not covered by a loss-sharing agreement with the FDIC. Purchased non-covered loans totaling $808.3 million, $674.2 million and $702.1 million at June 30, 2015, December 31, 2014 and June 30, 2014, respectively, are not included in the above schedule. Purchased non-covered loans are shown below according to major loan type as of the end of the periods shown: (Dollars in Thousands) June 30, December 31, June 30, Commercial, financial and agricultural $ 45,337 $ 38,041 $ 41,583 Real estate – construction and development 75,302 58,362 64,084 Real estate – commercial and farmland 404,588 306,706 311,748 Real estate – residential 276,798 266,342 278,451 Consumer installment 6,288 4,788 6,265 $ 808,313 $ 674,239 $ 702,131 Purchased loan pools are defined as groups of loans that were not acquired in bank acquisitions or FDIC-assisted transactions. As of June 30, 2015, purchased loan pools totaled $269.0 million and consisted of whole-loan, adjustable rate residential mortgages on properties outside the Company’s markets, with principal balances totaling $263.8 million and $5.2 million of purchase premium paid at acquisition. At June 30, 2015, all loans included in the purchased loan pools were performing current loans, all risk-rated grade 20. The Company did not have any purchased loan pools at December 31, 2014 or June 30, 2014. Covered loans are defined as loans that were acquired in FDIC-assisted transactions that are covered by a loss-sharing agreement with the FDIC. Covered loans totaling $209.6 million, $271.3 million and $331.3 million at June 30, 2015, December 31, 2014 and June 30, 2014, respectively, are not included in the above schedules. Covered loans are shown below according to loan type as of the end of the periods shown: (Dollars in Thousands) June 30, December 31, June 30, Commercial, financial and agricultural $ 17,666 $ 21,467 $ 25,209 Real estate – construction and development 15,002 23,447 31,600 Real estate – commercial and farmland 111,772 147,627 188,643 Real estate – residential 64,982 78,520 85,518 Consumer installment 176 218 280 $ 209,598 $ 271,279 $ 331,250 Nonaccrual and Past Due Loans A loan is placed on nonaccrual status when, in management’s judgment, the collection of the interest income appears doubtful. Interest receivable that has been accrued and is subsequently determined to have doubtful collectability is charged against interest income. Interest payments on nonaccrual loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. Past due loans are loans whose principal or interest is past due 90 days or more. In some cases, where borrowers are experiencing financial difficulties, loans may be restructured to provide terms significantly different from the original contractual terms. The following table presents an analysis of loans accounted for on a nonaccrual basis, excluding purchased non-covered and covered loans: (Dollars in Thousands) June 30, December 31, June 30, Commercial, financial and agricultural $ 4,067 $ 1,672 $ 1,596 Real estate – construction and development 1,594 3,774 3,452 Real estate – commercial and farmland 8,938 8,141 8,831 Real estate – residential 5,650 7,663 7,795 Consumer installment 491 478 437 $ 20,740 $ 21,728 $ 22,111 The following table presents an analysis of purchased non-covered loans accounted for on a nonaccrual basis: (Dollars in Thousands) June 30, December 31, June 30, Commercial, financial and agricultural $ 309 $ 175 $ 143 Real estate – construction and development 1,483 1,119 2,273 Real estate – commercial and farmland 9,634 10,242 6,647 Real estate – residential 5,930 6,644 6,658 Consumer installment 88 69 49 $ 17,444 $ 18,249 $ 15,770 The following table presents an analysis of covered loans accounted for on a nonaccrual basis: (Dollars in Thousands) June 30, December 31, June 30, Commercial, financial and agricultural $ 7,948 $ 8,541 $ 12,254 Real estate – construction and development 3,120 7,601 8,028 Real estate – commercial and farmland 13,997 12,584 17,027 Real estate – residential 3,712 6,595 8,702 Consumer installment 94 91 127 $ 28,871 $ 35,412 $ 46,138 The following table presents an aging analysis of loans, excluding purchased non-covered and covered past due loans as of June 30, 2015, December 31, 2014 and June 30, 2014: Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of June 30, 2015: Commercial, financial & agricultural $ 840 $ 888 $ 3,891 $ 5,619 $ 367,583 $ 373,202 $ — Real estate – construction & development 1,201 374 1,536 3,111 201,908 205,019 — Real estate – commercial & farmland 1,958 2,823 7,014 11,795 998,400 1,010,195 — Real estate – residential 5,135 1,949 4,727 11,811 525,390 537,201 — Consumer installment loans 293 77 315 685 29,395 30,080 — Other — — — — 15,903 15,903 — Total $ 9,427 $ 6,111 $ 17,483 $ 33,021 $ 2,138,579 $ 2,171,600 $ — Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of December 31, 2014: Commercial, financial & agricultural $ 900 $ 233 $ 1,577 $ 2,710 $ 316,944 $ 319,654 $ — Real estate – construction & development 1,382 286 3,367 5,035 156,472 161,507 — Real estate – commercial & farmland 2,859 635 7,668 11,162 896,362 907,524 — Real estate – residential 3,953 2,334 6,755 13,042 443,064 456,106 — Consumer installment loans 634 158 366 1,158 29,624 30,782 1 Other — — — — 14,308 14,308 — Total $ 9,728 $ 3,646 $ 19,733 $ 33,107 $ 1,856,774 $ 1,889,881 $ 1 Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of June 30, 2014: Commercial, financial & agricultural $ 1,180 $ 966 $ 1,077 $ 3,223 $ 301,365 $ 304,588 $ — Real estate – construction & development 3,942 296 3,449 7,687 141,659 149,346 — Real estate – commercial & farmland 4,622 1,860 7,404 13,886 836,114 850,000 — Real estate – residential 5,806 3,829 7,197 16,832 405,899 422,731 — Consumer installment loans 345 176 310 831 31,071 31,902 — Other — — — — 11,492 11,492 — Total $ 15,895 $ 7,127 $ 19,437 $ 42,459 $ 1,727,600 $ 1,770,059 $ — The following table presents an analysis of purchased non-covered past due loans as of June 30, 2015, December 31, 2014 and June 30, 2014: Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of June 30, 2015: Commercial, financial & agricultural $ — $ 1,101 $ 202 $ 1,303 $ 44,034 $ 45,337 $ — Real estate – construction & development 245 — 1,026 1,271 74,031 75,302 — Real estate – commercial & farmland 2,115 724 9,062 11,901 392,687 404,588 — Real estate – residential 3,848 1,400 5,369 10,617 266,181 276,798 — Consumer installment loans 6 — 84 90 6,198 6,288 — Total $ 6,214 $ 3,225 $ 15,743 $ 25,182 $ 783,131 $ 808,313 $ — Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of December 30, 2014: Commercial, financial & agricultural $ 461 $ 90 $ 175 $ 726 $ 37,315 $ 38,041 $ — Real estate – construction & development 790 1,735 1,117 3,642 54,720 58,362 — Real estate – commercial & farmland 2,107 1,194 9,529 12,830 293,876 306,706 — Real estate – residential 6,907 1,401 6,369 14,677 251,665 266,342 — Consumer installment loans 82 — 65 147 4,641 4,788 — Total $ 10,347 $ 4,420 $ 17,255 $ 32,022 $ 642,217 $ 674,239 $ — Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of June 30, 2014: Commercial, financial & agricultural $ 137 $ 26 $ 143 $ 306 $ 41,277 $ 41,583 $ — Real estate – construction & development 712 168 2,165 3,045 61,039 64,084 — Real estate – commercial & farmland 1,263 1,605 6,647 9,515 302,233 311,748 — Real estate – residential 6,952 983 6,144 14,079 264,372 278,451 — Consumer installment loans 23 29 47 99 6,166 6,265 — Total $ 9,087 $ 2,811 $ 15,146 $ 27,044 $ 675,087 $ 702,131 $ — The following table presents an aging analysis of covered loans as of June 30, 2015, December 31, 2014 and June 30, 2014: Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of June 30, 2015: Commercial, financial & agricultural $ 237 $ 240 $ 1,670 $ 2,147 $ 15,519 $ 17,666 $ — Real estate – construction & development 292 31 3,045 3,368 11,634 15,002 143 Real estate – commercial & farmland 699 81 9,396 10,176 101,596 111,772 — Real estate – residential 2,690 927 2,122 5,739 59,243 64,982 — Consumer installment loans — — 50 50 126 176 — Total $ 3,918 $ 1,279 $ 16,283 $ 21,480 $ 188,118 $ 209,598 $ 143 Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of December 31, 2014: Commercial, financial & agricultural $ 451 $ 136 $ 1,878 $ 2,465 $ 19,002 $ 21,467 $ — Real estate – construction & development 238 226 6,703 7,167 16,280 23,447 — Real estate – commercial & farmland 4,371 1,486 7,711 13,568 134,059 147,627 714 Real estate – residential 3,464 962 5,656 10,082 68,438 78,520 — Consumer installment loans 10 — 91 101 117 218 — Total $ 8,534 $ 2,810 $ 22,039 $ 33,383 $ 237,896 $ 271,279 $ 714 Loans Loans Loans 90 Total Current Total Loans 90 (Dollars in Thousands) As of June 30, 2014: Commercial, financial & agricultural $ 16 $ 467 $ 6,909 $ 7,392 $ 17,817 $ 25,209 $ — Real estate – construction & development 551 459 7,708 8,718 22,882 31,600 — Real estate – commercial & farmland 6,399 139 10,443 16,981 171,662 188,643 — Real estate – residential 2,490 690 5,939 9,119 76,399 85,518 — Consumer installment loans — 49 56 105 175 280 — Total $ 9,456 $ 1,804 $ 31,055 $ 42,315 $ 288,935 $ 331,250 $ — Impaired Loans Loans are considered impaired when, based on current information and events, it is probable the Company will be unable to collect all amounts due in accordance with the original contractual terms of the loan agreements. When determining if the Company will be unable to collect all principal and interest payments due in accordance with the contractual terms of the loan agreement, the Company considers the borrower’s capacity to pay, which includes such factors as the borrower’s current financial statements, an analysis of global cash flow sufficient to pay all debt obligations and an evaluation of secondary sources of repayment, such as guarantor support and collateral value. Impaired loans include loans on nonaccrual status and troubled debt restructurings. The Company individually assesses for impairment all nonaccrual loans greater than $200,000 and rated substandard or worse and all troubled debt restructurings greater than $100,000. If a loan is deemed impaired, a specific valuation allowance is allocated, if necessary, so that the loan is reported net, at the present value of estimated future cash flows using the loan’s existing rate or at the fair value of collateral if repayment is expected solely from the collateral. Interest payments on impaired loans are typically applied to principal unless collectability of the principal amount is reasonably assured, in which case interest is recognized on a cash basis. The following is a summary of information pertaining to impaired loans, excluding purchased non-covered and covered loans: As of and For the Period Ended June 30, December 31, June 30, (Dollars in Thousands) Nonaccrual loans $ 20,740 $ 21,728 $ 22,111 Troubled debt restructurings not included above 12,467 12,759 17,337 Total impaired loans $ 33,207 $ 34,487 $ 39,448 Quarter-to-date interest income recognized on impaired loans $ 192 $ 237 $ 1,133 Year-to-date interest income recognized on impaired loans $ 344 $ 1,991 $ 1,423 Quarter-to-date foregone interest income on impaired loans $ 311 $ 323 $ 375 Year-to-date foregone interest income on impaired loans $ 629 $ 1,491 $ 815 The following table presents an analysis of information pertaining to impaired loans, excluding purchased non-covered and covered loans as of June 30, 2015, December 31, 2014 and June 30, 2014: Unpaid Recorded Recorded Total Related Three Month Six Month (Dollars in Thousands) As of June 30, 2015: Commercial, financial & agricultural $ 6,004 $ 442 $ 3,903 $ 4,345 $ 458 $ 2,819 $ 2,533 Real estate – construction & development 3,765 — 2,416 2,416 445 3,245 3,648 Real estate – commercial & farmland 18,117 5,960 9,595 15,555 1,243 15,378 15,125 Real estate – residential 11,743 1,153 9,199 10,352 1,825 11,555 12,006 Consumer installment loans 633 — 539 539 8 494 507 Total $ 40,262 $ 7,555 $ 25,652 $ 33,207 $ 3,979 $ 33,491 $ 33,819 Unpaid Recorded Recorded Total Related Three Month Twelve Month (Dollars in Thousands) As of December 31, 2014: Commercial, financial & agricultural $ 3,387 $ 6 $ 1,956 $ 1,962 $ 395 $ 2,457 $ 3,021 Real estate – construction & development 8,325 448 4,005 4,453 771 4,703 5,368 Real estate – commercial & farmland 17,514 4,967 9,651 14,618 1,859 15,341 15,972 Real estate – residential 15,571 3,514 9,407 12,921 974 14,244 16,317 Consumer installment loans 618 — 533 533 9 527 519 Total $ 45,415 $ 8,935 $ 25,552 $ 34,487 $ 4,008 $ 37,272 $ 41,197 Unpaid Recorded Recorded Total Related Three Month Six Month (Dollars in Thousands) As of June 30, 2014: Commercial, financial & agricultural $ 3,398 $ — $ 1,852 $ 1,852 $ 298 $ 2,786 $ 3,397 Real estate – construction & development 9,336 — 5,532 5,532 798 5,783 5,811 Real estate – commercial & farmland 19,215 — 16,421 16,421 1,629 16,851 16,394 Real estate – residential 18,313 — 15,131 15,131 884 16,563 17,698 Consumer installment loans 638 — 512 512 10 530 514 Total $ 50,900 $ — $ 39,448 $ 39,448 $ 3,619 $ 42,513 $ 43,814 The following is a summary of information pertaining to purchased non-covered impaired loans: As of and For the Period Ended June 30, December 31, June 30, (Dollars in Thousands) Nonaccrual loans $ 17,444 $ 18,249 $ 15,770 Troubled debt restructurings not included above 6,792 1,212 — Total impaired loans $ 24,236 $ 19,461 $ 15,770 Quarter-to-date interest income recognized on impaired loans $ 143 $ 64 $ 41 Year-to-date interest income recognized on impaired loans $ 161 $ 132 $ 41 Quarter-to-date foregone interest income on impaired loans $ 451 $ 521 $ 426 Year-to-date foregone interest income on impaired loans $ 923 $ 1,759 $ 652 The following table presents an analysis of information pertaining to purchased non-covered impaired loans as of June 30, 2015, December 31, 2014 and June 30, 2014: Unpaid Recorded Recorded Total Related Three Six Month (Dollars in Thousands) As of June 30, 2015: Commercial, financial & agricultural $ 1,476 $ 309 $ — $ 309 $ — $ 254 $ 227 Real estate – construction & development 9,656 1,857 — 1,857 — 1,485 1,469 Real estate – commercial & farmland 17,043 13,691 — 13,691 — 11,753 11,366 Real estate – residential 12,992 8,285 — 8,285 — 7,982 7,718 Consumer installment loans 111 94 — 94 — 61 64 Total $ 41,278 $ 24,236 $ — $ 24,236 $ — $ 21,535 $ 20,844 Unpaid Recorded Recorded Total Related Three Month Twelve Month (Dollars in Thousands) As of December 31, 2014: Commercial, financial & agricultural $ 1,366 $ 175 $ — $ 175 $ — $ 277 $ 165 Real estate – construction & development 5,161 1,436 — 1,436 — 2,242 1,643 Real estate – commercial & farmland 15,007 10,588 — 10,588 — 11,148 7,484 Real estate – residential 12,283 7,191 — 7,191 — 8,447 7,084 Consumer installment loans 172 71 — 71 — 124 68 Total $ 33,989 $ 19,461 $ — $ 19,461 $ — $ 22,238 $ 16,444 Unpaid Recorded Recorded Total Related Three Month Six Month (Dollars in Thousands) As of June 30, 2014: Commercial, financial & agricultural $ 550 $ 143 $ — $ 143 $ — $ 130 $ 90 Real estate – construction & development 4,649 2,273 — 2,273 — 1,702 1,243 Real estate – commercial & farmland 9,848 6,647 — 6,647 — 6,738 5,043 Real estate – residential 10,598 6,658 — 6,658 — 6,933 6,175 Consumer installment loans 65 49 — 49 — 41 31 Total $ 25,710 $ 15,770 $ — $ 15,770 $ — $ 15,544 $ 12,582 The following is a summary of information pertaining to covered impaired loans: As of and For the Period Ended June 30, December 31, June 30, (Dollars in Thousands) Nonaccrual loans $ 28,871 $ 35,412 $ 46,138 Troubled debt restructurings not included above 17,500 22,619 9,221 Total impaired loans $ 46,371 $ 58,031 $ 55,359 Quarter-to-date interest income recognized on impaired loans $ 219 $ 443 $ 796 Year-to-date interest income recognized on impaired loans $ 431 $ 2,057 $ 1,193 Quarter-to-date foregone interest income on impaired loans $ 409 $ 571 $ 843 Year-to-date foregone interest income on impaired loans $ 947 $ 3,123 $ 1,892 The following table presents an analysis of information pertaining to covered impaired loans as of June 30, 2015, December 31, 2014 and June 30, 2014: Unpaid Recorded Recorded Total Related Three Month Six Month (Dollars in Thousands) As of June 30, 2015: Commercial, financial & agricultural $ 14,260 $ 7,951 $ — $ 7,951 $ — $ 8,869 $ 8,773 Real estate – construction & development 29,895 5,953 — 5,953 — 7,819 8,757 Real estate – commercial & farmland 37,426 17,970 — 17,970 — 21,795 21,418 Real estate – residential 18,226 14,402 — 14,402 — 16,600 17,084 Consumer installment loans 125 95 — 95 — 99 97 Total $ 99,932 $ 46,371 $ — $ 46,371 $ — $ 55,179 $ 56,129 Unpaid Recorded Recorded Total Related Three Month Twelve Month (Dollars in Thousands) As of December 31, 2014: Commercial, financial & agricultural $ 14,385 $ 8,582 $ — $ 8,582 $ — $ 8,525 $ 9,325 Real estate – construction & development 27,289 10,638 — 10,638 — 11,279 13,935 Real estate – commercial & farmland 31,309 20,663 — 20,663 — 21,890 28,057 Real estate – residential 22,860 18,054 — 18,054 — 18,242 20,776 Consumer installment loans 124 94 — 94 — 100 160 Total $ 95,967 $ 58,031 $ — $ 58,031 $ — $ 60,036 $ 72,253 Unpaid Recorded Recorded Total Related Three Month Six Month (Dollars in Thousands) As of June 30, 2014: Commercial, financial & agricultural $ 14,694 $ 12,266 $ — $ 12,266 $ — $ 11,153 $ 9,858 Real estate – construction & development 12,921 11,048 — 11,048 — 14,541 15,706 Real estate – commercial & farmland 27,742 24,007 — 24,007 — 27,877 32,167 Real estate – residential 21,874 19,793 — 19,793 — 21,199 22,465 Consumer installment loans 161 127 — 127 — 130 200 Total $ 77,392 $ 67,241 $ — $ 67,241 $ — $ 74,899 $ 80,397 Credit Quality Indicators The Company uses a nine category risk grading system to assign a risk grade to each loan in the portfolio. Every loan is assigned a risk rating, with the exception of credit card receivables and overdraft protection loans, which are treated as pools for risk-rating purposes. Relationships greater than $1.0 million and a sample of relationships greater than $250,000 are reviewed annually by the Bank’s independent internal loan review department or an independent third party loan review firm. The following is a description of the general characteristics of the grades: Grade 10 – Prime Credit – Grade 15 – Good Credit – Satisfactory Credit Grade 20 – Satisfactory Credit Grade 23 – Performing, Under-Collateralized Credit – Grade 25 – Minimum Acceptable Credit – Satisfactory Credit Grade 30 – Other Asset Especially Mentioned – Grade 40 – Substandard – Grade 50 – Doubtful – Grade 60 – Loss – The following table presents the loan portfolio, excluding purchased non-covered and covered loans, by risk grade as of June 30, 2015: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ 173,795 $ 268 $ 150 $ 1,606 $ 6,114 $ — $ 181,933 15 25,447 3,402 127,090 85,812 1,319 — 243,070 20 96,169 47,207 592,636 334,999 17,833 15,903 1,104,747 23 635 8,071 11,984 6,655 55 — 27,400 25 69,304 140,119 248,227 83,207 3,807 — 544,664 30 2,566 2,510 11,088 8,612 244 — 25,020 40 5,286 3,442 19,020 16,310 708 — 44,766 50 — — — — — — — 60 — — — — — — — Total $ 373,202 $ 205,019 $ 1,010,195 $ 537,201 $ 30,080 $ 15,903 $ 2,171,600 The following table presents the loan portfolio, excluding purchased non-covered and covered loans, by risk grade as of December 31, 2014: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ 121,355 $ 268 $ 155 $ 226 $ 6,573 $ — $ 128,577 15 25,318 4,010 128,170 59,301 1,005 — 217,804 20 100,599 47,541 511,198 256,758 17,544 14,308 947,948 23 56 8,933 10,507 9,672 37 — 29,205 25 62,519 93,514 224,464 102,998 4,692 — 488,187 30 3,758 1,474 13,035 7,459 257 — 25,983 40 6,049 5,767 19,995 19,692 673 — 52,176 50 — — — — 1 — 1 60 — — — — — — — Total $ 319,654 $ 161,507 $ 907,524 $ 456,106 $ 30,782 $ 14,308 $ 1,889,881 The following table presents the loan portfolio, excluding purchased non-covered and covered loans, by risk grade as of June 30, 2014: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ 103,726 $ — $ 255 $ 505 $ 6,356 $ — $ 110,842 15 24,620 4,678 141,846 54,388 1,120 — 226,652 20 102,278 48,008 460,715 226,149 17,714 11,492 866,356 23 123 9,215 9,318 9,479 294 — 28,429 25 65,882 77,973 197,381 103,846 5,281 — 450,363 30 4,004 2,680 12,914 13,568 194 — 33,360 40 3,955 6,792 27,571 14,786 943 — 54,047 50 — — — 10 — — 10 60 — — — — — — — Total $ 304,588 $ 149,346 $ 850,000 $ 422,731 $ 31,902 $ 11,492 $ 1,770,059 The following table presents the purchased non-covered loan portfolio by risk grade as of June 30, 2015: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ 9,091 $ — $ 80 $ — $ 952 $ — $ 10,123 15 1,377 866 8,710 41,641 626 — 53,220 20 12,545 16,979 190,219 139,792 2,769 — 362,304 23 — 240 3,792 6,505 — — 10,537 25 18,556 49,070 165,267 65,818 1,700 — 300,411 30 2,462 3,409 19,042 9,803 63 — 34,779 40 1,276 4,738 17,478 13,217 178 — 36,887 50 30 — — 22 — — 52 60 — — — — — — — Total $ 45,337 $ 75,302 $ 404,588 $ 276,798 $ 6,288 $ — $ 808,313 The following table presents the purchased non-covered loan portfolio by risk grade as of December 31, 2014: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ 6,624 $ — $ — $ 290 $ 480 $ — $ 7,394 15 1,376 552 13,277 14,051 501 — 29,727 20 13,657 12,991 116,308 64,083 1,647 — 208,686 23 73 — 3,207 3,298 — — 6,578 25 13,753 36,230 144,293 164,959 1,920 — 361,155 30 1,618 4,365 12,279 7,444 41 — 25,747 40 910 4,254 17,342 12,184 199 — 34,889 50 30 — — 33 — — 63 60 — — — — — — — Total $ 38,041 $ 58,362 $ 306,706 $ 266,342 $ 4,788 $ — $ 674,239 The following table presents the purchased non-covered loan portfolio by risk grade as of June 30, 2014: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ 3,494 $ — $ — $ 293 $ 557 $ — $ 4,344 15 4,728 245 14,191 15,839 537 — 35,540 20 11,567 12,905 94,598 64,937 2,683 — 186,690 23 — — — 165 — — 165 25 18,251 42,127 175,427 178,523 2,343 — 416,671 30 3,162 4,722 16,078 8,326 21 — 32,309 40 381 4,085 11,454 10,368 124 — 26,412 50 — — — — — — — 60 — — — — — — — Total $ 41,583 $ 64,084 $ 311,748 $ 278,451 $ 6,265 $ — $ 702,131 The following table presents the covered loan portfolio by risk grade as of June 30, 2015: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ — $ — $ — $ — $ — $ — $ — 15 — — 488 125 — — 613 20 580 1,218 17,382 12,571 43 — 31,794 23 68 — 5,255 6,083 — — 11,406 25 4,089 8,142 60,682 30,870 37 — 103,820 30 4,923 2,409 4,165 5,730 — — 17,227 40 8,006 3,233 23,800 9,603 96 — 44,738 50 — — — — — — — 60 — — — — — — — Total $ 17,666 $ 15,002 $ 111,772 $ 64,982 $ 176 $ — $ 209,598 The following table presents the covered loan portfolio by risk grade as of December 31, 2014: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ — $ — $ — $ — $ — $ — $ — 15 — 1 761 525 — — 1,287 20 917 3,184 23,167 14,089 77 — 41,434 23 164 537 11,404 6,642 — — 18,747 25 5,181 9,406 80,334 33,124 37 — 128,082 30 4,808 2,753 5,302 8,050 — — 20,913 40 10,397 7,566 26,659 16,090 104 — 60,816 50 — — — — — — — 60 — — — — — — — Total $ 21,467 $ 23,447 $ 147,627 $ 78,520 $ 218 $ — $ 271,279 The following table presents the covered loan portfolio by risk grade as of June 30, 2014: Risk Grade Commercial, Real estate - Real estate - Real estate - Consumer Other Total (Dollars in Thousands) 10 $ — $ — $ — $ — $ — $ — $ — 15 — 2 822 629 — — 1,453 20 1,133 5,524 33,050 17,143 68 — 56,918 23 124 555 15,528 5,557 — — 21,764 25 6,569 9,251 94,504 36,507 40 — 146,871 30 4,398 4,802 9,959 8,326 2 — 27,487 40 12,985 11,466 34,780 17,356 170 — 76,757 50 — — — — — — — 60 — — — — — — — Total $ 25,209 $ 31,600 $ 188,643 $ 85,518 $ 280 $ — $ 331,250 Troubled Debt Restructurings The restructuring of a loan is considered a “troubled debt restructuring” if both (i) the borrower is experiencing financial difficulties and (ii) the Company has granted a concession. Concessions may include interest rate reductions to below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses. The Company has exhibited the greatest success for rehabilitation of the loan by a reduction in the rate alone (maintaining the amortization of the debt) or a combination of a rate reduction and the forbearance of previously past due interest or principal. This has most typically been evidenced in certain commercial real estate loans whereby a disruption in the borrower’s cash flow resulted in an extended past due status, of which the borrower was unable to catch up completely as the cash flow of the property ultimately stabilized at a level lower than its original level. A reduction in rate, coupled with a forbearance of unpaid principal and/or interest, allowed the net cash flows to service the debt under the modified terms. The Company’s policy requires a restructure request to be supported by a current, well-documented credit evaluation of the borrower’s financial condition and a collateral evaluation that is no older than six months from the date of the restructure. Key factors of that evaluation include the documentation of current, recurring cash flows, support provided by the guarantor(s) and the current valuation of the collateral. If the appraisal in the file is older than six months, an evaluation must be made as to the continued reasonableness of the valuation. For certain income-producing properties, current rent rolls and/or other income information can be utilized to support the appraisal valuation, when coupled with documented cap rates within our markets and a physical inspection of the collateral to validate the current condition. The Company’s policy states that in the event a loan has been identified as a troubled debt restructuring, it should be assigned a grade of substandard and placed on nonaccrual status until such time the borrower has demonstrated the ability to service the loan payments based on the restructured terms – generally defined as six months of satisfactory payment history. Missed payments under the original loan terms are not considered under the new structure; however, subsequent missed payments are considered non-performance and are not considered toward the six month required term of satisfactory payment history. The Company’s loan policy states that a nonaccrual loan may be returned to accrual status when (i) none of its principal and interest is due and unpaid, and the Company expects repayment of the remaining contractual principal and interest or (ii) it otherwise becomes well secured and in the process of collection. Restoration to accrual status on any given loan must be supported by a well-documented credit evaluation of the borrower’s financial condition and the prospects for full repayment, approved by the Company’s Chief Credit Officer. In the normal course of business, the Company renews loans with a modification of the interest rate or terms that are not deemed as troubled debt restructurings because the borrower is not experiencing financial difficulty. The Company modified loans in the first six months of 2015 and 2014 totaling $54.8 million and $8.4 million, respectively, under such parameters. As of June 30, 2015, December 31, 2014 and June 30, 2014, the Company had a balance of $14.0 million, $15.3 million and $21.1 million, respectively, in troubled debt restructurings, excluding purchased non-covered and covered loans. The Company has recorded $1.6 million, $2.2 million and $3.0 million in previous charge-offs on such loans at June 30, 2015, December 31, 2014 and June 30, 2014, respectively. The Company’s balance in the allowance for loan losses allocated to such troubled debt restructurings was $210,000, $231,000 and $398,000 at June 30, 2015, December 31, 2014 and June 30, 2014, respectively. At June 30, 2015, the Company did not have any commitments to lend additional funds to debtors whose terms have been modified in troubled restructurings. During the six months ending June 30, 2015 and 2014, the Company modified loans as troubled debt restructurings, excluding purchased non-covered and covered loans, with principal balances of $782,000 and $1.7 million, respectively, and these modifications did not have |