Loans and Allowance for Loan Losses | Note 4 - Loans and Allowance for Loan Losses The following is a summary of non‑acquired loans: December 31, (Dollars in thousands) 2017 2016 Non-acquired loans: Commercial non-owner occupied real estate: Construction and land development $ 830,875 $ 580,464 Commercial non-owner occupied 1,008,893 714,715 Total commercial non-owner occupied real estate 1,839,768 1,295,179 Consumer real estate: Consumer owner occupied 1,530,260 1,197,621 Home equity loans 437,642 383,218 Total consumer real estate 1,967,902 1,580,839 Commercial owner occupied real estate 1,262,776 1,177,745 Commercial and industrial 815,187 671,398 Other income producing property 193,847 178,238 Consumer 378,985 324,238 Other loans 33,690 13,404 Total non-acquired loans 6,492,155 5,241,041 Less allowance for loan losses (43,448) (36,960) Non-acquired loans, net $ 6,448,707 $ 5,204,081 The above table includes deferred fees, net of deferred costs, totaling $466,000 and $341,000 at December 31, 2017 and 2016, respectively. The following is a summary of acquired non‑credit impaired loans accounted for under FASB ASC Topic 310‑20, net of the related discount: December 31, (Dollars in thousands) 2017 2016 FASB ASC Topic 310-20 acquired loans: Commercial non-owner occupied real estate: Construction and land development $ 403,357 $ 10,090 Commercial non-owner occupied 817,166 34,628 Total commercial non-owner occupied real estate 1,220,523 44,718 Consumer real estate: Consumer owner occupied 710,611 408,270 Home equity loans 320,591 160,879 Total consumer real estate 1,031,202 569,149 Commercial owner occupied real estate 521,818 27,195 Commercial and industrial 398,696 13,641 Other income producing property 196,669 39,342 Consumer 137,710 142,654 Other 1,289 — Total FASB ASC Topic 310-20 acquired loans $ 3,507,907 $ 836,699 In accordance with FASB ASC Topic 310‑30, the Company aggregated acquired loans that have common risk characteristics into pools of loan categories as described in the table below. The following is a summary of acquired credit impaired loans accounted for under FASB ASC Topic 310‑30 (identified as credit impaired at the time of acquisition), net of related discount: December 31, (Dollars in thousands) 2017 2016 FASB ASC Topic 310-30 acquired loans: Commercial real estate $ 234,595 $ 218,821 Commercial real estate—construction and development 49,649 44,373 Residential real estate 260,787 258,100 Consumer 51,453 59,300 Commercial and industrial 26,946 25,347 Total FASB ASC Topic 310-30 acquired loans 623,430 605,941 Less allowance for loan losses (4,627) (3,395) FASB ASC Topic 310-30 acquired loans, net $ 618,803 $ 602,546 Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting fair values of FASB ASC Topic 310-30 acquired loans impaired at the acquisition date for Park Sterling Corporation (November 30, 2017) are as follows: November 30, 2017 Loans Impaired (Dollars in thousands) at Acquisition Contractual principal and interest $ 92,600 Non-accretable difference (12,840) Cash flows expected to be collected 79,760 Accretable difference (8,829) Carrying value $ 70,931 The table above excludes $2.2 billion ($2.3 billion in contractual principal less a $50.1 million fair value adjustment) in acquired loans at fair value that were identified as either performing with no discount related to the credit or as revolving lines of credit (commercial or consumer) as of the acquisition date of Park and will be accounted for under FASB ASC Topic 310-20. Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting fair values of FASB ASC Topic 310-30 acquired loans impaired at the acquisition date for SBFC (January 3, 2017) are as follows: January 3, 2017 Loans Impaired (Dollars in thousands) at Acquisition Contractual principal and interest $ 73,365 Non-accretable difference (12,912) Cash flows expected to be collected 60,453 Accretable difference (4,603) Carrying value $ 55,850 The table above excludes $991.5 million ($1.01 billion in contractual principal less a $18.8 million fair value adjustment) in acquired loans at fair value that were identified as either performing with no discount related to the credit or as revolving lines of credit (commercial or consumer) as of the acquisition date of Southeastern and will be accounted for under FASB ASC Topic 310-20. Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting carrying values of total acquired credit impaired loans as of December 31, 2017 and 2016 are as follows: December 31, (Dollars in thousands) 2017 2016 Contractual principal and interest $ 795,850 $ 778,822 Non-accretable difference (39,324) (17,502) Cash flows expected to be collected 756,526 761,320 Accretable yield (133,096) (155,379) Carrying value $ 623,430 $ 605,941 Allowance for acquired loan losses $ (4,627) $ (3,395) Income on acquired credit impaired loans that are not impaired at the acquisition date is recognized in the same manner as loans impaired at the acquisition date. A portion of the fair value discount on acquired non‑impaired loans has been ascribed as an accretable yield that is accreted into interest income over the estimated remaining life of the loans. The remaining nonaccretable difference represents cash flows not expected to be collected. The following are changes in the carrying value of acquired credit impaired loans: Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Balance at beginning of period $ 602,546 $ 733,870 $ 919,402 Fair value of acquired loans 126,781 — — Net reductions for payments, foreclosures, and accretion (109,292) (131,635) (189,191) Change in the allowance for loan losses on acquired loans (1,232) 311 3,659 Balance at end of period, net of allowance for loan losses on acquired loans $ 618,803 $ 602,546 $ 733,870 The following are changes in the carrying amount of accretable yield for acquired credit impaired loans: Year Ended December 31, (Dollars in thousands) 2017 2016 2015 Balance at beginning of period $ 155,379 $ 201,538 $ 306,826 Addition from the SBFC acquisition 4,910 — — Addition from the PSC acquisition 8,829 — — Accretion (57,434) (72,757) (97,847) Reclass of nonaccretable difference due to improvement in expected cash flows 21,890 25,808 61,985 Other changes, net (478) 790 (69,426) Balance at end of period $ 133,096 $ 155,379 $ 201,538 In 2017, the accretable yield balance declined by $22.3 million as loan accretion (income) of $57.4 million was recognized. This was partially offset by improved expected cash flows of $21.9 million and by the additions from the SBFC and PSC acquisitions. As of December 31, 2017, the table above excludes $3.5 billion ($3.6 billion in contractual principal less a $65.4 million discount) in acquired loans which are accounted for under FASB ASC Topic 310-20. These loans were identified as either performing with no discount related to the credit or as a revolving lines of credit (commercial or consumer) at acquisition. As of December 31, 2016, the balance of these acquired loans totaled $836.7 million ($848.3 million in contractual principal less an $11.6 million remaining discount). Our loan loss policy adheres to U.S. GAAP as well as interagency guidance. The allowance for loan losses is based upon estimates made by management. We maintain an allowance for loan losses at a level that we believe is appropriate to cover estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated credit losses inherent in the remainder of our loan portfolio. Arriving at the allowance involves a high degree of management judgment and results in a range of estimated losses. We regularly evaluate the adequacy of the allowance through our internal risk rating system, outside credit review, and regulatory agency examinations to assess the quality of the loan portfolio and identify problem loans. The evaluation process also includes our analysis of current economic conditions, composition of the loan portfolio, past due and nonaccrual loans, concentrations of credit, lending policies and procedures, and historical loan loss experience. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on, among other factors, changes in economic conditions in our markets. In addition, regulatory agencies, as an integral part of their examination process, periodically review our allowances for losses on loans. These agencies may require management to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these and other factors, it is possible that the allowances for losses on loans may change. The provision for loan losses is charged to expense in an amount necessary to maintain the allowance at an appropriate level. The allowance for loan losses on non‑acquired loans consists of general and specific reserves. The general reserves are determined by applying loss percentages to the portfolio that are based on historical loss experience for each class of loans and management’s evaluation and “risk grading” of the loan portfolio. Additionally, the general economic and business conditions affecting key lending areas, credit quality trends, collateral values, loan volumes and concentrations, seasoning of the loan portfolio, the findings of internal and external credit reviews and results from external bank regulatory examinations are included in this evaluation. Currently, these adjustments are applied to the non‑acquired loan portfolio when estimating the level of reserve required. The specific reserves are determined on a loan‑by‑loan basis based on management’s evaluation of our exposure for each credit, given the current payment status of the loan and the value of any underlying collateral. These are loans classified by management as doubtful or substandard. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. Generally, the need for specific reserve is evaluated on impaired loans, and once a specific reserve is established for a loan, a charge off of that amount occurs in the quarter subsequent to the establishment of the specific reserve. Loans that are determined to be impaired are provided a specific reserve, if necessary, and are excluded from the calculation of the general reserves. Beginning with the FFHI acquisition, the Company segregated the loan portfolio into performing loans (“non‑credit impaired) and purchased credit impaired loans. The performing loans and revolving type loans are accounted for under FASB ASC 310‑20, with each loan being accounted for individually. The allowance for loan losses on these loans will be measured and recorded consistent with non‑acquired loans. The acquired credit impaired loans will follow the description in the next paragraph. In determining the acquisition date fair value of purchased loans, and in subsequent accounting, the Company generally aggregates purchased loans into pools of loans with common risk characteristics. Expected cash flows at the acquisition date in excess of the fair value of loans are recorded as interest income over the life of the loans using a level yield method if the timing and amount of the future cash flows of the pool is reasonably estimable. Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are reclassified from the non‑accretable difference to accretable yield and recognized as interest income prospectively. Decreases in expected cash flows after the acquisition date are recognized by recording an allowance for loan losses. Management analyzes the acquired loan pools using various assessments of risk to determine an expected loss. The expected loss is derived based upon a loss given default based upon the collateral type and/or detailed review by loan officers and the probability of default that is determined based upon historical data at the loan level. All acquired loans managed by Special Asset Management are reviewed quarterly and assigned a loss given default. Acquired loans not managed by Special Asset Management are reviewed twice a year in a similar method to the Company’s originated portfolio of loans which follow review thresholds based on risk rating categories. In the fourth quarter of 2015, the Company modified its methodology to a more granular approach in determining loss given default on substandard loans with a net book balance between $100,000 and $500,000 by adjusting the loss given default to 90% of the most current collateral valuation based on appraised value. Substandard loans greater than $500,000 were individually assigned loss given defaults each quarter. Trends are reviewed in terms of accrual status, past due status, and weighted‑average grade of the loans within each of the accounting pools. In addition, the relationship between the change in the unpaid principal balance and change in the mark is assessed to correlate the directional consistency of the expected loss for each pool. Prior to the termination of our loss share agreements in June 2016, offsetting the impact of the provision established for acquired loans covered under FDIC loss share agreements, the receivable from the FDIC was adjusted to reflect the indemnified portion of the post‑acquisition exposure with a corresponding credit to the provision for loan losses. (For further discussion of the Company’s allowance for loan losses on acquired loans, see Note 1—Summary of Significant Accounting Policies and Note 2—Mergers and Acquisitions.) On June 23, 2016, the Bank entered into an early termination agreement with the FDIC with respect to all of its outstanding loss share agreements. The loss share agreements were entered into with the FDIC in 2009, 2010, 2011 and 2012 either by the Bank or by First Federal Bank, acquired by the Bank in July of 2013. As a result of the termination agreement, all assets previously classified as covered became uncovered effective June 23, 2016, and as a result the Bank will now recognize the full amount of future charge-offs, recoveries, gains, losses, and expenses related to these previously covered assets, as the FDIC will no longer share in these amounts. An aggregated analysis of the changes in allowance for loan losses is as follows: Non-acquired Acquired Acquired Credit (Dollars in thousands) Loans Impaired Loans Impaired Loans Total Year Ended December 31, 2017: Balance at beginning of period $ 36,960 $ — $ 3,395 $ 40,355 Loans charged-off (5,149) (1,630) — (6,779) Recoveries of loans previously charged off 2,953 477 — 3,430 Net charge-offs (2,196) (1,153) — (3,349) Provision for loan losses 8,684 1,153 2,053 11,890 Benefit attributable to FDIC loss share agreements — — — — Total provision for loan losses charged to operations 8,684 1,153 2,053 11,890 Provision for loan losses recorded through the FDIC loss share receivable — — — — Reduction due to loan removals — — (821) (821) Balance at end of period $ 43,448 $ — $ 4,627 $ 48,075 Year Ended December 31, 2016: Balance at beginning of period $ 34,090 $ — $ 3,706 $ 37,796 Loans charged-off (5,902) (987) — (6,889) Recoveries of loans previously charged off 3,233 318 — 3,551 Net charge-offs (2,669) (669) — (3,338) Provision for loan losses 5,539 669 588 6,796 Benefit attributable to FDIC loss share agreements — — 23 23 Total provision for loan losses charged to operations 5,539 669 611 6,819 Provision for loan losses recorded through the FDIC loss share receivable — — (23) (23) Reduction due to loan removals — — (899) (899) Balance at end of period $ 36,960 $ — $ 3,395 $ 40,355 Year Ended December 31, 2015: Balance at beginning of period $ 34,539 $ — $ 7,365 $ 41,904 Loans charged-off (6,180) (2,787) — (8,967) Recoveries of loans previously charged off 2,801 387 — 3,188 Net charge-offs (3,379) (2,400) — (5,779) Provision for loan losses 2,930 2,400 (252) 5,078 Benefit attributable to FDIC loss share agreements — — 786 786 Total provision for loan losses charged to operations 2,930 2,400 534 5,864 Provision for loan losses recorded through the FDIC loss share receivable — — (786) (786) Reduction due to loan removals — — (3,407) (3,407) Balance at end of period $ 34,090 $ — $ 3,706 $ 37,796 The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for non‑acquired loans: Construction Commercial Commercial Consumer Other Income & Land Non-owner Owner Owner Home Commercial Producing Other (Dollars in thousands) Development Occupied Occupied Occupied Equity & Industrial Property Consumer Loans Total Year Ended December 31, 2017: Allowance for loan losses: Balance at beginning of period $ 4,091 $ 4,980 $ 8,022 $ 7,820 $ 3,211 $ 4,842 $ 1,542 $ 2,350 $ 102 $ 36,960 Charge-offs (546) — — (185) (330) (776) (51) (3,261) — (5,149) Recoveries 968 132 220 306 210 343 85 689 — 2,953 Provision (benefit) 1,408 1,413 (114) 1,727 159 1,079 (201) 3,010 203 8,684 Balance at end of period $ 5,921 $ 6,525 $ 8,128 $ 9,668 $ 3,250 $ 5,488 $ 1,375 $ 2,788 $ 305 $ 43,448 Loans individually evaluated for impairment $ 1,063 $ 125 $ 64 $ 37 $ 135 $ 15 $ 178 $ 7 $ — $ 1,624 Loans collectively evaluated for impairment $ 4,858 $ 6,400 $ 8,064 $ 9,631 $ 3,115 $ 5,473 $ 1,197 $ 2,781 $ 305 $ 41,824 Loans: Loans individually evaluated for impairment $ 43,230 $ 1,375 $ 5,642 $ 5,632 $ 3,011 $ 1,156 $ 3,138 $ 239 $ — $ 63,423 Loans collectively evaluated for impairment 787,645 1,007,518 1,257,134 1,524,628 434,631 814,031 190,709 378,746 33,690 6,428,732 Total non-acquired loans $ 830,875 $ 1,008,893 $ 1,262,776 $ 1,530,260 $ 437,642 $ 815,187 $ 193,847 $ 378,985 $ 33,690 $ 6,492,155 Year Ended December 31, 2016: Allowance for loan losses: Balance at beginning of period $ 4,116 $ 3,568 $ 8,341 $ 7,212 $ 2,929 $ 3,974 $ 1,963 $ 1,694 $ 293 $ 34,090 Charge-offs (159) (111) (118) (226) (808) (876) (7) (3,597) — (5,902) Recoveries 912 512 54 134 299 292 87 943 — 3,233 Provision (benefit) (778) 1,011 (255) 700 791 1,452 (501) 3,310 (191) 5,539 Balance at end of period $ 4,091 $ 4,980 $ 8,022 $ 7,820 $ 3,211 $ 4,842 $ 1,542 $ 2,350 $ 102 $ 36,960 Loans individually evaluated for impairment $ 348 $ 170 $ 67 $ 80 $ 40 $ 386 $ 242 $ 4 $ — $ 1,337 Loans collectively evaluated for impairment $ 3,743 $ 4,810 $ 7,955 $ 7,740 $ 3,171 $ 4,456 $ 1,300 $ 2,346 $ 102 $ 35,623 Loans: Loans individually evaluated for impairment $ 3,033 $ 806 $ 6,245 $ 5,673 $ 1,674 $ 1,263 $ 2,372 $ 145 $ — $ 21,211 Loans collectively evaluated for impairment 577,431 713,909 1,171,500 1,191,948 381,544 670,135 175,866 324,093 13,404 5,219,830 Total non-acquired loans $ 580,464 $ 714,715 $ 1,177,745 $ 1,197,621 $ 383,218 $ 671,398 $ 178,238 $ 324,238 $ 13,404 $ 5,241,041 Year Ended December 31, 2015: Allowance for loan losses: Balance at beginning of period $ 5,666 $ 3,154 $ 8,415 $ 6,866 $ 2,829 $ 3,561 $ 2,232 $ 1,367 $ 449 $ 34,539 Charge-offs (219) (156) (851) (374) (547) (357) (102) (3,574) — (6,180) Recoveries 376 67 31 143 244 844 85 1,011 — 2,801 Provision (benefit) (1,707) 503 746 577 403 (74) (252) 2,890 (156) 2,930 Balance at end of period $ 4,116 $ 3,568 $ 8,341 $ 7,212 $ 2,929 $ 3,974 $ 1,963 $ 1,694 $ 293 $ 34,090 Loans individually evaluated for impairment $ 615 $ 34 $ 101 $ 138 $ 3 $ 279 $ 422 $ 3 $ 12 $ 1,607 Loans collectively evaluated for impairment $ 3,501 $ 3,534 $ 8,240 $ 7,074 $ 2,926 $ 3,695 $ 1,541 $ 1,691 $ 281 $ 32,483 Loans: Loans individually evaluated for impairment $ 6,280 $ 1,452 $ 7,725 $ 7,549 $ 309 $ 1,487 $ 4,891 $ 102 $ 423 $ 30,218 Loans collectively evaluated for impairment 395,699 486,325 1,025,673 1,011,435 318,946 502,321 170,957 233,002 46,150 4,190,508 Total non-acquired loans $ 401,979 $ 487,777 $ 1,033,398 $ 1,018,984 $ 319,255 $ 503,808 $ 175,848 $ 233,104 $ 46,573 $ 4,220,726 The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for acquired non-credit impaired loans: Construction Commercial Commercial Consumer Other Income & Land Non-owner Owner Owner Home Commercial Producing (Dollars in thousands) Development Occupied Occupied Occupied Equity & Industrial Property Consumer Other Total Year Ended December 31, 2017 Allowance for loan losses: Balance at beginning of period $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Charge-offs (82) — — (150) (859) (71) — (468) — (1,630) Recoveries 4 — 2 41 393 6 8 23 — 477 Provision (benefit) 78 — (2) 109 466 65 (8) 445 — 1,153 Balance, December 31, 2017 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans: Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 403,357 817,166 521,818 710,611 320,591 398,696 196,669 137,710 1,289 3,507,907 Total acquired non-credit impaired loans $ 403,357 $ 817,166 $ 521,818 $ 710,611 $ 320,591 $ 398,696 $ 196,669 $ 137,710 $ 1,289 $ 3,507,907 Year Ended December 31, 2016 Allowance for loan losses: Balance at beginning of period $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Charge-offs — — 39 — (428) (66) — (532) — (987) Recoveries 4 — — 12 199 9 43 51 — 318 Provision (benefit) (4) — (39) (12) 229 57 (43) 481 — 669 Balance, December 30, 2016 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans: Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 10,090 34,628 27,195 408,270 160,879 13,641 39,342 142,654 — 836,699 Total acquired non-credit impaired loans $ 10,090 $ 34,628 $ 27,195 $ 408,270 $ 160,879 $ 13,641 $ 39,342 $ 142,654 $ — $ 836,699 Year Ended December 31, 2015 Allowance for loan losses: Balance at beginning of period $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Charge-offs — — — (360) (1,662) (118) (4) (643) — (2,787) Recoveries 4 — — 102 237 19 4 21 — 387 Provision (benefit) (4) — — 258 1,425 99 — 622 — 2,400 Balance, December 31, 2015 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans: Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 13,849 40,103 39,220 518,107 190,968 25,475 51,169 170,647 — 1,049,538 Total acquired non-credit impaired loans $ 13,849 $ 40,103 $ 39,220 $ 518,107 $ 190,968 $ 25,475 $ 51,169 $ 170,647 $ — $ 1,049,538 The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for acquired credit impaired loans: Commercial Real Estate- Commercial Construction and Residential Commercial (Dollars in thousands) Real Estate Development Real Estate Consumer and Industrial Single Pay Total Year Ended December 31, 2017: Allowance for loan losses: Balance, December 31, 2016 $ $ $ $ $ $ — $ Provision for loan losses before benefit attributable to FDIC loss share agreements 163 1,662 — Benefit attributable to FDIC loss share agreements — — — — — — — Total provision for loan losses charged to operations 163 1,662 — Provision for loan losses recorded through the FDIC loss share receivable — — — — — — — Reduction due to loan removals — — Balance, December 31, 2017 $ $ $ $ $ $ — $ Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ $ $ $ $ $ — $ Loans:* Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment — Total acquired credit impaired loans $ $ $ $ $ $ — $ Year Ended December 31, 2016: Allowance for loan losses: Balance, December 31, 2015 $ 56 $ 177 $ 2,986 $ 313 $ 174 $ — $ 3,706 Provision for loan losses before benefit attributable to FDIC loss share agreements 1 — (129) 533 183 — 588 Benefit attributable to FDIC loss share agreements — — 23 — — — 23 Total provision for loan losses charged to operations 1 — (106) 533 183 — 611 Provision for loan losses recorded through the FDIC loss share receivable — — (23) — — — (23) Reduction due to loan removals (16) (38) (438) (288) (119) — (899) Balance, December 31, 2016 $ 41 $ 139 $ 2,419 $ 558 $ 238 $ — $ 3,395 Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ 41 $ 139 $ 2,419 $ 558 $ 238 $ — $ 3,395 Loans:* Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 218,821 44,373 258,100 59,300 25,347 — 605,941 Total acquired credit impaired loans $ 218,821 $ 44,373 $ 258,100 $ 59,300 $ 25,347 $ — $ 605,941 Year Ended December 31, 2015: Allowance for loan losses: Balance, December 31, 2014 $ 1,579 $ 336 $ 4,387 $ 275 $ 718 $ 70 $ 7,365 Provision for loan losses before benefit attributable to FDIC loss share agreements (499) (68) 99 336 (118) (2) (252) Benefit attributable to FDIC loss share agreements 459 74 228 (107) 131 1 786 Total provision for loan losses charged to operations (40) 6 327 229 13 (1) 534 Provision for loan losses recorded through the FDIC loss share receivable (459) (74) (228) 107 (131) (1) (786) Reduction due to loan removals (1,024) (91) (1,500) (298) (426) (68) (3,407) Balance, December 31, 2015 $ 56 $ 177 $ 2,986 $ 313 $ 174 $ — $ 3,706 Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment $ 56 $ 177 $ 2,986 $ 313 $ 174 $ — $ 3,706 Loans:* Loans individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ — Loans collectively evaluated for impairment 268,058 54,272 313,319 70,734 31,193 — 737,576 Total acquired credit impaired loans $ 268,058 $ 54,272 $ 313,319 $ 70,734 $ 31,193 $ — $ 737,576 * The carrying value of acquired credit impaired loans includes a non‑accretable difference which is primarily associated with the assessment of credit quality of acquired loans. As part of the on‑going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the level of classified loans, (ii) net charge‑offs, (iii) non‑performing loans (see details below) and (iv) the general economic conditions of the markets that we serve. The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of the risk grades is as follows: · Pass—These loans range from minimal credit risk to average however still acceptable credit risk. · Special mention—A special mention loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or the institution’s credit position at some future date. · Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well‑defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. · Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable. The following table presents the credit risk profile by risk grade of commercial non‑acquired loans: Construction & Development Commercial Non-owner Occupied Commercial Owner Occupied December 31, December 31, December 31, December 31, December 31, December 31, (Dollars in thousands) 2017 2016 2017 2016 2017 2016 Pass $ 818,240 $ 567,398 $ 999,049 $ 701,150 $ 1,232,927 $ 1,149,417 Special mention 8,758 8,421 7,864 11,434 23,575 22,133 Substandard 3,877 4,645 1,980 2,131 6,274 6,195 Doubtful — — — — — — $ 830,875 $ 580,464 $ 1,008,893 $ 714,715 $ 1,262,776 $ 1,177,745 Commercial & Industrial Other Income Producing Property Commercial Total December 31, December 31, December 31, December 31, December 31, December 31, 2017 2016 2017 2016 2017 2016 Pass $ 801,885 $ 655,157 $ 186,158 $ 167,025 $ 4,038,259 $ 3,240,147 Special mention 11,130 14,325 6,034 9,280 57,361 65,593 Substandard 2,172 1,916 1,655 1,933 15,958 16,820 Doubtful — — — — — — $ 815,187 $ 671,398 $ 193,847 $ 178,238 $ 4,111,578 $ 3,322,560 The following table presents the credit risk profile by risk grade of consumer non‑acquired loans: Consumer Owner Occupied Home Equity Consumer December 31, December 31, December 31, December 31, December 31, December 31, (Dollars in thousands) 2017 2016 2017 2016 2017 2016 Pass $ 1,502,016 $ 1,167,768 $ 424,369 $ 368,655 $ 377,425 $ 322,654 Special mention 13,902 15,283 6,749 8,145 313 468 Substandard 14,342 14,570 6,524 6,418 1,247 1,116 Doubtful — — — — — — $ 1,530,260 $ 1,197,621 $ 437,642 $ 383,218 $ 378,985 $ 324,238 Other Consumer Total December 31, 2017 December 31, 2016 December 31, 2017 December 31, 2016 Pass $ 33,690 $ 13,404 $ 2,337,500 $ 1,872,481 Special mention — — 20,964 23,896 Substandard — — 22,113 22,104 Doubtful — — — — $ 33,690 $ 13,404 $ 2,380,577 $ 1,918,481 The following table presents the credit risk profile by risk grade of total non‑acquired loans: Total Non-acquired Loans December 31, December 31, (Dollars in thousands) 2017 2016 Pass $ 6,375,759 $ 5,112,628 Special mention 78,325 89,489 Substandard 38,071 38,924 Doubtful — — $ 6,492,155 $ 5,241,041 At December 31, 2017, the aggregate amount of non‑acquired substandard and doubtful loans totaled $38.1 million. When these loans are combined with non‑acquired OREO of $2.4 million, our non‑acquired classified assets (as defined by the South Carolina Board of Financial Institutions and the FDIC, our primary regulators) were $40.5 million. At December 31, 2016, the amounts were $38.9 million, $3.9 million, and $42.8 million, respectively. The following table presents the credit risk profile by risk grade of commercial loans for acquired non‑credit impaired loans: Commercial Non-owner Construction & Development Occupied Commercial Owner Occupied December 31, December 31, December 31, (Dollars in thousands) 2017 2016 2017 2016 2017 2016 Pass $ 394,139 $ 8,997 $ 809,241 $ 28,368 $ 513,861 $ 26,920 Special mention 4,602 253 7,913 6,171 7,740 — Substandard 4,616 840 12 89 217 275 Doubtful — — — — — — $ 403,357 $ 10,090 $ 817,166 $ 34,628 $ 521,818 $ 27,195 Other Income Producing Commercial & Industrial Property Commercial Total December 31, December 31, December 31, 2017 2016 2017 2016 2017 2016 Pass $ 388,342 $ 13,475 $ 191,229 $ 38,361 $ 2,296,812 $ 116,121 Special mention 9,883 117 4,547 273 34,685 6,814 Substandard 471 49 893 708 6,209 1,961 Doubtful — — — — — — $ 398,696 $ 13,641 $ 196,669 $ 39,342 $ 2,337,706 $ 124,896 The following table presents the credit risk profile by risk grade of consumer loans for acquired non‑credit impaired loans: Consumer Owner Occupied Home Equity Consumer December 31, December 31, December 31, (Dollars in thousands) 2017 2016 2017 2016 2017 2016 Pass $ 703,557 $ 404,761 $ 301,842 $ 151,752 $ 134,530 $ 139,686 Special mention 4,165 1,326 10,477 4,113 541 1,102 Substandard 2,889 2,183 8,272 5,014 2,639 1,866 Doubtful — — — — — — $ 710,611 $ 408,270 $ 320,591 $ 160,879 $ 137,710 $ 142,654 Other Consumer Total December 31, December 31, 2017 2016 2017 2016 Pass $ 1,289 $ — $ 1,141,218 $ 696,199 Special mention — — 15,183 6,541 Substandard — — 13,800 9,063 Doubtful — — — — $ 1,289 $ — $ 1,170,201 $ 711,803 The following table presents the credit risk profile by risk grade of total acquired non-credit impaired loans: Total Acquired Non-credit Impaired Loans December 31, (Dollars in thousands) 2017 2016 Pass $ 3,438,030 $ 812,320 Special mention 49,868 13,355 Substandard 20,009 11,024 Doubtful — — $ 3,507,907 $ 836,699 The following table prese |