| Loans and reserve for credit losses | Loans and reserve for credit losses The composition of the loan portfolio at September 30, 2015 and December 31, 2014 was as follows (dollars in thousands): September 30, 2015 December 31, 2014 Amount Percent Amount Percent Originated loans (a): Commercial real estate: Owner occupied $ 263,621 18.9 % $ 198,845 16.8 % Non-owner occupied 421,749 30.2 % 383,287 32.4 % Total commercial real estate loans 685,370 49.1 % 582,132 49.2 % Construction 121,737 8.7 % 100,437 8.5 % Residential real estate 206,521 14.8 % 122,478 10.4 % Commercial and industrial 344,410 24.7 % 342,746 29.0 % Consumer 37,786 2.7 % 34,897 2.9 % Total loans 1,395,824 100.0 % 1,182,690 100.0 % Less: Deferred loan fees (1,608 ) (1,703 ) Reserve for loan losses (26,623 ) (22,053 ) Loans, net $ 1,367,593 $ 1,158,934 Acquired loans (b): Commercial real estate: Owner occupied $ 40,761 18.7 % $ 48,413 18.0 % Non-owner occupied 88,046 40.3 % 102,890 38.2 % Total commercial real estate loans 128,807 59.0 % 151,303 56.2 % Construction 10,749 4.9 % 22,564 8.4 % Residential real estate 58,246 26.7 % 71,385 26.5 % Commercial and industrial 19,277 8.8 % 22,444 8.3 % Consumer 1,365 0.6 % 1,963 0.6 % Total loans $ 218,444 100.0 % $ 269,659 100.0 % Acquired covered loans (c): Commercial real estate: Owner occupied $ 10,610 32.0 % $ 11,851 29.5 % Non-owner occupied 10,206 30.7 % 11,366 28.3 % Total commercial real estate loans 20,816 62.7 % 23,217 57.8 % Construction 2,121 6.4 % 2,427 6.0 % Residential real estate 7,548 22.7 % 10,824 26.9 % Commercial and industrial 2,423 7.3 % 3,285 8.2 % Consumer 293 0.9 % 438 1.1 % Total loans $ 33,201 100.0 % $ 40,191 100.0 % Total loans: Commercial real estate: Owner occupied $ 314,992 19.1 % $ 259,109 17.4 % Non-owner occupied 520,001 31.6 % 497,543 33.3 % Total commercial real estate loans 834,993 50.7 % 756,652 50.7 % Construction 134,607 8.2 % 125,428 8.4 % Residential real estate 272,315 16.5 % 204,687 13.7 % Commercial and industrial 366,110 22.2 % 368,475 24.7 % Consumer 39,444 2.4 % 37,298 2.5 % Total loans 1,647,469 100.0 % 1,492,540 100.0 % Less: Deferred loan fees (1,608 ) (1,703 ) Reserve for loan losses (26,623 ) (22,053 ) Loans, net $ 1,619,238 $ 1,468,784 (a) Originated loans are loans organically made through the Company’s normal and customary origination process, including ARM purchases. (b) Acquired loans are loans acquired in the acquisition of Home Federal Bancorp, Inc. (“Home”), discussed elsewhere in this Quarterly Report on Form 10-Q (the “Form 10-Q”), less acquired covered loans. (c) Acquired covered loans are loans acquired in the acquisition of Home that are covered under FDIC loss share agreements. The following describes the distinction between originated, acquired and acquired covered loan portfolios and certain significant accounting policies relevant to each of these portfolios. Originated loans Loans originated for investment are stated at their principal amount outstanding adjusted for partial charge-offs, the reserve for loan losses and net deferred loan fees and costs. Interest income on loans is accrued over the term of the loans. Interest is not accrued on loans where collectability is uncertain. Accrued interest on loans is presented in “Other assets” on the condensed consolidated balance sheet. Loan origination fees and certain direct costs incurred to extend credit are deferred and amortized over the term of the loan as an adjustment to the related loan yield. Approximately 72.6% of the Bank’s originated loan portfolio at September 30, 2015 consisted of real estate-related loans, including construction and development loans, residential mortgage loans, and commercial loans secured by commercial real estate. At September 30, 2015 , approximately 75.4% of the Bank’s total portfolio (inclusive of acquired and acquired covered loans) consisted of real estate-related loans as described above. The Bank’s results of operations and financial condition are affected by general economic trends and in particular, the strength of the local residential and commercial real estate markets in Central, Southern and Northwest Oregon, as well as the greater Boise/Treasure Valley, Idaho and Seattle, Washington metro areas. Real estate values could be affected by, among other things, a worsening of national and local economic conditions, an increase in foreclosures, a decline in home sale volumes, and an increase in interest rates. Furthermore, the Bank may experience an increase in the number of borrowers who become delinquent, file for protection under bankruptcy laws, or default on their loans or other obligations to the Bank in the event of a sustained downturn in business and economic conditions generally or specifically in the principal markets in which the Bank does business. An increase in the number of delinquencies, bankruptcies, or defaults could result in a higher level of non-performing assets, net charge-offs, and loan loss provision. Management expects to diversify its commercial real estate (“CRE”) concentration over time, but real estate-related loans will remain a significant portfolio component due to the nature of the economies, businesses, and markets the Bank serves. In the normal course of business, the Bank may participate portions of loans to third parties in order to extend the Bank’s lending capability or to mitigate risk. At September 30, 2015 and December 31, 2014 , the portion of loans participated to third parties (which are not included in the accompanying condensed consolidated financial statements) totaled $50.2 million and $34.5 million , respectively. Acquired and acquired covered loans Acquired loans and acquired covered loans are those purchased in the Company’s acquisition of Home, which was completed on May 16, 2014 (the “Acquisition Date”). See the 2014 Annual Report for further information on the Home acquisition. These loans were recorded at estimated fair value at the Acquisition Date. The fair value estimates for acquired and acquired covered loans are based on expected prepayments, charge-offs and the amount and timing of undiscounted expected principal, interest and other cash flows. The net fair value adjustment to the acquired and acquired covered loans at acquisition was a reduction of $ 6.0 million , representing a valuation adjustment for interest rate and credit which will be accreted over the life of the loans (approximately 10 years). Of the loans acquired on the Acquisition Date and still held at September 30, 2015 , $10.2 million , or 4.0% , were graded substandard. Of that amount, $1.5 million , or 14.5% , of the substandard loans were covered under a loss sharing agreement with the FDIC. With the amount of classified loans acquired being nominal, all loans acquired are treated in a manner consistent with originated loans for credit risk management and accounting purposes. As of September 30, 2015 , $33.2 million , or 13.2% , of the $ 251.6 million in acquired and acquired covered loans were covered under loss sharing agreements with the FDIC (“covered loans”). The agreements were entered into in September 2009 and September 2010 between the FDIC and Home. The loss sharing agreements have limited terms ( 10 years for net losses on single-family residential real estate loans, as defined by the FDIC, five years for losses on non-residential real estate loans, as defined by the FDIC, and an additional three years with respect to recoveries on non-residential real estate loans). After the expiration of the loss sharing agreements, the Company will not be indemnified for losses and related expenses on covered loans. When the loss sharing agreements expire, the Company’s and the Bank’s risk-based capital ratios will be reduced. While the agreements are in place, the covered loans receive a 20% risk-weighting. When the agreements expire, the risk-weighting for previously covered loans will most likely increase to 100% , based on current regulatory capital definitions. Nearly all of the assets remaining in the covered loans portfolios are non-single family covered loans. Therefore, most of the covered loans were no longer indemnified after September 30, 2014 or were no longer indemnified after September 30, 2015. Only $1.5 million of the acquired covered loans were graded substandard. With the amount of classified loans covered under these agreements being nominal, amounts that may be due to or due from the FDIC under loss sharing agreements will be accounted for on a cash basis. A net loss share payable was recorded at the Acquisition Date which represents the estimated value of reimbursement the Company expects to pay to the FDIC for recoveries net of incurred losses on covered loans. These expected reimbursements are recorded as part of covered loans in the accompanying consolidated balance sheets. Upon the determination of an incurred loss or recovery, the loss share receivable/payable will be changed by the amount due to or due from the FDIC. Changes in the loss share payable (receivable) associated with acquired cov ered loans for the three and nine months ended September 30, 2015 were as follows (dollars in thousands) : Three months ended Nine months ended September 30, 2015 Balance at beginning of period $ (268 ) $ (449 ) Paid to FDIC 268 1,049 Increase due to impairment — 73 FDIC reimbursement (300 ) (1,100 ) Shared loss expenses 66 171 Adjustments from prior periods (124 ) (140 ) OREO loss carryforward — 38 Balance at end of period $ (358 ) $ (358 ) Reserve for loan losses The reserve for loan losses represents management’s estimate of known and inherent losses in the loan portfolio as of the condensed consolidated balance sheet date and is recorded as a reduction to loans. The reserve for loan losses is increased by charges to operating expense through the loan loss provision, and decreased by loans charged-off, net of recoveries. The reserve for loan losses requires complex subjective judgments as a result of the need to make estimates about matters that are uncertain. The reserve for loan losses is maintained at a level currently considered adequate to provide for potential loan losses based on management’s assessment of various factors affecting the loan portfolio. However, the reserve for loan losses is based on estimates and actual losses may vary from the current estimates. These estimates are reviewed periodically, and, as adjustments become necessary, they are reported in earnings in the periods in which they become known. Therefore, management cannot provide assurance that, in any particular period, the Company will not have significant losses in relation to the amount reserved. The level of the reserve for loan losses is also determined after consideration of bank regulatory guidance and recommendations and is subject to review by such regulatory authorities who may require increases or decreases to the reserve based on their evaluation of the information available to them at the time of their examinations of the Bank. For purposes of assessing the appropriate level of the reserve for loan losses, the Company analyzes loans and commitments to loan, and the amount of reserves allocated to loans and commitments to loan in each of the following reserve categories: pooled reserves, specifically identified reserves for impaired loans, and the unallocated reserve. Also, for purposes of analyzing loan portfolio credit quality and determining the appropriate level of reserve for loan losses, the Company identifies loan portfolio segments and classes based on the nature of the underlying loan collateral. As of March 31, 2015, the reserve for loan loss methodology was enhanced within the Company’s commercial and industrial (“C&I”) loan portfolio with respect to its holdings of shared national credits (“SNCs”). Risk ratings for individual SNCs are estimated using analysis of both public debt ratings and internal ratings. Expected loss rates are determined based upon historical published specific loss data for similar loans based on average losses and losses stratified by public debt ratings. Public ratings combined with internal risk rates are used to determine a minimum historical loss factor for each SNC loan. This amount may be increased for qualitative conditions including macroeconomic environment and observations by the Company’s SNC management group. The SNC lending strategy is intended to diversify the Company’s credit risk profile geographically and by industry. Additionally, such loans enhance the Company’s interest rate risk profile as they float with LIBOR rates. The increase in the reserve for loan losses from December 31, 2014 to September 30, 2015 was related to net recoveries during the period. The unallocated reserve for loan losses at September 30, 2015 has increased $ 0.1 million from the balance at December 31, 2014 . Management believes that the amount of unallocated reserve for loan losses is appropriate and will continue to evaluate the amount going forward. Acquired reserve for loan losses The fair value estimates for acquired and acquired covered loans are based on expected prepayments, charge-offs, and the amount and timing of undiscounted expected principal, interest and other cash flows. The net fair value adjustment to the acquired and acquired covered loans was $ 6.0 million , representing a valuation adjustment for interest rate and credit quality. The credit portion of the fair value adjustment not accreted at any point in time represents the estimated reserve for loan losses for acquired loans. If the Company determines that this amount is insufficient, a provision to the reserve for loan losses will be made. Covered reserve for loan losses The reserve for loan losses on covered loans is estimated similarly to acquired loans as described above except any increase to the reserve from a recovery or a decrease in the reserve from a charge-off is partially offset by an increase in the loss share payable (or receivable) for the portion of the losses recoverable and recoveries payable to the FDIC under the loss sharing agreements. No allowance was recorded at quarter-end given management’s judgment that purchase discounts adequately addressed the estimated losses in the acquired loans. Transactions and allocations in the reserve for loan losses and unfunded loan commitments, by portfolio segment, for the three and nine months ended September 30, 2015 and 2014 were as follows (dollars in thousands): Commercial Construction Residential Commercial Consumer Unallocated Total For the three months ended September 30, 2015 Allowance for Loan Losses Balance at June 30, 2015 $ 5,032 $ 1,356 $ 2,463 $ 11,355 $ 1,001 $ 2,294 $ 23,501 Loan loss provision (credit) (490 ) (293 ) (162 ) (2,245 ) 99 3,091 — Recoveries 408 155 162 2,885 179 — 3,789 Loans charged off — — (50 ) (293 ) (324 ) — (667 ) Balance at end of period $ 4,950 $ 1,218 $ 2,413 $ 11,702 $ 955 $ 5,385 $ 26,623 Reserve for unfunded lending commitments Balance at June 30, 2015 $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Provision for unfunded loan commitments — — — — — — — Balance at end of period $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Reserve for credit losses Reserve for loan losses $ 4,950 $ 1,218 $ 2,413 $ 11,702 $ 955 $ 5,385 $ 26,623 Reserve for unfunded lending commitments 48 268 25 75 24 — 440 Total reserve for credit losses $ 4,998 $ 1,486 $ 2,438 $ 11,777 $ 979 $ 5,385 $ 27,063 Commercial Construction Residential Commercial Consumer Unallocated Total For the nine months ended September 30, 2015 Allowance for Loan Losses Balance at December 31, 2014 $ 5,614 $ 1,133 $ 2,121 $ 6,844 $ 1,047 $ 5,294 $ 22,053 Loan loss provision (credit) (4,397 ) (193 ) (60 ) 2,024 535 91 (2,000 ) Recoveries 4,011 278 746 3,440 457 8,932 Loans charged off (278 ) — (394 ) (606 ) (1,084 ) (2,362 ) Balance at end of period $ 4,950 $ 1,218 $ 2,413 $ 11,702 $ 955 $ 5,385 $ 26,623 Reserve for unfunded lending commitments Balance at December 31, 2014 $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Provision for unfunded loan commitments — — — — — — — Balance at end of period $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Reserve for credit losses Reserve for loan losses $ 4,950 $ 1,218 $ 2,413 $ 11,702 $ 955 $ 5,385 $ 26,623 Reserve for unfunded lending commitments 48 268 25 75 24 — 440 Total reserve for credit losses $ 4,998 $ 1,486 $ 2,438 $ 11,777 $ 979 $ 5,385 $ 27,063 Commercial Construction Residential Commercial Consumer Unallocated Total For the three months ended September 30, 2014 Allowance for Loan Losses Balance at June 30, 2014 $ 7,960 $ 728 $ 2,068 $ 6,615 $ 1,181 $ 1,919 $ 20,471 Loan loss provision (credit) (1,203 ) (597 ) 6 469 211 1,114 — Recoveries 317 869 349 512 76 — 2,123 Loans charged off (91 ) — (539 ) (244 ) (369 ) — (1,243 ) Balance at end of period $ 6,983 $ 1,000 $ 1,884 $ 7,352 $ 1,099 $ 3,033 $ 21,351 Reserve for unfunded lending commitments Balance at June 30, 2014 $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Provision for unfunded loan commitments — — — — — — — Balance at end of period $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Reserve for credit losses Reserve for loan losses $ 6,983 $ 1,000 $ 1,884 $ 7,352 $ 1,099 $ 3,033 $ 21,351 Reserve for unfunded lending commitments 48 268 25 75 24 — 440 Total reserve for credit losses $ 7,031 $ 1,268 $ 1,909 $ 7,427 $ 1,123 $ 3,033 $ 21,791 Commercial Construction Residential Commercial Consumer Unallocated Total For the nine months ended September 30, 2014 Allowance for Loan Losses Balance at December 31, 2013 $ 9,565 $ 535 $ 2,381 $ 6,261 $ 1,401 $ 714 $ 20,857 Loan loss provision (2,681 ) (482 ) (264 ) 706 402 2,319 — Recoveries 1,318 1,243 630 1,969 230 — 5,390 Loans charged off (1,219 ) (296 ) (863 ) (1,584 ) (934 ) — (4,896 ) Balance at end of period $ 6,983 $ 1,000 $ 1,884 $ 7,352 $ 1,099 $ 3,033 $ 21,351 Reserve for unfunded lending commitments Balance at December 31, 2013 $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Provision for unfunded loan commitments — — — — — — — Balance at end of period $ 48 $ 268 $ 25 $ 75 $ 24 $ — $ 440 Reserve for credit losses Reserve for loan losses $ 6,983 $ 1,000 $ 1,884 $ 7,352 $ 1,099 $ 3,033 $ 21,351 Reserve for unfunded lending commitments 48 268 25 75 24 — 440 Total reserve for credit losses $ 7,031 $ 1,268 $ 1,909 $ 7,427 $ 1,123 $ 3,033 $ 21,791 An individual loan is impaired when, based on current information and events, management believes that it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement. The following table presents the reserve for loan losses and the recorded investment in loans by portfolio segment and impairment evaluation method at September 30, 2015 and December 31, 2014 (dollars in thousands): Reserve for loan losses Recorded investment in loans Individually evaluated for impairment Collectively evaluated for impairment Total Individually evaluated for impairment Collectively evaluated for impairment Total September 30, 2015 Commercial real estate $ 78 $ 4,872 $ 4,950 $ 3,679 $ 831,314 $ 834,993 Construction — 1,218 1,218 365 134,242 134,607 Residential real estate — 2,413 2,413 — 272,315 272,315 Commercial and industrial 123 11,579 11,702 2,561 363,549 366,110 Consumer — 955 955 — 39,444 39,444 $ 201 $ 21,037 21,238 $ 6,605 $ 1,640,864 $ 1,647,469 Unallocated 5,385 $ 26,623 December 31, 2014 Commercial real estate $ 60 $ 5,554 $ 5,614 $ 28,947 $ 727,705 $ 756,652 Construction — 1,133 1,133 963 124,465 125,428 Residential real estate — 2,121 2,121 317 204,370 204,687 Commercial and industrial 25 6,819 6,844 3,495 364,980 368,475 Consumer — 1,047 1,047 — 37,298 37,298 $ 85 $ 16,674 16,759 $ 33,722 $ 1,458,818 $ 1,492,540 Unallocated 5,294 $ 22,053 The above reserve for loan losses includes an unallocated allowance of $ 5.4 million at September 30, 2015 and $ 5.3 million at December 31, 2014 . The change in the unallocated allowance is mainly a result of an enhanced reserve methodology for the C&I loans, specifically related to SNC loans as described above. The Company uses credit risk ratings, which reflect the Bank’s assessment of a loan’s risk or loss potential, for purposes of assessing the appropriate level of reserve for loan losses. The Bank’s credit risk rating definitions along with applicable borrower characteristics for each credit risk rating are as follows: Acceptable The borrower is a reasonable credit risk and demonstrates the ability to repay the loan from normal business operations. Loans are generally made to companies operating in an economy and/or industry that is generally sound. The borrower tends to operate in regional or local markets and has achieved sufficient revenues for the business to be financially viable. The borrowers financial performance has been consistent in normal economic times and has been average or better than average for its industry. A loan can also be considered Acceptable even though the borrower may have some vulnerability to downturns in the economy due to marginally satisfactory working capital and debt service cushion. Availability of alternate financing sources may be limited or nonexistent. In some cases, the borrower’s management may have limited depth or continuity but is still considered capable. An adequate primary source of repayment is identified while secondary sources may be illiquid, more speculative, less readily identified, or reliant upon collateral liquidation. Loan agreements will be well defined, including several financial performance covenants and detailed operating covenants. This category also includes commercial loans to individuals with average or better than average capacity to repay. Pass-Watch Loans are graded Pass-Watch when temporary situations increase the level of the Bank’s risk associated with the loan, and remain graded Pass-Watch until the situation has been corrected. These situations may involve one or more weaknesses in cash flow, collateral value or indebtedness that could, if not corrected within a reasonable period of time, jeopardize the full repayment of the debt. In general, loans in this category remain adequately protected by the borrower’s net worth and paying capacity, or pledged collateral. Special Mention A Special Mention credit has potential weaknesses that may, if not checked or corrected, weaken the loan or leave the Bank inadequately protected at some future date. Loans in this category are deemed by management of the Bank to be currently protected but reflect potential problems that warrant more than the usual management attention but do not justify a Substandard classification. Substandard Substandard loans are those inadequately protected by the net worth and paying capacity of the obligor and/or by the value of the pledged collateral, if any. Substandard loans have a high probability of payment default or they have other well-defined weaknesses. They require more intensive supervision and borrowers are generally characterized by current or expected unprofitable operations, inadequate debt service coverage, inadequate liquidity, or marginal capitalization. Repayment may depend on collateral or other credit risk mitigants. CRE and construction loans are classified Substandard when well-defined weaknesses are present which jeopardize the orderly liquidation of the loan. Well-defined weaknesses include a project’s lack of marketability, inadequate cash flow or collateral support, failure to complete construction on time, and/or the project’s failure to fulfill economic expectations. These loans are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans also include impaired loans. Impaired loans bear the characteristics of Substandard loans as described above, and the Company has determined it does not expect timely payment of all contractually due interest and principal. Impaired loans may be adequately secured by collateral. During the nine months ended September 30, 2015 , the Bank saw improved credit quality, as demonstrated by a reduction in the aggregate balance of all loans adversely classified. The improvement was mainly in Special Mention loans, resulting from improving economic conditions as well as payoffs and paydowns in the Special Mention portfolio. Substandard loan balances have increased modestly, with improvements in certain credits offset by an increase related to a SNC, included in C&I loans, that was downgraded during the period. The following table presents, by portfolio class, the recorded investment in loans by internally assigned grades at September 30, 2015 and December 31, 2014 (dollars in thousands): Loan grades Acceptable Pass-Watch Special Mention Substandard Total September 30, 2015 Originated loans (a): Commercial real estate: Owner occupied $ 241,110 $ 8,556 $ 3,283 $ 10,672 $ 263,621 Non-owner occupied 400,442 9,121 7,056 5,130 421,749 Total commercial real estate loans 641,552 17,677 10,339 15,802 685,370 Construction 119,700 813 1,208 16 121,737 Residential real estate 204,711 714 596 500 206,521 Commercial and industrial 311,794 10,118 9,926 12,572 344,410 Consumer 37,786 — — — 37,786 $ 1,315,543 $ 29,322 $ 22,069 $ 28,890 $ 1,395,824 Acquired loans (b): Commercial real estate: Owner occupied $ 29,198 $ 3,513 $ 7,795 $ 255 $ 40,761 Non-owner occupied 65,798 5,699 8,930 7,619 88,046 Total commercial real estate loans 94,996 9,212 16,725 7,874 128,807 Construction 10,749 — — — 10,749 Residential real estate 57,408 — — 838 58,246 Commercial and industrial 15,678 121 3,493 (15 ) 19,277 Consumer 1,362 — — 3 1,365 $ 180,193 $ 9,333 $ 20,218 $ 8,700 $ 218,444 Acquired covered loans (c): Commercial real estate: Owner occupied $ 10,518 $ — $ — $ 92 $ 10,610 Non-owner occupied 5,134 — 4,572 500 10,206 Total commercial real estate loans 15,652 — 4,572 592 20,816 Construction 44 2,041 — 36 2,121 Residential real estate 7,207 — — 341 7,548 Commercial and industrial 1,921 — — 502 2,423 Consumer 293 — — — 293 $ 25,117 $ 2,041 $ 4,572 $ 1,471 $ 33,201 Total loans: Commercial real estate: Owner occupied $ 280,826 $ 12,069 $ 11,078 $ 11,019 $ 314,992 Non-owner occupied 471,374 14,820 20,558 13,249 520,001 Total commercial real estate loans 752,200 26,889 31,636 24,268 834,993 Construction 130,493 2,854 1,208 52 134,607 Residential real estate 269,326 714 596 1,679 272,315 Commercial and industrial 329,393 10,239 13,419 13,059 366,110 Consumer 39,441 — — 3 39,444 $ 1,520,853 $ 40,696 $ 46,859 $ 39,061 $ 1,647,469 (a) Originated loans are loans organically made through the Company’s normal and customary origination process, including ARM purchases. (b) Acquired loans are loans acquired in the acquisition of Home less acquired covered loans. (c) Acquired covered loans are loans acquired in the acquisition of Home that are covered under FDIC loss share agreements. Loan grades Acceptable Pass-Watch Special Substandard Total December 31, 2014 Originated loans (a): Commercial real estate: Owner occupied $ 167,509 $ 8,749 $ 4,035 $ 18,552 $ 198,845 Non-owner occupied 350,420 10,383 16,145 6,339 383,287 Total commercial real estate loans 517,929 19,132 20,180 24,891 582,132 Construction 95,440 3,086 1,850 61 100,437 Residential real estate 119,280 1,380 552 1,266 122,478 Commercial and industrial 306,030 18,721 14,676 3,319 342,746 Consumer 34,852 — — 45 34,897 $ 1,073,531 $ 42,319 $ 37,258 $ 29,582 $ 1,182,690 Acquired loans (b): Commercial real estate: Owner occupied $ 42,673 $ 1,125 $ 4,352 $ 263 $ 48,413 Non-owner occupied 75,340 11,019 12,265 4,266 102,890 Total commercial real estate loans 118,013 12,144 16,617 4,529 151,303 Construction 22,448 — — 116 22,564 Residential real estate 70,002 — — 1,383 71,385 Commercial and industrial 22,236 151 — 57 22,444 Consumer 1,907 — — 56 1,963 $ 234,606 $ 12,295 $ 16,617 $ 6,141 $ 269,659 Acquired covered loans (c): Commercial real estate: Owner occupied $ 10,363 $ — $ 1,048 $ 440 $ 11,851 Non-owner occupied 5,668 361 4,641 696 11,366 Total commercial real estate loans 16,031 361 5,689 1,136 23,217 Construction 48 2,332 — 47 2,427 Residential real estate 9,601 — — 1,223 10,824 Commercial and industrial 2,779 — — 506 3,285 Consumer 438 — — — 438 $ 28,897 $ 2,693 $ 5,689 $ 2,912 $ 40,191 Total loans: Commercial real estate: Owner occupied $ 220,545 $ 9,874 $ 9,435 $ 19,255 $ 259,109 Non-owner occupied 431,428 21,763 33,051 11,301 497,543 Total commercial real estate loans 651,973 31,637 42,486 30,556 756,652 Construction 117,936 5,418 1,850 224 125,428 Residential real estate 198,883 1,380 552 3,872 204,687 Commercial and industrial 331,045 18,872 14,676 3,882 368,475 Consumer 37,197 — — 101 37,298 $ 1,337,034 $ 57,307 $ 59,564 $ 38,635 $ 1,492,540 (a) Originated loans are loans organically made through the Company’s normal and customary origination process, including ARM purchases. (b) Acquired loans are loans acquired in the acquisition of Home less acquired covered loans. (c) Acquired covered loans are loans acquired in the acquisition of Home that are covered under FDIC loss share agreements. The following table presents, by portfolio class, an age analysis of past due loans, including loans placed on non-accrual at September 30, 2015 and December 31, 2014 (dollars in thousands): 30-89 days past due 90 days or more past due Total past due Current Total loans September 30, 2015 Originated loans (a): Commercial real estate: Owner occupied $ 46 $ 1,215 $ 1,261 $ 262,360 $ 263,621 Non-owner occupied 604 — 604 421,145 421,749 Total commercial real estate loans 650 1,215 1,865 683,505 685,370 Construction 172 — 172 121,565 121,737 Residential real estate 238 — 238 206,283 206,521 Commercial and industrial 593 350 943 343,467 344,410 Consumer 95 — 95 37,691 37,786 $ 1,748 $ 1,565 $ 3,313 $ 1,392,511 $ 1,395,824 Acquired loans (b): Commercial real estate: Owner occupied $ — $ — $ — $ 40,761 $ 40,761 Non-owner occupied — — — 88,046 88,046 Total commercial real estate loans — — — 128,807 128,807 Construction 48 — 48 10,701 10,749 Residential real estate 1,266 370 1,636 56,610 58,246 Commercial and industrial 39 — 39 19,238 19,277 Consumer 8 — 8 1,357 1,365 $ 1,361 $ 370 $ 1,731 $ 216,713 $ 218,444 Acquired covered loans (c): Commercial real estate: Owner occupied $ — $ — $ — $ 10,610 $ 10,610 Non-owner occupied — — — 10,206 10,206 Total commercial real estate loans — — — 20,816 20,816 Construction 2,041 — 2,041 80 2,121 Residential real estate 100 248 348 7,200 7,548 Commercial and industrial 3 11 14 2,409 2,423 Consumer 7 — 7 286 293 $ 2,151 $ 259 $ 2,410 $ 30,791 $ 33,201 Total loans: Commercial real estate: Owner occupied $ 46 $ 1,215 $ 1,261 $ 313,731 $ 314,992 Non-owner occupied 604 — 604 519,397 520,001 Total commercial real estate loans 650 1,215 1,865 833,128 834,993 Construction 2,261 — 2,261 132,346 134,607 Residential real estate 1,604 618 2,222 270,093 272,315 Commercial and industrial 635 361 996 365,114 366,110 Consumer 110 — 110 39,334 39,444 $ 5,260 $ 2,194 $ 7,454 $ 1,640,015 $ 1,647,469 December 31, 2014 Originated loans (a): Commercial real estate: Owner occupied $ 732 $ 3,716 $ 4,448 $ 194,397 $ 198,845 Non-owner occupied 1,718 971 2,689 380,598 383,287 Total commercial real estate loans 2,450 4,687 7,137 574,995 582,132 Construction — 100 100 100,337 100,437 Residential real estate 662 110 772 121,706 122,478 Commercial and industrial 288 334 622 342,124 342,746 Consumer 139 45 184 34,713 34,897 $ 3,539 $ 5,276 $ 8,815 $ 1,173,875 $ 1,182,690 Acquired loans (b): Commercial real estate: Owner occupied $ 24 $ — $ 24 $ 48,389 $ 48,413 Non-owner occupied — 120 120 102,770 102,890 Total commercial real estate loans 24 120 144 151,159 151,303 Construction — — — 22,564 22,564 Residential real estate 1,361 288 1,649 69,736 71,385 Commercial and industrial — — — 22,444 22,444 Consumer 55 — 55 1,908 1,963 $ 1,440 $ 408 $ 1,848 $ 267,811 $ 269,659 Acquired covered loans (c): Commercial real estate: Owner occupied $ — $ — $ — $ 11,851 $ 11,851 Non-owner occupied — 27 27 11,339 11,366 Total commercial real estate loans — 27 27 23,190 23,217 Construction — — — 2,427 2,427 Residential real estate 375 — 375 10,449 10,824 Commercial and industrial — — — 3,285 3,285 Consumer 11 — 11 427 438 $ 386 $ 27 $ 413 $ 39,778 $ 40,191 Total loans: Commercial real estate: Owner occupied $ 756 $ 3,716 $ 4,472 $ 254,637 $ 259,109 Non-owner occupied 1,718 1,118 2,836 494,707 497,543 Total commercial real estate loans 2,474 4,834 7,308 749,344 756,652 Construction — 100 100 125,328 125,428 Residential real estate 2,398 398 2,796 201,891 204,687 Commercial and industrial 288 334 622 367,853 368,475 Consumer 205 45 250 37,048 37,298 $ 5,365 $ 5,711 $ 11,076 $ 1,481,464 $ 1,492,540 (a) Originated loans are loans organically made through the Company |
