LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at December 31, 2017 and 2016 (dollars in thousands): 2017 2016 Construction and Land Development $ 948,791 $ 751,131 Commercial Real Estate - Owner Occupied 943,933 857,805 Commercial Real Estate - Non-Owner Occupied 1,713,659 1,564,295 Multifamily Real Estate 357,079 334,276 Commercial & Industrial 612,023 551,526 Residential 1-4 Family - Commercial 612,395 551,636 Residential 1-4 Family - Mortgage 485,690 477,911 Auto 282,474 262,071 HELOC 537,521 526,884 Consumer and all other 647,987 429,525 Total loans held for investment, net (1) $ 7,141,552 $ 6,307,060 (1) Loans, as presented, are net of deferred fees and costs totaling $1.3 million and $1.8 million as of December 31, 2017 and 2016 , respectively. On October 16, 2015, the Company entered into an agreement to sell its credit card portfolio, approximating $26.4 million in outstanding balances, and entered into an outsourcing partnership with Elan Financial Services. The Company sold these loans at a premium. The sale of the credit card portfolio resulted in an after-tax benefit of $805,000 on the Company's Consolidated Statement of Income in 2015. As part of the agreement, the Company will continue to share in interchange fee income and finance charges. The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2017 (dollars in thousands): 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days and still Accruing PCI Nonaccrual Current Total Loans Construction and Land Development $ 1,248 $ 898 $ 1,340 $ 2,838 $ 5,610 $ 936,857 $ 948,791 Commercial Real Estate - Owner Occupied 444 81 — 14,790 2,708 925,910 943,933 Commercial Real Estate - Non-Owner Occupied 187 84 194 6,610 2,992 1,703,592 1,713,659 Multifamily Real Estate — — — 80 — 356,999 357,079 Commercial & Industrial 1,147 109 214 408 316 609,829 612,023 Residential 1-4 Family - Commercial 1,682 700 579 9,414 1,085 598,935 612,395 Residential 1-4 Family - Mortgage 3,838 2,541 546 3,733 6,269 468,763 485,690 Auto 3,541 185 40 — 413 278,295 282,474 HELOC 2,382 717 217 950 2,075 531,180 537,521 Consumer and all other 2,404 2,052 402 198 275 642,656 647,987 Total loans held for investment $ 16,873 $ 7,367 $ 3,532 $ 39,021 $ 21,743 $ 7,053,016 $ 7,141,552 The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2016 (dollars in thousands): 30-59 Days Past Due 60-89 Days Past Due Greater than 90 Days and still Accruing PCI Nonaccrual Current Total Loans Construction and Land Development $ 1,162 $ 232 $ 76 $ 2,922 $ 2,037 $ 744,702 $ 751,131 Commercial Real Estate - Owner Occupied 1,842 109 35 18,343 794 836,682 857,805 Commercial Real Estate - Non-Owner Occupied 2,369 — — 17,303 — 1,544,623 1,564,295 Multifamily Real Estate 147 — — 2,066 — 332,063 334,276 Commercial & Industrial 759 858 9 1,074 124 548,702 551,526 Residential 1-4 Family - Commercial 1,722 147 600 12,222 1,071 535,874 551,636 Residential 1-4 Family - Mortgage 5,316 387 1,448 3,978 4,208 462,574 477,911 Auto 2,570 317 111 — 169 258,904 262,071 HELOC 1,836 1,140 635 1,161 1,279 520,833 526,884 Consumer and all other 2,522 1,431 91 223 291 424,967 429,525 Total loans held for investment $ 20,245 $ 4,621 $ 3,005 $ 59,292 $ 9,973 $ 6,209,924 $ 6,307,060 Nonaccrual loans totaled $21.7 million , $10.0 million , and $11.9 million at December 31, 2017 , 2016 and 2015 , respectively. Had these loans performed in accordance with their original terms, interest income of approximately $698,000 , $452,000 , and $487,000 would have been recorded in 2017 , 2016 , and 2015 , respectively. All nonaccrual loans were included in the impaired loan disclosure in 2017 and 2016 . The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2017 (dollars in thousands): 30-89 Days Past Due Greater than 90 Days Current Total Construction and Land Development $ 8 $ 57 $ 2,773 $ 2,838 Commercial Real Estate - Owner Occupied 381 478 13,931 14,790 Commercial Real Estate - Non-Owner Occupied 188 233 6,189 6,610 Multifamily Real Estate — — 80 80 Commercial & Industrial — — 408 408 Residential 1-4 Family - Commercial 433 351 8,630 9,414 Residential 1-4 Family - Mortgage 343 626 2,764 3,733 HELOC 291 214 445 950 Consumer and all other — — 198 198 Total $ 1,644 $ 1,959 $ 35,418 $ 39,021 The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2016 (dollars in thousands): 30-89 Days Past Due Greater than 90 Days Current Total Construction and Land Development $ — $ 84 $ 2,838 $ 2,922 Commercial Real Estate - Owner Occupied 271 519 17,553 18,343 Commercial Real Estate - Non-Owner Occupied 409 126 16,768 17,303 Multifamily Real Estate — — 2,066 2,066 Commercial & Industrial 44 56 974 1,074 Residential 1-4 Family - Commercial 964 93 11,165 12,222 Residential 1-4 Family - Mortgage 334 852 2,792 3,978 HELOC 175 121 865 1,161 Consumer and all other — — 223 223 Total $ 2,197 $ 1,851 $ 55,244 $ 59,292 The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans, by segment at December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 December 31, 2016 Recorded Investment Unpaid Principal Balance Related Allowance Recorded Investment Unpaid Principal Balance Related Allowance Loans without a specific allowance Construction and Land Development $ 16,035 $ 16,214 $ — $ 13,877 $ 14,353 $ — Commercial Real Estate - Owner Occupied 5,427 5,527 — 5,886 6,042 — Commercial Real Estate - Non-Owner Occupied 6,017 6,103 — 1,399 1,399 — Commercial & Industrial 1,681 1,933 — 648 890 — Residential 1-4 Family - Commercial 4,098 4,879 — 4,301 5,208 — Residential 1-4 Family - Mortgage 9,512 9,786 — 4,195 4,310 — HELOC 2,056 2,144 — 1,017 1,094 — Consumer and all other 567 734 — 230 427 — Total impaired loans without a specific allowance $ 45,393 $ 47,320 $ — $ 31,553 $ 33,723 $ — Loans with a specific allowance Construction and Land Development $ 1,536 $ 1,573 $ 122 $ 1,395 $ 1,404 $ 107 Commercial Real Estate - Owner Occupied 1,161 1,161 94 646 646 4 Commercial Real Estate - Non-Owner Occupied — — — 2,809 2,809 474 Commercial & Industrial 1,295 1,319 128 857 880 14 Residential 1-4 Family - Commercial 1,062 1,068 35 1,182 1,282 66 Residential 1-4 Family - Mortgage 1,953 2,070 36 2,153 2,253 134 Auto 413 577 2 169 235 1 HELOC 464 535 51 323 433 15 Consumer and all other 204 309 35 62 298 1 Total impaired loans with a specific allowance $ 8,088 $ 8,612 $ 503 $ 9,596 $ 10,240 $ 816 Total impaired loans $ 53,481 $ 55,932 $ 503 $ 41,149 $ 43,963 $ 816 The following table shows the average recorded investment and interest income recognized for the Company’s impaired loans, excluding PCI loans, by segment for the years ended December 31, 2017 , 2016 and 2015 (dollars in thousands): December 31, 2017 December 31, 2016 December 31, 2015 Average Investment Interest Income Recognized Average Investment Interest Income Recognized Average Investment Interest Income Recognized Construction and Land Development $ 17,080 $ 590 $ 15,346 $ 681 $ 36,441 $ 2,265 Commercial Real Estate - Owner Occupied 6,580 306 6,290 242 11,409 348 Commercial Real Estate - Non-Owner Occupied 6,083 172 4,188 134 6,201 250 Multifamily Real Estate — — — — 3,854 244 Commercial & Industrial 3,208 150 2,800 95 3,404 139 Residential 1-4 Family - Commercial 5,428 190 6,225 205 9,990 383 Residential 1-4 Family - Mortgage 11,806 194 6,491 86 4,478 27 Auto 579 19 244 5 235 6 HELOC 2,659 36 1,513 19 2,757 54 Consumer and all other 810 36 567 8 639 19 Total impaired loans $ 54,233 $ 1,693 $ 43,664 $ 1,475 $ 79,408 $ 3,735 The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the year ended December 31, 2017 , the recorded investment in TDRs prior to modifications was not materially impacted by the modification. The following table provides a summary, by segment, of TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed in nonaccrual status, which are considered to be nonperforming, as of December 31, 2017 and 2016 (dollars in thousands): December 31, 2017 December 31, 2016 No. of Loans Recorded Investment Outstanding Commitment No. of Loans Recorded Investment Outstanding Commitment Performing Construction and Land Development 7 $ 2,803 $ — 8 $ 3,793 $ — Commercial Real Estate - Owner Occupied 5 2,221 — 7 3,106 — Commercial Real Estate - Non-Owner Occupied 2 715 — 2 2,390 — Commercial & Industrial 12 2,057 — 3 533 — Residential 1-4 Family - Commercial 16 1,048 — 16 1,623 — Residential 1-4 Family - Mortgage 24 5,194 — 12 2,522 — HELOC 1 20 — — — — Consumer and all other 1 495 — — — — Total performing 68 $ 14,553 $ — 48 $ 13,967 $ — Nonperforming Construction and Land Development 2 $ 702 $ — 2 $ 215 $ — Commercial Real Estate - Owner Occupied 2 134 — 2 156 — Commercial & Industrial 2 108 — 1 116 — Residential 1-4 Family - Commercial 5 558 — 4 157 — Residential 1-4 Family - Mortgage 7 1,264 — 4 791 — HELOC 1 59 — — — — Consumer and all other 1 24 — — — — Total nonperforming 20 $ 2,849 $ — 13 $ 1,435 $ — Total performing and nonperforming 88 $ 17,402 $ — 61 $ 15,402 $ — The Company considers a default of a TDR to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. The following table shows, by segment and modification type, TDRs that occurred during the years ended December 31, 2017 and 2016 and TDRs that were identified by the Company as going into default during the period shown that were restructured in the prior twelve-month period (dollars in thousands): All Restructurings Restructurings with Payment Default 2017 2016 2017 2016 No. of Loans Recorded Investment at Period End No. of Loans Recorded Investment at Period End No. of Loans Recorded Investment at Period End No. of Loans Recorded Investment at Period End Modified to interest only, at a market rate Construction and Land Development — $ — 2 $ 325 — $ — — $ — Commercial Real Estate - Owner Occupied — — 2 483 — — — — Commercial & Industrial 5 631 1 34 — — — — Residential 1-4 Family - Commercial — — 1 158 — — — — Total interest only at market rate of interest 5 $ 631 6 $ 1,000 — $ — — $ — Term modification, at a market rate Construction and Land Development 4 $ 1,564 2 $ 1,444 1 $ 160 — $ — Commercial Real Estate - Owner Occupied 1 378 3 1,326 — — — — Commercial Real Estate - Non-Owner Occupied 2 715 — — — — — — Commercial & Industrial 5 1,040 1 444 — — — — Residential 1-4 Family - Commercial 5 764 3 400 — — — — Residential 1-4 Family - Mortgage 9 2,461 3 580 — — — — Consumer and all other 2 519 — — — — — — Total loan term extended at a market rate 28 $ 7,441 12 $ 4,194 1 $ 160 — $ — Term modification, below market rate Commercial Real Estate - Owner Occupied 1 $ 837 — $ — — $ — — $ — Commercial & Industrial 2 78 — — — — — — Residential 1-4 Family - Commercial 5 183 2 64 — — — — Residential 1-4 Family - Mortgage 11 1,803 5 1,245 — — — — HELOC 2 79 — — — — — — Total loan term extended at a below market rate 21 $ 2,980 7 $ 1,309 — $ — — $ — Interest rate modification, below market rate Commercial & Industrial — $ — 1 $ 116 — $ — — $ — Total interest only at below market rate of interest — $ — 1 $ 116 — $ — — $ — Total 54 $ 11,052 26 $ 6,619 1 $ 160 — $ — The following table shows the allowance for loan loss activity, balances for ALL, and loan balances based on impairment methodology by segment for the year ended and as of December 31, 2017 . The table below includes the provision for loan losses. In addition, a $315,000 provision was released during the year ended December 31, 2017 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands): Allowance for loan losses Balance, beginning of the year Recoveries credited to allowance Loans charged off Provision charged to operations Balance, end of period Construction and Land Development $ 10,055 $ 206 $ (2,190 ) $ 1,638 $ 9,709 Commercial Real Estate - Owner Occupied 3,801 171 (46 ) (995 ) 2,931 Commercial Real Estate - Non-Owner Occupied 6,622 2 (1,180 ) 2,100 7,544 Multifamily Real Estate 1,236 — — (144 ) 1,092 Commercial & Industrial 4,627 483 (2,277 ) 1,719 4,552 Residential 1-4 Family - Commercial 3,698 329 (463 ) 873 4,437 Residential 1-4 Family - Mortgage 2,701 102 (588 ) (691 ) 1,524 Auto 946 459 (1,038 ) 608 975 HELOC 1,328 314 (1,019 ) 737 1,360 Consumer and all other 2,178 1,189 (4,509 ) 5,226 4,084 Total $ 37,192 $ 3,255 $ (13,310 ) $ 11,071 $ 38,208 Loans individually evaluated for impairment Loans collectively evaluated for impairment Loans acquired with deteriorated credit quality Total Loans ALL Loans ALL Loans ALL Loans ALL Construction and Land Development $ 17,571 $ 122 $ 928,382 $ 9,587 $ 2,838 $ — $ 948,791 $ 9,709 Commercial Real Estate - Owner Occupied 6,588 94 922,555 2,837 14,790 — 943,933 2,931 Commercial Real Estate - Non-Owner Occupied 6,017 — 1,701,032 7,544 6,610 — 1,713,659 7,544 Multifamily Real Estate — — 356,999 1,092 80 — 357,079 1,092 Commercial & Industrial 2,976 128 608,639 4,424 408 — 612,023 4,552 Residential 1-4 Family - Commercial 5,160 35 597,821 4,402 9,414 — 612,395 4,437 Residential 1-4 Family - Mortgage 11,465 36 470,492 1,488 3,733 — 485,690 1,524 Auto 413 2 282,061 973 — — 282,474 975 HELOC 2,520 51 534,051 1,309 950 — 537,521 1,360 Consumer and all other 771 35 647,018 4,049 198 — 647,987 4,084 Total loans held for investment, net $ 53,481 $ 503 $ 7,049,050 $ 37,705 $ 39,021 $ — $ 7,141,552 $ 38,208 The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the year ended and as of December 31, 2016 . In addition, a $ 425,000 provision was recognized during the year ended December 31, 2016 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands): Allowance for loan losses Balance, beginning of the year Recoveries credited to allowance Loans charged off Provision charged to operations Balance, end of period Construction and Land Development $ 6,040 $ 505 $ (958 ) $ 4,468 $ 10,055 Commercial Real Estate - Owner Occupied 4,614 152 (809 ) (156 ) 3,801 Commercial Real Estate - Non-Owner Occupied 6,929 80 (1 ) (386 ) 6,622 Multifamily Real Estate 1,606 — — (370 ) 1,236 Commercial & Industrial 3,163 483 (1,920 ) 2,901 4,627 Residential 1-4 Family - Commercial 3,025 318 (716 ) 1,071 3,698 Residential 1-4 Family - Mortgage 2,389 267 (184 ) 229 2,701 Auto 1,703 327 (1,052 ) (32 ) 946 HELOC 2,934 459 (1,457 ) (608 ) 1,328 Consumer and all other 1,644 434 (1,458 ) 1,558 2,178 Total $ 34,047 $ 3,025 $ (8,555 ) $ 8,675 $ 37,192 Loans individually evaluated for impairment Loans collectively evaluated for impairment Loans acquired with deteriorated credit quality Total Loans ALL Loans ALL Loans ALL Loans ALL Construction and Land Development $ 15,272 $ 107 $ 732,937 $ 9,948 $ 2,922 $ — $ 751,131 $ 10,055 Commercial Real Estate - Owner Occupied 6,532 4 832,930 3,797 18,343 — 857,805 3,801 Commercial Real Estate - Non-Owner Occupied 4,208 474 1,542,784 6,148 17,303 — 1,564,295 6,622 Multifamily Real Estate — — 332,210 1,236 2,066 — 334,276 1,236 Commercial & Industrial 1,505 14 548,947 4,613 1,074 — 551,526 4,627 Residential 1-4 Family - Commercial 5,483 66 533,931 3,632 12,222 — 551,636 3,698 Residential 1-4 Family - Mortgage 6,348 134 467,585 2,567 3,978 — 477,911 2,701 Auto 169 1 261,902 945 — — 262,071 946 HELOC 1,340 15 524,383 1,313 1,161 — 526,884 1,328 Consumer and all other 292 1 429,010 2,177 223 — 429,525 2,178 Total loans held for investment, net $ 41,149 $ 816 $ 6,206,619 $ 36,376 $ 59,292 $ — $ 6,307,060 $ 37,192 The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the year ended and as of December 31, 2015 . In addition, a $ 300,000 provision was recognized during the year ended December 31, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands): Allowance for loan losses Balance, beginning of the year Recoveries credited to allowance Loans charged off Provision charged to operations Balance, end of period Construction and Land Development $ 4,856 $ 720 $ (650 ) $ 1,114 $ 6,040 Commercial Real Estate - Owner Occupied 4,640 143 (481 ) 312 4,614 Commercial Real Estate - Non-Owner Occupied 7,256 239 (3,137 ) 2,571 6,929 Multifamily Real Estate 1,374 200 — 32 1,606 Commercial & Industrial 2,610 958 (2,361 ) 1,956 3,163 Residential 1-4 Family - Commercial 2,743 526 (506 ) 262 3,025 Residential 1-4 Family - Mortgage 2,864 28 (1,283 ) 780 2,389 Auto 1,297 290 (768 ) 884 1,703 HELOC 2,675 298 (1,100 ) 1,061 2,934 Consumer and all other 2,069 525 (1,249 ) 299 1,644 Total $ 32,384 $ 3,927 $ (11,535 ) $ 9,271 $ 34,047 Loans individually evaluated for impairment Loans collectively evaluated for impairment Loans acquired with deteriorated credit quality Total Loans ALL Loans ALL Loans ALL Loans ALL Construction and Land Development $ 36,417 $ 538 $ 707,317 $ 5,502 $ 5,986 $ — $ 749,720 $ 6,040 Commercial Real Estate - Owner Occupied 11,018 358 821,680 4,256 27,388 — 860,086 4,614 Commercial Real Estate - Non-Owner Occupied 6,235 75 1,250,726 6,854 13,519 — 1,270,480 6,929 Multifamily Real Estate 3,828 — 317,145 1,606 1,555 — 322,528 1,606 Commercial & Industrial 2,663 441 430,889 2,722 1,813 — 435,365 3,163 Residential 1-4 Family - Commercial 9,105 266 491,839 2,759 16,119 — 517,063 3,025 Residential 1-4 Family - Mortgage 4,045 152 452,321 2,237 5,040 — 461,406 2,389 Auto 199 1 233,862 1,702 — — 234,061 1,703 HELOC 2,478 76 512,457 2,858 1,791 — 516,726 2,934 Consumer and all other 574 95 302,927 1,549 526 — 304,027 1,644 Total loans held for investment, net $ 76,562 $ 2,002 $ 5,521,163 $ 32,045 $ 73,737 $ — $ 5,671,462 $ 34,047 The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for loan losses; on those loans without a risk rating, the Company uses past due status to determine risk level. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows: Pass is determined by the following criteria: • Risk rated 0 loans have little or no risk and are with General Obligation Municipal Borrowers; • Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents; • Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety; • Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment; • Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater degree of financial risk based on the type of business supporting the loan; or • Loans that are not risk rated but that are 0 to 29 days past due. Special Mention is determined by the following criteria: • Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay; • Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if not addressed could lead to inadequately protecting the Company’s credit position; or • Loans that are not risk rated but that are 30 to 89 days past due. Substandard is determined by the following criteria: • Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; or • Loans that are not risk rated but that are 90 to 149 days past due. Doubtful is determined by the following criteria: • Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for recovery, its classification as a loss is deferred until its more exact status is determined; • Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as bankable assets is not warranted; or • Loans that are not risk rated but that are over 149 days past due. The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2017 (dollars in thousands): Pass Special Mention Substandard Doubtful Total Construction and Land Development $ 869,111 $ 62,517 $ 14,325 $ — $ 945,953 Commercial Real Estate - Owner Occupied 872,130 52,268 4,745 — 929,143 Commercial Real Estate - Non-Owner Occupied 1,681,314 19,899 5,836 — 1,707,049 Multifamily Real Estate 349,625 7,374 — — 356,999 Commercial & Industrial 595,923 13,533 2,159 — 611,615 Residential 1-4 Family - Commercial 587,169 12,117 3,650 45 602,981 Residential 1-4 Family - Mortgage 470,646 7,190 1,642 2,479 481,957 Auto 278,063 4,131 119 161 282,474 HELOC 531,358 3,867 857 489 536,571 Consumer and all other 645,187 1,758 781 63 647,789 Total $ 6,880,526 $ 184,654 $ 34,114 $ 3,237 $ 7,102,531 The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2016 (dollars in thousands): Pass Special Mention Substandard Doubtful Total Construction and Land Development $ 667,018 $ 69,311 $ 11,857 $ 23 $ 748,209 Commercial Real Estate - Owner Occupied 801,565 32,364 5,533 — 839,462 Commercial Real Estate - Non-Owner Occupied 1,505,153 37,631 4,208 — 1,546,992 Multifamily Real Estate 312,711 19,499 — — 332,210 Commercial & Industrial 539,999 9,391 1,062 — 550,452 Residential 1-4 Family - Commercial 523,964 11,715 3,534 201 539,414 Residential 1-4 Family - Mortgage 463,009 6,803 1,279 2,842 473,933 Auto 258,188 3,648 135 100 262,071 HELOC 519,928 4,225 969 601 525,723 Consumer and all other 425,520 3,491 40 251 429,302 Total $ 6,017,055 $ 198,078 $ 28,617 $ 4,018 $ 6,247,768 The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2017 (dollars in thousands): Pass Special Mention Substandard Doubtful Total Construction and Land Development $ 1,462 $ 1,260 $ 116 $ — $ 2,838 Commercial Real Estate - Owner Occupied 4,958 7,486 2,346 — 14,790 Commercial Real Estate - Non-Owner Occupied 3,920 1,394 1,296 — 6,610 Multifamily Real Estate — 80 — — 80 Commercial & Industrial 85 123 200 — 408 Residential 1-4 Family - Commercial 5,234 2,877 1,303 — 9,414 Residential 1-4 Family - Mortgage 2,764 329 71 569 3,733 HELOC 446 291 94 119 950 Consumer and all other 148 41 9 — 198 Total $ 19,017 $ 13,881 $ 5,435 $ 688 $ 39,021 The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2016 (dollars in thousands): Pass Special Mention Substandard Doubtful Total Construction and Land Development $ 1,092 $ 1,432 $ 398 $ — $ 2,922 Commercial Real Estate - Owner Occupied 5,520 8,889 3,934 — 18,343 Commercial Real Estate - Non-Owner Occupied 10,927 4,638 1,738 — 17,303 Multifamily Real Estate 343 1,723 — — 2,066 Commercial & Industrial 107 480 487 — 1,074 Residential 1-4 Family - Commercial 5,959 3,943 2,320 — 12,222 Residential 1-4 Family - Mortgage 2,598 512 352 516 3,978 HELOC 857 183 7 114 1,161 Consumer and all other 166 37 20 — 223 Total $ 27,569 $ 21,837 $ 9,256 $ 630 $ 59,292 Loans acquired are originally recorded at fair value, with certain loans being identified as impaired at the date of purchase. The fair values were determined based on the credit quality of the portfolio, expected future cash flows, and timing of those expected future cash flows. The following shows changes in the accretable yield for loans accounted for under ASC 310-30, Receivables – Loans and Debt Securities Acquired with Deteriorated Credit Quality, for the periods presented (dollars in thousands): For the year ended December 31, 2017 2016 Balance at beginning of period $ 19,739 $ 22,139 Accretion (6,426 ) (5,611 ) Reclass of nonaccretable difference due to improvement in expected cash flows 2,237 5,089 Other, net (1) (987 ) (1,878 ) Balance at end of period $ 14,563 $ 19,739 (1) This line item represents changes in the cash flows expected to be collected due to the impact of non-credit changes such as prepayment assumptions, changes in interest rates on variable rate PCI loans, and discounted payoffs that occurred in the year. The carrying value of the Company’s PCI loan portfolio, accounted for under ASC 310-30, totaled $39.0 million at December 31, 2017 and $59.3 million at December 31, 2016 . The outstanding balance of the Company’s PCI loan portfolio totaled $47.9 million at December 31, 2017 and $73.6 million at December 31, 2016 . The carrying value of the Company’s acquired performing loan portfolio, accounted for under ASC 310-20, Receivables – Nonrefundable Fees and Other Costs , totaled $892.4 million and $1.1 billion at December 31, 2017 and 2016 , respectively; the remaining discount on these loans totaled $13.7 million and $16.9 million , respectively. |