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Portfolio Loans | 9 Months Ended
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Sep. 30, 2016
Receivables [Abstract] |
Portfolio Loans | PORTFOLIO LOANS Below is a summary of Portfolio loans by category at September 30, 2016 and December 31, 2015:
(in thousands) | September 30, 2016 |  | December 31, 2015
Commercial and industrial | $ | 1,598,815 |  |  | $ | 1,484,327 |
Real estate: |  |  |
Commercial - investor owned | 515,055 |  |  | 428,064 |
Commercial - owner occupied | 340,916 |  |  | 342,959 |
Construction and land development | 188,856 |  |  | 161,061 |
Residential | 233,960 |  |  | 196,498 |
Total real estate loans | 1,278,787 |  |  | 1,128,582 |
Consumer and other | 160,535 |  |  | 137,537 |
Portfolio loans | 3,038,137 |  |  | 2,750,446 |
Unearned loan fees, net | (432 | ) |  | 291 |
Portfolio loans, including unearned loan fees | $ | 3,037,705 |  |  | $ | 2,750,737 |
A summary of the activity in the allowance for loan losses and the recorded investment in Portfolio loans by class and category based on impairment method through September 30, 2016, and at December 31, 2015, is as follows:
(in thousands) | Commercial and industrial |  | CRE - investor owned |  | CRE - owner occupied |  | Construction and land development |  | Residential real estate |  | Consumer and other |  | Total
Allowance for loan losses: |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at December 31, 2015 | $ | 22,056 |  |  | $ | 3,484 |  |  | $ | 2,969 |  |  | $ | 1,704 |  |  | $ | 1,796 |  |  | $ | 1,432 |  |  | $ | 33,441 |
Provision (provision reversal) for loan losses | 1,120 |  |  | (116 | ) |  | 80 |  |  | (65 | ) |  | 11 |  |  | (197 | ) |  | 833 |
Losses charged off | (68 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (5 | ) |  | (73 | )
Recoveries | 53 |  |  | 7 |  |  | 68 |  |  | 6 |  |  | 34 |  |  | 4 |  |  | 172 |
Balance at March 31, 2016 | $ | 23,161 |  |  | $ | 3,375 |  |  | $ | 3,117 |  |  | $ | 1,645 |  |  | $ | 1,841 |  |  | $ | 1,234 |  |  | $ | 34,373 |
Provision (provision reversal) for loan losses | 302 |  |  | (27 | ) |  | (541 | ) |  | (434 | ) |  | (80 | ) |  | 1,496 |  |  | 716 |
Losses charged off | (157 | ) |  | — |  |  | — |  |  | — |  |  | — |  |  | (6 | ) |  | (163 | )
Recoveries | 502 |  |  | 8 |  |  | 15 |  |  | 8 |  |  | 36 |  |  | 3 |  |  | 572 |
Balance at June 30, 2016 | $ | 23,808 |  |  | $ | 3,356 |  |  | $ | 2,591 |  |  | $ | 1,219 |  |  | $ | 1,797 |  |  | $ | 2,727 |  |  | $ | 35,498 |
Provision (provision reversal) for loan losses | 3,575 |  |  | 10 |  |  | 94 |  |  | (730 | ) |  | 168 |  |  | (79 | ) |  | 3,038 |
Losses charged off | (2,044 | ) |  | — |  |  | — |  |  | — |  |  | (25 | ) |  | (4 | ) |  | (2,073 | )
Recoveries | 69 |  |  | 8 |  |  | 17 |  |  | 913 |  |  | 26 |  |  | 2 |  |  | 1,035 |
Balance at September 30, 2016 | $ | 25,408 |  |  | $ | 3,374 |  |  | $ | 2,702 |  |  | $ | 1,402 |  |  | $ | 1,966 |  |  | $ | 2,646 |  |  | $ | 37,498 |
(in thousands) | Commercial and industrial |  | CRE - investor owned |  | CRE - owner occupied |  | Construction and land development |  | Residential real estate |  | Consumer and other |  | Total
Balance September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses - Ending balance: |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 3,785 |  |  | $ | — |  |  | $ | — |  |  | $ | 158 |  |  | $ | 3 |  |  | $ | 1,855 |  |  | $ | 5,801 |
Collectively evaluated for impairment | 21,623 |  |  | 3,374 |  |  | 2,702 |  |  | 1,244 |  |  | 1,963 |  |  | 791 |  |  | 31,697 |
Total | $ | 25,408 |  |  | $ | 3,374 |  |  | $ | 2,702 |  |  | $ | 1,402 |  |  | $ | 1,966 |  |  | $ | 2,646 |  |  | $ | 37,498 |
Loans - Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 13,414 |  |  | $ | 252 |  |  | $ | 1,666 |  |  | $ | 1,907 |  |  | $ | 124 |  |  | $ | 4,499 |  |  | $ | 21,862 |
Collectively evaluated for impairment | 1,585,401 |  |  | 514,803 |  |  | 339,250 |  |  | 186,949 |  |  | 233,836 |  |  | 155,604 |  |  | 3,015,843 |
Total | $ | 1,598,815 |  |  | $ | 515,055 |  |  | $ | 340,916 |  |  | $ | 188,856 |  |  | $ | 233,960 |  |  | $ | 160,103 |  |  | $ | 3,037,705 |
Balance December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for loan losses - Ending balance: |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 1,953 |  |  | $ | — |  |  | $ | 6 |  |  | $ | 369 |  |  | $ | 7 |  |  | $ | — |  |  | $ | 2,335 |
Collectively evaluated for impairment | 20,103 |  |  | 3,484 |  |  | 2,963 |  |  | 1,335 |  |  | 1,789 |  |  | 1,432 |  |  | 31,106 |
Total | $ | 22,056 |  |  | $ | 3,484 |  |  | $ | 2,969 |  |  | $ | 1,704 |  |  | $ | 1,796 |  |  | $ | 1,432 |  |  | $ | 33,441 |
Loans - Ending balance: |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 4,514 |  |  | $ | 921 |  |  | $ | 1,962 |  |  | $ | 2,800 |  |  | $ | 681 |  |  | $ | — |  |  | $ | 10,878 |
Collectively evaluated for impairment | 1,479,813 |  |  | 427,143 |  |  | 340,997 |  |  | 158,261 |  |  | 195,817 |  |  | 137,828 |  |  | 2,739,859 |
Total | $ | 1,484,327 |  |  | $ | 428,064 |  |  | $ | 342,959 |  |  | $ | 161,061 |  |  | $ | 196,498 |  |  | $ | 137,828 |  |  | $ | 2,750,737 |
A summary of Portfolio loans individually evaluated for impairment by category at September 30, 2016 and December 31, 2015, is as follows:
| September 30, 2016
(in thousands) | Unpaid Contractual Principal Balance |  | Recorded Investment With No Allowance |  | Recorded Investment With Allowance |  | Total Recorded Investment |  | Related Allowance |  | Average Recorded Investment
Commercial and industrial | $ | 14,895 |  |  | $ | 136 |  |  | $ | 13,134 |  |  | $ | 13,270 |  |  | $ | 3,785 |  |  | $ | 15,666 |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Commercial - investor owned | 252 |  |  | 253 |  |  | — |  |  | 253 |  |  | — |  |  | 250 |
Commercial - owner occupied | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Construction and land development | 1,907 |  |  | 1,920 |  |  | 358 |  |  | 2,278 |  |  | 158 |  |  | 2,403 |
Residential | 149 |  |  | 65 |  |  | 64 |  |  | 129 |  |  | 3 |  |  | 652 |
Consumer and other | 4,499 |  |  | — |  |  | 4,508 |  |  | 4,508 |  |  | 1,855 |  |  | 4,598 |
Total | $ | 21,702 |  |  | $ | 2,374 |  |  | $ | 18,064 |  |  | $ | 20,438 |  |  | $ | 5,801 |  |  | $ | 23,569 |
| December 31, 2015
(in thousands) | Unpaid Contractual Principal Balance |  | Recorded Investment With No Allowance |  | Recorded Investment With Allowance |  | Total Recorded Investment |  | Related Allowance |  | Average Recorded Investment
Commercial and industrial | $ | 5,554 |  |  | $ | 509 |  |  | $ | 4,204 |  |  | $ | 4,713 |  |  | $ | 1,953 |  |  | $ | 6,970 |
Real estate loans: |  |  |  |  |  |  |  |  |  |  |
Commercial - investor owned | 927 |  |  | 927 |  |  | — |  |  | 927 |  |  | — |  |  | 970 |
Commercial - owner occupied | 329 |  |  | 85 |  |  | 113 |  |  | 198 |  |  | 6 |  |  | 301 |
Construction and land development | 4,349 |  |  | 2,914 |  |  | 530 |  |  | 3,444 |  |  | 369 |  |  | 3,001 |
Residential | 705 |  |  | 637 |  |  | 68 |  |  | 705 |  |  | 7 |  |  | 682 |
Consumer and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | $ | 11,864 |  |  | $ | 5,072 |  |  | $ | 4,915 |  |  | $ | 9,987 |  |  | $ | 2,335 |  |  | $ | 11,924 |
The following table presents details for past due and impaired loans:
| Three months ended September 30, |  | Nine months ended September 30,
(in thousands) | 2016 |  | 2015 |  | 2016 |  | 2015
Total interest income that would have been recognized under original terms | $ | 226 |  |  | $ | 369 |  |  | $ | 703 |  |  | $ | 913 |
Total cash received and recognized as interest income on non-accrual loans | 203 |  |  | 81 |  |  | 253 |  |  | 206 |
Total interest income recognized on impaired loans | 32 |  |  | 4 |  |  | 63 |  |  | 31 |
There were no loans over 90 days past due and still accruing interest at September 30, 2016 or December 31, 2015. The recorded investment in impaired Portfolio loans by category at September 30, 2016 and December 31, 2015, is as follows:
| September 30, 2016
(in thousands) | Non-accrual |  | Restructured |  | Loans over 90 days past due and still accruing interest |  | Total
Commercial and industrial | $ | 10,959 |  |  | $ | 2,311 |  |  | $ | — |  |  | $ | 13,270 |
Real estate: |  |  |  |  |  |  |
Commercial - investor owned | 253 |  |  | — |  |  | — |  |  | 253 |
Commercial - owner occupied | — |  |  | — |  |  | — |  |  | — |
Construction and land development | 2,258 |  |  | 20 |  |  | — |  |  | 2,278 |
Residential | 129 |  |  | — |  |  | — |  |  | 129 |
Consumer and other | 4,508 |  |  | — |  |  | — |  |  | 4,508 |
Total | $ | 18,107 |  |  | $ | 2,331 |  |  | $ | — |  |  | $ | 20,438 |
| December 31, 2015
(in thousands) | Non-accrual |  | Restructured |  | Loans over 90 days past due and still accruing interest |  | Total
Commercial and industrial | $ | 4,406 |  |  | $ | 307 |  |  | $ | — |  |  | $ | 4,713 |
Real estate: |  |  |  |  |  |  |
Commercial - investor owned | 927 |  |  | — |  |  | — |  |  | 927 |
Commercial - owner occupied | 198 |  |  | — |  |  | — |  |  | 198 |
Construction and land development | 3,444 |  |  | — |  |  | — |  |  | 3,444 |
Residential | 705 |  |  | — |  |  | — |  |  | 705 |
Consumer and other | — |  |  | — |  |  | — |  |  | — |
Total | $ | 9,680 |  |  | $ | 307 |  |  | $ | — |  |  | $ | 9,987 |
The recorded investment by category for the Portfolio loans that have been restructured during the three and nine months ended September 30, 2016 and 2015, is as follows:
| Three months ended September 30, 2016 |  | Three months ended September 30, 2015
(in thousands, except for number of loans) | Number of Loans |  | Pre-Modification Outstanding Recorded Balance |  | Post-Modification Outstanding Recorded Balance |  | Number of Loans |  | Pre-Modification Outstanding Recorded Balance |  | Post-Modification Outstanding Recorded Balance
Commercial and industrial | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
Real estate: |  |  |  |  |  |  |  |  |  |  |
Commercial - investor owned | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial - owner occupied | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Construction and land development | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Residential | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
| Nine months ended September 30, 2016 |  | Nine months ended September 30, 2015
(in thousands, except for number of loans) | Number of Loans |  | Pre-Modification Outstanding Recorded Balance |  | Post-Modification Outstanding Recorded Balance |  | Number of Loans |  | Pre-Modification Outstanding Recorded Balance |  | Post-Modification Outstanding Recorded Balance
Commercial and industrial | 2 |  |  | $ | 2,341 |  |  | $ | 2,341 |  |  | — |  |  | $ | — |  |  | $ | — |
Real estate: |  |  |  |  |  |  |  |  |  |  |
Commercial - investor owned | 1 |  |  | 248 |  |  | 248 |  |  | — |  |  | — |  |  | — |
Commercial - owner occupied | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Construction and land development | 1 |  |  | 20 |  |  | 20 |  |  | — |  |  | — |  |  | — |
Residential | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Total | 4 |  |  | $ | 2,609 |  |  | $ | 2,609 |  |  | — |  |  | $ | — |  |  | $ | — |
The restructured loans resulted from deferral of principal and extending the term to maturity. As of September 30, 2016, the Company had $1.2 million specific reserves allocated to loans that have been restructured. There were no Portfolio loans restructured that subsequently defaulted during the three and nine months ended September 30, 2016 or 2015. The aging of the recorded investment in past due Portfolio loans by portfolio class and category at September 30, 2016 and December 31, 2015 is shown below.
| September 30, 2016
(in thousands) | 30-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due |  | Current |  | Total
Commercial and industrial | $ | — |  |  | $ | 364 |  |  | $ | 364 |  |  | $ | 1,598,451 |  |  | $ | 1,598,815 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 136 |  |  | — |  |  | 136 |  |  | 514,919 |  |  | 515,055 |
Commercial - owner occupied | 225 |  |  | — |  |  | 225 |  |  | 340,691 |  |  | 340,916 |
Construction and land development | — |  |  | 1,529 |  |  | 1,529 |  |  | 187,327 |  |  | 188,856 |
Residential | 73 |  |  | 60 |  |  | 133 |  |  | 233,827 |  |  | 233,960 |
Consumer and other | — |  |  | — |  |  | — |  |  | 160,103 |  |  | 160,103 |
Total | $ | 434 |  |  | $ | 1,953 |  |  | $ | 2,387 |  |  | $ | 3,035,318 |  |  | $ | 3,037,705 |
| December 31, 2015
(in thousands) | 30-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due |  | Current |  | Total
Commercial and industrial | $ | 505 |  |  | $ | 888 |  |  | $ | 1,393 |  |  | $ | 1,482,934 |  |  | $ | 1,484,327 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 464 |  |  | — |  |  | 464 |  |  | 427,600 |  |  | 428,064 |
Commercial - owner occupied | 94 |  |  | 184 |  |  | 278 |  |  | 342,681 |  |  | 342,959 |
Construction and land development | 384 |  |  | 2,273 |  |  | 2,657 |  |  | 158,404 |  |  | 161,061 |
Residential | 70 |  |  | 681 |  |  | 751 |  |  | 195,747 |  |  | 196,498 |
Consumer and other | 20 |  |  | — |  |  | 20 |  |  | 137,808 |  |  | 137,828 |
Total | $ | 1,537 |  |  | $ | 4,026 |  |  | $ | 5,563 |  |  | $ | 2,745,174 |  |  | $ | 2,750,737 |
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as current financial information, payment experience, credit documentation, and current economic factors among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:
• | Grades 1, 2, and 3 – Includes loans to borrowers with a continuous record of strong earnings, sound balance sheet condition and capitalization, ample liquidity with solid cash flow, and whose management team has experience and depth within their industry.
• | Grade 4 – Includes loans to borrowers with positive trends in profitability, satisfactory capitalization and balance sheet condition, and sufficient liquidity and cash flow.
• | Grade 5 – Includes loans to borrowers that may display fluctuating trends in sales, profitability, capitalization, liquidity, and cash flow.
• | Grade 6 – Includes loans to borrowers where an adverse change or perceived weakness has occurred, but may be correctable in the near future. Alternatively, this rating category may also include circumstances where the borrower is starting to reverse a negative trend or condition, or has recently been upgraded from a 7, 8, or 9 rating.
• | Grade 7 – Watch credits are borrowers that have experienced financial setback of a nature that is not determined to be severe or influence ‘ongoing concern’ expectations. Although possible, no loss is anticipated, due to strong collateral and/or guarantor support.
• | Grade 8 – Substandard credits will include those borrowers characterized by significant losses and sustained downward trends in balance sheet condition, liquidity, and cash flow. Repayment reliance may have shifted to secondary sources. Collateral exposure may exist and additional reserves may be warranted.
• | Grade 9 – Doubtful credits include borrowers that may show deteriorating trends that are unlikely to be corrected. Collateral values may appear insufficient for full recovery, therefore requiring a partial charge-off, or debt renegotiation with the borrower. The borrower may have declared bankruptcy or bankruptcy is likely in the near term. All doubtful rated credits will be on non-accrual.
The recorded investment by risk category of the Portfolio loans by portfolio class and category at September 30, 2016, which is based upon the most recent analysis performed, and December 31, 2015 is as follows:
| September 30, 2016
(in thousands) | Pass (1-6) |  | Watch (7) |  | Substandard (8) |  | Doubtful (9) |  | Total
Commercial and industrial | $ | 1,457,729 |  |  | $ | 63,572 |  |  | $ | 77,514 |  |  | $ | — |  |  | $ | 1,598,815 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 501,228 |  |  | 9,549 |  |  | 4,278 |  |  | — |  |  | 515,055 |
Commercial - owner occupied | 311,427 |  |  | 25,369 |  |  | 4,120 |  |  | — |  |  | 340,916 |
Construction and land development | 179,515 |  |  | 6,050 |  |  | 3,291 |  |  | — |  |  | 188,856 |
Residential | 226,287 |  |  | 4,224 |  |  | 3,449 |  |  | — |  |  | 233,960 |
Consumer and other | 153,458 |  |  | 711 |  |  | 5,934 |  |  | — |  |  | 160,103 |
Total | $ | 2,829,644 |  |  | $ | 109,475 |  |  | $ | 98,586 |  |  | $ | — |  |  | $ | 3,037,705 |
| December 31, 2015
(in thousands) | Pass (1-6) |  | Watch (7) |  | Substandard (8) |  | Doubtful (9) |  | Total
Commercial and industrial | $ | 1,356,864 |  |  | $ | 90,370 |  |  | $ | 37,093 |  |  | $ | — |  |  | $ | 1,484,327 |
Real estate: |  |  |  |  |  |  |  |  |
Commercial - investor owned | 403,820 |  |  | 18,868 |  |  | 5,376 |  |  | — |  |  | 428,064 |
Commercial - owner occupied | 314,791 |  |  | 24,727 |  |  | 3,441 |  |  | — |  |  | 342,959 |
Construction and land development | 146,601 |  |  | 10,114 |  |  | 4,346 |  |  | — |  |  | 161,061 |
Residential | 188,269 |  |  | 5,138 |  |  | 3,091 |  |  | — |  |  | 196,498 |
Consumer and other | 131,060 |  |  | 721 |  |  | 6,047 |  |  | — |  |  | 137,828 |
Total | $ | 2,541,405 |  |  | $ | 149,938 |  |  | $ | 59,394 |  |  | $ | — |  |  | $ | 2,750,737 |

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- Definition The entire disclosure for financing receivables. Examples of financing receivables include, but are not limited to, loans, trade accounts receivables, notes receivable, credit cards, and receivables relating to a lessor's right(s) to payment(s) from a lease other than an operating lease that is recognized as assets. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 55 -Paragraph 14 -URI http://asc.fasb.org/extlink&oid=32702940&loc=SL6953791-111525 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=49124121&loc=d3e4975-111524 + Details
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