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Purchased Credit Impaired ("PCI") Loans
 9 Months Ended
Sep. 30, 2018
Receivables [Abstract]  
Purchase Credit Impaired (PCI) Loans
Below is a summary of PCI loans by category at September 30, 2018 and December 31, 2017:
 
 
September 30, 2018
 
December 31, 2017
(in thousands)
Weighted-
Average
Risk Rating1
Recorded
Investment
PCI Loans
 
Weighted-
Average
Risk Rating1
Recorded
Investment
PCI Loans
Commercial and industrial
6.39
$
2,923

 
6.38
$
3,212

Real estate:
 
 
 
 
 
Commercial - investor owned
7.23
25,172

 
7.36
42,887

Commercial - owner occupied
7.45
9,520

 
6.48
11,332

Construction and land development
6.01
5,168

 
5.99
5,883

Residential
6.35
6,291

 
5.99
10,781

Consumer and other
7.08
15

 
2.84
59

Total
 
$
49,089

 
 
$
74,154

1Risk ratings are based on the borrower's contractual obligation, which is not reflective of the purchase discount.


The aging of the recorded investment in past due PCI loans by portfolio class and category at September 30, 2018 and December 31, 2017, is shown below:

 
September 30, 2018
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
Commercial and industrial
$
—

 
$
—

 
$
—

 
$
2,923

 
$
2,923

Real estate:
 
 
 
 
 
 
 
 
 
Commercial - investor owned
627

 
1,190

 
1,817

 
23,355

 
25,172

Commercial - owner occupied
6,230

 
744

 
6,974

 
2,546

 
9,520

Construction and land development
146

 
—

 
146

 
5,022

 
5,168

Residential
33

 
46

 
79

 
6,212

 
6,291

Consumer and other
—

 
—

 
—

 
15

 
15

Total
$
7,036

 
$
1,980


$
9,016


$
40,073


$
49,089


 
December 31, 2017
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
Commercial and industrial
$
—

 
$
—

 
$
—

 
$
3,212

 
$
3,212

Real estate:
 
 
 
 
 
 
 
 
 
Commercial - investor owned
—

 
3,034

 
3,034

 
39,853

 
42,887

Commercial - owner occupied
—

 
673

 
673

 
10,659

 
11,332

Construction and land development
—

 
—

 
—

 
5,883

 
5,883

Residential
328

 
255

 
583

 
10,198

 
10,781

Consumer and other
—

 
—

 
—

 
59

 
59

Total
$
328

 
$
3,962


$
4,290


$
69,864


$
74,154



The following table is a roll forward of PCI loans, net of the allowance for loan losses, for the nine months ended September 30, 2018 and 2017.

(in thousands)
Contractual Cashflows
 
Non-accretable Difference
 
Accretable Yield
 
Carrying Amount
Balance December 31, 2017
$
112,710

 
$
29,005

 
$
13,964

 
$
69,741

Principal reductions and interest payments
(38,165
)
 
—

 
—

 
(38,165
)
Accretion of loan discount
—

 
—

 
(5,118
)
 
5,118

Changes in contractual and expected cash flows due to remeasurement
4,341

 
(8,939
)
 
3,179

 
10,101

Balance September 30, 2018
$
78,886

 
$
20,066


$
12,025


$
46,795

 
 
 
 
 
 
 
 
Balance December 31, 2016
$
66,003

 
$
18,902

 
$
13,176

 
$
33,925

Acquisitions
68,763

 
14,296

 
5,312

 
49,155

Principal reductions and interest payments
(16,319
)
 
—

 
—

 
(16,319
)
Accretion of loan discount
—

 
—

 
(5,473
)
 
5,473

Changes in contractual and expected cash flows due to remeasurement
11,110

 
(702
)
 
3,776

 
8,036

Reductions due to disposals
(6,393
)
 
(1,612
)
 
(1,595
)
 
(3,186
)
Balance September 30, 2017
$
123,164

 
$
30,884


$
15,196


$
77,084



The accretable yield is recognized in interest income over the estimated life of the acquired loans using the effective yield method. Outstanding customer balances on PCI loans were $68.6 million and $94.9 million as of September 30, 2018, and December 31, 2017, respectively.