Note 5—Loans and Lease Receivables

Outstanding loan and lease receivables as of December 31, 2017 and 2016 were categorized as follows:

	2017			2016
Commercial real estate	$	891,971		$	796,950
Residential real estate		577,123			610,699
Construction, land development, and other land		105,996			141,122
Commercial and industrial		522,254			439,476
Installment and other		4,182			2,917
Lease financing receivables		174,165			155,999
Total loans and leases		2,275,691			2,147,163
Net unamortized deferred fees and costs		(1,720	)		(2,119	)
Initial direct costs		3,521			2,967
Allowance for loan and lease losses		(16,706	)		(10,923	)
Net loans and leases	$	2,260,786		$	2,137,088

	2017			2016
Lease financing receivables
Net minimum lease payments	$	188,986		$	168,345
Unguaranteed residual values		1,644			1,787
Unearned income		(16,465	)		(14,133	)
Total lease financing receivables		174,165			155,999
Initial direct costs		3,521			2,967
Lease financial receivables before allowance for lease losses	$	177,686		$	158,966

At December 31, 2017 and 2016, total loans and leases included the guaranteed amount of U.S. Government guaranteed loans of $77.0 million and $34.8 million, respectively. At December 31, 2017 and 2016, installment and other loans included overdraft deposits of $617,000 and $1.0 million, respectively, which were reclassified as loans. At December 31, 2017 and 2016, loans and loans held for sale pledged as security for borrowings were $516.9 million and $507.2 million, respectively. Total loans and leases consist of originated loans and leases, acquired impaired loans and acquired non-impaired loans and leases.

The minimum annual lease payments for lease financing receivables as of December 31, 2017 are summarized as follows:

	Minimum Lease Payments
2018	$	65,770
2019		53,702
2020		37,914
2021		21,743
2022		8,922
Thereafter		935
Total	$	188,986

Note 5—Loans and Lease Receivables (continued)

Originated loans and leases represent originations excluding loans acquired in a business combination. Acquired impaired loans are loans acquired from a business combination with evidence of credit quality deterioration and are accounted for under ASC Topic 310-30. Acquired non-impaired loans and leases represent loans and leases acquired from a business combination without evidence of credit quality deterioration and are accounted for under ASC Topic 310-20. Leases and revolving loans do not qualify to be accounted for as acquired impaired loans and are accounted for under ASC Topic 310-20. The following tables summarize the balances for each respective loan and lease category as of December 31, 2017 and 2016:

2017	Originated		Acquired Impaired		Acquired Non- Impaired		Total
Commercial real estate	$	513,622	$	166,712	$	211,359	$	891,693
Residential real estate		400,571		144,562		32,085		577,218
Construction, land development, and other land		97,638		5,946		1,845		105,429
Commercial and industrial		416,499		10,008		94,731		521,238
Installment and other		3,724		462		42		4,228
Lease financing receivables		141,329		—		36,357		177,686
Total loans and leases	$	1,573,383	$	327,690	$	376,419	$	2,277,492

2016	Originated		Acquired Impaired		Acquired Non- Impaired		Total
Commercial real estate	$	338,752	$	207,303	$	250,289	$	796,344
Residential real estate		394,168		175,717		40,853		610,738
Construction, land development, and other land		119,357		6,979		14,430		140,766
Commercial and industrial		309,097		13,464		115,677		438,238
Installment and other		2,021		574		364		2,959
Lease financing receivables		118,493		—		40,473		158,966
Total loans and leases	$	1,281,888	$	404,037	$	462,086	$	2,148,011

Acquired impaired loans—As part of the Ridgestone acquisition, the Bank acquired impaired loans that are accounted for under ASC 310‑30 in the amount of $39.7 million. Refer to Note 3—Acquisition of a Business for additional information regarding the transaction. There were no other acquired impaired loans purchased during 2017 or 2016. The following table presents a reconciliation of the undiscounted contractual cash flows, non‑accretable difference, accretable yield, and fair value of acquired impaired loans as of the acquisition date of October 14, 2016:


Undiscounted contractual cash flows	$	66,488
Undiscounted cash flows not expected to be collected (non-accretable difference)		(19,918	)
Undiscounted cash flows expected to be collected		46,570
Accretable yield at acquisition		(6,916	)
Estimated fair value of impaired loans acquired at acquisition	$	39,654

Note 5—Loans and Lease Receivables (continued)

The outstanding balance and carrying amount of all acquired impaired loans are summarized below. The balances do not include an allowance for loan and lease losses of $3.9 million and $1.6 million, respectively, at December 31, 2017 and 2016.

	2017				2016
	Outstanding Balance		Carrying Value		Outstanding Balance		Carrying Value
Commercial real estate	$	235,898	$	166,712	$	278,893	$	207,303
Residential real estate		207,660		144,562		236,384		175,717
Construction, land development, and other land		13,270		5,946		15,292		6,979
Commercial and industrial		18,333		10,008		23,164		13,464
Installment and other		1,819		462		1,976		574
Total acquired impaired loans	$	476,980	$	327,690	$	555,709	$	404,037

The following table summarizes the changes in accretable yield for acquired impaired loans for the years ended December 31, 2017, 2016, and 2015:

	2017			2016			2015
Beginning balance	$	36,868		$	43,915		$	68,238
Additions		—			6,916			—
Accretion to interest income		(24,597	)		(26,208	)		(35,547	)
Reclassification from nonaccretable difference		24,175			12,245			11,224
Ending balance	$	36,446		$	36,868		$	43,915

Acquired non‑impaired loans and leases—The Company acquired non‑impaired loans as part of the Ridgestone acquisition in the amount of $312.2 million. Refer to Note 3—Acquisition of a Business for additional information regarding the transaction.

The unpaid principal balance and carrying value for acquired non‑impaired loans and leases at December 31, 2017 and 2016 were as follows:

	2017				2016
	Unpaid Principal Balance		Carrying Value		Unpaid Principal Balance		Carrying Value
Commercial real estate	$	221,710	$	211,359	$	259,055	$	250,289
Residential real estate		32,605		32,085		41,282		40,853
Construction, land development, and other land		1,926		1,845		14,619		14,430
Commercial and industrial		105,529		94,731		125,806		115,677
Installment and other		355		42		402		364
Lease financing receivables		37,476		36,357		40,205		40,473
Total acquired non-impaired loans and leases	$	399,601	$	376,419	$	481,369	$	462,086