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Purchase Credit Impaired ("PCI") Loans
 12 Months Ended
Dec. 31, 2015
Receivables [Abstract]  
Purchase Credit Impaired (PCI) Loans
PURCHASED CREDIT IMPAIRED ("PCI") LOANS

Below is a summary of PCI loans by category at December 31, 2015 and 2014:
 
 
December 31, 2015
 
December 31, 2014
(in thousands)
Weighted-
Average
Risk Rating1
Recorded
Investment
PCI Loans
 
Weighted-
Average
Risk Rating1
Recorded
Investment
PCI Loans
Commercial and industrial
6.70
$
3,863

 
6.57
$
4,012

Real estate loans:
 
 
 
 
 
Commercial - investor owned
6.98
25,272

 
7.07
39,066

Commercial - owner occupied
6.30
19,414

 
6.35
22,695

Construction and land development
6.28
6,838

 
6.16
7,740

Residential
5.44
19,287

 
5.54
25,121

Total real estate loans
 
70,811

 
 
94,622

Consumer and other
1.89
84

 
5.39
469

Purchased credit impaired loans
 
$
74,758

 
 
$
99,103

 
 
 
 
 
 
(1) Risk 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 December 31, 2015 and 2014 is shown below:

 
December 31, 2015
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
Commercial and industrial
$
—

 
$
—

 
$
—

 
$
3,863

 
$
3,863

Real estate:
 
 
 
 
 
 
 
 
 
Commercial - investor owned
2,342

 
3,661

 
6,003

 
19,269

 
25,272

Commercial - owner occupied
731

 
—

 
731

 
18,683

 
19,414

Construction and land development
—

 
—

 
—

 
6,838

 
6,838

Residential
1,594

 
130

 
1,724

 
17,563

 
19,287

Consumer and other
4

 
—

 
4

 
80

 
84

Total
$
4,671

 
$
3,791

 
$
8,462

 
$
66,296

 
$
74,758


 
December 31, 2014
(in thousands)
30-89 Days
 Past Due
 
90 or More
Days
Past Due
 
Total
Past Due
 
Current
 
Total
    Commercial and industrial
$
—

 
$
16

 
$
16

 
$
3,996

 
$
4,012

    Real estate:
 
 
 
 
 
 
 
 
 
       Commercial - investor owned
878

 
6,484

 
7,362

 
31,704

 
39,066

       Commercial - owner occupied
—

 
2,759

 
2,759

 
19,936

 
22,695

       Construction and land development
774

 
—

 
774

 
6,966

 
7,740

       Residential
2,020

 
1,451

 
3,471

 
21,650

 
25,121

    Consumer and other
—

 
12

 
12

 
457

 
469

          Total
$
3,672

 
$
10,722

 
$
14,394

 
$
84,709

 
$
99,103



The following table is a rollforward of PCI loans, net of the allowance for loan losses, for the years ended December 31, 2015 and 2014.
(in thousands)
Contractual Cashflows
 
Non-accretable Difference
 
Accretable Yield
 
Carrying Amount
Balance January 1, 2015
$
178,145

 
$
65,719

 
$
28,733

 
$
83,693

Principal reductions and interest payments
(24,441
)
 
—

 
—

 
(24,441
)
Accretion of loan discount
—

 
—

 
(10,775
)
 
10,775

Changes in contractual and expected cash flows due to remeasurement
(3,574
)
 
(30,413
)
 
12,132

 
14,707

Reductions due to disposals
(33,441
)
 
(8,541
)
 
(4,749
)
 
(20,151
)
Balance December 31, 2015
$
116,689

 
$
26,765

 
$
25,341

 
$
64,583

 
 
 
 
 
 
 
 
Balance January 1, 2014
$
266,068

 
$
87,438

 
$
53,530

 
$
125,100

Principal reductions and interest payments
(35,718
)
 
—

 
—

 
(35,718
)
Accretion of loan discount
—

 
—

 
(15,747
)
 
15,747

Changes in contractual and expected cash flows due to remeasurement
(2,170
)
 
(7,403
)
 
(3,234
)
 
8,467

Reductions due to disposals
(50,035
)
 
(14,316
)
 
(5,816
)
 
(29,903
)
Balance December 31, 2014
$
178,145

 
$
65,719

 
$
28,733

 
$
83,693



The accretable yield is accreted into interest income over the estimated life of the acquired loans using the effective
yield method.

A summary of activity in the FDIC loss share receivable for the years ended December 31, 2015 and 2014 is as follows:
(in thousands)
December 31, 2015
 
December 31, 2014
Balance at beginning of period
$
15,866

 
$
34,319

Adjustments not reflected in income:
 
 
 
Cash received from the FDIC for covered assets
(3,528
)
 
(9,605
)
FDIC reimbursable losses (recoveries)
(1,386
)
 
459

Reductions for loss share termination
(5,922
)
 
—

Adjustments reflected in income:
 
 
 
Amortization, net
(2,293
)
 
(6,342
)
Loan impairment (impairment reversal)
(1,113
)
 
841

Reductions for payments on covered assets in excess of expected cash flows
(1,624
)
 
(3,806
)
Balance at end of period
$
—

 
$
15,866



Outstanding customer balances on PCI loans were $98.6 million and $135.3 million as of December 31, 2015, and December 31, 2014, respectively.

On December 7, 2015, the Company entered into an agreement to terminate all existing loss share agreements with the FDIC. Under the terms of the agreement, the FDIC made a net payment to the bank of $1.3 million. The agreement eliminated the FDIC clawback liability of $3.5 million and the FDIC loss share receivable of $7.2 million. Accordingly, a one-time pretax charge of $2.4 million was recorded in 2015 as a separate component of noninterest expense. See FDIC Loss Share Receivable and Clawback Liability in Note 1 – Summary of Significant Accounting Policies for information on the Company's accounting in prior years.