7. LOANS

The loan portfolio classified by type and class as of the dates set forth were as follows:


	September 30, 2017
	Originated		Acquired		Total
	(Dollars in thousands)

Commercial & industrial	$	1,066,715	$	82,135	$	1,148,850
Real estate:
Owner occupied commercial real estate		312,162		96,236		408,398
Commercial real estate		806,327		262,415		1,068,742
Construction, land & land development		146,522		47,334		193,856
Residential mortgage		138,095		96,994		235,089
Consumer and other		15,418		1,408		16,826
Total loans held for investment	$	2,485,239	$	586,522	$	3,071,761

Total loans held for sale	$	17,673	$	-	$	17,673


	December 31, 2016
		Originated		Acquired		Total
		(Dollars in thousands)

Commercial & industrial	$	904,331	$	149,594	$	1,053,925
Real estate:
Owner occupied commercial real estate		264,876		129,334		394,210
Commercial real estate		816,029		327,722		1,143,751
Construction, land & land development		179,999		69,705		249,704
Residential mortgage		127,445		117,746		245,191
Consumer and other		9,248		2,191		11,439
Total loans held for investment	$	2,301,928	$	796,292	$	3,098,220

Total loans held for sale	$	23,989	$	-	$	23,989

The loan portfolio is comprised of three types, commercial and industrial loans, real estate loans and consumer and other loans. The real estate loans are further segregated into owner occupied commercial real estate, commercial real estate, which includes multi-family loans, construction, land and land development, which includes both commercial construction and loans for the construction of residential properties and residential mortgage, which includes first and second liens and home equity lines. Consumer and other loans includes various types of loans to consumers and overdrafts. Loans are further separated between loans originated by the Company and loans acquired.

Included in the loans held for investment balance was $13.4 million and $17.4 million of net deferred loan origination fees and unamortized premium and discount at September 30, 2017 and December 31, 2016, respectively. Also included in loans at September 30, 2017 and December 31, 2016 was $1.8 million and $3.0 million, respectively, in non-accretable discount on acquired credit impaired loans. Accrued interest receivable on loans was $7.9 million and $7.4 million at September 30, 2017 and December 31, 2016, respectively. Consumer and other loans include overdrafts of $41 thousand and $73 thousand as of September 30, 2017 and December 31, 2016, respectively.

The loan portfolio consists of various types of loans made to borrowers principally located in the Houston and Dallas metropolitan areas. Although the portfolio is diversified and generally secured by various types of collateral, a substantial portion of its debtors’ ability to honor their obligations is dependent on local economic conditions. The risks created by this geographic concentration and our exposure to energy-related borrowers have been considered by management in the determination of the adequacy of the allowance for loan losses.

Reserved-based energy loans held for investment represented approximately 0.4% and 0.5% of total funded loans as of September 30, 2017 and December 31, 2016, respectively. Energy-related service industry loans represented approximately 1.9% and 2.6% of total funded loans as of September 30, 2017 and December 31, 2016, respectively. As of September 30, 2017, and December 31, 2016, $12.1 million and $14.0 million of reserved-based energy loans and $34.3 million and $42.2 million of energy-related service industry loans were impaired, respectively.

Most of the Company’s activities are with customers located within the Texas cities of Houston, Dallas, Austin and their respective surrounding areas. Therefore, the Company’s exposure to credit risk is significantly affected by changes in the economy in the Houston and Dallas MSAs. The Company does not have any significant concentration to any one industry or customer. As of September 30, 2017 and December 31, 2016, there were no concentrations of loans related to any single industry in excess of 10% of total loans.

Loan maturities and rate sensitivity of the loans held for investment, as of the date indicated, were as follows:


	September 30, 2017
	Due in One Year or Less		Due After One Year Through Five Years		Due After Five Years		Total
	(Dollars in thousands)

Commercial & industrial	$	410,376	$	702,880	$	35,594	$	1,148,850
Real estate:
Owner occupied commercial real estate		39,677		147,336		221,385		408,398
Commercial real estate		159,098		672,213		237,431		1,068,742
Construction, land & land development		71,615		93,899		28,342		193,856
Residential mortgage		20,542		48,336		166,211		235,089
Consumer and Other		4,941		2,957		8,928		16,826

Total loans held for investment	$	706,249	$	1,667,621	$	697,891	$	3,071,761

Fixed rate	$	109,487	$	393,018	$	107,670	$	610,175
Adjustable rate(1)		596,762		1,274,603		590,221		2,461,586

Total loans held for investment	$	706,249	$	1,667,621	$	697,891	$	3,071,761

⁽¹⁾

Includes all adjustable rate loans irrespective of the time period to next interest rate reset.

In the ordinary course of business, the Company has granted loans to certain directors, officers and their affiliates. In the opinion of management, all transactions entered into between the Bank and such related parties have been and are in the ordinary course of business, made on the same terms and conditions as similar transactions with unaffiliated persons.

An analysis of activity with respect to these related-party loans for the nine months ended September 30, 2017 and the year ended December 31, 2016 was as follows:


	September 30,		December 31,
	2017		2016
	(Dollars in thousands)

Beginning balance	$	5,813	$	9,741
Advances		-		503
Repayments		(5,813)		(4,431)
Ending Balance	$	-	$	5,813

Acquired Loans — The outstanding principal balance and recorded investment in the total acquired loans from all completed acquisitions, as of the dates set forth, was as follows:


	September 30,		December 31,
	2017		2016
	(Dollars in thousands)

Credit impaired acquired loans:
Outstanding principal balance	$	23,182	$	30,694
Recorded investment		20,416		25,188
Discount, net	$	2,766	$	5,506

Other acquired loans:
Outstanding principal balance		568,529		775,709
Deferred fees, net		(77)		(174)
Recorded investment		566,106		771,104
Discount, net	$	2,346	$	4,431

Total acquired loans:
Outstanding principal balance		591,711		806,403
Deferred fees, net		(77)		(174)
Recorded investment		586,522		796,292
Discount, net	$	5,112	$	9,937

Changes in the accretable yield for credit impaired acquired loans for the periods indicated, were as follows:


	Nine Months Ended September 30,
	2017		2016
	(Dollars in thousands)

Balance at beginning of period	$	2,544	$	967
Reclassifications from non-accretable discount		(422)		3,087
Accretion		(1,166)		(1,051)
Balance at period end	$	956	$	3,003

Purchased credit impaired loans are evaluated on an ongoing basis after acquisition. Reclassifications from non-accretable discount to accretable yield are recorded based on the current estimates of the timing and amount of expected future cash flows.

Nonaccrual and Past Due Loans — When management doubts a borrower’s ability to meet payment obligations, which typically occurs when principal or interest payments are more than 90 days past due, the loans are placed on nonaccrual status.

The age analysis of loans, segregated by class, as of the dates set forth was as follows:


	September 30, 2017
	Loans Past Due and Still Accruing
	30 - 89 Days Past Due		90 Days or More Past Due		Total		Nonaccrual		Purchased Credit Impaired		Current		Total Loans
	(Dollars in thousands)

Originated Loans
Commercial & industrial	$	2,800	$	50	$	2,850	$	37,489	$	-	$	1,026,376	$	1,066,715
Real estate:
Owner occupied commercial real estate		500		357		857		-		-		311,305		312,162
Commercial real estate		5,165		-		5,165		202		-		800,960		806,327
Construction, land & land development		1,212		222		1,434		3,137		-		141,951		146,522
Residential mortgage		4,383		419		4,802		1,507		-		131,786		138,095
Consumer and other		84		21		105		52		-		15,261		15,418
Total originated loans	$	14,144	$	1,069	$	15,213	$	42,387	$	-	$	2,427,639	$	2,485,239

Acquired Loans
Commercial & industrial	$	218	$	-	$	218	$	8,707	$	3,339	$	69,871	$	82,135
Real estate:
Owner occupied commercial real estate		4,971		-		4,971		2,634		4,283		84,348		96,236
Commercial real estate		1,082		180		1,262		127		10,323		250,703		262,415
Construction, land & land development		1,144		3,579		4,723		107		17		42,487		47,334
Residential mortgage		818		-		818		37		2,454		93,685		96,994
Consumer and other		1		-		1		212		-		1,195		1,408
Total acquired loans	$	8,234	$	3,759	$	11,993	$	11,824	$	20,416	$	542,289	$	586,522
Total loans held for investment	$	22,378	$	4,828	$	27,206	$	54,211	$	20,416	$	2,969,928	$	3,071,761


	December 31, 2016
	Loans Past Due and Still Accruing
	30 - 89 Days Past Due		90 Days or More Past Due		Total		Nonaccrual		Purchased Credit Impaired		Current		Total Loans
	(Dollars in thousands)

Originated Loans
Commercial & industrial	$	1,515	$	1,106	$	2,621	$	36,331	$	-	$	865,379	$	904,331
Real estate:
Owner occupied commercial real estate		1,941		-		1,941		-		-		262,935		264,876
Commercial real estate		1,612		-		1,612		2,059		-		812,358		816,029
Construction, land & land development		4,375		-		4,375		-		-		175,624		179,999
Residential mortgage		1,791		63		1,854		1,254		-		124,337		127,445
Consumer and other		139		-		139		119		-		8,990		9,248
Total originated loans	$	11,373	$	1,169	$	12,542	$	39,763	$	-	$	2,249,623	$	2,301,928

Acquired Loans
Commercial & industrial	$	2,854	$	-	$	2,854	$	23,424	$	4,506	$	118,810	$	149,594
Real estate:
Owner occupied commercial real estate		223		-		223		8,942		5,339		114,830		129,334
Commercial real estate		2,529		-		2,529		2,002		10,807		312,384		327,722
Construction, land & land development		488		-		488		978		1,819		66,420		69,705
Residential mortgage		2,768		-		2,768		1,692		2,717		110,569		117,746
Consumer and other		226		-		226		5		-		1,960		2,191
Total acquired loans		9,088		-		9,088		37,043		25,188		724,973		796,292
Total loans held for investment	$	20,461	$	1,169	$	21,630	$	76,806	$	25,188	$	2,974,596	$	3,098,220

Impaired Loans — The following is a summary of information related to impaired, nonaccrual and restructured loans and accruing loans past due 90 days or more as of the dates set forth:


	September 30, 2017
	Originated		Acquired		Total
	(Dollars in thousands)

Nonaccrual loans	$	34,632	$	9,024	$	43,656
Accruing loans past due 90 days or more		1,069		3,759		4,828
Restructured loans - nonaccrual		7,755		2,800		10,555
Restructured loans - accruing		4,137		14,114		18,251
Total nonperforming loans	$	47,593	$	29,697	$	77,290


	December 31, 2016
	Originated		Acquired		Total
	(Dollars in thousands)

Nonaccrual loans	$	32,805	$	33,868	$	66,673
Accruing loans past due 90 days or more		1,169		-		1,169
Restructured loans - nonaccrual		6,959		3,174		10,133
Restructured loans - accruing		5,267		11,251		16,518
Total nonperforming loans	$	46,200	$	48,293	$	94,493

Based on an analysis of impaired loans at September 30, 2017 and December 31, 2016, an allowance of $7.8 million and $1.8 million, respectively, was allocated to impaired loans. There was approximately $275 thousand and $382 thousand in interest recognized on impaired loans, for the three months ended September 30, 2017 and 2016, respectively. There was approximately $610 thousand and $757 thousand in interest recognized on impaired loans, for the nine months ended September 30, 2017 and 2016, respectively. Interest recognized includes interest accrued on restructured loans that are performing based on their restructured terms and interest collected on paid nonaccrual loans.

Impaired loans of $54.2 million and $76.8 million at September 30, 2017 and December 31, 2016 respectively, have been categorized by management as nonaccrual loans. Interest foregone on nonaccrual loans for the three months ended September 30, 2017 and 2016 was approximately $1.0 million and $1.8 million, respectively, and for the nine months ended September 30, 2017 and 2016 was approximately $3.8 million and $3.4 million, respectively.

The following tables present, for the periods indicated, the average recorded investment in impaired loans and the approximate amount of interest recognized on impaired loans. Interest recognized includes interest accrued on restructured loans that have performed based on their restructured terms and interest collected on nonaccrual loans that were paid in full during the period.


	Three Months Ended
	September 30, 2017				September 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)

Originated Loans
Commercial & industrial	$	41,829	$	47	$	62,932	$	38
Owner occupied commercial real estate		-		-		1,498		73
Commercial real estate		723		-		6,589		80
Construction, land & land development		3,016		-		-		-
Residential mortgage		1,023		97		575		-
Consumer and other		75		1		183		1
Total originated loans	$	46,666	$	145	$	71,777	$	192

Acquired Loans
Commercial & industrial	$	16,693	$	77	$	20,362	$	63
Owner occupied commercial real estate		6,918		-		3,029		-
Commercial real estate		42		-		2,304		48
Construction, land & land development		1,021		30		239		-
Residential mortgage		212		23		1,959		79
Consumer and other		214		-		9		-
Total acquired loans	$	25,100	$	130	$	27,902	$	190
Total	$	71,766	$	275	$	99,679	$	382


	Nine Months Ended
	September 30, 2017				September 30, 2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)

Originated Loans
Commercial & industrial	$	39,892	$	59	$	51,141	$	57
Owner occupied commercial real estate		-		-		1,030		73
Commercial real estate		2,744		-		5,718		241
Construction, land & land development		1,005		-		205		180
Residential mortgage		1,977		123		531		10
Consumer and other		136		3		135		5
Total originated loans	$	45,754	$	185	$	58,760	$	566

Acquired Loans
Commercial & industrial	$	21,989	$	348	$	7,372	$	63
Owner occupied commercial real estate		7,977		-		1,431		-
Commercial real estate		1,093		-		1,932		48
Construction, land & land development		1,186		45		79		-
Residential mortgage		900		32		1,691		80
Consumer and other		168		-		4		-
Total acquired loans	$	33,313	$	425	$	12,509	$	191
Total	$	79,067	$	610	$	71,269	$	757

The following tables present additional information regarding impaired loans that were individually evaluated for impairment as of the dates indicated:


	September 30, 2017
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)

Originated Loans
With no related allowance recorded:
Commercial & industrial	$	18,372	$	18,557	$	-
Commercial real estate		202		202		-
Construction, land & land development		174		178		-
Residential mortgage		1,507		1,507		-
Consumer and other		20		21		-
Total with no related allowance recorded:	$	20,275	$	20,465	$	-

With an allowance recorded:
Commercial & industrial	$	23,233	$	23,306	$	7,415
Construction, land & land development		2,964		2,964		308
Consumer and other		52		52		29
Total with an allowance recorded:	$	26,249	$	26,322	$	7,752
Total originated loans	$	46,524	$	46,787	$	7,752

Acquired Loans
With no related allowance recorded:
Commercial & industrial	$	17,762	$	17,767	$	-
Owner occupied commercial real estate		6,880		6,914		-
Commercial real estate		127		127		-
Construction, land & land development		920		933		-
Residential mortgage		18		18		-
Consumer and other		209		203		-
Total with no related allowance recorded:	$	25,916	$	25,962	$	-

With an allowance recorded:
Residential mortgage	$	19	$	19	$	19
Consumer and other		3		3		3
Total with an allowance recorded:	$	22	$	22	$	22
Total acquired loans	$	25,938	$	25,984	$	22

Total:
Commercial & industrial	$	59,367	$	59,630	$	7,415
Real estate		12,811		12,862		327
Consumer and other		284		279		32
Total	$	72,462	$	72,771	$	7,774


	December 31, 2016
	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)

Originated Loans
With no related allowance recorded:
Commercial & industrial	$	33,415	$	33,671	$	-
Commercial real estate		7,155		7,162		-
Residential mortgage		1,254		1,249		-
Consumer and other		96		96		-
Total with no related allowance recorded:	$	41,920	$	42,178	$	-

With an allowance recorded:
Commercial & industrial	$	2,992	$	3,038	$	394
Consumer and other		119		119		119
Total with an allowance recorded:	$	3,111	$	3,157	$	513
Total originated loans	$	45,031	$	45,335	$	513

Acquired Loans
With no related allowance recorded:
Commercial & industrial	$	32,922	$	33,093	$	-
Owner occupied commercial real estate		8,942		8,949		-
Commercial real estate		2,002		2,026		-
Construction, land & land development		978		991		-
Residential mortgage		1,692		1,694		-
Consumer and other		2		2		-
Total with no related allowance recorded:	$	46,538	$	46,755	$	-

With an allowance recorded:
Commercial & industrial	$	1,753	$	1,774	$	1,260
Consumer and other		2		3		2
Total with an allowance recorded:	$	1,755	$	1,777	$	1,262
Total acquired loans	$	48,293	$	48,532	$	1,262

Total:
Commercial & Industrial	$	71,082	$	71,576	$	1,654
Real Estate		22,023		22,071		-
Consumer and other		219		220		121
Total	$	93,324	$	93,867	$	1,775

Credit Quality — Internally assigned risk grades for loans are defined as follows:

Grade 1 (Highest Quality — No Apparent Risk) — This category includes loans to borrowers of unquestioned credit standing which are secured by readily marketable collateral of undisputed value, with appropriate margin. It also includes loans to borrowing entities with: excellent capitalization, liquidity and earnings levels; quality management; positive financial trends; and favorable industry conditions.

Grade 2 (Good Quality — Minimal Risk) — This category includes loans to investment grade entities with: good liquidity and financial condition; nominal term debt; strong debt service capability; solid management; and quality financial information. These loans are usually secured with current assets, but may be unsecured. Alternative financing from other lenders is generally available to these borrowers.

Grade 3 (Satisfactory Quality — Acceptable Risk — Tier One) — This category includes loans to entities maintaining fair liquidity and acceptable financial conditions. The level of term debt is moderate, with adequate debt service capability. Earnings may be volatile, but borrowers in this category generally do not show a loss within the last three years. Primary debt service must be supported by identified secondary repayment sources or by guarantors with adequate and proven responsibility and capacity.

Grade 4 (Satisfactory Quality — Acceptable Risk — Tier Two) — This category includes loans to borrowers maintaining acceptable financial conditions; however, borrowers may exhibit certain characteristics of leverage or asset dependency that reflect a greater level of risk than Tier One credits. This category may also include borrowers exhibiting explainable interim losses within the previous three years and/or industry characteristics that warrant frequent monitoring.

Grade 5 (Monitored Loans) — This category includes loans with trends or characteristics which, if continued, could result in impaired repayment ability. The borrower may exhibit a low degree of liquidity and relatively high leverage, erratic earnings history (including the possibility of a reported loss in the past four years), significant term debt and a nominal cushion for debt service capacity. Loans in this category may also include financing to start-up borrowers backed by experienced management and significant capital investment or established companies in distressed industry conditions.

Grade 6 (Other Assets Especially Mentioned) — This category includes loans which have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or a weakening of the Company’s credit position at some future date. Grade 6 loans are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.

Grade 7 (Substandard — Accruing) — This category includes loans which are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any, or loans with identified weaknesses but where there is sufficient collateral value and/or cash flow coverage. This category includes loans that: (1) may require a secondary source of repayment (liquidation of collateral or repayment by a guarantor); (2) lack current financial information or appraisals; and/or (3) have collateral deficiencies such that the Company would be in an unsecured position with an obligor not deserving unsecured credit. This category may also include borrowers with operating losses in recent periods.

Grade 8 (Substandard — Nonaccrual) — This category includes loans with the same basic characteristics as Grade 7 loans that also meet the Company’s criteria for nonaccrual status, but do not warrant a Grade 9 or Grade 10 classification.

Grade 9 (Doubtful/Exposure) — This category includes loans with all the Grade 7 or 8 characteristics but with weaknesses that make collection (or liquidation) highly questionable and improbable.

Grade 10 (Loss) — This category includes loans which are considered uncollectible, or of such little value that they should no longer be carried as an asset of the Company.

The credit risk profile of loans aggregated by class and internally assigned risk grades as of the dates set forth were as follows:


	September 30, 2017
	Grade 1 - 4 (Pass)		Grade 5 (Watch)		Grade 6 (Special Mention)		Grade 7 (Substandard-Accrual)		Grade 8 (Substandard-Nonaccrual)		Grade 9 (Doubtful)			PCI	Total
	(Dollars in thousands)

Originated Loans
Commercial & Industrial	$	932,888	$	50,276	$	2,613	$	43,449	$	37,489	$	-	$	-	$	1,066,715
Owner Occupied Commercial Real Estate		300,558		2,678		8,426		500		-		-		-		312,162
Commercial Real Estate		698,303		53,421		44,917		9,484		202		-		-		806,327
Construction & Land Development		126,318		12,688		-		4,379		3,137		-		-		146,522
Residential Mortgage		127,082		6,734		-		2,772		1,507		-		-		138,095
Other Consumer		15,344		1		-		21		52		-		-		15,418
Total originated loans	$	2,200,493	$	125,798	$	55,956	$	60,605	$	42,387	$	-	$	-	$	2,485,239

Acquired Loans
Commercial & Industrial	$	41,279	$	6,755	$	12,864	$	9,191	$	8,707	$	-	$	3,339	$	82,135
Owner Occupied Commercial Real Estate		74,781		10,005		-		4,533		2,634		-		4,283		96,236
Commercial Real Estate		195,202		39,539		17,224		-		127		-		10,323		262,415
Construction & Land Development		18,870		24,004		2,955		1,381		107		-		17		47,334
Residential Mortgage		92,668		1,032		644		159		37		-		2,454		96,994
Other Consumer		1,196		-		-		-		212		-		-		1,408
Total acquired loans	$	423,996	$	81,335	$	33,687	$	15,264	$	11,824	$	-	$	20,416	$	586,522

Total loans	$	2,624,489	$	207,133	$	89,643	$	75,869	$	54,211	$	-	$	20,416	$	3,071,761


	December 31, 2016
	Grade 1 - 4 (Pass)		Grade 5 (Watch)		Grade 6 (Special Mention)		Grade 7 (Substandard-Accrual)		Grade 8 (Substandard-Nonaccrual)		Grade 9 (Doubtful)			PCI	Total
	(Dollars in thousands)

Originated Loans
Commercial & Industrial	$	818,352	$	11,427	$	24,133	$	14,088	$	34,520	$	1,811	$	-	$	904,331
Owner Occupied Commercial Real Estate		247,868		13,169		513		3,326		-		-		-		264,876
Commercial Real Estate		716,744		35,812		55,230		6,184		2,059		-		-		816,029
Construction & Land Development		171,287		5,590		1,931		1,191		-		-		-		179,999
Residential Mortgage		118,042		6,079		573		1,497		1,254		-		-		127,445
Other Consumer		9,032		5		58		34		119		-		-		9,248
Total originated loans	$	2,081,325	$	72,082	$	82,438	$	26,320	$	37,952	$	1,811	$	-	$	2,301,928

Acquired Loans
Commercial & Industrial	$	69,304	$	2,982	$	15,528	$	33,850	$	23,424	$	-	$	4,506	$	149,594
Owner Occupied Commercial Real Estate		94,450		2,533		9,788		8,282		8,942		-		5,339		129,334
Commercial Real Estate		248,583		23,854		39,833		2,643		2,002		-		10,807		327,722
Construction & Land Development		49,849		12,859		2,577		1,623		978		-		1,819		69,705
Residential Mortgage		111,818		948		215		356		1,692		-		2,717		117,746
Other Consumer		1,972		-		214		-		5		-		-		2,191
Total acquired loans	$	575,976	$	43,176	$	68,155	$	46,754	$	37,043	$	-	$	25,188	$	796,292

Total loans	$	2,657,301	$	115,258	$	150,593	$	73,074	$	74,995	$	1,811	$	25,188	$	3,098,220

Troubled Debt Restructurings — The restructuring of a loan is considered a troubled debt restructuring if both the borrower is experiencing financial difficulties and the creditor has granted a concession. Concessions may include interest rate reductions or below market interest rates, principal forgiveness, restructuring amortization schedules and other actions intended to minimize potential losses.

Troubled debt restructurings identified during the periods indicated were as follows:


	Nine Months Ended
	September 30, 2017					September 30, 2016
	Number of Contracts	Pre-Modification Outstanding Recorded Investment		Recorded Investment as of September 30, 2017		Number of Contracts	Pre-Modification Outstanding Recorded Investment		Recorded Investment as of September 30, 2016
	(Dollars in thousands)

Commercial & industrial	3	$	2,526	$	2,468	3	$	8,883	$	8,592
Owner occupied commercial real estate	3		5,501		5,448	-		-		-
Construction, land & land development	2		831		814	-		-		-
Consumer and other	1		208		208	-		-		-
Total	9	$	9,066	$	8,938	3	$	8,883	$	8,592

The modifications primarily relate to extending the maturity date of the loans, which includes loans modified post-bankruptcy. The Company did not forgive any principal or interest on the restructured loans. For the nine months ended September 30, 2017, the Company added $9.1 million in new troubled debt restructuring of which $8.9 million was still outstanding on September 30, 2017. The decrease in outstanding balance was primarily due to payments received. For the nine months ended September 30, 2016, the Company added $8.8 million in new troubled debt restructuring of which $8.6 million was still outstanding on September 30, 2016. The decrease in outstanding balance was primarily due to payments received.

Troubled debt restructurings are individually evaluated for impairment. The allowance for loan losses included specific reserves of $561 thousand related to $2.2 million of these loans at September 30, 2017.