Note 6 — Loans and Allowance for Loan Losses

The following is a summary of non-acquired loans:


	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
Non-acquired loans:
Commercial non-owner occupied real estate:
Construction and land development	$	562,336	$	401,979	$	372,077
Commercial non-owner occupied		630,437		487,777		406,489
Total commercial non-owner occupied real estate		1,192,773		889,756		778,566
Consumer real estate:
Consumer owner occupied		1,183,441		1,018,984		987,863
Home equity loans		363,825		319,255		308,563
Total consumer real estate		1,547,266		1,338,239		1,296,426
Commercial owner occupied real estate		1,153,480		1,033,398		1,012,428
Commercial and industrial		617,525		503,808		462,588
Other income producing property		179,595		175,848		169,997
Consumer		305,687		233,104		223,210
Other loans		11,787		46,573		51,501
Total non-acquired loans		5,008,113		4,220,726		3,994,716
Less allowance for loan losses		(37,319)		(34,090)		(35,116)
Non-acquired loans, net	$	4,970,794	$	4,186,636	$	3,959,600

The following is a summary of acquired non-credit impaired loans accounted for under FASB ASC Topic 310-20, net of related discount:


	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
FASB ASC Topic 310-20 acquired loans:
Commercial non-owner occupied real estate:
Construction and land development	$	10,683	$	13,849	$	16,482
Commercial non-owner occupied		35,775		40,103		42,172
Total commercial non-owner occupied real estate		46,458		53,952		58,654
Consumer real estate:
Consumer owner occupied		435,132		518,107		542,278
Home equity loans		168,758		190,968		203,025
Total consumer real estate		603,890		709,075		745,303
Commercial owner occupied real estate		29,444		39,220		42,524
Commercial and industrial		14,201		25,475		27,459
Other income producing property		43,152		51,169		56,092
Consumer		148,512		170,647		177,408
Total FASB ASC Topic 310-20 acquired loans	$	885,657	$	1,049,538	$	1,107,440

The unamortized discounted related to the acquired non-credit impaired loans totaled $12.6 million, $16.8 million, and $18.7 million at September 30, 2016, December 31, 2015, and September 30, 2015, respectively.

In accordance with FASB ASC Topic 310-30, the Company aggregated acquired loans that have common risk characteristics into pools of loan categories as described in the table below. The following is a summary of acquired credit impaired loans accounted for under FASB ASC Topic 310-30 (identified as credit impaired at the time of acquisition), net of related discount:


	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
FASB ASC Topic 310-30 acquired loans:
Commercial loans greater than or equal to $1 million-CBT	$	10,958	$	12,628	$	12,963
Commercial real estate		220,489		255,430		266,465
Commercial real estate—construction and development		47,081		54,272		55,168
Residential real estate		268,968		313,319		330,754
Consumer		61,866		70,734		73,632
Commercial and industrial		26,658		31,193		34,074
Single pay		—		—		24
Total FASB ASC Topic 310-30 acquired loans		636,020		737,576		773,080
Less allowance for loan losses		(3,403)		(3,706)		(4,474)
FASB ASC Topic 310-30 acquired loans, net	$	632,617	$	733,870	$	768,606

Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting carrying values of acquired credit impaired loans as of September 30, 2016, December 31, 2015 and September 30, 2015 are as follows:


	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
Contractual principal and interest	$	822,340	$	968,857	$	1,025,557
Non-accretable difference		(22,222)		(29,743)		(52,463)
Cash flows expected to be collected		800,118		939,114		973,094
Accretable yield		(164,098)		(201,538)		(200,014)
Carrying value	$	636,020	$	737,576	$	773,080
Allowance for acquired loan losses	$	(3,403)	$	(3,706)	$	(4,474)

Income on acquired credit impaired loans that are not impaired at the acquisition date is recognized in the same manner as loans impaired at the acquisition date. A portion of the fair value discount on acquired non-impaired loans has been ascribed as an accretable difference that is accreted into interest income over the estimated remaining life of the loans. The remaining nonaccretable difference represents cash flows not expected to be collected.

The following are changes in the carrying value of acquired credit impaired loans:


	Nine Months Ended September 30,
(Dollars in thousands)	2016		2015
Balance at beginning of period	$	733,870	$	919,402
Net reductions for payments, foreclosures, and accretion		(101,556)		(153,687)
Change in the allowance for loan losses on acquired loans		303		2,891
Balance at end of period, net of allowance for loan losses on acquired loans	$	632,617	$	768,606

The table below reflects refined accretable yield balance for acquired credit impaired loans:


	Nine Months Ended September 30,
(Dollars in thousands)	2016		2015
Balance at beginning of period	$	201,538	$	306,826
Accretion		(56,850)		(76,168)
Reclass of nonaccretable difference due to improvement in expected cash flows		18,631		39,030
Other changes, net		779		(69,674)
Balance at end of period	$	164,098	$	200,014

In the third quarter of 2016, the accretable yield balance declined by $17.3 million as loan accretion (income) was recognized. This was partially offset by improved expected cash flows of $5.5 million.

During the recast in the first quarter of 2015, the accretable yield balance declined significantly by $64.1 million. This decline was primarily the result of an increase in the assumed prepayment speed of certain acquired loan pools from the FFHI acquisition. The actual cash flows were faster than what had been previously expected (assumed) and required an adjustment in the assumed prepayment speed used to forecast expected cash flows. The result was a decrease in the accretable yield balance, however, there was no impairment since this changed the timing and amount of the receipt of future cash on these pools of loans (the Company anticipates receiving the cash sooner than previously expected).

Our loan loss policy adheres to generally accepted accounting principles in the United States as well as interagency guidance. The allowance for loan losses is based upon estimates made by management. We maintain an allowance for loan losses at a level that we believe is appropriate to cover estimated credit losses on individually evaluated loans that are determined to be impaired as well as estimated credit losses inherent in the remainder of our loan portfolio. Arriving at the allowance involves a high degree of management’s judgment and results in a range of estimated losses. We regularly evaluate the adequacy of the allowance through our internal risk rating system, outside credit review, and regulatory agency examinations to assess the quality of the loan portfolio and identify problem loans. The evaluation process also includes our analysis of current economic conditions, composition of the loan portfolio, past due and nonaccrual loans, concentrations of credit, lending policies and procedures, and historical loan loss experience. While management uses available information to recognize losses on loans, future additions to the allowance may be necessary based on, among other factors, changes in economic conditions in our markets. In addition, regulatory agencies, as an integral part of their examination process, periodically review our allowances for losses on loans. These agencies may require management to recognize additions to the allowances based on their judgments about information available to them at the time of their examination. Because of these and other factors, it is possible that the allowances for losses on loans may change. The provision for loan losses is charged to expense in an amount necessary to maintain the allowance at an appropriate level.

The allowance for loan losses on non-acquired loans consists of general and specific reserves. The general reserves are determined by applying loss percentages to the portfolio that are based on historical loss experience for each class of loans and management’s evaluation and “risk grading” of the loan portfolio. Additionally, the general economic and business conditions affecting key lending areas, credit quality trends, collateral values, loan volumes and concentrations, seasoning of the loan portfolio, the findings of internal and external credit reviews and results from external bank regulatory examinations are included in this evaluation. Currently, these adjustments are applied to the non-acquired loan portfolio when estimating the level of reserve required. The specific reserves are determined on a loan-by-loan basis based on management’s evaluation of our exposure for each credit, given the current payment status of the loan and the value of any underlying collateral. These are loans classified by management as doubtful or substandard. For such loans that are also classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying value of that loan. Generally, the need for specific reserve is evaluated on impaired loans, and once a specific reserve is established for a loan, a charge off of that amount occurs in the quarter subsequent to the establishment of the specific reserve. Loans that are determined to be impaired are provided a specific reserve, if necessary, and are excluded from the calculation of the general reserves.

With the FFHI acquisition, the Company segregated the loan portfolio into performing loans (“non-credit impaired”) and acquired credit impaired loans. The performing loans and revolving type loans are accounted for under FASB ASC 310-20, with each loan being accounted for individually. The allowance for loan losses on these loans will be measured and recorded consistent with non-acquired loans. The acquired credit impaired loans will follow the description in the next paragraph.

In determining the acquisition date fair value of acquired credit impaired loans, and in subsequent accounting, the Company generally aggregates purchased loans into pools of loans with common risk characteristics. Expected cash flows at the acquisition date in excess of the fair value of loans are recorded as interest income over the life of the loans using a level yield method if the timing and amount of the future cash flows of the pool is reasonably estimable. Subsequent to the acquisition date, increases in cash flows over those expected at the acquisition date are reclassified from the non-accretable difference to accretable yield and recognized as interest income prospectively. Decreases in expected cash flows after the acquisition date are recognized by recording an allowance for loan losses. Management analyzes the acquired loan pools using various assessments of risk to determine an expected loss. The expected loss is derived based upon a loss given default based upon the collateral type and/or detailed review by loan officers and the probability of default that is determined based upon historical data at the loan level. All acquired loans managed by the Bank’s Special Assets Management Group are reviewed quarterly and assigned a loss given default. Acquired loans not managed by the Bank’s Special Assets Management Group are reviewed twice a year in a similar method to the Company’s originated portfolio of loans which follow review thresholds based on risk rating categories. In the fourth quarter of 2015, the Company modified its methodology to a more granular approach in determining loss given default on substandard loans with a net book balance between $100,000 and $500,000 by adjusting the loss given default to 90% of the most current collateral valuation based on appraised value. Substandard loans greater than $500,000 were individually assigned loss given defaults each quarter. Trends are reviewed in terms of accrual status, past due status, and weighted-average grade of the loans within each of the accounting pools. In addition, the relationship between the change in the unpaid principal balance and change in the mark is assessed to correlate the directional consistency of the expected loss for each pool. Offsetting the impact of the provision established for acquired loans covered under FDIC loss share agreements, the receivable from the FDIC is adjusted to reflect the indemnified portion of the post-acquisition exposure with a corresponding credit to the provision for loan losses.

On June 23, 2016, the Bank entered into an early termination agreement with the FDIC with respect to all of its outstanding loss share agreements. The loss share agreements were entered into with the FDIC in 2009, 2010, 2011 and 2012 either by the Bank or by First Federal Bank, acquired by the Bank in July of 2013. As a result of the termination agreement, all assets previously classified as covered became uncovered effective June 23, 2016, and as a result the Bank will now recognize the full amount of future charge-offs, recoveries, gains, losses, and expenses related to these previously covered assets, as the FDIC will no longer share in these amounts.

An aggregated analysis of the changes in allowance for loan losses is as follows:


	Non-acquired		Acquired Non-Credit		Acquired Credit
(Dollars in thousands)	Loans		Impaired Loans		Impaired Loans		Total
Three Months Ended September 30, 2016:
Balance at beginning of period	$	36,939	$	—	$	3,752	$	40,691
Loans charged-off		(1,108)		(280)		—		(1,388)
Recoveries of loans previously charged off (1)		713		120		—		833
Net charge-offs		(395)		(160)		—		(555)
Provision		775		160		(23)		912
Benefit attributable to FDIC loss share agreements		—		—		—		—
Total provision for loan losses charged to operations		775		160		(23)		912
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—
Reduction due to loan removals		—		—		(326)		(326)
Balance at end of period	$	37,319	$	—	$	3,403	$	40,722
Three Months Ended September 30, 2015:
Balance at beginning of period	$	34,782	$	—	$	4,688	$	39,470
Loans charged-off		(1,530)		(141)		—		(1,671)
Recoveries of loans previously charged off (1)		655		273		—		928
Net charge-offs		(875)		132		—		(743)
Provision		1,209		(132)		(2)		1,075
Benefit attributable to FDIC loss share agreements		—		—		—		—
Total provision for loan losses charged to operations		1,209		(132)		(2)		1,075
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—
Reduction due to loan removals		—		—		(212)		(212)
Balance at end of period	$	35,116	$	—	$	4,474	$	39,590


	Non-acquired		Acquired Non-Credit		Acquired Credit
(Dollars in thousands)	Loans		Impaired Loans		Impaired Loans		Total
Nine Months Ended September 30, 2016:
Balance at beginning of period	$	34,090	$	—	$	3,706	$	37,796
Loans charged-off		(4,384)		(810)		—		(5,194)
Recoveries of loans previously charged off (1)		2,358		262		—		2,620
Net charge-offs		(2,026)		(548)		—		(2,574)
Provision		5,255		548		372		6,175
Benefit attributable to FDIC loss share agreements		—		—		23		23
Total provision for loan losses charged to operations		5,255		548		395		6,198
Provision for loan losses recorded through the FDIC loss share receivable		—		—		(23)		(23)
Reduction due to loan removals		—		—		(675)		(675)
Balance at end of period	$	37,319	$	—	$	3,403	$	40,722
Nine Months Ended September 30, 2015:
Balance at beginning of period	$	34,539	$	—	$	7,365	$	41,904
Loans charged-off		(4,206)		(2,510)		—		(6,716)
Recoveries of loans previously charged off (1)		2,253		323		—		2,576
Net charge-offs		(1,953)		(2,187)		—		(4,140)
Provision		2,530		2,187		300		5,017
Benefit attributable to FDIC loss share agreements		—		—		21		21
Total provision for loan losses charged to operations		2,530		2,187		321		5,038
Provision for loan losses recorded through the FDIC loss share receivable		—		—		(21)		(21)
Reduction due to loan removals		—		—		(3,191)		(3,191)
Balance at end of period	$	35,116	$	—	$	4,474	$	39,590

(1)

– Recoveries related to acquired credit impaired loans are recorded through other noninterest income on the consolidated statement of income and do not run through the allowance for loan losses.

The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for non-acquired loans:


	Construction		Commercial		Commercial		Consumer						Other Income
	& Land		Non-owner		Owner		Owner		Home		Commercial		Producing				Other
(Dollars in thousands)	Development		Occupied		Occupied		Occupied		Equity		& Industrial		Property		Consumer		Loans		Total
Three Months Ended September 30, 2016
Allowance for loan losses:
Balance, June 30, 2016	$	4,665	$	4,656	$	8,003	$	7,530	$	3,148	$	4,269	$	1,812	$	2,014	$	842	$	36,939
Charge-offs		—		—		(16)		(45)		—		(31)		—		(1,016)		—		(1,108)
Recoveries		241		28		25		27		64		104		8		216		—		713
Provision (benefit)		(795)		(93)		516		338		69		368		(201)		1,094		(521)		775
Balance, September 30, 2016	$	4,111	$	4,591	$	8,528	$	7,850	$	3,281	$	4,710	$	1,619	$	2,308	$	321	$	37,319
Loans individually evaluated for impairment	$	359	$	181	$	65	$	58	$	38	$	385	$	289	$	4	$	—	$	1,379
Loans collectively evaluated for impairment	$	3,752	$	4,410	$	8,463	$	7,792	$	3,243	$	4,325	$	1,330	$	2,304	$	321	$	35,940
Loans:
Loans individually evaluated for impairment	$	3,431	$	764	$	6,352	$	3,127	$	1,599	$	1,453	$	4,319	$	142	$	—	$	21,187
Loans collectively evaluated for impairment		558,905		629,673		1,147,128		1,180,314		362,226		616,072		175,276		305,545		11,787		4,986,926
Total non-acquired loans	$	562,336	$	630,437	$	1,153,480	$	1,183,441	$	363,825	$	617,525	$	179,595	$	305,687	$	11,787	$	5,008,113
Three Months Ended September 30, 2015
Allowance for loan losses:
Balance , June 30, 2015	$	4,998	$	3,038	$	8,684	$	7,125	$	2,868	$	3,983	$	2,019	$	1,608	$	459	$	34,782
Charge-offs		(85)		(5)		(23)		(230)		(74)		(102)		—		(1,011)		—		(1,530)
Recoveries		122		23		7		89		91		79		11		233		—		655
Provision (benefit)		(826)		268		376		471		26		16		(3)		886		(5)		1,209
Balance, September 30, 2015	$	4,209	$	3,324	$	9,044	$	7,455	$	2,911	$	3,976	$	2,027	$	1,716	$	454	$	35,116
Loans individually evaluated for impairment	$	585	$	26	$	248	$	121	$	3	$	21	$	430	$	3	$	19	$	1,456
Loans collectively evaluated for impairment	$	3,624	$	3,298	$	8,796	$	7,334	$	2,908	$	3,955	$	1,597	$	1,713	$	435	$	33,660
Loans:
Loans individually evaluated for impairment	$	5,727	$	2,569	$	11,445	$	7,818	$	293	$	1,045	$	4,788	$	101	$	693	$	34,479
Loans collectively evaluated for impairment		366,350		403,920		1,000,983		980,045		308,270		461,543		165,209		223,109		50,808		3,960,237
Total non-acquired loans	$	372,077	$	406,489	$	1,012,428	$	987,863	$	308,563	$	462,588	$	169,997	$	223,210	$	51,501	$	3,994,716


	Construction		Commercial		Commercial		Consumer						Other Income
	& Land		Non-owner		Owner		Owner		Home		Commercial		Producing				Other
(Dollars in thousands)	Development		Occupied		Occupied		Occupied		Equity		& Industrial		Property		Consumer		Loans		Total
Nine Months Ended September 30, 2016
Allowance for loan losses:
Balance, December 31, 2015	$	4,116	$	3,568	$	8,341	$	7,212	$	2,929	$	3,974	$	1,963	$	1,694	$	293	$	34,090
Charge-offs		(159)		—		(117)		(174)		(767)		(358)		(7)		(2,802)		—		(4,384)
Recoveries		848		59		46		125		239		207		47		787		—		2,358
Provision (benefit)		(694)		964		258		687		880		887		(384)		2,629		28		5,255
Balance, September 30, 2016	$	4,111	$	4,591	$	8,528	$	7,850	$	3,281	$	4,710	$	1,619	$	2,308	$	321	$	37,319
Nine Months Ended September 30, 2015
Allowance for loan losses:
Balance, December 31, 2014	$	5,666	$	3,154	$	8,415	$	6,866	$	2,829	$	3,561	$	2,232	$	1,367	$	449	$	34,539
Charge-offs		(185)		(88)		(575)		(274)		(282)		(357)		(13)		(2,432)		—		(4,206)
Recoveries		256		52		23		134		201		745		77		765		—		2,253
Provision (benefit)		(1,528)		206		1,181		729		163		27		(269)		2,016		5		2,530
Balance, September 30, 2015	$	4,209	$	3,324	$	9,044	$	7,455	$	2,911	$	3,976	$	2,027	$	1,716	$	454	$	35,116

The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for acquired non-credit impaired loans:


	Construction		Commercial		Commercial		Consumer						Other Income
	& Land		Non-owner		Owner		Owner		Home		Commercial		Producing
(Dollars in thousands)	Development		Occupied		Occupied		Occupied		Equity		& Industrial		Property		Consumer		Total
Three Months Ended September 30, 2016
Allowance for loan losses:
Balance at beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		(3)		—		(105)		(23)		—		(149)		(280)
Recoveries		1		—		—		3		89		1		—		26		120
Provision (benefit)		(1)		—		3		(3)		16		22		—		123		160
Balance, September 30, 2016	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Loans:
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		10,683		35,775		29,444		435,132		168,758		14,201		43,152		148,512		885,657
Total acquired non-credit impaired loans	$	10,683	$	35,775	$	29,444	$	435,132	$	168,758	$	14,201	$	43,152	$	148,512	$	885,657
Three Months Ended September 30, 2015
Allowance for loan losses:
Balance at beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		—		8		(79)		(7)		—		(63)		(141)
Recoveries		1		—		—		95		161		2		3		11		273
Provision (benefit)		(1)		—		—		(103)		(82)		5		(3)		52		(132)
Balance, September 30, 2015	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Loans:
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		16,482		42,172		42,524		542,278		203,025		27,459		56,092		177,408		1,107,440
Total acquired non-credit impaired loans	$	16,482	$	42,172	$	42,524	$	542,278	$	203,025	$	27,459	$	56,092	$	177,408	$	1,107,440


	Construction		Commercial		Commercial		Consumer						Other Income
	& Land		Non-owner		Owner		Owner		Home		Commercial		Producing
(Dollars in thousands)	Development		Occupied		Occupied		Occupied		Equity		& Industrial		Property		Consumer		Total
Nine Months Ended September 30, 2016
Allowance for loan losses:
Balance, December 31, 2015	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		(3)		—		(292)		(30)		—		(485)		(810)
Recoveries		3		—		—		9		197		3		1		49		262
Provision (benefit)		(3)		—		3		(9)		95		27		(1)		436		548
Balance, September 30, 2016	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Nine Months Ended September 30, 2015
Allowance for loan losses:
Balance, December 31, 2014	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		—		(360)		(1,459)		(120)		(3)		(568)		(2,510)
Recoveries		3		—		—		100		178		17		4		21		323
Provision (benefit)		(3)		—		—		260		1,281		103		(1)		547		2,187
Balance, September 30, 2015	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

The following tables present a disaggregated analysis of activity in the allowance for loan losses and loan balances for acquired credit impaired loans:


	Commercial				Commercial
	Loans Greater				Real Estate-
	Than or Equal		Commercial		Construction and		Residential				Commercial
(Dollars in thousands)	to $1 Million-CBT		Real Estate		Development		Real Estate		Consumer		and Industrial		Single Pay		Total
Three Months Ended September 30, 2016
Allowance for loan losses:
Balance, June 30, 2016	$	—	$	35	$	151	$	2,592	$	778	$	196	$	—	$	3,752
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		—		—		—		2		(23)		(2)		—		(23)
Benefit attributable to FDIC loss share agreements		—		—		—		—		—		—		—		—
Total provision (benefit) for loan losses charged to operations		—		—		—		2		(23)		(2)		—		(23)
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—		—		—		—		—
Reduction due to loan removals		—		5		(6)		(102)		(211)		(12)		—		(326)
Balance, September 30, 2016	$	—	$	40	$	145	$	2,492	$	544	$	182	$	—	$	3,403
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment	$	—	$	40	$	145	$	2,492	$	544	$	182	$	—	$	3,403
Loans:*
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		10,958		220,489		47,081		268,968		61,866		26,658		—		636,020
Total acquired credit impaired loans	$	10,958	$	220,489	$	47,081	$	268,968	$	61,866	$	26,658	$	—	$	636,020

Three Months Ended September 30, 2015
Allowance for loan losses:
Balance , June 30, 2015	$	(66)	$	532	$	344	$	3,183	$	449	$	197	$	49	$	4,688
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		7		—		433		(160)		(249)		15		(48)		(2)
Benefit attributable to FDIC loss share agreements		—		—		—		—		—		—		—		—
Total provision (benefit) for loan losses charged to operations		7		—		433		(160)		(249)		15		(48)		(2)
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—		—		—		—		—
Reduction due to loan removals		59		(7)		(49)		(160)		(44)		(12)		1		(212)
Balance, September 30, 2015	$	—	$	525	$	728	$	2,863	$	156	$	200	$	2	$	4,474
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment	$	—	$	525	$	728	$	2,863	$	156	$	200	$	2	$	4,474
Loans:*
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		12,963		266,465		55,168		330,754		73,632		34,074		24		773,080
Total acquired credit impaired loans	$	12,963	$	266,465	$	55,168	$	330,754	$	73,632	$	34,074	$	24	$	773,080


	Commercial				Commercial
	Loans Greater				Real Estate-
	Than or Equal		Commercial		Construction and		Residential				Commercial
(Dollars in thousands)	to $1 Million-CBT		Real Estate		Development		Real Estate		Consumer		and Industrial		Single Pay		Total
Nine Months Ended September 30, 2016
Allowance for loan losses:
Balance, December 31, 2015	$	—	$	56	$	177	$	2,986	$	313	$	174	$	—	$	3,706
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		—		1		—		(178)		511		38		—		372
Benefit attributable to FDIC loss share agreements		—		—		—		23		—		—		—		23
Total provision (benefit) for loan losses charged to operations		—		1		—		(155)		511		38		—		395
Provision (benefit) for loan losses recorded through the FDIC loss share receivable		—		—		—		(23)		—		—		—		(23)
Reduction due to loan removals		—		(16)		(32)		(316)		(281)		(30)		—		(675)
Balance, September 30, 2016	$	—	$	41	$	145	$	2,492	$	543	$	182	$	—	$	3,403
Nine Months Ended September 30, 2015
Allowance for loan losses:
Balance, December 31, 2014	$	135	$	1,444	$	336	$	4,387	$	275	$	718	$	70	$	7,365
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		7		3		443		(138)		141		(107)		(49)		300
Benefit attributable to FDIC loss share agreements		—		—		—		—		(107)		127		1		21
Total provision (benefit) for loan losses charged to operations		7		3		443		(138)		34		20		(48)		321
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—		107		(127)		(1)		(21)
Reduction due to loan removals		(142)		(922)		(51)		(1,386)		(260)		(411)		(19)		(3,191)
Balance, September 30, 2015	$	—	$	525	$	728	$	2,863	$	156	$	200	$	2	$	4,474

*— The carrying value of acquired credit impaired loans includes a non accretable difference which is primarily associated with the assessment of credit quality of acquired loans.

As part of the ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators, including trends related to (i) the level of classified loans, (ii) net charge-offs, (iii) non-performing loans (see details below), and (iv) the general economic conditions of the markets that we serve.

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. A description of the general characteristics of the risk grades is as follows:

Pass—These loans range from minimal credit risk to average, however, still acceptable credit risk.

Special mention—A special mention loan has 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 the institution’s credit position at some future date.

Substandard—A substandard loan is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness, or weaknesses, that may jeopardize the liquidation of the debt. A substandard loan is characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful—A doubtful loan has all of the weaknesses inherent in one classified as substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of the currently existing facts, conditions and values, highly questionable and improbable.

The following table presents the credit risk profile by risk grade of commercial loans for non-acquired loans:


	Construction & Development						Commercial Non-owner Occupied						Commercial Owner Occupied
(Dollars in	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
thousands)	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	548,984	$	382,167	$	349,808	$	615,521	$	471,466	$	388,303	$	1,118,421	$	994,442	$	970,090
Special mention		8,492		13,633		15,629		11,499		13,912		14,888		26,429		29,478		28,799
Substandard		4,860		6,179		6,640		3,417		2,399		3,298		8,630		9,478		13,539
Doubtful		—		—		—		—		—		—		—		—		—
	$	562,336	$	401,979	$	372,077	$	630,437	$	487,777	$	406,489	$	1,153,480	$	1,033,398	$	1,012,428


	Commercial & Industrial						Other Income Producing Property						Commercial Total
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	604,058	$	497,572	$	456,912	$	165,451	$	163,975	$	157,233	$	3,052,435	$	2,509,622	$	2,322,346
Special mention		11,246		4,472		4,321		12,099		8,047		8,808		69,765		69,542		72,445
Substandard		2,221		1,764		1,355		2,045		3,826		3,956		21,173		23,646		28,788
Doubtful		—		—		—		—		—		—		—		—		—
	$	617,525	$	503,808	$	462,588	$	179,595	$	175,848	$	169,997	$	3,143,373	$	2,602,810	$	2,423,579

The following table presents the credit risk profile by risk grade of consumer loans for non-acquired loans:


	Consumer Owner Occupied						Home Equity						Consumer
(Dollars in	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
thousands)	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	1,155,481	$	984,780	$	953,523	$	349,382	$	304,744	$	294,712	$	304,117	$	231,294	$	221,515
Special mention		14,370		17,777		17,198		8,493		8,171		7,987		611		771		897
Substandard		13,590		16,427		17,142		5,950		6,318		5,842		959		1,039		798
Doubtful		—		—		—		—		22		22		—		—		—
	$	1,183,441	$	1,018,984	$	987,863	$	363,825	$	319,255	$	308,563	$	305,687	$	233,104	$	223,210


	Other						Consumer Total
	September 30, 2016		December 31, 2015		September 30, 2015		September 30, 2016		December 31, 2015		September 30, 2015
Pass	$	11,787	$	46,573	$	51,501	$	1,820,767	$	1,567,391	$	1,521,251
Special mention		—		—		—		23,474		26,719		26,082
Substandard		—		—		—		20,499		23,784		23,782
Doubtful		—		—		—		—		22		22
	$	11,787	$	46,573	$	51,501	$	1,864,740	$	1,617,916	$	1,571,137

The following table presents the credit risk profile by risk grade of total non-acquired loans:


	Total Non-acquired Loans
	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
Pass	$	4,873,202	$	4,077,013	$	3,843,597
Special mention		93,239		96,261		98,527
Substandard		41,672		47,430		52,570
Doubtful		—		22		22
	$	5,008,113	$	4,220,726	$	3,994,716

The following table presents the credit risk profile by risk grade of commercial loans for acquired non-credit impaired loans:


							Commercial Non-owner
	Construction & Development						Occupied						Commercial Owner Occupied
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	9,562	$	12,935	$	15,196	$	29,509	$	33,485	$	35,562	$	28,926	$	38,623	$	42,189
Special mention		278		109		113		6,173		637		399		—		377		291
Substandard		843		805		1,173		93		5,981		6,211		518		220		44
Doubtful		—		—		—		—		—		—		—		—		—
	$	10,683	$	13,849	$	16,482	$	35,775	$	40,103	$	42,172	$	29,444	$	39,220	$	42,524


							Other Income Producing
	Commercial & Industrial						Property						Commercial Total
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	14,016	$	24,621	$	26,473	$	42,159	$	49,783	$	54,684	$	124,172	$	159,447	$	174,104
Special mention		122		166		213		276		592		435		6,849		1,881		1,451
Substandard		63		688		773		717		794		973		2,234		8,488		9,174
Doubtful		—		—		—		—		—		—		—		—		—
	$	14,201	$	25,475	$	27,459	$	43,152	$	51,169	$	56,092	$	133,255	$	169,816	$	184,729

The following table presents the credit risk profile by risk grade of consumer loans for acquired non-credit impaired loans:


	Consumer Owner Occupied						Home Equity						Consumer
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	431,712	$	514,817	$	537,884	$	158,672	$	180,472	$	190,648	$	145,594	$	167,399	$	174,465
Special mention		759		557		2,009		5,340		4,202		5,198		1,118		729		630
Substandard		2,661		2,733		2,385		4,746		6,294		7,179		1,800		2,519		2,313
Doubtful		—		—		—		—		—		—		—		—		—
	$	435,132	$	518,107	$	542,278	$	168,758	$	190,968	$	203,025	$	148,512	$	170,647	$	177,408


	Consumer Total
	September 30,		December 31,		September 30,
	2016		2015		2015
Pass	$	735,978	$	862,688	$	902,997
Special mention		7,217		5,488		7,837
Substandard		9,207		11,546		11,877
Doubtful		—		—		—
	$	752,402	$	879,722	$	922,711

The following table presents the credit risk profile by risk grade of total acquired non-credit impaired loans:


	Total Acquired
	Non-credit Impaired Loans
	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
Pass	$	860,150	$	1,022,135	$	1,077,101
Special mention		14,066		7,369		9,288
Substandard		11,441		20,034		21,051
Doubtful		—		—		—
	$	885,657	$	1,049,538	$	1,107,440

The following table presents the credit risk profile by risk grade of acquired credit impaired loans (identified as credit-impaired at the time of acquisition), net of the related discount (this table should be read in conjunction with the allowance for acquired credit impaired loan losses table found on page 22):


	Commercial Loans Greater												Commercial Real Estate—
	Than or Equal to												Construction and
	$1 million-CBT						Commercial Real Estate						Development
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	9,616	$	11,238	$	11,027	$	164,737	$	177,656	$	179,481	$	20,889	$	26,308	$	25,784
Special mention		1,000		1,018		1,045		32,081		37,607		37,674		14,092		14,532		12,875
Substandard		342		372		891		23,671		40,167		49,310		12,100		13,432		16,509
Doubtful		—		—		—		—		—		—		—		—		—
	$	10,958	$	12,628	$	12,963	$	220,489	$	255,430	$	266,465	$	47,081	$	54,272	$	55,168


	Residential Real Estate						Consumer						Commercial & Industrial
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2016		2015		2015		2016		2015		2015		2016		2015		2015
Pass	$	143,946	$	166,309	$	166,106	$	9,072	$	10,703	$	11,156	$	18,715	$	22,358	$	23,003
Special mention		54,597		63,341		69,998		20,635		23,331		24,248		4,476		2,549		2,092
Substandard		70,425		83,669		94,650		32,159		36,700		38,228		3,467		6,286		8,979
Doubtful		—		—		—		—		—		—		—		—		—
	$	268,968	$	313,319	$	330,754	$	61,866	$	70,734	$	73,632	$	26,658	$	31,193	$	34,074


							Total Acquired
	Single Pay						Credit Impaired Loans
	September 30,		December 31,		September 30,		September 30,		December 31,		September 30,
	2016		2015		2015		2016		2015		2015
Pass	$	—	$	—	$	10	$	366,975	$	414,572	$	416,567
Special mention		—		—		—		126,881		142,378		147,932
Substandard		—		—		14		142,164		180,626		208,581
Doubtful		—		—		—		—		—		—
	$	—	$	—	$	24	$	636,020	$	737,576	$	773,080

The risk grading of acquired credit impaired loans is determined utilizing a loan’s contractual balance, while the amount recorded in the financial statements and reflected above is the carrying value. In an FDIC-assisted acquisition, covered acquired loans are initially recorded at their fair value, including a credit discount due to the high concentration of substandard and doubtful loans. Note that all covered acquired loans are now uncovered due to the early termination agreement with the FDIC on June 23, 2016.

The following table presents an aging analysis of past due loans, segregated by class for non-acquired loans:


	30 - 59 Days		60 - 89 Days		90+ Days		Total				Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans
September 30, 2016
Commercial real estate:
Construction and land development	$	548	$	249	$	1,079	$	1,876	$	560,460	$	562,336
Commercial non-owner occupied		655		768		207		1,630		628,807		630,437
Commercial owner occupied		1,795		71		1,267		3,133		1,150,347		1,153,480
Consumer real estate:
Consumer owner occupied		1,549		894		1,682		4,125		1,179,316		1,183,441
Home equity loans		1,000		186		832		2,018		361,807		363,825
Commercial and industrial		229		739		674		1,642		615,883		617,525
Other income producing property		318		187		413		918		178,677		179,595
Consumer		286		430		302		1,018		304,669		305,687
Other loans		—		—		—		—		11,787		11,787
	$	6,380	$	3,524	$	6,456	$	16,360	$	4,991,753	$	5,008,113
December 31, 2015
Commercial real estate:
Construction and land development	$	323	$	136	$	915	$	1,374	$	400,605	$	401,979
Commercial non-owner occupied		867		—		184		1,051		486,726		487,777
Commercial owner occupied		1,269		608		1,530		3,407		1,029,991		1,033,398
Consumer real estate:
Consumer owner occupied		1,503		308		3,149		4,960		1,014,024		1,018,984
Home equity loans		899		1,046		598		2,543		316,712		319,255
Commercial and industrial		173		166		234		573		503,235		503,808
Other income producing property		241		207		275		723		175,125		175,848
Consumer		351		136		395		882		232,222		233,104
Other loans		48		43		64		155		46,418		46,573
	$	5,674	$	2,650	$	7,344	$	15,668	$	4,205,058	$	4,220,726
September 30, 2015
Commercial real estate:
Construction and land development	$	752	$	209	$	1,113	$	2,074	$	370,003	$	372,077
Commercial non-owner occupied		1,218		—		1,597		2,815		403,674		406,489
Commercial owner occupied		2,418		108		5,350		7,876		1,004,552		1,012,428
Consumer real estate:
Consumer owner occupied		1,886		1,180		3,044		6,110		981,753		987,863
Home equity loans		661		275		584		1,520		307,043		308,563
Commercial and industrial		404		90		160		654		461,934		462,588
Other income producing property		246		194		450		890		169,107		169,997
Consumer		656		114		314		1,084		222,126		223,210
Other loans		—		—		—		—		51,501		51,501
	$	8,241	$	2,170	$	12,612	$	23,023	$	3,971,693	$	3,994,716

The following table presents an aging analysis of past due loans, segregated by class for acquired non-credit impaired loans:


	30 - 59 Days		60 - 89 Days		90+ Days		Total				Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans
September 30, 2016
Commercial real estate:
Construction and land development	$	5	$	—	$	160	$	165	$	10,518	$	10,683
Commercial non-owner occupied		—		28		—		28		35,747		35,775
Commercial owner occupied		326		110		302		738		28,706		29,444
Consumer real estate:
Consumer owner occupied		140		417		221		778		434,354		435,132
Home equity loans		719		207		921		1,847		166,911		168,758
Commercial and industrial		38		—		—		38		14,163		14,201
Other income producing property		26		—		—		26		43,126		43,152
Consumer		409		97		549		1,055		147,457		148,512
	$	1,663	$	859	$	2,153	$	4,675	$	880,982	$	885,657
December 31, 2015
Commercial real estate:
Construction and land development	$	—	$	21	$	48	$	69	$	13,780	$	13,849
Commercial non-owner occupied		—		—		—		—		40,103		40,103
Commercial owner occupied		120		176		44		340		38,880		39,220
Consumer real estate:
Consumer owner occupied		694		4		688		1,386		516,721		518,107
Home equity loans		897		412		482		1,791		189,177		190,968
Commercial and industrial		1		1		5		7		25,468		25,475
Other income producing property		—		—		7		7		51,162		51,169
Consumer		257		270		797		1,324		169,323		170,647
	$	1,969	$	884	$	2,071	$	4,924	$	1,044,614	$	1,049,538
September 30, 2015
Commercial real estate:
Construction and land development	$	—	$	—	$	39	$	39	$	16,443	$	16,482
Commercial non-owner occupied		32		—		—		32		42,140		42,172
Commercial owner occupied		245		4		39		288		42,236		42,524
Consumer real estate:
Consumer owner occupied		116		150		516		782		541,496		542,278
Home equity loans		658		92		537		1,287		201,738		203,025
Commercial and industrial		—		2		238		240		27,219		27,459
Other income producing property		97		7		5		109		55,983		56,092
Consumer		598		244		722		1,564		175,844		177,408
	$	1,746	$	499	$	2,096	$	4,341	$	1,103,099	$	1,107,440

The following table presents an aging analysis of past due loans, segregated by class for acquired credit impaired loans:


	30 - 59 Days		60 - 89 Days		90+ Days		Total				Total
(Dollars in thousands)	Past Due		Past Due		Past Due		Past Due		Current		Loans
September 30, 2016
Commercial loans greater than or equal to $1 million-CBT	$	—	$	—	$	—	$	—	$	10,958	$	10,958
Commercial real estate		896		238		2,813		3,947		216,542		220,489
Commercial real estate—construction and development		266		1,971		1,137		3,374		43,707		47,081
Residential real estate		4,260		2,015		5,717		11,992		256,976		268,968
Consumer		1,124		332		1,233		2,689		59,177		61,866
Commercial and industrial		10		30		637		677		25,981		26,658
Single pay		—		—		—		—		—		—
	$	6,556	$	4,586	$	11,537	$	22,679	$	613,341	$	636,020
December 31, 2015
Commercial loans greater than or equal to $1 million-CBT	$	—	$	—	$	—	$	—	$	12,628	$	12,628
Commercial real estate		1,118		426		5,624		7,168		248,262		255,430
Commercial real estate—construction and development		784		367		2,162		3,313		50,959		54,272
Residential real estate		4,705		1,155		8,095		13,955		299,364		313,319
Consumer		1,756		380		2,085		4,221		66,513		70,734
Commercial and industrial		272		137		846		1,255		29,938		31,193
Single pay		—		—		—		—		—		—
	$	8,635	$	2,465	$	18,812	$	29,912	$	707,664	$	737,576
September 30, 2015
Commercial loans greater than or equal to $1 million-CBT	$	—	$	—	$	—	$	—	$	12,963	$	12,963
Commercial real estate		1,902		1,145		5,190		8,237		258,228		266,465
Commercial real estate—construction and development		960		983		2,575		4,518		50,650		55,168
Residential real estate		3,735		1,913		8,805		14,453		316,301		330,754
Consumer		1,660		630		2,305		4,595		69,037		73,632
Commercial and industrial		458		153		2,776		3,387		30,687		34,074
Single pay		—		—		—		—		24		24
	$	8,715	$	4,824	$	21,651	$	35,190	$	737,890	$	773,080

The following is a summary of information pertaining to impaired non-acquired loans:


	Unpaid		Recorded		Gross
	Contractual		Investment		Recorded		Total
	Principal		With No		Investment		Recorded		Related
(Dollars in thousands)	Balance		Allowance		With Allowance		Investment		Allowance
September 30, 2016
Commercial real estate:
Construction and land development	$	7,744	$	1,331	$	2,100	$	3,431	$	359
Commercial non-owner occupied		2,372		228		536		764		181
Commercial owner occupied		10,204		4,301		2,051		6,352		65
Consumer real estate:
Consumer owner occupied		4,390		1,284		1,843		3,127		58
Home equity loans		2,054		251		1,348		1,599		38
Commercial and industrial		2,738		259		1,194		1,453		385
Other income producing property		5,167		101		4,218		4,319		289
Consumer		342		—		142		142		4
Other loans		—		—		—		—		—
Total	$	35,011	$	7,755	$	13,432	$	21,187	$	1,379
December 31, 2015
Commercial real estate:
Construction and land development	$	9,931	$	1,004	$	5,276	$	6,280	$	615
Commercial non-owner occupied		2,909		233		1,219		1,452		34
Commercial owner occupied		11,516		4,134		3,591		7,725		101
Consumer real estate:
Consumer owner occupied		9,001		3,505		4,044		7,549		138
Home equity loans		483		186		123		309		3
Commercial and industrial		2,641		273		1,214		1,487		279
Other income producing property		5,763		112		4,779		4,891		422
Consumer		155		—		102		102		3
Other loans		611		—		423		423		12
Total	$	43,010	$	9,447	$	20,771	$	30,218	$	1,607
September 30, 2015
Commercial real estate:
Construction and land development	$	8,321	$	1,128	$	4,599	$	5,727	$	585
Commercial non-owner occupied		3,935		1,644		925		2,569		26
Commercial owner occupied		16,195		7,325		4,120		11,445		248
Consumer real estate:
Consumer owner occupied		8,969		3,928		3,890		7,818		121
Home equity loans		390		185		108		293		3
Commercial and industrial		1,939		295		750		1,045		21
Other income producing property		5,601		117		4,671		4,788		430
Consumer		151		—		101		101		3
Other		887		—		693		693		19
Total	$	46,388	$	14,622	$	19,857	$	34,479	$	1,456

Acquired credit impaired loans are accounted for in pools as shown on page 17 rather than being individually evaluated for impairment; therefore, the table above excludes acquired credit impaired loans.

The following summarizes the average investment in impaired non-acquired loans, and interest income recognized on these loans:


	Three Months Ended September 30,
	2016				2015
	Average				Average
	Investment in		Interest Income		Investment in		Interest Income
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate:
Construction and land development	$	3,762	$	31	$	5,418	$	116
Commercial non-owner occupied		992		—		2,590		13
Commercial owner occupied		6,662		150		11,208		89
Consumer real estate:
Consumer owner occupied		3,547		31		7,070		80
Home equity loans		1,888		13		263		4
Commercial and industrial		1,110		16		1,028		29
Other income producing property		4,659		71		4,788		95
Consumer		135		—		85		1
Other loans		—		—		347		4
Total Impaired Loans	$	22,755	$	312	$	32,797	$	431


	Nine Months Ended September 30,
	2016				2015
	Average				Average
	Investment in		Interest Income		Investment in		Interest Income
(Dollars in thousands)	Impaired Loans		Recognized		Impaired Loans		Recognized
Commercial real estate:
Construction and land development	$	4,856	$	88	$	5,290	$	170
Commercial non-owner occupied		1,108		23		3,090		38
Commercial owner occupied		7,038		233		10,303		255
Consumer real estate:
Consumer owner occupied		5,338		78		5,392		133
Home equity loans		954		43		162		7
Commercial and industrial		1,470		28		976		47
Other income producing property		4,605		157		5,143		174
Consumer		122		3		80		2
Other loans		211		—		347		4
Total Impaired Loans	$	25,702	$	653	$	30,783	$	830

The following is a summary of information pertaining to non-acquired nonaccrual loans by class, including restructured loans:


	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
Commercial non-owner occupied real estate:
Construction and land development	$	1,156	$	1,090	$	1,291
Commercial non-owner occupied		601		184		1,117
Total commercial non-owner occupied real estate		1,757		1,274		2,408
Consumer real estate:
Consumer owner occupied		5,048		7,766		8,043
Home equity loans		1,564		1,769		1,533
Total consumer real estate		6,612		9,535		9,576
Commercial owner occupied real estate		2,049		3,056		4,353
Commercial and industrial		587		515		466
Other income producing property		584		746		740
Consumer		796		659		556
Restructured loans		2,499		2,662		5,616
Total loans on nonaccrual status	$	14,884	$	18,447	$	23,715

The following is a summary of information pertaining to acquired non-credit impaired nonaccrual loans by class, including restructured loans:


	September 30,		December 31,		September 30,
(Dollars in thousands)	2016		2015		2015
Commercial non-owner occupied real estate:
Construction and land development	$	235	$	37	$	39
Commercial non-owner occupied		—		—		95
Total commercial non-owner occupied real estate		235		37		134
Consumer real estate:
Consumer owner occupied		1,112		976		1,048
Home equity loans		1,588		1,103		1,115
Total consumer real estate		2,700		2,079		2,163
Commercial owner occupied real estate		302		44		40
Commercial and industrial		1		1		243
Other income producing property		149		168		382
Consumer		1,246		1,435		1,168
Total loans on nonaccrual status	$	4,633	$	3,764	$	4,130

In the course of resolving delinquent loans, the Bank may choose to restructure the contractual terms of certain loans. Any loans that are modified are reviewed by the Bank to determine if a troubled debt restructuring (“TDR” or “restructured loan”) has occurred. The Bank designates loan modifications as TDRs when it grants a concession to a borrower that it would not otherwise consider due to the borrower experience financial difficulty (FASB ASC Topic 310-40). The concessions granted on TDRs generally include terms to reduce the interest rate, extend the term of the debt obligation, or modify the payment structure on the debt obligation.

Loans on nonaccrual status at the date of modification are initially classified as nonaccrual TDRs. Loans on accruing status at the date of concession are initially classified as accruing TDRs if the note is reasonably assured of repayment and performance is expected in accordance with its modified terms. Such loans may be designated as nonaccrual loans subsequent to the concession date if reasonable doubt exists as to the collection of interest or principal under the restructuring agreement. Nonaccrual TDRs are returned to accruing status when there is economic substance to the restructuring, there is documented credit evaluation of the borrower’s financial condition, the remaining balance is reasonably assured of repayment in accordance with its modified terms, and the borrower has demonstrated sustained repayment performance in accordance with the modified terms for a reasonable period of time (generally a minimum of six months). For the three and nine months ended September 30, 2016 and 2015, the Company’s TDR’s were not material.