Note 6 — Loans and Allowance for Loan Losses

The following is a summary of non-acquired loans:


	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
Non-acquired loans:
Commercial non-owner occupied real estate:
Construction and land development	$	712,242	$	580,464	$	533,219
Commercial non-owner occupied		952,911		714,715		586,828
Total commercial non-owner occupied real estate		1,665,153		1,295,179		1,120,047
Consumer real estate:
Consumer owner occupied		1,382,922		1,197,621		1,109,667
Home equity loans		411,532		383,218		345,957
Total consumer real estate		1,794,454		1,580,839		1,455,624
Commercial owner occupied real estate		1,204,953		1,177,745		1,083,051
Commercial and industrial		762,583		671,398		611,901
Other income producing property		189,326		178,238		181,703
Consumer		357,761		324,238		272,957
Other loans		18,163		13,404		91,592
Total non-acquired loans		5,992,393		5,241,041		4,816,875
Less allowance for loan losses		(40,149)		(36,960)		(36,939)
Non-acquired loans, net	$	5,952,244	$	5,204,081	$	4,779,936

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


	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
FASB ASC Topic 310-20 acquired loans:
Commercial non-owner occupied real estate:
Construction and land development	$	112,855	$	10,090	$	12,516
Commercial non-owner occupied		209,560		34,628		36,904
Total commercial non-owner occupied real estate		322,415		44,718		49,420
Consumer real estate:
Consumer owner occupied		520,106		408,270		466,479
Home equity loans		177,129		160,879		177,946
Total consumer real estate		697,235		569,149		644,425
Commercial owner occupied real estate		221,566		27,195		32,267
Commercial and industrial		117,884		13,641		15,598
Other income producing property		83,403		39,342		44,873
Consumer		143,478		142,654		155,303
Total FASB ASC Topic 310-20 acquired loans	$	1,585,981	$	836,699	$	941,886

The unamortized discount related to the acquired non-credit impaired loans totaled $22.9 million, $11.6 million, and $14.0 million at June 30, 2017, December 31, 2016, and June 30, 2016, 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:


	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
FASB ASC Topic 310-30 acquired loans:
Commercial loans greater than or equal to $1 million-Community Bank & Trust ("CBT")	$	8,524	$	8,617	$	11,260
Commercial real estate		206,271		210,204		225,460
Commercial real estate—construction and development		52,977		44,373		48,274
Residential real estate		256,602		258,100		285,518
Consumer		56,362		59,300		64,114
Commercial and industrial		25,486		25,347		27,961
Total FASB ASC Topic 310-30 acquired loans		606,222		605,941		662,587
Less allowance for loan losses		(3,741)		(3,395)		(3,752)
FASB ASC Topic 310-30 acquired loans, net	$	602,481	$	602,546	$	658,835

Contractual loan payments receivable, estimates of amounts not expected to be collected, other fair value adjustments and the resulting fair values of FASB ASC Topic 310-30 acquired loans impaired and non-impaired at the acquisition date for SBFC (January 3, 2017) are as follows:


	January 3, 2017

	Loans Impaired
(Dollars in thousands)	at Acquisition
Contractual principal and interest	$	73,365
Non-accretable difference		(12,912)
Cash flows expected to be collected		60,453
Accretable difference		(4,603)
Carrying value	$	55,850

The table above excludes $991.5 million ($1.01 billion in contractual principal less a $18.8 million fair value adjustment) in acquired loans at fair value that were identified as either performing with no discount related to the credit or as revolving lines of credit (commercial or consumer) as of the acquisition date and will be accounted for under FASB ASC Topic 310-20.

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 June 30, 2017, December 31, 2016 and June 30, 2016 are as follows:


	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
Contractual principal and interest	$	774,471	$	778,822	$	861,401
Non-accretable difference		(28,966)		(17,502)		(23,294)
Cash flows expected to be collected		745,505		761,320		838,107
Accretable yield		(139,283)		(155,379)		(175,520)
Carrying value	$	606,222	$	605,941	$	662,587
Allowance for acquired loan losses	$	(3,741)	$	(3,395)	$	(3,752)

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:


	Six Months Ended June 30,
(Dollars in thousands)	2017		2016
Balance at beginning of period	$	602,546	$	733,870
Fair value of acquired loans		55,850		—
Net reductions for payments, foreclosures, and accretion		(55,569)		(74,989)
Change in the allowance for loan losses on acquired loans		(346)		(46)
Balance at end of period, net of allowance for loan losses on acquired loans	$	602,481	$	658,835

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


	Six Months Ended June 30,
(Dollars in thousands)	2017		2016
Balance at beginning of period	$	155,379	$	201,538
Addition from the SBFC acquisition		4,603		—
Accretion		(29,511)		(39,522)
Reclass of nonaccretable difference due to improvement in expected cash flows		9,016		13,146
Other changes, net		(204)		358
Balance at end of period	$	139,283	$	175,520

In the second quarter of 2017, the accretable yield balance declined by $14.3 million as loan accretion (income) was recognized. This was partially offset by improved expected cash flows of $4.0 million during the second quarter of 2017.

Our loan loss policy adheres to GAAP 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 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, as noted above, 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.

Beginning with the First Financial Holdings, Inc. (“FFHI”) acquisition in 2013, the Company segregates the acquired loan portfolio into performing loans (“non‑credit impaired) and purchased 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 purchased 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 Special Asset Management are reviewed quarterly and assigned a loss given default. Acquired loans not managed by Special Asset Management 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. Prior to the termination of our loss share agreements in June 2016, as discussed below, which offset the impact of the provision established for acquired loans covered under FDIC loss share agreements, the receivable from the FDIC was 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, which was 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 June 30, 2017:
Balance at beginning of period	$	38,449	$	—	$	4,556	$	43,005
Loans charged-off		(1,292)		(501)		—		(1,793)
Recoveries of loans previously charged off (1)		536		72		—		608
Net charge-offs		(756)		(429)		—		(1,185)
Provision for loan losses charged to operations		2,456		429		(572)		2,313
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—
Reduction due to loan removals		—		—		(243)		(243)
Balance at end of period	$	40,149	$	—	$	3,741	$	43,890
Three Months Ended June 30, 2016:
Balance at beginning of period	$	35,115	$	—	$	3,877	$	38,992
Loans charged-off		(1,557)		(232)		—		(1,789)
Recoveries of loans previously charged off (1)		881		51		—		932
Net charge-offs		(676)		(181)		—		(857)
Provision		2,500		181		47		2,728
Benefit attributable to FDIC loss share agreements		—		—		—		—
Provision for loan losses charged to operations		2,500		181		47		2,728
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—
Reduction due to loan removals		—		—		(172)		(172)
Balance at end of period	$	36,939	$	—	$	3,752	$	40,691


	Non-acquired		Acquired Non-Credit		Acquired Credit
(Dollars in thousands)	Loans		Impaired Loans		Impaired Loans		Total
Six Months Ended June 30, 2017:
Balance at beginning of period	$	36,960	$	—	$	3,395	$	40,355
Loans charged-off		(2,589)		(890)		—		(3,479)
Recoveries of loans previously charged off (1)		1,205		135		—		1,340
Net charge-offs		(1,384)		(755)		—		(2,139)
Provision		4,573		755		692		6,020
Benefit attributable to FDIC loss share agreements		—		—		—		—
Total provision for loan losses charged to operations		4,573		755		692		6,020
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—
Reduction due to loan removals		—		—		(346)		(346)
Balance at end of period	$	40,149	$	—	$	3,741	$	43,890
Six Months Ended June 30, 2016:
Balance at beginning of period	$	34,090	$	—	$	3,706	$	37,796
Loans charged-off		(3,276)		(529)		—		(3,805)
Recoveries of loans previously charged off (1)		1,645		141		—		1,786
Net charge-offs		(1,631)		(388)		—		(2,019)
Provision		4,480		388		395		5,263
Benefit attributable to FDIC loss share agreements		—		—		23		23
Total provision for loan losses charged to operations		4,480		388		418		5,286
Provision for loan losses recorded through the FDIC loss share receivable		—		—		(23)		(23)
Reduction due to loan removals		—		—		(349)		(349)
Balance at end of period	$	36,939	$	—	$	3,752	$	40,691

(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 June 30, 2017
Allowance for loan losses:
Balance, March 31, 2017	$	4,649	$	5,464	$	7,894	$	8,108	$	3,456	$	5,124	$	1,345	$	2,443	$	(34)	$	38,449
Charge-offs		(69)		—		—		(62)		(190)		(167)		(7)		(797)		—		(1,292)
Recoveries		68		7		98		27		21		143		5		167		—		536
Provision (benefit)		1,098		693		(453)		496		(40)		43		36		719		(136)		2,456
Balance, June 30, 2017	$	5,746	$	6,164	$	7,539	$	8,569	$	3,247	$	5,143	$	1,379	$	2,532	$	(170)	$	40,149
Loans individually evaluated for impairment	$	1,310	$	146	$	62	$	57	$	119	$	362	$	238	$	6	$	—	$	2,300
Loans collectively evaluated for impairment	$	4,436	$	6,018	$	7,477	$	8,512	$	3,128	$	4,781	$	1,141	$	2,526	$	(170)	$	37,849
Loans:
Loans individually evaluated for impairment	$	30,037	$	754	$	6,054	$	4,575	$	2,626	$	1,198	$	3,641	$	235	$	—	$	49,120
Loans collectively evaluated for impairment		682,205		952,157		1,198,899		1,378,347		408,906		761,385		185,685		357,526		18,163		5,943,273
Total non-acquired loans	$	712,242	$	952,911	$	1,204,953	$	1,382,922	$	411,532	$	762,583	$	189,326	$	357,761	$	18,163	$	5,992,393
Three Months Ended June 30, 2016
Allowance for loan losses:
Balance , March 31, 2016	$	4,482	$	3,923	$	8,179	$	7,345	$	3,097	$	3,951	$	1,802	$	1,785	$	551	$	35,115
Charge-offs		(159)		—		(59)		(129)		(324)		(20)		(7)		(859)		—		(1,557)
Recoveries		442		15		14		17		87		55		35		216		—		881
Provision (benefit)		(100)		718		(131)		297		288		283		(18)		872		291		2,500
Balance, June 30, 2016	$	4,665	$	4,656	$	8,003	$	7,530	$	3,148	$	4,269	$	1,812	$	2,014	$	842	$	36,939
Loans individually evaluated for impairment	$	751	$	202	$	67	$	55	$	38	$	14	$	376	$	4	$	—	$	1,507
Loans collectively evaluated for impairment	$	3,914	$	4,454	$	7,936	$	7,475	$	3,110	$	4,255	$	1,436	$	2,010	$	842	$	35,432
Loans:
Loans individually evaluated for impairment	$	4,093	$	1,219	$	6,972	$	3,967	$	2,177	$	767	$	5,000	$	128	$	—	$	24,323
Loans collectively evaluated for impairment		529,126		585,609		1,076,079		1,105,700		343,780		611,134		176,703		272,829		91,592		4,792,552
Total non-acquired loans	$	533,219	$	586,828	$	1,083,051	$	1,109,667	$	345,957	$	611,901	$	181,703	$	272,957	$	91,592	$	4,816,875


	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
Six Months Ended June 30, 2017
Allowance for loan losses:
Balance, December 31, 2016	$	4,091	$	4,980	$	8,022	$	7,820	$	3,211	$	4,842	$	1,542	$	2,350	$	102	$	36,960
Charge-offs		(474)		—		—		(185)		(224)		(189)		(7)		(1,510)		—		(2,589)
Recoveries		222		48		105		76		95		233		48		378		—		1,205
Provision (benefit)		1,907		1,136		(588)		858		165		257		(204)		1,314		(272)		4,573
Balance, June 30, 2017	$	5,746	$	6,164	$	7,539	$	8,569	$	3,247	$	5,143	$	1,379	$	2,532	$	(170)	$	40,149
Six Months Ended June 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)		—		(101)		(129)		(767)		(327)		(7)		(1,786)		—		(3,276)
Recoveries		607		31		21		98		175		103		39		571		—		1,645
Provision (benefit)		101		1,057		(258)		349		811		519		(183)		1,535		549		4,480
Balance, June 30, 2016	$	4,665	$	4,656	$	8,003	$	7,530	$	3,148	$	4,269	$	1,812	$	2,014	$	842	$	36,939

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 June 30, 2017
Allowance for loan losses:
Balance at beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		—		303		(664)		—		—		(140)		(501)
Recoveries		1		—		—		2		60		1		1		7		72
Provision (benefit)		(1)		—		—		(305)		604		(1)		(1)		133		429
Balance, June 30, 2017	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

Loans:
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		112,855		209,560		221,566		520,106		177,129		117,884		83,403		143,478		1,585,981
Total acquired non-credit impaired loans	$	112,855	$	209,560	$	221,566	$	520,106	$	177,129	$	117,884	$	83,403	$	143,478	$	1,585,981

Three Months Ended June 30, 2016
Allowance for loan losses:
Balance at beginning of period	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		—		—		(42)		(4)		—		(186)		(232)
Recoveries		1		—		—		3		24		—		—		23		51
Provision (benefit)		(1)		—		—		(3)		18		4		—		163		181
Balance, June 30, 2016	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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

Loans:
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		12,516		36,904		32,267		466,479		177,946		15,598		44,873		155,303		941,886
Total acquired non-credit impaired loans	$	12,516	$	36,904	$	32,267	$	466,479	$	177,946	$	15,598	$	44,873	$	155,303	$	941,886


	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
Six Months Ended June 30, 2017
Allowance for loan losses:
Balance, December 31, 2016	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		—		(10)		(664)		(2)		—		(214)		(890)
Recoveries		2		—		—		42		69		2		1		19		135
Provision (benefit)		(2)		—		—		(32)		595		—		(1)		195		755
Balance, June 30, 2017	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Six Months Ended June 30, 2016
Allowance for loan losses:
Balance, December 31, 2015	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Charge-offs		—		—		—		—		(186)		(7)		—		(336)		(529)
Recoveries		2		—		—		6		108		2		1		22		141
Provision (benefit)		(2)		—		—		(6)		78		5		(1)		314		388
Balance, June 30, 2016	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

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 June 30, 2017
Allowance for loan losses:
Balance, March 31, 2017	$	—	$	335	$	130	$	3,108	$	589	$	394	$	—	$	4,556
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		—		(292)		—		(192)		(37)		(51)		—		(572)
Benefit attributable to FDIC loss share agreements		—		—		—		—		—		—		—		—
Total provision (benefit) for loan losses charged to operations		—		(292)		—		(192)		(37)		(51)		—		(572)
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—		—		—		—		—
Reduction due to loan removals		—		(3)		(38)		(175)		(4)		(23)		—		(243)
Balance, June 30, 2017	$	—	$	40	$	92	$	2,741	$	548	$	320	$	—	$	3,741
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment	$	—	$	40	$	92	$	2,741	$	548	$	320	$	—	$	3,741
Loans:*
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		8,524		206,271		52,977		256,602		56,362		25,486		—		606,222
Total acquired credit impaired loans	$	8,524	$	206,271	$	52,977	$	256,602	$	56,362	$	25,486	$	—	$	606,222

Three Months Ended June 30, 2016
Allowance for loan losses:
Balance , March 31, 2016	$	—	$	46	$	154	$	2,863	$	606	$	208	$	—	$	3,877
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		—		—		—		(165)		217		(5)		—		47
Benefit attributable to FDIC loss share agreements		—		—		—		—		—		—		—		—
Total provision (benefit) for loan losses charged to operations		—		—		—		(165)		217		(5)		—		47
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		—		—		—		—		—
Reduction due to loan removals		—		(11)		(3)		(106)		(45)		(7)		—		(172)
Balance, June 30, 2016	$	—	$	35	$	151	$	2,592	$	778	$	196	$	—	$	3,752
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment	$	—	$	35	$	151	$	2,592	$	778	$	196	$	—	$	3,752
Loans:*
Loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Loans collectively evaluated for impairment		11,260		225,460		48,274		285,518		64,114		27,961		—		662,587
Total acquired credit impaired loans	$	11,260	$	225,460	$	48,274	$	285,518	$	64,114	$	27,961	$	—	$	662,587


	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
Six Months Ended June 30, 2017
Allowance for loan losses:
Balance, December 31, 2016	$	—	$	41	$	139	$	2,419	$	558	$	238	$	—	$	3,395
Provision (benefit) for loan losses before benefit attributable to FDIC loss share agreements		—		—		(3)		559		—		136		—		692
Benefit attributable to FDIC loss share agreements		—		—		—		—		—		—		—		—
Total provision (benefit) for loan losses charged to operations		—		—		(3)		559		—		136		—		692
Provision (benefit) for loan losses recorded through the FDIC loss share receivable		—		—		—		—		—		—		—		—
Reduction due to loan removals		—		(1)		(44)		(237)		(10)		(54)		—		(346)
Balance, June 30, 2017	$	—	$	40	$	92	$	2,741	$	548	$	320	$	—	$	3,741
Six Months Ended June 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		—		(180)		534		40		—		395
Benefit attributable to FDIC loss share agreements		—		—		—		23		—		—		—		23
Total provision (benefit) for loan losses charged to operations		—		1		—		(157)		534		40		—		418
Provision for loan losses recorded through the FDIC loss share receivable		—		—		—		(23)		—		—		—		(23)
Reduction due to loan removals		—		(22)		(26)		(214)		(69)		(18)		—		(349)
Balance, June 30, 2016	$	—	$	35	$	151	$	2,592	$	778	$	196	$	—	$	3,752

*— 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
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	700,200	$	567,398	$	518,537	$	939,254	$	701,150	$	569,815	$	1,177,687	$	1,149,417	$	1,041,512
Special mention		8,133		8,421		9,230		11,437		11,434		14,859		15,004		22,133		31,631
Substandard		3,909		4,645		5,452		2,220		2,131		2,154		12,262		6,195		9,908
Doubtful		—		—		—		—		—		—		—		—		—
	$	712,242	$	580,464	$	533,219	$	952,911	$	714,715	$	586,828	$	1,204,953	$	1,177,745	$	1,083,051


	Commercial & Industrial						Other Income Producing Property						Commercial Total
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	741,605	$	655,157	$	596,879	$	180,830	$	167,025	$	167,122	$	3,739,576	$	3,240,147	$	2,893,865
Special mention		15,916		14,325		13,441		6,636		9,280		12,039		57,126		65,593		81,200
Substandard		5,062		1,916		1,581		1,860		1,933		2,542		25,313		16,820		21,637
Doubtful		—		—		—		—		—		—		—		—		—
	$	762,583	$	671,398	$	611,901	$	189,326	$	178,238	$	181,703	$	3,822,015	$	3,322,560	$	2,996,702

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


	Consumer Owner Occupied						Home Equity						Consumer
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	1,356,469	$	1,167,768	$	1,078,749	$	397,857	$	368,655	$	330,270	$	356,244	$	322,654	$	271,253
Special mention		13,653		15,283		17,814		7,207		8,145		8,341		348		468		752
Substandard		12,800		14,570		13,104		6,468		6,418		7,346		1,169		1,116		952
Doubtful		—		—		—		—		—		—		—		—		—
	$	1,382,922	$	1,197,621	$	1,109,667	$	411,532	$	383,218	$	345,957	$	357,761	$	324,238	$	272,957


	Other						Consumer Total
	June 30, 2017		December 31, 2016		June 30, 2016		June 30, 2017		December 31, 2016		June 30, 2016
Pass	$	18,163	$	13,404	$	91,592	$	2,128,733	$	1,872,481	$	1,771,864
Special mention		—		—		—		21,208		23,896		26,907
Substandard		—		—		—		20,437		22,104		21,402
Doubtful		—		—		—		—		—		—
	$	18,163	$	13,404	$	91,592	$	2,170,378	$	1,918,481	$	1,820,173

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


	Total Non-acquired Loans
	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
Pass	$	5,868,309	$	5,112,628	$	4,665,729
Special mention		78,334		89,489		108,107
Substandard		45,750		38,924		43,039
Doubtful		—		—		—
	$	5,992,393	$	5,241,041	$	4,816,875

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
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	110,776	$	8,997	$	11,432	$	205,623	$	28,368	$	30,621	$	217,392	$	26,920	$	31,739
Special mention		1,290		253		230		3,856		6,171		371		4,130		—		222
Substandard		789		840		854		81		89		5,912		44		275		306
Doubtful		—		—		—		—		—		—		—		—		—
	$	112,855	$	10,090	$	12,516	$	209,560	$	34,628	$	36,904	$	221,566	$	27,195	$	32,267


							Other Income Producing
	Commercial & Industrial						Property						Commercial Total
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	112,046	$	13,475	$	14,645	$	81,161	$	38,361	$	43,869	$	726,998	$	116,121	$	132,306
Special mention		4,642		117		129		1,542		273		279		15,460		6,814		1,231
Substandard		1,196		49		824		700		708		725		2,810		1,961		8,621
Doubtful		—		—		—		—		—		—		—		—		—
	$	117,884	$	13,641	$	15,598	$	83,403	$	39,342	$	44,873	$	745,268	$	124,896	$	142,158

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
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	514,294	$	404,761	$	463,107	$	167,786	$	151,752	$	168,079	$	140,426	$	139,686	$	152,399
Special mention		2,697		1,326		744		4,906		4,113		5,330		1,172		1,102		600
Substandard		3,115		2,183		2,628		4,437		5,014		4,537		1,880		1,866		2,304
Doubtful		—		—		—		—		—		—		—		—		—
	$	520,106	$	408,270	$	466,479	$	177,129	$	160,879	$	177,946	$	143,478	$	142,654	$	155,303


	Consumer Total
	June 30,		December 31,		June 30,
	2017		2016		2016
Pass	$	822,506	$	696,199	$	783,585
Special mention		8,775		6,541		6,674
Substandard		9,432		9,063		9,469
Doubtful		—		—		—
	$	840,713	$	711,803	$	799,728

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


	Total Acquired
	Non-credit Impaired Loans
	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
Pass	$	1,549,504	$	812,320	$	915,891
Special mention		24,235		13,355		7,905
Substandard		12,242		11,024		18,090
Doubtful		—		—		—
	$	1,585,981	$	836,699	$	941,886

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 25):


	Commercial Loans Greater												Commercial Real Estate—
	Than or Equal to												Construction and
	$1 million-CBT						Commercial Real Estate						Development
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	8,206	$	8,297	$	9,891	$	158,755	$	162,870	$	168,431	$	31,656	$	21,150	$	21,729
Special mention		—		—		1,014		23,162		26,238		32,446		7,851		12,643		14,194
Substandard		318		320		355		24,354		21,096		24,583		13,470		10,580		12,351
Doubtful		—		—		—		—		—		—		—		—		—
	$	8,524	$	8,617	$	11,260	$	206,271	$	210,204	$	225,460	$	52,977	$	44,373	$	48,274


	Residential Real Estate						Consumer						Commercial & Industrial
	June 30,		December 31,		June 30,		June 30,		December 31,		June 30,		June 30,		December 31,		June 30,
	2017		2016		2016		2017		2016		2016		2017		2016		2016
Pass	$	137,735	$	138,343	$	152,575	$	9,178	$	8,513	$	9,379	$	16,534	$	17,371	$	19,296
Special mention		52,250		52,546		56,845		18,536		19,685		21,401		4,188		4,614		4,598
Substandard		66,617		67,211		76,098		28,648		31,102		33,334		4,764		3,362		4,067
Doubtful		—		—		—		—		—		—		—		—		—
	$	256,602	$	258,100	$	285,518	$	56,362	$	59,300	$	64,114	$	25,486	$	25,347	$	27,961


	Total Acquired
	Credit Impaired Loans
	June 30,		December 31,		June 30,
	2017		2016		2016
Pass	$	362,064	$	356,544	$	381,301
Special mention		105,987		115,726		130,498
Substandard		138,171		133,671		150,788
Doubtful		—		—		—
	$	606,222	$	605,941	$	662,587

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
June 30, 2017
Commercial real estate:
Construction and land development	$	102	$	—	$	505	$	607	$	711,635	$	712,242
Commercial non-owner occupied		123		150		255		528		952,383		952,911
Commercial owner occupied		1,041		799		1,562		3,402		1,201,551		1,204,953
Consumer real estate:
Consumer owner occupied		1,168		1,112		766		3,046		1,379,876		1,382,922
Home equity loans		779		311		1,370		2,460		409,072		411,532
Commercial and industrial		608		156		97		861		761,722		762,583
Other income producing property		480		104		257		841		188,485		189,326
Consumer		359		188		347		894		356,867		357,761
Other loans		—		—		—		—		18,163		18,163
	$	4,660	$	2,820	$	5,159	$	12,639	$	5,979,754	$	5,992,393
December 31, 2016
Commercial real estate:
Construction and land development	$	256	$	313	$	1,026	$	1,595	$	578,869	$	580,464
Commercial non-owner occupied		647		232		137		1,016		713,699		714,715
Commercial owner occupied		1,272		957		1,478		3,707		1,174,038		1,177,745
Consumer real estate:
Consumer owner occupied		1,473		246		1,454		3,173		1,194,448		1,197,621
Home equity loans		566		889		838		2,293		380,925		383,218
Commercial and industrial		1,033		216		345		1,594		669,804		671,398
Other income producing property		310		94		147		551		177,687		178,238
Consumer		666		355		395		1,416		322,822		324,238
Other loans		—		—		—		—		13,404		13,404
	$	6,223	$	3,302	$	5,820	$	15,345	$	5,225,696	$	5,241,041
June 30, 2016
Commercial real estate:
Construction and land development	$	332	$	192	$	1,063	$	1,587	$	531,632	$	533,219
Commercial non-owner occupied		2,511		—		137		2,648		584,180		586,828
Commercial owner occupied		1,897		164		1,563		3,624		1,079,427		1,083,051
Consumer real estate:
Consumer owner occupied		1,338		968		2,584		4,890		1,104,777		1,109,667
Home equity loans		1,113		443		1,154		2,710		343,247		345,957
Commercial and industrial		473		48		544		1,065		610,836		611,901
Other income producing property		517		614		176		1,307		180,396		181,703
Consumer		527		57		240		824		272,133		272,957
Other loans		—		—		—		—		91,592		91,592
	$	8,708	$	2,486	$	7,461	$	18,655	$	4,798,220	$	4,816,875

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
June 30, 2017
Commercial real estate:
Construction and land development	$	3,784	$	2	$	192	$	3,978	$	108,877	$	112,855
Commercial non-owner occupied		519		—		—		519		209,041		209,560
Commercial owner occupied		1,844		143		236		2,223		219,343		221,566
Consumer real estate:
Consumer owner occupied		499		801		1,282		2,582		517,524		520,106
Home equity loans		1,109		321		722		2,152		174,977		177,129
Commercial and industrial		710		1,508		98		2,316		115,568		117,884
Other income producing property		336		138		56		530		82,873		83,403
Consumer		540		67		570		1,177		142,301		143,478
	$	9,341	$	2,980	$	3,156	$	15,477	$	1,570,504	$	1,585,981
December 31, 2016
Commercial real estate:
Construction and land development	$	4	$	—	$	160	$	164	$	9,926	$	10,090
Commercial non-owner occupied		—		—		—		—		34,628		34,628
Commercial owner occupied		—		—		106		106		27,089		27,195
Consumer real estate:
Consumer owner occupied		330		113		256		699		407,571		408,270
Home equity loans		476		941		741		2,158		158,721		160,879
Commercial and industrial		2		—		—		2		13,639		13,641
Other income producing property		131		1		—		132		39,210		39,342
Consumer		437		210		576		1,223		141,431		142,654
	$	1,380	$	1,265	$	1,839	$	4,484	$	832,215	$	836,699
June 30, 2016
Commercial real estate:
Construction and land development	$	—	$	181	$	21	$	202	$	12,314	$	12,516
Commercial non-owner occupied		—		—		—		—		36,904		36,904
Commercial owner occupied				—		306		306		31,961		32,267
Consumer real estate:
Consumer owner occupied		487		210		200		897		465,582		466,479
Home equity loans		234		98		1,132		1,464		176,482		177,946
Commercial and industrial		8		9		—		17		15,581		15,598
Other income producing property		—		—		—		—		44,873		44,873
Consumer		508		116		552		1,176		154,127		155,303
	$	1,237	$	614	$	2,211	$	4,062	$	937,824	$	941,886

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
June 30, 2017
Commercial loans greater than or equal to $1 million-CBT	$	—	$	—	$	—	$	—	$	8,524	$	8,524
Commercial real estate		961		91		2,717		3,769		202,502		206,271
Commercial real estate—construction and development		262		252		4,255		4,769		48,208		52,977
Residential real estate		4,581		1,593		8,138		14,312		242,290		256,602
Consumer		518		178		1,203		1,899		54,463		56,362
Commercial and industrial		426		—		2,693		3,119		22,367		25,486
	$	6,748	$	2,114	$	19,006	$	27,868	$	578,354	$	606,222
December 31, 2016
Commercial loans greater than or equal to $1 million-CBT	$	—	$	—	$	—	$	—	$	8,617	$	8,617
Commercial real estate		573		357		2,667		3,597		206,607		210,204
Commercial real estate—construction and development		168		489		3,612		4,269		40,104		44,373
Residential real estate		4,688		1,105		6,777		12,570		245,530		258,100
Consumer		1,412		381		1,231		3,024		56,276		59,300
Commercial and industrial		46		24		536		606		24,741		25,347
	$	6,887	$	2,356	$	14,823	$	24,066	$	581,875	$	605,941
June 30, 2016
Commercial loans greater than or equal to $1 million-CBT	$	—	$	—	$	—	$	—	$	11,260	$	11,260
Commercial real estate		357		279		4,018		4,654		220,806		225,460
Commercial real estate—construction and development		507		43		1,976		2,526		45,748		48,274
Residential real estate		4,585		1,695		6,199		12,479		273,039		285,518
Consumer		926		222		1,676		2,824		61,290		64,114
Commercial and industrial		26		90		648		764		27,197		27,961
	$	6,401	$	2,329	$	14,517	$	23,247	$	639,340	$	662,587

The following is a summary of certain 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
June 30, 2017
Commercial real estate:
Construction and land development	$	34,757	$	1,289	$	28,748	$	30,037	$	1,310
Commercial non-owner occupied		2,376		212		542		754		146
Commercial owner occupied		9,882		4,075		1,979		6,054		62
Consumer real estate:
Consumer owner occupied		6,093		1,451		3,124		4,575		57
Home equity loans		3,311		688		1,938		2,626		119
Commercial and industrial		2,244		—		1,198		1,198		362
Other income producing property		4,382		95		3,546		3,641		238
Consumer		556		—		235		235		6
Other loans		—		—		—		—		—
Total	$	63,601	$	7,810	$	41,310	$	49,120	$	2,300
December 31, 2016
Commercial real estate:
Construction and land development	$	7,394	$	1,074	$	1,959	$	3,033	$	348
Commercial non-owner occupied		2,417		223		583		806		170
Commercial owner occupied		10,118		3,976		2,269		6,245		67
Consumer real estate:
Consumer owner occupied		7,090		2,120		3,553		5,673		80
Home equity loans		2,165		244		1,430		1,674		40
Commercial and industrial		2,335		—		1,263		1,263		386
Other income producing property		3,166		99		2,273		2,372		242
Consumer		394		—		145		145		4
Other loans		—		—		—		—		—
Total	$	35,079	$	7,736	$	13,475	$	21,211	$	1,337
June 30, 2016
Commercial real estate:
Construction and land development	$	8,286	$	798	$	3,295	$	4,093	$	752
Commercial non-owner occupied		1,669		337		882		1,219		202
Commercial owner occupied		10,784		4,988		1,984		6,972		67
Consumer real estate:
Consumer owner occupied		5,420		2,333		1,634		3,967		55
Home equity loans		3,024		812		1,365		2,177		38
Commercial and industrial		1,891		259		508		767		14
Other income producing property		5,838		492		4,508		5,000		375
Consumer		334		—		128		128		4
Other		—		—		—		—		—
Total	$	37,246	$	10,019	$	14,304	$	24,323	$	1,507

Acquired credit impaired loans are accounted for in pools as shown on page 19 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 June 30,
	2017				2016
	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	$	19,662	$	267	$	5,182	$	8
Commercial non-owner occupied		764		6		1,177		11
Commercial owner occupied		6,153		69		7,337		6
Consumer real estate:
Consumer owner occupied		4,644		35		5,805		—
Home equity loans		2,529		26		2,680		4
Commercial and industrial		1,234		4		822		6
Other income producing property		3,024		68		5,197		23
Consumer		211		3		135		—
Other loans		—		—		423		—
Total Impaired Loans	$	38,221	$	478	$	28,758	$	58


	Six Months Ended June 30,
	2017				2016
	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	$	16,535	$	314	$	5,187	$	57
Commercial non-owner occupied		780		12		1,335		26
Commercial owner occupied		6,150		145		7,348		80
Consumer real estate:
Consumer owner occupied		5,124		74		5,758		46
Home equity loans		2,150		46		1,243		12
Commercial and industrial		1,230		22		1,127		85
Other income producing property		3,007		103		4,946		30
Consumer		189		3		115		1
Other loans		—		—		211		2
Total Impaired Loans	$	35,165	$	719	$	27,270	$	339

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


	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
Commercial non-owner occupied real estate:
Construction and land development	$	62	$	672	$	1,080
Commercial non-owner occupied		2,575		578		528
Total commercial non-owner occupied real estate		2,637		1,250		1,608
Consumer real estate:
Consumer owner occupied		4,156		5,711		6,705
Home equity loans		10		1,629		2,386
Total consumer real estate		4,166		7,340		9,091
Commercial owner occupied real estate		2,641		2,189		2,242
Commercial and industrial		596		420		360
Other income producing property		1,162		356		1,007
Consumer		898		930		763
Restructured loans		967		1,979		2,851
Total loans on nonaccrual status	$	13,067	$	14,464	$	17,922

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


	June 30,		December 31,		June 30,
(Dollars in thousands)	2017		2016		2016
Commercial non-owner occupied real estate:
Construction and land development	$	226	$	232	$	99
Commercial non-owner occupied		—		—		—
Total commercial non-owner occupied real estate		226		232		99
Consumer real estate:
Consumer owner occupied		1,927		1,405		1,056
Home equity loans		1,515		1,643		1,607
Total consumer real estate		3,442		3,048		2,663
Commercial owner occupied real estate		44		61		306
Commercial and industrial		57		1		1
Other income producing property		159		145		153
Consumer		1,206		1,241		1,216
Total loans on nonaccrual status	$	5,134	$	4,728	$	4,438

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 experiencing 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 six months ended June 30, 2017 and 2016, the Company’s TDRs were not material.