LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES

6 Months Ended

Jun. 30, 2015

LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES

LOANS AND ALLOWANCE FOR LOAN LOSSES

3.LOANS AND ALLOWANCE FOR LOAN AND LEASE LOSSES

The composition of the loan portfolio at June 30, 2015 and December 31, 2014 follows:

(in thousands)	June 30, 2015			December 31, 2014
Residential real estate:
Owner occupied	$	1,100,133		$	1,118,341
Owner occupied - correspondent*	243,140			226,628
Non owner occupied	101,765			96,492
Commercial real estate	799,158			772,309
Commercial real estate - purchased whole loans*	35,277			34,898
Construction & land development	47,038			38,480
Commercial & industrial	202,456			157,339
Lease financing receivables	7,242			2,530
Warehouse lines of credit	488,905			319,431
Home equity	267,570			245,679
Consumer:
RPG loans	6,467			4,095
Credit cards	10,942			9,573
Overdrafts	1,404			1,180
Purchased whole loans*	3,607			4,626
Other consumer	8,873			8,894
Total loans**	3,323,977			3,040,495
Allowance for loan and lease losses	(25,248		)	(24,410		)
Total loans, net	$	3,298,729		$	3,016,085

* - Identifies loans to borrowers located primarily outside of the Bank’s historical market footprint.

** - Total loans are presented inclusive of premiums, discounts and net loan origination fees and costs. See table directly below for expanded detail.

The table below reconciles the contractually receivable and carrying amounts of loans at June 30, 2015 and December 31, 2014:

(in thousands)	June 30, 2015			December 31, 2014
Contractually receivable	$	3,329,849		$	3,050,599
Unearned income(1)	(635		)	(174		)
Unamortized premiums(2)	4,191			4,490
Unaccreted discounts(3)	(10,859		)	(15,675		)
Net unamortized deferred origination fees and costs	1,431			1,255
Carrying value of loans	$	3,323,977		$	3,040,495

(1) — Unearned income relates to lease financing receivables.

(2) - Premiums predominately relate to loans acquired through the Bank’s Correspondent Lending channel.

(3) - Discounts predominately relate to loans acquired in the Bank’s 2012 FDIC-assisted transactions.

Loan Purchases

In May 2014, the Bank began acquiring single family, first lien mortgage loans for investment within its loan portfolio through its Correspondent Lending channel. Correspondent Lending generally involves the Bank acquiring, primarily from Warehouse clients, closed loans that meet the Bank’s specifications. Substantially all loans purchased through the Correspondent Lending channel are purchased at a premium. Loans acquired through the Correspondent Lending channel generally reflect borrowers outside of the Bank’s historical market footprint, with 83% of such loans as of June 30, 2015 secured by collateral in the state of California.

In addition to secured mortgage loans acquired through its Correspondent Lending channel, the Bank also began acquiring unsecured consumer installment loans for investment from a third-party originator in April 2014. Such consumer loans are purchased at par and are selected by the Bank based on certain underwriting characteristics.

The table below reflects the purchased activity of single family, first lien mortgage loans and unsecured consumer loans, by class, during the three and six months ended June 30, 2015 and 2014.

	Three Months Ended				Six Months Ended
	June 30,				June 30,
(in thousands)	2015		2014		2015		2014
Residential real estate:
Owner occupied - correspondent*	$	43,632	$	12,067	$	62,802	$	12,067
Consumer:
Purchased whole loans*	—		2,628		361		2,628
Total purchased loans	$	43,632	$	14,695	$	63,163	$	14,695

* - Represents origination amount, inclusive of purchase premiums, where applicable.

Purchased Credit Impaired (“PCI”) Loans

PCI loans acquired during the Bank’s 2012 FDIC-assisted transactions are accounted for under ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality.

The table below reconciles the contractually required and carrying amounts of PCI loans at June 30, 2015 and December 31, 2014:

(in thousands)	June 30, 2015			December 31, 2014
Contractually-required principal	$	20,080		$	26,571
Non-accretable amount	(2,076		)	(6,784		)
Accretable amount	(4,323		)	(2,297		)
Carrying value of PCI loans	$	13,681		$	17,490

The following table presents a rollforward of the accretable amount on PCI loans for the three and six months ended June 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
(in thousands)	2015			2014			2015			2014
Balance, beginning of period	$	(2,170	)	$	(2,765	)	$	(2,297	)	$	(3,457	)
Transfers between non-accretable and accretable	(3,378		)	(1,029		)	(3,354		)	(2,340		)
Net accretion into interest income on loans, including loan fees	1,225			1,307			1,328			3,310
Balance, end of period	$	(4,323	)	$	(2,487	)	$	(4,323	)	$	(2,487	)

Credit Quality Indicators

Based on the Bank’s internal analyses performed as of June 30, 2015 and December 31, 2014, the following tables reflect loans by risk category. Risk categories are defined in the Company’s Annual Report on Form 10-K for the year ended December 31, 2014:

									Purchased		Purchased
									Credit		Credit
									Impaired		Impaired		Total
			Special				Doubtful /		Loans -		Loans -		Rated
June 30, 2015 (in thousands)	Pass		Mention *		Substandard *		Loss		Group 1		Substandard		Loans**
Residential real estate:
Owner occupied	$	—	$	24,473	$	15,456	$	—	$	927	$	—	$	40,856
Owner occupied - correspondent	—		—		—		—		—		—		—
Non owner occupied	—		1,544		1,983		—		1,203		—		4,730
Commercial real estate	770,583		7,455		10,842		—		10,278		—		799,158
Commercial real estate - purchased whole loans	35,277		—		—		—		—		—		35,277
Construction & land development	44,199		115		2,687		—		37		—		47,038
Commercial & industrial	198,956		2,063		201		—		1,236		—		202,456
Lease financing receivables	7,242		—		—		—		—		—		7,242
Warehouse lines of credit	488,905		—		—		—		—		—		488,905
Home equity	—		—		2,658		—		—		—		2,658
Consumer:
RPG loans	—		—		—		—		—		—		—
Credit cards	—		—		—		—		—		—		—
Overdrafts	—		—		—		—		—		—		—
Purchased whole loans	—		—		—		—		—		—		—
Other consumer	—		9		84		—		—		—		93
Total	$	1,545,162	$	35,659	$	33,911	$	—	$	13,681	$	—	$	1,628,413

* - At June 30, 2015, Special Mention and Substandard loans included $183,000 and $4 million, respectively, which were removed from PCI accounting in accordance with ASC 310-30-35-13 due to a post-acquisition troubled debt restructuring.

** - The above table excludes all non-classified residential real estate and consumer loans at the respective period ends. The table also excludes most non-classified small Commercial and Industrial (“C&I”) and Commercial Real Estate (“CRE”) relationships totaling $100,000 or less. These loans are not rated by the Company since they are accruing interest and are not past due 80-days-or-more.

									Purchased		Purchased
									Credit		Credit
									Impaired		Impaired		Total
			Special				Doubtful /		Loans -		Loans -		Rated
December 31, 2014 (in thousands)	Pass		Mention *		Substandard *		Loss		Group 1		Substandard		Loans**
Residential real estate:
Owner occupied	$	—	$	26,828	$	14,586	$	—	$	1,205	$	—	$	42,619
Owner occupied - correspondent	—		—		—		—		—		—		—
Non owner occupied	—		844		2,886		—		1,709		—		5,439
Commercial real estate	736,012		7,838		15,636		—		12,823		—		772,309
Commercial real estate - purchased whole loans	34,898		—		—		—		—		—		34,898
Construction & land development	35,339		120		2,525		—		496		—		38,480
Commercial & industrial	153,362		625		2,108		—		1,244		—		157,339
Lease financing receivables	2,530		—		—		—		—		—		2,530
Warehouse lines of credit	319,431		—		—		—		—		—		319,431
Home equity	—		—		2,220		—		—		—		2,220
Consumer:
RPG loans	—		—		—		—		—		—		—
Credit cards	—		—		—		—		—		—		—
Overdrafts	—		—		—		—		—		—		—
Purchased whole loans	—		—		—		—		—		—		—
Other consumer	—		13		38		—		13		—		64
Total	$	1,281,572	$	36,268	$	39,999	$	—	$	17,490	$	—	$	1,375,329

* - At December 31, 2014, Special Mention and Substandard loans included $443,000 and $6 million, respectively, which were removed from PCI accounting in accordance with ASC 310-30-35-13 due to a post-acquisition troubled debt restructuring.

** - The above table excludes all non-classified residential real estate and consumer loans at the respective period ends. The table also excludes most non-classified small C&I and CRE relationships totaling $100,000 or less. These loans are not rated by the Company since they are accruing interest and are not past due 80-days-or-more.

Allowance for Loan and Lease Losses

Activity in the allowance for loan and leases (“Allowance”) follows:

	Three Months Ended						Six Months Months Ended
	June 30,						June 30,
(in thousands)	2015			2014			2015			2014
Allowance, beginning of period	$	24,631		$	22,367		$	24,410		$	23,026
Charge offs - Core Banking	(685		)	(715		)	(1,177		)	(1,627		)
Charge offs - RPG	(21		)	—			(26		)	—
Total charge offs	(706		)	(715		)	(1,203		)	(1,627		)
Recoveries - Core Banking	377			364			715			857
Recoveries - RPG	42			63			237			526
Total recoveries	419			427			952			1,383
Net (charge offs) recoveries - Core Banking	(308		)	(351		)	(462		)	(770		)
Net (charge offs) recoveries - RPG	21			63			211			526
Net (charge offs) recoveries	(287		)	(288		)	(251		)	(244		)
Provision for loan and lease losses (“Provision”) - Core Banking	717			710			1,092			470
Provision - RPG	187			(17		)	(3		)	(480		)
Total Provision	904			693			1,089			(10		)
Allowance, end of period	$	25,248		$	22,772		$	25,248		$	22,772

The Allowance calculation includes the following qualitative factors, which are considered in combination with the Bank’s historical loss rates in determining the general loss reserve within the Allowance:

· Changes in nature, volume and seasoning of the portfolio;

· Changes in experience, ability and depth of lending management and other relevant staff;

· Changes in the quality of the Bank’s credit review system;

· Changes in lending policies and procedures, including changes in underwriting standards and collection, charge-off, and recovery practices not considered elsewhere in estimating credit losses;

· Changes in the volume and severity of past due, non-performing and classified loans and leases;

· Changes in the value of underlying collateral for collateral-dependent loans and leases;

· Changes in international, national, regional, and local economic and business conditions and developments that affect the collectability of portfolios, including the condition of various market segments;

· The existence and effect of any concentrations of credit, and changes in the level of such concentrations; and

· The effect of other external factors such as competition and legal and regulatory requirements on the level of estimated credit losses in the institution’s existing portfolio.

The following tables present the activity in the Allowance by portfolio class for the three months ended June 30, 2015 and 2014:

												Commercial
	Residential Real Estate											Real Estate -							Lease
Three Months Ended	Owner			Owner Occupied-		Non Owner			Commercial			Purchased		Construction &		Commercial &			Financing
June 30, 2015 (in thousands)	Occupied			Correspondent		Occupied			Real Estate			Whole Loans		Land Development		Industrial			Receivables
Beginning balance	$	8,629		$	579	$	920		$	7,553		$	35	$	958	$	1,157		$	40
Provision	(313		)	29		10			353			—		142		52			36
Charge offs	(178		)	—		(29		)	(147		)	—		—		(27		)	—
Recoveries	64			—		3			81			—		—		9			—
Ending balance	$	8,202		$	608	$	904		$	7,840		$	35	$	1,100	$	1,191		$	76

	Warehouse					Consumer
	Lines of		Home			RPG			Credit						Purchased			Other
(continued)	Credit		Equity			Loans			Cards			Overdrafts			Whole Loans			Consumer			Total
Beginning balance	$	1,058	$	2,708		$	44		$	362		$	245		$	184		$	159		$	24,631
Provision	164		56			187			40			57			83			8			904
Charge offs	—		(21		)	(21		)	(31		)	(103		)	(60		)	(89		)	(706		)
Recoveries	—		22			42			28			87			—			83			419
Ending balance	$	1,222	$	2,765		$	252		$	399		$	286		$	207		$	161		$	25,248

												Commercial
	Residential Real Estate											Real Estate -								Lease
Three Months Ended	Owner			Owner Occupied-		Non Owner			Commercial			Purchased		Construction &			Commercial &			Financing
June 30, 2014 (in thousands)	Occupied			Correspondent		Occupied			Real Estate			Whole Loans		Land Development			Industrial			Receivables
Beginning balance	$	7,751		$	—	$	984		$	7,901		$	34	$	1,192		$	1,080		$	—
Provision	460			60		(141		)	(206		)	—		(185		)	70			3
Charge offs	(202		)	—		(7		)	(2		)	—		(1		)	(20		)	—
Recoveries	46			—		3			3			—		84			22			—
Ending balance	$	8,055		$	60	$	839		$	7,696		$	34	$	1,090		$	1,152		$	3

	Warehouse					Consumer
	Lines of		Home			RPG			Credit						Purchased		Other
(continued)	Credit		Equity			Loans			Cards			Overdrafts			Whole Loans		Consumer			Total
Beginning balance	$	477	$	2,371		$	—		$	276		$	212		$	—	$	89		$	22,367
Provision	133		235			(17		)	40			113			—		128			693
Charge offs	—		(217		)	—			(37		)	(142		)	—		(87		)	(715		)
Recoveries	—		14			63			7			97			—		88			427
Ending balance	$	610	$	2,403		$	46		$	286		$	280		$	—	$	218		$	22,772

The following tables present the activity in the Allowance by portfolio class for the six months ended June 30, 2015 and 2014:

												Commercial
	Residential Real Estate											Real Estate -							Lease
Six Months Ended	Owner			Owner Occupied-		Non Owner			Commercial			Purchased		Construction &		Commercial &			Financing
June 30, 2015 (in thousands)	Occupied			Correspondent		Occupied			Real Estate			Whole Loans		Land Development		Industrial			Receivables
Beginning balance	$	8,565		$	567	$	837		$	7,740		$	34	$	926	$	1,167		$	25
Provision	(173		)	41		90			164			1		174		42			51
Charge offs	(314		)	—		(29		)	(154		)	—		—		(56		)	—
Recoveries	124			—		6			90			—		—		38			—
Ending balance	$	8,202		$	608	$	904		$	7,840		$	35	$	1,100	$	1,191		$	76

	Warehouse					Consumer
	Lines of		Home			RPG			Credit						Purchased			Other
(continued)	Credit		Equity			Loans			Cards			Overdrafts			Whole Loans			Consumer			Total
Beginning balance	$	799	$	2,730		$	44		$	285		$	382		$	185		$	124		$	24,410
Provision	423		48			(3		)	144			(22		)	94			15			1,089
Charge offs	—		(72		)	(26		)	(71		)	(249		)	(72		)	(160		)	(1,203		)
Recoveries	—		59			237			41			175			—			182			952
Ending balance	$	1,222	$	2,765		$	252		$	399		$	286		$	207		$	161		$	25,248

												Commercial
	Residential Real Estate											Real Estate -								Lease
Six Months Ended	Owner			Owner Occupied-		Non Owner			Commercial			Purchased		Construction &			Commercial &			Financing
June 30, 2014 (in thousands)	Occupied			Correspondent		Occupied			Real Estate			Whole Loans		Land Development			Industrial			Receivables
Beginning balance	$	7,816		$	—	$	1,023		$	8,309		$	34	$	1,296		$	1,089		$	—
Provision	578			60		(171		)	(384		)	—		(273		)	13			3
Charge offs	(419		)	—		(22		)	(374		)	—		(18		)	(20		)	—
Recoveries	80			—		9			145			—		85			70			—
Ending balance	$	8,055		$	60	$	839		$	7,696		$	34	$	1,090		$	1,152		$	3

	Warehouse					Consumer
	Lines of		Home			RPG			Credit						Purchased		Other
(continued)	Credit		Equity			Loans			Cards			Overdrafts			Whole Loans		Consumer			Total
Beginning balance	$	449	$	2,396		$	—		$	289		$	199		$	—	$	126		$	23,026
Provision	161		235			(480		)	22			160			—		66			(10		)
Charge offs	—		(283		)	—			(42		)	(293		)	—		(156		)	(1,627		)
Recoveries	—		55			526			17			214			—		182			1,383
Ending balance	$	610	$	2,403		$	46		$	286		$	280		$	—	$	218		$	22,772

Non-performing Loans and Non-performing Assets

Detail of non-performing loans and non-performing assets follows:

(dollars in thousands)	June 30, 2015			December 31, 2014
Loans on non-accrual status(1)	$	24,624		$	23,337
Loans past due 90-days-or-more and still on accrual(2)	—			322
Total non-performing loans	24,624			23,659
Other real estate owned	2,920			11,243
Total non-performing assets	$	27,544		$	34,902
Credit Quality Ratios:
Non-performing loans to total loans	0.74		%	0.78		%
Non-performing assets to total loans (including OREO)	0.83		%	1.14		%
Non-performing assets to total assets	0.68		%	0.93		%

(1) Loans on non-accrual status include impaired loans.

(2) All loans past due 90-days-or-more and still accruing are PCI loans accounted for under ASC 310-30.

The following table presents the recorded investment in non-accrual loans and loans past due 90-days-or-more and still on accrual by class of loans:

					Past Due 90-Days-or-More
	Non-Accrual				and Still Accruing Interest*
(dollars in thousands)	June 30, 2015		December 31, 2014		June 30, 2015		December 31, 2014
Residential real estate:
Owner occupied	$	12,972	$	10,903	$	—	$	322
Owner occupied - correspondent	—		—		—		—
Non owner occupied	1,344		2,352		—		—
Commercial real estate	5,878		6,151		—		—
Commercial real estate - purchased whole loans	—		—		—		—
Construction & land development	2,080		1,990		—		—
Commercial & industrial	201		169		—		—
Lease financing receivables	—		—		—		—
Warehouse lines of credit	—		—		—		—
Home equity	2,065		1,678		—		—
Consumer:
RPG loans	—		—		—		—
Credit cards	—		—		—		—
Overdrafts	—		—		—		—
Purchased whole loans	—		—		—		—
Other consumer	84		94		—		—
Total	$	24,624	$	23,337	$	—	$	322

*  - For all periods presented, loans past due 90-days-or-more and still on accrual consist entirely of PCI loans.

Non-accrual loans and loans past due 90-days-or-more and still on accrual include both smaller balance, primarily retail,  homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans. Non-accrual loans are typically returned to accrual status when all the principal and interest amounts contractually due are brought current and held current for six consecutive months and future contractual payments are reasonably assured. Troubled Debt Restructurings (“TDRs”) on non-accrual status are reviewed for return to accrual status on an individual basis, with additional consideration given to performance under the modified terms.

Delinquent Loans

The following tables present the aging of the recorded investment in loans by class of loans:

	30 - 59			60 - 89			90 or More
June 30, 2015	Days			Days			Days			Total			Total Not
(dollars in thousands)	Delinquent			Delinquent			Delinquent*			Delinquent			Delinquent		Total
Residential real estate:
Owner occupied	$	2,173		$	1,551		$	3,803		$	7,527		$	1,092,606	$	1,100,133
Owner occupied - correspondent	—			—			—			—			243,140		243,140
Non owner occupied	—			—			—			—			101,765		101,765
Commercial real estate	20			—			263			283			798,875		799,158
Commercial real estate - purchased whole loans	—			—			—			—			35,277		35,277
Construction & land development	—			—			1,500			1,500			45,538		47,038
Commercial & industrial	—			—			—			—			202,456		202,456
Lease financing receivables	—			—			—			—			7,242		7,242
Warehouse lines of credit	—			—			—			—			488,905		488,905
Home equity	202			183			1,169			1,554			266,016		267,570
Consumer:
RPG loans	113			31			—			144			6,323		6,467
Credit cards	49			17			—			66			10,876		10,942
Overdrafts	154			—			—			154			1,250		1,404
Purchased whole loans	13			17			—			30			3,577		3,607
Other consumer	86			11			—			97			8,776		8,873
Total	$	2,810		$	1,810		$	6,735		$	11,355		$	3,312,622	$	3,323,977
Delinquency ratio**	0.08		%	0.05		%	0.20		%	0.34		%

	30 - 59			60 - 89			90 or More
December 31, 2014	Days			Days			Days			Total			Total Not
(dollars in thousands)	Delinquent			Delinquent			Delinquent*			Delinquent			Delinquent		Total
Residential real estate:
Owner occupied	$	3,039		$	1,329		$	3,640		$	8,008		$	1,110,333	$	1,118,341
Owner occupied - correspondent	—			—			—			—			226,628		226,628
Non owner occupied	36			635			105			776			95,716		96,492
Commercial real estate	585			—			2,387			2,972			769,337		772,309
Commercial real estate - purchased whole loans	—			—			—			—			34,898		34,898
Construction & land development	—			—			1,990			1,990			36,490		38,480
Commercial & industrial	211			—			—			211			157,128		157,339
Lease financing receivables	—			—			—			—			2,530		2,530
Warehouse lines of credit	—			—			—			—			319,431		319,431
Home equity	706			158			498			1,362			244,317		245,679
Consumer:
RPG loans	107			34			—			141			3,954		4,095
Credit cards	124			10			—			134			9,439		9,573
Overdrafts	178			—			—			178			1,002		1,180
Purchased whole loans	12			—			—			12			4,614		4,626
Other consumer	38			29			—			67			8,827		8,894
Total	$	5,036		$	2,195		$	8,620		$	15,851		$	3,024,644	$	3,040,495
Delinquency ratio**	0.17		%	0.07		%	0.28		%	0.52		%

*  - All loans, excluding PCI loans, 90-days-or-more past due as of June 30, 2015 and December 31, 2014 were on non-accrual status.

** - Represents total loans past due by aging category divided by total loans.

Impaired Loans

The Bank defines impaired loans as follows:

· All loans internally rated as “Substandard,” “Doubtful” or “Loss;”

· All loans internally rated in a PCI category with cash flows that have deteriorated from management’s initial acquisition day estimate;

· All loans on non-accrual status and non-PCI loans past due 90 days-or-more still on accrual;

· All retail and commercial TDRs; and

· Any other situation where the full collection of the total amount due for a loan is improbable or otherwise meets the definition of impaired.

See the section titled “Credit Quality Indicators” in this section of the filing for additional discussion regarding the Bank’s loan classification structure.

Information regarding the Bank’s impaired loans follows:

(in thousands)	June 30, 2015		December 31, 2014
Loans with no allocated allowance for loan losses	$	30,772	$	32,560
Loans with allocated allowance for loan losses	45,647		53,620
Total impaired loans	$	76,419	$	86,180
Amount of the allowance for loan losses allocated	$	5,757	$	5,564

Approximately $7 million and $10 million of impaired loans at June 30, 2015 and December 31, 2014 were PCI loans. Approximately $4 million and $6 million of impaired loans at June 30, 2015 and December 31, 2014 were formerly PCI loans which became classified as “Impaired” through a post-acquisition troubled debt restructuring.

The following tables present the balance in the Allowance and the recorded investment in loans by portfolio class based on impairment method as of June 30, 2015 and December 31, 2014:

									Commercial
	Residential Real Estate								Real Estate -						Lease
	Owner		Owner Occupied -		Non Owner		Commercial		Purchased		Construction &		Commercial &		Financing
June 30, 2015 (in thousands)	Occupied		Correspondent		Occupied		Real Estate		Whole Loans		Land Development		Industrial		Receivables
Allowance:
Ending Allowance balance:
Individually evaluated for impairment, excluding PCI loans	$	3,874	$	—	$	129	$	757	$	—	$	166	$	233	$	—
Collectively evaluated for impairment	4,258		608		706		6,849		35		934		818		76
PCI loans with post acquisition impairment	70		—		69		234		—		—		140		—
PCI loans without post acquisition impairment	—		—		—		—		—		—		—		—
Total ending Allowance:	$	8,202	$	608	$	904	$	7,840	$	35	$	1,100	$	1,191	$	76
Loans:
Impaired loans individually evaluated, excluding PCI loans	$	39,845	$	—	$	3,272	$	17,530	$	—	$	2,787	$	3,702	$	—
Loans collectively evaluated for impairment	1,059,362		243,140		97,291		771,349		35,277		44,214		197,518		7,242
PCI loans with post acquisition impairment	398		—		1,083		3,882		—		—		1,167		—
PCI loans without post acquisition impairment	528		—		119		6,397		—		37		69		—
Total ending loan balance	$	1,100,133	$	243,140	$	101,765	$	799,158	$	35,277	$	47,038	$	202,456	$	7,242

	Warehouse				Consumer
	Lines of		Home		RPG		Credit				Purchased		Other
(continued)	Credit		Equity		Loans		Cards		Overdrafts		Whole Loans		Consumer		Total
Allowance:
Ending Allowance balance:
Individually evaluated for impairment, excluding PCI loans	$	—	$	36	$	—	$	—	$	—	$	—	$	49	$	5,244
Collectively evaluated for impairment	1,222		2,729		252		399		286		207		112		19,491
PCI loans with post acquisition impairment	—		—		—		—		—		—		—		513
PCI loans without post acquisition impairment	—		—		—		—		—		—		—		—
Total ending Allowance:	$	1,222	$	2,765	$	252	$	399	$	286	$	207	$	161	$	25,248
Loans:
Impaired loans individually evaluated, excluding PCI loans	$	—	$	2,658	$	—	$	—	$	—	$	—	$	95	$	69,889
Loans collectively evaluated for impairment	488,905		264,912		6,467		10,942		1,404		3,607		8,777		3,240,407
PCI loans with post acquisition impairment	—		—		—		—		—		—		—		6,530
PCI loans without post acquisition impairment	—		—		—		—		—		—		1		7,151
Total ending loan balance	$	488,905	$	267,570	$	6,467	$	10,942	$	1,404	$	3,607	$	8,873	$	3,323,977

									Commercial
	Residential Real Estate								Real Estate -						Lease
	Owner		Owner Occupied -		Non Owner		Commercial		Purchased		Construction &		Commercial &		Financing
December 31, 2014 (in thousands)	Occupied		Correspondent		Occupied		Real Estate		Whole Loans		Land Development		Industrial		Receivables
Allowance:
Ending Allowance balance:
Individually evaluated for impairment, excluding PCI loans	$	3,251	$	—	$	101	$	913	$	—	$	187	$	302	$	—
Collectively evaluated for impairment	5,264		567		672		6,462		34		739		800		25
PCI loans with post acquisition impairment	50		—		64		365		—		—		65		—
PCI loans without post acquisition impairment	—		—		—		—		—		—		—		—
Total ending Allowance:	$	8,565	$	567	$	837	$	7,740	$	34	$	926	$	1,167	$	25
Loans:
Impaired loans individually evaluated, excluding PCI loans	$	41,265	$	—	$	3,388	$	22,521	$	—	$	2,627	$	4,319	$	—
Loans collectively evaluated for impairment	1,075,871		226,628		91,395		736,965		34,898		35,357		151,776		2,530
PCI loans with post acquisition impairment	725		—		1,554		6,341		—		—		1,158		—
PCI loans without post acquisition impairment	480		—		155		6,482		—		496		86		—
Total ending loan balance	$	1,118,341	$	226,628	$	96,492	$	772,309	$	34,898	$	38,480	$	157,339	$	2,530

	Warehouse				Consumer
	Lines of		Home		RPG		Credit				Purchased		Other
(continued)	Credit		Equity		Loans		Cards		Overdrafts		Whole Loans		Consumer		Total
Allowance:
Ending Allowance balance:
Individually evaluated for impairment, excluding PCI loans	$	—	$	225	$	—	$	—	$	—	$	—	$	40	$	5,019
Collectively evaluated for impairment	799		2,505		44		285		382		185		83		18,846
PCI loans with post acquisition impairment	—		—		—		—		—		—		1		545
PCI loans without post acquisition impairment	—		—		—		—		—		—		—		—
Total ending Allowance:	$	799	$	2,730	$	44	$	285	$	382	$	185	$	124	$	24,410
Loans:
Impaired loans individually evaluated, excluding PCI loans	$	—	$	2,220	$	—	$	—	$	—	$	—	$	52	$	76,392
Loans collectively evaluated for impairment	319,431		243,459		4,095		9,573		1,180		4,626		8,829		2,946,613
PCI loans with post acquisition impairment	—		—		—		—		—		—		10		9,788
PCI loans without post acquisition impairment	—		—		—		—		—		—		3		7,702
Total ending loan balance	$	319,431	$	245,679	$	4,095	$	9,573	$	1,180	$	4,626	$	8,894	$	3,040,495

The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2015 and December 31, 2014 and for the three and six months ended June 30, 2015 and 2014. The difference between the “Unpaid Principal Balance” and “Recorded Investment” columns represents life-to-date partial write downs/charge offs taken on individual impaired credits.

	As of						Three Months Ended						Six Months Ended
	June 30, 2015						June 30, 2015						June 30, 2015
											Cash Basis						Cash Basis
	Unpaid						Average		Interest		Interest		Average		Interest		Interest
	Principal		Recorded		Allowance		Recorded		Income		Income		Recorded		Income		Income
(in thousands)	Balance		Investment		Allocated		Investment		Recognized		Recognized		Investment		Recognized		Recognized
Impaired loans with no related allowance recorded:
Residential real estate:
Owner occupied	$	13,604	$	12,738	$	—	$	9,152	$	192	$	—	$	7,769	$	387	$	—
Owner occupied - correspondent	—		—		—		—		—		—		—		—		—
Non owner occupied	2,520		2,399		—		2,494		45		—		2,268		90		—
Commercial real estate	10,157		9,403		—		11,697		136		—		14,039		277		—
Commercial real estate - purchased whole loans	—		—		—		—		—		—		—		—		—
Construction & land development	2,120		2,120		—		2,122		33		—		2,138		67		—
Commercial & industrial	1,559		1,559		—		2,589		25		—		3,251		51		—
Lease financing receivables	—		—		—		—		—		—		—		—		—
Warehouse lines of credit	—		—		—		—		—		—		—		—		—
Home equity	2,788		2,515		—		2,285		41		—		2,030		83		—
Consumer:
RPG loans	—		—		—		—		—		—		—		—		—
Credit cards	—		—		—		—		—		—		—		—		—
Overdrafts	—		—		—		—		—		—		—		—		—
Purchased whole loans	—		—		—		—		—		—		—		—		—
Other consumer	38		38		—		19		1		—		19		2		—
Impaired loans with an allowance recorded:
Residential real estate:
Owner occupied	27,646		27,505		3,944		31,677		243		—		33,436		487		—
Owner occupied - correspondent	—		—		—		—		—		—		—		—		—
Non owner occupied	1,956		1,956		198		2,435		24		—		3,007		48		—
Commercial real estate	12,051		12,009		991		11,804		143		—		13,085		287		—
Commercial real estate - purchased whole loans	—		—		—		—		—		—		—		—		—
Construction & land development	667		667		166		673		10		—		580		20		—
Commercial & industrial	3,310		3,310		373		2,331		50		—		1,890		101		—
Lease financing receivables	—		—		—		—		—		—		—		—		—
Warehouse lines of credit	—		—		—		—		—		—		—		—		—
Home equity	147		143		36		389		2		—		419		4		—
Consumer:
RPG loans	—		—		—		—		—		—		—		—		—
Credit cards	—		—		—		—		—		—		—		—		—
Overdrafts	—		—		—		—		—		—		—		—		—
Purchased whole loans	—		—		—		—		—		—		—		—		—
Other consumer	57		57		49		51		—		—		59		—		—
Total impaired loans	$	78,620	$	76,419	$	5,757	$	79,718	$	945	$	—	$	83,990	$	1,904	$	—

	As of						Three Months Ended						Six Months Ended
	December 31, 2014						June 30, 2014						June 30, 2014
											Cash Basis						Cash Basis
	Unpaid						Average		Interest		Interest		Average		Interest		Interest
	Principal		Recorded		Allowance		Recorded		Income		Income		Recorded		Income		Income
(in thousands)	Balance		Investment		Allocated		Investment		Recognized		Recognized		Investment		Recognized		Recognized
Impaired loans with no related allowance recorded:
Residential real estate:
Owner occupied	$	6,598	$	6,196	$	—	$	7,104	$	78	$	—	$	6,925	$	125	$	—
Owner occupied - correspondent	—		—		—		—		—		—		—		—		—
Non owner occupied	2,368		2,215		—		1,474		15		—		1,401		25		—
Commercial real estate	17,282		16,248		—		17,236		150		—		18,475		290		—
Commercial real estate - purchased whole loans	—		—		—		—		—		—		—		—		—
Construction & land development	2,144		2,144		—		2,081		1		—		2,083		2		—
Commercial & industrial	3,943		3,943		—		4,181		61		—		4,206		121		—
Lease financing receivables	—		—		—		—		—		—		—		—		—
Warehouse lines of credit	—		—		—		—		—		—		—		—		—
Home equity	1,969		1,814		—		1,903		11		—		1,794		21		—
Consumer:
RPG loans	—		—		—		—		—		—		—		—		—
Credit cards	—		—		—		—		—		—		—		—		—
Overdrafts	—		—		—		—		—		—		—		—		—
Purchased whole loans	—		—		—		—		—		—		—		—		—
Other consumer	—		—		—		—		—		—		6		—		—
Impaired loans with an allowance recorded:
Residential real estate:
Owner occupied	36,361		35,794		3,301		35,048		253		—		34,731		493		—
Owner occupied - correspondent	—		—		—		—		—		—		—		—		—
Non owner occupied	2,755		2,727		165		5,791		122		—		6,123		175		—
Commercial real estate	12,653		12,614		1,278		19,078		207		—		21,744		374		—
Commercial real estate - purchased whole loans	—		—		—		—		—		—		—		—		—
Construction & land development	483		483		187		508		6		—		563		11		—
Commercial & industrial	1,534		1,534		367		1,540		58		—		1,651		60		—
Lease financing receivables	—		—		—		—		—		—		—		—		—
Warehouse lines of credit	—		—		—		—		—		—		—		—		—
Home equity	452		406		225		586		—		—		620		—		—
Consumer:
RPG loans	—		—		—		—		—		—		—		—		—
Credit cards	—		—		—		—		—		—		—		—		—
Overdrafts	—		—		—		—		—		—		—		—		—
Purchased whole loans	—		—		—		—		—		—		—		—		—
Other consumer	62		62		41		79		—		—		79		1		—
Total impaired loans	$	88,604	$	86,180	$	5,564	$	96,609	$	962	$	—	$	100,401	$	1,698	$	—

Troubled Debt Restructurings

A TDR is the situation where, due to a borrower’s financial difficulties, the Bank grants a concession to the borrower that the Bank would not otherwise have considered. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s internal underwriting policy.

All TDRs are considered “Impaired,” including PCI loans subsequently restructured. The majority of the Bank’s commercial related and construction TDRs involve a restructuring of financing terms such as a reduction in the payment amount to require only interest and escrow (if required) and/or extending the maturity date of the debt. The substantial majority of the Bank’s residential real estate TDR concessions involve reducing the client’s loan payment through a rate reduction for a set period of time based on the borrower’s ability to service the modified loan payment. Retail loans may also be classified as TDRs due to legal modifications, such as bankruptcies.

Non-accrual loans modified as TDRs typically remain on non-accrual status and continue to be reported as non-performing loans for a minimum of six months. Accruing loans modified as TDRs are evaluated for non-accrual status based on a current evaluation of the borrower’s financial condition and ability and willingness to service the modified debt. At June 30, 2015 and December 31, 2014, $16 million and $14 million of TDRs were on non-accrual status.

Detail of TDRs differentiated by loan type and accrual status follows:

	Troubled Debt			Troubled Debt			Total
	Restructurings on			Restructurings on			Troubled Debt
	Non-Accrual Status			Accrual Status			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
June 30, 2015 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate	81	$	8,043	233	$	29,467	314	$	37,510
Commercial real estate	10	5,567		22	11,437		32	17,004
Construction & land development	3	2,080		6	706		9	2,786
Commercial & industrial	1	201		9	3,501		10	3,702
Total troubled debt restructurings	95	$	15,891	270	$	45,111	365	$	61,002

	Troubled Debt			Troubled Debt			Total
	Restructurings on			Restructurings on			Troubled Debt
	Non-Accrual Status			Accrual Status			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2014 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate	74	$	7,166	250	$	31,966	324	$	39,132
Commercial real estate	8	5,030		30	14,502		38	19,532
Construction & land development	2	1,990		6	637		8	2,627
Commercial & industrial	—	—		8	3,975		8	3,975
Total troubled debt restructurings	84	$	14,186	294	$	51,080	378	$	65,266

The Bank considers a TDR to be performing to its modified terms if the loan is in accrual status and not past due 30 days or more as of the reporting date. A summary of the categories of TDR loan modifications outstanding and respective performance under modified terms at June 30, 2015 and December 31, 2014 follows:

	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
June 30, 2015 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate loans (including home equity loans):
Interest only payments	2	$	637	5	$	415	7	$	1,052
Rate reduction	183	24,911		44	5,729		227	30,640
Principal deferral	10	843		7	789		17	1,632
Legal modifications	31	2,598		32	1,588		63	4,186
Total residential TDRs	226	28,989		88	8,521		314	37,510
Commercial related and construction/land development loans:
Interest only payments	9	3,189		2	876		11	4,065
Rate reduction	13	6,664		5	2,564		18	9,228
Principal deferral	15	5,791		7	4,408		22	10,199
Total commercial TDRs	37	15,644		14	7,848		51	23,492
Total troubled debt restructurings	263	$	44,633	102	$	16,369	365	$	61,002

	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
December 31, 2014 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate loans (including home equity loans):
Interest only payments	2	$	218	4	$	389	6	$	607
Rate reduction	173	25,080		61	7,376		234	32,456
Principal deferral	12	1,408		5	349		17	1,757
Legal modifications	33	2,675		34	1,637		67	4,312
Total residential TDRs	220	29,381		104	9,751		324	39,132
Commercial related and construction/land development loans:
Interest only payments	10	4,170		2	926		12	5,096
Rate reduction	19	9,043		3	1,915		22	10,958
Principal deferral	14	5,820		6	4,260		20	10,080
Total commercial TDRs	43	19,033		11	7,101		54	26,134
Total troubled debt restructurings	263	$	48,414	115	$	16,852	378	$	65,266

As of June 30, 2015 and December 31, 2014, 73% and 74% of the Bank’s TDRs were performing according to their modified terms. The Bank had provided $5 million and $4 million of specific reserve allocations to customers whose loan terms have been modified in TDRs as of June 30, 2015 and December 31, 2014. Specific reserve allocations are generally assessed prior to loans being modified as a TDR, as most of these loans migrate from the Bank’s internal “watch list” and have been specifically provided for or reserved for as part of the Bank’s normal loan and lease provisioning methodology. The Bank has not committed to lend any additional material amounts to its existing TDR relationships at June 30, 2015 or December 31, 2014.

A summary of the categories of TDR loan modifications and respective performance as of June 30, 2015 and 2014 that were modified during the three months ended June 30, 2015 and 2014 follows:

	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
June 30, 2015 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate loans (including home equity loans):
Rate reduction	—	$	—	2	$	308	2	$	308
Principal deferral	—	—		1	24		1	24
Legal modifications	—	—		2	55		2	55
Total residential TDRs	—	—		5	387		5	387
Commercial related and construction/land development loans:
Interest only payments	1	92		—	—		1	92
Rate reduction	2	833		1	57		3	890
Principal deferral	4	884		1	201		5	1,085
Total commercial TDRs	7	1,809		2	258		9	2,067
Total troubled debt restructurings	7	$	1,809	7	$	645	14	$	2,454

	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
June 30, 2014 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate loans (including home equity loans):
Rate reduction	3	$	194	4	$	351	7	$	545
Principal deferral	3	360		1	30		4	390
Legal modifications	4	160		3	95		7	255
Total residential TDRs	10	714		8	476		18	1,190
Commercial related and construction/land development loans:
Interest only payments	—	—		1	443		1	443
Total commercial TDRs	—	—		1	443		1	443
Total troubled debt restructurings	10	$	714	9	$	919	19	$	1,633

As of June 30, 2015 and 2014, 74% and 44% of the Bank’s TDRs that occurred during the second quarters of 2015 and 2014 were performing according to their modified terms. The Bank provided $221,000 and $54,000 in specific reserve allocations to customers whose loan terms were modified in TDRs during the second quarters of 2015 and 2014. As stated above, specific reserves are generally assessed prior to loans being modified as a TDR, as most of these loans migrate from the Bank’s internal watch list and have been specifically reserved for as part of the Bank’s normal reserving methodology.

There were no significant changes between the pre and post modification loan balances for the three months ending June 30, 2015 and June 30, 2014.

A summary of the categories of TDR loan modifications and respective performance as of June 30, 2015 and 2014 that were modified during the six months ended June 30, 2015 and 2014 follows:

	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
June 30, 2015 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate loans (including home equity loans):
Interest only payments	1	$	622	—	$	—	1	$	622
Rate reduction	4	403		5	465		9	868
Principal deferral	—	—		2	48		2	48
Legal modifications	—	—		5	290		5	290
Total residential TDRs	5	1,025		12	803		17	1,828
Commercial related and construction/land development loans:
Interest only payments	3	467		—	—		3	467
Rate reduction	2	833		2	1,825		4	2,658
Principal deferral	6	884		1	201		7	1,085
Total commercial TDRs	11	2,184		3	2,026		14	4,210
Total troubled debt restructurings	16	$	3,209	15	$	2,829	31	$	6,038

	Troubled Debt			Troubled Debt
	Restructurings			Restructurings			Total
	Performing to			Not Performing to			Troubled Debt
	Modified Terms			Modified Terms			Restructurings
	Number of	Recorded		Number of	Recorded		Number of	Recorded
June 30, 2014 (dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate loans (including home equity loans):
Rate reduction	13	$	1,042	7	$	1,470	20	$	2,512
Principal deferral	3	360		1	30		4	390
Legal modifications	22	2,192		11	677		33	2,869
Total residential TDRs	38	3,594		19	2,177		57	5,771
Commercial related and construction/land development loans:
Interest only payments	—	—		1	443		1	443
Rate reduction	—	—		1	1,103		1	1,103
Principal deferral	—	—		2	1,990		2	1,990
Total commercial TDRs	—	—		4	3,536		4	3,536
Total troubled debt restructurings	38	$	3,594	23	$	5,713	61	$	9,307

As of June 30, 2015 and 2014, 53% and 39% of the Bank’s TDRs that occurred during the first six months of 2015 and 2014 were performing according to their modified terms. The Bank provided $635,000 and $142,000 in specific reserve allocations to customers whose loan terms were modified in TDRs during the first six months of 2015 and 2014. As stated above, specific reserves are generally assessed prior to loans being modified as a TDR, as most of these loans migrate from the Bank’s internal watch list and have been specifically reserved for as part of the Bank’s normal reserving methodology.

There were no significant changes between the pre and post modification loan balances for the six months ending June 30, 2015 and June 30, 2014.

The following table presents loans by class modified as troubled debt restructurings within the previous twelve months of June 30, 2015 and 2014 and for which there was a payment default during the three and six months ended June 30, 2015 and 2014:

	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2015			2014			2015			2014
	Number of	Recorded		Number of	Recorded		Number of	Recorded		Number of	Recorded
(dollars in thousands)	Loans	Investment		Loans	Investment		Loans	Investment		Loans	Investment
Residential real estate:
Owner occupied	6	$	432	3	$	149	11	$	753	6	$	1,219
Owner occupied - correspondent	—	—		—	—		—	—		—	—
Non owner occupied	—	—		—	—		—	—		—	—
Commercial real estate	—	—		1	443		—	—		2	1,546
Commercial real estate - purchased whole loans	—	—		—	—		—	—		—	—
Construction & land development	—	—		—	—		—	—		1	1,500
Commercial & industrial	—	—		—	—		—	—		—	—
Lease financing receivables	—	—		—	—		—	—		—	—
Warehouse lines of credit	—	—			—		—	—			—
Home equity	—	—		—	—		—	—		—	—
Consumer:
RPG loans	—	—		—	—		—	—		—	—
Credit cards	—	—		—	—		—	—		—	—
Overdrafts	—	—		—	—		—	—		—	—
Purchased whole loans	—	—		—	—		—	—		—	—
Other consumer	—	—		—	—		—	—		—	—
Total	6	$	432	4	$	592	11	$	753	9	$	4,265

The following table presents the carrying amount of foreclosed properties held at June 30, 2015 and December 31, 2014 as a result of the Bank obtaining physical possession of such properties:

(in thousands)	June 30, 2015		December 31, 2014
Residential real estate	$	405	$	3,209
Commercial real estate	1,765		3,324
Construction & land development	750		4,710
Total other real estate owned	$	2,920	$	11,243

The following table presents the recorded investment in consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction as of June 30, 2015 and December 31, 2014:

(in thousands)	June 30, 2015		December 31, 2014
Recorded investment in consumer residential real estate mortgage loans in the process of foreclosure	$	3,453	$	2,466