Quarterly report pursuant to Section 13 or 15(d)

Loans

v3.2.0.727
Loans
 6 Months Ended
Jun. 30, 2015
Receivables [Abstract]  
Loans
Loans

The loan portfolio includes originated and purchased loans. Loans are originated by the Company with the intent to hold them for investment and are stated at the principal amount outstanding, net of unearned income. Unearned income includes deferred unamortized nonrefundable loan fees and direct loan origination costs. Net deferred fees or costs are recognized as an adjustment to interest income over the contractual life of the loans using the effective interest method or taken into income when the related loans are paid off or sold. The amortization of loan fees or costs is discontinued when a loan is placed on nonaccrual status. Interest income is recorded on an accrual basis in accordance with the terms of the respective loan and includes prepayment penalties.

Purchased loans, which are loans we have acquired through our acquisition of other banks or purchased from other institutions, are stated at the principal amount outstanding, net of unearned discounts or unamortized premiums. All loans acquired in acquisitions are initially measured and recorded at their fair value on the acquisition date. A component of the initial fair value measurement is an estimate of the credit losses over the life of the purchased loans. Purchased loans are also evaluated for impairment as of the acquisition date and are accounted for as "acquired non-impaired" or "purchased credit impaired" loans.

Purchased non-impaired loans are those loans for which there was no evidence of credit deterioration at their acquisition date and it was probable that we would be able to collect all contractually required payments. Purchased non-impaired loans, together with originated loans, are referred to as non-purchased credit impaired ("Non-PCI") loans. Purchase discounts or premiums on Non-PCI loans is recognized as an adjustment to interest income over the contractual life of such loans using the effective interest method or taken into income when the related loans are paid off or sold.

Purchased credit impaired ("PCI") loans are accounted for in accordance with ASC Subtopic 310-30, "Loans and Debt Securities Acquired with Deteriorated Credit Quality." A purchased loan is deemed to be credit impaired when there is evidence of credit deterioration since its origination and it is probable at the acquisition date that we would be unable to collect all contractually required payments. We apply PCI loan accounting when we acquire loans deemed to be impaired.

For PCI loans, at the time of acquisition we (i) calculated the contractual amount and timing of undiscounted principal and interest payments (the "undiscounted contractual cash flows") and (ii) estimated the amount and timing of undiscounted expected principal and interest payments (the "undiscounted expected cash flows"). The difference between the undiscounted contractual cash flows and the undiscounted expected cash flows is the nonaccretable difference. The nonaccretable difference represents an estimate of the loss exposure of principal and interest related to the PCI loan portfolios; such amount is subject to change over time based on the performance of such loans. The carrying value of PCI loans is reduced by payments received, both principal and interest, and increased by the portion of the accretable yield recognized as interest income.

The excess of expected cash flows at acquisition over the initial fair value of acquired impaired loans is referred to as the "accretable yield" and is recorded as interest income over the estimated life of the loans using the effective yield. If estimated cash flows are indeterminable, the recognition of interest income will cease to be recognized.

At acquisition, the Company may aggregate PCI loans into pools having common credit risk characteristics such as product type, geographic location and risk rating. Increases in expected cash flows over those previously estimated increase the accretable yield and are recognized as interest income prospectively. Decreases in the amount and changes in the timing of expected cash flows compared to those previously estimated decrease the accretable yield and usually result in a provision for loan losses and the establishment of an allowance for loan losses. As the accretable yield increases or decreases from changes in cash flow expectations, the offset is a decrease or increase to the nonaccretable difference. The accretable yield is measured at each financial reporting date based on information then currently available and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans.

The Board of Directors and management review and approve the Bank’s loan policy and procedures on a regular basis to reflect issues such as regulatory and organizational structure changes, strategic planning revisions, concentrations of credit, loan delinquencies and nonperforming loans, problem loans, and policy adjustments.

Real estate loans are loans secured by liens or interest in real estate, to provide purchase, construction, and refinance on real estate properties. Commercial and industrial loans consist of commercial term loans, commercial lines of credit, and Small Business Administration (“SBA”) loans. Consumer loans consist of auto loans, personal loans, and home equity lines of credit. We maintain management loan review and monitoring departments that review and monitor pass graded loans as well as problem loans to prevent further deterioration.

The majority of the Bank’s loan portfolio consists of commercial real estate, and commercial and industrial loans. The Bank has been diversifying and monitoring commercial real estate loans based on property types, tightening underwriting standards and portfolio liquidity and management, and has not exceeded certain specified limits set forth in the Bank’s loan policy.

Loans receivable consisted of the following as of the dates indicated:
 
June 30, 2015
 
December 31, 2014
 
Non-PCI Loans
 
PCI Loans
 
Total
 
Non-PCI Loans
 
PCI Loans
 
Total
 
(in thousands)
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial property (1)
 
 
 
 
 
 
 
 
 
 
 
Retail
$
690,097

 
$
9,358

 
$
699,455

 
$
675,072

 
$
10,343

 
$
685,415

Hospitality
492,289

 
10,345

 
502,634

 
454,499

 
12,862

 
467,361

Gas station
337,566

 
5,955

 
343,521

 
362,240

 
7,745

 
369,985

Other
840,735

 
5,885

 
846,620

 
842,126

 
10,680

 
852,806

Construction
21,310

 
—

 
21,310

 
9,517

 
—

 
9,517

Residential property
171,071

 
2,055

 
173,126

 
120,932

 
2,499

 
123,431

Total real estate loans
2,553,068

 
33,598

 
2,586,666

 
2,464,386

 
44,129

 
2,508,515

Commercial and industrial loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial term
111,676

 
267

 
111,943

 
116,073

 
327

 
116,400

Commercial lines of credit
115,382

 
—

 
115,382

 
93,860

 
—

 
93,860

International loans
33,864

 
—

 
33,864

 
38,929

 
—

 
38,929

Total commercial and industrial loans
260,922

 
267

 
261,189

 
248,862

 
327

 
249,189

Consumer loans
26,274

 
43

 
26,317

 
27,512

 
45

 
27,557

Total gross loans
2,840,264

 
33,908

 
2,874,172

 
2,740,760

 
44,501

 
2,785,261

Allowance for loans losses
(49,468
)
 
(1,352
)
 
(50,820
)
 
(51,640
)
 
(1,026
)
 
(52,666
)
Deferred loan costs
2,734

 
—

 
2,734

 
3,237

 
—

 
3,237

Loans receivable, net
$
2,793,530

 
$
32,556

 
$
2,826,086

 
$
2,692,357

 
$
43,475

 
$
2,735,832

 
(1) 
Includes owner-occupied property loans of $1.16 billion and $1.12 billion as of June 30, 2015 and December 31, 2014, respectively.

Accrued interest on loans receivable was $6.1 million and $6.4 million at June 30, 2015 and December 31, 2014, respectively. At June 30, 2015 and December 31, 2014, loans receivable totaling $735.2 million and $840.0 million respectively, were pledged to secure advances from the FHLB and the FBR discount window.

The following table details the information on the sales and reclassifications of loans receivable to loans held for sale (excluding PCI loans) by portfolio segment for the three months ended June 30, 2015 and 2014:
 
Real Estate
 
Commercial and Industrial
 
Consumer
 
Total Non-PCI
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
Balance at beginning of period
$
7,226

 
$
1,451

 
$
—

 
$
8,677

Origination of loans held for sale
6,807

 
8,027

 
—

 
14,834

Reclassification from loans receivable to loans held for sale
360

 
—

 
—

 
360

Sales of loans held for sale
(12,321
)
 
(7,368
)
 
—

 
(19,689
)
Principal payoffs and amortization
(5
)
 
(19
)
 
—

 
(24
)
Balance at end of period
$
2,067

 
$
2,091

 
$
—

 
$
4,158

June 30, 2014
 
 
 
 
 
 
 
Balance at beginning of period
$
390

 
$
—

 
$
—

 
$
390

Origination of loans held for sale
8,124

 
2,091

 
—

 
10,215

Sales of loans held for sale
(5,944
)
 
(815
)
 
—

 
(6,759
)
Principal payoffs and amortization
(2
)
 
(2
)
 
—

 
(4
)
Balance at end of period
$
2,568

 
$
1,274

 
$
—

 
$
3,842



For the three months ended June 30, 2015, a Non-PCI loan receivable of $360,000 was reclassified as loans held for sale and Non-PCI loans held for sale of $19.7 million were sold. In addition, there was no reclassification from Non-PCI loans held for sale to Non-PCI loans receivable for the three months ended June 30, 2015. For the three months ended June 30, 2014, there was no reclassification of Non-PCI loans receivable as Non-PCI loans held for sale and Non-PCI loans held for sale of $6.8 million were sold. In addition, there was no reclassification from Non-PCI loans held for sale to Non-PCI loans receivable for the three months ended June 30, 2014.

The following table details the information on the sales and reclassifications of loans receivable to loans held for sale (excluding PCI loans) by portfolio segment for the six months ended June 30, 2015 and 2014:
 
Real Estate
 
Commercial and Industrial
 
Consumer
 
Total Non-PCI
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
Balance at beginning of period
$
3,323

 
$
2,128

 
$
—

 
$
5,451

Origination of loans held for sale
23,734

 
14,208

 
—

 
37,942

Reclassification from loans receivable to loans held for sale
360

 
—

 
—

 
360

Sales of loans held for sale
(25,335
)
 
(14,208
)
 
—

 
(39,543
)
Principal payoffs and amortization
(15
)
 
(37
)
 
—

 
(52
)
Balance at end of period
$
2,067

 
$
2,091

 
$
—

 
$
4,158

June 30, 2014
 
 
 
 
 
 
 
Balance at beginning of period
$
—

 
$
—

 
$
—

 
$
—

Origination of loans held for sale
14,393

 
2,176

 
—

 
16,569

Sales of loans held for sale
(11,818
)
 
(899
)
 
—

 
(12,717
)
Principal payoffs and amortization
(7
)
 
(3
)
 
—

 
(10
)
Balance at end of period
$
2,568

 
$
1,274

 
$
—

 
$
3,842



For the six months ended June 30, 2015, a Non-PCI loan receivable of $360,000 was reclassified as loans held for sale and Non-PCI loans held for sale of $39.5 million were sold. In addition, there was no reclassification from Non-PCI loans held for sale to Non-PCI loans receivable for the six months ended June 30, 2015. For the six months ended June 30, 2014, there was no reclassification of Non-PCI loans receivable as Non-PCI loans held for sale, and Non-PCI loans held for sale of $12.7 million were sold. In addition, there was no reclassification from Non-PCI loans held for sale to Non-PCI loans receivable for the six months ended June 30, 2014.

Activity in the allowance for loan losses and allowance for off-balance sheet items was as follows for the periods indicated:
 
As of and for the
Three Months Ended
 
As of and for the
Six Months Ended
 
June 30, 2015
 
June 30, 2014
 
June 30, 2015
 
June 30, 2014
 
Non-PCI Loans
 
PCI Loans
 
Total
 
 
Non-PCI Loans
 
PCI Loans
 
Total
 
 
(in thousands)
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
51,515

 
$
1,436

 
$
52,951

 
$
56,593

 
$
51,640

 
$
1,026

 
$
52,666

 
$
57,555

Charge-offs
(1,221
)
 
52

 
(1,169
)
 
(2,547
)
 
(1,255
)
 
—

 
(1,255
)
 
(4,151
)
Recoveries on loans previously charged off
1,793

 
(352
)
 
1,441

 
1,741

 
3,485

 
—

 
3,485

 
5,992

Net loan recoveries (charge-offs)
572

 
(300
)
 
272

 
(806
)
 
2,230

 
—

 
2,230

 
1,841

(Negative provision) provision charged to operating expense
(2,619
)
 
216

 
(2,403
)
 
(3,901
)
 
(4,402
)
 
$
326

 
(4,076
)
 
(7,510
)
Balance at end of period
$
49,468

 
$
1,352

 
$
50,820

 
$
51,886

 
$
49,468

 
$
1,352

 
$
50,820

 
$
51,886

Allowance for off-balance sheet items:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance at beginning of period
$
1,054

 
$
—

 
$
1,054

 
$
1,557

 
$
1,366

 
$
—

 
$
1,366

 
$
1,248

(Negative provision) provision charged to operating expense
(92
)
 
—

 
(92
)
 
35

 
(404
)
 
$
—

 
(404
)
 
344

Balance at end of period
$
962

 
$
—

 
$
962

 
$
1,592

 
$
962

 
$
—

 
$
962

 
$
1,592



The allowance for off-balance sheet items is maintained at a level believed to be sufficient to absorb probable losses related to these unfunded credit facilities. The determination of the allowance adequacy is based on periodic evaluations of the unfunded credit facilities including an assessment of the probability of commitment usage, credit risk factors for loans outstanding to these same customers, and the terms and expiration dates of the unfunded credit facilities. As of June 30, 2015 and 2014, the allowance for off-balance sheet items amounted to $1.0 million and $1.6 million, respectively. Net adjustments to the allowance for off-balance sheet items are included in the provision for loan losses.

The following table details the information on the allowance for loan losses by portfolio segment for the three months ended June 30, 2015 and 2014:
 
Real Estate
 
Commercial and Industrial
 
Consumer
 
Unallocated
 
Total
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
Beginning balance
$
42,550

 
$
7,786

 
$
185

 
$
994

 
$
51,515

Charge-offs
(101
)
 
(1,120
)
 
—

 
—

 
(1,221
)
Recoveries on loans previously charged off
1,263

 
530

 
—

 
—

 
1,793

(Negative provision) provision
(3,814
)
 
1,049

 
(13
)
 
159

 
(2,619
)
Ending balance
$
39,898

 
$
8,245

 
$
172

 
$
1,153

 
$
49,468

Ending balance: individually evaluated for impairment
$
3,798

 
$
1,503

 
$
—

 
$
—

 
$
5,301

Ending balance: collectively evaluated for impairment
$
36,100

 
$
6,742

 
$
172

 
$
1,153

 
$
44,167

Loans receivable:
 
 
 
 
 
 
 
 
 
Ending balance
$
2,553,068

 
$
260,922

 
$
26,274

 
$
—

 
$
2,840,264

Ending balance: individually evaluated for impairment
$
32,795

 
$
10,401

 
$
1,807

 
$
—

 
$
45,003

Ending balance: collectively evaluated for impairment
$
2,520,273

 
$
250,521

 
$
24,467

 
$
—

 
$
2,795,261

Allowance for loan losses on PCI loans:
 
 
 
 
 
 
 
 
 
Beginning balance
$
1,318

 
$
118

 
$
—

 
$
—

 
$
1,436

Charge-offs
52

 
—

 
—

 
—

 
52

Recoveries on loans previously charged off
$
—

 
(352
)
 
—

 
—

 
(352
)
Provision
(81
)
 
297

 
—

 
—

 
216

Ending balance: acquired with deteriorated credit quality
$
1,289

 
$
63

 
$
—

 
$
—

 
$
1,352

PCI loans receivable:
 
 
 
 
 
 
 
 
 
Ending balance: acquired with deteriorated credit quality
$
33,598

 
$
267

 
$
43

 
$
—

 
$
33,908

June 30, 2014
 
 
 
 
 
 
 
 
 
Allowance for loan losses on Non-PCI loans:
 
 
 
 
 
 
 
 
 
Beginning balance
$
44,230

 
$
10,425

 
$
633

 
$
1,305

 
$
56,593

Charge-offs
(60
)
 
(2,474
)
 
(13
)
 
—

 
(2,547
)
Recoveries on loans previously charged off
87

 
1,652

 
2

 
—

 
1,741

(Negative provision) provision
(3,954
)
 
135

 
(82
)
 
—

 
(3,901
)
Ending balance
$
40,303

 
$
9,738

 
$
540

 
$
1,305

 
$
51,886

Ending balance: individually evaluated for impairment
$
2,448

 
$
2,605

 
$
113

 
$
—

 
$
5,166

Ending balance: collectively evaluated for impairment
$
37,855

 
$
7,133

 
$
427

 
$
1,305

 
$
46,720

Non-PCI loans receivable:
 
 
 
 
 
 
 
 
 
Ending balance
$
2,090,083

 
$
230,309

 
$
28,843

 
$
—

 
$
2,349,235

Ending balance: individually evaluated for impairment
$
35,616

 
$
10,741

 
$
1,529

 
$
—

 
$
47,886

Ending balance: collectively evaluated for impairment
$
2,054,467

 
$
219,568

 
$
27,314

 
$
—

 
$
2,301,349


The following table details the information on the allowance for loan losses by portfolio segment for the six months ended June 30, 2015 and 2014:
 
Real Estate
 
Commercial and Industrial
 
Consumer
 
Unallocated
 
Total
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
Allowance for loan losses:
 
 
 
 
 
 
 
 
 
Beginning balance
$
41,194

 
$
9,142

 
$
220

 
$
1,084

 
$
51,640

Charge-offs
(101
)
 
(1,154
)
 
—

 
—

 
(1,255
)
Recoveries on loans previously charged off
1,295

 
2,190

 
—

 
—

 
3,485

(Negative provision) provision
(2,490
)
 
(1,933
)
 
(48
)
 
69

 
(4,402
)
Ending balance
$
39,898

 
$
8,245

 
$
172

 
$
1,153

 
$
49,468

Ending balance: individually evaluated for impairment
$
3,798

 
$
1,503

 
$
—

 
$
—

 
$
5,301

Ending balance: collectively evaluated for impairment
$
36,100

 
$
6,742

 
$
172

 
$
1,153

 
$
44,167

Loans receivable:
 
 
 
 
 
 
 
 
 
Ending balance
$
2,553,068

 
$
260,922

 
$
26,274

 
$
—

 
$
2,840,264

Ending balance: individually evaluated for impairment
$
32,795

 
$
10,401

 
$
1,807

 
$
—

 
$
45,003

Ending balance: collectively evaluated for impairment
$
2,520,273

 
$
250,521

 
$
24,467

 
$
—

 
$
2,795,261

Allowance for loan losses on PCI loans:
 
 
 
 
 
 
 
 
 
Beginning balance
$
895

 
$
131

 
$
—

 
$
—

 
$
1,026

Provision
394

 
(68
)
 
—

 
—

 
326

Ending balance: acquired with deteriorated credit quality
$
1,289

 
$
63

 
$
—

 
$
—

 
$
1,352

PCI loans receivable:
 
 
 
 
 
 
 
 
 
Ending balance: acquired with deteriorated credit quality
$
33,598

 
$
267

 
$
43

 
$
—

 
$
33,908

June 30, 2014
 
 
 
 
 
 
 
 
 
Allowance for loan losses on Non-PCI loans:
 
 
 
 
 
 
 
 
 
Beginning balance
$
43,550

 
$
11,287

 
$
1,427

 
$
1,291

 
$
57,555

Charge-offs
(1,188
)
 
(2,896
)
 
(67
)
 
—

 
(4,151
)
Recoveries on loans previously charged off
3,005

 
2,973

 
14

 
—

 
5,992

(Negative provision) provision
(5,064
)
 
(1,626
)
 
(834
)
 
14

 
(7,510
)
Ending balance
$
40,303

 
$
9,738

 
$
540

 
$
1,305

 
$
51,886

Ending balance: individually evaluated for impairment
$
2,448

 
$
2,605

 
$
113

 
$
—

 
$
5,166

Ending balance: collectively evaluated for impairment
$
37,855

 
$
7,133

 
$
427

 
$
1,305

 
$
46,720

Non-PCI loans receivable:
 
 
 
 
 
 
 
 
 
Ending balance
$
2,090,083

 
$
230,309

 
$
28,843

 
$
—

 
$
2,349,235

Ending balance: individually evaluated for impairment
$
35,616

 
$
10,741

 
$
1,529

 
$
—

 
$
47,886

Ending balance: collectively evaluated for impairment
$
2,054,467

 
$
219,568

 
$
27,314

 
$
—

 
$
2,301,349


Credit Quality Indicators

As part of the on-going monitoring of the credit quality of our loan portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade, from 0 to 8, for each loan in our loan portfolio. A third party loan review is performed on an annual basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows:
Pass and Pass-Watch: Pass and pass-watch loans, grades 0-4, are in compliance in all respects with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under “Special Mention,” “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It incorporates all performing loans with no credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.
Special Mention: A special mention credit, grade 5, has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified.
Substandard: A substandard credit, grade 6, has a well-defined weakness that jeopardizes the liquidation of the debt. A credit graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.
Doubtful: A doubtful credit, grade 7, is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the credit, and therefore the amount or timing of a possible loss cannot be determined at the current time.
Loss: A loan classified as loss, grade 8, is considered uncollectible and of such little value that their continuance as an active bank asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as loss are charged off in a timely manner.

Under regulatory guidance, loans graded special mention or worse are considered criticized loans and loans graded substandard or worse are considered classified loans.

     As of June 30, 2015 and December 31, 2014, pass/pass-watch, special mention and classified loans (excluding PCI loans), disaggregated by loan class, were as follows:
 
Pass/Pass-Watch
 
Special Mention
 
Classified
 
Total
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
Retail
$
676,646

 
$
11,599

 
$
1,852

 
$
690,097

Hospitality
440,360

 
41,436

 
10,493

 
492,289

Gas station
321,327

 
9,515

 
6,724

 
337,566

Other
823,627

 
6,222

 
10,886

 
840,735

Construction
21,310

 
—

 
—

 
21,310

Residential property
169,287

 
62

 
1,722

 
171,071

Commercial and industrial loans:
 
 
 
 
 
 

Commercial term
101,985

 
1,373

 
8,318

 
111,676

Commercial lines of credit
112,553

 
195

 
2,634

 
115,382

International loans
33,864

 
—

 
—

 
33,864

Consumer loans
24,034

 
111

 
2,129

 
26,274

Total Non-PCI loans
$
2,724,993

 
$
70,513

 
$
44,758

 
$
2,840,264

December 31, 2014
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
Retail
$
654,360

 
$
18,013

 
$
2,699

 
$
675,072

Hospitality
397,437

 
46,365

 
10,697

 
454,499

Gas station
345,775

 
8,899

 
7,566

 
362,240

Other
822,037

 
9,543

 
10,546

 
842,126

Construction
9,517

 
—

 
—

 
9,517

Residential property
118,688

 
66

 
2,178

 
120,932

Commercial and industrial loans:
 
 
 
 
 
 


Commercial term
106,326

 
1,225

 
8,522

 
116,073

Commercial lines of credit
92,312

 
993

 
555

 
93,860

International loans
36,121

 
252

 
2,556

 
38,929

Consumer loans
25,313

 
131

 
2,068

 
27,512

Total Non-PCI loans
$
2,607,886

 
$
85,487

 
$
47,387

 
$
2,740,760

 
The following is an aging analysis of gross loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated:
 
30-59 Days Past Due
 
60-89 Days Past Due
 
90 Days or More Past Due
 
Total Past Due
 
Current
 
Total
 
Accruing 90 Days or More Past Due
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
543

 
$
177

 
$
1,166

 
$
1,886

 
$
688,211

 
$
690,097

 
$
—

Hospitality
3,837

 
—

 
4,356

 
8,193

 
484,096

 
492,289

 
—

Gas station
1,085

 
1,687

 
842

 
3,614

 
333,952

 
337,566

 
—

Other
1,209

 
447

 
3,477

 
5,133

 
835,602

 
840,735

 
—

Construction
—

 
—

 
—

 
—

 
21,310

 
21,310

 
—

Residential property
—

 
—

 
108

 
108

 
170,963

 
171,071

 
—

Commercial and industrial loans:
 
 
 
 
 
 


 
 
 


 
 
Commercial term
390

 
337

 
1,991

 
2,718

 
108,958

 
111,676

 
—

Commercial lines of credit
500

 
570

 
220

 
1,290

 
114,092

 
115,382

 
—

International loans
—

 
—

 
—

 
—

 
33,864

 
33,864

 
—

Consumer loans
250

 
—

 
338

 
588

 
25,686

 
26,274

 
—

Total Non-PCI loans
$
7,814

 
$
3,218

 
$
12,498

 
$
23,530

 
$
2,816,734

 
$
2,840,264

 
$
—

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
1,554

 
$
281

 
$
1,920

 
$
3,755

 
$
671,317

 
$
675,072

 
$
—

Hospitality
1,531

 
2,340

 
433

 
4,304

 
450,195

 
454,499

 
—

Gas station
2,991

 
1,113

 
353

 
4,457

 
357,783

 
362,240

 
—

Other
1,674

 
2,156

 
1,142

 
4,972

 
837,154

 
842,126

 
—

Construction
—

 
—

 
—

 
—

 
9,517

 
9,517

 
—

Residential property
167

 
—

 
687

 
854

 
120,078

 
120,932

 
—

Commercial and industrial loans:
 
 
 
 
 
 


 
 
 


 
 
Commercial term
1,107

 
490

 
2,847

 
4,444

 
111,629

 
116,073

 
—

Commercial lines of credit
—

 
—

 
227

 
227

 
93,633

 
93,860

 
—

International loans
200

 
—

 
—

 
200

 
38,729

 
38,929

 
—

Consumer loans
489

 
349

 
248

 
1,086

 
26,426

 
27,512

 
—

Total Non-PCI loans
$
9,713

 
$
6,729

 
$
7,857

 
$
24,299

 
$
2,716,461

 
$
2,740,760

 
$
—



 Impaired Loans

Loans are considered impaired when the Bank will be unable to collect all interest and principal payments per contractual terms of the loan agreement, unless the loan is both well-collateralized and in the process of collection; or they are classified as Troubled Debt Restructurings (“TDRs”) because, due to the financial difficulties of the borrowers, we have granted concessions to the borrowers we would not otherwise consider; or when current information or events make it unlikely to collect in full according to the contractual terms of the loan agreements; or there is a deterioration in the borrower’s financial condition that raises uncertainty as to timely collection of either principal or interest; or full payment of both interest and principal is in doubt according to the original contractual terms.
We evaluate loan impairment in accordance with applicable GAAP. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent, less estimated costs to sell. If the measure of the impaired loan is less than the recorded investment in the loan, the deficiency is either charged off against the allowance for loan losses or we establish a specific allocation in the allowance for loan losses. Additionally, loans that are considered impaired are specifically excluded from the quarterly migration analysis when determining the amount of the allowance for loan losses required for the period.
The allowance for collateral-dependent loans is determined by calculating the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as nonperforming. We continue to monitor the collateral coverage, using recent appraisals, on these loans on a quarterly basis and adjust the allowance accordingly.

The following tables provide information on impaired loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated:
 
Recorded
Investment
 
Unpaid 
Principal
Balance
 
With No
Related
Allowance
Recorded
 
With an
Allowance
Recorded
 
Related
Allowance
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
Retail
$
3,223

 
$
3,485

 
$
3,046

 
$
177

 
$
42

Hospitality
7,109

 
7,796

 
5,329

 
1,780

 
3,276

Gas station
8,538

 
9,299

 
8,104

 
434

 
127

Other
11,247

 
12,893

 
9,783

 
1,464

 
353

Residential property
2,678

 
2,843

 
2,678

 
—

 
—

Commercial and industrial loans:
 
 
 
 
 
 
 
 
 
Commercial term
7,055

 
7,492

 
3,640

 
3,415

 
1,481

Commercial lines of credit
2,064

 
2,186

 
417

 
1,647

 
5

International loans
1,282

 
1,282

 
597

 
685

 
17

Consumer loans
1,807

 
2,004

 
1,807

 
—

 
—

Total Non-PCI loans
$
45,003

 
$
49,280

 
$
35,401

 
$
9,602

 
$
5,301

December 31, 2014
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
Retail
$
4,436

 
$
4,546

 
$
1,938

 
$
2,498

 
$
220

Hospitality
5,835

 
6,426

 
4,581

 
1,254

 
1,828

Gas station
8,974

 
9,594

 
8,526

 
448

 
150

Other
10,125

 
11,591

 
8,890

 
1,235

 
319

Residential property
3,127

 
3,268

 
3,127

 
—

 
—

Commercial and industrial loans:
 
 
 
 
 
 
 
 
 
Commercial term
7,614

 
8,133

 
2,999

 
4,615

 
2,443

Commercial lines of credit
466

 
575

 
466

 
—

 
—

International loans
3,546

 
3,546

 
2,628

 
918

 
286

Consumer loans
1,742

 
1,907

 
1,742

 
—

 
—

Total Non-PCI loans
$
45,865

 
$
49,586

 
$
34,897

 
$
10,968

 
$
5,246

 
Average Recorded Investment
for the Three Months Ended
 
Interest Income Recognized 
for the Three Months Ended
 
Average Recorded Investment 
for the Six Months Ended
 
Interest Income Recognized
for the Six Months Ended
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
Retail
$
4,278

 
$
126

 
$
5,134

 
$
198

Hospitality
7,128

 
118

 
6,700

 
300

Gas station
8,712

 
189

 
8,352

 
282

Other
11,294

 
196

 
10,774

 
404

Residential property
2,689

 
28

 
2,896

 
60

Commercial and industrial loans:
 
 
 
 
 
 
 
Commercial term
7,190

 
97

 
7,634

 
196

Commercial lines of credit
2,071

 
29

 
2,255

 
36

International loans
1,182

 
—

 
1,271

 
—

Consumer loans
1,812

 
17

 
1,821

 
34

Total Non-PCI loans
$
46,356

 
$
800

 
$
46,837

 
$
1,510

June 30, 2014
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
Retail
$
5,286

 
$
108

 
$
6,295

 
$
179

Hospitality
4,712

 
80

 
4,121

 
129

Gas station
12,432

 
181

 
10,944

 
369

Other
10,624

 
228

 
11,124

 
451

Residential property
2,833

 
30

 
2,692

 
57

Commercial and industrial loans:
 
 
 
 
 
 
 
Commercial term
9,085

 
140

 
10,952

 
317

Commercial lines of credit
713

 
11

 
729

 
25

International loans
1,131

 
—

 
1,130

 
—

Consumer loans
1,535

 
16

 
1,547

 
30

Total Non-PCI loans
$
48,351

 
$
794

 
$
49,534

 
$
1,557



The following is a summary of interest foregone on impaired loans (excluding PCI loans) for the periods indicated:
 
Three Months Ended
 
Six Months Ended
 
June 30, 2015
 
June 30, 2014
 
June 30, 2015
 
June 30, 2014
 
(in thousands)
Interest income that would have been recognized had impaired loans performed in accordance with their original terms
$
1,177

 
$
1,215

 
$
1,917

 
$
2,427

Less: Interest income recognized on impaired loans
(800
)
 
(794
)
 
(1,510
)
 
(1,557
)
Interest foregone on impaired loans
$
377

 
$
421

 
$
407

 
$
870


    
There were no commitments to lend additional funds to borrowers whose loans are included above.

Nonaccrual Loans

Loans are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless management believes the loan is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan’s delinquency. When a loan is placed on nonaccrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans may be restored to accrual status when principal and interest payments become current and full repayment is expected.
    
The following table details nonaccrual loans (excluding PCI loans), disaggregated by loan class, as of the dates indicated:
 
June 30, 2015
 
December 31, 2014
 
(in thousands)
Real estate loans:
 
 
 
Commercial property
 
 
 
Retail
$
1,599

 
$
2,160

Hospitality
6,133

 
3,835

Gas station
5,664

 
3,478

Other
6,404

 
4,961

Residential property
1,141

 
1,588

Commercial and industrial loans:
 
 
 
Commercial term
5,108

 
7,052

Commercial lines of credit
417

 
466

Consumer loans
1,557

 
1,742

Total nonaccrual Non-PCI loans
$
28,023

 
$
25,282



The following table details nonperforming assets (excluding PCI loans) as of the dates indicated:
 
June 30, 2015
 
December 31, 2014
 
(in thousands)
Nonaccrual Non-PCI loans
$
28,023

 
$
25,282

Loans 90 days or more past due and still accruing
—

 
—

Total nonperforming Non-PCI loans
28,023

 
25,282

OREO
11,857

 
15,790

Total nonperforming assets
$
39,880

 
$
41,072



As of June 30, 2015, OREO consisted of 19 properties with a combined carrying value of $11.9 million. Of the $11.9 million, $10.6 million were OREO acquired in the CBI acquisition or were obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. As of December 31, 2014, OREO consisted of 25 properties with a combined carrying value of $15.8 million. Of the $15.8 million, $15.3 million were OREO acquired in the CBI acquisition or were obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date.

Troubled Debt Restructurings
    
The following table details TDRs (excluding PCI loans), disaggregated by concession type and by loan type, as of June 30, 2015 and December 31, 2014:
 
Nonaccrual TDRs
 
Accrual TDRs
 
Deferral
of
Principal
 
Deferral
of
Principal
and
Interest
 
Reduction
of
Principal
and
Interest
 
Extension
of
Maturity
 
Total
 
Deferral
of
Principal
 
Deferral
of
Principal
and
Interest
 
Reduction
of
Principal
and
Interest
 
Extension
of
Maturity
 
Total
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
—

 
$
—

 
$
—

 
$
371

 
$
371

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Hospitality
1,852

 
(74
)
 
—

 
—

 
1,778

 
—

 
—

 
—

 
—

 
—

Gas station
2,868

 
—

 
—

 
—

 
2,868

 
349

 
—

 
—

 
—

 
349

Other
920

 
1,749

 
384

 
16

 
3,069

 
2,249

 
—

 
760

 
1,370

 
4,379

Residential property
716

 
—

 
—

 
—

 
716

 
—

 
—

 
—

 
304

 
304

Commercial and industrial loans:
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 


Commercial term
10

 
5

 
2,396

 
1,557

 
3,968

 
49

 
220

 
307

 
1,085

 
1,661

Commercial lines of credit
220

 
—

 
114

 
83

 
417

 
1,647

 
—

 
—

 
—

 
1,647

Consumer loans
—

 
—

 
123

 
—

 
123

 
250

 
—

 
—

 
—

 
250

Total Non-PCI loans
$
6,586

 
$
1,680

 
$
3,017

 
$
2,027

 
$
13,310

 
$
4,544

 
$
220

 
$
1,067

 
$
2,759

 
$
8,590

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
—

 
$
—

 
$
—

 
$
2,032

 
$
2,032

 
$
306

 
$
—

 
$
—

 
$
—

 
$
306

Hospitality
1,115

 
(53
)
 
—

 
—

 
1,062

 
1,807

 
—

 
—

 
—

 
1,807

Gas station
1,075

 
—

 
—

 
—

 
1,075

 
2,335

 
—

 
—

 
—

 
2,335

Other
943

 
1,498

 
433

 
24

 
2,898

 
2,343

 
—

 
782

 
1,372

 
4,497

Residential property
742

 
—

 
—

 
—

 
742

 
—

 
—

 
—

 
308

 
308

Commercial and industrial loans:
 
 
 
 
 
 
 
 


 
 
 
 
 
 
 
 
 


Commercial term
14

 
(1
)
 
2,556

 
1,481

 
4,050

 
57

 
226

 
567

 
1,358

 
2,208

Commercial lines of credit
227

 
—

 
126

 
113

 
466

 
2,156

 
—

 
—

 
—

 
2,156

International loans
—

 
—

 
—

 
—

 
—

 
—

 
—

 
200

 
—

 
200

Consumer loans
—

 
—

 
131

 
—

 
131

 
—

 
—

 
—

 
—

 
—

Total Non-PCI loans
$
4,116

 
$
1,444

 
$
3,246

 
$
3,650

 
$
12,456

 
$
9,004

 
$
226

 
$
1,549

 
$
3,038

 
$
13,817



As of June 30, 2015 and December 31, 2014, total TDRs, excluding loans held for sale, were $21.9 million and $26.3 million, respectively. A debt restructuring is considered a TDR if we grant a concession that we would not have otherwise considered to the borrower, for economic or legal reasons related to the borrower’s financial difficulties. Loans are considered to be TDRs if they were restructured through payment structure modifications such as reducing the amount of principal and interest due monthly and/or allowing for interest only monthly payments for three months or more. All TDRs are impaired and are individually evaluated for specific impairment using one of these three criteria: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent.

At June 30, 2015 and December 31, 2014, TDRs, excluding loans held for sale, were subjected to specific impairment analysis, and $2.0 million and $2.9 million, respectively, of reserves relating to these loans were included in the allowance for loan losses.

The following table details TDRs (excluding PCI loans), disaggregated by loan class, for the three months ended June 30, 2015 and 2014:
 
June 30, 2015
 
June 30, 2014
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
Number of
Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
(in thousands, except number of loans)
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
Retail (1)
—

 
$
—

 
$
—

 
1

 
$
2,002

 
$
1,882

Other (2)
1

 
313

 
313

 
1

 
65

 
62

Residential property (3)
—

 
—

 
—

 
1

 
316

 
313

Commercial and industrial loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial term (4)
1

 
9

 
9

 
2

 
59

 
53

Commercial lines of credit (5)
—

 
—

 
—

 
1

 
146

 
140

Consumer loans (6)
1

 
250

 
250

 
—

 
—

 
—

Total Non-PCI loans
3

 
$
572

 
$
572

 
6

 
$
2,588

 
$
2,450

                               
(1) 
Includes a modification of $1.9 million through an extension of maturity for the three months ended June 30, 2014.
(2) 
Includes a modification of $313,000 through a payment deferral for the three months ended June 30, 2015 and a modification of $62,000 through an extension of maturity for the three months ended June 30, 2014.
(3) 
Includes a modification of $313,000 through an extension of maturity for the three months ended June 30, 2014.
(4) 
Includes a modification of $9,000 through a reduction of principal or accrued interest for the three months ended June 30, 2015 and modifications of $41,000 through a payment deferral and $12,000 through a reduction of principal or accrued interest for the three months ended June 30, 2014.
(5) 
Includes a modification of $140,000 through a reduction of principal or accrued interest for the three months ended June 30, 2014.
(6) 
Includes a modification of $250,000 through a payment deferral for the three months ended June 30, 2015.

During the three months ended June 30, 2015, we restructured monthly payments on three loans, with a net carrying value of $572,000 as of June 30, 2015, through temporary payment structure modifications. For the restructured loans on accrual status, we determined that, based on the financial capabilities of the borrowers at the time of the loan restructuring and the borrowers’ past performance in the payment of debt service under the previous loan terms, performance and collection under the revised terms are probable.

The following table details TDRs (excluding PCI loans), disaggregated by loan class, for the six months ended June 30, 2015 and 2014:
 
June 30, 2015
 
June 30, 2014
 
Number of Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
Number of Loans
 
Pre-
Modification
Outstanding
Recorded
Investment
 
Post-
Modification
Outstanding
Recorded
Investment
 
(in thousands, except number of loans)
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
Retail (1)
—

 
$
—

 
$
—

 
1

 
$
2,002

 
$
1,882

Other (2)
1

 
313

 
313

 
2

 
1,011

 
1,005

Residential property (3)
—

 
—

 
—

 
1

 
317

 
313

Commercial and industrial loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial term (4)
5

 
553

 
486

 
5

 
327

 
287

Commercial lines of credit (5)
—

 
—

 
—

 
2

 
400

 
378

Consumer loans (6)
1

 
250

 
250

 
—

 
—

 
—

Total Non-PCI loans
7

 
$
1,116

 
$
1,049

 
11

 
$
4,057

 
$
3,865

                              
(1) 
Includes a modification of $1.9 million through an extension of maturity for the six months ended June 30, 2014.
(2) 
Includes a modification of $313,000 through a payment deferral for the six months ended June 30, 2015 and modifications of $62,000 through an extension of maturity and $943,000 through a payment deferral for the six months ended June 30, 2014.
(3) 
Includes a modification of $313,000 through an extension of maturity for the six months ended June 30, 2014.
(4) 
Includes modifications of $476,000 through extensions of maturity and a modification of $9,000 through a reduction of principal or accrued interest for the six months ended June 30, 2015, and modifications of $140,000 through a reduction of principal or accrued interest and $238,000 through a payment deferral for the six months ended June 30, 2014.
(5) 
Includes modifications of $140,000 through a reduction of principal or accrued interest and $238,000 through a payment deferral for the six months ended June 30, 2014.
(6) 
Includes a modification of $250,000 through a payment deferral for the three months ended June 30, 2015.

The following table details TDRs (excluding PCI loans) that defaulted subsequent to the modifications occurring within the previous twelve months, disaggregated by loan class, for the three and six months ended June 30, 2015 and 2014, respectively:
 
Three Months Ended
 
Six Months Ended
 
June 30, 2015
 
June 30, 2014
 
June 30, 2015
 
June 30, 2014
 
Number of Loans
 
Recorded Investment
 
Number of Loans
 
Recorded Investment
 
Number of Loans
 
Recorded Investment
 
Number of Loans
 
Recorded Investment
 
(in thousands, except number of loans)
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
—

 
$
—

 
—
 
$
—

 
—

 
$
—

 
1

 
$
309

Hospitality
1

 
821

 
—
 
—

 
1

 
821

 
1

 
996

Gas station
1

 
1,856

 
—
 
—

 
1

 
1,856

 
—

 
—

Other
1

 
379

 
—
 
—

 
1

 
379

 
1

 
364

Commercial and industrial loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial term
—

 
—

 
2
 
212

 
—

 
—

 
2

 
212

Commercial lines of credit
—

 
—

 
1
 
140

 
—

 
—

 
1

 
140

Total Non-PCI loans
3

 
$
3,056

 
3

 
$
352

 
3

 
$
3,056

 
6

 
$
2,021



Purchased Credit Impaired Loans

As part of the acquisition of CBI, the Company purchased loans for which there was, at acquisition, evidence of deterioration of credit quality subsequent to origination and it was probable, at acquisition, that all contractually required payments would not be collected. Outstanding balance of PCI loans, the undiscounted sum of all amounts including amounts deemed principal, interest, fees and penalties, were $49.0 million and $64.3 million, respectively as of June 30, 2015 and December 31, 2014. The following table summarizes the changes in carrying value of PCI loans during the six months ended June 30, 2015:
 
Carrying Amount
 
Accretable Yield
 
(in thousands)
Balance at January 1, 2015
$
43,475

 
$
(11,025
)
Accretion
1,758

 
1,758

Payments received
(13,792
)
 
—

Disposal/transfer to OREO
1,441

 
—

Change in expected cash flows, net
—

 
92

Provision for credit losses
(326
)
 
—

Balance at June 30, 2015
$
32,556

 
$
(9,175
)


As of June 30, 2015, pass/pass-watch, special mention and classified PCI loans, disaggregated by loan class, were as follows:
 
Pass/Pass-Watch
 
Special Mention
 
Classified
 
Total
 
Allowance
 
Total PCI Loans
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
Retail
$
1,199

 
$
177

 
$
7,982

 
$
9,358

 
$
257

 
$
9,101

Hospitality
191

 
—

 
10,154

 
10,345

 
317

 
10,028

Gas station
—

 
188

 
5,767

 
5,955

 
503

 
5,452

Other
51

 
—

 
5,834

 
5,885

 
16

 
5,869

Residential property
—

 
—

 
2,055

 
2,055

 
196

 
1,859

Commercial and industrial loans:
 
 
 
 
 
 


 
 
 


Commercial term
—

 
—

 
267

 
267

 
63

 
204

Consumer loans
—

 
—

 
43

 
43

 
—

 
43

Total PCI loans
$
1,441

 
$
365


$
32,102

 
$
33,908

 
$
1,352

 
$
32,556

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
Retail
$
1,207

 
$
219

 
$
8,917

 
$
10,343

 
$
401

 
$
9,942

Hospitality
—

 
—

 
12,862

 
12,862

 
99

 
12,763

Gas station
—

 
1,242

 
6,503

 
7,745

 
302

 
7,443

Other
—

 
—

 
10,680

 
10,680

 
65

 
10,615

Residential property
—

 
—

 
2,499

 
2,499

 
28

 
2,471

Commercial and industrial loans:
 
 
 
 
 
 

 
 
 

Commercial term
—

 
—

 
327

 
327

 
131

 
196

Consumer loans
—

 
—

 
45

 
45

 
—

 
45

Total PCI loans
$
1,207

 
$
1,461

 
$
41,833

 
$
44,501

 
$
1,026

 
$
43,475


    
Loans accounted for as PCI are generally considered accruing and performing loans as the accretable discount is accreted to interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans are classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. As of June 30, 2015 and December 31, 2014, we had no PCI loans on nonaccrual status and included in the delinquency table below.

The following table presents a summary of the borrowers' underlying payment status of PCI loans as of the dates indicated:
 
30-59 Days Past Due
 
60-89 Days Past Due
 
90 Days or More Past Due
 
Total Past Due
 
Current
 
Total
 
Allowance Amount
 
Total
 
(in thousands)
June 30, 2015
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
1,759

 
$
—

 
$
4,851

 
$
6,610

 
$
2,748

 
$
9,358

 
$
257

 
$
9,101

Hospitality
36

 
—

 
5,614

 
5,650

 
4,695

 
10,345

 
317

 
10,028

Gas station
63

 
—

 
1,874

 
1,937

 
4,018

 
5,955

 
503

 
5,452

Other
8

 
—

 
5,330

 
5,338

 
547

 
5,885

 
16

 
5,869

Residential property
—

 
—

 
1,406

 
1,406

 
649

 
2,055

 
196

 
1,859

Commercial and industrial loans:
 
 
 
 
 
 

 
 
 

 
 
 

Commercial term
—

 
—

 
70

 
70

 
197

 
267

 
63

 
204

Consumer loans
—

 
—

 
43

 
43

 
—

 
43

 
—

 
43

Total PCI loans
$
1,866

 
$
—

 
$
19,188

 
$
21,054

 
$
12,854

 
$
33,908

 
$
1,352

 
$
32,556

December 31, 2014
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial property
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
$
93

 
$
287

 
$
5,623

 
$
6,003

 
$
4,340

 
$
10,343

 
$
401

 
$
9,942

Hospitality
312

 
—

 
7,670

 
7,982

 
4,880

 
12,862

 
99

 
12,763

Gas station
1,139

 
1,053

 
3,178

 
5,370

 
2,375

 
7,745

 
302

 
7,443

Other
—

 
—

 
10,119

 
10,119

 
561

 
10,680

 
65

 
10,615

Residential property
—

 
—

 
1,722

 
1,722

 
777

 
2,499

 
28

 
2,471

Commercial and industrial loans:
 
 
 
 
 
 

 
 
 

 
 
 

Commercial term
30

 
—

 
135

 
165

 
162

 
327

 
131

 
196

Consumer loans
—

 
17

 
28

 
45

 
—

 
45

 
—

 
45

Total PCI loans
$
1,574

 
$
1,357

 
$
28,475

 
$
31,406

 
$
13,095

 
$
44,501

 
$
1,026

 
$
43,475



Servicing Assets and Liabilities
    
The changes in servicing assets for the six months ended June 30, 2015 and 2014 were as follows:
 
2015
 
2014
 
(in thousands)
Servicing assets:
 
 
 
Balance at beginning of period
$
13,773

 
$
6,833

Addition related to sale of SBA loans
1,181

 
413

Amortization
(1,829
)
 
(891
)
Balance at end of period
$
13,125

 
$
6,355

Servicing liabilities:
 
 
 
Balance at beginning of period
$
5,971

 
$
106

Amortization
(603
)
 
(3
)
Balance at end of period
$
5,368

 
$
103



At June 30, 2015 and 2014, we serviced loans sold to unaffiliated parties in the amounts of $486.1 million and $333.0 million respectively. These represented loans that have been sold for which the Bank continues to provide servicing. These loans are maintained off balance sheet and are not included in the loans receivable balance. All of the loans being serviced were SBA loans.

FDIC Loss Sharing Asset and Liability

The FDIC loss sharing asset related to the assumption of Single Family and Commercial Shared-Loss Agreement (“SLAs”) between CBI and the FDIC arising from the CBI’s acquisition of Mutual Bank. The loss sharing asset was measured at its fair value as of August 31, 2014 in conjunction with the acquisition of CBI. During the third quarter of 2014, the Bank submitted losses in excess of the stated reimbursement threshold of $611.0 million, increasing the reimbursable percentage to 95 percent from 80 percent. The three-year recovery period on the Commercial Share-Loss Portfolio commenced on October 1, 2014. During this period, 95 percent of any recoveries of previously charged-off and reimbursed Commercial SLA loans need to be reimbursed to the FDIC, less any reasonable recovery costs incurred until cumulative submitted losses fall below the stated reimbursement threshold. As of June 30, 2015, the FDIC loss sharing liability was a net payable to the FDIC of $116,000, which consisted of $806,000 of FDIC recoveries partially offset by $690,000 of reimbursable expenses owed to the Bank. Of the $116,000 net payable to the FDIC, all activity is related to the Non-Single Family SLA Portfolio.