Annual report pursuant to Section 13 and 15(d)

LOANS AND ALLOWANCE FOR LOAN LOSSES

v3.6.0.2
LOANS AND ALLOWANCE FOR LOAN LOSSES
12 Months Ended
Dec. 31, 2016
Loans and Leases Receivable Disclosure [Abstract]  
LOANS AND ALLOWANCE FOR LOAN LOSSES
LOANS AND ALLOWANCE FOR LOAN LOSSES
 
Loans are stated at their face amount, net of deferred fees and costs, and consist of the following at December 31, 2016 and 2015 (dollars in thousands):
 
 
2016
 
2015
Construction and Land Development
$
751,131

 
$
749,720

Commercial Real Estate - Owner Occupied
857,805

 
860,086

Commercial Real Estate - Non-Owner Occupied
1,564,295

 
1,270,480

Multifamily Real Estate
334,276

 
322,528

Commercial & Industrial
551,526

 
435,365

Residential 1-4 Family
1,029,547

 
978,469

Auto
262,071

 
234,061

HELOC
526,884

 
516,726

Consumer and all other
429,525

 
304,027

Total loans held for investment, net (1)
$
6,307,060

 
$
5,671,462



(1) Loans, as presented, are net of deferred fees and costs totaling $1.8 million and $3.0 million as of December 31, 2016 and 2015, respectively.

On October 16, 2015, the Company entered into an agreement to sell its credit card portfolio, approximating $26.4 million in outstanding balances, and entered into an outsourcing partnership with Elan Financial Services. The Company sold these loans at a premium. The sale of the credit card portfolio resulted in an after-tax benefit of $805,000 on the Company’s Consolidated Statement of Income in 2015. As part of the agreement, the Company will continue to share in interchange fee income and finance charges.
 
The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2016 (dollars in thousands):
 
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater than
90 Days and
still Accruing
 
PCI
 
Nonaccrual
 
Current
 
Total Loans
Construction and Land Development
$
1,162

 
$
232

 
$
76

 
$
2,922

 
$
2,037

 
$
744,702

 
$
751,131

Commercial Real Estate - Owner Occupied
1,842

 
109

 
35

 
18,343

 
794

 
836,682

 
857,805

Commercial Real Estate - Non-Owner Occupied
2,369

 

 

 
17,303

 

 
1,544,623

 
1,564,295

Multifamily Real Estate
147

 

 

 
2,066

 

 
332,063

 
334,276

Commercial & Industrial
759

 
858

 
9

 
1,074

 
124

 
548,702

 
551,526

Residential 1-4 Family
7,038

 
534

 
2,048

 
16,200

 
5,279

 
998,448

 
1,029,547

Auto
2,570

 
317

 
111

 

 
169

 
258,904

 
262,071

HELOC
1,836

 
1,140

 
635

 
1,161

 
1,279

 
520,833

 
526,884

Consumer and all other
2,522

 
1,431

 
91

 
223

 
291

 
424,967

 
429,525

Total loans held for investment
$
20,245

 
$
4,621

 
$
3,005

 
$
59,292

 
$
9,973

 
$
6,209,924

 
$
6,307,060

 
The following table shows the aging of the Company’s loan portfolio, by segment, at December 31, 2015 (dollars in thousands):
 
 
30-59 Days
Past Due
 
60-89 Days
Past Due
 
Greater than
90 Days and
still Accruing
 
PCI
 
Nonaccrual
 
Current
 
Total Loans
Construction and Land Development
$
3,155

 
$
380

 
$
128

 
$
5,986

 
$
2,113

 
$
737,958

 
$
749,720

Commercial Real Estate - Owner Occupied
1,714

 
118

 
103

 
27,388

 
3,904

 
826,859

 
860,086

Commercial Real Estate - Non-Owner Occupied
771

 

 
723

 
13,519

 
100

 
1,255,367

 
1,270,480

Multifamily Real Estate

 

 
272

 
1,555

 

 
320,701

 
322,528

Commercial & Industrial
1,056

 
27

 
124

 
1,813

 
429

 
431,916

 
435,365

Residential 1-4 Family
15,023

 
6,774

 
3,638

 
21,159

 
3,563

 
928,312

 
978,469

Auto
2,312

 
233

 
60

 

 
192

 
231,264

 
234,061

HELOC
2,589

 
1,112

 
762

 
1,791

 
1,348

 
509,124

 
516,726

Consumer and all other
1,167

 
689

 
19

 
526

 
287

 
301,339

 
304,027

Total loans held for investment
$
27,787

 
$
9,333

 
$
5,829

 
$
73,737

 
$
11,936

 
$
5,542,840

 
$
5,671,462


 
Nonaccrual loans totaled $10.0 million, $11.9 million, and $19.3 million at December 31, 2016, 2015 and 2014, respectively. Had these loans performed in accordance with their original terms, interest income of approximately $452,000, $487,000, and $795,000 would have been recorded in 2016, 2015, and 2014, respectively. All nonaccrual loans were included in the impaired loan disclosure in 2016 and 2015.
 
The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2016 (dollars in thousands): 
 
30-89 Days
Past Due
 
Greater than
90 Days
 
Current
 
Total
Construction and Land Development
$

 
$
84

 
$
2,838

 
$
2,922

Commercial Real Estate - Owner Occupied
271

 
519

 
17,553

 
18,343

Commercial Real Estate - Non-Owner Occupied
409

 
126

 
16,768

 
17,303

Multifamily Real Estate

 

 
2,066

 
2,066

Commercial & Industrial
44

 
56

 
974

 
1,074

Residential 1-4 Family
1,298

 
945

 
13,957

 
16,200

HELOC
175

 
121

 
865

 
1,161

Consumer and all other

 

 
223

 
223

Total
$
2,197

 
$
1,851

 
$
55,244

 
$
59,292

 
The following table shows the PCI loan portfolios, by segment and their delinquency status, at December 31, 2015 (dollars in thousands):
 
30-89 Days
Past Due
 
Greater than
90 Days
 
Current
 
Total
Construction and Land Development
$
369

 
$
241

 
$
5,376

 
$
5,986

Commercial Real Estate - Owner Occupied
1,139

 
1,412

 
24,837

 
27,388

Commercial Real Estate - Non-Owner Occupied
755

 
202

 
12,562

 
13,519

Multifamily Real Estate

 

 
1,555

 
1,555

Commercial & Industrial
209

 
21

 
1,583

 
1,813

Residential 1-4 Family
2,143

 
1,923

 
17,093

 
21,159

HELOC
410

 
458

 
923

 
1,791

Consumer and all other

 

 
526

 
526

Total
$
5,025

 
$
4,257

 
$
64,455

 
$
73,737


 
The Company measures the amount of impairment by evaluating loans either in their collective homogeneous pools or individually. The following table shows the Company’s impaired loans, excluding PCI loans, by segment at December 31, 2016 and 2015 (dollars in thousands): 
 
December 31, 2016
 
December 31, 2015
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
Loans without a specific allowance
 

 
 

 
 

 
 

 
 

 
 
Construction and Land Development
$
13,877

 
$
14,353

 
$

 
$
33,250

 
$
33,731

 
$

Commercial Real Estate - Owner Occupied
5,886

 
6,042

 

 
7,781

 
8,983

 

Commercial Real Estate - Non-Owner Occupied
1,399

 
1,399

 

 
5,328

 
5,325

 

Multifamily Real Estate

 

 

 
3,828

 
3,828

 

Commercial & Industrial
648

 
890

 

 
711

 
951

 

Residential 1-4 Family
8,496

 
9,518

 

 
7,564

 
8,829

 

Auto

 

 

 
7

 
7

 

HELOC
1,017

 
1,094

 

 
1,786

 
2,028

 

Consumer and all other
230

 
427

 

 
211

 
211

 

Total impaired loans without a specific allowance
$
31,553

 
$
33,723

 
$

 
$
60,466

 
$
63,893

 
$

Loans with a specific allowance
 

 
 

 
 

 
 

 
 

 
 

Construction and Land Development
$
1,395

 
$
1,404

 
$
107

 
$
3,167

 
$
3,218

 
$
538

Commercial Real Estate - Owner Occupied
646

 
646

 
4

 
3,237

 
3,239

 
358

Commercial Real Estate - Non-Owner Occupied
2,809

 
2,809

 
474

 
907

 
907

 
75

Commercial & Industrial
857

 
880

 
14

 
1,952

 
1,949

 
441

Residential 1-4 Family
3,335

 
3,535

 
200

 
6,065

 
6,153

 
418

Auto
169

 
235

 
1

 
192

 
199

 
1

HELOC
323

 
433

 
15

 
769

 
925

 
76

Consumer and all other
62

 
298

 
1

 
363

 
512

 
95

Total impaired loans with a specific allowance
$
9,596

 
$
10,240

 
$
816

 
$
16,652

 
$
17,102

 
$
2,002

Total impaired loans
$
41,149

 
$
43,963

 
$
816

 
$
77,118

 
$
80,995

 
$
2,002

 
The following table shows the average recorded investment and interest income recognized for the Company’s impaired loans,
excluding PCI loans, by segment for the years ended December 31, 2016, 2015 and 2014 (dollars in thousands):
 
December 31, 2016
 
December 31, 2015
 
December 31, 2014
 
Average
Investment
 
Interest 
Income
Recognized
 
Average
Investment
 
Interest 
Income
Recognized
 
Average
Investment
 
Interest 
Income
Recognized
Construction and Land Development
$
15,346

 
$
681

 
$
36,441

 
$
2,265

 
$
56,183

 
$
2,382

Commercial Real Estate - Owner Occupied
6,290

 
242

 
11,409

 
348

 
22,719

 
1,017

Commercial Real Estate - Non-Owner Occupied
4,188

 
134

 
6,201

 
250

 
29,136

 
1,292

Multifamily Real Estate

 

 
3,854

 
244

 
4,657

 
284

Commercial & Industrial
2,800

 
95

 
3,404

 
139

 
6,426

 
195

Residential 1-4 Family
12,716

 
291

 
14,468

 
410

 
18,244

 
571

Auto
244

 
5

 
235

 
6

 
7

 

HELOC
1,513

 
19

 
2,757

 
54

 
1,522

 
35

Consumer and all other
567

 
8

 
639

 
19

 
2,287

 
95

Total impaired loans
$
43,664

 
$
1,475

 
$
79,408

 
$
3,735

 
$
141,181

 
$
5,871



 
The Company considers TDRs to be impaired loans. A modification of a loan’s terms constitutes a TDR if the creditor grants a concession that it would not otherwise consider to the borrower for economic or legal reasons related to the borrower’s financial difficulties. All loans that are considered to be TDRs are evaluated for impairment in accordance with the Company’s allowance for loan loss methodology and are included in the preceding impaired loan tables. For the year ended December 31, 2016, the recorded investment in restructured loans prior to modifications was not materially impacted by the modification.
 
The following table provides a summary, by segment, of TDRs that continue to accrue interest under the terms of the restructuring agreement, which are considered to be performing, and TDRs that have been placed in nonaccrual status, which are considered to be nonperforming, as of December 31, 2016 and 2015 (dollars in thousands):
 
December 31, 2016
 
December 31, 2015
 
No. of
Loans
 
Recorded
Investment
 
Outstanding
Commitment
 
No. of
Loans
 
Recorded
Investment
 
Outstanding
Commitment
Performing
 

 
 

 
 

 
 

 
 

 
 

Construction and Land Development
8

 
$
3,793

 
$

 
6

 
$
3,349

 
$

Commercial Real Estate - Owner Occupied
7

 
3,106

 

 
5

 
1,530

 

Commercial Real Estate - Non-Owner Occupied
2

 
2,390

 

 
2

 
2,390

 

Commercial & Industrial
3

 
533

 

 
5

 
261

 

Residential 1-4 Family
28

 
4,145

 

 
27

 
3,173

 

Consumer and all other

 

 

 
1

 
77

 

Total performing
48

 
$
13,967

 
$

 
46

 
$
10,780

 
$

Nonperforming
 

 
 

 
 

 
 

 
 

 
 

Construction and Land Development
2

 
$
215

 
$

 
2

 
$
321

 
$

Commercial Real Estate - Owner Occupied
2

 
156

 

 
1

 
137

 

Commercial & Industrial
1

 
116

 

 
1

 
2

 

Residential 1-4 Family
8

 
948

 

 
6

 
1,142

 

HELOC

 

 

 
1

 
319

 

Total nonperforming
13

 
$
1,435

 
$

 
11

 
$
1,921

 
$

Total performing and nonperforming
61

 
$
15,402

 
$

 
57

 
$
12,701

 
$



The Company considers a default of a restructured loan to occur when the borrower is 90 days past due following the restructure or a foreclosure and repossession of the applicable collateral occurs. During the years ended December 31, 2016 and 2015, the Company did not identify any material restructured loans that went into default that had been restructured in the twelve-month period prior to default.

The following table shows, by segment and modification type, TDRs that occurred during the years ended December 31, 2016 and 2015 (dollars in thousands):
 
2016
 
2015
 
No. of
Loans
 
Recorded
Investment at
Period End
 
No. of
Loans
 
Recorded
Investment at
Period End
Modified to interest only, at a market rate
 
 
 

 
 
 
 

Construction and Land Development
2

 
$
325

 

 
$

Commercial Real Estate - Owner Occupied
2

 
483

 

 

Commercial & Industrial
1

 
34

 
1

 
19

Residential 1-4 Family
1

 
158

 
1

 
21

Total interest only at market rate of interest
6

 
$
1,000

 
2

 
$
40

 
 
 
 
 
 
 
 
Term modification, at a market rate
 
 
 

 
 
 
 

Construction and Land Development
2

 
$
1,444

 

 
$

Commercial Real Estate - Owner Occupied
3

 
1,326

 
3

 
282

Commercial & Industrial
1

 
444

 
2

 
162

Residential 1-4 Family
6

 
980

 
11

 
936

Consumer and all other

 

 
1

 
77

Total loan term extended at a market rate
12

 
$
4,194

 
17

 
$
1,457

 
 
 
 
 
 
 
 
Term modification, below market rate
 
 
 

 
 
 
 

Construction and Land Development

 
$

 
1

 
$
400

Commercial Real Estate - Owner Occupied

 

 
1

 
866

Residential 1-4 Family
7

 
1,309

 
7

 
1,039

Total loan term extended at a below market rate
7

 
$
1,309

 
9

 
$
2,305

 
 
 
 
 
 
 
 
Interest rate modification, below market rate
 
 
 
 
 
 
 
Commercial & Industrial
1

 
$
116

 

 
$

        Total interest only at below market rate of interest
1

 
$
116

 

 
$

 
 
 
 
 
 
 
 
Total
26

 
$
6,619

 
28

 
$
3,802


 
The following table shows the allowance for loan loss activity, balances for ALL, and loan balances based on impairment methodology by segment for the year ended and as of December 31, 2016. The table below includes the provision for loan losses. As discussed in Note 1 “Summary of Significant Accounting Policies,” the Company enhanced its loan segmentation for purposes of the allowance calculation as well as its disclosures. The impact of this enhancement is reflected in the provision amounts in the table below. In addition, a $425,000 provision was recognized during the year ended December 31, 2016 for unfunded loan commitments for which the reserves are recorded as a component of “Other Liabilities” on the Company’s Consolidated Balance Sheets. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
 
Allowance for loan losses
 
Balance,
beginning of the year
 
Recoveries
credited to
allowance
 
Loans charged
off
 
Provision
charged to
operations
 
Balance, end of
period
Construction and Land Development
$
6,040

 
$
505

 
$
(958
)
 
$
4,468

 
$
10,055

Commercial Real Estate - Owner Occupied
4,614

 
152

 
(809
)
 
(156
)
 
3,801

Commercial Real Estate - Non-Owner Occupied
6,929

 
80

 
(1
)
 
(386
)
 
6,622

Multifamily Real Estate
1,606

 

 

 
(370
)
 
1,236

Commercial & Industrial
3,163

 
483

 
(1,920
)
 
2,901

 
4,627

Residential 1-4 Family
5,414

 
585

 
(900
)
 
1,300

 
6,399

Auto
1,703

 
327

 
(1,052
)
 
(32
)
 
946

HELOC
2,934

 
459

 
(1,457
)
 
(608
)
 
1,328

Consumer and all other
1,644

 
434

 
(1,458
)
 
1,558

 
2,178

Total
$
34,047

 
$
3,025

 
$
(8,555
)
 
$
8,675

 
$
37,192


 
Loans individually evaluated
for impairment
 
Loans collectively evaluated for
impairment
 
Loans acquired with
deteriorated credit quality
 
Total
 
Loans
 
ALL
 
Loans
 
ALL
 
Loans
 
ALL
 
Loans
 
ALL
Construction and Land Development
$
15,272

 
$
107

 
$
732,937

 
$
9,948

 
$
2,922

 
$

 
$
751,131

 
$
10,055

Commercial Real Estate - Owner Occupied
6,532

 
4

 
832,930

 
3,797

 
18,343

 

 
857,805

 
3,801

Commercial Real Estate - Non-Owner Occupied
4,208

 
474

 
1,542,784

 
6,148

 
17,303

 

 
1,564,295

 
6,622

Multifamily Real Estate

 

 
332,210

 
1,236

 
2,066

 

 
334,276

 
1,236

Commercial & Industrial
1,505

 
14

 
548,947

 
4,613

 
1,074

 

 
551,526

 
4,627

Residential 1-4 Family
11,831

 
200

 
1,001,516

 
6,199

 
16,200

 

 
1,029,547

 
6,399

Auto
169

 
1

 
261,902

 
945

 

 

 
262,071

 
946

HELOC
1,340

 
15

 
524,383

 
1,313

 
1,161

 

 
526,884

 
1,328

Consumer and all other
292

 
1

 
429,010

 
2,177

 
223

 

 
429,525

 
2,178

Total loans held for investment, net
$
41,149

 
$
816

 
$
6,206,619

 
$
36,376

 
$
59,292

 
$

 
$
6,307,060

 
$
37,192



 
 
The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the year ended and as of December 31, 2015. In addition, a $300,000 provision was recognized during the year ended December 31, 2015 for unfunded loan commitments. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
 
Allowance for loan losses
 
Balance,
beginning of the year
 
Recoveries
credited to
allowance
 
Loans charged
off
 
Provision
charged to
operations
 
Balance, end of
period
Construction and Land Development
$
4,856

 
$
720

 
$
(650
)
 
$
1,114

 
$
6,040

Commercial Real Estate - Owner Occupied
4,640

 
143

 
(481
)
 
312

 
4,614

Commercial Real Estate - Non-Owner Occupied
7,256

 
239

 
(3,137
)
 
2,571

 
6,929

Multifamily Real Estate
1,374

 
200

 

 
32

 
1,606

Commercial & Industrial
2,610

 
958

 
(2,361
)
 
1,956

 
3,163

Residential 1-4 Family
5,607

 
554

 
(1,789
)
 
1,042

 
5,414

Auto
1,297

 
290

 
(768
)
 
884

 
1,703

HELOC
2,675

 
298

 
(1,100
)
 
1,061

 
2,934

Consumer and all other
2,069

 
525

 
(1,249
)
 
299

 
1,644

Total
$
32,384

 
$
3,927

 
$
(11,535
)
 
$
9,271

 
$
34,047


 
Loans individually evaluated
for impairment
 
Loans collectively evaluated for
impairment
 
Loans acquired with
deteriorated credit quality
 
Total
 
Loans
 
ALL
 
Loans
 
ALL
 
Loans
 
ALL
 
Loans
 
ALL
Construction and Land Development
$
36,417

 
$
538

 
$
707,317

 
$
5,502

 
$
5,986

 
$

 
$
749,720

 
$
6,040

Commercial Real Estate - Owner Occupied
11,018

 
358

 
821,680

 
4,256

 
27,388

 

 
860,086

 
4,614

Commercial Real Estate - Non-Owner Occupied
6,235

 
75

 
1,250,726

 
6,854

 
13,519

 

 
1,270,480

 
6,929

Multifamily Real Estate
3,828

 

 
317,145

 
1,606

 
1,555

 

 
322,528

 
1,606

Commercial & Industrial
2,663

 
441

 
430,889

 
2,722

 
1,813

 

 
435,365

 
3,163

Residential 1-4 Family
13,150

 
418

 
944,160

 
4,996

 
21,159

 

 
978,469

 
5,414

Auto
199

 
1

 
233,862

 
1,702

 

 

 
234,061

 
1,703

HELOC
2,478

 
76

 
512,457

 
2,858

 
1,791

 

 
516,726

 
2,934

Consumer and all other
574

 
95

 
302,927

 
1,549

 
526

 

 
304,027

 
1,644

Total loans held for investment, net
$
76,562

 
$
2,002

 
$
5,521,163

 
$
32,045

 
$
73,737

 
$

 
$
5,671,462

 
$
34,047



 
 
The following table shows the allowance for loan loss activity, balances for allowance for loan losses, and loan balances based on impairment methodology by segment for the year ended and as of December 31, 2014. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories (dollars in thousands):
 
Allowance for loan losses
 
Balance,
beginning of the year
 
Recoveries
credited to
allowance
 
Loans charged
off
 
Provision
charged to
operations
 
Balance, end of
period
Construction and Land Development
$
4,387

 
$
150

 
$
(1,095
)
 
$
1,414

 
$
4,856

Commercial Real Estate - Owner Occupied
4,716

 
247

 
(643
)
 
320

 
4,640

Commercial Real Estate - Non-Owner Occupied
5,285

 
41

 
(282
)
 
2,212

 
7,256

Multifamily Real Estate
1,227

 
4

 
(3
)
 
146

 
1,374

Commercial & Industrial
2,021

 
316

 
(1,557
)
 
1,830

 
2,610

Residential 1-4 Family
6,272

 
1,753

 
(2,856
)
 
438

 
5,607

Auto
1,414

 
325

 
(596
)
 
154

 
1,297

HELOC
2,697

 
113

 
(976
)
 
841

 
2,675

Consumer and all other
2,116

 
520

 
(1,012
)
 
445

 
2,069

Total
$
30,135

 
$
3,469

 
$
(9,020
)
 
$
7,800

 
$
32,384


 
Loans individually evaluated
for impairment
 
Loans collectively evaluated for
impairment
 
Loans acquired with
deteriorated credit quality
 
Total
 
Loans
 
ALL
 
Loans
 
ALL
 
Loans
 
ALL
 
Loans
 
ALL
Construction and Land Development
$
51,342

 
$
266

 
$
593,148

 
$
4,590

 
$
11,890

 
$

 
$
656,380

 
$
4,856

Commercial Real Estate - Owner Occupied
21,673

 
355

 
816,360

 
4,285

 
31,167

 

 
869,200

 
4,640

Commercial Real Estate - Non-Owner Occupied
28,648

 
2,017

 
1,129,032

 
5,239

 
25,834

 

 
1,183,514

 
7,256

Multifamily Real Estate
4,608

 

 
289,764

 
1,374

 
2,994

 

 
297,366

 
1,374

Commercial & Industrial
5,813

 
570

 
364,843

 
2,040

 
3,440

 

 
374,096

 
2,610

Residential 1-4 Family
14,905

 
1,210

 
941,550

 
4,397

 
26,619

 

 
983,074

 
5,607

Auto
2

 

 
207,811

 
1,297

 

 

 
207,813

 
1,297

HELOC
1,325

 
12

 
520,016

 
2,663

 
2,000

 

 
523,341

 
2,675

Consumer and all other
2,097

 
101

 
247,271

 
1,968

 
1,844

 

 
251,212

 
2,069

Total loans held for investment, net
$
130,413

 
$
4,531

 
$
5,109,795

 
$
27,853

 
$
105,788

 
$

 
$
5,345,996

 
$
32,384




 
 
The Company uses a risk rating system and past due status as the primary credit quality indicators for the loan categories. The risk rating system on a scale of 0 through 9 is used to determine risk level as used in the calculation of the allowance for loan losses; on those loans without a risk rating, the Company uses past due status to determine risk level. The risk levels, as described below, do not necessarily follow the regulatory definitions of risk levels with the same name. A general description of the characteristics of the risk levels follows:
 
Pass is determined by the following criteria:
Risk rated 0 loans have little or no risk and are generally General Obligation Municipal Credits with A or better debt ratings;
Risk rated 1 loans have little or no risk and are generally secured by cash or cash equivalents;
Risk rated 2 loans have minimal risk to well qualified borrowers and no significant questions as to safety;
Risk rated 3 loans are satisfactory loans with strong borrowers and secondary sources of repayment;
Risk rated 4 loans are satisfactory loans with borrowers not as strong as risk rated 3 loans and may exhibit a greater
degree of financial risk based on the type of business supporting the loan; or
Loans that are not risk rated but that are 0 to 29 days past due.

Special Mention is determined by the following criteria:
Risk rated 5 loans are watch loans that warrant more than the normal level of supervision and have the possibility of an event occurring that may weaken the borrower’s ability to repay;
Risk rated 6 loans have increasing potential weaknesses beyond those at which the loan originally was granted and if
not addressed could lead to inadequately protecting the Company’s credit position; or
Loans that are not risk rated but that are 30 to 89 days past due.

Substandard is determined by the following criteria:
Risk rated 7 loans are substandard loans and are inadequately protected by the current sound worth or paying capacity
of the obligor or the collateral pledged; these have well defined weaknesses that jeopardize the liquidation of the debt
with the distinct possibility the Company will sustain some loss if the deficiencies are not corrected; or
Loans that are not risk rated but that are 90 to 149 days past due.

Doubtful is determined by the following criteria:
Risk rated 8 loans are doubtful of collection and the possibility of loss is high but pending specific borrower plans for
recovery, its classification as a loss is deferred until its more exact status is determined;
Risk rated 9 loans are loss loans which are considered uncollectable and of such little value that their continuance as
    bankable assets is not warranted; or
Loans that are not risk rated but that are over 149 days past due.

The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2016 (dollars in thousands):
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Construction and Land Development
$
667,018

 
$
69,311

 
$
11,857

 
$
23

 
$
748,209

Commercial Real Estate - Owner Occupied
801,565

 
32,364

 
5,533

 

 
839,462

Commercial Real Estate - Non-Owner Occupied
1,505,153

 
37,631

 
4,208

 

 
1,546,992

Multifamily Real Estate
312,711

 
19,499

 

 

 
332,210

Commercial & Industrial
539,999

 
9,391

 
1,062

 

 
550,452

Residential 1-4 Family
986,973

 
18,518

 
4,813

 
3,043

 
1,013,347

Auto
258,188

 
3,648

 
135

 
100

 
262,071

HELOC
519,928

 
4,225

 
969

 
601

 
525,723

Consumer and all other
425,520

 
3,491

 
40

 
251

 
429,302

Total
$
6,017,055

 
$
198,078

 
$
28,617

 
$
4,018

 
$
6,247,768


The following table shows the recorded investment in all loans, excluding PCI loans, by segment with their related risk level as of December 31, 2015 (dollars in thousands):

 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Construction and Land Development
$
663,067

 
$
52,650

 
$
27,980

 
$
37

 
$
743,734

Commercial Real Estate - Owner Occupied
800,979

 
20,856

 
8,931

 
1,932

 
832,698

Commercial Real Estate - Non-Owner Occupied
1,228,956

 
22,341

 
5,664

 

 
1,256,961

Multifamily Real Estate
315,128

 
2,017

 
3,828

 

 
320,973

Commercial & Industrial
414,333

 
16,724

 
2,396

 
99

 
433,552

Residential 1-4 Family
912,839

 
34,728

 
8,037

 
1,706

 
957,310

Auto
230,670

 
3,109

 
194

 
88

 
234,061

HELOC
507,514

 
4,801

 
1,611

 
1,009

 
514,935

Consumer and all other
299,014

 
3,996

 
231

 
260

 
303,501

Total
$
5,372,500

 
$
161,222

 
$
58,872

 
$
5,131

 
$
5,597,725



The following table shows the recorded investment in only PCI loans by segment with their related risk level as of December 31, 2016 (dollars in thousands):
 
Pass
 
Special Mention
 
Substandard
 
Doubtful
 
Total
Construction and Land Development
$
1,092

 
$
1,432

 
$
398

 
$

 
$
2,922

Commercial Real Estate - Owner Occupied
5,520

 
8,889

 
3,934

 

 
18,343

Commercial Real Estate - Non-Owner Occupied
10,927

 
4,638

 
1,738

 

 
17,303

Multifamily Real Estate
343

 
1,723

 

 

 
2,066

Commercial & Industrial
107

 
480

 
487

 

 
1,074

Residential 1-4 Family
8,557

 
4,455

 
2,672