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Loans
 12 Months Ended
Dec. 31, 2014
Loans Receivable, Net [Abstract]  
Loans
LOANS

The following summarizes the Company’s major classifications for loans (in thousands):

 
December 31, 2014
December 31, 2013
 
 
 
Residential real estate
$
1,294,576

$
1,204,450

Home equity – junior liens
145,604

146,090

Commercial and industrial
132,641

148,302

Commercial real estate
1,036,738

1,057,048

Consumer
39,705

46,402

DDA overdrafts
2,802

3,905

Gross loans
2,652,066

2,606,197

Allowance for loan losses
(20,150
)
(20,575
)
Net loans
$
2,631,916

$
2,585,622


 
Construction loans of $23.0 million and $17.3 million are included within residential real estate loans at December 31, 2014 and December 31, 2013, respectively.  Construction loans of $28.7 million and $24.0 million are included within commercial real estate loans at December 31, 2014 and December 31, 2013, respectively.  The Company’s commercial and residential real estate construction loans are primarily secured by real estate within the Company’s principal markets.  These loans were originated under the Company’s loan policy, which is focused on the risk characteristics of the loan portfolio, including construction loans.  Adequate consideration has been given to these loans in establishing the Company’s allowance for loan losses.
 
The following table details the loans acquired in conjunction with the Virginia Savings and Community acquisitions (in thousands):

 
Virginia Savings
Community
Total
December 31, 2014
 
 
 
Outstanding loan balance
$
38,345

$
219,923

$
258,268

 
 
 
 
Credit-impaired loans:
 
 
 
Carrying value
1,964

15,365

17,329

Contractual principal and interest
2,407

23,277

25,684

 
 
 
 
December 31, 2013
 
 
 
Outstanding loan balance
$
48,833

$
279,890

$
328,723

 
 
 
 
Credit-impaired loans:
 
 
 
Carrying value
3,182

26,330

29,512

Contractual principal and interest
3,932

38,566

42,498



    





Changes in the accretable yield and the carrying amount of the credit-impaired loans for the year December 31, 2014 is as follows (in thousands):

 
Virginia Savings
Community
Total
 
Accretable Yield
Carrying Amount
of Loans
Accretable Yield
Carrying Amount
of Loans
Accretable Yield
Carrying Amount
of Loans
Balance at the beginning of the period
$
698

$
3,182

$
10,389

$
26,330

$
11,087

$
29,512

Accretion
(288
)
288

(2,725
)
2,725

(3,013
)
3,013

Net reclassifications to accretable from non-accretable
385

—

4,121

—

4,506

—

Payments received, net
—

(1,506
)
—

(13,690
)
—

(15,196
)
Disposals
(248
)
—

(1,420
)
—

(1,668
)
—

Balance at the end of period
$
547

$
1,964

$
10,365

$
15,365

$
10,912

$
17,329



Increases in expected cash flow subsequent to the acquisition are recognized first as a reduction of any previous impairment, then prospectively through adjustment of the yield on the loans or pools over its remaining life, while decreases in expected cash flows are recognized as impairment through a provision for loan loss and an increase in the allowance for purchased credit-impaired loans.