5. LOANS

The following details our loan portfolio by category:


	September 30, 2015		December 31, 2014
(In Thousands)
Commercial and industrial	$	938,060	$	920,072
Owner occupied commercial		811,548		788,598
Commercial mortgages		874,316		805,459
Construction		203,161		142,497
Residential		199,696		218,329
Consumer		341,210		327,543

	$	3,367,991	$	3,202,498
Less:
Deferred fees, net	$	7,559	$	6,420
Allowance for loan losses		36,412		39,426

Net loans	$	3,324,020	$	3,156,652

Acquired Credit Impaired Loans

The following table details the loans acquired through the FNBW merger on September 5, 2014 that are accounted for in accordance with FASB ASC 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality (ASC 310-30).


(In Thousands)	September 5, 2014
Contractually required principal and interest at acquisition	$	27,086
Contractual cash flows not expected to be collected (nonaccretable difference)		7,956

Expected cash flows at acquisition		19,130
Interest component of expected cash flows (accretable yield)		1,790

Fair value of acquired loans accounted for under FASB ASC 310-30	$	17,340

The following is the outstanding principal balance and carrying amounts for acquired credit impaired loans for which the company applies ASC 310-30 as of September 30, 2015:


(In Thousands)	September 30, 2015
Outstanding principal balance	$	18,546
Carrying amount		12,767
Allowance for loan losses		436

The following table presents the changes in accretable yield on the acquired credit impaired loans for the following nine month period:


(In Thousands)	January 1 through September 30, 2015
Balance at beginning of period	$	1,498
Accretion		(822	)
Reclassification from nonaccretable difference		1,827
Additions/adjustments		(363	)

Balance at the end of the period	$	2,140