Loans and Lease Finance Receivables and Allowance for Loans Losses (Tables)

12 Months Ended

Dec. 31, 2014

Summary of Components of Loan and Lease Finance Receivables, Excluding PCI Loans

The following table provides a summary of total loans and lease finance receivables, excluding PCI loans, by type:


	December 31, 2014			December 31, 2013
	(Dollars in thousands)
Commercial and industrial	$	390,011		$	376,800
SBA		134,265			135,992
Real estate:
Commercial real estate		2,487,803			2,207,515
Construction		55,173			47,109
SFR mortgage		205,124			189,233
Dairy & livestock and agribusiness		279,173			294,292
Municipal lease finance receivables		77,834			89,106
Consumer and other loans		69,884			55,103

Gross loans, excluding PCI loans,		3,699,267			3,395,150
Less:
Deferred loan fees, net		(8,567	)		(9,234	)

Gross loans, excluding PCI loans, net of deferred loan fees		3,690,700			3,385,916
Less: Allowance for loan losses		(59,825	)		(75,235	)

Net loans, excluding PCI loans		3,630,875			3,310,681

PCI Loans		133,496			173,104
Discount on PCI loans		(7,129	)		(12,789	)

PCI loans, net		126,367			160,315

Total loans and lease finance receivables	$	3,757,242		$	3,470,996

Summary of Activity Related to Loans Held-for-Sale

The following table provides a summary of the activity related to loans held-for-sale for the years ended December 31, 2014 and 2013:


	For the Year Ended December 31,
	2014			2013
	(Dollars in thousands)
Balance, beginning of period	$	3,667		$	—
Originations of mortgage loans		—			485
Sales of mortgage loans		—			(485	)
Transfer of mortgage loans to held for investment		—			—
Sales of other loans		(3,667	)		—
Transfers of other loans to held-for-sale		—			3,667
Write-down of loans held-for-sale		—			—

Balance, end of period	$	—		$	3,667

Summary of Loan, Excluding PCI Loans by Internal Risk Ratings

The following table summarizes each class of loans, excluding PCI loans, according to internal risk ratings as of December 31, 2014 and 2013:


	December 31, 2014
	Pass		Watch List		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial and industrial	$	234,029	$	105,904	$	33,795	$	16,031	$	252	$	390,011
SBA		84,769		24,124		15,858		7,920		1,594		134,265
Real estate:
Commercial real estate
Owner occupied		552,072		159,908		46,248		32,139		—		790,367
Non-owner occupied		1,347,006		241,809		56,353		52,268		—		1,697,436
Construction
Speculative		28,310		613		—		7,651		—		36,574
Non-speculative		18,071		528		—		—		—		18,599
SFR mortgage		174,311		20,218		2,442		8,153		—		205,124
Dairy & livestock and agribusiness		174,783		85,660		8,612		10,015		103		279,173
Municipal lease finance receivables		35,463		22,349		20,022		—		—		77,834
Consumer and other loans		62,904		2,233		1,789		2,763		195		69,884

Total gross loans, excluding PCI loans	$	2,711,718	$	663,346	$	185,119	$	136,940	$	2,144	$	3,699,267


	December 31, 2013
	Pass		Watch List		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial and industrial	$	228,976	$	100,016	$	38,219	$	9,560	$	29	$	376,800
SBA		83,951		28,052		15,198		8,390		401		135,992
Real estate:
Commercial real estate
Owner occupied		449,853		147,165		74,999		57,934		—		729,951
Non-owner occupied		1,104,065		242,431		81,088		49,980		—		1,477,564
Construction
Speculative		8,611		21		1,529		17,617		—		27,778
Non-speculative		6,940		3,190		—		9,201		—		19,331
SFR mortgage		152,500		20,485		3,302		12,946		—		189,233
Dairy & livestock and agribusiness		43,588		86,580		92,514		69,005		2,605		294,292
Municipal lease finance receivables		43,445		18,338		20,893		6,430		—		89,106
Consumer and other loans		43,225		6,938		3,449		1,491		—		55,103

Total gross loans, excluding PCI loans	$	2,165,154	$	653,216	$	331,191	$	242,554	$	3,035	$	3,395,150

Schedule of Balance and Activity Related to Allowance for Loan Losses for Held-for-Investment Loans, Excluding PCI Loans by Portfolio Segment

The following tables present the balance and activity related to the allowance for loan losses for held-for-investment loans, excluding PCI loans, by portfolio segment as of December 31, 2014, 2013 and 2012:


	For the Year Ended December 31, 2014
	Ending Balance December 31, 2013		Charge-offs			Recoveries		(Recapture of) Provision for Loan Losses			Ending Balance December 31, 2014
	(Dollars in thousands)
Commercial and industrial	$	8,502	$	(888	)	$	873	$	(1,413	)	$	7,074
SBA		2,332		(50	)		114		161			2,557
Real estate:
Commercial real estate		39,402		(353	)		140		(5,816	)		33,373
Construction		1,305		—			885		(1,202	)		988
SFR mortgage		2,718		—			401		(775	)		2,344
Dairy & livestock and agribusiness		11,728		(1,061	)		492		(5,680	)		5,479
Municipal lease finance receivables		2,335		—			—		(923	)		1,412
Consumer and other loans		960		(17	)		154		165			1,262
Unallocated		5,953		—			—		(617	)		5,336

Total allowance for loan losses	$	75,235	$	(2,369	)	$	3,059	$	(16,100	)	$	59,825


	For the Year Ended December 31, 2013
	Ending Balance December 31, 2012		Charge-offs			Recoveries		(Recapture of) Provision for Loan Losses			Ending Balance December 31, 2013
	(Dollars in thousands)
Commercial and industrial	$	8,901	$	(2,491	)	$	544	$	1,548		$	8,502
SBA		2,751		—			215		(634	)		2,332
Real estate:
Commercial real estate		47,457		—			402		(8,457	)		39,402
Construction		2,291		—			703		(1,689	)		1,305
SFR mortgage		3,448		(252	)		367		(845	)		2,718
Dairy & livestock and agribusiness		18,696		—			109		(7,077	)		11,728
Municipal lease finance receivables		1,588		—			—		747			2,335
Consumer and other loans		1,170		(108	)		55		(157	)		960
Unallocated		6,139		—			—		(186	)		5,953

Total allowance for loan losses	$	92,441	$	(2,851	)	$	2,395	$	(16,750	)	$	75,235


	For the Year Ended December 31, 2012
	Ending Balance December 31, 2011		Charge-offs			Recoveries			(Recapture of) Provision for Loan Losses			Ending Balance December 31, 2012
	(Dollars in thousands)
Commercial and industrial	$	8,030	$	(1,158	)	$	876		$	1,153		$	8,901
SBA		2,624		(101	)		404			(176	)		2,751
Real estate:
Commercial real estate		47,841		(1,873	)		514			975			47,457
Construction		4,947		—			1,139			(3,795	)		2,291
SFR mortgage		4,032		(642	)		(108	)		166			3,448
Dairy & livestock and agribusiness		17,278		(1,150	)		166			2,402			18,696
Municipal lease finance receivables		2,403		—			—			(815	)		1,588
Consumer and other loans		1,590		(283	)		36			(173	)		1,170
Unallocated		5,219		—			—			920			6,139

Total allowance for loan losses	$	93,964	$	(5,207	)	$	3,027		$	657		$	92,441

Schedule of Recorded Investment in Loans Held-for-Investment, Excluding PCI Loans, and Related Allowance for Loan Losses by Portfolio Segment

The following tables present the recorded investment in loans held-for-investment, excluding PCI loans, and the related allowance for loan losses by portfolio segment, based on the Company’s methodology for determining the allowance for loan losses as December 31, 2014 and 2013:


	December 31, 2014
	Recorded Investment in Loans				Allowance for Loan Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
	(Dollars in thousands)
Commercial and industrial	$	3,020	$	386,991	$	615	$	6,459
SBA	$	3,180		131,085	$	296		2,261
Real estate:
Commercial real estate		48,011		2,439,792		154		33,219
Construction		7,651		47,522		—		988
SFR mortgage		6,979		198,145		35		2,309
Dairy & livestock and agribusiness		15,796		263,377		—		5,479
Municipal lease finance receivables		—		77,834		—		1,412
Consumer and other loans		1,155		58,749		449		813
Unallocated		—		9,980		—		5,336

Total	$	85,792	$	3,613,475	$	1,549	$	58,276


	December 31, 2013
	Recorded Investment in Loans				Allowance for Loan Losses
	Individually Evaluated for Impairment		Collectively Evaluated for Impairment		Individually Evaluated for Impairment		Collectively Evaluated for Impairment
	(Dollars in thousands)
Commercial and industrial	$	3,348	$	373,452	$	293	$	8,209
SBA		1,685		134,307		72	$	2,260
Real estate:
Commercial real estate		33,440		2,174,075		—		39,402
Construction		26,818		20,291		—		1,305
SFR mortgage		11,405		177,828		103		2,615
Dairy & livestock and agribusiness		29,812		264,480		2,702		9,026
Municipal lease finance receivables		—		89,106		—		2,335
Consumer and other loans		401		54,702		4		956
Unallocated								5,953

Total	$	106,909	$	3,288,241	$	3,174	$	72,061

Schedule of Recorded Investment in, and Aging of, Past Due and Nonaccrual Loans, Excluding PCI Loans by Class of Loans

The following tables present the recorded investment in the aging of past due and nonaccrual loans, excluding PCI loans, by class of loans as of December 31, 2014 and 2013:


	December 31, 2014
	30-59 Days Past Due		60-89 Days Past Due		Total Past Due and Accruing		Nonaccrual (1)		Current		Total Loans and Lease Finance Receivables
	(Dollars in thousands)
Commercial and industrial	$	943	$	35	$	978	$	2,308	$	386,725		390,011
SBA		75		—		75		2,481		131,709		134,265
Real estate:
Commercial real estate
Owner occupied		36		86		122		4,072		786,173		790,367
Non-owner occupied		—		—		—		19,246		1,678,190		1,697,436
Construction
Speculative		—		—		—				36,574		36,574
Non-speculative		—		—		—		—		18,599		18,599
SFR mortgage		425		—		425		3,240		201,459		205,124
Dairy & livestock and agribusiness		—		—		—		103		279,070		279,173
Municipal lease finance receivables		—		—		—		—		77,834		77,834
Consumer and other loans		64		17		81		736		69,067		69,884

Total gross loans, excluding PCI loans	$	1,543	$	138	$	1,681	$	32,186	$	3,665,400	$	3,699,267

(1)	As of December 31, 2014, $20.1 million of nonaccruing loans were current, $3.7 million were 30-59 days past due, $8.5 million were 90+ days past due.


	December 31, 2013
	30-59 Days Past Due		60-89 Days Past Due		Total Past Due and Accruing		Nonaccrual (1)		Current		Total Loans and Lease Finance Receivables
	(Dollars in thousands)
Commercial and industrial	$	900	$	93	$	993	$	2,175	$	373,632	$	376,800
SBA		—		—		—		1,686		134,306		135,992
Real estate:
Commercial real estate
Owner occupied		220		—		220		4,105		725,626		729,951
Non-owner occupied		303		—		303		8,305		1,468,956		1,477,564
Construction
Speculative		—		—		—		9,966		17,812		27,778
Non-speculative		—		—		—		—		19,331		19,331
SFR mortgage		773		935		1,708		7,577		179,948		189,233
Dairy & livestock and agribusiness		—		—		—		5,739		288,553		294,292
Municipal lease finance receivables		—		—		—		—		89,106		89,106
Consumer and other loans		75		—		75		401		54,627		55,103

Total gross loans, excluding PCI loans	$	2,271	$	1,028	$	3,299	$	39,954	$	3,351,897	$	3,395,150

(1)	As of December 31, 2013, $23.9 million of nonaccruing loans were current, $473,000 were 30-59 days past due, $854,000 were 60-89 days past due, and $14.7 million were 90+ days past due.

Schedule of Held-for-Investment Loans, Excluding PCI Loans, Individually Evaluated for Impairment by Class of Loans

The following tables present held-for-investment loans, excluding PCI loans, individually evaluated for impairment by class of loans, as of December 31, 2014, 2013 and 2012:


	As of and For the Year Ended December 31, 2014
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	2,391	$	3,624	$	—	$	2,487	$	41
SBA		1,853		2,197		—		1,886		53
Real estate:
Commercial real estate
Owner occupied		16,961		18,166		—		18,027		938
Non-owner occupied		30,068		38,156		—		30,133		723
Construction
Speculative		7,651		7,651		—		7,651		310
Non-speculative		—		—		—		—		—
SFR mortgage		6,512		7,493		—		6,566		110
Dairy & livestock and agribusiness		15,796		17,587		—		19,060		1,057
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		673		1,094		—		623		2

Total		81,905		95,968		—		86,433		3,234

With a related allowance recorded:
Commercial and industrial		629		698		615		552		—
SBA		1,327		1,591		296		714		—
Real estate:
Commercial real estate
Owner occupied		—		—		—		—		—
Non-owner occupied		982		1,278		154		573		—
Construction
Speculative		—		—		—		—		—
Non-speculative		—		—		—		—		—
SFR mortgage		467		484		35		474		—
Dairy & livestock and agribusiness		—		—		—		—		—
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		482		508		449		285		—

Total		3,887		4,559		1,549		2,598		—

Total impaired loans	$	85,792	$	100,527	$	1,549	$	89,031	$	3,234


	As of and For the Year Ended December 31, 2013
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	3,055	$	3,843	$	—	$	3,248	$	66
SBA		1,613		2,084		—		1,717		—
Real estate:
Commercial real estate
Owner occupied		13,041		14,133		—		13,463		548
Non-owner occupied		20,399		26,155		—		21,313		817
Construction
Speculative		17,617		18,408		—		18,043		310
Non-speculative		9,201		9,201		—		9,217		572
SFR mortgage		10,919		12,516		—		10,408		103
Dairy & livestock and agribusiness		17,702		17,702		—		19,205		434
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		385		445		—		389		—

Total		93,932		104,487		—		97,003		2,850

With a related allowance recorded:
Commercial and industrial		293		301		293		305		—
SBA		72		78		72		81		—
Real estate:
Commercial real estate
Owner occupied		—		—		—		—		—
Non-owner occupied		—		—		—		—		—
Construction
Speculative		—		—		—		—		—
Non-speculative		—		—		—		—		—
SFR mortgage		486		489		103		479		—
Dairy & livestock and agribusiness		12,110		12,783		2,702		13,377		209
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		16		19		4		18		—

Total		12,977		13,670		3,174		14,260		209

Total impaired loans	$	106,909	$	118,157	$	3,174	$	111,263	$	3,059


	As of and For the Year Ended December 31, 2012
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	1,936	$	2,476	$	—	$	2,131	$	43
SBA		1,449		1,739		—		1,635		—
Real estate:
Commercial real estate
Owner occupied		13,478		14,569		—		14,459		397
Non-owner occupied		28,639		38,633		—		29,801		670
Construction
Speculative		21,314		21,607		—		21,650		311
Non-speculative		9,219		9,219		—		9,219		574
SFR mortgage		11,079		14,342		—		11,292		54
Dairy & livestock and agribusiness		12,406		13,756		—		11,834		173
Municipal lease finance receivables		263		263		—		443		5
Consumer and other loans		142		196		—		145		—

Total		99,925		116,800		—		102,609		2,227

With a related allowance recorded:
Commercial and industrial		304		327		289		387		—
SBA		—		—		—		—		—
Real estate:
Commercial real estate
Owner occupied		19		19		2		28		—
Non-owner occupied		—		—		—		—		—
Construction
Speculative		—		—		—		—		—
Non-speculative		—		—		—		—		—
SFR mortgage		3,766		4,071		434		3,363		—
Dairy & livestock and agribusiness		4,303		4,340		1,596		4,017		73
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		73		74		11		75		—

Total		8,465		8,831		2,332		7,870		73

Total impaired loans	$	108,390	$	125,631	$	2,332	$	110,479	$	2,300

Summary of Activity Related to Troubled Debt Restructurings

The following table provides a summary of the activity related to TDRs for the years ended December 31, 2014, and 2013:


	For the Year Ended December 31,
	2014			2013
	(Dollars in thousands)
Performing TDRs:
Beginning balance	$	66,955		$	50,392
New modifications		462			30,796
Payoffs and payments, net		(14,527	)		(15,492	)
TDRs returned to accrual status		699			1,259
TDRs placed on nonaccrual status		—			—

Ending balance	$	53,589		$	66,955


	For the Year Ended December 31,
	2014			2013
	(Dollars in thousands)
Nonperforming TDRs:
Beginning balance	$	25,119		$	31,309
New modifications (1)		4,372			4,187
Charge-offs		(1,061	)		(92	)
Payoffs and payments, net		(7,446	)		(9,026	)
TDRs returned to accrual status		(699	)		(1,259	)
TDRs placed on nonaccrual status		—			—

Ending balance	$	20,285		$	25,119

Summary of Loans Modified as Troubled Debt Restructurings

The following are the loans modified as troubled debt restructurings for the years ended December 31, 2014, 2013, and 2012:

Modifications (1)


	For the Year Ended December 31, 2014
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at December 31, 2014		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial and industrial:
Interest rate reduction (3)(4)		3	$	553	$	553	$	522	$	185
Change in amortization period or maturity		—		—		—		—		—
Real estate:
Commercial real estate:
Owner occupied
Interest rate reduction (3)		1		199		—		187		—
Change in amortization period or maturity		—		—		—		—		—
Other		—		—		—		—		—
Non-owner occupied
Interest rate reduction (3)		3		3,573		—		3,469
Change in amortization period or maturity		—		—		—		—		—
Other		—		—		—		—		—
Dairy & livestock and agribusiness:
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity
Consumer
Interest rate reduction (4)		1		421		421		419		—

Total loans		8	$	4,746	$	974	$	4,597	$	185


	For the Year Ended December 31, 2013
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at December 31, 2013		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial and industrial:
Interest rate reduction		—	$	—	$	—	$	—	$	—
Change in amortization period or maturity		4		621		621		570		95
Real estate:
Commercial real estate:
Owner occupied
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		1		168		168		138		—
Non-owner occupied
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		—		—		—		—		—
Construction:
Speculative
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		—		—		—		—		—
SFR mortgage:
Interest rate reduction		3		1,365		1,365		1,349		—
Change in amortization period or maturity		—		—		—		—		—
Dairy & livestock and agribusiness:
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		10		26,915		26,915		22,662		149

Total loans		18	$	29,069	$	29,069	$	24,719	$	244


	For the Year Ended December 31, 2012
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at December 31 2012		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial and industrial:
Interest rate reduction		1	$	80	$	80	$	66	$	—
Change in amortization period or maturity		8		2,301		2,301		1,817		3
Real estate:
Commercial real estate:
Owner occupied
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		6		4,225		4,225		3,903		—
Non-owner occupied
Interest rate reduction		1		3,378		3,378		3,359		—
Change in amortization period or maturity		4		5,906		5,906		5,303		—
Construction:
Speculative
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		1		10,966		10,966		10,663		—
Non-speculative
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		—		—		—		—		—
Other		—		—		—		—		—
SFR mortgage:
Interest rate reduction		1		399		399		398		—
Change in amortization period or maturity		—		—		—		—		—
Dairy & livestock and agribusiness:
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		7		9,447		9,447		9,184		—
Municipal lease finance receivables
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		2		519		519		263		—

Total loans		31	$	37,221	$	37,221	$	34,956	$	3

(1)	The tables exclude modified loans that were paid off prior to the end of the period.

(2)	Financial effects resulting from modifications represent charge-offs and specific allowance recorded at modification date.

(3)	New modifications for the year ended December 31, 2014 included six TDR’s acquired from ASB.

(4)	New modifications for the year ended December 31, 2014 included three TDR’s that encompass both an interest rate reduction and a maturity extension.