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

12 Months Ended

Dec. 31, 2015

Summary of Components of Loans 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,
	2015			2014
	(Dollars in thousands)
Commercial and industrial	$	434,099		$	390,011
SBA		106,867			134,265
Real estate:
Commercial real estate		2,643,184			2,487,803
Construction		68,563			55,173
SFR mortgage		233,754			205,124
Dairy & livestock and agribusiness		305,509			279,173
Municipal lease finance receivables		74,135			77,834
Consumer and other loans		69,278			69,884

Gross loans, excluding PCI loans		3,935,389			3,699,267
Less: Deferred loan fees, net		(8,292	)		(8,567	)

Gross loans, excluding PCI loans, net of deferred loan fees		3,927,097			3,690,700
Less: Allowance for loan losses		(59,156	)		(59,825	)

Net loans, excluding PCI loans		3,867,941			3,630,875

PCI Loans		93,712			133,496
Discount on PCI loans		(3,872	)		(7,129	)

PCI loans, net		89,840			126,367

Total loans and lease finance receivables	$	3,957,781		$	3,757,242

Summary of Loan, Excluding PCI Loans by Internal Risk Ratings

The following table summarizes each type of loans, excluding PCI loans, according to our internal risk ratings for the periods presented.


	December 31, 2015
	Pass		Watch List		Special Mention		Substandard		Doubtful & Loss		Total
	(Dollars in thousands)
Commercial and industrial	$	299,436	$	99,215	$	33,000	$	2,403	$	45	$	434,099
SBA		65,827		21,614		13,169		4,854		1,403		106,867
Real estate:
Commercial real estate
Owner occupied		638,026		134,088		54,758		11,481		—		838,353
Non-owner occupied		1,545,688		195,927		26,170		37,046		—		1,804,831
Construction
Speculative		31,999		6,187		—		7,651		—		45,837
Non-speculative		22,726		—		—		—		—		22,726
SFR mortgage		209,518		17,689		3,556		2,991		—		233,754
Dairy & livestock and agribusiness		131,026		154,621		19,862		—		—		305,509
Municipal lease finance receivables		44,805		24,389		4,941		—		—		74,135
Consumer and other loans		53,027		11,817		1,618		2,708		108		69,278

Total gross loans, excluding PCI loans	$	3,042,078	$	665,547	$	157,074	$	69,134	$	1,556	$	3,935,389


	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

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

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 for the periods presented.


	For the Year Ended December 31, 2015
	Ending Balance December 31, 2014		Charge-offs			Recoveries		(Recapture of) Provision for Loan Losses (1)			Ending Balance December 31, 2015
	(Dollars in thousands)
Commercial and industrial	$	7,074	$	(411	)	$	319	$	1,606		$	8,588
SBA		2,557		(37	)		41		(1,568	)		993
Real estate:
Commercial real estate		33,373		(117	)		4,330		(591	)		36,995
Construction		988		—			581		820			2,389
SFR mortgage		2,344		(215	)		186		(212	)		2,103
Dairy & livestock and agribusiness		5,479		—			407		143			6,029
Municipal lease finance receivables		1,412		—			—		(259	)		1,153
Consumer and other loans		1,262		(229	)		76		(203	)		906
Unallocated (1)		5,336		—			—		(5,336	)		—

Total allowance for loan losses	$	59,825	$	(1,009	)	$	5,940	$	(5,600	)	$	59,156


	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 (1)		5,953		—			—		(617	)		5,336

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

(1)

Based upon changes to our ALLL methodology, as described earlier in this document, beginning with the fourth quarter of 2015 and coinciding with the implementation of the new ALLL methodology, the Bank’s previous “unallocated reserve” was absorbed into the qualitative component of the allowance.


	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

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 for the periods presented.


	December 31, 2015
	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	$	1,643	$	432,456	$	626	$	7,962
SBA		3,248		103,619		10		983
Real estate:
Commercial real estate		40,293		2,602,891		—		36,995
Construction		7,651		60,912		13		2,376
SFR mortgage		6,253		227,501		20		2,083
Dairy & livestock and agribusiness		3,685		301,824		—		6,029
Municipal lease finance receivables		—		74,135		—		1,153
Consumer and other loans		933		68,345		—		906
Unallocated		—		—		—		—

Total	$	63,706	$	3,871,683	$	669	$	58,487


	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

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, and the aging of, past due and nonaccrual loans, excluding PCI loans, by type of loans for the periods presented.


	December 31, 2015
	30-59 Days Past Due		60-89 Days Past Due		Total Past Due and Accruing		Nonaccrual (1)		Current		Total Loans and Financing Receivables
	(Dollars in thousands)
Commercial and industrial	$	—	$	—	$	—	$	704	$	433,395	$	434,099
SBA		—		—		—		2,567		104,300		106,867
Real estate:
Commercial real estate
Owner occupied		—		—		—		4,174		834,179		838,353
Non-owner occupied		354		—		354		10,367		1,794,110		1,804,831
Construction
Speculative (2)		—		—		—		—		45,837		45,837
Non-speculative		—		—		—		—		22,726		22,726
SFR mortgage		1,082		—		1,082		2,688		229,984		233,754
Dairy & livestock and agribusiness		—		—		—		—		305,509		305,509
Municipal lease finance receivables		—		—		—		—		74,135		74,135
Consumer and other loans		—		—		—		519		68,759		69,278

Total gross loans, excluding PCI Loans	$	1,436	$	—	$	1,436	$	21,019	$	3,912,934	$	3,935,389

(1)	As of December 31, 2015, $7.9 million of nonaccruing loans were current, $456,000 were 30-59 days past due, $9.1 million were 60-89 days past due and $3.5 million were 90+ days past due.

(2)	Speculative construction loans are generally for properties where there is no identified buyer or renter.


	December 31, 2014
	30-59 Days Past Due		60-89 Days Past Due		Total Past Due and Accruing		Nonaccrual (1)		Current		Total Loans and Financing 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 (2)		—		—		—		—		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.

(2)	Speculative construction loans are generally for properties where there is no identified buyer or renter

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

The following tables present information for held-for-investment loans, excluding PCI loans, individually evaluated for impairment by type of loans, as and for the periods presented.


	As of and For the Year Ended December 31, 2015
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
With no related allowance recorded:
Commercial and industrial	$	1,017	$	1,894	$	—	$	1,122	$	38
SBA		3,207		3,877		—		3,333		51
Real estate:
Commercial real estate
Owner occupied		6,252		7,445		—		6,718		97
Non-owner occupied		34,041		37,177		—		34,639		1,787
Construction
Speculative		—		—		—		—		—
Non-speculative		—		—		—		—		—
SFR mortgage		5,665		6,453		—		5,771		109
Dairy & livestock and agribusiness		3,685		3,684		—		3,687		177
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		890		1,454		—		922		17

Total		54,757		61,984		—		56,192		2,276

With a related allowance recorded:
Commercial and industrial		626		695		626		637		—
SBA		41		47		10		45		—
Real estate:
Commercial real estate
Owner occupied		—		—		—		—		—
Non-owner occupied		—		—		—		—		—
Construction
Speculative		7,651		7,651		13		7,651		388
Non-speculative		—		—		—		—		—
SFR mortgage		588		640		20		607		12
Dairy & livestock and agribusiness		—		—		—		—		—
Municipal lease finance receivables		—		—		—		—		—
Consumer and other loans		43		45		—		45		—

Total		8,949		9,078		669		8,985		400

Total impaired loans	$	63,706	$	71,062	$	669	$	65,177	$	2,676


	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

Summary of Activity Related to Troubled Debt Restructurings

The following table provides a summary of the activity related to TDRs for the periods presented.


	For the Year Ended December 31,
	2015			2014 (1)
	(Dollars in thousands)
Performing TDRs:
Beginning balance	$	53,589		$	66,955
New modifications		3,689			462
Payoffs and payments, net		(15,235	)		(14,527	)
TDRs returned to accrual status		644			699
TDRs placed on nonaccrual status		—			—

Ending balance	$	42,687		$	53,589

Nonperforming TDRs:
Beginning balance	$	20,285		$	25,119
New modifications		661			4,372
Charge-offs		—			(1,061	)
Transfer to OREO		(842	)		—
Payoffs and payments, net		(6,838	)		(7,446	)
TDRs returned to accrual status		(644	)		(699	)
TDRs placed on nonaccrual status		—			—

Ending balance	$	12,622		$	20,285

Total TDRs	$	55,309		$	73,874

(1)

New modifications for the year ended December 31, 2014 included six TDRs acquired from ASB.

Summary of Loans Modified as Troubled Debt Restructurings

The following tables summarize loans modified as troubled debt restructurings for the periods presented.

Modifications (1)


	For the Year Ended December 31, 2015
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at December 31, 2015		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial and industrial:
Interest rate reduction		—	$	—	$	—	$	—	$	—
Change in amortization period or maturity		1		203		203		203		203
SBA:
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		1		330		330		320		—
Real estate:
Commercial real estate:
Owner occupied
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		2		823		823		821		—
Non-owner occupied
Interest rate reduction		1		2,376		2,376		2,316		—
Change in amortization period or maturity		1		280		280		280		—
SFR mortgage:
Interest rate reduction		1		322		322		326		—
Change in amortization period or maturity		—		—		—		—		—

Total loans		7	$	4,334	$	4,334	$	4,266	$	203


	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		199		187		—
Change in amortization period or maturity		—		—		—		—		—
Non-owner occupied
Interest rate reduction (3)		3		3,573		3,573		3,469		—
Change in amortization period or maturity		—		—		—		—		—
Dairy & livestock and agribusiness:
Interest rate reduction		—		—		—		—		—
Change in amortization period or maturity		—		—		—		—		—
Consumer:
Interest rate reduction (4)		1		421		421		419		—
Change in amortization period or maturity		—		—		—		—		—

Total loans		8	$	4,746	$	4,746	$	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

(1)	The tables above 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 TDRs acquired from ASB.

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