Note 5 - Loans

12 Months Ended

Dec. 31, 2015

Receivables [Abstract]

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

5.     Loans

      Most of the Company’s business activity is predominately with Asian customers located in Southern and Northern California; New York City; Houston and Dallas, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; Nevada; and Hong Kong. The Company has no specific industry concentration, and generally its loans are collateralized with real property or other pledged collateral of the borrowers. Loans are generally expected to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the secured collateral.

The components of loans in the Consolidated Balance Sheets as of December 31, 2015, and December 31, 2014, were as follows:

	As of December 31,
	2015			2014
	(In thousands)
Type of Loans:
Commercial loans	$	2,316,863		$	2,382,493
Real estate construction loans		441,543			298,654
Commercial mortgage loans		5,301,218			4,486,443
Residential mortgage loans		1,932,355			1,570,059
Equity lines		168,980			172,879
Installment and other loans		2,493			3,552
Gross loans		10,163,452			8,914,080
Less:
Allowance for loan losses		(138,963	)		(161,420	)
Unamortized deferred loan fees		(8,262	)		(12,392	)
Total loans and leases, net	$	10,016,227		$	8,740,268
Loans held for sale	$	6,676		$	973

The Company pledged real estate loans of $6.8 billion at December 31, 2015, and $3.8 billion at December 31, 2014, to the Federal Home Loan Bank of San Francisco under its blanket lien pledging program. In addition, the Bank pledged $71.3 million at December 31, 2015, and $127.2 million at December 31, 2014, of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program.

Loans serviced for others as of December 31, 2015, totaled $356.7 million and were comprised of $138.0 million of residential mortgages, $90.9 million of commercial real estate loans, $77.3 million of construction loans, and $50.5 million of commercial loans.

      The Company has entered into transactions with its directors, executive officers, or principal holders of its equity securities, or the associates of such persons (“Related Parties”). Such transactions were made in the ordinary course of business on substantially the same terms and conditions, including interest rates and collateral, as those prevailing at the same time for comparable transactions with customers who are not related parties. In management’s opinion, these transactions did not involve more than normal credit risk or present other unfavorable features. All loans to Related Parties were current as of December 31, 2015. An analysis of the activity with respect to loans to Related Parties for the years indicated is as follows:

	December 31,
	2015			2014
	(In thousands)
Balance at beginning of year	$	83,812		$	126,985
Additional loans made		54,975			76,610
Payment received		(47,167	)		(119,783	)
Balance at end of year	$	91,620		$	83,812

At December 31, 2015, recorded investment in impaired loans totaled $133.8 million and was comprised of nonaccrual loans, excluding loans held for sale, of $52.1 million and accruing TDR’s of $81.7 million. At December 31, 2014, recorded investment in impaired loans totaled $174.5 million and was comprised of nonaccrual loans, excluding loans held for sale, of $70.2 million and accruing TDR’s of $104.3 million. The average balance of impaired loans was $162.9 million in 2015 and $190.2 million in 2014. We considered all non-accrual loans and troubled debt restructurings ("TDR") to be impaired. Interest recognized on impaired loans totaled $4.0 million in 2015 and $5.3 million in 2014. The Bank recognizes interest income on impaired loans based on its existing method of recognizing interest income on non-accrual loans except accruing TDRs. For impaired loans, the amounts previously charged off represent 22.4% at December 31, 2015, and 17.1% at December 31, 2014, of the contractual balances for impaired loans. The following table presents impaired loans and the related allowance as of the dates indicated:

	Impaired Loans
	As of December 31, 2015						As of December 31, 2014
	Unpaid Principal Balance		Recorded Investment		Allowance		Unpaid Principal Balance		Recorded Investment		Allowance
	(In thousands)
With no allocated allowance
Commercial loans	$	15,493	$	6,721	$	-	$	19,479	$	18,452	$	-
Real estate construction loans		51,290		22,002		-		32,924		17,025		-
Commercial mortgage loans		59,954		54,625		-		77,474		75,172		-
Residential mortgage and equity lines		3,233		3,026		-		2,518		2,518		-
Subtotal	$	129,970	$	86,374	$	-	$	132,395	$	113,167	$	-
With allocated allowance
Commercial loans	$	7,757	$	6,847	$	530	$	7,003	$	5,037	$	1,263
Real estate construction loans		-		-		-		19,006		8,703		1,077
Commercial mortgage loans		28,258		27,152		6,792		38,197		34,022		8,993
Residential mortgage and equity lines		14,383		13,437		427		14,019		13,590		465
Subtotal	$	50,398	$	47,436	$	7,749	$	78,225	$	61,352	$	11,798
Total impaired loans	$	180,368	$	133,810	$	7,749	$	210,620	$	174,519	$	11,798

The following table presents the average balance and interest income recognized related to impaired loans for the periods indicated:

	For the year ended December 31,
	2015		2014		2013		2015		2014		2013
	Average Recorded Investment						Interest Income Recognized
	(In thousands)
Commercial loans	$	23,960	$	26,128	$	27,123	$	546	$	878	$	770
Real estate construction loans		22,066		32,439		37,875		261		264		284
Commercial mortgage loans		100,118		114,248		138,121		2,708		3,735		4,256
Residential mortgage and equity lines		16,801		17,411		18,033		482		462		289
Subtotal	$	162,945	$	190,226	$	221,152	$	3,997	$	5,339	$	5,599

The following is a summary of non-accrual loans as of December 31, 2015, 2014, and 2013 and the related net interest foregone for the years then ended:

	2015		2014		2013
	(In thousands)
Non-accrual portfolio loans	$	52,130	$	70,163	$	83,183
Non-accrual loans held-for-sale		5,944		973		-
Total non-accrual loans	$	58,074	$	71,136	$	83,183
Contractual interest due	$	5,732	$	6,663	$	5,851
Interest recognized		119		217		22
Net interest foregone	$	5,613	$	6,446	$	5,829

The following tables present the aging of the loan portfolio by type as of December 31, 2015, and December 31, 2014:

	As of December 31, 2015
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
	(In thousands)
Type of Loans:
Commercial loans	$	8,367	$	221	$	-	$	3,545	$	12,133	$	2,304,730	$	2,316,863
Real estate construction loans		7,285		-		-		16,306		23,591		417,952		441,543
Commercial mortgage loans		2,243		2,223		-		25,231		29,697		5,271,521		5,301,218
Residential mortgage loans		4,959		1,038		-		7,048		13,045		2,088,290		2,101,335
Installment and other loans		-		-		-		-				2,493		2,493
Total loans	$	22,854	$	3,482	$	-	$	52,130	$	78,466	$	10,084,986	$	10,163,452

	As of December 31, 2014
	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
	(In thousands)
Type of Loans:
Commercial loans	$	11,595	$	1,238	$	-	$	6,983	$	19,816	$	2,362,677	$	2,382,493
Real estate construction loans		1,416		-		-		19,963		21,379		277,275		298,654
Commercial mortgage loans		17,654		3,909		-		35,606		57,169		4,429,274		4,486,443
Residential mortgage loans		5,634		732		-		7,611		13,977		1,728,961		1,742,938
Installment and other loans		60		-		-		-		60		3,492		3,552
Total loans	$	36,359	$	5,879	$	-	$	70,163	$	112,401	$	8,801,679	$	8,914,080

The determination of the amount of the allowance for credit losses for problem loans is based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for credit losses. The nature of the process by which the Bank determines the appropriate allowance for credit losses requires the exercise of considerable judgment. This allowance evaluation process is also applied to TDRs since TDRs are considered to be impaired loans.

At December 31, 2015, accruing TDRs were $81.7 million and non-accrual TDRs were $39.9 million compared to accruing TDRs of $104.3 million and non-accrual TDRs of $41.6 million at December 31, 2014. The Company has allocated specific reserves of $5.4 million to non-accrual TDRs and $2.0 million to accruing TDRs at December 31, 2015, and $6.5 million to accruing TDRs and $4.9 million to non-accrual TDRs at December 31, 2014. The following table presents TDRs that were modified during 2015, their specific reserve at December 31, 2015, and charge-offs during 2015:

	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve		Charge-offs
	(Dollars in thousands)
Commercial loans		3	$	1,181	$	1,181	$	2	$	-
Commercial mortgage loans		20		17,204		17,204		708		-
Residential mortgage and equity lines		5		1,521		1,374		42		148
Total		28	$	19,906	$	19,759	$	752	$	148

The following table presents TDRs that were modified during 2014, their specific reserve at December 31, 2014, and charge-offs during 2014:

	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve		Charge-offs
	(Dollars in thousands)
Commercial loans		4	$	10,539	$	10,539	$	21	$	-
Commercial mortgage loans		3		11,817		11,817		5,550		-
Residential mortgage and equity lines		7		2,715		2,715		29		-
Total		14	$	25,071	$	25,071	$	5,600	$	-

The following table presents TDRs that were modified during 2013, their specific reserve at December 31, 2013, and charge-offs during 2013:

	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Specific Reserve		Charge-off
	(Dollars in thousands)
Commercial loans		9	$	12,026	$	10,860	$	550	$	1,166
Commercial mortgage loans		5		13,090		13,090		329		-
Residential mortgage and equity lines		11		3,736		3,658		103		78
Total		25	$	28,852	$	27,608	$	982	$	1,244

A summary of TDRs by type of concession and by type of loans as of December 31, 2015, and December 31, 2014, are shown below:

	December 31, 2015
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
Commercial loans	$	8,298	$	-	$	1,726	$	10,024
Real estate construction loans		-		-		5,696		5,696
Commercial mortgage loans		16,701		6,045		33,800		56,546
Residential mortgage loans		5,201		999		3,214		9,414
Total accruing TDRs	$	30,200	$	7,044	$	44,436	$	81,680

	December 31, 2015
Non-accrual TDRs	Payment Deferral		Rate Reduction and Payment Deferral		Total
Commercial loans	$	1,033	$	90	$	1,123
Real estate construction loans		9,981		5,825		15,806
Commercial mortgage loans		1,544		20,362		21,906
Residential mortgage loans		388		700		1,088
Total non-accrual TDRs	$	12,946	$	26,977	$	39,923

	December 31, 2014
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Forgiveness of Principal		Rate Reduction and Payment Deferral		Total
Commercial loans	$	11,572	$	-	$	-	$	4,934	$	16,506
Real estate construction loans		5,765		-		-		-		5,765
Commercial mortgage loans		20,543		26,694		-		26,351		73,588
Residential mortgage loans		3,316		-		410		4,771		8,497
Total accruing TDRs	$	41,196	$	26,694	$	410	$	36,056	$	104,356

	December 31, 2014
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
Commercial loans	$	1,423	$	860	$	1,269	$	3,552
Real estate construction loans		-		-		19,462		19,462
Commercial mortgage loans		15,917		-		973		16,890
Residential mortgage loans		1,026		-		688		1,714
Total non-accrual TDRs	$	18,366	$	860	$	22,392	$	41,618

Troubled debt restructurings on accrual status totaled $81.7 million at December 31, 2015, and were comprised of 59 loans, a decrease of $22.7 million, compared to 60 loans totaling $104.4 million at December 31, 2014. TDRs at December 31, 2015, were comprised of 15 non-farm non-residential commercial mortgage loans of $44.9 million, six commercial loans of $10.0 million, 32 single family residential mortgage loans of $9.4 million, one multi-family residential commercial mortgage loan of $6.0 million, four single family residential commercial mortgage loans of $5.7 million, and one construction loan of $5.7 million. We expect that the troubled debt restructuring loans on accruing status as of December 31, 2015, which are all performing in accordance with their restructured terms, will continue to comply with the restructured terms because of the reduced principal or interest payments on these loans.The comparable TDRs at December 31, 2014, were comprised of nine commercial loans of $16.5 million, three hotel loans of $15.7 million, 31 single family residential loans of $13.6 million, two industrial and manufactural use building loans of $12.2 million, two land loans for residential purpose of $10.2 million, four commercial condos loans of $10.1 million, three retail shopping and commercial use building loans of $9.0 million, one multi-family residential loan of $6.1 million, one shopping center construction loan of $5.8 million, three office buildings loans of $3.5 million, and one warehouse loan of $1.6 million. The activity within our TDR loans for 2015, 2014, and 2013 are shown below:

Accruing TDRs	2015			2014			2013
	(In thousands)
Beginning balance	$	104,356		$	117,597		$	144,695
New restructurings		17,752			23,740			21,382
Restructured loans restored to accrual status		723			962			6,851
Charge-offs		(104	)		-			(78	)
Payments		(30,858	)		(13,256	)		(52,362	)
Restructured loans placed on non-accrual		(10,189	)		(24,687	)		(2,891	)
Ending balance	$	81,680		$	104,356		$	117,597

Non-accrual TDRs	2015			2014			2013
	(In thousands)
Beginning balance	$	41,618		$	38,769		$	47,731
New restructurings		2,006			1,331			6,226
Restructured loans placed on non-accrual		10,189			24,687			2,891
Charge-offs		(3,246	)		(8,937	)		(2,124	)
Payments		(9,921	)		(11,710	)		(4,295	)
Foreclosures		-			(1,560	)		(4,809	)
Restructured loans restored to accrual status		(723	)		(962	)		(6,851	)
Ending balance	$	39,923		$	41,618		$	38,769

A loan is considered to be in payment default once it is 60 to 90 days contractually past due under the modified terms.  There were no loans modified as TDRs during the previous twelve months that subsequently defaulted as of December 31, 2015. 

Under the Company’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty. As of December 31, 2015, there were no commitments to lend additional funds to those borrowers whose loans have been restructured, were considered impaired, or were on non-accrual status.

As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of all sources of repayment, the borrower’s current financial and liquidity status and all other relevant information. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:

● Pass/Watch – These loans range from minimal credit risk to lower than average, but still acceptable, credit risk.

● Special Mention – Borrower is fundamentally sound and the loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.

● Substandard – These loans are inadequately protected by current sound worth, paying capacity or pledged collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.

● Doubtful – The possibility of loss is extremely high, but due to identifiable and important pending events (which may strengthen the loan) a loss classification is deferred until the situation is better defined.

● Loss – These loans are considered uncollectible and of such little value that to continue to carry the loans as an active asset is no longer warranted.

The following tables present loan portfolio by risk rating as of December 31, 2015, and as of December 31, 2014:

	As of December 31, 2015
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In Thousands)
Commercial loans	$	2,143,270	$	110,338	$	61,297	$	1,958	$	2,316,863
Real estate construction loans		413,765		5,776		21,502		500		441,543
Commercial mortgage loans		5,018,199		155,553		118,196		9,270		5,301,218
Residential mortgage and equity lines		2,091,434		399		9,502		-		2,101,335
Installment and other loans		2,493		-		-		-		2,493
Total gross loans	$	9,669,161	$	272,066	$	210,497	$	11,728	$	10,163,452
Loans held for sale	$	732	$	-	$	5,944	$	-	$	6,676

	As of December 31, 2014
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In Thousands)
Commercial loans	$	2,260,474	$	47,619	$	72,561	$	1,839	$	2,382,493
Real estate construction loans		272,927		-		25,227		500		298,654
Commercial mortgage loans		4,213,453		105,970		167,020		-		4,486,443
Residential mortgage and equity lines		1,733,248		-		9,690		-		1,742,938
Installment and other loans		3,552		-		-		-		3,552
Total gross loans	$	8,483,654	$	153,589	$	274,498	$	2,339	$	8,914,080
Loans held for sale	$	-	$	-	$	973	$	-	$	973

The allowance for loan losses and the reserve for off-balance sheet credit commitments are significant estimates that can and do change based on management’s process in analyzing the loan portfolio and on management’s assumptions about specific borrowers, underlying collateral, and applicable economic and environmental conditions, among other factors.

The following table presents the balance in the allowance for loan losses by portfolio segment and based on impairment method as of December 31, 2015, and as of December 31, 2014.

	Commercial Loans		Real Estate Construction Loans		Commercial Mortgage Loans		Residential Mortgage and Equity Lines		Consumer and Other		Total
	(In thousands)
December 31, 2015
Loans individually evaluated for impairment
Allowance	$	530	$	-	$	6,792	$	427	$	-	$	7,749
Balance	$	13,568	$	22,002	$	81,776	$	16,464	$	-	$	133,810
Loans collectively evaluated for impairment
Allowance	$	55,669	$	22,170	$	42,648	$	10,718	$	9	$	131,214
Balance	$	2,303,295	$	419,541	$	5,219,442	$	2,084,871	$	2,493	$	10,029,642
Total allowance	$	56,199	$	22,170	$	49,440	$	11,145	$	9	$	138,963
Total balance	$	2,316,863	$	441,543	$	5,301,218	$	2,101,335	$	2,493	$	10,163,452
December 31, 2014
Loans individually evaluated for impairment
Allowance	$	1,263	$	1,077	$	8,993	$	465	$	-	$	11,798
Balance	$	23,489	$	25,728	$	109,194	$	16,108	$	-	$	174,519
Loans collectively evaluated for impairment
Allowance	$	46,238	$	26,575	$	65,680	$	11,113	$	16	$	149,622
Balance	$	2,359,004	$	272,926	$	4,377,249	$	1,726,830	$	3,552	$	8,739,561
Total allowance	$	47,501	$	27,652	$	74,673	$	11,578	$	16	$	161,420
Total balance	$	2,382,493	$	298,654	$	4,486,443	$	1,742,938	$	3,552	$	8,914,080

The following table details activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2015 and 2014. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

	Commercial Loans			Real Estate Construction Loans			Commercial Mortgage Loans			Residential Mortgage and Equity Lines			Installment and Other Loans			Total
	(In thousands)
2014 Beginning Balance	$	65,103		$	11,999		$	84,753		$	12,005		$	29		$	173,889
Provision/(reversal) for possible loan losses		(22,244	)		19,853			(8,197	)		(558	)		(26	)		(11,172	)
Charge-offs		(7,875	)		(6,747	)		(7,458	)		(155	)		-			(22,235	)
Recoveries		12,517			2,547			5,575			286			13			20,938
Net Recoveries/(Charge-offs		4,642			(4,200	)		(1,883	)		131			13			(1,297	)
2014 Ending Balance	$	47,501		$	27,652		$	74,673		$	11,578		$	16		$	161,420
Reserve to impaired loans	$	1,263		$	1,077		$	8,993		$	465		$	-		$	11,798
Reserve to non-impaired loans	$	46,238		$	26,575		$	65,680		$	11,113		$	16		$	149,622
Reserve for off-balance sheet credit commitments	$	923		$	728		$	259		$	39		$	-		$	1,949
2015 Beginning Balance	$	47,501		$	27,652		$	74,673		$	11,578		$	16		$	161,420
Provision/(reversal) for possible loan losses		20,505			(5,684	)		(26,035	)		(179	)		(7	)		(11,400	)
Charge-offs		(16,426	)		-			(3,716	)		(285	)		-			(20,427	)
Recoveries		4,619			202			4,518			31			-			9,370
Net (Charge-offs)/Recoveries		(11,807	)		202			802			(254	)		-			(11,057	)
2015 Ending Balance	$	56,199		$	22,170		$	49,440		$	11,145		$	9		$	138,963
Reserve to impaired loans	$	530		$	-		$	6,792		$	427		$	-		$	7,749
Reserve to non-impaired loans	$	55,669		$	22,170		$	42,648		$	10,718		$	9		$	131,214
Reserve for off-balance sheet credit commitments	$	810		$	526		$	158		$	-		$	-		$	1,494

An analysis of the activity in the allowance for credit losses for the years ended December 31, 2015, 2014, and 2013 is as follows:

	December 31,
	2015			2014			2013
	(In thousands)
Allowance for Loan Losses
Balance at beginning of year	$	161,420		$	173,889		$	183,322
Reversal for credit losses		(11,400	)		(10,800	)		(3,000	)
Transfers to reserve for off-balance sheet credit commitments		-			(372	)		-
Loans charged off		(20,427	)		(22,235	)		(20,442	)
Recoveries of charged off loans		9,370			20,938			14,009
Balance at end of year	$	138,963		$	161,420		$	173,889
Reserve for Off-balance Sheet Credit Commitments
Balance at beginning of year	$	1,949		$	1,363		$	1,363
(Reversal)/provision for credit losses and transfers		(455	)		586			-
Balance at end of year	$	1,494		$	1,949		$	1,363

Residential mortgage loans in process of formal foreclosure proceedings were $2.0 million at December 31, 2015, compared to $2.3 million at December 31, 2014.