Noncovered Loans

Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans, including discounted loans, that are not subject to a FDIC loss-share agreement.

The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):



	March 31, 2012			December 31, 2011
	(in thousands)
Noncovered loans:
Commercial business	$	1,079,356		$	1,031,721
Real estate:
One-to-four family residential	58,843			64,491
Commercial and multifamily residential	992,403			998,165
Total real estate	1,051,246			1,062,656
Real estate construction:
One-to-four family residential	48,559			50,208
Commercial and multifamily residential	35,567			36,768
Total real estate construction	84,126			86,976
Consumer	169,955			183,235
Less: Net unearned income	(12,865		)	(16,217		)
Total noncovered loans, net of unearned income	2,371,818			2,348,371
Less: Allowance for loan and lease losses	(52,283		)	(53,041		)
Total noncovered loans, net	$	2,319,535		$	2,295,330
Loans held for sale	$	2,066		$	2,148

At March 31, 2012 and December 31, 2011, the Company had no loans to foreign domiciled businesses or foreign countries, or loans related to highly leveraged transactions. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company and its banking subsidiary have granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $11.7 million and $9.0 million at March 31, 2012 and December 31, 2011, respectively. During the first three months of 2012, advances on related party loans were $2.8 million and repayments totaled $141 thousand.

At March 31, 2012 and December 31, 2011, $471.7 million and $462.0 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank borrowings.

The following is an analysis of noncovered, nonaccrual loans as of March 31, 2012 and December 31, 2011:



	March 31, 2012				December 31, 2011
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
	(in thousands)
Commercial business
Secured	$	14,676	$	23,299	$	10,124	$	16,820
Unsecured	115		715		119		719
Real estate:
One-to-four family residential	2,624		2,992		2,696		3,011
Commercial & multifamily residential
Commercial land	3,432		7,233		3,739		7,230
Income property multifamily	12,771		17,277		6,775		9,265
Owner occupied	8,669		12,249		8,971		10,932
Real estate construction:
One-to-four family residential
Land and acquisition	6,410		13,581		7,799		16,703
Residential construction	2,383		4,647		2,986		5,316
Commercial & multifamily residential
Income property multifamily	5,023		10,367		7,067		14,912
Consumer	1,449		1,776		3,207		3,960
Total	$	57,552	$	94,136	$	53,483	$	88,868

The following is an analysis of the recorded investment of the aged loan portfolio as of March 31, 2012 and December 31, 2011:



	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
	(in thousands)
March 31, 2012
Commercial business
Secured	$	1,006,841	$	3,279	$	3,606	$	—	$	6,885	$	14,676	$	1,028,402
Unsecured	46,796		235		119		—		354		115		47,265
Real estate:
One-to-four family residential	55,486		682		84		—		766		2,624		58,876
Commercial & multifamily residential
Commercial land	41,948		—		—		—		—		3,432		45,380
Income property multifamily	542,839		2,960		—		—		2,960		12,771		558,570
Owner occupied	369,579		1,948		—		—		1,948		8,669		380,196
Real estate construction:
One-to-four family residential
Land and acquisition	16,974		—		—		—		—		6,410		23,384
Residential construction	21,778		—		319		—		319		2,383		24,480
Commercial & multifamily residential
Income property multifamily	14,212		—		—		—		—		5,023		19,235
Owner occupied	16,008		—		—		—		—		—		16,008
Consumer	168,573		—		—		—		—		1,449		170,022
Total	$	2,301,034	$	9,104	$	4,128	$	—	$	13,232	$	57,552	$	2,371,818

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
	(in thousands)
December 31, 2011
Commercial business
Secured	$	966,563	$	1,741	$	2,989	$	—	$	4,730	$	10,124	$	981,417
Unsecured	46,880		407		—		—		407		119		47,406
Real estate:
One-to-four family residential	60,764		603		—		—		603		2,696		64,063
Commercial & multifamily residential
Commercial land	46,161		781		—		—		781		3,739		50,681
Income property multifamily	524,225		2,872		121		—		2,993		6,775		533,993
Owner occupied	394,691		829		298		—		1,127		8,971		404,789
Real estate construction:
One-to-four family residential
Land and acquisition	17,249		153		—		—		153		7,799		25,201
Residential construction	19,555		1,390		—		—		1,390		2,986		23,931
Commercial & multifamily residential
Income property multifamily	13,810		—		—		—		—		7,067		20,877
Owner occupied	12,790		—		—		—		—		—		12,790
Consumer	179,753		141		122		—		263		3,207		183,223
Total	$	2,282,441	$	8,917	$	3,530	$	—	$	12,447	$	53,483	$	2,348,371

The following is an analysis of impaired loans as of March 31, 2012 and December 31, 2011:



	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance				Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
	(in thousands)
March 31, 2012
Commercial business
Secured	$	1,017,869	$	10,533	$	1,698	$	1,698	$	451	$	8,835	$	16,824	$	9,709	$	309
Unsecured	47,124		141		141		141		141		—		—		119		1
Real estate:
One-to-four family residential	56,823		2,053		355		368		72		1,698		1,848		2,266		1
Commercial & multifamily residential
Commercial land	42,369		3,011		—		—		—		3,011		6,052		3,405		—
Income property multifamily	549,035		9,535		4,579		4,612		1,087		4,956		8,556		8,083		115
Owner occupied	366,457		13,739		1,083		1,203		16		12,656		18,378		14,152		107
Real estate construction:
One-to-four family residential
Land and acquisition	17,693		5,691		—		—		—		5,691		11,026		6,539		—
Residential construction	20,993		3,487		18		1,468		18		3,469		4,209		4,286		358
Commercial & multifamily residential
Income property multifamily	14,212		5,023		—		—		—		5,023		10,367		6,045		—
Owner occupied	16,008		—		—		—		—		—		—		—		—
Consumer	168,971		1,051		—		—		—		1,051		1,052		1,672		—
Total	$	2,317,554	$	54,264	$	7,874	$	9,490	$	1,785	$	46,390	$	78,312	$	56,276	$	891

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance				Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
	(in thousands)
December 31, 2011
Commercial business
Secured	$	972,531	$	8,886	$	2,926	$	2,927	$	954	$	5,960	$	12,109	$	15,578	$	511
Unsecured	47,309		97		97		97		97		—		—		138		—
Real estate:
One-to-four family residential	61,584		2,479		582		590		96		1,897		2,136		2,494		—
Commercial & multifamily residential
Commercial land	46,882		3,799		—		—		—		3,799		6,773		4,263		—
Income property multifamily	527,362		6,631		687		759		63		5,944		7,700		8,881		59
Owner occupied	390,225		14,564		274		274		185		14,290		18,524		15,254		18
Real estate construction:
One-to-four family residential
Land and acquisition	17,813		7,388		450		948		—		6,938		11,978		8,972		116
Residential construction	18,847		5,084		59		1,509		59		5,025		5,116		4,535		—
Commercial & multifamily residential
Income property multifamily	13,810		7,067		—		—		—		7,067		14,947		7,065		—
Owner occupied	12,790		—		—		—		—		—		—		—		—
Consumer	180,930		2,293		151		225		30		2,142		2,639		3,880		15
Total	$	2,290,083	$	58,288	$	5,226	$	7,329	$	1,484	$	53,062	$	81,922	$	71,060	$	719

There were no Troubled Debt Restructurings ("TDR") during the three months ended March 31, 2012. The following is an analysis of loans classified as TDR during the three months ended March 31, 2011:



	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(dollars in thousands)
Real estate construction: One-to-four family residential
Residential construction	1	36		36
Total	1	$	36	$	36

The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties, that if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $9.5 million and $535 thousand of additional funds on loans classified as TDR as of March 31, 2012 and December 31, 2011, respectively. The TDR modifications or concessions are made to increase the likelihood these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured the same as impaired loans. For impaired loans, an allowance is established when the collateral value (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan. The Company did not have any loans modified as TDR within the past twelve months that have defaulted during the three months ended March 31, 2012.