Allowance for Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Tables)

9 Months Ended

Sep. 30, 2016

Financing Receivable, Allowance for Credit Losses [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the allowance for the three and nine months ended September 30, 2016 and 2015:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2016	(in thousands)
Commercial business:
Secured	$	31,808	$	(2,128	)	$	787	$	2,008		$	32,475	$	873	$	31,602
Unsecured	1,265		(31		)	67		(128		)	1,173		—		1,173
Real estate:
One-to-four family residential	675		—			81		221			977		353		624
Commercial & multifamily residential:
Commercial land	1,422		—			—		92			1,514		—		1,514
Income property	8,046		—			10		149			8,205		28		8,177
Owner occupied	6,336		—			10		487			6,833		—		6,833
Real estate construction:
One-to-four family residential:
Land and acquisition	587		—			2		(134		)	455		—		455
Residential construction	1,376		—			19		(393		)	1,002		—		1,002
Commercial & multifamily residential:
Income property	904		—			107		(480		)	531		—		531
Owner occupied	1,384		—			—		57			1,441		—		1,441
Consumer	3,559		(383		)	399		168			3,743		46		3,697
Purchased credit impaired	11,781		(2,062		)	2,216		(433		)	11,502		—		11,502
Unallocated	161		—			—		252			413		—		413
Total	$	69,304	$	(4,604	)	$	3,698	$	1,866		$	70,264	$	1,300	$	68,964
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2016	(in thousands)
Commercial business:
Secured	$	32,321	$	(8,798	)	$	2,126	$	6,826		$	32,475	$	873	$	31,602
Unsecured	1,299		(75		)	143		(194		)	1,173		—		1,173
Real estate:
One-to-four family residential	916		(35		)	142		(46		)	977		353		624
Commercial & multifamily residential:
Commercial land	1,178		(26		)	2		360			1,514		—		1,514
Income property	6,616		—			191		1,398			8,205		28		8,177
Owner occupied	5,550		—			26		1,257			6,833		—		6,833
Real estate construction:
One-to-four family residential:
Land and acquisition	339		—			55		61			455		—		455
Residential construction	733		—			225		44			1,002		—		1,002
Commercial & multifamily residential:
Income property	388		—			109		34			531		—		531
Owner occupied	1,006		—			—		435			1,441		—		1,441
Consumer	3,531		(983		)	765		430			3,743		46		3,697
Purchased credit impaired	13,726		(7,826		)	5,291		311			11,502		—		11,502
Unallocated	569		—			—		(156		)	413		—		413
Total	$	68,172	$	(17,743	)	$	9,075	$	10,760		$	70,264	$	1,300	$	68,964

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2015	(in thousands)
Commercial business:
Secured	$	27,708	$	(2,439	)	$	530	$	5,189		$	30,988	$	1,020	$	29,968
Unsecured	857		(131		)	93		471			1,290		—		1,290
Real estate:
One-to-four family residential	1,355		—			261		(420		)	1,196		84		1,112
Commercial & multifamily residential:
Commercial land	1,581		—			130		123			1,834		—		1,834
Income property	8,197		(83		)	273		22			8,409		—		8,409
Owner occupied	5,801		(115		)	14		473			6,173		17		6,156
Real estate construction:
One-to-four family residential:
Land and acquisition	497		—			98		(206		)	389		64		325
Residential construction	958		—			7		(250		)	715		—		715
Commercial & multifamily residential:
Income property	407		—			2		(68		)	341		—		341
Owner occupied	441		—			—		(31		)	410		—		410
Consumer	3,182		(311		)	297		49			3,217		14		3,203
Purchased credit impaired	16,174		(3,198		)	1,533		(519		)	13,990		—		13,990
Unallocated	2,099		—			—		(2,002		)	97		—		97
Total	$	69,257	$	(6,277	)	$	3,238	$	2,831		$	69,049	$	1,199	$	67,850
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2015	(in thousands)
Commercial business:
Secured	$	25,923	$	(5,847	)	$	1,242	$	9,670		$	30,988	$	1,020	$	29,968
Unsecured	927		(235		)	208		390			1,290		—		1,290
Real estate:
One-to-four family residential	2,281		(297		)	288		(1,076		)	1,196		84		1,112
Commercial & multifamily residential:
Commercial land	799		—			130		905			1,834		—		1,834
Income property	9,159		(126		)	3,532		(4,156		)	8,409		—		8,409
Owner occupied	5,007		(115		)	36		1,245			6,173		17		6,156
Real estate construction:
One-to-four family residential:
Land and acquisition	1,197		—			101		(909		)	389		64		325
Residential construction	1,860		—			40		(1,185		)	715		—		715
Commercial & multifamily residential:
Income property	622		—			7		(288		)	341		—		341
Owner occupied	434		—			—		(24		)	410		—		410
Consumer	3,180		(1,521		)	707		851			3,217		14		3,203
Purchased credit impaired	16,336		(10,174		)	5,262		2,566			13,990		—		13,990
Unallocated	1,844		—			—		(1,747		)	97		—		97
Total	$	69,569	$	(18,315	)	$	11,553	$	6,242		$	69,049	$	1,199	$	67,850

Changes in the Allowance for Unfunded Commitments and Letters of Credit

Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the consolidated balance sheet, are summarized as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2016		2015		2016			2015
	(in thousands)
Balance at beginning of period	$	2,780	$	2,930	$	2,930		$	2,655
Net changes in the allowance for unfunded commitments and letters of credit	125		—		(25		)	275
Balance at end of period	$	2,905	$	2,930	$	2,905		$	2,930

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our loan portfolio, excluding PCI loans, as of September 30, 2016 and December 31, 2015:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2016	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	2,417,653	$	48,462	$	61,544	$	—	$	—	$	2,527,659
Unsecured	96,402		800		335		—		—		97,537
Real estate:
One-to-four family residential	164,102		458		1,380		—		—		165,940
Commercial and multifamily residential:
Commercial land	233,795		5,276		950		—		—		240,021
Income property	1,354,651		17,048		7,083		—		—		1,378,782
Owner occupied	1,027,356		5,745		14,494		—		—		1,047,595
Real estate construction:
One-to-four family residential:
Land and acquisition	12,052		—		—		—		—		12,052
Residential construction	116,187		—		1,119		—		—		117,306
Commercial and multifamily residential:
Income property	89,373		—		—		—		—		89,373
Owner occupied	106,310		—		4,543		—		—		110,853
Consumer	312,602		—		7,273		—		—		319,875
Total	$	5,930,483	$	77,789	$	98,721	$	—	$	—	6,106,993
Less:
Allowance for loan and lease losses											58,762
Loans, excluding PCI loans, net											$	6,048,231

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2015	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	2,146,729	$	59,746	$	56,217	$	—	$	—	$	2,262,692
Unsecured	93,347		278		1,323		—		—		94,948
Real estate:
One-to-four family residential	171,945		52		1,439		—		—		173,436
Commercial and multifamily residential:
Commercial land	207,768		4,966		424		—		—		213,158
Income property	1,296,043		5,889		8,847		—		—		1,310,779
Owner occupied	918,986		9,668		17,662		—		—		946,316
Real estate construction:
One-to-four family residential:
Land and acquisition	14,388		—		362		—		—		14,750
Residential construction	119,243		—		1,132		—		—		120,375
Commercial and multifamily residential:
Income property	83,634		—		—		—		—		83,634
Owner occupied	81,270		—		401		—		—		81,671
Consumer	328,286		—		4,076		—		—		332,362
Total	$	5,461,639	$	80,599	$	91,883	$	—	$	—	5,634,121
Less:
Allowance for loan and lease losses											54,446
Loans, excluding PCI loans, net											$	5,579,675

The following is an analysis of the credit quality of our PCI loan portfolio as of September 30, 2016 and December 31, 2015:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2016	(in thousands)
PCI loans:
Commercial business:
Secured	$	21,420	$	94	$	2,191	$	—	$	—	$	23,705
Unsecured	731		—		—		—		—		731
Real estate:
One-to-four family residential	20,996		—		1,231		—		—		22,227
Commercial and multifamily residential:
Commercial land	7,745		—		392		—		—		8,137
Income property	31,481		—		2,445		—		—		33,926
Owner occupied	54,471		—		1,644		—		—		56,115
Real estate construction:
One-to-four family residential:
Land and acquisition	767		—		100		—		—		867
Residential construction	—		—		—		—		—		—
Commercial and multifamily residential:
Income property	1,239		—		—		—		—		1,239
Owner occupied	515		—		—		—		—		515
Consumer	17,168		—		464		—		—		17,632
Total	$	156,533	$	94	$	8,467	$	—	$	—	165,094
Less:
Valuation discount resulting from acquisition accounting											12,330
Allowance for loan losses											11,502
PCI loans, net											$	141,262

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2015	(in thousands)
PCI loans:
Commercial business:
Secured	$	31,468	$	101	$	5,995	$	—	$	—	$	37,564
Unsecured	1,218		—		2		—		—		1,220
Real estate:
One-to-four family residential	25,018		—		2,177		—		—		27,195
Commercial and multifamily residential:
Commercial land	8,234		—		664		—		—		8,898
Income property	36,426		—		5,916		—		—		42,342
Owner occupied	53,071		261		1,736		—		—		55,068
Real estate construction:
One-to-four family residential:
Land and acquisition	1,086		—		479		—		—		1,565
Residential construction	427		—		334		—		—		761
Commercial and multifamily residential:
Income property	1,303		—		—		—		—		1,303
Owner occupied	531		—		—		—		—		531
Consumer	20,122		—		781		—		—		20,903
Total	$	178,904	$	362	$	18,084	$	—	$	—	197,350
Less:
Valuation discount resulting from acquisition accounting											16,444
Allowance for loan losses											13,726
PCI loans, net											$	167,180