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

9 Months Ended

Sep. 30, 2017

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, 2017 and 2016:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Three months ended September 30, 2017	(in thousands)
Commercial business:
Secured	$	39,539	$	(1,362	)	$	550	$	(969	)	$	37,758	$	—	$	37,758
Unsecured	1,147		—			138		(298		)	987		—		987
Real estate:
One-to-four family residential	628		—			40		3			671		26		645
Commercial & multifamily residential:
Commercial land	2,356		—			45		(97		)	2,304		—		2,304
Income property	6,854		—			9		241			7,104		25		7,079
Owner occupied	6,512		—			4		306			6,822		—		6,822
Real estate construction:
One-to-four family residential:
Land and acquisition	361		—			14		(83		)	292		—		292
Residential construction	1,377		—			6		(272		)	1,111		—		1,111
Commercial & multifamily residential:
Income property	985		—			—		279			1,264		—		1,264
Owner occupied	1,382		—			—		(87		)	1,295		—		1,295
Consumer	3,551		(263		)	343		42			3,673		51		3,622
Purchased credit impaired	8,061		(1,633		)	1,389		(473		)	7,344		—		7,344
Unallocated	231		—			—		760			991		—		991
Total	$	72,984	$	(3,258	)	$	2,538	$	(648	)	$	71,616	$	102	$	71,514
	Beginning Balance		Charge-offs			Recoveries		Provision (Recovery)			Ending Balance		Specific Reserve		General Allocation
Nine months ended September 30, 2017	(in thousands)
Commercial business:
Secured	$	36,050	$	(6,071	)	$	3,750	$	4,029		$	37,758	$	—	$	37,758
Unsecured	960		(18		)	247		(202		)	987		—		987
Real estate:
One-to-four family residential	599		(460		)	380		152			671		26		645
Commercial & multifamily residential:
Commercial land	1,797		—			45		462			2,304		—		2,304
Income property	7,342		—			104		(342		)	7,104		25		7,079
Owner occupied	6,439		—			114		269			6,822		—		6,822
Real estate construction:
One-to-four family residential:
Land and acquisition	316		(14		)	61		(71		)	292		—		292
Residential construction	669		—			46		396			1,111		—		1,111
Commercial & multifamily residential:
Income property	404		—			—		860			1,264		—		1,264
Owner occupied	1,192		—			—		103			1,295		—		1,295
Consumer	3,534		(1,156		)	876		419			3,673		51		3,622
Purchased credit impaired	10,515		(5,372		)	3,737		(1,536		)	7,344		—		7,344
Unallocated	226		—			—		765			991		—		991
Total	$	70,043	$	(13,091	)	$	9,360	$	5,304		$	71,616	$	102	$	71,514

	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

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 Sheets, are summarized as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2017			2016		2017		2016
	(in thousands)
Balance at beginning of period	$	3,555		$	2,780	$	2,705	$	2,930
Net changes in the allowance for unfunded commitments and letters of credit	(75		)	125		775		(25		)
Balance at end of period	$	3,480		$	2,905	$	3,480	$	2,905

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, 2017 and December 31, 2016:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2017	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	2,464,772	$	69,577	$	101,697	$	—	$	—	$	2,636,046
Unsecured	92,881		—		1,043		—		—		93,924
Real estate:
One-to-four family residential	171,362		1,195		1,933		—		—		174,490
Commercial and multifamily residential:
Commercial land	276,675		5,527		3,452		—		—		285,654
Income property	1,356,196		1,797		24,905		—		—		1,382,898
Owner occupied	1,101,139		14,275		25,194		—		—		1,140,608
Real estate construction:
One-to-four family residential:
Land and acquisition	6,787		—		26		—		—		6,813
Residential construction	135,965		406		1,549		—		—		137,920
Commercial and multifamily residential:
Income property	156,727		15,385		—		—		—		172,112
Owner occupied	35,511		—		4,050		—		—		39,561
Consumer	312,828		—		8,675		—		—		321,503
Total	$	6,110,843	$	108,162	$	172,524	$	—	$	—	6,391,529
Less:
Allowance for loan and lease losses											64,272
Loans, excluding PCI loans, net											$	6,327,257

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2016	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	2,289,307	$	65,846	$	96,437	$	—	$	—	$	2,451,590
Unsecured	93,721		800		216		—		—		94,737
Real estate:
One-to-four family residential	164,797		395		2,740		—		—		167,932
Commercial and multifamily residential:
Commercial land	263,195		3,228		4,391		—		—		270,814
Income property	1,341,978		17,902		9,866		—		—		1,369,746
Owner occupied	1,027,019		6,608		26,351		—		—		1,059,978
Real estate construction:
One-to-four family residential:
Land and acquisition	11,541		—		15		—		—		11,556
Residential construction	108,941		—		688		—		—		109,629
Commercial and multifamily residential:
Income property	103,779		—		—		—		—		103,779
Owner occupied	98,948		88		4,444		—		—		103,480
Consumer	317,728		—		6,794		—		—		324,522
Total	$	5,820,954	$	94,867	$	151,942	$	—	$	—	6,067,763
Less:
Allowance for loan and lease losses											59,528
Loans, excluding PCI loans, net											$	6,008,235

The following is an analysis of the credit quality of our PCI loan portfolio as of September 30, 2017 and December 31, 2016:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2017	(in thousands)
PCI loans:
Commercial business:
Secured	$	13,353	$	—	$	761	$	—	$	—	$	14,114
Unsecured	714		—		67		—		—		781
Real estate:
One-to-four family residential	15,883		—		815		—		—		16,698
Commercial and multifamily residential:
Commercial land	9,854		—		—		—		—		9,854
Income property	26,174		—		—		—		—		26,174
Owner occupied	46,265		—		789		—		—		47,054
Real estate construction:
One-to-four family residential:
Land and acquisition	319		—		58		—		—		377
Commercial and multifamily residential:
Income property	773		—		—		—		—		773
Owner occupied	286		—		—		—		—		286
Consumer	12,321		—		718		—		—		13,039
Total	$	125,942	$	—	$	3,208	$	—	$	—	129,150
Less:
Valuation discount resulting from acquisition accounting											8,673
Allowance for loan losses											7,344
PCI loans, net											$	113,133

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2016	(in thousands)
PCI loans:
Commercial business:
Secured	$	18,824	$	92	$	1,954	$	—	$	—	$	20,870
Unsecured	736		—		—		—		—		736
Real estate:
One-to-four family residential	19,293		—		1,350		—		—		20,643
Commercial and multifamily residential:
Commercial land	7,333		—		213		—		—		7,546
Income property	31,042		—		1,678		—		—		32,720
Owner occupied	53,623		—		906		—		—		54,529
Real estate construction:
One-to-four family residential:
Land and acquisition	744		—		88		—		—		832
Commercial and multifamily residential:
Income property	1,217		—		—		—		—		1,217
Owner occupied	509		—		—		—		—		509
Consumer	17,202		—		447		—		—		17,649
Total	$	150,523	$	92	$	6,636	$	—	$	—	157,251
Less:
Valuation discount resulting from acquisition accounting											11,591
Allowance for loan losses											10,515
PCI loans, net											$	135,145