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

3 Months Ended

Mar. 31, 2019

Financing Receivable, Allowance for Credit Losses [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the ALLL for the three months ended March 31, 2019 and 2018:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2019	(in thousands)
Commercial business:
Secured	$	43,188	$	(1,249	)	$	323	$	1,355		$	43,617	$	2,829	$	40,788
Unsecured	2,626		—			157		(288		)	2,495		—		2,495
Real estate:
One-to-four family residential	593		(2		)	17		8			616		8		608
Commercial & multifamily residential:
Commercial land	3,947		—			7		634			4,588		—		4,588
Income property	4,044		—			23		951			5,018		—		5,018
Owner occupied	4,533		—			1		432			4,966		52		4,914
Real estate construction:
One-to-four family residential:
Land and acquisition	549		—			59		(201		)	407		—		407
Residential construction	5,536		(170		)	1		99			5,466		—		5,466
Commercial & multifamily residential:
Income property	5,784		—			—		(1,267		)	4,517		—		4,517
Owner occupied	2,604		—			—		(384		)	2,220		—		2,220
Consumer	5,301		(478		)	238		484			5,545		22		5,523
PCI	3,611		(1,089		)	705		18			3,245		—		3,245
Unallocated	1,053		—			—		(479		)	574		—		574
Total	$	83,369	$	(2,988	)	$	1,531	$	1,362		$	83,274	$	2,911	$	80,363

	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Three months ended March 31, 2018	(in thousands)
Commercial business:
Secured	$	29,341	$	(2,414	)	$	553	$	9,851		$	37,331	$	5,657	$	31,674
Unsecured	2,000		(63		)	249		409			2,595		2		2,593
Real estate:
One-to-four family residential	701		—			172		(315		)	558		22		536
Commercial & multifamily residential:
Commercial land	4,265		—			6		(526		)	3,745		—		3,745
Income property	5,672		(223		)	141		(888		)	4,702		—		4,702
Owner occupied	5,459		—			12		(722		)	4,749		5		4,744
Real estate construction:
One-to-four family residential:
Land and acquisition	963		—			16		(67		)	912		—		912
Residential construction	3,709		—			3		924			4,636		—		4,636
Commercial & multifamily residential:
Income property	7,053		—			—		421			7,474		—		7,474
Owner occupied	4,413		—			—		(2,490		)	1,923		—		1,923
Consumer	5,163		(264		)	260		57			5,216		171		5,045
PCI	6,907		(1,343		)	1,224		(1,123		)	5,665		—		5,665
Unallocated	—		—			—		321			321		—		321
Total	$	75,646	$	(4,307	)	$	2,636	$	5,852		$	79,827	$	5,857	$	73,970

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
	March 31,
	2019			2018
	(in thousands)
Balance at beginning of period	$	4,330		$	3,130
Net changes in the allowance for unfunded commitments and letters of credit	(550		)	1,200
Balance at end of period	$	3,780		$	4,330

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our loan portfolio, excluding PCI loans, as of March 31, 2019 and December 31, 2018:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2019	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	3,217,555	$	58,919	$	104,760	$	—	$	—	$	3,381,234
Unsecured	115,089		26		102		—		—		115,217
Real estate:
One-to-four family residential	281,107		—		1,223		—		—		282,330
Commercial and multifamily residential:
Commercial land	286,993		2,472		5,455		—		—		294,920
Income property	1,918,999		1,560		42,050		—		—		1,962,609
Owner occupied	1,578,780		13,724		46,055		—		—		1,638,559
Real estate construction:
One-to-four family residential:
Land and acquisition	3,619		—		—		—		—		3,619
Residential construction	203,318		—		—		—		—		203,318
Commercial and multifamily residential:
Income property	163,674		—		—		—		—		163,674
Owner occupied	74,148		—		588		—		—		74,736
Consumer	307,950		—		4,375		—		—		312,325
Total	$	8,151,232	$	76,701	$	204,608	$	—	$	—	8,432,541
Less:
ALLL											80,029
Loans, excluding PCI loans, net											$	8,352,512

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2018	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	3,160,910	$	48,779	$	103,007	$	5	$	—	$	3,312,701
Unsecured	112,091		21		—		5		—		112,117
Real estate:
One-to-four family residential	234,416		—		1,610		—		—		236,026
Commercial and multifamily residential:
Commercial land	276,348		5,082		4,247		—		—		285,677
Income property	1,876,925		36,998		6,553		—		—		1,920,476
Owner occupied	1,556,852		14,964		45,935		—		—		1,617,751
Real estate construction:
One-to-four family residential:
Land and acquisition	4,099		—		318		—		—		4,417
Residential construction	212,225		—		171		—		—		212,396
Commercial and multifamily residential:
Income property	194,912		—		—		—		—		194,912
Owner occupied	87,063		—		—		—		—		87,063
Consumer	313,817		—		4,398		—		—		318,215
Total	$	8,029,658	$	105,844	$	166,239	$	10	$	—	8,301,751
Less:
ALLL											79,758
Loans, excluding PCI loans, net											$	8,221,993

The following is an analysis of the credit quality of our PCI loan portfolio as of March 31, 2019 and December 31, 2018:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
March 31, 2019	(in thousands)
PCI loans:
Commercial business:
Secured	$	8,749	$	—	$	804	$	—	$	—	$	9,553
Unsecured	717		—		—		—		—		717
Real estate:
One-to-four family residential	8,565		—		693		—		—		9,258
Commercial and multifamily residential:
Commercial land	9,974		141		71		—		—		10,186
Income property	19,350		—		—		—		—		19,350
Owner occupied	28,662		—		6,760		—		—		35,422
Real estate construction:
One-to-four family residential:
Land and acquisition	146		—		1		—		—		147
Commercial and multifamily residential:
Income property	491		—		—		—		—		491
Consumer	8,908		—		386		—		—		9,294
Total	$	85,562	$	141	$	8,715	$	—	$	—	94,418
Less:
Valuation discount resulting from acquisition accounting											6,161
ALLL											3,245
PCI loans, net											$	85,012

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2018	(in thousands)
PCI loans:
Commercial business:
Secured	$	8,041	$	—	$	840	$	—	$	—	$	8,881
Unsecured	692		—		99		—		—		791
Real estate:
One-to-four family residential	9,633		—		215		—		—		9,848
Commercial and multifamily residential:
Commercial land	10,363		—		—		—		—		10,363
Income property	19,680		—		—		—		—		19,680
Owner occupied	35,944		—		353		—		—		36,297
Real estate construction:
One-to-four family residential:
Land and acquisition	151		—		2		—		—		153
Commercial and multifamily residential:
Income property	507		—		—		—		—		507
Consumer	9,326		—		439		—		—		9,765
Total	$	94,337	$	—	$	1,948	$	—	$	—	96,285
Less:
Valuation discount resulting from acquisition accounting											6,525
ALLL											3,611
PCI loans, net											$	86,149