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

9 Months Ended

Sep. 30, 2019

Financing Receivable, Allowance for Credit Loss [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the ALLL for the three and nine months ended September 30, 2019 and 2018:

	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Three Months Ended September 30, 2019	(in thousands)
Commercial business:
Secured	$	37,862	$	(2,365	)	$	202	$	5,721		$	41,420	$	1,879	$	39,541
Unsecured	3,010		—			156		423			3,589		—		3,589
Real estate:
One-to-four family residential	645		—			65		(107		)	603		5		598
Commercial and multifamily residential:
Commercial land	5,409		—			79		560			6,048		320		5,728
Income property	5,325		—			104		35			5,464		—		5,464
Owner occupied	5,230		—			1		500			5,731		105		5,626
Real estate construction:
One-to-four family residential:
Land and acquisition	153		—			105		(124		)	134		—		134
Residential construction	6,103		—			2,366		(2,852		)	5,617		—		5,617
Commercial and multifamily residential:
Income property	4,198		—			—		(505		)	3,693		—		3,693
Owner occupied	2,412		—			—		595			3,007		—		3,007
Consumer	5,194		(285		)	326		(1,010		)	4,225		17		4,208
PCI	3,269		(722		)	1,812		(1,301		)	3,058		—		3,058
Unallocated	1,707		—			—		(1,636		)	71		—		71
Total	$	80,517	$	(3,372	)	$	5,216	$	299		$	82,660	$	2,326	$	80,334
	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Nine Months Ended September 30, 2019	(in thousands)
Commercial business:
Secured	$	43,188	$	(7,717	)	$	1,040	$	4,909		$	41,420	$	1,879	$	39,541
Unsecured	2,626		(15		)	345		633			3,589		—		3,589
Real estate:
One-to-four family residential	593		(2		)	102		(90		)	603		5		598
Commercial and multifamily residential:
Commercial land	3,947		—			93		2,008			6,048		320		5,728
Income property	4,044		—			152		1,268			5,464		—		5,464
Owner occupied	4,533		—			3		1,195			5,731		105		5,626
Real estate construction:
One-to-four family residential:
Land and acquisition	549		—			236		(651		)	134		—		134
Residential construction	5,536		(170		)	2,956		(2,705		)	5,617		—		5,617
Commercial and multifamily residential:
Income property	5,784		—			1		(2,092		)	3,693		—		3,693
Owner occupied	2,604		—			—		403			3,007		—		3,007
Consumer	5,301		(1,117		)	742		(701		)	4,225		17		4,208
PCI	3,611		(2,626		)	3,389		(1,316		)	3,058		—		3,058
Unallocated	1,053		—			—		(982		)	71		—		71
Total	$	83,369	$	(11,647	)	$	9,059	$	1,879		$	82,660	$	2,326	$	80,334

	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Three Months Ended September 30, 2018	(in thousands)
Commercial business:
Secured	$	40,350	$	(576	)	$	496	$	2,912		$	43,182	$	1,139	$	42,043
Unsecured	2,443		(30		)	51		(41		)	2,423		—		2,423
Real estate:
One-to-four family residential	461		—			21		(110		)	372		8		364
Commercial and multifamily residential:
Commercial land	3,278		—			8		(87		)	3,199		—		3,199
Income property	4,102		—			202		(292		)	4,012		1		4,011
Owner occupied	4,356		—			3		316			4,675		71		4,604
Real estate construction:
One-to-four family residential:
Land and acquisition	848		—			582		(742		)	688		—		688
Residential construction	4,572		—			1		660			5,233		—		5,233
Commercial and multifamily residential:
Income property	7,367		—			—		573			7,940		—		7,940
Owner occupied	2,299		—			—		138			2,437		—		2,437
Consumer	5,292		(277		)	266		(258		)	5,023		36		4,987
PCI	4,782		(1,208		)	945		(502		)	4,017		—		4,017
Unallocated	—		—			—		586			586		—		586
Total	$	80,150	$	(2,091	)	$	2,575	$	3,153		$	83,787	$	1,255	$	82,532
	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Nine Months Ended September 30, 2018	(in thousands)
Commercial business:
Secured	$	29,341	$	(8,741	)	$	2,536	$	20,046		$	43,182	$	1,139	$	42,043
Unsecured	2,000		(117		)	356		184			2,423		—		2,423
Real estate:
One-to-four family residential	701		—			389		(718		)	372		8		364
Commercial and multifamily residential:
Commercial land	4,265		—			92		(1,158		)	3,199		—		3,199
Income property	5,672		(223		)	901		(2,338		)	4,012		1		4,011
Owner occupied	5,459		—			19		(803		)	4,675		71		4,604
Real estate construction:
One-to-four family residential:
Land and acquisition	963		—			610		(885		)	688		—		688
Residential construction	3,709		—			6		1,518			5,233		—		5,233
Commercial and multifamily residential:
Income property	7,053		—			—		887			7,940		—		7,940
Owner occupied	4,413		—			—		(1,976		)	2,437		—		2,437
Consumer	5,163		(773		)	796		(163		)	5,023		36		4,987
PCI	6,907		(3,786		)	3,096		(2,200		)	4,017		—		4,017
Unallocated	—		—			—		586			586		—		586
Total	$	75,646	$	(13,640	)	$	8,801	$	12,980		$	83,787	$	1,255	$	82,532

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,
	2019			2018		2019			2018
	(in thousands)
Balance at beginning of period	$	3,980		$	3,680	$	4,330		$	3,130
Net changes in the allowance for unfunded commitments and letters of credit	(400		)	275		(750		)	825
Balance at end of period	$	3,580		$	3,955	$	3,580		$	3,955

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, 2019 and December 31, 2018:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2019	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	3,433,097	$	30,153	$	92,731	$	2	$	—	$	3,555,983
Unsecured	139,176		—		197		—		—		139,373
Real estate:
One-to-four family residential	272,021		—		1,012		—		—		273,033
Commercial and multifamily residential:
Commercial land	277,264		4,665		13,367		—		—		295,296
Income property	1,917,596		3,918		40,421		—		—		1,961,935
Owner occupied	1,642,558		8,278		47,472		—		—		1,698,308
Real estate construction:
One-to-four family residential:
Land and acquisition	1,614		—		—		—		—		1,614
Residential construction	192,563		—		—		—		—		192,563
Commercial and multifamily residential:
Income property	157,400		—		—		—		—		157,400
Owner occupied	102,246		—		—		—		—		102,246
Consumer	293,484		—		3,343		—		—		296,827
Total	$	8,429,019	$	47,014	$	198,543	$	2	$	—	8,674,578
Less:
ALLL											79,602
Loans, excluding PCI loans, net											$	8,594,976

	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 September 30, 2019 and December 31, 2018:

	Pass		Special Mention		Substandard		Doubtful		Loss		Total
September 30, 2019	(in thousands)
PCI loans:
Commercial business:
Secured	$	7,008	$	955	$	721	$	—	$	—	$	8,684
Unsecured	550		—		—		—		—		550
Real estate:
One-to-four family residential	8,521		—		243		—		—		8,764
Commercial and multifamily residential:
Commercial land	8,920		642		72		—		—		9,634
Income property	18,737		—		—		—		—		18,737
Owner occupied	25,059		—		5,953		—		—		31,012
Real estate construction:
One-to-four family residential:
Land and acquisition	144		—		—		—		—		144
Commercial and multifamily residential:
Income property	462		—		—		—		—		462
Consumer	8,468		—		276		—		—		8,744
Total	$	77,869	$	1,597	$	7,265	$	—	$	—	86,731
Less:
Valuation discount resulting from acquisition accounting											4,954
ALLL											3,058
PCI loans, net											$	78,719

	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