| Loans and Leases |
Loans and leases
Loans and Leases Receivable, Net
Loans and leases receivable consisted of the following as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
|
(in thousands) |
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
914,470 |
|
|
$ |
1,643 |
|
|
$ |
916,113 |
|
|
$ |
857,629 |
|
|
$ |
2,324 |
|
|
$ |
859,953 |
|
Hospitality |
737,369 |
|
|
1,698 |
|
|
739,067 |
|
|
649,540 |
|
|
1,618 |
|
|
651,158 |
|
Gas station |
247,566 |
|
|
2,363 |
|
|
249,929 |
|
|
260,187 |
|
|
2,692 |
|
|
262,879 |
|
Other (1)
|
1,102,084 |
|
|
2,016 |
|
|
1,104,100 |
|
|
1,107,589 |
|
|
2,067 |
|
|
1,109,656 |
|
Construction |
58,159 |
|
|
— |
|
|
58,159 |
|
|
55,962 |
|
|
— |
|
|
55,962 |
|
Residential property |
382,692 |
|
|
965 |
|
|
383,657 |
|
|
337,791 |
|
|
976 |
|
|
338,767 |
|
Total real estate loans |
3,442,340 |
|
|
8,685 |
|
|
3,451,025 |
|
|
3,268,698 |
|
|
9,677 |
|
|
3,278,375 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
159,432 |
|
|
55 |
|
|
159,487 |
|
|
138,032 |
|
|
136 |
|
|
138,168 |
|
Commercial lines of credit |
148,421 |
|
|
— |
|
|
148,421 |
|
|
136,231 |
|
|
— |
|
|
136,231 |
|
International loans |
39,328 |
|
|
— |
|
|
39,328 |
|
|
25,821 |
|
|
— |
|
|
25,821 |
|
Total commercial and industrial loans |
347,181 |
|
|
55 |
|
|
347,236 |
|
|
300,084 |
|
|
136 |
|
|
300,220 |
|
Leases receivable |
257,525 |
|
|
— |
|
|
257,525 |
|
|
243,294 |
|
|
— |
|
|
243,294 |
|
Consumer loans (2)
|
17,232 |
|
|
44 |
|
|
17,276 |
|
|
22,830 |
|
|
50 |
|
|
22,880 |
|
Loans and leases receivable |
4,064,278 |
|
|
8,784 |
|
|
4,073,062 |
|
|
3,834,906 |
|
|
9,863 |
|
|
3,844,769 |
|
Allowance for loan and lease losses |
(33,038 |
) |
|
(720 |
) |
|
(33,758 |
) |
|
(31,458 |
) |
|
(971 |
) |
|
(32,429 |
) |
Loans and leases receivable, net |
$ |
4,031,240 |
|
|
$ |
8,064 |
|
|
$ |
4,039,304 |
|
|
$ |
3,803,448 |
|
|
$ |
8,892 |
|
|
$ |
3,812,340 |
|
|
|
(1) |
The remaining other real estate categories represent less than one percent of total loans and leases, which, among other property types, include mixed-use, apartment, office, industrial, faith-based facilities and warehouse. |
|
|
(2) |
Consumer loans include home equity lines of credit of $15.1 million and $17.7 million as of June 30, 2017 and December 31, 2016, respectively.
|
Accrued interest on loans and leases receivable was $8.3 million and $8.2 million at June 30, 2017 and December 31, 2016, respectively. At June 30, 2017 and December 31, 2016, loans receivable of $1.0 billion were pledged to secure borrowing facilities from the FHLB.
Loans Held for Sale
The following is the activity for SBA loans held for sale for the three months ended June 30, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SBA Loans Held for Sale |
|
Real Estate |
|
Commercial and Industrial |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
Balance at beginning of period |
$ |
7,789 |
|
|
$ |
1,060 |
|
|
$ |
8,849 |
|
Originations |
22,130 |
|
|
12,344 |
|
|
34,474 |
|
Sales |
(21,083 |
) |
|
(11,271 |
) |
|
(32,354 |
) |
Principal payoffs and amortization |
(19 |
) |
|
(1 |
) |
|
(20 |
) |
Balance at end of period |
$ |
8,817 |
|
|
$ |
2,132 |
|
|
$ |
10,949 |
|
|
|
|
|
|
|
June 30, 2016 |
|
|
|
|
|
Balance at beginning of period |
$ |
1,824 |
|
|
$ |
759 |
|
|
$ |
2,583 |
|
Originations |
22,376 |
|
|
8,031 |
|
|
30,407 |
|
Sales |
(14,905 |
) |
|
(5,247 |
) |
|
(20,152 |
) |
Principal payoffs and amortization |
(1 |
) |
|
(4 |
) |
|
(5 |
) |
Balance at end of period |
$ |
9,294 |
|
|
$ |
3,539 |
|
|
$ |
12,833 |
|
The following is the activity for SBA loans held for sale for the six months ended June 30, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SBA Loans Held for Sale |
|
Real Estate |
|
Commercial and Industrial |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
Balance at beginning of period |
$ |
7,410 |
|
|
$ |
1,906 |
|
|
$ |
9,316 |
|
Originations |
34,763 |
|
|
18,904 |
|
|
53,667 |
|
Sales |
(33,337 |
) |
|
(18,660 |
) |
|
(51,997 |
) |
Principal payoffs and amortization |
(19 |
) |
|
(18 |
) |
|
(37 |
) |
Balance at end of period |
$ |
8,817 |
|
|
$ |
2,132 |
|
|
$ |
10,949 |
|
|
|
|
|
|
|
June 30, 2016 |
|
|
|
|
|
Balance at beginning of period |
$ |
840 |
|
|
$ |
2,034 |
|
|
$ |
2,874 |
|
Originations |
28,849 |
|
|
13,710 |
|
|
42,559 |
|
Sales |
(20,393 |
) |
|
(12,182 |
) |
|
(32,575 |
) |
Principal payoffs and amortization |
(2 |
) |
|
(23 |
) |
|
(25 |
) |
Balance at end of period |
$ |
9,294 |
|
|
$ |
3,539 |
|
|
$ |
12,833 |
|
Allowance for Loan and Lease Losses
Activity in the allowance for loan and lease losses was as follows for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Three Months Ended |
|
June 30, 2017 |
|
June 30, 2016 |
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
|
(in thousands) |
Allowance for loan and lease losses: |
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
32,261 |
|
|
$ |
891 |
|
|
$ |
33,152 |
|
|
$ |
35,381 |
|
|
$ |
5,645 |
|
|
$ |
41,026 |
|
Charge-offs |
(665 |
) |
|
— |
|
|
(665 |
) |
|
(662 |
) |
|
(137 |
) |
|
(799 |
) |
Recoveries on loans and leases previously charged off |
849 |
|
|
— |
|
|
849 |
|
|
995 |
|
|
— |
|
|
995 |
|
Net loan and lease (charge-offs) recoveries |
184 |
|
|
— |
|
|
184 |
|
|
333 |
|
|
(137 |
) |
|
196 |
|
Loan and lease loss provision (income) |
593 |
|
|
(171 |
) |
|
422 |
|
|
(1,455 |
) |
|
(60 |
) |
|
(1,515 |
) |
Balance at end of period |
$ |
33,038 |
|
|
$ |
720 |
|
|
$ |
33,758 |
|
|
$ |
34,259 |
|
|
$ |
5,448 |
|
|
$ |
39,707 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of and for the Six Months Ended |
|
June 30, 2017 |
|
June 30, 2016 |
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
|
(in thousands) |
Allowance for loan and lease losses: |
|
|
|
|
|
|
|
|
|
|
|
Balance at beginning of period |
$ |
31,458 |
|
|
$ |
971 |
|
|
$ |
32,429 |
|
|
$ |
37,494 |
|
|
$ |
5,441 |
|
|
$ |
42,935 |
|
Charge-offs |
(851 |
) |
|
— |
|
|
(851 |
) |
|
(1,299 |
) |
|
(137 |
) |
|
(1,436 |
) |
Recoveries on loans and leases previously charged off |
1,838 |
|
|
— |
|
|
1,838 |
|
|
1,248 |
|
|
— |
|
|
1,248 |
|
Net loan and lease (charge-offs) recoveries |
987 |
|
|
— |
|
|
987 |
|
|
(51 |
) |
|
(137 |
) |
|
(188 |
) |
Loan and lease loss provision (income) |
593 |
|
|
(251 |
) |
|
342 |
|
|
(3,184 |
) |
|
144 |
|
|
(3,040 |
) |
Balance at end of period |
$ |
33,038 |
|
|
$ |
720 |
|
|
$ |
33,758 |
|
|
$ |
34,259 |
|
|
$ |
5,448 |
|
|
$ |
39,707 |
|
Management believes the allowance for loan and lease losses is appropriate to provide for probable losses inherent in the loan and lease portfolio. However, the allowance is an estimate that is inherently uncertain and depends on the outcome of future events. Management’s estimates are based on previous loss experience; volume, growth and composition of the loan and lease portfolio; the value of collateral; and current economic conditions. Our lending is concentrated generally in real estate, commercial, SBA and trade finance lending to small and middle market businesses primarily in California, Texas and Illinois.
The following tables detail the information on the allowance for loan and lease losses by portfolio segment as of and for the three and six months ended June 30, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial
and Industrial
|
|
Leases
Receivable
|
|
Consumer |
|
Unallocated |
|
Total |
|
(In thousands) |
As of and for the Three Months Ended June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses on non-PCI loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
24,760 |
|
|
$ |
5,914 |
|
|
980 |
|
|
$ |
122 |
|
|
$ |
485 |
|
|
$ |
32,261 |
|
Charge-offs |
(38 |
) |
|
— |
|
|
(627 |
) |
|
— |
|
|
— |
|
|
(665 |
) |
Recoveries on loans and leases previously charged off |
447 |
|
|
367 |
|
|
20 |
|
|
15 |
|
|
— |
|
|
849 |
|
Loan and lease loss provision (income) |
(2,407 |
) |
|
698 |
|
|
1,660 |
|
|
(50 |
) |
|
692 |
|
|
593 |
|
Ending balance |
$ |
22,762 |
|
|
$ |
6,979 |
|
|
$ |
2,033 |
|
|
$ |
87 |
|
|
$ |
1,177 |
|
|
$ |
33,038 |
|
Ending balance: individually evaluated for impairment |
$ |
3,638 |
|
|
$ |
1,841 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5,479 |
|
Ending balance: collectively evaluated for impairment |
$ |
19,124 |
|
|
$ |
5,138 |
|
|
$ |
2,033 |
|
|
$ |
87 |
|
|
$ |
1,177 |
|
|
$ |
27,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
3,442,340 |
|
|
$ |
347,181 |
|
|
$ |
257,525 |
|
|
$ |
17,232 |
|
|
$ |
— |
|
|
$ |
4,064,278 |
|
Ending balance: individually evaluated for impairment |
$ |
19,695 |
|
|
$ |
5,275 |
|
|
$ |
— |
|
|
$ |
1,224 |
|
|
$ |
— |
|
|
$ |
26,194 |
|
Ending balance: collectively evaluated for impairment |
$ |
3,422,645 |
|
|
$ |
341,906 |
|
|
$ |
257,525 |
|
|
$ |
16,008 |
|
|
$ |
— |
|
|
$ |
4,038,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on PCI loans: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
842 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
8 |
|
|
$ |
— |
|
|
$ |
891 |
|
Charge-offs |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Loan loss provision (income) |
(171 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(171 |
) |
Ending balance |
$ |
671 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
8 |
|
|
$ |
— |
|
|
$ |
720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance: acquired with deteriorated credit quality |
$ |
8,685 |
|
|
$ |
55 |
|
|
$ |
— |
|
|
$ |
44 |
|
|
$ |
— |
|
|
$ |
8,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial
and Industrial
|
|
Leases
Receivable
|
|
Consumer |
|
Unallocated |
|
Total |
|
(In thousands) |
As of and for the Three Months Ended June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses on non-PCI loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
28,278 |
|
|
$ |
6,289 |
|
|
— |
|
|
$ |
255 |
|
|
$ |
559 |
|
|
$ |
35,381 |
|
Charge-offs |
(156 |
) |
|
(506 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(662 |
) |
Recoveries on loans and leases previously charged off |
97 |
|
|
845 |
|
|
— |
|
|
53 |
|
|
— |
|
|
995 |
|
Loan and lease loss provision (income) |
(103 |
) |
|
(1,126 |
) |
|
— |
|
|
(66 |
) |
|
(160 |
) |
|
(1,455 |
) |
Ending balance |
$ |
28,116 |
|
|
$ |
5,502 |
|
|
$ |
— |
|
|
$ |
242 |
|
|
$ |
399 |
|
|
$ |
34,259 |
|
Ending balance: individually evaluated for impairment |
$ |
2,589 |
|
|
$ |
422 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,011 |
|
Ending balance: collectively evaluated for impairment |
$ |
25,527 |
|
|
$ |
5,080 |
|
|
$ |
— |
|
$ |
— |
|
$ |
242 |
|
|
$ |
399 |
|
|
$ |
31,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
3,116,749 |
|
|
$ |
292,927 |
|
|
$ |
— |
|
|
$ |
24,614 |
|
|
$ |
— |
|
|
$ |
3,434,290 |
|
Ending balance: individually evaluated for impairment |
$ |
20,412 |
|
|
$ |
5,089 |
|
|
$ |
— |
|
|
$ |
686 |
|
|
$ |
— |
|
|
$ |
26,187 |
|
Ending balance: collectively evaluated for impairment |
$ |
3,096,337 |
|
|
$ |
287,838 |
|
|
$ |
— |
|
|
$ |
23,928 |
|
|
$ |
— |
|
|
$ |
3,408,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on PCI loans: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
5,599 |
|
|
$ |
44 |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
5,645 |
|
Charge-offs |
(137 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(137 |
) |
Loan loss provision (income) |
(62 |
) |
|
(3 |
) |
|
— |
|
|
5 |
|
|
— |
|
|
(60 |
) |
Ending balance |
$ |
5,400 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
7 |
|
|
$ |
— |
|
|
$ |
5,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance: acquired with deteriorated credit quality |
$ |
14,823 |
|
|
$ |
146 |
|
|
$ |
— |
|
|
$ |
51 |
|
|
$ |
— |
|
|
$ |
15,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial
and Industrial
|
|
Leases
Receivable
|
|
Consumer |
|
Unallocated |
|
Total |
|
(In thousands) |
As of and for the Six Months Ended June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses on non-PCI loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
25,212 |
|
|
$ |
5,582 |
|
|
307 |
|
|
$ |
191 |
|
|
$ |
166 |
|
|
$ |
31,458 |
|
Charge-offs |
(142 |
) |
|
(40 |
) |
|
(669 |
) |
|
— |
|
|
— |
|
|
(851 |
) |
Recoveries on loans and leases previously charged off |
1,159 |
|
|
644 |
|
|
20 |
|
|
15 |
|
|
— |
|
|
1,838 |
|
Loan and lease loss provision (income) |
(3,467 |
) |
|
793 |
|
|
2,375 |
|
|
(119 |
) |
|
1,011 |
|
|
593 |
|
Ending balance |
$ |
22,762 |
|
|
$ |
6,979 |
|
|
$ |
2,033 |
|
|
$ |
87 |
|
|
$ |
1,177 |
|
|
$ |
33,038 |
|
Ending balance: individually evaluated for impairment |
$ |
3,638 |
|
|
$ |
1,841 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
5,479 |
|
Ending balance: collectively evaluated for impairment |
$ |
19,124 |
|
|
$ |
5,138 |
|
|
$ |
2,033 |
|
|
$ |
87 |
|
|
$ |
1,177 |
|
|
$ |
27,559 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
3,442,340 |
|
|
$ |
347,181 |
|
|
$ |
257,525 |
|
|
$ |
17,232 |
|
|
$ |
— |
|
|
$ |
4,064,278 |
|
Ending balance: individually evaluated for impairment |
$ |
19,695 |
|
|
$ |
5,275 |
|
|
$ |
— |
|
|
$ |
1,224 |
|
|
$ |
— |
|
|
$ |
26,194 |
|
Ending balance: collectively evaluated for impairment |
$ |
3,422,645 |
|
|
$ |
341,906 |
|
|
$ |
257,525 |
|
|
$ |
16,008 |
|
|
$ |
— |
|
|
$ |
4,038,084 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on PCI loans: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
922 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
8 |
|
|
$ |
— |
|
|
$ |
971 |
|
Charge-offs |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Loan loss provision (income) |
(251 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(251 |
) |
Ending balance |
$ |
671 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
8 |
|
|
$ |
— |
|
|
$ |
720 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance: acquired with deteriorated credit quality |
$ |
8,685 |
|
|
$ |
55 |
|
|
$ |
— |
|
|
$ |
44 |
|
|
$ |
— |
|
|
$ |
8,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial
and Industrial
|
|
Leases
Receivable
|
|
Consumer |
|
Unallocated |
|
Total |
|
(In thousands) |
As of and for the Six Months Ended
June 30, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan and lease losses on non-PCI loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
29,800 |
|
|
$ |
7,081 |
|
|
— |
|
|
$ |
242 |
|
|
$ |
371 |
|
|
$ |
37,494 |
|
Charge-offs |
(691 |
) |
|
(608 |
) |
|
— |
|
|
— |
|
|
— |
|
|
(1,299 |
) |
Recoveries on loans and leases previously charged off |
190 |
|
|
1,005 |
|
|
— |
|
|
53 |
|
|
— |
|
|
1,248 |
|
Loan and lease loss provision (income) |
(1,183 |
) |
|
(1,976 |
) |
|
— |
|
|
(53 |
) |
|
28 |
|
|
(3,184 |
) |
Ending balance |
$ |
28,116 |
|
|
$ |
5,502 |
|
|
$ |
— |
|
|
$ |
242 |
|
|
$ |
399 |
|
|
$ |
34,259 |
|
Ending balance: individually evaluated for impairment |
$ |
2,589 |
|
|
$ |
422 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
3,011 |
|
Ending balance: collectively evaluated for impairment |
$ |
25,527 |
|
|
$ |
5,080 |
|
|
$ |
— |
|
|
$ |
242 |
|
|
$ |
399 |
|
|
$ |
31,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI loans and leases receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
3,116,749 |
|
|
$ |
292,927 |
|
|
$ |
— |
|
|
$ |
24,614 |
|
|
$ |
— |
|
|
$ |
3,434,290 |
|
Ending balance: individually evaluated for impairment |
$ |
20,412 |
|
|
$ |
5,089 |
|
|
$ |
— |
|
|
$ |
686 |
|
|
$ |
— |
|
|
$ |
26,187 |
|
Ending balance: collectively evaluated for impairment |
$ |
3,096,337 |
|
|
$ |
287,838 |
|
|
$ |
— |
|
|
$ |
23,928 |
|
|
$ |
— |
|
|
$ |
3,408,103 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on PCI loans: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
5,397 |
|
|
$ |
42 |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
5,441 |
|
Charge-offs |
(137 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(137 |
) |
Loan loss provision (income) |
140 |
|
|
(1 |
) |
|
— |
|
|
5 |
|
|
— |
|
|
144 |
|
Ending balance |
$ |
5,400 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
7 |
|
|
$ |
— |
|
|
$ |
5,448 |
|
|
|
|
|
|
|
|
|
|
|
|
|
PCI loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance: acquired with deteriorated credit quality |
$ |
14,823 |
|
|
$ |
146 |
|
|
$ |
— |
|
|
$ |
51 |
|
|
$ |
— |
|
|
$ |
15,020 |
|
Loan and Lease Quality Indicators
As part of the on-going monitoring of the credit quality of our loan and lease portfolio, we utilize an internal loan and lease grading system to identify credit risk and assign an appropriate grade, from 0 to 8, for each loan or lease in our loan and lease portfolio. Third party loan reviews are performed throughout the year. Additional adjustments are made when determined to be necessary. The loan and lease grade definitions are as follows:
Pass and Pass-Watch: Pass and pass-watch loans and leases, grades 0-4, are in compliance in all respects with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under Special Mention, Substandard or Doubtful. This category is the strongest level of the Bank’s loan and lease grading system. It incorporates all performing loans and leases with no credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.
Special Mention: A special mention credit, grade 5, has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment prospects of the debt and result in a Substandard classification. Loans and leases that have significant actual, not potential, weaknesses are considered more severely classified.
Substandard: A substandard credit, grade 6, has a well-defined weakness that jeopardizes the liquidation of the debt. A credit graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan or lease, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.
Doubtful: A doubtful credit, grade 7, is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the credit, and therefore the amount or timing of a possible loss cannot be determined at the current time.
Loss: A loan or lease classified as loss, grade 8, is considered uncollectible and of such little value that its continuance as an active bank asset is not warranted. This classification does not mean that the loan or lease has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans and leases classified as loss are charged off in a timely manner.
Under regulatory guidance, loans and leases graded special mention or worse are considered criticized loans and leases, and loans and leases graded substandard or worse are considered classified loans and leases.
As of June 30, 2017 and December 31, 2016, pass/pass-watch, special mention and classified loans and leases (excluding PCI loans), disaggregated by loan class, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass/Pass-Watch |
|
Special Mention |
|
Classified |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
Retail |
$ |
909,076 |
|
|
$ |
1,601 |
|
|
$ |
3,793 |
|
|
$ |
914,470 |
|
Hospitality |
724,423 |
|
|
5,798 |
|
|
7,148 |
|
|
737,369 |
|
Gas station |
243,388 |
|
|
2,006 |
|
|
2,172 |
|
|
247,566 |
|
Other |
1,089,244 |
|
|
9,483 |
|
|
3,357 |
|
|
1,102,084 |
|
Construction |
58,159 |
|
|
— |
|
|
— |
|
|
58,159 |
|
Residential property |
382,068 |
|
|
320 |
|
|
304 |
|
|
382,692 |
|
Total real estate loans |
3,406,358 |
|
|
19,208 |
|
|
16,774 |
|
|
3,442,340 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
Commercial term |
155,226 |
|
|
2,143 |
|
|
2,063 |
|
|
159,432 |
|
Commercial lines of credit |
146,921 |
|
|
— |
|
|
1,500 |
|
|
148,421 |
|
International loans |
39,328 |
|
|
— |
|
|
— |
|
|
39,328 |
|
Total commercial and industrial loans |
341,475 |
|
|
2,143 |
|
|
3,563 |
|
|
347,181 |
|
Leases receivable |
253,881 |
|
|
— |
|
|
3,644 |
|
|
257,525 |
|
Consumer loans |
15,956 |
|
|
— |
|
|
1,276 |
|
|
17,232 |
|
Total Non-PCI loans and leases |
$ |
4,017,670 |
|
|
$ |
21,351 |
|
|
$ |
25,257 |
|
|
$ |
4,064,278 |
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
Retail |
$ |
851,147 |
|
|
$ |
2,275 |
|
|
$ |
4,207 |
|
|
$ |
857,629 |
|
Hospitality |
634,397 |
|
|
5,497 |
|
|
9,646 |
|
|
649,540 |
|
Gas station |
252,123 |
|
|
1,911 |
|
|
6,153 |
|
|
260,187 |
|
Other |
1,100,070 |
|
|
1,645 |
|
|
5,874 |
|
|
1,107,589 |
|
Construction |
55,962 |
|
|
— |
|
|
— |
|
|
55,962 |
|
Residential property |
337,227 |
|
|
— |
|
|
564 |
|
|
337,791 |
|
Total real estate loans |
3,230,926 |
|
|
11,328 |
|
|
26,444 |
|
|
3,268,698 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
Commercial term |
133,811 |
|
|
2,060 |
|
|
2,161 |
|
|
138,032 |
|
Commercial lines of credit |
135,699 |
|
|
464 |
|
|
68 |
|
|
136,231 |
|
International loans |
23,406 |
|
|
2,415 |
|
|
— |
|
|
25,821 |
|
Total commercial and industrial loans |
292,916 |
|
|
4,939 |
|
|
2,229 |
|
|
300,084 |
|
Leases receivable |
242,393 |
|
|
— |
|
|
901 |
|
|
243,294 |
|
Consumer loans |
22,139 |
|
|
— |
|
|
691 |
|
|
22,830 |
|
Total Non-PCI loans and leases |
$ |
3,788,374 |
|
|
$ |
16,267 |
|
|
$ |
30,265 |
|
|
$ |
3,834,906 |
|
The following is an aging analysis of loans and leases (excluding PCI loans), disaggregated by loan class, as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59 Days Past Due |
|
60-89 Days Past Due |
|
90 Days or More Past Due |
|
Total Past Due |
|
Current |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
128 |
|
|
$ |
138 |
|
|
$ |
143 |
|
|
$ |
409 |
|
|
$ |
914,061 |
|
|
$ |
914,470 |
|
Hospitality |
1,336 |
|
|
999 |
|
|
3,797 |
|
|
6,132 |
|
|
731,237 |
|
|
737,369 |
|
Gas station |
264 |
|
|
1,582 |
|
|
130 |
|
|
1,976 |
|
|
245,590 |
|
|
247,566 |
|
Other |
876 |
|
|
433 |
|
|
69 |
|
|
1,378 |
|
|
1,100,706 |
|
|
1,102,084 |
|
Construction |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
58,159 |
|
|
58,159 |
|
Residential property |
1,165 |
|
|
50 |
|
|
456 |
|
|
1,671 |
|
|
381,021 |
|
|
382,692 |
|
Total real estate loans |
3,769 |
|
|
3,202 |
|
|
4,595 |
|
|
11,566 |
|
|
3,430,774 |
|
|
3,442,340 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
186 |
|
|
418 |
|
|
372 |
|
|
976 |
|
|
158,456 |
|
|
159,432 |
|
Commercial lines of credit |
95 |
|
|
— |
|
|
— |
|
|
95 |
|
|
148,326 |
|
|
148,421 |
|
International loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
39,328 |
|
|
39,328 |
|
Total commercial and industrial loans |
281 |
|
|
418 |
|
|
372 |
|
|
1,071 |
|
|
346,110 |
|
|
347,181 |
|
Leases receivable |
1,983 |
|
|
1,787 |
|
|
1,971 |
|
|
5,741 |
|
|
251,784 |
|
|
257,525 |
|
Consumer loans |
121 |
|
|
— |
|
|
990 |
|
|
1,111 |
|
|
16,121 |
|
|
17,232 |
|
Total Non-PCI loans and leases |
$ |
6,154 |
|
|
$ |
5,407 |
|
|
$ |
7,928 |
|
|
$ |
19,489 |
|
|
$ |
4,044,789 |
|
|
$ |
4,064,278 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
9 |
|
|
$ |
137 |
|
|
$ |
234 |
|
|
$ |
380 |
|
|
$ |
857,249 |
|
|
$ |
857,629 |
|
Hospitality |
1,037 |
|
|
46 |
|
|
600 |
|
|
1,683 |
|
|
647,857 |
|
|
649,540 |
|
Gas station |
245 |
|
|
643 |
|
|
137 |
|
|
1,025 |
|
|
259,162 |
|
|
260,187 |
|
Other |
432 |
|
|
79 |
|
|
1,100 |
|
|
1,611 |
|
|
1,105,978 |
|
|
1,107,589 |
|
Construction |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
55,962 |
|
|
55,962 |
|
Residential property |
730 |
|
|
89 |
|
|
423 |
|
|
1,242 |
|
|
336,549 |
|
|
337,791 |
|
Total real estate loans |
2,453 |
|
|
994 |
|
|
2,494 |
|
|
5,941 |
|
|
3,262,757 |
|
|
3,268,698 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
484 |
|
|
42 |
|
|
111 |
|
|
637 |
|
|
137,395 |
|
|
138,032 |
|
Commercial lines of credit |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
136,231 |
|
|
136,231 |
|
International loans |
80 |
|
|
— |
|
|
— |
|
|
80 |
|
|
25,741 |
|
|
25,821 |
|
Total commercial and industrial loans |
564 |
|
|
42 |
|
|
111 |
|
|
717 |
|
|
299,367 |
|
|
300,084 |
|
Leases receivable |
2,090 |
|
|
1,043 |
|
|
385 |
|
|
3,518 |
|
|
239,776 |
|
|
243,294 |
|
Consumer loans |
170 |
|
|
— |
|
|
— |
|
|
170 |
|
|
22,660 |
|
|
22,830 |
|
Total Non-PCI loans and leases |
$ |
5,277 |
|
|
$ |
2,079 |
|
|
$ |
2,990 |
|
|
$ |
10,346 |
|
|
$ |
3,824,560 |
|
|
$ |
3,834,906 |
|
There were no loans that were 90 days or more past due and accruing interest as of June 30, 2017 and 2016.
Impaired Loans and Leases
Loans and leases are considered impaired when the Bank will be unable to collect all interest and principal payments per the contractual terms of the loan and lease agreement, unless the loan is well-collateralized and in the process of collection; or they are classified as Troubled Debt Restructurings (“TDRs”) because, due to the financial difficulties of the borrowers, we have granted concessions to the borrowers we would not otherwise consider; or when current information or events make it unlikely to collect in full according to the contractual terms of the loan or lease agreements; or there is a deterioration in the borrower’s financial condition that raises uncertainty as to timely collection of either principal or interest; or full payment of both interest and principal is in doubt according to the original contractual terms.
We evaluate loan and lease impairment in accordance with applicable GAAP. Impaired loans and leases are measured based on the present value of expected future cash flows discounted at the receivable's effective interest rate or, as a practical expedient, at the receivable's observable market price or the fair value of the collateral if the loan or lease is collateral dependent, less estimated costs to sell. If the measure of the impaired loan or lease is less than the recorded investment in the loan or lease, the deficiency is either charged off against the allowance for loan and lease losses or we establish a specific allocation in the allowance for loan and lease losses. Additionally, loans and leases that are considered impaired are specifically excluded from the quarterly migration analysis when determining the amount of the allowance for loan and lease losses required for the period.
The allowance for collateral-dependent loans is determined by calculating the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as nonperforming. We continue to monitor the collateral coverage, using recent appraisals, on these loans on a quarterly basis and adjust the allowance accordingly.
The following tables provide information on impaired loans and leases (excluding PCI loans), disaggregated by loan class, as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Recorded
Investment |
|
Unpaid
Principal
Balance |
|
With No
Related
Allowance
Recorded |
|
With an
Allowance
Recorded |
|
Related
Allowance |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
Retail |
$ |
1,495 |
|
|
$ |
1,506 |
|
|
$ |
1,186 |
|
|
$ |
309 |
|
|
$ |
66 |
|
Hospitality |
6,057 |
|
|
6,730 |
|
|
2,341 |
|
|
3,716 |
|
|
3,078 |
|
Gas station |
4,828 |
|
|
4,991 |
|
|
4,828 |
|
|
— |
|
|
— |
|
Other |
4,502 |
|
|
4,810 |
|
|
3,652 |
|
|
850 |
|
|
494 |
|
Residential property |
2,813 |
|
|
2,837 |
|
|
2,813 |
|
|
— |
|
|
— |
|
Total real estate loans |
19,695 |
|
|
20,874 |
|
|
14,820 |
|
|
4,875 |
|
|
3,638 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
Commercial term |
3,775 |
|
|
3,859 |
|
|
1,252 |
|
|
2,523 |
|
|
651 |
|
Commercial lines of credit |
1,500 |
|
|
1,500 |
|
|
— |
|
|
1,500 |
|
|
1,190 |
|
Total commercial and industrial loans |
5,275 |
|
|
5,359 |
|
|
1,252 |
|
|
4,023 |
|
|
1,841 |
|
Consumer loans |
1,224 |
|
|
1,228 |
|
|
1,224 |
|
|
— |
|
|
— |
|
Total Non-PCI loans and leases |
$ |
26,194 |
|
|
$ |
27,461 |
|
|
$ |
17,296 |
|
|
$ |
8,898 |
|
|
$ |
5,479 |
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
Retail |
$ |
1,678 |
|
|
$ |
1,684 |
|
|
$ |
151 |
|
|
$ |
1,527 |
|
|
$ |
120 |
|
Hospitality |
6,227 |
|
|
6,823 |
|
|
2,243 |
|
|
3,984 |
|
|
3,078 |
|
Gas station |
4,984 |
|
|
5,092 |
|
|
4,984 |
|
|
— |
|
|
— |
|
Other |
6,070 |
|
|
6,808 |
|
|
3,127 |
|
|
2,943 |
|
|
782 |
|
Residential property |
2,798 |
|
|
2,851 |
|
|
2,798 |
|
|
— |
|
|
— |
|
Total real estate loans |
21,757 |
|
|
23,258 |
|
|
13,303 |
|
|
8,454 |
|
|
3,980 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
Commercial term |
4,106 |
|
|
4,171 |
|
|
1,229 |
|
|
2,877 |
|
|
347 |
|
Commercial lines of credit |
68 |
|
|
68 |
|
|
68 |
|
|
— |
|
|
— |
|
Total commercial and industrial loans |
4,174 |
|
|
4,239 |
|
|
1,297 |
|
|
2,877 |
|
|
347 |
|
Consumer loans |
419 |
|
|
489 |
|
|
419 |
|
|
— |
|
|
— |
|
Total Non-PCI loans and leases |
$ |
26,350 |
|
|
$ |
27,986 |
|
|
$ |
15,019 |
|
|
$ |
11,331 |
|
|
$ |
4,327 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
Average Recorded Investment |
|
Interest
Income
Recognized
|
|
Average Recorded Investment |
|
Interest
Income
Recognized
|
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
Retail |
$ |
1,500 |
|
|
$ |
29 |
|
|
$ |
1,584 |
|
|
$ |
61 |
|
Hospitality |
6,074 |
|
|
99 |
|
|
6,164 |
|
|
167 |
|
Gas station |
4,860 |
|
|
117 |
|
|
4,844 |
|
|
211 |
|
Other |
4,532 |
|
|
98 |
|
|
4,932 |
|
|
187 |
|
Residential property |
2,823 |
|
|
28 |
|
|
2,798 |
|
|
61 |
|
Total real estate loans |
19,789 |
|
|
371 |
|
|
20,322 |
|
|
687 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
Commercial term |
3,829 |
|
|
52 |
|
|
3,861 |
|
|
110 |
|
Commercial lines of credit |
1,500 |
|
|
16 |
|
|
750 |
|
|
16 |
|
Total commercial and industrial loans |
5,329 |
|
|
68 |
|
|
4,611 |
|
|
126 |
|
Consumer loans |
1,226 |
|
|
3 |
|
|
775 |
|
|
6 |
|
Total Non-PCI loans and leases |
$ |
26,344 |
|
|
$ |
442 |
|
|
$ |
25,708 |
|
|
$ |
819 |
|
|
|
|
|
|
|
|
|
June 30, 2016 |
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
Retail |
$ |
2,434 |
|
|
$ |
44 |
|
|
$ |
2,653 |
|
|
$ |
85 |
|
Hospitality |
3,362 |
|
|
146 |
|
|
5,032 |
|
|
300 |
|
Gas station |
4,653 |
|
|
99 |
|
|
4,880 |
|
|
261 |
|
Other |
7,525 |
|
|
183 |
|
|
7,887 |
|
|
395 |
|
Residential property |
2,537 |
|
|
27 |
|
|
2,653 |
|
|
57 |
|
Total real estate loans |
20,511 |
|
|
499 |
|
|
23,105 |
|
|
1,098 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
Commercial term |
5,089 |
|
|
87 |
|
|
5,151 |
|
|
164 |
|
Commercial lines of credit |
28 |
|
|
4 |
|
|
37 |
|
|
9 |
|
International loans |
— |
|
|
— |
|
|
630 |
|
|
— |
|
Total commercial and industrial loans |
5,117 |
|
|
91 |
|
|
5,818 |
|
|
173 |
|
Consumer loans |
690 |
|
|
8 |
|
|
692 |
|
|
16 |
|
Total Non-PCI loans and leases |
$ |
26,318 |
|
|
$ |
598 |
|
|
$ |
29,615 |
|
|
$ |
1,287 |
|
The following is a summary of interest foregone on impaired loans and leases (excluding PCI loans) for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
June 30, |
|
Six Months Ended
June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
(in thousands) |
Interest income that would have been recognized had impaired loans and leases performed in accordance with their original terms |
$ |
622 |
|
|
$ |
718 |
|
|
$ |
1,213 |
|
|
$ |
1,611 |
|
Less: Interest income recognized on impaired loans and leases |
(442 |
) |
|
(598 |
) |
|
(819 |
) |
|
(1,287 |
) |
Interest foregone on impaired loans and leases |
$ |
180 |
|
|
$ |
120 |
|
|
$ |
394 |
|
|
$ |
324 |
|
There were no commitments to lend additional funds to borrowers whose loans are included in the table above.
Nonaccrual Loans and Leases and Nonperforming Assets
Loans and leases are placed on nonaccrual status when, in the opinion of management, the full timely collection of principal or interest is in doubt. Generally, the accrual of interest is discontinued when principal or interest payments become more than 90 days past due, unless management believes the receivable is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan or lease receivable on nonaccrual status earlier, depending upon the individual circumstances surrounding the delinquency. When a receivable is placed on nonaccrual status, previously accrued but unpaid interest is reversed against current income. Subsequent collections of cash are applied as principal reductions when received, except when the ultimate collectability of principal is probable, in which case interest payments are credited to income. Nonaccrual loans and leases may be restored to accrual status when principal and interest payments become current and full repayment is expected.
The following table details nonaccrual loans and leases (excluding PCI loans), disaggregated by loan class, as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
(in thousands) |
Real estate loans: |
|
|
|
Commercial property |
|
|
|
Retail |
$ |
210 |
|
|
$ |
404 |
|
Hospitality |
5,199 |
|
|
5,266 |
|
Gas station |
945 |
|
|
1,025 |
|
Other |
1,990 |
|
|
2,033 |
|
Residential property |
667 |
|
|
564 |
|
Total real estate loans |
9,011 |
|
|
9,292 |
|
Commercial and industrial loans: |
|
|
|
Commercial term |
1,199 |
|
|
824 |
|
Commercial lines of credit |
1,500 |
|
|
— |
|
Total commercial and industrial loans |
2,699 |
|
|
824 |
|
Leases receivable |
3,644 |
|
|
901 |
|
Consumer loans |
1,110 |
|
|
389 |
|
Total nonaccrual Non-PCI loans and leases |
$ |
16,464 |
|
|
$ |
11,406 |
|
The following table details nonperforming assets (excluding PCI loans) as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
June 30, 2017 |
|
December 31, 2016 |
|
(in thousands) |
Nonaccrual Non-PCI loans and leases |
$ |
16,464 |
|
|
$ |
11,406 |
|
Loans and leases 90 days or more past due and still accruing |
— |
|
|
— |
|
Total nonperforming Non-PCI loans and leases |
16,464 |
|
|
11,406 |
|
OREO |
4,321 |
|
|
7,484 |
|
Total nonperforming assets |
$ |
20,785 |
|
|
$ |
18,890 |
|
As of June 30, 2017, OREO consisted of seven properties with a combined carrying value of $4.3 million, six of which with a combined carrying value of $4.2 million were acquired in the Central Bancorp Inc. ("CBI") acquisition on August 31, 2014, or were obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. As of December 31, 2016, OREO consisted of 12 properties with a combined carrying value of $7.5 million, including $5.7 million OREO acquired in the CBI acquisition or obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date.
Troubled Debt Restructurings
The following table details TDRs (excluding PCI loans) as of June 30, 2017 and December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nonaccrual TDRs |
|
Accrual TDRs |
|
Deferral
of
Principal |
|
Deferral
of
Principal
and
Interest |
|
Reduction
of
Principal
and
Interest |
|
Extension
of
Maturity |
|
Total |
|
Deferral
of
Principal |
|
Deferral
of
Principal
and
Interest |
|
Reduction
of
Principal
and
Interest |
|
Extension
of
Maturity |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
$ |
2,083 |
|
|
$ |
3,989 |
|
|
$ |
69 |
|
|
$ |
— |
|
|
$ |
6,141 |
|
|
$ |
3,772 |
|
|
$ |
— |
|
|
$ |
1,255 |
|
|
$ |
1,255 |
|
|
$ |
6,282 |
|
Commercial and industrial loans |
139 |
|
|
67 |
|
|
352 |
|
|
385 |
|
|
943 |
|
|
14 |
|
|
189 |
|
|
1,709 |
|
|
540 |
|
|
2,452 |
|
Consumer loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
114 |
|
|
— |
|
|
114 |
|
Total Non-PCI TDR loans |
$ |
2,222 |
|
|
$ |
4,056 |
|
|
$ |
421 |
|
|
$ |
385 |
|
|
$ |
7,084 |
|
|
$ |
3,786 |
|
|
$ |
189 |
|
|
$ |
3,078 |
|
|
$ |
1,795 |
|
|
$ |
8,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
$ |
1,679 |
|
|
$ |
4,373 |
|
|
$ |
143 |
|
|
$ |
— |
|
|
$ |
6,195 |
|
|
$ |
4,795 |
|
|
$ |
— |
|
|
$ |
1,514 |
|
|
$ |
1,633 |
|
|
$ |
7,942 |
|
Commercial and industrial loans |
149 |
|
|
71 |
|
|
69 |
|
|
419 |
|
|
708 |
|
|
22 |
|
|
198 |
|
|
2,135 |
|
|
730 |
|
|
3,085 |
|
Consumer loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
119 |
|
|
— |
|
|
119 |
|
Total Non-PCI TDR loans |
$ |
1,828 |
|
|
$ |
4,444 |
|
|
$ |
212 |
|
|
$ |
419 |
|
|
$ |
6,903 |
|
|
$ |
4,817 |
|
|
$ |
198 |
|
|
$ |
3,768 |
|
|
$ |
2,363 |
|
|
$ |
11,146 |
|
As of June 30, 2017 and December 31, 2016, total TDRs were $15.9 million and $18.0 million, respectively. A debt restructuring is considered a TDR if we grant a concession, that we would not have otherwise considered to the borrower, for economic or legal reasons related to the borrower’s financial difficulties. Loans are considered to be TDRs if they were restructured through payment structure modifications such as reducing the amount of principal and interest due monthly and/or allowing for interest only monthly payments for three months or more. All TDRs are impaired and are individually evaluated for specific impairment using one of these three criteria: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent. At June 30, 2017 and December 31, 2016, $3.5 million and $3.4 million, respectively, of allowance relating to these loans were included in the allowance for loan and lease losses.
For the restructured loans on accrual status, we determined that, based on the financial capabilities of the borrowers at the time of the loan restructuring and the borrowers’ past performance in the payment of debt service under the previous loan terms, performance and collection under the revised terms are probable.
During the three months ended June 30, 2016, there was one commercial term loan with recorded investment of $55,000 that defaulted subsequent to the modifications occurring within the previous 12 months. During the six months ended June 30, 2016, there was one commercial real estate loan with recorded investment of $399,000 and two commercial term loans with combined recorded investment of $85,000 that defaulted subsequent to the modifications occurring within the previous 12 months. There were no such defaults during the three and six months periods ended June 30, 2017.
Purchased Credit Impaired Loans
The following table summarizes the changes in carrying value of PCI loans during the three months ended June 30, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
Carrying Amount |
|
Accretable Yield |
|
(in thousands) |
Balance at January 1, 2017 |
$ |
8,892 |
|
|
$ |
(5,677 |
) |
Accretion |
317 |
|
|
317 |
|
Payments received |
(1,434 |
) |
|
— |
|
Disposal/transfer to OREO |
37 |
|
|
— |
|
Change in expected cash flows, net |
— |
|
|
121 |
|
Loan loss (provision) income |
252 |
|
|
— |
|
Balance at June 30, 2017 |
$ |
8,064 |
|
|
$ |
(5,239 |
) |
|
|
|
|
Balance at January 1, 2016 |
$ |
14,573 |
|
|
$ |
(5,944 |
) |
Accretion |
753 |
|
|
753 |
|
Payments received |
(6,713 |
) |
|
— |
|
Disposal/transfer to OREO |
1,103 |
|
|
— |
|
Change in expected cash flows, net |
— |
|
|
683 |
|
Loan loss (provision) income |
(144 |
) |
|
— |
|
Balance at June 30, 2016 |
$ |
9,572 |
|
|
$ |
(4,508 |
) |
As of June 30, 2017 and December 31, 2016, pass/pass-watch, special mention and classified PCI loans, disaggregated by loan class, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass/Pass-Watch |
|
Special Mention |
|
Classified |
|
Total |
|
Allowance |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
$ |
1,243 |
|
|
$ |
1,108 |
|
|
$ |
6,334 |
|
|
$ |
8,685 |
|
|
$ |
658 |
|
|
$ |
8,027 |
|
Commercial and industrial loans |
— |
|
|
— |
|
|
55 |
|
|
55 |
|
|
41 |
|
|
14 |
|
Consumer loans |
— |
|
|
— |
|
|
44 |
|
|
44 |
|
|
21 |
|
|
23 |
|
Total PCI loans |
$ |
1,243 |
|
|
$ |
1,108 |
|
|
$ |
6,433 |
|
|
$ |
8,784 |
|
|
$ |
720 |
|
|
$ |
8,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
$ |
1,153 |
|
|
$ |
1,180 |
|
|
$ |
7,344 |
|
|
$ |
9,677 |
|
|
$ |
922 |
|
|
$ |
8,755 |
|
Commercial and industrial loans |
— |
|
|
— |
|
|
136 |
|
|
136 |
|
|
41 |
|
|
95 |
|
Consumer loans |
— |
|
|
— |
|
|
50 |
|
|
50 |
|
|
8 |
|
|
42 |
|
Total PCI loans |
$ |
1,153 |
|
|
$ |
1,180 |
|
|
$ |
7,530 |
|
|
$ |
9,863 |
|
|
$ |
971 |
|
|
$ |
8,892 |
|
Loans accounted for as PCI are generally considered accruing and performing loans as the accretable discount is accreted to interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due are still considered to be accruing and performing loans. If the timing and amount of future cash flows is not reasonably estimable, the loans are classified as nonaccrual loans and interest income is not recognized until the timing and amount of future cash flows can be reasonably estimated. As of June 30, 2017 and December 31, 2016, we had no PCI loans on nonaccrual status and included in the delinquency table below.
The following table presents a summary of the borrowers' underlying payment status of PCI loans as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
30-59 Days Past Due |
|
60-89 Days Past Due |
|
90 Days or More Past Due |
|
Total Past Due |
|
Current |
|
Total |
|
Allowance Amount |
|
Total |
|
(in thousands) |
June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
$ |
349 |
|
|
$ |
— |
|
|
$ |
425 |
|
|
$ |
774 |
|
|
$ |
7,911 |
|
|
$ |
8,685 |
|
|
$ |
658 |
|
|
$ |
8,027 |
|
Commercial and industrial loans |
— |
|
|
— |
|
|
5 |
|
|
5 |
|
|
50 |
|
|
55 |
|
|
41 |
|
|
14 |
|
Consumer loans |
— |
|
|
— |
|
|
39 |
|
|
39 |
|
|
5 |
|
|
44 |
|
|
21 |
|
|
23 |
|
Total PCI loans |
$ |
349 |
|
|
$ |
— |
|
|
$ |
469 |
|
|
$ |
818 |
|
|
$ |
7,966 |
|
|
$ |
8,784 |
|
|
$ |
720 |
|
|
$ |
8,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans |
$ |
975 |
|
|
$ |
— |
|
|
$ |
361 |
|
|
$ |
1,336 |
|
|
$ |
8,341 |
|
|
$ |
9,677 |
|
|
$ |
922 |
|
|
$ |
8,755 |
|
Commercial and industrial loans |
— |
|
|
— |
|
|
6 |
|
|
6 |
|
|
130 |
|
|
136 |
|
|
41 |
|
|
95 |
|
Consumer loans |
— |
|
|
— |
|
|
50 |
|
|
50 |
|
|
— |
|
|
50 |
|
|
8 |
|
|
42 |
|
Total PCI loans |
$ |
975 |
|
|
$ |
— |
|
|
$ |
417 |
|
|
$ |
1,392 |
|
|
$ |
8,471 |
|
|
$ |
9,863 |
|
|
$ |
971 |
|
|
$ |
8,892 |
|
Below is a summary of PCI loans as of June 30, 2017 and December 31, 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pooled PCI Loans |
|
Non-pooled PCI Loans |
|
|
|
Number of Loans |
|
Number of Pools |
|
Carrying Amount
(in thousands)
|
|
Percentage of Total |
|
Number of Loans |
|
Carrying Amount
(in thousands)
|
|
Percentage of Total |
|
Total PCI Loans
(in thousands)
|
June 30, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
41 |
|
|
6 |
|
|
$ |
6,837 |
|
|
88.6 |
% |
|
1 |
|
|
$ |
883 |
|
|
11.4 |
% |
|
$ |
7,720 |
|
Residential property |
— |
|
|
— |
|
|
— |
|
|
— |
% |
|
1 |
|
|
965 |
|
|
100.0 |
% |
|
$ |
965 |
|
Total real estate loans |
41 |
|
|
6 |
|
|
6,837 |
|
|
78.7 |
% |
|
2 |
|
|
1,848 |
|
|
21.3 |
% |
|
8,685 |
|
Commercial and industrial loans |
3 |
|
|
3 |
|
|
55 |
|
|
100.0 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
55 |
|
Consumer loans |
1 |
|
|
1 |
|
|
5 |
|
|
11.4 |
% |
|
1 |
|
|
39 |
|
|
88.6 |
% |
|
44 |
|
Total acquired loans |
45 |
|
|
10 |
|
|
6,897 |
|
|
78.5 |
% |
|
3 |
|
|
1,887 |
|
|
21.5 |
% |
|
8,784 |
|
Allowance for loan losses |
|
|
|
|
(355 |
) |
|
|
|
|
|
(365 |
) |
|
|
|
(720 |
) |
Total carrying amount |
|
|
|
|
$ |
6,542 |
|
|
|
|
|
|
$ |
1,522 |
|
|
|
|
$ |
8,064 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pooled PCI Loans |
|
Non-pooled PCI Loans |
|
|
|
Number of Loans |
|
Number of Pools |
|
Carrying Amount
(in thousands)
|
|
Percentage of Total |
|
Number of Loans |
|
Carrying Amount
(in thousands)
|
|
Percentage of Total |
|
Total PCI Loans
(in thousands)
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
45 |
|
|
6 |
|
|
$ |
7,780 |
|
|
89.4 |
% |
|
1 |
|
|
$ |
921 |
|
|
10.6 |
% |
|
$ |
8,701 |
|
Residential property |
— |
|
|
— |
|
|
— |
|
|
— |
% |
|
2 |
|
|
976 |
|
|
100.0 |
% |
|
$ |
976 |
|
Total real estate loans |
45 |
|
|
6 |
|
|
7,780 |
|
|
80.4 |
% |
|
3 |
|
|
1,897 |
|
|
19.6 |
% |
|
9,677 |
|
Commercial and industrial loans |
6 |
|
|
3 |
|
|
136 |
|
|
100.0 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
136 |
|
Consumer loans |
1 |
|
|
1 |
|
|
50 |
|
|
100.0 |
% |
|
— |
|
|
— |
|
|
— |
% |
|
50 |
|
Total acquired loans |
52 |
|
|
10 |
|
|
7,966 |
|
|
80.8 |
% |
|
3 |
|
|
1,897 |
|
|
19.2 |
% |
|
9,863 |
|
Allowance for loan losses |
|
|
|
|
(617 |
) |
|
|
|
|
|
(354 |
) |
|
|
|
(971 |
) |
Total carrying amount |
|
|
|
|
$ |
7,349 |
|
|
|
|
|
|
$ |
1,543 |
|
|
|
|
$ |
8,892 |
|
|