| Loans and Leases |
Loans and Leases
The Board of Directors and management review and approve the Bank’s loan and lease policy and procedures on a regular basis to reflect issues such as regulatory and organizational structure changes, strategic planning revisions, concentrations of credit, loan and lease delinquencies and nonperforming loans and leases, problem loans and leases, and policy adjustments.
Real estate loans are loans secured by liens or interest in real estate, to provide purchase, construction, and refinance on real estate properties. Commercial and industrial loans consist of commercial term loans, commercial lines of credit, and Small Business Administration (“SBA”) loans. Leases receivables include equipment finance agreements which are typically secured by the business assets being financed. Consumer loans consist of auto loans, credit cards, personal loans, and home equity lines of credit. We maintain management loan review and monitoring departments that review and monitor pass graded loans as well as problem loans to prevent further deterioration.
Concentrations of Credit: The majority of the Bank’s loan and lease portfolio consists of commercial real estate, residential real estate and commercial and industrial loans. The Bank has been diversifying and monitoring commercial real estate loans based on property types, tightening underwriting standards, and portfolio liquidity and management, and has not exceeded certain specified limits set forth in the Bank’s loan and lease policy.
Loans and leases receivable
Loans and leases receivable consisted of the following as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 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 |
$ |
913,628 |
|
|
$ |
1,645 |
|
|
$ |
915,273 |
|
|
$ |
857,629 |
|
|
$ |
2,324 |
|
|
$ |
859,953 |
|
Hotel/motel |
679,683 |
|
|
1,642 |
|
|
681,325 |
|
|
649,540 |
|
|
1,618 |
|
|
651,158 |
|
Other (1)
|
1,413,852 |
|
|
3,421 |
|
|
1,417,273 |
|
|
1,367,776 |
|
|
4,759 |
|
|
1,372,535 |
|
Total commercial property loans |
3,007,163 |
|
|
6,708 |
|
|
3,013,871 |
|
|
2,874,945 |
|
|
8,701 |
|
|
2,883,646 |
|
Construction |
55,190 |
|
|
— |
|
|
55,190 |
|
|
55,962 |
|
|
— |
|
|
55,962 |
|
Residential property |
520,902 |
|
|
951 |
|
|
521,853 |
|
|
337,791 |
|
|
976 |
|
|
338,767 |
|
Total real estate loans |
3,583,255 |
|
|
7,659 |
|
|
3,590,914 |
|
|
3,268,698 |
|
|
9,677 |
|
|
3,278,375 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
182,636 |
|
|
49 |
|
|
182,685 |
|
|
138,032 |
|
|
136 |
|
|
138,168 |
|
Commercial lines of credit |
181,894 |
|
|
— |
|
|
181,894 |
|
|
136,231 |
|
|
— |
|
|
136,231 |
|
International loans |
34,622 |
|
|
— |
|
|
34,622 |
|
|
25,821 |
|
|
— |
|
|
25,821 |
|
Total commercial and industrial loans |
399,152 |
|
|
49 |
|
|
399,201 |
|
|
300,084 |
|
|
136 |
|
|
300,220 |
|
Leases receivable |
297,284 |
|
|
— |
|
|
297,284 |
|
|
243,294 |
|
|
— |
|
|
243,294 |
|
Consumer loans (2)
|
17,019 |
|
|
40 |
|
|
17,059 |
|
|
22,830 |
|
|
50 |
|
|
22,880 |
|
Total loans and leases |
4,296,710 |
|
|
7,748 |
|
|
4,304,458 |
|
|
3,834,906 |
|
|
9,863 |
|
|
3,844,769 |
|
Allowance for loan and lease losses |
(30,723 |
) |
|
(320 |
) |
|
(31,043 |
) |
|
(31,458 |
) |
|
(971 |
) |
|
(32,429 |
) |
Loans and leases receivable, net |
$ |
4,265,987 |
|
|
$ |
7,428 |
|
|
$ |
4,273,415 |
|
|
$ |
3,803,448 |
|
|
$ |
8,892 |
|
|
$ |
3,812,340 |
|
|
|
(1) |
Includes, among other property types, mixed-use, gas station, apartment, office, industrial, faith-based facilities and warehouse; the remaining real estate categories represents less than one percent of the Bank's total loans and leases. |
|
|
(2) |
Consumer loans include home equity lines of credit of $14.2 million and $17.7 million as of December 31, 2017 and 2016, respectively.
|
Accrued interest on loans and leases receivable was $10.2 million and $8.2 million at December 31, 2017 and 2016, respectively. At December 31, 2017 and 2016, loans and leases receivable totaling $1.1 billion and $1.0 billion, respectively, were pledged to secure advances from the FHLB.
The following table details the information on the sales and reclassifications of SBA loans receivable to loans held for sale by portfolio segment for the years ended December 31, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial and
Industrial |
|
Total
SBA Loans |
|
(In thousands) |
December 31, 2017 |
|
|
|
|
|
Balance at beginning of period |
$ |
7,410 |
|
|
$ |
1,906 |
|
|
$ |
9,316 |
|
Origination of loans held for sale |
70,710 |
|
|
38,401 |
|
|
109,111 |
|
Sales of loans held for sale |
(74,344 |
) |
|
(37,633 |
) |
|
(111,977 |
) |
Principal payoffs and amortization |
(30 |
) |
|
(26 |
) |
|
(56 |
) |
Balance at end of period |
$ |
3,746 |
|
|
$ |
2,648 |
|
|
$ |
6,394 |
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
Balance at beginning of period |
$ |
840 |
|
|
$ |
2,034 |
|
|
$ |
2,874 |
|
Origination of loans held for sale |
65,416 |
|
|
25,951 |
|
|
91,367 |
|
Sales of loans held for sale |
(58,836 |
) |
|
(26,065 |
) |
|
(84,901 |
) |
Principal payoffs and amortization |
(10 |
) |
|
(14 |
) |
|
(24 |
) |
Balance at end of period |
$ |
7,410 |
|
|
$ |
1,906 |
|
|
$ |
9,316 |
|
Allowance for Loan and Lease Losses
Activity in the allowance for loan and lease losses and allowance for off-balance sheet items was as follows for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-PCI Loans and Leases |
|
PCI Loans |
|
Total |
As of and for the Year Ended December 31, 2017 |
(In thousands) |
Balance at beginning of period |
$ |
31,458 |
|
|
$ |
971 |
|
|
$ |
32,429 |
|
Charge-offs |
(5,899 |
) |
|
— |
|
|
(5,899 |
) |
Recoveries on loans and leases previously charged off |
3,682 |
|
|
— |
|
|
3,682 |
|
Net loan and lease charge-offs |
(2,217 |
) |
|
— |
|
|
(2,217 |
) |
Loan and lease loss provision (income) |
1,482 |
|
|
(651 |
) |
|
831 |
|
Balance at end of period |
$ |
30,723 |
|
|
$ |
320 |
|
|
$ |
31,043 |
|
|
|
|
|
|
|
As of and for the Year Ended December 31, 2016 |
|
|
|
|
|
Balance at beginning of period |
$ |
37,494 |
|
|
$ |
5,441 |
|
|
$ |
42,935 |
|
Charge-offs |
(3,736 |
) |
|
(5,133 |
) |
|
(8,869 |
) |
Recoveries on loans and leases previously charged off |
2,702 |
|
|
— |
|
|
2,702 |
|
Net loan and lease charge-offs |
(1,034 |
) |
|
(5,133 |
) |
|
(6,167 |
) |
Loan and lease loss provision (income) |
(5,002 |
) |
|
663 |
|
|
(4,339 |
) |
Balance at end of period |
$ |
31,458 |
|
|
$ |
971 |
|
|
$ |
32,429 |
|
|
|
|
|
|
|
As of and for the Year Ended December 31, 2015 |
|
|
|
|
|
Balance at beginning of period |
$ |
51,640 |
|
|
$ |
1,026 |
|
|
$ |
52,666 |
|
Charge-offs |
(3,531 |
) |
|
— |
|
|
(3,531 |
) |
Recoveries on loans and leases previously charged off |
5,423 |
|
|
— |
|
|
5,423 |
|
Net loan and lease recoveries |
1,892 |
|
|
— |
|
|
1,892 |
|
Loan and lease loss provision (income) |
(16,038 |
) |
|
4,415 |
|
|
(11,623 |
) |
Balance at end of period |
$ |
37,494 |
|
|
$ |
5,441 |
|
|
$ |
42,935 |
|
The following table details the information on the allowance for loan and lease losses on non-PCI loans leases by portfolio segment for the years ended December 31, 2017 and 2016:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial
and Industrial |
|
Leases
Receivable
|
|
Consumer |
|
Unallocated |
|
Total |
|
(In thousands) |
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on non-PCI loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
25,212 |
|
|
$ |
5,582 |
|
|
307 |
|
|
$ |
191 |
|
|
$ |
166 |
|
|
$ |
31,458 |
|
Charge-offs |
(2,150 |
) |
|
(2,516 |
) |
|
(1,233 |
) |
|
— |
|
|
— |
|
|
(5,899 |
) |
Recoveries on loans and leases previously charged off |
1,527 |
|
|
1,901 |
|
|
239 |
|
|
15 |
|
|
— |
|
|
3,682 |
|
Loan and lease loss provision (income) |
(7,836 |
) |
|
2,392 |
|
|
6,966 |
|
|
(104 |
) |
|
64 |
|
|
1,482 |
|
Ending balance |
$ |
16,753 |
|
|
$ |
7,359 |
|
|
$ |
6,279 |
|
|
$ |
102 |
|
|
$ |
230 |
|
|
$ |
30,723 |
|
Ending balance: individually evaluated for impairment |
$ |
2,093 |
|
|
$ |
441 |
|
|
$ |
3,334 |
|
|
$ |
10 |
|
|
$ |
— |
|
|
$ |
5,878 |
|
Ending balance: collectively evaluated for impairment |
$ |
14,660 |
|
|
$ |
6,918 |
|
|
$ |
2,945 |
|
|
$ |
92 |
|
|
$ |
230 |
|
|
$ |
24,845 |
|
Non-PCI loans and leases receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
3,583,255 |
|
|
$ |
399,152 |
|
|
$ |
297,284 |
|
|
$ |
17,019 |
|
|
$ |
— |
|
|
$ |
4,296,710 |
|
Ending balance: individually evaluated for impairment |
$ |
18,663 |
|
|
$ |
3,040 |
|
|
$ |
4,452 |
|
|
$ |
1,029 |
|
|
$ |
— |
|
|
$ |
27,184 |
|
Ending balance: collectively evaluated for impairment |
$ |
3,564,592 |
|
|
$ |
396,112 |
|
|
$ |
292,832 |
|
|
$ |
15,990 |
|
|
$ |
— |
|
|
$ |
4,269,526 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on PCI loans: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
922 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
8 |
|
|
$ |
— |
|
|
$ |
971 |
|
Provision |
(663 |
) |
|
— |
|
|
— |
|
|
12 |
|
|
— |
|
|
(651 |
) |
Ending balance |
$ |
259 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
20 |
|
|
$ |
— |
|
|
$ |
320 |
|
PCI loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance: acquired with deteriorated credit quality |
$ |
7,659 |
|
|
$ |
49 |
|
|
$ |
— |
|
|
$ |
40 |
|
|
$ |
— |
|
|
$ |
7,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real Estate |
|
Commercial
and Industrial
|
|
Leases
Receivable
|
|
Consumer |
|
Unallocated |
|
Total |
|
(In thousands) |
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on non-PCI loans and leases: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
29,800 |
|
|
$ |
7,081 |
|
|
— |
|
|
$ |
242 |
|
|
$ |
371 |
|
|
$ |
37,494 |
|
Charge-offs |
(3,022 |
) |
|
(706 |
) |
|
(6 |
) |
|
(2 |
) |
|
— |
|
|
(3,736 |
) |
Recoveries on loans and leases previously charged off |
667 |
|
|
1,978 |
|
|
1 |
|
|
56 |
|
|
— |
|
|
2,702 |
|
Loan and lease loss provision (income) |
(2,233 |
) |
|
(2,771 |
) |
|
312 |
|
|
(105 |
) |
|
(205 |
) |
|
(5,002 |
) |
Ending balance |
$ |
25,212 |
|
|
$ |
5,582 |
|
|
$ |
307 |
|
|
$ |
191 |
|
|
$ |
166 |
|
|
$ |
31,458 |
|
Ending balance: individually evaluated for impairment |
$ |
3,980 |
|
|
$ |
347 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
4,327 |
|
Ending balance: collectively evaluated for impairment |
$ |
21,232 |
|
|
$ |
5,235 |
|
|
$ |
307 |
|
|
$ |
191 |
|
|
$ |
166 |
|
|
$ |
27,131 |
|
Non-PCI loans and leases receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance |
$ |
3,268,698 |
|
|
$ |
300,084 |
|
|
$ |
243,294 |
|
|
$ |
22,830 |
|
|
$ |
— |
|
|
$ |
3,834,906 |
|
Ending balance: individually evaluated for impairment |
$ |
21,757 |
|
|
$ |
4,174 |
|
|
$ |
— |
|
|
$ |
419 |
|
|
$ |
— |
|
|
$ |
26,350 |
|
Ending balance: collectively evaluated for impairment |
$ |
3,246,941 |
|
|
$ |
295,910 |
|
|
$ |
243,294 |
|
|
$ |
22,411 |
|
|
$ |
— |
|
|
$ |
3,808,556 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance for loan losses on PCI loans: |
|
|
|
|
|
|
|
|
|
|
|
Beginning balance |
$ |
5,397 |
|
|
$ |
42 |
|
|
$ |
— |
|
|
$ |
2 |
|
|
$ |
— |
|
|
$ |
5,441 |
|
Charge-offs |
(5,133 |
) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,133 |
) |
Provision |
658 |
|
|
(1 |
) |
|
— |
|
|
6 |
|
|
— |
|
|
663 |
|
Ending balance |
$ |
922 |
|
|
$ |
41 |
|
|
$ |
— |
|
|
$ |
8 |
|
|
$ |
— |
|
|
$ |
971 |
|
PCI loans receivable: |
|
|
|
|
|
|
|
|
|
|
|
Ending balance: acquired with deteriorated credit quality |
$ |
9,677 |
|
|
$ |
136 |
|
|
$ |
— |
|
|
$ |
50 |
|
|
$ |
— |
|
|
$ |
9,863 |
|
Loan Quality Indicators
As part of the on-going monitoring of the 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 and every loan or lease in our loan and lease portfolio. A third-party loan review is required on an annual basis. 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 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 consists of all performing loans and lease with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.
Special Mention: A Special Mention loan or lease, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment 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 loan or lease, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan or lease 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 loan or lease, 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 loan or lease, 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 their continuance as active bank assets 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 will be charged off in a timely manner.
As of December 31, 2017 and 2016, pass/pass-watch, special mention and classified (substandard and doubtful) loans and leases (excluding PCI loans), disaggregated by loan class, were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pass/Pass-Watch |
|
Special Mention |
|
Classified |
|
Total |
|
(In thousands) |
December 31, 2017 |
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
Retail |
$ |
909,462 |
|
|
$ |
454 |
|
|
$ |
3,712 |
|
|
$ |
913,628 |
|
Hotel/motel |
667,085 |
|
|
4,880 |
|
|
7,718 |
|
|
679,683 |
|
Other |
1,397,657 |
|
|
10,813 |
|
|
5,382 |
|
|
1,413,852 |
|
Construction |
55,190 |
|
|
— |
|
|
— |
|
|
55,190 |
|
Residential property |
520,310 |
|
|
305 |
|
|
287 |
|
|
520,902 |
|
Total real estate loans |
3,549,704 |
|
|
16,452 |
|
|
17,099 |
|
|
3,583,255 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
Commercial term |
179,835 |
|
|
439 |
|
|
2,362 |
|
|
182,636 |
|
Commercial lines of credit |
181,462 |
|
|
250 |
|
|
182 |
|
|
181,894 |
|
International loans |
34,622 |
|
|
— |
|
|
— |
|
|
34,622 |
|
Leases receivable |
292,832 |
|
|
— |
|
|
4,452 |
|
|
297,284 |
|
Consumer loans |
15,995 |
|
|
— |
|
|
1,024 |
|
|
17,019 |
|
Total |
$ |
4,254,450 |
|
|
$ |
17,141 |
|
|
$ |
25,119 |
|
|
$ |
4,296,710 |
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
Retail |
$ |
851,147 |
|
|
$ |
2,275 |
|
|
$ |
4,207 |
|
|
$ |
857,629 |
|
Hotel/motel |
634,397 |
|
|
5,497 |
|
|
9,646 |
|
|
649,540 |
|
Other |
1,352,193 |
|
|
3,556 |
|
|
12,027 |
|
|
1,367,776 |
|
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 |
|
Leases receivable |
242,393 |
|
|
— |
|
|
901 |
|
|
243,294 |
|
Consumer loans |
22,139 |
|
|
— |
|
|
691 |
|
|
22,830 |
|
Total |
$ |
3,788,374 |
|
|
$ |
16,267 |
|
|
$ |
30,265 |
|
|
$ |
3,834,906 |
|
The following is an aging analysis of gross 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 |
|
Accruing 90
Days or More
Past Due
|
|
(In thousands) |
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
96 |
|
|
$ |
15 |
|
|
$ |
196 |
|
|
$ |
307 |
|
|
$ |
913,321 |
|
|
$ |
913,628 |
|
|
$ |
— |
|
Hotel/motel |
3,421 |
|
|
— |
|
|
398 |
|
|
3,819 |
|
|
675,864 |
|
|
679,683 |
|
|
— |
|
Other |
1,245 |
|
|
1,333 |
|
|
467 |
|
|
3,045 |
|
|
1,410,807 |
|
|
1,413,852 |
|
|
— |
|
Construction |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
55,190 |
|
|
55,190 |
|
|
— |
|
Residential property |
609 |
|
|
— |
|
|
— |
|
|
609 |
|
|
520,293 |
|
|
520,902 |
|
|
— |
|
Total real estate loans |
5,371 |
|
|
1,348 |
|
|
1,061 |
|
|
7,780 |
|
|
3,575,475 |
|
|
3,583,255 |
|
|
— |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
425 |
|
|
567 |
|
|
829 |
|
|
1,821 |
|
|
180,815 |
|
|
182,636 |
|
|
— |
|
Commercial lines of credit |
250 |
|
|
— |
|
|
182 |
|
|
432 |
|
|
181,462 |
|
|
181,894 |
|
|
— |
|
International loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
34,622 |
|
|
34,622 |
|
|
— |
|
Leases receivable |
2,295 |
|
|
944 |
|
|
3,554 |
|
|
6,793 |
|
|
290,491 |
|
|
297,284 |
|
|
|
Consumer loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
17,019 |
|
|
17,019 |
|
|
— |
|
Total |
$ |
8,341 |
|
|
$ |
2,859 |
|
|
$ |
5,626 |
|
|
$ |
16,826 |
|
|
$ |
4,279,884 |
|
|
$ |
4,296,710 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
9 |
|
|
$ |
137 |
|
|
$ |
234 |
|
|
$ |
380 |
|
|
$ |
857,249 |
|
|
$ |
857,629 |
|
|
$ |
— |
|
Hotel/motel |
1,037 |
|
|
46 |
|
|
600 |
|
|
1,683 |
|
|
647,857 |
|
|
649,540 |
|
|
— |
|
Other |
677 |
|
|
722 |
|
|
1,237 |
|
|
2,636 |
|
|
1,365,140 |
|
|
1,367,776 |
|
|
— |
|
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 |
|
|
— |
|
Leases receivable |
2,090 |
|
|
1,043 |
|
|
385 |
|
|
3,518 |
|
|
239,776 |
|
|
243,294 |
|
|
|
Consumer loans |
170 |
|
|
— |
|
|
— |
|
|
170 |
|
|
22,660 |
|
|
22,830 |
|
|
— |
|
Total |
$ |
5,277 |
|
|
$ |
2,079 |
|
|
$ |
2,990 |
|
|
$ |
10,346 |
|
|
$ |
3,824,560 |
|
|
$ |
3,834,906 |
|
|
$ |
— |
|
Impaired Loans
Loans are considered impaired when: nonaccrual and principal or interest payments have been contractually past due for 90 days or more, unless the loan is both well-collateralized and in the process of collection; they are classified as TDR loans to offer terms not typically granted by the Bank; when current information or events make it unlikely to collect in full according to the contractual terms of the loan agreements; 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 impairment in accordance with GAAP. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as a practical expedient, at the loan’s observable market price or the fair value of the collateral if the loan is collateral dependent, less costs to sell. If the measure of the impaired loan is less than the recorded investment in the loan, the deficiency will be charged off against the allowance for loan losses or, alternatively, a specific allocation will be established. Additionally, loans that are considered impaired are specifically excluded from the quarterly migration analysis when determining the amount of the allowance for loan 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 table provides information on impaired loans (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 |
|
Average
Recorded
Investment |
|
Interest
Income
Recognized |
|
|
|
|
|
(In thousands) |
|
|
|
|
|
|
As of or for The Year Ended December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
1,403 |
|
|
$ |
1,423 |
|
|
$ |
1,246 |
|
|
$ |
157 |
|
|
$ |
1 |
|
|
$ |
1,528 |
|
|
$ |
106 |
|
Hotel/motel |
6,184 |
|
|
7,220 |
|
|
2,144 |
|
|
4,040 |
|
|
1,677 |
|
|
6,080 |
|
|
431 |
|
Other |
8,513 |
|
|
9,330 |
|
|
7,569 |
|
|
944 |
|
|
394 |
|
|
9,551 |
|
|
842 |
|
Residential property |
2,563 |
|
|
2,728 |
|
|
824 |
|
|
1,739 |
|
|
21 |
|
|
2,771 |
|
|
122 |
|
Total real estate loans |
18,663 |
|
|
20,701 |
|
|
11,783 |
|
|
6,880 |
|
|
2,093 |
|
|
19,930 |
|
|
1,501 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
2,857 |
|
|
2,899 |
|
|
886 |
|
|
1,971 |
|
|
441 |
|
|
3,529 |
|
|
192 |
|
Commercial lines of credit |
182 |
|
|
182 |
|
|
182 |
|
|
— |
|
|
— |
|
|
685 |
|
|
16 |
|
International loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Leases receivable |
4,452 |
|
|
4,626 |
|
|
455 |
|
|
3,997 |
|
|
3,334 |
|
|
4,464 |
|
|
47 |
|
Consumer loans |
1,029 |
|
|
1,215 |
|
|
919 |
|
|
110 |
|
|
10 |
|
|
982 |
|
|
33 |
|
Total |
$ |
27,183 |
|
|
$ |
29,623 |
|
|
$ |
14,225 |
|
|
$ |
12,958 |
|
|
$ |
5,878 |
|
|
$ |
29,590 |
|
|
$ |
1,789 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for The Year Ended December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
1,678 |
|
|
$ |
1,684 |
|
|
$ |
151 |
|
|
$ |
1,527 |
|
|
$ |
120 |
|
|
$ |
2,243 |
|
|
$ |
141 |
|
Hotel/motel |
6,227 |
|
|
6,823 |
|
|
2,243 |
|
|
3,984 |
|
|
3,078 |
|
|
4,887 |
|
|
454 |
|
Other |
11,054 |
|
|
11,900 |
|
|
8,111 |
|
|
2,943 |
|
|
782 |
|
|
11,935 |
|
|
1,326 |
|
Residential property |
2,798 |
|
|
2,851 |
|
|
2,798 |
|
|
— |
|
|
— |
|
|
2,656 |
|
|
112 |
|
Total real estate loans |
21,757 |
|
|
23,258 |
|
|
13,303 |
|
|
8,454 |
|
|
3,980 |
|
|
21,721 |
|
|
2,033 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
4,106 |
|
|
4,171 |
|
|
1,229 |
|
|
2,877 |
|
|
347 |
|
|
4,815 |
|
|
307 |
|
Commercial lines of credit |
68 |
|
|
68 |
|
|
68 |
|
|
— |
|
|
— |
|
|
45 |
|
|
14 |
|
International loans |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
315 |
|
|
— |
|
Consumer loans |
419 |
|
|
489 |
|
|
419 |
|
|
— |
|
|
— |
|
|
622 |
|
|
29 |
|
Total |
$ |
26,350 |
|
|
$ |
27,986 |
|
|
$ |
15,019 |
|
|
$ |
11,331 |
|
|
$ |
4,327 |
|
|
$ |
27,518 |
|
|
$ |
2,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of or for The Year Ended December 31, 2015 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
2,597 |
|
|
$ |
2,892 |
|
|
$ |
2,435 |
|
|
$ |
162 |
|
|
$ |
27 |
|
|
$ |
3,878 |
|
|
$ |
277 |
|
Hotel/motel |
7,168 |
|
|
7,538 |
|
|
2,873 |
|
|
4,295 |
|
|
3,068 |
|
|
6,628 |
|
|
572 |
|
Other |
14,681 |
|
|
16,625 |
|
|
11,619 |
|
|
3,062 |
|
|
759 |
|
|
17,334 |
|
|
1,231 |
|
Residential property |
2,895 |
|
|
3,081 |
|
|
2,608 |
|
|
287 |
|
|
4 |
|
|
2,839 |
|
|
120 |
|
Total real estate loans |
27,341 |
|
|
30,136 |
|
|
19,535 |
|
|
7,806 |
|
|
3,858 |
|
|
30,679 |
|
|
2,200 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
5,257 |
|
|
5,621 |
|
|
1,858 |
|
|
3,399 |
|
|
457 |
|
|
6,637 |
|
|
368 |
|
Commercial lines of credit |
381 |
|
|
493 |
|
|
280 |
|
|
101 |
|
|
100 |
|
|
1,515 |
|
|
42 |
|
International loans |
1,215 |
|
|
1,215 |
|
|
647 |
|
|
568 |
|
|
30 |
|
|
1,257 |
|
|
— |
|
Consumer loans |
1,665 |
|
|
1,898 |
|
|
1,665 |
|
|
— |
|
|
— |
|
|
1,753 |
|
|
73 |
|
Total |
$ |
35,859 |
|
|
$ |
39,363 |
|
|
$ |
23,985 |
|
|
$ |
11,874 |
|
|
$ |
4,445 |
|
|
$ |
41,841 |
|
|
$ |
2,683 |
|
The following is a summary of interest foregone on impaired loans (excluding PCI loans) for the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
2017 |
|
2016 |
|
2015 |
|
(In thousands) |
Interest income that would have been recognized had impaired loans performed in accordance with their original terms |
$ |
2,575 |
|
|
$ |
3,053 |
|
|
$ |
4,168 |
|
Less: Interest income recognized on impaired loans |
(1,790 |
) |
|
(2,383 |
) |
|
(2,683 |
) |
Interest foregone on impaired loans |
$ |
785 |
|
|
$ |
670 |
|
|
$ |
1,485 |
|
There were no commitments to lend additional funds to borrowers whose loans are included above.
Nonaccrual Loans and Leases
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 loan is adequately collateralized and in the process of collection. However, in certain instances, we may place a particular loan or lease on nonaccrual status earlier, depending upon the individual circumstances surrounding the loan or lease’s delinquency. When a loan or lease 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:
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
2017 |
|
2016 |
|
(In thousands) |
Real estate loans: |
|
|
|
Commercial property |
|
|
|
Retail |
$ |
224 |
|
|
$ |
404 |
|
Hotel/motel |
5,263 |
|
|
5,266 |
|
Other |
2,462 |
|
|
3,058 |
|
Residential property |
591 |
|
|
564 |
|
Total real estate loans |
8,540 |
|
|
9,292 |
|
Commercial and industrial loans: |
|
|
|
Commercial term |
1,710 |
|
|
824 |
|
Commercial lines of credit |
182 |
|
|
— |
|
Leases receivable |
4,452 |
|
|
901 |
|
Consumer loans |
921 |
|
|
389 |
|
Total nonaccrual loans and leases |
$ |
15,805 |
|
|
$ |
11,406 |
|
The following table details nonperforming assets (excluding PCI loans) as of the dates indicated:
|
|
|
|
|
|
|
|
|
|
As of December 31, |
|
2017 |
|
2016 |
|
(In thousands) |
Nonaccrual loans and leases |
$ |
15,805 |
|
|
$ |
11,406 |
|
Loans and leases 90 days or more past due and still accruing |
— |
|
|
— |
|
Total nonperforming loans and leases |
15,805 |
|
|
11,406 |
|
Other real estate owned |
1,946 |
|
|
7,484 |
|
Total nonperforming assets |
$ |
17,751 |
|
|
$ |
18,890 |
|
As of December 31, 2017, OREO consisted of six properties with a combined carrying value of $1.9 million, including $1.8 million of OREO properties acquired in the CBI acquisition or obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date. As of December 31, 2016, OREO consisted of twelve properties with a combined carrying value of $7.5 million, including a $5.7 million of OREO properties acquired in the CBI acquisition or obtained as a result of PCI loan collateral foreclosures subsequent to the acquisition date.
Troubled Debt Restructuring
The following table details TDRs (excluding PCI loans), disaggregated by concession type and by loan type, as of December 31, 2017, 2016 and 2015:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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) |
December 31, 2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
1,188 |
|
|
$ |
— |
|
|
$ |
1,188 |
|
Hotel/motel |
1,156 |
|
|
3,495 |
|
|
— |
|
|
— |
|
|
4,651 |
|
|
— |
|
|
— |
|
|
169 |
|
|
— |
|
|
169 |
|
Other |
779 |
|
|
266 |
|
|
64 |
|
|
— |
|
|
1,109 |
|
|
2,777 |
|
|
— |
|
|
30 |
|
|
959 |
|
|
3,766 |
|
Residential property |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
632 |
|
|
— |
|
|
— |
|
|
278 |
|
|
910 |
|
Total real estate loans |
1,935 |
|
|
3,761 |
|
|
64 |
|
|
— |
|
|
5,760 |
|
|
3,409 |
|
|
— |
|
|
1,387 |
|
|
1,237 |
|
|
6,033 |
|
Commercial and industrial loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial term |
131 |
|
|
123 |
|
|
1,173 |
|
|
102 |
|
|
1,529 |
|
|
6 |
|
|
182 |
|
|
503 |
|
|
427 |
|
|
1,118 |
|
Consumer loans |
811 |
|
|
— |
|
|
— |
|
|
— |
|
|
811 |
|
|
— |
|
|
— |
|
|
108 |
|
|
— |
|
|
108 |
|
Total |
$ |
2,877 |
|
|
$ |
3,884 |
|
|
$ |
1,237 |
|
|
$ |
102 |
|
|
$ |
8,100 |
|
|
$ |
3,415 |
|
|
$ |
182 |
|
|
$ |
1,998 |
|
|
$ |
1,664 |
|
|
$ |
7,259 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate loans: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Commercial property |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Retail |
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
| |