Quarterly report pursuant to Section 13 or 15(d)

Loans

v3.20.2
Loans
6 Months Ended
Jun. 30, 2020
Receivables [Abstract]  
Loans

Note 3 — Loans

Loans Receivable

Loans consisted of the following as of the dates indicated:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

(in thousands)

 

Real estate loans:

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

Retail

 

$

808,157

 

 

$

869,302

 

Hospitality

 

 

882,812

 

 

 

922,288

 

Other (1)

 

 

1,504,916

 

 

 

1,358,432

 

Total commercial property loans

 

 

3,195,885

 

 

 

3,150,022

 

Construction

 

 

70,357

 

 

 

76,455

 

Residential property

 

 

354,064

 

 

 

402,028

 

Total real estate loans

 

 

3,620,306

 

 

 

3,628,505

 

Commercial and industrial loans

 

 

730,399

 

 

 

484,093

 

Leases receivable

 

 

462,811

 

 

 

483,879

 

Consumer loans (2)

 

 

12,126

 

 

 

13,670

 

Loans receivable

 

 

4,825,642

 

 

 

4,610,147

 

Allowance for credit losses

 

 

(86,330

)

 

 

(61,408

)

Loans receivable, net

 

$

4,739,312

 

 

$

4,548,739

 

 

(1)

Includes, among other types, mixed-use, apartment, office, industrial, gas stations, faith-based facilities and warehouse; all other property types represent less than one percent of total loans receivable.

(2)

Consumer loans include home equity lines of credit of $7.6 million and $8.2 million as of June 30, 2020 and December 31, 2019, respectively.

 

The CARES Act (the Coronavirus Aid, Relief, and Economic Security Act) was passed by Congress and signed into law by President Trump on March 27, 2020. Among other benefits, the CARES Act allows financial institutions to assist customers in dealing with financial hardship by (a) providing federal funding so that financial institutions can originate SBA loans to borrowers at a low interest rate under the Paycheck Protection Program (PPP loans) with eventual debt forgiveness should the borrower continue to meet certain criteria after the COVID-19 crisis has abated; and (b) allowing financial institutions to temporarily modify loan terms by deferring loan payments, loan fees, etc. on a short-term basis without considering them Troubled Debt Restructures.

At June 30, 2020, there were $301.8 million of PPP loans included in commercial and industrial loans in the table above.  In addition, at June 30, 2020, there were $1.4 billion of loans modified under Section 4013 of the CARES Act.

Accrued interest on loans was $20.3 million and $10.0 million at June 30, 2020 and December 31, 2019, respectively. At June 30, 2020 and December 31, 2019, loans of $2.4 billion and $1.4 billion, respectively, were pledged to secure advances 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, 2020 and 2019:

 

 

 

Real Estate

 

 

Commercial and

Industrial

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

 

 

$

 

 

$

 

Originations and transfers

 

 

12,661

 

 

 

5,281

 

 

 

17,942

 

Balance at end of period

 

$

12,661

 

 

$

5,281

 

 

$

17,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

6,500

 

 

$

640

 

 

$

7,140

 

Originations

 

 

6,650

 

 

 

7,650

 

 

 

14,300

 

Sales

 

 

(10,474

)

 

 

(4,937

)

 

 

(15,411

)

Balance at end of period

 

$

2,676

 

 

$

3,353

 

 

$

6,029

 

The following is the activity for SBA loans held for sale for the six months ended June 30, 2020 and 2019:

 

 

 

Real Estate

 

 

Commercial and Industrial

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

2,943

 

 

$

3,077

 

 

$

6,020

 

Originations and transfers

 

 

19,155

 

 

 

10,984

 

 

 

30,139

 

Sales

 

 

(9,432

)

 

 

(8,780

)

 

 

(18,212

)

Principal payoffs and amortization

 

 

(5

)

 

 

 

 

 

(5

)

Balance at end of period

 

$

12,661

 

 

$

5,281

 

 

$

17,942

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

5,194

 

 

$

4,196

 

 

$

9,390

 

Originations

 

 

15,713

 

 

 

11,810

 

 

 

27,523

 

Sales

 

 

(18,229

)

 

 

(12,641

)

 

 

(30,870

)

Principal payoffs and amortization

 

 

(2

)

 

 

(12

)

 

 

(14

)

Balance at end of period

 

$

2,676

 

 

$

3,353

 

 

$

6,029

 

 

Allowance for Credit Losses

 

The Company’s estimate of the allowance for credit losses at June 30, 2020 reflects losses expected over the remaining contractual life of the assets. The contractual term does not consider extensions, renewals or modifications unless the Company has identified an expected troubled debt restructuring.

 

At June 30, 2020, the Company used the discounted cash flow (DCF) method to estimate allowances for credit losses for the commercial and industrial loan portfolio and the consumer loan portfolio. For all loan pools utilizing the DCF method, the Company utilizes and forecasts the national unemployment rate as the primary loss driver.  In addition, the Company determined that four-quarters represented a reasonable and supportable forecast period and reverted to a historical loss rate over twelve quarters on a straight-line basis. As of and for the quarter ended June 30, 2020, the Company leveraged the economic projections from Moody’s Analytics Economic Scenarios and Forecasts to inform its loss driver forecasts over the four-quarter forecast period. For each of these loan segments, the Company applied an annualized historical Probability of Default/Loss Given Default (PD/LGD) using all available historical periods.  The reason for the change from relying on the FRED economic data to Moody’s data was because Moody’s data is updated more frequently and timely than FOMC or FRED, and thus provides a better forecast for PD/LGD models. Since reasonable and supportable forecasts of economic conditions are imbedded directly to DCF model, qualitative adjustments are reduced but considered. Qualitative adjustments were based on the Company's judgment of company, market, industry or business specific data, changes in the underlying loan composition of specific portfolios.

 

Management determined that, due to model limitations, the regression model that supports the DCF calculation for the SBA and commercial property, construction, and residential real estate portfolios does not take into account the volatile nature of

COVID-19 on these portfolios, as well as the government assistance programs based on the maturities. As a result, at June 30, 2020, the Company utilized the Probability of Default/Loss Given Default (PD/LGD) method for the SBA and commercial property, construction, and residential real estate portfolios. The Company previously applied the DCF method to the real estate secured portfolios in the implementation of CECL at January 1, 2020 and through March 31, 2020 and determined that the change from DCF to PD/LGD was not material.  See Note 1 – Organization and Basis of Presentation for a further description of the methodologies applied at the inception of CECL and during the three months ended March 31, 2020.  The Company used historical periods that included an economic downturn to derive historical losses for better alignment in the estimation of expected losses. The Company leveraged Frye-Jacobs modeled LGD rates for loan segments with no historical losses.  In addition, for those loans granted a loan modification due to COVID-19, the Company used historical periods under PD/LGD as of March 31, 2020 to reflect the moratorium on TDRs under Section 4013 of the CARES Act. The PD/LGD method incorporates a forecast into loss estimates using a qualitative adjustment. Qualitative loss factors were based on the Company's judgment of company, market, industry or business specific data, changes in the underlying loan composition of specific portfolios, trends relating to credit quality, delinquency, nonperforming and adversely rated loans, and reasonable and supportable forecasts of economic conditions.

 

The Company used a Weighted Average Remaining Maturity (WARM) method to estimate expected credit losses for equipment financing agreements or the equipment lease receivables portfolio. The Company applied an expected loss ratio based on internal historical losses adjusted as appropriate for qualitative factors. The Company's evaluation of market, industry or business specific data, changes in the underlying portfolio composition, trends relating to credit quality, delinquency, nonperforming and adversely rated leases, and reasonable and supportable forecasts of economic conditions inform the estimate of qualitative factors.

 

Management believes the allowance for credit losses is appropriate to provide for estimated losses inherent in the loans receivable portfolio. However, the allowance is an estimate that is inherently uncertain and depends on the outcome of future events. Management’s methodologies for determining such estimates consists of measuring expected credit losses of financial assets on a collective (pool) basis when similar risk characteristic(s) exist. The Bank segments the loans primarily by loan types, considering that the same type of loans share considerable similar risk characteristics, including the collateral type, loan purpose, contract term, amortization and payment structure. Our lending is concentrated generally in real estate loans, commercial loans and leases and SBA loans to small and middle market businesses primarily in California, Texas, Illinois and New York. Further, our regulators, in reviewing our loans receivable portfolio may require us to increase our allowance for credit losses.

The following table details the information on the allowance for credit losses by portfolio segment as of and for the three months ended June 30, 2020 and 2019:

 

 

 

Real Estate

 

 

Commercial and

Industrial

 

 

Leases

Receivable

 

 

Consumer

 

 

Unallocated

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

38,983

 

 

$

11,588

 

 

$

15,780

 

 

$

149

 

 

$

 

 

 

66,500

 

Less loans charged off

 

 

91

 

 

 

438

 

 

 

1,044

 

 

 

 

 

 

 

 

 

1,573

 

Recoveries on loans receivable previously charged off

 

 

(98

)

 

 

(60

)

 

 

(114

)

 

 

 

 

 

 

 

 

(272

)

Provision for credit losses

 

 

17,226

 

 

 

2,178

 

 

 

1,674

 

 

 

53

 

 

 

 

 

 

21,131

 

Ending balance

 

$

56,216

 

 

$

13,388

 

 

$

16,524

 

 

$

202

 

 

$

 

 

$

86,330

 

Individually evaluated for impairment

 

$

2,807

 

 

$

123

 

 

$

2,262

 

 

$

2

 

 

$

 

 

$

5,194

 

Collectively evaluated for impairment

 

$

53,409

 

 

$

13,265

 

 

$

14,262

 

 

$

200

 

 

$

 

 

$

81,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

 

$

3,620,306

 

 

$

730,399

 

 

$

462,811

 

 

$

12,126

 

 

$

 

 

$

4,825,642

 

Individually evaluated for impairment

 

$

48,302

 

 

$

13,771

 

 

$

8,456

 

 

$

1,280

 

 

$

 

 

$

71,809

 

Collectively evaluated for impairment

 

$

3,572,004

 

 

$

716,628

 

 

$

454,355

 

 

$

10,846

 

 

$

 

 

$

4,753,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

18,306

 

 

$

8,711

 

 

$

5,580

 

 

$

89

 

 

$

210

 

 

$

32,896

 

Less loans charged off

 

 

 

 

 

562

 

 

 

974

 

 

 

 

 

 

 

 

 

1,536

 

Recoveries on loans receivable previously charged off

 

 

(1,133

)

 

 

(89

)

 

 

(105

)

 

 

 

 

 

 

 

 

(1,327

)

Provision for credit losses

 

 

14,565

 

 

 

997

 

 

 

1,357

 

 

 

(10

)

 

 

(210

)

 

 

16,699

 

Ending balance

 

$

34,004

 

 

$

9,235

 

 

$

6,068

 

 

$

79

 

 

$

 

 

$

49,386

 

Individually evaluated for impairment

 

$

14,724

 

 

$

3,072

 

 

$

662

 

 

$

1

 

 

$

 

 

$

18,459

 

Collectively evaluated for impairment

 

$

19,280

 

 

$

6,163

 

 

$

5,406

 

 

$

78

 

 

$

 

 

$

30,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

 

$

3,671,463

 

 

$

409,502

 

 

$

460,519

 

 

$

14,318

 

 

$

 

 

$

4,555,802

 

Individually evaluated for impairment

 

$

39,885

 

 

$

21,706

 

 

$

3,233

 

 

$

1,351

 

 

$

 

 

$

66,175

 

Collectively evaluated for impairment

 

$

3,631,578

 

 

$

387,796

 

 

$

457,286

 

 

$

12,967

 

 

$

 

 

$

4,489,627

 

 

The following table details the information on the allowance for credit losses by portfolio segment as of and for the six months ended June 30, 2020 and 2019:

 

 

 

Real Estate

 

 

Commercial and Industrial

 

 

Leases Receivable

 

 

Consumer

 

 

Unallocated

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

36,355

 

 

$

16,206

 

 

$

8,767

 

 

$

80

 

 

$

 

 

$

61,408

 

Adjustment related to adoption of ASU 2016-13

 

 

13,972

 

 

 

(2,497

)

 

 

5,902

 

 

 

56

 

 

 

 

 

 

17,433

 

Adjusted balance as of January 1, 2020

 

 

50,327

 

 

 

13,709

 

 

 

14,669

 

 

 

136

 

 

 

 

 

 

78,841

 

Less loans charged off

 

 

14,233

 

 

 

12,589

 

 

 

2,224

 

 

 

 

 

 

 

 

 

29,046

 

Recoveries on loans receivable previously charged off

 

 

(156

)

 

 

(144

)

 

 

(188

)

 

 

 

 

 

 

 

 

(488

)

Provision for credit losses

 

 

19,966

 

 

 

12,124

 

 

 

3,891

 

 

 

66

 

 

 

 

 

 

36,047

 

Ending balance

 

$

56,216

 

 

$

13,388

 

 

$

16,524

 

 

$

202

 

 

$

 

 

$

86,330

 

Individually evaluated for impairment

 

$

2,807

 

 

$

123

 

 

$

2,262

 

 

$

2

 

 

$

 

 

$

5,194

 

Collectively evaluated for impairment

 

$

53,409

 

 

$

13,265

 

 

$

14,262

 

 

$

200

 

 

$

 

 

$

81,136

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

 

$

3,620,306

 

 

$

730,399

 

 

$

462,811

 

 

$

12,126

 

 

$

 

 

$

4,825,642

 

Individually evaluated for impairment

 

$

48,302

 

 

$

13,771

 

 

$

8,456

 

 

$

1,280

 

 

$

 

 

$

71,809

 

Collectively evaluated for impairment

 

$

3,572,004

 

 

$

716,628

 

 

$

454,355

 

 

$

10,846

 

 

$

 

 

$

4,753,833

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance at beginning of period

 

$

18,384

 

 

$

7,162

 

 

$

6,303

 

 

$

98

 

 

$

27

 

 

$

31,974

 

Less loans charged off

 

 

113

 

 

 

695

 

 

 

1,826

 

 

 

 

 

 

 

 

 

2,634

 

Recoveries on loans receivable previously charged off

 

 

(1,563

)

 

 

(471

)

 

 

(196

)

 

 

 

 

 

 

 

 

(2,230

)

Provision for credit losses

 

 

14,170

 

 

 

2,297

 

 

 

1,395

 

 

 

(19

)

 

 

(27

)

 

 

17,816

 

Ending balance

 

$

34,004

 

 

$

9,235

 

 

$

6,068

 

 

$

79

 

 

$

 

 

$

49,386

 

Individually evaluated for impairment

 

$

14,724

 

 

$

3,072

 

 

$

662

 

 

$

1

 

 

$

 

 

$

18,459

 

Collectively evaluated for impairment

 

$

19,280

 

 

$

6,163

 

 

$

5,406

 

 

$

78

 

 

$

 

 

$

30,927

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loans receivable

 

$

3,671,463

 

 

$

409,502

 

 

$

460,519

 

 

$

14,318

 

 

$

 

 

$

4,555,802

 

Individually evaluated for impairment

 

$

39,885

 

 

$

21,706

 

 

$

3,233

 

 

$

1,351

 

 

$

 

 

$

66,175

 

Collectively evaluated for impairment

 

$

3,631,578

 

 

$

387,796

 

 

$

457,286

 

 

$

12,967

 

 

$

 

 

$

4,489,627

 

 

The table below illustrates the allowance for credit losses by portfolio segment as a percentage of the recorded total allowance for credit losses and as a percentage of the aggregate recorded investment of loans receivable.

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Allowance

 

 

 

 

 

 

Total

 

 

 

 

 

 

Allowance

 

 

 

 

 

 

Total

 

 

 

 

 

 

 

Amount

 

 

Percentage

 

 

Loans

 

 

Percentage

 

 

Amount

 

 

Percentage

 

 

Loans

 

 

Percentage

 

 

 

(in thousands)

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

7,341

 

 

 

8.5

%

 

$

808,157

 

 

 

16.7

%

 

$

4,911

 

 

 

8.0

%

 

$

869,302

 

 

 

18.9

%

Hospitality

 

 

11,984

 

 

 

13.9

%

 

 

882,812

 

 

 

18.3

%

 

 

6,686

 

 

 

10.9

%

 

 

922,288

 

 

 

20.0

%

Other

 

 

24,920

 

 

 

28.9

%

 

 

1,504,916

 

 

 

31.2

%

 

 

8,060

 

 

 

13.1

%

 

 

1,358,432

 

 

 

29.4

%

Total commercial property loans

 

 

44,245

 

 

 

51.3

%

 

 

3,195,885

 

 

 

66.2

%

 

 

19,657

 

 

 

32.0

%

 

 

3,150,022

 

 

 

68.3

%

Construction

 

 

9,331

 

 

 

10.8

%

 

 

70,357

 

 

 

1.5

%

 

 

15,003

 

 

 

24.4

%

 

 

76,455

 

 

 

1.7

%

Residential property

 

 

2,640

 

 

 

3.1

%

 

 

354,064

 

 

 

7.3

%

 

 

1,695

 

 

 

2.8

%

 

 

402,028

 

 

 

8.7

%

Total real estate loans

 

 

56,216

 

 

 

65.2

%

 

 

3,620,306

 

 

 

75.0

%

 

 

36,355

 

 

 

59.2

%

 

 

3,628,505

 

 

 

78.7

%

Commercial and industrial loans

 

 

13,387

 

 

 

15.5

%

 

 

730,399

 

 

 

15.1

%

 

 

16,206

 

 

 

26.4

%

 

 

484,093

 

 

 

10.5

%

Leases receivable

 

 

16,525

 

 

 

19.1

%

 

 

462,811

 

 

 

9.6

%

 

 

8,767

 

 

 

14.3

%

 

 

483,879

 

 

 

10.5

%

Consumer loans

 

 

202

 

 

 

0.2

%

 

 

12,126

 

 

 

0.3

%

 

 

80

 

 

 

0.1

%

 

 

13,670

 

 

 

0.3

%

Total

 

$

86,330

 

 

 

100.0

%

 

$

4,825,642

 

 

 

100.0

%

 

$

61,408

 

 

 

100.0

%

 

$

4,610,147

 

 

 

100.0

%

 

The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of June 30, 2020, for which repayment is expected to be obtained through the sale of the underlying collateral and any collateral dependent loans that are still accruing but are considered impaired.

 

 

 

Amortized Cost

 

June 30, 2020

 

(in thousands)

 

Real estate loans:

 

 

 

 

Commercial property

 

$

16,796

 

Construction

 

 

25,854

 

Residential property

 

 

2,761

 

Total real estate loans

 

 

45,411

 

Commercial and industrial loans

 

 

288

 

Consumer Loans

 

 

1,208

 

Total (1)

 

$

46,907

 

 

 

(1)

All loans are secured by real estate, except for one commercial term loan secured by $264,000 in cash.

 

Loan Quality Indicators

As part of the on-going monitoring of the quality of our loans portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade (from 0 to 8) for each loan in our portfolio. A third-party loan review is performed at least on an annual basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows:

Pass and Pass-Watch: Pass and Pass-Watch loans, 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 grading system. It consists of all performing loans with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans.

Special Mention: A Special Mention loan, 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 that have significant actual, not potential, weaknesses are considered more severely classified.

Substandard: A Substandard loan, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan 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, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected.

Doubtful: A Doubtful loan, 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, and therefore the amount or timing of a possible loss cannot be determined at the current time.

Loss: A loan 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 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 classified as Loss will be charged off in a timely manner.

Under regulatory guidance, loans graded special mention or worse are considered criticized loans, and loans graded substandard or worse are considered classified loans.

The tables below provide a comparison as of June 30, 2020 and December 31, 2019 of the pass/pass-watch, special mention and classified loans, disaggregated by loan segment:

 

 

 

Pass/Pass-

Watch

 

 

Special

Mention

 

 

Classified

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

800,437

 

 

$

1,182

 

 

$

6,538

 

 

$

808,157

 

Hospitality

 

 

879,131

 

 

 

 

 

 

3,681

 

 

 

882,812

 

Other

 

 

1,469,272

 

 

 

6,059

 

 

 

29,585

 

 

 

1,504,916

 

Total commercial property

 

 

3,148,840

 

 

 

7,241

 

 

 

39,804

 

 

 

3,195,885

 

Construction

 

 

44,503

 

 

 

 

 

 

25,854

 

 

 

70,357

 

Residential property

 

 

350,520

 

 

 

784

 

 

 

2,760

 

 

 

354,064

 

Total real estate loans

 

 

3,543,863

 

 

 

8,025

 

 

 

68,418

 

 

 

3,620,306

 

Commercial and industrial loans

 

 

702,443

 

 

 

12,423

 

 

 

15,533

 

 

 

730,399

 

Leases receivable

 

 

453,528

 

 

 

 

 

 

9,283

 

 

 

462,811

 

Consumer loans

 

 

10,752

 

 

 

686

 

 

 

688

 

 

 

12,126

 

Total loans receivable

 

$

4,710,586

 

 

$

21,134

 

 

$

93,922

 

 

$

4,825,642

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

859,739

 

 

$

2,835

 

 

$

6,728

 

 

$

869,302

 

Hospitality

 

 

915,834

 

 

 

939

 

 

 

5,515

 

 

 

922,288

 

Other

 

 

1,329,817

 

 

 

7,807

 

 

 

20,809

 

 

 

1,358,432

 

Total commercial property

 

 

3,105,390

 

 

 

11,580

 

 

 

33,052

 

 

 

3,150,022

 

Construction

 

 

36,956

 

 

 

1,613

 

 

 

37,886

 

 

 

76,455

 

Residential property

 

 

398,737

 

 

 

2,512

 

 

 

779

 

 

 

402,028

 

Total real estate loans

 

 

3,541,082

 

 

 

15,705

 

 

 

71,718

 

 

 

3,628,505

 

Commercial and industrial loans

 

 

458,184

 

 

 

10,222

 

 

 

15,687

 

 

 

484,093

 

Leases receivable

 

 

477,977

 

 

 

 

 

 

5,902

 

 

 

483,879

 

Consumer loans

 

 

12,247

 

 

 

705

 

 

 

718

 

 

 

13,670

 

Total loans receivable

 

$

4,489,491

 

 

$

26,632

 

 

$

94,025

 

 

$

4,610,147

 

 

Loans by Vintage Year and Risk Rating

 

 

 

Term Loans

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost Basis by Origination Year (1)

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

 

Prior

 

 

Revolving

Loans

Amortized

Cost Basis

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

$

438,577

 

 

$

539,598

 

 

$

555,748

 

 

$

429,415

 

 

$

483,511

 

 

$

671,096

 

 

$

30,895

 

 

$

3,148,840

 

Special Mention

 

 

 

 

 

2,757

 

 

 

455

 

 

 

2,351

 

 

 

1,271

 

 

 

407

 

 

 

 

 

 

7,241

 

Classified

 

 

15,592

 

 

 

1,113

 

 

 

2,965

 

 

 

709

 

 

 

3,992

 

 

 

15,433

 

 

 

 

 

 

39,804

 

Total commercial property

 

 

454,169

 

 

 

543,468

 

 

 

559,168

 

 

 

432,475

 

 

 

488,774

 

 

 

686,936

 

 

 

30,895

 

 

 

3,195,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

18,025

 

 

 

5,633

 

 

 

 

 

 

 

 

 

20,845

 

 

 

 

 

 

 

 

 

44,503

 

Special Mention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified

 

 

 

 

 

12,808

 

 

 

13,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,854

 

Total construction

 

 

18,025

 

 

 

18,441

 

 

 

13,046

 

 

 

 

 

 

20,845

 

 

 

 

 

 

 

 

 

70,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

274

 

 

 

954

 

 

 

40,468

 

 

 

149,532

 

 

 

100,367

 

 

 

58,925

 

 

 

 

 

 

350,520

 

Special Mention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

784

 

 

 

 

 

 

784

 

Classified

 

 

 

 

 

 

 

 

 

 

 

1,890

 

 

 

754

 

 

 

116

 

 

 

 

 

 

2,760

 

Total residential property

 

 

274

 

 

 

954

 

 

 

40,468

 

 

 

151,422

 

 

 

101,121

 

 

 

59,825

 

 

 

 

 

 

354,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

456,876

 

 

 

546,185

 

 

 

596,216

 

 

 

578,947

 

 

 

604,723

 

 

 

730,021

 

 

 

30,895

 

 

 

3,543,863

 

Special Mention

 

 

 

 

 

2,757

 

 

 

455

 

 

 

2,351

 

 

 

1,271

 

 

 

1,191

 

 

 

 

 

 

8,025

 

Classified

 

 

15,592

 

 

 

13,921

 

 

 

16,011

 

 

 

2,599

 

 

 

4,746

 

 

 

15,549

 

 

 

 

 

 

68,418

 

Total real estate loans

 

 

472,468

 

 

 

562,863

 

 

 

612,682

 

 

 

583,897

 

 

 

610,740

 

 

 

746,761

 

 

 

30,895

 

 

 

3,620,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

369,101

 

 

 

124,141

 

 

 

60,742

 

 

 

21,613

 

 

 

5,586

 

 

 

14,952

 

 

 

106,308

 

 

 

702,443

 

Special Mention

 

 

4,281

 

 

 

800

 

 

 

503

 

 

 

78

 

 

 

1,733

 

 

 

1,585

 

 

 

3,443

 

 

 

12,423

 

Classified

 

 

8,969

 

 

 

3,894

 

 

 

568

 

 

 

148

 

 

 

140

 

 

 

1,614

 

 

 

200

 

 

 

15,533

 

Total commercial and industrial loans

 

 

382,351

 

 

 

128,835

 

 

 

61,813

 

 

 

21,839

 

 

 

7,459

 

 

 

18,151

 

 

 

109,951

 

 

 

730,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leases receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

67,994

 

 

 

203,034

 

 

 

119,213

 

 

 

44,150

 

 

 

18,292

 

 

 

845

 

 

 

 

 

 

453,528

 

Special Mention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Classified

 

 

11

 

 

 

3,554

 

 

 

2,807

 

 

 

1,191

 

 

 

1,299

 

 

 

421

 

 

 

 

 

 

9,283

 

Total leases receivable

 

 

68,005

 

 

 

206,588

 

 

 

122,020

 

 

 

45,341

 

 

 

19,591

 

 

 

1,266

 

 

 

 

 

 

462,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

121

 

 

 

25

 

 

 

15

 

 

 

86

 

 

 

7

 

 

 

2,610

 

 

 

7,888

 

 

 

10,752

 

Special Mention

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

686

 

 

 

 

 

 

686

 

Classified

 

 

 

 

 

 

 

 

661

 

 

 

27

 

 

 

 

 

 

 

 

 

 

 

 

688

 

Total commercial term loans

 

 

121

 

 

 

25

 

 

 

676

 

 

 

113

 

 

 

7

 

 

 

3,296

 

 

 

7,888

 

 

 

12,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Risk Rating

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass / Pass Watch

 

 

894,092

 

 

 

873,385

 

 

 

776,186

 

 

 

644,796

 

 

 

628,608

 

 

 

748,428

 

 

 

145,091

 

 

 

4,710,586

 

Special Mention

 

 

4,281

 

 

 

3,557

 

 

 

958

 

 

 

2,429

 

 

 

3,004

 

 

 

3,462

 

 

 

3,443

 

 

 

21,134

 

Classified

 

 

24,572

 

 

 

21,369

 

 

 

20,047

 

 

 

3,965

 

 

 

6,185

 

 

 

17,584

 

 

 

200

 

 

 

93,922

 

Total loans receivable

 

$

922,945

 

 

$

898,311

 

 

$

797,191

 

 

$

651,190

 

 

$

637,797

 

 

$

769,474

 

 

$

148,734

 

 

$

4,825,642

 

 

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

Loans by Vintage Year and Payment Performance

 

 

 

Term Loans

 

 

 

 

 

 

 

 

 

 

 

Amortized Cost Basis by Origination Year (1)

 

 

 

 

 

 

 

 

 

 

 

2020

 

 

2019

 

 

2018

 

 

2017

 

 

2016

 

 

Prior

 

 

Revolving

Loans

Amortized

Cost Basis

 

 

Total

 

 

 

(in thousands)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

$

453,569

 

 

$

543,468

 

 

$

559,015

 

 

$

432,475

 

 

$

488,673

 

 

$

681,933

 

 

$

30,895

 

 

$

3,190,028

 

Nonperforming

 

 

600

 

 

 

 

 

 

153

 

 

 

 

 

 

101

 

 

 

5,003

 

 

 

 

 

 

5,857

 

Total commercial property

 

 

454,169

 

 

 

543,468

 

 

 

559,168

 

 

 

432,475

 

 

 

488,774

 

 

 

686,936

 

 

 

30,895

 

 

 

3,195,885

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

18,025

 

 

 

5,633

 

 

 

 

 

 

 

 

 

20,845

 

 

 

 

 

 

 

 

$

44,503

 

Nonperforming

 

 

 

 

 

12,808

 

 

 

13,046

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

25,854

 

Total construction

 

 

18,025

 

 

 

18,441

 

 

 

13,046

 

 

 

 

 

 

20,845

 

 

 

 

 

 

 

 

 

70,357

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

274

 

 

 

954

 

 

 

40,468

 

 

 

149,532

 

 

 

100,366

 

 

 

59,677

 

 

 

 

 

 

351,271

 

Nonperforming

 

 

 

 

 

 

 

 

 

 

 

1,890

 

 

 

755

 

 

 

148

 

 

 

 

 

 

2,793

 

Total residential property

 

 

274

 

 

 

954

 

 

 

40,468

 

 

 

151,422

 

 

 

101,121

 

 

 

59,825

 

 

 

 

 

 

354,064

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total real estate loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

471,868

 

 

 

550,055

 

 

 

599,483

 

 

 

582,007

 

 

 

609,884

 

 

 

741,610

 

 

 

30,895

 

 

 

3,585,802

 

Nonperforming

 

 

600

 

 

 

12,808

 

 

 

13,199

 

 

 

1,890

 

 

 

856

 

 

 

5,151

 

 

 

 

 

 

34,504

 

Total real estate loans

 

 

472,468

 

 

 

562,863

 

 

 

612,682

 

 

 

583,897

 

 

 

610,740

 

 

 

746,761

 

 

 

30,895

 

 

 

3,620,306

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial and industrial loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

373,382

 

 

 

124,940

 

 

 

61,377

 

 

 

21,691

 

 

 

7,459

 

 

 

18,015

 

 

 

109,751

 

 

 

716,615

 

Nonperforming

 

 

8,969

 

 

 

3,895

 

 

 

436

 

 

 

148

 

 

 

 

 

 

136

 

 

 

200

 

 

 

13,784

 

Total commercial and industrial loans

 

 

382,351

 

 

 

128,835

 

 

 

61,813

 

 

 

21,839

 

 

 

7,459

 

 

 

18,151

 

 

 

109,951

 

 

 

730,399

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Leases receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

67,994

 

 

 

203,034

 

 

 

119,213

 

 

 

44,150

 

 

 

18,292

 

 

 

846

 

 

 

 

 

 

453,529

 

Nonperforming

 

 

11

 

 

 

3,554

 

 

 

2,807

 

 

 

1,191

 

 

 

1,299

 

 

 

420

 

 

 

 

 

 

9,282

 

Total leases receivable

 

 

68,005

 

 

 

206,588

 

 

 

122,020

 

 

 

45,341

 

 

 

19,591

 

 

 

1,266

 

 

 

 

 

 

462,811

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

121

 

 

 

25

 

 

 

15

 

 

 

86

 

 

 

7

 

 

 

3,296

 

 

 

7,888

 

 

 

11,438

 

Nonperforming

 

 

 

 

 

 

 

 

661

 

 

 

27

 

 

 

 

 

 

 

 

 

 

 

 

688

 

Total commercial term loans

 

 

121

 

 

 

25

 

 

 

676

 

 

 

113

 

 

 

7

 

 

 

3,296

 

 

 

7,888

 

 

 

12,126

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total loans receivable:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Payment performance

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Performing

 

 

913,365

 

 

 

878,054

 

 

 

780,088

 

 

 

647,934

 

 

 

635,642

 

 

 

763,767

 

 

 

148,534

 

 

 

4,767,384

 

Nonperforming

 

 

9,580

 

 

 

20,257

 

 

 

17,103

 

 

 

3,256

 

 

 

2,155

 

 

 

5,707

 

 

 

200

 

 

 

58,258

 

Total loans receivable

 

$

922,945

 

 

$

898,311

 

 

$

797,191

 

 

$

651,190

 

 

$

637,797

 

 

$

769,474

 

 

$

148,734

 

 

$

4,825,642

 

 

(1)

Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision.

The following is an aging analysis of 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)

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

 

 

$

 

 

$

 

 

$

 

 

$

808,157

 

 

$

808,157

 

 

$

 

Hospitality

 

 

 

 

 

 

 

 

 

 

 

 

 

 

882,812

 

 

 

882,812

 

 

 

 

Other

 

 

 

 

 

 

 

 

1,645

 

 

 

1,645

 

 

 

1,503,271

 

 

 

1,504,916

 

 

 

 

Total commercial property loans

 

 

 

 

 

 

 

 

1,645

 

 

 

1,645

 

 

 

3,194,240

 

 

 

3,195,885

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

70,357

 

 

 

70,357

 

 

 

 

Residential property

 

 

2,682

 

 

 

 

 

 

2,645

 

 

 

5,327

 

 

 

348,737

 

 

 

354,064

 

 

 

 

Total real estate loans

 

 

2,682

 

 

 

 

 

 

4,290

 

 

 

6,972

 

 

 

3,613,334

 

 

 

3,620,306

 

 

 

 

Commercial and industrial loans

 

 

212

 

 

 

 

 

 

12,632

 

 

 

12,844

 

 

 

717,555

 

 

 

730,399

 

 

 

 

Leases receivable

 

 

3,684

 

 

 

5,095

 

 

 

5,113

 

 

 

13,893

 

 

 

448,918

 

 

 

462,811

 

 

 

 

Consumer loans

 

 

 

 

 

 

 

 

27

 

 

 

27

 

 

 

12,099

 

 

 

12,126

 

 

 

 

Total loans receivable

 

$

6,578

 

 

$

5,095

 

 

$

22,062

 

 

$

33,736

 

 

$

4,791,906

 

 

$

4,825,642

 

 

$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

6

 

 

$

132

 

 

$

111

 

 

$

249

 

 

$

869,053

 

 

$

869,302

 

 

$

 

Hospitality

 

 

907

 

 

 

 

 

 

 

 

 

907

 

 

 

921,381

 

 

 

922,288

 

 

 

 

Other

 

 

51

 

 

 

 

 

 

38

 

 

 

89

 

 

 

1,358,344

 

 

 

1,358,432

 

 

 

 

Total commercial property loans

 

 

964

 

 

 

132

 

 

 

149

 

 

 

1,245

 

 

 

3,148,778

 

 

 

3,150,022

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

 

 

 

 

76,455

 

 

 

76,455

 

 

 

 

Residential property

 

 

540

 

 

 

1,627

 

 

 

309

 

 

 

2,477

 

 

 

399,551

 

 

 

402,028

 

 

 

 

Total real estate loans

 

 

1,504

 

 

 

1,759

 

 

 

458

 

 

 

3,721

 

 

 

3,624,784

 

 

 

3,628,505

 

 

 

 

Commercial and industrial loans

 

 

635

 

 

 

133

 

 

 

143

 

 

 

911

 

 

 

483,183

 

 

 

484,093

 

 

 

 

Leases receivable

 

 

5,358

 

 

 

2,138

 

 

 

3,493

 

 

 

10,990

 

 

 

472,889

 

 

 

483,879

 

 

 

 

Consumer loans

 

 

 

 

 

30

 

 

 

 

 

 

30

 

 

 

13,639

 

 

 

13,670

 

 

 

 

Total loans receivable

 

$

7,497

 

 

$

4,060

 

 

$

4,094

 

 

$

15,652

 

 

$

4,594,496

 

 

$

4,610,147

 

 

$

 

 

As of June 30, 2020 and December 31, 2019, there were no loans 90 days or more past due and accruing interest.

Individually Evaluated Loans

Prior to the adoption of ASU 2016-13, impaired loans were 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 was collateral dependent, less estimated costs to sell. If the estimated value of the impaired loan was less than the recorded investment in the loan, we charged-off the deficiency against the allowance for loan losses or we established a specific allowance in the allowance for loan losses. Additionally, we excluded from the quarterly migration analysis impaired loans when determining the amount of the allowance for loan losses required for the period.

We review, under ASU 2016-13, all loans on an individual basis when they do not share similar risk characteristics with loan pools.

The following tables provide information on individually evaluated loans receivable as of June 30, 2020 and impaired loans receivable as of December 31, 2019 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, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,355

 

 

$

1,355

 

 

$

1,355

 

 

$

 

 

$

 

Other

 

 

18,299

 

 

 

19,725

 

 

 

17,679

 

 

 

620

 

 

 

20

 

Total commercial property loans

 

 

19,654

 

 

 

21,080

 

 

 

19,034

 

 

 

620

 

 

 

20

 

Construction

 

 

25,854

 

 

 

27,330

 

 

 

13,046

 

 

 

12,808

 

 

 

2,787

 

Residential property

 

 

2,794

 

 

 

2,770

 

 

 

2,761

 

 

 

33

 

 

 

 

Total real estate loans

 

 

48,302

 

 

 

51,180

 

 

 

34,841

 

 

 

13,461

 

 

 

2,807

 

Commercial and industrial loans

 

 

13,771

 

 

 

14,589

 

 

 

12,877

 

 

 

893

 

 

 

123

 

Leases receivable

 

 

8,456

 

 

 

8,521

 

 

 

1,797

 

 

 

6,660

 

 

 

2,262

 

Consumer loans

 

 

1,280

 

 

 

1,599

 

 

 

1,208

 

 

 

72

 

 

 

2

 

Total

 

$

71,809

 

 

$

75,889

 

 

$

50,723

 

 

$

21,086

 

 

$

5,194

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

434

 

 

$

459

 

 

$

111

 

 

$

323

 

 

$

19

 

Hospitality

 

 

244

 

 

 

400

 

 

 

22

 

 

 

223

 

 

 

24

 

Other

 

 

14,864

 

 

 

15,151

 

 

 

14,696

 

 

 

167

 

 

 

12

 

Total commercial property loans

 

 

15,542

 

 

 

16,010

 

 

 

14,829

 

 

 

713

 

 

 

55

 

Construction

 

 

27,201

 

 

 

28,000

 

 

 

 

 

 

27,201

 

 

 

13,973

 

Residential property

 

 

1,124

 

 

 

1,163

 

 

 

1,089

 

 

 

35

 

 

 

 

Total real estate loans

 

 

43,867

 

 

 

45,173

 

 

 

15,918

 

 

 

27,949

 

 

 

14,028

 

Commercial and industrial loans

 

 

13,700

 

 

 

14,090

 

 

 

143

 

 

 

13,557

 

 

 

8,885

 

Leases receivable

 

 

5,902

 

 

 

5,909

 

 

 

1,112

 

 

 

4,790

 

 

 

2,863

 

Consumer loans

 

 

1,297

 

 

 

1,588

 

 

 

1,220

 

 

 

77

 

 

 

1

 

Total

 

$

64,766

 

 

$

66,760

 

 

$

18,393

 

 

$

46,373

 

 

$

25,778

 

 

Nonaccrual Loans and Nonperforming Assets

 

The following table represents the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of June 30, 2020.

 

 

 

June 30, 2020

 

 

 

Nonaccrual Loans

With

No Allowance for

Credit Losses

 

 

Nonaccrual Loans

With

Allowance for

Credit Losses

 

 

Loans

Past Due

90 Days Still

Accruing

 

 

Total

Nonperforming

Loans

 

 

 

(in thousands)

 

Real estate loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Retail

 

$

1,355

 

 

$

 

 

$

 

 

$

1,355

 

Other

 

 

3,883

 

 

 

620

 

 

 

 

 

 

4,503

 

Commercial property loans

 

 

5,238

 

 

 

620

 

 

 

 

 

 

5,858

 

Construction loans

 

 

13,046

 

 

 

12,808

 

 

 

 

 

 

25,854

 

Residential property loans

 

 

2,761

 

 

 

33

 

 

 

 

 

 

2,794

 

Total real estate loans

 

 

21,045

 

 

 

13,461

 

 

 

 

 

 

34,506

 

Commercial and industrial loans

 

 

12,878

 

 

 

907

 

 

 

 

 

 

13,785

 

Leases receivable

 

 

1,797

 

 

 

7,488

 

 

 

 

 

 

9,285

 

Consumer loans

 

 

688

 

 

 

 

 

 

 

 

 

688

 

Total

 

$

36,408

 

 

$

21,856

 

 

$

 

 

$

58,264

 

 

The following is a summary of interest foregone on nonaccrual loans for the periods indicated:

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(in thousands)

 

Interest income that would have been recognized had impaired loans performed in accordance with their original terms

 

$

1,386

 

 

$

1,120

 

 

$

2,998

 

 

$

2,009

 

Less: Interest income recognized on impaired loans

 

 

(508

)

 

 

(696

)

 

 

(1,085

)

 

 

(1,378

)

Interest foregone on impaired loans

 

$

878

 

 

$

424

 

 

$

1,913

 

 

$

631

 

 

There were no commitments to lend additional funds to borrowers whose loans are included above.

The following table details nonaccrual loans, disaggregated by loan class, as of the dates indicated:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

(in thousands)

 

Real estate loans:

 

 

 

 

 

 

 

 

Commercial property

 

 

 

 

 

 

 

 

Retail

 

$

1,355

 

 

$

277

 

Hospitality

 

 

 

 

 

225

 

Other

 

 

4,503

 

 

 

14,864

 

Total Commercial property loans

 

 

5,858

 

 

 

15,366

 

Construction

 

 

25,854

 

 

 

27,201

 

Residential property

 

 

2,794

 

 

 

1,124

 

Total real estate loans

 

 

34,506

 

 

 

43,691

 

Commercial and industrial loans

 

 

13,785

 

 

 

13,479

 

Leases receivable

 

 

9,285

 

 

 

5,902

 

Consumer loans

 

 

688

 

 

 

689

 

Total nonaccrual loans

 

$

58,264

 

 

$

63,761

 

 

The following table details nonperforming assets as of the dates indicated:

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

(in thousands)

 

Nonaccrual loans

 

$

58,264

 

 

$

63,761

 

Loans receivable 90 days or more past due and still accruing

 

 

 

 

 

 

Total nonperforming loans receivable

 

 

58,264

 

 

 

63,761

 

Other real estate owned ("OREO")

 

 

148

 

 

 

63

 

Total nonperforming assets

 

$

58,412

 

 

$

63,824

 

 

OREO is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of June 30, 2020 and December 31, 2019.

Troubled Debt Restructurings

As of June 30, 2020 and December 31, 2019, total TDRs were $31.6 million and $56.3 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, such as reducing the amount of principal and interest due monthly, and/or allowing for interest only monthly payments for three months or more or other payment structure modifications.

The following table details TDRs as of June 30, 2020 and December 31, 2019:

 

 

 

Nonaccrual TDRs

 

 

Accrual TDRs

 

 

 

Deferral of

Principal

 

 

Deferral of

Principal

and/or Interest

 

 

Reduction

of Principal

and/or Interest

 

 

Extension

of Maturity

 

 

Total

 

 

Deferral of

Principal

 

 

Deferral of

Principal

and/or Interest

 

 

Reduction

of Principal

and/or Interest

 

 

Extension

of Maturity

 

 

Total

 

June 30, 2020

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

$

 

 

$

1,483

 

 

$

13,548

 

 

$

618

 

 

$

15,649

 

 

$

 

 

$

 

 

$

 

 

$

13,796

 

 

$

13,796

 

Commercial and industrial loans

 

 

 

 

 

181

 

 

 

247

 

 

 

296

 

 

 

724

 

 

 

 

 

 

 

 

 

51

 

 

 

85

 

 

 

136

 

Consumer loans

 

 

661

 

 

 

 

 

 

 

 

 

 

 

 

661

 

 

 

521

 

 

 

 

 

 

71

 

 

 

 

 

 

592

 

Total

 

$

661

 

 

$

1,664

 

 

$

13,795

 

 

$

914

 

 

$

17,034

 

 

$

521

 

 

$

 

 

$

122

 

 

$

13,881

 

 

$

14,524

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real estate loans

 

$

 

 

$

132

 

 

$

27,740

 

 

$

13,926

 

 

$

41,798

 

 

$

 

 

$

 

 

$

 

 

$

 

 

$

 

Commercial and industrial loans

 

 

 

 

 

153

 

 

 

12,527

 

 

 

312

 

 

 

12,991

 

 

 

 

 

 

36

 

 

 

71

 

 

 

114

 

 

 

222

 

Consumer loans

 

 

689

 

 

 

 

 

 

 

 

 

 

 

 

689

 

 

 

531

 

 

 

 

 

 

77

 

 

 

 

 

 

608

 

Total

 

$

689

 

 

$

285

 

 

$

40,266

 

 

$

14,238

 

 

$

55,478

 

 

$

531

 

 

$

36

 

 

$

148

 

 

$

114

 

 

$

830

 

The following table presents the number of loans by class modified as troubled debt restructurings that occurred during the periods indicated, with their pre- and post-modification recorded amounts.

 

 

 

Three Months ended

 

 

Twelve Months ended

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Number of

Loans

 

 

Pre-

Modification

Outstanding

Recorded

Investment

 

 

Post-

Modification

Outstanding

Recorded

Investment

 

 

Number of

Loans

 

 

Pre-

Modification

Outstanding

Recorded

Investment

 

 

Post-

Modification

Outstanding

Recorded

Investment

 

 

 

(in thousands except for number of loans)

 

Real estate loans

 

 

2

 

 

$

2,002

 

 

$

1,973

 

 

 

5

 

 

$

40,743

 

 

$

41,798

 

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

12,779

 

 

 

12,562

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

549

 

 

 

531

 

Total

 

 

2

 

 

$

2,002

 

 

$

1,973

 

 

 

8

 

 

$

54,071

 

 

$

54,891

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months ended

 

 

Twelve Months ended

 

 

 

June 30, 2020

 

 

December 31, 2019

 

 

 

Number of

Loans

 

 

Pre-

Modification

Outstanding

Recorded

Investment

 

 

Post-

Modification

Outstanding

Recorded

Investment

 

 

Number of

Loans

 

 

Pre-

Modification

Outstanding

Recorded

Investment

 

 

Post-

Modification

Outstanding

Recorded

Investment

 

 

 

(in thousands except for number of loans)

 

Real estate loans

 

 

2

 

 

$

2,002

 

 

$

1,973

 

 

 

5

 

 

$

40,743

 

 

$

41,798

 

Commercial and industrial loans

 

 

 

 

 

 

 

 

 

 

 

2

 

 

 

12,779

 

 

 

12,562

 

Consumer loans

 

 

 

 

 

 

 

 

 

 

 

1

 

 

 

549

 

 

 

531

 

Total

 

 

2

 

 

$

2,002

 

 

$

1,973

 

 

 

8

 

 

$

54,071

 

 

$

54,891

 

All TDRs are individually analyzed 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, 2020 and December 31, 2019, TDRs were subjected to specific impairment analysis. We determined impairment allowances of $0.1 million and $22.7 million, respectively, related to these loans and such allowances were included in the allowance for credit losses.

A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. One loan for $33,000 defaulted during the three- and six-months ended June 30, 2020 following modification. During the year ended December 31, 2019, one loan for $132,000 defaulted within the twelve-month period following modification.