Noncovered Loans

Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans that are not subject to FDIC loss share, including the loans acquired in the Bank of Whitman transaction described in Note 2.

The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):



	December 31, 2011			December 31, 2010
	(in thousands)
Noncovered loans:
Commercial business	$	1,031,721		$	795,369
Real estate:
One-to-four family residential	64,491			49,383
Commercial and multifamily residential	998,165			794,329
Total real estate	1,062,656			843,712
Real estate construction:
One-to-four family residential	50,208			67,961
Commercial and multifamily residential	36,768			30,185
Total real estate construction	86,976			98,146
Consumer	183,235			182,017
Less: Net unearned income	(16,217		)	(3,490		)
Total noncovered loans, net of unearned income	2,348,371			1,915,754
Less: Allowance for loan and lease losses	(53,041		)	(60,993		)
Total noncovered loans, net	$	2,295,330		$	1,854,761
Loans held for sale	$	2,148		$	754

At December 31, 2011 and 2010, the Company had no loans to foreign domiciled businesses or foreign countries, or loans related to highly leveraged transactions. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company and its banking subsidiary have granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $9.0 million and $12.9 million at December 31, 2011 and 2010, respectively. During 2011, advances on related party loans were $3.7 million and repayments totaled $7.6 million.

At December 31, 2011 and 2010, $462.0 million and $426.6 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank advances.

Non-accrual loans totaled $53.5 million and $89.2 million at December 31, 2011 and 2010, respectively. The amount of interest income foregone as a result of these loans being placed on non-accrual status totaled $5.3 million for 2011, $6.4 million for 2010 and $7.6 million for 2009. There were no loans 90 days past due and still accruing interest as of December 31, 2011 and there was one loan totaling $1 thousand 90 days past due still accruing interest as of December 31, 2010. At December 31, 2011 and 2010, there were $2.0 million and $5.6 million, respectively, of commitments of additional funds for loans accounted for on a non-accrual basis.

The following is an analysis of noncovered, nonaccrual loans as of December 31, 2011 and 2010:



	December 31, 2011				December 31, 2010
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
	(in thousands)
Commercial business
Secured	$	10,124	$	16,820	$	32,368	$	44,316
Unsecured	119		719		—		327
Real estate:
One-to-four family residential	2,696		3,011		2,999		3,353
Commercial and multifamily residential
Commercial land	3,739		7,230		4,093		6,279
Income property multifamily	6,775		9,265		11,716		12,737
Owner occupied	8,971		10,932		7,407		8,990
Real estate construction:
One-to-four family residential
Land and acquisition	7,799		16,703		11,608		21,344
Residential construction	2,986		5,316		6,503		11,547
Commercial and multifamily residential
Income property multifamily	7,067		14,912		7,585		12,916
Owner occupied	—		—		—		—
Consumer	3,207		3,960		5,022		5,192
Total	$	53,483	$	88,868	$	89,301	$	127,001

The following is an analysis of the recorded investment of the aged loan portfolio as of December 31, 2011 and 2010:



	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2011	(in thousands)
Commercial business
Secured	$	966,563	$	1,741	$	2,989	$	—	$	4,730	$	10,124	$	981,417
Unsecured	46,880		407		—		—		407		119		47,406
Real estate:
One-to-four family residential	60,764		603		—		—		603		2,696		64,063
Commercial and multifamily residential
Commercial land	46,161		781		—		—		781		3,739		50,681
Income property multifamily	524,225		2,872		121		—		2,993		6,775		533,993
Owner occupied	394,691		829		298		—		1,127		8,971		404,789
Real estate construction:
One-to-four family residential
Land and acquisition	17,249		153		—		—		153		7,799		25,201
Residential construction	19,555		1,390		—		—		1,390		2,986		23,931
Commercial and multifamily residential
Income property multifamily	13,810		—		—		—		—		7,067		20,877
Owner occupied	12,790		—		—		—		—		—		12,790
Consumer	179,753		141		122		—		263		3,207		183,223
Total	$	2,282,441	$	8,917	$	3,530	$	—	$	12,447	$	53,483	$	2,348,371
	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
December 31, 2010	(in thousands)
Commercial business
Secured	$	720,926	$	919	$	692	$	1	$	1,612	$	31,919	$	754,457
Unsecured	40,455		9		—		—		9		448		40,912
Real estate:
One-to-four family residential	46,167		220		—		—		220		2,996		49,383
Commercial and multifamily residential
Commercial land	18,979		—		1,752		—		1,752		4,091		24,822
Income property multifamily	426,320		1,208		121		—		1,329		10,745		438,394
Owner occupied	318,508		497		3,752		—		4,249		8,356		331,113
Real Estate Construction:
One-to-four family residential
Land and acquisition	24,883		214		205		—		419		11,604		36,906
Residential construction	24,655		—		—		—		—		6,400		31,055
Commercial and multifamily residential
Income property multifamily	10,666		—		—		—		—		7,584		18,250
Owner occupied	11,935		—		—		—		—		—		11,935
Consumer	176,005		397		595		—		992		5,020		182,017
Total	$	1,819,499	$	3,464	$	7,117	$	1	$	10,582	$	89,163	$	1,919,244

The following is an analysis of impaired loans (see Note 1) as of December 31, 2011 and 2010:



	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance				Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance		Average Recorded Investment Impaired Loans		Interest Recognized on Impaired Loans
December 31, 2011	(in thousands)
Commercial business:
Secured	$	972,531	$	8,886	$	2,926	$	2,927	$	954	$	5,960	$	12,109	$	15,578	$	511
Unsecured	47,309		97		97		97		97		—		—		138		—
Real estate:
One-to-four family residential	61,584		2,479		582		590		96		1,897		2,136		2,494		—
Commercial and multifamily residential:
Commercial land	46,882		3,799		—		—		—		3,799		6,773		4,263		—
Income property multifamily	527,362		6,631		687		759		63		5,944		7,700		8,881		59
Owner occupied	390,225		14,564		274		274		185		14,290		18,524		15,254		18
Real estate construction:
One-to-four family residential:
Land and acquisition	17,813		7,388		450		948		—		6,938		11,978		8,972		116
Residential construction	18,847		5,084		59		1,509		59		5,025		5,116		4,535		—
Commercial and multifamily residential:
Income property multifamily	13,810		7,067		—		—		—		7,067		14,947		7,065		—
Owner occupied	12,790		—		—		—		—		—		—		—		—
Consumer	180,930		2,293		151		225		30		2,142		2,639		3,880		15
Total	$	2,290,083	$	58,288	$	5,226	$	7,329	$	1,484	$	53,062	$	81,922	$	71,060	$	719



	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
December 31, 2010	(in thousands)
Commercial business:
Secured	$	724,665	$	29,793	$	2,717	$	2,758	$	600	$	27,081	$	26,913
Unsecured	40,808		104		75		75		75		29		30
Real estate:
One-to-four family residential	46,728		2,655		—		—		—		2,658		2,949
Commercial and multifamily residential:
Commercial land	20,959		3,863		3,062		5,225		—		804		826
Income property multifamily	427,799		10,595		3,094		3,139		59		10,292		12,253
Owner occupied	317,010		14,103		—		—		—		14,152		17,099
Real estate construction:
One-to-four family residential
Land and acquisition	25,362		11,543		533		549		3		11,013		20,718
Residential construction	24,655		6,400		915		1,723		62		5,585		9,824
Commercial and multifamily residential:
Income property multifamily	10,666		7,584		6,792		10,515		175		792		2,401
Owner occupied	11,935		—		—		—		—		—		—
Consumer	177,484		4,533		—		—		—		4,533		4,691
Total	$	1,828,071	$	91,173	$	17,188	$	23,984	$	974	$	76,939	$	97,703

The following is an analysis of loans classified as Troubled Debt Restructurings ("TDR") for the year ended December 31, 2011:



	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	(dollars in thousands)
Commercial business:
Secured	6	$	659	$	659
Real estate: One-to-four family residential	1	369		369
Real estate: Commercial and multifamily residential:
Income property multifamily	2	1,280		1,280
Real estate construction: One-to-four family residential:
Residential construction	1	36		36
Total	10	$	2,344	$	2,344

The Company's loans classified as TDR are loans that have been modified or the borrower has been granted special concessions due to financial difficulties, that if not for the challenges of the borrower, the Company would not otherwise consider. The Company had commitments to lend $535 thousand of additional funds on loans classified as TDR as of December 31, 2011. The TDR modifications or concessions are made to increase the likelihood these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured the same as impaired loans. For impaired loans, an allowance is established when the collateral value (or discounted cash flows or observable market price) of the impaired loan is lower than the recorded investment of that loan. The Company did not have any loans modified as TDR that have defaulted during the year ended December 31, 2011.