| Noncovered Loans |
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 agreements. The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income): | | | | | | | | | | | | December 31,
2013 | | December 31,
2012 | | | (in thousands) | Noncovered loans: | | | | | Commercial business | | $ | 1,561,782 |
| | $ | 1,155,158 |
| Real estate: | | | | | One-to-four family residential | | 108,317 |
| | 43,922 |
| Commercial and multifamily residential | | 2,080,075 |
| | 1,061,201 |
| Total real estate | | 2,188,392 |
| | 1,105,123 |
| Real estate construction: | | | | | One-to-four family residential | | 54,155 |
| | 50,602 |
| Commercial and multifamily residential | | 126,390 |
| | 65,101 |
| Total real estate construction | | 180,545 |
| | 115,703 |
| Consumer | | 357,014 |
| | 157,493 |
| Less: Net unearned income | | (68,282 | ) | | (7,767 | ) | Total noncovered loans, net of unearned income | | 4,219,451 |
| | 2,525,710 |
| Less: Allowance for loan and lease losses | | (52,280 | ) | | (52,244 | ) | Total noncovered loans, net | | $ | 4,167,171 |
| | $ | 2,473,466 |
| Loans held for sale | | $ | 735 |
| | $ | 2,563 |
|
At December 31, 2013 and 2012, the Company had no material foreign activities. 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 has 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 $14.2 million and $14.2 million at December 31, 2013 and 2012, respectively. During 2013, advances and repayments on related party loans totaled $2.0 million. At December 31, 2013 and 2012, $1.08 billion and $443.4 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank advances. The Company has also pledged $45.2 million and $13.8 million of commercial loans to the Federal Reserve Bank for additional borrowing capacity at December 31, 2013 and 2012, respectively. Nonaccrual loans totaled $34.0 million and $37.4 million at December 31, 2013 and 2012, respectively. The amount of interest income foregone as a result of these loans being placed on nonaccrual status totaled $2.9 million for 2013, $3.4 million for 2012 and $5.3 million for 2011. There were no loans 90 days past due and still accruing interest as of December 31, 2013 and December 31, 2012. At December 31, 2013 and 2012, there were $28 thousand and $346 thousand, respectively, of commitments of additional funds for loans accounted for on a nonaccrual basis. The following is an analysis of noncovered, nonaccrual loans as of December 31, 2013 and 2012: | | | | | | | | | | | | | | | | | | | | December 31, 2013 | | December 31, 2012 | | | Recorded
Investment
Nonaccrual
Loans | | Unpaid Principal
Balance
Nonaccrual
Loans | | Recorded
Investment
Nonaccrual
Loans | | Unpaid Principal
Balance
Nonaccrual
Loans | Noncovered loans: | | (in thousands) | Commercial business: | | | | | | | | | Secured | | $ | 12,433 |
| | $ | 19,186 |
| | $ | 9,037 |
| | $ | 17,821 |
| Unsecured | | 176 |
| | 202 |
| | 262 |
| | 262 |
| Real estate: | | | | | | | | | One-to-four family residential | | 2,667 |
| | 4,678 |
| | 2,349 |
| | 2,672 |
| Commercial and multifamily residential: | | | | | | | | | Commercial land | | 442 |
| | 783 |
| | 4,076 |
| | 7,491 |
| Income property | | 4,267 |
| | 5,383 |
| | 8,520 |
| | 10,815 |
| Owner occupied | | 6,334 |
| | 7,486 |
| | 6,608 |
| | 7,741 |
| Real estate construction: | | | | | | | | | One-to-four family residential: | | | | | | | | | Land and acquisition | | 3,246 |
| | 6,601 |
| | 3,084 |
| | 6,704 |
| Residential construction | | 459 |
| | 1,928 |
| | 1,816 |
| | 2,431 |
| Consumer | | 3,991 |
| | 6,187 |
| | 1,643 |
| | 1,940 |
| Total | | $ | 34,015 |
| | $ | 52,434 |
| | $ | 37,395 |
| | $ | 57,877 |
|
The following is an aging of the recorded investment of the noncovered loan portfolio as of December 31, 2013 and 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Current
Loans | | 30 - 59
Days
Past Due | | 60 - 89
Days
Past Due | | Total
Past Due | | Nonaccrual
Loans | | Total Loans | December 31, 2013 | | (in thousands) | Noncovered loans: | | | | | | | | | | | | | Commercial business: | | | | | | | | | | | | | Secured | | $ | 1,457,820 |
| | $ | 12,713 |
| | $ | 681 |
| | $ | 13,394 |
| | $ | 12,433 |
| | $ | 1,483,647 |
| Unsecured | | 72,255 |
| | 156 |
| | 17 |
| | 173 |
| | 176 |
| | 72,604 |
| Real estate: | | | | | | | | | | | | | One-to-four family residential | | 100,591 |
| | 1,993 |
| | 641 |
| | 2,634 |
| | 2,667 |
| | 105,892 |
| Commercial and multifamily residential: | | | | | | | | | | | | | Commercial land | | 142,034 |
| | — |
| | 358 |
| | 358 |
| | 442 |
| | 142,834 |
| Income property | | 1,138,732 |
| | 144 |
| | 3,289 |
| | 3,433 |
| | 4,267 |
| | 1,146,432 |
| Owner occupied | | 749,561 |
| | 4,714 |
| | — |
| | 4,714 |
| | 6,334 |
| | 760,609 |
| Real estate construction: | | | | | | | | | | | | | One-to-four family residential: | | | | | | | | | | | | | Land and acquisition | | 8,225 |
| | 199 |
| | — |
| | 199 |
| | 3,246 |
| | 11,670 |
| Residential construction | | 41,533 |
| | — |
| | — |
| | — |
| | 459 |
| | 41,992 |
| Commercial and multifamily residential: | | | | | | | | | | | | | Income property | | 86,521 |
| | — |
| | — |
| | — |
| | — |
| | 86,521 |
| Owner occupied | | 38,916 |
| | — |
| | — |
| | — |
| | — |
| | 38,916 |
| Consumer | | 322,685 |
| | 835 |
| | 823 |
| | 1,658 |
| | 3,991 |
| | 328,334 |
| Total | | $ | 4,158,873 |
| | $ | 20,754 |
| | $ | 5,809 |
| | $ | 26,563 |
| | $ | 34,015 |
| | $ | 4,219,451 |
| | | Current
Loans | | 30 - 59
Days
Past Due | | 60 - 89
Days
Past Due | | Total
Past Due | | Nonaccrual
Loans | | Total Loans | December 31, 2012 | | (in thousands) | Noncovered loans: | | | | | | | | | | | | | Commercial business: | | | | | | | | | | | | | Secured | | $ | 1,091,770 |
| | $ | 4,259 |
| | $ | 1,485 |
| | $ | 5,744 |
| | $ | 9,037 |
| | $ | 1,106,551 |
| Unsecured | | 44,817 |
| | 252 |
| | 12 |
| | 264 |
| | 262 |
| | 45,343 |
| Real estate: | | | | | | | | | | | | | One-to-four family residential | | 41,508 |
| | 193 |
| | 142 |
| | 335 |
| | 2,349 |
| | 44,192 |
| Commercial and multifamily residential: | | | | | | | | | | | | | Commercial land | | 42,818 |
| | 311 |
| | 122 |
| | 433 |
| | 4,076 |
| | 47,327 |
| Income property | | 603,339 |
| | 2,726 |
| | 227 |
| | 2,953 |
| | 8,520 |
| | 614,812 |
| Owner occupied | | 387,525 |
| | 1,040 |
| | — |
| | 1,040 |
| | 6,608 |
| | 395,173 |
| Real estate construction: | | | | | | | | | | | | | One-to-four family residential: | | | | | | | | | | | | | Land and acquisition | | 15,412 |
| | — |
| | — |
| | — |
| | 3,084 |
| | 18,496 |
| Residential construction | | 29,848 |
| | — |
| | — |
| | — |
| | 1,816 |
| | 31,664 |
| Commercial and multifamily residential: | | | | | | | | | | | | | Income property | | 28,342 |
| | — |
| | — |
| | — |
| | — |
| | 28,342 |
| Owner occupied | | 36,211 |
| | — |
| | — |
| | — |
| | — |
| | 36,211 |
| Consumer | | 155,207 |
| | 387 |
| | 362 |
| | 749 |
| | 1,643 |
| | 157,599 |
| Total | | $ | 2,476,797 |
| | $ | 9,168 |
| | $ | 2,350 |
| | $ | 11,518 |
| | $ | 37,395 |
| | $ | 2,525,710 |
|
The following is an analysis of impaired loans (see Note 1) as of December 31, 2013 and 2012: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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, 2013 | | (in thousands) | Noncovered loans: | | | | | | | | | | | | | | | Commercial business: | | | | | | | | | | | | | | | Secured | | $ | 1,478,560 |
| | $ | 5,087 |
| | $ | 2,866 |
| | $ | 2,885 |
| | $ | 343 |
| | $ | 2,221 |
| | $ | 2,560 |
| Unsecured | | 72,569 |
| | 35 |
| | 35 |
| | 35 |
| | 35 |
| | — |
| | — |
| Real estate: | | | | | | | | | | | | | | | One-to-four family residential | | 104,272 |
| | 1,620 |
| | 442 |
| | 479 |
| | 138 |
| | 1,178 |
| | 2,119 |
| Commercial and multifamily residential: | | | | | | | | | | | | | | | Commercial land | | 142,719 |
| | 115 |
| | — |
| | — |
| | — |
| | 115 |
| | 398 |
| Income property | | 1,140,019 |
| | 6,413 |
| | 918 |
| | 933 |
| | 26 |
| | 5,495 |
| | 7,885 |
| Owner occupied | | 749,601 |
| | 11,008 |
| | 3,802 |
| | 3,817 |
| | 1,073 |
| | 7,206 |
| | 10,464 |
| Real estate construction: | | | | | | | | | | | | | | | One-to-four family residential: | | | | | | | | | | | | | | | Land and acquisition | | 9,726 |
| | 1,944 |
| | 113 |
| | 113 |
| | 71 |
| | 1,831 |
| | 2,587 |
| Residential construction | | 41,992 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Commercial and multifamily residential: | | | | | | | | | | | | | | | Income property | | 86,521 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Owner occupied | | 38,916 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Consumer | | 328,167 |
| | 167 |
| | 23 |
| | 27 |
| | 4 |
| | 144 |
| | 210 |
| Total | | $ | 4,193,062 |
| | $ | 26,389 |
| | $ | 8,199 |
| | $ | 8,289 |
| | $ | 1,690 |
| | $ | 18,190 |
| | $ | 26,223 |
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 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, 2012 | | (in thousands) | Noncovered loans: | | | | | | | | | | | | | | | Commercial business: | | | | | | | | | | | | | | | Secured | | $ | 1,101,689 |
| | $ | 4,862 |
| | $ | 690 |
| | $ | 1,994 |
| | $ | 113 |
| | $ | 4,172 |
| | $ | 6,769 |
| Unsecured | | 45,251 |
| | 92 |
| | 92 |
| | 92 |
| | 92 |
| | — |
| | — |
| Real estate: | | | | | | | | | | | | | | | One-to-four family residential | | 42,103 |
| | 2,089 |
| | 345 |
| | 364 |
| | 112 |
| | 1,744 |
| | 1,902 |
| Commercial and multifamily residential: | | | | | | | | | | | | | | | Commercial land | | 44,672 |
| | 2,655 |
| | — |
| | — |
| | — |
| | 2,655 |
| | 5,727 |
| Income property | | 606,656 |
| | 8,156 |
| | 2,670 |
| | 2,727 |
| | 1,040 |
| | 5,486 |
| | 7,860 |
| Owner occupied | | 383,269 |
| | 11,904 |
| | 608 |
| | 610 |
| | 38 |
| | 11,296 |
| | 14,642 |
| Real estate construction: | | | | | | | | | | | | | | | One-to-four family residential | | | | | | | | | | | | | | | Land and acquisition | | 15,677 |
| | 2,819 |
| | — |
| | — |
| | — |
| | 2,819 |
| | 4,813 |
| Residential construction | | 29,707 |
| | 1,957 |
| | — |
| | — |
| | — |
| | 1,957 |
| | 2,570 |
| Commercial and multifamily residential: | | | | | | | | | | | | | | | Income property | | 28,342 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Owner occupied | | 36,211 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Consumer | | 157,472 |
| | 127 |
| | — |
| | — |
| | — |
| | 127 |
| | 127 |
| Total | | $ | 2,491,049 |
| | $ | 34,661 |
| | $ | 4,405 |
| | $ | 5,787 |
| | $ | 1,395 |
| | $ | 30,256 |
| | $ | 44,410 |
|
The following table provides additional information on impaired loans for the years ended December 31, 2013, 2012 and 2011: | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year ended December 31, 2013 | | Year Ended December 31, 2012 | | Year ended December 31, 2011 | | | Average Recorded
Investment
Impaired Loans | | Interest Recognized
on
Impaired Loans | | Average Recorded
Investment
Impaired Loans | | Interest Recognized
on
Impaired Loans | | Average Recorded
Investment
Impaired Loans | | Interest Recognized
on
Impaired Loans | Noncovered loans: | | (in thousands) | Commercial business | | | | | | | | | | | | | Secured | | $ | 5,636 |
| | $ | 19 |
| | $ | 8,978 |
| | $ | 9 |
| | $ | 15,578 |
| | $ | 511 |
| Unsecured | | 61 |
| | 3 |
| | 113 |
| | 6 |
| | 138 |
| | — |
| Real estate: | | | | | | | | | | | | | One-to-four family residential | | 1,665 |
| | 63 |
| | 2,130 |
| | — |
| | 2,494 |
| | — |
| Commercial & multifamily residential | | | | | | | | | | | | | Commercial land | | 1,691 |
| | — |
| | 3,124 |
| | — |
| | 4,263 |
| | — |
| Income property | | 8,910 |
| | 238 |
| | 7,895 |
| | 77 |
| | 8,881 |
| | 59 |
| Owner occupied | | 10,779 |
| | 971 |
| | 13,315 |
| | 1,004 |
| | 15,254 |
| | 18 |
| Real estate construction: | | | | | | | | | | | | | One-to-four family residential | | | | | | | | | | | | | Land and acquisition | | 2,624 |
| | 6 |
| | 4,465 |
| | — |
| | 8,972 |
| | 116 |
| Residential construction | | 420 |
| | — |
| | 3,223 |
| | 11 |
| | 4,535 |
| | — |
| Commercial & multifamily residential | | | | | | | | | | | | | Income property | | — |
| | — |
| | 3,169 |
| | — |
| | 7,065 |
| | — |
| Consumer | | 253 |
| | 6 |
| | 1,112 |
| | 7 |
| | 3,880 |
| | 15 |
| Total | | $ | 32,039 |
| | $ | 1,306 |
| | $ | 47,524 |
| | $ | 1,114 |
| | $ | 71,060 |
| | $ | 719 |
|
The following is an analysis of loans classified as Troubled Debt Restructurings ("TDR") for the years ended December 31, 2013, 2012 and 2011: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Year ended December 31, 2013 | | Year Ended December 31, 2012 | | Year ended December 31, 2011 | | | Number of TDR Modifications | | Pre-Modification
Outstanding
Recorded
Investment | | Post-Modification
Outstanding
Recorded
Investment | | Number of TDR Modifications | | Pre-Modification
Outstanding
Recorded
Investment | | Post-Modification
Outstanding
Recorded
Investment | | Number of TDR Modifications | | Pre-Modification
Outstanding
Recorded
Investment | | Post-Modification
Outstanding
Recorded
Investment | Noncovered loans: | | (dollars in thousands) | Commercial business: | | | | | | | | | | | | | | | | | | | Secured | | 2 |
| | $ | 190 |
| | $ | 190 |
| | 1 |
| | $ | 195 |
| | $ | 194 |
| | 6 |
| | $ | 659 |
| | $ | 659 |
| Real estate: | | | | | | | | | | | | | | | | | | | One-to-four family residential | | 1 |
| | 113 |
| | 113 |
| | — |
| | — |
| | — |
| | 1 |
| | 369 |
| | 369 |
| Commercial and multifamily residential: | | | | | | | | | | | | | | | | | | | Commercial land | | 1 |
| | 137 |
| | 137 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Income property | | 4 |
| | 1,186 |
| | 1,186 |
| | 1 |
| | 4,279 |
| | 2,650 |
| | 2 |
| | 1,280 |
| | 1,280 |
| Owner occupied | | 1 |
| | 172 |
| | 172 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Real estate construction: | | | | | | | | | | | | | | | | | | | One-to-four family residential: | | | | | | | | | | | | | | | | | | | Land and acquisition | | 1 |
| | 117 |
| | 117 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Residential construction | | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| | 1 |
| | 36 |
| | 36 |
| Consumer | | 2 |
| | 53 |
| | 53 |
| | — |
| | — |
| | — |
| | — |
| | — |
| | — |
| Total | | 12 |
| | $ | 1,968 |
| | $ | 1,968 |
| | 2 |
| | $ | 4,474 |
| | $ | 2,844 |
| | 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 $0 and $236 thousand of additional funds on loans classified as TDR as of December 31, 2013 and 2012, respectively. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. Credit losses for loans classified as TDR are measured on the same basis as impaired loans. For impaired loans, an allowance is established when the collateral value less selling costs (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 defaulted within 12 months of being modified as TDR during the years ended December 31,
2013, 2012, and 2011.
|