Allowance for Loan and Lease Losses and Unfunded Commitments and Letters of Credit (Tables)

6 Months Ended

Jun. 30, 2019

Financing Receivable, Allowance for Credit Loss [Line Items]

Allowance for Credit Losses on Financing Receivables

The following tables show a detailed analysis of the ALLL for the three and six months ended June 30, 2019 and 2018:



	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Three Months Ended June 30, 2019	(in thousands)
Commercial business:
Secured	$	43,617	$	(4,103	)	$	515	$	(2,167	)	$	37,862	$	740	$	37,122
Unsecured	2,495		(15		)	32		498			3,010		—		3,010
Real estate:
One-to-four family residential	616		—			20		9			645		6		639
Commercial & multifamily residential:
Commercial land	4,588		—			7		814			5,409		666		4,743
Income property	5,018		—			25		282			5,325		—		5,325
Owner occupied	4,966		—			1		263			5,230		43		5,187
Real estate construction:
One-to-four family residential:
Land and acquisition	407		—			72		(326		)	153		—		153
Residential construction	5,466		—			589		48			6,103		—		6,103
Commercial & multifamily residential:
Income property	4,517		—			1		(320		)	4,198		—		4,198
Owner occupied	2,220		—			—		192			2,412		—		2,412
Consumer	5,545		(354		)	178		(175		)	5,194		20		5,174
PCI	3,245		(815		)	872		(33		)	3,269		—		3,269
Unallocated	574		—			—		1,133			1,707		—		1,707
Total	$	83,274	$	(5,287	)	$	2,312	$	218		$	80,517	$	1,475	$	79,042
	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Six Months Ended June 30, 2019	(in thousands)
Commercial business:
Secured	$	43,188	$	(5,352	)	$	838	$	(812	)	$	37,862	$	740	$	37,122
Unsecured	2,626		(15		)	189		210			3,010		—		3,010
Real estate:
One-to-four family residential	593		(2		)	37		17			645		6		639
Commercial & multifamily residential:
Commercial land	3,947		—			14		1,448			5,409		666		4,743
Income property	4,044		—			48		1,233			5,325		—		5,325
Owner occupied	4,533		—			2		695			5,230		43		5,187
Real estate construction:
One-to-four family residential:
Land and acquisition	549		—			131		(527		)	153		—		153
Residential construction	5,536		(170		)	590		147			6,103		—		6,103
Commercial & multifamily residential:
Income property	5,784		—			1		(1,587		)	4,198		—		4,198
Owner occupied	2,604		—			—		(192		)	2,412		—		2,412
Consumer	5,301		(832		)	416		309			5,194		20		5,174
PCI	3,611		(1,904		)	1,577		(15		)	3,269		—		3,269
Unallocated	1,053		—			—		654			1,707		—		1,707
Total	$	83,369	$	(8,275	)	$	3,843	$	1,580		$	80,517	$	1,475	$	79,042



	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Three Months Ended June 30, 2018	(in thousands)
Commercial business:
Secured	$	37,331	$	(5,751	)	$	1,487	$	7,283		$	40,350	$	67	$	40,283
Unsecured	2,595		(24		)	56		(184		)	2,443		—		2,443
Real estate:
One-to-four family residential	558		—			196		(293		)	461		8		453
Commercial & multifamily residential:
Commercial land	3,745		—			78		(545		)	3,278		—		3,278
Income property	4,702		—			558		(1,158		)	4,102		—		4,102
Owner occupied	4,749		—			4		(397		)	4,356		86		4,270
Real estate construction:
One-to-four family residential:
Land and acquisition	912		—			12		(76		)	848		—		848
Residential construction	4,636		—			2		(66		)	4,572		—		4,572
Commercial & multifamily residential:
Income property	7,474		—			—		(107		)	7,367		—		7,367
Owner occupied	1,923		—			—		376			2,299		—		2,299
Consumer	5,216		(232		)	270		38			5,292		95		5,197
PCI	5,665		(1,235		)	927		(575		)	4,782		—		4,782
Unallocated	321		—			—		(321		)	—		—		—
Total	$	79,827	$	(7,242	)	$	3,590	$	3,975		$	80,150	$	256	$	79,894
	Beginning Balance		Charge-offs			Recoveries		Provision (Recapture)			Ending Balance		Specific Reserve		General Allocation
Six Months Ended June 30, 2018	(in thousands)
Commercial business:
Secured	$	29,341	$	(8,165	)	$	2,040	$	17,134		$	40,350	$	67	$	40,283
Unsecured	2,000		(87		)	305		225			2,443		—		2,443
Real estate:
One-to-four family residential	701		—			368		(608		)	461		8		453
Commercial & multifamily residential:
Commercial land	4,265		—			84		(1,071		)	3,278		—		3,278
Income property	5,672		(223		)	699		(2,046		)	4,102		—		4,102
Owner occupied	5,459		—			16		(1,119		)	4,356		86		4,270
Real estate construction:
One-to-four family residential:
Land and acquisition	963		—			28		(143		)	848		—		848
Residential construction	3,709		—			5		858			4,572		—		4,572
Commercial & multifamily residential:
Income property	7,053		—			—		314			7,367		—		7,367
Owner occupied	4,413		—			—		(2,114		)	2,299		—		2,299
Consumer	5,163		(496		)	530		95			5,292		95		5,197
PCI	6,907		(2,578		)	2,151		(1,698		)	4,782		—		4,782
Unallocated	—		—			—		—			—		—		—
Total	$	75,646	$	(11,549	)	$	6,226	$	9,827		$	80,150	$	256	$	79,894

Changes in the Allowance for Unfunded Commitments and Letters of Credit

Changes in the allowance for unfunded commitments and letters of credit, a component of “Other liabilities” in the Consolidated Balance Sheets, are summarized as follows:



	Three Months Ended					Six Months Ended
	June 30,					June 30,
	2019		2018			2019			2018
	(in thousands)
Balance at beginning of period	$	3,780	$	4,330		$	4,330		$	3,130
Net changes in the allowance for unfunded commitments and letters of credit	200		(650		)	(350		)	550
Balance at end of period	$	3,980	$	3,680		$	3,980		$	3,680

Financing Receivable Credit Quality Indicators

The following is an analysis of the credit quality of our loan portfolio, excluding PCI loans, as of June 30, 2019 and December 31, 2018:



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	3,371,298	$	35,506	$	95,591	$	—	$	—	$	3,502,395
Unsecured	129,098		—		220		—		—		129,318
Real estate:
One-to-four family residential	277,407		—		1,311		—		—		278,718
Commercial and multifamily residential:
Commercial land	277,564		2,426		12,149		—		—		292,139
Income property	1,904,020		547		44,698		—		—		1,949,265
Owner occupied	1,590,785		10,100		50,429		—		—		1,651,314
Real estate construction:
One-to-four family residential:
Land and acquisition	1,683		—		—		—		—		1,683
Residential construction	199,154		—		—		—		—		199,154
Commercial and multifamily residential:
Income property	163,074		—		—		—		—		163,074
Owner occupied	88,917		—		848		—		—		89,765
Consumer	301,826		—		3,609		—		—		305,435
Total	$	8,304,826	$	48,579	$	208,855	$	—	$	—	8,562,260
Less:
ALLL											77,248
Loans, excluding PCI loans, net											$	8,485,012



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2018	(in thousands)
Loans, excluding PCI loans:
Commercial business:
Secured	$	3,160,910	$	48,779	$	103,007	$	5	$	—	$	3,312,701
Unsecured	112,091		21		—		5		—		112,117
Real estate:
One-to-four family residential	234,416		—		1,610		—		—		236,026
Commercial and multifamily residential:
Commercial land	276,348		5,082		4,247		—		—		285,677
Income property	1,876,925		36,998		6,553		—		—		1,920,476
Owner occupied	1,556,852		14,964		45,935		—		—		1,617,751
Real estate construction:
One-to-four family residential:
Land and acquisition	4,099		—		318		—		—		4,417
Residential construction	212,225		—		171		—		—		212,396
Commercial and multifamily residential:
Income property	194,912		—		—		—		—		194,912
Owner occupied	87,063		—		—		—		—		87,063
Consumer	313,817		—		4,398		—		—		318,215
Total	$	8,029,658	$	105,844	$	166,239	$	10	$	—	8,301,751
Less:
ALLL											79,758
Loans, excluding PCI loans, net											$	8,221,993

The following is an analysis of the credit quality of our PCI loan portfolio as of June 30, 2019 and December 31, 2018:



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
June 30, 2019	(in thousands)
PCI loans:
Commercial business:
Secured	$	6,910	$	964	$	767	$	—	$	—	$	8,641
Unsecured	937		—		—		—		—		937
Real estate:
One-to-four family residential	8,340		—		679		—		—		9,019
Commercial and multifamily residential:
Commercial land	9,012		646		72		—		—		9,730
Income property	18,294		—		—		—		—		18,294
Owner occupied	26,985		—		6,363		—		—		33,348
Real estate construction:
One-to-four family residential:
Land and acquisition	143		—		—		—		—		143
Residential construction	—		—		—		—		—		—
Commercial and multifamily residential:
Income property	474		—		—		—		—		474
Owner occupied	—		—		—		—		—		—
Consumer	9,024		—		378		—		—		9,402
Total	$	80,119	$	1,610	$	8,259	$	—	$	—	89,988
Less:
Valuation discount resulting from acquisition accounting											5,258
ALLL											3,269
PCI loans, net											$	81,461



	Pass		Special Mention		Substandard		Doubtful		Loss		Total
December 31, 2018	(in thousands)
PCI loans:
Commercial business:
Secured	$	8,041	$	—	$	840	$	—	$	—	$	8,881
Unsecured	692		—		99		—		—		791
Real estate:
One-to-four family residential	9,633		—		215		—		—		9,848
Commercial and multifamily residential:
Commercial land	10,363		—		—		—		—		10,363
Income property	19,680		—		—		—		—		19,680
Owner occupied	35,944		—		353		—		—		36,297
Real estate construction:
One-to-four family residential:
Land and acquisition	151		—		2		—		—		153
Commercial and multifamily residential:
Income property	507		—		—		—		—		507
Consumer	9,326		—		439		—		—		9,765
Total	$	94,337	$	—	$	1,948	$	—	$	—	96,285
Less:
Valuation discount resulting from acquisition accounting											6,525
ALLL											3,611
PCI loans, net											$	86,149