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Note 7 - Loans | 9 Months Ended
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Sep. 30, 2016
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 7 . Loans Most of the Company’s business activity is with Asian customers located in Southern and Northern California; New York City, New York; Houston and Dallas, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; Las Vegas, Nevada, and Hong Kong. The Company has no specific industry concentration, and generally its loans are secured by real property or other collateral of the borrowers. Loans are generally expected to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral. The types of loans in the condensed consolidated balance sheets as of September 30, 2016, and December 31, 2015, were as follows:
|  | September 30, 2016 |  |  | December 31, 2015 |
|  | (in thousands) |
Commercial loans |  | $ | 2,248,996 |  |  | $ | 2,316,863 |
Residential mortgage loans |  |  | 2,329,402 |  |  |  | 1,932,355 |
Commercial mortgage loans |  |  | 5,743,991 |  |  |  | 5,301,218 |
Real estate construction loans |  |  | 515,236 |  |  |  | 441,543 |
Equity lines |  |  | 170,022 |  |  |  | 168,980 |
Installment & other loans |  |  | 2,810 |  |  |  | 2,493 |
Gross loans |  | $ | 11,010,457 |  |  | $ | 10,163,452 |
Allowance for loan losses |  |  | (117,942 | ) |  |  | (138,963 | )
Unamortized deferred loan fees |  |  | (5,519 | ) |  |  | (8,262 | )
Total loans, net |  | $ | 10,886,996 |  |  | $ | 10,016,227 |
Loans held for sale |  | $ | 4,750 |  |  | $ | 6,676 |
As of September 30, 2016, recorded investment in impaired loans totaled $130.9 million and was comprised of non-accrual loans of $44.4 million and accruing troubled debt restructured loans (TDRs) of $86.6 million. As of December 31, 2015, recorded investment in impaired loans totaled $133.8 million and was comprised of non-accrual loans of $52.1 million and accruing TDRs of $81.7 million. For impaired loans, the amounts previously charged off represent 7.7% as of September 30, 2016, and 22.4% as of December 31, 2015, of the contractual balances for impaired loans. The following table presents the average balance and interest income recognized related to impaired loans for the periods indicated:
|  | Impaired Loans |
|  | Average Recorded Investment |  |  | Interest Income Recognized |
|  | Three months ended |  |  | Nine months ended |  |  | Three months ended |  |  | Nine months ended |
|  | September 30, |  |  | September 30, |  |  | September 30, |  |  | September 30, |
|  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
|  | (In thousands) |
Commercial loans |  | $ | 28,091 |  |  | $ | 23,894 |  |  | $ | 18,602 |  |  | $ | 24,974 |  |  | $ | 170 |  |  | $ | 170 |  |  | $ | 488 |  |  | $ | 519 |
Real estate construction loans |  |  | 5,869 |  |  |  | 22,392 |  |  |  | 12,005 |  |  |  | 22,056 |  |  |  | 66 |  |  |  | 66 |  |  |  | 196 |  |  |  | 196 |
Commercial mortgage loans |  |  | 81,005 |  |  |  | 97,557 |  |  |  | 86,456 |  |  |  | 104,508 |  |  |  | 776 |  |  |  | 777 |  |  |  | 2,124 |  |  |  | 2,126 |
Residential mortgage loans and equity lines |  |  | 18,256 |  |  |  | 16,506 |  |  |  | 17,456 |  |  |  | 16,934 |  |  |  | 148 |  |  |  | 139 |  |  |  | 401 |  |  |  | 380 |
Total impaired loans |  | $ | 133,221 |  |  | $ | 160,349 |  |  | $ | 134,519 |  |  | $ | 168,472 |  |  | $ | 1,160 |  |  | $ | 1,152 |  |  | $ | 3,209 |  |  | $ | 3,221 |
The following table presents impaired loans and the related allowance for loan losses as of the dates indicated:
|  | Impaired Loans |
|  | September 30, 2016 |  |  | December 31, 2015 |
|  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |  |  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |
|  | (In thousands) |
With no allocated allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 29,794 |  |  | $ | 29,414 |  |  | $ | - |  |  | $ | 15,493 |  |  | $ | 6,721 |  |  | $ | - |
Real estate construction loans |  |  | 5,776 |  |  |  | 5,507 |  |  |  | - |  |  |  | 51,290 |  |  |  | 22,002 |  |  |  | - |
Commercial mortgage loans |  |  | 72,319 |  |  |  | 64,298 |  |  |  | - |  |  |  | 59,954 |  |  |  | 54,625 |  |  |  | - |
Residential mortgage loans and equity lines |  |  | 4,832 |  |  |  | 4,675 |  |  |  | - |  |  |  | 3,233 |  |  |  | 3,026 |  |  |  | - |
Subtotal |  | $ | 112,721 |  |  | $ | 103,894 |  |  | $ | - |  |  | $ | 129,970 |  |  | $ | 86,374 |  |  | $ | - |
With allocated allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 3,315 |  |  | $ | 3,217 |  |  | $ | 1,320 |  |  | $ | 7,757 |  |  | $ | 6,847 |  |  | $ | 530 |
Commercial mortgage loans |  |  | 10,425 |  |  |  | 10,289 |  |  |  | 1,248 |  |  |  | 28,258 |  |  |  | 27,152 |  |  |  | 6,792 |
Residential mortgage loans and equity lines |  |  | 14,637 |  |  |  | 13,514 |  |  |  | 375 |  |  |  | 14,383 |  |  |  | 13,437 |  |  |  | 427 |
Subtotal |  | $ | 28,377 |  |  | $ | 27,020 |  |  | $ | 2,943 |  |  | $ | 50,398 |  |  | $ | 47,436 |  |  | $ | 7,749 |
Total impaired loans |  | $ | 141,098 |  |  | $ | 130,914 |  |  | $ | 2,943 |  |  | $ | 180,368 |  |  | $ | 133,810 |  |  | $ | 7,749 |
The following tables present the aging of the loan portfolio by type as of September 30, 2016, and as of December 31, 2015:
|  | September 30, 2016 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or More Past Due |  |  | Non-accrual Loans |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |
|  | (In thousands) |
Type of Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 45,409 |  |  | $ | 6,807 |  |  | $ | - |  |  | $ | 9,251 |  |  | $ | 61,467 |  |  | $ | 2,187,529 |  |  | $ | 2,248,996 |
Real estate construction loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 5,507 |  |  |  | 5,507 |  |  |  | 509,729 |  |  |  | 515,236 |
Commercial mortgage loans |  |  | 12,949 |  |  |  | 12,205 |  |  |  | - |  |  |  | 21,077 |  |  |  | 46,231 |  |  |  | 5,697,760 |  |  |  | 5,743,991 |
Residential mortgage loans and equity lines |  |  | - |  |  |  | 477 |  |  |  | - |  |  |  | 8,524 |  |  |  | 9,001 |  |  |  | 2,490,423 |  |  |  | 2,499,424 |
Installment and other loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,810 |  |  |  | 2,810 |
Total loans |  | $ | 58,358 |  |  | $ | 19,489 |  |  | $ | - |  |  | $ | 44,359 |  |  | $ | 122,206 |  |  | $ | 10,888,251 |  |  | $ | 11,010,457 |
|  | December 31, 2015 |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or More Past Due |  |  | Non-accrual Loans |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |
|  | (In thousands) |
Type of Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 8,367 |  |  | $ | 221 |  |  | $ | - |  |  | $ | 3,545 |  |  | $ | 12,133 |  |  | $ | 2,304,730 |  |  | $ | 2,316,863 |
Real estate construction loans |  |  | 7,285 |  |  |  | - |  |  |  | - |  |  |  | 16,306 |  |  |  | 23,591 |  |  |  | 417,952 |  |  |  | 441,543 |
Commercial mortgage loans |  |  | 2,243 |  |  |  | 2,223 |  |  |  | - |  |  |  | 25,231 |  |  |  | 29,697 |  |  |  | 5,271,521 |  |  |  | 5,301,218 |
Residential mortgage loans and equity lines |  |  | 4,959 |  |  |  | 1,038 |  |  |  | - |  |  |  | 7,048 |  |  |  | 13,045 |  |  |  | 2,088,290 |  |  |  | 2,101,335 |
Installment and other loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,493 |  |  |  | 2,493 |
Total loans |  | $ | 22,854 |  |  | $ | 3,482 |  |  | $ | - |  |  | $ | 52,130 |  |  | $ | 78,466 |  |  | $ | 10,084,986 |  |  | $ | 10,163,452 |
The determination of the amount of the allowance for loan losses for impaired loans is based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for loan losses. The nature of the process by which the Bank determines the appropriate allowance for loan losses requires the exercise of considerable judgment. This allowance evaluation process is also applied to troubled debt restructurings since they are considered to be impaired loans. A troubled debt restructuring is a formal modification of the terms of a loan when the lender, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower it would not otherwise consider. The concessions may be granted in various forms, including a change in the stated interest rate, a reduction in the loan balance or accrued interest, or an extension of the maturity date that causes significant delay in payment. TDRs on accrual status are comprised of the loans that have, pursuant to the Bank’s policy, performed under the restructured terms and have demonstrated sustained performance under the modified terms for six months before being returned to accrual status. The sustained performance considered by management pursuant to its policy includes the periods prior to the modification if the prior performance met or exceeded the modified terms. This would include cash paid by the borrower prior to the restructure to set up interest reserves. As of September 30, 2016, accruing TDRs were $86.6 million and non-accrual TDRs were $20.9 million compared to accruing TDRs of $81.7 million and non-accrual TDRs of $39.9 million as of December 31, 2015. The Company allocated specific reserves of $1.3 million to accruing TDRs and $0.3 million to non-accrual TDRs as of September 30, 2016, and $2.0 million to accruing TDRs and $5.4 million to non-accrual TDRs as of December 31, 2015. The following tables present TDRs that were modified during the three and nine months ended September 30, 2016 and 2015, their specific reserve s as of September 30, 2016 and 2015 and charge-off s for the three and nine months ended September 30, 2016 and 2015:
|  | Three months ended September 30, 2016 |  |  | September 30, 2016 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (Dollars in thousands) |  |  |  |  |
Commercial loans |  |  | 7 |  |  | $ | 18,258 |  |  | $ | 18,258 |  |  | $ | - |  |  | $ | 208 |
Commercial mortgage loans |  |  | 1 |  |  |  | 738 |  |  |  | 738 |  |  |  | - |  |  |  | - |
Total |  |  | 8 |  |  | $ | 18,996 |  |  | $ | 18,996 |  |  | $ | - |  |  | $ | 208 |
|  | Three months ended September 30, 2015 |  |  | September 30, 2015 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (Dollars in thousands) |  |  |  |  |
Commercial loans |  |  | 2 |  |  | $ | 306 |  |  | $ | 306 |  |  | $ | - |  |  | $ | 1 |
Commercial mortgage loans |  |  | 15 |  |  |  | 1,918 |  |  |  | 1,918 |  |  |  | - |  |  |  | - |
Total |  |  | 17 |  |  | $ | 2,224 |  |  | $ | 2,224 |  |  | $ | - |  |  | $ | 1 |
|  | Nine months ended September 30, 2016 |  |  | September 30, 2016 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (Dollars in thousands) |  |  |  |  |
Commercial loans |  |  | 11 |  |  | $ | 23,102 |  |  | $ | 23,102 |  |  | $ | - |  |  | $ | 222 |
Commercial mortgage loans |  |  | 1 |  |  |  | 738 |  |  |  | 738 |  |  |  | - |  |  |  | - |
Residential mortgage loans and equity lines |  |  | 2 |  |  |  | 367 |  |  |  | 367 |  |  |  | - |  |  |  | - |
Total |  |  | 14 |  |  | $ | 24,207 |  |  | $ | 24,207 |  |  | $ | - |  |  | $ | 222 |
|  | Nine months ended September 30, 2015 |  |  | September 30, 2015 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (Dollars in thousands) |  |  |  |  |
Commercial loans |  |  | 3 |  |  | $ | 1,156 |  |  | $ | 1,156 |  |  | $ | - |  |  | $ | 1 |
Commercial mortgage loans |  |  | 19 |  |  |  | 16,329 |  |  |  | 16,329 |  |  |  | - |  |  |  | 38 |
Residential mortgage loans and equity lines |  |  | 5 |  |  |  | 1,522 |  |  |  | 1,374 |  |  |  | 148 |  |  |  | 45 |
Total |  |  | 27 |  |  | $ | 19,007 |  |  | $ | 18,859 |  |  | $ | 148 |  |  | $ | 84 |
Modifications of the loan terms during the first nine months of 2016 were in the form of changes in the stated interest rate, extensions of maturity dates, and/or reductions in monthly payment amounts. The length of time for which modifications involving a reduction of the stated interest rate or changes in payment terms that were documented ranged from three to ten months from the modification date. We expect that the TDRs on accruing status as of September 30, 2016, which were all performing in accordance with their restructured terms, will continue to comply with the restructured terms because of the reduced principal or interest payments on these loans. A summary of TDRs by type of concession and by type of loan, as of September 30, 2016, and December 31, 2015, is shown below:
|  | September 30, 2016 |
Accruing TDRs |  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |  |  |  |  |
Commercial loans |  | $ | 22,019 |  |  | $ | - |  |  | $ | 1,360 |  |  | $ | 23,379 |
Commercial mortgage loans |  |  | 26,835 |  |  |  | 5,986 |  |  |  | 20,690 |  |  |  | 53,511 |
Residential mortgage loans |  |  | 5,048 |  |  |  | 989 |  |  |  | 3,628 |  |  |  | 9,665 |
Total accruing TDRs |  | $ | 53,902 |  |  | $ | 6,975 |  |  | $ | 25,678 |  |  | $ | 86,555 |
|  | September 30, 2016 |
Non-accrual TDRs |  | Payment Deferral |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 3,477 |  |  | $ | 90 |  |  | $ | 3,567 |
Commercial mortgage loans |  |  | 1,508 |  |  |  | 15,260 |  |  |  | 16,768 |
Residential mortgage loans |  |  | 364 |  |  |  | 171 |  |  |  | 535 |
Total non-accrual TDRs |  | $ | 5,349 |  |  | $ | 15,521 |  |  | $ | 20,870 |
|  | December 31, 2015 |
Accruing TDRs |  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 8,298 |  |  | $ | - |  |  | $ | 1,726 |  |  | $ | 10,024 |
Real estate construction loans |  |  | - |  |  |  | - |  |  |  | 5,696 |  |  |  | 5,696 |
Commercial mortgage loans |  |  | 16,701 |  |  |  | 6,045 |  |  |  | 33,800 |  |  |  | 56,546 |
Residential mortgage loans |  |  | 5,201 |  |  |  | 999 |  |  |  | 3,214 |  |  |  | 9,414 |
Total accruing TDRs |  | $ | 30,200 |  |  | $ | 7,044 |  |  | $ | 44,436 |  |  | $ | 81,680 |
|  | December 31, 2015 |
Non-accrual TDRs |  | Payment Deferral |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 1,033 |  |  | $ | 90 |  |  | $ | 1,123 |
Real estate construction loans |  |  | 9,981 |  |  |  | 5,825 |  |  |  | 15,806 |
Commercial mortgage loans |  |  | 1,544 |  |  |  | 20,362 |  |  |  | 21,906 |
Residential mortgage loans |  |  | 388 |  |  |  | 700 |  |  |  | 1,088 |
Total non-accrual TDRs |  | $ | 12,946 |  |  | $ | 26,977 |  |  | $ | 39,923 |
The activity within our TDRs for the periods indicated are shown below:
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
Accruing TDRs |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
|  | (In thousands) |
Beginning balance |  | $ | 74,708 |  |  | $ | 100,011 |  |  | $ | 81,680 |  |  | $ | 104,355 |
New restructurings |  |  | 18,347 |  |  |  | 427 |  |  |  | 20,412 |  |  |  | 16,853 |
Restructured loans restored to accrual status |  |  | - |  |  |  | 723 |  |  |  | 10,303 |  |  |  | 723 |
Charge-offs |  |  | - |  |  |  | - |  |  |  | - |  |  |  | (148 | )
Payments |  |  | (6,500 | ) |  |  | (11,280 | ) |  |  | (9,816 | ) |  |  | (21,714 | )
Restructured loans placed on non-accrual status |  |  | - |  |  |  | - |  |  |  | (1,138 | ) |  |  | (10,188 | )
Expiration of loan concession upon renewal |  |  | - |  |  |  | - |  |  |  | (14,886 | ) |  |  | - |
Ending balance |  | $ | 86,555 |  |  | $ | 89,881 |  |  | $ | 86,555 |  |  | $ | 89,881 |
|  | Three months ended September 30, |  |  | Nine months ended September 30, |
Non-accrual TDRs |  | 2016 |  |  | 2015 |  |  | 2016 |  |  | 2015 |
|  | (In thousands) |
Beginning balance |  | $ | 25,442 |  |  | $ | 42,595 |  |  | $ | 39,923 |  |  | $ | 41,618 |
New restructurings |  |  | 649 |  |  |  | 1,796 |  |  |  | 3,794 |  |  |  | 2,006 |
Restructured loans placed on non-accrual status |  |  | - |  |  |  | - |  |  |  | 1,138 |  |  |  | 10,188 |
Charge-offs |  |  | (3,407 | ) |  |  | (3 | ) |  |  | (4,352 | ) |  |  | (3,246 | )
Payments |  |  | (1,814 | ) |  |  | (1,859 | ) |  |  | (9,330 | ) |  |  | (8,037 | )
Restructured loans restored to accrual status |  |  | - |  |  |  | (723 | ) |  |  | (10,303 | ) |  |  | (723 | )
Ending balance |  | $ | 20,870 |  |  | $ | 41,806 |  |  | $ | 20,870 |  |  | $ | 41,806 |
A loan is considered to be in payment default once it is 60 to 90 days contractually past due under the modified terms. The Company did not have any loans that were modified as a TDR during the previous twelve months and which subsequently defaulted as of September 30, 2016. Under the Company’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty. As of September 30, 2016, there were no commitments to lend additional funds to those borrowers whose loans had been restructured, were considered impaired, or were on non-accrual status. As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:
| ● | Pass/Watch – These loans range from minimal credit risk to lower than average, but still acceptable, credit risk.
| ● | Special Mention – Borrower is fundamentally sound and loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.
| ● | Substandard – These loans are inadequately protected by current sound net worth, paying capacity, or collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.
| ● | Doubtful – The possibility of loss is extremely high, but due to identifiable and important pending events (which may strengthen the loan), a loss classification is deferred until the situation is better defined.
| ● | Loss – These loans are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.
The following tables present the loan portfolio by risk rating as of September 30, 2016, and as of December 31, 2015:
|  | September 30, 2016 |
|  | Pass/Watch |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 2,027,815 |  |  | $ | 133,858 |  |  | $ | 86,806 |  |  | $ | 517 |  |  | $ | 2,248,996 |
Real estate construction loans |  |  | 489,473 |  |  |  | 20,256 |  |  |  | 5,507 |  |  |  | - |  |  |  | 515,236 |
Commercial mortgage loans |  |  | 5,391,701 |  |  |  | 219,081 |  |  |  | 133,209 |  |  |  | - |  |  |  | 5,743,991 |
Residential mortgage loans and equity lines |  |  | 2,488,495 |  |  |  | 391 |  |  |  | 10,538 |  |  |  | - |  |  |  | 2,499,424 |
Installment and other loans |  |  | 2,810 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,810 |
Total gross loans |  | $ | 10,400,294 |  |  | $ | 373,586 |  |  | $ | 236,060 |  |  | $ | 517 |  |  | $ | 11,010,457 |
Loans held for sale |  | $ | - |  |  | $ | - |  |  | $ | - |  |  | $ | 4,750 |  |  | $ | 4,750 |
|  | December 31, 2015 |
|  | Pass/Watch |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 2,143,270 |  |  | $ | 110,338 |  |  | $ | 61,297 |  |  | $ | 1,958 |  |  | $ | 2,316,863 |
Real estate construction loans |  |  | 413,765 |  |  |  | 5,776 |  |  |  | 21,502 |  |  |  | 500 |  |  |  | 441,543 |
Commercial mortgage loans |  |  | 5,018,199 |  |  |  | 155,553 |  |  |  | 118,196 |  |  |  | 9,270 |  |  |  | 5,301,218 |
Residential mortgage loans and equity lines |  |  | 2,091,434 |  |  |  | 399 |  |  |  | 9,502 |  |  |  | - |  |  |  | 2,101,335 |
Installment and other loans |  |  | 2,493 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 2,493 |
Total gross loans |  | $ | 9,669,161 |  |  | $ | 272,066 |  |  | $ | 210,497 |  |  | $ | 11,728 |  |  | $ | 10,163,452 |
Loans held for sale |  | $ | 732 |  |  | $ | - |  |  | $ | 5,944 |  |  | $ | - |  |  | $ | 6,676 |
The allowance for loan losses and the reserve for off-balance sheet credit commitments are significant estimates that can and do change based on management’s process in analyzing the loan portfolio and on management’s assumptions about specific borrowers, underlying collateral, and applicable economic and environmental conditions, among other factors. The following table presents the balance in the allowance for loan losses by portfolio segment and based on impairment method as of September 30, 2016, and as of December 31, 2015:
|  | Commercial Loans |  |  | Real Estate Construction Loans |  |  | Commercial Mortgage Loans |  |  | Residential Mortgage Loans and Equity Lines |  |  | Installment and Other Loans |  |  | Total |
|  | (In thousands) |
September 30, 2016 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 1,320 |  |  | $ | - |  |  | $ | 1,248 |  |  | $ | 375 |  |  | $ | - |  |  | $ | 2,943 |
Balance |  | $ | 32,631 |  |  | $ | 5,507 |  |  | $ | 74,587 |  |  | $ | 18,189 |  |  | $ | - |  |  | $ | 130,914 |
Loans collectively evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 52,379 |  |  | $ | 9,245 |  |  | $ | 43,685 |  |  | $ | 9,682 |  |  | $ | 8 |  |  | $ | 114,999 |
Balance |  | $ | 2,216,365 |  |  | $ | 509,729 |  |  | $ | 5,669,404 |  |  | $ | 2,481,235 |  |  | $ | 2,810 |  |  | $ | 10,879,543 |
Total allowance |  | $ | 53,699 |  |  | $ | 9,245 |  |  | $ | 44,933 |  |  | $ | 10,057 |  |  | $ | 8 |  |  | $ | 117,942 |
Total balance |  | $ | 2,248,996 |  |  | $ | 515,236 |  |  | $ | 5,743,991 |  |  | $ | 2,499,424 |  |  | $ | 2,810 |  |  | $ | 11,010,457 |
December 31, 2015 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 530 |  |  | $ | - |  |  | $ | 6,792 |  |  | $ | 427 |  |  | $ | - |  |  | $ | 7,749 |
Balance |  | $ | 13,568 |  |  | $ | 22,002 |  |  | $ | 81,776 |  |  | $ | 16,464 |  |  | $ | - |  |  | $ | 133,810 |
Loans collectively evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 55,669 |  |  | $ | 22,170 |  |  | $ | 42,648 |  |  | $ | 10,718 |  |  | $ | 9 |  |  | $ | 131,214 |
Balance |  | $ | 2,303,295 |  |  | $ | 419,541 |  |  | $ | 5,219,442 |  |  | $ | 2,084,871 |  |  | $ | 2,493 |  |  | $ | 10,029,642 |
Total allowance |  | $ | 56,199 |  |  | $ | 22,170 |  |  | $ | 49,440 |  |  | $ | 11,145 |  |  | $ | 9 |  |  | $ | 138,963 |
Total balance |  | $ | 2,316,863 |  |  | $ | 441,543 |  |  | $ | 5,301,218 |  |  | $ | 2,101,335 |  |  | $ | 2,493 |  |  | $ | 10,163,452 |
The following tables detail activity in the allowance for loan losses by portfolio segment for the three months and nine months ended September 30, 2016, and September 30, 2015. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
Three months ended September 30, 2016 and 2015 |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Residential |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | Mortgage Loans |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | and Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
June 30, 2016 Ending Balance |  | $ | 50,590 |  |  | $ | 10,753 |  |  | $ | 46,090 |  |  | $ | 15,503 |  |  | $ | 12 |  |  |  | 122,948 |
Provision/(credit) for possible credit losses |  |  | 4,380 |  |  |  | (2,056 | ) |  |  | 3,132 |  |  |  | (5,452 | ) |  |  | (4 | ) |  |  | - |
Charge-offs |  |  | (3,277 | ) |  |  | - |  |  |  | (4,626 | ) |  |  | - |  |  |  | - |  |  |  | (7,903 | )
Recoveries |  |  | 2,006 |  |  |  | 548 |  |  |  | 337 |  |  |  | 6 |  |  |  | - |  |  |  | 2,897 |
Net (charge-offs)/recoveries |  |  | (1,271 | ) |  |  | 548 |  |  |  | (4,289 | ) |  |  | 6 |  |  |  | - |  |  |  | (5,006 | )
September 30, 2016 Ending Balance |  | $ | 53,699 |  |  | $ | 9,245 |  |  | $ | 44,933 |  |  | $ | 10,057 |  |  | $ | 8 |  |  | $ | 117,942 |
June 30, 2015 Ending Balance |  | $ | 47,540 |  |  | $ | 26,304 |  |  | $ | 67,245 |  |  | $ | 12,323 |  |  | $ | 25 |  |  | $ | 153,437 |
Provision/(credit) for possible credit losses |  |  | 10,040 |  |  |  | 121 |  |  |  | (11,762 | ) |  |  | 353 |  |  |  | (2 | ) |  |  | (1,250 | )
Charge-offs |  |  | (3,310 | ) |  |  | - |  |  |  | (97 | ) |  |  | - |  |  |  | - |  |  |  | (3,407 | )
Recoveries |  |  | 607 |  |  |  | 41 |  |  |  | 647 |  |  |  | 1 |  |  |  | - |  |  |  | 1,296 |
Net (charge-offs)/recoveries |  |  | (2,703 | ) |  |  | 41 |  |  |  | 550 |  |  |  | 1 |  |  |  | - |  |  |  | (2,111 | )
September 30, 2015 Ending Balance |  | $ | 54,877 |  |  | $ | 26,466 |  |  | $ | 56,033 |  |  | $ | 12,677 |  |  | $ | 23 |  |  | $ | 150,076 |
Nine months ended September 30, 2016 and 2015 |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Residential |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | Mortgage Loans |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | and Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
2016 Beginning Balance |  | $ | 56,199 |  |  | $ | 22,170 |  |  | $ | 49,440 |  |  | $ | 11,145 |  |  | $ | 9 |  |  | $ | 138,963 |
Provision/(credit) for possible credit losses |  |  | 5,815 |  |  |  | (20,796 | ) |  |  | 295 |  |  |  | (963 | ) |  |  | (1 | ) |  |  | (15,650 | )
Charge-offs |  |  | (12,035 | ) |  |  | - |  |  |  | (5,681 | ) |  |  | (149 | ) |  |  | - |  |  |  | (17,865 | )
Recoveries |  |  | 3,720 |  |  |  | 7,871 |  |  |  | 879 |  |  |  | 24 |  |  |  |  |  |  |  | 12,494 |
Net (charge-offs)/recoveries |  |  | (8,315 | ) |  |  | 7,871 |  |  |  | (4,802 | ) |  |  | (125 | ) |  |  | - |  |  |  | (5,371 | )
September 30, 2016 Ending Balance |  | $ | 53,699 |  |  | $ | 9,245 |  |  | $ | 44,933 |  |  | $ | 10,057 |  |  | $ | 8 |  |  | $ | 117,942 |
Reserve for impaired loans |  | $ | 1,320 |  |  | $ | - |  |  | $ | 1,248 |  |  | $ | 375 |  |  | $ | - |  |  | $ | 2,943 |
Reserve for non-impaired loans |  | $ | 52,379 |  |  | $ | 9,245 |  |  | $ | 43,685 |  |  | $ | 9,682 |  |  | $ | 8 |  |  | $ | 114,999 |
Reserve for off-balance sheet credit commitments |  | $ | 2,112 |  |  | $ | - |  |  | $ | 35 |  |  | $ | 80 |  |  | $ | 2 |  |  | $ | 2,229 |
2015 Beginning Balance |  | $ | 47,501 |  |  | $ | 27,652 |  |  | $ | 74,673 |  |  | $ | 11,578 |  |  | $ | 16 |  |  | $ | 161,420 |
Provision/(credit) for possible credit losses |  |  | 11,045 |  |  |  | (1,349 | ) |  |  | (19,342 | ) |  |  | 1,239 |  |  |  | 7 |  |  |  | (8,400 | )
Charge-offs |  |  | (6,754 | ) |  |  | - |  |  |  | (3,613 | ) |  |  | (161 | ) |  |  | - |  |  |  | (10,528 | )
Recoveries |  |  | 3,085 |  |  |  | 163 |  |  |  | 4,315 |  |  |  | 21 |  |  |  | - |  |  |  | 7,584 |
Net (charge-offs)/recoveries |  |  | (3,669 | ) |  |  | 163 |  |  |  | 702 |  |  |  | (140 | ) |  |  | - |  |  |  | (2,944 | )
September 30, 2015 Ending Balance |  | $ | 54,877 |  |  | $ | 26,466 |  |  | $ | 56,033 |  |  | $ | 12,677 |  |  | $ | 23 |  |  | $ | 150,076 |
Reserve for impaired loans |  | $ | 7,561 |  |  | $ | - |  |  | $ | 6,389 |  |  | $ | 373 |  |  | $ | - |  |  | $ | 14,323 |
Reserve for non-impaired loans |  | $ | 47,316 |  |  | $ | 26,466 |  |  | $ | 49,644 |  |  | $ | 12,304 |  |  | $ | 23 |  |  | $ | 135,753 |
Reserve for off-balance sheet credit commitments |  | $ | 703 |  |  | $ | 477 |  |  | $ | 202 |  |  | $ | 37 |  |  | $ | 1 |  |  | $ | 1,420 |

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