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Note 8 - Loans | 9 Months Ended
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Sep. 30, 2019
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] | 8.Loans Most of the Company’s business activities are with customers located in the high-density Asian-populated areas of Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; and Las Vegas, Nevada. The Company also has loan customers in Hong Kong. The Company has no specific industry concentration, and generally its loans are secured by real property or other collateral of the borrowers. The Company generally expects loans 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 Company’s Condensed Consolidated Balance Sheets as of September 30, 2019, and December 31, 2018, were as follows:
|  | September 30, 2019 |  |  | December 31, 2018 |
|  | (In thousands) |
Commercial loans |  | $ | 2,668,061 |  |  | $ | 2,741,965 |
Residential mortgage loans |  |  | 4,010,739 |  |  |  | 3,693,853 |
Commercial mortgage loans |  |  | 7,135,599 |  |  |  | 6,724,200 |
Equity lines |  |  | 315,252 |  |  |  | 249,967 |
Real estate construction loans |  |  | 593,816 |  |  |  | 581,454 |
Installment and other loans |  |  | 5,087 |  |  |  | 4,349 |
Gross loans |  | $ | 14,728,554 |  |  | $ | 13,995,788 |
Allowance for loan losses |  |  | (125,908 | ) |  |  | (122,391 | )
Unamortized deferred loan fees, net |  |  | (1,081 | ) |  |  | (1,565 | )
Total loans, net |  | $ | 14,601,565 |  |  | $ | 13,871,832 |
Loans held for sale |  | $ | 36,778 |  |  | $ | — |
As of September 30, 2019, recorded investment in impaired loans totaled $88.8 million and was comprised of non-accrual loans of $47.2 million and accruing troubled debt restructured loans (“TDRs”) of $41.6 million. As of December 31, 2018, recorded investment in impaired loans totaled $106.9 million and was comprised of non-accrual loans of $41.8 million and accruing TDRs of $65.1 million. For impaired loans, the amounts previously charged off represent 1.9% and 9.3% of the contractual balances for impaired loans as of September 30, 2019 and December 31, 2018, respectively. The following table presents the average recorded investment and interest income recognized on impaired loans for the periods indicated:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
|  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |  |  | Average Recorded Investment |  |  | Interest Income Recognized |
|  | (In thousands) |
Commercial loans |  | $ | 38,659 |  |  | $ | 208 |  |  | $ | 48,772 |  |  | $ | 461 |  |  | $ | 41,132 |  |  | $ | 705 |  |  | $ | 46,920 |  |  | $ | 1,152 |
Real estate construction loans |  |  | 4,662 |  |  |  | — |  |  |  | 5,980 |  |  |  | — |  |  |  | 4,734 |  |  |  | — |  |  |  | 7,490 |  |  |  | — |
Commercial mortgage loans |  |  | 40,699 |  |  |  | 332 |  |  |  | 55,375 |  |  |  | 576 |  |  |  | 51,323 |  |  |  | 1,034 |  |  |  | 59,314 |  |  |  | 1,757 |
Residential mortgage loans and equity lines |  |  | 13,133 |  |  |  | 78 |  |  |  | 13,724 |  |  |  | 108 |  |  |  | 13,126 |  |  |  | 237 |  |  |  | 14,032 |  |  |  | 279 |
Total impaired loans |  | $ | 97,153 |  |  | $ | 618 |  |  | $ | 123,851 |  |  | $ | 1,145 |  |  | $ | 110,315 |  |  | $ | 1,976 |  |  | $ | 127,756 |  |  | $ | 3,188 |
The following table presents impaired loans and the related allowance for loan losses as of the dates indicated:
|  | September 30, 2019 |  |  | December 31, 2018 |
|  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |  |  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |
|  | (In thousands) |
With no allocated allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 24,711 |  |  | $ | 20,492 |  |  | $ | — |  |  | $ | 32,015 |  |  | $ | 30,368 |  |  | $ | — |
Real estate construction loans |  |  | 5,776 |  |  |  | 4,629 |  |  |  | — |  |  |  | 5,776 |  |  |  | 4,873 |  |  |  | — |
Commercial mortgage loans |  |  | 11,663 |  |  |  | 11,517 |  |  |  | — |  |  |  | 34,129 |  |  |  | 24,409 |  |  |  | — |
Residential mortgage loans and equity lines |  |  | 6,808 |  |  |  | 6,770 |  |  |  | — |  |  |  | 5,685 |  |  |  | 5,665 |  |  |  | — |
Subtotal |  | $ | 48,958 |  |  | $ | 43,408 |  |  | $ | — |  |  | $ | 77,605 |  |  | $ | 65,315 |  |  | $ | — |
With allocated allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 13,251 |  |  | $ | 13,234 |  |  | $ | 744 |  |  | $ | 6,653 |  |  | $ | 6,570 |  |  | $ | 1,837 |
Commercial mortgage loans |  |  | 26,356 |  |  |  | 26,288 |  |  |  | 536 |  |  |  | 27,099 |  |  |  | 27,063 |  |  |  | 877 |
Residential mortgage loans and equity lines |  |  | 7,011 |  |  |  | 5,917 |  |  |  | 221 |  |  |  | 8,934 |  |  |  | 7,938 |  |  |  | 1,088 |
Subtotal |  | $ | 46,618 |  |  | $ | 45,439 |  |  | $ | 1,501 |  |  | $ | 42,686 |  |  | $ | 41,571 |  |  | $ | 3,802 |
Total impaired loans |  | $ | 95,576 |  |  | $ | 88,847 |  |  | $ | 1,501 |  |  | $ | 120,291 |  |  | $ | 106,886 |  |  | $ | 3,802 |
The following tables present the aging of the loan portfolio by type as of September 30, 2019, and as of December 31, 2018:
|  | September 30, 2019 |
|  | 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) |
Commercial loans |  | $ | 29,905 |  |  | $ | 8,736 |  |  | $ | — |  |  | $ | 22,970 |  |  | $ | 61,611 |  |  | $ | 2,606,450 |  |  | $ | 2,668,061 |
Real estate construction loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,629 |  |  |  | 4,629 |  |  |  | 589,187 |  |  |  | 593,816 |
Commercial mortgage loans |  |  | 2,926 |  |  |  | 3,687 |  |  |  | 683 |  |  |  | 12,330 |  |  |  | 19,626 |  |  |  | 7,115,973 |  |  |  | 7,135,599 |
Residential mortgage loans and equity lines |  |  | 286 |  |  |  | — |  |  |  | — |  |  |  | 7,271 |  |  |  | 7,557 |  |  |  | 4,318,434 |  |  |  | 4,325,991 |
Installment and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,087 |  |  |  | 5,087 |
Total loans |  | $ | 33,117 |  |  | $ | 12,423 |  |  | $ | 683 |  |  | $ | 47,200 |  |  | $ | 93,423 |  |  | $ | 14,635,131 |  |  | $ | 14,728,554 |
|  | December 31, 2018 |
|  | 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) |
Commercial loans |  | $ | 25,494 |  |  | $ | 2,454 |  |  | $ | 514 |  |  | $ | 18,805 |  |  | $ | 47,267 |  |  | $ | 2,694,698 |  |  | $ | 2,741,965 |
Real estate construction loans |  |  | — |  |  |  | 3,156 |  |  |  | — |  |  |  | 4,872 |  |  |  | 8,028 |  |  |  | 573,426 |  |  |  | 581,454 |
Commercial mortgage loans |  |  | 10,797 |  |  |  | 8,545 |  |  |  | 3,259 |  |  |  | 10,611 |  |  |  | 33,212 |  |  |  | 6,690,988 |  |  |  | 6,724,200 |
Residential mortgage loans and equity lines |  |  | 9,687 |  |  |  | 336 |  |  |  | — |  |  |  | 7,527 |  |  |  | 17,550 |  |  |  | 3,926,270 |  |  |  | 3,943,820 |
Installment and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,349 |  |  |  | 4,349 |
Total loans |  | $ | 45,978 |  |  | $ | 14,491 |  |  | $ | 3,773 |  |  | $ | 41,815 |  |  | $ | 106,057 |  |  | $ | 13,889,731 |  |  | $ | 13,995,788 |
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 TDRs since they are considered to be impaired loans. 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, market and environmental conditions, among other factors. A TDR 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. 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, 2019, accruing TDRs were $41.6 million and non-accrual TDRs were $19.8 million compared to accruing TDRs of $65.1 million and non-accrual TDRs of $24.2 million as of December 31, 2018. The Company allocated specific reserves of $1.2 million to accruing TDRs and $141 thousand to non-accrual TDRs as of September 30, 2019, and $1.5 million to accruing TDRs and $826 thousand to non-accrual TDRs as of December 31, 2018. The following tables set forth TDRs that were modified during the three and nine months ended September 30, 2019 and 2018, their specific reserves as of September 30, 2019 and 2018, and charge-offs for the three and nine months ended September 30, 2019 and 2018:
|  | Three Months Ended September 30, 2019 |  |  | September 30, 2019 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (In thousands) |
Commercial loans |  |  | 3 |  |  | $ | 7,585 |  |  | $ | 6,165 |  |  | $ | — |  |  | $ | 89 |
Total |  |  | 3 |  |  | $ | 7,585 |  |  | $ | 6,165 |  |  | $ | — |  |  | $ | 89 |
|  | Three Months Ended September 30, 2018 |  |  | September 30, 2018 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (In thousands) |
Commercial loans |  |  | 3 |  |  | $ | 4,621 |  |  | $ | 4,621 |  |  | $ | — |  |  | $ | 2,467 |
Commercial mortgage loans |  |  | 1 |  |  |  | 339 |  |  |  | 339 |  |  |  | — |  |  |  | — |
Residential mortgage loans and equity lines |  |  | 2 |  |  |  | 413 |  |  |  | 413 |  |  |  | — |  |  |  | 16 |
Total |  |  | 6 |  |  | $ | 5,373 |  |  | $ | 5,373 |  |  | $ | — |  |  | $ | 2,483 |
|  | Nine Months Ended September 30, 2019 |  |  | September 30, 2019 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (In thousands) |
Commercial loans |  |  | 23 |  |  | $ | 25,937 |  |  | $ | 10,814 |  |  | $ | — |  |  | $ | 125 |
Total |  |  | 23 |  |  | $ | 25,937 |  |  | $ | 10,814 |  |  | $ | — |  |  | $ | 125 |
|  | Nine Months Ended September 30, 2018 |  |  | September 30, 2018 |
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Charge-offs |  |  | Specific Reserve |
|  | (In thousands) |
Commercial loans |  |  | 21 |  |  | $ | 12,212 |  |  | $ | 12,212 |  |  | $ | — |  |  | $ | 2,493 |
Commercial mortgage loans |  |  | 7 |  |  |  | 14,626 |  |  |  | 14,626 |  |  |  | — |  |  |  | 119 |
Residential mortgage loans and equity lines |  |  | 4 |  |  |  | 1,213 |  |  |  | 1,213 |  |  |  | — |  |  |  | 24 |
Total |  |  | 32 |  |  | $ | 28,051 |  |  | $ | 28,051 |  |  | $ | — |  |  | $ | 2,636 |
Modifications of the loan terms in the nine months ended September 30, 2019 were in the form of extensions of maturity dates, which ranged generally from three to twelve months from the modification date. We expect that the TDRs on accruing status as of September 30, 2019, 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, 2019, and December 31, 2018, is set forth in the table below:
|  | September 30, 2019 |
|  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Accruing TDRs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 10,756 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,756 |
Commercial mortgage loans |  |  | 782 |  |  |  | 5,757 |  |  |  | 18,936 |  |  |  | 25,475 |
Residential mortgage loans |  |  | 2,931 |  |  |  | 319 |  |  |  | 2,166 |  |  |  | 5,416 |
Total accruing TDRs |  | $ | 14,469 |  |  | $ | 6,076 |  |  | $ | 21,102 |  |  | $ | 41,647 |
|  | September 30, 2019 |
|  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Non-accrual TDRs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 18,057 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,057 |
Residential mortgage loans |  |  | 1,629 |  |  |  | — |  |  |  | 101 |  |  |  | 1,730 |
Total non-accrual TDRs |  | $ | 19,686 |  |  | $ | — |  |  | $ | 101 |  |  | $ | 19,787 |
|  | December 31, 2018 |
|  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Accruing TDRs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 18,135 |  |  | $ | — |  |  | $ | — |  |  | $ | 18,135 |
Commercial mortgage loans |  |  | 14,022 |  |  |  | 7,420 |  |  |  | 19,418 |  |  |  | 40,860 |
Residential mortgage loans |  |  | 3,353 |  |  |  | 327 |  |  |  | 2,396 |  |  |  | 6,076 |
Total accruing TDRs |  | $ | 35,510 |  |  | $ | 7,747 |  |  | $ | 21,814 |  |  | $ | 65,071 |
|  | December 31, 2018 |
|  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Non-accrual TDRs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 13,771 |  |  | $ | — |  |  | $ | — |  |  | $ | 13,771 |
Commercial mortgage loans |  |  | 3,682 |  |  |  | — |  |  |  | 4,884 |  |  |  | 8,566 |
Residential mortgage loans |  |  | 1,741 |  |  |  | — |  |  |  | 111 |  |  |  | 1,852 |
Total non-accrual TDRs |  | $ | 19,194 |  |  | $ | — |  |  | $ | 4,995 |  |  | $ | 24,189 |
The activity within TDRs for the periods indicated is set forth below:
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
|  | (In thousands) |
Accruing TDRs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 64,898 |  |  | $ | 84,487 |  |  | $ | 65,071 |  |  | $ | 68,566 |
New restructurings |  |  | 240 |  |  |  | 2,589 |  |  |  | 15,432 |  |  |  | 25,036 |
Restructured loans restored to accrual status |  |  | — |  |  |  | 577 |  |  |  | — |  |  |  | 2,895 |
Charge-offs |  |  | (1,341 | ) |  |  | — |  |  |  | (1,341 | ) |  |  | — |
Payments |  |  | (22,150 | ) |  |  | (13,055 | ) |  |  | (36,219 | ) |  |  | (19,801 | )
Restructured loans placed on non-accrual status |  |  | — |  |  |  | — |  |  |  | (1,296 | ) |  |  | (2,098 | )
Ending balance |  | $ | 41,647 |  |  | $ | 74,598 |  |  | $ | 41,647 |  |  | $ | 74,598 |
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2019 |  |  | 2018 |  |  | 2019 |  |  | 2018 |
|  | (In thousands) |
Non-accrual TDRs |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning balance |  | $ | 22,457 |  |  | $ | 30,347 |  |  | $ | 24,189 |  |  | $ | 33,415 |
New restructurings |  |  | 7,345 |  |  |  | 2,784 |  |  |  | 10,505 |  |  |  | 3,015 |
Restructured loans placed on non-accrual status |  |  | — |  |  |  | — |  |  |  | 1,296 |  |  |  | 2,098 |
Charge-offs |  |  | (2,389 | ) |  |  | — |  |  |  | (3,607 | ) |  |  | (161 | )
Payments |  |  | (7,626 | ) |  |  | (4,836 | ) |  |  | (12,596 | ) |  |  | (7,754 | )
Restructured loans restored to accrual status |  |  | — |  |  |  | (577 | ) |  |  | — |  |  |  | (2,895 | )
Ending balance |  | $ | 19,787 |  |  | $ | 27,718 |  |  | $ | 19,787 |  |  | $ | 27,718 |
The Company considers a loan 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 had subsequently defaulted as of September 30, 2019. 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, 2019, 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 set forth the loan portfolio by risk rating as of September 30, 2019 and December 31, 2018:
|  | September 30, 2019 |
|  | Pass/Watch |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 2,432,623 |  |  | $ | 151,265 |  |  | $ | 84,173 |  |  | $ | — |  |  | $ | 2,668,061 |
Real estate construction loans |  |  | 514,725 |  |  |  | 74,462 |  |  |  | 4,629 |  |  |  | — |  |  |  | 593,816 |
Commercial mortgage loans |  |  | 6,824,241 |  |  |  | 233,155 |  |  |  | 78,203 |  |  |  | — |  |  |  | 7,135,599 |
Residential mortgage loans and equity lines |  |  | 4,317,793 |  |  |  | 927 |  |  |  | 7,271 |  |  |  | — |  |  |  | 4,325,991 |
Installment and other loans |  |  | 5,087 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,087 |
Total gross loans |  | $ | 14,094,469 |  |  | $ | 459,809 |  |  | $ | 174,276 |  |  | $ | — |  |  | $ | 14,728,554 |
|  | December 31, 2018 |
|  | Pass/Watch |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 2,603,901 |  |  | $ | 87,987 |  |  | $ | 50,077 |  |  | $ | — |  |  | $ | 2,741,965 |
Real estate construction loans |  |  | 514,406 |  |  |  | 62,175 |  |  |  | 4,873 |  |  |  | — |  |  |  | 581,454 |
Commercial mortgage loans |  |  | 6,337,368 |  |  |  | 304,791 |  |  |  | 82,041 |  |  |  | — |  |  |  | 6,724,200 |
Residential mortgage loans and equity lines |  |  | 3,934,762 |  |  |  | — |  |  |  | 9,058 |  |  |  | — |  |  |  | 3,943,820 |
Installment and other loans |  |  | 4,349 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 4,349 |
Total gross loans |  | $ | 13,394,786 |  |  | $ | 454,953 |  |  | $ | 146,049 |  |  | $ | — |  |  | $ | 13,995,788 |
The following tables set forth the balance in the allowance for loan losses by portfolio segment and based on impairment method as of September 30, 2019 and December 31, 2018:
|  | September 30, 2019 |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Residential |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | Mortgage Loans |  |  | and |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | and Equity Lines |  |  | Other Loans |  |  | Total |
|  | (In thousands) |
Loans individually evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 744 |  |  | $ | — |  |  | $ | 536 |  |  | $ | 221 |  |  | $ | — |  |  | $ | 1,501 |
Balance |  | $ | 33,726 |  |  | $ | 4,629 |  |  | $ | 37,805 |  |  | $ | 12,687 |  |  | $ | — |  |  | $ | 88,847 |
Loans collectively evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 57,805 |  |  | $ | 21,698 |  |  | $ | 32,931 |  |  | $ | 11,948 |  |  | $ | 25 |  |  | $ | 124,407 |
Balance |  | $ | 2,634,335 |  |  | $ | 589,187 |  |  | $ | 7,097,794 |  |  | $ | 4,313,304 |  |  | $ | 5,087 |  |  | $ | 14,639,707 |
Total allowance |  | $ | 58,549 |  |  | $ | 21,698 |  |  | $ | 33,467 |  |  | $ | 12,169 |  |  | $ | 25 |  |  | $ | 125,908 |
Total balance |  | $ | 2,668,061 |  |  | $ | 593,816 |  |  | $ | 7,135,599 |  |  | $ | 4,325,991 |  |  | $ | 5,087 |  |  | $ | 14,728,554 |
|  | December 31, 2018 |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Residential |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | Mortgage Loans |  |  | and |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | and Equity Lines |  |  | Other Loans |  |  | Total |
|  | (In thousands) |
Loans individually evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 1,837 |  |  | $ | — |  |  | $ | 877 |  |  | $ | 1,088 |  |  | $ | — |  |  | $ | 3,802 |
Balance |  | $ | 36,940 |  |  | $ | 4,873 |  |  | $ | 51,471 |  |  | $ | 13,602 |  |  | $ | — |  |  | $ | 106,886 |
Loans collectively evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 53,141 |  |  | $ | 19,626 |  |  | $ | 32,610 |  |  | $ | 13,194 |  |  | $ | 18 |  |  | $ | 118,589 |
Balance |  | $ | 2,705,025 |  |  | $ | 576,581 |  |  | $ | 6,672,729 |  |  | $ | 3,930,218 |  |  | $ | 4,349 |  |  | $ | 13,888,902 |
Total allowance |  | $ | 54,978 |  |  | $ | 19,626 |  |  | $ | 33,487 |  |  | $ | 14,282 |  |  | $ | 18 |  |  | $ | 122,391 |
Total balance |  | $ | 2,741,965 |  |  | $ | 581,454 |  |  | $ | 6,724,200 |  |  | $ | 3,943,820 |  |  | $ | 4,349 |  |  | $ | 13,995,788 |
The following tables set forth activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2019, and September 30, 2018. 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, 2019 and 2018
|  |  |  |  |  |  |  |  |  |  |  |  |  | Residential |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Mortgage Loans |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | and |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
June 30, 2019 Ending Balance |  | $ | 54,293 |  |  | $ | 21,010 |  |  | $ | 33,154 |  |  | $ | 14,164 |  |  | $ | 30 |  |  | $ | 122,651 |
Provision/(reversal) for possible credit losses |  |  | 7,400 |  |  |  | (2,690 | ) |  |  | (4,648 | ) |  |  | (2,057 | ) |  |  | (5 | ) |  |  | (2,000 | )
Charge-offs |  |  | (3,356 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,356 | )
Recoveries |  |  | 212 |  |  |  | 3,378 |  |  |  | 4,961 |  |  |  | 62 |  |  |  | — |  |  |  | 8,613 |
Net (charge-offs)/recoveries |  |  | (3,144 | ) |  |  | 3,378 |  |  |  | 4,961 |  |  |  | 62 |  |  |  | — |  |  |  | 5,257 |
September 30, 2019 Ending Balance |  | $ | 58,549 |  |  | $ | 21,698 |  |  | $ | 33,467 |  |  | $ | 12,169 |  |  | $ | 25 |  |  | $ | 125,908 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Residential |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Mortgage Loans |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | and |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
June 30, 2018 Ending Balance |  | $ | 55,179 |  |  | $ | 20,663 |  |  | $ | 33,976 |  |  | $ | 12,062 |  |  | $ | 19 |  |  | $ | 121,899 |
Provision/(reversal) for possible credit losses |  |  | 1,270 |  |  |  | 519 |  |  |  | (4,138 | ) |  |  | 842 |  |  |  | 7 |  |  |  | (1,500 | )
Charge-offs |  |  | (122 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (122 | )
Recoveries |  |  | 187 |  |  |  | 44 |  |  |  | 2,944 |  |  |  | 5 |  |  |  | — |  |  |  | 3,180 |
Net recoveries |  |  | 65 |  |  |  | 44 |  |  |  | 2,944 |  |  |  | 5 |  |  |  | — |  |  |  | 3,058 |
September 30, 2018 Ending Balance |  | $ | 56,514 |  |  | $ | 21,226 |  |  | $ | 32,782 |  |  | $ | 12,909 |  |  | $ | 26 |  |  | $ | 123,457 |
Nine months ended September 30, 2019 and 2018
|  |  |  |  |  |  |  |  |  |  |  |  |  | Residential |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Mortgage Loans |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | and |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
2019 Beginning Balance |  | $ | 54,978 |  |  | $ | 19,626 |  |  | $ | 33,487 |  |  | $ | 14,282 |  |  | $ | 18 |  |  | $ | 122,391 |
Provision/(reversal) for possible credit losses |  |  | 8,262 |  |  |  | (2,540 | ) |  |  | (5,234 | ) |  |  | (2,495 | ) |  |  | 7 |  |  |  | (2,000 | )
Charge-offs |  |  | (6,300 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6,300 | )
Recoveries |  |  | 1,609 |  |  |  | 4,612 |  |  |  | 5,214 |  |  |  | 382 |  |  |  | — |  |  |  | 11,817 |
Net (charge-offs)/recoveries |  |  | (4,691 | ) |  |  | 4,612 |  |  |  | 5,214 |  |  |  | 382 |  |  |  | — |  |  |  | 5,517 |
September 30, 2019 Ending Balance |  | $ | 58,549 |  |  | $ | 21,698 |  |  | $ | 33,467 |  |  | $ | 12,169 |  |  | $ | 25 |  |  | $ | 125,908 |
Reserve for impaired loans |  | $ | 744 |  |  | $ | — |  |  | $ | 536 |  |  | $ | 221 |  |  | $ | — |  |  | $ | 1,501 |
Reserve for non-impaired loans |  | $ | 57,805 |  |  | $ | 21,698 |  |  | $ | 32,931 |  |  | $ | 11,948 |  |  | $ | 25 |  |  | $ | 124,407 |
Reserve for off-balance sheet credit commitments |  | $ | 2,505 |  |  | $ | 1,608 |  |  | $ | 121 |  |  | $ | 313 |  |  | $ | 3 |  |  | $ | 4,550 |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Residential |  |  |  |  |  |  |  |  |
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Mortgage Loans |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | and |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
2018 Beginning Balance |  | $ | 49,796 |  |  | $ | 24,838 |  |  | $ | 37,610 |  |  | $ | 11,013 |  |  | $ | 22 |  |  | $ | 123,279 |
Provision/(reversal) for possible credit losses |  |  | 6,097 |  |  |  | (3,744 | ) |  |  | (8,672 | ) |  |  | 1,815 |  |  |  | 4 |  |  |  | (4,500 | )
Charge-offs |  |  | (629 | ) |  |  | — |  |  |  | (390 | ) |  |  | — |  |  |  | — |  |  |  | (1,019 | )
Recoveries |  |  | 1,250 |  |  |  | 132 |  |  |  | 4,234 |  |  |  | 81 |  |  |  | — |  |  |  | 5,697 |
Net recoveries |  |  | 621 |  |  |  | 132 |  |  |  | 3,844 |  |  |  | 81 |  |  |  | — |  |  |  | 4,678 |
September 30, 2018 Ending Balance |  | $ | 56,514 |  |  | $ | 21,226 |  |  | $ | 32,782 |  |  | $ | 12,909 |  |  | $ | 26 |  |  | $ | 123,457 |
Reserve for impaired loans |  | $ | 2,506 |  |  | $ | — |  |  | $ | 917 |  |  | $ | 281 |  |  | $ | — |  |  | $ | 3,704 |
Reserve for non-impaired loans |  | $ | 54,008 |  |  | $ | 21,226 |  |  | $ | 31,865 |  |  | $ | 12,628 |  |  | $ | 26 |  |  | $ | 119,753 |
Reserve for off-balance sheet credit commitments |  | $ | 1,615 |  |  | $ | 1,174 |  |  | $ | 78 |  |  | $ | 215 |  |  | $ | 6 |  |  | $ | 3,088 |
Loans Held-for-Sale At the time of commitment to originate or purchase a loan, the loan is determined to be held for investment if it is in the Company’s intent to hold the loan to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s evaluation processes, including asset/liability and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value. As of September 30, 2019, there were approximately $36.8 million of loans held-for-sale, which were all comprised of residential mortgage loans. There were no loans held-for-sale as of December 31, 2018. Loans Purchases, Transfers and Sales The Company purchases and sells loans in the secondary market in the ordinary course of business. From time to time, purchased loans may be transferred from held-for-investment to held-for-sale, and write-downs to the allowance for loan losses are recorded, when appropriate. During the three and nine months ended September 30, 2019, the Company reclassified $75.3 million of residential mortgages from held-for-investment to held-for-sale. Net gains on sales of loans, excluding the lower of cost or fair value adjustments, were $0.8 million, for the three and nine months ended September 30, 2019. The Company recorded a lower of cost or fair value adjustment of $120 thousand during the three and nine months ended September 30, 2019. Noloan transfers were made during the three and nine months ended September 30, 2018.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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