Loans Receivable and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2018

The following table presents loans receivable as of March 31, 2018 and December 31, 2017.



	March 31, 2018			December 31, 2017
(amounts in thousands)
Commercial:
Multi-family	$	3,645,374		$	3,502,381
Commercial and industrial (including owner occupied commercial real estate)	1,704,791			1,633,818
Commercial real estate non-owner occupied	1,195,904			1,218,719
Construction	81,101			85,393
Total commercial loans	6,627,170			6,440,311
Consumer:
Residential real estate	225,839			234,090
Manufactured housing	87,687			90,227
Other	3,570			3,547
Total consumer loans	317,096			327,864
Total loans receivable	6,944,266			6,768,175
Deferred (fees)/costs and unamortized (discounts)/premiums, net	(700		)	83
Allowance for loan losses	(39,499		)	(38,015		)
Loans receivable, net of allowance for loan losses	$	6,904,067		$	6,730,243

Loans Receivable by Loan Type and Performance Status

The following tables summarize loans receivable by loan type and performance status as of March 31, 2018 and December 31, 2017:



	March 31, 2018
	30-89 Days Past Due (1)		90 Days Or More Past Due(1)		Total Past Due (1)		Non- Accrual		Current (2)		Purchased- Credit- Impaired Loans (3)		Total Loans (4)
(amounts in thousands)
Multi-family	$	—	$	—	$	—	$	—	$	3,643,539	$	1,835	$	3,645,374
Commercial and industrial	129		—		129		14,220		1,187,571		721		1,202,641
Commercial real estate - owner occupied	—		—		—		1,437		490,277		10,436		502,150
Commercial real estate - non-owner occupied	—		—		—		242		1,190,591		5,071		1,195,904
Construction	—		—		—		—		81,101		—		81,101
Residential real estate	4,490		—		4,490		5,216		210,825		5,308		225,839
Manufactured housing (5)	3,444		2,746		6,190		1,979		77,042		2,476		87,687
Other consumer	75		—		75		97		3,148		250		3,570
Total	$	8,138	$	2,746	$	10,884	$	23,191	$	6,884,094	$	26,097	$	6,944,266
	December 31, 2017
	30-89 Days Past Due (1)		90 Days Or More Past Due(1)		Total Past Due (1)		Non- Accrual		Current (2)		Purchased- Credit- Impaired Loans (3)		Total Loans (4)
(amounts in thousands)
Multi-family	$	4,900	$	—	$	4,900	$	—	$	3,495,600	$	1,881	$	3,502,381
Commercial and industrial	103		—		103		17,392		1,130,831		764		1,149,090
Commercial real estate - owner occupied	202		—		202		1,453		472,501		10,572		484,728
Commercial real estate - non-owner occupied	93		—		93		160		1,213,216		5,250		1,218,719
Construction	—		—		—		—		85,393		—		85,393
Residential real estate	7,628		—		7,628		5,420		215,361		5,681		234,090
Manufactured housing (5)	4,028		2,743		6,771		1,959		78,946		2,551		90,227
Other consumer	116		—		116		31		3,184		216		3,547
Total	$	17,070	$	2,743	$	19,813	$	26,415	$	6,695,032	$	26,915	$	6,768,175


(1)	Includes past due loans that are accruing interest because collection is considered probable.


(2)	Loans where next payment due is less than 30 days from the report date.

(3)

Purchased-credit-impaired loans aggregated into a pool are accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, and the past due status of the pools, or that of the individual loans within the pools, is not meaningful. Because of the credit impaired nature of the loans, the loans are recorded at a discount reflecting estimated future cash flows and the Bank recognizes interest income on each pool of loans reflecting the estimated yield and passage of time. Such loans are considered to be performing. Purchased-credit-impaired loans that are not in pools accrete interest when the timing and amount of their expected cash flows are reasonably estimable, and are reported as performing loans.


(4)	Amounts exclude deferred costs and fees, unamortized premiums and discounts, and the allowance for loan losses.


(5)	Manufactured housing loans purchased in 2010 are supported by cash reserves held at the Bank that are used to fund past-due payments when the loan becomes 90 days or more delinquent. Subsequent purchases are subject to varying provisions in the event of borrowers’ delinquencies.

Schedule of Allowance for Loan Losses

The changes in the allowance for loan losses for the three months ended March 31, 2018 and 2017, and the loans and allowance for loan losses by loan class based on impairment-evaluation method as of March 31, 2018 and December 31, 2017 are presented in the tables below.



Three Months Ended March 31, 2018	Multi-family		Commercial and Industrial			Commercial Real Estate Owner Occupied			Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, December 31, 2017	$	12,168	$	10,918		$	3,232		$	7,437		$	979		$	2,929		$	180		$	172		$	38,015
Charge-offs	—		(50		)	(18		)	—			—			(365		)	—			(256		)	(689		)
Recoveries	—		35			—			—			11			7			—			3			56
Provision for loan losses	377		834			311			(204		)	(69		)	608			(4		)	264			2,117
Ending Balance, March 31, 2018	$	12,545	$	11,737		$	3,525		$	7,233		$	921		$	3,179		$	176		$	183		$	39,499

As of March 31, 2018
Loans:
Individually evaluated for impairment	$	—	$	14,288		$	1,483		$	242		$	—		$	8,242		$	10,108		$	97		$	34,460
Collectively evaluated for impairment	3,643,539		1,187,632			490,231			1,190,591			81,101			212,289			75,103			3,223			6,883,709
Loans acquired with credit deterioration	1,835		721			10,436			5,071			—			5,308			2,476			250			26,097
	$	3,645,374	$	1,202,641		$	502,150		$	1,195,904		$	81,101		$	225,839		$	87,687		$	3,570		$	6,944,266
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	986		$	764		$	—		$	—		$	365		$	4		$	—		$	2,119
Collectively evaluated for impairment	12,545		10,300			2,751			4,512			921			2,274			82			125			33,510
Loans acquired with credit deterioration	—		451			10			2,721			—			540			90			58			3,870
	$	12,545	$	11,737		$	3,525		$	7,233		$	921		$	3,179		$	176		$	183		$	39,499



Three Months Ended March 31, 2017	Multi-family		Commercial and Industrial			Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, December 31, 2016	$	11,602	$	11,050		$	2,183	$	7,894		$	840		$	3,342		$	286		$	118		$	37,315
Charge-offs	—		(198		)	—		(404		)	—			(221		)	—			(20		)	(843		)
Recoveries	—		215			—		—			81			21			—			44			361
Provision for loan losses	681		1,942			211		357			(36		)	(62		)	(2		)	(41		)	3,050
Ending Balance, March 31, 2017	$	12,283	$	13,009		$	2,394	$	7,847		$	885		$	3,080		$	284		$	101		$	39,883
As of December 31, 2017
Loans:
Individually evaluated for impairment	$	—	$	17,461		$	1,448	$	160		$	—		$	9,247		$	10,089		$	30		$	38,435
Collectively evaluated for impairment	3,500,500		1,130,865			472,708		1,213,309			85,393			219,162			77,587			3,301			6,702,825
Loans acquired with credit deterioration	1,881		764			10,572		5,250			—			5,681			2,551			216			26,915
	$	3,502,381	$	1,149,090		$	484,728	$	1,218,719		$	85,393		$	234,090		$	90,227		$	3,547		$	6,768,175
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	650		$	642	$	—		$	—		$	155		$	4		$	—		$	1,451
Collectively evaluated for impairment	12,168		9,804			2,580		4,630			979			2,177			82			117			32,537
Loans acquired with credit deterioration	—		464			10		2,807			—			597			94			55			4,027
	$	12,168	$	10,918		$	3,232	$	7,437		$	979		$	2,929		$	180		$	172		$	38,015

Summary of Recorded Investment Net Charge-Offs, Unpaid Principal Balance and Related Allowance for Impaired Loans

The following tables present the recorded investment (net of charge-offs), unpaid principal balance, and related allowance by loan type for impaired loans that were individually evaluated for impairment as of March 31, 2018 and December 31, 2017 and the average recorded investment and interest income recognized for the three months ended March 31, 2018 and 2017. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.



	March 31, 2018						Three Months Ended March 31, 2018
	Recorded Investment Net of Charge offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(amounts in thousands)
With no recorded allowance:
Commercial and industrial	$	5,830	$	6,029	$	—	$	7,484	$	—
Commercial real estate owner occupied	614		614		—		710		—
Commercial real estate non-owner occupied	242		353		—		201		—
Other consumer	97		97		—		63		—
Residential real estate	3,617		3,788		—		3,623		—
Manufactured housing	9,886		9,886		—		9,876		131
With an allowance recorded:
Commercial and industrial	8,458		8,642		986		8,390		1
Commercial real estate owner occupied	869		869		764		756		1
Residential real estate	4,625		4,662		365		5,122		25
Manufactured housing	222		222		4		223		—
Total	$	34,460	$	35,162	$	2,119	$	36,448	$	158



	December 31, 2017						Three Months Ended March 31, 2017
	Recorded Investment Net of Charge offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(amounts in thousands)
With no recorded allowance:
Commercial and industrial	$	9,138	$	9,287	$	—	$	4,248	$	50
Commercial real estate owner occupied	806		806		—		1,435		15
Commercial real estate non-owner occupied	160		272		—		1,794		2
Other consumer	30		30		—		57		—
Residential real estate	3,628		3,801		—		4,502		1
Manufactured housing	9,865		9,865		—		9,833		141
With an allowance recorded:
Commercial and industrial	8,323		8,506		650		8,837		81
Commercial real estate - owner occupied	642		642		642		844		1
Commercial real estate non-owner occupied	—		—		—		138		—
Residential real estate	5,619		5,656		155		2,597		39
Manufactured housing	224		224		4		102		3
Total	$	38,435	$	39,089	$	1,451	$	34,387	$	333

Analysis of Loans Modified in Troubled Debt Restructuring by Type of Concession

The following table presents loans modified in a troubled debt restructuring by type of concession for the three months ended March 31, 2018 and 2017. There were no modifications that involved forgiveness of debt.



	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Extensions of maturity	—	$	—	1	$	348
Interest-rate reductions	9	322		20	855
Total	9	$	322	21	$	1,203

Summary of Loans Modified in Troubled Debt Restructurings and Related Recorded Investment

The following table presents total TDRs based on loan type and accrual status at March 31, 2018 and December 31, 2017. Nonaccrual TDRs are included in the reported amount of total non-accrual loans.



	March 31, 2018						December 31, 2017
	Accruing TDRs		Nonaccrual TDRs		Total		Accruing TDRs		Nonaccrual TDRs		Total
(amounts in thousands)
Commercial and industrial	$	68	$	5,519	$	5,587	$	63	$	5,939	$	6,002
Commercial real estate owner occupied	45		—		45		—		—		—
Manufactured housing	8,130		1,787		9,917		8,130		1,766		9,896
Residential real estate	3,026		463		3,489		3,828		703		4,531
Total TDRs	$	11,269	$	7,769	$	19,038	$	12,021	$	8,408	$	20,429

The following table provides, by loan type, the number of loans modified in troubled debt restructurings, and the related recorded investment, during the three months ended March 31, 2018 and 2017.



	Three Months Ended March 31, 2018			Three Months Ended March 31, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Commercial and industrial	—	$	—	1	$	348
Manufactured housing	9	322		20	855
Total loans	9	$	322	21	$	1,203

Changes in Accretable Yield Related to Purchased-credit-impaired Loans

The changes in accretable yield related to purchased-credit-impaired loans for the three months ended March 31, 2018 and 2017 were as follows:



	Three Months Ended March 31,
	2018			2017
(amounts in thousands)
Accretable yield balance as of December 31,	$	7,825		$	10,202
Accretion to interest income	(338		)	(493		)
Reclassification from nonaccretable difference and disposals, net	176			(333		)
Accretable yield balance as of March 31,	$	7,663		$	9,376

Credit Ratings of Covered and Non-Covered Loan Portfolio

The following tables present the credit ratings of loans receivable as of March 31, 2018 and December 31, 2017.



	March 31, 2018
	Multi-family		Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied		Construction		Residential Real Estate		Manufactured Housing		Other Consumer		Total
(amounts in thousands)
Pass/Satisfactory	$	3,608,179	$	1,161,401	$	485,423	$	1,178,454	$	81,101	$	—	$	—	$	—	$	6,514,558
Special Mention	29,634		12,751		8,208		16,356		—		—		—		—		66,949
Substandard	7,561		28,489		8,519		1,094		—		—		—		—		45,663
Performing (1)	—		—		—		—		—		216,133		79,518		3,398		299,049
Non-performing (2)	—		—		—		—		—		9,706		8,169		172		18,047
Total	$	3,645,374	$	1,202,641	$	502,150	$	1,195,904	$	81,101	$	225,839	$	87,687	$	3,570	$	6,944,266



	December 31, 2017
	Multi-family		Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied		Construction		Residential Real Estate		Manufactured Housing		Other Consumer		Total
(amounts in thousands)
Pass/Satisfactory	$	3,438,554	$	1,118,889	$	471,826	$	1,185,933	$	85,393			$	—	$	—	$	6,300,595
Special Mention	53,873		7,652		5,987		31,767		—		—		—		—		99,279
Substandard	9,954		22,549		6,915		1,019		—				—		—		40,437
Performing (1)	—		—		—		—		—		221,042		81,497		3,400		305,939
Non-performing (2)	—		—		—		—		—		13,048		8,730		147		21,925
Total	$	3,502,381	$	1,149,090	$	484,728	$	1,218,719	$	85,393	$	234,090	$	90,227	$	3,547	$	6,768,175

(1) Includes consumer and other installment loans not subject to risk ratings.

(2) Includes loans that are past due and still accruing interest and loans on nonaccrual statu