Loans Receivable and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2018

The following table presents loans receivable as of June 30, 2018 and December 31, 2017.



	June 30, 2018			December 31, 2017
(amounts in thousands)
Commercial:
Multi-family	$	3,542,770		$	3,502,381
Commercial and industrial (including owner occupied commercial real estate)	1,811,751			1,633,818
Commercial real estate non-owner occupied	1,155,998			1,218,719
Construction	88,141			85,393
Total commercial loans	6,598,660			6,440,311
Consumer:
Residential real estate	493,222			234,090
Manufactured housing	85,328			90,227
Other	3,874			3,547
Total consumer loans	582,424			327,864
Total loans receivable	7,181,084			6,768,175
Deferred costs and unamortized premiums, net	642			83
Allowance for loan losses	(38,288		)	(38,015		)
Loans receivable, net of allowance for loan losses	$	7,143,438		$	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 June 30, 2018 and December 31, 2017:



	June 30, 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	$	—	$	—	$	—	$	1,343	$	3,539,640	$	1,787	$	3,542,770
Commercial and industrial	1,087		—		1,087		13,683		1,251,148		602		1,266,520
Commercial real estate - owner occupied	—		—		—		718		534,923		9,590		545,231
Commercial real estate - non-owner occupied	—		—		—		2,536		1,148,581		4,881		1,155,998
Construction	—		—		—		—		88,141		—		88,141
Residential real estate	2,174		—		2,174		5,606		480,381		5,061		493,222
Manufactured housing (5)	2,977		2,661		5,638		2,015		75,250		2,425		85,328
Other consumer	56		—		56		94		3,496		228		3,874
Total	$	6,294	$	2,661	$	8,955	$	25,995	$	7,121,560	$	24,574	$	7,181,084
	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 and six months ended June 30, 2018 and 2017, and the loans and allowance for loan losses by loan class based on impairment-evaluation method as of June 30, 2018 and December 31, 2017 are presented in the tables below.



Three Months Ended June 30, 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, March 31, 2018	$	12,545		$	11,737		$	3,525		$	7,233		$	921		$	3,179		$	176		$	183		$	39,499
Charge-offs	—			(174		)	(483		)	—			—			(42		)	—			(462		)	(1,161		)
Recoveries	—			140			326			—			209			56			—			3			734
Provision for loan losses	(476		)	555			(380		)	(535		)	(138		)	(285		)	(27		)	502			(784		)
Ending Balance, June 30, 2018	$	12,069		$	12,258		$	2,988		$	6,698		$	992		$	2,908		$	149		$	226		$	38,288
Six Months Ended June 30, 2018
Ending Balance, December 31, 2017	$	12,168		$	10,918		$	3,232		$	7,437		$	979		$	2,929		$	180		$	172		$	38,015
Charge-offs	—			(224		)	(501		)	—			—			(407		)	—			(718		)	(1,850		)
Recoveries	—			175			326			—			220			63			—			6			790
Provision for loan losses	(99		)	1,389			(69		)	(739		)	(207		)	323			(31		)	766			1,333
Ending Balance, June 30, 2018	$	12,069		$	12,258		$	2,988		$	6,698		$	992		$	2,908		$	149		$	226		$	38,288

As of June 30, 2018
Loans:
Individually evaluated for impairment	$	1,343		$	13,750		$	759		$	2,536		$	—		$	8,775		$	10,372		$	94		$	37,629
Collectively evaluated for impairment	3,539,640			1,252,168			534,882			1,148,581			88,141			479,386			72,531			3,552			7,118,881
Loans acquired with credit deterioration	1,787			602			9,590			4,881			—			5,061			2,425			228			24,574
	$	3,542,770		$	1,266,520		$	545,231		$	1,155,998		$	88,141		$	493,222		$	85,328		$	3,874		$	7,181,084
Allowance for loan losses:
Individually evaluated for impairment	$	—		$	1,062		$	1		$	—		$	—		$	313		$	5		$	—		$	1,381
Collectively evaluated for impairment	12,069			10,749			2,987			4,334			992			2,106			81			154			33,472
Loans acquired with credit deterioration	—			447			—			2,364			—			489			63			72			3,435
	$	12,069		$	12,258		$	2,988		$	6,698		$	992		$	2,908		$	149		$	226		$	38,288



Three Months Ended June 30, 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, March 31, 2017	$	12,283		$	13,009		$	2,394	$	7,847		$	885		$	3,080		$	284		$	101		$	39,883
Charge-offs	—			(1,849		)	—		(4		)	—			(69		)	—			(226		)	(2,148		)
Recoveries	—			68			9		—			49			6			—			56			188
Provision for loan losses	(255		)	357			573		(57		)	(218		)	(22		)	(16		)	173			535
Ending Balance, June 30, 2017	$	12,028		$	11,585		$	2,976	$	7,786		$	716		$	2,995		$	268		$	104		$	38,458
Six Months Ended June 30, 2017
Ending Balance, December 31, 2016	$	11,602		$	11,050		$	2,183	$	7,894		$	840		$	3,342		$	286		$	118		$	37,315
Charge-offs	—			(2,047		)	—		(408		)	—			(290		)	—			(246		)	(2,991		)
Recoveries	—			283			9		—			130			27			—			100			549
Provision for loan losses	426			2,299			784		300			(254		)	(84		)	(18		)	132			3,585
Ending Balance, June 30, 2017	$	12,028		$	11,585		$	2,976	$	7,786		$	716		$	2,995		$	268		$	104		$	38,458
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 June 30, 2018 and December 31, 2017 and the average recorded investment and interest income recognized for the three and six months ended June 30, 2018 and 2017. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.



	June 30, 2018						Three Months Ended June 30, 2018				Six Months Ended June 30, 2018
	Recorded Investment Net of Charge offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
(amounts in thousands)
With no recorded allowance:
Multi-family	$	1,343	$	1,343	$	—	$	672	$	8	$	448	$	8
Commercial and industrial	5,642		5,889		—		5,736		2		6,870		2
Commercial real estate owner occupied	718		1,201		—		664		—		713		—
Commercial real estate non-owner occupied	2,536		2,648		—		1,390		8		980		8
Other consumer	94		94		—		96		—		74		—
Residential real estate	4,301		4,546		—		3,959		2		3,849		2
Manufactured housing	10,144		10,144		—		10,015		146		9,963		277
With an allowance recorded:
Commercial and industrial	8,108		8,292		1,062		8,283		11		8,296		12
Commercial real estate owner occupied	41		41		1		455		1		517		2
Residential real estate	4,474		4,479		313		4,550		38		4,906		63
Manufactured housing	228		228		5		225		6		225		6
Total	$	37,629	$	38,905	$	1,381	$	36,045	$	222	$	36,841	$	380



	December 31, 2017						Three Months Ended June 30, 2017				Six Months Ended June 30, 2017
	Recorded Investment Net of Charge offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
(amounts in thousands)
With no recorded allowance:
Commercial and industrial	$	9,138	$	9,287	$	—	$	6,678	$	46	$	5,251	$	96
Commercial real estate owner occupied	806		806		—		1,739		—		1,563		3
Commercial real estate non-owner occupied	160		272		—		884		—		1,257		2
Other consumer	30		30		—		56		—		56		—
Residential real estate	3,628		3,801		—		2,660		—		4,001		1
Manufactured housing	9,865		9,865		—		10,074		152		9,937		293
With an allowance recorded:
Commercial and industrial	8,323		8,506		650		7,209		—		6,846		22
Commercial real estate - owner occupied	642		642		642		839		1		839		2
Commercial real estate non-owner occupied	—		—		—		114		—		126		—
Residential real estate	5,619		5,656		155		4,953		45		3,399		84
Manufactured housing	224		224		4		216		5		144		8
Total	$	38,435	$	39,089	$	1,451	$	35,422	$	249	$	33,419	$	511

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

The following table provides, by loan type, the number of loans modified in troubled debt restructurings, and the related recorded investment, during the three and six months ended June 30, 2018 and 2017.



	Three Months Ended June 30, 2018			Three Months Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Commercial and industrial	—	$	—	2	$	5,855
Manufactured housing	14	450		9	320
Residential real estate	1	200		—	—
Other consumer	1	13		—	—
Total loans	16	$	663	11	$	6,175



	Six Months Ended June 30, 2018			Six Months Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Commercial and industrial	—	$	—	3	$	6,203
Manufactured housing	23	772		29	1,175
Residential real estate	1	200		—	—
Other consumer	1	13		—	—
Total loans	25	$	985	32	$	7,378

The following table presents total TDRs based on loan type and accrual status at June 30, 2018 and December 31, 2017. Nonaccrual TDRs are included in the reported amount of total non-accrual loans.



	June 30, 2018						December 31, 2017
	Accruing TDRs		Nonaccrual TDRs		Total		Accruing TDRs		Nonaccrual TDRs		Total
(amounts in thousands)
Commercial and industrial	$	67	$	5,415	$	5,482	$	63	$	5,939	$	6,002
Commercial real estate owner occupied	41		—		41		—		—		—
Manufactured housing	8,357		1,875		10,232		8,130		1,766		9,896
Residential real estate	3,169		485		3,654		3,828		703		4,531
Other consumer	—		13		13		—		—		—
Total TDRs	$	11,634	$	7,788	$	19,422	$	12,021	$	8,408	$	20,429

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 and six months ended June 30, 2018 and 2017. There were no modifications that involved forgiveness of debt.



	Three Months Ended June 30, 2018			Three Months Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Extensions of maturity	1	$	56	2	$	5,855
Interest-rate reductions	15	607		9	320
Total	16	$	663	11	$	6,175



	Six Months Ended June 30, 2018			Six Months Ended June 30, 2017
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Extensions of maturity	1	$	56	3	$	6,203
Interest-rate reductions	24	929		29	1,175
Total	25	$	985	32	$	7,378

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

The changes in accretable yield related to purchased-credit-impaired loans for the three and six months ended June 30, 2018 and 2017 were as follows:



	Three Months Ended June 30,
	2018			2017
(amounts in thousands)
Accretable yield balance as of March 31,	$	7,663		$	9,376
Accretion to interest income	(516		)	(465		)
Reclassification from nonaccretable difference and disposals, net	256			95
Accretable yield balance as of June 30,	$	7,403		$	9,006



	Six Months Ended June 30,
	2018			2017
(amounts in thousands)
Accretable yield balance as of December 31,	$	7,825		$	10,202
Accretion to interest income	(854		)	(958		)
Reclassification from nonaccretable difference and disposals, net	432			(238		)
Accretable yield balance as of June 30,	$	7,403		$	9,006

Credit Ratings of Covered and Non-Covered Loan Portfolio

The following tables present the credit ratings of loans receivable as of June 30, 2018 and December 31, 2017.



	June 30, 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	$	3,485,669	$	1,211,934	$	529,898	$	1,089,666	$	88,141	$	—	$	—	$	—	$	6,405,308
Special Mention	31,001		16,979		8,152		60,943		—		—		—		—		117,075
Substandard	26,100		37,607		7,181		5,389		—		—		—		—		76,277
Performing (1)	—		—		—		—		—		485,442		77,675		3,724		566,841
Non-performing (2)	—		—		—		—		—		7,780		7,653		150		15,583
Total	$	3,542,770	$	1,266,520	$	545,231	$	1,155,998	$	88,141	$	493,222	$	85,328	$	3,874	$	7,181,084



	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 status.