Loans Receivable, Net

9 Months Ended

Sep. 30, 2011

Loans Receivable, Net [Abstract]

Loans Receivable, Net

Note 5. Loans Receivable, Net

Loans receivable, net at September 30, 2011 and December 31, 2010 consisted of the following (in thousands):

	September 30, 2011			December 31, 2010
Real estate:
One-to-four family	$	891,440		$	955,063
Commercial real estate, multi family and land		467,564			435,127
Construction		6,740			13,748
Consumer		198,237			205,725
Commercial		47,680			76,692
Total loans		1,611,661			1,686,355
Loans in process		(1,771	)		(4,055	)
Deferred origination costs, net		4,213			4,862
Allowance for loan losses		(22,905	)		(19,700	)
Total loans, net		1,591,198			1,667,462
Less: Mortgage loans held for sale		3,083			6,674
Loans receivable, net	$	1,588,115		$	1,660,788

An analysis of the allowance for loan losses for the three and nine months ended September 30, 2011 and 2010 is as follows (in thousands):

	Three months ended September 30,						Nine months ended September 30,
	2011			2010			2011			2010
Balance at beginning of period	$	21,454		$	17,146		$	19,700		$	14,723
Provision charged to operations		1,850			1,600			5,750			6,000
Charge-offs		(403	)		(183	)		(2,565	)		(2,272	)
Recoveries		4			30			20			142
Balance at end of period	$	22,905		$	18,593		$	22,905		$	18,593

The following table presents an analysis of the allowance for loan losses for the three and nine months ended September 30, 2011 and the balance in the allowance for loan loses and the recorded investment in loans by portfolio segment and based on impairment method as of September 30, 2011 and December 31, 2010 (in thousands):

	Residential Real Estate			Commercial Real Estate			Consumer			Commercial			Unallocated			Total
For the three months ended September 30, 2011
Allowance for loan losses:
Balance at beginning of period	$	6,469		$	7,229		$	4,277		$	945		$	2,534		$	21,454
Provision (benefit) charged to operations		1,280			1,220			118			12			(780	)		1,850
Charge-offs		(217	)		(180	)		(6	)		—			—			(403	)
Recoveries		—			—			—			4			—			4
Balance at end of period	$	7,532		$	8,269		$	4,389		$	961		$	1,754		$	22,905
For the nine months ended September 30, 2011
Allowance for loan losses:
Balance at beginning of period	$	5,977		$	6,837		$	3,264		$	962		$	2,660		$	19,700
Provision (benefit) charged to operations		2,216			3,129			1,180			131			(906	)		5,750
Charge-offs		(672	)		(1,697	)		(56	)		(140	)		—			(2,565	)
Recoveries		11			—			1			8			—			20
Balance at end of period	$	7,532		$	8,269		$	4,389		$	961		$	1,754		$	22,905
Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment	$	—		$	1,574		$	—		$	—		$	—		$	1,574
Collectively evaluated for impairment		7,532			6,695			4,389			961			1,754			21,331
Total ending allowance balance	$	7,532		$	8,269		$	4,389		$	961		$	1,754		$	22,905
Loans:
Loans individually evaluated for impairment	$	—		$	9,374		$	—		$	581		$	—		$	9,955
Loans collectively evaluated for impairment		895,097			458,190			198,237			47,099			—			1,598,623
Total ending loan balance	$	895,097		$	467,564		$	198,237		$	47,680		$	—		$	1,608,578

	Residential Real Estate		Commercial Real Estate		Consumer		Commercial		Unallocated		Total
December 31, 2010
Allowance for loan losses:
Ending allowance balance attributed to loans:
Individually evaluated for impairment	$	—	$	1,988	$	—	$	—	$	—	$	1,988
Collectively evaluated for impairment		5,977		4,849		3,264		962		2,660		17,712
Total ending allowance balance	$	5,977	$	6,837	$	3,264	$	962	$	2,660	$	19,700
Loans:
Loans individually evaluated for impairment	$	—	$	4,673	$	—	$	—	$	—	$	4,673
Loans collectively evaluated for impairment		962,137		430,454		205,725		76,692		—		1,675,008
Total ending loan balance	$	962,137	$	435,127	$	205,725	$	76,692	$	—	$	1,679,681

A summary of impaired loans at September 30, 2011 and December 31, 2010 is as follows (in thousands):

	September 30,		December 31,
	2011		2010
Impaired loans with no allocated allowance for loan losses	$	1,267	$	—
Impaired loans with allocated allowance for loan losses		8,688		4,673
	$	9,955	$	4,673
Amount of the allowance for loan losses allocated	$	1,574	$	1,988

The summary of loans individually evaluated for impairment by class of loans for the three and nine months ended September 30, 2011 and as of September 30, 2011 and December 31, 2010 follows (in thousands):

	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized
Three months ended September 30, 2011
With no related allowance recorded:
Commercial real estate:
Commercial	$	686	$	686	$	—	$	2,697	$	—
Construction and land		—		—		—		—		—
Commercial		581		581		—		395		—
	$	1,267	$	1,267	$	—	$	3,092	$	—
With an allowance recorded:
Commercial real estate:
Commercial	$	8,688	$	8,688	$	1,574	$	8,172	$	—
Construction and land		—		—		—		—		—
Commercial		—		—		—		—		—
	$	8,688	$	8,688	$	1,574	$	8,172	$	—
Nine months ended September 30, 2011
With no related allowance recorded:
Commercial real estate:
Commercial	$	686	$	686	$	—	$	1,688	$	—
Construction and land		—		—		—		—		—
Commercial		581		581		—		199		—
	$	1,267	$	1,267	$	—	$	1,887	$	—
With an allowance recorded:
Commercial real estate:
Commercial	$	8,688	$	8,688	$	1,574	$	4,386	$	—
Construction and land		—		—		—		1,141		—
Commercial		—		—		—		—		—
	$	8,688	$	8,688	$	1,574	$	5,527	$	—
December 31, 2010
With no related allowance recorded:
Commercial real estate:
Commercial	$	—	$	—	$	—
Construction and land		—		—		—
Commercial		—		—		—
	$	—	$	—	$	—
With an allowance recorded:
Commercial real estate:
Commercial	$	2,104	$	2,104	$	988
Construction and land		2,569		2,569		1,000
Commercial		—		—		—
	$	4,673	$	4,673	$	1,988

The following table presents the recorded investment in non-accrual loans by class of loans as of September 30, 2011 and December 31, 2010 (in thousands):

	Recorded Investment in Non-accrual Loans
	September 30, 2011		December 31, 2010
Residential real estate:
Originated by Bank	$	18,066	$	14,227
Originated by Columbia		10,474		8,480
Originated by Columbia – non-prime		4,109		3,870
Residential construction		71		368
Commercial real estate:
Commercial		9,660		3,280
Construction and land		—		2,569
Consumer		5,245		4,626
Commercial		773		117
	$	48,398	$	37,537

As used in these footnotes, loans "Originated by Columbia" are mortgage loans originated by Columbia under the Bank's underwriting guidelines and retained as part of the Bank's mortgage portfolio. These loans have significantly higher delinquency rates than similar loans originated by the Bank. Loans "Originated by Columbia – non-prime" are subprime or Alt-A loans which were originated for sale into the secondary market.

The following table presents the aging of the recorded investment in past due loans as of September 30, 2011 and December 31, 2010 by class of loans (in thousands):

	30-59 Days Past Due		60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Loans Not Past Due		Total
September 30, 2011
Residential real estate:
Originated by Bank	$	6,288	$	552	$	17,566	$	24,406	$	713,462	$	737,868
Originated by Columbia		2,393		1,446		9,162		13,001		131,462		144,463
Originated by Columbia - non-prime		18		—		4,109		4,127		1,899		6,026
Residential construction		—		—		71		71		6,669		6,740
Commercial real estate:
Commercial		—		1,249		9,660		10,909		440,068		450,977
Construction and land		—		—		—		—		16,587		16,587
Consumer		911		91		4,973		5,975		192,262		198,237
Commercial		—		2		771		773		46,907		47,680
	$	9,610	$	3,340	$	46,312	$	59,262	$	1,549,316	$	1,608,578
December 31, 2010
Residential real estate:
Originated by Bank	$	5,833	$	875	$	13,219	$	19,927	$	759,966	$	779,893
Originated by Columbia		3,399		1,083		7,752		12,234		149,470		161,704
Originated by Columbia -non-prime		953		1,532		3,240		5,725		1,067		6,792
Residential construction		—		—		368		368		13,380		13,748
Commercial real estate:
Commercial		870		—		2,611		3,481		406,549		410,030
Construction and land		—		—		2,569		2,569		22,528		25,097
Consumer		2,036		241		4,093		6,370		199,355		205,725
Commercial		—		—		117		117		76,575		76,692
	$	13,091	$	3,731	$	33,969	$	50,791	$	1,628,890	$	1,679,681

The Company categorizes all commercial and commercial real estate loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation and current economic trends, among other factors. This analysis is performed on a quarterly basis. The Company uses the following definitions for risk ratings:

Special Mention. Loans classified as Special Mention have a potential weakness that deserves management's close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the Bank's credit position at some future date.

Substandard. Loans classified as Substandard are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful. Loans classified as Doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.

Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass related loans. Loans not rated are included in groups of homogeneous loans. As of September 30, 2011 and December 31, 2010, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows (in thousands):

	Pass		Special Mention		Substandard		Doubtful		Total
September 30, 2011
Commercial real estate:
Commercial	$	422,437	$	10,083	$	18,427	$	30	$	450,977
Construction and land		15,702		885		—		—		16,587
Commercial		43,134		115		4,361		70		47,680
	$	481,273	$	11,083	$	22,788	$	100	$	515,244
December 31, 2010
Commercial real estate:
Commercial	$	376,902	$	10,856	$	22,272	$	—	$	410,030
Construction and land		22,528		—		1,100		1,469		25,097
Commercial		71,797		1,974		2,921		—		76,692
	$	471,227	$	12,830	$	26,293	$	1,469	$	511,819

For residential and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. The following table presents the recorded investment in residential and consumer loans based on payment activity as of September 30, 2011 and December 31, 2010 (in thousands):

	Residential Real Estate
	Originated by Bank		Originated by Columbia		Originated  by Columbia Non-Prime		Residential Construction		Consumer
September 30, 2011
Performing	$	719,802	$	133,989	$	1,917	$	6,669	$	192,992
Non-performing		18,066		10,474		4,109		71		5,245
	$	737,868	$	144,463	$	6,026	$	6,740	$	198,237
December 31, 2010
Performing	$	765,666	$	153,224	$	2,922	$	13,380	$	201,099
Non-performing		14,227		8,480		3,870		368		4,626
	$	779,893	$	161,704	$	6,792	$	13,748	$	205,725

The Company classifies certain loans as troubled debt restructurings ("TDR") when credit terms to a borrower in financial difficulty are modified. The modifications may include a reduction in rate, an extension in term and/or the capitalization of past due amounts. Included in the non-accrual loan total at September 30, 2011 and December 31, 2010 were $9.5 million and $3.3 million, respectively, of troubled debt restructurings. At September 30, 2011 and December 31, 2010 the Company has allocated $1.2 million and $569,000, respectively, of specific reserves to loans which are classified as troubled debt restructurings. Non-accrual loans which become troubled debt restructurings are returned to accrual status after six months of performance. Loans classified as a troubled debt restructuring and still accruing at September 30, 2011 and December 31, 2010 were $13.3 million and $12.5 million, respectively. Troubled debt restructurings with six months of performance are considered in the allowance for loan losses similar to other performing loans. Troubled debt restructurings which are non-accrual or classified are considered in the allowance for loan losses similar to other non-accrual or classified loans.

The Company adopted Accounting Standards Update No. 2011-02 which clarified the guidance on a creditor's evaluation of whether it has granted a concession and whether a restructuring constitutes a troubled debt restructuring. The adoption of the Accounting Standards Update did not result in a material change to the Company's consolidated financial statements.

The following table presents information about troubled debt restructurings which occurred during the three and nine months ended September 30, 2011 and troubled debt restructurings modified within the previous year and which defaulted during the three and nine months ended September 30, 2011 (in thousands):

	Number of Loans		Pre-modification Recorded  Investment		Post-modification Recorded  Investment
Three months ended September 30, 2011
Troubled Debt Restructurings:
Residential real estate:
Originated by Bank		2	$	295	$	295
Originated by Columbia		—		—		—
Originated by Columbia – non-prime		—		—		—
Residential construction		—		—		—
Commercial real estate:
Commercial		1		2,436		2,436
Construction and land		—		—		—
Consumer		1		131		131
Commercial		—		—		—

	Number of Loans		Recorded Investment
Troubled Debt Restructurings
Which Subsequently Defaulted:
Residential real estate:
Originated by Bank		1	$	669
Originated by Columbia
Originated by Columbia – non-prime		—		—
Residential Construction		—		—
Commercial real estate:
Commercial		1		629
Construction and land		—		—
Consumer		—		—
Commercial		—		—

	Number of Loans		Pre-modification Recorded  Investment		Post-modification Recorded  Investment
Nine months ended September 30, 2011
Troubled Debt Restructurings:
Residential real estate:
Originated by Bank		10	$	2,121	$	2,121
Originated by Columbia		—		—		—
Originated by Columbia – non-prime		6		1,746		1,746
Residential construction		—		—		—
Commercial real estate:
Commercial		3		3,747		3,747
Construction and land		—		—		—
Consumer		3		403		403
Commercial		—		—		—

	Number of Loans		Recorded Investment
Troubled Debt Restructurings
Which Subsequently Defaulted:
Residential real estate:
Originated by Bank		1	$	669
Originated by Columbia		1		375
Originated by Columbia – non-prime		—		—
Residential Construction		—		—
Commercial real estate:
Commercial		2		675
Construction and land		—		—
Consumer		—		—
Commercial		—		—