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Loans Receivable (Tables)

12 Months Ended

Dec. 31, 2019

Loans and Leases Receivable Disclosure [Abstract]

Loans receivable at December 31, 2019 and December 31, 2018 consisted of the following portfolio segments and classes:



	December 31, 2019			December 31, 2018
	(In thousands)
Commercial business:
Commercial and industrial	$	851,834		$	853,606
Owner-occupied commercial real estate	806,609			779,814
Non-owner occupied commercial real estate	1,291,592			1,304,463
Total commercial business	2,950,035			2,937,883
One-to-four family residential	132,088			101,763
Real estate construction and land development:
One-to-four family residential	104,910			102,730
Five or more family residential and commercial properties	171,777			112,730
Total real estate construction and land development	276,687			215,460
Consumer	406,628			395,545
Gross loans receivable	3,765,438			3,650,651
Net deferred loan costs	2,441			3,509
Loans receivable, net	3,767,879			3,654,160
Allowance for loan losses	(36,171		)	(35,042		)
Total loans receivable, net	$	3,731,708		$	3,619,118

Loans receivable by credit quality indicator

The following tables present the balance of the loans receivable by credit quality indicator as of December 31, 2019 and December 31, 2018:



	December 31, 2019
	Pass		Special Mention		Substandard		Doubtful/Loss		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	771,155	$	16,339	$	64,340	$	—	$	851,834
Owner-occupied commercial real estate	766,717		24,682		15,210		—		806,609
Non-owner occupied commercial real estate	1,277,305		5,676		8,611		—		1,291,592
Total commercial business	2,815,177		46,697		88,161		—		2,950,035
One-to-four family residential	131,245		—		843		—		132,088
Real estate construction and land development:
One-to-four family residential	102,587		1,516		807		—		104,910
Five or more family residential and commercial properties	171,095		682		—		—		171,777
Total real estate construction and land development	273,682		2,198		807		—		276,687
Consumer	402,492		—		3,612		524		406,628
Gross loans receivable	$	3,622,596	$	48,895	$	93,423	$	524	$	3,765,438



	December 31, 2018
	Pass		Special Mention		Substandard		Doubtful/Loss		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	788,395	$	16,168	$	49,043	$	—	$	853,606
Owner-occupied commercial real estate	741,227		27,724		10,863		—		779,814
Non-owner occupied commercial real estate	1,283,077		9,438		11,948		—		1,304,463
Total commercial business	2,812,699		53,330		71,854		—		2,937,883
One-to-four family residential	100,401		—		1,362		—		101,763
Real estate construction and land development:
One-to-four family residential	101,519		258		953		—		102,730
Five or more family residential and commercial properties	112,678		52		—		—		112,730
Total real estate construction and land development	214,197		310		953		—		215,460
Consumer	390,808		—		4,213		524		395,545
Gross loans receivable	$	3,518,105	$	53,640	$	78,382	$	524	$	3,650,651

Schedule of nonaccrual loans

Nonaccrual loans, segregated by segments and classes of loans, were as follows as of December 31, 2019 and December 31, 2018:



	December 31, 2019		December 31, 2018
	(In thousands)
Commercial business:
Commercial and industrial	$	33,547	$	6,639
Owner-occupied commercial real estate	4,715		4,212
Non-owner occupied commercial real estate	6,069		1,713
Total commercial business	44,331		12,564
One-to-four family residential	19		71
Real estate construction and land development:
One-to-four family residential	—		899
Total real estate construction and land development	—		899
Consumer	186		169
Nonaccrual loans	$	44,536	$	13,703

Past due financing receivables

The balances of past due loans, segregated by segments and classes of loans, as of December 31, 2019 and December 31, 2018 were as follows:



	December 31, 2019
	30-89 Days		90 Days or Greater		Total Past Due		Current		Total		PCI Loans		Gross Loan Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	10,476	$	6,774	$	17,250	$	832,217	$	849,467	$	2,367	$	851,834
Owner-occupied commercial real estate	607		806		1,413		800,282		801,695		4,914		806,609
Non-owner occupied commercial real estate	554		1,843		2,397		1,283,704		1,286,101		5,491		1,291,592
Total commercial business	11,637		9,423		21,060		2,916,203		2,937,263		12,772		2,950,035
One-to-four family residential	797		—		797		127,712		128,509		3,579		132,088
Real estate construction and land development:					—
One-to-four family residential	1,516		—		1,516		103,394		104,910		—		104,910
Five or more family residential and commercial properties	—		—		—		171,777		171,777		—		171,777
Total real estate construction and land development	1,516		—		1,516		275,171		276,687		—		276,687
Consumer	2,020		—		2,020		402,846		404,866		1,762		406,628
Total	$	15,970	$	9,423	$	25,393	$	3,721,932	$	3,747,325	$	18,113	$	3,765,438



	December 31, 2018
	30-89 Days		90 Days or Greater		Total Past Due		Current		Total		PCI Loans		Gross Loan Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	2,711	$	2,281	$	4,992	$	845,181	$	850,173	$	3,433	$	853,606
Owner-occupied commercial real estate	513		408		921		771,678		772,599		7,215		779,814
Non-owner occupied commercial real estate	3,412		1,103		4,515		1,292,889		1,297,404		7,059		1,304,463
Total commercial business	6,636		3,792		10,428		2,909,748		2,920,176		17,707		2,937,883
One-to-four family residential	227		—		227		98,221		98,448		3,315		101,763
Real estate construction and land development:	—		—				—
One-to-four family residential	665		234		899		101,451		102,350		380		102,730
Five or more family residential and commercial properties	—		—		—		112,687		112,687		43		112,730
Total real estate construction and land development	665		234		899		214,138		215,037		423		215,460
Consumer	2,559		—		2,559		389,524		392,083		3,462		395,545
Total	$	10,087	$	4,026	$	14,113	$	3,611,631	$	3,625,744	$	24,907	$	3,650,651

Schedule of impaired loans, including restructured

Impaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance, excluding PCI loans. The balances of impaired loans as of December 31, 2019 and December 31, 2018 are set forth in the following tables:



	December 31, 2019
	Recorded Investment With No Specific Valuation Allowance		Recorded Investment With Specific Valuation Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Specific Valuation Allowance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,187	$	13,631	$	43,818	$	45,585	$	1,372
Owner-occupied commercial real estate	3,922		2,414		6,336		6,764		426
Non-owner occupied commercial real estate	5,314		1,016		6,330		6,458		146
Total commercial business	39,423		17,061		56,484		58,807		1,944
One-to-four family residential	—		216		216		223		56
Real estate construction and land development:
One-to-four family residential	237		—		237		237		—
Total real estate construction and land development	237		—		237		237		—
Consumer	—		554		554		570		143
Total	$	39,660	$	17,831	$	57,491	$	59,837	$	2,143



	December 31, 2018
	Recorded Investment With No Specific Valuation Allowance		Recorded Investment With Specific Valuation Allowance		Total Recorded Investment		Unpaid Contractual Principal Balance		Related Specific Valuation Allowance
	(In thousands)
Commercial business:
Commercial and industrial	$	2,523	$	20,119	$	22,642	$	24,176	$	2,607
Owner-occupied commercial real estate	816		5,000		5,816		6,150		1,142
Non-owner occupied commercial real estate	3,352		2,924		6,276		6,414		206
Total commercial business	6,691		28,043		34,734		36,740		3,955
One-to-four family residential	—		279		279		293		76
Real estate construction and land development:
One-to-four family residential	899		—		899		1,662		—
Total real estate construction and land development	899		—		899		1,662		—
Consumer	—		527		527		538		139
Total	$	7,590	$	28,849	$	36,439	$	39,233	$	4,170

Schedule of average recorded investment impaired loans including restructuring loans

The average recorded investment of impaired loans for the year ended December 31, 2019, 2018 and 2017 are set forth in the following table:



	Year Ended December 31,
	2019		2018		2017
	(In thousands)
Commercial business:
Commercial and industrial	$	31,906	$	16,773	$	11,310
Owner-occupied commercial real estate	6,009		11,312		5,401
Non-owner occupied commercial real estate	7,752		9,465		12,162
Total commercial business	45,667		37,550		28,873
One-to-four family residential	243		290		309
Real estate construction and land development:
One-to-four family residential	682		1,091		2,315
Five or more family residential and commercial properties	—		129		903
Total real estate construction and land development	682		1,220		3,218
Consumer	574		428		351
Total	$	47,166	$	39,488	$	32,751

Recorded investment balance and related allowance for loan losses of accruing and non-accruing TDRs

The recorded investment balance and related allowance for loan losses of performing and nonaccrual TDR loans as of December 31, 2019 and December 31, 2018 were as follows:



	December 31, 2019				December 31, 2018
	Performing TDR loans		Nonaccrual TDR loans		Performing TDR loans		Nonaccrual TDRs loans
	(In thousands)
TDR loans	$	14,466	$	26,343	$	22,736	$	6,943
Allowance for loan losses on TDR loans	1,300		218		2,257		658

Troubled debt restructurings on financing receivables

Loans that were modified as TDR loans during the years ended December 31, 2019, 2018 and 2017 are set forth in the following table:



	Year Ended December 31,
	2019			2018			2017
	Number of Contracts ⁽¹⁾	Recorded Investment ⁽¹⁾⁽²⁾		Number of Contracts ⁽¹⁾	Recorded Investment ⁽¹⁾⁽²⁾		Number of Contracts ⁽¹⁾	Recorded Investment ⁽¹⁾⁽²⁾
	(Dollars in thousands)
Commercial business:
Commercial and industrial	44	$	31,129	31	$	16,129	19	$	7,212
Owner-occupied commercial real estate	4	1,695		4	2,521		3	1,366
Non-owner occupied commercial real estate	4	2,208		3	2,944		4	9,574
Total commercial business	52	35,032		38	21,594		26	18,152
Real estate construction and land development:
One-to-four family residential	1	237		2	665		2	938
Total real estate construction and land development	1	237		2	665		2	938
Consumer	12	153		13	236		8	110
Total TDR loans	65	$	35,422	53	$	22,495	36	$	19,200


⁽¹⁾	Number of contracts and outstanding principal balance represent loans which have balances as of period end as certain loans may have been paid-down or charged-off during the years ended December 31, 2019, 2018 and 2017.

⁽²⁾

Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modification, the Bank’s recorded investment in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification), except when the modification was the initial advance on a one-to-four family residential real estate construction and land development loan under a master guidance line. There were no advances on these types of loans during the years ended December 31, 2019, 2018 and 2017.

Troubled debt restructuring loans, subsequently defaulted

Loans that were modified during the previous twelve months that subsequently defaulted during the years ended December 31, 2019, 2018 and 2017 are included in the following table:



	Year Ended December 31,
	2019			2018			2017
	Number of Contracts	Recorded Investment ⁽¹⁾		Number of Contracts	Recorded Investment ⁽¹⁾		Number of Contracts	Recorded Investment ⁽¹⁾
	(Dollars in thousands)
Commercial business:
Commercial and industrial	13	$	12,856	5	$	1,890	1	$	283
Owner-occupied commercial real estate	3	1,142		1	65		1	80
Non-owner occupied commercial real estate	1	52		—	—		—	—
Total commercial business	17	14,050		6	1,955		2	363
Real estate construction and land development:
One-to-four family residential	—	—		2	665		2	938
Total real estate construction and land development	—	—		2	665		2	938
Consumer	—	—		—	—		1	7
Total	17	$	14,050	8	$	2,620	5	$	1,308

⁽¹⁾

Number of contracts and outstanding principal balance represent loans which have balances as of period end as certain loans may have been paid-down or charged-off during the years ended December 31, 2019, 2018 and 2017.

Purchased impaired loans

The following table reflects the outstanding principal balance and recorded investment of the PCI loans at December 31, 2019 and December 31, 2018:



	December 31, 2019				December 31, 2018
	Outstanding Principal		Recorded Investment		Outstanding Principal		Recorded Investment
	(In thousands)
Commercial business:
Commercial and industrial	$	4,439	$	2,367	$	6,319	$	3,433
Owner-occupied commercial real estate	4,925		4,914		7,830		7,215
Non-owner occupied commercial real estate	7,028		5,491		8,685		7,059
Total commercial business	16,392		12,772		22,834		17,707
One-to-four family residential	3,095		3,579		3,169		3,315
Real estate construction and land development:
One-to-four family residential	—		—		67		380
Five or more family residential and commercial properties	—		—		188		43
Total real estate construction and land development	—		—		255		423
Consumer	1,463		1,762		2,203		3,462
Gross PCI loans	$	20,950	$	18,113	$	28,461	$	24,907

Schedule of impaired purchased loans accretable yield

The following table summarizes the accretable yield on the PCI loans for the years ended December 31, 2019, 2018 and 2017:



	Year Ended December 31,
	2019			2018			2017
	(In thousands)
Balance at the beginning of the year	$	9,493		$	11,224		$	13,860
Accretion	(1,936		)	(2,674		)	(3,471		)
Disposal and other	(1,600		)	(2,871		)	(2,758		)
Reclassification from nonaccretable difference	884			3,814			3,593
Balance at the end of the year	$	6,841		$	9,493		$	11,224

Activity in related party loans

Activity in related party loans for the years ended December 31, 2019, 2018 and 2017 was as follows:



	Year Ended December 31,
	2019			2018			2017
	(In thousands)
Balance outstanding at the beginning of year	$	8,367		$	8,460		$	19,917
Elimination of outstanding loan balance due to change in related party status	—			—			(10,930		)
Principal additions	—			211			—
Principal reductions	(223		)	(304		)	(527		)
Balance outstanding at the end of year	$	8,144		$	8,367		$	8,460

Mortgage banking activities

The following table presents information concerning the origination and sale of the Bank's one-to-four family residential loans and the gains from the sale of loans as a result of the Bank's mortgage banking activities:



	Year Ended December 31,
	2019		2018		2017
	(In thousands)
One-to-four family residential loans:
Originated ⁽¹⁾	$	150,030	$	121,998	$	144,066
Sold	68,238		76,834		113,786
Gain on sale of loans, net ⁽²⁾	2,159		2,403		3,412


⁽¹⁾	Includes loans originated for sale in the secondary market or for the Bank's loan portfolio.

⁽²⁾

Excludes net gains on sales of SBA and other loans.

Contractual amounts of commitments to sell and fund with off-balance sheet risk

The contractual amounts of commitments to sell and fund with off-balance sheet risk at December 31, 2019 and 2018 were as follows:



	December 31, 2019		December 31, 2018
	(In thousands)
Commitments to sell mortgage loans	$	8,815	$	3,910

Commitments to fund mortgage loans (at interest rates approximating market rates) for portfolio or for sale:
Fixed rate	$	15,509	$	6,593
Variable or adjustable rate	3,111		1,008
Total commitments to fund mortgage loans	$	18,620	$	7,601

Details of SBNA loans serviced

Details of loans serviced are as follows:



	December 31, 2019		December 31, 2018
	(In thousands)
Loans serviced for others with participating interest, gross loan balance	$	40,616	$	54,335
Loans serviced for others with participating interest, participation balance owned by Bank⁽¹⁾	9,850		12,715

⁽¹⁾ Included in the balances of total loans receivable, net on the Company's Consolidated Statements of Financial Condition.

Changes in Servicing Asset

The Company's servicing asset at December 31, 2019 was $361,000. The activity and balances for the years ended December 31, 2018 and 2017 was not significant.

Fair value for the annual impairment analysis was determined using discount rates ranging from 10.0% to 12.8% and prepayment speeds from 11.5% to 19.7%. There was no valuation allowance as of December 31, 2019, 2018, and 2017.