LOANS RECEIVABLE AND ALLOWANCE FOR LOAN LOSSES

The following table presents loans receivable as of March 31, 2015 and December 31, 2014:



	March 31,			December 31,
	2015			2014
(amounts in thousands)
Commercial:
Multi-family	$	2,053,379		$	2,127,034
Commercial real estate	1,177,725			1,132,072
Commercial and industrial	606,091			540,430
Construction	62,430			56,669
Total commercial loans	3,899,625			3,856,205
Consumer:
Residential real estate	277,167			285,003
Manufactured housing	121,622			126,731
Other	1,324			1,541
Total consumer loans	400,113			413,275
Total loans receivable not covered under FDIC loss sharing agreements	4,299,738			4,269,480
Commercial:
Commercial real estate	16,347			17,585
Commercial and industrial	1,746			2,235
Construction	3,975			6,705
Multi-family	361			372
Total commercial loans	22,429			26,897
Consumer:
Residential real estate	12,159			12,392
Other	2,777			2,892
Total consumer loans	14,936			15,284
Total loans receivable covered under FDIC loss sharing agreements (1)	37,365			42,181
Total loans receivable	4,337,103			4,311,661
Deferred (fees) costs and unamortized premiums/(discounts), net	748			512
Allowance for loan losses	(33,566		)	(30,932		)
Loans receivable, net	$	4,304,285		$	4,281,241


(1)	Loans that were acquired in two FDIC-assisted transactions and are covered under loss sharing agreements with the FDIC are referred to as “covered” loans throughout these financial statements.

Non-Covered Loans

The following tables summarize non-covered loans by loan type and performance status as of March 31, 2015 and December 31, 2014:



	March 31, 2015
	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)
Commercial real estate	$	288	$	—	$	288	$	3,436	$	1,147,262	$	26,739	$	1,177,725
Multi-family	—		—		—		—		2,050,830		2,549		2,053,379
Commercial and industrial	—		—		—		2,307		602,407		1,377		606,091
Construction	—		—		—		—		62,343		87		62,430
Residential real estate	289		—		289		946		266,670		9,262		277,167
Other consumer	—		—		—		—		1,129		195		1,324
Manufactured housing (5)	3,896		4,546		8,442		1,047		108,258		3,875		121,622
Total	$	4,473	$	4,546	$	9,019	$	7,736	$	4,238,899	$	44,084	$	4,299,738
	December 31, 2014
	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)
Commercial real estate	$	—	$	—	$	—	$	3,450	$	1,101,119	$	27,503	$	1,132,072
Multi-family	—		—		—		—		2,124,448		2,586		2,127,034
Commercial and industrial	366		—		366		2,257		536,326		1,481		540,430
Construction	—		—		—		—		56,510		159		56,669
Residential real estate	1,226		—		1,226		849		273,565		9,363		285,003
Other consumer	—		—		—		—		1,333		208		1,541
Manufactured housing (5)	6,324		4,388		10,712		931		111,072		4,016		126,731
Total	$	7,916	$	4,388	$	12,304	$	7,487	$	4,204,373	$	45,316	$	4,269,480


(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 subject to 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.

Covered Loans

The following tables summarize covered loans by loan type and performance status as of March 31, 2015 and December 31, 2014:



	March 31, 2015
	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)
Commercial and industrial	$	26	$	—	$	26	$	158	$	825	$	737	$	1,746
Multi-family	—		—		—		—		361		—		361
Commercial real estate	25		—		25		497		10,765		5,060		16,347
Construction	—		—		—		2,325		—		1,650		3,975
Residential real estate	294		—		294		1,006		10,255		604		12,159
Other consumer	136		—		136		73		2,529		39		2,777
Total	$	481	$	—	$	481	$	4,059	$	24,735	$	8,090	$	37,365
	December 31, 2014
	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)
Commercial and industrial	$	518	$	—	$	518	$	165	$	361	$	1,191	$	2,235
Multi-family	—		—		—		—		372		—		372
Commercial real estate	—		—		—		615		11,884		5,086		17,585
Construction	—		—		—		2,325		—		4,380		6,705
Residential real estate	—		—		—		1,006		10,782		604		12,392
Other consumer	147		—		147		135		2,570		40		2,892
Total	$	665	$	—	$	665	$	4,246	$	25,969	$	11,301	$	42,181


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


(2)	Purchased loans in FDIC assisted transactions with no evidence of credit deterioration since origination.

(3)


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

Allowance for Loan Losses and FDIC Loss Sharing Receivable

Losses incurred on covered loans are eligible for partial reimbursement by the FDIC. Subsequent to the purchase date, the expected cash flows on the covered loans are subject to evaluation. Decreases in the present value of expected cash flows on the covered loans are recognized by increasing the allowance for loan losses with a related charge to the provision for loan losses. At the same time, the FDIC indemnification asset is increased reflecting an estimated future collection from the FDIC, which is recorded as a reduction to the provision for loan losses. If the expected cash flows on the covered loans increase such that a previously recorded impairment can be reversed, the Bancorp records a reduction in the allowance for loan losses (with a related credit to the provision for loan losses) accompanied by a reduction in the FDIC receivable balance and a charge to the provision for loan losses. Increases in expected cash flows of covered loans and decreases in expected cash flows of the FDIC loss sharing receivable, when there are no previously recorded impairments, are considered together and recognized over the remaining life of the loans as interest income. The FDIC loss sharing receivable balance will be reduced through a charge to the provision for loan losses, with no offsetting reduction to the allowance for loan losses, as the FDIC loss sharing arrangements reach their contractual maturities and the estimated losses in the covered loans have not yet emerged or been realized in a final disposition event. The FDIC loss sharing arrangements for non-single family loans expire in third quarter 2015. The loss sharing arrangements for single family loans expire in third quarter 2020.

The following table presents changes in the allowance for loan losses and the FDIC loss sharing receivable for the three months ended March 31, 2015 and 2014.



	Allowance for Loan Losses Three Months Ended March 31,
(amounts in thousands)	2015			2014
Beginning balance	$	30,932		$	23,998
Provision for loan losses (1)	3,635			2,901
Charge-offs	(1,144		)	(536		)
Recoveries	143			341
Ending balance	$	33,566		$	26,704



	FDIC Loss Sharing Receivable Three Months Ended March 31,
(amounts in thousands)	2015			2014
Beginning balance	$	2,320		$	10,046
Increased (decreased) estimated cash flows (2)	671			(1,467		)
Other activity, net (a)	134			990
Cash payments to/(from) FDIC	302			(1,297		)
Ending balance	$	3,427		$	8,272

(1) Provision for loan losses	$	3,635		$	2,901
(2) Effect attributable to FDIC loss share arrangements	(671		)	1,467
Net amount reported as provision for loan losses	$	2,964		$	4,368


(a)	Includes external costs, such as legal fees, real estate taxes, and appraisal expenses, which qualify for reimbursement under loss sharing arrangements

Loans Individually Evaluated for Impairment — Covered and Non-Covered

The following tables present the recorded investment (net of charge-offs), unpaid principal balance, and related allowance by loan type for loans that are individually evaluated for impairment as of March 31, 2015 and December 31, 2014 and the average recorded investment and interest income recognized for the three months ended March 31, 2015 and 2014. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.



	March 31, 2015						Three Months Ended March 31, 2015
	Recorded Investment Net of Charge offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(amounts in thousands)
With no related allowance recorded:
Commercial and industrial	$	6,922	$	8,376	$	—	$	10,374	$	164
Commercial real estate	11,496		11,641		—		15,237		191
Construction	2,325		3,594		—		2,325		—
Other consumer	20		20		—		21		—
Residential real estate	1,438		1,438		—		1,447		—
With an allowance recorded:
Commercial and industrial	6,478		6,488		2,295		4,156		5
Commercial real estate	1,409		1,409		864		1,410		—
Construction	—		—		—		—		—
Other consumer	53		53		25		84		1
Residential real estate	362		362		185		364		—
Total	$	30,503	$	33,381	$	3,369	$	35,418	$	361



	December 31, 2014						Three Months Ended March 31, 2014
	Recorded Investment Net of Charge offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
(amounts in thousands)
With no related allowance recorded:
Commercial and industrial	$	13,825	$	15,348	$	—	$	12,003	$	99
Commercial real estate	18,977		19,121		—		17,139		274
Construction	2,325		2,325		—		2,551		—
Other consumer	21		21		—		3		—
Residential real estate	1,455		3,697		—		2,391		13
With an allowance recorded:
Commercial and industrial	1,833		1,833		818		1,653		8
Commercial real estate	1,410		1,410		304		2,350		1
Construction	—		—		—		1,350		15
Other consumer	114		114		32		64		1
Residential real estate	365		365		188		251		1
Total	$	40,325	$	44,234	$	1,342	$	39,755	$	412

Troubled Debt Restructurings

At March 31, 2015 and 2014, there were $5.2 million and $5.1 million, respectively, in loans reported as troubled debt restructurings (“TDRs”). TDRs are reported as impaired loans in the calendar year of their restructuring and are evaluated to determine whether they should be placed on non-accrual status. In subsequent years, a TDR may be returned to accrual status if it satisfies a minimum six-month performance requirement; however, it will remain classified as impaired. Generally, the Bancorp requires sustained performance for nine months before returning a TDR to accrual status.

Modification of purchased-credit-impaired loans that are accounted for within loan pools in accordance with the accounting standards for purchased-credit-impaired loans do not result in the removal of these loans from the pool even if modifications would otherwise be considered a TDR. Accordingly, as each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, modifications of loans within such pools are not considered TDRs.

The following is an analysis of loans modified in a troubled debt restructuring by type of concession for the three months ended March 31, 2015 and 2014. There were no modifications that involved forgiveness of debt.



	TDRs in Compliance with Their Modified Terms and Accruing Interest		TDRs in Compliance with Their Modified Terms and Not Accruing Interest		Total
(amounts in thousands)
Three Months Ended March 31, 2015
Extended under forbearance	$	—	$	—	$	—
Multiple extensions resulting from financial difficulty	—		—		—
Interest-rate reductions	198		207		405
Total	$	198	$	207	$	405
Three Months Ended March 31, 2014
Extended under forbearance	$	—	$	—	$	—
Multiple extensions resulting from financial difficulty	—		—		—
Interest-rate reductions	247		127		374
Total	$	247	$	127	$	374

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, 2015 and 2014.



	TDRs in Compliance with Their Modified Terms and Accruing Interest			TDRs in Compliance with Their Modified Terms and Not Accruing Interest
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(amounts in thousands)
Three Months Ended March 31, 2015
Commercial and industrial	—	$	—	—	$	—
Commercial real estate	—	—		—	—
Construction	—	—		—	—
Manufactured housing	—	—		2	207
Residential real estate	1	198		—	—
Other consumer	—	—		—	—
Total	1	$	198	2	$	207
Three Months Ended March 31, 2014
Commercial and industrial	—	$	—	—	$	—
Commercial real estate	—	—		—	—
Construction	—	—		—	—
Manufactured housing	1	47		2	127
Residential real estate	3	200		—	—
Other consumer	—	—		—	—
Total	4	$	247	2	$	127

At March 31, 2015 and 2014, there were no commitments to lend additional funds to debtors whose terms have been modified in TDRs.

For the three months ended March 31, 2015 and 2014, the recorded investment of loans determined to be TDRs was $0.4 million and $0.4 million, respectively, both before and after restructuring. During the three month period ended March 31, 2015, two manufactured housing TDR loans defaulted with a recorded investment of $0.2 million. There were two TDRs that defaulted in the three month period ended March 31, 2014, with a recorded investment of $0.1 million.

Loans modified in troubled debt restructurings are evaluated for impairment. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for credit losses. There were no specific allowances resulting from TDR modifications during the three months ended March 31, 2015 and 2014.

Credit Quality Indicators

Commercial and industrial, multi-family, commercial real estate, residential real estate and construction loans are rated based on an internally assigned risk rating system which is assigned at the time of loan origination and reviewed on a periodic or on an “as needed” basis. Consumer, mortgage warehouse and manufactured housing loans are evaluated based on the payment activity of the loan and are not assigned internal risk ratings.

To facilitate the monitoring of credit quality within the commercial and industrial, commercial real estate, construction, multi-family and residential real estate classes, and for purposes of analyzing historical loss rates used in the determination of the allowance for loan losses for the respective portfolio class, the Bank utilizes the following categories of risk ratings: pass/satisfactory (includes risk rating 1 through 6), special mention, substandard, doubtful, and loss. The risk rating categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass/satisfactory ratings, which are assigned to those borrowers who do not have identified potential or well-defined weaknesses and for whom there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter. While assigning risk ratings involves judgment, the risk-rating process allows management to identify riskier credits in a timely manner and allocate the appropriate resources to manage those loans.

The risk rating grades are defined as follows:

“1” – Pass/Excellent

Loans rated 1 represent a credit extension of the highest quality. The borrower’s historic (at least five years) cash flows manifest extremely large and stable margins of coverage. Balance sheets are conservative, well capitalized, and liquid. After considering debt service for proposed and existing debt, projected cash flows continue to be strong and provide ample coverage. The borrower typically reflects broad geographic and product diversification and has access to alternative financial markets.

“2” – Pass/Superior

Loans rated 2 are those for which the borrower has a strong financial condition, balance sheet, operations, cash flow, debt capacity and coverage with ratios better than industry norms. The borrowers of these loans exhibit a limited leverage position, borrowers are virtually immune to local economies in stable growing industries, and where management is well respected and the company has ready access to public markets.

“3” – Pass/Strong

Loans rated 3 are those loans for which the borrower has above average financial condition and flexibility; more than satisfactory debt service coverage, balance sheet and operating ratios are consistent with or better than industry peers, have little industry risk, move in diversified markets and are experienced and competent in their industry. These borrowers’ access to capital markets is limited mostly to private sources, often secured, but the borrower typically has access to a wide range of refinancing alternatives.

“4” – Pass/Good

Loans rated 4 have a sound primary and secondary source of repayment. The borrower may have access to alternative sources of financing, but sources are not as widely available as they are to a higher grade borrower. These loans carry a normal level of risk, with very low loss exposure. The borrower has the ability to perform according to the terms of the credit facility. The margins of cash flow coverage are satisfactory but vulnerable to more rapid deterioration than the higher quality loans.

“5” – Satisfactory

Loans rated 5 are extended to borrowers who are determined to be a reasonable credit risk and demonstrate the ability to repay the debt from normal business operations. Risk factors may include reliability of margins and cash flows, liquidity, dependence on a single product or industry, cyclical trends, depth of management, or limited access to alternative financing sources. The borrower’s historical financial information may indicate erratic performance, but current trends are positive and the quality of financial information is adequate, but is not as detailed and sophisticated as information found on higher grade loans. If adverse circumstances arise, the impact on the borrower may be significant.

“6” – Satisfactory/Bankable with Care

Loans rated 6 are those for which the borrower has higher than normal credit risk; however, cash flow and asset values are generally intact. These borrowers may exhibit declining financial characteristics, with increasing leverage and decreasing liquidity and may have limited resources and access to financial alternatives. Signs of weakness in these borrowers may include delinquent taxes, trade slowness and eroding profit margins.

“7” – Special Mention

Loans rated Special Mention are credit facilities that may have potential developing weaknesses and deserve extra attention from the account manager and other management personnel. In the event that potential weaknesses are not corrected or mitigated, deterioration in the ability of the borrower to repay the debt in the future may occur. This grade is not assigned to loans that bear certain peculiar risks normally associated with the type of financing involved, unless circumstances have caused the risk to increase to a level higher than would have been acceptable when the credit was originally approved. Loans where significant actual, not potential, weaknesses or problems are clearly evident are graded in the category below.

“8” – Substandard

Loans are classified Substandard when the loans are inadequately protected by the current sound worth and payment capacity of the obligor or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the Company will sustain some loss if the weaknesses are not corrected.

“9” – Doubtful

The Bank assigns a doubtful rating to loans that have all the attributes of a substandard rating 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. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.

“10” – Loss

The Bank assigns a loss rating to loans considered uncollectible and of such little value that their continuance as an active asset is not warranted. Amounts classified as loss are immediately charged off.

Risk ratings are not established for home equity loans, consumer loans, and installment loans, mainly because these portfolios consist of a larger number of homogenous loans with smaller balances. Instead, these portfolios are evaluated for risk mainly based upon aggregate payment history through the monitoring of delinquency levels and trends and are classified as performing and nonperforming.

The following tables present the credit ratings of the non-covered loan portfolio as of March 31, 2015 and December 31, 2014:



	March 31, 2015
	Commercial and Industrial		Commercial Real Estate		Multi-family		Construction		Residential Real Estate		Other Consumer		Manufactured Housing		Total
(amounts in thousands)
Pass/Satisfactory	$	592,072	$	1,160,583	$	2,053,379	$	62,430	$	275,426	$	—	$	—	$	4,143,890
Special Mention	11,484		10,608		—		—		—		—		—		22,092
Substandard	2,535		6,534		—		—		1,741		—		—		10,810
Performing (1)	—		—		—		—		—		1,324		112,133		113,457
Non-performing (2)	—		—		—		—		—		—		9,489		9,489
Total	$	606,091	$	1,177,725	$	2,053,379	$	62,430	$	277,167	$	1,324	$	121,622	$	4,299,738



	December 31, 2014
	Commercial and Industrial		Commercial Real Estate		Multi-family		Construction		Residential Real Estate		Other Consumer		Manufactured Housing		Total
(amounts in thousands)
Pass/Satisfactory	$	524,848	$	1,109,565	$	2,127,034	$	56,669	$	283,240	$	—	$	—	$	4,101,356
Special Mention	13,238		16,002		—		—		243		—		—		29,483
Substandard	2,344		6,505		—		—		1,520		—		—		10,369
Performing (1)	—		—		—		—		—		1,541		115,088		116,629
Non-performing (2)	—		—		—		—		—		—		11,643		11,643
Total	$	540,430	$	1,132,072	$	2,127,034	$	56,669	$	285,003	$	1,541	$	126,731	$	4,269,480


(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.

The following tables present the credit ratings of the covered loan portfolio as of March 31, 2015 and December 31, 2014:



	March 31, 2015
	Commercial and Industrial		Commercial Real Estate		Multi-family		Construction		Residential Real Estate		Other Consumer		Total
(amounts in thousands)
Pass/Satisfactory	$	1,061	$	10,117	$	361	$	—	$	10,752	$	—	$	22,291
Special Mention	—		4,046		—		—		—		—		4,046
Substandard	685		2,184		—		3,975		1,407		—		8,251
Performing (1)	—		—		—		—		—		2,568		2,568
Non-performing (2)	—		—		—		—		—		209		209
Total	$	1,746	$	16,347	$	361	$	3,975	$	12,159	$	2,777	$	37,365



	December 31, 2014
	Commercial and Industrial		Commercial Real Estate		Multi-family		Construction		Residential Real Estate		Other Consumer		Total
(amounts in thousands)
Pass/Satisfactory	$	1,104	$	10,207	$	372	$	—	$	10,985	$	—	$	22,668
Special Mention	—		5,076		—		—		—		—		5,076
Substandard	1,131		2,302		—		6,705		1,407		—		11,545
Performing (1)	—		—		—		—		—		2,610		2,610
Non-performing (2)	—		—		—		—		—		282		282
Total	$	2,235	$	17,585	$	372	$	6,705	$	12,392	$	2,892	$	42,181


(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.

As of March 31, 2015, the Bank had $5.3 million of residential real estate held in other real estate owned. As of March 31, 2015, the Bank had initiated foreclosure proceedings on residential real estate securing outstanding loan balances of $0.2 million.

Allowance for loan losses

The changes in the allowance for loan losses for the three months ended March 31, 2015 and 2014 and the loans and allowance for loan losses by loan class based on impairment evaluation method are as follows. The amounts presented for the provision for loan losses below do not include the effect of changes to estimated benefits resulting from the FDIC loss share arrangements for the covered loans.



Three Months Ended March 31, 2015	Commercial and Industrial			Commercial Real Estate			Multi-family			Construction			Residential Real Estate		Manufactured Housing		Other Consumer			Total
(amounts in thousands)
Beginning Balance, January 1, 2015	$	4,746		$	13,572		$	8,493		$	1,047		$	2,698	$	262	$	114		$	30,932
Charge-offs	(21		)	(318		)	—			(769		)	—		—		(36		)	(1,144		)
Recoveries	45			—			—			15			—		—		83			143
Provision for loan losses	1,977			1,067			(297		)	559			297		84		(52		)	3,635
Ending Balance, March 31, 2015	$	6,747		$	14,321		$	8,196		$	852		$	2,995	$	346	$	109		$	33,566
Loans:
Individually evaluated for impairment	$	13,400		$	12,905		$	—		$	2,325		$	1,800	$	—	$	73		$	30,503
Collectively evaluated for impairment	592,323			1,149,368			2,051,191			62,343			277,660		117,747		3,794			4,254,426
Loans acquired with credit deterioration	2,114			31,799			2,549			1,737			9,866		3,875		234			52,174
	$	607,837		$	1,194,072		$	2,053,740		$	66,405		$	289,326	$	121,622	$	4,101		$	4,337,103
Allowance for loan losses:
Individually evaluated for impairment	$	2,295		$	864		$	—		$	—		$	185	$	—	$	25		$	3,369
Collectively evaluated for impairment	4,294			8,645			8,196			468			1,648		90		30			23,371
Loans acquired with credit deterioration	158			4,812			—			384			1,162		256		54			6,826
	$	6,747		$	14,321		$	8,196		$	852		$	2,995	$	346	$	109		$	33,566



Three Months Ended March 31, 2014	Commercial and Industrial			Commercial Real Estate			Multi-family		Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Beginning Balance, January 1, 2014	$	2,674		$	11,478		$	4,227	$	2,385		$	2,490		$	614		$	130		$	23,998
Charge-offs	—			(248		)	—		—			(288		)	—			—			(536		)
Recoveries	90			25			—		—			224			—			2			341
Provision for loan losses	(281		)	1,377			1,993		(43		)	(119		)	(21		)	(5		)	2,901
Ending Balance, March 31, 2014	$	2,483		$	12,632		$	6,220	$	2,342		$	2,307		$	593		$	127		$	26,704
As of December 31, 2014
Loans:
Individually evaluated for impairment	$	15,658		$	20,387		$	—	$	2,325		$	1,820		$	—		$	135		$	40,325
Collectively evaluated for impairment	524,335			1,096,681			2,124,820		56,510			285,608			122,715			4,050			4,214,719
Loans acquired with credit deterioration	2,672			32,589			2,586		4,539			9,967			4,016			248			56,617
	$	542,665		$	1,149,657		$	2,127,406	$	63,374		$	297,395		$	126,731		$	4,433		$	4,311,661
Allowance for loan losses:
Individually evaluated for impairment	$	818		$	304		$	—	$	—		$	188		$	—		$	32		$	1,342
Collectively evaluated for impairment	3,766			8,336			8,493		424			1,436			92			28			22,575
Loans acquired with credit deterioration	162			4,932			—		623			1,074			170			54			7,015
	$	4,746		$	13,572		$	8,493	$	1,047		$	2,698		$	262		$	114		$	30,932

The non-covered manufactured housing portfolio was purchased in August 2010. A portion of the purchase price may be used to reimburse the Bank under the specified terms in the purchase agreement for defaults of the underlying borrower and other specified items. At March 31, 2015 and December 31, 2014, funds available for reimbursement, if necessary, were $1.1 million and $3.0 million, respectively. Each quarter, these funds are evaluated to determine if they would be sufficient to absorb the probable incurred losses within the manufactured housing portfolio.

The changes in accretable yield related to purchased-credit-impaired loans for the three months ended March 31, 2015 and 2014 were as follows:



	Three Months Ended March 31,
	2015			2014
(amounts in thousands)
Accretable yield balance, beginning of period	$	17,606		$	22,557
Accretion to interest income	(660		)	(1,080		)
Reclassification from nonaccretable difference and disposals, net	(1,522		)	(858		)
Accretable yield balance, end of period	$	15,424		$	20,619