Loans Receivable and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2015

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 and Covered Loans by Class and Performance Status

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.

Schedule of Changes in Allowance for Loan Losses

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

Schedule of FDIC Loss Sharing Receivable



	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

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

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

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

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

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 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

Credit Ratings of Covered and Non-Covered Loan Portfolio

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

Schedule of 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

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, 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