Loans Receivable and Allowance for Loan Losses (Tables)

3 Months Ended

Mar. 31, 2016

The following table presents loans receivable as of March 31, 2016 and December 31, 2015:



	March 31, 2016			December 31, 2015
(amounts in thousands)
Commercial:
Multi-family	$	3,210,177		$	2,909,439
Commercial and industrial (including owner occupied commercial real estate)	1,160,389			1,111,400
Commercial real estate non-owner occupied	1,052,162			956,255
Construction	103,061			87,240
Total commercial loans	5,525,789			5,064,334
Consumer:
Residential real estate	267,031			271,613
Manufactured housing	110,830			113,490
Other	3,474			3,708
Total consumer loans	381,335			388,811
Total loans receivable	5,907,124			5,453,145
Deferred costs and unamortized premiums, net	191			334
Allowance for loan losses	(37,605		)	(35,647		)
Loans receivable, net of allowance for loan losses	$	5,869,710		$	5,417,832

Non-Covered Loans and Covered Loans by Class and Performance Status

The following tables summarize loans receivable by loan type and performance status as of March 31, 2016 and December 31, 2015:



	March 31, 2016
	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	$	—	$	—	$	—	$	—	$	3,206,569	$	3,608	$	3,210,177
Commercial and industrial	4		—		4		6,035		841,166		1,470		848,675
Commercial real estate - owner occupied	—		—		—		2,689		296,285		12,740		311,714
Commercial real estate - non-owner occupied	—		—		—		2,610		1,037,684		11,868		1,052,162
Construction	—		—		—		—		102,827		234		103,061
Residential real estate	3,487		—		3,487		2,325		253,006		8,213		267,031
Manufactured housing (5)	3,296		2,292		5,588		2,356		99,572		3,314		110,830
Other consumer	20		—		20		99		3,127		228		3,474
Total	$	6,807	$	2,292	$	9,099	$	16,114	$	5,840,236	$	41,675	$	5,907,124
	December 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)
Multi-family	$	—	$	—	$	—	$	—	$	2,905,789	$	3,650	$	2,909,439
Commercial and industrial	39		—		39		1,973		799,595		1,552		803,159
Commercial real estate - owner occupied	268		—		268		2,700		292,312		12,961		308,241
Commercial real estate - non-owner occupied	1,997		—		1,997		1,307		940,895		12,056		956,255
Construction	—		—		—		—		87,006		234		87,240
Residential real estate	2,986		—		2,986		2,202		257,984		8,441		271,613
Manufactured housing (5)	3,752		2,805		6,557		2,449		101,132		3,352		113,490
Other consumer	107		—		107		140		3,227		234		3,708
Total	$	9,149	$	2,805	$	11,954	$	10,771	$	5,387,940	$	42,480	$	5,453,145


(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.

Schedule of Allowance for Loan Losses

The changes in the allowance for loan losses for the three months ended March 31, 2016 and 2015 and the loans and allowance for loan losses by loan class based on impairment evaluation method as of March 31, 2016 and December 31, 2015 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, 2016	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, December 31, 2015	$	12,016	$	8,864	$	1,348	$	8,420	$	1,074		$	3,298	$	494		$	133		$	35,647
Charge-offs	—		—		—		—		—			—		—			(42		)	(42		)
Recoveries	—		56		—		8		433			—		—			—			497
Provision for loan losses	119		1,039		62		120		(243		)	378		(26		)	54			1,503
Ending Balance, March 31, 2016	$	12,135	$	9,959	$	1,410	$	8,548	$	1,264		$	3,676	$	468		$	145		$	37,605
As of March 31, 2016
Loans:
Individually evaluated for impairment	$	393	$	27,286	$	9,936	$	4,624	$	—		$	4,843	$	8,898		$	98		$	56,078
Collectively evaluated for impairment	3,206,176		819,919		289,038		1,035,670		102,827			253,975		98,618			3,148			5,809,371
Loans acquired with credit deterioration	3,608		1,470		12,740		11,868		234			8,213		3,314			228			41,675
	$	3,210,177	$	848,675	$	311,714	$	1,052,162	$	103,061		$	267,031	$	110,830		$	3,474		$	5,907,124
Allowance for loan losses:
Individually evaluated for impairment	$	209	$	2,834	$	1	$	135	$	—		$	445	$	—		$	46		$	3,670
Collectively evaluated for impairment	11,926		6,906		1,409		4,229		1,264			2,193		97			43			28,067
Loans acquired with credit deterioration	—		219		—		4,184		—			1,038		371			56			5,868
	$	12,135	$	9,959	$	1,410	$	8,548	$	1,264		$	3,676	$	468		$	145		$	37,605



Three Months Ended March 31, 2015	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, December 31, 2014	$	8,493		$	4,784		$	4,336	$	9,198		$	1,047		$	2,698	$	262	$	114		$	30,932
Charge-offs	—			(21		)	—		(318		)	(769		)	—		—		(36		)	(1,144		)
Recoveries	—			22			14		9			15			—		—		83			143
Provision for loan losses	(297		)	1,962			233		849			559			297		84		(52		)	3,635
Ending Balance, March 31, 2015	$	8,196		$	6,747		$	4,583	$	9,738		$	852		$	2,995	$	346	$	109		$	33,566
As of December 31, 2015
Loans:
Individually evaluated for impairment	$	661		$	17,621		$	8,329	$	4,831		$	—		$	4,726	$	8,300	$	140		$	44,608
Collectively evaluated for impairment	2,905,128			783,986			286,951		939,368			87,006			258,446		101,838		3,334			5,366,057
Loans acquired with credit deterioration	3,650			1,552			12,961		12,056			234			8,441		3,352		234			42,480
	$	2,909,439		$	803,159		$	308,241	$	956,255		$	87,240		$	271,613	$	113,490	$	3,708		$	5,453,145
Allowance for loan losses:
Individually evaluated for impairment	$	—		$	1,990		$	1	$	148		$	—		$	84	$	—	$	50		$	2,273
Collectively evaluated for impairment	12,016			6,650			1,347		3,858			1,074			2,141		98		28			27,212
Loans acquired with credit deterioration	—			224			—		4,414			—			1,073		396		55			6,162
	$	12,016		$	8,864		$	1,348	$	8,420		$	1,074		$	3,298	$	494	$	133		$	35,647

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 loans that are individually evaluated for impairment as of March 31, 2016 and December 31, 2015 and the average recorded investment and interest income recognized for the three months ended March 31, 2016 and 2015. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.



	March 31, 2016						Three Months Ended March 31, 2016
	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:
Multi-family	$	—	$	—	$	—	$	331	$	—
Commercial and industrial	18,950		19,921		—		15,503		187
Commercial real estate owner occupied	9,924		9,924		—		9,121		94
Commercial real estate non-owner occupied	4,083		4,083		—		4,180		23
Construction	—		—		—		—		—
Other consumer	45		45		—		47		—
Residential real estate	4,154		4,154		—		4,243		24
Manufactured housing	8,898		8,898		—		8,599		109
With an allowance recorded:
Multi-family	393		393		209		197		5
Commercial and industrial	8,336		8,685		2,834		6,951		71
Commercial real estate owner occupied	12		12		1		12		—
Commercial real estate non-owner occupied	541		541		135		548		2
Construction	—		—		—		—		—
Other consumer	53		53		46		73		—
Residential real estate	689		689		445		542		—
Total	$	56,078	$	57,398	$	3,670	$	50,347	$	515



	December 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:
Multi-family	$	661	$	661	$	—	$	—	$	—
Commercial and industrial	12,056		13,028		—		10,374		164
Commercial real estate owner occupied	8,317		8,317		—		8,668		110
Commercial real estate non-owner occupied	4,276		4,276		—		6,587		83
Construction	—		—		—		2,325		—
Other consumer	48		48		—		21		—
Residential real estate	4,331		4,331		—		3,781		21
Manufactured housing	8,300		8,300		—		2,653		23
With an allowance recorded:
Commercial and industrial	5,565		5,914		1,990		4,156		5
Commercial real estate - owner occupied	12		12		1		800		—
Commercial real estate non-owner occupied	555		555		148		610		—
Construction	—		—		—		—		—
Other consumer	92		92		50		84		1
Residential real estate	395		395		84		364		—
Total	$	44,608	$	45,929	$	2,273	$	40,423	$	407

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, 2016 and 2015. There were no modifications that involved forgiveness of debt.



	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Extensions of maturity	3	$	1,995	—	$	—
Interest-rate reductions	23	864		3	405
Total	26	$	2,859	3	$	405

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, 2016 and 2015.



	Three Months Ended March 31, 2016			Three Months Ended March 31, 2015
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
(dollars in thousands)
Commercial and industrial	1	$	76	—	$	—
Commercial real estate non-owner occupied	1	1,844		—	—
Manufactured housing	23	864		2	207
Residential real estate	1	75		1	198
Total loans	26	$	2,859	3	$	405

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, 2016 and 2015 were as follows:



	Three Months Ended March 31,
	2016			2015
(amounts in thousands)
Accretable yield balance, ending balance prior year	$	12,947		$	17,606
Accretion to interest income	(470		)	(660		)
Reclassification from nonaccretable difference and disposals, net	145			(1,522		)
Accretable yield balance, end of period	$	12,622		$	15,424

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, including the effect of the estimated clawback liability for the three months ended March 31, 2016 and 2015.



	Allowance for Loan Losses
	Three Months Ended March 31,
(amounts in thousands)	2016			2015
Ending balance, prior year	$	35,647		$	30,932
Provision for loan losses (1)	1,503			3,635
Charge-offs	(42		)	(1,144		)
Recoveries	497			143
Ending balance	$	37,605		$	33,566

Schedule of FDIC Loss Sharing Receivable



	FDIC Loss Sharing Receivable/ Clawback Liability
	Three Months Ended March 31,
(amounts in thousands)	2016			2015
Ending balance, prior year	$	(2,083	)	$	2,320
Increased (decreased) estimated cash flows (2)	(477		)	671
Other activity, net (a)	(304		)	134
Cash payments to the FDIC	320			302
Ending balance	$	(2,544	)	$	3,427

(1) Provision for loan losses	$	1,503		$	3,635
(2) Effect attributable to FDIC loss share arrangements	477			(671		)
Net amount reported as provision for loan losses	$	1,980		$	2,964

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

Credit Ratings of Covered and Non-Covered Loan Portfolio

The following tables present the credit ratings of the loans receivable portfolio as of March 31, 2016 and December 31, 2015.



	March 31, 2016
	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	$	3,208,368	$	820,836	$	299,042	$	1,047,331	$	103,061	$	263,517	$	—	$	—	$	5,742,155
Special Mention	393		19,911		8,059		2,053		—		280		—		—		30,696
Substandard	1,416		7,928		4,613		2,778		—		3,234		—		—		19,969
Performing (1)	—		—		—		—		—		—		102,886		3,355		106,241
Non-performing (2)	—		—		—		—		—		—		7,944		119		8,063
Total	$	3,210,177	$	848,675	$	311,714	$	1,052,162	$	103,061	$	267,031	$	110,830	$	3,474	$	5,907,124



	December 31, 2015
	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	$	2,907,362	$	784,892	$	295,762	$	950,886	$	87,240	$	268,210	$	—	$	—	$	5,294,352
Special Mention	661		14,052		7,840		1,671		—		282		—		—		24,506
Substandard	1,416		4,215		4,639		3,698		—		3,121		—		—		17,089
Performing (1)	—		—		—		—		—		—		104,484		3,461		107,945
Non-performing (2)	—		—		—		—		—		—		9,006		247		9,253
Total	$	2,909,439	$	803,159	$	308,241	$	956,255	$	87,240	$	271,613	$	113,490	$	3,708	$	5,453,145


(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.