10-Q

UNITED STATES

securities and exchange commission

Washington, D.C. 20549

form 10-q

(Mark One)

[ X ]  quarterly report pursuant to section 13 or 15(d) of THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2017

OR

[    ] transition report pursuant to section 13 or 15 (d) of the SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                                     to                                                  

Commission file number 001-31830 

Cathay General Bancorp

(Exact name of registrant as specified in its charter)

Delaware	95-4274680
(State of other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
777 North Broadway, Los Angeles, California	90012
(Address of principal executive offices)	(Zip Code)

Registrant's telephone number, including area code: (213) 625-4700

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                                                  Yes ☑          No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).           Yes ☑          No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☑	Accelerated filer	☐
Non-accelerated filer	☐	(Do not check if a smaller reporting company)
		Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).                                                             Yes ☐          No ☑

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Common stock, $.01 par value, 80,819,967 shares outstanding as of October 31, 2017.

CATHAY GENERAL BANCORP AND SUBSIDIARies

3^RD quarter 2017 REPORT ON FORM 10-Q

table of contents

PART I –	FINANCIAL INFORMATION	3
Item 1.	FINANCIAL STATEMENTS (Unaudited)	3
	NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)	6
Item 2.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	40
Item 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	64
Item 4.	CONTROLS AND PROCEDURES	65
PART II  –	OTHER INFORMATION	66
Item 1.	LEGAL PROCEEDINGS	66
Item 1A.	RISK FACTORS	66
Item 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	76
Item 3.	DEFAULTS UPON SENIOR SECURITIES	76
Item 4.	MINE SAFETY DISCLOSURES	67
Item 5.	OTHER INFORMATION	67
Item 6.	EXHIBITS	67
SIGNATURES		68

Forward-Looking Statements

In this Quarterly Report on Form 10-Q, the term “Bancorp” refers to Cathay General Bancorp and the term “Bank” refers to Cathay Bank. The terms “Company,” “we,” “us,” and “our” refer to Bancorp and the Bank collectively.

The statements in this report include forward-looking statements within the meaning of the applicable provisions of the Private Securities Litigation Reform Act of 1995 regarding management’s beliefs, projections, and assumptions concerning future results and events. We intend such forward-looking statements to be covered by the safe harbor provision for forward-looking statements in these provisions. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including statements about anticipated future operating and financial performance, financial position and liquidity, growth opportunities and growth rates, growth plans, acquisition and divestiture opportunities, business prospects, strategic alternatives, business strategies, financial expectations, regulatory and competitive outlook, loan and deposit growth, investment and expenditure plans, financing needs and availability, level of nonperforming assets, and other similar forecasts and statements of expectation and statements of assumptions underlying any of the foregoing. Words such as “aims,” “anticipates,” “believes,” “can,” “continue,” “could,” “estimates,” “expects,” “hopes,” “intends,” “may,” “optimistic,” “plans,” “potential,” “possible,” “predicts,” “projects,” “seeks,” “shall,” “should,” “will,” and variations of these words and similar expressions are intended to identify these forward-looking statements. Forward-looking statements by us are based on estimates, beliefs, projections, and assumptions of management and are not guarantees of future performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from our historical experience and our present expectations or projections. Such risks and uncertainties and other factors include, but are not limited to, adverse developments or conditions related to or arising from:

● U.S. and international business and economic conditions;

● possible additional provisions for loan losses and charge-offs;

● credit risks of lending activities and deterioration in asset or credit quality;

● extensive laws and regulations and supervision that we are subject to, including potential supervisory action by bank supervisory authorities;

● increased costs of compliance and other risks associated with changes in regulation, including the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”);

● higher capital requirements from the implementation of the Basel III capital standards;

● compliance with the Bank Secrecy Act and other money laundering statutes and regulations;

● potential goodwill impairment;

● liquidity risk;

● fluctuations in interest rates;

● risks associated with acquisitions and the expansion of our business into new markets;

● inflation and deflation;

● real estate market conditions and the value of real estate collateral;

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● environmental liabilities;

● our ability to compete, including against larger competitors;

● our ability to retain key personnel;

● successful management of reputational risk;

● natural disasters and geopolitical events;

● general economic or business conditions in Asia, and other regions where the Bank has operations;

● failures, interruptions, or security breaches of our information systems;

● our ability to adapt our systems to technological changes;

● risk management processes and strategies;

● adverse results in legal proceedings;

● the impact of regulatory enforcement actions, if any;

● certain provisions in our charter and bylaws that may affect acquisition of the Company;

● changes in accounting standards or tax laws and regulations;

● market disruption and volatility;

● fluctuations in the Bancorp’s stock price;

● restrictions on dividends and other distributions by laws and regulations and by our regulators and our capital structure;

● issuances of preferred stock;

● capital level requirements and successfully raising additional capital, if needed, and the resulting dilution of interests of holders of our common stock; and

● the soundness of other financial institutions.

These and other factors are further described in Bancorp’s Annual Report on Form 10-K for the year ended December 31, 2016 (Item 1A in particular), other reports and registration statements filed with the Securities and Exchange Commission (“SEC”), and other filings Bancorp makes with the SEC from time to time. Actual results in any future period may also vary from the past results discussed in this report. Given these risks and uncertainties, readers are cautioned not to place undue reliance on any forward-looking statements, which speak to the date of this report. We have no intention and undertake no obligation to update any forward-looking statement or to publicly announce any revision of any forward-looking statement to reflect future developments or events, except as required by law.

Bancorp’s filings with the SEC are available at the website maintained by the SEC at http://www.sec.gov, or by request directed to Cathay General Bancorp, 9650 Flair Drive, El Monte, California 91731, Attention: Investor Relations (626) 279-3286.

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PART I – FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS (Unaudited)

CATHAY GENERAL BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except share and per share data)	September 30, 2017			December 31, 2016
Assets
Cash and due from banks	$	167,886		$	218,017
Short-term investments and interest bearing deposits		573,059			967,067
Securities available-for-sale (amortized cost of $1,364,955 in 2017 and $1,317,012 in 2016)		1,368,487			1,314,345
Loans held for sale		-			7,500
Loans		12,597,434			11,201,275
Less:  Allowance for loan losses		(121,535	)		(118,966	)
Unamortized deferred loan fees, net		(3,424	)		(4,994	)
Loans, net		12,472,475			11,077,315
Federal Home Loan Bank stock		30,681			17,250
Other real estate owned, net		18,115			20,070
Affordable housing investments and alternative energy partnerships, net		298,426			251,077
Premises and equipment, net		107,954			105,607
Customers’ liability on acceptances		12,009			12,182
Accrued interest receivable		42,190			37,299
Goodwill		372,189			372,189
Other intangible assets, net		9,408			2,949
Other assets		255,538			117,902
Total assets	$	15,728,417		$	14,520,769
Liabilities and Stockholders’ Equity
Deposits
Non-interest-bearing demand deposits	$	2,730,006		$	2,478,107
Interest-bearing deposits:
Demand deposits		1,379,100			1,230,445
Money market deposits		2,370,724			2,198,938
Savings deposits		925,312			719,949
Time deposits		5,156,553			5,047,287
Total deposits		12,561,695			11,674,726
Securities sold under agreements to repurchase		100,000			350,000
Advances from the Federal Home Loan Bank		595,000			350,000
Other borrowings of affordable housing investments		17,518			17,662
Long-term debt		119,136			119,136
Deferred payments from acquisition		136,056			-
Acceptances outstanding		12,009			12,182
Other liabilities		218,304			168,524
Total liabilities		13,759,718			12,692,230
Commitments and contingencies		-			-
Stockholders’ Equity
Common stock, $0.01 par value, 100,000,000 shares authorized, 89,027,259 issued and 80,816,616 outstanding at September 30, 2017, and 87,820,920 issued and 79,610,277 outstanding at December 31, 2016		890			878
Additional paid-in-capital		932,521			895,480
Accumulated other comprehensive loss, net		(217	)		(3,715	)
Retained earnings		1,275,094			1,175,485
Treasury stock, at cost (8,210,643 shares at September 30, 2017, and at December 31, 2016)		(239,589	)		(239,589	)
Total equity		1,968,699			1,828,539
Total liabilities and equity	$	15,728,417		$	14,520,769

See accompanying notes to unaudited condensed consolidated financial statements

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CATHAY GENERAL BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

COMPREHENSIVE INCOME

(Unaudited)

	Three months ended September 30,					Nine months ended September 30,
	2017		2016			2017			2016
	(In thousands, except share and per share data)
Interest and Dividend Income
Loans receivable, including loan fees	$	146,383	$	118,500		$	401,129		$	349,212
Investment securities		5,692		4,850			14,817			16,974
Federal Home Loan Bank and FRB stock		607		393			1,317			1,122
Term federal funds sold		108		-			108			-
Deposits with banks		1,288		412			3,140			1,094
Total interest and dividend income		154,078		124,155			420,511			368,402
Interest Expense
Time deposits		11,678		10,701			33,429			32,177
Other deposits		5,101		4,212			14,245			11,783
Securities sold under agreements to repurchase		874		3,828			3,489			11,696
Advances from Federal Home Loan Bank		872		134			1,465			442
Long-term debt		1,456		1,456			4,320			4,336
Deferred payments from acquisition		901		-			901			-
Total interest expense		20,882		20,331			57,849			60,434
Net interest income before reversal for credit losses		133,196		103,824			362,662			307,968
Reversal for loan losses		-		-			(2,500	)		(15,650	)
Net interest income after reversal for credit losses		133,196		103,824			365,162			323,618
Non-Interest Income
Securities gains/(losses), net		24		1,692			(439	)		3,141
Letters of credit commissions		1,302		1,212			3,618			3,698
Depository service fees		1,407		1,401			4,259			4,109
Gain from acquisition		5,440		-			5,440			-
Other operating income		4,788		4,506			12,953			14,461
Total non-interest income		12,961		8,811			25,831			25,409
Non-Interest Expense
Salaries and employee benefits		27,913		22,881			79,929			71,313
Occupancy expense		5,312		4,734			14,733			13,587
Computer and equipment expense		2,643		2,337			7,895			7,360
Professional services expense		4,942		4,999			14,541			13,981
Data processing service expense		2,918		2,279			7,846			6,556
FDIC and regulatory assessments		2,552		2,288			7,261			7,640
Marketing expense		2,103		1,516			4,833			3,314
Other real estate owned expense/(income)		369		(176	)		747			612
Amortization of investments in low income housing and alternative energy partnerships		5,723		5,432			16,797			35,626
Amortization of core deposit intangibles		281		172			626			517
Acquisition and integration costs		3,277		-			3,277			-
Other operating expense		3,215		4,275			11,307			10,681
Total non-interest expense		61,248		50,737			169,792			171,187
Income before income tax expense		84,909		61,898			221,201			177,840
Income tax expense		35,163		15,808			71,099			50,756
Net income	$	49,746	$	46,090		$	150,102		$	127,084
Other comprehensive income, net of tax
Unrealized holding gain on securities available-for-sale		1,060		938			3,338			15,748
Less: reclassification adjustments for gains/(losses) included in net income		14		981			(254	)		1,821
Unrealized holding gain/(loss) on cash flow hedge derivatives		157		804			(94	)		(3,598	)
Total other comprehensive gain, net of tax		1,203		761			3,498			10,329
Total other comprehensive income	$	50,949	$	46,851		$	153,600		$	137,413
Net income per common share:
Basic	$	0.62	$	0.58		$	1.87		$	1.61
Diluted	$	0.61	$	0.58		$	1.86		$	1.59
Cash dividends paid per common share	$	0.21	$	0.18		$	0.63		$	0.54
Average common shares outstanding
Basic		80,665,398		78,865,860			80,073,249			79,147,839
Diluted		81,404,854		79,697,069			80,797,179			79,902,846

See accompanying notes to unaudited condensed consolidated financial statements.

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CATHAY GENERAL BANCORP AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30
	2017			2016
	(In thousands)
Cash Flows from Operating Activities
Net income	$	150,102		$	127,084
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Reversal for loan losses		(2,500	)		(15,650	)
Provision for losses on other real estate owned		889			176
Deferred tax liability		10,319			22,483
Depreciation and amortization		5,416			5,684
Net gains on sale and transfer of other real estate owned		(394	)		(476	)
Net gains on sale of loans		-			(285	)
Proceeds from sales of loans		7,500			13,525
Originations of loans held-for-sale		-			(12,665	)
Amortization on alternative energy partnerships, venture capital and other investments		2,778			27,282
Net loss/(gain) on sales and calls of securities		438			(3,347	)
Amortization/accretion of security premiums/discounts, net		990			5,193
Loss on sales or disposal of fixed assets		-			19
Write-down on impaired securities		-			206
Stock based compensation and stock issued to officers as compensation		4,449			3,804
Net change in accrued interest receivable and other assets		(51,776	)		2,101
Gain on acquisition		(5,440	)		-
Net change in other liabilities		828			(4,537	)
Net cash provided by operating activities		123,599			170,597
Cash Flows from Investing Activities
Decrease/(increase) in short-term investments		516,008			(254,877	)
Purchase of investment securities available-for-sale		(450,745	)		(690,966	)
Proceeds from sale of investment securities available-for-sale		99,541			415,543
Proceeds from repayments, maturities and calls of investment securities available-for-sale		389,829			585,285
Purchase of Federal Home Loan Bank stock		-			(1,650	)
Redemptions of Federal Home Loan Bank stock		6,459			-
Net increase in loans		(686,225	)		(853,453	)
Purchase of premises and equipment		(976	)		(3,166	)
Proceeds from sales of premises and equipment		-			11
Proceeds from sales of other real estate owned		2,186			6,713
Net increase in investment in affordable housing and alternative energy partnerships		(20,867	)		(59,844	)
Acquisition, net of cash acquired		(14,309	)		-
Net cash used for investing activities		(159,099	)		(856,404	)
Cash Flows from Financing Activities
Net (decrease)/increase in deposits		73,120			429,976
Net decrease in federal funds purchased and securities sold under agreements to repurchase		(250,000	)		(50,000	)
Advances from Federal Home Loan Bank		2,608,000			2,730,000
Repayment of Federal Home Loan Bank borrowings		(2,393,000	)		(2,305,000	)
Cash dividends paid		(50,491	)		(42,570	)
Purchases of treasury stock		-			(54,441	)
Proceeds from shares issued under Dividend Reinvestment Plan		1,849			1,643
Proceeds from exercise of stock options		1,018			49
Taxes paid related to net share settlement of RSUs		(5,127	)		(103	)
Net cash (used in) provided by financing activities		(14,631	)		709,554
(Decrease)/increase in cash and cash equivalents		(50,131	)		23,747
Cash and cash equivalents, beginning of the period		218,017			180,130
Cash and cash equivalents, end of the period	$	167,886		$	203,877
Supplemental disclosure of cash flow information
Cash paid during the period:
Interest	$	58,416		$	61,212
Income taxes paid	$	62,296		$	31,717
Non-cash investing and financing activities:
Net change in unrealized holding gain on securities available-for-sale, net of tax	$	3,592		$	13,927
Net change in unrealized holding loss on cash flow hedge derivatives	$	(94	)	$	(3,598	)
Transfers to other real estate owned from loans held for investment	$	726		$	2,698
Loans transferred from held for sale to held for investment, net	$	-		$	1,351
Loans to facilitate the sale of other real estate owned	$	-		$	2,616
Issuance of stock related to acquisition	$	-		$	-

See accompanying notes to unaudited condensed consolidated financial statements.

5

CATHAY GENERAL BANCORP AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS(Unaudited)

1. Business

Cathay General Bancorp (“Bancorp”) is the holding company for Cathay Bank (the “Bank” and, together, with Bancorp, the “Company”), seven limited partnerships investing in affordable housing investments in which the Bank is the sole limited partner, Asia Realty Corp. and GBC Venture Capital, Inc. Bancorp also owns 100% of the common stock of five statutory business trusts created for the purpose of issuing capital securities. The Bank was founded in 1962 and offers a wide range of financial services. As of September 30, 2017, the Bank operates 22 branches in Southern California, 12 branches in Northern California, 12 branches in New York State, three branches in Illinois, three branches in Washington State, two branches in Texas, one branch in Massachusetts, one branch in New Jersey, one branch in Maryland, one branch in Nevada, one branch in Hong Kong, and a representative office in Shanghai and in Taipei. Deposit accounts at the Hong Kong branch are not insured by the Federal Deposit Insurance Corporation (the “FDIC”).

2. Business Combinations

On July 14, 2017, the Company completed the acquisition of SinoPac Bancorp, the parent of Far East National Bank (FENB), pursuant to a Stock Purchase Agreement, dated as of July 8, 2016, by and between the Company and Bank SinoPac Co. Ltd. Under the terms of the Stock Purchase Agreement, the Company purchased all of the issued and outstanding share capital of SinoPac Bancorp for an aggregate purchase price of $351.6 million plus additional post closing payments based on the realization of certain assets of FENB. The Company issued 926,192 shares of common stock as consideration and the remainder of the consideration is payable in cash. Pursuant to the Stock Purchase Agreement, (i) $100 million of the purchase price was deferred and will be released within one year based on the timing of the contemplated merger of FENB into Cathay Bank and (ii) 10% of the purchase price was held back and will be released over a period of three years following the closing of the acquisition, subject to any indemnity claims. Founded in 1974, FENB offers a wide range of financial services. The acquisition allowed the Company to expand its number of branches in  California. As of July 14, 2017, FENB operated nine branches in California, and a representative office in Beijing. The acquisition will be accounted for as a business combination, subject to the provisions of ASC 805-10-50, Business Combinations.

The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the July 14, 2017 acquisition date. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. We have included the financial results of the business combinations in the condensed consolidated statement of income beginning on the acquisition date. The purchase accounting adjustments are preliminary and subject to finalization during the one-year measurement period from the date of the acquisition.

6

The fair value of the assets and the liabilities acquired as of July 14, 2017 are shown below:

	SinoPac Bancorp
Assets acquired:
Cash and cash equivalents	$	166,932
Short-term investments		122,000
Securities available-for-sale		107,934
Loans		703,787
Premises and equipment		6,198
Cash surrender value of life insurance		46,083
Deferred tax assets, net		40,136
Core deposit intangible		7,144
Accrued interest receivable and other assets		9,134
Total assets acquired		1,209,348
Liabilities assumed:
Deposits		813,888
Long-term debt		30,000
Accrued interest payable and other liabilities		5,608
Total liabilities assumed		849,496
Net assets acquired	$	359,852
Cash paid	$	181,241
Fair value of common stock issued		34,862
Total consideration paid	$	216,103
Purchase price payable to SinoPac		138,309
Total consideration	$	354,412
Gains on bargain purchase	$	5,440

3. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. For further information, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

The preparation of the condensed consolidated financial statements in accordance with GAAP requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The Company expects that the most significant estimates subject to change are the allowance for loan losses, goodwill impairment, and other-than-temporary impairment.

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4. Recent Accounting Pronouncements

Accounting Standards adopted in 2017

In March 2016, the FASB issued ASU 2016-09, “Compensation Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting.” ASU 2016-09 changes aspects of the accounting for share-based payment award transactions, including: (1) accounting for income taxes; (2) classification of excess tax benefits on the statement of cash flows; (3) forfeitures; (4) minimum statutory tax withholding requirements; and (5) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU 2016-09 became effective for interim and annual periods beginning on January 1, 2017. The method of adoption differs for each of the topics covered by the ASU. The Company elected to apply all topics covered by the ASU on a prospective basis and has elected to continue to estimate forfeitures expected to occur in determining the amount of compensation cost to be recognized each period.

Under ASU 2016-09, all excess tax benefits and tax deficiencies from share based payments are recognized as income tax expense or benefit in the income statement instead of the previous accounting which credited excess tax benefits to additional paid-in capital and tax deficiencies as a charge to income tax expense or as an offset to accumulated excess tax benefits, if any. Excess tax benefits or deficiencies are included in income tax expense as discrete items in the period in which they occur. For diluted earnings per share calculations, excess tax benefits are no longer included in assumed proceeds when determining average diluted shares outstanding under the treasury stock method. ASU 2016-09 resulted in a $2.6 million tax benefit from the distribution of restricted stock units in the nine months ended September 30, 2017.

Other Accounting Standards

In May 2014, the FASB issued ASU 2014-09, Revenue from Contracts with Customers (Topic 606). The new guidance replaces existing revenue recognition guidance for contracts to provide goods or services to customers and amends existing guidance related to recognition of gains and losses on the sale of certain nonfinancial assets such as real estate. ASU 2014-09 clarifies the principles for recognizing revenue and replaces nearly all existing revenue recognition guidance in U.S. GAAP. Quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. ASU 2014-09 as amended by ASU 2015-14, ASU 2016-08, ASU 2016-10 and ASU 2016-12, is effective for interim and annual periods beginning after December 15, 2017 and is applied on either a modified retrospective or full retrospective basis. Our revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 2014-09, and non-interest income. The Company has completed the assessment phase of implementing this new standard. In the assessment phase, the Company determined which revenue streams are within the scope and those that are excluded from the scope of the new standard. Based on this assessment, the Company concluded that substantially all of the Company's revenues are excluded from the scope of the new standard. For the revenues within the scope of the new standard, the Company concluded that there will not be a material impact under the new standard.

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In January 2016, the FASB issued ASU 2016-01, “Financial Instruments Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities.” This update requires an entity to measure equity investments with readily determinable fair values at fair value with changes in fair value recognized in net income. Equity investment without readily determinable fair values will be measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment and any amount by which the carrying value exceeding the fair value will be recognized as an impairment in net income. This update also requires an entity to disclose fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price option. In addition, this update requires separate presentation in comprehensive income for changes in the fair value of a liability and in the balance sheet by measurement category and form of financial asset. ASU 2016-01 becomes effective for interim and annual periods beginning after December 15, 2017.  The Company is currently evaluating the impact on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which is intended to increase transparency and comparability in the accounting for lease transactions. ASU 2016-02 requires lessees to recognize all leases longer than twelve months on the consolidated balance sheet as lease assets and lease liabilities and quantitative and qualitative disclosures regarding key information about leasing arrangements. Lessor accounting is largely unchanged. ASU 2016-02 is effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years with an option to early adopt. ASU 2016-02 mandates a modified retrospective transition method for all entities. The Company is evaluating the impact of ASU 2016-02 and has determined that the majority of our leases are operating leases. We expect, upon adoption, the Company will record a liability for the remaining obligation under the lease agreements and a corresponding right-of-use asset in its consolidated financial statements. ASU 2016-02 will be effective for us on January 1, 2019 and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements.

In June 2016, the FASB issued ASU 2016-13, “Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.” This update requires an entity to use a broader range of reasonable and supportable forecasts, in addition to historical experience and current conditions, to develop an expected credit loss estimate for financial assets and net investments that are not accounted for at fair value through net income. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses to the amount by which fair value is below amortized cost. ASU 2016-13 becomes effective for interim and annual periods beginning after December 15, 2019.  The Company has designated a management team to evaluate ASU 2016-13 and develop an implementation strategy. The Company has not yet determined the effect of ASU 2016-13 on its accounting policies or the impact on the Company’s consolidated financial statements.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.” This update provides guidance on eight cash flow issues with the objective of reducing the existing diversity in practice related to debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, separately identifiable cash flows and application of the predominance principle. The amendments reduce current and potential future diversity in practice. The amendments in this update apply to all entities that are required to present a statement of cash flows under Topic 230. ASU 2016-15 becomes effective for interim and annual periods beginning after December 15, 2017. The Company is currently evaluating the impact on its consolidated financial statements.

9

In October 2016, the FASB issued ASU 2016-16, “Income Taxes – Intra-Entity Transfers of Assets Other Than Inventory.” This update will allow the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. The amendments in this update are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact on its consolidated financial statements.

In November 2016, the FASB issued ASU 2016-18, “Statement of Cash Flows – Restricted Cash.” This update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update do not provide a definition of restricted cash or restricted cash equivalents. The amendments in this update are effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years. Adoption of ASU 2016-18 is not expected to have a significant impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) – Clarifying the Definition of a Business.” This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. Under the current implementation guidance in Topic 805, there are three elements of a business—inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that is a business usually has outputs, outputs are not required to be present. In addition, all the inputs and processes that a seller uses in operating a set are not required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes. The amendments in this update also provide a screen to determine when a set is not a business. The amendments in this update affect all reporting entities that must determine whether they have acquired or sold a business. The amendments in this update are to be applied to annual periods beginning after December 15, 2017. Adoption of ASU 2017-01 is not expected to have a significant impact on the Company’s consolidated financial statements.

In January 2017, the FASB issued ASU 2017-04, “Intangibles—Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment.” This update simplifies how an entity is required to test goodwill for impairment by eliminating Step 2 from the goodwill impairment test. Step 2 measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Adoption of this update is on a prospective basis and the amendments in this update are to be applied to annual periods beginning after December 15, 2019. Adoption of ASU 2017-04 is not expected to have a significant impact on the Company’s consolidated financial statements.

In February 2017, the FASB issued ASU 2017-05, "Other Income—Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets.” This update clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset”, in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets with the scope of Subtopic 610-20. The amendments in this update clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The amendments also clarify that an entity should allocate consideration to each distinct asset by applying the guidance in Topic 606 on allocating the transaction price to performance obligations. The amendments are effective for annual reporting periods beginning after December 15, 2017, including interim reporting periods within that reporting period. Adoption of ASU 2017-05 is not expected to have a significant impact on the Company’s consolidated financial statements.

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In March 2017, the FASB issued ASU 2017-08, “Receivables- Nonrefundable Fees and Other Costs (Subtopic 310-20): Premium Amortization on Purchased Callable Debt Securities.” This update amends the amortization period for certain purchased callable debt securities held at a premium. The amendments require the premium to be amortized to the earliest call date. The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This update affects all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact on its consolidated financial statements.

In May 2017, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Modification Accounting.” The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic 718. The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award. The amendments should be applied prospectively to an award modified on or after the adoption date. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Adoption of ASU 2017-09 is not expected to have a significant impact on the Company’s consolidated financial statements.

In July 2017, the FASB issued ASU 2017-11, “Earnings per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815)." There are two parts to this update. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments that result in the strike price being reduced on the basis of the pricing of future equity offerings. Part II of this update addresses the difficulty in navigating topic 480, Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in this update are effective for fiscal years beginning after December 15, 2020. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in part I of this update should be applied in either of the following ways: (i) Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim periods in which the pending content that links to this paragraph is effective; or (ii) Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The amendments to Part II of this update do not require any transition guidance because those amendments do not have an accounting effect. The Company is currently evaluating the impact on its consolidated financial statements.

In August 2017, the FASB issued ASU 2017-12, “Derivatives and Hedging (Topic 815)”, targeted improvements to accounting for hedging activities. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For public business entities, the amendments in this update are effective for fiscal years beginning after December 15, 2018, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. Early application is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact on its consolidated financial statements.

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5. Earnings per Share

Basic earnings per share excludes dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that then shared in earnings. Outstanding stock options with anti-dilutive effect were not included in the computation of diluted earnings per share. The following table sets forth earnings per common share calculations:

	Three months ended September 30,				Nine months ended September 30,
(Dollars in thousands, except share and per share data)	2017		2016		2017		2016
Net income	$	49,746	$	46,090	$	150,102	$	127,084
Weighted-average shares:
Basic weighted-average number of common shares outstanding		80,665,398		78,865,860		80,073,249		79,147,839
Dilutive effect of weighted-average outstanding common share equivalents
Warrants		399,957		569,949		409,019		520,686
Options		19,221		95,850		25,706		90,461
Restricted stock units		320,278		165,410		289,205		143,860
Diluted weighted-average number of common shares outstanding		81,404,854		79,697,069		80,797,179		79,902,846
Average stock options and warrants with anti-dilutive effect		0		207,183		6,561		247,974
Earnings per common share:
Basic	$	0.62	$	0.58	$	1.87	$	1.61
Diluted	$	0.61	$	0.58	$	1.86	$	1.59

6. Stock-Based Compensation

Under the Company’s equity incentive plans, directors and eligible employees may be granted incentive or non-statutory stock options and/or restricted stock units, or awarded non-vested stock.As of September 30, 2017, the only options granted by the Company were non-statutory stock options to selected Bank officers and non-employee directors at exercise prices equal to the fair market value of a share of the Company’s common stock on the date of grant. Such options have a maximum ten-year term and vest in 20% annual increments (subject to early termination in certain events). There were no options granted during the first nine months of 2017 or 2016.

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Option compensation expense was zero for the three months and for the nine months ended September 30, 2017, and September 30, 2016. Stock-based compensation was fully recognized over the requisite service period for all awards. There were 43,540 and 2,110 stock option shares exercised in the nine months ended September 30, 2017 and 2016, respectively. The Company received $1.0 million from the exercise of stock options which had an aggregate intrinsic value of $607,000 during the nine months ended September 30, 2017 compared to $49,000 from the exercise of stock options which had an aggregate intrinsic value of $9,000 during the nine months ended September 30, 2016. The table below summarizes stock option activity for the periods indicated:

						Weighted-average		Aggregate
				Weighted-average		Remaining Contractual		Intrinsic
	Shares			Exercise Price		Life (in years)		Value (in thousands)
Balance, December 31, 2016		82,670		$	23.37		1.1	$	1,211
Exercised		(18,040	)		23.37
Balance, March 31, 2017		64,630		$	23.37		0.9	$	925
Exercised		(19,500	)		23.37
Balance, June 30, 2017		45,130		$	23.37		0.7	$	658
Exercised		(6,000	)		23.37
Balance, September 30, 2017		39,130		$	23.37		0.4	$	659
Exercisable, September 30, 2017		39,130		$	23.37		0.4	$	659

In addition to stock options, the Company also grants restricted stock units to eligible employees that vest subject to continued employment at the vesting dates.

The Company granted restricted stock units for 87,781 shares at an average closing price of $38.59 per share in the first nine months of 2017. The Company granted restricted stock units for 88,693 shares at an average closing price of $30.37 per share in 2016.

Starting in December 2013, the Company granted performance share unit awards in which the number of units earned is calculated based on the relative total shareholder return (TSR) of the Company’s common stock as compared to the TSR of the KBW Regional Banking Index. In addition, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted earnings per share (EPS) as defined in the award for the 2014 to 2016 period. In December 2016, in addition to TSR and EPS awards, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted return of assets ROA as defined in the award for December 2016. Performance TSR, performance EPS, and performance ROA units awarded are scheduled to vest on December 31 of the third full year from the grant date. The Company granted performance TSR restricted stock units for 30,319 shares in 2016, 61,209 shares in 2015 and 60,456 shares in 2014, performance EPS restricted stock units for 58,241 shares in 2016, 57,409 shares in 2015 and 57,642 shares in 2014, and performance ROA restricted stock units for 29,119 shares in 2016, to its seven executive officers. In February 2017, after approval by the Company’s Compensation Committee, 297,171 shares of the Company’s stock were distributed under the TSR and EPS grants awarded in December 2013 under the terms of the awards, including 76,623 shares granted and distributed based on higher than target actual performance and for cash dividends during the performance period.

The following table presents restricted stock unit activity during the nine months ended September 30, 2017:

	Units
Balance at December 31, 2016		727,419
Granted		164,404
Distributed		(297,905	)
Forfeited		(10,424	)
Balance at September 30, 2017		583,494

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The compensation expense recorded for restricted stock units was $1.3 million for the three months ended September 30, 2017, compared to $1.2 million in the same period a year ago. For the nine months ended September 30, 2017 and 2016, compensation expense recorded related to the restricted stock units was $3.9 million and $3.3 million, respectively. Unrecognized stock-based compensation expense related to restricted stock units was $9.1 million as of September 30, 2017, and is expected to be recognized over the next 2.0 years.

As of September 30, 2017, 3,465,411 shares were available under the Company’s 2005 Incentive Plan (as Amended and Restated) for future grants.

Tax benefit from share-based payment arrangements of $2.6 million reduced income tax expense in the first nine months of 2017 compared to a tax short-fall of $3.4 million that was charged to income tax expense in the first nine months of 2016.

7. Investment Securities

Investment securities were $1.4 billion as of September 30, 2017, compared to $1.3 billion as of December 31, 2016. The following tables reflect the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of investment securities as of September 30, 2017, and December 31, 2016:

	September 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	399,741	$	-	$	305	$	399,436
U.S. government agency entities		9,679		27		6		9,700
U.S. government sponsored entities		400,000		-		6,278		393,722
State and municipal securities		1,943		-		12		1,931
Mortgage-backed securities		447,959		468		2,362		446,065
Collateralized mortgage obligations		1,715		-		5		1,710
Corporate debt securities		80,007		904		5		80,906
Mutual funds		6,500		-		229		6,271
Preferred stock of government sponsored entities		4,117		3,970		-		8,087
Other equity securities		13,294		7,463		98		20,659
Total	$	1,364,955	$	12,832	$	9,300	$	1,368,487

	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	489,839	$	35	$	857	$	489,017
U.S. government sponsored entities		400,000		-		9,669		390,331
Mortgage-backed securities		339,241		309		3,290		336,260
Collateralized mortgage obligations		48		-		20		28
Corporate debt securities		74,965		247		862		74,350
Mutual funds		6,500		-		270		6,230
Preferred stock of government sponsored entities		2,811		4,497		-		7,308
Other equity securities		3,608		7,213		-		10,821
Total	$	1,317,012	$	12,301	$	14,968	$	1,314,345

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The amortized cost and fair value of investment securities as of September 30, 2017, by contractual maturities, are shown below. Actual maturities may differ from contractual maturities because borrowers may have the right to call or repay obligations with or without call or repayment penalties.  

	Securities Available-For-Sale
	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	415,782	$	415,555
Due after one year through five years		465,328		459,924
Due after five years through ten years		8,658		8,647
Due after ten years (1)		475,187		484,361
Total	$	1,364,955	$	1,368,487

(1) Equity securities are reported in this category

There were no sales transactions of mortgage-backed securities during the first nine months of 2017. Proceeds of $415.3 million were received from the sales transactions of mortgage-backed securities during the first nine months of 2016. Proceeds from repayments, maturities and calls of mortgage-backed securities were $48.5 million and $125.3 million for the nine months ended September 30, 2017 and 2016, respectively. Proceeds of $99.5 million were received from the sale of other investment securities during the nine months ended September 30, 2017. There were no sales transactions of other investment securities during the nine months ended September 30, 2016. Proceeds from maturities and calls of other investment securities were $341.3 million during the nine months ended September 30, 2017 compared to $460.0 million during the same period a year ago. During the nine months ended September 30, 2017, $439,000 of losses were realized on sales of investment securities. Other than temporary impairment write-downs of zero and $206,000 were recorded during the first nine months of 2017 and 2016, respectively.

The tables below show the fair value and unrealized losses of the temporarily impaired securities in our investment securities portfolio as of September 30, 2017, and December 31, 2016:

	September 30, 2017
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	339,707	$	46	$	49,729	$	259	$	389,436	$	305
U.S. government sponsored entities		395,774		6,284		-		-		395,774		6,284
State and municipal securities		1,931		12		-		-		1,931		12
Mortgage-backed securities		359,112		2,359		122		3		359,234		2,362
Collateralized mortgage obligations		1,710		5		-		-		1,710		5
Corporate debt securities		5,029		5		-		-		5,029		5
Mutual funds		-		-		6,271		229		6,271		229
Other equity securities		4,680		98		-		-		4,680		98
Total	$	1,107,943	$	8,809	$	56,122	$	491	$	1,164,065	$	9,300

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	December 31, 2016
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	299,088	$	857	$	-	$	-	$	299,088	$	857
U.S. government sponsored entities		390,331		9,669		-		-		390,331		9,669
Mortgage-backed securities		328,236		3,288		62		2		328,298		3,290
Collateralized mortgage obligations		-		-		28		20		28		20
Corporate debt securities		-		-		29,138		862		29,138		862
Mutual funds		-		-		6,230		270		6,230		270
Total	$	1,017,655	$	13,814	$	35,458	$	1,154	$	1,053,113	$	14,968

As of September 30, 2017, the Company had unrealized losses on available-for-sale securities of $9.3 million. The unrealized losses on these securities were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. The issuers have not, to the Company’s knowledge, established any cause for default on these securities. Management believes the impairment was temporary and, accordingly, no impairment loss on these securities has been recognized in our condensed consolidated statements of operations. The Company expects to recover the amortized cost basis of its debt securities, and has no intent to sell and will not be required to sell available-for-sale debt securities that have declined below their cost before their anticipated recovery.

Investment securities having a carrying value of $291.4 million as of September 30, 2017, and $649.1 million as of December 31, 2016, were pledged to secure public deposits, other borrowings, treasury tax and loan, and securities sold under agreements to repurchase. 

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8. Loans

Most of the Company’s business activities are with customers located in the predominately Asian-populated areas of Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; Las Vegas, Nevada, and Hong Kong. The Company has no specific industry concentration, and generally its loans are secured by real property or other collateral of the borrowers. Loans are generally expected to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral.

The types of loans in the Company’s condensed consolidated balance sheets as of September 30, 2017, and December 31, 2016, were as follows:

	September 30, 2017			December 31, 2016
	(In thousands)
Commercial loans	$	2,419,891		$	2,248,187
Residential mortgage loans		2,922,537			2,444,048
Commercial mortgage loans		6,377,047			5,785,248
Real estate construction loans		691,486			548,088
Equity lines		181,751			171,711
Installment & other loans		4,722			3,993
Gross loans	$	12,597,434		$	11,201,275
Allowance for loan losses		(121,535	)		(118,966	)
Unamortized deferred loan fees		(3,424	)		(4,994	)
Total loans, net	$	12,472,475		$	11,077,315
Loans held for sale	$	-		$	7,500

As of September 30, 2017, recorded investment in impaired loans totaled $127.7 million and was comprised of non-accrual loans, excluding loans held for sale, of $65.3 million and accruing troubled debt restructured loans (TDRs) of $62.4 million. As of December 31, 2016, recorded investment in impaired loans totaled $115.1 million and was comprised of non-accrual loans, excluding loans held for sale, of $49.7 million and accruing TDRs of $65.4 million. For impaired loans, the amounts previously charged off represent 7.1% as of September 30, 2017, and 8.4% as of December 31, 2016, of the contractual balances for impaired loans.

The following table presents the average balance and interest income recognized related to impaired loans for the periods indicated:

	Impaired Loans
	Average Recorded Investment								Interest Income Recognized
	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
					(In thousands)
Commercial loans	$	24,987	$	28,091	$	22,572	$	18,602	$	678	$	170	$	760	$	488
Real estate construction loans		29,780		5,869		29,868		12,005		99		66		287		196
Commercial mortgage loans		58,555		81,005		60,074		86,456		391		776		1,015		2,124
Residential mortgage loans and equity lines		13,937		18,256		15,208		17,456		96		148		287		401
Total impaired loans	$	127,259	$	133,221	$	127,722	$	134,519	$	1,264	$	1,160	$	2,349	$	3,209

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The following table presents impaired loans and the related allowance for loan losses as of the dates indicated:

	Impaired Loans
	September 30, 2017						December 31, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance		Unpaid Principal Balance		Recorded Investment		Allowance
	(In thousands)
With no allocated allowance
Commercial loans	$	23,953	$	23,373	$	-	$	24,037	$	23,121	$	-
Real estate construction loans		22,309		21,748		-		5,776		5,458		-
Commercial mortgage loans		39,154		32,370		-		60,522		54,453		-
Residential mortgage loans and equity lines		2,264		2,264		-		5,472		5,310		-
Subtotal	$	87,680	$	79,755	$	-	$	95,807	$	88,342	$	-
With allocated allowance
Commercial loans	$	14,082	$	13,985	$	1,461	$	5,216	$	4,640	$	1,827
Commercial mortgage loans		23,061		22,820		823		10,158		10,017		573
Residential mortgage loans and equity lines		12,461		11,111		322		13,263		12,075		396
Subtotal	$	49,604	$	47,916	$	2,606	$	28,637	$	26,732	$	2,796
Total impaired loans	$	137,284	$	127,671	$	2,606	$	124,444	$	115,074	$	2,796

The following tables present the aging of the loan portfolio by type as of September 30, 2017, and as of December 31, 2016:

	September 30, 2017
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
Type of Loans:	(In thousands)
Commercial loans	$	8,412	$	14,855	$	3,900	$	15,942	$	43,109	$	2,376,782	$	2,419,891
Real estate construction loans		-		-		-		14,267		14,267		677,219		691,486
Commercial mortgage loans		-		-		-		28,379		28,379		6,348,668		6,377,047
Residential mortgage loans and equity lines		-		89		-		6,725		6,814		3,097,474		3,104,288
Installment and other loans		-		-		-		-		-		4,722		4,722
Total loans	$	8,412	$	14,944	$	3,900	$	65,313	$	92,569	$	12,504,865	$	12,597,434

	December 31, 2016
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
Type of Loans:	(In thousands)
Commercial loans	$	22,753	$	27,190	$	-	$	15,710	$	65,653	$	2,182,534	$	2,248,187
Real estate construction loans		10,390		5,835		-		5,458		21,683		526,405		548,088
Commercial mortgage loans		5,886		700		-		20,078		26,664		5,758,584		5,785,248
Residential mortgage loans and equity lines		4,390		-		-		8,436		12,826		2,602,933		2,615,759
Installment and other loans		-		-		-		-		-		3,993		3,993
Total loans	$	43,419	$	33,725	$	-	$	49,682	$	126,826	$	11,074,449	$	11,201,275

The determination of the amount of the allowance for loan losses for impaired loans is based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for loan losses. The nature of the process by which the Bank determines the appropriate allowance for loan losses requires the exercise of considerable judgment. This allowance evaluation process is also applied to troubled debt restructurings since they are considered to be impaired loans.

18

A troubled debt restructuring is a formal modification of the terms of a loan when the lender, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower. The concessions may be granted in various forms, including a change in the stated interest rate, a reduction in the loan balance or accrued interest, or an extension of the maturity date that causes significant delay in payment.

TDRs on accrual status are comprised of the loans that have, pursuant to the Bank’s policy, performed under the restructured terms and have demonstrated sustained performance under the modified terms for six months before being returned to accrual status. The sustained performance considered by management pursuant to its policy includes the periods prior to the modification if the prior performance met or exceeded the modified terms. This would include cash paid by the borrower prior to the restructure to set up interest reserves.

As of September 30, 2017, accruing TDRs were $62.4 million and non-accrual TDRs were $33.7 million compared to accruing TDRs of $65.4 million and non-accrual TDRs of $29.7 million as of December 31, 2016. The Company allocated specific reserves of $1.1 million to accruing TDRs and $143,000 to non-accrual TDRs as of September 30, 2017, and $1.3 million to accruing TDRs and $1.1 million to non-accrual TDRs as of December 31, 2016. The following tables present TDRs that were modified during the three and nine months ended September 30, 2017 and 2016, their specific reserves as of September 30, 2017 and 2016, and charge-offs for the three and nine months ended September 30, 2017 and 2016:

	Three months ended September 30, 2017								September 30, 2017
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		8	$	18,873	$	18,873	$	-	$	636
Commercial mortgage loans		5		4,123		3,818		305		10
Residential mortgage loans and equity lines		1		483		483		-		32
Total		14	$	23,479	$	23,174	$	305	$	678

	Three months ended September 30, 2016								September 30, 2016
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		7	$	18,258	$	18,258	$	-	$	208
Commercial mortgage loans		1		738		738		-		-
Total		8	$	18,996	$	18,996	$	-	$	208

19

	Nine months ended September 30, 2017								September 30, 2017
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		13	$	19,543	$	19,543	$	-	$	641
Real estate construction loans		2		28,489		28,489		-		-
Commercial mortgage loans		5		4,123		3,818		305		10
Residential mortgage loans and equity lines		1		483		483		-		32
Total		21	$	52,638	$	52,333	$	305	$	683

	Nine months ended September 30, 2016								September 30, 2016
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		11	$	23,102	$	23,102	$	-	$	222
Commercial mortgage loans		1		738		738		-		-
Residential mortgage loans and equity lines		2		367		367		-		-
Total		14	$	24,207	$	24,207	$	-	$	222

Modifications of the loan terms during the first nine months of 2017 were in the form of extensions of maturity dates. The length of time for which modifications involving extensions of maturity dates ranged from three to twelve months from the modification date. 

We expect that the TDRs on accruing status as of September 30, 2017, which were all performing in accordance with their restructured terms, will continue to comply with the restructured terms because of the reduced principal or interest payments on these loans.  A summary of TDRs by type of concession and by type of loan, as of September 30, 2017, and December 31, 2016, is shown below:

	September 30, 2017
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	21,416	$	-	$	-	$	21,416
Real estate construction loans		7,480		-		-		7,480
Commercial mortgage loans		16,130		5,895		4,787		26,812
Residential mortgage loans		3,516		337		2,797		6,650
Total accruing TDRs	$	48,542	$	6,232	$	7,584	$	62,358

	September 30, 2017
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	13,259	$	-	$	-	$	13,259
Commercial mortgage loans		1,347		1,706		16,508		19,561
Residential mortgage loans		714		-		157		871
Total non-accrual TDRs	$	15,320	$	1,706	$	16,665	$	33,691

20

	December 31, 2016
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	7,971	$	-	$	4,081	$	12,052
Commercial mortgage loans		25,979		5,961		12,452		44,392
Residential mortgage loans		5,104		789		3,056		8,949
Total accruing TDRs	$	39,054	$	6,750	$	19,589	$	65,393

	December 31, 2016
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	14,565	$	-	$	-	$	14,565
Commercial mortgage loans		2,510		1,795		10,328		14,633
Residential mortgage loans		356		-		168		524
Total non-accrual TDRs	$	17,431	$	1,795	$	10,496	$	29,722

The activity within our TDRs for the periods indicated is shown below:

	Three months ended September 30,						Nine months ended September 30,
Accruing TDRs	2017			2016			2017			2016
	(In thousands)
Beginning balance	$	79,819		$	74,708		$	65,393		$	81,680
New restructurings		21,790			18,347			49,973			20,412
Restructured loans restored to accrual status		-			-			-			10,303
Payments		(35,677	)		(6,500	)		(41,372	)		(9,816	)
Restructured loans placed on non-accrual status		(3,574	)		-			(9,396	)		(1,138	)
Expiration of loan concession upon renewal		-			-			(2,240	)		(14,886	)
Ending balance	$	62,358		$	86,555		$	62,358		$	86,555

	Three months ended September 30,						Nine months ended September 30,
Non-accrual TDRs	2017			2016			2017			2016
	(In thousands)
Beginning balance	$	30,045		$	25,442		$	29,722		$	39,923
New restructurings		2,360			649			2,360			3,794
Restructured loans placed on non-accrual status		3,574			-			9,396			1,138
Charge-offs		(355	)		(3,407	)		(1,901	)		(4,352	)
Payments		(1,933	)		(1,814	)		(5,160	)		(9,330	)
Foreclosures		-			-			(726	)		-
Restructured loans restored to accrual status		-			-			-			(10,303	)
Ending balance	$	33,691		$	20,870		$	33,691		$	20,870

The Company considers a loan to be in payment default once it is 60 to 90 days contractually past due under the modified terms.  One commercial loan of $50,000 with charge-offs of $2.1 million had payment defaults within the previous twelve months ended September 30, 2017.

Under the Company’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty.

As of September 30, 2017, there were no commitments to lend additional funds to those borrowers whose loans had been restructured, were considered impaired, or were on non-accrual status.

21

As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:

● Pass/Watch – These loans range from minimal credit risk to lower than average, but still acceptable, credit risk.

● Special Mention – Borrower is fundamentally sound and loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.

● Substandard – These loans are inadequately protected by current sound net worth, paying capacity, or collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.

● Doubtful – The possibility of loss is extremely high, but due to identifiable and important pending events (which may strengthen the loan), a loss classification is deferred until the situation is better defined.

● Loss – These loans are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.

The following tables present the loan portfolio by risk rating as of September 30, 2017, and as of December 31, 2016:

	September 30, 2017
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
Commercial loans	$	2,216,816	$	146,479	$	56,565	$	31	$	2,419,891
Real estate construction loans		604,363		65,375		21,748		-		691,486
Commercial mortgage loans		5,904,023		305,927		167,097		-		6,377,047
Residential mortgage loans and equity lines		3,064,118		31,858		8,312		-		3,104,288
Installment and other loans		4,722		-		-		-		4,722
Total gross loans	$	11,794,042	$	549,639	$	253,722	$	31	$	12,597,434
Loans held for sale	$	-	$	-	$	-	$	-	$	-

	December 31, 2016
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
Commercial loans	$	2,023,114	$	140,682	$	84,293	$	98	$	2,248,187
Real estate construction loans		469,909		44,129		34,050		-		548,088
Commercial mortgage loans		5,410,623		250,221		124,404		-		5,785,248
Residential mortgage loans and equity lines		2,605,834		-		9,925		-		2,615,759
Installment and other loans		3,993		-		-		-		3,993
Total gross loans	$	10,513,473	$	435,032	$	252,672	$	98	$	11,201,275
Loans held for sale	$	-	$	-	$	7,500	$	-	$	7,500

22

The allowance for loan losses and the reserve for off-balance sheet credit commitments are significant estimates that can and do change based on management’s process in analyzing the loan portfolio and on management’s assumptions about specific borrowers, underlying collateral, and applicable economic and environmental conditions, among other factors.

The following table presents the balance in the allowance for loan losses by portfolio segment and based on impairment method as of September 30, 2017, and as of December 31, 2016:

			Real Estate		Commercial		Residential
	Commercial		Construction		Mortgage		Mortgage Loans		Installment and
	Loans		Loans		Loans		and Equity Lines		Other Loans		Total
	(In thousands)
September 30, 2017
Loans individually evaluated for impairment
Allowance	$	1,461	$	-	$	823	$	322	$	-	$	2,606
Balance	$	37,358	$	21,748	$	55,190	$	13,376	$	-	$	127,672
Loans collectively evaluated for impairment
Allowance	$	49,578	$	22,008	$	36,579	$	10,740	$	24	$	118,929
Balance	$	2,382,533	$	669,738	$	6,321,857	$	3,090,912	$	4,722	$	12,469,762
Total allowance	$	51,039	$	22,008	$	37,402	$	11,062	$	24	$	121,535
Total balance	$	2,419,891	$	691,486	$	6,377,047	$	3,104,288	$	4,722	$	12,597,434
December 31, 2016
Loans individually evaluated for impairment
Allowance	$	1,827	$	-	$	573	$	396	$	-	$	2,796
Balance	$	27,761	$	5,458	$	64,470	$	17,385	$	-	$	115,074
Loans collectively evaluated for impairment
Allowance	$	47,376	$	23,268	$	34,291	$	11,224	$	11	$	116,170
Balance	$	2,220,426	$	542,630	$	5,720,778	$	2,598,374	$	3,993	$	11,086,201
Total allowance	$	49,203	$	23,268	$	34,864	$	11,620	$	11	$	118,966
Total balance	$	2,248,187	$	548,088	$	5,785,248	$	2,615,759	$	3,993	$	11,201,275

23

The following tables detail activity in the allowance for loan losses by portfolio segment for the three and nine months ended September 30, 2017, and September 30, 2016. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.

Three months ended September 30, 2017 and 2016
				Real Estate			Commercial			Residential			Installment
	Commercial			Construction			Mortgage			Mortgage Loans			and Other
	Loans			Loans			Loans			and Equity Lines			Loans			Total
	(In thousands)
June 30, 2017 Ending Balance	$	46,744		$	17,844		$	36,840		$	14,364		$	17			115,809
Provision/(credit) for possible credit losses		3,800			4,117			(4,615	)		(3,309	)		7			-
Charge-offs		(80	)		-			(305	)		-			-			(385	)
Recoveries		575			47			5,482			7			-			6,111
Net (charge-offs)/recoveries		495			47			5,177			7			-			5,726
September 30, 2017 Ending Balance	$	51,039		$	22,008		$	37,402		$	11,062		$	24		$	121,535
June 30, 2016 Ending Balance	$	50,590		$	10,753		$	46,090		$	15,503		$	12		$	122,948
Provision/(credit) for possible credit losses		4,380			(2,056	)		3,132			(5,452	)		(4	)		-
Charge-offs		(3,277	)		-			(4,626	)		-			-			(7,903	)
Recoveries		2,006			548			337			6			-			2,897
Net (charge-offs)/recoveries		(1,271	)		548			(4,289	)		6			-			(5,006	)
September 30, 2016 Ending Balance	$	53,699		$	9,245		$	44,933		$	10,057		$	8		$	117,942

Nine months ended September 30, 2017 and 2016
				Real Estate			Commercial			Residential			Installment
	Commercial			Construction			Mortgage			Mortgage Loans			and Other
	Loans			Loans			Loans			and Equity Lines			Loans			Total
	(In thousands)
2017 Beginning Balance	$	49,203		$	23,268		$	34,864		$	11,620		$	11		$	118,966
Provision/(credit) for possible credit losses		2,245			(1,403	)		(2,775	)		(580	)		13			(2,500	)
Charge-offs		(1,810	)		-			(860	)		-			-			(2,670	)
Recoveries		1,401			143			6,173			22			-			7,739
Net (charge-offs)/recoveries		(409	)		143			5,313			22			-			5,069
September 30, 2017 Ending Balance	$	51,039		$	22,008		$	37,402		$	11,062		$	24		$	121,535
Reserve for impaired loans	$	1,461		$	-		$	823		$	322		$	-		$	2,606
Reserve for non-impaired loans	$	49,578		$	22,008		$	36,579		$	10,740		$	24		$	118,929
Reserve for off-balance sheet credit commitments	$	2,760		$	1,206		$	109		$	175		$	4		$	4,254
2016 Beginning Balance	$	56,199		$	22,170		$	49,440		$	11,145		$	9		$	138,963
Provision/(credit) for possible credit losses		5,815			(20,796	)		295			(963	)		(1	)		(15,650	)
Charge-offs		(12,035	)		-			(5,681	)		(149	)		-			(17,865	)
Recoveries		3,720			7,871			879			24			-			12,494
Net (charge-offs)/recoveries		(8,315	)		7,871			(4,802	)		(125	)		-			(5,371	)
September 30, 2016 Ending Balance	$	53,699		$	9,245		$	44,933		$	10,057		$	8		$	117,942
Reserve for impaired loans	$	1,320		$	-		$	1,248		$	375		$	-		$	2,943
Reserve for non-impaired loans	$	52,379		$	9,245		$	43,685		$	9,682		$	8		$	114,999
Reserve for off-balance sheetcredit commitments	$	2,112		$	-		$	35		$	80		$	2		$	2,229

24

9. Commitments and Contingencies

The Company is involved in various litigation concerning transactions entered into in the normal course of business. Management, after consultation with legal counsel, does not believe that the resolution of such litigation will have a material effect upon its consolidated financial condition, results of operations, or liquidity taken as a whole. Although the Company establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, the Company does not have accruals for all legal proceedings where there is a risk of loss. In addition, amounts accrued may not represent the ultimate loss to the Company from the legal proceedings in question. Thus, ultimate losses may be higher or lower, and possibly significantly so, than the amounts accrued for legal loss contingencies.

In the normal course of business, the Company becomes a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans, or through commercial or standby letters of credit and financial guarantees. These instruments represent varying degrees of exposure to risk in excess of the amounts included in the accompanying condensed consolidated balance sheets. The contractual or notional amount of these instruments indicates a level of activity associated with a particular class of financial instrument and is not a reflection of the level of expected losses, if any.

10. Borrowed Funds

Securities Sold Under Agreements to Repurchase. Securities sold under agreements to repurchase were $100 million with a weighted average rate of 2.86% as of September 30, 2017, compared to $350 million with a weighted average rate of 4.06% as of December 31, 2016. Final maturity for the two fixed rate non-callable securities sold under agreements to repurchase was $50.0 million in June 2018 and $50.0 million in July 2018.

These transactions are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The Company may have to provide additional collateral for the repurchase agreements, as necessary. The underlying collateral pledged for the repurchase agreements consists of U.S. Treasury securities and mortgage-backed securities with a fair value of $108 million as of September 30, 2017, and $372 million as of December 31, 2016.

Borrowing from the FHLB. As of September 30, 2017, over-night borrowings from the FHLB were $450 million at a rate of 1.16% compared to $275 million at a rate of 0.55% as of December 31, 2016. As of September 30, 2017, the advances from the FHLB were $145 million at a rate of 1.35%. As of September 30, 2017, FHLB advances of $490 million will mature in October 2017, $55 million in 2018 and $50 million in December 2019.

25

11. Income Taxes

The effective tax rate for the third quarter of 2017 was 41.4% compared to 25.5% for the third quarter of 2016. The third quarter 2017 effective tax rate of 41.4% reflected additional tax expense to increase the full year effective tax rate to 34% compared to the 29% effective tax rate forecasted at June 30, 2017. This adjustment in the third quarter was the result of lower tax credits from the slow deployment of alternative energy investments. Income tax expense for the first quarter of 2017 was also reduced by $2.6 million in benefits from the distribution of restricted stock units and exercises of stock options.

As of September 30, 2017 and December 31, 2016, the Company had income tax refunds receivable of $19.4 million and $14.6 million, respectively. These income tax receivables are included in other assets in the accompanying condensed consolidated balance sheets.

The Company’s tax returns are open for audit by the Internal Revenue Service back to 2014 and by the California Franchise Tax Board back to 2012. As the Company is presently under audit by a number of tax authorities, it is reasonably possible that unrecognized tax benefits could change significantly over the next twelve months. The Company does not expect that any such changes would have a material impact on its annual effective tax rate.

12. Fair Value Measurements

The Company adopted ASC Topic 820 on January 1, 2008, and determined the fair values of our financial instruments based on the following:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Observable prices in active markets for similar assets or liabilities; prices for identical or similar assets or liabilities in markets that are not active; directly observable market inputs for substantially the full term of the asset and liability; market inputs that are not directly observable but are derived from or corroborated by observable market data.

• Level 3 – Unobservable inputs based on the Company’s own judgment about the assumptions that a market participant would use.

The Company uses the following methodologies to measure the fair value of its financial assets and liabilities on a recurring basis:

Securities Available for Sale. For certain actively traded agency preferred stock, mutual funds, U.S. Treasury securities, and other equity securities, the Company measures the fair value based on quoted market prices in active exchange markets at the reporting date, a Level 1 measurement. The Company also measures securities by using quoted market prices for similar securities or dealer quotes, a Level 2 measurement. This category generally includes U.S. Government agency securities, state and municipal securities, mortgage-backed securities (“MBS”), commercial MBS, collateralized mortgage obligations, asset-backed securities, corporate bonds and trust preferred securities.

Warrants. The Company measures the fair value of warrants based on unobservable inputs based on assumptions and management judgment, a Level 3 measurement.

Foreign Exchange Contracts. The Company measures the fair value of foreign exchange contracts based on dealer quotes, a Level 2 measurement.

26

Interest Rate Swaps. Fair value of interest rate swaps is derived from third party models with observable market data, a Level 2 measurement.

The valuation techniques for the assets and liabilities valued on a nonrecurring basis are as follows:

Impaired Loans. The Company does not record loans at fair value on a recurring basis. However, from time to time, nonrecurring fair value adjustments to collateral dependent impaired loans are recorded based on either the current appraised value of the collateral, a Level 2 measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, a Level 3 measurement.

Goodwill. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The two-step impairment testing process, if needed, begins by assigning net assets and goodwill to the two reporting units—Commercial Lending and Retail Banking.  The Company then completes “step one” of the impairment test by comparing the fair value of each reporting unit (as determined based on the discussion below) with the recorded book value (or “carrying amount”) of its net assets, with goodwill included in the computation of the carrying amount.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is not considered impaired, and “step two” of the impairment test is not necessary.  If the carrying amount of a reporting unit exceeds its fair value, step two of the impairment test is performed to determine the amount of impairment.  Step two of the impairment test compares the carrying amount of the reporting unit’s goodwill to the “implied fair value” of that goodwill.  The implied fair value of goodwill is computed by assuming that all assets and liabilities of the reporting unit would be adjusted to the current fair value, with the offset as an adjustment to goodwill.  This adjusted goodwill balance is the implied fair value used in step two.  An impairment charge is recognized for the amount by which the carrying amount of goodwill exceeds its implied fair value. In connection with the determination of fair value, certain data and information is utilized, including earnings forecasts at the reporting unit level for the next four years.  Other key assumptions include terminal values based on future growth rates and discount rates for valuing the cash flows, which have inputs for the risk-free rate, market risk premium, and adjustments to reflect inherent risk and required market returns. Because of the significance of unobservable inputs in the valuation of goodwill impairment, goodwill subject to nonrecurring fair value adjustments is classified as a Level 3 measurement.

Core Deposit Intangibles. Core deposit intangibles is initially recorded at fair value based on a valuation of the core deposits acquired and is amortized over its estimated useful life, which range from 4 to 10 years, to its residual value in proportion to the economic benefits consumed. The Company assesses the recoverability of this intangible asset on a nonrecurring basis using the core deposits remaining at the assessment date and the fair value of cash flows expected to be generated from the core deposits, a Level 3 measurement.

Other Real Estate Owned. Real estate acquired in the settlement of loans is initially recorded at fair value based on the appraised value of the property on the date of transfer, less estimated costs to sell, a Level 2 measurement. From time to time, nonrecurring fair value adjustments are made to other real estate owned based on the current updated appraised value of the property, also a Level 2 measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, a Level 3 measurement.

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Investments in Venture Capital. The Company periodically reviews its investments in venture capital for other-than-temporary impairment on a nonrecurring basis. Investments in venture capital were written down to their fair value based on available financial reports from venture capital partnerships and management’s judgment and estimation, a Level 3 measurement.

Equity Investments. The Company records equity investments at fair value on a nonrecurring basis based on quoted market prices in active exchange markets at the reporting date, a Level 1 measurement.

The following tables present the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of September 30, 2017, and December 31, 2016:

September 30, 2017	Fair Value Measurements Using						Total at
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Assets
Securities available-for-sale
U.S. Treasury securities	$	399,436	$	-	$	-	$	399,436
U.S. government agencies		-		9,700		-		9,700
U.S. government sponsored entities		-		393,722		-		393,722
State and municipal securities		-		1,931		-		1,931
Mortgage-backed securities		-		446,065		-		446,065
Collateralized mortgage obligations		-		1,710		-		1,710
Corporate debt securities		-		80,906		-		80,906
Mutual funds		6,271		-		-		6,271
Preferred stock of government sponsored entities		8,087		-		-		8,087
Other equity securities		20,659		-		-		20,659
Total securities available-for-sale		434,453		934,034		-		1,368,487
Warrants		-		-		97		97
Foreign exchange contracts		-		1,725		-		1,725
Interest rate swaps		-		2,314		-		2,314
Total assets	$	434,453	$	938,073	$	97	$	1,372,623
Liabilities
Option contracts	$	-	$	234	$	-	$	234
Foreign exchange contracts		-		1,083		-		1,083
Interest rate swaps		-		5,049		-		5,049
Total liabilities	$	-	$	6,366	$	-	$	6,366

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December 31, 2016	Fair Value Measurements Using						Total at
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Assets
Securities available-for-sale
U.S. Treasury securities	$	489,017	$	-	$	-	$	489,017
U.S. government sponsored entities		-		390,331		-		390,331
Mortgage-backed securities		-		336,260		-		336,260
Collateralized mortgage obligations		-		28		-		28
Corporate debt securities		-		74,350		-		74,350
Mutual funds		6,230		-		-		6,230
Preferred stock of government sponsored entities		7,308		-		-		7,308
Other equity securities		10,821		-		-		10,821
Total securities available-for-sale		513,376		800,969		-		1,314,345
Warrants		-		-		79		79
Interest rate swaps		-		938		-		938
Foreign exchange contracts		-		1,302		-		1,302
Total assets	$	513,376	$	803,209	$	79	$	1,316,664
Liabilities
Option contracts	$	-	$	121	$	-	$	121
Interest rate swaps		-		3,744		-		3,744
Foreign exchange contracts		-		3,132		-		3,132
Total liabilities	$	-	$	6,997	$	-	$	6,997

The Company measured the fair value of its warrants on a recurring basis using significant unobservable inputs. The fair value of warrants was $97,000 as of September 30, 2017, compared to $79,000 as of December 31, 2016. The fair value adjustment of warrants was included in other operating income in the third quarter of 2017. The significant unobservable inputs in the Black-Scholes option pricing model for the fair value of warrants are their expected life ranging from 1 to 6 years, risk-free interest rate from 1.51% to 2.28%, and stock volatility from 5.05% to 12.6%.

For financial assets measured at fair value on a nonrecurring basis that were still reflected in the condensed consolidated balance sheet as of September 30, 2017, the following tables provide the level of valuation assumptions used to determine each adjustment, the carrying value of the related individual assets as of September 30, 2017, and December 31, 2016, and the total losses for the periods indicated:

	September 30, 2017								Total (Gains)/Losses
	Fair Value Measurements Using						Total at		Three Months Ended					Nine Months Ended
	Level 1		Level 2		Level 3		Fair Value		September 30, 2017		September 30, 2016			September 30, 2017		September 30, 2016
	(In thousands)
Assets
Impaired loans by type:
Commercial loans	$	-	$	-	$	12,525	$	12,525	$	-	$	-		$	25	$	-
Commercial mortgage loans		-		-		21,997		21,997		-		-			-		-
Residential mortgage loans and equity lines		-		-		10,790		10,790		-		-			-		-
Total impaired loans		-		-		45,312		45,312		-		-			25		-
Other real estate owned (1)		-		6,317		4,322		10,639		405		(206	)		654		9
Investments in venture capital and private company stock		-		-		3,023		3,023		12		187			365		419
Total assets	$	-	$	6,317	$	52,657	$	58,974	$	417	$	(19	)	$	1,044	$	428

(1) Other real estate owned balance of $18.1 million in the condensed consolidated balance sheet is net of estimated disposal costs.

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	December 31, 2016								Total Losses
	Fair Value Measurements Using						Total at		Twelve Months Ended
	Level 1		Level 2		Level 3		Fair Value		December 31, 2016		December 31, 2015
	(In thousands)
Assets
Impaired loans by type:
Commercial loans	$	-	$	-	$	2,813	$	2,813	$	322	$	806
Commercial mortgage loans		-		-		9,444		9,444		-		598
Residential mortgage loans and equity lines		-		-		11,679		11,679		-		146
Total impaired loans		-		-		23,936		23,936		322		1,550
Other real estate owned (1)		-		6,006		4,372		10,378		9		404
Investments in venture capital and private company stock		-		-		3,667		3,667		976		553
Total assets	$	-	$	6,006	$	31,975	$	37,981	$	1,307	$	2,507

(1) Other real estate owned balance of $20.1 million in the condensed consolidated balance sheet is net of estimated disposal costs.

The significant unobservable (Level 3) inputs used in the fair value measurement of collateral for collateral-dependent impaired loans was primarily based on the appraised value of collateral adjusted by estimated sales cost and commissions. The Company generally obtains new appraisal reports every nine months. As the Company’s primary objective in the event of default would be to monetize the collateral to settle the outstanding balance of the loan, less marketable collateral would receive a larger discount. During the reported periods, collateral discounts ranged from 55% in the case of accounts receivable collateral to 65% in the case of inventory collateral.

The significant unobservable inputs used in the fair value measurement of loans held for sale was primarily based on the quoted price or sale price adjusted by estimated sales cost and commissions.

The significant unobservable inputs used in the fair value measurement of other real estate owned (“OREO”) was primarily based on the appraised value of OREO adjusted by estimated sales cost and commissions. The Company applies estimated sales cost and commissions ranging from 3% to 6% of the collateral value of impaired loans, quoted price, or loan sale price of loans held for sale, and appraised value of OREO.

13. Fair Value of Financial Instruments

The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments.

Cash and Cash Equivalents. For cash and cash equivalents, the carrying amount was assumed to be a reasonable estimate of fair value, a Level 1 measurement.

Short-term Investments. For short-term investments, the carrying amount was assumed to be a reasonable estimate of fair value, a Level 1 measurement.

Securities Purchased under Agreements to Resell. The fair value of securities purchased under agreements to resell is based on dealer quotes, a Level 2 measurement.

Securities. For securities, including securities held-to-maturity, available-for-sale, and for trading, fair values were based on quoted market prices at the reporting date. If a quoted market price was not available, fair value was estimated using quoted market prices for similar securities or dealer quotes. For certain actively traded agency preferred stock, U.S. Treasury securities, and other equity securities, the Company measures the fair value based on quoted market prices in active exchange markets at the reporting date, a Level 1 measurement. The Company also measures securities by using quoted market prices for similar securities or dealer quotes, a Level 2 measurement. This category generally includes U.S. Government agency securities, state and municipal securities, mortgage-backed securities (“MBS”), commercial MBS, collateralized mortgage obligations, asset-backed securities, and corporate bonds.

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Loans Held for Sale. The Company records loans held for sale at fair value based on quoted prices from third party sources, or appraisal reports adjusted by sales commission assumptions.

Loans. Fair values were estimated for portfolios of loans with similar financial characteristics. Each loan category was further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories.

The fair value of performing loans was calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan, a Level 3 measurement.

The fair value of impaired loans was calculated based on the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company does not record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent impaired loans are recorded based on the current appraised value or adjusted appraised value of the collateral, a Level 2 or Level 3 measurement.

Deposit Liabilities. The fair value of demand deposits, savings accounts, and certain money market deposits was assumed to be the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit was estimated using the rates currently offered for deposits with similar remaining maturities, a Level 3 measurement.

Securities Sold under Agreements to Repurchase. The fair value of securities sold under agreements to repurchase is based on dealer quotes, a Level 2 measurement.

Advances from Federal Home Loan Bank (“FHLB”). The fair value of the advances is based on quotes from the FHLB to settle the advances, a Level 2 measurement.

Other Borrowings. This category includes borrowings from other financial institutions.  The fair value of other borrowings is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level 3 measurement. 

Long-term Debt. The fair value of long-term debt is estimated based on the quoted market prices or dealer quotes, a Level 2 measurement.

Currency Option and Foreign Exchange Contracts. The Company measures the fair value of currency option and foreign exchange contracts based on dealer quotes, a Level 2 measurement.

Interest Rate Swaps. Fair value of interest rate swaps is derived from third party models with observable market data, a Level 2 measurement.

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Off-Balance-Sheet Financial Instruments. The fair value of commitments to extend credit, standby letters of credit, and financial guarantees written were estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. The fair value of guarantees and letters of credit was based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The fair value of off-balance-sheet financial instruments was based on the assumptions that a market participant would use, a Level 3 measurement.

Fair value was estimated in accordance with ASC Topic 825. Fair value estimates were made at specific points in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Bank’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Bank’s financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates were subjective in nature and involved uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

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The following table presents the carrying and notional amounts and estimated fair value of financial instruments as of September 30, 2017, and as of December 31, 2016:

	September 30, 2017				December 31, 2016
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
	(In thousands)
Financial Assets
Cash and due from banks	$	167,886	$	167,886	$	218,017	$	218,017
Short-term investments		573,059		573,059		967,067		967,067
Securities available-for-sale		1,368,487		1,368,487		1,314,345		1,314,345
Loans held for sale		-		-		7,500		7,500
Loans, net		12,472,475		12,403,100		11,077,315		11,006,344
Investment in Federal Home Loan Bank stock		21,948		21,948		17,250		17,250
Investment in Federal Reserve Bank stock		8,733		8,733		-		-
Warrants		97		97		79		79

	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Foreign exchange contracts	$	69,278	$	1,725	$	82,439	$	1,302
Interest rate swaps		155,671		2,314		361,526		938

	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial Liabilities
Deposits	$	12,561,695	$	12,573,127	$	11,674,726	$	11,680,017
Securities sold under agreements to repurchase		100,000		100,549		350,000		351,989
Advances from Federal Home Loan Bank		595,000		595,037		350,000		350,062
Other borrowings		153,574		151,643		17,662		15,944
Long-term debt		119,136		68,056		119,136		63,169

	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Option contracts	$	12,307	$	234	$	12,117	$	121
Foreign exchange contracts		86,625		1,083		89,545		3,132
Interest rate swaps		510,841		5,049		119,136		3,744

	Notional					Notional
	Amount		Fair Value			Amount		Fair Value
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	2,287,498	$	(6,924	)	$	2,062,241	$	(6,025	)
Standby letters of credit		140,682		(1,699	)		75,396		(668	)
Other letters of credit		41,868		(218	)		37,283		(16	)
Bill of lading guarantees		24		-			75		-

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The following tables present the level in the fair value hierarchy for the estimated fair values of financial instruments as of September 30, 2017, and December 31, 2016.

	September 30, 2017
	Estimated
	Fair Value
	Measurements		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets
Cash and due from banks	$	167,886	$	167,886	$	-	$	-
Short-term investments		573,059		573,059		-		-
Securities available-for-sale		1,368,487		434,453		934,034		-
Loans held-for-sale		-		-		-		-
Loans, net		12,403,100		-		-		12,403,100
Investment in Federal Home Loan Bank stock		21,948		-		21,948		-
Investment in Federal Reserve Bank stock		8,733		-		8,733		-
Warrants		97		-		-		97
Financial Liabilities
Deposits		12,573,127		-		-		12,573,127
Securities sold under agreements to repurchase		100,549		-		100,549		-
Advances from Federal Home Loan Bank		595,037		-		595,037		-
Other borrowings		151,643		-		-		151,643
Long-term debt		68,056		-		68,056		-

	December 31, 2016
	Estimated
	Fair Value
	Measurements		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets
Cash and due from banks	$	218,017	$	218,017	$	-	$	-
Short-term investments		967,067		967,067		-		-
Securities available-for-sale		1,314,345		513,376		800,969		-
Loans held-for-sale		7,500		-		-		7,500
Loans, net		11,006,344		-		-		11,006,344
Investment in Federal Home Loan Bank stock		17,250		-		17,250		-
Warrants		79		-		-		79
Financial Liabilities
Deposits		11,680,017		-		-		11,680,017
Securities sold under agreements to repurchase		351,989		-		351,989		-
Advances from Federal Home Loan Bank		350,062		-		350,062		-
Other borrowings		15,944		-		-		15,944
Long-term debt		63,169		-		63,169		-

14. Goodwill and Goodwill Impairment

The Company’s policy is to assess goodwill for impairment at the reporting unit level on an annual basis or between annual assessments if a triggering event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount.  Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value.  

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The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The two-step impairment testing process, if needed, begins by assigning net assets and goodwill to our two reporting units—Commercial Lending and Retail Banking.  The Company then completes “step one” of the impairment test by comparing the fair value of each reporting unit (as determined based on the discussion below) with the recorded book value (or “carrying amount”) of its net assets, with goodwill included in the computation of the carrying amount.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is not considered impaired, and “step two” of the impairment test is not necessary.  If the carrying amount of a reporting unit exceeds its fair value, step two of the impairment test is performed to determine the amount of impairment.  Step two of the impairment test compares the carrying amount of the reporting unit’s goodwill to the “implied fair value” of that goodwill.  The implied fair value of goodwill is computed by assuming that all assets and liabilities of the reporting unit would be adjusted to the current fair value, with the offset as an adjustment to goodwill.  This adjusted goodwill balance is the implied fair value used in step two.  An impairment charge is recognized for the amount by which the carrying amount of goodwill exceeds its implied fair value.

As of September 30, 2017, the Company’s market capitalization was above book value and there was no triggering event that required the Company to assess goodwill for impairment as of an interim date.

15. Financial Derivatives

It is the policy of the Company not to speculate on the future direction of interest rates. However, the Company enters into financial derivatives in order to seek mitigation of exposure to interest rate risks related to our interest-earning assets and interest-bearing liabilities. We believe that these transactions, when properly structured and managed, may provide a hedge against inherent interest rate risk in the Company’s assets or liabilities and against risk in specific transactions. In such instances, the Company may enter into interest rate swap contracts or other types of financial derivatives. Prior to considering any hedging activities, we seek to analyze the costs and benefits of the hedge in comparison to other viable alternative strategies. All hedges must be approved by the Bank’s Investment Committee.

The Company follows ASC Topic 815 that establishes accounting and reporting standards for financial derivatives, including certain financial derivatives embedded in other contracts, and hedging activities. It requires the recognition of all financial derivatives as assets or liabilities in the Company’s consolidated balance sheet and measurement of those financial derivatives at fair value. The accounting treatment of changes in fair value is dependent upon whether or not a financial derivative is designated as a hedge and, if so, the type of hedge. Fair value is determined using third-party models with observable market data. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives are reflected in current earnings, together with changes in the fair value of the related hedged item if there is a highly effective correlation between changes in the fair value of the interest rate swaps and changes in the fair value of the underlying asset or liability that is intended to be hedged. If there is not a highly effective correlation between changes in the fair value of the interest rate swap and changes in the fair value of the underlying asset or liability that is intended to be hedged, then only the changes in the fair value of the interest rate swaps are reflected in the Company’s consolidated financial statements.

In May 2014, Bancorp entered into interest rate swap contracts in the notional amount of $119.1 million for a period of ten years. The objective of these interest rate swap contracts, which were designated as hedging instruments in cash flow hedges, was to hedge on Bancorp’s $119.1 million of Junior Subordinated Debentures that had been issued to five trusts, with the quarterly interest payments throughout the ten-year period beginning in June 2014 and ending in June 2024, from the risk of variability of these payments resulting from changes in the three-month LIBOR interest rate. Bancorp pays a weighted average fixed interest rate of 2.61% and receives a variable interest rate of the three-month LIBOR at a weighted average rate of 1.32%. As of September 30, 2017, the notional amount of cash flow interest rate swaps was $119.1 million and their unrealized loss of $2.3 million, net of taxes, was included in other comprehensive income. The amount of periodic net settlement of interest rate swaps included in interest expense was $407,000 for the three months ended September 30, 2017 compared to $588,000 for the same quarter a year ago. For the nine months ended September 30, 2017, the periodic net settlement of interest rate swaps included in interest expense was $1.3 million compared to $1.8 million for the same period in 2016.

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As of September 30, 2017, the Bank has entered into interest rate swap contracts with various terms from four to eight years. These interest rate swap contracts are matched to individual fixed-rate commercial real estate loans in the Bank’s loan portfolio. These contracts have been designated as hedging instruments to hedge the risk of changes in the fair value of the underlying commercial real estate loan due to changes in interest rates. The swap contracts are structured so that the notional amounts reduce over time to match the contractual amortization of the underlying loan and allow prepayments with the same pre-payment penalty amounts as the related loan. The Bank pays a weighted average fixed rate of 4.55% and receives a variable rate at the one month LIBOR rate plus a weighted average spread of 293 basis points, or at a weighted average rate of 4.16%. As of September 30, 2017, the notional amount of fair value interest rate swaps was $510.6 million and their unrealized gain of $1.9 million was included in other non-interest income. The amount of periodic net settlement of interest rate swaps reducing interest income was $514,000 for the three months ended September 30, 2017, compared to $879,000 for the same quarter a year ago. The amount of periodic net settlement of interest rate swaps reducing interest income was $1.9 million for the nine months ended September 30, 2017, compared to $2.8 million for the same period a year ago. As of September 30, 2017, the ineffective portion of these interest rate swaps was not significant.

Interest rate swap contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Institutional counterparties must have a strong credit profile and be approved by the Company’s Board of Directors. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure may be reduced by the amount of collateral pledged by the counterparty. Bancorp’s interest rate swaps have been assigned by the counterparties to a derivatives clearing organization and daily margin is indirectly maintained with the derivatives clearing organization. Cash posted as collateral by Bancorp related to derivative contracts totaled $6.3 million as of September 30, 2017.

The Company enters into foreign exchange forward contracts with various counterparties to mitigate the risk of fluctuations in foreign currency exchange rates for foreign exchange certificates of deposit or foreign exchange contracts entered into with our clients. These contracts are not designated as hedging instruments and are recorded at fair value in our condensed consolidated balance sheets. Changes in the fair value of these contracts as well as the related foreign exchange certificates of deposit and foreign exchange contracts are recognized immediately in net income as a component of non-interest income. Period end gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities. As of September 30, 2017, the notional amount of option contracts totaled $12.3 million with a net negative fair value of $234,000. As of September 30, 2017, spot, forward, and swap contracts with a total notional amount of $69.3 million had a positive fair value of $1.7 million. Spot, forward, and swap contracts with a total notional amount of $86.6 million had a negative fair value of $1.1 million as of September 30, 2017. As of December 31, 2016, the notional amount of option contracts totaled $12.1 million with a net negative fair value of $121,000. As of December 31, 2016, spot, forward, and swap contracts with a total notional amount of $82.4 million had a positive fair value of $1.3 million. Spot, forward, and swap contracts with a total notional amount of $89.5 million had a negative fair value of $3.1 million as of December 31, 2016.

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16. Balance Sheet Offsetting

Certain financial instruments, including resell and repurchase agreements, securities lending arrangements and derivatives, may be eligible for offset in the condensed consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The Company’s securities sold with agreements to repurchase and derivative transactions with upstream financial institution counterparties are generally executed under International Swaps and Derivative Association master agreements that include “right of set-off” provisions. In such cases, there is generally a legally enforceable right to offset recognized amounts and there may be an intention to settle such amounts on a net basis. Nonetheless, the Company does not generally offset such financial instruments for financial reporting purposes.

Financial instruments that are eligible for offset in the condensed consolidated balance sheets, as of September 30, 2017, and December 31, 2016, are presented in the following table:

							Gross Amounts Not Offset in the Balance Sheet
	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Collateral Posted			Net Amount
September 30, 2017	(In thousands)
Assets:
Derivatives	$	2,314	$	-	$	2,314	$	-	$	-		$	2,314
Liabilities:
Securities sold under agreements to repurchase	$	100,000	$	-	$	100,000	$	-	$	(100,000	)	$	-
Derivatives	$	5,049	$	-	$	5,049	$	-	$	(5,049	)	$	-
December 31, 2016
Assets:
Derivatives	$	938	$	-	$	938	$	-	$	-		$	938
Liabilities:
Securities sold under agreements to repurchase	$	350,000	$	-	$	350,000	$	-	$	(350,000	)	$	-
Derivatives	$	3,744	$	-	$	3,744	$	-	$	(3,744	)	$	-

37

17. Stockholders’ Equity

Total equity was $2.0 billion as of September 30, 2017, an increase of $140.2 million, from $1.8 billion as of December 31, 2016, primarily due to net income of $150.1 million and equity consideration for the acquisition of SinoPac Bancorp of $34.9 million partially offset by common stock cash dividends of $50.5 million and shares withheld related to net share settlement of RSUs of $5.1 million.

The U.S. Treasury received warrants to purchase common stock of 1,846,374 shares at an exercise price of $20.96 as part of the Company’s participation in the U.S. Treasury Troubled Asset Relief Program Capital Purchase Program. As a result of the anti-dilution adjustments under the warrant, the exercise price at December 31, 2016 has been adjusted to $20.65 and the number of warrants increased by 1.5%. At September 30, 2017, 932,461 warrants remain exercisable compared to 943,345 warrants at December 31, 2016.

Activity in accumulated other comprehensive income, net of tax, and reclassification out of accumulated other comprehensive income for the three months and nine months ended September 30, 2017, and September 30, 2016, was as follows:

	Three months ended September 30, 2017									Three months ended September 30, 2016
	Pre-tax			Tax expense/ (benefit)			Net-of-tax			Pre-tax			Tax expense/ (benefit)			Net-of-tax
	(In thousands)
Beginning balance, loss, net of tax
Securities available-for-sale							$	1,001								$	8,539
Cash flow hedge derivatives								(2,421	)								(7,397	)
Total							$	(1,420	)							$	1,142
Net unrealized (losses)/gains arising during the period
Securities available-for-sale	$	1,829		$	769		$	1,060		$	1,618		$	680		$	938
Cash flow hedge derivatives		271			114			157			1,387			583			804
Total		2,100			883			1,217			3,005			1,263		$	1,742
Reclassification adjustment for net losses in net income
Securities available-for-sale		(24	)		(10	)		(14	)		(1,692	)		(711	)		(981	)
Cash flow hedge derivatives		-			-			-			-			-			-
Total		(24	)		(10	)		(14	)		(1,692	)		(711	)		(981	)
Total other comprehensive (loss)/income
Securities available-for-sale		1,805			759			1,046			(74	)		(31	)		(43	)
Cash flow hedge derivatives		271			114			157			1,387			583			804
Total	$	2,076		$	873		$	1,203		$	1,313		$	552		$	761
Ending balance, (loss)/gain, net of tax
Securities available-for-sale							$	2,047								$	8,496
Cash flow hedge derivatives								(2,264	)								(6,593	)
Total							$	(217	)							$	1,903

38

	Nine months ended September 30, 2017									Nine months ended September 30, 2016
	Pre-tax			Tax expense/ (benefit)			Net-of-tax			Pre-tax			Tax expense/ (benefit)			Net-of-tax
	(In thousands)
Beginning balance, loss, net of tax
Securities available-for sale							$	(1,545	)							$	(5,431	)
Cash flow hedge derivatives								(2,170	)								(2,995	)
Total							$	(3,715	)							$	(8,426	)
Net unrealized gains/(losses) arising during the period
Securities available-for sale	$	5,759		$	2,421		$	3,338		$	27,170		$	11,422		$	15,748
Cash flow hedge derivatives		(162	)		(68	)		(94	)		(6,208	)		(2,610	)		(3,598	)
Total		5,597			2,353			3,244			20,962			8,812		$	12,150
Reclassification adjustment for net (gains)/losses in net income
Securities available-for sale		439			185			254			(3,141	)		(1,320	)		(1,821	)
Cash flow hedge derivatives		-			-			-			-			-			-
Total		439			185			254			(3,141	)		(1,320	)		(1,821	)
Total other comprehensive income/(loss)
Securities available-for sale		6,198			2,606			3,592			24,029			10,102			13,927
Cash flow hedge derivatives		(162	)		(68	)		(94	)		(6,208	)		(2,610	)		(3,598	)
Total	$	6,036		$	2,538		$	3,498		$	17,821		$	7,492		$	10,329
Ending balance, gain/(loss), net of tax
Securities available-for sale							$	2,047								$	8,496
Cash flow hedge derivatives								(2,264	)								(6,593	)
Total							$	(217	)							$	1,903

18. Stock Repurchase Program

On February 1, 2016, the Company’s Board of Directors approved a new stock repurchase program to buy back up to $45.0 million of our common stock. In 2016, the Company repurchased 1,380,578 shares for $37.5 million, or $27.13 per share under the February 2016 repurchase program. The Company did not repurchase any shares under the February 2016 repurchase program for the nine months ended September 30, 2017. As of September 30, 2017 and December 31, 2016, the Company may repurchase up to $7.5 million of its common stock under the February 2016 repurchase program.

19. Subsequent Events

The Company has evaluated the effect of the following events that have occurred subsequent to the quarter ended September 30, 2017 through the date of issuance of the accompanying condensed consolidated financial statements.

The Bank received final regulatory approval and the merger of Far East National Bank into Cathay Bank was completed on October 27, 2017.  Each of the nine former FENB branches in California and its representative office in Beijing became a branch and representative office of Cathay Bank as a result of the merger.  As of the filing date of this report, Cathay Bank operates 43 branches in California, 12 branches in New York State, three in the Chicago, Illinois area, three in Washington State, two in Texas, one in Maryland, one in Massachusetts, one in Nevada, one in New Jersey, one in Hong Kong, and a representative office in Taipei, Shanghai, and Beijing.

39

Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The following discussion is based on the assumption that the reader has access to and has read the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Critical Accounting Policies

The discussion and analysis of the Company’s financial condition and results of operations are based upon its unaudited condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America. The preparation of these condensed consolidated financial statements requires management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues, and expenses, and related disclosures of contingent assets and liabilities at the date of our financial statements. Actual results may differ from these estimates under different assumptions or conditions.

Management of the Company considers the following to be critical accounting policies:

Accounting for the allowance for loan losses involves significant judgments and assumptions by management, which have a material impact on the carrying value of net loans. The judgments and assumptions used by management are based on historical experience and other factors, which are believed to be reasonable under the circumstances as described in “Allowance for Credit Losses” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Accounting for investment securities involves significant judgments and assumptions by management, which have a material impact on the carrying value of securities and the recognition of any “other-than-temporary” impairment to our investment securities. The judgments and assumptions used by management are described in “Investment Securities” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Accounting for income taxes involves significant judgments and assumptions by management, which have a material impact on the amount of taxes currently payable and the income tax expense recorded in the financial statements. The judgments and assumptions used by management are described in “Income Taxes” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

Accounting for goodwill and goodwill impairment involves significant judgments and assumptions by management, which have a material impact on the amount of goodwill and noninterest expense recorded in the financial statements. The judgments and assumptions used by management are described in “Goodwill and Goodwill Impairment” under “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Policies” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016.

40

Highlights

● Completed the acquisition of SinoPac Bancorp, the holding company for Far East National Bank, (“FENB”) on July 14, 2017.

● Total loans during the third quarter increased by $1.0 billion to $12.6 billion.

● Net interest margin increased to 3.75% in the third quarter compared to 3.63% in the second quarter of 2017.

Quarterly Statement of Operations Review

Net Income

Net income for the quarter ended September 30, 2017, was $49.7 million, an increase of $3.6 million, or 7.8%, compared to net income of $46.1 million for the same quarter a year ago. Diluted earnings per share for the quarter ended September 30, 2017, was $0.61 compared to $0.58 for the same quarter a year ago.

Return on average stockholders’ equity was 9.77% and return on average assets was 1.29% for the quarter ended September 30, 2017, compared to a return on average stockholders’ equity of 10.30% and a return on average assets of 1.38% for the same quarter a year ago.

Financial Performance

	Three months ended
	September 30, 2017			September 30, 2016
Net income	$	49.7 million		$	46.1 million
Basic earnings per common share	$	0.62		$	0.58
Diluted earnings per common share	$	0.61		$	0.58
Return on average assets		1.29	%		1.38	%
Return on average total stockholders' equity		9.77	%		10.30	%
Efficiency ratio		41.91	%		45.05	%

Net Interest Income Before Provision for Credit Losses

Net interest income before provision for credit losses increased $29.4 million, or 28.3%, to $133.2 million during the third quarter of 2017 compared to $103.8 million during the same quarter a year ago. The increase was due primarily to an increase in interest income from loans and a decrease in interest expense from securities sold under agreements to repurchase.

The net interest margin was 3.75% for the third quarter of 2017 compared to 3.36% for the third quarter of 2016 and 3.63% for the second quarter of 2017. The increase from the second quarter of 2017 was primarily the result of interest recoveries and prepayment penalties of $5.6 million.

For the third quarter of 2017, the yield on average interest-earning assets was 4.34%, the cost of funds on average interest-bearing liabilities was 0.81%, and the cost of interest-bearing deposits was 0.68%. In comparison, for the third quarter of 2016, the yield on average interest-earning assets was 4.02%, the cost of funds on average interest-bearing liabilities was 0.89%, and the cost of average interest-bearing deposits was 0.70%. The increase in the yield on average interest earning assets was a result of higher interest rates, interest income collected from nonaccrual loans and loan prepayment penalties. The net interest spread, defined as the difference between the yield on average interest-earning assets and the cost of funds on average interest-bearing liabilities, was 3.53% for the quarter ended September 30, 2017, compared to 3.13% for the same quarter a year ago.

41

The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields and rates paid on those assets and liabilities for the three months ended September 30, 2017, and 2016. Average outstanding amounts included in the table are daily averages.

Interest-Earning Assets and Interest-Bearing Liabilities
	Three months ended September 30,
	2017								2016
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
(Dollars in thousands)	Balance			Expense		Rate (1)(2)			Balance			Expense		Rate (1)(2)
Interest earning assets:
Total loans and leases (1)	$	12,317,721		$	146,383		4.71	%		10,670,253			118,500		4.42
Investment securities		1,396,859			5,692		1.62			1,303,598			4,850		1.48
Federal Home Loan Bank and FRB stock		32,369			607		7.44			17,268			393		9.05
Interest bearing deposits		292,595			1,288		1.75			294,292			412		0.56
Federal funds sold and securities purchased under agreements to resell		35,707			108		1.20								-
Total interest-earning assets		14,075,251			154,078		4.34			12,285,411			124,155		4.02
Non-interest earning assets:
Cash and due from banks		294,466								223,925
Other non-earning assets		1,094,648								884,006
Total non-interest earning assets		1,389,114								1,107,931
Less:   Allowance for loan losses		(105,390	)							(123,609	)
Deferred loan fees		(4,852	)							(6,348	)
Total assets	$	15,354,123							$	13,263,385
Interest bearing liabilities:
Interest bearing demand accounts	$	1,349,508		$	588		0.17		$	1,060,065		$	441		0.17
Money market accounts		2,496,548			3,944		0.63			2,117,831			3,511		0.66
Savings accounts		942,452			569		0.24			627,912			260		0.16
Time deposits		4,939,189			11,678		0.94			4,651,593			10,701		0.92
Total interest-bearing deposits		9,727,697			16,779		0.68			8,457,401			14,913		0.70
Securities sold under agreements to repurchase		109,239			874		3.17			378,261			3,828		4.03
Other borrowings		324,581			1,773		2.17			107,203			134		0.50
Long-term debt		119,136			1,456		4.85			119,136			1,456		4.86
Total interest-bearing liabilities		10,280,653			20,882		0.81			9,062,001			20,331		0.89
Non-interest bearing liabilities:
Demand deposits		2,714,244								2,254,123
Other liabilities		339,001								167,409
Total equity		2,020,224								1,779,852
Total liabilities and equity	$	15,354,122							$	13,263,385
Net interest spread							3.53	%							3.13	%
Net interest income				$	133,196							$	103,824
Net interest margin							3.75	%							3.36	%

(1) Yields and amounts of interest earned include loan fees. Non-accrual loans are included in the average balance.

(2) Calculated by dividing net interest income by average outstanding interest-earning assets.

42

The following table summarizes the changes in interest income and interest expense attributable to changes in volume and changes in interest rates:

Taxable-Equivalent Net Interest Income — Changes Due to Volume and Rate(1)
	Three months ended September 30,
	2017-2016
	Increase (Decrease) in
	Net Interest Income Due to:
(In thousands)	Changes in Volume			Changes in Rate			Total Change
Interest-earning assets:
Loans and leases	$	19,431		$	8,452		$	27,883
Investment securities		368			474			842
Federal Home Loan Bank and FRB stock		294			(80	)		214
Deposits with other banks		(2	)		878			876
Federal funds sold and securities purchased under agreements to resell		108			-			108
Total changes in interest income		20,199			9,724			29,923
Interest-bearing liabilities:
Interest bearing demand accounts		126			21			147
Money market accounts		610			(177	)		433
Savings accounts		162			147			309
Time deposits		696			281			977
Securities sold under agreements to repurchase		(2,277	)		(677	)		(2,954	)
Other borrowed funds		617			1,022			1,639
Long-term debt		-			-			-
Total changes in interest expense		(66	)		617			551
Changes in net interest income	$	20,265		$	9,107		$	29,372

(1) Changes in interest income and interest expense attributable to changes in both volume and rate have been allocated proportionately to changes due to volume and changes due to rate.

43

Provision/(Reversal) for Credit Losses

The provision for credit losses was zero for the third quarter of 2017 and 2016. The provision/(reversal) for credit losses was based on a review of the appropriateness of the allowance for loan losses at September 30, 2017. The following table summarizes the charge-offs and recoveries for the periods indicated:

	Three months ended					Nine months ended September 30,
	September 30, 2017			September 30, 2016		2017			2016
	(In thousands)
Charge-offs:
Commercial loans	$	80		$	3,278	$	1,810		$	12,035
Real estate loans (1)		305			4,626		860			5,830
Total charge-offs		385			7,904		2,670			17,865
Recoveries:
Commercial loans		575			2,006		1,401			3,720
Construction loans		47			548		143			7,871
Real estate loans (1)		5,489			343		6,195			903
Total recoveries		6,111			2,897		7,739			12,494
Net (recoveries)/charge-offs	$	(5,726	)	$	5,007	$	(5,069	)	$	5,371

(1) Real estate loans include commercial mortgage loans, residential mortgage loans, and equity lines.

Non-Interest Income

Non-interest income, which includes revenues from depository service fees, letters of credit commissions, securities gains (losses), wire transfer fees, and other sources of fee income, was $13.0 million for the third quarter of 2017, an increase of $4.2 million, or 47.1%, compared to $8.8 million for the third quarter of 2016. The increase was primarily due to the gain of $5.4 million on the acquisition of SinoPac Bancorp and was offset by a decrease in securities gains of $1.7 million from the quarter a year ago.

Non-Interest Expense

Non-interest expense increased $10.5 million, or 20.7%, to $61.2 million in the third quarter of 2017 compared to $50.7 million in the same quarter a year ago. The increase in non-interest expense in the third quarter of 2017 was primarily due to a $5.0 million increase in salary and employee benefit expenses and a $3.3 million increase in acquisition related expense when compared to the same quarter a year ago. Acquisition related expenses during the third quarter totaled approximately, $3.3 million, including $2.8 million in legal and investment banking fees and $0.5 million in severance and retention expenses. The efficiency ratio was 41.9% in the third quarter of 2017 compared to 45.1% for the same quarter a year ago.

Income Taxes

The effective tax rate for the third quarter of 2017 was 41.4% compared to 25.5% for the third quarter of 2016. The third quarter 2017 effective tax rate of 41.4% reflected additional tax expense to increase the full year effective tax rate to 34% compared to the 29% effective tax rate forecasted at June 30, 2017. This adjustment in the third quarter was the result of lower tax credits from the slow deployment of alternative energy investments. Income tax expense for the first quarter of 2017 was also reduced by $2.6 million in benefits from the distribution of restricted stock units and exercises of stock options.

44

Year-to-Date Statement of Operations Review

Net income for the nine months ended September 30, 2017, was $150.1 million, an increase of $23.0 million, or 18.1%, compared to net income of $127.1 million for the same period a year ago. Diluted earnings per share was $1.86 compared to $1.59 per share for the same period a year ago. The net interest margin for the nine months ended September 30, 2017, was 3.63% compared to 3.39% for the same period a year ago.

Return on average stockholders’ equity was 10.46% and return on average assets was 1.39% for the nine months ended September 30, 2017, compared to a return on average stockholders’ equity of 9.66% and a return on average assets of 1.29% for the same period of 2016. The efficiency ratio for the nine months ended September 30, 2017, was 43.71% compared to 51.35% for the same period a year ago.

45

The following table sets forth information concerning average interest-earning assets, average interest-bearing liabilities, and the average yields and rates paid on those assets and liabilities for the nine months ended September 30, 2017, and 2016. Average outstanding amounts included in the table are daily averages.

Interest-Earning Assets and Interest-Bearing Liabilities
	Nine months ended September 30,
	2017								2016
				Interest		Average						Interest		Average
	Average			Income/		Yield/			Average			Income/		Yield/
(Dollars in thousands)	Balance			Expense		Rate (1)(2)			Balance			Expense		Rate (1)(2)
Interest earning assets:
Total loans and leases (1)	$	11,668,814		$	401,129		4.60			10,468,328			349,212		4.46
Investment securities		1,297,789			14,817		1.53			1,384,019			16,974		1.64
Federal Home Loan Bank and FRB stock		22,345			1,317		7.88			17,256			1,122		8.69
Interest bearing deposits		359,580			3,140		1.17			272,690			1,094		0.54
Federal funds sold and securities purchased under agreements to resell		12,033			108		1.20			-			-		-
Total interest-earning assets		13,360,561			420,511		4.21			12,142,293			368,402		4.05
Non-interest earning assets:
Cash and due from banks		235,097								215,415
Other non-earning assets		965,906								891,974
Total non-interest earning assets		1,201,003								1,107,389
Less:  Allowance for loan losses		(113,299	)							(133,232	)
Deferred loan fees		(4,531	)							(7,225	)
Total assets	$	14,443,734							$	13,109,225
Interest bearing liabilities:
Interest bearing demand accounts	$	1,282,904		$	1,639		0.17		$	1,013,129		$	1,256		0.17
Money market accounts		2,359,871			11,362		0.64			2,020,725			9,768		0.65
Savings accounts		817,540			1,244		0.20			626,200			759		0.16
Time deposits		4,840,293			33,429		0.92			4,752,938			32,177		0.90
Total interest-bearing deposits		9,300,608			47,674		0.69			8,412,992			43,960		0.70
Securities sold under agreements to repurchase		149,267			3,489		3.13			392,701			11,696		3.98
Other borrowings		177,372			2,366		1.78			119,348			442		0.49
Long-term debt		119,136			4,320		4.85			119,136			4,336		4.86
Total interest-bearing liabilities		9,746,383			57,849		0.79			9,044,177			60,434		0.89
Non-interest bearing liabilities:
Demand deposits		2,542,754								2,131,742
Other liabilities		236,332								175,714
Total equity		1,918,265								1,757,592
Total liabilities and equity	$	14,443,734							$	13,109,225
Net interest spread							3.42	%							3.16	%
Net interest income				$	362,662							$	307,968
Net interest margin							3.63	%							3.39	%

(1) Yields and amounts of interest earned include loan fees. Non-accrual loans are included in the average balance.

(2) Calculated by dividing net interest income by average outstanding interest-earning assets.

46

The following table summarizes the changes in interest income and interest expense attributable to changes in volume and changes in interest rates:

Taxable-Equivalent Net Interest Income — Changes Due to Volumn and Rate(1)
	Nine months ended September 30,
	2017-2016
	Increase (Decrease) in
	Net Interest Income Due to:
(Dollars in thousands)	Changes in Volume			Changes in Rate			Total Change
Interest-earning assets:
Loans and leases	$	40,745		$	11,172		$	51,917
Investment securities		(1,030	)		(1,127	)		(2,157	)
Federal Home Loan Bank and FRB stock		307			(112	)		195
Deposits with other banks		435			1,611			2,046
Federal funds sold and securities purchased under agreements to resell		108			-			108
Total changes in interest income		40,565			11,544			52,109
Interest-bearing liabilities:
Interest bearing demand accounts		343			40			383
Money market accounts		1,624			(30	)		1,594
Savings accounts		264			221			485
Time deposits		583			669			1,252
Securities sold under agreements to repurchase		(6,097	)		(2,110	)		(8,207	)
Other borrowed funds		303			1,621			1,924
Long-term debt		-			(16	)		(16	)
Total changes in interest expense		(2,980	)		395			(2,585	)
Changes in net interest income	$	43,545		$	11,149		$	54,694

(1) Changes in interest income and interest expense attributable to changes in both volume and rate have been allocated proportionately to changes due to volume and changes due to rate. 

Balance Sheet Review

Assets

Total assets were $15.7 billion as of September 30, 2017, an increase of $1.2 billion, or 8.3%, from $14.5 billion as of December 31, 2016, primarily due to the acquisition of SinoPac Bancorp which had total assets of $1.2 billion.

Investment Securities

Investment securities represented 8.7% of total assets as of September 30, 2017, compared to 9.1% of total assets as of December 31, 2016. The carrying value of investment securities as of September 30, 2017, was $1.4 billion compared to $1.3 billion as of December 31, 2016. Securities available-for-sale are carried at fair value and had a net unrealized gain, net of tax, of $2.0 million as of September 30, 2017, compared to a net unrealized loss, net of tax, of $1.5 million as of December 31, 2016.

47

The following tables reflect the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of investment securities as of September 30, 2017, and December 31, 2016:

	September 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	399,741	$	-	$	305	$	399,436
U.S. government agency entities		9,679		27		6		9,700
U.S. government sponsored entities		400,000		-		6,278		393,722
State and municipal securities		1,943				12		1,931
Mortgage-backed securities		447,959		468		2,362		446,065
Collateralized mortgage obligations		1,715		-		5		1,710
Corporate debt securities		80,007		904		5		80,906
Mutual funds		6,500		-		229		6,271
Preferred stock of government sponsored entities		4,117		3,970		-		8,087
Other equity securities		13,294		7,463		98		20,659
Total	$	1,364,955	$	12,832	$	9,300	$	1,368,487

	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	489,839	$	35	$	857	$	489,017
U.S. government sponsored entities		400,000		-		9,669		390,331
Mortgage-backed securities		339,241		309		3,290		336,260
Collateralized mortgage obligations		48		-		20		28
Corporate debt securities		74,965		247		862		74,350
Mutual funds		6,500		-		270		6,230
Preferred stock of government sponsored entities		2,811		4,497		-		7,308
Other equity securities		3,608		7,213		-		10,821
Total	$	1,317,012	$	12,301	$	14,968	$	1,314,345

For additional information, see Note 7 to the Company’s unaudited condensed consolidated financial statements.

Investment securities having a carrying value of $291.4 million as of September 30, 2017, and $649.1 million as of December 31, 2016, were pledged to secure public deposits, other borrowings, treasury tax and loan and securities sold under agreements to repurchase. 

48

Loans

Gross loans, excluding loans held for sale, were $12.6 billion at September 30, 2017, an increase of $1.4 billion, or 12.5%, from $11.2 billion at December 31, 2016. The increase was primarily due to increases of $591.8 million, or 10.2%, in commercial mortgage loans, $478.5 million, or 19.6%, in residential mortgage loans, $171.7 million, or 7.6%, in commercial loans, and $143.4 million, or 26.2%, in real estate construction loans. The loan balances and composition at September 30, 2017, compared to December 31, 2016, and to September 30, 2016, are presented below:

	September 30, 2017			% of Gross Loans			December 31, 2016			% of Gross Loans			% Change
Type of Loans	(Dollars in thousands)
Commercial loans	$	2,419,891			19.2	%	$	2,248,187			20.1	%		7.6	%
Residential mortgage loans		2,922,537			23.3			2,444,048			21.8			19.6
Commercial mortgage loans		6,377,047			50.6			5,785,248			51.7			10.2
Equity lines		181,751			1.4			171,711			1.5			5.8
Real estate construction loans		691,486			5.5			548,088			4.9			26.2
Installment and other loans		4,722			0.0			3,993			0.0			18.3
Gross loans	$	12,597,434			100	%	$	11,201,275			100	%		12.5	%
Allowance for loan losses		(121,535	)					(118,966	)					2.2
Unamortized deferred loan fees		(3,424	)					(4,994	)					(31.4	)
Total loans, net	$	12,472,475					$	11,077,315						12.6	%
Loans held for sale	$	-					$	7,500						(100.0	%)

Non-performing Assets

Non-performing assets include loans past due 90 days or more and still accruing interest, non-accrual loans, and other real estate owned (“OREO”). The Company’s policy is to place loans on non-accrual status if interest and/or principal is past due 90 days or more, or in cases where management deems the full collection of principal and interest unlikely. After a loan is placed on non-accrual status, any previously accrued but unpaid interest is reversed and charged against current income and subsequent payments received are generally first applied towards the outstanding principal balance of the loan. Depending on the circumstances, management may elect to continue the accrual of interest on certain past due loans if partial payment is received and/or the loan is well collateralized and in the process of collection. The loan is generally returned to accrual status when the borrower has brought the past due principal and interest payments current and, in the opinion of management, the borrower has demonstrated the ability to make future payments of principal and interest as scheduled.

Management reviews the loan portfolio regularly for problem loans. During the ordinary course of business, management becomes aware of borrowers that may not be able to meet the contractual requirements of the loan agreements. Such loans are placed under closer supervision with consideration given to placing the loans on non-accrual status, the need for an additional allowance for loan losses, and (if appropriate) partial or full charge-off.

The ratio of non-performing assets, excluding non-accrual loans held for sale, to total assets was 0.6% at September 30, 2017, compared to 0.5% at December 31, 2016. Total non-performing assets increased $17.6 million, or 25.2%, to $87.4 million at September 30, 2017, compared to $69.8 million at December 31, 2016, primarily due to an increase of $15.7 million, or 31.6%, in non-accrual loans offset by a decrease of $2.0 million, or 9.7%, in other real estate owned.

As a percentage of gross loans, excluding loans held for sale, plus OREO, our non-performing assets was 0.69% as of September 30, 2017, compared to 0.62% as of December 31, 2016. The non-performing portfolio loan coverage ratio, defined as the allowance for credit losses to non-performing loans, decreased to 181.6% as of September 30, 2017, from 245.9% as of December 31, 2016.

49

The following table presents the changes in non-performing assets and troubled debt restructurings (“TDRs”) as of September 30, 2017, compared to December 31, 2016, and to September 30, 2016:

(Dollars in thousands)	September 30, 2017			December 31, 2016			% Change			September 30, 2016			% Change
Non-performing assets
Accruing loans past due 90 days or more	$	3,900		$	-			100		$	-			100
Non-accrual loans:
Construction loans		14,267			5,458			161			5,507			159
Commercial mortgage loans		28,379			20,078			41			21,077			35
Commercial loans		15,942			15,710			1			9,251			72
Residential mortgage loans		6,763			8,436			(20	)		8,524			(21	)
Total non-accrual loans:	$	65,351		$	49,682			32		$	44,359			47
Total non-performing loans		69,251			49,682			39			44,359			56
Other real estate owned		18,115			20,070			(10	)		20,986			(14	)
Total non-performing assets	$	87,366		$	69,752			25		$	65,345			34
Accruing troubled debt restructurings	$	62,358		$	65,393			(5	)	$	86,555			(28	)
Non-accrual loans held for sale	$	-		$	7,500			(100	)	$	4,750			(100	)
Allowance for loan losses	$	121,535		$	118,966			2		$	117,942			3
Total gross loans outstanding, at period-end (1)	$	12,597,434		$	11,201,275			12		$	11,010,457			14
Allowance for loan losses to non-performing loans, at period-end (2)		175.50	%		239.45	%					265.88	%
Allowance for loan losses to gross loans, at period-end (1)		0.96	%		1.06	%					1.07	%

(1) Excludes loans held for sale at period-end.

(2) Excludes non-accrual loans held for sale at period-end.

Non-accrual Loans

At September 30, 2017, total non-accrual loans were $65.4 million, an increase of $15.7 million, or 31.6%, resulting from several construction and commercial real estate loans placed on nonaccrual, from $49.7 million at December 31, 2016, and an increase of $21.0 million, or 47.3%, from $44.4 million at September 30, 2016. The allowance for the collateral-dependent loans is calculated based on the difference between the outstanding loan balance and the value of the collateral as determined by recent appraisals, sales contracts, or other available market price information. The allowance for collateral-dependent loans varies from loan to loan based on the collateral coverage of the loan at the time of designation as non-performing. We continue to monitor the collateral coverage of these loans, based on recent appraisals, on a quarterly basis and adjust the allowance accordingly. Non-accrual loans also include those TDRs that do not qualify for accrual status.

50

The following tables present the type of properties securing the non-accrual portfolio loans and the type of businesses the borrowers engaged in as of the dates indicated:

	September 30, 2017				December 31, 2016
	Real				Real
	Estate (1)		Commercial		Estate (1)		Commercial
	(In thousands)
Type of Collateral
Single/multi-family residence	$	23,780	$	7,742	$	9,368	$	218
Commercial real estate		25,591		-		24,321		-
Land		-		-		283		-
Personal property (UCC)		-		8,200		-		15,492
Total	$	49,371	$	15,942	$	33,972	$	15,710

(1) Real estate includes commercial mortgage loans, real estate construction loans, residential mortgage loans and equity lines.

	September 30, 2017				December 31, 2016
	Real				Real
	Estate (1)		Commercial		Estate (1)		Commercial
	(In thousands)
Type of Business
Real estate development	$	31,890	$	20	$	13,804	$	-
Wholesale/Retail		10,807		7,924		12,312		9,213
Food/Restaurant		140		-		153		-
Import/Export		-		7,998		-		6,174
Other		6,534		-		7,703		323
Total	$	49,371	$	15,942	$	33,972	$	15,710

(1) Real estate includes commercial mortgage loans, real estate construction loans, residential mortgage loans and equity lines. 

Impaired Loans

A loan is considered impaired when it is probable that a creditor will be unable to collect all amounts due according to the contractual terms of the loan agreement based on current circumstances and events. The assessment for impairment occurs when and while such loans are on non-accrual as a result of delinquency status of over 90 days or receipt of information indicating that full collection of principal is doubtful, or when the loan has been restructured in a troubled debt restructuring (TDRs). Those loans with a balance less than our defined selection criteria, generally a loan amount less than $500,000, are treated as a homogeneous portfolio. If loans meeting the defined criteria are not collateral dependent, we measure the impairment based on the present value of the expected future cash flows discounted at the loan’s effective interest rate. If loans meeting the defined criteria are collateral dependent, we measure the impairment by using the loan’s observable market price or the fair value of the collateral. We obtain an appraisal to determine the amount of impairment at the date that the loan becomes impaired. The appraisals are based on “as is” or bulk sale valuations. To ensure that appraised values remain current, we generally obtain an updated appraisal every twelve months from qualified independent appraisers. If the fair value of the collateral, less cost to sell, is less than the recorded amount of the loan, we then recognize impairment by creating or adjusting an existing valuation allowance with a corresponding charge to the provision for loan losses. If an impaired loan is expected to be collected through liquidation of the collateral, the amount of impairment, excluding disposal costs, which range between 3% to 6% of the fair value, depending on the size of the impaired loan, is charged off against the allowance for loan losses. Non-accrual impaired loans, including TDRs, are not returned to accrual status unless the unpaid interest has been brought current and full repayment of the recorded balance is expected or if the borrower has made six consecutive monthly payments of the scheduled amounts due, and TDRs are reviewed for continued impairment until they are no longer reported as TDRs.

51

As of September 30, 2017, recorded investment in impaired loans totaled $127.7 million and was comprised of non-accrual loans, excluding loans held for sale, of $65.3 million and accruing troubled debt restructured loans (TDRs) of $62.4 million. As of December 31, 2016, recorded investment in impaired loans totaled $115.1 million and was comprised of non-accrual loans, excluding loans held for sale, of $49.7 million and accruing TDRs of $65.4 million. For impaired loans, the amounts previously charged off represent 7.1% as of September 30, 2017, and 8.4% as of December 31, 2016, of the contractual balances for impaired loans. As of September 30, 2017, $49.4 million, or 75.7%, of the $65.3 million of non-accrual loans, excluding loans held for sale, was secured by real estate compared to $34.0 million, or 68.4%, of the $49.7 million of non-accrual loans, excluding loans held for sale, that was secured by real estate as of December 31, 2016. The Bank obtains current appraisals, sales contracts, or other available market price information which provide updated factors in evaluating potential loss.

As of September 30, 2017, $2.1 million of the $121.5 million allowance for loan losses was allocated for impaired loans and $119.4 million was allocated to the general allowance. As of December 31, 2016, $2.8 million of the $119.0 million allowance for loan losses was allocated for impaired loans and $116.2 million was allocated to the general allowance.

The allowance for loan losses to non-accrual loans was 186.0% as of September 30, 2017, from 239.5% as of December 31, 2016, primarily due to an increase in the non-accrual loans. Non-accrual loans also include those TDRs that do not qualify for accrual status.    

52

The following table presents impaired loans and the related allowance as of the dates indicated:

	Impaired Loans
	September 30, 2017						December 31, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance		Unpaid Principal Balance		Recorded Investment		Allowance
	(In thousands)
With no allocated allowance
Commercial loans	$	23,953	$	23,373	$	-	$	24,037	$	23,121	$	-
Real estate construction loans		22,309		21,748		-		5,776		5,458		-
Commercial mortgage loans		39,154		32,370		-		60,522		54,453		-
Residential mortgage loans and equity lines		2,264		2,264		-		5,472		5,310		-
Subtotal	$	87,680	$	79,755	$	-	$	95,807	$	88,342	$	-
With allocated allowance
Commercial loans	$	14,082	$	13,985	$	1,461	$	5,216	$	4,640	$	1,827
Commercial mortgage loans		23,061		22,820		823		10,158		10,017		573
Residential mortgage loans and equity lines		12,461		11,111		322		13,263		12,075		396
Subtotal	$	49,604	$	47,916	$	2,606	$	28,637	$	26,732	$	2,796
Total impaired loans	$	137,284	$	127,671	$	2,606	$	124,444	$	115,074	$	2,796

Loan Interest Reserves

In accordance with customary banking practice, we originate construction loans and land development loans where interest on the loan is disbursed from pre-established interest reserves included in the total original loan commitment. Our construction loans and land development loans generally include optional renewal terms after the maturity of the initial loan term. New appraisals are obtained prior to extension or renewal of these loans in part to determine the appropriate interest reserve to be established for the new loan term. Loans with interest reserves are underwritten to the same criteria, including loan to value and, if applicable, pro forma debt service coverage ratios, as loans without interest reserves. Construction loans with interest reserves are monitored on a periodic basis to gauge progress towards completion. Interest reserves are frozen if it is determined that additional draws would result in a loan to value ratio that exceeds policy maximums based on collateral property type. Our policy limits in this regard are consistent with supervisory limits and range from 65% in the case of land to 85% in the case of one to four family residential construction projects.

As of September 30, 2017, construction loans of $515.4 million were disbursed with pre-established interest reserves of $61.8 million compared to $500.2 million of such loans disbursed with pre-established interest reserves of $58.9 million at December 31, 2016.  The balance for construction loans with interest reserves which have been extended was $81.3 million with pre-established interest reserves of $1.8 million at September 30, 2017, compared to $113.1 million with pre-established interest reserves of $2.1 million at December 31, 2016.  Land loans of $23.2 million were disbursed with pre-established interest reserves of $680,000 at September 30, 2017, compared to $51.3 million land loans disbursed with pre-established interest reserves of $1.0 million at December 31, 2016.  The balance for land loans with interest reserves which have been extended was $5.9 million at September 30, 2017 with pre-established interest reserves of $360,000 compared to $2.0 million in land loans with pre-established interest reserves of $40,000 at December 31, 2016. 

53

At September 30, 2017 and December 31, 2016, the Bank had no loans on non-accrual status with available interest reserves.  At September 30, 2017, $14.3 million of non-accrual non-residential construction loans, and $8.0 million land loans had been originated with pre-established interest reserves.  At December 31, 2016, $5.5 million of non-accrual non-residential construction loans, and $7.8 million of non-accrual land loans had been originated with pre-established interest reserves.    While we typically expect loans with interest reserves to be repaid in full according to the original contractual terms, some loans require one or more extensions beyond the original maturity before full repayment.  Typically, these extensions are required due to construction delays, delays in the sale or lease of property, or some combination of these two factors.

Loan Concentration

Most of the Company’s business activities are with customers located in the predominantly Asian-populated areas of Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; Las Vegas, Nevada, and Hong Kong. The Company has no specific industry concentration, and generally its loans are collateralized with real property or other pledged collateral of the borrowers. The Company generally expects loans to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the collateral. There were no loan concentrations to multiple borrowers in similar activities that exceeded 10% of total loans as of September 30, 2017, or as of December 31, 2016.

The federal banking regulatory agencies issued final guidance on December 6, 2006, regarding risk management practices for financial institutions with high or increasing concentrations of commercial real estate (“CRE”) loans on their balance sheets. The regulatory guidance reiterates the need for sound internal risk management practices for those institutions that have experienced rapid growth in CRE lending, have notable exposure to specific types of CRE, or are approaching or exceeding the supervisory criteria used to evaluate the CRE concentration risk, but the guidance is not to be construed as a limit for CRE exposure. The supervisory criteria are: (1) total reported loans for construction, land development, and other land represent 100% of the institution’s total risk-based capital, and (2) total CRE loans represent 300% or more of the institution’s total risk-based capital and the institution’s CRE loan portfolio has increased 50% or more within the last thirty-six months. Total loans for construction, land development, and other land represented 40.7% of the Bank’s total risk-based capital as of September 30, 2017, and 40.4% as of December 31, 2016. Total CRE loans represented 305% of total risk-based capital as of September 30, 2017, and 300% as of December 31, 2016 and were below the Bank’s internal limit for CRE loans of 400% of total capital at both dates.

Allowance for Credit Losses

The Bank maintains the allowance for credit losses at a level that the Bank considers appropriate to absorb the estimated and known risks in the loan portfolio and off-balance sheet unfunded credit commitments. Allowance for credit losses is comprised of the allowance for loan losses and the reserve for off-balance sheet unfunded credit commitments. With this risk management objective, the Bank’s management has an established monitoring system that is designed to identify impaired and potential problem loans, and to permit periodic evaluation of impairment and the appropriate level of the allowance for credit losses in a timely manner.

54

In addition, the Bank’s Board of Directors has established a written credit policy that includes a credit review and control system that the Board of Directors believes should be effective in ensuring that the Bank maintains an appropriate allowance for credit losses. The Board of Directors provides oversight for the allowance evaluation process, including quarterly evaluations, and determines whether the allowance is appropriate to absorb losses in the credit portfolio. The determination of the amount of the allowance for credit losses and the provision for credit losses are based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for credit losses. The nature of the process by which the Bank determines the appropriate allowance for credit losses requires the exercise of considerable judgment. Additions to the allowance for credit losses are made by charges to the provision for credit losses. While management utilizes its best judgment based on the information available, the ultimate appropriateness of the allowance is dependent upon a variety of factors beyond the Bank’s control, including the performance of the Bank’s loan portfolio, the economy, changes in interest rates, and the view of the regulatory authorities toward loan classifications. Identified credit exposures that are determined to be uncollectible are charged against the allowance for credit losses. Recoveries of previously charged off amounts, if any, are credited to the allowance for credit losses. A weakening of the economy or other factors that adversely affect asset quality could result in an increase in the number of delinquencies, bankruptcies, or defaults, and a higher level of non-performing assets, net charge-offs, and provision for credit losses in future periods.

55

The allowance for loan losses was $121.5 million and the allowance for off-balance sheet unfunded credit commitments was $4.3 million at September 30, 2017, which represented the amount believed by management to be appropriate to absorb credit losses inherent in the loan portfolio, including unfunded commitments. The $121.5 million allowance for loan losses at September 30, 2017, increased $2.5 million, or 2.1%, from $119.0 million at December 31, 2016. The allowance for loan losses represented 0.96% of period-end gross loans, excluding loans held for sale, and 175.5% of non-performing loans at September 30, 2017. The comparable ratios were 1.06% of period-end gross loans, excluding loans held for sale, and 239.5% of non-performing loans at December 31, 2016. The following table sets forth information relating to the allowance for loan losses, charge-offs, recoveries, and the reserve for off-balance sheet credit commitments for the periods indicated:

	Three months ended September 30,						Nine months ended September 30,
	2017			2016			2017			2016
Allowance for loan losses	(Dollars in thousands)
Balance at beginning of period	$	115,809		$	122,948		$	118,966		$	138,963
Reversal for credit losses		-			-			(2,500	)		(15,650	)
Charge-offs :
Commercial loans		(80	)		(3,278	)		(1,810	)		(12,036	)
Real estate loans		(305	)		(4,625	)		(860	)		(5,829	)
Total charge-offs		(385	)		(7,903	)		(2,670	)		(17,865	)
Recoveries:
Commercial loans		575			2,006			1,401			3,720
Construction loans		47			548			143			7,871
Real estate loans		5,489			343			6,195			903
Total recoveries		6,111			2,897			7,739			12,494
Balance at end of period	$	121,535		$	117,942		$	121,535		$	117,942
Reserve for off-balance sheet credit commitments
Balance at beginning of period	$	4,513		$	2,124		$	3,224		$	1,494
Provision for credit losses		(259	)		100			1,030			730
Balance at end of period	$	4,254		$	2,224		$	4,254		$	2,224
Average loans outstanding during the period (1)	$	12,317,721		$	10,668,341		$	11,668,814		$	10,466,764
Total gross loans outstanding, at period-end (1)	$	12,597,434		$	11,010,457		$	12,597,434		$	11,010,457
Total non-performing loans, at period-end (2)	$	69,251		$	44,359		$	69,251		$	44,359
Ratio of net charge-offs/(recoveries) to average loans outstanding during the period (1)		(0.18%	)		0.19	%		(0.06%	)		0.07	%
Provision for credit losses to average loans outstanding during the period (1)		(0.01%	)		0.00	%		(0.02%	)		(0.19%	)
Allowance for credit losses to non-performing loans, at period-end (2)		181.64	%		270.89	%		181.64	%		270.89	%
Allowance for credit losses to gross loans, at period-end (1)		1.00	%		1.09	%		1.00	%		1.09	%

(1) Excluding loans held for sale.

(2) Excluding non-accrual loans held for sale.

Our allowance for loan losses consists of the following:

 •  Specific allowance: For impaired loans, we provide specific allowances for loans that are not collateral dependent based on an evaluation of the present value of the expected future cash flows discounted at the loan’s effective interest rate and for loans that are collateral dependent based on the fair value of the underlying collateral determined by the most recent valuation information received, which may be adjusted based on factors such as changes in market conditions from the time of valuation. If the measure of the impaired loan is less than the recorded investment in the loan, the deficiency will be charged off against the allowance for loan losses or, alternatively, a specific allocation will be established.

• General allowance: The unclassified portfolio is segmented on a group basis. Segmentation is determined by loan type and common risk characteristics. The non-impaired loans are grouped into 19 segments: two commercial segments, ten commercial real estate segments, one residential construction segment, one non-residential construction segment, one SBA segment, one installment loans segment, one residential mortgage segment, one equity lines of credit segment, and one overdrafts segment. The allowance is provided for each segmented group based on the group’s historical loan loss experience aggregated based on loan risk classifications which take into account the current financial condition of the borrowers and guarantors, the prevailing value of the underlying collateral if collateral dependent, charge-off history, management’s knowledge of the portfolio, general economic conditions, environmental factors including the trends in delinquency and non-accrual, and other significant factors, such as the national and local economy, volume and composition of the portfolio, strength of management and loan staff, underwriting standards, and concentration of credit. In addition, management reviews reports on past-due loans to ensure appropriate classification.

56

The table set forth below reflects management’s allocation of the allowance for loan losses by loan category and the ratio of each loan category to the average gross loans as of the dates indicated:

	September 30, 2017					December 31, 2016
			Percentage of					Percentage of
			Loans in Each					Loans in Each
			Category					Category
			to Average					to Average
	Amount		Gross Loans			Amount		Gross Loans
Type of Loan:	(Dollars in thousands)
Commercial loans	$	51,039		19.1	%	$	49,203		21.1	%
Residential mortgage loans (1)		11,062		24.3			11,620		22.0
Commercial mortgage loans		37,402		51.5			34,864		52.2
Real estate construction loans		22,008		5.0			23,268		4.7
Installment and other loans		24		0.0			11		0.0
Total	$	121,535		100	%	$	118,966		100	%

(1) Residential mortgage loans includes equity lines.

The allowance allocated to commercial loans increased $1.8 million, or 3.7%, to $51.0 million at September 30, 2017, from $49.2 million at December 31, 2016. The increase is due primarily to commercial loan growth.

The allowance allocated for residential mortgage loans decreased $0.5 million, or 4.3%, to $11.1 million at as of September 30, 2017, from $11.6 million at December 31, 2016 as a result of the decrease in the amount of general allowance determined to be required for residential mortgage loans. .

The allowance allocated to commercial mortgage loans increased $2.5 million, or 7.2%, to $37.4 million at September 30, 2017, from $34.9 million at December 31, 2016 as a result of the increase in the amount of general allowance determined to be required for commercial mortgage loans.

The allowance allocated to real estate construction loans decreased $1.3 million, or 5.6%, to $22.0 million at September 30, 2017 from $23.3 million at December 31, 2016. The decrease is due primarily to the decrease in the amount of specific reserves and general allowance determined to be required for construction loans.

57

Deposits

Total deposits were $12.6 billion at September 30, 2017, an increase of $887 million, or 7.6%, from $11.7 billion at December 31, 2016. The following table displays the deposit mix as of the dates indicated:

	September 30, 2017					December 31, 2016
	Amount		Percentage			Amount		Percentage
Deposits	(Dollars in thousands)
Non-interest-bearing demand deposits	$	2,730,006		21.7	%	$	2,478,107		21.2	%
Interest bearing demand deposits		1,379,100		11.0			1,230,445		10.6
Money market deposits		2,370,724		18.9			2,198,938		18.8
Savings deposits		925,312		7.4			719,949		6.2
Time deposits		5,156,553		41.0			5,047,287		43.2
Total deposits	$	12,561,695		100.0	%	$	11,674,726		100.0	%

The following table shows the maturity distribution of time deposits as of September 30, 2017:

	Time Deposits -under $100,000			Time Deposits - $100,000 and over			Total Time Deposits
	(In thousands)
Less than three months	$	320,157		$	921,819		$	1,241,976
Three to six months		320,580			836,506			1,157,086
Six to twelve months		371,407			1,704,311			2,075,718
Over one year		224,168			457,605			681,773
Total	$	1,236,312		$	3,920,241		$	5,156,553
Percent of total deposits		9.8	%		31.2	%		41.0	%

Borrowings

Borrowings include federal funds purchased, securities sold under agreements to repurchase, funds obtained as advances from the Federal Home Loan Bank (“FHLB”) of San Francisco, and borrowings from other financial institutions.

Securities Sold Under Agreements to Repurchase. Securities sold under agreements to repurchase were $100 million with a weighted average rate of 2.86% as of September 30, 2017, compared to $350 million with a weighted average rate of 4.06% as of December 31, 2016. Final maturity for the two fixed rate non-callable securities sold under agreements to repurchase was $50.0 million in June 2018 and $50.0 million in July 2018.

These transactions are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The Company may have to provide additional collateral for the repurchase agreements, as necessary. The underlying collateral pledged for the repurchase agreements consists of U.S. Treasury securities and mortgage-backed securities with a fair value of $109 million as of September 30, 2017, and $372 million as of December 31, 2016.

Borrowing from the FHLB. As of September 30, 2017, over-night borrowings from the FHLB were $450 million at a rate of 1.16% compared to $275 million at a rate of 0.55% as of December 31, 2016. As of September 30, 2017, the advances from the FHLB were $145 million at a rate of 1.35%. As of September 30, 2017, FHLB advances of $490 million will mature in October 2017, $55 million in 2018 and $50 million in December 2019.

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Long-term Debt

Long-term debt was $255.2 million as of September 30, 2017, and December 31, 2016. Long-term debt is comprised of a $119.1 million Junior Subordinated Notes, which qualify as Tier I capital for regulatory purposes, issued in connection with our various pooled trust preferred securities offerings, and $136.1 million of deferred payments to Bank SinoPac.

Off-Balance-Sheet Arrangements and Contractual Obligations

The following table summarizes the Company’s contractual obligations to make future payments as of September 30, 2017. Payments for deposits and borrowings do not include interest. Payments related to leases are based on actual payments specified in the underlying contracts.

	Payment Due by Period
			More than		3 years or
			1 year but		more but
	1 year		less than		less than		5 years
	or less		3 years		5 years		or more		Total
	(In thousands)
Contractual obligations:
Deposits with stated maturity dates	$	4,474,779	$	680,903	$	860	$	11	$	5,156,553
Non-callable securities sold under agreements to repurchase		100,000		-		-		-		100,000
Advances from the Federal Home Loan Bank		540,000		55,000		-		-		595,000
Other borrowings		-		-		-		17,518		17,518
Long-term debt		-		-		-		119,136		119,136
Deferred payments from acquisition		-		-		136,056		-		136,056
Operating leases		9,820		12,853		8,791		8,052		39,516
Total contractual obligations and other commitments	$	5,124,599	$	748,756	$	145,707	$	144,717	$	6,163,779

In the normal course of business, we enter into various transactions, which, in accordance with U.S. generally accepted accounting principles, are not included in our condensed consolidated balance sheets. We enter into these transactions to meet the financing needs of our customers. These transactions include commitments to extend credit and standby letters of credit, which involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized in the condensed consolidated balance sheets.

Loan Commitments. We enter into contractual commitments to extend credit, normally with fixed expiration dates or termination clauses, at specified rates and for specific purposes. Substantially all of our commitments to extend credit are contingent upon customers maintaining specific credit standards at the time of loan funding. We minimize our exposure to loss under these commitments by subjecting them to credit approval and monitoring procedures. Management assesses the credit risk associated with certain commitments to extend credit in determining the level of the allowance for credit losses.

Standby Letters of Credit. Standby letters of credit are written conditional commitments issued by us to secure the obligations of a customer to a third party. In the event the customer does not perform in accordance with the terms of an agreement with the third party, we would be required to fund the commitment. The maximum potential amount of future payments we could be required to make is represented by the contractual amount of the commitment. If the commitment is funded, we would be entitled to seek reimbursement from the customer. Our policies generally require that standby letter of credit arrangements contain security and debt covenants similar to those contained in loan agreements.

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Capital Resources

Total equity was $2.0 billion as of September 30, 2017, an increase of $140.2 million, from $1.8 billion as of December 31, 2016, primarily due to net income of $150.1 million and $34.9 million of common stock issued for the acquisition of SinoPac Bancorp partially offset by common stock cash dividends of $50.5 million and shares withheld related to net share settlement of RSUs of $5.1 million.

The following table summarizes changes in total equity for the nine months ended September 30, 2017:

	Nine months ended
(In thousands)	September 30, 2017
Net income	$	150,102
Stock issued to directors		549
Stock options exercised and RSUs distributed		1,018
Proceeds from shares issued through the Dividend Reinvestment Plan		1,849
Shares withheld related to net share settlement of RSUs		(5,127	)
Share-based compensation		3,900
Other comprehensive income		3,498
Equity consideration for acquisition		34,862
Cash dividends paid to common stockholders		(50,491	)
Net increase in total equity	$	140,160

Capital Adequacy Review

Management seeks to maintain the Company’s capital at a level sufficient to support future growth, protect depositors and stockholders, and comply with various regulatory requirements.

Both Bancorp’s and the Bank’s regulatory capital continued to exceed the regulatory minimum requirements under Basel III rules that became effective January 1, 2015, with transitional provisions as of September 30, 2017. In addition, the capital ratios of the Bank place it in the “well capitalized” category, which is defined as institutions with a common equity tier 1 capital ratio equal to or greater than 6.5%, a Tier 1 risk-based capital ratio equal to or greater than 8%, a total risk-based capital ratio equal to or greater than 10%, and a Tier 1 leverage capital ratio equal to or greater than 5%.

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The following table presents Bancorp’s and the Bank’s capital and leverage ratios as of September 30, 2017, and December 31, 2016:

	Cathay General Bancorp								Cathay Bank
	September 30, 2017				December 31, 2016				September 30, 2017				December 31, 2016
(Dollars in thousands)	Balance		%		Balance		%		Balance		%		Balance		%
Common equity Tier 1 capital (to risk-weighted assets)	$	1,555,919		12.22	$	1,459,351		12.84	$	1,461,917		12.34	$	1,515,096		13.35
Common equity Tier 1 capital minimum requirement		573,075		4.50		511,590		4.50		532,962		4.50		510,582		4.50
Excess	$	981,121		7.68	$	947,761		8.34	$	927,155		7.80	$	1,004,514		8.85
Tier 1 capital (to risk-weighted assets)	$	1,555,919		12.22	$	1,574,806		13.85	$	1,461,917		12.34	$	1,515,096		13.35
Tier 1 capital minimum requirement		764,100		6.00		682,120		6.00		710,616		6.00		680,776		6.00
Excess	$	789,522		6.18	$	892,686		7.85	$	748,901		6.30	$	834,320		7.35
Total capital (to risk-weighted assets)	$	1,802,206		14.15	$	1,702,144		14.97	$	1,587,501		13.40	$	1,637,286		14.43
Total capital minimum requirement		1,018,800		8.00		909,493		8.00		947,487		8.00		907,701		8.00
Excess	$	780,343		6.11	$	792,651		6.97	$	636,814		5.36	$	729,585		6.43
Tier 1 capital (to average assets) – Leverage ratio	$	1,555,919		10.41	$	1,574,806		11.57	$	1,461,917		10.54	$	1,515,096		11.16
Minimum leverage requirement		597,635		4.00		544,614		4.00		554,685		4.00		543,059		4.00
Excess	$	958,284		6.41	$	1,030,192		7.57	$	907,232		6.54	$	972,037		7.16
Risk-weighted assets	$	12,734,995			$	11,368,663			$	11,843,593			$	11,346,260
Total average assets (1)	$	14,940,863			$	13,615,348			$	13,867,125			$	13,576,477

(1) The quarterly total average assets reflect all debt securities at amortized cost, equity securities with readily determinable fair values at the lower of cost or fair value, and equity securities without readily determinable fair values at historical cost.

Dividend Policy

Holders of common stock are entitled to dividends as and when declared by our Board of Directors out of funds legally available for the payment of dividends. Although we have historically paid cash dividends on our common stock, we are not required to do so. The amount of future dividends will depend on our earnings, financial condition, capital requirements and other factors, and will be determined by our Board of Directors. The terms of our Junior Subordinated Notes also limit our ability to pay dividends. Our Board of Directors increased the common stock dividend to $0.21 per share in December 2016. The terms of our Junior Subordinated Notes also limit our ability to pay dividends.

The Company declared a cash dividend of $0.21 per share on 80,795,512 shares outstanding on September 1, 2017, for distribution to holders of our common stock on September 11, 2017, $0.21 per share on 79,847,124 shares outstanding on June 1, 2017, for distribution to holders of our common stock on June 12, 2017, and $0.21 per share on 79,788,541 shares outstanding on March 1, 2017, for distribution to holders of our common stock on March 10, 2017. The Company paid total cash dividends of $50.5 million during the first nine months of 2017.

Country Risk Exposures

The Company’s total assets were $15.7 billion and total foreign country risk net exposures were $454.7 million as of September 30, 2017. Total foreign country risk net exposures as of September 30, 2017, were comprised primarily of $277.3 million from Hong Kong, $45.6 million from China, $30.8 million from Australia, $25.2 million from France, $15.6 million from Singapore, $13.5 million from Germany, $10.0 million from Virgin Island, $9.3 million from England, $7.6 million from Taiwan, $5.1 million from Canada, $5.0 million from Cayman Island, $4.2 million from Macau, $2.2 million from Indonesia, $1.4 million from Switzerland, $1.1 million from Japan, $0.3 million from New Zealand, and $0.3 million from Venezuela. Risk is determined based on location of the borrowers, issuers, and counterparties.

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All foreign country risk net exposures as of September 30, 2017, were to non-sovereign counterparties, except $11.8 million due from the Hong Kong Monetary Authority.

Unfunded loans to foreign entities exposures were $10.7 million as of September 30, 2017, primarily due to $10.0 million of unfunded loans to financial institutions in China and $0.7 million of unfunded loans to borrowers in Canada.

Financial Derivatives

It is the policy of the Company not to speculate on the future direction of interest rates. However, the Company enters into financial derivatives in order to seek mitigation of exposure to interest rate risks related to our interest-earning assets and interest-bearing liabilities. We believe that these transactions, when properly structured and managed, may provide a hedge against inherent interest rate risk in the Company’s assets or liabilities and against risk in specific transactions. In such instances, the Company may enter into interest rate swap contracts or other types of financial derivatives. Prior to considering any hedging activities, we seek to analyze the costs and benefits of the hedge in comparison to other viable alternative strategies. All hedges must be approved by the Bank’s Investment Committee.

The Company follows ASC Topic 815 that establishes accounting and reporting standards for financial derivatives, including certain financial derivatives embedded in other contracts, and hedging activities. It requires the recognition of all financial derivatives as assets or liabilities in the Company’s consolidated balance sheet and measurement of those financial derivatives at fair value. The accounting treatment of changes in fair value is dependent upon whether or not a financial derivative is designated as a hedge and, if so, the type of hedge. Fair value is determined using third-party models with observable market data. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives are reflected in current earnings, together with changes in the fair value of the related hedged item if there is a highly effective correlation between changes in the fair value of the interest rate swaps and changes in the fair value of the underlying asset or liability that is intended to be hedged. If there is not a highly effective correlation between changes in the fair value of the interest rate swap and changes in the fair value of the underlying asset or liability that is intended to be hedged, then only the changes in the fair value of the interest rate swaps are reflected in the Company’s consolidated financial statements.

In May 2014, Bancorp entered into interest rate swap contracts in the notional amount of $119.1 million for a period of ten years. The objective of these interest rate swap contracts, which were designated as hedging instruments in cash flow hedges, was to hedge on Bancorp’s $119.1 million of Junior Subordinated Debentures that had been issued to five trusts, with the quarterly interest payments throughout the ten-year period beginning in June 2014 and ending in June 2024, from the risk of variability of these payments resulting from changes in the three-month LIBOR interest rate. Bancorp pays a weighted average fixed interest rate of 2.61% and receives a variable interest rate of the three-month LIBOR at a weighted average rate of 1.32%. As of September 30, 2017, the notional amount of cash flow interest rate swaps was $119.1 million and their unrealized loss of $2.3 million, net of taxes, was included in other comprehensive income. The amount of periodic net settlement of interest rate swaps included in interest expense was $407,000 for the three months ended September 30, 2017 compared to $588,000 for the same quarter a year ago. For the nine months ended September 30, 2017, the periodic net settlement of interest rate swaps included in interest expense was $1.3 million compared to $1.8 million for the same period in 2016.

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As of September 30, 2017, the Bank has entered into interest rate swap contracts with various terms from four to eight years. These interest rate swap contracts are matched to individual fixed-rate commercial real estate loans in the Bank’s loan portfolio. These contracts have been designated as hedging instruments to hedge the risk of changes in the fair value of the underlying commercial real estate loan due to changes in interest rates. The swap contracts are structured so that the notional amounts reduce over time to match the contractual amortization of the underlying loan and allow prepayments with the same pre-payment penalty amounts as the related loan. The Bank pays a weighted average fixed rate of 4.55% and receives a variable rate at the one month LIBOR rate plus a weighted average spread of 293 basis points, or at a weighted average rate of 4.16%. As of September 30, 2017, the notional amount of fair value interest rate swaps was $510.6 million and their unrealized gain of $1.9 million was included in other non-interest income. The amount of periodic net settlement of interest rate swaps reducing interest income was $514,000 for the three months ended September 30, 2017, compared to $879,000 for the same quarter a year ago. The amount of periodic net settlement of interest rate swaps reducing interest income was $1.9 million for the nine months ended September 30, 2017, compared to $2.8 million for the same period a year ago. As of September 30, 2017, the ineffective portion of these interest rate swaps was not significant.

Interest rate swap contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Institutional counterparties must have a strong credit profile and be approved by the Company’s Board of Directors. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure may be reduced by the amount of collateral pledged by the counterparty. Bancorp’s interest rate swaps have been assigned by the counterparties to a derivatives clearing organization and daily margin is indirectly maintained with the derivatives clearing organization. Cash posted as collateral by Bancorp related to derivative contracts totaled $6.3 million as of September 30, 2017.

The Company enters into foreign exchange forward contracts with various counterparties to mitigate the risk of fluctuations in foreign currency exchange rates for foreign exchange certificates of deposit or foreign exchange contracts entered into with our clients. These contracts are not designated as hedging instruments and are recorded at fair value in our condensed consolidated balance sheets. Changes in the fair value of these contracts as well as the related foreign exchange certificates of deposit and foreign exchange contracts are recognized immediately in net income as a component of non-interest income. Period end gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities. As of September 30, 2017, the notional amount of option contracts totaled $12.3 million with a net negative fair value of $234,000. As of September 30, 2017, spot, forward, and swap contracts with a total notional amount of $69.3 million had a positive fair value of $1.7 million. Spot, forward, and swap contracts with a total notional amount of $86.6 million had a negative fair value of $1.1 million as of September 30, 2017. As of December 31, 2016, the notional amount of option contracts totaled $12.1 million with a net negative fair value of $121,000. As of December 31, 2016, spot, forward, and swap contracts with a total notional amount of $82.4 million had a positive fair value of $1.3 million. Spot, forward, and swap contracts with a total notional amount of $89.5 million had a negative fair value of $3.1 million as of December 31, 2016.

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Liquidity

Liquidity is our ability to maintain sufficient cash flow to meet maturing financial obligations and customer credit needs, and to take advantage of investment opportunities as they are presented in the marketplace. Our principal sources of liquidity are growth in deposits, proceeds from the maturity or sale of securities and other financial instruments, repayments from securities and loans, federal funds purchased, securities sold under agreements to repurchase, and advances from the FHLB. As of September 30, 2017, our average monthly liquidity ratio (defined as net cash plus short-term and marketable securities to net deposits and short-term liabilities) was 14.0% compared to 12.6% as of December 31, 2016.

Before merging on October 27, 2017, the two subsidiary banks of the Company were both shareholders of the FHLB of San Francisco, enabling them to have access to lower cost FHLB financing when necessary. As of September 30, 2017, the two subsidiary banks’ approved credit line with the FHLB totaled $5.5 billion. Advances from the FHLB were $595.0 million and standby letter of credits issued by FHLB on the Company’s behalf were $100.7 million as of September 30, 2017. The Bank expects to be able to continue to access this source of funding, if required, in the near term. The Bank has pledged a portion of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program to secure these borrowings. As of September 30, 2017, the borrowing capacity under the Borrower-in-Custody program was $47.3 million.

Liquidity can also be provided through the sale of liquid assets, which consist of federal funds sold, securities sold under agreements to repurchase, and unpledged investment securities. As of September 30, 2017, investment securities totaled $1.4 billion, with $291.4 million pledged as collateral for borrowings and other commitments. The remaining $1.1 billion was available as additional liquidity or to be pledged as collateral for additional borrowings.

Approximately 87.0% of the Company’s time deposits mature within one year or less as of September 30, 2017. Management anticipates that there may be some outflow of these deposits upon maturity due to, among other factors, the keen competition in the Bank’s marketplace. However, based on our historical run-off experience, we expect that the outflow will be minimal and can be replenished through our normal growth in deposits. Management believes the above-mentioned sources will provide adequate liquidity to the Bank to meet its daily operating needs.

The business activities of Bancorp consist primarily of the operation of the Bank and limited activities in other investments. The Bank paid dividends to Bancorp totaling $113.4 million in 2016 and $208.2 million in the first nine months of 2017.

Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We use a net interest income simulation model to measure the extent of the differences in the behavior of the lending and funding rates to changing interest rates, so as to project future earnings or market values under alternative interest rate scenarios. Interest rate risk arises primarily through the Company’s traditional business activities of extending loans and accepting deposits. Many factors, including economic and financial conditions, movements in interest rates, and consumer preferences affect the spread between interest earned on assets and interest paid on liabilities. The net interest income simulation model is designed to measure the volatility of net interest income and net portfolio value, defined as net present value of assets and liabilities, under immediate rising or falling interest rate scenarios in 100 basis point increments.

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Although the modeling is very helpful in managing interest rate risk, it does require significant assumptions for the projection of loan prepayment rates on mortgage related assets, loan volumes and pricing, and deposit and borrowing volume and pricing, that might prove inaccurate. Because these assumptions are inherently uncertain, the model cannot precisely estimate net interest income, or precisely predict the effect of higher or lower interest rates on net interest income. Actual results will differ from simulated results due to the timing, magnitude, and frequency of interest rate changes, the differences between actual experience and the assumed volume, changes in market conditions, and management strategies, among other factors. The Company monitors its interest rate sensitivity and attempts to reduce the risk of a significant decrease in net interest income caused by a change in interest rates.

We have established a tolerance level in our policy to define and limit net interest income volatility to a change of plus or minus 5% when the hypothetical rate change is plus or minus 200 basis points. When the net interest rate simulation projects that our tolerance level will be met, or exceeded, we seek corrective action after considering, among other things, market conditions, customer reaction, and the estimated impact on profitability. The Company’s simulation model also projects the net economic value of our portfolio of assets and liabilities. We have established a tolerance level in our policy to limit the loss in the net economic value of our portfolio of assets and liabilities to zero when the hypothetical rate change is plus or minus 200 basis points.

The table below shows the estimated impact of changes in interest rates on net interest income and market value of equity as of September 30, 2017:

	Net Interest		Market Value
	Income		of Equity
Change in Interest Rate (Basis Points)	Volatility (1)		Volatility (2)
+200		8.9		3.1
+100		4.5		1.8
-100		-1.9		4.9
-200		-4.7		-0.9

(1)	The percentage change in this column represents net interest income of the Company for 12 months in a stable interest rate environment versus the net interest income in the various rate scenarios.
(2)	The percentage change in this column represents the net portfolio value of the Company in a stable interest rate environment versus the net portfolio value in the various rate scenarios.

Item 4. CONTROLS AND PROCEDURES.

The Company’s principal executive officer and principal financial officer have evaluated the effectiveness of the Company’s “disclosure controls and procedures,” as such term is defined in Rule 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this quarterly report. Based upon their evaluation, the principal executive officer and principal financial officer have concluded that the Company’s disclosure controls and procedures are effective to ensure that information required to be disclosed by the Company in the reports filed or submitted by it under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Company in such reports is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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There has not been any change in our internal control over financial reporting that occurred during the third quarter of 2017 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1.     LEGAL PROCEEDINGS.

Bancorp’s wholly-owned subsidiary, Cathay Bank, is a party to ordinary routine litigation from time to time incidental to various aspects of its operations. Management does not believe that any such litigation is expected to have a material adverse impact on the Company’s consolidated financial condition or results of operations.

Item 1A.     RISK FACTORS.

There is no material change in the risk factors as previously disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016, in response to Item 1A in Part I of Form 10-K.

Item 2.     UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

ISSUER PURCHASES OF EQUITY SECURITIES
Period	(a) Total Number of Shares (or Units) Purchased		(b) Average Price Paid per Share (or Unit)		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs		(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs
Month #1 (July 1, 2017 - July 31, 2017)		0		$0		0		$7,543,008
Month #2 (August 1, 2017 - August 31, 2017)		0		$0		0		$7,543,008
Month #3 (September 1, 2017 - September 30, 2017)		0		$0		0		$7,543,008
Total		0		$0		0		$7,543,008

For a discussion of limitations on the payment of dividends, see “Dividend Policy” and “Liquidity” under Part I—Item 2— “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

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Item 3.     DEFAULTS UPON SENIOR SECURITIES.

Not applicable.

Item 4.     MINE SAFETY DISCLOSURES.

Not applicable.

Item 5.     OTHER INFORMATION.

None.

Item 6.     EXHIBITS.               

Exhibit 31.1 Certification of the Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+

Exhibit 31.2 Certification of the Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.+

Exhibit 32.1 Certification of the Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.++

Exhibit 32.2 Certification of the Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.++

Exhibit 101.INS XBRL Instance Document *

Exhibit 101.SCH XBRL Taxonomy Extension Schema Document*

Exhibit 101.CAL XBRL Taxonomy Extension Calculation Linkbase Document*

Exhibit 101.DEF XBRL Taxonomy Extension Definition Linkbase Document*

Exhibit 101.LAB XBRL Taxonomy Extension Label Linkbase Document*

Exhibit 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document*

____________________

+ Filed herewith.

++ Furnished herewith.

* XBRL (Extensible Business Reporting Language) information shall not be deemed to be filed or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, shall not be deemed to be filed for purposes of section 18 of the Securities Exchange Act of 1934, and otherwise shall not be subject to liability under these sections, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, except as expressly set forth by specific reference in such filing.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Cathay General Bancorp (Registrant)
Date: November 7, 2017
	/s/ Pin Tai
	Pin Tai Chief Executive Officer and President
Date: November 7, 2017
	/s/ Heng W. Chen
	Heng W. Chen Executive Vice President and Chief Financial Officer

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EX-31.1

Exhibit 31.1

I, Pin Tai, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Cathay General Bancorp;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Pin Tai                                                    

Pin Tai

Chief Executive Officer and President

Date: November 7, 2017

EX-31.2

Exhibit 31.2

I, Heng W. Chen, certify that:

1.     I have reviewed this quarterly report on Form 10-Q of Cathay General Bancorp;

2.     Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.     Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.     The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s Board of Directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

/s/ Heng W. Chen                             

Heng W. Chen

Executive Vice President and

Chief Financial Officer

Date: November 7, 2017

EX-32.1

Exhibit 32.1

CEO CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cathay General Bancorp (the “Company”) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Pin Tai, chief executive officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Pin Tai                                              

Pin Tai

Chief Executive Officer and President

Date: November 7, 2017

EX-32.2

Exhibit 32.2

CFO CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Cathay General Bancorp (the “Company”) on Form 10-Q for the period ended September 30, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Heng W. Chen, chief financial officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1)     The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)     The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Heng W. Chen                                 

Heng W. Chen

Executive Vice President and

Chief Financial Officer

Date: November 7, 2017

XML

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Oct. 31, 2017
Document Information [Line Items]
Entity Registrant Name	Cathay General Bancorp
Entity Central Index Key	0000861842
Trading Symbol	caty
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	Yes
Entity Common Stock, Shares Outstanding (in shares)		80,819,967
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	Q3
Amendment Flag	false

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Assets
Cash and due from banks	$ 167,886	$ 218,017
Short-term investments and interest bearing deposits	573,059	967,067
Securities available-for-sale (amortized cost of $1,364,955 in 2017 and $1,317,012 in 2016)	1,368,487	1,314,345
Loans held for sale		7,500
Loans	12,597,434	11,201,275
Less: Allowance for loan losses	(121,535)	(118,966)
Unamortized deferred loan fees, net	(3,424)	(4,994)
Loans, net	12,472,475	11,077,315
Federal Home Loan Bank stock	30,681	17,250
Other real estate owned, net	18,115	20,070
Affordable housing investments and alternative energy partnerships, net	298,426	251,077
Premises and equipment, net	107,954	105,607
Customers’ liability on acceptances	12,009	12,182
Accrued interest receivable	42,190	37,299
Goodwill	372,189	372,189
Other intangible assets, net	9,408	2,949
Other assets	255,538	117,902
Total assets	15,728,417	14,520,769
Deposits
Non-interest-bearing demand deposits	2,730,006	2,478,107
Interest-bearing deposits:
Demand deposits	1,379,100	1,230,445
Money market deposits	2,370,724	2,198,938
Savings deposits	925,312	719,949
Time deposits	5,156,553	5,047,287
Total deposits	12,561,695	11,674,726
Securities sold under agreements to repurchase	100,000	350,000
Advances from the Federal Home Loan Bank	595,000	350,000
Other borrowings of affordable housing investments	17,518	17,662
Long-term debt	119,136	119,136
Deferred payments from acquisition	136,056
Acceptances outstanding	12,009	12,182
Other liabilities	218,304	168,524
Total liabilities	13,759,718	12,692,230
Commitments and contingencies
Stockholders’ Equity
Common stock, $0.01 par value, 100,000,000 shares authorized, 89,027,259 issued and 80,816,616 outstanding at September 30, 2017, and 87,820,920 issued and 79,610,277 outstanding at December 31, 2016	890	878
Additional paid-in-capital	932,521	895,480
Accumulated other comprehensive loss, net	(217)	(3,715)
Retained earnings	1,275,094	1,175,485
Treasury stock, at cost (8,210,643 shares at September 30, 2017, and at December 31, 2016)	(239,589)	(239,589)
Total equity	1,968,699	1,828,539
Total liabilities and equity	$ 15,728,417	$ 14,520,769

XML

Condensed Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Securities available-for-sale, amortized cost	$ 1,364,955	$ 1,317,012
Common stock par value (in dollars per share)	$ 0.01	$ 0.01
Common stock shares authorized (in shares)	100,000,000	100,000,000
Common stock, shares issued (in shares)	89,027,259	87,820,920
Common stock, shares outstanding (in shares)	80,816,616	79,610,277
Treasury stock shares (in shares)	8,210,643	8,210,643

XML

Condensed Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Interest and Dividend Income
Loans receivable, including loan fees	$ 146,383	$ 118,500	$ 401,129	$ 349,212
Investment securities	5,692	4,850	14,817	16,974
Federal Home Loan Bank and FRB stock	607	393	1,317	1,122
Term federal funds sold	108		108
Deposits with banks	1,288	412	3,140	1,094
Total interest and dividend income	154,078	124,155	420,511	368,402
Interest Expense
Time deposits	11,678	10,701	33,429	32,177
Other deposits	5,101	4,212	14,245	11,783
Securities sold under agreements to repurchase	874	3,828	3,489	11,696
Advances from Federal Home Loan Bank	872	134	1,465	442
Long-term debt	1,456	1,456	4,320	4,336
Deferred payments from acquisition	901		901
Total interest expense	20,882	20,331	57,849	60,434
Net interest income before reversal for credit losses	133,196	103,824	362,662	307,968
Reversal for loan losses			(2,500)	(15,650)
Net interest income after reversal for credit losses	133,196	103,824	365,162	323,618
Non-Interest Income
Securities gains/(losses), net	24	1,692	(439)	3,141
Letters of credit commissions	1,302	1,212	3,618	3,698
Depository service fees	1,407	1,401	4,259	4,109
Gain from acquisition	5,440		5,440
Other operating income	4,788	4,506	12,953	14,461
Total non-interest income	12,961	8,811	25,831	25,409
Non-Interest Expense
Salaries and employee benefits	27,913	22,881	79,929	71,313
Occupancy expense	5,312	4,734	14,733	13,587
Computer and equipment expense	2,643	2,337	7,895	7,360
Professional services expense	4,942	4,999	14,541	13,981
Data processing service expense	2,918	2,279	7,846	6,556
FDIC and regulatory assessments	2,552	2,288	7,261	7,640
Marketing expense	2,103	1,516	4,833	3,314
Other real estate owned expense/(income)	369	(176)	747	612
Amortization of investments in low income housing and alternative energy partnerships	5,723	5,432	16,797	35,626
Amortization of core deposit intangibles	281	172	626	517
Acquisition and integration costs	3,277		3,277
Other operating expense	3,215	4,275	11,307	10,681
Total non-interest expense	61,248	50,737	169,792	171,187
Income before income tax expense	84,909	61,898	221,201	177,840
Income tax expense	35,163	15,808	71,099	50,756
Net income	49,746	46,090	150,102	127,084
Other comprehensive income, net of tax
Unrealized holding gain on securities available-for-sale	1,060	938	3,338	15,748
Less: reclassification adjustments for gains/(losses) included in net income	14	981	(254)	1,821
Unrealized holding gain/(loss) on cash flow hedge derivatives	157	804	(94)	(3,598)
Total other comprehensive gain, net of tax	1,203	761	3,498	10,329
Total other comprehensive income	$ 50,949	$ 46,851	$ 153,600	$ 137,413
Net income per common share:
Basic (in dollars per share)	$ 0.62	$ 0.58	$ 1.87	$ 1.61
Diluted (in dollars per share)	0.61	0.58	1.86	1.59
Cash dividends paid per common share (in dollars per share)	$ 0.21	$ 0.18	$ 0.63	$ 0.54
Weighted-average shares:
Basic (in shares)	80,665,398	78,865,860	80,073,249	79,147,839
Diluted weighted-average number of common shares outstanding (in shares)	81,404,854	79,697,069	80,797,179	79,902,846

XML

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Cash Flows from Operating Activities
Net income	$ 150,102,000	$ 127,084,000
Adjustments to reconcile net income to net cash provided by/(used in) operating activities:
Reversal for loan losses	(2,500,000)	(15,650,000)
Provision for losses on other real estate owned	889,000	176,000
Deferred tax liability	10,319,000	22,483,000
Depreciation and amortization	5,416,000	5,684,000
Net gains on sale and transfer of other real estate owned	(394,000)	(476,000)
Net gains on sale of loans		(285,000)
Proceeds from sales of loans	7,500,000	13,525,000
Originations of loans held-for-sale		(12,665,000)
Amortization on alternative energy partnerships, venture capital and other investments	2,778,000	27,282,000
Net loss/(gain) on sales and calls of securities	438,000	(3,347,000)
Amortization/accretion of security premiums/discounts, net	990,000	5,193,000
Loss on sales or disposal of fixed assets		19,000
Write-down on impaired securities		206,000
Stock based compensation and stock issued to officers as compensation	4,449,000	3,804,000
Net change in accrued interest receivable and other assets	(51,776,000)	2,101,000
Gain on acquisition	(5,440,000)
Net change in other liabilities	828,000	(4,537,000)
Net cash provided by operating activities	123,599,000	170,597,000
Cash Flows from Investing Activities
Decrease/(increase) in short-term investments	516,008,000	(254,877,000)
Purchase of investment securities available-for-sale	(450,745,000)	(690,966,000)
Proceeds from sale of investment securities available-for-sale	99,541,000	415,543,000
Proceeds from repayments, maturities and calls of investment securities available-for-sale	389,829,000	585,285,000
Purchase of Federal Home Loan Bank stock		(1,650,000)
Redemptions of Federal Home Loan Bank stock	6,459,000
Net increase in loans	(686,225,000)	(853,453,000)
Purchase of premises and equipment	(976,000)	(3,166,000)
Proceeds from sales of premises and equipment		11,000
Proceeds from sales of other real estate owned	2,186,000	6,713,000
Net increase in investment in affordable housing and alternative energy partnerships	(20,867,000)	(59,844,000)
Acquisition, net of cash acquired	(14,309,000)
Net cash used for investing activities	(159,099,000)	(856,404,000)
Cash Flows from Financing Activities
Net (decrease)/increase in deposits	73,120,000	429,976,000
Net decrease in federal funds purchased and securities sold under agreements to repurchase	(250,000,000)	(50,000,000)
Advances from Federal Home Loan Bank	2,608,000,000	2,730,000,000
Repayment of Federal Home Loan Bank borrowings	(2,393,000,000)	(2,305,000,000)
Cash dividends paid	(50,491,000)	(42,570,000)
Purchases of treasury stock		(54,441,000)
Proceeds from shares issued under Dividend Reinvestment Plan	1,849,000	1,643,000
Proceeds from exercise of stock options	1,018,000	49,000
Taxes paid related to net share settlement of RSUs	(5,127,000)	(103,000)
Net cash (used in) provided by financing activities	(14,631,000)	709,554,000
(Decrease)/increase in cash and cash equivalents	(50,131,000)	23,747,000
Cash and cash equivalents, beginning of the period	218,017,000	180,130,000
Cash and cash equivalents, end of the period	167,886,000	203,877,000
Supplemental disclosure of cash flow information
Interest	58,416,000	61,212,000
Income taxes paid	62,296,000	31,717,000
Non-cash investing and financing activities:
Net change in unrealized holding gain on securities available-for-sale, net of tax	3,592,000	13,927,000
Net change in unrealized holding loss on cash flow hedge derivatives	(94,000)	(3,598,000)
Transfers to other real estate owned from loans held for investment	726,000	2,698,000
Loans transferred from held for sale to held for investment, net		1,351,000
Loans to facilitate the sale of other real estate owned		2,616,000
Issuance of stock related to acquisition

XML

Note 1 - Business

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Nature of Operations [Text Block]

1.

Business

Cathay General Bancorp (

“Bancorp”) is the holding company for Cathay Bank (the “Bank” and, together, with Bancorp, the “Company”),

seven

limited partnerships investing in affordable housing investments in whic

h t

he Bank is the sole limited partner, Asia Realty Corp. and GBC Venture Capital, Inc. Bancorp also owns

100%

of the common stock of

five

statutory business trusts created for the purpose of issuing capital securities. The Bank was founded in

1962

and offers a wide range of financial services. As of

September 30, 2017,

the Bank operates

22

branches in Southern California,

12

branches in Northern California,

12

branches in New York State,

three

branches in Illinois,

three

branches in Washington State,

two

branches in Texas,

one

branch in Massachusetts,

one

branch in New Jersey,

one

branch in Maryland,

one

branch in Nevada,

one

branch in Hong Kong, and a representative office in Shanghai and in Taipei. Deposit accounts at the Hong Kong branch are

not

insured by the Federal Deposit Insurance Corporation (the “FDIC”).

XML

Note 2 - Business Combinations

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Business Combination Disclosure [Text Block]

2

.

Business Combinations

On

July 14, 2017,

the Company completed the acquisition of SinoPac Bancorp, the parent of Far East National Bank (FENB), pursuant to a Stock Purchase Agreement, dated

as of

July 8, 2016,

by and between the Company and Bank SinoPac Co. Ltd. Under the terms of the Stock Purchase Agreement, the Company purchased all of the issued and outstanding share capital of SinoPac Bancorp for an aggregate purchase price of

$351.6

million plus additional post closing payments based on the realization of certain assets of FENB. The Company issued

926,192

shares of common stock as consideration and the remainder of the consideration is payable in cash. Pursuant to the Stock Purchase Agreement, (i)

$100

million of the purchase price was deferred and will be released within

one

year based on the timing of the contemplated merger of FENB into Cathay Bank and (ii)

10%

of the purchase price was held back and will be released over a period of

three

years following the closing of the acquisition, subject to any indemnity claims. Founded in

1974,

FENB offers a wide range of financial services. The acquisition allowed the Company to expand its number of branches in  California. As of

July 14, 2017,

FENB operated

nine

branches in California, and a representative office in Beijing. The acquisition will be accounted for as a business combination, subject to the provisions of ASC

805

-

10

-

50,

Business Combinations.

The assets and liabilities, both tangible and intangible, were recorded at their estimated fair values as of the J

uly

14,

2017

acquisition date. The assets acquired and liabilities assumed have been accounted for under the acquisition method of accounting. We have included the financial results of the business combinations in the condensed consolidated statement of income beginning on the acquisition date. The purchase accounting adjustments are preliminary and subject to finalization during the

one

-year measurement period from the date of the acquisition.

The fair value of the assets and the liabilities acquired as of

July 1

4,

2017

are shown below:

	SinoPac Bancorp
Assets acquired:
Cash and cash equivalents	$	166,932
Short-term investments		122,000
Securities available-for-sale		107,934
Loans		703,787
Premises and equipment		6,198
Cash surrender value of life insurance		46,083
Deferred tax assets, net		40,136
Core deposit intangible		7,144
Accrued interest receivable and other assets		9,134
Total assets acquired		1,209,348
Liabilities assumed:
Deposits		813,888
Long-term debt		30,000
Accrued interest payable and other liabilities		5,608
Total liabilities assumed		849,496
Net assets acquired	$	359,852
Cash paid	$	181,241
Fair value of common stock issued		34,862
Total consideration paid	$	216,103
Purchase price payable to SinoPac		138,309
Total consideration	$	354,412
Gains on bargain purchase	$	5,440

XML

Note 3 - Basis of Presentation

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]

3

. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accor

dance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and with the instructions to Form

10

-Q and Article

10

of Regulation S-

X.

Accordingly, they do

not

include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the interim periods presented are

not

necessarily indicative of the results that

may

be expected for the year ending

December 31, 2017.

For further information, refer to the audited consolidated financial statements and notes included in the Company’s Annual Report on Form

10

-K for the year ended

December 31, 2016.

The preparation of the

condensed consolidated financial statements in accordance with GAAP requires management of the Company to make a number of estimates and assumptions relating to the reported amount of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenues and expenses during the period. Actual results could differ from those estimates. The Company expects that the most significant estimates subject to change are the allowance for loan losses, goodwill impairment, and other-than-temporary impairment.

XML

Note 4 - Recent Accounting Pronouncements

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

New Accounting Pronouncements and Changes in Accounting Principles [Text Block]

4

. Recent Accounting Pronouncements

Accounting Standards adopted in

2017

In

March 2016,

the FASB issued ASU

2016

-

09,

“

Compensation Stock Compensation (Topic

718

): Improvements to Employee Share-Based Payment Accounting

.” ASU

2016

-

09

changes aspects of the accounting for share-based payment award transactions, including: (

1

) accounting for income taxes; (

2

) classification of excess tax benefits on the statement of cash flows; (

3

) forfeitures; (

4

) minimum statutory tax withholding requirements; and (

5

) classification of employee taxes paid on the statement of cash flows when an employer withholds shares for tax-withholding purposes. ASU

2016

-

09

became effective for interim and annual periods beginning on

January 1, 2017.

The method of adoption differs for each of the topics covered by the ASU. The Company elected to apply all topics covered by the ASU on a prospective basis and has elected to continue to estimate forfeitures expected to occur in determining the amount of compensation cost to be recognized each period.

Under ASU

2016

-

09,

all excess tax benefits and tax deficiencies from

share based payments are recognized as income tax expense or benefit in the income statement instead of the previous accounting which credited excess tax benefits to additional paid-in capital and tax deficiencies as a charge to income tax expense or as an offset to accumulated excess tax benefits, if any. Excess tax benefits or deficiencies are included in income tax expense as discrete items in the period in which they occur. For diluted earnings per share calculations, excess tax benefits are

no

longer included in assumed proceeds when determining average diluted shares outstanding under the treasury stock method. ASU

2016

-

09

resulted in a

$2.6

million tax benefit from the distribution of restricted stock units in the

nine

months ended

September 30, 2017.

Other Accounting Standards

In

May 2014,

the FASB issued ASU

2014

-

09,

Revenue from Contracts with Customers (Topic

606

).

The new guidance replaces existing revenue recognition guidance for contracts to provide goods or services to customers and amends existing guidance related to recognition of gains and losses on the sale of certain nonfinancial assets such as real estate. ASU

2014

-

09

clarifies the principles for recognizing revenue and replaces nearly all existing revenue recognition guidance in U.S. GAAP. Quantitative and qualitative disclosures regarding the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers are also required. ASU

2014

-

09

as amended by ASU

2015

-

14,

ASU

2016

-

08,

ASU

2016

-

10

and ASU

2016

-

12,

is effective for interim and annual periods beginning after

December 15, 2017

and is applied on either a modified retrospective or full retrospective basis. Our revenue is primarily comprised of net interest income on financial assets and financial liabilities, which is explicitly excluded from the scope of ASU 

2014

-

09,

and non-interest income. The Company has completed the assessment phase of implementing this new standard. In the assessment phase, the Company determined which revenue streams are within the scope and those that are excluded from the scope of the new standard. Based on this assessment, the Company concluded that substantially all of the Company's revenues are excluded from the scope of the new standard. For the revenues within the scope of the new standard, the Company concluded that there will

not

be a material impact under the new standard.

In

January 2016,

the FASB issued ASU

2016

-

01,

“

Financial Instruments Overall (Subtopic

825

-

10

): Recognition and Measurement of Financial Assets and Financial Liabilities

.” This update requires an entity to measure equity investments with readily determinable fair values at fair value with changes in fair value recognized in net income. Equity investment without readily determinable fair values will be measured at fair value either upon the occurrence of an observable price change or upon identification of an impairment and any amount by which the carrying value exceeding the fair value will be recognized as an impairment in net income. This update also requires an entity to disclose fair value of financial instruments measured at amortized cost on the balance sheet to measure that fair value using the exit price option. In addition, this update requires separate presentation in comprehensive income for changes in the fair value of a liability and in the balance sheet by measurement category and form of financial asset. ASU

2016

-

01

becomes effective for interim and annual periods beginning after

December 15, 2017. 

The Company is currently evaluating the impact on its consolidated financial statements.

In

February 2016,

the FASB issued ASU

2016

-

02,

Leases (Topic

842

),

which is intended to increase transparency and comparability in the accounting for lease transactions. ASU

2016

-

02

requires lessees to recognize all leases longer than

twelve

months on the consolidated balance sheet as lease assets and lease liabilities and quantitative and qualitative disclosures regarding key information about leasing arrangements. Lessor accounting is largely unchanged. ASU

2016

-

02

is effective for fiscal years beginning after

December 15, 2018,

including interim periods within those fiscal years with an option to early adopt. ASU

2016

-

02

mandates a modified retrospective transition method for all entities. The Company is evaluating the impact of ASU

2016

-

02

and has determined that the majority of our leases are operating leases. We expect, upon adoption, the Company will record a liability for the remaining obligation under the lease agreements and a corresponding right-of-use asset in its consolidated financial statements. ASU

2016

-

02

will be effective for us on

January 1, 2019

and will require transition using a modified retrospective approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements.

In

June 2016,

the FASB issued ASU

2016

-

13,

“

Financial Instruments - Credit Losses (Topic

326

): Measurement of Credit Losses on Financial Instruments.”

This update requires an entity to use a broader range of reasonable and supportable forecasts, in addition to historical experience and current conditions, to develop an expected credit loss estimate for financial assets and net investments that are

not

accounted for at fair value through net income. Credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses to the amount by which fair value is below amortized cost. ASU

2016

-

13

becomes effective for interim and annual periods beginning after

December 15, 2019. 

The Company has designated a management team to evaluate ASU

2016

-

13

and develop an implementation strategy. The Company has

not

yet determined the effect of ASU

2016

-

13

on its accounting policies or the impact on the Company’s consolidated financial statements.

In

August 2016,

the FASB issued ASU

2016

-

15,

“

Statement of Cash Flows – Classification of Certain Cash Receipts and Cash Payments.”

This update provides guidance on

eight

cash flow issues with the objective of reducing the existing diversity in practice related to debt prepayment or debt extinguishment costs, settlement of

zero

-coupon debt instruments or other debt instruments with coupon interest rates that are insignificant in relation to the effective interest rate of the borrowing, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, including bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, separately identifiable cash flows and application of the predominance principle. The amendments reduce current and potential future diversity in practice. The amendments in this update apply to all entities that are required to present a statement of cash flows under Topic

230.

ASU

2016

-

15

becomes effective for interim and annual periods beginning after

December 15, 2017.

The Company is currently evaluating the impact on its consolidated financial statements.

In

October 2016,

the FASB issued ASU

2016

-

16,

“Income Taxes – Intra-Entity Transfers of Assets Other Than Inventory.”

This update will allow the income tax consequences of intra-entity transfers of assets other than inventory when the transfer occurs. The amendments in this update are effective for annual reporting periods beginning after

December 15, 2017,

including interim reporting periods within those annual reporting periods. The Company is currently evaluating the impact on its consolidated financial statements.

In

November 2016,

the FASB issued ASU

2016

-

18,

“Statement of Cash Flows – Restricted Cash.”

This update requires that a statement of cash flows explain the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The amendments in this update do

not

provide a definition of restricted cash or restricted cash equivalents. The amendments in this update are effective for fiscal years beginning after

December 15, 2017,

and interim periods within those fiscal years. Adoption of ASU

2016

-

18

is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

January 2017,

the FASB issued ASU

2017

-

01,

“Business Combinations (Topic

805

) – Clarifying the Definition of a Business.”

This update clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. Under the current implementation guidance in Topic

805,

there are

three

elements of a business—inputs, processes, and outputs. While an integrated set of assets and activities (collectively referred to as a “set”) that is a business usually has outputs, outputs are

not

required to be present. In addition, all the inputs and processes that a seller uses in operating a set are

not

required if market participants can acquire the set and continue to produce outputs, for example, by integrating the acquired set with their own inputs and processes. The amendments in this update also provide a screen to determine when a set is

not

a business. The amendments in this update affect all reporting entities that must determine whether they have acquired or sold a business. The amendments in this update are to be applied to annual periods beginning after

December 15, 2017.

Adoption of ASU

2017

-

01

is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

January

2017,

the FASB issued ASU

2017

-

04,

“Intangibles—Goodwill and Other (Topic

350

): Simplifying the Test for Goodwill Impairment

.”

This update simplifies how an entity is required to test goodwill for impairment by eliminating Step

2

from the goodwill impairment test. Step

2

measures a goodwill impairment loss by comparing the implied fair value of a reporting unit’s goodwill with the carrying amount of that goodwill. Adoption of this update is on a prospective basis and the amendments in this update are to be applied to annual periods beginning after

December 15, 2019.

Adoption of ASU

2017

-

04

is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

February 2017,

the FASB issued ASU

2017

-

05,

"

Other Income—Gains and Losses from the

Derecognition of Nonfinancial Assets

(Subtopic

610

-

20

):

Clarifying the Scope of Asset Derecognition Guidance

and Accounting for Partial Sales of Nonfinancial Assets

.”

This update clarifies that a financial asset is within the scope of Subtopic

610

-

20

if it meets the definition of an in substance nonfinancial asset. The amendments define the term “in substance nonfinancial asset”, in part, as a financial asset promised to a counterparty in a contract if substantially all of the fair value of the assets (recognized and unrecognized) that are promised to the counterparty in the contract is concentrated in nonfinancial assets, then all of the financial assets promised to the counterparty are in substance nonfinancial assets with the scope of Subtopic

610

-

20.

The amendments in this update clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The amendments also clarify that an entity should allocate consideration to each distinct asset by applying the guidance in Topic

606

on allocating the transaction price to performance obligations.

The amendments are effective for annual reporting periods beginning after

December 15, 2017,

including interim reporting periods within that reporting period.

Adoption of ASU

2017

-

05

is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

March 2017,

the FASB issued ASU

2017

-

08,

“Receivables

- Nonrefundable Fees and Other Costs (Subtopic

310

-

20

): Premium Amortization on Purchased Callable Debt Securities.”

This update amends the amortization period for certain purchased callable debt securities held at a premium. The amendments require the premium to be amortized to the earliest call date. The amendments do

not

require an accounting change for securities held at a discount; the discount continues to be amortized to maturity. This update affects all entities that hold investments in callable debt securities that have an amortized cost basis in excess of the amount that is repayable by the issuer at the earliest call date. This update is effective for fiscal years, and interim periods within those fiscal years, beginning after

December 15, 2018.

The Company is currently evaluating the impact on its consolidated financial statements.

In

May 2017,

the FASB issued ASU

2017

-

09,

“Compensation

–

Stock Compensation

(

T

opic

718

):

Modification

A

ccounting.

”

The amendments in this update provide guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification accounting in Topic

718.

The amendments in this update affect any entity that changes the terms or conditions of a share-based payment award. The amendments should be applied prospectively to an award modified on or after the adoption date. The amendments in this update are effective for all entities for annual periods, and interim periods within those annual periods, beginning after

December 15, 2017.

Adoption of ASU

2017

-

09

is

not

expected to have a significant impact on the Company’s consolidated financial statements.

In

July 2017,

the FASB issued ASU

2017

-

11,

“Earnings per Share (Topic

260

), Distinguishing Liabilities from Equity (Topic

480

) and Derivatives and Hedging (Topic

815

)." There are

two

parts to this update. Part I of this update addresses the complexity of accounting for certain financial instruments with down round features. Down round features are features of certain equity-linked instruments that result in the strike price being reduced on the basis of the pricing of future equity offerings. Part II of this update addresses the difficulty in navigating topic

480,

Distinguishing Liabilities from Equity, because of the existence of extensive pending content in the FASB Accounting Standards Codification. This pending content is the result of the indefinite deferral of accounting requirements about mandatorily redeemable financial instruments of certain nonpublic entities and certain mandatorily redeemable noncontrolling interests. The amendments in this update are effective for fiscal years beginning after

December 15, 2020.

Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in part I of this update should be applied in either of the following ways: (i) Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the

first

fiscal year and interim periods in which the pending content that links to this paragraph is effective; or (ii) Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs

250

-

10

-

45

-

5

through

45

-

10.

The amendments to Part II of this update do

not

require any transition guidance because those amendments do

not

have an accounting effect. The Company is currently evaluating the impact on its consolidated financial statements.

In

August 2017,

the FASB issued ASU

2017

-

12,

“Derivatives and Hedging (Topic

815

)”, targeted improvements to accounting for hedging activities. The amendments in this update better align an entity’s risk management activities and financial reporting for hedging relationships through changes to both the designation and measurement guidance for qualifying hedging relationships and the presentation of hedge results. To meet that objective, the amendments expand and refine hedge accounting for both nonfinancial and financial risk components and align the recognition and presentation of the effects of the hedging instrument and the hedged item in the financial statements. For public business entities, the amendments in this update are effective for fiscal years beginning after

December 15, 2018,

and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after

December 15, 2019,

and interim periods within fiscal years beginning after

December 15, 2020.

Early application is permitted in any interim period after issuance of the update. The Company is currently evaluating the impact on its consolidated financial statements.

XML

Note 5 - Earnings Per Share

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Earnings Per Share [Text Block]

5

. Earnings per Share

Basic earnings per share exclude

s dilution and is computed by dividing net income available to common stockholders by the weighted-average number of common shares outstanding for the period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock and resulted in the issuance of common stock that then shared in earnings. Outstanding stock options with anti-dilutive effect were

not

included in the computation of diluted earnings per share. The following table sets forth earnings per common share calculations:

	Three months ended September 30,				Nine months ended September 30,
(Dollars in thousands, except share and per share data)	2017		2016		2017		2016
Net income	$	49,746	$	46,090	$	150,102	$	127,084
Weighted-average shares:
Basic weighted-average number of common shares outstanding		80,665,398		78,865,860		80,073,249		79,147,839
Dilutive effect of weighted-average outstanding common share equivalents
Warrants		399,957		569,949		409,019		520,686
Options		19,221		95,850		25,706		90,461
Restricted stock units		320,278		165,410		289,205		143,860
Diluted weighted-average number of common shares outstanding		81,404,854		79,697,069		80,797,179		79,902,846
Average stock options and warrants with anti-dilutive effect		0		207,183		6,561		247,974
Earnings per common share:
Basic	$	0.62	$	0.58	$	1.87	$	1.61
Diluted	$	0.61	$	0.58	$	1.86	$	1.59

XML

Note 6 - Stock-based Compensation

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Disclosure of Compensation Related Costs, Share-based Payments [Text Block]

6

. Stock-Based Compensation

Under the

Company’s equity incentive plans, directors and eligible employees

may

be granted incentive or non-statutory stock options and/or restricted stock units, or awarded non-vested stock.

As of

September 30, 2017,

the only options granted by the Company were non-statutory stock options to selected Bank officers and non-employee directors at exercise prices equal to the fair market value of a share of the Company’s common stock on the date of grant. Such options have a maximum

ten

-year term and vest in

20%

annual increments (subject to early termination in certain events). There were

no

options granted during the

first

nine

months of

2017

or

2016.

Option compensation expense was

zero

for the

three

months and for the

nine

months ended

September 30, 2017,

and

September 30, 2016.

Stock-based compensation was fully recognized over the requisite service period for all awards. There were

43,540

and

2,110

stock option shares exercised in the

nine

months ended

September 30, 2017

and

2016,

respectively. The Company received

$1.0

million from the exercise of stock options which had an aggregate intrinsic value of

$607,000

during the

nine

months ended

September 30, 2017

compared to

$49,000

from the exercise of stock options which had an aggregate intrinsic value of

$9,000

during the

nine

months ended

September 30, 2016.

The table below summarizes stock option activity for the periods indicated:

						Weighted-average		Aggregate
				Weighted-average		Remaining Contractual		Intrinsic
	Shares			Exercise Price		Life (in years)		Value (in thousands)
Balance, December 31, 2016		82,670		$	23.37		1.1	$	1,211
Exercised		(18,040	)		23.37
Balance, March 31, 2017		64,630		$	23.37		0.9	$	925
Exercised		(19,500	)		23.37
Balance, June 30, 2017		45,130		$	23.37		0.7	$	658
Exercised		(6,000	)		23.37
Balance, September 30, 2017		39,130		$	23.37		0.4	$	659
Exercisable, September 30, 2017		39,130		$	23.37		0.4	$	659

In addition to stock options, the Company also grants restricted stock units to eligible employees

that vest subject to continued employment at the vesting dates.

The Company grant

ed restricted stock units for

87,781

shares at an average closing price of

$38

.59

per share in the

first

nine

months of

2017.

The Company granted restricted stock units for

88,693

shares at an average closing price of

$30.37

per share in

2016.

Starting i

n

December 2013,

the Company granted performance share unit awards in which the number of units earned is calculated based on the relative total shareholder return (TSR) of the Company’s common stock as compared to the TSR of the KBW Regional Banking Index. In addition, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted earnings per share (EPS) as defined in the award for the

2014

to

2016

period. In

December 2016,

in addition to TSR and EPS awards, the Company granted performance share unit awards in which the number of units earned is determined by comparison to the targeted return of assets ROA as defined in the award for

December 2016.

Performance TSR, performance EPS, and performance ROA units awarded are scheduled to vest on

December 31

of the

third

full year from the grant date. The Company granted performance TSR restricted stock units for

30,319

shares in

2016,

61,209

shares in

2015

and

60,456

shares in

2014,

performance EPS restricted stock units for

58,241

shares in

2016,

57,409

shares in

2015

and

57,642

shares in

2014,

and performance ROA restricted stock units for

29,119

shares in

2016

, to its

seven

executive officers. In

February 2017,

after approval by the Company’s Compensation Committee,

297,171

shares of the Company’s stock were distributed under the TSR and EPS grants awarded in

December 2013

under the terms of the awards, including

76,623

shares granted and distributed based on higher than target actual performance and for cash dividends during the performance period

.

The following table presents restricted stock unit

activity during the

nine

months ended

September 30, 2017:

	Units
Balance at December 31, 2016		727,419
Granted		164,404
Distributed		(297,905	)
Forfeited		(10,424	)
Balance at September 30, 2017		583,494

The compensa

tion expense recorded for restricted stock units was

$1.3

million for the

three

months ended

September 30, 2017,

compared to

$1.2

million in the same period a year ago. For the

nine

months ended

September 30, 2017

and

2016,

compensation expense recorded related to the restricted stock units was

$3

.9

million and

$3.3

million, respectively. Unrecognized stock-based compensation expense related to restricted stock units was

$9.1

million as of

September 30, 2017,

and is expected to be recognized over the next

2.

0

years.

As of

September 30, 2017,

3,465,411

shares were available under the Company’s

2005

Incentive Plan (as Amended and Restated) for future grants.

T

ax benefit from share-based payment arrangements of

$2.6

million reduced income tax expense in the

first

nine

months of

2017

compared to a tax short-fall of

$3.4

million that was charged to income tax expense in the

first

nine

months of

2016.

XML

Note 7 - Investment Securities

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Investments in Debt and Marketable Equity Securities (and Certain Trading Assets) Disclosure [Text Block]

7

. Investment Securities

Investment securities were $

1.4

billion as of

September 30, 2017,

compared to

$1.3

billion as of

December 31, 2016.

The following tables reflect the amortized cost, gross unrealized gains, gross unrealized losses, and fair value of investment securities as of

September 30, 2017,

and

December 31, 2016:

	September 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	399,741	$	-	$	305	$	399,436
U.S. government agency entities		9,679		27		6		9,700
U.S. government sponsored entities		400,000		-		6,278		393,722
State and municipal securities		1,943		-		12		1,931
Mortgage-backed securities		447,959		468		2,362		446,065
Collateralized mortgage obligations		1,715		-		5		1,710
Corporate debt securities		80,007		904		5		80,906
Mutual funds		6,500		-		229		6,271
Preferred stock of government sponsored entities		4,117		3,970		-		8,087
Other equity securities		13,294		7,463		98		20,659
Total	$	1,364,955	$	12,832	$	9,300	$	1,368,487

	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	489,839	$	35	$	857	$	489,017
U.S. government sponsored entities		400,000		-		9,669		390,331
Mortgage-backed securities		339,241		309		3,290		336,260
Collateralized mortgage obligations		48		-		20		28
Corporate debt securities		74,965		247		862		74,350
Mutual funds		6,500		-		270		6,230
Preferred stock of government sponsored entities		2,811		4,497		-		7,308
Other equity securities		3,608		7,213		-		10,821
Total	$	1,317,012	$	12,301	$	14,968	$	1,314,345

The amortized cost and fair value of investment securities a

s of

September 30, 2017,

by contractual maturities, are shown below. Actual maturities

may

differ from contractual maturities because borrowers

may

have the right to call or repay obligations with or without call or repayment penalties.  

	Securities Available-For-Sale
	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	415,782	$	415,555
Due after one year through five years		465,328		459,924
Due after five years through ten years		8,658		8,647
Due after ten years (1)		475,187		484,361
Total	$	1,364,955	$	1,368,487

(

1

) Equity securities are reported in this category

There were

no

sales transactions of mortgage-backed

securities during the

first

nine

months of

2017.

Proceeds of

$415.3

million were received from the sales transactions of mortgage-backed securities during the

first

nine

months of

2016.

Proceeds from repayments, maturities and calls of mortgage-backed securities were

$48.5

million and

$125.3

million for the

nine

months ended

September 30, 2017

and

2016,

respectively. Proceeds of

$99.5

million were received from the sale of other investment securities during the

nine

months ended

September 30, 2017.

There were

no

sales transactions of other investment securities during the

nine

months ended

September 30, 2016.

Proceeds from maturities and calls of other investment securities were

$341.3

million during the

nine

months ended

September 30, 2017

compared to

$460.0

million during the same period a year ago. During the

nine

months ended

September 30, 2017,

$439,000

of losses were realized on sales of investment securities. Other than temporary impairment write-downs of

zero

and

$206,000

were recorded during the

first

nine

months of

2017

and

2016,

respectively.

The table

s below show the fair value and unrealized losses of the temporarily impaired securities in our investment securities portfolio as of

September 30, 2017,

and

December 31, 2016:

	September 30, 2017
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	339,707	$	46	$	49,729	$	259	$	389,436	$	305
U.S. government sponsored entities		395,774		6,284		-		-		395,774		6,284
State and municipal securities		1,931		12		-		-		1,931		12
Mortgage-backed securities		359,112		2,359		122		3		359,234		2,362
Collateralized mortgage obligations		1,710		5		-		-		1,710		5
Corporate debt securities		5,029		5		-		-		5,029		5
Mutual funds		-		-		6,271		229		6,271		229
Other equity securities		4,680		98		-		-		4,680		98
Total	$	1,107,943	$	8,809	$	56,122	$	491	$	1,164,065	$	9,300

	December 31, 2016
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	299,088	$	857	$	-	$	-	$	299,088	$	857
U.S. government sponsored entities		390,331		9,669		-		-		390,331		9,669
Mortgage-backed securities		328,236		3,288		62		2		328,298		3,290
Collateralized mortgage obligations		-		-		28		20		28		20
Corporate debt securities		-		-		29,138		862		29,138		862
Mutual funds		-		-		6,230		270		6,230		270
Total	$	1,017,655	$	13,814	$	35,458	$	1,154	$	1,053,113	$	14,968

A

s of

September 30, 2017,

the Company had unrealized losses on available-for-sale securities of

$9.3

million. The unrealized losses on these securities were primarily attributed to yield curve movement, together with widened liquidity spreads and credit spreads. The issuers have

not,

to the Company’s knowledge, established any cause for default on these securities. Management believes the impairment was temporary and, accordingly,

no

impairment loss on these securities has been recognized in our condensed consolidated statements of operations. The Company expects to recover the amortized cost basis of its debt securities, and has

no

intent to sell and will

not

be required to sell available-for-sale debt securities that have declined below their cost before their anticipated recovery.

Investment securities having a carrying value of $

291.4

million as of

September 30, 2017,

and

$649.1

million as of

December 31, 2016,

were pledged to secure public deposits, other borrowings, treasury tax and loan, and securities sold under agreements to repurchase. 

XML

Note 8 - Loans

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

8

.

Loans

Most of the Company

’s business activities are with customers located in the predominately Asian-populated areas of Southern and Northern California; New York City, New York; Dallas and Houston, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; Las Vegas, Nevada, and Hong Kong. The Company has

no

specific industry concentration, and generally its loans are secured by real property or other collateral of the borrowers. Loans are generally expected to be paid off from the operating profits of the borrowers, from refinancing by other lenders, or through sale by the borrowers of the secured collateral.

The

types of loans in the Company’s condensed consolidated balance sheets as of

September 30, 2017,

and

December 31, 2016,

were as follows:

	September 30, 2017			December 31, 2016
	(In thousands)
Commercial loans	$	2,419,891		$	2,248,187
Residential mortgage loans		2,922,537			2,444,048
Commercial mortgage loans		6,377,047			5,785,248
Real estate construction loans		691,486			548,088
Equity lines		181,751			171,711
Installment & other loans		4,722			3,993
Gross loans	$	12,597,434		$	11,201,275
Allowance for loan losses		(121,535	)		(118,966	)
Unamortized deferred loan fees		(3,424	)		(4,994	)
Total loans, net	$	12,472,475		$	11,077,315
Loans held for sale	$	-		$	7,500

A

s of

September 30, 2017,

recorded investment in impaired loans totaled

$127.7

million and was comprised of non-accrual loans, excluding loans held for sale, of

$65.3

million and accruing troubled debt restructured loans (TDRs) of

$62.4

million. As of

December 31, 2016,

recorded investment in impaired loans totaled

$115.1

million and was comprised of non-accrual loans, excluding loans held for sale, of

$49.7

million and accruing TDRs of

$65.4

million. For impaired loans, the amounts previously charged off represent

7.1%

as of

September 30, 2017,

and

8.4%

as of

December 31, 2016,

of the contractual balances for impaired loans.

The following table presents the average balance and interest income recognized related

to impaired loans for the periods indicated:

	Impaired Loans
	Average Recorded Investment								Interest Income Recognized
	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
					(In thousands)
Commercial loans	$	24,987	$	28,091	$	22,572	$	18,602	$	678	$	170	$	760	$	488
Real estate construction loans		29,780		5,869		29,868		12,005		99		66		287		196
Commercial mortgage loans		58,555		81,005		60,074		86,456		391		776		1,015		2,124
Residential mortgage loans and equity lines		13,937		18,256		15,208		17,456		96		148		287		401
Total impaired loans	$	127,259	$	133,221	$	127,722	$	134,519	$	1,264	$	1,160	$	2,349	$	3,209

The following table present

s impaired loans and the related allowance for loan losses as of the dates indicated:

	Impaired Loans
	September 30, 2017						December 31, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance		Unpaid Principal Balance		Recorded Investment		Allowance
	(In thousands)
With no allocated allowance
Commercial loans	$	23,953	$	23,373	$	-	$	24,037	$	23,121	$	-
Real estate construction loans		22,309		21,748		-		5,776		5,458		-
Commercial mortgage loans		39,154		32,370		-		60,522		54,453		-
Residential mortgage loans and equity lines		2,264		2,264		-		5,472		5,310		-
Subtotal	$	87,680	$	79,755	$	-	$	95,807	$	88,342	$	-
With allocated allowance
Commercial loans	$	14,082	$	13,985	$	1,461	$	5,216	$	4,640	$	1,827
Commercial mortgage loans		23,061		22,820		823		10,158		10,017		573
Residential mortgage loans and equity lines		12,461		11,111		322		13,263		12,075		396
Subtotal	$	49,604	$	47,916	$	2,606	$	28,637	$	26,732	$	2,796
Total impaired loans	$	137,284	$	127,671	$	2,606	$	124,444	$	115,074	$	2,796

The following table

s present the aging of the loan portfolio by type as of

September 30, 2017,

and as of

December 31, 2016:

	September 30, 2017
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
Type of Loans:	(In thousands)
Commercial loans	$	8,412	$	14,855	$	3,900	$	15,942	$	43,109	$	2,376,782	$	2,419,891
Real estate construction loans		-		-		-		14,267		14,267		677,219		691,486
Commercial mortgage loans		-		-		-		28,379		28,379		6,348,668		6,377,047
Residential mortgage loans and equity lines		-		89		-		6,725		6,814		3,097,474		3,104,288
Installment and other loans		-		-		-		-		-		4,722		4,722
Total loans	$	8,412	$	14,944	$	3,900	$	65,313	$	92,569	$	12,504,865	$	12,597,434

	December 31, 2016
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
Type of Loans:	(In thousands)
Commercial loans	$	22,753	$	27,190	$	-	$	15,710	$	65,653	$	2,182,534	$	2,248,187
Real estate construction loans		10,390		5,835		-		5,458		21,683		526,405		548,088
Commercial mortgage loans		5,886		700		-		20,078		26,664		5,758,584		5,785,248
Residential mortgage loans and equity lines		4,390		-		-		8,436		12,826		2,602,933		2,615,759
Installment and other loans		-		-		-		-		-		3,993		3,993
Total loans	$	43,419	$	33,725	$	-	$	49,682	$	126,826	$	11,074,449	$	11,201,275

The determination of the amount of the allowance for

loan losses for impaired loans is based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for loan losses. The nature of the process by which the Bank determines the appropriate allowance for loan losses requires the exercise of considerable judgment. This allowance evaluation process is also applied to troubled debt restructurings since they are considered to be impaired loans.

A troubled debt restructuring is a formal modification of the terms of a loan when the lender, for econo

mic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower. The concessions

may

be granted in various forms, including a change in the stated interest rate, a reduction in the loan balance or accrued interest, or an extension of the maturity date that causes significant delay in payment.

TDR

s on accrual status are comprised of the loans that have, pursuant to the Bank’s policy, performed under the restructured terms and have demonstrated sustained performance under the modified terms for

six

months before being returned to accrual status. The sustained performance considered by management pursuant to its policy includes the periods prior to the modification if the prior performance met or exceeded the modified terms. This would include cash paid by the borrower prior to the restructure to set up interest reserves.

As of

September 30, 2017,

accruing TDRs were

$62.4

million and non-accrual TDRs were

$33.7

million compared to accruing TDRs of

$65.4

million and non-accrual TDRs of

$29.7

million as of

December 31, 2016.

The Company allocated specific reserves of

$1.1

million to accruing TDRs and

$143,000

to non-accrual TDRs as of

September 30, 2017,

and

$1.3

million to accruing TDRs and

$1.1

million to non-accrual TDRs as of

December 31, 2016.

The following tables present TDRs that were modified during the

three

and

nine

months ended

September 30, 2017

and

2016,

their specific reserve

s as of

September 30, 2017

and

2016,

and charge-off

s

for the

three

and

nine

months ended

September 30, 2017

and

2016:

	Three months ended September 30, 2017								September 30, 2017
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		8	$	18,873	$	18,873	$	-	$	636
Commercial mortgage loans		5		4,123		3,818		305		10
Residential mortgage loans and equity lines		1		483		483		-		32
Total		14	$	23,479	$	23,174	$	305	$	678

	Three months ended September 30, 2016								September 30, 2016
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		7	$	18,258	$	18,258	$	-	$	208
Commercial mortgage loans		1		738		738		-		-
Total		8	$	18,996	$	18,996	$	-	$	208

	Nine months ended September 30, 2017								September 30, 2017
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		13	$	19,543	$	19,543	$	-	$	641
Real estate construction loans		2		28,489		28,489		-		-
Commercial mortgage loans		5		4,123		3,818		305		10
Residential mortgage loans and equity lines		1		483		483		-		32
Total		21	$	52,638	$	52,333	$	305	$	683

	Nine months ended September 30, 2016								September 30, 2016
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		11	$	23,102	$	23,102	$	-	$	222
Commercial mortgage loans		1		738		738		-		-
Residential mortgage loans and equity lines		2		367		367		-		-
Total		14	$	24,207	$	24,207	$	-	$	222

Modifications of the loan terms during the

first

nine

months of

2017

were in the form of extensions of maturity dates. The length of time for which modifications involving extensions of maturity dates ranged from

three

to

twelve

months from the modification date. 

We expect that the TDR

s on accruing status as of

September 30, 2017,

which were all performing in accordance with their restructured terms, will continue to comply with the restructured terms because of the reduced principal or interest payments on these loans.  A summary of TDRs by type of concession and by type of loan, as of

September 30, 2017,

and

December 31, 2016,

is shown below:

	September 30, 2017
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	21,416	$	-	$	-	$	21,416
Real estate construction loans		7,480		-		-		7,480
Commercial mortgage loans		16,130		5,895		4,787		26,812
Residential mortgage loans		3,516		337		2,797		6,650
Total accruing TDRs	$	48,542	$	6,232	$	7,584	$	62,358

	September 30, 2017
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	13,259	$	-	$	-	$	13,259
Commercial mortgage loans		1,347		1,706		16,508		19,561
Residential mortgage loans		714		-		157		871
Total non-accrual TDRs	$	15,320	$	1,706	$	16,665	$	33,691

	December 31, 2016
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	7,971	$	-	$	4,081	$	12,052
Commercial mortgage loans		25,979		5,961		12,452		44,392
Residential mortgage loans		5,104		789		3,056		8,949
Total accruing TDRs	$	39,054	$	6,750	$	19,589	$	65,393

	December 31, 2016
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	14,565	$	-	$	-	$	14,565
Commercial mortgage loans		2,510		1,795		10,328		14,633
Residential mortgage loans		356		-		168		524
Total non-accrual TDRs	$	17,431	$	1,795	$	10,496	$	29,722

The activity within our TDR

s for the periods indicated is shown below:

	Three months ended September 30,						Nine months ended September 30,
Accruing TDRs	2017			2016			2017			2016
	(In thousands)
Beginning balance	$	79,819		$	74,708		$	65,393		$	81,680
New restructurings		21,790			18,347			49,973			20,412
Restructured loans restored to accrual status		-			-			-			10,303
Payments		(35,677	)		(6,500	)		(41,372	)		(9,816	)
Restructured loans placed on non-accrual status		(3,574	)		-			(9,396	)		(1,138	)
Expiration of loan concession upon renewal		-			-			(2,240	)		(14,886	)
Ending balance	$	62,358		$	86,555		$	62,358		$	86,555

	Three months ended September 30,						Nine months ended September 30,
Non-accrual TDRs	2017			2016			2017			2016
	(In thousands)
Beginning balance	$	30,045		$	25,442		$	29,722		$	39,923
New restructurings		2,360			649			2,360			3,794
Restructured loans placed on non-accrual status		3,574			-			9,396			1,138
Charge-offs		(355	)		(3,407	)		(1,901	)		(4,352	)
Payments		(1,933	)		(1,814	)		(5,160	)		(9,330	)
Foreclosures		-			-			(726	)		-
Restructured loans restored to accrual status		-			-			-			(10,303	)
Ending balance	$	33,691		$	20,870		$	33,691		$	20,870

The Company considers a

loan to be in payment default once it is

60

to

90

days contractually past due under the modified terms.  One commercial loan of

$50,000

with charge-offs of

$2.1

million had payment defaults within the previous

twelve

months ended

September 30, 2017.

Under the Company

’s internal underwriting policy, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification in order to determine whether a borrower is experiencing financial difficulty.

As of

September

30,

2017,

there were

no

commitments to lend additional funds to those borrowers whose loans had been restructured, were considered impaired, or were on non-accrual status.

As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:

● Pass/Watch –  These loans range from minimal credit risk to lower than average, but still acceptable, credit risk.

● Special Mention – Borrower is fundamentally sound and loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.

● Substandard   – These loans are inadequately protected by current sound net worth, paying capacity, or collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.

● Doubtful – The possibility of loss is extremely high, but due to identifiable and important pending events (which may strengthen the loan), a loss classification is deferred until the situation is better defined.

● Loss – These loans are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.

The following table

s present the loan portfolio by risk rating as of

September 30, 2017,

and as of

December 31, 2016:

	September 30, 2017
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
Commercial loans	$	2,216,816	$	146,479	$	56,565	$	31	$	2,419,891
Real estate construction loans		604,363		65,375		21,748		-		691,486
Commercial mortgage loans		5,904,023		305,927		167,097		-		6,377,047
Residential mortgage loans and equity lines		3,064,118		31,858		8,312		-		3,104,288
Installment and other loans		4,722		-		-		-		4,722
Total gross loans	$	11,794,042	$	549,639	$	253,722	$	31	$	12,597,434
Loans held for sale	$	-	$	-	$	-	$	-	$	-

	December 31, 2016
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
Commercial loans	$	2,023,114	$	140,682	$	84,293	$	98	$	2,248,187
Real estate construction loans		469,909		44,129		34,050		-		548,088
Commercial mortgage loans		5,410,623		250,221		124,404		-		5,785,248
Residential mortgage loans and equity lines		2,605,834		-		9,925		-		2,615,759
Installment and other loans		3,993		-		-		-		3,993
Total gross loans	$	10,513,473	$	435,032	$	252,672	$	98	$	11,201,275
Loans held for sale	$	-	$	-	$	7,500	$	-	$	7,500

The allowance for loan losses and the reserve for off-balance sheet credit commitments are significant estimates that can and do change based on management

’s process in analyzing the loan portfolio and on management’s assumptions about specific borrowers, underlying collateral, and applicable economic and environmental conditions, among other factors.

The following table presents the balance in the allowance for loan losses by portfolio segment and based on impairment method

as of

September 30, 2017,

and as of

December 31, 2016:

			Real Estate		Commercial		Residential
	Commercial		Construction		Mortgage		Mortgage Loans		Installment and
	Loans		Loans		Loans		and Equity Lines		Other Loans		Total
	(In thousands)
September 30, 2017
Loans individually evaluated for impairment
Allowance	$	1,461	$	-	$	823	$	322	$	-	$	2,606
Balance	$	37,358	$	21,748	$	55,190	$	13,376	$	-	$	127,672
Loans collectively evaluated for impairment
Allowance	$	49,578	$	22,008	$	36,579	$	10,740	$	24	$	118,929
Balance	$	2,382,533	$	669,738	$	6,321,857	$	3,090,912	$	4,722	$	12,469,762
Total allowance	$	51,039	$	22,008	$	37,402	$	11,062	$	24	$	121,535
Total balance	$	2,419,891	$	691,486	$	6,377,047	$	3,104,288	$	4,722	$	12,597,434
December 31, 2016
Loans individually evaluated for impairment
Allowance	$	1,827	$	-	$	573	$	396	$	-	$	2,796
Balance	$	27,761	$	5,458	$	64,470	$	17,385	$	-	$	115,074
Loans collectively evaluated for impairment
Allowance	$	47,376	$	23,268	$	34,291	$	11,224	$	11	$	116,170
Balance	$	2,220,426	$	542,630	$	5,720,778	$	2,598,374	$	3,993	$	11,086,201
Total allowance	$	49,203	$	23,268	$	34,864	$	11,620	$	11	$	118,966
Total balance	$	2,248,187	$	548,088	$	5,785,248	$	2,615,759	$	3,993	$	11,201,275

The following table

s detail activity in the allowance for loan losses by portfolio segment for the

three

and

nine

months ended

September 30, 2017,

and

September 30, 2016.

Allocation of a portion of the allowance to

one

category of loans does

not

preclude its availability to absorb losses in other categories.

Three months ended September 30, 2017 and 2016
				Real Estate			Commercial			Residential			Installment
	Commercial			Construction			Mortgage			Mortgage Loans			and Other
	Loans			Loans			Loans			and Equity Lines			Loans			Total
	(In thousands)
June 30, 2017 Ending Balance	$	46,744		$	17,844		$	36,840		$	14,364		$	17			115,809
Provision/(credit) for possible credit losses		3,800			4,117			(4,615	)		(3,309	)		7			-
Charge-offs		(80	)		-			(305	)		-			-			(385	)
Recoveries		575			47			5,482			7			-			6,111
Net (charge-offs)/recoveries		495			47			5,177			7			-			5,726
September 30, 2017 Ending Balance	$	51,039		$	22,008		$	37,402		$	11,062		$	24		$	121,535
June 30, 2016 Ending Balance	$	50,590		$	10,753		$	46,090		$	15,503		$	12		$	122,948
Provision/(credit) for possible credit losses		4,380			(2,056	)		3,132			(5,452	)		(4	)		-
Charge-offs		(3,277	)		-			(4,626	)		-			-			(7,903	)
Recoveries		2,006			548			337			6			-			2,897
Net (charge-offs)/recoveries		(1,271	)		548			(4,289	)		6			-			(5,006	)
September 30, 2016 Ending Balance	$	53,699		$	9,245		$	44,933		$	10,057		$	8		$	117,942

Nine months ended September 30, 2017 and 2016
				Real Estate			Commercial			Residential			Installment
	Commercial			Construction			Mortgage			Mortgage Loans			and Other
	Loans			Loans			Loans			and Equity Lines			Loans			Total
	(In thousands)
2017 Beginning Balance	$	49,203		$	23,268		$	34,864		$	11,620		$	11		$	118,966
Provision/(credit) for possible credit losses		2,245			(1,403	)		(2,775	)		(580	)		13			(2,500	)
Charge-offs		(1,810	)		-			(860	)		-			-			(2,670	)
Recoveries		1,401			143			6,173			22			-			7,739
Net (charge-offs)/recoveries		(409	)		143			5,313			22			-			5,069
September 30, 2017 Ending Balance	$	51,039		$	22,008		$	37,402		$	11,062		$	24		$	121,535
Reserve for impaired loans	$	1,461		$	-		$	823		$	322		$	-		$	2,606
Reserve for non-impaired loans	$	49,578		$	22,008		$	36,579		$	10,740		$	24		$	118,929
Reserve for off-balance sheet credit commitments	$	2,760		$	1,206		$	109		$	175		$	4		$	4,254
2016 Beginning Balance	$	56,199		$	22,170		$	49,440		$	11,145		$	9		$	138,963
Provision/(credit) for possible credit losses		5,815			(20,796	)		295			(963	)		(1	)		(15,650	)
Charge-offs		(12,035	)		-			(5,681	)		(149	)		-			(17,865	)
Recoveries		3,720			7,871			879			24			-			12,494
Net (charge-offs)/recoveries		(8,315	)		7,871			(4,802	)		(125	)		-			(5,371	)
September 30, 2016 Ending Balance	$	53,699		$	9,245		$	44,933		$	10,057		$	8		$	117,942
Reserve for impaired loans	$	1,320		$	-		$	1,248		$	375		$	-		$	2,943
Reserve for non-impaired loans	$	52,379		$	9,245		$	43,685		$	9,682		$	8		$	114,999
Reserve for off-balance sheet credit commitments	$	2,112		$	-		$	35		$	80		$	2		$	2,229

XML

Note 9 - Commitments and Contingencies

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Commitments and Contingencies Disclosure [Text Block]

9

.

Commitments and Contingencies

The Company is involved in various litigation concerning transactions entered into in the normal course of business. Management, after consultation with legal counsel, does

not

believe that the resolution of such litigation will have a material effect upon its consolidated financial condition, results of operations, or liquidity taken as a whole.

Although the Company establishes accruals for legal proceedings when information related to the loss contingencies represented by those matters indicates both that a loss is probable and that the amount of loss can be reasonably estimated, the Company does

not

have accruals for all legal proceedings where there is a risk of loss. In addition, amounts accrued

may

not

represent the ultimate loss to the Company from the legal proceedings in question. Thus, ultimate losses

may

be higher or lower, and possibly significantly so, than the amounts accrued for legal loss contingencies.

In the normal course of business, the Company becomes a party to financial instruments with off-balance sheet risk to meet the financing needs of its customers. These financial instruments include commitments to extend credit in the form of loans, or through commercial or standby letters of credit

and financial guarantees. These instruments represent varying degrees of exposure to risk in excess of the amounts included in the accompanying condensed consolidated balance sheets. The contractual or notional amount of these instruments indicates a level of activity associated with a particular class of financial instrument and is

not

a reflection of the level of expected losses, if any.

XML

Note 10 - Borrowed Funds

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Debt Disclosure [Text Block]

10

. Borrowed Funds

Securities Sold Under Agreements to Repurchase.

Securities sold under agreements to repurchase were

$100

million with a weighted average rate of

2.86%

as of

September 30, 2017,

compared to

$350

million with a weighted average rate of

4.06%

as of

December 31, 2016.

Final maturity for the

two

fixed rate non-callable securities sold under agreements to repurchase was

$50.0

million in

June 2018

and

$50.0

million in

July 2018.

These transactions are accounted for as collateralized financing transactions and recorded at the amounts at which the securities were sold. The Company

may

have to provide additional collateral for the repu

rchase agreements, as necessary. The underlying collateral pledged for the repurchase agreements consists of U.S. Treasury securities and mortgage-backed securities with a fair value of

$108

million as of

September 30, 2017,

and

$372

million as of

December 31, 2016.

Borrowing from the FHLB.

As of

September 30, 2017,

over-night borrowings from the FHLB were

$450

million at a rate of

1.16%

compared to

$275

million at a rate of

0.55%

as of

December 31, 2016.

As of

September 30, 2017,

the advances from the FHLB were

$145

million at a rate of

1.35%.

As of

September 30, 2017,

FHLB advances of

$490

million will mature in

October 2017,

$55

million in

2018

and

$50

million in

December 2019.

XML

Note 11 - Income Taxes

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Income Tax Disclosure [Text Block]

1

1.

Income Taxes

The effective tax rate for

the

third

quarter of

2017

was

41.4%

compared to

25.5%

for the

third

quarter of

2016.

The

third

quarter

2017

effective tax rate of

41.4%

reflected additional tax expense to increase the full year effective tax rate to

34%

compared to the

29%

effective tax rate forecasted at

June 30, 2017.

This adjustment in the

third

quarter was the result of lower tax credits from the slow deployment of alternative energy investments. Income tax expense for the

first

quarter of

2017

was also reduced by

$2.6

million in benefits from the distribution of restricted stock units and exercises of stock options.

As of

September 30, 2017

and

December 31, 2016,

the Company had income tax refunds receivable of

$19.4

million and

$14.6

million, respectively. These income tax receivables are included in other assets in the accompanying condensed consolidated balance sheets.

The Company

’s tax returns are open for audit by the Internal Revenue Service back to

2014

and by the California Franchise Tax Board back to

2012.

As the Company is presently under audit by a number of tax authorities, it is reasonably possible that unrecognized tax benefits could change significantly over the next

twelve

months. The Company does

not

expect that any such changes would have a material impact on its annual effective tax rate.

XML

Note 12 - Fair Value Measurements

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Fair Value, Measurement Inputs, Disclosure [Text Block]

1

2

. Fair Value

Measurement

s

The Company adopted ASC Topic

820

on

January 1, 2008,

and determined the fair values of our financial instruments based on the following:

• Level 1 - Quoted prices in active markets for identical assets or liabilities.

• Level 2 - Observable prices in active markets for similar assets or liabilities; prices for identical or similar assets or liabilities in markets that are not active; directly observable market inputs for substantially the full term of the asset and liability; market inputs that are not directly observable but are derived from or corroborated by observable market data.

• Level 3 – Unobservable inputs based on the Company’s own judgment about the assumptions that a market participant would use.

The Company uses the following methodologies to measure the fair value of its financial assets

and liabilities on a recurring basis:

Securities Available for Sale

. For certain actively traded agency preferred stock, mutual funds, U.S. Treasury securities, and other equity securities, the Company measures the fair value based on quoted market prices in active exchange markets at the reporting date, a Level

1

measurement. The Company also measures securities by using quoted market prices for similar securities or dealer quotes, a Level

2

measurement. This category generally includes U.S. Government agency securities, state and municipal securities, mortgage-backed securities (“MBS”), commercial MBS, collateralized mortgage obligations, asset-backed securities, corporate bonds and trust preferred securities.

Warrants

. The Company measures the fair value of warrants based on unobservable inputs based on assumptions and management judgment, a Level

3

measurement.

Foreign Exchange Contracts

. The Company measures the fair value of foreign exchange contracts based on dealer quotes, a Level

2

measurement.

Interest Rate Swaps

. Fair value of interest rate swaps is derived from

third

party models with observable market data, a Level

2

measurement.

The valuation techniques for the assets and liabilities valued on a nonrecurring basis are as follows:

Impaired Loans.

The Company does

not

record loans at fair value on a recurring basis. However, from time to time, nonrecurring fair value adjustments to collateral dependent impaired loans are recorded based on either the current appraised value of the collateral, a Level

2

measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, a Level

3

measurement.

Goodwill.

The Company

first

assesses qualitative factors to determine whether it is more likely than

not

that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the

two

-step goodwill impairment test described in ASC Topic

350.

The

two

-step impairment testing process, if needed, begins by assigning net assets and goodwill to the

two

reporting units

—

Commercial Lending and Retail Banking.  The Company then completes “step one” of the impairment test by comparing the fair value of each reporting unit (as determined based on the discussion below) with the recorded book value (or “carrying amount”) of its net assets, with goodwill included in the computation of the carrying amount.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is

not

considered impaired, and “step two” of the impairment test is

not

necessary.  If the carrying amount of a reporting unit exceeds its fair value, step

two

of the impairment test is performed to determine the amount of impairment.  Step

two

of the impairment test compares the carrying amount of the reporting unit’s goodwill to the “implied fair value” of that goodwill.  The implied fair value of goodwill is computed by assuming that all assets and liabilities of the reporting unit would be adjusted to the current fair value, with the offset as an adjustment to goodwill.  This adjusted goodwill balance is the implied fair value used in step two.  An impairment charge is recognized for the amount by which the carrying amount of goodwill exceeds its implied fair value. In connection with the determination of fair value, certain data and information is utilized, including earnings forecasts at the reporting unit level for the next

four

years.  Other key assumptions include terminal values based on future growth rates and discount rates for valuing the cash flows, which have inputs for the risk-free rate, market risk premium, and adjustments to reflect inherent risk and required market returns. Because of the significance of unobservable inputs in the valuation of goodwill impairment, goodwill subject to nonrecurring fair value adjustments is classified as a Level

3

measurement.

Core Deposit Intangibles.

Core deposit intangibles is initially recorded at fair value based on a valuation of the core deposits acquired and is amortized over its estimated useful life, which range from

4

to

10

years, to its residual value in proportion to the economic benefits consumed. The Company assesses the recoverability of this intangible asset on a nonrecurring basis using the core deposits remaining at the assessment date and the fair value of cash flows expected to be generated from the core deposits, a Level

3

measurement.

Other Real Estate Owned.

Real estate acquired in the settlement of loans is initially recorded at fair value based on the appraised value of the property on the date of transfer, less estimated costs to sell, a Level

2

measurement. From time to time, nonrecurring fair value adjustments are made to other real estate owned based on the current updated appraised value of the property, also a Level

2

measurement, or management’s judgment and estimation of value reported on older appraisals that are then adjusted based on recent market trends, a Level

3

measurement.

Investments in Venture Capital.

The Company periodically reviews its investments in venture capital for other-than-temporary impairment on a nonrecurring basis. Investments in venture capital were written down to their fair value based on available financial reports from venture capital partnerships and management’s judgment and estimation, a Level

3

measurement.

Equity Investments

. The Company records equity investments at fair value on a nonrecurring basis based on quoted market prices in active exchange markets at the reporting date, a Level

1

measurement.

The following table

s present the Company’s hierarchy for its assets and liabilities measured at fair value on a recurring basis as of

September 30, 2017,

and

December 31, 2016:

September 30, 2017	Fair Value Measurements Using						Total at
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Assets
Securities available-for-sale
U.S. Treasury securities	$	399,436	$	-	$	-	$	399,436
U.S. government agencies		-		9,700		-		9,700
U.S. government sponsored entities		-		393,722		-		393,722
State and municipal securities		-		1,931		-		1,931
Mortgage-backed securities		-		446,065		-		446,065
Collateralized mortgage obligations		-		1,710		-		1,710
Corporate debt securities		-		80,906		-		80,906
Mutual funds		6,271		-		-		6,271
Preferred stock of government sponsored entities		8,087		-		-		8,087
Other equity securities		20,659		-		-		20,659
Total securities available-for-sale		434,453		934,034		-		1,368,487
Warrants		-		-		97		97
Foreign exchange contracts		-		1,725		-		1,725
Interest rate swaps		-		2,314		-		2,314
Total assets	$	434,453	$	938,073	$	97	$	1,372,623
Liabilities
Option contracts	$	-	$	234	$	-	$	234
Foreign exchange contracts		-		1,083		-		1,083
Interest rate swaps		-		5,049		-		5,049
Total liabilities	$	-	$	6,366	$	-	$	6,366

December 31, 2016	Fair Value Measurements Using						Total at
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Assets
Securities available-for-sale
U.S. Treasury securities	$	489,017	$	-	$	-	$	489,017
U.S. government sponsored entities		-		390,331		-		390,331
Mortgage-backed securities		-		336,260		-		336,260
Collateralized mortgage obligations		-		28		-		28
Corporate debt securities		-		74,350		-		74,350
Mutual funds		6,230		-		-		6,230
Preferred stock of government sponsored entities		7,308		-		-		7,308
Other equity securities		10,821		-		-		10,821
Total securities available-for-sale		513,376		800,969		-		1,314,345
Warrants		-		-		79		79
Interest rate swaps		-		938		-		938
Foreign exchange contracts		-		1,302		-		1,302
Total assets	$	513,376	$	803,209	$	79	$	1,316,664
Liabilities
Option contracts	$	-	$	121	$	-	$	121
Interest rate swaps		-		3,744		-		3,744
Foreign exchange contracts		-		3,132		-		3,132
Total liabilities	$	-	$	6,997	$	-	$	6,997

The Company measured the fair value of its warrants on a recurring basis using significant unobservable inputs. The fair value of warrants was $

97,000

as of

September 30, 2017,

compared to

$79,000

as of

December 31, 2016.

The fair value adjustment of warrants was included in other operating income in the

third

quarter of

2017.

The significant unobservable inputs in the Black-Scholes option pricing model for the fair value of warrants are their expected life ranging from

1

to

6

years, risk-free interest rate from

1.51%

to

2.28%,

and stock volatility from

5.05%

to

12.6%.

For financial assets measured at fair value on a nonrecurring basis that were still reflected in the

condensed consolidated balance sheet as of

September 30, 2017,

the following tables provide the level of valuation assumptions used to determine each adjustment, the carrying value of the related individual assets as of

September 30, 2017,

and

December 31, 2016,

and the total losses for the periods indicated:

	September 30, 2017								Total (Gains)/Losses
	Fair Value Measurements Using						Total at		Three Months Ended					Nine Months Ended
	Level 1		Level 2		Level 3		Fair Value		September 30, 2017		September 30, 2016			September 30, 2017		September 30, 2016
	(In thousands)
Assets
Impaired loans by type:
Commercial loans	$	-	$	-	$	12,525	$	12,525	$	-	$	-		$	25	$	-
Commercial mortgage loans		-		-		21,997		21,997		-		-			-		-
Residential mortgage loans and equity lines		-		-		10,790		10,790		-		-			-		-
Total impaired loans		-		-		45,312		45,312		-		-			25		-
Other real estate owned (1)		-		6,317		4,322		10,639		405		(206	)		654		9
Investments in venture capital and private company stock		-		-		3,023		3,023		12		187			365		419
Total assets	$	-	$	6,317	$	52,657	$	58,974	$	417	$	(19	)	$	1,044	$	428

(

1

) Other real estate owned balance of

$18.1

million in the condensed consolidated balance sheet is net of estimated disposal costs.

	December 31, 2016								Total Losses
	Fair Value Measurements Using						Total at		Twelve Months Ended
	Level 1		Level 2		Level 3		Fair Value		December 31, 2016		December 31, 2015
	(In thousands)
Assets
Impaired loans by type:
Commercial loans	$	-	$	-	$	2,813	$	2,813	$	322	$	806
Commercial mortgage loans		-		-		9,444		9,444		-		598
Residential mortgage loans and equity lines		-		-		11,679		11,679		-		146
Total impaired loans		-		-		23,936		23,936		322		1,550
Other real estate owned (1)		-		6,006		4,372		10,378		9		404
Investments in venture capital and private company stock		-		-		3,667		3,667		976		553
Total assets	$	-	$	6,006	$	31,975	$	37,981	$	1,307	$	2,507

(

1

) Other real estate owned balance of

$20.1

million in the condensed consolidated balance sheet is net of estimated disposal costs.

The significant unobservable (Level

3

) inputs used in the fair value measurement of collateral for colla

teral-dependent impaired loans was primarily based on the appraised value of collateral adjusted by estimated sales cost and commissions. The Company generally obtains new appraisal reports every

nine

months. As the Company’s primary objective in the event of default would be to monetize the collateral to settle the outstanding balance of the loan, less marketable collateral would receive a larger discount. During the reported periods, collateral discounts ranged from

55%

in the case of accounts receivable collateral to

65%

in the case of inventory collateral.

The significant unobservable inputs used in the fair value measurement

of loans held for sale was primarily based on the quoted price or sale price adjusted by estimated sales cost and commissions.

The signif

icant unobservable inputs used in the fair value measurement of other real estate owned (“OREO”) was primarily based on the appraised value of OREO adjusted by estimated sales cost and commissions. The Company applies estimated sales cost and commissions ranging from

3%

to

6%

of the collateral value of impaired loans, quoted price, or loan sale price of loans held for sale, and appraised value of OREO.

XML

Note 13 - Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Fair Value Disclosures [Text Block]

1

3

. Fair Value of Financial Instruments

The Company uses the following methods and assumptions to estimate the fair value of each class of financial instruments.

Cash and Cash Equivalents.

For cash and cash equivalents, the carrying amount was assumed to be a reasonable estimate of fair value, a Level

1

measurement.

Short-term Investments.

For short-term investments, the carrying amount was assumed to be a reasonable estimate of fair value, a Level

1

measurement.

Securities Purchased under Agreements to Resell

.

The fair value of securities purchased under agreements to resell is based on dealer quotes, a Level

2

measurement.

Securities.

For securities, including securities held-to-maturity, available-for-sale, and for trading, fair values were based on quoted market prices at the reporting date. If a quoted market price was

not

available, fair value was estimated using quoted market prices for similar securities or dealer quotes. For certain actively traded agency preferred stock, U.S. Treasury securities, and other equity securities, the Company measures the fair value based on quoted market prices in active exchange markets at the reporting date, a Level

1

measurement. The Company also measures securities by using quoted market prices for similar securities or dealer quotes, a Level

2

measurement. This category generally includes U.S. Government agency securities, state and municipal securities, mortgage-backed securities (“MBS”), commercial MBS, collateralized mortgage obligations, asset-backed securities, and corporate bonds.

Loans

H

eld for

S

ale

. The Company records loans held for sale at fair value based on quoted prices from

third

party sources, or appraisal reports adjusted by sales commission assumptions

.

Loans.

Fair values were estimated for portfolios of loans with similar financial characteristics. Each loan category was further segmented into fixed and adjustable rate interest terms and by performing and non-performing categories.

The fair value of performing loans was calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the loan, a Level

3

measurement.

The fair value of impaired loans was calculated based on

the net realizable fair value of the collateral or the observable market price of the most recent sale or quoted price from loans held for sale. The Company does

not

record loans at fair value on a recurring basis. Nonrecurring fair value adjustments to collateral dependent impaired loans are recorded based on the current appraised value or adjusted appraised value of the collateral, a Level

2

or Level

3

measurement.

Deposit Liabilities.

The fair value of demand deposits, savings accounts, and certain money market deposits was assumed to be the amount payable on demand at the reporting date. The fair value of fixed-maturity certificates of deposit was estimated using the rates currently offered for deposits with similar remaining maturities, a Level

3

measurement.

Securities Sold under Agreements to Repurchase.

The fair value of securities sold under agreements to repurchase is based on dealer quotes, a Level

2

measurement.

Advances from Federal Home Loan Bank

(“FHLB”)

.

The fair value of the advances is based on quotes from the FHLB to settle the advances, a Level

2

measurement.

Other Borrowings.

This category includes borrowings from other financial institutions.  The fair value of other borrowings is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk, a Level

3

measurement. 

Long-term

D

ebt.

The fair value of long-term debt is estimated based on the quoted market prices or dealer quotes, a Level

2

measurement.

Currency Option and

Foreign Exchange Contracts

. The Company measures the fair value of currency option and foreign exchange contracts based on dealer quotes, a Level

2

measurement.

Interest Rate Swaps

. Fair value of interest rate swaps is derived from

third

party models with observable market data, a Level

2

measurement.

Off-Balance-Sheet Financial Instruments.

The fair value of commitments to extend credit, standby letters of credit, and financial guarantees written were estimated using the fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the present creditworthiness of the counterparties. The fair value of guarantees and letters of credit was based on fees currently charged for similar agreements or on the estimated cost to terminate them or otherwise settle the obligations with the counterparties at the reporting date. The fair value of off-balance-sheet financial instruments was based on the assumptions that a market participant would use, a Level

3

measurement.

Fair value was estimated in accordance with ASC Topic

825.

Fair value estimates were made at specific points in time, based on relevant market information and information about the financial instrument. These estimates do

not

reflect any premium or discount that could result from offering for sale at

one

time the Bank

’s entire holdings of a particular financial instrument. Because

no

market exists for a significant portion of the Bank’s financial instruments, fair value estimates were based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates were subjective in nature and involved uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

The following table presents the

carrying and notional amounts and estimated fair value of financial instruments as of

September 30, 2017,

and as of

December 31, 2016:

	September 30, 2017				December 31, 2016
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
	(In thousands)
Financial Assets
Cash and due from banks	$	167,886	$	167,886	$	218,017	$	218,017
Short-term investments		573,059		573,059		967,067		967,067
Securities available-for-sale		1,368,487		1,368,487		1,314,345		1,314,345
Loans held for sale		-		-		7,500		7,500
Loans, net		12,472,475		12,403,100		11,077,315		11,006,344
Investment in Federal Home Loan Bank stock		21,948		21,948		17,250		17,250
Investment in Federal Reserve Bank stock		8,733		8,733		-		-
Warrants		97		97		79		79

	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Foreign exchange contracts	$	69,278	$	1,725	$	82,439	$	1,302
Interest rate swaps		155,671		2,314		361,526		938

	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial Liabilities
Deposits	$	12,561,695	$	12,573,127	$	11,674,726	$	11,680,017
Securities sold under agreements to repurchase		100,000		100,549		350,000		351,989
Advances from Federal Home Loan Bank		595,000		595,037		350,000		350,062
Other borrowings		153,574		151,643		17,662		15,944
Long-term debt		119,136		68,056		119,136		63,169

	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Option contracts	$	12,307	$	234	$	12,117	$	121
Foreign exchange contracts		86,625		1,083		89,545		3,132
Interest rate swaps		510,841		5,049		119,136		3,744

	Notional					Notional
	Amount		Fair Value			Amount		Fair Value
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	2,287,498	$	(6,924	)	$	2,062,241	$	(6,025	)
Standby letters of credit		140,682		(1,699	)		75,396		(668	)
Other letters of credit		41,868		(218	)		37,283		(16	)
Bill of lading guarantees		24		-			75		-

The following table

s present the level in the fair value hierarchy for the estimated fair values of financial instruments as of

September 30, 2017,

and

December 31, 2016.

	September 30, 2017
	Estimated
	Fair Value
	Measurements		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets
Cash and due from banks	$	167,886	$	167,886	$	-	$	-
Short-term investments		573,059		573,059		-		-
Securities available-for-sale		1,368,487		434,453		934,034		-
Loans held-for-sale		-		-		-		-
Loans, net		12,403,100		-		-		12,403,100
Investment in Federal Home Loan Bank stock		21,948		-		21,948		-
Investment in Federal Reserve Bank stock		8,733		-		8,733		-
Warrants		97		-		-		97
Financial Liabilities
Deposits		12,573,127		-		-		12,573,127
Securities sold under agreements to repurchase		100,549		-		100,549		-
Advances from Federal Home Loan Bank		595,037		-		595,037		-
Other borrowings		151,643		-		-		151,643
Long-term debt		68,056		-		68,056		-

	December 31, 2016
	Estimated
	Fair Value
	Measurements		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets
Cash and due from banks	$	218,017	$	218,017	$	-	$	-
Short-term investments		967,067		967,067		-		-
Securities available-for-sale		1,314,345		513,376		800,969		-
Loans held-for-sale		7,500		-		-		7,500
Loans, net		11,006,344		-		-		11,006,344
Investment in Federal Home Loan Bank stock		17,250		-		17,250		-
Warrants		79		-		-		79
Financial Liabilities
Deposits		11,680,017		-		-		11,680,017
Securities sold under agreements to repurchase		351,989		-		351,989		-
Advances from Federal Home Loan Bank		350,062		-		350,062		-
Other borrowings		15,944		-		-		15,944
Long-term debt		63,169		-		63,169		-

XML

Note 14 - Goodwill and Goodwill Impairment

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Goodwill and Intangible Assets Disclosure [Text Block]

1

4

. Goodwill and Goodwill Impairment

The Company

’s policy is to assess goodwill for impairment at the reporting unit level on an annual basis or between annual assessments if a triggering event occurs or circumstances change that would more likely than

not

reduce the fair value of a reporting unit below its carrying amount.  Impairment is the condition that exists when the carrying amount of goodwill exceeds its implied fair value.  

The Company

first

assesses qualitative factors to determine whether it is more likely than

not

that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the

two

-step goodwill impairment test described in ASC Topic

350.

The

two

-step impairment testing process, if needed, begins by assigning net assets and goodwill to our

two

reporting units

—

Commercial Lending and Retail Banking.  The Company then completes “step one” of the impairment test by comparing the fair value of each reporting unit (as determined based on the discussion below) with the recorded book value (or “carrying amount”) of its net assets, with goodwill included in the computation of the carrying amount.  If the fair value of a reporting unit exceeds its carrying amount, goodwill of that reporting unit is

not

considered impaired, and “step two” of the impairment test is

not

necessary.  If the carrying amount of a reporting unit exceeds its fair value, step

two

of the impairment test is performed to determine the amount of impairment.  Step

two

of the impairment test compares the carrying amount of the reporting unit’s goodwill to the “implied fair value” of that goodwill.  The implied fair value of goodwill is computed by assuming that all assets and liabilities of the reporting unit would be adjusted to the current fair value, with the offset as an adjustment to goodwill.  This adjusted goodwill balance is the implied fair value used in step two.  An impairment charge is recognized for the amount by which the carrying amount of goodwill exceeds its implied fair value.

A

s of

September 30, 2017,

the Company’s market capitalization was above book value and there was

no

triggering event that required the Company to assess goodwill for impairment as of an interim date.

XML

Note 15 - Financial Derivatives

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Derivative Instruments and Hedging Activities Disclosure [Text Block]

1

5

. Financial Derivatives

It is the policy of the Company

not

to speculate on the future direction of interest rates. However, the Company enters into financial derivatives in order to seek mitigation of exposure to interest rate risks r

elated to our interest-earning assets and interest-bearing liabilities. We believe that these transactions, when properly structured and managed,

may

provide a hedge against inherent interest rate risk in the Company’s assets or liabilities and against risk in specific transactions. In such instances, the Company

may

enter into interest rate swap contracts or other types of financial derivatives. Prior to considering any hedging activities, we seek to analyze the costs and benefits of the hedge in comparison to other viable alternative strategies. All hedges must be approved by the Bank’s Investment Committee.

The Company follows

ASC Topic

815

that establishes accounting and reporting standards for financial derivatives, including certain financial derivatives embedded in other contracts, and hedging activities. It requires the recognition of all financial derivatives as assets or liabilities in the Company’s consolidated balance sheet and measurement of those financial derivatives at fair value. The accounting treatment of changes in fair value is dependent upon whether or

not

a financial derivative is designated as a hedge and, if so, the type of hedge. Fair value is determined using

third

-party models with observable market data. For derivatives designated as cash flow hedges, changes in fair value are recognized in other comprehensive income and are reclassified to earnings when the hedged transaction is reflected in earnings. For derivatives designated as fair value hedges, changes in the fair value of the derivatives are reflected in current earnings, together with changes in the fair value of the related hedged item if there is a highly effective correlation between changes in the fair value of the interest rate swaps and changes in the fair value of the underlying asset or liability that is intended to be hedged. If there is

not

a highly effective correlation between changes in the fair value of the interest rate swap and changes in the fair value of the underlying asset or liability that is intended to be hedged, then only the changes in the fair value of the interest rate swaps are reflected in the Company’s consolidated financial statements.

I

n

May 2014,

Bancorp entered into interest rate swap contracts in the notional amount of

$119.1

million for a period of

ten

years. The objective of these interest rate swap contracts, which were designated as hedging instruments in cash flow hedges, was to hedge on Bancorp’s

$119.1

million of Junior Subordinated Debentures that had been issued to

five

trusts, with the quarterly interest payments throughout the

ten

-year period beginning in

June 2014

and ending in

June 2024,

from the risk of variability of these payments resulting from changes in the

three

-month LIBOR interest rate. Bancorp pays a weighted average fixed interest rate of

2.61%

and receives a variable interest rate of the

three

-month LIBOR at a weighted average rate of

1.32%.

As of

September 30, 2017,

the notional amount of cash flow interest rate swaps was

$119.1

million and their unrealized loss of

$2.3

million, net of taxes, was included in other comprehensive income. The amount of periodic net settlement of interest rate swaps included in interest expense was

$407,000

for the

three

months ended

September 30, 2017

compared to

$588,000

for the same quarter a year ago. For the

nine

months ended

September 30, 2017,

the periodic net settlement of interest rate swaps included in interest expense was

$1.3

million compared to

$1.8

million for the same period in

2016.

As of

September

30,

2017,

the Bank has entered into interest rate swap contracts with various terms from

four

to

eight

years. These interest rate swap contracts are matched to individual fixed-rate commercial real estate loans in the Bank’s loan portfolio. These contracts have been designated as hedging instruments to hedge the risk of changes in the fair value of the underlying commercial real estate loan due to changes in interest rates. The swap contracts are structured so that the notional amounts reduce over time to match the contractual amortization of the underlying loan and allow prepayments with the same pre-payment penalty amounts as the related loan. The Bank pays a weighted average fixed rate of

4.55%

and receives a variable rate at the

one

month LIBOR rate plus a weighted average spread of

293

basis points, or at a weighted average rate of

4.16%.

As of

September 30, 2017,

the notional amount of fair value interest rate swaps was

$510.6

million and their unrealized gain of

$1.9

million was included in other non-interest income. The amount of periodic net settlement of interest rate swaps reducing interest income was

$514,000

for the

three

months ended

September 30, 2017,

compared to

$879,000

for the same quarter a year ago. The amount of periodic net settlement of interest rate swaps reducing interest income was

$1.9

million for the

nine

months ended

September 30, 2017,

compared to

$2.8

million for the same period a year ago. As of

September 30, 2017,

the ineffective portion of these interest rate swaps was

not

significant.

Interest rate swap contracts involve the risk of dealing with institutional derivative counterparties and their ability to meet contractual terms. Institutional counterparties must have a

strong credit profile and be approved by the Company’s Board of Directors. The Company’s credit exposure on interest rate swaps is limited to the net favorable value and interest payments of all swaps by each counterparty. Credit exposure

may

be reduced by the amount of collateral pledged by the counterparty. Bancorp’s interest rate swaps have been assigned by the counterparties to a derivatives clearing organization and daily margin is indirectly maintained with the derivatives clearing organization. Cash posted as collateral by Bancorp related to derivative contracts totaled

$6.3

million as of

September 30, 2017.

The Company enters into foreign exchange forward contracts with

various counterparties to mitigate the risk of fluctuations in foreign currency exchange rates for foreign exchange certificates of deposit or foreign exchange contracts entered into with our clients. These contracts are

not

designated as hedging instruments and are recorded at fair value in our condensed consolidated balance sheets. Changes in the fair value of these contracts as well as the related foreign exchange certificates of deposit and foreign exchange contracts are recognized immediately in net income as a component of non-interest income. Period end gross positive fair values are recorded in other assets and gross negative fair values are recorded in other liabilities. As of

September 30, 2017,

the notional amount of option contracts totaled

$12.3

million with a net negative fair value of

$234,000.

As of

September 30, 2017,

spot, forward, and swap contracts with a total notional amount of

$69.3

million had a positive fair value of

$1.7

million. Spot, forward, and swap contracts with a total notional amount of

$86.6

million had a negative fair value of

$1.1

million as of

September 30, 2017.

As of

December 31, 2016,

the notional amount of option contracts totaled

$12.1

million with a net negative fair value of

$121,000.

As of

December 31, 2016,

spot, forward, and swap contracts with a total notional amount of

$82.4

million had a positive fair value of

$1.3

million. Spot, forward, and swap contracts with a total notional amount of

$89.5

million had a negative fair value of

$3.1

million as of

December 31, 2016.

XML

Note 16 - Balance Sheet Offsetting

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Supplemental Balance Sheet Disclosures [Text Block]

1

6

. Balance Sheet Offsetting

Certain financial instruments, including resell and repurchase agreements, securities lending arrangements and derivatives,

may

be eligible for offset in the

condensed consolidated balance sheets and/or subject to master netting arrangements or similar agreements. The Company’s securities sold with agreements to repurchase and derivative transactions with upstream financial institution counterparties are generally executed under International Swaps and Derivative Association master agreements that include “right of set-off” provisions. In such cases, there is generally a legally enforceable right to offset recognized amounts and there

may

be an intention to settle such amounts on a net basis. Nonetheless, the Company does

not

generally offset such financial instruments for financial reporting purposes.

Financial instruments that are eligible for offset in the

condensed consolidated balance sheets, as of

September 30, 2017,

and

December 31, 2016,

are presented in the following table:

							Gross Amounts Not Offset in the Balance Sheet
	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Collateral Posted			Net Amount
September 30, 2017	(In thousands)
Assets:
Derivatives	$	2,314	$	-	$	2,314	$	-	$	-		$	2,314
Liabilities:
Securities sold under agreements to repurchase	$	100,000	$	-	$	100,000	$	-	$	(100,000	)	$	-
Derivatives	$	5,049	$	-	$	5,049	$	-	$	(5,049	)	$	-
December 31, 2016
Assets:
Derivatives	$	938	$	-	$	938	$	-	$	-		$	938
Liabilities:
Securities sold under agreements to repurchase	$	350,000	$	-	$	350,000	$	-	$	(350,000	)	$	-
Derivatives	$	3,744	$	-	$	3,744	$	-	$	(3,744	)	$	-

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Note 17 - Stockholders' Equity

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Stockholders' Equity Note Disclosure [Text Block]

1

7

.

Stockholders’ Equity

Total equity was $

2.0

billion as of

September 30, 2017,

an increase of

$140.2

million, from

$1.8

billion as of

December 31, 2016,

primarily due to net income of

$150.1

million and equity consideration for the acquisition of SinoPac Bancorp of

$34.9

million partially offset by common stock cash dividends of

$50.5

million and shares withheld related to net share settlement of RSUs of

$5.1

million.

The U.S. Treasury received warrants to purchase common stock of

1,846,374

shares at an exercise price of

$20.96

as part of the Company

’s participation in the U.S. Treasury Troubled Asset Relief Program Capital Purchase Program. As a result of the anti-dilution adjustments under the warrant, the exercise price at

December 31, 2016

has been adjusted to

$20.65

and the number of warrants increased by

1.5%.

At

September 30, 2017,

932,461

warrants remain exercisable compared to

943,345

warrants at

December 31, 2016.

Activity

in accumulated other comprehensive income, net of tax, and reclassification out of accumulated other comprehensive income for the

three

months and

nine

months ended

September 30, 2017,

and

September 30, 2016,

was as follows:

	Three months ended September 30, 2017									Three months ended September 30, 2016
	Pre-tax			Tax expense/ (benefit)			Net-of-tax			Pre-tax			Tax expense/ (benefit)			Net-of-tax
	(In thousands)
Beginning balance, loss, net of tax
Securities available-for-sale							$	1,001								$	8,539
Cash flow hedge derivatives								(2,421	)								(7,397	)
Total							$	(1,420	)							$	1,142
Net unrealized (losses)/gains arising during the period
Securities available-for-sale	$	1,829		$	769		$	1,060		$	1,618		$	680		$	938
Cash flow hedge derivatives		271			114			157			1,387			583			804
Total		2,100			883			1,217			3,005			1,263		$	1,742
Reclassification adjustment for net losses in net income
Securities available-for-sale		(24	)		(10	)		(14	)		(1,692	)		(711	)		(981	)
Cash flow hedge derivatives		-			-			-			-			-			-
Total		(24	)		(10	)		(14	)		(1,692	)		(711	)		(981	)
Total other comprehensive (loss)/income
Securities available-for-sale		1,805			759			1,046			(74	)		(31	)		(43	)
Cash flow hedge derivatives		271			114			157			1,387			583			804
Total	$	2,076		$	873		$	1,203		$	1,313		$	552		$	761
Ending balance, (loss)/gain, net of tax
Securities available-for-sale							$	2,047								$	8,496
Cash flow hedge derivatives								(2,264	)								(6,593	)
Total							$	(217	)							$	1,903

	Nine months ended September 30, 2017									Nine months ended September 30, 2016
	Pre-tax			Tax expense/ (benefit)			Net-of-tax			Pre-tax			Tax expense/ (benefit)			Net-of-tax
	(In thousands)
Beginning balance, loss, net of tax
Securities available-for sale							$	(1,545	)							$	(5,431	)
Cash flow hedge derivatives								(2,170	)								(2,995	)
Total							$	(3,715	)							$	(8,426	)
Net unrealized gains/(losses) arising during the period
Securities available-for sale	$	5,759		$	2,421		$	3,338		$	27,170		$	11,422		$	15,748
Cash flow hedge derivatives		(162	)		(68	)		(94	)		(6,208	)		(2,610	)		(3,598	)
Total		5,597			2,353			3,244			20,962			8,812		$	12,150
Reclassification adjustment for net (gains)/losses in net income
Securities available-for sale		439			185			254			(3,141	)		(1,320	)		(1,821	)
Cash flow hedge derivatives		-			-			-			-			-			-
Total		439			185			254			(3,141	)		(1,320	)		(1,821	)
Total other comprehensive income/(loss)
Securities available-for sale		6,198			2,606			3,592			24,029			10,102			13,927
Cash flow hedge derivatives		(162	)		(68	)		(94	)		(6,208	)		(2,610	)		(3,598	)
Total	$	6,036		$	2,538		$	3,498		$	17,821		$	7,492		$	10,329
Ending balance, gain/(loss), net of tax
Securities available-for sale							$	2,047								$	8,496
Cash flow hedge derivatives								(2,264	)								(6,593	)
Total							$	(217	)							$	1,903

XML

Note 18 - Stock Repurchase Program

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Treasury Stock [Text Block]

1

8.

Stock Repurchase Program

On

February 1, 2016,

the

Company’s Board of Directors approved a new stock repurchase program to buy back up to

$45.0

million of our common stock. In

2016,

the Company repurchased

1,380,578

shares for

$37.5

million, or

$27.13

per share under the

February 2016

repurchase program. The Company did

not

repurchase any shares under the

February 2016

repurchase program for the

nine

months ended

September 30, 2017.

As of

September 30, 2017

and

December 31, 2016,

the Company

may

repurchase up to

$7.5

million of its common stock under the

February 2016

repurchase program.

XML

Note 19 - Subsequent Events

9 Months Ended

Sep. 30, 2017

Notes to Financial Statements

Subsequent Events [Text Block]

1

9

. S

ubsequent

E

vents

The

Company has evaluated the effect of the following events that have occurred subsequent to the quarter ended

September 30, 2017

through the date of issuance of the accompanying condensed consolidated financial statements.

The

Bank received final regulatory approval and the merger of Far East National Bank into Cathay Bank was completed on

October 27, 2017. 

Each of the

nine

former FENB branches in California and its representative office in Beijing became a branch and representative office of Cathay Bank as a result of the merger.  As of the filing date of this report, Cathay Bank operates

43

branches in California,

12

branches in New York State,

three

in the Chicago, Illinois area,

three

in Washington State,

two

in Texas,

one

in Maryland,

one

in Massachusetts,

one

in Nevada,

one

in New Jersey,

one

in Hong Kong, and a representative office in Taipei, Shanghai, and Beijing.

XML

Note 2 - Business Combinations (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block]

	SinoPac Bancorp
Assets acquired:
Cash and cash equivalents	$	166,932
Short-term investments		122,000
Securities available-for-sale		107,934
Loans		703,787
Premises and equipment		6,198
Cash surrender value of life insurance		46,083
Deferred tax assets, net		40,136
Core deposit intangible		7,144
Accrued interest receivable and other assets		9,134
Total assets acquired		1,209,348
Liabilities assumed:
Deposits		813,888
Long-term debt		30,000
Accrued interest payable and other liabilities		5,608
Total liabilities assumed		849,496
Net assets acquired	$	359,852
Cash paid	$	181,241
Fair value of common stock issued		34,862
Total consideration paid	$	216,103
Purchase price payable to SinoPac		138,309
Total consideration	$	354,412
Gains on bargain purchase	$	5,440

XML

Note 5 - Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Earnings Per Share, Basic and Diluted [Table Text Block]

	Three months ended September 30,				Nine months ended September 30,
(Dollars in thousands, except share and per share data)	2017		2016		2017		2016
Net income	$	49,746	$	46,090	$	150,102	$	127,084
Weighted-average shares:
Basic weighted-average number of common shares outstanding		80,665,398		78,865,860		80,073,249		79,147,839
Dilutive effect of weighted-average outstanding common share equivalents
Warrants		399,957		569,949		409,019		520,686
Options		19,221		95,850		25,706		90,461
Restricted stock units		320,278		165,410		289,205		143,860
Diluted weighted-average number of common shares outstanding		81,404,854		79,697,069		80,797,179		79,902,846
Average stock options and warrants with anti-dilutive effect		0		207,183		6,561		247,974
Earnings per common share:
Basic	$	0.62	$	0.58	$	1.87	$	1.61
Diluted	$	0.61	$	0.58	$	1.86	$	1.59

XML

Note 6 - Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Share-based Compensation, Stock Options, Activity [Table Text Block]

						Weighted-average		Aggregate
				Weighted-average		Remaining Contractual		Intrinsic
	Shares			Exercise Price		Life (in years)		Value (in thousands)
Balance, December 31, 2016		82,670		$	23.37		1.1	$	1,211
Exercised		(18,040	)		23.37
Balance, March 31, 2017		64,630		$	23.37		0.9	$	925
Exercised		(19,500	)		23.37
Balance, June 30, 2017		45,130		$	23.37		0.7	$	658
Exercised		(6,000	)		23.37
Balance, September 30, 2017		39,130		$	23.37		0.4	$	659
Exercisable, September 30, 2017		39,130		$	23.37		0.4	$	659

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

	Units
Balance at December 31, 2016		727,419
Granted		164,404
Distributed		(297,905	)
Forfeited		(10,424	)
Balance at September 30, 2017		583,494

XML

Note 7 - Investment Securities (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Available-for-sale Securities Reconciliation [Table Text Block]

	September 30, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	399,741	$	-	$	305	$	399,436
U.S. government agency entities		9,679		27		6		9,700
U.S. government sponsored entities		400,000		-		6,278		393,722
State and municipal securities		1,943		-		12		1,931
Mortgage-backed securities		447,959		468		2,362		446,065
Collateralized mortgage obligations		1,715		-		5		1,710
Corporate debt securities		80,007		904		5		80,906
Mutual funds		6,500		-		229		6,271
Preferred stock of government sponsored entities		4,117		3,970		-		8,087
Other equity securities		13,294		7,463		98		20,659
Total	$	1,364,955	$	12,832	$	9,300	$	1,368,487

	December 31, 2016
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses		Fair Value
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	489,839	$	35	$	857	$	489,017
U.S. government sponsored entities		400,000		-		9,669		390,331
Mortgage-backed securities		339,241		309		3,290		336,260
Collateralized mortgage obligations		48		-		20		28
Corporate debt securities		74,965		247		862		74,350
Mutual funds		6,500		-		270		6,230
Preferred stock of government sponsored entities		2,811		4,497		-		7,308
Other equity securities		3,608		7,213		-		10,821
Total	$	1,317,012	$	12,301	$	14,968	$	1,314,345

Investments Classified by Contractual Maturity Date [Table Text Block]

	Securities Available-For-Sale
	Amortized cost		Fair value
	(In thousands)
Due in one year or less	$	415,782	$	415,555
Due after one year through five years		465,328		459,924
Due after five years through ten years		8,658		8,647
Due after ten years (1)		475,187		484,361
Total	$	1,364,955	$	1,368,487

Schedule of Unrealized Loss on Investments [Table Text Block]

	September 30, 2017
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	339,707	$	46	$	49,729	$	259	$	389,436	$	305
U.S. government sponsored entities		395,774		6,284		-		-		395,774		6,284
State and municipal securities		1,931		12		-		-		1,931		12
Mortgage-backed securities		359,112		2,359		122		3		359,234		2,362
Collateralized mortgage obligations		1,710		5		-		-		1,710		5
Corporate debt securities		5,029		5		-		-		5,029		5
Mutual funds		-		-		6,271		229		6,271		229
Other equity securities		4,680		98		-		-		4,680		98
Total	$	1,107,943	$	8,809	$	56,122	$	491	$	1,164,065	$	9,300

	December 31, 2016
	Temporarily impaired securities
	Less than 12 months				12 months or longer				Total
	Fair		Unrealized		Fair		Unrealized		Fair		Unrealized
	Value		Losses		Value		Losses		Value		Losses
	(In thousands)
Securities Available-for-Sale
U.S. treasury securities	$	299,088	$	857	$	-	$	-	$	299,088	$	857
U.S. government sponsored entities		390,331		9,669		-		-		390,331		9,669
Mortgage-backed securities		328,236		3,288		62		2		328,298		3,290
Collateralized mortgage obligations		-		-		28		20		28		20
Corporate debt securities		-		-		29,138		862		29,138		862
Mutual funds		-		-		6,230		270		6,230		270
Total	$	1,017,655	$	13,814	$	35,458	$	1,154	$	1,053,113	$	14,968

XML

Note 8 - Loans (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block]

	September 30, 2017			December 31, 2016
	(In thousands)
Commercial loans	$	2,419,891		$	2,248,187
Residential mortgage loans		2,922,537			2,444,048
Commercial mortgage loans		6,377,047			5,785,248
Real estate construction loans		691,486			548,088
Equity lines		181,751			171,711
Installment & other loans		4,722			3,993
Gross loans	$	12,597,434		$	11,201,275
Allowance for loan losses		(121,535	)		(118,966	)
Unamortized deferred loan fees		(3,424	)		(4,994	)
Total loans, net	$	12,472,475		$	11,077,315
Loans held for sale	$	-		$	7,500

Impaired Financing Receivables [Table Text Block]

	Impaired Loans
	Average Recorded Investment								Interest Income Recognized
	Three months ended				Nine months ended				Three months ended				Nine months ended
	September 30,				September 30,				September 30,				September 30,
	2017		2016		2017		2016		2017		2016		2017		2016
					(In thousands)
Commercial loans	$	24,987	$	28,091	$	22,572	$	18,602	$	678	$	170	$	760	$	488
Real estate construction loans		29,780		5,869		29,868		12,005		99		66		287		196
Commercial mortgage loans		58,555		81,005		60,074		86,456		391		776		1,015		2,124
Residential mortgage loans and equity lines		13,937		18,256		15,208		17,456		96		148		287		401
Total impaired loans	$	127,259	$	133,221	$	127,722	$	134,519	$	1,264	$	1,160	$	2,349	$	3,209

Schedule Of Impaired Loans And Related Allowance And Charge Off [Table Text Block]

	Impaired Loans
	September 30, 2017						December 31, 2016
	Unpaid Principal Balance		Recorded Investment		Allowance		Unpaid Principal Balance		Recorded Investment		Allowance
	(In thousands)
With no allocated allowance
Commercial loans	$	23,953	$	23,373	$	-	$	24,037	$	23,121	$	-
Real estate construction loans		22,309		21,748		-		5,776		5,458		-
Commercial mortgage loans		39,154		32,370		-		60,522		54,453		-
Residential mortgage loans and equity lines		2,264		2,264		-		5,472		5,310		-
Subtotal	$	87,680	$	79,755	$	-	$	95,807	$	88,342	$	-
With allocated allowance
Commercial loans	$	14,082	$	13,985	$	1,461	$	5,216	$	4,640	$	1,827
Commercial mortgage loans		23,061		22,820		823		10,158		10,017		573
Residential mortgage loans and equity lines		12,461		11,111		322		13,263		12,075		396
Subtotal	$	49,604	$	47,916	$	2,606	$	28,637	$	26,732	$	2,796
Total impaired loans	$	137,284	$	127,671	$	2,606	$	124,444	$	115,074	$	2,796

Past Due Financing Receivables [Table Text Block]

	September 30, 2017
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
Type of Loans:	(In thousands)
Commercial loans	$	8,412	$	14,855	$	3,900	$	15,942	$	43,109	$	2,376,782	$	2,419,891
Real estate construction loans		-		-		-		14,267		14,267		677,219		691,486
Commercial mortgage loans		-		-		-		28,379		28,379		6,348,668		6,377,047
Residential mortgage loans and equity lines		-		89		-		6,725		6,814		3,097,474		3,104,288
Installment and other loans		-		-		-		-		-		4,722		4,722
Total loans	$	8,412	$	14,944	$	3,900	$	65,313	$	92,569	$	12,504,865	$	12,597,434

	December 31, 2016
	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Non-accrual Loans		Total Past Due		Loans Not Past Due		Total
Type of Loans:	(In thousands)
Commercial loans	$	22,753	$	27,190	$	-	$	15,710	$	65,653	$	2,182,534	$	2,248,187
Real estate construction loans		10,390		5,835		-		5,458		21,683		526,405		548,088
Commercial mortgage loans		5,886		700		-		20,078		26,664		5,758,584		5,785,248
Residential mortgage loans and equity lines		4,390		-		-		8,436		12,826		2,602,933		2,615,759
Installment and other loans		-		-		-		-		-		3,993		3,993
Total loans	$	43,419	$	33,725	$	-	$	49,682	$	126,826	$	11,074,449	$	11,201,275

Schedule Of Troubled Debt Restructurings [Table Text Block]

	Three months ended September 30, 2017								September 30, 2017
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		8	$	18,873	$	18,873	$	-	$	636
Commercial mortgage loans		5		4,123		3,818		305		10
Residential mortgage loans and equity lines		1		483		483		-		32
Total		14	$	23,479	$	23,174	$	305	$	678

	Three months ended September 30, 2016								September 30, 2016
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		7	$	18,258	$	18,258	$	-	$	208
Commercial mortgage loans		1		738		738		-		-
Total		8	$	18,996	$	18,996	$	-	$	208

	Nine months ended September 30, 2017								September 30, 2017
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		13	$	19,543	$	19,543	$	-	$	641
Real estate construction loans		2		28,489		28,489		-		-
Commercial mortgage loans		5		4,123		3,818		305		10
Residential mortgage loans and equity lines		1		483		483		-		32
Total		21	$	52,638	$	52,333	$	305	$	683

	Nine months ended September 30, 2016								September 30, 2016
	No. of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Charge-offs		Specific Reserve
	(Dollars in thousands)
Commercial loans		11	$	23,102	$	23,102	$	-	$	222
Commercial mortgage loans		1		738		738		-		-
Residential mortgage loans and equity lines		2		367		367		-		-
Total		14	$	24,207	$	24,207	$	-	$	222

Troubled Debt Restructurings on Financing Receivables [Table Text Block]

	September 30, 2017
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	21,416	$	-	$	-	$	21,416
Real estate construction loans		7,480		-		-		7,480
Commercial mortgage loans		16,130		5,895		4,787		26,812
Residential mortgage loans		3,516		337		2,797		6,650
Total accruing TDRs	$	48,542	$	6,232	$	7,584	$	62,358

	December 31, 2016
Accruing TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	7,971	$	-	$	4,081	$	12,052
Commercial mortgage loans		25,979		5,961		12,452		44,392
Residential mortgage loans		5,104		789		3,056		8,949
Total accruing TDRs	$	39,054	$	6,750	$	19,589	$	65,393

Non Accrual Troubled Debt Restructurings [Table Text Block]

	September 30, 2017
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	13,259	$	-	$	-	$	13,259
Commercial mortgage loans		1,347		1,706		16,508		19,561
Residential mortgage loans		714		-		157		871
Total non-accrual TDRs	$	15,320	$	1,706	$	16,665	$	33,691

	December 31, 2016
Non-accrual TDRs	Payment Deferral		Rate Reduction		Rate Reduction and Payment Deferral		Total
	(In thousands)
Commercial loans	$	14,565	$	-	$	-	$	14,565
Commercial mortgage loans		2,510		1,795		10,328		14,633
Residential mortgage loans		356		-		168		524
Total non-accrual TDRs	$	17,431	$	1,795	$	10,496	$	29,722

Activity Within The Troubled Debt Resturings [Table Text Block]

	Three months ended September 30,						Nine months ended September 30,
Accruing TDRs	2017			2016			2017			2016
	(In thousands)
Beginning balance	$	79,819		$	74,708		$	65,393		$	81,680
New restructurings		21,790			18,347			49,973			20,412
Restructured loans restored to accrual status		-			-			-			10,303
Payments		(35,677	)		(6,500	)		(41,372	)		(9,816	)
Restructured loans placed on non-accrual status		(3,574	)		-			(9,396	)		(1,138	)
Expiration of loan concession upon renewal		-			-			(2,240	)		(14,886	)
Ending balance	$	62,358		$	86,555		$	62,358		$	86,555

	Three months ended September 30,						Nine months ended September 30,
Non-accrual TDRs	2017			2016			2017			2016
	(In thousands)
Beginning balance	$	30,045		$	25,442		$	29,722		$	39,923
New restructurings		2,360			649			2,360			3,794
Restructured loans placed on non-accrual status		3,574			-			9,396			1,138
Charge-offs		(355	)		(3,407	)		(1,901	)		(4,352	)
Payments		(1,933	)		(1,814	)		(5,160	)		(9,330	)
Foreclosures		-			-			(726	)		-
Restructured loans restored to accrual status		-			-			-			(10,303	)
Ending balance	$	33,691		$	20,870		$	33,691		$	20,870

Financing Receivable Credit Quality Indicators [Table Text Block]

	September 30, 2017
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
Commercial loans	$	2,216,816	$	146,479	$	56,565	$	31	$	2,419,891
Real estate construction loans		604,363		65,375		21,748		-		691,486
Commercial mortgage loans		5,904,023		305,927		167,097		-		6,377,047
Residential mortgage loans and equity lines		3,064,118		31,858		8,312		-		3,104,288
Installment and other loans		4,722		-		-		-		4,722
Total gross loans	$	11,794,042	$	549,639	$	253,722	$	31	$	12,597,434
Loans held for sale	$	-	$	-	$	-	$	-	$	-

	December 31, 2016
	Pass/Watch		Special Mention		Substandard		Doubtful		Total
	(In thousands)
Commercial loans	$	2,023,114	$	140,682	$	84,293	$	98	$	2,248,187
Real estate construction loans		469,909		44,129		34,050		-		548,088
Commercial mortgage loans		5,410,623		250,221		124,404		-		5,785,248
Residential mortgage loans and equity lines		2,605,834		-		9,925		-		2,615,759
Installment and other loans		3,993		-		-		-		3,993
Total gross loans	$	10,513,473	$	435,032	$	252,672	$	98	$	11,201,275
Loans held for sale	$	-	$	-	$	7,500	$	-	$	7,500

Allowance for Credit Losses on Financing Receivables [Table Text Block]

Three months ended September 30, 2017 and 2016
				Real Estate			Commercial			Residential			Installment
	Commercial			Construction			Mortgage			Mortgage Loans			and Other
	Loans			Loans			Loans			and Equity Lines			Loans			Total
	(In thousands)
June 30, 2017 Ending Balance	$	46,744		$	17,844		$	36,840		$	14,364		$	17			115,809
Provision/(credit) for possible credit losses		3,800			4,117			(4,615	)		(3,309	)		7			-
Charge-offs		(80	)		-			(305	)		-			-			(385	)
Recoveries		575			47			5,482			7			-			6,111
Net (charge-offs)/recoveries		495			47			5,177			7			-			5,726
September 30, 2017 Ending Balance	$	51,039		$	22,008		$	37,402		$	11,062		$	24		$	121,535
June 30, 2016 Ending Balance	$	50,590		$	10,753		$	46,090		$	15,503		$	12		$	122,948
Provision/(credit) for possible credit losses		4,380			(2,056	)		3,132			(5,452	)		(4	)		-
Charge-offs		(3,277	)		-			(4,626	)		-			-			(7,903	)
Recoveries		2,006			548			337			6			-			2,897
Net (charge-offs)/recoveries		(1,271	)		548			(4,289	)		6			-			(5,006	)
September 30, 2016 Ending Balance	$	53,699		$	9,245		$	44,933		$	10,057		$	8		$	117,942

Nine months ended September 30, 2017 and 2016
				Real Estate			Commercial			Residential			Installment
	Commercial			Construction			Mortgage			Mortgage Loans			and Other
	Loans			Loans			Loans			and Equity Lines			Loans			Total
	(In thousands)
2017 Beginning Balance	$	49,203		$	23,268		$	34,864		$	11,620		$	11		$	118,966
Provision/(credit) for possible credit losses		2,245			(1,403	)		(2,775	)		(580	)		13			(2,500	)
Charge-offs		(1,810	)		-			(860	)		-			-			(2,670	)
Recoveries		1,401			143			6,173			22			-			7,739
Net (charge-offs)/recoveries		(409	)		143			5,313			22			-			5,069
September 30, 2017 Ending Balance	$	51,039		$	22,008		$	37,402		$	11,062		$	24		$	121,535
Reserve for impaired loans	$	1,461		$	-		$	823		$	322		$	-		$	2,606
Reserve for non-impaired loans	$	49,578		$	22,008		$	36,579		$	10,740		$	24		$	118,929
Reserve for off-balance sheet credit commitments	$	2,760		$	1,206		$	109		$	175		$	4		$	4,254
2016 Beginning Balance	$	56,199		$	22,170		$	49,440		$	11,145		$	9		$	138,963
Provision/(credit) for possible credit losses		5,815			(20,796	)		295			(963	)		(1	)		(15,650	)
Charge-offs		(12,035	)		-			(5,681	)		(149	)		-			(17,865	)
Recoveries		3,720			7,871			879			24			-			12,494
Net (charge-offs)/recoveries		(8,315	)		7,871			(4,802	)		(125	)		-			(5,371	)
September 30, 2016 Ending Balance	$	53,699		$	9,245		$	44,933		$	10,057		$	8		$	117,942
Reserve for impaired loans	$	1,320		$	-		$	1,248		$	375		$	-		$	2,943
Reserve for non-impaired loans	$	52,379		$	9,245		$	43,685		$	9,682		$	8		$	114,999
Reserve for off-balance sheet credit commitments	$	2,112		$	-		$	35		$	80		$	2		$	2,229

Impairment Method [Member]

Notes Tables

Impaired Financing Receivables [Table Text Block]

			Real Estate		Commercial		Residential
	Commercial		Construction		Mortgage		Mortgage Loans		Installment and
	Loans		Loans		Loans		and Equity Lines		Other Loans		Total
	(In thousands)
September 30, 2017
Loans individually evaluated for impairment
Allowance	$	1,461	$	-	$	823	$	322	$	-	$	2,606
Balance	$	37,358	$	21,748	$	55,190	$	13,376	$	-	$	127,672
Loans collectively evaluated for impairment
Allowance	$	49,578	$	22,008	$	36,579	$	10,740	$	24	$	118,929
Balance	$	2,382,533	$	669,738	$	6,321,857	$	3,090,912	$	4,722	$	12,469,762
Total allowance	$	51,039	$	22,008	$	37,402	$	11,062	$	24	$	121,535
Total balance	$	2,419,891	$	691,486	$	6,377,047	$	3,104,288	$	4,722	$	12,597,434
December 31, 2016
Loans individually evaluated for impairment
Allowance	$	1,827	$	-	$	573	$	396	$	-	$	2,796
Balance	$	27,761	$	5,458	$	64,470	$	17,385	$	-	$	115,074
Loans collectively evaluated for impairment
Allowance	$	47,376	$	23,268	$	34,291	$	11,224	$	11	$	116,170
Balance	$	2,220,426	$	542,630	$	5,720,778	$	2,598,374	$	3,993	$	11,086,201
Total allowance	$	49,203	$	23,268	$	34,864	$	11,620	$	11	$	118,966
Total balance	$	2,248,187	$	548,088	$	5,785,248	$	2,615,759	$	3,993	$	11,201,275

XML

Note 12 - Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis [Table Text Block]

September 30, 2017	Fair Value Measurements Using						Total at
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Assets
Securities available-for-sale
U.S. Treasury securities	$	399,436	$	-	$	-	$	399,436
U.S. government agencies		-		9,700		-		9,700
U.S. government sponsored entities		-		393,722		-		393,722
State and municipal securities		-		1,931		-		1,931
Mortgage-backed securities		-		446,065		-		446,065
Collateralized mortgage obligations		-		1,710		-		1,710
Corporate debt securities		-		80,906		-		80,906
Mutual funds		6,271		-		-		6,271
Preferred stock of government sponsored entities		8,087		-		-		8,087
Other equity securities		20,659		-		-		20,659
Total securities available-for-sale		434,453		934,034		-		1,368,487
Warrants		-		-		97		97
Foreign exchange contracts		-		1,725		-		1,725
Interest rate swaps		-		2,314		-		2,314
Total assets	$	434,453	$	938,073	$	97	$	1,372,623
Liabilities
Option contracts	$	-	$	234	$	-	$	234
Foreign exchange contracts		-		1,083		-		1,083
Interest rate swaps		-		5,049		-		5,049
Total liabilities	$	-	$	6,366	$	-	$	6,366

December 31, 2016	Fair Value Measurements Using						Total at
	Level 1		Level 2		Level 3		Fair Value
	(In thousands)
Assets
Securities available-for-sale
U.S. Treasury securities	$	489,017	$	-	$	-	$	489,017
U.S. government sponsored entities		-		390,331		-		390,331
Mortgage-backed securities		-		336,260		-		336,260
Collateralized mortgage obligations		-		28		-		28
Corporate debt securities		-		74,350		-		74,350
Mutual funds		6,230		-		-		6,230
Preferred stock of government sponsored entities		7,308		-		-		7,308
Other equity securities		10,821		-		-		10,821
Total securities available-for-sale		513,376		800,969		-		1,314,345
Warrants		-		-		79		79
Interest rate swaps		-		938		-		938
Foreign exchange contracts		-		1,302		-		1,302
Total assets	$	513,376	$	803,209	$	79	$	1,316,664
Liabilities
Option contracts	$	-	$	121	$	-	$	121
Interest rate swaps		-		3,744		-		3,744
Foreign exchange contracts		-		3,132		-		3,132
Total liabilities	$	-	$	6,997	$	-	$	6,997

Fair Value Measurements, Nonrecurring [Table Text Block]

	September 30, 2017								Total (Gains)/Losses
	Fair Value Measurements Using						Total at		Three Months Ended					Nine Months Ended
	Level 1		Level 2		Level 3		Fair Value		September 30, 2017		September 30, 2016			September 30, 2017		September 30, 2016
	(In thousands)
Assets
Impaired loans by type:
Commercial loans	$	-	$	-	$	12,525	$	12,525	$	-	$	-		$	25	$	-
Commercial mortgage loans		-		-		21,997		21,997		-		-			-		-
Residential mortgage loans and equity lines		-		-		10,790		10,790		-		-			-		-
Total impaired loans		-		-		45,312		45,312		-		-			25		-
Other real estate owned (1)		-		6,317		4,322		10,639		405		(206	)		654		9
Investments in venture capital and private company stock		-		-		3,023		3,023		12		187			365		419
Total assets	$	-	$	6,317	$	52,657	$	58,974	$	417	$	(19	)	$	1,044	$	428

	December 31, 2016								Total Losses
	Fair Value Measurements Using						Total at		Twelve Months Ended
	Level 1		Level 2		Level 3		Fair Value		December 31, 2016		December 31, 2015
	(In thousands)
Assets
Impaired loans by type:
Commercial loans	$	-	$	-	$	2,813	$	2,813	$	322	$	806
Commercial mortgage loans		-		-		9,444		9,444		-		598
Residential mortgage loans and equity lines		-		-		11,679		11,679		-		146
Total impaired loans		-		-		23,936		23,936		322		1,550
Other real estate owned (1)		-		6,006		4,372		10,378		9		404
Investments in venture capital and private company stock		-		-		3,667		3,667		976		553
Total assets	$	-	$	6,006	$	31,975	$	37,981	$	1,307	$	2,507

XML

Note 13 - Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Fair Value, by Balance Sheet Grouping [Table Text Block]

	September 30, 2017				December 31, 2016
	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
	(In thousands)
Financial Assets
Cash and due from banks	$	167,886	$	167,886	$	218,017	$	218,017
Short-term investments		573,059		573,059		967,067		967,067
Securities available-for-sale		1,368,487		1,368,487		1,314,345		1,314,345
Loans held for sale		-		-		7,500		7,500
Loans, net		12,472,475		12,403,100		11,077,315		11,006,344
Investment in Federal Home Loan Bank stock		21,948		21,948		17,250		17,250
Investment in Federal Reserve Bank stock		8,733		8,733		-		-
Warrants		97		97		79		79

	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Foreign exchange contracts	$	69,278	$	1,725	$	82,439	$	1,302
Interest rate swaps		155,671		2,314		361,526		938

	Carrying				Carrying
	Amount		Fair Value		Amount		Fair Value
Financial Liabilities
Deposits	$	12,561,695	$	12,573,127	$	11,674,726	$	11,680,017
Securities sold under agreements to repurchase		100,000		100,549		350,000		351,989
Advances from Federal Home Loan Bank		595,000		595,037		350,000		350,062
Other borrowings		153,574		151,643		17,662		15,944
Long-term debt		119,136		68,056		119,136		63,169

	Notional				Notional
	Amount		Fair Value		Amount		Fair Value
Option contracts	$	12,307	$	234	$	12,117	$	121
Foreign exchange contracts		86,625		1,083		89,545		3,132
Interest rate swaps		510,841		5,049		119,136		3,744

	Notional					Notional
	Amount		Fair Value			Amount		Fair Value
Off-Balance Sheet Financial Instruments
Commitments to extend credit	$	2,287,498	$	(6,924	)	$	2,062,241	$	(6,025	)
Standby letters of credit		140,682		(1,699	)		75,396		(668	)
Other letters of credit		41,868		(218	)		37,283		(16	)
Bill of lading guarantees		24		-			75		-

Schedule Of Fair Value Of Financial Instruments [Table Text Block]

	September 30, 2017
	Estimated
	Fair Value
	Measurements		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets
Cash and due from banks	$	167,886	$	167,886	$	-	$	-
Short-term investments		573,059		573,059		-		-
Securities available-for-sale		1,368,487		434,453		934,034		-
Loans held-for-sale		-		-		-		-
Loans, net		12,403,100		-		-		12,403,100
Investment in Federal Home Loan Bank stock		21,948		-		21,948		-
Investment in Federal Reserve Bank stock		8,733		-		8,733		-
Warrants		97		-		-		97
Financial Liabilities
Deposits		12,573,127		-		-		12,573,127
Securities sold under agreements to repurchase		100,549		-		100,549		-
Advances from Federal Home Loan Bank		595,037		-		595,037		-
Other borrowings		151,643		-		-		151,643
Long-term debt		68,056		-		68,056		-

	December 31, 2016
	Estimated
	Fair Value
	Measurements		Level 1		Level 2		Level 3
	(In thousands)
Financial Assets
Cash and due from banks	$	218,017	$	218,017	$	-	$	-
Short-term investments		967,067		967,067		-		-
Securities available-for-sale		1,314,345		513,376		800,969		-
Loans held-for-sale		7,500		-		-		7,500
Loans, net		11,006,344		-		-		11,006,344
Investment in Federal Home Loan Bank stock		17,250		-		17,250		-
Warrants		79		-		-		79
Financial Liabilities
Deposits		11,680,017		-		-		11,680,017
Securities sold under agreements to repurchase		351,989		-		351,989		-
Advances from Federal Home Loan Bank		350,062		-		350,062		-
Other borrowings		15,944		-		-		15,944
Long-term debt		63,169		-		63,169		-

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Note 16 - Balance Sheet Offsetting (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Amounts Recognized in Balance Sheet [Table Text Block]

							Gross Amounts Not Offset in the Balance Sheet
	Gross Amounts Recognized		Gross Amounts Offset in the Balance Sheet		Net Amounts Presented in the Balance Sheet		Financial Instruments		Collateral Posted			Net Amount
September 30, 2017	(In thousands)
Assets:
Derivatives	$	2,314	$	-	$	2,314	$	-	$	-		$	2,314
Liabilities:
Securities sold under agreements to repurchase	$	100,000	$	-	$	100,000	$	-	$	(100,000	)	$	-
Derivatives	$	5,049	$	-	$	5,049	$	-	$	(5,049	)	$	-
December 31, 2016
Assets:
Derivatives	$	938	$	-	$	938	$	-	$	-		$	938
Liabilities:
Securities sold under agreements to repurchase	$	350,000	$	-	$	350,000	$	-	$	(350,000	)	$	-
Derivatives	$	3,744	$	-	$	3,744	$	-	$	(3,744	)	$	-

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Note 17 - Stockholders' Equity (Tables)

9 Months Ended

Sep. 30, 2017

Notes Tables

Schedule of Accumulated Other Comprehensive Income (Loss) [Table Text Block]

	Three months ended September 30, 2017									Three months ended September 30, 2016
	Pre-tax			Tax expense/ (benefit)			Net-of-tax			Pre-tax			Tax expense/ (benefit)			Net-of-tax
	(In thousands)
Beginning balance, loss, net of tax
Securities available-for-sale							$	1,001								$	8,539
Cash flow hedge derivatives								(2,421	)								(7,397	)
Total							$	(1,420	)							$	1,142
Net unrealized (losses)/gains arising during the period
Securities available-for-sale	$	1,829		$	769		$	1,060		$	1,618		$	680		$	938
Cash flow hedge derivatives		271			114			157			1,387			583			804
Total		2,100			883			1,217			3,005			1,263		$	1,742
Reclassification adjustment for net losses in net income
Securities available-for-sale		(24	)		(10	)		(14	)		(1,692	)		(711	)		(981	)
Cash flow hedge derivatives		-			-			-			-			-			-
Total		(24	)		(10	)		(14	)		(1,692	)		(711	)		(981	)
Total other comprehensive (loss)/income
Securities available-for-sale		1,805			759			1,046			(74	)		(31	)		(43	)
Cash flow hedge derivatives		271			114			157			1,387			583			804
Total	$	2,076		$	873		$	1,203		$	1,313		$	552		$	761
Ending balance, (loss)/gain, net of tax
Securities available-for-sale							$	2,047								$	8,496
Cash flow hedge derivatives								(2,264	)								(6,593	)
Total							$	(217	)							$	1,903

	Nine months ended September 30, 2017									Nine months ended September 30, 2016
	Pre-tax			Tax expense/ (benefit)			Net-of-tax			Pre-tax			Tax expense/ (benefit)			Net-of-tax
	(In thousands)
Beginning balance, loss, net of tax
Securities available-for sale							$	(1,545	)							$	(5,431	)
Cash flow hedge derivatives								(2,170	)								(2,995	)
Total							$	(3,715	)							$	(8,426	)
Net unrealized gains/(losses) arising during the period
Securities available-for sale	$	5,759		$	2,421		$	3,338		$	27,170		$	11,422		$	15,748
Cash flow hedge derivatives		(162	)		(68	)		(94	)		(6,208	)		(2,610	)		(3,598	)
Total		5,597			2,353			3,244			20,962			8,812		$	12,150
Reclassification adjustment for net (gains)/losses in net income
Securities available-for sale		439			185			254			(3,141	)		(1,320	)		(1,821	)
Cash flow hedge derivatives		-			-			-			-			-			-
Total		439			185			254			(3,141	)		(1,320	)		(1,821	)
Total other comprehensive income/(loss)
Securities available-for sale		6,198			2,606			3,592			24,029			10,102			13,927
Cash flow hedge derivatives		(162	)		(68	)		(94	)		(6,208	)		(2,610	)		(3,598	)
Total	$	6,036		$	2,538		$	3,498		$	17,821		$	7,492		$	10,329
Ending balance, gain/(loss), net of tax
Securities available-for sale							$	2,047								$	8,496
Cash flow hedge derivatives								(2,264	)								(6,593	)
Total							$	(217	)							$	1,903

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Note 1 - Business (Details Textual)	Sep. 30, 2017
Number Of Limited Partnerships In Housing Investments	7
Percentage of Subsidiaries Common Securities Owned by Parent Company	100.00%
Southern California [Member]
Number Of Branch Locations	22
Northern California [Member]
Number Of Branch Locations	12
NEW YORK
Number Of Branch Locations	12
Illinois [Member]
Number Of Branch Locations	3
WASHINGTON Member
Number Of Branch Locations	3
Texas [Member]
Number Of Branch Locations	2
Massachusetts [Member]
Number Of Branch Locations	1
New Jersey [Member]
Number Of Branch Locations	1
Maryland [Member]
Number Of Branch Locations	1
Nevada [Member]
Number Of Branch Locations	1
HONG KONG
Number Of Branch Locations	1

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Note 2 - Business Combinations (Details Textual) - SinoPac Bancorp [Member] $ in Millions	Jul. 14, 2017 USD ($) shares
Business Combination, Aggregate Purchase Price	$ 351.6
Business Acquisition, Equity Interest Issued or Issuable, Number of Shares | shares	926,192
Business Combination, Deferred Purchase Price	$ 100.0
Business Combination, Purchase Price Held, Percentage	10.00%

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Note 2 - Business Combinations - Fair Value of Assets and Liabilities Acquired (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
	Jul. 14, 2017	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Liabilities assumed:
Gains on bargain purchase		$ 5,440		$ 5,440
SinoPac Bancorp [Member]
Assets acquired:
Cash and cash equivalents	$ 166,932
Short-term investments	122,000
Securities available-for-sale	107,934
Loans	703,787
Premises and equipment	6,198
Cash surrender value of life insurance	46,083
Deferred tax assets, net	40,136
Core deposit intangible	7,144
Accrued interest receivable and other assets	9,134
Total assets acquired	1,209,348
Liabilities assumed:
Deposits	813,888
Long-term debt	30,000
Accrued interest payable and other liabilities	5,608
Total liabilities assumed	849,496
Net assets acquired	359,852
Cash paid	181,241
Fair value of common stock issued	34,862
Total consideration paid	216,103
Purchase price payable to SinoPac	138,309
Total consideration	354,412
Gains on bargain purchase	$ 5,440

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Note 4 - Recent Accounting Pronouncements (Details Textual) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Income Tax Expense (Benefit)	$ 35,163	$ (2,600)	$ 15,808	$ 71,099	$ 50,756
Accounting Standards Update 2016-09 [Member]
Income Tax Expense (Benefit)				$ (2,600)

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Note 5 - Earnings Per Share - Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Net income	$ 49,746	$ 46,090	$ 150,102	$ 127,084
Weighted-average shares:
Basic weighted-average number of common shares outstanding (in shares)	80,665,398	78,865,860	80,073,249	79,147,839
Dilutive effect of weighted-average outstanding common share equivalents
Diluted weighted-average number of common shares outstanding (in shares)	81,404,854	79,697,069	80,797,179	79,902,846
Average stock options and warrants with anti-dilutive effect (in shares)	0	207,183	6,561	247,974
Basic (in dollars per share)	$ 0.62	$ 0.58	$ 1.87	$ 1.61
Diluted (in dollars per share)	$ 0.61	$ 0.58	$ 1.86	$ 1.59
Warrant [Member]
Dilutive effect of weighted-average outstanding common share equivalents
Warrants (in shares)	399,957	569,949	409,019	520,686
Employee Stock Option [Member]
Dilutive effect of weighted-average outstanding common share equivalents
Warrants (in shares)	19,221	95,850	25,706	90,461
Restricted Stock Units (RSUs) [Member]
Dilutive effect of weighted-average outstanding common share equivalents
Warrants (in shares)	320,278	165,410	289,205	143,860

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Note 6 - Stock-based Compensation (Details Textual)	1 Months Ended	3 Months Ended				9 Months Ended		12 Months Ended
	Feb. 28, 2017 shares	Sep. 30, 2017 USD ($) shares	Jun. 30, 2017 shares	Mar. 31, 2017 shares	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($) $ / shares shares	Sep. 30, 2016 USD ($) shares	Dec. 31, 2016 $ / shares shares	Dec. 31, 2015 shares	Dec. 31, 2014 shares
Maximum Period Of Common Stock Granted						10 years
Annual Increments To Be Vested In Common Stock Units		20.00%				20.00%
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross						0	0
Allocated Share-based Compensation Expense | $		$ 0			$ 0	$ 0	$ 0
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period		6,000	19,500	18,040		43,540	2,110
Proceeds from Stock Options Exercised | $						$ 1,018,000	$ 49,000
Share-based Compensation Arrangement by Share-based Payment Award, Options, Exercises in Period, Intrinsic Value | $						607,000	9,000
Benefit (Shortfall) of Tax Deductions from Share-based Compensation | $						$ 2,600,000	3,400,000
2005 Incentive Plan [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant		3,465,411				3,465,411
Restricted Stock Units (RSUs) [Member]
Allocated Share-based Compensation Expense | $		$ 1,300,000			$ 1,200,000	$ 3,900,000	$ 3,300,000
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period						87,781		88,693
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value | $ / shares						$ 38.59		$ 30.37
Number of Officers Receiving Award								7
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $		$ 9,100,000				$ 9,100,000
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition						2 years
Performance TSR Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period								30,319	61,209	60,456
Performance EPS Restricted Stock Units [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period								58,241	57,409	57,642
Performance ROA Restricted Stock [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period								29,119
Performance TSR Restricted Stock and EPS Restricted Stock [Member] | December 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	297,171
Performance TSR Restricted Stock and EPS Restricted Stock Based on Higher than Target Actual Performance and Cash Dividends [Member] | December 2013 [Member]
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Vested in Period	76,623

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Note 6 - Stock-based Compensation - Stock Options (Details) - USD ($)	3 Months Ended			9 Months Ended		12 Months Ended
	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Balance, Shares (in shares)	45,130	64,630	82,670	82,670
Balance, Weighted-Average Exercise Price (in dollars per share)	$ 23.37	$ 23.37	$ 23.37	$ 23.37
Balance, Weighted-Average Remaining Contractual Life (Year)	146 days	255 days	328 days			1 year 36 days
Balance, Aggregate Intrinsic Value	$ 659	$ 658,000	$ 925,000	$ 659		$ 1,211,000
Exercised, Shares (in shares)	(6,000)	(19,500)	(18,040)	(43,540)	(2,110)
Exercised, Weighted-Average Exercise Price (in dollars per share)	$ 23.37	$ 23.37	$ 23.37
Balance, Shares (in shares)	39,130	45,130	64,630	39,130		82,670
Balance, Weighted-Average Exercise Price (in dollars per share)	$ 23.37	$ 23.37	$ 23.37	$ 23.37		$ 23.37
Exercisable, Shares (in shares)	39,130			39,130
Exercisable, Weighted-Average Exercise Price (in dollars per share)	$ 23.37			$ 23.37
Exercisable, Weighted-Average Remaining Contractual Life (Year)	146 days
Exercisable, Aggregate Intrinsic Value	$ 659,000			$ 659,000

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Note 6 - Stock-based Compensation - Restricted Stock Units (Details) - Restricted Stock [Member]	9 Months Ended
	Sep. 30, 2017 shares
Balance (in shares)	727,419
Granted (in shares)	164,404
Distributed (in shares)	(297,905)
Forfeited (in shares)	(10,424)
Balance (in shares)	583,494

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Note 7 - Investment Securities (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Available-for-sale Securities	$ 1,368,487,000		$ 1,314,345,000
Proceeds from Sale of Mortgage Backed Securities (MBS) categorized as Available-for-sale	0	$ 415,300,000
Proceeds from Maturities, Prepayments and Calls of Mortgage Backed Securities (MBS)	48,500,000	125,300,000
Proceeds From Sales And Repayments Of Other Investment Securities	99,500,000	0
Proceeds from Maturities Repayments and Calls of Other Investment Securities	341,300,000	460,000,000
Realized Loss From Sale And Call Of Investment Securities	439,000
Other than Temporary Impairment Losses, Investments, Available-for-sale Securities	0	$ 206,000
Available-for-sale Securities, Continuous Unrealized Loss Position, Accumulated Loss	9,300,000		14,968,000
Pledged Investment Securities	$ 291,400,000		$ 649,100,000

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Note 7 - Investment Securities - Investment Securities (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Securities available-for-sale, amortized cost	$ 1,364,955	$ 1,317,012
Securities available-for-sale, gross unrealized gains	12,832	12,301
Securities available-for-sale, gross unrealized losses	9,300	14,968
Securities available-for-sale	1,368,487	1,314,345
US Treasury Securities [Member]
Securities available-for-sale, amortized cost	399,741	489,839
Securities available-for-sale, gross unrealized gains		35
Securities available-for-sale, gross unrealized losses	305	857
Securities available-for-sale	399,436	489,017
US Government Corporations and Agencies Securities [Member]
Securities available-for-sale, amortized cost	9,679
Securities available-for-sale, gross unrealized gains	27
Securities available-for-sale, gross unrealized losses	6
Securities available-for-sale	9,700
US Government-sponsored Enterprises Debt Securities [Member]
Securities available-for-sale, amortized cost	400,000	400,000
Securities available-for-sale, gross unrealized gains
Securities available-for-sale, gross unrealized losses	6,278	9,669
Securities available-for-sale	393,722	390,331
Collateralized Mortgage Backed Securities [Member]
Securities available-for-sale, amortized cost	447,959	339,241
Securities available-for-sale, gross unrealized gains	468	309
Securities available-for-sale, gross unrealized losses	2,362	3,290
Securities available-for-sale	446,065	336,260
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale, amortized cost	1,943
Securities available-for-sale, gross unrealized gains
Securities available-for-sale, gross unrealized losses	12
Securities available-for-sale	1,931
Collateralized Mortgage Obligations [Member]
Securities available-for-sale, amortized cost	1,715	48
Securities available-for-sale, gross unrealized gains
Securities available-for-sale, gross unrealized losses	5	20
Securities available-for-sale	1,710	28
Corporate Debt Securities [Member]
Securities available-for-sale, amortized cost	80,007	74,965
Securities available-for-sale, gross unrealized gains	904	247
Securities available-for-sale, gross unrealized losses	5	862
Securities available-for-sale	80,906	74,350
Mutual Funds [Member]
Securities available-for-sale, amortized cost	6,500	6,500
Securities available-for-sale, gross unrealized gains
Securities available-for-sale, gross unrealized losses	229	270
Securities available-for-sale	6,271	6,230
Preferred Stock of Government Sponsored Entities [Member]
Securities available-for-sale, amortized cost	4,117	2,811
Securities available-for-sale, gross unrealized gains	3,970	4,497
Securities available-for-sale, gross unrealized losses
Securities available-for-sale	8,087	7,308
Other Equity Securities [Member]
Securities available-for-sale, amortized cost	13,294	3,608
Securities available-for-sale, gross unrealized gains	7,463	7,213
Securities available-for-sale, gross unrealized losses	98
Securities available-for-sale	$ 20,659	$ 10,821

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Note 7 - Investment Securities - Investments by Contractual Maturity Date (Details) - USD ($) $ in Thousands		Sep. 30, 2017	Dec. 31, 2016
Due in one year or less, Amortized Cost		$ 415,782
Due in one year or less, Fair Value		415,555
Due after one year through five years, Amortized Cost		465,328
Due after one year through five years, Fair Value		459,924
Due after five years through ten years, Amortized Cost		8,658
Due after five years through ten years, Fair Value		8,647
Due after ten years (1), Amortized Cost	[1]	475,187
Due after ten years (1), Fair Value	[1]	484,361
Total, Amortized Cost		1,364,955	$ 1,317,012
Total, Fair Value		$ 1,368,487	$ 1,314,345

[1] Equity securities are reported in this category

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Note 7 - Investment Securities - Temporarily Impaired Securities (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Temporarily impaired securities, less than 12 months, fair value	$ 1,107,943,000	$ 1,017,655,000
Temporarily impaired securities, less than 12 months, unrealized losses	8,809,000	13,814,000
Temporarily impaired securities, 12 months or longer, fair value	56,122,000	35,458,000
Temporarily impaired securities, 12 months or longer, unrealized losses	491,000	1,154,000
Temporarily impaired securities, total fair value	1,164,065,000	1,053,113,000
Temporarily impaired securities, total unrealized losses	9,300,000	14,968,000
US Treasury Securities [Member]
Temporarily impaired securities, less than 12 months, fair value	339,707,000	299,088,000
Temporarily impaired securities, less than 12 months, unrealized losses	46,000	857,000
Temporarily impaired securities, 12 months or longer, fair value	49,729,000
Temporarily impaired securities, 12 months or longer, unrealized losses	259,000
Temporarily impaired securities, total fair value	389,436,000	299,088,000
Temporarily impaired securities, total unrealized losses	305,000	857,000
US Government-sponsored Enterprises Debt Securities [Member]
Temporarily impaired securities, less than 12 months, fair value	395,774,000	390,331,000
Temporarily impaired securities, less than 12 months, unrealized losses	6,284,000	9,669,000
Temporarily impaired securities, 12 months or longer, fair value
Temporarily impaired securities, 12 months or longer, unrealized losses
Temporarily impaired securities, total fair value	395,774,000	390,331,000
Temporarily impaired securities, total unrealized losses	6,284,000	9,669,000
US States and Political Subdivisions Debt Securities [Member]
Temporarily impaired securities, less than 12 months, fair value	1,931,000
Temporarily impaired securities, less than 12 months, unrealized losses	12,000
Temporarily impaired securities, 12 months or longer, fair value
Temporarily impaired securities, 12 months or longer, unrealized losses
Temporarily impaired securities, total fair value	1,931,000
Temporarily impaired securities, total unrealized losses	12,000
Collateralized Mortgage Backed Securities [Member]
Temporarily impaired securities, less than 12 months, fair value	359,112,000	328,236,000
Temporarily impaired securities, less than 12 months, unrealized losses	2,359,000	3,288,000
Temporarily impaired securities, 12 months or longer, fair value	122,000	62,000
Temporarily impaired securities, 12 months or longer, unrealized losses	3,000	2,000
Temporarily impaired securities, total fair value	359,234,000	328,298,000
Temporarily impaired securities, total unrealized losses	2,362,000	3,290,000
Collateralized Mortgage Obligations [Member]
Temporarily impaired securities, less than 12 months, fair value	1,710,000
Temporarily impaired securities, less than 12 months, unrealized losses	5,000
Temporarily impaired securities, 12 months or longer, fair value		28,000
Temporarily impaired securities, 12 months or longer, unrealized losses		20,000
Temporarily impaired securities, total fair value	1,710,000	28,000
Temporarily impaired securities, total unrealized losses	5,000	20,000
Corporate Debt Securities [Member]
Temporarily impaired securities, less than 12 months, fair value	5,029,000
Temporarily impaired securities, less than 12 months, unrealized losses	5,000
Temporarily impaired securities, 12 months or longer, fair value		29,138,000
Temporarily impaired securities, 12 months or longer, unrealized losses		862,000
Temporarily impaired securities, total fair value	5,029,000	29,138,000
Temporarily impaired securities, total unrealized losses	5,000	862,000
Mutual Funds [Member]
Temporarily impaired securities, less than 12 months, fair value
Temporarily impaired securities, less than 12 months, unrealized losses
Temporarily impaired securities, 12 months or longer, fair value	6,271,000	6,230,000
Temporarily impaired securities, 12 months or longer, unrealized losses	229,000	270,000
Temporarily impaired securities, total fair value	6,271,000	6,230,000
Temporarily impaired securities, total unrealized losses	229,000	$ 270,000
Other Equity Securities [Member]
Temporarily impaired securities, less than 12 months, fair value	4,680,000
Temporarily impaired securities, less than 12 months, unrealized losses	98,000
Temporarily impaired securities, 12 months or longer, fair value
Temporarily impaired securities, 12 months or longer, unrealized losses
Temporarily impaired securities, total fair value	4,680,000
Temporarily impaired securities, total unrealized losses	$ 98,000

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Note 8 - Loans (Details Textual) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Dec. 31, 2016
Impaired Financing Receivable, Recorded Investment	$ 127,671,000		$ 127,671,000		$ 127,671,000	$ 115,074,000
Percentage Of Charge Off To Contractual Balances For Impaired Loans	7.10%		7.10%		7.10%	8.40%
Allowance for Credit Losses, Change in Method of Calculating Impairment	$ 678,000	$ 208,000	$ 678,000	$ 208,000	$ 678,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down	305,000		305,000
Loans and Leases Receivable, Impaired, Commitment to Lend	0		0		0
Commercial Portfolio Segment [Member]
Allowance for Credit Losses, Change in Method of Calculating Impairment	636,000	208,000	636,000	208,000	636,000
Financing Receivable, Modifications, Subsequent Default, Recorded Investment			50,000
Financing Receivables, Impaired, Troubled Debt Restructuring, Write-down					2,100,000
Minimum [Member]
Period Loan Is In Payment Default			60 days
Maximum [Member]
Period Loan Is In Payment Default			90 days
Rate Reduction [Member] | Minimum [Member]
Troubled Debt Restructurings Length Of Modifications			90 days
Nonaccrual Loans [Member]
Impaired Financing Receivable, Recorded Investment	65,300,000		$ 65,300,000		65,300,000	$ 49,700,000
Accruing Troubled Debt Restructuring [Member]
Impaired Financing Receivable, Recorded Investment	62,400,000		62,400,000		62,400,000	65,400,000
Financing Receivable, Modifications, Recorded Investment	62,400,000		62,400,000		62,400,000	65,400,000
Allowance for Credit Losses, Change in Method of Calculating Impairment	1,100,000		1,100,000		1,100,000	1,300,000
Non-accruing Troubled Debt Restructuring [Member]
Financing Receivable, Modifications, Recorded Investment	33,700,000		33,700,000		33,700,000	29,700,000
Allowance for Credit Losses, Change in Method of Calculating Impairment	$ 143,000		$ 143,000		$ 143,000	$ 1,100,000

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Note 8 - Loans - Components of Loans in Consolidated Balance Sheets (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans	$ 12,597,434	$ 11,201,275
Less: Allowance for loan losses	(121,535)	(118,966)
Unamortized deferred loan fees, net	(3,424)	(4,994)
Total loans, net	12,472,475	11,077,315
Loans held for sale		7,500
Commercial Portfolio Segment [Member]
Loans	2,419,891	2,248,187
Less: Allowance for loan losses	(51,039)	(49,203)
Residential Portfolio Segment [Member]
Loans	2,922,537	2,444,048
Commercial Real Estate Portfolio Segment [Member]
Loans	6,377,047	5,785,248
Less: Allowance for loan losses	(37,402)	(34,864)
Real Estate Construction Portfolio Segment [Member]
Loans	691,486	548,088
Less: Allowance for loan losses	(22,008)	(23,268)
Equity Lines Portfolio Segment [Member]
Loans	181,751	171,711
Consumer Portfolio Segment [Member]
Loans	4,722	3,993
Less: Allowance for loan losses	$ (24)	$ (11)

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Note 8 - Loans - Average Balance and Interest Income Recognized Related to Impaired Loans (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Average Recorded Investment	$ 127,259	$ 133,221	$ 127,722	$ 134,519
Interest Income Recognized	1,264	1,160	2,349	3,209
Commercial Portfolio Segment [Member]
Average Recorded Investment	24,987	28,091	22,572	18,602
Interest Income Recognized	678	170	760	488
Real Estate Construction Portfolio Segment [Member]
Average Recorded Investment	29,780	5,869	29,868	12,005
Interest Income Recognized	99	66	287	196
Commercial Real Estate Portfolio Segment [Member]
Average Recorded Investment	58,555	81,005	60,074	86,456
Interest Income Recognized	391	776	1,015	2,124
Residential Mortgage and Equity Lines Portfolio Segment [Member]
Average Recorded Investment	13,937	18,256	15,208	17,456
Interest Income Recognized	$ 96	$ 148	$ 287	$ 401

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Note 8 - Loans - Impaired Loans and Related Allowance for Credit Losses (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans with no related allowance, unpaid principal balance	$ 87,680	$ 95,807
Loans with no related allowance, recorded investment	79,755	88,342
Loans with related allowance, unpaid principal balance	49,604	28,637
Loans with related allowance, recorded investment	47,916	26,732
Allowance	2,606	2,796
Total impaired loans, unpaid principal balance	137,284	124,444
Total impaired loans, recorded investment	127,671	115,074
Commercial Portfolio Segment [Member]
Loans with no related allowance, unpaid principal balance	23,953	24,037
Loans with no related allowance, recorded investment	23,373	23,121
Loans with related allowance, unpaid principal balance	14,082	5,216
Loans with related allowance, recorded investment	13,985	4,640
Allowance	1,461	1,827
Real Estate Construction Portfolio Segment [Member]
Loans with no related allowance, unpaid principal balance	22,309	5,776
Loans with no related allowance, recorded investment	21,748	5,458
Commercial Real Estate Portfolio Segment [Member]
Loans with no related allowance, unpaid principal balance	39,154	60,522
Loans with no related allowance, recorded investment	32,370	54,453
Loans with related allowance, unpaid principal balance	23,061	10,158
Loans with related allowance, recorded investment	22,820	10,017
Allowance	823	573
Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans with no related allowance, unpaid principal balance	2,264	5,472
Loans with no related allowance, recorded investment	2,264	5,310
Loans with related allowance, unpaid principal balance	12,461	13,263
Loans with related allowance, recorded investment	11,111	12,075
Allowance	$ 322	$ 396

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Note 8 - Loans - Aging of Loan Portfolio (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans past due	$ 92,569	$ 126,826
Non-accrual loans	65,313	49,682
Loans not past due	12,504,865	11,074,449
Loans	12,597,434	11,201,275
Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	8,412	43,419
Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	14,944	33,725
Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	3,900
Commercial Portfolio Segment [Member]
Loans past due	43,109	65,653
Non-accrual loans	15,942	15,710
Loans not past due	2,376,782	2,182,534
Loans	2,419,891	2,248,187
Commercial Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due	8,412	22,753
Commercial Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	14,855	27,190
Commercial Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due	3,900
Real Estate Construction Portfolio Segment [Member]
Loans past due	14,267	21,683
Non-accrual loans	14,267	5,458
Loans not past due	677,219	526,405
Loans	691,486	548,088
Real Estate Construction Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due		10,390
Real Estate Construction Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due		5,835
Real Estate Construction Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due
Commercial Real Estate Portfolio Segment [Member]
Loans past due	28,379	26,664
Non-accrual loans	28,379	20,078
Loans not past due	6,348,668	5,758,584
Loans	6,377,047	5,785,248
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due		5,886
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due		700
Commercial Real Estate Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due
Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans past due	6,814	12,826
Non-accrual loans	6,725	8,436
Loans not past due	3,097,474	2,602,933
Loans	3,104,288	2,615,759
Residential Mortgage and Equity Lines Portfolio Segment [Member] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due		4,390
Residential Mortgage and Equity Lines Portfolio Segment [Member] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due	89
Residential Mortgage and Equity Lines Portfolio Segment [Member] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due
Installment and Other Loans [Member ]
Loans past due
Non-accrual loans
Loans not past due	4,722	3,993
Loans	4,722	3,993
Installment and Other Loans [Member ] | Financing Receivables, 30 to 59 Days Past Due [Member]
Loans past due
Installment and Other Loans [Member ] | Financing Receivables, 60 to 89 Days Past Due [Member]
Loans past due
Installment and Other Loans [Member ] | Financing Receivables, Equal to Greater than 90 Days Past Due [Member]
Loans past due

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Note 8 - Loans - Troubled Debt Restructuring (Details)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2016 USD ($)	Sep. 30, 2017 USD ($)
No. of Contracts	14	8	21	14
Pre-Modification Outstanding Recorded Investment	$ 23,479,000	$ 18,996,000	$ 52,638,000	$ 24,207,000
Post-Modification Outstanding Recorded Investment	23,174,000	18,996,000	52,333,000	24,207,000
Charge-offs	305,000		305,000
Special Reserve	$ 678,000	$ 208,000	$ 678,000	$ 208,000	$ 678,000
Commercial Portfolio Segment [Member]
No. of Contracts	8	7	13	11
Pre-Modification Outstanding Recorded Investment	$ 18,873,000	$ 18,258,000	$ 19,543,000	$ 23,102,000
Post-Modification Outstanding Recorded Investment	18,873,000	18,258,000	19,543,000	23,102,000
Charge-offs					2,100,000
Special Reserve	$ 636,000	$ 208,000	$ 636,000	$ 208,000	636,000
Commercial Real Estate Portfolio Segment [Member]
No. of Contracts	5	1	5	1
Pre-Modification Outstanding Recorded Investment	$ 4,123,000	$ 738,000	$ 4,123,000	$ 738,000
Post-Modification Outstanding Recorded Investment	3,818,000	738,000	3,818,000	738,000
Charge-offs	305,000		305,000
Special Reserve	10,000		$ 10,000		10,000
Real Estate Construction Portfolio Segment [Member]
No. of Contracts			2
Pre-Modification Outstanding Recorded Investment			$ 28,489,000
Post-Modification Outstanding Recorded Investment			28,489,000
Charge-offs
Special Reserve
Residential Mortgage and Equity Lines Portfolio Segment [Member]
No. of Contracts	1		1	2
Pre-Modification Outstanding Recorded Investment	$ 483,000		$ 483,000	$ 367,000
Post-Modification Outstanding Recorded Investment	483,000		483,000	367,000
Charge-offs
Special Reserve	$ 32,000		$ 32,000		$ 32,000

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Note 8 - Loans - Accruing Troubled Debt Restructurings (Details) - Accruing Troubled Debt Restructuring [Member] - USD ($) $ in Thousands	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Accruing TDRs	$ 62,358	$ 79,819	$ 65,393	$ 86,555	$ 74,708	$ 81,680
Payment Deferral [Member]
Accruing TDRs	48,542		39,054
Contractual Interest Rate Reduction [Member]
Accruing TDRs	6,232		6,750
Rate Reduction and Payment Deferral [Member]
Accruing TDRs	7,584		19,589
Commercial Portfolio Segment [Member]
Accruing TDRs	21,416		12,052
Commercial Portfolio Segment [Member] | Payment Deferral [Member]
Accruing TDRs	21,416		7,971
Commercial Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs
Commercial Portfolio Segment [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs			4,081
Real Estate Construction Loans [Member]
Accruing TDRs	7,480
Real Estate Construction Loans [Member] | Payment Deferral [Member]
Accruing TDRs	7,480
Real Estate Construction Loans [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs
Real Estate Construction Loans [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs
Commercial Real Estate Portfolio Segment [Member]
Accruing TDRs	26,812		44,392
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member]
Accruing TDRs	16,130		25,979
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs	5,895		5,961
Commercial Real Estate Portfolio Segment [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs	4,787		12,452
Residential Portfolio Segment [Member]
Accruing TDRs	6,650		8,949
Residential Portfolio Segment [Member] | Payment Deferral [Member]
Accruing TDRs	3,516		5,104
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs	337		789
Residential Portfolio Segment [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs	$ 2,797		$ 3,056

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Note 8 - Loans - Non-accrual Troubled Debt Restructurings (Details) - Non-accruing Troubled Debt Restructuring [Member] - USD ($) $ in Thousands	Sep. 30, 2017	Jun. 30, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2015
Accruing TDRs	$ 33,691	$ 30,045	$ 29,722	$ 20,870	$ 25,442	$ 39,923
Payment Deferral [Member]
Accruing TDRs	15,320		17,431
Contractual Interest Rate Reduction [Member]
Accruing TDRs	1,706		1,795
Rate Reduction and Payment Deferral [Member]
Accruing TDRs	16,665		10,496
Commercial Portfolio Segment [Member]
Accruing TDRs	13,259		14,565
Commercial Portfolio Segment [Member] | Payment Deferral [Member]
Accruing TDRs	13,259		14,565
Commercial Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs
Commercial Portfolio Segment [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs
Commercial Real Estate Portfolio Segment [Member]
Accruing TDRs	19,561		14,633
Commercial Real Estate Portfolio Segment [Member] | Payment Deferral [Member]
Accruing TDRs	1,347		2,510
Commercial Real Estate Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs	1,706		1,795
Commercial Real Estate Portfolio Segment [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs	16,508		10,328
Residential Portfolio Segment [Member]
Accruing TDRs	871		524
Residential Portfolio Segment [Member] | Payment Deferral [Member]
Accruing TDRs	714		356
Residential Portfolio Segment [Member] | Contractual Interest Rate Reduction [Member]
Accruing TDRs
Residential Portfolio Segment [Member] | Rate Reduction and Payment Deferral [Member]
Accruing TDRs	$ 157		$ 168

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Note 8 - Loans - Troubled Debt Restructuring Activity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017
Charge-offs	$ (305)		$ (305)
Accruing Troubled Debt Restructuring [Member]
Beginning balance	79,819	74,708	65,393	81,680	$ 86,555
New restructurings	21,790	18,347	49,973	20,412
Restructured loans restored to accrual status				10,303
Payments	(35,677)	(6,500)	(41,372)	(9,816)
Restructured loans placed on non-accrual status	(3,574)		(9,396)	(1,138)
Expiration of loan concession upon renewal			(2,240)	(14,886)
Ending balance	62,358	86,555	62,358	86,555	62,358
Non-accruing Troubled Debt Restructuring [Member]
Beginning balance	30,045	25,442	29,722	39,923	20,870
New restructurings	2,360	649	2,360	3,794
Restructured loans restored to accrual status	3,574		9,396	1,138
Payments	(1,933)	(1,814)	(5,160)	(9,330)
Restructured loans placed on non-accrual status				(10,303)
Charge-offs	(355)	(3,407)	(1,901)	(4,352)
Foreclosures			(726)
Ending balance	$ 33,691	$ 20,870	$ 33,691	$ 20,870	$ 33,691

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Note 8 - Loans - Portfolio by Risk Rating (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans	$ 12,597,434	$ 11,201,275
Loans held for sale		7,500
Commercial Portfolio Segment [Member]
Loans	2,419,891	2,248,187
Real Estate Construction Portfolio Segment [Member]
Loans	691,486	548,088
Commercial Real Estate Portfolio Segment [Member]
Loans	6,377,047	5,785,248
Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans	3,104,288	2,615,759
Consumer Portfolio Segment [Member]
Loans	4,722	3,993
Pass [Member]
Loans	11,794,042	10,513,473
Loans held for sale
Pass [Member] | Commercial Portfolio Segment [Member]
Loans	2,216,816	2,023,114
Pass [Member] | Real Estate Construction Portfolio Segment [Member]
Loans	604,363	469,909
Pass [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans	5,904,023	5,410,623
Pass [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans	3,064,118	2,605,834
Pass [Member] | Consumer Portfolio Segment [Member]
Loans	4,722	3,993
Special Mention [Member]
Loans	549,639	435,032
Loans held for sale
Special Mention [Member] | Commercial Portfolio Segment [Member]
Loans	146,479	140,682
Special Mention [Member] | Real Estate Construction Portfolio Segment [Member]
Loans	65,375	44,129
Special Mention [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans	305,927	250,221
Special Mention [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans	31,858
Special Mention [Member] | Consumer Portfolio Segment [Member]
Loans
Substandard [Member]
Loans	253,722	252,672
Loans held for sale		7,500
Substandard [Member] | Commercial Portfolio Segment [Member]
Loans	56,565	84,293
Substandard [Member] | Real Estate Construction Portfolio Segment [Member]
Loans	21,748	34,050
Substandard [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans	167,097	124,404
Substandard [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans	8,312	9,925
Substandard [Member] | Consumer Portfolio Segment [Member]
Loans
Doubtful [Member]
Loans	31	98
Loans held for sale
Doubtful [Member] | Commercial Portfolio Segment [Member]
Loans	31	98
Doubtful [Member] | Real Estate Construction Portfolio Segment [Member]
Loans
Doubtful [Member] | Commercial Real Estate Portfolio Segment [Member]
Loans
Doubtful [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans
Doubtful [Member] | Consumer Portfolio Segment [Member]
Loans

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Note 8 - Loans - Allowance for Loan Losses by Portfolio Segment and Based on Impairment Method (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Loans individually evaluated for impairment, allowance	$ 2,606	$ 2,796
Loans individually evaluated for impairment, balance	127,672	115,074
Loans collectively evaluated for impairment, allowance	118,929	116,170
Loans collectively evaluated for impairment, balance	12,469,762	11,086,201
Loans, allowance	121,535	118,966
Loans	12,597,434	11,201,275
Commercial Portfolio Segment [Member]
Loans individually evaluated for impairment, allowance	1,461	1,827
Loans individually evaluated for impairment, balance	37,358	27,761
Loans collectively evaluated for impairment, allowance	49,578	47,376
Loans collectively evaluated for impairment, balance	2,382,533	2,220,426
Loans, allowance	51,039	49,203
Loans	2,419,891	2,248,187
Real Estate Construction Portfolio Segment [Member]
Loans individually evaluated for impairment, allowance
Loans individually evaluated for impairment, balance	21,748	5,458
Loans collectively evaluated for impairment, allowance	22,008	23,268
Loans collectively evaluated for impairment, balance	669,738	542,630
Loans, allowance	22,008	23,268
Loans	691,486	548,088
Commercial Real Estate Portfolio Segment [Member]
Loans individually evaluated for impairment, allowance	823	573
Loans individually evaluated for impairment, balance	55,190	64,470
Loans collectively evaluated for impairment, allowance	36,579	34,291
Loans collectively evaluated for impairment, balance	6,321,857	5,720,778
Loans, allowance	37,402	34,864
Loans	6,377,047	5,785,248
Residential Mortgage and Equity Lines Portfolio Segment [Member]
Loans individually evaluated for impairment, allowance	322	396
Loans individually evaluated for impairment, balance	13,376	17,385
Loans collectively evaluated for impairment, allowance	10,740	11,224
Loans collectively evaluated for impairment, balance	3,090,912	2,598,374
Loans, allowance	11,062	11,620
Loans	3,104,288	2,615,759
Consumer Portfolio Segment [Member]
Loans individually evaluated for impairment, allowance
Loans individually evaluated for impairment, balance
Loans collectively evaluated for impairment, allowance	24	11
Loans collectively evaluated for impairment, balance	4,722	3,993
Loans, allowance	24	11
Loans	$ 4,722	$ 3,993

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Note 8 - Loans - Allowance for Loan Losses by Portfolio Segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
June 30, 2017 Ending Balance	$ 115,809	$ 122,948	$ 118,966	$ 138,963
Provision/(credit) for possible credit losses			(2,500)	(15,650)
Charge-offs	(385)	(7,903)	(2,670)	(17,865)
Recoveries	6,111	2,897	7,739	12,494
Net (charge-offs)/recoveries	5,726	(5,006)	5,069	(5,371)
September 30, 2017 Ending Balance	121,535	117,942	121,535	117,942
Reserve for impaired loans	2,606	2,943	2,606	2,943
Reserve for non-impaired loans	118,929	114,999	118,929	114,999
Reserve for off-balance sheet credit commitments	4,254	2,229	4,254	2,229
Commercial Portfolio Segment [Member]
June 30, 2017 Ending Balance	46,744	50,590	49,203	56,199
Provision/(credit) for possible credit losses	3,800	4,380	2,245	5,815
Charge-offs	(80)	(3,277)	(1,810)	(12,035)
Recoveries	575	2,006	1,401	3,720
Net (charge-offs)/recoveries	495	(1,271)	(409)	(8,315)
September 30, 2017 Ending Balance	51,039	53,699	51,039	53,699
Reserve for impaired loans	1,461	1,320	1,461	1,320
Reserve for non-impaired loans	49,578	52,379	49,578	52,379
Reserve for off-balance sheet credit commitments	2,760	2,112	2,760	2,112
Real Estate Construction Portfolio Segment [Member]
June 30, 2017 Ending Balance	17,844	10,753	23,268	22,170
Provision/(credit) for possible credit losses	4,117	(2,056)	(1,403)	(20,796)
Charge-offs
Recoveries	47	548	143	7,871
Net (charge-offs)/recoveries	47	548	143	7,871
September 30, 2017 Ending Balance	22,008	9,245	22,008	9,245
Reserve for impaired loans
Reserve for non-impaired loans	22,008	9,245	22,008	9,245
Reserve for off-balance sheet credit commitments	1,206		1,206
Commercial Real Estate Portfolio Segment [Member]
June 30, 2017 Ending Balance	36,840	46,090	34,864	49,440
Provision/(credit) for possible credit losses	(4,615)	3,132	(2,775)	295
Charge-offs	(305)	(4,626)	(860)	(5,681)
Recoveries	5,482	337	6,173	879
Net (charge-offs)/recoveries	5,177	(4,289)	5,313	(4,802)
September 30, 2017 Ending Balance	37,402	44,933	37,402	44,933
Reserve for impaired loans	823	1,248	823	1,248
Reserve for non-impaired loans	36,579	43,685	36,579	43,685
Reserve for off-balance sheet credit commitments	109	35	109	35
Residential Mortgage and Equity Lines Portfolio Segment [Member]
June 30, 2017 Ending Balance	14,364	15,503	11,620	11,145
Provision/(credit) for possible credit losses	(3,309)	(5,452)	(580)	(963)
Charge-offs				(149)
Recoveries	7	6	22	24
Net (charge-offs)/recoveries	7	6	22	(125)
September 30, 2017 Ending Balance	11,062	10,057	11,062	10,057
Reserve for impaired loans	322	375	322	375
Reserve for non-impaired loans	10,740	9,682	10,740	9,682
Reserve for off-balance sheet credit commitments	175	80	175	80
Installment and Other Loans [Member ]
June 30, 2017 Ending Balance	17	12	11	9
Provision/(credit) for possible credit losses	7	(4)	13	(1)
Charge-offs
Recoveries
Net (charge-offs)/recoveries
September 30, 2017 Ending Balance	24	8	24	8
Reserve for impaired loans
Reserve for non-impaired loans	24	8	24	8
Reserve for off-balance sheet credit commitments	$ 4	$ 2	$ 4	$ 2

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Note 10 - Borrowed Funds (Details Textual) $ in Thousands	Sep. 30, 2017 USD ($)	Dec. 31, 2016 USD ($)
Securities Sold under Agreements to Repurchase	$ 100,000	$ 350,000
Weighted Average Rate Of Securities Sold Under Agreements	2.86%	4.06%
Advances from Federal Home Loan Banks	$ 595,000	$ 350,000
Mature in October 2017 [Member]
Advances from Federal Home Loan Banks	490,000
Mature in 2018 [Member]
Advances from Federal Home Loan Banks	55,000
Mature in December 2019 [Member]
Advances from Federal Home Loan Banks	50,000
Over-night Borrowings [Member]
Advances from Federal Home Loan Banks	$ 450,000	$ 275,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate	1.16%	0.55%
Non Overnight Borrowings [Member]
Advances from Federal Home Loan Banks	$ 145,000
Federal Home Loan Bank, Advances, Branch of FHLB Bank, Interest Rate	1.35%
Securities Sold under Agreements to Repurchase [Member]
Investment Securities Pledged As Collateral	$ 108,000	$ 372,000
Non Callable Fixed Rate Securities [Member]
Number Of Securities Sold Under Agreements To Repurchase	2
Non Callable Fixed Rate Securities [Member] | Mature in August 2016 [Member]
Long-term Debt, Maturities, Repayments of Principal in Next Twelve Months	$ 50,000
Long-term Debt, Maturities, Repayments of Principal in Year Two	$ 50,000

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Note 11 - Income Taxes (Details Textual) - USD ($) $ in Thousands	3 Months Ended			6 Months Ended	9 Months Ended
	Sep. 30, 2017	Mar. 31, 2017	Sep. 30, 2016	Jun. 30, 2017	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Effective Income Tax Rate Reconciliation, Percent	41.40%		25.50%	29.00%	41.40%	34.00%
Income Tax Expense (Benefit)	$ 35,163	$ (2,600)	$ 15,808		$ 71,099	$ 50,756
Income Taxes Receivable				$ 19,400			$ 14,600
Domestic Tax Authority [Member] | California Franchise Tax Board [Member] | Earliest Tax Year [Member]
Open Tax Year				2012

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Note 12 - Fair Value Measurements (Details Textual) - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Number of Reporting Units	2
Fair Value Measurement With Unobservable Inputs Reconciliation Recurring Basis Warrants	$ 97,000	$ 79,000
Other Real Estate, Foreclosed Assets, and Repossessed Assets	$ 18,115,000	20,070,000
Accounts Receivable Collateral [Member]
Collateral Discount Rates	55.00%
Inventory Collateral [Member]
Collateral Discount Rates	65.00%
Net of Estimated Disposal Costs [Member]
Other Real Estate, Foreclosed Assets, and Repossessed Assets	$ 18,100,000	$ 20,100,000
Minimum [Member]
Expected Life Of Warrants	1 year
Estimated Sales Cost Applied To Collateral	3.00%
Minimum [Member] | Warrants Outstanding [Member]
Fair Value Assumptions, Risk Free Interest Rate	1.51%
Fair Value Assumptions, Expected Volatility Rate	5.05%
Maximum [Member]
Expected Life Of Warrants	6 years
Estimated Sales Cost Applied To Collateral	6.00%
Maximum [Member] | Warrants Outstanding [Member]
Fair Value Assumptions, Risk Free Interest Rate	2.28%
Fair Value Assumptions, Expected Volatility Rate	12.60%
Core Deposits [Member] | Minimum [Member]
Finite-Lived Intangible Asset, Useful Life	4 years
Core Deposits [Member] | Maximum [Member]
Finite-Lived Intangible Asset, Useful Life	10 years

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Note 12 - Fair Value Measurements - Assets and Liabilities Measured at Fair Value on a Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Securities available-for-sale	$ 1,368,487	$ 1,314,345
Assets, fair value disclosure	1,372,623	1,316,664
Liabilities, fair value disclosure	6,366	6,997
Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	434,453	513,376
Assets, fair value disclosure	434,453	513,376
Liabilities, fair value disclosure
Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	934,034	800,969
Assets, fair value disclosure	938,073	803,209
Liabilities, fair value disclosure	6,366	6,997
Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Assets, fair value disclosure	97	79
Liabilities, fair value disclosure
US Treasury Securities [Member]
Securities available-for-sale	399,436	489,017
US Treasury Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	399,436	489,017
US Treasury Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale
US Treasury Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
US Government Corporations and Agencies Securities [Member]
Securities available-for-sale	9,700
US Government Corporations and Agencies Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
US Government Corporations and Agencies Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	9,700
US Government Corporations and Agencies Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
US Government-sponsored Enterprises Debt Securities [Member]
Securities available-for-sale	393,722	390,331
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	393,722	390,331
US Government-sponsored Enterprises Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Commercial Mortgage Backed Securities [Member]
Securities available-for-sale	446,065	336,260
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	446,065	336,260
Commercial Mortgage Backed Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
US States and Political Subdivisions Debt Securities [Member]
Securities available-for-sale	1,931
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	1,931
US States and Political Subdivisions Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Collateralized Mortgage Obligations [Member]
Securities available-for-sale	1,710	28
Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	1,710	28
Collateralized Mortgage Obligations [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Corporate Debt Securities [Member]
Securities available-for-sale	80,906	74,350
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale	80,906	74,350
Corporate Debt Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Mutual Funds [Member]
Securities available-for-sale	6,271	6,230
Mutual Funds [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	6,271	6,230
Mutual Funds [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale
Mutual Funds [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Preferred Stock of Government Sponsored Entities [Member]
Securities available-for-sale	8,087	7,308
Preferred Stock of Government Sponsored Entities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	8,087	7,308
Preferred Stock of Government Sponsored Entities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale
Preferred Stock of Government Sponsored Entities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Other Equity Securities [Member]
Securities available-for-sale	20,659	10,821
Other Equity Securities [Member] | Fair Value, Inputs, Level 1 [Member]
Securities available-for-sale	20,659	10,821
Other Equity Securities [Member] | Fair Value, Inputs, Level 2 [Member]
Securities available-for-sale
Other Equity Securities [Member] | Fair Value, Inputs, Level 3 [Member]
Securities available-for-sale
Warrant [Member]
Assets, fair value disclosure	97	79
Warrant [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, fair value disclosure
Warrant [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value disclosure
Warrant [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value disclosure	97	79
Interest Rate Swap [Member]
Assets, fair value disclosure	2,314	938
Liabilities, fair value disclosure	5,049	3,744
Interest Rate Swap [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, fair value disclosure
Liabilities, fair value disclosure
Interest Rate Swap [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value disclosure	2,314	938
Liabilities, fair value disclosure	5,049	3,744
Interest Rate Swap [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value disclosure
Liabilities, fair value disclosure
Foreign Exchange Contract [Member]
Assets, fair value disclosure	1,725	1,302
Liabilities, fair value disclosure	1,083	3,132
Foreign Exchange Contract [Member] | Fair Value, Inputs, Level 1 [Member]
Assets, fair value disclosure
Liabilities, fair value disclosure
Foreign Exchange Contract [Member] | Fair Value, Inputs, Level 2 [Member]
Assets, fair value disclosure	1,725	1,302
Liabilities, fair value disclosure	1,083	3,132
Foreign Exchange Contract [Member] | Fair Value, Inputs, Level 3 [Member]
Assets, fair value disclosure
Liabilities, fair value disclosure
Option Contracts [Member]
Liabilities, fair value disclosure	234	121
Option Contracts [Member] | Fair Value, Inputs, Level 1 [Member]
Liabilities, fair value disclosure
Option Contracts [Member] | Fair Value, Inputs, Level 2 [Member]
Liabilities, fair value disclosure	234	121
Option Contracts [Member] | Fair Value, Inputs, Level 3 [Member]
Liabilities, fair value disclosure

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Note 12 - Fair Value Measurements - Financial Assets and Liabilities Measured on a Non-recurring Basis (Details) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended				12 Months Ended
	Sep. 30, 2017		Sep. 30, 2016		Sep. 30, 2017		Sep. 30, 2016		Dec. 31, 2016		Dec. 31, 2015
Total at Fair Value	$ 58,974				$ 58,974				$ 37,981
Total Losses	417		$ (19)		1,044		$ 428		1,307		$ 2,507
Fair Value, Inputs, Level 1 [Member]
Total at Fair Value
Fair Value, Inputs, Level 2 [Member]
Total at Fair Value	6,317				6,317				6,006
Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	52,657				52,657				31,975
Impaired Loans [Member]
Total at Fair Value	45,312				45,312				23,936
Total Losses					25				322		1,550
Impaired Loans [Member] | Fair Value, Inputs, Level 1 [Member]
Total at Fair Value
Impaired Loans [Member] | Fair Value, Inputs, Level 2 [Member]
Total at Fair Value
Impaired Loans [Member] | Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	45,312				45,312				23,936
Impaired Loans [Member] | Commercial Portfolio Segment [Member]
Total at Fair Value	12,525				12,525				2,813
Total Losses					25				322		806
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Fair Value, Inputs, Level 1 [Member]
Total at Fair Value
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Fair Value, Inputs, Level 2 [Member]
Total at Fair Value
Impaired Loans [Member] | Commercial Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	12,525				12,525				2,813
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member]
Total at Fair Value	21,997				21,997				9,444
Total Losses											598
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Inputs, Level 1 [Member]
Total at Fair Value
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Inputs, Level 2 [Member]
Total at Fair Value
Impaired Loans [Member] | Commercial Real Estate Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	21,997				21,997				9,444
Impaired Loans [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member]
Total at Fair Value	10,790				10,790				11,679
Total Losses											146
Impaired Loans [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member] | Fair Value, Inputs, Level 1 [Member]
Total at Fair Value
Impaired Loans [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member] | Fair Value, Inputs, Level 2 [Member]
Total at Fair Value
Impaired Loans [Member] | Residential Mortgage and Equity Lines Portfolio Segment [Member] | Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	10,790				10,790				11,679
Other Real Estate Owned [Member]
Total at Fair Value	10,639	[1]			10,639	[1]			10,378	[2]
Total Losses	405	[1]	(206)	[1]	654	[1]	9	[1]	9	[2]	404	[2]
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 1 [Member]
Total at Fair Value		[1]				[1]				[2]
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 2 [Member]
Total at Fair Value	6,317	[1]			6,317	[1]			6,006	[2]
Other Real Estate Owned [Member] | Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	4,322	[1]			4,322	[1]			4,372	[2]
Equity Investments [Member]
Total at Fair Value	3,023				3,023				3,667
Total Losses	12		$ 187		365		$ 419		976		$ 553
Equity Investments [Member] | Fair Value, Inputs, Level 1 [Member]
Total at Fair Value
Equity Investments [Member] | Fair Value, Inputs, Level 2 [Member]
Total at Fair Value
Equity Investments [Member] | Fair Value, Inputs, Level 3 [Member]
Total at Fair Value	$ 3,023				$ 3,023				$ 3,667

[1] Other real estate owned balance of $18.1 million in the condensed consolidated balance sheet is net of estimated disposal costs.

[2] Other real estate owned balance of $20.1 million in the condensed consolidated balance sheet is net of estimated disposal costs.

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Note 13 - Fair Value of Financial Instruments - Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Cash and due from banks	$ 167,886	$ 218,017
Securities available-for-sale	1,368,487	1,314,345
Loans held for sale		7,500
Loans, net	12,403,100	11,006,344
Investment in Federal Home Loan Bank stock	21,948	17,250
Investment in Federal Reserve Bank stock	8,733
Warrants	2,314	938
Foreign exchange contracts with gain	69,278	82,439
Foreign exchange contracts with gain, fair value	1,725	1,302
Interest rate swaps	155,671	361,526
Interest rate swaps, fair value	2,314	938
Deposits	12,573,127	11,680,017
Securities sold under agreements to repurchase	100,549	351,989
Advances from Federal Home Loan Bank	595,037	350,062
Other borrowings	151,643	15,944
Long-term debt	68,056	63,169
Option contracts	12,307	12,117
Option contracts, fair value	234	121
Foreign exchange contracts with loss	86,625	89,545
Foreign exchange contracts with loss, fair value	1,083	3,132
Interest rate swaps	510,841	119,136
Interest rate swaps, fair value	5,049	3,744
Commitments to extend credit	2,287,498	2,062,241
Commitments to extend credit, fair value	(6,924)	(6,025)
Standby letters of credit	140,682	75,396
Standby letters of credit, fair value	(1,699)	(668)
Other letters of credit	41,868	37,283
Other letters of credit, fair value	(218)	(16)
Bill of lading guarantees	24	75
Bill of lading guarantees, fair value
Warrants [Member]
Warrants	97
Reported Value Measurement [Member]
Cash and due from banks	167,886	218,017
Short-term investments	573,059	967,067
Securities available-for-sale	1,368,487	1,314,345
Loans held for sale		7,500
Loans, net	12,472,475	11,077,315
Investment in Federal Home Loan Bank stock	21,948	17,250
Investment in Federal Reserve Bank stock	8,733
Deposits	12,561,695	11,674,726
Securities sold under agreements to repurchase	100,000	350,000
Advances from Federal Home Loan Bank	595,000	350,000
Other borrowings	153,574	17,662
Long-term debt	119,136	119,136
Reported Value Measurement [Member] | Warrants [Member]
Warrants	97	79
Estimate of Fair Value Measurement [Member]
Cash and due from banks	167,886	218,017
Short-term investments	573,059	967,067
Securities available-for-sale	1,368,487	1,314,345
Loans held for sale		7,500
Loans, net	12,403,100	11,006,344
Investment in Federal Home Loan Bank stock	21,948	17,250
Investment in Federal Reserve Bank stock	8,733
Deposits	12,573,127	11,680,017
Securities sold under agreements to repurchase	100,549	351,989
Advances from Federal Home Loan Bank	595,037	350,062
Other borrowings	151,643	15,944
Long-term debt	68,056	63,169
Estimate of Fair Value Measurement [Member] | Warrants [Member]
Warrants	$ 97	$ 79

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Note 13 - Fair Value of Financial Instruments - Fair Value Hierarchy of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Cash and due from banks	$ 167,886	$ 218,017
Short-term investments	573,059	967,067
Available-for-sale Securities	1,368,487	1,314,345
Loans held-for-sale		7,500
Loans, net	12,403,100	11,006,344
Investment in Federal Home Loan Bank stock	21,948	17,250
Investment in Federal Reserve Bank stock	8,733
Warrants	2,314	938
Deposits	12,573,127	11,680,017
Securities sold under agreements to repurchase	100,549	351,989
Advances from Federal Home Loan Bank	595,037	350,062
Other borrowings	151,643	15,944
Long-term debt	68,056	63,169
Warrants [Member]
Warrants	97
Warrants		79
Fair Value, Inputs, Level 1 [Member]
Cash and due from banks	167,886	218,017
Short-term investments	573,059	967,067
Available-for-sale Securities	434,453	513,376
Loans held-for-sale
Loans, net
Investment in Federal Home Loan Bank stock
Investment in Federal Reserve Bank stock
Deposits
Securities sold under agreements to repurchase
Advances from Federal Home Loan Bank
Other borrowings
Long-term debt
Fair Value, Inputs, Level 1 [Member] | Warrants [Member]
Warrants
Warrants
Fair Value, Inputs, Level 2 [Member]
Cash and due from banks
Short-term investments
Available-for-sale Securities	934,034	800,969
Loans held-for-sale
Loans, net
Investment in Federal Home Loan Bank stock	21,948	17,250
Investment in Federal Reserve Bank stock	8,733
Deposits
Securities sold under agreements to repurchase	100,549	351,989
Advances from Federal Home Loan Bank	595,037	350,062
Other borrowings
Long-term debt	68,056	63,169
Fair Value, Inputs, Level 2 [Member] | Warrants [Member]
Warrants
Warrants
Fair Value, Inputs, Level 3 [Member]
Cash and due from banks
Short-term investments
Available-for-sale Securities
Loans held-for-sale		7,500
Loans, net	12,403,100	11,006,344
Investment in Federal Home Loan Bank stock
Investment in Federal Reserve Bank stock
Deposits	12,573,127	11,680,017
Securities sold under agreements to repurchase
Advances from Federal Home Loan Bank
Other borrowings	151,643	15,944
Long-term debt
Fair Value, Inputs, Level 3 [Member] | Warrants [Member]
Warrants	$ 97
Warrants		$ 79

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Note 14 - Goodwill and Goodwill Impairment (Details Textual)	9 Months Ended
	Sep. 30, 2017
Number of Reporting Units	2

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Note 15 - Financial Derivatives (Details Textual) - USD ($)		3 Months Ended		9 Months Ended
	May 31, 2014	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Junior Subordinated Notes	$ 119,100,000
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax		$ 157,000	$ 804,000	$ (94,000)	$ (3,598,000)
Cash [Member]
Collateral Already Posted, Aggregate Fair Value		6,300,000		6,300,000
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member]
Derivative Outstanding, Notional Amount	$ 119,100,000	119,100,000		119,100,000
Derivative Original Maturity	10 years
Derivative, Average Fixed Interest Rate	2.61%
Derivative, Average Variable Interest Rate	1.32%
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax				(2,300,000)
Interest Rate Swap [Member] | Cash Flow Hedging [Member] | Designated as Hedging Instrument [Member] | Interest Expense [Member]
Net Accrued on Interest Rate Swaps		407,000	588,000	1,300,000	1,800,000
Interest Rate Swap [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member]
Derivative Outstanding, Notional Amount		$ 510,600,000		$ 510,600,000
Derivative, Average Fixed Interest Rate		4.55%		4.55%
Derivative, Average Variable Interest Rate		4.16%		4.16%
Other Comprehensive Income (Loss), Unrealized Gain (Loss) on Derivatives Arising During Period, Net of Tax				$ 1,900,000
Net Accrued on Interest Rate Swaps		$ 514,000	$ 879,000	$ 1,900,000	$ 2,800,000
Derivative, Average Basis Spread on Variable Rate		2.93%		2.93%
Interest Rate Swap [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Minimum [Member]
Derivative Original Maturity				4 years
Interest Rate Swap [Member] | Fair Value Hedging [Member] | Designated as Hedging Instrument [Member] | Maximum [Member]
Derivative Original Maturity				8 years
Negative Fair Value [Member]
Notional Amount Of Option Contract		$ 12,300,000		$ 12,300,000		$ 12,100,000
Open Option Contracts Fair Value		234,000		234,000		121,000
Sum Of Spot And Forward Contract Notional Amount		86,600,000		86,600,000		89,500,000
Negative Fair Value		1,100,000		1,100,000		3,100,000
Positive Fair Value [Member]
Sum Of Spot And Forward Contract Notional Amount		69,300,000		69,300,000		82,400,000
Positive Fair Value		$ 1,700,000		$ 1,700,000		$ 1,300,000

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Note 16 - Balance Sheet Offsetting - Financial Instruments that are Eligible for Offset in the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Sep. 30, 2017	Dec. 31, 2016
Derivative assets, gross	$ 2,314	$ 938
Derivative assets, net	2,314	938
Derivative assets not offset	2,314	938
Securities sold under agreements to repurchase	100,000	350,000
Securities sold under agreements to repurchase, net	100,000	350,000
Securities sold under agreements to repurchase, collateral posted	(100,000)	(350,000)
Derivative liabilities, gross	5,049	3,744
Derivative liabilities, net	5,049	3,744
Derivatives, collateral posted	$ (5,049)	$ (3,744)

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Note 17 - Stockholders' Equity (Details Textual) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended	12 Months Ended
	Jul. 14, 2017	Sep. 30, 2017	Dec. 31, 2016
Stockholders' Equity Attributable to Parent		$ 1,968,699	$ 1,828,539
Stockholders' Equity, Period Increase (Decrease)		140,200	$ 150,100
Dividends, Common Stock, Cash		50,500
Adjustments Related to Tax Withholding for Share-based Compensation		$ 5,100
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		932,461	943,345
U.S. Treasury [Member]
Class of Warrant or Right, Number of Securities Called by Warrants or Rights		1,846,374
Class of Warrant or Right, Exercise Price of Warrants or Rights		$ 20.96	$ 20.65
Class of Warrant or Right, Increase in Warrants Exercisable, Percentage			1.50%
SinoPac Bancorp [Member]
Business Combination, Consideration Transferred, Equity Interests Issued and Issuable	$ 34,862

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Note 17 - Stockholders' Equity - Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Beginning balance, loss, net of tax			$ 1,828,539
Ending balance, loss, net of tax	$ 1,968,699		1,968,699
Accumulated Net Investment Gain (Loss) Attributable to Parent [Member]
Beginning balance, loss, net of tax	1,001	$ 8,539	(1,545)	$ (5,431)
Net unrealized (losses)/gains arising during the period, net of tax	1,060	938	3,338	15,748
Reclassification adjustment for net losses/(gains) included in net income, net of tax	(14)	(981)	254	(1,821)
Total other comprehensive (loss)/income, net of tax	1,046	(43)	3,592	13,927
Ending balance, loss, net of tax	2,047	8,496	2,047	8,496
Net unrealized (losses)/gains arising during the period, pre-tax	1,829	1,618	5,759	27,170
Reclassification adjustment for net losses/(gains) included in net income, pre-tax	(24)	(1,692)	439	(3,141)
Total other comprehensive (loss)/income, pre-tax	1,805	(74)	6,198	24,029
Net unrealized (losses)/gains arising during the period, tax	769	680	2,421	11,422
Reclassification adjustment for net losses/(gains) included in net income, tax	(10)	(711)	185	(1,320)
Total other comprehensive (loss)/income, tax	759	(31)	2,606	10,102
Accumulated Net Gain (Loss) from Cash Flow Hedges Attributable to Parent [Member]
Beginning balance, loss, net of tax	(2,421)	(7,397)	(2,170)	(2,995)
Net unrealized (losses)/gains arising during the period, net of tax	157	804	(94)	(3,598)
Reclassification adjustment for net losses/(gains) included in net income, net of tax
Total other comprehensive (loss)/income, net of tax	157	804	(94)	(3,598)
Ending balance, loss, net of tax	(2,264)	(6,593)	(2,264)	(6,593)
Net unrealized (losses)/gains arising during the period, pre-tax	271	1,387	(162)	(6,208)
Reclassification adjustment for net losses/(gains) included in net income, pre-tax
Total other comprehensive (loss)/income, pre-tax	271	1,387	(162)	(6,208)
Net unrealized (losses)/gains arising during the period, tax	114	583	(68)	(2,610)
Reclassification adjustment for net losses/(gains) included in net income, tax
Total other comprehensive (loss)/income, tax	114	583	(68)	(2,610)
AOCI Attributable to Parent [Member]
Beginning balance, loss, net of tax	(1,420)	1,142	(3,715)	(8,426)
Net unrealized (losses)/gains arising during the period, net of tax	1,217	1,742	3,244	12,150
Reclassification adjustment for net losses/(gains) included in net income, net of tax	(14)	(981)	254	(1,821)
Total other comprehensive (loss)/income, net of tax	1,203	761	3,498	10,329
Ending balance, loss, net of tax	(217)	1,903	(217)	1,903
Net unrealized (losses)/gains arising during the period, pre-tax	2,100	3,005	5,597	20,962
Reclassification adjustment for net losses/(gains) included in net income, pre-tax	(24)	(1,692)	439	(3,141)
Total other comprehensive (loss)/income, pre-tax	2,076	1,313	6,036	17,821
Net unrealized (losses)/gains arising during the period, tax	883	1,263	2,353	8,812
Reclassification adjustment for net losses/(gains) included in net income, tax	(10)	(711)	185	(1,320)
Total other comprehensive (loss)/income, tax	$ 873	$ 552	$ 2,538	$ 7,492

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Note 18 - Stock Repurchase Program (Details Textual) - February 2016 Repurchase Program [Member] - USD ($) $ / shares in Thousands, $ in Millions	Feb. 01, 2016	Sep. 30, 2017	Dec. 31, 2016
Stock Repurchase Program, Number of Shares Authorized to be Repurchased	45,000,000
Treasury Stock, Shares, Acquired	1,380,578
Treasury Stock, Value, Acquired, Cost Method	$ 37.5
Treasury Stock Acquired, Average Cost Per Share	$ 27,130
Stock Repurchase Program, Remaining Number of Shares Authorized to be Repurchased		7,500,000	7,500,000

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Note 19 - Subsequent Events (Details Textual)	Sep. 30, 2017
California [Member]
Number Of Branch Locations	43
NEW YORK
Number Of Branch Locations	12
Illinois [Member]
Number Of Branch Locations	3
WASHINGTON Member
Number Of Branch Locations	3
Texas [Member]
Number Of Branch Locations	2
Maryland [Member]
Number Of Branch Locations	1
Massachusetts [Member]
Number Of Branch Locations	1
Nevada [Member]
Number Of Branch Locations	1
New Jersey [Member]
Number Of Branch Locations	1
HONG KONG
Number Of Branch Locations	1