Loans Receivable and Allowance for Loan Losses | Loans Receivable and Allowance for Loan Losses The following is a summary of loans receivable by major category: March 31, 2016 December 31, 2015 (In thousands) Loan portfolio composition Real estate loans: Residential $ 32,390 $ 33,797 Commercial & industrial 4,957,751 4,912,655 Construction 142,376 123,030 Total real estate loans 5,132,517 5,069,482 Commercial business 1,032,078 980,153 Trade finance 86,342 99,163 Consumer and other 124,064 102,573 Total loans outstanding 6,375,001 6,251,371 Less: deferred loan fees (3,066 ) (3,030 ) Loans receivable 6,371,935 6,248,341 Less: allowance for loan losses (76,856 ) (76,408 ) Loans receivable, net of allowance for loan losses $ 6,295,079 $ 6,171,933 The loan portfolio is made up of four segments: real estate loans, commercial business, trade finance and consumer and other. These segments are further segregated between loans accounted for under the amortized cost method (“Legacy Loans”) and acquired loans that were originally recorded at fair value with no carryover of the related pre-acquisition allowance for loan losses (“Acquired Loans”). Acquired Loans are further segregated between Acquired Credit Impaired Loans (loans with credit deterioration on the acquisition date and accounted for under ASC 310-30, or “ACILs”) and Acquired Performing Loans (loans that were pass graded on the acquisition date and the fair value adjustment is amortized over the contractual life under ASC 310-20, or “APLs”). The following table presents changes in the accretable discount on the ACILs for the three months ended March 31, 2016 and 2015 : Three Months Ended March 31, 2016 2015 (In thousands) Balance at beginning of period $ 23,777 $ 24,051 Accretion (3,029 ) (1,555 ) Changes in expected cash flows 1,349 149 Balance at end of period $ 22,097 $ 22,645 On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of the ACILs is the “accretable yield.” The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. The accretable yield will change from period to period due to the following: 1) estimates of the remaining life of acquired loans will affect the amount of future interest income; 2) indices for variable rates of interest on ACILs may change; and 3) estimates of the amount of the contractual principal and interest that will not be collected (nonaccretable difference) may change. The following tables detail the activity in the allowance for loan losses by portfolio segment for the three months ended March 31, 2016 and 2015 : Legacy Acquired Total Real Estate Commercial Business Trade Finance Consumer and Other Real Estate Commercial Business Trade Finance Consumer and Other (In thousands) Three Months Ended March 31, 2016 Balance, beginning of period $ 42,829 $ 16,332 $ 3,592 $ 556 $ 12,823 $ 214 $ — $ 62 $ 76,408 Provision (credit) for loan losses (1,218 ) 3,147 (1,507 ) 276 (82 ) (112 ) — (4 ) 500 Loans charged off (19 ) (621 ) — (65 ) (116 ) — — — (821 ) Recoveries of charge offs 523 190 — 1 1 52 — 2 769 Balance, end of period $ 42,115 $ 19,048 $ 2,085 $ 768 $ 12,626 $ 154 $ — $ 60 $ 76,856 Legacy Acquired Total Real Estate Commercial Business Trade Finance Consumer and Other Real Estate Commercial Business Trade Finance Consumer and Other (In thousands) Three Months Ended March 31, 2015 Balance, beginning of period $ 38,775 $ 15,986 $ 3,456 $ 427 $ 8,573 $ 485 $ — $ 56 $ 67,758 Provision (credit) for loan losses (3,621 ) (22 ) (186 ) (1 ) 5,310 23 — (3 ) 1,500 Loans charged off (182 ) (451 ) (229 ) (13 ) (159 ) (87 ) — (4 ) (1,125 ) Recoveries of charge offs 800 655 — 3 — 1 — 2 1,461 Balance, end of period $ 35,772 $ 16,168 $ 3,041 $ 416 $ 13,724 $ 422 $ — $ 51 $ 69,594 The following tables disaggregate the allowance for loan losses and the loans outstanding by impairment methodology at March 31, 2016 and December 31, 2015 : March 31, 2016 Legacy Acquired Total Real Estate Commercial Business Trade Finance Consumer and Other Real Estate Commercial Business Trade Finance Consumer and Other (In thousands) Allowance for loan losses: Individually evaluated for impairment $ 1,760 $ 6,513 $ 1,307 $ — $ 208 $ 96 $ — $ — $ 9,884 Collectively evaluated for impairment 40,355 12,535 778 768 541 58 — 60 55,095 ACILs — — — — 11,877 — — — 11,877 Total $ 42,115 $ 19,048 $ 2,085 $ 768 $ 12,626 $ 154 $ — $ 60 $ 76,856 Loans outstanding: Individually evaluated for impairment $ 65,354 $ 46,534 $ 8,081 $ 786 $ 17,952 $ 1,262 $ — $ 455 $ 140,424 Collectively evaluated for impairment 4,815,539 949,346 78,261 84,441 166,190 16,328 — 19,813 6,129,918 ACILs — — — — 67,482 18,608 — 18,569 104,659 Total $ 4,880,893 $ 995,880 $ 86,342 $ 85,227 $ 251,624 $ 36,198 $ — $ 38,837 $ 6,375,001 December 31, 2015 Legacy Acquired Total Real Estate Commercial Business Trade Finance Consumer and Other Real Estate Commercial Business Trade Finance Consumer and Other (In thousands) Allowance for loan losses: Individually evaluated for impairment $ 1,663 $ 4,188 $ 2,603 $ — $ 225 $ 128 $ — $ — $ 8,807 Collectively evaluated for impairment 41,166 12,144 989 556 616 86 — 62 55,619 ACILs — — — — 11,982 — — — 11,982 Total $ 42,829 $ 16,332 $ 3,592 $ 556 $ 12,823 $ 214 $ — $ 62 $ 76,408 Loans outstanding: Individually evaluated for impairment $ 63,376 $ 40,352 $ 12,548 $ 812 $ 19,109 $ 1,235 $ — $ 658 $ 138,090 Collectively evaluated for impairment 4,717,300 896,041 86,615 60,570 200,753 22,660 — 20,533 6,004,472 ACILs — — — — 68,944 19,865 — 20,000 108,809 Total $ 4,780,676 $ 936,393 $ 99,163 $ 61,382 $ 288,806 $ 43,760 $ — $ 41,191 $ 6,251,371 As of March 31, 2016 and December 31, 2015 , the liability for unfunded commitments was $ 1.4 million and $2.0 million , respectively. For the three months ended March 31, 2016 and 2015 , the recognized credit for losses related to unfunded commitments was $570 thousand and $240 thousand , respectively. The recorded investment in individually impaired loans was as follows: March 31, 2016 December 31, 2015 (In thousands) With allocated allowance Without charge off $ 79,747 $ 77,922 With charge off 458 155 With no allocated allowance Without charge off 57,138 57,585 With charge off 3,081 2,428 Allowance on impaired loans (9,884 ) (8,807 ) Impaired loans, net of allowance $ 130,540 $ 129,283 The following tables detail impaired loans (Legacy and APLs that became impaired subsequent to being acquired) as of March 31, 2016 and December 31, 2015 and for the three months ended March 31, 2016 and 2015 and for the year ended December 31, 2015 . Loans with no related allowance for loan losses are believed by management to have adequate collateral securing their carrying value. As of March 31, 2016 For the Three Months Ended March 31, 2016 Total Impaired Loans Recorded Investment* Unpaid Contractual Principal Balance Related Allowance Average Recorded Investment* Interest Income Recognized during Impairment (In thousands) With related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 1,553 1,686 195 1,712 — Hotel & motel 4,526 4,526 258 4,611 57 Gas station & car wash 530 562 26 1,050 — Mixed use 562 1,085 8 563 2 Industrial & warehouse 556 556 — 560 6 Other 24,321 24,562 1,481 24,462 275 Real estate—construction — — — — — Commercial business 39,956 40,326 6,609 35,742 265 Trade finance 8,081 8,083 1,307 10,314 94 Consumer and other 120 120 — 128 1 $ 80,205 $ 81,506 $ 9,884 $ 79,142 $ 700 With no related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 10,906 11,795 — 11,105 100 Hotel & motel 8,107 12,173 — 7,849 22 Gas station & car wash 5,576 8,423 — 4,665 34 Mixed use 2,346 2,589 — 2,364 12 Industrial & warehouse 10,808 12,222 — 9,888 85 Other 12,173 13,473 — 12,712 90 Real estate—construction 1,342 1,465 — 1,355 — Commercial business 7,840 9,770 — 8,950 41 Trade finance — — — — — Consumer and other 1,121 1,176 — 1,228 7 $ 60,219 $ 73,086 $ — $ 60,116 $ 391 Total $ 140,424 $ 154,592 $ 9,884 $ 139,258 $ 1,091 * Unpaid contractual principal balance less charge offs, interest applied to principal and purchase discounts. For the Three Months Ended March 31, 2015 Total Impaired Loans Average Recorded Investment* Interest Income Recognized during Impairment (In thousands) With related allowance: Real estate—residential $ — $ — Real estate—commercial Retail 4,406 44 Hotel & motel 12,493 129 Gas station & car wash 1,359 — Mixed use 481 — Industrial & warehouse 4,516 76 Other 8,845 88 Real estate—construction — — Commercial business 33,856 287 Trade finance 4,509 35 Consumer and other 7 — $ 70,472 $ 659 With no related allowance: Real estate—residential $ — $ — Real estate—commercial Retail 10,792 87 Hotel & motel 5,922 — Gas station & car wash 3,245 25 Mixed use 1,793 9 Industrial & warehouse 11,917 77 Other 8,620 38 Real estate—construction 1,500 — Commercial business 7,958 79 Trade finance 1,638 — Consumer and other 1,084 7 $ 54,469 $ 322 Total $ 124,941 $ 981 * Unpaid contractual principal balance less charge offs, interest applied to principal and purchase discounts. As of March 31, 2016 For the Three Months Ended March 31, 2016 Impaired APLs Recorded Investment* Unpaid Contractual Principal Balance Related Allowance Average Recorded Investment* Interest Income Recognized during Impairment (In thousands) With related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 1,168 1,263 184 1,169 — Hotel & motel — — — — — Gas station & car wash — — — 509 — Mixed use 493 489 8 493 2 Industrial & warehouse — — — — — Other 303 303 16 305 4 Real estate—construction — — — — Commercial business 586 653 96 576 3 Trade finance — — — — — Consumer and other — — — — — $ 2,550 $ 2,708 $ 304 $ 3,052 $ 9 With no related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 2,500 2,652 — 2,571 26 Hotel & motel 6,751 9,058 — 6,882 17 Gas station & car wash 1,595 1,846 — 1,392 25 Mixed use 272 282 — 273 3 Industrial & warehouse 1,095 1,281 — 1,111 2 Other 3,775 4,784 — 3,826 14 Real estate—construction — — — — — Commercial business 676 1,036 — 672 8 Trade finance — — — — — Consumer and other 455 501 — 557 2 $ 17,119 $ 21,440 $ — $ 17,284 $ 97 Total $ 19,669 $ 24,148 $ 304 $ 20,336 $ 106 * Unpaid contractual principal balance less charge offs, interest applied to principal and purchase discounts. For the Three Months Ended March 31, 2015 Impaired APLs Average Recorded Investment* Interest Income Recognized during Impairment (In thousands) With related allowance: Real estate—residential $ — $ — Real estate—commercial Retail 2,128 37 Hotel & motel — — Gas station & car wash 1,237 — Mixed use 352 — Industrial & warehouse 180 5 Other 1,040 4 Real estate—construction — — Commercial business 713 1 Trade finance — — Consumer and other 1 — $ 5,651 $ 47 With no related allowance: Real estate—residential $ — $ — Real estate—commercial Retail 2,370 6 Hotel & motel 5,555 — Gas station & car wash 521 15 Mixed use 111 — Industrial & warehouse 1,481 1 Other 4,490 10 Real estate—construction — — Commercial business 1,021 3 Trade finance — — Consumer and other 622 2 $ 16,171 $ 37 Total $ 21,822 $ 84 * Unpaid contractual principal balance less charge offs, interest applied to principal and purchase discounts. As of December 31, 2015 For the Year Ended Total Impaired Loans Recorded Investment* Unpaid Contractual Principal Balance Related Allowance Average Recorded Investment* Interest Income Recognized during Impairment (In thousands) With related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 1,871 1,984 230 3,388 — Hotel & motel 4,697 4,707 158 10,512 230 Gas station & car wash 1,569 1,625 47 1,542 59 Mixed use 564 1,087 13 498 9 Industrial & warehouse 563 563 — 3,686 25 Other 24,603 24,851 1,440 12,585 1,110 Real estate—construction — — — — — Commercial business 31,527 31,832 4,316 31,790 998 Trade finance 12,548 12,548 2,603 6,209 527 Consumer and other 135 135 — 153 7 $ 78,077 $ 79,332 $ 8,807 $ 70,363 $ 2,965 With no related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 11,305 12,051 — 10,779 464 Hotel & motel 7,592 10,180 — 6,455 93 Gas station & car wash 3,754 6,435 — 3,685 107 Mixed use 2,382 2,604 — 2,375 51 Industrial & warehouse 8,967 10,608 — 10,186 254 Other 13,250 14,234 — 9,355 362 Real estate—construction 1,369 1,470 — 1,153 — Commercial business 10,059 12,063 — 8,722 345 Trade finance — — — 986 — Consumer and other 1,335 1,431 — 1,177 26 $ 60,013 $ 71,076 $ — $ 54,873 $ 1,702 Total $ 138,090 $ 150,408 $ 8,807 $ 125,236 $ 4,667 * Unpaid contractual principal balance less charge offs, interest applied to principal and purchase discounts. As of December 31, 2015 For the Year Ended December 31, 2015 Impaired APLs Recorded Investment* Unpaid Contractual Principal Balance Related Allowance Average Recorded Investment* Interest Income Recognized during Impairment (In thousands) With related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 1,171 1,173 197 1,835 — Hotel & motel — — — — — Gas station & car wash 1,017 1,062 6 1,246 59 Mixed use 494 491 5 380 9 Industrial & warehouse — — — 72 — Other 306 306 17 797 16 Real estate—construction — — — — — Commercial business 566 645 128 671 15 Trade finance — — — — — Consumer and other — — — — — $ 3,554 $ 3,677 $ 353 $ 5,001 $ 99 With no related allowance: Real estate—residential $ — $ — $ — $ — $ — Real estate—commercial Retail 2,642 2,756 — 2,301 105 Hotel & motel 7,014 9,303 — 5,889 73 Gas station & car wash 1,188 1,299 — 651 64 Mixed use 273 282 — 210 13 Industrial & warehouse 1,127 1,298 — 1,275 9 Other 3,876 4,615 — 4,162 53 Real estate—construction — — — — — Commercial business 668 1,039 — 892 55 Trade finance — — — — — Consumer and other 658 748 — 629 7 $ 17,446 $ 21,340 $ — $ 16,009 $ 379 Total $ 21,000 $ 25,017 $ 353 $ 21,010 $ 478 * Unpaid contractual principal balance less charge offs, interest applied to principal and purchase discounts. Generally, loans are placed on nonaccrual status if principal or interest payments become 90 days past due and/or management deems the collectibility of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to a customer whose financial condition has deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The following tables present the aging of past due loans as of March 31, 2016 and December 31, 2015 by class of loans: As of March 31, 2016 Past Due and Accruing 30-59 Days Past Due 60-89 Days Past Due 90 or More Days Past Due Total Nonaccrual Loans (2) Total Delinquent Loans (In thousands) Legacy Loans: Real estate—residential $ — $ — $ — $ — $ — $ — Real estate—commercial Retail 69 427 — 496 2,816 3,312 Hotel & motel 175 — — 175 953 1,128 Gas station & car wash — — — — 3,672 3,672 Mixed use — — — — 1,377 1,377 Industrial & warehouse 109 — — 109 2,215 2,324 Other — 844 — 844 2,866 3,710 Real estate—construction — — — — 1,342 1,342 Commercial business 1,340 101 — 1,441 14,371 15,812 Trade finance — — — — 1,937 1,937 Consumer and other 2,795 138 45 2,978 233 3,211 Subtotal $ 4,488 $ 1,510 $ 45 $ 6,043 $ 31,782 $ 37,825 Acquired Loans: (1) Real estate—residential $ — $ — $ — $ — $ — $ — Real estate—commercial Retail 1,189 — — 1,189 1,983 3,172 Hotel & motel — — — — 4,930 4,930 Gas station & car wash — — — — — — Mixed use — — — — 414 414 Industrial & warehouse — — — — 959 959 Other — — — — 2,596 2,596 Real estate—construction — — — — — — Commercial business 267 47 — 314 534 848 Trade finance — — — — — — Consumer and other — — — — 350 350 Subtotal $ 1,456 $ 47 $ — $ 1,503 $ 11,766 $ 13,269 TOTAL $ 5,944 $ 1,557 $ 45 $ 7,546 $ 43,548 $ 51,094 (1) The Acquired Loans exclude ACILs. (2) Nonaccrual loans exclude the guaranteed portion of delinquent SBA loans that are in liquidation totaling $15.4 million . As of December 31, 2015 Past Due and Accruing 30-59 Days Past Due 60-89 Days Past Due 90 or More Days Past Due Total Nonaccrual Loans (2) Total Delinquent Loans (In Thousands) Legacy Loans: Real estate—residential $ — $ — $ — $ — $ — $ — Real estate—commercial Retail 574 — — 574 2,383 2,957 Hotel & motel 854 — — 854 318 1,172 Gas station & car wash — 640 330 970 2,418 3,388 Mixed use — — — — 1,407 1,407 Industrial & warehouse — 110 — 110 2,275 2,385 Other — — — — 2,930 2,930 Real estate—construction — — — — 1,369 1,369 Commercial business 905 770 — 1,675 13,393 15,068 Trade finance — — — — 1,731 1,731 Consumer and other 770 158 45 973 245 1,218 Subtotal $ 3,103 $ 1,678 $ 375 $ 5,156 $ 28,469 $ 33,625 Acquired Loans: (1) Real estate—residential $ — $ — $ — $ — $ — $ — Real estate—commercial Retail 2,572 — — 2,572 2,113 4,685 Hotel & motel — — — — 5,072 5,072 Gas station & car wash — — — — — — Mixed use — — — — 415 415 Industrial & warehouse — — — — 990 990 Other — — — — 2,684 2,684 Real estate—construction — — — — — — Commercial business 310 39 — 349 476 825 Trade finance — — — — — — Consumer and other 287 — — 287 582 869 Subtotal $ 3,169 $ 39 $ — $ 3,208 $ 12,332 $ 15,540 TOTAL $ 6,272 $ 1,717 $ 375 $ 8,364 $ 40,801 $ 49,165 (1) The Acquired Loans exclude ACILs. (2) Nonaccrual loans exclude guaranteed portion of delinquent SBA loans that are in liquidation totaling $18.7 million . Loans accounted for under ASC 310-30 are generally considered accruing and performing loans and the accretable discount is accreted to interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, ACILs that are contractually past due are still considered to be accruing and performing loans. The loans may be classified as nonaccrual if the timing and amount of future cash flows is not reasonably estimable. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all non-homogeneous loans. This analysis is performed at least on a quarterly basis. The definitions for risk ratings are as follows: • Pass: Loans that meet a preponderance or more of the Company’s underwriting criteria and evidence an acceptable level of risk. • Special Mention: Loans that have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. • Substandard: Loans that are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. • Doubtful/Loss: Loans that have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following tables present the risk rating for Legacy Loans and Acquired Loans as of March 31, 2016 and December 31, 2015 by class of loans: As of March 31, 2016 Pass Special Mention Substandard Doubtful/Loss Total (In thousands) Legacy Loans: Real estate—residential $ 31,147 $ 462 $ — $ — $ 31,609 Real estate—commercial Retail 1,198,910 26,784 14,550 — 1,240,244 Hotel & motel 1,036,478 2,877 6,469 — 1,045,824 Gas station & car wash 629,787 6,154 3,997 — 639,938 Mixed use 337,416 1,182 2,562 — 341,160 Industrial & warehouse 460,309 10,020 13,830 — 484,159 Other 906,232 16,073 33,277 — 955,582 Real estate—construction 141,035 — 1,342 — 142,377 Commercial business 931,827 19,500 44,420 133 995,880 Trade finance 74,291 3,970 8,081 — 86,342 Consumer and other 84,438 3 786 — 85,227 Subtotal $ 5,831,870 $ 87,025 $ 129,314 $ 133 $ 6,048,342 Acquired Loans: Real estate—residential $ 503 $ 278 $ — $ — $ 781 Real estate—commercial Retail 73,951 2,019 13,507 — 89,477 Hotel & motel 12,780 4,339 13,581 — 30,700 Gas station & car wash 21,828 352 6,016 — 28,196 Mixed use 13,703 6,337 3,929 8 23,977 Industrial & warehouse 30,427 1,337 4,662 354 36,780 Other 31,802 362 9,549 — 41,713 Real estate—construction — — — — — Commercial business 21,370 897 13,813 118 36,198 Trade finance — — — — — Consumer and other 29,327 1,096 6,897 1,517 38,837 Subtotal $ 235,691 $ 17,017 $ 71,954 $ 1,997 $ 326,659 Total $ 6,067,561 $ 104,042 $ 201,268 $ 2,130 $ 6,375,001 As of December 31, 2015 Pass Special Mention Substandard Doubtful/Loss Total (In thousands) Legacy Loans: Real estate—residential $ 32,543 $ 465 $ — $ — $ 33,008 Real estate—commercial Retail 1,168,844 25,686 14,838 — 1,209,368 Hotel & motel 1,009,493 789 5,937 — 1,016,219 Gas station & car wash 610,749 6,192 3,758 — 620,699 Mixed use 326,902 1,191 2,610 — 330,703 Industrial & warehouse 461,938 10,099 11,966 — 484,003 Other 913,304 15,805 34,537 — 963,646 Real estate—construction 121,661 — 1,369 — 123,030 Commercial business 875,989 21,886 38,505 13 936,393 Trade finance 82,797 3,818 12,548 — 99,163 Consumer and other 60,549 14 812 7 61,382 Subtotal $ 5,664,769 $ 85,945 $ 126,880 $ 20 $ 5,877,614 Acquired Loans: Real estate—residential $ 508 $ 281 $ — $ — $ 789 Real estate—commercial Retail 91,076 2,364 14,926 — 108,366 Hotel & motel 21,306 4,339 13,835 — 39,480 Gas station & car wash 22,231 356 6,548 — 29,135 Mixed use 14,195 6,382 3,762 — 24,339 Industrial & warehouse 31,606 1,361 4,708 378 38,053 Other 38,311 366 9,967 — 48,644 Real estate—construction — — — — — Commercial business 27,413 1,149 14,835 363 43,760 Trade finance — — — — — Consumer and other 32,194 1,643 5,901 1,453 41,191 Subtotal $ 278,840 $ 18,241 $ 74,482 $ 2,194 $ 373,757 Total $ 5,943,609 $ 104,186 $ 201,362 $ 2,214 $ 6,251,371 Three Months Ended March 31, 2016 2015 Reclassification to held for sale (In thousands) Real estate - Commercial $ — $ 384 Real estate - Construction — — Commercial Business — 66 Consumer 400 — Total $ 400 $ 450 The adequacy of the allowance for loan losses is determined by management based upon an evaluation and review of the credit quality of the loan portfolio, consideration of historical loan loss experience, relevant internal and external factors that affect the collection of a loan, and other pertinent factors. Migration analysis is a formula methodology derived from the Bank’s actual historical net charge off experience for each loan class (type) pool and risk grade. The migration analysis (“Migration Analysis”) is centered on the Bank’s internal credit risk rating system. Management’s internal loan review and external contracted credit review examinations are used to determine and validate loan risk grades. This credit review system takes into consideration factors such as: borrower’s background and experience; historical and current financial condition; credit history and payment performance; economic conditions and their impact on various industries; type, fair value and volatility of the fair value of collateral; lien position; and the financial strength of any guarantors. A general loan loss allowance is provided on loans not specifically identified as impaired (“non-impaired loans”). The Bank’s general loan loss allowance has two components: quantitative and qualitative risk factors. The quantitative risk factors are based on a migration analysis methodology described above. The loans are classified by class and risk grade and the historical loss migration is tracked for the various classes. Loss experience is quantified for a specified period and then weighted to place more significance on the most recent loss history. That loss experience is then applied to the stratified portfolio at each quarter end. For ACILs, a general loan loss allowance is provided to the extent that there has been credit deterioration since the date of acquisition. Additionally, in order to systematically quantify the credit risk impact of other trends and changes within the loan portfolio, the Bank utilizes qualitative adjustments to the Migration Analysis within established parameters. The parameters for making adjustments are established under a Credit Risk Matrix that provides seven possible scenarios for each of the factors below. The matrix allows for up to three positive (Major, Moderate, and Minor), three negative (Major, Moderate, and Minor), and one neutral credit risk scenarios within each factor for each loan type pool. However, if information exists to warrant adjustment to the Migration Analysis, changes are made in accordance with the established parameters supported by narrative and/or statistical analysis. The Credit Risk Matrix and the nine possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio by as much as 50 basis points in either direction (positive or negative) for each loan type pool. This matrix considers the following nine factors, which are patterned after the guidelines provided under the FFIEC Interagency Policy Statement on the Allowance for Loan and Lease Losses: • Changes in lending policies and procedures, including underwriting standards and collection, charge off, and recovery practices; • Changes in national and local economic and business conditions and developments, including the condition of various market segments; • Changes in the nature and volume of the loan portfolio; • Changes in the experience, ability and depth of lending management and staff; • Changes in the trends of the volume and severity of past due loans, Classified Loans, nonaccrual loans, troubled debt restructurings and other loan modifications; • Changes in the quality of our loan review system and the degree of oversight by the Directors; • Changes in the value of underlying collateral for collateral-dependent loans; • The existence and effect of any concentrations of credit and changes in the level of such concentrations; and • The effect of external factors, such as competition and legal and regulatory requirements, on the level of estimated losses in our loan portfolio. The Company also establishes specific loss allowances for loans that have identified potential credit risk conditions or circumstances related to a specific individual credit. The specific allowance amounts are determined by a method prescribed by FASB ASC 310-10-35-22, Measurement of Impairment . The loans identified as impaired will be accounted for in accordance with one of the three acceptable valuation methods: 1) the present value of future cash flows discounted at the loan’s effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral, if the loan is collateral dependent. For the collateral dependent impaired loans, management obtains a new appraisal to determine the amount of impairment as of the date that the loan became impaired. The appraisals are based on an “as is” valuation. To ensure that appraised values remain current, management either obtains updated appraisals every twelve months from a qualified independent appraiser or an internal evaluation of the collateral is performed by qualified personnel. If the third party market data indicates that the value of the collateral property has declined since the most recent valuation date, management adjusts the value of the property downward to reflect current market conditions. If the fair value of the collateral is less than the recorded amount of the loan, management recognizes 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 underlying collateral, the loan is deemed to be collateral dependent and the amount of impairment is charged off against the allowance for loan losses. The Company considers a loan to be impaired when it is probable that not all amounts due (principal and interest) will be collectible in accordance with the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls is determined on a case-by-case basis by taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record and the amount of the shortfall in relation to the principal and interest owed. For commercial business loans, real estate loans and certain consumer loans, management bases the measurement of loan impairment on the present value of the expected future cash flows, discounted at the loan’s effective interest rate or on the fair value of the loan’s collateral if the loan is collateral dependent. Management evaluates most consumer loans for impairment on a collective basis because these loans generally have smaller balances and are homogeneous in the underwriting of terms and conditions and in the type of collateral. For ACILs, the allowance for loan losses is based upon expected cash flows for these loans. To the extent that a deterioration in borrower credit quality results in a decrease in expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on an estimate of future credit losses over the remaining life of the loans. The following table presents loans by portfolio segment and impairment method at March 31, 2016 and December 31, 2015 : As of March 31, 2016 Real Estate— Residential Real Estate— Commercial Real Estate— Construction Commercial Business Trade Finance Consumer and Other Total (In thousands) Impaired loans (gross carrying value) $ — $ 81,964 $ 1,342 $ 47,796 $ 8,081 $ 1,241 $ 140,424 Specific allowance $ — $ 1,968 $ — $ 6,609 $ 1,307 $ — $ 9,884 Loss coverage ratio N/A 2.4 % 0.0 % 13.8 % 16.2 % 0.0 % 7.0 % Non-impaired loans $ 32,390 $ 4,875,787 $ 141,034 $ 984,282 $ 78,261 $ 122,823 $ 6,234,577 General allowance $ 221 $ 51,498 $ 1,054 $ 12,593 $ 778 $ 828 $ 66,972 Loss coverage ratio 0.7 % 1.1 % 0.7 % 1.3 % 1.0 % 0.7 % 1.1 % Total loans $ 32,390 $ 4,957,751 $ 142,376 $ 1,032,078 $ 86,342 $ 124,064 $ 6,375,001 Total allowance for loan losses $ 221 $ 53,466 $ 1,054 $ 19,202 $ 2,085 $ 828 $ 76,856 Loss coverage ratio 0.7 % 1.1 % 0.7 % 1.9 % 2.4 % 0.7 % 1.2 % As of December 31, 2015 Real Estate— Residential Real Estate— Commercial Real Estate— Construction Commercial Business Trade Finance Consumer and Other Total (In thousands) Impaired loans (gross carrying value) $ — $ 81,117 $ 1,369 $ 41,586 $ 12,548 $ 1,470 $ 138,090 Specific allowance $ — $ 1,888 $ — $ 4,316 $ 2,603 $ — $ 8,807 Loss coverage ratio N/A 2.3 % 0.0 % 10.4 % 20.7 % 0.0 % 6.4 % Non-impaired loans $ 33,797 $ 4,831,538 $ 121,661 $ 938,567 $ 86,615 $ 101,103 $ 6,113,281 General allowance $ 230 $ 52,617 $ 917 $ 12,231 $ 989 $ 617 $ 67,601 Loss coverage ratio 0.7 % 1.1 % 0.8 % 1.3 % 1.1 % 0.6 % 1.1 % Total loans $ 33,797 $ 4,912,655 $ 123,030 $ 980,153 $ 99,163 $ 102,573 $ 6,251,371 Total allowance for loan losses $ 230 $ 54,505 $ 917 $ 16,547 $ 3,592 $ 617 $ 76,408 Loss coverage ratio 0.7 % 1.1 % 0.7 % 1.7 % 3.6 % 0.6 % 1.2 % Under certain circumstances, the Company provides borrowers relief through loan modifications. These modifications are either temporary in nature (“temporary modifications”) or are more substantive. At March 31, 2016 , total modified loans were $77.8 million , compared to $ 72.2 million at December 31, 2015 . The temporary modifications generally consist of interest only payments for a three to six month period, whereby principal payments are deferred. At the end of the modification period, |