LOANS AND CREDIT QUALITY (Text Block) | NOTE 5–LOANS AND CREDIT QUALITY: For a detailed discussion of loans and credit quality, including accounting policies and the methodology used to estimate the allowance for credit losses, see Note 1, Summary of Significant Accounting Policies. The Company's portfolio of loans held for investment is divided into two portfolio segments, consumer loans and commercial loans, which are the same segments used to determine the allowance for loan losses. Within each portfolio segment, the Company monitors and assesses credit risk based on the risk characteristics of each of the following loan classes: single family and home equity and other loans within the consumer loan portfolio segment and commercial real estate, multifamily, construction/land development and commercial business loans within the commercial loan portfolio segment. Loans held for investment consist of the following: At December 31, (in thousands) 2015 2014 Consumer loans Single family $ 1,203,180 (1) $ 896,665 Home equity and other 256,373 135,598 1,459,553 1,032,263 Commercial loans Commercial real estate 600,703 523,464 Multifamily 426,557 55,088 Construction/land development 583,160 367,934 Commercial business 154,262 147,449 1,764,682 1,093,935 3,224,235 2,126,198 Net deferred loan fees and costs (2,237 ) (5,048 ) 3,221,998 2,121,150 Allowance for loan losses (29,278 ) (22,021 ) $ 3,192,720 $ 2,099,129 (1) Includes $21.5 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations. Loans in the amount of $1.73 billion and $1.06 billion at December 31, 2015 and 2014 , respectively, were pledged to secure borrowings from the FHLB as part of our liquidity management strategy. Additionally, loans totaling $572.0 million and $487.2 million at December 31, 2015 and 2014 , respectively, were pledged to secure borrowings from the Federal Reserve Bank. The FHLB and Federal Reserve Bank do not have the right to sell or re-pledge these loans. It is the Company’s policy to make loans to officers, directors, and their associates in the ordinary course of business on substantially the same terms as those prevailing at the time for comparable transactions with other persons. The following is a summary of activity during the years ended December 31, 2015 and 2014 with respect to such aggregate loans to these related parties and their associates: Year Ended December 31, (in thousands) 2015 2014 Beginning balance, January 1 $ 5,500 $ 9,738 New loans 181 — Principal repayments and advances, net (1,170 ) (4,238 ) Ending balance, December 31 $ 4,511 $ 5,500 Credit Risk Concentrations Concentrations of credit risk arise when a number of customers are engaged in similar business activities or activities in the same geographic region, or when they have similar economic features that would cause their ability to meet contractual obligations to be similarly affected by changes in economic conditions. Loans held for investment are primarily secured by real estate located in the Pacific Northwest, California and Hawaii. At December 31, 2015 , we had concentrations representing 10% or more of the total portfolio by state and property type for the loan classes of single family, commercial real estate and construction/land development within the state of Washington, which represented 18.0% , 14.7% and 11.3% of the total portfolio, respectively. Additionally, we had a concentration representing 10% or more by state and property type for the single family loan class within the state of California, which represented 13.6% of the total portfolio. At December 31, 2014 we had concentrations representing 10% or more of the total portfolio by state and property type for the loan classes of single family, commercial real estate and construction/land development within the state of Washington, which represented 28.0% and 20.7% and 13.7% of the total portfolio, respectively. Credit Quality Management considers the level of allowance for loan losses to be appropriate to cover credit losses inherent within the loans held for investment portfolio as of December 31, 2015 . In addition to the allowance for loan losses, the Company maintains a separate allowance for losses related to unfunded loan commitments, and this amount is included in accounts payable and other liabilities on the consolidated statements of financial condition. Collectively, these allowances are referred to as the allowance for credit losses. For further information on the policies that govern the determination of the allowance for loan losses levels, see Note 1, Summary of Significant Accounting Policies. Activity in the allowance for credit losses was as follows. Year Ended December 31, (in thousands) 2015 2014 2013 Allowance for credit losses (roll-forward): Beginning balance $ 22,524 $ 24,089 $ 27,751 Provision (reversal of provision) for credit losses 6,100 (1,000 ) 900 (Charge-offs), net of recoveries 2,035 (565 ) (4,562 ) Ending balance $ 30,659 $ 22,524 $ 24,089 Components: Allowance for loan losses $ 29,278 $ 22,021 $ 23,908 Allowance for unfunded commitments 1,381 503 181 Allowance for credit losses $ 30,659 $ 22,524 $ 24,089 Activity in the allowance for credit losses by loan portfolio and loan class was as follows. Year Ended December 31, 2015 (in thousands) Beginning Charge-offs Recoveries (Reversal of) Provision Ending Consumer loans Single family $ 9,447 $ (284 ) $ 623 $ (844 ) $ 8,942 Home equity and other 3,322 (601 ) 288 1,611 4,620 12,769 (885 ) 911 767 13,562 Commercial loans Commercial real estate 3,846 (16 ) — 1,017 4,847 Multifamily 673 (149 ) 149 521 1,194 Construction/land development 3,818 — 2,193 3,260 9,271 Commercial business 1,418 (329 ) 161 535 1,785 9,755 (494 ) 2,503 5,333 17,097 Total allowance for credit losses $ 22,524 $ (1,379 ) $ 3,414 $ 6,100 $ 30,659 Year Ended December 31, 2014 (in thousands) Beginning Charge-offs Recoveries (Reversal of) Provision Ending Consumer loans Single family $ 11,990 $ (907 ) $ 139 $ (1,775 ) $ 9,447 Home equity and other 3,987 (953 ) 566 (278 ) 3,322 15,977 (1,860 ) 705 (2,053 ) 12,769 Commercial loans Commercial real estate 4,012 (52 ) 493 (607 ) 3,846 Multifamily 942 — — (269 ) 673 Construction/land development 1,414 — 516 1,888 3,818 Commercial business 1,744 (596 ) 229 41 1,418 8,112 (648 ) 1,238 1,053 9,755 Total allowance for credit losses $ 24,089 $ (2,508 ) $ 1,943 $ (1,000 ) $ 22,524 The following table disaggregates our allowance for credit losses and recorded investment in loans by impairment methodology. At December 31, 2015 (in thousands) Allowance: collectively evaluated for impairment Allowance: individually evaluated for impairment Total Loans: collectively evaluated for impairment Loans: individually evaluated for impairment Total Consumer loans Single family $ 8,723 $ 219 $ 8,942 $ 1,101,891 $ 79,745 $ 1,181,636 Home equity and other 4,545 75 4,620 254,762 1,611 256,373 13,268 294 13,562 1,356,653 81,356 1,438,009 Commercial loans Commercial real estate 4,847 — 4,847 597,571 3,132 600,703 Multifamily 1,194 — 1,194 423,424 3,133 426,557 Construction/land development 9,271 — 9,271 579,446 3,714 583,160 Commercial business 1,512 273 1,785 151,924 2,338 154,262 16,824 273 17,097 1,752,365 12,317 1,764,682 Total loans evaluated for impairment 30,092 567 30,659 3,109,018 93,673 3,202,691 Loans held for investment carried at fair value 21,544 (1) Total loans held for investment $ 30,092 $ 567 $ 30,659 $ 3,109,018 $ 93,673 $ 3,224,235 (1) Comprised of single family loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations. At December 31, 2014 (in thousands) Allowance: collectively evaluated for impairment Allowance: individually evaluated for impairment Total Loans: collectively evaluated for impairment Loans: individually evaluated for impairment Total Consumer loans Single family $ 8,743 $ 704 $ 9,447 $ 818,783 $ 77,882 $ 896,665 Home equity and other 3,165 157 3,322 132,937 2,661 135,598 11,908 861 12,769 951,720 80,543 1,032,263 Commercial loans Commercial real estate 3,806 40 3,846 496,685 26,779 523,464 Multifamily 312 361 673 52,011 3,077 55,088 Construction/land development 3,818 — 3,818 362,487 5,447 367,934 Commercial business 974 444 1,418 144,071 3,378 147,449 8,910 845 9,755 1,055,254 38,681 1,093,935 Total $ 20,818 $ 1,706 $ 22,524 $ 2,006,974 $ 119,224 $ 2,126,198 Impaired Loans The following tables present impaired loans by loan portfolio segment and loan class. At December 31, 2015 (in thousands) Recorded investment (1) Unpaid principal balance (2) Related allowance With no related allowance recorded: Consumer loans Single family $ 78,240 $ 80,486 $ — Home equity and other 955 1,033 — 79,195 81,519 — Commercial loans Commercial real estate 3,132 3,421 — Multifamily 3,133 3,429 — Construction/land development 3,714 4,214 — Commercial business 1,373 1,475 — 11,352 12,539 — $ 90,547 $ 94,058 $ — With an allowance recorded: Consumer loans Single family $ 1,505 $ 1,618 $ 219 Home equity and other 656 656 75 2,161 2,274 294 Commercial loans Commercial business 965 1,019 273 965 1,019 273 $ 3,126 $ 3,293 $ 567 Total: Consumer loans Single family (3) $ 79,745 $ 82,104 $ 219 Home equity and other 1,611 1,689 75 81,356 83,793 294 Commercial loans Commercial real estate 3,132 3,421 — Multifamily 3,133 3,429 — Construction/land development 3,714 4,214 — Commercial business 2,338 2,494 273 12,317 13,558 273 Total impaired loans $ 93,673 $ 97,351 $ 567 (1) Includes partial charge-offs and nonaccrual interest paid and purchase discounts and premiums. (2) Unpaid principal balance does not include partial charge-offs, purchase discounts and premiums or nonaccrual interest paid. Related allowance is calculated on net book balances not unpaid principal balances. (3) Includes $74.7 million in performing TDRs. At December 31, 2014 (in thousands) Recorded investment (1) Unpaid principal balance (2) Related allowance With no related allowance recorded: Consumer loans Single family $ 48,104 $ 50,787 $ — Home equity and other 1,824 1,850 — 49,928 52,637 — Commercial loans Commercial real estate 25,540 27,205 — Multifamily 508 508 — Construction/land development 5,447 14,532 — Commercial business 1,302 3,782 — 32,797 46,027 — $ 82,725 $ 98,664 $ — With an allowance recorded: Consumer loans Single family $ 29,778 $ 29,891 $ 704 Home equity and other 837 837 157 30,615 30,728 861 Commercial loans Commercial real estate 1,239 1,399 40 Multifamily 2,569 2,747 361 Commercial business 2,076 2,204 444 5,884 6,350 845 $ 36,499 $ 37,078 $ 1,706 Total: Consumer loans Single family (3) $ 77,882 $ 80,678 $ 704 Home equity and other 2,661 2,687 157 80,543 83,365 861 Commercial loans Commercial real estate 26,779 28,604 40 Multifamily 3,077 3,255 361 Construction/land development 5,447 14,532 — Commercial business 3,378 5,986 444 38,681 52,377 845 Total impaired loans $ 119,224 $ 135,742 $ 1,706 (1) Includes partial charge-offs and nonaccrual interest paid. (2) Unpaid principal balance does not include partial charge-offs, purchase discounts and premiums or nonaccrual interest paid. Related allowance is calculated on net book balances not unpaid principal balances. (3) Includes $73.6 million in single family performing TDRs. The following table provides the average recorded investment in impaired loans by portfolio segment and class. Year Ended December 31, (in thousands) 2015 2014 Consumer loans Single family $ 78,824 $ 73,683 Home equity and other 1,922 2,528 80,746 76,211 Commercial loans Commercial real estate 14,416 30,364 Multifamily 4,035 3,112 Construction/land development 4,535 5,723 Commercial business 4,431 3,381 27,417 42,580 $ 108,163 $ 118,791 Credit Quality Indicators Management regularly reviews loans in the portfolio to assess credit quality indicators and to determine appropriate loan classification and grading in accordance with applicable bank regulations. The Company's risk rating methodology assigns risk ratings ranging from 1 to 10, where a higher rating represents higher risk. The Company differentiates its lending portfolios into homogeneous loans and non-homogeneous loans. The 10 risk rating categories can be generally described by the following groupings for non-homogeneous loans: Pass. We have five pass risk ratings which represent a level of credit quality that ranges from no well-defined deficiency or weakness to some noted weakness, however the risk of default on any loan classified as pass is expected to be remote. The five pass risk ratings are described below: Minimal Risk . A minimal risk loan, risk rated 1-Exceptional, is to a borrower of the highest quality. The borrower has an unquestioned ability to produce consistent profits and service all obligations and can absorb severe market disturbances with little or no difficulty. Low Risk. A low risk loan, risk rated 2-Superior, is similar in characteristics to a minimal risk loan. Balance sheet and operations are slightly more prone to fluctuations within the business cycle; however, debt capacity and debt service coverage remains strong. The borrower will have a strong demonstrated ability to produce profits and absorb market disturbances. Modest Risk. A modest risk loan, risk rated 3-Excellent, is a desirable loan with excellent sources of repayment and no currently identifiable risk associated with collection. The borrower exhibits a very strong capacity to repay the loan in accordance with the repayment agreement. The borrower may be susceptible to economic cycles, but will have cash reserves to weather these cycles. Average Risk. An average risk loan, risk rated 4-Good, is an attractive loan with sound sources of repayment and no material collection or repayment weakness evident. The borrower has an acceptable capacity to pay in accordance with the agreement. The borrower is susceptible to economic cycles and more efficient competition, but should have modest reserves sufficient to survive all but the most severe downturns or major setbacks. Acceptable Risk. An acceptable risk loan, risk rated 5-Acceptable, is a loan with lower than average, but still acceptable credit risk. These borrowers may have higher leverage, less certain but viable repayment sources, have limited financial reserves and may possess weaknesses that can be adequately mitigated through collateral, structural or credit enhancement. The borrower is susceptible to economic cycles and is less resilient to negative market forces or financial events. Reserves may be insufficient to survive a modest downturn. Watch. A watch loan, risk rated 6-Watch, is still pass-rated, but represents the lowest level of acceptable risk due to an emerging risk element or declining performance trend. Watch ratings are expected to be temporary, with issues resolved or manifested to the extent that a higher or lower rating would be appropriate. The borrower should have a plausible plan, with reasonable certainty of success, to correct the problems in a short period of time. Borrowers rated watch are characterized by elements of uncertainty, such as: • The borrower may be experiencing declining operating trends, strained cash flows or less-than anticipated performance. Cash flow should still be adequate to cover debt service, and the negative trends should be identified as being of a short-term or temporary nature. • The borrower may have experienced a minor, unexpected covenant violation. • Companies who may be experiencing tight working capital or have a cash cushion deficiency. • A loan may also be a watch if financial information is late, there is a documentation deficiency, the borrower has experienced unexpected management turnover, or if they face industry issues that, when combined with performance factors create uncertainty in their future ability to perform. • Delinquent payments, increasing and material overdraft activity, request for bulge and/or out- of-formula advances may be an indicator of inadequate working capital and may suggest a lower rating. • Failure of the intended repayment source to materialize as expected, or renewal of a loan (other than cash/marketable security secured or lines of credit) without reduction are possible indicators of a watch or worse risk rating. Special Mention. A special mention loan, risk rated 7-Special Mention, has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loans or the institutions credit position at some future date. They contain unfavorable characteristics and are generally undesirable. Loans in this category are currently protected but are potentially weak and constitute an undue and unwarranted credit risk, but not to the point of a substandard classification. A special mention loan has potential weaknesses, which if not checked or corrected, weaken the loan or inadequately protect the Company’s position at some future date. Such weaknesses include: • Performance is poor or significantly less than expected. There may be a temporary debt-servicing deficiency or inadequate working capital as evidenced by a cash cushion deficiency, but not to the extent that repayment is compromised. Material violation of financial covenants is common. • Loans with unresolved material issues that significantly cloud the debt service outlook, even though a debt servicing deficiency does not currently exist. • Modest underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt as structured. Depth of support for interest carry provided by owner/guarantors may mitigate and provide for improved rating. • This rating may be assigned when a loan officer is unable to supervise the credit properly, an inadequate loan agreement, an inability to control collateral, failure to obtain proper documentation, or any other deviation from prudent lending practices. • Unlike a substandard credit, there should be a reasonable expectation that these temporary issues will be corrected within the normal course of business, rather than liquidation of assets, and in a reasonable period of time. Substandard. A substandard loan, risk rated 8-Substandard, is inadequately protected by the current sound worth and paying capacity of the borrower or of the collateral pledged, if any. Loans so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the loan. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard loans, does not have to exist in individual loans classified substandard. Loans are classified as substandard when they have unsatisfactory characteristics causing unacceptable levels of risk. A substandard loan normally has one or more well-defined weaknesses that could jeopardize repayment of the loan. The likely need to liquidate assets to correct the problem, rather than repayment from successful operations is the key distinction between special mention and substandard. The following are examples of well-defined weaknesses: • Cash flow deficiencies or trends are of a magnitude to jeopardize current and future payments with no immediate relief. A loss is not presently expected, however the outlook is sufficiently uncertain to preclude ruling out the possibility. • The borrower has been unable to adjust to prolonged and unfavorable industry or economic trends. • Material underperformance or deviation from plan for real estate loans where absorption of rental/sales units is necessary to properly service the debt and risk is not mitigated by willingness and capacity of owner/guarantor to support interest payments. • Management character or honesty has become suspect. This includes instances where the borrower has become uncooperative. • Due to unprofitable or unsuccessful business operations, some form of restructuring of the business, including liquidation of assets, has become the primary source of loan repayment. Cash flow has deteriorated, or been diverted, to the point that sale of collateral is now the Company’s primary source of repayment (unless this was the original source of repayment). If the collateral is under the Company’s control and is cash or other liquid, highly marketable securities and properly margined, then a more appropriate rating might be special mention or watch. • The borrower is involved in bankruptcy proceedings where collateral liquidation values are expected to fully protect the Company against loss. • There is material, uncorrectable faulty documentation or materially suspect financial information. Doubtful. Loans classified as doubtful, risk rated 9-Doubtful, have all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonably specific pending factors, which may work towards strengthening of the loan, classification as a loss (and immediate charge-off) is deferred until more exact status may be determined. Pending factors include proposed merger, acquisition, liquidation procedures, capital injection, and perfection of liens on additional collateral and refinancing plans. In certain circumstances, a doubtful rating will be temporary, while the Company is awaiting an updated collateral valuation. In these cases, once the collateral is valued and appropriate margin applied, the remaining un-collateralized portion will be charged-off. The remaining balance, properly margined, may then be upgraded to substandard, however must remain on non-accrual. Loss. Loans classified as loss, risk rated 10-Loss, are considered un-collectible and of such little value that the continuance as an active Company asset is not warranted. This rating does not mean that the loan has no recovery or salvage value, but rather that the loan should be charged-off now, even though partial or full recovery may be possible in the future. Impaired. Loans are classified as impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal and interest when due, in accordance with the terms of the original loan agreement, without unreasonable delay. This generally includes all loans classified as nonaccrual and troubled debt restructurings. Impaired loans are risk rated for internal and regulatory rating purposes, but presented separately for clarification. Homogeneous loans maintain their original risk rating until they are greater than 30 days past due, and risk rating reclassification is based primarily on the past due status of the loan. The risk rating categories can be generally described by the following groupings for commercial and commercial real estate homogeneous loans: Watch. A homogeneous watch loan, risk rated 6, is 30-59 days past due from the required payment date at month-end. Special Mention. A homogeneous special mention loan, risk rated 7, is 60-89 days past due from the required payment date at month-end. S ubstandard. A homogeneous substandard loan, risk rated 8, is 90-179 days past due from the required payment date at month-end. Loss. A homogeneous loss loan, risk rated 10, is 180 days and more past due from the required payment date. These loans are generally charged-off in the month in which the 180 day time period elapses. The risk rating categories can be generally described by the following groupings for residential and home equity and other homogeneous loans: Watch. A homogeneous retail watch loan, risk rated 6, is 60-89 days past due from the required payment date at month-end. Substandard. A homogeneous retail substandard loan, risk rated 8, is 90-180 days past due from the required payment date at month-end. Loss. A homogeneous retail loss loan, risk rated 10, becomes past due 180 cumulative days from the contractual due date. These loans are generally charged-off in the month in which the 180 day period elapses. Residential and home equity loans modified in a troubled debt restructure are not considered homogeneous. The risk rating classification for such loans are based on the non-homogeneous definitions noted above. The following tables summarize designated loan grades by loan portfolio segment and loan class. At December 31, 2015 (in thousands) Pass Watch Special mention Substandard Total Consumer loans Single family $ 1,165,990 (1) $ 7,933 $ 16,439 $ 12,818 $ 1,203,180 Home equity and other 253,912 381 478 1,602 256,373 1,419,902 8,314 16,917 14,420 1,459,553 Commercial loans Commercial real estate 535,903 55,058 7,067 2,675 600,703 Multifamily 403,604 20,738 1,657 558 426,557 Construction/land development 552,819 25,520 4,407 414 583,160 Commercial business 120,969 30,300 1,731 1,262 154,262 1,613,295 131,616 14,862 4,909 1,764,682 $ 3,033,197 $ 139,930 $ 31,779 $ 19,329 $ 3,224,235 (1) Includes $21.5 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations. At December 31, 2014 (in thousands) Pass Watch Special mention Substandard Total Consumer loans Single family $ 865,641 $ 361 $ 21,714 $ 8,949 $ 896,665 Home equity and other 133,338 82 652 1,526 135,598 998,979 443 22,366 10,475 1,032,263 Commercial loans Commercial real estate 441,509 67,434 13,066 1,455 523,464 Multifamily 50,495 1,516 3,077 — 55,088 Construction/land development 361,167 2,830 1,261 2,676 367,934 Commercial business 115,665 25,724 3,690 2,370 147,449 968,836 97,504 21,094 6,501 1,093,935 $ 1,967,815 $ 97,947 $ 43,460 $ 16,976 $ 2,126,198 As of December 31, 2015 and 2014 , none of the Company's loans were rated Doubtful or Loss. Nonaccrual and Past Due Loans Loans are placed on nonaccrual status when the full and timely collection of principal and interest is doubtful, generally when the loan becomes 90 days or more past due for principal or interest payment or if part of the principal balance has been charged off. Loans whose repayments are insured by the FHA or guaranteed by the VA are generally maintained on accrual status even if 90 days or more past due. The following table presents an aging analysis of past due loans by loan portfolio segment and loan class. At December 31, 2015 (in thousands) 30-59 days past due 60-89 days past due 90 days or more past due Total past due Current Total loans 90 days or more past due and accruing (2) Consumer loans Single family $ 7,098 $ 3,537 $ 48,714 $ 59,349 $ 1,143,831 (1) $ 1,203,180 $ 36,595 (2) Home equity and other 1,095 398 1,576 3,069 253,304 256,373 — 8,193 3,935 50,290 62,418 1,397,135 1,459,553 36,595 Commercial loans Commercial real estate 233 — 2,341 2,574 598,129 600,703 — Multifamily — — 119 119 426,438 426,557 — Construction/land development 77 — 339 416 582,744 583,160 — Commercial business — — 692 692 153,570 154,262 17 310 — 3,491 3,801 1,760,881 1,764,682 17 $ 8,503 $ 3,935 $ 53,781 $ 66,219 $ 3,158,016 $ 3,224,235 $ 36,612 At December 31, 2014 (in thousands) 30-59 days 60-89 days 90 days or Total past Current Total 90 days or (2) Consumer loans Single family $ 7,832 $ 2,452 $ 43,105 $ 53,389 $ 843,276 $ 896,665 $ 34,737 (2) Home equity and other 371 81 1,526 1,978 133,620 135,598 — 8,203 2,533 44,631 55,367 976,896 1,032,263 34,737 Commercial loans Commercial real estate — — 4,843 4,843 518,621 523,464 — Multifamily — — — — 55,088 55,088 — Construction/land development — 1,261 — 1,261 366,673 367,934 — Commercial business 611 3 1,527 2,141 145,308 147,449 250 611 1,264 6,370 8,245 1,085,690 1,093,935 250 $ 8,814 $ 3,797 $ 51,001 $ 63,612 $ 2,062,586 $ 2,126,198 $ 34,987 (1) Includes $21.5 million of loans at December 31, 2015 where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations. (2) FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss. The following tables present performing and nonperforming loan balances by loan portfolio segment and loan class. At December 31, 2015 (in thousands) Accrual Nonaccrual Total Consumer loans Single family $ 1,191,061 (1) $ 12,119 $ 1,203,180 Home equity and other 254,797 1,576 256,373 1,445,858 13,695 1,459,553 Commercial loans Commercial real estate 598,362 2,341 600,703 Multifamily 426,438 119 426,557 Construction/land development 582,821 339 583,160 Commercial business 153,588 674 154,262 1,761,209 3,473 1,764,682 $ 3,207,067 $ 17,168 $ 3,224,235 (1) Includes $21.5 million of loans at December 31, 2015 where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes recognized in the consolidated statements of operations. At December 31, 2014 (in thousands) Accrual Nonaccrual Total Consumer loans Single family $ 888,297 $ 8,368 $ 896,665 Home equity and other 134,072 1,526 135,598 1,022,369 9,894 1,032,263 Commercial loans Commercial real estate 518,621 4,843 523,464 Multifamily 55,088 — 55,088 Construction/land development 367,934 — 367,934 Commercial business 146,172 1,277 147,449 1,087,815 6,120 1,093,935 $ 2,110,184 $ 16,014 $ 2,126,198 The following tables present information about TDR activity during the periods presented. Year Ended December 31, 2015 (dollars in thousands) Concession type Number of loan Recorded Related charge- Consumer loans Single family Interest rate reduction 47 $ 10,167 $ — Home equity and other Interest rate reduction 2 130 — Total consumer Interest rate reduction 49 10,297 — 49 10,297 — Commercial loans Commercial business Interest rate reduction 2 482 — Total commercial Interest rate reduction 2 482 — 2 482 — Total loans Interest rate reduction 51 10,779 — 51 $ 10,779 $ — Year Ended December 31, 2014 (dollars in thousands) Concession type Number of loan Recorded Related charge- Consumer loans Single family Interest rate reduction 62 $ 12,012 $ — Payment restructure 10 1,991 — Home equity and other Interest rate reduction 3 430 — Payment restructure 1 58 — Total consumer Interest rate reduction 65 12,442 — Payment restructure 11 2,049 — 76 14,491 — Commercial loans Commercial real estate Interest rate reduction 1 1,181 — Payment restructure 3 4,248 — Commercial business Interest rate reduction 2 117 — Payment restructure 3 1,270 — Forgiveness of principal 2 599 554 Total commercial Interest rate reduction 3 1,298 — Payment restructure 6 5,518 — Forgiveness of principal 2 599 554 11 7,415 554 Total loans Interest rate reduction 68 13,740 — Payment restructure 17 7,567 — Forgiveness of principal 2 599 554 87 $ 21,906 $ 554 December 31, 2013 (dollars in thousands) Concession type Number of loan Recorded Related charge- Consumer loans Single family Interest rate reduction 104 $ 22,605 $ — Home equity and other Interest rate reduction 9 571 — Total consumer Interest rate reduction 113 23,176 — 113 23,176 — Total loans Interest rate reduction 113 23,176 — 113 $ 23,176 $ — The following tables present loans that were modified as TDRs within the previous 12 months and subsequently re-defaulted during the years ended December 31, 2015 and 2014 , respectively. A TDR loan is considered re-defaulted when it becomes doubtful that the objectives of the modifications will be met, generally when a consumer loan TDR becomes 60 days or more past due on principal or interest payments or when a commercial loan TDR becomes 90 days or more past due on principal or interest payments. Year Ended December 31, 2015 2014 (dollars in thousands) Number of loan relationships that re-defaulted Recorded Number of loan relationships that re-defaulted Recorded Consumer loans Single family 10 $ 2,270 7 $ 1,010 Home equity and other 1 68 1 190 11 2,338 8 1,200 11 $ 2,338 8 $ 1,200 |