Financing Receivables [Text Block] | Loan Portfolio and Credit Quality The Bank’s lending activities are conducted principally in the regions of New England, San Francisco Bay Area, and Southern California. The Bank originates single and multi-family residential loans, commercial real estate loans, commercial and industrial loans, construction and land loans, and home equity and other consumer loans. Most loans are secured by borrowers’ personal or business assets. The ability of the Bank’s single family residential and consumer borrowers to honor their repayment commitments is generally dependent on the level of overall economic conditions within the Bank’s lending areas. Commercial, construction, and land borrowers’ ability to repay is generally dependent upon the health of the economy and real estate values, including, in particular, the performance of the construction sector. Accordingly, the ultimate collectability of a substantial portion of the Bank’s loan portfolio is susceptible to changing conditions in the New England, San Francisco Bay Area, and Southern California economies and real estate markets. Total loans include deferred loan origination (fees)/ costs, net, of $6.3 million and $5.6 million as of September 30, 2016 and December 31, 2015 , respectively. The following table presents a summary of the loan portfolio based on the portfolio segment as of the dates indicated: September 30, December 31, 2015 (In thousands) Commercial and industrial $ 1,099,170 $ 1,111,555 Commercial real estate 2,054,570 1,914,134 Construction and land 98,696 183,434 Residential 2,316,090 2,229,540 Home equity 121,269 119,828 Consumer and other 179,703 160,721 Total Loans $ 5,869,498 $ 5,719,212 The following table presents nonaccrual loans receivable by class of receivable as of the dates indicated: September 30, December 31, 2015 (In thousands) Commercial and industrial $ 927 $ 1,019 Commercial real estate 5,138 11,232 Construction and land 224 3,297 Residential 9,060 9,661 Home equity 1,075 1,306 Consumer and other 67 56 Total $ 16,491 $ 26,571 The Bank’s policy is to discontinue the accrual of interest on a loan when the collectability of principal or interest is in doubt. In certain instances, although infrequent, loans that have become 90 days or more past due may remain on accrual status if the value of the collateral securing the loan is sufficient to cover principal and interest and the loan is in the process of collection. There were no loans 90 days or more past due, but still accruing as of both September 30, 2016 and December 31, 2015 . The Bank’s policy for returning a loan to accrual status requires the loan to be brought current and for the client to show a history of making timely payments (generally six consecutive months). For troubled debt restructured loans (“TDRs”), a return to accrual status generally requires timely payments for a period of six months in accordance with the restructured loan terms, along with meeting other criteria. The following tables show the payment status of loans by class of receivable as of the dates indicated: September 30, 2016 Accruing Past Due Nonaccrual Loans 30-59 Days Past Due 60-89 Days Past Due Total Accruing Past Due Current Payment Status 30-89 Days Past Due 90 Days or Greater Past Due Total Non-Accrual Loans Current Accruing Loans Total Loans Receivable (In thousands) Commercial and industrial $ 524 $ 836 $ 1,360 $ 909 $ — $ 18 $ 927 $ 1,096,883 $ 1,099,170 Commercial real estate 2,200 244 2,444 3,488 213 1,437 5,138 2,046,988 2,054,570 Construction and land — — — 34 20 170 224 98,472 98,696 Residential — 663 663 2,765 1,360 4,935 9,060 2,306,367 2,316,090 Home equity — — — — 83 992 1,075 120,194 121,269 Consumer and other 107 15 122 — — 67 67 179,514 179,703 Total $ 2,831 $ 1,758 $ 4,589 $ 7,196 $ 1,676 $ 7,619 $ 16,491 $ 5,848,418 $ 5,869,498 December 31, 2015 Accruing Past Due Nonaccrual Loans 30-59 Days Past Due 60-89 Days Past Due Total Accruing Past Due Current Payment Status 30-89 Days Past Due 90 Days or Greater Past Due Total Non-Accrual Loans Current Accruing Loans Total Loans Receivable (In thousands) Commercial and industrial $ 2,329 $ 338 $ 2,667 $ 726 $ — $ 293 $ 1,019 $ 1,107,869 $ 1,111,555 Commercial real estate 2,091 529 2,620 5,912 — 5,320 11,232 1,900,282 1,914,134 Construction and land — — — 149 34 3,114 3,297 180,137 183,434 Residential 6,267 873 7,140 924 874 7,863 9,661 2,212,739 2,229,540 Home equity 40 — 40 217 — 1,089 1,306 118,482 119,828 Consumer and other 235 392 627 24 9 23 56 160,038 160,721 Total $ 10,962 $ 2,132 $ 13,094 $ 7,952 $ 917 $ 17,702 $ 26,571 $ 5,679,547 $ 5,719,212 Nonaccrual and delinquent loans are affected by many factors, such as economic and business conditions, interest rates, unemployment levels, and real estate collateral values, among others. In periods of prolonged economic decline, borrowers may become more severely affected over time as liquidity levels decline and the borrower’s ability to continue to make payments deteriorates. With respect to real estate collateral values, the declines from the peak, as well as the value of the real estate at the time of origination versus the current value, can impact the level of problem loans. For instance, if the loan to value ratio at the time of renewal has increased due to the decline in the real estate value since origination, the loan may no longer meet the Bank’s underwriting standards and may be considered for classification as a problem loan dependent upon a review of risk factors. Generally when a collateral dependent loan becomes impaired, an updated appraisal of the collateral, if appropriate, is obtained. If the impaired loan has not been upgraded to a performing status within a reasonable amount of time, the Bank will continue to obtain updated appraisals as deemed necessary, especially during periods of declining property values. The past due status of a loan is determined in accordance with its contractual repayment terms. All loan types are reported past due when one scheduled payment is due and unpaid for 30 days or more. Credit Quality Indicators The Bank uses a risk rating system to monitor the credit quality of its loan portfolio. Loan classifications are assessments made by the Bank of the status of the loans based on the facts and circumstances known to the Bank, including management’s judgment, at the time of assessment. Some or all of these classifications may change in the future if there are unexpected changes in the financial condition of the borrower, including but not limited to, changes resulting from continuing deterioration in general economic conditions on a national basis or in the local markets in which the Bank operates adversely affecting, among other things, real estate values. Such conditions, as well as other factors which adversely affect borrowers’ ability to service or repay loans, typically result in changes in loan default and charge-off rates, and increased provisions for loan losses, which would adversely affect the Company’s financial performance and financial condition. These circumstances are not entirely foreseeable and, as a result, it may not be possible to accurately reflect them in the Company’s analysis of credit risk. A summary of the rating system used by the Bank, repeated here from Part II. Item 8. “Financial Statements and Supplementary Data—Note 1: Basis of Presentation and Summary of Significant Accounting Policies,” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015, follows: Pass - All loans graded as pass are considered acceptable credit quality by the Bank and are grouped for purposes of calculating the allowance for loan losses. Generally, only commercial loans, including commercial real estate, commercial and industrial loans, and construction and land loans are given a numerical grade. For residential, home equity and consumer loans, the Bank classifies loans as pass unless there is known information such as delinquency or client requests for modifications which, due to financial difficulty, would then generally result in a risk rating such as special mention or more severe depending on the factors. Special Mention - Loans rated in this category are defined as having potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may, at some future date, result in the deterioration of the repayment prospects for the credit or the Bank’s credit position. These loans are currently protected but have the potential to deteriorate to a substandard rating. For commercial loans, the borrower’s financial performance may be inconsistent or below forecast, creating the possibility of liquidity problems and shrinking debt service coverage. In loans having this rating, the primary source of repayment is still good, but there is increasing reliance on collateral or guarantor support. Collectability of the loan is not yet in jeopardy. In particular, loans in this category are considered more variable than other categories, since they will typically migrate through categories more quickly. Substandard - Loans rated in this category are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. A substandard credit has a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Substandard loans may be either still accruing or nonaccruing depending upon the severity of the risk and other factors such as the value of the collateral, if any, and past due status. Doubtful - Loans rated in this category indicate that collection or liquidation in full on the basis of currently existing facts, conditions, and values, is highly questionable and improbable. Loans in this category are usually on nonaccrual and classified as impaired. The following tables present the loan portfolio’s credit risk profile by internally assigned grade and class of receivable as of the dates indicated: September 30, 2016 By Loan Grade or Nonaccrual Status Pass Special Mention Accruing Substandard Nonaccrual Loans Total (In thousands) Commercial and industrial $ 1,063,261 $ 17,020 $ 17,962 $ 927 $ 1,099,170 Commercial real estate 1,963,885 24,464 61,083 5,138 2,054,570 Construction and land 82,046 12,828 3,598 224 98,696 Residential 2,301,622 — 5,408 9,060 2,316,090 Home equity 120,194 — — 1,075 121,269 Consumer and other 179,634 — 2 67 179,703 Total $ 5,710,642 $ 54,312 $ 88,053 $ 16,491 $ 5,869,498 December 31, 2015 By Loan Grade or Nonaccrual Status Pass Special Mention Accruing Substandard Nonaccrual Loans Total (In thousands) Commercial and industrial $ 1,070,438 $ 28,643 $ 11,455 $ 1,019 $ 1,111,555 Commercial real estate 1,841,603 27,594 33,705 11,232 1,914,134 Construction and land 162,563 12,974 4,600 3,297 183,434 Residential 2,213,204 — 6,675 9,661 2,229,540 Home equity 118,522 — — 1,306 119,828 Consumer and other 158,686 — 1,979 56 160,721 Total $ 5,565,016 $ 69,211 $ 58,414 $ 26,571 $ 5,719,212 The following tables present, by class of receivable, the balance of impaired loans with and without a related allowance, the associated allowance for those impaired loans with a related allowance, and the total unpaid principal on impaired loans: As of and for the three and nine months ended September 30, 2016 Recorded Investment (1) Unpaid Principal Balance Related Allowance QTD Average Recorded Investment YTD Average Recorded Investment QTD Interest Income Recognized while Impaired YTD Interest Income Recognized while Impaired (In thousands) With no related allowance recorded: Commercial and industrial $ 11,742 $ 13,874 n/a $ 10,774 $ 6,325 $ 98 $ 169 Commercial real estate 5,966 11,148 n/a 7,288 9,672 332 874 Construction and land 224 548 n/a 400 1,332 48 48 Residential 6,472 6,832 n/a 7,345 7,345 59 173 Home equity — — n/a — — — — Consumer and other — — n/a — — — — Subtotal 24,404 32,402 n/a 25,807 24,674 537 1,264 With an allowance recorded: Commercial and industrial 37 37 $ 22 37 33 — 1 Commercial real estate 7,164 7,593 593 7,194 7,259 79 237 Construction and land — — — — 660 — — Residential 6,877 6,877 701 5,977 5,994 36 115 Home equity — — — — — — — Consumer and other — — — — — — — Subtotal 14,078 14,507 1,316 13,208 13,946 115 353 Total: Commercial and industrial 11,779 13,911 22 10,811 6,358 98 170 Commercial real estate 13,130 18,741 593 14,482 16,931 411 1,111 Construction and land 224 548 — 400 1,992 48 48 Residential 13,349 13,709 701 13,322 13,339 95 288 Home equity — — — — — — — Consumer and other — — — — — — — Total $ 38,482 $ 46,909 $ 1,316 $ 39,015 $ 38,620 $ 652 $ 1,617 _____________________ (1) Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, which was applied to principal. As of and for the three and nine months ended September 30, 2015 Recorded Investment (1) Unpaid Principal Balance Related Allowance QTD Average Recorded Investment YTD Average Recorded Investment QTD Interest Income Recognized while Impaired YTD Interest Income Recognized while Impaired (In thousands) With no related allowance recorded: Commercial and industrial $ 2,076 $ 2,369 n/a $ 1,954 $ 1,441 $ 14 $ 822 Commercial real estate 15,744 23,696 n/a 17,698 19,140 320 1,286 Construction and land 1,148 2,177 n/a 1,187 3,599 — 92 Residential 10,006 11,409 n/a 9,821 9,573 58 209 Home equity 50 50 n/a 50 50 1 2 Consumer and other 7 7 n/a 257 707 60 61 Subtotal 29,031 39,708 n/a 30,967 34,510 453 2,472 With an allowance recorded: Commercial and industrial 19 19 $ — 441 848 12 66 Commercial real estate 12,262 14,091 1,300 9,818 9,166 82 298 Construction and land 2,200 2,356 172 2,200 2,200 — — Residential 6,254 6,254 1,185 6,908 7,110 43 143 Home equity — — — — — — — Consumer and other — — — — — — — Subtotal 20,735 22,720 2,657 19,367 19,324 137 507 Total: Commercial and industrial 2,095 2,388 — 2,395 2,289 26 888 Commercial real estate 28,006 37,787 1,300 27,516 28,306 402 1,584 Construction and land 3,348 4,533 172 3,387 5,799 — 92 Residential 16,260 17,663 1,185 16,729 16,683 101 352 Home equity 50 50 — 50 50 1 2 Consumer and other 7 7 — 257 707 60 61 Total $ 49,766 $ 62,428 $ 2,657 $ 50,334 $ 53,834 $ 590 $ 2,979 _____________________ (1) Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, which was applied to principal. As of and for the year ended December 31, 2015 Recorded Investment (1) Unpaid Principal Balance Related Allowance Average Recorded Investment Interest Income Recognized while Impaired (In thousands) With no related allowance recorded: Commercial and industrial $ 2,259 $ 2,569 n/a $ 1,638 $ 836 Commercial real estate 12,116 20,113 n/a 17,885 1,494 Construction and land 1,097 2,132 n/a 3,027 92 Residential 7,788 8,576 n/a 9,384 269 Home equity — — n/a 42 2 Consumer and other — — n/a 545 61 Subtotal 23,260 33,390 n/a 32,521 2,754 With an allowance recorded: Commercial and industrial 15 15 $ 270 657 66 Commercial real estate 7,346 7,775 713 8,749 385 Construction and land 2,200 2,356 172 2,200 — Residential 6,351 6,966 474 6,940 186 Home equity — — — — — Consumer and other — — — — — Subtotal 15,912 17,112 1,629 18,546 637 Total: Commercial and industrial 2,274 2,584 270 2,295 902 Commercial real estate 19,462 27,888 713 26,634 1,879 Construction and land 3,297 4,488 172 5,227 92 Residential 14,139 15,542 474 16,324 455 Home equity — — — 42 2 Consumer and other — — — 545 61 Total $ 39,172 $ 50,502 $ 1,629 $ 51,067 $ 3,391 _____________________ (1) Recorded investment represents the client loan balance net of historical charge-offs and historical nonaccrual interest paid, which was applied to principal. When management determines that it is probable that the Bank will not collect all principal and interest on a loan in accordance with the original loan terms, the loan is designated as impaired. Loans that are designated as impaired require an analysis to determine the amount of impairment, if any. Impairment would be indicated as a result of the carrying value of the loan exceeding the estimated collateral value, less costs to sell, for collateral dependent loans or the net present value of the projected cash flow, discounted at the loan’s contractual effective interest rate, for loans not considered to be collateral dependent. Generally, shortfalls in the analysis on collateral dependent loans would result in the impairment amount being charged-off to the allowance for loan losses. Shortfalls on cash flow dependent loans may be carried as specific allocations to the general reserve unless a known loss is determined to have occurred, in which case such known loss is charged-off. Loans in the held for sale category are carried at the lower of amortized cost or estimated fair value in the aggregate and are excluded from the allowance for loan losses analysis. The Bank may, under certain circumstances, restructure loans as a concession to borrowers who are experiencing financial difficulty. Such loans are classified as TDRs and are included in impaired loans. TDRs typically result from the Bank’s loss mitigation activities which, among other things, could include rate reductions, payment extensions, and/or principal forgiveness. As of September 30, 2016 and December 31, 2015 , TDRs totaled $30.6 million . As of September 30, 2016 , $26.1 million of the $30.6 million in TDRs were on accrual status. As of December 31, 2015 , $18.6 million of the $30.6 million in TDRs were on accrual status. Since all TDR loans are considered impaired loans, they are individually evaluated for impairment. The resulting impairment, if any, would have an impact on the allowance for loan losses as a specific reserve or charge-off. If, prior to the classification as a TDR, the loan was not impaired, there would have been a general or allocated reserve on the particular loan. Therefore, depending upon the result of the impairment analysis, there could be an increase or decrease in the related allowance for loan losses. Many loans initially categorized as TDRs are already on nonaccrual status and are already considered impaired. Therefore, there is generally not a material change to the allowance for loan losses when a nonaccruing loan is categorized as a TDR. The following tables present the balance of TDRs that were restructured or defaulted during the periods indicated and the types of concessions granted: As of and for the three months ended September 30, 2016 Restructured current quarter TDRs that defaulted in the # of Loans Pre- modification recorded investment Post- modification recorded investment # of Loans Post- modification recorded investment (Dollars in thousands) Commercial and industrial — $ — $ — — $ — Commercial real estate — — — 1 1,276 Construction and land — — — — — Residential — — — — — Home equity — — — — — Consumer and other — — — — — Total — $ — $ — 1 $ 1,276 As of and for the nine months ended September 30, 2016 Restructured year to date TDRs that defaulted # of Loans Pre- modification recorded investment Post- modification recorded investment # of Loans Post- modification recorded investment (Dollars in thousands) Commercial and industrial 3 $ 7,384 $ 7,209 — $ — Commercial real estate 1 1,276 1,276 1 1,276 Construction and land — — — — — Residential 2 260 261 — — Home equity — — — — — Consumer and other — — — — — Total 6 $ 8,920 $ 8,746 1 $ 1,276 As of and for the nine months ended September 30, 2016 Extension of term Temporary rate reduction Payment deferral Combination of concessions (1) Total concessions # of Post- cation ment # of Post- # of Post- # of Post- # of Post- (Dollars in thousands) Commercial and industrial 2 $ 7,209 — $ — — $ — 1 $ — 3 $ 7,209 Commercial real estate — — — — — — 1 1,276 1 1,276 Construction and land — — — — — — — — — — Residential — — 2 261 — — — — 2 261 Home equity — — — — — — — — — — Consumer and other — — — — — — — — — — _____________________ (1) Combination of concessions includes loans that have had more than one modification, including extension of term, temporary reduction of interest rate, and/or payment deferral. As of and for the three months ended September 30, 2015 Restructured current quarter TDRs that defaulted in the current quarter that were restructured in prior twelve months # of Loans Pre- modification recorded investment Post- modification recorded investment # of Loans Post- modification recorded investment (Dollars in thousands) Commercial and industrial — $ — $ — — $ — Commercial real estate 1 732 720 — — Construction and land — — — — — Residential — — — — — Home equity — — — — — Consumer and other — — — — — Total 1 $ 732 $ 720 — $ — As of and for the three months ended September 30, 2015 Extension of term Temporary rate reduction Payment deferral Combination of concessions (1) Total concessions # of Post- cation ment # of Post- # of Post- # of Post- # of Post- (Dollars in thousands) Commercial and industrial — $ — — $ — — $ — — $ — — $ — Commercial real estate — — — — — — 1 720 1 720 Construction and land — — — — — — — — — — Residential — — — — — — — — — — Home equity — — — — — — — — — — Consumer and other — — — — — — — — — — _____________________ (1) Combination of concessions includes loans that have had more than one modification, including extension of term, temporary reduction of interest rate, and/or payment deferral. As of and for the nine months ended September 30, 2015 Restructured year to date TDRs that defaulted year to date that were restructured in prior twelve months # of Loans Pre- modification recorded investment Post- modification recorded investment # of Loans Post- modification recorded investment (Dollars in thousands) Commercial and industrial 1 $ 1,298 $ 1,304 — $ — Commercial real estate 2 4,850 4,838 — — Construction and land — — — — — Residential 8 513 516 — — Home equity — — — — — Consumer and other — — — — — Total 11 $ 6,661 $ 6,658 — $ — As of and for the nine months ended September 30, 2015 Extension of term Temporary rate reduction Payment deferral Combination of concessions (1) Total concessions # of Post- cation ment # of Post- # of Post- # of Post- # of Post- (Dollars in thousands) Commercial and industrial — $ — — $ — — $ — 1 $ 1,304 1 $ 1,304 Commercial real estate 1 4,118 — — — — 1 720 2 4,838 Construction and land — — — — — — — — — — Residential — — 7 491 1 25 — — 8 516 Home equity — — — — — — — — — — Consumer and other — — — — — — — — — — _____________________ (1) Combination of concessions includes loans that have had more than one modification, including extension of term, temporary reduction of interest rate, and/or payment deferral. |