Financing Receivables [Text Block] | Loan Portfolio and Credit Quality The Bank’s lending activities are conducted principally in the regions of New England, the San Francisco Bay Area, and Southern California. The Bank originates single and multi-family residential loans, commercial real estate loans, commercial and industrial loans, commercial tax exempt 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, the San Francisco Bay Area, and Southern California economies and real estate markets. Total loans include deferred loan origination (fees)/ costs, net, of $6.6 million and $5.9 million as of June 30, 2017 and December 31, 2016 , respectively. The following table presents a summary of the loan portfolio by portfolio segment and class of receivable as of the dates indicated: June 30, 2017 December 31, 2016 (In thousands) Commercial and industrial $ 541,756 $ 611,370 Commercial tax exempt 416,157 398,604 Total commercial and industrial 957,913 1,009,974 Commercial real estate 2,356,345 2,302,244 Construction and land 130,904 104,839 Residential 2,525,225 2,379,861 Home equity 108,549 118,817 Consumer and other 200,992 198,619 Total $ 6,279,928 $ 6,114,354 The following table presents nonaccrual loans receivable by portfolio segment and class of receivable as of the dates indicated: June 30, 2017 December 31, 2016 (In thousands) Commercial and industrial $ 697 $ 572 Commercial tax exempt — — Total commercial and industrial 697 572 Commercial real estate 3,004 4,583 Construction and land 232 179 Residential 11,173 10,908 Home equity 1,070 1,072 Consumer and other — 1 Total $ 16,176 $ 17,315 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 June 30, 2017 and December 31, 2016 . 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: June 30, 2017 Accruing Past Due Nonaccrual Loans 30-59 Days Past Due 60-89 Days Past Due Total Accruing Past Due Current 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 $ 665 $ — $ 665 $ 445 $ 78 $ 174 $ 697 $ 540,394 $ 541,756 Commercial tax exempt — — — — — — — 416,157 416,157 Commercial real estate — 182 182 970 101 1,933 3,004 2,353,159 2,356,345 Construction and land — — — 65 17 150 232 130,672 130,904 Residential — 1,140 1,140 4,251 233 6,689 11,173 2,512,912 2,525,225 Home equity 90 339 429 — — 1,070 1,070 107,050 108,549 Consumer and other 747 31 778 — — — — 200,214 200,992 Total $ 1,502 $ 1,692 $ 3,194 $ 5,731 $ 429 $ 10,016 $ 16,176 $ 6,260,558 $ 6,279,928 December 31, 2016 Accruing Past Due Nonaccrual Loans 30-59 Days Past Due 60-89 Days Past Due Total Accruing Past Due Current 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 $ 541 $ 1,078 $ 1,619 $ 537 $ — $ 35 $ 572 $ 609,179 $ 611,370 Commercial tax exempt — — — — — — — 398,604 398,604 Commercial real estate 3,096 — 3,096 2,311 835 1,437 4,583 2,294,565 2,302,244 Construction and land — — — 129 12 38 179 104,660 104,839 Residential 3,646 536 4,182 2,148 1,274 7,486 10,908 2,364,771 2,379,861 Home equity 245 — 245 — 80 992 1,072 117,500 118,817 Consumer and other 5,995 — 5,995 1 — — 1 192,623 198,619 Total $ 13,523 $ 1,614 $ 15,137 $ 5,126 $ 2,201 $ 9,988 $ 17,315 $ 6,081,902 $ 6,114,354 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. Generally, only commercial loans, including commercial real estate, other commercial and industrial loans, commercial tax exempt loans, and construction and land loans, are given a numerical grade. 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, 2016, 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. 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: June 30, 2017 By Loan Grade or Nonaccrual Status Pass Special Mention Accruing Substandard Nonaccrual Loans Total (In thousands) Commercial and industrial $ 522,349 $ 12,135 $ 6,575 $ 697 $ 541,756 Commercial tax exempt 410,535 5,622 — — 416,157 Commercial real estate 2,273,184 40,177 39,980 3,004 2,356,345 Construction and land 123,420 4,330 2,922 232 130,904 Residential 2,512,682 — 1,370 11,173 2,525,225 Home equity 107,479 — — 1,070 108,549 Consumer and other 200,741 — 251 — 200,992 Total $ 6,150,390 $ 62,264 $ 51,098 $ 16,176 $ 6,279,928 December 31, 2016 By Loan Grade or Nonaccrual Status Pass Special Mention Accruing Substandard Nonaccrual Loans Total (In thousands) Commercial and industrial $ 591,388 $ 10,133 $ 9,277 $ 572 $ 611,370 Commercial tax exempt 388,544 10,060 — — 398,604 Commercial real estate 2,230,732 17,233 49,696 4,583 2,302,244 Construction and land 101,254 109 3,297 179 104,839 Residential 2,367,554 — 1,399 10,908 2,379,861 Home equity 117,745 — — 1,072 118,817 Consumer and other 198,616 — 2 1 198,619 Total $ 5,995,833 $ 37,535 $ 63,671 $ 17,315 $ 6,114,354 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 six months ended June 30, 2017 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 $ 1,771 $ 2,377 n/a $ 1,667 $ 1,703 $ 12 $ 25 Commercial tax exempt — — n/a 1,084 1,859 80 80 Commercial real estate 2,879 6,429 n/a 3,358 3,824 724 970 Construction and land 232 568 n/a 190 181 — — Residential 9,600 9,971 n/a 9,561 8,958 78 179 Home equity — — n/a — — — — Consumer and other — — n/a — — — — Subtotal 14,482 19,345 n/a 15,860 16,525 894 1,254 With an allowance recorded: Commercial and industrial — — $ — — — — — Commercial tax exempt — — — — — — — Commercial real estate 6,996 7,425 453 7,011 7,042 96 171 Construction and land — — — — — — — Residential 2,503 2,503 507 2,613 3,312 23 62 Home equity 36 36 21 37 37 — — Consumer and other — — — — — — — Subtotal 9,535 9,964 981 9,661 10,391 119 233 Total: Commercial and industrial 1,771 2,377 — 1,667 1,703 12 25 Commercial tax exempt — — — 1,084 1,859 80 80 Commercial real estate 9,875 13,854 453 10,369 10,866 820 1,141 Construction and land 232 568 — 190 181 — — Residential 12,103 12,474 507 12,174 12,270 101 241 Home equity 36 36 21 37 37 — — Consumer and other — — — — — — — Total $ 24,017 $ 29,309 $ 981 $ 25,521 $ 26,916 $ 1,013 $ 1,487 _____________________ (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 six months ended June 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 $ 8,595 $ 10,622 n/a $ 5,668 $ 4,107 $ 59 $ 71 Commercial tax exempt — — n/a — — — — Commercial real estate 7,780 14,088 n/a 9,794 10,764 504 542 Construction and land 861 1,793 n/a 2,337 1,797 — — Residential 7,653 8,013 n/a 7,565 7,389 57 114 Home equity — — n/a — — — — Consumer and other — — n/a — — — — Subtotal 24,889 34,516 n/a 25,364 24,057 620 727 With an allowance recorded: Commercial and industrial 37 37 $ 22 44 31 — 1 Commercial tax exempt — — — — — — — Commercial real estate 7,233 7,662 640 7,266 7,294 78 158 Construction and land — — — — 943 — — Residential 5,682 5,682 439 5,630 5,958 36 79 Home equity — — — — — — — Consumer and other — — — — — — — Subtotal 12,952 13,381 1,101 12,940 14,226 114 238 Total: Commercial and industrial 8,632 10,659 22 5,712 4,138 59 72 Commercial tax exempt — — — — — — — Commercial real estate 15,013 21,750 640 17,060 18,058 582 700 Construction and land 861 1,793 — 2,337 2,740 — — Residential 13,335 13,695 439 13,195 13,347 93 193 Home equity — — — — — — — Consumer and other — — — — — — — Total $ 37,841 $ 47,897 $ 1,101 $ 38,304 $ 38,283 $ 734 $ 965 _____________________ (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, 2016 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 $ 1,793 $ 2,155 n/a $ 5,288 $ 249 Commercial tax exempt — — n/a — — Commercial real estate 4,488 9,647 n/a 8,520 1,032 Construction and land 179 507 n/a 1,069 48 Residential 8,134 8,506 n/a 7,446 211 Home equity — — n/a — — Consumer and other — — n/a — — Subtotal 14,594 20,815 n/a 22,323 1,540 With an allowance recorded: Commercial and industrial — — $ — 31 1 Commercial tax exempt — — — — — Commercial real estate 7,115 7,544 548 7,230 314 Construction and land — — — 507 — Residential 4,284 4,284 565 5,505 143 Home equity 37 37 22 3 — Consumer and other — — — — — Subtotal 11,436 11,865 1,135 13,276 458 Total: Commercial and industrial 1,793 2,155 — 5,319 250 Commercial tax exempt — — — — — Commercial real estate 11,603 17,191 548 15,750 1,346 Construction and land 179 507 — 1,576 48 Residential 12,418 12,790 565 12,951 354 Home equity 37 37 22 3 — Consumer and other — — — — — Total $ 26,030 $ 32,680 $ 1,135 $ 35,599 $ 1,998 _____________________ (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 June 30, 2017 and December 31, 2016 , TDRs totaled $16.6 million and $18.1 million , respectively. As of June 30, 2017 , $11.9 million of the $16.6 million in TDRs were on accrual status. As of December 31, 2016 , $12.4 million of the $18.1 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. There were no loans that were restructured or defaulted as of and during the three and six months ended June 30, 2017 . 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 June 30, 2016 Restructured in the current quarter TDRs that defaulted 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 2 $ 7,209 $ 7,209 — $ — Commercial tax exempt — — — — — Commercial real estate 1 1,276 1,276 — — Construction and land — — — — — Residential 1 115 116 — — Home equity — — — — — Consumer and other — — — — — Total 4 $ 8,600 $ 8,601 — $ — As of and for the three months ended June 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 — $ — — $ — — $ — 2 $ 7,209 Commercial tax exempt — — — — — — — — — — Commercial real estate — — — — — — 1 1,276 1 1,276 Construction and land — — — — — — — — — — Residential — — 1 116 — — — — 1 116 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 six months ended June 30, 2016 Restructured in the current quarter TDRs that defaulted 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 3 $ 7,384 $ 7,209 — $ — Commercial tax exempt — — — — — Commercial real estate 1 1,276 1,276 — — Construction and land — — — — — Residential 2 260 261 — — Home equity — — — — — Consumer and other — — — — — Total 6 $ 8,920 $ 8,746 — $ — As of and for the six months ended June 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 tax exempt — — — — — — — — — — 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. |