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. The following table presents a summary of the loan portfolio based on the portfolio segment as of the dates indicated: December 31, 2017 December 31, 2016 (In thousands) Commercial and industrial $ 520,992 $ 611,370 Commercial tax-exempt 418,698 398,604 Total commercial and industrial 939,690 1,009,974 Commercial real estate 2,440,220 2,302,244 Construction and land 164,990 104,839 Residential 2,682,533 2,379,861 Home equity 99,958 118,817 Consumer and other 177,637 198,619 Total $ 6,505,028 $ 6,114,354 The following table presents nonaccrual loans receivable by class of receivable as of the dates indicated: December 31, 2017 December 31, 2016 (In thousands) Commercial and industrial $ 748 $ 572 Commercial tax-exempt — — Total commercial and industrial 748 572 Commercial real estate 1,985 4,583 Construction and land 110 179 Residential 8,470 10,908 Home equity 2,840 1,072 Consumer and other 142 1 Total $ 14,295 $ 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 December 31, 2017 and 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 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 present the payment status of loans receivable by class of receivable as of the dates indicated: December 31, 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 $ 10,903 $ 849 $ 11,752 $ 355 $ — $ 393 $ 748 $ 508,492 $ 520,992 Commercial tax-exempt — — — — — — — 418,698 418,698 Commercial real estate 4,043 — 4,043 163 — 1,822 1,985 2,434,192 2,440,220 Construction and land — — — — — 110 110 164,880 164,990 Residential 7,239 1,635 8,874 805 3,172 4,493 8,470 2,665,189 2,682,533 Home equity 355 — 355 — 71 2,769 2,840 96,763 99,958 Consumer and other 24 — 24 17 125 — 142 177,471 177,637 Total $ 22,564 $ 2,484 $ 25,048 $ 1,340 $ 3,368 $ 9,587 $ 14,295 $ 6,465,685 $ 6,505,028 December 31, 2016 Accruing Past Due Nonaccrual Loans 30-59 60-89 Total Current 30-89 90 Days Total Current Total (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. The following tables present the loan portfolio’s credit risk profile by internally assigned grade and class of receivable as of the dates indicated: December 31, 2017 By Loan Grade or Nonaccrual Status Pass Special Accruing Nonaccrual Total (In thousands) Commercial and industrial $ 496,395 $ 12,898 $ 10,951 $ 748 $ 520,992 Commercial tax-exempt 413,139 5,559 — — 418,698 Commercial real estate 2,346,833 56,947 34,455 1,985 2,440,220 Construction and land 146,514 11,770 6,596 110 164,990 Residential 2,672,714 — 1,349 8,470 2,682,533 Home equity 97,118 — — 2,840 99,958 Consumer and other 177,494 — 1 142 177,637 Total $ 6,350,207 $ 87,174 $ 53,352 $ 14,295 $ 6,505,028 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 year ended December 31, 2017 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 $ 1,434 $ 2,238 n/a $ 1,594 $ 50 Commercial tax-exempt — — n/a 1,001 80 Commercial real estate 1,832 3,453 n/a 3,098 1,546 Construction and land 109 109 n/a 172 — Residential 9,337 9,709 n/a 9,033 360 Home equity 1,779 1,779 n/a 413 — Consumer and other — — n/a — — Subtotal $ 14,491 $ 17,288 n/a $ 15,311 $ 2,036 With an allowance recorded: Commercial and industrial $ 242 $ 242 $ 58 $ 156 $ 4 Commercial tax-exempt — — — — — Commercial real estate 6,855 7,284 362 6,980 322 Construction and land — — — — — Residential 828 828 89 2,469 89 Home equity 36 36 20 36 1 Consumer and other 125 250 125 10 — Subtotal $ 8,086 $ 8,640 $ 654 $ 9,651 $ 416 Total: Commercial and industrial $ 1,676 $ 2,480 $ 58 $ 1,750 $ 54 Commercial tax-exempt — — — 1,001 80 Commercial real estate 8,687 10,737 362 10,078 1,868 Construction and land 109 109 — 172 — Residential 10,165 10,537 89 11,502 449 Home equity 1,815 1,815 20 449 1 Consumer and other 125 250 125 10 — Total $ 22,577 $ 25,928 $ 654 $ 24,962 $ 2,452 ___________________ (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 December 31, 2017 and 2016 , TDRs totaled $13.6 million and $18.1 million , respectively. As of December 31, 2017 , $11.1 million of the $13.6 million of TDRs were on accrual status. As of December 31, 2016 , $12.4 million of the $18.1 million of TDRs were on accrual status. As of December 31, 2017 and 2016 , the Company had no commitments to lend additional funds to debtors for loans whose terms had been modified in a troubled debt restructuring. 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: As of and for the year ended December 31, 2017 Restructured Year to Date TDRs that defaulted that were restructured in prior twelve months # of Loans Pre- modification recorded investment Post- # of Loans Post- modification recorded investment (In thousands, except number of loans) Commercial and industrial — $ — $ — — $ — Commercial tax-exempt — — — — — Commercial real estate — — — — — Construction and land — — — — — Residential (1) 1 108 109 — — Home equity — — — — — Consumer and other — — — — — Total 1 $ 108 $ 109 — $ — ____________________ (1) Represents the following concession: temporary rate reduction. As of and for the year ended December 31, 2016 Restructured Year to Date TDRs that defaulted that were restructured in prior twelve months # of Loans Pre- modification recorded investment Post- # of Loans Post- modification recorded investment (In thousands, except number of loans) Commercial and industrial 3 $ 7,384 $ 7,209 — $ — Commercial tax-exempt — — — — — Commercial real estate 1 1,276 1,276 1 1,276 Construction and land — — — — — Residential 5 1,709 1,721 — — Home equity — — — — — Consumer and other — — — — — Total 9 $ 10,369 $ 10,206 1 $ 1,276 As of and for the year ended December 31, 2016 Extension of Term Temporary Rate Reduction Payment Deferral Combination of Concessions (1) Total Concessions # of Loans Post- # of Loans Post- # of Loans Post- # of Loans Post- # of Loans Post- (In thousands, except number of loans) 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 — — 4 519 1 1,202 — — 5 1,721 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. Any loans to senior management, executive officers, and directors are made in the ordinary course of business, under normal credit terms, including interest rates and collateral requirements prevailing at the time of origination for comparable transactions with other persons and do not represent more than normal credit risk. The Bank’s current policy is generally not to originate these types of loans. Total loans include deferred loan origination (fees)/ costs, net, of $6.9 million and $5.9 million as of December 31, 2017 and 2016 , respectively. Mortgage loans serviced for others totaled $41.4 million and $58.6 million as of December 31, 2017 and 2016 , respectively, and are not included in the Company’s total loans. |