Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 01, 2019 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | HERITAGE FINANCIAL CORP /WA/ | |
Entity Central Index Key | 0001046025 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Common Stock, Shares Outstanding | 36,899,138 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash on hand and in banks | $ 71,252 | $ 92,704 |
Interest earning deposits | 39,918 | 69,206 |
Cash and cash equivalents | 111,170 | 161,910 |
Investment securities available for sale, at fair value | 985,009 | 976,095 |
Loans held for sale | 2,956 | 1,555 |
Loans receivable, net | 3,696,431 | 3,654,160 |
Allowance for loan losses | (36,152) | (35,042) |
Total loans receivable, net | 3,660,279 | 3,619,118 |
Other real estate owned | 1,904 | 1,983 |
Premises and equipment, net | 80,130 | 81,100 |
Federal Home Loan Bank stock, at cost | 7,377 | 6,076 |
Bank owned life insurance | 94,099 | 93,612 |
Accrued interest receivable | 15,621 | 15,403 |
Prepaid expenses and other assets | 123,026 | 98,522 |
Other intangible assets, net | 19,589 | 20,614 |
Goodwill | 240,939 | 240,939 |
Total assets | 5,342,099 | 5,316,927 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Deposits | 4,393,715 | 4,432,402 |
Federal Home Loan Bank advances | 25,000 | 0 |
Junior subordinated debentures | 20,375 | 20,302 |
Securities sold under agreement to repurchase | 24,923 | 31,487 |
Accrued expenses and other liabilities | 99,895 | 72,013 |
Total liabilities | 4,563,908 | 4,556,204 |
Stockholders’ equity: | ||
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding at March 31, 2019 and December 31, 2018 | 0 | 0 |
Common stock, no par value, 50,000,000 shares authorized; 36,899,138 and 36,874,055 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 591,767 | 591,806 |
Retained earnings | 185,863 | 176,372 |
Accumulated other comprehensive income (loss), net | 561 | (7,455) |
Total stockholders’ equity | 778,191 | 760,723 |
Total liabilities and stockholders’ equity | $ 5,342,099 | $ 5,316,927 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value (in usd per share) | ||
Preferred stock, shares authorized (in shares) | 2,500,000 | 2,500,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, no par value (in usd per share) | ||
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 36,899,138 | 36,874,055 |
Common stock, shares outstanding (in shares) | 36,899,138 | 36,874,055 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
INTEREST INCOME | ||
Interest and fees on loans | $ 46,699 | $ 38,159 |
Taxable interest on investment securities | 5,823 | 3,529 |
Nontaxable interest on investment securities | 950 | 1,341 |
Interest on other interest earning assets | 356 | 218 |
Total interest income | 53,828 | 43,247 |
INTEREST EXPENSE | ||
Deposits | 3,603 | 1,960 |
Junior subordinated debentures | 354 | 283 |
Other borrowings | 62 | 167 |
Total interest expense | 4,019 | 2,410 |
Net interest income | 49,809 | 40,837 |
Provision for loan losses | 920 | 1,152 |
Net interest income after provision for loan losses | 48,889 | 39,685 |
NONINTEREST INCOME | ||
Service charges and other fees | 4,485 | 4,543 |
Gain on sale of investment securities, net | 15 | 35 |
Gain on sale of loans, net | 252 | 874 |
Interest rate swap fees | 0 | 51 |
Other income | 2,656 | 2,045 |
Total noninterest income | 7,408 | 7,548 |
NONINTEREST EXPENSE | ||
Compensation and employee benefits | 21,914 | 21,367 |
Occupancy and equipment | 5,458 | 4,627 |
Data processing | 2,173 | 2,605 |
Marketing | 1,098 | 808 |
Professional services | 1,173 | 2,837 |
State/municipal business and use taxes | 798 | 688 |
Federal deposit insurance premium | 285 | 355 |
Other real estate owned, net | 86 | 0 |
Amortization of intangible assets | 1,025 | 795 |
Other expense | 2,515 | 2,665 |
Total noninterest expense | 36,525 | 36,747 |
Income before income taxes | 19,772 | 10,486 |
Income tax expense | 3,220 | 1,399 |
Net income | $ 16,552 | $ 9,087 |
Basic earnings per common share (in usd per share) | $ 0.45 | $ 0.27 |
Diluted earnings per common share (in usd per share) | 0.45 | 0.27 |
Dividends declared per common share (in usd per share) | $ 0.18 | $ 0.15 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 16,552 | $ 9,087 |
Change in fair value of investment securities available for sale, net of tax of $2,145 and $(2,008), respectively | 8,028 | (7,516) |
Reclassification adjustment for net gain from sale of investment securities available for sale included in income, net of tax of $(3) and $(8), respectively | (12) | (27) |
Other comprehensive income (loss) | 8,016 | (7,543) |
Comprehensive income | $ 24,568 | $ 1,544 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | ||
Change in fair value of securities available for sale, tax | $ 2,145 | $ (2,008) |
Reclassification adjustment of net gain from sale of investment securities included in income, tax | $ (3) | $ (8) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands | Total | Common stock | Retained earnings | Accumulated other comprehensive income (loss), net |
Beginning balance, shares at Dec. 31, 2017 | 29,928 | |||
Beginning balance at Dec. 31, 2017 | $ 508,305,000 | $ 360,590,000 | $ 149,013,000 | $ (1,298,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock awards forfeited, shares | 22 | |||
Restricted stock units vested, net of forfeitures of restricted stock awards | 0 | |||
Exercise of stock options, shares | 1 | |||
Exercise of stock options | 21,000 | $ 21,000 | ||
Stock-based compensation expense | 623,000 | $ 623,000 | ||
Common stock repurchased, shares | (45) | |||
Common stock repurchased | (1,438,000) | $ (1,438,000) | ||
Net income | 9,087,000 | 9,087,000 | ||
Other comprehensive income (loss), net of tax | (7,543,000) | (7,543,000) | ||
Common stock issued in business combinations, shares | 4,112 | |||
Common stock issued in business combinations | 130,770,000 | $ 130,770,000 | ||
Cash dividends declared on common stock | (5,117,000) | (5,117,000) | ||
Ending balance, shares at Mar. 31, 2018 | 34,018 | |||
Ending balance at Mar. 31, 2018 | 634,708,000 | $ 490,566,000 | 153,076,000 | (8,934,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Effects of implementation of accounting change related to operating leases | (93,000) | |||
Beginning balance, shares at Dec. 31, 2018 | 36,874 | |||
Beginning balance at Dec. 31, 2018 | 760,723,000 | $ 591,806,000 | 176,372,000 | (7,455,000) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock awards forfeited, shares | 49 | |||
Restricted stock units vested, net of forfeitures of restricted stock awards | 0 | |||
Exercise of stock options, shares | 2 | |||
Exercise of stock options | 22,000 | $ 22,000 | ||
Stock-based compensation expense | 741,000 | $ 741,000 | ||
Common stock repurchased, shares | (26) | |||
Common stock repurchased | (802,000) | $ (802,000) | ||
Net income | 16,552,000 | 16,552,000 | ||
Other comprehensive income (loss), net of tax | 8,016,000 | 8,016,000 | ||
Common stock issued in business combinations | 0 | |||
Cash dividends declared on common stock | (6,662,000) | (6,662,000) | ||
Ending balance, shares at Mar. 31, 2019 | 36,899 | |||
Ending balance at Mar. 31, 2019 | 778,191,000 | $ 591,767,000 | $ 185,863,000 | 561,000 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Effects of implementation of accounting change related to operating leases | $ 399,000 | $ 0 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | Jan. 23, 2019 | Oct. 24, 2018 | Jul. 24, 2018 | Apr. 25, 2018 | Jan. 24, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Statement of Stockholders' Equity [Abstract] | |||||||
Cash dividends declared on common stock (in usd per share) | $ 0.18 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.18 | $ 0.15 |
Condensed Consolidated Statem_8
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net income | $ 16,552 | $ 9,087 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation of premises and equipment, amortization of securities available for sale, and amortization of discount of junior subordinated debentures | 2,234 | 2,631 |
Changes in net deferred loan costs, net of amortization | 276 | 9 |
Provision for loan losses | 920 | 1,152 |
Net change in accrued interest receivable, prepaid expenses and other assets, and accrued expenses and other liabilities | 1,345 | (4,191) |
Stock-based compensation expense | 741 | 623 |
Amortization of intangible assets | 1,025 | 795 |
Origination of loans held for sale | (8,607) | (20,380) |
Proceeds from sale of loans | 7,458 | 20,651 |
Earnings on bank owned life insurance | (487) | (335) |
Gain on sale of loans, net | (252) | (874) |
Gain on sale of investment securities, net | (15) | (35) |
Impairment of right of use asset | 117 | 0 |
Loss on sale or write-off of premises and equipment, net | 5 | 6 |
Net cash provided by operating activities | 21,312 | 9,139 |
Cash flows from investing activities: | ||
Loans originated, net of principal payments | (42,357) | (46,959) |
Maturities, calls and payments of investment securities available for sale | 47,004 | 24,443 |
Purchase of investment securities available for sale | (57,606) | (69,352) |
Purchase of premises and equipment | (1,030) | (2,146) |
Proceeds from sales of other loans | 0 | 2,813 |
Proceeds from sales of other real estate owned | 79 | 0 |
Proceeds from sales of investment securities available for sale | 10,932 | 103,032 |
Proceeds from redemption of Federal Home Loan Bank stock | 2,276 | 10,130 |
Purchases of Federal Home Loan Bank stock | (3,577) | (7,984) |
Capital contributions to low-income housing tax credit partnerships and new market tax credit partnerships, net | (80) | (7,696) |
Net cash received from acquisitions | 0 | 80,133 |
Net cash (used in) provided by investing activities | (44,359) | 86,414 |
Cash flows from financing activities: | ||
Net (decrease) increase in deposits | (38,687) | 5,796 |
Federal Home Loan Bank advances | 76,900 | 191,450 |
Repayments of Federal Home Loan Bank advances | (51,900) | (253,250) |
Common stock cash dividends paid | (6,662) | (5,117) |
Net decrease in securities sold under agreement to repurchase | (6,564) | (5,721) |
Proceeds from exercise of stock options | 22 | 21 |
Repurchase of common stock | (802) | (1,438) |
Net cash used in financing activities | (27,693) | (68,259) |
Net (decrease) increase in cash and cash equivalents | (50,740) | 27,294 |
Cash and cash equivalents at beginning of period | 161,910 | 103,015 |
Cash and cash equivalents at end of period | 111,170 | 130,309 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 3,801 | 2,398 |
Cash paid for income taxes | 0 | 0 |
Supplemental non-cash disclosures of cash flow information: | ||
Transfers of properties held for sale recorded in premises and equipment, net to prepaid expenses and other assets | 763 | 0 |
Business Combinations: | ||
Common stock issued for business combinations | 0 | 130,770 |
Assets acquired (liabilities assumed) in acquisitions: | ||
Investment securities available for sale | 0 | 80,353 |
Loans receivable | 0 | 388,462 |
Premises and equipment | 0 | 732 |
Federal Home Loan Bank stock | 0 | 623 |
Accrued interest receivable | 0 | 1,448 |
Bank owned life insurance | 0 | 6,264 |
Prepaid expenses and other assets | 0 | 1,354 |
Other intangible assets | 0 | 11,270 |
Deposits | 0 | (505,885) |
Accrued expenses and other liabilities | $ 0 | $ (2,504) |
Description of Business, Basis
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements | Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements (a) Description of Business Heritage Financial Corporation ("Heritage" or the “Company”) is a bank holding company that was incorporated in the State of Washington in August 1997. The Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, Heritage Bank (the “Bank”). The Bank is a Washington-chartered commercial bank and its deposits are insured by the Federal Deposit Insurance Corporation ("FDIC"). The Bank is headquartered in Olympia, Washington and conducts business from its 63 branch offices as of March 31, 2019 located throughout Washington State and the greater Portland, Oregon area. The Bank’s business consists primarily of commercial lending and deposit relationships with small businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. Effective January 16, 2018, the Company completed the acquisition of Puget Sound Bancorp, Inc. (“Puget Sound”), the holding company for Puget Sound Bank, both of Bellevue, Washington (“Puget Sound Merger”) and on July 2, 2018, the Company completed the acquisition of Premier Commercial Bancorp ("Premier Commercial"), the holding company for Premier Community Bank, both of Hillsboro, Oregon ("Premier Merger"). See Note (2) Business Combinations for additional information on the Puget Sound Merger and the Premier Merger (collectively the "Premier and Puget Mergers"). (b) Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. It is recommended that these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Form 10-K”). In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . In preparing the unaudited Condensed Consolidated Financial Statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. (c) Significant Accounting Policies The significant accounting policies used in preparation of the Company's Condensed Consolidated Financial Statements are disclosed in the 2018 Annual Form 10-K. There have not been any material changes in the Company's significant accounting policies from those contained in the 2018 Annual Form 10-K, except for the accounting policy relating to operating leases adopted January 1, 2019, as discussed below. Operating leases The Company enters into noncancelable operating lease agreements, related to certain banking offices, back-office operational facilities, office equipment, and sublease agreements. The agreements are recorded as right of use assets and liabilities within prepaid expenses and other assets and accrued expenses and other liabilities, respectively, in the Condensed Consolidated Statements of Financial Condition. The Company elected an exclusion policy for right of use assets and liabilities for operating leases with a term of twelve months or less and a capitalization threshold policy for total contractual lease payments of $25,000 or more. The Company does not account for any leases at a portfolio level. The balance of right of use assets and liabilities was $28.4 million and $29.5 million , respectively, as of March 31, 2019. (d) Recently Issued Accounting Pronouncements FASB ASU 2016-02 , Leases (Topic 842), as amended by ASU 2017-13, 2018-01, 2018-10, ASU 2018-11, and ASU 2019-01 was originally issued in February 2016, to increase transparency and comparability of leases among organizations and to disclose key information about leasing arrangements. The Update sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the Update on January 1, 2019 and elected an exclusion accounting policy for lease assets and lease liabilities for leases with a term of twelve months or less and the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical determination of contracts as leases, lease classification and not reassess initial direct costs for historical lease arrangements. The Company applied a capitalization threshold policy of total contractual lease payments of $25,000 or more for recognition under the Update. The adoption of this ASU resulted in the recognition of operating lease right of use assets and liabilities of approximately $29.2 million and $29.8 million , respectively, in prepaid expenses and other assets and accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition related to certain banking offices, back-office operational facilities, office equipment and sublease agreements under noncancelable operating lease agreements. This change also resulted in a $399,000 net of tax cumulative-effect adjustment to beginning retained earnings under the modified retrospective approach. As a result of electing this transition method, prior periods have not been restated. FASB ASU 2016-13 , Financial Instruments: Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , as amended by ASU 2018-19, was issued in June 2016. Commonly referred to as the current expected credit loss model ("CECL"), this Update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. For public business entities, the Update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted for fiscal years after December 15, 2018. The Company is anticipating adopting the Update on January 1, 2020. Upon adoption, the Company expects a change in the processes, internal controls and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The new guidance may result in an increase in the allowance for loan losses which will also reflect the new requirement to include the nonaccretable principal differences on PCI loans; however, the Company is still in the process of determining the magnitude of the increase and its impact on the Condensed Consolidated Financial Statements. In addition, the current accounting policy and procedures for other-than-temporary impairment on investment securities available for sale will be replaced with an allowance approach. During 2017, the Company's management created a CECL steering committee to develop and implement processes and procedures to ensure it is fully compliant with the amendments at the adoption date. During 2018, the CECL steering committee selected a vendor to assist the Company in the adoption, completed the implementation discovery sessions, and selected appropriate methodologies. During 2019, the CECL steering committee is compiling necessary historical loan data and is in the process of reviewing qualitative factors. The Company anticipates running parallel existing ALLL and CECL models using second quarter 2019 data. FASB ASU 2017-04 , Goodwill (Topic 350) , was issued in January 2017 and eliminates Step 2 from the goodwill impairment test. The Update is effective for annual periods or any interim goodwill impairment tests beginning after December 15, 2019 using a prospective transition method and early adoption is permitted. The Company does not expect the Update will have a material impact on its Condensed Consolidated Financial Statements. FASB ASU 2018-13 , Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, was issued in August 2018 and modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company does not expect the Update will have a material impact on its Condensed Consolidated Financial Statements. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations There were no acquisitions or mergers completed during the three months ended March 31, 2019. During the three months ended March 31, 2018, the Company completed the acquisition of Puget Sound Bancorp. The Premier Merger was completed during the three months ended September 30, 2018 and is included below for comparability of results for the quarter ended March 31, 2019 compared to March 31, 2018. The Company finalized the purchase price allocation for both mergers as of December 31, 2018. Puget Sound Merger: The Puget Sound Merger was effective on January 16, 2018. As of the acquisition date, Puget Sound merged into Heritage and Puget Sound Bank merged into Heritage Bank. The Puget Sound Merger resulted in $68.5 million of goodwill. During the three months ended March 31, 2019 and 2018 , the Company incurred acquisition-related costs of approximately $75,000 and $4.5 million , respectively, for the Puget Sound Merger. Premier Merger: The Premier Merger was effective on July 2, 2018. As of the acquisition date, Premier merged into Heritage and Premier Commercial Bank merged into Heritage Bank. The Premier Merger resulted in $53.4 million of goodwill. During the three months ended March 31, 2019 and 2018 , the Company incurred acquisition-related costs of approximately $57,000 and $317,000 , respectively, for the Premier Merger. |
Investment Securities
Investment Securities | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Investment Securities | Investment Securities (a) Securities by Type and Maturity The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and fair values of investment securities available for sale at the dates indicated: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) March 31, 2019 U.S. Treasury and U.S. Government-sponsored agencies $ 98,900 $ 398 $ (44 ) $ 99,254 Municipal securities 144,399 2,590 (127 ) 146,862 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 349,189 1,224 (3,555 ) 346,858 Commercial 342,102 2,417 (2,891 ) 341,628 Corporate obligations 25,684 223 (20 ) 25,887 Other asset-backed securities 24,023 500 (3 ) 24,520 Total $ 984,297 $ 7,352 $ (6,640 ) $ 985,009 December 31, 2018 U.S. Treasury and U.S. Government-sponsored agencies $ 101,595 $ 155 $ (147 ) $ 101,603 Municipal securities 158,461 1,209 (806 ) 158,864 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 337,295 426 (6,119 ) 331,602 Commercial 338,250 1,035 (5,524 ) 333,761 Corporate obligations 25,662 36 (135 ) 25,563 Other asset-backed securities 24,278 424 — 24,702 Total $ 985,541 $ 3,285 $ (12,731 ) $ 976,095 (1) Issued and guaranteed by U.S. Government-sponsored agencies. There were no securities classified as trading or held to maturity at March 31, 2019 or December 31, 2018 . The amortized cost and fair value of investment securities available for sale at March 31, 2019 , by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Fair Value (In thousands) Due in one year or less $ 31,994 $ 31,967 Due after one year through five years 207,244 207,852 Due after five years through ten years 274,601 275,127 Due after ten years 470,458 470,063 Total $ 984,297 $ 985,009 (b) Unrealized Losses and Other-Than-Temporary Impairments The following table shows the gross unrealized losses and fair value of the Company's investment securities available for sale that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that the individual securities have been in continuous unrealized loss positions as of March 31, 2019 and December 31, 2018 : Less than 12 Months 12 Months or Longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) March 31, 2019 U.S. Treasury and U.S. Government-sponsored agencies $ 5,079 $ (23 ) $ 2,411 $ (21 ) $ 7,490 $ (44 ) Municipal securities 827 (4 ) 31,990 (123 ) 32,817 (127 ) Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 27,725 (170 ) 184,166 (3,385 ) 211,891 (3,555 ) Commercial 23,798 (231 ) 174,130 (2,660 ) 197,928 (2,891 ) Corporate obligations 3,874 (12 ) 1,992 (8 ) 5,866 (20 ) Other asset-backed securities 1,881 (3 ) — — 1,881 (3 ) Total $ 63,184 $ (443 ) $ 394,689 $ (6,197 ) $ 457,873 $ (6,640 ) December 31, 2018 U.S. Treasury and U.S. Government-sponsored agencies $ 46,992 $ (58 ) $ 7,350 $ (89 ) $ 54,342 $ (147 ) Municipal securities 31,157 (159 ) 38,792 (647 ) 69,949 (806 ) Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 66,620 (247 ) 193,726 (5,872 ) 260,346 (6,119 ) Commercial 43,531 (272 ) 190,585 (5,252 ) 234,116 (5,524 ) Corporate obligations 13,736 (87 ) 1,951 (48 ) 15,687 (135 ) Total $ 202,036 $ (823 ) $ 432,404 $ (11,908 ) $ 634,440 $ (12,731 ) (1) Issued and guaranteed by U.S. Government-sponsored agencies. The Company has evaluated these investment securities available for sale as of March 31, 2019 and December 31, 2018 and has determined that the decline in their value is not other-than-temporary. The unrealized losses are primarily due to increases in market interest rates. The fair value of these securities is expected to recover as the securities approach their maturity date. None of the underlying issuers of the municipal securities and corporate obligations had credit ratings that were below investment grade levels at March 31, 2019 or December 31, 2018 . The Company has the ability and intent to hold the investments until recovery of the securities' amortized cost, which may be the maturity date of the securities. For the three months ended March 31, 2019 and 2018 , there were no other-than-temporary charges recorded to net income. (c) Realized Gains and Losses The following table presents the gross realized gains and losses on the sale of securities available for sale for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) Gross realized gains $ 89 $ 104 Gross realized losses (74 ) (69 ) Net realized gains $ 15 $ 35 (d) Pledged Securities The following table summarizes the amortized cost and fair value of investment securities available for sale that are pledged as collateral for the following obligations at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Washington and Oregon state to secure public deposits $ 198,226 $ 198,044 $ 199,026 $ 196,786 Repurchase agreements 47,209 46,872 48,173 47,407 Other securities pledged 20,533 20,549 20,778 20,482 Total $ 265,968 $ 265,465 $ 267,977 $ 264,675 |
Loans Receivable
Loans Receivable | 3 Months Ended |
Mar. 31, 2019 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Loans Receivable | Loans Receivable (a) Loan Origination/Risk Management The Company originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. Disclosures related to the Company's recorded investment in loans receivable generally exclude accrued interest receivable and net deferred fees or costs as they were deemed insignificant. Loans acquired in a business combination are further classified as “purchased” loans. Loans purchased with evidence of credit deterioration since origination for which it is probable that not all contractually required payments will be collected are accounted for under FASB ASC 310-30, Receivables —Loans and Debt Securities Acquired with Deteriorated Credit Quality . These loans are identified as "PCI" loans. Loans purchased that are not accounted for under FASB ASC 310-30 are accounted for under FASB ASC 310-20, Receivables—Nonrefundable Fees and Other Costs, and are referred to as "non-PCI" loans. There were no PCI loans acquired in the Premier and Puget Mergers. The Company categorizes loans in one of the four segments of the total loan portfolio: commercial business, one-to-four family residential, real estate construction and land development and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. Loans receivable at March 31, 2019 and December 31, 2018 consisted of the following portfolio segments and classes: March 31, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 838,403 $ 853,606 Owner-occupied commercial real estate 785,316 779,814 Non-owner occupied commercial real estate 1,335,596 1,304,463 Total commercial business 2,959,315 2,937,883 One-to-four family residential 106,502 101,763 Real estate construction and land development: One-to-four family residential 110,699 102,730 Five or more family residential and commercial properties 126,379 112,730 Total real estate construction and land development 237,078 215,460 Consumer 390,303 395,545 Gross loans receivable 3,693,198 3,650,651 Net deferred loan costs 3,233 3,509 Loans receivable, net 3,696,431 3,654,160 Allowance for loan losses (36,152 ) (35,042 ) Total loans receivable, net $ 3,660,279 $ 3,619,118 (b) Concentrations of Credit As of March 31, 2019 and December 31, 2018 , there were no concentrations of loans related to any single industry in excess of 10% of the Company’s total loans. (c) Credit Quality Indicators As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans and (v) the general economic conditions of the United States of America, and specifically the states of Washington and Oregon. The Company utilizes a risk grading matrix to assign a risk grade to each loan on a scale of 1 to 10. Risk grades are aggregated to create the risk categories of "Pass" for grades 1 to 6, Other Asset Especially Mentioned ("OAEM") for grade 7, "Substandard" for grade 8, "Doubtful" for grade 9 and "Loss" for grade 10. The following tables present the balance of loans receivable by credit quality indicator as of March 31, 2019 and December 31, 2018 : March 31, 2019 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 780,469 $ 11,594 $ 46,340 $ — $ 838,403 Owner-occupied commercial real estate 747,294 22,576 15,446 — 785,316 Non-owner occupied commercial real estate 1,310,310 15,149 10,137 — 1,335,596 Total commercial business 2,838,073 49,319 71,923 — 2,959,315 One-to-four family residential 105,158 — 1,344 — 106,502 Real estate construction and land development: One-to-four family residential 109,748 — 951 — 110,699 Five or more family residential and commercial properties 126,330 49 — — 126,379 Total real estate construction and land development 236,078 49 951 — 237,078 Consumer 385,674 — 4,105 524 390,303 Gross loans receivable $ 3,564,983 $ 49,368 $ 78,323 $ 524 $ 3,693,198 December 31, 2018 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 788,395 $ 16,168 $ 49,043 $ — $ 853,606 Owner-occupied commercial real estate 741,227 27,724 10,863 — 779,814 Non-owner occupied commercial real estate 1,283,077 9,438 11,948 — 1,304,463 Total commercial business 2,812,699 53,330 71,854 — 2,937,883 One-to-four family residential 100,401 — 1,362 — 101,763 Real estate construction and land development: One-to-four family residential 101,519 258 953 — 102,730 Five or more family residential and commercial properties 112,678 52 — — 112,730 Total real estate construction and land development 214,197 310 953 — 215,460 Consumer 390,808 — 4,213 524 395,545 Gross loans receivable $ 3,518,105 $ 53,640 $ 78,382 $ 524 $ 3,650,651 Potential problem loans are loans classified as OAEM or worse that are currently accruing interest and are not considered impaired, but which management is closely monitoring because the financial information of the borrower causes concern as to their ability to meet their loan repayment terms. Potential problem loans may include PCI loans as these loans continue to accrete loan discounts established at acquisition based on the guidance of FASB ASC 310-30. Potential problem loans as of March 31, 2019 and December 31, 2018 were $94.1 million and $101.3 million , respectively. (d) Nonaccrual Loans Nonaccrual loans, segregated by segments and classes of loans, were as follows as of March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 9,394 $ 6,639 Owner-occupied commercial real estate 4,465 4,212 Non-owner occupied commercial real estate 2,445 1,713 Total commercial business 16,304 12,564 One-to-four family residential 68 71 Real estate construction and land development: One-to-four family residential 923 899 Total real estate construction and land development 923 899 Consumer 166 169 Nonaccrual loans $ 17,461 $ 13,703 PCI loans are not included in the nonaccrual loan table above because these loans are accounted for under FASB ASC 310-30, which provides that accretable yield is calculated based on a loan's expected cash flow even if the loan is not performing under its contractual terms. (e) Past due loans The Company performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The balances of past due loans, segregated by segments and classes of loans, as of March 31, 2019 and December 31, 2018 were as follows: March 31, 2019 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 550 $ 3,593 $ 4,143 $ 834,260 $ 838,403 Owner-occupied commercial real estate 1,677 349 2,026 783,290 785,316 Non-owner occupied commercial real estate 3,283 1,843 5,126 1,330,470 1,335,596 Total commercial business 5,510 5,785 11,295 2,948,020 2,959,315 One-to-four family residential 38 — 38 106,464 106,502 Real estate construction and land development: One-to-four family residential 105 258 363 110,336 110,699 Five or more family residential and commercial properties — — — 126,379 126,379 Total real estate construction and land development 105 258 363 236,715 237,078 Consumer 1,347 17 1,364 388,939 390,303 Gross loans receivable $ 7,000 $ 6,060 $ 13,060 $ 3,680,138 $ 3,693,198 December 31, 2018 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 2,988 $ 2,281 $ 5,269 $ 848,337 $ 853,606 Owner-occupied commercial real estate 563 600 1,163 778,651 779,814 Non-owner occupied commercial real estate 5,347 1,461 6,808 1,297,655 1,304,463 Total commercial business 8,898 4,342 13,240 2,924,643 2,937,883 One-to-four family residential 227 — 227 101,536 101,763 Real estate construction and land development: One-to-four family residential 665 234 899 101,831 102,730 Five or more family residential and commercial properties — — — 112,730 112,730 Total real estate construction and land development 665 234 899 214,561 215,460 Consumer 2,568 — 2,568 392,977 395,545 Gross loans receivable $ 12,358 $ 4,576 $ 16,934 $ 3,633,717 $ 3,650,651 There were no loans 90 days or more past due that were still accruing interest as of March 31, 2019 or December 31, 2018 , excluding PCI loans. (f) Impaired loans Impaired loans include nonaccrual loans and performing troubled debt restructured ("TDR") loans. The balances of impaired loans as of March 31, 2019 and December 31, 2018 are set forth in the following tables: March 31, 2019 Recorded Investment With No Specific Valuation Allowance Recorded Investment With Specific Valuation Allowance Total Recorded Investment Unpaid Contractual Principal Balance Related Specific Valuation Allowance (In thousands) Commercial business: Commercial and industrial $ 4,791 $ 17,844 $ 22,635 $ 24,051 $ 2,780 Owner-occupied commercial real estate 463 5,591 6,054 6,451 1,347 Non-owner occupied commercial real estate 5,163 1,800 6,963 7,032 228 Total commercial business 10,417 25,235 35,652 37,534 4,355 One-to-four family residential — 274 274 289 74 Real estate construction and land development: One-to-four family residential 923 — 923 1,020 — Total real estate construction and land development 923 — 923 1,020 — Consumer — 598 598 607 151 Total $ 11,340 $ 26,107 $ 37,447 $ 39,450 $ 4,580 December 31, 2018 Recorded Investment With No Specific Valuation Allowance Recorded Investment With Specific Valuation Allowance Total Recorded Investment Unpaid Contractual Principal Balance Related Specific Valuation Allowance (In thousands) Commercial business: Commercial and industrial $ 2,523 $ 20,119 $ 22,642 $ 24,176 $ 2,607 Owner-occupied commercial real estate 816 5,000 5,816 6,150 1,142 Non-owner occupied commercial real estate 3,352 2,924 6,276 6,414 206 Total commercial business 6,691 28,043 34,734 36,740 3,955 One-to-four family residential — 279 279 293 76 Real estate construction and land development: One-to-four family residential 899 — 899 1,662 — Total real estate construction and land development 899 — 899 1,662 — Consumer — 527 527 538 139 Total $ 7,590 $ 28,849 $ 36,439 $ 39,233 $ 4,170 The average recorded investment of impaired loans for the three months ended March 31, 2019 and 2018 are set forth in the following table: Three Months Ended March 31, 2019 2018 (In thousands) Commercial business: Commercial and industrial $ 22,639 $ 14,261 Owner-occupied commercial real estate 5,935 12,841 Non-owner occupied commercial real estate 6,619 10,358 Total commercial business 35,193 37,460 One-to-four family residential 277 297 Real estate construction and land development: One-to-four family residential 911 1,197 Five or more family residential and commercial properties — 322 Total real estate construction and land development 911 1,519 Consumer 562 411 Total $ 36,943 $ 39,687 For the three months ended March 31, 2019 and 2018 , no interest income was recognized subsequent to a loan’s classification as nonaccrual. For the three months ended March 31, 2019 and 2018 , the Bank recorded $301,000 and $326,000 , respectively, of interest income related to performing TDR loans. (g) Troubled Debt Restructured Loans The recorded investment balance and related allowance for loan losses of performing and nonaccrual TDR loans as of March 31, 2019 and December 31, 2018 were as follows: March 31, 2019 December 31, 2018 Performing TDRs Nonaccrual TDRs Performing TDRs Nonaccrual (In thousands) TDR loans $ 19,986 $ 5,488 $ 22,736 $ 6,943 Allowance for loan losses on TDR loans 2,181 601 2,257 658 The unfunded commitment to borrowers related to TDR loans was $1.4 million and $943,000 at March 31, 2019 and December 31, 2018 , respectively. Loans that were modified as TDR loans during the three months ended March 31, 2019 and 2018 are set forth in the following table: Three Months Ended March 31, 2019 2018 Number of Contracts (1) Recorded Investment (1)(2) Number of Contracts (1) Recorded Investment (1)(2) (Dollars in thousands) Commercial business: Commercial and industrial 9 $ 10,100 9 $ 4,323 Owner-occupied commercial real estate 2 934 — — Non-owner occupied commercial real estate 1 2,112 1 2,201 Total commercial business 12 13,146 10 6,524 Real estate construction and land development: One-to-four family residential 2 665 — — Total real estate construction and land development 2 665 — — Consumer 6 122 3 78 Total loans modified as TDR loans 20 $ 13,933 13 $ 6,602 (1) Number of contracts and outstanding principal balance represent loans which have balances as of period end as certain loans may have been paid-down or charged-off during the three months ended March 31, 2019 and 2018 . (2) Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modification, the Bank’s recorded investment in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification), except when the modification was the initial advance on a one-to-four family residential real estate construction and land development loan under a master guidance line. There were no advances on these types of loans during the three months ended March 31, 2019 and 2018 . The table above includes 11 loans that were previously reported as TDR loans. The Bank typically grants shorter extension periods to continually monitor these TDR loans despite the fact that the extended date might not be the date the Bank expects sufficient cash flow from these borrowers. The Bank does not consider these modifications a subsequent default of a TDR as new loan terms, specifically new maturity dates, were granted. Of the remaining first-time TDR loans, the concessions granted largely consisted of maturity extensions, interest rate modifications or a combination of both. The potential losses related to TDR loans are considered in the period the loan was first reported as a TDR loan and are adjusted, as necessary, in the current period based on more recent information. The related specific valuation allowance at March 31, 2019 for loans that were modified as TDR loans during the three months ended March 31, 2019 was $1.6 million . Loans that were modified during the previous twelve months that subsequently defaulted during the three months ended March 31, 2019 and 2018 are set forth in the following table: Three Months Ended March 31, 2019 2018 Number of Contracts Recorded Investments Number of Recorded Investments (Dollars in thousands) Commercial business: Commercial and industrial 1 $ 829 1 $ 283 Owner-occupied properties 1 717 — — Non-owner occupied commercial real estate 1 601 1 75 Total commercial business 3 2,147 2 358 Real estate construction and land development: One-to-four family residential — — 2 838 Total real estate construction and land development — — 2 838 Total 3 $ 2,147 4 $ 1,196 During the three months ended March 31, 2019 , the three loans defaulted because each was past its modified maturity date, and the borrower has not subsequently repaid the credits. The Bank has chosen not to further extend the maturity date on these loans. The Bank had a $314,000 specific valuation allowance at March 31, 2019 related to these TDR loans which defaulted during the three months ended March 31, 2019 . During the three months ended March 31, 2018 , the four loans defaulted because they were past their modified maturity dates and the borrowers had not subsequently repaid the credits. The Bank had chosen not to extend the maturities on these loans. The Bank had no specific valuation allowance at March 31, 2018 related to these TDR loans which defaulted during the three months ended March 31, 2018. (h) Purchased Credit Impaired Loans The following table reflects the outstanding principal balance and recorded investment of the PCI loans at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Outstanding Principal Recorded Investment Outstanding Principal Recorded Investment (In thousands) Commercial business: Commercial and industrial $ 5,521 $ 2,713 $ 6,319 $ 3,433 Owner-occupied commercial real estate 7,938 7,483 7,830 7,215 Non-owner occupied commercial real estate 8,245 6,651 8,685 7,059 Total commercial business 21,704 16,847 22,834 17,707 One-to-four family residential 3,097 3,251 3,169 3,315 Real estate construction and land development: One-to-four family residential 27 354 67 380 Five or more family residential and commercial properties 185 41 188 43 Total real estate construction and land development 212 395 255 423 Consumer 1,409 2,680 2,203 3,462 Gross PCI loans $ 26,422 $ 23,173 $ 28,461 $ 24,907 On the acquisition dates, the amount by which the undiscounted expected cash flows of the PCI loans exceeded the estimated fair value of the loan is the “accretable yield.” The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the PCI loans. The following table summarizes the accretable yield on the PCI loans for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) Balance at the beginning of the period $ 9,493 $ 11,224 Accretion (581 ) (781 ) Disposal and other (452 ) (1,698 ) Reclassification from nonaccretable difference — 2,524 Balance at the end of the period $ 8,460 $ 11,269 |
Allowance for Loan Losses
Allowance for Loan Losses | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Allowance for Loan Losses | Allowance for Loan Losses The allowance for loan losses is maintained at a level deemed appropriate by management to provide for probable incurred credit losses in the loan portfolio. The following table details the activity in the allowance for loan losses disaggregated by segment and class for the three months ended March 31, 2019 : Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Three Months Ended March 31, 2019 Commercial business: Commercial and industrial $ 11,343 $ (103 ) $ 7 $ 508 $ 11,755 Owner-occupied commercial real estate 4,898 — 3 355 5,256 Non-owner occupied commercial real estate 7,470 — 149 206 7,825 Total commercial business 23,711 (103 ) 159 1,069 24,836 One-to-four family residential 1,203 (15 ) — 59 1,247 Real estate construction and land development: One-to-four family residential 1,240 — 618 (436 ) 1,422 Five or more family residential and commercial properties 954 — — 41 995 Total real estate construction and land development 2,194 — 618 (395 ) 2,417 Consumer 6,581 (586 ) 117 368 6,480 Unallocated 1,353 — — (181 ) 1,172 Total $ 35,042 $ (704 ) $ 894 $ 920 $ 36,152 The following table details the allowance for loan losses disaggregated on the basis of the Company's impairment method as of March 31, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Allowance for Loan Losses (In thousands) Commercial business: Commercial and industrial $ 2,780 $ 8,227 $ 748 $ 11,755 Owner-occupied commercial real estate 1,347 3,266 643 5,256 Non-owner occupied commercial real estate 228 7,013 584 7,825 Total commercial business 4,355 18,506 1,975 24,836 One-to-four family residential 74 1,061 112 1,247 Real estate construction and land development: One-to-four family residential — 1,222 200 1,422 Five or more family residential and commercial properties — 916 79 995 Total real estate construction and land development — 2,138 279 2,417 Consumer 151 5,897 432 6,480 Unallocated — 1,172 — 1,172 Total $ 4,580 $ 28,774 $ 2,798 $ 36,152 The following table details the recorded investment balance of the loan receivables disaggregated on the basis of the Company’s impairment method as of March 31, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Gross Loans Receivable (In thousands) Commercial business: Commercial and industrial $ 22,635 $ 813,055 $ 2,713 $ 838,403 Owner-occupied commercial real estate 6,054 771,779 7,483 785,316 Non-owner occupied commercial real estate 6,963 1,321,982 6,651 1,335,596 Total commercial business 35,652 2,906,816 16,847 2,959,315 One-to-four family residential 274 102,977 3,251 106,502 Real estate construction and land development: One-to-four family residential 923 109,422 354 110,699 Five or more family residential and commercial properties — 126,338 41 126,379 Total real estate construction and land development 923 235,760 395 237,078 Consumer 598 387,025 2,680 390,303 Total $ 37,447 $ 3,632,578 $ 23,173 $ 3,693,198 The following tables detail activity in the allowance for loan losses disaggregated by segment and class for the three months ended March 31, 2018 : Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Three Months Ended March 31, 2018 Commercial business: Commercial and industrial $ 9,910 $ (81 ) $ 499 $ (385 ) $ 9,943 Owner-occupied commercial real estate 3,992 — 2 1,046 5,040 Non-owner occupied commercial real estate 8,097 — — (508 ) 7,589 Total commercial business 21,999 (81 ) 501 153 22,572 One-to-four family residential 1,056 — — 27 1,083 Real estate construction and land development: One-to-four family residential 862 — — 79 941 Five or more family residential and commercial properties 1,190 — — (75 ) 1,115 Total real estate construction and land development 2,052 — — 4 2,056 Consumer 6,081 (485 ) 88 370 6,054 Unallocated 898 — — 598 1,496 Total $ 32,086 $ (566 ) $ 589 $ 1,152 $ 33,261 The following table details the allowance for loan losses disaggregated on the basis of the Company's impairment method as of December 31, 2018 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Allowance for Loan Losses (In thousands) Commercial business: Commercial and industrial $ 2,607 $ 7,913 $ 823 $ 11,343 Owner-occupied commercial real estate 1,142 3,063 693 4,898 Non-owner occupied commercial real estate 206 6,630 634 7,470 Total commercial business 3,955 17,606 2,150 23,711 One-to-four family residential 76 1,015 112 1,203 Real estate construction and land development: One-to-four family residential — 1,040 200 1,240 Five or more family residential and commercial properties — 875 79 954 Total real estate construction and land development — 1,915 279 2,194 Consumer 139 5,965 477 6,581 Unallocated — 1,353 — 1,353 Total $ 4,170 $ 27,854 $ 3,018 $ 35,042 The following table details the recorded investment balance of the loan receivables disaggregated on the basis of the Company’s impairment method as of December 31, 2018 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Gross Loans Receivable (In thousands) Commercial business: Commercial and industrial $ 22,642 $ 827,531 $ 3,433 $ 853,606 Owner-occupied commercial real estate 5,816 766,783 7,215 779,814 Non-owner occupied commercial real estate 6,276 1,291,128 7,059 1,304,463 Total commercial business 34,734 2,885,442 17,707 2,937,883 One-to-four family residential 279 98,169 3,315 101,763 Real estate construction and land development: One-to-four family residential 899 101,451 380 102,730 Five or more family residential and commercial properties — 112,687 43 112,730 Total real estate construction and land development 899 214,138 423 215,460 Consumer 527 391,556 3,462 395,545 Total $ 36,439 $ 3,589,305 $ 24,907 $ 3,650,651 |
Other Real Estate Owned
Other Real Estate Owned | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
Other Real Estate Owned | Other Real Estate Owned Changes in other real estate owned during the three months ended March 31, 2019 was as follows: Three Months Ended 2019 (In thousands) Balance at the beginning of the period $ 1,983 Additions — Additions from acquisitions — Proceeds from dispositions (79 ) Gain on sales, net — Balance at the end of the period $ 1,904 There was no other real estate owned or activity for the three months ended March 31, 2018. At March 31, 2019 , the carrying amount of other real estate owned that was the result of foreclosure and obtaining physical possession of residential real estate properties was $434,000 . At March 31, 2019 , there were no consumer mortgage loans secured by residential real estate properties (included in the one-to-four family residential loans in Note (4) Loans Receivable) for which formal foreclosure proceedings were in process. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets (a) Goodwill The Company’s goodwill represents the excess of the purchase price over the fair value of net assets acquired in the Premier Merger on July 2, 2018; Puget Sound Merger on January 16, 2018; Washington Banking Company on May 1, 2014; Valley Community Bancshares on July 15, 2013; Western Washington Bancorp in 2006 and North Pacific Bank in 1998. The Company’s goodwill is assigned to the Bank and is evaluated for impairment at the Bank level (reporting unit). The following table presents the change in goodwill for the periods indicated: Three Months Ended March 31, 2019 2018 (In thousands) Balance at the beginning of the period $ 240,939 $ 119,029 Additions as a result of acquisitions (1) — 68,520 Balance at the end of the period $ 240,939 $ 187,549 (1) See Note (2) Business Combinations The Company performed its annual goodwill impairment test during the fourth quarter of 2018 and determined based on its Step 1 analysis that the fair value of the reporting unit exceeded the carrying value, such that the Company's goodwill was not considered impaired. Changes in the economic environment, operations of the reporting unit or other adverse events could result in future impairment charges which could have a material impact on the Company’s operating results. No events or circumstances since the annual impairment test were noted that would indicate it was more likely than not a goodwill impairment exists. (b) Other Intangible Assets Other intangible assets represent the core deposit intangible ("CDI") acquired in business combinations. The useful life of the CDI was estimated to be 10 years for the acquisitions of Premier Commercial Bancorp, Puget Sound Bancorp, Washington Banking Company, and Valley Community Bancshares, and was estimated to be 5 years for the acquisition of Northwest Commercial Bank. The following table presents the change in other intangible assets for the periods indicated: Three Months Ended March 31, 2019 2018 (In thousands) Balance at the beginning of the period $ 20,614 $ 6,088 Additions as a result of acquisitions (1) — 11,270 Amortization (1,025 ) (795 ) Balance at the end of the period $ 19,589 $ 16,563 (1) See Note (2) Business Combinations |
Junior Subordinated Debentures
Junior Subordinated Debentures | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Junior Subordinated Debentures | Junior Subordinated Debentures As part of the acquisition of Washington Banking Company on May 1, 2014, the Company assumed trust preferred securities and junior subordinated debentures with a total fair value of $18.9 million at the merger date. At March 31, 2019 and December 31, 2018 , the balance of the junior subordinated debentures, net of unaccreted discount, was $20.4 million and $20.3 million , respectively. The adjustable rate of the trust preferred securities at March 31, 2019 was 4.16% . The following table presents the weighted average rate of the junior subordinated debentures for the periods indicated: Three Months Ended March 31, 2019 2018 Weighted average rate (1) 7.06 % 5.73 % (1) The weighted average rate includes the accretion of the discount established at the merger date which is amortized over the life of the trust preferred securities. Other Borrowings (a) FHLB The Federal Home Loan Bank ("FHLB") of Des Moines functions as a member-owned cooperative providing credit for member financial institutions. At March 31, 2019 , the Bank maintained a credit facility with the FHLB of Des Moines with available borrowing capacity of $889.8 million . At March 31, 2019 the Bank had short-term FHLB advances outstanding of $25.0 million with maturity dates within 30 days. At December 31, 2018 the Bank had no FHLB advances outstanding. The following table sets forth the details of FHLB advances during the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) FHLB Advances: Average balance during the period $ 1,849 $ 35,733 Maximum month-end balance during the period $ 25,000 $ 37,200 Weighted average rate during the period 3.29 % 1.70 % Advances from the FHLB are collateralized by a blanket pledge on FHLB stock owned by the Bank, deposits at the FHLB, certain one-to-four single family residential loans or other assets, investment securities which are obligations of or guaranteed by the United States, or other assets. In accordance with the pledge agreement, the Company must maintain unencumbered collateral in an amount equal to varying percentages ranging from 100% to 160% of outstanding advances depending on the type of collateral. (b) Federal Funds Purchased The Bank maintains advance lines with Wells Fargo Bank, US Bank, The Independent Bankers Bank and Pacific Coast Bankers’ Bank to purchase federal funds of up to $90.0 million as of March 31, 2019 . The lines generally mature annually or are reviewed annually. As of March 31, 2019 and December 31, 2018 , there were no federal funds purchased. (c) Credit Facilities The Bank maintains a credit facility with the Federal Reserve Bank of San Francisco ("Federal Reserve Bank") with available borrowing capacity of $38.4 million as of March 31, 2019 . There were no borrowings outstanding as of March 31, 2019 and December 31, 2018 . Any advances on the credit facility would have to be first secured by the Bank's investment securities or loans receivable. |
Repurchase Agreements
Repurchase Agreements | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |
Repurchase Agreements | Repurchase Agreements The Company utilizes repurchase agreements with one -day maturities secured by pledged investment securities available for sale as a supplement to funding sources. For additional information on the total value of investment securities pledged for repurchase agreements see Note (3) Investment Securities. The following table presents the Company's repurchase agreement obligations by class of collateral pledged: March 31, 2019 December 31, 2018 (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 4,914 $ 4,878 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 9,646 9,335 Commercial 10,363 17,274 Total repurchase agreements $ 24,923 $ 31,487 (1) Issued and guaranteed by U.S. Government-sponsored agencies. |
Other Borrowings
Other Borrowings | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Other Borrowings | Junior Subordinated Debentures As part of the acquisition of Washington Banking Company on May 1, 2014, the Company assumed trust preferred securities and junior subordinated debentures with a total fair value of $18.9 million at the merger date. At March 31, 2019 and December 31, 2018 , the balance of the junior subordinated debentures, net of unaccreted discount, was $20.4 million and $20.3 million , respectively. The adjustable rate of the trust preferred securities at March 31, 2019 was 4.16% . The following table presents the weighted average rate of the junior subordinated debentures for the periods indicated: Three Months Ended March 31, 2019 2018 Weighted average rate (1) 7.06 % 5.73 % (1) The weighted average rate includes the accretion of the discount established at the merger date which is amortized over the life of the trust preferred securities. Other Borrowings (a) FHLB The Federal Home Loan Bank ("FHLB") of Des Moines functions as a member-owned cooperative providing credit for member financial institutions. At March 31, 2019 , the Bank maintained a credit facility with the FHLB of Des Moines with available borrowing capacity of $889.8 million . At March 31, 2019 the Bank had short-term FHLB advances outstanding of $25.0 million with maturity dates within 30 days. At December 31, 2018 the Bank had no FHLB advances outstanding. The following table sets forth the details of FHLB advances during the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) FHLB Advances: Average balance during the period $ 1,849 $ 35,733 Maximum month-end balance during the period $ 25,000 $ 37,200 Weighted average rate during the period 3.29 % 1.70 % Advances from the FHLB are collateralized by a blanket pledge on FHLB stock owned by the Bank, deposits at the FHLB, certain one-to-four single family residential loans or other assets, investment securities which are obligations of or guaranteed by the United States, or other assets. In accordance with the pledge agreement, the Company must maintain unencumbered collateral in an amount equal to varying percentages ranging from 100% to 160% of outstanding advances depending on the type of collateral. (b) Federal Funds Purchased The Bank maintains advance lines with Wells Fargo Bank, US Bank, The Independent Bankers Bank and Pacific Coast Bankers’ Bank to purchase federal funds of up to $90.0 million as of March 31, 2019 . The lines generally mature annually or are reviewed annually. As of March 31, 2019 and December 31, 2018 , there were no federal funds purchased. (c) Credit Facilities The Bank maintains a credit facility with the Federal Reserve Bank of San Francisco ("Federal Reserve Bank") with available borrowing capacity of $38.4 million as of March 31, 2019 . There were no borrowings outstanding as of March 31, 2019 and December 31, 2018 . Any advances on the credit facility would have to be first secured by the Bank's investment securities or loans receivable. |
Derivative Financial Instrument
Derivative Financial Instruments (Notes) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company has entered into certain interest rate swap contracts that are not designated as hedging instruments. The purpose of these derivative contracts is primarily to provide commercial business loan customers the ability to convert their loans from variable to fixed interest rates. Upon the origination of a derivative contract with a customer, the Company simultaneously enters into an offsetting derivative contract with a third party in order to offset its exposure on the variable and fixed rate components of the customer agreement. The Company recognizes immediate income based upon the difference in the bid/ask spread of the underlying transactions with its customers and the third party, which is recorded in interest rate swap fees on the Condensed Consolidated Statements of Income. Because the Company acts only as an intermediary for its customer, subsequent changes in the fair value of the underlying derivative contracts offset each other and do not significantly impact the Company’s results of operations. The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Notional Amounts Estimated Fair Value Notional Amounts Estimated Fair Value (In thousands) Non-hedging interest rate derivatives Interest rate swap asset (1) $ 170,714 $ 5,285 $ 171,798 $ 5,095 Interest rate swap liability (1) 170,714 (5,285 ) 171,798 (5,095 ) (1) The estimated fair value of derivatives with customers was $1,865 and $(1,643) as of March 31, 2019 and December 31, 2018 , respectively. The estimated fair value of derivatives with third parties was $(1,865) and $1,643 as of March 31, 2019 and December 31, 2018 , respectively. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Stockholders' Equity | Stockholders’ Equity (a) Earnings Per Common Share The following table illustrates the reconciliation of weighted average shares used for earnings per common share computations for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) Net income: Net income $ 16,552 $ 9,087 Dividends and undistributed earnings allocated to participating securities (52 ) (51 ) Net income allocated to common shareholders $ 16,500 $ 9,036 Basic: Weighted average common shares outstanding 36,881,499 33,332,645 Restricted stock awards (55,967 ) (127,099 ) Total basic weighted average common shares outstanding 36,825,532 33,205,546 Diluted: Basic weighted average common shares outstanding 36,825,532 33,205,546 Effect of potentially dilutive common shares (1) 185,108 142,556 Total diluted weighted average common shares outstanding 37,010,640 33,348,102 (1) Represents the effect of the assumed exercise of stock options and vesting of restricted stock awards and units. Potential dilutive shares are excluded from the computation of earnings per share if their effect is anti-dilutive. Anti-dilution occurs when the exercise price of a stock option or the unrecognized compensation cost per share of a restricted stock award exceeds the market price of the Company’s stock. (b) Dividends The timing and amount of cash dividends paid on the Company's common stock depends on the Company’s earnings, capital requirements, financial condition and other relevant factors. Dividends on common stock from the Company depend substantially upon receipt of dividends from the Bank, which is the Company’s predominant source of income. The following table summarizes the dividend activity for the three months ended March 31, 2019 and calendar year 2018 : Declared Cash Dividend per Share Record Date Paid Date January 24, 2018 $0.15 February 7, 2018 February 21, 2018 April 25, 2018 $0.15 May 10, 2018 May 24, 2018 July 24, 2018 $0.15 August 9, 2018 August 23, 2018 October 24, 2018 $0.17 November 7, 2018 November 21, 2018 October 24, 2018 $0.10 November 7, 2018 November 21, 2018 * January 23, 2019 $0.18 February 7, 2019 February 21, 2019 * Denotes a special dividend. The FDIC and the Washington State Department of Financial Institutions, Division of Banks have the authority under their supervisory powers to prohibit the payment of dividends by the Bank to the Company. Additionally, current guidance from the Board of Governors of the Federal Reserve System ("Federal Reserve") provides, among other things, that dividends per share on the Company’s common stock generally should not exceed earnings per share, measured over the previous four fiscal quarters. Current regulations allow the Company and the Bank to pay dividends on their common stock if the Company’s or the Bank’s regulatory capital would not be reduced below the statutory capital requirements set by the Federal Reserve and the FDIC. (c) Stock Repurchase Program The Company has had various stock repurchase programs since March 1999. On October 23, 2014, the Company's Board of Directors authorized the repurchase of up to 5% of the Company's outstanding common shares, or approximately 1,513,000 shares, under the eleventh stock repurchase plan. The number, timing and price of shares repurchased will depend on business and market conditions and other factors, including opportunities to deploy the Company's capital. Since the inception of the eleventh plan, the Company has repurchased 579,996 shares at an average share prices of $16.67 . No shares were repurchased under this plan during the three months ended March 31, 2019 or 2018 . In addition to the stock repurchases under a plan, the Company repurchases shares to pay withholding taxes on the vesting of restricted stock awards and units. The following table provides total repurchased shares for the periods indicated: Three Months Ended March 31, 2019 2018 Repurchased shares to pay withholding taxes (1) 25,854 45,426 Stock repurchase to pay withholding taxes average share price $ 31.01 $ 31.66 (1) During the three months ended March 31, 2018, the Company repurchased 26,741 shares related to the withholding taxes due on the accelerated vesting of the restricted stock units of Puget Sound which were converted to Heritage common stock shares with an average share price of $31.80 under the terms of the Puget Sound Merger. See Note (2) Business Combinations. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The changes in accumulated other comprehensive income (loss) (“AOCI”), all of which are due to changes in the fair value of available for sale securities and are net of tax, during the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, 2019 2018 (In thousands) Balance of AOCI at the beginning of period $ (7,455 ) $ (1,298 ) Other comprehensive income (loss) before reclassification 8,028 (7,516 ) Amounts reclassified from AOCI for gain on sale of investment securities included in net income (12 ) (27 ) Net current period other comprehensive income (loss) 8,016 (7,543 ) ASU 2016-01 implementation — (93 ) Balance of AOCI at the end of period $ 561 $ (8,934 ) |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1 : Valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow the Company to sell its ownership interest back to the fund at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities, or funds. Level 2 : Valuations for assets and liabilities traded in less active dealer or broker markets, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or valuations using methodologies with observable inputs. Level 3 : Valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques using unobservable inputs, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities. (a) Recurring and Nonrecurring Basis The Company used the following methods and significant assumptions to measure the fair value of certain assets on a recurring and nonrecurring basis: Investment Securities Available for Sale : The fair values of all investment securities are based upon the assumptions that market participants would use in pricing the security. If available, fair values of investment securities are determined by quoted market prices (Level 1). For investment securities where quoted market prices are not available, fair values are calculated based on market prices on similar securities (Level 2). For investment securities where quoted prices or market prices of similar securities are not available, fair values are calculated by using observable and unobservable inputs such as discounted cash flows or other market indicators (Level 3). Security valuations are obtained from third party pricing services for comparable assets or liabilities. Impaired Loans : At the time a loan is considered impaired, its impairment is measured based on either the present value of expected future cash flows discounted at the loan’s effective interest rate, the observable market price, or the fair market value of the collateral (less costs to sell) if the loan is collateral-dependent. Impaired loans for which impairment is measured using the discounted cash flow approach are not considered to be measured at fair value because the loan’s effective interest rate is generally not a fair value input, and for the purposes of fair value disclosures, the fair value of these loans are measured commensurate with non-impaired loans. If the Company utilizes the fair market value of the collateral method, the fair value used to measure impairment is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in a Level 3 classification of the inputs for determining fair value. Non-real estate collateral may be valued using an appraisal, net book value based on the borrower’s financial statements, or aging reports, adjusted or discounted based on management’s historical knowledge, changes in market conditions from the time of the valuation and management’s expertise and knowledge of the client and client’s business (Level 3). Impaired loans are evaluated on a quarterly basis and impairment is adjusted accordingly. Other Real Estate Owned : Assets acquired through or instead of loan foreclosure are initially recorded at fair value less costs to sell when acquired, establishing a new cost basis. These assets are subsequently accounted for at lower of cost or fair value less costs to sell. Fair value is commonly based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments are usually significant and typically result in Level 3 classification of the inputs for determining fair value. Appraisals for both collateral-dependent impaired loans and other real estate owned are performed by certified general appraisers for commercial properties or certified residential appraisers for residential properties whose qualifications and licenses have been reviewed and verified by the Company. Once received, the Company reviews the assumptions and approaches utilized in the appraisal as well as the resulting fair value in comparison with independent data sources such as recent market data or industry-wide statistics. On a quarterly basis, the Company compares the actual selling price of collateral that has been liquidated to the most recent appraised value to determine what additional adjustment should be made to the appraisal value to arrive at fair value. Derivative Financial Instruments: The Company obtains broker or dealer quotes to value its interest rate derivative contracts, which use valuation models using observable market data as of the measurement date (Level 2). The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 : March 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Assets Investment securities available for sale: U.S. Treasury and U.S. Government-sponsored agencies $ 99,254 $ 16,001 $ 83,253 $ — Municipal securities 146,862 — 146,862 — Mortgage-backed securities and collateralized mortgage obligations: Residential 346,858 — 346,858 — Commercial 341,628 — 341,628 — Corporate obligations 25,887 — 25,887 — Other asset-backed securities 24,520 — 24,520 — Total investment securities available for sale 985,009 16,001 969,008 — Equity Security 135 135 — — Derivative assets - interest rate swaps 5,285 — 5,285 — Liabilities Derivative liabilities - interest rate swaps $ 5,285 $ — $ 5,285 $ — December 31, 2018 Total Level 1 Level 2 Level 3 (In thousands) Assets Investment securities available for sale: U.S. Treasury and U.S. Government-sponsored agencies $ 101,603 $ 15,936 $ 85,667 $ — Municipal securities 158,864 — 158,864 — Mortgage-backed securities and collateralized mortgage obligations: Residential 331,602 — 331,602 — Commercial 333,761 — 333,761 — Corporate obligations 25,563 — 25,563 — Other asset-backed securities 24,702 — 24,702 — Total investment securities available for sale 976,095 15,936 960,159 — Equity Security 114 114 — — Derivative assets - interest rate swaps 5,095 — 5,095 — Liabilities Derivative liabilities - interest rate swaps $ 5,095 $ — $ 5,095 $ — There were no transfers between Level 1 and Level 2 during the three months ended March 31, 2019 and 2018 . Nonrecurring Basis The Company may be required to measure certain financial assets and liabilities at fair value on a nonrecurring basis. These adjustments to fair value usually result from application of lower-of-cost-or-market accounting or write-downs of individual assets. The following tables below represent assets measured at fair value on a nonrecurring basis at March 31, 2019 and December 31, 2018 and the net losses recorded in earnings during three months ended March 31, 2019 and 2018 : Basis (1) Fair Value at March 31, 2019 Total Level 1 Level 2 Level 3 Net Losses (Gains) Recorded in Earnings During the Three Months Ended March 31, 2019 (In thousands) Impaired loans: Commercial business: Commercial and industrial $ 109 $ 98 $ — $ — $ 98 $ (39 ) Total commercial business 109 98 — — 98 (39 ) Consumer 9 7 — — 7 — Total assets measured at fair value on a nonrecurring basis $ 118 $ 105 $ — $ — $ 105 $ (39 ) (1) Basis represents the unpaid principal balance of impaired loans. Basis (1) Fair Value at December 31, 2018 Total Level 1 Level 2 Level 3 Net Losses Recorded in Earnings During the Three Months Ended March 31, 2018 (In thousands) Impaired loans: Commercial business: Commercial and industrial $ 117 $ 107 $ — $ — $ 107 $ — Non-owner occupied commercial real estate 1,378 1,102 — — 1,102 — Total commercial business 1,495 1,209 — — 1,209 — Consumer 9 7 — — 7 — Total assets measured at fair value on a nonrecurring basis $ 1,504 $ 1,216 $ — $ — $ 1,216 $ — (1) Basis represents the unpaid principal balance of impaired loans. The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at March 31, 2019 and December 31, 2018 : March 31, 2019 Fair Value Valuation Technique(s) Unobservable Input(s) Range of Inputs; Weighted Average (Dollars in thousands) Impaired loans $ 105 Market approach Adjustment for differences between the comparable sales N/A (1) (1) Quantitative disclosures are not provided for collateral-dependent impaired loans because there were no adjustments made to the appraisal or stated values during the current period. December 31, 2018 Fair Value Valuation Technique(s) Unobservable Input(s) Range of Inputs; Weighted Average (Dollars in thousands) Impaired loans $ 1,216 Market approach Adjustment for differences between the comparable sales 10.4% - (37.3%); (10.9%) (b) Fair Value of Financial Instruments Because broadly traded markets do not exist for most of the Company’s financial instruments, the fair value calculations attempt to incorporate the effect of current market conditions at a specific time. These determinations are subjective in nature, involve uncertainties and matters of significant judgment and do not include tax ramifications; therefore, the results cannot be determined with precision, substantiated by comparison to independent markets and may not be realized in an actual sale or immediate settlement of the instruments. There may be inherent weaknesses in any calculation technique, and changes in the underlying assumptions used, including discount rates and estimates of future cash flows, could significantly affect the results. For all of these reasons, the aggregation of the fair value calculations presented herein do not represent, and should not be construed to represent, the underlying value of the Company. The following tables present the carrying value amount of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated: March 31, 2019 Carrying Value Fair Value Fair Value Measurements Using: Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash and cash equivalents $ 111,170 $ 111,170 $ 111,170 $ — $ — Investment securities available for sale 985,009 985,009 16,001 969,008 — Loans held for sale 2,956 3,042 — 3,042 — Total loans receivable, net 3,660,279 3,668,110 — — 3,668,110 Accrued interest receivable 15,621 15,621 93 3,971 11,557 Derivative assets - interest rate swaps 5,285 5,285 — 5,285 — Equity security 135 135 135 — — Financial Liabilities: Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts $ 3,872,589 $ 3,872,589 $ 3,872,589 $ — $ — Certificate of deposit accounts 521,126 525,045 — 525,045 — Securities sold under agreement to repurchase 24,923 24,923 24,923 — — Junior subordinated debentures 20,375 20,250 — — 20,250 Accrued interest payable 409 409 91 267 51 Derivative liabilities - interest rate swaps 5,285 5,285 — 5,285 — December 31, 2018 Carrying Value Fair Value Fair Value Measurements Using: Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash and cash equivalents $ 161,910 $ 161,910 $ 161,910 $ — $ — Investment securities available for sale 976,095 976,095 15,936 960,159 — Loans held for sale 1,555 1,605 — 1,605 — Loans receivable, net of allowance for loan losses 3,619,118 3,617,857 — — 3,617,857 Accrued interest receivable 15,403 15,403 68 4,091 11,244 Derivative assets - interest rate swaps 5,095 5,095 — 5,095 — Equity security 114 114 114 — — Financial Liabilities: Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts $ 3,965,510 $ 3,965,510 $ 3,965,510 $ — $ — Certificate of deposit accounts 466,892 470,222 — 470,222 — Federal Home Loan Bank advances — — — — — Securities sold under agreement to repurchase 31,487 31,487 31,487 — — Junior subordinated debentures 20,302 20,500 — — 20,500 Accrued interest payable 191 191 63 81 47 Derivative liabilities - interest rate swaps 5,095 5,095 — 5,095 — |
Cash Requirement
Cash Requirement | 3 Months Ended |
Mar. 31, 2019 | |
Banking and Thrift [Abstract] | |
Cash Requirement | Cash Requirement The Company is required to maintain an average reserve balance with the Federal Reserve Bank or maintain such reserve balance in the form of cash. The required reserve balance at March 31, 2019 and December 31, 2018 was $12.2 million and $9.2 million respectively, and was met by holding cash and maintaining an average balance with the Federal Reserve Bank. |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Leases On January 1, 2019, the Company adopted ASU 2016-02, Leases , as further explained in Note (1) Description of Business, Basis of Presentation, Significant Accounting Policies and Recently Issued Accounting Pronouncements. The Company enters into noncancelable operating lease agreements related to certain banking offices, back-office operational facilities, office equipment, and sublease agreements. The Company does not have leases designated as finance leases. The Company determines if an arrangement is a lease at inception. Operating lease right-of-use ("ROU") assets and liabilities are included in prepaid expenses and other assets and accrued expenses and other liabilities, respectively, in the Condensed Consolidated Statements of Financial Condition. ROU assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The operating lease ROU asset also includes any lease pre-payments made and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. As of March 31, 2019 the Company’s lease ROU assets and related lease liabilities were $28.4 million and $29.5 million , respectively. The table below summarizes the net lease cost recognized during the period presented: Three Months Ended March 31, 2019 (In thousands) Operating Lease Cost $ 1,243 Variable Lease Cost 218 Total lease cost (1) $ 1,461 (1) Income related to sub-lease activity is immaterial for the Company and not presented herein. The table below summarizes other information related to the Company's operating leases during the period presented: Three Months Ended March 31, 2019 (Dollars in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,187 ROU assets obtained in exchange for lease liabilities $ 335 Weighted average remaining lease term of operating leases, in years 8.48 Weighted average discount rate of operating leases 3.33 % The following table outlines lease payment obligations as outlined in the Company’s lease agreements for each of the next five years, as of March 31, 2019, and thereafter in addition to a reconcilement to the Company’s right of use liability at the date indicated: Year Ending December 31, (In thousands) 2019 $ 3,667 2020 4,581 2021 4,155 2022 3,730 2023 3,738 Thereafter 14,215 Total lease payments 34,086 Implied interest (4,542 ) Right of use liability $ 29,544 For comparative purposes as of December 31, 2018, the estimated future minimum annual rental commitments under noncancelable leases having an original or remaining term of more than one year as calculated prior to applying the modified retrospective method of ASU 2016-02 implementation are as follows: Year Ending December 31, (In thousands) 2019 4,766 2020 4,251 2021 2,477 2022 1,704 2023 1,568 Thereafter 1,788 16,554 As of March 31, 2019, the Company had not entered into any material leases that have not yet commenced. |
Description of Business, Basi_2
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Heritage Financial Corporation ("Heritage" or the “Company”) is a bank holding company that was incorporated in the State of Washington in August 1997. The Company is primarily engaged in the business of planning, directing and coordinating the business activities of its wholly-owned subsidiary, Heritage Bank (the “Bank”). The Bank is a Washington-chartered commercial bank and its deposits are insured by the Federal Deposit Insurance Corporation ("FDIC"). The Bank is headquartered in Olympia, Washington and conducts business from its 63 branch offices as of March 31, 2019 located throughout Washington State and the greater Portland, Oregon area. The Bank’s business consists primarily of commercial lending and deposit relationships with small businesses and their owners in its market areas and attracting deposits from the general public. The Bank also makes real estate construction and land development loans, consumer loans and originates first mortgage loans on residential properties primarily located in its market areas. Effective January 16, 2018, the Company completed the acquisition of Puget Sound Bancorp, Inc. (“Puget Sound”), the holding company for Puget Sound Bank, both of Bellevue, Washington (“Puget Sound Merger”) and on July 2, 2018, the Company completed the acquisition of Premier Commercial Bancorp ("Premier Commercial"), the holding company for Premier Community Bank, both of Hillsboro, Oregon ("Premier Merger"). See Note (2) Business Combinations for additional information on the Puget Sound Merger and the Premier Merger (collectively the "Premier and Puget Mergers"). |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with the accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC"). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. It is recommended that these unaudited Condensed Consolidated Financial Statements and accompanying Notes be read with the audited Consolidated Financial Statements and the accompanying Notes included in the Company's Annual Report on Form 10-K for the year ended December 31, 2018 (“ 2018 Annual Form 10-K”). In management's opinion, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2019 are not necessarily indicative of the results that may be expected for the year ending December 31, 2019 . In preparing the unaudited Condensed Consolidated Financial Statements, management is required to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses and related disclosures. Management believes that the judgments, estimates and assumptions used in the preparation of the financial statements are appropriate based on the facts and circumstances at the time. Actual results, however, could differ significantly from those estimates. |
Operating Leases Policy | Operating leases The Company enters into noncancelable operating lease agreements, related to certain banking offices, back-office operational facilities, office equipment, and sublease agreements. The agreements are recorded as right of use assets and liabilities within prepaid expenses and other assets and accrued expenses and other liabilities, respectively, in the Condensed Consolidated Statements of Financial Condition. The Company elected an exclusion policy for right of use assets and liabilities for operating leases with a term of twelve months or less and a capitalization threshold policy for total contractual lease payments of $25,000 or more. The Company does not account for any leases at a portfolio level. The balance of right of use assets and liabilities was $28.4 million and $29.5 million , respectively, as of March 31, 2019. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements FASB ASU 2016-02 , Leases (Topic 842), as amended by ASU 2017-13, 2018-01, 2018-10, ASU 2018-11, and ASU 2019-01 was originally issued in February 2016, to increase transparency and comparability of leases among organizations and to disclose key information about leasing arrangements. The Update sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the Update on January 1, 2019 and elected an exclusion accounting policy for lease assets and lease liabilities for leases with a term of twelve months or less and the package of practical expedients permitted under the transition guidance within the new standard, which allowed us to carry forward the historical determination of contracts as leases, lease classification and not reassess initial direct costs for historical lease arrangements. The Company applied a capitalization threshold policy of total contractual lease payments of $25,000 or more for recognition under the Update. The adoption of this ASU resulted in the recognition of operating lease right of use assets and liabilities of approximately $29.2 million and $29.8 million , respectively, in prepaid expenses and other assets and accrued expenses and other liabilities in the Condensed Consolidated Statements of Financial Condition related to certain banking offices, back-office operational facilities, office equipment and sublease agreements under noncancelable operating lease agreements. This change also resulted in a $399,000 net of tax cumulative-effect adjustment to beginning retained earnings under the modified retrospective approach. As a result of electing this transition method, prior periods have not been restated. FASB ASU 2016-13 , Financial Instruments: Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , as amended by ASU 2018-19, was issued in June 2016. Commonly referred to as the current expected credit loss model ("CECL"), this Update requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. For public business entities, the Update is effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years with early adoption permitted for fiscal years after December 15, 2018. The Company is anticipating adopting the Update on January 1, 2020. Upon adoption, the Company expects a change in the processes, internal controls and procedures to calculate the allowance for loan losses, including changes in assumptions and estimates to consider expected credit losses over the life of the loan versus the current accounting practice that utilizes the incurred loss model. The new guidance may result in an increase in the allowance for loan losses which will also reflect the new requirement to include the nonaccretable principal differences on PCI loans; however, the Company is still in the process of determining the magnitude of the increase and its impact on the Condensed Consolidated Financial Statements. In addition, the current accounting policy and procedures for other-than-temporary impairment on investment securities available for sale will be replaced with an allowance approach. During 2017, the Company's management created a CECL steering committee to develop and implement processes and procedures to ensure it is fully compliant with the amendments at the adoption date. During 2018, the CECL steering committee selected a vendor to assist the Company in the adoption, completed the implementation discovery sessions, and selected appropriate methodologies. During 2019, the CECL steering committee is compiling necessary historical loan data and is in the process of reviewing qualitative factors. The Company anticipates running parallel existing ALLL and CECL models using second quarter 2019 data. FASB ASU 2017-04 , Goodwill (Topic 350) , was issued in January 2017 and eliminates Step 2 from the goodwill impairment test. The Update is effective for annual periods or any interim goodwill impairment tests beginning after December 15, 2019 using a prospective transition method and early adoption is permitted. The Company does not expect the Update will have a material impact on its Condensed Consolidated Financial Statements. FASB ASU 2018-13 , Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement, was issued in August 2018 and modifies the disclosure requirements on fair value measurements in Topic 820. The amendments in this Update are effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The Company does not expect the Update will have a material impact on its Condensed Consolidated Financial Statements. |
Investment Securities (Tables)
Investment Securities (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of securities available for sale | The following tables present the amortized cost, gross unrealized gains, gross unrealized losses and fair values of investment securities available for sale at the dates indicated: Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) March 31, 2019 U.S. Treasury and U.S. Government-sponsored agencies $ 98,900 $ 398 $ (44 ) $ 99,254 Municipal securities 144,399 2,590 (127 ) 146,862 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 349,189 1,224 (3,555 ) 346,858 Commercial 342,102 2,417 (2,891 ) 341,628 Corporate obligations 25,684 223 (20 ) 25,887 Other asset-backed securities 24,023 500 (3 ) 24,520 Total $ 984,297 $ 7,352 $ (6,640 ) $ 985,009 December 31, 2018 U.S. Treasury and U.S. Government-sponsored agencies $ 101,595 $ 155 $ (147 ) $ 101,603 Municipal securities 158,461 1,209 (806 ) 158,864 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 337,295 426 (6,119 ) 331,602 Commercial 338,250 1,035 (5,524 ) 333,761 Corporate obligations 25,662 36 (135 ) 25,563 Other asset-backed securities 24,278 424 — 24,702 Total $ 985,541 $ 3,285 $ (12,731 ) $ 976,095 (1) Issued and guaranteed by U.S. Government-sponsored agencies. |
Schedule of maturities of investment securities | The amortized cost and fair value of investment securities available for sale at March 31, 2019 , by contractual maturity, are set forth below. Actual maturities may differ from contractual maturities because certain borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Amortized Cost Fair Value (In thousands) Due in one year or less $ 31,994 $ 31,967 Due after one year through five years 207,244 207,852 Due after five years through ten years 274,601 275,127 Due after ten years 470,458 470,063 Total $ 984,297 $ 985,009 |
Schedule of fair value and unrealized losses of available for sale investment securities | The following table shows the gross unrealized losses and fair value of the Company's investment securities available for sale that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that the individual securities have been in continuous unrealized loss positions as of March 31, 2019 and December 31, 2018 : Less than 12 Months 12 Months or Longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) March 31, 2019 U.S. Treasury and U.S. Government-sponsored agencies $ 5,079 $ (23 ) $ 2,411 $ (21 ) $ 7,490 $ (44 ) Municipal securities 827 (4 ) 31,990 (123 ) 32,817 (127 ) Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 27,725 (170 ) 184,166 (3,385 ) 211,891 (3,555 ) Commercial 23,798 (231 ) 174,130 (2,660 ) 197,928 (2,891 ) Corporate obligations 3,874 (12 ) 1,992 (8 ) 5,866 (20 ) Other asset-backed securities 1,881 (3 ) — — 1,881 (3 ) Total $ 63,184 $ (443 ) $ 394,689 $ (6,197 ) $ 457,873 $ (6,640 ) December 31, 2018 U.S. Treasury and U.S. Government-sponsored agencies $ 46,992 $ (58 ) $ 7,350 $ (89 ) $ 54,342 $ (147 ) Municipal securities 31,157 (159 ) 38,792 (647 ) 69,949 (806 ) Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 66,620 (247 ) 193,726 (5,872 ) 260,346 (6,119 ) Commercial 43,531 (272 ) 190,585 (5,252 ) 234,116 (5,524 ) Corporate obligations 13,736 (87 ) 1,951 (48 ) 15,687 (135 ) Total $ 202,036 $ (823 ) $ 432,404 $ (11,908 ) $ 634,440 $ (12,731 ) (1) Issued and guaranteed by U.S. Government-sponsored agencies. |
Schedule of realized gains and losses on sale of securities available for sale | The following table presents the gross realized gains and losses on the sale of securities available for sale for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) Gross realized gains $ 89 $ 104 Gross realized losses (74 ) (69 ) Net realized gains $ 15 $ 35 |
Scheduled of amortized cost and fair value of securities pledged as collateral | The following table summarizes the amortized cost and fair value of investment securities available for sale that are pledged as collateral for the following obligations at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Washington and Oregon state to secure public deposits $ 198,226 $ 198,044 $ 199,026 $ 196,786 Repurchase agreements 47,209 46,872 48,173 47,407 Other securities pledged 20,533 20,549 20,778 20,482 Total $ 265,968 $ 265,465 $ 267,977 $ 264,675 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Schedule of loans receivable | Loans receivable at March 31, 2019 and December 31, 2018 consisted of the following portfolio segments and classes: March 31, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 838,403 $ 853,606 Owner-occupied commercial real estate 785,316 779,814 Non-owner occupied commercial real estate 1,335,596 1,304,463 Total commercial business 2,959,315 2,937,883 One-to-four family residential 106,502 101,763 Real estate construction and land development: One-to-four family residential 110,699 102,730 Five or more family residential and commercial properties 126,379 112,730 Total real estate construction and land development 237,078 215,460 Consumer 390,303 395,545 Gross loans receivable 3,693,198 3,650,651 Net deferred loan costs 3,233 3,509 Loans receivable, net 3,696,431 3,654,160 Allowance for loan losses (36,152 ) (35,042 ) Total loans receivable, net $ 3,660,279 $ 3,619,118 |
Loans receivable by credit quality indicator | The following tables present the balance of loans receivable by credit quality indicator as of March 31, 2019 and December 31, 2018 : March 31, 2019 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 780,469 $ 11,594 $ 46,340 $ — $ 838,403 Owner-occupied commercial real estate 747,294 22,576 15,446 — 785,316 Non-owner occupied commercial real estate 1,310,310 15,149 10,137 — 1,335,596 Total commercial business 2,838,073 49,319 71,923 — 2,959,315 One-to-four family residential 105,158 — 1,344 — 106,502 Real estate construction and land development: One-to-four family residential 109,748 — 951 — 110,699 Five or more family residential and commercial properties 126,330 49 — — 126,379 Total real estate construction and land development 236,078 49 951 — 237,078 Consumer 385,674 — 4,105 524 390,303 Gross loans receivable $ 3,564,983 $ 49,368 $ 78,323 $ 524 $ 3,693,198 December 31, 2018 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 788,395 $ 16,168 $ 49,043 $ — $ 853,606 Owner-occupied commercial real estate 741,227 27,724 10,863 — 779,814 Non-owner occupied commercial real estate 1,283,077 9,438 11,948 — 1,304,463 Total commercial business 2,812,699 53,330 71,854 — 2,937,883 One-to-four family residential 100,401 — 1,362 — 101,763 Real estate construction and land development: One-to-four family residential 101,519 258 953 — 102,730 Five or more family residential and commercial properties 112,678 52 — — 112,730 Total real estate construction and land development 214,197 310 953 — 215,460 Consumer 390,808 — 4,213 524 395,545 Gross loans receivable $ 3,518,105 $ 53,640 $ 78,382 $ 524 $ 3,650,651 |
Schedule of nonaccrual loans | Nonaccrual loans, segregated by segments and classes of loans, were as follows as of March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 9,394 $ 6,639 Owner-occupied commercial real estate 4,465 4,212 Non-owner occupied commercial real estate 2,445 1,713 Total commercial business 16,304 12,564 One-to-four family residential 68 71 Real estate construction and land development: One-to-four family residential 923 899 Total real estate construction and land development 923 899 Consumer 166 169 Nonaccrual loans $ 17,461 $ 13,703 |
Past due financing receivables | The balances of past due loans, segregated by segments and classes of loans, as of March 31, 2019 and December 31, 2018 were as follows: March 31, 2019 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 550 $ 3,593 $ 4,143 $ 834,260 $ 838,403 Owner-occupied commercial real estate 1,677 349 2,026 783,290 785,316 Non-owner occupied commercial real estate 3,283 1,843 5,126 1,330,470 1,335,596 Total commercial business 5,510 5,785 11,295 2,948,020 2,959,315 One-to-four family residential 38 — 38 106,464 106,502 Real estate construction and land development: One-to-four family residential 105 258 363 110,336 110,699 Five or more family residential and commercial properties — — — 126,379 126,379 Total real estate construction and land development 105 258 363 236,715 237,078 Consumer 1,347 17 1,364 388,939 390,303 Gross loans receivable $ 7,000 $ 6,060 $ 13,060 $ 3,680,138 $ 3,693,198 December 31, 2018 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 2,988 $ 2,281 $ 5,269 $ 848,337 $ 853,606 Owner-occupied commercial real estate 563 600 1,163 778,651 779,814 Non-owner occupied commercial real estate 5,347 1,461 6,808 1,297,655 1,304,463 Total commercial business 8,898 4,342 13,240 2,924,643 2,937,883 One-to-four family residential 227 — 227 101,536 101,763 Real estate construction and land development: One-to-four family residential 665 234 899 101,831 102,730 Five or more family residential and commercial properties — — — 112,730 112,730 Total real estate construction and land development 665 234 899 214,561 215,460 Consumer 2,568 — 2,568 392,977 395,545 Gross loans receivable $ 12,358 $ 4,576 $ 16,934 $ 3,633,717 $ 3,650,651 |
Schedule of impaired loans, including restructured | Impaired loans include nonaccrual loans and performing troubled debt restructured ("TDR") loans. The balances of impaired loans as of March 31, 2019 and December 31, 2018 are set forth in the following tables: March 31, 2019 Recorded Investment With No Specific Valuation Allowance Recorded Investment With Specific Valuation Allowance Total Recorded Investment Unpaid Contractual Principal Balance Related Specific Valuation Allowance (In thousands) Commercial business: Commercial and industrial $ 4,791 $ 17,844 $ 22,635 $ 24,051 $ 2,780 Owner-occupied commercial real estate 463 5,591 6,054 6,451 1,347 Non-owner occupied commercial real estate 5,163 1,800 6,963 7,032 228 Total commercial business 10,417 25,235 35,652 37,534 4,355 One-to-four family residential — 274 274 289 74 Real estate construction and land development: One-to-four family residential 923 — 923 1,020 — Total real estate construction and land development 923 — 923 1,020 — Consumer — 598 598 607 151 Total $ 11,340 $ 26,107 $ 37,447 $ 39,450 $ 4,580 December 31, 2018 Recorded Investment With No Specific Valuation Allowance Recorded Investment With Specific Valuation Allowance Total Recorded Investment Unpaid Contractual Principal Balance Related Specific Valuation Allowance (In thousands) Commercial business: Commercial and industrial $ 2,523 $ 20,119 $ 22,642 $ 24,176 $ 2,607 Owner-occupied commercial real estate 816 5,000 5,816 6,150 1,142 Non-owner occupied commercial real estate 3,352 2,924 6,276 6,414 206 Total commercial business 6,691 28,043 34,734 36,740 3,955 One-to-four family residential — 279 279 293 76 Real estate construction and land development: One-to-four family residential 899 — 899 1,662 — Total real estate construction and land development 899 — 899 1,662 — Consumer — 527 527 538 139 Total $ 7,590 $ 28,849 $ 36,439 $ 39,233 $ 4,170 |
Schedule of average recorded investment impaired loans including restructuring loans | The average recorded investment of impaired loans for the three months ended March 31, 2019 and 2018 are set forth in the following table: Three Months Ended March 31, 2019 2018 (In thousands) Commercial business: Commercial and industrial $ 22,639 $ 14,261 Owner-occupied commercial real estate 5,935 12,841 Non-owner occupied commercial real estate 6,619 10,358 Total commercial business 35,193 37,460 One-to-four family residential 277 297 Real estate construction and land development: One-to-four family residential 911 1,197 Five or more family residential and commercial properties — 322 Total real estate construction and land development 911 1,519 Consumer 562 411 Total $ 36,943 $ 39,687 |
Recorded investment balance and related allowance for loan losses of accruing and non-accruing TDRs | The recorded investment balance and related allowance for loan losses of performing and nonaccrual TDR loans as of March 31, 2019 and December 31, 2018 were as follows: March 31, 2019 December 31, 2018 Performing TDRs Nonaccrual TDRs Performing TDRs Nonaccrual (In thousands) TDR loans $ 19,986 $ 5,488 $ 22,736 $ 6,943 Allowance for loan losses on TDR loans 2,181 601 2,257 658 |
Troubled debt restructurings on financing receivables | Loans that were modified as TDR loans during the three months ended March 31, 2019 and 2018 are set forth in the following table: Three Months Ended March 31, 2019 2018 Number of Contracts (1) Recorded Investment (1)(2) Number of Contracts (1) Recorded Investment (1)(2) (Dollars in thousands) Commercial business: Commercial and industrial 9 $ 10,100 9 $ 4,323 Owner-occupied commercial real estate 2 934 — — Non-owner occupied commercial real estate 1 2,112 1 2,201 Total commercial business 12 13,146 10 6,524 Real estate construction and land development: One-to-four family residential 2 665 — — Total real estate construction and land development 2 665 — — Consumer 6 122 3 78 Total loans modified as TDR loans 20 $ 13,933 13 $ 6,602 (1) Number of contracts and outstanding principal balance represent loans which have balances as of period end as certain loans may have been paid-down or charged-off during the three months ended March 31, 2019 and 2018 . (2) Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modification, the Bank’s recorded investment in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification), except when the modification was the initial advance on a one-to-four family residential real estate construction and land development loan under a master guidance line. There were no advances on these types of loans during the three months ended March 31, 2019 and 2018 . |
Troubled debt restructuring loans, subsequently defaulted | Loans that were modified during the previous twelve months that subsequently defaulted during the three months ended March 31, 2019 and 2018 are set forth in the following table: Three Months Ended March 31, 2019 2018 Number of Contracts Recorded Investments Number of Recorded Investments (Dollars in thousands) Commercial business: Commercial and industrial 1 $ 829 1 $ 283 Owner-occupied properties 1 717 — — Non-owner occupied commercial real estate 1 601 1 75 Total commercial business 3 2,147 2 358 Real estate construction and land development: One-to-four family residential — — 2 838 Total real estate construction and land development — — 2 838 Total 3 $ 2,147 4 $ 1,196 |
Purchased impaired loans | The following table reflects the outstanding principal balance and recorded investment of the PCI loans at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Outstanding Principal Recorded Investment Outstanding Principal Recorded Investment (In thousands) Commercial business: Commercial and industrial $ 5,521 $ 2,713 $ 6,319 $ 3,433 Owner-occupied commercial real estate 7,938 7,483 7,830 7,215 Non-owner occupied commercial real estate 8,245 6,651 8,685 7,059 Total commercial business 21,704 16,847 22,834 17,707 One-to-four family residential 3,097 3,251 3,169 3,315 Real estate construction and land development: One-to-four family residential 27 354 67 380 Five or more family residential and commercial properties 185 41 188 43 Total real estate construction and land development 212 395 255 423 Consumer 1,409 2,680 2,203 3,462 Gross PCI loans $ 26,422 $ 23,173 $ 28,461 $ 24,907 |
Schedule of impaired purchased loans accretable yield | The following table summarizes the accretable yield on the PCI loans for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) Balance at the beginning of the period $ 9,493 $ 11,224 Accretion (581 ) (781 ) Disposal and other (452 ) (1,698 ) Reclassification from nonaccretable difference — 2,524 Balance at the end of the period $ 8,460 $ 11,269 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Receivables [Abstract] | |
Schedule of changes in allowance for loan losses | The following tables detail activity in the allowance for loan losses disaggregated by segment and class for the three months ended March 31, 2018 : Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Three Months Ended March 31, 2018 Commercial business: Commercial and industrial $ 9,910 $ (81 ) $ 499 $ (385 ) $ 9,943 Owner-occupied commercial real estate 3,992 — 2 1,046 5,040 Non-owner occupied commercial real estate 8,097 — — (508 ) 7,589 Total commercial business 21,999 (81 ) 501 153 22,572 One-to-four family residential 1,056 — — 27 1,083 Real estate construction and land development: One-to-four family residential 862 — — 79 941 Five or more family residential and commercial properties 1,190 — — (75 ) 1,115 Total real estate construction and land development 2,052 — — 4 2,056 Consumer 6,081 (485 ) 88 370 6,054 Unallocated 898 — — 598 1,496 Total $ 32,086 $ (566 ) $ 589 $ 1,152 $ 33,261 The following table details the allowance for loan losses disaggregated on the basis of the Company's impairment method as of December 31, 2018 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Allowance for Loan Losses (In thousands) Commercial business: Commercial and industrial $ 2,607 $ 7,913 $ 823 $ 11,343 Owner-occupied commercial real estate 1,142 3,063 693 4,898 Non-owner occupied commercial real estate 206 6,630 634 7,470 Total commercial business 3,955 17,606 2,150 23,711 One-to-four family residential 76 1,015 112 1,203 Real estate construction and land development: One-to-four family residential — 1,040 200 1,240 Five or more family residential and commercial properties — 875 79 954 Total real estate construction and land development — 1,915 279 2,194 Consumer 139 5,965 477 6,581 Unallocated — 1,353 — 1,353 Total $ 4,170 $ 27,854 $ 3,018 $ 35,042 The following table details the activity in the allowance for loan losses disaggregated by segment and class for the three months ended March 31, 2019 : Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Three Months Ended March 31, 2019 Commercial business: Commercial and industrial $ 11,343 $ (103 ) $ 7 $ 508 $ 11,755 Owner-occupied commercial real estate 4,898 — 3 355 5,256 Non-owner occupied commercial real estate 7,470 — 149 206 7,825 Total commercial business 23,711 (103 ) 159 1,069 24,836 One-to-four family residential 1,203 (15 ) — 59 1,247 Real estate construction and land development: One-to-four family residential 1,240 — 618 (436 ) 1,422 Five or more family residential and commercial properties 954 — — 41 995 Total real estate construction and land development 2,194 — 618 (395 ) 2,417 Consumer 6,581 (586 ) 117 368 6,480 Unallocated 1,353 — — (181 ) 1,172 Total $ 35,042 $ (704 ) $ 894 $ 920 $ 36,152 The following table details the allowance for loan losses disaggregated on the basis of the Company's impairment method as of March 31, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Allowance for Loan Losses (In thousands) Commercial business: Commercial and industrial $ 2,780 $ 8,227 $ 748 $ 11,755 Owner-occupied commercial real estate 1,347 3,266 643 5,256 Non-owner occupied commercial real estate 228 7,013 584 7,825 Total commercial business 4,355 18,506 1,975 24,836 One-to-four family residential 74 1,061 112 1,247 Real estate construction and land development: One-to-four family residential — 1,222 200 1,422 Five or more family residential and commercial properties — 916 79 995 Total real estate construction and land development — 2,138 279 2,417 Consumer 151 5,897 432 6,480 Unallocated — 1,172 — 1,172 Total $ 4,580 $ 28,774 $ 2,798 $ 36,152 |
Schedule of loan receivables on the basis of impairment method | The following table details the recorded investment balance of the loan receivables disaggregated on the basis of the Company’s impairment method as of December 31, 2018 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Gross Loans Receivable (In thousands) Commercial business: Commercial and industrial $ 22,642 $ 827,531 $ 3,433 $ 853,606 Owner-occupied commercial real estate 5,816 766,783 7,215 779,814 Non-owner occupied commercial real estate 6,276 1,291,128 7,059 1,304,463 Total commercial business 34,734 2,885,442 17,707 2,937,883 One-to-four family residential 279 98,169 3,315 101,763 Real estate construction and land development: One-to-four family residential 899 101,451 380 102,730 Five or more family residential and commercial properties — 112,687 43 112,730 Total real estate construction and land development 899 214,138 423 215,460 Consumer 527 391,556 3,462 395,545 Total $ 36,439 $ 3,589,305 $ 24,907 $ 3,650,651 The following table details the recorded investment balance of the loan receivables disaggregated on the basis of the Company’s impairment method as of March 31, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans Total Gross Loans Receivable (In thousands) Commercial business: Commercial and industrial $ 22,635 $ 813,055 $ 2,713 $ 838,403 Owner-occupied commercial real estate 6,054 771,779 7,483 785,316 Non-owner occupied commercial real estate 6,963 1,321,982 6,651 1,335,596 Total commercial business 35,652 2,906,816 16,847 2,959,315 One-to-four family residential 274 102,977 3,251 106,502 Real estate construction and land development: One-to-four family residential 923 109,422 354 110,699 Five or more family residential and commercial properties — 126,338 41 126,379 Total real estate construction and land development 923 235,760 395 237,078 Consumer 598 387,025 2,680 390,303 Total $ 37,447 $ 3,632,578 $ 23,173 $ 3,693,198 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Real Estate [Abstract] | |
Changes in other real estate owned | Changes in other real estate owned during the three months ended March 31, 2019 was as follows: Three Months Ended 2019 (In thousands) Balance at the beginning of the period $ 1,983 Additions — Additions from acquisitions — Proceeds from dispositions (79 ) Gain on sales, net — Balance at the end of the period $ 1,904 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Change in goodwill | The following table presents the change in goodwill for the periods indicated: Three Months Ended March 31, 2019 2018 (In thousands) Balance at the beginning of the period $ 240,939 $ 119,029 Additions as a result of acquisitions (1) — 68,520 Balance at the end of the period $ 240,939 $ 187,549 (1) See Note (2) Business Combinations |
Change in other intangible assets | The following table presents the change in other intangible assets for the periods indicated: Three Months Ended March 31, 2019 2018 (In thousands) Balance at the beginning of the period $ 20,614 $ 6,088 Additions as a result of acquisitions (1) — 11,270 Amortization (1,025 ) (795 ) Balance at the end of the period $ 19,589 $ 16,563 (1) See Note (2) Business Combinations |
Junior Subordinated Debentures
Junior Subordinated Debentures (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of weighted average rate of junior subordinated debentures | The following table presents the weighted average rate of the junior subordinated debentures for the periods indicated: Three Months Ended March 31, 2019 2018 Weighted average rate (1) 7.06 % 5.73 % (1) The weighted average rate includes the accretion of the discount established at the merger date which is amortized over the life of the trust preferred securities. |
Repurchase Agreements (Tables)
Repurchase Agreements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |
Repurchase agreement obligations by class of collateral pledged | The following table presents the Company's repurchase agreement obligations by class of collateral pledged: March 31, 2019 December 31, 2018 (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 4,914 $ 4,878 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 9,646 9,335 Commercial 10,363 17,274 Total repurchase agreements $ 24,923 $ 31,487 (1) Issued and guaranteed by U.S. Government-sponsored agencies. |
Other Borrowings (Tables)
Other Borrowings (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of FHLB advances | The following table sets forth the details of FHLB advances during the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) FHLB Advances: Average balance during the period $ 1,849 $ 35,733 Maximum month-end balance during the period $ 25,000 $ 37,200 Weighted average rate during the period 3.29 % 1.70 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of notional amounts and estimated fair values of interest rate derivative contracts | The following table presents the notional amounts and estimated fair values of interest rate derivative contracts outstanding at March 31, 2019 and December 31, 2018 : March 31, 2019 December 31, 2018 Notional Amounts Estimated Fair Value Notional Amounts Estimated Fair Value (In thousands) Non-hedging interest rate derivatives Interest rate swap asset (1) $ 170,714 $ 5,285 $ 171,798 $ 5,095 Interest rate swap liability (1) 170,714 (5,285 ) 171,798 (5,095 ) (1) The estimated fair value of derivatives with customers was $1,865 and $(1,643) as of March 31, 2019 and December 31, 2018 , respectively. The estimated fair value of derivatives with third parties was $(1,865) and $1,643 as of March 31, 2019 and December 31, 2018 , respectively. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Stockholders' Equity Note [Abstract] | |
Schedule of earnings per share reconciliation | The following table illustrates the reconciliation of weighted average shares used for earnings per common share computations for the three months ended March 31, 2019 and 2018 : Three Months Ended March 31, 2019 2018 (In thousands) Net income: Net income $ 16,552 $ 9,087 Dividends and undistributed earnings allocated to participating securities (52 ) (51 ) Net income allocated to common shareholders $ 16,500 $ 9,036 Basic: Weighted average common shares outstanding 36,881,499 33,332,645 Restricted stock awards (55,967 ) (127,099 ) Total basic weighted average common shares outstanding 36,825,532 33,205,546 Diluted: Basic weighted average common shares outstanding 36,825,532 33,205,546 Effect of potentially dilutive common shares (1) 185,108 142,556 Total diluted weighted average common shares outstanding 37,010,640 33,348,102 (1) Represents the effect of the assumed exercise of stock options and vesting of restricted stock awards and units. |
Schedule of dividends activity | The following table summarizes the dividend activity for the three months ended March 31, 2019 and calendar year 2018 : Declared Cash Dividend per Share Record Date Paid Date January 24, 2018 $0.15 February 7, 2018 February 21, 2018 April 25, 2018 $0.15 May 10, 2018 May 24, 2018 July 24, 2018 $0.15 August 9, 2018 August 23, 2018 October 24, 2018 $0.17 November 7, 2018 November 21, 2018 October 24, 2018 $0.10 November 7, 2018 November 21, 2018 * January 23, 2019 $0.18 February 7, 2019 February 21, 2019 * Denotes a special dividend. |
Schedule of repurchased shares | The following table provides total repurchased shares for the periods indicated: Three Months Ended March 31, 2019 2018 Repurchased shares to pay withholding taxes (1) 25,854 45,426 Stock repurchase to pay withholding taxes average share price $ 31.01 $ 31.66 (1) During the three months ended March 31, 2018, the Company repurchased 26,741 shares related to the withholding taxes due on the accelerated vesting of the restricted stock units of Puget Sound which were converted to Heritage common stock shares with an average share price of $31.80 under the terms of the Puget Sound Merger. See Note (2) Business Combinations. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Equity [Abstract] | |
Changes in accumulated other comprehensive (loss) income (AOCI) by component | The changes in accumulated other comprehensive income (loss) (“AOCI”), all of which are due to changes in the fair value of available for sale securities and are net of tax, during the three months ended March 31, 2019 and 2018 are as follows: Three Months Ended March 31, 2019 2018 (In thousands) Balance of AOCI at the beginning of period $ (7,455 ) $ (1,298 ) Other comprehensive income (loss) before reclassification 8,028 (7,516 ) Amounts reclassified from AOCI for gain on sale of investment securities included in net income (12 ) (27 ) Net current period other comprehensive income (loss) 8,016 (7,543 ) ASU 2016-01 implementation — (93 ) Balance of AOCI at the end of period $ 561 $ (8,934 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair value measurements of assets on a recurring basis | The following tables summarize the balances of assets and liabilities measured at fair value on a recurring basis as of March 31, 2019 and December 31, 2018 : March 31, 2019 Total Level 1 Level 2 Level 3 (In thousands) Assets Investment securities available for sale: U.S. Treasury and U.S. Government-sponsored agencies $ 99,254 $ 16,001 $ 83,253 $ — Municipal securities 146,862 — 146,862 — Mortgage-backed securities and collateralized mortgage obligations: Residential 346,858 — 346,858 — Commercial 341,628 — 341,628 — Corporate obligations 25,887 — 25,887 — Other asset-backed securities 24,520 — 24,520 — Total investment securities available for sale 985,009 16,001 969,008 — Equity Security 135 135 — — Derivative assets - interest rate swaps 5,285 — 5,285 — Liabilities Derivative liabilities - interest rate swaps $ 5,285 $ — $ 5,285 $ — December 31, 2018 Total Level 1 Level 2 Level 3 (In thousands) Assets Investment securities available for sale: U.S. Treasury and U.S. Government-sponsored agencies $ 101,603 $ 15,936 $ 85,667 $ — Municipal securities 158,864 — 158,864 — Mortgage-backed securities and collateralized mortgage obligations: Residential 331,602 — 331,602 — Commercial 333,761 — 333,761 — Corporate obligations 25,563 — 25,563 — Other asset-backed securities 24,702 — 24,702 — Total investment securities available for sale 976,095 15,936 960,159 — Equity Security 114 114 — — Derivative assets - interest rate swaps 5,095 — 5,095 — Liabilities Derivative liabilities - interest rate swaps $ 5,095 $ — $ 5,095 $ — |
Fair value measurements of assets on a nonrecurring basis | The following tables below represent assets measured at fair value on a nonrecurring basis at March 31, 2019 and December 31, 2018 and the net losses recorded in earnings during three months ended March 31, 2019 and 2018 : Basis (1) Fair Value at March 31, 2019 Total Level 1 Level 2 Level 3 Net Losses (Gains) Recorded in Earnings During the Three Months Ended March 31, 2019 (In thousands) Impaired loans: Commercial business: Commercial and industrial $ 109 $ 98 $ — $ — $ 98 $ (39 ) Total commercial business 109 98 — — 98 (39 ) Consumer 9 7 — — 7 — Total assets measured at fair value on a nonrecurring basis $ 118 $ 105 $ — $ — $ 105 $ (39 ) (1) Basis represents the unpaid principal balance of impaired loans. Basis (1) Fair Value at December 31, 2018 Total Level 1 Level 2 Level 3 Net Losses Recorded in Earnings During the Three Months Ended March 31, 2018 (In thousands) Impaired loans: Commercial business: Commercial and industrial $ 117 $ 107 $ — $ — $ 107 $ — Non-owner occupied commercial real estate 1,378 1,102 — — 1,102 — Total commercial business 1,495 1,209 — — 1,209 — Consumer 9 7 — — 7 — Total assets measured at fair value on a nonrecurring basis $ 1,504 $ 1,216 $ — $ — $ 1,216 $ — (1) Basis represents the unpaid principal balance of impaired loans. |
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | The following tables present quantitative information about Level 3 fair value measurements for financial instruments measured at fair value on a non-recurring basis at March 31, 2019 and December 31, 2018 : March 31, 2019 Fair Value Valuation Technique(s) Unobservable Input(s) Range of Inputs; Weighted Average (Dollars in thousands) Impaired loans $ 105 Market approach Adjustment for differences between the comparable sales N/A (1) (1) Quantitative disclosures are not provided for collateral-dependent impaired loans because there were no adjustments made to the appraisal or stated values during the current period. December 31, 2018 Fair Value Valuation Technique(s) Unobservable Input(s) Range of Inputs; Weighted Average (Dollars in thousands) Impaired loans $ 1,216 Market approach Adjustment for differences between the comparable sales 10.4% - (37.3%); (10.9%) |
Schedule of carrying value and fair value of financial instruments | The following tables present the carrying value amount of the Company’s financial instruments and their corresponding estimated fair values at the dates indicated: March 31, 2019 Carrying Value Fair Value Fair Value Measurements Using: Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash and cash equivalents $ 111,170 $ 111,170 $ 111,170 $ — $ — Investment securities available for sale 985,009 985,009 16,001 969,008 — Loans held for sale 2,956 3,042 — 3,042 — Total loans receivable, net 3,660,279 3,668,110 — — 3,668,110 Accrued interest receivable 15,621 15,621 93 3,971 11,557 Derivative assets - interest rate swaps 5,285 5,285 — 5,285 — Equity security 135 135 135 — — Financial Liabilities: Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts $ 3,872,589 $ 3,872,589 $ 3,872,589 $ — $ — Certificate of deposit accounts 521,126 525,045 — 525,045 — Securities sold under agreement to repurchase 24,923 24,923 24,923 — — Junior subordinated debentures 20,375 20,250 — — 20,250 Accrued interest payable 409 409 91 267 51 Derivative liabilities - interest rate swaps 5,285 5,285 — 5,285 — December 31, 2018 Carrying Value Fair Value Fair Value Measurements Using: Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash and cash equivalents $ 161,910 $ 161,910 $ 161,910 $ — $ — Investment securities available for sale 976,095 976,095 15,936 960,159 — Loans held for sale 1,555 1,605 — 1,605 — Loans receivable, net of allowance for loan losses 3,619,118 3,617,857 — — 3,617,857 Accrued interest receivable 15,403 15,403 68 4,091 11,244 Derivative assets - interest rate swaps 5,095 5,095 — 5,095 — Equity security 114 114 114 — — Financial Liabilities: Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts $ 3,965,510 $ 3,965,510 $ 3,965,510 $ — $ — Certificate of deposit accounts 466,892 470,222 — 470,222 — Federal Home Loan Bank advances — — — — — Securities sold under agreement to repurchase 31,487 31,487 31,487 — — Junior subordinated debentures 20,302 20,500 — — 20,500 Accrued interest payable 191 191 63 81 47 Derivative liabilities - interest rate swaps 5,095 5,095 — 5,095 — |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Summary of net lease cost and other related information | The table below summarizes the net lease cost recognized during the period presented: Three Months Ended March 31, 2019 (In thousands) Operating Lease Cost $ 1,243 Variable Lease Cost 218 Total lease cost (1) $ 1,461 (1) Income related to sub-lease activity is immaterial for the Company and not presented herein. The table below summarizes other information related to the Company's operating leases during the period presented: Three Months Ended March 31, 2019 (Dollars in thousands) Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows from operating leases $ 1,187 ROU assets obtained in exchange for lease liabilities $ 335 Weighted average remaining lease term of operating leases, in years 8.48 Weighted average discount rate of operating leases 3.33 % |
Lease payment obligations | The following table outlines lease payment obligations as outlined in the Company’s lease agreements for each of the next five years, as of March 31, 2019, and thereafter in addition to a reconcilement to the Company’s right of use liability at the date indicated: Year Ending December 31, (In thousands) 2019 $ 3,667 2020 4,581 2021 4,155 2022 3,730 2023 3,738 Thereafter 14,215 Total lease payments 34,086 Implied interest (4,542 ) Right of use liability $ 29,544 |
Estimated future minimum annual rental commitments | For comparative purposes as of December 31, 2018, the estimated future minimum annual rental commitments under noncancelable leases having an original or remaining term of more than one year as calculated prior to applying the modified retrospective method of ASU 2016-02 implementation are as follows: Year Ending December 31, (In thousands) 2019 4,766 2020 4,251 2021 2,477 2022 1,704 2023 1,568 Thereafter 1,788 16,554 |
Description of Business, Basi_3
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements - Description of Business (Details) | Mar. 31, 2019branch |
Heritage Bank | |
Business Description and Basis of Presentation [Line Items] | |
Number of branches operating | 63 |
Description of Business, Basi_4
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements - Recently Issued Accounting Pronouncements (Details) - USD ($) | Mar. 31, 2019 | Jan. 01, 2019 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Capitalization threshold policy, contractual lease payments (or less) | $ 25,000 | |
Right of use assets | 28,400,000 | |
Lease liabilities | $ 29,544,000 | |
Accounting Standards Update 2016-02 | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Right of use assets | $ 29,200,000 | |
Lease liabilities | $ 29,800,000 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Jul. 02, 2018 | Jan. 16, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 0 | $ 68,520 | ||
Puget Sound | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 68,500 | |||
Acquisition-related costs | 75 | 4,500 | ||
Premier Commercial | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 53,400 | |||
Acquisition-related costs | $ 57 | $ 317 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Values (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Investment Holdings [Line Items] | ||
Amortized Cost | $ 984,297 | $ 985,541 |
Gross Unrealized Gains | 7,352 | 3,285 |
Gross Unrealized Losses | (6,640) | (12,731) |
Fair Value | 985,009 | 976,095 |
U.S. Treasury and U.S. Government-sponsored agencies | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 98,900 | 101,595 |
Gross Unrealized Gains | 398 | 155 |
Gross Unrealized Losses | (44) | (147) |
Fair Value | 99,254 | 101,603 |
Municipal securities | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 144,399 | 158,461 |
Gross Unrealized Gains | 2,590 | 1,209 |
Gross Unrealized Losses | (127) | (806) |
Fair Value | 146,862 | 158,864 |
Residential | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 349,189 | 337,295 |
Gross Unrealized Gains | 1,224 | 426 |
Gross Unrealized Losses | (3,555) | (6,119) |
Fair Value | 346,858 | 331,602 |
Commercial | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 342,102 | 338,250 |
Gross Unrealized Gains | 2,417 | 1,035 |
Gross Unrealized Losses | (2,891) | (5,524) |
Fair Value | 341,628 | 333,761 |
Corporate obligations | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 25,684 | 25,662 |
Gross Unrealized Gains | 223 | 36 |
Gross Unrealized Losses | (20) | (135) |
Fair Value | 25,887 | 25,563 |
Other asset-backed securities | ||
Investment Holdings [Line Items] | ||
Amortized Cost | 24,023 | 24,278 |
Gross Unrealized Gains | 500 | 424 |
Gross Unrealized Losses | (3) | 0 |
Fair Value | $ 24,520 | $ 24,702 |
Investment Securities - Textual
Investment Securities - Textual (Details) | 3 Months Ended | ||
Mar. 31, 2019USD ($)loan | Mar. 31, 2018loan | Dec. 31, 2018USD ($) | |
Investments, Debt and Equity Securities [Abstract] | |||
Securities classified as trading | $ | $ 0 | $ 0 | |
Mortgage backed securities evaluation non temporary decline number (securities) | loan | 0 | 0 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less | $ 31,994 | |
Due after one year through five years | 207,244 | |
Due after five years through ten years | 274,601 | |
Due after ten years | 470,458 | |
Amortized Cost | 984,297 | $ 985,541 |
Fair Value | ||
Due in one year or less | 31,967 | |
Due after one year through five years | 207,852 | |
Due after five years through ten years | 275,127 | |
Due after ten years | 470,063 | |
Fair Value | $ 985,009 | $ 976,095 |
Investment Securities - Unreali
Investment Securities - Unrealized Losses (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value | ||
Less than 12 Months | $ 63,184 | $ 202,036 |
12 Months or Longer | 394,689 | 432,404 |
Total | 457,873 | 634,440 |
Unrealized Losses | ||
Less than 12 Months | (443) | (823) |
12 Months or Longer | (6,197) | (11,908) |
Total | (6,640) | (12,731) |
U.S. Treasury and U.S. Government-sponsored agencies | ||
Fair Value | ||
Less than 12 Months | 5,079 | 46,992 |
12 Months or Longer | 2,411 | 7,350 |
Total | 7,490 | 54,342 |
Unrealized Losses | ||
Less than 12 Months | (23) | (58) |
12 Months or Longer | (21) | (89) |
Total | (44) | (147) |
Municipal securities | ||
Fair Value | ||
Less than 12 Months | 827 | 31,157 |
12 Months or Longer | 31,990 | 38,792 |
Total | 32,817 | 69,949 |
Unrealized Losses | ||
Less than 12 Months | (4) | (159) |
12 Months or Longer | (123) | (647) |
Total | (127) | (806) |
Residential | ||
Fair Value | ||
Less than 12 Months | 27,725 | 66,620 |
12 Months or Longer | 184,166 | 193,726 |
Total | 211,891 | 260,346 |
Unrealized Losses | ||
Less than 12 Months | (170) | (247) |
12 Months or Longer | (3,385) | (5,872) |
Total | (3,555) | (6,119) |
Commercial | ||
Fair Value | ||
Less than 12 Months | 23,798 | 43,531 |
12 Months or Longer | 174,130 | 190,585 |
Total | 197,928 | 234,116 |
Unrealized Losses | ||
Less than 12 Months | (231) | (272) |
12 Months or Longer | (2,660) | (5,252) |
Total | (2,891) | (5,524) |
Corporate obligations | ||
Fair Value | ||
Less than 12 Months | 3,874 | 13,736 |
12 Months or Longer | 1,992 | 1,951 |
Total | 5,866 | 15,687 |
Unrealized Losses | ||
Less than 12 Months | (12) | (87) |
12 Months or Longer | (8) | (48) |
Total | (20) | $ (135) |
Other asset-backed securities | ||
Fair Value | ||
Less than 12 Months | 1,881 | |
12 Months or Longer | 0 | |
Total | 1,881 | |
Unrealized Losses | ||
Less than 12 Months | (3) | |
12 Months or Longer | 0 | |
Total | $ (3) |
Investment Securities - Realize
Investment Securities - Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||
Gross realized gains | $ 89 | $ 104 |
Gross realized losses | (74) | (69) |
Net realized gains | $ 15 | $ 35 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | $ 265,968 | $ 267,977 |
Fair Value | 265,465 | 264,675 |
Washington and Oregon state to secure public deposits | ||
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | 198,226 | 199,026 |
Fair Value | 198,044 | 196,786 |
Repurchase agreements | ||
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | 47,209 | 48,173 |
Fair Value | 46,872 | 47,407 |
Other securities pledged | ||
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | 20,533 | 20,778 |
Fair Value | $ 20,549 | $ 20,482 |
Loans Receivable - Loan Origina
Loans Receivable - Loan Origination/Risk Management (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019USD ($)segment | Dec. 31, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Number of loan segments | segment | 4 | |||
Gross loans receivable | $ 3,693,198 | $ 3,650,651 | ||
Net deferred loan costs | 3,233 | 3,509 | ||
Loans receivable, net | 3,696,431 | 3,654,160 | ||
Allowance for loan losses | (36,152) | (35,042) | $ (33,261) | $ (32,086) |
Total loans receivable, net | 3,660,279 | 3,619,118 | ||
Commercial Business | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 2,959,315 | 2,937,883 | ||
Allowance for loan losses | (24,836) | (23,711) | (22,572) | (21,999) |
Commercial Business | Commercial and Industrial | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 838,403 | 853,606 | ||
Allowance for loan losses | (11,755) | (11,343) | (9,943) | (9,910) |
Commercial Business | Owner-occupied Commercial Real Estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 785,316 | 779,814 | ||
Allowance for loan losses | (5,256) | (4,898) | (5,040) | (3,992) |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 1,335,596 | 1,304,463 | ||
Allowance for loan losses | (7,825) | (7,470) | (7,589) | (8,097) |
One-to-four Family Residential | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 106,502 | 101,763 | ||
Allowance for loan losses | (1,247) | (1,203) | (1,083) | (1,056) |
Real Estate Construction and Land Development | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 237,078 | 215,460 | ||
Allowance for loan losses | (2,417) | (2,194) | (2,056) | (2,052) |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 110,699 | 102,730 | ||
Allowance for loan losses | (1,422) | (1,240) | (941) | (862) |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 126,379 | 112,730 | ||
Allowance for loan losses | (995) | (954) | (1,115) | (1,190) |
Consumer | ||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||
Gross loans receivable | 390,303 | 395,545 | ||
Allowance for loan losses | $ (6,480) | $ (6,581) | $ (6,054) | $ (6,081) |
Loans Receivable - Concentratio
Loans Receivable - Concentrations of Credit (Details) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018Loan | |
Receivables [Abstract] | ||
Concentration of loans greater than 10% | 0 | 0 |
Percentage of concentrations of loans in any industry (in excess of 10%) (percent) | 10.00% | 10.00% |
Loans Receivable - Credit Quali
Loans Receivable - Credit Quality Indicators (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | $ 3,564,983 | $ 3,518,105 |
OAEM | 49,368 | 53,640 |
Substandard | 78,323 | 78,382 |
Doubtful/Loss | 524 | 524 |
Total | 3,693,198 | 3,650,651 |
Potential problem loans receivable | 94,100 | 101,300 |
Commercial Business | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 2,838,073 | 2,812,699 |
OAEM | 49,319 | 53,330 |
Substandard | 71,923 | 71,854 |
Doubtful/Loss | 0 | 0 |
Total | 2,959,315 | 2,937,883 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 780,469 | 788,395 |
OAEM | 11,594 | 16,168 |
Substandard | 46,340 | 49,043 |
Doubtful/Loss | 0 | 0 |
Total | 838,403 | 853,606 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 747,294 | 741,227 |
OAEM | 22,576 | 27,724 |
Substandard | 15,446 | 10,863 |
Doubtful/Loss | 0 | 0 |
Total | 785,316 | 779,814 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 1,310,310 | 1,283,077 |
OAEM | 15,149 | 9,438 |
Substandard | 10,137 | 11,948 |
Doubtful/Loss | 0 | 0 |
Total | 1,335,596 | 1,304,463 |
One-to-four Family Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 105,158 | 100,401 |
OAEM | 0 | 0 |
Substandard | 1,344 | 1,362 |
Doubtful/Loss | 0 | 0 |
Total | 106,502 | 101,763 |
Real Estate Construction and Land Development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 236,078 | 214,197 |
OAEM | 49 | 310 |
Substandard | 951 | 953 |
Doubtful/Loss | 0 | 0 |
Total | 237,078 | 215,460 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 109,748 | 101,519 |
OAEM | 0 | 258 |
Substandard | 951 | 953 |
Doubtful/Loss | 0 | 0 |
Total | 110,699 | 102,730 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 126,330 | 112,678 |
OAEM | 49 | 52 |
Substandard | 0 | 0 |
Doubtful/Loss | 0 | 0 |
Total | 126,379 | 112,730 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 385,674 | 390,808 |
OAEM | 0 | 0 |
Substandard | 4,105 | 4,213 |
Doubtful/Loss | 524 | 524 |
Total | $ 390,303 | $ 395,545 |
Loans Receivable - Nonaccrual L
Loans Receivable - Nonaccrual Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | $ 17,461 | $ 13,703 |
Commercial Business | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 16,304 | 12,564 |
Commercial Business | Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 9,394 | 6,639 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 4,465 | 4,212 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 2,445 | 1,713 |
One-to-four Family Residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 68 | 71 |
Real Estate Construction and Land Development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 923 | 899 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 923 | 899 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | $ 166 | $ 169 |
Loans Receivable - Past Due Loa
Loans Receivable - Past Due Loans (Details) - USD ($) | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 13,060,000 | $ 16,934,000 |
Current | 3,680,138,000 | 3,633,717,000 |
Total | 3,693,198,000 | 3,650,651,000 |
90 days or more and still accruing | 0 | 0 |
30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7,000,000 | 12,358,000 |
90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 6,060,000 | 4,576,000 |
Commercial Business | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 11,295,000 | 13,240,000 |
Current | 2,948,020,000 | 2,924,643,000 |
Total | 2,959,315,000 | 2,937,883,000 |
Commercial Business | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,510,000 | 8,898,000 |
Commercial Business | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,785,000 | 4,342,000 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 4,143,000 | 5,269,000 |
Current | 834,260,000 | 848,337,000 |
Total | 838,403,000 | 853,606,000 |
Commercial Business | Commercial and Industrial | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 550,000 | 2,988,000 |
Commercial Business | Commercial and Industrial | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,593,000 | 2,281,000 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 2,026,000 | 1,163,000 |
Current | 783,290,000 | 778,651,000 |
Total | 785,316,000 | 779,814,000 |
Commercial Business | Owner-occupied Commercial Real Estate | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,677,000 | 563,000 |
Commercial Business | Owner-occupied Commercial Real Estate | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 349,000 | 600,000 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,126,000 | 6,808,000 |
Current | 1,330,470,000 | 1,297,655,000 |
Total | 1,335,596,000 | 1,304,463,000 |
Commercial Business | Non-owner Occupied Commercial Real Estate | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,283,000 | 5,347,000 |
Commercial Business | Non-owner Occupied Commercial Real Estate | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,843,000 | 1,461,000 |
One-to-four Family Residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 38,000 | 227,000 |
Current | 106,464,000 | 101,536,000 |
Total | 106,502,000 | 101,763,000 |
One-to-four Family Residential | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 38,000 | 227,000 |
One-to-four Family Residential | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Real Estate Construction and Land Development | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 363,000 | 899,000 |
Current | 236,715,000 | 214,561,000 |
Total | 237,078,000 | 215,460,000 |
Real Estate Construction and Land Development | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 105,000 | 665,000 |
Real Estate Construction and Land Development | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 258,000 | 234,000 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 363,000 | 899,000 |
Current | 110,336,000 | 101,831,000 |
Total | 110,699,000 | 102,730,000 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 105,000 | 665,000 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 258,000 | 234,000 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 126,379,000 | 112,730,000 |
Total | 126,379,000 | 112,730,000 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Consumer | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,364,000 | 2,568,000 |
Current | 388,939,000 | 392,977,000 |
Total | 390,303,000 | 395,545,000 |
Consumer | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,347,000 | 2,568,000 |
Consumer | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 17,000 | $ 0 |
Loans Receivable - Impaired Loa
Loans Receivable - Impaired Loans (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | $ 11,340,000 | $ 7,590,000 | |
Recorded Investment With Specific Valuation Allowance | 26,107,000 | 28,849,000 | |
Total Recorded Investment | 37,447,000 | 36,439,000 | |
Unpaid Contractual Principal Balance | 39,450,000 | 39,233,000 | |
Related Specific Valuation Allowance | 4,580,000 | 4,170,000 | |
Average recorded investment on impaired loans | 36,943,000 | $ 39,687,000 | |
Nonaccrual | |||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized on impaired loans | 0 | 0 | |
Restructured Performing | |||
Financing Receivable, Impaired [Line Items] | |||
Interest income recognized on impaired loans | 301,000 | 326,000 | |
Commercial Business | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 10,417,000 | 6,691,000 | |
Recorded Investment With Specific Valuation Allowance | 25,235,000 | 28,043,000 | |
Total Recorded Investment | 35,652,000 | 34,734,000 | |
Unpaid Contractual Principal Balance | 37,534,000 | 36,740,000 | |
Related Specific Valuation Allowance | 4,355,000 | 3,955,000 | |
Average recorded investment on impaired loans | 35,193,000 | 37,460,000 | |
Commercial Business | Commercial and Industrial | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 4,791,000 | 2,523,000 | |
Recorded Investment With Specific Valuation Allowance | 17,844,000 | 20,119,000 | |
Total Recorded Investment | 22,635,000 | 22,642,000 | |
Unpaid Contractual Principal Balance | 24,051,000 | 24,176,000 | |
Related Specific Valuation Allowance | 2,780,000 | 2,607,000 | |
Average recorded investment on impaired loans | 22,639,000 | 14,261,000 | |
Commercial Business | Owner-occupied Commercial Real Estate | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 463,000 | 816,000 | |
Recorded Investment With Specific Valuation Allowance | 5,591,000 | 5,000,000 | |
Total Recorded Investment | 6,054,000 | 5,816,000 | |
Unpaid Contractual Principal Balance | 6,451,000 | 6,150,000 | |
Related Specific Valuation Allowance | 1,347,000 | 1,142,000 | |
Average recorded investment on impaired loans | 5,935,000 | 12,841,000 | |
Commercial Business | Non-owner Occupied Commercial Real Estate | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 5,163,000 | 3,352,000 | |
Recorded Investment With Specific Valuation Allowance | 1,800,000 | 2,924,000 | |
Total Recorded Investment | 6,963,000 | 6,276,000 | |
Unpaid Contractual Principal Balance | 7,032,000 | 6,414,000 | |
Related Specific Valuation Allowance | 228,000 | 206,000 | |
Average recorded investment on impaired loans | 6,619,000 | 10,358,000 | |
One-to-four Family Residential | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 0 | 0 | |
Recorded Investment With Specific Valuation Allowance | 274,000 | 279,000 | |
Total Recorded Investment | 274,000 | 279,000 | |
Unpaid Contractual Principal Balance | 289,000 | 293,000 | |
Related Specific Valuation Allowance | 74,000 | 76,000 | |
Average recorded investment on impaired loans | 277,000 | 297,000 | |
Real Estate Construction and Land Development | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 923,000 | 899,000 | |
Recorded Investment With Specific Valuation Allowance | 0 | 0 | |
Total Recorded Investment | 923,000 | 899,000 | |
Unpaid Contractual Principal Balance | 1,020,000 | 1,662,000 | |
Related Specific Valuation Allowance | 0 | 0 | |
Average recorded investment on impaired loans | 911,000 | 1,519,000 | |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 923,000 | 899,000 | |
Recorded Investment With Specific Valuation Allowance | 0 | 0 | |
Total Recorded Investment | 923,000 | 899,000 | |
Unpaid Contractual Principal Balance | 1,020,000 | 1,662,000 | |
Related Specific Valuation Allowance | 0 | 0 | |
Average recorded investment on impaired loans | 911,000 | 1,197,000 | |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | |||
Financing Receivable, Impaired [Line Items] | |||
Average recorded investment on impaired loans | 0 | 322,000 | |
Consumer | |||
Financing Receivable, Impaired [Line Items] | |||
Recorded Investment With No Specific Valuation Allowance | 0 | 0 | |
Recorded Investment With Specific Valuation Allowance | 598,000 | 527,000 | |
Total Recorded Investment | 598,000 | 527,000 | |
Unpaid Contractual Principal Balance | 607,000 | 538,000 | |
Related Specific Valuation Allowance | 151,000 | $ 139,000 | |
Average recorded investment on impaired loans | $ 562,000 | $ 411,000 |
Loans Receivable - TDR Loans, R
Loans Receivable - TDR Loans, Recorded Investment and Allowance (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Performing TDRs, TDR loans | $ 19,986 | $ 22,736 |
Nonaccrual TDRs, TDR loans | 5,488 | 6,943 |
Performing TDRs, Allowance for loan losses on TDR loans | 2,181 | 2,257 |
Nonaccrual TDRs, Allowance for loan losses on TDR loans | 601 | 658 |
Unfunded commitments related to credits classified as TDRs | $ 1,400 | $ 943 |
Loans Receivable - Modified TDR
Loans Receivable - Modified TDRs (Details) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019USD ($)contract | Mar. 31, 2018USD ($)contract | Dec. 31, 2018USD ($) | |
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 11 | ||
Related specific valuation allowance | $ 4,580 | $ 4,170 | |
Commercial Business | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | 4,355 | 3,955 | |
Commercial Business | Commercial and Industrial | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | 2,780 | 2,607 | |
Commercial Business | Owner-occupied Commercial Real Estate | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | 1,347 | 1,142 | |
Commercial Business | Non-owner Occupied Commercial Real Estate | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | 228 | 206 | |
Real Estate Construction and Land Development | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | 0 | 0 | |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | 0 | 0 | |
Consumer | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | $ 151 | $ 139 | |
Troubled Debt Restructured Loans | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 20 | 13 | |
Outstanding Principal Balance | $ 13,933 | $ 6,602 | |
Number of contracts modified | contract | 3 | 4 | |
Troubled Debt Restructured Loans | Finance Receivable Modified Subsequent Default | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | $ 314 | ||
Troubled Debt Restructured Loans | Modified During the Quarter | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Related specific valuation allowance | $ 1,600 | ||
Troubled Debt Restructured Loans | Commercial Business | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 12 | 10 | |
Outstanding Principal Balance | $ 13,146 | $ 6,524 | |
Number of contracts modified | contract | 3 | 2 | |
Troubled Debt Restructured Loans | Commercial Business | Commercial and Industrial | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 9 | 9 | |
Outstanding Principal Balance | $ 10,100 | $ 4,323 | |
Number of contracts modified | contract | 1 | 1 | |
Troubled Debt Restructured Loans | Commercial Business | Commercial and Industrial | Past Modified Maturity Date | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of contracts modified | contract | 3 | 4 | |
Troubled Debt Restructured Loans | Commercial Business | Owner-occupied Commercial Real Estate | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 2 | 0 | |
Outstanding Principal Balance | $ 934 | $ 0 | |
Number of contracts modified | contract | 1 | 0 | |
Troubled Debt Restructured Loans | Commercial Business | Non-owner Occupied Commercial Real Estate | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 1 | 1 | |
Outstanding Principal Balance | $ 2,112 | $ 2,201 | |
Number of contracts modified | contract | 1 | 1 | |
Troubled Debt Restructured Loans | Real Estate Construction and Land Development | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 2 | 0 | |
Outstanding Principal Balance | $ 665 | $ 0 | |
Number of contracts modified | contract | 0 | 2 | |
Troubled Debt Restructured Loans | Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 2 | 0 | |
Outstanding Principal Balance | $ 665 | $ 0 | |
Number of contracts modified | contract | 0 | 2 | |
Troubled Debt Restructured Loans | Consumer | |||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||
Number of Contracts | contract | 6 | 3 | |
Outstanding Principal Balance | $ 122 | $ 78 |
Loans Receivable - TDRs Subsequ
Loans Receivable - TDRs Subsequently Defaulted (Details) - Troubled Debt Restructured Loans $ in Thousands | 3 Months Ended | |
Mar. 31, 2019USD ($)contract | Mar. 31, 2018USD ($)contract | |
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 3 | 4 |
Recorded Investments | $ | $ 2,147 | $ 1,196 |
Commercial Business | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 3 | 2 |
Recorded Investments | $ | $ 2,147 | $ 358 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 1 | 1 |
Recorded Investments | $ | $ 829 | $ 283 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 1 | 0 |
Recorded Investments | $ | $ 717 | $ 0 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 1 | 1 |
Recorded Investments | $ | $ 601 | $ 75 |
Commercial Business | Past Modified Maturity Date | Commercial and Industrial | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 3 | 4 |
Real Estate Construction and Land Development | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 0 | 2 |
Recorded Investments | $ | $ 0 | $ 838 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Financing Receivable, Modifications [Line Items] | ||
Number of Contracts | 0 | 2 |
Recorded Investments | $ | $ 0 | $ 838 |
Loans Receivable - Purchased Cr
Loans Receivable - Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | $ 26,422 | $ 28,461 |
Recorded Investment | 23,173 | 24,907 |
Commercial Business | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 21,704 | 22,834 |
Recorded Investment | 16,847 | 17,707 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 5,521 | 6,319 |
Recorded Investment | 2,713 | 3,433 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 7,938 | 7,830 |
Recorded Investment | 7,483 | 7,215 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 8,245 | 8,685 |
Recorded Investment | 6,651 | 7,059 |
One-to-four Family Residential | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 3,097 | 3,169 |
Recorded Investment | 3,251 | 3,315 |
Real Estate Construction and Land Development | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 212 | 255 |
Recorded Investment | 395 | 423 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 27 | 67 |
Recorded Investment | 354 | 380 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 185 | 188 |
Recorded Investment | 41 | 43 |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 1,409 | 2,203 |
Recorded Investment | $ 2,680 | $ 3,462 |
Loans Receivable - Change in Ac
Loans Receivable - Change in Accretable Yield (Details) - PCI Loans - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Certain Loans Acquired in Transfer Not Accounted for as Debt Securities, Accretable Yield Movement Schedule [Roll Forward] | ||
Balance at the beginning of the period | $ 9,493 | $ 11,224 |
Accretion | (581) | (781) |
Disposal and other | (452) | (1,698) |
Reclassification from nonaccretable difference | 0 | 2,524 |
Balance at the end of the period | $ 8,460 | $ 11,269 |
Allowance for Loan Losses - Sum
Allowance for Loan Losses - Summary of Changes in Loan Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | $ 35,042 | $ 32,086 |
Charge-offs | (704) | (566) |
Recoveries | 894 | 589 |
Provision for Loan Losses | 920 | 1,152 |
Balance at End of Period | 36,152 | 33,261 |
Commercial Business | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 23,711 | 21,999 |
Charge-offs | (103) | (81) |
Recoveries | 159 | 501 |
Provision for Loan Losses | 1,069 | 153 |
Balance at End of Period | 24,836 | 22,572 |
Commercial Business | Commercial and Industrial | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 11,343 | 9,910 |
Charge-offs | (103) | (81) |
Recoveries | 7 | 499 |
Provision for Loan Losses | 508 | (385) |
Balance at End of Period | 11,755 | 9,943 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 4,898 | 3,992 |
Charge-offs | 0 | 0 |
Recoveries | 3 | 2 |
Provision for Loan Losses | 355 | 1,046 |
Balance at End of Period | 5,256 | 5,040 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 7,470 | 8,097 |
Charge-offs | 0 | 0 |
Recoveries | 149 | 0 |
Provision for Loan Losses | 206 | (508) |
Balance at End of Period | 7,825 | 7,589 |
One-to-four Family Residential | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 1,203 | 1,056 |
Charge-offs | (15) | 0 |
Recoveries | 0 | 0 |
Provision for Loan Losses | 59 | 27 |
Balance at End of Period | 1,247 | 1,083 |
Real Estate Construction and Land Development | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 2,194 | 2,052 |
Charge-offs | 0 | 0 |
Recoveries | 618 | 0 |
Provision for Loan Losses | (395) | 4 |
Balance at End of Period | 2,417 | 2,056 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 1,240 | 862 |
Charge-offs | 0 | 0 |
Recoveries | 618 | 0 |
Provision for Loan Losses | (436) | 79 |
Balance at End of Period | 1,422 | 941 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 954 | 1,190 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for Loan Losses | 41 | (75) |
Balance at End of Period | 995 | 1,115 |
Consumer | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 6,581 | 6,081 |
Charge-offs | (586) | (485) |
Recoveries | 117 | 88 |
Provision for Loan Losses | 368 | 370 |
Balance at End of Period | 6,480 | 6,054 |
Unallocated | ||
Schedule of changes in allowance for loan losses | ||
Balance at Beginning of Period | 1,353 | 898 |
Charge-offs | 0 | 0 |
Recoveries | 0 | 0 |
Provision for Loan Losses | (181) | 598 |
Balance at End of Period | $ 1,172 | $ 1,496 |
Allowance for Loan Losses - Act
Allowance for Loan Losses - Activity in Allowance for Losses Disaggregated on Basis of Impairment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | $ 4,580 | $ 4,170 | ||
Loans Collectively Evaluated for Impairment | 28,774 | 27,854 | ||
PCI Loans | 2,798 | 3,018 | ||
Total Allowance for Loan Losses | 36,152 | 35,042 | $ 33,261 | $ 32,086 |
Commercial Business | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 4,355 | 3,955 | ||
Loans Collectively Evaluated for Impairment | 18,506 | 17,606 | ||
PCI Loans | 1,975 | 2,150 | ||
Total Allowance for Loan Losses | 24,836 | 23,711 | 22,572 | 21,999 |
Commercial Business | Commercial and Industrial | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 2,780 | 2,607 | ||
Loans Collectively Evaluated for Impairment | 8,227 | 7,913 | ||
PCI Loans | 748 | 823 | ||
Total Allowance for Loan Losses | 11,755 | 11,343 | 9,943 | 9,910 |
Commercial Business | Owner-occupied Commercial Real Estate | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 1,347 | 1,142 | ||
Loans Collectively Evaluated for Impairment | 3,266 | 3,063 | ||
PCI Loans | 643 | 693 | ||
Total Allowance for Loan Losses | 5,256 | 4,898 | 5,040 | 3,992 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 228 | 206 | ||
Loans Collectively Evaluated for Impairment | 7,013 | 6,630 | ||
PCI Loans | 584 | 634 | ||
Total Allowance for Loan Losses | 7,825 | 7,470 | 7,589 | 8,097 |
One-to-four Family Residential | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 74 | 76 | ||
Loans Collectively Evaluated for Impairment | 1,061 | 1,015 | ||
PCI Loans | 112 | 112 | ||
Total Allowance for Loan Losses | 1,247 | 1,203 | 1,083 | 1,056 |
Real Estate Construction and Land Development | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 0 | 0 | ||
Loans Collectively Evaluated for Impairment | 2,138 | 1,915 | ||
PCI Loans | 279 | 279 | ||
Total Allowance for Loan Losses | 2,417 | 2,194 | 2,056 | 2,052 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 0 | 0 | ||
Loans Collectively Evaluated for Impairment | 1,222 | 1,040 | ||
PCI Loans | 200 | 200 | ||
Total Allowance for Loan Losses | 1,422 | 1,240 | 941 | 862 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 0 | 0 | ||
Loans Collectively Evaluated for Impairment | 916 | 875 | ||
PCI Loans | 79 | 79 | ||
Total Allowance for Loan Losses | 995 | 954 | 1,115 | 1,190 |
Consumer | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 151 | 139 | ||
Loans Collectively Evaluated for Impairment | 5,897 | 5,965 | ||
PCI Loans | 432 | 477 | ||
Total Allowance for Loan Losses | 6,480 | 6,581 | 6,054 | 6,081 |
Unallocated | ||||
Schedule of allowance for loan losses on the basis of impairment method | ||||
Loans Individually Evaluated for Impairment | 0 | 0 | ||
Loans Collectively Evaluated for Impairment | 1,172 | 1,353 | ||
PCI Loans | 0 | 0 | ||
Total Allowance for Loan Losses | $ 1,172 | $ 1,353 | $ 1,496 | $ 898 |
Allowance for Loan Losses - Rec
Allowance for Loan Losses - Recorded Investment Disaggregated on Basis of Impairment (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | $ 37,447 | $ 36,439 |
Loans Collectively Evaluated for Impairment | 3,632,578 | 3,589,305 |
PCI Loans | 23,173 | 24,907 |
Total Gross Loans Receivable | 3,693,198 | 3,650,651 |
Commercial Business | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 35,652 | 34,734 |
Loans Collectively Evaluated for Impairment | 2,906,816 | 2,885,442 |
PCI Loans | 16,847 | 17,707 |
Total Gross Loans Receivable | 2,959,315 | 2,937,883 |
Commercial Business | Commercial and Industrial | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 22,635 | 22,642 |
Loans Collectively Evaluated for Impairment | 813,055 | 827,531 |
PCI Loans | 2,713 | 3,433 |
Total Gross Loans Receivable | 838,403 | 853,606 |
Commercial Business | Owner-occupied Commercial Real Estate | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 6,054 | 5,816 |
Loans Collectively Evaluated for Impairment | 771,779 | 766,783 |
PCI Loans | 7,483 | 7,215 |
Total Gross Loans Receivable | 785,316 | 779,814 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 6,963 | 6,276 |
Loans Collectively Evaluated for Impairment | 1,321,982 | 1,291,128 |
PCI Loans | 6,651 | 7,059 |
Total Gross Loans Receivable | 1,335,596 | 1,304,463 |
One-to-four Family Residential | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 274 | 279 |
Loans Collectively Evaluated for Impairment | 102,977 | 98,169 |
PCI Loans | 3,251 | 3,315 |
Total Gross Loans Receivable | 106,502 | 101,763 |
Real Estate Construction and Land Development | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 923 | 899 |
Loans Collectively Evaluated for Impairment | 235,760 | 214,138 |
PCI Loans | 395 | 423 |
Total Gross Loans Receivable | 237,078 | 215,460 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 923 | 899 |
Loans Collectively Evaluated for Impairment | 109,422 | 101,451 |
PCI Loans | 354 | 380 |
Total Gross Loans Receivable | 110,699 | 102,730 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 0 | 0 |
Loans Collectively Evaluated for Impairment | 126,338 | 112,687 |
PCI Loans | 41 | 43 |
Total Gross Loans Receivable | 126,379 | 112,730 |
Consumer | ||
Schedule of loan receivables on the basis of impairment method | ||
Loans Individually Evaluated for Impairment | 598 | 527 |
Loans Collectively Evaluated for Impairment | 387,025 | 391,556 |
PCI Loans | 2,680 | 3,462 |
Total Gross Loans Receivable | $ 390,303 | $ 395,545 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Real Estate [Abstract] | |
Other real estate owned resulting from foreclosure and repossession of assets | $ 434,000 |
Mortgage loans in process of foreclosure | 0 |
Changes in other real estate owned | |
Balance at the beginning of the period | 1,983,000 |
Additions | 0 |
Additions from acquisitions | 0 |
Proceeds from dispositions | (79,000) |
Gain on sales, net | 0 |
Balance at the end of the period | $ 1,904,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Change in Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Goodwill [Roll Forward] | ||
Balance at the beginning of the period | $ 240,939 | $ 119,029 |
Additions as a result of acquisitions | 0 | 68,520 |
Balance at the end of the period | $ 240,939 | $ 187,549 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other Intangible Assets, Textual (Details) - Core Deposits | 3 Months Ended |
Mar. 31, 2019 | |
Premier Commercial Bancorp | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Puget Sound Bancorp | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Washington Banking Company | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Valley Community Bancshares | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 10 years |
Northwest Commercial Bank | |
Finite-Lived Intangible Assets [Line Items] | |
Useful life | 5 years |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets - Change in Other Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Finite-lived Intangible Assets [Roll Forward] | ||
Balance at the beginning of the period | $ 20,614 | $ 6,088 |
Additions as a result of acquisitions | 0 | 11,270 |
Amortization | (1,025) | (795) |
Balance at the end of the period | $ 19,589 | $ 16,563 |
Junior Subordinated Debenture_2
Junior Subordinated Debentures (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | May 01, 2014 | |
Debt Instrument [Line Items] | ||||
Junior subordinated debentures | $ 20,375 | $ 20,302 | ||
Adjustable rate of trust preferred securities | 4.16% | |||
Junior Subordinated Debentures | ||||
Debt Instrument [Line Items] | ||||
Weighted average rate | 7.06% | 5.73% | ||
Washington Banking | ||||
Debt Instrument [Line Items] | ||||
Assumed trust preferred securities and junior subordinated debentures, fair value | $ 18,900 |
Repurchase Agreements (Details)
Repurchase Agreements (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Disclosure of Repurchase Agreements [Abstract] | ||
Repurchase agreements, maturity period | 1 day | |
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | $ 24,923 | $ 31,487 |
U.S. Treasury and U.S. Government-sponsored agencies | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | 4,914 | 4,878 |
Residential | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | 9,646 | 9,335 |
Commercial | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | $ 10,363 | $ 17,274 |
Other Borrowings - Textual (Det
Other Borrowings - Textual (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Federal Home Loan Bank, Advances [Line Items] | ||
Credit facility with the FHLB | $ 889,800,000 | |
FHLB advances outstanding | 25,000,000 | $ 0 |
Maximum federal funds purchases | 90,000,000 | |
Federal funds purchased | 0 | 0 |
Federal Reserve Bank Advances | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Credit facility with the Federal Reserve Bank of San Francisco | 38,400,000 | |
Borrowings outstanding | $ 0 | $ 0 |
Minimum | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Unencumbered collateral in amount equal to varying percentages | 100.00% | |
Maximum | ||
Federal Home Loan Bank, Advances [Line Items] | ||
Unencumbered collateral in amount equal to varying percentages | 160.00% |
Other Borrowings - Federal Fund
Other Borrowings - Federal Funds Purchased (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Debt Disclosure [Abstract] | ||
Average balance during the period | $ 1,849 | $ 35,733 |
Maximum month-end balance during the period | $ 25,000 | $ 37,200 |
Weighted average rate during the period | 3.29% | 1.70% |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Customers | ||
Derivative Asset | ||
Estimated Fair Value | $ 1,865 | |
Derivative Liability | ||
Estimated Fair Value | $ (1,643) | |
Third Parties | ||
Derivative Asset | ||
Estimated Fair Value | 1,643 | |
Derivative Liability | ||
Estimated Fair Value | (1,865) | |
Prepaid and other assets | ||
Derivative Asset | ||
Estimated Fair Value | 5,285 | 5,095 |
Accrued expenses and other liabilities | ||
Derivative Liability | ||
Estimated Fair Value | (5,285) | (5,095) |
Interest rate swaps | Non-hedging interest rate derivatives | ||
Derivative Asset | ||
Notional Amounts | 170,714 | 171,798 |
Derivative Liability | ||
Notional Amounts | $ 170,714 | $ 171,798 |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Weighted Average Shares (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Net income: | ||
Net income | $ 16,552 | $ 9,087 |
Dividends and undistributed earnings allocated to participating securities | (52) | (51) |
Net income allocated to common shareholders | $ 16,500 | $ 9,036 |
Basic: | ||
Weighted average common shares outstanding (in shares) | 36,881,499 | 33,332,645 |
Less: Restricted stock awards (in shares) | (55,967) | (127,099) |
Total basic weighted average common shares outstanding (in shares) | 36,825,532 | 33,205,546 |
Diluted: | ||
Basic weighted average common shares outstanding (in shares) | 36,825,532 | 33,205,546 |
Effect of potentially dilutive common shares (in shares) | 185,108 | 142,556 |
Total diluted weighted average common shares outstanding (in shares) | 37,010,640 | 33,348,102 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends (Details) - $ / shares | Jan. 23, 2019 | Oct. 24, 2018 | Jul. 24, 2018 | Apr. 25, 2018 | Jan. 24, 2018 | Mar. 31, 2019 | Mar. 31, 2018 |
Dividends Payable [Line Items] | |||||||
Declared | Jan. 23, 2019 | Oct. 24, 2018 | Jul. 24, 2018 | Apr. 25, 2018 | Jan. 24, 2018 | ||
Cash Dividend per Share (in usd per share) | $ 0.18 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.18 | $ 0.15 |
Record Date | Feb. 7, 2019 | Nov. 7, 2018 | Aug. 9, 2018 | May 10, 2018 | Feb. 7, 2018 | ||
Paid Date | Feb. 21, 2019 | Nov. 21, 2018 | Aug. 23, 2018 | May 24, 2018 | Feb. 21, 2018 | ||
Special Dividend | |||||||
Dividends Payable [Line Items] | |||||||
Declared | Oct. 24, 2018 | ||||||
Cash Dividend per Share (in usd per share) | $ 0.10 | ||||||
Record Date | Nov. 7, 2018 | ||||||
Paid Date | Nov. 21, 2018 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Program (Details) - Eleventh Plan - $ / shares | Oct. 23, 2014 | Mar. 31, 2019 | Mar. 31, 2018 | Mar. 31, 2019 |
Stockholders Equity (Textual) [Abstract] | ||||
Outstanding share percent | 5.00% | |||
Outstanding common shares in the plan (in shares) | 1,513,000 | |||
Number of shares repurchased (in shares) | 0 | 0 | 579,996 | |
Withholding taxes average price per share (in usd per share) | $ 16.67 |
Stockholders' Equity - Shares R
Stockholders' Equity - Shares Repurchased (Details) - $ / shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Equity, Class of Treasury Stock [Line Items] | ||
Number of shares repurchased related to withholding taxes due on accelerated vesting of RSUs (in shares) | 26,741 | |
Average share price (in usd per share) | $ 31.80 | |
Shares Related to Withholding Taxes on the Vesting of Restricted Stock | ||
Equity, Class of Treasury Stock [Line Items] | ||
Repurchased shares to pay withholding taxes (in shares) | 25,854 | 45,426 |
Stock repurchase to pay withholding taxes average share price (in usd per share) | $ 31.01 | $ 31.66 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) | 3 Months Ended | |||
Mar. 31, 2019 | Mar. 31, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | |
Increase (Decrease) in Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||
Beginning balance | $ 760,723,000 | $ 508,305,000 | ||
Other comprehensive income (loss) | 8,016,000 | (7,543,000) | ||
Effects of implementation of accounting change related to operating leases | 399,000 | $ (399,000) | $ 0 | |
Ending balance | 778,191,000 | 634,708,000 | ||
Accumulated other comprehensive income (loss), net | ||||
Increase (Decrease) in Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||
Beginning balance | (7,455,000) | (1,298,000) | ||
Other comprehensive (loss) income before reclassification | 8,028,000 | (7,516,000) | ||
Amounts reclassified from AOCI for gain on sale of investment securities available for sale included in net income | (12,000) | (27,000) | ||
Other comprehensive income (loss) | 8,016,000 | (7,543,000) | ||
Effects of implementation of accounting change related to operating leases | 0 | (93,000) | $ (93,000) | |
Ending balance | $ 561,000 | $ (8,934,000) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement on Recurring Basis (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | $ 985,009 | $ 976,095 |
U.S. Treasury and U.S. Government-sponsored agencies | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 99,254 | 101,603 |
Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 146,862 | 158,864 |
Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 346,858 | 331,602 |
Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 341,628 | 333,761 |
Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 25,887 | 25,563 |
Other asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 24,520 | 24,702 |
Recurring | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 985,009 | 976,095 |
Derivative assets - interest rate swaps | 5,285 | 5,095 |
Derivative liabilities - interest rate swaps | 5,285 | 5,095 |
Recurring | U.S. Treasury and U.S. Government-sponsored agencies | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 99,254 | 101,603 |
Recurring | Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 146,862 | 158,864 |
Recurring | Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 346,858 | 331,602 |
Recurring | Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 341,628 | 333,761 |
Recurring | Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 25,887 | 25,563 |
Recurring | Other asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 24,520 | 24,702 |
Recurring | Equity security | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 135 | 114 |
Recurring | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 16,001 | 15,936 |
Derivative assets - interest rate swaps | 0 | 0 |
Derivative liabilities - interest rate swaps | 0 | 0 |
Recurring | Level 1 | U.S. Treasury and U.S. Government-sponsored agencies | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 16,001 | 15,936 |
Recurring | Level 1 | Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 1 | Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 1 | Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 1 | Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 1 | Other asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 1 | Equity security | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 135 | 114 |
Recurring | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 969,008 | 960,159 |
Derivative assets - interest rate swaps | 5,285 | 5,095 |
Derivative liabilities - interest rate swaps | 5,285 | 5,095 |
Recurring | Level 2 | U.S. Treasury and U.S. Government-sponsored agencies | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 83,253 | 85,667 |
Recurring | Level 2 | Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 146,862 | 158,864 |
Recurring | Level 2 | Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 346,858 | 331,602 |
Recurring | Level 2 | Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 341,628 | 333,761 |
Recurring | Level 2 | Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 25,887 | 25,563 |
Recurring | Level 2 | Other asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 24,520 | 24,702 |
Recurring | Level 2 | Equity security | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Derivative assets - interest rate swaps | 0 | 0 |
Derivative liabilities - interest rate swaps | 0 | 0 |
Recurring | Level 3 | U.S. Treasury and U.S. Government-sponsored agencies | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | Other asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Recurring | Level 3 | Equity security | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | $ 0 | $ 0 |
Fair Value Measurements - Textu
Fair Value Measurements - Textual (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Fair Value Disclosures [Abstract] | ||
Fair value assets transfers between level 1 and level 2 transfer amount | $ 0 | $ 0 |
Fair Value Measurements - Fai_2
Fair Value Measurements - Fair Value Measurement on Nonrecurring Basis (Details) - Nonrecurring - Impaired Loans - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Fair value measurements of assets on a nonrecurring basis | |||
Basis | $ 118 | $ 1,504 | |
Fair Value | 105 | 1,216 | |
Net Losses (Gains) Recorded in Earnings | (39) | $ 0 | |
Level 1 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Level 2 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Level 3 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 105 | 1,216 | |
Non-owner Occupied Commercial Real Estate | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 1,102 | ||
Net Losses (Gains) Recorded in Earnings | 0 | ||
Non-owner Occupied Commercial Real Estate | Level 1 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | ||
Non-owner Occupied Commercial Real Estate | Level 2 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | ||
Non-owner Occupied Commercial Real Estate | Level 3 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 1,102 | ||
Commercial Business | |||
Fair value measurements of assets on a nonrecurring basis | |||
Basis | 109 | 1,495 | |
Fair Value | 98 | 1,209 | |
Net Losses (Gains) Recorded in Earnings | (39) | 0 | |
Commercial Business | Level 1 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Commercial Business | Level 2 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Commercial Business | Level 3 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 98 | 1,209 | |
Commercial Business | Commercial and Industrial | |||
Fair value measurements of assets on a nonrecurring basis | |||
Basis | 109 | 117 | |
Fair Value | 98 | 107 | |
Net Losses (Gains) Recorded in Earnings | (39) | 0 | |
Commercial Business | Commercial and Industrial | Level 1 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Commercial Business | Commercial and Industrial | Level 2 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Commercial Business | Commercial and Industrial | Level 3 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 98 | 107 | |
Commercial Business | Non-owner Occupied Commercial Real Estate | |||
Fair value measurements of assets on a nonrecurring basis | |||
Basis | 1,378 | ||
Consumer | |||
Fair value measurements of assets on a nonrecurring basis | |||
Basis | 9 | 9 | |
Fair Value | 7 | 7 | |
Net Losses (Gains) Recorded in Earnings | 0 | $ 0 | |
Consumer | Level 1 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Consumer | Level 2 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | 0 | 0 | |
Consumer | Level 3 | |||
Fair value measurements of assets on a nonrecurring basis | |||
Fair Value | $ 7 | $ 7 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information, Level 3 (Details) - Nonrecurring - Impaired Loans $ in Thousands | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans | $ 105 | $ 1,216 |
Level 3 | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans | $ 105 | $ 1,216 |
Level 3 | Minimum | Comparability Adjustment | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Range of Inputs | 0 | 0.104 |
Level 3 | Maximum | Comparability Adjustment | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Range of Inputs | 0 | (0.373) |
Level 3 | Weighted Average | Comparability Adjustment | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Range of Inputs | 0 | (0.109) |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Level 1 | ||
Financial Liabilities: | ||
Federal Home Loan Bank advances | $ 0 | |
Level 2 | ||
Financial Liabilities: | ||
Junior subordinated debentures | 0 | |
Level 3 | ||
Financial Liabilities: | ||
Federal Home Loan Bank advances | 0 | |
Carrying Value | ||
Financial Assets: | ||
Cash and cash equivalents | $ 111,170 | 161,910 |
Investment securities available for sale | 985,009 | 976,095 |
Loans held for sale | 2,956 | 1,555 |
Total loans receivable, net | 3,660,279 | 3,619,118 |
Accrued interest receivable | 15,621 | 15,403 |
Derivative assets - interest rate swaps | 5,285 | 5,095 |
Equity security | 135 | 114 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 3,872,589 | 3,965,510 |
Certificate of deposit accounts | 521,126 | 466,892 |
Federal Home Loan Bank advances | 0 | |
Securities sold under agreement to repurchase | 24,923 | 31,487 |
Junior subordinated debentures | 20,375 | 20,302 |
Accrued interest payable | 409 | 191 |
Derivative liabilities - interest rate swaps | 5,285 | 5,095 |
Fair Value | ||
Financial Assets: | ||
Cash and cash equivalents | 111,170 | 161,910 |
Investment securities available for sale | 985,009 | 976,095 |
Loans held for sale | 3,042 | 1,605 |
Total loans receivable, net | 3,668,110 | 3,617,857 |
Accrued interest receivable | 15,621 | 15,403 |
Derivative assets - interest rate swaps | 5,285 | 5,095 |
Equity security | 135 | 114 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 3,872,589 | 3,965,510 |
Certificate of deposit accounts | 525,045 | 470,222 |
Federal Home Loan Bank advances | 0 | |
Securities sold under agreement to repurchase | 24,923 | 31,487 |
Junior subordinated debentures | 20,250 | 20,500 |
Accrued interest payable | 409 | 191 |
Derivative liabilities - interest rate swaps | 5,285 | 5,095 |
Fair Value | Level 1 | ||
Financial Assets: | ||
Cash and cash equivalents | 111,170 | 161,910 |
Investment securities available for sale | 16,001 | 15,936 |
Loans held for sale | 0 | 0 |
Total loans receivable, net | 0 | 0 |
Accrued interest receivable | 93 | 68 |
Derivative assets - interest rate swaps | 0 | 0 |
Equity security | 135 | 114 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 3,872,589 | 3,965,510 |
Certificate of deposit accounts | 0 | 0 |
Securities sold under agreement to repurchase | 24,923 | 31,487 |
Junior subordinated debentures | 0 | 0 |
Accrued interest payable | 91 | 63 |
Derivative liabilities - interest rate swaps | 0 | 0 |
Fair Value | Level 2 | ||
Financial Assets: | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available for sale | 969,008 | 960,159 |
Loans held for sale | 3,042 | 1,605 |
Total loans receivable, net | 0 | 0 |
Accrued interest receivable | 3,971 | 4,091 |
Derivative assets - interest rate swaps | 5,285 | 5,095 |
Equity security | 0 | 0 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 0 | 0 |
Certificate of deposit accounts | 525,045 | 470,222 |
Federal Home Loan Bank advances | 0 | |
Securities sold under agreement to repurchase | 0 | 0 |
Junior subordinated debentures | 0 | |
Accrued interest payable | 267 | 81 |
Derivative liabilities - interest rate swaps | 5,285 | 5,095 |
Fair Value | Level 3 | ||
Financial Assets: | ||
Cash and cash equivalents | 0 | 0 |
Investment securities available for sale | 0 | 0 |
Loans held for sale | 0 | 0 |
Total loans receivable, net | 3,668,110 | 3,617,857 |
Accrued interest receivable | 11,557 | 11,244 |
Derivative assets - interest rate swaps | 0 | 0 |
Equity security | 0 | 0 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 0 | 0 |
Certificate of deposit accounts | 0 | 0 |
Securities sold under agreement to repurchase | 0 | 0 |
Junior subordinated debentures | 20,250 | 20,500 |
Accrued interest payable | 51 | 47 |
Derivative liabilities - interest rate swaps | $ 0 | $ 0 |
Cash Requirement (Details)
Cash Requirement (Details) - USD ($) $ in Millions | Mar. 31, 2019 | Dec. 31, 2018 |
Banking and Thrift [Abstract] | ||
Required reserve balance | $ 12.2 | $ 9.2 |
Leases - Textual (Details)
Leases - Textual (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
Lease ROU assets | $ 28,400 |
Lease liabilities | $ 29,544 |
Leases - Net Lease Cost (Detail
Leases - Net Lease Cost (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating Lease Cost | $ 1,243 |
Variable Lease Cost | 218 |
Total lease cost | $ 1,461 |
Leases - Other Related Informat
Leases - Other Related Information (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating cash flows from operating leases | $ 1,187 |
ROU assets obtained in exchange for lease liabilities | $ 335 |
Weighted average remaining lease term of operating leases, in years | 8 years 5 months 23 days |
Weighted average discount rate of operating leases | 3.33% |
Leases - Lease Payment Obligati
Leases - Lease Payment Obligations (Details) $ in Thousands | Mar. 31, 2019USD ($) |
Leases [Abstract] | |
2019 | $ 3,667 |
2020 | 4,581 |
2021 | 4,155 |
2022 | 3,730 |
2023 | 3,738 |
Thereafter | 14,215 |
Total lease payments | 34,086 |
Implied interest | (4,542) |
Right of use liability | $ 29,544 |
Leases - Future Minimum Rental
Leases - Future Minimum Rental Under Topic 840 (Details) | Dec. 31, 2018USD ($) |
Leases [Abstract] | |
2019 | $ 4,766 |
2020 | 4,251 |
2021 | 2,477 |
2022 | 1,704 |
2023 | 1,568 |
Thereafter | 1,788 |
Minimum lease payments | $ 16,554 |
Uncategorized Items - hfwa-2019
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ 93,000 |
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (399,000) |