Cover Page
Cover Page | 9 Months Ended |
Sep. 30, 2019shares | |
Cover page. | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Sep. 30, 2019 |
Document Transition Report | false |
Entity File Number | 000-29480 |
Entity Registrant Name | HERITAGE FINANCIAL CORP |
Entity Central Index Key | 0001046025 |
Amendment Flag | false |
Document Fiscal Year Focus | 2019 |
Document Fiscal Period Focus | Q3 |
Current Fiscal Year End Date | --12-31 |
Entity Incorporation, State or Country Code | WA |
Entity Tax Identification Number | 91-1857900 |
Entity Address, Address Line One | 201 Fifth Avenue SW, |
Entity Address, City or Town | Olympia |
Entity Address, State or Province | WA |
Entity Address, Postal Zip Code | 98501 |
City Area Code | 360 |
Local Phone Number | 943-1500 |
Title of 12(b) Security | Common stock, no par value |
Trading Symbol | HFWA |
Security Exchange Name | NASDAQ |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 36,618,381 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Financial Condition (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
ASSETS | ||
Cash on hand and in banks | $ 115,500 | $ 92,704 |
Interest earning deposits | 121,468 | 69,206 |
Cash and cash equivalents | 236,968 | 161,910 |
Investment securities available for sale, at fair value | 966,102 | 976,095 |
Loans held for sale | 5,211 | 1,555 |
Loans receivable, net | 3,731,343 | 3,654,160 |
Allowance for loan losses | (36,518) | (35,042) |
Total loans receivable, net | 3,694,825 | 3,619,118 |
Other real estate owned | 841 | 1,983 |
Premises and equipment, net | 86,563 | 81,100 |
Federal Home Loan Bank stock, at cost | 6,377 | 6,076 |
Bank owned life insurance | 102,981 | 93,612 |
Accrued interest receivable | 14,722 | 15,403 |
Prepaid expenses and other assets | 142,068 | 98,522 |
Other intangible assets, net | 17,588 | 20,614 |
Goodwill | 240,939 | 240,939 |
Total assets | 5,515,185 | 5,316,927 |
LIABILITIES AND STOCKHOLDERS' EQUITY | ||
Deposits | 4,562,257 | 4,432,402 |
Junior subordinated debentures | 20,522 | 20,302 |
Securities sold under agreement to repurchase | 25,883 | 31,487 |
Accrued expenses and other liabilities | 102,396 | 72,013 |
Total liabilities | 4,711,058 | 4,556,204 |
Stockholders’ equity: | ||
Preferred stock, no par value, 2,500,000 shares authorized; no shares issued and outstanding at September 30, 2019 and December 31, 2018 | 0 | 0 |
Common stock, no par value, 50,000,000 shares authorized; 36,618,381 and 36,874,055 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 585,581 | 591,806 |
Retained earnings | 206,021 | 176,372 |
Accumulated other comprehensive income (loss), net | 12,525 | (7,455) |
Total stockholders’ equity | 804,127 | 760,723 |
Total liabilities and stockholders’ equity | $ 5,515,185 | $ 5,316,927 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Financial Condition (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, no par value (in usd per share) | $ 0 | $ 0 |
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) | $ 0 | $ 0 |
Common stock, shares authorized (in shares) | 50,000,000 | 50,000,000 |
Common stock, shares issued (in shares) | 36,618,381 | 36,874,055 |
Common stock, shares outstanding (in shares) | 36,618,381 | 36,874,055 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
INTEREST INCOME | ||||
Interest and fees on loans | $ 47,845 | $ 48,301 | $ 142,651 | $ 127,601 |
Taxable interest on investment securities | 5,704 | 4,662 | 17,460 | 12,259 |
Nontaxable interest on investment securities | 798 | 1,085 | 2,641 | 3,646 |
Interest on other interest earning assets | 537 | 558 | 1,155 | 1,016 |
Total interest income | 54,884 | 54,606 | 163,907 | 144,522 |
INTEREST EXPENSE | ||||
Deposits | 4,250 | 3,014 | 11,870 | 7,169 |
Junior subordinated debentures | 332 | 330 | 1,026 | 928 |
Other borrowings | 59 | 136 | 444 | 721 |
Total interest expense | 4,641 | 3,480 | 13,340 | 8,818 |
Net interest income | 50,243 | 51,126 | 150,567 | 135,704 |
Provision for loan losses | 466 | 1,065 | 2,753 | 3,967 |
Net interest income after provision for loan losses | 49,777 | 50,061 | 147,814 | 131,737 |
NONINTEREST INCOME | ||||
Service charges and other fees | 4,779 | 4,824 | 14,109 | 14,062 |
Gain on sale of investment securities, net | 281 | 82 | 329 | 135 |
Gain on sale of loans, net | 993 | 706 | 1,613 | 2,286 |
Interest rate swap fees | 152 | 0 | 313 | 360 |
Other income | 2,253 | 2,438 | 7,087 | 6,330 |
Total noninterest income | 8,458 | 8,050 | 23,451 | 23,173 |
NONINTEREST EXPENSE | ||||
Compensation and employee benefits | 21,733 | 23,804 | 65,629 | 64,492 |
Occupancy and equipment | 5,268 | 5,020 | 16,177 | 14,457 |
Data processing | 2,333 | 2,343 | 6,615 | 7,455 |
Marketing | 816 | 876 | 3,020 | 2,507 |
Professional services | 1,434 | 2,119 | 3,912 | 8,485 |
State/municipal business and use taxes | 1,370 | 795 | 2,977 | 2,199 |
Federal deposit insurance premium | 9 | 375 | 720 | 1,105 |
Other real estate owned, net | (35) | (18) | (340) | (18) |
Amortization of intangible assets | 975 | 1,114 | 3,026 | 2,705 |
Other expense | 2,816 | 2,997 | 8,375 | 8,491 |
Total noninterest expense | 36,719 | 39,461 | 110,791 | 111,914 |
Income before income taxes | 21,516 | 18,650 | 60,474 | 42,996 |
Income tax expense | 3,621 | 3,146 | 10,043 | 6,548 |
Net income | $ 17,895 | $ 15,504 | $ 50,431 | $ 36,448 |
Basic earnings per common share (in usd per share) | $ 0.49 | $ 0.42 | $ 1.37 | $ 1.04 |
Diluted earnings per common share (in usd per share) | 0.48 | 0.42 | 1.36 | $ 1.04 |
Dividends declared per common share (in usd per share) | $ 0.19 | $ 0.15 | $ 0.55 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 17,895 | $ 15,504 | $ 50,431 | $ 36,448 |
Other comprehensive income (loss) | 2,771 | (3,384) | 19,980 | (13,299) |
Comprehensive income | $ 20,666 | $ 12,120 | $ 70,411 | $ 23,149 |
Condensed Consolidated Statem_5
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Comprehensive Income [Abstract] | ||||
Change in fair value of securities available for sale, tax | $ 799 | $ (887) | $ 5,407 | $ (3,525) |
Reclassification adjustment of net gain from sale of investment securities included in income, tax | $ (59) | $ (17) | $ 69 | $ (29) |
Condensed Consolidated Statem_6
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ 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 | $ 360,590 | $ 149,013 | $ (1,298) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock awards forfeited, shares | 29 | |||
Restricted stock units vested, net of forfeitures of restricted stock awards | 0 | |||
Stock-based compensation expense | 2,016 | $ 2,016 | ||
Common stock repurchased, shares | (53) | |||
Common stock repurchased | (1,702) | $ (1,702) | ||
Net income | 36,448 | 36,448 | ||
Other comprehensive income (loss), net of tax | (13,299) | (13,299) | ||
Common stock issued in business combinations, shares | 6,960 | |||
Common stock issued in business combinations | 230,043 | $ 230,043 | ||
Cash dividends declared on common stock | (15,796) | (15,796) | ||
Ending balance, shares at Sep. 30, 2018 | 36,873 | |||
Ending balance at Sep. 30, 2018 | 746,133 | $ 591,065 | 169,758 | (14,690) |
Beginning balance, shares at Jun. 30, 2018 | 34,021 | |||
Beginning balance at Jun. 30, 2018 | 639,523 | $ 491,026 | 159,803 | (11,306) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock awards forfeited, shares | (1) | |||
Restricted stock units vested, net of forfeitures of restricted stock awards | 0 | |||
Stock-based compensation expense | 709 | $ 709 | ||
Common stock repurchased, shares | (1) | |||
Common stock repurchased | (14) | $ (14) | ||
Net income | 15,504 | 15,504 | ||
Other comprehensive income (loss), net of tax | (3,384) | (3,384) | ||
Common stock issued in business combinations, shares | 2,848 | |||
Common stock issued in business combinations | 99,273 | $ 99,273 | ||
Cash dividends declared on common stock | (5,549) | (5,549) | ||
Ending balance, shares at Sep. 30, 2018 | 36,873 | |||
Ending balance at Sep. 30, 2018 | 746,133 | $ 591,065 | 169,758 | (14,690) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Effects of implementation of accounting change related to operating leases | 0 | |||
Beginning balance, shares at Dec. 31, 2018 | 36,874 | |||
Beginning balance at Dec. 31, 2018 | 760,723 | $ 591,806 | 176,372 | (7,455) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Restricted stock awards forfeited, shares | 63 | |||
Restricted stock units vested, net of forfeitures of restricted stock awards | 0 | |||
Exercise of stock options, shares | 4 | |||
Exercise of stock options | 44 | $ 44 | ||
Stock-based compensation expense | 2,366 | $ 2,366 | ||
Common stock repurchased, shares | (323) | |||
Common stock repurchased | (8,635) | $ (8,635) | ||
Net income | 50,431 | 50,431 | ||
Other comprehensive income (loss), net of tax | 19,980 | 19,980 | ||
Common stock issued in business combinations | 0 | |||
Cash dividends declared on common stock | (20,383) | (20,383) | ||
Ending balance, shares at Sep. 30, 2019 | 36,618 | |||
Ending balance at Sep. 30, 2019 | 804,127 | $ 585,581 | 206,021 | 12,525 |
Beginning balance, shares at Jun. 30, 2019 | 36,883 | |||
Beginning balance at Jun. 30, 2019 | 796,625 | $ 591,703 | 195,168 | 9,754 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Exercise of stock options, shares | 1 | |||
Exercise of stock options | 2 | $ 2 | ||
Stock-based compensation expense | 830 | $ 830 | ||
Common stock repurchased, shares | (267) | |||
Common stock repurchased | (6,954) | $ (6,954) | ||
Net income | 17,895 | 17,895 | ||
Other comprehensive income (loss), net of tax | 2,771 | 2,771 | ||
Cash dividends declared on common stock | (7,042) | (7,042) | ||
Ending balance, shares at Sep. 30, 2019 | 36,618 | |||
Ending balance at Sep. 30, 2019 | $ 804,127 | $ 585,581 | $ 206,021 | 12,525 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Effects of implementation of accounting change related to operating leases | $ 0 |
Condensed Consolidated Statem_7
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - $ / shares | Jul. 24, 2019 | Apr. 24, 2019 | Jan. 23, 2019 | Oct. 24, 2018 | Jul. 24, 2018 | Apr. 25, 2018 | Jan. 24, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 |
Statement of Stockholders' Equity [Abstract] | ||||||||||
Cash dividends declared on common stock (in usd per share) | $ 0.19 | $ 0.18 | $ 0.18 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.19 | $ 0.15 | $ 0.55 |
Condensed Consolidated Statem_8
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Statement of Cash Flows [Abstract] | ||
noncash or part noncash acquisition, securities sold under agreements to repurchase | $ 0 | $ 462 |
Cash flows from operating activities: | ||
Net income | 50,431 | 36,448 |
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 | 6,220 | 7,538 |
Changes in net deferred loan costs, net of amortization | 1,122 | (38) |
Provision for loan losses | 2,753 | 3,967 |
Net change in accrued interest receivable, prepaid expenses and other assets, and accrued expenses and other liabilities | 303 | 4,231 |
Stock-based compensation expense | 2,366 | 2,016 |
Amortization of intangible assets | 3,026 | 2,705 |
Origination of mortgage loans held for sale | (45,852) | (60,994) |
Proceeds from sale of mortgage loans | 43,544 | 63,330 |
Earnings on bank owned life insurance | (1,578) | (1,079) |
Valuation adjustment on other real estate owned | (51) | 0 |
Loss on sale of other real estate owned, net | 227 | 0 |
Gain on sale of loans, net | (1,613) | (2,286) |
Gain on sale of investment securities, net | (329) | (135) |
Gain (Loss) of Assets Held for Sale | 0 | (382) |
Impairment of assets held for sale | 0 | 75 |
Impairment of right of use asset | 117 | 0 |
(Gain) loss on sale of premises and equipment, net | (14) | 31 |
Net cash provided by operating activities | 60,774 | 55,427 |
Cash flows from investing activities: | ||
Loans originated, net of principal payments | (82,879) | (93,047) |
Maturities, calls and payments of investment securities available for sale | 145,778 | 64,625 |
Purchase of investment securities available for sale | (156,501) | (262,429) |
Proceeds from sales of investment securities available for sale | 43,872 | 156,946 |
Purchase of premises and equipment | (10,526) | (21,468) |
Proceeds from sale of other loans | 3,562 | 9,993 |
Proceeds from sale of other real estate owned | 864 | 198 |
Proceeds from Sale of Assets Held for Sale | 0 | 603 |
Proceeds from redemption of Federal Home Loan Bank stock | 18,032 | 26,010 |
Purchases of Federal Home Loan Bank stock | (18,333) | (21,996) |
Proceeds from sales of premises and equipment | 35 | 26 |
Purchase bank owned life insurance | 8,000 | 0 |
Capital contributions to low-income housing tax credit partnerships and new market tax credit partnerships, net | (16,992) | (8,269) |
Net cash received from acquisitions | 0 | 105,974 |
Net cash used in investing activities | (81,088) | (42,834) |
Cash flows from financing activities: | ||
Net increase in deposits | 129,855 | 180,465 |
Federal Home Loan Bank advances | 445,800 | 541,450 |
Repayment of Federal Home Loan Bank advances | (445,800) | (649,950) |
Common stock cash dividends paid | (15,796) | |
Net decrease in securities sold under agreement to repurchase | (5,604) | (50) |
Proceeds from exercise of stock options | 44 | 118 |
Repurchase of common stock | (8,635) | (1,702) |
Net cash provided by financing activities | 95,372 | 54,535 |
Net increase in cash and cash equivalents | 75,058 | 67,128 |
Cash and cash equivalents at beginning of period | 161,910 | 103,015 |
Cash and cash equivalents at end of period | 236,968 | 170,143 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 13,099 | 8,497 |
Cash paid for income taxes | 7,098 | 4,647 |
Supplemental non-cash disclosures of cash flow information: | ||
Transfers of loans receivable to other real estate owned | 0 | 434 |
Transfers of properties held for sale recorded in premises and equipment, net to prepaid expenses and other assets | 1,533 | 1,835 |
Transfer of bank owned life insurance to prepaid expenses and other assets | 209 | |
Business Combinations: | ||
Common stock issued for business combinations | 0 | 230,043 |
Assets acquired (liabilities assumed) in acquisitions: | ||
Investment securities available for sale | 0 | 84,846 |
Loans receivable | 0 | 718,547 |
Noncash or Part Noncash Acquisition Other Real Estate Owned | 0 | 1,796 |
Premises and equipment | 0 | 3,785 |
Federal Home Loan Bank stock | 0 | 1,743 |
Accrued interest receivable | 0 | 2,454 |
Bank owned life insurance | 0 | 17,116 |
Prepaid expenses and other assets | 0 | 3,182 |
Other intangible assets | 0 | 18,345 |
Deposits | 0 | (824,602) |
Accrued expenses and other liabilities | 0 | (8,489) |
Noncash or Part Noncash Acquisition, Debt Assumed | 0 | 16,000 |
Investment in low income housing tax partnership | 15,254 | 0 |
Purchase of investment securities available for sale not settled | $ 0 | $ 5,454 |
Description of Business, Basis
Description of Business, Basis of Presentation and Significant Accounting Policies and Recently Issued Accounting Pronouncements | 9 Months Ended |
Sep. 30, 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 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 is a Washington-chartered commercial bank and its deposits are insured by the FDIC. The Bank is headquartered in Olympia, Washington and conducts business from its 62 branch offices as of September 30, 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 Puget Sound Merger and on July 2, 2018, the Company completed the Premier Merger, collectively called the "Premier and Puget Mergers." See Note (2) Business Combinations for additional information on the Premier and Puget Mergers. (b) Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by 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 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 and nine months ended September 30, 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 During the normal course of business, the Company enters into agreements, and at inception it determines if a particular agreement is a lease. The Company's noncancelable operating lease agreements relate to certain banking offices, back-office operational facilities, office equipment, and sublease agreements. The agreements are recorded as ROU assets and liabilities within prepaid expenses and other assets and accrued expenses and other liabilities, respectively, in the Condensed Consolidated Statements of Financial Condition. Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, and represent the right to use an underlying asset for the lease term and the obligation to make lease payments arising from the lease. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the 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. The Company elected an exclusion policy for ROU 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. (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 ASU sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the ASU on January 1, 2019 and elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward the historical determination of contracts as leases, to carry forward lease classifications, and to not reassess initial direct costs for historical lease arrangements. The adoption of this ASU resulted in the initial recognition of operating lease ROU 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. This change also resulted in a cumulative-effect adjustment to beginning retained earnings of $399,000 , net of tax, 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, ASU 2019-04 and ASU 2019-05, was originally issued in June 2016. Commonly referred to as CECL, this ASU requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. For public business entities, this ASU 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. 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. 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. 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. In late 2017 the CECL steering committee selected a vendor to assist the Company in the adoption of a model, completed the implementation discovery sessions, and selected an appropriate methodology. During 2019, the Company compiled historical loan data and finalized data queries from the core system for current periods. Management is finalizing assumptions used in the model and running and analyzing CECL ALLL outcomes. The Company anticipates providing an estimated ALLL under the CECL model in January 2020. FASB ASU 2017-04 , Goodwill (Topic 350) , was issued in January 2017 and eliminates Step 2 from the goodwill impairment test. The ASU 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 ASU 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 ASU 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 ASU will have a material impact on its Condensed Consolidated Financial Statements. |
Business Combinations
Business Combinations | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Business Combinations There were no acquisitions or mergers completed during the three and nine months ended September 30, 2019 . 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. The Company incurred no acquisition-related costs for the Puget Sound Merger during the three months ended September 30, 2019 and $75,000 during the nine months ended September 30, 2019 . The Company incurred acquisition-related costs of $67,000 and $5.1 million during the three and nine months ended September 30, 2018 , respectively, for the Puget Sound Merger. Premier Merger: The Premier Merger was effective on July 2, 2018. As of the acquisition date, Premier Commercial Bancorp merged into Heritage and Premier Community Bank merged into Heritage Bank. The Premier Merger resulted in $53.4 million of goodwill. The Company incurred no acquisition-related costs for the Premier Merger during the three months ended September 30, 2019 and $57,000 during the nine months ended September 30, 2019 . The Company incurred acquisition-related costs of approximately $3.3 million and $4.0 million during the three and nine months ended September 30, 2018 , respectively, for the Premier Merger. The Company finalized the purchase price allocation for both mergers as of December 31, 2018. The following table presents certain pro forma information, for illustrative purposes only, for the three and nine months ended September 30, 2018 as if the Premier and Puget Mergers had occurred on January 1, 2017. The estimated pro forma information combines the historical results of Premier Commercial and Puget Sound with the Company's consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the Premier and Puget Mergers occurred on January 1, 2017. In particular, the pro forma information does not consider any changes to the provision for loan losses resulting from recorded loans at fair value. Additionally, Heritage expected to achieve further operating savings and other business synergies, including interest income growth, as a result of the Premier and Puget Mergers which are not reflected in the pro forma amounts in the following table. As a result, actual amounts will differ from the pro forma information presented. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 (Dollars in thousands, except per share amounts) Net interest income $ 49,942 $ 143,740 Net Income 18,950 50,225 Basic earnings per share $ 0.51 $ 1.36 Dilutive earnings per share $ 0.51 $ 1.35 |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 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: September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 112,045 $ 813 $ (7 ) $ 112,851 Municipal securities 122,733 4,582 — 127,315 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 343,909 3,394 (626 ) 346,677 Commercial 324,153 7,621 (444 ) 331,330 Corporate obligations 23,873 309 (26 ) 24,156 Other asset-backed securities 23,517 280 (24 ) 23,773 Total $ 950,230 $ 16,999 $ (1,127 ) $ 966,102 (1) Issued and guaranteed by U.S. Government-sponsored agencies. December 31, 2018 Amortized Gross Gross Fair (In thousands) 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 September 30, 2019 or December 31, 2018 . The amortized cost and fair value of investment securities available for sale at September 30, 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 $ 37,675 $ 37,742 Due after one year through five years 194,742 197,144 Due after five years through ten years 275,903 282,814 Due after ten years 441,910 448,402 Total $ 950,230 $ 966,102 (b) Unrealized Losses and Other-Than-Temporary Impairments The following tables show 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 September 30, 2019 and December 31, 2018 : September 30, 2019 Less than 12 Months 12 Months or Longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 6,993 $ (7 ) $ — $ — $ 6,993 $ (7 ) Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 46,175 (210 ) 47,952 (416 ) 94,127 (626 ) Commercial 29,842 (72 ) 46,210 (372 ) 76,052 (444 ) Corporate obligations — — 1,974 (26 ) 1,974 (26 ) Other asset-backed securities 3,453 (11 ) 1,704 (13 ) 5,157 (24 ) Total $ 86,463 $ (300 ) $ 97,840 $ (827 ) $ 184,303 $ (1,127 ) (1) Issued and guaranteed by U.S. Government-sponsored agencies. December 31, 2018 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized (In thousands) 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 September 30, 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 since purchase of the securities. 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 September 30, 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 and nine months ended September 30, 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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Gross realized gains $ 281 $ 145 $ 557 $ 267 Gross realized losses — (63 ) (228 ) (132 ) Net realized gains $ 281 $ 82 $ 329 $ 135 (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 September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Washington and Oregon state public deposits $ 188,219 $ 191,336 $ 199,026 $ 196,786 Securities sold under agreement to repurchase 40,481 40,830 48,173 47,407 Other securities pledged 20,559 21,128 20,778 20,482 Total $ 249,259 $ 253,294 $ 267,977 $ 264,675 |
Loans Receivable
Loans Receivable | 9 Months Ended |
Sep. 30, 2019 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Financing Receivables [Text Block] | 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 September 30, 2019 and December 31, 2018 consisted of the following portfolio segments and classes: September 30, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 853,995 $ 853,606 Owner-occupied commercial real estate 787,591 779,814 Non-owner occupied commercial real estate 1,316,992 1,304,463 Total commercial business 2,958,578 2,937,883 One-to-four family residential 121,174 101,763 Real estate construction and land development: One-to-four family residential 98,034 102,730 Five or more family residential and commercial properties 147,686 112,730 Total real estate construction and land development 245,720 215,460 Consumer 403,485 395,545 Gross loans receivable 3,728,957 3,650,651 Net deferred loan costs 2,386 3,509 Loans receivable, net 3,731,343 3,654,160 Allowance for loan losses (36,518 ) (35,042 ) Total loans receivable, net $ 3,694,825 $ 3,619,118 (b) Concentrations of Credit As of September 30, 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, 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 September 30, 2019 and December 31, 2018 : September 30, 2019 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 777,165 $ 20,310 $ 56,520 $ — $ 853,995 Owner-occupied commercial real estate 753,386 20,498 13,707 — 787,591 Non-owner occupied commercial real estate 1,293,780 9,989 13,223 — 1,316,992 Total commercial business 2,824,331 50,797 83,450 — 2,958,578 One-to-four family residential 119,914 — 1,260 — 121,174 Real estate construction and land development: One-to-four family residential 96,300 — 1,734 — 98,034 Five or more family residential and commercial properties 147,177 509 — — 147,686 Total real estate construction and land development 243,477 509 1,734 — 245,720 Consumer 399,203 — 3,758 524 403,485 Gross loans receivable $ 3,586,925 $ 51,306 $ 90,202 $ 524 $ 3,728,957 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 September 30, 2019 and December 31, 2018 were $85.3 million and $101.3 million , respectively. (d) Nonaccrual Loans Nonaccrual loans, segregated by segments and classes of loans, were as follows as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 30,014 $ 6,639 Owner-occupied commercial real estate 4,176 4,212 Non-owner occupied commercial real estate 6,552 1,713 Total commercial business 40,742 12,564 One-to-four family residential 19 71 Real estate construction and land development: One-to-four family residential 560 899 Consumer 190 169 Nonaccrual loans $ 41,511 $ 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 or pool's expected cash flow even if the loan or pool is not performing under its contractual terms, except for non-pooled PCI loans which are no longer accreting loan discounts established at acquisition. (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. PCI loans are included in the past due loans table below solely to reconcile to total Gross Loans Receivable. The balances of past due loans, segregated by segments and classes of loans, as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 832 $ 3,562 $ 4,394 $ 847,202 $ 851,596 Owner-occupied commercial real estate 158 757 915 779,880 780,795 Non-owner occupied commercial real estate 2,971 2,029 5,000 1,305,725 1,310,725 Total commercial business 3,961 6,348 10,309 2,932,807 2,943,116 One-to-four family residential — — — 117,669 117,669 Real estate construction and land development: One-to-four family residential — 560 560 97,474 98,034 Five or more family residential and commercial properties — — — 147,686 147,686 Total real estate construction and land development — 560 560 245,160 245,720 Consumer 1,667 — 1,667 399,717 401,384 Past due gross loans receivable, excluding PCI loans 5,628 6,908 12,536 3,695,353 3,707,889 PCI loans 934 155 1,089 19,979 21,068 Gross loans receivable $ 6,562 $ 7,063 $ 13,625 $ 3,715,332 $ 3,728,957 December 31, 2018 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 2,711 $ 2,281 $ 4,992 $ 845,181 $ 850,173 Owner-occupied commercial real estate 513 408 921 771,677 772,598 Non-owner occupied commercial real estate 3,412 1,103 4,515 1,292,888 1,297,403 Total commercial business 6,636 3,792 10,428 2,909,746 2,920,174 One-to-four family residential 227 — 227 98,221 98,448 Real estate construction and land development: One-to-four family residential 665 234 899 101,451 102,350 Five or more family residential and commercial properties — — — 112,688 112,688 Total real estate construction and land development 665 234 899 214,139 215,038 Consumer 2,559 — 2,559 389,525 392,084 Past due gross loans receivable, excluding PCI loans 10,087 4,026 14,113 3,611,631 3,625,744 PCI loans 2,271 550 2,821 22,086 24,907 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 September 30, 2019 or December 31, 2018 , excluding PCI loans. (f) Impaired loans Impaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance. The balances of impaired loans as of September 30, 2019 and December 31, 2018 are set forth in the following tables: September 30, 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 $ 26,099 $ 16,338 $ 42,437 $ 43,845 $ 1,879 Owner-occupied commercial real estate 3,031 2,503 5,534 5,925 453 Non-owner occupied commercial real estate 5,394 4,518 9,912 9,997 316 Total commercial business 34,524 23,359 57,883 59,767 2,648 One-to-four family residential — 220 220 227 57 Real estate construction and land development: One-to-four family residential 560 — 560 638 — Consumer — 575 575 589 148 Total $ 35,084 $ 24,154 $ 59,238 $ 61,221 $ 2,853 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 — 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 and nine months ended September 30, 2019 and 2018 are set forth in the following table: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Commercial business: Commercial and industrial $ 35,022 $ 16,252 $ 28,929 $ 15,258 Owner-occupied commercial real estate 5,918 12,533 5,927 12,687 Non-owner occupied commercial real estate 9,793 10,265 8,108 10,311 Total commercial business 50,733 39,050 42,964 38,256 One-to-four family residential 222 288 249 292 Real estate construction and land development: One-to-four family residential 676 1,080 794 1,139 Five or more family residential and commercial properties — — — 161 Total real estate construction and land development 676 1,080 794 1,300 Consumer 596 396 579 403 Total $ 52,227 $ 40,814 $ 44,586 $ 40,251 For the three and nine months ended September 30, 2019 and 2018 , no interest income was recognized subsequent to a loan’s classification as nonaccrual. For the three and nine months ended September 30, 2019 , the Bank recorded $282,000 and $980,000 , respectively, of interest income related to performing TDR loans. For the three and nine months ended September 30, 2018 , the Bank recorded $361,000 and $1.0 million , 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 September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 Performing TDR loans Nonaccrual TDR loans Performing TDR loans Nonaccrual TDR loans (In thousands) TDR loans $ 19,416 $ 17,529 $ 22,736 $ 6,943 Allowance for loan losses on TDR loans 1,850 494 2,257 658 The unfunded commitment to borrowers related to TDR loans was $2.0 million and $943,000 at September 30, 2019 and December 31, 2018 , respectively. Loans that were modified as TDR loans during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Recorded Investment (1) Number of Recorded Investment (1) (Dollars in thousands) Commercial business: Commercial and industrial 15 $ 5,266 11 $ 2,352 Owner-occupied commercial real estate 2 1,214 2 1,081 Non-owner occupied commercial real estate 3 2,597 2 2,776 Total commercial business 20 9,077 15 6,209 Consumer 3 26 1 25 Total loans modified as TDR loans 23 $ 9,103 16 $ 6,234 Nine Months Ended September 30, 2019 2018 Number of (2) Recorded Investment (1,2) Number of Contracts (2) Recorded Investment (1,2) (Dollars in thousands) Commercial business: Commercial and industrial 33 $ 22,414 22 $ 4,445 Owner-occupied commercial real estate 3 1,612 3 1,639 Non-owner occupied commercial real estate 4 5,568 3 2,976 Total commercial business 40 29,594 28 9,060 Real estate construction and land development: One-to-four family residential 1 560 2 767 Consumer 10 155 8 133 Total TDR loans 51 $ 30,309 38 $ 9,960 (1) 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 and nine months ended September 30, 2019 and 2018 . (2) 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 nine months ended September 30, 2019 and 2018 . The tables above include seven and 17 loans, respectively, for the three and nine months ended September 30, 2019 and nine and 15 loans, respectively, for the three and nine months ended September 30, 2018 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-reported 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 September 30, 2019 for loans that were modified as TDR loans during the nine months ended September 30, 2019 was $1.8 million . Loans that were modified during the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Contracts Recorded Investments Number of Recorded Investments (Dollars in thousands) Commercial business: Commercial and industrial 4 $ 2,056 2 $ 1,742 Non-owner occupied commercial real estate 1 2,971 — — Total commercial business 5 5,027 2 1,742 Total 5 $ 5,027 2 $ 1,742 Nine Months Ended September 30, 2019 2018 Number of Contracts (1) Recorded Investments (1) Number of (1) Recorded Investments (1) (Dollars in thousands) Commercial business: Commercial and industrial 9 $ 3,230 3 $ 2,020 Owner-occupied commercial real estate 2 1,101 1 69 Non-owner occupied commercial real estate 2 3,541 — — Total commercial business 13 7,872 4 2,089 Real estate construction and land development: One-to-four family residential 1 560 2 767 Total 14 $ 8,432 6 $ 2,856 (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 nine months ended September 30, 2019 and 2018 . During the three and nine months ended September 30, 2019 , three and 12 TDR loans, respectively, defaulted because each was past its modified maturity date, and the borrower has not subsequently repaid the credits. The Bank has chosen not to extend further the maturity date on these loans. In addition, during both the three and nine months ended September 30, 2019 , two TDR loans defaulted because the borrowers were more than 90 days delinquent on their scheduled loan payments. The Bank had a specific valuation allowance of $412,000 at September 30, 2019 related to these TDR loans which defaulted during the nine months ended September 30, 2019 . During the three and nine months ended September 30, 2018 , two and three TDR loans, respectively, defaulted because each was past its modified maturity date, and the borrower has not subsequently repaid the credits. The Bank had chosen not to extend the maturities on these loans. In addition, during the nine months ended September 30, 2018 , three TDR loans defaulted because the borrowers were more than 90 days delinquent on their scheduled loan payments. The Bank had a specific valuation allowance of $320,000 at September 30, 2018 related to TDR loans which defaulted during the nine months ended September 30, 2018 . (h) Purchased Credit Impaired Loans The following table reflects the outstanding principal balance and recorded investment of the PCI loans at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Outstanding Principal Recorded Investment Outstanding Principal Recorded Investment (In thousands) Commercial business: Commercial and industrial $ 4,541 $ 2,399 $ 6,319 $ 3,433 Owner-occupied commercial real estate 6,879 6,796 7,830 7,215 Non-owner occupied commercial real estate 7,887 6,267 8,685 7,059 Total commercial business 19,307 15,462 22,834 17,707 One-to-four family residential 3,011 3,505 3,169 3,315 Real estate construction and land development: One-to-four family residential — — 67 380 Five or more family residential and commercial properties — — 188 43 Total real estate construction and land development — — 255 423 Consumer 825 2,101 2,203 3,462 Gross PCI loans $ 23,143 $ 21,068 $ 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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 8,572 $ 10,060 $ 9,493 $ 11,224 Accretion (423 ) (644 ) (1,517 ) (2,011 ) Disposal and other (94 ) (164 ) (744 ) (2,136 ) Reclassification from nonaccretable difference — 1,198 823 3,373 Balance at the end of the period $ 8,055 $ 10,450 $ 8,055 $ 10,450 |
Loans Receivable | Loans that were modified as TDR loans during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Recorded Investment (1) Number of Recorded Investment (1) (Dollars in thousands) Commercial business: Commercial and industrial 15 $ 5,266 11 $ 2,352 Owner-occupied commercial real estate 2 1,214 2 1,081 Non-owner occupied commercial real estate 3 2,597 2 2,776 Total commercial business 20 9,077 15 6,209 Consumer 3 26 1 25 Total loans modified as TDR loans 23 $ 9,103 16 $ 6,234 Nine Months Ended September 30, 2019 2018 Number of (2) Recorded Investment (1,2) Number of Contracts (2) Recorded Investment (1,2) (Dollars in thousands) Commercial business: Commercial and industrial 33 $ 22,414 22 $ 4,445 Owner-occupied commercial real estate 3 1,612 3 1,639 Non-owner occupied commercial real estate 4 5,568 3 2,976 Total commercial business 40 29,594 28 9,060 Real estate construction and land development: One-to-four family residential 1 560 2 767 Consumer 10 155 8 133 Total TDR loans 51 $ 30,309 38 $ 9,960 (1) 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 and nine months ended September 30, 2019 and 2018 . (2) 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 nine months ended September 30, 2019 and 2018 . |
Allowance for Loan Losses
Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 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 tables detail the activity in the allowance for loan losses disaggregated by segment and class for the three and nine months ended September 30, 2019 : Three Months Ended September 30, 2019 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 11,993 $ (306 ) $ 43 $ 449 $ 12,179 Owner-occupied commercial real estate 5,066 — 46 (656 ) 4,456 Non-owner occupied commercial real estate 8,064 — 292 (525 ) 7,831 Total commercial business 25,123 (306 ) 381 (732 ) 24,466 One-to-four family residential 1,345 (15 ) — 81 1,411 Real estate construction and land development: One-to-four family residential 1,471 — 3 (133 ) 1,341 Five or more family residential and commercial properties 1,060 — — 229 1,289 Total real estate construction and land development 2,531 — 3 96 2,630 Consumer 6,540 (501 ) 127 621 6,787 Unallocated 824 — — 400 1,224 Total $ 36,363 $ (822 ) $ 511 $ 466 $ 36,518 Nine Months Ended September 30, 2019 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 11,343 $ (1,183 ) $ 112 $ 1,907 $ 12,179 Owner-occupied commercial real estate 4,898 — 49 (491 ) 4,456 Non-owner occupied commercial real estate 7,470 — 441 (80 ) 7,831 Total commercial business 23,711 (1,183 ) 602 1,336 24,466 One-to-four family residential 1,203 (45 ) — 253 1,411 Real estate construction and land development: One-to-four family residential 1,240 — 628 (527 ) 1,341 Five or more family residential and commercial properties 954 — — 335 1,289 Total real estate construction and land development 2,194 — 628 (192 ) 2,630 Consumer 6,581 (1,653 ) 374 1,485 6,787 Unallocated 1,353 — — (129 ) 1,224 Total $ 35,042 $ (2,881 ) $ 1,604 $ 2,753 $ 36,518 The following table details the allowance for loan losses disaggregated on the basis of the Company's impairment method as of September 30, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans (1) Total Allowance for Loan Losses (In thousands) Commercial business: Commercial and industrial $ 1,879 $ 9,666 $ 634 $ 12,179 Owner-occupied commercial real estate 453 3,447 556 4,456 Non-owner occupied commercial real estate 316 7,015 500 7,831 Total commercial business 2,648 20,128 1,690 24,466 One-to-four family residential 57 1,260 94 1,411 Real estate construction and land development: One-to-four family residential — 1,172 169 1,341 Five or more family residential and commercial properties — 1,211 78 1,289 Total real estate construction and land development — 2,383 247 2,630 Consumer 148 6,269 370 6,787 Unallocated — 1,224 — 1,224 Total $ 2,853 $ 31,264 $ 2,401 $ 36,518 (1) Includes non-pooled PCI loans that are evaluated for individual impairment. The following table details the recorded investment balance of the loan receivables disaggregated on the basis of the Company’s impairment method as of September 30, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans (1) Total Gross Loans Receivable (In thousands) Commercial business: Commercial and industrial $ 42,437 $ 809,159 $ 2,399 $ 853,995 Owner-occupied commercial real estate 5,534 775,261 6,796 787,591 Non-owner occupied commercial real estate 9,912 1,300,813 6,267 1,316,992 Total commercial business 57,883 2,885,233 15,462 2,958,578 One-to-four family residential 220 117,449 3,505 121,174 Real estate construction and land development: One-to-four family residential 560 97,474 — 98,034 Five or more family residential and commercial properties — 147,686 — 147,686 Total real estate construction and land development 560 245,160 — 245,720 Consumer 575 400,809 2,101 403,485 Total $ 59,238 $ 3,648,651 $ 21,068 $ 3,728,957 (1) Includes non-pooled PCI loans that are evaluated for individual impairment. The following tables detail activity in the allowance for loan losses disaggregated by segment and class for the three and nine months ended September 30, 2018 : Three Months Ended September 30, 2018 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 10,188 $ (151 ) $ 119 $ 122 $ 10,278 Owner-occupied commercial real estate 5,246 — 2 181 5,429 Non-owner occupied commercial real estate 7,726 (149 ) — 71 7,648 Total commercial business 23,160 (300 ) 121 374 23,355 One-to-four family residential 1,121 (15 ) — 50 1,156 Real estate construction and land development: One-to-four family residential 1,016 — 3 156 1,175 Five or more family residential and commercial properties 1,044 — — (15 ) 1,029 Total real estate construction and land development 2,060 — 3 141 2,204 Consumer 6,305 (530 ) 159 474 6,408 Unallocated 1,326 — — 26 1,352 Total $ 33,972 $ (845 ) $ 283 $ 1,065 $ 34,475 Nine Months Ended September 30, 2018 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 9,910 $ (773 ) $ 683 $ 458 $ 10,278 Owner-occupied commercial real estate 3,992 (1 ) 7 1,431 5,429 Non-owner occupied commercial real estate 8,097 (149 ) — (300 ) 7,648 Total commercial business 21,999 (923 ) 690 1,589 23,355 One-to-four family residential 1,056 (30 ) — 130 1,156 Real estate construction and land development: One-to-four family residential 862 — 5 308 1,175 Five or more family residential and commercial properties 1,190 — — (161 ) 1,029 Total real estate construction and land development 2,052 — 5 147 2,204 Consumer 6,081 (1,709 ) 389 1,647 6,408 Unallocated 898 — — 454 1,352 Total $ 32,086 $ (2,662 ) $ 1,084 $ 3,967 $ 34,475 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 | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Other Real Estate Owned | Other Real Estate Owned Changes in other real estate owned during the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 1,224 $ 434 $ 1,983 $ — Additions — — — 434 Additions from acquisitions — 1,796 — 1,796 Proceeds from dispositions (435 ) (198 ) (864 ) (198 ) Gain (loss) on sales, net 52 — (227 ) — Valuation adjustment — — (51 ) — Balance at the end of the period $ 841 $ 2,032 $ 841 $ 2,032 At September 30, 2019 , there was no other real estate owned that was the result of foreclosure and obtaining physical possession of residential real estate properties. At September 30, 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 | 9 Months Ended |
Sep. 30, 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 following mergers and acquisitions: Premier Commercial Bancorp on July 2, 2018; Puget Sound Bancorp 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 September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 240,939 $ 187,549 $ 240,939 $ 119,029 Additions as a result of acquisitions (1) — 53,288 — 121,808 Balance at the end of the period $ 240,939 $ 240,837 $ 240,939 $ 240,837 (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 existed during the nine months ended September 30, 2019. (b) Other Intangible Assets Other intangible assets represent CDI acquired in business combinations. The useful life of the CDI was estimated to be ten years for the acquisitions of Premier Commercial Bancorp, Puget Sound Bancorp, Washington Banking Company, and Valley Community Bancshares, and was estimated to be five 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 September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 18,563 $ 15,767 $ 20,614 $ 6,088 Additions as a result of acquisitions (1) — 7,075 — 18,345 Amortization (975 ) (1,114 ) (3,026 ) (2,705 ) Balance at the end of the period $ 17,588 $ 21,728 $ 17,588 $ 21,728 (1) See Note (2) Business Combinations |
Junior Subordinated Debentures
Junior Subordinated Debentures | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018 , the balance of the junior subordinated debentures, net of unaccreted discount, was $20.5 million and $20.3 million , respectively. The adjustable rate of the trust preferred securities at September 30, 2019 was 3.65% . The following table presents the weighted average rate of the junior subordinated debentures for the periods indicated: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 Weighted average rate (1) 6.43 % 6.49 % 6.72 % 6.17 % (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 FHLB functions as a member-owned cooperative providing credit for member financial institutions. At September 30, 2019 , the Bank maintained a credit facility with the FHLB with available borrowing capacity of $930.6 million . At September 30, 2019 and December 31, 2018 the Bank had no FHLB advances outstanding. The following table sets forth the details of FHLB advances during the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) FHLB Advances: Average balance during the period $ 3,755 $ 20,892 $ 15,909 $ 45,194 Maximum month-end balance during the period $ — $ 50,500 $ 90,700 $ 154,500 Weighted average rate during the period 1.16 % 2.22 % 2.56 % 1.98 % 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, Pacific Coast Bankers’ Bank and JP Morgan Chase to purchase federal funds of up to $140.0 million as of September 30, 2019 . The lines generally mature annually or are reviewed annually. As of September 30, 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 with available borrowing capacity of $40.4 million as of September 30, 2019 . There were no borrowings outstanding as of September 30, 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. |
Securities Sold Under Agreement
Securities Sold Under Agreement to Repurchase | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |
Securities Sold Under Agreement to Repurchase | Securities Sold Under Agreement to Repurchase The Company utilizes securities sold under agreement to repurchase 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 securities sold under agreement to repurchase see Note (3) Investment Securities. The following table presents the Company's securities sold under agreement to repurchase obligations by class of collateral pledged at the dates indicated: September 30, 2019 December 31, 2018 (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 6,912 $ 4,878 Mortgage-backed securities and collateralized mortgage obligations: (1) Residential 10,254 9,335 Commercial 8,717 17,274 Total securities sold under agreement to repurchase $ 25,883 $ 31,487 (1) Issued and guaranteed by U.S. Government-sponsored agencies. |
Other Borrowings
Other Borrowings | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018 , the balance of the junior subordinated debentures, net of unaccreted discount, was $20.5 million and $20.3 million , respectively. The adjustable rate of the trust preferred securities at September 30, 2019 was 3.65% . The following table presents the weighted average rate of the junior subordinated debentures for the periods indicated: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 Weighted average rate (1) 6.43 % 6.49 % 6.72 % 6.17 % (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 FHLB functions as a member-owned cooperative providing credit for member financial institutions. At September 30, 2019 , the Bank maintained a credit facility with the FHLB with available borrowing capacity of $930.6 million . At September 30, 2019 and December 31, 2018 the Bank had no FHLB advances outstanding. The following table sets forth the details of FHLB advances during the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) FHLB Advances: Average balance during the period $ 3,755 $ 20,892 $ 15,909 $ 45,194 Maximum month-end balance during the period $ — $ 50,500 $ 90,700 $ 154,500 Weighted average rate during the period 1.16 % 2.22 % 2.56 % 1.98 % 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, Pacific Coast Bankers’ Bank and JP Morgan Chase to purchase federal funds of up to $140.0 million as of September 30, 2019 . The lines generally mature annually or are reviewed annually. As of September 30, 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 with available borrowing capacity of $40.4 million as of September 30, 2019 . There were no borrowings outstanding as of September 30, 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) | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018 : September 30, 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) $ 181,360 $ 12,026 $ 171,798 $ 5,095 Interest rate swap liability (1) 181,360 (12,026 ) 171,798 (5,095 ) (1) The estimated fair value of derivatives with customers was $12,026 and $(1,643) as of September 30, 2019 and December 31, 2018 , respectively. The estimated fair value of derivatives with third parties was $(12,026) and $1,643 as of September 30, 2019 and December 31, 2018 , respectively. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Net income: Net income $ 17,895 $ 15,504 $ 50,431 $ 36,448 Dividends and undistributed earnings allocated to participating securities (10 ) (48 ) (48 ) (252 ) Net income allocated to common shareholders $ 17,885 $ 15,456 $ 50,383 $ 36,196 Basic: Weighted average common shares outstanding 36,764,810 36,839,615 36,846,884 34,744,788 Restricted stock awards (21,948 ) (67,669 ) (34,336 ) (94,340 ) Total basic weighted average common shares outstanding 36,742,862 36,771,946 36,812,548 34,650,448 Diluted: Basic weighted average common shares outstanding 36,742,862 36,771,946 36,812,548 34,650,448 Effect of potentially dilutive common shares (1) 133,686 191,298 160,476 170,154 Total diluted weighted average common shares outstanding 36,876,548 36,963,244 36,973,024 34,820,602 (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. For the three and nine months ended September 30, 2019 , there were 108,501 and 70,372 anti-dilutive shares outstanding, respectively. There were no anti-dilutive shares outstanding for the three and nine months ended September 30, 2018 . (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 nine months ended September 30, 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 April 24, 2019 $0.18 May 8, 2019 May 22, 2019 July 24, 2019 $0.19 August 8, 2019 August 22, 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 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 872,678 shares at an average share price of $20.03 , including 264,712 and 292,712 shares repurchased at an average share price of $26.23 and $26.50 during the three and nine months ended September 30, 2019 , respectively. No shares were repurchased under this plan during the three and nine months ended September 30, 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 September 30, Nine Months Ended 2019 2018 2019 2018 Repurchased shares to pay withholding taxes (1) 405 368 28,434 53,188 Stock repurchase to pay withholding taxes average share price $ 27.67 $ 36.34 $ 30.83 $ 31.99 (1) During the nine months ended September 30, 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) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2019 and 2018 are as follows: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance of AOCI at the beginning of period $ 9,754 $ (11,306 ) $ (7,455 ) $ (1,298 ) Other comprehensive income (loss) before reclassification 2,993 (3,319 ) 20,240 (13,193 ) Amounts reclassified from AOCI for gain on sale of investment securities included in net income (222 ) (65 ) (260 ) (106 ) Net current period other comprehensive income (loss) 2,771 (3,384 ) 19,980 (13,299 ) Effects of implementation of accounting change related to equity investments, net — — — (93 ) Balance of AOCI at the end of period $ 12,525 $ (14,690 ) $ 12,525 $ (14,690 ) |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value Disclosures [Abstract] | |
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 September 30, 2019 and December 31, 2018 : September 30, 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 $ 112,851 $ 16,090 $ 96,761 $ — Municipal securities 127,315 — 127,315 — Mortgage-backed securities and collateralized mortgage obligations: Residential 346,677 — 346,677 — Commercial 331,330 — 331,330 — Corporate obligations 24,156 — 24,156 — Other asset-backed securities 23,773 — 23,773 — Total investment securities available for sale 966,102 16,090 950,012 — Equity Security 147 147 — — Derivative assets - interest rate swaps 12,026 — 12,026 — Liabilities Derivative liabilities - interest rate swaps $ 12,026 $ — $ 12,026 $ — 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 and nine months ended September 30, 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 September 30, 2019 and December 31, 2018 and the net losses recorded in earnings during three and nine months ended September 30, 2019 and 2018 : Basis (1) Fair Value at September 30, 2019 Total Level 1 Level 2 Level 3 Net Losses Net Losses (In thousands) Impaired loans: Commercial and industrial $ 2,503 $ 1,872 $ — $ — $ 1,872 $ 48 $ 134 Total assets measured at fair value on a nonrecurring basis $ 2,503 $ 1,872 $ — $ — $ 1,872 $ 48 $ 134 (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 September 30, 2018 Net Losses Recorded in Earnings During the Six Months Ended September 30, 2018 (In thousands) Impaired loans: Commercial business: Commercial and industrial $ 117 $ 107 $ — $ — $ 107 $ 11 $ 11 Non-owner occupied commercial real estate 1,378 1,102 — — 1,102 149 149 Total commercial business 1,495 1,209 — — 1,209 160 160 Consumer 9 7 — — 7 — — Total assets measured at fair value on a nonrecurring basis $ 1,504 $ 1,216 $ — $ — $ 1,216 $ 160 $ 160 (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 September 30, 2019 and December 31, 2018 : September 30, 2019 Fair Value Valuation Technique(s) Unobservable Input(s) Range of Inputs; Weighted Average (Dollars in thousands) Impaired loans $ 1,872 Market approach Adjustment for differences between the comparable sales 240.9% - (16.0%); 62.4% 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 September 30, 2019 and December 31, 2018 : September 30, 2019 Carrying Value Fair Value Fair Value Measurements Using: Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash and cash equivalents $ 236,968 $ 236,968 $ 236,968 $ — $ — Investment securities available for sale 966,102 966,102 16,090 950,012 — Federal Home Loan Bank stock 6,377 N/A N/A N/A N/A Loans held for sale 5,211 5,375 — — 5,375 Total loans receivable, net 3,694,825 3,758,359 — — 3,758,359 Accrued interest receivable 14,722 14,722 104 3,650 10,968 Derivative assets - interest rate swaps 12,026 12,026 — 12,026 — Equity security 147 147 147 — — Financial Liabilities: Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts $ 4,037,947 $ 4,037,947 $ 4,037,947 $ — $ — Certificate of deposit accounts 524,310 529,925 — 529,925 — Securities sold under agreement to repurchase 25,883 25,883 25,883 — — Junior subordinated debentures 20,522 19,750 — — 19,750 Accrued interest payable 212 212 96 76 40 Derivative liabilities - interest rate swaps 12,026 12,026 — 12,026 — 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 — Federal Home Loan Bank stock 6,076 N/A N/A N/A N/A Loans held for sale 1,555 1,605 — 1,605 — Loans receivable, net of allowance for loan losses 3,619,118 3,614,348 — — 3,614,348 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 — 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 | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018 was $16.2 million and $9.2 million , respectively, and was met by holding cash and maintaining an average balance with the Federal Reserve Bank. |
Leases
Leases | 9 Months Ended |
Sep. 30, 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. As of September 30, 2019 , the Company’s lease ROU assets and related lease liabilities were $26.6 million and $27.9 million , respectively. The Company does not have leases designated as finance leases. The table below summarizes the net lease cost recognized during the periods presented: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (In thousands) Operating Lease Cost $ 1,231 $ 3,718 Variable Lease Cost 193 588 Sublease Income (24 ) (47 ) Total net lease cost $ 1,400 $ 4,259 The tables below summarize other information related to the Company's operating leases during the periods presented: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities $ 1,220 $ 3,621 ROU assets obtained in exchange for lease liabilities, excluding adoption impact $ 363 $ 703 September 30, Weighted average remaining lease term of operating leases, in years 8.13 Weighted average discount rate of operating leases 3.31 % The following table outlines lease payment obligations as outlined in the Company’s lease agreements for each of the next five years, as of September 30, 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 $ 1,224 2020 4,652 2021 4,228 2022 3,806 2023 3,816 Thereafter 14,279 Total lease payments 32,005 Implied interest (4,082 ) Right of use liability $ 27,923 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 September 30, 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) | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Heritage Financial Corporation 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 is a Washington-chartered commercial bank and its deposits are insured by the FDIC. The Bank is headquartered in Olympia, Washington and conducts business from its 62 branch offices as of September 30, 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 Puget Sound Merger and on July 2, 2018, the Company completed the Premier Merger, collectively called the "Premier and Puget Mergers." See Note (2) Business Combinations for additional information on the Premier and Puget Mergers. |
Basis of Presentation | Basis of Presentation The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with GAAP for interim financial information and pursuant to the rules and regulations of the SEC. Accordingly, they do not include all of the information and footnotes required by 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 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 and nine months ended September 30, 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 During the normal course of business, the Company enters into agreements, and at inception it determines if a particular agreement is a lease. The Company's noncancelable operating lease agreements relate to certain banking offices, back-office operational facilities, office equipment, and sublease agreements. The agreements are recorded as ROU assets and liabilities within prepaid expenses and other assets and accrued expenses and other liabilities, respectively, in the Condensed Consolidated Statements of Financial Condition. Operating lease ROU assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term, and represent the right to use an underlying asset for the lease term and the obligation to make lease payments arising from the lease. As the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the 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. The Company elected an exclusion policy for ROU 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. |
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 ASU sets out the principles for the recognition, measurement, presentation and disclosure of leases for both lessees and lessors. The Company adopted the ASU on January 1, 2019 and elected the package of practical expedients permitted under the transition guidance within the new standard, which allowed the Company to carry forward the historical determination of contracts as leases, to carry forward lease classifications, and to not reassess initial direct costs for historical lease arrangements. The adoption of this ASU resulted in the initial recognition of operating lease ROU 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. This change also resulted in a cumulative-effect adjustment to beginning retained earnings of $399,000 , net of tax, 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, ASU 2019-04 and ASU 2019-05, was originally issued in June 2016. Commonly referred to as CECL, this ASU requires financial assets measured at amortized cost basis to be presented at the net amount expected to be collected. For public business entities, this ASU 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. 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. 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. 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. In late 2017 the CECL steering committee selected a vendor to assist the Company in the adoption of a model, completed the implementation discovery sessions, and selected an appropriate methodology. During 2019, the Company compiled historical loan data and finalized data queries from the core system for current periods. Management is finalizing assumptions used in the model and running and analyzing CECL ALLL outcomes. The Company anticipates providing an estimated ALLL under the CECL model in January 2020. FASB ASU 2017-04 , Goodwill (Topic 350) , was issued in January 2017 and eliminates Step 2 from the goodwill impairment test. The ASU 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 ASU 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 ASU 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 ASU will have a material impact on its Condensed Consolidated Financial Statements. |
Business Combinations Business
Business Combinations Business Acquisitions, Pro Forma Information (Tables) | 9 Months Ended |
Sep. 30, 2018 | |
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items] | |
Business Acquisition, Pro Forma Information [Table Text Block] | The following table presents certain pro forma information, for illustrative purposes only, for the three and nine months ended September 30, 2018 as if the Premier and Puget Mergers had occurred on January 1, 2017. The estimated pro forma information combines the historical results of Premier Commercial and Puget Sound with the Company's consolidated historical results and includes certain adjustments reflecting the estimated impact of certain fair value adjustments for the respective periods. The pro forma information is not indicative of what would have occurred had the Premier and Puget Mergers occurred on January 1, 2017. In particular, the pro forma information does not consider any changes to the provision for loan losses resulting from recorded loans at fair value. Additionally, Heritage expected to achieve further operating savings and other business synergies, including interest income growth, as a result of the Premier and Puget Mergers which are not reflected in the pro forma amounts in the following table. As a result, actual amounts will differ from the pro forma information presented. Three Months Ended September 30, 2018 Nine Months Ended September 30, 2018 (Dollars in thousands, except per share amounts) Net interest income $ 49,942 $ 143,740 Net Income 18,950 50,225 Basic earnings per share $ 0.51 $ 1.36 Dilutive earnings per share $ 0.51 $ 1.35 |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 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: September 30, 2019 Amortized Cost Gross Unrealized Gains Gross Unrealized Losses Fair Value (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 112,045 $ 813 $ (7 ) $ 112,851 Municipal securities 122,733 4,582 — 127,315 Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 343,909 3,394 (626 ) 346,677 Commercial 324,153 7,621 (444 ) 331,330 Corporate obligations 23,873 309 (26 ) 24,156 Other asset-backed securities 23,517 280 (24 ) 23,773 Total $ 950,230 $ 16,999 $ (1,127 ) $ 966,102 (1) Issued and guaranteed by U.S. Government-sponsored agencies. December 31, 2018 Amortized Gross Gross Fair (In thousands) 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 September 30, 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 $ 37,675 $ 37,742 Due after one year through five years 194,742 197,144 Due after five years through ten years 275,903 282,814 Due after ten years 441,910 448,402 Total $ 950,230 $ 966,102 |
Schedule of fair value and unrealized losses of available for sale investment securities | The following tables show 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 September 30, 2019 and December 31, 2018 : September 30, 2019 Less than 12 Months 12 Months or Longer Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 6,993 $ (7 ) $ — $ — $ 6,993 $ (7 ) Mortgage-backed securities and collateralized mortgage obligations (1) : Residential 46,175 (210 ) 47,952 (416 ) 94,127 (626 ) Commercial 29,842 (72 ) 46,210 (372 ) 76,052 (444 ) Corporate obligations — — 1,974 (26 ) 1,974 (26 ) Other asset-backed securities 3,453 (11 ) 1,704 (13 ) 5,157 (24 ) Total $ 86,463 $ (300 ) $ 97,840 $ (827 ) $ 184,303 $ (1,127 ) (1) Issued and guaranteed by U.S. Government-sponsored agencies. December 31, 2018 Less than 12 Months 12 Months or Longer Total Fair Unrealized Fair Unrealized Fair Unrealized (In thousands) 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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Gross realized gains $ 281 $ 145 $ 557 $ 267 Gross realized losses — (63 ) (228 ) (132 ) Net realized gains $ 281 $ 82 $ 329 $ 135 |
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 September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Amortized Cost Fair Value Amortized Cost Fair Value (In thousands) Washington and Oregon state public deposits $ 188,219 $ 191,336 $ 199,026 $ 196,786 Securities sold under agreement to repurchase 40,481 40,830 48,173 47,407 Other securities pledged 20,559 21,128 20,778 20,482 Total $ 249,259 $ 253,294 $ 267,977 $ 264,675 |
Loans Receivable (Tables)
Loans Receivable (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Loans and Leases Receivable Disclosure [Abstract] | |
Financing Receivable Credit Quality Indicators [Table Text Block] | Loans receivable at September 30, 2019 and December 31, 2018 consisted of the following portfolio segments and classes: September 30, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 853,995 $ 853,606 Owner-occupied commercial real estate 787,591 779,814 Non-owner occupied commercial real estate 1,316,992 1,304,463 Total commercial business 2,958,578 2,937,883 One-to-four family residential 121,174 101,763 Real estate construction and land development: One-to-four family residential 98,034 102,730 Five or more family residential and commercial properties 147,686 112,730 Total real estate construction and land development 245,720 215,460 Consumer 403,485 395,545 Gross loans receivable 3,728,957 3,650,651 Net deferred loan costs 2,386 3,509 Loans receivable, net 3,731,343 3,654,160 Allowance for loan losses (36,518 ) (35,042 ) Total loans receivable, net $ 3,694,825 $ 3,619,118 The following tables present the balance of loans receivable by credit quality indicator as of September 30, 2019 and December 31, 2018 : September 30, 2019 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 777,165 $ 20,310 $ 56,520 $ — $ 853,995 Owner-occupied commercial real estate 753,386 20,498 13,707 — 787,591 Non-owner occupied commercial real estate 1,293,780 9,989 13,223 — 1,316,992 Total commercial business 2,824,331 50,797 83,450 — 2,958,578 One-to-four family residential 119,914 — 1,260 — 121,174 Real estate construction and land development: One-to-four family residential 96,300 — 1,734 — 98,034 Five or more family residential and commercial properties 147,177 509 — — 147,686 Total real estate construction and land development 243,477 509 1,734 — 245,720 Consumer 399,203 — 3,758 524 403,485 Gross loans receivable $ 3,586,925 $ 51,306 $ 90,202 $ 524 $ 3,728,957 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 |
Past Due Financing Receivables [Table Text Block] | The balances of past due loans, segregated by segments and classes of loans, as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 832 $ 3,562 $ 4,394 $ 847,202 $ 851,596 Owner-occupied commercial real estate 158 757 915 779,880 780,795 Non-owner occupied commercial real estate 2,971 2,029 5,000 1,305,725 1,310,725 Total commercial business 3,961 6,348 10,309 2,932,807 2,943,116 One-to-four family residential — — — 117,669 117,669 Real estate construction and land development: One-to-four family residential — 560 560 97,474 98,034 Five or more family residential and commercial properties — — — 147,686 147,686 Total real estate construction and land development — 560 560 245,160 245,720 Consumer 1,667 — 1,667 399,717 401,384 Past due gross loans receivable, excluding PCI loans 5,628 6,908 12,536 3,695,353 3,707,889 PCI loans 934 155 1,089 19,979 21,068 Gross loans receivable $ 6,562 $ 7,063 $ 13,625 $ 3,715,332 $ 3,728,957 December 31, 2018 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 2,711 $ 2,281 $ 4,992 $ 845,181 $ 850,173 Owner-occupied commercial real estate 513 408 921 771,677 772,598 Non-owner occupied commercial real estate 3,412 1,103 4,515 1,292,888 1,297,403 Total commercial business 6,636 3,792 10,428 2,909,746 2,920,174 One-to-four family residential 227 — 227 98,221 98,448 Real estate construction and land development: One-to-four family residential 665 234 899 101,451 102,350 Five or more family residential and commercial properties — — — 112,688 112,688 Total real estate construction and land development 665 234 899 214,139 215,038 Consumer 2,559 — 2,559 389,525 392,084 Past due gross loans receivable, excluding PCI loans 10,087 4,026 14,113 3,611,631 3,625,744 PCI loans 2,271 550 2,821 22,086 24,907 Gross loans receivable $ 12,358 $ 4,576 $ 16,934 $ 3,633,717 $ 3,650,651 |
Schedule of Impaired Purchased Loans Accretable Yield [Table Text Block] | The following table summarizes the accretable yield on the PCI loans for the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 8,572 $ 10,060 $ 9,493 $ 11,224 Accretion (423 ) (644 ) (1,517 ) (2,011 ) Disposal and other (94 ) (164 ) (744 ) (2,136 ) Reclassification from nonaccretable difference — 1,198 823 3,373 Balance at the end of the period $ 8,055 $ 10,450 $ 8,055 $ 10,450 |
Financing Receivables [Text Block] | 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 September 30, 2019 and December 31, 2018 consisted of the following portfolio segments and classes: September 30, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 853,995 $ 853,606 Owner-occupied commercial real estate 787,591 779,814 Non-owner occupied commercial real estate 1,316,992 1,304,463 Total commercial business 2,958,578 2,937,883 One-to-four family residential 121,174 101,763 Real estate construction and land development: One-to-four family residential 98,034 102,730 Five or more family residential and commercial properties 147,686 112,730 Total real estate construction and land development 245,720 215,460 Consumer 403,485 395,545 Gross loans receivable 3,728,957 3,650,651 Net deferred loan costs 2,386 3,509 Loans receivable, net 3,731,343 3,654,160 Allowance for loan losses (36,518 ) (35,042 ) Total loans receivable, net $ 3,694,825 $ 3,619,118 (b) Concentrations of Credit As of September 30, 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, 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 September 30, 2019 and December 31, 2018 : September 30, 2019 Pass OAEM Substandard Doubtful/Loss Total (In thousands) Commercial business: Commercial and industrial $ 777,165 $ 20,310 $ 56,520 $ — $ 853,995 Owner-occupied commercial real estate 753,386 20,498 13,707 — 787,591 Non-owner occupied commercial real estate 1,293,780 9,989 13,223 — 1,316,992 Total commercial business 2,824,331 50,797 83,450 — 2,958,578 One-to-four family residential 119,914 — 1,260 — 121,174 Real estate construction and land development: One-to-four family residential 96,300 — 1,734 — 98,034 Five or more family residential and commercial properties 147,177 509 — — 147,686 Total real estate construction and land development 243,477 509 1,734 — 245,720 Consumer 399,203 — 3,758 524 403,485 Gross loans receivable $ 3,586,925 $ 51,306 $ 90,202 $ 524 $ 3,728,957 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 September 30, 2019 and December 31, 2018 were $85.3 million and $101.3 million , respectively. (d) Nonaccrual Loans Nonaccrual loans, segregated by segments and classes of loans, were as follows as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 30,014 $ 6,639 Owner-occupied commercial real estate 4,176 4,212 Non-owner occupied commercial real estate 6,552 1,713 Total commercial business 40,742 12,564 One-to-four family residential 19 71 Real estate construction and land development: One-to-four family residential 560 899 Consumer 190 169 Nonaccrual loans $ 41,511 $ 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 or pool's expected cash flow even if the loan or pool is not performing under its contractual terms, except for non-pooled PCI loans which are no longer accreting loan discounts established at acquisition. (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. PCI loans are included in the past due loans table below solely to reconcile to total Gross Loans Receivable. The balances of past due loans, segregated by segments and classes of loans, as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 832 $ 3,562 $ 4,394 $ 847,202 $ 851,596 Owner-occupied commercial real estate 158 757 915 779,880 780,795 Non-owner occupied commercial real estate 2,971 2,029 5,000 1,305,725 1,310,725 Total commercial business 3,961 6,348 10,309 2,932,807 2,943,116 One-to-four family residential — — — 117,669 117,669 Real estate construction and land development: One-to-four family residential — 560 560 97,474 98,034 Five or more family residential and commercial properties — — — 147,686 147,686 Total real estate construction and land development — 560 560 245,160 245,720 Consumer 1,667 — 1,667 399,717 401,384 Past due gross loans receivable, excluding PCI loans 5,628 6,908 12,536 3,695,353 3,707,889 PCI loans 934 155 1,089 19,979 21,068 Gross loans receivable $ 6,562 $ 7,063 $ 13,625 $ 3,715,332 $ 3,728,957 December 31, 2018 30-89 Days 90 Days or Greater Total Past Due Current Total (In thousands) Commercial business: Commercial and industrial $ 2,711 $ 2,281 $ 4,992 $ 845,181 $ 850,173 Owner-occupied commercial real estate 513 408 921 771,677 772,598 Non-owner occupied commercial real estate 3,412 1,103 4,515 1,292,888 1,297,403 Total commercial business 6,636 3,792 10,428 2,909,746 2,920,174 One-to-four family residential 227 — 227 98,221 98,448 Real estate construction and land development: One-to-four family residential 665 234 899 101,451 102,350 Five or more family residential and commercial properties — — — 112,688 112,688 Total real estate construction and land development 665 234 899 214,139 215,038 Consumer 2,559 — 2,559 389,525 392,084 Past due gross loans receivable, excluding PCI loans 10,087 4,026 14,113 3,611,631 3,625,744 PCI loans 2,271 550 2,821 22,086 24,907 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 September 30, 2019 or December 31, 2018 , excluding PCI loans. (f) Impaired loans Impaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance. The balances of impaired loans as of September 30, 2019 and December 31, 2018 are set forth in the following tables: September 30, 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 $ 26,099 $ 16,338 $ 42,437 $ 43,845 $ 1,879 Owner-occupied commercial real estate 3,031 2,503 5,534 5,925 453 Non-owner occupied commercial real estate 5,394 4,518 9,912 9,997 316 Total commercial business 34,524 23,359 57,883 59,767 2,648 One-to-four family residential — 220 220 227 57 Real estate construction and land development: One-to-four family residential 560 — 560 638 — Consumer — 575 575 589 148 Total $ 35,084 $ 24,154 $ 59,238 $ 61,221 $ 2,853 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 — 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 and nine months ended September 30, 2019 and 2018 are set forth in the following table: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Commercial business: Commercial and industrial $ 35,022 $ 16,252 $ 28,929 $ 15,258 Owner-occupied commercial real estate 5,918 12,533 5,927 12,687 Non-owner occupied commercial real estate 9,793 10,265 8,108 10,311 Total commercial business 50,733 39,050 42,964 38,256 One-to-four family residential 222 288 249 292 Real estate construction and land development: One-to-four family residential 676 1,080 794 1,139 Five or more family residential and commercial properties — — — 161 Total real estate construction and land development 676 1,080 794 1,300 Consumer 596 396 579 403 Total $ 52,227 $ 40,814 $ 44,586 $ 40,251 For the three and nine months ended September 30, 2019 and 2018 , no interest income was recognized subsequent to a loan’s classification as nonaccrual. For the three and nine months ended September 30, 2019 , the Bank recorded $282,000 and $980,000 , respectively, of interest income related to performing TDR loans. For the three and nine months ended September 30, 2018 , the Bank recorded $361,000 and $1.0 million , 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 September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 Performing TDR loans Nonaccrual TDR loans Performing TDR loans Nonaccrual TDR loans (In thousands) TDR loans $ 19,416 $ 17,529 $ 22,736 $ 6,943 Allowance for loan losses on TDR loans 1,850 494 2,257 658 The unfunded commitment to borrowers related to TDR loans was $2.0 million and $943,000 at September 30, 2019 and December 31, 2018 , respectively. Loans that were modified as TDR loans during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Recorded Investment (1) Number of Recorded Investment (1) (Dollars in thousands) Commercial business: Commercial and industrial 15 $ 5,266 11 $ 2,352 Owner-occupied commercial real estate 2 1,214 2 1,081 Non-owner occupied commercial real estate 3 2,597 2 2,776 Total commercial business 20 9,077 15 6,209 Consumer 3 26 1 25 Total loans modified as TDR loans 23 $ 9,103 16 $ 6,234 Nine Months Ended September 30, 2019 2018 Number of (2) Recorded Investment (1,2) Number of Contracts (2) Recorded Investment (1,2) (Dollars in thousands) Commercial business: Commercial and industrial 33 $ 22,414 22 $ 4,445 Owner-occupied commercial real estate 3 1,612 3 1,639 Non-owner occupied commercial real estate 4 5,568 3 2,976 Total commercial business 40 29,594 28 9,060 Real estate construction and land development: One-to-four family residential 1 560 2 767 Consumer 10 155 8 133 Total TDR loans 51 $ 30,309 38 $ 9,960 (1) 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 and nine months ended September 30, 2019 and 2018 . (2) 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 nine months ended September 30, 2019 and 2018 . The tables above include seven and 17 loans, respectively, for the three and nine months ended September 30, 2019 and nine and 15 loans, respectively, for the three and nine months ended September 30, 2018 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-reported 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 September 30, 2019 for loans that were modified as TDR loans during the nine months ended September 30, 2019 was $1.8 million . Loans that were modified during the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Contracts Recorded Investments Number of Recorded Investments (Dollars in thousands) Commercial business: Commercial and industrial 4 $ 2,056 2 $ 1,742 Non-owner occupied commercial real estate 1 2,971 — — Total commercial business 5 5,027 2 1,742 Total 5 $ 5,027 2 $ 1,742 Nine Months Ended September 30, 2019 2018 Number of Contracts (1) Recorded Investments (1) Number of (1) Recorded Investments (1) (Dollars in thousands) Commercial business: Commercial and industrial 9 $ 3,230 3 $ 2,020 Owner-occupied commercial real estate 2 1,101 1 69 Non-owner occupied commercial real estate 2 3,541 — — Total commercial business 13 7,872 4 2,089 Real estate construction and land development: One-to-four family residential 1 560 2 767 Total 14 $ 8,432 6 $ 2,856 (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 nine months ended September 30, 2019 and 2018 . During the three and nine months ended September 30, 2019 , three and 12 TDR loans, respectively, defaulted because each was past its modified maturity date, and the borrower has not subsequently repaid the credits. The Bank has chosen not to extend further the maturity date on these loans. In addition, during both the three and nine months ended September 30, 2019 , two TDR loans defaulted because the borrowers were more than 90 days delinquent on their scheduled loan payments. The Bank had a specific valuation allowance of $412,000 at September 30, 2019 related to these TDR loans which defaulted during the nine months ended September 30, 2019 . During the three and nine months ended September 30, 2018 , two and three TDR loans, respectively, defaulted because each was past its modified maturity date, and the borrower has not subsequently repaid the credits. The Bank had chosen not to extend the maturities on these loans. In addition, during the nine months ended September 30, 2018 , three TDR loans defaulted because the borrowers were more than 90 days delinquent on their scheduled loan payments. The Bank had a specific valuation allowance of $320,000 at September 30, 2018 related to TDR loans which defaulted during the nine months ended September 30, 2018 . (h) Purchased Credit Impaired Loans The following table reflects the outstanding principal balance and recorded investment of the PCI loans at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Outstanding Principal Recorded Investment Outstanding Principal Recorded Investment (In thousands) Commercial business: Commercial and industrial $ 4,541 $ 2,399 $ 6,319 $ 3,433 Owner-occupied commercial real estate 6,879 6,796 7,830 7,215 Non-owner occupied commercial real estate 7,887 6,267 8,685 7,059 Total commercial business 19,307 15,462 22,834 17,707 One-to-four family residential 3,011 3,505 3,169 3,315 Real estate construction and land development: One-to-four family residential — — 67 380 Five or more family residential and commercial properties — — 188 43 Total real estate construction and land development — — 255 423 Consumer 825 2,101 2,203 3,462 Gross PCI loans $ 23,143 $ 21,068 $ 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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 8,572 $ 10,060 $ 9,493 $ 11,224 Accretion (423 ) (644 ) (1,517 ) (2,011 ) Disposal and other (94 ) (164 ) (744 ) (2,136 ) Reclassification from nonaccretable difference — 1,198 823 3,373 Balance at the end of the period $ 8,055 $ 10,450 $ 8,055 $ 10,450 |
Impaired Financing Receivables [Table Text Block] | Impaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance. The balances of impaired loans as of September 30, 2019 and December 31, 2018 are set forth in the following tables: September 30, 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 $ 26,099 $ 16,338 $ 42,437 $ 43,845 $ 1,879 Owner-occupied commercial real estate 3,031 2,503 5,534 5,925 453 Non-owner occupied commercial real estate 5,394 4,518 9,912 9,997 316 Total commercial business 34,524 23,359 57,883 59,767 2,648 One-to-four family residential — 220 220 227 57 Real estate construction and land development: One-to-four family residential 560 — 560 638 — Consumer — 575 575 589 148 Total $ 35,084 $ 24,154 $ 59,238 $ 61,221 $ 2,853 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 — Consumer — 527 527 538 139 Total $ 7,590 $ 28,849 $ 36,439 $ 39,233 $ 4,170 |
Schedule of nonaccrual loans | Nonaccrual loans, segregated by segments and classes of loans, were as follows as of September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 (In thousands) Commercial business: Commercial and industrial $ 30,014 $ 6,639 Owner-occupied commercial real estate 4,176 4,212 Non-owner occupied commercial real estate 6,552 1,713 Total commercial business 40,742 12,564 One-to-four family residential 19 71 Real estate construction and land development: One-to-four family residential 560 899 Consumer 190 169 Nonaccrual loans $ 41,511 $ 13,703 |
Schedule of average recorded investment impaired loans including restructuring loans | The average recorded investment of impaired loans for the three and nine months ended September 30, 2019 and 2018 are set forth in the following table: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Commercial business: Commercial and industrial $ 35,022 $ 16,252 $ 28,929 $ 15,258 Owner-occupied commercial real estate 5,918 12,533 5,927 12,687 Non-owner occupied commercial real estate 9,793 10,265 8,108 10,311 Total commercial business 50,733 39,050 42,964 38,256 One-to-four family residential 222 288 249 292 Real estate construction and land development: One-to-four family residential 676 1,080 794 1,139 Five or more family residential and commercial properties — — — 161 Total real estate construction and land development 676 1,080 794 1,300 Consumer 596 396 579 403 Total $ 52,227 $ 40,814 $ 44,586 $ 40,251 |
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 September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 Performing TDR loans Nonaccrual TDR loans Performing TDR loans Nonaccrual TDR loans (In thousands) TDR loans $ 19,416 $ 17,529 $ 22,736 $ 6,943 Allowance for loan losses on TDR loans 1,850 494 2,257 658 |
Troubled debt restructurings on financing receivables | Loans that were modified as TDR loans during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Recorded Investment (1) Number of Recorded Investment (1) (Dollars in thousands) Commercial business: Commercial and industrial 15 $ 5,266 11 $ 2,352 Owner-occupied commercial real estate 2 1,214 2 1,081 Non-owner occupied commercial real estate 3 2,597 2 2,776 Total commercial business 20 9,077 15 6,209 Consumer 3 26 1 25 Total loans modified as TDR loans 23 $ 9,103 16 $ 6,234 Nine Months Ended September 30, 2019 2018 Number of (2) Recorded Investment (1,2) Number of Contracts (2) Recorded Investment (1,2) (Dollars in thousands) Commercial business: Commercial and industrial 33 $ 22,414 22 $ 4,445 Owner-occupied commercial real estate 3 1,612 3 1,639 Non-owner occupied commercial real estate 4 5,568 3 2,976 Total commercial business 40 29,594 28 9,060 Real estate construction and land development: One-to-four family residential 1 560 2 767 Consumer 10 155 8 133 Total TDR loans 51 $ 30,309 38 $ 9,960 (1) 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 and nine months ended September 30, 2019 and 2018 . (2) 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 nine months ended September 30, 2019 and 2018 . |
Troubled debt restructuring loans, subsequently defaulted | Loans that were modified during the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2019 and 2018 are set forth in the following tables: Three Months Ended September 30, 2019 2018 Number of Contracts Recorded Investments Number of Recorded Investments (Dollars in thousands) Commercial business: Commercial and industrial 4 $ 2,056 2 $ 1,742 Non-owner occupied commercial real estate 1 2,971 — — Total commercial business 5 5,027 2 1,742 Total 5 $ 5,027 2 $ 1,742 Nine Months Ended September 30, 2019 2018 Number of Contracts (1) Recorded Investments (1) Number of (1) Recorded Investments (1) (Dollars in thousands) Commercial business: Commercial and industrial 9 $ 3,230 3 $ 2,020 Owner-occupied commercial real estate 2 1,101 1 69 Non-owner occupied commercial real estate 2 3,541 — — Total commercial business 13 7,872 4 2,089 Real estate construction and land development: One-to-four family residential 1 560 2 767 Total 14 $ 8,432 6 $ 2,856 |
Purchased impaired loans | The following table reflects the outstanding principal balance and recorded investment of the PCI loans at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Outstanding Principal Recorded Investment Outstanding Principal Recorded Investment (In thousands) Commercial business: Commercial and industrial $ 4,541 $ 2,399 $ 6,319 $ 3,433 Owner-occupied commercial real estate 6,879 6,796 7,830 7,215 Non-owner occupied commercial real estate 7,887 6,267 8,685 7,059 Total commercial business 19,307 15,462 22,834 17,707 One-to-four family residential 3,011 3,505 3,169 3,315 Real estate construction and land development: One-to-four family residential — — 67 380 Five or more family residential and commercial properties — — 188 43 Total real estate construction and land development — — 255 423 Consumer 825 2,101 2,203 3,462 Gross PCI loans $ 23,143 $ 21,068 $ 28,461 $ 24,907 |
Allowance for Loan Losses (Tabl
Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2018 : Three Months Ended September 30, 2018 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 10,188 $ (151 ) $ 119 $ 122 $ 10,278 Owner-occupied commercial real estate 5,246 — 2 181 5,429 Non-owner occupied commercial real estate 7,726 (149 ) — 71 7,648 Total commercial business 23,160 (300 ) 121 374 23,355 One-to-four family residential 1,121 (15 ) — 50 1,156 Real estate construction and land development: One-to-four family residential 1,016 — 3 156 1,175 Five or more family residential and commercial properties 1,044 — — (15 ) 1,029 Total real estate construction and land development 2,060 — 3 141 2,204 Consumer 6,305 (530 ) 159 474 6,408 Unallocated 1,326 — — 26 1,352 Total $ 33,972 $ (845 ) $ 283 $ 1,065 $ 34,475 Nine Months Ended September 30, 2018 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 9,910 $ (773 ) $ 683 $ 458 $ 10,278 Owner-occupied commercial real estate 3,992 (1 ) 7 1,431 5,429 Non-owner occupied commercial real estate 8,097 (149 ) — (300 ) 7,648 Total commercial business 21,999 (923 ) 690 1,589 23,355 One-to-four family residential 1,056 (30 ) — 130 1,156 Real estate construction and land development: One-to-four family residential 862 — 5 308 1,175 Five or more family residential and commercial properties 1,190 — — (161 ) 1,029 Total real estate construction and land development 2,052 — 5 147 2,204 Consumer 6,081 (1,709 ) 389 1,647 6,408 Unallocated 898 — — 454 1,352 Total $ 32,086 $ (2,662 ) $ 1,084 $ 3,967 $ 34,475 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 three and nine months ended September 30, 2019 : Three Months Ended September 30, 2019 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 11,993 $ (306 ) $ 43 $ 449 $ 12,179 Owner-occupied commercial real estate 5,066 — 46 (656 ) 4,456 Non-owner occupied commercial real estate 8,064 — 292 (525 ) 7,831 Total commercial business 25,123 (306 ) 381 (732 ) 24,466 One-to-four family residential 1,345 (15 ) — 81 1,411 Real estate construction and land development: One-to-four family residential 1,471 — 3 (133 ) 1,341 Five or more family residential and commercial properties 1,060 — — 229 1,289 Total real estate construction and land development 2,531 — 3 96 2,630 Consumer 6,540 (501 ) 127 621 6,787 Unallocated 824 — — 400 1,224 Total $ 36,363 $ (822 ) $ 511 $ 466 $ 36,518 Nine Months Ended September 30, 2019 Balance at Beginning of Period Charge-offs Recoveries Provision for Loan Losses Balance at End of Period (In thousands) Commercial business: Commercial and industrial $ 11,343 $ (1,183 ) $ 112 $ 1,907 $ 12,179 Owner-occupied commercial real estate 4,898 — 49 (491 ) 4,456 Non-owner occupied commercial real estate 7,470 — 441 (80 ) 7,831 Total commercial business 23,711 (1,183 ) 602 1,336 24,466 One-to-four family residential 1,203 (45 ) — 253 1,411 Real estate construction and land development: One-to-four family residential 1,240 — 628 (527 ) 1,341 Five or more family residential and commercial properties 954 — — 335 1,289 Total real estate construction and land development 2,194 — 628 (192 ) 2,630 Consumer 6,581 (1,653 ) 374 1,485 6,787 Unallocated 1,353 — — (129 ) 1,224 Total $ 35,042 $ (2,881 ) $ 1,604 $ 2,753 $ 36,518 The following table details the allowance for loan losses disaggregated on the basis of the Company's impairment method as of September 30, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans (1) Total Allowance for Loan Losses (In thousands) Commercial business: Commercial and industrial $ 1,879 $ 9,666 $ 634 $ 12,179 Owner-occupied commercial real estate 453 3,447 556 4,456 Non-owner occupied commercial real estate 316 7,015 500 7,831 Total commercial business 2,648 20,128 1,690 24,466 One-to-four family residential 57 1,260 94 1,411 Real estate construction and land development: One-to-four family residential — 1,172 169 1,341 Five or more family residential and commercial properties — 1,211 78 1,289 Total real estate construction and land development — 2,383 247 2,630 Consumer 148 6,269 370 6,787 Unallocated — 1,224 — 1,224 Total $ 2,853 $ 31,264 $ 2,401 $ 36,518 |
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 September 30, 2019 : Loans Individually Evaluated for Impairment Loans Collectively Evaluated for Impairment PCI Loans (1) Total Gross Loans Receivable (In thousands) Commercial business: Commercial and industrial $ 42,437 $ 809,159 $ 2,399 $ 853,995 Owner-occupied commercial real estate 5,534 775,261 6,796 787,591 Non-owner occupied commercial real estate 9,912 1,300,813 6,267 1,316,992 Total commercial business 57,883 2,885,233 15,462 2,958,578 One-to-four family residential 220 117,449 3,505 121,174 Real estate construction and land development: One-to-four family residential 560 97,474 — 98,034 Five or more family residential and commercial properties — 147,686 — 147,686 Total real estate construction and land development 560 245,160 — 245,720 Consumer 575 400,809 2,101 403,485 Total $ 59,238 $ 3,648,651 $ 21,068 $ 3,728,957 |
Other Real Estate Owned (Tables
Other Real Estate Owned (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Real Estate [Abstract] | |
Changes in other real estate owned | Changes in other real estate owned during the three and nine months ended September 30, 2019 and 2018 were as follows: Three Months Ended Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 1,224 $ 434 $ 1,983 $ — Additions — — — 434 Additions from acquisitions — 1,796 — 1,796 Proceeds from dispositions (435 ) (198 ) (864 ) (198 ) Gain (loss) on sales, net 52 — (227 ) — Valuation adjustment — — (51 ) — Balance at the end of the period $ 841 $ 2,032 $ 841 $ 2,032 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 240,939 $ 187,549 $ 240,939 $ 119,029 Additions as a result of acquisitions (1) — 53,288 — 121,808 Balance at the end of the period $ 240,939 $ 240,837 $ 240,939 $ 240,837 (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 September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance at the beginning of the period $ 18,563 $ 15,767 $ 20,614 $ 6,088 Additions as a result of acquisitions (1) — 7,075 — 18,345 Amortization (975 ) (1,114 ) (3,026 ) (2,705 ) Balance at the end of the period $ 17,588 $ 21,728 $ 17,588 $ 21,728 (1) See Note (2) Business Combinations |
Junior Subordinated Debentures
Junior Subordinated Debentures (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, Nine Months Ended 2019 2018 2019 2018 Weighted average rate (1) 6.43 % 6.49 % 6.72 % 6.17 % (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. |
Securities Sold Under Agreeme_2
Securities Sold Under Agreement to Repurchase (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Disclosure of Repurchase Agreements [Abstract] | |
Repurchase agreement obligations by class of collateral pledged | The following table presents the Company's securities sold under agreement to repurchase obligations by class of collateral pledged at the dates indicated: September 30, 2019 December 31, 2018 (In thousands) U.S. Treasury and U.S. Government-sponsored agencies $ 6,912 $ 4,878 Mortgage-backed securities and collateralized mortgage obligations: (1) Residential 10,254 9,335 Commercial 8,717 17,274 Total securities sold under agreement to repurchase $ 25,883 $ 31,487 (1) Issued and guaranteed by U.S. Government-sponsored agencies. |
Other Borrowings (Tables)
Other Borrowings (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Schedule of FHLB advances | The following table sets forth the details of FHLB advances during the three and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) FHLB Advances: Average balance during the period $ 3,755 $ 20,892 $ 15,909 $ 45,194 Maximum month-end balance during the period $ — $ 50,500 $ 90,700 $ 154,500 Weighted average rate during the period 1.16 % 2.22 % 2.56 % 1.98 % |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018 : September 30, 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) $ 181,360 $ 12,026 $ 171,798 $ 5,095 Interest rate swap liability (1) 181,360 (12,026 ) 171,798 (5,095 ) (1) The estimated fair value of derivatives with customers was $12,026 and $(1,643) as of September 30, 2019 and December 31, 2018 , respectively. The estimated fair value of derivatives with third parties was $(12,026) and $1,643 as of September 30, 2019 and December 31, 2018 , respectively. |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2019 and 2018 : Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Net income: Net income $ 17,895 $ 15,504 $ 50,431 $ 36,448 Dividends and undistributed earnings allocated to participating securities (10 ) (48 ) (48 ) (252 ) Net income allocated to common shareholders $ 17,885 $ 15,456 $ 50,383 $ 36,196 Basic: Weighted average common shares outstanding 36,764,810 36,839,615 36,846,884 34,744,788 Restricted stock awards (21,948 ) (67,669 ) (34,336 ) (94,340 ) Total basic weighted average common shares outstanding 36,742,862 36,771,946 36,812,548 34,650,448 Diluted: Basic weighted average common shares outstanding 36,742,862 36,771,946 36,812,548 34,650,448 Effect of potentially dilutive common shares (1) 133,686 191,298 160,476 170,154 Total diluted weighted average common shares outstanding 36,876,548 36,963,244 36,973,024 34,820,602 (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 nine months ended September 30, 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 April 24, 2019 $0.18 May 8, 2019 May 22, 2019 July 24, 2019 $0.19 August 8, 2019 August 22, 2019 * Denotes a special dividend. |
Schedule of repurchased shares | The following table provides total repurchased shares for the periods indicated: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 Repurchased shares to pay withholding taxes (1) 405 368 28,434 53,188 Stock repurchase to pay withholding taxes average share price $ 27.67 $ 36.34 $ 30.83 $ 31.99 (1) During the nine months ended September 30, 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) | 9 Months Ended |
Sep. 30, 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 and nine months ended September 30, 2019 and 2018 are as follows: Three Months Ended September 30, Nine Months Ended 2019 2018 2019 2018 (In thousands) Balance of AOCI at the beginning of period $ 9,754 $ (11,306 ) $ (7,455 ) $ (1,298 ) Other comprehensive income (loss) before reclassification 2,993 (3,319 ) 20,240 (13,193 ) Amounts reclassified from AOCI for gain on sale of investment securities included in net income (222 ) (65 ) (260 ) (106 ) Net current period other comprehensive income (loss) 2,771 (3,384 ) 19,980 (13,299 ) Effects of implementation of accounting change related to equity investments, net — — — (93 ) Balance of AOCI at the end of period $ 12,525 $ (14,690 ) $ 12,525 $ (14,690 ) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 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 September 30, 2019 and December 31, 2018 : September 30, 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 $ 112,851 $ 16,090 $ 96,761 $ — Municipal securities 127,315 — 127,315 — Mortgage-backed securities and collateralized mortgage obligations: Residential 346,677 — 346,677 — Commercial 331,330 — 331,330 — Corporate obligations 24,156 — 24,156 — Other asset-backed securities 23,773 — 23,773 — Total investment securities available for sale 966,102 16,090 950,012 — Equity Security 147 147 — — Derivative assets - interest rate swaps 12,026 — 12,026 — Liabilities Derivative liabilities - interest rate swaps $ 12,026 $ — $ 12,026 $ — 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 September 30, 2019 and December 31, 2018 and the net losses recorded in earnings during three and nine months ended September 30, 2019 and 2018 : Basis (1) Fair Value at September 30, 2019 Total Level 1 Level 2 Level 3 Net Losses Net Losses (In thousands) Impaired loans: Commercial and industrial $ 2,503 $ 1,872 $ — $ — $ 1,872 $ 48 $ 134 Total assets measured at fair value on a nonrecurring basis $ 2,503 $ 1,872 $ — $ — $ 1,872 $ 48 $ 134 (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 September 30, 2018 Net Losses Recorded in Earnings During the Six Months Ended September 30, 2018 (In thousands) Impaired loans: Commercial business: Commercial and industrial $ 117 $ 107 $ — $ — $ 107 $ 11 $ 11 Non-owner occupied commercial real estate 1,378 1,102 — — 1,102 149 149 Total commercial business 1,495 1,209 — — 1,209 160 160 Consumer 9 7 — — 7 — — Total assets measured at fair value on a nonrecurring basis $ 1,504 $ 1,216 $ — $ — $ 1,216 $ 160 $ 160 (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 September 30, 2019 and December 31, 2018 : September 30, 2019 Fair Value Valuation Technique(s) Unobservable Input(s) Range of Inputs; Weighted Average (Dollars in thousands) Impaired loans $ 1,872 Market approach Adjustment for differences between the comparable sales 240.9% - (16.0%); 62.4% 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 September 30, 2019 and December 31, 2018 : September 30, 2019 Carrying Value Fair Value Fair Value Measurements Using: Level 1 Level 2 Level 3 (In thousands) Financial Assets: Cash and cash equivalents $ 236,968 $ 236,968 $ 236,968 $ — $ — Investment securities available for sale 966,102 966,102 16,090 950,012 — Federal Home Loan Bank stock 6,377 N/A N/A N/A N/A Loans held for sale 5,211 5,375 — — 5,375 Total loans receivable, net 3,694,825 3,758,359 — — 3,758,359 Accrued interest receivable 14,722 14,722 104 3,650 10,968 Derivative assets - interest rate swaps 12,026 12,026 — 12,026 — Equity security 147 147 147 — — Financial Liabilities: Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts $ 4,037,947 $ 4,037,947 $ 4,037,947 $ — $ — Certificate of deposit accounts 524,310 529,925 — 529,925 — Securities sold under agreement to repurchase 25,883 25,883 25,883 — — Junior subordinated debentures 20,522 19,750 — — 19,750 Accrued interest payable 212 212 96 76 40 Derivative liabilities - interest rate swaps 12,026 12,026 — 12,026 — 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 — Federal Home Loan Bank stock 6,076 N/A N/A N/A N/A Loans held for sale 1,555 1,605 — 1,605 — Loans receivable, net of allowance for loan losses 3,619,118 3,614,348 — — 3,614,348 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 — 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) | 9 Months Ended |
Sep. 30, 2019 | |
Leases [Abstract] | |
Summary of net lease cost and other related information | The table below summarizes the net lease cost recognized during the periods presented: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (In thousands) Operating Lease Cost $ 1,231 $ 3,718 Variable Lease Cost 193 588 Sublease Income (24 ) (47 ) Total net lease cost $ 1,400 $ 4,259 The tables below summarize other information related to the Company's operating leases during the periods presented: Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 (In thousands) Cash paid for amounts included in the measurement of lease liabilities $ 1,220 $ 3,621 ROU assets obtained in exchange for lease liabilities, excluding adoption impact $ 363 $ 703 September 30, Weighted average remaining lease term of operating leases, in years 8.13 Weighted average discount rate of operating leases 3.31 % |
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 September 30, 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 $ 1,224 2020 4,652 2021 4,228 2022 3,806 2023 3,816 Thereafter 14,279 Total lease payments 32,005 Implied interest (4,082 ) Right of use liability $ 27,923 |
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) | Sep. 30, 2019branch |
Heritage Bank | |
Business Description and Basis of Presentation [Line Items] | |
Number of branches operating | 62 |
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 ($) | Sep. 30, 2019 | Jan. 01, 2019 | Jan. 01, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Capitalization threshold policy, contractual lease payments (or less) | $ 25,000 | ||
Right of use assets | 26,600,000 | ||
Lease liabilities | $ 27,900,000 | ||
Effects of implementation of accounting change related to operating leases | $ 399,000 | $ 399,000 | |
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 ($) | Jul. 02, 2018 | Jan. 16, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 |
Business Acquisition [Line Items] | ||||||
Business Acquisition, Pro Forma Revenue | $ 49,942,000 | $ 143,740,000 | ||||
Goodwill | $ 0 | 53,288,000 | $ 0 | 121,808,000 | ||
Business Acquisition, Pro Forma Net Income (Loss) | $ 18,950,000 | $ 50,225,000 | ||||
Business Acquisition, Pro Forma Earnings Per Share, Basic | $ 510 | $ 1,360 | ||||
Business Acquisition, Pro Forma Earnings Per Share, Diluted | $ 510 | $ 1,350 | ||||
Puget Sound | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 68,500,000 | |||||
Acquisition-related costs | 0 | $ 67,000 | 75,000 | $ 5,100,000 | ||
Premier Commercial | ||||||
Business Acquisition [Line Items] | ||||||
Goodwill | $ 53,400,000 | |||||
Acquisition-related costs | $ 0 | $ 3,300,000 | $ 57,000 | $ 4,000,000 |
Investment Securities - Amortiz
Investment Securities - Amortized Cost, Gross Unrealized Gains and Losses and Fair Values (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Investment Holdings [Line Items] | |||||
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale | $ 0 | $ 0 | $ 0 | $ 0 | |
Amortized Cost | 950,230,000 | 950,230,000 | $ 985,541,000 | ||
Gross Unrealized Gains | 16,999,000 | 16,999,000 | 3,285,000 | ||
Gross Unrealized Losses | (1,127,000) | (1,127,000) | (12,731,000) | ||
Fair Value | 966,102,000 | 966,102,000 | 976,095,000 | ||
U.S. Treasury and U.S. Government-sponsored agencies | |||||
Investment Holdings [Line Items] | |||||
Amortized Cost | 112,045,000 | 112,045,000 | 101,595,000 | ||
Gross Unrealized Gains | 813,000 | 813,000 | 155,000 | ||
Gross Unrealized Losses | (7,000) | (7,000) | (147,000) | ||
Fair Value | 112,851,000 | 112,851,000 | 101,603,000 | ||
Municipal securities | |||||
Investment Holdings [Line Items] | |||||
Amortized Cost | 122,733,000 | 122,733,000 | 158,461,000 | ||
Gross Unrealized Gains | 4,582,000 | 4,582,000 | 1,209,000 | ||
Gross Unrealized Losses | 0 | 0 | (806,000) | ||
Fair Value | 127,315,000 | 127,315,000 | 158,864,000 | ||
Residential | |||||
Investment Holdings [Line Items] | |||||
Amortized Cost | 343,909,000 | 343,909,000 | 337,295,000 | ||
Gross Unrealized Gains | 3,394,000 | 3,394,000 | 426,000 | ||
Gross Unrealized Losses | (626,000) | (626,000) | (6,119,000) | ||
Fair Value | 346,677,000 | 346,677,000 | 331,602,000 | ||
Commercial | |||||
Investment Holdings [Line Items] | |||||
Amortized Cost | 324,153,000 | 324,153,000 | 338,250,000 | ||
Gross Unrealized Gains | 7,621,000 | 7,621,000 | 1,035,000 | ||
Gross Unrealized Losses | (444,000) | (444,000) | (5,524,000) | ||
Fair Value | 331,330,000 | 331,330,000 | 333,761,000 | ||
Corporate obligations | |||||
Investment Holdings [Line Items] | |||||
Amortized Cost | 23,873,000 | 23,873,000 | 25,662,000 | ||
Gross Unrealized Gains | 309,000 | 309,000 | 36,000 | ||
Gross Unrealized Losses | (26,000) | (26,000) | (135,000) | ||
Fair Value | 24,156,000 | 24,156,000 | 25,563,000 | ||
Other asset-backed securities | |||||
Investment Holdings [Line Items] | |||||
Amortized Cost | 23,517,000 | 23,517,000 | 24,278,000 | ||
Gross Unrealized Gains | 280,000 | 280,000 | 424,000 | ||
Gross Unrealized Losses | (24,000) | (24,000) | 0 | ||
Fair Value | $ 23,773,000 | $ 23,773,000 | $ 24,702,000 |
Investment Securities - Textual
Investment Securities - Textual (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Investments, Debt and Equity Securities [Abstract] | |||||
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale | $ 0 | $ 0 | $ 0 | $ 0 | |
Securities classified as trading | $ 0 | $ 0 | $ 0 |
Investment Securities - Contrac
Investment Securities - Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Amortized Cost | ||
Due in one year or less | $ 37,675 | |
Due after one year through five years | 194,742 | |
Due after five years through ten years | 275,903 | |
Due after ten years | 441,910 | |
Amortized Cost | 950,230 | $ 985,541 |
Fair Value | ||
Due in one year or less | 37,742 | |
Due after one year through five years | 197,144 | |
Due after five years through ten years | 282,814 | |
Due after ten years | 448,402 | |
Fair Value | $ 966,102 | $ 976,095 |
Investment Securities - Unreali
Investment Securities - Unrealized Losses (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Investment Holdings [Line Items] | |||||
Other-than-temporary Impairment Loss, Debt Securities, Available-for-sale | $ 0 | $ 0 | $ 0 | $ 0 | |
Fair Value | |||||
Less than 12 Months | 86,463,000 | 86,463,000 | $ 202,036,000 | ||
12 Months or Longer | 97,840,000 | 97,840,000 | 432,404,000 | ||
Total | 184,303,000 | 184,303,000 | 634,440,000 | ||
Unrealized Losses | |||||
Less than 12 Months | (300,000) | (300,000) | (823,000) | ||
12 Months or Longer | (827,000) | (827,000) | (11,908,000) | ||
Total | (1,127,000) | (1,127,000) | (12,731,000) | ||
U.S. Treasury and U.S. Government-sponsored agencies | |||||
Fair Value | |||||
Less than 12 Months | 6,993,000 | 6,993,000 | 46,992,000 | ||
12 Months or Longer | 0 | 0 | 7,350,000 | ||
Total | 6,993,000 | 6,993,000 | 54,342,000 | ||
Unrealized Losses | |||||
Less than 12 Months | (7,000) | (7,000) | (58,000) | ||
12 Months or Longer | 0 | 0 | (89,000) | ||
Total | (7,000) | (7,000) | (147,000) | ||
Municipal securities | |||||
Fair Value | |||||
Less than 12 Months | 31,157,000 | ||||
12 Months or Longer | 38,792,000 | ||||
Total | 69,949,000 | ||||
Unrealized Losses | |||||
Less than 12 Months | (159,000) | ||||
12 Months or Longer | (647,000) | ||||
Total | (806,000) | ||||
Residential | |||||
Fair Value | |||||
Less than 12 Months | 46,175,000 | 46,175,000 | 66,620,000 | ||
12 Months or Longer | 47,952,000 | 47,952,000 | 193,726,000 | ||
Total | 94,127,000 | 94,127,000 | 260,346,000 | ||
Unrealized Losses | |||||
Less than 12 Months | (210,000) | (210,000) | (247,000) | ||
12 Months or Longer | (416,000) | (416,000) | (5,872,000) | ||
Total | (626,000) | (626,000) | (6,119,000) | ||
Commercial | |||||
Fair Value | |||||
Less than 12 Months | 29,842,000 | 29,842,000 | 43,531,000 | ||
12 Months or Longer | 46,210,000 | 46,210,000 | 190,585,000 | ||
Total | 76,052,000 | 76,052,000 | 234,116,000 | ||
Unrealized Losses | |||||
Less than 12 Months | (72,000) | (72,000) | (272,000) | ||
12 Months or Longer | (372,000) | (372,000) | (5,252,000) | ||
Total | (444,000) | (444,000) | (5,524,000) | ||
Corporate obligations | |||||
Fair Value | |||||
Less than 12 Months | 0 | 0 | 13,736,000 | ||
12 Months or Longer | 1,974,000 | 1,974,000 | 1,951,000 | ||
Total | 1,974,000 | 1,974,000 | 15,687,000 | ||
Unrealized Losses | |||||
Less than 12 Months | 0 | 0 | (87,000) | ||
12 Months or Longer | (26,000) | (26,000) | (48,000) | ||
Total | (26,000) | (26,000) | $ (135,000) | ||
Other asset-backed securities | |||||
Fair Value | |||||
Less than 12 Months | 3,453,000 | 3,453,000 | |||
12 Months or Longer | 1,704,000 | 1,704,000 | |||
Total | 5,157,000 | 5,157,000 | |||
Unrealized Losses | |||||
Less than 12 Months | (11,000) | (11,000) | |||
12 Months or Longer | (13,000) | (13,000) | |||
Total | $ (24,000) | $ (24,000) |
Investment Securities - Realize
Investment Securities - Realized Gains and Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Gross realized gains | $ 145 | $ 267 | ||
Gross realized losses | (63) | (132) | ||
Net realized gains | $ 281 | $ 82 | $ 329 | $ 135 |
Investment Securities - Amort_2
Investment Securities - Amortized Cost and Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | $ 249,259 | $ 267,977 |
Fair Value | 253,294 | 264,675 |
Other securities pledged | ||
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | 20,559 | 20,778 |
Fair Value | 21,128 | 20,482 |
Washington and Oregon State to Secure Public Deposits [Member] | ||
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | 188,219 | 199,026 |
Fair Value | 191,336 | 196,786 |
Repurchase Agreements [Member] | ||
Scheduled of amortized cost and fair value of securities pledged as collateral | ||
Amortized Cost | 40,481 | 48,173 |
Fair Value | $ 40,830 | $ 47,407 |
Loans Receivable - Loan Origina
Loans Receivable - Loan Origination/Risk Management (Details) $ in Thousands | 9 Months Ended | |||||
Sep. 30, 2019USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Dec. 31, 2017USD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Number of loan segments | segment | 4 | |||||
Gross loans receivable | $ 3,728,957 | $ 3,650,651 | ||||
Net deferred loan costs | 2,386 | 3,509 | ||||
Loans receivable, net | 3,731,343 | 3,654,160 | ||||
Allowance for loan losses | (36,518) | $ (36,363) | (35,042) | $ (34,475) | $ (33,972) | $ (32,086) |
Total loans receivable, net | 3,694,825 | 3,619,118 | ||||
Commercial Business | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 2,958,578 | 2,937,883 | ||||
Allowance for loan losses | (24,466) | (25,123) | (23,711) | (23,355) | (23,160) | (21,999) |
Commercial Business | Commercial and Industrial | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 853,995 | 853,606 | ||||
Allowance for loan losses | (12,179) | (11,993) | (11,343) | (10,278) | (10,188) | (9,910) |
Commercial Business | Owner-Occupied Commercial Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 787,591 | 779,814 | ||||
Allowance for loan losses | (4,456) | (5,066) | (4,898) | (5,429) | (5,246) | (3,992) |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 1,316,992 | 1,304,463 | ||||
Allowance for loan losses | (7,831) | (8,064) | (7,470) | (7,648) | (7,726) | (8,097) |
One-to-four Family Residential | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 121,174 | 101,763 | ||||
Allowance for loan losses | (1,411) | (1,345) | (1,203) | (1,156) | (1,121) | (1,056) |
Real Estate Construction and Land Development | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 245,720 | 215,460 | ||||
Allowance for loan losses | (2,630) | (2,531) | (2,194) | (2,204) | (2,060) | (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 | 98,034 | 102,730 | ||||
Allowance for loan losses | (1,341) | (1,471) | (1,240) | (1,175) | (1,016) | (862) |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 147,686 | 112,730 | ||||
Allowance for loan losses | (1,289) | (1,060) | (954) | (1,029) | (1,044) | (1,190) |
Consumer | ||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||
Gross loans receivable | 403,485 | 395,545 | ||||
Allowance for loan losses | $ (6,787) | $ (6,540) | $ (6,581) | $ (6,408) | $ (6,305) | $ (6,081) |
Loans Receivable - Concentratio
Loans Receivable - Concentrations of Credit (Details) | 9 Months Ended | 12 Months Ended |
Sep. 30, 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 | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | $ 3,586,925 | $ 3,518,105 |
OAEM | 51,306 | 53,640 |
Substandard | 90,202 | 78,382 |
Doubtful/Loss | 524 | 524 |
Total | 3,728,957 | 3,650,651 |
Potential problem loans receivable | 85,300 | 101,300 |
Commercial Business | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 2,824,331 | 2,812,699 |
OAEM | 50,797 | 53,330 |
Substandard | 83,450 | 71,854 |
Doubtful/Loss | 0 | 0 |
Total | 2,958,578 | 2,937,883 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 777,165 | 788,395 |
OAEM | 20,310 | 16,168 |
Substandard | 56,520 | 49,043 |
Doubtful/Loss | 0 | 0 |
Total | 853,995 | 853,606 |
Commercial Business | Owner-Occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 753,386 | 741,227 |
OAEM | 20,498 | 27,724 |
Substandard | 13,707 | 10,863 |
Doubtful/Loss | 0 | 0 |
Total | 787,591 | 779,814 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 1,293,780 | 1,283,077 |
OAEM | 9,989 | 9,438 |
Substandard | 13,223 | 11,948 |
Doubtful/Loss | 0 | 0 |
Total | 1,316,992 | 1,304,463 |
One-to-four Family Residential | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 119,914 | 100,401 |
OAEM | 0 | 0 |
Substandard | 1,260 | 1,362 |
Doubtful/Loss | 0 | 0 |
Total | 121,174 | 101,763 |
Real Estate Construction and Land Development | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 243,477 | 214,197 |
OAEM | 509 | 310 |
Substandard | 1,734 | 953 |
Doubtful/Loss | 0 | 0 |
Total | 245,720 | 215,460 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 96,300 | 101,519 |
OAEM | 0 | 258 |
Substandard | 1,734 | 953 |
Doubtful/Loss | 0 | 0 |
Total | 98,034 | 102,730 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 147,177 | 112,678 |
OAEM | 509 | 52 |
Substandard | 0 | 0 |
Doubtful/Loss | 0 | 0 |
Total | 147,686 | 112,730 |
Consumer | ||
Financing Receivable, Recorded Investment [Line Items] | ||
Pass | 399,203 | 390,808 |
OAEM | 0 | 0 |
Substandard | 3,758 | 4,213 |
Doubtful/Loss | 524 | 524 |
Total | $ 403,485 | $ 395,545 |
Loans Receivable - Nonaccrual L
Loans Receivable - Nonaccrual Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | $ 41,511 | $ 13,703 |
Commercial Business | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 40,742 | 12,564 |
Commercial Business | Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 30,014 | 6,639 |
Commercial Business | Owner-Occupied Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 4,176 | 4,212 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 6,552 | 1,713 |
One-to-four Family Residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 19 | 71 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | 560 | 899 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Gross nonaccrual loans | $ 190 | $ 169 |
Loans Receivable - Past Due Loa
Loans Receivable - Past Due Loans (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 13,625,000 | $ 16,934,000 |
Current | 3,715,332,000 | 3,633,717,000 |
Total | 3,728,957,000 | 3,650,651,000 |
90 days or more and still accruing | 0 | 0 |
PCI Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,089,000 | 2,821,000 |
Current | 19,979,000 | 22,086,000 |
Total | 21,068,000 | 24,907,000 |
30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 6,562,000 | 12,358,000 |
30-89 Days | PCI Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 934,000 | 2,271,000 |
90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 7,063,000 | 4,576,000 |
90 Days or Greater | PCI Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 155,000 | 550,000 |
Commercial Business | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 10,309,000 | 10,428,000 |
Current | 2,932,807,000 | 2,909,746,000 |
Total | 2,943,116,000 | 2,920,174,000 |
Commercial Business | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,961,000 | 6,636,000 |
Commercial Business | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 6,348,000 | 3,792,000 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 4,394,000 | 4,992,000 |
Current | 847,202,000 | 845,181,000 |
Total | 851,596,000 | 850,173,000 |
Commercial Business | Commercial and Industrial | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 832,000 | 2,711,000 |
Commercial Business | Commercial and Industrial | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 3,562,000 | 2,281,000 |
Commercial Business | Owner-Occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 915,000 | 921,000 |
Current | 779,880,000 | 771,677,000 |
Total | 780,795,000 | 772,598,000 |
Commercial Business | Owner-Occupied Commercial Real Estate | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 158,000 | 513,000 |
Commercial Business | Owner-Occupied Commercial Real Estate | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 757,000 | 408,000 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,000,000 | 4,515,000 |
Current | 1,305,725,000 | 1,292,888,000 |
Total | 1,310,725,000 | 1,297,403,000 |
Commercial Business | Non-owner Occupied Commercial Real Estate | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 2,971,000 | 3,412,000 |
Commercial Business | Non-owner Occupied Commercial Real Estate | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 2,029,000 | 1,103,000 |
One-to-four Family Residential | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 227,000 |
Current | 117,669,000 | 98,221,000 |
Total | 117,669,000 | 98,448,000 |
One-to-four Family Residential | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 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 | 560,000 | 899,000 |
Current | 245,160,000 | 214,139,000 |
Total | 245,720,000 | 215,038,000 |
Real Estate Construction and Land Development | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 665,000 |
Real Estate Construction and Land Development | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 560,000 | 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 | 560,000 | 899,000 |
Current | 97,474,000 | 101,451,000 |
Total | 98,034,000 | 102,350,000 |
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 | 0 | 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 | 560,000 | 234,000 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Current | 147,686,000 | 112,688,000 |
Total | 147,686,000 | 112,688,000 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | 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 [Member] | 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 | 1,667,000 | 2,559,000 |
Current | 399,717,000 | 389,525,000 |
Total | 401,384,000 | 392,084,000 |
Consumer | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 1,667,000 | 2,559,000 |
Consumer | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 0 | 0 |
Loans Receivable Excluding PCI Loans | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 12,536,000 | 14,113,000 |
Current | 3,695,353,000 | 3,611,631,000 |
Total | 3,707,889,000 | 3,625,744,000 |
Loans Receivable Excluding PCI Loans | 30-89 Days | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | 5,628,000 | 10,087,000 |
Loans Receivable Excluding PCI Loans | 90 Days or Greater | ||
Financing Receivable, Recorded Investment, Past Due [Line Items] | ||
Total Past Due | $ 6,908,000 | $ 4,026,000 |
Loans Receivable - Impaired Loa
Loans Receivable - Impaired Loans (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | $ 35,084,000 | $ 35,084,000 | $ 7,590,000 | ||
Recorded Investment With Specific Valuation Allowance | 24,154,000 | 24,154,000 | 28,849,000 | ||
Total Recorded Investment | 59,238,000 | 59,238,000 | 36,439,000 | ||
Unpaid Contractual Principal Balance | 61,221,000 | 61,221,000 | 39,233,000 | ||
Related Specific Valuation Allowance | 2,853,000 | 2,853,000 | 4,170,000 | ||
Average recorded investment on impaired loans | 52,227,000 | $ 40,814,000 | 44,586,000 | $ 40,251,000 | |
Nonaccrual | |||||
Financing Receivable, Impaired [Line Items] | |||||
Interest income recognized on impaired loans | 0 | 0 | 0 | 0 | |
Restructured Performing | |||||
Financing Receivable, Impaired [Line Items] | |||||
Interest income recognized on impaired loans | 282,000 | 361,000 | 980,000 | 1,000,000 | |
Commercial Business | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | 34,524,000 | 34,524,000 | 6,691,000 | ||
Recorded Investment With Specific Valuation Allowance | 23,359,000 | 23,359,000 | 28,043,000 | ||
Total Recorded Investment | 57,883,000 | 57,883,000 | 34,734,000 | ||
Unpaid Contractual Principal Balance | 59,767,000 | 59,767,000 | 36,740,000 | ||
Related Specific Valuation Allowance | 2,648,000 | 2,648,000 | 3,955,000 | ||
Average recorded investment on impaired loans | 50,733,000 | 39,050,000 | 42,964,000 | 38,256,000 | |
Commercial Business | Commercial and Industrial | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | 26,099,000 | 26,099,000 | 2,523,000 | ||
Recorded Investment With Specific Valuation Allowance | 16,338,000 | 16,338,000 | 20,119,000 | ||
Total Recorded Investment | 42,437,000 | 42,437,000 | 22,642,000 | ||
Unpaid Contractual Principal Balance | 43,845,000 | 43,845,000 | 24,176,000 | ||
Related Specific Valuation Allowance | 1,879,000 | 1,879,000 | 2,607,000 | ||
Average recorded investment on impaired loans | 35,022,000 | 16,252,000 | 28,929,000 | 15,258,000 | |
Commercial Business | Owner-Occupied Commercial Real Estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | 3,031,000 | 3,031,000 | 816,000 | ||
Recorded Investment With Specific Valuation Allowance | 2,503,000 | 2,503,000 | 5,000,000 | ||
Total Recorded Investment | 5,534,000 | 5,534,000 | 5,816,000 | ||
Unpaid Contractual Principal Balance | 5,925,000 | 5,925,000 | 6,150,000 | ||
Related Specific Valuation Allowance | 453,000 | 453,000 | 1,142,000 | ||
Average recorded investment on impaired loans | 5,918,000 | 12,533,000 | 5,927,000 | 12,687,000 | |
Commercial Business | Non-owner Occupied Commercial Real Estate | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | 5,394,000 | 5,394,000 | 3,352,000 | ||
Recorded Investment With Specific Valuation Allowance | 4,518,000 | 4,518,000 | 2,924,000 | ||
Total Recorded Investment | 9,912,000 | 9,912,000 | 6,276,000 | ||
Unpaid Contractual Principal Balance | 9,997,000 | 9,997,000 | 6,414,000 | ||
Related Specific Valuation Allowance | 316,000 | 316,000 | 206,000 | ||
Average recorded investment on impaired loans | 9,793,000 | 10,265,000 | 8,108,000 | 10,311,000 | |
One-to-four Family Residential | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | 0 | 0 | 0 | ||
Recorded Investment With Specific Valuation Allowance | 220,000 | 220,000 | 279,000 | ||
Total Recorded Investment | 220,000 | 220,000 | 279,000 | ||
Unpaid Contractual Principal Balance | 227,000 | 227,000 | 293,000 | ||
Related Specific Valuation Allowance | 57,000 | 57,000 | 76,000 | ||
Average recorded investment on impaired loans | 222,000 | 288,000 | 249,000 | 292,000 | |
Real Estate Construction and Land Development | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total Recorded Investment | 560,000 | 560,000 | |||
Average recorded investment on impaired loans | 676,000 | 1,080,000 | 794,000 | 1,300,000 | |
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 | 560,000 | 560,000 | 899,000 | ||
Recorded Investment With Specific Valuation Allowance | 0 | 0 | 0 | ||
Total Recorded Investment | 560,000 | 560,000 | 899,000 | ||
Unpaid Contractual Principal Balance | 638,000 | 638,000 | 1,662,000 | ||
Related Specific Valuation Allowance | 0 | 0 | 0 | ||
Average recorded investment on impaired loans | 676,000 | 1,080,000 | 794,000 | 1,139,000 | |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | |||||
Financing Receivable, Impaired [Line Items] | |||||
Total Recorded Investment | 0 | 0 | |||
Average recorded investment on impaired loans | 0 | 0 | 0 | 161,000 | |
Consumer | |||||
Financing Receivable, Impaired [Line Items] | |||||
Recorded Investment With No Specific Valuation Allowance | 0 | 0 | 0 | ||
Recorded Investment With Specific Valuation Allowance | 575,000 | 575,000 | 527,000 | ||
Total Recorded Investment | 575,000 | 575,000 | 527,000 | ||
Unpaid Contractual Principal Balance | 589,000 | 589,000 | 538,000 | ||
Related Specific Valuation Allowance | 148,000 | 148,000 | $ 139,000 | ||
Average recorded investment on impaired loans | $ 596,000 | $ 396,000 | $ 579,000 | $ 403,000 |
Loans Receivable - TDR Loans, R
Loans Receivable - TDR Loans, Recorded Investment and Allowance (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Receivables [Abstract] | ||
Performing TDRs, TDR loans | $ 19,416 | $ 22,736 |
Nonaccrual TDRs, TDR loans | 17,529 | 6,943 |
Performing TDRs, Allowance for loan losses on TDR loans | 1,850 | 2,257 |
Nonaccrual TDRs, Allowance for loan losses on TDR loans | 494 | 658 |
Unfunded commitments related to credits classified as TDRs | $ 2,000 | $ 943 |
Loans Receivable - Modified TDR
Loans Receivable - Modified TDRs (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($)contract | Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($)contract | Dec. 31, 2018USD ($) | |
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 7 | 9 | 17 | 15 | |
Related specific valuation allowance | $ | $ 2,853 | $ 2,853 | $ 4,170 | ||
Commercial Business | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | 2,648 | 2,648 | 3,955 | ||
Commercial Business | Commercial and Industrial | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | 1,879 | 1,879 | 2,607 | ||
Commercial Business | Owner-Occupied Commercial Real Estate | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | 453 | 453 | 1,142 | ||
Commercial Business | Non-owner Occupied Commercial Real Estate | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | 316 | 316 | 206 | ||
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 | 0 | ||
Consumer | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | $ 148 | $ 148 | $ 139 | ||
Troubled Debt Restructured Loans | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 23 | 16 | 51 | 38 | |
Outstanding Principal Balance | $ | $ 9,103 | $ 6,234 | $ 30,309 | $ 9,960 | |
Number of contracts modified | 5 | 2 | 14 | 6 | |
Troubled Debt Restructured Loans | Finance Receivable Modified Subsequent Default | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | $ 412 | $ 320 | $ 412 | $ 320 | |
Troubled Debt Restructured Loans | Past Modified Maturity Date | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of contracts modified | 3 | 2 | 12 | 3 | |
Troubled Debt Restructured Loans | 90 Days or Greater | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of contracts modified | 2 | 2 | 3 | ||
Troubled Debt Restructured Loans | Modified During the Quarter | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Related specific valuation allowance | $ | $ 1,800 | $ 1,800 | |||
Troubled Debt Restructured Loans | Commercial Business | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 20 | 15 | 40 | 28 | |
Outstanding Principal Balance | $ | $ 9,077 | $ 6,209 | $ 29,594 | $ 9,060 | |
Number of contracts modified | 5 | 2 | 13 | 4 | |
Troubled Debt Restructured Loans | Commercial Business | Commercial and Industrial | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 15 | 11 | 33 | 22 | |
Outstanding Principal Balance | $ | $ 5,266 | $ 2,352 | $ 22,414 | $ 4,445 | |
Number of contracts modified | 4 | 2 | 9 | 3 | |
Troubled Debt Restructured Loans | Commercial Business | Commercial and Industrial | 90 Days or Greater | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of contracts modified | 1 | ||||
Troubled Debt Restructured Loans | Commercial Business | Owner-Occupied Commercial Real Estate | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 2 | 2 | 3 | 3 | |
Outstanding Principal Balance | $ | $ 1,214 | $ 1,081 | $ 1,612 | $ 1,639 | |
Number of contracts modified | 2 | ||||
Troubled Debt Restructured Loans | Commercial Business | Non-owner Occupied Commercial Real Estate | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 3 | 2 | 4 | 3 | |
Outstanding Principal Balance | $ | $ 2,597 | $ 2,776 | $ 5,568 | $ 2,976 | |
Number of contracts modified | 1 | 0 | 2 | 0 | |
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 | 1 | 2 | |||
Outstanding Principal Balance | $ | $ 560 | $ 767 | |||
Number of contracts modified | 1 | 2 | |||
Troubled Debt Restructured Loans | Consumer | |||||
Loans Modified as Troubled Debt Restructurings [Abstract] | |||||
Number of Contracts | 3 | 1 | 10 | 8 | |
Outstanding Principal Balance | $ | $ 26 | $ 25 | $ 155 | $ 133 |
Loans Receivable - TDRs Subsequ
Loans Receivable - TDRs Subsequently Defaulted (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($)contract | Sep. 30, 2019USD ($)contract | Sep. 30, 2018USD ($)contract | Dec. 31, 2018USD ($) | |
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 7 | 9 | 17 | 15 | |
Related Specific Valuation Allowance | $ | $ 2,853 | $ 2,853 | $ 4,170 | ||
Commercial Business | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | 2,648 | 2,648 | 3,955 | ||
Commercial Business | Commercial and Industrial | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | 1,879 | 1,879 | 2,607 | ||
Commercial Business | Owner-Occupied Commercial Real Estate | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | 453 | 453 | 1,142 | ||
Commercial Business | Non-owner Occupied Commercial Real Estate | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | 316 | 316 | 206 | ||
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | $ 0 | $ 0 | $ 0 | ||
Troubled Debt Restructured Loans | |||||
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 23 | 16 | 51 | 38 | |
Number of Contracts | 5 | 2 | 14 | 6 | |
Recorded Investments | $ | $ 5,027 | $ 1,742 | $ 8,432 | $ 2,856 | |
Troubled Debt Restructured Loans | Commercial Business | |||||
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 20 | 15 | 40 | 28 | |
Number of Contracts | 5 | 2 | 13 | 4 | |
Recorded Investments | $ | $ 5,027 | $ 1,742 | $ 7,872 | $ 2,089 | |
Troubled Debt Restructured Loans | Commercial Business | Commercial and Industrial | |||||
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 15 | 11 | 33 | 22 | |
Number of Contracts | 4 | 2 | 9 | 3 | |
Recorded Investments | $ | $ 2,056 | $ 1,742 | $ 3,230 | $ 2,020 | |
Troubled Debt Restructured Loans | Commercial Business | Owner-Occupied Commercial Real Estate | |||||
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 2 | 2 | 3 | 3 | |
Number of Contracts | 2 | ||||
Recorded Investments | $ | $ 1,101 | ||||
Troubled Debt Restructured Loans | Commercial Business | Non-owner Occupied Commercial Real Estate | |||||
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 3 | 2 | 4 | 3 | |
Number of Contracts | 1 | 0 | 2 | 0 | |
Recorded Investments | $ | $ 2,971 | $ 0 | $ 3,541 | $ 0 | |
Troubled Debt Restructured Loans | Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | |||||
Financing Receivable, Modifications [Line Items] | |||||
Financing Receivable, Modifications, Number of Contracts | 1 | 2 | |||
Number of Contracts | 1 | 2 | |||
Recorded Investments | $ | $ 560 | $ 767 | |||
Finance Receivable Modified Subsequent Default | Troubled Debt Restructured Loans | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | $ 412 | $ 320 | $ 412 | $ 320 | |
Past Modified Maturity Date [Member] | Troubled Debt Restructured Loans | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of Contracts | 3 | 2 | 12 | 3 | |
90 Days or Greater | Troubled Debt Restructured Loans | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of Contracts | 2 | 2 | 3 | ||
90 Days or Greater | Troubled Debt Restructured Loans | Commercial Business | Commercial and Industrial | |||||
Financing Receivable, Modifications [Line Items] | |||||
Number of Contracts | 1 | ||||
Modified during the quarter [Member] | Troubled Debt Restructured Loans | |||||
Financing Receivable, Modifications [Line Items] | |||||
Related Specific Valuation Allowance | $ | $ 1,800 | $ 1,800 |
Loans Receivable - Purchased Cr
Loans Receivable - Purchased Credit Impaired Loans (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | $ 23,143 | $ 28,461 |
Recorded Investment | 21,068 | 24,907 |
Commercial Business | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 19,307 | 22,834 |
Recorded Investment | 15,462 | 17,707 |
Commercial Business | Commercial and Industrial | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 4,541 | 6,319 |
Recorded Investment | 2,399 | 3,433 |
Commercial Business | Owner-Occupied Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 6,879 | 7,830 |
Recorded Investment | 6,796 | 7,215 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 7,887 | 8,685 |
Recorded Investment | 6,267 | 7,059 |
One-to-four Family Residential | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 3,011 | 3,169 |
Recorded Investment | 3,505 | 3,315 |
Real Estate Construction and Land Development | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 0 | 255 |
Recorded Investment | 0 | 423 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 0 | 67 |
Recorded Investment | 0 | 380 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 0 | 188 |
Recorded Investment | 0 | 43 |
Consumer | ||
Financing Receivable, Impaired [Line Items] | ||
Outstanding Principal | 825 | 2,203 |
Recorded Investment | $ 2,101 | $ 3,462 |
Loans Receivable - Change in Ac
Loans Receivable - Change in Accretable Yield (Details) - PCI Loans - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 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 | $ 8,572 | $ 10,060 | $ 9,493 | $ 11,224 |
Accretion | (423) | (644) | (1,517) | (2,011) |
Disposal and other | (94) | (164) | (744) | (2,136) |
Reclassification from nonaccretable difference | 0 | 1,198 | 823 | 3,373 |
Balance at the end of the period | $ 8,055 | $ 10,450 | $ 8,055 | $ 10,450 |
Allowance for Loan Losses - Sum
Allowance for Loan Losses - Summary of Changes in Loan Allowance (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | $ 36,363 | $ 33,972 | $ 35,042 | $ 32,086 |
Charge-offs | (822) | (845) | (2,881) | (2,662) |
Recoveries | 511 | 283 | 1,604 | 1,084 |
Provision for Loan Losses | 466 | 1,065 | 2,753 | 3,967 |
Balance at End of Period | 36,518 | 34,475 | 36,518 | 34,475 |
Commercial Business | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 25,123 | 23,160 | 23,711 | 21,999 |
Charge-offs | (306) | (300) | (1,183) | (923) |
Recoveries | 381 | 121 | 602 | 690 |
Provision for Loan Losses | (732) | 374 | 1,336 | 1,589 |
Balance at End of Period | 24,466 | 23,355 | 24,466 | 23,355 |
Commercial Business | Commercial and Industrial | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 11,993 | 10,188 | 11,343 | 9,910 |
Charge-offs | (306) | (151) | (1,183) | (773) |
Recoveries | 43 | 119 | 112 | 683 |
Provision for Loan Losses | 449 | 122 | 1,907 | 458 |
Balance at End of Period | 12,179 | 10,278 | 12,179 | 10,278 |
Commercial Business | Owner-Occupied Commercial Real Estate | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 5,066 | 5,246 | 4,898 | 3,992 |
Charge-offs | 0 | 0 | 0 | (1) |
Recoveries | 46 | 2 | 49 | 7 |
Provision for Loan Losses | (656) | 181 | (491) | 1,431 |
Balance at End of Period | 4,456 | 5,429 | 4,456 | 5,429 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 8,064 | 7,726 | 7,470 | 8,097 |
Charge-offs | 0 | (149) | 0 | (149) |
Recoveries | 292 | 0 | 441 | 0 |
Provision for Loan Losses | (525) | 71 | (80) | (300) |
Balance at End of Period | 7,831 | 7,648 | 7,831 | 7,648 |
One-to-four Family Residential | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 1,345 | 1,121 | 1,203 | 1,056 |
Charge-offs | (15) | (15) | (45) | (30) |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Loan Losses | 81 | 50 | 253 | 130 |
Balance at End of Period | 1,411 | 1,156 | 1,411 | 1,156 |
Real Estate Construction and Land Development | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 2,531 | 2,060 | 2,194 | 2,052 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 3 | 3 | 628 | 5 |
Provision for Loan Losses | 96 | 141 | (192) | 147 |
Balance at End of Period | 2,630 | 2,204 | 2,630 | 2,204 |
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 | 1,471 | 1,016 | 1,240 | 862 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 3 | 3 | 628 | 5 |
Provision for Loan Losses | (133) | 156 | (527) | 308 |
Balance at End of Period | 1,341 | 1,175 | 1,341 | 1,175 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 1,060 | 1,044 | 954 | 1,190 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Loan Losses | 229 | (15) | 335 | (161) |
Balance at End of Period | 1,289 | 1,029 | 1,289 | 1,029 |
Consumer | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 6,540 | 6,305 | 6,581 | 6,081 |
Charge-offs | (501) | (530) | (1,653) | |
Recoveries | 127 | 159 | 374 | |
Provision for Loan Losses | 621 | 474 | 1,485 | 1,647 |
Balance at End of Period | 6,787 | 6,408 | 6,787 | 6,408 |
Unallocated | ||||
Schedule of changes in allowance for loan losses | ||||
Balance at Beginning of Period | 824 | 1,326 | 1,353 | 898 |
Charge-offs | 0 | 0 | 0 | 0 |
Recoveries | 0 | 0 | 0 | 0 |
Provision for Loan Losses | 400 | 26 | (129) | 454 |
Balance at End of Period | $ 1,224 | $ 1,352 | $ 1,224 | $ 1,352 |
Allowance for Loan Losses - Act
Allowance for Loan Losses - Activity in Allowance for Losses Disaggregated on Basis of Impairment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Jun. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Dec. 31, 2017 |
Schedule of allowance for loan losses on the basis of impairment method | ||||||
Loans Individually Evaluated for Impairment | $ 2,853 | $ 4,170 | ||||
Loans Collectively Evaluated for Impairment | 31,264 | 27,854 | ||||
PCI Loans | 2,401 | 3,018 | ||||
Total Allowance for Loan Losses | 36,518 | $ 36,363 | 35,042 | $ 34,475 | $ 33,972 | $ 32,086 |
Commercial Business | ||||||
Schedule of allowance for loan losses on the basis of impairment method | ||||||
Loans Individually Evaluated for Impairment | 2,648 | 3,955 | ||||
Loans Collectively Evaluated for Impairment | 20,128 | 17,606 | ||||
PCI Loans | 1,690 | 2,150 | ||||
Total Allowance for Loan Losses | 24,466 | 25,123 | 23,711 | 23,355 | 23,160 | 21,999 |
Commercial Business | Commercial and Industrial | ||||||
Schedule of allowance for loan losses on the basis of impairment method | ||||||
Loans Individually Evaluated for Impairment | 1,879 | 2,607 | ||||
Loans Collectively Evaluated for Impairment | 9,666 | 7,913 | ||||
PCI Loans | 634 | 823 | ||||
Total Allowance for Loan Losses | 12,179 | 11,993 | 11,343 | 10,278 | 10,188 | 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 | 453 | 1,142 | ||||
Loans Collectively Evaluated for Impairment | 3,447 | 3,063 | ||||
PCI Loans | 556 | 693 | ||||
Total Allowance for Loan Losses | 4,456 | 5,066 | 4,898 | 5,429 | 5,246 | 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 | 316 | 206 | ||||
Loans Collectively Evaluated for Impairment | 7,015 | 6,630 | ||||
PCI Loans | 500 | 634 | ||||
Total Allowance for Loan Losses | 7,831 | 8,064 | 7,470 | 7,648 | 7,726 | 8,097 |
One-to-four Family Residential | ||||||
Schedule of allowance for loan losses on the basis of impairment method | ||||||
Loans Individually Evaluated for Impairment | 57 | 76 | ||||
Loans Collectively Evaluated for Impairment | 1,260 | 1,015 | ||||
PCI Loans | 94 | 112 | ||||
Total Allowance for Loan Losses | 1,411 | 1,345 | 1,203 | 1,156 | 1,121 | 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 | 2,383 | 1,915 | ||||
PCI Loans | 247 | 279 | ||||
Total Allowance for Loan Losses | 2,630 | 2,531 | 2,194 | 2,204 | 2,060 | 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 | 1,172 | 1,040 | ||||
PCI Loans | 169 | 200 | ||||
Total Allowance for Loan Losses | 1,341 | 1,471 | 1,240 | 1,175 | 1,016 | 862 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||||||
Schedule of allowance for loan losses on the basis of impairment method | ||||||
Loans Individually Evaluated for Impairment | 0 | 0 | ||||
Loans Collectively Evaluated for Impairment | 1,211 | 875 | ||||
PCI Loans | 78 | 79 | ||||
Total Allowance for Loan Losses | 1,289 | 1,060 | 954 | 1,029 | 1,044 | 1,190 |
Consumer | ||||||
Schedule of allowance for loan losses on the basis of impairment method | ||||||
Loans Individually Evaluated for Impairment | 148 | 139 | ||||
Loans Collectively Evaluated for Impairment | 6,269 | 5,965 | ||||
PCI Loans | 370 | 477 | ||||
Total Allowance for Loan Losses | 6,787 | 6,540 | 6,581 | 6,408 | 6,305 | 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 | 1,224 | 1,353 | ||||
PCI Loans | 0 | 0 | ||||
Total Allowance for Loan Losses | $ 1,224 | $ 824 | $ 1,353 | $ 1,352 | $ 1,326 | $ 898 |
Allowance for Loan Losses - Rec
Allowance for Loan Losses - Recorded Investment Disaggregated on Basis of Impairment (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | $ 36,439 | |
Impaired Financing Receivable, Recorded Investment | $ 59,238 | 36,439 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 3,648,651 | 3,589,305 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 21,068 | 24,907 |
Total Gross Loans Receivable | 3,728,957 | 3,650,651 |
Commercial Business | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 34,734 | |
Impaired Financing Receivable, Recorded Investment | 57,883 | 34,734 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 2,885,233 | 2,885,442 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 15,462 | 17,707 |
Total Gross Loans Receivable | 2,958,578 | 2,937,883 |
Commercial Business | Commercial and Industrial | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 22,642 | |
Impaired Financing Receivable, Recorded Investment | 42,437 | 22,642 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 809,159 | 827,531 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 2,399 | 3,433 |
Total Gross Loans Receivable | 853,995 | 853,606 |
Commercial Business | Owner-Occupied Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 5,816 | |
Impaired Financing Receivable, Recorded Investment | 5,534 | 5,816 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 775,261 | 766,783 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 6,796 | 7,215 |
Total Gross Loans Receivable | 787,591 | 779,814 |
Commercial Business | Non-owner Occupied Commercial Real Estate | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 6,276 | |
Impaired Financing Receivable, Recorded Investment | 9,912 | 6,276 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 1,300,813 | 1,291,128 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 6,267 | 7,059 |
Total Gross Loans Receivable | 1,316,992 | 1,304,463 |
One-to-four Family Residential | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 279 | |
Impaired Financing Receivable, Recorded Investment | 220 | 279 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 117,449 | 98,169 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 3,505 | 3,315 |
Total Gross Loans Receivable | 121,174 | 101,763 |
Real Estate Construction and Land Development | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 899 | |
Impaired Financing Receivable, Recorded Investment | 560 | |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 245,160 | 214,138 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 0 | 423 |
Total Gross Loans Receivable | 245,720 | 215,460 |
Real Estate Construction and Land Development | One-to-four Family Real Estate Construction | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 899 | |
Impaired Financing Receivable, Recorded Investment | 560 | 899 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 97,474 | 101,451 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 0 | 380 |
Total Gross Loans Receivable | 98,034 | 102,730 |
Real Estate Construction and Land Development | Five or More Family Residential and Commercial Properties [Member] | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 0 | |
Impaired Financing Receivable, Recorded Investment | 0 | |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 147,686 | 112,687 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 0 | 43 |
Total Gross Loans Receivable | 147,686 | 112,730 |
Consumer | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Financing Receivable, Individually Evaluated for Impairment | 527 | |
Impaired Financing Receivable, Recorded Investment | 575 | 527 |
Schedule of loan receivables on the basis of impairment method | ||
Loans Collectively Evaluated for Impairment | 400,809 | 391,556 |
Certain Loans Acquired In Transfer Not Accounted For As Debt Securities Carrying Amount | 2,101 | 3,462 |
Total Gross Loans Receivable | $ 403,485 | $ 395,545 |
Other Real Estate Owned (Detail
Other Real Estate Owned (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Real Estate [Abstract] | ||||
Other real estate owned resulting from foreclosure and repossession of assets | $ 0 | $ 0 | ||
Mortgage loans in process of foreclosure | 0 | 0 | ||
Changes in other real estate owned | ||||
Balance at the beginning of the period | 1,224,000 | $ 434,000 | 1,983,000 | $ 0 |
Additions | 0 | 0 | 0 | 434,000 |
Noncash or Part Noncash Acquisition Other Real Estate Owned | 0 | 1,796,000 | 0 | 1,796,000 |
Proceeds from dispositions | (435,000) | (198,000) | (864,000) | (198,000) |
Gain (loss) on sales, net | 52,000 | 0 | (227,000) | 0 |
Valuation adjustment | 0 | 0 | (51,000) | 0 |
Balance at the end of the period | $ 841,000 | $ 2,032,000 | $ 841,000 | $ 2,032,000 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets - Change in Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill [Roll Forward] | ||||
Balance at the beginning of the period | $ 240,939 | $ 187,549 | $ 240,939 | $ 119,029 |
Additions as a result of acquisitions | 0 | 53,288 | 0 | 121,808 |
Balance at the end of the period | $ 240,939 | $ 240,837 | $ 240,939 | $ 240,837 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets - Other Intangible Assets, Textual (Details) - Core Deposits | 9 Months Ended |
Sep. 30, 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 | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-lived Intangible Assets [Roll Forward] | ||||
Balance at the beginning of the period | $ 18,563 | $ 15,767 | $ 20,614 | $ 6,088 |
Additions as a result of acquisitions | 0 | 7,075 | 0 | 18,345 |
Amortization | (975) | (1,114) | (3,026) | (2,705) |
Balance at the end of the period | $ 17,588 | $ 21,728 | $ 17,588 | $ 21,728 |
Junior Subordinated Debenture_2
Junior Subordinated Debentures (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | May 01, 2014 | |
Debt Instrument [Line Items] | ||||||
Junior subordinated debentures | $ 20,522 | $ 20,522 | $ 20,302 | |||
Adjustable rate of trust preferred securities | 3.65% | 3.65% | ||||
Junior Subordinated Debentures | ||||||
Debt Instrument [Line Items] | ||||||
Weighted average rate | 6.43% | 6.49% | 6.72% | 6.17% | ||
Washington Banking | ||||||
Debt Instrument [Line Items] | ||||||
Assumed trust preferred securities and junior subordinated debentures, fair value | $ 18,900 |
Securities Sold Under Agreeme_3
Securities Sold Under Agreement to Repurchase (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 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 | $ 25,883 | $ 31,487 |
U.S. Treasury and U.S. Government-sponsored agencies | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | 6,912 | 4,878 |
Residential | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | 10,254 | 9,335 |
Commercial | ||
Financial Instruments Owned and Pledged as Collateral [Line Items] | ||
Repurchase agreement obligations | $ 8,717 | $ 17,274 |
Other Borrowings - Textual (Det
Other Borrowings - Textual (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Federal Home Loan Bank, Advances [Line Items] | ||
Credit facility with the FHLB | $ 930,600,000 | |
FHLB advances outstanding | 0 | $ 0 |
Maximum federal funds purchases | 140,000,000 | |
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 | 40,400,000 | |
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 ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Debt Disclosure [Abstract] | |||||
Federal Funds Purchased | $ 0 | $ 0 | $ 0 | ||
Average balance during the period | $ 3,755,000 | $ 20,892,000 | $ 15,909,000 | $ 45,194,000 | |
Weighted average rate during the period | 1.16% | 2.22% | 2.56% | 1.98% |
Derivative Financial Instrume_3
Derivative Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Customers | ||
Derivative Asset | ||
Estimated Fair Value | $ 12,026 | |
Derivative Liability | ||
Estimated Fair Value | $ (1,643) | |
Third Parties | ||
Derivative Asset | ||
Estimated Fair Value | $ 1,643 | |
Derivative Liability | ||
Estimated Fair Value | (12,026) | |
Interest rate swap | ||
Derivative Asset | ||
Estimated Fair Value | 12,026 | |
Derivative Liability | ||
Estimated Fair Value | $ (12,026) |
Stockholders' Equity - Reconcil
Stockholders' Equity - Reconciliation of Weighted Average Shares (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net income: | ||||
Net income | $ 17,895 | $ 15,504 | $ 50,431 | $ 36,448 |
Dividends and undistributed earnings allocated to participating securities | (10) | (48) | (48) | (252) |
Net income allocated to common shareholders | $ 17,885 | $ 15,456 | $ 50,383 | $ 36,196 |
Basic: | ||||
Weighted average common shares outstanding (in shares) | 36,764,810 | 36,839,615 | 36,846,884 | 34,744,788 |
Less: Restricted stock awards (in shares) | (21,948) | (67,669) | (34,336) | (94,340) |
Total basic weighted average common shares outstanding (in shares) | 36,742,862 | 36,771,946 | 36,812,548 | 34,650,448 |
Diluted: | ||||
Basic weighted average common shares outstanding (in shares) | 36,742,862 | 36,771,946 | 36,812,548 | 34,650,448 |
Effect of potentially dilutive common shares (in shares) | 191,298 | 170,154 | ||
Total diluted weighted average common shares outstanding (in shares) | 36,876,548 | 36,963,244 | 36,973,024 | 34,820,602 |
Stockholders' Equity - Dividend
Stockholders' Equity - Dividends (Details) - $ / shares | Jul. 24, 2019 | Apr. 24, 2019 | Jan. 23, 2019 | Oct. 24, 2018 | Jul. 24, 2018 | Apr. 25, 2018 | Jan. 24, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 |
Dividends Payable [Line Items] | ||||||||||
Declared | Jul. 24, 2019 | Apr. 24, 2019 | Jan. 23, 2019 | Oct. 24, 2018 | Jul. 24, 2018 | Apr. 25, 2018 | Jan. 24, 2018 | |||
Cash Dividend per Share (in usd per share) | $ 0.19 | $ 0.18 | $ 0.18 | $ 0.17 | $ 0.15 | $ 0.15 | $ 0.15 | $ 0.19 | $ 0.15 | $ 0.55 |
Record Date | Aug. 8, 2019 | May 8, 2019 | Feb. 7, 2019 | Nov. 7, 2018 | Aug. 9, 2018 | May 10, 2018 | Feb. 7, 2018 | |||
Paid Date | Aug. 22, 2019 | May 22, 2019 | 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) - $ / shares | Oct. 23, 2014 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 |
Class of Stock [Line Items] | ||||||
Anti-dilutive securities excluded from computation (in shares) | 108,501 | 0 | 70,372 | 0 | ||
Eleventh Stock Repurchase Plan | ||||||
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) | 264,712 | 0 | 292,712 | 0 | 872,678 | |
Withholding taxes average price per share (in usd per share) | $ 26.23 | $ 26.50 | $ 20.03 |
Stockholders' Equity - Shares R
Stockholders' Equity - Shares Repurchased (Details) - $ / shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 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 | 26,741 | ||
Average share price (in usd per share) | $ 31.80 | $ 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) | 405 | 368 | 28,434 | 53,188 |
Stock repurchase to pay withholding taxes average share price (in usd per share) | $ 27.67 | $ 36.34 | $ 30.83 | $ 31.99 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Jan. 01, 2019 | Jan. 01, 2018 | |
Increase (Decrease) in Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||
Beginning balance | $ 796,625 | $ 639,523 | $ 760,723 | $ 508,305 | ||
Other comprehensive income (loss) | 2,771 | (3,384) | 19,980 | (13,299) | ||
Effects of implementation of accounting change related to operating leases | $ (399) | $ (399) | ||||
Ending balance | 804,127 | 746,133 | 804,127 | 746,133 | ||
Accumulated other comprehensive income (loss), net | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Other Comprehensive Income (Loss), Securities, Available-for-Sale, Unrealized Holding Gain (Loss) Arising During Period, after Tax | 2,993 | (3,319) | 20,240 | (13,193) | ||
Increase (Decrease) in Accumulated Other Comprehensive (Loss) Income [Roll Forward] | ||||||
Beginning balance | 9,754 | (11,306) | (7,455) | (1,298) | ||
Other Comprehensive Income (Loss), Reclassification Adjustment from AOCI for Sale of Securities, Net of Tax | 222 | 65 | 260 | 106 | ||
Other comprehensive income (loss) | 2,771 | (3,384) | 19,980 | (13,299) | ||
Effects of implementation of accounting change related to operating leases | 0 | 0 | 0 | 0 | $ (93) | |
Ending balance | $ 12,525 | $ (14,690) | $ 12,525 | $ (14,690) |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Measurement on Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | $ 966,102 | $ 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 | 112,851 | 101,603 |
Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 127,315 | 158,864 |
Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 346,677 | 331,602 |
Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 331,330 | 333,761 |
Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 24,156 | 25,563 |
Other asset-backed securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 23,773 | 24,702 |
Recurring | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 966,102 | 976,095 |
Equity security | 147 | 114 |
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 | 112,851 | 101,603 |
Recurring | Municipal securities | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 127,315 | 158,864 |
Recurring | Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 346,677 | 331,602 |
Recurring | Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 331,330 | 333,761 |
Recurring | Corporate obligations | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 24,156 | 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 | 23,773 | 24,702 |
Recurring | Interest rate swap | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative assets - interest rate swaps | 12,026 | 5,095 |
Derivative liabilities - interest rate swaps | 12,026 | 5,095 |
Recurring | Level 1 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 16,090 | 15,936 |
Equity security | 147 | 114 |
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 | 16,090 | 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 | Interest rate swap | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative assets - interest rate swaps | 0 | 0 |
Derivative liabilities - interest rate swaps | 0 | 0 |
Recurring | Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 950,012 | 960,159 |
Equity security | 0 | 0 |
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 | 96,761 | 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 | 127,315 | 158,864 |
Recurring | Level 2 | Residential | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 346,677 | 331,602 |
Recurring | Level 2 | Commercial | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 331,330 | 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 | 24,156 | 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 | 23,773 | 24,702 |
Recurring | Level 2 | Interest rate swap | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative assets - interest rate swaps | 12,026 | 5,095 |
Derivative liabilities - interest rate swaps | 12,026 | 5,095 |
Recurring | Level 3 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Total investment securities available for sale | 0 | 0 |
Equity security | 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 | Interest rate swap | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Derivative assets - interest rate swaps | 0 | 0 |
Derivative liabilities - interest rate swaps | $ 0 | $ 0 |
Fair Value Measurements - Textu
Fair Value Measurements - Textual (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Fair Value Disclosures [Abstract] | ||||
Fair value assets transfers between level 1 and level 2 transfer amount | $ 0 | $ 0 | $ 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 | 9 Months Ended | |||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Fair value measurements of assets on a nonrecurring basis | |||||
Basis | $ 2,503 | $ 2,503 | $ 1,504 | ||
Fair Value | 1,872 | 1,872 | 1,216 | ||
Net Losses (Gains) Recorded in Earnings | 48 | $ 160 | 134 | $ 160 | |
Level 1 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | 0 | 0 | ||
Level 2 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | 0 | 0 | ||
Level 3 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 1,872 | 1,872 | 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 | 149 | 149 | |||
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 | 1,495 | ||||
Fair Value | 1,209 | ||||
Net Losses (Gains) Recorded in Earnings | 160 | 160 | |||
Commercial Business | Level 1 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | ||||
Commercial Business | Level 2 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | ||||
Commercial Business | Level 3 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 1,209 | ||||
Commercial Business | Commercial and Industrial | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Basis | 2,503 | 2,503 | 117 | ||
Fair Value | 1,872 | 1,872 | 107 | ||
Net Losses (Gains) Recorded in Earnings | 48 | 11 | 134 | 11 | |
Commercial Business | Commercial and Industrial | Level 1 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | 0 | 0 | ||
Commercial Business | Commercial and Industrial | Level 2 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | 0 | 0 | ||
Commercial Business | Commercial and Industrial | Level 3 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | $ 1,872 | $ 1,872 | 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 | ||||
Fair Value | 7 | ||||
Net Losses (Gains) Recorded in Earnings | $ 0 | $ 0 | |||
Consumer | Level 1 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | ||||
Consumer | Level 2 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | 0 | ||||
Consumer | Level 3 | |||||
Fair value measurements of assets on a nonrecurring basis | |||||
Fair Value | $ 7 |
Fair Value Measurements - Quant
Fair Value Measurements - Quantitative Information, Level 3 (Details) - Nonrecurring - Impaired Loans $ in Thousands | Sep. 30, 2019USD ($) | Dec. 31, 2018USD ($) |
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans | $ 1,872 | $ 1,216 |
Level 3 | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Impaired loans | $ 1,872 | $ 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 | (0.250) | (0.373) |
Level 3 | Maximum | Comparability Adjustment | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Range of Inputs | 2.409 | 0.104 |
Level 3 | Weighted Average | Comparability Adjustment | ||
Fair value measurements for financial instruments measured at fair value on a non-recurring basis | ||
Range of Inputs | 0.601 | (0.109) |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Value and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Carrying Value | ||
Financial Assets: | ||
Cash and cash equivalents | $ 236,968 | $ 161,910 |
Investment securities available for sale | 966,102 | 976,095 |
Federal Home Loan Bank stock | 6,377 | 6,076 |
Loans held for sale | 5,211 | 1,555 |
Total loans receivable, net | 3,694,825 | 3,619,118 |
Accrued interest receivable | 14,722 | 15,403 |
Derivative assets - interest rate swaps | 12,026 | 5,095 |
Equity security | 147 | |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 4,037,947 | 3,965,510 |
Certificate of deposit accounts | 524,310 | 466,892 |
Securities sold under agreement to repurchase | 25,883 | 31,487 |
Junior subordinated debentures | 20,522 | 20,302 |
Accrued interest payable | 212 | 191 |
Derivative liabilities - interest rate swaps | 12,026 | 5,095 |
Fair Value | ||
Financial Assets: | ||
Cash and cash equivalents | 236,968 | 161,910 |
Investment securities available for sale | 966,102 | 976,095 |
Loans held for sale | 5,375 | 1,605 |
Total loans receivable, net | 3,758,359 | 3,614,348 |
Accrued interest receivable | 14,722 | 15,403 |
Derivative assets - interest rate swaps | 12,026 | 5,095 |
Equity security | 147 | 114 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 4,037,947 | 3,965,510 |
Certificate of deposit accounts | 529,925 | 470,222 |
Securities sold under agreement to repurchase | 25,883 | 31,487 |
Junior subordinated debentures | 19,750 | 20,500 |
Accrued interest payable | 212 | 191 |
Derivative liabilities - interest rate swaps | 12,026 | 5,095 |
Fair Value | Level 1 | ||
Financial Assets: | ||
Cash and cash equivalents | 236,968 | 161,910 |
Investment securities available for sale | 16,090 | 15,936 |
Loans held for sale | 0 | 0 |
Total loans receivable, net | 0 | 0 |
Accrued interest receivable | 104 | 68 |
Derivative assets - interest rate swaps | 0 | 0 |
Equity security | 147 | 114 |
Financial Liabilities: | ||
Noninterest deposits, interest bearing demand deposits, money market accounts and savings accounts | 4,037,947 | 3,965,510 |
Certificate of deposit accounts | 0 | 0 |
Securities sold under agreement to repurchase | 25,883 | 31,487 |
Junior subordinated debentures | 0 | 0 |
Accrued interest payable | 96 | 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 | 950,012 | 960,159 |
Loans held for sale | 0 | 1,605 |
Total loans receivable, net | 0 | 0 |
Accrued interest receivable | 3,650 | 4,091 |
Derivative assets - interest rate swaps | 12,026 | 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 | 529,925 | 470,222 |
Securities sold under agreement to repurchase | 0 | 0 |
Junior subordinated debentures | 0 | 0 |
Accrued interest payable | 76 | 81 |
Derivative liabilities - interest rate swaps | 12,026 | 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 | 5,375 | 0 |
Total loans receivable, net | 3,758,359 | 3,614,348 |
Accrued interest receivable | 10,968 | 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 | 19,750 | 20,500 |
Accrued interest payable | 40 | 47 |
Derivative liabilities - interest rate swaps | $ 0 | $ 0 |
Cash Requirement (Details)
Cash Requirement (Details) - USD ($) $ in Millions | Sep. 30, 2019 | Dec. 31, 2018 |
Banking and Thrift [Abstract] | ||
Required reserve balance | $ 16.2 | $ 9.2 |
Leases - Textual (Details)
Leases - Textual (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Operating Lease, Weighted Average Remaining Lease Term | 8 years 1 month 17 days |
Lease ROU assets | $ 26.6 |
Lease liabilities | $ 27.9 |
Operating Lease, Weighted Average Discount Rate, Percent | 3.31% |
Leases - Net Lease Cost (Detail
Leases - Net Lease Cost (Details) | Sep. 30, 2019 |
Leases [Abstract] | |
Weighted average remaining lease term of operating leases in years | 8 years 1 month 17 days |
Operating Lease, Weighted Average Discount Rate, Percent | 3.31% |
Leases - Lease Payment Obligati
Leases - Lease Payment Obligations (Details) $ in Millions | Sep. 30, 2019USD ($) |
Leases [Abstract] | |
Right of use liability | $ 27.9 |
Uncategorized Items - hfwa-2019
Label | Element | Value |
Retained Earnings [Member] | ||
Cumulative Effect of New Accounting Principle in Period of Adoption | us-gaap_CumulativeEffectOfNewAccountingPrincipleInPeriodOfAdoption | $ (399,000) |