Edgar Filing: COLUMBIA BANKING SYSTEM INC

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

COLB 06.30.12 Pub.10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________________________________

FORM 10-Q

________________________________________________________

(Mark One)



ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012.



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .

Commission File Number 0-20288

________________________________________________________

COLUMBIA BANKING SYSTEM, INC.

(Exact name of issuer as specified in its charter)

________________________________________________________



Washington		91-1422237
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification Number)

1301 “A” Street Tacoma, Washington		98402-2156
(Address of principal executive offices)		(Zip Code)

(253) 305-1900

(Issuer’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

________________________________________________________

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No ý

The number of shares of common stock outstanding at July 31, 2012 was 39,669,290.

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TABLE OF CONTENTS



		Page
	PART I — FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)

	Consolidated Balance Sheets – June 30, 2012 and December 31, 2011	1

	Consolidated Statements of Income - three and six months ended June 30, 2012 and 2011	2

	Consolidated Statements of Comprehensive Income - three and six months ended June 30, 2012 and 2011	3

	Consolidated Statements of Changes in Shareholders’ Equity - six months ended June 30, 2012 and 2011	4

	Consolidated Statements of Cash Flows - six months ended June 30, 2012 and 2011	5

	Notes to Unaudited Consolidated Financial Statements	6

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	29

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	48

Item 4.	Controls and Procedures	48

	PART II — OTHER INFORMATION

Item 1.	Legal Proceedings	49

Item 1A.	Risk Factors	49

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	49

Item 3.	Defaults Upon Senior Securities	49

Item 4.	Mine Safety Disclosures	49

Item 5.	Other Information	49

Item 6.	Exhibits	49

	Signatures	50

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PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

Columbia Banking System, Inc.

(Unaudited)



			June 30, 2012		December 31, 2011
ASSETS			(in thousands)
Cash and due from banks			$	98,940	$	91,364
Interest-earning deposits with banks			270,873		202,925
Total cash and cash equivalents			369,813		294,289
Securities available for sale at fair value (amortized cost of $956,636 and $987,560, respectively)			997,763		1,028,110
Federal Home Loan Bank stock at cost			22,215		22,215
Loans held for sale			2,088		2,148
Loans, excluding covered loans, net of unearned income of ($11,666) and ($16,217), respectively			2,436,961		2,348,371
Less: allowance for loan and lease losses			52,196		53,041
Loans, excluding covered loans, net			2,384,765		2,295,330
Covered loans, net of allowance for loan losses of ($31,784) and ($4,944), respectively			462,994		531,929
Total loans, net			2,847,759		2,827,259
FDIC loss-sharing asset			140,003		175,071
Interest receivable			15,560		15,287
Premises and equipment, net			116,400		107,899
Other real estate owned ($19,079 and $28,126 covered by FDIC loss-share, respectively)			33,004		51,019
Goodwill			115,554		115,554
Core deposit intangible, net			17,896		20,166
Other assets			111,358		126,928
Total assets			$	4,789,413	$	4,785,945
LIABILITIES AND SHAREHOLDERS’ EQUITY
Deposits:
Noninterest-bearing			$	1,159,462	$	1,156,610
Interest-bearing			2,671,355		2,658,919
Total deposits			3,830,817		3,815,529
Federal Home Loan Bank advances			113,145		119,009
Securities sold under agreements to repurchase			25,000		25,000
Other liabilities			61,739		67,069
Total liabilities			4,030,701		4,026,607
Commitments and contingent liabilities
Shareholders’ equity:
	June 30, 2012	December 31, 2011
Common stock (no par value)
Authorized shares	63,033	63,033
Issued and outstanding	39,655	39,506	580,358		579,136
Retained earnings			152,519		155,069
Accumulated other comprehensive income			25,835		25,133
Total shareholders’ equity			758,712		759,338
Total liabilities and shareholders’ equity			$	4,789,413	$	4,785,945

See accompanying Notes to unaudited Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF INCOME

Columbia Banking System, Inc.

(Unaudited)



	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2012			2011			2012			2011
	(in thousands except per share amounts)
Interest Income
Loans	$	54,498		$	44,362		$	116,275		$	91,791
Taxable securities	4,951			6,247			10,196			10,664
Tax-exempt securities	2,495			2,516			5,020			4,983
Federal funds sold and deposits in banks	170			184			335			482
Total interest income	62,114			53,309			131,826			107,920
Interest Expense
Deposits	1,561			2,848			3,340			5,927
Federal Home Loan Bank advances	734			714			1,484			1,408
Long-term obligations	—			253			—			504
Other borrowings	118			119			238			257
Total interest expense	2,413			3,934			5,062			8,096
Net Interest Income	59,701			49,375			126,764			99,824
Provision for loan and lease losses	3,750			2,150			8,250			2,150
Provision for losses on covered loans	11,688			2,301			27,373			1,879
Net interest income after provision for loan and lease losses	44,263			44,924			91,141			95,795
Noninterest Income (Loss)
Service charges and other fees	7,436			6,467			14,613			12,755
Merchant services fees	2,095			1,808			4,113			3,441
Gain on sale of investment securities, net	—			—			62			—
Bank owned life insurance	719			528			1,430			1,033
Change in FDIC loss-sharing asset	(168		)	(6,419		)	(1,836		)	(21,193		)
Other	1,746			1,158			3,020			2,087
Total noninterest income (loss)	11,828			3,542			21,402			(1,877		)
Noninterest Expense
Compensation and employee benefits	20,966			19,459			42,961			38,380
Occupancy	5,091			4,388			10,424			8,785
Merchant processing	930			905			1,803			1,788
Advertising and promotion	1,119			1,012			2,001			1,913
Data processing and communications	2,551			1,913			4,764			3,837
Legal and professional fees	1,829			1,498			3,438			2,911
Taxes, licenses and fees	1,115			907			2,470			1,772
Regulatory premiums	925			1,279			1,785			2,979
Net cost (benefit) of operation of other real estate owned	(377		)	214			533			(228		)
Amortization of intangibles	1,119			955			2,269			1,939
FDIC clawback liability (recovery)	(208		)	448			(234		)	2,148
Other	4,765			4,186			11,963			8,286
Total noninterest expense	39,825			37,164			84,177			74,510
Income before income taxes	16,266			11,302			28,366			19,408
Income tax provision	4,367			2,670			7,565			4,997
Net Income	$	11,899		$	8,632		$	20,801		$	14,411
Earnings per common share
Basic	$	0.30		$	0.22		$	0.52		$	0.37
Diluted	$	0.30		$	0.22		$	0.52		$	0.36
Dividends paid per common share	$	0.22		$	0.05		$	0.59		$	0.08
Weighted average number of common shares outstanding	39,260			39,107			39,228			39,073
Weighted average number of diluted common shares outstanding	39,308			39,166			39,306			39,159

See accompanying Notes to unaudited Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Columbia Banking System, Inc.

(Unaudited)



	Three Months Ended
	June 30,
	2012		2011
	(in thousands)
Net income as reported	$	11,899	$	8,632
Net unrealized holding gain from available for sale securities arising during the period, net of tax of ($840) and ($3,641)	2,370		6,467
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($17) and ($8)	3		14
Total comprehensive income	$	14,272	$	15,113



	Six Months Ended
	June 30,
	2012			2011
	(in thousands)
Net income as reported	$	20,801		$	14,411
Unrealized gain from securities:
Net unrealized holding gain from available for sale securities arising during the period, net of tax of $87 and ($4,925)	725			8,780
Reclassification adjustment of net gain from sale of available for sale securities included in income, net of tax of $23 and $0	(39		)	—
Net unrealized gain from securities, net of reclassification adjustment	686			8,780
Cash flow hedging instruments:
Reclassification adjustment of net gain included in income, net of tax of $0 and $79	—			(143		)
Net change in cash flow hedging instruments	—			(143		)
Pension plan liability adjustment:
Net unrealized gain from unfunded defined benefit plan liability arising during the period, net of tax of $0 and $154	—			(261		)
Amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($24) and ($16)	16			28
Pension plan liability adjustment, net	16			(233		)
Total comprehensive income	$	21,503		$	22,815

See accompanying Notes to unaudited Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

Columbia Banking System, Inc.

(Unaudited)



	Common Stock					Retained Earnings			Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	Number of Shares		Amount			Retained Earnings			Accumulated Other Comprehensive Income		Total Shareholders’ Equity
	(in thousands)
Balance at January 1, 2011	39,338		$	576,905		$	117,692		$	12,281	$	706,878
Net income	—		—			14,411			—		14,411
Other comprehensive income	—		—			—			8,404		8,404
Issuance of common stock - stock option and other plans	25		410			—			—		410
Issuance of common stock - restricted stock awards, net of canceled awards	114		763			—			—		763
Purchase and retirement of common stock	(2	)	(32		)	—			—		(32		)
Cash dividends paid on common stock	—		—			(3,154		)	—		(3,154		)
Balance at June 30, 2011	39,475		$	578,046		$	128,949		$	20,685	$	727,680
Balance at January 1, 2012	39,506		$	579,136		$	155,069		$	25,133	$	759,338
Net income	—		—			20,801			—		20,801
Other comprehensive income	—		—			—			702		702
Issuance of common stock - stock option and other plans	19		314			—			—		314
Issuance of common stock - restricted stock awards, net of canceled awards	130		908			—			—		908
Cash dividends paid on common stock	—		—			(23,351		)	—		(23,351		)
Balance at June 30, 2012	39,655		$	580,358		$	152,519		$	25,835	$	758,712

See accompanying Notes to unaudited Consolidated Financial Statements.

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CONSOLIDATED STATEMENTS OF CASH FLOWS

Columbia Banking System, Inc.

(Unaudited)



	Six Months Ended June 30,
	2012			2011 (1)
	(in thousands)
Cash Flows From Operating Activities
Net Income	$	20,801		$	14,411
Adjustments to reconcile net income to net cash provided by operating activities
Provision for loan and lease losses and losses on covered loans	35,623			4,029
Stock-based compensation expense	908			763
Depreciation, amortization and accretion	30,478			28,529
Net realized gain on sale of securities	(62		)	—
Net realized gain on sale of other assets	(41		)	(3		)
Net realized gain on sale of other real estate owned	(6,277		)	(5,455		)
Gain on termination of cash flow hedging instruments	—			(222		)
Write-down on other real estate owned	5,812			4,559
Net change in:
Loans held for sale	60			99
Interest receivable	(273		)	(1,940		)
Interest payable	(275		)	(1		)
Other assets	(7,424		)	(203		)
Other liabilities	(4,945		)	(2,045		)
Net cash provided by operating activities	74,385			42,521
Cash Flows From Investing Activities
Loans originated and acquired, net of principal collected	(63,362		)	(27,829		)
Purchases of:
Securities available for sale	(87,346		)	(269,966		)
Premises and equipment	(11,630		)	(2,388		)
Proceeds from:
FDIC reimbursement on loss-sharing asset	34,313			44,892
Sales of securities available for sale	3,845			—
Principal repayments and maturities of securities available for sale	108,517			60,247
Disposal of premises and equipment	9			20
Sales of covered other real estate owned	18,381			11,081
Sales of other real estate and other personal property owned	11,899			7,874
Capital improvements on other real estate properties	(11		)	(468		)
Decrease in Small Business Administration secured borrowings	—			(642		)
Net cash acquired in business combinations	—			39,010
Net cash provided by (used in) investing activities	14,615			(138,169		)
Cash Flows From Financing Activities
Net increase (decrease) in deposits	15,288			(134,906		)
Proceeds from:
Federal Home Loan Bank advances	—			100
Federal Reserve Bank borrowings	—			100
Exercise of stock options	314			410
Payment for:
Repayment of Federal Home Loan Bank advances	(5,727		)	(11,401		)
Repayment of Federal Reserve Bank borrowings	—			(100		)
Common stock dividends	(23,351		)	(3,154		)
Purchase and retirement of common stock	—			(32		)
Net cash used in financing activities	(13,476		)	(148,983		)
Increase (Decrease) in cash and cash equivalents	75,524			(244,631		)
Cash and cash equivalents at beginning of period	294,289			514,130
Cash and cash equivalents at end of period	$	369,813		$	269,499
Supplemental Information:
Cash paid during the year for:
Cash paid for interest	$	5,337		$	8,097
Cash paid for income tax	$	—		$	—
Non-cash investing activities
Assets acquired in FDIC-assisted acquisitions (excluding cash and cash equivalents)	$	—		$	257,104
Liabilities assumed in FDIC-assisted acquisitions	$	—		$	296,114
Loans transferred to other real estate owned	$	11,789		$	8,240

_______________

(1) Reclassified to conform to the current period’s presentation.

See accompanying Notes to unaudited Consolidated Financial Statements.

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NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Columbia Banking System, Inc.


1.	Basis of Presentation and Significant Accounting Policies

Basis of Presentation

The interim unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and with instructions to Form 10-Q and Article 10 of Regulation S-X. The consolidated financial statements include the accounts of the Company, and its wholly owned banking subsidiary Columbia Bank (the “Bank”). All intercompany transactions and accounts have been eliminated in consolidation. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair statement of the results for the interim periods presented have been included. The results of operations for the six months ended June 30, 2012 are not necessarily indicative of results to be anticipated for the year ending December 31, 2012. The accompanying interim unaudited consolidated financial statements should be read in conjunction with the financial statements and related notes contained in the Company’s 2011 Annual Report on Form 10-K.

Significant Accounting Policies

The significant accounting policies used in preparation of our consolidated financial statements are disclosed in our 2011 Annual Report on Form 10-K. Other than as discussed below, there have not been any changes in our significant accounting policies compared to those contained in our 2011 Form 10-K disclosure for the year ended December 31, 2011.


2.	Accounting Pronouncements Recently Issued

In May 2011, the Financial Accounting Standards Board ("FASB") issued ASU 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. Generally Accepted Accounting Principles (“GAAP”) and International Financial Reporting Standards (“IFRS”) (Topic 820). ASU 2011-04 developed common requirements between GAAP and IFRS for measuring fair value and for disclosing information about fair value measurements. The Company adopted this ASU during the first quarter of 2012 with no impact on the Company's financial condition or results of operations.


3.	Securities

The following table summarizes the amortized cost, gross unrealized gains and losses and the resulting fair value of securities available for sale:



	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
	(in thousands)
June 30, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	601,460	$	20,484	$	(666	)	$	621,278
State and municipal securities	258,774		20,231		(198		)	278,807
U.S. government agency and government-sponsored enterprise securities	93,092		1,211		(9		)	94,294
Other securities	3,310		105		(31		)	3,384
Total	$	956,636	$	42,031	$	(904	)	$	997,763
December 31, 2011
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	678,631	$	19,323	$	(2,000	)	$	695,954
State and municipal securities	263,075		22,746		(58		)	285,763
U.S. government agency and government-sponsored enterprise securities	42,558		505		—			43,063
Other securities	3,296		64		(30		)	3,330
Total	$	987,560	$	42,638	$	(2,088	)	$	1,028,110

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The scheduled contractual maturities of investment securities available for sale at June 30, 2012 are presented as follows:



	June 30, 2012
	Amortized Cost		Fair Value
	(in thousands)
Due within one year	$	18,270	$	18,553
Due after one year through five years	139,044		142,225
Due after five years through ten years	169,482		178,051
Due after ten years	626,530		655,550
Other securities with no stated maturity	3,310		3,384
Total investment securities available-for-sale	$	956,636	$	997,763

The following table summarizes, as of June 30, 2012, the carrying value of securities pledged as collateral to secure public deposits, borrowings and other purposes as permitted or required by law:



	Carrying Amount
	(in thousands)
To Washington and Oregon State to secure public deposits	$	266,499
To Federal Home Loan Bank to secure advances	80,890
To Federal Reserve Bank to secure borrowings	51,454
Other securities pledged	49,014
Total securities pledged as collateral	$	447,857

The following tables show the gross unrealized losses and fair value of the Company’s investments with unrealized losses that are not deemed to be other-than-temporarily impaired, aggregated by investment category and length of time that individual securities have been in a continuous unrealized loss position at June 30, 2012 and December 31, 2011:




	Less than 12 Months					12 Months or More					Total
	Fair Value		Unrealized Losses			Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
	(in thousands)
June 30, 2012
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	85,516	$	(664	)	$	66	$	(2	)	$	85,582	(666		)
State and municipal securities	9,173		(198		)	—		—			9,173		(198		)
U.S. government agency and government-sponsored enterprise securities	24,870		(9		)	—		—			24,870		(9		)
Other securities	—		—			969		(31		)	969		(31		)
Total	$	119,559	$	(871	)	$	1,035	$	(33	)	$	120,594	$	(904	)

December 31, 2011
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations	$	238,875	$	(1,999	)	$	196	$	(1	)	$	239,071	$	(2,000	)
State and municipal securities	3,820		(24		)	950		(34		)	4,770		(58		)
Other securities	—		—			970		(30		)	970		(30		)
Total	$	242,695	$	(2,023	)	$	2,116	$	(65	)	$	244,811	$	(2,088	)

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At June 30, 2012, there were 23 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which five were in a continuous loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2012.

At June 30, 2012, there were nine state and municipal government securities in an unrealized loss position, of which none were in a continuous loss position for 12 months or more. The unrealized losses on state and municipal securities were caused by interest rate changes or widening of market spreads subsequent to the purchase of the individual securities. Management monitors published credit ratings of these securities for adverse changes. As of June 30, 2012, none of the rated obligations of state and local government entities held by the Company had an adverse credit rating. Because the credit quality of these securities are investment grade and the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2012.

At June 30, 2012, there were two U.S. government agency and government-sponsored enterprise security in an unrealized loss position for less than 12 months. The decline in fair value is attributable to changes in interest rates relative to where these investments fall within the yield curve and their individual characteristics. Because the Company does not intend to sell these securities nor does the Company consider it more likely than not that it will be required to sell these securities before the recovery of amortized cost basis, which may be maturity, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2012.

At June 30, 2012, there was one other security, a mortgage-backed securities fund in a continuous unrealized loss position for 12 months or more. The decline in fair value is attributable to changes in interest rates and the additional risk premium investors are demanding for investment securities with these characteristics. The Company does not consider this investment to be other-than-temporarily impaired at June 30, 2012 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.

Securities Deemed to be Other-Than-Temporarily Impaired

During 2011, the Company determined that one of its state and municipal securities with a par amount of $3.0 million was other-than-temporarily impaired due to it maturing during the period without repaying the principal amount. In accordance with ASC 320-10-35, the Company determined that the entire amount of the other-than-temporary impairment was credit-related as the present value of the expected future cash flows for the defaulted security was zero. The credit-related other-than-temporary impairment of $3.0 million was recorded in the consolidated statements of income for the year ended December 31, 2011. The Company continues to hold this security at June 30, 2012.


4.	Noncovered Loans

Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans that are not subject to FDIC loss-sharing agreements.

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The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):



	June 30, 2012			December 31, 2011
	(in thousands)
Noncovered loans:
Commercial business	$	1,111,440		$	1,031,721
Real estate:
One-to-four family residential	55,883			64,491
Commercial and multifamily residential	1,017,736			998,165
Total real estate	1,073,619			1,062,656
Real estate construction:
One-to-four family residential	47,417			50,208
Commercial and multifamily residential	48,765			36,768
Total real estate construction	96,182			86,976
Consumer	167,387			183,235
Less: Net unearned income	(11,667		)	(16,217		)
Total noncovered loans, net of unearned income	2,436,961			2,348,371
Less: Allowance for loan and lease losses	(52,196		)	(53,041		)
Total noncovered loans, net	$	2,384,765		$	2,295,330
Loans held for sale	$	2,088		$	2,148

At June 30, 2012 and December 31, 2011, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington and Oregon.

The Company and its banking subsidiary have granted loans to officers and directors of the Company and related interests. These loans are made on the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with unrelated persons and do not involve more than the normal risk of collectability. The aggregate dollar amount of these loans was $12.7 million and $9.0 million at June 30, 2012 and December 31, 2011, respectively. During the first six months of 2012, advances on related party loans were $6.0 million and repayments totaled $2.3 million.

At June 30, 2012 and December 31, 2011, $429.4 million and $462.0 million of commercial and residential real estate loans were pledged as collateral on Federal Home Loan Bank borrowings.

The following is an analysis of noncovered, nonaccrual loans as of June 30, 2012 and December 31, 2011:



	June 30, 2012				December 31, 2011
	Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans		Recorded Investment Nonaccrual Loans		Unpaid Principal Balance Nonaccrual Loans
	(in thousands)
Commercial business
Secured	$	12,839	$	22,511	$	10,124	$	16,820
Unsecured	213		213		119		719
Real estate:
One-to-four family residential	2,244		3,070		2,696		3,011
Commercial & multifamily residential
Commercial land	3,444		7,291		3,739		7,230
Income property multifamily	10,753		15,958		6,775		9,265
Owner occupied	9,105		12,507		8,971		10,932
Real estate construction:
One-to-four family residential
Land and acquisition	3,552		7,351		7,799		16,703
Residential construction	1,671		3,801		2,986		5,316
Commercial & multifamily residential
Income property multifamily	3,754		9,057		7,067		14,912
Consumer	1,890		2,268		3,207		3,960
Total	$	49,465	$	84,027	$	53,483	$	88,868

Table of Contents

The following is an analysis of the recorded investment of the aged loan portfolio as of June 30, 2012 and December 31, 2011:



	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
	(in thousands)
June 30, 2012
Commercial business
Secured	$	1,044,846	$	4,025	$	1,153	$	—	$	5,178	$	12,839	$	1,062,863
Unsecured	44,391		476		193		—		669		213		45,273
Real estate:
One-to-four family residential	52,968		796		7		—		803		2,244		56,015
Commercial & multifamily residential
Commercial land	41,263		179		—		—		179		3,444		44,886
Income property multifamily	568,724		243		309		—		552		10,753		580,029
Owner occupied	372,946		2,920		—		—		2,920		9,105		384,971
Real estate construction:
One-to-four family residential
Land and acquisition	17,004		—		—		—		—		3,552		20,556
Residential construction	24,553		—		—		—		—		1,671		26,224
Commercial & multifamily residential
Income property multifamily	22,814		—		—		—		—		3,754		26,568
Owner occupied	22,122		—		—		—		—		—		22,122
Consumer	164,426		860		278		—		1,138		1,890		167,454
Total	$	2,376,057	$	9,499	$	1,940	$	—	$	11,439	$	49,465	$	2,436,961

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans
	(in thousands)
December 31, 2011
Commercial business
Secured	$	966,563	$	1,741	$	2,989	$	—	$	4,730	$	10,124	$	981,417
Unsecured	46,880		407		—		—		407		119		47,406
Real estate:
One-to-four family residential	60,764		603		—		—		603		2,696		64,063
Commercial & multifamily residential
Commercial land	46,161		781		—		—		781		3,739		50,681
Income property multifamily	524,225		2,872		121		—		2,993		6,775		533,993
Owner occupied	394,691		829		298		—		1,127		8,971		404,789
Real estate construction:
One-to-four family residential
Land and acquisition	17,249		153		—		—		153		7,799		25,201
Residential construction	19,555		1,390		—		—		1,390		2,986		23,931
Commercial & multifamily residential
Income property multifamily	13,810		—		—		—		—		7,067		20,877
Owner occupied	12,790		—		—		—		—		—		12,790
Consumer	179,753		141		122		—		263		3,207		183,223
Total	$	2,282,441	$	8,917	$	3,530	$	—	$	12,447	$	53,483	$	2,348,371

Table of Contents

The following is an analysis of impaired loans as of June 30, 2012 and December 31, 2011:



	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
	(in thousands)
June 30, 2012
Commercial business
Secured	$	1,050,734	$	12,129	$	5,681	$	7,278	$	3,528	$	6,448	$	13,770
Unsecured	45,137		136		136		136		136		—		—
Real estate:
One-to-four family residential	53,964		2,051		1,298		1,366		90		753		849
Commercial & multifamily residential
Commercial land	41,806		3,080		—		—		—		3,080		6,684
Income property multifamily	571,151		8,878		745		770		49		8,133		12,953
Owner occupied	370,798		14,173		—		—		—		14,173		17,938
Real estate construction:
One-to-four family residential
Land and acquisition	16,949		3,607		—		—		—		3,607		6,503
Residential construction	23,469		2,755		18		1,468		18		2,737		3,343
Commercial & multifamily residential
Income property multifamily	22,814		3,754		3,754		9,057		443		—		—
Owner occupied	22,122		—		—		—		—		—		—
Consumer	166,406		1,048		168		171		1		880		880
Total	$	2,385,350	$	51,611	$	11,800	$	20,246	$	4,265	$	39,811	$	62,920

	Recorded Investment of Loans Collectively Measured for Contingency Provision		Recorded Investment of Loans Individually Measured for Specific Impairment		Impaired Loans With Recorded Allowance						Impaired Loans Without Recorded Allowance
					Recorded Investment		Unpaid Principal Balance		Related Allowance		Recorded Investment		Unpaid Principal Balance
	(in thousands)
December 31, 2011
Commercial business
Secured	$	972,531	$	8,886	$	2,926	$	2,927	$	954	$	5,960	$	12,109
Unsecured	47,309		97		97		97		97		—		—
Real estate:
One-to-four family residential	61,584		2,479		582		590		96		1,897		2,136
Commercial & multifamily residential
Commercial land	46,882		3,799		—		—		—		3,799		6,773
Income property multifamily	527,362		6,631		687		759		63		5,944		7,700
Owner occupied	390,225		14,564		274		274		185		14,290		18,524
Real estate construction:
One-to-four family residential
Land and acquisition	17,813		7,388		450		948		—		6,938		11,978
Residential construction	18,847		5,084		59		1,509		59		5,025		5,116
Commercial & multifamily residential