XNAS:COLB Columbia Banking System Inc Quarterly Report 10-Q Filing - 3/31/2012

Effective Date 3/31/2012

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COLB 03.31.2012 10-Q
 
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 March 31, 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.
Large accelerated filer
 
ý
 
Accelerated filer
 
¨
 
 
 
 
 
 
 
Non-accelerated filer
 
¨
 
Smaller reporting company
 
¨
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 April 30, 2012 was 39,674,650.
 



TABLE OF CONTENTS
 
 
 
Page
 
PART I — FINANCIAL INFORMATION
 
 
 
 
Item 1.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
 
PART II — OTHER INFORMATION
 
 
 
 
Item 1.
 
 
 
Item 1A.
 
 
 
Item 2.
 
 
 
Item 3.
 
 
 
Item 4.
 
 
 
Item 5.
 
 
 
Item 6.
 
 
 
 
 
i



PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
Columbia Banking System, Inc.
(Unaudited)
 
 
 
 
 
 
March 31,
2012
 
December 31,
2011
ASSETS
 
(in thousands)
Cash and due from banks
 
$
93,904

 
$
91,364

Interest-earning deposits with banks
 
297,553

 
202,925

Total cash and cash equivalents
 
391,457

 
294,289

Securities available for sale at fair value (amortized cost of $961,296 and $987,560, respectively)
 
999,213

 
1,028,110

Federal Home Loan Bank stock at cost
 
22,215

 
22,215

Loans held for sale
 
2,066

 
2,148

Loans, excluding covered loans, net of unearned income of ($12,865) and ($16,217), respectively
 
2,371,818

 
2,348,371

Less: allowance for loan and lease losses
 
52,283

 
53,041

Loans, excluding covered loans, net
 
2,319,535

 
2,295,330

Covered loans, net of allowance for loan losses of ($20,504) and ($4,944), respectively
 
501,613

 
531,929

Total loans, net
 
2,821,148

 
2,827,259

FDIC loss-sharing asset
 
159,061

 
175,071

Interest receivable
 
16,037

 
15,287

Premises and equipment, net
 
113,071

 
107,899

Other real estate owned ($24,430 and $28,126 covered by FDIC loss share, respectively)
 
41,174

 
51,019

Goodwill
 
115,554

 
115,554

Core deposit intangible, net
 
19,016

 
20,166

Other assets
 
115,420

 
126,928

Total assets
 
$
4,815,432

 
$
4,785,945

LIABILITIES AND SHAREHOLDERS’ EQUITY
 
 
 
 
Deposits:
 
 
 
 
 
 
 
Noninterest-bearing
 
$
1,159,308

 
$
1,156,610

Interest-bearing
 
2,706,137

 
2,658,919

Total deposits
 
3,865,445

 
3,815,529

Federal Home Loan Bank advances
 
114,715

 
119,009

Securities sold under agreements to repurchase
 
25,000

 
25,000

Other liabilities
 
57,569

 
67,069

Total liabilities
 
4,062,729

 
4,026,607

Commitments and contingent liabilities
 

 

Shareholders’ equity:
 
 
 
 
 
 
 
 
March 31,
2012
 
December 31,
2011
 
 
 
 
Common stock (no par value)
 
 
 
 
 
 
 
Authorized shares
63,033

 
63,033

 
 
 
 
Issued and outstanding
39,670

 
39,506

 
579,894

 
579,136

Retained earnings
 
149,348

 
155,069

Accumulated other comprehensive income
 
23,461

 
25,133

Total shareholders’ equity
 
752,703

 
759,338

Total liabilities and shareholders’ equity
 
$
4,815,432

 
$
4,785,945


See accompanying Notes to unaudited Consolidated Financial Statements.


1


CONSOLIDATED STATEMENTS OF INCOME
Columbia Banking System, Inc.
(Unaudited)
 
 
Three Months Ended
 
 
March 31,
 
 
2012
 
2011
 
 
(in thousands except per share)
Interest Income
 
 
 
 
Loans
 
$
61,777

 
$
47,429

Taxable securities
 
5,245

 
4,417

Tax-exempt securities
 
2,525

 
2,467

Federal funds sold and deposits in banks
 
165

 
298

Total interest income
 
69,712

 
54,611

Interest Expense
 
 
 
 
Deposits
 
1,779

 
3,079

Federal Home Loan Bank advances
 
750

 
694

Long-term obligations
 

 
251

Other borrowings
 
120

 
138

Total interest expense
 
2,649

 
4,162

Net Interest Income
 
67,063

 
50,449

Provision for loan and lease losses
 
4,500

 

Provision (recapture) for losses on covered loans
 
15,685

 
(422
)
Net interest income after provision (recapture) for loan and lease losses
 
46,878

 
50,871

Noninterest Income (Loss)
 
 
 
 
Service charges and other fees
 
7,177

 
6,288

Merchant services fees
 
2,018

 
1,633

Gain on sale of investment securities, net
 
62

 

Bank owned life insurance
 
711

 
505

Change in FDIC loss-sharing asset
 
(1,668
)
 
(14,774
)
Other
 
1,274

 
929

Total noninterest income (loss)
 
9,574

 
(5,419
)
Noninterest Expense
 
 
 
 
Compensation and employee benefits
 
21,995

 
18,921

Occupancy
 
5,333

 
4,397

Merchant processing
 
873

 
883

Advertising and promotion
 
882

 
901

Data processing and communications
 
2,213

 
1,924

Legal and professional fees
 
1,609

 
1,413

Taxes, licenses and fees
 
1,355

 
865

Regulatory premiums
 
860

 
2,195

Net cost (benefit) of operation of other real estate owned
 
910

 
(442
)
Amortization of intangibles
 
1,150

 
984

Other
 
7,172

 
5,305

Total noninterest expense
 
44,352

 
37,346

Income before income taxes
 
12,100

 
8,106

Income tax provision
 
3,198

 
2,327

Net Income
 
$
8,902

 
$
5,779

Earnings per common share
 
 
 
 
Basic
 
$
0.22

 
$
0.15

Diluted
 
$
0.22

 
$
0.15

Dividends paid per common share
 
$
0.37

 
$
0.03

Weighted average number of common shares outstanding
 
39,195

 
39,043

Weighted average number of diluted common shares outstanding
 
39,298

 
39,156


See accompanying Notes to unaudited Consolidated Financial Statements.


2


CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Columbia Banking System, Inc.
(Unaudited)
 
 
 
Three Months Ended
 
 
March 31,
 
 
2012
 
2011
 
 
(in thousands)
Net income as reported
 
$
8,902

 
$
5,779

Unrealized gain from securities:
 
 
 
 
Net unrealized holding gain (loss) from available for sale securities arising during the period, net of tax of $926 and ($1,284)
 
(1,645
)
 
2,313

Reclassification adjustment of net gain from sale of available for sale securities included in income, net of tax of $22 and $0
 
(40
)
 

Net unrealized gain from securities, net of reclassification adjustment
 
(1,685
)
 
2,313

Cash flow hedging instruments:
 
 
 
 
Reclassification adjustment of net gain included in income, net of tax of $0 and $79
 

 
(142
)
Net change in cash flow hedging instruments
 

 
(142
)
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
)
Less: amortization of unrecognized net actuarial loss included in net periodic pension cost, net of tax of ($7) and ($8)
 
13

 
14

Pension plan liability adjustment, net
 
13

 
(247
)
Total comprehensive income
 
$
7,230

 
$
7,703
















See accompanying Notes to unaudited Consolidated Financial Statements.


3


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
 
 
 
(in thousands)
Balance at January 1, 2011
 
39,338

 
$
576,905

 
$
117,692

 
$
12,281

 
$
706,878

Net income
 

 

 
5,779

 

 
5,779

Other comprehensive income
 

 

 

 
1,924

 
1,924

Issuance of common stock - stock option and other plans
 
23

 
380

 

 

 
380

Issuance of common stock - restricted stock awards, net of canceled awards
 
122

 
335

 

 

 
335

Purchase and retirement of common stock
 
(2
)
 
(32
)
 

 

 
(32
)
Cash dividends paid on common stock
 

 

 
(1,181
)
 

 
(1,181
)
Balance at March 31, 2011
 
39,481

 
$
577,588

 
$
122,290

 
$
14,205

 
$
714,083

Balance at January 1, 2012
 
39,506

 
$
579,136

 
$
155,069

 
$
25,133

 
$
759,338

Net income
 

 

 
8,902

 

 
8,902

Other comprehensive loss
 

 

 

 
(1,672
)
 
(1,672
)
Issuance of common stock - stock option and other plans
 
18

 
308

 

 

 
308

Issuance of common stock - restricted stock awards, net of canceled awards
 
146

 
450

 

 

 
450

Cash dividends paid on common stock
 

 

 
(14,623
)
 

 
(14,623
)
Balance at March 31, 2012
 
39,670

 
$
579,894

 
$
149,348

 
$
23,461

 
$
752,703

















See accompanying Notes to unaudited Consolidated Financial Statements.

4


CONSOLIDATED STATEMENTS OF CASH FLOWS
Columbia Banking System, Inc.
(Unaudited)
 
 
Three Months Ended March 31,
 
 
2012
 
2011
 
 
(in thousands)
Cash Flows From Operating Activities
 
 
 
 
Net Income
 
$
8,902

 
$
5,779

Adjustments to reconcile net income to net cash provided by operating activities
 

 

Provision for loan and lease losses and losses on covered loans
 
20,185

 
(422
)
Stock-based compensation expense
 
450

 
335

Depreciation, amortization and accretion
 
16,141

 
3,774

Net realized gain on sale of securities
 
(62
)
 

Net realized gain on sale of other assets
 
(21
)
 
(3
)
Net realized gain on sale of other real estate owned
 
(2,954
)
 
(2,712
)
Gain on termination of cash flow hedging instruments
 

 
(222
)
Write-down on other real estate owned
 
3,127

 
1,925

Net change in:
 

 

Loans held for sale
 
82

 
212

Interest receivable
 
(750
)
 
(1,725
)
Interest payable
 
(148
)
 
(251
)
Other assets
 
(1,166
)
 
13,736

Other liabilities
 
(8,403
)
 
(766
)
Net cash provided by operating activities
 
35,383

 
19,660

Cash Flows From Investing Activities
 
 
 
 
Loans originated and acquired, net of principal collected
 
(16,814
)
 
51,870

Purchases of:
 

 

Securities available for sale
 
(30,177
)
 
(149,799
)
Premises and equipment
 
(6,682
)
 
(2,461
)
Proceeds from:
 

 

FDIC reimbursement on loss-sharing asset
 
14,804

 

Sales of securities available for sale
 
3,845

 

Principal repayments and maturities of securities available for sale
 
49,654

 
27,315

Disposal of premises and equipment
 

 
20

Sales of covered other real estate owned
 
8,025

 
6,959

Sales of other real estate and other personal property owned
 
7,829

 
5,372

Capital improvements on other real estate properties
 
(90
)
 
(251
)
Decrease in Small Business Administration secured borrowings
 

 
(558
)
Net cash provided by (used in) investing activities
 
30,394

 
(61,533
)
Cash Flows From Financing Activities
 
 
 
 
Net increase in deposits
 
49,916

 
8,944

Proceeds from:
 

 

Federal Home Loan Bank advances
 

 
100

Federal Reserve Bank borrowings
 

 
100

Exercise of stock options
 
308

 
380

Payment for:
 

 

Repayment of Federal Home Loan Bank advances
 
(4,210
)
 
(4,140
)
Repayment of Federal Reserve Bank borrowings
 

 
(100
)
Common stock dividends
 
(14,623
)
 
(1,181
)
Purchase and retirement of common stock
 

 
(32
)
Net cash provided by financing activities
 
31,391

 
4,071

Increase (Decrease) in cash and cash equivalents
 
97,168

 
(37,802
)
Cash and cash equivalents at beginning of period
 
294,289

 
514,130

Cash and cash equivalents at end of period
 
$
391,457

 
$
476,328

Supplemental Information:
 
 
 
 
Cash paid during the year for:
 
 
 
 
Cash paid for interest
 
$
2,797

 
$
4,413

Cash paid for income tax
 
$

 
$

Non-cash investing activities
 

 

Loans transferred to other real estate owned
 
$
6,092

 
$
5,467


See accompanying Notes to unaudited Consolidated Financial Statements.

5


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 three months ended March 31, 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 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 current period 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)
March 31, 2012
 

 

 

 

U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
652,263

 
$
18,650

 
$
(1,329
)
 
$
669,584

State and municipal securities
 
263,298

 
20,466

 
(212
)
 
283,552

U.S. government agency and government-sponsored enterprise securities
 
42,439

 
350

 
(37
)
 
42,752

Other securities
 
3,296

 
60

 
(31
)
 
3,325

Total
 
$
961,296

 
$
39,526

 
$
(1,609
)
 
$
999,213

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


6


The scheduled contractual maturities of investment securities available for sale at March 31, 2012 are presented as follows:
 
 
March 31, 2012
 
 
Amortized Cost
 
Fair Value
 
 
(in thousands)
Due within one year
 
$
22,442

 
$
22,749

Due after one year through five years
 
78,072

 
80,627

Due after five years through ten years
 
190,442

 
199,359

Due after ten years
 
667,044

 
693,153

Total investment securities available-for-sale
 
$
958,000

 
$
995,888

The following table summarizes, as of March 31, 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
 
$
213,713

To Federal Home Loan Bank to secure advances
 
87,180

To Federal Reserve Bank to secure borrowings
 
54,778

Other securities pledged
 
47,878

Total securities pledged as collateral
 
$
403,549

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 March 31, 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)
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
U.S. government agency and government-sponsored enterprise mortgage-backed securities and collateralized mortgage obligations
 
$
166,921

 
$
(1,228
)
 
$
12,035

 
$
(101
)
 
$
178,956

 
(1,329
)
State and municipal securities
 
8,251

 
(188
)
 
960

 
(24
)
 
9,211

 
(212
)
U.S. government agency and government-sponsored enterprise securities
 
13,932

 
(37
)
 

 

 
13,932

 
(37
)
Other securities
 

 

 
969

 
(31
)
 
969

 
(31
)
Total
 
$
189,104

 
$
(1,453
)
 
$
13,964

 
$
(156
)
 
$
203,068

 
$
(1,609
)
 
 
 
 
 
 
 
 
 
 

 
 
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
)

7


At March 31, 2012, there were eleven state and municipal government securities in an unrealized loss position, of which one was 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 March 31, 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 March 31, 2012.
At March 31, 2012, there were 34 U.S. government agency and government-sponsored enterprise mortgage-backed securities & collateralized mortgage obligations securities in an unrealized loss position, of which two 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 March 31, 2012.
At March 31, 2012, there was one 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 this investment falls within the yield curve and its individual characteristics. Because the Company does not intend to sell this security nor does the Company consider it more likely than not that it will be required to sell this security before the recovery of amortized cost basis, which may be maturity, the Company does not consider this investment to be other-than-temporarily impaired at March 31, 2012.
At March 31, 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 March 31, 2012 as it has the intent and ability to hold the investment for sufficient time to allow for recovery in the market value.
4.
Noncovered Loans
Noncovered loans include loans originated through our branch network and loan departments as well as acquired loans, including discounted loans, that are not subject to a FDIC loss-share agreement.
The following is an analysis of the noncovered loan portfolio by major types of loans (net of unearned income):
 
 
March 31,
2012
 
December 31,
2011
 
 
(in thousands)
Noncovered loans:
 
 
 
 
Commercial business
 
$
1,079,356

 
$
1,031,721

Real estate:
 
 
 
 
One-to-four family residential
 
58,843

 
64,491

Commercial and multifamily residential
 
992,403

 
998,165

Total real estate
 
1,051,246

 
1,062,656

Real estate construction:
 
 
 
 
One-to-four family residential
 
48,559

 
50,208

Commercial and multifamily residential
 
35,567

 
36,768

Total real estate construction
 
84,126

 
86,976

Consumer
 
169,955

 
183,235

Less: Net unearned income
 
(12,865
)
 
(16,217
)
Total noncovered loans, net of unearned income
 
2,371,818

 
2,348,371

Less: Allowance for loan and lease losses
 
(52,283
)
 
(53,041
)
Total noncovered loans, net
 
$
2,319,535

 
$
2,295,330

Loans held for sale
 
$
2,066

 
$
2,148


8


At March 31, 2012 and December 31, 2011, the Company had no loans to foreign domiciled businesses or foreign countries, or loans related to highly leveraged transactions. 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 $11.7 million and $9.0 million at March 31, 2012 and December 31, 2011, respectively. During the first three months of 2012, advances on related party loans were $2.8 million and repayments totaled $141 thousand.
At March 31, 2012 and December 31, 2011, $471.7 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 March 31, 2012 and December 31, 2011:
 
 
March 31, 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
 
$
14,676

 
$
23,299

 
$
10,124

 
$
16,820

Unsecured
 
115

 
715

 
119

 
719

Real estate:
 
 
 
 
 
 
 
 
One-to-four family residential
 
2,624

 
2,992

 
2,696

 
3,011

Commercial & multifamily residential
 
 
 
 
 
 
 
 
Commercial land
 
3,432

 
7,233

 
3,739

 
7,230

Income property multifamily
 
12,771

 
17,277

 
6,775

 
9,265

Owner occupied
 
8,669

 
12,249

 
8,971

 
10,932

Real estate construction:
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
Land and acquisition
 
6,410

 
13,581

 
7,799

 
16,703

Residential construction
 
2,383

 
4,647

 
2,986

 
5,316

Commercial & multifamily residential
 
 
 
 
 
 
 
 
Income property multifamily
 
5,023

 
10,367

 
7,067

 
14,912

Consumer
 
1,449

 
1,776

 
3,207

 
3,960

Total
 
$
57,552

 
$
94,136

 
$
53,483

 
$
88,868

 


9


The following is an analysis of the recorded investment of the aged loan portfolio as of March 31, 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)
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
1,006,841

 
$
3,279

 
$
3,606

 
$

 
$
6,885

 
$
14,676

 
$
1,028,402

Unsecured
 
46,796

 
235

 
119

 

 
354

 
115

 
47,265

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
55,486

 
682

 
84

 

 
766

 
2,624

 
58,876

Commercial & multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
41,948

 

 

 

 

 
3,432

 
45,380

Income property multifamily
 
542,839

 
2,960

 

 

 
2,960

 
12,771

 
558,570

Owner occupied
 
369,579

 
1,948

 

 

 
1,948

 
8,669

 
380,196

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
16,974

 

 

 

 

 
6,410

 
23,384

Residential construction
 
21,778

 

 
319

 

 
319

 
2,383

 
24,480

Commercial & multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
14,212

 

 

 

 

 
5,023

 
19,235

Owner occupied
 
16,008

 

 

 

 

 

 
16,008

Consumer
 
168,573

 

 

 

 

 
1,449

 
170,022

Total
 
$
2,301,034

 
$
9,104

 
$
4,128

 
$

 
$
13,232

 
$
57,552

 
$
2,371,818

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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


10


The following is an analysis of impaired loans as of March 31, 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
 
Average Recorded
Investment
Impaired Loans 
 
Interest Recognized
on
Impaired Loans
 
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
 
 
(in thousands)
March 31, 2012
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial business
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Secured
 
$
1,017,869

 
$
10,533

 
$
1,698

 
$
1,698

 
$
451

 
$
8,835

 
$
16,824

 
$
9,709

 
$
309

Unsecured
 
47,124

 
141

 
141

 
141

 
141

 

 

 
119

 
1

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
56,823

 
2,053

 
355

 
368

 
72

 
1,698

 
1,848

 
2,266

 
1

Commercial & multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
42,369

 
3,011

 

 

 

 
3,011

 
6,052

 
3,405

 

Income property multifamily
 
549,035

 
9,535

 
4,579

 
4,612

 
1,087

 
4,956

 
8,556

 
8,083

 
115

Owner occupied
 
366,457

 
13,739

 
1,083

 
1,203

 
16

 
12,656

 
18,378

 
14,152

 
107

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
17,693

 
5,691

 

 

 

 
5,691

 
11,026

 
6,539

 

Residential construction
 
20,993

 
3,487

 
18

 
1,468

 
18

 
3,469

 
4,209

 
4,286

 
358

Commercial & multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
14,212

 
5,023

 

 

 

 
5,023

 
10,367

 
6,045

 

Owner occupied
 
16,008

 

 

 

 

 

 

 

 

Consumer
 
168,971

 
1,051

 

 

 

 
1,051

 
1,052

 
1,672

 

Total
 
$
2,317,554

 
$
54,264

 
$
7,874

 
$
9,490

 
$
1,785

 
$
46,390

 
$
78,312

 
$
56,276

 
$
891

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
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
 
Average Recorded
Investment
Impaired Loans 
 
Interest Recognized
on
Impaired Loans
 
 
 
 
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

 
$
15,578

 
$
511

Unsecured
 
47,309

 
97

 
97

 
97

 
97

 

 

 
138

 

Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
61,584

 
2,479

 
582

 
590

 
96

 
1,897

 
2,136

 
2,494

 

Commercial & multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial land
 
46,882

 
3,799

 

 

 

 
3,799

 
6,773

 
4,263

 

Income property multifamily
 
527,362

 
6,631

 
687

 
759

 
63

 
5,944

 
7,700

 
8,881

 
59

Owner occupied
 
390,225

 
14,564

 
274

 
274

 
185

 
14,290

 
18,524

 
15,254

 
18

Real estate construction:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
One-to-four family residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Land and acquisition
 
17,813

 
7,388

 
450

 
948

 

 
6,938

 
11,978

 
8,972

 
116

Residential construction
 
18,847

 
5,084

 
59

 
1,509

 
59

 
5,025

 
5,116

 
4,535

 

Commercial & multifamily residential
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Income property multifamily
 
13,810

 
7,067