Question-and-Answer Session
Operator
(Operator Instructions) Your first question comes from Matthew Clark with KBW.
Matthew Clark - KBW
Hi. Good morning guys.
Ray Davis
Good morning.
Matthew Clark - KBW
Can you maybe first just talk about the Impairment Reserve of $16.2 million that you guys have taken on the non-performers of $67 million, $68 million? I guess that implies about 24% severity.
Could you give us a sense as to how we should think about that and whether that's enough for, I guess, the Northern California market that has seen land values that have been down arguably anywhere from 40% to 50%, and what that means for underlying collateral?
Ray Davis
Matt, this is Ray. Obviously, each of these credits are looked at on an individual basis, and Impairments, depending on the size of Impairment range, we don't look at it as a group, nor do we make conclusions from what the overall percentage is, up or down.
We look at them on a loan-by-loan basis, and that's the way this has been computed.
Matthew Clark - KBW
Okay. And then as it relates to reserving going forward, I will assume, as you guys negotiate and take write-downs on -- or write off some of these problem loans, it's going to bleed the reserve back down.
I guess, can you talk about how you think about reserving from here? And I would assume we wouldn't return to the 115 that we saw last quarter, but I would assume we trend down some?
Ray Davis
I think that's a fair assessment. I think that obviously, as we mentioned in our comments that we've been very aggressive in increasing the reserve to protect the earnings flow for the future periods.
And I am glad you bring it up in fact, because clearly, whatever charge-offs we have on these particular loans that we have already addressed, will not impact earnings. It will be an allowance adjustment.
It will -- I'm sure that, yes, the answer to the question is, I'm sure it will come down, but I don't believe it will be a steep decrease.
Matthew Clark - KBW
Okay. And then finally, can you just talk about your ability to grow C&I here this quarter? Looks like a 56% annualized rate in California. I'm just curious as to how you're able to do that.
I know it's a competitive product that everybody wants to grow these days, so just curious as to how you are running the business?
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