LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES | NOTE 7 — LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES The Company’s held-for-investment loan portfolio includes originated and purchased loans. Originated and purchased loans with no evidence of credit deterioration at their acquisition date are referred to collectively as non-PCI loans. Purchased credit impaired (“PCI”) loans are loans acquired with evidence of credit deterioration since their origination and it is probable at the acquisition date that the Company would be unable to collect all contractually required payments. PCI loans are accounted for under ASC Subtopic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality . The Company has elected to account for PCI loans on a pool level basis in accordance with ASC 310-30 at the time of acquisition. The following table presents the composition of the Company’s non-PCI and PCI loans as of June 30, 2016 and December 31, 2015 : ($ in thousands) June 30, 2016 December 31, 2015 Non-PCI Loans PCI Loans (1) Total (1) Non-PCI Loans PCI Loans (1) Total (1) CRE: Income producing $ 7,364,321 $ 448,412 $ 7,812,733 $ 6,937,199 $ 541,275 $ 7,478,474 Construction 522,967 — 522,967 436,776 1,895 438,671 Land 138,342 2,640 140,982 187,409 6,195 193,604 Total CRE 8,025,630 451,052 8,476,682 7,561,384 549,365 8,110,749 C&I: Commercial business 8,402,526 46,610 8,449,136 8,155,991 57,906 8,213,897 Trade finance 714,656 12 714,668 787,800 1,310 789,110 Total C&I 9,117,182 46,622 9,163,804 8,943,791 59,216 9,003,007 Residential: Single-family 3,027,217 158,814 3,186,031 2,877,286 189,633 3,066,919 Multifamily 1,230,358 115,911 1,346,269 1,374,718 148,277 1,522,995 Total residential 4,257,575 274,725 4,532,300 4,252,004 337,910 4,589,914 Consumer 2,041,786 21,644 2,063,430 1,931,828 24,263 1,956,091 Total loans $ 23,442,173 $ 794,043 $ 24,236,216 $ 22,689,007 $ 970,754 $ 23,659,761 Unearned fees, premiums, and discounts, net 151 — 151 (16,013 ) — (16,013 ) Allowance for loan losses (266,511 ) (257 ) (266,768 ) (264,600 ) (359 ) (264,959 ) Loans, net $ 23,175,813 $ 793,786 $ 23,969,599 $ 22,408,394 $ 970,395 $ 23,378,789 (1) Loans net of ASC 310-30 discount. The Company’s CRE segment provides financing for income producing properties, construction properties and land. Commercial business and trade finance in the C&I segment provide financing to small and middle market businesses in a wide spectrum of industries. This includes loans for working capital, accounts receivable and inventory lines of credit, Small Business Administration loans, lease financing and financing to international trade companies with trade financial services and products, including letters of credit, revolving lines of credit, import loans, bankers’ acceptances, working capital lines of credit, domestic purchase financing and pre-export financing. The Company’s adjustable rate mortgage (“ARM”) single-family residential loans are comprised primarily of first mortgage loans secured by one -to- four unit residential properties. The Company’s ARM single-family residential loan programs generally have a one -year, three -year or five -year initial fixed period. The Company’s multifamily residential loans are comprised primarily of variable rate loans that have a six -month or three -year initial fixed period. As of June 30, 2016 and December 31, 2015 , consumer loans were comprised primarily of home equity lines of credit. All loans originated are subject to the Company’s underwriting guidelines and loan origination standards. Management believes that the Company’s underwriting criteria and procedures adequately consider the unique risks which may come from these products. The Company conducts a variety of quality control procedures and periodic audits, including review of criteria for lending and legal requirements, to ensure it is in compliance with its origination standards. As of June 30, 2016 and December 31, 2015 , loans totaling $16.05 billion and $15.91 billion , respectively, were pledged to secure borrowings and to provide additional borrowing capacity from the FHLB and the Federal Reserve Bank. Credit Quality Indicators All loans are subject to the Company’s internal and external credit review and monitoring. Loans are risk rated based on an analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of all repayment sources, the borrower’s current payment performance/delinquency, current financial and liquidity status and all other relevant information. For single-family residential loans, payment performance/delinquency is the driving indicator for the risk ratings. Risk ratings are the overall credit quality indicator for the Company and the credit quality indicator utilized for estimating the appropriate allowance for loan losses. The Company utilizes a risk rating system, which can be classified within the following categories: Pass, Watch, Special Mention, Substandard, Doubtful and Loss. The risk ratings reflect the relative strength of the repayment sources. Pass and Watch loans are generally considered to have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. These borrowers may have some credit risks that require monitoring, but full repayments are expected. Special Mention loans are considered to have potential weaknesses that warrant closer attention by management. Special Mention is considered a transitory grade. If potential weaknesses are resolved, the loan is upgraded to a Pass or Watch grade. If negative trends in the borrower’s financial status or other information indicates that the repayment sources may become inadequate, the loan is downgraded to a Substandard grade. Substandard loans are considered to have well-defined weaknesses that jeopardize the full and timely repayment of the loan. Substandard loans have a distinct possibility of loss, if the deficiencies are not corrected. Additionally, when management has assessed a potential for loss but a distinct possibility of loss is not recognizable, the loan is still classified as Substandard. Doubtful loans have insufficient sources of repayment and a high probability of loss. Loss loans are considered to be uncollectible and of such little value that they are no longer considered bankable assets. These internal risk ratings are reviewed routinely and adjusted based on changes in the borrowers’ financial status and collectability. The following tables present the credit risk rating for non-PCI loans by portfolio segment as of June 30, 2016 and December 31, 2015 : ($ in thousands) Pass/Watch Special Mention Substandard Doubtful Total Non-PCI Loans June 30, 2016 CRE: Income producing $ 7,086,172 $ 51,802 $ 226,347 $ — $ 7,364,321 Construction 519,345 3,622 — — 522,967 Land 124,379 — 13,953 10 138,342 C&I: Commercial business 7,998,058 139,189 234,391 30,888 8,402,526 Trade finance 688,080 1,600 21,271 3,705 714,656 Residential: Single-family 3,002,316 7,035 17,866 — 3,027,217 Multifamily 1,177,818 — 52,540 — 1,230,358 Consumer 2,032,848 3,728 5,210 — 2,041,786 Total $ 22,629,016 $ 206,976 $ 571,578 $ 34,603 $ 23,442,173 ($ in thousands) Pass/Watch Special Mention Substandard Doubtful Total Non-PCI Loans December 31, 2015 CRE: Income producing $ 6,672,951 $ 59,309 $ 204,939 $ — $ 6,937,199 Construction 435,112 1,194 470 — 436,776 Land 172,189 — 15,220 — 187,409 C&I: Commercial business 7,794,735 201,280 135,449 24,527 8,155,991 Trade finance 750,144 13,812 23,844 — 787,800 Residential: Single-family 2,841,722 8,134 27,430 — 2,877,286 Multifamily 1,317,550 2,918 54,250 — 1,374,718 Consumer 1,926,418 883 4,527 — 1,931,828 Total $ 21,910,821 $ 287,530 $ 466,129 $ 24,527 $ 22,689,007 The following tables present the credit risk rating for PCI loans by portfolio segment as of June 30, 2016 and December 31, 2015 : ($ in thousands) Pass/Watch Special Mention Substandard Total PCI Loans June 30, 2016 CRE: Income producing $ 363,469 $ 10,866 $ 74,077 $ 448,412 Construction — — — — Land 2,248 — 392 2,640 C&I: Commercial business 37,284 4,648 4,678 46,610 Trade finance 12 — — 12 Residential: Single-family 155,941 1,227 1,646 158,814 Multifamily 99,886 — 16,025 115,911 Consumer 20,266 452 926 21,644 Total (1) $ 679,106 $ 17,193 $ 97,744 $ 794,043 ($ in thousands) Pass/Watch Special Mention Substandard Total PCI Loans December 31, 2015 CRE: Income producing $ 440,100 $ 4,987 $ 96,188 $ 541,275 Construction — — 1,895 1,895 Land 4,285 — 1,910 6,195 C&I: Commercial business 52,212 819 4,875 57,906 Trade finance 1,310 — — 1,310 Residential: Single-family 184,092 1,293 4,248 189,633 Multifamily 130,770 — 17,507 148,277 Consumer 23,121 452 690 24,263 Total (1) $ 835,890 $ 7,551 $ 127,313 $ 970,754 (1) Loans net of ASC 310-30 discount. Nonaccrual and Past Due Loans Non-PCI loans that are 90 or more days past due are generally placed on nonaccrual status. Additionally, non-PCI loans that are not 90 or more days past due but have identified deficiencies are also placed on nonaccrual status. The following tables present the aging analysis on non-PCI loans as of June 30, 2016 and December 31, 2015 : ($ in thousands) Accruing Loans 30-59 Days Past Due Accruing Loans 60-89 Days Past Due Total Accruing Past Due Loans Nonaccrual Loans Less Than 90 Days Past Due Nonaccrual Loans 90 or More Days Past Due Total Nonaccrual Loans Current Accruing Loans Total Non-PCI Loans June 30, 2016 CRE: Income producing $ 3,557 $ 2,992 $ 6,549 $ 17,860 $ 41,390 $ 59,250 $ 7,298,522 $ 7,364,321 Construction — — — — — — 522,967 522,967 Land 3,340 630 3,970 5,779 10 5,789 128,583 138,342 C&I: Commercial business 4,455 426 4,881 54,516 19,411 73,927 8,323,718 8,402,526 Trade finance — — — 4,734 3,705 8,439 706,217 714,656 Residential: Single-family 5,038 3,264 8,302 2,378 2,739 5,117 3,013,798 3,027,217 Multifamily 4,328 337 4,665 6,474 10,845 17,319 1,208,374 1,230,358 Consumer 5,189 2,261 7,450 131 1,608 1,739 2,032,597 2,041,786 Total $ 25,907 $ 9,910 $ 35,817 $ 91,872 $ 79,708 $ 171,580 $ 23,234,776 $ 23,442,173 ($ in thousands) Accruing Loans 30-59 Days Past Due Accruing Loans 60-89 Days Past Due Total Accruing Past Due Loans Nonaccrual Loans Less Than 90 Days Past Due Nonaccrual Loans 90 or More Days Past Due Total Nonaccrual Loans Current Accruing Loans Total Non-PCI Loans December 31, 2015 CRE: Income producing $ 3,465 $ 25,256 $ 28,721 $ 11,359 $ 17,870 $ 29,229 $ 6,879,249 $ 6,937,199 Construction — — — 14 — 14 436,762 436,776 Land 1,124 — 1,124 277 406 683 185,602 187,409 C&I: Commercial business 1,992 1,185 3,177 50,726 14,009 64,735 8,088,079 8,155,991 Trade finance — — — — — — 787,800 787,800 Residential: Single-family 7,657 2,927 10,584 92 8,634 8,726 2,857,976 2,877,286 Multifamily 6,320 981 7,301 6,486 9,758 16,244 1,351,173 1,374,718 Consumer 2,078 209 2,287 233 1,505 1,738 1,927,803 1,931,828 Total $ 22,636 $ 30,558 $ 53,194 $ 69,187 $ 52,182 $ 121,369 $ 22,514,444 $ 22,689,007 For information on the policy for recording payments received and resuming accrual of interest on non-PCI loans that are placed on nonaccrual status, please see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2015 Form 10-K. PCI loans are excluded from the above aging analysis tables as the Company has elected to account for these loans on a pool level basis in accordance with ASC 310-30 at the time of acquisition. Please refer to the discussion on PCI loans within this note for additional details on interest income recognition. As of June 30, 2016 and December 31, 2015 , PCI loans on nonaccrual status totaled $31.4 million and $37.7 million , respectively. Loans in Process of Foreclosure As of June 30, 2016 and December 31, 2015 , the Company had $14.2 million and $18.0 million , respectively, of recorded investment in consumer mortgage loans secured by residential real estate properties, for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdictions, which were not included in OREO. No foreclosed residential real estate properties were included in total net OREO of $4.9 million as of June 30, 2016 . In comparison, foreclosed residential real estate properties with a carrying amount of $912 thousand were included in total net OREO of $7.0 million as of December 31, 2015 . Troubled Debt Restructurings (“TDRs”) Potential TDRs are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty in order to maximize the Company’s recovery. A TDR is a modification of the terms of a loan when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower, it would not otherwise consider. The following tables present the additions to non-PCI TDRs for the three and six months ended June 30, 2016 and 2015 : Loans Modified as TDRs During the Three Months Ended June 30, ($ in thousands) 2016 2015 Number Pre-Modification Post-Modification (1) Financial (2) Number Pre-Modification Post-Modification (1) Financial (2) CRE: Income producing 2 $ 2,152 $ 2,150 $ 43 — $ — $ — $ — Land 1 $ 5,522 $ 5,279 $ — 1 $ 171 $ 100 $ 102 C&I: Commercial business 1 $ 75 $ 75 $ 12 12 $ 37,924 $ 38,117 $ 5,465 Residential: Single-family 1 $ 795 $ 795 $ — — $ — $ — $ — Loans Modified as TDRs During the Six Months Ended June 30, ($ in thousands) 2016 2015 Number Pre-Modification Post-Modification (1) Financial (2) Number Pre-Modification Post-Modification (1) Financial (2) CRE: Income producing 3 $ 15,899 $ 15,802 $ 43 1 $ 828 $ 818 $ — Land 1 $ 5,522 $ 5,279 $ — 1 $ 171 $ 100 $ 102 C&I: Commercial business 5 $ 21,689 $ 15,842 $ 2,618 13 $ 38,090 $ 38,280 $ 5,497 Trade finance 2 $ 7,901 $ 9,256 $ — — $ — $ — $ — Residential: Single-family 2 $ 1,071 $ 1,064 $ — 1 $ 281 $ 281 $ 2 Consumer: 1 $ 344 $ 338 $ 1 — $ — $ — $ — (1) Includes subsequent payments after modification and reflects the balance as of June 30, 2016 and 2015 . (2) The financial impact includes charge-offs and specific reserves recorded at the modification date. The following tables present the non-PCI TDR modifications for the three and six months ended June 30, 2016 and 2015 by modification type: ($ in thousands) Modification Type 2016 2015 Principal (1) Interest Rate Reduction Other Total Principal (1) Principal and Interest (2) Interest Deferments Other Total Three Months Ended June 30, CRE $ 6,275 $ — $ 1,154 $ 7,429 $ — $ — $ — $ 100 $ 100 C&I 75 — — 75 13,488 18,629 6,000 — 38,117 Residential — 795 — 795 — — — — — Total $ 6,350 $ 795 $ 1,154 $ 8,299 $ 13,488 $ 18,629 $ 6,000 $ 100 $ 38,217 ($ in thousands) Modification Type 2016 2015 Principal (1) Interest Rate Reduction Other Total Principal (1) Principal and Interest (2) Interest Deferments Other Total Six Months Ended June 30, CRE $ 19,927 $ — $ 1,154 $ 21,081 $ — $ 818 $ — $ 100 $ 918 C&I 18,589 1,986 4,523 25,098 13,651 18,629 6,000 — 38,280 Residential 269 795 — 1,064 281 — — — 281 Consumer 338 — — 338 — — — — — Total $ 39,123 $ 2,781 $ 5,677 $ 47,581 $ 13,932 $ 19,447 $ 6,000 $ 100 $ 39,479 (1) Principal modification includes forbearance payments, term extensions and principal deferments that modify the terms of the loan from principal and interest payments to interest payments only. (2) Principal and interest modification includes principal and interest deferments or reductions. Subsequent to restructuring, a TDR that becomes delinquent, generally beyond 90 days, is considered to have defaulted. There were no subsequent defaults during the three months ended June 30, 2016 and 2015 for non-PCI loans that were modified as TDRs within the previous 12 months. The following table presents information for loans modified as TDRs within the previous 12 months that have subsequently defaulted during the six months ended June 30, 2016 and 2015 , and are still in default at period end: Loans Modified as TDRs that Subsequently Defaulted During the Six Months Ended June 30, 2016 2015 ($ in thousands) Number of Recorded Number of Recorded C&I: Commercial business 3 $ 568 — $ — The amount of additional funds committed to lend to borrowers whose terms have been modified was $4.3 million as of June 30, 2016 . The amount of additional funds committed to lend to borrowers whose terms have been modified was immaterial as of December 31, 2015 . Impaired Loans The Company’s loans are grouped into heterogeneous and homogeneous (mostly consumer loans) categories. Classified loans in the heterogeneous category are identified and evaluated for impairment on an individual basis. A loan is considered impaired when, based on current information and events, it is probable that the Company will not be able to collect all scheduled payments of principal or interest due in accordance with the original contractual terms. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as expedient, at the loan’s observable market price or the fair value of the collateral, if the loan is collateral dependent, less costs to sell. When the value of an impaired loan is less than the recorded investment and the loan is classified as nonperforming and uncollectible, the deficiency is charged-off against the allowance for loan losses. Impaired loans exclude the homogeneous consumer loan portfolio, which is evaluated collectively for impairment. The Company’s impaired loans include predominantly non-PCI loans held-for-investment on nonaccrual status and any non-PCI loans modified in a TDR, which may be on accrual or nonaccrual status. The following tables present information on impaired non-PCI loans as of June 30, 2016 and December 31, 2015 : ($ in thousands) Unpaid Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance June 30, 2016 CRE: Income producing $ 86,401 $ 59,990 $ 17,763 $ 77,753 $ 464 Land 6,910 5,279 1,114 6,393 74 C&I: Commercial business 115,023 32,444 65,559 98,003 21,260 Trade finance 13,158 9,256 3,775 13,031 22 Residential: Single-family 14,154 2,378 10,294 12,672 378 Multifamily 26,606 18,375 6,313 24,688 271 Consumer 1,577 — 1,577 1,577 45 Total $ 263,829 $ 127,722 $ 106,395 $ 234,117 $ 22,514 ($ in thousands) Unpaid Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance December 31, 2015 CRE: Income producing $ 47,043 $ 24,347 $ 15,720 $ 40,067 $ 3,148 Construction 66 — 14 14 1 Land 1,537 632 683 1,315 118 C&I: Commercial business 81,720 31,045 40,111 71,156 15,993 Trade finance 10,675 — 10,675 10,675 95 Residential: Single-family 16,486 4,401 10,611 15,012 584 Multifamily 25,634 16,944 6,783 23,727 339 Consumer 1,240 — 1,240 1,240 60 Total $ 184,401 $ 77,369 $ 85,837 $ 163,206 $ 20,338 The following table presents the average recorded investment and interest income recognized on non-PCI impaired loans during the three and six months ended June 30, 2016 and 2015 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Average Recognized (1) Average Recognized (1) Average Recorded Investment Recognized Interest Income (1) Average Recognized Interest Income (1) CRE: Income producing $ 78,623 $ 404 $ 46,042 $ 134 $ 79,549 $ 816 $ 46,897 $ 268 Construction — — 14 — — — 14 — Land 6,690 8 5,876 10 6,859 17 5,951 20 C&I: Commercial business 100,124 270 73,306 761 100,308 530 71,644 1,550 Trade finance 12,716 67 11,623 51 13,514 133 11,739 134 Residential: Single-family 12,713 74 15,595 68 12,797 148 15,658 137 Multifamily 24,836 77 23,690 190 25,045 154 23,757 379 Consumer 1,582 16 1,256 12 1,586 31 1,258 23 Total impaired non-PCI loans $ 237,284 $ 916 $ 177,402 $ 1,226 $ 239,658 $ 1,829 $ 176,918 $ 2,511 (1) Includes interest recognized on accruing non-PCI TDRs. Interest payments received on nonaccrual non-PCI loans are reflected as a reduction to principal and not as interest income. Allowance for Credit Losses The following tables present a summary of activities in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2016 and 2015 : ($ in thousands) Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total Three Months Ended June 30, 2016 Beginning balance $ 82,538 $ 134,077 $ 33,935 $ 9,360 $ 259,910 $ 328 $ 260,238 (Reversal of) provision for loan losses (4,439 ) 15,347 (2,671 ) (1,017 ) 7,220 (71 ) 7,149 Charge-offs (139 ) (2,214 ) — (3 ) (2,356 ) — (2,356 ) Recoveries 142 1,217 297 81 1,737 — 1,737 Net recoveries (charge-offs) 3 (997 ) 297 78 (619 ) — (619 ) Ending balance $ 78,102 $ 148,427 $ 31,561 $ 8,421 $ 266,511 $ 257 $ 266,768 ($ in thousands) Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total Three Months Ended June 30, 2015 Beginning balance $ 69,740 $ 133,914 $ 42,990 $ 10,451 $ 257,095 $ 643 $ 257,738 Provision for (reversal of) loan losses 5,739 (2,716 ) (3,318 ) (289 ) (584 ) (31 ) (615 ) Charge-offs (348 ) (2,843 ) (1 ) — (3,192 ) — (3,192 ) Recoveries 365 5,607 997 329 7,298 — 7,298 Net recoveries 17 2,764 996 329 4,106 — 4,106 Ending balance $ 75,496 $ 133,962 $ 40,668 $ 10,491 $ 260,617 $ 612 $ 261,229 ($ in thousands) Non-PCI Loans PCI Loans CRE C&I Residential Consumer Total Total Six Months Ended June 30, 2016 Beginning balance $ 81,191 $ 134,597 $ 39,292 $ 9,520 $ 264,600 $ 359 $ 264,959 (Reversal of) provision for loan losses (3,133 ) 20,001 (7,988 ) (1,243 ) 7,637 (102 ) 7,535 Charge-offs (195 ) (8,074 ) (137 ) (4 ) (8,410 ) — (8,410 ) Recoveries 239 1,903 394 148 2,684 — 2,684 Net recoveries (charge-offs) 44 (6,171 ) 257 144 (5,726 ) — (5,726 ) Ending balance $ 78,102 $ 148,427 $ 31,561 $ 8,421 $ 266,511 $ 257 $ 266,768 ($ in thousands) Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total Six Months Ended June 30, 2015 Beginning balance $ 72,263 $ 134,598 $ 43,856 $ 10,248 $ 260,965 $ 714 $ 261,679 Provision for (reversal of) loan losses 3,406 2,662 (4,889 ) 375 1,554 (102 ) 1,452 Charge-offs (1,350 ) (9,432 ) (747 ) (463 ) (11,992 ) — (11,992 ) Recoveries 1,177 6,134 2,448 331 10,090 — 10,090 Net (charge-offs) recoveries (173 ) (3,298 ) 1,701 (132 ) (1,902 ) — (1,902 ) Ending balance $ 75,496 $ 133,962 $ 40,668 $ 10,491 $ 260,617 $ 612 $ 261,229 For further information on accounting policies and the methodology used to estimate the allowance for credit losses and loan charge-offs, please see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2015 Form 10-K. The following table presents a summary of activities in the allowance for unfunded credit reserves during the three and six months ended June 30, 2016 and 2015 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ 21,414 $ 15,632 $ 20,360 $ 12,712 (Reversal of) provision for unfunded lending commitments (1,096 ) 4,109 (42 ) 7,029 Ending balance $ 20,318 $ 19,741 $ 20,318 $ 19,741 The allowance for unfunded credit reserves is maintained at a level believed by management to be sufficient to absorb estimated probable losses related to unfunded credit facilities. The allowance for unfunded credit reserves is included in Accrued expense and other liabilities on the Consolidated Balance Sheets. Please refer to Note 10 — Commitments And Contingencies to the Consolidated Financial Statements for additional information related to unfunded credit reserves. The following tables present the Company’s allowance for loan losses and recorded investments by portfolio segment and impairment methodology as of June 30, 2016 and December 31, 2015 : ($ in thousands) CRE C&I Residential Consumer Total As of June 30, 2016 Allowance for loan losses Individually evaluated for impairment $ 538 $ 21,282 $ 649 $ 45 $ 22,514 Collectively evaluated for impairment 77,564 127,145 30,912 8,376 243,997 Acquired with deteriorated credit quality 243 8 6 — 257 Ending balance $ 78,345 $ 148,435 $ 31,567 $ 8,421 $ 266,768 Recorded investment in loans Individually evaluated for impairment $ 84,146 $ 111,034 $ 37,360 $ 1,577 $ 234,117 Collectively evaluated for impairment 7,941,484 9,006,148 4,220,215 2,040,209 23,208,056 Acquired with deteriorated credit quality (1) 451,052 46,622 274,725 21,644 794,043 Ending balance (1) $ 8,476,682 $ 9,163,804 $ 4,532,300 $ 2,063,430 $ 24,236,216 ($ in thousands) CRE C&I Residential Consumer Total As of December 31, 2015 Allowance for loan losses Individually evaluated for impairment $ 3,267 $ 16,088 $ 923 $ 60 $ 20,338 Collectively evaluated for impairment 77,924 118,509 38,369 9,460 244,262 Acquired with deteriorated credit quality 347 9 3 — 359 Ending balance $ 81,538 $ 134,606 $ 39,295 $ 9,520 $ 264,959 Recorded investment in loans Individually evaluated for impairment $ 41,396 $ 81,831 $ 38,739 $ 1,240 $ 163,206 Collectively evaluated for impairment 7,519,988 8,861,960 4,213,265 1,930,588 22,525,801 Acquired with deteriorated credit quality (1) 549,365 59,216 337,910 24,263 970,754 Ending balance (1) $ 8,110,749 $ 9,003,007 $ 4,589,914 $ 1,956,091 $ 23,659,761 (1) Loans net of ASC 310-30 discount. PCI Loans At the date of acquisition, PCI loans are pooled and accounted for at fair value, which represents the discounted value of the expected cash flows of the loan portfolio. The amount of expected cash flows over the initial investment in the loan represents the “accretable yield,” which is recognized as interest income on a level yield basis over the life of the loan. The excess of total contractual cash flows over the cash flows expected to be received at origination is deemed as the “nonaccretable difference.” The following table presents the changes in accretable yield for PCI loans for the three and six months ended June 30, 2016 and 2015 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2016 2015 2016 2015 Beginning balance $ 185,991 $ 293,155 $ 214,907 $ 311,688 Accretion (16,254 ) (23,359 ) (38,683 ) (53,928 ) Changes in expected cash flows (2,960 ) 2,066 (9,447 ) 14,102 Ending balance $ 166,777 $ 271,862 $ 166,777 $ 271,862 Loans Held for Sale Loans held for sale are carried at the LOCOM. When a determination is made at the time of commitment to originate or purchase loans as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic review under the Company’s management evaluation processes, including asset/liability management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from the loans held-for-investment portfolio to the loans held for sale portfolio at LOCOM. Loans held for sale amounted to $51.3 million as of June 30, 2016 , and comprised mainly of multifamily residential and consumer loans. In comparison, as of December 31, 2015 loans held for sale amounted to $32.0 million and comprised of consumer loans. Transfers of loans held-for-investment to loans held for sale were $267.1 million and $575.8 million , respectively, for the three and six months ended June 30, 2016 . These loans transfers were comprised of multifamily residential, C&I and CRE loans. In comparison, loans held-for-investment transferred to loans held for sale of $335.7 million and $1.16 billion , respectively, for the three and six months ended June 30, 2015 , were comprised primarily of single-family residential loans and C&I loans. The Company recorded $37 thousand and $1.9 million in write-downs to the allowance for loan losses related to loans transferred from loans held-for-investment to loans held for sale for the three and six months ended June 30, 2016 , respectively. In comparison, the Company recorded $441 thousand and $2.1 million in write-downs to the allowance for loan losses related to loans transferred from loans held-for-investment to loans held for sale for the three and six months ended June 30, 2015 , respectively. During the three months ended June 30, 2016 and 2015 , the Company sold $166.0 million and $232.3 million , respectively, in originated loans resulting in net gains of $2.8 million and $5.8 million , respectively. During the six months ended June 30, 2016 the Company sold or securitized approximately $422.2 million in originated loans resulting in net gains of $7.1 million . During the six months ended June 30, 2016 , the Company recorded $1.1 million in net gains and $641 thousand in mortgage servicing rights, and retained $160.1 million of the senior tranche of the resulting securities from the securitization of $201.7 million of multifamily residential loans. Originated loans sold or securitized during the six months ended June 30, 2016 were primarily comprised of multifamily residential, CRE and C&I loans. In comparison, during the six months ended June 30, 2015 , the Company sold $559.1 million in originated loans, which were primarily comprised of single-family residential and C&I loans, resulting in net gains of $14.3 million . From time to time, the Company purchases loans (including participation loans) and sells loans in the secondary market. The Company sold approximately $79.7 million and $133.6 million of loans in the secondary market, respectively, resulting in gains on sales of loans of $69 thousand for both the three and six months ended June 30, 2016 . In comparison, the Company sold approximately $103.1 million and $446.1 million of loans in the secondary market at net gains of $30 thousand and $1.0 million for the three and six months ended June 30, 2015 , respectively. No LOCOM adjustments related to the loans held for sale portfolio were recorded for three months ended June 30, 2016 , compared to the $517 thousand recorded for the three months ended June 30, 2015 . For the six months ended June 30, 2016 and 2015 , the Company recorded $2.4 million and $517 thousand , respectively, in LOCOM adjustments related to the loans held for sale portfolio. LOCOM adjustments are recorded in Net gains on sales of loans on the Consolidated Statements of Income. |