Loans Receivable and Allowance for Credit Losses | Note 8 — 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. 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 under 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, 2017 and December 31, 2016 : ($ in thousands) June 30, 2017 December 31, 2016 Non-PCI Loans (1) PCI Loans (2) Total (1)(2) Non-PCI Loans (1) PCI Loans (2) Total (1)(2) CRE: Income producing $ 8,141,483 $ 323,547 $ 8,465,030 $ 7,667,661 $ 348,448 $ 8,016,109 Construction 550,781 — 550,781 551,560 — 551,560 Land 108,795 1,243 110,038 121,276 1,918 123,194 Total CRE 8,801,059 324,790 9,125,849 8,340,497 350,366 8,690,863 C&I: Commercial business 9,403,575 20,661 9,424,236 8,921,246 38,387 8,959,633 Trade finance 763,113 — 763,113 680,930 — 680,930 Total C&I 10,166,688 20,661 10,187,349 9,602,176 38,387 9,640,563 Residential: Single-family 3,873,803 127,685 4,001,488 3,370,669 139,110 3,509,779 Multifamily 1,696,978 75,763 1,772,741 1,490,285 95,654 1,585,939 Total residential 5,570,781 203,448 5,774,229 4,860,954 234,764 5,095,718 Consumer 2,106,683 16,556 2,123,239 2,057,067 18,928 2,075,995 Total loans held-for-investment $ 26,645,211 $ 565,455 $ 27,210,666 $ 24,860,694 $ 642,445 $ 25,503,139 Allowance for loan losses (276,238 ) (78 ) (276,316 ) (260,402 ) (118 ) (260,520 ) Loans held-for-investment, net $ 26,368,973 $ 565,377 $ 26,934,350 $ 24,600,292 $ 642,327 $ 25,242,619 (1) Includes $(9.6) million and $1.2 million as of June 30, 2017 and December 31, 2016 , respectively, of net deferred loan fees, unamortized premiums and unaccreted discounts. (2) Loans net of ASC 310-30 discount. CRE loans include income producing real estate, construction and land loans where the interest rates may be fixed, variable or hybrid. Included in CRE loans are owner occupied and non-owner occupied loans where the borrowers rely on income from tenants to service the loan. Commercial business and trade finance in the C&I segment provide financing to businesses in a wide spectrum of industries. Residential loans are comprised of single-family and multifamily loans. The Company offers first lien mortgage loans secured by one-to-four unit residential properties located in its primary lending areas. The Company offers a variety of first lien mortgage loan programs, including fixed rate conforming loans and adjustable rate mortgage loans with initial fixed periods of one to seven years, which adjust annually thereafter. Consumer loans are comprised of home equity lines of credit (“HELOCs”), insurance premium financing loans, credit card and auto loans. As of June 30, 2017 and December 31, 2016 , the Company’s HELOCs were the largest component of the consumer loan portfolio, and were secured by one-to-four unit residential properties located in its primary lending areas. The HELOCs loan portfolio is largely comprised of loans originated through a reduced documentation loan program, where a substantial down payment is required, resulting in a low loan-to-value ratio, typically 60% or less at origination. The Company is in a first lien position for many of these reduced documentation HELOCs. These loans have historically experienced low delinquency and default rates. 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 associated with these products. The Company conducts a variety of quality control procedures and periodic audits, including the review of lending and legal requirements to ensure that it is in compliance with these requirements. As of June 30, 2017 and December 31, 2016 , loans totaling $17.59 billion and $16.44 billion , respectively, were pledged to secure borrowings and to provide additional borrowing capacity from the Federal Reserve Bank and the FHLB. 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. 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 indicate 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 the loans’ collectability. The following tables present the credit risk ratings for non-PCI loans by portfolio segment as of June 30, 2017 and December 31, 2016 : ($ in thousands) June 30, 2017 Pass/Watch Special Mention Substandard Doubtful Loss Total CRE: Income producing $ 8,003,443 $ 18,859 $ 119,181 $ — $ — $ 8,141,483 Construction 521,240 20,548 8,993 — — 550,781 Land 93,691 — 15,104 — — 108,795 C&I: Commercial business 9,049,939 160,656 168,139 24,841 — 9,403,575 Trade finance 728,700 21,176 13,237 — — 763,113 Residential: Single-family 3,838,847 10,216 24,740 — — 3,873,803 Multifamily 1,676,251 — 20,727 — — 1,696,978 Consumer 2,085,524 6,230 14,929 — — 2,106,683 Total $ 25,997,635 $ 237,685 $ 385,050 $ 24,841 $ — $ 26,645,211 ($ in thousands) December 31, 2016 Pass/Watch Special Mention Substandard Doubtful Loss Total Non-PCI Loans CRE: Income producing $ 7,476,804 $ 29,005 $ 161,852 $ — $ — $ 7,667,661 Construction 551,560 — — — — 551,560 Land 107,976 — 13,290 10 — 121,276 C&I: Commercial business 8,559,674 155,276 201,139 5,157 — 8,921,246 Trade finance 635,027 9,435 36,460 — 8 680,930 Residential: Single-family 3,341,015 10,179 19,475 — — 3,370,669 Multifamily 1,462,522 2,268 25,495 — — 1,490,285 Consumer 2,043,405 6,764 6,898 — — 2,057,067 Total $ 24,177,983 $ 212,927 $ 464,609 $ 5,167 $ 8 $ 24,860,694 The following tables present the credit risk ratings for PCI loans by portfolio segment as of June 30, 2017 and December 31, 2016 : ($ in thousands) June 30, 2017 Pass/Watch Special Mention Substandard Doubtful Loss Total PCI Loans CRE: Income producing $ 272,926 $ 472 $ 50,149 $ — $ — $ 323,547 Land 914 — 329 — — 1,243 C&I: Commercial business 17,312 585 2,764 — — 20,661 Residential: Single-family 124,216 1,506 1,963 — — 127,685 Multifamily 69,657 — 6,106 — — 75,763 Consumer 14,937 369 1,250 — — 16,556 Total (1) $ 499,962 $ 2,932 $ 62,561 $ — $ — $ 565,455 ($ in thousands) December 31, 2016 Pass/Watch Special Mention Substandard Doubtful Loss Total PCI Loans CRE: Income producing $ 293,529 $ 3,239 $ 51,680 $ — $ — $ 348,448 Land 1,562 — 356 — — 1,918 C&I: Commercial business 33,885 772 3,730 — — 38,387 Residential: Single-family 136,245 1,239 1,626 — — 139,110 Multifamily 86,190 — 9,464 — — 95,654 Consumer 17,433 316 1,179 — — 18,928 Total (1) $ 568,844 $ 5,566 $ 68,035 $ — $ — $ 642,445 (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 less than 90 days past due but have identified deficiencies, such as when the full collection of principal or interest becomes uncertain, are also placed on nonaccrual status. The following tables present the aging analysis on non-PCI loans as of June 30, 2017 and December 31, 2016 : ($ in thousands) June 30, 2017 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 CRE: Income producing $ 4,192 $ 1,285 $ 5,477 $ 5,438 $ 20,537 $ 25,975 $ 8,110,031 $ 8,141,483 Construction — — — — — — 550,781 550,781 Land 1,103 — 1,103 21 4,323 4,344 103,348 108,795 C&I: Commercial business 2,976 9,126 12,102 49,899 37,290 87,189 9,304,284 9,403,575 Trade finance — — — — — — 763,113 763,113 Residential: Single-family 4,581 3,367 7,948 — 7,624 7,624 3,858,231 3,873,803 Multifamily 3,611 368 3,979 966 1,712 2,678 1,690,321 1,696,978 Consumer 3,747 2,333 6,080 101 2,895 2,996 2,097,607 2,106,683 Total $ 20,210 $ 16,479 $ 36,689 $ 56,425 $ 74,381 $ 130,806 $ 26,477,716 $ 26,645,211 ($ in thousands) December 31, 2016 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 CRE: Income producing $ 6,233 $ 14,080 $ 20,313 $ 14,872 $ 12,035 $ 26,907 $ 7,620,441 $ 7,667,661 Construction 4,994 — 4,994 — — — 546,566 551,560 Land — — — 433 4,893 5,326 115,950 121,276 C&I: Commercial business 45,052 2,279 47,331 60,511 20,737 81,248 8,792,667 8,921,246 Trade finance — — — 8 — 8 680,922 680,930 Residential: Single-family 9,595 8,076 17,671 — 4,214 4,214 3,348,784 3,370,669 Multifamily 3,951 374 4,325 2,790 194 2,984 1,482,976 1,490,285 Consumer 3,327 3,228 6,555 165 1,965 2,130 2,048,382 2,057,067 Total $ 73,152 $ 28,037 $ 101,189 $ 78,779 $ 44,038 $ 122,817 $ 24,636,688 $ 24,860,694 For information on the policy for recording payments received and resuming accrual of interest on non-PCI loans that are placed on nonaccrual status, see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2016 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 under 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, 2017 and December 31, 2016 , PCI loans on nonaccrual status totaled $5.9 million and $11.7 million , respectively. Loans in Process of Foreclosure As of June 30, 2017 and December 31, 2016 , the Company had $4.8 million and $3.1 million , respectively, of recorded investment in residential and 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 $2.2 million as of June 30, 2017 . In comparison, foreclosed residential real estate properties with a carrying amount of $401 thousand were included in total net OREO of $6.7 million as of December 31, 2016 . Troubled Debt Restructurings (“TDRs”) Potential TDRs are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty in order to maximize the Company’s recovery. A TDR is a modification of the terms of a loan when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not have otherwise considered. The following tables present the additions to non-PCI TDRs for the three and six months ended June 30, 2017 and 2016 : Loans Modified as TDRs During the Three Months Ended June 30, ($ in thousands) 2017 2016 Number Pre- Modification Post- Modification (1) Financial (2) Number Pre- Modification Post- Modification (1) Financial (2) CRE: Income producing — $ — $ — $ — 2 $ 2,152 $ 2,157 $ 43 Land — $ — $ — $ — 1 $ 5,522 $ 5,279 $ — C&I: Commercial business 6 $ 17,039 $ 15,673 $ 10,010 1 $ 75 $ 81 $ 12 Residential: Single-family — $ — $ — $ — 1 $ 795 $ 803 $ — Multifamily 1 $ 3,655 $ 3,638 $ 107 — $ — $ — $ — Loans Modified as TDRs During the Six Months Ended June 30, ($ in thousands) 2017 2016 Number Pre- Modification Post- Modification (1) Financial (2) Number Pre- Modification Post- Modification (1) Financial (2) CRE: Income producing 1 $ 1,527 $ 1,494 $ — 3 $ 15,899 $ 15,811 $ 43 Land — $ — $ — $ — 1 $ 5,522 $ 5,279 $ — C&I: Commercial business 8 $ 18,189 $ 17,272 $ 11,202 5 $ 21,689 $ 15,810 $ 2,618 Trade finance — $ — $ — $ — 2 $ 7,901 $ 9,256 $ — Residential: Single-family — $ — $ — $ — 2 $ 1,071 $ 1,071 $ — Multifamily 1 $ 3,655 $ 3,638 $ 106 — $ — $ — $ — Consumer — $ — $ — $ — 1 $ 344 $ 340 $ 1 (1) Includes subsequent payments after modification and reflects the balance as of June 30, 2017 and 2016 . (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, 2017 and 2016 by modification type: ($ in thousands) Modification Type During the Three Months Ended June 30, 2017 2016 Principal (1) Principal and Interest (2) Other Total Principal (1) Principal and Interest (2) Other Total CRE $ — $ — $ — $ — $ 6,279 $ — $ 1,157 $ 7,436 C&I 3,388 12,285 — 15,673 81 — — 81 Residential 3,638 — — 3,638 — 803 — 803 Consumer — — — — — — — — Total $ 7,026 $ 12,285 $ — $ 19,311 $ 6,360 $ 803 $ 1,157 $ 8,320 ($ in thousands) Modification Type During the Six Months Ended June 30, 2017 2016 Principal (1) Principal and Interest (2) Other Total Principal (1) Principal and Interest (2) Other Total CRE $ 1,494 $ — $ — $ 1,494 $ 19,932 $ — $ 1,158 $ 21,090 C&I 3,388 13,884 — 17,272 18,559 1,986 4,521 25,066 Residential 3,638 — — 3,638 268 803 — 1,071 Consumer — — — — 340 — — 340 Total $ 8,520 $ 13,884 $ — $ 22,404 $ 39,099 $ 2,789 $ 5,679 $ 47,567 (1) 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) Includes principal and interest deferments or reductions. Subsequent to restructuring, a TDR that becomes delinquent, generally beyond 90 days, is considered to have defaulted. As TDRs are individually evaluated for impairment under the specific reserve methodology, subsequent defaults do not generally have a significant additional impact on the allowance for loan losses. The following tables present information for loans modified as TDRs within the previous 12 months that have subsequently defaulted during the three and six months ended June 30, 2017 and 2016 , and were still in default at the respective period end: ($ in thousands) Loans Modified as TDRs that Subsequently Defaulted During the Three Months Ended June 30, 2017 2016 Number of Recorded Number of Recorded Consumer 1 $ 48 — $ — ($ in thousands) Loans Modified as TDRs that Subsequently Defaulted During the Six Months Ended June 30, 2017 2016 Number of Recorded Number of Recorded C&I: Commercial business — $ — 3 $ 575 Consumer 1 $ 48 — $ — The amount of additional funds committed to lend to borrowers whose terms have been modified was $6.8 million and $9.9 million as of June 30, 2017 and December 31, 2016 , respectively. Impaired Loans The Company’s loans are grouped into heterogeneous and homogeneous (mostly consumer loans) categories. Classified loans in the heterogeneous category are identified and evaluated for impairment on an individual basis. A loan is considered impaired when, based on current information and events, it is probable that the Company will not be able to collect all scheduled payments of principal or interest due in accordance with the original contractual terms. Impaired loans are measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate or, as expedient, at the loan’s observable market price or the fair value of the collateral, if the loan is collateral dependent, less costs to sell. When the value of an impaired loan is less than the recorded investment and the loan is classified as nonperforming and uncollectible, the deficiency is charged-off against the allowance for loan losses. Impaired loans exclude the homogeneous consumer loan portfolio, which is evaluated collectively for impairment. The Company’s impaired loans include predominantly non-PCI loans held-for-investment on nonaccrual status and any non-PCI loans modified in a TDR, which may be on accrual or nonaccrual status. The following tables present information on the non-PCI impaired loans as of June 30, 2017 and December 31, 2016 : ($ in thousands) June 30, 2017 Unpaid Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance CRE: Income producing $ 37,672 $ 33,059 $ 4,598 $ 37,657 $ 702 Land 4,344 4,323 21 4,344 3 C&I: Commercial business 106,076 69,274 36,779 106,053 15,580 Trade finance 4,615 — 4,538 4,538 305 Residential: Single-family 16,956 4,161 12,788 16,949 492 Multifamily 12,657 6,135 6,531 12,666 206 Consumer 4,528 1,308 3,225 4,533 5 Total $ 186,848 $ 118,260 $ 68,480 $ 186,740 $ 17,293 ($ in thousands) December 31, 2016 Unpaid Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance CRE: Income producing $ 50,718 $ 32,507 $ 14,001 $ 46,508 $ 1,263 Land 6,457 5,427 443 5,870 63 C&I: Commercial business 162,239 78,316 42,137 120,453 10,443 Trade finance 5,227 — 5,166 5,166 34 Residential: Single-family 15,435 — 14,335 14,335 687 Multifamily 11,181 5,684 4,357 10,041 180 Consumer 4,016 — 3,682 3,682 31 Total $ 255,273 $ 121,934 $ 84,121 $ 206,055 $ 12,701 The following table presents the average recorded investment and interest income recognized on non-PCI impaired loans for the three and six months ended June 30, 2017 and 2016 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Average Recognized (1) Average Recognized (1) Average Recorded Investment Recognized Interest Income (1) Average Recognized Interest Income (1) CRE: Income producing $ 37,897 $ 33 $ 78,183 $ 404 $ 38,116 $ 80 $ 79,072 $ 816 Land 4,414 — 6,747 8 4,584 — 6,912 17 C&I: Commercial business 109,887 122 100,407 270 115,252 337 100,593 530 Trade finance 3,971 18 12,715 67 4,356 25 13,513 133 Residential: Single-family 16,985 35 12,735 74 17,038 93 12,818 148 Multifamily 12,720 81 24,858 77 12,771 129 25,067 154 Consumer 4,541 13 1,585 16 4,548 32 1,589 31 Total non-PCI impaired loans $ 190,415 $ 302 $ 237,230 $ 916 $ 196,665 $ 696 $ 239,564 $ 1,829 (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, 2017 and 2016 : ($ in thousands) Three Months Ended June 30, 2017 Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total Beginning balance $ 74,888 $ 137,510 $ 41,746 $ 8,863 $ 263,007 $ 87 $ 263,094 (Reversal of) provision for loan losses (1,413 ) 10,974 1,563 (444 ) 10,680 (9 ) 10,671 Charge-offs (1 ) (5,386 ) (1 ) (3 ) (5,391 ) — (5,391 ) Recoveries 511 7,038 371 22 7,942 — 7,942 Net recoveries 510 1,652 370 19 2,551 — 2,551 Ending balance $ 73,985 $ 150,136 $ 43,679 $ 8,438 $ 276,238 $ 78 $ 276,316 ($ in thousands) Three Months Ended June 30, 2016 Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total 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) Six Months Ended June 30, 2017 Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total Beginning balance $ 72,804 $ 142,166 $ 37,333 $ 8,099 $ 260,402 $ 118 $ 260,520 Provision for (reversal of) loan losses 226 12,920 5,398 182 18,726 (40 ) 18,686 Charge-offs (149 ) (12,443 ) (1 ) (7 ) (12,600 ) — (12,600 ) Recoveries 1,104 7,493 949 164 9,710 — 9,710 Net recoveries (charge-offs) 955 (4,950 ) 948 157 (2,890 ) — (2,890 ) Ending balance $ 73,985 $ 150,136 $ 43,679 $ 8,438 $ 276,238 $ 78 $ 276,316 ($ in thousands) Six Months Ended June 30, 2016 Non-PCI Loans PCI Loans Total CRE C&I Residential Consumer Total 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 For further information on accounting policies and the methodologies used to estimate the allowance for credit losses and loan charge-offs, see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2016 Form 10-K. The following table presents a summary of activities in the allowance for unfunded credit reserves for the three and six months ended June 30, 2017 and 2016 : ($ in thousands) Three Months Ended Six Months Ended 2017 2016 2017 2016 Beginning balance $ 15,174 $ 21,414 $ 16,121 $ 20,360 Provision for (reversal of) unfunded credit reserves 14 (1,096 ) (933 ) (42 ) Ending balance $ 15,188 $ 20,318 $ 15,188 $ 20,318 The allowance for unfunded credit reserves is maintained at a level management believes 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. See Note 11 — 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, 2017 and December 31, 2016 : ($ in thousands) June 30, 2017 CRE C&I Residential Consumer Total Allowance for loan losses Individually evaluated for impairment $ 705 $ 15,885 $ 698 $ 5 $ 17,293 Collectively evaluated for impairment 73,280 134,251 42,981 8,433 258,945 Acquired with deteriorated credit quality 78 — — — 78 Ending balance $ 74,063 $ 150,136 $ 43,679 $ 8,438 $ 276,316 Recorded investment in loans Individually evaluated for impairment $ 42,001 $ 110,591 $ 29,615 $ 4,533 $ 186,740 Collectively evaluated for impairment 8,759,058 10,056,097 5,541,166 2,102,150 26,458,471 Acquired with deteriorated credit quality (1) 324,790 20,661 203,448 16,556 565,455 Ending balance (1) $ 9,125,849 $ 10,187,349 $ 5,774,229 $ 2,123,239 $ 27,210,666 ($ in thousands) December 31, 2016 CRE C&I Residential Consumer Total Allowance for loan losses Individually evaluated for impairment $ 1,326 $ 10,477 $ 867 $ 31 $ 12,701 Collectively evaluated for impairment 71,478 131,689 36,466 8,068 247,701 Acquired with deteriorated credit quality 112 1 5 — 118 Ending balance $ 72,916 $ 142,167 $ 37,338 $ 8,099 $ 260,520 Recorded investment in loans Individually evaluated for impairment $ 52,378 $ 125,619 $ 24,376 $ 3,682 $ 206,055 Collectively evaluated for impairment 8,288,119 9,476,557 4,836,578 2,053,385 24,654,639 Acquired with deteriorated credit quality (1) 350,366 38,387 234,764 18,928 642,445 Ending balance (1) $ 8,690,863 $ 9,640,563 $ 5,095,718 $ 2,075,995 $ 25,503,139 (1) Loans net of ASC 310-30 discount. Purchased Credit Impaired 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. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flow expectation. The cash flows expected over the life of the pools are estimated by an internal cash flow model that projects cash flows and calculates the carrying values of the pools, book yields, effective interest income and impairment, if any, based on pool level events. Assumptions as to cumulative loss rates, loss curves and prepayment speeds are utilized to calculate the expected cash flows. 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. Prepayments affect the estimated life of PCI loans, which may change the amount of interest income, and possibly principal, expected to be collected. The excess of total contractual cash flows over the cash flows expected to be received at origination is deemed to be the “nonaccretable difference.” The following table presents the changes in accretable yield for PCI loans for the three and six months ended June 30, 2017 and 2016 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2017 2016 2017 2016 Beginning balance $ 127,990 $ 185,991 $ 136,247 $ 214,907 Accretion (11,082 ) (16,254 ) (21,361 ) (38,683 ) Changes in expected cash flows 1,717 (2,960 ) 3,739 (9,447 ) Ending balance $ 118,625 $ 166,777 $ 118,625 $ 166,777 Loans Held-for-Sale Loans held-for-sale are carried at the lower of cost or fair value. 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 reviews 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 the lower of cost or fair value. As of June 30, 2017 , loans held-for-sale amounted to $11.6 million , which were primarily comprised of C&I loans. In comparison, as of December 31, 2016 , loans held-for-sale amounted to $23.1 million , which were primarily comprised of consumer loans. Transfers of loans held-for-investment to loans held-for-sale were $66.0 million and $344.0 million during the three and six months ended June 30, 2017 , respectively. These loan transfers were primarily comprised of C&I loans for both periods. In comparison, $267.1 million and $575.8 million of loans held-for-investment were transferred to loans held-for-sale during the same periods in 2016 , respectively. These loan transfers were primarily comprised of multifamily residential, C&I and CRE loans for both periods. The Company recorded $117 thousand and $209 thousand 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, 2017 , respectively. In comparison, 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 same periods in 2016 , respectively. During the three months ended June 30, 2017 and 2016 , the Company sold $38.3 million and $166.0 million , respectively, in originated loans, resulting in net gains of $1.3 million and $2.8 million , respectively. During the three months ended June 30, 2017 , originated loans sold were primarily comprised of C&I and single-family residential loans. In comparison, during the same period in 2016 , originated loans sold were primarily comprised of CRE, multifamily residential and C&I loans. During the six months ended June 30, 2017 , the Company sold $67.6 million in originated loans, which were primarily comprised of C&I and single-family residential loans, resulting in net gains of $3.1 million . In comparison, during the six months ended June 30, 2016 , the Company sold $220.5 million and securitized $201.7 million in originated loans, which were primarily comprised of multifamily residential, CRE and C&I loans, resulting in net gains of $7.1 million . 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, as a result of the securitization of the $201.7 million of multifamily residential loans. During the three and six months ended June 30, 2017 , the Company purchased $221.5 million and $368.7 million loans, respectively, compared to $541.6 million and $780.9 million during the same periods in 2016 , respectively. Purchased loans for the three and six months ended June 30, 2017 were primarily comprised of C&I syndication loans, while purchased loans for the same periods in 2016 were primarily comprised of C&I syndication loans and single-family residential loans. The higher loans purchased for the three and six months ended June 30, 2016, primarily included $250.1 million and $322.5 million , respectively, in single-family residential loans purchased for Community Reinvestment Act purposes. From time to time, the Company purchases and sells loans in the secondary market. Certain purchased loans were transferred from loans held-for-investment to loans held-for-sale and write-downs to allowance for loan losses were recorded, where appropriate. During the three and six months ended June 30, 2017 , the Company sold loans of $50.5 million and $297.1 million , respectively, in the secondary market at net gains of $202 thousand and $1.2 million , respectively. In comparison, the Company sold loans of $79.7 million and $133.6 million , respectively, in the secondary market, resulting in net gains of $69 thousand for each of the three and six months ended June 30, 2016 . For the three months ended June 30, 2017 , the Company recorded a reversal of valuation adjustment of $8 thousand in Net gains on sales of loans on the Consolidated Statements of Income to carry the loans held-for-sale portfolio at the lower of cost or fair value. In comparison, no such valuation adjustment was recorded for the same period in 2016 . For the six months ended June 30, 2017 and 2016 , the Company recorded such valuation adjustments of $61 thousand and $2.4 million , respectively, related to the loans held-for-sale portfolio. |