Loans Receivable and Allowance for Credit Losses | 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 for which 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, 2018 and December 31, 2017 : ($ in thousands) June 30, 2018 December 31, 2017 Non-PCI Loans (1) PCI Loans (2) Total (1)(2) Non-PCI Loans (1) PCI Loans (2) Total (1)(2) Commercial lending: C&I $ 11,056,225 $ 2,794 $ 11,059,019 $ 10,685,436 $ 11,795 $ 10,697,231 CRE 8,836,076 218,491 9,054,567 8,659,209 277,688 8,936,897 Multifamily residential 1,988,464 44,058 2,032,522 1,855,128 61,048 1,916,176 Construction and land 623,794 43 623,837 659,326 371 659,697 Total commercial lending 22,504,559 265,386 22,769,945 21,859,099 350,902 22,210,001 Consumer lending: Single-family residential 5,210,014 106,881 5,316,895 4,528,911 117,378 4,646,289 HELOCs 1,758,093 11,418 1,769,511 1,768,917 14,007 1,782,924 Other consumer 374,028 — 374,028 336,504 — 336,504 Total consumer lending 7,342,135 118,299 7,460,434 6,634,332 131,385 6,765,717 Total loans held-for-investment $ 29,846,694 $ 383,685 $ 30,230,379 $ 28,493,431 $ 482,287 $ 28,975,718 Allowance for loan losses (301,511 ) (39 ) (301,550 ) (287,070 ) (58 ) (287,128 ) Loans held-for-investment, net $ 29,545,183 $ 383,646 $ 29,928,829 $ 28,206,361 $ 482,229 $ 28,688,590 (1) Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(40.4) million and $(34.0) million as of June 30, 2018 and December 31, 2017 , respectively. (2) Includes ASC 310-30 discount of $26.8 million and $35.3 million as of June 30, 2018 and December 31, 2017 , respectively. The commercial lending portfolio includes C&I, CRE, multifamily residential, and construction and land loans. The consumer lending portfolio includes single-family residential, HELOCs and other consumer loans. The C&I loan portfolio, which is comprised of commercial business and trade finance loans, provides financing to businesses in a wide spectrum of industries. The CRE loan portfolio includes income producing real estate loans that are either owner occupied, or non-owner occupied where 50% or more of the debt service for the loan is provided by rental income. The multifamily residential loan portfolio is largely comprised of loans secured by smaller multifamily properties ranging from 5 to 15 units in the Bank’s primary lending areas. Construction loans mainly provide construction financing for hotels, multifamily and residential condominiums, as well as mixed use (residential and retail) structures. In the consumer lending portfolio, the Company offers residential loans through a variety of first lien mortgage loan programs. The consumer residential loan portfolio is largely comprised of single-family residential loans and HELOCs that were originated through a reduced documentation loan program, where a substantial down payment is required, resulting in a low loan-to-value ratio at origination, typically 60% or less. The Company is in a first lien position for many of these reduced documentation single-family residential loans and HELOCs. These loans have historically experienced low delinquency and default rates. Other consumer loans are mainly comprised of insurance premium financing loans. As of June 30, 2018 and December 31, 2017 , loans totaling $19.63 billion and $18.88 billion , respectively, were pledged to secure borrowings and to provide additional borrowing capacity from the FRB and the FHLB. Credit Quality Indicators All loans are subject to the Company’s internal and external credit review and monitoring. For the commercial lending portfolio, 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 the majority of the consumer lending portfolio, 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 classifies loans 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 loans that have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special Mention loans are loans that have potential weaknesses that warrant closer attention by management. Special Mention is 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 loans that have well-defined weaknesses that may jeopardize the full and timely repayment of the loan. Substandard loans have a distinct possibility of loss, if the deficiencies are not corrected. When management has assessed a potential for loss but a distinct possibility of loss is not recognizable, the loan remains classified as Substandard grade. Doubtful loans have insufficient sources of repayment and a high probability of loss. Loss loans are loans that are 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, 2018 and December 31, 2017 : ($ in thousands) June 30, 2018 Pass/Watch Special Mention Substandard Doubtful Total Non-PCI Loans Commercial lending: C&I $ 10,760,675 $ 180,741 $ 113,518 $ 1,291 $ 11,056,225 CRE 8,672,374 63,315 100,387 — 8,836,076 Multifamily residential 1,978,241 — 10,223 — 1,988,464 Construction and land 571,921 690 51,183 — 623,794 Total commercial lending 21,983,211 244,746 275,311 1,291 22,504,559 Consumer lending: Single-family residential 5,193,906 4,063 12,045 — 5,210,014 HELOCs 1,748,719 1,188 8,186 — 1,758,093 Other consumer 371,530 7 2,491 — 374,028 Total consumer lending 7,314,155 5,258 22,722 — 7,342,135 Total $ 29,297,366 $ 250,004 $ 298,033 $ 1,291 $ 29,846,694 ($ in thousands) December 31, 2017 Pass/Watch Special Mention Substandard Doubtful Total Non-PCI Loans Commercial lending: C&I $ 10,369,516 $ 114,769 $ 180,269 $ 20,882 $ 10,685,436 CRE 8,484,635 65,616 108,958 — 8,659,209 Multifamily residential 1,839,958 — 15,170 — 1,855,128 Construction and land 614,441 4,590 40,295 — 659,326 Total commercial lending 21,308,550 184,975 344,692 20,882 21,859,099 Consumer lending: Single-family residential 4,490,672 16,504 21,735 — 4,528,911 HELOCs 1,744,903 11,900 12,114 — 1,768,917 Other consumer 333,895 111 2,498 — 336,504 Total consumer lending 6,569,470 28,515 36,347 — 6,634,332 Total $ 27,878,020 $ 213,490 $ 381,039 $ 20,882 $ 28,493,431 The following tables present the credit risk ratings for PCI loans by portfolio segment as of June 30, 2018 and December 31, 2017 : ($ in thousands) June 30, 2018 Pass/Watch Special Mention Substandard Doubtful Total PCI Loans Commercial lending: C&I $ 2,551 $ — $ 243 $ — $ 2,794 CRE 189,307 4,813 24,371 — 218,491 Multifamily residential 41,182 — 2,876 — 44,058 Construction and land 43 — — — 43 Total commercial lending 233,083 4,813 27,490 — 265,386 Consumer lending: Single-family residential 105,219 275 1,387 — 106,881 HELOCs 10,705 209 504 — 11,418 Total consumer lending 115,924 484 1,891 — 118,299 Total (1) $ 349,007 $ 5,297 $ 29,381 $ — $ 383,685 ($ in thousands) December 31, 2017 Pass/Watch Special Mention Substandard Doubtful Total PCI Loans Commercial lending: C&I $ 10,712 $ 57 $ 1,026 $ — $ 11,795 CRE 238,605 531 38,552 — 277,688 Multifamily residential 56,720 — 4,328 — 61,048 Construction and land 44 — 327 — 371 Total commercial lending 306,081 588 44,233 — 350,902 Consumer lending: Single-family residential 113,905 1,543 1,930 — 117,378 HELOCs 12,642 — 1,365 — 14,007 Total consumer lending 126,547 1,543 3,295 — 131,385 Total (1) $ 432,628 $ 2,131 $ 47,528 $ — $ 482,287 (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, unless the loan is well-collateralized or guaranteed by government agencies, and in the process of collection. 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, 2018 and December 31, 2017 : ($ in thousands) June 30, 2018 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 Commercial lending: C&I $ 86,959 $ 6 $ 86,965 $ 28,491 $ 28,606 $ 57,097 $ 10,912,163 $ 11,056,225 CRE 2,913 — 2,913 5,851 19,897 25,748 8,807,415 8,836,076 Multifamily residential 1,378 536 1,914 1,727 — 1,727 1,984,823 1,988,464 Construction and land — — — — — — 623,794 623,794 Total commercial lending 91,250 542 91,792 36,069 48,503 84,572 22,328,195 22,504,559 Consumer lending: Single-family residential 18,699 4,678 23,377 418 7,207 7,625 5,179,012 5,210,014 HELOCs 6,018 1,188 7,206 1,889 6,246 8,135 1,742,752 1,758,093 Other consumer 20 7 27 — 2,491 2,491 371,510 374,028 Total consumer lending 24,737 5,873 30,610 2,307 15,944 18,251 7,293,274 7,342,135 Total $ 115,987 $ 6,415 $ 122,402 $ 38,376 $ 64,447 $ 102,823 $ 29,621,469 $ 29,846,694 ($ in thousands) December 31, 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 Commercial lending: C&I $ 30,964 $ 82 $ 31,046 $ 27,408 $ 41,805 $ 69,213 $ 10,585,177 $ 10,685,436 CRE 3,414 466 3,880 5,430 21,556 26,986 8,628,343 8,659,209 Multifamily residential 4,846 14 4,860 1,418 299 1,717 1,848,551 1,855,128 Construction and land 758 — 758 — 3,973 3,973 654,595 659,326 Total commercial lending 39,982 562 40,544 34,256 67,633 101,889 21,716,666 21,859,099 Consumer lending: Single-family residential 13,269 5,355 18,624 6 5,917 5,923 4,504,364 4,528,911 HELOCs 4,286 4,186 8,472 89 3,917 4,006 1,756,439 1,768,917 Other consumer 14 23 37 — 2,491 2,491 333,976 336,504 Total consumer lending 17,569 9,564 27,133 95 12,325 12,420 6,594,779 6,634,332 Total $ 57,551 $ 10,126 $ 67,677 $ 34,351 $ 79,958 $ 114,309 $ 28,311,445 $ 28,493,431 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 2017 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. Refer to the discussion on PCI loans within this note for additional details on interest income recognition. As of June 30, 2018 and December 31, 2017 , PCI loans on nonaccrual status totaled $6.3 million and $5.3 million , respectively. Loans in Process of Foreclosure As of June 30, 2018 and December 31, 2017 , consumer mortgage loans of $5.6 million and $6.6 million , respectively, were secured by residential real estate properties, for which formal foreclosure proceedings were in process in accordance with local requirements of the applicable jurisdictions. As of June 30, 2018 , there were no foreclosed residential real estate properties included in total net OREO of $709 thousand . In comparison, a foreclosed residential real estate property with a carrying amount of $188 thousand was included in total net OREO of $830 thousand as of December 31, 2017 . Troubled Debt Restructurings Potential troubled debt restructurings (“TDR”s) are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty. A TDR is a modification of the terms of a loan when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not have otherwise considered. The following tables present the additions to non-PCI TDRs for the three and six months ended June 30, 2018 and 2017 : ($ in thousands) Loans Modified as TDRs During the Three Months Ended June 30, 2018 2017 Number Pre- Modification Post- Modification (1) Financial (2) Number Pre- Modification Post- Modification (1) Financial (2) Commercial lending: C&I — $ — $ — $ — 6 $ 17,039 $ 15,673 $ 10,010 CRE 1 $ 750 $ 837 $ — — $ — $ — $ — Multifamily residential — $ — $ — $ — 1 $ 3,655 $ 3,638 $ 107 Consumer lending: Single-family residential 2 $ 405 $ 404 $ (26 ) — $ — $ — $ — HELOCs 2 $ 1,546 $ 1,536 $ — — $ — $ — $ — Loans Modified as TDRs During the Six Months Ended June 30, ($ in thousands) 2018 2017 Number Pre- Post- (1) Financial (2) Number Pre- Post- (1) Financial (2) Commercial lending: C&I — $ — $ — $ — 8 $ 18,189 $ 17,272 $ 11,202 CRE 1 $ 750 $ 837 $ — 1 $ 1,527 $ 1,494 $ — Multifamily residential — $ — $ — $ — 1 $ 3,655 $ 3,638 $ 107 Consumer lending: Single-family residential 2 $ 405 $ 404 $ (26 ) — $ — $ — $ — HELOCs 2 $ 1,546 $ 1,536 $ — — $ — $ — $ — (1) Includes subsequent payments after modification and reflects the balance as of June 30, 2018 and 2017 . (2) The financial impact includes increases (decreases) in 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, 2018 and 2017 by modification type: ($ in thousands) Modification Type During the Three Months Ended June 30, 2018 2017 Principal (1) Principal (2) Interest Other Total Principal (1) Principal (2) Interest Other Total Commercial lending: C&I $ — $ — $ — $ — $ — $ 3,388 $ 12,285 $ — $ — $ 15,673 CRE — — 837 — 837 — — — — — Multifamily residential — — — — — 3,638 — — — 3,638 Total commercial lending — — 837 — 837 7,026 12,285 — — 19,311 Consumer lending: Single-family residential 65 — — 339 404 — — — — — HELOCs 1,464 — — 72 1,536 — — — — — Total consumer lending 1,529 — — 411 1,940 — — — — — Total $ 1,529 $ — $ 837 $ 411 $ 2,777 $ 7,026 $ 12,285 $ — $ — $ 19,311 ($ in thousands) Modification Type During the Six Months Ended June 30, 2018 2017 Principal (1) Principal (2) Interest Other Total Principal (1) Principal (2) Interest Other Total Commercial lending: C&I $ — $ — $ — $ — $ — $ 3,388 $ 13,884 $ — $ — $ 17,272 CRE — — 837 — 837 1,494 — — — 1,494 Multifamily residential — — — — — 3,638 — — — 3,638 Total commercial lending — — 837 — 837 8,520 13,884 — — 22,404 Consumer lending: Single-family residential 65 — — 339 404 — — — — — HELOCs 1,464 — — 72 1,536 — — — — — Total consumer lending 1,529 — — 411 1,940 — — 846 — — Total $ 1,529 $ — $ 837 $ 411 $ 2,777 $ 8,520 $ 13,884 $ 6,722 $ — $ 22,404 (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 be in default. 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 on loans modified as TDRs within the previous 12 months that have subsequently defaulted during the three and six months ended June 30, 2018 and 2017 , 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, 2018 2017 Number of Recorded Number of Recorded Consumer lending: HELOCs — $ — 1 $ 48 ($ in thousands) Loans Modified as TDRs that Subsequently Defaulted During the Six Months Ended June 30, 2018 2017 Number of Recorded Number of Recorded Consumer lending: HELOCs — $ — 1 $ 48 The amount of additional funds committed to lend to borrowers whose terms have been modified was $2.9 million and $5.1 million as of June 30, 2018 and December 31, 2017 , respectively. Impaired Loans The following tables present information on non-PCI impaired loans as of June 30, 2018 and December 31, 2017 : ($ in thousands) June 30, 2018 Unpaid Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Commercial lending: C&I $ 85,975 $ 27,397 $ 36,257 $ 63,654 $ 10,920 CRE 38,567 26,677 5,469 32,146 520 Multifamily residential 6,562 2,998 3,104 6,102 99 Total commercial lending 131,104 57,072 44,830 101,902 11,539 Consumer lending: Single-family residential 17,109 4,037 11,879 15,916 53 HELOCs 9,642 4,493 4,989 9,482 78 Other consumer 2,491 — 2,491 2,491 2,491 Total consumer lending 29,242 8,530 19,359 27,889 2,622 Total non-PCI impaired loans $ 160,346 $ 65,602 $ 64,189 $ 129,791 $ 14,161 ($ in thousands) December 31, 2017 Unpaid Principal Balance Recorded Investment With No Allowance Recorded Investment With Allowance Total Recorded Investment Related Allowance Commercial lending: C&I $ 130,773 $ 36,086 $ 62,599 $ 98,685 $ 16,094 CRE 41,248 28,699 6,857 35,556 684 Multifamily residential 11,164 8,019 2,617 10,636 88 Construction and land 4,781 3,973 — 3,973 — Total commercial lending 187,966 76,777 72,073 148,850 16,866 Consumer lending: Single-family residential 15,501 — 14,338 14,338 534 HELOCs 5,484 2,287 2,921 5,208 4 Other consumer 2,491 — 2,491 2,491 2,491 Total consumer lending 23,476 2,287 19,750 22,037 3,029 Total non-PCI impaired loans $ 211,442 $ 79,064 $ 91,823 $ 170,887 $ 19,895 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, 2018 and 2017 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Average Recognized Interest Income (1) Average Recognized Interest Income (1) Average Recorded Investment Recognized Interest Income (1) Average Recognized Interest Income (1) Commercial lending: C&I $ 67,342 $ 1,494 $ 113,858 $ 140 $ 67,290 $ 2,893 $ 119,608 $ 362 CRE 32,524 837 37,897 33 32,813 1,666 38,116 80 Multifamily residential 6,161 58 12,720 81 6,203 127 12,771 129 Construction and land — — 4,414 — — — 4,584 — Total commercial lending 106,027 2,389 168,889 254 106,306 4,686 175,079 571 Consumer lending: Single-family residential 15,962 115 16,985 35 16,012 269 17,038 93 HELOCs 9,502 138 4,541 13 9,514 249 4,548 32 Other consumer 2,491 47 — — 2,491 92 — — Total consumer lending 27,955 300 21,526 48 28,017 610 21,586 125 Total non-PCI impaired loans $ 133,982 $ 2,689 $ 190,415 $ 302 $ 134,323 $ 5,296 $ 196,665 $ 696 (1) Includes interest recognized on accruing non-PCI TDRs. Interest payments received on nonaccrual non-PCI loans are reflected as a reduction to principal, not as interest income. Allowance for Credit Losses The following table presents a summary of activities in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2018 and 2017 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Non-PCI Loans Allowance for non-PCI loans, beginning of period $ 297,607 $ 263,007 $ 287,070 $ 260,402 Provision for loan losses on non-PCI loans 15,139 10,680 35,072 18,726 Gross charge-offs: Commercial lending: C&I (13,534 ) (5,386 ) (31,979 ) (12,443 ) Construction and land — (1 ) — (149 ) Consumer lending: Single-family residential — (1 ) (1 ) (1 ) Other consumer (162 ) (3 ) (179 ) (7 ) Total gross charge-offs (13,696 ) (5,391 ) (32,159 ) (12,600 ) Gross recoveries: Commercial lending: C&I 511 7,038 8,198 7,493 CRE 2 423 429 992 Multifamily residential 1,061 128 1,394 695 Construction and land 258 88 693 112 Consumer lending: Single-family residential 629 243 813 254 HELOCs — — — 24 Other consumer — 22 1 140 Total gross recoveries 2,461 7,942 11,528 9,710 Net (charge-offs) recoveries (11,235 ) 2,551 (20,631 ) (2,890 ) Allowance for non-PCI loans, end of period 301,511 276,238 301,511 276,238 PCI Loans Allowance for PCI loans, beginning of period 47 87 58 118 Reversal of loan losses on PCI loans (8 ) (9 ) (19 ) (40 ) Allowance for PCI loans, end of period 39 78 39 78 Allowance for loan losses $ 301,550 $ 276,316 $ 301,550 $ 276,316 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 2017 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, 2018 and 2017 : ($ in thousands) Three Months Ended Six Months Ended 2018 2017 2018 2017 Allowance for unfunded credit reserves, beginning of period $ 13,614 $ 15,174 $ 13,318 $ 16,121 Provision for (reversal of) unfunded credit reserves 405 14 701 (933 ) Allowance for unfunded credit reserves, end of period $ 14,019 $ 15,188 $ 14,019 $ 15,188 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 expenses and other liabilities on the Consolidated Balance Sheet. 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, 2018 and December 31, 2017 : ($ in thousands) June 30, 2018 Commercial Lending Consumer Lending C&I CRE Multifamily Residential Construction and Land Single- Family Residential HELOCs Other Consumer Total Allowance for loan losses Individually evaluated for impairment $ 10,920 $ 520 $ 99 $ — $ 53 $ 78 $ 2,491 $ 14,161 Collectively evaluated for impairment 151,484 44,061 18,387 30,362 33,335 7,199 2,522 287,350 Acquired with deteriorated credit quality — 39 — — — — — 39 Total $ 162,404 $ 44,620 $ 18,486 $ 30,362 $ 33,388 $ 7,277 $ 5,013 $ 301,550 Recorded investment in loans Individually evaluated for impairment $ 63,654 $ 32,146 $ 6,102 $ — $ 15,916 $ 9,482 $ 2,491 $ 129,791 Collectively evaluated for impairment 10,992,571 8,803,930 1,982,362 623,794 5,194,098 1,748,611 371,537 29,716,903 Acquired with deteriorated credit quality (1) 2,794 218,491 44,058 43 106,881 11,418 — 383,685 Total (1) $ 11,059,019 $ 9,054,567 $ 2,032,522 $ 623,837 $ 5,316,895 $ 1,769,511 $ 374,028 $ 30,230,379 ($ in thousands) December 31, 2017 Commercial Lending Consumer Lending C&I CRE Multifamily Residential Construction and Land Single- Family Residential HELOCs Other Consumer Total Allowance for loan losses Individually evaluated for impairment $ 16,094 $ 684 $ 88 $ — $ 534 $ 4 $ 2,491 $ 19,895 Collectively evaluated for impairment 146,964 40,495 19,021 26,881 25,828 7,350 636 267,175 Acquired with deteriorated credit quality — 58 — — — — — 58 Total $ 163,058 $ 41,237 $ 19,109 $ 26,881 $ 26,362 $ 7,354 $ 3,127 $ 287,128 Recorded investment in loans Individually evaluated for impairment $ 98,685 $ 35,556 $ 10,636 $ 3,973 $ 14,338 $ 5,208 $ 2,491 $ 170,887 Collectively evaluated for impairment 10,586,751 8,623,653 1,844,492 655,353 4,514,573 1,763,709 334,013 28,322,544 Acquired with deteriorated credit quality (1) 11,795 277,688 61,048 371 117,378 14,007 — 482,287 Total (1) $ 10,697,231 $ 8,936,897 $ 1,916,176 $ 659,697 $ 4,646,289 $ 1,782,924 $ 336,504 $ 28,975,718 (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 flows expectation. The cash flows expected over the life of the pools are estimated by an internal cash flows 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. Prepayment speeds 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 collected at acquisition, considering the impact of prepayments, is referred to 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, 2018 and 2017 : ($ in thousands) Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Accretable yield for PCI loans, beginning of period $ 95,864 $ 127,990 $ 101,977 $ 136,247 Accretion (11,084 ) (11,082 ) (20,218 ) (21,361 ) Changes in expected cash flows 272 1,717 3,293 3,739 Accretable yield for PCI loans, end of period $ 85,052 $ 118,625 $ 85,052 $ 118,625 Loans Held-for-Sale At the time of commitment to originate or purchase a loan, the loan is determined to be held-for-investment if it is the Company’s intent to hold the loan to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s evaluation processes, including asset/liability and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value. As of June 30, 2018 , loans held-for-sale of $14.7 million consisted of C&I and single-family residential loans. In comparison, as of December 31, 2017 , loans held-for-sale of $85 thousand consisted of single-family residential loans. Loan Purchases, Sales and Transfers From time to time, the Company purchases and sells loans in the secondary market. Certain purchased loans are transferred from held-for-investment to held-for-sale, and write-downs to allowance for loan losses are recorded, when appropriate. The following tables present information on the loan purchases into the held-for-investment portfolio, transfers from held-for-investment to held-for-sale, and sales during the three and six months ended June 30, 2018 and 2017 : ($ in thousands) Three Months Ended June 30, 2018 Commercial Lending Consumer Lending C&I CRE Multifamily Construction Single-Family Other Total Loans transferred from held-for-investment to held-for-sale $ 99,449 $ 30,415 $ — $ — $ — $ — $ 129,864 (1) Sales $ 140,326 $ 30,415 $ — $ — $ 8,175 $ — $ 178,916 (2)(3)(4) Purchases $ 285,615 $ — $ 3,249 $ — $ 20,912 $ — $ 309,776 (5) ($ in thousands) Three Months Ended June 30, 2017 Commercial Lending Consumer Lending C&I CRE Multifamily Construction Single-Family Other Total Loans transferred from held-for-investment to held-for-sale $ 58,817 $ 5,668 $ 532 $ 687 $ 249 $ — $ 65,953 (1) Sales $ 76,441 $ 5,668 $ 532 $ 687 $ 5,432 $ — $ 88,760 (2)(3)(4) Purchases $ 220,612 $ — $ 714 $ — $ 128 $ — $ 221,454 (5) ($ in thousands) Six Months Ended June 30, 2018 Commercial Lending Consumer Lending C&I CRE Multifamily Construction Single-Family Other Total Loans transferred from held-for-investment to held-for-sale $ 245,840 $ 39,791 $ — $ — $ — $ — $ 285,631 (1) Sales $ 242,691 $ 39,791 $ — $ — $ 10,721 $ — $ 293,203 (2)(3)(4) Purchases $ 350,362 $ — $ 3,435 $ — $ 36,025 $ — $ 389,822 (5) ($ in thousands) Six Months Ended June 30, 2017 Commercial Lending Consumer Lending C&I CRE Multifamily Construction Single-Family Other Total Loans transferred from held-for-investment to held-for-sale $ 324,076 $ 18,433 $ 532 $ 687 $ 249 $ — $ 343,977 (1) Sales $ 313,120 $ 18,433 $ 532 $ 687 $ 9,742 $ 22,191 $ 364,705 (2)(3)(4) Purchases $ 367,728 $ — $ 840 $ — $ 128 $ — $ 368,696 (5) (1) The Company recorded $13.3 million and $13.4 million in write-downs to the allowance for loan losses related to loans transferred from held-for-investment to held-for-sale for the three and six months ended June 30, 2018 , respectively, and $117 thousand and $209 thousand for the three and six months ended June 30, 2017 , respectively. (2) Includes originated loans sold of $103.5 million and $193.2 million for the three and six months ended June 30, 2018 , respectively, and $ 38.3 million and $67.6 million for the three and six months ended June 30, 2017 , respectively. Originated loans sold during the three and six months ended June 30, 2018 and 2017 were primarily C&I and CRE loans. (3) Includes purchased loans sold in the secondary market of $75.4 million and $100.0 million for the three and six months ended June 30, 2018 , respectively, and $50.5 million and $297.1 million for the three and six months ended June 30, 2017 , respectively. (4) Net gains on sales of loans, excluding the lower of cost or fair value adjustments, were $2.3 million and $3.9 million for the three and six months ended June 30, 2018 , respectively, and $1.6 million and $4.4 million for the three and six months ended June 30, 2017 , respectively. No lower of cost or fair value adjustments were recorded for the three and six months ended June 30, 2018 . In comparison, the Company reversed the lower of cost or fair value adjustment of $8 thousand during the three months ended June 30, 2017 and recorded a lower of cost or fair value adjustment of $61 thousand for the six months ended June 30, 2017 . These adjustments were included in Net gains on sales of loans on the Consolidated Statement of Income. (5) C&I loan purchases for each of the three and six months ended June 30, 2018 and 2017 were mainly comprised of C&I syndicated loans. |