Portfolio Loans | Portfolio Loans The composition of our total portfolio loans, which excludes loans held for sale, was the following for the periods presented below: September 30, 2019 December 31, 2018 Originated loans Acquired loans Total Originated loans Acquired loans Total Commercial: Commercial & Industrial (“C&I”): Traditional C&I $ 2,318,325 $ 58,304 $ 2,376,629 $ 2,321,131 $ 75,051 $ 2,396,182 Asset-based lending 870,681 303,658 1,174,339 792,935 — 792,935 Payroll finance 209,210 — 209,210 227,452 — 227,452 Warehouse lending 1,457,232 — 1,457,232 782,646 — 782,646 Factored receivables 277,853 — 277,853 258,383 — 258,383 Equipment financing 893,255 281,459 1,174,714 913,751 301,291 1,215,042 Public sector finance 1,122,592 — 1,122,592 860,746 — 860,746 Total C&I 7,149,148 643,421 7,792,569 6,157,044 376,342 6,533,386 Commercial mortgage: Commercial real estate (“CRE”) 4,806,054 392,353 5,198,407 4,154,956 487,461 4,642,417 Multi-family 1,932,464 2,846,968 4,779,432 1,527,619 3,236,505 4,764,124 Acquisition, development and construction (“ADC”) 433,883 — 433,883 267,754 — 267,754 Total commercial mortgage 7,172,401 3,239,321 10,411,722 5,950,329 3,723,966 9,674,295 Total commercial 14,321,549 3,882,742 18,204,291 12,107,373 4,100,308 16,207,681 Residential mortgage 559,685 1,810,531 2,370,216 621,471 2,083,755 2,705,226 Consumer 133,384 122,272 255,656 153,811 151,812 305,623 Total portfolio loans 15,014,618 5,815,545 20,830,163 12,882,655 6,335,875 19,218,530 Allowance for loan losses (104,735 ) — (104,735 ) (95,677 ) — (95,677 ) Total portfolio loans, net $ 14,909,883 $ 5,815,545 $ 20,725,428 $ 12,786,978 $ 6,335,875 $ 19,122,853 Acquired loans at September 30, 2019 and December 31, 2018 include loans that were acquired in the following transactions: the Woodforest Acquisition; the Advantage Funding Acquisition; the merger with Astoria Financial Corporation (“Astoria”) (the “Astoria Merger”); the merger with Hudson Valley Holding Corp. (the “HVB Merger”); and the merger between Provident New York Bancorp and legacy Sterling Bancorp (the “Provident Merger”). Under our credit administration and accounting policies, once a loan relationship reaches maturity and is re-underwritten, the loan is no longer considered an acquired loan and is included in originated loans. In addition, acquired performing loans that were subsequently subject to a credit evaluation, such as after designation as criticized or classified or placed on non-accrual since the acquisition date, are also included in originated loans. Consistent with our credit and accounting policies, at September 30, 2019 , there were $1,064,724 of loans with an allowance for loan loss reserve of $8,465 that were originally considered acquired loans but have since migrated to the originated loans portfolio as they have reached maturity, were re-underwritten, have been designated as criticized or classified or have been placed on non-accrual since the acquisition date. At December 31, 2018 , there were $1,365,682 of loans with an allowance for loan loss reserve of $9,607 that were originally considered acquired loans but have since migrated to the originated loans portfolio as they have reached maturity, were re-underwritten, have been designated as criticized or classified or have been placed on non-accrual since the acquisition date. Total portfolio loans include net deferred loan origination fees of $9,133 and $5,581 at September 30, 2019 and December 31, 2018 , respectively. Portfolio loans subject to purchase accounting adjustments are shown net of discounts on acquired loans, which were $73,985 at September 30, 2019 and $117,222 at December 31, 2018 . At September 30, 2019 and December 31, 2018 , the Bank pledged residential mortgage and commercial real estate loans of $7,729,593 and $8,526,247 , respectively, to the FHLB as collateral for certain borrowing arrangements. See Note 8. “Borrowings”. The following tables set forth the amounts and status of our loans, troubled debt restructurings (“TDRs”) and non-performing loans at September 30, 2019 and December 31, 2018 : Originated loans: September 30, 2019 Current 30-59 60-89 90+ Non- Total Traditional C&I $ 2,281,766 $ 7,460 $ 290 $ 351 $ 28,458 $ 2,318,325 Asset-based lending 851,047 — — — 19,634 870,681 Payroll finance 208,470 — — — 740 209,210 Warehouse lending 1,457,232 — — — — 1,457,232 Factored receivables 277,853 — — — — 277,853 Equipment financing 851,327 10,122 7,495 45 24,266 893,255 Public sector finance 1,122,592 — — — — 1,122,592 CRE 4,765,462 3,399 6,525 — 30,668 4,806,054 Multi-family 1,927,259 — — — 5,205 1,932,464 ADC 432,922 — — — 961 433,883 Residential mortgage 520,303 2,258 387 — 36,737 559,685 Consumer 123,316 883 3 — 9,182 133,384 Total loans $ 14,819,549 $ 24,122 $ 14,700 $ 396 $ 155,851 $ 15,014,618 Total TDRs included above $ 24,635 $ 258 $ — $ — $ 24,061 $ 48,954 Non-performing loans: Loans 90+ days past due and still accruing $ 396 Non-accrual loans 155,851 Total originated non-performing loans $ 156,247 December 31, 2018 Current 30-59 60-89 90+ Non- Total Traditional C&I $ 2,266,947 $ 5,747 $ 6,139 $ — $ 42,298 $ 2,321,131 Asset-based lending 789,654 — — — 3,281 792,935 Payroll finance 226,571 — — — 881 227,452 Warehouse lending 782,646 — — — — 782,646 Factored receivables 258,383 — — — — 258,383 Equipment financing 879,468 20,466 1,587 9 12,221 913,751 Public sector finance 860,746 — — — — 860,746 CRE 4,118,134 8,054 — 799 27,969 4,154,956 Multi-family 1,524,914 1,014 — — 1,691 1,527,619 ADC 267,090 230 — 434 — 267,754 Residential mortgage 592,563 1,934 897 264 25,813 621,471 Consumer 143,510 1,720 1,232 271 7,078 153,811 Total loans $ 12,710,626 $ 39,165 $ 9,855 $ 1,777 $ 121,232 $ 12,882,655 Total TDRs included above $ 34,892 $ 215 $ 181 $ 650 $ 38,947 $ 74,885 Non-performing loans: Loans 90+ days past due and still accruing $ 1,777 Non-accrual loans 121,232 Total originated non-performing loans $ 123,009 Acquired loans: September 30, 2019 Current 30-59 60-89 90+ Non- Total Traditional C&I $ 58,261 $ — $ — $ — $ 43 $ 58,304 Asset-based lending 303,658 — — — — 303,658 Equipment financing 270,424 7,893 743 — 2,399 281,459 CRE 387,560 758 — — 4,035 392,353 Multi-family 2,845,849 313 4 250 552 2,846,968 Residential mortgage 1,771,628 14,481 — 309 24,113 1,810,531 Consumer 117,512 1,742 — — 3,018 122,272 Total loans $ 5,754,892 $ 25,187 $ 747 $ 559 $ 34,160 $ 5,815,545 Total TDRs included above $ — $ — $ — $ — $ — $ — Non-performing loans: Loans 90+ days past due and still accruing $ 559 Non-accrual loans 34,160 Total acquired non-performing loans $ 34,719 December 31, 2018 Current 30-59 days past due 60-89 days past due 90+ days past due Non- accrual Total Traditional C&I $ 69,690 $ 5,256 $ 105 $ — $ — $ 75,051 Equipment financing 288,447 8,659 3,998 187 — 301,291 CRE 481,583 377 — 458 5,043 487,461 Multi-family 3,233,779 1,736 — — 990 3,236,505 Residential mortgage 2,022,340 18,734 6,513 — 36,168 2,083,755 Consumer 146,042 1,852 951 — 2,967 151,812 Total loans $ 6,241,881 $ 36,614 $ 11,567 $ 645 $ 45,168 $ 6,335,875 Total TDRs included above $ — $ — $ — $ — $ — $ — Non-performing loans: Loans 90+ days past due and still accruing $ 645 Non-accrual loans 45,168 Total acquired non-performing loans $ 45,813 The following table provides additional analysis of our non-accrual loans at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Recorded investment non-accrual loans Recorded investment PCI non-accrual loans Recorded investment total non-accrual loans Unpaid principal balance non-accrual loans Recorded investment non-accrual loans Recorded investment PCI non-accrual loans Recorded investment total non-accrual loans Unpaid principal balance non-accrual loans Traditional C&I $ 28,458 $ 43 $ 28,501 $ 39,321 $ 41,625 $ 673 $ 42,298 $ 50,651 Asset-based lending 19,634 — 19,634 35,205 3,281 — 3,281 3,859 Payroll finance 740 — 740 740 881 — 881 881 Equipment financing 26,665 — 26,665 31,237 12,221 — 12,221 15,744 CRE 25,731 8,972 34,703 39,287 23,675 9,337 33,012 39,440 Multi-family 3,777 1,980 5,757 6,169 482 2,199 2,681 2,920 ADC 961 — 961 961 — — — — Residential mortgage 34,595 26,255 60,850 71,619 24,339 37,642 61,981 72,706 Consumer 7,928 4,272 12,200 14,177 6,576 3,469 10,045 12,170 Total $ 148,489 $ 41,522 $ 190,011 $ 238,716 $ 113,080 $ 53,320 $ 166,400 $ 198,371 When the ultimate collectability of the total principal of an impaired loan is in doubt and the loan is on non-accrual status, all payments are applied to principal under the cost recovery method. When the ultimate collectability of the total principal of an impaired loan is not in doubt and the loan is on non-accrual status, contractual interest is credited to interest income when received, under the cash basis method. At September 30, 2019 and December 31, 2018 , the recorded investment of residential mortgage loans that were in the process of foreclosure was $40,754 and $48,107 , respectively, which is included in non-accrual residential mortgage loans above. The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at September 30, 2019 : Loans evaluated by segment Allowance evaluated by segment Individually evaluated for impairment Collectively evaluated for impairment PCI loans (1) Total loans Individually evaluated for impairment Collectively evaluated for impairment Total allowance for loan losses Traditional C&I $ 26,279 $ 2,344,853 $ 5,497 $ 2,376,629 $ — $ 14,466 $ 14,466 Asset-based lending 19,634 1,141,104 13,601 1,174,339 — 13,968 13,968 Payroll finance — 209,210 — 209,210 — 1,937 1,937 Warehouse lending — 1,457,232 — 1,457,232 — 547 547 Factored receivables — 277,853 — 277,853 — 1,016 1,016 Equipment financing 5,171 1,167,476 2,067 1,174,714 — 16,109 16,109 Public sector finance — 1,122,592 — 1,122,592 — 1,539 1,539 CRE 31,614 5,145,183 21,610 5,198,407 — 32,111 32,111 Multi-family 3,363 4,770,446 5,623 4,779,432 — 9,556 9,556 ADC — 433,883 — 433,883 — 4,166 4,166 Residential mortgage 4,625 2,295,539 70,052 2,370,216 — 7,372 7,372 Consumer 2,727 245,976 6,953 255,656 — 1,948 1,948 Total portfolio loans $ 93,413 $ 20,611,347 $ 125,403 $ 20,830,163 $ — $ 104,735 $ 104,735 (1) We acquired loans for which there was, at acquisition, both evidence of deterioration of credit quality since origination and the probability, at acquisition, that all contractually required payments would not be collected. These loans are classified as purchased credit impaired loans (“PCI loans”). The following table sets forth loans evaluated for impairment by segment and the allowance evaluated by segment at December 31, 2018 : Loans evaluated by segment Allowance evaluated by segment Individually evaluated for impairment Collectively evaluated for impairment PCI loans Total loans Individually evaluated for impairment Collectively evaluated for impairment Total allowance for loan losses Traditional C&I $ 48,735 $ 2,338,432 $ 9,015 $ 2,396,182 $ — $ 14,201 $ 14,201 Asset-based lending 3,281 789,654 — 792,935 — 7,979 7,979 Payroll finance — 227,452 — 227,452 — 2,738 2,738 Warehouse lending — 782,646 — 782,646 — 2,800 2,800 Factored receivables — 258,383 — 258,383 — 1,064 1,064 Equipment financing 3,577 1,211,465 — 1,215,042 — 12,450 12,450 Public sector finance — 860,746 — 860,746 — 1,739 1,739 CRE 33,284 4,581,911 27,222 4,642,417 — 32,285 32,285 Multi-family 1,662 4,754,912 7,550 4,764,124 — 8,355 8,355 ADC — 267,754 — 267,754 — 1,769 1,769 Residential mortgage 3,210 2,614,046 87,970 2,705,226 — 7,454 7,454 Consumer 7,249 290,336 8,038 305,623 — 2,843 2,843 Total portfolio loans $ 100,998 $ 18,977,737 $ 139,795 $ 19,218,530 $ — $ 95,677 $ 95,677 Management considers a loan to be impaired when, based on current information and events, it is determined that we will not be able to collect all amounts due according to the loan contract, including scheduled interest payments. Evaluation of impairment is generally treated the same across all classes of loans on a loan-by-loan basis. Generally loans of $750 or less are evaluated for impairment on a homogeneous pool basis. When management identifies a loan as impaired, the impairment is measured based on the present value of expected future cash flows, discounted at the loan’s effective interest rate, except when the sole remaining source of repayment of the loan is the operation or liquidation of the collateral. In these cases, management uses the current fair value of the collateral, less selling costs when foreclosure or liquidation is probable, instead of discounted cash flows. If management determines that the value of the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is generally recognized through a charge-off to the allowance for loan losses. The following table presents the changes in the balance of the accretable yield discount for PCI loans for the three and nine months ended September 30, 2019 and 2018 : For the three months ended September 30, For the nine months ended September 30, 2019 2018 2019 2018 Balance at beginning of period $ 18,381 $ 21,711 $ 16,932 $ 45,582 Balances acquired in the Woodforest Acquisition — — 2,093 — Accretion of income (2,459 ) (4,027 ) (6,381 ) (10,578 ) Charge-offs (143 ) — (1,082 ) — Reclassification (to) from non-accretable difference 1,024 1,056 5,241 (1,192 ) Other, adjustments — — — (15,072 ) Balance at end of period $ 16,803 $ 18,740 $ 16,803 $ 18,740 Income is not recognized on PCI loans unless we can reasonably estimate the cash flows that are expected to be collected over the life of the loan. The balance of PCI loans that were treated under the cost recovery method was $3,284 and $5,202 at September 30, 2019 and December 31, 2018 , respectively. The following table presents loans individually evaluated for impairment, excluding PCI loans, by segment of loans at September 30, 2019 and December 31, 2018 : September 30, 2019 December 31, 2018 Unpaid principal balance Recorded investment Unpaid principal balance Recorded investment Loans with no related allowance recorded: Traditional C&I $ 37,000 $ 26,279 $ 64,653 $ 48,735 Asset-based lending 35,205 19,634 3,859 3,281 Equipment financing 5,171 5,171 3,577 3,577 CRE 35,476 31,614 43,119 33,284 Multi-family 3,695 3,363 2,341 1,662 Residential mortgage 5,962 4,625 3,430 3,210 Consumer 2,727 2,727 7,249 7,249 Total $ 125,236 $ 93,413 $ 128,228 $ 100,998 Our policy generally requires a charge-off of the difference between the present value of the cash flows or the net collateral value of the collateral securing the loan and our recorded investment. As a result, there were no impaired loans with an allowance recorded at September 30, 2019 and December 31, 2018 . The following table presents the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the three months ended September 30, 2019 and September 30, 2018 : For the three months ended September 30, 2019 September 30, 2018 QTD average recorded investment Interest income recognized Cash-basis interest income recognized QTD average recorded investment Interest income recognized Cash-basis interest income recognized Loans with no related allowance recorded: Traditional C&I $ 26,702 $ 5 $ — $ 36,731 $ 116 $ — Asset-based lending 25,334 — — 14,639 123 — Equipment financing 4,315 23 — 798 — — CRE 27,337 76 — 27,149 294 — Multi-family 2,488 — — 1,768 17 — Residential mortgage 5,218 4 — 1,849 — — Consumer 2,727 — — 4,762 — — Total $ 94,121 $ 108 $ — $ 87,696 $ 550 $ — The following table presents the average recorded investment and interest income recognized related to loans individually evaluated for impairment by segment for the nine months ended September 30, 2019 and September 30, 2018 : For the nine months ended September 30, 2019 September 30, 2018 YTD average recorded investment Interest income recognized Cash-basis interest income recognized YTD average recorded investment Interest income recognized Cash-basis interest income recognized Loans with no related allowance recorded: Traditional C&I $ 32,666 $ 15 $ — $ 35,935 $ 149 $ — Asset-based lending 22,511 — — 10,980 347 — Equipment financing 3,626 92 — 598 — — CRE 26,580 227 — 22,704 360 — Multi-family 2,314 — — 1,726 48 — Residential mortgage 4,593 13 — 1,387 — — Consumer 2,727 — — 4,355 — — Total $ 95,017 $ 347 $ — $ 77,685 $ 904 $ — Troubled Debt Restructurings (“TDRs”) The following tables set forth the amounts and past due status of our TDRs at September 30, 2019 and December 31, 2018 : September 30, 2019 Current loans 30-59 days past due 60-89 days past due 90+ days past due Non- accrual Total Traditional C&I $ 475 $ — $ — $ — $ 13,949 $ 14,424 Asset-based lending — — — — 1,026 1,026 Equipment financing 5,615 71 — — 1,872 7,558 CRE 8,514 — — — 5,031 13,545 ADC — — — — 434 434 Residential mortgage 7,546 187 — — 1,416 9,149 Consumer 2,485 — — — 333 2,818 Total $ 24,635 $ 258 $ — $ — $ 24,061 $ 48,954 December 31, 2018 Current loans 30-59 days past due 60-89 days past due 90+ days past due Non- accrual Total Traditional C&I $ 9,011 $ — $ — $ — $ 25,672 $ 34,683 Asset-based lending — — — — 1,276 1,276 Equipment financing 1,905 — 9 — 2,367 4,281 CRE 11,071 — — — 7,112 18,183 ADC — — — 434 — 434 Residential mortgage 5,688 — 103 — 2,312 8,103 Consumer 7,217 215 69 216 208 7,925 Total $ 34,892 $ 215 $ 181 $ 650 $ 38,947 $ 74,885 We did not have any outstanding commitments to lend additional amounts to customers with loans classified as TDRs as of September 30, 2019 or December 31, 2018 . The following table presents loans by segment modified as TDRs that occurred during the first nine months of 2019 and 2018 : September 30, 2019 September 30, 2018 Recorded investment Recorded investment Number Pre- modification Post- modification Number Pre- modification Post- modification Traditional C&I 1 $ 5,026 $ 5,026 2 $ 11,606 $ 10,477 Asset-based lending — — — 1 12,766 12,766 Equipment financing 6 5,874 5,039 4 3,307 3,307 CRE — — — 1 12,187 12,187 Residential mortgage 3 1,274 1,274 11 1,684 1,367 Consumer — — — 1 4,944 4,944 Total TDRs 10 $ 12,174 $ 11,339 20 $ 46,494 $ 45,048 During the nine months ended September 30, 2019 , there was one equipment finance loan designated as a TDR that experienced a payment default within the twelve months following the modification. During the nine months ended September 30, 2018 , except for certain TDRs that are included in non-accrual loans, there were no TDRs that experienced a payment default within the twelve months following a modification. A payment default is defined as missing three consecutive monthly payments or being over 90 days past due |