LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES | LOANS AND LEASES AND ALLOWANCE FOR LOAN AND LEASE LOSSES The following table presents the balances in the Company’s loans and leases portfolio as of the dates indicated: Non-Traditional Mortgages (NTM) Traditional Loans Total NTM and Traditional Loans PCI Loans Total Loans and Leases Receivable ($ in thousands) March 31, 2017 Commercial: Commercial and industrial $ — $ 1,580,969 $ 1,580,969 $ 4,687 $ 1,585,656 Commercial real estate — 749,440 749,440 1,152 750,592 Multi-family — 1,449,715 1,449,715 — 1,449,715 SBA — 73,433 73,433 2,607 76,040 Construction — 142,164 142,164 — 142,164 Lease financing — 285 285 — 285 Consumer: Single family residential mortgage 728,796 1,029,341 1,758,137 131,253 1,889,390 Green Loans (HELOC) - first liens 85,665 — 85,665 — 85,665 Green Loans (HELOC) - second liens 3,549 — 3,549 — 3,549 Other consumer — 122,265 122,265 — 122,265 Total loans and leases $ 818,010 $ 5,147,612 $ 5,965,622 $ 139,699 $ 6,105,321 Allowance for loan and lease losses (42,736 ) Loans and leases receivable, net $ 6,062,585 December 31, 2016 Commercial: Commercial and industrial $ — $ 1,518,200 $ 1,518,200 $ 4,760 $ 1,522,960 Commercial real estate — 728,777 728,777 1,182 729,959 Multi-family — 1,365,262 1,365,262 — 1,365,262 SBA — 71,168 71,168 2,672 73,840 Construction — 125,100 125,100 — 125,100 Lease financing — 379 379 — 379 Consumer: Single family residential mortgage 794,120 1,091,829 1,885,949 133,212 2,019,161 Green Loans (HELOC) - first liens 87,469 — 87,469 — 87,469 Green Loans (HELOC) - second liens 3,559 — 3,559 — 3,559 Other consumer — 107,063 107,063 — 107,063 Total loans and leases $ 885,148 $ 5,007,778 $ 5,892,926 $ 141,826 $ 6,034,752 Allowance for loan and lease losses (40,444 ) Loans and leases receivable, net $ 5,994,308 Non-Traditional Mortgage Loans The Company’s NTM portfolio is comprised of three interest only products: Green Account Loans (Green Loans), fixed or adjustable rate hybrid interest only mortgage (Interest Only) loans and a small number of additional loans with the potential for negative amortization. As of March 31, 2017 and December 31, 2016 , the NTM loans totaled $818.0 million , or 13.4 percent of total loans and leases, and $885.1 million , or 14.7 percent of total loans and leases, respectively. The total NTM portfolio decreased by $67.1 million , or 7.6 percent , during the three months ended March 31, 2017 . The following table presents the composition of the NTM portfolio as of the dates indicated: March 31, 2017 December 31, 2016 Count Amount Percent Count Amount Percent ($ in thousands) Green Loans (HELOC) - first liens 104 $ 85,665 10.5 % 107 $ 87,469 9.9 % Interest-only - first liens 480 725,005 88.6 % 522 784,364 88.6 % Negative amortization 11 3,791 0.5 % 22 9,756 1.1 % Total NTM - first liens 595 814,461 99.6 % 651 881,589 99.6 % Green Loans (HELOC) - second liens 12 3,549 0.4 % 12 3,559 0.4 % Total NTM - second liens 12 3,549 0.4 % 12 3,559 0.4 % Total NTM loans 607 $ 818,010 100.0 % 663 $ 885,148 100.0 % Total loans and leases $ 6,105,321 $ 6,034,752 % of NTM to total loans and leases 13.4 % 14.7 % Green Loans Green Loans are SFR first and second mortgage lines of credit with a linked checking account that allows all types of deposits and withdrawals to be performed. The loans are generally interest only with a 15 year-balloon payment due at maturity. At March 31, 2017 and December 31, 2016 , Green Loans totaled $89.2 million and $91.0 million , respectively. At March 31, 2017 and December 31, 2016 , none of the Green Loans were non-performing. As a result of their unique payment feature, Green Loans possess higher credit risk due to the potential for negative amortization; however, management believes the risk is mitigated through the Company’s loan terms and underwriting standards, including its policies on loan-to-value (LTV) ratios and the Company’s contractual ability to curtail loans when the value of the underlying collateral declines. The Company discontinued origination of the Green Loan products in 2011. Interest Only Loans Interest only loans are primarily SFR first mortgage loans with payment features that allow interest only payments in initial periods before converting to a fully amortizing loan. At March 31, 2017 and December 31, 2016 , interest only loans totaled $725.0 million and $784.4 million , respectively. As of March 31, 2017 and December 31, 2016 , $468 thousand and $467 thousand of the interest only loans were non-performing, respectively. Loans with the Potential for Negative Amortization Negative amortization loans other than Green Loans totaled $3.8 million and $9.8 million at March 31, 2017 and December 31, 2016 , respectively. The Company discontinued origination of negative amortization loans in 2007. At March 31, 2017 and December 31, 2016 , none of the loans that had the potential for negative amortization were non-performing. These loans pose a potentially higher credit risk because of the lack of principal amortization and potential for negative amortization; however, management believes the risk is mitigated through the loan terms and underwriting standards, including the Company’s policies on LTV ratios. Risk Management of Non-Traditional Mortgages The Company has determined that significant performance indicators for NTMs are LTV ratios and Fair Isaac Corporation (FICO) scores. Accordingly, the Company manages credit risk in the NTM portfolio through periodic review of the loan portfolio that includes refreshing FICO scores on the Green Loans and other home equity lines of credit (HELOCs), as needed in conjunction with portfolio management, and ordering third party automated valuation models (AVMs). The loan review is designed to provide a method of identifying borrowers who may be experiencing financial difficulty before they actually fail to make a loan payment. Upon receipt of the updated FICO scores, an exception report is run to identify loans with a decrease in FICO score of 10 percent or more and/or a resulting FICO score of 620 or less. The loans are then further analyzed to determine if the risk rating should be downgraded, which will increase the reserves the Company will establish for potential losses. A report of the periodic loan review is published and regularly monitored. As these loans are revolving lines of credit, the Company, based on the loan agreement and loan covenants of the particular loan, as well as applicable rules and regulations, could suspend the borrowing privileges or reduce the credit limit at any time the Company reasonably believes that the borrower will be unable to fulfill their repayment obligations under the agreement or certain other conditions are met. In many cases, the decrease in FICO score is the first indication that the borrower may have difficulty in making their future payment obligations. The Company proactively manages the NTM portfolio by performing detailed analyses on the portfolio. The Company’s Internal Asset Review Committee (IARC) conducts meetings on at least a quarterly basis to review the loans classified as special mention, substandard, or doubtful and determines whether a suspension or reduction in credit limit is warranted. If a line has been suspended and the borrower would like to have their credit privileges reinstated, they would need to provide updated financials showing their ability to meet their payment obligations. On the interest only loans, the Company projects future payment changes to determine if there will be a material increase in the required payment and then monitors the loans for possible delinquency. Individual loans are monitored for possible downgrading of risk rating. NTM Performance Indicators The following table presents the Company’s NTM Green Loans first lien portfolio at March 31, 2017 by FICO scores that were obtained during the quarter ended March 31, 2017 , comparing to the FICO scores for those same loans that were obtained during the quarter ended December 31, 2016: March 31, 2017 By FICO Scores Obtained During the Quarter Ended March 31, 2017 By FICO Scores Obtained During the Quarter Ended December 31, 2016 Change Count Amount Percent Count Amount Percent Count Amount Percent ($ in thousands) FICO Score 800+ 16 $ 11,841 13.8 % 16 $ 9,371 11.0 % — $ 2,470 2.8 % 700-799 57 43,049 50.3 % 52 41,742 49.5 % 5 1,307 0.8 % 600-699 22 21,933 25.6 % 28 27,332 31.2 % (6 ) (5,399 ) (5.6 )% <600 2 3,422 4.0 % 1 1,800 2.1 % 1 1,622 1.9 % No FICO 7 5,420 6.3 % 7 5,420 6.2 % — — 0.1 % Totals 104 $ 85,665 100.0 % 104 $ 85,665 100.0 % — $ — — % Loan-to-Value Ratio LTV ratio represents estimated current loan to value ratio, determined by dividing current unpaid principal balance by latest estimated property value received per the Company policy. The table below presents the Company’s SFR NTM first lien portfolio by LTV ratios as of the dates indicated: Green Interest Only Negative Amortization Total Count Amount Percent Count Amount Percent Count Amount Percent Count Amount Percent ($ in thousands) March 31, 2017 < 61% 56 $ 50,161 58.6 % 187 $ 321,875 44.4 % 8 $ 2,717 71.7 % 251 $ 374,753 46.0 % 61-80% 41 30,451 35.5 % 278 390,019 53.8 % 3 1,074 28.3 % 322 421,544 51.7 % 81-100% 7 5,053 5.9 % 7 10,017 1.4 % — — — % 14 15,070 1.9 % > 100% — — — % 8 3,094 0.4 % — — — % 8 3,094 0.4 % Total 104 $ 85,665 100.0 % 480 $ 725,005 100.0 % 11 $ 3,791 100.0 % 595 $ 814,461 100.0 % December 31, 2016 < 61% 45 $ 39,105 44.7 % 196 $ 336,744 42.9 % 16 $ 7,043 72.2 % 257 $ 382,892 43.4 % 61-80% 52 41,732 47.7 % 306 434,269 55.4 % 6 2,713 27.8 % 364 478,714 54.3 % 81-100% 10 6,632 7.6 % 8 8,828 1.1 % — — — % 18 15,460 1.8 % > 100% — — — % 12 4,523 0.6 % — — — % 12 4,523 0.5 % Total 107 $ 87,469 100.0 % 522 $ 784,364 100.0 % 22 $ 9,756 100.0 % 651 $ 881,589 100.0 % Allowance for Loan and Lease Losses The Company has established credit risk management processes that includes regular management review of the loan and lease portfolio to identify problem loans and leases. During the ordinary course of business, management becomes aware of borrowers and lessees that may not be able to meet the contractual requirements of the loan and lease agreements. Such loans and leases are subject to increased monitoring. Consideration is given to placing the loan or lease on non-accrual status, assessing the need for additional ALLL, and partial or full charge-off. The Company maintains the ALLL at a level that is considered adequate to cover the estimated and known inherent risks in the loan and lease portfolio. The Company also maintains a separate reserve for unfunded loan commitments at a level that is considered adequate to cover the estimated and known inherent risks. The probability of usage of the unfunded loan commitments and credit risk factors determined based on outstanding loan balance of the same customer or outstanding loans that share similar credit risk exposure are used to determine the adequacy of the reserve. At March 31, 2017 and December 31, 2016 , the reserve for unfunded loan commitments was $3.2 million and $2.4 million , respectively. The credit risk monitoring system is designed to identify impaired and potential problem loans, and to permit periodic evaluation of impairment and the adequacy of the allowance for credit losses in a timely manner. In addition, the Board of Directors of the Bank has adopted a credit policy that includes a credit review and control system which it believes should be effective in ensuring that the Company maintains an adequate allowance for loan and lease losses. The Board of Directors also provides oversight and guidance for management’s allowance evaluation process. During the three months ended March 31, 2017, the Company, as part of its continuous evaluation of the ALLL methodology and assumptions, determined it appropriate to change from a rolling 28 -quarter look-back period to a pegged 36 -quarter look-back period. This update to the assumption did not have a material impact. The Company believes that an extended period of observed credit loss stability warranted the review of a longer historical period that captured a full credit cycle. The determination of the amount of the ALLL and the provision for loan and lease losses is based on management’s current judgment about the credit quality of the loan and lease portfolio and considers known relevant internal and external factors that affect collectability when determining the appropriate level for the ALLL. Additions to the ALLL are made by charges to the provision for loan and lease losses. Identified credit exposures that are determined to be uncollectible are charged against the ALLL. Recoveries of previously charged off amounts, if any, are credited to the ALLL. The following table presents a summary of activity in the ALLL for the periods indicated: Three Months Ended March 31, 2017 2016 (In thousands) Balance at beginning of period $ 40,444 $ 35,533 Loans and leases charged off (357 ) (102 ) Recoveries of loans and leases previously charged off 66 93 Provision for loan and lease losses 2,583 321 Balance at end of period $ 42,736 $ 35,845 The following table presents the activity and balance in the ALLL and the recorded investment, excluding accrued interest, in loans and leases based on the impairment methodology as of or for the three months ended March 31, 2017 : Commercial and Industrial Commercial Real Estate Multi- family SBA Construction Lease Financing Single Family Residential Mortgage Other Consumer Total (In thousands) ALLL: Balance at December 31, 2016 $ 7,584 $ 5,467 $ 11,376 $ 939 $ 2,015 $ 6 $ 12,075 $ 982 $ 40,444 Charge-offs (250 ) — — — — — (81 ) (26 ) (357 ) Recoveries — — — 43 — 19 1 3 66 Provision 3,554 (924 ) (347 ) 164 1,003 (20 ) (755 ) (92 ) 2,583 Balance at March 31, 2017 $ 10,888 $ 4,543 $ 11,029 $ 1,146 $ 3,018 $ 5 $ 11,240 $ 867 $ 42,736 Individually evaluated for impairment $ — $ — $ — $ — $ — $ — $ 250 $ — $ 250 Collectively evaluated for impairment 10,888 4,538 11,029 1,127 3,018 5 10,853 867 42,325 Acquired with deteriorated credit quality — 5 — 19 — — 137 — 161 Total ending ALLL balance $ 10,888 $ 4,543 $ 11,029 $ 1,146 $ 3,018 $ 5 $ 11,240 $ 867 $ 42,736 Loans: Individually evaluated for impairment $ — $ — $ — $ — $ 1,528 $ — $ 10,984 $ 883 $ 13,395 Collectively evaluated for impairment 1,580,969 749,440 1,449,715 73,433 140,636 285 1,832,818 124,931 5,952,227 Acquired with deteriorated credit quality 4,687 1,152 — 2,607 — — 131,253 — 139,699 Total ending loan balances $ 1,585,656 $ 750,592 $ 1,449,715 $ 76,040 $ 142,164 $ 285 $ 1,975,055 $ 125,814 $ 6,105,321 The following table presents the activity and balance in the ALLL and the recorded investment, excluding accrued interest, in loans and leases based on the impairment methodology as of or for the three months ended March 31, 2016 : Commercial and Industrial Commercial Real Estate Multi- family SBA Construction Lease Financing Single Family Residential Mortgage Other Consumer Total (In thousands) ALLL: Balance at December 31, 2015 $ 5,850 $ 4,252 $ 6,012 $ 683 $ 1,530 $ 2,195 $ 13,854 $ 1,157 $ 35,533 Charge-offs — — — — — (102 ) — — (102 ) Recoveries — — — 31 — 61 — 1 93 Provision 196 (283 ) 472 192 (10 ) 456 (584 ) (118 ) 321 Balance at March 31, 2016 $ 6,046 $ 3,969 $ 6,484 $ 906 $ 1,520 $ 2,610 $ 13,270 $ 1,040 $ 35,845 Individually evaluated for impairment $ 29 $ — $ — $ — $ — $ — $ 1,347 $ — $ 1,376 Collectively evaluated for impairment 5,959 3,857 6,484 887 1,520 2,610 11,906 1,040 34,263 Acquired with deteriorated credit quality 58 112 — 19 — — 17 — 206 Total ending ALLL balance $ 6,046 $ 3,969 $ 6,484 $ 906 $ 1,520 $ 2,610 $ 13,270 $ 1,040 $ 35,845 Loans: Individually evaluated for impairment $ 4,493 $ 299 $ — $ — $ — $ — $ 34,296 $ 294 $ 39,382 Collectively evaluated for impairment 978,649 705,176 1,021,097 68,700 68,241 212,836 1,576,150 108,861 4,739,710 Acquired with deteriorated credit quality 819 8,218 — 2,940 — — 671,999 — 683,976 Total ending loan balances $ 983,961 $ 713,693 $ 1,021,097 $ 71,640 $ 68,241 $ 212,836 $ 2,282,445 $ 109,155 $ 5,463,068 The following table presents loans and leases individually evaluated for impairment by class of loans and leases as of the dates indicated. The recorded investment, excluding accrued interest, presents customer balances net of any partial charge-offs recognized on the loans and leases and net of any deferred fees and costs and any purchase premium or discount. March 31, 2017 December 31, 2016 Unpaid Principal Balance Recorded Investment ALLL Unpaid Principal Balance Recorded Investment ALLL (In thousands) With no related ALLL recorded: Commercial: Commercial and industrial $ — $ — $ — $ 2,478 $ 2,429 $ — Construction 1,528 1,528 — — — — Consumer: Single family residential mortgage 9,097 9,124 — 8,865 8,887 — Other consumer 884 883 — 294 294 — With an ALLL recorded: Consumer: Single family residential mortgage 1,894 1,860 250 1,772 1,742 243 Total $ 13,403 $ 13,395 $ 250 $ 13,409 $ 13,352 $ 243 The following table presents information on impaired loans and leases, disaggregated by class, for the periods indicated: Three Months Ended Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized (In thousands) March 31, 2017 Commercial: Construction $ 1,528 $ — $ — Consumer: Single family residential mortgage 11,055 43 43 Other consumer 889 2 1 Total $ 13,472 $ 45 $ 44 March 31, 2016 Commercial: Commercial and industrial $ 4,596 $ 63 $ 88 Commercial real estate 305 10 10 Consumer: Single family residential mortgage 34,324 286 265 Other consumer 294 2 2 Total $ 39,519 $ 361 $ 365 Nonaccrual Loans and Leases The following table presents nonaccrual loans and leases, and loans past due 90 days or more and still accruing as of the dates indicated: March 31, 2017 December 31, 2016 NTM Loans Traditional Loans and Leases Total NTM Traditional Loans and Leases Total (In thousands) Loans past due 90 days or more and still accruing $ — $ — $ — $ — $ — $ — Nonaccrual loans and leases: The Company maintains specific allowances for these loans of $0 at March 31, 2017 and December 31, 2016 468 15,754 16,222 467 14,475 14,942 The following table presents the composition of nonaccrual loans and leases as of the dates indicated: March 31, 2017 December 31, 2016 NTM Traditional Loans and Leases Total NTM Traditional Loans and Leases Total (In thousands) Commercial: Commercial and industrial $ — $ 1,506 $ 1,506 $ — $ 3,544 $ 3,544 SBA — 583 583 — 619 619 Construction — 1,528 1,528 — — — Lease financing — 97 97 — 109 109 Consumer: Single family residential mortgage 468 10,559 11,027 467 9,820 10,287 Other consumer — 1,481 1,481 — 383 383 Total nonaccrual loans and leases $ 468 $ 15,754 $ 16,222 $ 467 $ 14,475 $ 14,942 Loans in Process of Foreclosure At March 31, 2017 and December 31, 2016, SFR mortgage loans of $3.4 million and $2.2 million , respectively, were in the process of foreclosure. Past Due Loans and Leases The following table presents the aging of the recorded investment in past due loans and leases as of March 31, 2017 , excluding accrued interest receivable (which is not considered to be material), by class of loans and leases: March 31, 2017 30 - 59 Days Past Due 60 - 89 Days Past Due Greater Total Current Total (In thousands) NTM loans: Single family residential mortgage $ 805 $ — $ 468 $ 1,273 $ 727,523 $ 728,796 Green Loans (HELOC) - first liens — — — — 85,665 85,665 Green Loans (HELOC) - second liens — — — — 3,549 3,549 Total NTM loans 805 — 468 1,273 816,737 818,010 Traditional loans and leases: Commercial: Commercial and industrial 978 4,390 1,011 6,379 1,574,590 1,580,969 Commercial real estate — — — — 749,440 749,440 Multi-family — — — — 1,449,715 1,449,715 SBA 1,386 — 463 1,849 71,584 73,433 Construction — — 1,528 1,528 140,636 142,164 Lease financing — — 97 97 188 285 Consumer: Single family residential mortgage 10,174 3,527 5,544 19,245 1,010,096 1,029,341 Other consumer 1,325 11 691 2,027 120,238 122,265 Total traditional loans and leases 13,863 7,928 9,334 31,125 5,116,487 5,147,612 PCI loans: Commercial: Commercial and industrial 4,004 — 154 4,158 529 4,687 Commercial real estate — — — — 1,152 1,152 SBA 365 — 556 921 1,686 2,607 Consumer: Single family residential mortgage 9,783 2,258 4,233 16,274 114,979 131,253 Total PCI loans 14,152 2,258 4,943 21,353 118,346 139,699 Total $ 28,820 $ 10,186 $ 14,745 $ 53,751 $ 6,051,570 $ 6,105,321 The following table presents the aging of the recorded investment in past due loans and leases as of December 31, 2016 , excluding accrued interest receivable (which is not considered to be material), by class of loans and leases: December 31, 2016 30 - 59 Days Past Due 60 - 89 Days Past Due Greater Total Current Total (In thousands) NTM loans: Single family residential mortgage $ 4,193 $ — $ 467 $ 4,660 $ 789,460 $ 794,120 Green Loans (HELOC) - first liens — — — — 87,469 87,469 Green Loans (HELOC) - second liens — — — — 3,559 3,559 Total NTM loans 4,193 — 467 4,660 880,488 885,148 Traditional loans and leases: Commercial: Commercial and industrial 412 463 3,385 4,260 1,513,940 1,518,200 Commercial real estate — — — — 728,777 728,777 Multi-family — — — — 1,365,262 1,365,262 SBA 15 2 482 499 70,669 71,168 Construction 1,529 — — 1,529 123,571 125,100 Lease financing — — 109 109 270 379 Consumer: Single family residential mortgage 11,225 1,345 9,393 21,963 1,069,866 1,091,829 Other consumer 10,023 933 382 11,338 95,725 107,063 Total traditional loans and leases 23,204 2,743 13,751 39,698 4,968,080 5,007,778 PCI loans: Commercial: Commercial and industrial — — 156 156 4,604 4,760 Commercial real estate — — — — 1,182 1,182 SBA 300 232 328 860 1,812 2,672 Consumer: Single family residential mortgage 10,483 4,063 2,093 16,639 116,573 133,212 Total PCI loans 10,783 4,295 2,577 17,655 124,171 141,826 Total $ 38,180 $ 7,038 $ 16,795 $ 62,013 $ 5,972,739 $ 6,034,752 Troubled Debt Restructurings A modification of a loan constitutes a troubled debt restructuring (TDR) when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The following table summarizes the pre-modification and post-modification balances of the new TDRs for the periods indicated: Three Months Ended Number of Loans Pre- Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment ($ in thousands) March 31, 2017 Consumer: Single family residential mortgage 2 $ 1,266 $ 1,273 Total 2 $ 1,266 $ 1,273 March 31, 2016 Consumer: Single family residential mortgage 38 $ 9,173 $ 9,173 Total 38 $ 9,173 $ 9,173 The following table summarizes the TDRs by modification type for the periods indicated: Three Months Ended Modification Type Change in Principal Payments and Interest Rates Change in Principal Payments Change in Interest Rates Total Count Amount Count Amount Count Amount Count Amount ($ in thousands) March 31, 2017 Consumer: Single family residential mortgage 1 $ 130 1 $ 1,143 — $ — 2 $ 1,273 Total 1 $ 130 1 $ 1,143 — $ — 2 $ 1,273 March 31, 2016 Consumer: Single family residential mortgage 32 $ 8,220 5 $ 875 1 $ 78 38 $ 9,173 Total 32 $ 8,220 5 $ 875 1 $ 78 38 $ 9,173 For the three months ended March 31, 2017 , there was one loan with a principal balance of $124 thousand that was modified as a TDR during the past 12 months that had payment defaults during the period. For the three months ended March 31, 2016 , there were two loans with an aggregate principal balance of $407 thousand that were modified as TDRs during the past 12 months that had payment defaults during the period. TDR loans consist of the following as of the dates indicated: March 31, 2017 December 31, 2016 NTM Loans Traditional Loans Total NTM Loans Traditional Loans Total (In thousands) Consumer: Single family residential mortgage 487 2,435 2,922 853 1,440 2,293 Green Loans (HELOC) - first liens 2,237 — 2,237 2,240 — 2,240 Green Loans (HELOC) - second liens 294 — 294 294 — 294 Total $ 3,018 $ 2,435 $ 5,453 $ 3,387 $ 1,440 $ 4,827 The Company did not have any commitments to lend to customers with outstanding loans that were classified as TDRs as of March 31, 2017 or December 31, 2016 . Credit Quality Indicators The Company categorizes loans and leases into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company performs historical loss analysis that is combined with a comprehensive loan or lease to value analysis to analyze the associated risks in the current loan and lease portfolio. The Company analyzes loans and leases individually by classifying the loans and leases as to credit risk. This analysis includes all loans and leases delinquent over 60 days and non-homogeneous loans and leases such as commercial and commercial real estate loans and leases. The Company uses the following definitions for risk ratings: Pass : Loans and leases classified as pass are in compliance in all respects with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weakness as defined under “Special Mention”, “Substandard” or “Doubtful”. Special Mention : Loans and leases classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the Company’s credit position at some future date. Substandard : Loans and leases classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful : Loans and leases classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. Not-Rated : When accrual of income on a pool of PCI loans with common risk characteristics is appropriate in accordance with ASC 310-30, individual loans in those pools are not risk-rated. The credit criteria evaluated are FICO scores, LTV ratios, delinquency, and actual cash flows versus expected cash flows of the loan pools. Loans and leases not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass rated loans and leases. The following table presents the risk categories for total loans and leases as of March 31, 2017 : March 31, 2017 Pass Special Mention Substandard Doubtful Not-Rated Total (In thousands) NTM loans: Single family residential mortgage $ 726,854 $ 1,474 $ 468 $ — $ — $ 728,796 Green Loans (HELOC) - first liens 83,657 2,008 — — — 85,665 Green Loans (HELOC) - second liens 3,549 — — — — 3,549 Total NTM loans 814,060 3,482 468 — — 818,010 Traditional loans and leases: Commercial: Commercial and industrial 1,563,102 11,638 6,154 75 — 1,580,969 Commercial real estate 746,554 1,340 1,546 — — 749,440 Multi-family 1,449,715 — — — — 1,449,715 SBA 72,816 — 617 — — 73,433 Construction 140,636 — 1,528 — — 142,164 Lease financing 188 — 97 — — 285 Consumer: Single family residential mortgage 1,017,308 1,080 10,953 — — 1,029,341 Other consumer 120,738 46 1,481 — — 122,265 Total traditional loans and leases 5,111,057 14,104 22,376 75 — 5,147,612 PCI loans: Commercial: Commercial and industrial — — 4,687 — — 4,687 Commercial real estate 1,152 — — — — 1,152 SBA 1,251 — 1,356 — — 2,607 Consumer: Single family residential mortgage — — — — 131,253 131,253 Total PCI loans 2,403 — 6,043 — 131,253 139,699 Total $ 5,927,520 $ 17,586 $ 28,887 $ 75 $ 131,253 $ 6,105,321 The following table presents the risk categories for total loans and leases as of December 31, 2016 : December 31, 2016 Pass Special Mention Substandard Doubtful Not-Rated Total (In thousands) NTM loans: Single family residential mortgage $ 792,179 $ 1,474 $ 467 $ — $ — $ 794,120 Green Loans (HELOC) - first liens 85,460 2,009 — — — 87,469 Green Loans (HELOC) - second liens 3,559 — — — — 3,559 Total NTM loans 881,198 3,483 467 — — 885,148 Traditional loans and leases: Commercial: Commercial and industrial 1,508,636 844 8,642 78 — 1,518,200 Commercial real estate 725,861 1,350 1,566 — — 728,777 Multi-family 1,365,262 — — — — 1,365,262 SBA 70,508 — 660 — — 71,168 Construction 123,571 1,529 — — — 125,100 Lease financing 270 — 109 — — 379 Consumer: Single family residential mortgage 1,080,664 950 10,215 — — 1,091,829 Other consumer 106,632 48 383 — — 107,063 Total traditional loans and leases 4,981,404 4,721 21,575 78 — 5,007,778 PCI loans: Commercial: Commercial and industrial — 4,056 704 — — 4,760 Commercial real estate 1,182 — — — — 1,182 SBA 1,268 — 1,404 — — 2,672 Consumer: Single family residential mortgage — — — — 133,212 133,212 Total PCI loans 2,450 4,056 2,108 — 133,212 141,826 Total $ 5,865,052 $ 12,260 $ 24,150 $ 78 $ 133,212 $ 6,034,752 Purchases, Sales, and Transfers The following table presents loans and leases purchased, sold and transferred from (to) held-for-sale by portfolio segment, excluding loans held-for-sale, loans and leases acquired in business combinations and PCI loans for the periods indicated: Three Months Ended Purchases Sales Transfers from (to) Held-For-Sale (In thousands) March 31, 2017 Commercial: Multi-family $ — $ — $ (6,583 ) Consumer: Single family residential mortgage — — (236,510 ) Total $ — $ — $ (243,093 ) March 31, 2016 Commercial: Lease financing $ 31,048 $ — $ — Consumer: Single family residential mortgage — — (56,664 ) Total $ 31,048 $ — $ (56,664 ) Purchased Credit Impaired Loans The Company has acquired loans through business combinations and purchases of loan pools for which there was evidence of deterioration of credit quality subsequent to origination and it was probable, at acquisition, that all contractually required payments would not be collected (referred to as PCI loans). The following table presents the outstanding balance and carrying amount of PCI loans as of the dates indicated: March 31, 2017 December 31, 2016 Outstanding Balance Carrying Amount Outstanding Carrying (In thousands) Commercial: Commercial and industrial $ 4,974 $ 4,687 $ 5,029 $ 4,760 Commercial real estate 1,592 1,152 1,613 1,182 SBA 3,733 2,607 3,771 2,672 Consumer: Single family residential mortgage 150,939 131,253 153,867 133,212 Total $ 161,238 $ 139,699 $ 164,280 $ 141,826 The following table presents a summary of accretable yield, or income expected to be collected, for the periods indicated: Three Months Ended March 31, 2017 2016 (In thousands) Balance at beginning of period $ 41,181 $ 205,549 Accretion of income (1,949 ) (9,708 ) Changes in expected cash flows (225 ) (18,663 ) Disposals (316 ) (1,289 ) Balance at end of period $ 38,691 $ 175,889 The Company did not have any bulk loan acquisition or sale during the three months ended March 31, 2017 or 2016. |