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: ($ in thousands) NTM Loans Traditional Loans and Leases Total Loans and Leases Receivable December 31, 2018 Commercial: Commercial and industrial $ — $ 1,944,142 $ 1,944,142 Commercial real estate — 867,013 867,013 Multifamily — 2,241,246 2,241,246 SBA — 68,741 68,741 Construction — 203,976 203,976 Lease financing — — — Consumer: Single family residential mortgage 824,318 1,481,172 2,305,490 Other consumer 2,413 67,852 70,265 Total loans and leases (1) $ 826,731 $ 6,874,142 $ 7,700,873 Percentage to total loans and leases 10.7 % 89.3 % 100.0 % Allowance for loan and lease losses (62,192 ) Loans and leases receivable, net $ 7,638,681 December 31, 2017 Commercial: Commercial and industrial $ — $ 1,701,951 $ 1,701,951 Commercial real estate — 717,415 717,415 Multifamily — 1,816,141 1,816,141 SBA — 78,699 78,699 Construction — 182,960 182,960 Lease financing — 13 13 Consumer: Single family residential mortgage 803,355 1,252,294 2,055,649 Other consumer 3,578 103,001 106,579 Total loans and leases (1) $ 806,933 $ 5,852,474 $ 6,659,407 Percentage to total loans and leases 12.1 % 87.9 % 100.0 % Allowance for loan and lease losses (49,333 ) Loans and leases receivable, net $ 6,610,074 (1) Total loans and leases includes deferred loan origination costs/(fees) and premiums/(discounts), net of $17.7 million and $6.4 million , respectively, at December 31, 2018 and 2017. Non-Traditional Mortgage Loans The Company’s NTM portfolio is comprised of three interest only products: Green Loans, Interest Only loans and a small number of additional loans with the potential for negative amortization. As of December 31, 2018 and 2017 , the NTM loans totaled $826.7 million , or 10.7 percent of total loans and leases, and $806.9 million , or 12.1 percent of total loans and leases, respectively. The total NTM portfolio increased by $19.8 million , or 2.5 percent , during the year ended December 31, 2018 . The following table presents the composition of the NTM portfolio as of the dates indicated: December 31, 2018 2017 ($ in thousands) Count Amount Percent Count Amount Percent Green Loans (HELOC) - first liens 88 $ 67,729 8.2 % 101 $ 82,197 10.2 % Interest only - first liens 519 753,061 91.1 % 468 717,484 88.9 % Negative amortization 11 3,528 0.4 % 11 3,674 0.5 % Total NTM - first liens 618 824,318 99.7 % 580 803,355 99.6 % Green Loans (HELOC) - second liens 10 2,413 0.3 % 12 3,578 0.4 % Total NTM - second liens 10 2,413 0.3 % 12 3,578 0.4 % Total NTM loans 628 $ 826,731 100.0 % 592 $ 806,933 100.0 % Total loans and leases $ 7,700,873 $ 6,659,407 Percentage to total loans and leases 10.7 % 12.1 % Green Loans Green Loans are single family residential 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 for a 15 -year term with a balloon payment due at maturity. At December 31, 2018 and 2017 , Green Loans totaled $70.1 million and $85.8 million , respectively. At December 31, 2018 and 2017 , none of the Company’s 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 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 single family residential first mortgage loans with payment features that allow interest only payments in initial periods before converting to a fully amortizing loan. At December 31, 2018 and 2017 , Interest Only loans totaled $753.1 million and $717.5 million , respectively. At December 31, 2018 and 2017 , $0 and $1.2 million of the Interest Only loans were non-performing, respectively. Loans with the Potential for Negative Amortization Negative amortization loans totaled $3.5 million and $3.7 million at December 31, 2018 and 2017 , respectively. The Company discontinued origination of negative amortization loans in 2007. At December 31, 2018 and 2017 , none of the loans with 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 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 HELOCs, as needed in conjunction with portfolio management, and ordering third party 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 IARC meets at least quarterly 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. Non-Traditional Mortgage Performance Indicators The following table presents the Company’s Green Loans first lien portfolio at December 31, 2018 by FICO scores that were obtained during the quarter ended December 31, 2018 , comparing to the FICO scores for those same loans that were obtained during the quarter ended December 31, 2017 : December 31, 2018 By FICO Scores Obtained During the Quarter Ended December 31, 2018 By FICO Scores Obtained During the Quarter Ended December 31, 2017 Change ($ in thousands) Count Amount Percent Count Amount Percent Count Amount Percent FICO score 800+ 16 $ 10,617 15.7 % 12 $ 7,407 10.9 % 4 $ 3,210 4.8 % 700-799 50 34,888 51.5 % 44 28,327 41.8 % 6 6,561 9.7 % 600-699 16 14,098 20.8 % 23 23,406 34.6 % (7 ) (9,308 ) (13.8 )% <600 3 4,347 6.4 % 5 4,679 6.9 % (2 ) (332 ) (0.5 )% No FICO score 3 3,779 5.6 % 4 3,910 5.8 % (1 ) (131 ) (0.2 )% Total 88 $ 67,729 100.0 % 88 $ 67,729 100.0 % — $ — — % 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 represents the Company’s single family residential NTM first lien portfolio by LTV ratios as of the dates indicated: LTV Ratios Green Interest Only Negative Amortization Total ($ in thousands) Count Amount Percent Count Amount Percent Count Amount Percent Count Amount Percent December 31, 2018 < 61 69 $ 51,827 76.5 % 312 $ 495,930 65.9 % 11 $ 3,528 100.0 % 392 $ 551,285 66.9 % 61-80 17 13,476 19.9 % 201 245,568 32.6 % — — — % 218 259,044 31.4 % 81-100 2 2,426 3.6 % 5 7,441 1.0 % — — — % 7 9,867 1.2 % > 100 — — — % 1 4,122 0.5 % — — — % 1 4,122 0.5 % Total 88 $ 67,729 100.0 % 519 $ 753,061 100.0 % 11 $ 3,528 100.0 % 618 $ 824,318 100.0 % December 31, 2017 < 61 60 $ 51,241 62.3 % 242 $ 407,810 56.8 % 9 $ 2,826 76.9 % 311 $ 461,877 57.5 % 61-80 33 25,072 30.5 % 220 300,500 41.9 % 2 848 23.1 % 255 326,420 40.6 % 81-100 8 5,884 7.2 % 6 9,174 1.3 % — — — % 14 15,058 1.9 % > 100 — — — % — — — % — — — % — — — % Total 101 $ 82,197 100.0 % 468 $ 717,484 100.0 % 11 $ 3,674 100.0 % 580 $ 803,355 100.0 % Allowance for Loan and Lease Losses The Company has established credit risk management processes that include 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 who may not be able to fulfill the contractual payment 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 of the principal balance. The Company maintains the ALLL at a level that is considered adequate to cover the estimated incurred loss 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 incurred loss. The estimated funding of the loan commitments and credit risk factors determined based on outstanding loans that share similar credit risk exposure are used to determine the adequacy of the reserve. At December 31, 2018 and 2017 , the reserve for unfunded loan commitments was $4.6 million and $3.7 million , respectively, which are recorded in Accrued Expenses and Other Liabilities on the Consolidated Statements of Financial Condition. The credit risk monitoring system is designed to identify impaired and potential problem loans, and to perform periodic evaluation of impairment and the adequacy of the allowance for credit losses in a timely manner. In addition, the Board of Directors of the Bank has adopted a credit policy that includes a credit review and control system that it believes should be effective in ensuring that the Company maintains an adequate allowance for loan and lease losses. The Board of Directors also provides oversight and guidance for management’s allowance evaluation process. The Company’s loan segmentation increased from 11 to 13 segments, with the addition of an Indirect Leverage Lending segment and a Warehouse FixNFlip segment. Management concluded these products represented unique credit and risk characteristics to warrant separate segmentation. Additionally, management enhanced the methodology in the areas of qualitative adjustments, and performed an annual update of the loss emergence period. These updates were designed to be systematic, transparent, and repeatable. None of the updates and enhancements made to the ALLL methodology had a material impact on the reserve at December 31, 2018. The following table presents a summary of activity in the ALLL for the periods indicated: Year Ended December 31, ($ in thousands) 2018 2017 2016 Balance at beginning of year $ 49,333 $ 40,444 $ 35,533 Loans and leases charged-off (18,499 ) (5,581 ) (2,618 ) Recoveries of loans and leases previously charged off 1,143 771 2,258 Provision for loan and lease losses 30,215 13,699 5,271 Balance at end of year $ 62,192 $ 49,333 $ 40,444 During the three months ended March 31, 2018, the Company recorded a charge-off of $13.9 million , which reflected the outstanding balance under a $15.0 million line of credit that was originated during the three months ended March 31, 2018. Subsequent to the granting of the line of credit, representations from the borrower in applying for the line of credit were determined by the Bank to be false, and third party bank account statements provided by the borrower to secure the line of credit were found to be fraudulent. The line of credit was granted after the borrower appeared to have satisfied a pre-condition that the line of credit be fully cash collateralized and secured by a bank account at a third party financial institution pledged to the Bank. As part of the Bank’s credit review and portfolio management process, the line of credit and disbursements were reviewed subsequent to closing and compliance with the borrower’s covenants was monitored. As part of this process, on March 9, 2018, the Bank received information that caused it to believe the existence of the pledged bank account had been misrepresented by the borrower and that the account had previously been closed. The Bank filed an action in federal court pursuing the borrower and other parties and is also considering other available sources of collection and other potential means of mitigating the loss; however, no assurance can be given that it will be successful in this regard. Upon extensive review of the underwriting process for this loan, the Bank determined that this loan was the result of an isolated event of external fraud. The following table presents the activity and balance in the ALLL and the recorded investment, excluding accrued interest, in loans and leases by portfolio segment and is based on the impairment method as of or for the year ended December 31, 2018 : ($ in thousands) Commercial and Industrial Commercial Real Estate Multifamily SBA Construction Lease Financing Single Family Residential Mortgage Other Consumer Total ALLL: Balance at December 31, 2017 $ 14,280 $ 4,971 $ 13,265 $ 1,701 $ 3,318 $ — $ 10,996 $ 802 $ 49,333 Charge-offs (1,927 ) — (14 ) (1,927 ) — — (558 ) (14,073 ) (18,499 ) Recoveries 396 — — 273 — 15 436 23 1,143 Provision 5,442 1,703 4,719 1,780 143 (15 ) 2,254 14,189 30,215 Balance at December 31, 2018 $ 18,191 $ 6,674 $ 17,970 $ 1,827 $ 3,461 $ — $ 13,128 $ 941 $ 62,192 Individually evaluated for impairment $ — $ — $ — $ 562 $ — $ — $ 161 $ 106 $ 829 Collectively evaluated for impairment 18,191 6,674 17,970 1,265 3,461 — 12,967 835 61,363 Total ending ALLL $ 18,191 $ 6,674 $ 17,970 $ 1,827 $ 3,461 $ — $ 13,128 $ 941 $ 62,192 Loans and leases: Individually evaluated for impairment $ 5,455 $ — $ — $ 2,376 $ — $ — $ 18,193 $ 921 $ 26,945 Collectively evaluated for impairment 1,938,687 867,013 2,241,246 66,365 203,976 — 2,287,297 69,344 7,673,928 Total loans and leases $ 1,944,142 $ 867,013 $ 2,241,246 $ 68,741 $ 203,976 $ — $ 2,305,490 $ 70,265 $ 7,700,873 The following table presents the activity and balance in the ALLL and the recorded investment, excluding accrued interest, in loans and leases by portfolio segment and is based on the impairment method as of or for the year ended December 31, 2017 : ($ in thousands) Commercial and Industrial Commercial Real Estate Multifamily SBA Construction Lease Financing Single Family Residential Mortgage Other Consumer Total ALLL: Balance at December 31, 2016 $ 7,584 $ 5,467 $ 11,376 $ 939 $ 2,015 $ 6 $ 12,075 $ 982 $ 40,444 Charge-offs (1,730 ) (113 ) — (625 ) (29 ) — (2,806 ) (278 ) (5,581 ) Recoveries 54 — — 422 — 32 1 262 771 Provision 8,372 (383 ) 1,889 965 1,332 (38 ) 1,726 (164 ) 13,699 Balance at December 31, 2017 $ 14,280 $ 4,971 $ 13,265 $ 1,701 $ 3,318 $ — $ 10,996 $ 802 $ 49,333 Individually evaluated for impairment $ 498 $ — $ — $ 435 $ — $ — $ 277 $ 7 $ 1,217 Collectively evaluated for impairment 13,782 4,971 13,265 1,266 3,318 — 10,719 795 48,116 Total ending ALLL $ 14,280 $ 4,971 $ 13,265 $ 1,701 $ 3,318 $ — $ 10,996 $ 802 $ 49,333 Loans and leases: Individually evaluated for impairment $ 3,582 $ — $ — $ 944 $ — $ — $ 14,699 $ 4,825 $ 24,050 Collectively evaluated for impairment 1,698,369 717,415 1,816,141 77,755 182,960 13 2,040,950 101,754 6,635,357 Total loans and leases $ 1,701,951 $ 717,415 $ 1,816,141 $ 78,699 $ 182,960 $ 13 $ 2,055,649 $ 106,579 $ 6,659,407 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. December 31, 2018 2017 ($ in thousands) Unpaid Principal Balance Recorded Investment Allowance for Loan and Lease Losses Unpaid Principal Balance Recorded Investment Allowance for Loan and Lease Losses With no related allowance recorded: Commercial: Commercial and industrial $ 5,491 $ 5,455 $ — $ 471 $ 453 $ — SBA 1,668 1,588 — 342 335 — Consumer: Single family residential mortgage 12,115 12,161 — 7,521 7,553 — Other consumer 469 469 — 4,664 4,663 — With an allowance recorded: Commercial: Commercial and industrial — — — 3,146 3,129 498 SBA 823 788 562 635 609 435 Consumer: Single family residential mortgage 5,993 6,032 161 7,090 7,146 277 Other consumer 468 452 106 157 162 7 Total $ 27,027 $ 26,945 $ 829 $ 24,026 $ 24,050 $ 1,217 The following table presents information on impaired loans and leases, disaggregated by class, for the periods indicated: Year Ended December 31, 2018 2017 2016 ($ in thousands) Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized Average Recorded Investment Interest Income Recognized Cash Basis Interest Recognized Commercial: Commercial and industrial $ 5,380 $ 4 $ 4 $ 1,034 $ — $ — $ 3,490 $ 183 $ 208 Commercial real estate — — — — — — 148 24 24 Multifamily — — — — — — — — — SBA 986 4 3 357 — — — — — Construction — — — 382 — — — — — Lease Financing — — — 19 — — — — — Consumer: Single family residential mortgage 19,694 236 199 12,611 199 182 27,150 862 835 Other consumer 771 12 11 1,757 8 8 294 8 9 Total $ 26,831 $ 256 $ 217 $ 16,158 $ 207 $ 190 $ 31,081 $ 1,077 $ 1,076 Past Due Loans and Leases The following table presents the aging of the recorded investment in past due loans and leases as of December 31, 2018 , excluding accrued interest receivable (which is not considered to be material), by class of loans and leases: December 31, 2018 ($ in thousands) 30 - 59 Days Past Due 60 - 89 Days Past Due Greater than 89 Days Past due Total Past Due Current Total NTM loans: Single family residential mortgage $ 7,430 $ 617 $ — $ 8,047 $ 816,271 $ 824,318 Other consumer — — — — 2,413 2,413 Total NTM loans 7,430 617 — 8,047 818,684 826,731 Traditional loans and leases: Commercial: Commercial and industrial 350 1,596 3,340 5,286 1,938,856 1,944,142 Commercial real estate — 582 — 582 866,431 867,013 Multifamily 356 — — 356 2,240,890 2,241,246 SBA 551 77 862 1,490 67,251 68,741 Construction — 939 — 939 203,037 203,976 Lease financing — — — — — — Consumer: Single family residential mortgage 7,321 3,160 9,198 19,679 1,461,493 1,481,172 Other consumer 3,132 573 446 4,151 63,701 67,852 Total traditional loans and leases 11,710 6,927 13,846 32,483 6,841,659 6,874,142 Total loans and leases $ 19,140 $ 7,544 $ 13,846 $ 40,530 $ 7,660,343 $ 7,700,873 The following table presents the aging of the recorded investment in past due loans and leases as of December 31, 2017 , excluding accrued interest receivable (which is not considered to be material), by class of loans and leases: December 31, 2017 ($ in thousands) 30 - 59 Days Past Due 60 - 89 Days Past Due Greater than 89 Days Past due Total Past Due Current Total NTM loans: Single family residential mortgage $ 9,060 $ 1,879 $ 1,171 $ 12,110 $ 791,245 $ 803,355 Other consumer — — — — 3,578 3,578 Total NTM loans 9,060 1,879 1,171 12,110 794,823 806,933 Traditional loans and leases: Commercial: Commercial and industrial 136 3,595 948 4,679 1,697,272 1,701,951 Commercial real estate — — — — 717,415 717,415 Multifamily — — — — 1,816,141 1,816,141 SBA 3,578 — 1,319 4,897 73,802 78,699 Construction — — — — 182,960 182,960 Lease financing — — — — 13 13 Consumer: Single family residential mortgage 6,862 3,370 6,012 16,244 1,236,050 1,252,294 Other consumer 3,194 413 92 3,699 99,302 103,001 Total traditional loans and leases 13,770 7,378 8,371 29,519 5,822,955 5,852,474 Total loans and leases $ 22,830 $ 9,257 $ 9,542 $ 41,629 $ 6,617,778 $ 6,659,407 Non-accrual Loans and Leases The following table presents the composition of non-accrual loans and leases as of the dates indicated: December 31, 2018 2017 ($ in thousands) NTM Loans Traditional Loans and Leases Total NTM Loans Traditional Loans and Leases Total Commercial: Commercial and industrial $ — $ 5,455 $ 5,455 $ — $ 3,723 $ 3,723 SBA — 2,574 2,574 — 1,781 1,781 Consumer: Single family residential mortgage — 12,929 12,929 1,171 8,176 9,347 Other consumer — 627 627 — 4,531 4,531 Total $ — $ 21,585 $ 21,585 $ 1,171 $ 18,211 $ 19,382 At December 31, 2018 and 2017 , $470 thousand and $0 of loans were past due 90 days or more and still accruing. Loans in Process of Foreclosure At December 31, 2018 and 2017 , consumer mortgage loans of $5.1 million and $4.3 million , respectively, were secured by residential real estate properties for which formal foreclosure proceedings were in the process according to local requirements of the applicable jurisdiction. Troubled Debt Restructurings A modification of a loan constitutes a TDR when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of the loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. Troubled debt restructured loans and leases consisted of the following as of the dates indicated: December 31, 2018 2017 ($ in thousands) NTM Loans Traditional Loans Total NTM Loans Traditional Loans Total Commercial: Commercial and industrial $ — $ 2,276 $ 2,276 $ — $ 2,675 $ 2,675 SBA — 187 187 — — — Consumer: Single family residential mortgage 2,668 2,596 5,264 2,699 2,653 5,352 Other consumer 294 — 294 294 — 294 Total $ 2,962 $ 5,059 $ 8,021 $ 2,993 $ 5,328 $ 8,321 The Company did not have any commitments to lend to customers with outstanding loans that were classified as troubled debt restructurings as of December 31, 2018 and 2017 . Accruing TDRs were $5.7 million and non-accrual TDRs were $2.3 million at December 31, 2018 compared to accruing TDRs $5.6 million and non-accrual TDRs of $2.7 million at December 31, 2017. The following table summarizes the pre-modification and post-modification balances of the new TDRs for the periods indicated: Year Ended December 31, 2018 2017 2016 ($ in thousands) Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Outstanding Recorded Investment Commercial: Commercial and industrial 2 $ 171 $ 163 1 $ 2,706 $ 2,706 — $ — $ — SBA 1 187 187 — — — — — — Consumer: Single family residential mortgage — — — 3 2,416 2,433 42 10,278 10,273 Total 3 $ 358 $ 350 4 $ 5,122 $ 5,139 42 $ 10,278 $ 10,273 For the years ended December 31, 2018 , 2017 , and 2016 , there were no loans and leases that were modified as TDRs during the past 12 months that had subsequent payment defaults during the periods. The following table summarizes the TDRs by modification type for the periods indicated: Modification Type Change in Principal Payments and Interest Rates Change in Principal Payments Change in Interest Rates Chapter 7 Bankruptcy Other Total ($ in thousands) Count Amount Count Amount Count Amount Count Amount Count Amount Count Amount Year ended December 31, 2018 Commercial: Commercial and industrial — $ — 2 $ 163 — $ — — $ — — $ — 2 $ 163 SBA — — — — — — — — 1 187 1 187 Total — $ — 2 $ 163 — $ — — $ — 1 $ 187 3 $ 350 Year ended December 31, 2017 Commercial: Commercial and industrial — $ — 1 $ 2,706 — $ — — $ — — $ — 1 $ 2,706 Consumer: Single family residential mortgage 2 1,290 1 1,143 — — — — — — 3 2,433 Total 2 $ 1,290 2 $ 3,849 — $ — — $ — — $ — 4 $ 5,139 Year ended December 31, 2016 Consumer: Single family residential mortgage 34 $ 8,622 4 $ 780 2 $ 146 1 $ 519 1 $ 206 42 $ 10,273 Total 34 $ 8,622 4 $ 780 2 $ 146 1 $ 519 1 $ 206 42 $ 10,273 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. 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 December 31, 2018 : December 31, 2018 ($ in thousands) Pass Special Mention Substandard Doubtful Total NTM loans: Single family residential mortgage $ 811,056 $ 10,966 $ 2,296 $ — $ 824,318 Other consumer 2,413 — — — 2,413 Total NTM loans 813,469 10,966 2,296 — 826,731 Traditional loans and leases: Commercial: Commercial and industrial 1,859,569 41,302 43,271 — 1,944,142 Commercial real estate 851,604 11,376 4,033 — 867,013 Multifamily 2,239,301 — 1,945 — 2,241,246 SBA 53,433 6,114 8,340 854 68,741 Construction 197,851 3,606 2,519 — 203,976 Lease financing — — — — — Consumer: Single family residential mortgage 1,461,721 2,602 16,849 — 1,481,172 Other consumer 66,228 979 645 — 67,852 Total traditional loans and leases 6,729,707 65,979 77,602 854 6,874,142 Total loans and leases $ 7,543,176 $ 76,945 $ 79,898 $ 854 $ 7,700,873 The following table presents the risk categories for total loans and leases as of December 31, 2017 : December 31, 2017 ($ in thousands) Pass Special Mention Substandard Doubtful Total NTM loans: Single family residential mortgage $ 800,589 $ 1,595 $ 1,171 $ — $ 803,355 Other consumer 3,578 — — — 3,578 Total NTM loans 804,167 1,595 1,171 — 806,933 Traditional loans and leases: Commercial: Commercial and industrial 1,651,628 33,376 16,947 — 1,701,951 Commercial real estate 713,131 — 4,284 — 717,415 Multifamily 1,815,601 540 — — 1,816,141 SBA 72,417 1,555 4,621 106 78,699 Construction 182,960 — — — 182,960 Lease financing 13 — — — 13 Consumer: Single family residential mortgage 1,240,866 2,282 9,146 — 1,252,294 Other consumer 98,030 422 4,549 — 103,001 Total traditional loans and leases 5,774,646 38,175 39,547 106 5,852,474 Total loans and leases $ 6,578,813 $ 39,770 $ 40,718 $ 106 $ 6,659,407 Purchases and Sales The following table presents loans and leases purchased and/or sold by portfolio segment, excluding loans held-for-sale, loans and leases acquired in business combinations or sold in sales of branches and business units, and PCI loans for the periods indicated: Year Ended December 31, 2018 2017 2016 ($ in thousands) Purchases Sales Purchases Sales Purchases Sales Commercial: Lease financing $ — $ — $ — $ — $ 91,247 $ (19,741 ) Consumer: Single family residential mortgage 59,481 — — — — (149,413 ) Total $ 59,481 $ — $ — $ — $ 91,247 $ (169,154 ) Loan purchases during the year ended December 31, 2018 were made at a net premium of $2.3 million . For the purchased loans and leases disclosed above, the Company did not incur any specific allowances for loan and lease losses during the years ended December 31, 2018 , 2017 , and 2016 . The Company determined that it was probable at acquisition that all contractually required payments would be collected. The sales of loans and leases above exclude the transfer of lease financing loans totaling $242.7 million in the sale of the Commercial Equipment Finance business unit to Hanmi during the year ended December 31, 2016. The following table presents loans and leases transferred from (to) loans held-for-sale by portfolio segment, excluding loans and leases transferred in connection with sales of branches and business units, and PCI loans for the periods indicated: Year Ended December 31, 2018 2017 2016 ($ in thousands) Transfers from Held-For-Sale Transfers to Held-For-Sale Transfers from Held-For-Sale Transfers to Held-For-Sale Transfers from Held-For-Sale Transfers to Held-For-Sale Commercial: Commercial and industrial $ — $ (1,133 ) $ — $ (3,924 ) $ — $ (1,757 ) Commercial real estate — — — (1,329 ) — (2,792 ) Multifamily — (81,449 ) — (6,583 ) — (81,780 ) SBA — — — (1,865 ) — — Construction — (434 ) — (1,528 ) — — Consumer: Single family residential mortgage — (289,617 ) 88,591 (450,625 ) 7,115 (105,337 ) Other consumer — (4,362 ) — — — — Total $ — $ (376,995 ) $ 88,591 $ (465,854 ) $ 7,115 $ (191,666 ) Purchased Credit Impaired Loans The Company had no PCI loans at December 31, 2018 or 2017, due mainly to the sale of seasoned SFR mortgage PCI loans during the year ended December 31, 2017. The Company had 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. The following table presents a summary of accretable yield, or income expected to be collected for the periods indicated for PCI loans: Year Ended December 31, ($ in thousands) 2018 2017 2016 Balance at beginning of year $ — $ 41,181 $ 205,549 New loans or leases purchased — — 23,568 Accretion of income — (3,833 ) (34,616 ) Decrease in expected cash flows — (225 ) (10,650 ) Disposals — |