Loans and Allowance for Loan and Lease Losses | Loans and Allowance for Loan and Lease Losses Loans consisted of the following at the dates indicated (dollars in thousands): June 30, 2019 December 31, 2018 Total Percent of Total Total Percent of Total Residential and other consumer: 1-4 single family residential $ 4,830,943 21.4 % $ 4,606,828 21.0 % Government insured residential 354,731 1.6 % 265,701 1.2 % Other 14,533 0.1 % 17,369 0.1 % 5,200,207 23.1 % 4,889,898 22.3 % Commercial: Multi-family 2,381,346 10.6 % 2,583,331 11.8 % Non-owner occupied commercial real estate 4,945,017 21.9 % 4,700,188 21.4 % Construction and land 237,222 1.1 % 227,134 1.0 % Owner occupied commercial real estate 2,080,578 9.2 % 2,122,381 9.7 % Commercial and industrial 5,164,571 22.9 % 4,801,226 21.9 % Commercial lending subsidiaries 2,531,767 11.2 % 2,608,834 11.9 % 17,340,501 76.9 % 17,043,094 77.7 % Total loans 22,540,708 100.0 % 21,932,992 100.0 % Premiums, discounts and deferred fees and costs, net 51,141 44,016 Loans including premiums, discounts and deferred fees and costs 22,591,849 21,977,008 Allowance for loan and lease losses (112,141 ) (109,931 ) Loans, net $ 22,479,708 $ 21,867,077 During the three and six months ended June 30, 2019 and 2018 , the Company purchased 1-4 single family residential loans totaling $589 million , $894 million , $271 million and $604 million , respectively. Purchases for the three and six months ended June 30, 2019 and 2018 included $151 million , $284 million , $72 million and $112 million , respectively, of government insured residential loans. At June 30, 2019 , the Company had pledged real estate loans with a carrying value of approximately $9.9 billion as security for FHLB advances. The following presents the Company's recorded investment in ACI loans, included in the table above, as of the dates indicated (in thousands): June 30, 2019 December 31, 2018 Residential $ 174,029 $ 190,223 Commercial 17,544 17,925 $ 191,573 $ 208,148 At June 30, 2019 and December 31, 2018 , the UPB of ACI loans was $367 million and $408 million , respectively. The accretable yield on ACI loans represents the amount by which undiscounted expected future cash flows exceed recorded investment. Changes in the accretable yield on ACI loans for the six months ended June 30, 2019 and the year ended December 31, 2018 were as follows (in thousands): Balance at December 31, 2017 $ 455,059 Reclassifications from non-accretable difference, net 128,499 Accretion (369,915 ) Other changes, net (1) 78,204 Balance at December 31, 2018 291,847 Reclassifications to non-accretable difference, net (429 ) Accretion (33,103 ) Other changes, net (1) (6,929 ) Balance at June 30, 2019 $ 251,386 (1) Represents changes in cash flows expected to be collected due to the impact of changes in prepayment assumptions or changes in benchmark interest rates. Allowance for loan and lease losses Activity in the ALLL is summarized as follows for the periods indicated (thousands): Three Months Ended June 30, 2019 2018 Residential and Other Consumer Commercial Total Residential and Other Consumer Commercial Total Beginning balance $ 10,952 $ 103,751 $ 114,703 $ 10,832 $ 126,644 $ 137,476 Provision (recovery) 131 (2,878 ) (2,747 ) (280 ) 9,275 8,995 Charge-offs — (1,711 ) (1,711 ) (222 ) (12,046 ) (12,268 ) Recoveries 153 1,743 1,896 8 760 768 Ending balance $ 11,236 $ 100,905 $ 112,141 $ 10,338 $ 124,633 $ 134,971 Six Months Ended June 30, 2019 2018 Residential and Other Consumer Commercial Total Residential and Other Consumer Commercial Total Beginning balance $ 10,788 $ 99,143 $ 109,931 $ 10,720 $ 134,075 $ 144,795 Provision 281 7,253 7,534 94 12,048 12,142 Charge-offs — (7,844 ) (7,844 ) (504 ) (22,396 ) (22,900 ) Recoveries 167 2,353 2,520 28 906 934 Ending balance $ 11,236 $ 100,905 $ 112,141 $ 10,338 $ 124,633 $ 134,971 The following table presents information about the balance of the ALLL and related loans at the dates indicated (in thousands): June 30, 2019 December 31, 2018 Residential and Other Consumer Commercial Total Residential and Other Consumer Commercial Total Allowance for loan and lease losses: Ending balance $ 11,236 $ 100,905 $ 112,141 $ 10,788 $ 99,143 $ 109,931 Ending balance: loans individually evaluated for impairment $ 15 $ 9,481 $ 9,496 $ 134 $ 12,143 $ 12,277 Ending balance: loans collectively evaluated for impairment $ 11,221 $ 91,424 $ 102,645 $ 10,654 $ 87,000 $ 97,654 Ending balance: ACI loans $ — $ — $ — $ — $ — $ — Loans: 0 Ending balance $ 5,267,788 $ 17,324,061 $ 22,591,849 $ 4,948,989 $ 17,028,019 $ 21,977,008 Ending balance: loans individually evaluated for impairment $ 14,572 $ 123,119 $ 137,691 $ 7,690 $ 108,841 $ 116,531 Ending balance: loans collectively evaluated for impairment $ 5,079,187 $ 17,183,398 $ 22,262,585 $ 4,751,076 $ 16,901,253 $ 21,652,329 Ending balance: ACI loans $ 174,029 $ 17,544 $ 191,573 $ 190,223 $ 17,925 $ 208,148 Credit quality information Loans, other than ACI loans and government insured residential loans, are considered impaired when, based on current information and events, it is probable that the Company will be unable to collect the scheduled payments of principal or interest when due, according to the contractual terms of the loan agreements. Commercial relationships with committed balances greater than or equal to $1.0 million that have internal risk ratings of substandard or doubtful and are on non-accrual status, as well as loans that have been modified in TDRs, are individually evaluated for impairment. Other commercial relationships on non-accrual status with committed balances under $1.0 million may also be evaluated individually for impairment at management's discretion. The likelihood of loss related to loans assigned internal risk ratings of substandard or doubtful is considered elevated due to their identified credit weaknesses. Factors considered by management in evaluating impairment include payment status, financial condition of the borrower, collateral value, and other factors impacting the probability of collecting scheduled principal and interest payments when due. An ACI pool or loan is considered to be impaired when it is probable that the Company will be unable to collect all the cash flows expected at acquisition, plus additional cash flows expected to be collected arising from changes in estimates after acquisition. 1-4 single family residential and home equity ACI loans accounted for in pools are evaluated collectively for impairment on a pool by pool basis based on expected pool cash flows. Commercial ACI loans are individually evaluated for impairment based on expected cash flows from the individual loans. Discount continues to be accreted on ACI loans or pools as long as there are expected future cash flows in excess of the current carrying amount of the loans or pools. The table below presents information about loans identified as impaired at the dates indicated (in thousands): June 30, 2019 December 31, 2018 Recorded Investment UPB Related Specific Allowance Recorded Investment UPB Related Specific Allowance With no specific allowance recorded: 1-4 single family residential (1) $ 10,005 $ 9,922 $ — $ 5,724 $ 5,605 $ — Multi-family 24,834 24,866 — 25,560 25,592 — Non-owner occupied commercial real estate 26,101 26,134 — 12,293 12,209 — Construction and land 9,418 9,421 — 9,923 9,925 — Owner occupied commercial real estate 14,791 14,890 — 9,007 9,024 — Commercial and industrial 8,432 8,436 — 13,514 13,519 — Commercial lending subsidiaries 5,205 5,226 — 3,152 3,149 — With a specific allowance recorded: 1-4 single family residential 4,567 4,496 15 1,966 1,941 134 Owner occupied commercial real estate — — — 3,316 3,322 844 Non-owner occupied commercial real estate — — — 1,666 1,667 731 Commercial and industrial 24,522 24,524 6,533 10,939 10,946 3,831 Commercial lending subsidiaries 9,816 9,736 2,948 19,471 19,385 6,737 Total: Residential and other consumer $ 14,572 $ 14,418 $ 15 $ 7,690 $ 7,546 $ 134 Commercial 123,119 123,233 9,481 108,841 108,738 12,143 $ 137,691 $ 137,651 $ 9,496 $ 116,531 $ 116,284 $ 12,277 (1) Includes government insured residential loans modified in TDRs totaling $9.9 million and $3.5 million at June 30, 2019 and December 31, 2018 , respectively. Included in the table above is the guaranteed portion of impaired SBA loans totaling $21.8 million and $13.1 million at June 30, 2019 and December 31, 2018 , respectively, with no specific allowance recorded. Interest income recognized on impaired loans was immaterial for the three and six months ended June 30, 2019 and 2018 . The following table presents the average recorded investment in impaired loans for the periods indicated (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2019 2018 2019 2018 Residential and other consumer: 1-4 single family residential $ 12,732 $ 6,932 $ 11,011 $ 5,764 Commercial: Multi-family 25,066 26,260 25,248 25,490 Non-owner occupied commercial real estate 24,599 14,123 21,563 13,499 Construction and land 9,604 5,244 9,730 4,196 Owner occupied commercial real estate 12,741 16,751 12,124 19,175 Commercial and industrial (1) 32,690 109,186 30,564 109,749 Commercial lending subsidiaries 18,082 1,506 19,982 1,816 122,782 173,070 119,211 173,925 $ 135,514 $ 180,002 $ 130,222 $ 179,689 (1) Includes average recorded investment in taxi medallion loans totaling $93 million and $97 million during the three and six months ended June 30, 2018 , respectively. The following table presents the recorded investment in loans on non-accrual status as of the dates indicated (in thousands): June 30, 2019 December 31, 2018 Residential and other consumer: 1-4 single family residential $ 10,807 $ 6,316 Home equity loans and lines of credit 30 — Other consumer loans 277 288 11,114 6,604 Commercial: Multi-family 24,834 25,560 Non-owner occupied commercial real estate 27,623 16,050 Construction and land 9,418 9,923 Owner occupied commercial real estate 21,752 19,789 Commercial and industrial 27,176 28,584 Commercial lending subsidiaries 16,236 22,733 127,039 122,639 $ 138,153 $ 129,243 Included in the table above is the guaranteed portion of non-accrual SBA loans totaling $28.4 million and $17.8 million at June 30, 2019 and December 31, 2018 , respectively. Loans contractually delinquent by 90 days or more and still accruing totaled $0.7 million at December 31, 2018 . There were no loans contractually delinquent by 90 days or more and still accruing at June 30, 2019 . The amount of additional interest income that would have been recognized on non-accrual loans had they performed in accordance with their contractual terms was approximately $2.5 million and $4.3 million for the three and six months ended June 30, 2019 , respectively, and $1.8 million and $3.0 million three and six months ended June 30, 2018 , respectively. Management considers delinquency status to be the most meaningful indicator of the credit quality of 1-4 single family residential, home equity and consumer loans. Delinquency statistics are updated at least monthly. See "Aging of loans" below for more information on the delinquency status of loans. Original LTV and original FICO score are also important indicators of credit quality for 1-4 single family residential loans other than the FSB loans and government insured loans. Internal risk ratings are considered the most meaningful indicator of credit quality for commercial loans. Internal risk ratings are a key factor in identifying loans that are individually evaluated for impairment and impact management’s estimates of loss factors used in determining the amount of the ALLL. Internal risk ratings are updated on a continuous basis. Generally, relationships with balances in excess of defined thresholds, ranging from $1 million to $3 million , are re-evaluated at least annually and more frequently if circumstances indicate that a change in risk rating may be warranted. Loans exhibiting potential credit weaknesses that deserve management’s close attention and that if left uncorrected may result in deterioration of the repayment capacity of the borrower are categorized as special mention. Loans with well-defined credit weaknesses, including payment defaults, declining collateral values, frequent overdrafts, operating losses, increasing balance sheet leverage, inadequate cash flow, project cost overruns, unreasonable construction delays, past due real estate taxes or exhausted interest reserves, are assigned an internal risk rating of substandard. A loan with a weakness so severe that collection in full is highly questionable or improbable, but because of certain reasonably specific pending factors has not been charged off, will be assigned an internal risk rating of doubtful. The following tables summarize key indicators of credit quality for the Company's loans at the dates indicated. Amounts include premiums, discounts and deferred fees and costs (in thousands): 1-4 Single Family Residential credit exposure for loans, excluding FSB loans and government insured residential loans, based on original LTV and FICO score: June 30, 2019 FICO LTV 720 or less 721 - 740 741 - 760 761 or Total Less than 60% $ 110,475 $ 124,463 $ 190,874 $ 796,918 $ 1,222,730 60% - 70% 139,870 120,664 178,995 625,452 1,064,981 70% - 80% 183,277 221,490 400,406 1,375,700 2,180,873 More than 80% 21,467 35,938 39,863 147,703 244,971 $ 455,089 $ 502,555 $ 810,138 $ 2,945,773 $ 4,713,555 December 31, 2018 FICO LTV 720 or less 721 - 740 741 - 760 761 or Total Less than 60% $ 105,812 $ 123,877 $ 197,492 $ 813,944 $ 1,241,125 60% - 70% 120,982 109,207 170,531 597,659 998,379 70% - 80% 156,519 203,121 374,311 1,264,491 1,998,442 More than 80% 17,352 35,036 36,723 136,487 225,598 $ 400,665 $ 471,241 $ 779,057 $ 2,812,581 $ 4,463,544 Commercial credit exposure, based on internal risk rating: June 30, 2019 Commercial Lending Subsidiaries Multi-Family Non-Owner Occupied Commercial Real Estate Construction Owner Occupied Commercial Real Estate Commercial and Industrial Pinnacle Bridge Total Pass $ 2,335,356 $ 4,826,910 $ 227,476 $ 2,026,416 $ 5,063,682 $ 1,269,469 $ 1,207,657 $ 16,956,966 Special mention — 6,744 — 20,212 24,014 — 8,817 59,787 Substandard 47,760 100,403 9,418 31,189 61,264 — 50,726 300,760 Doubtful — — — — 3,683 — 2,865 6,548 $ 2,383,116 $ 4,934,057 $ 236,894 $ 2,077,817 $ 5,152,643 $ 1,269,469 $ 1,270,065 $ 17,324,061 December 31, 2018 Commercial Lending Subsidiaries Multi-Family Non-Owner Occupied Commercial Real Estate Construction Owner Occupied Commercial Real Estate Commercial and Industrial Pinnacle Bridge Total Pass $ 2,547,835 $ 4,611,029 $ 216,917 $ 2,077,611 $ 4,706,666 $ 1,462,655 $ 1,105,821 $ 16,728,534 Special mention 2,932 16,516 — 13,368 38,097 — 10,157 81,070 Substandard 34,654 61,335 9,923 28,901 43,691 — 31,522 210,026 Doubtful — — — — 1,746 — 6,643 8,389 $ 2,585,421 $ 4,688,880 $ 226,840 $ 2,119,880 $ 4,790,200 $ 1,462,655 $ 1,154,143 $ 17,028,019 Aging of loans: The following table presents an aging of loans at the dates indicated. Amounts include premiums, discounts and deferred fees and costs (in thousands): June 30, 2019 December 31, 2018 Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total Current 30 - 59 Days Past Due 60 - 89 Days Past Due 90 Days or More Past Due Total 1-4 single family residential $ 4,835,228 $ 49,673 $ 2,522 $ 10,129 $ 4,897,552 $ 4,640,771 $ 15,070 $ 2,126 $ 6,953 $ 4,664,920 Government insured residential 37,086 16,530 14,878 287,225 355,719 31,348 8,342 8,871 218,168 266,729 Home equity loans and lines of credit 1,393 22 — 30 1,445 1,393 — — — 1,393 Other consumer loans 12,400 672 — — 13,072 15,947 — — — 15,947 Multi-family 2,364,546 18,570 — — 2,383,116 2,585,421 — — — 2,585,421 Non-owner occupied commercial real estate 4,927,847 714 559 4,937 4,934,057 4,682,443 3,621 1,374 1,442 4,688,880 Construction and land 236,012 — — 882 236,894 224,828 916 — 1,096 226,840 Owner occupied commercial real estate 2,064,064 2,124 — 11,629 2,077,817 2,106,104 2,826 1,087 9,863 2,119,880 Commercial and industrial 5,136,585 5,498 367 10,193 5,152,643 4,772,978 6,732 926 9,564 4,790,200 Commercial lending subsidiaries Pinnacle 1,269,469 — — — 1,269,469 1,462,655 — — — 1,462,655 Bridge 1,252,556 13,879 — 3,630 1,270,065 1,152,312 603 — 1,228 1,154,143 $ 22,137,186 $ 107,682 $ 18,326 $ 328,655 $ 22,591,849 $ 21,676,200 $ 38,110 $ 14,384 $ 248,314 $ 21,977,008 Included in the table above is the guaranteed portion of SBA loans past due more than 90 days totaling $18.4 million and $8.8 million at June 30, 2019 and December 31, 2018 , respectively. Foreclosure of residential real estate The carrying amount of foreclosed residential real estate included in "Other assets" in the accompanying consolidated balance sheets totaled $5 million and $6 million at June 30, 2019 and December 31, 2018 , respectively. The recorded investment in non-government insured residential mortgage loans in the process of foreclosure was $1.6 million at June 30, 2019 and was insignificant at December 31, 2018 . The recorded investment in government insured residential loans in the process of foreclosure totaled $93 million and $85 million at June 30, 2019 and December 31, 2018 , respectively. Troubled debt restructurings The following tables summarize loans that were modified in TDRs during the periods indicated, as well as loans modified during the twelve months preceding June 30, 2019 and 2018 that experienced payment defaults during the periods indicated (dollars in thousands): Three Months Ended June 30, 2019 2018 Loans Modified in TDRs TDRs Experiencing Payment Loans Modified in TDRs TDRs Experiencing Payment Number of Recorded Number of Recorded Number of Recorded Number of Recorded 1-4 single family residential (1) 34 $ 5,164 31 $ 4,355 9 $ 2,106 3 $ 507 Non-owner occupied commercial real estate 1 12,085 1 2,772 — — — — Owner occupied commercial real estate — — 3 1,878 — — — — Commercial and industrial 4 7,354 1 1,233 3 415 2 437 Commercial lending subsidiaries 1 2,073 — — — — — — 40 $ 26,676 36 $ 10,238 12 $ 2,521 5 $ 944 (1) Includes government insured residential loans modified totaling $5 million and $1 million during the three months ended June 30, 2019 and 2018 , respectively. Six Months Ended June 30, 2019 2018 Loans Modified in TDRs TDRs Experiencing Payment Loans Modified in TDRs TDRs Experiencing Payment Number of Recorded Number of Recorded Number of Recorded Number of Recorded 1-4 single family residential (1) 48 $ 7,345 32 $ 4,517 17 $ 5,545 3 $ 507 Non-owner occupied commercial real estate 1 12,085 1 2,772 — — — — Owner occupied commercial real estate 1 849 3 1,878 — — — — Commercial and industrial 6 17,994 1 1,233 8 1,517 5 1,372 Commercial lending subsidiaries 4 4,085 — — — — — — 60 $ 42,358 37 $ 10,400 25 $ 7,062 8 $ 1,879 (1) Includes government insured residential loans modified totaling $7 million and $1 million during the six months ended June 30, 2019 and 2018 , respectively. Modifications during the three and six months ended June 30, 2019 and 2018 included interest rate reductions, restructuring of the amount and timing of required periodic payments, extensions of maturity and covenant waivers. Included in TDRs are residential loans to borrowers who have not reaffirmed their debt discharged in Chapter 7 bankruptcy. The total amount of such loans is not material. Modified ACI loans accounted for in pools are not considered TDRs, are not separated from the pools and are not classified as impaired loans. |