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Loans Held for Investment (Tables)
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Schedule of components of loans held for investment
The following table presents the composition of the loan portfolio for the period indicated:
September 30,December 31,
20202019
(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied$2,707,930 $2,070,141 
Multifamily5,142,069 1,575,726 
Construction and land337,872 438,786 
SBA secured by real estate57,610 68,431 
Total investor loans secured by real estate8,245,481 4,153,084 
Business loans secured by real estate
CRE owner-occupied2,119,788 1,846,554 
Franchise real estate secured359,329 353,240 
SBA secured by real estate84,126 88,381 
Total business loans secured by real estate2,563,243 2,288,175 
Commercial loans
Commercial and industrial1,820,995 1,393,270 
Franchise non-real estate secured515,980 564,357 
SBA non-real estate secured16,748 17,426 
Total commercial loans2,353,723 1,975,053 
Retail loans
Single family residential243,359 255,024 
Consumer45,034 50,975 
Total retail loans288,393 305,999 
Gross loans held for investment (1)
13,450,840 8,722,311 
Allowance for credit losses for loans held for investment (2)
(282,503)(35,698)
Loans held for investment, net$13,168,337 $8,686,613 
Loans held for sale, at lower of cost or fair value$1,032 $1,672 
______________________________
(1) Includes unaccreted fair value net purchase discounts of $126.3 million and $40.7 million as of September 30, 2020 and December 31, 2019, respectively.
(2) The allowance for credit losses as of December 31, 2019 was the allowance for loan and lease losses (“ALLL”) accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. The allowance for credit losses at September 30, 2020 is accounted for under ASC 326, which is reflective of estimated expected lifetime credit losses.
Summary of loan portfolio by the Company's internal risk grading system
The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of September 30, 2020:
Term Loans by Vintage
20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2020(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied
Pass$190,701 $566,855 $475,363 $314,190 $290,179 $852,044 $11,031 $— $2,700,363 
Special mention— — 1,839 435 — 1,816 — — 4,090 
Substandard— — 202 — 517 2,199 559 — 3,477 
Multifamily
Pass638,349 1,735,235 964,740 750,548 412,893 639,171 574 — 5,141,510 
Substandard— — — 559 — — — — 559 
Construction and land
Pass25,240 145,709 104,702 33,023 19,932 7,997 374 — 336,977 
Substandard— — 895 — — — — — 895 
SBA secured by real estate
Pass494 10,412 11,058 14,842 6,712 9,037 — — 52,555 
Substandard— 163 2,117 698 399 1,678 — — 5,055 
Total investor loans secured by real estate$854,784 $2,458,374 $1,560,916 $1,114,295 $730,632 $1,513,942 $12,538 $— $8,245,481 
Business loans secured by real estate
CRE owner-occupied
Pass$210,662 $412,186 $358,157 $346,906 $235,040 $505,999 $4,593 $— $2,073,543 
Special mention— 15,827 — 10,268 4,186 2,008 — — 32,289 
Substandard— — 3,636 725 2,666 6,679 250 — 13,956 
Franchise real estate secured
Pass20,507 87,749 74,459 102,756 31,512 42,346 — — 359,329 
SBA secured by real estate
Pass2,643 7,658 14,054 17,110 9,643 26,768 95 — 77,971 
Substandard— — 22 1,994 914 3,225 — — 6,155 
Total loans secured by business real estate$233,812 $523,420 $450,328 $479,759 $283,961 $587,025 $4,938 $— $2,563,243 
Term Loans by Vintage
20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2020(Dollars in thousands)
Commercial Loans
Commercial and industrial
Pass$98,656 $339,144 $183,259 $232,648 $71,414 $94,220 $682,523 $6,311 $1,708,175 
Special mention— 43 17,231 15,810 1,398 — 7,886 — 42,368 
Substandard— 4,902 22,763 1,111 1,265 4,393 34,271 1,747 70,452 
Franchise non-real estate secured
Pass20,205 201,621 117,113 53,160 47,290 43,239 1,361 511 484,500 
Substandard— 2,050 957 28,473 — — — — 31,480 
SBA non-real estate secured
Pass355 2,299 1,700 2,254 623 3,881 — 268 11,380 
Special mention— — — 1,661 — — — — 1,661 
Substandard— 85 369 820 275 1,424 734 — 3,707 
Total commercial loans$119,216 $550,144 $343,392 $335,937 $122,265 $147,157 $726,775 $8,837 $2,353,723 
Retail Loans
Single family residential
Pass$4,469 $8,385 $14,972 $14,884 $35,074 $133,137 $31,452 — $242,373 
Special mention— — — — — 57 — — 57 
Substandard— — — — — 929 — — 929 
Consumer loans
Pass63 142 60 38,037 12 3,255 3,422 — 44,991 
Substandard— — — — — 43 — — 43 
Total retail loans$4,532 $8,527 $15,032 $52,921 $35,086 $137,421 $34,874 $— $288,393 
Totals gross loans$1,212,344 $3,540,465 $2,369,668 $1,982,912 $1,171,944 $2,385,545 $779,125 $8,837 $13,450,840 
The following tables stratify the loan portfolio by the Company’s internal risk grading as of December 31, 2019:
 Credit Risk Grades
PassSpecial
Mention		SubstandardTotal Gross
Loans
December 31, 2019(Dollars in thousands)
Investor loans secured by real estate    
CRE non-owner-occupied$2,067,875 $1,178 $1,088 $2,070,141 
Multifamily1,575,510 — 216 1,575,726 
Construction and land438,769 — 17 438,786 
SBA secured by real estate65,835 973 1,623 68,431 
Total investor loans secured by real estate4,147,989 2,151 2,944 4,153,084 
Business loans secured by real estate
CRE owner-occupied1,831,853 11,167 3,534 1,846,554 
Franchise real estate secured352,319 921 — 353,240 
SBA secured by real estate83,106 1,842 3,433 88,381 
Total business loans secured by real estate2,267,278 13,930 6,967 2,288,175 
Commercial loans   
Commercial and industrial1,359,662 13,226 20,382 1,393,270 
Franchise non-real estate secured546,594 6,930 10,833 564,357 
SBA not secured by real estate13,933 485 3,008 17,426 
Total commercial loans1,920,189 20,641 34,223 1,975,053 
Retail loans
Single family residential254,463 — 561 255,024 
Consumer loans50,921 — 54 50,975 
Total retail loans305,384 — 615 305,999 
Total gross loans$8,640,840 $36,722 $44,749 $8,722,311 
The following table presents PD bands for commercial real estate and commercial loan segments of the loan portfolio as of the date indicated.

Commercial Real Estate Term Loans by Vintage
20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2020(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied
0% - 5.00%$188,404 $543,940 $374,636 $265,887 $266,967 $792,295 $10,788 $— $2,442,917 
>5.00% - 10.00%— 7,015 102,566 10,874 17,282 25,791 243 — 163,771 
Greater than 10%2,297 15,900 202 37,864 6,447 37,973 559 — 101,242 
Multifamily
0% - 5.00%630,900 1,709,927 935,659 723,886 399,890 618,503 574 — 5,019,339 
>5.00% - 10.00%4,251 11,286 14,944 14,708 2,836 2,102 — — 50,127 
Greater than 10%3,198 14,022 14,137 12,513 10,167 18,566 — — 72,603 
Construction and Land
0% - 5.00%24,862 56,858 12,550 22,362 — 6,448 — — 123,080 
>5.00% - 10.00%— 36,289 10,750 466 — — — — 47,505 
Greater than 10%378 52,562 82,297 10,195 19,932 1,549 374 — 167,287 
SBA secured by real estate
0% - 5.00%494 10,412 12,584 15,540 7,111 10,204 — — 56,345 
>5.00% - 10.00%— — — — — — — — — 
Greater than 10%— 163 591 — — 511 — — 1,265 
Total investor loans secured by real estate$854,784 $2,458,374 $1,560,916 $1,114,295 $730,632 $1,513,942 $12,538 $— $8,245,481 
Business loans secured by real estate
CRE owner-occupied
0% - 5.00%$202,228 $368,034 $299,843 $296,647 $197,043 $426,513 $520 $— $1,790,828 
>5.00% - 10.00%8,434 37,617 58,314 53,967 39,056 78,666 3,826 — 279,880 
Greater than 10%— 22,362 3,636 7,285 5,793 9,507 497 — 49,080 
Franchise real estate secured
0% - 5.00%19,753 85,363 73,100 102,756 31,512 42,346 — — 354,830 
>5.00% - 10.00%754 — 631 — — — — — 1,385 
Greater than 10%— 2,386 728 — — — — — 3,114 
SBA secured by real estate
0% - 5.00%2,643 7,658 13,375 15,993 6,150 22,077 95 — 67,991 
>5.00% - 10.00%— — 679 1,117 3,493 4,679 — — 9,968 
Greater than 10%— — 22 1,994 914 3,237 — — 6,167 
Total business loans secured by real estate$233,812 $523,420 $450,328 $479,759 $283,961 $587,025 $4,938 $— $2,563,243 
Commercial Real Estate Term Loans by Vintage
20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2020(Dollars in thousands)
Commercial Loans
Commercial and industrial
0% - 5.00%$90,745 $289,250 $141,811 $206,524 $49,843 $76,628 $343,482 $4,024 $1,202,307 
>5.00% - 10.00%7,911 48,778 39,716 19,950 18,894 14,807 302,843 2,037 454,936 
Greater than 10%— 6,061 41,726 23,095 5,340 7,178 78,355 1,997 163,752 
Franchise non-real estate secured
0% - 5.00%14,547 193,899 112,760 48,916 45,265 40,753 1,361 511 458,012 
>5.00% - 10.00%5,658 7,722 4,353 4,245 2,025 2,486 — — 26,489 
Greater than 10%— 2,050 957 28,472 — — — — 31,479 
SBA not secured by real estate
0% - 5.00%355 2,299 1,392 1,460 499 2,571 — 268 8,844 
>5.00% - 10.00%— — 308 796 124 1,285 — — 2,513 
Greater than 10%— 85 369 2,479 275 1,449 734 — 5,391 
Total commercial loans$119,216 $550,144 $343,392 $335,937 $122,265 $147,157 $726,775 $8,837 $2,353,723 
The following table summarizes the amortized cost of loans in these segments by current estimated LTV and by year of origination as of the date indicated:
Term Loans by Vintage
20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2020(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied
55% and below$100,859 $238,182 $190,263 $156,791 $192,044 $602,788 $11,031 — $1,491,958 
>55-65%71,824 220,089 110,830 136,117 84,644 217,812 559 — 841,875 
>65-75%18,018 105,825 171,532 18,946 13,796 30,887 — — 359,004 
Greater than 75%— 2,759 4,779 2,771 212 4,572 — — 15,093 
Multifamily
55% and below147,694 347,848 303,801 252,662 90,318 294,211 574 — 1,437,108 
>55-65%233,564 742,570 406,271 234,044 169,033 242,603 — — 2,028,085 
>65-75%257,091 628,393 244,007 262,512 153,542 96,542 — — 1,642,087 
Greater than 75%— 16,424 10,661 1,889 — 5,815 — — 34,789 
Construction and land
55% and below24,116 129,160 66,830 26,261 19,932 7,997 374 — 274,670 
>55-65%1,124 13,254 23,699 6,762 — — — — 44,839 
>65-75%— 3,295 15,068 — — — — — 18,363 
Greater than 75%— — — — — — — — — 
SBA secured by real estate
55% and below— 2,070 653 673 330 785 — — 4,511 
>55-65%— 2,433 1,643 4,017 621 4,482 — — 13,196 
>65-75%— 3,905 5,075 4,185 4,795 1,897 — — 19,857 
Greater than 75%494 2,167 5,804 6,665 1,365 3,551 — — 20,046 
Total investor loans secured by real estate$854,784 $2,458,374 $1,560,916 $1,114,295 $730,632 $1,513,942 $12,538 $— $8,245,481 
Business loan secured by real estate
CRE owner-occupied
55% and below$56,954 $156,880 $171,740 $203,875 $133,740 $357,734 $4,843 — $1,085,766 
>55-65%56,139 93,895 97,245 94,359 73,389 80,933 — — 495,960 
>65-75%55,932 155,872 80,898 46,241 32,547 50,458 — — 421,948 
Greater than 75%41,637 21,366 11,910 13,424 2,216 25,561 — — 116,114 
Franchise real estate secured
55% and below7,462 13,322 14,407 21,162 11,592 20,549 — — 88,494 
>55-65%— 9,981 15,893 23,658 7,784 5,862 — — 63,178 
>65-75%3,972 53,584 21,750 9,768 11,017 14,697 — — 114,788 
Greater than 75%9,073 10,862 22,409 48,168 1,119 1,238 — — 92,869 
SBA secured by real estate
55% and below1,355 1,633 5,376 5,683 3,175 15,281 95 — 32,598 
>55-65%104 513 1,802 1,719 3,706 5,665 — — 13,509 
>65-75%264 3,148 751 4,193 2,340 5,401 — — 16,097 
Greater than 75%920 2,364 6,147 7,509 1,336 3,646 — — 21,922 
Total business loans secured by real estate$233,812 $523,420 $450,328 $479,759 $283,961 $587,025 $4,938 $— $2,563,243 
The following table presents FICO bands for the retail segment of the loan portfolio as of the date indicated:
Term Loans by Vintage
20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2020(Dollars in thousands)
Retail Loans
Single family residential
Greater than 740$4,469 $7,198 $12,719 $9,658 $29,291 $91,460 $22,566 — $177,361 
>680 - 740— 1,187 2,253 4,763 2,641 28,625 7,919 — 47,388 
>580 - 680— — — 463 3,142 11,113 932 — 15,650 
Less than 580— — — — — 2,925 35 — 2,960 
Consumer loans
Greater than 74063 85 54 46 10 2,648 1,670 — 4,576 
>680 - 740— 40 6 37,991 — 480 1,665 — 40,182 
>580 - 680— 17 — — 2 144 59 — 222 
Less than 580— — — — — 26 28 — 54 
Total retail loans$4,532 $8,527 $15,032 $52,921 $35,086 $137,421 $34,874 $— $288,393 
Schedule of delinquencies in the Company's loan portfolio
The following tables stratify loans held by investment by delinquencies in the Company’s loan portfolio at the dates indicated:
Days Past Due
Current30-5960-8990+Total
September 30, 2020(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied$2,707,169 $— $— $761 $2,707,930 
Multifamily5,142,069 — — — 5,142,069 
Construction and land336,977 — — 895 337,872 
SBA secured by real estate56,346 673 — 591 57,610 
Total investor loans secured by real estate8,242,561 673 — 2,247 8,245,481 
Business loans secured by real estate
CRE owner-occupied2,114,484 — 250 5,054 2,119,788 
Franchise real estate secured359,329 — — — 359,329 
SBA secured by real estate83,116 — — 1,010 84,126 
Total business loans secured by real estate2,556,929 — 250 6,064 2,563,243 
Commercial loans
Commercial and industrial1,810,027 5,717 836 4,415 1,820,995 
Franchise non-real estate secured508,237 — — 7,743 515,980 
SBA not secured by real estate15,691 320 — 737 16,748 
Total commercial loans2,333,955 6,037 836 12,895 2,353,723 
Retail loans
Single family residential242,985 374 — — 243,359 
Consumer loans45,034 — — — 45,034 
Total retail loans288,019 374 — — 288,393 
Totals$13,421,464 $7,084 $1,086 $21,206 $13,450,840 
  Days Past Due 
 Current30-5960-8990+Total Gross Loans
December 31, 2019(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied$2,067,874 $1,179 $— $1,088 $2,070,141 
Multifamily1,575,726 — — — 1,575,726 
Construction and land438,786 — — — 438,786 
SBA secured by real estate68,041 — — 390 68,431 
Total investor loans secured by real estate4,150,427 1,179 — 1,478 4,153,084 
Business loans secured by real estate
CRE owner-occupied1,846,223 331 — — 1,846,554 
Franchise real estate secured353,240 — — — 353,240 
SBA secured by real estate86,946 — 589 846 88,381 
Total business loans secured by real estate2,286,409 331 589 846 2,288,175 
Commercial loans
Commercial and industrial1,389,026 422 826 2,996 1,393,270 
Franchise non-real estate secured555,215 — 9,142 — 564,357 
SBA not secured by real estate16,141 167 — 1,118 17,426 
Total commercial loans1,960,382 589 9,968 4,114 1,975,053 
Retail loans
Single family residential255,024 — — — 255,024 
Consumer loans50,967 5 2 1 50,975 
Total retail loans305,991 5 2 1 305,999 
Totals loans$8,703,209 $2,104 $10,559 $6,439 $8,722,311 
Summary of Investment in impaired loans
The following tables provide a summary of the Company’s investment in impaired loans as of the period indicated:
 Impaired Loans
 Unpaid Principal BalanceRecorded InvestmentWith Specific AllowanceWithout Specific AllowanceSpecific Allowance for Impaired Loans
 (Dollars in thousands)
December 31, 2019     
Investor loans secured by real estate
CRE non-owner-occupied$1,184 $1,088 $— $1,088 $— 
SBA secured by real estate772 390 — 390 — 
Business loans secured by real estate
SBA secured by real estate1,743 1,517 — 1,517 — 
Commercial loans
Commercial and industrial7,755 7,529 — 7,529 — 
Franchise non-real estate secured10,835 10,834 — 10,834 — 
SBA non-real estate secured1,555 1,118 — 1,118 — 
Retail loans
Single family residential412 366 — 366 — 
Totals$24,256 $22,842 $— $22,842 $— 
The following table presents information on impaired loans and leases, disaggregated by loan segment, for the periods indicated:
Impaired Loans
September 30, 2019
Three Months EndedNine Months Ended
Average Recorded Investment
Interest Income Recognized (1)
Average Recorded Investment
Interest Income Recognized (1)
(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied$421 $— $194 $— 
Construction and land320 — 160 — 
SBA secured by real estate406 — 1,196 — 
Business loans secured by real estate
CRE owner-occupied845 — 662 — 
Franchise real estate secured— — 2,516 — 
SBA secured by real estate969 — 692 — 
Commercial loans
Commercial and industrial10,170 104 9,925 303 
Franchise non-real estate secured679 — 385 — 
SBA non-real estate secured1,113 — 1,081 — 
Retail loans
Single family residential373 — 383 — 
Consumer loans— — 25 — 
Totals$15,296 $104 $17,219 $303 
______________________________
(1) Interest income recognized represents interest on accruing loans.
Schedule of acquired loans classified as PCD
The following table reconciles the par value, or initial amortized cost, of PCD loans acquired in the Opus acquisition as of the date of the acquisition with the purchase price (or initial fair value of the loans):

June 1, 2020
Investor Loans Secured by Real EstateBusiness Loans Secured by Real EstateCommercial LoansRetail LoansTotal
(Dollars in thousands)
Par value (unpaid principal balance)$704,441 $105,578 $80,184 $6,280 $896,483 
Allowance for credit losses (1)
(13,786)(4,083)(25,635)(381)(43,885)
(Discount) premium related to factors other than credit(8,696)(2,512)138 (294)(11,364)
Purchase price (initial fair value)$681,959 $98,983 $54,687 $5,605 $841,234 
______________________________
(1) The initial gross ACL determined for PCD loans was $43.9 million as of the acquisition date. Of this amount, approximately $22.7 million relates to net uncollectable balances such as loans that were fully or partially charged off prior to acquisition. Therefore, the net impact to the ACL related to PCD loans was an increase of $21.2 million.
Summary of nonaccrual loans
The following tables provide a summary of nonaccrual loans as of the date indicated:
Nonaccrual Loans (1)
Collateral Dependent LoansACLNon-Collateral Dependent LoansACL
Total Nonaccrual Loans (2)
Nonaccrual Loans with No ACL
September 30, 2020(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied$2,838 $— $— $— $2,838 $2,838 
Construction and land895 — — — 895 895 
SBA secured by real estate1,264 — — — 1,264 1,264 
Total investor loans secured by real estate4,997 — — — 4,997 4,997 
Business loans secured by real estate
CRE owner-occupied6,105 — — — 6,105 6,105 
SBA secured by real estate1,084 — — — 1,084 1,084 
Total business loans secured by real estate7,189 — — — 7,189 7,189 
Commercial loans
Commercial and industrial4,309 557 1,790 266 6,099 2,809 
Franchise non-real estate secured— — 7,742 1,165 7,742 — 
SBA non-real estate secured737 — — — 737 737 
Total commercial loans5,046 557 9,532 1,431 14,578 3,546 
Retail loans
Single family residential450 — — — 450 450 
Total retail loans450 — — — 450 450 
Totals nonaccrual loans$17,682 $557 $9,532 $1,431 $27,214 $16,182 
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(1) The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent. The ACL for collateral dependent loans is determined based on the estimated fair value of the underlying collateral.
(2) No interest income was recognized on nonaccrual loans during the three and nine months ended September 30, 2020.
Schedule of collateral dependent loans by collateral type
The following table summarizes collateral dependent loans by collateral type as of September 30, 2020:
September 30, 2020
Office PropertiesIndustrial PropertiesRetail PropertiesLand PropertiesHotel PropertiesResidential PropertiesBusiness AssetsTotal
(Dollars in thousands)
Investor loan secured by real estate
CRE non-owner-occupied$— $— $2,636 $— $202 $— $— $2,838 
Construction and land— — — — — 895 — 895 
SBA secured by real estate— — — — 1,264 — — 1,264 
Total investor loans secured by real estate— — 2,636 — 1,466 895 — 4,997 
Business loans secured by real estate
CRE owner-occupied— 801 — 5,304 — — — 6,105 
SBA secured by real estate304 758 — — — 22 — 1,084 
Total business loans secured by real estate304 1,559 — 5,304 — 22 — 7,189 
Commercial loans
Commercial and industrial— — — — — — 4,309 4,309 
SBA non-real estate secured— — — — — — 737 737 
Total commercial loans— — — — — — 5,046 5,046 
Retail loans
Single family residential— — — — — 450 — 450 
Total retail loans— — — — — 450 — 450 
Totals collateral dependent loans$304 $1,559 $2,636 $5,304 $1,466 $1,367 $5,046 $17,682