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Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2021
Provision for Loan and Lease Losses [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
 
The Company accounts for credit losses on loans and unfunded loan commitments in accordance with ASC 326 - Financial Instruments - Credit Losses, to determine the ACL. ASC 326 requires the Company to recognize estimates for lifetime credit losses on loans and unfunded loan commitments at the time of origination or acquisition. The recognition of losses at origination or acquisition represents the Company’s best estimate of the lifetime expected credit loss associated with a loan given the facts and circumstances associated with the particular loan, and involves the use of significant management judgement and estimates, which are subject to change based on management’s ongoing assessment of the credit quality of the loan portfolio and changes in economic forecasts used in the model. The Company uses a discounted cash flow model when determining estimates for the ACL for commercial real estate loans and commercial loans, which comprise the majority of the loan portfolio, and uses a historical loss rate model for retail loans. The Company also utilizes proxy loan data in its ACL model where the Company’s own historical data is not sufficiently available.

The discounted cash flow model is applied on an instrument-by-instrument basis, and for loans with similar risk characteristics, to derive estimates for the lifetime ACL for each loan. The discounted cash flow methodology relies on several significant components essential to the development of estimates for future cash flows on loans and unfunded commitments. These components consist of: (i) the estimated probability of default, (ii) the estimated loss given default, which represents the estimated severity of the loss when a loan is in default, (iii) estimates for prepayment activity on loans, and (iv) the estimated exposure to the Company at default (“EAD”). These components are also heavily influenced by changes in economic forecasts employed in the model over a reasonable and supportable period. The Company’s ACL methodology for unfunded loan commitments also includes assumptions concerning the probability an unfunded commitment will be drawn upon by the borrower. These assumptions are based on the Company’s historical experience.

The Company’s discounted cash flow ACL model for commercial real estate and commercial loans uses internally derived estimates for prepayments in determining the amount and timing of future contractual cash flows to be collected. The estimate of future cash flows also incorporates estimates for contractual amounts the Company believes may not be collected, which are based on assumptions for PD, LGD, and EAD. EAD is the estimated outstanding balance of the loan at the time of default. It is determined by the contractual payment schedule and expected payment profile of the loan, incorporating estimates for expected prepayments and future draws on revolving credit facilities. The Company discounts cash flows using the effective interest rate on the loan. The effective interest rate represents the contractual rate on the loan; adjusted for any purchase premiums, purchase discounts, and deferred fees and costs associated with the origination of the loan. The Company has made an accounting policy election to adjust the effective interest rate to take into consideration the effects of estimated prepayments. The ACL for term loans is determined by measuring the amount by which a loan’s amortized cost exceeds its discounted cash flows expected to be collected. The ACL for credit facilities is determined by discounting estimates for cash flows not expected to be collected.

Probability of Default

The PD for investor loans secured by real estate is based largely on a model provided by a third party, using proxy loan information. The PDs generated by this model are reflective of current and expected changes in economic conditions and conditions in the commercial real estate market, and how they are expected to impact loan level and property level attributes, and ultimately the likelihood of a default event occurring. This model also incorporates assumptions for PD at a loan’s maturity. Significant loan and property level attributes include: loan to value ratios, debt service coverage, loan size, loan vintage, and property types.
The PD for business loans secured by real estate and commercial loans is based on an internally developed PD rating scale that assigns PDs based on the Company’s internal risk grades for loans. This internally developed PD rating scale is based on a combination of the Company’s own historical data and observed historical data from the Company’s peers, which consist of banks that management believes align with our business profile. As credit risk grades change for these loans, the PD assigned to them also changes. As with investor loans secured by real estate, the PD for business loans secured by real estate and commercial loans is also impacted by current and expected economic conditions.

The Company considers loans to be in default when they are 90 days or more past due and still accruing or placed on nonaccrual status.

Loss Given Default

LGDs for commercial real estate loans are derived from a third party, using proxy loan information, and are based on loan and property level characteristics in the Company’s loan portfolio, such as: loan to values, estimated time to resolution, property size, and current and estimated future market price changes for underlying collateral. The LGD is highly dependent upon loan to value ratios, and incorporates estimates for the expense associated with managing the loan through to resolution. LGDs also incorporate an estimate for the loss severity associated with loans where the borrower fails to meet their debt obligation at maturity, such as through a balloon payment or the refinancing of the loan through another lender. External factors that have an impact on LGDs include: changes in the index for CRE pricing, GDP growth rate, unemployment rates, and the Moody’s Baa rating corporate debt interest rate spread. LGDs are applied to each loan in the commercial real estate portfolio, and in conjunction with the PD, produce estimates for net cash flows not expected to be collected over the estimated term of the loan.

LGDs for commercial loans are also derived from a third party that has a considerable database of credit related information specific to the financial services industry and the type of loans within this segment, and is used to generate annual default information for commercial loans. These proxy LGDs are dependent upon data inputs such as: credit quality, borrower industry, region, borrower size, and debt seniority. LGDs are then applied to each loan in the commercial portfolio, and in conjunction with the PD, produce estimates for net cash flows not expected to be collected over the estimated term of the loan.

Historical Loss Rates for Retail Loans
The historical loss rate model for retail loans are derived from a third party that has a considerable database of credit related information for retail loans. Key loan level attributes and economic drivers in determining the loss rate for retail loans include FICO scores, vintage, as well as geography, unemployment rates, and changes in consumer real estate prices.
Forecasts

GAAP requires the Company to develop reasonable and supportable forecasts of future conditions, and estimate how those forecasts are expected to impact a borrower’s ability to satisfy their obligation to the Bank and the ultimate collectability of future cash flows over the life of the loan. The Company uses economic scenarios from an independent third party, Moody’s Analytics, in its estimation of a borrower’s ability to repay a loan in future periods. These scenarios are based on past events, current conditions, and the likelihood of future events occurring. These scenarios typically are comprised of: (1) a base-case scenario, (2) an upside scenario, representing slightly better economic conditions than currently experienced, and (3) a downside scenario, representing recessionary conditions. Management periodically evaluates economic scenarios and may decide that a particular economic scenario or a combination of probability-weighted economic scenarios should be used in the Company’s ACL model. The economic scenarios chosen for the model, the extent to which more than one scenario is used, and the weights that are assigned to them, are based on the Company’s estimate of the probability of each scenario occurring, which is based in part on analysis performed by an independent third-party. Economic scenarios chosen, as well as the assumptions within those scenarios, and whether to use a probability-weighted multiple scenario approach, can vary from one period to the next based on changes in current and expected economic conditions, and due to the occurrence of specific events such as the ongoing COVID-19 pandemic. The Company recognizes the non-linearity of credit losses relative to economic performance and thus the Company believes consideration of, and if appropriate under the circumstances, use of multiple probability-weighted economic scenarios is appropriate in estimating credit losses over the forecast period. This approach is based on certain assumptions. The first assumption is that no single forecast of the economy, however detailed or complex, is completely accurate over a reasonable forecast time-frame, and is subject to revisions over time. By considering multiple scenario outcomes and assigning reasonable probability weightings to them, some of the uncertainty associated with a single scenario approach, the Company believes, is mitigated.

As of June 30, 2021, the Company’s ACL model used three probability-weighted scenarios representing a base-case scenario, an upside scenario, and a downside scenario. The weightings assigned to each scenario were as follows: the base-case scenario, or most likely scenario, was assigned a weighting of 40%, while the upside and downside scenarios were each assigned weightings of 30%. These economic scenarios include the current and estimated future impact associated with the ongoing COVID-19 pandemic. The Company evaluated the weightings of each economic scenario in the current period with the assistance of Moody's Analytics, and determined the current weightings of 40% for the base-case scenario, and 30% for each of the upside and downside scenarios appropriately reflect the likelihood of outcomes for each scenario given the current economic environment. The use of three probability-weighted scenarios in the second quarter of 2021 and the weighting assigned to each scenario is consistent with the approach used in the Company’s ACL model at March 31, 2021 and December 31, 2020.

The Company, with the assistance of Moody’s Analytics, currently forecasts PDs and LGDs based on economic scenarios over a two-year period, which we believe is a reasonable and supportable period. Beyond this point, PDs and LGDs revert to their long-term averages. The Company has reflected this reversion over a period of three years in each of its economic scenarios used to generate the overall probability-weighted forecast. Changes in economic forecasts impact the PD, LGD, and EAD for each loan, and therefore influence the amount of future cash flows for each loan the Company does not expect to collect.

The Company derives the economic forecasts it uses in its ACL model from Moody's Analytics that has a large team of economists, database managers, and operational engineers with a long history of producing monthly economic forecasts. The forecasts produced by this third-party have been widely used by banks, credit unions, government agencies, and real estate developers. These economic forecasts cover all states and metropolitan areas in the Unites States, and reflect changes in economic variables such as: GDP growth, interest rates, employment rates, changes in wages, retail sales, industrial production, metrics associated with the single-family and multifamily housing markets, vacancy rates, changes in equity market prices, and energy markets.
It is important to note that the Company’s ACL model relies on multiple economic variables, which are used under several economic scenarios. Although no one economic variable can fully demonstrate the sensitivity of the ACL calculation to changes in the economic variables used in the model, the Company has identified certain economic variables that have significant influence in the Company’s model for determining the ACL.

As of June 30, 2021, the Company’s ACL model incorporated the following assumptions for key economic variables in the base-case, upside, and downside scenarios:

Base-case Scenario:

•CRE price index experiences a slowing annualized rate of decline throughout 2021 from approximately -13% in early 2021 to approximately -4% by the end of 2021. This scenario assumes the index returns to growth in 2022 and 2023. This scenario also assumes the CRE price index returns to moderate levels of growth beginning in the first quarter of 2022, with the annualized rate of growth increasing from 2% in early 2022 to 10% by the end of 2022. Under this scenario, the CRE price index is anticipated to increase approximately 8-9% on an annualized basis in 2023.
•U.S. real GDP experiences growth within a range of 6-7% on an annualized basis throughout 2021. This scenario also assumes decelerating growth in real GDP throughout 2022, from the levels estimated for 2021. Growth in real GDP for 2022 under this scenario decelerates from approximately 5% annualized in early 2022 to approximately 2% annualized by the end of 2022. This scenario assumes real GDP growth increases to approximately 2-3% in 2023.
•U.S. unemployment declining from approximately 6% in early 2021 to approximately 4.5% by the end of 2021. This scenario also assumes unemployment continues to decline in 2022 from approximately 4% in early 2022 to approximately 3.5% by the end of 2022. This scenario assumes the rate of unemployment holds constant at approximately 3.5% throughout 2023.

Upside Scenario:

•CRE price index experiences declines throughout 2021, with the estimated annualized rate of decline slowing from approximately -13% in early 2021 to approximately -1% by the end of 2021. This scenario also assumes the CRE price index returns growth in 2022, with the annualized rate of growth increasing from 7% in early 2022 to 12% by the end of 2022. Under this scenario, the CRE price index is anticipated to experience a decelerating annualized rate of increase from approximately 9% in early 2023 to approximately 7% by the end of 2023.
•U.S. real GDP experiences accelerating growth within a range of 6-10% on an annualized basis throughout 2021. This scenario also assumes decelerating growth in real GDP throughout 2022, from the levels estimated for 2021. Growth in real GDP for 2022 under this scenario decelerates from approximately 8% annualized in early 2022 to approximately 0% annualized by the end of 2022. This scenario assumes real GDP growth increases to approximately 1-2% in 2023.
•U.S. unemployment declining from approximately 6.2% in early 2021 to approximately 4.0% by the end of 2021. This scenario also assumes unemployment of approximately 3% throughout all of 2022. This scenario assumes the rate of unemployment holds constant at approximately 3% throughout 2023.
Downside Scenario:

•CRE price index experiences accelerating annualized rates of decline throughout 2021. Annualized declines of approximately -13% in early 2021 and accelerating to approximately -20% by the end of 2021. The CRE price index is estimated to experience decelerating declines throughout 2022, with the annualized rate of decline slowing from approximately -24% in early 2022 to approximately -2% by the end of 2022. Under this scenario, the CRE price index is anticipated to experience accelerating annualized growth of approximately 7% in early 2023 to approximately 20% by the end of 2023.
•U.S. real GDP experiences growth of approximately 6% to 10% in the first half of 2021, followed by a decrease of -3% for the remainder of 2021. This scenario also assumes a return to modest annualized growth in real GDP by the second quarter of 2022, with growth of approximately 2-3% for the remainder of 2022. This scenario assumes real GDP fluctuates within a range of approximately 2-4% throughout 2023.
•U.S. unemployment increases throughout 2021 from approximately 6% in early 2021 to approximately 8% by the end of 2021. This scenario also assumes unemployment remains elevated in 2022 at approximately 9%. This scenario assumes a decline in unemployment throughout 2023, from approximately 8% in early 2023 to approximately 7% at the end of 2023.

Qualitative Adjustments

The Company recognizes that historical information used as the basis for determining future expected credit losses may not always, by themselves, provide a sufficient basis for determining future expected credit losses. The Company, therefore, periodically considers the need for qualitative adjustments to the ACL. Qualitative adjustments may be related to and include, but not be limited to, factors such as: (i) management’s assessment of economic forecasts used in the model and how those forecasts align with management’s overall evaluation of current and expected economic conditions, (ii) organization specific risks such as credit concentrations, collateral specific risks, regulatory risks, and external factors that may ultimately impact credit quality, (iii) potential model limitations such as limitations identified through back-testing, and other limitations associated with factors such as underwriting changes, acquisition of new portfolios and changes in portfolio segmentation, and (iv) management’s overall assessment of the adequacy of the ACL, including an assessment of model data inputs used to determine the ACL. As of June 30, 2021, qualitative adjustments included in the ACL totaled $8.0 million. These adjustments primarily relate to continued uncertainty concerning the strength of the economic recovery and how it may impact certain classes of loans in the loan portfolio. Management determined through additional review that the uneven recovery and continued government interventions, are potentially underestimating the impact the ongoing COVID-19 pandemic may have on certain segments and classes of the loan portfolio, such as loans within the SBA, franchise, C&I, and construction classifications. Management reviews the need for an appropriate level of qualitative adjustments on a quarterly basis, and as such, the amount and allocation of qualitative adjustments may change in future periods.
The following tables provides the allocation of the ACL for loans held for investment as well as the activity in the ACL attributed to various segments in the loan portfolio as of, and for the periods indicated:

Three Months Ended June 30, 2021
(Dollars in thousands) Beginning ACL Balance  Charge-offs  Recoveries Provision for Credit Losses  Ending
ACL Balance
Investor loans secured by real estate
CRE non-owner occupied$45,545 $— $— $1,567 $47,112 
Multifamily79,815 — — (20,756)59,059 
Construction and land13,263 — — (3,715)9,548 
SBA secured by real estate5,141 — — (460)4,681 
Business loans secured by real estate
CRE owner-occupied41,594 — 15 (5,862)35,747 
Franchise real estate secured10,876 — — 560 11,436 
SBA secured by real estate6,451 — 80 (214)6,317 
Commercial loans
Commercial and industrial43,373 (3,290)2,098 (2,302)39,879 
Franchise non-real estate secured18,903 — — (1,590)17,313 
SBA non-real estate secured890 — 2 (162)730 
Retail loans
Single family residential822 — 1 (153)670 
Consumer loans326 — — (44)282 
Totals$266,999 $(3,290)$2,196 $(33,131)$232,774 



Six Months Ended June 30, 2021
(Dollars in thousands)Beginning ACL BalanceCharge-offsRecoveriesProvision for Credit LossesEnding
ACL Balance
Investor loans secured by real estate
CRE non-owner occupied$49,176 $(154)$— $(1,910)$47,112 
Multifamily62,534 — — (3,475)59,059 
Construction and land12,435 — — (2,887)9,548 
SBA secured by real estate5,159 (265)— (213)4,681 
Business loans secured by real estate
CRE owner-occupied50,517 — 30 (14,800)35,747 
Franchise real estate secured11,451 — — (15)11,436 
SBA secured by real estate6,567 (98)80 (232)6,317 
Commercial loans
Commercial and industrial46,964 (4,569)2,699 (5,215)39,879 
Franchise non-real estate secured20,525 (156)— (3,056)17,313 
SBA non-real estate secured995 — 4 (269)730 
Retail loans
Single family residential1,204 — 1 (535)670 
Consumer loans491 — — (209)282 
Totals$268,018 $(5,242)$2,814 $(32,816)$232,774 
Three Months Ended June 30, 2020
(Dollars in thousands) Beginning ACL Balance  Initial ACL Recorded for PCD Loans  Charge-offs  Recoveries Provision for Credit Losses  Ending
ACL Balance
Investor loans secured by real estate
CRE non-owner occupied$15,896 $3,025 $— $— $44,086 $63,007 
Multifamily14,722 8,710 — — 40,079 63,511 
Construction and land9,222 2,051 — — 7,531 18,804 
SBA secured by real estate935 — (554)— 1,629 2,010 
Business loans secured by real estate
CRE owner-occupied26,793 3,766 — 11 17,643 48,213 
Franchise real estate secured7,503 — — — 5,557 13,060 
SBA secured by real estate4,044 235 — 3 86 4,368 
Commercial loans
Commercial and industrial15,742 2,325 (2,286)21 26,165 41,967 
Franchise non-real estate secured16,616 — (1,227)— 6,287 21,676 
SBA non-real estate secured516 924 (556)(2)(282)600 
Retail loans
Single family residential1,137 206 (62)1 197 1,479 
Consumer loans2,296 — — 1 1,279 3,576 
Totals$115,422 $21,242 $(4,685)$35 $150,257 $282,271 



Six Months Ended June 30, 2020
(Dollars in thousands)
 Beginning ACL Balance (1)
 Adoption of ASC 326  Initial ACL Recorded for PCD Loans  Charge-offs  Recoveries Provision for Credit Losses  Ending
ACL Balance
Investor loans secured by real estate
CRE non-owner occupied$1,899 $8,423 $3,025 $(387)$— $50,047 $63,007 
Multifamily729 9,174 8,710 — — 44,898 63,511 
Construction and land4,484 (124)2,051 — — 12,393 18,804 
SBA secured by real estate1,915 (1,401)— (554)— 2,050 2,010 
Business loans secured by real estate
CRE owner-occupied2,781 20,166 3,766 — 23 21,477 48,213 
Franchise real estate secured592 5,199 — — — 7,269 13,060 
SBA secured by real estate2,119 2,207 235 (315)74 48 4,368 
Commercial loans
Commercial and industrial13,857 87 2,325 (2,776)26 28,448 41,967 
Franchise non-real estate secured5,816 9,214 — (1,227)— 7,873 21,676 
SBA non-real estate secured445 218 924 (792)2 (197)600 
Retail loans
Single family residential655 541 206 (62)1 138 1,479 
Consumer loans406 1,982 — (8)1 1,195 3,576 
Totals$35,698 $55,686 $21,242 $(6,121)$127 $175,639 $282,271 
______________________________
(1) Beginning ACL balance represents the ALLL accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date.
The decrease in the ACL for loans held for investment during the three months ended June 30, 2021 of $34.2 million was comprised of a $33.1 million provision for credit loss recapture and $1.1 million in net charge-offs. The provision recapture for the three months ended June 30, 2021 was reflective of improving economic forecasts employed in the Company’s ACL model relative to prior periods and the continued strong asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment during the quarter. The decrease in the ACL for the six months ended June 30, 2021 of $35.2 million was comprised of a $32.8 million provision for credit loss recapture and $2.4 million in net charge-offs. The provision recapture for the six months ended June 30, 2021 was also reflective of improving economic forecasts employed in the Company’s ACL model and the continued strong asset quality profile of the loan portfolio.

The increase in the ACL for the three months ended June 30, 2020 of $166.8 million was comprised of a $150.3 million provision for credit losses, $4.7 million in net charge-offs, and the establishment of $21.2 million in net ACL for PCD loans acquired in the Opus acquisition. The ACL established for PCD loans was reflected as an adjustment to the acquired balance of the loans in accordance with ASC 326. The increase in the ACL for the six months ended June 30, 2020 of $246.6 million was reflective of a $55.7 million addition associated with the Company’s adoption of ASC 326 on January 1, 2020, which was recorded through a cumulative effect adjustment to retained earnings, as well as a $175.6 million provision for credit losses, net charge-offs of $6.0 million, and the establishment of $21.2 million in net ACL for PCD loans previously mentioned. The provision for credit losses for the three and six months ended June 30, 2020 includes $75.9 million related to the initial ACL for non-PCD loans acquired in the Opus acquisition, as required by ASC 326. The provision for credit losses for the three and six months ended June 30, 2020 was also reflective of unfavorable changes in economic forecasts used in the Company’s ACL model, which was driven by the COVID-19 pandemic.

Allowance for Credit Losses for Off-Balance Sheet Commitments

The Company maintains an allowance for credit losses on off-balance sheet commitments related to unfunded loans and lines of credit, which is included in other liabilities of the consolidated statements of financial condition. The allowance for off-balance sheet commitments was $27.4 million at June 30, 2021, $32.8 million at March 31, 2021, and $31.1 million at December 31, 2020. The reversal of provision for credit losses of $5.4 million and $3.7 million during the three and six months ended June 30, 2021, respectively, was related primarily to improving economic conditions and forecasts reflected in the Company’s ACL model.

The allowance for off-balance sheet commitments totaled $22.0 million as of June 30, 2020. The total provision for credit losses for off-balance sheet commitments was $10.4 million and $10.5 million for the three and six months ended June 30, 2020, respectively. The provision for credit losses for the three and six months ended June 30, 2020 can be attributed to an $8.6 million provision for credit losses in the second quarter of 2020 related to the assumption of off-balance sheet loan commitments in the Opus acquisition, as required by ASC 326, and a $1.9 million provision for credit losses for the first six months of 2020 related primarily to the deterioration in economic forecasts used in the Company’s ACL model.

The Company applies an expected credit loss estimation methodology for off-balance sheet commitments that is largely commensurate with the methodology applied to each respective segment of the loan portfolio in determining the ACL for loans held-for-investment. The loss estimation process includes assumptions for utilization at default. These assumptions are based on the Company’s own historical internal loan data.
The following tables present PD bands for commercial real estate and commercial loan segments of the loan portfolio as of the dates indicated.

Commercial Real Estate and Commercial Term Loans by PD and Vintage
(Dollars in thousands)20212020201920182017PriorRevolvingRevolving Converted to Term During the PeriodTotal
June 30, 2021
Investor loans secured by real estate
CRE non-owner-occupied
0% - 5.00%$301,013 $239,654 $425,062 $440,854 $210,727 $884,807 $4,652 $— $2,506,769 
>5.00% - 10.00%— 23,774 25,621 17,921 20,269 47,036 5,328 — 139,949 
Greater than 10%— 4,218 68,748 33,118 41,911 14,983 537 — 163,515 
Multifamily
0% - 5.00%1,004,852 934,432 1,478,289 684,846 558,666 713,963 1,643 — 5,376,691 
>5.00% - 10.00%22,931 49,688 27,569 15,354 — 7,226 — — 122,768 
Greater than 10%— — 10,739 9,687 12,419 7,160 — — 40,005 
Construction and Land
0% - 5.00%17,062 78,153 21,725 370 8,321 4,651 — — 130,282 
>5.00% - 10.00%18,948 16,774 7,211 — — — — — 42,933 
Greater than 10%730 2,862 64,249 34,964 444 21,264 — — 124,513 
SBA secured by real estate
0% - 5.00%— 500 8,460 12,477 17,432 13,694 — — 52,563 
>5.00% - 10.00%— — — — — — — — — 
Greater than 10%— — 102 — — 338 — — 440 
Total investor loans secured by real estate1,365,536 1,350,055 2,137,775 1,249,591 870,189 1,715,122 12,160 — 8,700,428 
Business loans secured by real estate
CRE owner-occupied
0% - 5.00%276,707 281,668 347,620 262,455 269,367 558,473 3,052 — 1,999,342 
>5.00% - 10.00%— — 13,628 9,092 11,854 37,540 1 — 72,115 
Greater than 10%— — — 6,151 5,874 5,818 — — 17,843 
Franchise real estate secured
0% - 5.00%59,007 36,149 71,812 50,663 78,597 43,345 — — 339,573 
>5.00% - 10.00%239 7,558 — 4,016 1,094 3,795 — — 16,702 
Greater than 10%290 1,555 — — — — — — 1,845 
SBA secured by real estate
0% - 5.00%2,502 3,423 7,492 9,903 10,132 18,318 — — 51,770 
>5.00% - 10.00%— — 70 1,495 2,532 8,972 — — 13,069 
Greater than 10%— — — 1,336 2,172 4,576 — — 8,084 
Total business loans secured by real estate338,745 330,353 440,622 345,111 381,622 680,837 3,053 — 2,520,343 
Commercial Real Estate and Commercial Term Loans by PD and Vintage
(Dollars in thousands)20212020201920182017PriorRevolvingRevolving Converted to Term During the PeriodTotal
June 30, 2021
Commercial loans
Commercial and industrial
0% - 5.00%135,825 105,221 232,476 102,539 155,592 84,339 626,121 1,852 1,443,965 
>5.00% - 10.00%22,487 6,242 10,701 18,922 33,612 7,924 162,253 — 262,141 
Greater than 10%— 4,944 1,533 18,386 564 5,518 58,093 — 89,038 
Franchise non-real estate secured
0% - 5.00%56,293 20,482 94,203 67,224 30,596 24,823 — — 293,621 
>5.00% - 10.00%599 5,840 39,085 8,783 4,910 19,921 151 — 79,289 
Greater than 10%— — 2,293 4,665 17,749 2,337 1,361 — 28,405 
SBA not secured by real estate
0% - 5.00%153 413 2,167 990 1,159 3,385 — — 8,267 
>5.00% - 10.00%— — — 479 2,398 657 — — 3,534 
Greater than 10%— — 80 345 258 739 677 — 2,099 
Total commercial loans$215,357 $143,142 $382,538 $222,333 $246,838 $149,643 $848,656 $1,852 $2,210,359 

Commercial Real Estate and Commercial Term Loans by PD and Vintage
(Dollars in thousands)20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
December 31, 2020
Investor loans secured by real estate
CRE non-owner-occupied
0% - 5.00%$261,885 $491,522 $431,791 $266,942 $254,527 $763,101 $11,114 $— $2,480,882 
>5.00% - 10.00%4,016 34,360 5,794 10,558 16,961 33,734 — — 105,423 
Greater than 10%— 25,844 11,480 10,517 10,782 29,598 559 — 88,780 
Multifamily
0% - 5.00%950,089 1,610,011 878,233 634,268 349,549 516,452 — — 4,938,602 
>5.00% - 10.00%38,892 59,500 12,181 19,751 10,917 13,606 — — 154,847 
Greater than 10%38,663 9,963 11,339 12,479 3,814 1,229 420 — 77,907 
Construction and land
0% - 5.00%55,785 40,860 4,604 11,238 — 6,412 784 — 119,683 
>5.00% - 10.00%1,123 41,046 9,197 3,601 — 260 — — 55,227 
Greater than 10%401 62,853 59,512 3,786 20,531 — — — 147,083 
SBA secured by real estate
0% - 5.00%496 10,400 12,558 14,497 7,078 10,032 — — 55,061 
>5.00% - 10.00%— — — 1,012 — — — — 1,012 
Greater than 10%— 158 589 — — 511 — — 1,258 
Total investor loans secured by real estate1,351,350 2,386,517 1,437,278 988,649 674,159 1,374,935 12,877 — 8,225,765 
Commercial Real Estate and Commercial Term Loans by PD and Vintage
(Dollars in thousands)20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
December 31, 2020
Business loans secured by real estate
CRE owner-occupied
0% - 5.00%286,745 367,269 274,512 295,809 202,282 422,614 10,393 246 1,859,870 
>5.00% - 10.00%8,769 42,310 60,222 28,421 23,875 44,855 3,875 — 212,327 
Greater than 10%— 16,096 5,376 7,459 4,263 8,409 250 — 41,853 
Franchise real estate secured
0% - 5.00%37,262 79,926 65,619 96,672 19,046 22,927 — — 321,452 
>5.00% - 10.00%7,587 1,650 3,274 327 5,627 4,093 — — 22,558 
Greater than 10%442 1,512 — — 1,968 — — — 3,922 
SBA secured by real estate
0% - 5.00%3,253 7,637 11,840 15,069 5,707 18,742 — — 62,248 
>5.00% - 10.00%— — 768 989 2,780 4,882 — — 9,419 
Greater than 10%— — 1,384 1,987 1,514 3,043 — — 7,928 
Total business loans secured by real estate344,058 516,400 422,995 446,733 267,062 529,565 14,518 246 2,541,577 
Commercial loans
Commercial and industrial
0% - 5.00%70,233 205,395 99,178 193,046 36,957 62,682 394,124 5,051 1,066,666 
>5.00% - 10.00%49,883 50,743 35,813 13,427 12,922 13,948 322,123 2,469 501,328 
Greater than 10%7,701 7,540 29,078 4,485 4,574 8,350 136,253 2,859 200,840 
Franchise non-real estate secured
0% - 5.00%21,409 145,392 88,171 38,010 21,956 23,479 — 502 338,919 
>5.00% - 10.00%6,198 15,754 5,454 8,164 18,415 3,626 — — 57,611 
Greater than 10%— 16,836 6,612 18,655 1,638 3,165 1,361 — 48,267 
SBA not secured by real estate
0% - 5.00%407 2,257 910 1,078 441 2,782 — — 7,875 
>5.00% - 10.00%— — 648 1,596 169 1,652 — 259 4,324 
Greater than 10%— 83 357 1,856 340 415 707 — 3,758 
Total commercial loans$155,831 $444,000 $266,221 $280,317 $97,412 $120,099 $854,568 $11,140 $2,229,588 
A significant driver in the ACL for loans in the investor real estate secured and business real estate secured segments is estimated loan to value (“LTV”). The following tables summarize the amortized cost of loans in these segments by current estimated LTV and by year of origination as of the dates indicated:
Term Loans by LTV and Vintage
(Dollars in thousands)20212020201920182017PriorRevolvingRevolving Converted to Term During the PeriodTotal
June 30, 2021
Investor loans secured by real estate
CRE non-owner-occupied
55% and below$174,343 $134,995 $204,770 $225,932 $137,797 $661,868 $9,980 — $1,549,685 
>55-65%84,362 107,085 208,558 105,364 122,170 243,022 537 — 871,098 
>65-75%42,308 25,566 86,042 147,915 8,567 40,446 — — 350,844 
Greater than 75%— — 20,061 12,682 4,373 1,490 — — 38,606 
Multifamily
55% and below118,036 219,481 336,820 243,793 222,718 334,898 1,643 — 1,477,389 
>55-65%466,963 391,606 673,685 329,299 191,548 265,604 — — 2,318,705 
>65-75%441,401 373,033 489,754 126,306 154,960 119,559 — — 1,705,013 
Greater than 75%1,383 — 16,338 10,489 1,859 8,288 — — 38,357 
Construction and land
55% and below36,740 97,789 73,845 17,816 8,765 25,915 — — 260,870 
>55-65%— — 11,429 9,471 — — — — 20,900 
>65-75%— — 7,911 8,047 — — — — 15,958 
Greater than 75%— — — — — — — — — 
SBA secured by real estate
55% and below— — 102 641 831 2,303 — — 3,877 
>55-65%— — 2,414 1,965 3,816 2,872 — — 11,067 
>65-75%— — 3,879 4,624 3,924 5,832 — — 18,259 
Greater than 75%— 500 2,167 5,247 8,861 3,025 — — 19,800 
Total investor loans secured by real estate1,365,536 1,350,055 2,137,775 1,249,591 870,189 1,715,122 12,160 — 8,700,428 
Business loan secured by real estate
CRE owner-occupied
55% and below142,863 90,967 145,590 120,707 160,886 409,810 3,053 — 1,073,876 
>55-65%58,545 64,476 71,835 87,271 90,387 118,717 — — 491,231 
>65-75%53,750 78,611 131,250 63,894 24,207 53,691 — — 405,403 
Greater than 75%21,549 47,614 12,573 5,826 11,615 19,613 — — 118,790 
Franchise real estate secured
55% and below8,599 23,887 9,141 17,024 15,341 22,162 — — 96,154 
>55-65%27,170 2,644 11,147 10,886 10,729 9,804 — — 72,380 
>65-75%13,812 16,857 40,716 10,181 14,597 13,947 — — 110,110 
Greater than 75%9,955 1,874 10,808 16,588 39,024 1,227 — — 79,476 
SBA secured by real estate
55% and below1,642 591 1,595 1,033 5,196 16,875 — — 26,932 
>55-65%37 1,596 511 1,733 994 7,723 — — 12,594 
>65-75%643 329 3,120 5,416 4,008 3,244 — — 16,760 
Greater than 75%180 907 2,336 4,552 4,638 4,024 — — 16,637 
Total business loans secured by real estate$338,745 $330,353 $440,622 $345,111 $381,622 $680,837 $3,053 $— $2,520,343 
Term Loans by LTV and Vintage
(Dollars in thousands)20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
December 31, 2020
Investor loans secured by real estate
CRE non-owner-occupied
55% and below$138,007 $229,272 $182,385 $136,355 $189,848 $588,230 $11,114 $— $1,475,211 
>55-65%101,434 217,210 92,015 130,024 78,470 204,161 559 — 823,873 
>65-75%26,460 102,494 169,878 18,876 13,952 29,506 — — 361,166 
Greater than 75%— 2,750 4,787 2,762 — 4,536 — — 14,835 
Multifamily
55% and below218,833 345,519 294,464 233,997 84,530 269,906 — — 1,447,249 
>55-65%381,737 731,408 381,282 215,170 152,066 189,151 420 — 2,051,234 
>65-75%427,074 583,078 215,389 215,452 127,684 66,457 — — 1,635,134 
Greater than 75%— 19,469 10,618 1,879 — 5,773 — — 37,739 
Construction and land
55% and below57,309 105,308 36,068 18,625 20,531 6,672 784 — 245,297 
>55-65%— 36,113 23,770 — — — — — 59,883 
>65-75%— 3,338 13,475 — — — — — 16,813 
Greater than 75%— — — — — — — — — 
SBA secured by real estate
55% and below— 2,066 649 673 317 778 — — 4,483 
>55-65%— 2,427 1,639 4,008 879 4,354 — — 13,307 
>65-75%— 3,897 3,882 3,482 4,519 1,884 — — 17,664 
Greater than 75%496 2,168 6,977 7,346 1,363 3,527 — — 21,877 
Total investor loans secured by real estate1,351,350 2,386,517 1,437,278 988,649 674,159 1,374,935 12,877 — 8,225,765 
Business loan secured by real estate
CRE owner-occupied
55% and below96,803 160,605 157,868 179,791 131,795 328,188 14,518 246 1,069,814 
>55-65%72,044 91,028 98,176 94,712 65,120 90,548 — — 511,628 
>65-75%71,692 152,920 79,106 43,832 31,303 31,493 — — 410,346 
Greater than 75%54,975 21,122 4,960 13,354 2,202 25,649 — — 122,262 
Franchise real estate secured
55% and below20,801 10,470 13,864 20,956 9,189 16,213 — — 91,493 
>55-65%2,689 9,955 16,001 19,102 6,855 2,333 — — 56,935 
>65-75%19,349 51,719 23,258 9,153 10,597 7,236 — — 121,312 
Greater than 75%2,452 10,944 15,770 47,788 — 1,238 — — 78,192 
SBA secured by real estate
55% and below1,825 1,626 5,332 5,495 3,615 13,582 — — 31,475 
>55-65%246 513 1,795 1,094 3,586 5,448 — — 12,682 
>65-75%264 3,142 1,515 3,968 1,586 4,043 — — 14,518 
Greater than 75%918 2,356 5,350 7,488 1,214 3,594 — — 20,920 
Total business loans secured by real estate$344,058 $516,400 $422,995 $446,733 $267,062 $529,565 $14,518 $246 $2,541,577 
The following tables present the FICO bands, at origination, for the retail segment of the loan portfolio as of the dates indicated:
Term Loans by FICO and Vintage
(Dollars in thousands)20212020201920182017PriorRevolvingRevolving Converted to Term During the PeriodTotal
June 30, 2021
Retail loans
Single family residential
Greater than 740$13,312 $6,771 $2,524 $2,236 $4,215 $64,829 $16,092 — $109,979 
>680 - 740— — — 35 4,090 11,222 5,524 — 20,871 
>580 - 680— — — — 484 9,425 837 — 10,746 
Less than 580— — — — — 15,598 34 — 15,632 
Consumer loans
Greater than 74044 39 40 18 16 2,526 1,269 — 3,952 
>680 - 740— — 20 5 3 449 1,651 — 2,128 
>580 - 680— — 10 — — 62 54 — 126 
Less than 580— — — — — 12 22 — 34 
Total retail loans$13,356 $6,810 $2,594 $2,294 $8,808 $104,123 $25,483 $— $163,468 

Term Loans by FICO and Vintage
(Dollars in thousands)20202019201820172016PriorRevolvingRevolving Converted to Term During the PeriodTotal
December 31, 2020
Retail loans
Single family residential
Greater than 740$10,794 $6,531 $12,679 $8,846 $28,222 $81,838 $19,588 — $168,498 
>680 - 740— 1,183 1,303 4,732 2,614 15,624 6,685 — 32,141 
>580 - 680— — — 461 3,132 7,473 864 — 11,930 
Less than 580— — — — — 19,970 35 — 20,005 
Consumer loans
Greater than 74052 69 31 22 1 2,609 2,198 — 4,982 
>680 - 740— 35 6 3 — 469 1,227 — 1,740 
>580 - 680— 15 — — 1 95 56 — 167 
Less than 580— — — — — 13 27 — 40 
Total retail loans$10,846 $7,833 $14,019 $14,064 $33,970 $128,091 $30,680 $— $239,503