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Allowance for Credit Losses
 9 Months Ended
Sep. 30, 2021
Provision for Loan and Lease Losses [Abstract]  
Allowance for Credit Losses Allowance for Credit Losses
 
The Company determines the ACL for loans and unfunded loan commitments in accordance with ASC 326 - Financial Instruments - Credit Losses. 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 lifetime expected credit losses, given the facts and circumstances associated with a particular loan or group of loans with similar risk characteristics. Determining the ACL 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 an originated 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 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 a loan. The Company uses economic scenarios from an independent third party, Moody’s Analytics. 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 September 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 a weighting 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 at September 30, 2021 and the weighting assigned to each scenario is consistent with the approach used in the Company’s ACL model at June 30, 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 September 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:

•U.S. unemployment declines to approximately 4.5% by the end of 2021. Unemployment continues to decline in 2022 to approximately 3.4% by the end of 2022. The rate of unemployment holds relatively constant at approximately 3.5% throughout 2023.
•U.S. real GDP experiences annualized growth of approximately 7% through the remainder of 2021. Growth in real GDP for 2022 under this scenario decelerates from an annualized rate of approximately 5% in early 2022 to approximately 1% by the end of 2022. Annualized real GDP growth of approximately 2-3% in 2023.
•CRE index experiences a slight decline throughout the remainder of 2021, with an annualized rate of decline of approximately -2% for 2021. The CRE 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 11% by the end of 2022. The CRE index is anticipated to increase approximately 7-9% on an annualized basis in 2023.

Upside Scenario:

•U.S. unemployment declines to approximately 4.3% by the end of 2021. The unemployment rates holds at approximately 3% throughout all of 2022 and 2023.
•U.S. real GDP experiences annualized growth of approximately 11% through the remainder of 2021. Growth in real GDP throughout 2022 decelerates from an annualized rate of approximately 7% in early 2022 to approximately 1% by the end of 2022. Annualized real GDP growth of approximately 1-2% in 2023.
•CRE index remains relatively unchanged throughout the remainder of 2021. The CRE index returns growth in 2022, with the annualized rate of growth increasing from 5% in early 2022 to 14% by the end of 2022. The CRE index is anticipated to experience a decelerating annualized rate of growth from approximately 10% in early 2023 to approximately 7% by the end of 2023.
Downside Scenario:

•U.S. unemployment increases to approximately 6.7% by the end of 2021. Unemployment remains elevated in 2022 at approximately 8-9%. Unemployment declines throughout 2023 to approximately 6.8% at the end of 2023.
•U.S. real GDP experiences a decline of approximately -3.5% for the remainder of 2021. Real GDP returns to modest annualized growth in the third quarter of 2022, with growth of approximately 1% for the remainder of 2022. Annualized real GDP fluctuates within a range of approximately 2-4% throughout 2023.
•CRE index experiences an annualized rate of decline throughout the remainder 2021 of approximately -5%. The CRE index is estimated to experience decelerating declines throughout 2022, with the annualized rate of decline slowing from approximately -16% in early 2022 to approximately -11% by the end of 2022. Under this scenario, the CRE index is anticipated to experience accelerating annualized growth throughout 2023 to approximately 18% by 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 September 30, 2021, qualitative adjustments included in the ACL totaled $6.5 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, construction, franchise, and CRE owner-occupied 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 September 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$47,112 $— $— $(4,645)$42,467 
Multifamily59,059 — — (6,895)52,164 
Construction and land9,548 — — (1,531)8,017 
SBA secured by real estate4,681 (158)— (644)3,879 
Business loans secured by real estate
CRE owner-occupied35,747 — 14 (2,082)33,679 
Franchise real estate secured11,436 — — (1,810)9,626 
SBA secured by real estate6,317 — 50 (1,263)5,104 
Commercial loans
Commercial and industrial39,879 (84)729 (2,929)37,595 
Franchise non-real estate secured17,313 (2,398)80 2,523 17,518 
SBA non-real estate secured730 — 15 (113)632 
Retail loans
Single family residential670 — 2 (143)529 
Consumer loans282 — — (11)271 
Totals$232,774 $(2,640)$890 $(19,543)$211,481 

Nine Months Ended September 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$49,176 $(154)$— $(6,555)$42,467 
Multifamily62,534 — — (10,370)52,164 
Construction and land12,435 — — (4,418)8,017 
SBA secured by real estate5,159 (423)— (857)3,879 
Business loans secured by real estate
CRE owner-occupied50,517 — 44 (16,882)33,679 
Franchise real estate secured11,451 — — (1,825)9,626 
SBA secured by real estate6,567 (98)130 (1,495)5,104 
Commercial loans
Commercial and industrial46,964 (4,653)3,428 (8,144)37,595 
Franchise non-real estate secured20,525 (2,554)80 (533)17,518 
SBA non-real estate secured995 — 19 (382)632 
Retail loans
Single family residential1,204 — 3 (678)529 
Consumer loans491 — — (220)271 
Totals$268,018 $(7,882)$3,704 $(52,359)$211,481 
Three Months Ended September 30, 2020
(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$63,007 $(443)$— $(8,459)$54,105 
Multifamily63,511 — — 3,825 67,336 
Construction and land18,804 (377)— (2,870)15,557 
SBA secured by real estate2,010 (145)34 3,428 5,327 
Business loans secured by real estate
CRE owner-occupied48,213 (1,739)21 2,171 48,666 
Franchise real estate secured13,060 — — (1,072)11,988 
SBA secured by real estate4,368 — 76 1,716 6,160 
Commercial loans
Commercial and industrial41,967 (2,437)10 8,374 47,914 
Franchise non-real estate secured21,676 (207)865 (2,185)20,149 
SBA non-real estate secured600 (10)8 353 951 
Retail loans
Single family residential1,479 — 2 (238)1,243 
Consumer loans3,576 (129)1 (341)3,107 
Totals$282,271 $(5,487)$1,017 $4,702 $282,503 



Nine Months Ended September 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 $(830)$— $41,588 $54,105 
Multifamily729 9,174 8,710 — — 48,723 67,336 
Construction and land4,484 (124)2,051 (377)— 9,523 15,557 
SBA secured by real estate1,915 (1,401)— (699)34 5,478 5,327 
Business loans secured by real estate
CRE owner-occupied2,781 20,166 3,766 (1,739)44 23,648 48,666 
Franchise real estate secured592 5,199 — — — 6,197 11,988 
SBA secured by real estate2,119 2,207 235 (315)147 1,767 6,160 
Commercial loans
Commercial and industrial13,857 87 2,325 (5,213)37 36,821 47,914 
Franchise non-real estate secured5,816 9,214 — (1,434)865 5,688 20,149 
SBA non-real estate secured445 218 924 (803)13 154 951 
Retail loans
Single family residential655 541 206 (62)3 (100)1,243 
Consumer loans406 1,982 — (137)2 854 3,107 
Totals$35,698 $55,686 $21,242 $(11,609)$1,145 $180,341 $282,503 
______________________________
(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 September 30, 2021 of $21.3 million was comprised of a $19.5 million provision recapture and $1.8 million in net charge-offs. The provision recapture for the three months ended September 30, 2021 was reflective of improving economic forecasts employed in the Company’s ACL model relative to prior periods and the favorable 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 nine months ended September 30, 2021 of $56.5 million was comprised of a $52.4 million provision recapture and $4.2 million in net charge-offs. The provision recapture for the nine months ended September 30, 2021 was also reflective of improving economic forecasts employed in the Company’s ACL model and the favorable asset quality profile of the loan portfolio, partially offset by an increase in loans held for investment during the first nine months of 2021.

The increase in the ACL for the three months ended September 30, 2020 of $232,000 was comprised of a $4.7 million provision for credit losses and $4.5 million in net charge-offs. The provision for credit losses for the three months ended September 30, 2020 was reflective of unfavorable, but improving economic forecasts used in the Company’s ACL model. The increase in the ACL for the nine months ended September 30, 2020 of $246.8 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 $180.3 million provision for credit losses on loans, net charge-offs of $10.5 million, and the establishment of $21.2 million in net ACL for PCD loans previously mentioned. The provision for credit losses of $180.3 million during the nine months ended September 30, 2020 was inclusive of $75.9 million related to the initial ACL required for the acquisition of non-PCD loans in the Opus acquisition. Under ASC 326, the Company is required to record an ACL for estimates of life-time credit losses on loans at the time of acquisition. For non-PCD loans, the initial ACL is established through a charge to provision for credit losses at the time of acquisition. However, the ACL for PCD loans is established through an adjustment to the loan’s purchase price (or initial fair value). Excluding the impact of the Opus acquisition, the provision for credit losses for the nine months ended September 30, 2020 is also reflective of unfavorable economic forecasts used in the Company’s ACL model driven by the COVID-19 pandemic.

Allowance for Credit Losses for Off-Balance Sheet Commitments

The Company maintains an ACL 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 $27.2 million at September 30, 2021, $27.4 million at June 30, 2021, and $31.1 million at December 31, 2020. The provision recapture for off-balance sheet commitments of $194,000 and $3.9 million during the three and nine months ended September 30, 2021, respectively, was related primarily to improving economic conditions and forecasts reflected in the Company’s ACL model.

The Company recorded a provision recapture for off-balance sheet commitments of $492,000 and a provision for credit losses of $10.0 million for the three and nine months ended September 30, 2020, respectively. The provision recapture for off-balance sheet commitments for the three months ended September 30, 2020 can be attributed to lower outstanding unfunded balances in certain loan segments where a higher reserve allocation had been assigned. The provision for credit losses on off-balance sheet commitments for the nine months ended September 30, 2020 can be attributed to an $8.6 million provision for credit losses in the second quarter of 2020 related to the initial ACL for off-balance sheet loan commitments that the Company was required to establish at the time of acquisition of Opus, and a $1.4 million in provision for credit losses for the first nine months of 2020 related primarily to the deterioration in economic forecasts, primarily in the second quarter of 2020, used in the Company’s CECL 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
September 30, 2021
Investor loans secured by real estate
CRE non-owner-occupied
0% - 5.00%$530,275 $239,267 $392,557 $421,922 $198,651 $722,951 $4,270 $— $2,509,893 
>5.00% - 10.00%35,330 24,645 23,757 9,755 11,088 53,696 5,329 — 163,600 
Greater than 10%— 4,821 50,121 32,661 9,933 51,511 525 — 149,572 
Multifamily
0% - 5.00%1,660,670 962,609 1,316,575 520,329 500,815 609,731 218 — 5,570,947 
>5.00% - 10.00%28,718 49,737 31,988 6,958 1,590 8,314 — — 127,305 
Greater than 10%5,059 — — — — 2,355 — — 7,414 
Construction and Land
0% - 5.00%56,187 82,557 2,329 991 3,996 3,607 48 — 149,715 
>5.00% - 10.00%21,654 11,027 1,700 — — — — — 34,381 
Greater than 10%8,266 31,606 47,704 21,143 — — — — 108,719 
SBA secured by real estate
0% - 5.00%130 499 7,373 12,428 15,206 12,834 — — 48,470 
>5.00% - 10.00%— — — — — — — — — 
Greater than 10%— — 9 — 629 338 — — 976 
Total investor loans secured by real estate2,346,289 1,406,768 1,874,113 1,026,187 741,908 1,465,337 10,390 — 8,870,992 
Business loans secured by real estate
CRE owner-occupied
0% - 5.00%635,469 302,683 315,267 215,974 201,190 499,308 3,211 300 2,173,402 
>5.00% - 10.00%— — 7,846 7,573 6,733 31,811 — — 53,963 
Greater than 10%— — — 6,109 2,972 5,718 — — 14,799 
Franchise real estate secured
0% - 5.00%95,937 43,332 55,621 39,053 61,591 37,696 — — 333,230 
>5.00% - 10.00%812 — 4,151 5,253 5,310 4,590 — — 20,116 
Greater than 10%1,135 — — — — — — — 1,135 
SBA secured by real estate
0% - 5.00%3,789 2,368 6,237 9,605 8,900 16,909 — — 47,808 
>5.00% - 10.00%— — 1,296 893 2,318 8,273 — — 12,780 
Greater than 10%— — — 1,326 3,012 3,650 1,361 — 9,349 
Total business loans secured by real estate737,142 348,383 390,418 285,786 292,026 607,955 4,572 300 2,666,582 
Commercial Real Estate and Commercial Term Loans by PD and Vintage
(Dollars in thousands)20212020201920182017PriorRevolvingRevolving Converted to Term During the PeriodTotal
September 30, 2021
Commercial loans
Commercial and industrial
0% - 5.00%253,639 87,252 196,671 118,678 128,879 69,707 764,279 2,055 1,621,160 
>5.00% - 10.00%6,720 2,293 8,012 20,835 27,760 8,438 140,001 4 214,063 
Greater than 10%650 1,759 741 2,901 1,143 2,376 43,337 740 53,647 
Franchise non-real estate secured
0% - 5.00%108,905 19,246 63,233 59,636 22,735 15,697 — — 289,452 
>5.00% - 10.00%9,159 5,708 33,550 5,594 3,483 18,536 — — 76,030 
Greater than 10%269 — 2,237 4,491 16,368 4,103 — — 27,468 
SBA not secured by real estate
0% - 5.00%152 653 1,215 633 1,008 2,421 — — 6,082 
>5.00% - 10.00%— — 209 305 2,231 1,137 — — 3,882 
Greater than 10%— — 776 455 247 626 664 — 2,768 
Total commercial loans$379,494 $116,911 $306,644 $213,528 $203,854 $123,041 $948,281 $2,799 $2,294,552 

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
September 30, 2021
Investor loans secured by real estate
CRE non-owner-occupied
55% and below$291,909 $142,444 $188,747 $208,825 $127,768 $589,484 $9,599 — $1,558,776 
>55-65%220,116 89,488 193,461 104,301 79,960 204,683 525 — 892,534 
>65-75%53,580 36,801 64,165 146,402 8,118 32,513 — — 341,579 
Greater than 75%— — 20,062 4,810 3,826 1,478 — — 30,176 
Multifamily
55% and below260,469 219,510 314,269 211,795 207,913 299,265 218 — 1,513,439 
>55-65%719,640 421,994 580,084 229,609 158,927 226,977 — — 2,337,231 
>65-75%703,894 367,815 442,661 85,883 133,716 85,918 — — 1,819,887 
Greater than 75%10,444 3,027 11,549 — 1,849 8,240 — — 35,109 
Construction and land
55% and below82,458 120,912 42,774 4,183 3,996 3,607 48 — 257,978 
>55-65%— 4,278 6,630 17,951 — — — — 28,859 
>65-75%3,649 — 2,329 — — — — — 5,978 
Greater than 75%— — — — — — — — — 
SBA secured by real estate
55% and below— — 9 637 695 2,177 — — 3,518 
>55-65%— — 2,407 1,958 1,910 2,853 — — 9,128 
>65-75%130 — 3,870 4,606 4,461 5,544 — — 18,611 
Greater than 75%— 499 1,096 5,227 8,769 2,598 — — 18,189 
Total investor loans secured by real estate2,346,289 1,406,768 1,874,113 1,026,187 741,908 1,465,337 10,390 — 8,870,992 
Business loan secured by real estate
CRE owner-occupied
55% and below296,313 108,338 123,527 100,865 139,455 383,599 3,211 300 1,155,608 
>55-65%161,368 73,789 66,407 70,311 46,314 99,171 — — 517,360 
>65-75%126,160 87,909 123,495 52,679 16,909 37,740 — — 444,892 
Greater than 75%51,628 32,647 9,684 5,801 8,217 16,327 — — 124,304 
Franchise real estate secured
55% and below17,039 23,695 9,052 12,776 14,889 19,988 — — 97,439 
>55-65%39,872 2,622 11,055 10,137 4,804 10,129 — — 78,619 
>65-75%23,262 15,150 36,521 8,632 15,563 10,951 — — 110,079 
Greater than 75%17,711 1,865 3,144 12,761 31,645 1,218 — — 68,344 
SBA secured by real estate
55% and below2,547 591 1,897 1,127 5,146 14,667 1,361 — 27,336 
>55-65%186 556 199 1,513 1,306 7,513 — — 11,273 
>65-75%703 328 3,111 5,254 4,104 3,586 — — 17,086 
Greater than 75%353 893 2,326 3,930 3,674 3,066 — — 14,242 
Total business loans secured by real estate$737,142 $348,383 $390,418 $285,786 $292,026 $607,955 $4,572 $300 $2,666,582 
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
September 30, 2021
Retail loans
Single family residential
Greater than 740$20,201 $3,518 $1,967 $1,599 $3,319 $53,609 $17,213 — $101,426 
>680 - 740— — — 34 3,172 9,756 5,271 — 18,233 
>580 - 680— — — — 453 9,301 757 — 10,511 
Less than 580— — — — 10 14,096 33 — 14,139 
Consumer loans
Greater than 74027 30 37 22 12 2,500 1,325 — 3,953 
>680 - 7401 — 19 — 3 441 1,876 — 2,340 
>580 - 680— — 7 — — 59 49 — 115 
Less than 580— — — — — — 18 — 18 
Total retail loans$20,229 $3,548 $2,030 $1,655 $6,969 $89,762 $26,542 $— $150,735 

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