
	December 31,
(Dollars in thousands)	2023		2022
Investor loans secured by real estate
CRE non-owner-occupied	$	2,421,772	$	2,660,321
Multifamily	5,645,310		6,112,026
Construction and land	472,544		399,034
SBA secured by real estate	36,400		42,135
Total investor loans secured by real estate	8,576,026		9,213,516
Business loans secured by real estate
CRE owner-occupied	2,191,334		2,432,163
Franchise real estate secured	304,514		378,057
SBA secured by real estate	50,741		61,368
Total business loans secured by real estate	2,546,589		2,871,588
Commercial loans
Commercial and industrial	1,790,608		2,160,948
Franchise non-real estate secured	319,721		404,791
SBA non-real estate secured	10,926		11,100
Total commercial loans	2,121,255		2,576,839
Retail loans
Single family residential	72,752		72,997
Consumer	1,949		3,284
Total retail loans	74,701		76,281
Loans held for investment before basis adjustment (1)	13,318,571		14,738,224
Basis adjustment associated with fair value hedge (2)	(29,551)		(61,926)
Loans held for investment	13,289,020		14,676,298
Allowance for credit losses for loans held for investment	(192,471)		(195,651)
Loans held for investment, net	$	13,096,549	$	14,480,647

Total unfunded loan commitments	$	1,703,470	$	2,489,203
Loans held for sale, at lower of cost or fair value	$	—	$	2,643

The Company generally retains the servicing rights of the guaranteed portion of SBA loans sold, for which the Company initially records servicing assets at fair value within its other assets category. Servicing assets are subsequently measured using the amortization method and amortized to noninterest income. At December 31, 2023 and 2022, the servicing assets totaled $1.6 million and $3.0 million, respectively, and were included in other assets on the Company’s consolidated statements of financial condition. Servicing assets are evaluated for impairment based upon the fair value of the servicing rights as compared to the carrying amount. Impairment is recognized through a valuation allowance, to the extent the fair value is less than the carrying amount. The fair value of retained servicing rights is generally evaluated at the loan level using a discounted cash flow analysis utilizing current market assumptions derived from the secondary market. Key modeling assumptions include interest rates, prepayment assumptions, discount rate, and servicing cost. At December 31, 2023, and 2022, the Company determined that no valuation allowance was necessary.

In connection with the acquisition of Opus Bank (“Opus”), the Company acquired Federal Home Loan Mortgage Corporation (“Freddie Mac”) guaranteed structured pass-through certificates, which were issued as a result of Opus’s securitization sale of $509.0 million in originated multifamily loans through a Freddie Mac-sponsored transaction in December 2016. The Company's continuing involvement includes sub-servicing responsibilities, general representations and warranties, and reimbursement obligations. Servicing responsibilities on loan sales generally include obligations to collect and remit payments of principal and interest, provide foreclosure services, manage payments of taxes and insurance premiums, and otherwise administer the underlying loans. In connection with the securitization transaction, Freddie Mac was designated as the master servicer and appointed the Company to perform sub-servicing responsibilities, which generally include the servicing responsibilities described above with the exception of the servicing of foreclosed or defaulted loans. The overall management, servicing, and resolution of defaulted loans and foreclosed loans are separately designated to the special servicer, a third-party institution that is independent of the master servicer and the Company. The master servicer has the right to terminate the Company in its role as sub-servicer and direct such responsibilities accordingly.

To the extent the ultimate resolution of defaulted loans results in contractual principal and interest payments that are deficient, the Company is obligated to reimburse Freddie Mac for such amounts, not to exceed 10% of the original principal amount of the loans comprising the securitization pool at the closing date of December 23, 2016. The liability recorded for the Company’s exposure to the reimbursement agreement with Freddie Mac was $345,000 and $334,000 as of December 31, 2023 and 2022, respectively.

Loans sold and serviced for others are not included in the accompanying consolidated statements of financial condition. The unpaid principal balances of loans and participations serviced for others were $373.8 million and $463.4 million at December 31, 2023 and 2022, respectively. Included in those totals are multifamily loans transferred through securitization with Freddie Mac of $48.0 million and $54.2 million at December 31, 2023 and 2022, respectively, and SBA participations serviced for others totaling $258.1 million and $315.3 million at December 31, 2023 and 2022, respectively.

As of December 31, 2023, the Company’s loan portfolio was primarily collateralized by various forms of real estate and business assets located principally in California. The Company’s loan portfolio contains concentrations of credit in multifamily, CRE non-owner-occupied, CRE owner-occupied, and C&I business loans. The Bank maintains policies approved by the Bank’s Board of Directors (the “Bank Board”) that address these concentrations, and diversifies its loan portfolio through loan originations, purchases, and sales to meet approved concentration levels.

Under applicable laws and regulations, the Bank may not make secured loans to one borrower in excess of 25% of the Bank’s unimpaired capital plus surplus and likewise in excess of 15% of the Bank’s unimpaired capital plus surplus for unsecured loans. These loans-to-one-borrower limitations result in a dollar limitation of $834.6 million for secured loans and $500.8 million for unsecured loans at December 31, 2023. In order to manage concentration risk, the Bank maintains a house lending limit well below these statutory maximums. At December 31, 2023, the Bank’s largest aggregate outstanding balance of loans to one borrower was $269.4 million, primarily comprised of asset-based lines of credit.

The Company’s credit quality and credit risk is managed in two distinct areas. The first is the loan origination process, wherein the Bank underwrites credit and chooses which types and levels of risk it is willing to accept. The Company maintains a credit policy which addresses many related topics, sets forth maximum tolerances for key elements of loan risk, and indicates appropriate protocols for identifying and analyzing these risk elements. The policy sets forth specific guidelines for analyzing each of the loan products the Company offers from both an individual and portfolio-wide basis. The credit policy is reviewed annually by the Bank Board. The Bank’s underwriters ensure all key risk factors are analyzed, with most underwriting including a global cash flow analysis of the prospective borrowers and guarantors.

The second area is in the ongoing oversight of the loan portfolio, where existing credit risk is measured and monitored, and where performance issues are dealt with in a timely and appropriate fashion. Credit risk is monitored and managed within the loan portfolio by the Company’s portfolio managers based on both the credit policy and a credit and portfolio review policy. This latter policy requires a program of financial data collection and analysis, thorough loan reviews, property and/or business inspections, monitoring of portfolio concentrations and trends, and consideration of current business and economic conditions. The portfolio managers also monitor asset-based lines of credit, loan covenants, and other conditions associated with the Company’s business loans as a means to help identify potential credit risk. Most individual loans, excluding the homogeneous loan portfolio, are reviewed at least annually, including the assignment or confirmation of a risk grade.

Risk grades are based on a six-grade Pass scale, along with Special Mention, Substandard, Doubtful, and Loss classifications, as such classifications are defined by the federal banking regulatory agencies. The assignment of risk grades allows the Company to, among other things, identify the risk associated with each credit in the portfolio and to provide a basis for estimating credit losses inherent in the portfolio. Risk grades are reviewed regularly with the Company’s Credit and Portfolio Review Committee, and the portfolio management and risk grading process is reviewed on an ongoing basis by both an independent loan review function and periodic internal audits, as well as by regulatory agencies during scheduled examinations.

The Bank’s portfolio managers also manage loan performance risks, collections, workouts, bankruptcies, and foreclosures. A special assets department, whose portfolio managers have professional expertise in these areas, typically handles or advises on these types of matters. Loan performance risks are mitigated by our portfolio managers acting promptly and assertively to address problem credits when they are identified. Collection efforts commence immediately upon non-payment, and the portfolio managers seek to promptly determine the appropriate steps to minimize the Company’s risk of loss. When foreclosure will maximize the Company’s recovery for a non-performing loan, the portfolio managers will take appropriate action to initiate the foreclosure process.

When a loan is graded as special mention, substandard, or doubtful, the Company obtains an updated valuation of the underlying collateral. Collateral generally consists of accounts receivable, inventory, fixed assets, real estate properties, and cash. If, through the Company’s credit risk management process, it is determined the ultimate repayment of a loan will come from the foreclosure upon and ultimate sale of the underlying collateral, the loan is deemed collateral dependent and evaluated individually to determine an appropriate ACL for the loan. The ACL for such loans is measured as the amount by which the fair value of the underlying collateral, less estimated costs to sell, is less than the amortized cost of the loan. The Company typically continues to obtain or confirm updated valuations of underlying collateral for special mention and classified loans on an annual or biennial basis in order to have the most current indication of fair value of the underlying collateral securing the loan. Additionally, once a loan is identified as collateral dependent, due to the likelihood of foreclosure, and repayment of the loan is expected to come from the eventual sale of the underlying collateral, an analysis of the underlying collateral is performed at least quarterly. Changes in the estimated fair value of the collateral are reflected in the lifetime ACL for the loan. Balances deemed to be uncollectable are promptly charged-off. However, if a loan is not considered collateral dependent and management determines that the loan no longer possesses risk characteristics similar to other loans in the loan portfolio, the loan is individually evaluated, and the associated ACL is determined through the use of a discounted cash flow analysis.


	Term Loans by Vintage
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Revolving Converted to Term During the Period		Total
December 31, 2023
Investor loans secured by real estate
CRE non-owner-occupied
Pass	$	71,452	$	482,045	$	549,828	$	192,399	$	315,139	$	795,856	$	—	$	—	$	2,406,719
Special mention	—		3,811		2,530		—		—		625		—		—		6,966
Substandard	—		412		—		—		—		7,675		—		—		8,087

Multifamily
Pass	179,055		1,184,329		2,008,126		725,123		822,411		714,638		—		—		5,633,682
Special mention	—		—		—		—		—		11,628		—		—		11,628


Construction and land
Pass	59,993		309,677		94,845		2,223		2,368		3,438		—		—		472,544



SBA secured by real estate
Pass	—		6,478		—		493		4,804		16,496		—		—		28,271

Substandard	—		—		131		—		536		7,462		—		—		8,129

Total investor loans secured by real estate	310,500		1,986,752		2,655,460		920,238		1,145,258		1,557,818		—		—		8,576,026
Current period gross charge-offs	—		—		217		—		1,582		3,653		—		—		5,452
Business loans secured by real estate
CRE owner-occupied
Pass	19,014		543,413		660,967		224,333		211,283		458,975		—		—		2,117,985
Special mention	—		16,535		—		476		4,775		11,775		919		—		34,480
Substandard	—		15,539		2,162		5,505		3,873		11,790		—		—		38,869

Franchise real estate secured
Pass	10,580		39,239		124,424		25,697		15,731		72,342		—		—		288,013
Special mention	1,758		3,603		1,903		—		795		1,615		—		—		9,674
Substandard	—		3,964		—		—		2,571		292		—		—		6,827

SBA secured by real estate
Pass	113		9,334		7,634		1,979		4,109		22,417		—		—		45,586
Special mention	—		536		—		—		—		83		—		—		619
Substandard	—		—		—		—		—		4,536		—		—		4,536

Total loans secured by business real estate	31,465		632,163		797,090		257,990		243,137		583,825		919		—		2,546,589
Current period gross charge-offs	—		—		318		191		—		1,861		—		—		2,370
Commercial loans
Commercial and industrial
Pass	46,765		172,987		160,275		40,988		110,526		146,310		966,733		6,518		1,651,102
Special mention	239		23,242		12,270		367		16		2,139		42,570		407		81,250
Substandard	425		8,052		2,689		588		173		1,138		26,462		14,187		53,714
Doubtful and loss	—		—		—		—		—		—		—		4,542		4,542
Franchise non-real estate secured
Pass	6,801		74,441		112,112		16,355		34,770		53,957		—		753		299,189
Special mention	433		845		1,633		—		627		692		—		—		4,230
Substandard	—		1,646		322		2,324		10,451		1,559		—		—		16,302


	Term Loans by Vintage
(Dollars in thousands)	2023		2022		2021		2020		2019		Prior		Revolving		Revolving Converted to Term During the Period		Total
December 31, 2023
SBA non-real estate secured
Pass	1,075		4,485		343		113		1,464		2,490		—		—		9,970

Substandard	—		527		—		141		53		235		—		—		956






Total commercial loans	55,738		286,225		289,644		60,876		158,080		208,520		1,035,765		26,407		2,121,255
Current period gross charge-offs	132		3,053		62		5		362		37		6,387		503		10,541
Retail loans
Single family residential
Pass	20		—		—		167		—		44,104		28,461		—		72,752



Consumer loans
Pass	—		—		3		9		5		788		1,144		—		1,949



Total retail loans	20		—		3		176		5		44,892		29,605		—		74,701
Current period gross charge-offs	—		—		—		—		—		983		3		—		986
Loans held for investment before basis adjustment (1)	$	397,723	$	2,905,140	$	3,742,197	$	1,239,280	$	1,546,480	$	2,395,055	$	1,066,289	$	26,407	$	13,318,571
Total current period gross charge-offs	$	132	$	3,053	$	597	$	196	$	1,944	$	6,534	$	6,390	$	503	$	19,349


	Term Loans by Vintage
(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving		Revolving Converted to Term During the Period		Total
December 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied
Pass	$	523,895	$	607,153	$	208,760	$	347,889	$	308,317	$	651,593	$	—	$	—	$	2,647,607
Special mention	—		—		—		—		7,487		—		—		—		7,487
Substandard	—		—		—		—		194		4,570		—		463		5,227

Multifamily
Pass	1,230,359		2,187,255		786,436		889,737		263,241		732,808		—		—		6,089,836
Special mention	—		—		—		12,667		—		—		—		—		12,667
Substandard	—		6,057		—		2,723		—		743		—		—		9,523

Construction and land
Pass	187,567		154,231		38,760		9,615		1,843		7,018		—		—		399,034



SBA secured by real estate
Pass	6,571		130		493		5,407		7,361		13,199		—		—		33,161

Substandard	—		—		—		—		2,416		6,558		—		—		8,974

Total investor loans secured by real estate	$	1,948,392	$	2,954,826	$	1,034,449	$	1,268,038	$	590,859	$	1,416,489	$	—	$	463	$	9,213,516


	Term Loans by Vintage
(Dollars in thousands)	2022		2021		2020		2019		2018		Prior		Revolving		Revolving Converted to Term During the Period		Total
December 31, 2022
Business loans secured by real estate
CRE owner-occupied
Pass	$	593,826	$	718,223	$	242,125	$	240,772	$	114,581	$	448,531	$	5,661	$	—	$	2,363,719
Special mention	334		1,015		—		—		675		327		—		—		2,351
Substandard	10,838		2,541		11,970		2,403		4,676		33,665		—		—		66,093

Franchise real estate secured
Pass	54,654		131,541		33,513		44,229		32,815		55,893		—		—		352,645
Special mention	4,891		13,145		—		—		—		—		—		—		18,036
Substandard	980		—		—		6,092		—		304		—		—		7,376

SBA secured by real estate
Pass	10,993		6,978		2,329		5,710		4,440		25,415		—		—		55,865
Special mention	—		—		—		—		—		118		—		—		118
Substandard	—		—		—		—		1,354		4,031		—		—		5,385

Total loans secured by business real estate	676,516		873,443		289,937		299,206		158,541		568,284		5,661		—		2,871,588
Commercial loans
Commercial and industrial
Pass	282,131		262,044		55,659		155,310		78,684		121,918		1,134,568		3,412		2,093,726
Special mention	15,105		3,567		798		—		1,864		41		9,898		—		31,273
Substandard	2,590		80		—		3,867		562		1,029		27,680		141		35,949

Franchise non-real estate secured
Pass	102,542		128,030		18,486		46,027		28,664		43,486		778		—		368,013
Special mention	1,372		14,382		—		11,829		—		—		—		—		27,583
Substandard	1,757		385		2,852		2,256		1,637		308		—		—		9,195

SBA non-real estate secured
Pass	3,444		435		276		1,638		633		3,124		—		—		9,550

Substandard	—		—		—		130		224		606		—		590		1,550

Total commercial loans	408,941		408,923		78,071		221,057		112,268		170,512		1,172,924		4,143		2,576,839
Retail loans
Single family residential
Pass	—		—		176		—		22		49,729		23,065		—		72,992

Substandard	—		—		—		—		—		5		—		—		5

Consumer loans
Pass	—		6		17		11		—		969		2,254		—		3,257

Substandard	—		—		—		—		—		27		—		—		27
Doubtful and loss	—		—		—		—		—		—		—		—		—
Total retail loans	—		6		193		11		22		50,730		25,319		—		76,281
Loans held for investment before basis adjustment (1)	$	3,033,849	$	4,237,198	$	1,402,650	$	1,788,312	$	861,690	$	2,206,015	$	1,203,904	$	4,606	$	14,738,224


			Days Past Due
(Dollars in thousands)	Current		30-59		60-89		90+		Total
December 31, 2023
Investor loans secured by real estate
CRE non-owner-occupied	$	2,421,360	$	—	$	—	$	412	$	2,421,772
Multifamily	5,645,310		—		—		—		5,645,310
Construction and land	472,544		—		—		—		472,544
SBA secured by real estate	35,980		—		—		420		36,400
Total investor loans secured by real estate	8,575,194		—		—		832		8,576,026
Business loans secured by real estate
CRE owner-occupied	2,186,679		—		—		4,655		2,191,334
Franchise real estate secured	304,222		292		—		—		304,514
SBA secured by real estate	50,604		137		—		—		50,741
Total business loans secured by real estate	2,541,505		429		—		4,655		2,546,589
Commercial loans
Commercial and industrial	1,788,855		228		1,294		231		1,790,608
Franchise non-real estate secured	318,162		1,559		—		—		319,721
SBA not secured by real estate	10,119		249		—		558		10,926
Total commercial loans	2,117,136		2,036		1,294		789		2,121,255
Retail loans
Single family residential	72,733		19		—		—		72,752
Consumer loans	1,949		—		—		—		1,949
Total retail loans	74,682		19		—		—		74,701
Loans held for investment before basis adjustment (1)	$	13,308,517	$	2,484	$	1,294	$	6,276	$	13,318,571




December 31, 2022
Investor loans secured by real estate
CRE non-owner-occupied	$	2,655,892	$	—	$	—	$	4,429	$	2,660,321
Multifamily	6,103,246		2,723		—		6,057		6,112,026
Construction and land	399,034		—		—		—		399,034
SBA secured by real estate	42,135		—		—		—		42,135
Total investor loans secured by real estate	9,200,307		2,723		—		10,486		9,213,516
Business loans secured by real estate
CRE owner-occupied	2,424,174		1,434		—		6,555		2,432,163
Franchise real estate secured	370,984		7,073		—		—		378,057
SBA secured by real estate	60,177		—		104		1,087		61,368
Total business loans secured by real estate	2,855,335		8,507		104		7,642		2,871,588
Commercial loans
Commercial and industrial	2,152,302		4,657		81		3,908		2,160,948
Franchise non-real estate secured	401,199		3,592		—		—		404,791
SBA not secured by real estate	10,511		—		—		589		11,100
Total commercial loans	2,564,012		8,249		81		4,497		2,576,839
Retail loans
Single family residential	71,940		1,057		—		—		72,997
Consumer loans	3,282		2		—		—		3,284
Total retail loans	75,222		1,059		—		—		76,281
Loans held for investment before basis adjustment (1)	$	14,694,876	$	20,538	$	185	$	22,625	$	14,738,224

The Company evaluates loans collectively for purposes of determining the ACL in accordance with ASC 326. Collective evaluation is based on aggregating loans deemed to possess similar risk characteristics. In certain instances, the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the loan portfolio. These loans are typically identified from a substandard or worse internal risk grade, since the specific attributes and risks associated with such loans tend to become unique as the credit deteriorates. Such loans are typically nonperforming, modified loans made to borrowers experiencing financial difficulty, and/or are deemed collateral dependent, where the ultimate repayment of the loan is expected to come from the operation of or eventual sale of the collateral. Loans that are deemed by management to no longer possess risk characteristics similar to other loans in the portfolio are evaluated individually for purposes of determining an appropriate lifetime ACL. The Company uses a discounted cash flow approach, using the loan’s effective interest rate, for determining the ACL on individually evaluated loans, unless the loan is deemed collateral dependent, which requires evaluation based on the estimated fair value of the underlying collateral, less estimated costs to sell. The Company may increase or decrease the ACL for collateral dependent individually evaluated loans based on changes in the estimated expected fair value of the collateral. Changes in the ACL for all other individually evaluated loans is based substantially on the Company’s evaluation of cash flows expected to be received from such loans.

Acquired loans classified as PCD are recorded at an initial amortized cost, which is comprised of the purchase price of the loans (or initial fair value) and the initial ACL determined for the loans, which is added to the purchase price, as well as any resulting discount or premium related to factors other than credit. The Company accounts for interest income on PCD loans using the interest method, whereby any purchase discounts or premiums are accreted or amortized into interest income as an adjustment of the loan’s yield. Subsequent to acquisition, the ACL for PCD loans is measured in accordance with the Company’s ACL methodology. Please also see Note 5 – Allowance for Credit Losses for more information concerning the Company’s ACL methodology.

Loans that have been classified as collateral dependent are loans where substantially all repayment of the loan is expected to come from the operation of or eventual liquidation of the collateral. Collateral dependent loans are evaluated individually for purposes of determining the ACL, which is determined based on the estimated fair value of the collateral. Estimates for costs to sell are included in the determination of the ACL when liquidation of the collateral is anticipated. In cases where the loan is well secured and the estimated value of the collateral exceeds the amortized cost of the loan, no ACL is recorded. The following tables summarize collateral dependent loans by collateral type as of the dates indicated:



(Dollars in thousands)	Office Properties		Industrial Properties		Retail Properties		Land Properties		Hotel Properties		Multifamily Properties		Other CRE Properties		Business Assets		Total
December 31, 2023
Investor loan secured by real estate
CRE non-owner-occupied	$	—	$	—	$	412	$	—	$	—	$	—	$	—	$	—	$	412


SBA secured by real estate	—		—		—		—		1,205		—		—		—		1,205
Total investor loans secured by real estate	—		—		412		—		1,205		—		—		—		1,617
Business loans secured by real estate
CRE owner-occupied	4,011		—		—		4,655		—		—		—		—		8,666


Total business loans secured by real estate	4,011		—		—		4,655		—		—		—		—		8,666
Commercial loans
Commercial and industrial	—		—		—		231		—		—		—		1,150		1,381

SBA non-real estate secured	—		—		—		—		—		—		—		558		558
Total commercial loans	—		—		—		231		—		—		—		1,708		1,939




Total collateral dependent loans	$	4,011	$	—	$	412	$	4,886	$	1,205	$	—	$	—	$	1,708	$	12,222




December 31, 2022
Investor loan secured by real estate
CRE non-owner-occupied	$	—	$	—	$	463	$	—	$	—	$	—	$	3,966	$	—	$	4,429
Multifamily	—		—		—		—		—		8,780		—		—		8,780

SBA secured by real estate	—		—		—		—		533		—		—		—		533
Total investor loans secured by real estate	—		—		463		—		533		8,780		3,966		—		13,742
Business loans secured by real estate
CRE owner-occupied	4,417		—		—		4,813		—		—		2,245		—		11,475

SBA secured by real estate	104		1,087		—		—		—		—		—		—		1,191
Total business loans secured by real estate	4,521		1,087		—		4,813		—		—		2,245		—		12,666
Commercial loans
Commercial and industrial	—		—		—		238		—		—		490		3,180		3,908

SBA non-real estate secured	—		—		—		—		—		—		—		589		589
Total commercial loans	—		—		—		238		—		—		490		3,769		4,497




Total collateral dependent loans	$	4,521	$	1,087	$	463	$	5,051	$	533	$	8,780	$	6,701	$	3,769	$	30,905