Loans Receivable and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2019

Loans and Leases Receivable Disclosure [Abstract]

Schedule of composition of non-PCI and PCI loans

The following table presents the composition of the Company’s non-PCI and PCI loans as of March 31, 2019 and December 31, 2018:




($ in thousands)	March 31, 2019									December 31, 2018
($ in thousands)	Non-PCI Loans ⁽¹⁾			PCI Loans ⁽²⁾			Total ⁽¹⁾⁽²⁾			Non-PCI Loans ⁽¹⁾			PCI Loans ⁽²⁾			Total ⁽¹⁾⁽²⁾
Commercial:
C&I	$	12,038,864		$	1,942		$	12,040,806		$	12,054,818		$	2,152		$	12,056,970
CRE	9,478,979			157,359			9,636,338			9,284,583			165,252			9,449,835
Multifamily residential	2,242,327			28,263			2,270,590			2,246,506			34,526			2,281,032
Construction and land	647,338			42			647,380			538,752			42			538,794
Total commercial	24,407,508			187,606			24,595,114			24,124,659			201,972			24,326,631
Consumer:
Single-family residential	6,214,386			94,945			6,309,331			5,939,258			97,196			6,036,454
HELOCs	1,618,445			7,777			1,626,222			1,681,979			8,855			1,690,834
Other consumer	332,619			—			332,619			331,270			—			331,270
Total consumer	8,165,450			102,722			8,268,172			7,952,507			106,051			8,058,558
Total loans held-for-investment	$	32,572,958		$	290,328		$	32,863,286		$	32,077,166		$	308,023		$	32,385,189
Allowance for loan losses	(317,880		)	(14		)	(317,894		)	(311,300		)	(22		)	(311,322		)
Loans held-for-investment, net	$	32,255,078		$	290,314		$	32,545,392		$	31,765,866		$	308,001		$	32,073,867


(1)	Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(46.0) million and $(48.9) million as of March 31, 2019 and December 31, 2018, respectively.


(2)	Includes ASC 310-30 discount of $20.4 million and $22.2 million as of March 31, 2019 and December 31, 2018, respectively.

Summary of credit risk rating for non-PCI and PCI loans by portfolio segment

The following tables present the credit risk ratings for non-PCI loans by portfolio segment as of March 31, 2019 and December 31, 2018:




($ in thousands)	March 31, 2019
($ in thousands)	Pass/Watch		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
Commercial:
C&I	$	11,513,029	$	283,651	$	219,619	$	22,565	$	12,038,864
CRE	9,337,492		50,171		91,316		—		9,478,979
Multifamily residential	2,210,481		20,900		10,946		—		2,242,327
Construction and land	593,632		20,046		33,660		—		647,338
Total commercial	23,654,634		374,768		355,541		22,565		24,407,508
Consumer:
Single-family residential	6,192,411		7,688		14,287		—		6,214,386
HELOCs	1,601,555		2,492		14,398		—		1,618,445
Other consumer	316,113		14,000		2,506		—		332,619
Total consumer	8,110,079		24,180		31,191		—		8,165,450
Total	$	31,764,713	$	398,948	$	386,732	$	22,565	$	32,572,958




($ in thousands)	December 31, 2018
($ in thousands)	Pass/Watch		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
Commercial:
C&I	$	11,644,470	$	260,089	$	139,844	$	10,415	$	12,054,818
CRE	9,144,646		49,705		90,232		—		9,284,583
Multifamily residential	2,215,573		20,551		10,382		—		2,246,506
Construction and land	485,217		19,838		33,697		—		538,752
Total commercial	23,489,906		350,183		274,155		10,415		24,124,659
Consumer:
Single-family residential	5,925,584		6,376		7,298		—		5,939,258
HELOCs	1,669,300		1,576		11,103		—		1,681,979
Other consumer	328,767		1		2,502		—		331,270
Total consumer	7,923,651		7,953		20,903		—		7,952,507
Total	$	31,413,557	$	358,136	$	295,058	$	10,415	$	32,077,166

The following tables present the credit risk ratings for PCI loans by portfolio segment as of March 31, 2019 and December 31, 2018:




($ in thousands)	March 31, 2019
($ in thousands)	Pass/Watch		Special Mention		Substandard		Doubtful		Total PCI Loans
Commercial:
C&I	$	1,942	$	—	$	—	$	—	$	1,942
CRE	137,259		719		19,381		—		157,359
Multifamily residential	26,770		—		1,493		—		28,263
Construction and land	42		—		—		—		42
Total commercial	166,013		719		20,874		—		187,606
Consumer:
Single-family residential	93,375		772		798		—		94,945
HELOCs	7,042		456		279		—		7,777
Total consumer	100,417		1,228		1,077		—		102,722
Total ⁽¹⁾	$	266,430	$	1,947	$	21,951	$	—	$	290,328




($ in thousands)	December 31, 2018
($ in thousands)	Pass/Watch		Special Mention		Substandard		Doubtful		Total PCI Loans
Commercial:
C&I	$	1,996	$	—	$	156	$	—	$	2,152
CRE	146,057		—		19,195		—		165,252
Multifamily residential	33,003		—		1,523		—		34,526
Construction and land	42		—		—		—		42
Total commercial	181,098		—		20,874		—		201,972
Consumer:
Single-family residential	95,789		1,021		386		—		97,196
HELOCs	8,314		256		285		—		8,855
Total consumer	104,103		1,277		671		—		106,051
Total ⁽¹⁾	$	285,201	$	1,277	$	21,545	$	—	$	308,023


(1)	Loans net of ASC 310-30 discount.

Schedule of aging analysis on non-PCI loans

The following tables present the aging analysis on non-PCI loans as of March 31, 2019 and December 31, 2018:




($ in thousands)	March 31, 2019
($ in thousands)	Accruing Loans 30-59 Days Past Due		Accruing Loans 60-89 Days Past Due		Total Accruing Past Due Loans		Nonaccrual Loans Less Than 90 Days Past Due		Nonaccrual Loans 90 or More Days Past Due		Total Nonaccrual Loans		Current Accruing Loans		Total Non-PCI Loans
Commercial:
C&I	$	10,098	$	18,884	$	28,982	$	59,140	$	27,326	$	86,466	$	11,923,416	$	12,038,864
CRE	18,192		4,042		22,234		3,666		21,543		25,209		9,431,536		9,478,979
Multifamily residential	2,600		383		2,983		1,040		580		1,620		2,237,724		2,242,327
Construction and land	—		—		—		—		—		—		647,338		647,338
Total commercial	30,890		23,309		54,199		63,846		49,449		113,295		24,240,014		24,407,508
Consumer:
Single-family residential	14,653		9,382		24,035		499		9,968		10,467		6,179,884		6,214,386
HELOCs	6,065		1,660		7,725		1,381		9,092		10,473		1,600,247		1,618,445
Other consumer	17		3		20		—		2,506		2,506		330,093		332,619
Total consumer	20,735		11,045		31,780		1,880		21,566		23,446		8,110,224		8,165,450
Total	$	51,625	$	34,354	$	85,979	$	65,726	$	71,015	$	136,741	$	32,350,238	$	32,572,958




($ in thousands)	December 31, 2018
($ in thousands)	Accruing Loans 30-59 Days Past Due		Accruing Loans 60-89 Days Past Due		Total Accruing Past Due Loans		Nonaccrual Loans Less Than 90 Days Past Due		Nonaccrual Loans 90 or More Days Past Due		Total Nonaccrual Loans		Current Accruing Loans		Total Non-PCI Loans
Commercial:
C&I	$	21,032	$	19,170	$	40,202	$	17,097	$	26,743	$	43,840	$	11,970,776	$	12,054,818
CRE	7,740		—		7,740		3,704		20,514		24,218		9,252,625		9,284,583
Multifamily residential	4,174		—		4,174		1,067		193		1,260		2,241,072		2,246,506
Construction and land	207		—		207		—		—		—		538,545		538,752
Total commercial	33,153		19,170		52,323		21,868		47,450		69,318		24,003,018		24,124,659
Consumer:
Single-family residential	14,645		7,850		22,495		509		4,750		5,259		5,911,504		5,939,258
HELOCs	2,573		1,816		4,389		1,423		7,191		8,614		1,668,976		1,681,979
Other consumer	11		12		23		—		2,502		2,502		328,745		331,270
Total consumer	17,229		9,678		26,907		1,932		14,443		16,375		7,909,225		7,952,507
Total	$	50,382	$	28,848	$	79,230	$	23,800	$	61,893	$	85,693	$	31,912,243	$	32,077,166

Summary of additions and modifications to non-PCI troubled debt restructurings

The following table presents the additions to non-PCI TDRs for the three months ended March 31, 2019:




($ in thousands)	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment ⁽¹⁾		Financial Impact ⁽²⁾
Commercial:
C&I	3	$	29,152	$	29,176	$	60


(1)	Includes subsequent payments after modification and reflects the balance as of March 31, 2019.


(2)	The financial impact includes increases in charge-offs and specific reserves recorded at the modification date.

Summary of TDR loans subsequently defaulted

The following table presents information on loans modified as TDRs within the previous 12 months that have subsequently defaulted during the three months ended March 31, 2019 and 2018, and were still in default at the respective period end:




($ in thousands)	Loans Modified as TDRs that Subsequently Defaulted During the Three Months Ended March 31,
	2019			2018
	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial:
C&I	3	$	4,618	—	$	—
Consumer:
HELOCs	—	$	—	1	$	155

Summary of non-PCI impaired loans

The following tables present information on non-PCI impaired loans as of March 31, 2019 and December 31, 2018:




($ in thousands)	March 31, 2019
($ in thousands)	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Commercial:
C&I	$	159,172	$	117,905	$	11,791	$	129,696	$	1,537
CRE	37,461		29,288		2,012		31,300		197
Multifamily residential	6,373		2,925		2,958		5,883		92
Total commercial	203,006		150,118		16,761		166,879		1,826
Consumer:
Single-family residential	19,593		3,970		14,366		18,336		43
HELOCs	11,794		5,356		6,308		11,664		84
Other consumer	2,506		—		2,506		2,506		2,502
Total consumer	33,893		9,326		23,180		32,506		2,629
Total non-PCI impaired loans	$	236,899	$	159,444	$	39,941	$	199,385	$	4,455




($ in thousands)	December 31, 2018
($ in thousands)	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Commercial:
C&I	$	82,963	$	48,479	$	8,609	$	57,088	$	1,219
CRE	36,426		28,285		2,067		30,352		208
Multifamily residential	6,031		2,949		2,611		5,560		75
Total commercial	125,420		79,713		13,287		93,000		1,502
Consumer:
Single-family residential	14,670		2,552		10,908		13,460		34
HELOCs	10,035		5,547		4,409		9,956		5
Other consumer	2,502		—		2,502		2,502		2,491
Total consumer	27,207		8,099		17,819		25,918		2,530
Total non-PCI impaired loans	$	152,627	$	87,812	$	31,106	$	118,918	$	4,032

Schedule of average recorded investment and interest income recognized on non-PCI impaired loans

The following table presents the average recorded investment and interest income recognized on non-PCI impaired loans for the three months ended March 31, 2019 and 2018:




($ in thousands)	Three Months Ended March 31,
	2019				2018
	Average Recorded Investment		Recognized Interest Income ⁽¹⁾		Average Recorded Investment		Recognized Interest Income ⁽¹⁾
Commercial:
C&I	$	93,391	$	735	$	98,833	$	262
CRE	30,827		114		35,236		143
Multifamily residential	5,721		61		10,027		82
Construction and land	—		—		3,973		—
Total commercial	129,939		910		148,069		487
Consumer:
Single-family residential	15,898		128		15,079		113
HELOCs	10,811		18		6,671		15
Other consumer	2,504		—		2,491		—
Total consumer	29,213		146		24,241		128
Total non-PCI impaired loans	$	159,152	$	1,056	$	172,310	$	615


(1)	Includes interest income recognized on accruing non-PCI TDRs. Interest payments received on nonaccrual non-PCI loans are reflected as a reduction to principal, not as interest income.

Summary of activities in the allowance for credit losses

The following table presents a summary of activities in the allowance for loan losses by portfolio segment for the three months ended March 31, 2019 and 2018:




($ in thousands)	Three Months Ended March 31,
($ in thousands)	2019			2018
Non-PCI Loans
Allowance for non-PCI loans, beginning of period	$	311,300		$	287,070
Provision for loan losses on non-PCI loans	20,648			19,933
Gross charge-offs:
Commercial:
C&I	(17,244		)	(18,445		)
Consumer:
Single-family residential	—			(1		)
Other consumer	(14		)	(17		)
Total gross charge-offs	(17,258		)	(18,463		)
Gross recoveries:
Commercial:
C&I	2,251			7,279
CRE	222			427
Multifamily residential	281			333
Construction and land	63			435
Consumer:
Single-family residential	2			184
HELOCs	2			—
Other consumer	—			1
Total gross recoveries	2,821			8,659
Net charge-offs	(14,437		)	(9,804		)
Foreign currency translation adjustments	369			408
Allowance for non-PCI loans, end of period	317,880			297,607
PCI Loans
Allowance for PCI loans, beginning of period	22			58
Reversal of loan losses on PCI loans	(8		)	(11		)
Allowance for PCI loans, end of period	14			47
Allowance for loan losses	$	317,894		$	297,654

The following table presents a summary of activities in the allowance for unfunded credit reserves for the three months ended March 31, 2019 and 2018:




($ in thousands)	Three Months Ended March 31,
($ in thousands)	2019		2018
Allowance for unfunded credit reserves, beginning of period	$	12,566	$	13,318
Provision for unfunded credit reserves	1,939		296
Allowance for unfunded credit reserves, end of period	$	14,505	$	13,614

Summary of allowance for loan losses and recorded investments by portfolio segment and impairment methodology

The following tables present the Company’s allowance for loan losses and recorded investments by portfolio segment and impairment methodology as of March 31, 2019 and December 31, 2018:




($ in thousands)	March 31, 2019
	Commercial								Consumer						Total
	C&I		CRE		Multifamily Residential		Construction and Land		Single- Family Residential		HELOCs		Other Consumer		Total
Allowance for loan losses
Individually evaluated for impairment	$	1,537	$	197	$	92	$	—	$	43	$	84	$	2,502	$	4,455
Collectively evaluated for impairment	188,220		39,668		18,422		22,349		35,716		7,317		1,733		313,425
Acquired with deteriorated credit quality	—		14		—		—		—		—		—		14
Total	$	189,757	$	39,879	$	18,514	$	22,349	$	35,759	$	7,401	$	4,235	$	317,894

Recorded investment in loans
Individually evaluated for impairment	$	129,696	$	31,300	$	5,883	$	—	$	18,336	$	11,664	$	2,506	$	199,385
Collectively evaluated for impairment	11,909,168		9,447,679		2,236,444		647,338		6,196,050		1,606,781		330,113		32,373,573
Acquired with deteriorated credit quality ⁽¹⁾	1,942		157,359		28,263		42		94,945		7,777		—		290,328
Total ⁽¹⁾	$	12,040,806	$	9,636,338	$	2,270,590	$	647,380	$	6,309,331	$	1,626,222	$	332,619	$	32,863,286




($ in thousands)	December 31, 2018
	Commercial								Consumer						Total
	C&I		CRE		Multifamily Residential		Construction and Land		Single- Family Residential		HELOCs		Other Consumer		Total
Allowance for loan losses
Individually evaluated for impairment	$	1,219	$	208	$	75	$	—	$	34	$	5	$	2,491	$	4,032
Collectively evaluated for impairment	190,121		38,823		19,208		20,282		31,306		5,769		1,759		307,268
Acquired with deteriorated credit quality	—		22		—		—		—		—		—		22
Total	$	191,340	$	39,053	$	19,283	$	20,282	$	31,340	$	5,774	$	4,250	$	311,322

Recorded investment in loans
Individually evaluated for impairment	$	57,088	$	30,352	$	5,560	$	—	$	13,460	$	9,956	$	2,502	$	118,918
Collectively evaluated for impairment	11,997,730		9,254,231		2,240,946		538,752		5,925,798		1,672,023		328,768		31,958,248
Acquired with deteriorated credit quality ⁽¹⁾	2,152		165,252		34,526		42		97,196		8,855		—		308,023
Total ⁽¹⁾	$	12,056,970	$	9,449,835	$	2,281,032	$	538,794	$	6,036,454	$	1,690,834	$	331,270	$	32,385,189


(1)	Loans net of ASC 310-30 discount.

Summary of changes in accretable yield for PCI loans

The following table presents the changes in accretable yield for PCI loans for the three months ended March 31, 2019 and 2018:




($ in thousands)	Three Months Ended March 31,
($ in thousands)	2019			2018
Accretable yield for PCI loans, beginning of period	$	74,870		$	101,977
Accretion	(6,201		)	(9,134		)
Changes in expected cash flows	192			3,021
Accretable yield for PCI loans, end of period	$	68,861		$	95,864

Schedule of loans purchases into the held-for-investment portfolio, reclassification of loans held-for-investment to/from held for-sale and sales of loans

The following tables present information on loan purchases into held-for-investment portfolio, reclassification of loans held-for-investment to held-for-sale and sales during the three months ended March 31, 2019 and 2018:




($ in thousands)	Three Months Ended March 31, 2019
	Commercial						Consumer		Total
	C&I		CRE		Multifamily Residential		Single-Family Residential		Total
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	75,573	$	16,655	$	—	$	—	$	92,228
Sales ^(2)(3)(4)	$	75,646	$	16,655	$	—	$	2,442	$	94,743
Purchases ⁽⁵⁾	$	107,194	$	—	$	4,218	$	36,402	$	147,814




($ in thousands)	Three Months Ended March 31, 2018
	Commercial						Consumer
	C&I		CRE		Multifamily Residential		Single-Family Residential		Total
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	146,391	$	9,376	$	—	$	—	$	155,767
Sales ^(2)(3)(4)	$	102,365	$	9,376	$	—	$	2,546	$	114,287
Purchases ⁽⁵⁾	$	64,747	$	—	$	186	$	15,113	$	80,046


(1)	The Company recorded $73 thousand and $85 thousand in write-downs to the allowance for loan losses related to loans transferred from held-for-investment to held-for-sale for the three months ended March 31, 2019 and 2018, respectively.


(2)	Includes originated loans sold of $76.5 million and $89.7 million for the three months ended March 31, 2019 and 2018, respectively. Originated loans sold during each of the three months ended March 31, 2019 and 2018 were primarily C&I and CRE loans.


(3)	Includes purchased loans sold in the secondary market of $18.2 million and $24.6 million for the three months ended March 31, 2019 and 2018, respectively.


(4)	Net gains on sales of loans, excluding the lower of cost or fair value adjustments, were $915 thousand and $1.6 million for the three months ended March 31, 2019 and 2018, respectively. No lower of cost or fair value adjustments were recorded for each of the three months ended March 31, 2019 and 2018.


(5)	C&I loan purchases for each of the three months ended March 31, 2019 and 2018 were comprised of C&I syndicated loans.