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LOANS AND CREDIT QUALITY
 3 Months Ended
Mar. 31, 2022
Receivables [Abstract]  
LOANS AND CREDIT QUALITY LOANS AND CREDIT QUALITY:
The Company's LHFI is divided into two portfolio segments, commercial loans and consumer loans. Within each portfolio segment, the Company monitors and assesses credit risk based on the risk characteristics of each of the following loan classes: non-owner occupied commercial real estate ("CRE"), multifamily, construction and land development, owner occupied CRE and commercial business loans within the commercial loan portfolio segment and single family and home equity and other loans within the consumer loan portfolio segment. LHFI consists of the following:

(in thousands)At March 31, 2022At December 31, 2021
CRE
Non-owner occupied CRE$699,277 $705,359 
Multifamily2,729,775 2,415,359 
Construction/land development528,134 496,144 
Total3,957,186 3,616,862 
Commercial and industrial loans
Owner occupied CRE464,356 457,706 
Commercial business387,938 401,872 
Total
852,294 859,578 
Consumer loans
Single family (1)
759,286 763,331 
Home equity and other295,724 303,078 
Total1,055,010 1,066,409 
                  Total LHFI5,864,490 5,542,849 
Allowance for credit losses ("ACL")(37,944)(47,123)
Total LHFI less ACL
$5,826,546 $5,495,726 
(1)    Includes $7.0 million and $7.3 million at March 31, 2022 and December 31, 2021, respectively, of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Loans totaling $3.2 billion and $2.8 billion at March 31, 2022 and December 31, 2021, respectively, were pledged to secure borrowings from the Federal Home Loan Bank ("FHLB") and loans totaling $421 million and $419 million at March 31, 2022 and December 31, 2021, respectively, were pledged to secure borrowings from the Federal Reserve Bank of San Francisco ("FRBSF").

Credit Risk Concentrations

LHFI are primarily secured by real estate located in the Pacific Northwest, California and Hawaii. At March 31, 2022 and December 31, 2021, multifamily loans in the state of California represented 34% and 33% of the total LHFI portfolio, respectively.

Credit Quality
Management considers the level of ACL to be appropriate to cover credit losses expected over the life of the loans for the LHFI portfolio. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Bank’s historical loss experience and eight qualitative factors for current and forecasted periods.
During the first quarter of 2022, the historical expected loss rates decreased from December 31, 2021 due to minimal charge-offs, improving portfolio credit distribution and favorable product mix risk composition. During the first quarter of 2022, the qualitative factors decreased significantly due to the continued favorable performance and outlook of the impact of the COVID-19 pandemic on our loan portfolio, which resulted in a reduced management overlay. As of March 31, 2022, the Bank expects that the markets in which it operates will have stable collateral values and economic outlook over the two-year forecast period.
In addition to the ACL for LHFI, the Company maintains a separate allowance for unfunded loan commitments which is included in accounts payable and other liabilities on our consolidated balance sheets. The allowance for unfunded commitments was $2.6 million and $2.4 million at March 31, 2022 and December 31, 2021, respectively.
The Bank has elected to exclude accrued interest receivable from the evaluation of the ACL. Accrued interest on LHFI was $18.1 million and $17.8 million at March 31, 2022 and December 31, 2021, respectively, and was reported in other assets in the consolidated balance sheets.
Activity in the ACL for LHFI and the allowance for unfunded commitments was as follows:

 Quarter Ended March 31,
(in thousands)20222021
Beginning balance
$47,123 $64,294 
Provision for credit losses(9,223)(371)
Net (charge-offs) recoveries44 124
Ending balance$37,944 $64,047 
Allowance for unfunded commitments:
Beginning balance$2,404 $1,588 
Provision for credit losses223 371 
Ending balance$2,627 $1,959 
Provision for credit losses:
Allowance for credit losses - loans$(9,223)$(371)
Allowance for unfunded commitments223 371 
Total$(9,000)$— 
Activity in the ACL for LHFI by loan portfolio and loan sub-class was as follows:

Quarter Ended March 31, 2022
(in thousands)Beginning balanceCharge-offsRecoveriesProvision Ending balance
CRE
Non-owner occupied CRE$7,509 $— $— $(5,215)$2,294 
Multifamily5,854 — — 2,573 8,427 
Construction/land development
Multifamily construction507 — — (51)456 
CRE construction150 — — 34 184 
Single family construction6,411 — — 1,324 7,735 
Single family construction to permanent1,055 — — (65)990 
Total21,486 — — (1,400)20,086 
Commercial and industrial loans
Owner occupied CRE5,006 — — (1,470)3,536 
Commercial business12,273 (11)24 (5,376)6,910 
     Total 17,279 (11)24 (6,846)10,446 
Consumer loans
Single family4,394 — 4 (636)3,762 
Home equity and other3,964 (33)60 (341)3,650 
Total8,358 (33)64 (977)7,412 
Total ACL$47,123 $(44)$88 $(9,223)$37,944 

Quarter Ended March 31, 2021
(in thousands)Beginning balanceCharge-offsRecoveriesProvision
Ending balance
CRE
Non-owner occupied CRE$8,845 $— $— $373 $9,218 
Multifamily6,072 — — 897 6,969 
Construction/land development
Multifamily construction4,903 — — (967)3,936 
CRE construction1,670 — — 238 1,908 
Single family construction5,130 — — (123)5,007 
Single family construction to permanent1,315 — — (191)1,124 
Total27,935 — — 227 28,162 
Commercial and industrial loans
Owner occupied CRE4,994 — — 272 5,266 
Commercial business17,043 — 74 (12)17,105 
     Total 22,037 — 74 260 22,371 
Consumer loans
Single family6,906 (70)120 (221)6,735 
Home equity and other7,416 (56)56 (637)6,779 
Total14,322 (126)176 (858)13,514 
Total ACL$64,294 $(126)$250 $(371)$64,047 
The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status.
At March 31, 2022
(in thousands)202220212020201920182017 and priorRevolvingRevolving-termTotal
COMMERCIAL PORTFOLIO
Non-owner occupied CRE
Pass$23,614 $68,572 $50,276 $158,484 $121,836 $274,775 $853 $867 $699,277 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total23,614 68,572 50,276 158,484 121,836 274,775 853 867 699,277 
Multifamily
Pass364,731 1,311,572 551,187 233,790 60,103 179,862 — — 2,701,245 
Special Mention— — 8,695 19,835 — — — — 28,530 
Substandard— — — — — — — — — 
Total364,731 1,311,572 559,882 253,625 60,103 179,862 — — 2,729,775 
Multifamily construction
Pass— 12,163 24,664 — — — — — 36,827 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total— 12,163 24,664 — — — — — 36,827 
CRE construction
Pass— 11,668 3,959 — 1,924 548 — — 18,099 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total— 11,668 3,959 — 1,924 548 — — 18,099 
Single family construction
Pass31,784 142,275 24,226 12,434 — 76 108,005 — 318,800 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total31,784 142,275 24,226 12,434 — 76 108,005 — 318,800 
Single family construction to permanent
Current
6,613 106,419 29,026 10,575 1,775 — — — 154,408 
Past due:
30-59 days
— — — — — — — — — 
60-89 days
— — — — — — — — — 
90+ days
— — — — — — — — — 
Total6,613 106,419 29,026 10,575 1,775 — — — 154,408 
Owner occupied CRE
Pass20,055 70,792 47,176 57,012 46,661 164,101 248 1,689 407,734 
Special Mention— — — 18,499 2,180 23,202 — — 43,881 
Substandard— — — — 1,111 11,572 — 58 12,741 
Total20,055 70,792 47,176 75,511 49,952 198,875 248 1,747 464,356 
Commercial business
Pass32,359 58,371 48,943 36,976 23,289 27,808 113,186 2,131 343,063 
Special Mention— 213 29 7,047 838 5,264 7,543 212 21,146 
Substandard— 8,214 3,253 2,414 3,392 1,827 4,616 13 23,729 
Total32,359 66,798 52,225 46,437 27,519 34,899 125,345 2,356 387,938 
Total commercial portfolio
$479,156 $1,790,259 $791,434 $557,066 $263,109 $689,035 $234,451 $4,970 $4,809,480 
The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:

At March 31, 2022
(in thousands)202220212020201920182017 and priorRevolvingRevolving-termTotal
CONSUMER PORTFOLIO
Single family
Current
$44,563 $178,656 $152,443 $49,114 $56,757 $275,042 $— $— $756,575 
Past due:
30-59 days
— — — — — 872 — — 872 
60-89 days
— — — — — 270 — — 270 
90+ days
— — — 994 452 123 — — 1,569 
Total (1)
44,563 178,656 152,443 50,108 57,209 276,307 — — 759,286 
Home equity and other
Current
797 1,585 334 294 197 2,407 284,426 4,755 294,795 
Past due:
30-59 days
— 3 — — — — 57 — 60 
60-89 days
— 8 — — 15 — 7 — 30 
90+ days
— — — — — 98 679 62 839 
Total797 1,596 334 294 212 2,505 285,169 4,817 295,724 
Total consumer portfolio$45,360 $180,252 $152,777 $50,402 $57,421 $278,812 $285,169 $4,817 $1,055,010 
Total LHFI$524,516 $1,970,511 $944,211 $607,468 $320,530 $967,847 $519,620 $9,787 $5,864,490 
(1)    Includes $7.0 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.
The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status:
At December 31, 2021
(in thousands)202120202019201820172016 and priorRevolvingRevolving-termTotal
COMMERCIAL PORTFOLIO
Non-owner occupied CRE
Pass$68,647 $50,571 $169,711 $130,877 $100,674 $183,024 $963 $892 $705,359 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total68,647 50,571 169,711 130,877 100,674 183,024 963 892 705,359 
Multifamily
Pass1,315,204 561,666 286,826 60,372 26,065 165,225 1 — 2,415,359 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total1,315,204 561,666 286,826 60,372 26,065 165,225 1 — 2,415,359 
Multifamily construction
Pass7,825 22,863 7,173 — — — — — 37,861 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total7,825 22,863 7,173 — — — — — 37,861 
CRE construction
Pass7,694 3,960 — 1,962 — 556 — — 14,172 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total7,694 3,960 — 1,962 — 556 — — 14,172 
Single family construction
Pass146,595 35,640 14,509 — — 77 99,206 — 296,027 
Special Mention— — — — — — — — — 
Substandard— — — — — — — — — 
Total146,595 35,640 14,509 — — 77 99,206 — 296,027 
Single family construction to permanent
Current90,311 42,636 13,362 1,775 — — — — 148,084 
Past due:
30-59 days — — — — — — — — — 
60-89 days — — — — — — — — — 
90+ days — — — — — — — — — 
Total90,311 42,636 13,362 1,775 — — — — 148,084 
Owner occupied CRE
Pass70,902 47,536 57,423 47,716 67,042 106,659 798 2,839 400,915 
Special Mention— — — 2,196 6,019 145 — 60 8,420 
Substandard— — 18,665 1,111 10,151 18,444 — — 48,371 
Total70,902 47,536 76,088 51,023 83,212 125,248 798 2,899 457,706 
Commercial business
Pass88,139 51,453 44,882 24,711 11,859 21,258 112,759 2,104 357,165 
Special Mention— — 7,396 — 4,396 — 5,613 134 17,539 
Substandard9,716 3,399 1,667 5,928 1,096 1,328 3,932 102 27,168 
Total97,855 54,852 53,945 30,639 17,351 22,586 122,304 2,340 401,872 
Total commercial portfolio$1,805,033 $819,724 $621,614 $276,648 $227,302 $496,716 $223,272 $6,131 $4,476,440 
The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:

At December 31, 2021
(in thousands)202120202019201820172016 and priorRevolvingRevolving-termTotal
CONSUMER PORTFOLIO
Single family
Current
$176,110 $156,360 $62,369 $66,063 $95,988 $204,229 $— $— $761,119 
Past due:
30-59 days
— — 291 — — — — — 291 
60-89 days
— — — — 314 471 — — 785 
90+ days
— — 561 452 — 123 — — 1,136 
Total (1)
176,110 156,360 63,221 66,515 96,302 204,823 — — 763,331 
Home equity and other
Current
2,005 474 393 532 516 2,609 290,512 5,273 302,314 
Past due:
30-59 days
— 3 — — — 94 40 — 137 
60-89 days
— — — — — — 12 62 74 
90+ days
3 — — — — 6 544 — 553 
Total2,008 477 393 532 516 2,709 291,108 5,335 303,078 
Total consumer portfolio$178,118 $156,837 $63,614 $67,047 $96,818 $207,532 $291,108 $5,335 $1,066,409 
Total LHFI$1,983,151 $976,561 $685,228 $343,695 $324,120 $704,248 $514,380 $11,466 $5,542,849 
(1)    Includes $7.3 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.
Collateral Dependent Loans
The following table presents the amortized cost basis of collateral-dependent loans by loan sub-class and collateral type:
At March 31, 2022
(in thousands)Land1-4 FamilyNon-residential real estateOther non-real estateTotal
Commercial and industrial loans
Owner occupied CRE$1,111 $— $2,428 $— $3,539 
Commercial business
380 16 562 286 1,244 
   Total
1,491 16 2,990 286 4,783 
Consumer loans
Single family
— 2,049 — — 2,049 
Home equity loans and other
— 345 — — 345 
   Total
— 2,394 — — 2,394 
  Total collateral-dependent loans$1,491 $2,410 $2,990 $286 $7,177 
At December 31, 2021
(in thousands)Land1-4 FamilyNon-residential real estateOther non-real estateTotal
Commercial and industrial loans
Owner occupied CRE$1,111 $— $2,456 $— $3,567 
Commercial business
362 27 562 286 1,237 
   Total
1,473 27 3,018 286 4,804 
Consumer loans
Single family
— 1,598 — — 1,598 
Home equity loans and other
— 19 — — 19 
   Total
— 1,617 — — 1,617 
  Total collateral-dependent loans$1,473 $1,644 $3,018 $286 $6,421 

Nonaccrual and Past Due Loans
The following table presents nonaccrual status for loans:

At March 31, 2022At December 31, 2021
(in thousands)Nonaccrual with no related ACLTotal NonaccrualNonaccrual with no related ACLTotal Nonaccrual
Commercial and industrial loans
Owner occupied CRE$3,539 $3,539 $3,568 $3,568 
        Commercial business1,244 3,996 1,210 5,023 
Total
4,783 7,535 4,778 8,591 
Consumer loans
Single family
2,325 2,918 1,324 2,802 
Home equity and other52 1,393 23 808 
Total2,377 4,311 1,347 3,610 
Total nonaccrual loans$7,160 $11,846 $6,125 $12,201 
The following tables present an aging analysis of past due loans by loan portfolio segment and loan sub-class:
At March 31, 2022
Past Due and Still Accruing
(in thousands)30-59 days60-89 days90 days or
more		Nonaccrual
Total past
due and nonaccrual (3)
CurrentTotal
loans
CRE
Non-owner occupied CRE$— $— $— $— $— $699,277 $699,277 
Multifamily— — — — — 2,729,775 2,729,775 
Construction/land development
Multifamily construction— — — — — 36,827 36,827 
CRE construction— — — — — 18,099 18,099 
Single family construction— — — — — 318,800 318,800 
Single family construction to permanent— — — — — 154,408 154,408 
Total
— — — — — 3,957,186 3,957,186 
Commercial and industrial loans
Owner occupied CRE— — — 3,539 3,539 460,817 464,356 
Commercial business— — — 3,996 3,996 383,942 387,938 
Total
— — — 7,535 7,535 844,759 852,294 
Consumer loans
Single family
3,753 1,821 6,903 (2)2,918 15,395 743,891 759,286 (1)
Home equity and other61 31 — 1,393 1,485 294,239 295,724 
Total
3,814 1,852 6,903 4,311 16,880 1,038,130 1,055,010 
Total loans$3,814 $1,852 $6,903 $11,846 $24,415 $5,840,075 $5,864,490 
%0.07 %0.03 %0.12 %0.20 %0.42 %99.58 %100.00 %
At December 31, 2021
Past Due and Still Accruing
(in thousands)30-59 days60-89 days90 days or
more		Nonaccrual
Total past
due and nonaccrual (3)
CurrentTotal
loans
CRE
Non-owner occupied CRE$— $— $— $— $— $705,359 $705,359 
Multifamily— — — — — 2,415,359 2,415,359 
Construction/land development
Multifamily construction— — — — — 37,861 37,861 
CRE construction— — — — — 14,172 14,172 
Single family construction— — — — — 296,027 296,027 
Single family construction to permanent— — — — — 148,084 148,084 
Total
— — — — — 3,616,862 3,616,862 
Commercial and industrial loans
Owner occupied CRE— — — 3,568 3,568 454,138 457,706 
Commercial business198 — — 5,023 5,221 396,651 401,872 
Total
198 — — 8,591 8,789 850,789 859,578 
Consumer loans
Single family
892 820 6,717 (2)2,802 11,231 752,100 763,331 (1)
Home equity and other118 74 — 808 1,000 302,078 303,078 
Total
1,010 894 6,717 3,610 12,231 1,054,178 1,066,409 
Total loans$1,208 $894 $6,717 $12,201 $21,020 $5,521,829 $5,542,849 
%0.02 %0.02 %0.12 %0.22 %0.38 %99.62 %100.00 %
(1)Includes $7.0 million and $7.3 million of loans at March 31, 2022 and December 31, 2021, respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in our consolidated income statements.
(2)FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss.
(3)Includes loans whose repayments are insured by the FHA or guaranteed by the VA or SBA of $11.0 million and $8.4 million at March 31, 2022 and December 31, 2021, respectively.
Loan Modifications

The Company provides modifications to borrowers experiencing financial difficulty which may include delays in payment of amounts due, extension of the terms of the notes or reduction in the interest rates on the notes. In certain instances, the Company may grant more than one type of modification. The granting of modifications in the quarter ending March 31, 2022 did not have any material impact on the ACL. The following tables provide information related to loans modified during the quarter ended March 31, 2022 to borrowers experiencing financial difficulty, disaggregated by class of financing receivable and type of concession granted:

(in thousands)Significant Payment Delay
Loan TypeAmortized Cost Basis at March 31, 2022% of Total Class of Financing Receivable
Single family$153 0.02 %
(in thousands)Term Extension
Loan TypeAmortized Cost Basis at March 31, 2022% of Total Class of Financing Receivable
Single family$37 — %
(in thousands)Interest Rate Reduction and Term Extension
Loan TypeAmortized Cost Basis at March 31, 2022% of Total Class of Financing Receivable
Single family$1,110 0.15 %

(in thousands)Significant Payment Delay and Term Extension
Loan TypeAmortized Cost Basis at March 31, 2022% of Total Class of Financing Receivable
Single family$6,397 0.84 %
Home equity and other52 0.02 %

(in thousands)Interest Rate Reduction, Significant Payment Delay and Term Extension
Loan TypeAmortized Cost Basis at March 31, 2022% of Total Class of Financing Receivable
Single family$5,762 0.76 %

The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty:

Loan TypeFinancial Effect of:
Interest Rate Reduction
Single family
Reduced weighted-average contractual interest rate from 4.28% to 3.25%.
Significant Payment Delay
Single family
Provided payment deferrals to borrowers. A weighted average 0.3% of loan balances were capitalized and added to the remaining term of the loan.
Home equity and other
Provided payment deferrals to borrowers. A weighted average 6.3% of loan balances were capitalized and added to the remaining term of the loan.
Term Extension
Single family
Added a weighted average 3.2 years to the life of loans, which reduced the monthly payment amounts to the borrowers.
Home equity and other
Added a weighted average 16.1 years to the life of loans, which reduced the monthly payment amounts to the borrowers.