The Company’s held-for-investment loan portfolio includes originated and purchased loans. Originated and purchased loans with no evidence of credit deterioration at their acquisition date are referred to collectively as non-PCI loans. PCI loans are loans acquired with evidence of credit deterioration since their origination and for which it is probable at the acquisition date that the Company would be unable to collect all contractually required payments. PCI loans are accounted for under ASC Subtopic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. The Company has elected to account for PCI loans on a pool level basis under ASC 310-30 at the time of acquisition.




($ in thousands)	June 30, 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	$	12,401,090		$	1,877		$	12,402,967		$	12,054,818		$	2,152		$	12,056,970
CRE	9,722,582			145,851			9,868,433			9,284,583			165,252			9,449,835
Multifamily residential	2,347,751			24,594			2,372,345			2,246,506			34,526			2,281,032
Construction and land	674,757			41			674,798			538,752			42			538,794
Total commercial	25,146,180			172,363			25,318,543			24,124,659			201,972			24,326,631
Consumer:
Single-family residential	6,403,628			91,254			6,494,882			5,939,258			97,196			6,036,454
HELOCs	1,567,900			7,250			1,575,150			1,681,979			8,855			1,690,834
Other consumer	341,802			—			341,802			331,270			—			331,270
Total consumer	8,313,330			98,504			8,411,834			7,952,507			106,051			8,058,558
Total loans held-for-investment	$	33,459,510		$	270,867		$	33,730,377		$	32,077,166		$	308,023		$	32,385,189
Allowance for loan losses	(330,620		)	(5		)	(330,625		)	(311,300		)	(22		)	(311,322		)
Loans held-for-investment, net	$	33,128,890		$	270,862		$	33,399,752		$	31,765,866		$	308,001		$	32,073,867

The C&I loan portfolio, which is comprised of commercial business and trade finance loans, provides financing to businesses in a wide spectrum of industries. The CRE loan portfolio consists of income producing real estate loans that are either owner occupied, or non-owner occupied where 50% or more of the debt service for the loan is primarily provided by unaffiliated rental income from a third party. The multifamily residential loan portfolio is largely comprised of loans secured by smaller multifamily properties ranging from five to 15 units in the Bank’s primary lending areas. Construction loans mainly provide construction financing for hotels, offices and industrial projects.

In the consumer portfolio, the Company offers single-family residential loans and HELOCs through a variety of mortgage loan programs. A substantial number of these loans are originated through a reduced documentation loan program, in which a substantial down payment is required, resulting in a low loan-to-value ratio at origination, typically 60% or less. The Company is in a first lien position for many of these reduced documentation single-family residential loans and HELOCs. These loans have historically experienced low delinquency and default rates. Other consumer loans are mainly comprised of insurance premium financing loans.

All loans are subject to the Company’s internal and external credit review and monitoring. For the commercial portfolio, loans are risk rated based on an analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of all repayment sources, the borrower’s current payment performance or delinquency, current financial and liquidity status, and all other relevant information. For the majority of the consumer portfolio, payment performance or delinquency is the driving indicator for the risk ratings. Risk ratings are the overall credit quality indicator for the Company and the credit quality indicator is utilized for estimating the appropriate allowance for loan losses. The risk rating system classifies loans within the following categories: Pass, Watch, Special Mention, Substandard, Doubtful and Loss. The risk ratings reflect the relative strength of the repayment sources.

Pass and Watch loans are loans that have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special Mention loans are loans that have potential weaknesses that warrant closer attention by management. Special Mention is a transitory grade. If the potential weaknesses are resolved, a loan is upgraded to a Pass or Watch grade. If negative trends in the borrower’s financial status or other information indicate that the sources of repayment may become inadequate, a loan is downgraded to a Substandard grade. Substandard loans have well-defined weaknesses that may jeopardize the full and timely repayment of the loan. Substandard loans have the distinct possibility of loss, if the deficiencies are not corrected. When management has assessed that there is potential for loss, but a distinct possibility of loss is not yet recognizable, the loan remains classified as Substandard grade. Doubtful loans are loans that have insufficient sources of repayment and a high probability of loss. Loss loans are loans that are uncollectible and of such little value that they are no longer considered bankable assets. These internal risk ratings are reviewed routinely and adjusted based on changes in the borrowers’ financial status and the loans’ collectability.




($ in thousands)	June 30, 2019
($ in thousands)	Pass/Watch		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
Commercial:
C&I	$	11,789,639	$	368,328	$	231,235	$	11,888	$	12,401,090
CRE	9,531,912		100,410		90,260		—		9,722,582
Multifamily residential	2,318,019		20,380		9,352		—		2,347,751
Construction and land	620,665		20,463		33,629		—		674,757
Total commercial	24,260,235		509,581		364,476		11,888		25,146,180
Consumer:
Single-family residential	6,385,059		1,471		17,098		—		6,403,628
HELOCs	1,550,377		3,707		13,816		—		1,567,900
Other consumer	325,289		14,009		2,504		—		341,802
Total consumer	8,260,725		19,187		33,418		—		8,313,330
Total	$	32,520,960	$	528,768	$	397,894	$	11,888	$	33,459,510




($ 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




($ in thousands)	June 30, 2019
($ in thousands)	Pass/Watch		Special Mention		Substandard		Doubtful		Total PCI Loans
Commercial:
C&I	$	1,877	$	—	$	—	$	—	$	1,877
CRE	127,083		6		18,762		—		145,851
Multifamily residential	23,856		—		738		—		24,594
Construction and land	41		—		—		—		41
Total commercial	152,857		6		19,500		—		172,363
Consumer:
Single-family residential	89,623		764		867		—		91,254
HELOCs	6,868		—		382		—		7,250
Total consumer	96,491		764		1,249		—		98,504
Total ⁽¹⁾	$	249,348	$	770	$	20,749	$	—	$	270,867




($ 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

Non-PCI loans that are 90 or more days past due are generally placed on nonaccrual status, unless the loan is well-collateralized or guaranteed by government agencies, and in the process of collection. Non-PCI loans that are less than 90 days past due but have identified deficiencies, such as when the full collection of principal or interest becomes uncertain, are also placed on nonaccrual status. The following tables present the aging analysis on non-PCI loans as of June 30, 2019 and December 31, 2018:




($ in thousands)	June 30, 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	$	11,878	$	6,176	$	18,054	$	36,208	$	36,942	$	73,150	$	12,309,886	$	12,401,090
CRE	11,099		70		11,169		3,038		17,876		20,914		9,690,499		9,722,582
Multifamily residential	386		—		386		1,013		14		1,027		2,346,338		2,347,751
Construction and land	—		—		—		—		—		—		674,757		674,757
Total commercial	23,363		6,246		29,609		40,259		54,832		95,091		25,021,480		25,146,180
Consumer:
Single-family residential	18,052		2,397		20,449		712		12,363		13,075		6,370,104		6,403,628
HELOCs	6,116		4,968		11,084		57		7,287		7,344		1,549,472		1,567,900
Other consumer	4		14		18		—		2,504		2,504		339,280		341,802
Total consumer	24,172		7,379		31,551		769		22,154		22,923		8,258,856		8,313,330
Total	$	47,535	$	13,625	$	61,160	$	41,028	$	76,986	$	118,014	$	33,280,336	$	33,459,510




($ 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

For information on the policy for recording payments received and resuming accrual of interest on non-PCI loans that are placed on nonaccrual status, see Note 1 — Summary of Significant Accounting Policies — Loans Held-for-Investment to the Consolidated Financial Statements of the Company’s 2018 Form 10-K.

PCI loans are excluded from the above aging analysis tables as the Company has elected to account for these loans on a pool level basis under ASC 310-30 at the time of acquisition. Refer to the discussion on PCI loans within this Note for additional details on interest income recognition. As of June 30, 2019 and December 31, 2018, PCI loans on nonaccrual status totaled $3.5 million and $4.0 million, respectively.

The Company commences the foreclosure process on consumer mortgage loans when a borrower becomes 120 days delinquent in accordance with Consumer Finance Protection Bureau guidelines. As of June 30, 2019 and December 31, 2018, consumer mortgage loans of $5.8 million and $3.0 million, respectively, were secured by residential real estate properties, for which formal foreclosure proceedings were in process in accordance with local requirements of the applicable jurisdictions. As of both June 30, 2019 and December 31, 2018, no foreclosed residential real estate property was included in total net OREO of $130 thousand and $133 thousand, respectively.

Potential troubled debt restructurings (“TDRs”) are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty. A TDR is a modification of the terms of a loan when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not have otherwise considered.




($ in thousands)	Loans Modified as TDRs During the Three Months Ended June 30,
	2019							2018
	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment ⁽¹⁾		Financial Impact ⁽²⁾		Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment ⁽¹⁾		Financial Impact ⁽²⁾
Commercial:
C&I	6	$	48,099	$	48,054	$	5,869	—	$	—	$	—	$	—
CRE	—	$	—	$	—	$	—	1	$	750	$	837	$	—
Consumer:
Single-family residential	1	$	220	$	219	$	—	2	$	405	$	404	$	(26	)
HELOCs	—	$	—	$	—	$	—	2	$	1,546	$	1,536	$	—




($ in thousands)	Loans Modified as TDRs During the Six Months Ended June 30,
	2019							2018
	Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment ⁽¹⁾		Financial Impact ⁽²⁾		Number of Loans	Pre- Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment ⁽¹⁾		Financial Impact ⁽²⁾
Commercial:
C&I	9	$	77,250	$	77,486	$	5,929	—	$	—	$	—	$	—
CRE	—	$	—	$	—	$	—	1	$	750	$	837	$	—
Consumer:
Single-family residential	1	$	220	$	219	$	—	2	$	405	$	404	$	(26	)
HELOCs	—	$	—	$	—	$	—	2	$	1,546	$	1,536	$	—




($ in thousands)	Modification Type During the Three Months Ended June 30,
	2019								2018
	Principal ⁽¹⁾		Interest Rate Reduction		Other ⁽²⁾		Total		Principal ⁽¹⁾		Interest Rate Reduction		Other		Total
Commercial:
C&I	$	9,909	$	—	$	38,145	$	48,054	$	—	$	—	$	—	$	—
CRE	—		—		—		—		—		837		—		837
Total commercial	9,909		—		38,145		48,054		—		837		—		837
Consumer:
Single-family residential	—		—		219		219		65		—		339		404
HELOCs	—		—		—		—		1,464		—		72		1,536
Total consumer	—		—		219		219		1,529		—		411		1,940
Total	$	9,909	$	—	$	38,364	$	48,273	$	1,529	$	837	$	411	$	2,777




($ in thousands)	Modification Type During the Six Months Ended June 30,
	2019								2018
	Principal ⁽¹⁾		Interest Rate Reduction		Other ⁽²⁾		Total		Principal ⁽¹⁾		Interest Rate Reduction		Other		Total
Commercial:
C&I	$	39,341	$	—	$	38,145	$	77,486	$	—	$	—	$	—	$	—
CRE	—		—		—		—		—		837		—		837
Total commercial	39,341		—		38,145		77,486		—		837		—		837
Consumer:
Single-family residential	—		—		219		219		65		—		339		404
HELOCs	—		—		—		—		1,464		—		72		1,536
Total consumer	—		—		219		219		1,529		—		411		1,940
Total	$	39,341	$	—	$	38,364	$	77,705	$	1,529	$	837	$	411	$	2,777

Subsequent to restructuring, if a TDR that becomes delinquent, generally beyond 90 days past due, it is considered to be in default. Because TDRs are individually evaluated for impairment under the specific reserve methodology, subsequent defaults do not generally have a significant additional impact on the allowance for loan losses. The following tables present information on loans modified as TDRs within the previous 12 months, which have subsequently defaulted during the three and six months ended June 30, 2019 and 2018, and were still in default at the respective period end:




($ in thousands)	June 30, 2019
($ in thousands)	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Commercial:
C&I	$	163,004	$	105,843	$	37,277	$	143,120	$	14,137
CRE	33,071		25,351		1,594		26,945		134
Multifamily residential	5,761		2,402		2,851		5,253		64
Total commercial	201,836		133,596		41,722		175,318		14,335
Consumer:
Single-family residential	22,234		3,940		16,950		20,890		48
HELOCs	9,972		4,775		5,158		9,933		5
Other consumer	2,504		—		2,504		2,504		2,500
Total consumer	34,710		8,715		24,612		33,327		2,553
Total non-PCI impaired loans	$	236,546	$	142,311	$	66,334	$	208,645	$	16,888




($ 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




($ in thousands)	Three Months Ended June 30,								Six Months Ended June 30,
	2019				2018				2019				2018
	Average Recorded Investment		Recognized Interest Income ⁽¹⁾		Average Recorded Investment		Recognized Interest Income ⁽¹⁾		Average Recorded Investment		Recognized Interest Income ⁽¹⁾		Average Recorded Investment		Recognized Interest Income ⁽¹⁾
Commercial:
C&I	$	182,689	$	1,081	$	103,767	$	95	$	189,553	$	1,816	$	112,193	$	357
CRE	29,241		135		34,547		116		31,456		249		35,602		259
Multifamily residential	5,852		61		9,358		52		5,883		121		11,141		134
Construction and land	—		—		3,973		—		—		—		3,973		—
Total commercial	217,782		1,277		151,645		263		226,892		2,186		162,909		750
Consumer:
Single-family residential	23,247		129		18,852		115		24,865		258		19,331		228
HELOCs	13,564		38		9,496		18		15,321		56		10,897		33
Other consumer	2,515		—		2,491		—		2,526		—		2,491		—
Total consumer	39,326		167		30,839		133		42,712		314		32,719		261
Total non-PCI impaired loans	$	257,108	$	1,444	$	182,484	$	396	$	269,604	$	2,500	$	195,628	$	1,011




($ in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
	2019			2018			2019			2018
Non-PCI Loans
Allowance for non-PCI loans, beginning of period	$	317,880		$	297,607		$	311,300		$	287,070
Provision for loan losses on non-PCI loans	20,740			15,139			41,388			35,072
Gross charge-offs:
Commercial:
C&I	(11,745		)	(13,534		)	(28,989		)	(31,979		)
Consumer:
Single-family residential	—			—			—			(1		)
Other consumer	(14		)	(162		)	(28		)	(179		)
Total gross charge-offs	(11,759		)	(13,696		)	(29,017		)	(32,159		)
Gross recoveries:
Commercial:
C&I	1,713			1,151			3,964			8,430
CRE	1,837			2			2,059			429
Multifamily residential	53			1,061			334			1,394
Construction and land	439			258			502			693
Consumer:
Single-family residential	72			629			74			813
HELOCs	—			—			2			—
Other consumer	7			—			7			1
Total gross recoveries	4,121			3,101			6,942			11,760
Net charge-offs	(7,638		)	(10,595		)	(22,075		)	(20,399		)
Foreign currency translation adjustments	(362		)	(640		)	7			(232		)
Allowance for non-PCI loans, end of period	330,620			301,511			330,620			301,511
PCI Loans
Allowance for PCI loans, beginning of period	14			47			22			58
Reversal of loan losses on PCI loans	(9		)	(8		)	(17		)	(19		)
Allowance for PCI loans, end of period	5			39			5			39
Allowance for loan losses	$	330,625		$	301,550		$	330,625		$	301,550

For further information on accounting policies and the methodologies used to estimate the allowance for credit losses and loan charge-offs, see Note 1 — Summary of Significant Accounting Policies — Allowance for Credit Losses to the Consolidated Financial Statements of the Company’s 2018 Form 10-K.




($ in thousands)	Three Months Ended June 30,					Six Months Ended June 30,
($ in thousands)	2019			2018		2019		2018
Allowance for unfunded credit reserves, beginning of period	$	14,505		$	13,614	$	12,566	$	13,318
(Reversal of) provision for unfunded credit reserves	(1,486		)	405		453		701
Allowance for unfunded credit reserves, end of period	$	13,019		$	14,019	$	13,019	$	14,019

The allowance for unfunded credit reserves is maintained at a level management believes to be sufficient to absorb estimated probable losses related to unfunded credit facilities. The allowance for unfunded credit reserves is included in Accrued expenses and other liabilities on the Consolidated Balance Sheet. See Note 12 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-Q for additional information related to unfunded credit reserves.




($ in thousands)	June 30, 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	$	14,137	$	134	$	64	$	—	$	48	$	5	$	2,500	$	16,888
Collectively evaluated for impairment	191,366		40,378		18,510		22,961		32,715		6,172		1,630		313,732
Acquired with deteriorated credit quality	—		5		—		—		—		—		—		5
Total	$	205,503	$	40,517	$	18,574	$	22,961	$	32,763	$	6,177	$	4,130	$	330,625

Recorded investment in loans
Individually evaluated for impairment	$	143,120	$	26,945	$	5,253	$	—	$	20,890	$	9,933	$	2,504	$	208,645
Collectively evaluated for impairment	12,257,970		9,695,637		2,342,498		674,757		6,382,738		1,557,967		339,298		33,250,865
Acquired with deteriorated credit quality ⁽¹⁾	1,877		145,851		24,594		41		91,254		7,250		—		270,867
Total ⁽¹⁾	$	12,402,967	$	9,868,433	$	2,372,345	$	674,798	$	6,494,882	$	1,575,150	$	341,802	$	33,730,377




($ 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

At the date of acquisition, PCI loans are pooled and accounted for at fair value, which represents the discounted value of the expected cash flows of the loan portfolio. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flows expectation. The cash flows expected over the life of the pools are estimated by an internal cash flows model that projects cash flows and calculates the carrying values of the pools, book yields, effective interest income and impairment, if any, based on pool level events. Assumptions as to cumulative loss rates, loss curves and prepayment speeds are utilized to calculate the expected cash flows. The amount of expected cash flows over the initial investment in the loan represents the “accretable yield,” which is recognized as interest income on a level yield basis over the life of the loan. Projected loss rates and prepayment speeds affect the estimated life of PCI loans, which may change the amount of interest income, and possibly principal, expected to be collected. The excess of total contractual cash flows over the cash flows expected to be collected at acquisition, considering the impact of prepayments, is referred to as the “nonaccretable difference.”




($ in thousands)	Three Months Ended June 30,						Six Months Ended June 30,
($ in thousands)	2019			2018			2019			2018
Accretable yield for PCI loans, beginning of period	$	68,861		$	95,864		$	74,870		$	101,977
Accretion	(5,806		)	(11,084		)	(12,007		)	(20,218		)
Changes in expected cash flows	998			272			1,190			3,293
Accretable yield for PCI loans, end of period	$	64,053		$	85,052		$	64,053		$	85,052

At the time of commitment to originate or purchase a loan, the loan is determined to be held for investment if it is the Company’s intent to hold the loan to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s evaluation processes, including asset/liability and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value. As of June 30, 2019, loans held-for-sale of $3.9 million were comprised of C&I loans. In comparison, as of December 31, 2018, loans held-for-sale of $275 thousand consisted of single-family residential loans.

The Company purchases and sells loans in the secondary market in the ordinary course of business. From time to time, purchased loans may be transferred from held-for-investment to held-for-sale, and write-downs to allowance for loan losses are recorded, when appropriate. The following tables present information about loan purchased for the held-for-investment portfolio, reclassification of loans from held-for-investment to held-for-sale, and sales during the three and six months ended June 30, 2019 and 2018:




($ in thousands)	Three Months Ended June 30, 2019
	Commercial								Consumer		Total
	C&I		CRE		Multifamily Residential		Construction and Land		Single-Family Residential		Total
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	79,593	$	—	$	—	$	1,573	$	—	$	81,166
Sales ^(2)(3)(4)	$	76,031	$	—	$	—	$	1,573	$	1,172	$	78,776
Purchases ⁽⁵⁾	$	159,100	$	—	$	1,734	$	—	$	17,637	$	178,471




($ in thousands)	Three Months Ended June 30, 2018
	Commercial								Consumer		Total
	C&I		CRE		Multifamily Residential		Construction and Land		Single-Family Residential		Total
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	99,449	$	30,415	$	—	$	—	$	—	$	129,864
Sales ^(2)(3)(4)	$	140,326	$	30,415	$	—	$	—	$	8,175	$	178,916
Purchases ⁽⁵⁾	$	285,615	$	—	$	3,249	$	—	$	20,912	$	309,776




($ in thousands)	Six Months Ended June 30, 2019
	Commercial								Consumer		Total
	C&I		CRE		Multifamily Residential		Construction and Land		Single-Family Residential		Total
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	155,166	$	16,655	$	—	$	1,573	$	—	$	173,394
Sales ^(2)(3)(4)	$	151,677	$	16,655	$	—	$	1,573	$	3,614	$	173,519
Purchases ⁽⁵⁾	$	266,294	$	—	$	5,952	$	—	$	54,039	$	326,285




($ in thousands)	Six Months Ended June 30, 2018
	Commercial								Consumer		Total
	C&I		CRE		Multifamily Residential		Construction and Land		Single-Family Residential		Total
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	245,840	$	39,791	$	—	$	—	$	—	$	285,631
Sales ^(2)(3)(4)	$	242,691	$	39,791	$	—	$	—	$	10,721	$	293,203
Purchases ⁽⁵⁾	$	350,362	$	—	$	3,435	$	—	$	36,025	$	389,822