Loans Receivable and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2020

Loans and Leases Receivable Disclosure [Abstract]

Schedule of composition of loans held-for-investment

The following table presents the composition of the Company’s loans held-for-investment as of March 31, 2020 and December 31, 2019:




($ in thousands)	March 31, 2020			December 31, 2019
($ in thousands)	Amortized Cost ⁽¹⁾			Non-PCI Loans ⁽¹⁾			PCI Loans		Total ⁽¹⁾
Commercial:
C&I	$	12,590,764		$	12,149,121		$	1,810	$	12,150,931
CRE:
CRE	10,682,242			10,165,247			113,201		10,278,448
Multifamily residential	2,902,601			2,834,212			22,162		2,856,374
Construction and land	606,209			628,459			40		628,499
Total CRE	14,191,052			13,627,918			135,403		13,763,321
Total commercial	26,781,816			25,777,039			137,213		25,914,252
Consumer:
Residential mortgage:
Single-family residential	7,403,723			7,028,979			79,611		7,108,590
HELOCs	1,452,862			1,466,736			6,047		1,472,783
Total residential mortgage	8,856,585			8,495,715			85,658		8,581,373
Other consumer	254,992			282,914			—		282,914
Total consumer	9,111,577			8,778,629			85,658		8,864,287
Total loans held-for-investment	$	35,893,393		$	34,555,668		$	222,871	$	34,778,539
Allowance for loan losses	(557,003		)	(358,287		)	—		(358,287		)
Loans held-for-investment, net	$	35,336,390		$	34,197,381		$	222,871	$	34,420,252

(1)

Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(50.3) million and $(43.2) million as of March 31, 2020 and December 31, 2019, respectively.

Schedule of loans held-for-investment by loan portfolio segments, internal risk ratings and vintage year/non-PCI and PCI loans by portfolio segments

The following table summarizes the Company’s loans held-for-investment as of March 31, 2020, presented by loan portfolio segments, internal risk ratings and vintage year. The vintage year is the year of origination, renewal or major modification.




($ in thousands)	March 31, 2020
	Term Loans												Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term Loans Amortized Cost Basis		Total
	Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior
Commercial:
C&I:
Pass	$	884,043	$	2,320,726	$	830,428	$	381,798	$	94,032	$	411,215	$	6,945,982	$	10,081	$	11,878,305
Special mention	21,388		98,629		16,948		27,701		1,064		10,600		218,835		—		395,165
Substandard	4,324		65,448		27,200		40,985		13,431		2,196		147,012		—		300,596
Doubtful	—		15,654		—		—		1,044		—		—		—		16,698
Total C&I	909,755		2,500,457		874,576		450,484		109,571		424,011		7,311,829		10,081		12,590,764
CRE:
Pass	1,023,184		2,994,402		2,319,358		1,317,389		739,774		1,926,748		157,889		10,775		10,489,519
Special mention	3,636		66,004		15,438		19,896		674		10,518		—		—		116,166
Substandard	5,540		29,695		2,415		18,900		520		19,487		—		—		76,557
Total CRE	1,032,360		3,090,101		2,337,211		1,356,185		740,968		1,956,753		157,889		10,775		10,682,242
Multifamily residential:
Pass	293,032		1,091,261		489,564		408,783		212,174		372,554		5,386		—		2,872,754
Special mention	—		21,164		1,893		—		—		521		—		—		23,578
Substandard	—		—		285		—		—		5,984		—		—		6,269
Total multifamily residential	293,032		1,112,425		491,742		408,783		212,174		379,059		5,386		—		2,902,601
Construction and land:
Pass	67,143		316,396		159,847		15,630		21,048		1,183		—		—		581,247
Substandard	1,608		3,662		—		—		—		19,692		—		—		24,962
Total construction and land	68,751		320,058		159,847		15,630		21,048		20,875		—		—		606,209
Total CRE	1,394,143		4,522,584		2,988,800		1,780,598		974,190		2,356,687		163,275		10,775		14,191,052
Total commercial	2,303,898		7,023,041		3,863,376		2,231,082		1,083,761		2,780,698		7,475,104		20,856		26,781,816
Consumer:
Single-family residential:
Pass	612,040		2,043,504		1,775,928		1,218,685		624,427		1,099,351		—		—		7,373,935
Special mention	—		238		1,639		1,253		2,811		6,796		—		—		12,737
Substandard	—		839		1,733		3,180		1,158		10,141		—		—		17,051
Total single-family residential mortgage	612,040		2,044,581		1,779,300		1,223,118		628,396		1,116,288		—		—		7,403,723
HELOCs:
Pass	—		—		3,182		5,980		6,525		19,809		1,260,844		142,090		1,438,430
Special mention	—		—		700		—		165		1,945		571		605		3,986
Substandard	—		150		289		2,611		1,145		4,789		—		1,462		10,446
Total HELOCs	—		150		4,171		8,591		7,835		26,543		1,261,415		144,157		1,452,862
Total residential mortgage	612,040		2,044,731		1,783,471		1,231,709		636,231		1,142,831		1,261,415		144,157		8,856,585
Other consumer:
Pass	3,951		4,440		2,637		1,885		18		198,988		40,556		—		252,475
Special mention	11		—		—		—		—		—		—		—		11
Substandard	—		—		—		2,491		—		3		12		—		2,506
Total other consumer	3,962		4,440		2,637		4,376		18		198,991		40,568		—		254,992
Total consumer	616,002		2,049,171		1,786,108		1,236,085		636,249		1,341,822		1,301,983		144,157		9,111,577
Total	$	2,919,900	$	9,072,212	$	5,649,484	$	3,467,167	$	1,720,010	$	4,122,520	$	8,777,087	$	165,013	$	35,893,393

Revolving loans that are converted to term loans presented in the table above are excluded from the term loans by vintage year columns. During the three months ended March 31, 2020, $31.3 million of HELOCs converted to term loans and there were no conversions for C&I or CRE loans.

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




($ in thousands)	December 31, 2019
($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Total Non-PCI Loans
Commercial:
C&I	$	11,423,094	$	406,543	$	302,509	$	16,975	$	12,149,121
CRE:
CRE	10,003,749		83,683		77,815		—		10,165,247
Multifamily residential	2,806,475		20,406		7,331		—		2,834,212
Construction and land	603,447		—		25,012		—		628,459
Total CRE	13,413,671		104,089		110,158		—		13,627,918
Total commercial	24,836,765		510,632		412,667		16,975		25,777,039
Consumer:
Residential mortgage:
Single-family residential	7,012,522		2,278		14,179		—		7,028,979
HELOCs	1,453,207		2,787		10,742		—		1,466,736
Total residential mortgage	8,465,729		5,065		24,921		—		8,495,715
Other consumer	280,392		5		2,517		—		282,914
Total consumer	8,746,121		5,070		27,438		—		8,778,629
Total	$	33,582,886	$	515,702	$	440,105	$	16,975	$	34,555,668




($ in thousands)	December 31, 2019
($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Total PCI Loans
Commercial:
C&I	$	1,810	$	—	$	—	$	—	$	1,810
CRE:
CRE	102,257		—		10,944		—		113,201
Multifamily residential	22,162		—		—		—		22,162
Construction and land	40		—		—		—		40
Total CRE	124,459		—		10,944		—		135,403
Total commercial	126,269		—		10,944		—		137,213
Consumer:
Residential mortgage:
Single-family residential	79,517		—		94		—		79,611
HELOCs	5,849		—		198		—		6,047
Total residential mortgage	85,366		—		292		—		85,658
Total consumer	85,366		—		292		—		85,658
Total ⁽¹⁾	$	211,635	$	—	$	11,236	$	—	$	222,871

(1)

Loans net of ASC 310-10 discount.

Schedule of aging analysis of loans

The following table presents the aging analysis of total loans held-for-investment as of March 31, 2020:




($ in thousands)	March 31, 2020
($ 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 Loans
Commercial:
C&I	$	15,168	$	3,217	$	18,385	$	59,110	$	29,969	$	89,079	$	12,483,300	$	12,590,764
CRE:
CRE	6,050		936		6,986		474		5,824		6,298		10,668,958		10,682,242
Multifamily residential	510		366		876		518		285		803		2,900,922		2,902,601
Construction and land	—		—		—		—		—		—		606,209		606,209
Total CRE	6,560		1,302		7,862		992		6,109		7,101		14,176,089		14,191,052
Total commercial	21,728		4,519		26,247		60,102		36,078		96,180		26,659,389		26,781,816
Consumer:
Residential mortgage:
Single-family residential	45,926		12,737		58,663		1,312		16,224		17,536		7,327,524		7,403,723
HELOCs	10,654		3,980		14,634		444		10,002		10,446		1,427,782		1,452,862
Total residential mortgage	56,580		16,717		73,297		1,756		26,226		27,982		8,755,306		8,856,585
Other consumer	34		29		63		—		2,506		2,506		252,423		254,992
Total consumer	56,614		16,746		73,360		1,756		28,732		30,488		9,007,729		9,111,577
Total	$	78,342	$	21,265	$	99,607	$	61,858	$	64,810	$	126,668	$	35,667,118	$	35,893,393

The following table presents the aging analysis of non-PCI loans as of December 31, 2019:




($ in thousands)	December 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	$	31,121	$	17,034	$	48,155	$	31,084	$	43,751	$	74,835	$	12,026,131	$	12,149,121
CRE:
CRE	22,830		1,977		24,807		540		15,901		16,441		10,123,999		10,165,247
Multifamily residential	198		531		729		534		285		819		2,832,664		2,834,212
Construction and land	—		—		—		—		—		—		628,459		628,459
Total CRE	23,028		2,508		25,536		1,074		16,186		17,260		13,585,122		13,627,918
Total commercial	54,149		19,542		73,691		32,158		59,937		92,095		25,611,253		25,777,039
Consumer:
Residential mortgage:
Single-family residential	15,443		5,074		20,517		1,964		12,901		14,865		6,993,597		7,028,979
HELOCs	4,273		2,791		7,064		1,448		9,294		10,742		1,448,930		1,466,736
Total residential mortgage	19,716		7,865		27,581		3,412		22,195		25,607		8,442,527		8,495,715
Other consumer	6		5		11		—		2,517		2,517		280,386		282,914
Total consumer	19,722		7,870		27,592		3,412		24,712		28,124		8,722,913		8,778,629
Total	$	73,871	$	27,412	$	101,283	$	35,570	$	84,649	$	120,219	$	34,334,166	$	34,555,668

Schedule of amortized cost of loans on nonaccrual status with no related allowance for loan losses

The following table presents amortized cost of loans on nonaccrual status for which there was no related allowance for loan losses as of March 31, 2020:




($ in thousands)	March 31, 2020
Commercial:
C&I	$	64,431
CRE:
CRE	5,253
Total CRE	5,253
Total commercial	69,684
Consumer:
Residential mortgage:
Single-family residential	8,718
HELOCs	6,511
Total residential mortgage	15,229
Other consumer	2,491
Total consumer	17,720
Total nonaccrual loans with no related allowance for loan losses	$	87,404

Summary of additions and modifications to troubled debt restructurings

The following table presents the additions to TDRs for the three months ended March 31, 2020 and 2019:




($ in thousands)	Loans Modified as TDRs During the Three Months Ended March 31,
	2020							2019
	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	3	$	16,604	$	15,735	$	98	3	$	29,152	$	29,176	$	60
Total	3	$	16,604	$	15,735	$	98	3	$	29,152	$	29,176	$	60


(1)	Includes subsequent payments after modification and reflects the balance as of March 31, 2020 and 2019.


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

The following table presents the TDR post-modification outstanding balances for the three months ended March 31, 2020 and 2019 by modification type:




($ in thousands)	Modification Type During the Three Months Ended March 31,
	2020						2019
	Principal ⁽¹⁾		Principal and Interest ⁽²⁾		Total		Principal ⁽¹⁾		Principal and Interest ⁽²⁾		Total
Commercial:
C&I	$	4,564	$	11,171	$	15,735	$	29,176	$	—	$	29,176
Total	$	4,564	$	11,171	$	15,735	$	29,176	$	—	$	29,176


(1)	Includes forbearance payments, term extensions and principal deferments that modify the terms of the loan from principal and interest payments to interest payments only.

(2)

Includes principal and interest deferments or reductions.

Summary of TDR loans subsequently defaulted

The following table presents information on loans for which a subsequent payment default occurred during the three months ended March 31, 2019, which had been modified as TDR within the previous 12 months of its default, and were still in default as of March 31, 2019:




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

Summary of non-PCI impaired loans

The following table presents information about non-PCI impaired loans as of December 31, 2019:




($ in thousands)	December 31, 2019
($ in thousands)	Unpaid Principal Balance		Recorded Investment With No Allowance		Recorded Investment With Allowance		Total Recorded Investment		Related Allowance
Commercial:
C&I	$	174,656	$	73,956	$	40,086	$	114,042	$	2,881
CRE:
CRE	27,601		20,098		1,520		21,618		97
Multifamily residential	4,965		1,371		3,093		4,464		55
Construction and land	19,696		19,691		—		19,691		—
Total CRE	52,262		41,160		4,613		45,773		152
Total commercial	226,918		115,116		44,699		159,815		3,033
Consumer:
Residential mortgage:
Single-family residential	23,626		8,507		13,704		22,211		35
HELOCs	13,711		6,125		7,449		13,574		8
Total residential mortgage	37,337		14,632		21,153		35,785		43
Other consumer	2,517		—		2,517		2,517		2,517
Total consumer	39,854		14,632		23,670		38,302		2,560
Total non-PCI impaired loans	$	266,772	$	129,748	$	68,369	$	198,117	$	5,593

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:




($ in thousands)	Three Months Ended March 31, 2019
($ in thousands)	Average Recorded Investment		Recognized Interest Income ⁽¹⁾
Commercial:
C&I	$	93,391	$	735
CRE:
CRE	30,827		114
Multifamily residential	5,721		61
Total CRE	36,548		175
Total commercial	129,939		910
Consumer:
Residential mortgage:
Single-family residential	15,898		128
HELOCs	10,811		18
Total residential mortgage	26,709		146
Other consumer	2,504		—
Total consumer	29,213		146
Total non-PCI impaired loans	$	159,152	$	1,056

(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, 2020:




($ in thousands)	March 31, 2020
	Commercial												Consumer									Total
	C&I			CRE									Residential Mortgage						Other Consumer
	C&I			CRE			Multi-Family Residential			Construction and Land			Single- Family Residential			HELOCs			Other Consumer
Allowance for loan losses, December 31, 2019	$	238,376		$	40,509		$	22,826		$	19,404		$	28,527		$	5,265		$	3,380		$	358,287
Impact of ASU 2016-13 adoption	74,237			72,169			(8,112		)	(9,889		)	(3,670		)	(1,798		)	2,221			125,158
Allowance for loan losses, January 1, 2020	312,613			112,678			14,714			9,515			24,857			3,467			5,601			483,445
Provision for (reversal of ) credit losses	60,618			11,435			1,281			1,482			1,700			412			(2,272		)	74,656
Gross charge-offs	(11,977		)	(954		)	—			—			—			—			(26		)	(12,957		)
Gross recoveries	1,575			9,660			535			21			265			2			1			12,059
Total net charge-offs	(10,402		)	8,706			535			21			265			2			(25		)	(898		)
Foreign currency translation adjustments	(200		)	—			—			—			—			—			—			(200		)
Allowance for loan losses, March 31, 2020	$	362,629		$	132,819		$	16,530		$	11,018		$	26,822		$	3,881		$	3,304		$	557,003

The following table presents a summary of activities in the allowance for unfunded credit commitments for the three months ended March 31, 2020:




($ in thousands)	Three Months Ended March 31, 2020
Unfunded credit facilities
Allowance for unfunded credit commitments, December 31, 2019	$	11,158
Impact of ASU 2016-13 adoption	10,457
Allowance for unfunded credit commitments, January 1, 2020	21,615
Reversal of credit losses	(786		)
Allowance for unfunded credit commitments, March 31, 2020	$	20,829
Total provision for credit losses	$	73,870

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




($ in thousands)		Three Months Ended March 31, 2019
Allowance for non-PCI loans, beginning of period		$	311,300
Provision for loan losses on non-PCI loans	(a)	20,648
Gross charge-offs:
Commercial:
C&I		(17,244		)
Consumer:
Other consumer		(14		)
Total gross charge-offs		(17,258		)
Gross recoveries:
Commercial:
C&I		2,251
CRE:
CRE		222
Multifamily residential		281
Construction and land		63
Total CRE		566
Consumer:
Residential mortgage:
Single-family residential		2
HELOCs		2
Total residential mortgage		4
Total gross recoveries		2,821
Net charge-offs		(14,437		)
Foreign currency translation adjustments		369
Allowance for non-PCI loans, end of period		317,880
PCI Loans
Allowance for PCI loans, beginning of period		22
Reversal of loan losses on PCI loans	(b)	(8		)
Allowance for PCI loans, end of period		14
Allowance for loan losses		$	317,894
Unfunded credit facilities
Allowance for unfunded credit commitments, beginning of period		$	12,566
Provision for unfunded credit commitments	(c)	1,939
Allowance for unfunded credit commitments, ending of period		$	14,505
Total provision for credit losses	(a)+(b)+(c)	$	22,579

Allowance for loan losses and recorded investments by loan type and impairment methodology

The following table presents the Company’s allowance for loan losses and recorded investments by loan type and impairment methodology as of December 31, 2019:




($ in thousands)	December 31, 2019
	Commercial								Consumer						Total
	C&I		CRE						Residential Mortgage				Other Consumer
	C&I		CRE		Multifamily Residential		Construction and Land		Single- Family Residential		HELOCs		Other Consumer
Allowance for loan losses
Individually evaluated for impairment	$	2,881	$	97	$	55	$	—	$	35	$	8	$	2,517	$	5,593
Collectively evaluated for impairment	235,495		40,412		22,771		19,404		28,492		5,257		863		352,694
Acquired with deteriorated credit quality	—		—		—		—		—		—		—		—
Total	$	238,376	$	40,509	$	22,826	$	19,404	$	28,527	$	5,265	$	3,380	$	358,287
Recorded investment in loans
Individually evaluated for impairment	$	114,042	$	21,618	$	4,464	$	19,691	$	22,211	$	13,574	$	2,517	$	198,117
Collectively evaluated for impairment	12,035,079		10,143,629		2,829,748		608,768		7,006,768		1,453,162		280,397		34,357,551
Acquired with deteriorated credit quality ⁽¹⁾	1,810		113,201		22,162		40		79,611		6,047		—		222,871
Total ⁽¹⁾	$	12,150,931	$	10,278,448	$	2,856,374	$	628,499	$	7,108,590	$	1,472,783	$	282,914	$	34,778,539

(1)

Loans net of ASC 310-10 discount.

Summary of changes in accretable yield on PCI loans

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




($ in thousands)	Three Months Ended March 31, 2019
Accretable yield for PCI loans, beginning of period	$	74,870
Accretion	(6,201		)
Changes in expected cash flows	192
Accretable yield for PCI loans, end of period	$	68,861

Schedule of carrying value of loans purchased for the held-for-investment portfolio, loans sold and loans transferred from held-for-investment to held-for-sale at lower of cost or fair value

The following tables provide information about the carrying value of loans purchased for the held-for-investment portfolio, loans sold and loans transferred from held-for-investment to held-for-sale at lower of cost or fair value during the three months ended March 31, 2020 and 2019:




($ in thousands)	Three Months Ended March 31, 2020
	Commercial						Consumer		Total
	C&I		CRE				Residential Mortgage
	C&I		CRE		Multifamily Residential		Single-Family Residential
Loans transferred from held-for-investment to held-for-sale ⁽¹⁾	$	102,973	$	7,250	$	—	$	—	$	110,223
Sales ^(2)(3)(4)	$	102,973	$	7,250	$	—	$	4,642	$	114,865
Purchases ⁽⁵⁾	$	130,583	$	—	$	1,513	$	1,084	$	133,180




($ in thousands)	Three Months Ended March 31, 2019
	Commercial						Consumer		Total
	C&I		CRE				Residential Mortgage
	C&I		CRE		Multifamily Residential		Single-Family Residential
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


(1)	The Company recorded no 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, 2020 and $73 thousand for the same period in 2019.


(2)	Includes originated loans sold of $114.9 million and $76.5 million for the three months ended March 31, 2020 and 2019, respectively. Originated loans sold during each of the three months ended March 31, 2020 and 2019 were primarily C&I loans.


(3)	Includes none and $18.2 million of purchased loans sold in the secondary market for the three months ended March 31, 2020 and 2019, respectively.


(4)	Net gains on sales of loans were $950 thousand and $915 thousand for the three months ended March 31, 2020 and 2019, respectively.

(5)

C&I loan purchases for each of the three months ended March 31, 2020 and 2019 were comprised primarily of syndicated C&I term loans.