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Loans Receivable and Allowance for Credit Losses
 3 Months Ended
Mar. 31, 2024
Loans and Leases Receivable Disclosure [Abstract]  
Loans Receivable and Allowance for Credit Losses Loans Receivable and Allowance for Credit Losses
The following table presents the composition of the Company’s loans held-for-investment outstanding as of March 31, 2024 and December 31, 2023:
($ in thousands)March 31, 2024December 31, 2023
Commercial:
C&I$16,350,191 $16,581,079 
CRE:
CRE14,609,655 14,777,081 
Multifamily residential5,010,245 5,023,163 
Construction and land673,939 663,868 
Total CRE20,293,839 20,464,112 
Total commercial36,644,030 37,045,191 
Consumer:
Residential mortgage:
Single-family residential13,563,738 13,383,060 
HELOCs1,731,233 1,722,204 
Total residential mortgage15,294,971 15,105,264 
Other consumer53,503 60,327 
Total consumer15,348,474 15,165,591 
Total loans held-for-investment (1)
$51,992,504 $52,210,782 
Allowance for loan losses(670,280)(668,743)
Loans held-for-investment, net (1)
$51,322,224 $51,542,039 
(1)Includes $63 million and $71 million of net deferred loan fees and net unamortized premiums as of March 31, 2024 and December 31, 2023, respectively.

Accrued interest receivable on loans held-for-investment was $268 million and $267 million as of March 31, 2024 and December 31, 2023, respectively, and was included in Other assets on the Consolidated Balance Sheet. The interest income reversed was insignificant for both the three months ended March 31, 2024 and 2023. For the Company’s accounting policy on accrued interest receivable related to loans held-for-investment, see Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Loans Held-for-Investment to the Consolidated Financial Statements of the Company’s 2023 Form 10-K. The Company also has loans held-for-sale. For the Company’s accounting policy on loans held-for-sale, refer to Note 1 — Summary of Significant Accounting Policies — Significant Accounting Policies — Loans Held-for-Sale to the Consolidated Financial Statements in the Company’s 2023 Form 10-K.

The Company’s FRBSF and FHLB borrowings are primarily secured by loans held-for-investment. Loans held-for-investment totaling $37.1 billion and $37.2 billion, respectively, were pledged to secure borrowings and provide additional borrowing capacity as of March 31, 2024 and December 31, 2023.

Credit Quality Indicators

All loans are subject to the Company’s credit review and monitoring process. For the commercial loan portfolio, loans are risk rated based on an analysis of the borrower’s current payment performance or delinquency, repayment sources, financial and liquidity factors, including industry and geographic considerations. For the consumer loan portfolio, payment performance or delinquency is typically the driving indicator for risk ratings.

The Company utilizes internal credit risk ratings to assign each individual loan a risk rating of 1 through 10:
•Pass — loans risk rated 1 through 5 are assigned an internal risk rating category of “Pass.” Loans risk rated 1 are typically loans fully secured by cash. Pass loans have sufficient sources of repayment to repay the loan in full, in accordance with all terms and conditions.
•Special mention — loans assigned a risk rating of 6 have potential weaknesses that warrant closer attention by management; these are assigned an internal risk rating category of “Special Mention.”
•Substandard — loans assigned a risk rating of 7 or 8 have well-defined weaknesses that may jeopardize the full and timely repayment of the loan; these are assigned an internal risk rating category of “Substandard.”
•Doubtful — loans assigned a risk rating of 9 have insufficient sources of repayment and a high probability of loss; these are assigned an internal risk rating category of “Doubtful.”
•Loss — loans assigned a risk rating of 10 are uncollectible and of such little value that they are no longer considered bankable assets; these are assigned an internal risk rating category of “Loss.”

Loan exposures categorized as criticized consist of special mention, substandard, doubtful and loss categories. The Company reviews the internal risk ratings of its loan portfolio on a regular basis, and adjusts the ratings based on changes in the borrowers’ financial status and the collectability of the loans.

The following tables summarize the Company’s loans held-for-investment and year-to-date gross write-offs by loan portfolio segments, internal risk ratings and vintage year as of the periods presented. The vintage year is the year of loan origination, renewal or major modification. Revolving loans that are converted to term loans presented in the tables below are excluded from term loans by vintage year columns.
March 31, 2024
Term Loans by Origination Year
($ in thousands)20242023202220212020PriorRevolving Loans
Revolving Loans Converted to Term Loans (1)
Total
Commercial:
C&I:
Pass$494,511 $2,181,627 $1,390,042 $1,162,380 $290,790 $357,396 $9,858,874 $23,801 $15,759,421 
Criticized (accrual)15 80,137 146,122 126,563 8,378 61,936 118,657 — 541,808 
Criticized (nonaccrual)— 15,676 10,179 631 4,193 17,313 970 — 48,962 
Total C&I494,526 2,277,440 1,546,343 1,289,574 303,361 436,645 9,978,501 23,801 16,350,191 
Gross write-offs for the three months ended March 31, 2024 (2)
— 221 11,550 3,047 488 1,528 (56)
(3)
— 16,778 
CRE:
Pass310,715 2,415,104 3,940,346 2,125,414 1,412,088 3,815,741 90,300 48,880 14,158,588 
Criticized (accrual)— 66,187 54,141 26,402 53,926 200,610 — 14,795 416,061 
Criticized (nonaccrual)— 1,750 — — — 33,256 — — 35,006 
Subtotal CRE310,715 2,483,041 3,994,487 2,151,816 1,466,014 4,049,607 90,300 63,675 14,609,655 
Gross write-offs for the three months ended March 31, 2024
— — — — — 2,398 — — 2,398 
Multifamily residential:
Pass43,746 652,947 1,482,963 794,023 645,391 1,329,341 6,831 1,275 4,956,517 
Criticized (accrual)— 13,939 — 31,882 — 3,261 — — 49,082 
Criticized (nonaccrual)— — — — — 4,646 — — 4,646 
Subtotal multifamily residential43,746 666,886 1,482,963 825,905 645,391 1,337,248 6,831 1,275 5,010,245 
Gross write-offs for the three months ended March 31, 2024— — — — — 6 — — 6 
Construction and land:
Pass2,980 266,224 234,093 124,830 1,603 6,290 8,795 — 644,815 
Criticized (accrual)— — 16,888 — — — — — 16,888 
Criticized (nonaccrual)— — 12,236 — — — — — 12,236 
Subtotal construction and land2,980 266,224 263,217 124,830 1,603 6,290 8,795 — 673,939 
Gross write-offs for the three months ended March 31, 2024— — 1,224 — — — — — 1,224 
Total CRE357,441 3,416,151 5,740,667 3,102,551 2,113,008 5,393,145 105,926 64,950 20,293,839 
Total CRE gross write-offs for the three months ended March 31, 2024
— — 1,224 — — 2,404 — — 3,628 
Total commercial$851,967 $5,693,591 $7,287,010 $4,392,125 $2,416,369 $5,829,790 $10,084,427 $88,751 $36,644,030 
Total commercial gross write-offs for the three months ended March 31, 2024 (2)
$— $221 $12,774 $3,047 $488 $3,932 $(56)
(3)
$— $20,406 
March 31, 2024
Term Loans by Origination Year
($ in thousands)20242023202220212020PriorRevolving Loans
Revolving Loans Converted to Term Loans (1)
Total
Consumer:
Residential mortgage:
Single-family residential:
Pass (4)
$547,073 $3,077,628 $3,285,262 $2,236,107 $1,553,848 $2,814,348 $— $— $13,514,266 
Criticized (accrual)— 3,196 — 1,764 3,910 5,583 — — 14,453 
Criticized (nonaccrual) (4)
— 7,860 5,874 3,389 3,718 14,178 — — 35,019 
Subtotal single-family residential mortgage547,073 3,088,684 3,291,136 2,241,260 1,561,476 2,834,109 — — 13,563,738 
HELOCs:
Pass4,798 3,655 3,394 2,817 5,107 9,288 1,561,308 123,131 1,713,498 
Criticized (accrual)— 808 2,435 360 — 670 718 1,246 6,237 
Criticized (nonaccrual)— 65 518 219 — 5,906 — 4,790 11,498 
Subtotal HELOCs4,798 4,528 6,347 3,396 5,107 15,864 1,562,026 129,167 1,731,233 
Total residential mortgage551,871 3,093,212 3,297,483 2,244,656 1,566,583 2,849,973 1,562,026 129,167 15,294,971 
Other consumer:
Pass2,132 632 18,101 134 — 6,861 22,481 — 50,341 
Criticized (accrual)— — — — — — 3,000 — 3,000 
Criticized (nonaccrual)— — — — — — 162 — 162 
Total other consumer2,132 632 18,101 134 — 6,861 25,643 — 53,503 
Gross write-offs for the three months ended March 31, 2024 (2)
— — — — — — 2 — 2 
Total consumer$554,003 $3,093,844 $3,315,584 $2,244,790 $1,566,583 $2,856,834 $1,587,669 $129,167 $15,348,474 
Total consumer gross write-offs for the three months ended March 31, 2024 (2)
$— $— $— $— $— $— $2 $— $2 
Total loans held-for-investment:
Pass$1,405,955 $8,597,817 $10,354,201 $6,445,705 $3,908,827 $8,339,265 $11,548,589 $197,087 $50,797,446 
Criticized (accrual)15 164,267 219,586 186,971 66,214 272,060 122,375 16,041 1,047,529 
Criticized (nonaccrual)— 25,351 28,807 4,239 7,911 75,299 1,132 4,790 147,529 
Total$1,405,970 $8,787,435 $10,602,594 $6,636,915 $3,982,952 $8,686,624 $11,672,096 $217,918 $51,992,504 
Total loans held-for-investment gross write-offs for the three months ended March 31, 2024 (2)
$— $221 $12,774 $3,047 $488 $3,932 $(54)
(3)
$— $20,408 
December 31, 2023
Term Loans by Origination Year
($ in thousands)20232022202120202019PriorRevolving Loans
Revolving Loans Converted to Term Loans (1)
Total
Commercial:
C&I:
Pass$2,314,463 $1,628,560 $1,296,936 $331,982 $245,173 $164,159 $10,053,757 $20,143 $16,055,173 
Criticized (accrual)105,119 67,899 120,574 15,064 40,920 22,098 117,196 — 488,870 
Criticized (nonaccrual)2,104 7,916 131 4,819 2,979 18,137 950 — 37,036 
Total C&I2,421,686 1,704,375 1,417,641 351,865 289,072 204,394 10,171,903 20,143 16,581,079 
Gross write-offs for the year ended December 31, 2023 (2)
350 10,454 424 3,758 9,748 2,648 1,593 — 28,975 
CRE:
Pass2,492,915 4,086,385 2,216,257 1,428,724 1,600,844 2,494,382 92,851 62,771 14,475,129 
Criticized (accrual)36,855 34,485 30,336 48,250 24,437 104,340 — — 278,703 
Criticized (nonaccrual)— — — — 444 22,805 — — 23,249 
Subtotal CRE2,529,770 4,120,870 2,246,593 1,476,974 1,625,725 2,621,527 92,851 62,771 14,777,081 
Gross write-offs for the year ended December 31, 2023 (2)
— — — — — 1,329 — — 1,329 
Multifamily residential:
Pass665,780 1,481,161 808,333 612,408 498,491 857,713 8,690 1,281 4,933,857 
Criticized (accrual)— 3,356 54,614 — 693 25,974 — — 84,637 
Criticized (nonaccrual)— — — — — 4,669 — — 4,669 
Subtotal multifamily residential665,780 1,484,517 862,947 612,408 499,184 888,356 8,690 1,281 5,023,163 
Gross write-offs for the year ended December 31, 2023
— — — — — 3 — — 3 
Construction and land:
Pass209,775 280,151 120,724 39,928 808 5,501 6,981 — 663,868 
Subtotal construction and land209,775 280,151 120,724 39,928 808 5,501 6,981 — 663,868 
Total CRE3,405,325 5,885,538 3,230,264 2,129,310 2,125,717 3,515,384 108,522 64,052 20,464,112 
Total CRE gross write-offs for the year ended December 31, 2023 (2)
— — — — — 1,332 — — 1,332 
Total commercial$5,827,011 $7,589,913 $4,647,905 $2,481,175 $2,414,789 $3,719,778 $10,280,425 $84,195 $37,045,191 
Total commercial gross write-offs for the year ended December 31, 2023 (2)
350 10,454 424 3,758 9,748 3,980 1,593 — 30,307 
December 31, 2023
Term Loans by Origination Year
($ in thousands)20232022202120202019PriorRevolving Loans
Revolving Loans Converted to Term Loans (1)
Total
Consumer:
Residential mortgage:
Single-family residential:
Pass (4)
$3,188,830 $3,340,789 $2,279,802 $1,594,525 $980,686 $1,959,974 $— $— $13,344,606 
Criticized (accrual)2,680 4,471 566 1,440 1,503 4,167 — — 14,827 
Criticized (nonaccrual) (4)
4,466 837 3,902 2,081 3,626 8,715 — — 23,627 
Subtotal single-family residential mortgage3,195,976 3,346,097 2,284,270 1,598,046 985,815 1,972,856 — — 13,383,060 
HELOCs:
Pass3,641 3,882 1,734 3,153 729 9,251 1,551,074 126,280 1,699,744 
Criticized (accrual)565 1,219 1,872 101 185 1,470 2,548 1,089 9,049 
Criticized (nonaccrual)815 856 413 72 584 6,863 279 3,529 13,411 
Subtotal HELOCs5,021 5,957 4,019 3,326 1,498 17,584 1,553,901 130,898 1,722,204 
Gross write-offs for the year ended December 31, 2023 (2)
— — — — — 41 — 6 47 
Total residential mortgage3,200,997 3,352,054 2,288,289 1,601,372 987,313 1,990,440 1,553,901 130,898 15,105,264 
Total residential mortgage gross write-offs for the year ended December 31, 2023 (2)
— — — — — 41 — 6 47 
Other consumer:
Pass2,286 18,098 135 — — 13,244 26,432 — 60,195 
Criticized (nonaccrual)— — — — — — 132 — 132 
Total other consumer
2,286 18,098 135 — — 13,244 26,564 — 60,327 
Total consumer$3,203,283 $3,370,152 $2,288,424 $1,601,372 $987,313 $2,003,684 $1,580,465 $130,898 $15,165,591 
Total consumer gross write-offs for the year ended December 31, 2023 (2)
$— $— $— $— $— $41 $— $6 $47 
Total by Risk Rating:
Pass$8,877,690 $10,839,026 $6,723,921 $4,010,720 $3,326,731 $5,504,224 $11,739,785 $210,475 $51,232,572 
Criticized (accrual)145,219 111,430 207,962 64,855 67,738 158,049 119,744 1,089 876,086 
Criticized (nonaccrual)7,385 9,609 4,446 6,972 7,633 61,189 1,361 3,529 102,124 
Total
$9,030,294 $10,960,065 $6,936,329 $4,082,547 $3,402,102 $5,723,462 $11,860,890 $215,093 $52,210,782 
Total loans held-for-investment gross write-offs for the year ended December 31, 2023 (2)
$350 $10,454 $424 $3,758 $9,748 $4,021 $1,593 $6 $30,354 
(1)$7 million and $12 million of total commercial loans, comprised of C&I and CRE revolving loans, converted to term loans during the three months ended March 31, 2024 and 2023, respectively. During the three months ended March 31, 2024 and 2023, respectively, $15 million and $5 million of total consumer loans, comprised of HELOCs, converted to term loans.
(2)Excludes gross write-offs associated with loans the Company sold or settled.
(3)Represents the remaining unamortized deferred loan fee related to a zero balance loan with no previous charge-offs.
(4)As of both March 31, 2024 and December 31, 2023, $1 million of nonaccrual loans whose payments were guaranteed by the Federal Housing Administration were classified with a “Pass” rating.
Nonaccrual and Past Due Loans

Loans that are 90 or more days past due are generally placed on nonaccrual status unless the loan is well-collateralized and in the process of collection. 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 of loans held-for-investment as of March 31, 2024 and December 31, 2023:
March 31, 2024
($ in thousands)
Current Accruing Loans
Accruing Loans 30-59 Days Past Due
Accruing Loans 60-89 Days Past Due
Total Accruing Past Due Loans
Total Nonaccrual Loans
Total Loans
Commercial:
C&I$16,281,903 $4,559 $14,767 $19,326 $48,962 $16,350,191 
CRE:
CRE14,555,923 18,726 — 18,726 35,006 14,609,655 
Multifamily residential5,005,231 368 — 368 4,646 5,010,245 
Construction and land661,703 — — — 12,236 673,939 
Total CRE20,222,857 19,094 — 19,094 51,888 20,293,839 
Total commercial36,504,760 23,653 14,767 38,420 100,850 36,644,030 
Consumer:
Residential mortgage:
Single-family residential13,478,789 33,911 15,369 49,280 35,669 13,563,738 
HELOCs1,699,628 13,877 6,230 20,107 11,498 1,731,233 
Total residential mortgage15,178,417 47,788 21,599 69,387 47,167 15,294,971 
Other consumer53,224 60 57 117 162 53,503 
Total consumer15,231,641 47,848 21,656 69,504 47,329 15,348,474 
Total$51,736,401 $71,501 $36,423 $107,924 $148,179 $51,992,504 
December 31, 2023
($ in thousands)
Current Accruing Loans
Accruing Loans 30-59 Days Past Due
Accruing Loans 60-89 Days Past Due
Total Accruing Past Due Loans
Total Nonaccrual Loans
Total Loans
Commercial:
C&I$16,508,394 $28,550 $7,099 $35,649 $37,036 $16,581,079 
CRE:
CRE14,750,315 1,719 1,798 3,517 23,249 14,777,081 
Multifamily residential5,017,897 597 — 597 4,669 5,023,163 
Construction and land650,617 13,251 — 13,251 — 663,868 
Total CRE20,418,829 15,567 1,798 17,365 27,918 20,464,112 
Total commercial36,927,223 44,117 8,897 53,014 64,954 37,045,191 
Consumer:
Residential mortgage:
Single-family residential13,313,455 29,285 15,943 45,228 24,377 13,383,060 
HELOCs1,687,301 12,266 9,226 21,492 13,411 1,722,204 
Total residential mortgage
15,000,756 41,551 25,169 66,720 37,788 15,105,264 
Other consumer56,930 3,123 142 3,265 132 60,327 
Total consumer15,057,686 44,674 25,311 69,985 37,920 15,165,591 
Total$51,984,909 $88,791 $34,208 $122,999 $102,874 $52,210,782 
The following table presents the amortized cost of loans on nonaccrual status for which there was no related allowance for loan losses as of both March 31, 2024 and December 31, 2023. Nonaccrual loans may not have an allowance for credit losses if the loan balances are well secured by collateral values and there is no loss expectation.
($ in thousands)March 31, 2024December 31, 2023
Commercial:
C&I$40,617 $33,089 
CRE34,431 22,653 
Multifamily residential4,235 4,235 
Construction and land12,236 — 
Total commercial91,519 59,977 
Consumer:
Single-family residential15,380 4,852 
HELOCs6,287 7,256 
Total consumer21,667 12,108 
Total nonaccrual loans with no related allowance for loan losses$113,186 $72,085 

Foreclosed Assets

The Company acquires assets from borrowers through loan restructurings, workouts, or foreclosures. Assets acquired may include real properties (e.g., real estate, land, and buildings) and commercial and personal properties. The Company recognizes foreclosed assets upon receiving assets in satisfaction of a loan (e.g., taking legal title or physical possession).

Foreclosed assets, consisting of OREO and other nonperforming assets, are included in Other assets on the Consolidated Balance Sheet. The Company had $17 million of foreclosed assets as of March 31, 2024, compared with $11 million as of December 31, 2023. The Company commences the foreclosure process on consumer mortgage loans after a borrower becomes more than 120 days delinquent in accordance with the CFPB guidelines. The carrying value of the consumer real estate loans that were in an active or suspended foreclosure process was $8 million as of both March 31, 2024 and December 31, 2023.
Loan Modifications to Borrowers Experiencing Financial Difficulty

As part of the Company’s loss mitigation efforts, the Company may agree to modify the contractual terms of a loan to assist borrowers experiencing financial difficulty. The Company negotiates loan modifications on a case-by-case basis to achieve mutually agreeable terms that maximize loan collectability and meet the borrower’s financial needs. The Company considers various factors to identify borrowers experiencing financial difficulty. The primary factor for consumer borrowers is delinquency status. For commercial loan borrowers, these factors include credit risk ratings, the probability of loan risk rating downgrades, and overall risk profile changes. The modification may include, but is not limited to, payment deferrals, interest rate reductions, term extensions, principal forgiveness, or a combination of such modifications. Commercial loan borrowers that require immaterial modifications such as insignificant interest rate changes, short-term extensions (90 days or less) from the original maturity date, or temporary waivers or extensions of financial covenants which would not constitute material credit actions, are generally not considered to be experiencing financial difficulty and are not included in the disclosure. Insignificant payment deferrals (three months or less in the last 12 months) are also not included in the disclosure.
The following tables present the amortized cost of loans that were modified during the three months ended March 31, 2024 and 2023 by loan class and modification type:
Three Months Ended March 31, 2024
Modification Type
($ in thousands)Term ExtensionPayment Delay
Combination: Rate Reduction/ Payment Delay
Total
Modification as a % of Loan Class
Commercial:
C&I$4,013 $22,155 $— $26,168 0.16 %
CRE24,488 — 19,325 43,813 0.22 %
Total commercial28,501 22,155 19,325 69,981 
Consumer:
Single-family residential— 3,996 — 3,996 0.03 %
HELOCs— 5,501 517 6,018 0.35 %
Total consumer— 9,497 517 10,014 
Total$28,501 $31,652 $19,842 $79,995 
Three Months Ended March 31, 2023
Modification Type
($ in thousands)Term ExtensionPayment Delay
Combination: Rate Reduction/ Payment Delay
Total
Modification as a % of Loan Class
Commercial:
C&I$19,974 $14,364 $— $34,338 0.22 %
CRE543 — — 543 — %
Total commercial20,517 14,364 — 34,881 
Consumer:
HELOCs738 — — 738 0.04 %
Total consumer738 — — 738 
Total$21,255 $14,364 $— $35,619 

The following tables present the financial effects of the loan modifications for the three months ended March 31, 2024 and 2023 by loan class and modification type:
Financial Effects of Loan Modifications
Three Months Ended March 31, 2024
($ in thousands)Weighted-Average Interest Rate ReductionWeighted-Average Term Extension
(in years)		Weighted-Average Payment Delay
(in years)
Commercial:
C&I— 1.81.7
CRE2.75 %1.51.7
Consumer:
Single-family residential— 0.00.7
HELOCs0.25 %0.03.2
Financial Effects of Loan Modifications
Three Months Ended March 31, 2023
($ in thousands)Weighted-Average Interest Rate ReductionWeighted-Average Term Extension
(in years)		Weighted-Average Payment Delay
(in years)
Commercial:
C&I— 0.91.0
CRE— 2.00.0
Consumer:
HELOCs— 14.80.0

A modified loan may become delinquent and result in a payment default (generally 90 days past due) subsequent to modification. The following table presents information on loans that defaulted during the three months ended March 31, 2024 that received modifications during the 12 months preceding payment default:
Loans Modified Subsequently Defaulted
Three Months Ended March 31, 2024
($ in thousands)Term Extension
Payment Delay
Combination: Term Extension/ Payment Delay
Total
Commercial:
C&I$7,828 $— — $7,828 
Total commercial7,828 — — 7,828 
Consumer:
Single-family residential— 3,972 383 4,355 
Total consumer— 3,972 383 4,355 
Total$7,828 $3,972 $383 $12,183 

In comparison, there were no loans that received modifications, which subsequently defaulted during the three months ended March 31, 2023.

The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following tables present the performance of loans that were modified in the twelve months ended March 31, 2024. For the comparative period, the amounts represent the performance of loans that were modified in the three months ended March 31, 2023, subsequent to the adoption of ASU 2022-02 on January 1, 2023:
Payment Performance as of March 31, 2024
($ in thousands)Current30 - 89 Days Past Due90+ Days Past DueTotal
Commercial:
C&I$75,193 $— $7,829 $83,022 
CRE
76,028 — — 76,028 
Total commercial151,221 — 7,829 159,050 
Consumer:
Single-family residential8,455 4,239 5,075 17,769 
HELOCs6,994 2,536 — 9,530 
Total consumer15,449 6,775 5,075 27,299 
Total$166,670 $6,775 $12,904 $186,349 
Payment Performance as of March 31, 2023
($ in thousands)Current30 - 89 Days Past Due
90+ Days Past Due
Total
Commercial:
C&I$27,393 $6,945 $— $34,338 
CRE
543 — — 543 
Total commercial27,936 6,945 — 34,881 
Consumer:
HELOCs738 — — 738 
Total consumer738 — — 738 
Total$28,674 $6,945 $— $35,619 

As of March 31, 2024 and December 31, 2023, commitments to lend additional funds to borrowers whose loans were modified were $10 million and $4 million, respectively.
Allowance for Credit Losses

The Company has a current expected credit losses framework for all financial assets measured at amortized cost and certain off-balance sheet credit exposures. The Company’s allowance for credit losses, which includes both the allowance for loan losses and the allowance for unfunded credit commitments, is calculated with the objective of maintaining a reserve sufficient to absorb losses inherent in our credit portfolios. The measurement of the allowance for credit losses is based on management’s best estimate of lifetime expected credit losses, periodic evaluation of the loan portfolio, lending-related commitments and other relevant factors.

The allowance for credit losses is deducted from the amortized cost basis of a financial asset or a group of financial assets so that the balance sheet reflects the net amount the Company expects to collect. Amortized cost is the principal balance outstanding, net of purchase premiums and discounts, deferred fees and costs, and escrow advances. Subsequent changes in expected credit losses are recognized in net income as a provision for, or a reversal of, credit loss expense.

The allowance for credit losses estimation involves procedures to consider the unique risk characteristics of the portfolio segments. The majority of the Company’s credit exposures that share risk characteristics with other similar exposures are collectively evaluated. The collectively evaluated loans include performing loans and unfunded credit commitments. If an exposure does not share risk characteristics with other exposures, the Company generally estimates expected credit losses on an individual basis.

Allowance for Collectively Evaluated Loans

The allowance for collectively evaluated loans consists of a quantitative component that assesses the different risk factors considered in our models and a qualitative component that considers risk factors external to the models. Each of these components are described below.

Quantitative Component — The Company applies quantitative methods to estimate loan losses by considering a variety of factors such as historical loss experience, the current credit quality of the portfolio, and an economic outlook over the life of the loan. The Company incorporates forward-looking information using macroeconomic scenarios which include variables that are considered key drivers of increases and decreases in credit losses. The Company utilizes a probability-weighted, multiple-scenario forecast approach. These scenarios may consist of a base forecast representing management's view of the most likely outcome, combined with downside or upside scenarios reflecting possible worsening or improving economic conditions. The quantitative models incorporate a probability-weighted calculation of these macroeconomic scenarios over a reasonable and supportable forecast period. If the life of the loans extends beyond the reasonable and supportable forecast period, the Company will consider historical experience or long-run macroeconomic trends over the remaining life of the loans to estimate the allowance for loan losses.

There were no changes to the reasonable and supportable forecast period, except to the C&I segment, and no changes to the reversion to the historical loss experience method for the three months ended March 31, 2024 and 2023. The reasonable and supportable forecast period for the C&I segment changed from 11 quarters to eight quarters due to model redevelopment during the third quarter of 2023.
The following table provides key credit risk characteristics and macroeconomic variables that the Company uses to estimate the expected credit losses by portfolio segment:
Portfolio SegmentRisk CharacteristicsMacroeconomic Variables
C&IAge percentage, size at origination, delinquency status, sector and risk rating
Unemployment rate, Gross Domestic Product (“GDP”), and U.S. Treasury rates (1)
CRE, Multifamily residential, and Construction and landDelinquency status, maturity date, collateral value, property type, and geographic locationUnemployment rate, GDP, and U.S. Treasury rates
Single-family residential and HELOCsFICO score, delinquency status, maturity date, collateral value, and geographic locationUnemployment rate, GDP, and Home Price Indices
Other consumerLoss rate approach
Immaterial (2)
(1)Macroeconomic variables were updated due to model redevelopment.
(2)Macroeconomic variables are included in the qualitative estimate.

Quantitative Component — Allowance for Loan Losses for the Commercial Loan Portfolio

The Company’s C&I lifetime loss rate model estimates the loss rate expected over the life of a loan. This loss rate is applied to the amortized cost basis, excluding accrued interest receivable, to determine expected credit losses. The lifetime loss rate model’s reasonable and supportable period spans eight quarters, thereafter immediately reverting to the historical average loss rate, expressed through the loan-level lifetime loss rate.

To generate estimates of expected loss at the loan level for CRE, multifamily residential, and construction and land loans, projected probabilities of default (“PDs”) and loss given defaults (“LGDs”) are applied to the estimated exposure at default, considering the term and payment structure of the loan. The forecast of future economic conditions returns to long-run historical economic trends within the reasonable and supportable period.

To estimate the life of a loan under both models, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience.

Quantitative Component — Allowance for Loan Losses for the Consumer Loan Portfolio

For single-family residential and HELOC loans, projected PDs and LGDs are applied to the estimated exposure at default, considering the term and payment structure of the loan, to generate estimates of expected loss at the loan level. The forecast of future economic conditions returns to long-run historical economic trends after the reasonable and supportable period. To estimate the life of a loan for the single-family residential and HELOC loan portfolios, the contractual term of the loan is adjusted for estimated prepayments based on historical prepayment experience. For other consumer loans, the Company uses a loss rate approach.

Qualitative Component — The Company considers the following qualitative factors in the determination of the collectively evaluated allowance if these factors have not already been captured by the quantitative model. Such qualitative factors may include, but are not limited to:

•loan growth trends;
•the volume and severity of past due financial assets, and criticized or adversely classified financial assets;
•the Company’s lending policies and procedures, including changes in lending strategies, underwriting standards, collection, write-off and recovery practices;
•knowledge of a borrower’s operations;
•the quality of the Company’s credit review system;
•the experience, ability and depth of the Company’s management and associates;
•the effect of other external factors such as the regulatory and legal environments, or changes in technology;
•actual and expected changes in international, national, regional, and local economic and business conditions in which the Company operates; and
•risk factors in certain industry sectors not captured by the quantitative models.

The magnitude of the impact of these factors on the Company’s qualitative assessment of the allowance for credit losses changes from period to period according to changes made by management in its assessment of these factors. The extent to which these factors change may be dependent on whether they are already reflected in quantitative loss estimates during the current period and the extent to which changes in these factors diverge from period to period.
While the Company’s allowance methodologies strive to reflect all relevant credit risk factors, there continues to be uncertainty associated with, but not limited to, potential imprecision in the estimation process due to the inherent time lag of obtaining information and normal variations between expected and actual outcomes. The Company may hold additional qualitative reserves that are designed to provide coverage for losses attributable to such risk.

Allowance for Individually Evaluated Loans

When a loan no longer shares similar risk characteristics with other loans, such as in the case of certain nonaccrual loans, the Company estimates the allowance for loan losses on an individual loan basis. The allowance for loan losses for individually evaluated loans is measured as the difference between the recorded value of the loans and their fair value. For loans evaluated individually, the Company uses one of three different asset valuation measurement methods: (1) the fair value of collateral less costs to sell; (2) the present value of expected future cash flows; or (3) the loan's observable market price. If an individually evaluated loan is determined to be collateral dependent, the Company applies the fair value of the collateral less costs to sell method. If an individually evaluated loan is determined not to be collateral dependent, the Company uses the present value of future cash flows or the observable market value of the loan.

•Collateral-Dependent Loans — The allowance of a collateral-dependent loan is limited to the difference between the recorded value and fair value of the collateral less cost of disposal or sale. As of March 31, 2024, collateral-dependent commercial and consumer loans totaled $63 million and $23 million, respectively. In comparison, collateral-dependent commercial and consumer loans totaled $30 million and $12 million, respectively, as of December 31, 2023. The Company's collateral-dependent loans were secured by real estate. As of both March 31, 2024 and December 31, 2023, the collateral value of the properties securing the collateral-dependent loans, net of selling costs, exceeded the recorded value of the majority of the loans.
The following tables summarize the activity in the allowance for loan losses by portfolio segments for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31, 2024
CommercialConsumer
CREResidential Mortgage
($ in thousands)C&ICREMultifamily ResidentialConstruction and LandSingle-Family ResidentialHELOCsOther ConsumerTotal
Allowance for loan losses, beginning of period$392,685 $170,592 $34,375 $10,469 $55,018 $3,947 $1,657 $668,743 
Provision for (reversal of) credit losses on loans
(a)275 18,939 3,032 1,574 899 (432)(132)24,155 
Gross charge-offs(20,998)(2,398)(6)(1,224)— — (58)(24,684)
Gross recoveries1,710 327 17 — 5 48 — 2,107 
Total net (charge-offs) recoveries(19,288)(2,071)11 (1,224)5 48 (58)(22,577)
Foreign currency translation adjustment(41)— — — — — — (41)
Allowance for loan losses, end of period$373,631 $187,460 $37,418 $10,819 $55,922 $3,563 $1,467 $670,280 
Three Months Ended March 31, 2023
CommercialConsumer
CREResidential Mortgage
($ in thousands)C&ICREMultifamily ResidentialConstruction and LandSingle-Family ResidentialHELOCsOther ConsumerTotal
Allowance for loan losses, December 31, 2022$371,700 $149,864 $23,373 $9,109 $35,564 $4,475 $1,560 $595,645 
Impact of ASU 2022-02 adoption5,683 337 6 — 1 1 — 6,028 
Allowance for loan losses, January 1, 2023377,383 150,201 23,379 9,109 35,565 4,476 1,560 601,673 
 (Reversal of) provision for credit losses on loans(a)(678)4,676 1,135 210 12,442 580 155 18,520 
Gross charge-offs(1,900)(6)— — — (91)(40)(2,037)
Gross recoveries1,211 196 12 3 — 6 — 1,428 
Total net (charge-offs) recoveries (689)190 12 3 — (85)(40)(609)
Foreign currency translation adjustment309 — — — — — — 309 
Allowance for loan losses, end of period$376,325 $155,067 $24,526 $9,322 $48,007 $4,971 $1,675 $619,893 

In addition to the allowance for loan losses, the Company maintains an allowance for unfunded credit commitments. The Company has three general areas for which it provides the allowance for unfunded credit commitments: (1) recourse obligations for loans sold, (2) letters of credit, and (3) unfunded lending commitments. The allowance for unfunded credit commitments is maintained at a level that management believes to be sufficient to absorb estimated expected credit losses related to unfunded credit facilities. See Note 11 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-Q for additional information related to unfunded credit commitments. The following table summarizes the activities in the allowance for unfunded credit commitments for the three months ended March 31, 2024 and 2023:
Three Months Ended March 31,
($ in thousands)20242023
Unfunded credit facilities
Allowance for unfunded credit commitments, beginning of period$37,699 $26,264 
Provision for credit losses on unfunded credit commitments
(b)845 1,480 
Foreign currency translation adjustment— (3)
Allowance for unfunded credit commitments, end of period$38,544 $27,741 
Provision for credit losses(a) + (b)$25,000 $20,000 
The allowance for credit losses was $709 million as of March 31, 2024, an increase of $3 million, compared with $706 million as of December 31, 2023. The slight increase in the allowance for credit losses was primarily driven by the Company’s qualitative risk assessment and economic forecasts that reflected continued caution regarding inflation, the high interest rate environment and the CRE market outlook, while recognizing negative loan growth.

The Company considers multiple economic scenarios to develop the estimate of the allowance for loan losses. The scenarios may consist of a baseline forecast representing management's view of the most likely outcome, and downside or upside scenarios that reflect possible worsening or improving economic conditions. As of March 31, 2024, the Company assigned the same weightings to its baseline, upside and downside scenarios as compared with December 31, 2023. The current baseline economic forecast continues to reflect key risks such as high inflation, high interest rates, concerns over global conflicts and oil prices. Compared to December 2023, the March 2024 baseline forecast for GDP growth and unemployment rate showed a slight improvement in the near term (full year 2024) while longer-term forecasts (2025 and beyond) slightly worsened for GDP growth. The downside scenario assumed the economy falls into recession in the second quarter of 2024 as a result of an extended federal shutdown, global and domestic political tensions, high inflation, and increased unemployment. The upside scenario assumed a more optimistic economic outlook for 2024, including stronger growth, stable financial market, and full employment starting in the second quarter of 2024.
Loan Transfers, Sales and Purchases

The Company’s primary business focus is on directly originated loans. The Company also purchases loans and participates in loan financing with other banks. In the normal course of doing business, the Company also provides other financial institutions with the ability to participate in commercial loans that it originates, by selling loans to such institutions. 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 provide information on the carrying value of loans transferred, sold and purchased for the held-for-investment portfolio, during the three months ended March 31, 2024 and 2023:
Three Months Ended March 31, 2024
CommercialConsumer
Residential Mortgage
($ in thousands)C&ISingle-Family ResidentialTotal
Loans transferred from held-for-investment to held-for-sale (1)
$199,974 $— $199,974 
Sales (2)(3)
$187,202 $965 $188,167 
Purchases
$33,344 
(4)
$74,736 $108,080 
Three Months Ended March 31, 2023
CommercialConsumer
CRE
Residential Mortgage
($ in thousands)C&ICRESingle-Family ResidentialTotal
Loans transferred from held-for-investment to held-for-sale (1)
$156,876 $3,600 $— $160,476 
Sales (2)(3)
$175,932 $3,600 $— $179,532 
Purchases
$22,683 
(4)
$— $131,999 $154,682 
(1)Includes write-downs of $1 million and $273 thousand 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, 2024, and 2023, respectively.
(2)Includes originated loans sold of $92 million and $111 million for the three months ended March 31, 2024 and 2023, respectively. Originated loans sold consisted primarily of C&I loans for both periods.
(3)Includes $96 million and $69 million of purchased loans sold in the secondary market for the three months ended March 31, 2024 and 2023, respectively.
(4)C&I loan purchases were comprised primarily of syndicated C&I term loans.