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Loans Receivable and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2020

Loans receivable at June 30, 2020 and December 31, 2019 are summarized as follows (in thousands):


	June 30, 2020		December 31, 2019
Mortgage loans:
Residential	$	1,125,407	1,077,689
Commercial	2,676,426		2,578,393
Multi-family	1,275,588		1,225,551
Construction	284,980		429,812
Total mortgage loans	5,362,401		5,311,445
Commercial loans
Commercial owner occupied	935,682		853,269
Commercial non-owner occupied	670,780		732,277
Other commercial loans	449,751		49,213
Total commercial loans	2,056,213		1,634,759
Consumer loans	361,653		391,360
Total gross loans	7,780,267		7,337,564
Purchased credit-deteriorated ("PCD") loans	750		746
Premiums on purchased loans	2,032		2,474
Unearned discounts	(26)		(26)
Net deferred fees	(16,632)		(7,873)
Total loans	$	7,766,391	7,332,885

Summary of Aging Loans Receivable by Portfolio Segment and Class

The following tables summarize the aging of loans receivable by portfolio segment and class of loans, excluding PCD loans (in thousands):


	June 30, 2020
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable	Non-accrual loans with no related allowance
Mortgage loans:
Residential	$	4,895	4,670	6,806	—	16,371	1,109,036	1,125,407	1,606
Commercial	—		—	5,048	—	5,048	2,671,378	2,676,426	—
Multi-family	—		—	—	—	—	1,275,588	1,275,588	—
Construction	—		—	—	—	—	284,980	284,980	—
Total mortgage loans	4,895		4,670	11,854	—	21,419	5,340,982	5,362,401	1,606
Commercial loans	456		19	22,419	—	22,894	2,033,319	2,056,213	8,066
Consumer loans	1,338		590	1,194	—	3,122	358,531	361,653	9
Total gross loans	$	6,689	5,279	35,467	—	47,435	7,732,832	7,780,267	9,681


	December 31, 2019
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable	Non-accrual loans with no related allowance
Mortgage loans:
Residential	$	5,905	2,579	8,543	—	17,027	1,060,662	1,077,689	2,989
Commercial	—		—	5,270	—	5,270	2,573,123	2,578,393	—
Multi-family	—		—	—	—	—	1,225,551	1,225,551	—
Construction	—		—	—	—	—	429,812	429,812	—
Total mortgage loans	5,905		2,579	13,813	—	22,297	5,289,148	5,311,445	2,989
Commercial loans	2,383		95	25,160	—	27,638	1,607,121	1,634,759	3,238
Consumer loans	1,276		337	1,221	—	2,834	388,526	391,360	569
Total gross loans	$	9,564	3,011	40,194	—	52,769	7,284,795	7,337,564	6,796

Summary of Allowance for Loan Losses by Portfolio Segment and Impairment Classification

The activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2020 and 2019 was as follows (in thousands):


Three months ended June 30,	Mortgage loans		Commercial loans	Consumer loans	Total
2020
Balance at beginning of period	$	47,500	22,841	4,802	75,143
Provision charged to operations	7,355		2,285	1,260	10,900
Recoveries of loans previously charged-off	16		605	103	724
Loans charged-off	—		(447)	(61)	(508)
Balance at end of period	$	54,871	25,284	6,104	86,259

2019
Balance at beginning of period	$	26,926	26,351	2,076	55,353
Provision charged to operations	262		9,175	63	9,500
Recoveries of loans previously charged-off	105		113	124	342
Loans charged-off	(13)		(2,090)	(282)	(2,385)
Balance at end of period	$	27,280	33,549	1,981	62,810


Six months ended June 30,	Mortgage loans		Commercial loans	Consumer loans	Total
2020
Balance at beginning of period	$	25,511	28,263	1,751	55,525
Increase (decrease) due to the initial adoption of CECL - Retained earnings	14,188		(9,974)	3,706	7,920
Provision charged to operations	15,066		9,904	630	25,600
Recoveries of loans previously charged-off	108		918	226	1,252
Loans charged-off	(2)		(3,827)	(209)	(4,038)
Balance at end of period	$	54,871	25,284	6,104	86,259

2019
Balance at beginning of period	$	27,678	25,693	2,191	55,562
Provision (credited) charged to operations	(720)		10,457	(37)	9,700
Recoveries of loans previously charged-off	336		165	254	755
Loans charged-off	(14)		(2,766)	(427)	(3,207)
Balance at end of period	$	27,280	33,549	1,981	62,810

The allowance for credit losses is summarized by portfolio segment and impairment classification as follows (in thousands):


	June 30, 2020
	Mortgage loans		Commercial loans	Consumer loans	Total
Individually evaluated for impairment	$	1,559	2,024	42	3,625
Collectively evaluated for impairment	53,312		23,260	6,062	82,634
Total gross loans	$	54,871	25,284	6,104	86,259


	December 31, 2019
	Mortgage loans		Commercial loans	Consumer loans	Total
Individually evaluated for impairment	$	1,580	3,462	25	5,067
Collectively evaluated for impairment	23,931		24,801	1,726	50,458
Total gross loans	$	25,511	28,263	1,751	55,525

Schedule of Impact of ASC 326

The following table illustrates the impact of the January 1, 2020 adoption of CECL on held to maturity debt securities (in thousands):


	January 1, 2020
	As reported under CECL		Prior to CECL	Impact of CECL adoption
Held to Maturity Debt Securities
Allowance for credit losses on corporate securities	$	6	—	6
Allowance for credit losses on municipal securities	64		—	64
Allowance for credit losses on held to maturity debt securities	$	70	—	70

The following table illustrates the impact of the January 1, 2020 adoption of CECL on the allowance for credits for the loan portfolio (in thousands):


	January 1, 2020
	As reported under CECL		Prior to CECL	Impact of CECL adoption
Loans
Residential	$	8,950	3,411	5,539
Commercial	17,118		12,885	4,233
Multi-family	9,519		3,370	6,149
Construction	4,152		5,885	(1,733)
Total mortgage loans	39,739		25,551	14,188
Commercial loans	18,254		28,228	(9,974)
Consumer loans	5,452		1,746	3,706
Allowance for credit losses on loans	$	63,445	55,525	7,920

The following table illustrates the impact of the January 1, 2020 adoption of CECL on off-balance sheet credit exposures:


	January 1, 2020
	As reported under CECL		Prior to CECL	Impact of CECL adoption
Liabilities
Allowance for credit losses on off-balance sheet credit exposure	$	3,206	—	3,206

Summary of Loans Receivable by Portfolio Segment and Impairment Method

The following tables summarize loans receivable by portfolio segment and impairment method (in thousands):


	June 30, 2020
	Mortgage loans		Commercial loans	Consumer loans	Total Portfolio Segments
Individually evaluated for impairment	$	38,186	23,263	1,605	63,054
Collectively evaluated for impairment	5,324,215		2,032,950	360,048	7,717,213
Total gross loans	$	5,362,401	2,056,213	361,653	7,780,267


	December 31, 2019
	Mortgage loans		Commercial loans	Consumer loans	Total Portfolio Segments
Individually evaluated for impairment	$	39,910	28,357	2,374	70,641
Collectively evaluated for impairment	5,271,535		1,606,402	388,986	7,266,923
Total gross loans	$	5,311,445	1,634,759	391,360	7,337,564

Schedule of Troubled Debt Restructuring

The following tables present the number of loans modified as TDRs during the three and six months ended June 30, 2020 and 2019, along with their balances immediately prior to the modification date and post-modification as of June 30, 2020 and 2019 (in thousands):


	For the three months ended
	June 30, 2020								June 30, 2019
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Mortgage loans:
Residential	1	$	342	$	283	2	$	749	$	718


Total mortgage loans	1	342		283		2	749		718
Commercial loans	2	736		714		4	1,490		1,480

Total restructured loans	3	$	1,078	$	997	6	$	2,239	$	2,198


	For the six months ended
	June 30, 2020								June 30, 2019
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
	($ in thousands)
Mortgage loans:
Residential	1	$	342	$	283	2	$	749	$	718
Commercial	—	—		—		1	14,010		14,010

Total mortgage loans	1	342		283		3	14,759		14,728
Commercial loans	4	1,483		1,429		7	2,702		2,564

Total restructured loans	5	$	1,825	$	1,712	10	$	17,461	$	17,292

Schedule of Troubled Debt Restructurings Subsequently Defaulted

The following table presents loans modified as TDRs within the previous 12 months from June 30, 2020 and 2019, and for which there was a payment default (90 days or more past due) at the quarter ended June 30, 2020 and 2019.


	June 30, 2020				June 30, 2019
Troubled Debt Restructurings Subsequently Defaulted	Number of Loans	Outstanding Recorded Investment		Number of Loans	Outstanding Recorded Investment
	($ in thousands)




Commercial loans	—	$	—	2	$	642

Total restructured loans	—	$	—	2	$	642

Summary of Impaired Loans Receivable by Class

The following table presents loans individually evaluated for impairment by class and loan category, excluding PCD loans (in thousands):


	June 30, 2020										December 31, 2019
	Unpaid Principal Balance		Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized	Unpaid Principal Balance	Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized
Loans with no related allowance
Mortgage loans:
Residential	$	10,882	8,402	—	8,477	194	13,478	10,739	—	10,910	533
Commercial	14,010		14,010	—	14,010	258	—	—	—	—	—


Total	24,892		22,412	—	22,487	452	13,478	10,739	—	10,910	533
Commercial loans	9,755		7,649	—	8,113	66	3,927	3,696	—	4,015	17
Consumer loans	1,452		947	—	965	26	2,086	1,517	—	1,491	86
Total impaired loans	$	36,099	31,008	—	31,565	544	19,491	15,952	—	16,416	636

Loans with an allowance recorded
Mortgage loans:
Residential	$	11,482	10,959	888	11,036	231	10,860	10,326	829	10,454	428
Commercial	4,815		4,815	671	4,826	27	18,845	18,845	751	18,862	569


Total	16,297		15,774	1,559	15,862	258	29,705	29,171	1,580	29,316	997
Commercial loans	17,318		15,614	2,024	18,545	192	27,762	24,661	3,462	27,527	444
Consumer loans	669		658	42	665	14	868	857	25	878	46
Total impaired loans	$	34,284	32,046	3,625	35,072	464	58,335	54,689	5,067	57,721	1,487

Total impaired loans
Mortgage loans:
Residential	$	22,364	19,361	888	19,513	425	24,338	21,065	829	21,364	961
Commercial	18,825		18,825	671	18,836	285	18,845	18,845	751	18,862	569


Total	41,189		38,186	1,559	38,349	710	43,183	39,910	1,580	40,226	1,530
Commercial loans	27,073		23,263	2,024	26,658	258	31,689	28,357	3,462	31,542	461
Consumer loans	2,121		1,605	42	1,630	40	2,954	2,374	25	2,369	132
Total impaired loans	$	70,383	63,054	3,625	66,637	1,008	77,826	70,641	5,067	74,137	2,123

Summary of Loans Receivable by Credit Quality Risk Rating Indicator

The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades (in thousands):


	At June 30, 2020
Total portfolio	Residential ⁽¹⁾		Commercial mortgage		Multi-family		Construction		Total mortgages		Commercial		Consumer		Total loans
Special mention	$	50,250	49,227		101		872		100,450		155,365		1,868		257,683
Substandard	19,476		25,464		124		—		45,064		96,226		3,063		144,353
Doubtful	—		—		—		—		—		100		—		100
Loss	—		—		—		—		—		—		—		—
Total criticized and classified	69,726		74,691		225		872		145,514		251,691		4,931		402,136
Pass/Watch	1,055,681		2,601,735		1,275,363		284,108		5,216,887		1,804,522		356,722		7,378,131
Total	$	1,125,407	2,676,426		1,275,588		284,980		5,362,401		2,056,213		361,653		7,780,267

2020
Special mention	$	3,602	—		—		872		4,474		63		25		4,562
Substandard	165		—		—		—		165		—		—		165
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—
Total criticized and classified	3,767		—		—		872		4,639		63		25		4,727
Pass/Watch	136,061		226,407		55,630		4,093		422,191		509,601		15,817		947,609
Total gross loans	$	139,828	226,407		55,630		4,965		426,830		509,664		15,842		952,336

2019
Special mention	$	5,767	$	12,434	$	—	$	—	$	18,201	$	6,922	$	295	$	25,418
Substandard	3,174		—		—		—		3,174		257		48		3,479
Doubtful	—		—		—		—		—		—		—		—
Loss	—		—		—		—		—		—		—		—


Total criticized and classified	8,941		12,434	—	—	21,375	7,179	343	28,897
Pass/Watch	143,555		546,612	139,753	130,902	960,822	228,914	51,133	1,240,869
Total gross loans	$	152,496	559,046	139,753	130,902	982,197	236,093	51,476	1,269,766

2018
Special mention	$	6,130	3,590	—	—	9,720	9,841	292	19,853
Substandard	2,849		—	—	—	2,849	2,242	304	5,395
Doubtful	—		—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—
Total criticized and classified	8,979		3,590	—	—	12,569	12,083	596	25,248
Pass/Watch	82,857		365,659	190,357	110,140	749,013	177,235	44,519	970,767
Total gross loans	$	91,836	369,249	190,357	110,140	761,582	189,318	45,115	996,015

2017
Special mention	$	3,321	3,512	—	—	6,833	27,501	—	34,334
Substandard	730		14,018	—	—	14,748	7,140	—	21,888
Doubtful	—		—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—
Total criticized and classified	4,051		17,530	—	—	21,581	34,641	—	56,222
Pass/Watch	83,975		390,668	136,026	38,974	649,643	168,034	35,632	853,309
Total gross loans	$	88,026	408,198	136,026	38,974	671,224	202,675	35,632	909,531

2016 and prior
Special mention	$	31,430	29,691	101	—	61,222	111,038	1,256	173,516
Substandard	12,558		11,446	124	—	24,128	86,587	2,711	113,426
Doubtful	—		—	—	—	—	100	—	100
Loss	—		—	—	—	—	—	—	—
Total criticized and classified	43,988		41,137	225	—	85,350	197,725	3,967	287,042
Pass/Watch	653,221		1,113,526	753,822	—	2,520,569	918,463	213,588	3,652,620
Total gross loans	$	697,209	1,154,663	754,047	—	2,605,919	1,116,188	217,555	3,939,662

	At December 31, 2019
	Residential		Commercialmortgage	Multi-family	Construction	Total mortgages	Commercial	Consumer	Total loans
Special mention	$	2,402	46,758	—	—	49,160	79,248	286	128,694
Substandard	10,204		13,458	—	6,181	29,843	57,015	1,668	88,526
Doubtful	—		—	—	—	—	836	—	836
Loss	—		—	—	—	—	—	—	—
Total criticized and classified	12,606		60,216	—	6,181	79,003	137,099	1,954	218,056
Pass/Watch	1,065,083		2,518,177	1,225,551	423,631	5,232,442	1,497,660	389,406	7,119,508
Total	$	1,077,689	2,578,393	1,225,551	429,812	5,311,445	1,634,759	391,360	7,337,564

(1) Contained within criticized and classified loans of $404.1 million as of June 30, 2020, $45.6 million of residential loans, which were rated "special mention" and $10.4 million of residential loans which were rated "substandard" consisted of loans that were granted short-term payment deferrals related to COVID-19