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Loans and Leases Receivable and Allowance for Loan and Lease Losses
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Loans and Leases Receivable and Allowance for Loan and Lease Losses LOANS AND LEASES RECEIVABLE AND ALLOWANCE FOR LOAN AND LEASE LOSSES
The following table presents loans and leases receivable as of December 31, 2019 and 2018:
December 31,
(amounts in thousands)20192018
Loans receivable, mortgage warehouse, at fair value$2,245,758  $1,405,420  
Loans receivable:
Commercial:
Multi-family1,909,274  3,285,297  
Commercial and industrial (including owner occupied commercial real estate) (1)
2,441,987  1,951,277  
Commercial real estate non-owner occupied1,223,529  1,125,106  
Construction118,418  56,491  
Total commercial loans and leases receivable5,693,208  6,418,171  
Consumer:
Residential real estate375,014  566,561  
Manufactured housing70,398  79,731  
Other consumer1,178,283  74,035  
Total consumer loans receivable1,623,695  720,327  
Loans and leases receivable7,316,903  7,138,498  
Deferred (fees) costs and unamortized (discounts) premiums, net2,085  (424) 
Allowance for loan and lease losses(56,379) (39,972) 
Total loans and leases receivable, net of allowance for loan and lease losses$9,508,367  $8,503,522  
(1)Includes direct finance equipment leases of $89.2 million and $54.5 million at December 31, 2019 and 2018, respectively.
Customers' total loans and leases receivable portfolio includes loans receivable which are reported at fair value based on an election made to account for these loans at fair value and loans and leases receivable which are predominately reported at their outstanding unpaid principal balance, net of charge-offs and deferred costs and fees and unamortized premiums and discounts and are evaluated for impairment.
Loans receivable, mortgage warehouse, at fair value:
Mortgage warehouse loans consist of commercial loans to mortgage companies. These mortgage warehouse lending transactions are subject to master repurchase agreements. As a result of the contractual provisions, for accounting purposes control of the underlying mortgage loan has not transferred and the rewards and risks of the mortgage loans are not assumed by Customers. The mortgage
warehouse loans are designated as loans held for investment and reported at fair value based on an election made to account for the loans at fair value. Pursuant to the agreements, Customers funds the pipelines for these mortgage lenders by sending payments directly to the closing agents for funded mortgage loans and receives proceeds directly from third party investors when the underlying mortgage loans are sold into the secondary market. The fair value of the mortgage warehouse loans is estimated as the amount of cash initially advanced to fund the mortgage, plus accrued interest and fees, as specified in the respective agreements. The interest rates on these loans are variable, and the lending transactions are short-term, with an average life under 30 days from purchase to sale. The primary goal of these lending transactions is to provide liquidity to mortgage companies.
At December 31, 2019 and 2018, all of Customers' commercial mortgage warehouse loans were current in terms of payment. As these loans are reported at their fair value, they do not have an ALLL and are therefore excluded from ALLL-related disclosures.
Loans and leases receivable:
The following tables summarize loans and leases receivable by loan and lease type and performance status as of December 31, 2019 and 2018:
December 31, 2019
(amounts in thousands)
30-89 Days past due (1)
90 Days or more past due (1)
Total past due (1)
Non- accrual
Current (2)
Purchased-credit-impaired loans (3)
Total loans and leases (4)
Multi-family$2,133  $—  $2,133  $4,117  $1,901,336  $1,688  $1,909,274  
Commercial and industrial2,395  —  2,395  4,531  1,882,700  354  1,889,980  
Commercial real estate owner occupied5,388  —  5,388  1,963  537,992  6,664  552,007  
Commercial real estate non-owner occupied8,034  —  8,034  76  1,211,892  3,527  1,223,529  
Construction—  —  —  —  118,418  —  118,418  
Residential real estate5,924  —  5,924  6,128  359,491  3,471  375,014  
Manufactured housing (5)
3,699  1,794  5,493  1,655  61,649  1,601  70,398  
Other consumer5,756  —  5,756  1,551  1,170,793  183  1,178,283  
Total$33,329  $1,794  $35,123  $20,021  $7,244,271  $17,488  $7,316,903  

December 31, 2018
(amounts in thousands)
30-89 Days past due (1)
90 Days or more past due (1)
Total past due (1)
Non- accrual
Current (2)
Purchased-credit-impaired loans (3)
Total loans and leases (4)
Multi-family$—  $—  $—  $1,155  $3,282,452  $1,690  $3,285,297  
Commercial and industrial1,914  —  1,914  17,764  1,353,586  536  1,373,800  
Commercial real estate owner occupied193  —  193  1,037  567,809  8,438  577,477  
Commercial real estate non-owner occupied1,190  —  1,190  129  1,119,443  4,344  1,125,106  
Construction—  —  —  —  56,491  —  56,491  
Residential real estate5,940  —  5,940  5,605  550,679  4,337  566,561  
Manufactured housing (5)
3,926  2,188  6,114  1,693  69,916  2,008  79,731  
Other consumer200  —  200  111  73,503  221  74,035  
Total$13,363  $2,188  $15,551  $27,494  $7,073,879  $21,574  $7,138,498  
(1)Includes past-due loans and leases that are accruing interest because collection is considered probable.
(2)Loans and leases where next payment due is less than 30 days from the report date.
(3)Purchased-credit-impaired loans aggregated into a pool are accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, and the past due status of the pools, or that of the individual loans within the pools, is not meaningful. Due to the credit impaired nature of the loans, the loans are recorded at a discount reflecting estimated future cash flows and the Bank recognizes interest income on each pool of loans reflecting the estimated yield and passage of time. Such loans are considered to be performing. Purchased-credit-impaired loans that are not in pools accrete interest when the timing and amount of their expected cash flows are reasonably estimable, and are reported as performing loans.
(4)Amounts exclude deferred costs and fees, unamortized premiums and discounts, and the ALLL.
(5)Certain manufactured housing loans purchased in 2010 are supported by cash reserves held at the Bank of $0.1 million and $0.5 million at December 31, 2019 and 2018, respectively, which are used to fund past-due payments when the loan becomes 90 days or more delinquent. Each quarter, these funds are evaluated to determine if they would be sufficient to absorb the probable incurred losses within the manufactured housing portfolio.
As of both December 31, 2019 and 2018, the Bank had $0.2 million, respectively, of residential real estate held in OREO. As of December 31, 2019 and 2018, the Bank had initiated foreclosure proceedings on $0.9 million and $2.1 million, respectively, in loans secured by residential real estate.
Allowance for loan and lease losses:
The changes in the ALLL for the years ended December 31, 2019 and 2018, and the loans and leases and ALLL by loan and lease type based on impairment-evaluation method as of December 31, 2019 and 2018 are presented in the tables below.
Twelve months ended December 31, 2019Multi-familyCommercial and industrialCommercial real estate owner occupiedCommercial real estate non-owner occupiedConstructionResidential real estateManufactured housingOther consumerTotal
(amounts in thousands)
Ending Balance,
December 31, 2018		$11,462  $12,145  $3,320  $6,093  $624  $3,654  $145  $2,529  $39,972  
Charge-offs(541) (532) (119) —  —  (297) —  (8,101) (9,590) 
Recoveries7  1,050  236  —  136  27  —  314  1,770  
Provision for loan and lease losses(4,771) 2,893  (1,202) 150  502  (166) 915  25,906  24,227  
Ending Balance,
December 31, 2019		$6,157  $15,556  $2,235  $6,243  $1,262  $3,218  $1,060  $20,648  $56,379  
As of December 31, 2019
(amounts in thousands)
Loans and leases receivable:
Individually evaluated for impairment$4,117  $4,591  $1,976  $76  $—  $9,063  $9,898  $1,551  $31,272  
Collectively evaluated for impairment1,903,469  1,885,035  543,367  1,219,926  118,418  362,480  58,899  1,176,549  7,268,143  
Loans acquired with credit deterioration1,688  354  6,664  3,527  —  3,471  1,601  183  17,488  
Total loans and leases receivable$1,909,274  $1,889,980  $552,007  $1,223,529  $118,418  $375,014  $70,398  $1,178,283  $7,316,903  
Allowance for loan and lease losses:
Individually evaluated for impairment$—  $523  $83  $—  $—  $44  $129  $73  $852  
Collectively evaluated for impairment6,157  14,768  2,113  4,361  1,262  2,923  897  20,420  52,901  
Loans acquired with credit deterioration—  265  39  1,882  —  251  34  155  2,626  
Total allowance for loan and lease losses$6,157  $15,556  $2,235  $6,243  $1,262  $3,218  $1,060  $20,648  $56,379  
Twelve months ended December 31, 2018Multi-familyCommercial and industrialCommercial real estate owner occupiedCommercial real estate non-owner occupiedConstructionResidential real estateManufactured housingOther consumerTotal
(amounts in thousands)
Ending Balance,
December 31, 2017		$12,168  $10,918  $3,232  $7,437  $979  $2,929  $180  $172  $38,015  
Charge-offs—  (1,722) (747) —  —  (466) —  (1,822) (4,757) 
Recoveries—  403  326  5  241  76  —  21  1,072  
Provision for loan and lease losses(706) 2,546  509  (1,349) (596) 1,115  (35) 4,158  5,642  
Ending Balance,
December 31, 2018		$11,462  $12,145  $3,320  $6,093  $624  $3,654  $145  $2,529  $39,972  
As of December 31, 2018
(amounts in thousands)
Loans and leases receivable:
Individually evaluated for impairment$1,155  $17,828  $1,069  $129  $—  $8,631  $10,195  $111  $39,118  
Collectively evaluated for impairment3,282,452  1,355,436  567,970  1,120,633  56,491  553,593  67,528  73,703  7,077,806  
Loans acquired with credit deterioration1,690  536  8,438  4,344  —  4,337  2,008  221  21,574  
Total loans and leases receivable$3,285,297  $1,373,800  $577,477  $1,125,106  $56,491  $566,561  $79,731  $74,035  $7,138,498  
Allowance for loan and lease losses:
Individually evaluated for impairment$539  $261  $1  $—  $—  $41  $3  $—  $845  
Collectively evaluated for impairment10,923  11,516  3,319  4,161  624  3,227  89  2,390  36,249  
Loans acquired with credit deterioration—  368  —  1,932  —  386  53  139  2,878  
Total allowance for loan and lease losses$11,462  $12,145  $3,320  $6,093  $624  $3,654  $145  $2,529  $39,972  
Impaired Loans - Individually Evaluated for Impairment
The following tables present the recorded investment (net of charge-offs), unpaid principal balance and related allowance by loan type for impaired loans that were individually evaluated for impairment as of December 31, 2019 and 2018 and the average recorded investment and interest income recognized for the years ended December 31, 2019, 2018 and 2017, respectively. Customers had no impaired lease receivables as of December 31, 2019 and 2018. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.
December 31, 2019For the Year Ended
December 31, 2019
(amounts in thousands)Recorded investment net of charge-offsUnpaid principal balanceRelated allowanceAverage recorded investmentInterest income recognized
With no related allowance recorded:
Multi-family$4,117  $4,117  $—  $1,223  $239  
Commercial and industrial3,084  4,726  —  7,439  1,077  
Commercial real estate owner occupied1,109  1,880  —  1,111  55  
Commercial real estate non-owner occupied76  187  —  97  7  
Residential real estate4,559  4,861  —  2,766  129  
Manufactured housing4,169  4,169  —  5,638  325  
Other consumer140  140  —  4,127  266  
With an allowance recorded:
Multi-family—  —  —  231  —  
Commercial and industrial1,507  1,507  523  3,723  64  
Commercial real estate owner occupied867  878  83  278  54  
Residential real estate4,504  4,522  44  2,523  119  
Manufactured housing5,729  5,729  129  3,792  253  
Other consumer1,411  1,411  73  584  —  
Total$31,272  $34,127  $852  $33,532  $2,588  
 December 31, 2018For the Year Ended,
December 31, 2018		For the Year Ended,
December 31, 2017
(amounts in thousands)Recorded investment net of charge-offsUnpaid principal balanceRelated allowanceAverage recorded investmentInterest income recognizedAverage recorded investmentInterest income recognized
With no related allowance recorded:
Multi-family$—  $—  $—  $537  $8  $—  $—  
Commercial and industrial13,660  15,263  —  8,831  673  8,865  214  
Commercial real estate owner occupied1,037  1,766  —  776  19  1,439  70  
Commercial real estate non-owner occupied129  241  —  645  48  898  2  
Residential real estate4,842  5,128  —  4,129  151  4,617  24  
Manufactured housing10,027  10,027  —  10,015  561  10,003  558  
Other consumer111  111  —  89  1  51  —  
With an allowance recorded:
Multi-family1,155  1,155  539  231  37  —  —  
Commercial and industrial4,168  4,351  261  6,504  25  5,984  230  
Commercial real estate owner occupied32  32  1  443  3  882  —  
Residential real estate3,789  3,789  41  4,566  131  3,307  187  
Manufactured housing168  168  3  214  14  131  8  
Total$39,118  $42,031  $845  $36,980  $1,671  $36,177  $1,293  
Troubled Debt Restructurings
At December 31, 2019, 2018 and 2017, there were $13.3 million, $19.2 million and $20.4 million, respectively, in loans reported as TDRs. TDRs are reported as impaired loans in the calendar year of their restructuring and are evaluated to determine whether they should be placed on non-accrual status. In subsequent years, a TDR may be returned to accrual status if it satisfies a minimum performance requirement of six months, however, it will remain classified as impaired. Generally, the Bank requires sustained performance for nine months before returning a TDR to accrual status. Modifications of PCI loans that are accounted for within loan pools in accordance with the accounting standards for PCI loans do not result in the removal of these loans from the pool even if the modifications would otherwise be considered a TDR. Accordingly, as each pool is accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, modifications of loans within such pools are not considered TDRs. Customers had no lease receivables that had been restructured as a TDR as of December 31, 2019, 2018 and 2017, respectively.
The following table presents total TDRs based on loan type and accrual status at December 31, 2019, 2018 and 2017. Nonaccrual TDRs are included in the reported amount of total non-accrual loans.
December 31,
 201920182017
Accruing TDRsNonaccrual TDRsTotalAccruing TDRsNonaccrual TDRsTotalAccruing TDRsNonaccrual TDRsTotal
(amounts in thousands)
Commercial and industrial$60  $23  $83  $64  $5,273  $5,337  $63  $5,939  $6,002  
Commercial real estate owner occupied13  —  13  32  —  32  —  —  —  
Residential real estate2,935  631  3,566  3,026  667  3,693  3,828  703  4,531  
Manufactured housing8,243  1,382  9,625  8,502  1,620  10,122  8,130  1,766  9,896  
Other consumer—  10  10  —  12  12  —  —  —  
Total TDRs$11,251  $2,046  $13,297  $11,624  $7,572  $19,196  $12,021  $8,408  $20,429  
The following table presents loans modified in a TDR by type of concession for the years ended December 31, 2019, 2018 and 2017. There were no modifications that involved forgiveness of debt for the years ended December 31, 2019, 2018 and 2017.
 For the Years Ended December 31,
201920182017
(dollars in thousands)Number of loansRecorded investmentNumber of loansRecorded investmentNumber of loansRecorded investment
Extensions of maturity2  $514  2  $60  5  $6,497  
Interest-rate reductions26  923  39  1,615  35  1,574  
Total28  $1,437  41  $1,675  40  $8,071  
The following table provides, by loan type, the number of loans modified in TDRs and the related recorded investment for the years ended December 31, 2019, 2018 and 2017.
For the Years Ended December 31,
 201920182017
(dollars in thousands)Number of loansRecorded investmentNumber of loansRecorded investmentNumber of loansRecorded investment
Commercial and industrial1  $431  —  $—  4  $6,437  
Residential real estate1  83  2  352  —  —  
Manufactured housing26  923  38  1,310  36  1,634  
Other consumer—  —  1  13  —  —  
Total loans28  $1,437  41  $1,675  40  $8,071  
As of December 31, 2019, there were no commitments to lend additional funds to borrowers whose loans have been modified in TDRs. As of December 31, 2018 and 2017, except for one commercial and industrial loan with an outstanding commitment of $1.5 million and $2.1 million, respectively, there were no other commitments to lend additional funds to debtors whose loans have been modified in TDRs.
The following table presents, by loan type, the number of loans modified in TDRs and the related recorded investment, for which there was a payment default within twelve months following the modification:
December 31, 2019December 31, 2018December 31, 2017
(dollars in thousands)Number of loansRecorded investmentNumber of loansRecorded investmentNumber of loansRecorded investment
Residential real estate$1  $81  $—  $—  $—  $—  
Manufactured housing3  73  4  92  5  211  
Total loans4  $154  4  $92  5  $211  
Loans modified in TDRs are evaluated for impairment. The nature and extent of impairment of TDRs, including those which have experienced a subsequent default, is considered in the determination of an appropriate level of ALLL. During the year ended December 31, 2019, allowances totaling $17 thousand were recorded on fifteen loans that had been modified in TDRs. There were no allowances recorded as a result of TDR modifications during 2018. For the year ended December 31, 2017, there was one allowance resulting from TDR modifications totaling $1 thousand for one manufactured housing loan.
Purchased-Credit-Impaired Loans
The changes in accretable yield related to PCI loans for the years ended December 31, 2019, 2018 and 2017 were as follows:
 For the Years Ended December 31,
(amounts in thousands)201920182017
Accretable yield balance, beginning of period$6,178  $7,825  $10,202  
Accretion to interest income(1,144) (1,455) (1,673) 
Reclassification from nonaccretable difference and disposals, net44  (192) (704) 
Accretable yield balance, end of period$5,078  $6,178  $7,825  
Credit Quality Indicators
The ALLL represents management's estimate of probable losses in Customers' loans and leases receivable portfolio, excluding commercial mortgage warehouse loans reported at fair value pursuant to a fair value option election. Multi-family, commercial and industrial, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loans are rated based on an internally assigned risk rating system which is assigned at the time of loan origination and reviewed on a periodic, or on an “as needed” basis. Residential real estate loans, manufactured housing and other consumer loans are evaluated based on the payment activity of the loan.
To facilitate the monitoring of credit quality within the multi-family, commercial and industrial, owner occupied commercial real estate, non-owner occupied commercial real estate, and construction loan portfolios, and for purposes of analyzing historical loss rates used in the determination of the ALLL for the respective loan portfolios, the Bank utilizes the following categories of risk ratings: pass/satisfactory (includes risk rating 1 through 6), special mention, substandard, doubtful and loss. The risk rating categories, which are derived from standard regulatory rating definitions, are assigned upon initial approval of credit to borrowers and updated periodically thereafter. Pass/satisfactory ratings, which are assigned to those borrowers who do not have identified potential or well-defined weaknesses and for whom there is a high likelihood of orderly repayment, are updated periodically based on the size and credit characteristics of the borrower. All other categories are updated on a quarterly basis during the month preceding the end of the calendar quarter.  While assigning risk ratings involves judgment, the risk-rating process allows management to identify riskier credits in a timely manner and allocate the appropriate resources to manage those loans and leases.
The risk rating grades are defined as follows:
“1” – Pass/Excellent
Loans and leases rated 1 represent a credit extension of the highest quality. The borrower’s historic (at least five years) cash flows manifest extremely large and stable margins of coverage. Balance sheets are conservative, well capitalized, and liquid. After considering debt service for proposed and existing debt, projected cash flows continue to be strong and provide ample coverage. The borrower typically reflects broad geographic and product diversification and has access to alternative financial markets.
“2” – Pass/Superior
Loans and leases rated 2 are those for which the borrower has a strong financial condition, balance sheet, operations, cash flow, debt capacity and coverage with ratios better than industry norms. The borrowers of these loans and leases exhibit a limited leverage position, are virtually immune to local economies, and are in stable growing industries. The management team is well respected, and the company has ready access to public markets.
“3” – Pass/Strong
Loans and leases rated 3 are those loans and leases for which the borrowers have above average financial condition and flexibility; more than satisfactory debt service coverage; balance sheet and operating ratios are consistent with or better than industry peers; operate in industries with little risk; move in diversified markets; and are experienced and competent in their industry. These borrowers’ access to capital markets is limited mostly to private sources, often secured, but the borrower typically has access to a wide range of refinancing alternatives.
“4” – Pass/Good
Loans and leases rated 4 have a sound primary and secondary source of repayment. The borrower may have access to alternative sources of financing, but sources are not as widely available as they are to a higher-grade borrower. These loans and leases carry a normal level of risk with very low loss exposure. The borrower has the ability to perform according to the terms of the credit facility. The margins of cash flow coverage are satisfactory but vulnerable to more rapid deterioration than the higher-quality loans and leases.
“5” – Satisfactory
Loans and leases rated 5 are extended to borrowers who are considered to be a reasonable credit risk and demonstrate the ability to repay the debt from normal business operations. Risk factors may include reliability of margins and cash flows, liquidity, dependence on a single product or industry, cyclical trends, depth of management, or limited access to alternative financing sources. The borrower’s historical financial information may indicate erratic performance, but current trends are positive and the quality of financial information is adequate, but is not as detailed and sophisticated as information found on higher grade loans. If adverse circumstances arise, the impact on the borrower may be significant.
“6” – Satisfactory/Bankable with Care
Loans and leases rated 6 are those for which the borrower has higher than normal credit risk; however, cash flow and asset values are generally intact. These borrowers may exhibit declining financial characteristics, with increasing leverage and decreasing liquidity and may have limited resources and access to financial alternatives. Signs of weakness in these borrowers may include delinquent taxes, trade slowness and eroding profit margins.
“7” – Special Mention
Loans and leases rated 7 are credit facilities that may have potential developing weaknesses and deserve extra attention from the account manager and other management personnel. In the event potential weaknesses are not corrected or mitigated, deterioration in the ability of the borrower to repay the debt in the future may occur. This grade is not assigned to loans and leases that bear certain peculiar risks normally associated with the type of financing involved, unless circumstances have caused the risk to increase to a level higher than would have been acceptable when the credit was originally approved. Loans and leases where significant actual, not potential, weaknesses or problems are clearly evident are graded in the category below.
“8” – Substandard
Loans and leases are rated 8 when the loans and leases are inadequately protected by the current sound worth and payment capacity of the obligor or of the collateral pledged, if any. Loans and leases so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt and are characterized by the distinct possibility that the company will sustain some loss if the weaknesses are not corrected.
“9” – Doubtful
The Bank assigns a doubtful rating to loans and leases that have all the attributes of a substandard rating with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors that may work to the advantage of and strengthen the credit quality of the loan or lease, its classification as an estimated loss is deferred until its more exact status may be determined. Pending factors may include a proposed merger or acquisition, liquidation proceeding, capital injection, perfecting liens on additional collateral or refinancing plans.
“10” – Loss
The Bank assigns a loss rating to loans and leases considered uncollectible and of such little value that their continuance as an active asset is not warranted. Amounts classified as loss are immediately charged off.
Risk ratings are not established for certain consumer loans, including residential real estate, home equity, manufactured housing, and installment loans, mainly because these portfolios consist of a larger number of homogeneous loans with smaller balances. Instead, these portfolios are evaluated for risk mainly based upon aggregate payment history through the monitoring of delinquency levels and trends and are classified as performing and non-performing. The following tables present the credit ratings of loans and leases receivable as of December 31, 2019 and 2018.
December 31, 2019
(amounts in thousands)Multi-family Commercial and industrial Commercial real estate owner occupied Commercial real estate non-owner occupied Construction Residential real estate  Manufactured housing Other consumer
Total (3)
Pass/Satisfactory$1,816,200  $1,841,074  $536,777  $1,129,838  $118,418  $—  $—  $—  $5,442,307  
Special Mention69,637  26,285  8,286  6,949  —  —  —  —  111,157  
Substandard23,437  22,621  6,944  86,742  —  —  —  —  139,744  
Performing (1)
—  —  —  —  —  362,962  63,250  1,170,976  1,597,188  
Non-performing (2)
—  —  —  —  —  12,052  7,148  7,307  26,507  
Total$1,909,274  $1,889,980  $552,007  $1,223,529  $118,418  $375,014  $70,398  $1,178,283  $7,316,903  

December 31, 2018
(amounts in thousands)Multi-family Commercial and industrial Commercial real estate owner occupied Commercial real estate non-owner occupied Construction Residential real estate  Manufactured housing Other consumer
Total (3)
Pass/Satisfactory$3,201,822  $1,306,466  $562,639  $1,054,493  $56,491  $—  $—  $—  $6,181,911  
Special Mention55,696  30,551  9,730  30,203  —  —  —  —  126,180  
Substandard27,779  36,783  5,108  40,410  —  —  —  —  110,080  
Performing (1)
—  —  —  —  —  555,016  71,924  73,724  700,664  
Non-performing (2)
—  —  —  —  —  11,545  7,807  311  19,663  
Total$3,285,297  $1,373,800  $577,477  $1,125,106  $56,491  $566,561  $79,731  $74,035  $7,138,498  
(1)Includes residential real estate, manufactured housing, and other consumer loans not assigned internal ratings.
(2)Includes residential real estate, manufactured housing, and other consumer loans that are past due and still accruing interest or on nonaccrual status.
(3)Excludes commercial mortgage warehouse loans reported at fair value.
Loan Purchases and Sales
Purchases and sales of loans were as follows for the years ended December 31, 2019, 2018 and 2017:
For the Years Ended December 31,
(amounts in thousands)201920182017
Purchases (1)
Residential real estate$105,858  $368,402  $264,090  
Other consumer (2)
1,058,261  30,066  —  
Total$1,164,119  $398,468  $264,090  
Sales (3)
Multi-family$—  $(54,638) $(226,831) 
Commercial and industrial (4)
(22,267) (32,263) (19,974) 
Commercial real estate owner occupied (4)
(16,320) (20,218) (19,813) 
Residential real estate(230,285) —  (191,574) 
Total$(268,872) $(107,119) $(458,192) 
(1)Amounts reported represent the unpaid principal balance at time of purchase. The purchase price was 100.3%, 99.9% and 99.4% of loans outstanding for the years ended December 31, 2019, 2018 and 2017, respectively.
(2)Other consumer loan purchases for the year ended December 31, 2019 and 2018, consist of third-party originated unsecured consumer loans. None of the loans are considered sub-prime at the time of origination. Customers considers sub-prime borrowers to be those with FICO scores below 660.
(3)Amounts reported represent the unpaid principal balance at time of sale. For the years ended December 31, 2019, 2018 and 2017, loan sales resulted in net gains of $2.8 million, $3.3 million and $4.2 million, respectively.
(4)Primarily sales of SBA loans.
Loans Pledged as Collateral
Customers has pledged eligible real estate loans as collateral for potential borrowings from the FHLB and FRB in the amount of $4.6 billion and $5.4 billion at December 31, 2019 and 2018, respectively.