Loans and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2020

Receivables [Abstract]

Schedule of Collateral Dependent Loans [Table Text Block]

The following table presents the amortized cost basis of collateral dependent loans at September 30, 2020 (in thousands):

	Amortized Cost		Extent to Which Secured by Collateral
Residential and other consumer	$	3,339	$	3,331
Commercial:
Non-owner occupied commercial real estate	40,348		40,288
Construction and land	4,432		4,432
Owner occupied commercial real estate	15,107		15,107
Commercial and industrial	29,506		17,506
Bridge - franchise finance	19,122		12,724
Total commercial	108,515		90,057
	$	111,854	$	93,388

Allowance for Credit Losses on Financing Receivables

Activity in the allowance for credit losses is summarized below. The balance at December 31, 2019 and amounts presented for the three and nine months ended September 30, 2019 represent the allowance for loan and leases losses, estimated using an incurred loss methodology. The ACL at September 30, 2020 and activity for the three and nine months then ended were determined using the CECL methodology (in thousands):

	Three Months Ended September 30,
	2020						2019
	Residential and Other Consumer		Commercial		Total		Residential and Other Consumer		Commercial		Total
Beginning balance	$	10,695	$	255,428	$	266,123	$	11,236	$	100,905	$	112,141
Provision	5,331		22,315		27,646		158		1,681		1,839
Charge-offs (1)	—		(23,770)		(23,770)		—		(6,141)		(6,141)
Recoveries	4		4,125		4,129		5		618		623
Ending balance	$	16,030	$	258,098	$	274,128	$	11,399	$	97,063	$	108,462

	Nine Months Ended September 30,
	2020						2019
	Residential and Other Consumer		Commercial		Total		Residential and Other Consumer		Commercial		Total
Beginning balance	$	11,154	$	97,517	$	108,671	$	10,788	$	99,143	$	109,931
Impact of adoption of ASU 2016-13	8,098		19,207		27,305		—		—		—
Balance after adoption of CECL	19,252		116,724		135,976		—		—		—
Provision (recovery)	(3,241)		184,336		181,095		439		8,934		9,373
Charge-offs	(31)		(50,723)		(50,754)		—		(13,985)		(13,985)
Recoveries	50		7,761		7,811		172		2,971		3,143
Ending balance	$	16,030	$	258,098	$	274,128	$	11,399	$	97,063	$	108,462

(1)Charge-offs for the three months ended September 30, 2020 includes $22.1 million related to one commercial and industrial relationship that was risk rated substandard prior to the onset of the COVID-19 pandemic.

The following table presents the components of the provision for credit losses for the periods indicated (in thousands):

	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
Amount related to funded portion of loans	$	27,646	$	181,095
Amount related to off-balance sheet credit exposures	(93)		(2,700)
Amount related to accrued interest receivable	1,063		1,063
Provision for credit losses - loans	28,616		179,458
Provision for credit losses - AFS debt securities	616		616
Total provision for credit losses	$	29,232	$	180,074

Financing Receivable, Past Due

	September 30, 2020										December 31, 2019
	Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total		Current		30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or More Past Due		Total
1-4 single family residential	$	4,790,941	$	41,899	$	2,280	$	10,036	$	4,845,156	$	4,887,618	$	45,634	$	9,578	$	11,106	$	4,953,936
Government insured residential	382,620		70,183		45,355		590,897		1,089,055		93,560		45,347		30,426		529,311		698,644
Other consumer loans	6,434		233		22		—		6,689		8,539		—		—		—		8,539
Multi-family	1,778,604		23,152		8,370		—		1,810,126		2,217,705		—		—		—		2,217,705
Non-owner occupied commercial real estate	4,709,649		51,512		130,454		19,220		4,910,835		5,015,458		—		928		14,518		5,030,904
Construction and land	263,035		—		—		346		263,381		240,647		2,396		—		882		243,925
Owner occupied commercial real estate	2,036,782		630		1,706		12,459		2,051,577		2,041,352		1,336		4,420		15,700		2,062,808
Commercial and industrial	4,358,670		27,840		4,891		35,950		4,427,351		4,595,847		2,313		4,301		52,888		4,655,349
PPP	829,798		—		—		—		829,798		—		—		—		—		—
Pinnacle	1,157,706		—		—		—		1,157,706		1,202,430		—		—		—		1,202,430
Bridge - franchise finance	577,583		19		13,041		15,579		606,222		610,315		3,840		2,501		10,826		627,482
Bridge - equipment finance	530,516		—		—		—		530,516		677,089		7,705		—		—		684,794
Mortgage warehouse lending	1,250,903		—		—		—		1,250,903		768,472		—		—		—		768,472
	$	22,673,241	$	215,468	$	206,119	$	684,487	$	23,779,315	$	22,359,032	$	108,571	$	52,154	$	635,231	$	23,154,988

Impaired Financing Receivables

The following table presents information about loans on non-accrual status at the dates indicated (in thousands):

	September 30, 2020				December 31, 2019
	Amortized Cost		Amortized Cost With No Related Allowance		Amortized Cost
Residential and other consumer	$	8,031	$	2,683	$	18,894
Commercial:
Multi-family	—		—		6,138
Non-owner occupied commercial real estate	54,944		27,002		40,097
Construction and land	4,432		4,086		3,191
Owner occupied commercial real estate	23,953		4,835		27,141
Commercial and industrial	72,094		11,898		74,757
Bridge - franchise finance	32,762		2,458		13,631
Bridge - equipment finance	—		—		20,939
	$	196,216	$	52,962	$	204,788

Financing Receivable Credit Quality Indicators

FICO scores are generally updated at least annually, and were most recently updated in the third quarter of 2020. LTVs are typically at origination since we do not routinely update residential appraisals. Substantially all of the government insured residential loans are government insured buyout loans, which the Company buys out of GNMA securitizations upon default. For these loans, traditional measures of credit quality are not particularly relevant considering the guaranteed nature of the loans and the underlying business model. Factors that impact risk inherent in the residential portfolio segment include national and regional economic conditions such as levels of unemployment and wages, as well as residential property values.

1-4 Single Family Residential credit exposure, excluding government insured residential loans, based on delinquency status: 

	September 30, 2020
	Amortized Cost By Origination Year
	2020		2019		2018		2017		2016		Prior		Total
Current	$	528,199	$	741,476	$	426,780	$	699,906	$	833,132	$	1,561,448	$	4,790,941
30 - 59 Days Past Due	8,663		6,838		5,691		1,568		1,855		17,284		41,899
60 - 89 Days Past Due	—		—		—		—		24		2,256		2,280
90 Days or More Past Due	—		807		1,761		53		1,004		6,411		10,036
	$	536,862	$	749,121	$	434,232	$	701,527	$	836,015	$	1,587,399	$	4,845,156

	December 31, 2019
	Amortized Cost By Origination Year
	2019		2018		2017		2016		2015		Prior		Total
Current	$	804,913	$	609,814	$	830,710	$	783,318	$	633,833	$	1,225,030	$	4,887,618
30 - 59 Days Past Due	13,915		3,003		3,751		8,419		4,308		12,238		45,634
60 - 89 Days Past Due	1,785		442		137		486		1,766		4,962		9,578
90 Days or More Past Due	—		1,762		914		—		5,030		3,400		11,106
	$	820,613	$	615,021	$	835,512	$	792,223	$	644,937	$	1,245,630	$	4,953,936

1-4 Single Family Residential credit exposure, excluding government insured residential loans, based on LTV: 

	September 30, 2020
	Amortized Cost By Origination Year
LTV	2020		2019		2018		2017		2016		Prior		Total
Less than 61%	$	196,638	$	165,287	$	91,845	$	194,988	$	314,274	$	546,052	$	1,509,084
61% - 70%	150,811		177,825		103,789		133,872		210,631		386,857		1,163,785
71% - 80%	187,963		393,162		210,356		314,092		291,439		627,088		2,024,100
More than 80%	1,450		12,847		28,242		58,575		19,671		27,402		148,187
	$	536,862	$	749,121	$	434,232	$	701,527	$	836,015	$	1,587,399	$	4,845,156

	December 31, 2019
	Amortized Cost By Origination Year
LTV	2019		2018		2017		2016		2015		Prior		Total
Less than 61%	$	171,069	$	134,978	$	183,807	$	228,868	$	197,039	$	372,221	$	1,287,982
61% - 70 %	195,572		128,766		152,502		188,856		154,307		316,031		1,136,034
71% - 80%	442,311		313,779		404,743		338,000		283,202		531,377		2,313,412
More than 80%	11,661		37,498		94,460		36,499		10,389		26,001		216,508
	$	820,613	$	615,021	$	835,512	$	792,223	$	644,937	$	1,245,630	$	4,953,936

1-4 Single Family Residential credit exposure, excluding government insured residential loans, based on FICO score:

	September 30, 2020
	Amortized Cost By Origination Year
FICO	2020		2019		2018		2017		2016		Prior		Total
760 or greater	$	411,055	$	515,046	$	269,976	$	518,064	$	619,639	$	1,084,645	$	3,418,425
720 - 759	94,190		141,462		90,222		116,482		146,092		282,188		870,636
719 or less	31,617		92,613		74,034		66,981		70,284		220,566		556,095
	$	536,862	$	749,121	$	434,232	$	701,527	$	836,015	$	1,587,399	$	4,845,156

	December 31, 2019
	Amortized Cost By Origination Year
FICO	2019		2018		2017		2016		2015		Prior		Total
760 or greater	$	470,057	$	340,716	$	534,017	$	533,804	$	430,706	$	763,807	$	3,073,107
720 - 759	242,806		185,939		200,623		178,139		141,748		307,195		1,256,450
719 or less	107,750		88,366		100,872		80,280		72,483		174,628		624,379
	$	820,613	$	615,021	$	835,512	$	792,223	$	644,937	$	1,245,630	$	4,953,936

Credit quality indicators for commercial loans

Factors that impact risk inherent in commercial portfolio segments include but are not limited to levels of economic activity, health of the national and regional economy, industry trends, patterns of and trends in customer behavior that influence demand for our borrowers' products and services, and commercial real estate values. Internal risk ratings are considered the most meaningful indicator of credit quality for commercial loans. Internal risk ratings are generally indicative of the likelihood that a borrower will default, are a key factor influencing the level and nature of ongoing monitoring of loans and may impact the estimation of the ACL. Internal risk ratings are updated on a continuous basis. Generally, relationships with balances in excess of defined thresholds, ranging from $1 million to $3 million, are re-evaluated at least annually and more frequently if circumstances indicate that a change in risk rating may be warranted. Since the onset of the COVID-19 pandemic, risk ratings have been re-evaluated for a substantial portion of the commercial portfolio, with a focus on portfolio segments we identified for enhanced monitoring and loans that have been modified or for which we granted temporary payment deferrals. Loans exhibiting potential credit weaknesses that deserve management’s close attention and that could result in deterioration of repayment prospects at some future date if not checked or corrected are categorized as special mention. Loans with well-defined credit weaknesses, including payment defaults, declining collateral values, frequent overdrafts, operating losses, increasing balance sheet leverage, inadequate cash flow from current operations, project cost overruns, unreasonable construction delays, past due real estate taxes or exhausted interest reserves, are assigned an internal risk rating of substandard. A loan with a weakness so severe that collection in full is highly questionable or improbable, but because of certain reasonably specific pending factors has not been charged off, will be assigned an internal risk rating of doubtful. 

Commercial credit exposure based on internal risk rating:

	September 30, 2020
	Amortized Cost By Origination Year												Revolving Loans
	2020		2019		2018		2017		2016		Prior				Total
Multi-Family
Pass	$	184,395	$	275,468	$	157,381	$	207,788	$	312,223	$	474,288	$	37,408	$	1,648,951
Special mention	—		—		15,766		11,260		1,850		—		—		28,876
Substandard	—		26,150		—		15,778		14,157		76,214		—		132,299
Total Multi-Family	$	184,395	$	301,618	$	173,147	$	234,826	$	328,230	$	550,502	$	37,408	$	1,810,126
Non-owner occupied commercial real estate
Pass	$	296,417	$	1,144,727	$	751,798	$	457,210	$	512,790	$	683,050	$	103,687	$	3,949,679
Special mention	—		47,096		13,876		67,386		95,819		102,938		—		327,115
Substandard	11,449		86,647		61,170		17,410		233,371		223,994		—		634,041
Total non-owner occupied commercial real estate	$	307,866	$	1,278,470	$	826,844	$	542,006	$	841,980	$	1,009,982	$	103,687	$	4,910,835
Construction and Land
Pass	$	20,155	$	130,156	$	7,690	$	49,021	$	27,092	$	913	$	241	$	235,268
Special mention	—		—		8,083		8,604		4,284		—		—		20,971
Substandard	—		1,423		1,288		—		4,085		346		—		7,142
Total Construction and Land	$	20,155	$	131,579	$	17,061	$	57,625	$	35,461	$	1,259	$	241	$	263,381
Owner occupied commercial real estate
Pass	$	197,281	$	267,705	$	264,479	$	251,357	$	304,613	$	393,316	$	19,841	$	1,698,592
Special mention	2,614		48,328		11,636		65,822		23,023		25,217		17,227		193,867
Substandard	—		20,762		18,767		11,751		23,549		75,149		9,140		159,118
Total owner occupied commercial real estate	$	199,895	$	336,795	$	294,882	$	328,930	$	351,185	$	493,682	$	46,208	$	2,051,577
Commercial and industrial
Pass	$	373,737	$	899,913	$	314,032	$	275,778	$	198,928	$	52,623	$	1,770,311	$	3,885,322
Special mention	11,390		82,659		18,971		1,406		23,127		6,309		52,626		196,488
Substandard	11,978		70,971		67,610		12,037		25,189		30,003		127,753		345,541
Total commercial and industrial	$	397,105	$	1,053,543	$	400,613	$	289,221	$	247,244	$	88,935	$	1,950,690	$	4,427,351
PPP
Pass	$	829,798	$	—	$	—	$	—	$	—	$	—	$	—	$	829,798
PPP	$	829,798	$	—	$	—	$	—	$	—	$	—	$	—	$	829,798
Pinnacle
Pass	$	141,475	$	120,453	$	74,711	$	214,037	$	212,343	$	394,687	$	—	$	1,157,706
Total Pinnacle	$	141,475	$	120,453	$	74,711	$	214,037	$	212,343	$	394,687	$	—	$	1,157,706
Bridge - Franchise Finance
Pass	$	52,422	$	91,804	$	30,647	$	15,771	$	16,455	$	13,191	$	—	$	220,290
Special mention	5,403		89,369		27,752		7,022		6,697		3,395		—		139,638
Substandard	29,908		82,014		81,021		28,821		18,376		5,216		—		245,356
Doubtful	—		—		—		—		938		—		—		938
Total Bridge - Franchise Finance	$	87,733	$	263,187	$	139,420	$	51,614	$	42,466	$	21,802	$	—	$	606,222
Bridge - Equipment Finance
Pass	$	24,073	$	187,592	$	75,598	$	57,313	$	42,307	$	58,139	$	—	$	445,022
Special mention	—		—		20,034		24,992		—		—		—		45,026
Substandard	—		3,452		10,620		26,396		—		—		—		40,468
Total Bridge - Equipment Finance	$	24,073	$	191,044	$	106,252	$	108,701	$	42,307	$	58,139	$	—	$	530,516
Mortgage Warehouse Lending
Pass	$	—	$	—	$	—	$	—	$	—	$	—	$	1,250,903	$	1,250,903
Total Mortgage Warehouse Lending	$	—	$	—	$	—	$	—	$	—	$	—	$	1,250,903	$	1,250,903

At September 30, 2020, the balance of revolving loans converted to term loans was immaterial.

The following tables summarize the Company's commercial credit exposure based on internal risk rating, in aggregate, at the dates indicated (in thousands):

	September 30, 2020
	Multi-Family		Non-Owner Occupied Commercial Real Estate		Construction and Land		Owner Occupied Commercial Real Estate		Commercial and Industrial		PPP		Pinnacle		Bridge - Franchise Finance		Bridge - Equipment Finance		Mortgage Warehouse Lending		Total
Pass	$	1,648,951	$	3,949,679	$	235,268	$	1,698,592	$	3,885,322	$	829,798	$	1,157,706	$	220,290	$	445,022	$	1,250,903	$	15,321,531
Special mention	28,876		327,115		20,971		193,867		196,488		—		—		139,638		45,026		—		951,981
Substandard(1)	132,299		634,041		7,142		159,118		345,541		—		—		245,356		40,468		—		1,563,965
Doubtful	—		—		—		—		—		—		—		938		—		—		938
	$	1,810,126	$	4,910,835	$	263,381	$	2,051,577	$	4,427,351	$	829,798	$	1,157,706	$	606,222	$	530,516	$	1,250,903	$	17,838,415

(1)Includes $1.4 billion of substandard accruing loans at September 30, 2020.

	December 31, 2019
	Multi-Family		Non-Owner Occupied Commercial Real Estate		Construction and Land		Owner Occupied Commercial Real Estate		Commercial and Industrial		Pinnacle		Bridge - Franchise Finance		Bridge - Equipment Finance		Mortgage Warehouse Lending		Total
Pass	$	2,184,771	$	4,932,279	$	240,734	$	1,991,556	$	4,508,563	$	1,202,430	$	562,042	$	663,855	$	768,472	$	17,054,702
Special mention	—		5,831		—		27,870		28,498		—		10,682		—		—		72,881
Substandard (1)	32,934		92,794		3,191		43,382		118,288		—		54,758		20,939		—		366,286
	$	2,217,705	$	5,030,904	$	243,925	$	2,062,808	$	4,655,349	$	1,202,430	$	627,482	$	684,794	$	768,472	$	17,493,869

(1)Includes $180 million of substandard accruing loans at December 31, 2019.

Financing Receivable, Troubled Debt Restructuring

Troubled debt restructurings

The following table summarizes loans that were modified in TDRs during the periods indicated, as well as loans modified during the twelve months preceding September 30, 2020 and 2019 that experienced payment defaults during the periods indicated (dollars in thousands):

	Three Months Ended September 30,
	2020						2019
	Loans Modified in TDRs  During the Period			TDRs Experiencing Payment Defaults During the Period			Loans Modified in TDRs  During the Period			TDRs Experiencing Payment Defaults During the Period
	Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost
1-4 single family residential	1	$	1,221	—	$	—	—	$	—	—	$	—
Government insured residential	148	24,031		65	10,249		133	21,421		56	8,461
Owner occupied commercial real estate	—	—		—	—		1	939		2	1,654
Commercial and industrial	—	—		—	—		2	4,445		3	1,652
Bridge - franchise finance	—	—		6	8,503		1	12,850		—	—
	149	$	25,252	71	$	18,752	137	$	39,655	61	$	11,767

	Nine Months Ended September 30,
	2020						2019
	Loans Modified in TDRs  During the Period			TDRs Experiencing Payment Defaults During the Period			Loans Modified in TDRs  During the Period			TDRs Experiencing Payment Defaults During the Period
	Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost		Number of TDRs	Amortized Cost
1-4 single family residential	2	$	1,422	—	$	—	2	$	560	—	$	—
Government insured residential	213	33,593		99	16,559		171	26,992		58	8,687
Non-owner occupied commercial real estate	1	4,249		1	4,249		1	11,791		1	2,671
Owner occupied commercial real estate	—	—		—	—		1	939		3	1,944
Commercial and industrial	1	305		—	—		7	21,167		3	1,652
Bridge - franchise finance	9	14,554		7	12,081		4	15,715		—	—
	226	$	54,123	107	$	32,889	186	$	77,164	65	$	14,954