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Loans Receivable and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2018
Loans and Leases Receivable Disclosure [Abstract] |
Loans Receivable and Allowance for Credit Losses | Loans Receivable and Allowance for Credit Losses The Company’s held-for-investment loan portfolio includes originated and purchased loans. Originated and purchased loans with no evidence of credit deterioration at their acquisition date are referred to collectively as non-PCI loans. PCI loans are loans acquired with evidence of credit deterioration since their origination and for which it is probable at the acquisition date that the Company would be unable to collect all contractually required payments. PCI loans are accounted for under ASC Subtopic 310-30, Loans and Debt Securities Acquired with Deteriorated Credit Quality. The Company has elected to account for PCI loans on a pool level basis under ASC 310-30 at the time of acquisition. The following table presents the composition of the Company’s non-PCI and PCI loans as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018 |  | December 31, 2017
| Non-PCI Loans (1) |  | PCI Loans (2) |  | Total (1)(2) |  | Non-PCI Loans (1) |  | PCI Loans (2) |  | Total (1)(2)
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 10,807,262 |  |  | $ | 11,042 |  |  | $ | 10,818,304 |  |  | $ | 10,685,436 |  |  | $ | 11,795 |  |  | $ | 10,697,231 |
CRE |  | 8,762,910 |  |  | 259,836 |  |  | 9,022,746 |  |  | 8,659,209 |  |  | 277,688 |  |  | 8,936,897 |
Multifamily residential |  | 1,898,517 |  |  | 56,338 |  |  | 1,954,855 |  |  | 1,855,128 |  |  | 61,048 |  |  | 1,916,176 |
Construction and land |  | 669,296 |  |  | 44 |  |  | 669,340 |  |  | 659,326 |  |  | 371 |  |  | 659,697 |
Total commercial lending |  | 22,137,985 |  |  | 327,260 |  |  | 22,465,245 |  |  | 21,859,099 |  |  | 350,902 |  |  | 22,210,001 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 4,818,094 |  |  | 112,486 |  |  | 4,930,580 |  |  | 4,528,911 |  |  | 117,378 |  |  | 4,646,289 |
Home equity lines of credit (“HELOCs”) |  | 1,762,786 |  |  | 12,657 |  |  | 1,775,443 |  |  | 1,768,917 |  |  | 14,007 |  |  | 1,782,924 |
Other consumer |  | 383,980 |  |  | — |  |  | 383,980 |  |  | 336,504 |  |  | — |  |  | 336,504 |
Total consumer lending |  | 6,964,860 |  |  | 125,143 |  |  | 7,090,003 |  |  | 6,634,332 |  |  | 131,385 |  |  | 6,765,717 |
Total loans held-for-investment |  | $ | 29,102,845 |  |  | $ | 452,403 |  |  | $ | 29,555,248 |  |  | $ | 28,493,431 |  |  | $ | 482,287 |  |  | $ | 28,975,718 |
Allowance for loan losses |  | (297,607 | ) |  | (47 | ) |  | (297,654 | ) |  | (287,070 | ) |  | (58 | ) |  | (287,128 | )
Loans held-for-investment, net |  | $ | 28,805,238 |  |  | $ | 452,356 |  |  | $ | 29,257,594 |  |  | $ | 28,206,361 |  |  | $ | 482,229 |  |  | $ | 28,688,590 |
(1) | Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(36.6) million and $(34.0) million as of March 31, 2018 and December 31, 2017, respectively.
(2) | Includes ASC 310-30 discount of $32.2 million and $35.3 million as of March 31, 2018 and December 31, 2017, respectively.
The commercial lending portfolio includes C&I, CRE, multifamily residential, and construction and land loans. Consumer lending portfolio includes single-family residential, HELOC and other consumer loans. The C&I loan portfolio, which is comprised of commercial business and trade finance loans, provides financing to businesses in a wide spectrum of industries. The CRE loan portfolio includes income producing real estate loans where the interest rates may be fixed, variable or hybrid. Included in the CRE loan portfolio are owner occupied and non-owner occupied loans (where 50% or more of the debt service for the loan is provided by rental income). Construction loans in the construction and land loan portfolio mainly provide financing for the construction of hotels, multifamily and residential condominiums, as well as mixed use (residential and retail) structures. Residential loans are comprised of multifamily residential loans in the commercial lending portfolio and single-family residential loans in the consumer lending portfolio. The Company offers a variety of first lien mortgage loan programs, including fixed rate conforming loans as well as adjustable rate mortgage loans with interest rates that adjust annually after the initial fixed rate periods of one to seven years. The HELOC loan portfolio is largely comprised of loans originated through a reduced documentation loan program, where a substantial down payment is required, resulting in a low loan-to-value ratio, typically 60% or less at origination. The Company is in a first lien position for many of these reduced documentation HELOCs. These loans have historically experienced low delinquency and default rates. Other consumer loans are mainly comprised of insurance premium financing and credit card loans. All loans originated are subject to the Company’s underwriting guidelines and loan origination standards. Management believes that the Company’s underwriting criteria and procedures adequately consider the unique risks associated with these products. The Company conducts a variety of quality control procedures and periodic audits, including the review of lending and legal requirements, to ensure that it is in compliance with these requirements. As of March 31, 2018 and December 31, 2017, loans totaling $19.50 billion and $18.88 billion, respectively, were pledged to secure borrowings and to provide additional borrowing capacity from the FRB and the FHLB. Credit Quality Indicators All loans are subject to the Company’s internal and external credit review and monitoring. Loans are risk rated based on an analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of all repayment sources, the borrower’s current payment performance/delinquency, current financial and liquidity status and all other relevant information. For single-family residential loans, payment performance/delinquency is the driving indicator for the risk ratings. Risk ratings are the overall credit quality indicator for the Company and the credit quality indicator utilized for estimating the appropriate allowance for loan losses. The Company utilizes a risk rating system, which classifies loans within the following categories: Pass, Watch, Special Mention, Substandard, Doubtful and Loss. The risk ratings reflect the relative strength of the repayment sources. Pass and Watch loans are loans that have sufficient sources of repayment in order to repay the loan in full in accordance with all terms and conditions. Special Mention loans are loans that have potential weaknesses that warrant closer attention by management. Special Mention is a transitory grade. If potential weaknesses are resolved, the loan is upgraded to a Pass or Watch grade. If negative trends in the borrower’s financial status or other information indicate that the repayment sources may become inadequate, the loan is downgraded to a Substandard grade. Substandard loans are loans that have well-defined weaknesses that jeopardize the full and timely repayment of the loan. Substandard loans have a distinct possibility of loss, if the deficiencies are not corrected. Additionally, when management has assessed a potential for loss but a distinct possibility of loss is not recognizable, the loan remains classified as Substandard grade. Doubtful loans have insufficient sources of repayment and a high probability of loss. Loss loans are loans that are uncollectible and of such little value that they are no longer considered bankable assets. These internal risk ratings are reviewed routinely and adjusted based on changes in the borrowers’ financial status and the loans’ collectability. The following tables present the credit risk ratings for non-PCI loans by portfolio segment as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total Non-PCI Loans
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 10,464,618 |  |  | $ | 164,161 |  |  | $ | 150,565 |  |  | $ | 27,918 |  |  | $ | 10,807,262 |
CRE |  | 8,614,575 |  |  | 41,942 |  |  | 106,393 |  |  | — |  |  | 8,762,910 |
Multifamily residential |  | 1,884,434 |  |  | — |  |  | 14,083 |  |  | — |  |  | 1,898,517 |
Construction and land |  | 614,481 |  |  | 684 |  |  | 54,131 |  |  | — |  |  | 669,296 |
Total commercial lending |  | 21,578,108 |  |  | 206,787 |  |  | 325,172 |  |  | 27,918 |  |  | 22,137,985 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 4,803,472 |  |  | 7,563 |  |  | 7,059 |  |  | — |  |  | 4,818,094 |
HELOCs |  | 1,753,398 |  |  | 2,451 |  |  | 6,937 |  |  | — |  |  | 1,762,786 |
Other consumer |  | 381,487 |  |  | 2 |  |  | 2,491 |  |  | — |  |  | 383,980 |
Total consumer lending |  | 6,938,357 |  |  | 10,016 |  |  | 16,487 |  |  | — |  |  | 6,964,860 |
Total |  | $ | 28,516,465 |  |  | $ | 216,803 |  |  | $ | 341,659 |  |  | $ | 27,918 |  |  | $ | 29,102,845 |
($ in thousands) |  | December 31, 2017
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total Non-PCI Loans
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 10,369,516 |  |  | $ | 114,769 |  |  | $ | 180,269 |  |  | $ | 20,882 |  |  | $ | 10,685,436 |
CRE |  | 8,484,635 |  |  | 65,616 |  |  | 108,958 |  |  | — |  |  | 8,659,209 |
Multifamily residential |  | 1,839,958 |  |  | — |  |  | 15,170 |  |  | — |  |  | 1,855,128 |
Construction and land |  | 614,441 |  |  | 4,590 |  |  | 40,295 |  |  | — |  |  | 659,326 |
Total commercial lending |  | 21,308,550 |  |  | 184,975 |  |  | 344,692 |  |  | 20,882 |  |  | 21,859,099 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 4,490,672 |  |  | 16,504 |  |  | 21,735 |  |  | — |  |  | 4,528,911 |
HELOCs |  | 1,744,903 |  |  | 11,900 |  |  | 12,114 |  |  | — |  |  | 1,768,917 |
Other consumer |  | 333,895 |  |  | 111 |  |  | 2,498 |  |  | — |  |  | 336,504 |
Total consumer lending |  | 6,569,470 |  |  | 28,515 |  |  | 36,347 |  |  | — |  |  | 6,634,332 |
Total |  | $ | 27,878,020 |  |  | $ | 213,490 |  |  | $ | 381,039 |  |  | $ | 20,882 |  |  | $ | 28,493,431 |
The following tables present the credit risk ratings for PCI loans by portfolio segment as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total PCI Loans
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 10,071 |  |  | $ | 23 |  |  | $ | 948 |  |  | $ | — |  |  | $ | 11,042 |
CRE |  | 219,255 |  |  | 2,525 |  |  | 38,056 |  |  | — |  |  | 259,836 |
Multifamily residential |  | 52,426 |  |  | — |  |  | 3,912 |  |  | — |  |  | 56,338 |
Construction and land |  | 44 |  |  | — |  |  | — |  |  | — |  |  | 44 |
Total commercial lending |  | 281,796 |  |  | 2,548 |  |  | 42,916 |  |  | — |  |  | 327,260 |
Consumer lending: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 111,567 |  |  | 748 |  |  | 171 |  |  | — |  |  | 112,486 |
HELOCs |  | 12,435 |  |  | 212 |  |  | 10 |  |  | — |  |  | 12,657 |
Total consumer lending |  | 124,002 |  |  | 960 |  |  | 181 |  |  | — |  |  | 125,143 |
Total (1) |  | $ | 405,798 |  |  | $ | 3,508 |  |  | $ | 43,097 |  |  | $ | — |  |  | $ | 452,403 |
($ in thousands) |  | December 31, 2017
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total PCI Loans
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 10,712 |  |  | $ | 57 |  |  | $ | 1,026 |  |  | $ | — |  |  | $ | 11,795 |
CRE |  | 238,605 |  |  | 531 |  |  | 38,552 |  |  | — |  |  | 277,688 |
Multifamily residential |  | 56,720 |  |  | — |  |  | 4,328 |  |  | — |  |  | 61,048 |
Construction and land |  | 44 |  |  | — |  |  | 327 |  |  | — |  |  | 371 |
Total commercial lending |  | 306,081 |  |  | 588 |  |  | 44,233 |  |  | — |  |  | 350,902 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 113,905 |  |  | 1,543 |  |  | 1,930 |  |  | — |  |  | 117,378 |
HELOCs |  | 12,642 |  |  | — |  |  | 1,365 |  |  | — |  |  | 14,007 |
Total consumer lending |  | 126,547 |  |  | 1,543 |  |  | 3,295 |  |  | — |  |  | 131,385 |
Total (1) |  | $ | 432,628 |  |  | $ | 2,131 |  |  | $ | 47,528 |  |  | $ | — |  |  | $ | 482,287 |
(1) | Loans net of ASC 310-30 discount.
Nonaccrual and Past Due Loans Non-PCI loans that are 90 or more days past due are generally placed on nonaccrual status, unless the loan is well-collateralized or guaranteed by government agencies, and in the process of collection. Non-PCI 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 on non-PCI loans as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018
| Accruing Loans 30-59 Days Past Due |  | Accruing Loans 60-89 Days Past Due |  | Accruing Loans 90 or More Days Past Due |  | Total Accruing Past Due Loans |  | Nonaccrual Loans Less Than 90 Days Past Due |  | Nonaccrual Loans 90 or More Days Past Due |  | Total Nonaccrual Loans |  | Current Accruing Loans |  | Total Non-PCI Loans
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 16,767 |  |  | $ | 1,649 |  |  | $ | 2,381 |  |  | $ | 20,797 |  |  | $ | 38,609 |  |  | $ | 42,198 |  |  | $ | 80,807 |  |  | $ | 10,705,658 |  |  | $ | 10,807,262 |
CRE |  | 6,872 |  |  | 2,095 |  |  | — |  |  | 8,967 |  |  | 5,321 |  |  | 21,175 |  |  | 26,496 |  |  | 8,727,447 |  |  | 8,762,910 |
Multifamily residential |  | 2,958 |  |  | 14 |  |  | — |  |  | 2,972 |  |  | 1,000 |  |  | 1,050 |  |  | 2,050 |  |  | 1,893,495 |  |  | 1,898,517 |
Construction and land |  | 1,804 |  |  | — |  |  | — |  |  | 1,804 |  |  | — |  |  | 3,973 |  |  | 3,973 |  |  | 663,519 |  |  | 669,296 |
Total commercial lending |  | 28,401 |  |  | 3,758 |  |  | 2,381 |  |  | 34,540 |  |  | 44,930 |  |  | 68,396 |  |  | 113,326 |  |  | 21,990,119 |  |  | 22,137,985 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 8,230 |  |  | 7,733 |  |  | — |  |  | 15,963 |  |  | 6 |  |  | 7,459 |  |  | 7,465 |  |  | 4,794,666 |  |  | 4,818,094 |
HELOCs |  | 4,421 |  |  | 2,369 |  |  | — |  |  | 6,790 |  |  | 26 |  |  | 6,909 |  |  | 6,935 |  |  | 1,749,061 |  |  | 1,762,786 |
Other consumer |  | 24 |  |  | 2 |  |  | — |  |  | 26 |  |  | — |  |  | 2,491 |  |  | 2,491 |  |  | 381,463 |  |  | 383,980 |
Total consumer lending |  | 12,675 |  |  | 10,104 |  |  | — |  |  | 22,779 |  |  | 32 |  |  | 16,859 |  |  | 16,891 |  |  | 6,925,190 |  |  | 6,964,860 |
Total |  | $ | 41,076 |  |  | $ | 13,862 |  |  | $ | 2,381 |  |  | $ | 57,319 |  |  | $ | 44,962 |  |  | $ | 85,255 |  |  | $ | 130,217 |  |  | $ | 28,915,309 |  |  | $ | 29,102,845 |
($ in thousands) |  | December 31, 2017
| Accruing Loans 30-59 Days Past Due |  | Accruing Loans 60-89 Days Past Due |  | Accruing Loans 90 or More Days Past Due |  | Total Accruing Past Due Loans |  | Nonaccrual Loans Less Than 90 Days Past Due |  | Nonaccrual Loans 90 or More Days Past Due |  | Total Nonaccrual Loans |  | Current Accruing Loans |  | Total Non-PCI Loans
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 30,964 |  |  | $ | 82 |  |  | $ | — |  |  | $ | 31,046 |  |  | $ | 27,408 |  |  | $ | 41,805 |  |  | $ | 69,213 |  |  | $ | 10,585,177 |  |  | $ | 10,685,436 |
CRE |  | 3,414 |  |  | 466 |  |  | — |  |  | 3,880 |  |  | 5,430 |  |  | 21,556 |  |  | 26,986 |  |  | 8,628,343 |  |  | 8,659,209 |
Multifamily residential |  | 4,846 |  |  | 14 |  |  | — |  |  | 4,860 |  |  | 1,418 |  |  | 299 |  |  | 1,717 |  |  | 1,848,551 |  |  | 1,855,128 |
Construction and land |  | 758 |  |  | — |  |  | — |  |  | 758 |  |  | — |  |  | 3,973 |  |  | 3,973 |  |  | 654,595 |  |  | 659,326 |
Total commercial lending |  | 39,982 |  |  | 562 |  |  | — |  |  | 40,544 |  |  | 34,256 |  |  | 67,633 |  |  | 101,889 |  |  | 21,716,666 |  |  | 21,859,099 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 13,269 |  |  | 5,355 |  |  | — |  |  | 18,624 |  |  | 6 |  |  | 5,917 |  |  | 5,923 |  |  | 4,504,364 |  |  | 4,528,911 |
HELOCs |  | 4,286 |  |  | 4,186 |  |  | — |  |  | 8,472 |  |  | 89 |  |  | 3,917 |  |  | 4,006 |  |  | 1,756,439 |  |  | 1,768,917 |
Other consumer |  | 14 |  |  | 23 |  |  | — |  |  | 37 |  |  | — |  |  | 2,491 |  |  | 2,491 |  |  | 333,976 |  |  | 336,504 |
Total consumer lending |  | 17,569 |  |  | 9,564 |  |  | — |  |  | 27,133 |  |  | 95 |  |  | 12,325 |  |  | 12,420 |  |  | 6,594,779 |  |  | 6,634,332 |
Total |  | $ | 57,551 |  |  | $ | 10,126 |  |  | $ | — |  |  | $ | 67,677 |  |  | $ | 34,351 |  |  | $ | 79,958 |  |  | $ | 114,309 |  |  | $ | 28,311,445 |  |  | $ | 28,493,431 |
For information on the policy for recording payments received and resuming accrual of interest on non-PCI loans that are placed on nonaccrual status, see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2017 Form 10-K. PCI loans are excluded from the above aging analysis tables as the Company has elected to account for these loans on a pool level basis under ASC 310-30 at the time of acquisition. Refer to the discussion on PCI loans within this note for additional details on interest income recognition. As of March 31, 2018 and December 31, 2017, PCI loans on nonaccrual status totaled $5.2 million and $5.3 million, respectively. Loans in Process of Foreclosure As of March 31, 2018 and December 31, 2017, residential and consumer mortgage loans of $8.3 million and $6.6 million, respectively, were secured by residential real estate properties, for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdictions. As of March 31, 2018, there were no foreclosed residential real estate properties included in total net OREO of $734 thousand. In comparison, a foreclosed residential real estate property with a carrying amount of $188 thousand was included in total net OREO of $830 thousand as of December 31, 2017. Troubled Debt Restructurings Potential troubled debt restructurings (“TDRs”) are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty. A TDR is a modification of the terms of a loan when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not have otherwise considered. There were no non-PCI TDR additions during the three months ended March 31, 2018. The following table presents the additions to non-PCI TDRs for the three months ended March 31, 2017:
($ in thousands) |  | Number of Loans |  | Pre- Modification Outstanding Recorded Investment |  | Post- Modification Outstanding Recorded Investment (1) |  | Financial Impact (2)
Commercial lending: |  |  |  |  |  |  |  |
C&I |  | 2 |  |  | $ | 6,448 |  |  | $ | 4,914 |  |  | $ | 1,273 |
CRE |  | 1 |  |  | 1,526 |  |  | 1,505 |  |  | — |
Construction and land |  | 2 |  |  | 86 |  |  | — |  |  | — |
Total |  | 5 |  |  | $ | 8,060 |  |  | $ | 6,419 |  |  | $ | 1,273 |
(1) | Includes subsequent payments after modification and reflects the balance as of March 31, 2017.
(2) | The financial impact includes charge-offs and specific reserves recorded at the modification date.
There were no non-PCI TDR modifications during the three months ended March 31, 2018. The following table presents the non-PCI TDR modifications for the three months ended March 31, 2017 by modification type:
($ in thousands) |  | Principal (1) |  | Principal and Interest (2) |  | Total
Commercial lending: |  |  |  |  |  |
C&I |  | $ | — |  |  | $ | 4,914 |  |  | $ | 4,914 |
CRE |  | 1,505 |  |  | — |  |  | 1,505 |
Total |  | $ | 1,505 |  |  | $ | 4,914 |  |  | $ | 6,419 |
(1) | Includes forbearance payments, term extensions and principal deferments that modify the terms of the loan from principal and interest payments to interest payments only.
(2) | Includes principal and interest deferments or reductions.
Subsequent to restructuring, a TDR that becomes delinquent, generally beyond 90 days, is considered to have defaulted. As TDRs are individually evaluated for impairment under the specific reserve methodology, subsequent defaults do not generally have a significant additional impact on the allowance for loan losses. The following table presents information on loans modified as TDRs within the previous 12 months that have subsequently defaulted during the three months ended March 31, 2018 and 2017, and were still in default at the respective period end:
($ in thousands) |  | Loans Modified as TDRs that Subsequently Defaulted During the Three Months Ended March 31,
| 2018 |  | 2017
| Number of Loans |  | Recorded Investment |  | Number of Loans |  | Recorded Investment
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | — |  |  | $ | — |  |  | 1 |  |  | $ | 2,718 |
Consumer lending: |  |  |  |  |  |  |  |
HELOCs |  | 1 |  |  | $ | 155 |  |  | — |  |  | $ | — |
The amount of additional funds committed to lend to borrowers whose terms have been modified was $2.0 million and $5.1 million as of March 31, 2018 and December 31, 2017, respectively. Impaired Loans The following tables present information on non-PCI impaired loans as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018
| Unpaid Principal Balance |  | Recorded Investment With No Allowance |  | Recorded Investment With Allowance |  | Total Recorded Investment |  | Related Allowance
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 123,336 |  |  | $ | 43,192 |  |  | $ | 55,789 |  |  | $ | 98,981 |  |  | $ | 28,564 |
CRE |  | 40,935 |  |  | 27,210 |  |  | 7,706 |  |  | 34,916 |  |  | 615 |
Multifamily residential |  | 9,819 |  |  | 6,483 |  |  | 2,934 |  |  | 9,417 |  |  | 103 |
Construction and land |  | 4,691 |  |  | 3,973 |  |  | — |  |  | 3,973 |  |  | — |
Total commercial lending |  | 178,781 |  |  | 80,858 |  |  | 66,429 |  |  | 147,287 |  |  | 29,282 |
Consumer lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 16,983 |  |  | 2,600 |  |  | 13,219 |  |  | 15,819 |  |  | 541 |
HELOCs |  | 8,277 |  |  | 4,774 |  |  | 3,360 |  |  | 8,134 |  |  | 5 |
Other consumer |  | 2,491 |  |  | — |  |  | 2,491 |  |  | 2,491 |  |  | 2,491 |
Total consumer lending |  | 27,751 |  |  | 7,374 |  |  | 19,070 |  |  | 26,444 |  |  | 3,037 |
Total non-PCI impaired loans |  | $ | 206,532 |  |  | $ | 88,232 |  |  | $ | 85,499 |  |  | $ | 173,731 |  |  | $ | 32,319 |
($ in thousands) |  | December 31, 2017
| Unpaid Principal Balance |  | Recorded Investment With No Allowance |  | Recorded Investment With Allowance |  | Total Recorded Investment |  | Related Allowance
Commercial lending: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 130,773 |  |  | $ | 36,086 |  |  | $ | 62,599 |  |  | $ | 98,685 |  |  | $ | 16,094 |
CRE |  | 41,248 |  |  | 28,699 |  |  | 6,857 |  |  | 35,556 |  |  | 684 |
Multifamily residential |  | 11,164 |  |  | 8,019 |  |  | 2,617 |  |  | 10,636 |  |  | 88 |
Construction and land |  | 4,781 |  |  | 3,973 |  |  | — |  |  | 3,973 |  |  | — |
Total commercial lending |  | 187,966 |  |  | 76,777 |  |  | 72,073 |  |  | 148,850 |  |  | 16,866 |
Consumer lending: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 15,501 |  |  | — |  |  | 14,338 |  |  | 14,338 |  |  | 534 |
HELOCs |  | 5,484 |  |  | 2,287 |  |  | 2,921 |  |  | 5,208 |  |  | 4 |
Other consumer |  | 2,491 |  |  | — |  |  | 2,491 |  |  | 2,491 |  |  | 2,491 |
Total consumer lending |  | 23,476 |  |  | 2,287 |  |  | 19,750 |  |  | 22,037 |  |  | 3,029 |
Total non-PCI impaired loans |  | $ | 211,442 |  |  | $ | 79,064 |  |  | $ | 91,823 |  |  | $ | 170,887 |  |  | $ | 19,895 |
The following table presents the average recorded investment and interest income recognized on non-PCI impaired loans for the three months ended March 31, 2018 and 2017:
($ in thousands) |  | Three Months Ended March 31,
| 2018 |  | 2017
| Average Recorded Investment |  | Recognized Interest Income (1) |  | Average Recorded Investment |  | Recognized Interest Income (1)
Commercial lending: |  |  |  |  |  |  |  |
C&I |  | $ | 99,457 |  |  | $ | 1,900 |  |  | $ | 143,214 |  |  | $ | 221 |
CRE |  | 35,166 |  |  | 868 |  |  | 44,772 |  |  | 35 |
Multifamily residential |  | 9,458 |  |  | 116 |  |  | 9,269 |  |  | 38 |
Construction and land |  | 3,973 |  |  | 69 |  |  | 4,717 |  |  | — |
Total commercial lending |  | 148,054 |  |  | 2,953 |  |  | 201,972 |  |  | 294 |
Consumer lending: |  |  |  |  |  |  |  |
Single-family residential |  | 15,628 |  |  | 206 |  |  | 15,096 |  |  | 22 |
HELOCs |  | 8,141 |  |  | 111 |  |  | 4,532 |  |  | 12 |
Other consumer |  | 2,491 |  |  | 45 |  |  | 1 |  |  | — |
Total consumer lending |  | 26,260 |  |  | 362 |  |  | 19,629 |  |  | 34 |
Total non-PCI impaired loans |  | $ | 174,314 |  |  | $ | 3,315 |  |  | $ | 221,601 |  |  | $ | 328 |
(1) | Includes interest recognized on accruing non-PCI TDRs. Interest payments received on nonaccrual non-PCI loans are reflected as a reduction to principal, not as interest income.
Allowance for Credit Losses The following table presents a summary of activities in the allowance for loan losses by portfolio segment for the three months ended March 31, 2018 and 2017:
($ in thousands) |  | Three Months Ended March 31,
| 2018 |  | 2017
Non-PCI Loans |  |  |  |
Allowance for non-PCI loans, beginning of period |  | $ | 287,070 |  |  | $ | 260,402 |
Provision for loan losses on non-PCI loans |  | 19,933 |  |  | 8,046 |
Gross charge-offs: |  |  |  |
Commercial lending: |  |  |  |
C&I |  | (18,445 | ) |  | (7,057 | )
Construction and land |  | — |  |  | (148 | )
Consumer lending: |  |  |  |
Single-family residential |  | (1 | ) |  | — |
Other consumer |  | (17 | ) |  | (4 | )
Total gross charge-offs |  | (18,463 | ) |  | (7,209 | )
Gross recoveries: |  |  |  |
Commercial lending: |  |  |  |
C&I |  | 7,687 |  |  | 455 |
CRE |  | 427 |  |  | 569 |
Multifamily residential |  | 333 |  |  | 567 |
Construction and land |  | 435 |  |  | 24 |
Consumer lending: |  |  |  |
Single-family residential |  | 184 |  |  | 11 |
HELOCs |  | — |  |  | 24 |
Other consumer |  | 1 |  |  | 118 |
Total gross recoveries |  | 9,067 |  |  | 1,768 |
Net charge-offs |  | (9,396 | ) |  | (5,441 | )
Allowance for non-PCI loans, end of period |  | 297,607 |  |  | 263,007 |
PCI Loans |  |  |  |
Allowance for PCI loans, beginning of period |  | 58 |  |  | 118 |
Reversal of loan losses on PCI loans |  | (11 | ) |  | (31 | )
Allowance for PCI loans, end of period |  | 47 |  |  | 87 |
Allowance for loan losses |  | $ | 297,654 |  |  | $ | 263,094 |
For further information on accounting policies and the methodologies used to estimate the allowance for credit losses and loan charge-offs, see Note 1 — Summary of Significant Accounting Policies to the Consolidated Financial Statements of the Company’s 2017 Form 10-K. The following table presents a summary of activities in the allowance for unfunded credit reserves for the three months ended March 31, 2018 and 2017:
($ in thousands) |  | Three Months Ended March 31,
| 2018 |  | 2017
Allowance for unfunded credit reserves, beginning of period |  | $ | 13,318 |  |  | $ | 16,121 |
Provision for (reversal of) unfunded credit reserves |  | 296 |  |  | (947 | )
Allowance for unfunded credit reserves, end of period |  | $ | 13,614 |  |  | $ | 15,174 |
The allowance for unfunded credit reserves is maintained at a level management believes to be sufficient to absorb estimated probable losses related to unfunded credit facilities. The allowance for unfunded credit reserves is included in Accrued expenses and other liabilities on the Consolidated Balance Sheet. See Note 11 — Commitments and Contingencies to the Consolidated Financial Statements for additional information related to unfunded credit reserves. The following tables present the Company’s allowance for loan losses and recorded investments by portfolio segment and impairment methodology as of March 31, 2018 and December 31, 2017:
($ in thousands) |  | March 31, 2018
| Commercial Lending |  | Consumer Lending
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single- Family Residential |  | HELOCs |  | Other Consumer |  | Total
Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 28,564 |  |  | $ | 615 |  |  | $ | 103 |  |  | $ | — |  |  | $ | 541 |  |  | $ | 5 |  |  | $ | 2,491 |  |  | $ | 32,319 |
Collectively evaluated for impairment |  | 141,131 |  |  | 39,056 |  |  | 18,396 |  |  | 32,220 |  |  | 25,416 |  |  | 7,036 |  |  | 2,033 |  |  | 265,288 |
Acquired with deteriorated credit quality |  | — |  |  | 47 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 47 |
Total |  | $ | 169,695 |  |  | $ | 39,718 |  |  | $ | 18,499 |  |  | $ | 32,220 |  |  | $ | 25,957 |  |  | $ | 7,041 |  |  | $ | 4,524 |  |  | $ | 297,654 |
Recorded investment in loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 98,981 |  |  | $ | 34,916 |  |  | $ | 9,417 |  |  | $ | 3,973 |  |  | $ | 15,819 |  |  | $ | 8,134 |  |  | $ | 2,491 |  |  | $ | 173,731 |
Collectively evaluated for impairment |  | 10,708,281 |  |  | 8,727,994 |  |  | 1,889,100 |  |  | 665,323 |  |  | 4,802,275 |  |  | 1,754,652 |  |  | 381,489 |  |  | 28,929,114 |
Acquired with deteriorated credit quality (1) |  | 11,042 |  |  | 259,836 |  |  | 56,338 |  |  | 44 |  |  | 112,486 |  |  | 12,657 |  |  | — |  |  | 452,403 |
Total (1) |  | $ | 10,818,304 |  |  | $ | 9,022,746 |  |  | $ | 1,954,855 |  |  | $ | 669,340 |  |  | $ | 4,930,580 |  |  | $ | 1,775,443 |  |  | $ | 383,980 |  |  | $ | 29,555,248 |
($ in thousands) |  | December 31, 2017
| Commercial Lending |  | Consumer Lending
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single- Family Residential |  | HELOCs |  | Other Consumer |  | Total
Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 16,094 |  |  | $ | 684 |  |  | $ | 88 |  |  | $ | — |  |  | $ | 534 |  |  | $ | 4 |  |  | $ | 2,491 |  |  | $ | 19,895 |
Collectively evaluated for impairment |  | 146,964 |  |  | 40,495 |  |  | 19,021 |  |  | 26,881 |  |  | 25,828 |  |  | 7,350 |  |  | 636 |  |  | 267,175 |
Acquired with deteriorated credit quality |  | — |  |  | 58 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 58 |
Total |  | $ | 163,058 |  |  | $ | 41,237 |  |  | $ | 19,109 |  |  | $ | 26,881 |  |  | $ | 26,362 |  |  | $ | 7,354 |  |  | $ | 3,127 |  |  | $ | 287,128 |
Recorded investment in loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 98,685 |  |  | $ | 35,556 |  |  | $ | 10,636 |  |  | $ | 3,973 |  |  | $ | 14,338 |  |  | $ | 5,208 |  |  | $ | 2,491 |  |  | $ | 170,887 |
Collectively evaluated for impairment |  | 10,586,751 |  |  | 8,623,653 |  |  | 1,844,492 |  |  | 655,353 |  |  | 4,514,573 |  |  | 1,763,709 |  |  | 334,013 |  |  | 28,322,544 |
Acquired with deteriorated credit quality (1) |  | 11,795 |  |  | 277,688 |  |  | 61,048 |  |  | 371 |  |  | 117,378 |  |  | 14,007 |  |  | — |  |  | 482,287 |
Total (1) |  | $ | 10,697,231 |  |  | $ | 8,936,897 |  |  | $ | 1,916,176 |  |  | $ | 659,697 |  |  | $ | 4,646,289 |  |  | $ | 1,782,924 |  |  | $ | 336,504 |  |  | $ | 28,975,718 |
(1) | Loans net of ASC 310-30 discount.
Purchased Credit Impaired Loans At the date of acquisition, PCI loans are pooled and accounted for at fair value, which represents the discounted value of the expected cash flows of the loan portfolio. A pool is accounted for as a single asset with a single interest rate, cumulative loss rate and cash flows expectation. The cash flows expected over the life of the pools are estimated by an internal cash flows model that projects cash flows and calculates the carrying values of the pools, book yields, effective interest income and impairment, if any, based on pool level events. Assumptions as to cumulative loss rates, loss curves and prepayment speeds are utilized to calculate the expected cash flows. The amount of expected cash flows over the initial investment in the loan represents the “accretable yield,” which is recognized as interest income on a level yield basis over the life of the loan. Prepayments affect the estimated life of PCI loans, which may change the amount of interest income, and possibly principal, expected to be collected. The excess of total contractual cash flows over the cash flows expected to be received at origination is deemed to be the “nonaccretable difference.” The following table presents the changes in accretable yield for PCI loans for the three months ended March 31, 2018 and 2017:
($ in thousands) |  | Three Months Ended March 31,
| 2018 |  | 2017
Accretable yield for PCI loans, beginning of period |  | $ | 101,977 |  |  | $ | 136,247 |
Accretion |  | (9,134 | ) |  | (10,279 | )
Changes in expected cash flows |  | 3,021 |  |  | 2,022 |
Accretable yield for PCI loans, end of period |  | $ | 95,864 |  |  | $ | 127,990 |
Loans Held-for-Sale As of March 31, 2018, loans held-for-sale of $46.2 million were comprised of C&I and single-family residential loans. In comparison, as of December 31, 2017, loans held-for-sale of $85 thousand were comprised of single-family residential loans. Loans held-for-sale are carried at the lower of cost or fair value. When a determination is made at the time of commitment to originate or purchase loans as held-for-investment, it is the Company’s intent to hold these loans to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s management evaluation processes, including asset/liability management and credit risk management. When the Company subsequently changes its intent to hold certain loans, the loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value. From time to time, the Company purchases and sells loans in the secondary market. Certain purchased loans are transferred from held-for-investment to held-for-sale; and write-downs to allowance for loan losses are recorded, when appropriate. The following tables present information on the loans transferred from held-for-investment to held-for-sale, and sales and purchases of loans, during the three months ended March 31, 2018 and 2017:
($ in thousands) |  | Three Months Ended March 31, 2018
| Commercial Lending |  | Consumer Lending |  |  |
| C&I |  | CRE |  | Multifamily Residential |  | Single-Family Residential |  | Other Consumer |  | Total |
Loans transferred from held-for-investment to held-for-sale |  | $ | 146,391 |  |  | $ | 9,376 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 155,767 |  | (1)
Sales |  | $ | 102,365 |  |  | $ | 9,376 |  |  | $ | — |  |  | $ | 2,546 |  |  | $ | — |  |  | $ | 114,287 |  | (2)(3)(4)
Purchases |  | $ | 64,747 |  |  | $ | — |  |  | $ | 186 |  |  | $ | 15,113 |  |  | $ | — |  |  | $ | 80,046 |  | (5)
($ in thousands) |  | Three Months Ended March 31, 2017
| Commercial Lending |  | Consumer Lending |  |  |
| C&I |  | CRE |  | Multifamily Residential |  | Single-Family Residential |  | Other Consumer |  | Total |
Loans transferred from held-for-investment to held-for-sale |  | $ | 265,259 |  |  | $ | 12,765 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 278,024 |  | (1)
Sales |  | $ | 236,679 |  |  | $ | 12,765 |  |  | $ | — |  |  | $ | 4,310 |  |  | $ | 22,191 |  |  | $ | 275,945 |  | (2)(3)(4)
Purchases |  | $ | 147,116 |  |  | $ | — |  |  | $ | 126 |  |  | $ | — |  |  | $ | — |  |  | $ | 147,242 |  | (5)
(1) | The Company recorded $85 thousand and $92 thousand in write-downs to the allowance for loan losses related to loans transferred from held-for-investment to held-for-sale for the three months ended March 31, 2018 and 2017, respectively.
(2) | Includes originated loans sold of $89.7 million and $29.3 million for the three months ended March 31, 2018 and 2017, respectively. Originated loans sold were primarily comprised of C&I and CRE loans for each of the three months ended March 31, 2018, and 2017.
(3) | Includes purchased loans sold in the secondary market of $24.6 million and $246.6 million for the three months ended March 31, 2018 and 2017, respectively.
(4) | Net gains on sales of loans, excluding the lower of cost or fair value adjustments, were $1.6 million and $2.8 million for the three months ended March 31, 2018 and 2017, respectively. No lower of cost or fair value adjustments were recorded for the three months ended March 31, 2018. In comparison, the lower of cost or fair value adjustment of $69 thousand was recorded in Net gains on sales of loans on the Consolidated Statement of Income for the three months ended March 31, 2017.
(5) | C&I loan purchases for each of the three months ended March 31, 2018 and 2017 mainly represent C&I syndicated loans.

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