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Loans Receivable and Allowance for Credit Losses | 6 Months Ended
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Jun. 30, 2019
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 June 30, 2019 and December 31, 2018:
($ in thousands) |  | June 30, 2019 |  | December 31, 2018
| Non-PCI Loans (1) |  | PCI Loans (2) |  | Total (1)(2) |  | Non-PCI Loans (1) |  | PCI Loans (2) |  | Total (1)(2)
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 12,401,090 |  |  | $ | 1,877 |  |  | $ | 12,402,967 |  |  | $ | 12,054,818 |  |  | $ | 2,152 |  |  | $ | 12,056,970 |
CRE |  | 9,722,582 |  |  | 145,851 |  |  | 9,868,433 |  |  | 9,284,583 |  |  | 165,252 |  |  | 9,449,835 |
Multifamily residential |  | 2,347,751 |  |  | 24,594 |  |  | 2,372,345 |  |  | 2,246,506 |  |  | 34,526 |  |  | 2,281,032 |
Construction and land |  | 674,757 |  |  | 41 |  |  | 674,798 |  |  | 538,752 |  |  | 42 |  |  | 538,794 |
Total commercial |  | 25,146,180 |  |  | 172,363 |  |  | 25,318,543 |  |  | 24,124,659 |  |  | 201,972 |  |  | 24,326,631 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 6,403,628 |  |  | 91,254 |  |  | 6,494,882 |  |  | 5,939,258 |  |  | 97,196 |  |  | 6,036,454 |
HELOCs |  | 1,567,900 |  |  | 7,250 |  |  | 1,575,150 |  |  | 1,681,979 |  |  | 8,855 |  |  | 1,690,834 |
Other consumer |  | 341,802 |  |  | — |  |  | 341,802 |  |  | 331,270 |  |  | — |  |  | 331,270 |
Total consumer |  | 8,313,330 |  |  | 98,504 |  |  | 8,411,834 |  |  | 7,952,507 |  |  | 106,051 |  |  | 8,058,558 |
Total loans held-for-investment |  | $ | 33,459,510 |  |  | $ | 270,867 |  |  | $ | 33,730,377 |  |  | $ | 32,077,166 |  |  | $ | 308,023 |  |  | $ | 32,385,189 |
Allowance for loan losses |  | (330,620 | ) |  | (5 | ) |  | (330,625 | ) |  | (311,300 | ) |  | (22 | ) |  | (311,322 | )
Loans held-for-investment, net |  | $ | 33,128,890 |  |  | $ | 270,862 |  |  | $ | 33,399,752 |  |  | $ | 31,765,866 |  |  | $ | 308,001 |  |  | $ | 32,073,867 |
(1) | Includes net deferred loan fees, unearned fees, unamortized premiums and unaccreted discounts of $(43.8) million and $(48.9) million as of June 30, 2019 and December 31, 2018, respectively.
(2) | Includes ASC 310-30 discount of $18.9 million and $22.2 million as of June 30, 2019 and December 31, 2018, respectively.
The commercial portfolio includes C&I, CRE, multifamily residential, and construction and land loans. The consumer 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 consists of income producing real estate loans that are either owner occupied, or non-owner occupied where 50% or more of the debt service for the loan is primarily provided by unaffiliated rental income from a third party. The multifamily residential loan portfolio is largely comprised of loans secured by smaller multifamily properties ranging from five to 15 units in the Bank’s primary lending areas. Construction loans mainly provide construction financing for hotels, offices and industrial projects. In the consumer portfolio, the Company offers single-family residential loans and HELOCs through a variety of mortgage loan programs. A substantial number of these loans are originated through a reduced documentation loan program, in which a substantial down payment is required, resulting in a low loan-to-value ratio at origination, typically 60% or less. The Company is in a first lien position for many of these reduced documentation single-family residential loans and HELOCs. These loans have historically experienced low delinquency and default rates. Other consumer loans are mainly comprised of insurance premium financing loans. As of June 30, 2019 and December 31, 2018, loans of $21.06 billion and $20.59 billion, respectively, were pledged to secure borrowings and provide additional borrowing capacity from the FRB and FHLB. Credit Quality Indicators All loans are subject to the Company’s internal and external credit review and monitoring. For the commercial portfolio, 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 or delinquency, current financial and liquidity status, and all other relevant information. For the majority of the consumer portfolio, payment performance or 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 is utilized for estimating the appropriate allowance for loan losses. The risk rating system 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 the potential weaknesses are resolved, a loan is upgraded to a Pass or Watch grade. If negative trends in the borrower’s financial status or other information indicate that the sources of repayment may become inadequate, a loan is downgraded to a Substandard grade. Substandard loans have well-defined weaknesses that may jeopardize the full and timely repayment of the loan. Substandard loans have the distinct possibility of loss, if the deficiencies are not corrected. When management has assessed that there is potential for loss, but a distinct possibility of loss is not yet recognizable, the loan remains classified as Substandard grade. Doubtful loans are loans that 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 June 30, 2019 and December 31, 2018:
($ in thousands) |  | June 30, 2019
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total Non-PCI Loans
Commercial: |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 11,789,639 |  |  | $ | 368,328 |  |  | $ | 231,235 |  |  | $ | 11,888 |  |  | $ | 12,401,090 |
CRE |  | 9,531,912 |  |  | 100,410 |  |  | 90,260 |  |  | — |  |  | 9,722,582 |
Multifamily residential |  | 2,318,019 |  |  | 20,380 |  |  | 9,352 |  |  | — |  |  | 2,347,751 |
Construction and land |  | 620,665 |  |  | 20,463 |  |  | 33,629 |  |  | — |  |  | 674,757 |
Total commercial |  | 24,260,235 |  |  | 509,581 |  |  | 364,476 |  |  | 11,888 |  |  | 25,146,180 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 6,385,059 |  |  | 1,471 |  |  | 17,098 |  |  | — |  |  | 6,403,628 |
HELOCs |  | 1,550,377 |  |  | 3,707 |  |  | 13,816 |  |  | — |  |  | 1,567,900 |
Other consumer |  | 325,289 |  |  | 14,009 |  |  | 2,504 |  |  | — |  |  | 341,802 |
Total consumer |  | 8,260,725 |  |  | 19,187 |  |  | 33,418 |  |  | — |  |  | 8,313,330 |
Total |  | $ | 32,520,960 |  |  | $ | 528,768 |  |  | $ | 397,894 |  |  | $ | 11,888 |  |  | $ | 33,459,510 |
($ in thousands) |  | December 31, 2018
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total Non-PCI Loans
Commercial: |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 11,644,470 |  |  | $ | 260,089 |  |  | $ | 139,844 |  |  | $ | 10,415 |  |  | $ | 12,054,818 |
CRE |  | 9,144,646 |  |  | 49,705 |  |  | 90,232 |  |  | — |  |  | 9,284,583 |
Multifamily residential |  | 2,215,573 |  |  | 20,551 |  |  | 10,382 |  |  | — |  |  | 2,246,506 |
Construction and land |  | 485,217 |  |  | 19,838 |  |  | 33,697 |  |  | — |  |  | 538,752 |
Total commercial |  | 23,489,906 |  |  | 350,183 |  |  | 274,155 |  |  | 10,415 |  |  | 24,124,659 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 5,925,584 |  |  | 6,376 |  |  | 7,298 |  |  | — |  |  | 5,939,258 |
HELOCs |  | 1,669,300 |  |  | 1,576 |  |  | 11,103 |  |  | — |  |  | 1,681,979 |
Other consumer |  | 328,767 |  |  | 1 |  |  | 2,502 |  |  | — |  |  | 331,270 |
Total consumer |  | 7,923,651 |  |  | 7,953 |  |  | 20,903 |  |  | — |  |  | 7,952,507 |
Total |  | $ | 31,413,557 |  |  | $ | 358,136 |  |  | $ | 295,058 |  |  | $ | 10,415 |  |  | $ | 32,077,166 |
The following tables present the credit risk ratings for PCI loans by portfolio segment as of June 30, 2019 and December 31, 2018:
($ in thousands) |  | June 30, 2019
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total PCI Loans
Commercial: |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 1,877 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 1,877 |
CRE |  | 127,083 |  |  | 6 |  |  | 18,762 |  |  | — |  |  | 145,851 |
Multifamily residential |  | 23,856 |  |  | — |  |  | 738 |  |  | — |  |  | 24,594 |
Construction and land |  | 41 |  |  | — |  |  | — |  |  | — |  |  | 41 |
Total commercial |  | 152,857 |  |  | 6 |  |  | 19,500 |  |  | — |  |  | 172,363 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 89,623 |  |  | 764 |  |  | 867 |  |  | — |  |  | 91,254 |
HELOCs |  | 6,868 |  |  | — |  |  | 382 |  |  | — |  |  | 7,250 |
Total consumer |  | 96,491 |  |  | 764 |  |  | 1,249 |  |  | — |  |  | 98,504 |
Total (1) |  | $ | 249,348 |  |  | $ | 770 |  |  | $ | 20,749 |  |  | $ | — |  |  | $ | 270,867 |
($ in thousands) |  | December 31, 2018
| Pass/Watch |  | Special Mention |  | Substandard |  | Doubtful |  | Total PCI Loans
Commercial: |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 1,996 |  |  | $ | — |  |  | $ | 156 |  |  | $ | — |  |  | $ | 2,152 |
CRE |  | 146,057 |  |  | — |  |  | 19,195 |  |  | — |  |  | 165,252 |
Multifamily residential |  | 33,003 |  |  | — |  |  | 1,523 |  |  | — |  |  | 34,526 |
Construction and land |  | 42 |  |  | — |  |  | — |  |  | — |  |  | 42 |
Total commercial |  | 181,098 |  |  | — |  |  | 20,874 |  |  | — |  |  | 201,972 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 95,789 |  |  | 1,021 |  |  | 386 |  |  | — |  |  | 97,196 |
HELOCs |  | 8,314 |  |  | 256 |  |  | 285 |  |  | — |  |  | 8,855 |
Total consumer |  | 104,103 |  |  | 1,277 |  |  | 671 |  |  | — |  |  | 106,051 |
Total (1) |  | $ | 285,201 |  |  | $ | 1,277 |  |  | $ | 21,545 |  |  | $ | — |  |  | $ | 308,023 |
(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 June 30, 2019 and December 31, 2018:
($ in thousands) |  | June 30, 2019
| Accruing Loans 30-59 Days Past Due |  | Accruing Loans 60-89 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: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 11,878 |  |  | $ | 6,176 |  |  | $ | 18,054 |  |  | $ | 36,208 |  |  | $ | 36,942 |  |  | $ | 73,150 |  |  | $ | 12,309,886 |  |  | $ | 12,401,090 |
CRE |  | 11,099 |  |  | 70 |  |  | 11,169 |  |  | 3,038 |  |  | 17,876 |  |  | 20,914 |  |  | 9,690,499 |  |  | 9,722,582 |
Multifamily residential |  | 386 |  |  | — |  |  | 386 |  |  | 1,013 |  |  | 14 |  |  | 1,027 |  |  | 2,346,338 |  |  | 2,347,751 |
Construction and land |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 674,757 |  |  | 674,757 |
Total commercial |  | 23,363 |  |  | 6,246 |  |  | 29,609 |  |  | 40,259 |  |  | 54,832 |  |  | 95,091 |  |  | 25,021,480 |  |  | 25,146,180 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 18,052 |  |  | 2,397 |  |  | 20,449 |  |  | 712 |  |  | 12,363 |  |  | 13,075 |  |  | 6,370,104 |  |  | 6,403,628 |
HELOCs |  | 6,116 |  |  | 4,968 |  |  | 11,084 |  |  | 57 |  |  | 7,287 |  |  | 7,344 |  |  | 1,549,472 |  |  | 1,567,900 |
Other consumer |  | 4 |  |  | 14 |  |  | 18 |  |  | — |  |  | 2,504 |  |  | 2,504 |  |  | 339,280 |  |  | 341,802 |
Total consumer |  | 24,172 |  |  | 7,379 |  |  | 31,551 |  |  | 769 |  |  | 22,154 |  |  | 22,923 |  |  | 8,258,856 |  |  | 8,313,330 |
Total |  | $ | 47,535 |  |  | $ | 13,625 |  |  | $ | 61,160 |  |  | $ | 41,028 |  |  | $ | 76,986 |  |  | $ | 118,014 |  |  | $ | 33,280,336 |  |  | $ | 33,459,510 |
($ in thousands) |  | December 31, 2018
| Accruing Loans 30-59 Days Past Due |  | Accruing Loans 60-89 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: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 21,032 |  |  | $ | 19,170 |  |  | $ | 40,202 |  |  | $ | 17,097 |  |  | $ | 26,743 |  |  | $ | 43,840 |  |  | $ | 11,970,776 |  |  | $ | 12,054,818 |
CRE |  | 7,740 |  |  | — |  |  | 7,740 |  |  | 3,704 |  |  | 20,514 |  |  | 24,218 |  |  | 9,252,625 |  |  | 9,284,583 |
Multifamily residential |  | 4,174 |  |  | — |  |  | 4,174 |  |  | 1,067 |  |  | 193 |  |  | 1,260 |  |  | 2,241,072 |  |  | 2,246,506 |
Construction and land |  | 207 |  |  | — |  |  | 207 |  |  | — |  |  | — |  |  | — |  |  | 538,545 |  |  | 538,752 |
Total commercial |  | 33,153 |  |  | 19,170 |  |  | 52,323 |  |  | 21,868 |  |  | 47,450 |  |  | 69,318 |  |  | 24,003,018 |  |  | 24,124,659 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 14,645 |  |  | 7,850 |  |  | 22,495 |  |  | 509 |  |  | 4,750 |  |  | 5,259 |  |  | 5,911,504 |  |  | 5,939,258 |
HELOCs |  | 2,573 |  |  | 1,816 |  |  | 4,389 |  |  | 1,423 |  |  | 7,191 |  |  | 8,614 |  |  | 1,668,976 |  |  | 1,681,979 |
Other consumer |  | 11 |  |  | 12 |  |  | 23 |  |  | — |  |  | 2,502 |  |  | 2,502 |  |  | 328,745 |  |  | 331,270 |
Total consumer |  | 17,229 |  |  | 9,678 |  |  | 26,907 |  |  | 1,932 |  |  | 14,443 |  |  | 16,375 |  |  | 7,909,225 |  |  | 7,952,507 |
Total |  | $ | 50,382 |  |  | $ | 28,848 |  |  | $ | 79,230 |  |  | $ | 23,800 |  |  | $ | 61,893 |  |  | $ | 85,693 |  |  | $ | 31,912,243 |  |  | $ | 32,077,166 |
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 — Loans Held-for-Investment to the Consolidated Financial Statements of the Company’s 2018 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 June 30, 2019 and December 31, 2018, PCI loans on nonaccrual status totaled $3.5 million and $4.0 million, respectively. Loans in Process of Foreclosure The Company commences the foreclosure process on consumer mortgage loans when a borrower becomes 120 days delinquent in accordance with Consumer Finance Protection Bureau guidelines. As of June 30, 2019 and December 31, 2018, consumer mortgage loans of $5.8 million and $3.0 million, respectively, were secured by residential real estate properties, for which formal foreclosure proceedings were in process in accordance with local requirements of the applicable jurisdictions. As of both June 30, 2019 and December 31, 2018, no foreclosed residential real estate property was included in total net OREO of $130 thousand and $133 thousand, respectively. Troubled Debt Restructurings Potential troubled debt restructurings (“TDRs”) are individually evaluated and the type of restructuring is selected based on the loan type and the circumstances of the borrower’s financial difficulty. A TDR is a modification of the terms of a loan when the Company, for economic or legal reasons related to the borrower’s financial difficulties, grants a concession to the borrower that it would not have otherwise considered. The following tables present the additions to non-PCI TDRs for the three and six months ended June 30, 2019 and 2018:
($ in thousands) |  | Loans Modified as TDRs During the Three Months Ended June 30,
| 2019 |  | 2018
| Number of Loans |  | Pre- Modification Outstanding Recorded Investment |  | Post- Modification Outstanding Recorded Investment (1) |  | Financial Impact (2) |  | Number of Loans |  | Pre- Modification Outstanding Recorded Investment |  | Post- Modification Outstanding Recorded Investment (1) |  | Financial Impact (2)
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | 6 |  | $ | 48,099 |  |  | $ | 48,054 |  |  | $ | 5,869 |  |  | — |  | $ | — |  |  | $ | — |  |  | $ | — |
CRE |  | — |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  | $ | 750 |  |  | $ | 837 |  |  | $ | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 1 |  | $ | 220 |  |  | $ | 219 |  |  | $ | — |  |  | 2 |  | $ | 405 |  |  | $ | 404 |  |  | $ | (26 | )
HELOCs |  | — |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | 2 |  | $ | 1,546 |  |  | $ | 1,536 |  |  | $ | — |
($ in thousands) |  | Loans Modified as TDRs During the Six Months Ended June 30,
| 2019 |  | 2018
| Number of Loans |  | Pre- Modification Outstanding Recorded Investment |  | Post- Modification Outstanding Recorded Investment (1) |  | Financial Impact (2) |  | Number of Loans |  | Pre- Modification Outstanding Recorded Investment |  | Post- Modification Outstanding Recorded Investment (1) |  | Financial Impact (2)
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | 9 |  | $ | 77,250 |  |  | $ | 77,486 |  |  | $ | 5,929 |  |  | — |  | $ | — |  |  | $ | — |  |  | $ | — |
CRE |  | — |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | 1 |  | $ | 750 |  |  | $ | 837 |  |  | $ | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 1 |  | $ | 220 |  |  | $ | 219 |  |  | $ | — |  |  | 2 |  | $ | 405 |  |  | $ | 404 |  |  | $ | (26 | )
HELOCs |  | — |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | 2 |  | $ | 1,546 |  |  | $ | 1,536 |  |  | $ | — |
(1) | Includes subsequent payments after modification and reflects the balance as of June 30, 2019 and 2018.
(2) | The financial impact includes increases in charge-offs and specific reserves recorded at the modification date.
The following tables present the non-PCI TDR post-modification outstanding balances for the three and six months ended June 30, 2019 and 2018 by modification type:
($ in thousands) |  | Modification Type During the Three Months Ended June 30,
| 2019 |  | 2018
| Principal (1) |  | Interest Rate Reduction |  | Other (2) |  | Total |  | Principal (1) |  | Interest Rate Reduction |  | Other |  | Total
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 9,909 |  |  | $ | — |  |  | $ | 38,145 |  |  | $ | 48,054 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
CRE |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 837 |  |  | — |  |  | 837 |
Total commercial |  | 9,909 |  |  | — |  |  | 38,145 |  |  | 48,054 |  |  | — |  |  | 837 |  |  | — |  |  | 837 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | — |  |  | — |  |  | 219 |  |  | 219 |  |  | 65 |  |  | — |  |  | 339 |  |  | 404 |
HELOCs |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,464 |  |  | — |  |  | 72 |  |  | 1,536 |
Total consumer |  | — |  |  | — |  |  | 219 |  |  | 219 |  |  | 1,529 |  |  | — |  |  | 411 |  |  | 1,940 |
Total |  | $ | 9,909 |  |  | $ | — |  |  | $ | 38,364 |  |  | $ | 48,273 |  |  | $ | 1,529 |  |  | $ | 837 |  |  | $ | 411 |  |  | $ | 2,777 |
($ in thousands) |  | Modification Type During the Six Months Ended June 30,
| 2019 |  | 2018
| Principal (1) |  | Interest Rate Reduction |  | Other (2) |  | Total |  | Principal (1) |  | Interest Rate Reduction |  | Other |  | Total
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 39,341 |  |  | $ | — |  |  | $ | 38,145 |  |  | $ | 77,486 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
CRE |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 837 |  |  | — |  |  | 837 |
Total commercial |  | 39,341 |  |  | — |  |  | 38,145 |  |  | 77,486 |  |  | — |  |  | 837 |  |  | — |  |  | 837 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | — |  |  | — |  |  | 219 |  |  | 219 |  |  | 65 |  |  | — |  |  | 339 |  |  | 404 |
HELOCs |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,464 |  |  | — |  |  | 72 |  |  | 1,536 |
Total consumer |  | — |  |  | — |  |  | 219 |  |  | 219 |  |  | 1,529 |  |  | — |  |  | 411 |  |  | 1,940 |
Total |  | $ | 39,341 |  |  | $ | — |  |  | $ | 38,364 |  |  | $ | 77,705 |  |  | $ | 1,529 |  |  | $ | 837 |  |  | $ | 411 |  |  | $ | 2,777 |
(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 funding to secure additional collateral and provides liquidity to collateral-dependent C&I loans.
Subsequent to restructuring, if a TDR that becomes delinquent, generally beyond 90 days past due, it is considered to be in default. Because 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 tables present information on loans modified as TDRs within the previous 12 months, which have subsequently defaulted during the three and six months ended June 30, 2019 and 2018, and were still in default at the respective period end:
($ in thousands) |  | Loans Modified as TDRs that Subsequently Defaulted During the Three Months Ended June 30,
| 2019 |  | 2018
| Number of Loans |  | Recorded Investment |  | Number of Loans |  | Recorded Investment
Commercial: |  |  |  |  |  |  |  |
C&I |  | 1 |  |  | $ | 1,484 |  |  | — |  |  | $ | — |
($ in thousands) |  | Loans Modified as TDRs that Subsequently Defaulted During the Six Months Ended June 30,
| 2019 |  | 2018
| Number of Loans |  | Recorded Investment |  | Number of Loans |  | Recorded Investment
Commercial: |  |  |  |  |  |  |  |
C&I |  | 1 |  |  | $ | 1,484 |  |  | — |  |  | $ | — |
The amount of additional funds committed to lend to borrowers whose terms have been modified was $3.9 million and $3.9 million as of June 30, 2019 and December 31, 2018, respectively. Impaired Loans The following tables present information on non-PCI impaired loans as of June 30, 2019 and December 31, 2018:
($ in thousands) |  | June 30, 2019
| Unpaid Principal Balance |  | Recorded Investment With No Allowance |  | Recorded Investment With Allowance |  | Total Recorded Investment |  | Related Allowance
Commercial: |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 163,004 |  |  | $ | 105,843 |  |  | $ | 37,277 |  |  | $ | 143,120 |  |  | $ | 14,137 |
CRE |  | 33,071 |  |  | 25,351 |  |  | 1,594 |  |  | 26,945 |  |  | 134 |
Multifamily residential |  | 5,761 |  |  | 2,402 |  |  | 2,851 |  |  | 5,253 |  |  | 64 |
Total commercial |  | 201,836 |  |  | 133,596 |  |  | 41,722 |  |  | 175,318 |  |  | 14,335 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 22,234 |  |  | 3,940 |  |  | 16,950 |  |  | 20,890 |  |  | 48 |
HELOCs |  | 9,972 |  |  | 4,775 |  |  | 5,158 |  |  | 9,933 |  |  | 5 |
Other consumer |  | 2,504 |  |  | — |  |  | 2,504 |  |  | 2,504 |  |  | 2,500 |
Total consumer |  | 34,710 |  |  | 8,715 |  |  | 24,612 |  |  | 33,327 |  |  | 2,553 |
Total non-PCI impaired loans |  | $ | 236,546 |  |  | $ | 142,311 |  |  | $ | 66,334 |  |  | $ | 208,645 |  |  | $ | 16,888 |
($ in thousands) |  | December 31, 2018
| Unpaid Principal Balance |  | Recorded Investment With No Allowance |  | Recorded Investment With Allowance |  | Total Recorded Investment |  | Related Allowance
Commercial: |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 82,963 |  |  | $ | 48,479 |  |  | $ | 8,609 |  |  | $ | 57,088 |  |  | $ | 1,219 |
CRE |  | 36,426 |  |  | 28,285 |  |  | 2,067 |  |  | 30,352 |  |  | 208 |
Multifamily residential |  | 6,031 |  |  | 2,949 |  |  | 2,611 |  |  | 5,560 |  |  | 75 |
Total commercial |  | 125,420 |  |  | 79,713 |  |  | 13,287 |  |  | 93,000 |  |  | 1,502 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 14,670 |  |  | 2,552 |  |  | 10,908 |  |  | 13,460 |  |  | 34 |
HELOCs |  | 10,035 |  |  | 5,547 |  |  | 4,409 |  |  | 9,956 |  |  | 5 |
Other consumer |  | 2,502 |  |  | — |  |  | 2,502 |  |  | 2,502 |  |  | 2,491 |
Total consumer |  | 27,207 |  |  | 8,099 |  |  | 17,819 |  |  | 25,918 |  |  | 2,530 |
Total non-PCI impaired loans |  | $ | 152,627 |  |  | $ | 87,812 |  |  | $ | 31,106 |  |  | $ | 118,918 |  |  | $ | 4,032 |
The following table presents the average recorded investment and interest income recognized on non-PCI impaired loans for the three and six months ended June 30, 2019 and 2018:
($ in thousands) |  | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
| Average Recorded Investment |  | Recognized Interest Income (1) |  | Average Recorded Investment |  | Recognized Interest Income (1) |  | Average Recorded Investment |  | Recognized Interest Income (1) |  | Average Recorded Investment |  | Recognized Interest Income (1)
Commercial: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
C&I |  | $ | 182,689 |  |  | $ | 1,081 |  |  | $ | 103,767 |  |  | $ | 95 |  |  | $ | 189,553 |  |  | $ | 1,816 |  |  | $ | 112,193 |  |  | $ | 357 |
CRE |  | 29,241 |  |  | 135 |  |  | 34,547 |  |  | 116 |  |  | 31,456 |  |  | 249 |  |  | 35,602 |  |  | 259 |
Multifamily residential |  | 5,852 |  |  | 61 |  |  | 9,358 |  |  | 52 |  |  | 5,883 |  |  | 121 |  |  | 11,141 |  |  | 134 |
Construction and land |  | — |  |  | — |  |  | 3,973 |  |  | — |  |  | — |  |  | — |  |  | 3,973 |  |  | — |
Total commercial |  | 217,782 |  |  | 1,277 |  |  | 151,645 |  |  | 263 |  |  | 226,892 |  |  | 2,186 |  |  | 162,909 |  |  | 750 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Single-family residential |  | 23,247 |  |  | 129 |  |  | 18,852 |  |  | 115 |  |  | 24,865 |  |  | 258 |  |  | 19,331 |  |  | 228 |
HELOCs |  | 13,564 |  |  | 38 |  |  | 9,496 |  |  | 18 |  |  | 15,321 |  |  | 56 |  |  | 10,897 |  |  | 33 |
Other consumer |  | 2,515 |  |  | — |  |  | 2,491 |  |  | — |  |  | 2,526 |  |  | — |  |  | 2,491 |  |  | — |
Total consumer |  | 39,326 |  |  | 167 |  |  | 30,839 |  |  | 133 |  |  | 42,712 |  |  | 314 |  |  | 32,719 |  |  | 261 |
Total non-PCI impaired loans |  | $ | 257,108 |  |  | $ | 1,444 |  |  | $ | 182,484 |  |  | $ | 396 |  |  | $ | 269,604 |  |  | $ | 2,500 |  |  | $ | 195,628 |  |  | $ | 1,011 |
(1) | Includes interest income 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 and six months ended June 30, 2019 and 2018:
($ in thousands) |  | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Non-PCI Loans |  |  |  |  |  |  |  |
Allowance for non-PCI loans, beginning of period |  | $ | 317,880 |  |  | $ | 297,607 |  |  | $ | 311,300 |  |  | $ | 287,070 |
Provision for loan losses on non-PCI loans |  | 20,740 |  |  | 15,139 |  |  | 41,388 |  |  | 35,072 |
Gross charge-offs: |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
C&I |  | (11,745 | ) |  | (13,534 | ) |  | (28,989 | ) |  | (31,979 | )
Consumer: |  |  |  |  |  |  |  |
Single-family residential |  | — |  |  | — |  |  | — |  |  | (1 | )
Other consumer |  | (14 | ) |  | (162 | ) |  | (28 | ) |  | (179 | )
Total gross charge-offs |  | (11,759 | ) |  | (13,696 | ) |  | (29,017 | ) |  | (32,159 | )
Gross recoveries: |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
C&I |  | 1,713 |  |  | 1,151 |  |  | 3,964 |  |  | 8,430 |
CRE |  | 1,837 |  |  | 2 |  |  | 2,059 |  |  | 429 |
Multifamily residential |  | 53 |  |  | 1,061 |  |  | 334 |  |  | 1,394 |
Construction and land |  | 439 |  |  | 258 |  |  | 502 |  |  | 693 |
Consumer: |  |  |  |  |  |  |  |
Single-family residential |  | 72 |  |  | 629 |  |  | 74 |  |  | 813 |
HELOCs |  | — |  |  | — |  |  | 2 |  |  | — |
Other consumer |  | 7 |  |  | — |  |  | 7 |  |  | 1 |
Total gross recoveries |  | 4,121 |  |  | 3,101 |  |  | 6,942 |  |  | 11,760 |
Net charge-offs |  | (7,638 | ) |  | (10,595 | ) |  | (22,075 | ) |  | (20,399 | )
Foreign currency translation adjustments |  | (362 | ) |  | (640 | ) |  | 7 |  |  | (232 | )
Allowance for non-PCI loans, end of period |  | 330,620 |  |  | 301,511 |  |  | 330,620 |  |  | 301,511 |
PCI Loans |  |  |  |  |  |  |  |
Allowance for PCI loans, beginning of period |  | 14 |  |  | 47 |  |  | 22 |  |  | 58 |
Reversal of loan losses on PCI loans |  | (9 | ) |  | (8 | ) |  | (17 | ) |  | (19 | )
Allowance for PCI loans, end of period |  | 5 |  |  | 39 |  |  | 5 |  |  | 39 |
Allowance for loan losses |  | $ | 330,625 |  |  | $ | 301,550 |  |  | $ | 330,625 |  |  | $ | 301,550 |
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 — Allowance for Credit Losses to the Consolidated Financial Statements of the Company’s 2018 Form 10-K. The following table presents a summary of activities in the allowance for unfunded credit reserves for the three and six months ended June 30, 2019 and 2018:
($ in thousands) |  | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Allowance for unfunded credit reserves, beginning of period |  | $ | 14,505 |  |  | $ | 13,614 |  |  | $ | 12,566 |  |  | $ | 13,318 |
(Reversal of) provision for unfunded credit reserves |  | (1,486 | ) |  | 405 |  |  | 453 |  |  | 701 |
Allowance for unfunded credit reserves, end of period |  | $ | 13,019 |  |  | $ | 14,019 |  |  | $ | 13,019 |  |  | $ | 14,019 |
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 12 — Commitments and Contingencies to the Consolidated Financial Statements in this Form 10-Q 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 June 30, 2019 and December 31, 2018:
($ in thousands) |  | June 30, 2019
| Commercial |  | Consumer |  | Total
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single- Family Residential |  | HELOCs |  | Other Consumer |
Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 14,137 |  |  | $ | 134 |  |  | $ | 64 |  |  | $ | — |  |  | $ | 48 |  |  | $ | 5 |  |  | $ | 2,500 |  |  | $ | 16,888 |
Collectively evaluated for impairment |  | 191,366 |  |  | 40,378 |  |  | 18,510 |  |  | 22,961 |  |  | 32,715 |  |  | 6,172 |  |  | 1,630 |  |  | 313,732 |
Acquired with deteriorated credit quality |  | — |  |  | 5 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 5 |
Total |  | $ | 205,503 |  |  | $ | 40,517 |  |  | $ | 18,574 |  |  | $ | 22,961 |  |  | $ | 32,763 |  |  | $ | 6,177 |  |  | $ | 4,130 |  |  | $ | 330,625 |
Recorded investment in loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 143,120 |  |  | $ | 26,945 |  |  | $ | 5,253 |  |  | $ | — |  |  | $ | 20,890 |  |  | $ | 9,933 |  |  | $ | 2,504 |  |  | $ | 208,645 |
Collectively evaluated for impairment |  | 12,257,970 |  |  | 9,695,637 |  |  | 2,342,498 |  |  | 674,757 |  |  | 6,382,738 |  |  | 1,557,967 |  |  | 339,298 |  |  | 33,250,865 |
Acquired with deteriorated credit quality (1) |  | 1,877 |  |  | 145,851 |  |  | 24,594 |  |  | 41 |  |  | 91,254 |  |  | 7,250 |  |  | — |  |  | 270,867 |
Total (1) |  | $ | 12,402,967 |  |  | $ | 9,868,433 |  |  | $ | 2,372,345 |  |  | $ | 674,798 |  |  | $ | 6,494,882 |  |  | $ | 1,575,150 |  |  | $ | 341,802 |  |  | $ | 33,730,377 |
($ in thousands) |  | December 31, 2018
| Commercial |  | Consumer |  | Total
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single- Family Residential |  | HELOCs |  | Other Consumer |
Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 1,219 |  |  | $ | 208 |  |  | $ | 75 |  |  | $ | — |  |  | $ | 34 |  |  | $ | 5 |  |  | $ | 2,491 |  |  | $ | 4,032 |
Collectively evaluated for impairment |  | 190,121 |  |  | 38,823 |  |  | 19,208 |  |  | 20,282 |  |  | 31,306 |  |  | 5,769 |  |  | 1,759 |  |  | 307,268 |
Acquired with deteriorated credit quality |  | — |  |  | 22 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 22 |
Total |  | $ | 191,340 |  |  | $ | 39,053 |  |  | $ | 19,283 |  |  | $ | 20,282 |  |  | $ | 31,340 |  |  | $ | 5,774 |  |  | $ | 4,250 |  |  | $ | 311,322 |
Recorded investment in loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 57,088 |  |  | $ | 30,352 |  |  | $ | 5,560 |  |  | $ | — |  |  | $ | 13,460 |  |  | $ | 9,956 |  |  | $ | 2,502 |  |  | $ | 118,918 |
Collectively evaluated for impairment |  | 11,997,730 |  |  | 9,254,231 |  |  | 2,240,946 |  |  | 538,752 |  |  | 5,925,798 |  |  | 1,672,023 |  |  | 328,768 |  |  | 31,958,248 |
Acquired with deteriorated credit quality (1) |  | 2,152 |  |  | 165,252 |  |  | 34,526 |  |  | 42 |  |  | 97,196 |  |  | 8,855 |  |  | — |  |  | 308,023 |
Total (1) |  | $ | 12,056,970 |  |  | $ | 9,449,835 |  |  | $ | 2,281,032 |  |  | $ | 538,794 |  |  | $ | 6,036,454 |  |  | $ | 1,690,834 |  |  | $ | 331,270 |  |  | $ | 32,385,189 |
(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. Projected loss rates and prepayment speeds 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 collected at acquisition, considering the impact of prepayments, is referred to as the “nonaccretable difference.” The following table presents the changes in accretable yield for PCI loans for the three and six months ended June 30, 2019 and 2018:
($ in thousands) |  | Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Accretable yield for PCI loans, beginning of period |  | $ | 68,861 |  |  | $ | 95,864 |  |  | $ | 74,870 |  |  | $ | 101,977 |
Accretion |  | (5,806 | ) |  | (11,084 | ) |  | (12,007 | ) |  | (20,218 | )
Changes in expected cash flows |  | 998 |  |  | 272 |  |  | 1,190 |  |  | 3,293 |
Accretable yield for PCI loans, end of period |  | $ | 64,053 |  |  | $ | 85,052 |  |  | $ | 64,053 |  |  | $ | 85,052 |
Loans Held-for-Sale At the time of commitment to originate or purchase a loan, the loan is determined to be held for investment if it is the Company’s intent to hold the loan to maturity or for the “foreseeable future,” subject to periodic reviews under the Company’s evaluation processes, including asset/liability 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. As of June 30, 2019, loans held-for-sale of $3.9 million were comprised of C&I loans. In comparison, as of December 31, 2018, loans held-for-sale of $275 thousand consisted of single-family residential loans. Loan Purchases, Transfers and Sales The Company purchases and sells loans in the secondary market in the ordinary course of business. From time to time, purchased loans may be transferred from held-for-investment to held-for-sale, and write-downs to allowance for loan losses are recorded, when appropriate. The following tables present information about loan purchased for the held-for-investment portfolio, reclassification of loans from held-for-investment to held-for-sale, and sales during the three and six months ended June 30, 2019 and 2018:
($ in thousands) |  | Three Months Ended June 30, 2019
| Commercial |  | Consumer |  | Total
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single-Family Residential |
Loans transferred from held-for-investment to held-for-sale (1) |  | $ | 79,593 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,573 |  |  | $ | — |  |  | $ | 81,166 |
Sales (2)(3)(4) |  | $ | 76,031 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,573 |  |  | $ | 1,172 |  |  | $ | 78,776 |
Purchases (5) |  | $ | 159,100 |  |  | $ | — |  |  | $ | 1,734 |  |  | $ | — |  |  | $ | 17,637 |  |  | $ | 178,471 |
($ in thousands) |  | Three Months Ended June 30, 2018
| Commercial |  | Consumer |  | Total
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single-Family Residential |
Loans transferred from held-for-investment to held-for-sale (1) |  | $ | 99,449 |  |  | $ | 30,415 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 129,864 |
Sales (2)(3)(4) |  | $ | 140,326 |  |  | $ | 30,415 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,175 |  |  | $ | 178,916 |
Purchases (5) |  | $ | 285,615 |  |  | $ | — |  |  | $ | 3,249 |  |  | $ | — |  |  | $ | 20,912 |  |  | $ | 309,776 |
($ in thousands) |  | Six Months Ended June 30, 2019
| Commercial |  | Consumer |  | Total
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single-Family Residential |
Loans transferred from held-for-investment to held-for-sale (1) |  | $ | 155,166 |  |  | $ | 16,655 |  |  | $ | — |  |  | $ | 1,573 |  |  | $ | — |  |  | $ | 173,394 |
Sales (2)(3)(4) |  | $ | 151,677 |  |  | $ | 16,655 |  |  | $ | — |  |  | $ | 1,573 |  |  | $ | 3,614 |  |  | $ | 173,519 |
Purchases (5) |  | $ | 266,294 |  |  | $ | — |  |  | $ | 5,952 |  |  | $ | — |  |  | $ | 54,039 |  |  | $ | 326,285 |
($ in thousands) |  | Six Months Ended June 30, 2018
| Commercial |  | Consumer | Total
| C&I |  | CRE |  | Multifamily Residential |  | Construction and Land |  | Single-Family Residential |
Loans transferred from held-for-investment to held-for-sale (1) |  | $ | 245,840 |  |  | $ | 39,791 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 285,631 |
Sales (2)(3)(4) |  | $ | 242,691 |  |  | $ | 39,791 |  |  | $ | — |  |  | $ | — |  |  | $ | 10,721 |  |  | $ | 293,203 |
Purchases (5) |  | $ | 350,362 |  |  | $ | — |  |  | $ | 3,435 |  |  | $ | — |  |  | $ | 36,025 |  |  | $ | 389,822 |
(1) | The Company recorded $317 thousand and $390 thousand in write-downs to the allowance for loan losses related to loans transferred from held-for-investment to held-for-sale and subsequently sold during the three and six months ended June 30, 2019, respectively, and $13.3 million and $13.4 million during the same periods in 2018, respectively.
(2) | Includes originated loans sold of $55.7 million and $132.2 million for the three and six months ended June 30, 2019, respectively, and $103.5 million and $193.2 million during the same periods in 2018, respectively. Originated loans sold during the three and six months ended June 30, 2019 were primarily C&I loans. In comparison, originated loans sold during the same periods in 2018 were primarily C&I and CRE loans.
(3) | Includes purchased loans sold in the secondary market of $23.1 million and $41.3 million for the three and six months ended June 30, 2019, respectively, and $75.4 million and $100.0 million during the same periods in 2018, respectively.
(4) | Net gains on sales of loans, excluding the lower of cost or fair value adjustments, were $15 thousand and $930 thousand for the three and six months ended June 30, 2019, respectively, and $2.3 million and $3.9 million during the same periods in 2018, respectively. No lower of cost or fair value adjustments were recorded for each of the three and six months ended June 30, 2019 and 2018.
(5) C&I loan purchases for each of the three and six months ended June 30, 2019 and 2018 were mainly comprised of C&I syndicated loans.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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