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LOANS AND ALLOWANCE FOR LOAN LOSSES | 6 Months Ended
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Jun. 30, 2019
Receivables [Abstract] |
LOANS AND ALLOWANCE FOR LOAN LOSSES | LOANS AND ALLOWANCE FOR LOAN LOSSES The following table presents the balances in the Company’s loan portfolios as of the dates indicated:
($ in thousands) |  | June 30, 2019 |  | December 31, 2018
Commercial: |  |  |  |
Commercial and industrial |  | $ | 1,951,707 |  |  | $ | 1,944,142 |
Commercial real estate |  | 856,497 |  |  | 867,013 |
Multifamily |  | 1,598,978 |  |  | 2,241,246 |
SBA |  | 80,929 |  |  | 68,741 |
Construction |  | 209,029 |  |  | 203,976 |
Consumer: |  |  |  |
Single family residential mortgage |  | 1,961,065 |  |  | 2,305,490 |
Other consumer |  | 61,365 |  |  | 70,265 |
Total loans(1) |  | $ | 6,719,570 |  |  | $ | 7,700,873 |
Percentage to total loans |  | 100.0 | % |  | 100.0 | %
Allowance for loan losses |  | (59,523 | ) |  | (62,192 | )
Loans receivable, net |  | $ | 6,660,047 |  |  | $ | 7,638,681 |
(1) Total loans include deferred loan origination costs/(fees) and premiums/(discounts), net of $16.1 million and $17.7 million, respectively, at June 30, 2019 and December 31, 2018. Non-Traditional Mortgage Loans ("NTM") The following table presents the composition of the NTM portfolio as of the dates indicated:
|  | June 30, 2019 |  | December 31, 2018
($ in thousands) |  | Count |  | Amount |  | Percent |  | Count |  | Amount |  | Percent
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage: |  |  |  |  |  |  |  |  |  |  |  |
Green Loans (HELOC) - first liens(1) |  | 78 |  |  | $ | 61,439 |  |  | 8.2 | % |  | 88 |  |  | $ | 67,729 |  |  | 8.2 | %
Interest-only - first liens(2) |  | 444 |  |  | 680,361 |  |  | 91.0 | % |  | 519 |  |  | 753,061 |  |  | 91.1 | %
Negative amortization(3) |  | 10 |  |  | 3,219 |  |  | 0.4 | % |  | 11 |  |  | 3,528 |  |  | 0.4 | %
Total NTM - first liens |  | 532 |  |  | 745,019 |  |  | 99.7 | % |  | 618 |  |  | 824,318 |  |  | 99.7 | %
Other consumer: |  |  |  |  |  |  |  |  |  |  |  |
Green Loans (HELOC) - second liens(1) |  | 7 |  |  | 2,247 |  |  | 0.3 | % |  | 10 |  |  | 2,413 |  |  | 0.3 | %
Total NTM - second liens |  | 7 |  |  | 2,247 |  |  | 0.3 | % |  | 10 |  |  | 2,413 |  |  | 0.3 | %
Total NTM loans |  | 539 |  |  | $ | 747,266 |  |  | 100.0 | % |  | 628 |  |  | $ | 826,731 |  |  | 100.0 | %
Total loans receivable |  |  |  | $ | 6,719,570 |  |  |  |  |  |  | $ | 7,700,873 |  |  |
% of total NTM loans to total loans receivable |  |  |  | 11.1 | % |  |  |  |  |  | 10.7 | % |  |
Green Loans Green Loans are single family residential first and second mortgage lines of credit with a linked checking account that allows all types of deposits and withdrawals to be performed. These loans are generally interest only for a 15-year term with a balloon payment due at maturity. At June 30, 2019 and December 31, 2018, $286 thousand and $0, respectively, of the Company's Green Loans were non-performing. As a result of their unique payment feature, Green Loans possess higher credit risk; however, management believes the risk is mitigated through the Company’s loan terms and underwriting standards, including its policies on LTV ratios and the Company’s contractual ability to curtail loans when the value of the underlying collateral declines. The Company discontinued origination of Green Loans in 2011. Interest Only Loans Interest only loans are primarily single family residential first mortgage loans with payment features that allow interest only payments in initial periods before converting to a fully amortizing loan. At June 30, 2019 and December 31, 2018, interest only loans totaled $680.4 million and $753.1 million, respectively. At June 30, 2019 and December 31, 2018, $827 thousand and $0, respectively, of the interest only loans were non-performing. Loans with the Potential for Negative Amortization Negative amortization loans totaled $3.2 million and $3.5 million at June 30, 2019 and December 31, 2018, respectively. The Company discontinued origination of negative amortization loans in 2007. At June 30, 2019 and December 31, 2018, none of the loans with the potential for negative amortization were non-performing. These loans pose a potentially higher credit risk because of the lack of principal amortization and potential for negative amortization; however, management believes the credit risk associated with these loans is mitigated through the loan terms and underwriting standards, including the Company’s policies on LTV ratios. Allowance for Loan Losses The Company has established credit risk management processes that include regular management review of the loan portfolio to identify problem loans. During the ordinary course of business, management may become aware of borrowers and lessees who may not be able to fulfill the contractual payment requirements of the loan agreements. Such loans are subject to increased monitoring. Consideration is given to placing the loan or lease on non-accrual status, assessing the need for additional ALLL, and partial or full charge off the principal balance. The Company maintains the ALLL at a level that is considered adequate to cover the estimated incurred losses in the loan portfolio. The Company also maintains a separate reserve for unfunded loan commitments at a level that is considered adequate to cover the estimated incurred loss. The estimated funding of the loan commitments and credit risk factors are determined based on outstanding loans that share similar credit risk exposure are used to determine the adequacy of the reserve. At June 30, 2019 and December 31, 2018, the reserve for unfunded loan commitments was $4.3 million and $4.6 million, respectively, which are included in Accrued Expenses and Other Liabilities on the Consolidated Statements of Financial Condition. The credit risk monitoring system is designed to identify impaired and potential problem loans, and to perform periodic evaluation of impairment and the adequacy of the allowance for credit losses in a timely manner. In addition, the Board of Directors of the Bank has adopted a credit policy that includes a credit review and control system that it believes should be effective in ensuring that the Company maintains an adequate allowance for loan losses. The Board of Directors also provides oversight and guidance for management’s allowance evaluation process. The following table presents a summary of activity in the ALLL for the periods indicated:
|  | Three Months Ended June 30, |  | Six Months Ended June 30,
($ in thousands) |  | 2019 |  | 2018 |  | 2019 |  | 2018
Balance at beginning of period |  | $ | 63,885 |  |  | $ | 54,763 |  |  | $ | 62,192 |  |  | $ | 49,333 |
Loans charged off |  | (2,451 | ) |  | (950 | ) |  | (3,514 | ) |  | (15,589 | )
Recoveries of loans previously charged off |  | 76 |  |  | 212 |  |  | 320 |  |  | 782 |
Net charge-offs |  | (2,375 | ) |  | (738 | ) |  | (3,194 | ) |  | (14,807 | )
(Reversal of) provision for loan losses |  | (1,987 | ) |  | 2,653 |  |  | 525 |  |  | 22,152 |
Balance at end of period |  | $ | 59,523 |  |  | $ | 56,678 |  |  | $ | 59,523 |  |  | $ | 56,678 |
During the three months ended March 31, 2018, the Company recorded a charge-off of $13.9 million, which reflected the outstanding balance under a $15.0 million line of credit that was originated during the three months ended March 31, 2018. Subsequent to the granting of the line of credit, representations from the borrower in applying for the line of credit were determined by the Bank to be false, and third party bank account statements provided by the borrower to secure the line of credit were found to be fraudulent. The line of credit was granted after the borrower appeared to have satisfied a pre-condition that the line of credit be fully cash collateralized and secured by a bank account at a third party financial institution pledged to the Bank. As part of the Bank’s credit review and portfolio management process, the line of credit and disbursements were reviewed subsequent to closing and compliance with the borrower’s covenants was monitored. As part of this process, on March 9, 2018, the Bank received information that caused it to believe the existence of the pledged bank account had been misrepresented by the borrower and that the account had previously been closed. The Bank filed an action in Federal court pursuing the borrower and other parties. That action was voluntarily dismissed by the Bank without prejudice, and a substantially similar action was filed in Los Angeles County Superior Court. The Bank is also considering other available sources of collection and other potential means of mitigating the loss; however, no assurance can be given that it will be successful in this regard. Upon extensive review of the underwriting process for this loan, the Bank determined that this loan was the result of an isolated event of external fraud. The following table presents the activity and balance in the ALLL and the recorded investment, excluding accrued interest, in loans based on the impairment methodology as of or for the three and six months ended June 30, 2019:
($ in thousands) |  | Commercial and Industrial |  | Commercial Real Estate |  | Multifamily |  | SBA |  | Construction |  | Lease Financing |  | Single Family Residential Mortgage |  | Other Consumer |  | Total
ALLL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at March 31, 2019 |  | $ | 18,893 |  |  | $ | 6,838 |  |  | $ | 18,898 |  |  | $ | 3,057 |  |  | $ | 3,453 |  |  | $ | — |  |  | $ | 12,142 |  |  | $ | 604 |  |  | $ | 63,885 |
Charge-offs |  | (2,022 | ) |  | — |  |  | (6 | ) |  | 8 |  |  | — |  |  | — |  |  | (425 | ) |  | (6 | ) |  | (2,451 | )
Recoveries |  | 11 |  |  | — |  |  | — |  |  | 60 |  |  | — |  |  | 3 |  |  | — |  |  | 2 |  |  | 76 |
Net charge-offs |  | (2,011 | ) |  | — |  |  | (6 | ) |  | 68 |  |  | — |  |  | 3 |  |  | (425 | ) |  | (4 | ) |  | (2,375 | )
Provision (reversal) |  | 4,647 |  |  | 39 |  |  | (6,267 | ) |  | (5 | ) |  | 262 |  |  | (3 | ) |  | (645 | ) |  | (15 | ) |  | (1,987 | )
Balance at June 30, 2019 |  | $ | 21,529 |  |  | $ | 6,877 |  |  | $ | 12,625 |  |  | $ | 3,120 |  |  | $ | 3,715 |  |  | $ | — |  |  | $ | 11,072 |  |  | $ | 585 |  |  | $ | 59,523 |
Balance at December 31, 2018 |  | $ | 18,191 |  |  | $ | 6,674 |  |  | $ | 17,970 |  |  | $ | 1,827 |  |  | $ | 3,461 |  |  | $ | — |  |  | $ | 13,128 |  |  | $ | 941 |  |  | $ | 62,192 |
Charge-offs |  | (2,115 | ) |  | — |  |  | (6 | ) |  | (348 | ) |  | — |  |  | — |  |  | (951 | ) |  | (94 | ) |  | (3,514 | )
Recoveries |  | 44 |  |  | — |  |  | — |  |  | 101 |  |  | — |  |  | 6 |  |  | 150 |  |  | 19 |  |  | 320 |
Net charge-offs |  | (2,071 | ) |  | — |  |  | (6 | ) |  | (247 | ) |  | — |  |  | 6 |  |  | (801 | ) |  | (75 | ) |  | (3,194 | )
Provision |  | 5,409 |  |  | 203 |  |  | (5,339 | ) |  | 1,540 |  |  | 254 |  |  | (6 | ) |  | (1,255 | ) |  | (281 | ) |  | 525 |
Balance at June 30, 2019 |  | $ | 21,529 |  |  | $ | 6,877 |  |  | $ | 12,625 |  |  | $ | 3,120 |  |  | $ | 3,715 |  |  | $ | — |  |  | $ | 11,072 |  |  | $ | 585 |  |  | $ | 59,523 |
Individually evaluated for impairment |  | $ | 1,239 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,563 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 22 |  |  | $ | 2,824 |
Collectively evaluated for impairment |  | 20,290 |  |  | 6,877 |  |  | 12,625 |  |  | 1,557 |  |  | 3,715 |  |  | — |  |  | 11,072 |  |  | 563 |  |  | 56,699 |
Total ending ALLL balance |  | $ | 21,529 |  |  | $ | 6,877 |  |  | $ | 12,625 |  |  | $ | 3,120 |  |  | $ | 3,715 |  |  | $ | — |  |  | $ | 11,072 |  |  | $ | 585 |  |  | $ | 59,523 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 20,429 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,262 |  |  | $ | 2,519 |  |  | $ | — |  |  | $ | 21,021 |  |  | $ | 1,169 |  |  | $ | 48,400 |
Collectively evaluated for impairment |  | 1,931,278 |  |  | 856,497 |  |  | 1,598,978 |  |  | 77,667 |  |  | 206,510 |  |  | — |  |  | 1,940,044 |  |  | 60,196 |  |  | 6,671,170 |
Total ending loan balances |  | $ | 1,951,707 |  |  | $ | 856,497 |  |  | $ | 1,598,978 |  |  | $ | 80,929 |  |  | $ | 209,029 |  |  | $ | — |  |  | $ | 1,961,065 |  |  | $ | 61,365 |  |  | $ | 6,719,570 |
The following table presents the activity and balance in the ALLL and the recorded investment, excluding accrued interest, in loans based on the impairment methodology as of or for the three and six months ended June 30, 2018:
($ in thousands) |  | Commercial and Industrial |  | Commercial Real Estate |  | Multifamily |  | SBA |  | Construction |  | Lease Financing |  | Single Family Residential Mortgage |  | Other Consumer |  | Total
ALLL: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance at March 31, 2018 |  | $ | 17,571 |  |  | $ | 5,417 |  |  | $ | 14,219 |  |  | $ | 1,577 |  |  | $ | 3,220 |  |  | $ | — |  |  | $ | 11,969 |  |  | $ | 790 |  |  | $ | 54,763 |
Charge-offs |  | (276 | ) |  | — |  |  | (8 | ) |  | (302 | ) |  | — |  |  | — |  |  | (364 | ) |  | — |  |  | (950 | )
Recoveries |  | 36 |  |  | — |  |  | — |  |  | 167 |  |  | — |  |  | 5 |  |  | — |  |  | 4 |  |  | 212 |
Net charge-offs |  | (240 | ) |  | — |  |  | (8 | ) |  | (135 | ) |  | — |  |  | 5 |  |  | (364 | ) |  | 4 |  |  | (738 | )
Provision (reversal) |  | (467 | ) |  | 315 |  |  | 419 |  |  | 398 |  |  | 199 |  |  | (5 | ) |  | 1,631 |  |  | 163 |  |  | 2,653 |
Balance at June 30, 2018 |  | $ | 16,864 |  |  | $ | 5,732 |  |  | $ | 14,630 |  |  | $ | 1,840 |  |  | $ | 3,419 |  |  | $ | — |  |  | $ | 13,236 |  |  | $ | 957 |  |  | $ | 56,678 |
Balance at December 31, 2017 |  | $ | 14,280 |  |  | $ | 4,971 |  |  | $ | 13,265 |  |  | $ | 1,701 |  |  | $ | 3,318 |  |  | $ | — |  |  | $ | 10,996 |  |  | $ | 802 |  |  | $ | 49,333 |
Charge-offs |  | (347 | ) |  | — |  |  | (8 | ) |  | (683 | ) |  | — |  |  | — |  |  | (479 | ) |  | (14,072 | ) |  | (15,589 | )
Recoveries |  | 97 |  |  | — |  |  | — |  |  | 232 |  |  | — |  |  | 9 |  |  | 436 |  |  | 8 |  |  | 782 |
Net charge-offs |  | (250 | ) |  | — |  |  | (8 | ) |  | (451 | ) |  | — |  |  | 9 |  |  | (43 | ) |  | (14,064 | ) |  | (14,807 | )
Provision |  | 2,834 |  |  | 761 |  |  | 1,373 |  |  | 590 |  |  | 101 |  |  | (9 | ) |  | 2,283 |  |  | 14,219 |  |  | 22,152 |
Balance at June 30, 2018 |  | $ | 16,864 |  |  | $ | 5,732 |  |  | $ | 14,630 |  |  | $ | 1,840 |  |  | $ | 3,419 |  |  | $ | — |  |  | $ | 13,236 |  |  | $ | 957 |  |  | $ | 56,678 |
Individually evaluated for impairment |  | $ | 595 |  |  | $ | — |  |  | $ | — |  |  | $ | 124 |  |  | $ | — |  |  | $ | — |  |  | $ | 461 |  |  | $ | 8 |  |  | $ | 1,188 |
Collectively evaluated for impairment |  | 16,269 |  |  | 5,732 |  |  | 14,630 |  |  | 1,716 |  |  | 3,419 |  |  | — |  |  | 12,775 |  |  | 949 |  |  | 55,490 |
Total ending ALLL balance |  | $ | 16,864 |  |  | $ | 5,732 |  |  | $ | 14,630 |  |  | $ | 1,840 |  |  | $ | 3,419 |  |  | $ | — |  |  | $ | 13,236 |  |  | $ | 957 |  |  | $ | 56,678 |
Loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 5,829 |  |  | $ | — |  |  | $ | — |  |  | $ | 646 |  |  | $ | — |  |  | $ | — |  |  | $ | 20,140 |  |  | $ | 750 |  |  | $ | 27,365 |
Collectively evaluated for impairment |  | 1,736,730 |  |  | 793,855 |  |  | 1,959,965 |  |  | 77,446 |  |  | 211,110 |  |  | — |  |  | 2,154,043 |  |  | 75,490 |  |  | 7,008,639 |
Total ending loan balances |  | $ | 1,742,559 |  |  | $ | 793,855 |  |  | $ | 1,959,965 |  |  | $ | 78,092 |  |  | $ | 211,110 |  |  | $ | — |  |  | $ | 2,174,183 |  |  | $ | 76,240 |  |  | $ | 7,036,004 |
The following table presents loans individually evaluated for impairment by class of loans as of the dates indicated. The recorded investment, excluding accrued interest, presents customer balances net of any partial charge-offs recognized on the loans and net of any deferred fees and costs and any purchase premium or discount.
|  | June 30, 2019 |  | December 31, 2018
($ in thousands) |  | Unpaid Principal Balance |  | Recorded Investment |  | Allowance for Loan Losses |  | Unpaid Principal Balance |  | Recorded Investment |  | Allowance for Loan Losses
With no related ALLL recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 18,434 |  |  | $ | 18,404 |  |  | $ | — |  |  | $ | 5,491 |  |  | $ | 5,455 |  |  | $ | — |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
SBA |  | 1,320 |  |  | 1,251 |  |  | — |  |  | 1,668 |  |  | 1,588 |  |  | — |
Construction |  | 2,519 |  |  | 2,519 |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 20,938 |  |  | 21,021 |  |  | — |  |  | 12,115 |  |  | 12,161 |  |  | — |
Other consumer |  | 1,167 |  |  | 1,147 |  |  | — |  |  | 469 |  |  | 469 |  |  | — |
With an ALLL recorded: |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 2,025 |  |  | 2,025 |  |  | 1,239 |  |  | — |  |  | — |  |  | — |
SBA |  | 2,107 |  |  | 2,011 |  |  | 1,563 |  |  | 823 |  |  | 788 |  |  | 562 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | — |  |  | — |  |  | — |  |  | 5,993 |  |  | 6,032 |  |  | 161 |
Other consumer |  | 22 |  |  | 22 |  |  | 22 |  |  | 468 |  |  | 452 |  |  | 106 |
Total |  | $ | 48,532 |  |  | $ | 48,400 |  |  | $ | 2,824 |  |  | $ | 27,027 |  |  | $ | 26,945 |  |  | $ | 829 |
The following table presents information on impaired loans, disaggregated by class, for the periods indicated:
|  | Three Months Ended |  | Six Months Ended
($ in thousands) |  | Average Recorded Investment |  | Interest Income Recognized |  | Cash Basis Interest Recognized |  | Average Recorded Investment |  | Interest Income Recognized |  | Cash Basis Interest Recognized
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 20,794 |  |  | $ | 255 |  |  | $ | 254 |  |  | $ | 12,921 |  |  | $ | 255 |  |  | $ | 254 |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | 289 |  |  | — |  |  | — |
SBA |  | 3,297 |  |  | 4 |  |  | 4 |  |  | 3,571 |  |  | 8 |  |  | 8 |
Construction |  | 2,519 |  |  | — |  |  | — |  |  | 2,519 |  |  | — |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 21,092 |  |  | 58 |  |  | 48 |  |  | 20,208 |  |  | 116 |  |  | 97 |
Other consumer |  | 1,177 |  |  | 4 |  |  | 3 |  |  | 1,011 |  |  | 7 |  |  | 6 |
Total |  | $ | 48,879 |  |  | $ | 321 |  |  | $ | 309 |  |  | $ | 40,519 |  |  | $ | 386 |  |  | $ | 365 |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | 5,900 |  |  | $ | 1 |  |  | $ | 1 |  |  | $ | 5,616 |  |  | $ | 4 |  |  | $ | 4 |
SBA |  | 654 |  |  | — |  |  | — |  |  | 514 |  |  | — |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 20,274 |  |  | 58 |  |  | 47 |  |  | 19,994 |  |  | 115 |  |  | 96 |
Other consumer |  | 760 |  |  | 3 |  |  | 3 |  |  | 755 |  |  | 6 |  |  | 5 |
Total |  | $ | 27,588 |  |  | $ | 62 |  |  | $ | 51 |  |  | $ | 26,879 |  |  | $ | 125 |  |  | $ | 105 |
Past Due Loans The following table presents the aging of the recorded investment in past due loans, excluding accrued interest receivable (which is not considered to be material), by class of loans as of dates indicated:
($ in thousands) |  | 30 - 59 Days Past Due |  | 60 - 89 Days Past Due |  | Greater than 89 Days Past due |  | Total Past Due |  | Current |  | Total
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
NTM loans: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | $ | 19,960 |  |  | $ | — |  |  | $ | 827 |  |  | $ | 20,787 |  |  | $ | 724,232 |  |  | $ | 745,019 |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,247 |  |  | 2,247 |
Total NTM loans |  | 19,960 |  |  | — |  |  | 827 |  |  | 20,787 |  |  | 726,479 |  |  | 747,266 |
Traditional loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 1,063 |  |  | 997 |  |  | 4,017 |  |  | 6,077 |  |  | 1,945,630 |  |  | 1,951,707 |
Commercial real estate |  | — |  |  | — |  |  | — |  |  | — |  |  | 856,497 |  |  | 856,497 |
Multifamily |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,598,978 |  |  | 1,598,978 |
SBA |  | 944 |  |  | 73 |  |  | 2,672 |  |  | 3,689 |  |  | 77,240 |  |  | 80,929 |
Construction |  | — |  |  | — |  |  | 2,519 |  |  | 2,519 |  |  | 206,510 |  |  | 209,029 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 7,447 |  |  | 3,645 |  |  | 6,683 |  |  | 17,775 |  |  | 1,198,271 |  |  | 1,216,046 |
Other consumer |  | 514 |  |  | 295 |  |  | 554 |  |  | 1,363 |  |  | 57,755 |  |  | 59,118 |
Total traditional loans |  | 9,968 |  |  | 5,010 |  |  | 16,445 |  |  | 31,423 |  |  | 5,940,881 |  |  | 5,972,304 |
Total |  | $ | 29,928 |  |  | $ | 5,010 |  |  | $ | 17,272 |  |  | $ | 52,210 |  |  | $ | 6,667,360 |  |  | $ | 6,719,570 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |
NTM loans: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | $ | 7,430 |  |  | $ | 617 |  |  | $ | — |  |  | $ | 8,047 |  |  | $ | 816,271 |  |  | $ | 824,318 |
Other consumer |  | — |  |  | — |  |  | — |  |  | — |  |  | 2,413 |  |  | 2,413 |
Total NTM loans |  | 7,430 |  |  | 617 |  |  | — |  |  | 8,047 |  |  | 818,684 |  |  | 826,731 |
Traditional loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 350 |  |  | 1,596 |  |  | 3,340 |  |  | 5,286 |  |  | 1,938,856 |  |  | 1,944,142 |
Commercial real estate |  | — |  |  | 582 |  |  | — |  |  | 582 |  |  | 866,431 |  |  | 867,013 |
Multifamily |  | 356 |  |  | — |  |  | — |  |  | 356 |  |  | 2,240,890 |  |  | 2,241,246 |
SBA |  | 551 |  |  | 77 |  |  | 862 |  |  | 1,490 |  |  | 67,251 |  |  | 68,741 |
Construction |  | — |  |  | 939 |  |  | — |  |  | 939 |  |  | 203,037 |  |  | 203,976 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 7,321 |  |  | 3,160 |  |  | 9,198 |  |  | 19,679 |  |  | 1,461,493 |  |  | 1,481,172 |
Other consumer |  | 3,132 |  |  | 573 |  |  | 446 |  |  | 4,151 |  |  | 63,701 |  |  | 67,852 |
Total traditional loans |  | 11,710 |  |  | 6,927 |  |  | 13,846 |  |  | 32,483 |  |  | 6,841,659 |  |  | 6,874,142 |
Total |  | $ | 19,140 |  |  | $ | 7,544 |  |  | $ | 13,846 |  |  | $ | 40,530 |  |  | $ | 7,660,343 |  |  | $ | 7,700,873 |
Non-accrual Loans The following table presents non-accrual loans as of the dates indicated:
| June 30, 2019 |  | December 31, 2018
($ in thousands) | NTM Loans |  | Traditional Loans |  | Total |  | NTM Loans |  | Traditional Loans |  | Total
Non-accrual loans |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | — |  |  | $ | 5,716 |  |  | $ | 5,716 |  |  | $ | — |  |  | $ | 5,455 |  |  | $ | 5,455 |
Commercial real estate | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
SBA | — |  |  | 3,440 |  |  | 3,440 |  |  | — |  |  | 2,574 |  |  | 2,574 |
Construction | — |  |  | 2,519 |  |  | 2,519 |  |  | — |  |  | — |  |  | — |
Consumer: |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage | 1,113 |  |  | 14,836 |  |  | 15,949 |  |  | — |  |  | 12,929 |  |  | 12,929 |
Other consumer | — |  |  | 875 |  |  | 875 |  |  | — |  |  | 627 |  |  | 627 |
Total non-accrual loans | $ | 1,113 |  |  | $ | 27,386 |  |  | $ | 28,499 |  |  | $ | — |  |  | $ | 21,585 |  |  | $ | 21,585 |
At June 30, 2019 and December 31, 2018, $275 thousand and $470 thousand of loans were past due 90 days or more and still accruing. Loans in Process of Foreclosure At June 30, 2019 and December 31, 2018, consumer mortgage loans of $8.8 million and $5.1 million, respectively, were secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction. Troubled Debt Restructurings A modification of a loan constitutes a troubled debt restructuring (TDR) when the Company, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to the borrower that it would not otherwise consider. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of the loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. Troubled debt restructured loans consisted of the following as of the dates indicated:
|  | June 30, 2019 |  | December 31, 2018
($ in thousands) |  | NTM Loans |  | Traditional Loans |  | Total |  | NTM Loans |  | Traditional Loans |  | Total
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | $ | — |  |  | $ | 16,250 |  |  | $ | 16,250 |  |  | $ | — |  |  | $ | 2,276 |  |  | $ | 2,276 |
SBA |  | — |  |  | 1,057 |  |  | 1,057 |  |  | — |  |  | 187 |  |  | 187 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 2,653 |  |  | 2,419 |  |  | 5,072 |  |  | 2,668 |  |  | 2,596 |  |  | 5,264 |
Other consumer |  | 294 |  |  | — |  |  | 294 |  |  | 294 |  |  | — |  |  | 294 |
Total |  | $ | 2,947 |  |  | $ | 19,726 |  |  | $ | 22,673 |  |  | $ | 2,962 |  |  | $ | 5,059 |  |  | $ | 8,021 |
The Company did not have any commitments to lend to customers with outstanding loans that were classified as TDRs as of June 30, 2019 or December 31, 2018. Accruing TDRs were $20.2 million and non-accrual TDRs were $2.4 million at June 30, 2019 compared to accruing TDRs of $5.7 million and non-accrual TDRs of $2.3 million at December 31, 2018. The following table summarizes the pre-modification and post-modification balances of the new TDRs for the periods indicated:
|  | Three Months Ended |  | Six Months Ended
($ in thousands) |  | Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 10 |  |  | $ | 17,339 |  |  | $ | 17,020 |  |  | 10 |  |  | $ | 17,339 |  |  | $ | 17,020 |
SBA |  | 2 |  |  | 3,214 |  |  | 869 |  |  | 2 |  |  | 3,214 |  |  | 869 |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other consumer |  | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
Total |  | 12 |  |  | 20,553 |  |  | 17,889 |  |  | 12 |  |  | $ | 20,553 |  |  | $ | 17,889 |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | — |  |  | $ | — |  |  | $ | — |  |  | 2 |  |  | $ | 171 |  |  | $ | 163 |
Total |  | — |  |  | $ | — |  |  | $ | — |  |  | 2 |  |  | $ | 171 |  |  | $ | 163 |
The Company considers a TDR to be in payment default once it becomes 30 days or more past due following a modification. During the six months ended June 30, 2019 and 2018, there were no loans that were modified as TDRs during the past 12 months that had subsequent payment defaults during the periods. The following table summarizes TDRs by modification type for the periods indicated:
|  | Three Months Ended
|  | Modification Type
|  | Change in Principal Payments and Interest Rates |  | Change in Principal Payments |  | Total
($ in thousands) |  | Count |  | Amount |  | Count |  | Amount |  | Count |  | Amount
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 10 |  |  | $ | 17,020 |  |  | — |  |  | $ | — |  |  | 10 |  |  | $ | 17,020 |
SBA |  | 2 |  |  | $ | 869 |  |  | — |  |  | $ | — |  |  | 2 |  |  | $ | 869 |
Total |  | 12 |  |  | $ | 17,889 |  |  | — |  |  | $ | — |  |  | 12 |  |  | $ | 17,889 |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Total |  | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | — |  |  | $ | — |
|  | Six Months Ended
|  | Modification Type
|  | Change in Principal Payments and Interest Rates |  | Change in Principal Payments |  | Total
($ in thousands) |  | Count |  | Amount |  | Count |  | Amount |  | Count |  | Amount
June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 10 |  |  | $ | 17,020 |  |  | — |  |  | $ | — |  |  | 10 |  |  | $ | 17,020 |
SBA |  | 2 |  |  | $ | 869 |  |  | — |  |  | $ | — |  |  | 2 |  |  | $ | 869 |
Total |  | 12 |  |  | $ | 17,889 |  |  | — |  |  | $ | — |  |  | 12 |  |  | $ | 17,889 |
June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | — |  |  | $ | — |  |  | 2 |  |  | $ | 163 |  |  | 2 |  |  | $ | 163 |
Total |  | — |  |  | $ | — |  |  | 2 |  |  | $ | 163 |  |  | 2 |  |  | $ | 163 |
Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company performs historical loss analysis that is combined with a comprehensive loan or lease to value analysis to analyze the associated risks in the current loan and lease portfolio. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all loans delinquent over 60 days and non-homogeneous loans such as commercial and commercial real estate loans. The Company uses the following definitions for risk ratings: Pass: Loans classified as pass are in compliance in all respects with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weakness as defined under “Special Mention”, “Substandard” or “Doubtful”. Special Mention: Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or lease or of the Company’s credit position at some future date. Substandard: Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful: Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table presents the risk categories for total loans as of the dates indicated:
($ in thousands) |  | Pass |  | Special Mention |  | Substandard |  | Doubtful |  | Total
June 30, 2019 |  |  |  |  |  |  |  |  |  |
NTM loans: |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | $ | 729,845 |  |  | $ | 12,751 |  |  | $ | 2,423 |  |  | $ | — |  |  | $ | 745,019 |
Other consumer |  | 2,247 |  |  | — |  |  | — |  |  | — |  |  | 2,247 |
Total NTM loans |  | 732,092 |  |  | 12,751 |  |  | 2,423 |  |  | — |  |  | 747,266 |
Traditional loans: |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 1,844,472 |  |  | 50,702 |  |  | 56,533 |  |  | — |  |  | 1,951,707 |
Commercial real estate |  | 832,173 |  |  | 14,519 |  |  | 9,805 |  |  | — |  |  | 856,497 |
Multifamily |  | 1,581,629 |  |  | 11,488 |  |  | 5,861 |  |  | — |  |  | 1,598,978 |
SBA |  | 66,448 |  |  | 4,074 |  |  | 9,605 |  |  | 802 |  |  | 80,929 |
Construction |  | 194,842 |  |  | 9,172 |  |  | 5,015 |  |  | — |  |  | 209,029 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 1,193,532 |  |  | 6,017 |  |  | 15,980 |  |  | 517 |  |  | 1,216,046 |
Other consumer |  | 57,177 |  |  | 471 |  |  | 1,470 |  |  | — |  |  | 59,118 |
Total traditional loans |  | 5,770,273 |  |  | 96,443 |  |  | 104,269 |  |  | 1,319 |  |  | 5,972,304 |
Total |  | $ | 6,502,365 |  |  | $ | 109,194 |  |  | $ | 106,692 |  |  | $ | 1,319 |  |  | $ | 6,719,570 |
December 31, 2018 |  |  |  |  |  |  |  |  |  |
NTM loans: |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | $ | 811,056 |  |  | $ | 10,966 |  |  | $ | 2,296 |  |  | $ | — |  |  | $ | 824,318 |
Other consumer |  | 2,413 |  |  | — |  |  | — |  |  | — |  |  | 2,413 |
Total NTM loans |  | 813,469 |  |  | 10,966 |  |  | 2,296 |  |  | — |  |  | 826,731 |
Traditional loans: |  |  |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  | 1,859,569 |  |  | 41,302 |  |  | 43,271 |  |  | — |  |  | 1,944,142 |
Commercial real estate |  | 851,604 |  |  | 11,376 |  |  | 4,033 |  |  | — |  |  | 867,013 |
Multifamily |  | 2,239,301 |  |  | — |  |  | 1,945 |  |  | — |  |  | 2,241,246 |
SBA |  | 53,433 |  |  | 6,114 |  |  | 8,340 |  |  | 854 |  |  | 68,741 |
Construction |  | 197,851 |  |  | 3,606 |  |  | 2,519 |  |  | — |  |  | 203,976 |
Consumer: |  |  |  |  |  |  |  |  |  |
Single family residential mortgage |  | 1,461,721 |  |  | 2,602 |  |  | 16,849 |  |  | — |  |  | 1,481,172 |
Other consumer |  | 66,228 |  |  | 979 |  |  | 645 |  |  | — |  |  | 67,852 |
Total traditional loans |  | 6,729,707 |  |  | 65,979 |  |  | 77,602 |  |  | 854 |  |  | 6,874,142 |
Total |  | $ | 7,543,176 |  |  | $ | 76,945 |  |  | $ | 79,898 |  |  | $ | 854 |  |  | $ | 7,700,873 |
Purchases, Sales, and Transfers From time to time, the Company purchases and sells loans in the secondary market. Certain loans are transferred from held-for-investment to held-for-sale at the lower of cost or fair value and any reductions in value on transfer are reflected as write-downs to allowance for loan losses. The Company had no purchases of loans, excluding loans held-for-sale, for the three and six months ended June 30, 2019 and 2018. The following table presents loans transferred from (to) loans held-for-sale by portfolio segment for the periods indicated:
|  | Three Months Ended |  | Six Months Ended
($ in thousands) |  | Transfers from Held-For-Sale |  | Transfers (to) Held-For-Sale |  | Transfers from Held-For-Sale |  | Transfers (to) Held-For-Sale
June 30, 2019 |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
Commercial real estate |  | $ | — |  |  | $ | (573 | ) |  | $ | — |  |  | $ | (573 | )
Multifamily |  | — |  |  | (752,087 | ) |  | — |  |  | (752,087 | )
Consumer: |  |  |  |  |  |  |  |
Single family residential mortgage |  | $ | — |  |  | $ | (131,315 | ) |  | $ | — |  |  | $ | (374,679 | )
Total |  | $ | — |  |  | $ | (883,975 | ) |  | $ | — |  |  | $ | (1,127,339 | )
June 30, 2018 |  |  |  |  |  |  |  |
Commercial: |  |  |  |  |  |  |  |
Multifamily |  | $ | — |  |  | $ | (71,449 | ) |  | $ | — |  |  | $ | (71,449 | )
Consumer: |  |  |  |  |  |  |  |
Single family residential mortgage |  | — |  |  | (133,829 | ) |  | — |  |  | (136,013 | )
Other consumer |  | — |  |  | — |  |  | — |  |  | (4,362 | )
Total |  | $ | — |  |  | $ | (205,278 | ) |  | $ | — |  |  | $ | (211,824 | )
Included in transfers to loans held for sale is $573.9 million in multifamily loans from loans held-for-investment related to our pending Freddie Mac multifamily securitization which is expected to close during the third quarter of 2019. The loans included in the securitization have a weighted average coupon of 3.79% and a weighted average term to initial reset of 3.5 years. The related mortgage servicing rights will also be sold. In connection with the anticipated securitization, during the second quarter of 2019, the Company entered into interest rate swap agreements with a combined notional value of $543.4 million to offset variability in fair value of the related loans as a result of changes in market interest rates. During the three months ended June 30, 2019, the Company recognized a $9.6 million unrealized loss. The $9.6 million unrealized loss on these interest rate swaps was due to a decline in interest rates since their execution and is expected to be primarily offset by the anticipated gain in fair value of the loans sold into the securitization in the third quarter. Subsequent to June 30, 2019, this securitization was completed (refer to Note 20 — Subsequent Events for more information). During the three and six months ended June 30, 2019, the Company sold $131.5 million and $374.7 million, respectively, in single family residential loans, resulting in a gain of $125 thousand and $1.8 million, respectively. During the three and six months ended June 30, 2019, the Company sold $178.2 million and $178.2 million, respectively, in multifamily residential loans, resulting in a gain of $2.9 million and $2.9 million, respectively.

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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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