The following table presents the balances in our loan portfolio as of the dates indicated:



($ in thousands)	March 31, 2020			December 31, 2019
Commercial:
Commercial and industrial	$	1,578,223		$	1,691,270
Commercial real estate	810,024			818,817
Multifamily	1,466,083			1,494,528
SBA	70,583			70,981
Construction	227,947			231,350
Consumer:
Single family residential mortgage	1,467,375			1,590,774
Other consumer	47,229			54,165
Total loans⁽¹⁾	$	5,667,464		$	5,951,885
Allowance for loan losses	(78,243		)	(57,649		)
Loans receivable, net	$	5,589,221		$	5,894,236

We categorize 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. We perform a historical loss analysis that is combined with a comprehensive loan to value analysis to analyze the associated risks in the current loan portfolio. We analyze 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. We use the following definitions for risk ratings:

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 we will sustain some loss if the deficiencies are not corrected.



	Term Loans Amortized Cost Basis by Origination Year
($ in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Amortized Cost Basis Converted to Term		Total
March 31, 2020
Commercial:
Commercial and industrial
Pass	$	15,168	$	121,892	$	112,591	$	69,585	$	44,205	$	138,326	$	983,178	$	4,743	$	1,489,688
Special mention	—		6,473		1,341		—		—		—		12,776		2,284		22,874
Substandard	2,546		17,425		—		194		21,555		2,605		13,087		8,249		65,661
Doubtful	—		—		—		—		—		—		—		—		—
Commercial and industrial	17,714		145,790		113,932		69,779		65,760		140,931		1,009,041		15,276		1,578,223
Commercial real estate
Pass	15,189		152,789		229,702		73,134		102,913		218,978		8,011		1,588		802,304
Special mention	—		1,803		—		—		—		742		—		—		2,545
Substandard	—		—		—		—		—		5,175		—		—		5,175
Doubtful	—		—		—		—		—		—		—		—		—
Commercial real estate	15,189		154,592		229,702		73,134		102,913		224,895		8,011		1,588		810,024
Multifamily
Pass	49,455		440,695		338,904		276,075		151,406		197,596		—		—		1,454,131
Special mention	—		—		8,960		—		—		—		—		—		8,960
Substandard	—		—		—		—		—		2,992		—		—		2,992
Doubtful	—		—		—		—		—		—		—		—		—
Multifamily	49,455		440,695		347,864		276,075		151,406		200,588		—		—		1,466,083
SBA
Pass	1,787		16,067		1,388		5,300		15,105		19,797		1,667		515		61,626
Special mention	—		—		—		229		479		987		—		7		1,702
Substandard	—		—		—		1,060		1,529		1,515		336		1,197		5,637
Doubtful	—		—		390		—		208		633		—		387		1,618
SBA	1,787		16,067		1,778		6,589		17,321		22,932		2,003		2,106		70,583
Construction
Pass	12,948		39,120		76,619		87,270		—		—		—		—		215,957
Special mention	—		—		8,012		—		3,978		—		—		—		11,990
Substandard	—		—		—		—		—		—		—		—		—



Doubtful	—		—		—		—		—		—		—		—		—
Construction	12,948		39,120		84,631		87,270		3,978		—		—		—		227,947
Consumer:
Single family residential mortgage
Pass	5,431		177,908		371,674		221,287		328,033		304,408		21,157		—		1,429,898
Special mention	—		—		1,157		668		5,070		4,057		—		—		10,952
Substandard	—		1,074		498		3,420		3,253		17,763		—		—		26,008
Doubtful	—		—		—		—		517		—		—		—		517
Single family residential mortgage	5,431		178,982		373,329		225,375		336,873		326,228		21,157		—		1,467,375
Other consumer
Pass	55		95		86		—		14		5,332		37,992		2,941		46,515
Special mention	—		—		—		—		—		—		—		224		224
Substandard	—		—		35		—		—		34		322		99		490
Doubtful	—		—		—		—		—		—		—		—		—
Other consumer	55		95		121		—		14		5,366		38,314		3,264		47,229
Total loans	$	102,579	$	975,341	$	1,151,357	$	738,222	$	678,265	$	920,940	$	1,078,526	$	22,234	$	5,667,464



($ in thousands)	Pass		Special Mention		Substandard		Doubtful		Total
December 31, 2019
Commercial:
Commercial and industrial	1,580,269		45,323		65,678		—		1,691,270
Commercial real estate	813,846		2,532		2,439		—		818,817
Multifamily	1,484,931		4,256		5,341		—		1,494,528
SBA	60,982		2,760		5,621		1,618		70,981
Construction	229,771		1,579		—		—		231,350
Consumer:
Single family residential mortgage	1,559,253		10,735		20,269		517		1,590,774
Other consumer	53,331		346		488		—		54,165
Total	$	5,782,383	$	67,531	$	99,836	$	2,135	$	5,951,885



($ in thousands)	30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 89 Days Past due		Total Past Due		Current		Total
March 31, 2020
Non-Traditional Mortgage (NTM) loans:
Single family residential mortgage	$	8,043	$	5,383	$	14,577	$	28,003	$	530,161	$	558,164
Other consumer	—		—		—		—		1,894		1,894
Total NTM loans	8,043		5,383		14,577		28,003		532,055		560,058
Traditional loans:
Commercial:
Commercial and industrial	649		3,687		2,601		6,937		1,571,286		1,578,223
Commercial real estate	—		264		—		264		809,760		810,024
Multifamily	—		—		—		—		1,466,083		1,466,083
SBA	2,009		222		2,643		4,874		65,709		70,583
Construction	734		—		—		734		227,213		227,947
Consumer:
Single family residential mortgage	32,993		1,600		8,771		43,364		865,847		909,211
Other consumer	754		—		40		794		44,541		45,335
Total traditional loans	37,139		5,773		14,055		56,967		5,050,439		5,107,406
Total	$	45,182	$	11,156	$	28,632	$	84,970	$	5,582,494	$	5,667,464

December 31, 2019
NTM loans:
Single family residential mortgage	$	3,973	$	3,535	$	13,019	$	20,527	$	577,830	$	598,357
Other consumer	—		—		—		—		2,299		2,299
Total NTM loans	3,973		3,535		13,019		20,527		580,129		600,656
Traditional loans:
Commercial:
Commercial and industrial	780		5,670		3,862		10,312		1,680,958		1,691,270
Commercial real estate	—		—		—		—		818,817		818,817
Multifamily	—		—		—		—		1,494,528		1,494,528
SBA	586		842		2,152		3,580		67,401		70,981
Construction	—		—		—		—		231,350		231,350
Consumer:
Single family residential mortgage	13,752		3,496		5,606		22,854		969,563		992,417
Other consumer	199		40		95		334		51,532		51,866
Total traditional loans	15,317		10,048		11,715		37,080		5,314,149		5,351,229
Total	$	19,290	$	13,583	$	24,734	$	57,607	$	5,894,278	$	5,951,885

The following table presents non-accrual loans as of the dates indicated:



	March 31, 2020								December 31, 2019
($ in thousands)	NTM Loans		Traditional Loans		Total Non-accrual Loans		Non-accrual Loans with no ACL		NTM Loans		Traditional Loans		Total Non-accrual Loans		Non-accrual Loans with no ACL
Non-accrual loans
Commercial:
Commercial and industrial	$	—	$	23,638	$	23,638	$	5,364	$	—	$	19,114	$	19,114	$	337
Commercial real estate	—		2,763		2,763		2,763		—		—		—		—
SBA	—		5,374		5,374		1,508		—		5,230		5,230		1,474
Construction	—		—		—		—		—		—		—		—
Consumer:
Single family residential mortgage	15,605		8,771		24,376		24,376		13,019		5,606		18,625		14,373
Other consumer	—		320		320		320		—		385		385		380
Total non-accrual loans	$	15,605	$	40,866	$	56,471	$	34,331	$	13,019	$	30,335	$	43,354	$	16,564

Our ACL is comprised of our allowance for loan losses (ALL) and reserve for unfunded loan commitments. Our ACL and resulting provision was significantly impacted by the current economic uncertainty and volatility caused by the COVID-19 pandemic. Our ACL methodology uses a nationally-recognized, third party model that includes many assumptions based on our historical and peer loss data, our current loan portfolio risk profile, and economic forecasts. Loan-level data and credit-risk attributes are incorporated into the model and adjusted based on a peer-multiplier and economic forecasts. The forecasts are based on critical macroeconomic variables with relevant ranges of one to three years which then revert to long-term trends over the life of the loan. We utilized economic forecasts published by our model provider to determine the ACL on January 1, 2020. Subsequent to adoption, we used economic forecasts released by our model provider during the last week of March which included the onset of the pandemic. These latter forecasts included a sharp contraction in annualized GDP growth and a sharp spike in near-term unemployment rates ranging from 8% to 13%, before returning to moderate long-term economic trends. Our visibility at the end of the quarter indicated that local unemployment was heading higher and that the economic recovery would likely be slower. Accordingly, we incorporated qualitative factors to account for this visibility at quarter end related to actual conditions and an economic outlook that was worse than the late March forecasts incorporated into the CECL model. As a result of the COVID-19 pandemic and adoption of CECL, we expect our allowance for credit losses to continue to be impacted in future periods by economic volatility, changing economic forecasts, as well as the related impacts to CECL model assumptions, all of which may be better than or worse than our current estimate.

We have 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 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 on non-accrual status, assessing the need for additional allowance for loan loss, and partial or full charge off the principal balance. We maintain the allowance for loan losses at a level that is considered adequate to cover the expected credit losses in the loan portfolio.

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, management has adopted a credit policy that includes a credit review and control system that it believes should be effective in ensuring that we maintain an adequate allowance for credit losses. In addition, the Board of Directors provides oversight and guidance for management’s allowance evaluation process.

The following table presents a summary of activity in the ACL for the periods indicated:



	Three Months Ended March 31,
($ in thousands)	2020									2019
	Allowance for Loan Losses			Reserve for Unfunded Loan Commitments			Allowance for Credit Losses			Allowance for Loan Losses			Reserve for Unfunded Loan Commitments			Allowance for Credit Losses
Balance at beginning of period	$	57,649		$	4,064		$	61,713		$	62,192		$	4,622		$	66,814
Impact of adopting ASU 2016-13	7,609			(1,226		)	6,383			—			—			—
Loans charged off	(2,076		)	—			(2,076		)	(1,063		)	—			(1,063		)
Recoveries of loans previously charged off	350			—			350			244			—			244
Net charge-offs	(1,726		)	—			(1,726		)	(819		)	—			(819		)
Provision for (reversal of) credit losses	14,711			1,050			15,761			2,512			(414		)	2,098
Balance at end of period	$	78,243		$	3,888		$	82,131		$	63,885		$	4,208		$	68,093

The following table presents the activity and balance in the ALL and the recorded investment, excluding accrued interest, in loans based on the impairment methodology as of or for the three months ended March 31, 2020:



($ in thousands)	Commercial and Industrial			Commercial Real Estate		Multifamily		SBA			Construction		Single Family Residential Mortgage			Other Consumer			Total
ALL:
Balance at December 31, 2019	$	22,353		$	5,941	$	11,405	$	3,120		$	3,906	$	10,486		$	438		$	57,649
Impact of adopting ASC 326	662			4,847		1,809		388			103		(420		)	220			7,609
Charge-offs	(1,164		)	—		—		(356		)	—		(552		)	(4		)	(2,076		)
Recoveries	30			—		—		121			—		151			48			350
Net (charge-offs) recoveries	(1,134		)	—		—		(235		)	—		(401		)	44			(1,726		)
Provision for (reversal of) credit losses	1,692			2,832		6,858		379			3,043		(72		)	(21		)	14,711
Balance at March 31, 2020	$	23,573		$	13,620	$	20,072	$	3,652		$	7,052	$	9,593		$	681		$	78,243

Individually evaluated for impairment	$	3,606		$	—	$	—	$	2,208		$	—	$	—		$	—		$	5,814
Collectively evaluated for impairment	19,967			13,620		20,072		1,444			7,052		9,593			681			72,429
Total ending ALL balance	$	23,573		$	13,620	$	20,072	$	3,652		$	7,052	$	9,593		$	681		$	78,243
Loans:
Individually evaluated for impairment	$	24,594		$	2,763	$	—	$	5,292		$	—	$	29,183		$	614		$	62,446
Collectively evaluated for impairment	1,553,629			807,261		1,466,083		65,291			227,947		1,438,192			46,615			5,605,018
Total ending loan balances	$	1,578,223		$	810,024	$	1,466,083	$	70,583		$	227,947	$	1,467,375		$	47,229		$	5,667,464



($ in thousands)	Commercial and Industrial			Commercial Real Estate		Multifamily		SBA			Construction			Lease Financing			Single Family Residential Mortgage			Other Consumer			Total
ALL:
Balance at December 31, 2018	$	18,191		$	6,674	$	17,970	$	1,827		$	3,461		$	—		$	13,128		$	941		$	62,192
Charge-offs	(93		)	—		—		(356		)	—			—			(526		)	(88		)	(1,063		)
Recoveries	33			—		—		41			—			3			150			17			244
Net (charge-offs) recoveries	(60		)	—		—		(315		)	—			3			(376		)	(71		)	(819		)
Provision for (reversal of) credit losses	762			164		928		1,545			(8		)	(3		)	(610		)	(266		)	2,512
Balance at March 31, 2019	$	18,893		$	6,838	$	18,898	$	3,057		$	3,453		$	—		$	12,142		$	604		$	63,885

Individually evaluated for impairment	$	48		$	—	$	—	$	1,634		$	—		$	—		$	230		$	33		$	1,945
Collectively evaluated for impairment	18,845			6,838		18,898		1,423			3,453			—			11,912			571			61,940
Total ending ALL balance	$	18,893		$	6,838	$	18,898	$	3,057		$	3,453		$	—		$	12,142		$	604		$	63,885
Loans:
Individually evaluated for impairment	$	4,861		$	573	$	—	$	3,808		$	2,519		$	—		$	20,362		$	841		$	32,964
Collectively evaluated for impairment	1,902,241			864,948		2,332,527		71,190			209,030			—			2,082,332			61,968			7,524,236
Total ending loan balances	$	1,907,102		$	865,521	$	2,332,527	$	74,998		$	211,549		$	—		$	2,102,694		$	62,809		$	7,557,200

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.



	March 31, 2020						December 31, 2019
($ in thousands)	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses		Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses
With no related ALL recorded:
Commercial:
Commercial and industrial	$	6,332	$	6,319	$	—	$	1,471	$	1,460	$	—
Commercial real estate	2,968		2,763		—		—		—		—
SBA	1,489		1,426		—		1,439		1,379		—
Consumer:
Single family residential mortgage	29,024		29,183		—		19,319		19,405		—
Other consumer	611		614		—		671		675		—
With an ALL recorded:
Commercial:
Commercial and industrial	18,268		18,275		3,606		18,776		18,776		3,367
SBA	4,050		3,866		2,208		3,921		3,757		2,045
Consumer:
Single family residential mortgage	—		—		—		4,213		4,252		574
Other consumer	—		—		—		4		4		4
Total	$	62,742	$	62,446	$	5,814	$	49,814	$	49,708	$	5,990

The following table presents information on impaired loans, disaggregated by class, for the periods indicated:



	Three Months Ended
($ in thousands)	Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
March 31, 2020
Commercial:
Commercial and industrial	$	22,912	$	21	$	21
Commercial real estate	2,774		—		—
SBA	5,414		3		3
Consumer:
Single family residential mortgage	29,483		54		45
Other consumer	617		3		3
Total	$	61,200	$	81	$	72

March 31, 2019
Commercial:
Commercial and industrial	$	5,048	$	—	$	—
Commercial real estate	577		—		—
SBA	3,845		4		4
Construction	2,519		—		—
Consumer:
Single family residential mortgage	19,323		58		49
Other consumer	844		3		3
Total	$	32,156	$	65	$	56

A modification of a loan constitutes a TDR when we, for economic or legal reasons related to a borrower’s financial difficulties, grant a concession to the borrower that we would not otherwise consider. A concession or concessions may be granted in various forms, including a below-market change in the stated interest rate, a reduction in the loan balance or accrued interest, an extension of the maturity date, or a note split with principal forgiveness. 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 our internal underwriting policy.

TDR loans consisted of the following as of the dates indicated:



	March 31, 2020						December 31, 2019
($ in thousands)	NTM Loans		Traditional Loans		Total		NTM Loans		Traditional Loans		Total
Commercial:
Commercial and industrial	$	—	$	21,586	$	21,586	$	—	$	16,245	$	16,245
SBA	—		266		266		—		266		266
Consumer:
Single family residential mortgage	2,630		2,176		4,806		2,638		2,394		5,032
Other consumer	294		—		294		294		—		294
Total	$	2,924	$	24,028	$	26,952	$	2,932	$	18,905	$	21,837

We had commitments to lend to customers with outstanding loans that were classified as TDRs of $135 thousand and $135 thousand as of March 31, 2020 and December 31, 2019, respectively. Accruing TDRs were $6.1 million and non-accrual TDRs were $20.9 million at March 31, 2020 compared to accruing TDRs of $6.6 million and non-accrual TDRs of $15.2 million at December 31, 2019. The increase in TDRs during the three months ended March 31, 2020 was primarily due to one commercial and industrial relationship.

The following table summarizes the pre-modification and post-modification balances of the new TDRs for the periods indicated:



	Three Months Ended
($ in thousands)	Number of Loans	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment
March 31, 2020
Commercial:
Commercial and industrial	1	$	5,000	$	5,000
Total	1	5,000		5,000
March 31, 2019
Total	—	$	—	$	—

From time to time, we purchase and sell 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 credit losses. We had no purchases of loans for the three months ended March 31, 2020 and 2019. The following table presents loans transferred from (to) loans held-for-sale by portfolio segment for the periods indicated:

Our NTM portfolio is comprised of three interest only products: Green Loans, Interest Only loans and a small number of additional loans with the potential for negative amortization. The initial credit guidelines for the NTM portfolio were established based on the borrower's Fair Isaac Corporation (FICO) score, LTV ratio, property type, occupancy type, loan amount, and geography. Additionally, from an ongoing credit risk management perspective, we have determined that the most significant performance indicators for NTMs are LTV ratios and FICO scores. We review the NTM loan portfolio periodically, which includes refreshing FICO scores on the Green Loans and HELOCs and ordering third party automated valuation models (AVMs) to confirm collateral values. We no longer originate NTM loans.

The following table presents the composition of the NTM portfolio, which are included in the single family residential mortgage portfolio, as of the dates indicated:



	March 31, 2020						December 31, 2019
($ in thousands)	Count	Amount			Percent		Count	Amount			Percent
Consumer:
Single family residential mortgage:
Green Loans (HELOC) - first liens	65	$	45,913		8.2	%	69	$	49,959		8.3	%
Interest-only - first liens	349	509,892			91.0	%	376	545,371			90.8	%
Negative amortization	8	2,359			0.4	%	9	3,027			0.5	%
Total NTM - first liens	422	558,164			99.7	%	454	598,357			99.6	%
Other consumer:
Green Loans (HELOC) - second liens	6	1,894			0.3	%	7	2,299			0.4	%
Total NTM - second liens	6	1,894			0.3	%	7	2,299			0.4	%
Total NTM loans	428	$	560,058		100.0	%	461	$	600,656		100.0	%
Total loans receivable		$	5,667,464					$	5,951,885
% of total NTM loans to total loans receivable		9.9		%				10.1		%