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Loans and Leases Receivable and Allowance for Loan and Lease Losses (Tables)

3 Months Ended

Mar. 31, 2019

The following table presents loans and leases receivable as of March 31, 2019 and December 31, 2018.



(amounts in thousands)	March 31, 2019			December 31, 2018
Loans receivable, mortgage warehouse, at fair value	$	1,480,195		$	1,405,420
Loans receivable:
Commercial:
Multi-family	3,212,312			3,285,297
Commercial and industrial (including owner occupied commercial real estate) ⁽¹⁾	2,038,229			1,951,277
Commercial real estate non-owner occupied	1,107,336			1,125,106
Construction	53,372			56,491
Total commercial loans and leases receivable	6,411,249			6,418,171
Consumer:
Residential real estate	625,066			566,561
Manufactured housing	77,778			79,731
Other	153,153			74,035
Total consumer loans receivable	855,997			720,327
Loans and leases receivable	7,267,246			7,138,498
Deferred (fees) costs and unamortized (discounts) premiums, net	(3,197		)	(424		)
Allowance for loan and lease losses	(43,679		)	(39,972		)
Total loans and leases receivable, net of allowance for loan and lease losses	$	8,700,565		$	8,503,522

(1)

Includes direct finance equipment leases of $56.4 million and $54.5 million at March 31, 2019 and December 31, 2018, respectively.

Loans and Leases Receivable by Loan Type and Performance Status

The following tables summarize loans receivable by loan type and performance status as of March 31, 2019 and December 31, 2018:



	March 31, 2019
(amounts in thousands)	30-89 Days Past Due ⁽¹⁾		90 Days or More Past Due ⁽¹⁾		Total Past Due ⁽¹⁾		Non-Accrual		Current ⁽²⁾		Purchased-Credit-Impaired Loans ⁽³⁾		Total Loans and Leases ⁽⁴⁾
Multi-family	$	3,794	$	—	$	3,794	$	1,997	$	3,204,879	$	1,642	$	3,212,312
Commercial and industrial	1,271		—		1,271		12,225		1,441,679		417		1,455,592
Commercial real estate owner occupied	3,566		—		3,566		839		570,380		7,852		582,637
Commercial real estate non-owner occupied	1,976		—		1,976		102		1,101,129		4,129		1,107,336
Construction	—		—		—		—		53,372		—		53,372
Residential real estate	5,612		—		5,612		5,574		609,874		4,006		625,066
Manufactured housing ⁽⁵⁾	3,686		1,936		5,622		1,924		68,362		1,870		77,778
Other consumer	491		—		491		108		152,348		206		153,153
Total	$	20,396	$	1,936	$	22,332	$	22,769	$	7,202,023	$	20,122	$	7,267,246

	December 31, 2018
(amounts in thousands)	30-89 Days Past Due ⁽¹⁾		90 Days or More Past Due ⁽¹⁾		Total Past Due ⁽¹⁾		Non-Accrual		Current ⁽²⁾		Purchased-Credit-Impaired Loans ⁽³⁾		Total Loans and Leases ⁽⁴⁾
Multi-family	$	—	$	—	$	—	$	1,155	$	3,282,452	$	1,690	$	3,285,297
Commercial and industrial	1,914		—		1,914		17,764		1,353,586		536		1,373,800
Commercial real estate owner occupied	193		—		193		1,037		567,809		8,438		577,477
Commercial real estate non-owner occupied	1,190		—		1,190		129		1,119,443		4,344		1,125,106
Construction	—		—		—		—		56,491		—		56,491
Residential real estate	5,940		—		5,940		5,605		550,679		4,337		566,561
Manufactured housing ⁽⁵⁾	3,926		2,188		6,114		1,693		69,916		2,008		79,731
Other consumer	200		—		200		111		73,503		221		74,035
Total	$	13,363	$	2,188	$	15,551	$	27,494	$	7,073,879	$	21,574	$	7,138,498


(1)	Includes past due loans and leases that are accruing interest because collection is considered probable.


(2)	Loans and leases where next payment due is less than 30 days from the report date.

(3)

Purchased-credit-impaired loans aggregated into a pool are accounted for as a single asset with a single composite interest rate and an aggregate expectation of cash flows, and the past due status of the pools, or that of the individual loans within the pools, is not meaningful. Due to the credit impaired nature of the loans, the loans are recorded at a discount reflecting estimated future cash flows and the Bank recognizes interest income on each pool of loans reflecting the estimated yield and passage of time. Such loans are considered to be performing. Purchased-credit-impaired loans that are not in pools accrete interest when the timing and amount of their expected cash flows are reasonably estimable, and are reported as performing loans.


(4)	Amounts exclude deferred costs and fees, unamortized premiums and discounts, and the ALLL.

(5)

Manufactured housing loans purchased in 2010 are supported by cash reserves held at the Bank that are used to fund past-due payments when the loan becomes 90 days or more delinquent.

Schedule of Allowance for Loan Losses

The changes in the ALLL for the three months ended March 31, 2019 and 2018, and the loans and ALLL by loan type based on impairment-evaluation method as of March 31, 2019 and December 31, 2018 are presented in the tables below.



Three Months Ended March 31, 2019	Multi-family			Commercial and Industrial		Commercial Real Estate Owner Occupied			Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, December 31, 2018	$	11,462		$	12,145	$	3,320		$	6,093		$	624		$	3,654		$	145		$	2,529		$	39,972
Charge-offs	(541		)	—		(8		)	—			—			(40		)	—			(755		)	(1,344		)
Recoveries	—			119		128			—			6			7			—			24			284
Provision for loan and lease losses	(291		)	383		(15		)	(78		)	(46		)	2,951			(28		)	1,891			4,767
Ending Balance, March 31, 2019	$	10,630		$	12,647	$	3,425		$	6,015		$	584		$	6,572		$	117		$	3,689		$	43,679

As of March 31, 2019
Loans and leases receivable:
Individually evaluated for impairment	$	1,997		$	17,411	$	867		$	102		$	—		$	8,567		$	10,307		$	108		$	39,359
Collectively evaluated for impairment	3,208,673			1,437,764		573,918			1,103,105			53,372			612,493			65,601			152,839			7,207,765
Loans acquired with credit deterioration	1,642			417		7,852			4,129			—			4,006			1,870			206			20,122
Total loans and leases receivable	$	3,212,312		$	1,455,592	$	582,637		$	1,107,336		$	53,372		$	625,066		$	77,778		$	153,153		$	7,267,246
Allowance for loan and lease losses:
Individually evaluated for impairment	$	—		$	263	$	36		$	—		$	—		$	78		$	3		$	—		$	380
Collectively evaluated for impairment	10,630			12,116		3,389			4,019			584			6,105			89			3,537			40,469
Loans acquired with credit deterioration	—			268		—			1,996			—			389			25			152			2,830
Total allowance for loan and lease losses	$	10,630		$	12,647	$	3,425		$	6,015		$	584		$	6,572		$	117		$	3,689		$	43,679



Three Months Ended March 31, 2018	Multi-family		Commercial and Industrial			Commercial Real Estate Owner Occupied			Commercial Real Estate Non-Owner Occupied			Construction			Residential Real Estate			Manufactured Housing			Other Consumer			Total
(amounts in thousands)
Ending Balance, December 31, 2017	$	12,168	$	10,918		$	3,232		$	7,437		$	979		$	2,929		$	180		$	172		$	38,015
Charge-offs	—		(50		)	(18		)	—			—			(365		)	—			(256		)	(689		)
Recoveries	—		35			—			—			11			7			—			3			56
Provision for loan and lease losses	377		834			311			(204		)	(69		)	608			(4		)	264			2,117
Ending Balance, March 31, 2018	$	12,545	$	11,737		$	3,525		$	7,233		$	921		$	3,179		$	176		$	183		$	39,499
As of December 31, 2018
Loans and leases receivable:
Individually evaluated for impairment	$	1,155	$	17,828		$	1,069		$	129		$	—		$	8,631		$	10,195		$	111		$	39,118
Collectively evaluated for impairment	3,282,452		1,355,436			567,970			1,120,633			56,491			553,593			67,528			73,703			7,077,806
Loans acquired with credit deterioration	1,690		536			8,438			4,344			—			4,337			2,008			221			21,574
Total loans and leases receivable	$	3,285,297	$	1,373,800		$	577,477		$	1,125,106		$	56,491		$	566,561		$	79,731		$	74,035		$	7,138,498
Allowance for loan and lease losses:
Individually evaluated for impairment	$	539	$	261		$	1		$	—		$	—		$	41		$	3		$	—		$	845
Collectively evaluated for impairment	10,923		11,516			3,319			4,161			624			3,227			89			2,390			36,249
Loans acquired with credit deterioration	—		368			—			1,932			—			386			53			139			2,878
Total allowance for loan and lease losses	$	11,462	$	12,145		$	3,320		$	6,093		$	624		$	3,654		$	145		$	2,529		$	39,972

Summary of Recorded Investment Net Charge-Offs, Unpaid Principal Balance and Related Allowance for Impaired Loans

The following tables present the recorded investment (net of charge-offs), unpaid principal balance, and related allowance by loan type for impaired loans that were individually evaluated for impairment as of March 31, 2019 and December 31, 2018 and the average recorded investment and interest income recognized for the three months ended March 31, 2019 and 2018. Customers did not have any impaired lease receivables as of March 31, 2019 and December 31, 2018, respectively. Purchased-credit-impaired loans are considered to be performing and are not included in the tables below.



	March 31, 2019						Three Months Ended March 31, 2019
(amounts in thousands)	Recorded Investment Net of Charge-Offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Multi-family	$	1,997	$	2,538	$	—	$	998	$	—
Commercial and industrial	11,185		12,749		—		12,422		2
Commercial real estate owner occupied	556		1,103		—		796		21
Commercial real estate non-owner occupied	102		214		—		115		—
Residential real estate	4,722		5,044		—		4,782		—
Manufactured housing	10,140		10,140		—		10,084		115
Other consumer	108		108		—		110		—
With an allowance recorded:
Multi-family	—		—		—		578		—
Commercial and industrial	6,226		6,409		263		5,197		39
Commercial real estate owner occupied	311		498		36		172		1
Residential real estate	3,845		3,845		78		3,817		26
Manufactured housing	167		167		3		168		2
Total	$	39,359	$	42,815	$	380	$	39,239	$	206



	December 31, 2018						Three Months Ended March 31, 2018
(amounts in thousands)	Recorded Investment Net of Charge-Offs		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial and industrial	$	13,660	$	15,263	$	—	$	7,484	$	—
Commercial real estate owner occupied	1,037		1,766		—		710		—
Commercial real estate non-owner occupied	129		241		—		201		—
Residential real estate	4,842		5,128		—		3,623		—
Manufactured housing	10,027		10,027		—		9,876		131
Other consumer	111		111		—		63		—
With an allowance recorded:
Multi-family	1,155		1,155		539		—		—
Commercial and industrial	4,168		4,351		261		8,390		1
Commercial real estate owner occupied	32		32		1		756		1
Residential real estate	3,789		3,789		41		5,122		25
Manufactured housing	168		168		3		223		—
Total	$	39,118	$	42,031	$	845	$	36,448	$	158

Summary of Loans Modified in Troubled Debt Restructurings and Related Recorded Investment

The following table presents total TDRs based on loan type and accrual status at March 31, 2019 and December 31, 2018. Nonaccrual TDRs are included in the reported amount of total non-accrual loans.



	March 31, 2019						December 31, 2018
(amounts in thousands)	Accruing TDRs		Nonaccrual TDRs		Total		Accruing TDRs		Nonaccrual TDRs		Total
Commercial and industrial	$	5,186	$	471	$	5,657	$	64	$	5,273	$	5,337
Commercial real estate owner occupied	28		—		28		32		—		32
Residential real estate	2,993		723		3,716		3,026		667		3,693
Manufactured housing	8,383		1,850		10,233		8,502		1,620		10,122
Other consumer	—		11		11		—		12		12
Total TDRs	$	16,590	$	3,055	$	19,645	$	11,624	$	7,572	$	19,196

The following table presents, by loan type, the number of loans modified in TDRs and the related recorded investment, for which there was a payment default within twelve months following the modification:



	March 31, 2019				March 31, 2018
(dollars in thousands)	Number of Loans		Recorded Investment		Number of Loans	Recorded Investment
Manufactured housing	5		$	137	1	$	29
Commercial and industrial	1		431		—	—
Total loans	$	6	$	568	1	$	29

The following table provides, by loan type, the number of loans modified in TDRs and the related recorded investment for the three months ended March 31, 2019 and 2018.



	Three Months Ended March 31, 2019			Three Months Ended March 31, 2018
(dollars in thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Commercial and industrial	1	$	431	—	$	—
Manufactured housing	10	385		9	322
Residential real estate	1	83		—	—
Total loans	12	$	899	9	$	322

Analysis of Loans Modified in Troubled Debt Restructuring by Type of Concession

The following table presents loans modified in a TDR by type of concession for the three months ended March 31, 2019 and 2018. There were no modifications that involved forgiveness of debt for the three months ended March 31, 2019 and 2018.



	Three Months Ended March 31, 2019			Three Months Ended March 31, 2018
(dollars in thousands)	Number of Loans	Recorded Investment		Number of Loans	Recorded Investment
Extensions of maturity	2	$	514	—	$	—
Interest-rate reductions	10	385		9	322
Total	12	$	899	9	$	322

Changes in Accretable Yield Related to Purchased-credit-impaired Loans

The changes in accretable yield related to PCI loans for the three months ended March 31, 2019 and 2018 were as follows:



	Three Months Ended March 31,
(amounts in thousands)	2019			2018
Accretable yield balance, beginning of period	$	6,178		$	7,825
Accretion to interest income	(277		)	(338		)
Reclassification from nonaccretable difference and disposals, net	293			176
Accretable yield balance, end of period	$	6,194		$	7,663

Credit Ratings of Covered and Non-Covered Loan Portfolio

The following tables present the credit ratings of loans and leases receivable as of March 31, 2019 and December 31, 2018.



	March 31, 2019
(amounts in thousands)	Multi-family		Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied		Construction		Residential Real Estate		Manufactured Housing		Other Consumer		Total ⁽³⁾
Pass/Satisfactory	$	3,164,722	$	1,395,034	$	565,631	$	1,036,957	$	53,372	$	—	$	—	$	—	$	6,215,716
Special Mention	40,441		30,575		12,300		30,258		—		—		—		—		113,574
Substandard	7,149		29,983		4,706		40,121		—		—		—		—		81,959
Performing ⁽¹⁾	—		—		—		—		—		613,880		70,232		152,554		836,666
Non-performing ⁽²⁾	—		—		—		—		—		11,186		7,546		599		19,331
Total	$	3,212,312	$	1,455,592	$	582,637	$	1,107,336	$	53,372	$	625,066	$	77,778	$	153,153	$	7,267,246



	December 31, 2018
(amounts in thousands)	Multi-family		Commercial and Industrial		Commercial Real Estate Owner Occupied		Commercial Real Estate Non-Owner Occupied		Construction		Residential Real Estate		Manufactured Housing		Other Consumer		Total ⁽³⁾
Pass/Satisfactory	$	3,201,822	$	1,306,466	$	562,639	$	1,054,493	$	56,491	$	—	$	—	$	—	$	6,181,911
Special Mention	55,696		30,551		9,730		30,203		—		—		—		—		126,180
Substandard	27,779		36,783		5,108		40,410		—		—		—		—		110,080
Performing ⁽¹⁾	—		—		—		—		—		555,016		71,924		73,724		700,664
Non-performing ⁽²⁾	—		—		—		—		—		11,545		7,807		311		19,663
Total	$	3,285,297	$	1,373,800	$	577,477	$	1,125,106	$	56,491	$	566,561	$	79,731	$	74,035	$	7,138,498


(1)	Includes residential real estate, manufactured housing, and other consumer loans not subject to risk ratings.


(2)	Includes residential real estate, manufactured housing, and other consumer loans that are past due and still accruing interest or on nonaccrual status.

(3)

Excludes commercial mortgage warehouse loans reported at fair value.

Schedule of Loan Purchases and Sales

Purchases and sales of loans were as follows for the three months ended March 31, 2019 and 2018:



	Three Months Ended March 31,
(amounts in thousands)	2019		2018
Purchases ⁽¹⁾
Residential real estate	$	66,384	$	—
Other consumer	66,136		—
Total	$	132,520	$	—
Sales ⁽²⁾
Commercial and industrial ⁽³⁾	—		(6,842		)
Commercial real estate owner occupied ⁽³⁾	—		(8,151		)
Total	$	—	$	(14,993	)


(1)	The purchase price was 97.6% of loans outstanding for the three months ended March 31, 2019. There were no loan purchases during the three months ended March 31, 2018.


(2)	There were no loan sales for the three months ended March 31, 2019. For the three months ended March 31, 2018, loan sales resulted in a net gain of $1.4 million.

(3)

Primarily sales of SBA loans.