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Loans and Leases Receivable and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2020

The following table presents loans and leases receivable as of March 31, 2020 and December 31, 2019.


(amounts in thousands)	March 31, 2020		December 31, 2019
Loans and leases receivable, mortgage warehouse, at fair value	$	2,518,012	$	2,245,758
Loans receivable:
Commercial:
Multi-family	1,621,633		1,907,331
Commercial and industrial ⁽¹⁾	2,072,952		1,891,152
Commercial real estate owner occupied	543,945		551,948
Commercial real estate non-owner occupied	1,252,826		1,222,772
Construction	115,448		117,617
Total commercial loans and leases receivable	5,606,804		5,690,820
Consumer:
Residential real estate	362,047		382,634
Manufactured housing	69,240		71,359
Other consumer	1,315,171		1,174,175
Total consumer loans receivable	1,746,458		1,628,168
Loans and leases receivable ⁽²⁾	7,353,262		7,318,988

Allowance for credit losses	(149,283)		(56,379)
Total loans and leases receivable, net of allowance for credit losses	$	9,721,991	$	9,508,367

(1)Includes direct finance equipment leases of $96.6 million and $89.2 million at March 31, 2020 and December 31, 2019, respectively.

(2)Includes deferred (fees) costs and unamortized (discounts) premiums, net of $3.2 million and $2.1 million at March 31, 2020 and December 31, 2019, respectively.

Loans and Leases Receivable by Loan Type and Performance Status

The following tables summarize loans and leases receivable by loan and lease type and performance status as of March 31, 2020 and December 31, 2019:


	March 31, 2020
(amounts in thousands)	30-59 Days past due		60-89 Days past due		90 Days or more past due		Total past due		Loans and leases not past due ⁽²⁾		Total loans and leases⁽³⁾
Multi-family	$	2,378	$	—	$	4,021	$	6,399	$	1,615,234	$	1,621,633
Commercial and industrial	1,332		659		10,182		12,173		2,060,779		2,072,952
Commercial real estate owner occupied	4,391		971		2,740		8,102		535,843		543,945
Commercial real estate non-owner occupied	30,723		—		21,470		52,193		1,200,633		1,252,826
Construction	—		—		—		—		115,448		115,448
Residential real estate	5,253		68		6,248		11,569		350,478		362,047
Manufactured housing ⁽⁵⁾	2,138		962		5,089		8,189		61,051		69,240
Other consumer	6,502		3,725		2,527		12,754		1,302,417		1,315,171
Total	$	52,717	$	6,385	$	52,277	$	111,379	$	7,241,883	$	7,353,262


	December 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 ⁽⁴⁾		Total loans and leases ⁽⁵⁾
Multi-family	$	2,133	—		$	2,133	$	4,117	$	1,901,336	$	1,688	$	1,909,274
Commercial and industrial	2,395		—		2,395		4,531		1,882,700		354		1,889,980
Commercial real estate owner occupied	5,388		—		5,388		1,963		537,992		6,664		552,007
Commercial real estate non-owner occupied	8,034		—		8,034		76		1,211,892		3,527		1,223,529
Construction	—		—		—		—		118,418		—		118,418
Residential real estate	5,924		—		5,924		6,128		359,491		3,471		375,014
Manufactured housing	3,699		1,794		5,493		1,655		61,649		1,601		70,398
Other consumer	5,756		$	—	5,756		1,551		1,170,793		183		1,178,283
Total	$	33,329	$	1,794	$	35,123	$	20,021	$	7,244,271	$	17,488	$	7,316,903

(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)Includes purchased credit deteriorated loans of $16.6 million at March 31, 2020.

(4)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.

(5)Amounts exclude deferred costs and fees and unamortized premiums and discounts.

Amortized cost of Loans and Leases on Nonaccrual Status

The following table provides amortized cost of loans and leases on nonaccrual status.


	March 31, 2020 ⁽¹⁾										December 31, 2020 ⁽²⁾
(amounts in thousands)	Nonaccrual loans with no related allowance		Nonaccrual loans with related allowance		Total nonaccrual loans		Nonaccrual loans with no related allowance		Nonaccrual loans with related allowance		Total nonaccrual loans
Multi-family	$	4,020	$	—	$	4,020	$	4,117	$	—	$	4,117
Commercial and industrial	8,967		1,026		9,993		3,083		1,448		4,531
Commercial real estate owner occupied	2,371		40		2,411		1,109		854		1,963
Commercial real estate non-owner occupied	21,479		—		21,479		76		—		76
Construction	—		—		—		—		—		—
Residential real estate	4,730		1,324		6,054		4,559		1,569		6,128
Manufactured housing	—		2,558		2,558		—		1,655		1,655
Other consumer	270		2,249		2,519		140		1,411		1,551
Total	$	41,837	$	7,197	$	49,034	$	13,084	$	6,937	$	20,021

(1) Presented at amortized cost basis. (2) Amounts exclude deferred costs and fees and unamortized premiums and discounts.

Schedule of Allowance for Credit Losses on Loans and Leases

The changes in the allowance for credit losses on loans and leases for the three months ended March 31, 2020 and 2019, is presented in the tables below.


Three Months Ended March 31, 2020	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)
Beginning balance, at December 31, 2019	$	6,157	$	15,556	$	2,235	$	6,243	$	1,262	$	3,218	$	1,060	$	20,648	$	56,379
Cumulative effect of change in accounting principle	2,171		759		5,773		7,918		(98)		1,518		3,802		57,986		79,829

Charge-offs	—		(97)		—		(12,797)		—		—		—		(6,246)		(19,140)
Recoveries	—		54		3		—		3		29		—		340		429
Provision for credit loss expense	422		2,534		516		17,166		767		(585)		125		10,841		31,786
Total ending allowance balance	$	8,750	$	18,806	$	8,527	$	18,530	$	1,934	$	4,180	$	4,987	$	83,569	$	149,283


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

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, 2020 and 2019. There were no modifications that involved forgiveness of debt for the three months ended March 31, 2020 and 2019.


	Three Months Ended March 31,
	2020				2019
(dollars in thousands)	Number of loans	Recorded investment		Number of loans	Recorded investment
Extensions of maturity	4	$	245	2	$	514
Interest-rate reductions	12	530		10	385
Total	16	$	775	12	$	899

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

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, 2020				March 31, 2019
(dollars in thousands)	Number of loans	Recorded investment		Number of loans	Recorded investment
Manufactured housing	—	$	—	5	$	137
Commercial and industrial	—	—		1	431
Commercial real estate owner occupied	1	8		—	—
Residential real estate	5	684		—	—
Total loans	6	$	692	6	$	568

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, 2020 and December 31, 2019.


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Multi-family:
Risk rating
Pass	$	26,646	$	23,689	$	172,088	$	445,613	$	329,586	$	569,400	$	—	$	—	$	1,567,022
Special mention	—		—		—		19,510		1,968		—		—		—		21,478
Substandard	—		—		—		12,028		13,904		7,201		—		—		33,133
Doubtful	—		—		—		—		—		—		—		—		—
Total multi-family loans	$	26,646	$	23,689	$	172,088	$	477,151	$	345,458	$	576,601	$	—	$	—	$	1,621,633


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Commercial and industrial:
Risk rating
Pass	$	323,338	$	491,492	$	183,202	$	120,795	$	55,483	$	101,805	$	718,827	$	—	$	1,994,942
Special mention	—		7,788		2,403		17,652		120		26		20,800		—		48,789
Substandard	—		5,576		276		1,760		7,774		3,318		10,517		—		29,221
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans and leases	$	323,338	$	504,856	$	185,881	$	140,207	$	63,377	$	105,149	$	750,144	$	—	$	2,072,952


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Commercial real estate owner occupied:
Risk rating
Pass	$	18,672	$	184,756	$	90,261	$	82,509	$	49,074	$	102,449	$	1,672	$	—	$	529,393
Special mention	—		—		483		114		—		399		—		—		996
Substandard	—		—		—		350		2,266		10,940		—		—		13,556
Doubtful	—		—		—		—		—		—		—		—		—
Total commercial real estate owner occupied loans	$	18,672	$	184,756	$	90,744	$	82,973	$	51,340	$	113,788	$	1,672	$	—	$	543,945


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Commercial real estate non-owner occupied:
Risk rating
Pass	$	74,905	$	118,164	$	118,424	$	249,784	$	201,214	$	412,250	$	—	$	—	$	1,174,741
Special mention	—		—		—		—		374		4,201		—		—		4,575
Substandard	—		—		30,772		—		2,080		21,608		—		—		54,460
Doubtful	—		—		—		—		19,050		—		—		—		19,050
Total commercial real estate non-owner occupied loans	$	74,905	$	118,164	$	149,196	$	249,784	$	222,718	$	438,059	$	—	$	—	$	1,252,826


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Construction:
Risk rating
Pass	$	451	$	83,774	$	20,241	$	—	$	9,886	$	—	$	1,096	$	—	$	115,448
Special mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—		—
Total construction loans	$	451	$	83,774	$	20,241	$	—	$	9,886	$	—	$	1,096	$	—	$	115,448


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Residential real estate:
Payment performance
Performing	$	1,527	$	15,164	$	8,103	$	14,644	$	47,557	$	86,675	$	182,652	$	—	$	356,322
Non-performing	—		—		161		160		860		4,117		427		—		5,725
Total residential real estate loans	$	1,527	$	15,164	$	8,264	$	14,804	$	48,417	$	90,792	$	183,079	$	—	$	362,047


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Manufactured housing:
Payment performance
Performing	$	—	$	312	$	643	$	81	$	44	$	64,782	$	—	$	—	$	65,862
Non-performing	—		—		—		—		—		3,378		—		—		3,378
Total manufactured housing loans	$	—	$	312	$	643	$	81	$	44	$	68,160	$	—	$	—	$	69,240


	Term Loans Amortized Cost Basis by Origination Year
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving loans amortized cost basis		Revolving loans converted to term		Total
As of March 31, 2020
Other consumer:
Payment performance
Performing	$	122,726	$	1,034,536	$	147,669	$	7,004	$	762	$	55	$	—	$	—	$	1,312,752
Non-performing	—		1,785		618		16		—		—		—		—		2,419
Total other consumer loans	$	122,726	$	1,036,321	$	148,287	$	7,020	$	762	$	55	$	—	$	—	$	1,315,171


	December 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	$	1,816,200	$	1,841,074	$	536,777	$	1,129,838	$	118,418	$	—	$	—	$	—	$	5,442,307
Special Mention	69,637		26,285		8,286		6,949		—		—		—		—		111,157
Substandard	23,437		22,621		6,944		86,742		—		—		—		—		139,744
Performing ⁽¹⁾	—		—		—		—		—		362,962		63,250		1,170,976		1,597,188
Non-performing ⁽²⁾	—		—		—		—		—		12,052		7,148		7,307		26,507
Total	$	1,909,274	$	1,889,980	$	552,007	$	1,223,529	$	118,418	$	375,014	$	70,398	$	1,178,283	$	7,316,903

(1)Includes residential real estate, manufactured housing, and other consumer loans not assigned internal 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, 2020 and 2019:


	Three Months Ended March 31,
(amounts in thousands)	2020		2019
Purchases ⁽¹⁾





Residential real estate	$	495	$	66,384

Other consumer ⁽²⁾	191,761		66,136
Total	$	192,256	$	132,520
Sales ⁽³⁾







Other consumer	1,822		—
Total	$	1,822	$	—

(1)Amounts reported in the above table are the unpaid principal balance at time of purchase. The purchase price was 100.6% and 97.6% of loans outstanding for the three months ended March 31, 2020 and 2019, respectively.

(2)Other consumer loan purchases for the three months ended March 31, 2020 consist of third-party originated unsecured consumer loans. None of the loans are considered sub-prime at the time of origination. Customers considers sub-prime borrowers to be those with FICO scores below 660.

(3)Amounts reported in the above table are the unpaid principal balance at time of sale. There were no loan sales in the three months ended March 31, 2019.