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Loans | 3 Months Ended
--- | ---
Mar. 31, 2020
Loans and Leases Receivable, Net Amount [Abstract] |
Loans | Loans The Company’s loan portfolio includes originated and purchased loans. The following is an analysis of the loan portfolio by segment and class (net of unearned income):
|  | March 31, 2020 |  | December 31, 2019
|  | (dollars in thousands)
Commercial loans: |  |  |  |
Commercial real estate |  | $ | 3,969,974 |  |  | $ | 3,945,853 |
Commercial business |  | 3,169,668 |  |  | 2,989,613 |
Agriculture |  | 754,491 |  |  | 765,371 |
Construction |  | 308,186 |  |  | 361,533 |
Consumer loans: |  |  |  |
One-to-four family residential real estate |  | 690,506 |  |  | 637,325 |
Other consumer |  | 40,496 |  |  | 43,770 |
Total loans |  | 8,933,321 |  |  | 8,743,465 |
Less: Allowance for credit losses |  | (122,074 | ) |  | (83,968 | )
Total loans, net |  | $ | 8,811,247 |  |  | $ | 8,659,497 |
Loans held for sale |  | $ | 9,701 |  |  | $ | 17,718 |
At March 31, 2020 and December 31, 2019, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington, Oregon and Idaho. At March 31, 2020 and December 31, 2019, $3.37 billion and $3.24 billion of commercial and residential real estate loans were pledged as collateral on FHLB borrowings and additional borrowing capacity. The Company has also pledged $149.9 million and $151.3 million of commercial loans to the FRB for additional borrowing capacity at March 31, 2020 and December 31, 2019, respectively. Accrued interest receivable for loans is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At March 31, 2020 and December 31, 2019, accrued interest receivable for loans was $32.3 million and $33.0 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable. The following is an aging of the recorded investment of the loan portfolio as of March 31, 2020 and December 31, 2019:
|  | Current Loans |  | 30 - 59 Days Past Due |  | 60 - 89 Days Past Due |  | Greater than 90 Days Past Due |  | Total Past Due |  | Nonaccrual Loans |  | Total Loans
March 31, 2020 |  | (in thousands)
Commercial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 3,957,092 |  |  | $ | 5,899 |  |  | $ | 1,465 |  |  | $ | — |  |  | $ | 7,364 |  |  | $ | 5,518 |  |  | $ | 3,969,974 |
Commercial business |  | 3,140,629 |  |  | 3,055 |  |  | 1,589 |  |  | — |  |  | 4,644 |  |  | 24,395 |  |  | 3,169,668 |
Agriculture |  | 735,186 |  |  | 2,462 |  |  | 1,760 |  |  | — |  |  | 4,222 |  |  | 15,083 |  |  | 754,491 |
Construction |  | 305,948 |  |  | 2,238 |  |  | — |  |  | — |  |  | 2,238 |  |  | — |  |  | 308,186 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
One-to-four family residential real estate |  | 684,248 |  |  | 3,071 |  |  | 544 |  |  | — |  |  | 3,615 |  |  | 2,643 |  |  | 690,506 |
Other consumer |  | 40,401 |  |  | 38 |  |  | 49 |  |  | — |  |  | 87 |  |  | 8 |  |  | 40,496 |
Total |  | $ | 8,863,504 |  |  | $ | 16,763 |  |  | $ | 5,407 |  |  | $ | — |  |  | $ | 22,170 |  |  | $ | 47,647 |  |  | $ | 8,933,321 |
|  | Current Loans |  | 30 - 59 Days Past Due |  | 60 - 89 Days Past Due |  | Greater than 90 Days Past Due |  | Total Past Due |  | Nonaccrual Loans |  | Total Loans
December 31, 2019 |  | (in thousands)
Commercial loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  | $ | 3,935,633 |  |  | $ | 6,421 |  |  | $ | — |  |  | — |  |  | $ | 6,421 |  |  | $ | 3,799 |  |  | $ | 3,945,853 |
Commercial business |  | 2,959,826 |  |  | 6,081 |  |  | 2,769 |  |  | — |  |  | 8,850 |  |  | 20,937 |  |  | 2,989,613 |
Agriculture |  | 755,719 |  |  | 2,283 |  |  | 2,346 |  |  | — |  |  | 4,629 |  |  | 5,023 |  |  | 765,371 |
Construction |  | 360,582 |  |  | 951 |  |  | — |  |  | — |  |  | 951 |  |  | — |  |  | 361,533 |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |
One-to-four family residential real estate |  | 631,109 |  |  | 2,516 |  |  | 408 |  |  | — |  |  | 2,924 |  |  | 3,292 |  |  | 637,325 |
Other consumer |  | 43,654 |  |  | 80 |  |  | 27 |  |  | — |  |  | 107 |  |  | 9 |  |  | 43,770 |
Total |  | $ | 8,686,523 |  |  | $ | 18,332 |  |  | $ | 5,550 |  |  | $ | — |  |  | $ | 23,882 |  |  | $ | 33,060 |  |  | $ | 8,743,465 |
Loan payments are considered timely when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof is received on the due date of the scheduled payment. Nonaccrual loans are generally loans placed on a nonaccrual basis when they become 90 days past due or when there are otherwise serious doubts about the collectability of principal or interest within the existing terms of the loan. The Company’s policy is to write-off all accrued interest on loans when they are placed on nonaccrual status. For the three months ended March 31, 2020, the Company wrote-off $783 thousand and $5 thousand of accrued interest on commercial and consumer loans, respectively, as a reduction to interest income. For the three months ended March 31, 2019, the Company wrote-off $539 thousand and $79 thousand of accrued interest on commercial and consumer loans, respectively, as a reduction to interest income. The following summarizes the amortized cost of nonaccrual loans for which there was no related ACL as of March 31, 2020 and December 31, 2019:
|  | March 31, 2020 |  | December 31, 2019
|  | (in thousands)
Commercial loans: |  |  |  |
Commercial real estate |  | $ | 3,887 |  |  | $ | 1,715 |
Commercial business |  | 16,029 |  |  | 15,762 |
Agriculture |  | 8,853 |  |  | 1,798 |
Total |  | $ | 28,769 |  |  | $ | 19,275 |
The following is an analysis of loans classified as TDR during the three months ended March 31, 2020 and 2019:
|  | Three Months Ended March 31, 2020 |  | Three Months Ended March 31, 2019
|  | Number of TDR Modifications |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Number of TDR Modifications |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment
|  | (dollars in thousands)
Commercial loans: |  |  |  |  |  |  |  |  |  |  |  |
Commercial business |  | 2 |  |  | $ | 272 |  |  | $ | 272 |  |  | 2 |  |  | $ | 616 |  |  | $ | 616 |
Agriculture |  | 1 |  |  | 895 |  |  | 895 |  |  | — |  |  | — |  |  | — |
Consumer loans: |  |  |  |  |  |  |  |  |  |  |  |
One-to-four family residential real estate |  | 1 |  |  | 68 |  |  | 68 |  |  | 1 |  |  | 217 |  |  | 217 |
Total |  | 4 |  |  | $ | 1,235 |  |  | $ | 1,235 |  |  | 3 |  |  | $ | 833 |  |  | $ | 833 |
The Company’s loans classified as TDR are loans that have been modified or with respect to which the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. The concessions granted in the restructurings, summarized in the table above, largely consisted of maturity extensions, interest rate modifications or a combination of both. In limited circumstances, a reduction in the principal balance of the loan could also be made as a concession. Loans classified as TDR are included with the loans collectively measured for credit losses. The Company had commitments to lend $812 thousand of additional funds on loans classified as TDR as of March 31, 2020. The Company had $1.1 million of such commitments at December 31, 2019. The Company did not have any loans modified as TDR that defaulted within 12 months of being modified as TDR during the three months ended March 31, 2020. During the three months ended March 31, 2019 the Company had one $26 thousand consumer loan that defaulted within 12 months of being modified as a TDR. The defaulted TDR loan was collateralized and included with the loans individually measured for credit loss. Modifications in response to COVID-19 The Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with a joint agency statement issued by the federal banking agencies provides that short-term modifications made in response to COVID-19 do not need to be accounted for as a TDR. Accordingly, the Company does not account for such loan modifications as TDRs. The Company’s loan modifications allow for the deferral of four months of principal and interest. The deferred interest is due and payable at the end of the deferral period and the deferred principal is due and payable on the maturity date. At March 31, 2020, we had granted short-term payment deferrals on $165.1 million of loans. The program is ongoing and additional loans continue to be granted deferrals.

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