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Note 4 - Loans | 12 Months Ended
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Dec. 31, 2020
Notes to Financial Statements |
Loans, Notes, Trade and Other Receivables Disclosure [Text Block] |
4. | Loans
Most of the Company’s business activity is in markets with a concentration of Chinese-American individuals and businesses located in Southern and Northern California; New York City; Houston and Dallas, Texas; Seattle, Washington; Boston, Massachusetts; Chicago, Illinois; Edison, New Jersey; Rockville, Maryland; Las Vegas, Nevada; and Hong Kong. The Company has no specific industry concentration, and generally its loans are collateralized with real property or other pledged collateral of the borrowers. The Company generally expects its loans to be paid off from the operating profits of the borrowers, refinancing by another lender, or through sale by the borrowers of the secured collateral. The components of loans in the Consolidated Balance Sheets as of December 31, 2020, and December 31, 2019, were as follows:
|  | As of December 31, |
|  | 2020 |  |  | 2019 |
|  | (In thousands) |
Type of Loans: |  |  |  |  |  |  |  |
Commercial loans |  | $ | 2,836,833 |  |  | $ | 2,778,744 |
Real estate construction loans |  |  | 679,492 |  |  |  | 579,864 |
Commercial mortgage loans |  |  | 7,555,027 |  |  |  | 7,275,262 |
Residential mortgage loans |  |  | 4,145,389 |  |  |  | 4,088,586 |
Equity lines |  |  | 424,555 |  |  |  | 347,975 |
Installment and other loans |  |  | 3,100 |  |  |  | 5,050 |
Gross loans |  |  | 15,644,396 |  |  |  | 15,075,481 |
Less: |  |  |  |  |  |  |  |
Allowance for loan losses |  |  | (166,538 | ) |  |  | (123,224 | )
Unamortized deferred loan fees |  |  | (2,494 | ) |  |  | (626 | )
Total loans and leases, net |  | $ | 15,475,364 |  |  | $ | 14,951,631 |
The Company pledged real estate loans of $11.2 billion at December 31, 2020, and $10.6 billion at December 31, 2019, to the Federal Home Loan Bank of San Francisco under its blanket lien pledging program. In addition, the Bank pledged $7.5 million at December 31, 2020, and $31.9 million at December 31, 2019, of its commercial loans to the Federal Reserve Bank’s Discount Window under the Borrower-in-Custody program. Loans serviced for others as of December 31, 2020, totaled $173.5 million and were comprised of $110.5 million of residential mortgages, $30.9 million of commercial real estate loans, $29.0 million of construction loans, and $3.1 million of commercial loans. The Company has entered into transactions with its directors, executive officers, or principal holders of its equity securities, or the associates of such persons (“Related Parties”). All loans to Related Parties were current as of December 31, 2020. An analysis of the activity with respect to loans to Related Parties for the years indicated is as follows:
|  | December 31, |
|  | 2020 |  |  | 2019 |
|  | (In thousands) |
Balance at beginning of year |  | $ | 43,952 |  |  | $ | 47,263 |
Additional loans made |  |  | 23,102 |  |  |  | 19,036 |
Payment received |  |  | (15,766 | ) |  |  | (22,347 | )
Balance at end of year |  | $ | 51,288 |  |  | $ | 43,952 |
At December 31, 2020, recorded investment in impaired loans totaled $95.4 million and were comprised of nonaccrual loans of $67.7 million and accruing TDR’s of $27.7 million. At December 31, 2019, recorded investment in impaired loans totaled $75.9 million and were comprised of nonaccrual loans of $40.5 million and accruing TDR’s of $35.4 million. The average balance of impaired loans was $91.4 million in 2020 and $102.6 million in 2019. We considered all non-accrual loans and TDRs to be impaired. Interest recognized on impaired loans totaled $2.4 million in 2020 and $2.1 million in 2019. The Bank recognizes interest income on impaired loans based on its existing method of recognizing interest income on non-accrual loans except accruing TDRs. For impaired loans, the amounts previously charged off represent 7.1% and 2.1% of the contractual balances for impaired loans at December 31, 2020 and 2019, respectively. The following table presents impaired loans and the related allowance as of December 31, 2020 and 2019:
|  | Impaired Loans |
|  | As of December 31, 2020 |  |  | As of December 31, 2019 |
|  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |  |  | Unpaid Principal Balance |  |  | Recorded Investment |  |  | Allowance |
|  | (In thousands) |
With no allocated allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 23,784 |  |  | $ | 20,698 |  |  | $ | — |  |  | $ | 20,134 |  |  | $ | 15,857 |  |  | $ | — |
Real estate construction loans |  |  | 5,776 |  |  |  | 4,286 |  |  |  | — |  |  |  | 5,776 |  |  |  | 4,580 |  |  |  | — |
Commercial mortgage loans |  |  | 22,877 |  |  |  | 22,287 |  |  |  | — |  |  |  | 9,234 |  |  |  | 9,030 |  |  |  | — |
Residential mortgage and equity lines |  |  | 6,379 |  |  |  | 6,307 |  |  |  | — |  |  |  | 6,171 |  |  |  | 6,073 |  |  |  | — |
Subtotal |  | $ | 58,816 |  |  | $ | 53,578 |  |  | $ | — |  |  | $ | 41,315 |  |  | $ | 35,540 |  |  | $ | — |
With allocated allowance |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial loans |  | $ | 13,703 |  |  | $ | 6,372 |  |  | $ | 1,030 |  |  | $ | 8,769 |  |  | $ | 8,739 |  |  | $ | 2,543 |
Commercial mortgage loans |  |  | 31,134 |  |  |  | 31,003 |  |  |  | 5,254 |  |  |  | 26,117 |  |  |  | 26,040 |  |  |  | 473 |
Residential mortgage and equity lines |  |  | 5,005 |  |  |  | 4,452 |  |  |  | 145 |  |  |  | 6,740 |  |  |  | 5,540 |  |  |  | 220 |
Subtotal |  | $ | 49,842 |  |  | $ | 41,827 |  |  | $ | 6,429 |  |  | $ | 41,626 |  |  | $ | 40,319 |  |  | $ | 3,236 |
Total impaired loans |  | $ | 108,658 |  |  | $ | 95,405 |  |  | $ | 6,429 |  |  | $ | 82,941 |  |  | $ | 75,859 |  |  | $ | 3,236 |
The following table presents the average balance and interest income recognized related to impaired loans for the periods indicated:
|  | For the year ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |  |  | 2020 |  |  | 2019 |  |  | 2018 |
|  | Average Recorded Investment |  |  | Interest Income Recognized |
|  | (In thousands) |
Commercial loans |  | $ | 31,009 |  |  | $ | 37,475 |  |  | $ | 44,486 |  |  | $ | 246 |  |  | $ | 412 |  |  | $ | 685 |
Real estate construction loans |  |  | 4,408 |  |  |  | 4,697 |  |  |  | 6,835 |  |  |  | 294 |  |  |  | — |  |  |  | — |
Commercial mortgage loans |  |  | 41,649 |  |  |  | 47,612 |  |  |  | 57,596 |  |  |  | 1,602 |  |  |  | 1,366 |  |  |  | 2,125 |
Residential mortgage and equity lines |  |  | 14,287 |  |  |  | 12,799 |  |  |  | 13,679 |  |  |  | 252 |  |  |  | 306 |  |  |  | 356 |
Subtotal |  | $ | 91,353 |  |  | $ | 102,583 |  |  | $ | 122,596 |  |  | $ | 2,394 |  |  | $ | 2,084 |  |  | $ | 3,166 |
The following table is a summary of non-accrual loans as of December 31, 2020, 2019, and 2018 and the related net interest foregone for the years then ended:
|  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (In thousands) |
Non-accrual portfolio loans |  | $ | 67,684 |  |  | $ | 40,523 |  |  | $ | 41,815 |
Contractual interest due |  | $ | 3,093 |  |  | $ | 1,775 |  |  | $ | 1,618 |
Interest recognized |  |  | 1,008 |  |  |  | 85 |  |  |  | 66 |
Net interest foregone |  | $ | 2,085 |  |  | $ | 1,690 |  |  | $ | 1,552 |
The following tables present the aging of the loan portfolio by type as of December 31, 2020, and December 31, 2019:
|  | As of December 31, 2020 |  |  |  |  |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or More Past Due |  |  | Non-accrual Loans |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |  |  | Amortized Cost > 90 days and Accruing |
Type of Loans: |  | (In thousands) |  |  |  |  |
Commercial loans |  | $ | 52,601 |  |  | $ | 3,182 |  |  | $ | 2,947 |  |  | $ | 23,087 |  |  | $ | 81,817 |  |  | $ | 2,755,016 |  |  | $ | 2,836,833 |  |  | $ | 2,947 |
Real estate construction loans |  |  | 6,257 |  |  |  | — |  |  |  | — |  |  |  | 4,286 |  |  |  | 10,543 |  |  |  | 668,949 |  |  |  | 679,492 |  |  |  | — |
Commercial mortgage loans |  |  | 45,186 |  |  |  | 18,069 |  |  |  | 2,035 |  |  |  | 33,715 |  |  |  | 99,005 |  |  |  | 7,456,022 |  |  |  | 7,555,027 |  |  |  | 2,035 |
Residential mortgage loans |  |  | 14,315 |  |  |  | 4,223 |  |  |  | — |  |  |  | 6,596 |  |  |  | 25,134 |  |  |  | 4,544,810 |  |  |  | 4,569,944 |  |  |  | — |
Installment and other loans |  |  | 43 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 43 |  |  |  | 3,057 |  |  |  | 3,100 |  |  |  | — |
Total loans |  | $ | 118,402 |  |  | $ | 25,474 |  |  | $ | 4,982 |  |  | $ | 67,684 |  |  | $ | 216,542 |  |  | $ | 15,427,854 |  |  | $ | 15,644,396 |  |  | $ | 4,982 |
|  | As of December 31, 2019 |  |  |  |  |
|  | 30-59 Days Past Due |  |  | 60-89 Days Past Due |  |  | 90 Days or More Past Due |  |  | Non-accrual Loans |  |  | Total Past Due |  |  | Loans Not Past Due |  |  | Total |  |  | Amortized Cost > 90 days and Accruing |
Type of Loans: |  | (In thousands) |  |  |  |  |
Commercial loans |  | $ | 24,681 |  |  | $ | 9,954 |  |  | $ | 6,409 |  |  | $ | 19,381 |  |  | $ | 60,425 |  |  | $ | 2,718,319 |  |  | $ | 2,778,744 |  |  | $ | 6,409 |
Real estate construction loans |  |  | 5,846 |  |  |  | 6,753 |  |  |  | — |  |  |  | 4,580 |  |  |  | 17,179 |  |  |  | 562,685 |  |  |  | 579,864 |  |  |  | — |
Commercial mortgage loans |  |  | 7,694 |  |  |  | 2,609 |  |  |  | — |  |  |  | 9,928 |  |  |  | 20,231 |  |  |  | 7,255,031 |  |  |  | 7,275,262 |  |  |  | — |
Residential mortgage loans |  |  | 26,028 |  |  |  | 965 |  |  |  | — |  |  |  | 6,634 |  |  |  | 33,627 |  |  |  | 4,402,934 |  |  |  | 4,436,561 |  |  |  | — |
Installment and other loans |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,050 |  |  |  | 5,050 |  |  |  | — |
Total loans |  | $ | 64,249 |  |  | $ | 20,281 |  |  | $ | 6,409 |  |  | $ | 40,523 |  |  | $ | 131,462 |  |  | $ | 14,944,019 |  |  | $ | 15,075,481 |  |  | $ | 6,409 |
The determination of the amount of the allowance for credit losses for problem loans is based on management’s current judgment about the credit quality of the loan portfolio and takes into consideration known relevant internal and external factors that affect collectability when determining the appropriate level for the allowance for credit losses. The nature of the process by which the Bank determines the appropriate allowance for credit losses requires the exercise of considerable judgment. This allowance evaluation process is also applied to TDRs since the Bank deems TDRs to be impaired loans. The allowance for loan losses and the reserve for off-balance sheet credit commitments are significant estimates that can and do change based on management’s process in analyzing the loan portfolio and on management’s assumptions about specific borrowers, underlying collateral, and applicable economic and environmental conditions, among other factors. At December 31, 2020, accruing TDRs were $27.7 million and non-accrual TDRs were $9.0 million compared to accruing TDRs of $35.3 million and non-accrual TDRs of $18.0 million at December 31, 2019. The Company had allocated specific reserves of $122 thousand to accruing TDRs and $24 thousand to non-accrual TDRs at December 31, 2020, and $822 thousand to accruing TDRs and $2.2 million to non-accrual TDRs at December 31, 2019. The following table presents TDRs that were modified during 2020, their specific reserve at December 31, 2020, and charge-offs during 2020:
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Specific Reserve |  |  | Charge-offs |
|  | (Dollars in thousands) |
Commercial loans |  |  | 5 |  |  | $ | 5,417 |  |  | $ | 5,417 |  |  | $ | — |  |  | $ | — |
Total |  |  | 5 |  |  | $ | 5,417 |  |  | $ | 5,417 |  |  | $ | — |  |  | $ | — |
The following table presents TDRs that were modified during 2019, their specific reserve at December 31, 2019, and charge-offs during 2019:
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Specific Reserve |  |  | Charge-offs |
|  | (Dollars in thousands) |
Commercial loans |  |  | 23 |  |  | $ | 25,937 |  |  | $ | 21,874 |  |  | $ | 2,190 |  |  | $ | 4,063 |
Residential mortgage and equity lines |  |  | 1 |  |  |  | 42 |  |  |  | 42 |  |  |  | — |  |  |  | — |
Total |  |  | 24 |  |  | $ | 25,979 |  |  | $ | 21,916 |  |  | $ | 2,190 |  |  | $ | 4,063 |
The following table presents TDRs that were modified during 2018, their specific reserve at December 31, 2018, and charge-offs during 2018:
|  | No. of Contracts |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Specific Reserve |  |  | Charge-off |
|  | (Dollars in thousands) |
Commercial loans |  |  | 23 |  |  | $ | 13,290 |  |  | $ | 13,290 |  |  | $ | 1,384 |  |  | $ | — |
Commercial mortgage loans |  |  | 7 |  |  |  | 14,626 |  |  |  | 14,626 |  |  |  | 111 |  |  |  | — |
Residential mortgage and equity lines |  |  | 4 |  |  |  | 1,214 |  |  |  | 1,214 |  |  |  | 23 |  |  |  | — |
Total |  |  | 34 |  |  | $ | 29,130 |  |  | $ | 29,130 |  |  | $ | 1,518 |  |  | $ | — |
A summary of TDRs by type of concession and by type of loans as of December 31, 2020, and December 31, 2019, are shown below:
|  | December 31, 2020 |
Accruing TDRs |  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 3,983 |  |  | $ | — |  |  | $ | — |  |  | $ | 3,983 |
Commercial mortgage loans |  |  | 515 |  |  |  | 5,635 |  |  |  | 13,425 |  |  |  | 19,575 |
Residential mortgage loans |  |  | 1,724 |  |  |  | 275 |  |  |  | 2,164 |  |  |  | 4,163 |
Total accruing TDRs |  | $ | 6,222 |  |  | $ | 5,910 |  |  | $ | 15,589 |  |  | $ | 27,721 |
|  | December 31, 2020 |
Non-accrual TDRs |  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 8,462 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,462 |
Residential mortgage loans |  |  | 523 |  |  |  | — |  |  |  | — |  |  |  | 523 |
Total non-accrual TDRs |  | $ | 8,985 |  |  | $ | — |  |  | $ | — |  |  | $ | 8,985 |
|  | December 31, 2019 |
Accruing TDRs |  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 5,215 |  |  | $ | — |  |  | $ | — |  |  | $ | 5,215 |
Commercial mortgage loans |  |  | 615 |  |  |  | 5,748 |  |  |  | 18,779 |  |  |  | 25,142 |
Residential mortgage loans |  |  | 2,525 |  |  |  | 311 |  |  |  | 2,143 |  |  |  | 4,979 |
Total accruing TDRs |  | $ | 8,355 |  |  | $ | 6,059 |  |  | $ | 20,922 |  |  | $ | 35,336 |
|  | December 31, 2019 |
Non-accrual TDRs |  | Payment Deferral |  |  | Rate Reduction |  |  | Rate Reduction and Payment Deferral |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 16,692 |  |  | $ | — |  |  | $ | — |  |  | $ | 16,692 |
Residential mortgage loans |  |  | 1,220 |  |  |  | — |  |  |  | 136 |  |  |  | 1,356 |
Total non-accrual TDRs |  | $ | 17,912 |  |  | $ | — |  |  | $ | 136 |  |  | $ | 18,048 |
The activity within our TDR loans for 2020, 2019, and 2018 are shown below:
Accruing TDRs |  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (In thousands) |
Beginning balance |  | $ | 35,336 |  |  | $ | 65,071 |  |  | $ | 68,565 |
New restructurings |  |  | 5,417 |  |  |  | 15,432 |  |  |  | 26,114 |
Restructured loans restored to accrual status |  |  | 263 |  |  |  | 365 |  |  |  | 2,896 |
Charge-offs |  |  | — |  |  |  | (1,341 | ) |  |  | — |
Payments |  |  | (13,295 | ) |  |  | (42,895 | ) |  |  | (30,406 | )
Restructured loans placed on non-accrual |  |  | — |  |  |  | (1,296 | ) |  |  | (2,098 | )
Ending balance |  | $ | 27,721 |  |  | $ | 35,336 |  |  | $ | 65,071 |
Non-accrual TDRs |  | 2020 |  |  | 2019 |  |  | 2018 |
|  | (In thousands) |
Beginning balance |  | $ | 18,048 |  |  | $ | 24,189 |  |  | $ | 33,416 |
New restructurings |  |  | — |  |  |  | 10,547 |  |  |  | 3,015 |
Restructured loans placed on non-accrual |  |  | — |  |  |  | 1,296 |  |  |  | 2,098 |
Charge-offs |  |  | (4,970 | ) |  |  | (3,607 | ) |  |  | (2,347 | )
Payments |  |  | (3,830 | ) |  |  | (14,012 | ) |  |  | (9,097 | )
Restructured loans restored to accrual status |  |  | (263 | ) |  |  | (365 | ) |  |  | (2,896 | )
Ending balance |  | $ | 8,985 |  |  | $ | 18,048 |  |  | $ | 24,189 |
A loan is considered to be in payment default once it is 60 to 90 days contractually past due under the modified terms. The Company did not have any loans that were modified as a TDR during the previous twelve months and which had subsequently defaulted as of December 31, 2020. Under the Company’s internal underwriting policy, 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 in order to determine whether a borrower is experiencing financial difficulty. As of December 31, 2020, there were no commitments to lend additional funds to those borrowers whose loans have been restructured, were considered impaired, or were on non-accrual status. The CARES Act, signed into law on March 27, 2020, and as extended by the CAA, 2021, permits financial institutions to suspend requirements under GAAP for loan modifications to borrowers affected by COVID-19 that would otherwise be characterized as TDRs and suspend any determination related thereto if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2021 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. In addition, federal bank regulatory authorities have issued guidance to encourage financial institutions to make loan modifications for borrowers affected by COVID-19 and have assured financial institutions that they will neither receive supervisory criticism for such prudent loan modifications, nor be required by examiners to automatically categorize COVID-19-related loan modifications as TDRs. The Company is applying this guidance to qualifying loan modifications. As part of the on-going monitoring of the credit quality of our loan portfolio, the Company utilizes a risk grading matrix to assign a risk grade to each loan. Loans are risk rated based on analysis of the current state of the borrower’s credit quality. The analysis of credit quality includes a review of sources of repayment, the borrower’s current financial and liquidity status and other relevant information. The risk rating categories can be generally described by the following grouping for non-homogeneous loans:
| ● | Pass/Watch – These loans range from minimal credit risk to lower than average, but still acceptable, credit risk.
| ● | Special Mention – Borrower is deemed fundamentally sound, and the loan is currently protected but adverse trends are apparent that, if not corrected, may affect ability to repay. Primary source of loan repayment remains viable but there is increasing reliance on collateral or guarantor support.
| ● | Substandard – These loans are deemed inadequately protected by current sound worth, paying capacity or pledged collateral. Well-defined weaknesses exist that could jeopardize repayment of debt. Loss may not be imminent, but if weaknesses are not corrected, there is a good possibility of some loss.
| ● | Doubtful – The possibility of loss is deemed extremely high, but due to identifiable and important pending events (which may strengthen the loan) a loss classification is deferred until the situation is better defined.
| ● | Loss – These loans are deemed uncollectible and of such little value that to continue to carry the loans as an active asset is no longer warranted.
The following tables present loan portfolio by risk rating as of December 31, 2020 and December 31, 2019:
|  | As of December 31, 2020 |
|  | Pass/Watch |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 2,581,128 |  |  | $ | 141,344 |  |  | $ | 108,788 |  |  | $ | 5,573 |  |  | $ | 2,836,833 |
Real estate construction loans |  |  | 593,196 |  |  |  | 82,010 |  |  |  | 4,286 |  |  |  | — |  |  |  | 679,492 |
Commercial mortgage loans |  |  | 7,202,568 |  |  |  | 186,283 |  |  |  | 166,176 |  |  |  | — |  |  |  | 7,555,027 |
Residential mortgage and equity lines |  |  | 4,547,052 |  |  |  | 11,647 |  |  |  | 11,245 |  |  |  | — |  |  |  | 4,569,944 |
Installment and other loans |  |  | 3,100 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 3,100 |
Total gross loans |  | $ | 14,927,044 |  |  | $ | 421,284 |  |  | $ | 290,495 |  |  | $ | 5,573 |  |  | $ | 15,644,396 |
|  | As of December 31, 2019 |
|  | Pass/Watch |  |  | Special Mention |  |  | Substandard |  |  | Doubtful |  |  | Total |
|  | (In thousands) |
Commercial loans |  | $ | 2,528,944 |  |  | $ | 166,016 |  |  | $ | 83,784 |  |  | $ | — |  |  | $ | 2,778,744 |
Real estate construction loans |  |  | 461,597 |  |  |  | 113,687 |  |  |  | 4,580 |  |  |  | — |  |  |  | 579,864 |
Commercial mortgage loans |  |  | 6,992,933 |  |  |  | 196,454 |  |  |  | 85,875 |  |  |  | — |  |  |  | 7,275,262 |
Residential mortgage and equity lines |  |  | 4,427,205 |  |  |  | 914 |  |  |  | 8,442 |  |  |  | — |  |  |  | 4,436,561 |
Installment and other loans |  |  | 5,050 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 5,050 |
Total gross loans |  | $ | 14,415,729 |  |  | $ | 477,071 |  |  | $ | 182,681 |  |  | $ | — |  |  | $ | 15,075,481 |
The following table presents the balance in the allowance for loan losses by portfolio segment and based on impairment method as of December 31, 2020 and December 31, 2019.
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Residential |  |  |  |  |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | Mortgage |  |  | Consumer |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | and Equity Lines |  |  | and Other |  |  | Total |
|  | (In thousands) |
December 31, 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 1,030 |  |  | $ | — |  |  | $ | 5,254 |  |  | $ | 145 |  |  | $ | — |  |  | $ | 6,429 |
Balance |  | $ | 27,070 |  |  | $ | 4,286 |  |  | $ | 53,289 |  |  | $ | 10,760 |  |  | $ | — |  |  | $ | 95,405 |
Loans collectively evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 67,712 |  |  | $ | 30,854 |  |  | $ | 43,951 |  |  | $ | 17,592 |  |  | $ | — |  |  | $ | 160,109 |
Balance |  | $ | 2,809,763 |  |  | $ | 675,206 |  |  | $ | 7,501,738 |  |  | $ | 4,559,184 |  |  | $ | 3,100 |  |  | $ | 15,548,991 |
Total allowance |  | $ | 68,742 |  |  | $ | 30,854 |  |  | $ | 49,205 |  |  | $ | 17,737 |  |  | $ | — |  |  | $ | 166,538 |
Total balance |  | $ | 2,836,833 |  |  | $ | 679,492 |  |  | $ | 7,555,027 |  |  | $ | 4,569,944 |  |  | $ | 3,100 |  |  | $ | 15,644,396 |
December 31, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans individually evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 2,543 |  |  | $ | — |  |  | $ | 473 |  |  | $ | 220 |  |  | $ | — |  |  | $ | 3,236 |
Balance |  | $ | 24,596 |  |  | $ | 4,580 |  |  | $ | 35,070 |  |  | $ | 11,613 |  |  | $ | — |  |  | $ | 75,859 |
Loans collectively evaluated for impairment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance |  | $ | 54,478 |  |  | $ | 19,474 |  |  | $ | 33,129 |  |  | $ | 12,888 |  |  | $ | 19 |  |  | $ | 119,988 |
Balance |  | $ | 2,754,148 |  |  | $ | 575,284 |  |  | $ | 7,240,192 |  |  | $ | 4,424,948 |  |  | $ | 5,050 |  |  | $ | 14,999,622 |
Total allowance |  | $ | 57,021 |  |  | $ | 19,474 |  |  | $ | 33,602 |  |  | $ | 13,108 |  |  | $ | 19 |  |  | $ | 123,224 |
Total balance |  | $ | 2,778,744 |  |  | $ | 579,864 |  |  | $ | 7,275,262 |  |  | $ | 4,436,561 |  |  | $ | 5,050 |  |  | $ | 15,075,481 |
The following table details activity in the allowance for loan losses by portfolio segment for the years ended December 31, 2020 and 2019. Allocation of a portion of the allowance to one category of loans does not preclude its availability to absorb losses in other categories.
|  |  |  |  |  | Real Estate |  |  | Commercial |  |  | Residential |  |  | Installment |  |  |  |  |
|  | Commercial |  |  | Construction |  |  | Mortgage |  |  | Mortgage |  |  | and Other |  |  |  |  |
|  | Loans |  |  | Loans |  |  | Loans |  |  | and Equity Lines |  |  | Loans |  |  | Total |
|  | (In thousands) |
2019 Beginning Balance |  | $ | 54,978 |  |  | $ | 19,626 |  |  | $ | 33,487 |  |  | $ | 14,282 |  |  | $ | 18 |  |  | $ | 122,391 |
Provision/(reversal) for loan losses |  |  | 4,885 |  |  |  | (4,764 | ) |  |  | (5,216 | ) |  |  | (1,906 | ) |  |  | 1 |  |  |  | (7,000 | )
Charge-offs |  |  | (6,997 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (6,997 | )
Recoveries |  |  | 4,155 |  |  |  | 4,612 |  |  |  | 5,331 |  |  |  | 732 |  |  |  | — |  |  |  | 14,830 |
Net (Charge-offs)/Recoveries |  |  | (2,842 | ) |  |  | 4,612 |  |  |  | 5,331 |  |  |  | 732 |  |  |  | — |  |  |  | 7,833 |
2019 Ending Balance |  | $ | 57,021 |  |  | $ | 19,474 |  |  | $ | 33,602 |  |  | $ | 13,108 |  |  | $ | 19 |  |  | $ | 123,224 |
Reserve for impaired loans |  | $ | 2,543 |  |  | $ | — |  |  | $ | 473 |  |  | $ | 220 |  |  | $ | — |  |  | $ | 3,236 |
Reserve for non-impaired loans |  | $ | 54,478 |  |  | $ | 19,474 |  |  | $ | 33,129 |  |  | $ | 12,888 |  |  | $ | 19 |  |  | $ | 119,988 |
Reserve for off-balance sheet credit commitments |  | $ | 2,301 |  |  | $ | 1,047 |  |  | $ | 193 |  |  | $ | 311 |  |  | $ | 3 |  |  | $ | 3,855 |
2020 Beginning Balance |  | $ | 57,021 |  |  | $ | 19,474 |  |  | $ | 33,602 |  |  | $ | 13,108 |  |  | $ | 19 |  |  | $ | 123,224 |
Provision/(reversal) for loan losses |  |  | 26,450 |  |  |  | 11,380 |  |  |  | 15,164 |  |  |  | 4,525 |  |  |  | (19 | ) |  |  | 57,500 |
Charge-offs |  |  | (21,996 | ) |  |  | — |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (21,996 | )
Recoveries |  |  | 7,267 |  |  |  | — |  |  |  | 439 |  |  |  | 104 |  |  |  | — |  |  |  | 7,810 |
Net (Charge-offs)/Recoveries |  |  | (14,729 | ) |  |  | — |  |  |  | 439 |  |  |  | 104 |  |  |  | — |  |  |  | (14,186 | )
2020 Ending Balance |  | $ | 68,742 |  |  | $ | 30,854 |  |  | $ | 49,205 |  |  | $ | 17,737 |  |  | $ | — |  |  | $ | 166,538 |
Reserve for impaired loans |  | $ | 1,030 |  |  | $ | — |  |  | $ | 5,254 |  |  | $ | 145 |  |  | $ | — |  |  | $ | 6,429 |
Reserve for non-impaired loans |  | $ | 67,712 |  |  | $ | 30,854 |  |  | $ | 43,951 |  |  | $ | 17,592 |  |  | $ | — |  |  | $ | 160,109 |
Reserve for off-balance sheet credit commitments |  | $ | 4,802 |  |  | $ | 690 |  |  | $ | 101 |  |  | $ | 284 |  |  | $ | 3 |  |  | $ | 5,880 |
An analysis of the activity in the allowance for credit losses for the years ended December 31, 2020, 2019, and 2018 is as follows:
|  | For the year ended December 31, |
|  | 2020 |  |  | 2019 |  |  | 2018 |
Allowance for Loan Losses |  | (In thousands) |
Balance at beginning of year |  | $ | 123,224 |  |  | $ | 122,391 |  |  | $ | 123,279 |
Provision/(reversal) for credit losses |  |  | 57,500 |  |  |  | (7,000 | ) |  |  | (4,500 | )
Loans charged off |  |  | (21,996 | ) |  |  | (6,997 | ) |  |  | (3,206 | )
Recoveries of charged off loans |  |  | 7,810 |  |  |  | 14,830 |  |  |  | 6,818 |
Balance at end of year |  | $ | 166,538 |  |  | $ | 123,224 |  |  | $ | 122,391 |
Reserve for Off-balance Sheet Credit Commitments |  |  |  |  |  |  |  |  |
Balance at beginning of year |  | $ | 3,855 |  |  | $ | 2,250 |  |  | $ | 4,588 |
Provision/(reversal) for credit losses and transfers |  |  | 2,025 |  |  |  | 1,605 |  |  |  | (2,338 | )
Balance at end of year |  | $ | 5,880 |  |  | $ | 3,855 |  |  | $ | 2,250 |
Residential mortgage loans in process of formal foreclosure proceedings were $808 thousand at December 31, 2020, compared to $1.0 million at December 31, 2019. The ongoing COVID-19 pandemic has caused significant disruption in the United States and international economies and financial markets. Although banks have generally been permitted to continue operating, the COVID-19 pandemic has caused disruptions to our business and could cause material disruptions to our business and operations in the future. The Company has continued its efforts to support its customers affected by the pandemic and to maintain asset quality and balance sheet strength, including the following:
| • | The Company has provided loans through the SBA's Paycheck Protection Program, or “PPP”. As of December 31, 2020, 1,362 PPP loans with a current balance of $240.9 million have been approved by the Small Business Administration and an additional $23.3 million have been forgiven. These loans do not carry an allowance for loan losses.
| • | The Company has outstanding COVID-19 modifications on approximately 23 commercial real estate loans totaling $81.0 million as of December 31, 2020, which represented 1.1% of the Bank’s commercial real estate loans and 12 commercial loans, totaling $56.7 million, which represented 2.0% of the total commercial loans.
| • | As of December 31, 2020, COVID-19 modifications outstanding include 78, or $40.7 million, in residential mortgage loans, that represented 1.0% of the total residential mortgage portfolio, and 7 HELOC loans totaling $2.2 million, which represented 0.5% of total HELOC loans.

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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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