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LOANS AND CREDIT QUALITY

6 Months Ended

Jun. 30, 2021

LOANS AND CREDIT QUALITY:

The Company's LHFI is divided into two portfolio segments, consumer loans and commercial loans. Within each portfolio segment, the Company monitors and assesses credit risk based on the risk characteristics of each of the following loan classes: single family and home equity and other loans within the consumer loan portfolio segment and non-owner occupied commercial real estate, multifamily, construction and land development, owner occupied commercial real estate and commercial business loans within the commercial loan portfolio segment. LHFI consists of the following:


(in thousands)	At June 30, 2021		At December 31, 2020

Commercial real estate loans
Non-owner occupied commercial real estate	$	761,754	$	829,538
Multifamily	1,966,995		1,428,092
Construction/land development	484,282		553,695
Total	3,213,031		2,811,325
Commercial and industrial loans
Owner occupied commercial real estate	457,504		467,256
Commercial business	575,122		645,723
Total	1,032,626		1,112,979
Consumer loans
Single family (1)	812,287		915,123
Home equity and other	334,579		404,753
Total	1,146,866		1,319,876
Total LHFI	5,392,523		5,244,180


Allowance for credit losses ("ACL")	(59,897)		(64,294)
Total LHFI less ACL	$	5,332,626	$	5,179,886

(1) Includes $5.2 million and $7.1 million at June 30, 2021 and December 31, 2020, respectively, of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Loans totaling $1.5 billion and $1.4 billion at June 30, 2021 and December 31, 2020, respectively, were pledged to secure borrowings from the Federal Home Loan Bank ("FHLB") and loans totaling $582 million and $569 million at June 30, 2021 and December 31, 2020, respectively, were pledged to secure borrowings from the Federal Reserve Bank.

Credit Risk Concentrations

LHFI are primarily secured by real estate located in the Pacific Northwest, California and Hawaii. At June 30, 2021 and December 31, 2020, multifamily loans in the state of California represented 27% and 19% of the total LHFI portfolio, respectively.

Credit Quality

Management considers the level of ACL to be appropriate to cover credit losses expected over the life of the loans for the LHFI portfolio. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Bank’s historical loss experience and eight qualitative factors for current and forecasted periods.

During the quarter ended March 31, 2020, the qualitative factors increased significantly due to the forecasted impacts of the COVID-19 pandemic. The qualitative factors have remained at a high level due to the continued uncertainty regarding the impact of the COVID-19 pandemic. Included in the qualitative factors are estimates of potential loss exposure which are based on forbearance activities relating to the COVID-19 pandemic in the Bank’s loan portfolio. Due to improvements in economic conditions, the Company recorded a $4 million recovery of the allowance for credit losses in the second quarter of 2021. As of June 30, 2021, the Bank expects that over the two-year forecast period, the markets in which it operates will have a modest improvement in single family and multifamily collateral values, but deterioration in commercial real estate collateral values with negative risk factors peaking in the first year. The Bank also expects that over the two-year forecast period, the markets in which it operates will have a modest deterioration in the economic outlook, with negative risk factors peaking in the first year.

In addition to the ACL for LHFI, the Company maintains a separate allowance for unfunded loan commitments which is included in accounts payable and other liabilities on our consolidated balance sheets. The allowance for unfunded commitments was $2.1 million and $1.6 million at June 30, 2021 and December 31, 2020, respectively.

The Bank has elected to exclude accrued interest receivable from the evaluation of the ACL. Accrued interest on LHFI was $19.6 million and $21.2 million at June 30, 2021 and December 31, 2020, respectively, and was reported in other assets in the consolidated balance sheets.

Activity in the ACL for LHFI and the allowance for unfunded commitments was as follows for the periods indicated:


	Quarter Ended June 30,				Six Months Ended June 30,
(in thousands)	2021		2020		2021		2020

Beginning balance	$	64,047	$	58,299	$	64,294	$	41,772
Provision for credit losses	(4,145)		6,705		(4,516)		21,360
Net (charge-offs) recoveries	(5)		(4)		119		25
Impact of ASC 326 adoption	—		—		—		1,843
Ending balance	$	59,897	$	65,000	$	59,897	$	65,000

Allowance for unfunded commitments:
Beginning balance	$	1,959	$	2,307	$	1,588	$	1,065
Provision for credit losses	145		(236)		516		(891)
Impact of ASC 326 adoption	—		—		—		1,897
Ending balance	$	2,104	$	2,071	$	2,104	$	2,071

Provision for credit losses:
Allowance for credit losses - loans	$	(4,145)	$	6,705	$	(4,516)	$	21,360
Allowance for unfunded commitments	145		(236)		516		(891)
Total	$	(4,000)	$	6,469	$	(4,000)	$	20,469

Activity in the ACL for LHFI by loan portfolio and loan sub-class was as follows for the periods indicated:


	Quarter Ended June 30, 2021
(in thousands)	Beginning balance		Charge-offs		Recoveries		Provision		Ending balance

Commercial real estate loans
Non-owner occupied commercial real estate	$	9,218	$	—	$	—	$	(141)	$	9,077
Multifamily	6,969		—		—		276		7,245
Construction/land development
Multifamily construction	3,936		—		—		(3,436)		500
Commercial real estate construction	1,908		—		—		114		2,022
Single family construction	5,007		—		—		646		5,653
Single family construction to permanent	1,124		—		—		(77)		1,047
Total	28,162		—		—		(2,618)		25,544
Commercial and industrial loans
Owner occupied commercial real estate	5,266		—		—		252		5,518
Commercial business	17,105		—		24		(1,255)		15,874
Total	22,371		—		24		(1,003)		21,392
Consumer loans
Single family	6,735		(44)		2		470		7,163
Home equity and other	6,779		(35)		48		(994)		5,798
Total	13,514		(79)		50		(524)		12,961
Total ACL	$	64,047	$	(79)	$	74	$	(4,145)	$	59,897


	Quarter Ended June 30, 2020
(in thousands)	Beginning balance		Charge-offs		Recoveries		Provision		Ending balance

Commercial real estate loans
Non-owner occupied commercial real estate	$	9,021	$	—	$	—	$	(1,696)	$	7,325
Multifamily	4,265		—		—		1,122		5,387
Construction/land development
Multifamily construction	3,218		—		—		593		3,811
Commercial real estate construction	382		—		—		58		440
Single family construction	6,585		—		—		(716)		5,869
Single family construction to permanent	1,512		—		—		3		1,515
Total	24,983		—		—		(636)		24,347
Commercial and industrial loans
Owner occupied commercial real estate	4,160		—		—		1,481		5,641
Commercial business	8,161		—		24		7,631		15,816
Total	12,321		—		24		9,112		21,457
Consumer loans
Single family	8,587		—		1		(518)		8,070
Home equity and other	12,408		(88)		59		(1,253)		11,126
Total	20,995		(88)		60		(1,771)		19,196
Total ACL	$	58,299	$	(88)	$	84	$	6,705	$	65,000


	Six Months Ended June 30, 2021
(in thousands)	Beginning balance		Charge-offs		Recoveries		Provision		Ending balance

Commercial real estate loans
Non-owner occupied commercial real estate	$	8,845	$	—	$	—	$	232	$	9,077
Multifamily	6,072		—		—		1,173		7,245
Construction/land development
Multifamily construction	4,903		—		—		(4,403)		500
Commercial real estate construction	1,670		—		—		352		2,022
Single family construction	5,130		—		—		523		5,653
Single family construction to permanent	1,315		—		—		(268)		1,047
Total	27,935		—		—		(2,391)		25,544
Commercial and industrial loans
Owner occupied commercial real estate	4,994				—		524		5,518
Commercial business	17,043		—		98		(1,267)		15,874
Total	22,037		—		98		(743)		21,392
Consumer loans
Single family	6,906		(114)		122		249		7,163
Home equity and other	7,416		(91)		104		(1,631)		5,798
Total	14,322		(205)		226		(1,382)		12,961
Total ACL	$	64,294	$	(205)	$	324	$	(4,516)	$	59,897


	Six Months Ended June 30, 2020
(in thousands)	Prior to adoption of ASC 326		Impact of ASC 326 adoption		Charge-offs		Recoveries		Provision		Ending balance

Commercial real estate loans
Non-owner occupied commercial real estate	$	7,245	$	(3,392)	$	—	$	—	$	3,472	$	7,325
Multifamily	7,015		(2,977)		—		—		1,349		5,387
Construction/land development
Multifamily construction	2,848		693		—		—		270		3,811
Commercial real estate construction	624		(115)		—		—		(69)		440
Single family construction	3,800		4,280		—		163		(2,374)		5,869
Single family construction to permanent	1,003		200		—		—		312		1,515
Total	22,535		(1,311)		—		163		2,960		24,347
Commercial and industrial loans
Owner occupied commercial real estate	3,639		(2,459)				—		4,461		5,641
Commercial business	2,915		510		(143)		48		12,486		15,816
Total	6,554		(1,949)		(143)		48		16,947		21,457
Consumer loans
Single family	6,450		468		—		54		1,098		8,070
Home equity and other	6,233		4,635		(305)		208		355		11,126
Total	12,683		5,103		(305)		262		1,453		19,196
Total ACL	$	41,772	$	1,843	$	(448)	$	473	$	21,360	$	65,000

The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status.


	At June 30, 2021
(in thousands)	2021		2020		2019		2018		2017		2016 and prior		Revolving		Revolving-term		Total
COMMERCIAL PORTFOLIO
Non-owner occupied commercial real estate
1-6 Pass	$	22,128	$	51,228	$	175,162	$	142,411	$	124,528	$	242,014	$	1,120	$	939	$	759,530
7- Special Mention	—		—		—		—		—		2,224		—		—		2,224
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	22,128		51,228		175,162		142,411		124,528		244,238		1,120		939		761,754



Multifamily
1-6 Pass	784,331		595,349		292,927		65,883		30,049		198,350		106		—		1,966,995
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	784,331		595,349		292,927		65,883		30,049		198,350		106		—		1,966,995



Multifamily construction
1-6 Pass	2,464		21,512		19,324		—		—		—		—		—		43,300
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	2,464		21,512		19,324		—		—		—		—		—		43,300



Commercial real estate construction
1-6 Pass	—		3,962		—		2,034		15,844		570		7,546		—		29,956
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	—		3,962		—		2,034		15,844		570		7,546		—		29,956



Single family construction
1-6 Pass	104,065		54,198		20,889		3,106		—		78		93,870		—		276,206
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	104,065		54,198		20,889		3,106		—		78		93,870		—		276,206



Single family construction to permanent
Current	32,993		69,627		28,544		3,656		—		—		—		—		134,820
Past due:
30-59 days	—		—		—		—		—		—		—		—		—
60-89 days	—		—		—		—		—		—		—		—		—
90+ days	—		—		—		—		—		—		—		—		—
Total	32,993		69,627		28,544		3,656		—		—		—		—		134,820



Owner occupied commercial real estate
1-6 Pass	35,512		49,056		59,779		52,134		76,314		122,161		550		2,917		398,423
7- Special Mention	—		—		—		2,221		6,032		307		—		65		8,625
8 - Substandard	—		—		18,985		1,111		10,658		19,702		—		—		50,456
Total	35,512		49,056		78,764		55,466		93,004		142,170		550		2,982		457,504



Commercial business
1-6 Pass	162,998		135,045		51,533		31,019		18,680		27,178		96,584		2,241		525,278
7- Special Mention	—		—		9,600		2,255		6,115		—		9,106		150		27,226
8 - Substandard	4,503		70		3,569		9,862		1,874		2,857		(227)		110		22,618
Total	167,501		135,115		64,702		43,136		26,669		30,035		105,463		2,501		575,122



Total commercial portfolio	$	1,148,994	$	980,047	$	680,312	$	315,692	$	290,094	$	615,441	$	208,655	$	6,422	$	4,245,657

The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:


	At June 30, 2021
(in thousands)	2021		2020		2019		2018		2017		2016 and prior		Revolving		Revolving-term		Total

CONSUMER PORTFOLIO
Single family
Current	$	84,439	$	165,157	$	95,791	$	104,237	$	121,245	$	238,575	$	—	$	—	$	809,444
Past due:
30-59 days	—		—		—		—		—		—		—		—		—
60-89 days	—		—		—		—		—		123		—		—		123
90+ days	—		—		971		857		157		735		—		—		2,720
Total (1)	84,439		165,157		96,762		105,094		121,402		239,433		—		—		812,287



Home equity and other
Current	1,217		1,023		704		791		657		3,682		317,713		7,123		332,910
Past due:
30-59 days	—		3		3		—		—		—		—		—		6
60-89 days	—		—		—		—		—		—		7		—		7
90+ days	—		—		—		—		2		52		1,602		—		1,656
Total	1,217		1,026		707		791		659		3,734		319,322		7,123		334,579



Total consumer portfolio	$	85,656	$	166,183	$	97,469	$	105,885	$	122,061	$	243,167	$	319,322	$	7,123	$	1,146,866
Total LHFI	$	1,234,650	$	1,146,230	$	777,781	$	421,577	$	412,155	$	858,608	$	527,977	$	13,545	$	5,392,523

(1) Includes $5.2 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status:


	At December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		2015 and prior		Revolving		Revolving-term		Total
COMMERCIAL PORTFOLIO
Non-owner occupied commercial real estate
1-6 Pass	$	53,782	$	176,556	$	165,268	$	147,719	$	150,221	$	131,935	$	796	$	1,031	$	827,308
7- Special Mention	—		—		—		—		—		2,230		—		—		2,230
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	53,782		176,556		165,268		147,719		150,221		134,165		796		1,031		829,538



Multifamily
1-6 Pass	711,009		324,246		100,572		32,693		166,937		92,255		380		—		1,428,092
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	711,009		324,246		100,572		32,693		166,937		92,255		380		—		1,428,092



Multifamily construction
1-6 Pass	12,182		21,366		45,256		11,823		—		—		—		—		90,627
7- Special Mention	—		—		—		—		24,702		—		—		—		24,702
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	12,182		21,366		45,256		11,823		24,702		—		—		—		115,329



Commercial real estate construction
1-6 Pass	3,963		—		2,104		14,721		—		614		5,883		—		27,285
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	3,963		—		2,104		14,721		—		614		5,883		—		27,285



Single family construction
1-6 Pass	121,233		47,539		14,055		—		—		600		75,743		—		259,170
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	121,233		47,539		14,055		—		—		600		75,743		—		259,170



Single family construction to permanent
Current	62,955		72,825		15,443		688		—		—		—		—		151,911
Past due:
30-59 days	—		—		—		—		—		—		—		—		—
60-89 days	—		—		—		—		—		—		—		—		—
90+ days	—		—		—		—		—		—		—		—		—
Total	62,955		72,825		15,443		688		—		—		—		—		151,911



Owner occupied commercial real estate
1-6 Pass	48,647		60,872		58,582		85,275		98,046		50,596		—		4,354		406,372
7- Special Mention	—		—		5,977		3,529		—		—		—		69		9,575
8 - Substandard	—		19,407		1,111		10,750		17,122		2,919		—		—		51,309
Total	48,647		80,279		65,670		99,554		115,168		53,515		—		4,423		467,256



Commercial business
1-6 Pass	345,540		63,020		47,710		22,556		18,411		14,972		76,218		2,577		591,004
7- Special Mention	—		10,837		2,058		6,653		—		—		3,975		166		23,689
8 - Substandard	—		5,923		11,327		2,338		1,891		1,001		8,438		112		31,030
Total	345,540		79,780		61,095		31,547		20,302		15,973		88,631		2,855		645,723



Total commercial portfolio	$	1,359,311	$	802,591	$	469,463	$	338,745	$	477,330	$	297,122	$	171,433	$	8,309	$	3,924,304

The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:


	At December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		2015 and prior		Revolving		Revolving-term		Total

CONSUMER PORTFOLIO
Single family
Current	$	174,994	$	111,143	$	154,757	$	168,412	$	59,161	$	242,444	$	—	$	—	$	910,911
Past due:
30-59 days	—		570		—		318		—		390		—		—		1,278
60-89 days	—		—		—		—		—		—		—		—		—
90+ days	824		335		405		386		—		984		—		—		2,934
Total (1)	175,818		112,048		155,162		169,116		59,161		243,818		—		—		915,123




Home equity and other
Current	1,878		1,230		1,311		1,363		431		5,126		384,005		8,147		403,491
Past due:
30-59 days	98		22		—		—		—		11		66		31		228
60-89 days	—		13		—		—		—		—		129		—		142
90+ days	—		9		—		—		275		24		584		—		892
Total	1,976		1,274		1,311		1,363		706		5,161		384,784		8,178		404,753



Total consumer portfolio	$	177,794	$	113,322	$	156,473	$	170,479	$	59,867	$	248,979	$	384,784	$	8,178	$	1,319,876
Total LHFI	$	1,537,105	$	915,913	$	625,936	$	509,224	$	537,197	$	546,101	$	556,217	$	16,487	$	5,244,180

(1) Includes $7.1 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Collateral Dependent Loans

The following table presents the amortized cost basis of collateral-dependent loans by loan sub-class and collateral type:


	At June 30, 2021
(in thousands)	Land		1-4 Family		Non-residential real estate		Other non-real estate		Total










Commercial and industrial loans
Owner occupied commercial real estate	$	1,789	$	—	$	3,120	$	—	$	4,909
Commercial business	1,537		545		—		2,623		4,705
Total	3,326		545		3,120		2,623		9,614
Consumer loans
Single family	—		2,361		—		—		2,361
Home equity loans and other	—		904		—		—		904
Total	—		3,265		—		—		3,265
Total collateral-dependent loans	$	3,326	$	3,810	$	3,120	$	2,623	$	12,879


	At December 31, 2020
(in thousands)	Land		1-4 Family		Non-residential real estate		Other non-real estate		Total










Commercial and industrial loans
Owner occupied commercial real estate	$	1,789	$	—	$	3,133	$	—	$	4,922
Commercial business	1,787		545		—		2,882		5,214
Total	3,576		545		3,133		2,882		10,136
Consumer loans
Single family	—		2,457		—		—		2,457

Total	—		2,457		—		—		2,457
Total collateral-dependent loans	$	3,576	$	3,002	$	3,133	$	2,882	$	12,593

Nonaccrual and Past Due Loans

The following table presents nonaccrual status for loans:


	At June 30, 2021					At December 31, 2020
(in thousands)		Nonaccrual with no related ACL		Total Nonaccrual		Nonaccrual with no related ACL		Total Nonaccrual










Commercial and industrial loans
Owner occupied commercial real estate		$	4,910	$	4,910	$	4,922	$	4,922
Commercial business		2,488		8,890		3,100		9,183
Total		7,398		13,800		8,022		14,105
Consumer loans
Single family		$	1,929	$	4,944	$	2,173	$	4,883
Home equity and other		908		2,091		2		1,734
Total		2,837		7,035		2,175		6,617
Total nonaccrual loans		$	10,235	$	20,835	$	10,197	$	20,722

The following tables present an aging analysis of past due loans by loan portfolio segment and loan sub-class:


	At June 30, 2021
	Past Due and Still Accruing
(in thousands)	30-59 days			60-89 days			90 days or more				Nonaccrual			Total past due and nonaccrual (3)			Current			Total loans

Commercial real estate loans
Non-owner occupied commercial real estate	$	—		$	—		$	—			$	—		$	—		$	761,754		$	761,754
Multifamily	—			—			—				—			—			1,966,995			1,966,995
Construction/land development
Multifamily construction	—			—			—				—			—			43,300			43,300
Commercial real estate construction	—			—			—				—			—			29,956			29,956
Single family construction	—			—			—				—			—			276,206			276,206
Single family construction to permanent	—			—			—				—			—			134,820			134,820
Total	—			—			—				—			—			3,213,031			3,213,031
Commercial and industrial loans
Owner occupied commercial real estate	—			—			—				4,910			4,910			452,594			457,504
Commercial business	—			—			—				8,890			8,890			566,232			575,122
Total	—			—			—				13,800			13,800			1,018,826			1,032,626
Consumer loans
Single family	1,461			796			9,731			(2)	4,944			16,932			795,355			812,287			(1)
Home equity and other	6			7			—				2,091			2,104			332,475			334,579
Total	1,467			803			9,731				7,035			19,036			1,127,830			1,146,866
Total loans	$	1,467		$	803		$	9,731			$	20,835		$	32,836		$	5,359,687		$	5,392,523
%	0.03		%	0.01		%	0.18		%		0.39		%	0.61		%	99.39		%	100.00		%


	At December 31, 2020
	Past Due and Still Accruing
(in thousands)	30-59 days			60-89 days			90 days or more				Nonaccrual			Total past due and nonaccrual (3)			Current			Total loans

Commercial real estate loans
Non-owner occupied commercial real estate	$	—		$	—		$	—			$	—		$	—		$	829,538		$	829,538
Multifamily	—			—			—				—			—			1,428,092			1,428,092
Construction and land development
Multifamily construction	—			—			—				—			—			115,329			115,329
Commercial real estate construction	—			—			—				—			—			27,285			27,285
Single family construction	—			—			—				—			—			259,170			259,170
Single family construction to permanent	—			—			—				—			—			151,911			151,911
Total	—			—			—				—			—			2,811,325			2,811,325
Commercial and industrial loans
Owner occupied commercial real estate	—			—			—				4,922			4,922			462,334			467,256
Commercial business	—			—			—				9,183			9,183			636,540			645,723
Total	—			—			—				14,105			14,105			1,098,874			1,112,979
Consumer loans
Single family	2,161			418			11,476			(2)	4,883			18,938			896,185			915,123			(1)
Home equity and other	228			135			—				1,734			2,097			402,656			404,753
Total	2,389			553			11,476				6,617			21,035			1,298,841			1,319,876
Total loans	$	2,389		$	553		$	11,476			$	20,722		$	35,140		$	5,209,040		$	5,244,180
%	0.05		%	0.01		%	0.22		%		0.40		%	0.67		%	99.33		%	100.00		%

(1)Includes $5.2 million and $7.1 million of loans at June 30, 2021 and December 31, 2020, respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in our consolidated income statements.

(2)FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss.

(3)Includes loans whose repayments are insured by the FHA or guaranteed by the VA or SBA of $13.3 million and $14.7 million at June 30, 2021 and December 31, 2020, respectively.

The following tables present information about troubled debt restructuring ("TDR") activity for the periods indicated:


	Quarter Ended June 30, 2021					Six Months Ended June 30, 2021
(dollars in thousands)	Number of loan modifications	Recorded investment		Related charge- offs		Number of loan modifications	Recorded investment		Related charge- offs

























Consumer loans
Single family
Interest rate reduction	3	$	807	$	—	5	$	1,315	$	—
Payment restructure	2	1,140		—		2	1,140
	5	1,947		—		7	2,455		—



Total loans
Interest rate reduction	3	807		—		5	1,315		—
Payment restructure	2	1,140		—		2	1,140		—
Total	5	$	1,947	$	—	7	$	2,455	$	—


	Quarter Ended June 30, 2020					Six Months Ended June 30, 2020
(dollars in thousands)	Number of loan modifications	Recorded investment		Related charge- offs		Number of loan modifications	Recorded investment		Related charge- offs












Commercial and industrial loans
Owner occupied commercial real estate

Payment restructure	—	$	—	$	—	1	$	678	$	—
Commercial business

Payment restructure	—	—		—		1	1,125		—

Total commercial and industrial

Payment restructure	—	—		—		2	1,803		—
Total	—	—		—		2	1,803		—
Consumer loans
Single family
Interest rate reduction	4	1,023		—		15	3,236		—
Payment restructure	6	1,202		—		9	1,656		—
Total	10	2,225		—		24	4,892		—
Total loans
Interest rate reduction	4	1,023		—		15	3,236		—
Payment restructure	6	1,202		—		11	3,459		—

Total	10	$	2,225	$	—	26	$	6,695	$	—

A TDR loan is considered re-defaulted when it becomes doubtful that the objectives of the modifications will be met, generally when a consumer loan TDR becomes 60 days or more past due on principal or interest payments or when a commercial loan TDR becomes 90 days or more past due on principal or interest payments. The following table presents loans that were modified as TDRs within the previous 12 months and subsequently re-defaulted for the periods indicated:


	Quarter Ended June 30,
	2021			2020
(dollars in thousands)	Number of loan relationships that re-defaulted	Recorded investment		Number of loan relationships that re-defaulted	Recorded investment











Consumer loans - single family	1	$	123	4	$	918


Total	1	$	123	4	$	918


	Six Months Ended June 30,
	2021			2020
(dollars in thousands)	Number of loan relationships that re-defaulted	Recorded investment		Number of loan relationships that re-defaulted	Recorded investment






Commercial and industrial loans
Owner occupied commercial real estate	1	$	678	—	$	—

	1	678		—	—
Consumer loans
Consumer loans - single family	5	$	1,342	10	$	2,199

	5	1,342		10	2,199
Total	6	$	2,020	10	$	2,199

The CARES Act provides temporary relief from the accounting and disclosure requirements for TDRs for certain loan modifications that are the result of a hardship that is related, either directly or indirectly, to the COVID-19 pandemic. In addition, interagency guidance issued by federal banking regulators and endorsed by the FASB staff has indicated that borrowers who receive relief are not experiencing financial difficulty if they meet the following qualifying criteria:

•The modification is in response to the National Emergency related to the COVID pandemic;

•The borrower was current at the time the modification program was implemented; and

•The modification is short-term

We have elected to apply temporary relief under Section 4013 of the CARES Act to certain eligible modifications and will not treat qualifying loan modifications as TDRs for accounting or disclosure purposes. Additionally, eligible short-term loan modifications subject to the practical expedient in the interagency guidance will not be treated as TDRs for accounting or disclosure purposes if they qualify.

As of June 30, 2021, excluding any SBA guaranteed loans or single family loans that are guaranteed by FHA or VA, the Company has outstanding balances of $56 million on 133 loans that were approved for and are still in forbearance under this program.