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Loans and Lease Finance Receivables and Allowance for Loan Losses
 9 Months Ended
Sep. 30, 2019
Receivables [Abstract]  
Loans and Lease Finance Receivables and Allowance for Loan Losses
6.
LOANS AND LEASE FINANCE RECEIVABLES AND ALLOWANCE FOR LOAN LOSSES
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Prior to April 1, 2019, our loans and lease finance receivables consisted of purchase credit impaired (“PCI”) loans associated with the acquisition of San Joaquin Bank (SJB”) on October 16, 2009, and loans and lease finance receivables excluding PCI loans
(“Non-PCI
loans”). The PCI loans are more fully discussed in Note 3 –
Summary of Significant Accounting Policies
, included in our Annual Report on Form
10-K
for the year ended December 31, 2018. At September 30, 2019 and December 31, 2018, the remaining discount associated with the PCI loans was zero and our total gross PCI loan portfolio represented less than 0.2% of total gross loans and leases at September 30, 2019 and December 31, 2018.
Beginning with June
 30, 2019, PCI loans were accounted for and combined with
Non-PCI
loans and were reflected in total loans and lease finance receivables.
The following table provides a summary of the Company’s total loans and lease finance receivables by type.
 
 
 
                                 
 
September 30, 2019
    
December 31, 2018
 
 Total Loans
and Leases
   
Non-PCI
 Loans
and Leases
 
  
PCI Loans
 
  
Total Loans
and Leases
 
(Dollars in thousands)
 
Commercial and industrial
  $
921,678
 
     $
1,002,209
 
     $
519
 
  
 
$
 
1,002,728
 
SBA
   
319,571
 
    
350,043
 
    
1,258
 
    
351,301
 
Real estate:
   
 
   
   
   
 
Commercial real estate
   
5,375,668
 
    
5,394,229
 
    
14,407
 
    
5,408,636
 
Construction
   
119,931
 
    
122,782
 
    
-
 
    
122,782
 
SFR mortgage
   
278,644
 
    
296,504
 
    
145
 
    
296,649
 
Dairy & livestock and agribusiness
   
311,229
 
    
393,843
 
    
700
 
    
394,543
 
Municipal lease finance receivables
   
54,468
 
    
64,186
 
    
-
 
    
64,186
 
Consumer and other loans
   
117,128
 
    
128,429
 
    
185
 
    
128,614
 
       
 
      
 
      
 
      
 
Gross loans
   
7,498,317
 
    
7,752,225
 
    
17,214
 
    
7,769,439
 
Less: Deferred loan fees, net
   
(3,866
)
    
(4,828
)
 
    
-
 
    
(4,828
)
       
 
      
 
      
 
      
 
Gross loans, net of deferred loan fees
   
7,494,451
 
    
7,747,397
 
    
17,214
 
    
7,764,611
 
Less: Allowance for loan losses
   
(68,672
)
    
(63,409
)
 
    
(204
)
 
    
(63,613
)
       
 
      
 
      
 
      
 
Total loans and lease finance receivables
   $
7,425,779
 
     $
7,683,988
 
     $
17,010
 
    $
 
7,700,998
 
       
 
      
 
      
 
      
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of September 30, 2019, 77.01% of the Company’s total gross loan portfolio consisted of real estate loans,
 
with commercial real estate loans representing
71.69% of
total loans
. Substantially all of the Company’s real estate loans and construction loans are secured by real properties located in California. As of September 30, 2019, $245.6 million, or 4.57% of the total commercial real estate loans included loans secured by farmland, compared to $231.0 million, or 4.27%, at December 31, 2018. The loans secured by farmland included $130.4 million for loans secured by dairy & livestock land and $115.1 million for loans secured by agricultural land at September 30, 2019, compared to $126.9 million for loans secured by dairy & livestock land and $104.1 million for loans secured by agricultural land at December 31, 2018. As of September 30, 2019, dairy & livestock and agribusiness loans of $311.2 million were comprised of $251.3 million for dairy & livestock loans and $60.0 million for agribusiness loans, compared to $340.5 million for dairy & livestock loans and $54.0 million for agribusiness loans at December 31, 2018.
At September 30, 2019, the Company held approximately $3.83 billion of total fixed rate loans.
At September 30, 2019 and December 31, 2018, loans totaling $5.91 billion and $5.71 billion, respectively, were pledged to secure the borrowings and available lines of credit from the FHLB and the Federal Reserve Bank.
There were no outstanding loans
held-for-sale
as of September 30, 2019 and December 31, 2018.
Credit Quality Indicators
An important element of our approach to credit risk management is our loan risk rating system. The originating officer assigns each loan an initial risk rating, which is reviewed and confirmed or changed, as appropriate, by credit management. Approvals are made based upon the amount of inherent credit risk specific to the transaction and are reviewed for appropriateness by senior line and credit management personnel. Credits are monitored by line and credit management personnel for deterioration or improvement in a borrower’s financial condition, which would impact the ability of the borrower to perform under the contract. Risk ratings are adjusted as necessary.
Loans are risk rated into the following categories (Credit Quality Indicators): Pass, Special Mention, Substandard, Doubtful and Loss. Each of these groups is assessed for the proper amount to be used in determining the adequacy of our allowance for losses. These categories can be described as follows:
Pass — These loans, including loans on the Bank’s internal watch list, range from minimal credit risk to lower than average, but still acceptable, credit risk. Watch list loans usually require more than normal management attention. Loans on the watch list may involve borrowers with adverse financial trends, higher debt/equity ratios, or weaker liquidity positions, but not to the degree of being considered a defined weakness or problem loan where risk of loss may be apparent.
Special Mention — Loans assigned to this category have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in the deterioration of the repayment prospects for the asset or the Company’s credit position at some future date. Special mention assets are not adversely classified and do not expose the Company to sufficient risk to warrant adverse classification.
Substandard — Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledged, if any. Assets so classified must have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. Substandard loans are characterized by the distinct possibility that the Company will sustain some loss if deficiencies are not corrected.
Doubtful — Loans classified as doubtful have all the weaknesses inherent in those classified substandard with the added characteristic that the weaknesses make collection or the liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable.
Loss — Loans classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this asset with insignificant value even though partial recovery may be affected in the future.
The following table summarizes loans by type, according to our internal risk ratings
as of
the
dates
presented.
     
                           
      
                           
      
                           
      
                           
      
                           
  
 
September 30, 2019
 
Pass
 
Special
Mention
 
Substandard (1)
 
Doubtful &
 
Loss
 
Total
 
 
(Dollars in thousands)
Commercial and industrial
 
  $
892,865
 
 
  $
24,456
 
 
  $
4,357
 
 
  $
-
 
 
  $
921,678
 
SBA
 
 
296,127
 
 
 
13,764
 
 
 
9,680
 
 
 
-
 
 
 
319,571
 
Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
 
1,987,168
 
 
 
83,305
 
 
 
22,618
 
 
 
-
 
 
 
2,093,091
 
Non-owner
occupied
 
 
3,269,174
 
 
 
12,663
 
 
 
740
 
 
 
-
 
 
 
3,282,577
 
Construction
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Speculative
 
 
105,636
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
105,636
 
Non-speculative
 
 
14,295
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
14,295
 
SFR mortgage
 
 
275,069
 
 
 
2,053
 
 
 
1,522
 
 
 
-
 
 
 
278,644
 
Dairy & livestock and agribusiness
 
 
247,554
 
 
 
43,585
 
 
 
20,090
 
 
 
-
 
 
 
311,229
 
Municipal lease finance receivables
 
 
53,998
 
 
 
470
 
 
 
-
 
 
 
-
 
 
 
54,468
 
Consumer and other loans
 
 
115,242
 
 
 
845
 
 
 
1,041
 
 
 
-
 
 
 
117,128
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total gross loans
 
  $
7,257,128
 
 
  $
181,141
 
 
  $
60,048
 
 
  $
-
 
 
  $
7,498,317
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  (1) Includes $18.0 million of classified loans acquired from CB in the third quarter of 2018.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
December 31, 2018 (1)
 
Pass
 
Special
Mention
 
Substandard (2)
 
Doubtful &
Loss
 
Total
 
  
(Dollars in thousands)
Commercial and industrial
    $
961,909
   
 
 
$
 
 
29,358
   
 
 
$
  10,942
    $
 
 
 
 
-
 
 
 
$
 
 
1,002,209
 
SBA
   
336,033
     
7,375
     
6,635
     
-
   
350,043
 
Real estate:
   
     
     
     
   
 
Commercial real estate
   
     
     
     
   
 
Owner occupied
   
2,008,169
     
95,841
     
13,980
     
-
   
2,117,990
 
Non-owner
occupied
    
3,260,822
     
9,938
     
5,479
     
-
   
3,276,239
 
Construction
   
     
     
     
   
 
Speculative
   
118,233
     
-
     
-
     
-
   
118,233
 
Non-speculative
   
4,549
     
-
     
-
     
-
   
4,549
 
SFR mortgage
   
289,607
     
3,310
     
3,587
     
-
   
296,504
 
Dairy & livestock and agribusiness
   
350,044
     
34,586
     
9,213
     
-
   
393,843
 
Municipal lease finance receivables
   
63,650
     
536
     
-
     
-
   
64,186
 
Consumer and other loans
   
126,085
     
1,263
     
1,081
     
-
   
128,429
 
Total gross loans
    $
7,519,101
      $
182,207
   
 
 
$
50,917
    $
-
  $
7,752,225
 
  (1) Excludes PCI loans of $17.2 million as of December 31, 2018, of which $15.8 million were rated pass, $1.2 million were rated special mention, $224,000 were rated substandard, and zero were rated doubtful & loss.
  (2) Includes $19.0 million of classified loans acquired from CB in the third quarter of 2018.
Allowance for Loan Losses (“ALLL”)
The Bank’s Audit and Director Loan Committees provide Board oversight of the ALL
L
process and approve the ALLL methodology on a quarterly basis.
Our methodology for assessing the appropriateness of the allowance is conducted on a regular basis and considers the Bank’s overall loan portfolio. Refer to Note 3 –
Summary of Significant Accounting Policies
of the 2018 Annual Report on Form
10-K
for the year ended December 31, 2018 for a more detailed discussion concerning the allowance for loan losses.
Management believes that the ALLL was appropriate at September 30, 2019 and December 31, 2018. No assurance can be given that economic conditions which adversely affect the Company’s service areas or other circumstances will not be reflected in increased provisions for loan losses in the future.
The following tables present the balance and activity related to the allowance for loan losses for
held-for-investment
loans by type for the periods presented.
  
For the Three Months Ended September 30, 2019
 
  
 Ending Balance 
June 30,
2019
 
Charge-offs
 
Recoveries
 
Provision for

(Recapture of)
Loan Losses
 
 Ending Balance 
September 30,
 
2019
 
 
(Dollars in thousands)
 
Commercial and industrial
    $
 
 
 
 
 
 
 
 
 
 
 
 
 
 
7,857
 
 
     $
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  -
    
       $
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  94
      $
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  287
   
$
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  8,238
 
 
SBA
   
1,119
     
(65
)    
-
    
      
412
     
1,466
 
 
Real estate:
   
     
     
     
     
 
 
Commercial real estate
   
48,287
     
-
    
      
-
    
      
624
     
48,911
 
 
Construction
   
871
     
-
    
      
3
     
55
     
929
 
 
SFR mortgage
   
2,323
     
-
    
      
8
     
44
     
2,375
 
 
Dairy & livestock and agribusiness
   
5,341
     
-
    
      
-
    
      
88
     
5,429
 
 
Municipal lease finance receivables
   
726
     
-
    
      
-
    
      
(64
)    
662
 
 
Consumer and other loans
   
608
     
(3
)    
3
     
54
     
662
 
 
                                         
 
  Total allowance for loan losses
    $
67,132
      $
(68
)     $
108
      $
1,500
      
$
68,672
 
 
 
                                         
 
 
For the Three Months Ended September 30, 2018
 
 
Ending Balance

June 30,
2018
 
 
Charge-offs
 
 
Recoveries
 
 
Provision for

(Recapture of)
Loan Losses
 
 
Ending Balance

September 30,
2018
 
 
(Dollars in thousands)
 
Commercial and industrial
 
 
 
$
6,970
      $
-    
       $
44
 
     $
477
 
     $
7,491
 
SBA
   
841
     
(257
 )    
5
 
    
369
 
    
958
 
Real estate:
   
     
     
 
    
 
    
 
Commercial real estate
   
42,597
     
-    
      
-    
 
    
(1,056
)
    
41,541
 
Construction
   
1,003
     
-    
      
15
 
    
115
 
    
1,133
 
SFR mortgage
   
2,155
     
-    
      
-    
 
    
(30
)
    
2,125
 
Dairy & livestock and
 
agribusiness
   
4,351
     
-    
      
-​​​​​​​    
 
    
673
 
    
5,024
 
Municipal lease finance
 
receivables
   
808
     
-    
      
-    
 
    
7
 
    
815
 
Consumer and other loans
   
642
     
(1
 )    
118
 
    
(44
)
    
715
 
PCI loans
   
216
     
-    
      
-    
 
    
(11
)
    
205
 
Total allowance for loan
 
losses
    $
 
59,583
      $
(258
 )     $
182
 
     $
500
 
     $
60,007
 
 
 
 
 
 
 
 
 
 
 
For the Nine Months Ended September 30, 2019
 
 
Ending Balance
December 31,
2018
 
 
 
Charge-offs
 
 
Recoveries
 
 
Provision for

(Recapture of)

Loan Losses
 
 
Ending Balance
September 30,
 
2019
 
 
(Dollars in thousands)
 
Commercial and industrial
    $
 
7,528
      $
(48
 )     $
253
 
     $
 
505
 
     $
 
8,238 
  
SBA
   
1,078
     
(295
 )    
9
 
    
674
 
    
1,466 
  
Real estate:
   
     
     
 
    
 
    
 
Commercial real estate
   
45,097
     
-
    
      
-    
 
    
3,814
 
    
48,911 
  
Construction
   
981
     
-    
      
9
 
    
(61
)
    
929 
  
SFR mortgage
   
2,197
     
-    
      
191
 
    
(13
)
    
2,375 
  
Dairy & livestock and
 
agribusiness
   
5,225
     
(78
 )    
19
 
    
263
 
    
5,429 
  
Municipal lease finance receivables
 
 
775
 
 
 
-    
 
 
 
-    
 
 
 
(113
 )
 
 
662
 
Consumer and other loans
   
732
     
(7
 )    
6
 
 
    
(69
)
    
662 
  
Total allowance for loan
 
losses
    $
63,613
      $
(428
 )     $
487 
 
     $
5,000
 
     $
68,672 
  
     
  
For the Nine Months Ended September 30, 2018
 
Ending Balance
December 31,
2017
 
Charge-offs
 
Recoveries
 
  
(Recapture of)
Provision for
Loan Losses
 
  
Ending Balance
September 30,
 
2018
 
(Dollars in thousands)
Commercial and industrial
    $
7,280
      $
-    
       $
81
 
     $
130
 
     $
7,491
 
SBA
   
869
     
(257
 )    
15
 
    
331
 
    
958
 
Real estate:
   
     
     
 
    
 
    
 
Commercial real estate
   
41,722
     
-    
      
-    
 
    
(181
)
 
    
41,541
 
Construction
   
984
     
-    
      
1,945
 
    
(1,796
)
    
1,133
 
SFR mortgage
   
2,112
     
-    
      
-    
 
    
13
 
    
2,125
 
Dairy & livestock and
 
agribusiness
   
4,647
     
-    
      
19
 
    
358
 
    
5,024
 
Municipal lease finance receivables
 
 
851
 
 
 
-    
  
 
 
-    
 
 
 
(36
 )
 
 
815
 
Consumer and other loans
   
753
     
(10
 )    
129
 
    
(157
)
    
715
 
PCI loans
   
367
     
-    
      
-    
 
    
(162
)
    
205
 
Total allowance for loan losses
 
   $
59,585
 
 
   $
(267
 )
 
   $
2,189
 
 
   $
(1,500
)
 
   $
60,007
 
  
The following tables present the recorded investment in loans
held-for-investment
and the related allowance for loan losses by loan type, based on the Company’s methodology for determining the allowance​​​​​​​ for loan losses for the periods presented. Acquired loans are also supported by a credit discount established through the determination of fair value for the acquired loan portfolio.
     
                              
      
                              
      
                              
      
                              
  
 
September 30, 2019
 
 
Recorded Investment in Loans
 
 
Allowance for Loan Losses
 
 
Individually
 Evaluated for 
Impairment
 
 
Collectively
 Evaluated for 
Impairment
 
 
Individually
  Evaluated for  
Impairment
 
 
Collectively
  Evaluated for  
Impairment
 
 
(Dollars in thousands)
 
Commercial and industrial
 
  $
1,638
 
 
  $
920,040
 
 
  $
254
 
 
  $
7,984
 
SBA
 
 
3,248
 
 
 
316,323
 
 
 
286
 
 
 
1,180
 
Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial real estate
 
 
1,500
 
 
 
5,374,168
 
 
 
-
 
 
 
48,911
 
  Construction
 
 
-
 
 
 
119,931
 
 
 
-
 
 
 
929
 
  SFR mortgage
 
 
3,009
 
 
 
275,635
 
 
 
-
 
 
 
2,375
 
Dairy & livestock and agribusiness
 
 
-
 
 
 
311,229
 
 
 
-
 
 
 
5,429
 
Municipal lease finance receivables
 
 
-
 
 
 
54,468
 
 
 
-
 
 
 
662
 
Consumer and other loans
 
 
385
 
 
 
116,743
 
 
 
-
 
 
 
662
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Total
 
  $
9,780
 
 
  $
7,488,537
 
 
  $
540
 
 
  $
68,132
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
September 30, 2018
 
Recorded Investment in Loans
 
Allowance for Loan Losses
 
Individually
 Evaluated for 
Impairment
 
Collectively
 Evaluated for 
Impairment
 
Acquired with
Deterioriated
 Credit Quality 
 
Individually
  Evaluated for  
Impairment
 
Collectively
  Evaluated for  
Impairment
 
Acquired with
Deterioriated
 Credit Quality 
 
 
(Dollars in thousands)
Commercial and industrial
 
  $
3,168
 
 
  $
1,018,738
 
 
  $
-
 
 
  $
 -
 
 
  $
7,491
 
 
  $
-
 
SBA
 
 
3,593
 
 
 
353,459
 
 
 
-
 
 
 
-
 
 
 
958
 
 
 
-
 
Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Commercial real estate
 
 
6,348
 
 
 
5,262,392
 
 
 
-
 
 
 
-
 
 
 
41,541
 
 
 
-
 
  Construction
 
 
-
 
 
 
123,274
 
 
 
-
 
 
 
-
 
 
 
1,133
 
 
 
-
 
  SFR mortgage
 
 
5,492
 
 
 
287,024
 
 
 
-
 
 
 
13
 
 
 
2,112
 
 
 
-
 
Dairy & livestock and agribusiness
 
 
775
 
 
 
303,823
 
 
 
-
 
 
 
-
 
 
 
5,024
 
 
 
-
 
Municipal lease finance receivables
 
 
-
 
 
 
67,581
 
 
 
-
 
 
 
-
 
 
 
815
 
 
 
-
 
Consumer and other loans
 
 
807
 
 
 
133,989
 
 
 
-
 
 
 
70
 
 
 
645
 
 
 
-
 
PCI loans
 
 
-
 
 
 
-
 
 
 
17,260
 
 
 
-
 
 
 
-
 
 
 
205
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Total
 
  $
20,183
 
 
  $
7,550,280
 
 
  $
17,260
 
 
  $
83
 
 
  $
59,719
 
 
  $
205
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Past Due and Nonperforming Loans
We seek to manage asset quality and control credit risk ​​​​​​​through diversification of the loan portfolio and the application of policies designed to promote sound underwriting and loan monitoring practices. The Bank’s Credit Management Division is in charge of monitoring asset quality, establishing credit policies and procedures and enforcing the consistent application of these policies and procedures across the Bank. Reviews of nonperforming, past due loans and larger credits, designed to identify potential charges to the allowance for loan losses, and to determine the adequacy of the allowance, are conducted on an ongoing basis. These reviews consider such factors as the financial strength of borrowers and any guarantors, the value of the applicable collateral, loan loss experience, estimated loan losses, growth in the loan portfolio, prevailing economic conditions and other factors. Refer to Note 3 –
Summary of Significant Accounting Policies
, included in our Annual Report on Form
10-K
for the year ended December 31, 2018, for additional discussion concerning the Bank’s policy for past due and nonperforming loans.
A loan is reported as a TDR when the Bank grants a concession(s) to a borrower experiencing financial difficulties that the Bank would not otherwise consider. Examples of such concessions include a reduction in the interest rate, deferral of principal or accrued interest, extending the payment due dates or loan maturity date(s), or providing a lower interest rate than would be normally available for new debt of similar risk. As a result of one or more of these concessions, restructured loans are classified as impaired. Impairment reserves on
non-collateral
dependent restructured loans are measured by comparing the present value of expected future cash flows on the restructured loans discounted at the interest rate of the original loan agreement to the carrying value of the loan. These impairment reserves are recognized as a specific component to be provided for in the allowance for loan losses.
When we identify a loan as impaired, we measure the loan for potential impairment using discounted cash flows, unless the loan is determined to be collateral dependent. In these cases, we use the current fair value of collateral, less selling costs. Generally, the determination of fair value is established through obtaining external appraisals of the collateral.
The following tables present the recorded investment in, and the aging of, past due and nonaccrual loans by type of loans
as of
the
date
s presented. 
  
September 30, 2019
 
30-59
 Days
Past Due
 
60-89
 Days
Past Due
 
 
Total Past Due
 

and Accruing
 
Nonaccrual
(1) (3)
 (4)
  
Current
 
Total Loans
  and Financing  
Receivables
 
  
(Dollars in thousands)
Commercial and industrial
    $
 
  756
      $
 
 
 
  -
      $
  756
      $
 
 
   1,550
      $
 
  919,372
      $
 
 
 
  921,678
 
SBA
   
-
     
303
     
303
     
2,706
     
316,562
     
319,571
 
Real estate:
   
     
     
     
     
     
 
 Commercial real estate
   
     
     
     
     
     
 
  Owner occupied
   
-
     
-
     
-
     
494
     
2,092,597
     
2,093,091
 
  
Non-owner
occupied
    
368
     
-
     
368
     
589
     
3,281,620
     
3,282,577
 
 Construction
   
     
     
     
     
     
 
  Speculative (2)
   
-
     
-
     
-
     
-
     
105,636
     
105,636
 
  
Non-speculative
   
-
     
-
     
-
     
-
     
14,295
     
14,295
 
 
SFR mortgage
   
-
     
-
     
-
     
888
     
277,756
     
278,644
 
Dairy & livestock and
 
agribusiness
   
-
     
-
     
-
     
-
     
311,229
     
311,229
 
Municipal lease finance
 
receivables
   
-
     
-
     
-
     
-
     
54,468
     
54,468
 
Consumer and other loans
   
-
     
-
     
-
     
385
     
116,743
     
117,128
 
                                                 
 Total gross loans
    $
         
1,124
      $
         303
      $
         1,427
      $
         6,612
      $
     
7,490,278
      $
   7,498,317
 
  (1) As of
September
 30, 2019, $1.0 million of nonaccruing loans were current, $661,000 were
30-59
days past due, $1.7 million were
60-89
days past due
,
and $3.3 million were 90+ days past due.
  (2) Speculative construction loans are generally for properties where there is no identified buyer or renter.
  (3) Includes $4.5 million of nonaccrual loans acquired from CB in the third quarter of 2018.
 
(4)
Excludes $1.6 million of guaranteed portion of nonaccrual SBA loans that are in process of collection.
 
 
December 31, 2018 (1)
 
  
30-59
 Days
Past Due
 
60-89
 Days
Past Due
 
 Total Past Due 
and Accruing
 
Nonaccrual
(2) (4)
 
Current
 
Total Loans
  and Financing  
Receivables
 
  
(Dollars in thousands)
Commercial and industrial
    $
820
      $
89
      $
909
      $
7,490
      $
993,810
      $
1,002,209
 
SBA
   
1,172
     
135
     
1,307
     
2,892
     
345,844
     
350,043
 
Real estate:
   
     
     
     
     
     
 
 Commercial real estate
   
     
     
     
     
     
 
  Owner occupied
   
2,439
     
350
     
2,789
     
589
     
2,114,612
     
2,117,990
 
  
Non-owner
occupied
    
-
     
-
     
-
     
5,479
     
3,270,760
     
3,276,239
 
 Construction
   
     
     
     
     
     
 
  Speculative (3)
   
-
     
-
     
-
     
-
     
118,233
     
118,233
 
  
Non-speculative
   
-
     
-
     
-
     
-
     
4,549
     
4,549
 
 SFR mortgage
   
-
     
285
     
285
     
2,937
     
293,282
     
296,504
 
Dairy & livestock and agribusiness
   
-
     
-
     
-
     
78
     
393,765
     
393,843
 
Municipal lease finance receivables
   
-
     
-
     
-
     
-
     
64,186
     
64,186
 
Consumer and other loans
   
-
     
-
     
-
     
486
     
127,943
     
128,429
 
                                                 
 
 Total gross loans
    $
         4,431
      $
         859
      $
 5,290
      $
       19,951
      $
 
    7,726,984
      $
 7,752,225
 
  (1) Excludes PCI loans.
  (2) As of December 31, 2018, $2.3 million of nonaccruing loans were current, $33,000 were
30-59
days past due, $57,000 were
60-89
days past due and $17.6 million were 90+ days past due.
  (3) Speculative construction loans are generally for properties where there is no identified buyer or renter.
  (4) Includes $12.3 million of nonaccrual loans acquired from CB in the third quarter of 2018.
Impaired Loans
At September 30, 2019, the Company had impaired loans of $9.8 million. Impaired loans included $2.7 million of nonaccrual Small Business Administration (“SBA”) loans, $1.6 million of nonaccrual commercial and industrial loans, $1.1 million of nonaccrual commercial real estate loans, 
$888,000 of nonaccrual single-family residential (“SFR”) mortgage loans,
 
and $385,000 of nonaccrual consumer and other loans. These impaired loans included $3.4 million of loans whose terms were modified in a troubled debt restructuring, of which $249,000 were classified as nonaccrual. The remaining balance of $3.2 million consisted of 12 loans performing according to the restructured terms. The impaired loans had a specific allowance of $540,000 at September 30, 2019. At December 31, 2018, the Company had classified as impaired, loans with a balance of $23.5 million with a related allowance of $561,000.
The following tables present information ​​​​​​​for
held-for-investment
loans, individually ​​​​​​​evaluated for impairment by type of loans, as and for the periods presented.
     
                        
      
                        
      
                        
      
                        
      
                        
  
 
As of and For the Nine Months Ended
September 30, 2019
 
Recorded
Investment
 
Unpaid
Principal
Balance
 
Related
Allowance
 
Average
Recorded
Investment
 
Interest
Income
Recognized
 
 
(Dollars in thousands)
With no related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial and industrial
 
  $
1,382
 
 
  $
1,537
 
 
  $
 -
    
 
 
  $
1,560
 
 
  $
4
 
SBA
 
 
2,447
 
 
 
3,554
 
 
 
-    
 
 
 
2,606
 
 
 
31
 
Real estate:
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
Commercial real estate
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
Owner occupied
 
 
494
 
 
 
614
 
 
 
-    
 
 
 
508
 
 
 
-    
 
Non-owner
occupied
 
 
1,006
 
 
 
1,190
 
 
 
-    
 
 
 
1,052
 
 
 
21
 
Construction
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
    
 
Speculative
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Non-speculative
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
SFR mortgage
 
 
3,009
 
 
 
3,338
 
 
 
-    
 
 
 
3,059
 
 
 
62
 
Dairy & livestock and agribusiness
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Municipal lease finance receivables
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Consumer and other loans
 
 
385
 
 
 
516
 
 
 
-    
 
 
 
401
 
 
 
-    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
8,723
 
 
 
10,749
 
 
 
-    
 
 
 
9,186
 
 
 
118
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
With a related allowance recorded:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
Commercial and industrial
 
 
256
 
 
 
345
 
 
 
254
 
 
 
829
 
 
 
-    
 
SBA
 
 
801
 
 
 
816
 
 
 
286
 
 
 
816
 
 
 
-    
 
Real estate:
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
    
 
Commercial real estate
 
 
    
 
 
 
 
 
 
 
 
 
    
 
 
 
    
 
Owner occupied
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Non-owner
occupied
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Construction
 
 
    
 
 
 
    
 
 
 
    
 
 
 
 
 
 
    
 
Speculative
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Non-speculative
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
SFR mortgage
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Dairy & livestock and agribusiness
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Municipal lease finance receivables
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
Consumer and other loans
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
-    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total
 
 
1,057
 
 
 
1,161
 
 
 
540
 
 
 
1,645
 
 
 
-    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total impaired loans
 
  $
9,780
 
 
  $
11,910
 
 
  $
540
 
 
  $
10,831
 
 
  $
118
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
As of and For the Nine Months Ended
September 
30, 2018 (1)
  
Recorded

Investment
 
 
Unpaid
Principal

Balance
 
Related

Allowance
 
 
Average
Recorded

Investment
 
 
Interest
Income

Recognized
  
  
(Dollars in thousands)
With no related allowance recorded:
   
     
     
     
     
 
Commercial and industrial
 
  $
3,168
   
  $
3,829
   
  $
 -
    
    
  $
3,439
   
  $
6
 
SBA
   
3,593
     
5,779
     
-    
      
4,457
     
34
 
Real estate:
   
     
     
     
     
 
Commercial real estate
   
     
     
     
     
 
Owner occupied
   
615
     
726
     
-    
      
644
     
-    
  
Non-owner
occupied
    
5,733
     
6,385
     
-    
      
5,904
     
24
 
Construction
   
     
     
     
     
 
Speculative
   
-    
      
-    
      
-    
      
-    
      
-    
  
Non-speculative
   
-    
      
-    
      
-    
      
-    
      
-    
  
SFR mortgage
   
5,479
     
6,449
     
-    
      
5,679
     
59
 
Dairy & livestock and agribusiness
   
775
     
1,091
     
-    
      
808
     
-    
  
Municipal lease finance receivables
   
-    
      
-    
      
-    
      
-    
      
-    
  
Consumer and other loans
   
737
     
1,025
     
-    
      
867
     
-    
  
                                         
Total
   
20,100
     
25,284
     
-    
      
21,798
     
123
 
                                         
With a related allowance recorded:
   
     
     
     
     
 
Commercial and industrial
   
-    
      
-    
      
-    
      
-    
      
-    
  
SBA
   
-    
      
-    
      
-    
      
-    
      
-    
  
Real estate:
   
     
     
     
     
 
Commercial real estate
   
     
     
     
     
 
Owner occupied
   
-    
      
-    
      
-    
      
-    
      
-    
  
Non-owner
occupied
    
-    
      
-    
      
-    
      
-    
      
-    
  
Construction
   
     
     
     
     
 
Speculative
   
-    
      
-    
      
-    
      
-    
      
-    
  
Non-speculative
   
-    
      
-    
      
-    
      
-    
      
-    
  
SFR mortgage
   
13
     
13
     
13
     
13
     
-    
  
Dairy & livestock and agribusiness
   
-    
      
-    
      
-    
      
-    
      
-    
  
Municipal lease finance receivables
   
-    
      
-    
      
-    
      
-    
      
-    
  
Consumer and other loans
   
70
     
101
     
70
     
85
     
-    
  
                                         
Total
   
83
     
114
     
83
     
98
     
-    
  
                                         
Total impaired loans
 
  $
20,183
   
  $
25,398
   
  $
83
   
  $
21,896
   
  $
123
 
                                         
  (1) Excludes PCI loans.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
As of December 31, 2018 (1)
 
Recorded
Investment
 
 
Unpaid
Principal
Balance
 
Related
Allowance
 
  
(Dollars in thousands)
With no related allowance recorded:
   
     
     
 
Commercial and industrial
    $
           
 
     
7,436
      $
         
 
       
11,457
      $
        
 
    
 
 
 
 
 
 
    
 -
    
  
SBA
   
3,467
     
5,746
     
-    
  
Real estate:
   
     
     
 
Commercial real estate
   
     
     
 
Owner occupied
   
589
     
705
     
-    
  
Non-owner
occupied
    
2,808
     
4,324
     
-    
  
Construction
   
     
     
 
Speculative
   
-    
      
-    
      
-    
  
Non-speculative
   
-    
      
-    
      
-    
  
SFR mortgage
   
5,349
     
6,270
     
-    
  
Dairy & livestock and agribusiness
   
-    
      
-    
      
-    
  
Municipal lease finance receivables
   
-    
      
-    
      
-    
  
Consumer and other loans
   
418
     
526
     
-    
  
                         
Total
   
20,067
     
29,028
     
-    
  
                         
With a related allowance recorded:
   
     
     
 
Commercial and industrial
   
189
     
191
     
3
 
SBA
   
-    
      
-    
      
-    
  
Real estate:
   
     
     
 
Commercial real estate
   
     
     
 
Owner occupied
   
-    
      
-    
      
-    
  
Non-owner
occupied
    
3,143
     
3,144
     
478
 
Construction
   
     
     
 
Speculative
   
-    
      
-    
      
-    
  
Non-speculative
   
-    
      
-    
      
-    
  
SFR mortgage
   
-    
      
-    
      
-    
  
Dairy & livestock and agribusiness
   
78
     
78
     
12
 
Municipal lease finance receivables
   
-    
      
-    
      
-    
  
Consumer and other loans
   
68
     
100
     
68
 
                         
Total
   
3,478
     
3,513
     
561
 
                         
Total impaired loans
    $
23,545
      $
32,541
      $
561
 
                         
  (1) Excludes PCI loans.
The Company recognizes the
charge-off
of the impairment allowance on impaired loans in the period in which a loss is identified for collateral dependent loans. Therefore, the majority of the nonaccrual loans as of September 30, 2019, December 31, 2018 and September 30, 2018 have already been written down to the estimated net realizable value. An allowance is recorded on impaired loans for the following: nonaccrual loans where a
charge-off
is not yet processed, nonaccrual SFR mortgage loans where there is a potential modification in process, or on smaller balance
non-collateral
dependent loans.
Reserve for Unfunded Loan Commitments
The allowance for
off-balance
sheet credit exposure relates to commitments to extend credit, letters of credit and undisbursed funds on lines of credit. The Company evaluates credit risk associated with the
off-balance
sheet loan commitments at the same time
as i
t evaluates credit risk associated with the loan and lease portfolio. There was no provision or recapture of provision for unfunded loan commitments for the three and nine months ended September 30, 2019, and 2018. As of September 30, 2019 and December 31, 2018, the balance in this reserve was $9.0 million and was included in other liabilities.
Troubled Debt Restructurings (“TDRs”)
Loans that are reported as TDRs are considered impaired and
charge-off
amounts are taken on an individual loan basis, as deemed appropriate. The majority of restructured loans are loans for which the terms of repayment have been renegotiated, resulting in a reduction in interest rate or deferral of principal. Refer to Note 3 –
Summary of Significant Accounting Policies
, included in our Annual Report on Form
10-K
for the year ended December 31, 2018 for a more detailed discussion regarding TDRs.
As of September 30, 2019, there were $3.4 million of loans classified as a TDR, of which $3.2 million were performing and $249,000 were nonperforming. TDRs on accrual status are comprised of loans that were accruing interest at the time of restructuring or have demonstrated repayment performance in compliance with the restructured terms for a sustained period and for which the Company anticipates full repayment of both principal and interest. At September 30, 2019, performing TDRs were comprised of eight SFR mortgage loans of $2.1 million, one SBA loan of $542,000, one commercial real estate loan of $417,000, and two commercial and industrial loans of $88,000.
The majority of TDRs have no specific allowance allocated as any impairment amount is normally charged off at the time a probable loss is determined. We have allocated zero and $490,000 of specific allowance to TDRs as of September 30, 2019 and December 31, 2018, respectively.
The following table provides a summary of the activity related to TDRs for the periods presented
.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For the Three Months Ended
September 30,
 
For the Nine Months Ended
September 30,
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
2018 (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
2019
 
 
 
 
 
 
 
 
 
 
 
 
2018 (1)
 
 
 
 
 
 
(Dollars in thousands)
 
(Dollars in thousands)
Performing TDRs:
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
  $
3,219
 
 
  $
 4,530
 
 
  $
3,594
 
 
  $
 
 
4,809
 
New modifications
 
 
-
 
 
 
-
 
 
 
-
 
 
 
311
 
Payoffs/payments, net and other
 
 
(51
)
 
 
(777
)
 
 
(426
)
 
 
(1,367
)
TDRs returned to accrual status
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
TDRs placed on nonaccrual status
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
  $
3,168
 
 
  $
3,753
 
 
  $
3,168
 
 
  $
3,753
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Nonperforming TDRs:
 
 
 
 
 
 
 
 
 
 
 
 
Beginning balance
 
  $
263
 
 
  $
3,892
 
 
  $
3,509
 
 
  $
4,200
 
New modifications
 
 
-
 
 
 
278
 
 
 
-
 
 
 
316
 
Charge-offs
 
 
-
 
 
 
-
 
 
 
(78
)
 
 
-
 
Transfer to OREO
 
 
-
 
 
 
-
 
 
 
(2,275
)
 
 
-
 
Payoffs/payments, net and other
 
 
(14
)
 
 
(650
)
 
 
(907
)
 
 
(996
)
TDRs returned to accrual status
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
TDRs placed on nonaccrual status
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ending balance
 
  $
 
 
249
 
 
  $
3,520
 
 
  $
 
 
249
 
 
  $
3,520
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total TDRs
 
  $
3,417
 
 
  $
 
 
7,273
 
 
  $
 
 
3,417
 
 
  $
 
 
7,273
 
 
(1)
Excludes PCI loans.
 
 
There were no loans that were modified as TDRs
for
the three and nine months ended September 30, 2019.
The following tables summarize loans modified as TDRs for the periods presented.
Modifications (1)
 
For the Three Months Ended September 30, 201
8
 (2)
 
 
 
Number of
 

Loans
 
 
 
Pre-Modification

Outstanding
Recorded
Investment
 
 
 
Post-Modification
Outstanding
Recorded
Investment
 
Outstanding
Recorded
Investment at
September 30,
2018  
 
Financial Effect
Resulting From
Modifications (3)
 
 
(Dollars in thousands)
 
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
 
 
-
 
 
   $
-
 
 
 
 
$
-
 
 
 
 
$
-
 
 
 
 
$
-
 
 
Change in amortization period
 
or maturity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
Real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Commercial real estate:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Owner occupied
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
Change in amortization period
 
or maturity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
Non-owner
occupied
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
Change in amortization period
 
or maturity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
SFR mortgage:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
Change in amortization period
 
or maturity
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
-
 
 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest rate reduction
 
 
        -
 
 
 
-
 
 
 
-
 
 
 
-
 
 
 
        -
 
 
Change in amortization period
 
or maturity
 
 
1
 
 
 
278
 
 
 
278
 
 
 
272
 
 
 
-
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Total loans
 
 
1
 
 
  $
278
 
 
  $
278
 
 
  $
  272
 
 
  $
-
 
 
 
For the Nine Months Ended September 30, 2018 (2)
 
 
 Number of 
Loans
 
 
  
Pre-Modification
  
Outstanding
Recorded
Investment
 
 
  
Post-Modification
  
Outstanding
Recorded
Investment
 
 
Outstanding
Recorded
Investment at
September 30,
2018
 
 
Financial Effect
Resulting From
  Modifications (3)  
 
 
(Dollars in thousands)
 
Commercial and industrial:
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
   Interest rate reduction
 
 
-  
 
 
  $
-  
 
 
  $
-  
 
 
  $
-  
 
 
  $
-  
 
   Change in amortization period or maturity
 
 
1  
 
 
 
38  
 
 
 
38  
 
 
 
27  
 
 
 
-  
 
Real estate:
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
Commercial real estate:
 
 
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 Owner occupied
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
   Interest rate reduction
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
   Change in amortization period or maturity
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-
 
 
 
-  
 
 
Non-owner
occupied
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
 
 
  
 
   Interest rate reduction
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
   Change in amortization period or maturity
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
SFR mortgage:
 
 
  
 
 
 
  
 
 
 
  
 
 
 
 
 
 
  
 
   Interest rate reduction
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
   Change in amortization period or maturity
 
 
1  
 
 
 
311  
 
 
 
311  
 
 
 
304  
 
 
 
-  
 
Consumer:
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
  
 
   Interest rate reduction
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
 
 
-  
 
   Change in amortization period or maturity
 
 
1  
 
 
 
278  
 
 
 
278  
 
 
 
272  
 
 
 
-  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Total loans
 
 
3  
 
 
  $
627  
 
 
  $
627  
 
 
  $
603  
 
 
  $
-  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)
The tables above exclude modified loans that were paid off prior to the end of the period.
 
(2)
Excludes PCI loans.
 
(3)
Financial effects resulting from modifications represent charge-offs and ​​​​​​​specific allowance recorded at modification date.
There were
no
loans that were previously modified as a TDR within the previous 12 months that subsequently defaulted during the three and nine months ended September 30, 2019 and 2018.