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Loans and Lease Finance Receivables and Allowance for Loan Losses | 12 Months Ended
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Dec. 31, 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 . At December 31, 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 December 31, 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 total loans and lease finance receivables by type.
|  | December 31, 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 |  | $ | 935,127 |  |  | $ | 1,002,209 |  |  | $ | 519 |  |  | $ | 1,002,728 |
SBA |  |  | 305,008 |  |  |  | 350,043 |  |  |  | 1,258 |  |  |  | 351,301 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 5,374,617 |  |  |  | 5,394,229 |  |  |  | 14,407 |  |  |  | 5,408,636 |
Construction |  |  | 116,925 |  |  |  | 122,782 |  |  |  | - |  |  |  | 122,782 |
SFR mortgage |  |  | 283,468 |  |  |  | 296,504 |  |  |  | 145 |  |  |  | 296,649 |
Dairy & livestock and agribusiness |  |  | 383,709 |  |  |  | 393,843 |  |  |  | 700 |  |  |  | 394,543 |
Municipal lease finance receivables |  |  | 53,146 |  |  |  | 64,186 |  |  |  | - |  |  |  | 64,186 |
Consumer and other loans |  |  | 116,319 |  |  |  | 128,429 |  |  |  | 185 |  |  |  | 128,614 |
Gross loans |  |  | 7,568,319 |  |  |  | 7,752,225 |  |  |  | 17,214 |  |  |  | 7,769,439 |
Less: Deferred loan fees, net |  |  | (3,742 | ) |  |  | (4,828 | ) |  |  | - |  |  |  | (4,828 | )
Gross loans, net of deferred loan fees |  |  | 7,564,577 |  |  |  | 7,747,397 |  |  |  | 17,214 |  |  |  | 7,764,611 |
Less: Allowance for loan losses |  |  | (68,660 | ) |  |  | (63,409 | ) |  |  | (204 | ) |  |  | (63,613 | )
Total loans and lease finance receivables |  | $ | 7,495,917 |  |  | $ | 7,683,988 |  |  | $ | 17,010 |  |  | $ | 7,700,998 |
As of December 31, 2019, 76.31% of the Company’s total gross loan portfolio consisted of real estate loans, with commercial real estate loans representing 71.01% 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 December 31, 2019, $241.8 million, or 4.50% 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 $ 125.9 million for loans secured by dairy & livestock land and $ 115.9 million for loans secured by agricultural land at December 31 , 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 December 31 , 2019 , dairy & livestock and agribusiness loans of $ 383.7 million were comprised of $ 323.5 million for dairy & livestock loans and $ 60.2 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 December 31, 2019, the Company held approximately $3.86 billion of total fixed rate loans. At December 31, 2019 and 2018, loans totaling $6.03 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 December 31, 2019 and 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.
|  | December 31, 2019 |
|  | Pass |  |  | Special Mention |  |  | Substandard (1) |  |  | Doubtful & Loss |  |  | Total |
|  | (Dollars in thousands) |
Commercial and industrial |  | $ | 895,234 |  |  | $ | 35,473 |  |  | $ | 4,420 |  |  | $ | - |  |  | $ | 935,127 |
SBA |  |  | 283,430 |  |  |  | 11,032 |  |  |  | 10,546 |  |  |  | - |  |  |  | 305,008 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 1,977,007 |  |  |  | 78,208 |  |  |  | 28,435 |  |  |  | - |  |  |  | 2,083,650 |
Non-owner occupied |  |  | 3,280,580 |  |  |  | 10,005 |  |  |  | 382 |  |  |  | - |  |  |  | 3,290,967 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Speculative |  |  | 106,895 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 106,895 |
Non-speculative |  |  | 10,030 |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,030 |
SFR mortgage |  |  | 280,010 |  |  |  | 1,957 |  |  |  | 1,501 |  |  |  | - |  |  |  | 283,468 |
Dairy & livestock and agribusiness |  |  | 320,670 |  |  |  | 35,920 |  |  |  | 27,119 |  |  |  | - |  |  |  | 383,709 |
Municipal lease finance receivables |  |  | 52,676 |  |  |  | 470 |  |  |  | - |  |  |  | - |  |  |  | 53,146 |
Consumer and other loans |  |  | 114,870 |  |  |  | 421 |  |  |  | 1,028 |  |  |  | - |  |  |  | 116,319 |
Total gross loans |  | $ | 7,321,402 |  |  | $ | 173,486 |  |  | $ | 73,431 |  |  | $ | - |  |  | $ | 7,568,319 |
| (1) | Includes $26.8 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 The Bank’s Audit and Director Loan Committees provide Board oversight of the ALLL 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 for a more detailed discussion concerning the allowance for loan losses. Management believes that the ALLL was appropriate at December 31, 2019 and 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.
|  | Year Ended December 31, 2019 |
|  | Ending Balance December 31, 2018 |  |  | Charge-offs |  |  | Recoveries |  |  | Provision for (Recapture of) Loan Losses |  |  | Ending Balance December 31, 2019 |
|  | (Dollars in thousands) |
Commercial and industrial |  | $ | 7,528 |  |  | $ | (48 | ) |  | $ | 255 |  |  | $ | 1,145 |  |  | $ | 8,880 |
SBA |  |  | 1,078 |  |  |  | (321 | ) |  |  | 9 |  |  |  | 687 |  |  |  | 1,453 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 45,097 |  |  |  | - |  |  |  | - |  |  |  | 3,532 |  |  |  | 48,629 |
Construction |  |  | 981 |  |  |  | - |  |  |  | 12 |  |  |  | (135 | ) |  |  | 858 |
SFR mortgage |  |  | 2,197 |  |  |  | - |  |  |  | 196 |  |  |  | (54 | ) |  |  | 2,339 |
Dairy & livestock and agribusiness |  |  | 5,225 |  |  |  | (78 | ) |  |  | 19 |  |  |  | 89 |  |  |  | 5,255 |
Municipal lease finance receivables |  |  | 775 |  |  |  | - |  |  |  | - |  |  |  | (152 | ) |  |  | 623 |
Consumer and other loans |  |  | 732 |  |  |  | (7 | ) |  |  | 10 |  |  |  | (112 | ) |  |  | 623 |
Total allowance for loan losses |  | $ | 63,613 |  |  | $ | (454 | ) |  | $ | 501 |  |  | $ | 5,000 |  |  | $ | 68,660 |
|  | Year Ended December 31, 2018 |
|  | Ending Balance December 31, 2017 |  |  | Charge-offs |  |  | Recoveries |  |  | Provision for (Recapture of) Loan Losses |  |  | Ending Balance December 31, 2018 |
|  | (Dollars in thousands) |
Commercial and industrial |  | $ | 7,280 |  |  | $ | (10 | ) |  | $ | 82 |  |  | $ | 168 |  |  | $ | 7,520 |
SBA |  |  | 869 |  |  |  | (257 | ) |  |  | 20 |  |  |  | 430 |  |  |  | 1,062 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 41,722 |  |  |  | - |  |  |  | - |  |  |  | 3,212 |  |  |  | 44,934 |
Construction |  |  | 984 |  |  |  | - |  |  |  | 2,506 |  |  |  | (2,509 | ) |  |  | 981 |
SFR mortgage |  |  | 2,112 |  |  |  | (13 | ) |  |  | 51 |  |  |  | 46 |  |  |  | 2,196 |
Dairy & livestock and agribusiness |  |  | 4,647 |  |  |  | - |  |  |  | 19 |  |  |  | 549 |  |  |  | 5,215 |
Municipal lease finance receivables |  |  | 851 |  |  |  | - |  |  |  | - |  |  |  | (76 | ) |  |  | 775 |
Consumer and other loans |  |  | 753 |  |  |  | (11 | ) |  |  | 141 |  |  |  | (157 | ) |  |  | 726 |
PCI loans |  |  | 367 |  |  |  | - |  |  |  | - |  |  |  | (163 | ) |  |  | 204 |
Total allowance for loan losses |  | $ | 59,585 |  |  | $ | (291 | ) |  | $ | 2,819 |  |  | $ | 1,500 |  |  | $ | 63,613 |
|  | Year Ended December 31, 2017 |
|  | Ending Balance December 31, 2016 |  |  | Charge-offs |  |  | Recoveries |  |  | (Recapture of) Provision for Loan Losses |  |  | Ending Balance December 31, 2017 |
|  | (Dollars in thousands) |
Commercial and industrial |  | $ | 8,154 |  |  | $ | (138 | ) |  | $ | 118 |  |  | $ | (854 | ) |  | $ | 7,280 |
SBA |  |  | 871 |  |  |  | - |  |  |  | 78 |  |  |  | (80 | ) |  |  | 869 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 37,443 |  |  |  | - |  |  |  | 154 |  |  |  | 4,125 |  |  |  | 41,722 |
Construction |  |  | 1,096 |  |  |  | - |  |  |  | 6,036 |  |  |  | (6,148 | ) |  |  | 984 |
SFR mortgage |  |  | 2,287 |  |  |  | - |  |  |  | 212 |  |  |  | (387 | ) |  |  | 2,112 |
Dairy & livestock and agribusiness |  |  | 8,541 |  |  |  | - |  |  |  | 19 |  |  |  | (3,913 | ) |  |  | 4,647 |
Municipal lease finance receivables |  |  | 941 |  |  |  | - |  |  |  | - |  |  |  | (90 | ) |  |  | 851 |
Consumer and other loans |  |  | 988 |  |  |  | (13 | ) |  |  | 79 |  |  |  | (301 | ) |  |  | 753 |
PCI loans |  |  | 1,219 |  |  |  | - |  |  |  | - |  |  |  | (852 | ) |  |  | 367 |
Total allowance for loan losses |  | $ | 61,540 |  |  | $ | (151 | ) |  | $ | 6,696 |  |  | $ | (8,500 | ) |  | $ | 59,585 |
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.
|  | December 31, 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 |  | $ | 1,344 |  |  | $ | 933,783 |  |  | $ | 251 |  |  | $ | 8,629 |
SBA |  |  | 2,568 |  |  |  | 302,440 |  |  |  | 257 |  |  |  | 1,196 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 1,121 |  |  |  | 5,373,496 |  |  |  | - |  |  |  | 48,629 |
Construction |  |  | - |  |  |  | 116,925 |  |  |  | - |  |  |  | 858 |
SFR mortgage |  |  | 2,979 |  |  |  | 280,489 |  |  |  | - |  |  |  | 2,339 |
Dairy & livestock and agribusiness |  |  | - |  |  |  | 383,709 |  |  |  | - |  |  |  | 5,255 |
Municipal lease finance receivables |  |  | - |  |  |  | 53,146 |  |  |  | - |  |  |  | 623 |
Consumer and other loans |  |  | 377 |  |  |  | 115,942 |  |  |  | - |  |  |  | 623 |
Total |  | $ | 8,389 |  |  | $ | 7,559,930 |  |  | $ | 508 |  |  | $ | 68,152 |
|  | December 31, 2018 |
|  | Recorded Investment in Loans |  |  | Allowance for Loan Losses |
|  | Individually Evaluated for Impairment |  |  | Collectively Evaluated for Impairment |  |  | Acquired with Deteriorated Credit Quality |  |  | Individually Evaluated for Impairment |  |  | Collectively Evaluated for Impairment |  |  | Acquired with Deteriorated Credit Quality |
|  | (Dollars in thousands) |
Commercial and industrial |  | $ | 7,625 |  |  | $ | 994,584 |  |  | $ | - |  |  | $ | 3 |  |  | $ | 7,517 |  |  | $ | - |
SBA |  |  | 3,467 |  |  |  | 346,576 |  |  |  | - |  |  |  | - |  |  |  | 1,062 |  |  |  | - |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  | 6,540 |  |  |  | 5,387,689 |  |  |  | - |  |  |  | 478 |  |  |  | 44,456 |  |  |  | - |
Construction |  |  | - |  |  |  | 122,782 |  |  |  | - |  |  |  | - |  |  |  | 981 |  |  |  | - |
SFR mortgage |  |  | 5,349 |  |  |  | 291,155 |  |  |  | - |  |  |  | - |  |  |  | 2,196 |  |  |  | - |
Dairy & livestock and agribusiness |  |  | 78 |  |  |  | 393,765 |  |  |  | - |  |  |  | 12 |  |  |  | 5,203 |  |  |  | - |
Municipal lease finance receivables |  |  | - |  |  |  | 64,186 |  |  |  | - |  |  |  | - |  |  |  | 775 |  |  |  | - |
Consumer and other loans |  |  | 486 |  |  |  | 127,943 |  |  |  | - |  |  |  | 68 |  |  |  | 658 |  |  |  | - |
PCI loans |  |  | - |  |  |  | - |  |  |  | 17,214 |  |  |  | - |  |  |  | - |  |  |  | 204 |
Total |  | $ | 23,545 |  |  | $ | 7,728,680 |  |  | $ | 17,214 |  |  | $ | 561 |  |  | $ | 62,848 |  |  | $ | 204 |
Past Due and Nonperforming Loans The following tables present the recorded investment in, and the aging of, past due and nonaccrual loans, by type of loans as of the dates presented.
|  | December 31, 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 |  | $ | 2 |  |  | $ | - |  |  | $ | 2 |  |  | $ | 1,266 |  |  | $ | 933,859 |  |  | $ | 935,127 |
SBA |  |  | 870 |  |  |  | 532 |  |  |  | 1,402 |  |  |  | 2,032 |  |  |  | 301,574 |  |  |  | 305,008 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 479 |  |  |  | 2,083,171 |  |  |  | 2,083,650 |
Non-owner occupied |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 245 |  |  |  | 3,290,722 |  |  |  | 3,290,967 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Speculative (2) |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 106,895 |  |  |  | 106,895 |
Non-speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 10,030 |  |  |  | 10,030 |
SFR mortgage |  |  | 6 |  |  |  | 243 |  |  |  | 249 |  |  |  | 878 |  |  |  | 282,341 |  |  |  | 283,468 |
Dairy & livestock and agribusiness |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 383,709 |  |  |  | 383,709 |
Municipal lease finance receivables |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 53,146 |  |  |  | 53,146 |
Consumer and other loans |  |  | - |  |  |  | - |  |  |  | - |  |  |  | 377 |  |  |  | 115,942 |  |  |  | 116,319 |
Total gross loans, excluding PCI loans |  | $ | 878 |  |  | $ | 775 |  |  | $ | 1,653 |  |  | $ | 5,277 |  |  | $ | 7,561,389 |  |  | $ | 7,568,319 |
| (1) | As of December 31, 2019, $1.2 million of nonaccruing loans were current, $59,000 were 30-59 days past due, $1.1 million were 60-89 days past due , and $2.9 million were 90+ days past due.
| (2) | Speculative construction loans are generally for properties where there is no identified buyer or renter.
| (3) | Includes $3.5 million of nonaccrual loans acquired from CB in the third quarter of 2018.
| (4) | Excludes $2.0 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, excluding PCI 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 December 31, 2019, the Company had impaired loans of $8.4 million. Impaired loans included $2.0 million of nonaccrual SBA loans, $1.3 million of nonaccrual commercial and industrial loans, $878,000 of nonaccrual SFR mortgage loans, $724,000 of nonaccrual commercial real estate loans, and $377,000 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 $244,000 are classified as nonaccrual. The remaining balance of $3.1 million consisted of 12 loans performing according to the restructured terms. The impaired loans had a specific allowance of $508,000 at December 31, 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 of and for the periods presented.
|  | Year Ended December 31, 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 |  | $ | 1,091 |  |  | $ | 1,261 |  |  | $ | - |  |  | $ | 1,369 |  |  | $ | 4 |
SBA |  |  | 2,243 |  |  |  | 2,734 |  |  |  | - |  |  |  | 2,389 |  |  |  | 41 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 479 |  |  |  | 613 |  |  |  | - |  |  |  | 505 |  |  |  | - |
Non-owner occupied |  |  | 642 |  |  |  | 643 |  |  |  | - |  |  |  | 681 |  |  |  | 26 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
SFR mortgage |  |  | 2,979 |  |  |  | 3,310 |  |  |  | - |  |  |  | 3,043 |  |  |  | 86 |
Dairy & livestock and agribusiness |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Municipal lease finance receivables |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Consumer and other loans |  |  | 377 |  |  |  | 514 |  |  |  | - |  |  |  | 396 |  |  |  | - |
Total |  |  | 7,811 |  |  |  | 9,075 |  |  |  | - |  |  |  | 8,383 |  |  |  | 157 |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 253 |  |  |  | 347 |  |  |  | 251 |  |  |  | 699 |  |  |  | - |
SBA |  |  | 325 |  |  |  | 324 |  |  |  | 257 |  |  |  | 327 |  |  |  | - |
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 |  |  | 578 |  |  |  | 671 |  |  |  | 508 |  |  |  | 1,026 |  |  |  | - |
Total impaired loans |  | $ | 8,389 |  |  | $ | 9,746 |  |  | $ | 508 |  |  | $ | 9,409 |  |  | $ | 157 |
|  | Year Ended December 31, 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 |  | $ | 7,436 |  |  | $ | 11,457 |  |  | $ | - |  |  | $ | 7,718 |  |  | $ | 7 |
SBA |  |  | 3,467 |  |  |  | 5,746 |  |  |  | - |  |  |  | 3,919 |  |  |  | 44 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 589 |  |  |  | 705 |  |  |  | - |  |  |  | 624 |  |  |  | - |
Non-owner occupied |  |  | 2,808 |  |  |  | 4,324 |  |  |  | - |  |  |  | 4,585 |  |  |  | 32 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
SFR mortgage |  |  | 5,349 |  |  |  | 6,270 |  |  |  | - |  |  |  | 5,484 |  |  |  | 80 |
Dairy & livestock and agribusiness |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Municipal lease finance receivables |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Consumer and other loans |  |  | 418 |  |  |  | 526 |  |  |  | - |  |  |  | 459 |  |  |  | - |
Total |  |  | 20,067 |  |  |  | 29,028 |  |  |  | - |  |  |  | 22,789 |  |  |  | 163 |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | 189 |  |  |  | 191 |  |  |  | 3 |  |  |  | 203 |  |  |  | - |
SBA |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-owner occupied |  |  | 3,143 |  |  |  | 3,144 |  |  |  | 478 |  |  |  | 3,144 |  |  |  | - |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
SFR mortgage |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Dairy & livestock and agribusiness |  |  | 78 |  |  |  | 78 |  |  |  | 12 |  |  |  | 78 |  |  |  | - |
Municipal lease finance receivables |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Consumer and other loans |  |  | 68 |  |  |  | 100 |  |  |  | 68 |  |  |  | 76 |  |  |  | - |
Total |  |  | 3,478 |  |  |  | 3,513 |  |  |  | 561 |  |  |  | 3,501 |  |  |  | - |
Total impaired loans |  | $ | 23,545 |  |  | $ | 32,541 |  |  | $ | 561 |  |  | $ | 26,290 |  |  | $ | 163 |
|  | Ye ar Ended December 31, 2017 (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 |  | $ | 440 |  |  | $ | 980 |  |  | $ | - |  |  | $ | 548 |  |  | $ | 10 |
SBA |  |  | 1,530 |  |  |  | 1,699 |  |  |  | - |  |  |  | 1,598 |  |  |  | 47 |
Real estate: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial real estate |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Owner occupied |  |  | 4,365 |  |  |  | 4,763 |  |  |  | - |  |  |  | 4,414 |  |  |  | 36 |
Non-owner occupied |  |  | 3,768 |  |  |  | 5,107 |  |  |  | - |  |  |  | 3,951 |  |  |  | 94 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Non-speculative |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
SFR mortgage |  |  | 4,040 |  |  |  | 4,692 |  |  |  | - |  |  |  | 4,119 |  |  |  | 118 |
Dairy & livestock and agribusiness |  |  | 829 |  |  |  | 1,091 |  |  |  | - |  |  |  | 988 |  |  |  | 1 |
Municipal lease finance receivables |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Consumer and other loans |  |  | 174 |  |  |  | 370 |  |  |  | - |  |  |  | 202 |  |  |  | - |
Total |  |  | 15,146 |  |  |  | 18,702 |  |  |  | - |  |  |  | 15,820 |  |  |  | 306 |
With a related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
SBA |  |  | 1 |  |  |  | 18 |  |  |  | 1 |  |  |  | 6 |  |  |  | - |
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 |  |  | 378 |  |  |  | 391 |  |  |  | 74 |  |  |  | 385 |  |  |  | - |
Total |  |  | 379 |  |  |  | 409 |  |  |  | 75 |  |  |  | 391 |  |  |  | - |
Total impaired loans |  | $ | 15,525 |  |  | $ | 19,111 |  |  | $ | 75 |  |  | $ | 16,211 |  |  | $ | 306 |
| (1) | Excludes PCI 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 it evaluates credit risk associated with the loan and lease portfolio. As a result of the acquisition of CB, the reserve for unfunded loan commitments increased by $2.9 million in 2018. There was no provision or recapture of provision for unfunded commitments for the year ended December 31, 2019, compared with a recapture of provision for unfunded loan commitments of $250,000 for the year ended December 31, 2018 and a recapture of provision for unfunded loan commitments of $400,000 for the year ended December 31, 2017. As of December 31, 2019 and 2018, the balance in this reserve was $9.0 million and was included in other liabilities. Troubled Debt Restructurings 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, Troubled Debt Restructurings , included herein. As of December 31, 2019, there were $3.4 million of loans classified as a TDR, of which $244,000 were nonperforming and $3.1 million were performing. 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 December 31, 2019, performing TDRs were comprised of eight SFR mortgage loans of $2.1 million, one SBA loan of $536,000, one commercial real estate loan of $397,000, and two commercial and industrial loans of $78,000. 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 December 31, 2019 and December 31, 2018, respectively. The following table provides a summary of the activity related to TDRs for the periods presented.
|  | Year Ended December 31, |
|  | 2019 |  |  | 2018 (1) |
|  | (Dollars in thousands) |
Performing TDRs: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,594 |  |  | $ | 4,809 |
New modifications |  |  | - |  |  |  | 311 |
Payoffs/payments, net and other |  |  | (482 | ) |  |  | (1,526 | )
TDRs returned to accrual status |  |  | - |  |  |  | - |
TDRs placed on nonaccrual status |  |  | - |  |  |  | - |
Ending balance |  | $ | 3,112 |  |  | $ | 3,594 |
Nonperforming TDRs: |  |  |  |  |  |  |  |
Beginning balance |  | $ | 3,509 |  |  | $ | 4,200 |
New modifications |  |  | - |  |  |  | 316 |
Charge-offs |  |  | (78 | ) |  |  | - |
Transfer to OREO |  |  | (2,275 | ) |  |  | - |
Payoffs/payments, net and other |  |  | (912 | ) |  |  | (1,007 | )
TDRs returned to accrual status |  |  | - |  |  |  | - |
TDRs placed on nonaccrual status |  |  | - |  |  |  | - |
Ending balance |  | $ | 244 |  |  | $ | 3,509 |
Total TDRs |  | $ | 3,356 |  |  | $ | 7,103 |
| (1) | Excludes PCI loans.
There were no loans that were modified as TDRs for the year ended December 31, 2019. The following tables summarize loans modified as TDRs for the periods presented . Modifications (1)
|  | Year Ended December 31, 2018 (2) |
|  | Number of Loans |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Outstanding Recorded Investment at December 31, 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 |  |  |  | 20 |  |  |  | - |
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 |  |  |  | 300 |  |  |  | - |
Dairy & livestock and agribusiness: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate reduction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Change in amortization period or maturity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate reduction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Change in amortization period or maturity |  |  | 1 |  |  |  | 278 |  |  |  | 278 |  |  |  | 267 |  |  |  | - |
Total loans |  |  | 3 |  |  | $ | 627 |  |  | $ | 627 |  |  | $ | 587 |  |  | $ | - |
|  | Year Ended December 31, 2017 (2) |
|  | Number of Loans |  |  | Pre-Modification Outstanding Recorded Investment |  |  | Post-Modification Outstanding Recorded Investment |  |  | Outstanding Recorded Investment at December 31, 2017 |  |  | 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 |  |  | 1 |  |  |  | 3,143 |  |  |  | 3,143 |  |  |  | 3,143 |  |  |  | - |
SFR mortgage: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate reduction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Change in amortization period or maturity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Dairy & livestock and agribusiness: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate reduction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Change in amortization period or maturity |  |  | 1 |  |  |  | 1,984 |  |  |  | 1,984 |  |  |  | 78 |  |  |  | - |
Consumer: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest rate reduction |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Change in amortization period or maturity |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |  |  |  | - |
Total loans |  |  | 2 |  |  | $ | 5,127 |  |  | $ | 5,127 |  |  | $ | 3,221 |  |  | $ | - |
| (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.
As of December 31, 2019 and 2018, there were no loans that were modified as a TDR within the previous 12 months that subsequently defaulted. As of December 31, 2017, there was one commercial real estate loan with an outstanding balance of $ 3.1 million that was previously modified as a troubled debt restructuring within the previous 12 months that subsequently defaulted.

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