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Loans Receivable and Allowance for Loan Losses | 6 Months Ended
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Jun. 30, 2019
Receivables [Abstract] |
Loans Receivable and Allowance for Loan Losses | Loans Receivable and Allowance for Loan Losses The following is a summary of loans receivable by major category:
| June 30, 2019 |  | December 31, 2018
Loan portfolio composition | (Dollars in thousands)
Real estate loans: |  |  |
Residential | $ | 51,167 |  |  | $ | 51,197 |
Commercial | 8,301,315 |  |  | 8,395,327 |
Construction | 278,370 |  |  | 275,076 |
Total real estate loans | 8,630,852 |  |  | 8,721,600 |
Commercial business | 2,265,287 |  |  | 2,127,630 |
Trade finance | 166,781 |  |  | 197,190 |
Consumer and other | 913,087 |  |  | 1,051,486 |
Total loans outstanding | 11,976,007 |  |  | 12,097,906 |
Deferred loan costs, net | 1,127 |  |  | 209 |
Loans receivable | 11,977,134 |  |  | 12,098,115 |
Allowance for loan losses | (94,066 | ) |  | (92,557 | )
Loans receivable, net of allowance for loan losses | $ | 11,883,068 |  |  | $ | 12,005,558 |
The loan portfolio is made up of four segments: real estate loans, commercial business, trade finance, and consumer and other. Real estate loans are extended for the purchase and refinance of commercial real estate and are generally secured by first deeds of trust and are collateralized by residential or commercial properties. Commercial business loans are loans provided to businesses for various purposes such as for working capital, purchasing inventory, debt refinancing, business acquisitions and other business related financing needs. Trade finance loans generally serves businesses involved in international trade activities. Consumer and other loans consist mostly of single family residential mortgage loans but also includes home equity, credit cards, and other personal loans. The four segments are further segregated between loans accounted for under the amortized cost method (“Legacy Loans”), and previously acquired loans that were originally recorded at fair value with no carryover of the related pre-acquisition allowance for loan losses (“Acquired Loans”). Acquired Loans are further segregated between purchased credit impaired loans (loans with credit deterioration on the date of acquisition and accounted for under ASC 310-30, or “PCI loans”), and Acquired Performing Loans (loans that were pass graded on the acquisition date and the fair value adjustment is amortized over the contractual life under ASC 310-20, or “non-PCI loans”). The following table presents changes in the accretable discount on PCI loans for the three and six months ended June 30, 2019 and 2018:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
| (Dollars in thousands)
Balance at beginning of period | $ | 47,364 |  |  | $ | 54,846 |  |  | $ | 49,697 |  |  | $ | 55,002 |
Accretion | (6,848 | ) |  | (5,959 | ) |  | (12,682 | ) |  | (11,731 | )
Reclassification from nonaccretable difference | 2,846 |  |  | 4,686 |  |  | 6,347 |  |  | 10,302 |
Balance at end of period | $ | 43,362 |  |  | $ | 53,573 |  |  | $ | 43,362 |  |  | $ | 53,573 |
On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of PCI loans is considered the “accretable yield.” The accretable yield is measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. The accretable yield will change from period to period due to the following: 1) estimates of the remaining life of acquired loans will affect the amount of future interest income; 2) indices for variable rates of interest on PCI loans may change; and 3) estimates of the amount of the contractual principal and interest that will not be collected (nonaccretable difference) may change. The following tables detail the activity in the allowance for loan losses by portfolio segment for the three and six months ended June 30, 2019 and 2018:
| Legacy Loans |  | Acquired Loans |  | Total
| Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |  | Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |
| (Dollars in thousands)
Three Months Ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 45,876 |  |  | $ | 27,376 |  |  | $ | 698 |  |  | $ | 7,004 |  |  | $ | 7,261 |  |  | $ | 5,000 |  |  | $ | — |  |  | $ | 1,002 |  |  | $ | 94,217 |
Provision (credit) for loan losses | 1,195 |  |  | 183 |  |  | 311 |  |  | 14 |  |  | (636 | ) |  | 195 |  |  | — |  |  | (62 | ) |  | 1,200 |
Loans charged off | (182 | ) |  | (922 | ) |  | — |  |  | (343 | ) |  | — |  |  | (629 | ) |  | — |  |  | — |  |  | (2,076 | )
Recoveries of charge offs | 265 |  |  | 120 |  |  | — |  |  | 1 |  |  | 305 |  |  | 32 |  |  | — |  |  | 2 |  |  | 725 |
Balance, end of period | $ | 47,154 |  |  | $ | 26,757 |  |  | $ | 1,009 |  |  | $ | 6,676 |  |  | $ | 6,930 |  |  | $ | 4,598 |  |  | $ | — |  |  | $ | 942 |  |  | $ | 94,066 |
Six Months Ended June 30, 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 49,446 |  |  | $ | 21,826 |  |  | $ | 719 |  |  | $ | 6,269 |  |  | $ | 7,321 |  |  | $ | 5,939 |  |  | $ | — |  |  | $ | 1,037 |  |  | $ | 92,557 |
Provision (credit) for loan losses | (3,463 | ) |  | 6,804 |  |  | 290 |  |  | 952 |  |  | (675 | ) |  | 313 |  |  | — |  |  | (21 | ) |  | 4,200 |
Loans charged off | (216 | ) |  | (2,082 | ) |  | — |  |  | (553 | ) |  | (26 | ) |  | (877 | ) |  | — |  |  | (76 | ) |  | (3,830 | )
Recoveries of charge offs | 1,387 |  |  | 209 |  |  | — |  |  | 8 |  |  | 310 |  |  | 101 |  |  | — |  |  | 2 |  |  | 2,017 |
PCI allowance adjustment | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | (878 | ) |  | — |  |  | — |  |  | (878 | )
Balance, end of period | $ | 47,154 |  |  | $ | 26,757 |  |  | $ | 1,009 |  |  | $ | 6,676 |  |  | $ | 6,930 |  |  | $ | 4,598 |  |  | $ | — |  |  | $ | 942 |  |  | $ | 94,066 |
| Legacy Loans |  | Acquired Loans |  | Total
| Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |  | Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |
| (Dollars in thousands)
Three Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 45,977 |  |  | $ | 20,387 |  |  | $ | 1,767 |  |  | $ | 3,934 |  |  | $ | 13,048 |  |  | $ | 1,308 |  |  | $ | 38 |  |  | $ | 2 |  |  | $ | 86,461 |
Provision (credit) for loan losses | 1,776 |  |  | 487 |  |  | (796 | ) |  | 1,086 |  |  | (141 | ) |  | (96 | ) |  | (35 | ) |  | 19 |  |  | 2,300 |
Loans charged off | (144 | ) |  | (446 | ) |  | — |  |  | (229 | ) |  | (92 | ) |  | (352 | ) |  | — |  |  | — |  |  | (1,263 | )
Recoveries of charge offs | 626 |  |  | 1,603 |  |  | 12 |  |  | 8 |  |  | 1 |  |  | 131 |  |  | — |  |  | 2 |  |  | 2,383 |
Balance, end of period | $ | 48,235 |  |  | $ | 22,031 |  |  | $ | 983 |  |  | $ | 4,799 |  |  | $ | 12,816 |  |  | $ | 991 |  |  | $ | 3 |  |  | $ | 23 |  |  | $ | 89,881 |
Six Months Ended June 30, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Balance, beginning of period | $ | 45,360 |  |  | $ | 17,228 |  |  | $ | 1,674 |  |  | $ | 3,385 |  |  | $ | 13,322 |  |  | $ | 3,527 |  |  | $ | 42 |  |  | $ | 3 |  |  | $ | 84,541 |
Provision (credit) for loan losses | 2,255 |  |  | 3,776 |  |  | (715 | ) |  | 1,963 |  |  | (314 | ) |  | (2,142 | ) |  | (39 | ) |  | 16 |  |  | 4,800 |
Loans charged off | (207 | ) |  | (788 | ) |  | — |  |  | (576 | ) |  | (194 | ) |  | (566 | ) |  | — |  |  | — |  |  | (2,331 | )
Recoveries of charge offs | 827 |  |  | 1,815 |  |  | 24 |  |  | 27 |  |  | 2 |  |  | 172 |  |  | — |  |  | 4 |  |  | 2,871 |
Balance, end of period | $ | 48,235 |  |  | $ | 22,031 |  |  | $ | 983 |  |  | $ | 4,799 |  |  | $ | 12,816 |  |  | $ | 991 |  |  | $ | 3 |  |  | $ | 23 |  |  | $ | 89,881 |
The following tables break out the allowance for loan losses and the recorded investment of loans outstanding (not including accrued interest receivable and net deferred loan costs or fees) by individually impaired, general valuation, and PCI impairment, by portfolio segment at June 30, 2019 and December 31, 2018:
| June 30, 2019
| Legacy Loans |  | Acquired Loans |  | Total
| Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |  | Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |
| (Dollars in thousands)
Allowance for loan losses:
Individually evaluated for impairment | $ | 192 |  |  | $ | 4,282 |  |  | $ | 333 |  |  | $ | 11 |  |  | $ | 127 |  |  | $ | 987 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 5,933 |
Collectively evaluated for impairment | 46,962 |  |  | 22,475 |  |  | 676 |  |  | 6,665 |  |  | 1,682 |  |  | 574 |  |  | — |  |  | 16 |  |  | 79,050 |
PCI loans | — |  |  | — |  |  | — |  |  | — |  |  | 5,121 |  |  | 3,037 |  |  | — |  |  | 925 |  |  | 9,083 |
Total | $ | 47,154 |  |  | $ | 26,757 |  |  | $ | 1,009 |  |  | $ | 6,676 |  |  | $ | 6,930 |  |  | $ | 4,598 |  |  | $ | — |  |  | $ | 942 |  |  | $ | 94,066 |
Loans outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 46,785 |  |  | $ | 26,159 |  |  | $ | 2,825 |  |  | $ | 2,266 |  |  | $ | 19,578 |  |  | $ | 4,228 |  |  | $ | 3,318 |  |  | $ | 811 |  |  | $ | 105,970 |
Collectively evaluated for impairment | 7,160,408 |  |  | 2,168,442 |  |  | 160,638 |  |  | 787,980 |  |  | 1,289,871 |  |  | 58,080 |  |  | — |  |  | 117,110 |  |  | 11,742,529 |
PCI loans | — |  |  | — |  |  | — |  |  | — |  |  | 114,210 |  |  | 8,378 |  |  | — |  |  | 4,920 |  |  | 127,508 |
Total | $ | 7,207,193 |  |  | $ | 2,194,601 |  |  | $ | 163,463 |  |  | $ | 790,246 |  |  | $ | 1,423,659 |  |  | $ | 70,686 |  |  | $ | 3,318 |  |  | $ | 122,841 |  |  | $ | 11,976,007 |
| December 31, 2018
| Legacy Loans |  | Acquired Loans |  | Total
| Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |  | Real Estate |  | Commercial Business |  | Trade Finance |  | Consumer and Other |
| (Dollars in thousands)
Allowance for loan losses:
Individually evaluated for impairment | $ | 176 |  |  | $ | 4,221 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 261 |  |  | $ | 130 |  |  | $ | — |  |  | $ | — |  |  | $ | 4,791 |
Collectively evaluated for impairment | 49,270 |  |  | 17,605 |  |  | 719 |  |  | 6,266 |  |  | 1,264 |  |  | 460 |  |  | — |  |  | 19 |  |  | 75,603 |
PCI loans | — |  |  | — |  |  | — |  |  | — |  |  | 5,796 |  |  | 5,349 |  |  | — |  |  | 1,018 |  |  | 12,163 |
Total | $ | 49,446 |  |  | $ | 21,826 |  |  | $ | 719 |  |  | $ | 6,269 |  |  | $ | 7,321 |  |  | $ | 5,939 |  |  | $ | — |  |  | $ | 1,037 |  |  | $ | 92,557 |
Loans outstanding: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment | $ | 39,976 |  |  | $ | 29,624 |  |  | $ | 5,887 |  |  | $ | 441 |  |  | $ | 18,080 |  |  | $ | 5,734 |  |  | $ | 3,124 |  |  | $ | 1,141 |  |  | $ | 104,007 |
Collectively evaluated for impairment | 7,037,392 |  |  | 1,988,067 |  |  | 188,179 |  |  | 910,292 |  |  | 1,507,858 |  |  | 80,916 |  |  | — |  |  | 133,942 |  |  | 11,846,646 |
PCI loans | — |  |  | — |  |  | — |  |  | — |  |  | 118,294 |  |  | 23,289 |  |  | — |  |  | 5,670 |  |  | 147,253 |
Total | $ | 7,077,368 |  |  | $ | 2,017,691 |  |  | $ | 194,066 |  |  | $ | 910,733 |  |  | $ | 1,644,232 |  |  | $ | 109,939 |  |  | $ | 3,124 |  |  | $ | 140,753 |  |  | $ | 12,097,906 |
At June 30, 2019 and December 31, 2018, the balance of PCI loans that had credit deterioration subsequent to acquisition was $36.4 million and $57.5 million, respectively. PCI loans with subsequent credit deterioration had an allowance for loan losses balance of $9.1 million and $12.2 million at June 30, 2019 and December 31, 2018, respectively. As of June 30, 2019 and December 31, 2018, the reserve for unfunded loan commitments recorded in other liabilities was $736 thousand. For the three months ended June 30, 2019 and 2018, recognized provision for unfunded commitments recorded in credit related expense was $0 and $150 thousand, respectively. For the six months ended June 30, 2019 and 2018, recognized credit for unfunded commitments recorded in credit related expense was $0 and $50 thousand, respectively. The recorded investment of individually impaired loans and the total impaired loans net of specific allowance is presented in the following table for the dates indicated:
| June 30, 2019 |  | December 31, 2018
| (Dollars in thousands)
With allocated specific allowance |  |  |
Without charge off | $ | 36,966 |  |  | $ | 35,365 |
With charge off | 1,233 |  |  | 681 |
With no allocated specific allowance |  |  |
Without charge off | 57,249 |  |  | 59,607 |
With charge off | 10,522 |  |  | 8,354 |
Specific allowance on impaired loans | (5,933 | ) |  | (4,791 | )
Impaired loans, net of specific allowance | $ | 100,037 |  |  | $ | 99,216 |
The following tables detail the recorded investment of impaired loans (Legacy Loans and Acquired Loans that became impaired subsequent to being originated and acquired, respectfully) as of June 30, 2019 and December 31, 2018, and the average recorded investment and interest income recognized for the three and six months ended June 30, 2019 and 2018. Impaired loans with no related allowance are believed by management to be adequately collateralized.
|  | As of June 30, 2019 |  | As of December 31, 2018
Total Impaired Loans (1) |  | Recorded Investment (2) |  | Unpaid Contractual Principal Balance |  | Related Allowance |  | Recorded Investment (2) |  | Unpaid Contractual Principal Balance |  | Related Allowance
|  | (Dollars in thousands)
With related allowance: |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 2,222 |  |  | 2,492 |  |  | 63 |  |  | 1,375 |  |  | 1,487 |  |  | 156 |
Hotel & motel |  | 1,789 |  |  | 2,658 |  |  | 103 |  |  | 1,949 |  |  | 2,310 |  |  | 119 |
Gas station & car wash |  | 61 |  |  | 1,967 |  |  | — |  |  | — |  |  | — |  |  | — |
Mixed use |  | 836 |  |  | 924 |  |  | 25 |  |  | 881 |  |  | 947 |  |  | 43 |
Industrial & warehouse |  | 6,908 |  |  | 8,671 |  |  | 121 |  |  | 1,305 |  |  | 2,139 |  |  | 93 |
Other |  | 839 |  |  | 1,103 |  |  | 7 |  |  | 7,759 |  |  | 8,174 |  |  | 26 |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 21,761 |  |  | 23,091 |  |  | 5,269 |  |  | 22,203 |  |  | 23,928 |  |  | 4,351 |
Trade finance |  | 2,825 |  |  | 2,825 |  |  | 333 |  |  | — |  |  | — |  |  | — |
Consumer and other |  | 958 |  |  | 966 |  |  | 12 |  |  | 575 |  |  | 575 |  |  | 3 |
Subtotal |  | $ | 38,199 |  |  | $ | 44,697 |  |  | $ | 5,933 |  |  | $ | 36,047 |  |  | $ | 39,560 |  |  | $ | 4,791 |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 11,035 |  |  | 11,865 |  |  | — |  |  | 8,005 |  |  | 11,234 |  |  | — |
Hotel & motel |  | 10,136 |  |  | 20,811 |  |  | — |  |  | 10,877 |  |  | 22,590 |  |  | — |
Gas station & car wash |  | 456 |  |  | 1,660 |  |  | — |  |  | 545 |  |  | 3,653 |  |  | — |
Mixed use |  | 3,473 |  |  | 3,576 |  |  | — |  |  | 7,048 |  |  | 7,058 |  |  | — |
Industrial & warehouse |  | 11,944 |  |  | 12,531 |  |  | — |  |  | 12,343 |  |  | 13,467 |  |  | — |
Other |  | 16,664 |  |  | 21,123 |  |  | — |  |  | 5,969 |  |  | 7,122 |  |  | — |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 8,626 |  |  | 14,554 |  |  | — |  |  | 13,155 |  |  | 17,850 |  |  | — |
Trade finance |  | 3,318 |  |  | 3,318 |  |  | — |  |  | 9,011 |  |  | 9,011 |  |  | — |
Consumer and other |  | 2,119 |  |  | 2,204 |  |  | — |  |  | 1,007 |  |  | 1,156 |  |  | — |
Subtotal |  | $ | 67,771 |  |  | $ | 91,642 |  |  | $ | — |  |  | $ | 67,960 |  |  | $ | 93,141 |  |  | $ | — |
Total |  | $ | 105,970 |  |  | $ | 136,339 |  |  | $ | 5,933 |  |  | $ | 104,007 |  |  | $ | 132,701 |  |  | $ | 4,791 |
__________________________________ (1) Impaired loans exclude acquired PCI loans (2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts.
|  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Total Impaired Loans (1) |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment
|  | (Dollars in thousands)
With related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | 125 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 84 |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 2,133 |  |  | 6 |  |  | 7,088 |  |  | 7 |  |  | 1,880 |  |  | 11 |  |  | 4,902 |  |  | 15 |
Hotel & motel |  | 1,812 |  |  | — |  |  | 2,792 |  |  | — |  |  | 1,857 |  |  | — |  |  | 2,838 |  |  | — |
Gas station & car wash |  | 61 |  |  | — |  |  | — |  |  | — |  |  | 31 |  |  | — |  |  | — |  |  | — |
Mixed use |  | 847 |  |  | 2 |  |  | 2,985 |  |  | 39 |  |  | 859 |  |  | 3 |  |  | 2,094 |  |  | 75 |
Industrial & warehouse |  | 7,249 |  |  | 90 |  |  | 2,616 |  |  | 36 |  |  | 5,267 |  |  | 170 |  |  | 2,002 |  |  | 67 |
Other |  | 2,597 |  |  | 5 |  |  | 6,655 |  |  | 24 |  |  | 4,318 |  |  | 11 |  |  | 5,902 |  |  | 47 |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 24,019 |  |  | 139 |  |  | 27,487 |  |  | 168 |  |  | 23,414 |  |  | 295 |  |  | 24,435 |  |  | 331 |
Trade finance |  | 1,463 |  |  | 1 |  |  | 3,146 |  |  | 63 |  |  | 975 |  |  | 2 |  |  | 3,384 |  |  | 121 |
Consumer and other |  | 956 |  |  | — |  |  | 748 |  |  | 6 |  |  | 829 |  |  | — |  |  | 673 |  |  | 6 |
Subtotal |  | $ | 41,137 |  |  | $ | 243 |  |  | $ | 53,642 |  |  | $ | 343 |  |  | $ | 39,430 |  |  | $ | 492 |  |  | $ | 46,314 |  |  | $ | 662 |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 17,808 |  |  | 35 |  |  | 10,917 |  |  | 36 |  |  | 14,540 |  |  | 70 |  |  | 11,209 |  |  | 71 |
Hotel & motel |  | 9,946 |  |  | — |  |  | 3,713 |  |  | — |  |  | 10,256 |  |  | — |  |  | 3,423 |  |  | — |
Gas station & car wash |  | 494 |  |  | 4 |  |  | 542 |  |  | — |  |  | 511 |  |  | 9 |  |  | 558 |  |  | — |
Mixed use |  | 5,345 |  |  | 51 |  |  | 2,475 |  |  | 50 |  |  | 5,912 |  |  | 102 |  |  | 2,017 |  |  | 100 |
Industrial & warehouse |  | 10,998 |  |  | 64 |  |  | 11,886 |  |  | 56 |  |  | 11,447 |  |  | 127 |  |  | 10,733 |  |  | 112 |
Other |  | 15,524 |  |  | 82 |  |  | 13,587 |  |  | 112 |  |  | 12,339 |  |  | 166 |  |  | 15,819 |  |  | 233 |
Real estate – construction |  | — |  |  | — |  |  | 650 |  |  | — |  |  | — |  |  | — |  |  | 867 |  |  | — |
Commercial business |  | 10,576 |  |  | 62 |  |  | 20,530 |  |  | 37 |  |  | 11,436 |  |  | 121 |  |  | 19,752 |  |  | 63 |
Trade finance |  | 5,813 |  |  | 52 |  |  | 3,165 |  |  | 47 |  |  | 6,879 |  |  | 102 |  |  | 3,134 |  |  | 90 |
Consumer and other |  | 1,450 |  |  | — |  |  | 1,807 |  |  | — |  |  | 1,303 |  |  | — |  |  | 1,718 |  |  | — |
Subtotal |  | $ | 77,954 |  |  | $ | 350 |  |  | $ | 69,272 |  |  | $ | 338 |  |  | $ | 74,623 |  |  | $ | 697 |  |  | $ | 69,230 |  |  | $ | 669 |
Total |  | $ | 119,091 |  |  | $ | 593 |  |  | $ | 122,914 |  |  | $ | 681 |  |  | $ | 114,053 |  |  | $ | 1,189 |  |  | $ | 115,544 |  |  | $ | 1,331 |
__________________________________ (1) Impaired loans exclude acquired PCI loans (2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts.
|  | As of June 30, 2019 |  | As of December 31, 2018
Impaired Acquired Loans (1) |  | Recorded Investment (2) |  | Unpaid Contractual Principal Balance |  | Related Allowance |  | Recorded Investment (2) |  | Unpaid Contractual Principal Balance |  | Related Allowance
|  | (Dollars in thousands)
With related allowance: |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 810 |  |  | 843 |  |  | 22 |  |  | 198 |  |  | 220 |  |  | 118 |
Hotel & motel |  | 73 |  |  | 345 |  |  | 3 |  |  | 72 |  |  | 345 |  |  | 4 |
Gas station & car wash |  | 61 |  |  | 1,967 |  |  | — |  |  | — |  |  | — |  |  | — |
Mixed use |  | 293 |  |  | 297 |  |  | 22 |  |  | 312 |  |  | 312 |  |  | 38 |
Industrial & warehouse |  | 328 |  |  | 1,920 |  |  | 80 |  |  | 230 |  |  | 1,050 |  |  | 88 |
Other |  | — |  |  | — |  |  | — |  |  | 3,454 |  |  | 3,454 |  |  | 13 |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 2,022 |  |  | 2,294 |  |  | 987 |  |  | 4,064 |  |  | 5,041 |  |  | 130 |
Trade finance |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other |  | 131 |  |  | 131 |  |  | 1 |  |  | 144 |  |  | 144 |  |  | — |
Subtotal |  | $ | 3,718 |  |  | $ | 7,797 |  |  | $ | 1,115 |  |  | $ | 8,474 |  |  | $ | 10,566 |  |  | $ | 391 |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 7,155 |  |  | 7,246 |  |  | — |  |  | 3,285 |  |  | 4,151 |  |  | — |
Hotel & motel |  | 5,350 |  |  | 6,790 |  |  | — |  |  | 5,428 |  |  | 6,874 |  |  | — |
Gas station & car wash |  | 183 |  |  | 706 |  |  | — |  |  | 247 |  |  | 2,673 |  |  | — |
Mixed use |  | 194 |  |  | 285 |  |  | — |  |  | 3,722 |  |  | 3,726 |  |  | — |
Industrial & warehouse |  | — |  |  | — |  |  | — |  |  | 119 |  |  | 894 |  |  | — |
Other |  | 5,131 |  |  | 8,448 |  |  | — |  |  | 1,013 |  |  | 1,326 |  |  | — |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 2,206 |  |  | 3,843 |  |  | — |  |  | 1,670 |  |  | 2,681 |  |  | — |
Trade finance |  | 3,318 |  |  | 3,318 |  |  | — |  |  | 3,124 |  |  | 3,124 |  |  | — |
Consumer and other |  | 680 |  |  | 765 |  |  | — |  |  | 997 |  |  | 1,144 |  |  | — |
Subtotal |  | $ | 24,217 |  |  | $ | 31,401 |  |  | $ | — |  |  | $ | 19,605 |  |  | $ | 26,593 |  |  | $ | — |
Total |  | $ | 27,935 |  |  | $ | 39,198 |  |  | $ | 1,115 |  |  | $ | 28,079 |  |  | $ | 37,159 |  |  | $ | 391 |
__________________________________ (1) Impaired loans exclude acquired PCI loans (2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts.
|  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
|  | 2019 |  | 2018 |  | 2019 |  | 2018
Impaired Acquired Loans (1) |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment |  | Average Recorded Investment(2) |  | Interest Income Recognized During Impairment
|  | (Dollars in thousands)
With related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | 125 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 84 |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 692 |  |  | — |  |  | 800 |  |  | — |  |  | 527 |  |  | — |  |  | 621 |  |  | — |
Hotel & motel |  | 73 |  |  | — |  |  | 79 |  |  | — |  |  | 73 |  |  | — |  |  | 81 |  |  | — |
Gas station & car wash |  | 30 |  |  | — |  |  | — |  |  | — |  |  | 20 |  |  | — |  |  | — |  |  | — |
Mixed use |  | 298 |  |  | 2 |  |  | 2,899 |  |  | 39 |  |  | 303 |  |  | 3 |  |  | 1,976 |  |  | 75 |
Industrial & warehouse |  | 282 |  |  | — |  |  | 266 |  |  | — |  |  | 264 |  |  | — |  |  | 251 |  |  | 1 |
Other |  | 544 |  |  | — |  |  | 3,314 |  |  | 19 |  |  | 1,999 |  |  | — |  |  | 2,316 |  |  | 37 |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 2,998 |  |  | 24 |  |  | 8,243 |  |  | 41 |  |  | 3,353 |  |  | 49 |  |  | 6,158 |  |  | 80 |
Trade finance |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other |  | 133 |  |  | — |  |  | 76 |  |  | 2 |  |  | 137 |  |  | — |  |  | 51 |  |  | 2 |
Subtotal |  | $ | 5,050 |  |  | $ | 26 |  |  | $ | 15,802 |  |  | $ | 101 |  |  | $ | 6,676 |  |  | $ | 52 |  |  | $ | 11,538 |  |  | $ | 195 |
With no related allowance: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail |  | 7,344 |  |  | 30 |  |  | 3,108 |  |  | 31 |  |  | 5,991 |  |  | 60 |  |  | 3,209 |  |  | 61 |
Hotel & motel |  | 5,371 |  |  | — |  |  | 1,029 |  |  | — |  |  | 5,390 |  |  | — |  |  | 847 |  |  | — |
Gas station & car wash |  | 215 |  |  | — |  |  | 193 |  |  | — |  |  | 225 |  |  | — |  |  | 129 |  |  | — |
Mixed use |  | 2,049 |  |  | — |  |  | 36 |  |  | — |  |  | 2,607 |  |  | — |  |  | 74 |  |  | — |
Industrial & warehouse |  | 93 |  |  | — |  |  | 491 |  |  | — |  |  | 106 |  |  | — |  |  | 342 |  |  | — |
Other |  | 4,749 |  |  | 67 |  |  | 4,475 |  |  | 60 |  |  | 3,504 |  |  | 133 |  |  | 6,027 |  |  | 117 |
Real estate – construction |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business |  | 1,640 |  |  | 31 |  |  | 8,380 |  |  | 24 |  |  | 1,650 |  |  | 64 |  |  | 6,660 |  |  | 38 |
Trade finance |  | 3,192 |  |  | 52 |  |  | 3,165 |  |  | 47 |  |  | 3,169 |  |  | 102 |  |  | 3,104 |  |  | 90 |
Consumer and other |  | 731 |  |  | — |  |  | 1,618 |  |  | — |  |  | 820 |  |  | — |  |  | 1,463 |  |  | — |
Subtotal |  | $ | 25,384 |  |  | $ | 180 |  |  | $ | 22,495 |  |  | $ | 162 |  |  | $ | 23,462 |  |  | $ | 359 |  |  | $ | 21,855 |  |  | $ | 306 |
Total |  | $ | 30,434 |  |  | $ | 206 |  |  | $ | 38,297 |  |  | $ | 263 |  |  | $ | 30,138 |  |  | $ | 411 |  |  | $ | 33,393 |  |  | $ | 501 |
__________________________________ (1) Impaired loans exclude acquired PCI loans (2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts. Generally, loans are placed on nonaccrual status if principal and/or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to customers whose financial condition has deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status only when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company did not recognize any cash basis interest income for the three and six months ended June 30, 2019 or 2018. The following table represents the recorded investment of nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans as of June 30, 2019 and December 31, 2018.
| Nonaccrual Loans(1) |  | Accruing Loans Past Due 90 or More Days
| June 30, 2019 |  | December 31, 2018 |  | June 30, 2019 |  | December 31, 2018
| (Dollars in thousands)
Legacy Loans: |  |  |  |  |  |  |
Real estate – residential | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |
Retail | 4,682 |  |  | 5,153 |  |  | — |  |  | — |
Hotel & motel | 6,503 |  |  | 7,325 |  |  | — |  |  | — |
Gas station & car wash | 31 |  |  | 31 |  |  | — |  |  | — |
Mixed use | 717 |  |  | 749 |  |  | — |  |  | — |
Industrial & warehouse | 7,278 |  |  | 6,111 |  |  | — |  |  | — |
Other | 10,794 |  |  | 5,940 |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |
Commercial business | 15,318 |  |  | 14,837 |  |  | — |  |  | — |
Trade finance | 2,721 |  |  | 1,661 |  |  | — |  |  | — |
Consumer and other | 2,205 |  |  | 441 |  |  | 353 |  |  | 243 |
Subtotal | $ | 50,249 |  |  | $ | 42,248 |  |  | $ | 353 |  |  | $ | 243 |
Acquired Loans: (2) |  |  |  |  |  |  |  |  |
Real estate – residential | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |
Retail | 5,350 |  |  | 829 |  |  | — |  |  | — |
Hotel & motel | 5,423 |  |  | 5,500 |  |  | — |  |  | 1,286 |
Gas station & car wash | 245 |  |  | 247 |  |  | — |  |  | — |
Mixed use | 370 |  |  | 1,224 |  |  | — |  |  | — |
Industrial & warehouse | 328 |  |  | 349 |  |  | — |  |  | — |
Other | 1,201 |  |  | 259 |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |
Commercial business | 958 |  |  | 1,632 |  |  | — |  |  | — |
Trade finance | — |  |  | — |  |  | — |  |  | — |
Consumer and other | 810 |  |  | 998 |  |  | — |  |  | — |
Subtotal | $ | 14,685 |  |  | $ | 11,038 |  |  | $ | — |  |  | $ | 1,286 |
Total | $ | 64,934 |  |  | $ | 53,286 |  |  | $ | 353 |  |  | $ | 1,529 |
__________________________________
(1) | Total nonaccrual loans exclude guaranteed portion of delinquent SBA loans that are in liquidation totaling $32.1 million and $29.2 million, at June 30, 2019 and December 31, 2018, respectively.
(2) | Acquired Loans exclude PCI loans.
The following tables present the recorded investment of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of June 30, 2019 and December 31, 2018 by class of loans:
| As of June 30, 2019 |  | As of December 31, 2018
| 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due |  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 or More Days Past Due |  | Total Past Due
| (Dollars in thousands)
Legacy Loans: |  |  |  |  |  |  |  |  |
Real estate – residential | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail | — |  |  | 811 |  |  | 297 |  |  | 1,108 |  |  | 733 |  |  | — |  |  | 809 |  |  | 1,542 |
Hotel & motel | 1,716 |  |  | 347 |  |  | 3,680 |  |  | 5,743 |  |  | 153 |  |  | — |  |  | 5,215 |  |  | 5,368 |
Gas station & car wash | 658 |  |  | — |  |  | 31 |  |  | 689 |  |  | — |  |  | — |  |  | 31 |  |  | 31 |
Mixed use | — |  |  | 174 |  |  | 184 |  |  | 358 |  |  | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | 74 |  |  | 849 |  |  | 3,387 |  |  | 4,310 |  |  | 1,465 |  |  | — |  |  | 1,922 |  |  | 3,387 |
Other | 8,576 |  |  | 133 |  |  | 7,359 |  |  | 16,068 |  |  | 1,837 |  |  | — |  |  | 2,405 |  |  | 4,242 |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business | 1,450 |  |  | 121 |  |  | 10,671 |  |  | 12,242 |  |  | 5,500 |  |  | 435 |  |  | 7,003 |  |  | 12,938 |
Trade finance | — |  |  | — |  |  | 2,721 |  |  | 2,721 |  |  | 1,036 |  |  | — |  |  | 1,661 |  |  | 2,697 |
Consumer and other | 5,721 |  |  | 250 |  |  | 1,796 |  |  | 7,767 |  |  | 16,413 |  |  | 140 |  |  | 247 |  |  | 16,800 |
Subtotal | $ | 18,195 |  |  | $ | 2,685 |  |  | $ | 30,126 |  |  | $ | 51,006 |  |  | $ | 27,137 |  |  | $ | 575 |  |  | $ | 19,293 |  |  | $ | 47,005 |
Acquired Loans: (1) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate – residential | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail | — |  |  | 38 |  |  | 5,001 |  |  | 5,039 |  |  | 347 |  |  | — |  |  | 602 |  |  | 949 |
Hotel & motel | — |  |  | — |  |  | 4,462 |  |  | 4,462 |  |  | — |  |  | — |  |  | 5,206 |  |  | 5,206 |
Gas station & car wash | — |  |  | — |  |  | 221 |  |  | 221 |  |  | 154 |  |  | — |  |  | 221 |  |  | 375 |
Mixed use | — |  |  | — |  |  | 194 |  |  | 194 |  |  | 107 |  |  | — |  |  | 1,034 |  |  | 1,141 |
Industrial & warehouse | 94 |  |  | 120 |  |  | 328 |  |  | 542 |  |  | 142 |  |  | — |  |  | 119 |  |  | 261 |
Other | 791 |  |  | — |  |  | 203 |  |  | 994 |  |  | 183 |  |  | 219 |  |  | — |  |  | 402 |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business | 84 |  |  | — |  |  | 237 |  |  | 321 |  |  | 397 |  |  | 613 |  |  | 253 |  |  | 1,263 |
Trade finance | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | 1,337 |  |  | 709 |  |  | 268 |  |  | 2,314 |  |  | — |  |  | — |  |  | 334 |  |  | 334 |
Subtotal | $ | 2,306 |  |  | $ | 867 |  |  | $ | 10,914 |  |  | $ | 14,087 |  |  | $ | 1,330 |  |  | $ | 832 |  |  | $ | 7,769 |  |  | $ | 9,931 |
Total Past Due | $ | 20,501 |  |  | $ | 3,552 |  |  | $ | 41,040 |  |  | $ | 65,093 |  |  | $ | 28,467 |  |  | $ | 1,407 |  |  | $ | 27,062 |  |  | $ | 56,936 |
__________________________________
(1) | Acquired Loans exclude PCI loans.
Loans accounted for under ASC 310-30 are generally considered accruing and performing and the accretable discount is accreted to interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due can still considered to be accruing and performing loans. The loans may be classified as nonaccrual if the timing and amount of future cash flows is not reasonably estimable. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all loans with the exception of homogeneous loans, or loans that are evaluated together in pools of similar loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans). Homogeneous loans are not risk rated and credit risk is analyzed largely by the number of days past due. This analysis is performed at least on a quarterly basis. The definitions for risk ratings are as follows:
• | Pass: Loans that meet a preponderance or more of the Company’s underwriting criteria and evidence an acceptable level of risk.
• | Special Mention: Loans that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.
• | Substandard: Loans that are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. Loans in this classification have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.
• | Doubtful: Loans that have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable.
The following tables present the recorded investment of risk ratings for Legacy and Acquired Loans as of June 30, 2019 and December 31, 2018 by class of loans:
| As of June 30, 2019
| Pass/ Not Rated |  | Special Mention |  | Substandard |  | Doubtful |  | Total
| (Dollars in thousands)
Legacy Loans: |  |  |
Real estate – residential | $ | 45,944 |  |  | $ | — |  |  | $ | 145 |  |  | $ | — |  |  | $ | 46,089 |
Real estate – commercial |  |  |  |  |  |  |  |  |
Retail | 1,784,344 |  |  | 35,150 |  |  | 36,712 |  |  | — |  |  | 1,856,206 |
Hotel & motel | 1,389,821 |  |  | 10,341 |  |  | 31,870 |  |  | — |  |  | 1,432,032 |
Gas station & car wash | 818,660 |  |  | 2,761 |  |  | 2,122 |  |  | — |  |  | 823,543 |
Mixed use | 550,044 |  |  | 12,967 |  |  | 13,559 |  |  | — |  |  | 576,570 |
Industrial & warehouse | 721,166 |  |  | 945 |  |  | 34,497 |  |  | — |  |  | 756,608 |
Other | 1,375,120 |  |  | 32,591 |  |  | 39,753 |  |  | — |  |  | 1,447,464 |
Real estate – construction | 252,432 |  |  | 16,249 |  |  | — |  |  | — |  |  | 268,681 |
Commercial business | 2,119,781 |  |  | 35,789 |  |  | 39,031 |  |  | — |  |  | 2,194,601 |
Trade finance | 160,669 |  |  | 73 |  |  | 2,721 |  |  | — |  |  | 163,463 |
Consumer and other | 787,796 |  |  | 184 |  |  | 2,266 |  |  | — |  |  | 790,246 |
Subtotal | $ | 10,005,777 |  |  | $ | 147,050 |  |  | $ | 202,676 |  |  | $ | — |  |  | $ | 10,355,503 |
Acquired Loans: |  |  |  |  |  |  |  |  |
Real estate – residential | $ | 4,362 |  |  | $ | 387 |  |  | $ | 329 |  |  | $ | — |  |  | $ | 5,078 |
Real estate – commercial |  |  |  |  |  |  |  |  |
Retail | 401,670 |  |  | 5,844 |  |  | 22,187 |  |  | — |  |  | 429,701 |
Hotel & motel | 166,101 |  |  | 298 |  |  | 19,161 |  |  | — |  |  | 185,560 |
Gas station & car wash | 121,640 |  |  | — |  |  | 5,039 |  |  | — |  |  | 126,679 |
Mixed use | 87,781 |  |  | 7,225 |  |  | 4,511 |  |  | — |  |  | 99,517 |
Industrial & warehouse | 153,008 |  |  | 4,132 |  |  | 19,708 |  |  | — |  |  | 176,848 |
Other | 351,841 |  |  | 10,066 |  |  | 28,680 |  |  | — |  |  | 390,587 |
Real estate – construction | — |  |  | 9,689 |  |  | — |  |  | — |  |  | 9,689 |
Commercial business | 53,607 |  |  | 1,778 |  |  | 15,300 |  |  | 1 |  |  | 70,686 |
Trade finance | — |  |  | — |  |  | 3,318 |  |  | — |  |  | 3,318 |
Consumer and other | 119,893 |  |  | 16 |  |  | 2,932 |  |  | — |  |  | 122,841 |
Subtotal | $ | 1,459,903 |  |  | $ | 39,435 |  |  | $ | 121,165 |  |  | $ | 1 |  |  | $ | 1,620,504 |
Total | $ | 11,465,680 |  |  | $ | 186,485 |  |  | $ | 323,841 |  |  | $ | 1 |  |  | $ | 11,976,007 |
| As of December 31, 2018
| Pass/ Not Rated |  | Special Mention |  | Substandard |  | Doubtful |  | Total
| (Dollars in thousands)
Legacy Loans: |  |  |
Real estate – residential | $ | 44,066 |  |  | $ | — |  |  | $ | 546 |  |  | $ | — |  |  | $ | 44,612 |
Real estate – commercial |  |  |  |  |  |  |  |  |
Retail | 1,815,170 |  |  | 18,072 |  |  | 30,686 |  |  | — |  |  | 1,863,928 |
Hotel & motel | 1,389,349 |  |  | 21,932 |  |  | 15,869 |  |  | — |  |  | 1,427,150 |
Gas station & car wash | 814,291 |  |  | 2,810 |  |  | 2,464 |  |  | — |  |  | 819,565 |
Mixed use | 510,021 |  |  | 12,480 |  |  | 13,292 |  |  | — |  |  | 535,793 |
Industrial & warehouse | 711,236 |  |  | 1,665 |  |  | 38,332 |  |  | — |  |  | 751,233 |
Other | 1,326,795 |  |  | 35,539 |  |  | 34,618 |  |  | — |  |  | 1,396,952 |
Real estate – construction | 227,231 |  |  | 10,904 |  |  | — |  |  | — |  |  | 238,135 |
Commercial business | 1,944,783 |  |  | 18,220 |  |  | 54,688 |  |  | — |  |  | 2,017,691 |
Trade finance | 191,508 |  |  | — |  |  | 2,558 |  |  | — |  |  | 194,066 |
Consumer and other | 910,292 |  |  | — |  |  | 441 |  |  | — |  |  | 910,733 |
Subtotal | $ | 9,884,742 |  |  | $ | 121,622 |  |  | $ | 193,494 |  |  | $ | — |  |  | $ | 10,199,858 |
Acquired Loans: |  |  |
Real estate – residential | $ | 5,812 |  |  | $ | 393 |  |  | $ | 380 |  |  | $ | — |  |  | $ | 6,585 |
Real estate – commercial |  |  |  |  |  |  |  |  |
Retail | 483,939 |  |  | 4,651 |  |  | 17,332 |  |  | 35 |  |  | 505,957 |
Hotel & motel | 186,761 |  |  | 807 |  |  | 19,472 |  |  | — |  |  | 207,040 |
Gas station & car wash | 148,702 |  |  | 274 |  |  | 6,032 |  |  | — |  |  | 155,008 |
Mixed use | 77,100 |  |  | 3,986 |  |  | 8,151 |  |  | — |  |  | 89,237 |
Industrial & warehouse | 171,574 |  |  | 9,451 |  |  | 18,071 |  |  | 223 |  |  | 199,319 |
Other | 402,247 |  |  | 12,902 |  |  | 28,996 |  |  | — |  |  | 444,145 |
Real estate – construction | 29,058 |  |  | 7,883 |  |  | — |  |  | — |  |  | 36,941 |
Commercial business | 89,611 |  |  | 1,083 |  |  | 19,237 |  |  | 8 |  |  | 109,939 |
Trade finance | — |  |  | — |  |  | 3,124 |  |  | — |  |  | 3,124 |
Consumer and other | 136,944 |  |  | 37 |  |  | 3,626 |  |  | 146 |  |  | 140,753 |
Subtotal | $ | 1,731,748 |  |  | $ | 41,467 |  |  | $ | 124,421 |  |  | $ | 412 |  |  | $ | 1,898,048 |
Total | $ | 11,616,490 |  |  | $ | 163,089 |  |  | $ | 317,915 |  |  | $ | 412 |  |  | $ | 12,097,906 |
The Company may reclassify loans held for investment to loans held for sale in the event that the Company plans to sell loans that were originated with the intent to hold to maturity. Loans transferred from held for investment to held for sale are carried at the lower of cost or fair value. The breakdown of loans by type that were reclassified from held for investment to held for sale for the three and six months ended June 30, 2019 and 2018 is presented in the following table:
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
Transfer of loans held for investment to held for sale | (Dollars in thousands)
Consumer | $ | 49,601 |  |  | $ | — |  |  | $ | 82,991 |  |  | $ | 6,155 |
The adequacy of the allowance for loan losses is determined by management based upon an evaluation and review of the credit quality of the loan portfolio, consideration of historical loan loss experience, relevant internal and external factors that affect the collection of loans, and other pertinent factors. Migration analysis is a formula methodology derived from the Bank’s actual historical net charge off experience for each loan class (type) or pool and risk grade. The migration analysis is centered on the Bank’s internal credit risk rating system. Management’s internal loan review and externally contracted credit review examinations are used to determine and validate loan risk grades. This credit review system takes into consideration factors such as: borrower’s background and experience; historical and current financial conditions; credit history and payment performance; economic conditions and their impact on various industries; type, fair value, and valuation volatility of collateral; lien positions; and the financial strength of any guarantors. A general loan loss allowance is provided on loans that are not specifically identified as impaired (“non-impaired loans”). The Bank’s general loan loss allowance has two components: quantitative and qualitative risk factors. The quantitative risk factors are based on the migration analysis methodology described above. Loans are classified by class and risk grade, and the historical loss migration is tracked for the various classes. Loss experience is quantified for a specified period and then weighted to place more significance on the most recent losses. That loss experience is then applied to the stratified portfolio at the end of each quarter. The Company utilizes nineteen non-homogeneous loan pools in the quantitative analysis process. The non-impaired commercial real estate loan portfolio is stratified into fourteen different loan pools based on property types and the non-impaired commercial and industrial and consumer loans are stratified into five different loan pools based on loan type in order to allocate historic loss experience on a more granular basis. Additionally, in order to systematically quantify the credit risk impact of other trends and changes within the loan portfolio, the Bank utilizes qualitative adjustments to the migration analysis within established parameters. The parameters for making adjustments are established under a Credit Risk Matrix that provides seven possible scenarios for each of the factors below. The matrix allows for up to three positive (Major, Moderate, and Minor), three negative (Major, Moderate, and Minor), and one neutral credit risk scenarios within each factor for each loan type or pool. However, if information exists to warrant adjustment to the migration analysis, changes are made in accordance with the established parameters supported by narrative and/or statistical analysis. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio by as much as 50 basis points in either direction (positive or negative) for each loan type pool. This matrix considers the following nine factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses:
• | Changes in lending policies and procedures, including underwriting standards and collection, charge off, and recovery practices;
• | Changes in national and local economic and business conditions and developments, including the condition of various market segments;
• | Changes in the nature and volume of the loan portfolio;
• | Changes in the experience, ability, and depth of lending management and staff;
• | Changes in the trends of the volume and severity of past due loans, classified loans, nonaccrual loans, troubled debt restructurings, and other loan modifications;
• | Changes in the quality of the loan review system and the degree of oversight by the Directors;
• | Changes in the value of underlying collateral for collateral-dependent loans;
• | The existence and effect of any concentrations of credit and changes in the level of such concentrations; and
• | The effect of external factors, such as competition, legal requirements, and regulatory requirements on the level of estimated losses in the loan portfolio.
The Company also establishes specific loss allowances for loans that have identified potential credit risk conditions or circumstances related to a specific individual credit. The specific allowance amounts are determined in accordance with ASC 310-10-35-22, “Measurement of Impairment.” The loans identified as impaired will be accounted for in accordance with one of the three acceptable valuation methods: 1) the present value of future cash flows discounted at the loan’s effective interest rate; 2) the loan’s observable market price; or 3) the fair value of the collateral, if the loan is collateral dependent. For the collateral dependent impaired loans, management obtains a new appraisal to determine the amount of impairment as of the date that the loan became impaired. The appraisals are based on an “as-is” valuation. To ensure that appraised values remain current, management either obtains updated appraisals every twelve months from a qualified independent appraiser or an internal evaluation of the collateral is performed by qualified personnel. If the third party market data indicates that the value of the collateral property has declined since the most recent valuation date, management adjusts the value of the property downward to reflect current market conditions. If the fair value of the collateral is less than the recorded amount of the loan, management recognizes impairment by creating or adjusting an existing valuation allowance with a corresponding charge to the provision for loan losses. If an impaired loan is expected to be collected through liquidation or operation of the underlying collateral, the loan is deemed to be collateral dependent and the amount of impairment is charged off against the allowance for loan losses. The Company considers a loan to be impaired when it is probable that not all amounts due (principal and interest) will be collectible in accordance with the contractual terms of the loan agreement. Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired. The significance of payment delays and payment shortfalls is determined on a case-by-case basis by taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed. For commercial business loans, real estate loans, and certain consumer loans, management bases the measurement of loan impairment on the present value of the expected future cash flows, discounted at the loan’s effective interest rate, or on the fair value of the loan’s collateral if the loan is collateral dependent. The scope for evaluation of individual impairment includes all impaired loans greater than $500 thousand. The Company evaluates most loans of $500 thousand or less for impairment on a collective basis because these loans generally have smaller balances and are homogeneous in the underwriting of terms and conditions. If a loan is deemed to be impaired, the amount of the impairment is supported by a specific allowance which is included in the allowance for loan losses through a charge to the provision for loan losses. For PCI loans, the allowance for loan losses is based upon expected cash flows for these loans. To the extent that a deterioration in borrower’s credit quality results in a decrease in expected cash flows subsequent to the acquisition of the loans, an allowance for loan losses would be established based on an estimate of future credit losses over the remaining life of the loans. Credit for loan losses for total acquired loans for the three months ended June 30, 2019 was $503 thousand which included $1.2 million in credit for loan losses related to PCI loans. Credit for loan losses on acquired loans for the six months ended June 30, 2019 was $383 thousand which included $2.2 million in credit for loan losses related to PCI loans. For the six months ended June 30, 2019, allowance for loan losses for PCI loans included an impairment credit adjustment of $878 thousand that resulted from a loan pool being paid off. Credit for loan losses for total acquired loans for the three months ended June 30, 2018 was $253 thousand which included $449 thousand in credit for loan losses related to PCI loans. Credit for loan losses on acquired loans for the six months ended June 30, 2018 was $2.5 million which included $637 thousand in credit for loan losses related to PCI loans. The following table presents breakdown of loans by impairment method at June 30, 2019 and December 31, 2018:
| As of June 30, 2019
| Real Estate – Residential |  | Real Estate – Commercial |  | Real Estate – Construction |  | Commercial Business |  | Trade Finance |  | Consumer and Other |  | Total
| (Dollars in thousands)
Impaired loans (recorded investment) | $ | — |  |  | $ | 66,363 |  |  | $ | — |  |  | $ | 30,387 |  |  | $ | 6,143 |  |  | $ | 3,077 |  |  | $ | 105,970 |
Specific allowance | $ | — |  |  | $ | 319 |  |  | $ | — |  |  | $ | 5,269 |  |  | $ | 333 |  |  | $ | 12 |  |  | $ | 5,933 |
Specific allowance to impaired loans | N/A |  |  | 0.48 | % |  | N/A |  |  | 17.34 | % |  | 5.42 | % |  | 0.39 | % |  | 5.60 | %
Other loans | $ | 51,167 |  |  | $ | 8,234,952 |  |  | $ | 278,370 |  |  | $ | 2,234,900 |  |  | $ | 160,638 |  |  | $ | 910,010 |  |  | $ | 11,870,037 |
General allowance | $ | 88 |  |  | $ | 52,433 |  |  | $ | 1,244 |  |  | $ | 26,086 |  |  | $ | 676 |  |  | $ | 7,606 |  |  | $ | 88,133 |
General allowance to other loans | 0.17 | % |  | 0.64 | % |  | 0.45 | % |  | 1.17 | % |  | 0.42 | % |  | 0.84 | % |  | 0.74 | %
Total loans | $ | 51,167 |  |  | $ | 8,301,315 |  |  | $ | 278,370 |  |  | $ | 2,265,287 |  |  | $ | 166,781 |  |  | $ | 913,087 |  |  | $ | 11,976,007 |
Total allowance for loan losses | $ | 88 |  |  | $ | 52,752 |  |  | $ | 1,244 |  |  | $ | 31,355 |  |  | $ | 1,009 |  |  | $ | 7,618 |  |  | $ | 94,066 |
Total allowance to total loans | 0.17 | % |  | 0.64 | % |  | 0.45 | % |  | 1.38 | % |  | 0.60 | % |  | 0.83 | % |  | 0.79 | %
| As of December 31, 2018
| Real Estate – Residential |  | Real Estate – Commercial |  | Real Estate – Construction |  | Commercial Business |  | Trade Finance |  | Consumer and Other |  | Total
| (Dollars in thousands)
Impaired loans (recorded investment) | $ | — |  |  | $ | 58,056 |  |  | $ | — |  |  | $ | 35,358 |  |  | $ | 9,011 |  |  | $ | 1,582 |  |  | $ | 104,007 |
Specific allowance | $ | — |  |  | $ | 437 |  |  | $ | — |  |  | $ | 4,351 |  |  | $ | — |  |  | $ | 3 |  |  | $ | 4,791 |
Specific allowance to impaired loans | N/A |  |  | 0.75 | % |  | N/A |  |  | 12.31 | % |  | — | % |  | 0.19 | % |  | 4.61 | %
Other loans | $ | 51,197 |  |  | $ | 8,337,271 |  |  | $ | 275,076 |  |  | $ | 2,092,272 |  |  | $ | 188,179 |  |  | $ | 1,049,904 |  |  | $ | 11,993,899 |
General allowance | $ | 112 |  |  | $ | 55,453 |  |  | $ | 765 |  |  | $ | 23,414 |  |  | $ | 719 |  |  | $ | 7,303 |  |  | $ | 87,766 |
General allowance to other loans | 0.22 | % |  | 0.67 | % |  | 0.28 | % |  | 1.12 | % |  | 0.38 | % |  | 0.70 | % |  | 0.73 | %
Total loans | $ | 51,197 |  |  | $ | 8,395,327 |  |  | $ | 275,076 |  |  | $ | 2,127,630 |  |  | $ | 197,190 |  |  | $ | 1,051,486 |  |  | $ | 12,097,906 |
Total allowance for loan losses | $ | 112 |  |  | $ | 55,890 |  |  | $ | 765 |  |  | $ | 27,765 |  |  | $ | 719 |  |  | $ | 7,306 |  |  | $ | 92,557 |
Total allowance to total loans | 0.22 | % |  | 0.67 | % |  | 0.28 | % |  | 1.30 | % |  | 0.36 | % |  | 0.69 | % |  | 0.77 | %
Under certain circumstances, the Company provides borrowers relief through loan modifications. These modifications are either temporary in nature (“temporary modifications”) or are more substantive. The temporary modifications generally consist of interest only payments for a three to six month period, whereby principal payments are deferred. At the end of the modification period, the remaining principal balance is re-amortized based on the original maturity date. Loans subject to temporary modifications are generally downgraded to Special Mention or Substandard. At the end of the modification period, the loan either 1) returns to the original contractual terms; 2) is further modified and accounted for as a troubled debt restructuring in accordance with ASC 310-10-35; or 3) is disposed of through foreclosure or liquidation. TDR loans are defined by ASC 310-40, “Troubled Debt Restructurings by Creditors” and evaluated for impairment in accordance with ASC 310-10-35. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed on the probability that the borrower will be in payment default on their debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s internal underwriting policy. At June 30, 2019, total TDR loans were $57.1 million, compared to $64.0 million at December 31, 2018. A summary of the recorded investment of TDR loans on accrual and nonaccrual status by type of concession as of June 30, 2019 and December 31, 2018 is presented below:
| As of June 30, 2019
| TDR Loans on Accrual Status |  | TDR Loans on Nonaccrual Status |  | Total TDRs
| Real Estate |  | Commercial Business |  | Other |  | Total |  | Real Estate |  | Commercial Business |  | Other |  | Total |
| (Dollars in thousands)
Payment concession | $ | 5,034 |  |  | $ | 960 |  |  | $ | 61 |  |  | $ | 6,055 |  |  | $ | 4,051 |  |  | $ | 553 |  |  | $ | — |  |  | $ | 4,604 |  |  | $ | 10,659 |
Maturity / amortization concession | 13,556 |  |  | 10,791 |  |  | 3,319 |  |  | 27,666 |  |  | — |  |  | 8,437 |  |  | 2,905 |  |  | 11,342 |  |  | 39,008 |
Rate concession | 4,547 |  |  | 2,359 |  |  | 104 |  |  | 7,010 |  |  | 373 |  |  | — |  |  | — |  |  | 373 |  |  | 7,383 |
Total | $ | 23,137 |  |  | $ | 14,110 |  |  | $ | 3,484 |  |  | $ | 40,731 |  |  | $ | 4,424 |  |  | $ | 8,990 |  |  | $ | 2,905 |  |  | $ | 16,319 |  |  | $ | 57,050 |
| As of December 31, 2018
| TDR Loans on Accrual Status |  | TDR Loans on Nonaccrual Status |  | Total TDRs
| Real Estate |  | Commercial Business |  | Other |  | Total |  | Real Estate |  | Commercial Business |  | Other |  | Total |
| (Dollars in thousands)
Payment concession | $ | 5,142 |  |  | $ | 961 |  |  | $ | — |  |  | $ | 6,103 |  |  | $ | 2,216 |  |  | $ | 746 |  |  | $ | — |  |  | $ | 2,962 |  |  | $ | 9,065 |
Maturity / amortization concession | 14,012 |  |  | 17,257 |  |  | 7,391 |  |  | 38,660 |  |  | — |  |  | 10,166 |  |  | 73 |  |  | 10,239 |  |  | 48,899 |
Rate concession | 4,872 |  |  | 672 |  |  | 103 |  |  | 5,647 |  |  | 401 |  |  | — |  |  | — |  |  | 401 |  |  | 6,048 |
Total | $ | 24,026 |  |  | $ | 18,890 |  |  | $ | 7,494 |  |  | $ | 50,410 |  |  | $ | 2,617 |  |  | $ | 10,912 |  |  | $ | 73 |  |  | $ | 13,602 |  |  | $ | 64,012 |
TDR loans on accrual status are comprised of loans that were accruing at the time of restructuring and for which the Company anticipates full repayment of both principal and interest under the restructured terms. TDR loans that are on nonaccrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments as modified. Sustained performance includes the periods prior to the modification if the prior performance met or exceeded the modified terms. TDR loans on accrual status at June 30, 2019 were comprised of 15 commercial real estate loans totaling $23.1 million, 33 commercial business loans totaling $14.1 million, and 14 consumer and other loans totaling $3.5 million. TDR loans on accrual status at December 31, 2018 were comprised of 20 commercial real estate loans totaling $24.0 million, 37 commercial business loans totaling $18.9 million and 6 consumer and other loans totaling $7.5 million. The Company expects that TDR loans on accrual status as of June 30, 2019, which were all performing in accordance with their restructured terms, to continue to comply with the restructured terms because of the reduced principal or interest payments on these loans. TDR loans that were restructured at market interest rates and had sustained performance as agreed under the modified loan terms may be reclassified as non-TDR after each year end but are reserved for under ASC 310-10. The Company has allocated $4.6 million and $3.0 million of specific reserves to TDR loans as of June 30, 2019 and December 31, 2018, respectively. The following tables present the recorded investment of loans classified as TDR during the three and six months ended June 30, 2019 and 2018 by class of loans:
| Three Months Ended June 30, 2019 |  | Three Months Ended June 30, 2018
| Number of Loans |  | Pre- Modification |  | Post- Modification |  | Number of Loans |  | Pre- Modification |  | Post- Modification
| (Dollars in thousands)
Legacy Loans: |  |  |  |  |  |  |  |  |  |  |
Real estate – residential | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |
Retail | — |  |  | — |  |  | — |  |  | 1 |  |  | 54 |  |  | 54 |
Hotel & motel | 1 |  |  | 730 |  |  | 730 |  |  | — |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Mixed use | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business | 7 |  |  | 447 |  |  | 447 |  |  | 10 |  |  | 2,830 |  |  | 2,830 |
Trade finance | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | 7 |  |  | 30 |  |  | 30 |  |  | 1 |  |  | 70 |  |  | 70 |
Subtotal | 15 |  |  | $ | 1,207 |  |  | $ | 1,207 |  |  | 12 |  |  | $ | 2,954 |  |  | $ | 2,954 |
Acquired Loans: |  |  |  |  |  |  |  |  |  |  |
Real estate – residential | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail | 1 |  |  | 27 |  |  | 27 |  |  | — |  |  | — |  |  | — |
Hotel & motel | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Mixed use | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other | 2 |  |  | 961 |  |  | 961 |  |  | — |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business | 1 |  |  | 132 |  |  | 132 |  |  | 2 |  |  | 1,348 |  |  | 1,348 |
Trade finance | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Subtotal | 4 |  |  | $ | 1,120 |  |  | $ | 1,120 |  |  | 2 |  |  | $ | 1,348 |  |  | $ | 1,348 |
Total | 19 |  |  | $ | 2,327 |  |  | $ | 2,327 |  |  | 14 |  |  | $ | 4,302 |  |  | $ | 4,302 |
| Six Months Ended June 30, 2019 |  | Six Months Ended June 30, 2018
| Number of Loans |  | Pre- Modification |  | Post- Modification |  | Number of Loans |  | Pre- Modification |  | Post- Modification
| (Dollars in thousands)
Legacy Loans: |  |  |  |  |  |  |  |  |  |  |
Real estate – residential | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | — |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |
Retail | — |  |  | — |  |  | — |  |  | 2 |  |  | 66 |  |  | 66 |
Hotel & motel | 2 |  |  | 880 |  |  | 880 |  |  | — |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Mixed use | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | — |  |  | — |  |  | — |  |  | 1 |  |  | 2,093 |  |  | 2,093 |
Other | 1 |  |  | 92 |  |  | 92 |  |  | 1 |  |  | 1,231 |  |  | 1,231 |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business | 12 |  |  | 3,143 |  |  | 3,143 |  |  | 13 |  |  | 6,486 |  |  | 6,486 |
Trade finance | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | 13 |  |  | 62 |  |  | 62 |  |  | 1 |  |  | 70 |  |  | 70 |
Subtotal | 28 |  |  | $ | 4,177 |  |  | $ | 4,177 |  |  | 18 |  |  | $ | 9,946 |  |  | $ | 9,946 |
Acquired Loans: |  |  |  |  |  |  |  |  |  |  |
Real estate – residential | — |  |  | $ | — |  |  | $ | — |  |  | — |  |  | $ | — |  |  | $ | 498 |
Real estate – commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Retail | 2 |  |  | 125 |  |  | 125 |  |  | 1 |  |  | 207 |  |  | 207 |
Hotel & motel | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Mixed use | — |  |  | — |  |  | — |  |  | 1 |  |  | 2,714 |  |  | 2,714 |
Industrial & warehouse | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Other | 2 |  |  | 961 |  |  | 961 |  |  | 1 |  |  | 1,047 |  |  | 1,047 |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Commercial business | 2 |  |  | 167 |  |  | 167 |  |  | 2 |  |  | 1,348 |  |  | 1,348 |
Trade finance | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer and other | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Subtotal | 6 |  |  | $ | 1,253 |  |  | $ | 1,253 |  |  | 5 |  |  | $ | 5,316 |  |  | $ | 5,814 |
Total | 34 |  |  | $ | 5,430 |  |  | $ | 5,430 |  |  | 23 |  |  | $ | 15,262 |  |  | $ | 15,760 |
For TDRs modified during the three and six months ended June 30, 2019, the Company recorded $31 thousand and $52 thousand, respectively, in specific reserves. Total charge-offs of TDR loans modified during the three and six months ended June 30, 2019 totaled 33 thousand. For TDR loans modified during the three and six months ended June 30, 2018, the Company recorded $44 thousand and $1.1 million, respectively, in specific reserves. Total charge-offs of TDR loans modified during the three and six months ended June 30, 2018 totaled $131 thousand. The following table presents loans modified as TDRs within the previous twelve months ended June 30, 2019 and June 30, 2018 that subsequently had payment defaults during the three and six months ended June 30, 2019 and June 30, 2018:
| Three Months Ended June 30, 2019 |  | Three Months Ended June 30, 2018
| Number of Loans |  | Balance |  | Number of Loans |  | Balance
| (Dollars in thousands)
Legacy Loans: |  |  |  |  |  |  |
Real estate – commercial |  |  |  |  |  |  |
Retail | — |  |  | $ | — |  |  | — |  |  | $ | — |
Hotel & motel | — |  |  | — |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |
Mixed Use | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | — |  |  | — |  |  | — |  |  | — |
Other | 1 |  |  | 92 |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |
Commercial business | — |  |  | — |  |  | 4 |  |  | 1,188 |
Trade finance | — |  |  | — |  |  | — |  |  | — |
Consumer and other | 6 |  |  | 39 |  |  | — |  |  | — |
Subtotal | 7 |  |  | $ | 131 |  |  | 4 |  |  | $ | 1,188 |
Acquired Loans: |  |  |  |  |  |  |
Real estate – commercial |  |  |  |  |  |  |  |  |
Retail | — |  |  | $ | — |  |  | — |  |  | $ | — |
Hotel & motel | 1 |  |  | 73 |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |
Mixed Use | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | 1 |  |  | 234 |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |
Commercial business | 3 |  |  | 150 |  |  | — |  |  | — |
Trade finance | — |  |  | — |  |  | — |  |  | — |
Consumer and other | — |  |  | — |  |  | — |  |  | — |
Subtotal | 5 |  |  | $ | 457 |  |  | — |  |  | $ | — |
Total | 12 |  |  | $ | 588 |  |  | 4 |  |  | $ | 1,188 |
| Six Months Ended June 30, 2019 |  | Six Months Ended June 30, 2018
| Number of Loans |  | Balance |  | Number of Loans |  | Balance
| (Dollars in thousands)
Legacy Loans: |  |  |  |  |  |  |
Real estate – commercial |  |  |  |  |  |  |
Retail | — |  |  | $ | — |  |  | — |  |  | $ | — |
Hotel & motel | — |  |  | — |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |
Mixed Use | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | — |  |  | — |  |  | — |  |  | — |
Other | 1 |  |  | 92 |  |  | — |  |  | — |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |
Commercial business | — |  |  | — |  |  | 4 |  |  | 1,188 |
Trade finance | — |  |  | — |  |  | — |  |  | — |
Consumer and other | 6 |  |  | 39 |  |  | — |  |  | — |
Subtotal | 7 |  |  | $ | 131 |  |  | 4 |  |  | $ | 1,188 |
Acquired Loans: |  |  |  |  |  |  |
Real estate – commercial |  |  |  |  |  |  |  |  |
Retail | — |  |  | $ | — |  |  | — |  |  | $ | — |
Hotel & motel | 1 |  |  | 73 |  |  | — |  |  | — |
Gas station & car wash | — |  |  | — |  |  | — |  |  | — |
Mixed Use | — |  |  | — |  |  | — |  |  | — |
Industrial & warehouse | 1 |  |  | 234 |  |  | — |  |  | — |
Other | — |  |  | — |  |  | 1 |  |  | 3,108 |
Real estate – construction | — |  |  | — |  |  | — |  |  | — |
Commercial business | 4 |  |  | 218 |  |  | 1 |  |  | — |
Trade finance | — |  |  | — |  |  | — |  |  | — |
Consumer and other | — |  |  | — |  |  | — |  |  | — |
Subtotal | 6 |  |  | $ | 525 |  |  | 2 |  |  | $ | 3,108 |
Total | 13 |  |  | $ | 656 |  |  | 6 |  |  | $ | 4,296 |
A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. The Company recorded $85 thousand and $119 thousand, respectively, in specific reserves for TDR loans that had payment defaults during the three and six months ended June 30, 2019. Total charge offs for TDR loans that had payment defaults during the three and six months ended June 30, 2019 was $67 thousand. There were seven Legacy TDR loans and six Acquired TDR loans that subsequently defaulted during the six months ended June 30, 2019. Legacy TDR loans were modified as follows: one commercial real estate loan totaling $92 thousand was modified through a payment extension and six consumer loans totaling $39 thousand were modified through payment extensions. Acquired TDR loans that defaulted were modified as follows: two commercial real estate loans totaling $307 thousand was modified through payment extensions and four commercial business loans totaling $218 thousand were modified through payment extensions. As of June 30, 2018, there were $33 thousand specific reserves for the TDR loans that had payment defaults during the three and six months ended June 30, 2018. There were $51 thousand charge offs for TDR loans that had payment defaults during the three and six months ended June 30, 2018. There were four commercial business Legacy TDR loans totaling $1.2 million that subsequently defaulted during the six months ended June 30, 2018 that was modified through maturity extensions. There was one real estate commercial Acquired TDR loan totaling $3.1 million that subsequently defaulted during the six months ended June 30, 2018 that was modified through a payment concession.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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