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Loans and the Allowance for Loan Losses (Tables) | 9 Months Ended
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Sep. 30, 2020
Receivables [Abstract] |
Schedule of Accounts, Notes, Loans and Financing Receivable [Table Text Block] | Loans Receivable - The following table sets forth the composition of the Company’s loan portfolio segments, including net deferred fees, as of September 30, 2020 and December 31, 2019:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Commercial(1) |  | $ | 1,631,434 |  |  | $ | 1,129,661 |
Commercial real estate |  |  | 3,672,462 |  |  |  | 3,041,959 |
Commercial construction |  |  | 614,112 |  |  |  | 623,326 |
Residential real estate |  |  | 343,376 |  |  |  | 320,020 |
Consumer |  |  | 1,876 |  |  |  | 3,328 |
Gross loans |  |  | 6,263,260 |  |  |  | 5,118,294 |
Net deferred loan fees |  |  | (12,209 | ) |  |  | (4,767 | )
Total loans receivable |  | $ | 6,251,051 |  |  | $ | 5,113,527 |
Loans held for sale [Table Text Block] | Loans held-for-sale - The following table sets forth the composition of the Company’s loans held-for-sale portfolio as of September 30, 2020 and December 31, 2019:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Commercial |  | $ | - |  | $ | 2,285
Commercial real estate |  |  | 6,460 |  |  | 30,965
Residential real estate |  |  | 2,048 |  |  | -
Total carrying amount |  | $ | 8,508 |  | $ | 33,250
Loans and Leases Receivable Purchase Credit Impaired Loans [Table Text Block] | Purchased Credit-Impaired Loans - The Company holds purchased loans for which there was, at their acquisition date, evidence of deterioration of credit quality since their origination and it was probable, at acquisition, that all contractually required payments would not be collected. The recorded investment of those loans is as follows as of September 30, 2020 and December 31, 2019.
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Commercial |  | $ | 3,868 |  | $ | 5,452
Commercial real estate |  |  | 5,525 |  |  | 1,101
Commercial construction |  |  | 4,127 |  |  | -
|  | $ | 13,520 |  | $ | 6,553
Loans and Leases Receivable Purchased Loans [Table Text Block] | The following table presents the accretable yield, or income expected to be collected, on the purchased credit-impaired loans for the three and nine months ended September 30, 2020 and September 30, 2019:
|  | Three Months |  | Three Months
|  | Ended |  | Ended
|  | September 30, |  | September 30,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Balance at June 30 |  | $ | 1,325 |  |  | $ | 2,213 |
Accretion of income |  |  | (124 | ) |  |  | (575 | )
Balance as of September 30 |  | $ | 1,201 |  |  | $ | 1,638 |
|  | Nine Months |  | Nine Months
|  | Ended |  | Ended
|  | September 30, |  | September 30,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Balance as of December 31 |  | $ | 1,301 |  |  | $ | 1,134 |
New loans acquired |  |  | 605 |  |  |  | 1,286 |
Accretion of income |  |  | (705 | ) |  |  | (782 | )
Balance as of September 30 |  | $ | 1,201 |  |  | $ | 1,638 |
Schedule of Financing Receivables, Non Accrual Status [Table Text Block] | Loans Receivable on Nonaccrual Status - The following tables present nonaccrual loans included in loans receivable by loan class as of September 30, 2020 and December 31, 2019:
|  | September 30, |  | December 31,
|  | 2020 |  | 2019
|  | (dollars in thousands)
Commercial |  | $ | 33,108 |  | $ | 31,455
Commercial real estate |  |  | 9,378 |  |  | 8,338
Commercial construction |  |  | 17,727 |  |  | 6,773
Residential real estate |  |  | 5,281 |  |  | 2,915
Total nonaccrual loans |  | $ | 65,494 |  | $ | 49,481
Financing Receivable Credit Quality Indicators [Table Text Block] | Credit Quality Indicators - The Company continuously monitors the credit quality of its loans receivable. In addition to its internal monitoring, the Company utilizes the services of a third-party loan review firm to periodically validate the credit quality of its loans receivable on a sample basis. Credit quality is monitored by reviewing certain credit quality indicators. Assets classified “Pass” are deemed to possess average to superior credit quality, requiring no more than normal attention. Assets classified as “Special Mention” have generally acceptable credit quality yet possess higher risk characteristics/circumstances than satisfactory assets. Such conditions include strained liquidity, slow pay, stale financial statements, or other conditions that require more stringent attention from the lending staff. These conditions, if not corrected, may weaken the loan quality or inadequately protect the Company’s credit position at some future date. Assets are classified “Substandard” if the asset has a well-defined weakness that requires management’s attention to a greater degree than for loans classified special mention. Such weakness, if left uncorrected, could possibly result in the compromised ability of the loan to perform to contractual requirements. An asset is classified as “Doubtful” if it is inadequately protected by the net worth and/or paying capacity of the obligor or of the collateral, if any, that secures the obligation. Assets classified as doubtful include assets for which there is a “distinct possibility” that a degree of loss will occur if the inadequacies are not corrected. All loans past due 90 days or greater and all impaired loans are included in the appropriate category below. The following table presents information about the loan credit quality by loan class of gross loans (which exclude net deferred fees) as of September 30, 2020 and December 31, 2019:
|  | September 30, 2020
|  |  |  |  | Special |  |  |  |  |  |  |  |  |
|  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Total
|  | (dollars in thousands)
Commercial |  | $ | 1,566,486 |  | $ | 20,608 |  | $ | 44,340 |  | $ | - |  | $ | 1,631,434
Commercial real estate |  |  | 3,637,852 |  |  | 13,419 |  |  | 21,191 |  |  | - |  |  | 3,672,462
Commercial construction |  |  | 583,749 |  |  | - |  |  | 30,363 |  |  | - |  |  | 614,112
Residential real estate |  |  | 332,686 |  |  | - |  |  | 10,690 |  |  | - |  |  | 343,376
Consumer |  |  | 1,874 |  |  | - |  |  | 2 |  |  | - |  |  | 1,876
Gross loans |  | $ | 6,121,647 |  | $ | 34,027 |  | $ | 106,586 |  | $ | - |  | $ | 6,263,260
|  | December 31, 2019
|  |  |  |  | Special |  |  |  |  |  |  |  |  |
|  | Pass |  | Mention |  | Substandard |  | Doubtful |  | Total
|  | (dollars in thousands)
Commercial |  | $ | 1,059,852 |  | $ | 22,159 |  | $ | 47,650 |  | $ | - |  | $ | 1,129,661
Commercial real estate |  |  | 3,014,956 |  |  | 10,301 |  |  | 16,702 |  |  | - |  |  | 3,041,959
Commercial construction |  |  | 604,298 |  |  | 4,609 |  |  | 14,419 |  |  | - |  |  | 623,326
Residential real estate |  |  | 316,476 |  |  | - |  |  | 3,544 |  |  | - |  |  | 320,020
Consumer |  |  | 3,328 |  |  | - |  |  | - |  |  | - |  |  | 3,328
Gross loans |  | $ | 4,998,910 |  | $ | 37,069 |  | $ | 82,315 |  | $ | - |  | $ | 5,118,294
Impaired Financing Receivables [Table Text Block] | The following table provides an analysis of the impaired loans by class as of September 30, 2020 and December 31, 2019.
|  | September 30, 2020
|  |  |  |  | Unpaid |  |  |
|  | Recorded |  | Principal |  | Related
|  | Investment |  | Balance |  | Allowance
No related allowance recorded |  | (dollars in thousands)
Commercial |  | $ | 12,185 |  | $ | 12,588 |  |  |
Commercial real estate |  |  | 12,400 |  |  | 12,696 |  |  |
Commercial construction |  |  | 21,019 |  |  | 21,490 |  |  |
Residential real estate |  |  | 3,981 |  |  | 4,311 |  |  |
Total (no related allowance) |  | $ | 49,585 |  | $ | 51,085 |  |  |
With an allowance recorded |  |  |  |  |  |  |  |  |
Commercial |  |  | 23,024 |  |  | 68,406 |  | $ | 10,000
Commercial real estate |  |  | 2,722 |  |  | 2,722 |  |  | 1,000
Commercial construction |  |  | 2,934 |  |  | 2,934 |  |  | 302
Residential real estate |  |  | 261 |  |  | 261 |  |  | 47
Total (with allowance) |  | $ | 28,941 |  | $ | 74,323 |  | $ | 11,349
Total |  |  |  |  |  |  |  |  |
Commercial |  | $ | 35,209 |  | $ | 80,994 |  | $ | 10,000
Commercial real estate |  |  | 15,122 |  |  | 15,418 |  |  | 1,000
Commercial construction |  |  | 23,953 |  |  | 24,424 |  |  | 302
Residential real estate |  |  | 4,242 |  |  | 4,572 |  |  | 47
Total |  | $ | 78,526 |  | $ | 125,408 |  | $ | 11,349
|  | December 31, 2019
|  |  |  |  | Unpaid |  |  |
|  | Recorded |  | Principal |  | Related
|  | Investment |  | Balance |  | Allowance
No related allowance recorded |  | (dollars in thousands)
Commercial |  | $ | 37,984 |  | $ | 83,225 |  |  |
Commercial real estate |  |  | 15,249 |  |  | 15,467 |  |  |
Commercial construction |  |  | 8,649 |  |  | 8,649 |  |  |
Residential real estate |  |  | 1,311 |  |  | 1,463 |  |  |
Consumer |  |  | - |  |  | - |  |  |
Total (no related allowance) |  | $ | 63,193 |  | $ | 108,804 |  |  |
With an allowance recorded |  |  |  |  |  |  |  |  |
Commercial construction |  | $ | 3,530 |  | $ | 3,530 |  | $ | 1,244
Residential real estate |  |  | 263 |  |  | 263 |  |  | 23
Total (with allowance) |  | $ | 3,793 |  | $ | 3,793 |  | $ | 1,267
Total |  |  |  |  |  |  |  |  |
Commercial |  | $ | 37,984 |  | $ | 83,225 |  | $ | -
Commercial real estate |  |  | 15,249 |  |  | 15,467 |  |  | -
Commercial construction |  |  | 12,179 |  |  | 12,179 |  |  | 1,244
Residential real estate |  |  | 1,574 |  |  | 1,726 |  |  | 23
Consumer |  |  | - |  |  | - |  |  | -
Total |  | $ | 66,986 |  | $ | 112,597 |  | $ | 1,267
Schedule of Average Balance and Interest Income Recognized on Impaired Loans [Table Text Block] | The following table provides an analysis related to the average recorded investment and interest income recognized on impaired loans by segment as of and for the three and nine months ended September 30, 2020 and 2019:
| Three Months Ended September 30, |  | Nine Months Ended September 30, |
| 2020 |  | 2019 |  | 2020 |  | 2019 |
| Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized |  | Average Recorded Investment |  | Interest Income Recognized |
|  | (dollars in thousands) |
Impaired loans (no allowance) |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | $ | 12,266 |  | $ | 50 |  | $ | 41,332 |  | $ | 570 |  | $ | 12,100 |  | $ | 150 |  | $ | 41,731 |  | $ | 733 |
Commercial real estate |  | 12,460 |  |  | 74 |  |  | 12,178 |  |  | 79 |  |  | 12,415 |  |  | 229 |  |  | 12,213 |  |  | 221 |
Commercial construction |  | 21,297 |  |  | 91 |  |  | 6,044 |  |  | 58 |  |  | 21,149 |  |  | 262 |  |  | 6,047 |  |  | 138 |
Residential real estate |  | 4,011 |  |  | 16 |  |  | 1,552 |  |  | - |  |  | 3,761 |  |  | 16 |  |  | 1,579 |  |  | 19 |
Total | $ | 50,034 |  | $ | 231 |  | $ | 61,106 |  | $ | 707 |  | $ | 49,425 |  | $ | 657 |  | $ | 61,570 |  | $ | 1,111 |
Impaired loans (allowance): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | $ | 23,024 |  | $ | - |  | $ | 392 |  | $ | - |  | $ | 23,195 |  | $ | - |  | $ | 393 |  | $ | - |
Commercial real estate |  | 2,722 |  |  | - |  |  | 392 |  |  | - |  |  | 2,722 |  |  | - |  |  | 393 |  |  | - |
Commercial construction |  | 2,934 |  |  | - |  |  | 6,439 |  |  | 220 |  |  | 2,934 |  |  | - |  |  | 6,378 |  |  | 220 |
Residential real estate |  | 261 |  |  | 5 |  |  | 252 |  |  | 9 |  |  | 262 |  |  | 5 |  |  | 255 |  |  | 9 |
Total | $ | 28,941 |  | $ | 5 |  | $ | 7,083 |  | $ | 936 |  | $ | 29,113 |  | $ | 5 |  | $ | 7,026 |  | $ | 229 |
Total impaired loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Commercial | $ | 35,290 |  | $ | 50 |  | $ | 41,332 |  | $ | 570 |  | $ | 35,295 |  | $ | 150 |  | $ | 41,731 |  | $ | 733 |
Commercial real estate |  | 15,182 |  |  | 74 |  |  | 12,570 |  |  | 79 |  |  | 15,137 |  |  | 229 |  |  | 12,606 |  |  | 221 |
Commercial construction |  | 24,231 |  |  | 91 |  |  | 12,483 |  |  | 278 |  |  | 24,083 |  |  | 262 |  |  | 12,425 |  |  | 358 |
Residential real estate |  | 4,272 |  |  | 21 |  |  | 1,804 |  |  | 9 |  |  | 4,023 |  |  | 21 |  |  | 1,834 |  |  | 28 |
Total | $ | 78,975 |  | $ | 236 |  | $ | 68,189 |  | $ | 936 |  | $ | 78,538 |  | $ | 662 |  | $ | 68,596 |  | $ | 1,340 |
Past Due Financing Receivables [Table Text Block] | Aging Analysis - The following table provides an analysis of the aging of the loans by class, excluding net deferred fees, that are past due as of September 30, 2020 and December 31, 2019:
|  | September 30, 2020
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due and Still Accruing |  | Nonaccrual |  | Total Past Due and Nonaccrual |  | Current |  | Gross Loans
|  | (dollars in thousands)
Commercial |  | $ | 119 |  | $ | 403 |  | $ | 3,156 |  | $ | 33,108 |  | $ | 36,786 |  | $ | 1,594,648 |  | $ | 1,631,434
Commercial real estate |  |  | - |  |  | 3,927 |  |  | 5,525 |  |  | 9,378 |  |  | 18,830 |  |  | 3,653,632 |  |  | 3,672,462
Commercial construction |  |  | 338 |  |  | 1,265 |  |  | - |  |  | 17,727 |  |  | 19,330 |  |  | 594,782 |  |  | 614,112
Residential real estate |  |  | 1,434 |  |  | 227 |  |  | 4,127 |  |  | 5,281 |  |  | 11,069 |  |  | 332,307 |  |  | 343,376
Consumer |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 1,876 |  |  | 1,876
Total |  | $ | 1,891 |  | $ | 5,822 |  | $ | 12,808 |  | $ | 65,494 |  | $ | 86,015 |  | $ | 6,177,245 |  | $ | 6,263,260
Included in the 90 days or greater past due and still accruing category as of September 30, 2020 are purchased credit-impaired loans, net of fair value marks, which accrete income per the valuation at date of acquisition.
|  | December 31, 2019
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days or Greater Past Due and Still Accruing |  | Nonaccrual |  | Total Past Due and Nonaccrual |  | Current |  | Total Loans Receivable
Commercial |  | $ | 239 |  | $ | - |  | $ | 3,107 |  | $ | 31,455 |  | $ | 34,801 |  | $ | 1,094,860 |  | $ | 1,129,661
Commercial real estate |  |  | 1,980 |  |  | 490 |  |  | - |  |  | 8,338 |  |  | 10,808 |  |  | 3,031,151 |  |  | 3,041,959
Commercial construction |  |  | - |  |  | - |  |  | - |  |  | 6,773 |  |  | 6,773 |  |  | 616,553 |  |  | 623,326
Residential real estate |  |  | 3,357 |  |  | 143 |  |  | - |  |  | 2,915 |  |  | 6,415 |  |  | 313,605 |  |  | 320,020
Consumer |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 3,328 |  |  | 3,328
Total |  | $ | 5,576 |  | $ | 633 |  | $ | 3,107 |  | $ | 49,481 |  | $ | 58,797 |  | $ | 5,059,497 |  | $ | 5,118,294
Schedule of Recorded Investment in Financing Receivables [Table Text Block] | The following tables detail, at the period-end presented, the amount of gross loans (excluding loans held-for-sale) that are evaluated individually, and collectively, for impairment, those acquired with deteriorated quality, and the related portion of the allowance for loan losses that are allocated to each loan portfolio segment:
|  | September 30, 2020
|  |  |  | Commercial |  | Commercial |  | Residential |  |  |  |  |  |  |  |  |
|  | Commercial |  | real estate |  | construction |  | real estate |  | Consumer |  | Unallocated |  | Total
|  | (dollars in thousands)
ALLL |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 10,000 |  | $ | 1,000 |  | $ | 302 |  | $ | 47 |  | $ | - |  |  |  |  | $ | 11,349
Collectively evaluated for impairment |  |  | 14,158 |  |  | 37,519 |  |  | 6,389 |  |  | 1,811 |  |  | 3 |  |  |  |  |  | 59,880
Acquired portfolio |  |  | - |  |  | 1,559 |  |  | 291 |  |  | 642 |  |  | - |  |  |  |  |  | 2,492
Acquired with deteriorated credit quality |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  |  |  | -
Unallocated |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 546 |  |  | 546
Total |  | $ | 24,158 |  | $ | 40,078 |  | $ | 6,982 |  | $ | 2,500 |  | $ | 3 |  | $ | 546 |  | $ | 74,267
Gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 35,209 |  | $ | 15,122 |  | $ | 23,953 |  | $ | 4,242 |  | $ | - |  |  |  |  | $ | 78,526
Collectively evaluated for impairment |  |  | 1,509,236 |  |  | 2,790,162 |  |  | 559,665 |  |  | 252,418 |  |  | 1,564 |  |  |  |  |  | 5,113,045
Acquired portfolio |  |  | 83,121 |  |  | 861,653 |  |  | 30,494 |  |  | 82,589 |  |  | 312 |  |  |  |  |  | 1,058,169
Acquired with deteriorated credit quality |  |  | 3,868 |  |  | 5,525 |  |  | - |  |  | 4,127 |  |  | - |  |  |  |  |  | 13,520
Total |  | $ | 1,631,434 |  | $ | 3,672,462 |  | $ | 614,112 |  | $ | 343,376 |  | $ | 1,876 |  |  |  |  | $ | 6,263,260
|  | December 31, 2019
|  |  |  | Commercial |  | Commercial |  | Residential |  |  |  |  |  |  |  |  |
|  | Commercial |  | real estate |  | construction |  | real estate |  | Consumer |  | Unallocated |  | Total
|  | (dollars in thousands)
Allowance for loan losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | - |  | $ | - |  | $ | 1,244 |  | $ | 23 |  | $ | - |  |  |  |  | $ | 1,267
Collectively evaluated for impairment |  |  | 8,309 |  |  | 19,967 |  |  | 5,744 |  |  | 1,662 |  |  | 3 |  |  |  |  |  | 35,685
Acquired portfolio |  |  | 40 |  |  | 886 |  |  | 316 |  |  | - |  |  | - |  |  |  |  |  | 1,242
Acquired with deteriorated credit quality |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  |  |  |  | -
Unallocated |  |  | - |  |  | - |  |  | - |  |  | - |  |  | - |  |  | 99 |  |  | 99
Total |  | $ | 8,349 |  | $ | 20,853 |  | $ | 7,304 |  | $ | 1,685 |  | $ | 3 |  | $ | 99 |  | $ | 38,293
Gross loans |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated for impairment |  | $ | 37,984 |  | $ | 15,249 |  | $ | 12,179 |  | $ | 1,574 |  | $ | - |  |  |  |  | $ | 66,986
Collectively evaluated for impairment |  |  | 1,011,708 |  |  | 2,669,999 |  |  | 578,620 |  |  | 276,177 |  |  | 3,064 |  |  |  |  |  | 4,539,568
Acquired portfolio |  |  | 74,517 |  |  | 355,610 |  |  | 32,527 |  |  | 42,269 |  |  | 264 |  |  |  |  |  | 505,187
Acquired with deteriorated credit quality |  |  | 5,452 |  |  | 1,101 |  |  | - |  |  | - |  |  | - |  |  |  |  |  | 6,553
|  | $ | 1,129,661 |  | $ | 3,041,959 |  | $ | 623,326 |  | $ | 320,020 |  | $ | 3,328 |  |  |  |  | $ | 5,118,294
Total |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Allowance for Credit Losses on Financing Receivables [Table Text Block] | A summary of the activity in the allowance for loan losses by loan segment is as follows:
|  | Three Months Ended September 30, 2020
|  |  |  |  |  | Commercial |  | Commercial |  | Residential |  |  |  |  |  |  |  |  |  |  |
|  | Commercial |  | real estate |  | construction |  | real estate |  | Consumer |  | Unallocated |  | Total
|  | (dollars in thousands)
Balance as of June 30, 2020 |  | $ | 9,345 |  |  | $ | 22,655 |  |  | $ | 8,026 |  | $ | 1,690 |  |  | $ | 5 |  |  | $ | 27,003 |  | $ | 68,724 |
Charge-offs |  |  | (48 | ) |  |  | - |  |  |  | - |  |  | (209 | ) |  |  | - |  |  |  | - |  |  | (257 | )
Recoveries |  |  | - |  |  |  | 800 |  |  |  | - |  |  | - |  |  |  | - |  |  |  | - |  |  | 800 |
Provision |  |  | 14,861 |  |  |  | 16,623 |  |  |  | (1,044 | ) |  | 1,019 |  |  |  | (2 | ) |  |  | (26,457 | ) |  | 5,000 |
Balance as of September 30, 2020 |  | $ | 24,158 |  |  | $ | 40,078 |  |  | $ | 6,982 |  | $ | 2,500 |  |  | $ | 3 |  |  | $ | 546 |  | $ | 74,267 |
|  | Three Months Ended September 30, 2019
|  |  |  |  |  | Commercial |  | Commercial |  | Residential |  |  |  |  |  |  |  |  |  |  |
|  | Commercial |  | real estate |  | construction |  | real estate |  | Consumer |  | Unallocated |  | Total
|  | (dollars in thousands)
Balance as of June 30, 2019 |  | $ | 8,721 |  |  | $ | 21,485 |  |  | $ | 5,542 |  | $ | 1,208 |  |  | $ | 2 |  |  | $ | 740 |  | $ | 37,698 |
Charge-offs |  |  | - |  |  |  | (387 | ) |  |  | - |  |  | (557 | ) |  |  | (20 | ) |  |  | - |  |  | (964 | )
Recoveries |  |  | 28 |  |  |  | - |  |  |  | - |  |  | - |  |  |  | 9 |  |  |  | - |  |  | 37 |
Provision |  |  | (424 | ) |  |  | (88 | ) |  |  | 1,633 |  |  | 1,110 |  |  |  | 13 |  |  |  | (244 | ) |  | 2,000 |
Balance as of September 30, 2019 |  | $ | 8,325 |  |  | $ | 21,010 |  |  | $ | 7,175 |  | $ | 1,761 |  |  | $ | 4 |  |  | $ | 496 |  | $ | 38,771 |
27
CONNECTONE BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 6. Loans and the Allowance for Loan Losses – (continued)
|  | Nine Months Ended September 30, 2020
|  |  |  |  |  | Commercial |  | Commercial |  | Residential |  |  |  |  |  |  |  |  |  |  |
|  | Commercial |  | real estate |  | construction |  | real estate |  | Consumer |  | Unallocated |  | Total
|  | (dollars in thousands)
Balance as of December 31, 2019 |  | $ | 8,349 |  |  | $ | 20,853 |  |  | $ | 7,304 |  | $ | 1,685 |  |  | $ | 3 |  |  | $ | 99 |  | $ | 38,293 |
Charge-offs |  |  | (552 | ) |  |  | - |  |  |  | - |  |  | (278 | ) |  |  | (3 | ) |  |  | - |  |  | (833 | )
Recoveries |  |  | 2 |  |  |  | 802 |  |  |  | - |  |  | - |  |  |  | 3 |  |  |  | - |  |  | 807 |
Provision |  |  | 16,359 |  |  |  | 18,423 |  |  |  | (322 | ) |  | 1,093 |  |  |  | - |  |  |  | 447 |  |  | 36,000 |
Balance as of September 30, 2020 |  | $ | 24,158 |  |  | $ | 40,078 |  |  | $ | 6,982 |  | $ | 2,500 |  |  | $ | 3 |  |  | $ | 546 |  | $ | 74,267 |
|  | Nine Months Ended September 30, 2019
|  |  |  |  |  | Commercial |  | Commercial |  | Residential |  |  |  |  |  |  |  |  |  |  |
|  | Commercial |  | real estate |  | construction |  | real estate |  | Consumer |  | Unallocated |  | Total
|  | (dollars in thousands)
Balance as of December 31, 2018 |  | $ | 9,875 |  |  | $ | 18,847 |  |  | $ | 4,519 |  | $ | 1,266 |  |  | $ | 2 |  |  | $ | 445 |  | $ | 34,954 |
Charge-offs |  |  | - |  |  |  | (3,469 | ) |  |  | - |  |  | (557 | ) |  |  | (20 | ) |  |  | - |  |  | (4,046 | )
Recoveries |  |  | 214 |  |  |  | 30 |  |  |  | - |  |  | 3 |  |  |  | 16 |  |  |  | - |  |  | 263 |
Provision |  |  | (1,764 | ) |  |  | 5,602 |  |  |  | 2,656 |  |  | 1,049 |  |  |  | 6 |  |  |  | 51 |  |  | 7,600 |
Balance as of September 30, 2019 |  | $ | 8,325 |  |  | $ | 21,010 |  |  | $ | 7,175 |  | $ | 1,761 |  |  | $ | 4 |  |  | $ | 496 |  | $ | 38,771 |
Schedule of Debtor Troubled Debt Restructuring, Current Period [Table Text Block] | The following table presents loans by class modified as TDRs that occurred during the nine months ended September 30, 2020:
| Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment
Troubled debt restructurings: | (dollars in thousands)
Commercial | 1 |  | $ | 191 |  | $ | 191
Commercial real estate | 1 |  |  | 97 |  |  | 97
Total | 2 |  | $ | 288 |  | $ | 288
The two loan modifications during the nine months ended September 30, 2020 were maturity extensions. There were no TDRs for which there was a payment default within twelve months following the modification during the three and nine months ended September 30, 2020. The following table presents loans by class modified as TDRs that occurred during the nine months ended September 30, 2019:
| Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment
Troubled debt restructurings: | (dollars in thousands)
Commercial | 8 |  | $ | 13,753 |  | $ | 13,753
Commercial real estate | 2 |  |  | 2,635 |  |  | 2,635
Commercial construction | 3 |  |  | 5,630 |  |  | 5,630
Total | 13 |  | $ | 22,018 |  | $ | 22,018
Schedule of Composition of Loans by Loan Segments | The following table sets forth the composition of these loans by loan segments as of September 30, 2020:
|  |  |  | Unpaid
|  | Number of |  | Principal
|  | Loans |  | Balance
|  | (dollars in thousands)
Commercial |  |  | 77 |  |  | $ | 51,594 |
Commercial real estate |  |  | 105 |  |  |  | 281,636 |
Commercial construction |  |  | 6 |  |  |  | 20 |
Residential real estate |  |  | 11 |  |  |  | 5,284 |
Total |  |  | 199 |  |  | $ | 355,167 |

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