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Loans Receivable

9 Months Ended

Sep. 30, 2020

Loans and Leases Receivable Disclosure [Abstract]

Loans Receivable

(a) Loan Origination/Risk Management

The Company originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. Accrued interest receivable was excluded from disclosures presenting the Company's amortized cost of loans receivable as it was deemed insignificant. Accrued interest receivable on loans totaled $15.6 million and $10.7 million at September 30, 2020 and December 31, 2019, respectively. No ACL on accrued interest receivable was recorded at September 30, 2020.

The Company categorizes loans in one of the four segments of the total loan portfolio: commercial business; one-to-four family residential; real estate construction and land development; and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. A detailed description of the portfolio segments and classes is contained in the 2019 Annual Form 10-K, except for SBA PPP loans. The Bank began originating SBA PPP loans during the three months ended June 30, 2020 following the passage of the CARES Act. SBA PPP loans are fully guaranteed by the SBA, intended for businesses impacted by COVID-19 and designed to provide near term relief to help small businesses sustain operations. These

loans have either a two-year or five-year maturity date and earn interest at 1%. The Bank also earned a fee based on the size of the loan, which is recognized over the life of the loan. The balance of unamortized net deferred fees on SBA PPP loans was $22.0 million at September 30, 2020. The Bank expects that the great majority of SBA PPP borrowers will seek full or partial forgiveness of their loan obligations in accordance with the CARES Act.

The CARES Act also provides temporary relief from the accounting and disclosure requirements for TDRs for certain loan modifications that are the result of a hardship that is related, either directly or indirectly, to the COVID-19 pandemic. In addition, interagency guidance issued by federal banking regulators and endorsed by the FASB staff has indicated that borrowers who receive relief are not TDRs if they meet qualifying criteria. The Company elected to apply the temporary relief under the CARES Act and related regulatory guidance to certain eligible short-term modifications, and therefore will not treat qualifying loan modifications as TDRs for accounting or disclosure purposes.

The regulatory agencies have also provided guidance regarding credit risk ratings, delinquency reporting and nonaccrual status for loans adversely impacted by COVID-19. The Bank will exercise judgment in determining the risk rating for impacted borrowers and will not automatically adversely classify credits that are affected by COVID-19. The Bank also will not designate loans with payment deferrals granted due to COVID-19 as past due because of the deferral. Due to the short-term nature of the forbearance and other relief programs we are offering as a result of the COVID-19 pandemic, we expect that borrowers granted relief under these programs will generally not be reported as nonaccrual during the deferral period.

The Company adopted ASU 2016-13 effective January 1, 2020, which increased the beginning ACL on loans as discussed in Note (4) Allowance for Credit Losses on Loans.

The amortized cost of loans receivable, net of ACL on loans at September 30, 2020 and December 31, 2019 consisted of the following portfolio segments and classes:


	September 30, 2020		December 31, 2019
	(In thousands)
Commercial business:
Commercial and industrial	$	750,557	$	852,220
SBA PPP	867,782		—
Owner-occupied CRE	859,338		805,234
Non-owner occupied CRE	1,384,973		1,288,779
Total commercial business	3,862,650		2,946,233
One-to-four family residential	131,921		131,660
Real estate construction and land development:
One-to-four family residential	99,650		104,296
Five or more family residential and commercial properties	215,472		170,350
Total real estate construction and land development	315,122		274,646
Consumer	357,037		415,340
Loans receivable	4,666,730		3,767,879
Allowance for credit losses on loans	(73,340)		(36,171)
Loans receivable, net	$	4,593,390	$	3,731,708

(b) Concentrations of Credit

As of September 30, 2020, and December 31, 2019, there were no concentrations of loans related to any single industry in excess of 10% of the Company’s total loans.

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans and (v) the general economic conditions of the United States of America and specifically the states of Washington and Oregon. The Company utilizes a risk grading matrix to assign a risk grade to each loan on a numerical scale of 1 to 10. Risk grades are aggregated to create the risk categories

of "Pass" for grades 1 to 6, "Special Mention" ("SM") for grade 7, "Substandard" ("SS") for grade 8, "Doubtful" for grade 9 and "Loss" for grade 10. Descriptions of the general characteristics of the risk grades, including qualitative information on how the risk grades relate to the risk of loss, are contained in the 2019 Annual Form 10-K. There were no loans with a risk grade of doubtful or loss at September 30, 2020.

Numerical loan grades for loans are established at the origination of the loan. Changes to loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower, and scheduled loan reviews performed by the Bank’s internal Loan Review department. For consumer loans, the Bank follows the FDIC’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency, direct communications with the borrower, or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property.

The following table presents the amortized cost of loans receivable by risk grade as of September 30, 2020:


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans (1)		Loans Receivable
	2020		2019		2018		2017		2016		Prior
	(In thousands)
Commercial business:
Commercial and industrial
Pass	$	64,817	$	142,409	$	79,659	$	53,491	$	45,436	$	116,934	$	144,505	$	802	$	648,053
SM	13,117		6,355		5,622		2,244		1,683		2,104		18,188		98		49,411
SS	2,580		11,418		5,160		8,884		2,361		10,440		8,324		3,926		53,093

Total	80,514		160,182		90,441		64,619		49,480		129,478		171,017		4,826		750,557
SBA PPP
Pass	867,782		—		—		—		—		—		—		—		867,782



Total	867,782		—		—		—		—		—		—		—		867,782
Owner-occupied CRE
Pass	78,911		167,369		99,922		88,349		78,693		275,986		—		—		789,230
SM	—		—		3,344		7,789		5,499		23,170		—		—		39,802
SS	—		—		117		7,379		3,348		19,462		—		—		30,306

Total	78,911		167,369		103,383		103,517		87,540		318,618		—		—		859,338
Non-owner-occupied CRE
Pass	151,158		167,691		154,288		186,969		258,168		418,767		—		—		1,337,041
SM	—		—		—		—		11,842		3,364		—		—		15,206
SS	—		—		3,623		—		12,811		16,292		—		—		32,726

Total	151,158		167,691		157,911		186,969		282,821		438,423		—		—		1,384,973
Total commercial business
Pass	1,162,668		477,469		333,869		328,809		382,297		811,687		144,505		802		3,642,106
SM	13,117		6,355		8,966		10,033		19,024		28,638		18,188		98		104,419
SS	2,580		11,418		8,900		16,263		18,520		46,194		8,324		3,926		116,125

Total	1,178,365		495,242		351,735		355,105		419,841		886,519		171,017		4,826		3,862,650
One-to-four family residential
Pass	24,100		46,513		17,913		12,436		8,649		21,751		—		—		131,362

SS	—		—		—		60		—		499		—		—		559

Total	24,100		46,513		17,913		12,496		8,649		22,250		—		—		131,921
Real estate construction and land development:
One-to-four family residential
Pass	25,519		62,220		6,203		1,364		971		1,561		—		—		97,838

SS	—		—		—		1,812		—		—		—		—		1,812

Total	25,519		62,220		6,203		3,176		971		1,561		—		—		99,650


	Term Loans Amortized Cost Basis by Origination Year												Revolving Loans		Revolving Loans Converted to Term Loans (1)		Loans Receivable
	2020		2019		2018		2017		2016		Prior
	(In thousands)
Five or more family residential and commercial properties
Pass	22,710		131,850		49,678		7,070		784		1,464		—		—		213,556
SM	—		—		—		—		—		33		—		—		33
SS	989		450		—		—		—		444		—		—		1,883

Total	23,699		132,300		49,678		7,070		784		1,941		—		—		215,472
Total real estate construction and land development
Pass	48,229		194,070		55,881		8,434		1,755		3,025		—		—		311,394
SM	—		—		—		—		—		33		—		—		33
SS	989		450		—		1,812		—		444		—		—		3,695

Total	49,218		194,520		55,881		10,246		1,755		3,502		—		—		315,122
Consumer
Pass	40,061		86,402		59,782		35,068		16,361		20,521		94,849		473		353,517
SM	—		—		—		—		—		—		329		—		329
SS	20		330		532		480		422		1,156		86		165		3,191

Total	40,081		86,732		60,314		35,548		16,783		21,677		95,264		638		357,037
Loans receivable
Pass	1,275,058		804,454		467,445		384,747		409,062		856,984		239,354		1,275		4,438,379
SM	13,117		6,355		8,966		10,033		19,024		28,671		18,517		98		104,781
SS	3,589		12,198		9,432		18,615		18,942		48,293		8,410		4,091		123,570

Total	$	1,291,764	$	823,007	$	485,843	$	413,395	$	447,028	$	933,948	$	266,281	$	5,464	$	4,666,730

(1) Represents loans receivable balance at September 30, 2020 which was converted from a revolving loan to an amortizing loan during the nine months ended September 30, 2020.

The following table presents the amortized cost of loans receivable by credit quality indicator as of December 31, 2019 in accordance with disclosure requirements prior to CECL Adoption:


	December 31, 2019
	Pass		Special Mention		Substandard		Doubtful/Loss		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	771,559	$	16,340	$	64,321	$	—	$	852,220
Owner-occupied CRE	765,411		24,659		15,164		—		805,234
Non-owner occupied CRE	1,274,513		5,662		8,604		—		1,288,779
Total commercial business	2,811,483		46,661		88,089		—		2,946,233
One-to-four family residential	130,818		—		842		—		131,660
Real estate construction and land development:
One-to-four family residential	101,973		1,516		807		—		104,296
Five or more family residential and commercial properties	169,668		682		—		—		170,350
Total real estate construction and land development	271,641		2,198		807		—		274,646
Consumer	411,141		—		3,675		524		415,340
Loans receivable	$	3,625,083	$	48,859	$	93,413	$	524	$	3,767,879

Potential problem loans are risk rated Special Mention or worse that are not classified as a TDR or nonaccrual loan and are not individually evaluated for credit loss, but which management is closely monitoring because the financial information of the borrower causes concern as to their ability to meet their loan repayment

terms. Potential problem loans as of September 30, 2020 and December 31, 2019 were $159.8 million and $87.8 million, respectively.

(d) Nonaccrual Loans

The following table presents the amortized cost of nonaccrual loans for the dates indicated:


	September 30, 2020						December 31, 2019
	Nonaccrual without ACL		Nonaccrual with ACL		Total Nonaccrual		Nonaccrual (1)
	(In thousands)
Commercial business:
Commercial and industrial	$	23,410	$	3,750	$	27,160	$	33,544
Owner-occupied CRE	4,765		11,795		16,560		4,714
Non-owner occupied CRE	3,478		3,732		7,210		6,062
Total commercial business	31,653		19,277		50,930		44,320
One-to-four family residential	38		119		157		19
Real estate construction and land development:

Five or more family residential and commercial properties	—		1,439		1,439		—

Consumer	—		78		78		186
Total	$	31,691	$	20,913	$	52,604	$	44,525

(1) Presentation of December 31, 2019 balances is in accordance with disclosure requirements prior to CECL Adoption.

The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full of previously classified nonaccrual loans during the following periods:


	Three Months Ended September 30, 2020				Three Months Ended September 30, 2019
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(In thousands)
Commercial business:
Commercial and industrial	$	(59)	$	111	$	(336)	$	37
Owner-occupied CRE	(219)		29		—		182
Non-owner occupied CRE	(102)		—		—		181
Total commercial business	(380)		140		(336)		400
One-to-four family residential	(1)		2		—		—
Real estate construction and land development:
One-to-four family residential	—		—		—		10
Five or more family residential and commercial properties	(11)		—		—		—
Total real estate construction and land development	(11)		—		—		10

Total	$	(392)	$	142	$	(336)	$	410


	Nine Months Ended September 30, 2020				Nine months ended September 30, 2019
	Interest Income Reversed		Interest Income Recognized		Interest Income Reversed		Interest Income Recognized
	(in thousands)
Commercial business:
Commercial and industrial	$	(75)	$	419	$	(394)	$	97
Owner-occupied CRE	(219)		89		—		228
Non-owner occupied CRE	(102)		67		(32)		181
Total commercial business	(396)		575		(426)		506
One-to-four family residential	(1)		2		—		—
Real estate construction and land development:
One-to-four family residential	—		—		(3)		33
Five or more family residential and commercial properties	(11)		—		—		—
Total real estate construction and land development	(11)		—		(3)		33
Consumer	—		47		—		6
Total	$	(408)	$	624	$	(429)	$	545

For the three and nine months ended September 30, 2020 and 2019, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the tables above.

(e) Past due loans

The Company performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The amortized cost of past due loans as of September 30, 2020 were as follows:


	September 30, 2020
	30-89 Days		90 Days or Greater		Total Past Due		Current		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	2,414	$	8,415	$	10,829	$	739,728	$	750,557
SBA PPP	—		—		—		867,782		867,782
Owner-occupied CRE	—		403		403		858,935		859,338
Non-owner occupied CRE	754		267		1,021		1,383,952		1,384,973
Total commercial business	3,168		9,085		12,253		3,850,397		3,862,650
One-to-four family residential	32		16		48		131,873		131,921
Real estate construction and land development:
One-to-four family residential	150		—		150		99,500		99,650
Five or more family residential and commercial properties	1,200		—		1,200		214,272		215,472
Total real estate construction and land development	1,350		—		1,350		313,772		315,122
Consumer	883		—		883		356,154		357,037
Total	$	5,433	$	9,101	$	14,534	$	4,652,196	$	4,666,730

The following table presents the amortized cost of past due loans as of December 31, 2019 in accordance with disclosure requirements prior to CECL Adoption:


	December 31, 2019
	30-89 Days		90 Days or Greater		Total Past Due		Current		Total		PCI Loans		Loans Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	10,479	$	6,772	$	17,251	$	832,601	$	849,852	$	2,368	$	852,220
Owner-occupied CRE	607		806		1,413		798,907		800,320		4,914		805,234
Non-owner occupied CRE	554		1,843		2,397		1,280,891		1,283,288		5,491		1,288,779
Total commercial business	11,640		9,421		21,061		2,912,399		2,933,460		12,773		2,946,233
One-to-four family residential	797		—		797		127,288		128,085		3,575		131,660
Real estate construction and land development:
One-to-four family residential	1,516		—		1,516		102,780		104,296		—		104,296
Five or more family residential and commercial properties	—		—		—		170,350		170,350		—		170,350
Total real estate construction and land development	1,516		—		1,516		273,130		274,646		—		274,646
Consumer	2,071		—		2,071		411,507		413,578		1,762		415,340
Total	$	16,024	$	9,421	$	25,445	$	3,724,324	$	3,749,769	$	18,110	$	3,767,879

There were no loans 90 days or more past due that were still accruing interest as of September 30, 2020 or December 31, 2019.

(f) Collateral-dependent Loans

The types of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of September 30, 2020 were as follows:


	Loans receivable(1)
	CRE		Farmland		Single Family Residence		Equipment or Accounts Receivable		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	1,953	$	18,979	$	1,331	$	1,696	$	24,155
Owner-occupied CRE	4,764		—		—		—		4,764
Non-owner occupied CRE	5,218		—		—		—		5,218
Total commercial business	11,935		18,979		1,331		1,696		34,137
One-to-four family residential	—		—		38		—		38
Real estate construction and land development:
One-to-four family residential	—		—		1,812		—		1,812



Total	$	11,935	$	18,979	$	3,181	$	1,696	$	35,987

(1) Balances represent the amortized cost of loans receivable evaluated for credit losses using collateral valuation. If multiple collateral sources secured the loan, the entire loan receivable balance is presented in the collateral category deemed primary, which generally represents the majority of the collateral balance.

There have been no significant changes to the collateral securing individually evaluated loans for credit losses and for which repayment was expected to be provided substantially through the operation or sale of the collateral during the nine months ended September 30, 2020, except changes due to payoffs and additions of loans to this classification.

Under the incurred loss methodology, including the ASC 310-30 methodology for PCI loans, comparative disclosures of collateral-dependent loans as of December 31, 2019 and for the three and nine months ended September 30, 2019 are similar to the disclosures for impaired loans. Impaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance, excluding PCI loans. The amortized cost of impaired loans as of December 31, 2019 are set forth in the following table:


	December 31, 2019
	Amortized Cost With No Specific Valuation Allowance		Amortized Cost With Specific Valuation Allowance		Total Amortized Cost		Outstanding Principal Balance		Related Specific Valuation Allowance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,179	$	13,629	$	43,808	$	45,585	$	1,372
Owner-occupied CRE	3,921		2,415		6,336		6,764		426
Non-owner occupied CRE	5,309		1,015		6,324		6,458		146
Total commercial business	39,409		17,059		56,468		58,807		1,944
One-to-four family residential	—		215		215		223		56
Real estate construction and land development:
One-to-four family residential	237		—		237		237		—


Consumer	—		561		561		570		143
Total	$	39,646	$	17,835	$	57,481	$	59,837	$	2,143

The average amortized cost of impaired loans for the three and nine months ended September 30, 2019 are set forth in the following table:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Commercial business:
Commercial and industrial	$	35,017	$	28,925
Owner-occupied CRE	5,918		5,927
Non-owner occupied CRE	9,790		8,106
Total commercial business	50,725		42,958
One-to-four family residential	221		249
Real estate construction and land development:
One-to-four family residential	676		794


Consumer	600		581
Total	$	52,222	$	44,582

(g) Troubled Debt Restructured Loans

The amortized cost and related ACL on loans of performing and nonaccrual TDR loans as of September 30, 2020 and December 31, 2019 were as follows:


	September 30, 2020				December 31, 2019
	Performing TDR loans		Nonaccrual TDR loans		Performing TDR loans		Nonaccrual TDR loans
	(In thousands)
TDR loans	$	19,615	$	20,468	$	14,469	$	26,338
ACL on TDR loans	1,536		348		1,259		218

The unfunded commitment to borrowers related to TDR loans was $2.3 million and $736,000 at September 30, 2020 and December 31, 2019, respectively.

Loans that were modified as TDR loans during the three and nine months ended September 30, 2020 and 2019 are set forth in the following tables:


	Three months ended September 30,
	2020			2019
	Number of Contracts	Amortized Cost (1)		Number of Contracts	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	12	$	7,217	15	$	5,267
Owner-occupied CRE	5	2,312		2	1,214
Non-owner occupied CRE	2	438		3	2,597
Total commercial business	19	9,967		20	9,078
One-to-four family residential	1	22		—	—
Real estate construction and land development:
One-to-four family residential	4	1,812		—	—


Consumer	9	127		3	27
Total	33	$	11,928	23	$	9,105


	Nine Months Ended September 30,
	2020			2019
	Number of Contracts (2)	Amortized Cost (1) (2)		Number of Contracts (2)	Amortized Cost (1) (2)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	38	$	18,871	33	$	22,408
Owner-occupied CRE	7	3,227		3	1,612
Non-owner occupied CRE	4	2,417		4	5,568
Total commercial business	49	24,515		40	29,588
One-to-four family residential	1	22		—	—
Real estate construction and land development:
One-to-four family residential	4	1,812		1	560


Consumer	20	251		10	158
Total TDR loans	74	$	26,600	51	$	30,306

(1) Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at

the date of modification (pre-modification) did not change as a result of the modification (post-modification).

(2) Number of contracts and amortized cost represent loans which have balances as of period end. Certain modified loans may have been paid-down or charged-off during the nine months ended September 30, 2020 and 2019.

The tables above include 22 and 31 loans, respectively, for the three and nine months ended September 30, 2020 and seven and 17, respectively, for the three and nine months ended September 30, 2019 that were previously reported as TDR loans. The Bank typically grants shorter extension periods to continually monitor these TDR loans despite the fact that the extended date might not be the date the Bank expects sufficient cash flow from these borrowers. The Bank does not consider these modifications a subsequent default of a TDR as new loan terms, specifically new maturity dates, were granted. Of the remaining first-reported TDR loans, the concessions granted largely consisted of maturity extensions, interest rate modifications or a combination of both. The potential losses related to TDR loans are considered in the period the loan was first reported as a TDR loan and are adjusted, as necessary, in the current period based on more recent information. The related ACL at September 30, 2020 for loans that were modified as TDR loans during the nine months ended September 30, 2020 was $1.6 million.

Loans that were modified during the previous twelve months that subsequently defaulted during the three and nine months ended September 30, 2020 and 2019 are set forth in the following tables:


	Three months ended September 30,
	2020			2019
	Number of Contracts	Amortized Cost		Number of Contracts	Amortized Cost
	(Dollars in thousands)
Commercial business:
Commercial and industrial	1	$	229	4	$	2,056

Non-owner occupied CRE	—	—		1	2,971
Total commercial business	1	$	229	5	$	5,027





Total	1	$	229	5	$	5,027


	Nine Months Ended September 30,
	2020			2019
	Number of Contracts (1)	Amortized Cost (1)		Number of Contracts (1)	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	4	$	2,152	9	$	3,229
Owner-occupied CRE	1	431		2	1,101
Non-owner occupied CRE	2	376		2	3,541
Total commercial business	7	2,959		13	7,871
Real estate construction and land development:
One-to-four family residential	—	—		1	560



Total	7	$	2,959	14	$	8,431

(1) Number of contracts and amortized cost represent loans which have balances as of period end. Certain loans may have been paid-down or charged-off during the nine months ended September 30, 2020 and 2019.

During the three and nine months ended September 30, 2020 all of the loans in the tables above defaulted because each was past its modified maturity date and the borrower has not subsequently repaid the credits. The Bank chose not to extend further the maturity date on these loans. The Bank had an ACL on loans of $512,000 at September 30, 2020 related to these TDR loans which defaulted during the nine months ended September 30, 2020.

During the three and nine months ended September 30, 2019, three and 12 TDR loans, respectively, defaulted because each was past its modified maturity date and the borrower has not subsequently repaid the credits. The Bank chose not to extend further the maturity date on these loans. In addition, during both the three and nine months ended September 30, 2019, two TDR loans defaulted because the borrowers were more than 90 days delinquent on their scheduled loan payments. The Bank had a specific valuation allowance of $412,000 at September 30, 2019 related to these TDR loans which defaulted during the nine months ended September 30, 2019.

For the three and nine months ended September 30, 2020, the Bank recorded $263,000 and $1.1 million, respectively, of interest income related to performing TDR loans. For the three and nine months ended September 30, 2019, the Bank recorded $282,000 and $980,000, respectively, of interest income related to performing TDR loans.

(h) Purchased Credit Impaired Loans

Upon CECL Adoption, the Company transitioned PCI loans to PCD loans. The following table reflects the outstanding principal balance and amortized cost of PCI loans at December 31, 2019:


	December 31, 2019
	Outstanding Principal		Amortized Cost
	(In thousands)
Commercial business:
Commercial and industrial	$	4,439	$	2,368
Owner-occupied CRE	4,925		4,914
Non-owner occupied CRE	7,028		5,491
Total commercial business	16,392		12,773
One-to-four family residential	3,095		3,575




Consumer	1,463		1,762
PCI loans	$	20,950	$	18,110

On the acquisition dates, the amount by which the undiscounted expected cash flows of the PCI loans exceeded the estimated fair value of the loan was the “accretable yield.” The accretable yield was then measured at each financial reporting date and represented the difference between the remaining undiscounted expected cash flows and the current carrying value of the PCI loans.

The following table summarizes the accretable yield on the PCI loans for the three and nine months ended September 30, 2019:


	Three Months Ended September 30, 2019		Nine Months Ended September 30, 2019
	(In thousands)
Balance at the beginning of the period	$	8,572	$	9,493
Accretion	(423)		(1,517)
Disposal and other	(94)		(744)
Reclassification from nonaccretable difference	—		823
Balance at the end of the period	$	8,055	$	8,055