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Loans Receivable | 9 Months Ended
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Sep. 30, 2021
Loans and Leases Receivable Disclosure [Abstract] |
Loans Receivable | Loans Receivable (a) Loan Origination/Risk Management The Bank 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 Bank's amortized cost of loans receivable as it was deemed insignificant. The Bank categorizes the individual loans in the total loan portfolio into four segments: commercial business; residential real estate; 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 2020 Annual Form 10-K. The amortized cost of loans receivable, net of ACL on loans at September 30, 2021 and December 31, 2020 consisted of the following portfolio segments and classes:
| September 30, 2021 |  | December 31, 2020
| (In thousands)
Commercial business: |  |  |
Commercial and industrial | $ | 652,776 |  |  | $ | 733,098 |
SBA PPP | 266,896 |  |  | 715,121 |
Owner-occupied CRE | 907,568 |  |  | 856,684 |
| September 30, 2021 |  | December 31, 2020
| (In thousands)
Non-owner occupied CRE | 1,459,795 |  |  | 1,410,303 |
Total commercial business | 3,287,035 |  |  | 3,715,206 |
Residential real estate | 125,697 |  |  | 122,756 |
Real estate construction and land development: |  |  |
Residential | 90,081 |  |  | 78,259 |
Commercial and multifamily | 205,516 |  |  | 227,454 |
Total real estate construction and land development | 295,597 |  |  | 305,713 |
Consumer | 245,555 |  |  | 324,972 |
Loans receivable | 3,953,884 |  |  | 4,468,647 |
Allowance for credit losses on loans | (48,317) |  |  | (70,185) |
Loans receivable, net | $ | 3,905,567 |  |  | $ | 4,398,462 |
Balances included in the amortized cost of Loans receivable: |  |  |
Unamortized net discount on acquired loans | $ | (4,325) |  |  | $ | (6,575) |
Unamortized net deferred fee | $ | (11,497) |  |  | $ | (15,458) |
(b) Concentrations of Credit Most of the Bank’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County to Clark County in Washington State and Multnomah County and Washington County in Oregon, as well as other contiguous markets and represents a geographic concentration. Additionally, our loan portfolio is concentrated in commercial-type loans, including commercial business loans and commercial and multifamily real estate construction and land development loans. (c) Credit Quality Indicators As part of the on-going monitoring of the credit quality of the Bank’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, (v) past due status, and (vi) the general economic conditions of the United States of America, and specifically the states of Washington and Oregon. The Bank utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 10. Risk grades are aggregated to create the risk categories of Pass for grades 1 to 6, Special Mention or "SM" for grade 7, Substandard or "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 2020 Annual Form 10-K. 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, results of annual term loan reviews and scheduled loan reviews. 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. Loan grades relate to the likelihood of losses in that the higher the grade, the greater the loss potential. Loans with a pass grade may have some estimated inherent losses, but to a lesser extent than the other loan grades. The SM loan grade is transitory in that the Bank is waiting on additional information to determine the likelihood and extent of the potential loss. The likelihood of loss for SM graded loans, however, is greater than Watch graded loans because there has been measurable credit deterioration. Loans with a SS grade are generally loans with higher risk of loss if the deficiencies are not corrected. For Doubtful and Loss graded loans, the Bank is almost certain of the losses and the outstanding principal balances are generally charged off to the realizable value. Regulatory agencies provided guidance regarding credit risk ratings, delinquency reporting and nonaccrual status for loans adversely impacted by the COVID-19 pandemic. The Bank has and will continue to exercise judgment in determining the risk rating for impacted borrowers and will not automatically adversely classify credits that are affected by the COVID-19 pandemic. The Bank also will not designate loans with payment deferrals granted due to the COVID-19 pandemic as past due because of the deferral. Due to the short-term nature of the forbearance and other relief programs the Bank is offering as a result of the COVID-19 pandemic, management expects that borrowers granted relief under these programs will generally not be reported as nonaccrual during the deferral period. The following table presents the amortized cost of loans receivable by risk grade as of September 30, 2021 and December 31, 2020:
| September 30, 2021 |  |  |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted to Term Loans (1) |  | Loans Receivable |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  |  |  |  |
| (In thousands)
Commercial business: |  |
Commercial and industrial |  |
Pass | $ | 74,653 |  |  | $ | 107,406 |  |  | $ | 103,431 |  |  | $ | 55,513 |  |  | $ | 34,254 |  |  | $ | 102,143 |  |  | $ | 120,622 |  |  | $ | 877 |  |  | $ | 598,899 |  |  |
SM | 532 |  |  | 700 |  |  | 6,192 |  |  | 6,682 |  |  | 1,252 |  |  | 5,716 |  |  | 2,693 |  |  | 242 |  |  | 24,009 |  |  |
SS | 1,057 |  |  | 1,369 |  |  | 5,533 |  |  | 1,219 |  |  | 3,034 |  |  | 6,276 |  |  | 10,772 |  |  | 608 |  |  | 29,868 |  |  |
Total | 76,242 |  |  | 109,475 |  |  | 115,156 |  |  | 63,414 |  |  | 38,540 |  |  | 114,135 |  |  | 134,087 |  |  | 1,727 |  |  | 652,776 |  |  |
SBA PPP |  |
Pass | 247,213 |  |  | 19,683 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 266,896 |  |  |
Owner-occupied CRE |  |
Pass | 114,176 |  |  | 86,004 |  |  | 183,540 |  |  | 92,201 |  |  | 70,672 |  |  | 277,948 |  |  | — |  |  | 73 |  |  | 824,614 |  |  |
SM | — |  |  | 5,102 |  |  | 3,086 |  |  | 12,366 |  |  | 4,504 |  |  | 24,793 |  |  | — |  |  | — |  |  | 49,851 |  |  |
SS | — |  |  | 691 |  |  | — |  |  | 3,803 |  |  | 6,995 |  |  | 21,614 |  |  | — |  |  | — |  |  | 33,103 |  |  |
Total | 114,176 |  |  | 91,797 |  |  | 186,626 |  |  | 108,370 |  |  | 82,171 |  |  | 324,355 |  |  | — |  |  | 73 |  |  | 907,568 |  |  |
Non-owner occupied CRE |  |
Pass | 132,922 |  |  | 182,994 |  |  | 218,203 |  |  | 155,131 |  |  | 164,632 |  |  | 530,818 |  |  | — |  |  | — |  |  | 1,384,700 |  |  |
SM | — |  |  | 5,034 |  |  | 5,715 |  |  | 352 |  |  | 2,215 |  |  | 2,713 |  |  | — |  |  | — |  |  | 16,029 |  |  |
SS | — |  |  | — |  |  | — |  |  | 3,460 |  |  | — |  |  | 55,606 |  |  | — |  |  | — |  |  | 59,066 |  |  |
Total | 132,922 |  |  | 188,028 |  |  | 223,918 |  |  | 158,943 |  |  | 166,847 |  |  | 589,137 |  |  | — |  |  | — |  |  | 1,459,795 |  |  |
Total commercial business |  |
Pass | 568,964 |  |  | 396,087 |  |  | 505,174 |  |  | 302,845 |  |  | 269,558 |  |  | 910,909 |  |  | 120,622 |  |  | 950 |  |  | 3,075,109 |  |  |
SM | 532 |  |  | 10,836 |  |  | 14,993 |  |  | 19,400 |  |  | 7,971 |  |  | 33,222 |  |  | 2,693 |  |  | 242 |  |  | 89,889 |  |  |
SS | 1,057 |  |  | 2,060 |  |  | 5,533 |  |  | 8,482 |  |  | 10,029 |  |  | 83,496 |  |  | 10,772 |  |  | 608 |  |  | 122,037 |  |  |
Total | 570,553 |  |  | 408,983 |  |  | 525,700 |  |  | 330,727 |  |  | 287,558 |  |  | 1,027,627 |  |  | 134,087 |  |  | 1,800 |  |  | 3,287,035 |  |  |
Residential real estate |  |
Pass | 43,126 |  |  | 24,715 |  |  | 25,443 |  |  | 6,619 |  |  | 7,275 |  |  | 17,821 |  |  | — |  |  | — |  |  | 124,999 |  |  |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 698 |  |  | — |  |  | — |  |  | 698 |  |  |
Total | 43,126 |  |  | 24,715 |  |  | 25,443 |  |  | 6,619 |  |  | 7,275 |  |  | 18,519 |  |  | — |  |  | — |  |  | 125,697 |  |  |
Real estate construction and land development: |  |
Residential |  |
Pass | 35,506 |  |  | 30,987 |  |  | 19,044 |  |  | 2,781 |  |  | 394 |  |  | 1,369 |  |  | — |  |  | — |  |  | 90,081 |  |  |
Commercial and multifamily |  |
Pass | 38,144 |  |  | 50,546 |  |  | 106,428 |  |  | 5,587 |  |  | 1,606 |  |  | 1,542 |  |  | — |  |  | — |  |  | 203,853 |  |  |
SM | — |  |  | — |  |  | 450 |  |  | — |  |  | — |  |  | 215 |  |  | — |  |  | — |  |  | 665 |  |  |
SS | — |  |  | 571 |  |  | — |  |  | — |  |  | — |  |  | 427 |  |  | — |  |  | — |  |  | 998 |  |  |
Total | 38,144 |  |  | 51,117 |  |  | 106,878 |  |  | 5,587 |  |  | 1,606 |  |  | 2,184 |  |  | — |  |  | — |  |  | 205,516 |  |  |
Total real estate construction and land development
Pass | 73,650 |  |  | 81,533 |  |  | 125,472 |  |  | 8,368 |  |  | 2,000 |  |  | 2,911 |  |  | — |  |  | — |  |  | 293,934 |  |  |
SM | — |  |  | — |  |  | 450 |  |  | — |  |  | — |  |  | 215 |  |  | — |  |  | — |  |  | 665 |  |  |
SS | — |  |  | 571 |  |  | — |  |  | — |  |  | — |  |  | 427 |  |  | — |  |  | — |  |  | 998 |  |  |
Total | 73,650 |  |  | 82,104 |  |  | 125,922 |  |  | 8,368 |  |  | 2,000 |  |  | 3,553 |  |  | — |  |  | — |  |  | 295,597 |  |  |
| September 30, 2021 |  |  |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted to Term Loans (1) |  | Loans Receivable |  |
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  |  |  |  |
Consumer |  |
Pass | 20,185 |  |  | 18,083 |  |  | 52,803 |  |  | 34,571 |  |  | 18,109 |  |  | 15,863 |  |  | 82,780 |  |  | 200 |  |  | 242,594 |  |  |
SS | — |  |  | 186 |  |  | 685 |  |  | 549 |  |  | 564 |  |  | 939 |  |  | 38 |  |  | — |  |  | 2,961 |  |  |
Total | 20,185 |  |  | 18,269 |  |  | 53,488 |  |  | 35,120 |  |  | 18,673 |  |  | 16,802 |  |  | 82,818 |  |  | 200 |  |  | 245,555 |  |  |
Loans receivable |  |
Pass | 705,925 |  |  | 520,418 |  |  | 708,892 |  |  | 352,403 |  |  | 296,942 |  |  | 947,504 |  |  | 203,402 |  |  | 1,150 |  |  | 3,736,636 |  |  |
SM | 532 |  |  | 10,836 |  |  | 15,443 |  |  | 19,400 |  |  | 7,971 |  |  | 33,437 |  |  | 2,693 |  |  | 242 |  |  | 90,554 |  |  |
SS | 1,057 |  |  | 2,817 |  |  | 6,218 |  |  | 9,031 |  |  | 10,593 |  |  | 85,560 |  |  | 10,810 |  |  | 608 |  |  | 126,694 |  |  |
Total | $ | 707,514 |  |  | $ | 534,071 |  |  | $ | 730,553 |  |  | $ | 380,834 |  |  | $ | 315,506 |  |  | $ | 1,066,501 |  |  | $ | 216,905 |  |  | $ | 2,000 |  |  | $ | 3,953,884 |  |  |
(1) Represents loans receivable balance at September 30, 2021 which was converted from a revolving loan to an amortizing loan during the nine months ended September 30, 2021.
| December 31, 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 | $ | 118,971 |  |  | $ | 127,919 |  |  | $ | 70,766 |  |  | $ | 44,231 |  |  | $ | 37,658 |  |  | $ | 95,958 |  |  | $ | 121,440 |  |  | $ | 819 |  |  | $ | 617,762 |  |  |
SM | 14,430 |  |  | 9,162 |  |  | 10,878 |  |  | 4,171 |  |  | 5,700 |  |  | 3,579 |  |  | 11,790 |  |  | 814 |  |  | 60,524 |  |  |
SS | 2,199 |  |  | 11,835 |  |  | 3,416 |  |  | 9,348 |  |  | 1,052 |  |  | 7,651 |  |  | 15,484 |  |  | 3,827 |  |  | 54,812 |  |  |
Total | 135,600 |  |  | 148,916 |  |  | 85,060 |  |  | 57,750 |  |  | 44,410 |  |  | 107,188 |  |  | 148,714 |  |  | 5,460 |  |  | 733,098 |  |  |
SBA PPP |  |
Pass | 715,121 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 715,121 |  |  |
Owner-occupied CRE |  |
Pass | 89,224 |  |  | 167,095 |  |  | 94,830 |  |  | 80,138 |  |  | 74,902 |  |  | 254,864 |  |  | — |  |  | — |  |  | 761,053 |  |  |
SM | 6,146 |  |  | 4,540 |  |  | 16,386 |  |  | 11,231 |  |  | 5,464 |  |  | 12,105 |  |  | — |  |  | — |  |  | 55,872 |  |  |
SS | — |  |  | — |  |  | 114 |  |  | 7,320 |  |  | 3,313 |  |  | 29,012 |  |  | — |  |  | — |  |  | 39,759 |  |  |
Total | 95,370 |  |  | 171,635 |  |  | 111,330 |  |  | 98,689 |  |  | 83,679 |  |  | 295,981 |  |  | — |  |  | — |  |  | 856,684 |  |  |
Non-owner-occupied CRE |  |
Pass | 197,548 |  |  | 173,153 |  |  | 148,830 |  |  | 172,438 |  |  | 240,614 |  |  | 406,817 |  |  | — |  |  | — |  |  | 1,339,400 |  |  |
SM | — |  |  | 1,979 |  |  | 357 |  |  | 2,448 |  |  | 6,210 |  |  | 3,539 |  |  | — |  |  | — |  |  | 14,533 |  |  |
SS | — |  |  | — |  |  | 3,623 |  |  | — |  |  | 35,455 |  |  | 17,292 |  |  | — |  |  | — |  |  | 56,370 |  |  |
Total | 197,548 |  |  | 175,132 |  |  | 152,810 |  |  | 174,886 |  |  | 282,279 |  |  | 427,648 |  |  | — |  |  | — |  |  | 1,410,303 |  |  |
Total commercial business |  |
Pass | 1,120,864 |  |  | 468,167 |  |  | 314,426 |  |  | 296,807 |  |  | 353,174 |  |  | 757,639 |  |  | 121,440 |  |  | 819 |  |  | 3,433,336 |  |  |
SM | 20,576 |  |  | 15,681 |  |  | 27,621 |  |  | 17,850 |  |  | 17,374 |  |  | 19,223 |  |  | 11,790 |  |  | 814 |  |  | 130,929 |  |  |
SS | 2,199 |  |  | 11,835 |  |  | 7,153 |  |  | 16,668 |  |  | 39,820 |  |  | 53,955 |  |  | 15,484 |  |  | 3,827 |  |  | 150,941 |  |  |
Total | 1,143,639 |  |  | 495,683 |  |  | 349,200 |  |  | 331,325 |  |  | 410,368 |  |  | 830,817 |  |  | 148,714 |  |  | 5,460 |  |  | 3,715,206 |  |  |
Residential real estate |  |
Pass | 30,141 |  |  | 41,829 |  |  | 15,730 |  |  | 10,362 |  |  | 7,322 |  |  | 16,825 |  |  | — |  |  | — |  |  | 122,209 |  |  |
SS | — |  |  | — |  |  | — |  |  | 59 |  |  | — |  |  | 488 |  |  | — |  |  | — |  |  | 547 |  |  |
Total | 30,141 |  |  | 41,829 |  |  | 15,730 |  |  | 10,421 |  |  | 7,322 |  |  | 17,313 |  |  | — |  |  | — |  |  | 122,756 |  |  |
Real estate construction and land development: |  |
Residential |  |
Pass | 33,801 |  |  | 36,697 |  |  | 2,725 |  |  | 1,097 |  |  | 971 |  |  | 1,042 |  |  | — |  |  | — |  |  | 76,333 |  |  |
SS | — |  |  | — |  |  | — |  |  | 1,926 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,926 |  |  |
Total | 33,801 |  |  | 36,697 |  |  | 2,725 |  |  | 3,023 |  |  | 971 |  |  | 1,042 |  |  | — |  |  | — |  |  | 78,259 |  |  |
Commercial and multifamily |  |
Pass | 27,423 |  |  | 151,020 |  |  | 38,682 |  |  | 5,660 |  |  | 689 |  |  | 1,407 |  |  | — |  |  | — |  |  | 224,881 |  |  |
SM | 67 |  |  | 1,011 |  |  | — |  |  | — |  |  | — |  |  | 29 |  |  | — |  |  | — |  |  | 1,107 |  |  |
SS | 572 |  |  | 450 |  |  | — |  |  | — |  |  | — |  |  | 444 |  |  | — |  |  | — |  |  | 1,466 |  |  |
Total | 28,062 |  |  | 152,481 |  |  | 38,682 |  |  | 5,660 |  |  | 689 |  |  | 1,880 |  |  | — |  |  | — |  |  | 227,454 |  |  |
Total real estate construction and land development
Pass | 61,224 |  |  | 187,717 |  |  | 41,407 |  |  | 6,757 |  |  | 1,660 |  |  | 2,449 |  |  | — |  |  | — |  |  | 301,214 |  |  |
SM | 67 |  |  | 1,011 |  |  | — |  |  | — |  |  | — |  |  | 29 |  |  | — |  |  | — |  |  | 1,107 |  |  |
SS | 572 |  |  | 450 |  |  | — |  |  | 1,926 |  |  | — |  |  | 444 |  |  | — |  |  | — |  |  | 3,392 |  |  |
Total | 61,863 |  |  | 189,178 |  |  | 41,407 |  |  | 8,683 |  |  | 1,660 |  |  | 2,922 |  |  | — |  |  | — |  |  | 305,713 |  |  |
Consumer |  |
Pass | 43,742 |  |  | 77,083 |  |  | 53,195 |  |  | 30,559 |  |  | 13,443 |  |  | 15,453 |  |  | 87,547 |  |  | 315 |  |  | 321,337 |  |  |
SS | 34 |  |  | 404 |  |  | 684 |  |  | 648 |  |  | 420 |  |  | 1,319 |  |  | 78 |  |  | 48 |  |  | 3,635 |  |  |
Total | 43,776 |  |  | 77,487 |  |  | 53,879 |  |  | 31,207 |  |  | 13,863 |  |  | 16,772 |  |  | 87,625 |  |  | 363 |  |  | 324,972 |  |  |
Loans receivable |  |
Pass | 1,255,971 |  |  | 774,796 |  |  | 424,758 |  |  | 344,485 |  |  | 375,599 |  |  | 792,366 |  |  | 208,987 |  |  | 1,134 |  |  | 4,178,096 |  |  |
SM | 20,643 |  |  | 16,692 |  |  | 27,621 |  |  | 17,850 |  |  | 17,374 |  |  | 19,252 |  |  | 11,790 |  |  | 814 |  |  | 132,036 |  |  |
SS | 2,805 |  |  | 12,689 |  |  | 7,837 |  |  | 19,301 |  |  | 40,240 |  |  | 56,206 |  |  | 15,562 |  |  | 3,875 |  |  | 158,515 |  |  |
Total | $ | 1,279,419 |  |  | $ | 804,177 |  |  | $ | 460,216 |  |  | $ | 381,636 |  |  | $ | 433,213 |  |  | $ | 867,824 |  |  | $ | 236,339 |  |  | $ | 5,823 |  |  | $ | 4,468,647 |  |  |
(1) Represents loans receivable balance at December 31, 2020 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2020. (d) Nonaccrual Loans The following table presents the amortized cost of nonaccrual loans for the dates indicated:
| September 30, 2021 |  |
| Nonaccrual without ACL |  | Nonaccrual with ACL |  | Total Nonaccrual |  |
| (In thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | 6,952 |  |  | $ | 4,013 |  |  | $ | 10,965 |  |  |
Owner-occupied CRE | 3,714 |  |  | 5,786 |  |  | 9,500 |  |  |
Non-owner occupied CRE | 1,318 |  |  | 3,460 |  |  | 4,778 |  |  |
Total commercial business | 11,984 |  |  | 13,259 |  |  | 25,243 |  |  |
Residential real estate | — |  |  | 51 |  |  | 51 |  |  |
Real estate construction and land development: |  |  |  |  |  |  |
Commercial and multifamily | — |  |  | 571 |  |  | 571 |  |  |
Consumer | — |  |  | 29 |  |  | 29 |  |  |
Total | $ | 11,984 |  |  | $ | 13,910 |  |  | $ | 25,894 |  |  |
| December 31, 2020 |  |
| Nonaccrual without ACL |  | Nonaccrual with ACL |  | Total Nonaccrual |  |
| (In thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | 22,039 |  |  | $ | 9,208 |  |  | $ | 31,247 |  |  |
Owner-occupied CRE | 4,693 |  |  | 13,700 |  |  | 18,393 |  |  |
Non-owner occupied CRE | 3,424 |  |  | 3,722 |  |  | 7,146 |  |  |
Total commercial business | 30,156 |  |  | 26,630 |  |  | 56,786 |  |  |
Residential real estate | 67 |  |  | 117 |  |  | 184 |  |  |
Real estate construction and land development: |  |  |  |  |  |  |
Commercial and multifamily | 572 |  |  | 450 |  |  | 1,022 |  |  |
Consumer | 31 |  |  | 69 |  |  | 100 |  |  |
Total | $ | 30,826 |  |  | $ | 27,266 |  |  | $ | 58,092 |  |  |
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, 2021 |  | Three Months Ended September 30, 2020
| Interest Income Reversed |  | Interest Income Recognized |  | Interest Income Reversed |  | Interest Income Recognized
| (In thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | (1) |  |  | $ | 184 |  |  | $ | (59) |  |  | $ | 111 |
Owner-occupied CRE | — |  |  | — |  |  | (219) |  |  | 29 |
Non-owner occupied CRE | — |  |  | — |  |  | (102) |  |  | — |
Total commercial business | (1) |  |  | 184 |  |  | (380) |  |  | 140 |
Residential real estate | — |  |  | — |  |  | (1) |  |  | 2 |
Real estate construction and land development: |  |  |  |  |  |  |
Commercial and multifamily | — |  |  | — |  |  | (11) |  |  | — |
Consumer | — |  |  | 32 |  |  | — |  |  | — |
Total | $ | (1) |  |  | $ | 216 |  |  | $ | (392) |  |  | $ | 142 |
| Nine Months Ended September 30, 2021 |  | Nine months ended September 30, 2020
| Interest Income Reversed |  | Interest Income Recognized |  | Interest Income Reversed |  | Interest Income Recognized
| (in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | (11) |  |  | $ | 2,228 |  |  | $ | (75) |  |  | $ | 419 |
Owner-occupied CRE | — |  |  | 117 |  |  | (219) |  |  | 89 |
Non-owner occupied CRE | — |  |  | 313 |  |  | (102) |  |  | 67 |
Total commercial business | (11) |  |  | 2,658 |  |  | (396) |  |  | 575 |
One-to-four family residential |  |  |  |  | (1) |  |  | 2 |
Real estate construction and land development: |  |  |  |  |  |  |
Residential | — |  |  | 73 |  |  | — |  |  | — |
Commercial and multifamily | — |  |  | — |  |  | (11) |  |  | — |
Consumer | — |  |  | 32 |  |  | — |  |  | 47 |
Total | $ | (11) |  |  | $ | 2,763 |  |  | $ | (408) |  |  | $ | 624 |
For the three and nine months ended September 30, 2021 and 2020, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the tables above due to payment in full. (e) Past due loans The Bank 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, 2021 and December 31, 2020 were as follows:
| September 30, 2021
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 440 |  |  | $ | 6,219 |  |  | $ | 6,659 |  |  | $ | 646,117 |  |  | $ | 652,776 |
SBA PPP | — |  |  | — |  |  | — |  |  | 266,896 |  |  | 266,896 |
Owner-occupied CRE | 283 |  |  | — |  |  | 283 |  |  | 907,285 |  |  | 907,568 |
Non-owner occupied CRE | 6,165 |  |  | — |  |  | 6,165 |  |  | 1,453,630 |  |  | 1,459,795 |
Total commercial business | 6,888 |  |  | 6,219 |  |  | 13,107 |  |  | 3,273,928 |  |  | 3,287,035 |
Residential real estate | 25 |  |  | — |  |  | 25 |  |  | 125,672 |  |  | 125,697 |
Real estate construction and land development: |  |  |  |  |  |  |  |  |
Residential | — |  |  | — |  |  | — |  |  | 90,081 |  |  | 90,081 |
Commercial and multifamily | — |  |  | 571 |  |  | 571 |  |  | 204,945 |  |  | 205,516 |
Total real estate construction and land development | — |  |  | 571 |  |  | 571 |  |  | 295,026 |  |  | 295,597 |
Consumer | 643 |  |  | — |  |  | 643 |  |  | 244,912 |  |  | 245,555 |
Total | $ | 7,556 |  |  | $ | 6,790 |  |  | $ | 14,346 |  |  | $ | 3,939,538 |  |  | $ | 3,953,884 |
| December 31, 2020
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 4,621 |  |  | $ | 8,082 |  |  | $ | 12,703 |  |  | $ | 720,395 |  |  | $ | 733,098 |
SBA PPP | — |  |  | — |  |  | — |  |  | 715,121 |  |  | 715,121 |
Owner-occupied CRE | 991 |  |  | 403 |  |  | 1,394 |  |  | 855,290 |  |  | 856,684 |
Non-owner occupied CRE | 412 |  |  | 1,970 |  |  | 2,382 |  |  | 1,407,921 |  |  | 1,410,303 |
Total commercial business | 6,024 |  |  | 10,455 |  |  | 16,479 |  |  | 3,698,727 |  |  | 3,715,206 |
Residential real estate | 765 |  |  | 16 |  |  | 781 |  |  | 121,975 |  |  | 122,756 |
Real estate construction and land development: |  |  |  |  |  |  |  |  |
Residential | — |  |  | — |  |  | — |  |  | 78,259 |  |  | 78,259 |
Commercial and multifamily | 2,225 |  |  | — |  |  | 2,225 |  |  | 225,229 |  |  | 227,454 |
Total real estate construction and land development | 2,225 |  |  | — |  |  | 2,225 |  |  | 303,488 |  |  | 305,713 |
Consumer | 1,407 |  |  | 30 |  |  | 1,437 |  |  | 323,535 |  |  | 324,972 |
Total | $ | 10,421 |  |  | $ | 10,501 |  |  | $ | 20,922 |  |  | $ | 4,447,725 |  |  | $ | 4,468,647 |
There were no loans 90 days or more past due that were still accruing interest as of September 30, 2021 and December 31, 2020. (f) Collateral-dependent Loans The type 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, 2021 and December 31, 2020 were as follows, with b alances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:
| September 30, 2021
| CRE |  | Farmland |  | Residential Real Estate |  | Other |  |  |  | Total
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,504 |  |  | $ | 4,384 |  |  | $ | 727 |  |  | $ | 595 |  |  |  |  | $ | 7,210 |
Owner-occupied CRE | 4,261 |  |  | — |  |  | — |  |  | — |  |  |  |  | 4,261 |
Non-owner occupied CRE | 1,318 |  |  | — |  |  | — |  |  | — |  |  |  |  | 1,318 |
Total commercial business | 7,083 |  |  | 4,384 |  |  | 727 |  |  | 595 |  |  |  |  | 12,789 |
Real estate construction and land development: |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily | 571 |  |  | — |  |  | — |  |  | — |  |  |  |  | 571 |
Total | $ | 7,654 |  |  | $ | 4,384 |  |  | $ | 727 |  |  | $ | 595 |  |  |  |  | $ | 13,360 |
| December 31, 2020
| CRE |  | Farmland |  | Residential Real Estate |  |  |  | Other |  | Total
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,893 |  |  | $ | 18,738 |  |  | $ | 584 |  |  |  |  | $ | 1,405 |  |  | $ | 22,620 |
Owner-occupied CRE | 4,693 |  |  | — |  |  | — |  |  |  |  | — |  |  | 4,693 |
Non-owner occupied CRE | 3,424 |  |  | — |  |  | — |  |  |  |  | — |  |  | 3,424 |
Total commercial business | 10,010 |  |  | 18,738 |  |  | 584 |  |  |  |  | 1,405 |  |  | 30,737 |
Residential real estate | — |  |  | — |  |  | 67 |  |  |  |  | — |  |  | 67 |
Real estate construction and land development: |  |  |  |  |  |  |  |  |  |  |
Commercial and multifamily | 572 |  |  | — |  |  | — |  |  |  |  | — |  |  | 572 |
Consumer | — |  |  | — |  |  | 30 |  |  |  |  | — |  |  | 30 |
Total | $ | 10,582 |  |  | $ | 18,738 |  |  | $ | 681 |  |  |  |  | $ | 1,405 |  |  | $ | 31,406 |
There have been no significant changes to the collateral securing loans individually evaluated 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, 2021, except changes due to additions or removals of loans in this classification. (g) Troubled Debt Restructured Loans A TDR is a restructuring in which the Bank, for economic or legal reasons related to a borrower’s financial difficulties, grants a concession to a borrower that it would not otherwise consider. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. The concessions granted in the restructurings largely consisted of maturity extensions. 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 the scheduled 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. The CARES Act, CA Act and regulatory agencies provided guidance around the modification of loans as a result of the COVID-19 pandemic, and outlined, among other criteria, that short-term modifications made on a good faith basis to borrowers who were current as defined by the guidance are not TDRs. This includes short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or other delays in payment that are insignificant. Borrowers were considered current if they were less than 30 days past due on the contractual payments as of December 31, 2019 under the CARES Act and at the time a modification program is implemented under related regulatory guidance. The CA Act extended relief offered under the CARES Act through January 1, 2022 or 60 days after the end of the national emergency declared by the President, whichever is earlier. The Bank elected to apply the temporary relief under the applicable guidance to certain eligible short-term modifications and did not classify the modifications as TDRs for accounting or disclosure purposes. However, COVID Modifications whose payment deferral exceeded 180 days following the loans' initial modification were classified as TDRs based on the Bank's internal policy. Loans that were modified as TDR loans are set forth in the following tables for the periods indicated:
| Three Months Ended September 30,
| 2021 |  | 2020
| Number of Contracts |  | Amortized Cost (1) (2) |  | Number of Contracts |  | Amortized Cost (1) (2)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | 5 |  | $ | 1,861 |  |  | 12 |  | $ | 7,217 |
Owner-occupied CRE | 2 |  | 7,124 |  |  | 5 |  | 2,312 |
Non-owner occupied CRE | — |  | — |  |  | 2 |  | 438 |
Total commercial business | 7 |  | 8,985 |  |  | 19 |  | 9,967 |
Residential real estate | — |  | — |  |  | 1 |  | 22 |
Real estate construction and land development: |  |  |  |  |  |  |
Residential | — |  | — |  |  | 4 |  | 1,812 |
Commercial and multifamily | 1 |  |  | 450 |  |  | — |  |  | — |
Total real estate construction and land development | 1 |  | 450 |  |  | 4 |  | 1,812 |
Consumer | 5 |  | 94 |  |  | 9 |  | 127 |
Total | 13 |  | $ | 9,529 |  |  | 33 |  | $ | 11,928 |
| Nine Months Ended September 30,
| 2021 |  | 2020
| Number of Contracts |  | Amortized Cost (1) (2) |  | Number of Contracts |  | Amortized Cost (1) (2)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | 32 |  | $ | 10,380 |  |  | 37 |  | $ | 17,694 |
Owner-occupied CRE | 6 |  | 16,710 |  |  | 7 |  | 3,227 |
Non-owner occupied CRE | 3 |  | 5,673 |  |  | 4 |  | 2,417 |
Total commercial business | 41 |  | 32,763 |  |  | 48 |  | 23,338 |
Residential real estate | 1 |  | 180 |  |  | 1 |  | 22 |
Real estate construction and land development: |  |  |  |  |  |  |
Residential | — |  | — |  |  | 4 |  | 1,812 |
Commercial and multifamily | 1 |  |  | 450 |  |  | — |  |  | — |
Total real estate construction and land development | 1 |  | 450 |  |  | 4 |  | 1,812 |
Consumer | 22 |  | 487 |  |  | 20 |  | 251 |
Total | 65 |  | $ | 33,880 |  |  | 73 |  | $ | 25,423 |
(1) Number of contracts and amortized cost represent loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the three or nine months ended September 30, 2021 and September 30, 2020. (2) 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). The Bank had an ACL on loa ns of $3.4 million an d $1.6 million at September 30, 2021 and September 30, 2020, respectively, related to these TDR loans which were restructured during the nine months ended September 30, 2021 and September 30, 2020, respectively. The unfunded commitment to borrowers related to TDR loans was $4.3 million and $2.6 million at September 30, 2021 and December 31, 2020, respectively. The following tables present loans that were modified in a troubled debt restructure and subsequently defaulted within twelve months from the modification date during the periods indicated:
| Three Months Ended September 30,
| 2021 |  | 2020
| Number of Contracts (1) |  | Amortized Cost (1) |  | Number of Contracts (1) |  | Amortized Cost (1)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | 1 |  | $ | 336 |  |  | 1 |  | $ | 229 |
Total | 1 |  | $ | 336 |  |  | 1 |  | $ | 229 |
| Nine Months Ended September 30,
| 2021 |  | 2020
| Number of Contracts (1) |  | Amortized Cost (1) |  | Number of Contracts (1) |  | Amortized Cost (1)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | 3 |  | $ | 976 |  |  | 4 |  | $ | 2,152 |
Owner-occupied CRE | — |  | — |  |  | 1 |  | 431 |
Non-owner occupied CRE | — |  | — |  |  | 2 |  | 376 |
Total | 3 |  | $ | 976 |  |  | 7 |  | $ | 2,959 |
(1) Number of contracts and amortized cost represent TDR loans which have balances as of period end, net of subsequent payments after modifications. Certain TDR loans may have been paid-down or charged-off during the nine months ended September 30, 2021 and September 30, 2020. During the three and nine months ended September 30, 2021 and 2020 all of the TDR loans in the tables above defaulted because each was past its modified maturity date and the borrower had not subsequently repaid the credits. The Bank chose not to extend further the maturity date on these TDR loans. The Bank had an ACL on lo ans of $13,000 and $512,000 at September 30, 2021 and September 30, 2020, respectively, related to these TDR loans which defaulted during the nine months ended September 30, 2021 and 2020. (h) Accrued interest receivable on loans receivable Accrued interest receivable on loans receivable totaled $11.2 million and $15.8 million at September 30, 2021 and December 31, 2020, respectively. It is excluded from the calculation of the ACL on loans as interest accrued, but not received, is reversed timely. (i) Foreclosure proceedings in process At September 30, 2021, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.

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