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Loans Receivable | 9 Months Ended
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Sep. 30, 2022
Loans and Leases Receivable Disclosure [Abstract] |
Loans Receivable | Loans Receivable 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. (a) Loan Origination/Risk Management 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 2021 Annual Form 10-K. The Bank has certain lending policies and procedures in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and procedures on a regular basis. A reporting system supplements the review process by providing management with frequent reports related to loan production, loan quality, concentrations of credit, loan delinquencies and nonperforming and criticized loans. The Bank also conducts internal loan reviews and validates the credit risk assessment on a periodic basis and presents the results of these reviews to management. The loan review process complements and reinforces the risk identification and assessment decisions made by loan officers and credit personnel. The amortized cost of loans receivable, net of ACL on loans, consisted of the following portfolio segments and classes at the dates indicated:
| September 30, 2022 |  | December 31, 2021
| (In thousands)
Commercial business: |  |  |
Commercial and industrial | $ | 735,028 |  |  | $ | 621,567 |
SBA PPP | 3,593 |  |  | 145,840 |
Owner-occupied CRE | 959,486 |  |  | 931,150 |
Non-owner occupied CRE | 1,547,114 |  |  | 1,493,099 |
Total commercial business | 3,245,221 |  |  | 3,191,656 |
Residential real estate | 296,019 |  |  | 164,582 |
Real estate construction and land development: |  |  |
Residential | 92,297 |  |  | 85,547 |
Commercial and multifamily | 160,723 |  |  | 141,336 |
Total real estate construction and land development | 253,020 |  |  | 226,883 |
Consumer | 207,035 |  |  | 232,541 |
Loans receivable | 4,001,295 |  |  | 3,815,662 |
Allowance for credit losses on loans | (42,089) |  |  | (42,361) |
Loans receivable, net | $ | 3,959,206 |  |  | $ | 3,773,301 |
Balances included in the amortized cost of loans receivable: |  |  |
Unamortized net discount on acquired loans | $ | 2,686 |  |  | $ | 3,938 |
Unamortized net deferred fee | $ | 5,479 |  |  | $ | 7,954 |
(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, Multnomah County and Washington County in Oregon, as well as other contiguous markets and represents a geographic concentration. Additionally, the Bank's loan portfolio is concentrated in commercial loans, including commercial business loans and commercial and multifamily real estate construction and land development loans. Commercial loans are generally considered as having more inherent risk of default than residential real estate loans or other consumer loans. Also, the commercial loan balance per borrower is typically larger than that for residential real estate loans and consumer loans, implying higher potential losses on an individual loan basis. (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 2021 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 any 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 accrual loans at risk of being classified as nonaccrual loans and includes all of our loans classified as nonaccrual. 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. The following table presents the amortized cost of loans receivable by risk grade at the dates indicated:
| September 30, 2022 |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted (1) |  | Loans Receivable
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  |  |
| (In thousands)
Commercial business:
Commercial and industrial
Pass | $ | 133,352 |  |  | $ | 97,240 |  |  | $ | 89,078 |  |  | $ | 68,237 |  |  | $ | 36,505 |  |  | $ | 83,371 |  |  | $ | 193,558 |  |  | $ | 108 |  |  | $ | 701,449 |
SM | 223 |  |  | — |  |  | 715 |  |  | 4,759 |  |  | 1,898 |  |  | 5,311 |  |  | 6,678 |  |  | — |  |  | 19,584 |
SS | 764 |  |  | 275 |  |  | 1,057 |  |  | 3,141 |  |  | 687 |  |  | 5,381 |  |  | 2,322 |  |  | 368 |  |  | 13,995 |
Total | 134,339 |  |  | 97,515 |  |  | 90,850 |  |  | 76,137 |  |  | 39,090 |  |  | 94,063 |  |  | 202,558 |  |  | 476 |  |  | 735,028 |
SBA PPP
Pass | — |  |  | 3,455 |  |  | 138 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 3,593 |
Owner-occupied CRE
Pass | 111,751 |  |  | 168,437 |  |  | 93,272 |  |  | 172,494 |  |  | 71,795 |  |  | 302,107 |  |  | — |  |  | — |  |  | 919,856 |
SM | — |  |  | 1,009 |  |  | — |  |  | 1,237 |  |  | 2,558 |  |  | 16,313 |  |  | — |  |  | — |  |  | 21,117 |
SS | — |  |  | 259 |  |  | 675 |  |  | — |  |  | 3,739 |  |  | 13,840 |  |  | — |  |  | — |  |  | 18,513 |
Total | 111,751 |  |  | 169,705 |  |  | 93,947 |  |  | 173,731 |  |  | 78,092 |  |  | 332,260 |  |  | — |  |  | — |  |  | 959,486 |
Non-owner occupied CRE
Pass | 182,804 |  |  | 189,307 |  |  | 162,954 |  |  | 240,088 |  |  | 133,478 |  |  | 571,457 |  |  | — |  |  | — |  |  | 1,480,088 |
SM | — |  |  | 8,392 |  |  | — |  |  | 3,619 |  |  | — |  |  | 24,127 |  |  | — |  |  | — |  |  | 36,138 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | 3,627 |  |  | 27,261 |  |  | — |  |  | — |  |  | 30,888 |
Total | 182,804 |  |  | 197,699 |  |  | 162,954 |  |  | 243,707 |  |  | 137,105 |  |  | 622,845 |  |  | — |  |  | — |  |  | 1,547,114 |
Total commercial business
Pass | 427,907 |  |  | 458,439 |  |  | 345,442 |  |  | 480,819 |  |  | 241,778 |  |  | 956,935 |  |  | 193,558 |  |  | 108 |  |  | 3,104,986 |
SM | 223 |  |  | 9,401 |  |  | 715 |  |  | 9,615 |  |  | 4,456 |  |  | 45,751 |  |  | 6,678 |  |  | — |  |  | 76,839 |
SS | 764 |  |  | 534 |  |  | 1,732 |  |  | 3,141 |  |  | 8,053 |  |  | 46,482 |  |  | 2,322 |  |  | 368 |  |  | 63,396 |
Total | 428,894 |  |  | 468,374 |  |  | 347,889 |  |  | 493,575 |  |  | 254,287 |  |  | 1,049,168 |  |  | 202,558 |  |  | 476 |  |  | 3,245,221 |
Residential real estate
Pass(1) | 94,144 |  |  | 140,093 |  |  | 24,191 |  |  | 17,030 |  |  | 4,501 |  |  | 15,885 |  |  | — |  |  | — |  |  | 295,844 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 175 |  |  | — |  |  | — |  |  | 175 |
Total | 94,144 |  |  | 140,093 |  |  | 24,191 |  |  | 17,030 |  |  | 4,501 |  |  | 16,060 |  |  | — |  |  | — |  |  | 296,019 |
Real estate construction and land development:
Residential
Pass | 33,244 |  |  | 37,666 |  |  | 7,617 |  |  | 11,810 |  |  | 885 |  |  | 1,075 |  |  | — |  |  | — |  |  | 92,297 |
Commercial and multifamily
Pass | 36,362 |  |  | 103,541 |  |  | 7,601 |  |  | 1,096 |  |  | 2,565 |  |  | 1,513 |  |  | — |  |  | — |  |  | 152,678 |
SM | — |  |  | — |  |  | 1,913 |  |  | 5,687 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,600 |
SS | — |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | 400 |  |  | — |  |  | — |  |  | 445 |
Total | 36,362 |  |  | 103,541 |  |  | 9,514 |  |  | 6,828 |  |  | 2,565 |  |  | 1,913 |  |  | — |  |  | — |  |  | 160,723 |
Total real estate construction and land development
Pass | 69,606 |  |  | 141,207 |  |  | 15,218 |  |  | 12,906 |  |  | 3,450 |  |  | 2,588 |  |  | — |  |  | — |  |  | 244,975 |
SM | — |  |  | — |  |  | 1,913 |  |  | 5,687 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,600 |
SS | — |  |  | — |  |  | — |  |  | 45 |  |  | — |  |  | 400 |  |  | — |  |  | — |  |  | 445 |
Total | 69,606 |  |  | 141,207 |  |  | 17,131 |  |  | 18,638 |  |  | 3,450 |  |  | 2,988 |  |  | — |  |  | — |  |  | 253,020 |
Consumer
Pass | 3,266 |  |  | 616 |  |  | 11,078 |  |  | 31,077 |  |  | 18,201 |  |  | 22,828 |  |  | 117,070 |  |  | 539 |  |  | 204,675 |
| September 30, 2022 |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted (1) |  | Loans Receivable
| 2022 |  | 2021 |  | 2020 |  | 2019 |  | 2018 |  | Prior |  |  |
SS | — |  |  | — |  |  | 164 |  |  | 582 |  |  | 361 |  |  | 1,241 |  |  | 11 |  |  | 1 |  |  | 2,360 |
Total | 3,266 |  |  | 616 |  |  | 11,242 |  |  | 31,659 |  |  | 18,562 |  |  | 24,069 |  |  | 117,081 |  |  | 540 |  |  | 207,035 |
Loans receivable
Pass | 594,923 |  |  | 740,355 |  |  | 395,929 |  |  | 541,832 |  |  | 267,930 |  |  | 998,236 |  |  | 310,628 |  |  | 647 |  |  | 3,850,480 |
SM | 223 |  |  | 9,401 |  |  | 2,628 |  |  | 15,302 |  |  | 4,456 |  |  | 45,751 |  |  | 6,678 |  |  | — |  |  | 84,439 |
SS | 764 |  |  | 534 |  |  | 1,896 |  |  | 3,768 |  |  | 8,414 |  |  | 48,298 |  |  | 2,333 |  |  | 369 |  |  | 66,376 |
Total | $ | 595,910 |  |  | $ | 750,290 |  |  | $ | 400,453 |  |  | $ | 560,902 |  |  | $ | 280,800 |  |  | $ | 1,092,285 |  |  | $ | 319,639 |  |  | $ | 1,016 |  |  | $ | 4,001,295 |
(1) Represents the loans receivable balance at September 30, 2022 which was converted from a revolving loan to an amortizing loan during the nine months ended September 30, 2022.
| December 31, 2021 |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted (1) |  | Loans Receivable
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  |  |
| (In thousands)
Commercial business:
Commercial and industrial
Pass | $ | 95,960 |  |  | $ | 100,193 |  |  | $ | 94,657 |  |  | $ | 54,707 |  |  | $ | 28,558 |  |  | $ | 77,294 |  |  | $ | 127,651 |  |  | $ | 1,035 |  |  | $ | 580,055 |
SM | 326 |  |  | 884 |  |  | 5,998 |  |  | 1,425 |  |  | 2,223 |  |  | 2,401 |  |  | 2,048 |  |  | 353 |  |  | 15,658 |
SS | 1,443 |  |  | 1,287 |  |  | 5,912 |  |  | 2,809 |  |  | 2,526 |  |  | 6,907 |  |  | 4,402 |  |  | 568 |  |  | 25,854 |
Total | 97,729 |  |  | 102,364 |  |  | 106,567 |  |  | 58,941 |  |  | 33,307 |  |  | 86,602 |  |  | 134,101 |  |  | 1,956 |  |  | 621,567 |
SBA PPP
Pass | 139,253 |  |  | 6,587 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 145,840 |
Owner-occupied CRE
Pass | 182,742 |  |  | 90,609 |  |  | 188,380 |  |  | 73,714 |  |  | 66,039 |  |  | 273,518 |  |  | — |  |  | 72 |  |  | 875,074 |
SM | 264 |  |  | — |  |  | 3,079 |  |  | 7,521 |  |  | 3,937 |  |  | 16,724 |  |  | — |  |  | — |  |  | 31,525 |
SS | — |  |  | 1,332 |  |  | — |  |  | 3,787 |  |  | 3,014 |  |  | 16,418 |  |  | — |  |  | — |  |  | 24,551 |
Total | 183,006 |  |  | 91,941 |  |  | 191,459 |  |  | 85,022 |  |  | 72,990 |  |  | 306,660 |  |  | — |  |  | 72 |  |  | 931,150 |
Non-owner-occupied CRE
Pass | 187,860 |  |  | 185,650 |  |  | 244,863 |  |  | 149,090 |  |  | 144,896 |  |  | 499,486 |  |  | — |  |  | — |  |  | 1,411,845 |
SM | — |  |  | — |  |  | 5,674 |  |  | — |  |  | 15,482 |  |  | 2,400 |  |  | — |  |  | — |  |  | 23,556 |
SS | — |  |  | — |  |  | — |  |  | 3,379 |  |  | — |  |  | 54,319 |  |  | — |  |  | — |  |  | 57,698 |
Total | 187,860 |  |  | 185,650 |  |  | 250,537 |  |  | 152,469 |  |  | 160,378 |  |  | 556,205 |  |  | — |  |  | — |  |  | 1,493,099 |
Total commercial business
Pass | 605,815 |  |  | 383,039 |  |  | 527,900 |  |  | 277,511 |  |  | 239,493 |  |  | 850,298 |  |  | 127,651 |  |  | 1,107 |  |  | 3,012,814 |
SM | 590 |  |  | 884 |  |  | 14,751 |  |  | 8,946 |  |  | 21,642 |  |  | 21,525 |  |  | 2,048 |  |  | 353 |  |  | 70,739 |
SS | 1,443 |  |  | 2,619 |  |  | 5,912 |  |  | 9,975 |  |  | 5,540 |  |  | 77,644 |  |  | 4,402 |  |  | 568 |  |  | 108,103 |
Total | 607,848 |  |  | 386,542 |  |  | 548,563 |  |  | 296,432 |  |  | 266,675 |  |  | 949,467 |  |  | 134,101 |  |  | 2,028 |  |  | 3,191,656 |
Residential real estate
Pass | 85,089 |  |  | 27,090 |  |  | 23,295 |  |  | 5,672 |  |  | 6,141 |  |  | 16,891 |  |  | — |  |  | — |  |  | 164,178 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 404 |  |  | — |  |  | — |  |  | 404 |
Total | 85,089 |  |  | 27,090 |  |  | 23,295 |  |  | 5,672 |  |  | 6,141 |  |  | 17,295 |  |  | — |  |  | — |  |  | 164,582 |
Real estate construction and land development:
Residential
Pass | 44,892 |  |  | 23,728 |  |  | 12,266 |  |  | 2,921 |  |  | 389 |  |  | 1,351 |  |  | — |  |  | — |  |  | 85,547 |
| December 31, 2021 |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted (1) |  | Loans Receivable
| 2021 |  | 2020 |  | 2019 |  | 2018 |  | 2017 |  | Prior |  |  |
| (In thousands)
Commercial and multifamily
Pass | 56,448 |  |  | 41,616 |  |  | 34,117 |  |  | 5,794 |  |  | 710 |  |  | 1,379 |  |  | — |  |  | — |  |  | 140,064 |
SM | — |  |  | — |  |  | 68 |  |  | — |  |  | — |  |  | 213 |  |  | — |  |  | — |  |  | 281 |
SS | — |  |  | 571 |  |  | — |  |  | — |  |  | — |  |  | 420 |  |  | — |  |  | — |  |  | 991 |
Total | 56,448 |  |  | 42,187 |  |  | 34,185 |  |  | 5,794 |  |  | 710 |  |  | 2,012 |  |  | — |  |  | — |  |  | 141,336 |
Total real estate construction and land development
Pass | 101,340 |  |  | 65,344 |  |  | 46,383 |  |  | 8,715 |  |  | 1,099 |  |  | 2,730 |  |  | — |  |  | — |  |  | 225,611 |
SM | — |  |  | — |  |  | 68 |  |  | — |  |  | — |  |  | 213 |  |  | — |  |  | — |  |  | 281 |
SS | — |  |  | 571 |  |  | — |  |  | — |  |  | — |  |  | 420 |  |  | — |  |  | — |  |  | 991 |
Total | 101,340 |  |  | 65,915 |  |  | 46,451 |  |  | 8,715 |  |  | 1,099 |  |  | 3,363 |  |  | — |  |  | — |  |  | 226,883 |
Consumer
Pass | 1,286 |  |  | 15,737 |  |  | 46,041 |  |  | 29,819 |  |  | 15,068 |  |  | 13,026 |  |  | 108,492 |  |  | 120 |  |  | 229,589 |
SS | — |  |  | 181 |  |  | 657 |  |  | 476 |  |  | 542 |  |  | 1,043 |  |  | 36 |  |  | 17 |  |  | 2,952 |
Total | 1,286 |  |  | 15,918 |  |  | 46,698 |  |  | 30,295 |  |  | 15,610 |  |  | 14,069 |  |  | 108,528 |  |  | 137 |  |  | 232,541 |
Loans receivable
Pass | 793,530 |  |  | 491,210 |  |  | 643,619 |  |  | 321,717 |  |  | 261,801 |  |  | 882,945 |  |  | 236,143 |  |  | 1,227 |  |  | 3,632,192 |
SM | 590 |  |  | 884 |  |  | 14,819 |  |  | 8,946 |  |  | 21,642 |  |  | 21,738 |  |  | 2,048 |  |  | 353 |  |  | 71,020 |
SS | 1,443 |  |  | 3,371 |  |  | 6,569 |  |  | 10,451 |  |  | 6,082 |  |  | 79,511 |  |  | 4,438 |  |  | 585 |  |  | 112,450 |
Total | $ | 795,563 |  |  | $ | 495,465 |  |  | $ | 665,007 |  |  | $ | 341,114 |  |  | $ | 289,525 |  |  | $ | 984,194 |  |  | $ | 242,629 |  |  | $ | 2,165 |  |  | $ | 3,815,662 |
(1) Represents the loans receivable balance at December 31, 2021 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2021. (d) Nonaccrual Loans The following tables present the amortized cost of nonaccrual loans for the dates indicated:
| September 30, 2022
| Nonaccrual without ACL |  | Nonaccrual with ACL |  | Total Nonaccrual
| (In thousands)
Commercial business: |  |  |  |  |
Commercial and industrial | $ | 5,060 |  |  | $ | 299 |  |  | $ | 5,359 |
Owner-occupied CRE | — |  |  | 875 |  |  | 875 |
Total | $ | 5,060 |  |  | $ | 1,174 |  |  | $ | 6,234 |
| December 31, 2021
| Nonaccrual without ACL |  | Nonaccrual with ACL |  | Total Nonaccrual
| (In thousands)
Commercial business: |  |  |  |  |
Commercial and industrial | $ | 6,454 |  |  | $ | 3,827 |  |  | $ | 10,281 |
Owner-occupied CRE | 3,036 |  |  | 5,138 |  |  | 8,174 |
Non-owner occupied CRE | 1,273 |  |  | 3,379 |  |  | 4,652 |
Total commercial business | 10,763 |  |  | 12,344 |  |  | 23,107 |
Residential real estate | — |  |  | 47 |  |  | 47 |
Real estate construction and land development: |  |  |  |  |
Commercial and multifamily | — |  |  | 571 |  |  | 571 |
Consumer | — |  |  | 29 |  |  | 29 |
Total | $ | 10,763 |  |  | $ | 12,991 |  |  | $ | 23,754 |
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 or sale of previously classified nonaccrual loans during the following periods:
| Three Months Ended September 30, 2022 |  | Three Months Ended September 30, 2021
| Interest Income Reversed |  | Interest Income Recognized |  | Interest Income Reversed |  | Interest Income Recognized
| (In thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | — |  |  | $ | 31 |  |  | $ | (1) |  |  | $ | 184 |
Consumer | — |  |  | — |  |  | — |  |  | 32 |
Total | $ | — |  |  | $ | 31 |  |  | $ | (1) |  |  | $ | 216 |
| Nine Months Ended September 30, 2022 |  | Nine Months Ended September 30, 2021
| Interest Income Reversed |  | Interest Income Recognized |  | Interest Income Reversed |  | Interest Income Recognized
| (in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | (14) |  |  | $ | 260 |  |  | $ | (11) |  |  | $ | 2,228 |
Owner-occupied CRE | — |  |  | 53 |  |  | — |  |  | 117 |
Non-owner occupied CRE | — |  |  | 774 |  |  | — |  |  | 313 |
Total commercial business | (14) |  |  | 1,087 |  |  | (11) |  |  | 2,658 |
Residential real estate | — |  |  | 19 |  |  | — |  |  | — |
Real estate construction and land development: |  |  |  |  |  |  |
Residential | — |  |  | — |  |  | — |  |  | 73 |
Consumer | — |  |  | 68 |  |  | — |  |  | 32 |
Total | $ | (14) |  |  | $ | 1,174 |  |  | $ | (11) |  |  | $ | 2,763 |
For the three and nine months ended September 30, 2022 and 2021, 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 or sale. (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, 2022 and December 31, 2021 were as follows:
| September 30, 2022
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,774 |  |  | $ | 4,130 |  |  | $ | 5,904 |  |  | $ | 729,124 |  |  | $ | 735,028 |
SBA PPP | 167 |  |  | — |  |  | 167 |  |  | 3,426 |  |  | 3,593 |
Owner-occupied CRE | 30 |  |  | 189 |  |  | 219 |  |  | 959,267 |  |  | 959,486 |
Non-owner occupied CRE | 296 |  |  | — |  |  | 296 |  |  | 1,546,818 |  |  | 1,547,114 |
Total commercial business | 2,267 |  |  | 4,319 |  |  | 6,586 |  |  | 3,238,635 |  |  | 3,245,221 |
Residential real estate | — |  |  | — |  |  | — |  |  | 296,019 |  |  | 296,019 |
Real estate construction and land development:
Residential | — |  |  | — |  |  | — |  |  | 92,297 |  |  | 92,297 |
Commercial and multifamily | — |  |  | — |  |  | — |  |  | 160,723 |  |  | 160,723 |
Total real estate construction and land development | — |  |  | — |  |  | — |  |  | 253,020 |  |  | 253,020 |
| September 30, 2022
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Consumer | 736 |  |  | 20 |  |  | 756 |  |  | 206,279 |  |  | 207,035 |
Total | $ | 3,003 |  |  | $ | 4,339 |  |  | $ | 7,342 |  |  | $ | 3,993,953 |  |  | $ | 4,001,295 |
| December 31, 2021
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,858 |  |  | $ | 6,821 |  |  | $ | 8,679 |  |  | $ | 612,888 |  |  | $ | 621,567 |
SBA PPP | 223 |  |  | 293 |  |  | 516 |  |  | 145,324 |  |  | 145,840 |
Owner-occupied CRE | 2,397 |  |  | 112 |  |  | 2,509 |  |  | 928,641 |  |  | 931,150 |
Non-owner occupied CRE | — |  |  | — |  |  | — |  |  | 1,493,099 |  |  | 1,493,099 |
Total commercial business | 4,478 |  |  | 7,226 |  |  | 11,704 |  |  | 3,179,952 |  |  | 3,191,656 |
Residential real estate | 420 |  |  | 10 |  |  | 430 |  |  | 164,152 |  |  | 164,582 |
Real estate construction and land development:
Residential | 792 |  |  | — |  |  | 792 |  |  | 84,755 |  |  | 85,547 |
Commercial and multifamily | 3,474 |  |  | 571 |  |  | 4,045 |  |  | 137,291 |  |  | 141,336 |
Total real estate construction and land development | 4,266 |  |  | 571 |  |  | 4,837 |  |  | 222,046 |  |  | 226,883 |
Consumer | 1,026 |  |  | — |  |  | 1,026 |  |  | 231,515 |  |  | 232,541 |
Total | $ | 10,190 |  |  | $ | 7,807 |  |  | $ | 17,997 |  |  | $ | 3,797,665 |  |  | $ | 3,815,662 |
Loans 90 days or more past due and still accruing interest were $20,000 and $293,000 as of September 30, 2022 and December 31, 2021, respectively. (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, 2022 and December 31, 2021 was 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, 2022
| CRE |  | Farmland |  | Residential Real Estate |  |  |  | Total
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,239 |  |  | $ | 2,082 |  |  | $ | 1,271 |  |  |  |  | $ | 4,592 |
Owner-occupied CRE | 189 |  |  | — |  |  | — |  |  |  |  | 189 |
Total | $ | 1,428 |  |  | $ | 2,082 |  |  | $ | 1,271 |  |  |  |  | $ | 4,781 |
| December 31, 2021
| CRE |  | Farmland |  | Residential Real Estate |  | Other |  | Total
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,499 |  |  | $ | 4,362 |  |  | $ | 1,036 |  |  | $ | 245 |  |  | $ | 7,142 |
Owner-occupied CRE | 3,035 |  |  | — |  |  | — |  |  | — |  |  | 3,035 |
Non-owner occupied CRE | 1,273 |  |  | — |  |  | — |  |  | — |  |  | 1,273 |
Total commercial business | 5,807 |  |  | 4,362 |  |  | 1,036 |  |  | 245 |  |  | 11,450 |
Real estate construction and land development:
| December 31, 2021
| CRE |  | Farmland |  | Residential Real Estate |  | Other |  | Total
| (In thousands)
Commercial and multifamily | 571 |  |  | — |  |  | — |  |  | — |  |  | 571 |
Total | $ | 6,378 |  |  | $ | 4,362 |  |  | $ | 1,036 |  |  | $ | 245 |  |  | $ | 12,021 |
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, 2022, except changes due to additions or removals of loans from this classification. (g) Troubled Debt Restructured Loans Loans that were modified as TDR loans are set forth in the following table for the periods indicated:
| Three Months Ended September 30,
| 2022 |  | 2021
| Number of Contracts |  | Amortized Cost (1) (2) |  | Number of Contracts |  | Amortized Cost (1) (2)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | 4 |  | $ | 2,150 |  |  | 5 |  | $ | 1,861 |
Owner-occupied CRE | — |  | — |  |  | 2 |  | 7,124 |
Non-owner occupied CRE | — |  | — |  |  | — |  | — |
Total commercial business | 4 |  | 2,150 |  |  | 7 |  | 8,985 |
Real estate construction and land development: |  |  |  |  |  |  |
Commercial and multifamily | 1 |  |  | 5,687 |  |  | 1 |  |  | 450 |
Consumer | 2 |  | 238 |  |  | 5 |  | 94 |
Total | 7 |  | $ | 8,075 |  |  | 13 |  | $ | 9,529 |
| Nine Months Ended September 30,
| 2022 |  | 2021
| Number of Contracts |  | Amortized Cost (1) (2) |  | Number of Contracts |  | Amortized Cost (1) (2)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | 8 |  | $ | 3,119 |  |  | 32 |  | $ | 10,380 |
Owner-occupied CRE | — |  | — |  |  | 6 |  | 16,710 |
Non-owner occupied CRE | — |  | — |  |  | 3 |  | 5,673 |
Total commercial business | 8 |  | 3,119 |  |  | 41 |  | 32,763 |
Residential real estate | — |  | — |  |  | 1 |  | 180 |
Real estate construction and land development: |  |  |  |  |  |  |
Commercial and multifamily | 1 |  |  | 5,687 |  |  | 1 |  |  | 450 |
Consumer | 9 |  | 307 |  |  | 22 |  | 487 |
Total | 18 |  | $ | 9,113 |  |  | 65 |  | $ | 33,880 |
(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 nine months ended September 30, 2022 and 2021. (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 $30,000 an d $3.4 million at September 30, 2022 and September 30, 2021, respectively, related to these TDR loans which were restructured during the nine months ended September 30, 2022 and September 30, 2021, respectively. The unfunded commitment to borrowers related to TDR loans was $5.9 million and $5.7 million at September 30, 2022 and December 31, 2021, respectively. The following table presents loans that were modified in a TDR and subsequently defaulted within twelve months from the modification date during the periods indicated:
| Three Months Ended September 30,
| 2022 |  | 2021
| Number of Contracts (1) |  | Amortized Cost (1) |  | Number of Contracts (1) |  | Amortized Cost (1)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | — |  | $ | — |  |  | 1 |  | $ | 336 |
| Nine Months Ended September 30,
| 2022 |  | 2021
| Number of Contracts (1) |  | Amortized Cost (1) |  | Number of Contracts (1) |  | Amortized Cost (1)
| (Dollars in thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | — |  | $ | — |  |  | 3 |  | $ | 976 |
Owner-occupied CRE | 1 |  | 189 |  |  | — |  | — |
(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, 2022 and 2021. The Bank had $4,000 ACL on loans at September 30, 2022 and $13,000 at September 30, 2021 related to these TDR loans which defaulted during the nine months ended September 30, 2022 and 2021. (h) Accrued interest receivable on loans receivable Accrued interest receivable on loans receivable totaled $10.5 million and $10.1 million at September 30, 2022 and December 31, 2021, 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, 2022, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.

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