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Loans Receivable | 3 Months Ended
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Mar. 31, 2023
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. In addition to originating loans, the Bank may also purchase loans through pool purchases, participation purchases and syndicated loan purchases. (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 2022 Annual Form 10-K. The Bank has certain lending policies and guidelines in place that are designed to maximize loan income within an acceptable level of risk. Management reviews and approves these policies and guidelines 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:
| March 31, 2023 |  | December 31, 2022
| (In thousands)
Commercial business: |  |  |
Commercial and industrial | $ | 684,998 |  |  | $ | 692,100 |
SBA PPP | 900 |  |  | 1,468 |
Owner-occupied CRE | 949,064 |  |  | 937,040 |
| March 31, 2023 |  | December 31, 2022
| (In thousands)
Non-owner occupied CRE | 1,601,789 |  |  | 1,586,632 |
Total commercial business | 3,236,751 |  |  | 3,217,240 |
Residential real estate | 363,777 |  |  | 343,631 |
Real estate construction and land development: |  |  |
Residential | 72,926 |  |  | 80,074 |
Commercial and multifamily | 270,547 |  |  | 214,038 |
Total real estate construction and land development | 343,473 |  |  | 294,112 |
Consumer | 183,471 |  |  | 195,875 |
Loans receivable | 4,127,472 |  |  | 4,050,858 |
Allowance for credit losses on loans | (44,469) |  |  | (42,986) |
Loans receivable, net | $ | 4,083,003 |  |  | $ | 4,007,872 |
Balances included in the amortized cost of loans receivable: |  |  |
Unamortized net discount on acquired loans | $ | (2,249) |  |  | $ | (2,501) |
Unamortized net deferred fee | $ | (10,355) |  |  | $ | (10,016) |
(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, Washington to Lane County, Oregon, as well as Yakima County in Washington and Ada County in Idaho. Additionally, the Bank's loan portfolio is concentrated in commercial business loans, which include commercial and industrial, SBA PPP, owner-occupied and nonowner-occupied CRE, and commercial and multifamily real estate construction and land development loans. Commercial business loans, excluding SBA PPP loans, are generally considered as having a 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 2022 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 have further credit deterioration and include both accrual loans and nonaccrual loans. 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 and origination year at the dates indicated. The Bank adopted the vintage disclosure requirements of ASU 2022-02 prospectively as described in Note 1 beginning in January 2023. Accordingly, the following vintage table reflects the gross charge-offs by loan class and year of origination for the date indicated:
| March 31, 2023 |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted (1) |  | Loans Receivable
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  |  |
| (In thousands)
Commercial business:
Commercial and industrial
Pass | $ | 21,299 |  |  | $ | 171,005 |  |  | $ | 91,228 |  |  | $ | 79,267 |  |  | $ | 54,430 |  |  | $ | 98,811 |  |  | $ | 126,167 |  |  | $ | 118 |  |  | $ | 642,325 |
SM | — |  |  | 200 |  |  | 206 |  |  | 434 |  |  | 4,567 |  |  | 5,415 |  |  | 17,784 |  |  | — |  |  | 28,606 |
SS | — |  |  | 1,130 |  |  | 176 |  |  | 1,642 |  |  | 3,326 |  |  | 4,854 |  |  | 2,939 |  |  | — |  |  | 14,067 |
Total | 21,299 |  |  | 172,335 |  |  | 91,610 |  |  | 81,343 |  |  | 62,323 |  |  | 109,080 |  |  | 146,890 |  |  | 118 |  |  | 684,998 |
SBA PPP
Pass | — |  |  | — |  |  | 804 |  |  | 96 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 900 |
Owner-occupied CRE
Pass | 27,989 |  |  | 134,625 |  |  | 167,906 |  |  | 90,118 |  |  | 155,172 |  |  | 332,083 |  |  | — |  |  | — |  |  | 907,893 |
SM | — |  |  | — |  |  | 1,971 |  |  | 2,041 |  |  | — |  |  | 19,274 |  |  | — |  |  | — |  |  | 23,286 |
SS | — |  |  | — |  |  | — |  |  | 667 |  |  | — |  |  | 17,218 |  |  | — |  |  | — |  |  | 17,885 |
Total | 27,989 |  |  | 134,625 |  |  | 169,877 |  |  | 92,826 |  |  | 155,172 |  |  | 368,575 |  |  | — |  |  | — |  |  | 949,064 |
Non-owner occupied CRE
Pass | 48,286 |  |  | 242,245 |  |  | 185,064 |  |  | 159,050 |  |  | 245,235 |  |  | 671,604 |  |  | — |  |  | — |  |  | 1,551,484 |
SM | — |  |  | — |  |  | 8,304 |  |  | — |  |  | 584 |  |  | 27,788 |  |  | — |  |  | — |  |  | 36,676 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 13,629 |  |  | — |  |  | — |  |  | 13,629 |
Total | 48,286 |  |  | 242,245 |  |  | 193,368 |  |  | 159,050 |  |  | 245,819 |  |  | 713,021 |  |  | — |  |  | — |  |  | 1,601,789 |
Total commercial business
Pass | 97,574 |  |  | 547,875 |  |  | 445,002 |  |  | 328,531 |  |  | 454,837 |  |  | 1,102,498 |  |  | 126,167 |  |  | 118 |  |  | 3,102,602 |
SM | — |  |  | 200 |  |  | 10,481 |  |  | 2,475 |  |  | 5,151 |  |  | 52,477 |  |  | 17,784 |  |  | — |  |  | 88,568 |
SS | — |  |  | 1,130 |  |  | 176 |  |  | 2,309 |  |  | 3,326 |  |  | 35,701 |  |  | 2,939 |  |  | — |  |  | 45,581 |
Total | 97,574 |  |  | 549,205 |  |  | 455,659 |  |  | 333,315 |  |  | 463,314 |  |  | 1,190,676 |  |  | 146,890 |  |  | 118 |  |  | 3,236,751 |
Commercial business gross charge-offs
Current period | — |  |  | — |  |  | — |  |  | 61 |  |  | — |  |  | 100 |  |  | — |  |  | — |  |  | 161 |
Residential real estate
Pass(1) | 18,666 |  |  | 133,415 |  |  | 151,041 |  |  | 25,500 |  |  | 16,680 |  |  | 18,232 |  |  | — |  |  | — |  |  | 363,534 |
SS | — |  |  | — |  |  | — |  |  | 74 |  |  | — |  |  | 169 |  |  | — |  |  | — |  |  | 243 |
Total | 18,666 |  |  | 133,415 |  |  | 151,041 |  |  | 25,574 |  |  | 16,680 |  |  | 18,401 |  |  | — |  |  | — |  |  | 363,777 |
Residential real estate gross charge-offs:
Current period | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Real estate construction and land development:
Residential
Pass | 4,995 |  |  | 44,885 |  |  | 16,392 |  |  | 1,804 |  |  | 2,969 |  |  | 1,881 |  |  | — |  |  | — |  |  | 72,926 |
Commercial and multifamily
Pass | 6,245 |  |  | 105,433 |  |  | 139,246 |  |  | 6,721 |  |  | 794 |  |  | 3,457 |  |  | — |  |  | — |  |  | 261,896 |
SM | — |  |  | — |  |  | — |  |  | 2,577 |  |  | 5,687 |  |  | — |  |  | — |  |  | — |  |  | 8,264 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 387 |  |  | — |  |  | — |  |  | 387 |
Total | 6,245 |  |  | 105,433 |  |  | 139,246 |  |  | 9,298 |  |  | 6,481 |  |  | 3,844 |  |  | — |  |  | — |  |  | 270,547 |
| March 31, 2023 |  |  |  |  |  |
| Term Loans Amortized Cost Basis by Origination Year |  | Revolving Loans |  | Revolving Loans Converted (1) |  | Loans Receivable
| 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  |  |
Total real estate construction and land development
Pass | 11,240 |  |  | 150,318 |  |  | 155,638 |  |  | 8,525 |  |  | 3,763 |  |  | 5,338 |  |  | — |  |  | — |  |  | 334,822 |
SM | — |  |  | — |  |  | — |  |  | 2,577 |  |  | 5,687 |  |  | — |  |  | — |  |  | — |  |  | 8,264 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 387 |  |  | — |  |  | — |  |  | 387 |
Total | 11,240 |  |  | 150,318 |  |  | 155,638 |  |  | 11,102 |  |  | 9,450 |  |  | 5,725 |  |  | — |  |  | — |  |  | 343,473 |
Real estate construction and land development gross writeoffs:
Current period | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Consumer
Pass | 823 |  |  | 2,956 |  |  | 466 |  |  | 8,827 |  |  | 24,015 |  |  | 31,315 |  |  | 112,073 |  |  | 383 |  |  | 180,858 |
SS | — |  |  | — |  |  | 11 |  |  | 191 |  |  | 515 |  |  | 1,328 |  |  | 561 |  |  | 7 |  |  | 2,613 |
Total | 823 |  |  | 2,956 |  |  | 477 |  |  | 9,018 |  |  | 24,530 |  |  | 32,643 |  |  | 112,634 |  |  | 390 |  |  | 183,471 |
Consumer gross charge-offs:
Current period | — |  |  | — |  |  | — |  |  | 8 |  |  | 39 |  |  | 35 |  |  | 71 |  |  | — |  |  | 153 |
Loans receivable
Pass | 128,303 |  |  | 834,564 |  |  | 752,147 |  |  | 371,383 |  |  | 499,295 |  |  | 1,157,383 |  |  | 238,240 |  |  | 501 |  |  | 3,981,816 |
SM | — |  |  | 200 |  |  | 10,481 |  |  | 5,052 |  |  | 10,838 |  |  | 52,477 |  |  | 17,784 |  |  | — |  |  | 96,832 |
SS | — |  |  | 1,130 |  |  | 187 |  |  | 2,574 |  |  | 3,841 |  |  | 37,585 |  |  | 3,500 |  |  | 7 |  |  | 48,824 |
Total | $ | 128,303 |  |  | $ | 835,894 |  |  | $ | 762,815 |  |  | $ | 379,009 |  |  | $ | 513,974 |  |  | $ | 1,247,445 |  |  | $ | 259,524 |  |  | $ | 508 |  |  | $ | 4,127,472 |
Gross writeoffs:
Current period total | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 69 |  |  | $ | 39 |  |  | $ | 135 |  |  | $ | 71 |  |  | $ | — |  |  | $ | 314 |
(1) Represents the loans receivable balance at March 31, 2023 which was converted from a revolving loan to an amortizing loan during the three months ended months ended March 31, 2023.
| December 31, 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 | $ | 168,818 |  |  | $ | 93,302 |  |  | $ | 82,437 |  |  | $ | 61,160 |  |  | $ | 33,957 |  |  | $ | 74,181 |  |  | $ | 146,795 |  |  | $ | 172 |  |  | $ | 660,822 |
SM | 212 |  |  | 109 |  |  | 443 |  |  | 4,637 |  |  | 362 |  |  | 4,447 |  |  | 5,433 |  |  | — |  |  | 15,643 |
SS | 773 |  |  | 188 |  |  | 1,710 |  |  | 3,465 |  |  | 559 |  |  | 5,098 |  |  | 3,674 |  |  | 168 |  |  | 15,635 |
Total | 169,803 |  |  | 93,599 |  |  | 84,590 |  |  | 69,262 |  |  | 34,878 |  |  | 83,726 |  |  | 155,902 |  |  | 340 |  |  | 692,100 |
SBA PPP
Pass | — |  |  | 1,351 |  |  | 117 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,468 |
Owner-occupied CRE
Pass | 134,432 |  |  | 167,927 |  |  | 93,834 |  |  | 157,096 |  |  | 62,876 |  |  | 282,212 |  |  | — |  |  | — |  |  | 898,377 |
SM | — |  |  | 1,744 |  |  | — |  |  | — |  |  | 2,540 |  |  | 16,664 |  |  | — |  |  | 247 |  |  | 21,195 |
SS | — |  |  | — |  |  | 671 |  |  | — |  |  | 3,722 |  |  | 13,075 |  |  | — |  |  | — |  |  | 17,468 |
Total | 134,432 |  |  | 169,671 |  |  | 94,505 |  |  | 157,096 |  |  | 69,138 |  |  | 311,951 |  |  | — |  |  | 247 |  |  | 937,040 |
Non-owner-occupied CRE
Pass | 240,151 |  |  | 189,300 |  |  | 160,930 |  |  | 258,778 |  |  | 121,369 |  |  | 561,645 |  |  | — |  |  | — |  |  | 1,532,173 |
SM | — |  |  | 8,349 |  |  | — |  |  | 4,172 |  |  | — |  |  | 12,190 |  |  | — |  |  | — |  |  | 24,711 |
| December 31, 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)
SS | — |  |  | — |  |  | — |  |  | — |  |  | 3,627 |  |  | 26,121 |  |  | — |  |  | — |  |  | 29,748 |
Total | 240,151 |  |  | 197,649 |  |  | 160,930 |  |  | 262,950 |  |  | 124,996 |  |  | 599,956 |  |  | — |  |  | — |  |  | 1,586,632 |
Total commercial business
Pass | 543,401 |  |  | 451,880 |  |  | 337,318 |  |  | 477,034 |  |  | 218,202 |  |  | 918,038 |  |  | 146,795 |  |  | 172 |  |  | 3,092,840 |
SM | 212 |  |  | 10,202 |  |  | 443 |  |  | 8,809 |  |  | 2,902 |  |  | 33,301 |  |  | 5,433 |  |  | 247 |  |  | 61,549 |
SS | 773 |  |  | 188 |  |  | 2,381 |  |  | 3,465 |  |  | 7,908 |  |  | 44,294 |  |  | 3,674 |  |  | 168 |  |  | 62,851 |
Total | 544,386 |  |  | 462,270 |  |  | 340,142 |  |  | 489,308 |  |  | 229,012 |  |  | 995,633 |  |  | 155,902 |  |  | 587 |  |  | 3,217,240 |
Residential real estate
Pass | 132,510 |  |  | 149,934 |  |  | 24,668 |  |  | 16,803 |  |  | 4,207 |  |  | 15,337 |  |  | — |  |  | — |  |  | 343,459 |
SS | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 172 |  |  | — |  |  | — |  |  | 172 |
Total | 132,510 |  |  | 149,934 |  |  | 24,668 |  |  | 16,803 |  |  | 4,207 |  |  | 15,509 |  |  | — |  |  | — |  |  | 343,631 |
Real estate construction and land development:
Residential
Pass | 45,521 |  |  | 26,675 |  |  | 2,891 |  |  | 3,061 |  |  | 871 |  |  | 1,055 |  |  | — |  |  | — |  |  | 80,074 |
Commercial and multifamily
Pass | 71,168 |  |  | 123,626 |  |  | 6,272 |  |  | 1,084 |  |  | 2,562 |  |  | 995 |  |  | — |  |  | — |  |  | 205,707 |
SM | — |  |  | — |  |  | 2,213 |  |  | 5,687 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,900 |
SS | — |  |  | — |  |  | — |  |  | 37 |  |  | — |  |  | 394 |  |  | — |  |  | — |  |  | 431 |
Total | 71,168 |  |  | 123,626 |  |  | 8,485 |  |  | 6,808 |  |  | 2,562 |  |  | 1,389 |  |  | — |  |  | — |  |  | 214,038 |
Total real estate construction and land development
Pass | 116,689 |  |  | 150,301 |  |  | 9,163 |  |  | 4,145 |  |  | 3,433 |  |  | 2,050 |  |  | — |  |  | — |  |  | 285,781 |
SM | — |  |  | — |  |  | 2,213 |  |  | 5,687 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,900 |
SS | — |  |  | — |  |  | — |  |  | 37 |  |  | — |  |  | 394 |  |  | — |  |  | — |  |  | 431 |
Total | 116,689 |  |  | 150,301 |  |  | 11,376 |  |  | 9,869 |  |  | 3,433 |  |  | 2,444 |  |  | — |  |  | — |  |  | 294,112 |
Consumer
Pass | 3,379 |  |  | 509 |  |  | 9,848 |  |  | 27,370 |  |  | 15,563 |  |  | 19,855 |  |  | 116,605 |  |  | 435 |  |  | 193,564 |
SS | — |  |  | — |  |  | 168 |  |  | 559 |  |  | 320 |  |  | 1,120 |  |  | 44 |  |  | 100 |  |  | 2,311 |
Total | 3,379 |  |  | 509 |  |  | 10,016 |  |  | 27,929 |  |  | 15,883 |  |  | 20,975 |  |  | 116,649 |  |  | 535 |  |  | 195,875 |
Loans receivable
Pass | 795,979 |  |  | 752,624 |  |  | 380,997 |  |  | 525,352 |  |  | 241,405 |  |  | 955,280 |  |  | 263,400 |  |  | 607 |  |  | 3,915,644 |
SM | 212 |  |  | 10,202 |  |  | 2,656 |  |  | 14,496 |  |  | 2,902 |  |  | 33,301 |  |  | 5,433 |  |  | 247 |  |  | 69,449 |
SS | 773 |  |  | 188 |  |  | 2,549 |  |  | 4,061 |  |  | 8,228 |  |  | 45,980 |  |  | 3,718 |  |  | 268 |  |  | 65,765 |
Total | $ | 796,964 |  |  | $ | 763,014 |  |  | $ | 386,202 |  |  | $ | 543,909 |  |  | $ | 252,535 |  |  | $ | 1,034,561 |  |  | $ | 272,551 |  |  | $ | 1,122 |  |  | $ | 4,050,858 |
1) Represents the loans receivable balance at December 31, 2022 which was converted from a revolving loan to an amortizing loan during the year ended December 31, 2022. (d) Nonaccrual Loans The following tables present the amortized cost of nonaccrual loans for the dates indicated:
| March 31, 2023
| Nonaccrual without ACL |  | Nonaccrual with ACL |  | Total Nonaccrual
| (In thousands)
Commercial business: |  |  |  |  |
Commercial and industrial | $ | 3,964 |  |  | $ | 641 |  |  | $ | 4,605 |
Owner-occupied CRE | — |  |  | 210 |  |  | 210 |
Total | $ | 3,964 |  |  | $ | 851 |  |  | $ | 4,815 |
| December 31, 2022
| Nonaccrual without ACL |  | Nonaccrual with ACL |  | Total Nonaccrual
| (In thousands)
Commercial business: |  |  |  |  |
Commercial and industrial | $ | 4,503 |  |  | $ | 1,154 |  |  | $ | 5,657 |
Owner-occupied CRE | — |  |  | 212 |  |  | 212 |
Total commercial business | 4,503 |  |  | 1,366 |  |  | 5,869 |
Real estate construction and land development: |  |  |  |  |
Commercial and multifamily | — |  |  | 37 |  |  | 37 |
Total | $ | 4,503 |  |  | $ | 1,403 |  |  | $ | 5,906 |
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 March 31, 2023 |  | Three Months Ended March 31, 2022
| Interest Income Reversed |  | Interest Income Recognized |  | Interest Income Reversed |  | Interest Income Recognized
| (In thousands)
Commercial business: |  |  |  |  |  |  |
Commercial and industrial | $ | (14) |  |  | $ | 28 |  |  | $ | (2) |  |  | $ | 139 |
Owner-occupied CRE | — |  |  | — |  |  | — |  |  | 53 |
Non-owner occupied CRE | — |  |  | — |  |  | — |  |  | 774 |
Total commercial business | (14) |  |  | 28 |  |  | (2) |  |  | 966 |
Residential real estate | — |  |  | — |  |  | — |  |  | 19 |
Consumer | — |  |  | — |  |  | — |  |  | 68 |
Total | $ | (14) |  |  | $ | 28 |  |  | $ | (2) |  |  | $ | 1,053 |
For the three months ended March 31, 2023 and 2022, 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 March 31, 2023 and December 31, 2022 were as follows:
| March 31, 2023
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,984 |  |  | $ | 4,855 |  |  | $ | 6,839 |  |  | $ | 678,159 |  |  | $ | 684,998 |
| March 31, 2023
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
SBA PPP | — |  |  | — |  |  | — |  |  | 900 |  |  | 900 |
Owner-occupied CRE | 840 |  |  | 635 |  |  | 1,475 |  |  | 947,589 |  |  | 949,064 |
Non-owner occupied CRE | — |  |  | — |  |  | — |  |  | 1,601,789 |  |  | 1,601,789 |
Total commercial business | 2,824 |  |  | 5,490 |  |  | 8,314 |  |  | 3,228,437 |  |  | 3,236,751 |
Residential real estate | 2,115 |  |  | — |  |  | 2,115 |  |  | 361,662 |  |  | 363,777 |
Real estate construction and land development:
Residential | — |  |  | — |  |  | — |  |  | 72,926 |  |  | 72,926 |
Commercial and multifamily | 333 |  |  | — |  |  | 333 |  |  | 270,214 |  |  | 270,547 |
Total real estate construction and land development | 333 |  |  | — |  |  | 333 |  |  | 343,140 |  |  | 343,473 |
Consumer | 782 |  |  | 515 |  |  | 1,297 |  |  | 182,174 |  |  | 183,471 |
Total | $ | 6,054 |  |  | $ | 6,005 |  |  | $ | 12,059 |  |  | $ | 4,115,413 |  |  | $ | 4,127,472 |
| December 31, 2022
| 30-89 Days |  | 90 Days or Greater |  | Total Past Due |  | Current |  | Loans Receivable
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 586 |  |  | $ | 6,104 |  |  | $ | 6,690 |  |  | $ | 685,410 |  |  | $ | 692,100 |
SBA PPP | 236 |  |  | — |  |  | 236 |  |  | 1,232 |  |  | 1,468 |
Owner-occupied CRE | — |  |  | 189 |  |  | 189 |  |  | 936,851 |  |  | 937,040 |
Non-owner occupied CRE | — |  |  | — |  |  | — |  |  | 1,586,632 |  |  | 1,586,632 |
Total commercial business | 822 |  |  | 6,293 |  |  | 7,115 |  |  | 3,210,125 |  |  | 3,217,240 |
Residential real estate | 3,066 |  |  | — |  |  | 3,066 |  |  | 340,565 |  |  | 343,631 |
Real estate construction and land development:
Residential | — |  |  | — |  |  | — |  |  | 80,074 |  |  | 80,074 |
Commercial and multifamily | — |  |  | — |  |  | — |  |  | 214,038 |  |  | 214,038 |
Total real estate construction and land development | — |  |  | — |  |  | — |  |  | 294,112 |  |  | 294,112 |
Consumer | 1,561 |  |  | — |  |  | 1,561 |  |  | 194,314 |  |  | 195,875 |
Total | $ | 5,449 |  |  | $ | 6,293 |  |  | $ | 11,742 |  |  | $ | 4,039,116 |  |  | $ | 4,050,858 |
Loans 90 days or more past due and still accruing interest were $2.3 million and $1.6 million as of March 31, 2023 and December 31, 2022, 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 March 31, 2023 and December 31, 2022 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:
| March 31, 2023
| CRE |  | Farmland |  | Residential Real Estate |  | Equipment |  | Total
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 499 |  |  | $ | 1,977 |  |  | $ | 664 |  |  | $ | 468 |  |  | $ | 3,608 |
Owner-occupied CRE | 189 |  |  | — |  |  | — |  |  | — |  |  | 189 |
Total | $ | 688 |  |  | $ | 1,977 |  |  | $ | 664 |  |  | $ | 468 |  |  | $ | 3,797 |
| December 31, 2022
| CRE |  | Farmland |  | Residential Real Estate |  |  |  | Equipment |  | Total
| (In thousands)
Commercial business: |  |  |  |  |  |  |  |  |  |  |
Commercial and industrial | $ | 1,239 |  |  | $ | 1,977 |  |  | $ | 929 |  |  |  |  | $ | — |  |  | $ | 4,145 |
Owner-occupied CRE | 189 |  |  | — |  |  | — |  |  |  |  | — |  |  | 189 |
Total | $ | 1,428 |  |  | $ | 1,977 |  |  | $ | 929 |  |  |  |  | $ | — |  |  | $ | 4,334 |
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 three months ended March 31, 2023, except changes due to additions or removals of loans in this classification. (g) Modification of Loans In January 2023, the Company adopted ASU 2022-02, “Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures” (“ASU 2022-02”), which eliminated the accounting guidance TDRs while enhancing disclosure requirements for certain loan refinancing and restructurings by creditors when a borrower is experiencing financial difficulty. This guidance was applied on a prospective basis. Modifications of loans to borrowers experiencing financial difficulty may include interest rate reductions, principal or interest forgiveness, term extensions, and other actions intended to minimize economic loss and to avoid foreclosure or repossession of collateral. The following table presents modifications of loans by type of modification at amortized cost that were modified as a result of experiencing both financial difficulty and modified during the period indicated:
|  |  |  |  | Three Months Ended March 31, 2023
|  |  |  |  | Term Extension |  |  |  |  |  | Term Extension & Int. Rate Reduction |  | Total Modified Loans |  | % of Modified Loans to Loans Receivable, net
|  |  |  |  | (Dollars in thousands)
Commercial business:
Commercial and industrial |  |  |  |  | $ | 286 |  |  |  |  |  |  | $ | — |  |  | $ | 286 |  |  | 0.04 | %
Non-owner occupied CRE |  |  |  |  | 2,749 |  |  |  |  |  |  | — |  |  | 2,749 |  |  | 0.17 |
Total commercial business |  |  |  |  | 3,035 |  |  |  |  |  |  | — |  |  | 3,035 |  |  | 0.09 |
Consumer |  |  |  |  | — |  |  |  |  |  |  | 25 |  |  | 25 |  |  | 0.01 |
Total |  |  |  |  | $ | 3,035 |  |  |  |  |  |  | $ | 25 |  |  | $ | 3,060 |  |  | 0.07 | %
The following table presents the financial effect of the loan modifications presented in the preceding table during the the period indicated:
|  |  | Three Months Ended March 31, 2023 |  |
|  |  | Weighted Average % of Interest Rate Reductions |  | Weighted Average Years of Term Extensions |  |
Commercial business: |  |  |  |  |  |  |
Commercial and industrial |  |  | — | % |  | 0.44 |  |
Non-owner occupied CRE |  |  | — |  |  | 1.00 |  |
Total commercial business |  |  | — |  |  | 0.95 |  |
Consumer |  |  | 1.00 |  |  | 2.12 |  |
Total |  |  | 1.00 | % |  | 0.96 |  |
There were no modified loans past due or on nonaccrual as of March 31, 2023. There were no modified loans made during the three months ended March 31, 2023, that subsequently defaulted. (h) Accrued interest receivable on loans receivable Accrued interest receivable on loans receivable totaled $11.7 million and $11.3 million at March 31, 2023 and December 31, 2022, respectively, and 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 March 31, 2023, there were no consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process.
Concentration Risk Disclosure | Concentrations of CreditMost of the Bank’s lending activity occurs within its primary market areas which are concentrated along the I-5 corridor from Whatcom County, Washington to Lane County, Oregon, as well as Yakima County in Washington and Ada County in Idaho. Additionally, the Bank's loan portfolio is concentrated in commercial business loans, which include commercial and industrial, SBA PPP, owner-occupied and nonowner-occupied CRE, and commercial and multifamily real estate construction and land development loans. Commercial business loans, excluding SBA PPP loans, are generally considered as having a 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.

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