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Loans Receivable
 3 Months Ended
Mar. 31, 2025
Receivables [Abstract]  
Loans Receivable Loans Receivable
The Company originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. In addition to originating loans, the Company may also purchase loans through pool purchases, participation purchases and syndicated loan purchases. Accrued interest receivable was excluded from disclosures presenting the Company's amortized cost of loans receivable, as it was deemed insignificant.
(a) Loan Origination/Risk Management
The Company 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 2024 Annual Form 10-K.
The Company 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 Company 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,
2025		December 31,
2024
(Dollars in thousands)
Commercial business:
Commercial and industrial$850,764 $842,672 
Owner-occupied CRE985,272 1,003,243 
Non-owner occupied CRE1,915,788 1,909,107 
Total commercial business3,751,824 3,755,022 
Residential real estate393,301 402,954 
Real estate construction and land development:
Residential
76,108 83,890 
Commercial and multifamily
377,100 395,553 
Total real estate construction and land development453,208 479,443 
Consumer166,515 164,704 
Loans receivable4,764,848 4,802,123 
ACL on loans(52,160)(52,468)
Loans receivable, net$4,712,688 $4,749,655 
Balances included in the amortized cost of loans receivable:
Unamortized net discount on acquired loans$(942)$(1,095)
Unamortized net deferred fee$(10,182)$(10,110)
(b) Concentrations of Credit
Most of the Company’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 and Spokane County, Washington and Ada County, Idaho. Additionally, the Company's loan portfolio is concentrated in commercial business loans, which include commercial and industrial, owner-occupied and nonowner-occupied CRE loans, and commercial and multifamily real estate construction and land development loans. Commercial business loans and commercial and multifamily real estate construction and land development loans are generally considered as having a more inherent risk of default than residential real estate loans or other consumer loans. Also, the loan balance per borrower is typically larger for commercial loans 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 ongoing monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans, (v) past due status, and (vi) the general economic conditions of the United States of America, and specifically the states of Washington, Oregon and Idaho.
The Company 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 2024 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 Company 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 Company 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 Company is almost certain of the losses and the outstanding principal balances are generally charged off to the realizable value. There were no loans graded Doubtful or Loss as of March 31, 2025 and December 31, 2024.
The following tables present the amortized cost of loans receivable by risk grade and origination year at the dates indicated:
March 31, 2025
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
Revolving Loans Converted(1)
Loans Receivable
20252024202320222021Prior
(Dollars in thousands)
Commercial business:
Commercial and industrial
Pass$22,000 $202,823 $121,455 $120,180 $47,970 $122,419 $162,202 $4,103 $803,152 
SM— 186 4,376 6,224 328 4,378 9,590 4,660 29,742 
SS— — — 561 40 6,218 11,051 — 17,870 
Total22,000 203,009 125,831 126,965 48,338 133,015 182,843 8,763 850,764 
Owner-occupied CRE
Pass16,722 112,505 97,896 134,661 147,111 443,221 — — 952,116 
SM— — 2,716 1,211 2,358 12,694 — — 18,979 
SS— — — — 1,171 13,006 — — 14,177 
Total16,722 112,505 100,612 135,872 150,640 468,921 — — 985,272 
Non-owner occupied CRE
Pass33,895 171,603 173,262 350,994 237,739 889,127 — — 1,856,620 
SM— — — — 7,940 44,557 — — 52,497 
SS— — — 581 — 6,090 — — 6,671 
Total33,895 171,603 173,262 351,575 245,679 939,774 — — 1,915,788 
Total commercial business
Pass72,617 486,931 392,613 605,835 432,820 1,454,767 162,202 4,103 3,611,888 
SM— 186 7,092 7,435 10,626 61,629 9,590 4,660 101,218 
SS— — — 1,142 1,211 25,314 11,051 — 38,718 
Total72,617 487,117 399,705 614,412 444,657 1,541,710 182,843 8,763 3,751,824 
Residential real estate
Pass— 28,977 51,193 133,808 130,561 47,000 — — 391,539 
SS— — — 832 781 149 — — 1,762 
Total— 28,977 51,193 134,640 131,342 47,149 — — 393,301 
Real estate construction and land development:
Residential
Pass4,131 37,717 21,766 3,809 — 1,935 — — 69,358 
SS— — 1,000 — 5,750 — — — 6,750 
Total4,131 37,717 22,766 3,809 5,750 1,935 — — 76,108 
Commercial and multifamily
Pass3,630 49,300 167,629 115,567 10,022 2,841 — — 348,989 
SM— — — 893 — 11,593 — — 12,486 
SS— — — — 15,625 — — — 15,625 
Total3,630 49,300 167,629 116,460 25,647 14,434 — — 377,100 
March 31, 2025
Term Loans Amortized Cost Basis by Origination YearRevolving Loans
Revolving Loans Converted(1)
Loans Receivable
20252024202320222021Prior
(Dollars in thousands)
Total real estate construction and land development
Pass7,761 87,017 189,395 119,376 10,022 4,776 — — 418,347 
SM— — — 893 — 11,593 — — 12,486 
SS— — 1,000 — 21,375 — — — 22,375 
Total7,761 87,017 190,395 120,269 31,397 16,369 — — 453,208 
Consumer
Pass280 1,754 1,571 1,455 300 20,915 138,342 366 164,983 
SS— — 383 25 — 880 226 18 1,532 
Total280 1,754 1,954 1,480 300 21,795 138,568 384 166,515 
Loans receivable
Pass80,658 604,679 634,772 860,474 573,703 1,527,458 300,544 4,469 4,586,757 
SM— 186 7,092 8,328 10,626 73,222 9,590 4,660 113,704 
SS— — 1,383 1,999 23,367 26,343 11,277 18 64,387 
Total$80,658 $604,865 $643,247 $870,801 $607,696 $1,627,023 $321,411 $9,147 $4,764,848 
(1) Represents the loans receivable balance at March 31, 2025 which was converted from a revolving loan to a non-revolving amortizing loan during the three months ended March 31, 2025.
December 31, 2024
Term Loans Amortized Cost Basis by Origination Year
Revolving Loans
Revolving Loans Converted(1)
Loans Receivable
20242023202220212020Prior
(Dollars in thousands)
Commercial business:
Commercial and industrial
Pass$204,107 $127,603 $125,220 $51,126 $53,115 $78,039 $147,861 $491 $787,562 
SM161 4,482 6,495 502 1,117 4,490 13,555 2,352 33,154 
SS— 235 857 315 2,516 4,337 12,331 1,365 21,956 
Total204,268 132,320 132,572 51,943 56,748 86,866 173,747 4,208 842,672 
Owner-occupied CRE
Pass116,031 93,567 136,496 147,540 81,161 389,801 534 — 965,130 
SM— 2,719 1,215 4,121 871 15,298 — — 24,224 
SS— — — 1,182 637 12,070 — — 13,889 
Total116,031 96,286 137,711 152,843 82,669 417,169 534 — 1,003,243 
Non-owner-occupied CRE
Pass168,040 174,993 338,983 238,933 149,804 790,691 — 24 1,861,468 
SM— — — 7,988 — 32,925 — — 40,913 
SS— — 584 — — 6,142 — — 6,726 
Total168,040 174,993 339,567 246,921 149,804 829,758 — 24 1,909,107 
Total commercial business
Pass488,178 396,163 600,699 437,599 284,080 1,258,531 148,395 515 3,614,160 
SM161 7,201 7,710 12,611 1,988 52,713 13,555 2,352 98,291 
SS— 235 1,441 1,497 3,153 22,549 12,331 1,365 42,571 
Total488,339 403,599 609,850 451,707 289,221 1,333,793 174,281 4,232 3,755,022 
Residential real estate
Pass32,857 52,317 135,115 132,150 21,909 26,838 — — 401,186 
SS— — 832 786 — 150 — — 1,768 
Total32,857 52,317 135,947 132,936 21,909 26,988 — — 402,954 
December 31, 2024
Term Loans Amortized Cost Basis by Origination Year
Revolving Loans
Revolving Loans Converted(1)
Loans Receivable
20242023202220212020Prior
(Dollars in thousands)
Real estate construction and land development:
Residential
Pass34,078 34,436 6,415 — 1,000 955 256 — 77,140 
SS— 1,000 — 5,750 — — — — 6,750 
Total34,078 35,436 6,415 5,750 1,000 955 256 — 83,890 
Commercial and multifamily
Pass37,022 169,816 147,789 9,865 — 3,002 — — 367,494 
SM— — 893 — 5,655 5,886 — — 12,434 
SS— — — 15,625 — — — — 15,625 
Total37,022 169,816 148,682 25,490 5,655 8,888 — — 395,553 
Total real estate construction and land development
Pass71,100 204,252 154,204 9,865 1,000 3,957 256 — 444,634 
SM— — 893 — 5,655 5,886 — — 12,434 
SS— 1,000 — 21,375 — — — — 22,375 
Total71,100 205,252 155,097 31,240 6,655 9,843 256 — 479,443 
Consumer
Pass1,882 1,513 1,477 339 3,196 20,518 133,355 820 163,100 
SS— — 25 — 115 609 60 795 1,604 
Total1,882 1,513 1,502 339 3,311 21,127 133,415 1,615 164,704 
Loans receivable
Pass594,017 654,245 891,495 579,953 310,185 1,309,844 282,006 1,335 4,623,080 
SM161 7,201 8,603 12,611 7,643 58,599 13,555 2,352 110,725 
SS— 1,235 2,298 23,658 3,268 23,308 12,391 2,160 68,318 
Total$594,178 $662,681 $902,396 $616,222 $321,096 $1,391,751 $307,952 $5,847 $4,802,123 
(1) Represents the loans receivable balance at December 31, 2024 which was converted from a revolving loan to non-revolving amortizing loan during the year ended December 31, 2024.

The following tables present gross charge-offs by loan class and origination year, for the periods indicated:
Three Months Ended March 31, 2025
Current Period Gross Charge-offs by Origination YearRevolving LoansTotal Gross Charge-Offs
20252024202320222021Prior
(Dollars in thousands)
Commercial business$— $— $222 $— $— $— $— $222 
Consumer— — 10 2 — 44 98 154 
Total
$— $— $232 $2 $— $44 $98 $376 
Three Months Ended March 31, 2024
Current Period Gross Charge-offs by Origination YearRevolving LoansTotal Gross Charge-Offs
20242023202220212020Prior
(Dollars in thousands)
Commercial business$— $— $— $— $— $77 $— $77 
Consumer— 1 — — — 42 80 123 
Total
$— $1 $— $— $— $119 $80 $200 
(d) Nonaccrual Loans
The following tables present the amortized cost of nonaccrual loans at the dates indicated:
March 31, 2025
Nonaccrual without ACLNonaccrual with ACLTotal Nonaccrual
(Dollars in thousands)
Commercial business:
Commercial and industrial$1,328 $— $1,328 
Owner-occupied CRE2,127 — 2,127 
Total commercial business3,455 — 3,455 
Residential real estate832 — 832 
Consumer151 — 151 
Total$4,438 $— $4,438 
December 31, 2024
Nonaccrual without ACLNonaccrual with ACLTotal Nonaccrual
(Dollars in thousands)
Commercial business:
Commercial and industrial$1,002 $667 $1,669 
Owner-occupied CRE2,250 — 2,250 
Total commercial business3,252 667 3,919 
Consumer160 — 160 
Total$3,412 $667 $4,079 
The following tables present the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full or sale of previously classified nonaccrual loans during the periods indicated:
Three Months Ended March 31,
20252024
Interest Income ReversedInterest Income RecognizedInterest Income ReversedInterest Income Recognized
(Dollars in thousands)
Commercial business:
Commercial and industrial$— $13 $(13)$3 
Residential real estate
(28)— — — 
Total$(28)$13 $(13)$3 
For the three months ended March 31, 2025 and 2024, 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 Company performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The following tables present the amortized cost of past due loans at the dates indicated:
March 31, 2025
30-89 Days90 Days or
Greater		Total Past 
Due		CurrentLoans Receivable
(Dollars in thousands)
Commercial business:
Commercial and industrial$8,339 $986 $9,325 $841,439 $850,764 
Owner-occupied CRE— — — 985,272 985,272 
March 31, 2025
30-89 Days90 Days or
Greater		Total Past 
Due		CurrentLoans Receivable
(Dollars in thousands)
Non-owner occupied CRE2,257 — 2,257 1,913,531 1,915,788 
Total commercial business10,596 986 11,582 3,740,242 3,751,824 
Residential real estate
1,215 832 2,047 391,254 393,301 
Real estate construction and land development:
Residential
6,750 — 6,750 69,358 76,108 
Commercial and multifamily
5,746 — 5,746 371,354 377,100 
Total real estate construction and land development12,496 — 12,496 440,712 453,208 
Consumer458 — 458 166,057 166,515 
Total$24,765 $1,818 $26,583 $4,738,265 $4,764,848 
December 31, 2024
30-89 Days90 Days or
Greater		Total Past 
Due		CurrentLoans Receivable
(Dollars in thousands)
Commercial business:
Commercial and industrial$659 $2,471 $3,130 $839,542 $842,672 
Owner-occupied CRE1,426 — 1,426 1,001,817 1,003,243 
Non-owner occupied CRE— — — 1,909,107 1,909,107 
Total commercial business2,085 2,471 4,556 3,750,466 3,755,022 
Residential real estate
832 — 832 402,122 402,954 
Real estate construction and land development:
Residential
— — — 83,890 83,890 
Commercial and multifamily
— — — 395,553 395,553 
Total real estate construction and land development— — — 479,443 479,443 
Consumer339 160 499 164,205 164,704 
Total$3,256 $2,631 $5,887 $4,796,236 $4,802,123 
As of March 31, 2025 there were no loans 90 days or more past due and still accruing interest. There was $1.2 million of loans 90 days or more past due and still accruing interest as of December 31, 2024, all of which were commercial and industrial loans.
(f) Collateral-dependent Loans
The following tables present the type of collateral securing loans individually evaluated for credit losses and for which the repayment was expected to be provided substantially through the operation or sale of the collateral at the dates indicated, with balances representing the amortized cost of the loan classified by the primary collateral category of each loan if multiple collateral sources secure the loan:
March 31, 2025
CREFarmlandResidential Real EstateTotal
(Dollars in thousands)
Commercial business:
Commercial and industrial$— $373 $613 $986 
Owner-occupied CRE2,127 — — 2,127 
Total commercial business2,127 373 613 3,113 
Residential real estate
— — 832 832 
Consumer— — 151 151 
Total$2,127 $373 $1,596 $4,096 
December 31, 2024
CREFarmlandResidential Real EstateTotal
(Dollars in thousands)
Commercial business:
Commercial and industrial$— $389 $613 $1,002 
Owner-occupied CRE2,250 — — 2,250 
Total commercial business2,250 389 613 3,252 
Consumer— — 160 160 
Total$2,250 $389 $773 $3,412 
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, 2025, except changes due to additions or removals of loans in this classification.
(g) Modification of Loans
Occasionally, the Company modifies loans to borrowers in financial distress by providing modifications of loans which 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. In some cases, the Company provides multiple types of modifications on one loan. When principal forgiveness is provided, the amount of forgiveness is charged-off against the ACL.
The following tables present the amortized cost of loans that were experiencing both financial difficulty and modified during the periods indicated:
Three Months Ended March 31, 2025
Term ExtensionTotal Modified Loans% of Modified Loans to Loans Receivable
(Dollars in thousands)
Commercial business:
Commercial and industrial$13,532 $13,532 1.59 %
Owner-occupied CRE224 224 0.02 
Non-owner occupied CRE692 692 0.04 
Total commercial business14,448 14,448 0.39 
Real estate construction and land development:
Commercial and multifamily
893 893 0.24 
Total real estate construction and land development893 893 0.20 
Consumer7 7 — 
Total$15,348 $15,348 0.32 %
Three Months Ended March 31, 2024
Term ExtensionTotal Modified Loans% of Modified Loans to Loans Receivable
(Dollars in thousands)
Commercial business:
Commercial and industrial$11,501 $11,501 1.51 %
Non-owner occupied CRE2,686 2,686 0.16 
Total commercial business14,187 14,187 0.42 
Real estate construction and land development:
Commercial and multifamily
4,148 4,148 1.11 
Total real estate construction and land development4,148 4,148 0.91 
Consumer20 20 0.01 
Total$18,355 $18,355 0.41 %
The following tables present the financial effects of the loan modifications presented in the preceding tables during the periods indicated:
Three Months Ended
 March 31, 2025
Weighted Average Years of Term Extensions
Commercial business:
Commercial and industrial0.73
Owner-occupied CRE0.42
Non-owner occupied CRE0.42
Total commercial business0.71
Commercial and multifamily
1.58
Consumer2.92
Total0.76
Three Months Ended
 March 31, 2024
Weighted Average Years of Term Extensions
Commercial business:
Commercial and industrial0.29
Non-owner occupied CRE0.50
Total commercial business0.33
Commercial and multifamily
0.25
Consumer1.20
Total0.32
At March 31, 2025, there were $0.9 million in commitments to lend additional funds to borrowers experiencing financial difficulty whose terms had been modified during the three months ended March 31, 2025. At December 31, 2024, there were $4.3 million in commitments to lend additional funds to borrowers experiencing financial difficulty whose terms had been modified during the year ended December 31, 2024.
The Company closely monitors the performance of loans that are modified for borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company considers a modified loan as a payment default if the borrower is 90 or more days past due. There were no loans 90 days past due or in default that have been modified in the past 12 months at March 31, 2025 and December 31, 2024.
(h) Accrued interest receivable on loans receivable
Accrued interest receivable on loans receivable totaled $14.8 million and $14.5 million at March 31, 2025 and December 31, 2024, 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, 2025, there was one residential real estate loan valued at $832,000, for which formal foreclosure proceedings were in process. At December 31, 2024, there was one residential real estate loan, valued at $160,000, for which formal foreclosure proceedings were in process.