XML 23 R12.htm IDEA: XBRL DOCUMENT

Note 4 - Loans Receivable and Allowance for Credit Losses - Loans - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2024

Dec. 31, 2023

Assets [Abstract]

Interest Receivable

$ 14,455

$ 14,005

Notes to Financial Statements

Financing Receivables [Text Block]

NOTE 4 – LOANS RECEIVABLE AND ALLOWANCE FOR CREDIT LOSSES – LOANS

The composition of the loan portfolio was as follows at the dates indicated:

		March 31,				December 31,
REAL ESTATE LOANS		2024				2023
Commercial ("CRE")		$	359,055			$	366,328
Construction and development			301,346				303,054
Home equity			73,323				69,488
One-to-four-family (excludes loans held for sale)			580,050				567,742
Multi-family			222,410				223,769
Total real estate loans			1,536,184				1,530,381
CONSUMER LOANS
Indirect home improvement			568,802				569,903
Marine			73,921				73,310
Other consumer			3,409				3,540
Total consumer loans			646,132				646,753
COMMERCIAL BUSINESS LOANS
Commercial and industrial			256,429				238,301
Warehouse lending			8,113				17,580
Total commercial business loans			264,542				255,881
Total loans receivable, gross			2,446,858				2,433,015
ACL on loans			(31,479	)			(31,534	)
Total loans receivable, net		$	2,415,379			$	2,401,481

Loan amounts are net of unearned loan fees in excess of unamortized costs and premiums of $7.5 million as of March 31, 2024 and $8.4 million as of December 31, 2023. Net loans include unamortized net discounts on acquired loans of $2.4 million and $2.6 million as of March 31, 2024 and December 31, 2023, respectively. Net loans do not include accrued interest receivable. Accrued interest receivable on loans was $11.6 million and $11.5 million as of March 31, 2024 and December 31, 2023, respectively, and was reported in “Accrued interest receivable” on the Consolidated Balance Sheets.

Most of the Company’s CRE and multi-family real estate, construction, residential, and/or commercial business lending activities are with customers located in Western Washington, the Oregon Coast, and near our loan production offices in Vancouver and the Tri-Cities, Washington. The Company originates real estate, consumer, and commercial business loans and has concentrations in these areas, however, indirect home improvement loans, including solar-related home improvement loans, are originated through a network of home improvement contractors and dealers located throughout Washington, Oregon, California, Idaho, Colorado, Arizona, Minnesota, Nevada, Texas, Utah, Massachusetts, Montana, and New Hampshire. Loans are generally secured by collateral and rights to collateral vary and are legally documented to the extent practicable. Local economic conditions may affect borrowers’ ability to meet the stated repayment terms.

At March 31, 2024, the Bank held approximately $1.09 billion in loans that are pledged as collateral for FHLB advances, compared to approximately $1.07 billion at December 31, 2023. The Bank held approximately $632.8 million in loans that are pledged as collateral for the Federal Reserve Bank of San Francisco (the “FRB”) line of credit at March 31, 2024, compared to approximately $631.1 million at December 31, 2023.

The Company has defined its loan portfolio into three segments that reflect the structure of the lending function, the Company’s strategic plan and the way management monitors performance and credit quality. The three loan portfolio segments are: (a) real estate, (b) consumer, and (c) commercial business. Each of these segments is disaggregated into classes based on the risk characteristics of the borrower and/or the collateral type securing the loan. The following is a summary of each of the Company’s loan portfolio segments and classes:

Real Estate Loans

Commercial Real Estate (“CRE”) Lending. Loans originated by the Company primarily secured by income-producing properties, including retail centers, warehouses, and office buildings located in our market areas.

Construction and Development Lending. Loans originated by the Company for the construction of, and secured by, commercial real estate, one-to-four-family, and multi-family residences and tracts of land for development that are not pre-sold. A portion of the one-to-four-family construction portfolio is custom construction loans to the intended occupant of the residence.

Home Equity Lending. Loans originated by the Company secured by second mortgages on one-to-four-family residences, including home equity lines of credit in our market areas.

One-to-Four-Family Real Estate Lending. One-to-four-family residential loans include owner occupied properties (including second homes), and non-owner-occupied properties with four or less units. These loans originated by the Company or periodically purchased from banks are secured by first mortgages on one-to-four-family residences in our market areas that the Company intends to hold (excludes loans held for sale).

Multi-Family Lending. Apartment term lending (five or more units) to current banking customers and community reinvestment loans for low to moderate income individuals in the Company’s footprint.

Consumer Loans

Indirect Home Improvement. Fixture secured loans for home improvement are originated by the Company through its network of home improvement contractors and dealers and are secured by the personal property installed in, on, or at the borrower’s real property, and may be perfected with a UCC‑2 financing statement filed in the county of the borrower’s residence. These indirect home improvement loans include replacement windows, siding, roofing, spas, and other home fixture installations, including solar related home improvement projects.

Marine. Loans originated by the Company, secured by boats, to borrowers primarily located in states where the Company originates consumer loans.

Other Consumer. Loans originated by the Company to consumers in our retail branch footprint, including automobiles, recreational vehicles, direct home improvement loans, loans on deposits, and other consumer loans, primarily consisting of personal lines of credit and credit cards.

Commercial Business Loans

Commercial and Industrial (“C&I”) Lending. C&I loans originated by the Company to local small- and mid-sized businesses in our Puget Sound market area are secured primarily by accounts receivable, inventory, or personal property, plant and equipment. Some C&I loans purchased by the Company are outside of the greater Puget Sound market area. C&I loans are made based on the borrower’s ability to make repayment from the cash flow of the borrower’s business.

Warehouse Lending. Loans originated to non-depository financial institutions and secured by notes originated by the non-depository financial institution. The Company has two distinct warehouse lending divisions: commercial warehouse re-lending secured by notes on construction loans and mortgage warehouse re-lending secured by notes on one-to-four-family loans. The Company’s commercial construction warehouse lines are secured by notes on construction loans and typically guaranteed by principals with experience in construction lending. Mortgage warehouse lending loans are funded through third-party residential mortgage bankers. Under this program the Company provides short-term funding to the mortgage banking companies for the purpose of originating residential mortgage loans for sale into the secondary market.

Allowance for Credit Losses

The main drivers of the provision for credit losses on loans recorded in the first three months of 2024 were net charge-offs recorded during the period.

The following tables detail activity in the ACL on loans by loan categories at or for the three months ended March 31, 2024 and 2023:

		At or For the Three Months Ended March 31, 2024
		Real								Commercial
ACL ON LOANS		Estate				Consumer				Business				Unallocated				Total
Beginning balance		$	14,107			$	13,357			$	4,070			$	—			$	31,534
Provision for credit losses on loans			146				644				631				—				1,421
Charge-offs			—				(1,486	)			(408	)			—				(1,894	)
Recoveries			—				418				—				—				418
Net charge-offs			—				(1,068	)			(408	)			—				(1,476	)
Total ending ACL balance		$	14,253			$	12,933			$	4,293			$	—			$	31,479

		At or For the Three Months Ended March 31, 2023
		Real								Commercial
ACL ON LOANS		Estate				Consumer				Business				Unallocated				Total
Beginning balance		$	12,123			$	12,109			$	3,760			$	—			$	27,992
Provision for credit losses on loans			459				1,691				205				—				2,355
Charge-offs			(10	)			(709	)			(1	)			—				(720	)
Recoveries			—				310				—				—				310
Net charge-offs			(10	)			(399	)			(1	)			—				(410	)
Total ending ACL balance		$	12,572			$	13,401			$	3,964			$	—			$	29,937

Nonaccrual and Past Due Loans. Loans are considered past due if the required principal and interest payments have not been received as of the date such payments were due. Loans are automatically placed on nonaccrual once the loan is 90 days past due or sooner if, in management’s opinion, the borrower may be unable to meet payment obligations as they become due, or as required by regulatory authorities.

Loan Modifications to Borrowers Experiencing Financial Difficulty

The Company may modify the contractual terms of a loan to a borrower experiencing financial difficulty as a part of ongoing loss mitigation strategies. These modifications may result in an interest rate reduction, term extension, an other-than-insignificant payment delay, or a combination thereof. The Company typically does not offer principal forgiveness. An assessment of whether a borrower is experiencing financial difficulty is made on the date of a modification. The effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses on loans because of the measurement methodologies used to estimate the allowance.

The following tables present the amortized cost basis of loans that were modified to borrowers experiencing financial difficulty at the end of the reporting period by loan class and modification type.

	Payment Deferral
	Amortized Cost		% of Total Loan
For the three months ended March 31, 2024	Basis		Type		Financial Effect
CRE	$	1,102	0.3%		Deferred payments and capitalized interest for adding a weighted-average period of 1.7 years to the life of the loans.

	Combination - Term Extension and Interest Rate Reduction
	Amortized Cost		% of Total Loan
For the three months ended March 31, 2023	Basis		Type		Financial Effect
C&I	$	3,709	1.7	%	Reduced weighted-average contractual interest rate from 7.5% to 4.1%, and added a weighted-average period of 5.0 years to the life of the loans.

At March 31, 2024, and March 31, 2023, the loans were in compliance with their modified terms, but were classified as current and nonaccrual and individually evaluated in the determination of the associated ACL for loans. For the three months ended March 31, 2024, and March 31, 2023, no loans experienced a default subsequent to being granted a modification in the last twelve months. There were no unfunded commitments associated with loans modified for borrowers experiencing financial distress as of March 31, 2024.

Nonaccrual and Past Due Loans

The following tables provide information pertaining to the aging analysis of contractually past due loans and nonaccrual loans at March 31, 2024 and December 31, 2023:

		March 31, 2024
		30-59				60-89
		Days				Days				90 Days				Total								Total
		Past				Past				or More				Past								Loans				Non-
REAL ESTATE LOANS		Due				Due				Past Due				Due				Current				Receivable				Accrual ⁽¹⁾
CRE		$	—			$	—			$	—			$	—			$	359,055			$	359,055			$	1,102
Construction and development			4,737				—				—				4,737				296,609				301,346				4,737
Home equity			16				26				137				179				73,144				73,323				170
One-to-four-family			—				—				80				80				579,970				580,050				173
Multi-family			—				—				—				—				222,410				222,410				—
Total real estate loans			4,753				26				217				4,996				1,531,188				1,536,184				6,182
CONSUMER LOANS
Indirect home improvement			1,657				717				651				3,025				565,777				568,802				2,195
Marine			295				86				85				466				73,455				73,921				385
Other consumer			22				2				1				25				3,384				3,409				3
Total consumer loans			1,974				805				737				3,516				642,616				646,132				2,583
COMMERCIAL BUSINESS LOANS
C&I			167				—				2,257				2,424				254,005				256,429				3,341
Warehouse lending			—				—				—				—				8,113				8,113				—
Total commercial business loans			167				—				2,257				2,424				262,118				264,542				3,341
Total loans		$	6,894			$	831			$	3,211			$	10,936			$	2,435,922			$	2,446,858			$	12,106

		December 31, 2023
		30-59				60-89
		Days				Days				90 Days				Total								Total
		Past				Past				or More				Past								Loans				Non-
REAL ESTATE LOANS		Due				Due				Past Due				Due				Current				Receivable				Accrual ⁽¹⁾
CRE		$	—			$	—			$	—			$	—			$	366,328			$	366,328			$	1,088
Construction and development			—				—				—				—				303,054				303,054				4,699
Home equity			79				25				136				240				69,248				69,488				173
One-to-four-family			—				96				—				96				567,646				567,742				96
Multi-family			—				—				—				—				223,769				223,769				—
Total real estate loans			79				121				136				336				1,530,045				1,530,381				6,056
CONSUMER LOANS
Indirect home improvement			1,759				1,248				777				3,784				566,119				569,903				1,863
Marine			373				243				137				753				72,557				73,310				342
Other consumer			57				18				6				81				3,459				3,540				8
Total consumer loans			2,189				1,509				920				4,618				642,135				646,753				2,213
COMMERCIAL BUSINESS LOANS
C&I			—				—				2,514				2,514				235,787				238,301				2,683
Warehouse lending			—				—				—				—				17,580				17,580				—
Total commercial business loans			—				—				2,514				2,514				253,367				255,881				2,683
Total loans		$	2,268			$	1,630			$	3,570			$	7,468			$	2,425,547			$	2,433,015			$	10,952

(1)

Includes loans less than 90 days past due as applicable.

There were no loans 90 days or more past due and still accruing interest at both March 31, 2024 and December 31, 2023.

Credit Quality Indicators

As part of the Company’s on-going monitoring of credit quality of the loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grading of loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) non-performing loans, and (v) the general economic conditions in the Company’s markets.

The Company utilizes a risk grading matrix to assign a risk grade to its real estate and commercial business loans. Loans are graded on a scale of 1 to 10, with loans in risk grades 1 to 6 reported as “Pass” and loans in risk grades 7 to 10 reported as classified loans in the Company’s ACL analysis.

A description of the 10 risk grades is as follows:

●

Grades 1 and 2 - These grades include loans to very high-quality borrowers with excellent or desirable business credit.

●

Grade 3 - This grade includes loans to borrowers of good business credit with moderate risk.

●

Grades 4 and 5 - These grades include “Pass” grade loans to borrowers of average credit quality and risk.

●

Grade 6 - This grade includes loans on management’s “Watch” list and is intended to be utilized on a temporary basis for “Pass” grade borrowers where frequent and thorough monitoring is required due to credit weaknesses and where significant risk-modifying action is anticipated in the near term.

●

Grade 7 - This grade is for “Other Assets Especially Mentioned (“OAEM”)” or “Special Mention” in accordance with regulatory guidelines and includes borrowers where performance is poor or significantly less than expected.

●

Grade 8 - This grade includes “Substandard” loans in accordance with regulatory guidelines which represent an unacceptable business credit where a loss is possible if loan weakness is not corrected.

●

Grade 9 - This grade includes “Doubtful” loans in accordance with regulatory guidelines where a loss is highly probable.

●

Grade 10 - This grade includes “Loss” loans in accordance with regulatory guidelines for which total loss is expected and when identified are charged off.

Homogeneous loans are risk rated based upon the Federal Financial Institutions Examination Council’s Uniform Retail Credit Classification and Account Management Policy. Loans classified under this policy at the Company are consumer loans which include indirect home improvement, solar, marine, other consumer, and one-to-four-family first and second liens. Under the Uniform Retail Credit Classification and Account Management Policy, loans that are current or less than 90 days past due are graded “Pass” and risk rated “4” or “5” internally. Loans that are past due more than 90 days are classified “Substandard” and risk graded “8” internally until the loan has demonstrated consistent performance, typically six months of contractual payments. Closed-end loans that are 120 days past due and open-end loans that are 180 days past due are charged off based on the value of the collateral less cost to sell. Management may choose to conservatively risk rate credits even if paying in accordance with the loan’s repayment terms.

CRE, construction and development, multi-family and commercial business loans are evaluated individually for their risk classification and may be classified as “Substandard” even if current on their loan payment obligations. We regularly review our credits for accuracy of risk grades whenever we receive new information. Borrowers are generally required to submit financial information at regular intervals. Typically, commercial borrowers with lines of credit are required to submit financial information with reporting intervals ranging from monthly to annually depending on credit size, risk, and complexity. In addition, nonowner-occupied CRE borrowers with loans exceeding a certain dollar threshold are usually required to submit rent rolls or property income statements annually. We monitor construction loans monthly. We also review loans graded “Watch” or worse, regardless of loan type, no less than quarterly.

The following tables summarize risk rated loan balances and total current period gross charge-offs by category, as of the dates indicated. Term loans that were renewed or extended for periods longer than 90 days are presented as new originations in the year of the most recent renewal or extension.

		March 31, 2024
																														Revolving Loans
REAL ESTATE LOANS		Term Loans by Year of Origination																												Converted
CRE		2024				2023				2022				2021				2020				Prior				Revolving Loans				to Term				Total Loans
Pass		$	3,034			$	46,629			$	85,321			$	60,749			$	45,012			$	84,134			$	—			$	73			$	324,952
Watch			—				3,185				10,843				12,835				—				2,665				244				—				29,772
Special mention			—				—				—				—				—				404				—				—				404
Substandard			—				—				—				—				1,641				2,286				—				—				3,927
Total CRE			3,034				49,814				96,164				73,584				46,653				89,489				244				73				359,055
Construction and development
Pass			21,765				133,438				74,758				40,355				15,220				526				10,547				—				296,609
Substandard			—				—				4,737				—				—				—				—				—				4,737
Total construction and development			21,765				133,438				79,495				40,355				15,220				526				10,547				—				301,346
Home equity
Pass			4,095				4,364				381				1,573				6,397				1,971				54,372				—				73,153
Substandard			—				—				—				—				—				33				137				—				170
Total home equity			4,095				4,364				381				1,573				6,397				2,004				54,509				—				73,323
One-to-four-family
Pass			18,276				102,210				172,463				124,529				80,342				79,296				—				—				577,116
Substandard			—				—				862				—				—				2,072				—				—				2,934
Total one-to-four-family			18,276				102,210				173,325				124,529				80,342				81,368				—				—				580,050
Multi-family
Pass			93				7,087				20,328				90,820				42,296				61,786				—				—				222,410
Total multi-family			93				7,087				20,328				90,820				42,296				61,786				—				—				222,410
Total real estate loans		$	47,263			$	296,913			$	369,693			$	330,861			$	190,908			$	235,173			$	65,300			$	73			$	1,536,184

		March 31, 2024
																														Revolving Loans
CONSUMER LOANS		Term Loans by Year of Origination																												Converted
Indirect home improvement		2024				2023				2022				2021				2020				Prior				Revolving Loans				to Term				Total Loans
Pass		$	31,369			$	160,726			$	201,319			$	88,557			$	33,947			$	50,684			$	5			$	—			$	566,607
Substandard			—				385				799				469				205				337				—				—				2,195
Total indirect home improvement			31,369				161,111				202,118				89,026				34,152				51,021				5				—				568,802
Indirect home improvement gross charge-offs			—				211				499				183				45				225				—				—				1,163
Marine
Pass			3,780				13,093				22,512				9,685				12,679				11,787				—				—				73,536
Substandard			—				—				55				—				126				204				—				—				385
Total marine			3,780				13,093				22,567				9,685				12,805				11,991				—				—				73,921
Marine gross charge-offs			—				—				75				51				—				105				—				—				231
Other consumer
Pass			50				237				491				143				59				143				2,283				—				3,406
Substandard			—				—				—				—				—				—				3				—				3
Total other consumer			50				237				491				143				59				143				2,286				—				3,409
Other consumer gross charge-offs			—				33				6				—				—				16				37				—				92
Total consumer loans		$	35,199			$	174,441			$	225,176			$	98,854			$	47,016			$	63,155			$	2,291			$	—			$	646,132

		March 31, 2024
COMMERCIAL																														Revolving Loans
BUSINESS LOANS		Term Loans by Year of Origination																												Converted
C&I		2024				2023				2022				2021				2020				Prior				Revolving Loans				to Term				Total Loans
Pass		$	9,500			$	21,168			$	32,498			$	18,602			$	10,837			$	13,158			$	120,156			$	25			$	225,944
Watch			—				4,458				—				758				2,224				931				9,305				—				17,676
Special mention			—				—				—				575				—				701				942				—				2,218
Substandard			—				2,915				—				2,302				1,342				1,933				2,099				—				10,591
Total C&I			9,500				28,541				32,498				22,237				14,403				16,723				132,502				25				256,429
C&I gross charge-offs			—				—				—				—				—				—				408				—				408
Warehouse lending
Pass			—				—				—				—				—				—				8,111				—				8,111
Watch			—				—				—				—				—				—				2				—				2
Total warehouse lending			—				—				—				—				—				—				8,113				—				8,113
Total commercial business loans		$	9,500			$	28,541			$	32,498			$	22,237			$	14,403			$	16,723			$	140,615			$	25			$	264,542

TOTAL LOANS RECEIVABLE, GROSS
Pass		$	91,962			$	488,952			$	610,071			$	435,013			$	246,789			$	303,485			$	195,474			$	98			$	2,371,844
Watch			—				7,643				10,843				13,593				2,224				3,596				9,551				—				47,450
Special mention			—				—				—				575				—				1,105				942				—				2,622
Substandard			—				3,300				6,453				2,771				3,314				6,865				2,239				—				24,942
Total loans receivable, gross		$	91,962			$	499,895			$	627,367			$	451,952			$	252,327			$	315,051			$	208,206			$	98			$	2,446,858
Total gross charge-offs		$	—			$	244			$	580			$	234			$	45			$	346			$	445			$	—			$	1,894

		December 31, 2023
																														Revolving Loans
REAL ESTATE LOANS		Term Loans by Year of Origination																												Converted
CRE		2023				2022				2021				2020				2019				Prior				Revolving Loans				to Term				Total Loans
Pass		$	48,551			$	91,144			$	61,689			$	46,117			$	27,957			$	61,764			$	499			$	—			$	337,721
Watch			3,201				5,446				12,894				—				453				2,226				45				—				24,265
Special mention			—				—				—				—				409				—				—				—				409
Substandard			—				—				—				1,650				—				1,957				—				326				3,933
Total CRE			51,752				96,590				74,583				47,767				28,819				65,947				544				326				366,328
Construction and development
Pass			120,155				106,168				46,989				15,219				—				540				9,284				—				298,355
Substandard			—				4,699				—				—				—				—				—				—				4,699
Total construction and development			120,155				110,867				46,989				15,219				—				540				9,284				—				303,054
Home equity
Pass			4,583				398				1,584				6,525				11				2,137				54,077				—				69,315
Substandard			—				—				—				—				—				36				137				—				173
Total home equity			4,583				398				1,584				6,525				11				2,173				54,214				—				69,488
Home equity gross charge-offs																											10								10
One-to-four-family																											—
Pass			103,165				175,412				122,406				80,815				30,595				52,008				—				472				564,873
Substandard			—				866				—				—				—				2,003				—				—				2,869
Total one-to-four-family			103,165				176,278				122,406				80,815				30,595				54,011				—				472				567,742
Multi-family
Pass			7,106				20,404				91,047				42,511				37,990				24,711				—				—				223,769
Total multi-family			7,106				20,404				91,047				42,511				37,990				24,711				—				—				223,769
Total real estate loans		$	286,761			$	404,537			$	336,609			$	192,837			$	97,415			$	147,382			$	64,042			$	798			$	1,530,381

		December 31, 2023
																														Revolving Loans
CONSUMER LOANS		Term Loans by Year of Origination																												Converted
Indirect home improvement		2023				2022				2021				2020				2019				Prior				Revolving Loans				to Term				Total Loans
Pass		$	171,208			$	212,661			$	93,664			$	36,032			$	23,977			$	30,492			$	6			$	—			$	568,040
Substandard			212				663				448				141				258				141				—				—				1,863
Total indirect home improvement			171,420				213,324				94,112				36,173				24,235				30,633				6				—				569,903
Indirect home improvement gross charge-offs			204				1,386				567				290				145				336				—				—				2,928
Marine
Pass			13,619				23,963				9,987				13,082				5,267				7,050				—				—				72,968
Substandard			—				—				52				85				—				205				—				—				342
Total marine			13,619				23,963				10,039				13,167				5,267				7,255				—				—				73,310
Marine gross charge-offs			—				47				93				—				7				256				—				—				403
Other consumer
Pass			309				559				175				69				3				159				2,258				—				3,532
Substandard			—				—				—				—				—				—				8				—				8
Total other consumer			309				559				175				69				3				159				2,266				—				3,540
Other consumer gross charge-offs			—				2				12				—				—				—				120				—				134
Total consumer loans		$	185,348			$	237,846			$	104,326			$	49,409			$	29,505			$	38,047			$	2,272			$	—			$	646,753

		December 31, 2023
COMMERCIAL																														Revolving Loans
BUSINESS LOANS		Term Loans by Year of Origination																												Converted
C&I		2023				2022				2021				2020				2019				Prior				Revolving Loans				to Term				Total Loans
Pass		$	13,971			$	32,334			$	19,634			$	11,537			$	5,122			$	9,707			$	119,844			$	145			$	212,294
Watch			2,322				—				1,382				2,366				—				953				5,754				—				12,777
Special mention			143				—				—				—				498				253				1,345				—				2,239
Substandard			2,940				—				2,321				1,391				1,766				169				2,005				—				10,592
Doubtful			—				—				—				—				—				—				399				—				399
Total C&I			19,376				32,334				23,337				15,294				7,386				11,082				129,347				145				238,301
C&I gross charge-offs			—				—				1				—				—				—				—				—				1
Warehouse lending
Pass			—				—				—				—				—				—				17,003				—				17,003
Watch			—				—				—				—				—				—				577				—				577
Total warehouse lending			—				—				—				—				—				—				17,580				—				17,580
Total commercial business loans		$	19,376			$	32,334			$	23,337			$	15,294			$	7,386			$	11,082			$	146,927			$	145			$	255,881

TOTAL LOANS RECEIVABLE, GROSS
Pass		$	482,667			$	663,043			$	447,175			$	251,907			$	130,922			$	188,568			$	202,971			$	617			$	2,367,870
Watch			5,523				5,446				14,276				2,366				453				3,179				6,376				—				37,619
Special mention			143				—				—				—				907				253				1,345				—				2,648
Substandard			3,152				6,228				2,821				3,267				2,024				4,511				2,150				326				24,479
Doubtful			—				—				—				—				—				—				399				—				399
Total loans receivable, gross		$	491,485			$	674,717			$	464,272			$	257,540			$	134,306			$	196,511			$	213,241			$	943			$	2,433,015
Total gross charge-offs		$	204			$	1,435			$	673			$	290			$	152			$	592			$	130			$	—			$	3,476

The following table presents the amortized cost basis of loans on nonaccrual status as of the dates indicated:

		March 31, 2024												December 31, 2023
		Nonaccrual with				Nonaccrual with				Total				Nonaccrual with				Nonaccrual with				Total
REAL ESTATE LOANS		No ACL				ACL				Nonaccrual				No ACL				ACL				Nonaccrual
CRE		$	1,102			$	—			$	1,102			$	1,088			$	—			$	1,088
Construction and development			—				4,737				4,737				—				4,699				4,699
Home equity			170				—				170				173				—				173
One-to-four-family			173				—				173				96				—				96
			1,445				4,737				6,182				1,357				4,699				6,056
CONSUMER LOANS
Indirect home improvement			—				2,195				2,195				—				1,863				1,863
Marine			—				385				385				—				342				342
Other consumer			—				3				3				—				8				8
			—				2,583				2,583				—				2,213				2,213
COMMERCIAL BUSINESS LOANS
C&I			292				3,049				3,341				—				2,683				2,683
Total		$	1,737			$	10,369			$	12,106			$	1,357			$	9,595			$	10,952

The Company recognized interest income on a cash basis for nonaccrual loans of $111,000 and $62,000 during the three months ended March 31, 2024 and 2023, respectively.

The following table presents the amortized cost basis of collateral dependent loans by class of loans as of the dates indicated:

		March 31, 2024																December 31, 2023
		Commercial				Residential				Other								Commercial				Residential				Other
REAL ESTATE LOANS		Real Estate				Real Estate				Non-Real Estate				Total				Real Estate				Real Estate				Non-Real Estate				Total
CRE		$	1,102			$	—			$	—			$	1,102			$	1,088			$	—			$	—			$	1,088
Construction and development			4,737				—				—				4,737				4,699				—								4,699
Home equity			—				170				—				170				—				173				—				173
One-to-four-family			—				173				—				173				—				96				—				96
			5,839				343				—				6,182				5,787				269				—				6,056
CONSUMER LOANS
Indirect home improvement			—				—				2,195				2,195				—				—				1,863				1,863
Marine			—				—				385				385				—				—				342				342
			—				—				2,580				2,580				—				—				2,205				2,205
COMMERCIAL BUSINESS LOANS
C&I			—				—				3,341				3,341				—				—				2,683				2,683
Total		$	5,839			$	343			$	5,921			$	12,103			$	5,787			$	269			$	4,888			$	10,944