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Loans Held for Investment (Tables)

6 Months Ended

Jun. 30, 2020

Schedule of components of loans held for investment

The following table presents the composition of the loan portfolio for the period indicated:


	June 30,		December 31,
	2020		2019
	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	2,783,692	$	2,070,141
Multifamily	5,225,557		1,575,726
Construction and land	357,426		438,786
SBA secured by real estate	59,482		68,431
Total investor loans secured by real estate	8,426,157		4,153,084
Business loans secured by real estate
CRE owner-occupied	2,170,154		1,846,554
Franchise real estate secured	364,647		353,240
SBA secured by real estate	85,542		88,381
Total business loans secured by real estate	2,620,343		2,288,175
Commercial loans
Commercial and industrial	2,051,313		1,393,270
Franchise non-real estate secured	523,755		564,357
SBA non-real estate secured	21,057		17,426
SBA PPP	1,128,780		—
Total commercial loans	3,724,905		1,975,053
Retail loans
Single family residential	265,170		255,024
Consumer	46,309		50,975
Total retail loans	311,479		305,999
Gross loans held for investment ⁽¹⁾	15,082,884		8,722,311
Allowance for credit losses for loans held for investment ⁽²⁾	(282,271)		(35,698)
Loans held for investment, net	$	14,800,613	$	8,686,613

Loans held for sale, at lower of cost or fair value	$	1,007	$	1,672

______________________________

⁽¹⁾ Includes unaccreted fair value net purchase discounts of $144.5 million and $40.7 million as of June 30, 2020 and December 31, 2019, respectively.

⁽²⁾The allowance for credit losses as of December 31, 2019 was the allowance for loan and lease losses (“ALLL”) accounted for under ASC 450 and ASC 310, which is reflective of probable incurred losses as of the balance sheet date. The allowance for credit losses at June 30, 2020 is accounted for under ASC 326, which is reflective of estimated expected lifetime credit losses.

Summary of loan portfolio by the Company's internal risk grading system

The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination, as of June 30, 2020:


	Term Loans by Vintage
	2020		2019		2018		2017		2016		Prior		Revolving		Revolving Converted to Term During the Period		Total
June 30, 2020	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied
Pass	$	155,429	$	567,989	$	482,567	$	359,173	$	319,468	$	876,776	$	10,924	$	—	$	2,772,326
Special mention	—		—		—		—		—		4,872		—		—		4,872
Substandard	—		—		322		528		518		4,567		559		—		6,494

Multifamily
Pass	522,381		1,753,769		1,010,047		761,576		474,835		701,092		1,031		—		5,224,731

Substandard	—		—		—		—		—		826		—		—		826

Construction and land
Pass	13,838		140,848		135,797		36,569		—		8,468		461		—		335,981
Special mention	—		—		19,643		—		—		—		—		—		19,643
Substandard	—		—		—		1,802		—		—		—		—		1,802

SBA secured by real estate
Pass	495		10,436		12,284		15,483		6,734		9,392		—		—		54,824
Special mention	—		—		—		698		—		269		—		—		967
Substandard	—		268		937		—		795		1,691		—		—		3,691

Total investor loans secured by real estate	$	692,143	$	2,473,310	$	1,661,597	$	1,175,829	$	802,350	$	1,607,953	$	12,975	$	—	$	8,426,157
Business loans secured by real estate
CRE owner-occupied
Pass	$	212,046	$	435,924	$	345,829	$	324,096	$	261,057	$	525,237	$	4,875	$	—	$	2,109,064
Special mention	5,979		15,734		—		3,886		—		8,476		—		—		34,075
Substandard	—		—		7,086		2,525		6,797		10,357		250		—		27,015

Franchise real estate secured
Pass	20,406		88,808		76,192		103,848		31,578		42,932		—		—		363,764

Substandard	—		—		—		—		—		883		—		—		883

SBA secured by real estate
Pass	1,905		7,693		14,159		17,302		10,510		28,021		365		—		79,955
Special mention	—		—		—		1,008		343		—		—		—		1,351
Substandard	—		—		—		914		148		3,174		—		—		4,236

Total loans secured by business real estate	$	240,336	$	548,159	$	443,266	$	453,579	$	310,433	$	619,080	$	5,490	$	—	$	2,620,343


	Term Loans by Vintage
	2020		2019		2018		2017		2016		Prior		Revolving		Revolving Converted to Term During the Period		Total
June 30, 2020	(Dollars in thousands)
Commercial Loans
Commercial and industrial
Pass	$	106,699	$	388,548	$	290,535	$	221,262	$	71,937	$	105,707	$	803,473	$	2,470	$	1,990,631
Special mention	—		73		2,928		1,994		1,562		2,671		20,969		500		30,697
Substandard	70		309		2,621		1,000		6,567		4,883		14,342		193		29,985

Franchise non-real estate secured
Pass	10,347		206,422		121,616		74,743		49,307		45,116		2,205		—		509,756
Special mention	—		—		—		3,834		—		—		—		—		3,834
Substandard	—		—		—		7,737		—		2,428		—		—		10,165

SBA non-real estate secured
Pass	646		2,341		1,428		2,517		654		4,276		—		3,537		15,399
Special mention	—		—		—		1,745		284		150		—		—		2,179
Substandard	—		86		399		856		—		1,374		764		—		3,479

SBA PPP
Pass	1,128,780		—		—		—		—		—		—		—		1,128,780



Total commercial loans	$	1,246,542	$	597,779	$	419,527	$	315,688	$	130,311	$	166,605	$	841,753	$	6,700	$	3,724,905
Retail Loans
Single family residential
Pass	$	4,863	$	9,426	$	15,553	$	14,991	$	38,123	$	143,690	$	37,140	—		$	263,786
Special mention	—		—		—		—		—		58		—		—		58
Substandard	—		—		—		—		251		1,075		—		—		1,326

Consumer loans
Pass	72		174		870		38,039		23		3,273		3,812		—		46,263

Substandard	—		—		—		—		—		46		—		—		46

Total retail loans	$	4,935	$	9,600	$	16,423	$	53,030	$	38,397	$	148,142	$	40,952	$	—	$	311,479
Totals gross loans	$	2,183,956	$	3,628,848	$	2,540,813	$	1,998,126	$	1,281,491	$	2,541,780	$	901,170	$	6,700	$	15,082,884

The following tables stratify the loan portfolio by the Company’s internal risk grading as of December 31, 2019:


	Credit Risk Grades
	Pass		Special Mention		Substandard		Total Gross Loans
December 31, 2019	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	2,067,875	$	1,178	$	1,088	$	2,070,141
Multifamily	1,575,510		—		216		1,575,726
Construction and land	438,769		—		17		438,786
SBA secured by real estate	65,835		973		1,623		68,431
Total investor loans secured by real estate	4,147,989		2,151		2,944		4,153,084
Business loans secured by real estate
CRE owner-occupied	1,831,853		11,167		3,534		1,846,554
Franchise real estate secured	352,319		921		—		353,240
SBA secured by real estate	83,106		1,842		3,433		88,381
Total business loans secured by real estate	2,267,278		13,930		6,967		2,288,175
Commercial loans
Commercial and industrial	1,359,662		13,226		20,382		1,393,270
Franchise non-real estate secured	546,594		6,930		10,833		564,357
SBA not secured by real estate	13,933		485		3,008		17,426
Total commercial loans	1,920,189		20,641		34,223		1,975,053
Retail loans
Single family residential	254,463		—		561		255,024
Consumer loans	50,921		—		54		50,975
Total retail loans	305,384		—		615		305,999
Total gross loans	$	8,640,840	$	36,722	$	44,749	$	8,722,311

The following table presents PD bands for commercial real estate and commercial loan segments of the loan portfolio as of the date indicated. It should be noted that SBA PPP loans, which are in the commercial loans segment, have been excluded from this table since they are not included in the Company’s ACL model.


	Commercial Real Estate Term Loans by Vintage
	2020		2019		2018		2017		2016		Prior		Revolving		Revolving Converted to Term During the Period		Total
June 30, 2020	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied
0% - 5.00%	$	153,133	$	561,104	$	474,139	$	258,886	$	279,780	$	793,398	$	10,924	$	—	$	2,531,364
>5.00% - 10.00%	—		2,897		8,428		86,660		37,621		39,947		—		—		175,553
Greater than 10%	2,296		3,988		322		14,155		2,585		52,870		559		—		76,775
Multifamily
0% - 5.00%	520,782		1,723,731		991,561		746,855		460,328		678,741		1,031		—		5,123,029
>5.00% - 10.00%	1,599		17,431		8,692		2,176		4,098		8,906		—		—		42,902
Greater than 10%	—		12,607		9,794		12,545		10,409		14,271		—		—		59,626
Construction and Land
0% - 5.00%	13,838		32,921		4,296		20,357		—		6,919		66		—		78,397
>5.00% - 10.00%	—		40,785		21,154		3,275		—		—		395		—		65,609
Greater than 10%	—		67,142		129,990		14,739		—		1,549		—		—		213,420
SBA secured by real estate
0% - 5.00%	495		10,704		12,115		16,181		7,135		11,352		—		—		57,982
>5.00% - 10.00%	—		—		512		—		—		—		—		—		512
Greater than 10%	—		—		594		—		394		—		—		—		988
Total investor loans secured by real estate	$	692,143	$	2,473,310	$	1,661,597	$	1,175,829	$	802,350	$	1,607,953	$	12,975	$	—	$	8,426,157
Business loans secured by real estate
CRE owner-occupied
0% - 5.00%	$	211,860	$	402,474	$	309,907	$	304,611	$	234,139	$	488,345	$	3,124	$	—	$	1,954,460
>5.00% - 10.00%	186		33,118		35,922		22,510		26,918		42,552		1,504		—		162,710
Greater than 10%	5,979		16,066		7,086		3,386		6,797		13,173		497		—		52,984
Franchise real estate secured
0% - 5.00%	18,724		86,263		74,832		95,221		28,550		42,831		—		—		346,421
>5.00% - 10.00%	754		—		632		8,627		3,028		101		—		—		13,142
Greater than 10%	928		2,545		728		—		—		883		—		—		5,084
SBA secured by real estate
0% - 5.00%	1,905		7,693		13,476		16,611		8,547		24,605		365		—		73,202
>5.00% - 10.00%	—		—		683		1,699		2,306		3,416		—		—		8,104
Greater than 10%	—		—		—		914		148		3,174		—		—		4,236
Total business loans secured by real estate	$	240,336	$	548,159	$	443,266	$	453,579	$	310,433	$	619,080	$	5,490	$	—	$	2,620,343


	Commercial Real Estate Term Loans by Vintage
	2020		2019		2018		2017		2016		Prior		Revolving		Revolving Converted to Term During the Period		Total
June 30, 2020	(Dollars in thousands)
Commercial Loans
Commercial and industrial
0% - 5.00%	$	91,538	$	376,850	$	268,429	$	211,610	$	58,496	$	94,984	$	508,985	$	1,593	$	1,612,485
>5.00% - 10.00%	9,735		11,741		24,030		11,639		14,449		8,862		271,951		547		352,954
Greater than 10%	5,496		339		3,625		1,007		7,121		9,415		57,848		1,023		85,874
Franchise non-real estate secured
0% - 5.00%	9,535		197,360		117,509		69,287		46,925		40,305		1,476		—		482,397
>5.00% - 10.00%	812		6,619		3,593		9,290		2,382		4,704		729		—		28,129
Greater than 10%	—		2,443		514		7,737		—		2,535		—		—		13,229
SBA not secured by real estate
0% - 5.00%	646		2,341		1,301		2,517		571		3,842		—		3,537		14,755
>5.00% - 10.00%	—		—		132		1,745		367		439		—		—		2,683
Greater than 10%	—		86		394		856		—		1,519		764		—		3,619
Total commercial loans	$	117,762	$	597,779	$	419,527	$	315,688	$	130,311	$	166,605	$	841,753	$	6,700	$	2,596,125

The following table summarizes the amortized cost of loans in these segments by current estimated LTV and by year of origination as of the date indicated:


	Term Loans by Vintage
	2020		2019		2018		2017		2016		Prior		Revolving		Revolving Converted to Term During the Period		Total
June 30, 2020	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied
55% and below	$	73,769	$	241,867	$	191,322	$	156,622	$	189,946	$	618,498	$	10,924	—		$	1,482,948
>55-65%	54,874		214,909		119,539		177,366		104,448		231,545		559		—		903,240
>65-75%	22,526		108,464		169,089		23,368		25,379		31,566		—		—		380,392
Greater than 75%	4,260		2,749		2,939		2,345		213		4,606		—		—		17,112
Multifamily
55% and below	123,726		387,468		341,633		223,446		95,645		290,333		599		—		1,462,850
>55-65%	164,019		734,321		386,341		266,322		167,271		283,527		432		—		2,002,233
>65-75%	234,636		609,946		270,888		269,910		211,919		122,199		—		—		1,719,498
Greater than 75%	—		22,034		11,185		1,898		—		5,859		—		—		40,976
Construction and land
55% and below	13,838		136,216		107,812		30,148		—		8,468		461		—		296,943
>55-65%	—		4,632		42,778		8,223		—		—		—		—		55,633
>65-75%	—		—		3,697		—		—		—		—		—		3,697
Greater than 75%	—		—		1,153		—		—		—		—		—		1,153
SBA secured by real estate
55% and below	—		1,148		655		841		332		436		—		—		3,412
>55-65%	—		3,187		1,647		3,860		623		4,791		—		—		14,108
>65-75%	495		3,724		7,802		5,364		4,358		2,829		—		—		24,572
Greater than 75%	—		2,645		3,117		6,116		2,216		3,296		—		—		17,390
Total investor loans secured by real estate	$	692,143	$	2,473,310	$	1,661,597	$	1,175,829	$	802,350	$	1,607,953	$	12,975	$	—	$	8,426,157
Business loan secured by real estate
CRE owner-occupied
55% and below	$	55,579	$	153,995	$	171,876	$	196,583	$	150,233	$	377,115	$	5,125	—		$	1,110,506
>55-65%	63,067		100,226		89,960		64,803		73,724		81,403		—		—		473,183
>65-75%	56,327		175,639		63,734		54,957		39,714		58,581		—		—		448,952
Greater than 75%	43,052		21,798		27,345		14,164		4,183		26,971		—		—		137,513
Franchise real estate secured
55% and below	7,461		18,360		14,615		16,057		11,567		20,926		—		—		88,986
>55-65%	928		8,900		13,096		29,110		7,823		5,919		—		—		65,776
>65-75%	2,911		49,851		25,927		9,859		11,062		14,848		—		—		114,458
Greater than 75%	9,106		11,697		22,554		48,822		1,126		2,122		—		—		95,427
SBA secured by real estate
55% and below	736		1,735		6,537		4,784		2,348		10,568		365		—		27,073
>55-65%	104		514		2,337		2,643		2,252		4,121		—		—		11,971
>65-75%	264		2,687		754		4,602		3,167		5,871		—		—		17,345
Greater than 75%	801		2,757		4,531		7,195		3,234		10,635		—		—		29,153

Total business loans secured by real estate	$	240,336	$	548,159	$	443,266	$	453,579	$	310,433	$	619,080	$	5,490	$	—	$	2,620,343

The following table presents FICO bands for the retail segment of the loan portfolio as of the date indicated:


	Term Loans by Vintage
	2020		2019		2018		2017		2016		Prior		Revolving		Revolving Converted to Term During the Period		Total
June 30, 2020	(Dollars in thousands)
Retail Loans
Single family residential
Greater than 740	$	4,863	$	8,236	$	13,274	$	9,719	$	31,203	$	96,475	$	27,050	—		$	190,820
>680 - 740	—		1,190		2,268		4,794		2,660		18,190		9,095		—		38,197
>580 - 680	—		—		—		466		3,178		9,030		959		—		13,633
Less than 580	—		—		11		12		1,333		21,128		36		—		22,520
Consumer loans
Greater than 740	72		95		863		51		20		2,661		1,993		—		5,755
>680 - 740	—		59		7		37,988		—		488		1,737		—		40,279
>580 - 680	—		20		—		—		3		150		51		—		224
Less than 580	—		—		—		—		—		20		31		—		51
Total retail loans	$	4,935	$	9,600	$	16,423	$	53,030	$	38,397	$	148,142	$	40,952	$	—	$	311,479

Schedule of delinquencies in the Company's loan portfolio

The following tables stratify loans held by investment by delinquencies in the Company’s loan portfolio at the dates indicated:


			Days Past Due
	Current		30-59		60-89		90+		Total
June 30, 2020	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	2,780,620	$	—	$	—	$	3,072	$	2,783,692
Multifamily	5,222,439		3,118		—		—		5,225,557
Construction and land	354,729		895		—		1,802		357,426
SBA secured by real estate	58,494		—		—		988		59,482
Total investor loans secured by real estate	8,416,282		4,013		—		5,862		8,426,157
Business loans secured by real estate
CRE owner-occupied	2,162,842		1,062		319		5,931		2,170,154
Franchise real estate secured	364,647		—		—		—		364,647
SBA secured by real estate	84,536		—		—		1,006		85,542
Total business loans secured by real estate	2,612,025		1,062		319		6,937		2,620,343
Commercial loans
Commercial and industrial	2,041,675		796		3,116		5,726		2,051,313
Franchise non-real estate secured	515,313		—		—		8,442		523,755
SBA not secured by real estate	19,889		—		328		840		21,057
SBA PPP	1,128,780		—		—		—		1,128,780
Total commercial loans	3,705,657		796		3,444		15,008		3,724,905
Retail loans
Single family residential	264,549		257		364		—		265,170
Consumer loans	46,183		120		6		—		46,309
Total retail loans	310,732		377		370		—		311,479
Totals	$	15,044,696	$	6,248	$	4,133	$	27,807	$	15,082,884


			Days Past Due
	Current		30-59		60-89		90+		Total Gross Loans
December 31, 2019	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	2,067,874	$	1,179	$	—	$	1,088	$	2,070,141
Multifamily	1,575,726		—		—		—		1,575,726
Construction and land	438,786		—		—		—		438,786
SBA secured by real estate	68,041		—		—		390		68,431
Total investor loans secured by real estate	4,150,427		1,179		—		1,478		4,153,084
Business loans secured by real estate
CRE owner-occupied	1,846,223		331		—		—		1,846,554
Franchise real estate secured	353,240		—		—		—		353,240
SBA secured by real estate	86,946		—		589		846		88,381
Total business loans secured by real estate	2,286,409		331		589		846		2,288,175
Commercial loans
Commercial and industrial	1,389,026		422		826		2,996		1,393,270
Franchise non-real estate secured	555,215		—		9,142		—		564,357
SBA not secured by real estate	16,141		167		—		1,118		17,426
Total commercial loans	1,960,382		589		9,968		4,114		1,975,053
Retail loans
Single family residential	255,024		—		—		—		255,024
Consumer loans	50,967		5		2		1		50,975
Total retail loans	305,991		5		2		1		305,999
Totals loans	$	8,703,209	$	2,104	$	10,559	$	6,439	$	8,722,311

Summary of Investment in impaired loans

The following tables provide a summary of the Company’s investment in impaired loans as of the period indicated:


	Impaired Loans
	Unpaid Principal Balance		Recorded Investment		With Specific Allowance		Without Specific Allowance		Specific Allowance for Impaired Loans
	(Dollars in thousands)
December 31, 2019
Investor loans secured by real estate
CRE non-owner-occupied	$	1,184	$	1,088	$	—	$	1,088	$	—


SBA secured by real estate	772		390		—		390		—
Business loans secured by real estate


SBA secured by real estate	1,743		1,517		—		1,517		—
Commercial loans
Commercial and industrial	7,755		7,529		—		7,529		—
Franchise non-real estate secured	10,835		10,834		—		10,834		—
SBA non-real estate secured	1,555		1,118		—		1,118		—
Retail loans
Single family residential	412		366		—		366		—

Totals	$	24,256	$	22,842	$	—	$	22,842	$	—

The following table presents information on impaired loans and leases, disaggregated by loan segment, for the periods indicated:


	Impaired Loans
	June 30, 2019
	Three Months Ended						Six Months Ended
	Average Recorded Investment		Interest Income Recognized ⁽⁶⁾		Average Recorded Investment		Interest Income Recognized ⁽⁶⁾
	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	162	$	—	$	81	$	—

Construction and land	160		—		80		—
SBA secured by real estate	1,292		—		1,591		—
Business loans secured by real estate
CRE owner-occupied	564		—		570		—
Franchise real estate secured	3,762		—		3,774		—
SBA secured by real estate	828		—		554		—
Commercial loans
Commercial and industrial	10,103		109		9,803		199
Franchise non-real estate secured	285		—		238		—
SBA non-real estate secured	1,019		—		1,064		—
Retail loans
Single family residential	383		—		389		—
Consumer loans	17		—		37		—
Totals	$	18,575	$	109	$	18,181	$	199

Schedule of combination of loans modified without TDR Classification

The following table presents the combination of types of loan and payment relief that have been granted for the period indicated as of that date.


	June 30, 2020
	Full payment Deferral		Interest-only Deferral		Total
	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	545,928	$	250,586	$	796,514
Multifamily	424,540		67,720		492,260


Total investor loans secured by real estate	970,468		318,306		1,288,774
Business loans secured by real estate
CRE owner-occupied	297,662		65,442		363,104
Franchise real estate secured	115,674		59,060		174,734
SBA secured by real estate	26		—		26
Total business loans secured by real estate	413,362		124,502		537,864
Commercial loans
Commercial and industrial	61,497		30,061		91,558
Franchise non-real estate secured	188,548		126,566		315,114


Total commercial loans	250,045		156,627		406,672
Retail loans
Single family residential	11,391		265		11,656
Consumer	8		—		8
Total retail loans	11,399		265		11,664
Total loans	$	1,645,274	$	599,700	$	2,244,974

Schedule of acquired loans classified as PCD

The following table reconciles the par value, or initial amortized cost, of loans acquired in the Opus acquisition as of the date of the acquisition with the purchase price (or initial fair value of the loans):


	June 1, 2020
	Investor Loans Secured by Real Estate		Business Loans Secured by Real Estate		Commercial Loans		Retail Loans		Total
	(Dollars in thousands)
Par value (unpaid principal balance)	$	704,441	$	105,578	$	80,184	$	6,280	$	896,483
Allowance for credit losses ⁽¹⁾	(13,786)		(4,083)		(25,635)		(381)		(43,885)
(Discount) premium related to factors other than credit	(8,696)		(2,512)		138		(294)		(11,364)
Purchase price (initial fair value)	$	681,959	$	98,983	$	54,687	$	5,605	$	841,234

______________________________

⁽¹⁾ The initial gross ACL determined for PCD loans was $43.9 million as of the acquisition date. Of this amount, approximately $22.7 million relates to net uncollectable balances such as loans that were fully or partially charged off prior to acquisition. Therefore, the net impact to the ACL related to PCD loans was an increase of $21.2 million.

Summary of nonaccrual loans

The following tables provide a summary of nonaccrual loans as of the date indicated:


	Nonaccrual Loans ⁽¹⁾
	Collateral Dependent Loans		ACL		Non-Collateral Dependent Loans		ACL		Total Nonaccrual Loans ⁽²⁾		Nonaccrual Loans with No ACL
June 30, 2020	(Dollars in thousands)
Investor loans secured by real estate
CRE non-owner-occupied	$	5,322	$	—	$	—	$	—	$	5,322	$	5,322

Construction and land	1,802		—		—		—		1,802		1,802
SBA secured by real estate	988		—		—		—		988		988
Total investor loans secured by real estate	8,112		—		—		—		8,112		8,112
Business loans secured by real estate
CRE owner-occupied	5,563		—		1,196		393		6,759		5,563

SBA secured by real estate	1,006		—		77		17		1,083		1,006
Total business loans secured by real estate	6,569		—		1,273		410		7,842		6,569
Commercial loans
Commercial and industrial	1,606		—		4,464		646		6,070		1,606
Franchise non-real estate secured	2,428		—		7,742		1,493		10,170		2,428
SBA non-real estate secured	840		—		—		—		840		840
Total commercial loans	4,874		—		12,206		2,139		17,080		4,874
Retail loans
Single family residential	662		—		129		—		791		662

Total retail loans	662		—		129		—		791		662
Totals nonaccrual loans	$	20,217	$	—	$	13,608	$	2,549	$	33,825	$	20,217

______________________________

⁽¹⁾ The ACL for nonaccrual loans is determined based on a discounted cash flow methodology unless the loan is considered collateral dependent. The ACL for collateral dependent loans is determined based on the estimated fair value of the underlying collateral.

⁽²⁾ No interest income was recognized on nonaccrual loans during the three and six months ended June 30, 2020.

Schedule of collateral dependent loans by collateral type

The following table summarizes collateral dependent loans by collateral type as of June 30, 2020:


	June 30, 2020
	Office Properties		Industrial Properties		Retail Properties		Land Properties		Hotel Properties		Residential Properties		Business Assets		Total
	(Dollars in thousands)
Investor loan secured by real estate
CRE non-owner-occupied	$	—	$	2,250	$	2,750	$	—	$	322	$	—	$	—	$	5,322

Construction and land	—		—		—		—		—		1,802		—		1,802
SBA secured by real estate	—		—		—		—		988		—		—		988
Total investor loans secured by real estate	—		2,250		2,750		—		1,310		1,802		—		8,112
Business loans secured by real estate
CRE owner-occupied	—		509		—		5,054		—		—		—		5,563
Franchise real estate secured	—		—		883		—		—		—		—		883
SBA secured by real estate	247		758		—		—		—		—		—		1,005
Total business loans secured by real estate	247		1,267		883		5,054		—		—		—		7,451
Commercial loans
Commercial and industrial	—		—		—		312		—		—		1,295		1,607
Franchise non-real estate secured	—		—		—		—		—		—		2,428		2,428
SBA non-real estate secured	—		—		—		—		—		—		840		840
Total commercial loans	—		—		—		312		—		—		4,563		4,875
Retail loans
Single family residential	—		—		—		—		—		662		—		662

Total retail loans	—		—		—		—		—		662		—		662
Totals collateral dependent loans	$	247	$	3,517	$	3,633	$	5,366	$	1,310	$	2,464	$	4,563	$	21,100