LOANS AND CREDIT QUALITY

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

LOANS AND CREDIT QUALITY

LOANS AND CREDIT QUALITY:

The Company's LHFI is divided into two portfolio segments, commercial loans and consumer loans. Within each portfolio segment, the Company monitors and assesses credit risk based on the risk characteristics of each of the following loan classes: single family and home equity and other loans within the consumer loan portfolio segment and non-owner occupied commercial real estate, multifamily, construction and land development, owner occupied commercial real estate and commercial business loans within the commercial loan portfolio segment. LHFI consists of the following:

(in thousands)	At September 30, 2021		At December 31, 2020
Commercial real estate loans
Non-owner occupied commercial real estate	$	754,031	$	829,538
Multifamily	2,090,156		1,428,092
Construction/land development	514,322		553,695
Total	3,358,509		2,811,325
Commercial and industrial loans
Owner occupied commercial real estate	450,350		467,256
Commercial business	435,756		645,723
Total	886,106		1,112,979
Consumer loans
Single family (1)	793,927		915,123
Home equity and other	315,715		404,753
Total	1,109,642		1,319,876
Total LHFI	5,354,257		5,244,180
Allowance for credit losses ("ACL")	(54,516)		(64,294)
Total LHFI less ACL	$	5,299,741	$	5,179,886

(1)    Includes $4.5 million and $7.1 million at September 30, 2021 and December 31, 2020, respectively, of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Loans totaling $1.7 billion and $1.4 billion at September 30, 2021 and December 31, 2020, respectively, were pledged to secure borrowings from the Federal Home Loan Bank ("FHLB") and loans totaling $430 million and $569 million at September 30, 2021 and December 31, 2020, respectively, were pledged to secure borrowings from the Federal Reserve Bank.

Credit Risk Concentrations

LHFI are primarily secured by real estate located in the Pacific Northwest, California and Hawaii. At September 30, 2021 and December 31, 2020, multifamily loans in the state of California represented 29% and 19% of the total LHFI portfolio, respectively.

Credit Quality

Management considers the level of ACL to be appropriate to cover credit losses expected over the life of the loans for the LHFI portfolio. The cumulative loss rate used as the basis for the estimate of credit losses is comprised of the Bank’s historical loss experience and eight qualitative factors for current and forecasted periods.

During the quarter ended March 31, 2020, the qualitative factors increased significantly due to the forecasted impacts of the COVID-19 pandemic. The qualitative factors have remained at a high level due to the continued uncertainty regarding the impact of the COVID-19 pandemic. Included in the qualitative factors are estimates of potential loss exposure which are based on forbearance activities relating to the COVID-19 pandemic in the Bank’s loan portfolio. Due to improvements in economic conditions, the Company recorded a $5 million and $9 million recovery of the allowance for credit losses in the third quarter of 2021 and nine months ended September 30, 2021, respectively. As of September 30, 2021, the Bank expects that over the two-year forecast period, the markets in which it operates will have a modest improvement in single family and multifamily collateral values, but deterioration in commercial real estate collateral values with negative risk factors peaking in the first year. The Bank also expects that over the two-year forecast period, the markets in which it operates will have a modest deterioration in the economic outlook, with negative risk factors peaking in the first year.

In addition to the ACL for LHFI, the Company maintains a separate allowance for unfunded loan commitments which is included in accounts payable and other liabilities on our consolidated balance sheets. The allowance for unfunded commitments was $2.5 million and $1.6 million at September 30, 2021 and December 31, 2020, respectively.

The Bank has elected to exclude accrued interest receivable from the evaluation of the ACL. Accrued interest on LHFI was $18.1 million and $21.2 million at September 30, 2021 and December 31, 2020, respectively, and was reported in other assets in the consolidated balance sheets.

Activity in the ACL for LHFI and the allowance for unfunded commitments was as follows for the periods indicated:

	Quarter Ended September 30,				Nine Months Ended September 30,
(in thousands)	2021		2020		2021		2020
Beginning balance	$	59,897	$	65,000	$	64,294	$	41,772
Provision for credit losses	(5,348)		273		(9,864)		21,633
Net (charge-offs) recoveries	(33)		(381)		86		(356)
Impact of ASC 326 adoption	—		—		—		1,843
Ending balance	$	54,516	$	64,892	$	54,516	$	64,892
Allowance for unfunded commitments:
Beginning balance	$	2,104	$	2,071	$	1,588	$	1,065
Provision for credit losses	348		(273)		864		(1,164)
Impact of ASC 326 adoption	—		—		—		1,897
Ending balance	$	2,452	$	1,798	$	2,452	$	1,798
Provision for credit losses:
Allowance for credit losses - loans	$	(5,348)	$	273	$	(9,864)	$	21,633
Allowance for unfunded commitments	348		(273)		864		(1,164)
Total	$	(5,000)	$	—	$	(9,000)	$	20,469

Activity in the ACL for LHFI by loan portfolio and loan sub-class was as follows for the periods indicated:

	Quarter Ended September 30, 2021
(in thousands)	Beginning balance		Charge-offs		Recoveries		Provision		Ending balance
Commercial real estate loans
Non-owner occupied commercial real estate	$	9,077	$	—	$	—	$	559	$	9,636
Multifamily	7,245		—		—		(1,788)		5,457
Construction/land development
Multifamily construction	500		—		—		544		1,044
Commercial real estate construction	2,022		—		—		(1,671)		351
Single family construction	5,653		—		—		638		6,291
Single family construction to permanent	1,047		—		—		15		1,062
Total	25,544		—		—		(1,703)		23,841
Commercial and industrial loans
Owner occupied commercial real estate	5,518		—		—		(233)		5,285
Commercial business	15,874		(116)		24		(1,309)		14,473
Total	21,392		(116)		24		(1,542)		19,758
Consumer loans
Single family	7,163		(13)		33		(1,426)		5,757
Home equity and other	5,798		(341)		380		(677)		5,160
Total	12,961		(354)		413		(2,103)		10,917
Total ACL	$	59,897	$	(470)	$	437	$	(5,348)	$	54,516

	Quarter Ended September 30, 2020
(in thousands)	Beginning balance		Charge-offs		Recoveries		Provision		Ending balance
Commercial real estate loans
Non-owner occupied commercial real estate	$	7,325	$	—	$	—	$	1,598	$	8,923
Multifamily	5,387		—		—		(516)		4,871
Construction/land development
Multifamily construction	3,811		—		—		2,109		5,920
Commercial real estate construction	440		—		—		1,269		1,709
Single family construction	5,869		—		—		(362)		5,507
Single family construction to permanent	1,515		—		—		(309)		1,206
Total	24,347		—		—		3,789		28,136
Commercial and industrial loans
Owner occupied commercial real estate	5,641		—		—		47		5,688
Commercial business	15,816		(447)		24		2,951		18,344
Total	21,457		(447)		24		2,998		24,032
Consumer loans
Single family	8,070		(3)		2		(1,349)		6,720
Home equity and other	11,126		(39)		82		(5,165)		6,004
Total	19,196		(42)		84		(6,514)		12,724
Total ACL	$	65,000	$	(489)	$	108	$	273	$	64,892

	Nine Months Ended September 30, 2021
(in thousands)	Beginning balance		Charge-offs		Recoveries		Provision		Ending balance
Commercial real estate loans
Non-owner occupied commercial real estate	$	8,845	$	—	$	—	$	791	$	9,636
Multifamily	6,072		—		—		(615)		5,457
Construction/land development
Multifamily construction	4,903		—		—		(3,859)		1,044
Commercial real estate construction	1,670		—		—		(1,319)		351
Single family construction	5,130		—		—		1,161		6,291
Single family construction to permanent	1,315		—		—		(253)		1,062
Total	27,935		—		—		(4,094)		23,841
Commercial and industrial loans
Owner occupied commercial real estate	4,994				—		291		5,285
Commercial business	17,043		(116)		122		(2,576)		14,473
Total	22,037		(116)		122		(2,285)		19,758
Consumer loans
Single family	6,906		(127)		155		(1,177)		5,757
Home equity and other	7,416		(432)		484		(2,308)		5,160
Total	14,322		(559)		639		(3,485)		10,917
Total ACL	$	64,294	$	(675)	$	761	$	(9,864)	$	54,516

	Nine Months Ended September 30, 2020
(in thousands)	Prior to adoption of ASC 326		Impact of ASC 326 adoption		Charge-offs		Recoveries		Provision		Ending balance
Commercial real estate loans
Non-owner occupied commercial real estate	$	7,245	$	(3,392)	$	—	$	—	$	5,070	$	8,923
Multifamily	7,015		(2,977)		—		—		833		4,871
Construction/land development
Multifamily construction	2,848		693		—		—		2,379		5,920
Commercial real estate construction	624		(115)		—		—		1,200		1,709
Single family construction	3,800		4,280		—		163		(2,736)		5,507
Single family construction to permanent	1,003		200		—		—		3		1,206
Total	22,535		(1,311)		—		163		6,749		28,136
Commercial and industrial loans
Owner occupied commercial real estate	3,639		(2,459)		—		—		4,508		5,688
Commercial business	2,915		510		(590)		72		15,437		18,344
Total	6,554		(1,949)		(590)		72		19,945		24,032
Consumer loans
Single family	6,450		468		(3)		56		(251)		6,720
Home equity and other	6,233		4,635		(345)		291		(4,810)		6,004
Total	12,683		5,103		(348)		347		(5,061)		12,724
Total ACL	$	41,772	$	1,843	$	(938)	$	582	$	21,633	$	64,892

The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status.

	At September 30, 2021
(in thousands)	2021		2020		2019		2018		2017		2016 and prior		Revolving		Revolving-term		Total
COMMERCIAL PORTFOLIO
Non-owner occupied commercial real estate
1-6 Pass	$	35,832	$	50,863	$	172,296	$	133,472	$	132,238	$	225,012	$	1,189	$	915	$	751,817
7- Special Mention	—		—		—		—		—		2,214		—		—		2,214
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	35,832		50,863		172,296		133,472		132,238		227,226		1,189		915		754,031
Multifamily
1-6 Pass	972,806		557,201		289,164		65,618		29,218		176,093		56		—		2,090,156
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	972,806		557,201		289,164		65,618		29,218		176,093		56		—		2,090,156
Multifamily construction
1-6 Pass	4,194		25,363		20,748		—		—		—		—		—		50,305
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	4,194		25,363		20,748		—		—		—		—		—		50,305
Commercial real estate construction
1-6 Pass	2,712		3,961		—		1,998		—		563		8,672		—		17,906
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	2,712		3,961		—		1,998		—		563		8,672		—		17,906
Single family construction
1-6 Pass	151,418		42,188		17,677		—		—		78		91,915		—		303,276
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	151,418		42,188		17,677		—		—		78		91,915		—		303,276
Single family construction to permanent
Current	62,456		55,561		21,067		3,751		—		—		—		—		142,835
Past due:
30-59 days	—		—		—		—		—		—		—		—		—
60-89 days	—		—		—		—		—		—		—		—		—
90+ days	—		—		—		—		—		—		—		—		—
Total	62,456		55,561		21,067		3,751		—		—		—		—		142,835
Owner occupied commercial real estate
1-6 Pass	45,688		47,907		59,378		50,584		72,188		113,575		549		2,878		392,747
7- Special Mention	—		—		—		2,206		6,063		212		—		63		8,544
8 - Substandard	—		—		18,826		1,111		10,591		18,531		—		—		49,059
Total	45,688		47,907		78,204		53,901		88,842		132,318		549		2,941		450,350
Commercial business
1-6 Pass	128,807		58,648		49,889		27,876		16,780		23,331		88,636		2,341		396,308
7- Special Mention	—		—		9,145		1,518		4,503		57		5,500		142		20,865
8 - Substandard	3,002		46		3,407		8,129		1,567		2,608		(282)		106		18,583
Total	131,809		58,694		62,441		37,523		22,850		25,996		93,854		2,589		435,756
Total commercial portfolio	$	1,406,915	$	841,738	$	661,597	$	296,263	$	273,148	$	562,274	$	196,235	$	6,445	$	4,244,615

The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:

	At September 30, 2021
(in thousands)	2021		2020		2019		2018		2017		2016 and prior		Revolving		Revolving-term		Total
CONSUMER PORTFOLIO
Single family
Current	$	139,731	$	162,824	$	78,130	$	83,770	$	108,684	$	217,957	$	—	$	—	$	791,096
Past due:
30-59 days	—		—		—		—		212		766		—		—		978
60-89 days	—		—		—		—		315		277		—		—		592
90+ days	—		—		—		858		—		403		—		—		1,261
Total (1)	139,731		162,824		78,130		84,628		109,211		219,403		—		—		793,927
Home equity and other
Current	1,184		707		496		607		537		2,930		301,977		6,373		314,811
Past due:
30-59 days	—		2		—		—		—		248		183		—		433
60-89 days	3		2		—		—		—		1		—		—		6
90+ days	—		—		—		—		—		64		401		—		465
Total	1,187		711		496		607		537		3,243		302,561		6,373		315,715
Total consumer portfolio	140,918		163,535		78,626		85,235		109,748		222,646		302,561		6,373		1,109,642
Total LHFI	$	1,547,833	$	1,005,273	$	740,223	$	381,498	$	382,896	$	784,920	$	498,796	$	12,818	$	5,354,257

(1)    Includes $4.5 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

The following table presents a vintage analysis of the commercial portfolio segment by loan sub-class and risk rating or delinquency status:

	At December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		2015 and prior		Revolving		Revolving-term		Total
COMMERCIAL PORTFOLIO
Non-owner occupied commercial real estate
1-6 Pass	$	53,782	$	176,556	$	165,268	$	147,719	$	150,221	$	131,935	$	796	$	1,031	$	827,308
7- Special Mention	—		—		—		—		—		2,230		—		—		2,230
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	53,782		176,556		165,268		147,719		150,221		134,165		796		1,031		829,538
Multifamily
1-6 Pass	711,009		324,246		100,572		32,693		166,937		92,255		380		—		1,428,092
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	711,009		324,246		100,572		32,693		166,937		92,255		380		—		1,428,092
Multifamily construction
1-6 Pass	12,182		21,366		45,256		11,823		—		—		—		—		90,627
7- Special Mention	—		—		—		—		24,702		—		—		—		24,702
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	12,182		21,366		45,256		11,823		24,702		—		—		—		115,329
Commercial real estate construction
1-6 Pass	3,963		—		2,104		14,721		—		614		5,883		—		27,285
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	3,963		—		2,104		14,721		—		614		5,883		—		27,285
Single family construction
1-6 Pass	121,233		47,539		14,055		—		—		600		75,743		—		259,170
7- Special Mention	—		—		—		—		—		—		—		—		—
8 - Substandard	—		—		—		—		—		—		—		—		—
Total	121,233		47,539		14,055		—		—		600		75,743		—		259,170
Single family construction to permanent
Current	62,955		72,825		15,443		688		—		—		—		—		151,911
Past due:
30-59 days	—		—		—		—		—		—		—		—		—
60-89 days	—		—		—		—		—		—		—		—		—
90+ days	—		—		—		—		—		—		—		—		—
Total	62,955		72,825		15,443		688		—		—		—		—		151,911
Owner occupied commercial real estate
1-6 Pass	48,647		60,872		58,582		85,275		98,046		50,596		—		4,354		406,372
7- Special Mention	—		—		5,977		3,529		—		—		—		69		9,575
8 - Substandard	—		19,407		1,111		10,750		17,122		2,919		—		—		51,309
Total	48,647		80,279		65,670		99,554		115,168		53,515		—		4,423		467,256
Commercial business
1-6 Pass	345,540		63,020		47,710		22,556		18,411		14,972		76,218		2,577		591,004
7- Special Mention	—		10,837		2,058		6,653		—		—		3,975		166		23,689
8 - Substandard	—		5,923		11,327		2,338		1,891		1,001		8,438		112		31,030
Total	345,540		79,780		61,095		31,547		20,302		15,973		88,631		2,855		645,723
Total commercial portfolio	$	1,359,311	$	802,591	$	469,463	$	338,745	$	477,330	$	297,122	$	171,433	$	8,309	$	3,924,304

The following table presents a vintage analysis of the consumer portfolio segment by loan sub-class and delinquency status:

	At December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		2015 and prior		Revolving		Revolving-term		Total
CONSUMER PORTFOLIO
Single family
Current	$	174,994	$	111,143	$	154,757	$	168,412	$	59,161	$	242,444	$	—	$	—	$	910,911
Past due:
30-59 days	—		570		—		318		—		390		—		—		1,278
60-89 days	—		—		—		—		—		—		—		—		—
90+ days	824		335		405		386		—		984		—		—		2,934
Total (1)	175,818		112,048		155,162		169,116		59,161		243,818		—		—		915,123
Home equity and other
Current	1,878		1,230		1,311		1,363		431		5,126		384,005		8,147		403,491
Past due:
30-59 days	98		22		—		—		—		11		66		31		228
60-89 days	—		13		—		—		—		—		129		—		142
90+ days	—		9		—		—		275		24		584		—		892
Total	1,976		1,274		1,311		1,363		706		5,161		384,784		8,178		404,753
Total consumer portfolio	177,794		113,322		156,473		170,479		59,867		248,979		384,784		8,178		1,319,876
Total LHFI	$	1,537,105	$	915,913	$	625,936	$	509,224	$	537,197	$	546,101	$	556,217	$	16,487	$	5,244,180

(1)    Includes $7.1 million of loans where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in the consolidated income statements.

Collateral Dependent Loans

The following table presents the amortized cost basis of collateral-dependent loans by loan sub-class and collateral type:

	At September 30, 2021
(in thousands)	Land		1-4 Family		Non-residential real estate		Other non-real estate		Total
Commercial and industrial loans
Owner occupied commercial real estate	$	1,111	$	—	$	2,763	$	—	$	3,874
Commercial business	387		—		—		2,681		3,068
Total	1,498		—		2,763		2,681		6,942
Consumer loans
Single family	—		2,957		—		—		2,957
Home equity loans and other	—		923		—		—		923
Total	—		3,880		—		—		3,880
Total collateral-dependent loans	$	1,498	$	3,880	$	2,763	$	2,681	$	10,822

	At December 31, 2020
(in thousands)	Land		1-4 Family		Non-residential real estate		Other non-real estate		Total
Commercial and industrial loans
Owner occupied commercial real estate	$	1,789	$	—	$	3,133	$	—	$	4,922
Commercial business	1,787		545		—		2,882		5,214
Total	3,576		545		3,133		2,882		10,136
Consumer loans
Single family	—		2,457		—		—		2,457
Total	—		2,457		—		—		2,457
Total collateral-dependent loans	$	3,576	$	3,002	$	3,133	$	2,882	$	12,593

Nonaccrual and Past Due Loans

The following table presents nonaccrual status for loans:

	At September 30, 2021					At December 31, 2020
(in thousands)		Nonaccrual with no related ACL		Total Nonaccrual		Nonaccrual with no related ACL		Total Nonaccrual
Commercial and industrial loans
Owner occupied commercial real estate		$	3,874	$	3,874	$	4,922	$	4,922
Commercial business		1,360		7,249		3,100		9,183
Total		5,234		11,123		8,022		14,105
Consumer loans
Single family		$	2,907	$	4,602	$	2,173	$	4,883
Home equity and other		928		1,987		2		1,734
Total		3,835		6,589		2,175		6,617
Total nonaccrual loans		$	9,069	$	17,712	$	10,197	$	20,722

The following tables present an aging analysis of past due loans by loan portfolio segment and loan sub-class:

	At September 30, 2021
	Past Due and Still Accruing
(in thousands)	30-59 days			60-89 days			90 days or more				Nonaccrual			Total past due and nonaccrual (3)			Current			Total loans
Commercial real estate loans
Non-owner occupied commercial real estate	$	—		$	—		$	—			$	—		$	—		$	754,031		$	754,031
Multifamily	—			—			—				—			—			2,090,156			2,090,156
Construction/land development
Multifamily construction	—			—			—				—			—			50,305			50,305
Commercial real estate construction	—			—			—				—			—			17,906			17,906
Single family construction	—			—			—				—			—			303,276			303,276
Single family construction to permanent	—			—			—				—			—			142,835			142,835
Total	—			—			—				—			—			3,358,509			3,358,509
Commercial and industrial loans
Owner occupied commercial real estate	—			—			—				3,874			3,874			446,476			450,350
Commercial business	—			—			—				7,249			7,249			428,507			435,756
Total	—			—			—				11,123			11,123			874,983			886,106
Consumer loans
Single family	1,294			1,198			8,361			(2)	4,602			15,455			778,472			793,927			(1)
Home equity and other	260			4			—				1,987			2,251			313,464			315,715
Total	1,554			1,202			8,361				6,589			17,706			1,091,936			1,109,642
Total loans	$	1,554		$	1,202		$	8,361			$	17,712		$	28,829		$	5,325,428		$	5,354,257
%	0.03		%	0.02		%	0.16		%		0.33		%	0.54		%	99.46		%	100.00		%

	At December 31, 2020
	Past Due and Still Accruing
(in thousands)	30-59 days			60-89 days			90 days or more				Nonaccrual			Total past due and nonaccrual (3)			Current			Total loans
Commercial real estate loans
Non-owner occupied commercial real estate	$	—		$	—		$	—			$	—		$	—		$	829,538		$	829,538
Multifamily	—						—				—			—			1,428,092			1,428,092
Construction and land development
Multifamily construction	—			—			—				—			—			115,329			115,329
Commercial real estate construction	—			—			—				—			—			27,285			27,285
Single family construction	—			—			—				—			—			259,170			259,170
Single family construction to permanent	—			—			—				—			—			151,911			151,911
Total	—			—			—				—			—			2,811,325			2,811,325
Commercial and industrial loans
Owner occupied commercial real estate	—						—				4,922			4,922			462,334			467,256
Commercial business	—						—				9,183			9,183			636,540			645,723
Total	—			—			—				14,105			14,105			1,098,874			1,112,979
Consumer loans
Single family	2,161			418			11,476			(2)	4,883			18,938			896,185			915,123			(1)
Home equity and other	228			135			—				1,734			2,097			402,656			404,753
Total	2,389			553			11,476				6,617			21,035			1,298,841			1,319,876
Total loans	$	2,389		$	553		$	11,476			$	20,722		$	35,140		$	5,209,040		$	5,244,180
%	0.05		%	0.01		%	0.22		%		0.40		%	0.67		%	99.33		%	100.00		%

(1)Includes $4.5 million and $7.1 million of loans at September 30, 2021 and December 31, 2020, respectively, where a fair value option election was made at the time of origination and, therefore, are carried at fair value with changes in fair value recognized in our consolidated income statements.

(2)FHA-insured and VA-guaranteed single family loans that are 90 days or more past due are maintained on accrual status if they are determined to have little to no risk of loss.

(3)Includes loans whose repayments are insured by the FHA or guaranteed by the VA or SBA of $10.8 million and $14.7 million at September 30, 2021 and December 31, 2020, respectively.

The following tables present information about troubled debt restructuring ("TDR") activity for the periods indicated:

	Quarter Ended September 30, 2021					Nine Months Ended September 30, 2021
(dollars in thousands)	Number of loan modifications	Recorded investment		Related charge- offs		Number of loan modifications	Recorded investment		Related charge- offs
Consumer loans
Single family
Interest rate reduction	10	$	3,284	$	—	15	$	4,599	$	—
Payment restructure	4	1,005		—		6	2,145
	14	4,289		—		21	6,744		—
Total loans
Interest rate reduction	10	3,284		—		15	4,599		—
Payment restructure	4	1,005		—		6	2,145		—
Total	14	$	4,289	$	—	21	$	6,744	$	—

	Quarter Ended September 30, 2020					Nine Months Ended September 30, 2020
(dollars in thousands)	Number of loan modifications	Recorded investment		Related charge- offs		Number of loan modifications	Recorded investment		Related charge- offs
Commercial and industrial loans
Owner occupied commercial real estate
Payment restructure	—	$	—	$	—	1	$	678	$	—
Commercial business
Payment restructure	—	—		—		1	1,125		—
Total commercial and industrial
Payment restructure	—	—		—		2	1,803		—
Total	—	—		—		2	1,803		—
Consumer loans
Single family
Interest rate reduction	8	1,642		—		23	4,878		—
Payment restructure	1	411		—		10	2,067		—
Total	9	2,053		—		33	6,945		—
Total loans
Interest rate reduction	8	1,642		—		23	4,878		—
Payment restructure	1	411		—		12	3,870		—
Total	9	$	2,053	$	—	35	$	8,748	$	—

A TDR loan is considered re-defaulted when it becomes doubtful that the objectives of the modifications will be met, generally when a consumer loan TDR becomes 60 days or more past due on principal or interest payments or when a commercial loan TDR becomes 90 days or more past due on principal or interest payments. The following table presents loans that were modified as TDRs within the previous 12 months and subsequently re-defaulted for the periods indicated:

	Quarter Ended September 30,
	2021			2020
(dollars in thousands)	Number of loan relationships that re-defaulted	Recorded investment		Number of loan relationships that re-defaulted	Recorded investment
Consumer loans - single family	2	$	422	6	$	1,038
Total	2	$	422	6	$	1,038

	Nine Months Ended September 30,
	2021			2020
(dollars in thousands)	Number of loan relationships that re-defaulted	Recorded investment		Number of loan relationships that re-defaulted	Recorded investment
Commercial and industrial loans
Owner occupied commercial real estate	1	$	678	—	$	—
	1	678		—	—
Consumer loans
Consumer loans - single family	7	$	1,764	16	$	3,237
	7	1,764		16	3,237
Total	8	$	2,442	16	$	3,237

The CARES Act provides temporary relief from the accounting and disclosure requirements for TDRs for certain loan modifications that are the result of a hardship that is related, either directly or indirectly, to the COVID-19 pandemic. In addition, interagency guidance issued by federal banking regulators and endorsed by the FASB staff has indicated that borrowers who receive relief are not experiencing financial difficulty if they meet the following qualifying criteria:

•The modification is in response to the National Emergency related to the COVID-19 pandemic;

•The borrower was current at the time the modification program was implemented; and

•The modification is short-term

We have elected to apply temporary relief under Section 4013 of the CARES Act to certain eligible modifications and will not treat qualifying loan modifications as TDRs for accounting or disclosure purposes. Additionally, eligible short-term loan modifications subject to the practical expedient in the interagency guidance will not be treated as TDRs for accounting or disclosure purposes if they qualify. 

As of September 30, 2021, excluding any SBA guaranteed loans or single family loans that are guaranteed by FHA or VA, the Company has outstanding balances of $43 million on 100 loans that were approved for and are still in forbearance under this program, including $18 million in commercial loans and $25 million in single family and consumer loans.