Loans and Lease Finance Receivables and Allowance for Credit Losses (Tables)

6 Months Ended

Jun. 30, 2022

Receivables [Abstract]

Summary of Components of Loans and Lease Finance Receivables, Excluding PCI Loans

The following table provides a summary of total loans and lease finance receivables by type.

	June 30, 2022			December 31, 2021
	(Dollars in thousands)
Commercial real estate	$	6,643,628		$	5,789,730
Construction		60,584			62,264
SBA		297,109			288,600
SBA - Paycheck Protection Program (PPP)		66,955			186,585
Commercial and industrial		941,595			813,063
Dairy & livestock and agribusiness		273,594			386,219
Municipal lease finance receivables		64,437			45,933
SFR mortgage		260,218			240,654
Consumer and other loans		84,109			74,665
Total loans, at amortized cost		8,692,229			7,887,713
Less: Allowance for credit losses		(80,222	)		(65,019	)
Total loans and lease finance receivables, net	$	8,612,007		$	7,822,694

Summary of loans by type and origination year, according to our internal risk ratings

The following table summarizes loans by type and origination year, including acquired Suncrest loans in the year of origination, according to our internal risk ratings as of the dates presented.

	Origination Year												Revolving loans amortized		Revolving loans converted to
June 30, 2022	2022		2021		2020		2019		2018		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Commercial real estate    loans:
Risk Rating:
Pass	$	764,972	$	1,240,209	$	995,702	$	621,334	$	551,546	$	2,073,267	$	184,480	$	33,667	$	6,465,177
Special Mention		507		6,319		10,283		17,585		14,802		77,666		2,033		5,500		134,695
Substandard		-		3,521		16,244		574		6,962		16,455		-		-		43,756
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Commercial real    estate loans:	$	765,479	$	1,250,049	$	1,022,229	$	639,493	$	573,310	$	2,167,388	$	186,513	$	39,167	$	6,643,628
Construction loans:
Risk Rating:
Pass	$	6,679	$	15,793	$	14,730	$	-	$	1,391	$	-	$	17,710	$	-	$	56,303
Special Mention		-		-		-		-		4,281		-		-		-		4,281
Substandard		-		-		-		-		-		-		-		-		-
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Construction    loans:	$	6,679	$	15,793	$	14,730	$	-	$	5,672	$	-	$	17,710	$	-	$	60,584
SBA loans:
Risk Rating:
Pass	$	35,072	$	57,279	$	35,800	$	11,696	$	30,565	$	108,573	$	193	$	-	$	279,178
Special Mention		-		-		100		1,335		1,391		5,137		-		-		7,963
Substandard		-		-		-		-		581		9,387		-		-		9,968
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total SBA loans:	$	35,072	$	57,279	$	35,900	$	13,031	$	32,537	$	123,097	$	193	$	-	$	297,109
SBA - PPP loans:
Risk Rating:
Pass	$	-	$	61,488	$	5,332	$	-	$	-	$	-	$	-	$	-	$	66,820
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		135		-		-		-		-		-		-		135
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total SBA - PPP loans:	$	-	$	61,623	$	5,332	$	-	$	-	$	-	$	-	$	-	$	66,955
Commercial and    industrial loans:
Risk Rating:
Pass	$	77,558	$	157,979	$	87,899	$	111,278	$	49,685	$	103,779	$	313,334	$	7,516	$	909,028
Special Mention		-		1,192		1,709		3,583		1,689		186		16,190		382		24,931
Substandard		-		246		-		184		4,196		686		1,681		643		7,636
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Commercial and    industrial loans:	$	77,558	$	159,417	$	89,608	$	115,045	$	55,570	$	104,651	$	331,205	$	8,541	$	941,595

	Origination Year												Revolving loans amortized		Revolving loans converted to
June 30, 2022	2022		2021		2020		2019		2018		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Dairy & livestock and    agribusiness loans:
Risk Rating:
Pass	$	1,161	$	5,607	$	1,769	$	1,038	$	856	$	1,291	$	245,027	$	-	$	256,749
Special Mention		-		-		209		-		-		-		3,949		639		4,797
Substandard		-		-		-		-		1,794		900		3,502		5,852		12,048
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Dairy & livestock    and agribusiness    loans:	$	1,161	$	5,607	$	1,978	$	1,038	$	2,650	$	2,191	$	252,478	$	6,491	$	273,594
Municipal lease finance    receivables loans:
Risk Rating:
Pass	$	170	$	12,965	$	7,281	$	4,419	$	5,136	$	33,976	$	-	$	-	$	63,947
Special Mention		-		-		-		-		-		301		-		-		301
Substandard		-		-		-		-		-		189		-		-		189
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Municipal lease    finance receivables    loans:	$	170	$	12,965	$	7,281	$	4,419	$	5,136	$	34,466	$	-	$	-	$	64,437
SFR mortgage loans:
Risk Rating:
Pass	$	46,924	$	47,567	$	46,828	$	35,966	$	17,169	$	62,879	$	500	$	-	$	257,833
Special Mention		-		-		955		-		-		-		-		-		955
Substandard		-		-		-		-		-		1,031		-		399		1,430
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total SFR mortgage    loans:	$	46,924	$	47,567	$	47,783	$	35,966	$	17,169	$	63,910	$	500	$	399	$	260,218
Consumer and other    loans:
Risk Rating:
Pass	$	9,012	$	4,162	$	1,580	$	1,172	$	300	$	1,403	$	61,490	$	2,690	$	81,809
Special Mention		-		701		-		-		-		-		591		-		1,292
Substandard		-		-		-		-		-		15		97		896		1,008
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Consumer and    other loans:	$	9,012	$	4,863	$	1,580	$	1,172	$	300	$	1,418	$	62,178	$	3,586	$	84,109
Total Loans:
Risk Rating:
Pass	$	941,548	$	1,603,049	$	1,196,921	$	786,903	$	656,648	$	2,385,168	$	822,734	$	43,873	$	8,436,844
Special Mention		507		8,212		13,256		22,503		22,163		83,290		22,763		6,521		179,215
Substandard		-		3,902		16,244		758		13,533		28,663		5,280		7,790		76,170
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Loans:	$	942,055	$	1,615,163	$	1,226,421	$	810,164	$	692,344	$	2,497,121	$	850,777	$	58,184	$	8,692,229

7

	Origination Year												Revolving loans amortized		Revolving loans converted to
December 31, 2021	2021		2020		2019		2018		2017		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Commercial real estate    loans:
Risk Rating:
Pass	$	1,137,714	$	963,697	$	591,202	$	534,468	$	484,721	$	1,704,267	$	156,841	$	33,564	$	5,606,474
Special Mention		3,133		20,640		14,477		16,097		43,262		44,045		6,970		6,800		155,424
Substandard		-		-		2,859		6,933		4,646		7,329		5,951		114		27,832
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Commercial real    estate loans:	$	1,140,847	$	984,337	$	608,538	$	557,498	$	532,629	$	1,755,641	$	169,762	$	40,478	$	5,789,730
Construction loans:
Risk Rating:
Pass	$	10,511	$	15,896	$	7,236	$	-	$	-	$	-	$	25,262	$	-	$	58,905
Special Mention		-		-		-		3,359		-		-		-		-		3,359
Substandard		-		-		-		-		-		-		-		-		-
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Construction    loans:	$	10,511	$	15,896	$	7,236	$	3,359	$	-	$	-	$	25,262	$	-	$	62,264
SBA loans:
Risk Rating:
Pass	$	70,929	$	36,468	$	11,129	$	36,068	$	38,504	$	78,527	$	-	$	-	$	271,625
Special Mention		-		-		-		-		4,056		2,700		-		-		6,756
Substandard		-		-		-		785		4,092		5,342		-		-		10,219
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total SBA loans:	$	70,929	$	36,468	$	11,129	$	36,853	$	46,652	$	86,569	$	-	$	-	$	288,600
SBA - PPP loans:
Risk Rating:
Pass	$	183,614	$	2,969	$	-	$	-	$	-	$	-	$	-	$	-	$	186,583
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		2		-		-		-		-		-		-		2
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total SBA - PPP loans:	$	183,614	$	2,971	$	-	$	-	$	-	$	-	$	-	$	-	$	186,585
Commercial and    industrial loans:
Risk Rating:
Pass	$	145,494	$	81,944	$	126,647	$	54,690	$	32,455	$	73,600	$	267,659	$	6,992	$	789,481
Special Mention		1,556		1,929		127		1,396		394		26		9,369		177		14,974
Substandard		244		6		602		1,712		505		475		1,991		3,073		8,608
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Commercial and    industrial loans:	$	147,294	$	83,879	$	127,376	$	57,798	$	33,354	$	74,101	$	279,019	$	10,242	$	813,063

	Origination Year												Revolving loans amortized		Revolving loans converted to
December 31, 2021	2021		2020		2019		2018		2017		Prior		cost basis		term loans		Total
	(Dollars in thousands)
Dairy & livestock and    agribusiness loans:
Risk Rating:
Pass	$	1,756	$	942	$	1,285	$	1,035	$	95	$	295	$	364,312	$	454	$	370,174
Special Mention		1,052		-		-		-		-		-		6,979		1,301		9,332
Substandard		-		-		-		37		-		-		-		6,676		6,713
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Dairy & livestock    and agribusiness    loans:	$	2,808	$	942	$	1,285	$	1,072	$	95	$	295	$	371,291	$	8,431	$	386,219
Municipal lease finance    receivables loans:
Risk Rating:
Pass	$	9,310	$	7,666	$	-	$	279	$	9,528	$	18,811	$	-	$	-	$	45,594
Special Mention		-		-		-		-		-		339		-		-		339
Substandard		-		-		-		-		-		-		-		-		-
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Municipal lease    finance receivables    loans:	$	9,310	$	7,666	$	-	$	279	$	9,528	$	19,150	$	-	$	-	$	45,933
SFR mortgage loans:
Risk Rating:
Pass	$	48,813	$	49,261	$	41,776	$	19,877	$	16,046	$	61,965	$	451	$	-	$	238,189
Special Mention		8		-		-		-		-		-		-		-		8
Substandard		-		-		-		-		-		2,052		-		405		2,457
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total SFR mortgage    loans:	$	48,821	$	49,261	$	41,776	$	19,877	$	16,046	$	64,017	$	451	$	405	$	240,654
Consumer and other    loans:
Risk Rating:
Pass	$	5,145	$	1,947	$	1,415	$	469	$	386	$	1,611	$	58,060	$	3,378	$	72,411
Special Mention		839		-		-		-		-		150		591		403		1,983
Substandard		-		-		-		-		-		15		5		251		271
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Consumer and    other loans:	$	5,984	$	1,947	$	1,415	$	469	$	386	$	1,776	$	58,656	$	4,032	$	74,665
Total Loans:
Risk Rating:
Pass	$	1,613,286	$	1,160,790	$	780,690	$	646,886	$	581,735	$	1,939,076	$	872,585	$	44,388	$	7,639,436
Special Mention		6,588		22,569		14,604		20,852		47,712		47,260		23,909		8,681		192,175
Substandard		244		8		3,461		9,467		9,243		15,213		7,947		10,519		56,102
Doubtful & Loss		-		-		-		-		-		-		-		-		-
Total Loans:	$	1,620,118	$	1,183,367	$	798,755	$	677,205	$	638,690	$	2,001,549	$	904,441	$	63,588	$	7,887,713

Schedule of Balance and Activity Related to Allowance for Loan Losses for Held-for-Investment Loans by Type

The following tables present the balance and activity related to the allowance for credit losses for held-for-investment loans by type for the periods presented.

	Three Months Ended June 30, 2022
	Ending Balance March 31, 2022		Charge-offs			Recoveries		Provision for (Recapture of)  Credit Losses			Ending Balance June 30, 2022
	(Dollars in thousands)
Commercial real estate	$	57,835	$	-		$	-	$	3,678		$	61,513
Construction		988		-			3		71			1,062
SBA		2,824		-			53		(264	)		2,613
Commercial and industrial		6,831		(6	)		453		(84	)		7,194
Dairy & livestock and agribusiness		6,703		-			2		127			6,832
Municipal lease finance receivables		152		-			-		31			183
SFR mortgage		227		-			-		27			254
Consumer and other loans		559		(2	)		-		14			571
Total allowance for credit losses	$	76,119	$	(8	)	$	511	$	3,600		$	80,222

	Three Months Ended June 30, 2021
	Ending Balance March 31, 2021		Charge-offs			Recoveries		(Recapture of) Provision for Credit Losses			Ending Balance June 30, 2021
	(Dollars in thousands)
Commercial real estate	$	56,572	$	-		$	-	$	(1,372	)	$	55,200
Construction		1,878		-			41		(94	)		1,825
SBA		2,512		-			4		30			2,546
Commercial and industrial		6,439		(500	)		2		(274	)		5,667
Dairy & livestock and agribusiness		2,722		-			-		53			2,775
Municipal lease finance receivables		35		-			-		32			67
SFR mortgage		298		-			-		(14	)		284
Consumer and other loans		1,349		(10	)		-		(361	)		978
Total allowance for credit losses	$	71,805	$	(510	)	$	47	$	(2,000	)	$	69,342

	Six Months Ended June 30, 2022
	Ending Balance December 31, 2021		Charge-offs			Recoveries		Initial ACL for PCD Loans at Acquisition		Provision Recorded at Acquisition		Provision for (Recapture of) Credit Losses			Ending Balance June 30, 2022
	(Dollars in thousands)
Commercial real estate	$	50,950	$	-		$	-	$	5,086	$	4,127	$	1,350		$	61,513
Construction		765		-			6		122		58		111			1,062
SBA		2,668		-			58		62		64		(239	)		2,613
Commercial and industrial		6,669		(21	)		456		500		508		(918	)		7,194
Dairy & livestock and agribusiness		3,066		-			2		2,832		149		783			6,832
Municipal lease finance receivables		100		-			-		3		26		54			183
SFR mortgage		188		-			-		-		-		66			254
Consumer and other loans		613		(3	)		-		-		-		(39	)		571
Total allowance for credit losses	$	65,019	$	(24	)	$	522	$	8,605	$	4,932	$	1,168		$	80,222

	Six Months Ended June 30, 2021
	Ending Balance December 31, 2020		Charge-offs			Recoveries		(Recapture of) Provision for Credit Losses			Ending Balance June 30, 2021
	(Dollars in thousands)
Commercial real estate	$	75,439	$	-		$	-	$	(20,239	)	$	55,200
Construction		1,934		-			44		(153	)		1,825
SBA		2,992		-			8		(454	)		2,546
Commercial and industrial		7,142		(2,975	)		4		1,496			5,667
Dairy & livestock and agribusiness		3,949		-			-		(1,174	)		2,775
Municipal lease finance receivables		74		-			-		(7	)		67
SFR mortgage		367		-			79		(162	)		284
Consumer and other loans		1,795		(10	)		-		(807	)		978
Total allowance for credit losses	$	93,692	$	(2,985	)	$	135	$	(21,500	)	$	69,342

Summary of pledged assets not separately reported on statement of financial position

The following table presents the recorded investment in collateral-dependent loans by type of loans as of the dates presented.

	June 30, 2022						Number of Loans
	Real Estate		Business Assets		Other		Dependent on Collateral
	(Dollars in thousands)
Commercial real estate	$	9,160	$	-	$	-		9
Construction		-		-		-		-
SBA		233		841		-		8
SBA - PPP		-		-		-		-
Commercial and industrial		457		2,998		79		15
Dairy & livestock and agribusiness		699		17		2,638		6
Municipal lease finance receivables		-		-		-		-
SFR mortgage		-		-		-		-
Consumer and other loans		37		-		-		1
Total collateral-dependent loans	$	10,586	$	3,856	$	2,717		39

	December 31, 2021						Number of Loans
	Real Estate		Business Assets		Other		Dependent on Collateral
	(Dollars in thousands)
Commercial real estate	$	6,001	$	-	$	-		6
Construction		-		-		-		-
SBA		405		517		112		10
SBA - PPP		-		-		-		-
Commercial and industrial		688		5,133		96		19
Dairy & livestock and agribusiness		-		-		-		-
Municipal lease finance receivables		-		-		-		-
SFR mortgage		380		-		-		2
Consumer and other loans		158		-		-		2
Total collateral-dependent loans	$	7,632	$	5,650	$	208		39

Summary of Activity Related to Troubled Debt Restructurings

The following table provides a summary of the activity related to TDRs for the periods presented.

	Three Months Ended June 30,						Six Months Ended June 30,
	2022			2021			2022			2021
	(Dollars in thousands)
Performing TDRs:
Beginning balance	$	5,259		$	5,813		$	5,293		$	2,159
New modifications		-			2,453			-			7,096
Payoffs/payments, net and other		(61	)		(51	)		(95	)		(1,040	)
TDRs returned to accrual status		-			-			-			-
TDRs placed on nonaccrual status		-			-			-			-
Ending balance	$	5,198		$	8,215		$	5,198		$	8,215
Nonperforming TDRs:
Beginning balance	$	-		$	-		$	-		$	-
New modifications		-			-			-			-
Charge-offs		-			-			-			-
Payoffs/payments, net and other		-			-			-			-
TDRs returned to accrual status		-			-			-			-
TDRs placed on nonaccrual status		-			-			-			-
Ending balance	$	-		$	-		$	-		$	-
Total TDRs	$	5,198		$	8,215		$	5,198		$	8,215

Summary of Loans Modified as Troubled Debt Restructurings

The following tables summarize loans modified as TDRs for the period presented.

Modifications (1)

	For the Six Months Ended June 30, 2022
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at June 30, 2021		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial real estate:
Interest rate reduction		-	$	-	$	-	$	-	$	-
Change in amortization period    or maturity		-		-		-		-		-
Commercial and industrial:
Interest rate reduction		-		-		-		-		-
Change in amortization period    or maturity		-		-		-		-		-
SFR mortgage:
Interest rate reduction		-		-		-		-		-
Change in amortization period    or maturity		-		-		-		-		-
Total loans		-	$	-	$	-	$	-	$	-

	For the Three Months Ended June 30, 2021
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at June 30, 2021		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial real estate:
Interest rate reduction		1	$	2,453	$	2,453	$	2,450	$	-
Change in amortization period    or maturity		-		-		-		-		-
Commercial and industrial:
Interest rate reduction		-		-		-		-		-
Change in amortization period    or maturity		-		-		-		-		-
SFR mortgage:
Interest rate reduction		-		-		-		-		-
Change in amortization period    or maturity		-		-		-		-		-
Total loans		1	$	2,453	$	2,453	$	2,450	$	-

	For the Six Months Ended June 30, 2021
	Number of Loans		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Outstanding Recorded Investment at June 30, 2021		Financial Effect Resulting From Modifications (2)
	(Dollars in thousands)
Commercial real estate:
Interest rate reduction		1	$	2,453	$	2,453	$	2,450	$	-
Change in amortization period    or maturity		-		-		-		-		-
Commercial and industrial:
Interest rate reduction		-		-		-		-		-
Change in amortization period    or maturity		2		4,643		4,643		4,443		-
SFR mortgage:
Interest rate reduction		-		-		-		-		-
Change in amortization period    or maturity		-		-		-		-		-
Total loans		3	$	7,096	$	7,096	$	6,893	$	-

(1)The tables above exclude modified loans that were paid off prior to the end of the period.

(2)Financial effects resulting from modifications represent charge-offs and current allowance for credit losses at modification date.