Allowance for Credit Losses

6 Months Ended

Jun. 30, 2021

Allowance For Loan And Lease Losses [Abstract]

Allowance for Credit Losses

Allowance for Credit Losses

For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities:

	Allowance for credit losses – Three months ended June 30, 2021
(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (benefit)		Ending  Balance
Commercial real estate:
CRE non-owner occupied	$	26,434	$	—	$	—	$	(406)	$	26,028
CRE owner occupied	9,874		—		—		589		10,463
Multifamily	12,371		—		—		825		13,196
Farmland	1,724		—		—		226		1,950
Total commercial real estate loans	50,403		—		—		1,234		51,637
Consumer:
SFR 1-4 1st DT liens	10,665		—		1		(37)		10,629
SFR HELOCs and junior liens	11,079		—		512		(890)		10,701
Other	2,860		(86)		59		(213)		2,620
Total consumer loans	24,604		(86)		572		(1,140)		23,950
Commercial and industrial	4,464		(301)		79		269		4,511
Construction	5,476		—		—		(525)		4,951
Agriculture production	988		—		2		17		1,007
Leases	6		—		—		—		6
Allowance for credit losses on loans	85,941		(387)		653		(145)		86,062
Reserve for unfunded commitments	3,580		—		—		(115)		3,465
Total	$	89,521	$	(387)	$	653	$	(260)	$	89,527

	Allowance for credit losses – Six months ended June 30, 2021
(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision (benefit)		Ending  Balance
Commercial real estate:
CRE non-owner occupied	$	29,380	$	—	$	2	$	(3,354)	$	26,028
CRE owner occupied	10,861		—		1		(399)		10,463
Multifamily	11,472		—		—		1,724		13,196
Farmland	1,980		—		—		(30)		1,950
Total commercial real estate loans	53,693		—		3		(2,059)		51,637
Consumer:
SFR 1-4 1st DT liens	10,117		—		11		501		10,629
SFR HELOCs and junior liens	11,771		—		797		(1,867)		10,701
Other	3,260		(279)		165		(526)		2,620
Total consumer loans	25,148		(279)		973		(1,892)		23,950
Commercial and industrial	4,252		(334)		215		378		4,511
Construction	7,540		—		—		(2,589)		4,951
Agriculture production	1,209		—		22		(224)		1,007
Leases	5		—		—		1		6
Allowance for credit losses on loans	91,847		(613)		1,213		(6,385)		86,062
Reserve for unfunded commitments	3,400		—		—		65		3,465
Total	$	95,247	$	(613)	$	1,213	$	(6,320)	$	89,527

In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance have been statistically correlated with historical credit losses and various econometrics, including California unemployment, gross domestic product, and corporate bond yields. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results.

The Company utilizes a forecast period of approximately eight quarters and obtains the forecast data from publicly available sources as of the balance sheet date. This forecast data continues to evolve and included significant shifts in the magnitude of changes for both the unemployment and GDP factors leading up to the balance sheet date. Management noted that the majority of economic forecasts utilized

in the ACL calculation seem to have rebounded slightly in the current quarter, coinciding with the widespread availability of vaccines, continued easing of occupancy and social distancing restrictions, and continued government stimulus efforts. Management believes that the allowance for credit losses at June 30, 2021 appropriately reflected expected credit losses inherent in the loan portfolio at that date.

	Allowance for credit losses – Year ended December 31, 2020
(in thousands)	Beginning Balance		Adoption of CECL		Charge-offs		Recoveries		Provision (benefit)		Ending Balance
Commercial real estate:
CRE non-owner occupied	$	5,948	$	6,701	$	—	$	198	$	16,533	$	29,380
CRE owner occupied	2,027		2,281		—		28		6,525		10,861
Multifamily	3,352		2,281		—		—		5,839		11,472
Farmland	668		585		(182)		—		909		1,980
Total commercial real estate loans	11,995		11,848		(182)		226		29,806		53,693
Consumer:
SFR 1-4 1st DT liens	2,306		2,675		(13)		416		4,733		10,117
SFR HELOCs and junior liens	6,183		4,638		(116)		304		762		11,771
Other	1,595		971		(670)		347		1,017		3,260
Total consumer loans	10,084		8,284		(799)		1,067		6,512		25,148
Commercial and industrial	4,867		(1,961)		(774)		568		1,552		4,252
Construction	3,388		933		—		—		3,219		7,540
Agriculture production	261		(179)		—		24		1,103		1,209
Leases	21		(12)		—		—		(4)		5
Allowance for credit losses on loans	30,616		18,913		(1,755)		1,885		42,188		91,847
Reserve for unfunded commitments	2,775		—		—		—		625		3,400
Total	$	33,391	$	18,913	$	(1,755)	$	1,885	$	42,813	$	95,247

On January 1, 2020, the Company adopted ASU 2016-03 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which replaces the incurred loss methodology that is referred to as the current expected credit loss (CECL) methodology. The Company recognized an increase in the ACL for loans totaling $18,913,000, including a reclassification of $481,000 from discounts on acquired loans to the allowance for credit losses, as a cumulative effect adjustment from change in accounting policies, with a corresponding decrease in retained earnings, net of $5,449,000 in taxes of $12,983,000.

	Allowance for credit losses – Three months ended June 30, 2020
(in thousands)	Beginning Balance		Charge-offs		Recoveries		Provision		Ending Balance
Commercial real estate:
CRE non-owner occupied	$	18,034	$	—	$	5	$	8,052	$	26,091
CRE owner occupied	5,366		—		4		3,340		8,710
Multifamily	5,140		—		—		3,441		8,581
Farmland	713		—		—		755		1,468
Total commercial real estate loans	29,253		—		9		15,588		44,850
Consumer:
SFR 1-4 1st DT liens	5,650		(11)		2		2,374		8,015
SFR HELOCs and junior liens	11,196		(23)		92		843		12,108
Other	2,746		(243)		72		467		3,042
Total consumer loans	19,592		(277)		166		3,684		23,165
Commercial and industrial	3,867		(214)		55		310		4,018
Construction	4,595		—		—		2,180		6,775
Agriculture production	593		—		—		326		919
Leases	11		—		—		1		12
Allowance for credit losses on loans	$	57,911	$	(491)	$	230	$	22,089	$	79,739
Reserve for unfunded commitments	2,845		—		—		154		2,999
Total	$	60,756	$	(491)	$	230	$	22,243	$	82,738

	Allowance for credit losses – Six months ended June 30, 2020
(in thousands)	Beginning Balance		Adoption of CECL		Charge-offs		Recoveries		Provision		Ending Balance
Commercial real estate:
CRE non-owner occupied	$	5,948	$	6,701	$	—	$	193	$	13,249	$	26,091
CRE owner occupied	2,027		2,281		—		9		4,393		8,710
Multifamily	3,352		2,281		—		—		2,948		8,581
Farmland	668		585		—		—		215		1,468
Total commercial real estate loans	11,995		11,848		—		202		20,805		44,850
Consumer:
SFR 1-4 1st DT liens	2,306		2,675		(11)		412		2,633		8,015
SFR HELOCs and junior liens	6,183		4,638		(23)		140		1,170		12,108
Other	1,595		971		(373)		167		682		3,042
Total consumer loans	10,084		8,284		(407)		719		4,485		23,165
Commercial and industrial	4,867		(1,961)		(594)		181		1,525		4,018
Construction	3,388		933		—		—		2,454		6,775
Agriculture production	261		(179)		—		20		817		919
Leases	21		(12)		—		—		3		12
Allowance for credit losses on loans	30,616		18,913		(1,001)		1,122		30,089		79,739
Reserve for unfunded commitments	2,775		—		—		—		224		2,999
Total	$	33,391	$	18,913	$	(1,001)	$	1,122	$	30,313	$	82,738

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio. The Company analyzes loans individually to classify the loans as to credit risk and grading. This analysis is performed annually for all outstanding balances greater than $1,000,000 and non-homogeneous loans, such as commercial real estate loans, unless other indicators, such as delinquency, trigger more frequent evaluation. Loans below the $1,000,000 threshold and homogenous in nature are evaluated as needed for proper grading based on delinquency and borrower credit scores.

The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows:

•Pass– This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital.

•Special Mention– This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention.

•Substandard– This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well-defined workout/rehabilitation program.

•Doubtful– This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans.

•Loss– This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified.

Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the period indicated:

	Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2021
(in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate:
CRE non-owner occupied risk ratings
Pass	$	89,643	$	120,974	$	206,093	$	137,384	$	246,584	$	596,837	$	72,393	$	—	$	1,469,908
Special Mention	—		—		6,191		11,613		3,667		17,202		10,760		—		49,433
Substandard	—		—		—		1,416		568		12,931		—		—		14,915
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total CRE non-owner occupied risk ratings	$	89,643	$	120,974	$	212,284	$	150,413	$	250,819	$	626,970	$	83,153	$	—	$	1,534,256

Commercial real estate:
CRE owner occupied risk ratings
Pass	$	89,094	$	99,949	$	68,668	$	55,048	$	55,684	$	248,033	$	19,755	$	—	$	636,231
Special Mention	—		—		—		288		6,797		8,447		—		—		15,532
Substandard	—		—		1,483		1,262		465		4,975		—		—		8,185
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total CRE owner occupied risk ratings	$	89,094	$	99,949	$	70,151	$	56,598	$	62,946	$	261,455	$	19,755	$	—	$	659,948

Commercial real estate:
Multifamily risk ratings
Pass	$	176,116	$	86,806	$	113,996	$	121,226	$	91,054	$	168,088	$	24,533	$	—	$	781,819
Special Mention	—		9,385		—		—		—		24,669		7,723		—		41,777
Substandard	—		—		4,334		—		—		171		—		—		4,505
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total multifamily loans	$	176,116	$	96,191	$	118,330	$	121,226	$	91,054	$	192,928	$	32,256	$	—	$	828,101

Commercial real estate:
Farmland risk ratings
Pass	$	26,440	$	18,526	$	21,676	$	18,051	$	8,397	$	21,476	$	44,775	$	—	$	159,341
Special Mention	—		—		—		—		1,197		3,316		1,775		—		6,288
Substandard	—		—		3,267		—		590		1,111		1,434		—		6,402
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total farmland loans	$	26,440	$	18,526	$	24,943	$	18,051	$	10,184	$	25,903	$	47,984	$	—	$	172,031

Consumer loans:
SFR 1-4 1st DT liens risk ratings
Pass	$	173,937	$	182,911	$	59,675	$	39,522	$	41,506	$	139,178	$	—	$	4,812	$	641,541
Special Mention	—		—		288		1,154		420		2,779		—		977		5,618
Substandard	—		—		—		1,131		273		5,440		—		370		7,214
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total SFR 1st DT liens	$	173,937	$	182,911	$	59,963	$	41,807	$	42,199	$	147,397	$	—	$	6,159	$	654,373

	Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2021
(in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Consumer loans:
SFR HELOCs and Junior Liens
Pass	$	624	$	—	$	—	$	—	$	—	$	242	$	300,548	$	11,338	$	312,752
Special Mention	—		—		—		—		—		92		4,386		884		5,362
Substandard	—		—		—		—		—		17		5,460		1,536		7,013
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total SFR HELOCs and Junior Liens	$	624	$	—	$	—	$	—	$	—	$	351	$	310,394	$	13,758	$	325,127

Consumer loans:
Other risk ratings
Pass	$	12,077	$	19,995	$	22,680	$	10,425	$	2,749	$	1,367	$	576	$	—	$	69,869
Special Mention	—		52		211		243		98		67		72		—		743
Substandard	—		67		88		126		73		132		11		—		497
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total other consumer loans	$	12,077	$	20,114	$	22,979	$	10,794	$	2,920	$	1,566	$	659	$	—	$	71,109

Commercial and industrial loans:
Commercial and industrial risk ratings
Pass	$	202,893	$	73,077	$	40,966	$	14,631	$	9,585	$	9,484	$	94,260	$	840	$	445,736
Special Mention	—		29		119		550		116		161		429		—		1,404
Substandard	—		—		166		102		1,011		684		2,887		79		4,929
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans	$	202,893	$	73,106	$	41,251	$	15,283	$	10,712	$	10,329	$	97,576	$	919	$	452,069

Construction loans:
Construction risk ratings
Pass	$	17,725	$	88,892	$	51,436	$	10,722	$	2,092	$	23,539	$	1	$	—	$	194,407
Special Mention	—		—		—		—		346		1,460		—		—		1,806
Substandard	—		—		—		—		—		4,501		—		—		4,501
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total construction loans	$	17,725	$	88,892	$	51,436	$	10,722	$	2,438	$	29,500	$	1	$	—	$	200,714

Agriculture production loans:
Agriculture production risk ratings
Pass	$	1,241	$	1,012	$	1,767	$	1,189	$	1,229	$	1,006	$	32,132	$	—	$	39,576
Special Mention	—		—		—		181		—		74		2,016		—		2,271
Substandard	—		—		—		—		—		—		120		—		120
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total agriculture production loans	$	1,241	$	1,012	$	1,767	$	1,370	$	1,229	$	1,080	$	34,268	$	—	$	41,967

	Term Loans Amortized Cost Basis by Origination Year – As of June 30, 2021
(in thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Leases:
Lease risk ratings
Pass	$	5,199	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$5,199
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total leases	$	5,199	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	5,199

Total loans outstanding:
Risk ratings
Pass	$	794,989	$	692,142	$	586,957	$	408,198	$	458,880	$	1,209,250	$	588,973	$	16,990	$	4,756,379
Special Mention	—		9,466		6,809		14,029		12,641		58,267		27,161		1,861		130,234
Substandard	—		67		9,338		4,037		2,980		29,962		9,912		1,985		58,281
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total loans outstanding	$	794,989	$	701,675	$	603,104	$	426,264	$	474,501	$	1,297,479	$	626,046	$	20,836	$	4,944,894

	Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate:
CRE non-owner occupied risk ratings
Pass	$	120,520	$	207,899	$	155,730	$	256,677	$	179,523	$	460,644	$	76,730	$	—	$	1,457,723
Special Mention	—		7,455		11,692		5,407		15,773		18,832		12,205		—		71,364
Substandard	—		—		1,449		584		2,147		2,288		—		—		6,468
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total CRE non-owner occupied risk ratings	$	120,520	$	215,354	$	168,871	$	262,668	$	197,443	$	481,764	$	88,935	$	—	$	1,535,555

Commercial real estate:
CRE owner occupied risk ratings
Pass	$	105,896	$	75,144	$	53,816	$	58,371	$	54,541	$	227,828	$	25,508	$	—	$	601,104
Special Mention	—		—		288		7,451		2,955		6,140		—		—		16,834
Substandard	—		1,533		1,301		475		1,306		1,822		—		—		6,437
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total CRE owner occupied risk ratings	$	105,896	$	76,677	$	55,405	$	66,297	$	58,802	$	235,790	$	25,508	$	—	$	624,375

Commercial real estate:
Multifamily risk ratings
Pass	$	77,646	$	118,725	$	113,882	$	70,112	$	67,457		$	123,518	$	19,007	$	—	$	590,347
Special Mention	9,441		—		—		603		24,687			772		9,259		—		44,762
Substandard	—		4,371		—		—		—		—	—		—		—		4,371
Doubtful/Loss	—		—		—		—		—			—		—		—		—
Total multifamily loans	$	87,087	$	123,096	$	113,882	$	70,715	$	92,144		$	124,290	$	28,266	$	—	$	639,480

	Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Commercial real estate:
Farmland risk ratings
Pass	$	17,640	$	25,003	$	19,148	$	12,834	$	7,377	$	17,129	$	39,411	$	—	$	138,542
Special Mention	—		2,567		—		1,271		227		3,107		2,258		—		9,430
Substandard	—		700		—		602		—		1,214		2,004		—		4,520
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total farmland loans	$	17,640	$	28,270	$	19,148	$	14,707	$	7,604	$	21,450	$	43,673	$	—	$	152,492

Consumer loans:
SFR 1-4 1st DT liens risk ratings
Pass	$	183,719	$	80,717	$	36,342	$	53,001	$	46,467	$	126,465	$	76	$	5,507	$	532,294
Special Mention	—		290		684		110		15		2,936		—		934		4,969
Substandard	—		—		1,174		929		935		5,763		—		528		9,329
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total SFR 1st DT liens	$	183,719	$	81,007	$	38,200	$	54,040	$	47,417	$	135,164	$	76	$	6,969	$	546,592

Consumer loans:
SFR HELOCs and Junior Liens
Pass	$	793	$	—	$	13	$	360	$	300	$	910	$	297,160	$	14,051	$	313,587
Special Mention	—		—		16		—		—		83		4,504		789		5,392
Substandard	—		—		—		—		—		39		6,698		1,768		8,505
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total SFR HELOCs and Junior Liens	$	793	$	—	$	29	$	360	$	300	$	1,032	$	308,362	$	16,608	$	327,484

Consumer loans:
Other risk ratings
Pass	$	25,876	$	29,539	$	14,170	$	4,238	$	1,020	$	967	$	986	$	—	$	76,796
Special Mention	43		208		147		74		24		65		90		—		651
Substandard	58		82		210		74		12		140		9		—		585
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total other consumer loans	$	25,977	$	29,829	$	14,527	$	4,386	$	1,056	$	1,172	$	1,085	$	—	$	78,032

Commercial and industrial loans:
Commercial and industrial risk ratings
Pass	$	356,701	$	48,838	$	20,463	$	13,151	$	5,185	$	9,490	$	65,938	$	1,085	$	520,851
Special Mention	—		102		698		195		20		178		207		11		1,411
Substandard	—		301		53		1,142		823		148		1,519		79		4,065
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total commercial and industrial loans	$	356,701	$	49,241	$	21,214	$	14,488	$	6,028	$	9,816	$	67,664	$	1,175	$	526,327

	Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2020
(in thousands)	2020		2019		2018		2017		2016		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
Construction loans:
Construction risk ratings
Pass	69,133		41,786		92,191		51,082		20,868		2,876		—		$	—	$	277,936
Special Mention	—		—		—		346		—		1,780		—		—		2,126
Substandard	—		—		—		—		4,529		251		—		—		4,780
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total construction loans	$	69,133	$	41,786	$	92,191	$	51,428	$	25,397	$	4,907	$	—	$	—	$	284,842

Agriculture production loans:
Agriculture production risk ratings
Pass	$	977	$	2,079	$	1,590	$	1,838	$	663	$	708	$	36,051	$	—	$	43,906
Special Mention	—		—		203		—		49		—		—		—		252
Substandard	—		—		—		—		6		—		—		—		6
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total agriculture production loans	$	977	$	2,079	$	1,793	$	1,838	$	718	$	708	$	36,051	$	—	$	44,164

Leases:
Lease risk ratings
Pass	$	3,784	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	3,784
Special Mention	—		—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—		—
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total leases	$	3,784	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	3,784

Total loans outstanding:
Risk ratings
Pass	$	962,685	$	629,730	$	507,345	$	521,664	$	383,401	$	970,535	$	560,867	$	20,643	$	4,556,870
Special Mention	9,484		10,622		13,728		15,457		43,750		33,893		28,523		1,734		157,191
Substandard	58		6,987		4,187		3,806		9,758		11,665		10,230		2,375		49,066
Doubtful/Loss	—		—		—		—		—		—		—		—		—
Total loans outstanding	$	972,227	$	647,339	$	525,260	$	540,927	$	436,909	$	1,016,093	$	599,620	$	24,752	$	4,763,127

The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated:

	Analysis of Past Due Loans - As of June 30, 2021
(in thousands)	30-59 days		60-89 days		> 90 days		Total Past Due Loans		Current		Total
Commercial real estate:
CRE non-owner occupied	$	337	$	49	$	3,919	$	4,305	$	1,529,951	$	1,534,256
CRE owner occupied	28		62		412		502		659,446		659,948
Multifamily	—		—		—		—		828,101		828,101
Farmland	—		—		846		846		171,185		172,031
Total commercial real estate loans	365		111		5,177		5,653		3,188,683		3,194,336
Consumer:
SFR 1-4 1st DT liens	—		—		423		423		653,950		654,373
SFR HELOCs and junior liens	694		63		1,565		2,322		322,805		325,127
Other	13		—		52		65		71,044		71,109
Total consumer loans	707		63		2,040		2,810		1,047,799		1,050,609
Commercial and industrial	250		178		160		588		451,481		452,069
Construction	—		—		—		—		200,714		200,714
Agriculture production	241		—		—		241		41,726		41,967
Leases	—		—		—		—		5,199		5,199
Total	$	1,563	$	352	$	7,377	$	9,292	$	4,935,602	$	4,944,894

	Analysis of Past Due Loans - As of December 31, 2020
(in thousands)	30-59 days		60-89 days		> 90 days		Total Past Due Loans		Current		Total
Commercial real estate:
CRE non-owner occupied	$	127	$	173	$	239	$	539	$	1,535,016	$	1,535,555
CRE owner occupied	297				824		1,121		623,254		624,375
Multifamily	—		—		—		—		639,480		639,480
Farmland	899		—		70		969		151,523		152,492
Total commercial real estate loans	1,323		173		1,133		2,629		2,949,273		2,951,902
Consumer:
SFR 1-4 1st DT liens	37		—		960		997		545,595		546,592
SFR HELOCs and junior liens	418		212		1,671		2,301		325,183		327,484
Other	41		13		100		154		77,878		78,032
Total consumer loans	496		225		2,731		3,452		948,656		952,108
Commercial and industrial	155		426		105		686		525,641		526,327
Construction	—		—		—		—		284,842		284,842
Agriculture production	—		—		—		—		44,164		44,164
Leases	—		—		—		—		3,784		3,784
Total	$	1,974	$	824	$	3,969	$	6,767	$	4,756,360	$	4,763,127

The following table shows the ending balance of non accrual loans by loan category as of the date indicated:

	Non Accrual Loans
	As of June 30, 2021						As of December 31, 2020
(in thousands)	Non accrual with no allowance for credit losses		Total non accrual		Past due 90 days or more and still accruing		Non accrual with no allowance for credit losses		Total non accrual		Past due 90 days or more and still accruing
Commercial real estate:
CRE non-owner occupied	$	8,515	$	8,515	$	—	$	3,110	$	3,110	$	—
CRE owner occupied	3,132		5,610		—		3,111		4,061		—
Multifamily	171		171		—		—		—		—
Farmland	1,346		1,346		—		1,468		1,538		—
Total commercial real estate loans	13,164		15,642		—		7,689		8,709		—
Consumer:
SFR 1-4 1st DT liens	4,185		4,328		—		4,950		5,093		—
SFR HELOCs and junior liens	3,677		4,604		—		4,480		6,148		—
Other	47		114		—		68		167		—
Total consumer loans	7,909		9,046		—		9,498		11,408		—
Commercial and industrial	86		3,615		—		652		2,183		—
Construction	4,402		4,402		—		4,546		4,546		—
Agriculture production	—		—		—		5		18		—
Leases	—		—		—		—		—		—
Sub-total	25,561		32,705		—		22,390		26,864		—
Less: Guaranteed loans	(608)		(865)		—		(687)		(811)
Total, net	$	24,953	$	31,840	$	—	$	21,703	$	26,053	$	—

Interest income on non accrual loans that would have been recognized during the three months ended June 30, 2021 and 2020, if all such loans had been current in accordance with their original terms, totaled $524,000 and $428,000, respectively. Interest income actually recognized on these originated loans during the three months ended June 30, 2021 and 2020 was $159,000 and $39,000, respectively.

Interest income on non accrual loans that would have been recognized during the six months ended June 30, 2021 and 2020, if all such loans had been current in accordance with their original terms, totaled $1,060,000 and $859,000, respectively. Interest income actually recognized on these originated loans during the six months ended June 30, 2021 and 2020 was $176,000 and $86,000, respectively.

The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods:

	As of June 30, 2021
(in thousands)	Retail		Office		Warehouse		Other		Multifamily		Farmland		SFR -1st Deed		SFR -2nd Deed		Automobile/Truck		A/R and Inventory		Equipment		Total
Commercial real estate:
CRE non-owner occupied	$	2,853	$	416	$	—	$	3,918	$	—	$	—	$	1,328	$	—	$	—	$	—	$	—	$	8,515
CRE owner occupied	543		—		1,611		978		—		—		—		—		—		—		—		3,132
Multifamily	—		—		—		—		171		—		—		—		—		—		—		171
Farmland	—		—		—		—		—		1,346		—		—		—		—		—		1,346
Total commercial real estate loans	3,396		416		1,611		4,896		171		1,346		1,328		—		—		—		—		13,164
Consumer:
SFR 1-4 1st DT liens	—		—		—		—		—		—		4,185		—		—		—		—		4,185
SFR HELOCs and junior liens	—		—		—		—		—		—		1,753		1,924		—		—		—		3,677
Other	—		—		—		26		—		—		—		—		21		—		—		47
Total consumer loans	—		—		—		26		—		—		5,938		1,924		21		—		—		7,909
Commercial and industrial	—		—		—		—		—		—		—		—		—		43		43		86
Construction	—		—		—		—		—		—		4,402		—		—		—		—		4,402
Agriculture production	—		—		—		—		—		—		—		—		—		—		—		—
Leases	—		—		—		—		—		—		—		—		—		—		—		—
Total	$	3,396	$	416	$	1,611	$	4,922	$	171	$	1,346	$	11,668	$	1,924	$	21	$	43	$	43	$	25,561

	As of December 31, 2020
(in thousands)	Retail		Office		Warehouse		Other		Multifamily			Farmland		SFR -1st Deed		SFR -2nd Deed		Automobile/Truck		A/R and Inventory		Equipment		Total
Commercial real estate:
CRE non-owner occupied	$	2,445	$	435	$	—	$	—	$	—		$	—	$	—	$	—	$	—	$	—	$	—	$	2,880
CRE owner occupied	796		1,176		1,668		—		—			—		—		—		—		—		—		3,640
Multifamily	—		—		—		—		—			—		—		—		—		—		—		—
Farmland	—		—		—		—		—		—	1,538		—		—		—		—		—		1,538
Total commercial real estate loans	3,241		1,611		1,668		—		—			1,538		—		—		—		—		—		8,058
Consumer:
SFR 1-4 1st DT liens	—		—		—		—		—			—		5,068		—		—		—		—		5,068
SFR HELOCs and junior liens	—		—		—		—		—			—		1,855		2,839		—		—		—		4,694
Other	—		—		—		42		—			—		—		—		97		—		—		139
Total consumer loans	—		—		—		42		—			—		6,923		2,839		97		—		—		9,901
Commercial and industrial	—		—		—		292		—			—		—		—		—		1,173		75		1,540
Construction	—		—		—		—		—			—		4,546		—		—		—		—		4,546
Agriculture production	—		—		—		—		—			—		—		—		—		13		5		18
Leases	—		—		—		—		—			—		—		—		—		—		—		—
Total	$	3,241	$	1,611	$	1,668	$	334	$	—		$	1,538	$	11,469	$	2,839	$	97	$	1,186	$	80	$	24,063

The CARES Act, in addition to providing financial assistance to both businesses and consumers, provides financial institutions the option to temporarily suspend certain requirements under GAAP related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19. The banking regulatory agencies have likewise issued guidance encouraging financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual payment obligations because of the effects of COVID-19. That guidance, with concurrence of the Financial Accounting Standards Board and provisions of the CARES Act, allow modifications made on a good faith basis in response to COVID-19 to borrowers who were generally current with their payments prior to any relief, to not be treated as troubled debt restructurings. To the extent that such modifications meet the criteria previously described, such modifications are not expected to be classified as troubled debt restructurings.The following tables show certain information regarding TDRs that occurred during the periods indicated:

	TDR information for the three months ended June 30, 2021
(dollars in thousands)	Number	Pre-mod outstanding principal balance		Post-mod outstanding principal balance		Financial impact due to TDR taken as additional provision		Number that defaulted during the period	Recorded investment of TDRs that defaulted during the period		Financial impact due to the default of previous TDR taken as charge- offs or additional provisions
Commercial real estate:
CRE non-owner occupied	1	$	706	$	706	$	706	—	$	—	$	—
CRE owner occupied	—	—		—		—		—	—		—
Multifamily	—	—		—		—		—	—		—
Farmland	—	—		—		—		—	—		—
Total commercial real estate loans	1	706		706		706		—	—		—
Consumer:
SFR 1-4 1st DT liens	—	—		—		—		—	—		—
SFR HELOCs and junior liens	—	—		—		—		—	—		—
Other	—	—		—		—		—	—		—
Total consumer loans	—	—		—		—		—	—		—
Commercial and industrial	2	2,000		2,000		293		—	—		—
Construction	—	—		—		—		—	—		—
Agriculture production	—	—		—		—		—	—		—
Leases	—	—		—		—		—	—		—
Total	3	$	2,706	$	2,706	$	999	—	$	—	$	—

	TDR information for the three months ended June 30, 2020
(dollars in thousands)	Number	Pre-mod outstanding principal balance		Post-mod outstanding principal balance		Financial impact due to TDR taken as additional provision		Number that defaulted during the period	Recorded investment of TDRs that defaulted during the period		Financial impact due to the default of previous TDR taken as charge- offs or additional provisions
Commercial real estate:
CRE non-owner occupied	—	$	—	$	—	$	—	—	$	—	$	—
CRE owner occupied	—	—		—		—		—	—		—
Multifamily	—	—		—		—		—	—		—
Farmland	—	—		—		—		—	—		—
Total commercial real estate loans	—	—		—		—		—	—		—
Consumer:
SFR 1-4 1st DT liens	—	—		—		—		1	735		—
SFR HELOCs and junior liens	—	—		—		—		—	—		—
Other	—	—		—		—		—	—		—
Total consumer loans	—	—		—		—		1	735		—
Commercial and industrial	—	—		—		—		—	—		—
Construction	—	—		—		—		—	—		—
Agriculture production	—	—		—		—		—	—		—
Leases	—	—		—		—		—	—		—
Total	—	$	—	$	—	$	—	1	$	735	$	—

	TDR Information for the six months ended June 30, 2021
(dollars in thousands)	Number	Pre-mod outstanding principal balance		Post-mod outstanding principal balance		Financial impact due to TDR taken as additional provision		Number that defaulted during the period	Recorded investment of TDRs that defaulted during the period		Financial impact due to the default of previous TDR taken as charge- offs or additional provisions
Commercial real estate:
CRE non-owner occupied	2	$	1,023	$	1,018	$	1,020	—	$	—	$	—
CRE owner occupied	1	740		742		742		—	—		—
Multifamily	—	—		—		—		—	—		—
Farmland	—	—		—		—		3	847		—
Total commercial real estate loans	3	1,763		1,760		1,762		3	847		—
Consumer:
SFR 1-4 1st DT liens	—	—		—		—		—	—		—
SFR HELOCs and junior liens	—	—		—		—		—	—		—
Other	—	—		—		—		—	—		—
Total consumer loans	—	—		—		—		—	—		—
Commercial and industrial	5	2,316		2,310		603		1	247		—
Construction	—	—		—		—		—	—		—
Agriculture production	—	—		—		—		—	—		—
Leases	—	—		—		—		—	—		—
Total	8	$	4,079	$	4,070	$	2,365	4	$	1,094	$	—

	TDR Information for the six months ended June 30, 2020
(dollars in thousands)	Number	Pre-mod outstanding principal balance		Post-mod outstanding principal balance		Financial impact due to TDR taken as additional provision		Number that defaulted during the period	Recorded investment of TDRs that defaulted during the period		Financial impact due to the default of previous TDR taken as charge- offs or additional provisions
Commercial real estate:
CRE non-owner occupied	1	$	257	$	251	$	—	—	$	—	$	—
CRE owner occupied	—	—		—		—		—	—		—
Multifamily	—	—		—		—		—	—		—
Farmland	2	230		298		—		—	—		—
Total commercial real estate loans	3	487		549		—		—	—		—
Consumer:
SFR 1-4 1st DT liens	—	—		—		—		2	1,037		—
SFR HELOCs and junior liens	2	172		169		—		—	—		—
Other	—	—		—		—		—	—		—
Total consumer loans	2	172		169		—		2	1,037		—
Commercial and industrial	1	21		20		21		—	—		—
Construction	—	—		—		—		—	—		—
Agriculture production	—	—		—		—		—	—		—
Leases	—	—		—		—		—	—		—
Total	6	$	680	$	738	$	21	2	$	1,037	$	—

The Company also modified the terms of select loans in an effort to assist borrowers that were not related to the COVID-19 pandemic. If the borrower was experiencing financial difficulty and a concession was granted, the Company considered such modifications as troubled debt restructurings. Modifications classified as TDRs can include one or a combination of the following: rate modifications, term extensions, interest only modifications, either temporary or long-term, payment modifications, and collateral substitutions/additions. The objective of the modifications was to increase loan repayments by customers and thereby reduce net charge-offs. The modified loans are included in impaired loans for purposes of determining the level of the allowance for credit losses.

For all new TDRs, an impairment analysis is conducted. If the loan is determined to be collateral dependent, any additional amount of impairment will be calculated based on the difference between estimated collectible value and the current carrying balance of the loan. This difference could result in an increased provision and is typically charged off. If the asset is determined not to be collateral dependent, the impairment is measured on the net present value difference between the expected cash flows of the restructured loan and the cash flows which would have been received under the original terms. The effect of this could result in a requirement for additional provision to the

reserve. The effect of these required provisions for the period are indicated above.Typically if a TDR defaults during the period, the loan is then considered collateral dependent and, if it was not already considered collateral dependent, an appropriate provision will be reserved or charge will be taken. The additional provisions required resulting from default of previously modified TDR’s are noted above. Loans that defaulted within the twelve month period subsequent to modification were not considered significant for financial reporting purposes.