Loans

6 Months Ended

Jun. 30, 2022

Loans and Leases Receivable, Net Amount [Abstract]

The Company’s loan portfolio includes originated and purchased loans. The following is an analysis of the loan portfolio by segment and class (net of unearned income):


	June 30, 2022		December 31, 2021

	(dollars in thousands)
Commercial loans:
Commercial real estate	$	5,251,100	$	4,981,263
Commercial business	3,646,956		3,423,268
Agriculture	853,099		795,715
Construction	482,211		384,755
Consumer loans:
One-to-four family residential real estate	1,042,190		1,013,908
Other consumer	46,831		43,028
Total loans	11,322,387		10,641,937
Less: Allowance for credit losses	(149,935)		(155,578)
Total loans, net	$	11,172,452	$	10,486,359

At June 30, 2022 and December 31, 2021, the Company had no material foreign activities. Substantially all of the Company’s loans and unfunded commitments are geographically concentrated in its service areas within the states of Washington, Oregon, Idaho and California.

At June 30, 2022 and December 31, 2021, $4.24 billion and $3.49 billion of commercial and residential real estate loans were pledged as collateral on FHLB advances and additional borrowing capacity. The Company also pledged $200.3 million and $200.5 million of commercial loans to the FRB for additional borrowing capacity at June 30, 2022 and December 31, 2021, respectively.

Accrued interest receivable for loans is included in “Interest receivable” on the Company’s Consolidated Balance Sheet and is not reflected in the balances in the table above. At June 30, 2022 and December 31, 2021, accrued interest receivable for loans was $34.3 million and $32.4 million, respectively. The Company does not measure an allowance for credit losses for accrued interest receivable.

The following is an aging of the recorded investment of the loan portfolio at the dates presented:


	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans

June 30, 2022	(in thousands)
Commercial loans:
Commercial real estate	$	5,244,961	$	1,281	$	2,183	$	—	$	3,464	$	2,675	$	5,251,100
Commercial business	3,621,858		14,910		241		—		15,151		9,947		3,646,956
Agriculture	849,483		400		—		—		400		3,216		853,099
Construction	481,238		973		—		—		973		—		482,211
Consumer loans:
One-to-four family residential real estate	1,038,770		1,537		743		—		2,280		1,140		1,042,190
Other consumer	46,693		108		10		—		118		20		46,831
Total	$	11,283,003	$	19,209	$	3,177	$	—	$	22,386	$	16,998	$	11,322,387

	Current Loans		30 - 59 Days Past Due		60 - 89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Nonaccrual Loans		Total Loans

December 31, 2021	(in thousands)
Commercial loans:
Commercial real estate	$	4,977,781	$	—	$	1,610	$	—	$	1,610	$	1,872	$	4,981,263
Commercial business	3,406,539		2,721		687		—		3,408		13,321		3,423,268
Agriculture	789,112		1,207		—		—		1,207		5,396		795,715
Construction	384,755		—		—		—		—		—		384,755
Consumer loans:
One-to-four family residential real estate	1,010,343		921		211		—		1,132		2,433		1,013,908
Other consumer	42,998		11		—		—		11		19		43,028
Total	$	10,611,528	$	4,860	$	2,508	$	—	$	7,368	$	23,041	$	10,641,937

Loan payments are considered timely when the contractual principal or interest due in accordance with the terms of the loan agreement or any portion thereof is received on the due date of the scheduled payment.

Nonaccrual loans are generally loans placed on a nonaccrual basis when they become 90 days past due or when there are otherwise serious doubts about the collectability of principal or interest within the existing terms of the loan. The Company’s policy is to write-off all accrued interest on loans when they are placed on nonaccrual status.

The following table summarizes written-off interest on nonaccrual loans for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021

	(in thousands)
Commercial loans	$	71	$	212	$	139	$	424
Consumer loans	1		2		8		9
Total	$	72	$	214	$	147	$	433

The following summarizes the amortized cost of nonaccrual loans for which there was no related ACL for the periods indicated:


	June 30, 2022		December 31, 2021

	(in thousands)
Commercial loans:
Commercial real estate	$	1,760	$	932
Commercial business	4,036		5,131
Agriculture	2,079		3,756

Consumer loans:
One-to-four family residential real estate	751		—

Total	$	8,626	$	9,819

The following is an analysis of loans classified as TDR for the periods indicated:


	Three Months Ended June 30, 2022					Three Months Ended June 30, 2021
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

	(dollars in thousands)
Commercial loans:

Commercial business	—	—		—		4	$	1,757	$	1,757





Total	—	$	—	$	—	4	$	1,757	$	1,757



	Six Months Ended June 30, 2022					Six Months Ended June 30, 2021
	Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Number of TDR Modifications	Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment

	(dollars in thousands)
Commercial loans:
Commercial real estate	—	$	—	$	—	1	$	628	$	628
Commercial business	—	—		—		11	2,600		2,600
Agriculture	1	633		633		—	—		—

Consumer loans:
One-to-four family residential real estate	—	—		—		2	140		140

Total	1	$	633	$	633	14	$	3,368	$	3,368

The Company’s loans classified as TDR are loans that have been modified or with respect to which the borrower has been granted special concessions due to financial difficulties that, if not for the challenges of the borrower, the Company would not otherwise consider. The TDR modifications or concessions are made to increase the likelihood that these borrowers with financial difficulties will be able to satisfy their debt obligations as amended. The concessions granted in the restructurings, summarized in the table above, largely consisted of maturity extensions, interest rate modifications or a combination of both. In limited circumstances, a reduction in the principal balance of the loan could also be made as a concession. Loans classified as TDR are included with the loans collectively measured for credit losses.

The Company had commitments to lend $299 thousand of additional funds on loans classified as TDR as of June 30, 2022. The Company had $1.5 million of such commitments at December 31, 2021. The Company had no loans classified as TDR that defaulted within 12 months of being classified as TDR during the three and six months ended June 30, 2022 and December 31, 2021.