Loans | Note 3 — Loans Loans Receivable Loans consisted of the following as of the dates indicated: September 30, 2022 December 31, 2021 (in thousands) Real estate loans: Commercial property Retail $ 1,044,287 $ 970,134 Hospitality 662,438 717,692 Other (1) 2,044,878 1,919,033 Total commercial property loans 3,751,603 3,606,859 Construction 102,342 95,006 Residential (2) 649,589 400,546 Total real estate loans 4,503,534 4,102,411 Commercial and industrial loans (3) 732,033 561,831 Equipment financing agreements 565,424 487,299 Loans receivable 5,800,991 5,151,541 Allowance for credit losses ( 71,584 ) ( 72,557 ) Loans receivable, net $ 5,729,407 $ 5,078,984 (1) Includes mixed-use, multifamily, office, industrial, gas stations, faith-based facilities, medical and warehouse; all other property types represent less than one percent of total loans receivable. (2) Includes $ 2.4 million and $ 3.9 million of home equity loans and lines, and $ 5.6 million and $ 6.0 of personal loans at September 30, 2022 and December 31, 2021, respectively. (3) At September 30, 2022 and December 31, 2021, Paycheck Protection Program ("PPP") loans were $ 1.0 million and $ 3.0 million, respectively. Accrued interest on loans was $ 13.2 million and $ 10.1 million at September 30, 2022 and December 31, 2021, respectively. At September 30, 2022 and December 31, 2021, loans of $ 2.36 billion and $ 2.30 billion, respectively, were pledged to secure advances from the FHLB. Loans Held for Sale The following is the activity for loans held for sale for the three months ended September 30, 2022 and 2021: Real Estate Commercial and Industrial Total (in thousands) September 30, 2022 Balance at beginning of period $ 10,976 $ 7,552 $ 18,528 Originations and transfers 23,013 12,198 35,211 Sales ( 27,493 ) ( 16,192 ) ( 43,685 ) Principal paydowns and amortization ( 6 ) ( 4 ) ( 10 ) Balance at end of period $ 6,490 $ 3,554 $ 10,044 September 30, 2021 Balance at beginning of period $ 13,092 $ 22,938 $ 36,030 Originations and transfers 28,537 15,228 43,765 Sales ( 27,513 ) ( 34,956 ) ( 62,469 ) Principal paydowns and amortization ( 4 ) 559 555 Balance at end of period $ 14,112 $ 3,769 $ 17,881 Loans held for sale was comprised of $ 10.0 million and $ 13.3 million of the guaranteed portion of SBA 7(a) loans at September 30, 2022 and December 31, 2021, respectively. All second draw PPP loans were sold by the third quarter of 2021. For the three and nine months ended September 30, 2021, the Company recognized $ 0.3 million and $ 3.0 million, respectively, of gains on the sale of $ 14.6 million and $ 132.7 million, respectively, of second draw PPP loans. The following is the activity for loans held for sale for the nine months ended September 30, 2022 and 2021: Real Estate Commercial and Industrial Total (in thousands) September 30, 2022 Balance at beginning of period $ 6,954 $ 6,388 $ 13,342 Originations and transfers 72,708 39,207 111,915 Sales ( 73,166 ) ( 42,033 ) ( 115,199 ) Principal payoffs and amortization ( 6 ) ( 8 ) ( 14 ) Balance at end of period $ 6,490 $ 3,554 $ 10,044 September 30, 2021 Balance at beginning of period $ 8,042 $ 526 $ 8,568 Originations and transfers 71,005 162,637 233,642 Sales ( 64,930 ) ( 160,293 ) ( 225,223 ) Principal payoffs and amortization ( 5 ) 899 894 Balance at end of period $ 14,112 $ 3,769 $ 17,881 Allowance for Credit Losses The following table details the information on the allowance for credit losses by portfolio segment as of and for the three months ended September 30, 2022 and 2021: Real Estate Commercial and Industrial Equipment Financing Agreements Total (in thousands) September 30, 2022 Balance at beginning of period $ 46,112 $ 14,275 $ 12,680 $ 73,067 Less loans charged off 1,356 8 716 2,080 Recoveries on loans receivable previously charged off ( 373 ) ( 228 ) ( 369 ) ( 970 ) Provision (recovery) for credit losses 395 381 ( 1,149 ) ( 373 ) Ending balance $ 45,524 $ 14,876 $ 11,184 $ 71,584 September 30, 2021 Balance at beginning of period $ 63,029 $ 8,059 $ 12,284 $ 83,372 Less loans charged off — 186 791 977 Recoveries on loans receivable previously charged off ( 1,162 ) ( 330 ) ( 350 ) ( 1,842 ) Provision (recovery) for credit losses ( 8,128 ) 507 ( 3 ) ( 7,624 ) Ending balance $ 56,063 $ 8,710 $ 11,840 $ 76,613 The following table details the information on the allowance for credit losses by portfolio segment as of and for the nine months ended September 30, 2022 and 2021: Real Estate Commercial and Industrial Equipment Financing Agreements Total (in thousands) September 30, 2022 Balance at beginning of period $ 48,890 $ 12,418 $ 11,249 72,557 Less loans charged off 1,886 87 1,548 3,521 Recoveries on loans receivable previously charged off ( 632 ) ( 679 ) ( 1,117 ) ( 2,428 ) Provision (recovery) for credit losses ( 2,112 ) 1,866 366 120 Ending balance $ 45,524 $ 14,876 $ 11,184 $ 71,584 September 30, 2021 Balance at beginning of period $ 51,876 $ 21,410 $ 17,140 $ 90,426 Less loans charged off 1,491 550 3,893 5,934 Recoveries on loans receivable previously charged off ( 1,597 ) ( 602 ) ( 694 ) ( 2,893 ) Provision (recovery) for credit losses 4,081 ( 12,752 ) ( 2,101 ) ( 10,772 ) Ending balance $ 56,063 $ 8,710 $ 11,840 $ 76,613 The table below illustrates the allowance for credit losses by loan portfolio segment and each loan portfolio segment as a percentage of total loans. September 30, 2022 December 31, 2021 Allowance Amount Percentage Total Loans Percentage of Total Loans Allowance Amount Percentage Total Loans Percentage of Total Loans (dollars in thousands) Real estate loans: Commercial property Retail $ 7,758 10.8 % $ 1,044,287 18.0 % $ 6,579 9.1 % $ 970,134 18.8 % Hospitality 15,417 21.5 % 662,438 11.4 % 22,670 31.2 % 717,692 13.9 % Other 15,450 21.7 % 2,044,878 35.3 % 15,065 20.8 % 1,919,033 37.3 % Total commercial property loans 38,625 54.0 % 3,751,603 64.7 % 44,314 61.1 % 3,606,859 70.0 % Construction 4,034 5.6 % 102,342 1.8 % 4,078 5.6 % 95,006 1.8 % Residential 2,865 4.0 % 649,589 11.2 % 498 0.7 % 400,546 7.8 % Total real estate loans 45,524 63.6 % 4,503,534 77.7 % 48,890 67.4 % 4,102,411 79.6 % Commercial and industrial loans 14,876 20.8 % 732,033 12.6 % 12,418 17.1 % 561,831 10.9 % Equipment financing agreements 11,184 15.6 % 565,424 9.7 % 11,249 15.5 % 487,299 9.5 % Total $ 71,584 100.0 % $ 5,800,991 100.0 % $ 72,557 100.0 % $ 5,151,541 100.0 % The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2022 and December 31, 2021, for which repayment is expected to be obtained through the sale of the underlying collateral. September 30, 2022 December 31, 2021 Amortized Cost Amortized Cost (in thousands) Real estate loans: Commercial property Retail $ 3,531 $ 1,917 Hospitality — — Other (1) 608 499 Total commercial property loans 4,139 2,416 Residential 912 982 Total real estate loans 5,051 3,398 Total $ 5,051 $ 3,398 (1) Includes mixed-use, multifamily, office, industrial, gas stations, faith-based facilities, medical and warehouse; all other property types represent less than one percent of total loans receivable. Loan Quality Indicators As part of the on-going monitoring of the quality of our loans portfolio, we utilize an internal loan grading system to identify credit risk and assign an appropriate grade (from 0 to 8) for each loan in our portfolio. A third-party loan review is performed at least on an annual basis. Additional adjustments are made when determined to be necessary. The loan grade definitions are as follows: Pass and Pass-Watch: Pass and Pass-Watch loans, grades (0-4), are in compliance with the Bank’s credit policy and regulatory requirements, and do not exhibit any potential or defined weaknesses as defined under “Special Mention,” “Substandard” or “Doubtful.” This category is the strongest level of the Bank’s loan grading system. It consists of all performing loans with no identified credit weaknesses. It includes cash and stock/security secured loans or other investment grade loans. Special Mention: A Special Mention loan, grade (5), has potential weaknesses that deserve management’s close attention. If not corrected, these potential weaknesses may result in deterioration of the repayment of the debt and result in a Substandard classification. Loans that have significant actual, not potential, weaknesses are considered more severely classified. Substandard: A Substandard loan, grade (6), has a well-defined weakness that jeopardizes the liquidation of the debt. A loan graded Substandard is not protected by the sound worth and paying capacity of the borrower, or of the value and type of collateral pledged. With a Substandard loan, there is a distinct possibility that the Bank will sustain some loss if the weaknesses or deficiencies are not corrected. Doubtful: A Doubtful loan, grade (7), is one that has critical weaknesses that would make the collection or liquidation of the full amount due improbable. However, there may be pending events which may work to strengthen the loan, and therefore the amount or timing of a possible loss cannot be determined at the current time. Loss: A loan classified as Loss, grade (8), is considered uncollectible and of such little value that their continuance as active bank assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather it is not practical or desirable to defer writing off this asset even though partial recovery may be possible in the future. Loans classified as Loss will be charged off in a timely manner. Under regulatory guidance, loans graded special mention or worse are considered criticized loans, and loans graded substandard or worse are considered classified loans. Loans by Vintage Year and Risk Rating Term Loans Amortized Cost Basis by Origination Year (1) 2022 2021 2020 2019 2018 Prior Revolving Total (in thousands) September 30, 2022 Real estate loans: Commercial property Risk Rating ` Pass / Pass-Watch $ 1,035,752 $ 924,041 $ 629,274 $ 422,378 $ 320,721 $ 252,048 $ 57,112 $ 3,641,326 Special Mention — 13,504 18,154 7,159 21,469 9,570 1,701 71,557 Classified 851 — — 5,816 13,983 18,070 — 38,720 Total commercial property 1,036,603 937,545 647,428 435,353 356,173 279,688 58,813 3,751,603 Construction Risk Rating Pass / Pass-Watch 39,090 63,252 — — — — — 102,342 Special Mention — — — — — — — — Classified — — — — — — — — Total construction 39,090 63,252 — — — — — 102,342 Residential Risk Rating Pass / Pass-Watch 310,794 176,295 13,146 236 737 140,285 6,476 647,969 Special Mention — — 343 — — — 350 693 Classified 15 — — — — 912 — 927 Total residential 310,809 176,295 13,489 236 737 141,197 6,826 649,589 Total real estate loans Risk Rating Pass / Pass-Watch 1,385,636 1,163,588 642,420 422,614 321,458 392,333 63,588 4,391,637 Special Mention — 13,504 18,497 7,159 21,469 9,570 2,051 72,250 Classified 866 — — 5,816 13,983 18,982 — 39,647 Total real estate loans 1,386,502 1,177,092 660,917 435,589 356,910 420,885 65,639 4,503,534 Commercial and industrial loans: Risk Rating Pass / Pass-Watch 283,314 110,850 45,219 29,583 11,656 13,864 184,223 678,709 Special Mention — 9,609 — 13,514 — 107 27,472 50,702 Classified — 35 171 1,183 97 495 641 2,622 Total commercial and industrial loans 283,314 120,494 45,390 44,280 11,753 14,466 212,336 732,033 Equipment financing agreements: Risk Rating Pass / Pass-Watch 233,883 183,731 53,553 62,107 23,802 2,878 — 559,954 Special Mention — — — — — — — — Classified 108 1,568 265 2,582 814 133 — 5,470 Total equipment financing agreements 233,991 185,299 53,818 64,689 24,616 3,011 — 565,424 Total loans receivable: Risk Rating Pass / Pass-Watch 1,902,833 1,458,169 741,192 514,304 356,916 409,075 247,811 5,630,300 Special Mention — 23,113 18,497 20,673 21,469 9,677 29,523 122,952 Classified 974 1,603 436 9,581 14,894 19,610 641 47,739 Total loans receivable $ 1,903,807 $ 1,482,885 $ 760,125 $ 544,558 $ 393,279 $ 438,362 $ 277,975 $ 5,800,991 (1) Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision. Term Loans Amortized Cost Basis by Origination Year (1) 2021 2020 2019 2018 2017 Prior Revolving Total December 31, 2021 Real estate loans: Commercial property Risk Rating Pass / Pass-Watch $ 1,203,197 $ 706,470 $ 488,250 $ 406,288 $ 277,680 $ 384,064 $ 41,413 $ 3,507,362 Special Mention — 18,869 7,593 — 6,999 16,879 1,703 52,043 Classified — — 5,450 17,247 2,965 21,792 — 47,454 Total commercial property 1,203,197 725,339 501,293 423,535 287,644 422,735 43,116 3,606,859 Construction Risk Rating Pass / Pass-Watch 73,808 631 — — — — — 74,439 Special Mention — — — — — 20,567 — 20,567 Classified — — — — — — — — Total construction 73,808 631 — — — 20,567 — 95,006 Residential Risk Rating Pass / Pass-Watch 194,948 16,975 247 19,813 73,567 82,076 8,381 396,007 Special Mention — — — 930 406 2,221 — 3,557 Classified — — — — 965 17 — 982 Total residential 194,948 16,975 247 20,743 74,938 84,314 8,381 400,546 Total real estate loans Risk Rating Pass / Pass-Watch 1,471,953 724,076 488,497 426,101 351,247 466,140 49,794 3,977,808 Special Mention — 18,869 7,593 930 7,405 39,667 1,703 76,167 Classified — — 5,450 17,247 3,930 21,809 — 48,436 Total real estate loans 1,471,953 742,945 501,540 444,278 362,582 527,616 51,497 4,102,411 Commercial and industrial loans: Risk Rating Pass / Pass-Watch 264,762 55,135 36,937 15,780 10,874 6,016 148,148 537,652 Special Mention — 274 13,989 — 67 4,802 ( 5 ) 19,127 Classified — 3 708 145 19 886 3,291 5,052 Total commercial and industrial loans 264,762 55,412 51,634 15,925 10,960 11,704 151,434 561,831 Equipment financing agreements: Risk Rating Pass / Pass-Watch 239,738 79,400 101,460 47,485 10,683 1,388 — 480,154 Special Mention — — — — — — — — Classified 716 981 3,575 1,328 347 198 — 7,145 Total equipment financing agreements 240,454 80,381 105,035 48,813 11,030 1,586 — 487,299 Total loans receivable: Risk Rating Pass / Pass-Watch 1,976,453 858,611 626,894 489,366 372,804 473,544 197,942 4,995,614 Special Mention — 19,143 21,582 930 7,472 44,469 1,698 95,294 Classified 716 984 9,733 18,720 4,296 22,893 3,291 60,633 Total loans receivable $ 1,977,169 $ 878,738 $ 658,209 $ 509,016 $ 384,572 $ 540,906 $ 202,931 $ 5,151,541 (1) Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision. Loans by Vintage Year and Payment Performance Term Loans Amortized Cost Basis by Origination Year (1) 2022 2021 2020 2019 2018 Prior Revolving Total (in thousands) September 30, 2022 Real estate loans: Commercial property Payment performance Performing $ 1,036,603 $ 937,545 $ 647,428 $ 435,353 $ 352,642 $ 278,434 $ 58,813 $ 3,746,818 Nonperforming — — — — 3,531 1,254 — 4,785 Total commercial property 1,036,603 937,545 647,428 435,353 356,173 279,688 58,813 3,751,603 Construction Payment performance Performing 39,090 63,252 — — — — — 102,342 Nonperforming — — — — — — — — Total construction 39,090 63,252 — — — — — 102,342 Residential Payment performance Performing 310,794 176,295 13,489 236 737 140,285 6,826 648,662 Nonperforming 15 — — — — 912 — 927 Total residential 310,809 176,295 13,489 236 737 141,197 6,826 649,589 Total real estate loans Payment performance Performing 1,386,487 1,177,092 660,917 435,589 353,379 418,719 65,639 4,497,822 Nonperforming 15 — — — 3,531 2,166 — 5,712 Total real estate loans 1,386,502 1,177,092 660,917 435,589 356,910 420,885 65,639 4,503,534 Commercial and industrial loans: Payment performance Performing 283,314 120,459 45,219 44,280 11,753 14,263 212,336 731,624 Nonperforming — 35 171 — — 203 — 409 Total commercial and industrial loans 283,314 120,494 45,390 44,280 11,753 14,466 212,336 732,033 Equipment financing agreements: Payment performance Performing 233,883 183,731 53,553 62,107 23,802 2,878 — 559,954 Nonperforming 108 1,568 265 2,582 814 133 — 5,470 Total equipment financing agreements 233,991 185,299 53,818 64,689 24,616 3,011 — 565,424 Total loans receivable: Payment performance Performing 1,903,684 1,481,282 759,689 541,976 388,934 435,860 277,975 5,789,400 Nonperforming 123 1,603 436 2,582 4,345 2,502 — 11,591 Total loans receivable $ 1,903,807 $ 1,482,885 $ 760,125 $ 544,558 $ 393,279 $ 438,362 $ 277,975 $ 5,800,991 (1) Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision. Term Loans Amortized Cost Basis by Origination Year (1) 2021 2020 2019 2018 2017 Prior Revolving Total December 31, 2021 Real estate loans: Commercial property Payment performance Performing $ 1,203,197 $ 725,339 $ 501,293 $ 423,515 $ 286,935 $ 419,464 $ 43,116 $ 3,602,859 Nonperforming — — — 20 709 3,271 — 4,000 Total commercial property 1,203,197 725,339 501,293 423,535 287,644 422,735 43,116 3,606,859 Construction Payment performance Performing 73,808 631 — — — 20,567 — 95,006 Nonperforming — — — — — — — — Total construction 73,808 631 — — — 20,567 — 95,006 Residential Payment performance Performing 194,948 16,975 247 20,743 73,973 84,052 8,381 399,319 Nonperforming — — — — 965 262 — 1,227 Total residential 194,948 16,975 247 20,743 74,938 84,314 8,381 400,546 Total real estate loans Payment performance Performing 1,471,953 742,945 501,540 444,258 360,908 524,083 51,497 4,097,184 Nonperforming — — — 20 1,674 3,533 — 5,227 Total real estate loans 1,471,953 742,945 501,540 444,278 362,582 527,616 51,497 4,102,411 Commercial and industrial loans: Payment performance Performing 264,762 55,409 50,926 15,925 10,956 11,431 151,434 560,843 Nonperforming — 3 708 — 4 273 — 988 Total commercial and industrial loans 264,762 55,412 51,634 15,925 10,960 11,704 151,434 561,831 Equipment financing agreements: Payment performance Performing 239,738 79,400 101,460 47,484 10,684 1,388 — 480,154 Nonperforming 716 981 3,575 1,329 346 198 — 7,145 Total equipment financing agreements 240,454 80,381 105,035 48,813 11,030 1,586 — 487,299 Total loans receivable: Payment performance Performing 1,976,453 877,754 653,926 507,667 382,548 536,902 202,931 5,138,181 Nonperforming 716 984 4,283 1,349 2,024 4,004 — 13,360 Total loans receivable $ 1,977,169 $ 878,738 $ 658,209 $ 509,016 $ 384,572 $ 540,906 $ 202,931 $ 5,151,541 (1) Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision. The following is an aging analysis of loans, including loans on nonaccrual status, disaggregated by loan class, as of the dates indicated: 30-59 60-89 90 Days Total Current Total Accruing (in thousands) September 30, 2022 Real estate loans: Commercial property Retail $ 3,531 $ — $ — $ 3,531 $ 1,040,756 $ 1,044,287 $ — Hospitality 991 — — 991 661,447 662,438 — Other 214 — 269 483 2,044,395 2,044,878 — Total commercial property loans 4,736 — 269 5,005 3,746,598 3,751,603 — Construction — — — — 102,342 102,342 — Residential 404 — 10 414 649,175 649,589 — Total real estate loans 5,140 — 279 5,419 4,498,115 4,503,534 — Commercial and industrial loans 82 35 — 117 731,916 732,033 — Equipment financing agreements 3,666 1,130 1,586 6,382 559,042 565,424 — Total loans receivable $ 8,888 $ 1,165 $ 1,865 $ 11,918 $ 5,789,073 $ 5,800,991 $ — December 31, 2021 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ 970,134 $ 970,134 $ — Hospitality 556 — — 556 717,136 717,692 — Other 92 691 499 1,282 1,917,751 1,919,033 — Total commercial property loans 648 691 499 1,838 3,605,021 3,606,859 — Construction — — — — 95,006 95,006 — Residential 570 750 556 1,876 398,670 400,546 — Total real estate loans 1,218 1,441 1,055 3,714 4,098,697 4,102,411 — Commercial and industrial loans 56 9 — 65 561,766 561,831 — Equipment financing agreements 3,764 1,992 1,181 6,937 480,362 487,299 — Total loans receivable $ 5,038 $ 3,442 $ 2,236 $ 10,716 $ 5,140,825 $ 5,151,541 $ — Nonaccrual Loans and Nonperforming Assets The following table represents the amortized cost basis of loans on nonaccrual status and loans past due 90 days and still accruing as of September 30, 2022 and December 31, 2021. September 30, 2022 Nonaccrual Loans Nonaccrual Loans Loans Total (in thousands) Real estate loans: Commercial property Retail $ 3,530 $ — $ — $ 3,530 Other 914 341 — 1,255 Total commercial property loans 4,444 341 — 4,785 Residential 912 15 — 927 Total real estate loans 5,356 356 — 5,712 Commercial and industrial loans — 409 — 409 Equipment financing agreements 368 5,102 — 5,470 Total $ 5,724 $ 5,867 $ — $ 11,591 December 31, 2021 Nonaccrual Loans Nonaccrual Loans Loans Total (in thousands) Real estate loans: Commercial property Retail $ 1,918 $ — $ — $ 1,918 Other 1,745 337 — 2,082 Total commercial property loans 3,663 337 — 4,000 Residential 982 245 — 1,227 Total real estate loans 4,645 582 — 5,227 Commercial and industrial loans 8 980 — 988 Equipment financing agreements 1,172 5,973 — 7,145 Total $ 5,825 $ 7,535 $ — $ 13,360 The Company did no t recognize any interest income on nonaccrual loans for the three and nine months ended September 30, 2022 or 2021. The following table details nonperforming assets as of the dates indicated: September 30, 2022 December 31, 2021 (in thousands) Nonaccrual loans $ 11,591 $ 13,360 Loans receivable 90 days or more past due and still accruing — — Total nonperforming loans receivable 11,591 13,360 Other real estate owned ("OREO") 792 675 Total nonperforming assets $ 12,383 $ 14,035 OREO is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of September 30, 2022 and December 31, 2021. Troubled Debt Restructurings ("TDRs") As of September 30, 2022 and December 31, 2021, TDRs were $ 1.6 million and $ 2.9 million, respectively. A debt restructuring is considered a TDR if we grant a concession that we would not have otherwise considered to a borrower for economic or legal reasons related to the borrower’s financial difficulties. The following table details TDRs as of September 30, 2022 and December 31, 2021: Nonaccrual TDRs Accrual TDRs Deferral of Deferral of Reduction Extension Total Deferral of Deferral of Reduction Extension Total (in thousands) September 30, 2022 Real estate loans $ 274 $ — $ 88 $ — $ 362 $ — $ 1,144 $ — $ — $ 1,144 Commercial and industrial loans — 111 — — 111 — — — — — Total $ 274 $ 111 $ 88 $ — $ 473 $ — $ 1,144 $ — $ — $ 1,144 December 31, 2021 Real estate loans $ 346 $ 2,046 $ 372 $ — $ 2,764 $ — $ — $ — $ — $ — Commercial and industrial loans — 124 — — 124 — — — — — Total $ 346 $ 2,170 $ 372 $ — $ 2,888 $ — $ — $ — $ — $ — The following table presents the number of loans by class modified as TDRs that occurred during the periods indicated, with their pre- and post-modification recorded amounts. Three Months Ended Twelve Months Ended September 30, 2022 December 31, 2021 Number of Pre- Post- Number of Pre- Post- (in thousands except for number of loans) Real estate loans — $ — $ — — $ — $ — Total — $ — $ — — $ — $ — Nine Months Ended Twelve Months Ended September 30, 2022 December 31, 2021 Number of Pre- Post- Number of Pre- Post- (in thousands except for number of loans) Real estate loans 1 $ 92 $ 88 — $ — $ — Total 1 $ 92 $ 88 — $ — $ — All TDRs are individually analyzed using one of three criteria: (1) the present value of expected future cash flows discounted at the loan’s effective interest rate; (2) the loan’s observable market price; or (3) the fair value of the collateral if the loan is collateral dependent. At September 30, 2022 and December 31, 2021, the allowance resulting from the individual evaluation of TDRs was immaterial. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. No loans defaulted during the three or nine months ended September 30, 2022 following modification. During the year ended December 31, 2021, no loans defaulted within the twelve-month period following modification. |