Loans | Note 3 — Loans Loans Receivable Loans consisted of the following as of the dates indicated: September 30, 2021 December 31, 2020 (in thousands) Real estate loans: Commercial property Retail $ 942,996 $ 824,606 Hospitality 725,864 859,953 Other (1) 1,783,477 1,610,377 Total commercial property loans 3,452,337 3,294,936 Construction 76,168 58,882 Residential/consumer loans 354,861 345,831 Total real estate loans 3,883,366 3,699,649 Commercial and industrial loans 516,357 757,255 Leases receivable 459,142 423,264 Loans receivable 4,858,865 4,880,168 Allowance for credit losses (76,613 ) (90,426 ) Loans receivable, net $ 4,782,252 $ 4,789,742 ( 1) Includes, among other types, mixed-use, apartment, office, industrial, gas stations, faith-based facilities and warehouse; all other property types represent less than one percent of total loans receivable. The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act allows financial institutions to assist customers in dealing with financial hardship by (a) providing federal funding so that financial institutions can originate SBA loans to borrowers at a low interest rate under the Paycheck Protection Program (“PPP”) loans with eventual debt forgiveness should the borrower continue to meet certain criteria; and (b) allowing financial institutions to temporarily modify loan terms by deferring loan payments, loan fees, etc. without considering them Troubled Debt Restructurings (“TDRs”). At September 30, 2021 and December 31, 2020, PPP loans totaling $21.9 million and $295.7 million, respectively, were included in the table above. In addition, at September 30, 2021 and December 31, 2020, there were $12.0 million and $155.6 million, respectively, of loans modified under Section 4013 of the CARES Act. Accrued interest on loans was $10.2 million and $15.2 million at September 30, 2021 and December 31, 2020, respectively. Accrued interest at September 30, 2021 and December 31, 2020 included unpaid deferred interest receivable for loans currently or previously modified under the CARES Act of $3.6 million and $7.5 million, net of a $311,000 and $1.7 million valuation allowance, respectively. At September 30, 2021 and December 31, 2020, loans of $2.17 billion 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, 2021 and 2020: Real Estate Commercial and Industrial Total (in thousands) 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 September 30, 2020 Balance at beginning of period $ 12,661 $ 5,281 $ 17,942 Originations 12,049 12,107 24,156 Sales (20,621 ) (8,639 ) (29,260 ) Principal paydowns and amortization — (5 ) (5 ) Balance at end of period $ 4,089 $ 8,745 $ 12,834 Loans held for sale was comprised of $17.9 million and $8.6 million of the guaranteed portion of SBA 7(a) loans at September 30, 2021 and December 31, 2020, respectively. During the three months ended September 30, 2021, the Company recognized $339,000 of gains on the sale of $14.6 million of second draw PPP loans. For the nine months ended September 30, 2021, the Company recognized $3.0 million of gains on the sale of $132.7 million second draw PPP loans. The following is the activity for loans held for sale for the nine months ended September 30, 2021 and 2020: Real Estate Commercial and Industrial Total (in thousands) 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 September 30, 2020 Balance at beginning of period $ 2,943 $ 3,077 $ 6,020 Originations 31,204 23,091 54,295 Sales (30,053 ) (17,419 ) (47,472 ) Principal payoffs and amortization (5 ) (5 ) (10 ) Balance at end of period $ 4,089 $ 8,745 $ 12,834 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, 2021 and 2020: Real Estate Commercial and Industrial Leases Receivable Total (in thousands) 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 Individually evaluated $ 8 $ 13 $ 2,173 $ 2,194 Collectively evaluated $ 56,055 $ 8,697 $ 9,667 $ 74,419 Loans receivable $ 3,883,366 $ 516,357 $ 459,142 $ 4,858,865 Individually evaluated $ 13,988 $ 313 $ 6,923 $ 21,224 Collectively evaluated $ 3,869,378 $ 516,044 $ 452,219 $ 4,837,641 September 30, 2020 Balance at beginning of period $ 56,418 $ 13,388 $ 16,524 $ 86,330 Less loans charged off 687 383 1,081 2,151 Recoveries on loans receivable previously charged off (1,497 ) (35 ) (213 ) (1,745 ) Provision (recovery) for credit losses (6,744 ) 7,809 (368 ) 697 Ending balance $ 50,484 $ 20,849 $ 15,287 $ 86,620 Individually evaluated $ 35 $ 1,623 $ 2,087 $ 3,745 Collectively evaluated $ 50,449 $ 19,226 $ 13,200 $ 82,875 Loans receivable $ 3,635,330 $ 765,484 $ 433,323 $ 4,834,137 Individually evaluated $ 48,220 $ 13,293 $ 7,338 $ 68,851 Collectively evaluated $ 3,587,110 $ 752,191 $ 425,985 $ 4,765,286 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, 2021 and 2020: Real Estate Commercial and Industrial Leases Receivable Total (in thousands) 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 Individually evaluated $ 8 $ 13 $ 2,173 $ 2,194 Collectively evaluated $ 56,055 $ 8,697 $ 9,667 $ 74,419 Loans receivable $ 3,883,366 $ 516,357 $ 459,142 $ 4,858,865 Individually evaluated $ 13,988 $ 313 $ 6,923 $ 21,224 Collectively evaluated $ 3,869,378 $ 516,044 $ 452,219 $ 4,837,641 September 30, 2020 Balance at beginning of period $ 36,435 $ 16,206 $ 8,767 $ 61,408 Adjustment related to adoption of ASU 2016-13 14,027 (2,497 ) 5,902 17,432 Adjusted balance as of January 1, 2020 50,462 13,709 14,669 78,840 Less loans charged off 14,920 12,972 3,306 31,198 Recoveries on loans receivable previously charged off (1,653 ) (179 ) (401 ) (2,233 ) Provision for credit losses 13,289 19,932 3,523 36,744 Ending balance $ 50,484 $ 20,849 $ 15,287 $ 86,620 Individually evaluated $ 35 $ 1,623 $ 2,087 $ 3,745 Collectively evaluated $ 50,449 $ 19,226 $ 13,200 $ 82,875 Loans receivable $ 3,635,330 $ 765,484 $ 433,323 $ 4,834,137 Individually evaluated $ 48,220 $ 13,293 $ 7,338 $ 68,851 Collectively evaluated $ 3,587,110 $ 752,191 $ 425,985 $ 4,765,286 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, 2021 December 31, 2020 Allowance Amount Total Loans Percentage of Total Loans Allowance Amount Total Loans Percentage of Total Loans (in thousands) Real estate loans: Commercial property Retail $ 5,294 $ 942,996 19.4 % $ 4,855 $ 824,606 16.9 % Hospitality 29,600 725,864 14.9 % 28,801 859,953 17.6 % Other 12,842 1,783,477 36.7 % 13,991 1,610,377 33.0 % Total commercial property loans 47,736 3,452,337 71.0 % 47,647 3,294,936 67.5 % Construction 7,565 76,168 1.6 % 2,876 58,882 1.2 % Residential/consumer loans 762 354,861 7.3 % 1,353 345,831 7.1 % Total real estate loans 56,063 3,883,366 79.9 % 51,876 3,699,649 75.8 % Commercial and industrial loans 8,710 516,357 10.6 % 21,410 757,255 15.5 % Leases receivable 11,840 459,142 9.5 % 17,140 423,264 8.7 % Total $ 76,613 $ 4,858,865 100.0 % $ 90,426 $ 4,880,168 100.0 % The following table represents the amortized cost basis of collateral-dependent loans by class of loans as of September 30, 2021 and December 31, 2020, for which repayment is expected to be obtained through the sale of the underlying collateral. September 30, 2021 December 31, 2020 Amortized Cost Amortized Cost (in thousands) Real estate loans: Commercial property Retail $ 2,628 $ 6,330 Hospitality — 20,612 Other (1) 128 8,410 Total commercial property loans 2,756 35,352 Construction 7,046 24,854 Residential/consumer loans 2,523 2,867 Total real estate loans 12,325 63,073 Commercial and industrial loans — 41 Total $ 12,325 $ 63,114 (1) Includes, among other types, mixed-use, apartment, office, industrial, gas stations, faith-based facilities 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) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total (in thousands) September 30, 2021 Real estate loans: Commercial property Risk Rating Pass / Pass-Watch $ 827,018 $ 722,970 $ 485,633 $ 434,177 $ 298,246 $ 495,077 $ 48,666 $ 3,311,787 Special Mention — 18,937 16,444 — 2,713 56,380 1,864 96,338 Classified — — 5,477 22,586 3,672 12,477 — 44,212 Total commercial property 827,018 741,907 507,554 456,763 304,631 563,934 50,530 3,452,337 Construction Risk Rating Pass / Pass Watch 38,304 13,450 — — — — — 51,754 Special Mention — — — — — 17,368 — 17,368 Classified — — — — — 7,046 — 7,046 Total construction 38,304 13,450 — — — 24,414 — 76,168 Residential/consumer loans Risk Rating Pass / Pass-Watch 116,334 19,299 250 23,202 93,590 89,701 6,795 349,171 Special Mention — — — 930 391 2,237 — 3,558 Classified — — — — 1,819 313 — 2,132 Total residential/consumer loans 116,334 19,299 250 24,132 95,800 92,251 6,795 354,861 Total real estate loans Risk Rating Pass / Pass-Watch 981,656 755,719 485,883 457,379 391,836 584,778 55,461 3,712,712 Special Mention — 18,937 16,444 930 3,104 75,985 1,864 117,264 Classified — — 5,477 22,586 5,491 19,836 — 53,390 Total real estate loans 981,656 774,656 507,804 480,895 400,431 680,599 57,325 3,883,366 Commercial and industrial loans: Risk Rating Pass / Pass-Watch 191,318 72,473 34,474 13,864 11,899 7,196 149,708 480,932 Special Mention — 4,448 4,602 4,017 70 13 151 13,301 Classified — — 13,825 221 32 6,004 2,042 22,124 Total commercial and industrial loans 191,318 76,921 52,901 18,102 12,001 13,213 151,901 516,357 Leases receivable: Risk Rating Pass / Pass-Watch 171,682 88,342 116,991 57,878 14,673 2,653 — 452,219 Special Mention — — — — — — — — Classified 148 474 4,174 1,418 410 299 — 6,923 Total leases receivable 171,830 88,816 121,165 59,296 15,083 2,952 — 459,142 Total loans receivable: Risk Rating Pass / Pass-Watch 1,344,656 916,534 637,348 529,121 418,408 594,627 205,169 4,645,863 Special Mention — 23,385 21,046 4,947 3,174 75,998 2,015 130,565 Classified 148 474 23,476 24,225 5,933 26,139 2,042 82,437 Total loans receivable $ 1,344,804 $ 940,393 $ 681,870 $ 558,293 $ 427,515 $ 696,764 $ 209,226 $ 4,858,865 Term Loans Amortized Cost Basis by Origination Year (1) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total December 31, 2020 Real estate loans: Commercial property Risk Rating Pass / Pass-Watch $ 920,876 $ 513,962 $ 479,221 $ 343,659 $ 418,361 $ 459,367 $ 31,283 $ 3,166,729 Special Mention 13,680 2,484 8,630 1,671 14,971 11,907 — 53,343 Classified — 3,528 7,303 4,712 21,351 37,840 130 74,864 Total commercial property 934,556 519,974 495,154 350,042 454,683 509,114 31,413 3,294,936 Construction Risk Rating Pass / Pass-Watch 33,415 613 — — — — — 34,028 Special Mention — — — — — — — — Classified — — — — 24,854 — — 24,854 Total construction 33,415 613 — — 24,854 — — 58,882 Residential/consumer loans Risk Rating Pass / Pass-Watch 27,997 962 37,123 127,987 82,124 54,003 7,353 337,549 Special Mention — — 930 829 537 2,782 — 5,078 Classified — — — 2,259 301 644 — 3,204 Total residential/consumer loans 27,997 962 38,053 131,075 82,962 57,429 7,353 345,831 Total real estate loans Risk Rating Pass / Pass-Watch 982,288 515,537 516,344 471,646 500,485 513,370 38,636 3,538,306 Special Mention 13,680 2,484 9,560 2,500 15,508 14,689 — 58,421 Classified — 3,528 7,303 6,971 46,506 38,484 130 102,922 Total real estate loans 995,968 521,549 533,207 481,117 562,499 566,543 38,766 3,699,649 Commercial and industrial loans: Risk Rating Pass / Pass-Watch 406,486 73,159 54,110 17,834 4,464 9,910 146,722 712,685 Special Mention 6,950 4,509 4,436 1,110 31 1,074 447 18,557 Classified — 890 5,115 9,465 4,380 1,519 4,644 26,013 Total commercial and industrial loans 413,436 78,558 63,661 28,409 8,875 12,503 151,813 757,255 Leases receivable: Risk Rating Pass / Pass-Watch 113,712 165,242 91,408 30,405 10,096 1,167 — 412,030 Special Mention — — — — — — — — Classified 452 5,728 3,137 876 804 237 — 11,234 Total leases receivable 114,164 170,970 94,545 31,281 10,900 1,404 — 423,264 Total loans receivable: Risk Rating Pass / Pass-Watch 1,502,486 753,938 661,862 519,885 515,045 524,447 185,358 4,663,021 Special Mention 20,630 6,993 13,996 3,610 15,539 15,763 447 76,978 Classified 452 10,146 15,555 17,312 51,690 40,240 4,774 140,169 Total loans receivable $ 1,523,568 $ 771,077 $ 691,413 $ 540,807 $ 582,274 $ 580,450 $ 190,579 $ 4,880,168 (1) Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision. Certain prior period amounts have been reclassified to conform to current period presentation. Loans by Vintage Year and Payment Performance Term Loans Amortized Cost Basis by Origination Year (1) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Total (in thousands) September 30, 2021 Real estate loans: Commercial property Payment performance Performing $ 827,018 $ 741,907 $ 507,554 $ 456,743 $ 303,236 $ 560,930 $ 50,530 $ 3,447,918 Nonperforming — — — 20 1,395 3,004 — 4,419 Total commercial property 827,018 741,907 507,554 456,763 304,631 563,934 50,530 3,452,337 Construction Payment performance Performing 38,304 13,450 — — — 17,368 — 69,122 Nonperforming — — — — — 7,046 — 7,046 Total construction 38,304 13,450 — — — 24,414 — 76,168 Residential/consumer loans Payment performance Performing 116,334 19,299 250 24,132 93,590 91,938 6,795 352,338 Nonperforming — — — — 2,210 313 — 2,523 Total residential/consumer loans 116,334 19,299 250 24,132 95,800 92,251 6,795 354,861 Total real estate loans Payment performance Performing 981,656 774,656 507,804 480,875 396,826 670,236 57,325 3,869,378 Nonperforming — — — 20 3,605 10,363 — 13,988 Total real estate loans 981,656 774,656 507,804 480,895 400,431 680,599 57,325 3,883,366 Commercial and industrial loans: Payment performance Performing 191,318 76,921 52,862 18,102 11,995 12,945 151,901 516,044 Nonperforming — — 39 — 6 268 — 313 Total commercial and industrial loans 191,318 76,921 52,901 18,102 12,001 13,213 151,901 516,357 Leases receivable: Payment performance Performing 171,668 88,342 116,991 57,878 14,673 2,653 — 452,205 Nonperforming 162 474 4,174 1,418 410 299 — 6,937 Total leases receivable 171,830 88,816 121,165 59,296 15,083 2,952 — 459,142 Total loans receivable: Payment performance Performing 1,344,642 939,919 677,657 556,855 423,494 685,834 209,226 4,837,627 Nonperforming 162 474 4,213 1,438 4,021 10,930 — 21,238 Total loans receivable $ 1,344,804 $ 940,393 $ 681,870 $ 558,293 $ 427,515 $ 696,764 $ 209,226 $ 4,858,865 Term Loans Amortized Cost Basis by Origination Year (1) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Total December 31, 2020 Real estate loans: Commercial property Payment performance Performing $ 934,556 $ 519,582 $ 495,132 $ 347,656 $ 437,230 $ 499,410 $ 31,283 $ 3,264,849 Nonperforming — 392 22 2,386 17,453 9,704 130 30,087 Total commercial property 934,556 519,974 495,154 350,042 454,683 509,114 31,413 3,294,936 Construction Payment performance Performing 33,415 613 — — — — — 34,028 Nonperforming — — — — 24,854 — — 24,854 Total construction 33,415 613 — — 24,854 — — 58,882 Residential/consumer loans Payment performance Performing 27,997 962 38,053 129,670 82,661 56,785 7,353 343,481 Nonperforming — — — 1,405 301 644 — 2,350 Total residential/consumer loans 27,997 962 38,053 131,075 82,962 57,429 7,353 345,831 Total real estate loans Payment performance Performing 995,968 521,157 533,185 477,326 519,891 556,195 38,636 3,642,358 Nonperforming — 392 22 3,791 42,608 10,348 130 57,291 Total real estate loans 995,968 521,549 533,207 481,117 562,499 566,543 38,766 3,699,649 Commercial and industrial loans: Payment performance Performing 413,436 77,668 59,726 19,002 8,875 12,227 151,813 742,747 Nonperforming — 890 3,935 9,407 — 276 — 14,508 Total commercial and industrial loans 413,436 78,558 63,661 28,409 8,875 12,503 151,813 757,255 Leases receivable: Payment performance Performing 113,712 165,242 91,408 30,405 10,096 1,167 — 412,030 Nonperforming 452 5,728 3,137 876 804 237 — 11,234 Total leases receivable 114,164 170,970 94,545 31,281 10,900 1,404 — 423,264 Total loans receivable: Payment performance Performing 1,523,116 764,067 684,319 526,733 538,862 569,589 190,449 4,797,135 Nonperforming 452 7,010 7,094 14,074 43,412 10,861 130 83,033 Total loans receivable $ 1,523,568 $ 771,077 $ 691,413 $ 540,807 $ 582,274 $ 580,450 $ 190,579 $ 4,880,168 (2) Includes extensions, renewals, or modifications of credit contracts, which consist of a new credit decision. Certain prior period amounts have been reclassified to conform to current period presentation. At September 30, 2021, of the $12.0 million of loans modified in accordance with the provision of the CARES Act, $2.6 million were pass and pass-watch, $6.4 million were special mention, and $3.0 million were classified. At December 31, 2020, of the $155.6 million of loans modified in accordance with the provision of the CARES Act, $99.9 million were pass and pass-watch, $31.3 million were special mention, and $24.4 million were classified. The following is an aging analysis of loans, disaggregated by loan class, as of the dates indicated: 30-59 Days Past Due 60-89 Days Past Due 90 Days or More Past Due Total Past Due Current Total Accruing 90 Days or More Past Due (in thousands) September 30, 2021 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ 942,996 $ 942,996 $ — Hospitality — — — — 725,864 725,864 — Other 1,945 — 128 2,073 1,781,404 1,783,477 — Total commercial property loans 1,945 — 128 2,073 3,450,264 3,452,337 — Construction — — — — 76,168 76,168 — Residential/consumer loans 1,641 — 1,404 3,045 351,816 354,861 — Total real estate loans 3,586 — 1,532 5,118 3,878,248 3,883,366 — Commercial and industrial loans — 13 — 13 516,344 516,357 — Leases receivable 2,891 1,532 1,636 6,059 453,083 459,142 13 Total loans receivable $ 6,477 $ 1,545 $ 3,168 $ 11,190 $ 4,847,675 $ 4,858,865 $ 13 December 31, 2020 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ 824,606 $ 824,606 $ — Hospitality — — 11,076 11,076 848,877 859,953 — Other — — 731 731 1,609,646 1,610,377 — Total commercial property loans — — 11,807 11,807 3,283,129 3,294,936 — Construction — 12,807 — 12,807 46,075 58,882 — Residential/consumer loans 4,693 461 564 5,718 340,113 345,831 — Total real estate loans 4,693 13,268 12,371 30,332 3,669,317 3,699,649 — Commercial and industrial loans 282 27 12,487 12,796 744,459 757,255 — Leases receivable 4,051 1,786 4,675 10,512 412,752 423,264 — Total loans receivable $ 9,026 $ 15,081 $ 29,533 $ 53,640 $ 4,826,528 $ 4,880,168 $ — At September 30, 2021 and December 31, 2020, currently modified loans under the CARES Act were $12.0 million and $155.6 million, respectively. Of the currently modified loans, $306,000 were 30-59 days past due, no loans were 60-89 days past due, and $94,000 were 90 days or more past due at September 30, 2021, and all loans were current at December 31, 2020. For loans previously modified under the CARES Act, $4.4 million were 30-59 days past due, $900,000 were 60-89 days past due, and $2.2 million were 90 days or more past due at September 30, 2021 and $4.9 million were 30-59 days past due, $1.7 million were 60-89 days past due, and $13.9 million were 90 days or more past due at December 31, 2020. Individually Evaluated Loans The Company reviews all loans on an individual basis when they do not share similar risk characteristics with loan pools. The following is a summary of interest foregone on nonaccrual loans for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 (in thousands) Interest income that would have been recognized had individually evaluated loans performed in accordance with their original terms $ 627 $ 1,482 $ 2,830 $ 4,092 Less: Interest income recognized on individually evaluated loans (106 ) (204 ) (362 ) (1,319 ) Interest foregone on individually evaluated loans $ 521 $ 1,278 $ 2,468 $ 2,773 There were no commitments to lend additional funds to borrowers whose loans are included above. 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, 2021 and December 31, 2020. September 30, 2021 Nonaccrual Loans With No Allowance for Credit Losses Nonaccrual Loans With Allowance for Credit Losses Loans Past Due 90 Days Still Accruing Total Nonperforming Loans (in thousands) Real estate loans: Commercial property Retail $ 2,628 $ — $ — $ 2,628 Hospitality — — — — Other 1,440 351 — 1,791 Total commercial property loans 4,068 351 — 4,419 Construction 7,046 — — 7,046 Residential/consumer loans 2,523 — — 2,523 Total real estate loans 13,637 351 — 13,988 Commercial and industrial loans 11 302 — 313 Leases receivable 785 6,139 13 6,937 Total $ 14,433 $ 6,792 $ 13 $ 21,238 December 31, 2020 Nonaccrual Loans With No Allowance for Credit Losses Nonaccrual Loans With Allowance for Credit Losses Loans Past Due 90 Days Still Accruing Total Nonperforming Loans (in thousands) Real estate loans: Commercial property Retail $ 6,331 $ — $ — $ 6,331 Hospitality 20,611 — — 20,611 Other 2,236 909 — 3,145 Total commercial property loans 29,178 909 — 30,087 Construction 24,854 — — 24,854 Residential/consumer loans 2,350 — — 2,350 Total real estate loans 56,382 909 — 57,291 Commercial and industrial loans 58 14,450 — 14,508 Leases receivable 2,318 8,916 — 11,234 Total $ 58,758 $ 24,275 $ — $ 83,033 The following table details nonperforming assets as of the dates indicated: September 30, 2021 December 31, 2020 (in thousands) Nonaccrual loans $ 21,225 $ 83,033 Loans receivable 90 days or more past due and still accruing 13 — Total nonperforming loans receivable 21,238 83,033 Other real estate owned ("OREO") 675 2,360 Total nonperforming assets $ 21,913 $ 85,393 OREO is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020. Troubled Debt Restructurings As of September 30, 2021 and December 31, 2020, TDRs were $11.3 million and $25.0 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. In addition, the concession granted must result in a reduction in the borrower’s payment for a period of three months or more in order to be classified as a TDR. The following table details TDRs as of September 30, 2021 and December 31, 2020: Nonaccrual TDRs Accrual TDRs Deferral of Principal Deferral of Principal and Interest Reduction of Principal and Interest Extension of Maturity Total Deferral of Principal Deferral of Principal and Interest Reduction of Principal and Interest Extension of Maturity Total (in thousands) September 30, 2021 Real estate loans $ 393 $ 2,756 $ 7,437 $ — $ 10,586 $ 559 $ — $ — $ — $ 559 Commercial and industrial loans — 130 — — 130 — — 1 11 12 Total $ 393 $ 2,886 $ 7,437 $ — $ 10,716 $ 559 $ — $ 1 $ 11 $ 571 December 31, 2020 Real estate loans $ 1,095 $ 3,334 $ 12,492 $ — $ 16,921 $ 513 $ — $ 67 $ 7,290 $ 7,870 Commercial and industrial loans — 144 — — 144 — — 4 56 60 Total $ 1,095 $ 3,478 $ 12,492 $ — $ 17,065 $ 513 $ — $ 71 $ 7,346 $ 7,930 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, 2021 December 31, 2020 Number of Loans Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Number of Loans Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment (in thousands except for number of loans) Real estate loans — $ — $ — 5 $ 4,479 $ 3,676 Commercial and industrial loans — — — — — — Total — $ — $ — 5 $ 4,479 $ 3,676 Nine Months ended Twelve Months ended September 30, 2021 December 31, 2020 Number of Loans Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment Number of Loans Pre- Modification Outstanding Recorded Investment Post- Modification Outstanding Recorded Investment (in thousands except for number of loans) Real estate loans — $ — $ — 5 $ 4,479 $ 3,676 Commercial and industrial loans — — — — — — Total — $ — $ — 5 $ 4,479 $ 3,676 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, 2021 and December 31, 2020, the allowance resulting from the individual evaluation of TDRs was inconsequential. 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 and nine months ended September 30, 2021 following modification. During the year ended December 31, 2020, one loan for $398,000 defaulted within the twelve-month period following modification. The allowance for credit losses resulting from this defaulted loan was inconsequential. |