Loans | Note 3 — Loans Loans Receivable Loans consisted of the following as of the dates indicated: June 30, 2022 December 31, 2021 (in thousands) Real estate loans: Commercial property Retail $ 1,071,379 $ 970,134 Hospitality 651,586 717,692 Other (1) 2,011,727 1,919,033 Total commercial property loans 3,734,692 3,606,859 Construction 94,882 95,006 Residential (2) 521,576 400,546 Total real estate loans 4,351,150 4,102,411 Commercial and industrial loans 766,894 561,831 Equipment financing agreements 537,358 487,299 Loans receivable 5,655,402 5,151,541 Allowance for credit losses (73,067 ) (72,557 ) Loans receivable, net $ 5,582,335 $ 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 $2.7 million of home equity loans and lines, and $5.9 million of personal loans. At June 30, 2022 and December 31, 2021, PPP loans of $1.1 million and $3.0 million, respectively, were included in commercial and industrial loans in the table above. Accrued interest on loans was $12.0 million and $10.1 million at June 30, 2022 and December 31, 2021, respectively. At June 30, 2022 and December 31, 2021, loans of $2.45 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 June 30, 2022 and 2021: Real Estate Commercial and Industrial Total (in thousands) June 30, 2022 Balance at beginning of period $ 11,825 $ 3,792 $ 15,617 Originations and transfers 29,531 15,320 44,851 Sales (30,380 ) (11,557 ) (41,937 ) Principal paydowns and amortization — (3 ) (3 ) Balance at end of period $ 10,976 $ 7,552 $ 18,528 June 30, 2021 Balance at beginning of period $ 10,930 $ 21,744 $ 32,674 Originations and transfers 26,185 12,938 39,123 Sales (24,022 ) (11,738 ) (35,760 ) Principal paydowns and amortization (1 ) (6 ) (7 ) Balance at end of period $ 13,092 $ 22,938 $ 36,030 Loans held for sale was comprised of $18.5 million and $13.3 million of the guaranteed portion of SBA 7(a) loans at June 30, 2022 and December 31, 2021, respectively. All second draw PPP loans were sold by the third quarter of 2021. For the three and six months ended June 30, 2021, the Company recognized $0.2 million and $2.7 million, respectively, of gains on the sale of $9.5 million and $118.1 million, respectively, of second draw PPP loans. The following is the activity for loans held for sale for the six months ended June 30, 2022 and 2021: Real Estate Commercial and Industrial Total (in thousands) June 30, 2022 Balance at beginning of period $ 6,954 $ 6,388 $ 13,342 Originations and transfers 49,695 27,009 76,704 Sales (45,673 ) (25,841 ) (71,514 ) Principal payoffs and amortization — (4 ) (4 ) Balance at end of period $ 10,976 $ 7,552 $ 18,528 June 30, 2021 Balance at beginning of period $ 8,042 $ 526 $ 8,568 Originations and transfers 42,468 38,834 81,302 Sales (37,417 ) (16,416 ) (53,833 ) Principal payoffs and amortization (1 ) (6 ) (7 ) Balance at end of period $ 13,092 $ 22,938 $ 36,030 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 June 30, 2022 and 2021: Real Estate Commercial and Industrial Equipment Financing Agreements Total (in thousands) June 30, 2022 Balance at beginning of period $ 46,355 $ 12,944 $ 12,213 $ 71,512 Less loans charged off — 21 585 606 Recoveries on loans receivable previously charged off (64 ) (133 ) (325 ) (522 ) Provision (recovery) for credit losses (307 ) 1,219 727 1,639 Ending balance $ 46,112 $ 14,275 $ 12,680 $ 73,067 June 30, 2021 Balance at beginning of period $ 57,762 $ 16,387 $ 14,243 $ 88,392 Less loans charged off — 271 1,200 1,471 Recoveries on loans receivable previously charged off (180 ) (174 ) (209 ) (563 ) Provision (recovery) for credit losses 5,087 (8,231 ) (968 ) (4,112 ) Ending balance $ 63,029 $ 8,059 $ 12,284 $ 83,372 The following table details the information on the allowance for credit losses by portfolio segment as of and for the six months ended June 30, 2022 and 2021: Real Estate Commercial and Industrial Equipment Financing Agreements Total (in thousands) June 30, 2022 Balance at beginning of period $ 48,890 $ 12,418 $ 11,249 72,557 Less loans charged off 530 79 832 1,441 Recoveries on loans receivable previously charged off (259 ) (451 ) (747 ) (1,457 ) Provision (recovery) for credit losses (2,507 ) 1,485 1,516 494 Ending balance $ 46,112 $ 14,275 $ 12,680 $ 73,067 June 30, 2021 Balance at beginning of period $ 51,876 $ 21,410 $ 17,140 $ 90,426 Less loans charged off 1,509 365 3,102 4,976 Recoveries on loans receivable previously charged off (453 ) (273 ) (344 ) (1,070 ) Provision (recovery) for credit losses 12,209 (13,259 ) (2,098 ) (3,148 ) Ending balance $ 63,029 $ 8,059 $ 12,284 $ 83,372 The table below illustrates the allowance for credit losses by loan portfolio segment and each loan portfolio segment as a percentage of total loans. June 30, 2022 December 31, 2021 Allowance Amount Percentage of Total Allowance Total Loans Percentage of Total Loans Allowance Amount Percentage of Total Allowance Total Loans Percentage of Total Loans (dollars in thousands) Real estate loans: Commercial property Retail $ 7,889 10.8 % $ 1,071,379 18.9 % $ 6,579 9.1 % $ 970,134 18.8 % Hospitality 16,935 23.2 % 651,586 11.5 % 22,670 31.2 % 717,692 13.9 % Other 16,832 23.0 % 2,011,727 35.6 % 15,065 20.8 % 1,919,033 37.3 % Total commercial property loans 41,656 57.0 % 3,734,692 66.0 % 44,314 61.1 % 3,606,859 70.0 % Construction 3,915 5.4 % 94,882 1.7 % 4,078 5.6 % 95,006 1.8 % Residential 541 0.7 % 521,576 9.2 % 498 0.7 % 400,546 7.8 % Total real estate loans 46,112 63.1 % 4,351,150 76.9 % 48,890 67.4 % 4,102,411 79.6 % Commercial and industrial loans 14,275 19.5 % 766,894 13.6 % 12,418 17.1 % 561,831 10.9 % Equipment financing agreements 12,680 17.4 % 537,358 9.5 % 11,249 15.5 % 487,299 9.5 % Total $ 73,067 100.0 % $ 5,655,402 100.0 % $ 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 June 30, 2022 and December 31, 2021, for which repayment is expected to be obtained through the sale of the underlying collateral. June 30, 2022 December 31, 2021 Amortized Cost Amortized Cost (in thousands) Real estate loans: Commercial property Retail $ 1,647 $ 1,917 Hospitality — — Other (1) 1,409 499 Total commercial property loans 3,056 2,416 Residential 1,300 982 Total real estate loans 4,356 3,398 Total $ 4,356 $ 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 g raded 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 Loans Amortized Cost Basis Total (in thousands) June 30, 2022 Real estate loans: Commercial property Risk Rating Pass / Pass-Watch $ 879,948 $ 946,844 $ 647,528 $ 435,041 $ 335,270 $ 340,079 $ 40,419 $ 3,625,129 Special Mention — — 18,260 9,665 21,604 15,029 1,702 66,260 Classified 855 — — 5,846 15,406 21,196 — 43,303 Total commercial property 880,803 946,844 665,788 450,552 372,280 376,304 42,121 3,734,692 Construction Risk Rating Pass / Pass-Watch 27,800 67,082 — — — — — 94,882 Special Mention — — — — — — — — Classified — — — — — — — — Total construction 27,800 67,082 — — — — — 94,882 Residential Risk Rating Pass / Pass-Watch 171,190 181,418 13,869 239 15,061 131,140 7,315 520,232 Special Mention — — 351 — — 44 — 395 Classified — — — — — 949 — 949 Total residential 171,190 181,418 14,220 239 15,061 132,133 7,315 521,576 Total real estate loans Risk Rating Pass / Pass-Watch 1,078,938 1,195,344 661,397 435,280 350,331 471,219 47,734 4,240,243 Special Mention — — 18,611 9,665 21,604 15,073 1,702 66,655 Classified 855 — — 5,846 15,406 22,145 — 44,252 Total real estate loans 1,079,793 1,195,344 680,008 450,791 387,341 508,437 49,436 4,351,150 Commercial and industrial loans: Risk Rating Pass / Pass-Watch 293,422 146,800 48,760 31,896 12,953 15,109 201,245 750,185 Special Mention — — — 13,687 — 112 (1 ) 13,798 Classified — 36 — 94 113 726 1,942 2,911 Total commercial and industrial loans 293,422 146,836 48,760 45,677 13,066 15,947 203,186 766,894 Equipment financing agreements: Risk Rating Pass / Pass-Watch 158,217 202,589 61,068 74,023 30,769 4,848 — 531,514 Special Mention — — — — — — — — Classified — 1,682 480 2,646 903 133 — 5,844 Total equipment financing agreements 158,217 204,271 61,548 76,669 31,672 4,981 — 537,358 Total loans receivable: Risk Rating Pass / Pass-Watch 1,530,577 1,544,733 771,225 541,199 394,053 491,176 248,979 5,521,942 Special Mention — — 18,611 23,352 21,604 15,185 1,701 80,453 Classified 855 1,718 480 8,586 16,422 23,004 1,942 53,007 Total loans receivable $ 1,531,432 $ 1,546,451 $ 790,316 $ 573,137 $ 432,079 $ 529,365 $ 252,622 $ 5,655,402 (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 Loans Amortized Cost Basis 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 Loans Amortized Cost Basis Total (in thousands) June 30, 2022 Real estate loans: Commercial property Payment performance Performing $ 880,803 $ 946,844 $ 665,788 $ 450,552 $ 372,280 $ 372,661 $ 42,121 $ 3,731,049 Nonperforming — — — — — 3,643 — 3,643 Total commercial property 880,803 946,844 665,788 450,552 372,280 376,304 42,121 3,734,692 Construction Payment performance Performing 27,800 67,082 — — — — — 94,882 Nonperforming — — — — — — — — Total construction 27,800 67,082 — — — — — 94,882 Residential Payment performance Performing 171,190 181,418 13,869 239 15,061 131,184 7,315 520,276 Nonperforming — — 351 — — 949 — 1,300 Total residential 171,190 181,418 14,220 239 15,061 132,133 7,315 521,576 Total real estate loans Payment performance Performing 1,079,793 1,195,344 679,657 450,791 387,341 503,845 49,436 4,346,207 Nonperforming — — 351 — — 4,592 — 4,943 Total real estate loans 1,079,793 1,195,344 680,008 450,791 387,341 508,437 49,436 4,351,150 Commercial and industrial loans: Payment performance Performing 293,422 146,800 48,760 45,669 13,066 15,733 203,186 766,636 Nonperforming — 36 — 8 — 214 — 258 Total commercial and industrial loans 293,422 146,836 48,760 45,677 13,066 15,947 203,186 766,894 Equipment financing agreements: Payment performance Performing 158,217 202,589 61,068 74,023 30,769 4,848 — 531,514 Nonperforming — 1,682 480 2,646 903 133 — 5,844 Total equipment financing agreements 158,217 204,271 61,548 76,669 31,672 4,981 — 537,358 Total loans receivable: Payment performance Performing 1,531,432 1,544,733 789,485 570,483 431,176 524,426 252,622 5,644,357 Nonperforming — 1,718 831 2,654 903 4,939 — 11,045 Total loans receivable $ 1,531,432 $ 1,546,451 $ 790,316 $ 573,137 $ 432,079 $ 529,365 $ 252,622 $ 5,655,402 (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 Loans Amortized Cost Basis 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, 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) June 30, 2022 Real estate loans: Commercial property Retail $ — $ — $ — $ — $ 1,071,379 $ 1,071,379 $ — Hospitality — — — — 651,586 651,586 — Other 269 — 1,062 1,331 2,010,396 2,011,727 — Total commercial property loans 269 — 1,062 1,331 3,733,361 3,734,692 — Construction — — — — 94,882 94,882 — Residential 1,078 — 539 1,617 519,959 521,576 — Total real estate loans 1,347 — 1,601 2,948 4,348,202 4,351,150 — Commercial and industrial loans 63 8 — 71 766,823 766,894 — Equipment financing agreements 3,286 587 1,616 5,489 531,869 537,358 — Total loans receivable $ 4,696 $ 595 $ 3,217 $ 8,508 $ 5,646,894 $ 5,655,402 $ — 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 $ — Individually Evaluated Loans The Company reviews all loans on an individual basis when they do not share similar risk characteristics with loan pools. 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 June 30, 2022 and December 31, 2021. June 30, 2022 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 $ 1,647 $ — $ — $ 1,647 Other 1,737 259 — 1,996 Total commercial property loans 3,384 259 — 3,643 Residential 1,300 — — 1,300 Total real estate loans 4,684 259 — 4,943 Commercial and industrial loans — 258 — 258 Equipment financing agreements 718 5,126 — 5,844 Total $ 5,402 $ 5,643 $ — $ 11,045 December 31, 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 $ 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 recognized $9,000 and $136,000 of interest income on nonaccrual loans for the three months ended June 30, 2022 and 2021, respectively. Interest income recognized on nonaccrual loans for the six months ended June 30, 2022 and 2021 was $36,000 and $287,000, respectively. The following table details nonperforming assets as of the dates indicated: June 30, 2022 December 31, 2021 (in thousands) Nonaccrual loans $ 11,045 $ 13,360 Loans receivable 90 days or more past due and still accruing — — Total nonperforming loans receivable 11,045 13,360 Other real estate owned ("OREO") 675 675 Total nonperforming assets $ 11,720 $ 14,035 OREO is included in prepaid expenses and other assets in the accompanying Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021. Troubled Debt Restructurings As of June 30, 2022 and December 31, 2021, TDRs were $2.3 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 June 30, 2022 and December 31, 2021: 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) June 30, 2022 Real estate loans $ 299 $ 1,764 $ 91 $ — $ 2,154 $ — $ — $ — $ — $ — Commercial and industrial loans — 115 — — 115 — — — — — Total $ 299 $ 1,879 $ 91 $ — $ 2,269 $ — $ — $ — $ — $ — 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 June 30, 2022 December 31, 2021 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 — $ — $ — — $ — $ — Total — $ — $ — — $ — $ — Six Months ended Twelve Months ended June 30, 2022 December 31, 2021 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 1 $ 92 $ 91 — $ — $ — Total 1 $ 92 $ 91 — $ — $ — 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 June 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 months ended June 30, 2022 following modification. One SBA business property loan for $91,000 defaulted during the six months ended June 30, 2022 following modification. No loss was incurred in connection with this default. During the year ended December 31, 2021, no loans defaulted within the twelve-month period following modification. |