Loans Receivable and Allowance for Credit Losses | Loans Receivable and Allowance for Credit Losses The following is a summary of loans receivable by major category: September 30, 2020 December 31, 2019 Loan portfolio composition (Dollars in thousands) Real estate loans: Residential $ 54,585 $ 52,558 Commercial 8,347,358 8,316,470 Construction 311,593 295,523 Total real estate loans 8,713,536 8,664,551 Commercial business 1 3,700,020 2,721,183 Residential mortgage 659,876 835,188 Consumer and other 46,793 55,085 Loans receivable 13,120,225 12,276,007 Allowance for credit losses (179,849) (94,144) Loans receivable, net of allowance for credit losses $ 12,940,376 $ 12,181,863 __________________________________ 1 Commercial Business loans as of September 30, 2020 includes $464.6 million in SBA Paycheck Protection Program Loans Loans receivable is stated at the amount of unpaid principal, adjusted for net deferred fees and costs, premiums and discounts, purchase accounting fair value adjustments, and allowance for credit losses. Loan balances as of December 31, 2019 have been reclassified based on the Company’s current presentation and represent amortized cost balances which are net of deferred fees and costs. The Company had net deferred fees of $5.4 million and net deferred costs of $2.7 million at September 30, 2020 and December 31, 2019, respectively. The loan portfolio consists of four segments: real estate, commercial business, residential mortgage, and consumer and other loans. Real estate loans are extended for the purchase and refinance of commercial real estate and are generally secured by first deeds of trust and are collateralized by residential or commercial properties. Commercial business loans are loans provided to businesses for various purposes such as for working capital, purchasing inventory, debt refinancing, business acquisitions, international trade finance activities, and other business related financing needs and also include warehouse lines of credit and SBA Paycheck Protection Program (“PPP”) loans. Residential mortgage loans are extended for personal, family, or household use and are secured by a mortgage or deed of trust. Consumer and other loans consist of home equity, credit card, and other personal loans. On January 1, 2020, the Company adopted ASU 2016-13, or CECL, using the modified retrospective method for all of its loans measured at amortized cost. With the adoption of CECL, the Company reassessed its loan portfolio segments and classes of loans receivable and made changes based on the new allowance for credit losses methodology. As a result, the Company now discloses residential mortgage loans as a separate segment and class of receivable. Trade finance loans, which were previously disclosed as a distinct segment and class of receivable, are now combined with commercial business loans. Prior period balances have been reclassified to conform with the current presentation. The tables below details the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2020 and 2019. Accrued interest receivable on loans totaled $53.5 million at September 30, 2020 and $26.2 million at December 31, 2019. Real Estate Commercial Business Residential Mortgage Consumer and Other Total (Dollars in thousands) Three Months Ended September 30, 2020 Balance, beginning of period $ 119,030 $ 35,493 $ 5,868 $ 1,380 $ 161,771 Provision (credit) for credit losses 15,748 7,265 (1,169) 156 22,000 Loans charged off (5,313) (800) — (237) (6,350) Recoveries of charge offs 159 2,251 — 18 2,428 Balance, end of period $ 129,624 $ 44,209 $ 4,699 $ 1,317 $ 179,849 Nine Months Ended September 30, 2020 Balance, beginning of period $ 53,593 $ 33,032 $ 5,925 $ 1,594 $ 94,144 CECL day 1 adoption 27,791 (1,022) (543) (26) 26,200 Provision (credit) for credit losses 55,773 11,663 (683) 747 67,500 Loans charged off (7,884) (4,294) — (1,033) (13,211) Recoveries of charge offs 351 4,830 — 35 5,216 Balance, end of period $ 129,624 $ 44,209 $ 4,699 $ 1,317 $ 179,849 Real Estate Commercial Business Residential Mortgage Consumer and Other Total (Dollars in thousands) Three Months Ended September 30, 2019 Balance, beginning of period $ 54,084 $ 32,364 $ 5,514 $ 2,104 $ 94,066 Provision (credit) for loan losses (87) 2,286 (207) 108 2,100 Loans charged off (1,197) (1,124) — (281) (2,602) Recoveries of charge offs 246 528 — 6 780 PCI allowance adjustment — — — (462) (462) Balance, end of period $ 53,046 $ 34,054 $ 5,307 $ 1,475 $ 93,882 Nine Months Ended September 30, 2019 Balance, beginning of period $ 56,767 $ 28,484 $ 5,207 $ 2,099 $ 92,557 Provision (credit) for loan losses (4,225) 9,693 176 656 6,300 Loans charged off (1,439) (4,083) (76) (834) (6,432) Recoveries of charge offs 1,943 838 — 16 2,797 PCI allowance adjustment — (878) — (462) (1,340) Balance, end of period $ 53,046 $ 34,054 $ 5,307 $ 1,475 $ 93,882 The following tables break out the allowance for credit losses and loan balance by measurement methodology at September 30, 2020 and December 31, 2019: September 30, 2020 Real Estate Commercial Business Residential Mortgage Consumer and Other Total (Dollars in thousands) Allowance for credit losses: Individually evaluated $ 2,339 $ 4,485 $ 21 $ 50 $ 6,895 Collectively evaluated 127,285 39,724 4,678 1,267 172,954 Total $ 129,624 $ 44,209 $ 4,699 $ 1,317 $ 179,849 Loans outstanding: Individually evaluated $ 76,025 $ 24,930 $ 3,775 $ 802 $ 105,532 Collectively evaluated 8,637,511 3,675,090 656,101 45,991 13,014,693 Total $ 8,713,536 $ 3,700,020 $ 659,876 $ 46,793 $ 13,120,225 December 31, 2019 Real Estate Commercial Business Residential Mortgage Consumer and Other Total (Dollars in thousands) Allowance for loan losses: Individually evaluated for impairment $ 312 $ 3,073 $ 10 $ 7 $ 3,402 Collectively evaluated for impairment 48,616 26,914 5,913 1,220 82,663 PCI loans 4,665 3,045 2 367 8,079 Total $ 53,593 $ 33,032 $ 5,925 $ 1,594 $ 94,144 Loans outstanding: Individually evaluated for impairment $ 64,684 $ 22,905 $ 2,762 $ 301 $ 90,652 Collectively evaluated for impairment 8,502,103 2,691,378 832,268 54,037 12,079,786 PCI loans 97,764 6,900 158 747 105,569 Total $ 8,664,551 $ 2,721,183 $ 835,188 $ 55,085 $ 12,276,007 As of September 30, 2020 and December 31, 2019, reserves for unfunded loan commitments recorded in other liabilities were $1.3 million and $636 thousand, respectively. For the three and nine months ended September 30, 2020, the Company recorded additions to reserves for unfunded commitments recorded in credit related expenses totaling $0 and $660 thousand, respectively. For the three and nine months ended September 30, 2019, the Company recorded reductions to reserves for unfunded commitments recorded in credit related expenses totaling to $100 thousand. Generally, loans are placed on nonaccrual status if principal and/or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to customers whose financial conditions have deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status only when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company does not recognize interest income while loans are on nonaccrual status. The tables below represent the recorded investment of nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans and broken out by loans with a recorded ACL and those without a recorded ACL as of September 30, 2020 and total nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans as of December 31, 2019. September 30, 2020 Nonaccrual with No ACL Nonaccrual with an ACL Total Nonaccrual (1) Accruing Loans Past Due 90 or More Days (Dollars in thousands) Real estate – residential $ — $ — $ — $ — Real estate – commercial Retail 8,023 3,688 11,711 — Hotel & motel 14,280 2,260 16,540 — Gas station & car wash 351 928 1,279 — Mixed use 1,531 815 2,346 293 Industrial & warehouse 4,618 1,950 6,568 — Other 4,576 2,121 6,697 — Real estate – construction 6,598 — 6,598 — Commercial business 4,351 8,671 13,022 — Residential mortgage 2,335 1,440 3,775 — Consumer and other — 669 669 1,244 Total $ 46,663 $ 22,542 $ 69,205 $ 1,537 December 31, 2019 Nonaccrual Loans (1)(2) Accruing Loans Past Due 90 or More Days (Dollars in thousands) Real estate – residential $ — $ — Real estate – commercial Retail 2,934 449 Hotel & motel 10,901 — Gas station & car wash 271 — Mixed use 665 634 Industrial & warehouse 10,544 — Other 5,455 919 Real estate – construction 10,165 3,850 Commercial business 10,893 1,096 Residential mortgage 2,753 — Consumer and other 204 599 Total $ 54,785 $ 7,547 __________________________________ (1) Total nonaccrual loans exclude the guaranteed portion of SBA loans that are in liquidation totaling $26.2 million and $28.1 million, at September 30, 2020 and December 31, 2019, respectively. (2) Nonaccrual loans exclude PCI loans of $18.3 million at December 31, 2019. The following table presents the amortized cost basis of collateral-dependent loans as of September 30, 2020: September 30, 2020 Real Estate Collateral Other Collateral Total (Dollars in thousands) Real Estate - Residential $ — $ — $ — Real Estate - Commercial 55,024 — 55,024 Real Estate - Construction 6,598 — 6,598 Commercial Business 7,581 5,415 12,996 Residential Mortgage 2,335 — 2,335 Consumer and Other 11 — 11 Total $ 71,549 $ 5,415 $ 76,964 Interest income reversals due to loans being placed on nonaccrual status was $76 thousand and $85 thousand for the three months ended September 30, 2020 and 2019, respectively. Nonaccrual interest income reversals for the nine months ended September 30, 2020 and 2019 was $611 thousand and $1.1 million, respectively. The following table presents the recorded investment of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of September 30, 2020 and December 31, 2019 by class of loans: As of September 30, 2020 As of December 31, 2019 30-59 Days 60-89 Days 90 or More Days Total 30-59 Days 60-89 Days 90 or More Days Total (1) (Dollars in thousands) Real estate – residential $ — $ — $ — $ — $ — $ — $ — $ — Real estate – commercial Retail 328 44,776 10,074 55,178 1,083 1,424 3,037 5,544 Hotel & motel 534 2,081 13,679 16,294 1,346 936 6,409 8,691 Gas station & car wash 461 — 763 1,224 997 2,038 196 3,231 Mixed use 551 — 1,348 1,899 593 — 801 1,394 Industrial & warehouse 467 1,095 3,735 5,297 94 45 3,946 4,085 Other 2,054 2,671 1,120 5,845 811 785 3,704 5,300 Real estate – construction — 8,122 6,598 14,720 — — 14,015 14,015 Commercial business 638 575 6,740 7,953 401 352 5,717 6,470 Residential mortgage 1,185 2,456 2,821 6,462 9,676 792 2,038 12,506 Consumer and other 66 509 1,853 2,428 176 122 614 912 Total Past Due $ 6,284 $ 62,285 $ 48,731 $ 117,300 $ 15,177 $ 6,494 $ 40,477 $ 62,148 __________________________________ (1) Past due loans at December 31, 2019 exclude PCI loans totaling $15.0 million. The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. Homogeneous loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans) are not risk rated and credit risk is analyzed largely by the number of days past due. This analysis is performed at least on a quarterly basis. The definitions for risk ratings are as follows: • Pass: Loans that meet a preponderance or more of the Company’s underwriting criteria and evidence an acceptable level of risk. • Special Mention: Loans that have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. • Substandard: Loans that are inadequately protected by the current net worth and paying capacity of the borrower or by the collateral pledged, if any. Loans in this classification have a well-defined weakness or weaknesses that jeopardize the repayment of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. • Doubtful: Loans that have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or repayment in full, on the basis of currently existing facts, conditions, and values, highly questionable and improbable. The following table presents the amortized cost basis of loans receivable by class, credit quality indicator, and year of origination as of September 30, 2020. As of September 30, 2020 Term Loan by Origination Year Revolving Loans Total 2020 2019 2018 2017 2016 Prior (Dollars in thousands) Real Estate - Residential Pass/Not Rated $ 5,818 $ 16,509 $ 11,599 $ 4,352 $ 7,592 $ 5,061 $ 3,429 $ 54,360 Special mention — — — — — — — — Substandard — — 140 — — 85 — 225 Doubtful/Loss — — — — — — — — Subtotal $ 5,818 $ 16,509 $ 11,739 $ 4,352 $ 7,592 $ 5,146 $ 3,429 $ 54,585 Real Estate - Commercial Pass/Not Rated $ 1,112,640 $ 1,587,016 $ 1,605,796 $ 1,297,459 $ 868,639 $ 1,468,638 $ 104,518 $ 8,044,706 Special mention — 2,047 12,923 17,203 1,681 10,082 — 43,936 Substandard — 12,090 25,640 24,666 41,610 151,514 3,196 258,716 Doubtful/Loss — — — — — — — — Subtotal $ 1,112,640 $ 1,601,153 $ 1,644,359 $ 1,339,328 $ 911,930 $ 1,630,234 $ 107,714 $ 8,347,358 Real Estate - Construction Pass/Not Rated $ 29,382 $ 38,336 $ 109,419 $ 82,598 $ 5,608 $ 10,031 $ — $ 275,374 Special mention — — — — 5,774 5,124 — 10,898 Substandard — — — 10,601 — 8,122 — 18,723 Doubtful/Loss — — — 6,598 — — — 6,598 Subtotal $ 29,382 $ 38,336 $ 109,419 $ 99,797 $ 11,382 $ 23,277 $ — $ 311,593 Commercial Business Pass/Not Rated $ 979,904 $ 628,028 $ 246,008 $ 134,655 $ 90,613 $ 55,025 $ 1,437,781 $ 3,572,014 Special mention 5,990 27,099 31,111 15,083 6,503 3,007 9,644 98,437 Substandard 1,485 851 6,534 4,459 6,864 5,071 4,263 29,527 Doubtful/Loss — — — — 42 — — 42 Subtotal $ 987,379 $ 655,978 $ 283,653 $ 154,197 $ 104,022 $ 63,103 $ 1,451,688 $ 3,700,020 Residential Mortgage Pass/Not Rated $ 4,881 $ 111,963 $ 251,894 $ 184,337 $ 60,122 $ 42,747 $ — $ 655,944 Special mention — — — — — — — — Substandard — 122 1,448 — 1,717 645 — 3,932 Doubtful/Loss — — — — — — — — Subtotal $ 4,881 $ 112,085 $ 253,342 $ 184,337 $ 61,839 $ 43,392 $ — $ 659,876 Consumer and Other Pass/Not Rated $ 5,747 $ 2,602 $ 2,051 $ 2,687 $ 5,203 $ 2,881 $ 24,726 $ 45,897 Special mention — — — 117 — — — 117 Substandard — — — — 40 739 — 779 Doubtful/Loss — — — — — — — — Subtotal $ 5,747 $ 2,602 $ 2,051 $ 2,804 $ 5,243 $ 3,620 $ 24,726 $ 46,793 Total Loans Pass/Not Rated $ 2,138,372 $ 2,384,454 $ 2,226,767 $ 1,706,088 $ 1,037,777 $ 1,584,383 $ 1,570,454 $ 12,648,295 Special mention 5,990 29,146 44,034 32,403 13,958 18,213 9,644 153,388 Substandard 1,485 13,063 33,762 39,726 50,231 166,176 7,459 311,902 Doubtful/Loss — — — 6,598 42 — — 6,640 Total $ 2,145,847 $ 2,426,663 $ 2,304,563 $ 1,784,815 $ 1,102,008 $ 1,768,772 $ 1,587,557 $ 13,120,225 For the three and nine months ended September 30, 2020, there were no revolving loans converted to term loans. The following table presents the recorded investment in the Company’s loans by loan class and credit risk rating as of December 31, 2019. As of December 31, 2019 Pass/Not Rated Special Mention Substandard Doubtful Total (Dollars in thousands) Real estate – residential $ 52,096 $ — $ 462 $ — $ 52,558 Real estate – commercial 8,039,751 78,519 198,200 — 8,316,470 Real estate – construction 253,173 24,620 17,730 — 295,523 Commercial business 2,643,814 38,185 39,171 13 2,721,183 Residential mortgage 832,149 — 3,039 — 835,188 Consumer and other 53,966 166 953 — 55,085 Total $ 11,874,949 $ 141,490 $ 259,555 $ 13 $ 12,276,007 The Company may reclassify loans held for investment to loans held for sale in the event that the Company plans to sell loans that were originated with the intent to hold to maturity. Loans transferred from held for investment to held for sale are carried at the lower of cost or fair value. The breakdown of loans by type that were reclassified from held for investment to held for sale for the three and nine months ended September 30, 2020 and 2019 is presented in the following table: Three Months Ended September 30, Nine Months Ended September 30, 2020 2019 2020 2019 Transfer of loans held for investment to held for sale (Dollars in thousands) Real estate - commercial $ — $ 25,988 $ — $ 25,988 Residential mortgage — — 1,002 82,991 Total $ — $ 25,988 $ 1,002 $ 108,979 On January 1, 2020 the Company adopted ASU 2016-13, “Measurement of Credit Losses on Financial Instruments”, or CECL which significantly changed the credit losses estimation model for loans and investments. The discussion below relates to the Company’s CECL allowance for credit losses (“ACL”) methodology. For a discussion of the Company’s former incurred loss allowance for loan losses methodology, please refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. The Company calculates its ACL by estimating expected credit losses on a collective basis for loans that share similar risk characteristics. Loans that do not share similar risk characteristics with other loans are evaluated for credit losses on an individual basis. The Company uses a combination of a modeled and non-modeled approach that incorporates current and future economic conditions to estimate lifetime expected losses on a collective basis. The Company uses Probability of Default (“PD”), Loss Given Default (“LGD”), and Exposure at Default (“EAD”) methodologies with quantitative factors and qualitative considerations in calculation of the allowance for credit losses for collectively assessed loans. The Company uses a reasonable and supportable period of 2 years at which point loss assumptions revert back to historical loss information by means of 1 year reversion period. The ACL for the Company’s construction, credit card, and certain consumer loans is calculated based on a non-modeled approach utilizing historical loss rates to estimate losses. A non-modeled approach was chosen for these loans as fewer data points exist which could result in high levels of estimated loss volatility under a modeled approach. In aggregate, non-modeled loans represented less than 3% of the Company’s total loan portfolio as of September 30, 2020. With the adoption of CECL, the Company formed an Economic Forecast Committee (“EFC”) to review economic forecast scenarios that are incorporated in the Company’s ACL. The EFC reviews multiple scenarios provided to the Company by an independent third party and chooses a single scenario that best aligns with management’s expectation of future economic conditions. The forecast scenario contains certain macroeconomic variables that are incorporated into the Company’s modeling process, including GDP, unemployment rates, interest rates, and commercial real estate prices. As of September 30, 2020, the Company chose a forecast scenario that incorporates the effect of the COVID-19 pandemic into estimates of future economic conditions. We experienced a large decline in GDP and an increase in unemployment for the first half of 2020 and the forecast scenarios project a return to GDP growth in the second half of 2020, while unemployment remains elevated through 2022. Additionally, in order to systematically quantify the credit risk impact of other trends and changes within the loan portfolio, the Company utilizes qualitative adjustments to the modeled and non-modeled estimated loss approaches. The parameters for making adjustments are established under a Credit Risk Matrix that provides different possible scenarios for each of the factors below. The Credit Risk Matrix and the possible scenarios enable the Bank to qualitatively adjust the Loss Migration Ratio by as much as 25 basis points for each loan type pool. This matrix considers the following seven factors, which are patterned after the guidelines provided under the Federal Financial Institutions Examination Council (“FFIEC”) Interagency Policy Statement on the Allowance for Loan and Lease Losses, updated to reflect the adoption of CECL: • Changes in lending policies and procedures, including underwriting standards and collection, charge off, and recovery practices; • Changes in the nature and volume of the loan portfolio; • Changes in the experience, ability, and depth of lending management and staff; • Changes in the trends of the volume and severity of past due loans, classified loans, nonaccrual loans, troubled debt restructurings, and other loan modifications; • Changes in the quality of the loan review system and the degree of oversight by the Directors; • The existence and effect of any concentrations of credit and changes in the level of such concentrations; and • The effect of external factors, such as competition, legal requirements, and regulatory requirements on the level of estimated losses in the loan portfolio. As of September 30, 2020, the Company recorded additional ACL as part of its modeled and qualitative assessments to account for the additional risks associated with the increase in loan modifications related to the COVID-19 pandemic and to account for the Company’s concentration of hotel/motel loans for which the industry was particularly hard hit by the pandemic. For loans which do not share similar risk characteristics such as nonaccrual and TDR loans above $500 thousand, the Company evaluates these loans on an individual basis in accordance with ASC 326. These nonaccrual and TDR loans are considered to have different risk profiles than performing loans and therefore are evaluated separately. The Company decided to collectively assess TDRs and nonaccrual loans with balances below $500 thousand along with the performing and accrual loans in order to reduce the operational burden of individually assessing small TDR and nonaccrual loans with immaterial balances. For individually assessed loans, the ACL is measured using either 1) the present value of 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. For the collateral dependent loans, the Company obtains a new appraisal to determine the fair value of collateral. The appraisals are based on an “as-is” valuation. To ensure that appraised values remain current, the Company either obtains updated appraisals every twelve months from a qualified independent appraiser or an internal evaluation of the collateral is performed by qualified personnel. If the third party market data indicates that the value of the collateral property has declined since the most recent valuation date, management adjusts the value of the property downward to reflect current market conditions. If the fair value of the collateral is less than the amortized balance of the loan, the Company recognizes an ACL with a corresponding charge to the provision for credit losses. The Company maintains a separate ACL for its off-balance sheet unfunded loan commitments. The Company uses a funding rate to allocate the allowance to undrawn exposures. This funding rate is used as a credit conversion factor to capture how much undrawn can potentially become drawn at any point. The funding rate is determined based on a lookback period of 8 quarters. Credit loss is not estimated for off-balance sheet credit exposures that are unconditionally cancellable by the Company. The following tables present a breakdown of loans by recorded ACL, broken out by loans evaluated individually and collectively at September 30, 2020 and December 31, 2019: As of September 30, 2020 Real Estate – Real Estate – Real Estate – Commercial Residential Consumer Total (Dollars in thousands) Individually evaluated loans $ — $ 69,427 $ 6,598 $ 24,930 $ 3,775 $ 802 $ 105,532 ACL on individually evaluated loans $ — $ 2,339 $ — $ 4,485 $ 21 $ 50 $ 6,895 Individually evaluated loans ACL coverage N/A 3.37 % N/A 17.99 % 0.56 % 6.23 % 6.53 % Collectively evaluated loans $ 54,585 $ 8,277,931 $ 304,995 $ 3,675,090 $ 656,101 $ 45,991 $ 13,014,693 ACL on collectively evaluated loans $ 208 $ 125,144 $ 1,933 $ 39,724 $ 4,678 $ 1,267 $ 172,954 Collectively evaluated loans ACL coverage 0.38 % 1.51 % 0.63 % 1.08 % 0.71 % 2.75 % 1.33 % Total loans $ 54,585 $ 8,347,358 $ 311,593 $ 3,700,020 $ 659,876 $ 46,793 $ 13,120,225 Total ACL $ 208 $ 127,483 $ 1,933 $ 44,209 $ 4,699 $ 1,317 $ 179,849 Total ACL to total loans 0.38 % 1.53 % 0.62 % 1.19 % 0.71 % 2.81 % 1.37 % As of December 31, 2019 Real Estate – Real Estate – Real Estate – Commercial Residential Consumer Total (Dollars in thousands) Impaired loans (recorded investment) $ — $ 54,519 $ 10,165 $ 22,905 $ 2,762 $ 301 $ 90,652 Specific allowance $ — $ 312 $ — $ 3,073 $ 10 $ 7 $ 3,402 Specific allowance to impaired loans N/A 0.57 % — % 13.42 % 0.36 % 2.33 % 3.75 % Other loans $ 52,558 $ 8,261,951 $ 285,358 $ 2,698,278 $ 832,426 $ 54,784 $ 12,185,355 General allowance $ 204 $ 51,400 $ 1,677 $ 29,959 $ 5,915 $ 1,587 $ 90,742 General allowance to other loans 0.39 % 0.62 % 0.59 % 1.11 % 0.71 % 2.90 % 0.74 % Total loans $ 52,558 $ 8,316,470 $ 295,523 $ 2,721,183 $ 835,188 $ 55,085 $ 12,276,007 Total allowance for loan losses $ 204 $ 51,712 $ 1,677 $ 33,032 $ 5,925 $ 1,594 $ 94,144 Total allowance to total loans 0.39 % 0.62 % 0.57 % 1.21 % 0.71 % 2.89 % 0.77 % Under certain circumstances, the Company provides borrowers relief through loan modifications. These modifications are either temporary in nature (“temporary modifications”) or are more substantive. The temporary modifications generally consist of interest only payments for a three six TDR loans are individually evaluated in accordance with ASC 310 and ASC 326. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed on the probability that the borrower will be in payment default on their debt in the foreseeable future without the modification. This evaluation is performed under the Bank’s internal underwriting policy. At September 30, 2020, total TDR loans were $49.5 million, compared to $46.7 million at December 31, 2019. The balance of loans with modified terms due to COVID-19 as of September 30, 2020 totaled $1.15 billion. The majority of these loans were modified in accordance with Section 4013 of the CARES Act. The CARES Act provides banks the option to temporarily suspend certain requirements under U.S. GAAP related to TDR for a limited period of time to account for the effects of COVID-19 if (i) the loan modification is made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the coronavirus emergency declaration and (ii) the applicable loan was not more than 30 days past due as of December 31, 2019. As such, all modified loans that met the criteria outlined within Section 4013 of the CARES Act were not classified as TDR loans as of September 30, 2020, unless the loans were TDR prior to the COVID-19 modification. As of September 30, 2020, real estate loans accounted for a little less than 90% of the loans modified due to hardship from the COVID-19 pandemic. The modifications consisted of full payment deferrals, interest only payments, and a hybrid of full payment deferrals for a period of time followed by interest only payments. The modifications were granted mostly for periods from 3 to 9 months (see “COVID-19 Related Loan Modifications” in the Financial Condition section of the Management’s Discussion and Analysis of Financial Condition and Results of Operations for more information). A summary of the recorded investment of TDR loans on accrual and nonaccrual status by type of concession as of September 30, 2020 and December 31, 2019 is presented below: As of September 30, 2020 TDR Loans on Accrual Status TDR Loans on Nonaccrual Status Total TDRs Real Estate Commercial Business Residential Mortgage Other Real Estate Commercial Business Residential Mortgage Other (Dollars in thousands) Payment concession $ 5,944 $ 925 $ — $ 41 $ 7,323 $ 332 $ — $ — $ 14,565 Maturity / amortization concession 11,874 10,730 — 93 178 4,244 — 118 27,237 Rate concession 5,822 — — — 439 1,434 — — 7,695 Total $ 23,640 $ 11,655 $ — $ 134 $ 7,940 $ 6,010 $ — $ 118 $ 49,497 As of December 31, 2019 TDR Loans on Accrual Status TDR Loans on Nonaccrual Status Total Real Estate Commercial Business Residential Mortgage Other Real Estate Commercial Business Residential Mortgage Other (Dollars in thousands) Payment concession $ 4,708 $ 886 $ — $ 54 $ 4,306 $ 259 $ — $ — $ 10,213 Maturity / amortization concession 14,537 10,778 — 43 — 5,931 — 122 31,411 Rate concession 4,419 181 — 103 334 65 — — 5,102 Total $ 23,664 $ 11,845 $ — $ 200 $ 4,640 $ 6,255 $ — $ 122 $ 46,726 TDR loans on accrual status are comprised of loans that were accruing at the time of restructuring and for which the Company anticipates full repayment of both principal and interest under the restructured terms. TDR loans that are on nonaccrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments as modified. Sustained performance includes the periods prior to the modification and if the prior performance met or exceeded the modified terms. TDR loans on accrual status at September 30, 2020 were comprised of 30 commercial real estate loans totaling $23.6 million, 29 commercial business loans totaling $11.7 million, and 16 consumer and other loans totaling $134 thousand. TDR loans on accrual status at December 31, 2019 were comprised of 15 commercial real estate loans totaling $23.7 million, 27 commercial business loans totaling $11.8 million, and 12 consumer and other loans totaling $200 thousand. The Company expects that TDR loans on accrual status as of September 30, 2020, which were all performing in accordance with their restructured terms, to continue to comply with the restructured terms because of the reduced principal or interest payments on these loans. TDR loans that were restructured at market interest rates and had sustained performance as agreed under the modified loan terms may be reclassified as non-TDR after each year end but are reserved for under ASC 310-10. The Company recorded an allowance totaling $4.9 million and $3.1 million for TDR loans as of September 30, 2020 and December 31, 2019, respectively. The following tables present the recorded investment of loans classified as TDR during the three and nine months ended September 30, 2020 and 2019 by class of loans: Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 Number of Loans Balance Number of Loans Balance (Dollars in thousands) Real estate – residential — $ — — $ — Real estate – commercial Retail 1 1,007 1 328 Hotel & motel — — 1 574 Gas station & car wash — — — — Mixed use 1 767 — — Industrial & warehouse — — — — Other — — — — Real estate – construction — — — — Commercial business — — 2 169 Residential mortgage — — — — Consumer and other 2 11 — — Total 4 $ 1,785 4 $ 1,071 For the Nine Months Ended September 30, 2020 For the Nine Months Ended September 30, 2019 Number of Loans Balance Number of Loans Balance (Dollars in thousands) Real estate – residential — $ — — $ — Real estate – commercial Retail 2 1,613 3 449 Hotel & motel — — 3 1,439 Gas station & car wash 2 515 — — Mixed use 2 1,233 — — Industrial & warehouse 1 259 — — Other — — 3 1,055 Real estate – construction — — — — Commercial business 2 481 14 2,999 Residential mortgage — — — — Consumer and other 6 34 10 55 Total 15 $ 4,135 33 $ 5,997 For TDRs modified during the three and nine months ended September 30, 2020, the Company recorded $342 thousand and $661 thousand, respectively in ACL. Total charge-offs of TDR loans modified d |