Allowance for Credit Losses | Allowance for Credit Losses The allowance for credit losses (ACL) was $91,847,000 as of December 31, 2020 as compared to $49,529,000 as of the adoption date of the current expected credit loss accounting standard and related methodology on January 1, 2020. Changes in loan volume and changes in credit quality associated with levels of classified, past due and non-performing loans in addition to changes in qualitative factors, result in the need for changes in the balance of the allowance for credit losses. In addition to the quantitative loan portfolio credit quality characteristics which are illustrated in the following tabular disclosures, the Company’s expected credit loss methodology incorporates the use of qualitative factors. The two most critical qualitative factors utilized by the Company include the actual and forecasted changes in both California unemployment and U.S. gross domestic product. During the year ended December 31, 2020, these qualitative factors experienced significant volatility and deterioration which resulted in a significant increase in the related component of the allowance for credit losses. The table below sets forth the components of the Company’s allowance for credit losses as of the dates indicated. (dollars in thousands) December 31, 2020 January 1, 2020 December 31, 2019 Allowance for credit losses: Qualitative and forecast factor allowance $ 61,935 $ 21,830 $ 12,146 Quantitative (Cohort) model allowance reserves 28,462 26,900 17,529 Total allowance for credit losses 90,397 48,730 29,675 Allowance for individually evaluated loans 1,450 799 935 Allowance for PCD loan losses — — n/a Allowance for PCI loan losses n/a n/a 6 Total allowance for credit losses $ 91,847 $ 49,529 $ 30,616 The following tables summarize the activity in the allowance for loan losses, and ending balance of loans, net of unearned fees for the periods indicated. Allowance for Credit Losses – December 31, 2020 (in thousands) Beginning Impact of CECL Adoption Charge-offs Recoveries Provision Ending Commercial real estate: CRE non-owner occupied $ 5,948 $ 6,701 $ — $ 198 $ 16,533 $ 29,380 CRE owner occupied 2,027 2,281 — 28 6,525 10,861 Multifamily 3,352 2,281 — — 5,839 11,472 Farmland 668 585 (182) — 909 1,980 Total commercial real estate loans 11,995 11,848 (182) 226 29,806 53,693 Consumer: SFR 1-4 1st DT liens 2,306 2,675 (13) 416 4,733 10,117 SFR HELOCs and junior liens 6,183 4,638 (116) 304 762 11,771 Other 1,595 971 (670) 347 1,017 3,260 Total consumer loans 10,084 8,284 (799) 1,067 6,512 25,148 Commercial and industrial 4,867 (1,961) (774) 568 1,552 4,252 Construction 3,388 933 — — 3,219 7,540 Agriculture production 261 (179) — 24 1,103 1,209 Leases 21 (12) — — (4) 5 Allowance for credit losses on loans 30,616 18,913 (1,755) 1,885 42,188 91,847 Reserve for unfunded commitments 2,775 — — — 625 3,400 Total $ 33,391 $ 18,913 $ (1,755) $ 1,885 $ 42,813 $ 95,247 Allowance for Loan Losses – December 31, 2019 (in thousands) Beginning Charge-offs Recoveries Provision Ending Commercial real estate: CRE non-owner occupied $ 7,401 $ — $ 1,486 $ (2,939) $ 5,948 CRE owner occupied 2,711 (746) 42 20 2,027 Multifamily 2,429 — — 923 3,352 Farmland 403 — — 265 668 Total commercial real estate loans 12,944 (746) 1,528 (1,731) 11,995 Consumer: SFR 1-4 1st DT liens 2,676 (2) 54 (422) 2,306 SFR HELOCs and junior liens 7,582 (3) 935 (2,331) 6,183 Other 793 (765) 321 1,246 1,595 Total consumer loans 11,051 (770) 1,310 (1,507) 10,084 Commercial and industrial 5,610 (2,104) 513 848 4,867 Construction 2,497 — — 891 3,388 Agriculture production 480 (19) 12 (212) 261 Leases — — — 21 21 Allowance for loan losses $ 32,582 $ (3,639) $ 3,363 $ (1,690) $ 30,616 Reserve for Unfunded Commitments - December 31, 2019 Reserve for unfunded commitments $ 2,575 $ — $ — $ 200 $ 2,775 Allowance for Loan Losses – December 31, 2018 (in thousands) Beginning Charge-offs Recoveries Provision Ending Commercial real estate: CRE non-owner occupied $ 6,693 $ (15) $ 47 $ 676 $ 7,401 CRE owner occupied 2,686 — 20 5 2,711 Multifamily 1,491 — — 938 2,429 Farmland 571 — — (168) 403 Total commercial real estate loans 11,441 (15) 67 1,451 12,944 Consumer: SFR 1-4 1st DT liens 2,317 (77) — 436 2,676 SFR HELOCs and junior liens 7,641 (301) 1,143 (901) 7,582 Other 586 (783) 288 702 793 Total consumer loans 10,544 (1,161) 1,431 237 11,051 Commercial and industrial 5,757 (1,103) 445 511 5,610 Construction 1,826 — — 671 2,497 Agriculture production 755 (85) 97 (287) 480 Leases — — — — — Allowance for loan losses $ 30,323 $ (2,364) $ 2,040 $ 2,583 $ 32,582 Reserve for Unfunded Commitments - December 31, 2018 Reserve for unfunded commitments $ 3,164 $ — $ — $ (589) $ 2,575 As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including, but not limited to, trends relating to (i) the level of criticized and classified loans, (ii) net charge-offs, (iii) non-performing loans, and (iv) delinquency within the portfolio. The Company analyzes loans individually to classify the loans as to credit risk and grading. This analysis is performed annually for all outstanding balances greater than $1,000,000 and non-homogeneous loans, such as commercial real estate loans, unless other indicators, such as delinquency, trigger more frequent evaluation. Loans below the $1,000,000 threshold and homogenous in nature are evaluated as needed for proper grading based on delinquency and borrower credit scores. Collateral values may be determined by appraisals obtained through Bank approved, licensed appraisers, qualified independent third parties, public value information (blue book values for autos), sales invoices, or other appropriate means. Appropriate valuations are obtained at initiation of the credit and periodically (every 3-12 months depending on collateral type) once repayment is questionable and the loan has been classified. The Company utilizes a risk grading system to assign a risk grade to each of its loans. Loans are graded on a scale ranging from Pass to Loss. A description of the general characteristics of the risk grades is as follows: • Pass – This grade represents loans ranging from acceptable to very little or no credit risk. These loans typically meet most if not all policy standards in regard to: loan amount as a percentage of collateral value, debt service coverage, profitability, leverage, and working capital. • Special Mention – This grade represents “Other Assets Especially Mentioned” in accordance with regulatory guidelines and includes loans that display some potential weaknesses which, if left unaddressed, may result in deterioration of the repayment prospects for the asset or may inadequately protect the Company’s position in the future. These loans warrant more than normal supervision and attention. • Substandard – This grade represents “Substandard” loans in accordance with regulatory guidelines. Loans within this rating typically exhibit weaknesses that are well defined to the point that repayment is jeopardized. Loss potential is, however, not necessarily evident. The underlying collateral supporting the credit appears to have sufficient value to protect the Company from loss of principal and accrued interest, or the loan has been written down to the point where this is true. There is a definite need for a well-defined workout/rehabilitation program. • Doubtful – This grade represents “Doubtful” loans in accordance with regulatory guidelines. An asset classified as Doubtful has all the weaknesses inherent in a loan classified Substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Pending factors include proposed merger, acquisition, or liquidation procedures, capital injection, perfecting liens on additional collateral, and financing plans. • Loss – This grade represents “Loss” loans in accordance with regulatory guidelines. A loan classified as Loss is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the loan, even though some recovery may be affected in the future. The portion of the loan that is graded loss should be charged off no later than the end of the quarter in which the loss is identified. The following tables present ending loan balances by loan category and risk grade for the periods indicated: Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2020 (in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: CRE non-owner occupied risk ratings Pass $ 120,520 $ 207,899 $ 155,730 $ 256,677 $ 179,523 $ 460,644 $ 76,730 $ — $ 1,457,723 Special Mention — 7,455 11,692 5,407 15,773 18,832 12,205 — 71,364 Substandard — — 1,449 584 2,147 2,288 — — 6,468 Doubtful/Loss — — — — — — — — — Total CRE non-owner occupied risk ratings $ 120,520 $ 215,354 $ 168,871 $ 262,668 $ 197,443 $ 481,764 $ 88,935 $ — $ 1,535,555 Commercial real estate: CRE owner occupied risk ratings Pass $ 105,896 $ 75,144 $ 53,816 $ 58,371 $ 54,541 $ 227,828 $ 25,508 $ — $ 601,104 Special Mention — — 288 7,451 2,955 6,140 — — 16,834 Substandard — 1,533 1,301 475 1,306 1,822 — — 6,437 Doubtful/Loss — — — — — — — — — Total CRE owner occupied risk ratings $ 105,896 $ 76,677 $ 55,405 $ 66,297 $ 58,802 $ 235,790 $ 25,508 $ — $ 624,375 Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2020 (in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: Multifamily risk ratings Pass $ 77,646 $ 118,725 $ 113,882 $ 70,112 $ 67,457 $ 123,518 $ 19,007 $ — $ 590,347 Special Mention 9,441 — — — 603 24,687 772 9,259 — 44,762 Substandard — 4,371 — — — — — — — — — — — 4,371 Doubtful/Loss — — — — — — — — — Total multifamily loans $ 87,087 $ 123,096 $ 113,882 $ 70,715 $ 92,144 $ 124,290 $ 28,266 $ — $ 639,480 Commercial real estate: Farmland risk ratings Pass $ 17,640 $ 25,003 $ 19,148 $ 12,834 $ 7,377 $ 17,129 $ 39,411 $ — $ 138,542 Special Mention — 2,567 — 1,271 227 3,107 2,258 — 9,430 Substandard — 700 — 602 — 1,214 2,004 — 4,520 Doubtful/Loss — — — — — — — — — Total farmland loans $ 17,640 $ 28,270 $ 19,148 $ 14,707 $ 7,604 $ 21,450 $ 43,673 $ — $ 152,492 Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 183,719 $ 80,717 $ 36,342 $ 53,001 $ 46,467 $ 126,465 $ 76 $ 5,507 $ 532,294 Special Mention — 290 684 110 15 2,936 — 934 4,969 Substandard — — 1,174 929 935 5,763 — 528 9,329 Doubtful/Loss — — — — — — — — — Total SFR 1st DT liens $ 183,719 $ 81,007 $ 38,200 $ 54,040 $ 47,417 $ 135,164 $ 76 $ 6,969 $ 546,592 Consumer loans: SFR HELOCs and Junior Liens risk ratings Pass $ 793 $ — $ 13 $ 360 $ 300 $ 910 $ 297,160 $ 14,051 $ 313,587 Special Mention — — 16 — — 83 4,504 789 5,392 Substandard — — — — — 39 6,698 1,768 8,505 Doubtful/Loss — — — — — — — — — Total SFR HELOCs and Junior Liens $ 793 $ — $ 29 $ 360 $ 300 $ 1,032 $ 308,362 $ 16,608 $ 327,484 Consumer loans: Other risk ratings Pass $ 25,876 $ 29,539 $ 14,170 $ 4,238 $ 1,020 $ 967 $ 986 $ — $ 76,796 Special Mention 43 208 147 74 24 65 90 — 651 Substandard 58 82 210 74 12 140 9 — 585 Doubtful/Loss — — — — — — — — — — Total other consumer loans $ 25,977 $ 29,829 $ 14,527 $ 4,386 $ 1,056 $ 1,172 $ 1,085 $ — $ 78,032 Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2020 (in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 356,701 $ 48,838 $ 20,463 $ 13,151 $ 5,185 $ 9,490 $ 65,938 $ 1,085 $ 520,851 Special Mention — 102 698 195 20 178 207 11 1,411 Substandard — 301 53 1,142 823 148 1,519 79 4,065 Doubtful/Loss — — — — — — — — — Total commercial and industrial loans $ 356,701 $ 49,241 $ 21,214 $ 14,488 $ 6,028 $ 9,816 $ 67,664 $ 1,175 $ 526,327 Construction loans: Construction risk ratings Pass $ 69,133 $ 41,786 $ 92,191 $ 51,082 $ 20,868 $ 2,876 $ — $ — $ 277,936 Special Mention — — — 346 — 1,780 — — 2,126 Substandard — — — — 4,529 251 — — 4,780 Doubtful/Loss — — — — — — — — — Total construction loans $ 69,133 $ 41,786 $ 92,191 $ 51,428 $ 25,397 $ 4,907 $ — $ — $ 284,842 Agriculture production loans: Agriculture production risk ratings Pass $ 977 $ 2,079 $ 1,590 $ 1,838 $ 663 $ 708 $ 36,051 $ — $ 43,906 Special Mention — — 203 — 49 — — — 252 Substandard — — — — 6 — — — 6 Doubtful/Loss — — — — — — — — — Total agriculture production loans $ 977 $ 2,079 $ 1,793 $ 1,838 $ 718 $ 708 $ 36,051 $ — $ 44,164 Leases: Lease risk ratings Pass $ 3,784 $ — $ — $ — $ — $ — $ — $ — $ 3,784 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total leases $ 3,784 $ — $ — $ — $ — $ — $ — $ — $ 3,784 Total loans outstanding: Risk ratings Pass $ 962,685 $ 629,730 $ 507,345 $ 521,664 $ 383,401 $ 970,535 $ 560,867 $ 20,643 $ 4,556,870 Special Mention 9,484 10,622 13,728 15,457 43,750 33,893 28,523 1,734 157,191 Substandard 58 6,987 4,187 3,806 9,758 11,665 10,230 2,375 49,066 Doubtful/Loss — — — — — — — — — Total loans outstanding $ 972,227 $ 647,339 $ 525,260 $ 540,927 $ 436,909 $ 1,016,093 $ 599,620 $ 24,752 $ 4,763,127 The following information related to loan originations by vintage are presented for comparison purposes only. Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2019 (in thousands) 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: CRE non-owner occupied risk ratings Pass $ 253,321 $ 174,869 $ 287,183 $ 221,864 $ 578,255 $ 77,070 $ — $ 1,592,562 Special Mention — — 3,182 8,401 616 — — 12,199 Substandard — 1,183 474 — 3,138 — — 4,795 Doubtful/Loss — — — — — — — — Total CRE non-owner occupied risk ratings $ 253,321 $ 176,052 $ 290,839 $ 230,265 $ 582,009 $ 77,070 $ — $ 1,609,556 Commercial real estate: CRE owner occupied risk ratings Pass $ 57,376 $ 54,298 $ 73,019 $ 69,136 $ 263,750 $ 18,524 $ — $ 536,103 Special Mention — — 437 745 3,459 — — 4,641 Substandard 601 — 493 726 3,870 — — 5,690 Doubtful/Loss — — — — — — — — Total CRE owner occupied risk ratings $ 57,977 $ 54,298 $ 73,949 $ 70,607 $ 271,079 $ 18,524 $ — $ 546,434 Commercial real estate: Multifamily risk ratings Pass $ 82,435 $ 112,739 $ 41,673 $ 99,170 $ 141,040 $ 36,061 $ — $ 513,118 Special Mention — — — — 1,103 1,480 — 2,583 Substandard — — — 2,024 — — — 2,024 Doubtful/Loss — — — — — — — — Total multifamily loans $ 82,435 $ 112,739 $ 41,673 $ 101,194 $ 142,143 $ 37,541 $ — $ 517,725 Commercial real estate: Farmland risk ratings Pass $ 26,786 $ 21,212 $ 12,248 $ 9,618 $ 22,471 $ 41,783 $ — $ 134,118 Special Mention — — 1,346 226 3,289 774 — 5,635 Substandard — — 624 466 2,929 1,295 — 5,314 Doubtful/Loss — — — — — — — — Total farmland loans $ 26,786 $ 21,212 $ 14,218 $ 10,310 $ 28,689 $ 43,852 $ — $ 145,067 Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 102,612 $ 63,542 $ 73,195 $ 65,051 $ 187,972 $ — $ 6,242 $ 498,614 Special Mention — — 1,408 19 2,564 — 723 4,714 Substandard — 813 711 52 4,050 — 554 6,180 Doubtful/Loss — — — — — — — — Total SFR 1st DT liens $ 102,612 $ 64,355 $ 75,314 $ 65,122 $ 194,586 $ — $ 7,519 $ 509,508 Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2019 (in thousands) 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Consumer loans: SFR HELOCs and Junior Liens risk ratings Pass $ 1,412 $ 14 $ 382 $ 403 $ 2,077 $ 327,589 $ 19,531 $ 351,408 Special Mention — 20 — — 4 4,189 1,169 5,382 Substandard — — — 156 14 4,208 1,718 6,096 Doubtful/Loss — — — — — — — — Total SFR HELOCs and Junior Liens $ 1,412 $ 34 $ 382 $ 559 $ 2,095 $ 335,986 $ 22,418 $ 362,886 Consumer loans: Other risk ratings Pass $ 45,876 $ 23,045 $ 7,176 $ 2,245 $ 2,071 $ 1,402 $ — $ 81,815 Special Mention 56 182 176 52 161 91 — 718 Substandard 60 — 13 — 35 15 — 123 Doubtful/Loss — — — — — — — — Total other consumer loans $ 45,992 $ 23,227 $ 7,365 $ 2,297 $ 2,267 $ 1,508 $ — $ 82,656 Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 61,720 $ 31,149 $ 24,176 $ 10,747 $ 16,346 $ 96,654 $ 973 $ 241,765 Special Mention — 339 1,141 151 164 1,921 110 3,826 Substandard — 47 1,281 1,571 401 814 86 4,200 Doubtful/Loss — — — — — — — — Total commercial and industrial loans $ 61,720 $ 31,535 $ 26,598 $ 12,469 $ 16,911 $ 99,389 $ 1,169 $ 249,791 Construction loans: Construction risk ratings Pass $ 50,275 $ 92,449 $ 76,042 $ 18,973 $ 7,322 $ — $ — $ 245,061 Special Mention — — — 4,202 317 — — 4,519 Substandard — — — — 247 — — 247 Doubtful/Loss — — — — — — — — Total construction loans $ 50,275 $ 92,449 $ 76,042 $ 23,175 $ 7,886 $ — $ — $ 249,827 Agriculture production loans: Agriculture production risk ratings Pass $ 1,929 $ 1,201 $ 1,324 $ 1,012 $ 834 $ 26,306 $ — $ 32,606 Special Mention — — — — — — — — Substandard — — — 27 — — — 27 Doubtful/Loss — — — — — — — — Total agriculture production loans $ 1,929 $ 1,201 $ 1,324 $ 1,039 $ 834 $ 26,306 $ — $ 32,633 Term Loans Amortized Cost Basis by Origination Year – As of December 31, 2019 (in thousands) 2019 2018 2017 2016 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Leases: Lease risk ratings Pass $ 1,283 $ — $ — $ — $ — $ — $ — $ 1,283 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful/Loss — — — — — — — — Total leases $ 1,283 $ — $ — $ — $ — $ — $ — $ 1,283 Total loans outstanding: Risk ratings Pass $ 685,025 $ 574,518 $ 596,418 $ 498,219 $ 1,222,138 $ 625,389 $ 26,746 $ 4,228,453 Special Mention 56 541 7,690 13,796 11,677 8,455 2,002 44,217 Substandard 661 2,043 3,596 5,022 14,684 6,332 2,358 34,696 Doubtful/Loss — — — — — — — — Total loans outstanding $ 685,742 $ 577,102 $ 607,704 $ 517,037 $ 1,248,499 $ 640,176 $ 31,106 $ 4,307,366 Once a loan becomes delinquent and repayment becomes questionable, a Bank collection officer will address collateral shortfalls with the borrower and attempt to obtain additional collateral. If this is not forthcoming and payment in full is unlikely, the Bank will estimate its probable loss, using a recent valuation as appropriate to the underlying collateral less estimated costs of sale, and charge the loan down to the estimated net realizable amount. Depending on the length of time until ultimate collection, the Bank may revalue the underlying collateral and take additional charge-offs as warranted. Revaluations may occur as often as every 3-12 months depending on the underlying collateral and volatility of values. Final charge-offs or recoveries are taken when collateral is liquidated and actual loss is known. Unpaid balances on loans after or during collection and liquidation may also be pursued through lawsuit and attachment of wages or judgment liens on borrower’s other assets. The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated: Analysis of Past Due Loans - As of December 31, 2020 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ 127 $ 173 $ 239 $ 539 $ 1,535,016 $ 1,535,555 CRE owner occupied 297 — 824 1,121 623,254 624,375 Multifamily — — — — 639,480 639,480 Farmland 899 — 70 969 151,523 152,492 Total commercial real estate loans 1,323 173 1,133 2,629 2,949,273 2,951,902 Consumer: SFR 1-4 1st DT liens 37 — 960 997 545,595 546,592 SFR HELOCs and junior liens 418 212 1,671 2,301 325,183 327,484 Other 41 13 100 154 77,878 78,032 Total consumer loans 496 225 2,731 3,452 948,656 952,108 Commercial and industrial 155 426 105 686 525,641 526,327 Construction — — — — 284,842 284,842 Agriculture production — — — — 44,164 44,164 Leases — — — — 3,784 3,784 Total $ 1,974 $ 824 $ 3,969 $ 6,767 $ 4,756,360 $ 4,763,127 The following table shows the ending balance of current and past due originated loans by loan category as of the date indicated: Analysis of Past Due Loans - As of December 31, 2019 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ 268 $ 136 $ 114 $ 518 $ 1,609,038 $ 1,609,556 CRE owner occupied — — 293 293 546,141 546,434 Multifamily 283 — 2,024 2,307 515,418 517,725 Farmland 30 — — 30 145,037 145,067 Total commercial real estate loans 581 136 2,431 3,148 2,815,634 2,818,782 Consumer: SFR 1-4 1st DT liens 1,149 371 1,957 3,477 506,031 509,508 SFR HELOCs and junior liens 1,258 580 1,088 2,926 359,960 362,886 Other 172 1 23 196 82,460 82,656 Total consumer loans 2,579 952 3,068 6,599 948,451 955,050 Commercial and industrial 603 297 24 924 248,867 249,791 Construction — — — — 249,827 249,827 Agriculture production 49 — — 49 32,584 32,633 Leases — — — — 1,283 1,283 Total $ 3,812 $ 1,385 $ 5,523 $ 10,720 $ 4,296,646 $ 4,307,366 The following table shows the ending balance of non accrual loans by loan category as of the date indicated: Non Accrual Loans As of December 31, 2020 As of December 31, 2019 (in thousands) Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Non accrual with no allowance for credit losses Total non accrual Past due 90 days or more and still accruing Commercial real estate: CRE non-owner occupied $ 3,110 $ 3,110 $ — $ 639 $ 642 $ — CRE owner occupied 3,111 4,061 — 1,411 1,408 — Multifamily — — — 2,024 2,024 — Farmland 1,468 1,538 — 1,242 1,242 — Total commercial real estate loans 7,689 8,709 — 5,316 5,316 — Consumer: SFR 1-4 1st DT liens 4,950 5,093 — 5,023 5,192 — SFR HELOCs and junior liens 4,480 6,148 — 3,992 4,217 — Other 68 167 — 4 32 19 Total consumer loans 9,498 11,408 — 9,019 9,441 19 Commercial and industrial 652 2,183 — 476 2,050 — Construction 4,546 4,546 — — — — Agriculture production 5 18 — 14 38 — Leases — — — Sub-total 22,390 26,864 — 14,825 16,845 19 Less: Guaranteed loans (687) (811) (916) (990) — Total, net $ 21,703 $ 26,053 $ — $ 13,909 $ 15,855 $ 19 The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods: As of December 31, 2020 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR -1st Deed SFR -2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 2,445 $ 435 $ — $ — $ — $ — $ — $ — $ — $ — $ — $ 2,880 CRE owner occupied 796 1,176 1,668 — — — — — — — — 3,640 Multifamily — — — — — — — — — — — — Farmland — — — — — 1,538 — — — — — 1,538 Total commercial real estate loans 3,241 1,611 1,668 — — 1,538 — — — — 8,058 Consumer: SFR 1-4 1st DT liens — — — — — — 5,068 — — — — 5,068 SFR HELOCs and junior liens — — — — — — 1,855 2,839 — — — 4,694 Other — — — 42 — — — — 97 — — 139 Total consumer loans — — — 42 — — 6,923 2,839 97 — — 9,901 Commercial and industrial — — — 292 — — — — — 1,173 75 1,540 Construction — — — — — — 4,547 — — — — 4,547 Agriculture production — — — — — — — — — 13 5 18 Leases — — — — — — — — — — — — Total $ 3,241 $ 1,611 $ 1,668 $ 334 $ — $ 1,538 $ 11,470 $ 2,839 $ 97 $ 1,186 $ 80 $ 24,064 As of December 31, 2019 (in thousands) Retail Office Warehouse Other Multifamily Farmland SFR -1st Deed SFR -2nd Deed Automobile/Truck A/R and Inventory Equipment Total Commercial real estate: CRE non-owner occupied $ 2,145 $ — $ 1,220 $ 497 $ — $ — $ — $ — $ — $ — $ — $ 3,862 CRE owner occupied 361 163 420 13 — — — — — — 1,000 1,957 Multifamily — — — — 2,060 — — — — — — 2,060 Farmland — — — — — — 1,242 — — — — — 1,242 Total commercial real estate loans 2,506 163 1,640 510 2,060 1,242 — — — — 1,000 9,121 Consumer: SFR 1-4 1st DT liens — — — — — — 5,341 — — — — 5,341 SFR HELOCs and junior liens — — — — — — — 3,848 — — — 3,848 Other — — — 3 — — — — 27 — — 30 Total consumer loans — — — 3 — — 5,341 3,848 27 — — 9,219 Commercial and industrial — — — 107 — — — — — 1,926 14 2,047 Construction — — — — — — — — — — — — Agriculture production — — — — — — — — — 26 12 38 Leases — — — — — — — — — — — — Total $ 2,506 $ 163 $ 1,640 $ 620 $ 2,060 $ 1,242 $ 5,341 $ 3,848 $ 27 $ 1,952 $ 1,026 $ 20,425 The following tables show certain information regarding Troubled Debt Restructurings that occurred during the periods indicated: Modifications classified as TDRs can include one or a combination of the following: rate modifications, term extensions, interest only modifications, either temporary or long-term, payment modifications, and collateral substitutions/additions. TDR information for the year ended December 31, 2020 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Commercial real estate: CRE non-owner occupied 1 $ 319 $ 314 $ 314 1 $ 141 $ — CRE owner occupied 4 1,847 1,877 67 1 950 — Multifamily — — — — — — — Farmland 5 1,566 1,636 — 1 451 — Total commercial real estate loans 10 3,732 3,827 381 3 1,542 — Consumer: SFR 1-4 1st DT liens — — — — 3 1,180 — SFR HELOCs and junior liens 2 172 169 — 2 140 (90) Other — — — — — — — Total consumer loans 2 172 169 — 5 1,320 (90) Commercial and industrial 6 2,106 2,078 90 — — — Construction — — — — — — — Agriculture production — — — — — — — Leases — — — — — — — Total 18 $ 6,010 $ 6,074 $ 471 8 $ 2,862 $ (90) TDR information for the year ended December 31, 2019 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Commercial real estate: CRE non-owner occupied — $ — $ — $ — — $ — $ — CRE owner occupied 2 60 67 — — — — Multifamily — — — — — — — Farmland — — — — — — — Total commercial real estate loans 2 60 67 — — — — Consumer: SFR 1-4 1st DT liens 3 659 662 30 — — — SFR HELOCs and junior liens 3 214 215 29 — — — Other — — — — — — — Total consumer loans 6 873 877 59 — — — Commercial and industrial 10 1,918 1,885 — 1 7 — Construction — — — — — — — Agriculture production — — — — — — — Leases — — — — — — — Total 18 $ 2,851 $ 2,829 $ 59 1 7 $ — TDR information for the year ended December 31, 2018 (in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Commercial real estate: CRE non-owner occupied 1 $ 39 $ 38 $ 38 1 $ 169 $ — CRE owner occupied 2 555 555 11 — — — Multifamily — — — — — — — Farmland 4 1,188 1,186 442 — — — Total commercial real estate loans 7 1,782 1,779 491 1 169 — Consumer: SFR 1-4 1st DT liens 1 156 156 — — — SFR HELOCs and junior liens 3 732 737 (35) 2 248 — Other — — — — — — — Total consumer loans 4 888 893 (35) 2 248 — Commercial and industrial 6 1,098 1,083 325 3 148 — Construction — — — — — — — Agriculture production — — — — — — — Leases — — — — — — — Total 17 $ 3,768 $ 3,755 $ 781 $ 6 $ 565 $ — For all new TDRs, an impairment analysis is conducted. If the loan is determined to be collateral dependent, any additional amount of impairment will be calculated based on the difference between estimated collectible value and the current carrying balance of the loan. This difference could result in an increased provision and is typically charged off. If the asset is determined not to be collateral dependent, the impairment is measured on the net present value difference between the expected cash flows of the restructured loan and the cash flows which would have been received under the original terms. The effect of this could result in a requirement for additional provision to the reserve. The effect of these required provisions for the period are indicated above. Typically if a TDR defaults during the period, the loan is then considered collateral dependent and, if it was not already considered collateral dependent, an appropriate provision will be reserved or charge will be taken. The additional provisions required resulting from default of previously modified TDR’s are noted above. |