Allowance for Credit Losses | Allowance for Credit Losses For the periods indicated, the following tables summarize the activity in the allowance for credit losses on loans which is recorded as a contra asset, and the reserve for unfunded commitments which is recorded on the balance sheet within other liabilities: Allowance for credit losses – Three months ended March 31, 2021 (in thousands) Beginning Charge-offs Recoveries Provision (benefit) Ending Commercial real estate: CRE non-owner occupied $ 29,380 $ — $ 2 $ (2,948) $ 26,434 CRE owner occupied 10,861 — 1 (988) 9,874 Multifamily 11,472 — — 899 12,371 Farmland 1,980 — — (256) 1,724 Total commercial real estate loans 53,693 — 3 (3,293) 50,403 Consumer: SFR 1-4 1st DT liens 10,117 — 10 538 10,665 SFR HELOCs and junior liens 11,771 — 285 (977) 11,079 Other 3,260 (193) 106 (313) 2,860 Total consumer loans 25,148 (193) 401 (752) 24,604 Commercial and industrial 4,252 (33) 136 109 4,464 Construction 7,540 — — (2,064) 5,476 Agriculture production 1,209 — 20 (241) 988 Leases 5 — — 1 6 Allowance for credit losses on loans 91,847 (226) 560 (6,240) 85,941 Reserve for unfunded commitments 3,400 — — 180 3,580 Total $ 95,247 $ (226) $ 560 $ (6,060) $ 89,521 In determining the allowance for credit losses, accruing loans with similar risk characteristics are generally evaluated collectively. To estimate expected losses the Company generally utilizes historical loss trends and the remaining contractual lives of the loan portfolios to determine estimated credit losses through a reasonable and supportable forecast period. Individual loan credit quality indicators including loan grade and borrower repayment performance have been statistically correlated with historical credit losses and various econometrics, including California unemployment, gross domestic product, and corporate bond yields. Model forecasts may be adjusted for inherent limitations or biases that have been identified through independent validation and back-testing of model performance to actual realized results. The Company utilizes a reasonable and supportable forecast period of approximately eight quarters and obtains the forecast data from publicly available sources. The Company also considers the impact of portfolio concentrations, changes in underwriting practices, imprecision in its economic forecasts, and other risk factors that might influence its loss estimation process. During the quarter ended March 31, 2021, the majority of the change in ACL during the period is primarily attributed to portfolio-wide qualitative indicators related to forecasted changes in the US Unemployment outlook and concentration risk. The aggregate change in these qualitative factors during the three months ended March 31, 2021 were $5,435,000. Further, quantitative calculations decreases based on historical loss experience further reduced required credit reserves by $471,000 as of March 31, 2021. Management noted that the majority of economic forecasts utilized in the ACL calculation have recent estimates that forecast the U.S. economy rebounding to pre-pandemic levels during 2021. These forecasts remain cautious as a result of; lingering supply chain interruptions caused by an imbalance in supply and demand, logistical and transportation issues, and resurgences in COVID variants in certain nations worldwide. Management believes that the allowance for credit losses at March 31, 2021 appropriately reflected expected credit losses inherent in the loan portfolio at that date. Allowance for credit losses – Year ended December 31, 2020 (in thousands) Beginning Adoption of CECL Charge-offs Recoveries Provision Ending Balance 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 On January 1, 2020, the Company adopted ASU 2016-03 Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which replaces the incurred loss methodology that is referred to as the current expected credit loss (CECL) methodology. The Company recognized an increase in the ACL for loans totaling $18,913,000, including a reclassification of $481,000 from discounts on acquired loans to the allowance for credit losses, as a cumulative effect adjustment from change in accounting policies, with a corresponding decrease in retained earnings, net of $5,449,000 in taxes of $12,983,000. Allowance for loan losses – Three months ended March 31, 2020 (in thousands) Beginning Adoption of CECL Charge-offs Recoveries Provision Ending Balance Commercial real estate: CRE non-owner occupied $ 5,948 $ 6,701 $ — $ 189 $ 5,195 $ 18,033 CRE owner occupied 2,027 2,281 — 5 1,052 5,365 Multifamily 3,352 2,281 — — (493) 5,140 Farmland 668 585 — — (541) 712 Total commercial real estate loans 11,995 11,848 — 194 5,213 29,250 Consumer: SFR 1-4 1st DT liens 2,306 2,675 — 410 259 5,650 SFR HELOCs and junior liens 6,183 4,638 — 48 327 11,196 Other 1,595 971 (130) 94 216 2,746 Total consumer loans 10,084 8,284 (130) 552 802 19,592 Commercial and industrial 4,867 (1,961) (380) 126 1,216 3,868 Construction 3,388 933 — — 274 4,595 Agriculture production 261 (179) — 20 493 595 Leases 21 (12) — — 2 11 Allowance for credit losses on loans 30,616 18,913 (510) 892 8,000 57,911 Reserve for unfunded commitments 2,775 — — — — 2,775 Total $ 33,391 $ 18,913 $ (510) $ 892 $ 8,000 $ 60,686 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. 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. Based on the most recent analysis performed, the risk category of loans by class of loans is as follows for the period indicated: Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021 (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: CRE non-owner occupied risk ratings Pass $ 58,047 $ 130,667 $ 205,818 $ 147,766 $ 252,414 $ 620,082 $ 65,028 $ — $ 1,479,822 Special Mention — — 6,226 11,683 12,245 19,053 12,001 — 61,208 Substandard — — — 1,432 577 11,888 — — 13,897 Doubtful/Loss — — — — — — — — — Total CRE non-owner occupied risk ratings $ 58,047 $ 130,667 $ 212,044 $ 160,881 $ 265,236 $ 651,023 $ 77,029 $ — $ 1,554,927 Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021 (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Commercial real estate: CRE owner occupied risk ratings Pass $ 36,465 $ 104,653 $ 73,669 $ 52,367 $ 57,770 $ 270,655 $ 22,402 $ — $ 617,981 Special Mention — — — 288 7,171 8,916 — — 16,375 Substandard — — 1,505 1,282 470 3,603 — — 6,860 Doubtful/Loss — — — — — — — — — Total CRE owner occupied risk ratings $ 36,465 $ 104,653 $ 75,174 $ 53,937 $ 65,411 $ 283,174 $ 22,402 $ — $ 641,216 Commercial real estate: Multifamily risk ratings Pass $ 121,003 $ 82,738 $ 118,173 $ 118,297 $ 68,886 $ 187,843 $ 20,771 $ — $ 717,711 Special Mention — 9,383 — — — 24,679 8,759 — 42,821 Substandard — — 4,352 — — — — — 4,352 Doubtful/Loss — — — — — — — — — Total multifamily loans $ 121,003 $ 92,121 $ 122,525 $ 118,297 $ 68,886 $ 212,522 $ 29,530 $ — $ 764,884 Commercial real estate: Farmland risk ratings Pass $ 4,669 $ 18,083 $ 22,496 $ 18,659 $ 8,467 $ 23,026 $ 38,076 $ — $ 133,476 Special Mention — — — — 1,196 3,316 1,653 — 6,165 Substandard — — 3,266 — 596 1,144 2,950 — 7,956 Doubtful/Loss — — — — — — — — — Total farmland loans $ 4,669 $ 18,083 $ 25,762 $ 18,659 $ 10,259 $ 27,486 $ 42,679 $ — $ 147,597 Consumer loans: SFR 1-4 1st DT liens risk ratings Pass $ 125,704 $ 186,594 $ 72,632 $ 33,274 $ 47,410 $ 152,614 $ — $ 5,039 $ 623,267 Special Mention — — 289 682 421 2,803 — 1,073 5,268 Substandard — — — 1,151 680 6,096 — 362 8,289 Doubtful/Loss — — — — — — — — — Total SFR 1st DT liens $ 125,704 $ 186,594 $ 72,921 $ 35,107 $ 48,511 $ 161,513 $ — $ 6,474 $ 636,824 Consumer loans: SFR HELOCs and Junior Liens Pass $ 700 $ 85 $ — $ 12 $ 343 $ 958 $ 303,290 $ 12,920 $ 318,308 Special Mention — — — 16 — 139 4,254 785 5,194 Substandard — — — — — 33 6,146 1,652 7,831 Doubtful/Loss — — — — — — — — — Total SFR HELOCs and Junior Liens $ 700 $ 85 $ — $ 28 $ 343 $ 1,130 $ 313,690 $ 15,357 $ 331,333 Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021 (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Consumer loans: Other risk ratings Pass $ 5,880 $ 21,727 $ 26,153 $ 12,095 $ 3,472 $ 1,632 $ 889 $ — $ 71,848 Special Mention — 55 202 249 36 78 77 — 697 Substandard — 57 79 134 85 147 9 — 511 Doubtful/Loss — — — — — — — — — Total other consumer loans $ 5,880 $ 21,839 $ 26,434 $ 12,478 $ 3,593 $ 1,857 $ 975 $ — $ 73,056 Commercial and industrial loans: Commercial and industrial risk ratings Pass $ 177,482 $ 216,547 $ 44,666 $ 17,226 $ 11,974 $ 12,802 $ 61,969 $ 964 $ 543,630 Special Mention — — 96 602 169 176 2,558 10 3,611 Substandard — — 282 104 1,375 812 1,188 75 3,836 Doubtful/Loss — — — — — — — — — Total commercial and industrial loans $ 177,482 $ 216,547 $ 45,044 $ 17,932 $ 13,518 $ 13,790 $ 65,715 $ 1,049 $ 551,077 Construction loans: Construction risk ratings Pass $ 1,711 $ 76,063 $ 44,589 $ 37,820 $ 31,303 $ 23,442 $ — $ — $ 214,928 Special Mention — — — — 346 1,756 — — 2,102 Substandard — — — — — 4,583 — — 4,583 Doubtful/Loss — — — — — — — — — Total construction loans $ 1,711 $ 76,063 $ 44,589 $ 37,820 $ 31,649 $ 29,781 $ — $ — $ 221,613 Agriculture production loans: Agriculture production risk ratings Pass $ 262 $ 897 $ 1,959 $ 1,288 $ 1,582 $ 1,108 $ 32,416 $ — $ 39,512 Special Mention — — — 189 — 47 — — 236 Substandard — — — — — 5 — — 5 Doubtful/Loss — — — — — — — — — Total agriculture production loans $ 262 $ 897 $ 1,959 $ 1,477 $ 1,582 $ 1,160 $ 32,416 $ — $ 39,753 Leases: Lease risk ratings Pass $ 4,697 $ — $ — $ — $ — $ — $ — $ — $4,697 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful/Loss — — — — — — — — — Total leases $ 4,697 $ — $ — $ — $ — $ — $ — $ — $ 4,697 Term Loans Amortized Cost Basis by Origination Year – As of March 31, 2021 (in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Amortized Cost Basis Revolving Loans Converted to Term Total Total loans outstanding: Risk ratings Pass $ 536,620 $ 838,054 $ 610,155 $ 438,804 $ 483,621 $ 1,294,162 $ 544,841 $ 18,923 $ 4,765,180 Special Mention — 9,438 6,813 13,709 21,584 60,963 29,302 1,868 143,677 Substandard — 57 9,484 4,103 3,783 28,311 10,293 2,089 58,120 Doubtful/Loss — — — — — — — — — Total loans outstanding $ 536,620 $ 847,549 $ 626,452 $ 456,616 $ 508,988 $ 1,383,436 $ 584,436 $ 22,880 $ 4,966,977 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 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 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: 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 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 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 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 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 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 March 31, 2021 (in thousands) 30-59 days 60-89 days > 90 days Total Past Current Total Commercial real estate: CRE non-owner occupied $ 55 $ 354 $ 4,110 $ 4,519 $ 1,550,408 $ 1,554,927 CRE owner occupied 158 — 589 747 640,469 641,216 Multifamily — — — — 764,884 764,884 Farmland — — 847 847 146,750 147,597 Total commercial real estate loans 213 354 5,546 6,113 3,102,511 3,108,624 Consumer: SFR 1-4 1st DT liens — — 881 881 635,943 636,824 SFR HELOCs and junior liens 59 490 1,472 2,021 329,312 331,333 Other 66 13 31 110 72,946 73,056 Total consumer loans 125 503 2,384 3,012 1,038,201 1,041,213 Commercial and industrial 152 168 771 1,091 549,986 551,077 Construction 295 — — 295 221,318 221,613 Agriculture production 39 — — 39 39,714 39,753 Leases — — — — 4,697 4,697 Total $ 824 $ 1,025 $ 8,701 $ 10,550 $ 4,956,427 $ 4,966,977 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 non accrual loans by loan category as of the date indicated: Non Accrual Loans As of March 31, 2021 As of December 31, 2020 (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 $ 7,000 $ 7,000 $ — $ 3,110 $ 3,110 $ — CRE owner occupied 2,833 3,762 — 3,111 4,061 — Multifamily — — — — — — Farmland 1,431 1,431 — 1,468 1,538 — Total commercial real estate loans 11,264 12,193 — 7,689 8,709 — Consumer: SFR 1-4 1st DT liens 4,853 4,996 — 4,950 5,093 — SFR HELOCs and junior liens 4,187 5,142 — 4,480 6,148 — Other 52 103 — 68 167 — Total consumer loans 9,092 10,241 — 9,498 11,408 — Commercial and industrial 108 1,774 245 652 2,183 — Construction 4,483 4,483 — 4,546 4,546 — Agriculture production 5 5 — 5 18 — Leases — — — — — — Sub-total 24,952 28,696 245 22,390 26,864 — Less: Guaranteed loans (814) (814) — (687) (811) Total, net $ 24,138 $ 27,882 $ 245 $ 21,703 $ 26,053 $ — Interest income on non accrual loans that would have been recognized during the three months ended March 31, 2021 and 2020, if all such loans had been current in accordance with their original terms, totaled $536,000 and $431,000, respectively. Interest income actually recognized on these originated loans during the three months ended March 31, 2021 and 2020 was $17,000 and $47,000, respectively. The following tables present the amortized cost basis of collateral dependent loans by class of loans as of the following periods: As of March 31, 2021 (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 $ 2,630 $ 427 $ — $ 3,943 $ — $ — $ — $ — $ — $ — $ — $ 7,000 CRE owner occupied 781 927 1,640 414 — — — — — — — 3,762 Multifamily — — — — — — — — — — — — Farmland — — — — — 1,431 — — — — — 1,431 Total commercial real estate loans 3,411 1,354 1,640 4,357 — 1,431 — — — — — 12,193 Consumer: SFR 1-4 1st DT liens — — — — — — 4,996 — — — — 4,996 SFR HELOCs and junior liens — — — — — — 1,882 2,471 — — — 4,353 Other — — — 69 — — — — 25 — — 94 Total consumer loans — — — 69 — — 6,878 2,471 25 — — 9,443 Commercial and industrial — — — 272 — — — — — 1,288 214 1,774 Construction — — — — — — 4,483 — — — — 4,483 Agriculture production — — — — — — — — — — 5 5 Leases — — — — — — — — — — — — Total $ 3,411 $ 1,354 $ 1,640 $ 4,698 $ — $ 1,431 $ 11,361 $ 2,471 $ 25 $ 1,288 $ 219 $ 27,898 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 TDR information for the three months ended March 31, 2021 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Commercial real estate: CRE non-owner occupied 1 $ 317 $ 314 $ 314 — $ — $ — CRE owner occupied 1 740 742 742 — — — Multifamily — — — — — — — Farmland — — — — 3 847 — Total commercial real estate loans 2 1,057 1,056 1,056 3 847 — Consumer: SFR 1-4 1st DT liens — — — — — — — SFR HELOCs and junior liens — — — — — — — Other — — — — — — — Total consumer loans — — — — — — — Commercial and industrial 3 316 310 310 1 247 — Construction — — — — — — — Agriculture production — — — — — — — Leases — — — — — — — Total 5 $ 1,373 $ 1,366 $ 1,366 4 $ 1,094 $ — TDR information for the three months ended March 31, 2020 (dollars in thousands) Number Pre-mod Post-mod Financial Number that Recorded Financial impact Commercial real estate: CRE non-owner occupied 1 $ 257 $ 251 $ — — $ — $ — CRE owner occupied — — — — — — — Multifamily — — — — — — — Farmland 2 230 298 — — — — Total commercial real estate loans 3 487 549 — — — — Consumer: SFR 1-4 1st DT liens — — — — 1 302 — SFR HELOCs and junior liens 2 172 169 — — — — Other — — — — — — — Total consumer loans 2 172 169 — 1 302 — Commercial and industrial 1 21 20 21 — — — Construction — — — — — — — Agriculture production — — — — — — — Leases — — — — — — — Total 6 $ 680 $ 738 $ 21 1 $ 302 $ — The Company also modified the terms of select loans in an effort to assist borrowers that were not related to the COVID-19 pandemic. If the borrower was experiencing financial difficulty and a concession was granted, the Company considered such modifications as troubled debt restructurings. 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. The objective of the modifications was to increase loan repayments by customers and thereby reduce net charge-offs. The modified loans are included in impaired loans for purposes of determining the level of the allowance for credit losses. 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. Loans that defaulted within the twelve month period subsequent to modification were not considered significant for financial reporting purposes. |