Loans Receivable (Tables)

3 Months Ended

Mar. 31, 2020

Loans and Leases Receivable Disclosure [Abstract]

Loans and Lease Receivable Collateral for Secured Borrowings [Table Text Block]

he types of collateral securing loans individually evaluated for ACL on loans, and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of March 31, 2020, were as follows:

	Loans receivable(1) at March 31, 2020
	Commercial Real Estate		Farmland		Single Family Residence		Equipment or Accounts Receivable		Other		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	2,063	$	19,350	$	1,445	$	2,232	$	311	$	25,401
Owner-occupied commercial real estate	3,106		—		—		—		—		3,106
Non-owner occupied commercial real estate	5,794		—		—		—		—		5,794
Total commercial business	10,963		19,350		1,445		2,232		311		34,301
One-to-four family residential	—		—		19		—		—		19
Real estate construction and land development:
One-to-four family residential	—		—		1,516		—		—		1,516
Total	$	10,963	$	19,350	$	2,980	$	2,232	$	311	$	35,836

⁽¹⁾ Balances represent the amortized cost of loans receivable at date indicated. If multiple collateral secured the loan, the entire loan receivable balance is presented in the primary collateral category, which generally represents the majority of the collateral balance.

Financing Receivable Credit Quality Indicators [Table Text Block]

The following table presents the amortized cost of loans receivable by risk grade as of March 31, 2020:

	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Loans Receivable
	(In thousands)
As of March 31, 2020
Commercial business:
Commercial and industrial
Pass	$	24,236	$	159,463	$	91,045	$	68,613	$	52,123	$	132,283	$	271,477	$	710	$	799,950
SM	2,291		3,479		3,495		436		1,787		1,805		22,187		42		35,522
SS	106		9,482		4,758		8,578		2,427		13,712		14,807		343		54,213
Total	26,633		172,424		99,298		77,627		56,337		147,800		308,471		1,095		889,685
Owner-occupied properties
Pass	21,643		144,743		100,332		98,228		85,554		314,552		—		1,056		766,108
SM	107		—		—		2,073		1,897		13,268		—		—		17,345
SS	—		—		117		4,731		2,010		15,325		—		—		22,183
Total	21,750		144,743		100,449		105,032		89,461		343,145		—		1,056		805,636
Non-owner-occupied properties
Pass	33,205		157,063		154,514		203,143		282,734		466,239		—		—		1,296,898
SM	—		—		—		—		6,216		2,846		—		—		9,062
SS	—		—		67		—		—		6,281		—		—		6,348
Total	33,205		157,063		154,581		203,143		288,950		475,366		—		—		1,312,308
Total commercial business

	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Loans Receivable
	(In thousands)
Pass	79,084		461,269		345,891		369,984		420,411		913,074		271,477		1,766		2,862,956
SM	2,398		3,479		3,495		2,509		9,900		17,919		22,187		42		61,929
SS	106		9,482		4,942		13,309		4,437		35,318		14,807		343		82,744
Total	81,588		474,230		354,328		385,802		434,748		966,311		308,471		2,151		3,007,629
One-to-four family residential
Pass	9,097		47,795		22,506		17,566		11,664		27,371		—		—		135,999
SS	—		—		—		63		124		596		—		—		783
Total	9,097		47,795		22,506		17,629		11,788		27,967		—		—		136,782
Real estate construction and land development:
One-to-four family residential
Pass	8,102		73,501		10,405		2,433		971		1,802		—		—		97,214
SS	—		—		—		1,516		—		—		—		—		1,516
Total	8,102		73,501		10,405		3,949		971		1,802		—		—		98,730
Five or more family residential and commercial properties
Pass	13,994		97,928		65,440		6,978		880		2,592		—		—		187,812
SM	—		—		—		—		—		39		—		—		39
SS	—		—		—		—		—		453		—		—		453
Total	13,994		97,928		65,440		6,978		880		3,084		—		—		188,304
Total real estate and land development
Pass	22,096		171,429		75,845		9,411		1,851		4,394		—		—		285,026
SM	—		—		—		—		—		39		—		—		39
SS	—		—		—		1,516		—		453		—		—		1,969
Total	22,096		171,429		75,845		10,927		1,851		4,886		—		—		287,034
Consumer
Pass	27,777		102,909		74,043		45,472		22,957		27,370		116,302		87		416,917
SM	—		—		—		—		—		—		—		—		—
SS	—		87		492		489		554		1,624		766		2		4,014
Total	27,777		102,996		74,535		45,961		23,511		28,994		117,068		89		420,931
Loans receivable
Pass	138,054		783,402		518,285		442,433		456,883		972,209		387,779		1,853		3,700,898
SM	2,398		3,479		3,495		2,509		9,900		17,958		22,187		42		61,968
SS	106		9,569		5,434		15,377		5,115		37,991		15,573		345		89,510
Total	$	140,558	$	796,450	$	527,214	$	460,319	$	471,898	$	1,028,158	$	425,539	$	2,240	$	3,852,376

⁽¹⁾ Represents loans receivable balance at March 31, 2020 which was converted from a revolving loan to an amortizing loan during the three months ended March 31, 2020.

The following table presents the amortized cost of loans receivable by credit quality indicator as of December 31, 2019 in accordance with pre-CECL disclosure requirements:

	December 31, 2019
	Pass		Special Mention		Substandard		Doubtful/Loss		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	771,559	$	16,340	$	64,321	$	—	$	852,220
Owner-occupied commercial real estate	765,411		24,659		15,164		—		805,234
Non-owner occupied commercial real estate	1,274,513		5,662		8,604		—		1,288,779
Total commercial business	2,811,483		46,661		88,089		—		2,946,233
One-to-four family residential	130,818		—		842		—		131,660
Real estate construction and land development:
One-to-four family residential	101,973		1,516		807		—		104,296
Five or more family residential and commercial properties	169,668		682		—		—		170,350
Total real estate construction and land development	271,641		2,198		807		—		274,646
Consumer	411,141		—		3,675		524		415,340
Gross loans receivable	$	3,625,083	$	48,859	$	93,413	$	524	$	3,767,879

oans receivable, net of ACL at March 31, 2020 and December 31, 2019 consisted of the following portfolio segments and classes:

	March 31, 2020			December 31, 2019
	(In thousands)
Commercial business:
Commercial and industrial	$	889,685		$	852,220
Owner-occupied commercial real estate	805,636			805,234
Non-owner occupied commercial real estate	1,312,308			1,288,779
Total commercial business	3,007,629			2,946,233
One-to-four family residential	136,782			131,660
Real estate construction and land development:
One-to-four family residential	98,730			104,296
Five or more family residential and commercial properties	188,304			170,350
Total real estate construction and land development	287,034			274,646
Consumer	420,931			415,340
Loans receivable	3,852,376			3,767,879
Allowance for credit losses on loans	(47,540		)	(36,171		)
Loans receivable, net	$	3,804,836		$	3,731,708

Financing Receivable, Past Due [Table Text Block]

he amortized cost of past due loans as of March 31, 2020 were as follows:

	March 31, 2020
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	2,632	$	6,589	$	9,221	$	880,464	$	889,685
Owner-occupied commercial real estate	353		490		843		804,793		805,636
Non-owner occupied commercial real estate	1,620		—		1,620		1,310,688		1,312,308
Total commercial business	4,605		7,079		11,684		2,995,945		3,007,629
One-to-four family residential	447		19		466		136,316		136,782
Real estate construction and land development:
One-to-four family residential	—		—		—		98,730		98,730
Five or more family residential and commercial properties	—		—		—		188,304		188,304
Total real estate construction and land development	—		—		—		287,034		287,034
Consumer	1,963		—		1,963		418,968		420,931
Total	$	7,015	$	7,098	$	14,113	$	3,838,263	$	3,852,376

The following table presents the amortized cost of past due loans as of December 31, 2019 in accordance with pre-CECL disclosure requirements:

	December 31, 2019
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Total		PCI Loans		Loan Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	10,479	$	6,772	$	17,251	$	832,601	$	849,852	$	2,368	$	852,220
Owner-occupied commercial real estate	607		806		1,413		798,907		800,320		4,914		805,234
Non-owner occupied commercial real estate	554		1,843		2,397		1,280,891		1,283,288		5,491		1,288,779
Total commercial business	11,640		9,421		21,061		2,912,399		2,933,460		12,773		2,946,233
One-to-four family residential	797		—		797		127,288		128,085		3,575		131,660
Real estate construction and land development:
One-to-four family residential	1,516		—		1,516		102,780		104,296		—		104,296
Five or more family residential and commercial properties	—		—		—		170,350		170,350		—		170,350
Total real estate construction and land development	1,516		—		1,516		273,130		274,646		—		274,646
Consumer	2,071		—		2,071		411,507		413,578		1,762		415,340
Total	$	16,024	$	9,421	$	25,445	$	3,724,324	$	3,749,769	$	18,110	$	3,767,879

Schedule of Impaired Purchased Loans Accretable Yield [Table Text Block]

he following table summarizes the accretable yield on the PCI loans for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
	(In thousands)
Balance at the beginning of the period	$	9,493
Accretion	(581		)
Disposal and other	(452		)
Balance at the end of the period	$	8,460

Financing Receivables [Text Block]

Loans Receivable

(a) Loan Origination/Risk Management

The Company originates loans in the ordinary course of business and has also acquired loans through mergers and acquisitions. Accrued interest receivable was excluded from disclosures presenting the Company's amortized cost of loans receivable as it was deemed insignificant. Accrued interest receivable on loans totaled $11.1 million and $10.7 million at March 31, 2020 and December 31, 2019, respectively.

The Company categorizes loans in one of the four segments of the total loan portfolio: commercial business, one-to-four family residential, real estate construction and land development and consumer. Within these segments are classes of loans for which management monitors and assesses credit risk in the loan portfolios. A detailed description of the portfolio segments and classes is contained in the 2019 Annual Form 10-K.

The Company adopted ASU 2016-13 effective January 1, 2020, which increased the beginning ACL on loans as discussed in Note (4) Allowance for Credit Losses on Loans.

The amortized cost of loans receivable, net of ACL at March 31, 2020 and December 31, 2019 consisted of the following portfolio segments and classes:

	March 31, 2020			December 31, 2019
	(In thousands)
Commercial business:
Commercial and industrial	$	889,685		$	852,220
Owner-occupied commercial real estate	805,636			805,234
Non-owner occupied commercial real estate	1,312,308			1,288,779
Total commercial business	3,007,629			2,946,233
One-to-four family residential	136,782			131,660
Real estate construction and land development:
One-to-four family residential	98,730			104,296
Five or more family residential and commercial properties	188,304			170,350
Total real estate construction and land development	287,034			274,646
Consumer	420,931			415,340
Loans receivable	3,852,376			3,767,879
Allowance for credit losses on loans	(47,540		)	(36,171		)
Loans receivable, net	$	3,804,836		$	3,731,708

(b) Concentrations of Credit

As of March 31, 2020, and December 31, 2019, there were no concentrations of loans related to any single industry in excess of 10% of the Company’s total loans.

(c) Credit Quality Indicators

As part of the on-going monitoring of the credit quality of the Company’s loan portfolio, management tracks certain credit quality indicators including trends related to (i) the risk grade of the loans, (ii) the level of classified loans, (iii) net charge-offs, (iv) nonperforming loans and (v) the general economic conditions of the United States of America and specifically the states of Washington and Oregon. The Company utilizes a risk grading matrix to assign a risk grade to each loan on a numerical scale of 1 to 10. Risk grades are aggregated to create the risk categories of "Pass" for grades 1 to 6, "Special Mention" ("SM") for grade 7, "Substandard" ("SS") for grade 8, "Doubtful" for grade 9 and "Loss" for grade 10. Descriptions of the general characteristics of the risk grades, including qualitative information on how the risk grades relate to the risk of loss, are contained in the 2019 Annual Form 10-K.

Numerical loan grades for loans are established at the origination of the loan. Changes to loan grades are considered at the time new information about the performance of a loan becomes available, including the receipt of updated financial information from the borrower, and scheduled loan reviews performed by the Bank’s internal Loan Review department. For consumer loans, the Bank follows the FDIC’s Uniform Retail Credit Classification and Account Management Policy for subsequent classification in the event of payment delinquencies or default. Typically, an individual loan grade will not be changed from the prior period unless there is a specific indication of credit deterioration or improvement. Credit deterioration is evidenced by delinquency, direct communications with the borrower, or other borrower information that becomes known to management. Credit improvements are evidenced by known facts regarding the borrower or the collateral property.

The following table presents the amortized cost of loans receivable by risk grade as of March 31, 2020:

	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Loans Receivable
	(In thousands)
As of March 31, 2020
Commercial business:
Commercial and industrial
Pass	$	24,236	$	159,463	$	91,045	$	68,613	$	52,123	$	132,283	$	271,477	$	710	$	799,950
SM	2,291		3,479		3,495		436		1,787		1,805		22,187		42		35,522
SS	106		9,482		4,758		8,578		2,427		13,712		14,807		343		54,213
Total	26,633		172,424		99,298		77,627		56,337		147,800		308,471		1,095		889,685
Owner-occupied properties
Pass	21,643		144,743		100,332		98,228		85,554		314,552		—		1,056		766,108
SM	107		—		—		2,073		1,897		13,268		—		—		17,345
SS	—		—		117		4,731		2,010		15,325		—		—		22,183
Total	21,750		144,743		100,449		105,032		89,461		343,145		—		1,056		805,636
Non-owner-occupied properties
Pass	33,205		157,063		154,514		203,143		282,734		466,239		—		—		1,296,898
SM	—		—		—		—		6,216		2,846		—		—		9,062
SS	—		—		67		—		—		6,281		—		—		6,348
Total	33,205		157,063		154,581		203,143		288,950		475,366		—		—		1,312,308
Total commercial business

	Term Loans Amortized Cost Basis by Origination Year
	2020		2019		2018		2017		2016		Prior		Revolving Loans		Revolving Loans Converted to Term Loans (1)		Loans Receivable
	(In thousands)
Pass	79,084		461,269		345,891		369,984		420,411		913,074		271,477		1,766		2,862,956
SM	2,398		3,479		3,495		2,509		9,900		17,919		22,187		42		61,929
SS	106		9,482		4,942		13,309		4,437		35,318		14,807		343		82,744
Total	81,588		474,230		354,328		385,802		434,748		966,311		308,471		2,151		3,007,629
One-to-four family residential
Pass	9,097		47,795		22,506		17,566		11,664		27,371		—		—		135,999
SS	—		—		—		63		124		596		—		—		783
Total	9,097		47,795		22,506		17,629		11,788		27,967		—		—		136,782
Real estate construction and land development:
One-to-four family residential
Pass	8,102		73,501		10,405		2,433		971		1,802		—		—		97,214
SS	—		—		—		1,516		—		—		—		—		1,516
Total	8,102		73,501		10,405		3,949		971		1,802		—		—		98,730
Five or more family residential and commercial properties
Pass	13,994		97,928		65,440		6,978		880		2,592		—		—		187,812
SM	—		—		—		—		—		39		—		—		39
SS	—		—		—		—		—		453		—		—		453
Total	13,994		97,928		65,440		6,978		880		3,084		—		—		188,304
Total real estate and land development
Pass	22,096		171,429		75,845		9,411		1,851		4,394		—		—		285,026
SM	—		—		—		—		—		39		—		—		39
SS	—		—		—		1,516		—		453		—		—		1,969
Total	22,096		171,429		75,845		10,927		1,851		4,886		—		—		287,034
Consumer
Pass	27,777		102,909		74,043		45,472		22,957		27,370		116,302		87		416,917
SM	—		—		—		—		—		—		—		—		—
SS	—		87		492		489		554		1,624		766		2		4,014
Total	27,777		102,996		74,535		45,961		23,511		28,994		117,068		89		420,931
Loans receivable
Pass	138,054		783,402		518,285		442,433		456,883		972,209		387,779		1,853		3,700,898
SM	2,398		3,479		3,495		2,509		9,900		17,958		22,187		42		61,968
SS	106		9,569		5,434		15,377		5,115		37,991		15,573		345		89,510
Total	$	140,558	$	796,450	$	527,214	$	460,319	$	471,898	$	1,028,158	$	425,539	$	2,240	$	3,852,376

⁽¹⁾ Represents loans receivable balance at March 31, 2020 which was converted from a revolving loan to an amortizing loan during the three months ended March 31, 2020.

The following table presents the amortized cost of loans receivable by credit quality indicator as of December 31, 2019 in accordance with pre-CECL disclosure requirements:

	December 31, 2019
	Pass		Special Mention		Substandard		Doubtful/Loss		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	771,559	$	16,340	$	64,321	$	—	$	852,220
Owner-occupied commercial real estate	765,411		24,659		15,164		—		805,234
Non-owner occupied commercial real estate	1,274,513		5,662		8,604		—		1,288,779
Total commercial business	2,811,483		46,661		88,089		—		2,946,233
One-to-four family residential	130,818		—		842		—		131,660
Real estate construction and land development:
One-to-four family residential	101,973		1,516		807		—		104,296
Five or more family residential and commercial properties	169,668		682		—		—		170,350
Total real estate construction and land development	271,641		2,198		807		—		274,646
Consumer	411,141		—		3,675		524		415,340
Gross loans receivable	$	3,625,083	$	48,859	$	93,413	$	524	$	3,767,879

Potential problem loans are loans classified as Special Mention or worse that are not classified as a TDR or nonaccrual loan and are not individually evaluated for credit loss, but which management is closely monitoring because the financial information of the borrower causes concern as to their ability to meet their loan repayment terms. Potential problem loans as of March 31, 2020 and December 31, 2019 were $102.2 million and $87.8 million, respectively.

(d) Nonaccrual Loans

The following table presents the amortized cost of nonaccrual loans for the dates indicated:

	March 31, 2020						December 31, 2019
	Nonaccrual with No ACL		Nonaccrual with ACL		Total Nonaccrual (1)		Nonaccrual (2)
	(In thousands)
Commercial business:
Commercial and industrial	$	24,068	$	2,019	$	26,087	$	33,544
Owner-occupied commercial real estate	3,103		888		3,991		4,714
Non-owner occupied commercial real estate	3,830		—		3,830		6,062
Total commercial business	31,001		2,907		33,908		44,320
One-to-four family residential	19		144		163		19
Consumer	—		92		92		186
Total	$	31,020	$	3,143	$	34,163	$	44,525

⁽¹⁾ At March 31, 2020, nonaccrual loans includes $2.5 million of PCD loans, of which $565,000 were classified as nonaccrual congruent with CECL adoption. Prior to the adoption of CECL, nonaccrual loans excluded pooled PCI loans as the Company recognized interest income on each pool of PCI loans as each of the pools was performing.

⁽²⁾ Presentation of December 31, 2019 balances is in accordance with pre-CECL disclosure requirements.

The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full of previously classified nonaccrual loans during the following period:

	For the Three Months Ended March 31, 2020
	Interest Income Reversed			Interest Income Recognized
	(In thousands)
Commercial business:
Commercial and industrial	$	(16	)	$	219
Owner-occupied commercial real estate	—			46
Non-owner occupied commercial real estate	—			45
Total commercial business	(16		)	310
Consumer	—			10
Total	$	(16	)	$	320

For the three months ended March 31, 2020 and 2019, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the table above.

(e) Past due loans

The Company performs an aging analysis of past due loans using policies consistent with regulatory reporting requirements with categories of 30-89 days past due and 90 or more days past due. The amortized cost of past due loans as of March 31, 2020 were as follows:

	March 31, 2020
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	2,632	$	6,589	$	9,221	$	880,464	$	889,685
Owner-occupied commercial real estate	353		490		843		804,793		805,636
Non-owner occupied commercial real estate	1,620		—		1,620		1,310,688		1,312,308
Total commercial business	4,605		7,079		11,684		2,995,945		3,007,629
One-to-four family residential	447		19		466		136,316		136,782
Real estate construction and land development:
One-to-four family residential	—		—		—		98,730		98,730
Five or more family residential and commercial properties	—		—		—		188,304		188,304
Total real estate construction and land development	—		—		—		287,034		287,034
Consumer	1,963		—		1,963		418,968		420,931
Total	$	7,015	$	7,098	$	14,113	$	3,838,263	$	3,852,376

The following table presents the amortized cost of past due loans as of December 31, 2019 in accordance with pre-CECL disclosure requirements:

	December 31, 2019
	30-89 Days		90 Days or Greater		Total Past  Due		Current		Total		PCI Loans		Loan Receivable
	(In thousands)
Commercial business:
Commercial and industrial	$	10,479	$	6,772	$	17,251	$	832,601	$	849,852	$	2,368	$	852,220
Owner-occupied commercial real estate	607		806		1,413		798,907		800,320		4,914		805,234
Non-owner occupied commercial real estate	554		1,843		2,397		1,280,891		1,283,288		5,491		1,288,779
Total commercial business	11,640		9,421		21,061		2,912,399		2,933,460		12,773		2,946,233
One-to-four family residential	797		—		797		127,288		128,085		3,575		131,660
Real estate construction and land development:
One-to-four family residential	1,516		—		1,516		102,780		104,296		—		104,296
Five or more family residential and commercial properties	—		—		—		170,350		170,350		—		170,350
Total real estate construction and land development	1,516		—		1,516		273,130		274,646		—		274,646
Consumer	2,071		—		2,071		411,507		413,578		1,762		415,340
Total	$	16,024	$	9,421	$	25,445	$	3,724,324	$	3,749,769	$	18,110	$	3,767,879

There were no loans 90 days or more past due that were still accruing interest as of March 31, 2020 or December 31, 2019.

(f) Collateral-dependent Loans

The types of collateral securing loans individually evaluated for ACL on loans, and for which the repayment was expected to be provided substantially through the operation or sale of the collateral as of March 31, 2020, were as follows:

	Loans receivable(1) at March 31, 2020
	Commercial Real Estate		Farmland		Single Family Residence		Equipment or Accounts Receivable		Other		Total
	(In thousands)
Commercial business:
Commercial and industrial	$	2,063	$	19,350	$	1,445	$	2,232	$	311	$	25,401
Owner-occupied commercial real estate	3,106		—		—		—		—		3,106
Non-owner occupied commercial real estate	5,794		—		—		—		—		5,794
Total commercial business	10,963		19,350		1,445		2,232		311		34,301
One-to-four family residential	—		—		19		—		—		19
Real estate construction and land development:
One-to-four family residential	—		—		1,516		—		—		1,516
Total	$	10,963	$	19,350	$	2,980	$	2,232	$	311	$	35,836

⁽¹⁾ Balances represent the amortized cost of loans receivable at date indicated. If multiple collateral secured the loan, the entire loan receivable balance is presented in the primary collateral category, which generally represents the majority of the collateral balance.

Under the incurred loss methodology, including the ASC 310-30 methodology for PCI loans, comparative disclosures of collateral-dependent loans as of December 31, 2019 and for the three months ended March 31, 2019 are similar to the disclosures for impaired loans. Impaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance, excluding PCI loans. The amortized cost of impaired loans as of December 31, 2019 are set forth in the following table:

	December 31, 2019
	Amortized Cost With No Specific Valuation Allowance		Amortized Cost With Specific Valuation Allowance		Total Amortized Cost		Unpaid Contractual Principal Balance		Related Specific Valuation Allowance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,179	$	13,629	$	43,808	$	45,585	$	1,372
Owner-occupied commercial real estate	3,921		2,415		6,336		6,764		426
Non-owner occupied commercial real estate	5,309		1,015		6,324		6,458		146
Total commercial business	39,409		17,059		56,468		58,807		1,944
One-to-four family residential	—		215		215		223		56
Real estate construction and land development:
One-to-four family residential	237		—		237		237		—
Consumer	—		561		561		570		143
Total	$	39,646	$	17,835	$	57,481	$	59,837	$	2,143

The average amortized cost of impaired loans for the three months ended March 31, 2019 are set forth in the following table:

	Three Months Ended March 31, 2019
	(In thousands)
Commercial business:
Commercial and industrial	$	22,639
Owner-occupied commercial real estate	5,935
Non-owner occupied commercial real estate	6,619
Total commercial business	35,193
One-to-four family residential	277
Real estate construction and land development:
One-to-four family residential	911
Consumer	562
Total	$	36,943

(g) Troubled Debt Restructured Loans

The amortized cost and related ACL on loans of performing and nonaccrual TDR loans as of March 31, 2020 and December 31, 2019 were as follows:

	March 31, 2020				December 31, 2019
	Performing TDR loans		Nonaccrual TDR loans		Performing TDR loans		Nonaccrual TDR loans
	(In thousands)
TDR loans	$	19,309	$	19,980	$	14,469	$	26,338
ACL on TDR loans	1,519		223		1,259		218

The unfunded commitment to borrowers related to TDR loans was $3.0 million and $736,000 at March 31, 2020 and December 31, 2019, respectively.

Loans that were modified as TDR loans during the three months ended March 31, 2020 and 2019 are set forth in the following table:

	Three Months Ended March 31,
	2020			2019
	Number of Contracts	Amortized Cost (1)		Number of Contracts	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	14	$	4,950	9	$	10,100
Owner-occupied commercial real estate	4	2,183		2	934
Non-owner occupied commercial real estate	3	2,210		1	2,112
Total commercial business	21	9,343		12	13,146
Real estate construction and land development:
One-to-four family residential	4	1,516		2	665
Consumer	5	93		6	122
Total	30	$	10,952	20	$	13,933

⁽¹⁾  Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).

The tables above includes 11 loans for both the three months ended March 31, 2020 and 2019 that were previously reported as TDR loans. The Bank typically grants shorter extension periods to continually monitor these TDR loans despite the fact that the extended date might not be the date the Bank expects sufficient cash flow from these borrowers. The Bank does not consider these modifications a subsequent default of a TDR as new loan terms, specifically new maturity dates, were granted. Of the remaining first-reported TDR loans, the concessions granted largely consisted of maturity extensions, interest rate modifications or a combination of both. The potential losses related to TDR loans are considered in the period the loan was first reported as a TDR loan and are adjusted, as necessary, in the current period based on more recent information. The related ACL at March 31, 2020 for loans that were modified as TDR loans during the three months ended March 31, 2020 was $768,000.

Loans that were modified during the previous twelve months that subsequently defaulted during the three months ended March 31, 2020 and 2019 are set forth in the following table:

	Three Months Ended March 31,
	2020			2019
	Number of Contracts	Amortized Cost		Number of Contracts	Amortized Cost
	(Dollars in thousands)
Commercial business:
Commercial and industrial	2	$	1,873	1	$	829
Owner-occupied properties	—	—		1	717
Non-owner occupied commercial real estate	3	590		1	601
Total	5	$	2,463	3	$	2,147

During the three months ended March 31, 2020 and 2019, all of these loans defaulted because each was past its modified maturity date and the borrower has not subsequently repaid the credits. The Bank has chosen not to extend further the maturity date on these loans. The Bank had ACL of $334,000 at March 31, 2020 related to these TDR loans which defaulted during the three months ended March 31, 2020.

For the three months ended March 31, 2020 and 2019, the Bank recorded $608,000 and $301,000, respectively, of interest income related to performing TDR loans.

(h) Purchased Credit Impaired Loans

Upon adoption of CECL, the Company transitioned PCI loans to PCD loans. The following table reflects the outstanding principal balance and recorded investment of PCI loans at December 31, 2019:

	December 31, 2019
	Outstanding Principal		Recorded Investment
	(In thousands)
Commercial business:
Commercial and industrial	$	4,439	$	2,368
Owner-occupied commercial real estate	4,925		4,914
Non-owner occupied commercial real estate	7,028		5,491
Total commercial business	16,392		12,773
One-to-four family residential	3,095		3,575
Consumer	1,463		1,762
Gross PCI loans	$	20,950	$	18,110

On the acquisition dates, the amount by which the undiscounted expected cash flows of the PCI loans exceeded the estimated fair value of the loan is the “accretable yield.” The accretable yield is then measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the PCI loans.

The following table summarizes the accretable yield on the PCI loans for the three months ended March 31, 2019:

	Three Months Ended March 31, 2019
	(In thousands)
Balance at the beginning of the period	$	9,493
Accretion	(581		)
Disposal and other	(452		)
Balance at the end of the period	$	8,460

Impaired Financing Receivables [Table Text Block]

mpaired loans include nonaccrual loans, performing TDR loans, and other loans with a specific valuation allowance, excluding PCI loans. The amortized cost of impaired loans as of December 31, 2019 are set forth in the following table:

	December 31, 2019
	Amortized Cost With No Specific Valuation Allowance		Amortized Cost With Specific Valuation Allowance		Total Amortized Cost		Unpaid Contractual Principal Balance		Related Specific Valuation Allowance
	(In thousands)
Commercial business:
Commercial and industrial	$	30,179	$	13,629	$	43,808	$	45,585	$	1,372
Owner-occupied commercial real estate	3,921		2,415		6,336		6,764		426
Non-owner occupied commercial real estate	5,309		1,015		6,324		6,458		146
Total commercial business	39,409		17,059		56,468		58,807		1,944
One-to-four family residential	—		215		215		223		56
Real estate construction and land development:
One-to-four family residential	237		—		237		237		—
Consumer	—		561		561		570		143
Total	$	39,646	$	17,835	$	57,481	$	59,837	$	2,143

Schedule of nonaccrual loans

he following table presents the amortized cost of nonaccrual loans for the dates indicated:

	March 31, 2020						December 31, 2019
	Nonaccrual with No ACL		Nonaccrual with ACL		Total Nonaccrual (1)		Nonaccrual (2)
	(In thousands)
Commercial business:
Commercial and industrial	$	24,068	$	2,019	$	26,087	$	33,544
Owner-occupied commercial real estate	3,103		888		3,991		4,714
Non-owner occupied commercial real estate	3,830		—		3,830		6,062
Total commercial business	31,001		2,907		33,908		44,320
One-to-four family residential	19		144		163		19
Consumer	—		92		92		186
Total	$	31,020	$	3,143	$	34,163	$	44,525

⁽¹⁾ At March 31, 2020, nonaccrual loans includes $2.5 million of PCD loans, of which $565,000 were classified as nonaccrual congruent with CECL adoption. Prior to the adoption of CECL, nonaccrual loans excluded pooled PCI loans as the Company recognized interest income on each pool of PCI loans as each of the pools was performing.

⁽²⁾ Presentation of December 31, 2019 balances is in accordance with pre-CECL disclosure requirements.

The following table presents the reversal of interest income on loans due to the write-off of accrued interest receivable upon the initial classification of loans as nonaccrual loans and the interest income recognized due to payment in full of previously classified nonaccrual loans during the following period:

	For the Three Months Ended March 31, 2020
	Interest Income Reversed			Interest Income Recognized
	(In thousands)
Commercial business:
Commercial and industrial	$	(16	)	$	219
Owner-occupied commercial real estate	—			46
Non-owner occupied commercial real estate	—			45
Total commercial business	(16		)	310
Consumer	—			10
Total	$	(16	)	$	320

For the three months ended March 31, 2020 and 2019, no interest income was recognized subsequent to a loan’s classification as nonaccrual, except as indicated in the table above.

Schedule of average recorded investment impaired loans including restructuring loans

he average amortized cost of impaired loans for the three months ended March 31, 2019 are set forth in the following table:

	Three Months Ended March 31, 2019
	(In thousands)
Commercial business:
Commercial and industrial	$	22,639
Owner-occupied commercial real estate	5,935
Non-owner occupied commercial real estate	6,619
Total commercial business	35,193
One-to-four family residential	277
Real estate construction and land development:
One-to-four family residential	911
Consumer	562
Total	$	36,943

(

Recorded investment balance and related allowance for loan losses of accruing and non-accruing TDRs

he amortized cost and related ACL on loans of performing and nonaccrual TDR loans as of March 31, 2020 and December 31, 2019 were as follows:

	March 31, 2020				December 31, 2019
	Performing TDR loans		Nonaccrual TDR loans		Performing TDR loans		Nonaccrual TDR loans
	(In thousands)
TDR loans	$	19,309	$	19,980	$	14,469	$	26,338
ACL on TDR loans	1,519		223		1,259		218

Troubled debt restructurings on financing receivables

oans that were modified as TDR loans during the three months ended March 31, 2020 and 2019 are set forth in the following table:

	Three Months Ended March 31,
	2020			2019
	Number of Contracts	Amortized Cost (1)		Number of Contracts	Amortized Cost (1)
	(Dollars in thousands)
Commercial business:
Commercial and industrial	14	$	4,950	9	$	10,100
Owner-occupied commercial real estate	4	2,183		2	934
Non-owner occupied commercial real estate	3	2,210		1	2,112
Total commercial business	21	9,343		12	13,146
Real estate construction and land development:
One-to-four family residential	4	1,516		2	665
Consumer	5	93		6	122
Total	30	$	10,952	20	$	13,933

⁽¹⁾  Includes subsequent payments after modifications and reflects the balance as of period end. As the Bank did not forgive any principal or interest balance as part of the loan modifications, the Bank’s amortized cost in each loan at the date of modification (pre-modification) did not change as a result of the modification (post-modification).

Troubled debt restructuring loans, subsequently defaulted

oans that were modified during the previous twelve months that subsequently defaulted during the three months ended March 31, 2020 and 2019 are set forth in the following table:

	Three Months Ended March 31,
	2020			2019
	Number of Contracts	Amortized Cost		Number of Contracts	Amortized Cost
	(Dollars in thousands)
Commercial business:
Commercial and industrial	2	$	1,873	1	$	829
Owner-occupied properties	—	—		1	717
Non-owner occupied commercial real estate	3	590		1	601
Total	5	$	2,463	3	$	2,147

Purchased impaired loans

he following table reflects the outstanding principal balance and recorded investment of PCI loans at December 31, 2019:

	December 31, 2019
	Outstanding Principal		Recorded Investment
	(In thousands)
Commercial business:
Commercial and industrial	$	4,439	$	2,368
Owner-occupied commercial real estate	4,925		4,914
Non-owner occupied commercial real estate	7,028		5,491
Total commercial business	16,392		12,773
One-to-four family residential	3,095		3,575
Consumer	1,463		1,762
Gross PCI loans	$	20,950	$	18,110

O