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Loans Receivable and Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2019
Receivables [Abstract]  
Loans Receivable and Allowance for Loan Losses
LOANS RECEIVABLE AND THE ALLOWANCE FOR LOAN LOSSES
The following is a summary of loans by major category at December 31, 2019 and 2018:
 
December 31, 2019
 
December 31, 2018
Loan portfolio composition
(Dollars in thousands)
Real estate loans:
 
 
 
Residential
$
52,437

 
$
51,197

Commercial
8,316,382

 
8,395,327

Construction
296,146

 
275,076

Total real estate loans
8,664,965

 
8,721,600

Commercial business
2,558,351

 
2,127,630

Trade finance
160,859

 
197,190

Consumer and other
889,090

 
1,051,486

Total loans outstanding
12,273,265

 
12,097,906

Deferred loan costs, net
2,742

 
209

 Loans receivable
12,276,007

 
12,098,115

Allowance for loan losses
(94,144
)
 
(92,557
)
Loans receivable, net of allowance for loan losses
$
12,181,863

 
$
12,005,558


The loan portfolio is made up of four segments: real estate loans, commercial business, trade finance, and consumer and other. Real estate loans are extended for the purchase and refinance of commercial real estate and are generally secured by first deeds of trust and are collateralized by residential or commercial properties. Commercial business loans are loans provided to businesses for various purposes such as for working capital, purchasing inventory, debt refinancing, business acquisitions and other business related financing needs. Trade finance loans generally serves businesses involved in international trade activities. Consumer and other loans consist mostly of single family residential mortgage loans but also includes home equity, credit cards, and other personal loans.
The four segments are further segregated between loans accounted for under the amortized cost method (“Legacy Loans”), and previously acquired loans that were originally recorded at fair value with no carryover of the related pre-acquisition allowance for loan losses (“Acquired Loans”). Acquired Loans are further segregated between purchased credit impaired loans (loans with credit deterioration on the date of acquisition and accounted for under ASC 310-30, or “PCI loans”), and Acquired Performing Loans (loans that were pass graded on the acquisition date and the fair value adjustment is amortized over the contractual life under ASC 310-20, or “non-PCI loans”).
The following table presents changes in the accretable discount on PCI loans for the years ended December 31, 2019 and 2018:
 
Year ended December 31,
 
2019
 
2018
 
(Dollars in thousands)
Balance at beginning of period
$
49,697

 
$
55,002

Accretion
(23,874
)
 
(21,837
)
Reclassification from nonaccretable difference
12,330

 
16,532

Balance at end of period
$
38,153

 
$
49,697


On the acquisition date, the amount by which the undiscounted expected cash flows exceed the estimated fair value of PCI loans is considered the “accretable yield”. The accretable yield is measured at each financial reporting date and represents the difference between the remaining undiscounted expected cash flows and the current carrying value of the loans. The accretable yield may change from period to period due to the following: 1) estimates of the remaining life of acquired loans will affect the amount of future interest income; 2) indices for variable rates of interest on PCI loans may change; and 3) estimates of the amount of the contractual principal and interest that will not be collected (nonaccretable difference) may change.
The following tables detail the activity in the allowance for loan losses by portfolio segment for the years indicated:
 
Legacy Loans
 
Acquired Loans
 
Total
 
Real
Estate
 
Commercial Business
 
Trade Finance
 
Consumer and Other
 
Real
Estate
 
Commercial Business
 
Trade Finance
 
Consumer and Other
 
 
(Dollars in thousands)
December 31, 2019
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
49,446

 
$
21,826

 
$
719

 
$
6,269

 
$
7,321

 
$
5,939

 
$
—

 
$
1,037

 
$
92,557

Provision (credit) for loan losses
(2,993
)
 
9,517

 
(481
)
 
1,978

 
(482
)
 
(120
)
 
—

 
(119
)
 
7,300

Loans charged off
(1,159
)
 
(4,121
)
 
—

 
(1,144
)
 
(644
)
 
(965
)
 
—

 
(76
)
 
(8,109
)
Recoveries of charge offs
1,706

 
1,083

 
216

 
34

 
398

 
297

 
—

 
2

 
3,736

PCI allowance adjustment
—

 
—

 
—

 
—

 
—

 
(878
)
 
—

 
(462
)
 
(1,340
)
Balance, end of period
$
47,000

 
$
28,305

 
$
454

 
$
7,137

 
$
6,593

 
$
4,273

 
$
—

 
$
382

 
$
94,144

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2018
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
45,360

 
$
17,228

 
$
1,674

 
$
3,385

 
$
13,322

 
$
3,527

 
$
42

 
$
3

 
$
84,541

Provision (credit) for loan losses
9,334

 
3,389

 
(588
)
 
4,098

 
(5,551
)
 
3,253

 
(42
)
 
1,007

 
14,900

Loans charged off
(6,273
)
 
(1,400
)
 
(408
)
 
(1,245
)
 
(453
)
 
(1,083
)
 
—

 
(13
)
 
(10,875
)
Recoveries of charge offs
1,025

 
2,609

 
41

 
31

 
3

 
242

 
—

 
40

 
3,991

Balance, end of period
$
49,446

 
$
21,826

 
$
719

 
$
6,269

 
$
7,321

 
$
5,939

 
$
—

 
$
1,037

 
$
92,557

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2017
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Balance, beginning of period
$
38,956

 
$
23,430

 
$
1,897

 
$
2,116

 
$
12,791

 
$
117

 
$
—

 
$
36

 
$
79,343

Provision (credit) for loan losses
8,524

 
(1,036
)
 
1,825

 
2,207

 
1,341

 
4,500

 
42

 
(43
)
 
17,360

Loans charged off
(2,292
)
 
(9,881
)
 
(2,104
)
 
(943
)
 
(850
)
 
(1,315
)
 
—

 
(25
)
 
(17,410
)
Recoveries of charged offs
172

 
4,715

 
56

 
5

 
40

 
225

 
—

 
35

 
5,248

Balance, end of period
$
45,360

 
$
17,228

 
$
1,674

 
$
3,385

 
$
13,322

 
$
3,527

 
$
42

 
$
3

 
$
84,541

The following tables break out the allowance for loan losses and the recorded investment of loans outstanding (not including accrued interest receivable and net deferred loan costs or fees) by individually impaired, general valuation, and PCI impairment, by portfolio segment at December 31, 2019 and December 31, 2018:
 
December 31, 2019
 
Legacy Loans
 
Acquired Loans
 
Total
 
Real
Estate
 
Commercial Business
 
Trade Finance
 
Consumer and Other
 
Real
Estate
 
Commercial Business
 
Trade Finance
 
Consumer and Other
 
 
(Dollars in thousands)
Allowance for loan losses:
Individually evaluated for impairment
$
202

 
$
2,198

 
$
—

 
$
11

 
$
110

 
$
875

 
$
—

 
$
6

 
$
3,402

Collectively evaluated for impairment
46,798

 
26,107

 
454

 
7,126

 
1,818

 
353

 
—

 
7

 
82,663

PCI loans
—

 
—

 
—

 
—

 
4,665

 
3,045

 
—

 
369

 
8,079

Total
$
47,000

 
$
28,305

 
$
454

 
$
7,137

 
$
6,593

 
$
4,273

 
$
—

 
$
382

 
$
94,144

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
37,218

 
$
19,044

 
$
103

 
$
2,202

 
$
27,380

 
$
3,695

 
$
—

 
$
852

 
$
90,494

Collectively evaluated for impairment
7,445,529

 
2,479,744

 
160,756

 
843,061

 
1,057,074

 
48,968

 
—

 
42,070

 
12,077,202

PCI loans
—

 
—

 
—

 
—

 
97,764

 
6,900

 
—

 
905

 
105,569

Total
$
7,482,747

 
$
2,498,788

 
$
160,859

 
$
845,263

 
$
1,182,218

 
$
59,563

 
$
—

 
$
43,827

 
$
12,273,265


 
December 31, 2018
 
Legacy Loans
 
Acquired Loans
 
Total
 
Real
Estate
 
Commercial Business
 
Trade Finance
 
Consumer and Other
 
Real
Estate
 
Commercial Business
 
Trade Finance
 
Consumer and Other
 
 
(Dollars in thousands)
Allowance for loan losses:
Individually evaluated for impairment
$
176

 
$
4,221

 
$
—

 
$
3

 
$
261

 
$
130

 
$
—

 
$
—

 
$
4,791

Collectively evaluated for impairment
49,270

 
17,605

 
719

 
6,266

 
1,264

 
460

 
—

 
19

 
75,603

PCI loans
—

 
—

 
—

 
—

 
5,796

 
5,349

 
—

 
1,018

 
12,163

Total
$
49,446

 
$
21,826

 
$
719

 
$
6,269

 
$
7,321

 
$
5,939

 
$
—

 
$
1,037

 
$
92,557

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Loans outstanding:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Individually evaluated for impairment
$
39,976

 
$
29,624

 
$
5,887

 
$
441

 
$
18,080

 
$
5,734

 
$
3,124

 
$
1,141

 
$
104,007

Collectively evaluated for impairment
7,037,392

 
1,988,067

 
188,179

 
910,292

 
1,507,858

 
80,916

 
—

 
133,942

 
11,846,646

PCI loans
—

 
—

 
—

 
—

 
118,294

 
23,289

 
—

 
5,670

 
147,253

Total
$
7,077,368

 
$
2,017,691

 
$
194,066

 
$
910,733

 
$
1,644,232

 
$
109,939

 
$
3,124

 
$
140,753

 
$
12,097,906


At December 31, 2019 and December 31, 2018, the balance of PCI loans that had credit deterioration subsequent to acquisition was $18.8 million and $57.9 million, respectively. PCI loans with subsequent credit deterioration had an allowance for loan losses balance of $8.1 million and $12.2 million at December 31, 2019 and December 31, 2018, respectively
As of December 31, 2019 and December 31, 2018, the reserves for unfunded commitments recorded in other liabilities was $636 thousand and $736 thousand, respectively. For the years ended December 31, 2019 and 2018, the Company recorded reductions to reserves for unfunded commitments recorded in credit related expenses totaling $100 thousand.
The recorded investment of individually impaired loans and the total impaired loans net of specific allowance is presented in the following table as of the dates indicated:
 
December 31, 2019
 
December 31, 2018
 
(Dollars in thousands)
With allocated specific allowance:
 
 
 
Without charge-off
$
33,344

 
$
35,365

With charge-off
3,453

 
681

With no allocated specific allowance:
 
 
 
Without charge-off
41,904

 
59,607

With charge-off
11,793

 
8,354

Specific allowance on impaired loans
(3,402
)
 
(4,791
)
Impaired loans, net of specific allowance
$
87,092

 
$
99,216


The following tables detail the recorded investment of impaired loans (Legacy Loans and Acquired Loans that became impaired subsequent to being originated and acquired, respectfully) by portfolio segment, the average recorded investment, and interest income recognized during the year. Loans with no related allowance for loan losses are believed by management to be adequately collateralized.
 
 
As of December 31, 2019
 
Year Ended December 31, 2019
Total Impaired Loans (1)
 
Recorded Investment (2)
 
Unpaid
Contractual Principal
Balance
 
Related
Allowance
 
Average
Recorded Investment (2)
 
Interest Income Recognized during Impairment
 
 
(Dollars in thousands)
With related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
2,593

 
2,904

 
66

 
2,105

 
48

Hotel & motel
 
1,877

 
5,925

 
65

 
1,723

 
—

Gas station & car wash
 
54

 
55

 
2

 
35

 
—

Mixed use
 
611

 
709

 
10

 
763

 
6

Industrial & warehouse
 
8,168

 
9,481

 
155

 
6,465

 
351

Other
 
2,636

 
2,902

 
14

 
3,337

 
88

Real estate – construction
 
—

 
—

 
—

 
—

 
—

Commercial business
 
19,254

 
20,849

 
3,073

 
21,814

 
601

Trade finance
 
103

 
103

 
—

 
606

 
2

Consumer and other
 
1,501

 
1,581

 
17

 
1,010

 
4

Subtotal
 
$
36,797

 
$
44,509

 
$
3,402

 
$
37,858

 
$
1,100

With no related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
4,557

 
5,027

 
—

 
10,657

 
172

Hotel & motel
 
9,024

 
16,831

 
—

 
9,917

 
—

Gas station & car wash
 
217

 
2,671

 
—

 
433

 
—

Mixed use
 
3,229

 
3,246

 
—

 
4,844

 
198

Industrial & warehouse
 
12,757

 
14,261

 
—

 
11,168

 
206

Other
 
8,710

 
13,811

 
—

 
10,880

 
260

Real estate – construction
 
10,165

 
10,165

 
—

 
2,033

 
—

Commercial business
 
3,485

 
8,628

 
—

 
8,545

 
126

Trade finance
 
—

 
—

 
—

 
4,127

 
—

Consumer and other
 
1,553

 
1,577

 
—

 
1,515

 
—

Subtotal
 
$
53,697

 
$
76,217

 
$
—

 
$
64,119

 
$
962

Total
 
$
90,494

 
$
120,726

 
$
3,402

 
$
101,977

 
$
2,062

__________________________________
(1) Impaired loans exclude acquired PCI loans
(2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts
 
 
As of December 31, 2019
 
Year Ended December 31, 2019
Impaired acquired loans (1)
 
Recorded Investment (2)
 
Unpaid
Contractual Principal
Balance
 
Related
Allowance
 
Average
Recorded Investment (2)
 
Interest Income Recognized during Impairment
 
 
(Dollars in thousands)
With related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
759

 
833

 
20

 
646

 
—

Hotel & motel
 
54

 
345

 
1

 
65

 
—

Gas station & car wash
 
54

 
55

 
2

 
35

 
—

Mixed use
 
273

 
282

 
9

 
293

 
6

Industrial & warehouse
 
229

 
1,012

 
74

 
269

 
—

Other
 
1,712

 
1,712

 
4

 
1,142

 
71

Real estate – construction
 
—

 
—

 
—

 
—

 
—

Commercial business
 
3,575

 
3,795

 
875

 
3,490

 
213

Trade finance
 
—

 
—

 
—

 
—

 
—

Consumer and other
 
738

 
781

 
6

 
255

 
—

Subtotal
 
$
7,394

 
$
8,815

 
$
991

 
$
6,195

 
$
290

With no related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
3,635

 
3,833

 
—

 
4,913

 
172

Hotel & motel
 
5,003

 
6,681

 
—

 
5,287

 
—

Gas station & car wash
 
217

 
2,671

 
—

 
215

 
—

Mixed use
 
—

 
—

 
—

 
1,564

 
—

Industrial & warehouse
 
93

 
894

 
—

 
61

 
—

Other
 
5,186

 
9,279

 
—

 
4,180

 
260

Real estate – construction
 
10,165

 
10,165

 
—

 
2,033

 
—

Commercial business
 
120

 
1,413

 
—

 
1,034

 
—

Trade finance
 
—

 
—

 
—

 
1,902

 
—

Consumer and other
 
114

 
137

 
—

 
649

 
—

Subtotal
 
$
24,533

 
$
35,073

 
$
—

 
$
21,838

 
$
432

Total
 
$
31,927

 
$
43,888

 
$
991

 
$
28,033

 
$
722


__________________________________
(1) Impaired loans exclude acquired PCI loans
(2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts
 
 
As of December 31, 2018
 
Year Ended December 31, 2018
Total Impaired Loans (1)
 
Recorded Investment (2)
 
Unpaid
Contractual Principal
Balance
 
Related
Allowance
 
Average
Recorded Investment (2)
 
Interest Income Recognized during Impairment
 
 
(Dollars in thousands)
With related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
50

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
1,375

 
1,487

 
156

 
3,554

 
30

Hotel & motel
 
1,949

 
2,310

 
119

 
2,700

 
—

Gas station & car wash
 
—

 
—

 
—

 
—

 
—

Mixed use
 
881

 
947

 
43

 
2,032

 
6

Industrial & warehouse
 
1,305

 
2,139

 
93

 
1,579

 
70

Other
 
7,759

 
8,174

 
26

 
6,038

 
372

Real estate – construction
 
—

 
—

 
—

 
—

 
—

Commercial business
 
22,203

 
23,928

 
4,351

 
23,146

 
511

Trade finance
 
—

 
—

 
—

 
2,143

 
—

Consumer and other
 
575

 
575

 
3

 
710

 
7

Subtotal
 
$
36,047

 
$
39,560

 
$
4,791

 
$
41,952

 
$
996

With no related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
8,005

 
11,234

 
—

 
9,913

 
143

Hotel & motel
 
10,877

 
22,590

 
—

 
6,085

 
—

Gas station & car wash
 
545

 
3,653

 
—

 
520

 
19

Mixed use
 
7,048

 
7,058

 
—

 
3,404

 
347

Industrial & warehouse
 
12,343

 
13,467

 
—

 
11,560

 
298

Other
 
5,969

 
7,122

 
—

 
13,107

 
106

Real estate – construction
 
—

 
—

 
—

 
520

 
—

Commercial business
 
13,155

 
17,850

 
—

 
18,041

 
531

Trade finance
 
9,011

 
9,011

 
—

 
5,405

 
487

Consumer and other
 
1,007

 
1,156

 
—

 
1,457

 
—

Subtotal
 
$
67,960

 
$
93,141

 
$
—

 
$
70,012

 
$
1,931

Total
 
$
104,007

 
$
132,701

 
$
4,791

 
$
111,964

 
$
2,927

__________________________________
(1) Impaired loans exclude acquired PCI loans
(2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts
 
 
As of December 31, 2018
 
Year Ended December 31, 2018
Impaired acquired loans (1)
 
Recorded Investment (2)
 
Unpaid
Contractual Principal
Balance
 
Related
Allowance
 
Average
Recorded Investment (2)
 
Interest Income Recognized during Impairment
 
 
(Dollars in thousands)
With related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
50

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
198

 
220

 
118

 
510

 
—

Hotel & motel
 
72

 
345

 
4

 
78

 
—

Gas station & car wash
 
—

 
—

 
—

 
—

 
—

Mixed use
 
312

 
312

 
38

 
1,813

 
6

Industrial & warehouse
 
230

 
1,050

 
88

 
246

 
—

Other
 
3,454

 
3,454

 
13

 
2,133

 
221

Real estate – construction
 
—

 
—

 
—

 
—

 
—

Commercial business
 
4,064

 
5,041

 
130

 
5,380

 
162

Trade finance
 
—

 
—

 
—

 
—

 
—

Consumer and other
 
144

 
144

 
—

 
89

 
7

Subtotal
 
$
8,474

 
$
10,566

 
$
391

 
$
10,299

 
$
396

With no related allowance:
 
 
 
 
 
 
 
 
 
 
Real estate – residential
 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
Retail
 
3,285

 
4,151

 
—

 
3,202

 
123

Hotel & motel
 
5,428

 
6,874

 
—

 
2,685

 
—

Gas station & car wash
 
247

 
2,673

 
—

 
176

 
—

Mixed use
 
3,722

 
3,726

 
—

 
789

 
148

Industrial & warehouse
 
119

 
894

 
—

 
253

 
—

Other
 
1,013

 
1,326

 
—

 
4,662

 
39

Real estate – construction
 
—

 
—

 
—

 
—

 
—

Commercial business
 
1,670

 
2,681

 
—

 
4,658

 
92

Trade finance
 
3,124

 
3,124

 
—

 
3,134

 
189

Consumer and other
 
997

 
1,144

 
—

 
1,298

 
—

Subtotal
 
$
19,605

 
$
26,593

 
$
—

 
$
20,857

 
$
591

Total
 
$
28,079

 
$
37,159

 
$
391

 
$
31,156

 
$
987


__________________________________
(1) Impaired loans exclude acquired PCI loans
(2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts
 
 
Year Ended December 31, 2017
Total Impaired Loans (1)
 
Average
Recorded Investment (2)
 
Interest Income Recognized during Impairment
 
 
(Dollars in thousands)
With related allowance:
 
 
 
 
Real estate – residential
 
$
—

 
$
—

Real estate – commercial
 
 
 
 
Retail
 
1,120

 
—

Hotel & motel
 
4,050

 
67

Gas station & car wash
 
43

 
—

Mixed use
 
245

 
6

Industrial & warehouse
 
1,135

 
—

Other
 
11,707

 
237

Real estate – construction
 
—

 
—

Commercial business
 
23,695

 
631

Trade finance
 
2,842

 
217

Consumer and other
 
240

 
4

Subtotal
 
$
45,077

 
$
1,162

With no related allowance:
 
 
 
 
Real estate – residential
 
$
1,105

 
$
—

Real estate – commercial
 
 
 
 
Retail
 
12,288

 
434

Hotel & motel
 
7,245

 
—

Gas station & car wash
 
3,168

 
—

Mixed use
 
3,496

 
—

Industrial & warehouse
 
8,676

 
262

Other
 
17,116

 
608

Real estate – construction
 
1,611

 
—

Commercial business
 
16,312

 
697

Trade finance
 
2,994

 
253

Consumer and other
 
1,225

 
25

Subtotal
 
$
75,236

 
$
2,279

Total
 
$
120,313

 
$
3,441


__________________________________
(1) Impaired loans exclude acquired PCI loans
(2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts
 
 
Year Ended December 31, 2017
Impaired acquired loans (1)
 
Average
Recorded Investment (2)
 
Interest Income Recognized during Impairment
 
 
(Dollars in thousands)
With related allowance:
 
 
 
 
Real estate – residential
 
$
—

 
$
—

Real estate – commercial
 
 
 
 
Retail
 
851

 
—

Hotel & motel
 
105

 
—

Gas station & car wash
 
—

 
—

Mixed use
 
179

 
6

Industrial & warehouse
 
225

 
—

Other
 
319

 
17

Real estate – construction
 
—

 
—

Commercial business
 
1,111

 
47

Trade finance
 
—

 
—

Consumer and other
 
—

 
—

Subtotal
 
$
2,790

 
$
70

With no related allowance:
 
 
 
 
Real estate – residential
 
$
235

 
$
—

Real estate – commercial
 
 
 
 
Retail
 
2,866

 
141

Hotel & motel
 
3,086

 
—

Gas station & car wash
 
619

 
—

Mixed use
 
2,191

 
—

Industrial & warehouse
 
59

 
3

Other
 
5,190

 
340

Real estate – construction
 
—

 
—

Commercial business
 
5,794

 
182

Trade finance
 
1,274

 
248

Consumer and other
 
645

 
7

Subtotal
 
$
21,959

 
$
921

Total
 
$
24,749

 
$
991

__________________________________
(1) Impaired loans exclude acquired PCI loans
(2) Unpaid contractual principal balance less charge offs, interest collected applied to principal if on nonaccrual and purchase discounts
Generally, loans are placed on nonaccrual status if principal and/or interest payments become 90 days or more past due and/or management deems the collectability of the principal and/or interest to be in question, as well as when required by regulatory requirements. Loans to customers whose financial condition has deteriorated are considered for nonaccrual status whether or not the loan is 90 days or more past due. Generally, payments received on nonaccrual loans are recorded as principal reductions. Loans are returned to accrual status only when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured. The Company did not recognize any cash basis interest income for the twelve months ended December 31, 2019 or 2018.
The following table represents the recorded investment of nonaccrual loans and loans past due 90 or more days and still on accrual status by class of loans as of December 31, 2019 or 2018.
 
Nonaccrual Loans(1)
 
Accruing Loans Past Due 90 or More Days
 
December 31, 2019
 
December 31, 2018
 
December 31, 2019
 
December 31, 2018
 
(Dollars in thousands)
Legacy Loans:
 
 
 
 
 
 
 
Real estate – residential
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
Retail
2,029

 
5,153

 
449

 
—

Hotel & motel
5,844

 
7,325

 
—

 
—

Gas station & car wash
—

 
31

 
—

 
—

Mixed use
505

 
749

 
634

 
—

Industrial & warehouse
10,222

 
6,111

 
—

 
—

Other
4,176

 
5,940

 
919

 
—

Real estate – construction
—

 
—

 
3,850

 
—

Commercial business
10,204

 
14,837

 
1,096

 
—

Trade finance
—

 
1,661

 
—

 
—

Consumer and other
2,105

 
441

 
599

 
243

Subtotal
$
35,085

 
$
42,248

 
$
7,547

 
$
243

Acquired Loans: (2)
 

 
 

 
 
 
 
Real estate – residential
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
Retail
905

 
829

 
—

 
—

Hotel & motel
5,057

 
5,500

 
—

 
1,286

Gas station & car wash
271

 
247

 
—

 
—

Mixed use
160

 
1,224

 
—

 
—

Industrial & warehouse
322

 
349

 
—

 
—

Other
1,279

 
259

 
—

 
—

Real estate – construction
10,165

 
—

 
—

 
—

Commercial business
689

 
1,632

 
—

 
—

Trade finance
—

 
—

 
—

 
—

Consumer and other
852

 
998

 
—

 
—

Subtotal
$
19,700

 
$
11,038

 
$
—

 
$
1,286

Total
$
54,785

 
$
53,286

 
$
7,547

 
$
1,529

__________________________________
(1) 
Total nonaccrual loans exclude guaranteed portion of delinquent SBA loans that are in liquidation totaling $28.1 million and $29.2 million, at December 31, 2019 and December 31, 2018, respectively.
(2) 
Acquired Loans exclude PCI loans.
The following tables present the recorded investment of past due loans, including nonaccrual loans past due 30 or more days, by the number of days past due as of December 31, 2019 and December 31, 2018 by class of loans:
 
As of December 31, 2019
 
As of December 31, 2018
 
30-59 Days
Past Due 
 
60-89 Days 
Past Due
 
90 or More Days
Past Due 
 
Total
Past Due
 
30-59 Days
Past Due 
 
60-89 Days 
Past Due
 
90 or More Days
Past Due 
 
Total
Past Due
 
(Dollars in thousands)
Legacy Loans:
 
 
 
 
 
 
 
 
 
Real estate – residential
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
1,083

 
1,424

 
2,417

 
4,924

 
733

 
—

 
809

 
1,542

Hotel & motel
821

 
936

 
2,025

 
3,782

 
153

 
—

 
5,215

 
5,368

Gas station & car wash
318

 
1,984

 
—

 
2,302

 
—

 
—

 
31

 
31

Mixed use
593

 
—

 
801

 
1,394

 
—

 
—

 
—

 
—

Industrial & warehouse
—

 
—

 
3,853

 
3,853

 
1,465

 
—

 
1,922

 
3,387

Other
—

 
—

 
3,409

 
3,409

 
1,837

 
—

 
2,405

 
4,242

Real estate – construction
—

 
—

 
3,850

 
3,850

 
—

 
—

 
—

 
—

Commercial business
344

 
126

 
5,475

 
5,945

 
5,500

 
435

 
7,003

 
12,938

Trade finance
—

 
—

 
—

 
—

 
1,036

 
—

 
1,661

 
2,697

Consumer and other
8,871

 
914

 
2,175

 
11,960

 
16,413

 
140

 
247

 
16,800

Subtotal
$
12,030

 
$
5,384

 
$
24,005

 
$
41,419

 
$
27,137

 
$
575

 
$
19,293

 
$
47,005

Acquired Loans: (1)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real estate – residential
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

 
$
—

Real estate – commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
—

 
—

 
620

 
620

 
347

 
—

 
602

 
949

Hotel & motel
525

 
—

 
4,384

 
4,909

 
—

 
—

 
5,206

 
5,206

Gas station & car wash
679

 
54

 
196

 
929

 
154

 
—

 
221

 
375

Mixed use
—

 
—

 
—

 
—

 
107

 
—

 
1,034

 
1,141

Industrial & warehouse
94

 
45

 
93

 
232

 
142

 
—

 
119

 
261

Other
811

 
785

 
295

 
1,891

 
183

 
219

 
—

 
402

Real estate – construction
—

 
—

 
10,165

 
10,165

 
—

 
—

 
—

 
—

Commercial business
57

 
226

 
242

 
525

 
397

 
613

 
253

 
1,263

Trade finance
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Consumer and other
981

 
—

 
477

 
1,458

 
—

 
—

 
334

 
334

Subtotal
$
3,147

 
$
1,110

 
$
16,472

 
$
20,729

 
$
1,330

 
$
832

 
$
7,769

 
$
9,931

Total Past Due
$
15,177

 
$
6,494

 
$
40,477

 
$
62,148

 
$
28,467

 
$
1,407

 
$
27,062

 
$
56,936

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
__________________________________
(1) 
Acquired Loans exclude PCI loans.
Loans accounted for under ASC 310-30 are generally considered accruing and performing and the accretable discount is accreted to interest income over the estimated life of the loan when cash flows are reasonably estimable. Accordingly, PCI loans that are contractually past due can still considered to be accruing and performing loans. The loans may be classified as nonaccrual if the timing and amount of future cash flows is not reasonably estimable.
The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including, but not limited to, current financial information, historical payment experience, credit documentation, public information, and current economic trends. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes all loans with the exception of homogeneous loans, or loans that are evaluated together in pools of similar loans (i.e., home mortgage loans, home equity lines of credit, overdraft loans, express business loans, and automobile loans). Homogeneous loans are not risk rated and credit risk is analyzed largely by the number of days past due. This analysis is performed at least on a quarterly basis.
The following tables presents the recorded investment of risk ratings for Legacy and Acquired Loans as of December 31, 2019 and December 31, 2018 by class of loans:
 
December 31, 2019
 
Pass/
Not Rated
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
 
(Dollars in thousands)
Legacy Loans:
 
 
 
Real estate – residential
$
48,414

 
$
—

 
$
143

 
$
—

 
$
48,557

Real estate – commercial
 
 
 
 
 
 
 
 

Retail
1,884,336

 
29,478

 
38,164

 
—

 
1,951,978

Hotel & motel
1,482,398

 
1,237

 
20,864

 
—

 
1,504,499

Gas station & car wash
738,988

 
1,707

 
4,560

 
—

 
745,255

Mixed use
634,186

 
1,974

 
8,211

 
—

 
644,371

Industrial & warehouse
834,514

 
7,641

 
35,739

 
—

 
877,894

Other
1,386,594

 
15,625

 
21,994

 
—

 
1,424,213

Real estate – construction
253,765

 
24,641

 
7,574

 
—

 
285,980

Commercial business
2,435,892

 
38,160

 
24,723

 
13

 
2,498,788

Trade finance
160,859

 
—

 
—

 
—

 
160,859

Consumer and other
842,947

 
157

 
2,159

 
—

 
845,263

Subtotal
$
10,702,893

 
$
120,620

 
$
164,131

 
$
13

 
$
10,987,657

Acquired Loans:
 
 
 
 
 
 
 
 
 
Real estate – residential
$
3,563

 
$
—

 
$
317

 
$
—

 
$
3,880

Real estate – commercial
 
 
 
 
 
 
 
 
 
Retail
322,519

 
3,442

 
10,597

 
—

 
336,558

Hotel & motel
147,647

 
158

 
11,294

 
—

 
159,099

Gas station & car wash
92,852

 
454

 
2,953

 
—

 
96,259

Mixed use
65,268

 
2,932

 
8,144

 
—

 
76,344

Industrial & warehouse
138,928

 
4,039

 
10,015

 
—

 
152,982

Other
311,674

 
9,791

 
25,466

 
—

 
346,931

Real estate – construction
—

 
—

 
10,165

 
—

 
10,165

Commercial business
45,185

 
7

 
14,371

 
—

 
59,563

Trade finance
—

 
—

 
—

 
—

 
—

Consumer and other
41,993

 
9

 
1,825

 
—

 
43,827

Subtotal
$
1,169,629

 
$
20,832

 
$
95,147

 
$
—

 
$
1,285,608

Total
$
11,872,522

 
$
141,452

 
$
259,278

 
$
13

 
$
12,273,265

 
December 31, 2018
 
Pass/
Not Rated
 
Special
Mention
 
Substandard
 
Doubtful
 
Total
 
(Dollars in thousands)
Legacy Loans:
 
 
 
Real estate – residential
$
44,066

 
$
—

 
$
546

 
$
—

 
$
44,612

Real estate – commercial
 
 
 
 
 
 
 
 
 
Retail
1,815,170

 
18,072

 
30,686

 
—

 
1,863,928

Hotel & motel
1,389,349

 
21,932

 
15,869

 
—

 
1,427,150

Gas station & car wash
814,291

 
2,810

 
2,464

 
—

 
819,565

Mixed use
510,021

 
12,480

 
13,292

 
—

 
535,793

Industrial & warehouse
711,236

 
1,665

 
38,332

 
—

 
751,233

Other
1,326,795

 
35,539

 
34,618

 
—

 
1,396,952

Real estate – construction
227,231

 
10,904

 
—

 
—

 
238,135

Commercial business
1,944,783

 
18,220

 
54,688

 
—

 
2,017,691

Trade finance
191,508

 
—

 
2,558

 
—

 
194,066

Consumer and other
910,292

 
—

 
441

 
—

 
910,733

Subtotal
$
9,884,742

 
$
121,622

 
$
193,494

 
$
—

 
$
10,199,858

Acquired Loans:
 
 
 
Real estate – residential
$
5,812

 
$
393

 
$
380

 
$
—

 
$
6,585

Real estate – commercial
 
 
 
 
 
 
 
 
 
Retail
483,939

 
4,651

 
17,332

 
35

 
505,957

Hotel & motel
186,761

 
807

 
19,472

 
—

 
207,040

Gas station & car wash
148,702

 
274

 
6,032

 
—

 
155,008

Mixed use
77,100

 
3,986

 
8,151

 
—

 
89,237

Industrial & warehouse
171,574

 
9,451

 
18,071

 
223

 
199,319

Other
402,247

 
12,902

 
28,996

 
—

 
444,145

Real estate – construction
29,058

 
7,883

 
—

 
—

 
36,941

Commercial business
89,611

 
1,083

 
19,237

 
8

 
109,939

Trade finance
—

 
—

 
3,124

 
—

 
3,124

Consumer and other
136,944

 
37

 
3,626

 
146

 
140,753

Subtotal
$
1,731,748

 
$
41,467

 
$
124,421

 
$
412

 
$
1,898,048

Total
$
11,616,490

 
$
163,089

 
$
317,915

 
$
412

 
$
12,097,906



The Company may reclassify loans held for investment to loans held for sale in the event that the Company plans to sell loans that were originated with the intent to hold to maturity. Loans transferred from held for investment to held for sale are transferred at the lower of cost or fair value. The breakdown of loans by type that were reclassified from held for investment to held for sale for the years ended December 31, 2019, 2018, and 2017 are presented in the table below.
 
Year ended December 31,
 
2019
 
2018
 
2017
 
(Dollars in thousands)
Transfer of loans held for investment to held for sale
 
 
 
 
 
Real estate - commercial
$
25,988

 
$
—

 
$
429

Consumer
140,006

 
21,581

 
—

     Total
$
165,994

 
$
21,581

 
$
429


 The following table presents the breakdown of loans by impairment method at December 31, 2019 and December 31, 2018:
 
December 31, 2019
 
Real Estate -
Residential
 
Real Estate -
Commercial
 
Real Estate -
Construction
 
Commercial
Business
 
Trade
Finance
 
Consumer
and Other
 
Total
 
(Dollars in thousands)
Impaired loans
(recorded investment)
$
—

 
$
54,433

 
$
10,165

 
$
22,739

 
$
103

 
$
3,054

 
$
90,494

Specific allowance
$
—

 
$
312

 
$
—

 
$
3,073

 
$
—

 
$
17

 
$
3,402

Specific allowance to impaired loans
N/A

 
0.57
%
 
—
%
 
13.51
%
 
—
%
 
0.56
%
 
3.76
%
Other loans
$
52,437

 
$
8,261,949

 
$
285,981

 
$
2,535,612

 
$
160,756

 
$
886,036

 
$
12,182,771

General allowance
$
204

 
$
51,400

 
$
1,677

 
$
29,505

 
$
454

 
$
7,502

 
$
90,742

General allowance to other loans
0.39
%
 
0.62
%
 
0.59
%
 
1.16
%
 
0.28
%
 
0.85
%
 
0.74
%
Total loans outstanding
$
52,437


$
8,316,382


$
296,146

 
$
2,558,351

 
$
160,859

 
$
889,090

 
$
12,273,265

Total allowance for loan losses
$
204

 
$
51,712

 
$
1,677

 
$
32,578

 
$
454

 
$
7,519

 
$
94,144

Total allowance to total loans
0.39
%
 
0.62
%
 
0.57
%
 
1.27
%
 
0.28
%
 
0.85
%
 
0.77
%
 
December 31, 2018
 
Real Estate -
Residential
 
Real Estate -
Commercial
 
Real Estate -
Construction
 
Commercial
Business
 
Trade
Finance
 
Consumer
and Other
 
Total
 
(Dollars in thousands)
Impaired loans
(recorded investment)
$
—

 
$
58,056

 
$
—

 
$
35,358

 
$
9,011

 
$
1,582

 
$
104,007

Specific allowance
$
—

 
$
437

 
$
—

 
$
4,351

 
$
—

 
$
3

 
$
4,791

Specific allowance to impaired loans
N/A

 
0.75
%
 
N/A

 
12.31
%
 
—
%
 
0.19
%
 
4.61
%
Other loans
$
51,197

 
$
8,337,271

 
$
275,076

 
$
2,092,272

 
$
188,179

 
$
1,049,904

 
$
11,993,899

General allowance
$
112

 
$
55,453

 
$
765

 
$
23,414

 
$
719

 
$
7,303

 
$
87,766

General allowance to other loans
0.22
%
 
0.67
%
 
0.28
%
 
1.12
%
 
0.38
%
 
0.70
%
 
0.73
%
Total loans outstanding
$
51,197

 
$
8,395,327

 
$
275,076

 
$
2,127,630

 
$
197,190

 
$
1,051,486

 
$
12,097,906

Total allowance for loan losses
$
112

 
$
55,890

 
$
765

 
$
27,765

 
$
719

 
$
7,306

 
$
92,557

Total allowance to total loans
0.22
%
 
0.67
%
 
0.28
%
 
1.30
%
 
0.36
%
 
0.69
%
 
0.77
%

Under certain circumstances, the Company provides borrowers relief through loan modifications. These modifications are either temporary in nature (“temporary modifications”) or are more substantive. The temporary modifications generally consist of interest only payments for a three to six month period, whereby principal payments are deferred. At the end of the modification period, the remaining principal balance is re-amortized based on the original maturity date. Loans subject to temporary modifications are generally downgraded to Special Mention or Substandard. At the end of the modification period, the loan either 1) returns to the original contractual terms; 2) is further modified and accounted for as a troubled debt restructuring in accordance with ASC 310-10-35; or 3) is disposed of through foreclosure or liquidation.
 
Troubled Debt Restructurings (“TDRs”) of loans are defined by ASC 310-40, “Troubled Debt Restructurings by Creditors”, and ASC 470-60, “Troubled Debt Restructurings by Debtors”, and evaluated for impairment in accordance with ASC 310-10-35. The concessions may be granted in various forms, including reduction in the stated interest rate, reduction in the amount of principal amortization, forgiveness of a portion of a loan balance or accrued interest, or extension of the maturity date. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed on the probability that the borrower will be in payment default their debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. At December 31, 2019, total TDR loans were $46.7 million, compared to $64.0 million at December 31, 2018.
A summary of the recorded investment of TDR loans on accrual and nonaccrual status by type of concession as of December 31, 2019 and December 31, 2018 are presented below:
 
December 31, 2019
 
TDRs on Accrual Status
 
TDRs on Nonaccrual Status
 
Total TDRs
 
Real
Estate
 
Commercial
Business
 
Other
 
Total
 
Real
Estate
 
Commercial
Business
 
Other
 
Total
 
 
(Dollars in thousands)
Payment concession
$
4,708

 
$
886

 
$
54

 
$
5,648

 
$
4,306

 
$
259

 
$
—

 
$
4,565

 
$
10,213

Maturity / amortization concession
14,537

 
10,778

 
43

 
25,358

 
—

 
5,931

 
122

 
6,053

 
31,411

Rate concession
4,419

 
181

 
103

 
4,703

 
334

 
65

 
—

 
399

 
5,102

Total
$
23,664

 
$
11,845

 
$
200

 
$
35,709

 
$
4,640

 
$
6,255

 
$
122

 
$
11,017

 
$
46,726

 
December 31, 2018
 
TDRs on Accrual Status

TDRs on Nonaccrual Status

Total TDRs
 
Real
Estate

Commercial
Business

Other

Total

Real
Estate

Commercial
Business

Other

Total

 
(Dollars in thousands)
Payment concession
$
5,142

 
$
961

 
$
—

 
$
6,103

 
$
2,216

 
$
746

 
$
—

 
$
2,962

 
$
9,065

Maturity / amortization concession
14,012

 
17,257

 
7,391

 
38,660

 
—

 
10,166

 
73

 
10,239

 
48,899

Rate concession
4,872

 
672

 
103

 
5,647

 
401

 
—

 
—

 
401

 
6,048

Total
$
24,026

 
$
18,890

 
$
7,494

 
$
50,410

 
$
2,617

 
$
10,912

 
$
73

 
$
13,602

 
$
64,012


TDR loans on accrual status are comprised of loans that were accruing at the time of restructuring and for which the Company anticipates full repayment of both principal and interest under the restructured terms. TDR loans that are on nonaccrual status can be returned to accrual status after a period of sustained performance, generally determined to be six months of timely payments as modified. Sustained performance includes the periods prior to the modification if the prior performance met or exceeded the modified terms. TDR loans on accrual status at December 31, 2019 were comprised of 15 commercial real estate loans totaling $23.7 million, 27 commercial business loans totaling $11.8 million and 12 consumer and other loans totaling $200 thousand. TDRs on accrual status at December 31, 2018 were comprised of 20 commercial real estate loans totaling $24.0 million, 37 commercial business loans totaling $18.9 million, and 6 consumer and other loans totaling $7.5 million. The Company expects that TDR loans on accrual status as of December 31, 2019, which were all performing in accordance with their restructured terms, to continue to comply with the restructured terms because of the reduced principal or interest payments on these loans. TDR loans that were restructured at market interest rates and had sustained performance as agreed under the modified loan terms may be reclassified as non-TDR after each year end but are reserved for under ASC 310-10.
The Company has allocated $3.1 million, $3.0 million, and $4.8 million of specific reserves on TDR loans as of December 31, 2019, 2018, and 2017, respectively. As of December 31, 2019 and 2018, the Company had outstanding commitments to extend additional funds to these borrowers totaling $742 thousand and $302 thousand, respectively.
The following table presents loans by class modified as TDRs that occurred during the years ended December 31, 2019, 2018, and 2017:
 
For The Years Ended December 31,
 
2019
 
2018
 
2017
 
Number of Loans 
 
Pre-Modification
 
Post-Modification 
 
Number of Loans 
 
Pre-Modification
 
Post-Modification 
 
Number of Loans 
 
Pre-Modification
 
Post-Modification 
 
(Dollars in thousands)
Legacy Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate - Residential
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

Real Estate - Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
1

 
438

 
438

 
2

 
53

 
53

 
2

 
1,082

 
1,082

Hotel & Motel
3

 
1,411

 
1,411

 
—

 
—

 
—

 
1

 
1,044

 
1,044

Gas Station & Car Wash
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Mixed Use
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Industrial & Warehouse
—

 
—

 
—

 
1

 
2,070

 
2,070

 
1

 
465

 
465

Other
1

 
101

 
101

 
1

 
1,215

 
1,215

 
—

 
—

 
—

Real Estate - Construction
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Commercial business
10

 
2,210

 
2,210

 
18

 
10,972

 
10,972

 
14

 
8,507

 
8,507

Trade Finance
—

 
—

 
—

 
1

 
898

 
898

 
—

 
—

 
—

Consumer and Other
10

 
54

 
54

 
1

 
63

 
63

 
—

 
—

 
—

Subtotal
25

 
$
4,214

 
$
4,214

 
24

 
$
15,271

 
$
15,271

 
18

 
$
11,098

 
$
11,098

Acquired Loans:
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Real Estate - Residential
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

 
—

 
$
—

 
$
—

Real Estate - Commercial
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Retail
4

 
1,027

 
1,027

 
—

 
—

 
—

 
3

 
1,642

 
1,642

Hotel & Motel
—

 
—

 
—

 
—

 
—

 
—

 
1

 
482

 
482

Gas Station & Car Wash
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Mixed Use
—

 
—

 
—

 
1

 
73

 
73

 
—

 
—

 
—

Industrial & Warehouse
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

 
—

Other
4

 
2,793

 
2,793

 
1

 
2,688

 
2,688

 
2

 
6,946

 
6,946

Real Estate - Construction
—

 
—

 
—

 
1

 
230

 
230

 
—

 
—

 
—

Commercial business
1

 
131

 
131

 
—

 
—

 
—

 
8

 
4,224

 
4,224

Trade Finance
—

 
—

 
—

 
—

 
—

 
—

 
1

 
2,983

 
2,983

Consumer and Other
—

 
—

 
—

 
8

 
1,764

 
1,764

 
—

 
—

 
—

Subtotal
9

 
$
3,951

 
$
3,951

 
11

 
$
4,755

 
$
4,755

 
15

 
$
16,277

 
$
16,277

Total
34

 
$
8,165

 
$
8,165

 
35

 
$
20,026

 
$
20,026

 
33

 
$
27,375

 
$
27,375


The specific reserves for the TDRs modified during the twelve months ended December 31, 2019, 2018, and 2017 were $110 thousand, $262 thousand, and $1.4 million, respectively. Charge offs for TDR loans modified during the twelve months ended December 31, 2019 totaled $33 thousand. There were no charge offs for TDR modified during the twelve months ended December 31, 2018 and 2017.
The following table presents loans by class for TDRs that have been modified during the twelve months ended December 31, 2019, 2018, and 2017, and have subsequently had a payment default during the years ended December 31, 2019, 2018, and 2017, respectively:
 
For The Years Ended December 31,
 
2019
 
2018
 
2017
 
Number of
Loans
 
Balance
 
Number of
Loans
 
Balance
 
Number of
Loans
 
Balance
 
(Dollars in thousands)
Legacy Loans:
 
 
 
 
 
 
 
 
 
 
 
Real Estate - Residential
—

 
$
—

 
—

 
$
—

 
—

 
$
—

Real Estate - Commercial
 
 
 
 
 
 
 
 
 
 
 
Retail
1

 
48

 
1

 
53

 
—

 
—

Hotel & Motel
1

 
707

 
1

 
734

 
—

 
—

Gas Station & Car Wash
—

 
—

 
—

 
—

 
—

 
—

Mixed Use
—

 
—

 
—

 
—

 
—

 
—

Industrial & Warehouse
—

 
—

 
1

 
2,070

 
—

 
—

Other
1

 
101

 
1

 
1,215

 
—

 
—

Real Estate - Construction
—

 
—

 
—

 
—

 
—

 
—

Commercial Business
—

 
—

 
2

 
886

 
2

 
178

Trade Finance
—

 
—

 
—

 
—

 
—

 
—

Consumer and Other
12

 
48

 
—

 
—

 
—

 
—

Subtotal
15

 
$
904

 
6

 
$
4,958

 
2

 
$
178

Acquired Loans:
 
 
 
 
 
 
 
 
 
 
 
Real Estate - Residential
—

 
$
—

 
—

 
$
—

 
—

 
$
—

Real Estate - Commercial
 
 
 
 
 
 
 
 
 
 
 
Retail
1

 
93

 
—

 
—

 
—

 
—

Hotel & Motel
1

 
54

 
—

 
—

 
1

 
482

Mixed Use
—

 
—

 
—

 
—

 
—

 
—

Gas Station & Car Wash
—

 
—

 
—

 
—

 
—

 
—

Industrial & Warehouse
1

 
229

 
1

 
230

 
—

 
—

Other
2

 
950

 
—

 
—

 
1

 
2,977

Real Estate - Construction
—

 
—

 
—

 
—

 
—

 
—

Commercial Business
4

 
237

 
3

 
189

 
1

 
40

Trade Finance
—

 
—

 
—

 
—

 
—

 
—

Consumer and Other
—

 
—

 
—

 
—

 
—

 
—

Subtotal
9

 
$
1,563

 
4

 
$
419

 
3

 
$
3,499

Total
24

 
$
2,467

 
10

 
$
5,377

 
5

 
$
3,677


A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms. The specific reserves for the TDRs described above as of December 31, 2019, 2018, and 2017 were $105 thousand, $131 thousand, and $60 thousand, respectively, and the charge offs for the years ended December 31, 2019, 2018, and 2017 were $107 thousand, $180 thousand, and $0, respectively.
The fifteen Legacy Loans that subsequently defaulted in 2019 were modified through payment concession. The payment concessions were comprised of three commercial real estate loans totaling $856 thousand and twelve consumer loans totaling $48 thousand.
The nine Acquired Loans that subsequently defaulted in 2019 were modified through payment concessions. The payment concessions were comprised of five commercial real estate loans totaling $1.3 million and four commercial business loans totaling $237 thousand.
The six Legacy Loans that subsequently defaulted in 2018 were modified through payment concession or maturity concession. The payment concessions were comprised of two commercial real estate loans totaling $787 thousand. The maturity concessions were comprised of two commercial real estate loans totaling $3.3 million and two commercial business loan totaling $886 thousand.
The four Acquired Loans that subsequently defaulted in 2018 were modified through payment concessions. The payment concessions were comprised of three commercial business loan totaling $189 thousand and one real estate loan totaling $230 thousand.
The two Legacy Loans that subsequently defaulted in 2017 were modified through payment concession or maturity concession. The payment concession was comprised of one commercial business loan totaling $40 thousand. The maturity concession was comprised of one commercial business loan totaling $138 thousand.
The three Acquired Loans that subsequently defaulted in 2017 were modified through payment concessions or maturity concession. The maturity concession was comprised of one commercial business loan totaling $40 thousand. There were two real
estate loans totaling $3.5 million modified through payment concessions.
Related Party Loans
In the ordinary course of business, the Company enters into loan transactions with certain of its directors or associates of such directors (“Related Parties”). All loans to Related Parties were made at substantially the same terms and conditions at the time of origination as other originated loans to borrowers that were not affiliated with the Company. All loans to Related Parties were current as of December 31, 2019 and 2018, and the outstanding principal balance as of December 31, 2019 and 2018 was $32.2 million and $39.3 million, respectively. Loans to related parties at December 31, 2019 consisted of $31.8 million in real estate loans and $465 thousand in commercial loans. Loans to related parties at December 31, 2018 consisted of $38.8 million in real estate loans and $531 thousand in commercial loans. The reduction in related party loans of $6.9 million from December 31, 2018 to December 31, 2019 was due to $16.1 million in loans paid off and $740 thousand in principal pay-downs partially offset by one new related party loan in the amount of $9.7 million.