Loans Receivable and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2021

Receivables [Abstract]

Loans Receivable and Allowance for Credit Losses

Loans Receivable and Allowance for Credit Losses

On January 1, 2020, the Company adopted CECL, which replaced the incurred loss methodology with an expected loss methodology. The adoption of the new standard resulted in the Company recording a $7.9 million increase to the allowance for credit losses on loans with a corresponding cumulative effect adjustment to decrease retained earnings by $5.9 million, net of income taxes. (See Adoption of CECL table below for additional detail.)

Loans receivable at September 30, 2021 and December 31, 2020 are summarized as follows (in thousands):

	September 30, 2021		December 31, 2020
Mortgage loans:
Residential	$	1,230,018	1,294,702
Commercial	3,704,684		3,458,666
Multi-family	1,379,773		1,484,515
Construction	685,792		541,939
Total mortgage loans	7,000,267		6,779,822
Commercial loans	2,234,020		2,567,470
Consumer loans	333,741		492,566
Total gross loans	9,568,028		9,839,858
Premiums on purchased loans	1,313		1,566
Unearned discounts	(6)		(12)
Net deferred fees	(14,735)		(18,522)
Total loans	$	9,554,600	9,822,890

In the first quarter of 2021, $101.7 million of loans acquired in the SB One transaction that were previously classified as consumer loans were classified as commercial mortgage loans, following further analysis of the underwriting documents and operational intent of the borrower. These loans are comprised of term loans and lines of credit secured by 1-4 family residential properties that are held by borrowers to generate rental income.

The following tables summarize the aging of loans receivable by portfolio segment and class of loans (in thousands):

	September 30, 2021
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable	Non-accrual loans with no related allowance
Mortgage loans:
Residential	$	4,667	2,177	7,263	—	14,107	1,215,911	1,230,018	7,263
Commercial	843		—	32,619	—	33,462	3,671,222	3,704,684	22,617
Multi-family	250		—	439	—	689	1,379,084	1,379,773	439
Construction	—		—	2,967	—	2,967	682,825	685,792	2,967
Total mortgage loans	5,760		2,177	43,288	—	51,225	6,949,042	7,000,267	33,286
Commercial loans	1,668		1,028	21,434	—	24,130	2,209,890	2,234,020	15,159
Consumer loans	2,129		—	1,479	—	3,608	330,133	333,741	1,479
Total gross loans	$	9,557	3,205	66,201	—	78,963	9,489,065	9,568,028	49,924

	December 31, 2020
	30-59 Days		60-89 Days	Non-accrual	Recorded Investment > 90 days accruing	Total Past Due	Current	Total Loans Receivable	Non-accrual loans with no related allowance
Mortgage loans:
Residential	$	15,789	8,852	9,315	—	33,956	1,260,746	1,294,702	9,315
Commercial	761		113	31,982	—	32,856	3,425,810	3,458,666	20,482
Multi-family	206		585	—	—	791	1,483,724	1,484,515	—
Construction	—		—	1,392	—	1,392	540,547	541,939	1,392
Total mortgage loans	16,756		9,550	42,689	—	68,995	6,710,827	6,779,822	31,189
Commercial loans	1,658		1,179	42,118	—	44,955	2,522,515	2,567,470	15,541
Consumer loans	4,348		4,519	2,283	—	11,150	481,416	492,566	2,283
Total gross loans	$	22,762	15,248	87,090	—	125,100	9,714,758	9,839,858	49,013

Included in loans receivable are loans for which the accrual of interest income has been discontinued due to deterioration in the financial condition of the borrowers. The principal amounts of these non-accrual loans were $66.2 million and $87.1 million at September 30, 2021 and December 31, 2020, respectively. Included in non-accrual loans were $28.5 million and $35.3 million of loans which were less than 90 days past due at September 30, 2021 and December 31, 2020, respectively. There were no loans 90 days or greater past due and still accruing interest at September 30, 2021 and December 31, 2020.

Management has elected to measure an allowance for credit losses for accrued interest receivables specifically related to any loan that has been deferred as a result of COVID-19. Generally, accrued interest is written off by reversing interest income during the quarter the loan is moved from an accrual to a non-accrual status.

The Company defines an impaired loan as a non-homogeneous loan greater than $1.0 million, for which, based on current information, the Bank does not expect to collect all amounts due under the contractual terms of the loan agreement. Impaired loans also include all loans modified as troubled debt restructurings (“TDRs”). An allowance for collateral-dependent impaired loans that have been modified in a TDR is measured based on the present value of expected future cash flows discounted at the loan’s effective interest rate, the loan’s observable market price, or the estimated fair value of the collateral, less any selling costs. The Company uses third-party appraisals to determine the fair value of the underlying collateral in its analysis of collateral-dependent loans. A third-party appraisal is generally ordered as soon as a loan is designated as a collateral-dependent loan and updated annually, or more frequently if required.

A financial asset is considered collateral-dependent when the debtor is experiencing financial difficulty and repayment is expected to be provided substantially through the sale or operation of the collateral. For all classes of loans deemed collateral-dependent, the Company estimates expected credit losses based on the fair value of the collateral less any selling costs. A specific allocation of the allowance for credit losses is established for each collateral-dependent loan with a carrying balance greater than the collateral’s fair value, less estimated selling costs. In most cases, the Company records a partial charge-off to reduce the loan’s carrying value to the collateral’s fair value less estimated selling costs. At each fiscal quarter end, if a loan is designated as collateral-dependent and the third-party appraisal has not yet been received, an evaluation of all available collateral is made using the best information available at the time, including rent rolls, borrower financial statements and tax returns, prior appraisals, management’s knowledge of the market and collateral, and internally prepared collateral valuations based upon market assumptions regarding vacancy and capitalization rates, each as and where applicable. Once the appraisal is received and reviewed, the specific reserves are adjusted to reflect the appraised value and evaluated for charge offs. The Company believes there have been no significant time lapses resulting from this process.

At September 30, 2021, there were 159 impaired loans totaling $68.0 million. Included in this total were 111 TDRs related to 107 borrowers totaling $21.8 million that were performing in accordance with their restructured terms and which continued to accrue interest at September 30, 2021. At December 31, 2020, there were 169 impaired loans totaling $86.0 million, of which 135 loans totaling $39.6 million were TDRs. Included in this total were 112 TDRs to 110 borrowers totaling $23.1 million that were performing in accordance with their restructured terms and which continued to accrue interest at December 31, 2020.

At September 30, 2021 and December 31, 2020, the Company had $31.7 million and $26.3 million related to the fair value of underlying collateral-dependent impaired loans, respectively. These collateral-dependent impaired loans at September 30, 2021 consisted of $30.1 million in commercial loans, $1.6 million in residential real estate loans, and $75,000 in consumer loans. The collateral for these impaired loans was primarily real estate.

The activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2021 and 2020 was as follows (in thousands):

Three months ended September 30,	Mortgage loans		Commercial loans	Consumer loans	Total
2021
Balance at beginning of period	$	55,469	21,262	4,228	80,959
Provision charge (benefit) to operations	626		963	(589)	1,000
Recoveries of loans previously charged-off	71		336	140	547
Loans charged-off	(2,110)		(263)	(100)	(2,473)
Balance at end of period	$	54,056	22,298	3,679	80,033
2020
Balance at beginning of period	$	54,871	25,284	6,104	86,259
Provision charge to operations	2,922		2,767	722	6,411
Initial allowance on credit loans related to PCD loans	11,984		1,582	20	13,586
Recoveries of loans previously charged-off	35		679	144	858
Loans charged-off	(22)		(727)	(51)	(800)
Balance at end of period	$	69,790	29,585	6,939	106,314

Nine months ended September 30,	Mortgage loans		Commercial loans	Consumer loans	Total
2021
Balance at beginning of period	$	68,307	27,084	6,075	101,466
Provision benefit to operations	(11,760)		(10,319)	(2,621)	(24,700)
Recoveries of loans previously charged-off	538		6,654	640	7,832
Loans charged-off	(3,029)		(1,121)	(415)	(4,565)
Balance at end of period	$	54,056	22,298	3,679	80,033
2020
Balance at beginning of period	$	25,511	28,263	1,751	55,525
Provision charge to operations	17,987		12,672	1,352	32,011
Initial allowance on credit loans related to PCD loans	11,984		1,582	20	13,586
Recoveries of loans previously charged-off	143		1,597	370	2,110
Increase (decrease) due to initial CECL adoption - retained earnings	14,188		(9,974)	3,706	7,920
Loans charged-off	(23)		(4,555)	(260)	(4,838)
Balance at end of period	$	69,790	29,585	6,939	106,314

As a result of the January 1, 2020 adoption of CECL, the Company recorded a $7.9 million increase to the allowance for credit losses on loans. For the three and nine months ended September 30, 2021, the Company recorded a $1.0 million provision for credit losses on loans and a $24.7 million negative provision for credit losses on loans, respectively. The reduction in provision for credit losses for three and nine months ended September 30, 2021, compared to the same period in the prior year, was primarily the result of improved asset quality, an improved economic forecast and the resultant favorable impact on expected credit losses, compared to the prior year where the provision for credit losses was based upon a weak economic forecast and a more uncertain outlook attributable to the COVID-19 pandemic.

The following table illustrates the impact of the January 1, 2020 adoption of CECL on the allowance for credit losses for the loan portfolio (in thousands):

	January 1, 2020
	As reported under CECL		Prior to CECL	Impact of CECL adoption
Loans
Residential	$	8,950	3,414	5,536
Commercial	17,118		12,831	4,287
Multi-family	9,519		3,374	6,145
Construction	4,152		5,892	(1,740)
Total mortgage loans	39,739		25,511	14,228
Commercial loans	18,254		28,263	(10,009)
Consumer loans	5,452		1,751	3,701
Allowance for credit losses on loans	$	63,445	55,525	7,920

The following tables summarize loans receivable by portfolio segment and impairment method (in thousands):

	September 30, 2021
	Mortgage loans		Commercial loans	Consumer loans	Total Portfolio Segments
Individually evaluated for impairment	$	50,577	16,177	1,284	68,038
Collectively evaluated for impairment	6,949,690		2,217,843	332,457	9,499,990
Total gross loans	$	7,000,267	2,234,020	333,741	9,568,028

	December 31, 2020
	Mortgage loans		Commercial loans	Consumer loans	Total Portfolio Segments
Individually evaluated for impairment	$	48,783	35,832	1,431	86,046
Collectively evaluated for impairment	6,731,039		2,531,638	491,135	9,753,812
Total gross loans	$	6,779,822	2,567,470	492,566	9,839,858

The allowance for credit losses is summarized by portfolio segment and impairment classification as follows (in thousands):

	September 30, 2021
	Mortgage loans		Commercial loans	Consumer loans	Total
Individually evaluated for impairment	$	1,574	3,604	57	5,235
Collectively evaluated for impairment	52,482		18,694	3,622	74,798
Total gross loans	$	54,056	22,298	3,679	80,033

	December 31, 2020
	Mortgage loans		Commercial loans	Consumer loans	Total
Individually evaluated for impairment	$	4,220	4,715	39	8,974
Collectively evaluated for impairment	64,087		22,369	6,036	92,492
Total gross loans	$	68,307	27,084	6,075	101,466

Loan modifications to borrowers experiencing financial difficulties that are considered TDRs primarily involve lowering the monthly payments on such loans through either a reduction in interest rate below a market rate, an extension of the term of the loan without a corresponding adjustment to the risk premium reflected in the interest rate, or a combination of these two methods. These modifications generally do not result in the forgiveness of principal or accrued interest. In addition, management attempts to obtain

additional collateral or guarantor support when modifying such loans. If the borrower has demonstrated performance under the previous terms and our underwriting process shows the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest. Non-accruing restructured loans may be returned to accrual status when there has been a sustained period of repayment performance (generally six consecutive months of payments) and both principal and interest are deemed collectible.

The following tables present the number of loans modified as TDRs during the three and nine months ended September 30, 2021 and 2020, along with their balances immediately prior to the modification date and post-modification as of September 30, 2021 and 2020 (in thousands):

	For the three months ended
	September 30, 2021					September 30, 2020
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded  Investment		Post-Modification Outstanding Recorded Investment		Number of Loans	Pre-Modification Outstanding Recorded  Investment		Post-Modification Outstanding Recorded  Investment
Mortgage loans:
Residential	2	$	375	$	369	1	$	91	$	79
Total mortgage loans	2	375		369		1	91		79
Commercial loans	—	—		—		1	1,399		1,399
Total restructured loans	2	$	375	$	369	2	$	1,490	$	1,478

	For the nine months ended
	September 30, 2021					September 30, 2020
Troubled Debt Restructurings	Number of Loans	Pre-Modification Outstanding Recorded  Investment		Post-Modification Outstanding Recorded  Investment		Number of Loans	Pre-Modification Outstanding Recorded  Investment		Post-Modification Outstanding Recorded  Investment
Mortgage loans:
Residential	3	$	546	$	538	2	$	434	$	360
Total mortgage loans	3	546		538		2	434		360
Commercial loans	4	2,940		2,318		5	2,882		2,791
Total restructured loans	7	$	3,486	$	2,856	7	$	3,316	$	3,151

All TDRs are impaired loans, which are individually evaluated for impairment. During the three and nine months ended September 30, 2021, $2.1 million and $3.5 million of charge-offs were recorded on collateral-dependent impaired loans, respectively. During the three and nine months ended September 30, 2020, $612,000 and $3.8 million of charge-offs were recorded on collateral-dependent impaired loans, respectively. For the nine months ended September 30, 2021, the allowance for credit losses associated with the TDRs presented in the preceding tables totaled $56,000, and was included in the allowance for credit losses for loans individually evaluated for impairment.

For the three and nine months ended September 30, 2021, the TDRs presented in the preceding tables had a weighted average modified interest rate of 3.22% and 4.35%, respectively, compared to a weighted average rate of 4.83% and 4.64% prior to modification, for the three and nine months ended September 30, 2021, respectively.

There were no loans which had a payment default (90 days or more past due) for loans modified as TDRs within the 12 month periods ending September 30, 2021 and September 30, 2020. For TDRs that subsequently default, the Company determines the amount of the allowance for the respective loans in accordance with the accounting policy for the allowance for credit losses on loans individually evaluated for impairment.

As allowed by CECL, the Company elected to maintain pools of loans accounted for under ASC 310-30. At December 31, 2020, purchased credit impaired (“PCI”) loans totaled $746,000. In accordance with the CECL standard, management did not reassess whether modifications of individually acquired financial assets accounted for in pools were TDRs as of the date of adoption. Loans considered to be PCI prior to January 1, 2020 were converted to PCD loans on that date. Any additional loans acquired by the Company after January 1, 2020 that experience more-than-insignificant deterioration in credit quality after origination, will be classified as PCD loans.

The table below is a summary of the PCD loans accounted for in accordance with ASC 310-26 that were acquired in the SB One acquisition as of the July 31, 2020 closing date (in thousands):

Gross amortized cost basis at July 31, 2020	$	315,784
Interest component of expected cash flows (accretable difference)	(7,988)
Fair value of PCD loans	307,796
Allowance for credit losses on PCD loans	(13,586)
Net PCD loans	$	294,210

At September 30, 2021, the balance of PCD loans totaled $259.3 million with a related allowance for credit losses of $12.3 million. The balance of PCD loans at December 31, 2020 was $296.6 million with a related allowance for credit losses of $13.1 million.

The following table presents loans individually evaluated for impairment by class and loan category (in thousands):

	September 30, 2021						December 31, 2020
	Unpaid Principal Balance		Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized	Unpaid Principal Balance	Recorded Investment	Related Allowance	Average Recorded Investment	Interest Income Recognized
Loans with no related allowance
Mortgage loans:
Residential	$	12,088	9,447	—	9,588	331	13,981	11,380	—	11,587	511
Commercial	26,407		20,277	—	23,012	65	17,414	17,414	—	16,026	60
Multi-family	—		—	—	—	—	—	—	—	—	—
Construction	2,200		2,190	—	2,148	30	—	—	—	—	—
Total	40,695		31,914	—	34,748	426	31,395	28,794	—	27,613	571
Commercial loans	9,989		7,461	—	7,760	26	15,895	14,009	—	12,791	46
Consumer loans	1,412		880	—	909	53	1,382	880	—	7	50
Total impaired loans	$	52,096	40,255	—	43,417	505	48,672	43,683	—	40,411	667
Loans with an allowance recorded
Mortgage loans:
Residential	$	8,113	7,781	860	7,855	198	7,950	7,506	806	7,604	307
Commercial	11,288		10,882	714	11,098	36	14,993	12,483	3,414	123	570
Multi-family	—		—	—	—	—	—	—	—	—	—
Total	19,401		18,663	1,574	18,953	234	22,943	19,989	4,220	7,727	877
Commercial loans	9,614		8,716	3,604	12,198	221	24,947	21,823	4,715	18,620	311
Consumer loans	423		404	57	411	14	565	551	39	5	20
Total impaired loans	$	29,438	27,783	5,235	31,562	469	48,455	42,363	8,974	26,352	1,208
Total impaired loans
Mortgage loans:
Residential	$	20,201	17,228	860	17,443	529	21,931	18,886	806	19,191	818
Commercial	37,695		31,159	714	34,110	101	32,407	29,897	3,414	16,149	630
Multi-family	—		—	—	—	—	—	—	—	—	—
Construction	2,200		2,190	—	2,148	30	—	—	—	—	—
Total	60,096		50,577	1,574	53,701	660	54,338	48,783	4,220	35,340	1,448
Commercial loans	19,603		16,177	3,604	19,958	247	40,842	35,832	4,715	31,411	357
Consumer loans	1,835		1,284	57	1,320	67	1,947	1,431	39	12	70
Total impaired loans	$	81,534	68,038	5,235	74,979	974	97,127	86,046	8,974	66,763	1,875

Specific allocations of the allowance for credit losses attributable to impaired loans totaled $5.2 million at September 30, 2021 and $9.0 million at December 31, 2020. At September 30, 2021 and December 31, 2020, impaired loans for which there was no related allowance for credit losses totaled $40.3 million and $43.7 million, respectively. The average balance of impaired loans for the nine months ended September 30, 2021 and the twelve months ended December 31, 2020 was $75.0 million and $66.8 million, respectively.

Management utilizes an internal nine-point risk rating system to summarize its loan portfolio into categories with similar risk characteristics. Loans deemed to be “acceptable quality” are rated 1 through 4, with a rating of 1 established for loans with minimal

risk. Loans that are deemed to be of “questionable quality” are rated 5 (watch) or 6 (special mention). Loans with adverse classifications (substandard, doubtful or loss) are rated 7, 8 or 9, respectively. Commercial mortgage, commercial, multi-family and construction loans are rated individually, and each lending officer is responsible for risk rating loans in their portfolio. These risk ratings are then reviewed by the department manager and/or the Chief Lending Officer and by the Credit Department. The risk ratings are also confirmed through periodic loan review examinations which are currently performed by an independent third-party. Reports by the independent third-party are presented directly to the Audit Committee of the Board of Directors.

The Company participated in the Paycheck Protection Program (“PPP”) through the United States Department of the Treasury and Small Business Administration ("SBA"). As of September 30, 2021, the Company secured 2,066 PPP loans for its customers totaling $681.9 million, which includes both the initial round and the second round of PPP. As of September 30, 2021, 1,521 PPP loans totaling $508.1 million were forgiven. The balance at September 30, 2021 for PPP loans was $173.8 million. The PPP loans are fully guaranteed by the SBA and may be eligible for forgiveness by the SBA to the extent that the proceeds are used to cover eligible payroll costs, interest costs, rent, and utility costs over a period of up to 24 weeks after the loan was made as long as certain conditions are met regarding employee retention and compensation levels. PPP loans deemed eligible for forgiveness by the SBA will be repaid by the SBA to the Company. PPP loans are included in the commercial loan portfolio.

The following table summarizes the Company's gross loans held for investment by year of origination and internally assigned credit grades as of September 30, 2021 and December 31, 2020 (in thousands):

	Gross Loans Held by Investment by Year of Origination at September 30, 2021
	2021		2020	2019	2018	2017	Prior to 2017	Revolving Loans	Revolving loans to term loans	Total Loans
Residential
Special mention	$	—	—	—	—	1,211	589	—	—	1,800
Substandard	—		—	—	280	483	10,131	—	—	10,894
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	—	280	1,694	10,720	—	—	12,694
Pass/Watch	199,446		246,325	121,486	70,897	77,692	501,478	—	—	1,217,324
Total residential	$	199,446	246,325	121,486	71,177	79,386	512,198	—	—	1,230,018
Commercial Mortgage
Special mention	$	—	1,797	30,621	28,757	23,089	42,003	1,094	—	127,361
Substandard	—		—	21	27,507	8,234	54,097	926	—	90,785
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		1,797	30,642	56,264	31,323	96,100	2,019	—	218,145
Pass/Watch	444,371		596,262	597,957	327,684	424,605	979,094	90,511	26,055	3,486,539
Total commercial mortgage	$	444,371	598,059	628,599	383,948	455,928	1,075,194	92,530	26,055	3,704,684
Multi-family
Special mention	$	—	—	673	—	3,072	279	—	—	4,024
Substandard	—		439	1,156	—	—	1,422	—	—	3,017
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		439	1,829	—	3,072	1,701	—	—	7,041
Pass/Watch	74,438		303,340	175,132	192,255	138,762	484,289	2,894	1,622	1,372,732
Total multi-family	$	74,438	303,779	176,961	192,255	141,834	485,990	2,894	1,622	1,379,773

	Gross Loans Held by Investment by Year of Origination at September 30, 2021
	2021		2020	2019	2018	2017	Prior to 2017	Revolving Loans	Revolving loans to term loans	Total Loans
Construction
Special mention	$	—	1,975	17,622	—	7,300	—	—	—	26,897
Substandard	—		—	—	2,967	—	—	—	—	2,967
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		1,975	17,622	2,967	7,300	—	—	—	29,864
Pass/Watch	114,736		156,051	252,329	124,346	2,110	418	—	5,938	655,928
Total construction	$	114,736	158,026	269,951	127,313	9,410	418	—	5,938	685,792
Total Mortgage
Special mention	$	—	3,772	48,916	28,757	34,672	42,871	1,094	—	160,082
Substandard	—		439	1,177	30,754	8,717	65,650	926	—	107,663
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		4,211	50,093	59,511	43,389	108,521	2,019	—	267,744
Pass/Watch	832,991		1,301,978	1,146,904	715,182	643,169	1,965,279	93,405	33,615	6,732,523
Total Mortgage	$	832,991	1,306,189	1,196,997	774,693	686,558	2,073,800	95,424	33,615	7,000,267
Commercial
Special mention	$	1,980	2,818	3,839	3,331	21,391	41,325	3,210	3,465	81,359
Substandard	—		89	7,024	5,956	16,050	67,708	20,403	2,534	119,764
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	1,980		2,907	10,863	9,287	37,441	109,033	23,613	5,999	201,122
Pass/Watch	397,519		228,692	182,346	170,359	147,442	514,271	350,255	42,013	2,032,897
Total commercial	$	399,499	231,599	193,209	179,646	184,883	623,304	373,868	48,011	2,234,020
Consumer (1)
Special mention	$	—	—	—	—	—	—	—	—	—
Substandard	—		—	17	119	80	1,117	7	63	1,403
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		—	17	119	80	1,117	7	63	1,403
Pass/Watch	19,260		5,721	26,796	22,511	16,842	106,577	117,533	17,098	332,339
Total consumer	$	19,260	5,721	26,813	22,630	16,922	107,694	117,540	17,162	333,741
Total Loans
Special mention	$	1,980	6,590	52,755	32,088	56,063	84,196	4,304	3,465	241,440
Substandard	—		528	8,218	36,829	24,847	134,475	21,335	2,597	228,829
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—

	Gross Loans Held by Investment by Year of Origination at September 30, 2021
	2021		2020	2019	2018	2017	Prior to 2017	Revolving Loans	Revolving loans to term loans	Total Loans
Total criticized and classified	1,980		7,118	60,973	68,917	80,910	218,671	25,639	6,062	470,270
Pass/Watch	1,249,770		1,536,391	1,356,046	908,052	807,453	2,586,127	561,193	92,727	9,097,759
Total gross loans	$	1,251,750	1,543,509	1,417,019	976,969	888,363	2,804,798	586,832	98,788	9,568,028

(1) For consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.

	Gross Loans Held by Investment by Year of Origination at December 31, 2020
	2021		2020	2019	2018	2017	Prior to 2017	Revolving Loans	Revolving loans to term loans	Total Loans
Residential
Special mention	$	—	—	—	—	123	2,759	—	—	2,882
Substandard	164		3,375	1,669	2,221	2,184	17,039	—	—	26,652
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	164		3,375	1,669	2,221	2,307	19,798	—	—	29,534
Pass/Watch	271,858		152,117	93,588	101,943	119,563	526,099	—	—	1,265,168
Total residential	$	272,022	155,492	95,257	104,164	121,870	545,897	—	—	1,294,702
Commercial Mortgage
Special mention	$	—	29,268	33,446	22,838	3,041	34,992	—	1,045	124,630
Substandard	—		1,905	3,687	21,095	10,185	61,441	—	—	98,313
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		31,173	37,133	43,933	13,226	96,433	—	1,045	222,943
Pass/Watch	596,364		600,904	395,280	432,590	302,034	809,779	68,650	30,122	3,235,723
Total commercial mortgage	$	596,364	632,077	432,413	476,523	315,260	906,212	68,650	31,167	3,458,666
Multi-family
Special mention	$	—	682	19,837	3,117	5,558	300	—	288	29,782
Substandard	—		—	—	—	—	1,568	—	—	1,568
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		682	19,837	3,117	5,558	1,868	—	288	31,350
Pass/Watch	291,995		180,271	187,880	169,310	131,297	486,649	3,418	2,346	1,453,165
Total multi-family	$	291,995	180,953	207,717	172,427	136,855	488,517	3,418	2,633	1,484,515
Construction
Special mention	$	1,991	14,508	7,877	—	—	—	—	—	24,376
Substandard	—		—	4,309	615	—	—	—	—	4,924

	Gross Loans Held by Investment by Year of Origination at December 31, 2020
	2021		2020	2019	2018	2017	Prior to 2017	Revolving Loans	Revolving loans to term loans	Total Loans
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	1,991		14,508	12,186	615	—	—	—	—	29,300
Pass/Watch	88,777		236,021	138,190	43,224	1,568	512	—	4,347	512,639
Total construction	$	90,768	250,529	150,376	43,839	1,568	512	—	4,347	541,939
Total Mortgage
Special mention	$	1,991	44,458	61,160	25,955	8,722	38,051	—	1,333	181,670
Substandard	164		5,280	9,665	23,931	12,369	80,048	—	—	131,457
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	2,155		49,738	70,825	49,886	21,091	118,099	—	1,333	313,127
Pass/Watch	1,248,994		1,169,313	814,938	747,067	554,462	1,823,039	72,067	36,815	6,466,695
Total Mortgage	$	1,251,149	1,219,051	885,763	796,953	575,553	1,941,138	72,067	38,148	6,779,822
Commercial
Special mention	$	—	6,295	6,038	27,251	9,779	81,355	22,745	3,617	157,080
Substandard	—		7,324	2,527	16,139	40,512	41,831	16,738	2,018	127,090
Doubtful	—		—	—	—	—	—	52	—	52
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	—		13,619	8,565	43,390	50,291	123,186	39,536	5,635	284,222
Pass/Watch	695,125		207,400	205,892	179,068	141,925	415,729	397,408	40,700	2,283,247
Total commercial	$	695,125	221,019	214,457	222,458	192,216	538,915	436,944	46,335	2,567,470
Consumer (1)
Special mention	$	—	3	—	70	28	299	1,304	163	1,867
Substandard	25		49	14	—	2,912	1,230	1,236	1,278	6,744
Doubtful	—		—	—	—	—	—	—	—	—
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	25		52	14	70	2,940	1,529	2,540	1,441	8,611
Pass/Watch	12,746		50,605	54,962	45,698	25,539	143,685	135,839	14,881	483,955
Total consumer	$	12,771	50,657	54,976	45,768	28,479	145,214	138,378	16,323	492,566
Total Loans
Special mention	$	1,991	50,756	67,198	53,276	18,529	119,705	24,049	5,113	340,617
Substandard	189		12,653	12,206	40,070	55,793	123,109	17,975	3,296	265,291
Doubtful	—		—	—	—	—	—	52	—	52
Loss	—		—	—	—	—	—	—	—	—
Total criticized and classified	2,180		63,409	79,404	93,346	74,322	242,814	42,076	8,410	605,960

	Gross Loans Held by Investment by Year of Origination at December 31, 2020
	2021		2020	2019	2018	2017	Prior to 2017	Revolving Loans	Revolving loans to term loans	Total Loans
Pass/Watch	1,956,865		1,427,318	1,075,792	971,833	721,926	2,382,453	605,314	92,396	9,233,898
Total gross loans	$	1,959,045	1,490,727	1,155,196	1,065,179	796,248	2,625,267	647,390	100,806	9,839,858

(1) For consumer loans, the Company assigns internal credit grades based on the delinquency status of each loan.