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ALLOWANCE FOR LOAN LOSSES

12 Months Ended

Dec. 31, 2017

5. ALLOWANCE FOR LOAN LOSSES

The allowance for loan losses is established and maintained through a provision for loan losses based on probable incurred losses in the Bank’s loan portfolio. Management evaluates the adequacy of the allowance quarterly. The allowance is comprised of both individual valuation allowances and loan pool valuation allowances.

The following tables represent the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment, as defined under FASB ASC 310-10, and based on impairment method as of December 31, 2017 and 2016. The tables include loans acquired from CNB and FNBNY.

	December 31, 2017
*(In thousands)*	Commercial Real Estate Mortgage Loans		Multi-family Loans		Residential Real Estate Mortgage Loans		Commercial, Industrial and Agricultural Loans		Real Estate Construction and Land Loans		Installment/ Consumer Loans		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	1,708	$	—	$	—	$	1,708
Collectively evaluated for impairment		11,048		4,521		2,438		11,130		740		122		29,999
Loans acquired with deteriorated credit quality		—		—		—		—		—		—		—
Total allowance for loan losses	$	11,048	$	4,521	$	2,438	$	12,838	$	740	$	122	$	31,707

Loans:
Individually evaluated for impairment	$	11,162	$	—	$	100	$	11,230	$	—	$	—	$	22,492
Collectively evaluated for impairment		1,281,837		593,645		463,575		604,329		107,759		21,041		3,072,186
Loans acquired with deteriorated credit quality		907		1,635		589		444		—		—		3,575
Total loans	$	1,293,906	$	595,280	$	464,264	$	616,003	$	107,759	$	21,041	$	3,098,253

	December 31, 2016
*(In thousands)*	Commercial Real Estate Mortgage Loans		Multi-family Loans		Residential Real Estate Mortgage Loans		Commercial, Industrial and Agricultural Loans		Real Estate Construction and Land Loans		Installment/ Consumer Loans		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	1	$	—	$	—	$	1
Collectively evaluated for impairment		9,225		6,264		1,495		7,836		955		128		25,903
Loans acquired with deteriorated credit quality		—		—		—		—		—		—		—
Total allowance for loan losses	$	9,225	$	6,264	$	1,495	$	7,837	$	955	$	128	$	25,904

Loans:
Individually evaluated for impairment	$	1,539	$	—	$	784	$	1,030	$	—	$	—	$	3,353
Collectively evaluated for impairment		1,088,332		514,853		363,230		519,686		80,605		16,368		2,583,074
Loans acquired with deteriorated credit quality		1,881		3,293		870		3,734		—		—		9,778
Total loans	$	1,091,752	$	518,146	$	364,884	$	524,450	$	80,605	$	16,368	$	2,596,205

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality.

The following tables represent the changes in the allowance for loan losses for the years ended December 31, 2017, 2016 and 2015, by portfolio segment, as defined under FASB ASC 310-10. The portfolio segments represent the categories that the Bank uses to determine its allowance for loan losses.

	Year Ended December 31, 2017
*(In thousands)*	Commercial Real Estate Mortgage Loans		Multi-family Loans			Residential Real Estate Mortgage Loans		Commercial, Industrial and Agricultural Loans			Real Estate Construction and Land Loans			Installment/ Consumer Loans			Total
Allowance for loan losses:
Beginning balance	$	9,225	$	6,264		$	1,495	$	7,837		$	955		$	128		$	25,904
Charge-offs		—		—			—		(8,245	)		—			(49	)		(8,294	)
Recoveries		—		—			28		16			—			3			47
Provision		1,823		(1,743	)		915		13,230			(215	)		40			14,050
Ending balance	$	11,048	$	4,521		$	2,438	$	12,838		$	740		$	122		$	31,707

	Year Ended December 31, 2016
(In thousands)	Commercial Real Estate Mortgage Loans		Multi-family Loans		Residential Real Estate Mortgage Loans			Commercial, Industrial and Agricultural Loans			Real Estate Construction and Land Loans			Installment/ Consumer Loans			Total
Allowance for loan losses:
Beginning balance	$	7,850	$	4,208	$	2,115		$	5,405		$	1,030		$	136		$	20,744
Charge-offs		—		—		(56	)		(930	)		—			(1	)		(987	)
Recoveries		109		—		96			386			—			6			597
Provision		1,266		2,056		(660	)		2,976			(75	)		(13	)		5,550
Ending balance	$	9,225	$	6,264	$	1,495		$	7,837		$	955		$	128		$	25,904

	Year Ended December 31, 2015
(In thousands)	Commercial Real Estate Mortgage Loans			Multi-family Loans		Residential Real Estate Mortgage Loans			Commercial, Industrial and Agricultural Loans			Real Estate Construction and Land Loans			Installment/ Consumer Loans			Total
Allowance for loan losses:
Beginning balance	$	6,994		$	2,670	$	2,208		$	4,526		$	1,104		$	135		$	17,637
Charge-offs		(50	)		—		(249	)		(827	)		—			(2	)		(1,128	)
Recoveries		—			—		79			149			—			7			235
Provision		906			1,538		77			1,557			(74	)		(4	)		4,000
Ending balance	$	7,850		$	4,208	$	2,115		$	5,405		$	1,030		$	136		$	20,744