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LOANS

12 Months Ended

Dec. 31, 2020

4. LOANS

The following table sets forth the major classifications of loans:



(In thousands)	December 31, 2020		December 31, 2019
Commercial real estate mortgage loans:
Owner occupied	$	557,076	$	531,088
Non-owner occupied		1,081,443		1,034,599
Multi-family mortgage loans		899,730		812,174
Residential real estate mortgage loans		434,689		493,144
Commercial, industrial and agricultural loans		1,527,147		679,444
Real estate construction and land loans		82,479		97,311
Installment/consumer loans		23,019		24,836
Total loans		4,605,583		3,672,596
Net deferred loan (fees) costs		(8,180)		7,689
Total loans held for investment		4,597,403		3,680,285
Allowance for credit losses		(44,200)		(32,786)
Loans, net	$	4,553,203	$	3,647,499

Included in commercial, industrial and agricultural loans at December 31, 2020 was $844.7 million of Paycheck Protection Program (“PPP”) loans. These loans are expected to be fully guaranteed by the SBA and have a nominal allowance for credit losses allocated to them based on the nature of the guarantee. The shift from net deferred loan costs at December 31, 2019 to net deferred loan fees at December 31, 2020 was the result of the net deferred loan fees associated with the PPP loans.

Accrued interest receivable on loans totaling $15.1 million at December 31, 2020 and $8.7 million at December 31, 2019 was included in accrued interest receivable in the consolidated balance sheet and excluded from the table above. The increase in accrued interest receivable from December 31, 2019 relates primarily to accrued interest on PPP loans.

Loans held for sale, which are not included in the table above, totaled $52.8 million at December 31, 2020 and $12.6 million at December 31, 2019. In December 2020, the Company made a decision to dispose of its $43.0 million leveraged lending portfolio which was previously included in commercial, industrial and agricultural loans. As of December 31, 2020, the leveraged lending portfolio was reclassified from loans held for investment to loans held for sale and written down by $234 thousand to the estimated fair value of the loans in this portfolio of $42.8 million through a valuation allowance which was charged against non-interest income in the consolidated statements of income. As of December 31, 2020 and 2019, one commercial real estate (“CRE”) mortgage loan totaling $10.0 million and $12.6 million, respectively, was classified as held for sale. The loan was reclassified from loans held for investment to loans held for sale and written down from $16.3 million to the loan’s estimated fair value of $12.6 million as of June 30, 2019, through a $3.7 million charge-off during the 2019 second quarter. During the 2020 second quarter, an additional write-down was recognized for the decrease in the estimated fair value of the loan by $2.6 million to $10.0 million through a valuation allowance which was charged against non-interest income in the consolidated statements of income.

Lending Risk

The principal business of the Bank is lending in CRE mortgage loans, multi-family mortgage loans, residential real estate mortgage loans, construction loans, home equity loans, commercial, industrial and agricultural loans, land loans and consumer loans. The Bank considers its primary lending area to be Nassau and Suffolk Counties located on Long Island and the New York City boroughs. A substantial portion of the Bank’s loans is secured by real estate in these areas. Accordingly, the ultimate collectability of the loan portfolio is susceptible to changes in market and economic conditions in this region.

Commercial Real Estate Mortgages

Loans in this classification include income producing investment properties and owner-occupied real estate used for business purposes. The underlying properties are located largely in the Bank’s primary market area. The cash flows of the income producing investment properties are adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, will have an effect on credit quality. Generally, management seeks to obtain annual financial

information for borrowers with loans in excess of $1.0 million in this category. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending will have an adverse effect on credit quality.

Multi-Family Mortgages

Loans in this classification include income producing residential investment properties of five or more families. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property with a loan to value ratio generally not exceeding 75%. Repayment is derived generally from the rental income generated from the property and may be supplemented by the owners’ personal cash flow. Credit risk arises with an increase in vacancy rates, property mismanagement and the predominance of non-recourse loans that are customary in the industry.

Residential Real Estate Mortgages and Home Equity Loans

Loans in these classifications are generally secured by owner-occupied residential real estate and repayment is dependent on the credit quality of the individual borrower. The overall health of the economy, including unemployment rates and housing prices, can have an effect on the credit quality in this loan class. The Bank generally does not originate loans with a loan-to-value ratio greater than 80% and does not grant subprime loans.

Commercial, Industrial and Agricultural Loans

Loans in this classification are made to businesses and include term loans, lines of credit, senior secured loans to corporations, equipment financing and taxi medallion loans. Generally, these loans are secured by assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending, will have an effect on the credit quality in this loan class.

Real Estate Construction and Land Loans

Loans in this classification primarily include land loans to local individuals, contractors and developers for developing the land for sale or for the purpose of making improvements thereon. Repayment is derived primarily from sale of the lots/units including any pre-sold units. Credit risk is affected by market conditions, time to sell at an adequate price and cost overruns. To a lesser extent, this class includes commercial development projects that the Company finances, which in most cases require interest only during construction, and then convert to permanent financing. Construction delays, cost overruns, market conditions and the availability of permanent financing, to the extent such permanent financing is not being provided by the Bank, all affect the credit risk in this loan class.

Installment and Consumer Loans

Loans in this classification may be either secured or unsecured. Repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan, such as automobiles. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class.

Credit Quality Indicators

The Company categorizes loans into risk categories of pass, watch, special mention, substandard and doubtful based on relevant information about the ability of borrowers to service their debt including repayment patterns, past loss experience, current economic conditions, and various types of concentrations of credit. Assigned risk rating grades are continuously updated as new information is obtained. Loans risk rated special mention, substandard and doubtful are reviewed on a quarterly basis. The Company uses the following definitions for risk rating grades:

Pass: Loans classified as pass include current loans performing in accordance with contractual terms, pools of homogenous residential real estate and installment/consumer loans that are not individually risk rated and loans which do not exhibit certain risk factors that require greater than usual monitoring by management.

Watch: Loans classified as watch are considered pass rated loans. These loans carry additional risk factors above those of pass loans but do not have all the risk characteristics of loans classified as special mention. Such risk factors require monitoring and if left uncorrected, could lead these loans to be downgraded.

Special mention: Loans classified as special mention, while generally not delinquent, have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the Bank’s credit position at some future date.

Substandard: Loans classified as substandard have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. There is a distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in a substandard loan, may also be in delinquency status and have defined weaknesses based on currently existing facts, conditions and values making collection or liquidation in full highly questionable and improbable.

The following tables represent loans categorized by internally assigned risk grades as of December 31, 2020 and December 31, 2019. In the December 31, 2020 table, the years noted represent the year of origination for non-revolving loans.


	December 31, 2020
(In thousands)	2020		2019		2018		2017		2016		2015 and Prior		Revolving		Revolving-Term		Total
Commercial real estate owner occupied:
Pass	$	92,053	$	96,679	$	47,224	$	66,320	$	25,852	$	153,766	$	—	$	—	$	481,894
Watch		727		1,373		8,038		10,737		3,425		23,919		—		—		48,219
Special mention		1,843		—		3,875		10,857		823		4,600		—		—		21,998
Substandard		469		553		—		—		2,426		1,517		—		—		4,965
Total commercial real estate owner occupied		95,092		98,605		59,137		87,914		32,526		183,802		—		—		557,076

Commercial real estate non-owner occupied:
Pass		181,811		249,782		108,086		180,235		54,252		214,620		—		—		988,786
Watch		7,314		7,700		12,845		12,117		12,209		24,089		—		—		76,274
Special mention		—		—		—		—		—		290		—		—		290
Substandard		—		—		—		9,006		6,038		1,049		—		—		16,093
Total commercial real estate non-owner occupied		189,125		257,482		120,931		201,358		72,499		240,048		—		—		1,081,443

Multi-family:
Pass		159,301		293,752		40,840		86,169		118,846		106,044		—		—		804,952
Watch		15,436		2,724		—		19,331		35,976		12,825		—		—		86,292
Special mention		—		—		—		8,098		—		388		—		—		8,486
Substandard		—		—		—		—		—		—		—		—		—
Total multi-family		174,737		296,476		40,840		113,598		154,822		119,257		—		—		899,730

Residential real estate:
Pass		20,033		32,564		71,903		95,712		23,589		106,518		53,217		7,012		410,548
Watch		—		—		406		321		541		1,740		—		1,145		4,153
Special mention		—		1,103		758		—		—		6,879		818		633		10,191
Substandard		—		466		569		937		—		6,967		—		858		9,797
Total residential real estate		20,033		34,133		73,636		96,970		24,130		122,104		54,035		9,648		434,689

Commercial, industrial and agricultural:
Pass		949,257		62,410		30,736		17,646		12,685		26,606		304,781		5,086		1,409,207
Watch		8,062		6,140		8,265		1,574		1,188		3,048		40,448		1,527		70,252
Special mention		2,914		838		572		1,507		545		1,323		18,984		2,073		28,756
Substandard		—		905		1,233		3,514		470		9,660		200		2,950		18,932
Total commercial, industrial and agricultural		960,233		70,293		40,806		24,241		14,888		40,637		364,413		11,636		1,527,147

Real estate construction and land loans:
Pass		37,684		20,948		8,229		11,308		—		1,701		—		—		79,870
Watch		—		—		—		1,150		—		270		—		—		1,420
Special mention		—		—		1,078		—		—		—		—		—		1,078
Substandard		—		—		—		—		—		111		—		—		111
Total real estate construction and land loans		37,684		20,948		9,307		12,458		—		2,082		—		—		82,479

Installment/consumer loans
Pass		1,656		215		166		93		—		710		17,382		1,257		21,479
Watch		—		—		—		—		—		—		496		40		536
Special mention		—		—		—		—		—		—		—		46		46
Substandard		—		—		—		—		—		—		50		908		958
Total installment/consumer loans		1,656		215		166		93		—		710		17,928		2,251		23,019

Total Loans	$	1,478,560	$	778,152	$	344,823	$	536,632	$	298,865	$	708,640	$	436,376	$	23,535	$	4,605,583


	December 31, 2019
(In thousands)	Pass		Special Mention		Substandard		Doubtful		Total
Commercial real estate:
Owner occupied	$	511,444	$	18,426	$	1,218	$	—	$	531,088
Non-owner occupied		1,022,208		—		12,391		—		1,034,599
Multi-family		811,770		404		—		—		812,174
Residential real estate		475,949		12,400		4,795		—		493,144
Commercial, industrial and agricultural		643,413		15,670		20,361		—		679,444
Real estate construction and land loans		95,530		—		1,781		—		97,311
Installment/consumer loans		23,976		103		757		—		24,836
Total loans	$	3,584,290	$	47,003	$	41,303	$	—	$	3,672,596

Past Due and Non-accrual Loans

The following tables represent the aging of past due loans as of December 31, 2020 and 2019:

December 31, 2020

90+ Days

Non-accrual

30-59

60-89

Past Due

Including 90

Total Past

Days

And

Days or More

Due and

(In thousands)

Past Due

Accruing

Past Due

Non-accrual

Current

Total Loans

Commercial real estate:

Owner occupied

—

636

556,440

557,076

Non-owner occupied

—

6,771

1,074,672

1,081,443

Multi-family

—

899,730

Residential real estate

3,567

949

—

2,897

7,413

427,276

434,689

Commercial, industrial and agricultural

2,711

4,072

—

1,597

8,380

1,518,767

1,527,147

Real estate construction and land loans

210

—

111

321

82,158

82,479

Installment/consumer loans

100

—

150

254

22,765

23,019

Total loans

6,588

5,025

—

12,162

23,775

4,581,808

4,605,583

In the absence of other intervening factors, loans granted payment deferrals related to COVID-19 are not reported as past due or placed on non-accrual status provided the borrowers have met the criteria in the CARES Act or otherwise have met the criteria included in an interagency statement issued by bank regulatory agencies.

During the year ended December 31, 2020, there was $93 thousand in interest earned on non-accrual loans and $406 thousand in accrued interest on non-accrual loans was reversed through interest income.


	December 31, 2019
					90+ Days		Non-accrual
	30-59		60-89		Past Due		Including 90		Total Past
	Days		Days		And		Days or More		Due and
(In thousands)	Past Due		Past Due		Accruing		Past Due		Non-accrual		Current		Total Loans
Commercial real estate:
Owner occupied	$	917	$	433	$	—	$	225	$	1,575	$	529,513	$	531,088
Non-owner occupied		98		—		—		512		610		1,033,989		1,034,599
Multi-family		—		—		—		—		—		812,174		812,174
Residential real estate		3,053		747		343		2,743		6,886		486,258		493,144
Commercial, industrial and agricultural		273		721		—		736		1,730		677,714		679,444
Real estate construction and land loans		—		—		—		123		123		97,188		97,311
Installment/consumer loans		124		—		—		30		154		24,682		24,836
Total loans	$	4,465	$	1,901	$	343	$	4,369	$	11,078	$	3,661,518	$	3,672,596

There was no other real estate owned at December 31, 2020 and 2019.

Troubled Debt Restructurings

The terms of certain loans were modified and are considered TDRs. The modification of the terms of such loans generally includes one or a combination of the following: a reduction of the stated interest rate of the loan; an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; or a permanent reduction of the recorded investment in the loan. The modification of these loans involved loans to borrowers who were experiencing financial difficulties.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed to determine if that borrower is currently in payment default under any of its obligations or whether there is a probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification.

The following table presents loans modified as troubled debt restructurings during the years indicated:


	Modifications During the Year Ended December 31,
	2020					2019					2018
		Pre-		Post-			Pre-		Post-			Pre-		Post-
		Modification		Modification			Modification		Modification			Modification		Modification
		Outstanding		Outstanding			Outstanding		Outstanding			Outstanding		Outstanding
	Number of	Recorded		Recorded		Number of	Recorded		Recorded		Number of	Recorded		Recorded
(Dollars in thousands)	Loans	Investment		Investment		Loans	Investment		Investment		Loans	Investment		Investment
Commercial real estate:
Owner occupied	—	$	—	$	—	3	$	8,582	$	8,582	—	$	—	$	—
Non-owner occupied	—		—		—	—		—		—	1		926		926
Residential real estate	—		—		—	1		338		338	1		644		644
Commercial, industrial and agricultural	3		1,138		1,138	15		12,828		12,828	10		7,649		7,649
Installment/consumer loans	—		—		—	—		—		—	—		—		—
Total	3	$	1,138	$	1,138	19	$	21,748	$	21,748	12	$	9,219	$	9,219

There were $1.7 million, $0.1 million and $0.4 million of charge-offs related to TDRs during the years ended December 31, 2020, 2019 and 2018, respectively. During the year ended December 31, 2020 there was one loan modified as a TDR for which there was a payment default within twelve months following the modification. There were two loans modified as TDRs during 2019 and one loan modified as a TDR during 2018 for which there was a payment default within twelve months following the modification. A loan is considered to be in payment default once it is 30 days contractually past due under the modified terms.

At December 31, 2020 and 2019, the Company had $346 thousand and $405 thousand, respectively, of non-accrual TDRs and $22.2 million and $26.3 million, respectively, of performing TDRs. The decrease in performing TDRs is primarily due to one TDR relationship which became non-accrual during the 2020 second quarter and totaled $2.7 million at June 30, 2020. In the 2020 third quarter, a settlement agreement was entered into resulting in $1.4 million in payments and a charge-off totaling $1.3 million. At December 31, 2020, three non-accrual TDRs totaling $130 thousand were unsecured and one non-accrual TDR totaling $216 thousand was secured and at December 31, 2019, the non-accrual TDRs were unsecured. The Bank has no commitment to lend additional funds to these debtors.

The terms of certain other loans were modified during the year ended December 31, 2020 that did not meet the definition of a TDR. These loans have a total recorded investment at December 31, 2020 of $191.1 million. These loans were to borrowers who were not experiencing financial difficulties.

In connection with the COVID-19 relief provided by the CARES Act and interagency guidance issued in March 2020, the Company is supporting its customers who may experience financial difficulty due to COVID-19 through loan moratoriums and forbearance programs. The Company began offering 90-day payment modifications on a case-by-case basis to those customers whose income was adversely impacted by COVID-19. The loan modifications in this program primarily consist of three-month deferrals of interest and principal payments. Extensions may be granted on a case by case basis. As of December 31, 2020, approximately 500 loans totaling $635 million were granted payment moratoriums during 2020. These deferrals are not considered TDRs based on the CARES Act and/or the interagency guidance. As of January 21, 2021, $76.1 million in moratoriums were outstanding.

Collateral Dependent Loans

At December 31, 2020, the Company had collateral dependent loans which were individually evaluated to determine expected credit losses. Collateral dependent commercial, industrial and agricultural loans totaled $9.6 million and had a related allowance for credit losses totaling $6.7 million. The loans were secured by taxi medallions. Collateral dependent commercial real estate loans totaled $10.8 million and had no related allowance for credit losses.

Impaired Loans (prior to the adoption of the CECL Standard)

At December 31, 2019 the Company had individually impaired loans as defined by FASB ASC 310, “Receivables” of $27.0 million. For a loan to be considered impaired, management determines after review whether it is probable that the Bank will not be able to collect all amounts due according to the contractual terms of the loan agreement. Management applies its normal loan review procedures in making these judgments. Impaired loans include individually classified non-

accrual loans and TDRs. At December 31, 2019 impaired loans included $1.1 million in other impaired performing loans related to borrowers with other performing TDRs. For impaired loans, the Bank evaluates the impairment of the loan in accordance with FASB ASC 310-10-35-22. Impairment is determined based on the present value of expected future cash flows discounted at the loan’s effective interest rate. For loans that are collateral dependent, the fair value of the collateral is used to determine the fair value of the loan. The fair value of the collateral is determined based on recent appraised values. The fair value of the collateral or present value of expected cash flows is compared to the carrying value to determine if any write-down or specific loan loss allowance allocation is required.

The following tables set forth the recorded investment, unpaid principal balance and related allowance for individually impaired loans at December 31, 2019 and 2018. The tables also set forth the average recorded investment of individually impaired loans and interest income recognized while the loans were impaired during the years ended December 31, 2019 and 2018:


	December 31, 2019						Year Ended December 31, 2019
			Unpaid		Related		Average		Interest
	Recorded		Principal		Allocated		Recorded		Income
(In thousands)	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	3,379	$	3,401	$	—	$	1,286	$	41
Non-owner occupied		2,296		2,296		—		2,149		99
Residential real estate:
Residential mortgages		—		—		—		—		—
Home equity		294		300		—		74		—
Commercial, industrial and agricultural:
Secured		494		494		—		287		18
Unsecured		8,863		8,863		—		6,601		411
Total with no related allowance recorded		15,326		15,354		—		10,397		569

With an allowance recorded:
Commercial real estate:
Owner occupied		—		—		—		—		—
Non-owner occupied		—		—		—		—		—
Residential real estate:
Residential mortgages		—		—		—		—		—
Home equity		—		—		—		—		—
Commercial, industrial and agricultural:
Secured		9,612		9,612		3,435		6,189		223
Unsecured		2,045		2,051		1,241		1,838		86
Total with an allowance recorded		11,657		11,663		4,676		8,027		309

Total:
Commercial real estate:
Owner occupied		3,379		3,401		—		1,286		41
Non-owner occupied		2,296		2,296		—		2,149		99
Residential real estate:
Residential mortgages		—		—		—		—		—
Home equity		294		300		—		74		—
Commercial, industrial and agricultural:
Secured		10,106		10,106		3,435		6,476		241
Unsecured		10,908		10,914		1,241		8,439		497
Total	$	26,983	$	27,017	$	4,676	$	18,424	$	878


	December 31, 2018						Year Ended December 31, 2018
			Unpaid		Related		Average		Interest
	Recorded		Principal		Allocated		Recorded		Income
(In thousands)	Investment		Balance		Allowance		Investment		Recognized
With no related allowance recorded:
Commercial real estate:
Owner occupied	$	268	$	278	$	—	$	177	$	—
Non-owner occupied		2,816		2,816		—		1,583		88
Residential real estate:
Residential mortgages		—		—		—		—		—
Home equity		—		—		—		—		—
Commercial, industrial and agricultural:
Secured		8,234		8,234		—		5,644		196
Unsecured		5,316		5,316		—		5,127		284
Total with no related allowance recorded		16,634		16,644		—		12,531		568

With an allowance recorded:
Commercial real estate:
Owner occupied		—		—		—		—		—
Non-owner occupied		—		—		—		—		—
Residential real estate:
Residential mortgages		—		—		—		—		—
Home equity		—		—		—		—		—
Commercial, industrial and agricultural:
Secured		2,721		2,721		189		2,757		91
Unsecured		—		—		—		—		—
Total with an allowance recorded		2,721		2,721		189		2,757		91

Total:
Commercial real estate:
Owner occupied		268		278		—		177		—
Non-owner occupied		2,816		2,816		—		1,583		88
Residential real estate:
Residential mortgages		—		—		—		—		—
Home equity		—		—		—		—		—
Commercial, industrial and agricultural:
Secured		10,955		10,955		189		8,401		287
Unsecured		5,316		5,316		—		5,127		284
Total	$	19,355	$	19,365	$	189	$	15,288	$	659

The recorded investment in loans excludes accrued interest receivable and loan origination fees, net due to immateriality. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs.

Related Party Loans

Certain directors, executive officers, and their related parties, including their immediate families and companies in which they are principal owners, were loan customers of the Bank during 2020 and 2019.

The following table sets forth selected information about related party loans for the year ended December 31, 2020:


	Year Ended
	December 31,
(In thousands)	2020
Balance at beginning of period	$	12,349
New loans		724
Repayments		(1,575)
Balance at end of period	$	11,498

The following tables represent the changes in the allowance for credit losses for the years ended December 31, 2020, 2019 and 2018:

Year Ended December 31, 2020

Residential

Commercial,

Real Estate

Commercial

Real Estate

Industrial and

Construction

Installment/

Real Estate

Multi-family

Mortgage

Agricultural

and Land

Consumer

(In thousands)

Mortgage Loans

Loans

Total

Allowance for credit losses:

Beginning balance, prior to adoption of CECL

12,150

4,829

1,882

12,583

1,066

276

32,786

Impact of adopting CECL

(7,712)

(3,589)

2,182

8,699

1,274

771

1,625

Charge-offs

(1)

—

(2,004)

—

(7)

(2,012)

Recoveries

—

298

—

301

Provision (credit) for credit losses

4,097

496

(1,005)

7,787

(165)

290

11,500

Ending balance

8,534

1,736

3,062

27,363

2,175

1,330

44,200


	Year Ended December 31, 2019
					Residential		Commercial,		Real Estate
	Commercial				Real Estate		Industrial and		Construction		Installment/
	Real Estate		Multi-family		Mortgage		Agricultural		and Land		Consumer
(In thousands)	Mortgage Loans		Loans		Loans		Loans		Loans		Loans		Total
Allowance for credit losses:
Beginning balance	$	10,792	$	2,566	$	3,935	$	12,722	$	1,297	$	106	$	31,418
Charge-offs		(3,670)		—		—		(799)		—		(13)		(4,482)
Recoveries		1		—		112		25		—		12		150
Provision (credit) for credit losses		5,027		2,263		(2,165)		635		(231)		171		5,700
Ending balance	$	12,150	$	4,829	$	1,882	$	12,583	$	1,066	$	276	$	32,786


	Year Ended December 31, 2018
					Residential		Commercial,		Real Estate
	Commercial				Real Estate		Industrial and		Construction		Installment/
	Real Estate		Multi-family		Mortgage		Agricultural		and Land		Consumer
(In thousands)	Mortgage Loans		Loans		Loans		Loans		Loans		Loans		Total
Allowance for credit losses:
Beginning balance	$	11,048	$	4,521	$	2,438	$	12,838	$	740	$	122	$	31,707
Charge-offs		—		—		(24)		(2,806)		—		(11)		(2,841)
Recoveries		—		—		3		747		—		2		752
(Credit) provision for credit losses		(256)		(1,955)		1,518		1,943		557		(7)		1,800
Ending balance	$	10,792	$	2,566	$	3,935	$	12,722	$	1,297	$	106	$	31,418

The increase in allowance for credit losses in the first half of 2020 was primarily related to the reasonable and supportable forecast component of the newly adopted CECL Standard which includes the impact of the COVID-19 pandemic. The COVID-19 pandemic continues to have a profound impact on economic activity. While there have been some signs of economic improvement during the latter half of 2020, significant uncertainty remains. Management still believes that the economic recovery will continue during 2021 and 2022, however, based on the aforementioned uncertainty and negative impact the virus has had to date, the decision was made to maintain the current risk level for the reasonable and supportable forecast component of the allowance for credit losses as of December 31, 2020.

The following table represents the balance in the allowance for loan losses and the recorded investment in loans, as defined under FASB ASC 310-10 (prior to adoption of the CECL Standard), and based on impairment method as of December 31, 2019:


	December 31, 2019
					Residential		Commercial,		Real Estate
	Commercial				Real Estate		Industrial and		Construction		Installment/
	Real Estate		Multi-family		Mortgage		Agricultural		and Land		Consumer
(In thousands)	Mortgage Loans		Loans		Loans		Loans		Loans		Loans		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	4,676	$	—	$	—	$	4,676
Collectively evaluated for impairment		12,150		4,829		1,882		7,907		1,066		276		28,110
Loans acquired with deteriorated credit quality		—		—		—		—		—		—		—
Total allowance for loan losses	$	12,150	$	4,829	$	1,882	$	12,583	$	1,066	$	276	$	32,786

Loans:
Individually evaluated for impairment	$	5,675	$	—	$	294	$	21,014	$	—	$	—	$	26,983
Collectively evaluated for impairment		1,560,012		812,174		492,507		658,430		97,311		24,836		3,645,270
Loans acquired with deteriorated credit quality		—		—		343		—		—		—		343
Total loans	$	1,565,687	$	812,174	$	493,144	$	679,444	$	97,311	$	24,836	$	3,672,596

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