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LOANS | 12 Months Ended
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Dec. 31, 2017
Receivables [Abstract] |
LOANS | 3. LOANS The following table presents loans outstanding, by type of loan, as of December 31:
|  |  |  |  | % of Total |  |  |  |  |  | % of Total |
(Dollars in thousands) |  | 2017 |  |  | Loans |  |  | 2016 |  |  | Loans |
Residential mortgage |  | $ | 576,356 |  |  |  | 15.56 | % |  | $ | 527,370 |  |  |  | 15.92 | %
Multifamily mortgage |  |  | 1,388,958 |  |  |  | 37.49 |  |  |  | 1,459,594 |  |  |  | 44.07 |
Commercial mortgage |  |  | 626,656 |  |  |  | 16.92 |  |  |  | 551,233 |  |  |  | 16.65 |
Commercial loans |  |  | 958,294 |  |  |  | 25.87 |  |  |  | 636,714 |  |  |  | 19.23 |
Construction loans |  |  | — |  |  |  | — |  |  |  | 1,405 |  |  |  | 0.04 |
Home equity lines of credit |  |  | 67,497 |  |  |  | 1.82 |  |  |  | 65,682 |  |  |  | 1.98 |
Consumer loans, including |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
fixed rate home equity loans |  |  | 86,277 |  |  |  | 2.33 |  |  |  | 69,654 |  |  |  | 2.10 |
Other loans |  |  | 402 |  |  |  | 0.01 |  |  |  | 492 |  |  |  | 0.01 |
Total loans |  | $ | 3,704,440 |  |  |  | 100.00 | % |  | $ | 3,312,144 |  |  |  | 100.00 | %
In determining an appropriate amount for the allowance, the Bank segments and evaluates the loan portfolio based on Federal call report codes. The following portfolio classes have been identified as of December 31:
|  |  |  |  | % of Total |  |  |  |  |  | % of Total |
(Dollars in thousands) |  | 2017 |  |  | Loans |  |  | 2016 |  |  | Loans |
Primary residential mortgage |  | $ | 605,569 |  |  |  | 16.35 | % |  | $ | 557,970 |  |  |  | 16.86 | %
Home equity lines of credit |  |  | 67,497 |  |  |  | 1.82 |  |  |  | 65,683 |  |  |  | 1.98 |
Junior lien loan on residence |  |  | 7,073 |  |  |  | 0.19 |  |  |  | 9,206 |  |  |  | 0.28 |
Multifamily property |  |  | 1,388,958 |  |  |  | 37.51 |  |  |  | 1,459,594 |  |  |  | 44.09 |
Owner-occupied commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 253,492 |  |  |  | 6.85 |  |  |  | 176,123 |  |  |  | 5.32 |
Investment commercial real estate |  |  | 874,098 |  |  |  | 23.61 |  |  |  | 752,258 |  |  |  | 22.73 |
Commercial and industrial |  |  | 316,294 |  |  |  | 8.54 |  |  |  | 213,983 |  |  |  | 6.47 |
Lease financing |  |  | 90,052 |  |  |  | 2.43 |  |  |  | — |  |  |  | — |
Farmland/Agricultural production |  |  | 160 |  |  |  | 0.01 |  |  |  | 169 |  |  |  | 0.01 |
Commercial construction |  |  | 92 |  |  |  | 0.01 |  |  |  | 1,497 |  |  |  | 0.04 |
Consumer and other |  |  | 99,247 |  |  |  | 2.68 |  |  |  | 73,621 |  |  |  | 2.22 |
Total loans |  | $ | 3,702,532 |  |  |  | 100.00 | % |  | $ | 3,310,104 |  |  |  | 100.00 | %
Net deferred costs |  |  | 1,908 |  |  |  |  |  |  |  | 2,040 |  |  |  |  |
Total loans including |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
net deferred costs |  | $ | 3,704,440 |  |  |  |  |  |  | $ | 3,312,144 |  |  |  |  |
Loans are transferred from the loan portfolio to held for sale when the Company no longer has the intent to hold the loans for the foreseeable future. The Company sold approximately $109 million in residential and multifamily whole loans during 2017. Gain on sale of whole loans sold in 2017 totaled approximately $412 thousand. In 2016, the Company sold $234 million in multifamily loans. The loans sold in 2016 include both whole loan sales and loan participations. Gain on sale of whole loans sold in 2016 totaled approximately $1.2 million and none of the loans were sold at a loss. During 2016, the Company transferred $30.1 million of loans from held for sale back to the loan portfolio. These loans were transferred at lower of cost or fair value. No loss was recognized on the transfer. The Company, through the Bank, may extend credit to officers, directors or their associates. These loans are subject to the Company’s normal lending policy and Federal Reserve Bank Regulation O. The following table shows the changes in loans to officers, directors or their associates:
(In thousands) |  | 2017 |  |  | 2016 |
Balance, beginning of year |  | $ | 4,788 |  |  | $ | 4,280 |
New loans |  |  | 511 |  |  |  | 1,329 |
Repayments |  |  | (611 | ) |  |  | (697 | )
Loans with individuals no longer considered related parties |  |  | — |  |  |  | (124 | )
Balance, at end of year |  | $ | 4,688 |  |  | $ | 4,788 |
The following tables present the loan balances by portfolio segment, based on impairment method, and the corresponding balances in the allowance for loan losses as of December 31, 2017 and 2016:
December 31, 2017
|  | Total |  |  | Ending ALLL |  |  | Total |  |  | Ending ALLL |  |  |  |  |  |  |
|  | Loans |  |  | Attributable |  |  | Loans |  |  | Attributable |  |  |  |  |  |  |
|  | Individually |  |  | to Loans |  |  | Collectively |  |  | to Loans |  |  |  |  |  |  |
|  | Evaluated |  |  | Individually |  |  | Evaluated |  |  | Collectively |  |  |  |  |  | Total |
|  | for |  |  | Evaluated for |  |  | for |  |  | Evaluated for |  |  | Total |  |  | Ending |
(In thousands) |  | Impairment |  |  | Impairment |  |  | Impairment |  |  | Impairment |  |  | Loans |  |  | ALLL |
Primary residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
mortgage |  | $ | 9,802 |  |  | $ | 482 |  |  | $ | 595,767 |  |  | $ | 3,603 |  |  | $ | 605,569 |  |  | $ | 4,085 |
Home equity lines |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
of credit |  |  | 27 |  |  |  | — |  |  |  | 67,470 |  |  |  | 221 |  |  |  | 67,497 |  |  |  | 221 |
Junior lien loan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
on residence |  |  | 52 |  |  |  | — |  |  |  | 7,021 |  |  |  | 12 |  |  |  | 7,073 |  |  |  | 12 |
Multifamily |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
property |  |  | — |  |  |  | — |  |  |  | 1,388,958 |  |  |  | 10,007 |  |  |  | 1,388,958 |  |  |  | 10,007 |
Owner-occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 2,503 |  |  |  | — |  |  |  | 250,989 |  |  |  | 2,385 |  |  |  | 253,492 |  |  |  | 2,385 |
Investment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 10,681 |  |  |  | 40 |  |  |  | 863,417 |  |  |  | 11,893 |  |  |  | 874,098 |  |  |  | 11,933 |
Commercial and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
industrial |  |  | — |  |  |  | — |  |  |  | 316,294 |  |  |  | 6,563 |  |  |  | 316,294 |  |  |  | 6,563 |
Lease financing |  |  | — |  |  |  | — |  |  |  | 90,052 |  |  |  | 884 |  |  |  | 90,052 |  |  |  | 884 |
Secured by |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
farmland and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
production |  |  | — |  |  |  | — |  |  |  | 160 |  |  |  | — |  |  |  | 160 |  |  |  | — |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
construction |  |  | — |  |  |  | — |  |  |  | 92 |  |  |  | 1 |  |  |  | 92 |  |  |  | 1 |
Consumer and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
other |  |  | — |  |  |  | — |  |  |  | 99,247 |  |  |  | 349 |  |  |  | 99,247 |  |  |  | 349 |
Total ALLL |  | $ | 23,065 |  |  | $ | 522 |  |  | $ | 3,679,467 |  |  | $ | 35,918 |  |  | $ | 3,702,532 |  |  | $ | 36,440 |
December 31, 2016
|  | Total |  |  | Ending ALLL |  |  | Total |  |  | Ending ALLL |  |  |  |  |  |  |
|  | Loans |  |  | Attributable |  |  | Loans |  |  | Attributable |  |  |  |  |  |  |
|  | Individually |  |  | to Loans |  |  | Collectively |  |  | to Loans |  |  |  |  |  |  |
|  | Evaluated |  |  | Individually |  |  | Evaluated |  |  | Collectively |  |  |  |  |  | Total |
|  | for |  |  | Evaluated for |  |  | for |  |  | Evaluated for |  |  | Total |  |  | Ending |
(In thousands) |  | Impairment |  |  | Impairment |  |  | Impairment |  |  | Impairment |  |  | Loans |  |  | ALLL |
Primary residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
mortgage |  | $ | 15,814 |  |  | $ | 456 |  |  | $ | 542,156 |  |  | $ | 3,210 |  |  | $ | 557,970 |  |  | $ | 3,666 |
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
lines of credit |  |  | 53 |  |  |  | — |  |  |  | 65,630 |  |  |  | 233 |  |  |  | 65,683 |  |  |  | 233 |
Junior lien loan |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
on residence |  |  | 229 |  |  |  | — |  |  |  | 8,977 |  |  |  | 16 |  |  |  | 9,206 |  |  |  | 16 |
Multifamily |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
property |  |  | — |  |  |  | — |  |  |  | 1,459,594 |  |  |  | 11,192 |  |  |  | 1,459,594 |  |  |  | 11,192 |
Owner-occupied |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 1,486 |  |  |  | — |  |  |  | 174,637 |  |  |  | 1,774 |  |  |  | 176,123 |  |  |  | 1,774 |
Investment |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 11,335 |  |  |  | 214 |  |  |  | 740,923 |  |  |  | 10,695 |  |  |  | 752,258 |  |  |  | 10,909 |
Commercial and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
industrial |  |  | 154 |  |  |  | 154 |  |  |  | 213,829 |  |  |  | 4,010 |  |  |  | 213,983 |  |  |  | 4,164 |
Secured by |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
farmland and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
agricultural |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
production |  |  | — |  |  |  | — |  |  |  | 169 |  |  |  | 2 |  |  |  | 169 |  |  |  | 2 |
Commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
construction |  |  | — |  |  |  | — |  |  |  | 1,497 |  |  |  | 9 |  |  |  | 1,497 |  |  |  | 9 |
Consumer and |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
other |  |  | — |  |  |  | — |  |  |  | 73,621 |  |  |  | 243 |  |  |  | 73,621 |  |  |  | 243 |
Total ALLL |  | $ | 29,071 |  |  | $ | 824 |  |  | $ | 3,281,033 |  |  | $ | 31,384 |  |  | $ | 3,310,104 |  |  | $ | 32,208 |
Impaired loans include nonaccrual loans of $13.5 million at December 31, 2017 and $11.3 million at December 31, 2016. Impaired loans also include performing troubled debt restructured loans of $9.5 million at December 31, 2017 and $17.8 million at December 31, 2016. At December 31, 2017, the allowance allocated to troubled debt restructured loans totaled $423 thousand of which $173 thousand was allocated to nonaccrual loans. At December 31, 2016, the allowance allocated to troubled debt restructured loans totaled $550 thousand of which $314 thousand was allocated to nonaccrual loans. All accruing troubled debt restructured loans were paying in accordance with restructured terms as of December 31, 2017. The Company has not committed to lend additional amounts as of December 31, 2017 to customers with outstanding loans that are classified as loan restructurings. The following tables present loans individually evaluated for impairment by class of loans as of December 31, 2017 and 2016:
|  | December 31, 2017 |
|  | Unpaid |  |  |  |  |  |  |  |  | Average |
|  | Principal |  |  | Recorded |  |  | Specific |  |  | Impaired |
(In thousands) |  | Balance |  |  | Investment |  |  | Reserves |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 9,607 |  |  | $ | 8,388 |  |  | $ | — |  |  | $ | 10,847 |
Owner-occupied commercial real estate |  |  | 3,238 |  |  |  | 2,503 |  |  |  | — |  |  |  | 1,568 |
Investment commercial real estate |  |  | 9,564 |  |  |  | 9,500 |  |  |  | — |  |  |  | 9,971 |
Home equity lines of credit |  |  | 29 |  |  |  | 27 |  |  |  | — |  |  |  | 38 |
Junior lien loan on residence |  |  | 110 |  |  |  | 52 |  |  |  | — |  |  |  | 92 |
Total loans with no related allowance |  | $ | 22,548 |  |  | $ | 20,470 |  |  | $ | — |  |  | $ | 22,516 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 1,435 |  |  | $ | 1,414 |  |  | $ | 482 |  |  | $ | 1,399 |
Investment commercial real estate |  |  | 1,181 |  |  |  | 1,181 |  |  |  | 40 |  |  |  | 1,198 |
Total loans with related allowance |  | $ | 2,616 |  |  | $ | 2,595 |  |  | $ | 522 |  |  | $ | 2,597 |
Total loans individually evaluated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
for impairment |  | $ | 25,164 |  |  | $ | 23,065 |  |  | $ | 522 |  |  | $ | 25,113 |
|  | December 31, 2016 |
|  | Unpaid |  |  |  |  |  |  |  |  | Average |
|  | Principal |  |  | Recorded |  |  | Specific |  |  | Impaired |
(In thousands) |  | Balance |  |  | Investment |  |  | Reserves |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 16,015 |  |  | $ | 14,090 |  |  | $ | — |  |  | $ | 10,038 |
Owner-occupied commercial real estate |  |  | 1,597 |  |  |  | 1,486 |  |  |  | — |  |  |  | 1,450 |
Investment commercial real estate |  |  | 9,711 |  |  |  | 9,711 |  |  |  | — |  |  |  | 9,974 |
Home equity lines of credit |  |  | 56 |  |  |  | 53 |  |  |  | — |  |  |  | 143 |
Junior lien loan on residence |  |  | 280 |  |  |  | 229 |  |  |  | — |  |  |  | 339 |
Total loans with no related allowance |  | $ | 27,659 |  |  | $ | 25,569 |  |  | $ | — |  |  | $ | 21,944 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 1,787 |  |  | $ | 1,724 |  |  | $ | 456 |  |  | $ | 1,678 |
Investment commercial real estate |  |  | 1,640 |  |  |  | 1,624 |  |  |  | 214 |  |  |  | 1,642 |
Commercial and industrial |  |  | 204 |  |  |  | 154 |  |  |  | 154 |  |  |  | 145 |
Total loans with related allowance |  | $ | 3,631 |  |  | $ | 3,502 |  |  | $ | 824 |  |  | $ | 3,465 |
Total loans individually evaluated |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
for impairment |  | $ | 31,290 |  |  | $ | 29,071 |  |  | $ | 824 |  |  | $ | 25,409 |
Average impaired loans were $21.2 million as of December 31, 2015. Interest income recognized on impaired loans during 2017, 2016 and 2015 was not material. The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans as of December 31, 2017 and 2016:
|  | December 31, 2017 |
|  |  |  |  | Loans Past Due Over |
|  |  |  |  | 90 Days and Still |
(In thousands) |  | Nonaccrual |  |  | Accruing Interest |
Primary residential mortgage |  | $ | 6,056 |  |  | $ | — |
Home equity lines of credit |  |  | 6 |  |  |  | — |
Junior lien loan on residence |  |  | 52 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 2,503 |  |  |  | — |
Investment commercial real estate |  |  | 4,913 |  |  |  | — |
Total |  | $ | 13,530 |  |  | $ | — |
|  | December 31, 2016 |
|  |  |  |  | Loans Past Due Over |
|  |  |  |  | 90 Days and Still |
(In thousands) |  | Nonaccrual |  |  | Accruing Interest |
Primary residential mortgage |  | $ | 9,071 |  |  | $ | — |
Home equity lines of credit |  |  | 30 |  |  |  | — |
Junior lien loan on residence |  |  | 115 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 1,486 |  |  |  | — |
Investment commercial real estate |  |  | 408 |  |  |  | — |
Commercial and industrial |  |  | 154 |  |  |  | — |
Total |  | $ | 11,264 |  |  | $ | — |
The following tables present the recorded investment in past due loans as of December 31, 2017 and 2016 by class of loans, excluding nonaccrual loans:
|  | December 31, 2017 |
|  | 30-59 |  |  | 60-89 |  |  | Greater Than |  |  |  |
|  | Days |  |  | Days |  |  | 90 Days |  |  | Total |
(In thousands) |  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Past Due |
Primary residential mortgage |  | $ | 216 |  |  | $ | — |  |  | $ | — |  |  | $ | 216 |
Consumer and other |  |  | 30 |  |  |  | — |  |  |  | — |  |  |  | 30 |
Total |  | $ | 246 |  |  | $ | — |  |  | $ | — |  |  | $ | 246 |
|  | December 31, 2016 |
|  | 30-59 |  |  | 60-89 |  |  | Greater Than |  |  |  |
|  | Days |  |  | Days |  |  | 90 Days |  |  | Total |
(In thousands) |  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Past Due |
Primary residential mortgage |  | $ | 620 |  |  | $ | 480 |  |  | $ | — |  |  | $ | 1,100 |
Junior lien loan on residence |  |  | — |  |  |  | 25 |  |  |  | — |  |  |  | 25 |
Owner-occupied commercial real estate |  |  | 209 |  |  |  | — |  |  |  | — |  |  |  | 209 |
Commercial and industrial |  |  | 22 |  |  |  | — |  |  |  | — |  |  |  | 22 |
Total |  | $ | 851 |  |  | $ | 505 |  |  | $ | — |  |  | $ | 1,356 |
Credit Quality Indicators: The Company places all commercial loans into various credit risk rating categories based on an assessment of the expected ability of the borrowers to properly service their debt. The assessment considers numerous factors including, but not limited to, current financial information on the borrower, historical payment experience, strength of any guarantor, nature of and value of any collateral, acceptability of the loan structure and documentation, relevant public information and current economic trends. This credit risk rating analysis is performed when the loan is initially underwritten and then annually based on set criteria in the loan policy. In addition, the Bank has engaged an independent loan review firm to validate risk ratings and to ensure compliance with our policies and procedures. This review of the following types of loans is performed quarterly:
| · | All new relationships or new lending to existing relationships greater than $1,000,000;
| · | All criticized and classified rated borrowers with relationship exposure of more than $500,000;
| · | A large sample of borrowers with total relationship commitments in excess of $1,000,000;
| · | A random sample of borrowers with relationships less than $1,000,000;
| · | Any other credits requested by Bank senior management or a member of the Board of Directors and any borrower for which the reviewer determines a review is warranted based upon knowledge of the portfolio, local events, industry stresses, etc.
The Company uses the following regulatory definitions for criticized and classified risk ratings: Special Mention: These loans have a potential weakness that deserves Management’s close attention. If left uncorrected, the potential weaknesses may result in deterioration of the repayment prospects for the loans or of the institution’s credit position at some future date. Substandard: These loans are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful: These loans have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, based on currently existing facts, conditions and values. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered to be pass-rated loans. Loans that are considered to be impaired are individually evaluated for potential loss and allowance adequacy. Loans not deemed impaired are collectively evaluated for potential loss and allowance adequacy. The table below presents, based on the most recent analysis performed, the risk category of loans by class of loans for December 31, 2017 and 2016. December 31, 2017
|  |  |  |  | Special |  |  |  |  |  |  |
(In thousands) |  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |
Primary residential mortgage |  | $ | 594,846 |  |  | $ | 866 |  |  | $ | 9,857 |  |  | $ | — |
Home equity lines of credit |  |  | 67,470 |  |  |  | — |  |  |  | 27 |  |  |  | — |
Junior lien loan on residence |  |  | 7,021 |  |  |  | — |  |  |  | 52 |  |  |  | — |
Multifamily property |  |  | 1,371,825 |  |  |  | 16,755 |  |  |  | 378 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 249,003 |  |  |  | 837 |  |  |  | 3,652 |  |  |  | — |
Investment commercial real estate |  |  | 827,558 |  |  |  | 23,377 |  |  |  | 23,163 |  |  |  | — |
Commercial and industrial |  |  | 306,341 |  |  |  | 7,488 |  |  |  | 2,465 |  |  |  | — |
Lease financing |  |  | 90,052 |  |  |  | — |  |  |  | — |  |  |  | — |
Secured by farmland and agricultural |  |  | 160 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial construction |  |  | — |  |  |  | 92 |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | 97,135 |  |  |  | — |  |  |  | 2,112 |  |  |  | — |
Total |  | $ | 3,611,411 |  |  | $ | 49,415 |  |  | $ | 41,706 |  |  | $ | — |
December 31, 2016
|  |  |  |  | Special |  |  |  |  |  |  |
(In thousands) |  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |
Primary residential mortgage |  | $ | 541,359 |  |  | $ | 660 |  |  | $ | 15,951 |  |  | $ | — |
Home equity lines of credit |  |  | 65,630 |  |  |  | — |  |  |  | 53 |  |  |  | — |
Junior lien loan on residence |  |  | 8,977 |  |  |  | — |  |  |  | 229 |  |  |  | — |
Multifamily property |  |  | 1,456,328 |  |  |  | 2,867 |  |  |  | 399 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 170,851 |  |  |  | — |  |  |  | 5,272 |  |  |  | — |
Investment commercial real estate |  |  | 724,203 |  |  |  | 5,116 |  |  |  | 22,939 |  |  |  | — |
Commercial and industrial |  |  | 208,617 |  |  |  | 4,411 |  |  |  | 955 |  |  |  | — |
Secured by farmland and agricultural |  |  | 169 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial construction |  |  | 1,400 |  |  |  | 97 |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | 73,621 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 3,251,155 |  |  | $ | 13,151 |  |  | $ | 45,798 |  |  | $ | — |
At December 31, 2017, $21.8 million of substandard loans were also considered impaired as compared to December 31, 2016, when $27.9 million of the special mention and the substandard loans were also considered impaired. The tables below present a roll forward of the allowance for loan losses for the years ended December 31, 2017, 2016 and 2015.
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2017 |  |  |  |  |  |  |  |  |  |  |  | 2017 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-Offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 3,666 |  |  | $ | (889 | ) |  | $ | 173 |  |  | $ | 1,135 |  |  | $ | 4,085 |
Home equity lines of credit |  |  | 233 |  |  |  | (23 | ) |  |  | 62 |  |  |  | (51 | ) |  |  | 221 |
Junior lien loan on residence |  |  | 16 |  |  |  | (99 | ) |  |  | 26 |  |  |  | 69 |  |  |  | 12 |
Multifamily property |  |  | 11,192 |  |  |  | — |  |  |  | — |  |  |  | (1,185 | ) |  |  | 10,007 |
Owner-occupied commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 1,774 |  |  |  | (734 | ) |  |  | — |  |  |  | 1,345 |  |  |  | 2,385 |
Investment commercial real estate |  |  | 10,909 |  |  |  | (123 | ) |  |  | 23 |  |  |  | 1,124 |  |  |  | 11,933 |
Commercial and industrial |  |  | 4,164 |  |  |  | (76 | ) |  |  | 115 |  |  |  | 2,360 |  |  |  | 6,563 |
Lease financing |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 884 |  |  |  | 884 |
Secured by farmland and agricultural |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | — |
Commercial construction |  |  | 9 |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | 1 |
Consumer and other |  |  | 243 |  |  |  | (77 | ) |  |  | 4 |  |  |  | 179 |  |  |  | 349 |
Total ALLL |  | $ | 32,208 |  |  | $ | (2,021 | ) |  | $ | 403 |  |  | $ | 5,850 |  |  | $ | 36,440 |
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2016 |  |  |  |  |  |  |  |  |  |  |  | 2016 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-Offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 2,297 |  |  | $ | (1,047 | ) |  | $ | 28 |  |  | $ | 2,388 |  |  | $ | 3,666 |
Home equity lines of credit |  |  | 86 |  |  |  | (91 | ) |  |  | 15 |  |  |  | 223 |  |  |  | 233 |
Junior lien loan on residence |  |  | 66 |  |  |  | — |  |  |  | 140 |  |  |  | (190 | ) |  |  | 16 |
Multifamily property |  |  | 11,813 |  |  |  | — |  |  |  | — |  |  |  | (621 | ) |  |  | 11,192 |
Owner-occupied commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 1,679 |  |  |  | (11 | ) |  |  | 72 |  |  |  | 34 |  |  |  | 1,774 |
Investment commercial real estate |  |  | 7,590 |  |  |  | (520 | ) |  |  | 246 |  |  |  | 3,593 |  |  |  | 10,909 |
Commercial and industrial |  |  | 2,209 |  |  |  | (16 | ) |  |  | 29 |  |  |  | 1,942 |  |  |  | 4,164 |
Secured by farmland and agricultural |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2 |
Commercial construction |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | 9 |
Consumer and other |  |  | 112 |  |  |  | (5 | ) |  |  | 12 |  |  |  | 124 |  |  |  | 243 |
Total ALLL |  | $ | 25,856 |  |  | $ | (1,690 | ) |  | $ | 542 |  |  | $ | 7,500 |  |  | $ | 32,208 |
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2015 |  |  |  |  |  |  |  |  |  |  |  | 2015 |
|  | Beginning |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-Offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 2,923 |  |  | $ | (638 | ) |  | $ | 80 |  |  | $ | (68 | ) |  | $ | 2,297 |
Home equity lines of credit |  |  | 156 |  |  |  | (210 | ) |  |  | 2 |  |  |  | 138 |  |  |  | 86 |
Junior lien loan on residence |  |  | 109 |  |  |  | (13 | ) |  |  | 62 |  |  |  | (92 | ) |  |  | 66 |
Multifamily property |  |  | 8,983 |  |  |  | — |  |  |  | — |  |  |  | 2,830 |  |  |  | 11,813 |
Owner-occupied commercial |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
real estate |  |  | 1,547 |  |  |  | — |  |  |  | 11 |  |  |  | 121 |  |  |  | 1,679 |
Investment commercial real estate |  |  | 4,751 |  |  |  | (16 | ) |  |  | 18 |  |  |  | 2,837 |  |  |  | 7,590 |
Commercial and industrial |  |  | 880 |  |  |  | (73 | ) |  |  | 81 |  |  |  | 1,321 |  |  |  | 2,209 |
Secured by farmland and agricultural |  |  | 4 |  |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | 2 |
Commercial construction |  |  | 31 |  |  |  | — |  |  |  | — |  |  |  | (29 | ) |  |  | 2 |
Consumer and other |  |  | 96 |  |  |  | (41 | ) |  |  | 13 |  |  |  | 44 |  |  |  | 112 |
Total ALLL |  | $ | 19,480 |  |  | $ | (991 | ) |  | $ | 267 |  |  | $ | 7,100 |  |  | $ | 25,856 |
Troubled Debt Restructurings: The Company has allocated $423 thousand and $550 thousand of specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of December 31, 2017 and December 31, 2016, respectively. There were no unfunded commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings. During the period ended December 31, 2017, 2016 and 2015, the terms of certain loans were modified as troubled debt restructurings. The modification of the terms of such loans included one or a combination of the following: a reduction of the stated interest rate of the loan; or an extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk. The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2017:
|  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Contracts |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 6 |  |  | $ | 1,223 |  |  | $ | 1,223 |
Total |  |  | 6 |  |  | $ | 1,223 |  |  | $ | 1,223 |
The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2016:
|  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Contracts |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 7 |  |  | $ | 4,691 |  |  | $ | 4,691 |
Junior lien loan on residence |  |  | 1 |  |  |  | 63 |  |  |  | 63 |
Commercial and industrial |  |  | 1 |  |  |  | 26 |  |  |  | 26 |
Total |  |  | 9 |  |  | $ | 4,780 |  |  | $ | 4,780 |
The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2015:
|  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Contracts |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 11 |  |  | $ | 3,296 |  |  | $ | 3,296 |
Junior lien loan on residence |  |  | 1 |  |  |  | 58 |  |  |  | 58 |
Investment commercial real estate |  |  | 1 |  |  |  | 750 |  |  |  | 750 |
Total |  |  | 13 |  |  | $ | 4,104 |  |  | $ | 4,104 |
The identification of the troubled debt restructured loans did not have a significant impact on the allowance for loan losses. In addition, there were no charge-offs as a result of the classification of these loans as troubled debt restructuring during the years ended December 31, 2017, 2016 and 2015. The following table presents loans by class modified as troubled debt restructurings during the year ended December 31, 2017 for which there was a payment default during the same period:
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Contracts |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 336 |
Total |  |  | 1 |  |  | $ | 336 |
The following table presents loans by class modified as troubled debt restructurings during the year ended December 31, 2016 for which there was a payment default during the same period:
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Contracts |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 269 |
Total |  |  | 1 |  |  | $ | 269 |
There were no payment defaults on loans modified as troubled debt restructurings within twelve months of modification during the year ended December 31, 2015. The defaults described above did not have a material impact on the allowance for loan losses during 2017 and 2016. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy. The modification of the terms of such loans may include one or more of the following: (1) a reduction of the stated interest rate of the loan to a rate that is lower than the current market rate for new debt with similar risk; (2) an extension of an interest only period for a predetermined period of time; (3) an extension of the maturity date; or (4) an extension of the amortization period over which future payments will be computed. At the time a loan is restructured, the Bank performs a full re-underwriting analysis, which includes, at a minimum, obtaining current financial statements and tax returns, copies of all leases, and an updated independent appraisal of the property. A loan will continue to accrue interest if it can be reasonably determined that the borrower should be able to perform under the modified terms, that the loan has not been chronically delinquent (both to debt service and real estate taxes) or in nonaccrual status since its inception, and that there have been no charge-offs on the loan. Restructured loans with previous charge-offs would not accrue interest at the time of the troubled debt restructuring. At a minimum, six months of contractual payments would need to be made on a restructured loan before returning it to accrual status. Once a loan is classified as a TDR, the loan is reported as a TDR until the loan is paid in full, sold or charged-off. In rare circumstances, a loan may be removed from TDR status, if it meets the requirements of ASC 310-40-50-2.

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