Loans outstanding, excluding those held for sale, by general ledger classification, as of June 30, 2020 and December 31, 2019, consisted of the following:

			% of					% of
	June 30,		Totals			December 31,		Total
(Dollars in thousands)	2020		Loans			2019		Loans
Residential mortgage	$	525,994		10.82	%	$	549,138		12.50	%
Multifamily mortgage		1,178,494		24.23			1,210,003		27.54
Commercial mortgage		761,910		15.67			761,244		17.32
Commercial loans (including equipment financing) (A)		2,285,382		47.00			1,756,477		39.97
Commercial construction		3,515		0.07			5,306		0.12
Home equity lines of credit		54,006		1.11			57,248		1.30
Consumer loans, including fixed rate home equity loans		53,111		1.09			54,372		1.24
Other loans		272		0.01			349		0.01
Total loans	$	4,862,684		100.00	%	$	4,394,137		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 June 30, 2020 and December 31, 2019:

				% of					% of
	June 30,			Totals			December 31,		Total
(Dollars in thousands)	2020			Loans			2019		Loans
Primary residential mortgage	$	537,442			11.04	%	$	578,306		13.17	%
Home equity lines of credit		54,005			1.11			57,248		1.30
Junior lien loan on residence		6,160			0.13			7,011		0.16
Multifamily property		1,178,494			24.20			1,210,003		27.56
Owner-occupied commercial real estate		257,555			5.29			249,419		5.68
Investment commercial real estate		1,090,791			22.40			1,095,182		24.95
Commercial and industrial (A)		1,426,401			29.30			867,295		19.76
Lease financing		254,655			5.23			258,401		5.89
Farmland/agricultural production		2,711			0.05			3,043		0.07
Commercial construction loans		3,711			0.08			5,520		0.13
Consumer and other loans		56,980			1.17			58,213		1.33
Total loans	$	4,868,905			100.00	%	$	4,389,641		100.00	%
Net deferred costs		(6,221	)					4,496
Total loans including net deferred costs	$	4,862,684					$	4,394,137

The following tables present the loan balances by portfolio class, based on impairment method, and the corresponding balances in the allowance for loan and lease losses (ALLL) as of June 30, 2020 and December 31, 2019:

	June 30, 2020
	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	$	6,983	$	55	$	530,459	$	3,019	$	537,442	$	3,074
Home equity lines of credit		18		16		53,987		228		54,005		244
Junior lien loan on residence		—		—		6,160		20		6,160		20
Multifamily property		—		—		1,178,494		9,662		1,178,494		9,662
Owner-occupied commercial real estate		362		—		257,193		3,177		257,555		3,177
Investment commercial real estate		22,134		4,000		1,068,657		25,866		1,090,791		29,866
Commercial and industrial (A)		4,211		250		1,422,190		15,968		1,426,401		16,218
Lease financing		—		—		254,655		3,349		254,655		3,349
Farmland/agricultural production		—		—		2,711		38		2,711		38
Commercial construction loans		—		—		3,711		49		3,711		49
Consumer and other loans		—		—		56,980		368		56,980		368
Total ALLL	$	33,708	$	4,321	$	4,835,197	$	61,744	$	4,868,905	$	66,065

	December 31, 2019
	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	$	6,890	$	215	$	571,416	$	1,875	$	578,306	$	2,090
Home equity lines of credit		3		—		57,245		128		57,248		128
Junior lien loan on residence		19		—		6,992		13		7,011		13
Multifamily property		—		—		1,210,003		6,037		1,210,003		6,037
Owner-occupied commercial real estate		379		—		249,040		2,064		249,419		2,064
Investment commercial real estate		22,605		1,000		1,072,577		14,988		1,095,182		15,988
Commercial and industrial		6,028		1,585		861,267		12,768		867,295		14,353
Lease financing		—		—		258,401		2,642		258,401		2,642
Farmland/agricultural production		—		—		3,043		38		3,043		38
Commercial construction loans		—		—		5,520		27		5,520		27
Consumer and other loans		—		—		58,213		296		58,213		296
Total ALLL	$	35,924	$	2,800	$	4,353,717	$	40,876	$	4,389,641	$	43,676

Impaired loans include nonaccrual loans of $26.7 million at June 30, 2020 and $28.9 million at December 31, 2019. Impaired loans also include performing TDR loans of $2.4 million at both June 30, 2020 and December 31, 2019. At June 30, 2020, the allowance allocated to TDR loans totaled $4.3 million, of which all but $55,000 was allocated to nonaccrual loans. At December 31, 2019, the allowance allocated to TDR loans totaled $2.8 million, of which $2.7 million was allocated to nonaccrual loans. All accruing TDR loans were paying in accordance with restructured terms as of June 30, 2020. The Company has not committed to lend additional amounts as of June 30, 2020 to customers with outstanding loans that are classified as TDR loans.

The following tables present loans individually evaluated for impairment by class of loans as of June 30, 2020 and December 31, 2019 (The average impaired loans on the following tables represent year to date impaired loans.):

	June 30, 2020
	Unpaid						Average
	Principal		Recorded		Specific		Impaired
(In thousands)	Balance		Investment		Reserves		Loans
With no related allowance recorded:
Primary residential mortgage	$	7,522	$	6,324	$	—	$	5,992
Owner-occupied commercial real estate		439		362		—		366
Investment commercial real estate		9,612		7,687		—		8,038
Home equity lines of credit		5		2		—		2
Commercial and industrial		373		373		—		272
Total loans with no related allowance	$	17,951	$	14,748	$	—	$	14,670
With related allowance recorded:
Primary residential mortgage	$	659	$	659	$	55	$	558
Investment commercial real estate		15,064		14,447		4,000		14,450
Home equity lines of credit		16		16		16		3
Commercial and industrial		6,294		3,838		250		5,598
Total loans with related allowance	$	22,033	$	18,960	$	4,321	$	20,609
Total loans individually evaluated for impairment	$	39,984	$	33,708	$	4,321	$	35,279

	December 31, 2019
	Unpaid						Average
	Principal		Recorded		Specific		Impaired
(In thousands)	Balance		Investment		Reserves		Loans
With no related allowance recorded:
Primary residential mortgage	$	7,310	$	6,071	$	—	$	7,186
Owner-occupied commercial real estate		450		379		—		1,099
Investment commercial real estate		9,663		8,138		—		14,115
Home equity lines of credit		5		3		—		77
Junior lien loan on residence		92		19		—		29
Total loans with no related allowance	$	17,520	$	14,610	$	—	$	22,506
With related allowance recorded:
Primary residential mortgage	$	819	$	819	$	215	$	1,011
Investment commercial real estate		15,064		14,467		1,000		4,832
Commercial and industrial		6,229		6,028		1,585		3,685
Total loans with related allowance	$	22,112	$	21,314	$	2,800	$	9,528
Total loans individually evaluated for impairment	$	39,632	$	35,924	$	2,800	$	32,034

Interest income recognized on impaired loans for the quarters ended June 30, 2020 and 2019 was not material. The Company did not recognize any income on nonaccruing impaired loans for the three and six months ended June 30, 2020 and 2019.

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 June 30, 2020 and December 31, 2019:

	June 30, 2020
			Loans Past Due
			Over 90 Days
			And Still
(In thousands)	Nonaccrual		Accruing Interest
Primary residential mortgage	$	4,652	$	—
Home equity lines of credit		18		—
Owner-occupied commercial real estate		362		—
Investment commercial real estate		17,499		—
Commercial and industrial		4,166		—
Total	$	26,697	$	—

	December 31, 2019
			Loans Past Due
			Over 90 Days
			And Still
(In thousands)	Nonaccrual		Accruing Interest
Primary residential mortgage	$	4,533	$	—
Home equity lines of credit		3		—
Junior lien loan on residence		19		—
Owner-occupied commercial real estate		379		—
Investment commercial real estate		17,919		—
Commercial and industrial		6,028		—
Total	$	28,881	$	—

The following tables present the aging of the recorded investment in past due loans as of June 30, 2020 and December 31, 2019 by class of loans, excluding nonaccrual loans:

	June 30, 2020
	30-59		60-89		Greater Than
	Days		Days		90 Days		Total
(In thousands)	Past Due		Past Due		Past Due		Past Due
Primary residential mortgage	$	1,765	$	228	$	—	$	1,993
Multifamily property		923		—		—		923
Owner-occupied commercial real estate		—		388		—		388
Commercial and industrial		44		281		—		325
Lease financing		156		—		—		156
Total	$	2,888	$	897	$	—	$	3,785

	December 31, 2019
	30-59		60-89		Greater Than
	Days		Days		90 Days		Total
(In thousands)	Past Due		Past Due		Past Due		Past Due
Primary residential mortgage	$	1,264	$	—	$	—	$	1,264
Home equity lines of credit		80		—		—		80
Consumer and other loans		566		—		—		566
Total	$	1,910	$	—	$	—	$	1,910

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:

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.

As of June 30, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special
(In thousands)	Pass		Mention		Substandard		Doubtful
Primary residential mortgage	$	529,722	$	527	$	7,193	$	—
Home equity lines of credit		53,987		—		18		—
Junior lien loan on residence		6,160		—		—		—
Multifamily property		1,177,802		—		692		—
Owner-occupied commercial real estate		254,772		459		2,324		—
Investment commercial real estate		1,049,878		—		40,913		—
Commercial and industrial		1,387,125		26,854		12,422		—
Lease financing		254,655		—		—		—
Farmland/agricultural production		2,711		—		—		—
Commercial construction loans		3,629		82		—		—
Consumer and other loans		56,980		—		—		—
Total	$	4,777,421	$	27,922	$	63,562	$	—

As of December 31, 2019, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

			Special
(In thousands)	Pass		Mention		Substandard		Doubtful
Primary residential mortgage	$	570,353	$	853	$	7,100	$	—
Home equity lines of credit		57,245		—		3		—
Junior lien loan on residence		6,992		—		19		—
Multifamily property		1,209,288		—		715		—
Owner-occupied commercial real estate		247,388		—		2,031		—
Investment commercial real estate		1,053,445		6,325		35,412		—
Commercial and industrial		847,285		6,382		13,628		—
Lease financing		258,401		—		—		—
Farmland/agricultural production		3,043		—		—		—
Commercial construction loans		5,437		83		—		—
Consumer and other loans		58,213		—		—		—
Total	$	4,317,090	$	13,643	$	58,908	$	—

At June 30, 2020, $33.7 million of substandard loans were also considered impaired, compared to December 31, 2019, when $35.9 million of substandard loans were also impaired.

The activity in the allowance for loan and lease losses for the three months ended June 30, 2020 is summarized below:

	April 1,										June 30,
	2020										2020
	Beginning							Provision			Ending
(In thousands)	ALLL		Charge-offs			Recoveries		(Credit)			ALLL
Primary residential mortgage	$	3,173	$	—		$	36	$	(135	)	$	3,074
Home equity lines of credit		237		—			2		5			244
Junior lien loan on residence		23		—			—		(3	)		20
Multifamily property		9,104		—			—		558			9,662
Owner-occupied commercial real estate		2,838		—			—		339			3,177
Investment commercial real estate		27,671		(400	)		—		2,595			29,866
Commercial and industrial		17,124		(2,254	)		2		1,346			16,218
Lease financing		3,141		—			—		208			3,349
Farmland/agricultural production		38		—			—		—			38
Commercial construction loans		40		—			—		9			49
Consumer and other loans		394		(5	)		1		(22	)		368
Total ALLL	$	63,783	$	(2,659	)	$	41	$	4,900		$	66,065

The activity in the allowance for loan and lease losses for the three months ended June 30, 2019 is summarized below:

	April 1,										June 30,
	2019										2019
	Beginning							Provision			Ending
(In thousands)	ALLL		Charge-offs			Recoveries		(Credit)			ALLL
Primary residential mortgage	$	3,477	$	(80	)	$	9	$	(349	)	$	3,057
Home equity lines of credit		152		—			3		—			155
Junior lien loan on residence		15		—			—		—			15
Multifamily property		5,768		—			—		(24	)		5,744
Owner-occupied commercial real estate		2,534		—			64		(101	)		2,497
Investment commercial real estate		14,410		—			—		240			14,650
Commercial and industrial		10,185		—			5		1,273			11,463
Lease financing		1,803		—			—		85			1,888
Farmland/agricultural production		2		—			—		—			2
Commercial construction loans		1		—			—		—			1
Consumer and other loans		306		(14	)		1		26			319
Total ALLL	$	38,653	$	(94	)	$	82	$	1,150		$	39,791

The activity in the allowance for loan and lease losses for the six months ended June 30, 2020 is summarized below:

	January 1,									June 30,
	2020									2020
	Beginning							Provision		Ending
(In thousands)	ALLL		Charge-offs			Recoveries		(Credit)		ALLL
Primary residential mortgage	$	2,090	$	—		$	113	$	871	$	3,074
Home equity lines of credit		128		—			5		111		244
Junior lien loan on residence		13		—			—		7		20
Multifamily property		6,037		—			—		3,625		9,662
Owner-occupied commercial real estate		2,064		—			—		1,113		3,177
Investment commercial real estate		15,988		(400	)		31		14,247		29,866
Commercial and industrial		14,353		(2,254	)		5		4,114		16,218
Lease financing		2,642		—			—		707		3,349
Farmland/agricultural production		38		—			—		—		38
Commercial construction loans		27		—			—		22		49
Consumer and other loans		296		(13	)		2		83		368
Total ALLL	$	43,676	$	(2,667	)	$	156	$	24,900	$	66,065

The activity in the allowance for loan and lease losses for the six months ended June 30, 2019 is summarized below:

	January 1,										June 30,
	2019										2019
	Beginning							Provision			Ending
(In thousands)	ALLL		Charge-offs			Recoveries		(Credit)			ALLL
Primary residential mortgage	$	3,506	$	(80	)	$	51	$	(420	)	$	3,057
Home equity lines of credit		164		—			5		(14	)		155
Junior lien loan on residence		15		—			11		(11	)		15
Multifamily property		5,959		—			—		(215	)		5,744
Owner-occupied commercial real estate		2,614		—			64		(181	)		2,497
Investment commercial real estate		14,248		—			—		402			14,650
Commercial and industrial		9,839		—			9		1,615			11,463
Lease financing		1,772		—			—		116			1,888
Farmland/agricultural production		2		—			—		—			2
Commercial construction loans		1		—			—		—			1
Consumer and other loans		384		(25	)		2		(42	)		319
Total ALLL	$	38,504	$	(105	)	$	142	$	1,250		$	39,791

The CARES Act allows financial institutions to suspend application of certain current TDR accounting guidance under ASC 310-40 for loan modifications related to the COVID-19 pandemic made between March 1, 2020 and the earlier of December 31, 2020 or 60 days after the end of the COVID-19 national emergency, provided certain criteria are met. This relief can be applied to loan modifications for borrowers that were not more than 30 days past due as of December 31, 2019 and to loan modifications that defer or delay the payment of principal or interest or change the interest rate on the loan. In April 2020, federal and state banking regulators issued the Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus to provide further interpretation of when a borrower is experiencing financial difficulty, specifically indicating that if the modification is either short-term (e.g., six months) or mandated by a federal or state government in response to the COVID-19 pandemic, the borrower is not experiencing financial difficulty under ASC 310-40.

As of June 30, 2020, the Bank has modified 504 loans with a balance of $913.7 million resulting in the deferral of principal and/or interest for periods ranging from 90 to 180 days. Included in the table below are 25 loans totaling $271.0 million of loan level swaps. All of these loans were performing in accordance with their terms prior to modification, are currently performing, and are in conformance with the CARES Act. Details with respect to loan modifications are as follows:

			Post-Modification
			Outstanding
	Number of		Recorded
(Dollars in thousands)	Loans		Investment
Primary residential mortgage		229	$	92,335
Home equity lines of credit		21		5,380
Junior lien loan on residence		7		481
Multifamily property		72		270,598
Owner-occupied commercial real estate		44		51,610
Investment commercial real estate		76		411,008
Commercial and industrial		42		31,305
Lease financing		9		47,782
Farmland/agricultural production		1		133
Commercial construction loans		3		3,073
Total		504	$	913,705

The future performance of these loans, specifically beyond the term of the deferral, is uncertain. To recognize a credit allowance commensurate with the existing risk, the Company assigned qualitative factors for each of the above portfolio classes for allowance purposes.

The Company has allocated $4.3 million and $2.8 million of specific reserves on TDRs to customers whose loan terms have been modified in TDRs as of June 30, 2020 and December 31, 2019, respectively. There were no unfunded commitments to lend additional amounts to customers with outstanding loans that are classified as TDRs.

The following table presents loans by class modified as TDRs during the three-month period ended June 30, 2020:

The following table presents loans by class modified as TDRs during the six-month period ended June 30, 2020:

There were no loans modified as TDRs during the three or six months ended June 30, 2019.

The identification of the TDRs did not have a significant impact on the allowance for loan and lease losses.

The following table presents loans by class modified as TDRs that failed to comply with the modified terms in the twelve months following modification and resulted in a payment default at June 30, 2020:

There were no loans that were modified as TDRs for which there was a payment default within twelve months of modification, during the three and six months ended June 30, 2019.

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 TDR. At a minimum, six consecutive 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.