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LOANS AND LEASES | 9 Months Ended
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Sep. 30, 2021
Receivables [Abstract] |
LOANS AND LEASES | 3. LOANS AND LEASES Loans outstanding, excluding those held for sale, by general ledger classification, as of September 30, 2021 and December 31, 2020, consisted of the following:
|  |  |  |  |  | % of |  |  |  |  |  |  | % of |
|  | September 30, |  |  | Totals |  |  | December 31, |  |  | Total |
(Dollars in thousands) |  | 2021 |  |  | Loans |  |  | 2020 |  |  | Loans |
Residential mortgage |  | $ | 507,865 |  |  |  | 11.10 | % |  | $ | 502,829 |  |  |  | 11.50 | %
Multifamily mortgage |  |  | 1,497,683 |  |  |  | 32.73 |  |  |  | 1,126,946 |  |  |  | 25.77 |
Commercial mortgage |  |  | 680,107 |  |  |  | 14.87 |  |  |  | 691,294 |  |  |  | 15.81 |
Commercial loans (including equipment financing) (A) |  |  | 1,790,579 |  |  |  | 39.13 |  |  |  | 1,950,981 |  |  |  | 44.62 |
Commercial construction |  |  | 25,718 |  |  |  | 0.56 |  |  |  | 12,600 |  |  |  | 0.29 |
Home equity lines of credit |  |  | 42,512 |  |  |  | 0.93 |  |  |  | 50,545 |  |  |  | 1.15 |
Consumer loans, including fixed rate home equity loans |  |  | 30,689 |  |  |  | 0.67 |  |  |  | 37,016 |  |  |  | 0.85 |
Other loans |  |  | 245 |  |  |  | 0.01 |  |  |  | 226 |  |  |  | 0.01 |
Total loans |  | $ | 4,575,398 |  |  |  | 100.00 | % |  | $ | 4,372,437 |  |  |  | 100.00 | %
| (A) | Includes PPP loans of $49 million at September 30, 2021 and $196 million at December 31, 2020.
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 September 30, 2021 and December 31, 2020:
|  |  |  |  |  | % of |  |  |  |  |  |  | % of |
|  | September 30, |  |  | Totals |  |  | December 31, |  |  | Total |
(Dollars in thousands) |  | 2021 |  |  | Loans |  |  | 2020 |  |  | Loans |
Primary residential mortgage |  | $ | 514,271 |  |  |  | 11.25 | % |  | $ | 512,841 |  |  |  | 11.74 | %
Home equity lines of credit |  |  | 42,512 |  |  |  | 0.93 |  |  |  | 50,545 |  |  |  | 1.16 |
Junior lien loan on residence |  |  | 3,218 |  |  |  | 0.07 |  |  |  | 4,527 |  |  |  | 0.10 |
Multifamily property |  |  | 1,497,683 |  |  |  | 32.76 |  |  |  | 1,126,946 |  |  |  | 25.79 |
Owner-occupied commercial real estate |  |  | 239,674 |  |  |  | 5.24 |  |  |  | 253,447 |  |  |  | 5.80 |
Investment commercial real estate |  |  | 981,490 |  |  |  | 21.47 |  |  |  | 995,613 |  |  |  | 22.79 |
Commercial and industrial (A) |  |  | 916,192 |  |  |  | 20.04 |  |  |  | 1,059,399 |  |  |  | 24.24 |
Lease financing |  |  | 308,351 |  |  |  | 6.74 |  |  |  | 305,931 |  |  |  | 7.00 |
Farmland/agricultural production |  |  | 4,461 |  |  |  | 0.10 |  |  |  | 3,068 |  |  |  | 0.07 |
Commercial construction loans |  |  | 25,862 |  |  |  | 0.57 |  |  |  | 12,773 |  |  |  | 0.29 |
Consumer and other loans |  |  | 38,032 |  |  |  | 0.83 |  |  |  | 44,483 |  |  |  | 1.02 |
Total loans |  |  | 4,571,746 |  |  |  | 100.00 | % |  |  | 4,369,573 |  |  |  | 100.00 | %
Net deferred costs |  |  | 3,652 |  |  |  |  |  |  |  | 2,864 |  |  |  |  |
Total loans including net deferred costs |  | $ | 4,575,398 |  |  |  |  |  |  | $ | 4,372,437 |  |  |  |  |
| (A) | Includes PPP loans of $49 million at September 30, 2021 and $196 million at December 31, 2020.
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 September 30, 2021 and December 31, 2020:
|  | September 30, 2021 |
|  | 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 |  | $ | 2,886 |  |  | $ | 80 |  |  | $ | 511,385 |  |  | $ | 1,995 |  |  | $ | 514,271 |  |  | $ | 2,075 |
Home equity lines of credit |  |  | — |  |  |  | — |  |  |  | 42,512 |  |  |  | 119 |  |  |  | 42,512 |  |  |  | 119 |
Junior lien loan on residence |  |  | — |  |  |  | — |  |  |  | 3,218 |  |  |  | 7 |  |  |  | 3,218 |  |  |  | 7 |
Multifamily property |  |  | — |  |  |  | — |  |  |  | 1,497,683 |  |  |  | 10,568 |  |  |  | 1,497,683 |  |  |  | 10,568 |
Owner-occupied commercial real estate |  |  | 494 |  |  |  | — |  |  |  | 239,180 |  |  |  | 2,293 |  |  |  | 239,674 |  |  |  | 2,293 |
Investment commercial real estate |  |  | 19,887 |  |  |  | 7,137 |  |  |  | 961,603 |  |  |  | 22,847 |  |  |  | 981,490 |  |  |  | 29,984 |
Commercial and industrial (A) |  |  | 3,074 |  |  |  | — |  |  |  | 913,118 |  |  |  | 16,266 |  |  |  | 916,192 |  |  |  | 16,266 |
Lease financing |  |  | — |  |  |  | — |  |  |  | 308,351 |  |  |  | 3,369 |  |  |  | 308,351 |  |  |  | 3,369 |
Farmland/agricultural production |  |  | — |  |  |  | — |  |  |  | 4,461 |  |  |  | 58 |  |  |  | 4,461 |  |  |  | 58 |
Commercial construction loans |  |  | — |  |  |  | — |  |  |  | 25,862 |  |  |  | 165 |  |  |  | 25,862 |  |  |  | 165 |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | 38,032 |  |  |  | 229 |  |  |  | 38,032 |  |  |  | 229 |
Total ALLL |  | $ | 26,341 |  |  | $ | 7,217 |  |  | $ | 4,545,405 |  |  | $ | 57,916 |  |  | $ | 4,571,746 |  |  | $ | 65,133 |
| (A) | The balance includes PPP loans of $49 million, which had no related reserve as these loans are guaranteed by the SBA.
|  | December 31, 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 |  | $ | 1,490 |  |  | $ | 3 |  |  | $ | 511,351 |  |  | $ | 2,902 |  |  | $ | 512,841 |  |  | $ | 2,905 |
Home equity lines of credit |  |  | — |  |  |  | — |  |  |  | 50,545 |  |  |  | 218 |  |  |  | 50,545 |  |  |  | 218 |
Junior lien loan on residence |  |  | — |  |  |  | — |  |  |  | 4,527 |  |  |  | 15 |  |  |  | 4,527 |  |  |  | 15 |
Multifamily property |  |  | — |  |  |  | — |  |  |  | 1,126,946 |  |  |  | 9,945 |  |  |  | 1,126,946 |  |  |  | 9,945 |
Owner-occupied commercial real estate |  |  | 807 |  |  |  | — |  |  |  | 252,640 |  |  |  | 3,050 |  |  |  | 253,447 |  |  |  | 3,050 |
Investment commercial real estate |  |  | 4,593 |  |  |  | — |  |  |  | 991,020 |  |  |  | 27,713 |  |  |  | 995,613 |  |  |  | 27,713 |
Commercial and industrial (A) |  |  | 9,314 |  |  |  | 2,700 |  |  |  | 1,050,085 |  |  |  | 16,347 |  |  |  | 1,059,399 |  |  |  | 19,047 |
Lease financing |  |  | — |  |  |  | — |  |  |  | 305,931 |  |  |  | 3,936 |  |  |  | 305,931 |  |  |  | 3,936 |
Farmland/agricultural production |  |  | — |  |  |  | — |  |  |  | 3,068 |  |  |  | 43 |  |  |  | 3,068 |  |  |  | 43 |
Commercial construction loans |  |  | — |  |  |  | — |  |  |  | 12,773 |  |  |  | 158 |  |  |  | 12,773 |  |  |  | 158 |
Consumer and other loans |  |  | — |  |  |  | — |  |  |  | 44,483 |  |  |  | 279 |  |  |  | 44,483 |  |  |  | 279 |
Total ALLL |  | $ | 16,204 |  |  | $ | 2,703 |  |  | $ | 4,353,369 |  |  | $ | 64,606 |  |  | $ | 4,369,573 |  |  | $ | 67,309 |
(A)The balance includes PPP loans of $196 million, which had no related reserve as these loans are guaranteed by the SBA. Impaired loans include nonaccrual loans of $25.9 million at September 30, 2021 and $11.4 million at December 31, 2020. Included in impaired loans is a commercial real estate loan with a balance of $19.9 million and specific reserves of $7.1 million at September 30, 2021. Impaired loans also include performing TDR loans of $416,000 at September 30, 2021 and $201,000 at December 31, 2020. The allowance allocated to TDR loans totaled $57,000 and $3,000 at September 30, 2021 and December 31, 2020, respectively, of which none was allocated to nonaccrual loans. All accruing TDR loans were paying in accordance with restructured terms as of September 30, 2021. The Company has not committed to lend additional amounts as of September 30, 2021 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 September 30, 2021 and December 31, 2020 (The average impaired loans on the following tables represent year to date impaired loans):
|  | September 30, 2021 |
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Average |
|  | Principal |  |  | Recorded |  |  | Specific |  |  | Impaired |
(In thousands) |  | Balance |  |  | Investment |  |  | Reserves |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 1,947 |  |  | $ | 1,750 |  |  | $ | — |  |  | $ | 1,789 |
Owner-occupied commercial real estate |  |  | 521 |  |  |  | 494 |  |  |  | — |  |  |  | 564 |
Commercial and industrial |  |  | 4,986 |  |  |  | 3,074 |  |  |  | — |  |  |  | 3,289 |
Total loans with no related allowance |  | $ | 7,454 |  |  | $ | 5,318 |  |  | $ | — |  |  | $ | 5,642 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 1,136 |  |  | $ | 1,136 |  |  | $ | 80 |  |  | $ | 489 |
Investment commercial real estate |  |  | 19,887 |  |  |  | 19,887 |  |  |  | 7,137 |  |  |  | 2,210 |
Total loans with related allowance |  | $ | 21,023 |  |  | $ | 21,023 |  |  | $ | 7,217 |  |  | $ | 2,699 |
Total loans individually evaluated for impairment |  | $ | 28,477 |  |  | $ | 26,341 |  |  | $ | 7,217 |  |  | $ | 8,341 |
|  | December 31, 2020 |
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Average |
|  | Principal |  |  | Recorded |  |  | Specific |  |  | Impaired |
(In thousands) |  | Balance |  |  | Investment |  |  | Reserves |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 1,601 |  |  | $ | 1,328 |  |  | $ | — |  |  | $ | 5,544 |
Owner-occupied commercial real estate |  |  | 817 |  |  |  | 807 |  |  |  | — |  |  |  | 516 |
Investment commercial real estate |  |  | 4,593 |  |  |  | 4,593 |  |  |  | — |  |  |  | 6,582 |
Commercial and industrial |  |  | 7,137 |  |  |  | 4,314 |  |  |  | — |  |  |  | 1,677 |
Total loans with no related allowance |  | $ | 14,148 |  |  | $ | 11,042 |  |  | $ | — |  |  | $ | 14,319 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 162 |  |  | $ | 162 |  |  | $ | 3 |  |  | $ | 526 |
Commercial and industrial |  |  | 5,000 |  |  |  | 5,000 |  |  |  | 2,700 |  |  |  | 4,140 |
Total loans with related allowance |  | $ | 5,162 |  |  | $ | 5,162 |  |  | $ | 2,703 |  |  | $ | 4,666 |
Total loans individually evaluated for impairment |  | $ | 19,310 |  |  | $ | 16,204 |  |  | $ | 2,703 |  |  | $ | 18,985 |
Interest income recognized on impaired loans for the quarters ended September 30, 2021 and 2020 was not material. The Company did not recognize any income on non-accruing impaired loans for the three months and nine months ended September 30, 2021 and 2020. 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 September 30, 2021 and December 31, 2020:
|  | September 30, 2021 |
|  |  |  |  |  | Loans Past Due |
|  |  |  |  |  | 90 Days or Over |
|  |  |  |  |  | And Still |
(In thousands) |  | Nonaccrual |  |  | Accruing Interest |
Primary residential mortgage |  | $ | 2,495 |  |  | $ | — |
Owner-occupied commercial real estate |  |  | 494 |  |  |  | — |
Investment commercial real estate |  |  | 19,887 |  |  |  |  |
Commercial and industrial |  |  | 3,049 |  |  |  | — |
Total |  | $ | 25,925 |  |  | $ | — |
|  | December 31, 2020 |
|  |  |  |  |  | Loans Past Due |
|  |  |  |  |  | 90 Days or Over |
|  |  |  |  |  | And Still |
(In thousands) |  | Nonaccrual |  |  | Accruing Interest |
Primary residential mortgage |  | $ | 1,328 |  |  | $ | — |
Owner-occupied commercial real estate |  |  | 807 |  |  |  | — |
Commercial and industrial |  |  | 9,275 |  |  |  | — |
Total |  | $ | 11,410 |  |  | $ | — |
The following tables present the aging of the recorded investment in past due loans as of September 30, 2021 and December 31, 2020 by class of loans, excluding nonaccrual loans:
|  | September 30, 2021 |
|  | 30-59 |  |  | 60-89 |  |  | 90 Days or |  |  |  |  |
|  | Days |  |  | Days |  |  | Greater |  |  | Total |
(In thousands) |  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Past Due |
Primary residential mortgage |  | $ | 997 |  |  | $ | — |  |  | $ | — |  |  | $ | 997 |
Home equity lines of credit |  |  | 114 |  |  |  | — |  |  |  | — |  |  |  | 114 |
Commercial and industrial |  |  | 17 |  |  |  | 65 |  |  |  | — |  |  |  | 82 |
Total |  | $ | 1,128 |  |  | $ | 65 |  |  | $ | — |  |  | $ | 1,193 |
|  | December 31, 2020 |
|  | 30-59 |  |  | 60-89 |  |  | 90 Days or |  |  |  |  |
|  | Days |  |  | Days |  |  | Greater |  |  | Total |
(In thousands) |  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Past Due |
Primary residential mortgage |  | $ | 2,900 |  |  | $ | 141 |  |  | $ | — |  |  | $ | 3,041 |
Home equity lines of credit |  |  | 181 |  |  |  | — |  |  |  | — |  |  |  | 181 |
Junior lien loan on residence |  |  | — |  |  |  | 25 |  |  |  | — |  |  |  | 25 |
Multifamily property |  |  | — |  |  |  | 269 |  |  |  | — |  |  |  | 269 |
Owner-occupied commercial real estate |  |  | 268 |  |  |  | — |  |  |  | — |  |  |  | 268 |
Commercial and industrial |  |  | 497 |  |  |  | 772 |  |  |  | — |  |  |  | 1,269 |
Total |  | $ | 3,846 |  |  | $ | 1,207 |  |  | $ | — |  |  | $ | 5,053 |
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:
| • | A large sample of relationships or new lending to existing relationships greater than $1,000,000 booked since the prior review;
| • | All criticized and classified rated borrowers with relationship exposure of more than $500,000;
| • | A large sample of Pass-rated (including Pass Watch) borrowers with total relationships in excess of $1,000,000 and a small sample of Pass related relationships less than $1,000,000;
| • | All leveraged loans of $1,000,000 or greater;
| • | At least two borrowing relationships managed by each commercial banker;
| • | Any new Regulation “O” loan commitments over $1,000,000; and
| • | 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 review excludes borrowers with commitments of less than $500,000. 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 September 30, 2021, 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 |  | $ | 507,378 |  |  | $ | 325 |  |  | $ | 6,568 |  |  | $ | — |
Home equity lines of credit |  |  | 42,047 |  |  |  | — |  |  |  | 465 |  |  |  | — |
Junior lien loan on residence |  |  | 3,200 |  |  |  | — |  |  |  | 18 |  |  |  | — |
Multifamily property |  |  | 1,484,408 |  |  |  | 12,933 |  |  |  | 342 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 229,482 |  |  |  | 9,441 |  |  |  | 751 |  |  |  | — |
Investment commercial real estate |  |  | 882,526 |  |  |  | 79,077 |  |  |  | 19,887 |  |  |  | — |
Commercial and industrial |  |  | 878,203 |  |  |  | 14,083 |  |  |  | 23,906 |  |  |  | — |
Lease financing |  |  | 308,351 |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland/agricultural production |  |  | 4,461 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial construction loans |  |  | 25,786 |  |  |  | 76 |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | 38,032 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 4,403,874 |  |  | $ | 115,935 |  |  | $ | 51,937 |  |  | $ | — |
As of December 31, 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 |  | $ | 504,795 |  |  | $ | 1,398 |  |  | $ | 6,648 |  |  | $ | — |
Home equity lines of credit |  |  | 50,068 |  |  |  | — |  |  |  | 477 |  |  |  | — |
Junior lien loan on residence |  |  | 4,483 |  |  |  | — |  |  |  | 44 |  |  |  | — |
Multifamily property |  |  | 1,121,145 |  |  |  | 5,441 |  |  |  | 360 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 240,638 |  |  |  | 10,417 |  |  |  | 2,392 |  |  |  | — |
Investment commercial real estate |  |  | 893,115 |  |  |  | 91,162 |  |  |  | 11,336 |  |  |  | — |
Commercial and industrial |  |  | 989,281 |  |  |  | 53,604 |  |  |  | 16,514 |  |  |  | — |
Lease financing |  |  | 305,931 |  |  |  | — |  |  |  | — |  |  |  | — |
Farmland/agricultural production |  |  | 3,068 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial construction loans |  |  | 12,692 |  |  |  | 81 |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | 44,483 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 4,169,699 |  |  | $ | 162,103 |  |  | $ | 37,771 |  |  | $ | — |
At September 30, 2021, $26.3 million of substandard loans were also considered impaired, compared to $16.2 million at December 31, 2020. The increase in substandard loans was primarily due to the downgrade of one commercial real estate loan with a balance of $19.9 million at September 30, 2021. The activity in the allowance for loan and lease losses for the three months ended September 30, 2021 is summarized below:
|  | July 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | September 30, |
|  | 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2021 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 2,167 |  |  | $ | — |  |  | $ | — |  |  | $ | (92 | ) |  | $ | 2,075 |
Home equity lines of credit |  |  | 123 |  |  |  | — |  |  |  | — |  |  |  | (4 | ) |  |  | 119 |
Junior lien loan on residence |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | (1 | ) |  |  | 7 |
Multifamily property |  |  | 10,615 |  |  |  | — |  |  |  | — |  |  |  | (47 | ) |  |  | 10,568 |
Owner-occupied commercial real estate |  |  | 2,447 |  |  |  | — |  |  |  | — |  |  |  | (154 | ) |  |  | 2,293 |
Investment commercial real estate |  |  | 27,886 |  |  |  | — |  |  |  | — |  |  |  | 2,098 |  |  |  | 29,984 |
Commercial and industrial |  |  | 16,565 |  |  |  | (19 | ) |  |  | 50 |  |  |  | (330 | ) |  |  | 16,266 |
Lease financing |  |  | 3,275 |  |  |  | — |  |  |  | — |  |  |  | 94 |  |  |  | 3,369 |
Farmland/agricultural production |  |  | 43 |  |  |  | — |  |  |  | — |  |  |  | 15 |  |  |  | 58 |
Commercial construction loans |  |  | 159 |  |  |  | — |  |  |  | — |  |  |  | 6 |  |  |  | 165 |
Consumer and other loans |  |  | 217 |  |  |  | (4 | ) |  |  | 1 |  |  |  | 15 |  |  |  | 229 |
Total ALLL |  | $ | 63,505 |  |  | $ | (23 | ) |  | $ | 51 |  |  | $ | 1,600 |  |  | $ | 65,133 |
The activity in the allowance for loan and lease losses for the three months ended September 30, 2020 is summarized below:
|  | July 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | September 30, |
|  | 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2020 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 3,074 |  |  | $ | — |  |  | $ | 217 |  |  | $ | (324 | ) |  | $ | 2,967 |
Home equity lines of credit |  |  | 244 |  |  |  | — |  |  |  | 3 |  |  |  | (27 | ) |  |  | 220 |
Junior lien loan on residence |  |  | 20 |  |  |  | — |  |  |  | — |  |  |  | (2 | ) |  |  | 18 |
Multifamily property |  |  | 9,662 |  |  |  | — |  |  |  | — |  |  |  | 1,002 |  |  |  | 10,664 |
Owner-occupied commercial real estate |  |  | 3,177 |  |  |  | — |  |  |  | — |  |  |  | (166 | ) |  |  | 3,011 |
Investment commercial real estate |  |  | 29,866 |  |  |  | (5,132 | ) |  |  | — |  |  |  | 4,432 |  |  |  | 29,166 |
Commercial and industrial |  |  | 16,218 |  |  |  | (164 | ) |  |  | 6 |  |  |  | 112 |  |  |  | 16,172 |
Lease financing |  |  | 3,349 |  |  |  | — |  |  |  | — |  |  |  | 124 |  |  |  | 3,473 |
Farmland/agricultural production |  |  | 38 |  |  |  | — |  |  |  | — |  |  |  | (23 | ) |  |  | 15 |
Commercial construction loans |  |  | 49 |  |  |  | — |  |  |  | — |  |  |  | 28 |  |  |  | 77 |
Consumer and other loans |  |  | 368 |  |  |  | (2 | ) |  |  | 2 |  |  |  | (6 | ) |  |  | 362 |
Total ALLL |  | $ | 66,065 |  |  | $ | (5,298 | ) |  | $ | 228 |  |  | $ | 5,150 |  |  | $ | 66,145 |
The activity in the allowance for loan and lease losses for the nine months ended September 30, 2021 is summarized below:
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | September 30, |
|  | 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2021 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 2,905 |  |  | $ | (12 | ) |  | $ | — |  |  | $ | (818 | ) |  | $ | 2,075 |
Home equity lines of credit |  |  | 218 |  |  |  | — |  |  |  | 85 |  |  |  | (184 | ) |  |  | 119 |
Junior lien loan on residence |  |  | 15 |  |  |  | — |  |  |  | — |  |  |  | (8 | ) |  |  | 7 |
Multifamily property |  |  | 9,945 |  |  |  | — |  |  |  | — |  |  |  | 623 |  |  |  | 10,568 |
Owner-occupied commercial real estate |  |  | 3,050 |  |  |  | — |  |  |  | — |  |  |  | (757 | ) |  |  | 2,293 |
Investment commercial real estate |  |  | 27,713 |  |  |  | — |  |  |  | — |  |  |  | 2,271 |  |  |  | 29,984 |
Commercial and industrial |  |  | 19,047 |  |  |  | (5,019 | ) |  |  | 60 |  |  |  | 2,178 |  |  |  | 16,266 |
Lease financing |  |  | 3,936 |  |  |  | — |  |  |  | — |  |  |  | (567 | ) |  |  | 3,369 |
Farmland/agricultural production |  |  | 43 |  |  |  | — |  |  |  | — |  |  |  | 15 |  |  |  | 58 |
Commercial construction loans |  |  | 158 |  |  |  | — |  |  |  | — |  |  |  | 7 |  |  |  | 165 |
Consumer and other loans |  |  | 279 |  |  |  | (24 | ) |  |  | 9 |  |  |  | (35 | ) |  |  | 229 |
Total ALLL |  | $ | 67,309 |  |  | $ | (5,055 | ) |  | $ | 154 |  |  | $ | 2,725 |  |  | $ | 65,133 |
The activity in the allowance for loan and lease losses for the nine months ended September 30, 2020 is summarized below:
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | September 30, |
|  | 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2020 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 2,090 |  |  | $ | — |  |  | $ | 330 |  |  | $ | 547 |  |  | $ | 2,967 |
Home equity lines of credit |  |  | 128 |  |  |  | — |  |  |  | 8 |  |  |  | 84 |  |  |  | 220 |
Junior lien loan on residence |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 18 |
Multifamily property |  |  | 6,037 |  |  |  | — |  |  |  | — |  |  |  | 4,627 |  |  |  | 10,664 |
Owner-occupied commercial real estate |  |  | 2,064 |  |  |  | — |  |  |  | — |  |  |  | 947 |  |  |  | 3,011 |
Investment commercial real estate |  |  | 15,988 |  |  |  | (5,532 | ) |  |  | 31 |  |  |  | 18,679 |  |  |  | 29,166 |
Commercial and industrial |  |  | 14,353 |  |  |  | (2,418 | ) |  |  | 11 |  |  |  | 4,226 |  |  |  | 16,172 |
Lease financing |  |  | 2,642 |  |  |  | — |  |  |  | — |  |  |  | 831 |  |  |  | 3,473 |
Farmland/agricultural production |  |  | 38 |  |  |  | — |  |  |  | — |  |  |  | (23 | ) |  |  | 15 |
Commercial construction loans |  |  | 27 |  |  |  | — |  |  |  | — |  |  |  | 50 |  |  |  | 77 |
Consumer and other loans |  |  | 296 |  |  |  | (15 | ) |  |  | 4 |  |  |  | 77 |  |  |  | 362 |
Total ALLL |  | $ | 43,676 |  |  | $ | (7,965 | ) |  | $ | 384 |  |  | $ | 30,050 |  |  | $ | 66,145 |
Loan Modifications: 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. The revised CARES Act extended TDR relief to loan modifications through January 1, 2022. 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 September 30, 2021, the Bank had modified 542 loans with a balance of $947.0 million resulting in the deferral of principal and/or interest. The table below summarizes the deferrals as of September 30, 2021. All of these loans were performing in accordance with their terms prior to modification and are in conformance with the CARES Act. Included in the table below is one investment commercial real estate loan related to our back-to-back swap program totaling $19.9 million. Details with respect to loan modifications are as follows:
|  |  |  |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |
Primary residential mortgage |  |  | 3 |  |  | $ | 530 |
Investment commercial real estate |  |  | 1 |  |  |  | 19,887 |
Commercial and industrial |  |  | 4 |  |  |  | 12,657 |
Total |  |  | 8 |  |  | $ | 33,074 |
The future performance of these loans, specifically beyond the term of the deferral, is uncertain, with the exception of one investment commercial real estate loan of $19.9 million for which the Company individually evaluated for impairment and recorded a specific reserve at September 30, 2021. Troubled Debt Restructurings: The Company has allocated $57,000 and $3,000 of specific reserves on TDRs as of September 30, 2021 and December 31, 2020, 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 September 30, 2021:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 2 |  |  | $ | 455 |  |  | $ | 455 |
Total |  |  | 2 |  |  | $ | 455 |  |  | $ | 455 |
There were no loans modified as TDRs during the three-month period ended September 30, 2020. The following table presents loans by class modified as TDRs during the nine-month period ended September 30, 2021:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 3 |  |  | $ | 1,277 |  |  | $ | 1,277 |
Commercial and industrial |  |  | 1 |  |  |  | 2,194 |  |  |  | 2,194 |
Total |  |  | 4 |  |  | $ | 3,471 |  |  | $ | 3,471 |
The following table presents loans by class modified as TDRs during the nine-month period ended September 30, 2020:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 2 |  |  | $ | 388 |  |  | $ | 388 |
Commercial and industrial |  |  | 1 |  |  |  | 39 |  |  |  | 39 |
Total |  |  | 3 |  |  | $ | 427 |  |  | $ | 427 |
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 September 30, 2021:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 221 |  |  | $ | 221 |
Total |  |  | 1 |  |  | $ | 221 |  |  | $ | 221 |
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 September 30, 2020:
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 193 |
Commercial and industrial |  |  | 1 |  |  |  | 39 |
Total |  |  | 2 |  |  | $ | 232 |
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.

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- Definition The entire disclosure for claims held for amounts due a entity, excluding financing receivables. Examples include, but are not limited to, trade accounts receivables, notes receivables, loans receivables. Includes disclosure for allowance for credit losses. + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Publisher FASB -Name Accounting Standards Codification -Topic 310 -SubTopic 10 -URI http://asc.fasb.org/subtopic&trid=2196772 + Details
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