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LOANS | 12 Months Ended
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Dec. 31, 2021
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) |  | 2021 |  |  | Loans |  |  | 2020 |  |  | Loans |
Residential mortgage |  | $ | 498,300 |  |  |  | 10.37 | % |  | $ | 502,829 |  |  |  | 11.50 | %
Multifamily mortgage |  |  | 1,595,866 |  |  |  | 33.20 |  |  |  | 1,126,946 |  |  |  | 25.77 |
Commercial mortgage |  |  | 662,626 |  |  |  | 13.78 |  |  |  | 691,294 |  |  |  | 15.81 |
Commercial loans (including equipment financing) (A) |  |  | 1,955,157 |  |  |  | 40.67 |  |  |  | 1,950,981 |  |  |  | 44.62 |
Commercial construction |  |  | 20,044 |  |  |  | 0.42 |  |  |  | 12,600 |  |  |  | 0.29 |
Home equity lines of credit |  |  | 40,803 |  |  |  | 0.85 |  |  |  | 50,546 |  |  |  | 1.15 |
Consumer loans, including fixed rate home equity loans |  |  | 33,687 |  |  |  | 0.70 |  |  |  | 37,016 |  |  |  | 0.85 |
Other loans |  |  | 238 |  |  |  | 0.01 |  |  |  | 225 |  |  |  | 0.01 |
Total loans |  | $ | 4,806,721 |  |  |  | 100.00 | % |  | $ | 4,372,437 |  |  |  | 100.00 | %
| (A) | The December 31, 2021 and 2020 balances include PPP loans of $13.8 million and $195.6 million, respectively.
In determining an appropriate amount for the allowance for loan losses (“ALLL”), 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) |  | 2021 |  |  | Loans |  |  | 2020 |  |  | Loans |
Primary residential mortgage |  | $ | 500,243 |  |  |  | 10.42 | % |  | $ | 512,841 |  |  |  | 11.74 | %
Home equity lines of credit |  |  | 40,803 |  |  |  | 0.85 |  |  |  | 50,545 |  |  |  | 1.16 |
Junior lien loan on residence |  |  | 3,191 |  |  |  | 0.07 |  |  |  | 4,527 |  |  |  | 0.10 |
Multifamily property |  |  | 1,595,866 |  |  |  | 33.23 |  |  |  | 1,126,946 |  |  |  | 25.79 |
Owner-occupied commercial real estate |  |  | 252,603 |  |  |  | 5.26 |  |  |  | 253,447 |  |  |  | 5.80 |
Investment commercial real estate |  |  | 1,003,979 |  |  |  | 20.90 |  |  |  | 995,613 |  |  |  | 22.79 |
Commercial and industrial (A) |  |  | 992,332 |  |  |  | 20.66 |  |  |  | 1,059,399 |  |  |  | 24.24 |
Lease financing |  |  | 345,868 |  |  |  | 7.20 |  |  |  | 305,931 |  |  |  | 7.00 |
Farmland/Agricultural production |  |  | 6,871 |  |  |  | 0.14 |  |  |  | 3,068 |  |  |  | 0.07 |
Commercial construction |  |  | 20,174 |  |  |  | 0.42 |  |  |  | 12,773 |  |  |  | 0.29 |
Consumer and other |  |  | 40,828 |  |  |  | 0.85 |  |  |  | 44,483 |  |  |  | 1.02 |
Total loans |  | $ | 4,802,758 |  |  |  | 100.00 | % |  | $ | 4,369,573 |  |  |  | 100.00 | %
Net deferred costs |  |  | 3,963 |  |  |  |  |  |  |  | 2,864 |  |  |  |  |
Total loans including net deferred costs |  | $ | 4,806,721 |  |  |  |  |  |  | $ | 4,372,437 |  |  |  |  |
| (A) | The December 31, 2021 and 2020 balances include PPP loans of $13.8 million and $195.6 million, respectively.
The Company sold loans issued under the PPP totaling $56.5 million during 2021 resulting in a gain on sale of loans of $1.1 million. In addition, the Company sold problem loans totaling $6.7 million resulting in a gain on sale of loans of $282,000 and residential loans totaling $12.2 million resulting in a gain on sale of loans of $362,000. The Company sold loans issued under the PPP totaling $355.0 million during 2020 resulting in a gain on sale of loans of $7.4 million. The Company sold one C&I loan which totaled $5.0 million during 2019 resulting in a loss on sale of loans sold of $10,000. The Company, through the Bank, may extend credit to officers, directors and 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 and their associates:
(In thousands) |  | 2021 |  |  | 2020 |
Balance, beginning of year |  | $ | 3,801 |  |  | $ | 4,164 |
New loans |  |  | 845 |  |  |  | 1,094 |
Repayments |  |  | (309 | ) |  |  | (1,457 | )
Balance, at end of year |  | $ | 4,337 |  |  | $ | 3,801 |
The following tables present the loan balances by portfolio segment, based on impairment method, and the corresponding balances in the ALLL as of December 31, 2021 and 2020:
December 31, 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 |  | $ | 2,242 |  |  | $ | — |  |  | $ | 498,001 |  |  | $ | 1,432 |  |  | $ | 500,243 |  |  | $ | 1,432 |
Home equity lines of credit |  |  | — |  |  |  | — |  |  |  | 40,803 |  |  |  | 83 |  |  |  | 40,803 |  |  |  | 83 |
Junior lien loan on residence |  |  | 18 |  |  |  | — |  |  |  | 3,173 |  |  |  | 5 |  |  |  | 3,191 |  |  |  | 5 |
Multifamily property |  |  | — |  |  |  | — |  |  |  | 1,595,866 |  |  |  | 9,806 |  |  |  | 1,595,866 |  |  |  | 9,806 |
Owner-occupied commercial real estate |  |  | 458 |  |  |  | — |  |  |  | 252,145 |  |  |  | 1,998 |  |  |  | 252,603 |  |  |  | 1,998 |
Investment commercial real estate |  |  | 12,750 |  |  |  | 4,234 |  |  |  | 991,229 |  |  |  | 22,849 |  |  |  | 1,003,979 |  |  |  | 27,083 |
Commercial and industrial |  |  | 2,584 |  |  |  | — |  |  |  | 989,748 |  |  |  | 17,509 |  |  |  | 992,332 |  |  |  | 17,509 |
Lease financing |  |  | — |  |  |  | — |  |  |  | 345,868 |  |  |  | 3,440 |  |  |  | 345,868 |  |  |  | 3,440 |
Secured by farmland and agricultural production |  |  | — |  |  |  | — |  |  |  | 6,871 |  |  |  | 84 |  |  |  | 6,871 |  |  |  | 84 |
Commercial construction |  |  | — |  |  |  | — |  |  |  | 20,174 |  |  |  | 42 |  |  |  | 20,174 |  |  |  | 42 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | 40,828 |  |  |  | 215 |  |  |  | 40,828 |  |  |  | 215 |
Total ALLL |  | $ | 18,052 |  |  | $ | 4,234 |  |  | $ | 4,784,706 |  |  | $ | 57,463 |  |  | $ | 4,802,758 |  |  | $ | 61,697 |
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 |  |  | 9,314 |  |  |  | 2,700 |  |  |  | 1,050,085 |  |  |  | 16,347 |  |  |  | 1,059,399 |  |  |  | 19,047 |
Lease financing |  |  | — |  |  |  | — |  |  |  | 305,931 |  |  |  | 3,936 |  |  |  | 305,931 |  |  |  | 3,936 |
Secured by farmland and agricultural production |  |  | — |  |  |  | — |  |  |  | 3,068 |  |  |  | 43 |  |  |  | 3,068 |  |  |  | 43 |
Commercial construction |  |  | — |  |  |  | — |  |  |  | 12,773 |  |  |  | 158 |  |  |  | 12,773 |  |  |  | 158 |
Consumer and other |  |  | — |  |  |  | — |  |  |  | 44,483 |  |  |  | 279 |  |  |  | 44,483 |  |  |  | 279 |
Total ALLL |  | $ | 16,204 |  |  | $ | 2,703 |  |  | $ | 4,353,369 |  |  | $ | 64,606 |  |  | $ | 4,369,573 |  |  | $ | 67,309 |
Impaired loans included nonaccrual loans of $15.6 million at December 31, 2021 and $11.4 million at December 31, 2020. Included in impaired loans is a $12.8 million commercial real estate loan that was placed on nonaccrual status in 2021. The Company recorded a charge-off of $7.1 million related to this loan. Impaired loans also included performing troubled debt restructured loans of $2.5 million at December 31, 2021 and $201,000 at December 31, 2020. At December 31, 2021, there was no allowance allocated to troubled debt restructured loans. At December 31, 2020, the allowance allocated to troubled debt restructured loans totaled $3,000 of which none was allocated to nonaccrual loans. All accruing troubled debt restructured loans were paying in accordance with restructured terms as of December 31, 2021. The following tables present loans individually evaluated for impairment by class of loans as of December 31, 2021 and 2020:
|  | December 31, 2021 |
|  | Unpaid |  |  |  |  |  |  |  |  |  |  | Average |
|  | Principal |  |  | Recorded |  |  | Specific |  |  | Impaired |
(In thousands) |  | Balance |  |  | Investment |  |  | Reserves |  |  | Loans |
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Primary residential mortgage |  | $ | 2,453 |  |  | $ | 2,242 |  |  | $ | — |  |  | $ | 1,818 |
Owner-occupied commercial real estate |  |  | 492 |  |  |  | 458 |  |  |  | — |  |  |  | 540 |
Junior lien loan on residence |  |  | 18 |  |  |  | 18 |  |  |  | — |  |  |  | 3 |
Commercial and industrial |  |  | 4,549 |  |  |  | 2,584 |  |  |  | — |  |  |  | 3,153 |
Total loans with no related allowance |  | $ | 7,512 |  |  | $ | 5,302 |  |  | $ | — |  |  | $ | 5,514 |
With related allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Investment commercial real estate |  | $ | 19,887 |  |  | $ | 12,750 |  |  | $ | 4,234 |  |  | $ | 6,034 |
Total loans with related allowance |  | $ | 19,887 |  |  | $ | 12,750 |  |  | $ | 4,234 |  |  | $ | 6,034 |
Total loans individually evaluated for impairment |  | $ | 27,399 |  |  | $ | 18,052 |  |  | $ | 4,234 |  |  | $ | 11,548 |
|  | 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 during 2021, 2020 and 2019 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, 2021 and 2020:
|  | December 31, 2021 |
|  |  |  |  |  | Loans Past Due Over |
|  |  |  |  |  | 90 Days and Still |
(In thousands) |  | Nonaccrual |  |  | Accruing Interest |
Primary residential mortgage |  | $ | 1,851 |  |  | $ | — |
Junior lien loan on residence |  |  | 18 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 458 |  |  |  | — |
Investment commercial real estate |  |  | 12,750 |  |  |  | — |
Commercial and industrial |  |  | 496 |  |  |  | — |
Total |  | $ | 15,573 |  |  | $ | — |
|  | December 31, 2020 |
|  |  |  |  |  | Loans Past Due Over |
|  |  |  |  |  | 90 Days 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 recorded investment in past due loans as of December 31, 2021 and 2020 by class of loans, excluding nonaccrual loans:
|  | December 31, 2021 |
|  | 30-59 |  |  | 60-89 |  |  | Greater Than |  |  |  |  |
|  | Days |  |  | Days |  |  | 90 Days |  |  | Total |
(In thousands) |  | Past Due |  |  | Past Due |  |  | Past Due |  |  | Past Due |
Primary residential mortgage |  | $ | 639 |  |  | $ | — |  |  | $ | — |  |  | $ | 639 |
Commercial and industrial |  |  | 7,825 |  |  |  | 142 |  |  |  | — |  |  |  | 7,967 |
Total |  | $ | 8,464 |  |  | $ | 142 |  |  | $ | — |  |  | $ | 8,606 |
|  | December 31, 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 |  | $ | 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 Bank 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 originated 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 Bank 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, 2021 and 2020.
December 31, 2021 |
|  |  |  |  |  | Special |  |  |  |  |  |  |  |  |
(In thousands) |  | Pass |  |  | Mention |  |  | Substandard |  |  | Doubtful |
Primary residential mortgage |  | $ | 494,444 |  |  | $ | 557 |  |  | $ | 5,242 |  |  | $ | — |
Home equity lines of credit |  |  | 40,274 |  |  |  | — |  |  |  | 529 |  |  |  | — |
Junior lien loan on residence |  |  | 3,173 |  |  |  | — |  |  |  | 18 |  |  |  | — |
Multifamily property |  |  | 1,579,776 |  |  |  | 7,720 |  |  |  | 8,370 |  |  |  | — |
Owner-occupied commercial real estate |  |  | 251,229 |  |  |  | 663 |  |  |  | 711 |  |  |  | — |
Investment commercial real estate |  |  | 901,877 |  |  |  | 87,297 |  |  |  | 14,805 |  |  |  | — |
Commercial and industrial |  |  | 951,127 |  |  |  | 20,178 |  |  |  | 21,027 |  |  |  | — |
Lease financing |  |  | 345,868 |  |  |  | — |  |  |  | — |  |  |  | — |
Secured by farmland and agricultural |  |  | 6,871 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial construction |  |  | 20,099 |  |  |  | 75 |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | 40,828 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 4,635,566 |  |  | $ | 116,490 |  |  | $ | 50,702 |  |  | $ | — |
December 31, 2020 |
|  |  |  |  |  | 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 |  |  |  | — |  |  |  | — |  |  |  | — |
Secured by farmland and agricultural |  |  | 3,068 |  |  |  | — |  |  |  | — |  |  |  | — |
Commercial construction |  |  | 12,692 |  |  |  | 81 |  |  |  | — |  |  |  | — |
Consumer and other loans |  |  | 44,483 |  |  |  | — |  |  |  | — |  |  |  | — |
Total |  | $ | 4,169,699 |  |  | $ | 162,103 |  |  | $ | 37,771 |  |  | $ | — |
At December 31, 2021, $15.7 million of substandard loans were also considered impaired as compared to $16.2 million at December 31, 2020. The tables below present a roll forward of the ALLL for the years ended December 31, 2021, 2020 and 2019.
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2021 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2021 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-Offs |  |  | Recoveries |  |  | Provision |  |  | ALLL |
Primary residential mortgage |  | $ | 2,905 |  |  | $ | (12 | ) |  | $ | — |  |  | $ | (1,461 | ) |  | $ | 1,432 |
Home equity lines of credit |  |  | 218 |  |  |  | — |  |  |  | 85 |  |  |  | (220 | ) |  |  | 83 |
Junior lien loan on residence |  |  | 15 |  |  |  | — |  |  |  | — |  |  |  | (10 | ) |  |  | 5 |
Multifamily property |  |  | 9,945 |  |  |  | — |  |  |  | — |  |  |  | (139 | ) |  |  | 9,806 |
Owner-occupied commercial real estate |  |  | 3,050 |  |  |  | — |  |  |  | — |  |  |  | (1,052 | ) |  |  | 1,998 |
Investment commercial real estate |  |  | 27,713 |  |  |  | (7,137 | ) |  |  | — |  |  |  | 6,507 |  |  |  | 27,083 |
Commercial and industrial |  |  | 19,047 |  |  |  | (5,019 | ) |  |  | 66 |  |  |  | 3,415 |  |  |  | 17,509 |
Lease financing |  |  | 3,936 |  |  |  | — |  |  |  | — |  |  |  | (496 | ) |  |  | 3,440 |
Secured by farmland and agricultural |  |  | 43 |  |  |  | — |  |  |  | — |  |  |  | 41 |  |  |  | 84 |
Commercial construction |  |  | 158 |  |  |  | — |  |  |  | — |  |  |  | (116 | ) |  |  | 42 |
Consumer and other |  |  | 279 |  |  |  | (80 | ) |  |  | 10 |  |  |  | 6 |  |  |  | 215 |
Total ALLL |  | $ | 67,309 |  |  | $ | (12,248 | ) |  | $ | 161 |  |  | $ | 6,475 |  |  | $ | 61,697 |
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2020 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2020 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-Offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 2,090 |  |  | $ | (559 | ) |  | $ | 373 |  |  | $ | 1,001 |  |  | $ | 2,905 |
Home equity lines of credit |  |  | 128 |  |  |  | — |  |  |  | 11 |  |  |  | 79 |  |  |  | 218 |
Junior lien loan on residence |  |  | 13 |  |  |  | — |  |  |  | — |  |  |  | 2 |  |  |  | 15 |
Multifamily property |  |  | 6,037 |  |  |  | (56 | ) |  |  | — |  |  |  | 3,964 |  |  |  | 9,945 |
Owner-occupied commercial real estate |  |  | 2,064 |  |  |  | (51 | ) |  |  | — |  |  |  | 1,037 |  |  |  | 3,050 |
Investment commercial real estate |  |  | 15,988 |  |  |  | (6,092 | ) |  |  | 31 |  |  |  | 17,786 |  |  |  | 27,713 |
Commercial and industrial |  |  | 14,353 |  |  |  | (2,418 | ) |  |  | 17 |  |  |  | 7,095 |  |  |  | 19,047 |
Lease financing |  |  | 2,642 |  |  |  | — |  |  |  | — |  |  |  | 1,294 |  |  |  | 3,936 |
Secured by farmland and agricultural |  |  | 38 |  |  |  | — |  |  |  | — |  |  |  | 5 |  |  |  | 43 |
Commercial construction |  |  | 27 |  |  |  | — |  |  |  | — |  |  |  | 131 |  |  |  | 158 |
Consumer and other |  |  | 296 |  |  |  | (27 | ) |  |  | 4 |  |  |  | 6 |  |  |  | 279 |
Total ALLL |  | $ | 43,676 |  |  | $ | (9,203 | ) |  | $ | 436 |  |  | $ | 32,400 |  |  | $ | 67,309 |
|  | January 1, |  |  |  |  |  |  |  |  |  |  |  |  |  |  | December 31, |
|  | 2019 |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2019 |
|  | Beginning |  |  |  |  |  |  |  |  |  |  | Provision |  |  | Ending |
(In thousands) |  | ALLL |  |  | Charge-Offs |  |  | Recoveries |  |  | (Credit) |  |  | ALLL |
Primary residential mortgage |  | $ | 3,506 |  |  | $ | (80 | ) |  | $ | 205 |  |  | $ | (1,541 | ) |  | $ | 2,090 |
Home equity lines of credit |  |  | 164 |  |  |  | — |  |  |  | 10 |  |  |  | (46 | ) |  |  | 128 |
Junior lien loan on residence |  |  | 15 |  |  |  | — |  |  |  | 11 |  |  |  | (13 | ) |  |  | 13 |
Multifamily property |  |  | 5,959 |  |  |  | — |  |  |  | — |  |  |  | 78 |  |  |  | 6,037 |
Owner-occupied commercial real estate |  |  | 2,614 |  |  |  | — |  |  |  | 1,060 |  |  |  | (1,610 | ) |  |  | 2,064 |
Investment commercial real estate |  |  | 14,248 |  |  |  | — |  |  |  | — |  |  |  | 1,740 |  |  |  | 15,988 |
Commercial and industrial |  |  | 9,839 |  |  |  | — |  |  |  | 17 |  |  |  | 4,497 |  |  |  | 14,353 |
Lease financing |  |  | 1,772 |  |  |  | — |  |  |  | — |  |  |  | 870 |  |  |  | 2,642 |
Secured by farmland and agricultural |  |  | 2 |  |  |  | — |  |  |  | — |  |  |  | 36 |  |  |  | 38 |
Commercial construction |  |  | 1 |  |  |  | — |  |  |  | — |  |  |  | 26 |  |  |  | 27 |
Consumer and other |  |  | 384 |  |  |  | (55 | ) |  |  | 4 |  |  |  | (37 | ) |  |  | 296 |
Total ALLL |  | $ | 38,504 |  |  | $ | (135 | ) |  | $ | 1,307 |  |  | $ | 4,000 |  |  | $ | 43,676 |
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 prior to 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 December 31, 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 outstanding deferrals as of December 31, 2021. All of these loans were performing in accordance with their terms prior to modifications 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 $12.8 million. Details with respect to loan modifications are as follows:
|  |  |  |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 145 |
Investment commercial real estate |  |  | 1 |  |  |  | 12,750 |
Commercial and industrial |  |  | 4 |  |  |  | 12,656 |
Total |  |  | 6 |  |  | $ | 25,551 |
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. Troubled Debt Restructurings: The Company did not allocate specific reserves to customers whose loan terms had been modified in troubled debt restructurings as of December 31, 2021, compared to $3,000 of specific reserves as of December 31, 2020. There were no unfunded commitments to lend additional amounts to customers with outstanding loans that are classified as troubled debt restructurings. During the years ended December 31, 2021, 2020 and 2019, 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, 2021:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 3 |  |  | $ | 603 |  |  | $ | 603 |
Junior lien loan on residence |  |  | 1 |  |  |  | 18 |  |  |  | 18 |
Commercial and industrial |  |  | 1 |  |  |  | 2,070 |  |  |  | 2,070 |
Total |  |  | 5 |  |  | $ | 2,691 |  |  | $ | 2,691 |
The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2020:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 3 |  |  | $ | 423 |  |  | $ | 423 |
Commercial and industrial |  |  | 1 |  |  |  | 39 |  |  |  | 39 |
Total |  |  | 4 |  |  | $ | 462 |  |  | $ | 462 |
The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2019:
|  |  |  |  |  | Pre-Modification |  |  | Post-Modification |
|  |  |  |  |  | Outstanding |  |  | Outstanding |
|  | Number of |  |  | Recorded |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |  |  | Investment |
Primary residential mortgage |  |  | 2 |  |  | $ | 530 |  |  | $ | 530 |
Commercial and industrial |  |  | 5 |  |  |  | 6,028 |  |  |  | 6,028 |
Total |  |  | 7 |  |  | $ | 6,558 |  |  | $ | 6,558 |
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 restructurings during the years ended December 31, 2021, 2020 and 2019. The following table presents loans by class modified as troubled debt restructurings during the year ended December 31, 2021 for which there was a payment default during the same period:
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 218 |
Total |  |  | 1 |  |  | $ | 218 |
The following table presents loans by class modified as troubled debt restructurings during the year ended December 31, 2020 for which there was a payment default during the same period:
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 133 |
Commercial and industrial |  |  | 1 |  |  |  | 39 |
Total |  |  | 2 |  |  | $ | 172 |
The following table presents loans by class modified as trouble debt restructurings during the year ended December 31, 2019 for which there was a payment default during the same period:
|  | Number of |  |  | Recorded |
(Dollars in thousands) |  | Loans |  |  | Investment |
Primary residential mortgage |  |  | 1 |  |  | $ | 201 |
Total |  |  | 1 |  |  | $ | 201 |
The defaults described above did not have a material impact on the allowance for loan losses or provisions during 2021, 2020 and 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 an 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 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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