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v3.23.3

Loans | 9 Months Ended
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Sep. 30, 2023
Receivables [Abstract] |
Loans | Loans Upon adoption of ASU 2016-13/ASC 326, the CECL standard, as described in Notes 4 and 16 of these financial statements, the Company updated the segmentation of its loan portfolio. The updates primarily consist of reporting what had been a single class, commercial real estate loans, as three classes - commercial real estate owner occupied, commercial real estate non-owner occupied, and commercial multi-family. In addition home equity installment loans which had previously been included in the residential term class are now included in the home equity revolving and term class. Loan data as of September 30, 2023 is reported herein with the new class structure while certain prior period data retains the prior class structure. Loan Portfolio by Class: The following table shows the composition of the Company's loan portfolio by class of financing receivable as of September 30, 2023 and 2022 and at December 31, 2022:
| September 30, 2023 |  | December 31, 2022 |  | September 30, 2022 |
Commercial |  |  |  |  |  |  |  |  |
Real estate owner occupied | $ | 299,943,000 |  | 14.4 |  | % | $ | 256,623,000 |  | 13.4 |  | % | $ | 251,410,000 |  | 13.6 |  | %
Real estate non-owner occupied | 397,024,000 |  | 19.1 |  | % | 363,660,000 |  | 19.0 |  | % | 315,514,000 |  | 17.0 |  | %
Construction | 72,424,000 |  | 3.5 |  | % | 93,907,000 |  | 4.9 |  | % | 129,036,000 |  | 6.9 |  | %
C&I | 350,596,000 |  | 16.9 |  | % | 319,359,000 |  | 16.7 |  | % | 310,110,000 |  | 16.7 |  | %
Multifamily | 91,041,000 |  | 4.4 |  | % | 79,057,000 |  | 4.1 |  | % | 71,784,000 |  | 3.9 |  | %
Municipal | 58,447,000 |  | 2.8 |  | % | 40,619,000 |  | 2.1 |  | % | 48,702,000 |  | 2.6 |  | %
Residential |  |  |  |  |  |  |  |  |
Term | 660,049,000 |  | 31.7 |  | % | 597,404,000 |  | 31.2 |  | % | 581,066,000 |  | 31.3 |  | %
Construction | 28,986,000 |  | 1.4 |  | % | 49,907,000 |  | 2.6 |  | % | 41,631,000 |  | 2.2 |  | %
Home Equity |  |  |  |  |  |  |  |  |
Revolving and term | 101,980,000 |  | 4.9 |  | % | 93,075,000 |  | 4.9 |  | % | 87,903,000 |  | 4.7 |  | %
Consumer | 19,370,000 |  | 0.9 |  | % | 21,063,000 |  | 1.1 |  | % | 20,819,000 |  | 1.1 |  | %
Total | $ | 2,079,860,000 |  | 100.0 |  | % | $ | 1,914,674,000 |  | 100.0 |  | % | $ | 1,857,975,000 |  | 100.0 |  | %
Loan balances include net deferred loan costs of $11,213,000 as of September 30, 2023, $10,132,000 as of December 31, 2022, and $9,978,000 as of September 30, 2022. Net deferred loan costs have increased from a year ago and year-to-date due to loan origination unit volume over the period. Loan balances in the Residential Term segment also include a valuation adjustment for fair value swaps hedged by certain loans in the portfolio. This adjustment subtracted $705,000 from the loan balances as of September 30, 2023; there was no such adjustment as of December 31, 2022 or September 30, 2022. Pursuant to collateral agreements, qualifying first mortgage loans and commercial real estate loans, which totaled $525,904,000 at September 30, 2023, were used to collateralize borrowings from the FHLBB. This compares to qualifying loans which totaled $475,233,000 at December 31, 2022, and $464,069,000 at September 30, 2022. In addition, commercial, residential construction and home equity loans totaling $332,657,000 at September 30, 2023, $338,636,000 at December 31, 2022, and $327,551,000 at September 30, 2022, were used to collateralize a standby line of credit at the FRBB. In September 2022 the Bank sold a block of 41 mixed performing residential mortgage loans. This block of loans carried general ledger balances that totaled $5.2 million and included a number of past-due, non-accrual, and TDR loans. The impact of the sale on the portfolio is included in the information presented herein for the prior year. Past Due Loans: For all loan classes, loans over 30 days past due are considered delinquent. Information on the past-due status of loans by class of financing receivable as of September 30, 2023, is presented in the following table:
| 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due | All Past Due | Current | Total | 90+ Days & Accruing
Commercial |  |  |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | 299,943,000 |  | $ | 299,943,000 |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | 397,024,000 |  | 397,024,000 |  | — |
Construction | — |  | 7,000 |  | 8,000 |  | 15,000 |  | 72,409,000 |  | 72,424,000 |  | — |
C&I | 349,000 |  | 100,000 |  | 221,000 |  | 670,000 |  | 349,926,000 |  | 350,596,000 |  | — |
Multifamily | — |  | — |  | — |  | — |  | 91,041,000 |  | 91,041,000 |  | — |
Municipal | — |  | — |  | — |  | — |  | 58,447,000 |  | 58,447,000 |  | — |
Residential |  |  |  |  |  |  |
Term | 39,000 |  | 106,000 |  | 578,000 |  | 723,000 |  | 659,326,000 |  | 660,049,000 |  | — |
Construction | — |  | 62,000 |  | — |  | 62,000 |  | 28,924,000 |  | 28,986,000 |  | — |
Home equity |  |  |  |  |  |  |
Revolving and term | 79,000 |  | — |  | 179,000 |  | 258,000 |  | 101,722,000 |  | 101,980,000 |  | — |
Consumer | 210,000 |  | 39,000 |  | 11,000 |  | 260,000 |  | 19,110,000 |  | 19,370,000 |  | 11,000 |
Total | $ | 677,000 |  | $ | 314,000 |  | $ | 997,000 |  | $ | 1,988,000 |  | $ | 2,077,872,000 |  | $ | 2,079,860,000 |  | $ | 11,000 |
Information on the past-due status of loans by class of financing receivable as of December 31, 2022, is presented in the following table:
| 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due | All Past Due | Current | Total | 90+ Days & Accruing
Commercial |  |  |  |  |  |  |
Real estate | $ | — |  | $ | 3,000 |  | $ | 190,000 |  | $ | 193,000 |  | $ | 699,147,000 |  | $ | 699,340,000 |  | $ | — |
Construction | — |  | — |  | — |  | — |  | 93,907,000 |  | 93,907,000 |  | — |
Other | 118,000 |  | 23,000 |  | 85,000 |  | 226,000 |  | 319,133,000 |  | 319,359,000 |  | 34,000 |
Municipal | — |  | — |  | — |  | — |  | 40,619,000 |  | 40,619,000 |  | — |
Residential |  |  |  |  |  |  |
Term | 135,000 |  | 33,000 |  | 284,000 |  | 452,000 |  | 596,952,000 |  | 597,404,000 |  | 118,000 |
Construction | — |  | — |  | — |  | — |  | 49,907,000 |  | 49,907,000 |  | — |
Home equity line of credit | 241,000 |  | 29,000 |  | 151,000 |  | 421,000 |  | 92,654,000 |  | 93,075,000 |  | 86,000 |
Consumer | 131,000 |  | 33,000 |  | 3,000 |  | 167,000 |  | 20,896,000 |  | 21,063,000 |  | 3,000 |
Total | $ | 625,000 |  | $ | 121,000 |  | $ | 713,000 |  | $ | 1,459,000 |  | $ | 1,913,215,000 |  | $ | 1,914,674,000 |  | $ | 241,000 |
Information on the past-due status of loans by class of financing receivable as of September 30, 2022, is presented in the following table:
| 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due | All Past Due | Current | Total | 90+ Days & Accruing
Commercial |  |  |  |  |  |  |
Real estate | $ | — |  | $ | 4,000 |  | $ | 191,000 |  | $ | 195,000 |  | $ | 638,513,000 |  | $ | 638,708,000 |  | $ | — |
Construction | — |  | — |  | — |  | — |  | 129,036,000 |  | 129,036,000 |  | — |
Other | 172,000 |  | 16,000 |  | 83,000 |  | 271,000 |  | 309,839,000 |  | 310,110,000 |  | — |
Municipal | — |  | — |  | — |  | — |  | 48,702,000 |  | 48,702,000 |  | — |
Residential |  |  |  |  |  |  |
Term | 79,000 |  | 77,000 |  | 166,000 |  | 322,000 |  | 580,744,000 |  | 581,066,000 |  | — |
Construction | — |  | — |  | — |  | — |  | 41,631,000 |  | 41,631,000 |  | — |
Home equity line of credit | 473,000 |  | 29,000 |  | — |  | 502,000 |  | 87,401,000 |  | 87,903,000 |  | — |
Consumer | 143,000 |  | 28,000 |  | — |  | 171,000 |  | 20,648,000 |  | 20,819,000 |  | — |
Total | $ | 867,000 |  | $ | 154,000 |  | $ | 440,000 |  | $ | 1,461,000 |  | $ | 1,856,514,000 |  | $ | 1,857,975,000 |  | $ | — |
Non-Accrual Loans: For all classes, loans are placed on non-accrual status when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement or when principal and interest is 90 days or more past due unless the loan is both well secured and in the process of collection (in which case the loan may continue to accrue interest in spite of its past due status). A loan is "well secured" if it is secured (1) by collateral in the form of liens on or pledges of real or personal property, including securities, that have a realizable value sufficient to discharge the debt (including accrued interest) in full, or (2) by the guarantee of a financially responsible party. A loan is "in the process of collection" if collection of the loan is proceeding in due course either (1) through legal action, including judgment enforcement procedures, or, (2) in appropriate circumstances, through collection efforts not involving legal action which are reasonably expected to result in repayment of the debt or in its restoration to a current status in the near future. Cash payments received on non-accrual loans are applied to reduce the loan's principal balance until the remaining principal balance is deemed collectible, after which interest is recognized when collected. As a general rule, a loan may be restored to accrual status when payments are current for a substantial period of time, generally six months, and repayment of the remaining contractual amounts is expected, or when it otherwise becomes well secured and in the process of collection. The following table presents the amortized costs basis of loans on nonaccrual status as of September 30, 2023, December 31, 2022 and September 30, 2022:
| September 30, 2023 | December 31, 2022 | September 30, 2022
| Nonaccrual with Allowance for Credit Loss | Nonaccrual with no Allowance for Credit Loss | Total Nonaccrual | Total Nonaccrual | Total Nonaccrual
Commercial |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | 193,000 |  | $ | 195,000 |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | — |
Construction | — |  | 29,000 |  | 29,000 |  | 23,000 |  | 25,000 |
C&I | 363,000 |  | 351,000 |  | 714,000 |  | 663,000 |  | 756,000 |
Multifamily | — |  | — |  | — |  | — |  | — |
Municipal | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |
Term | 304,000 |  | 1,016,000 |  | 1,320,000 |  | 572,000 |  | 637,000 |
Construction | — |  | — |  | — |  | — |  | — |
Home equity |  |  |  |  |
Revolving and term | — |  | 490,000 |  | 490,000 |  | 304,000 |  | 247,000 |
Consumer | — |  | — |  | — |  | — |  | — |
Total | $ | 667,000 |  | $ | 1,886,000 |  | $ | 2,553,000 |  | $ | 1,755,000 |  | $ | 1,860,000 |
Individually Analyzed Loans: Individually analyzed loans include loans placed on non-accrual and loans reported as TDR prior to adoption of ASU 2022-02 Troubled Debt Restructurings and Vintage Disclosures, with balances of $250,000 or more. These loans are measured at the present value of expected future cash flows discounted at the loan's effective interest rate or at the fair value of the collateral if the loan is collateral dependent. If the measure of an individually analyzed loan is lower than the recorded investment in the loan and estimated selling costs, a specific reserve is established for the difference, or, in certain situations, if the measure of an individually analyzed loan is lower than the recorded investment in the loan and estimated selling costs, the difference is written off. The following table presents the amortized cost basis of collateral-dependent loans as of September 30, 2023 by collateral type:
| Collateral Type |
| Commercial Real Estate | Residential Real Estate |  | Total
Commercial |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  |  | $ | — |
Real estate non-owner occupied | — | — |  | —
Construction | — | — |  | —
C&I | — | — |  | —
Multifamily | — | — |  | —
Municipal | — | — |  | —
Residential |  |  |  |
Term | — | 687,000 |  | 687,000
Construction | — | — |  | —
Home Equity |  |  |  |
Revolving and term | — | — |  | —
Consumer | — | — |  | —
Total | $ | — |  | $ | 687,000 |  |  | $ | 687,000 |
Collateral-dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment. A breakdown of individually analyzed loans by class of financing receivable as of and for the period ended September 30, 2023 is presented in the following table:
|  |  |  | For the nine months ended September 30, 2023 | For the quarter ended September 30, 2023
| Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Recognized Interest Income | Average Recorded Investment | Recognized Interest Income
With No Related Allowance
Commercial |  |  |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | 143,000 |  | $ | — |  | $ | — |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | 537,000 |  | — |  | — |  | (12,000) |
Construction | — |  | — |  | — |  | 157,000 |  | — |  | — |  | — |
C&I | — |  | — |  | — |  | 72,000 |  | — |  | — |  | — |
Multifamily | — |  | — |  | — |  | — |  | — |  | — |  | — |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  |
Term | 384,000 |  | 411,000 |  | — |  | 977,000 |  | 15,000 |  | 384,000 |  | 8,000 |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home Equity |  |  |  |  |  |  |
Revolving and term | — |  | — |  | — |  | 238,000 |  | — |  | — |  | — |
Consumer | — |  | — |  | — |  | — |  | — |  | — |  | — |
| $ | 384,000 |  | $ | 411,000 |  | $ | — |  | $ | 2,124,000 |  | $ | 15,000 |  | $ | 384,000 |  | $ | (4,000) |
With an Allowance Recorded
Commercial |  |  |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | — |  | — |  | — |  | — |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
C&I | 363,000 |  | 456,000 |  | 225,000 |  | 502,000 |  | — |  | 366,000 |  | — |
Multifamily | — |  | — |  | — |  | — |  | — |  | — |  | — |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  |
Term | 566,000 |  | 573,000 |  | 41,000 |  | 878,000 |  | 10,000 |  | 697,000 |  | (2,000) |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home Equity |  |  |  |  |  |  |
Revolving and term | — |  | — |  | — |  | 9,000 |  | — |  | — |  | — |
Consumer | — |  | — |  | — |  | — |  | — |  | — |  | — |
| $ | 929,000 |  | $ | 1,029,000 |  | $ | 266,000 |  | $ | 1,389,000 |  | $ | 10,000 |  | $ | 1,063,000 |  | $ | (2,000) |
Total
Commercial |  |  |  |  |  |  |
Real estate owner occupied | $ | — |  | $ | — |  | $ | — |  | $ | 143,000 |  | $ | — |  | $ | — |  | $ | — |
Real estate non-owner occupied | — |  | — |  | — |  | 537,000 |  | — |  | — |  | (12,000) |
Construction | — |  | — |  | — |  | 157,000 |  | — |  | $ | — |  | — |
C&I | 363,000 |  | 456,000 |  | 225,000 |  | 574,000 |  | — |  | 366,000 |  | — |
Multifamily | — |  | — |  | — |  | — |  | — |  | — |  | — |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  |
Term | 950,000 |  | 984,000 |  | 41,000 |  | 1,855,000 |  | 25,000 |  | 1,081,000 |  | 6,000 |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home Equity |  |  |  |  |  |  |
Revolving and term | — |  | — |  | — |  | 247,000 |  | — |  | — |  | — |
Consumer | — |  | — |  | — |  | — |  | — |  | — |  | — |
| $ | 1,313,000 |  | $ | 1,440,000 |  | $ | 266,000 |  | $ | 3,513,000 |  | $ | 25,000 |  | $ | 1,447,000 |  | $ | (6,000) |
Substantially all interest income recognized on individually analyzed loans for all classes of financing receivables was recognized on a cash basis as received. A breakdown of individually analyzed loans by class of financing receivable as of and for the year ended December 31, 2022 is presented in the following table:
| Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Recognized Interest Income
With No Related Allowance
Commercial |  |  |  |  |
Real estate | $ | 1,236,000 |  | $ | 1,532,000 |  | $ | — |  | $ | 1,440,000 |  | $ | 50,000 |
Construction | 685,000 |  | 687,000 |  | — |  | 81,000 |  | 35,000 |
Other | 301,000 |  | 348,000 |  | — |  | 408,000 |  | 13,000 |
Municipal | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |
Term | 1,833,000 |  | 2,035,000 |  | — |  | 4,507,000 |  | 56,000 |
Construction | — |  | — |  | — |  | — |  | — |
Home equity line of credit | 304,000 |  | 340,000 |  | — |  | 295,000 |  | — |
Consumer | — |  | — |  | — |  | 1,000 |  | — |
| $ | 4,359,000 |  | $ | 4,942,000 |  | $ | — |  | $ | 6,732,000 |  | $ | 154,000 |
With an Allowance Recorded
Commercial |  |  |  |  |
Real estate | $ | — |  | $ | — |  | $ | — |  | $ | 11,000 |  | $ | — |
Construction | — |  | — |  | — |  | 606,000 |  | — |
Other | 545,000 |  | 647,000 |  | 298,000 |  | 693,000 |  | — |
Municipal | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |
Term | 1,256,000 |  | 1,259,000 |  | 100,000 |  | 1,486,000 |  | 50,000 |
Construction | — |  | — |  | — |  | — |  | — |
Home equity line of credit | — |  | — |  | — |  | 8,000 |  | — |
Consumer | — |  | — |  | — |  | — |  | — |
| $ | 1,801,000 |  | $ | 1,906,000 |  | $ | 398,000 |  | $ | 2,804,000 |  | $ | 50,000 |
Total
Commercial |  |  |  |  |
Real estate | $ | 1,236,000 |  | $ | 1,532,000 |  | $ | — |  | $ | 1,451,000 |  | $ | 50,000 |
Construction | 685,000 |  | 687,000 |  | — |  | 687,000 |  | 35,000 |
Other | 846,000 |  | 995,000 |  | 298,000 |  | 1,101,000 |  | 13,000 |
Municipal | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |
Term | 3,089,000 |  | 3,294,000 |  | 100,000 |  | 5,993,000 |  | 106,000 |
Construction | — |  | — |  | — |  | — |  | — |
Home equity line of credit | 304,000 |  | 340,000 |  | — |  | 303,000 |  | — |
Consumer | — |  | — |  | — |  | 1,000 |  | — |
| $ | 6,160,000 |  | $ | 6,848,000 |  | $ | 398,000 |  | $ | 9,536,000 |  | $ | 204,000 |
A breakdown of individually analyzed loans by class of financing receivable as of and for the period ended September 30, 2022 is presented in the following table:
|  |  |  | For the nine months ended September 30, 2022 | For the quarter ended September 30, 2022
| Recorded Investment | Unpaid Principal Balance | Related Allowance | Average Recorded Investment | Recognized Interest Income | Average Recorded Investment | Recognized Interest Income
With No Related Allowance
Commercial |  |  |  |  |  |  |
Real estate | $ | 1,295,000 |  | $ | 1,607,000 |  | $ | — |  | $ | 1,497,000 |  | $ | 42,000 |  | $ | 1,314,000 |  | $ | 14,000 |
Construction | 25,000 |  | 27,000 |  | — |  | 26,000 |  | — |  | 25,000 |  | — |
Other | 399,000 |  | 459,000 |  | — |  | 432,000 |  | 10,000 |  | 405,000 |  | 2,000 |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  |
Term | 1,912,000 |  | 2,139,000 |  | — |  | 5,380,000 |  | 40,000 |  | 4,666,000 |  | (9,000) |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home equity line of credit | 247,000 |  | 279,000 |  | — |  | 299,000 |  | — |  | 249,000 |  | — |
Consumer | — |  | — |  | — |  | 1,000 |  | — |  | — |  | — |
| $ | 3,878,000 |  | $ | 4,511,000 |  | $ | — |  | $ | 7,635,000 |  | $ | 92,000 |  | $ | 6,659,000 |  | $ | 7,000 |
With an Allowance Recorded
Commercial |  |  |  |  |  |  |
Real estate | $ | — |  | $ | — |  | $ | — |  | $ | 14,000 |  | $ | — |  | $ | — |  | $ | — |
Construction | 661,000 |  | 661,000 |  | 6,000 |  | 661,000 |  | 27,000 |  | 661,000 |  | 16,000 |
Other | 552,000 |  | 647,000 |  | 315,000 |  | 745,000 |  | — |  | 679,000 |  | — |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  |
Term | 1,264,000 |  | 1,267,000 |  | 99,000 |  | 1,562,000 |  | 34,000 |  | 1,384,000 |  | 9,000 |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home equity line of credit | — |  | — |  | — |  | 11,000 |  | — |  | — |  | — |
Consumer | — |  | — |  | — |  | — |  | — |  | — |  | — |
| $ | 2,477,000 |  | $ | 2,575,000 |  | $ | 420,000 |  | $ | 2,993,000 |  | $ | 61,000 |  | $ | 2,724,000 |  | $ | 25,000 |
Total
Commercial |  |  |  |  |  |  |
Real estate | $ | 1,295,000 |  | $ | 1,607,000 |  | $ | — |  | $ | 1,511,000 |  | $ | 42,000 |  | $ | 1,314,000 |  | $ | 14,000 |
Construction | 686,000 |  | 688,000 |  | 6,000 |  | 687,000 |  | 27,000 |  | 686,000 |  | 16,000 |
Other | 951,000 |  | 1,106,000 |  | 315,000 |  | 1,177,000 |  | 10,000 |  | 1,084,000 |  | 2,000 |
Municipal | — |  | — |  | — |  | — |  | — |  | — |  | — |
Residential |  |  |  |  |  |  |
Term | 3,176,000 |  | 3,406,000 |  | 99,000 |  | 6,942,000 |  | 74,000 |  | 6,050,000 |  | — |
Construction | — |  | — |  | — |  | — |  | — |  | — |  | — |
Home equity line of credit | 247,000 |  | 279,000 |  | — |  | 310,000 |  | — |  | 249,000 |  | — |
Consumer | — |  | — |  | — |  | 1,000 |  | — |  | — |  | — |
| $ | 6,355,000 |  | $ | 7,086,000 |  | $ | 420,000 |  | $ | 10,628,000 |  | $ | 153,000 |  | $ | 9,383,000 |  | $ | 32,000 |
Loan Modifications: ASU 2022-02 amends ASC 326 for entities that have adopted ASU 2016-13, the CECL standard, such as the Company. ASU 2022-02 eliminates the accounting guidance for TDRs and introduces new guidance for enhanced reporting of certain loan modifications to borrowers experiencing financial difficulty. Loan modifications may include interest rate reduction, term extension, payment deferral, principle forgiveness or a combination thereof. It is the intent to minimize future losses while providing borrowers with financial relief. The following table represents loan modifications made to borrowers experiencing financial difficulty by modification type and class of financing receivable, during the three months ended September 30, 2023:
| Payment Deferral
| Amortized Cost Basis at September 30, 2023 | % of Total Class of Financing Receivable
Commercial |  |
Real estate owner occupied | $ | 504,000 |  | 0.17 | %
C&I | 19,000 |  | 0.01 | %
| $ | 523,000 |  | 0.03 | %
The following table describes the financial effect of the modifications made to borrowers experiencing financial difficulty for the three months ended September 30, 2023:
| Payment Deferral
| Financial Effect
Commercial |
Real estate owner occupied | Temporary payment accommodation, payments deferred to end of loan.
C&I | Temporary payment accommodation, payments deferred to end of loan.
The Company monitors the performance of the loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table depicts the performance of loans that have been modified during the nine months ended September 30, 2023:
| Payment Status (Amortized Cost Basis)
| Current | 30-59 Days Past Due | 60-89 Days Past Due | 90+ Days Past Due
Commercial |  |  |  |
Real estate owner occupied | $ | 503,000 |  | $ | — |  | $ | — |  | $ | — |
C&I | 220,000 |  | 40,000 |  | — |  | — |
Total | $ | 723,000 |  | $ | 40,000 |  | $ | — |  | $ | — |
Troubled Debt Restructured: Prior to adoption of ASU 2022-02, the Company evaluated loan modifications and other transactions to determine if classification as a TDR was necessary. A TDR constitutes a restructuring of debt if the Company, for economic or legal reasons related to the borrower's financial difficulties, grants a concession to the borrower that it would not otherwise consider. To determine whether or not a loan was to be classified as a TDR, Management evaluated a loan based upon the following criteria: •The borrower demonstrates financial difficulty; common indicators include past due status with bank obligations, substandard credit bureau reports, or an inability to refinance with another lender; and •The Company has granted a concession; common concession types include maturity date extension, interest rate adjustments to below market pricing, and deferment of payments. As of December 31, 2022, the company had 29 loans with a balance of $4,744,000 that were classified as TDRs. The impairment carried as a specific reserve in the allowance for loan losses is calculated by present valuing the expected cash flows on the loan at the original interest rate, or, for collateral-dependent loans, using the fair value of the collateral less costs to sell. The following table shows TDRs by class and the specific reserve as of December 31, 2022:
| Number of Loans |  | Balance |  | Specific Reserves
Commercial |  |  |  |  |
Real estate | 5 |  |  | $ | 1,044,000 |  |  | $ | — |
Construction | 1 |  |  | 661,000 |  |  | — |
Other | 3 |  |  | 361,000 |  |  | 81,000 |
Municipal | — |  |  | — |  |  | — |
Residential |  |  |  |  |
Term | 20 |  |  | 2,678,000 |  |  | 100,000 |
Construction | — |  |  | — |  |  | — |
Home equity line of credit | — |  |  | — |  |  | — |
Consumer | — |  |  | — |  |  | — |
| 29 |  |  | $ | 4,744,000 |  |  | $ | 181,000 |
As of December 31, 2022, one of the loans classified as TDR with a total balance of $97,000 was more than 30 days past due and was not placed on TDR status in the previous 12 months. The following table shows past-due TDRs by class and the associated specific reserves included in the allowance for loan losses as of December 31, 2022:
| Number of Loans |  | Balance |  | Specific Reserves
Commercial |  |  |  |  |
Real estate | — |  |  | $ | — |  |  | $ | — |
Construction | — |  |  | — |  |  | — |
Other | 1 |  |  | 97,000 |  |  | — |
Municipal | — |  |  | — |  |  | — |
Residential |  |  |  |  |
Term | — |  |  | — |  |  | — |
Construction | — |  |  | — |  |  | — |
Home equity line of credit | — |  |  | — |  |  | — |
Consumer | — |  |  | — |  |  | — |
| 1 |  |  | $ | 97,000 |  |  | $ | — |
For the year ended December 31, 2022, one loan was placed on TDR status. The following table shows this TDR by class and the associated specific reserves included in the allowance for loan losses as of December 31, 2022:
| Number of Loans |  | Pre-Modification Outstanding Recorded Investment |  | Post-Modification Outstanding Recorded Investment |  | Specific Reserves
Commercial |  |  |  |  |  |  |
Real estate | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Construction | — |  |  | — |  |  | — |  |  | — |
Other | — |  |  | — |  |  | — |  |  | — |
Municipal | — |  |  | — |  |  | — |  |  | — |
Residential |  |  |  |  |  |  |
Term | 1 |  |  | 38,000 |  |  | 38,000 |  |  | — |
Construction | — |  |  | — |  |  | — |  |  | — |
Home equity line of credit | — |  |  | — |  |  | — |  |  | — |
Consumer | — |  |  | — |  |  | — |  |  | — |
| 1 |  |  | $ | 38,000 |  |  | $ | 38,000 |  |  | $ | — |
As of December 31, 2022, Management was aware of four loans classified as TDRs that are involved in bankruptcy with an outstanding balance of $550,000. As of December 31, 2022, there were five loans with an outstanding balance of $339,000 that were classified as TDRs and were on non-accrual status, of which none were in the process of foreclosure. Residential Mortgage Loans in Process of Foreclosure As of September 30, 2023, there were four mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $459,000. This compares to two mortgage loans collateralized by residential real estate in the process of foreclosure with a total balance of $166,000 as of December 31, 2022 and September 30, 2022.

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