Note

Loan Receivables and Allowance for Loan and Lease Losses

As of

December

31,

2018

and

2017,

loans receivable, net, consists of the following:

(In thousands)	December 31, 2018			December 31, 2017
Loan portfolio segment:
Commercial Real Estate	$	274,938			299,925
Residential Real Estate		157,300			146,377
Commercial and Industrial		191,852			131,161
Consumer and Other		94,569			87,707
Construction		46,040			47,619
Construction to Permanent - CRE		15,677			6,858
Loans receivable, gross		780,376			719,647
Allowance for loan and lease losses		(7,609	)		(6,297	)
Loans receivable, net	$	772,767			713,350

Patriot's lending activities are conducted principally in Fairfield and New Haven Counties in Connecticut and Westchester County in New York, and the

five

Boroughs of New York City. Patriot originates commercial real estate loans, commercial business loans, a variety of consumer loans, and construction loans, and has recently purchased residential loans since

2016.

All commercial and residential real estate loans are collateralized primarily by

first

second

mortgages on real estate. The ability and willingness of borrowers to satisfy their loan obligations is dependent to some degree on the status of the regional economy as well as upon the regional real estate market. Accordingly, the ultimate collectability of a substantial portion of the loan portfolio and the recovery of a substantial portion of any resulting real estate acquired is susceptible to changes in market conditions.

Patriot has established credit policies applicable to each type of lending activity in which it engages and evaluates the creditworthiness of each borrower. Unless extenuating circumstances exist, Patriot limits the extension of credit on commercial real estate loans to

75%

of the market value of the underlying collateral. Patriot’s loan origination policy for multi–family residential real estate is limited to

80%

of the market value of the underlying collateral. In the case of construction loans, the maximum loan-to-value is

75%

of the “as completed” appraised value of the real estate project. Management monitors the appraised value of collateral on an on-going basis and additional collateral is requested when warranted. Real estate is the primary form of collateral, although other forms of collateral do exist and

may

include such assets as accounts receivable, inventory, marketable securities, time deposits, and other business assets.

In connection with the Prime Bank merger in

May 2018

loans were acquired, a subset of these loans was determined to have evidence of credit deterioration at the acquisition date, which was accounted for in accordance with ASC

310

30.

The purchased credit impaired (“PCI”) loans presently maintain a carrying value of

$615,000

as of

December 31, 2018.

The loans were evaluated for impairment through the periodic reforecasting of expected cash flows.

Income is recognized on PCI loans pursuant to ASC Topic

310

30.

A portion of the fair value discount has been ascribed as an accretable yield that is accreted into interest income over the estimated remaining life of the loans. The remaining non-accretable difference represents cash flows

not

expected to be collected.

The table below summarizes the total contractually required principal and interest cash payments, management’s estimate of expected total cash payments and fair value of the loans at acquisition date. Contractually required principal and interest payments have been adjusted for estimated prepayments.

(In thousands)	Acquisition Date

Contractually required principal and interest at acquisition	$	5,816
Contractual cash flows not expected to be collected (nonaccretable discount)		(2,064	)
Expected cash flows at acquisition		3,752
Interest component of expected cash flows (accretable discount)		(1,316	)
Fair value of acquired loans	$	2,436

A summary of changes in the accretable discount for PCI loans for the year ended

December 31, 2018

follows:

(In thousands)	For the Year Ended December 31, 2018

Accretable discount, beginning of period	$	(1,316	)
Accretion		92
Other changes, net		432
Accretable discount, end of period	$	(792	)

The accretion of the accretable discount for PCI loans for the year end

December 31, 2018

was

$92,000.

The table above includes

$887,000

additional expected cash flows at acquisition, and

$887,000

additional accretable discount, both resulting from a revised acquisition date estimate of PCI loans performance.

Risk characteristics of the Company’s portfolio classes include the following:

Commercial Real Estate Loans

In underwriting commercial real estate loans, Patriot evaluates both the prospective borrower’s ability to make timely payments on the loan and the value of the property securing the loans. Repayment of such loans

may

be negatively impacted should the borrower default, the value of the property collateralizing the loan substantially decline, or there are declines in general economic conditions. Where the owner occupies the property, Patriot also evaluates the business’ ability to repay the loan on a timely basis and

may

require personal guarantees, lease assignments, and/or the guarantee of the operating company.

Residential Real Estate Loans

2013,

Patriot discontinued offering primary mortgages on personal residences. Repayment of residential real estate loans

may

be negatively impacted should the borrower have financial difficulties, should there be a significant decline in the value of the property securing the loan, or should there be declines in general economic conditions.

2018

and

2017,

Patriot purchased

$25.6

million and

$73.0

million of residential real estate loans, respectively.

Commercial and Industrial Loans

Patriot’s commercial and industrial loan portfolio consists primarily of commercial business loans and lines of credit to businesses and professionals. These loans are generally for the financing of accounts receivable, purchases of inventory, purchases of new or used equipment, or for other short- or long-term working capital purposes. These loans are generally secured by business assets, but are also occasionally offered on an unsecured basis. In granting these types of loans, Patriot considers the borrower’s cash flow as the primary source of repayment, supported by the value of collateral, if any, and personal guarantees, as applicable. Repayment of commercial and industrial loans

may

be negatively impacted by adverse changes in economic conditions, ineffective management, claims on the borrower’s assets by others that are superior to Patriot’s claims, a loss of demand for the borrower’s products or services, or the death or disability of the borrower or other key management personnel.

Consumer and Other Loans

Patriot offers individual consumers various forms of credit including installment loans, credit cards, overdraft protection, auto loans, and reserve lines of credit. Repayments of such loans are generally dependent on the personal income of the borrower, which

may

be negatively impacted by adverse changes in economic conditions. The Company does

not

place a high emphasis on originating these types of loans.

The Company does

not

have any lending programs commonly referred to as subprime lending. Subprime lending generally targets borrowers with weakened credit histories that are typically characterized by payment delinquencies, previous charge-offs, judgments against the consumer, a history of bankruptcies, or borrowers with questionable repayment capacity as evidenced by low credit scores or high debt-burdened ratios.

During

2018,

$21.4

million education loans were purchased.

education loans were purchased in

2017.

Construction Loans

Construction loans are of a short-term nature, generally of

eighteen

-months or less, that are secured by land intended for commercial, residential, or mixed-use development. Loan proceeds

may

be used for the acquisition of or improvements to the land under development and funds are generally disbursed as phases of construction are completed.

Included in this category are loans to construct single family homes where

contract of sale exists, based upon the experience and financial strength of the builder, the type and location of the property, and other factors. Construction loans tend to be personally guaranteed by the principal(s). Repayment of such loans

may

be negatively impacted by an inability to complete construction, a downturn in the market for new construction, by a significant increase in interest rates, or by decline in general economic conditions.

Construction to Permanent – Commercial Real Estate (“CRE”)

These loans allow a single closing for a construction facility leading to conversion to an amortizing mortgage loan. Construction to permanent loans combine a short-term period similar to a construction loan, generally with a variable rate, and a longer term CRE loan typically

years, resetting every

five

years to the FHLB rate.

Fulfillment of the construction facility typically occurs when events dictate, such as receipt of a certificate of occupancy and property stabilization, which is defined as cash flow sufficient to support a pre-defined minimum debt coverage ratio and other conditions and covenants particular to the loan. Construction facilities are typically variable rate instruments that, upon conversion to an amortizing mortgage loan, reset to a fixed rate instrument that is the greater of the in-force variable rate plus a predetermined spread over a reference rate (e.g., prime) or a minimum interest rate.

SBA Loans:

Patriot originates SBA

(a) loans, on which the SBA has historically provided guarantees of up to

percent of the principal balance. The guaranteed portion of the Company’s SBA loans is generally sold in the secondary market with the nonguaranteed portion held in the portfolio as a loan held for investment. SBA loans are for the purpose of providing working capital, financing the purchase of equipment, inventory or commercial real estate and for other business purposes. Loans are guaranteed by the businesses' major owners. SBA loans are made based primarily on the historical and projected cash flow of the business and secondarily on the underlying collateral provided.

Allowance for Loan and Lease Losses

The following tables summarize the activity in the allowance for loan and lease losses, allocated to segments of the loan portfolio, for each year in the

three

-year period ended

December

31,

2018:

(In thousands)	Commercial Real Estate			Residential Real Estate			Commercial and Industrial			Consumer and Other			Construction			Construction to Permanent - CRE			Unallocated			Total
As of and for the Year ended December 31, 2018
Allowance for loan and lease losses:
December 31, 2017	$	2,212			959			2,023			568			481			54			-			6,297
Charge-offs		-			(2	)		-			(33	)		-			-			-			(35	)
Recoveries		7			2			34			1			-			-			-			44
Provisions (credits)		(353	)		100			1,501			105			(131	)		54			27			1,303
December 31, 2018	$	1,866			1,059			3,558			641			350			108			27			7,609

As of and for the Year ended December 31, 2017
Allowance for loan and lease losses:
December 31, 2016	$	1,853			534			740			641			712			69			126			4,675
Charge-offs		-			-			(265	)		(39	)		-			-			-			(304	)
Recoveries		10			-			2,769			4			-			-			-			2,783
Provisions (credits)		349			425			(1,221	)		(38	)		(231	)		(15	)		(126	)		(857	)
December 31, 2017	$	2,212			959			2,023			568			481			54			-			6,297


As of and for the Year ended December 31, 2016
Allowance for loan and lease losses:
December 31, 2015	$	1,970			740			1,027			677			486			123			219			5,242
Charge-offs		-			(190	)		(2,977	)		(13	)		-			-			-			(3,180	)
Recoveries		80			1			66			2			-			-			-			149
Provisions (credits)		(197	)		(17	)		2,624			(25	)		226			(54	)		(93	)		2,464
December 31, 2016	$	1,853			534			740			641			712			69			126			4,675

The following tables summarize, by loan portfolio segment, the amount of loans receivable evaluated individually and collectively for impairment as of

December

31,

2018

and

2017:

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2018
Allowance for loan and lease losses:
Individually evaluated for impairment	$	-		216		1,299		30		-		-		-		1,545
Collectively evaluated for impairment		1,866		843		2,259		611		350		108		27		6,064
Total allowance for loan and lease losses	$	1,866		1,059		3,558		641		350		108		27		7,609

Loans receivable, gross:
Individually evaluated for impairment	$	4,606		2,302		4,646		864		8,800		-		-		21,218
PCI loans individually evaluated for impairment		-		-		615		-		-		-		-		615
Collectively evaluated for impairment		270,332		154,998		186,591		93,705		37,240		15,677		-		758,543

Total loans receivable, gross	$	274,938		157,300		191,852		94,569		46,040		15,677		-		780,376

(In thousands)	Commercial Real Estate		Residential Real Estate		Commercial and Industrial		Consumer and Other		Construction		Construction to Permanent - CRE		Unallocated		Total
December 31, 2017
Allowance for loan and lease losses:
Individually evaluated for impairment	$	-		-		251		2		-		-		-		253
Collectively evaluated for impairment		2,212		959		1,772		566		481		54		-		6,044
Total allowance for loan and lease losses	$	2,212		959		2,023		568		481		54		-		6,297

Loans receivable, gross:
Individually evaluated for impairment	$	1,977		3,336		748		692		-		-		-		6,753
Collectively evaluated for impairment		297,948		143,041		130,413		87,015		47,619		6,858		-		712,894

Total loans receivable, gross	$	299,925		146,377		131,161		87,707		47,619		6,858		-		719,647

Patriot monitors the credit quality of its loans receivable on an ongoing basis. Credit quality is monitored by reviewing certain indicators, including cash flow from business operations, debt service coverage ratios, loan to value ratios, and credit scores.

Patriot employs a risk rating system as part of the risk assessment of its loan portfolio. At origination, lending officers are required to assign a risk rating to each loan in their portfolio, which is ratified or modified by the Loan Committee to which the loan is submitted for approval. If financial developments occur on a loan in the lending officer’s portfolio of responsibility, the risk rating is reviewed and adjusted, as applicable. In carrying out its oversight responsibilities, the Loan Committee can adjust a risk rating based on available information. In addition, the risk ratings on all commercial loans over

$250,000

are reviewed annually by the Credit Department.

Additionally, Patriot retains an objective and independent

third

-party loan review expert to perform a quarterly analysis of the results of its risk rating process. The quarterly review is based on a randomly selected sample of loans within established parameters (e.g., value, concentration), in order to assess and validate the risk ratings assigned to individual loans. Any changes to the assigned risk ratings, based on the quarterly review, are required to be approved by the Loan Committee.

When assigning a risk rating to a loan, management utilizes the Bank’s internal

eleven

-point risk rating system. An asset is considered “special mention” when it has a potential weakness based on objective evidence, but does

not

currently expose the Company to sufficient risk to warrant classification in

one

of the following categories:

●

Substandard: An asset is classified “substandard” if it is

not

adequately protected by the current net worth and paying capacity of the obligor or the collateral pledged, if any. Substandard assets have well defined weaknesses based on objective evidence and are characterized by the distinct possibility that the Company will sustain some loss, if noted deficiencies are

not

corrected.

●	Doubtful: Assets classified as “doubtful” have all of the weaknesses inherent in those classified as “sub-standard”, with the added characteristic that the identified weaknesses make collection or liquidation-in-full improbable, on the basis of currently existing facts, conditions, and values.

Charge-offs, to reduce the loan to its recoverable value, generally commence after the loan is classified as “doubtful”.

In accordance with Federal Financial Institutions Examination Council published policies establishing uniform criteria for the classification of retail credit based on delinquency status, “Open-end” and “Closed-end” credits are charged-off when

180

days and

120

days delinquent, respectively.

If an account is classified as “Loss”, the full balance of the loan receivable is charged off, regardless of the potential recovery from a sale of the underlying collateral. Any amount that

may

be recovered on the sale of collateral underlying a loan is recognized as a “recovery” in the period in which the collateral is sold.

March 2017,

the Bank reached a settlement agreement with its insurance carrier for a loss recognized in

2016,

related to a single Commercial and Industrial loan, resulting in cash receipts of

$2.8

million, net of related deductibles and other amounts excluded pursuant to the insurance policy.

recovery was received from insurance carrier in

2018.

Loan Portfolio Aging Analysis

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of

December

31,

2018.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2018:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non- accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	423		-		-		423		262,435		262,858		-		262,858
Special mention		-		-		958		958		2,673		3,631		-		3,631
Substandard		170		-		-		170		4,754		4,924		3,525		8,449
		593		-		958		1,551		269,862		271,413		3,525		274,938
Residential Real Estate:
Pass		637		817		-		1,454		151,509		152,963		-		152,963
Special mention		-		-		-		-		850		850		-		850
Substandard		-		-		-		-		1,481		1,481		2,006		3,487
		637		817		-		1,454		153,840		155,294		2,006		157,300
Commercial and Industrial:
Pass		150		853		234		1,237		180,293		181,530		-		181,530
Special mention		-		-		101		101		2,378		2,479		-		2,479
Substandard		-		-		-		-		3,162		3,162		4,681		7,843
		150		853		335		1,338		185,833		187,171		4,681		191,852
Consumer and Other:
Pass		20		-		23		43		94,352		94,395		-		94,395
Substandard		-		-		-		-		-		-		174		174
		20		-		23		43		94,352		94,395		174		94,569
Construction:
Pass		-		1,000		-		1,000		36,240		37,240		-		37,240
Substandard		-		-		-		-		-		-		8,800		8,800
		-		1,000		-		1,000		36,240		37,240		8,800		46,040
Construction to Permanent -CRE:
Pass		-		-		-		-		15,677		15,677		-		15,677
		-		-		-		-		15,677		15,677		-		15,677

Total	$	1,400		2,670		1,316		5,386		755,804		761,190		19,186		780,376

Loans receivable, gross:
Pass	$	1,230		2,670		257		4,157		740,506		744,663		-		744,663
Special mention		-		-		1,059		1,059		5,901		6,960		-		6,960
Substandard		170		-		-		170		9,397		9,567		19,186		28,753
Loans receivable, gross	$	1,400		2,670		1,316		5,386		755,804		761,190		19,186		780,376

The following tables summarize performing and non-performing (i.e., non-accruing) loans receivable by portfolio segment, by aging category, by delinquency status as of

December

31,

2017.

(In thousands)	Performing (Accruing) Loans
As of December 31, 2017:	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Performing Loans		Non-accruing Loans		Loans Receivable Gross
Loan portfolio segment:
Commercial Real Estate:
Pass	$	-		-		-		-		286,428		286,428		-		286,428
Special mention		-		1,121		-		1,121		9,317		10,438		-		10,438
Substandard		-		1,688		-		1,688		1,371		3,059		-		3,059
		-		2,809		-		2,809		297,116		299,925		-		299,925
Residential Real Estate:
Pass		1,068		255		-		1,323		140,497		141,820		-		141,820
Special mention		-		1,529		-		1,529		-		1,529		-		1,529
Substandard		-		-		-		-		-		-		3,028		3,028
		1,068		1,784		-		2,852		140,497		143,349		3,028		146,377
Commercial and Industrial:
Pass		-		2,000		375		2,375		127,057		129,432		-		129,432
Substandard		-		-		981		981		-		981		748		1,729
		-		2,000		1,356		3,356		127,057		130,413		748		131,161
Consumer and Other:
Pass		498		-		-		498		87,207		87,705		-		87,705
Substandard		-		-		-		-		-		-		2		2
		498		-		-		498		87,207		87,705		2		87,707
Construction:
Pass		-		-		-		-		47,619		47,619		-		47,619
Construction to Permanent - CRE:
Pass		-		-		-		-		6,858		6,858		-		6,858

Total	$	1,566		6,593		1,356		9,515		706,354		715,869		3,778		719,647

Loans receivable, gross:
Pass	$	1,566		2,255		375		4,196		695,666		699,862		-		699,862
Special mention		-		2,650		-		2,650		9,317		11,967		-		11,967
Substandard		-		1,688		981		2,669		1,371		4,040		3,778		7,818

Loans receivable, gross	$	1,566		6,593		1,356		9,515		706,354		715,869		3,778		719,647

The following tables summarize non-performing (i.e., non-accruing) loans by aging category and status, within the applicable loan portfolio segment as of

December

31,

2018

and

2017:

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of December 31, 2018:
Loan portfolio segment:
Commercial Real Estate:
Substandard	$	1,580		-		1,945		3,525		-		3,525
Residential Real Estate:
Substandard		-		-		2,006		2,006		-		2,006
Commercial and Industrial:
Substandard		-		15		3,941		3,956		725		4,681
Consumer and Other:
Substandard		-		86		11		97		77		174
Construction:
Substandard		-		-		8,800		8,800		-		8,800
Total non-accruing loans	$	1,580		101		16,703		18,384		802		19,186

(In thousands)	Non-accruing Loans
	30 - 59 Days Past Due		60 - 89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Non-accruing Loans
As of December 31, 2017:
Loan portfolio segment:
Residential Real Estate:
Substandard	$	-		-		3,028		3,028		-		3,028
Commercial and Industrial:
Substandard		-		-		748		748		-		748
Consumer and Other
Substandard		-		-		2		2		-		2
Total non-accruing loans	$	-		-		3,778		3,778		-		3,778

If non-accruing loans had been performing in accordance with the original contractual terms, additional interest income of

$503,000,

$209,000,

and

$79,000

would have been recognized in income for the years ended

December

31,

2018,

2017,

and

2016,

respectively.

Additionally, certain loans for which the borrower cannot demonstrate sufficient cash flow to continue loan payments in the future and certain troubled debt restructurings (“TDRs”) are placed on non-accrual status. During the years ended

December

31,

2018,

2017,

and

2016,

interest income was collected and recognized on non-accruing loans.

The accrual of interest on loans is discontinued at the time the loan is

days past due for payment unless the loan is well-secured and in process of collection. Consumer installment loans are typically charged off

later than

180

days past due. Past due status is based on contractual terms of the loan. In all cases, loans are placed on non-accrual status or charged-off, at an earlier date, if collection of principal or interest is considered doubtful. All interest accrued, but

not

collected for loans that are placed on non-accrual status or charged off, is reversed against interest income. The interest on these loans is accounted for on the cash-basis method until qualifying for return to accrual status. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current, future payments are reasonably assured, and there is

six

months of performance. Management considers all non-accrual loans and troubled debt restructurings to be impaired. In most cases, loan payments that are past due less than

days, based on contractual terms, are considered collection delays and

not

an indication of loan impairment. The Bank considers consumer installment loans to be pools of smaller homogeneous loan balances, which are collectively evaluated for impairment.

Troubled Debt Restructurings (“TDR”)

On a case-by-case basis, Patriot

may

agree to modify the contractual terms of a borrower’s loan to assist customers who

may

be experiencing financial difficulty. If the borrower is experiencing financial difficulties and a concession has been made, the loan is classified as a TDR.

Substantially all TDR loan modifications involve lowering the monthly payments on such loans through either a reduction in interest rate below market rate, an extension of the term of the loan, or a combination of adjusting these

two

contractual attributes. TDR loan modifications

may

result in the forgiveness of principal or accrued interest. In addition, when modifying commercial loans, Patriot frequently obtains additional collateral or guarantor support. If the borrower has performed under the existing contractual terms of the loan and Patriot’s underwriters determine that the borrower has the capacity to continue to perform under the terms of the TDR, the loan continues accruing interest. Non-accruing TDRs

may

be returned to accrual status when there has been a sustained period of performance (generally

six

consecutive months of payments) and both principal and interest are reasonably assured of collection.

The recorded investment in TDRs as of

December 31, 2018

and

2017

were

$2.1

million and

$3.0

million, respectively. All TDRs at

December

31,

2018

and

2017

were performing in accordance with their modified terms and therefore, were on accrual status.

(In thousands)
Loan portfolio segment:	December 31, 2018		December 31, 2017
Commercial Real Estate	$	1,081		1,977
Residential Real Estate		296		309
Consumer and Other		689		690
Total TDR Loans		2,066		2,976
Less: TDRs included in non-accrual loans		-		-
Total accrual TDR Loans	$	2,066		2,976

There were

loans modified as TDRs during the years ended

December

31,

2018,

2017

2016

and

defaults of TDRs during any of the years in the

three

-year period ended

December

31,

2018.

December

31,

2018

and

2017,

there were

commitments to advance additional funds under TDRs.

Impaired Loans

Impaired loans

may

consist of non-accrual loans and/or performing and non-performing TDRs. As of

December

31,

2018

and

2017,

based on the on-going monitoring and analysis of the loan portfolio, impaired loans of

$21.2

million and

$6.8

million were identified, for which

$1.5

million and

$253,000

specific reserves were established, respectively. Loans

not

requiring specific reserves had sufficient collateral values, less costs to sell, supporting the carrying amount of the loans. In some cases, there

may

specific reserves due to the carrying amount of the loan having been charged off. Once a borrower is in default, Patriot is under

obligation to advance additional funds on unused commitments.

December

31,

2018

and

2017,

exposure to the impaired loans was related to

and

borrowers, respectively. In all cases, appraisal reports of the underlying collateral, if any, have been obtained from independent licensed appraisal firms. For non-performing loans, the independently determined appraised values were reduced by an estimate of the costs to sell the assets, in order to estimate the potential loss, if any, that

may

eventually be realized. Performing loans are monitored to determine when, if at all, additional loan loss reserves

may

be required for a loss of underlying collateral value.

In addition, the remaining

$615,000

PCI loans acquired from Prime Bank acquisition; all remaining PCI loans were commercial and industrial loans. The PCI loans were originally recorded at fair value by the Bank on the date of acquisition. At

December 31, 2018,

those loans were considered individually evaluated for impairment, with

allowance recorded.

The following table reflects information about the impaired loans, excluding PCI loans, by class as of

December

31,

2018

and

2017:

(In thousands)	December 31, 2018						December 31, 2017
	Recorded Investment		Principal Outstanding		Related Allowance		Recorded Investment		Principal Outstanding		Related Allowance
With no related allowance recorded:
Commercial Real Estate	$	4,606		5,109		-		1,977		2,425		-
Residential Real Estate		670		703		-		3,336		3,369		-
Commercial and Industrial		488		1,281		-		497		683		-
Consumer and Other		827		867		-		690		818		-
Construction		8,800		8,839		-		-				-
		15,391		16,799		-		6,500		7,295		-

With a related allowance recorded:
Commercial Real Estate		-		-		-		-		-		-
Residential Real Estate		1,632		1,632		216		-		-		-
Commercial and Industrial		4,158		4,208		1,299		251		251		251
Consumer and Other		37		37		30		2		2		2
Construction		-		-		-		-
		5,827		5,877		1,545		253		253		253

Impaired Loans, Total:
Commercial Real Estate		4,606		5,109		-		1,977		2,425		-
Residential Real Estate		2,302		2,335		216		3,336		3,369		-
Commercial and Industrial		4,646		5,489		1,299		748		934		251
Consumer and Other		864		904		30		692		820		2
Construction		8,800		8,839		-		-		-		-
Impaired Loans, Total	$	21,218		22,676		1,545		6,753		7,548		253

For each year in the

three

-year period ended

December

31,

2018,

the average recorded investment in and interest income recognized on impaired loans without and with a related allowance, by loan portfolio segment, was as follows:

(In thousands)	Year ended December 31,
	2018				2017				2016
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Commercial Real Estate	$	3,318		100		5,832		102		6,929		312
Residential Real Estate		3,154		11		2,016		11		4,318		9
Commercial and Industrial		987		-		197		-		265		-
Consumer and Other		750		31		593		22		544		19
Construction		1,354		503		-		-		-		-
		9,563		645		8,638		135		12,056		340
With a related allowance recorded:
Commercial Real Estate		-		-		-		-		65		-
Residential Real Estate		126		-		-		-		-		-
Commercial and Industrial		474		-		243		-		2,138		-
Consumer and Other		9		-		-		-		2		-
Construction		-		-		-		-		-		-
		609		-		243		-		2,205		-
Impaired Loans, Total:
Commercial Real Estate		3,318		100		5,832		102		6,994		312
Residential Real Estate		3,280		11		2,016		11		4,318		9
Commercial and Industrial		1,461		-		440		-		2,403		-
Consumer and Other		759		31		593		22		546		19
Construction		1,354		503		-		-		-		-
Impaired Loans, Total	$	10,172		645		8,881		135		14,261		340