	March 31,			December 31,
(In thousands)	2020			2019
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	212,149		$	209,559
Construction		2,338			3,963
Loans held-for-sale ⁽¹⁾		150			35,790
Total residential mortgage loans		214,637			249,312

Commercial loans:
Real estate		261,929			254,257
Lines of credit		59,354			58,617
Other commercial and industrial		84,774			82,092
Tax exempt loans		7,937			8,067
Total commercial loans		413,994			403,033

Consumer loans:
Home equity and junior liens		44,732			46,389
Other consumer		76,839			82,607
Total consumer loans		121,571			128,996

Total loans		750,202			781,341
Net deferred loan fees		320			110
Less allowance for loan losses		(9,606	)		(8,669	)
Loans receivable, net	$	740,916		$	772,782

(1)

Based on ASC 948, Mortgage Banking, loans shall be classified as held-for-sale once a decision has been made to sell the loans and shall be transferred to the held-for-sale category at lower of cost or fair value. At March 31, 2020, the loans under contract to be sold had a principal balance of $151,000 and net deferred fees of $76. These loans were transferred at their fair value of $150,000 as of March 31, 2020 as the fair value of these loans was less than the amortized cost. During the three months ended March 31, 2020, the loss recorded on the write-down of the loan held-for-sale was immaterial. At December 31, 2019 the loans under contract to be sold had a principal balance of $35.8 million and net deferred fees of $146,000. These loans were transferred at their amortized cost of $35.9 million as of December 31, 2019, as the fair value of these loans was greater than the amortized cost.

Although the Bank may sometimes purchase or fund loan participation interests outside of its primary market areas, the Bank generally originates residential mortgage, commercial, and consumer loans largely to customers throughout Oswego and Onondaga counties. Although the Bank has a diversified loan portfolio, a substantial portion of its borrowers’ abilities to honor their loan contracts is dependent upon the counties’ employment and economic conditions.

As part of the Company’s overall balance sheet management strategies and the management’s ongoing efforts to profitably deploy its increased capital position following the equity sales transactions completed in May 2019, the Bank acquired seven diverse pools of loans, originated by unrelated third parties, in six separate transactions during 2019. The purchase of participations in loans that are originated by third parties only occurs after the completion of thorough pre-acquisition due diligence. Loans in which the Company acquires a participating interest are determined to meet, in all material respects, the Company’s internal underwriting policies, including credit and collateral suitability thresholds, prior to acquisition. In addition, the financial condition of the originating entity, which are generally retained as the ongoing loan servicing provider for participations acquired by the Bank, are analyzed prior to the acquisition of the participating interests and monitored on a regular basis thereafter for the life of those interests.

The Bank acquired $15.6 million, $10.2 million, and $24.6 million of loans originated by an unrelated financial institution, located outside of the Bank’s market area, in January 2017, April 2017, and March 2019, respectively. The acquired loan pools represented a 90% participating interest in a total of 2,283 loans secured by liens on automobiles with maturities ranging primarily from two to six years. These loans will be serviced through their respective maturities by the originating financial institution. At March 31, 2020 and December 31, 2019, there were 1,573 loans outstanding with a remaining outstanding carrying value of $24.9 million and 1,657 loans outstanding with a remaining outstanding carrying value of $27.2 million, respectively. The unamortized premium included in the carrying value at March 31, 2020 and December 31, 2019 was $833,000 and $930,000, respectively. Since the acquisition of these loan pools, a total of 32 loans had cumulative net charge-offs totaling $204,000, with $8,000 in net-charge-offs for the three months ended March 31, 2020 and $37,000 in net charge-offs for the three months ended March 31, 2019.

The Bank acquired a $5.0 million pool of consumer loans and a $5.0 million pool of commercial and industrial loans originated by an unrelated financial institution, located outside of the Bank’s market area, in June 2019. In December 2019, the Bank acquired an additional $1.8 million in commercial and industrial loans and $392,000 of consumer loans from the same institution. The acquired loan pools represented a 100% interest in a total of 89 unsecured consumer loans and a total of 43 commercial and industrial loans. These loans have maturities ranging primarily from four to ten years. At March 31, 2020, there were 85 unsecured consumer loans outstanding with a remaining outstanding carrying value of $4.7 million and 43 commercial and industrial loans outstanding with a remaining outstanding carrying value of $6.4 million. At December 31, 2019, there were 87 unsecured consumer loans outstanding with a remaining outstanding carrying value of $5.0 million and 43 commercial and industrial loans outstanding with a remaining outstanding carrying value of $6.6 million. These loans have no unamortized premium or discount included in the carrying value. No charge-offs have occurred since the acquisition of these loan pools.

The Bank acquired a $21.9 million pool of home equity lines of credit originated by an unrelated financial technology company, located outside of the Bank’s market area, in August 2019. The acquired loan pool represented a 100% interest in a total of 395 secured home equity lines of credit. These lines of credit have maturities ranging primarily from four to thirty years. These lines of credit will be serviced through their respective maturities by the originating financial technology company. At March 31, 2020 and December 31, 2019, there were 355 secured home equity lines of credit outstanding with a remaining outstanding carrying value of $18.8 million and there were 376 secured home equity lines of credit outstanding with a remaining outstanding carrying value of $20.1 million, respectively. The unamortized premium included in the carrying value at March 31, 2020 and December 31, 2019 was $368,000 and $390,000, respectively. No charge-offs have occurred since the acquisition of these loan pools.

The Bank acquired a $26.6 million pool of unsecured consumer loans originated by an unrelated financial technology company, located outside of the Bank’s market area, in November 2019. The acquired loan pool represents a 59.2% interest in a total of 2,787 unsecured consumer loans. These loans have maturities ranging primarily from three to five years. These loans will be serviced through their respective maturities by the originating unrelated financial technology company. At March 31, 2020 and December 31, 2019, there were 2,754 unsecured consumer loans outstanding with a remaining outstanding carrying value of $23.7 million and 2,768 unsecured consumer loans outstanding with a remaining outstanding carrying value of $25.8 million, respectively. The unamortized premium included in the carrying value at March 31, 2020 and December 31, 2019 was $100,000 and $114,000, respectively. Since the acquisition of theses loan pools, a total of one loan had a cumulative net charge-off totaling $19,000, with $19,000 in net charge-offs for the three months ended March 31, 2020.

The Bank acquired a $10.3 million pool of unsecured consumer loans originated by an unrelated financial technology company, located outside of the Bank’s market area, in December 2019. The acquired loan pool represents a 100% interest in a total of 4,259 unsecured consumer loans. These loans have maturities ranging primarily from less than one year to seven years. These loans will be serviced through their respective maturities by the originating unrelated financial technology company. At March 31, 2020 and December 31, 2019, there were 3,936 unsecured consumer loans outstanding with a remaining outstanding carrying value of $8.8 million and 4,259 unsecured consumer loans outstanding with a remaining outstanding carrying value of $10.3 million, respectively. The unamortized premium included in the carrying value at March 31, 2020 and December 31, 2019 was $213,000 and $245,000, respectively. No charge-offs have occurred since the acquisition of these loan pools.

The Bank acquired a $2.1 million pool of secured first lien residential mortgage loans originated by an unrelated non-profit housing and community development organization, located within the Bank’s market area, in December 2019. The acquired loan pool represents a 100% interest in a total of 25 secured first lien residential mortgage loans. These loans have maturities ranging primarily from 22 to 24 years. These loans will be serviced through their respective maturities by the unrelated non-profit housing and community development organization. At March 31, 2020 and December 31, 2019, there were 25 residential mortgage loans outstanding with a remaining outstanding carrying value of $2.0 million and 25 residential mortgage loans outstanding with a remaining outstanding carrying value of $2.1 million, respectively. The unamortized premium included in the carrying value at March 31, 2020 and December 31, 2019, was $133,000 and $135,000, respectively. No charge-offs have occurred since the acquisition of these loan pools.

As of March 31, 2020 and December 31, 2019, residential mortgage loans with a carrying value of $110.3 million and $136.9 million, respectively, have been pledged by the Company to the Federal Home Loan Bank of New York (“FHLBNY”) under a blanket collateral agreement to secure the Company’s line of credit and term borrowings.

The Company’s lending policies and procedures are presented in Note 5 to the audited consolidated financial statements included in the 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 23, 2020 and have not changed. . Loans in which the Company acquires a participating interest are determined to meet, in all material respects, the Company’s internal underwriting policies, including credit and collateral suitability thresholds, prior to acquisition. In addition, the financial condition of the originating financial institutions, which are generally retained as the ongoing loan servicing provider for participations acquired by the Bank, are analyzed prior to the acquisition of the participating interests and monitored on a regular basis thereafter for the life of those interests.

To develop and document a systematic methodology for determining the allowance for loan losses, the Company has divided the loan portfolio into three portfolio segments, each with different risk characteristics but with similar methodologies for assessing risk. Each portfolio segment is broken down into loan classes where appropriate. Loan classes contain unique measurement attributes, risk characteristics, and methods for monitoring and assessing risk that are necessary to develop the allowance for loan losses. Unique characteristics such as borrower type, loan type, collateral type, and risk characteristics define each class.

The following table illustrates the portfolio segments and classes for the Company’s loan portfolio:

The following tables present the classes of the loan portfolio, not including net deferred loan costs, summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company's internal risk rating system as of the dates indicated:

	As of March 31, 2020
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	208,451	$	1,037	$	1,473	$	1,188	$	212,149
Construction		2,338		-		-		-		2,338
Loans held-for-sale		150		-		-		-		150
Total residential mortgage loans		210,939		1,037		1,473		1,188		214,637
Commercial loans:
Real estate		245,927		12,523		2,771		708		261,929
Lines of credit		51,845		7,207		302		-		59,354
Other commercial and industrial		75,475		8,367		891		41		84,774
Tax exempt loans		7,937		-		-		-		7,937
Total commercial loans		381,184		28,097		3,964		749		413,994
Consumer loans:
Home equity and junior liens		43,844		159		454		275		44,732
Other consumer		76,489		174		176		-		76,839
Total consumer loans		120,333		333		630		275		121,571
Total loans	$	712,456	$	29,467	$	6,067	$	2,212	$	750,202

	As of December 31, 2019
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	205,554	$	1,093	$	1,731	$	1,181	$	209,559
Construction		3,963		-		-		-		3,963
Loans held-for-sale		35,790		-		-		-		35,790
Total residential mortgage loans		245,307		1,093		1,731		1,181		249,312
Commercial loans:
Real estate		238,288		12,473		3,194		302		254,257
Lines of credit		50,396		7,945		276		-		58,617
Other commercial and industrial		72,653		8,473		923		43		82,092
Tax exempt loans		8,067		-		-		-		8,067
Total commercial loans		369,404		28,891		4,393		345		403,033
Consumer loans:
Home equity and junior liens		45,414		191		477		307		46,389
Other consumer		82,252		167		188		-		82,607
Total consumer loans		127,666		358		665		307		128,996
Total loans	$	742,377	$	30,342	$	6,789	$	1,833	$	781,341

Management has reviewed its loan portfolio and determined that, to the best of its knowledge, no material exposure exists to sub-prime or other high-risk residential mortgages. The Company is not in the practice of originating these types of loans.

Loans are placed on nonaccrual when the contractual payment of principal and interest has become 90 days past due or management has serious doubts about further collectability of principal or interest, even though the loan may be currently performing.

Loans are considered past due if the required principal and interest payments have not been received within thirty days of the payment due date.

An age analysis of past due loans, not including net deferred loan costs, segregated by portfolio segment and class of loans, as of March 31, 2020 and December 31, 2019, are detailed in the following tables:

	As of March 31, 2020

	30-59 Days		60-89 Days		90 Days		Total				Total Loans
(In thousands)	Past Due		Past Due		and Over		Past Due		Current		Receivable
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	1,569	$	600	$	1,040	$	3,209	$	208,940	$	212,149
Construction		-		-		-		-		2,338		2,338
Loans held-for-sale		-		-		-		-		150		150
Total residential mortgage loans		1,569		600		1,040		3,209		211,428		214,637
Commercial loans:
Real estate		5,829		-		2,268		8,097		253,832		261,929
Lines of credit		2,838		1,967		111		4,916		54,438		59,354
Other commercial and industrial		1,388		3,738		232		5,358		79,416		84,774
Tax exempt loans		-		-		-		-		7,937		7,937
Total commercial loans		10,055		5,705		2,611		18,371		395,623		413,994
Consumer loans:
Home equity and junior liens		147		72		429		648		44,084		44,732
Other consumer		243		164		228		635		76,204		76,839
Total consumer loans		390		236		657		1,283		120,288		121,571
Total loans	$	12,014	$	6,541	$	4,308	$	22,863	$	727,339	$	750,202

	As of December 31, 2019

	30-59 Days		60-89 Days		90 Days		Total				Total Loans
(In thousands)	Past Due		Past Due		and Over		Past Due		Current		Receivable
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	947	$	744	$	1,613	$	3,304	$	206,255	$	209,559
Construction		-		-		-		-		3,963		3,963
Loans held-for-sale		-		-		-		-		35,790		35,790
Total residential mortgage loans		947		744		1,613		3,304		246,008		249,312
Commercial loans:
Real estate		953		100		2,271		3,324		250,933		254,257
Lines of credit		4,464		25		68		4,557		54,060		58,617
Other commercial and industrial		2,747		315		591		3,653		78,439		82,092
Tax exempt loans		-		-		-		-		8,067		8,067
Total commercial loans		8,164		440		2,930		11,534		391,499		403,033
Consumer loans:
Home equity and junior liens		315		130		480		925		45,464		46,389
Other consumer		335		50		151		536		82,071		82,607
Total consumer loans		650		180		631		1,461		127,535		128,996
Total loans	$	9,761	$	1,364	$	5,174	$	16,299	$	765,042	$	781,341

The Company is required to disclose certain activities related to Troubled Debt Restructurings (“TDR”) in accordance with accounting guidance. Certain loans have been modified in a TDR where economic concessions have been granted to a borrower who is experiencing, or expected to experience, financial difficulties. These economic concessions could include a reduction in the loan interest rate, extension of payment terms, reduction of principal amortization, or other actions that it would not otherwise consider for a new loan with similar risk characteristics.

The Company is required to disclose new TDRs for each reporting period for which an income statement is being presented. The pre-modification outstanding recorded investment is the principal loan balance less the provision for loan losses before the loan was modified as a TDR. The post-modification outstanding recorded investment is the principal balance less the provision for loan losses after the loan was modified as a TDR. Additional provision for loan losses is the change in the allowance for loan losses between the pre-modification outstanding recorded investment and post-modification outstanding recorded investment.

The Company had no loans that have been modified as TDRs for the three months ended March 31, 2020.

The Company had no loans that have been modified as TDRs for the three months ended March 31, 2019.

The Company is required to disclose loans that have been modified as TDRs within the previous 12 months in which there was payment default after the restructuring. The Company defines payment default as any loans 90 days past due on contractual payments.

The Company had no loans that had been modified as TDRs during the twelve months prior to March 31, 2020, which had subsequently defaulted during the three months ended March 31, 2020.

The Company had no loans that had been modified as TDRs during the twelve months prior to March 31, 2019, which had subsequently defaulted during the three months ended March 31, 2019.

The United States has been operating under a state of emergency related to the Coronavirus Disease 2019 (“COVID-19”) pandemic since March 13, 2020. The direct and indirect effects of the COVID-19 pandemic have resulted in a dramatic reduction in economic activity that has severely hampered the ability for businesses and consumers to meet their current repayment obligations. The Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), signed into law on March 27, 2020, in addition to providing financial assistance to both businesses and consumers, creates a forbearance program for federally-backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the national emergency, and provides financial institutions the option to temporarily suspend certain requirements under GAAP related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19. The banking regulatory agencies have likewise issued guidance encouraging financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual payment obligations because of the effects of COVID-19. That guidance, with concurrence of the Financial Accounting Standards Board, and provisions of the CARES Act allow modifications made on a good faith basis in response to COVID-19 to borrowers who were generally current with their payments prior to any relief, to not be treated as troubled debt restructurings. Modifications may include payment deferrals, fee waivers, extensions of repayment term, or other delays in payment. The Company has begun working with its customers affected by COVID-19 and expects a significant amount of modifications across many of its loan portfolios in the near term. Through May 15, 2020, the Bank granted payment deferral requests primarily for 90 days, on 540 loans representing approximately $142.9 million of existing loan balances. To the extent that such modifications meet the criteria previously described, such modifications are not expected to be classified as troubled debt restructurings.

When the Company modifies a loan within a portfolio segment that is individually evaluated for impairment, a potential impairment is analyzed either based on the present value of the expected future cash flows discounted at the interest rate of the original loan terms or the fair value of the collateral less costs to sell. If it is determined that the value of the loan is less than its recorded investment, then impairment is recognized as a component of the provision for loan losses, an associated increase to the allowance for loan losses or as a charge-off to the allowance for loan losses in the current period.

The following tables summarize impaired loan information by portfolio class at the indicated dates:

	March 31, 2020						December 31, 2019
			Unpaid						Unpaid
	Recorded		Principal		Related		Recorded		Principal		Related
(In thousands)	Investment		Balance		Allowance		Investment		Balance		Allowance
With no related allowance recorded:
1-4 family first-lien residential mortgages	$	1,023	$	1,023	$	-	$	1,027	$	1,027	$	-
Commercial real estate		3,979		4,052		-		3,996		4,067		-
Commercial lines of credit		83		83		-		86		86		-
Other commercial and industrial		336		355		-		69		77		-
Home equity and junior liens		77		77		-		40		40		-
Other consumer		55		55		-		55		55		-

With an allowance recorded:
1-4 family first-lien residential mortgages		581		581		95		584		584		97
Commercial real estate		448		448		76		450		450		78
Commercial lines of credit		98		98		98		98		98		98
Other commercial and industrial		545		545		379		866		866		406
Home equity and junior liens		142		142		128		180		180		150
Other consumer		35		35		1		36		36		1
Total:
1-4 family first-lien residential mortgages		1,604		1,604		95		1,611		1,611		97
Commercial real estate		4,427		4,500		76		4,446		4,517		78
Commercial lines of credit		181		181		98		184		184		98
Other commercial and industrial		881		900		379		935		943		406
Home equity and junior liens		219		219		128		220		220		150
Other consumer		90		90		1		91		91		1
Totals	$	7,402	$	7,494	$	777	$	7,487	$	7,566	$	830

The following table presents the average recorded investment in impaired loans for the periods indicated:

The following table presents the cash basis interest income recognized on impaired loans for the periods indicated: