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	%

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

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:

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:

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

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:

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:

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:

The following table presents loans by class modified as troubled debt restructurings that occurred during the year ended December 31, 2019:

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:

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:

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:

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.