As of December 31, 2021, the Company had $1.48 billion in loans receivable outstanding. Loans held for sale was zero at December 31, 2021. Outstanding balances include a total net increase of $1.7 million and a net decrease of $0.4 million at December 31, 2021 and 2020 for unearned income, net deferred loan fees, and unamortized discounts and premiums. The portfolios of loans receivable at December 31, 2021, and December 31, 2020, consist of the following:


	December 31, 2021		December 31, 2020
	(Dollars in thousands)
Commercial and Industrial	$	57,151	$	121,808
Construction	154,077		211,013
Real Estate Mortgage:
Commercial – Owner Occupied	123,672		132,207
Commercial – Non-owner Occupied	306,486		324,840
Residential – 1 to 4 Family	750,525		670,827
Residential – Multifamily	84,964		94,748
Consumer	7,972		10,364
Total Loans	$	1,484,847	$	1,565,807


December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current		Total Loans		Loans > 90 Days and Accruing
	(Dollars in thousands)
Commercial and Industrial	$	—	$	349	$	224	$	573	$	56,578	$	57,151	$	—
Construction	—		—		1,139		1,139		152,938		154,077		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		—		2,170		2,170		121,502		123,672		—
Commercial – Non-owner Occupied	—		—		242		242		306,244		306,486		—
Residential – 1 to 4 Family	81		—		533		614		749,911		750,525		—
Residential – Multifamily	—		—		—		—		84,964		84,964		—
Consumer	—		—		—		—		7,972		7,972		—
Total Loans	$	81	$	349	$	4,308	$	4,738	$	1,480,109	$	1,484,847	$	—


December 31, 2020	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current		Total Loans		Loans > 90 Days and Accruing
	(Dollars in thousands)
Commercial and Industrial	$	—	$	—	$	50	$	50	$	121,758	$	121,808	$	—
Construction	—		—		1,365		1,365		209,648		211,013		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		1,171		5,521		6,692		125,515		132,207		—
Commercial – Non-owner Occupied	—		872		69		941		323,899		324,840		—
Residential – 1 to 4 Family	—		662		1,669		2,331		668,496		670,827		—
Residential – Multifamily	—		—		—		—		94,748		94,748		—
Consumer	45		—		55		100		10,264		10,364		—
Total Loans	$	45	$	2,705	$	8,729	$	11,479	$	1,554,328	$	1,565,807	$	—

We maintain the ALLL at a level that we believe to be appropriate to absorb estimated probable credit losses incurred in the loan portfolios as of the balance sheet date. The Company’s accounting policy for ALLL is more fully described in Note 1 - Description of Business and Summary of Significant Accounting Policies.


	Twelve Months Ended December 31, 2021
As of December 31, 2021					Real Estate Mortgage
(Dollars in thousands)	Commercial and Industrial		Construction		Commercial Owner Occupied		Commercial Non-owner Occupied		Residential 1 to 4 Family		Residential Multifamily		Consumer		Total
December 31, 2020	$	492	$	3,359	$	3,078	$	8,398	$	12,595	$	1,639	$	137	$	29,698
Charge-offs	—		(226)		(152)		—		(49)		—		—		(427)
Recoveries	18		—		52		4		—		—		—		74
Provisions (credit)	(93)		(471)		19		(926)		2,424		(424)		(29)		500
Ending Balance December 31 2021	$	417	$	2,662	$	2,997	$	7,476	$	14,970	$	1,215	$	108	$	29,845

Allowance for loan losses
Individually evaluated for impairment	$	8	$	300	$	5	$	218	$	60	$	—	$	—	$	591
Collectively evaluated for impairment	409		2,362		2,992		7,258		14,910		1,215		108		29,254
Balance at December 31, 2021	$	417	$	2,662	$	2,997	$	7,476	$	14,970	$	1,215	$	108	$	29,845

Loans
Individually evaluated for impairment	$	224	$	1,139	$	2,369	$	5,577	$	993	$	—	$	—	$	10,302
Collectively evaluated for impairment	56,927		152,938		121,303		300,909		749,532		84,964		7,972		1,474,545
Balance at December 31, 2021	$	57,151	$	154,077	$	123,672	$	306,486	$	750,525	$	84,964	$	7,972	$	1,484,847


	Twelve Months Ended December 31, 2020
As of December 31, 2020					Real Estate Mortgage
(Dollars in thousands)	Commercial and Industrial		Construction		Commercial Owner Occupied		Commercial Non-owner Occupied		Residential 1 to 4 Family		Residential Multifamily		Consumer		Total
December 31, 2019	$	964	$	2,807	$	2,023	$	5,860	$	9,151	$	819	$	187	$	21,811
Charge-offs	—		—		—		—		(59)		—		—		(59)
Recoveries	23		—		11		266		—		—		—		300
Provisions	(495)		552		1,044		2,272		3,503		820		(50)		7,646
Ending Balance December 31 2020	$	492	$	3,359	$	3,078	$	8,398	$	12,595	$	1,639	$	137	$	29,698

Allowance for loan losses
Individually evaluated for impairment	$	12	$	301	$	200	$	350	$	141	$	—	$	—	$	1,004
Collectively evaluated for impairment	480		3,058		2,878		8,048		12,454		1,639		137		28,694
Balance at December 31, 2020	$	492	$	3,359	$	3,078	$	8,398	$	12,595	$	1,639	$	137	$	29,698

Loans
Individually evaluated for impairment	$	49	$	4,840	$	5,735	$	10,109	$	1,875	$	—	$	55	$	22,663
Collectively evaluated for impairment	121,759		206,173		126,472		314,731		668,952		94,748		10,309		1,543,144
Balance at December 31, 2020	$	121,808	$	211,013	$	132,207	$	324,840	$	670,827	$	94,748	$	10,364	$	1,565,807

A loan is considered impaired when, based on the current information and events, it is probable that the Company will be unable to collect the payments of principal and interest as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when a loan is 90 days past due, unless the loan is well secured and in the process of collection, as required by regulatory provisions. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

All our impaired loans are assessed for recoverability based on an independent third-party full appraisal to determine the net realizable value (“NRV”) based on the fair value of the underlying collateral, less cost to sell and other costs or the present value of discounted cash flows in the case of certain impaired loans that are not collateral dependent.


December 31, 2021	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
With no related allowance recorded:
Commercial and Industrial	$	216	$	216	$	—
Construction	—		—		—
Real Estate Mortgage:
Commercial – Owner Occupied	2,170		2,170		—
Commercial – Non-owner Occupied	242		242		—
Residential – 1 to 4 Family	465		599		—
Residential – Multifamily	—		—		—
Consumer	—		—		—
	3,093		3,227		—
With an allowance recorded:
Commercial and Industrial	8		16		8
Construction	1,139		5,856		300
Real Estate Mortgage:
Commercial – Owner Occupied	199		199		5
Commercial – Non-owner Occupied	5,335		5,335		218
Residential – 1 to 4 Family	528		528		60
Residential – Multifamily	—		—		—
Consumer	—		—		—
	7,209		11,934		591
Total:
Commercial and Industrial	224		232		8
Construction	1,139		5,856		300
Real Estate Mortgage:
Commercial – Owner Occupied	2,369		2,369		5
Commercial – Non-owner Occupied	5,577		5,577		218
Residential – 1 to 4 Family	993		1,127		60
Residential – Multifamily	—		—		—
Consumer	—		—		—
	$	10,302	$	15,161	$	591


	Year Ended December 31,
	2021				2020
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
Commercial and Industrial	$	48	$	1	$	234	$	7
Commercial	1,275		—		4,984		157
Real Estate Mortgage:
Commercial – Owner Occupied	2,378		13		6,080		47
Commercial – Non-owner Occupied	5,644		365		10,263		472
Residential – 1 to 4 Family	937		28		2,226		105
Residential – Multifamily	—		—		—		2
Consumer	—		—		11		—
Total	$	10,282	$	407	$	23,798	$	790

We reported performing TDR loans (not reported as non-accrual loans) of $6.0 million and $13.9 million, respectively, at December 31, 2021 and December 31, 2020. Non-performing TDRs were zero and $274,000 at December 31, 2021 and December 31, 2020. There were no new loans modified as a TDR and no additional commitments to lend additional funds to debtors whose loans have been modified in TDRs for the year ended December 31, 2021 and the year ended December 31, 2020, respectively.

A TDR is a loan the terms of which have been restructured in a manner that grants a concession to a borrower experiencing financial difficulty. TDRs result from our loss mitigation activities that include rate reductions, extension of maturity, or a combination of both, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. TDRs are classified as impaired loans and are included in the impaired loan disclosures. TDRs are also evaluated to determine whether they should be placed on non-accrual status. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is repaid in full, foreclosed, sold or it meets the criteria to be removed from TDR status.

TDRs are generally included in nonaccrual loans and may return to performing status after a minimum of six consecutive monthly payments under restructured terms and also meeting other performance indicators. We review the financial performance of the borrower over the past year to be reasonably assured of repayment and performance according to the modified terms. This review consists of an analysis of the borrower’s historical results; the borrower’s projected results over the next four quarters; and current financial information of the borrower and any guarantors. The projected repayment source needs to be reliable, verifiable, quantifiable and sustainable. At the time of restructuring, the amount of the loan principal for which we are not reasonably assured of repayment is charged-off, but not forgiven.

All TDRs are also reviewed quarterly to determine the amount of any impairment. The nature and extent of impairment of TDRs, including those that have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses. For the TDR loans, we had specific reserves of $254,000 and $420,000 in the allowance at December 31, 2021 and December 31, 2020, respectively. Some loan modifications classified as TDRs may not ultimately result in the full collection of principal and interest, as modified, and result in potential incremental losses. These potential incremental losses have been factored into our overall allowance for loan losses estimate.

On March 22, 2020, the federal bank regulatory agencies issued the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus,” which encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of COVID-19. Additionally, Section 4013 of the CARES Act provided that a qualified loan modification is exempt by law from classification as a troubled debt restructuring (“TDR”) as defined by generally accepted accounting principles, from the period beginning March 1, 2020 until the earlier of December 31, 2020 or the date that is 60 days after the date on which the national emergency concerning the COVID-19 pandemic declared by the President of the United States terminates. The CAA extended this relief to the earlier of January 1, 2022 or the first day of a bank’s fiscal year that begins after the national emergency ends. In accordance with the CARES Act’s TDR relief provisions, as extended by the CAA, the Bank will not classify qualified loan modifications made through the end of 2021 as TDRs.

As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit quality indicators including trends related to the risk grades of loans, the level of classified loans, net charge-offs, nonperforming loans (see details above) and the general economic conditions in the region.

The Company utilizes a risk grading matrix to assign a risk grade to each of its loans. Loans are graded on a scale of 1 to 7. Grades 1 through 4 are considered “Pass”. A description of the general characteristics of the seven risk grades is as follows:

4.Watch List: Borrower reflects a fair financial condition, but there exists an overall greater than average risk. Risk is deemed acceptable by virtue of increased monitoring and control over borrowings. Probability of timely repayment is present.

5.Other Assets Especially Mentioned (OAEM): Financial condition is such that assets in this category have a potential weakness or pose unwarranted financial risk to the Bank even though the asset value is not currently impaired. The asset does not currently warrant adverse classification but if not corrected could weaken and could create future increased risk exposure. Includes loans which require an increased degree of monitoring or servicing as a result of internal or external changes.

6.Substandard: This classification represents more severe cases of #5 (OAEM) characteristics that require increased monitoring. Assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral. Asset has a well-defined weakness or weaknesses that impairs the ability to repay debt and jeopardizes the timely liquidation or realization of the collateral at the asset’s net book value.

7.Doubtful: Assets which have all the weaknesses inherent in those assets classified #6 (Substandard) but the risks are more severe relative to financial deterioration in capital and/or asset value; accounting/evaluation techniques may be questionable and the overall possibility for collection in full is highly improbable. Borrowers in this category require constant monitoring, are considered work out loans and present the potential for future loss to the Bank.


At December 31, 2021	Pass		OAEM		Substandard		Doubtful		Total
	(Dollars in thousands)
Commercial and Industrial	$	56,927	$	—	$	224	$	—	$	57,151
Construction	152,938		—		1,139		—		154,077
Real Estate Mortgage:
Commercial – Owner Occupied	118,473		3,029		2,170		—		123,672
Commercial – Non-owner Occupied	291,864		14,380		242		—		306,486
Residential – 1 to 4 Family	749,904		—		621		—		750,525
Residential – Multifamily	84,964		—		—		—		84,964
Consumer	7,972		—		—		—		7,972
Total	$	1,463,042	$	17,409	$	4,396	$	—	$	1,484,847


At December 31, 2020	Pass		OAEM		Substandard		Doubtful		Total
	(Dollars in thousands)
Commercial and Industrial	$	121,715	$	43	$	50	$	—	$	121,808
Construction:	209,648		—		1,365		—		211,013
Real Estate Mortgage:
Commercial – Owner Occupied	123,657		3,029		5,521		—		132,207
Commercial – Non-owner Occupied	324,649		—		191		—		324,840
Residential – 1 to 4 Family	668,593		462		1,772		—		670,827
Residential – Multifamily	94,748		—		—		—		94,748
Consumer	10,309		—		55		—		10,364
Total	$	1,553,319	$	3,534	$	8,954	$	—	$	1,565,807

Loans to Related Parties: In the normal course of business, the Company has granted loans to its executive officers, directors and their affiliates (related parties). All loans to related parties were made in the ordinary course of business; were made on substantially the same terms, including interest rates and collateral, as those prevailing at the same time for comparable loans with persons not related to the Bank; and did not involve more than the normal risk of collectability or present other unfavorable features.

Pledged Loans: At December 31, 2021 and 2020, approximately $751.1 million and $703.5 million, respectively, of unpaid principal balance of loans were pledged to the FHLBNY on borrowings (Note 7). This pledge consists of a blanket lien on residential mortgages and certain qualifying commercial real estate loans.