	September 30,			December 31,
(In thousands)	2019			2018
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	241,817		$	232,523
Construction		4,241			7,121
Total residential mortgage loans		246,058			239,644

Commercial loans:
Real estate		235,364			212,314
Lines of credit		58,408			44,235
Other commercial and industrial		80,829			63,359
Tax exempt loans		8,183			9,320
Total commercial loans		382,784			329,228

Consumer loans:
Home equity and junior liens		47,512			26,109
Other consumer		49,486			25,424
Total consumer loans		96,998			51,533

Total loans		725,840			620,405
Net deferred loan fees		60			(135	)
Less allowance for loan losses		(8,330	)		(7,306	)
Loans receivable, net	$	717,570		$	612,964

Although the Bank may occasionally 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.

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 September 30, 2019 and December 31, 2018, there were 1,731 loans outstanding with a remaining outstanding carrying value of $30.0 million and 909 loans outstanding with a remaining outstanding carrying value of $13.3 million, respectively. Since the acquisition of these loan pools, a total of 25 loans had cumulative net charge-offs totaling $187,000 with $67,000 in net charge-offs for the nine months ended September 30, 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. The acquired loan pools represent a 100% interest in a total of 86 unsecured consumer loans and 35 commercial and industrial loans. These loans have maturities ranging primarily from four to ten years. At September 30, 2019, there were 85 unsecured consumer loans outstanding with a remaining outstanding carrying value of $4.8 million and 35 commercial and industrial loans outstanding with a remaining outstanding carrying value of $4.9 million. 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 institution, located outside of the Bank’s market area, in August 2019. The acquired loan pools represent 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 institution. At September 30, 2019, there were 383 secured home equity lines of credit outstanding with a remaining outstanding carrying value of $21.3 million. No charge-offs have occurred since the acquisition of these loan pools.

As of September 30, 2019 and December 31, 2018, residential mortgage loans with a carrying value of $136.6 million and $154.9 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 2018 Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 27, 2019 and have not changed. As part of the execution of the Company’s overall balance sheet management strategies, the Bank will acquire participating interests in loans originated by unrelated third parties on a sporadic basis. 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 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 September 30, 2019
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	238,192	$	1,297	$	1,069	$	1,259	$	241,817
Construction		4,241		-		-		-		4,241
Total residential mortgage loans		242,433		1,297		1,069		1,259		246,058
Commercial loans:
Real estate		224,314		7,367		2,787		896		235,364
Lines of credit		56,687		1,339		382		-		58,408
Other commercial and industrial		75,863		3,867		1,050		49		80,829
Tax exempt loans		8,183		-		-		-		8,183
Total commercial loans		365,047		12,573		4,219		945		382,784
Consumer loans:
Home equity and junior liens		46,840		129		234		309		47,512
Other consumer		49,146		206		134		-		49,486
Total consumer loans		95,986		335		368		309		96,998
Total loans	$	703,466	$	14,205	$	5,656	$	2,513	$	725,840

	As of December 31, 2018
			Special
(In thousands)	Pass		Mention		Substandard		Doubtful		Total
Residential mortgage loans:
1-4 family first-lien residential mortgages	$	228,563	$	999	$	1,190	$	1,771	$	232,523
Construction		7,121		-		-		-		7,121
Total residential mortgage loans		235,684		999		1,190		1,771		239,644
Commercial loans:
Real estate		201,997		8,299		1,947		71		212,314
Lines of credit		42,489		1,491		233		22		44,235
Other commercial and industrial		59,344		3,268		612		135		63,359
Tax exempt loans		9,320		-		-		-		9,320
Total commercial loans		313,150		13,058		2,792		228		329,228
Consumer loans:
Home equity and junior liens		25,706		144		173		86		26,109
Other consumer		25,294		95		35		-		25,424
Total consumer loans		51,000		239		208		86		51,533
Total loans	$	599,834	$	14,296	$	4,190	$	2,085	$	620,405

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 September 30, 2019 and December 31, 2018, are detailed in the following tables:

	As of September 30, 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	$	1,591	$	775	$	777	$	3,143	$	238,674	$	241,817
Construction		-		-		-		-		4,241		4,241
Total residential mortgage loans		1,591		775		777		3,143		242,915		246,058
Commercial loans:
Real estate		16		151		2,845		3,012		232,352		235,364
Lines of credit		15		248		392		655		57,753		58,408
Other commercial and industrial		526		415		891		1,832		78,997		80,829
Tax exempt loans		-		-		-		-		8,183		8,183
Total commercial loans		557		814		4,128		5,499		377,285		382,784
Consumer loans:
Home equity and junior liens		391		107		276		774		46,738		47,512
Other consumer		294		115		66		475		49,011		49,486
Total consumer loans		685		222		342		1,249		95,749		96,998
Total loans	$	2,833	$	1,811	$	5,247	$	9,891	$	715,949	$	725,840

	As of December 31, 2018

	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	$	1,507	$	505	$	1,176	$	3,188	$	229,335	$	232,523
Construction		-		-		-		-		7,121		7,121
Total residential mortgage loans		1,507		505		1,176		3,188		236,456		239,644
Commercial loans:
Real estate		4,261		364		323		4,948		207,366		212,314
Lines of credit		1,033		111		22		1,166		43,069		44,235
Other commercial and industrial		814		44		387		1,245		62,114		63,359
Tax exempt loans		-		-		-		-		9,320		9,320
Total commercial loans		6,108		519		732		7,359		321,869		329,228
Consumer loans:
Home equity and junior liens		247		6		35		288		25,821		26,109
Other consumer		226		65		107		398		25,026		25,424
Total consumer loans		473		71		142		686		50,847		51,533
Total loans	$	8,088	$	1,095	$	2,050	$	11,233	$	609,172	$	620,405

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 were modified as TDRs for the three months ended September 30, 2019.

The table below details one loan that was modified as a TDR for the nine months ended September 30, 2019.

The TDR evaluated for impairment, for the nine months ended September 30, 2019, has been classified as a TDR due to economic concessions granted, which consisted of additional funds advanced without associated increases in collateral and an extended maturity date that will result in a delay in payment from the original contractual maturity.

The Company had no loans that were modified as TDRs for the three months ended September 30, 2018.

The table below details one loan that was modified as a TDR for the nine months ended September 30, 2018.

The TDR evaluated for impairment, for the nine months ended September 30, 2018, has been classified as a TDR due to economic concessions granted, which included an extended maturity date that will result in a delay in payment from the original contractual maturity.

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 were modified as TDRs during the twelve months prior to September 30, 2019, which had subsequently defaulted during the nine months ended September 30, 2019.

The Company had no loans that were modified as TDRs during the twelve months prior to September 30, 2018, which had subsequently defaulted during the nine months ended September 30, 2018.

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 table summarizes impaired loan information by portfolio class at the indicated dates:

	September 30, 2019						December 31, 2018
			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	$	1,029	$	1,029	$	-	$	1,221	$	1,226	$	-
Commercial real estate		4,244		4,313		-		2,387		2,448		-
Commercial lines of credit		238		238		-		228		228		-
Other commercial and industrial		584		592		-		451		452		-
Home equity and junior liens		41		41		-		-		-		-
Other consumer		56		56		-		-		-		-

With an allowance recorded:
1-4 family first-lien residential mortgages		587		587		98		606		606		108
Commercial real estate		451		451		77		486		486		100
Commercial lines of credit		110		110		110		28		28		28
Other commercial and industrial		531		531		339		373		373		255
Home equity and junior liens		179		179		152		207		207		140
Other consumer		37		37		3		-		-		-
Total:
1-4 family first-lien residential mortgages		1,616		1,616		98		1,827		1,832		108
Commercial real estate		4,695		4,764		77		2,873		2,934		100
Commercial lines of credit		348		348		110		256		256		28
Other commercial and industrial		1,115		1,123		339		824		825		255
Home equity and junior liens		220		220		152		207		207		140
Other consumer		93		93		3		-		-		-
Totals	$	8,087	$	8,164	$	779	$	5,987	$	6,054	$	631

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: