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Loans and Allowance for Credit Losses on Loans
 12 Months Ended
Dec. 31, 2020
Receivables [Abstract]  
Loans and Allowance for Credit Losses on Loans LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS
The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:
December 31,
(In thousands)20202019
Commercial Loans:
Commercial real estate(1)
$1,369,470 $1,243,397 
Commercial381,494 442,701 
SBA PPP135,095 — 
Total commercial loans1,886,059 1,686,098 
Retail Loans:
Residential real estate1,054,798 1,070,374 
Home equity258,573 312,779 
Consumer20,392 25,772 
Total retail loans1,333,763 1,408,925 
Total loans$3,219,822 $3,095,023 
(1)    Commercial real estate was segmented into non owner-occupied properties and owner-occupied properties upon adoption of CECL, effective January 1, 2020. At December 31, 2020, total commercial real estate - non owner-occupied loans and owner-occupied loans were $1.1 billion and $271.5 million, respectively.
The loan balances for each portfolio segment presented above are net of their respective net unamortized fair value mark discount on acquired loans and net unamortized loan origination costs for the dates indicated:
December 31,
(In thousands)20202019
Net unamortized fair value mark discount on acquired loans$(1,291)$(2,593)
Net unamortized loan origination costs(1)
856 3,111 
Total$(435)$518 
(1)     The decrease in net unamortized loan origination costs from December 31, 2019 to December 31, 2020, was primarily driven by origination fees capitalized for SBA PPP loans during 2020. As of December 31, 2020, unamortized loan fees on originated SBA PPP loans were $2.2 million.

The Company's lending activities are primarily conducted in Maine, but also include loan production offices in Massachusetts and New Hampshire. The Company originates single- and multi-family residential loans, commercial real estate loans, business loans, municipal loans and a variety of consumer loans. In addition, the Company makes loans for the construction of residential homes, multi-family properties and commercial real estate properties. The ability and willingness of borrowers to honor their repayment commitments is generally dependent on the level of overall economic activity within the geographic area and the general economy.

The Company participated in SBA PPP loan funding to qualifying businesses during 2020. Through December 31, 2020, the Company originated 3,034 SBA PPP loans totaling $244.8 million to qualifying businesses across our markets in need of financial support due to the COVID-19 pandemic. This program provided qualifying businesses a specialized low interest rate loan by the U.S. Treasury Department and is administered by the SBA. The SBA PPP loan provides borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilize the loan proceeds to cover employee compensation-related business operating costs, as well as certain other costs up to pre-established limits. In December 2020, as part of the Consolidated Appropriations Act of 2021, another round of SBA PPP loan funding was authorized by the Federal government in response to the continued impact of the COVID-19 pandemic on certain businesses. In January 2021, the Company, again, began lending under the SBA PPP loan program.

In the normal course of business, the Company makes loans to certain officers, directors and their associated companies, under terms that are consistent with the Company’s lending policies and regulatory requirements and do not involve more than the normal risk of collectability or present other unfavorable features. At December 31, 2020 and 2019, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

ACL on Loans

Under CECL, effective January 1, 2020, the ACL on loans is management's estimate of expected credit losses within its loan portfolio as of each reporting date.

The Board of Directors monitors credit risk through: (i) the Directors' Credit Committee, which reviews large credit exposures, monitors external loan review reports, reviews the lending authority for individual loan officers when required, and has approval authority and responsibility for all matters regarding the loan policy and other credit-related policies, including reviewing and monitoring asset quality trends, concentration levels, and the allowance for loan loss methodology under the incurred loss accounting methodology for December 31, 2019 and periods prior to; and (ii) the Audit Committee, effective January 1, 2020, which has approval authority and oversight responsibility for ACL adequacy and methodology, including the ACL on loans.
Credit Risk Administration and the Credit Risk Policy Committee oversee the Company's systems and procedures to monitor the credit quality of its loan portfolio, conduct a loan review program, and maintain the integrity of the loan rating system. Effective for annual and interim periods beginning January 1, 2020, the adequacy of the ACL, including the ACL on loans, is overseen by the Management Provision Committee, which is an internal management committee comprised of various Company executives and senior managers across business lines, including Accounting and Finance, Credit Risk, Compliance, and Commercial and Retail Banking. The Management Provision Committee is further supported by other management-level committees to ensure the adequacy of the ACL. The Management Provision Committee supports the oversight efforts of the director-level committees discussed in the paragraph above and the Board of Directors. The Company's practice is to manage the portfolio proactively such that management can identify problem credits early, assess and implement effective work-out strategies, and take charge-offs as promptly as practical. In addition, the Company continuously reassesses its underwriting standards in response to credit risk posed by changes in economic conditions.

For purposes of determining the ACL on loans, the Company disaggregates its loans into portfolio segments. Each portfolio segment possesses unique risk characteristics that are considered when determining the appropriate level of allowance. As of December 31, 2020, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, include the following:

Commercial Real Estate - Non Owner-Occupied and Owner-Occupied. Commercial real estate loans consist of mortgage loans to finance investments in real property such as multi-family residential, commercial/retail, office, industrial, hotels, educational, health care facilities and other specific use properties. Commercial real estate loans are typically written with amortizing payment structures. Collateral values are determined based upon appraisals and evaluations in accordance with established policy guidelines. Maximum loan-to-value ratios at origination are governed by established policy and regulatory guidelines. Commercial real estate loans are primarily paid by the cash flow generated from the real property, such as operating leases, rents, or other operating cash flows from the borrower.

Commercial. Commercial loans consist of revolving and term loan obligations extended to business and corporate enterprises for the purpose of financing working capital and/or capital investment. Collateral generally consists of pledges of business assets including, but not limited to, accounts receivable, inventory, plant and equipment, and/or real estate, if applicable. Commercial loans are primarily paid by the operating cash flow of the borrower. Commercial loans may be secured or unsecured.

SBA PPP. SBA PPP loans are unsecured, fully-guaranteed commercial loans backed by the SBA, issued to qualifying small businesses as part of federal stimulus issued in response to the COVID-19 pandemic. Loans made under the program have terms of two or five years and are to be used by the borrower to offset certain payroll and other operating costs, such as rent and utilities. The loan and accrued interest, or a portion thereof, is eligible for forgiveness by the SBA should the qualifying small business meet certain conditions. These loans were originated under the guidance of the SBA, which has been subject to change.

In late-December 2020, another round of SBA PPP loans was announced as part of the Consolidated Appropriations Act of 2021. The terms and structure of this program are similar to those issued under the CARES Act. The Company continues to participate in SBA PPP lending to customers and borrowers in need of funding due to the COVID-19 pandemic.

Residential Real Estate. Residential real estate loans held in the Company's loan portfolio are made to borrowers who demonstrate the ability to make scheduled payments with full consideration to underwriting factors. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines. Collateral consists of mortgage liens on one- to four-family residences, including for investment purposes.

Home Equity. Home equity loans and lines of credit are made to qualified individuals and are secured by senior or junior mortgage liens on owner-occupied one- to four-family homes, condominiums, or vacation homes. The home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. The home equity line of credit has a variable rate and is billed as interest-only payments during the draw period. At the end of the draw period, the home equity line of credit is billed as a percentage of the principal balance plus all accrued interest. Borrower qualifications include favorable credit history combined with supportive income requirements and combined loan-to-value ratios within established policy guidelines.

Consumer. Consumer loan products including personal lines of credit and amortizing loans made to qualified individuals for various purposes such as education, auto loans, debt consolidation, personal expenses or overdraft protection. Borrower
qualifications include favorable credit history combined with supportive income and collateral requirements within established policy guidelines, as applicable. Consumer loans may be secured or unsecured.

For annual and interim reporting periods prior to October 1, 2020, the Company's loan portfolio was segmented into commercial real estate, commercial, residential real estate, home equity and consumer.

The following table presents the activity in the ACL on loans at and for the year ended December 31, 2020:
Commercial Real Estate
(In thousands)Non Owner-OccupiedOwner- OccupiedCommercialSBA PPPResidential Real EstateHome EquityConsumerTotal
Beginning balance, December 31, 2019$10,924 $1,490 $3,985 $— $5,842 $2,423 $507 $25,171 
Impact of adopting CECL(1)
(668)(90)1,548 — (1,129)792 (220)233 
Loans charged off(82)(21)(1,130)— (121)(317)(167)(1,838)
Recoveries107 13 572 — 292 33 67 1,084 
Provision (credit) for loan losses11,497 1,440 1,728 69 (1,410)(315)206 13,215 
Ending balance, December 31, 2020$21,778 $2,832 $6,703 $69 $3,474 $2,616 $393 $37,865 
(1)    Effective January 1, 2020, the Company adopted ASU 2016-13, commonly referred to as "CECL." Refer to Note 1 for further details.

The ACL on loans at December 31, 2020, was $37.9 million, an increase of $12.7 million, or 50%, since December 31, 2019. The increase was driven by the adoption of CECL, effective January 1, 2020, and the impact of the COVID-19 pandemic on expected credit losses. At December 31, 2020, the ACL on loans estimate used a reasonable and supportable forecast period of one year across all of its loan segments. At December 31, 2020, the reasonable and supportable forecast used to estimate the ACL on loans used the following loss drivers by loan segment: (i) commercial real estate - non owner-occupied used Maine Unemployment and Maine Retail Trade, (ii) commercial real estate - owner-occupied used Maine Unemployment and Maine GDP, (iii) commercial used Maine Unemployment and National GDP, (iv) residential real estate used Maine Unemployment and Maine House Price Index, (v) home equity used Maine Unemployment and Maine House Price Index and (vi) consumer used Maine Unemployment and National GDP. Though the SBA PPP loans are fully guaranteed by the SBA, the Company applied an insignificant expected credit loss factor to its SBA PPP loan segment based on its past historical experience with similar loans and guarantees. Furthermore, qualitative factors, as described within Note 1 of the consolidated financial statements, were used to estimate the ACL on loans at December 31, 2020. The Company's qualitative factors at December 31, 2020, included consideration of the level of uncertainty surrounding the COVID-19 pandemic. At December 31, 2020, the ACL on loans estimate used a reversion period of one year for each loan segment.

The increase in the ACL on loans at December 31, 2020 compared to December 31, 2019, for the commercial real estate loan segments and commercial loan segment was driven by change in current and forecasted economic conditions between periods and the elevated risk within certain industries within these loan segments due to the COVID-19 pandemic. The decrease in ACL on loans allocated to the residential real estate loan segment primarily reflects the increase in housing demand driving elevated home prices across the Company's markets as northern New England, and Maine in particular, has benefited as people living in urban areas have moved into more rural markets in response to the COVID-19 pandemic.
The following table presents activity in the allowance for loan losses and select loan information by portfolio segment, under the incurred loss methodology, for the periods indicated:
(In thousands)Commercial Real EstateCommercialResidential Real EstateHome EquityConsumerTotal
At or For the Year Ended December 31, 2019:
Allowance:            
Beginning balance$11,654 $3,957 $6,071 $2,796 $234 $24,712 
Loans charged off(300)(1,238)(462)(412)(301)(2,713)
Recoveries49 225 16 1 19 310 
Provision (credit) for loan losses1,011 1,041 217 38 555 2,862 
Ending balance$12,414 $3,985 $5,842 $2,423 $507 $25,171 
Allowance balance attributable loans:
Individually evaluated for impairment$30 $— $364 $69 $— $463 
Collectively evaluated for impairment12,384 3,985 5,478 2,354 507 24,708 
Total ending allowance$12,414 $3,985 $5,842 $2,423 $507 $25,171 
Loans:            
Individually evaluated for impairment$402 $319 $3,384 $373 $— $4,478 
Collectively evaluated for impairment1,242,995 442,382 1,066,990 312,406 25,772 3,090,545 
Total loan balances$1,243,397 $442,701 $1,070,374 $312,779 $25,772 $3,095,023 
At or For the Year Ended December 31, 2018:
Allowance:            
Beginning balance$11,863 $4,622 $5,086 $2,367 $233 $24,171 
Loans charged off(512)(991)(173)(476)(96)(2,248)
Recoveries28 1,771 90 44 11 1,944 
Provision (credit) for loan losses275 (1,445)1,068 861 86 845 
Ending balance$11,654 $3,957 $6,071 $2,796 $234 $24,712 
Allowance balance attributable loans:
Individually evaluated for impairment$23 $53 $586 $162 $— $824 
Collectively evaluated for impairment11,631 3,904 5,485 2,634 234 23,888 
Total ending allowance$11,654 $3,957 $6,071 $2,796 $234 $24,712 
Loans:            
Individually evaluated for impairment$930 $786 $4,762 $442 $6 $6,926 
Collectively evaluated for impairment1,268,603 414,650 988,104 327,321 20,618 3,019,296 
Total loan balances$1,269,533 $415,436 $992,866 $327,763 $20,624 $3,026,222 

The Company focuses on maintaining a well-balanced and diversified loan portfolio. Despite such efforts, it is recognized that credit concentrations may occasionally emerge as a result of economic conditions, changes in local demand, natural loan growth and runoff. To identify credit concentrations effectively, all commercial and commercial real estate loans are assigned Standard Industrial Classification codes, North American Industry Classification System codes, and state and county codes. Shifts in portfolio concentrations are monitored. As of December 31, 2020, the Company's total exposure to the lessors of nonresidential buildings' industry was 14% of total loans and 32% of total commercial real estate loans. There were no other industry concentrations exceeding 10% of the Company's total loan portfolio as of December 31, 2020.

COVID-19 Loan Deferral Program

In response to the COVID-19 pandemic, the Company worked with businesses and consumers to provide temporary debt payment relief that generally provided principal and/or interest payment deferrals for a period of 180 days or less.
All loans granted temporary payment relief during 2020 by the Company complied with the terms of the CARES Act, which was signed into law in March 2020, or bank regulator guidance, and thus were not individually assessed, designated or accounted for as TDRs. Refer to Note 1 for further details about the accounting treatment under the CARES Act.

Should the Company issue or extend temporary debt relief to customers due to COVID-19 hardships during 2021, such may be provided under bank regulator guidance issued in 2020 in response to COVID-19 or the Consolidated Appropriations Act of 2021, which extended the provisions within the CARES Act that provided TDR accounting relief to the earlier of: (i) December 31, 2021 or (ii) the date that is 60 days after the date the national emergency concerning the COVID-19 pandemic declared by the President on March 13, 2020 terminates.

The Company's loans impacted by the COVID-19 pandemic and operating under temporary short-term payment deferral arrangements for a period of 180 days or less were as follows for the date indicated:
December 31,
2020
(In thousands, except number of units)UnitsAmortized
Cost		% of
Total Loans
Commercial25 $19,866 0.6 %
Retail28 6,669 0.2 %
Total53 $26,535 0.8 %

Credit Quality Indicators

 To further identify loans with similar risk profiles, the Company categorizes each portfolio segment into classes by credit risk characteristic and applies a credit quality indicator to each portfolio segment. The indicators for commercial real estate - non owner-occupied and owner-occupied, commercial and residential real estate portfolio segments are represented by Grades 1 through 10 as outlined below. In general, risk ratings are adjusted periodically throughout the year as updated analysis and review warrants. This process may include, but is not limited to, annual credit and loan reviews, periodic reviews of loan performance metrics, such as delinquency rates, and quarterly reviews of adversely risk rated loans. The Company uses the following definitions when assessing grades for the purpose of evaluating the risk and adequacy of the ACL on loans:

•Grade 1 through 6 — Grades 1 through 6 represent groups of loans that are not subject to adverse criticism as defined in regulatory guidance. Loans in these groups exhibit characteristics that represent low to moderate risks, which is measured using a variety of credit risk criteria, such as cash flow coverage, debt service coverage, balance sheet leverage, liquidity, management experience, industry position, prevailing economic conditions, support from secondary sources of repayment and other credit factors that may be relevant to a specific loan. In general, these loans are supported by properly margined collateral and guarantees of principal parties.

•Grade 7 — Loans with potential weakness (Special Mention). Loans in this category are currently protected based on collateral and repayment capacity and do not constitute undesirable credit risk, but have potential weakness that may result in deterioration of the repayment process at some future date. This classification is used if a negative trend is evident in the obligor’s financial situation. Special mention loans do not sufficiently expose the Company to warrant adverse classification.

•Grade 8 — Loans with definite weakness (Substandard). Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor or by collateral pledged. Borrowers experience difficulty in meeting debt repayment requirements. Deterioration is sufficient to cause the Company to look to the sale of collateral.

•Grade 9 — Loans with potential loss (Doubtful). Loans classified as doubtful have all the weaknesses inherent in the substandard grade with the added characteristic that the weaknesses make collection or liquidation of the loan in full highly questionable and improbable. The possibility of some loss is extremely high, but because of specific pending factors that may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined.

•Grade 10 — Loans with definite loss (Loss). Loans classified as loss are considered uncollectible. The loss classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset because recovery and collection time may be protracted.
Loans that were granted temporary debt relief due to the COVID-19 pandemic were not automatically downgraded into lower credit risk ratings. The Company will continue to actively monitor these loans for indications of deterioration as the deferral period matures, which could result in future downgrades.

The Company periodically reassesses asset quality indicators to reflect appropriately the risk composition of the Company’s loan portfolio. Home equity and consumer loans are not individually risk rated, but rather analyzed as groups taking into account delinquency rates and other economic conditions which may affect the ability of borrowers to meet debt service requirements, including interest rates and energy costs. Performing loans include loans that are current and loans that are past due less than 90 days. Loans that are past due over 90 days and non-accrual loans, including TDRs, are considered non-performing.
Based on the most recent analysis performed, the risk category of loans by portfolio segment by vintage, reported under the CECL methodology, was as follows as of the period indicated:
(In thousands)20202019201820172016PriorRevolving Loans
Amortized Cost Basis		Revolving Loans
Converted to Term		Total
As of December 31, 2020
Commercial real estate - non owner-occupied      
Risk rating
Pass (Grades 1-6)$138,010 $224,148 $144,552 $119,409 $157,588 $264,253 $— $— $1,047,960 
Special mention (Grade 7)5,739 — — 4,256 3,497 847 — — 14,339 
Substandard (Grade 8)24 125 2,070 405 1,522 31,530 — — 35,676 
Doubtful (Grade 9)— — — — — — — — — 
Total commercial real estate - non owner-occupied143,773 224,273 146,622 124,070 162,607 296,630 — — 1,097,975 
Commercial real estate - owner-occupied      
Risk rating
Pass (Grades 1-6)35,948 29,217 48,312 47,065 25,507 76,098 — — 262,147 
Special mention (Grade 7)— — 4,584 — — 1,513 — — 6,097 
Substandard (Grade 8)— — 891 462 — 1,898 — — 3,251 
Doubtful (Grade 9)— — — — — — — — — 
Total commercial real estate - owner occupied35,948 29,217 53,787 47,527 25,507 79,509 — — 271,495 
Commercial
      
Risk rating
Pass (Grades 1-6)53,966 72,863 40,688 25,478 15,788 51,869 72,425 37,026 370,103 
Special mention (Grade 7)— 22 313 4,924 117 400 — 867 6,643 
Substandard (Grade 8)187 1,012 211 51 42 2,081 65 1,099 4,748 
Doubtful (Grade 9)— — — — — — — — — 
Total commercial54,153 73,897 41,212 30,453 15,947 54,350 72,490 38,992 381,494 
SBA PPP
Risk rating
Pass (Grades 1-6)135,095 — — — — — — — 135,095 
Special mention (Grade 7)— — — — — — — — — 
Substandard (Grade 8)— — — — — — — — — 
Doubtful (Grade 9)— — — — — — — — — 
Total SBA PPP135,095 — — — — — — — 135,095 
Residential Real Estate      
Risk rating
Pass (Grades 1-6)339,834 183,877 119,426 79,159 57,269 266,324 3,028 — 1,048,917 
Special mention (Grade 7)— — — — — 398 — — 398 
Substandard (Grade 8)— — 176 487 — 4,820 — — 5,483 
Doubtful (Grade 9)— — — — — — — — — 
Total residential real estate339,834 183,877 119,602 79,646 57,269 271,542 3,028 — 1,054,798 
Home equity
      
Risk rating
Performing855 9,415 17,281 3,478 1,339 17,664 194,065 12,480 256,577 
Non-performing— — — — — 207 1,241 548 1,996 
Total home equity
855 9,415 17,281 3,478 1,339 17,871 195,306 13,028 258,573 
Consumer
      
Risk rating
Performing6,572 6,525 3,096 1,359 378 1,780 678 — 20,388 
Non-performing— — — — 4 — — — 4 
Total consumer
6,572 6,525 3,096 1,359 382 1,780 678 — 20,392 
Total Loans$716,230 $527,204 $381,600 $286,533 $263,051 $721,682 $271,502 $52,020 $3,219,822 
The following table summarizes credit risk exposure indicators by portfolio segment, under the incurred loss methodology, as of the date indicated:
(In thousands)Commercial Real EstateCommercialResidential Real EstateHome EquityConsumerTotal
December 31, 2019:
Pass (Grades 1 – 6)$1,196,683 $436,537 $1,062,825 $— $— $2,696,045 
Performing— — — 310,653 25,748 336,401 
Special Mention (Grade 7)31,753 2,633 473 — — 34,859 
Substandard (Grade 8)14,961 3,531 7,076 — — 25,568 
Non-performing— — — 2,126 24 2,150 
Total$1,243,397 $442,701 $1,070,374 $312,779 $25,772 $3,095,023 

Past Due and Non-Accrual Loans

The Company closely monitors the performance of its loan portfolio. A loan is placed on non-accrual status when the financial condition of the borrower is deteriorating, payment in full of both principal and interest is not expected as scheduled or principal or interest has been in default for 90 days or more. Exceptions may be made if the asset is secured by collateral sufficient to satisfy both the principal and accrued interest in full and collection is reasonably assured. When one loan to a borrower is placed on non-accrual status, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual status. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual status when collection of principal and interest is assured and the borrower has demonstrated timely payments of principal and interest for a reasonable period, generally at least six months. Unsecured loans, however, are not normally placed on non-accrual status because they are charged-off once their collectability is in doubt.

All loans that were granted temporary payment relief due to the COVID-19 pandemic were current with payments in accordance with the terms of the CARES Act or bank regulatory guidance at the time of initial relief. At December 31, 2020, the payment status for loans that continued to operate under a payment deferral arrangement were reported based on payment status at the time the deferral was granted to the borrower.

The following is a loan aging analysis by portfolio segment (including loans past due over 90 days and non-accrual loans) and loans past due over 90 days and accruing as of the following dates:
(In thousands)30 – 59 Days Past Due60 – 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Loans OutstandingLoans > 90 Days Past Due and Accruing
December 31, 2020:
Commercial real estate - non owner-occupied$— $50 $173 $223 $1,097,752 $1,097,975 $— 
Commercial real estate - owner-occupied99 — 47 146 271,349 271,495 — 
Commercial430 — 857 1,287 380,207 381,494 — 
SBA PPP— — — — 135,095 135,095 — 
Residential real estate1,406 1,103 2,535 5,044 1,049,754 1,054,798 — 
Home equity335 173 1,416 1,924 256,649 258,573 — 
Consumer92 67 4 163 20,229 20,392 — 
Total$2,362 $1,393 $5,032 $8,787 $3,211,035 $3,219,822 $— 
December 31, 2019:
Commercial real estate$267 $1,720 $544 $2,531 $1,240,866 $1,243,397 $— 
Commercial548 243 705 1,496 441,205 442,701 — 
Residential real estate2,297 627 2,598 5,522 1,064,852 1,070,374 — 
Home equity681 238 1,459 2,378 310,401 312,779 — 
Consumer108 31 23 162 25,610 25,772 — 
Total$3,901 $2,859 $5,329 $12,089 $3,082,934 $3,095,023 $— 
    
The following table presents the amortized cost basis of loans on non-accrual status (including non-accruing TDRs) by portfolio segment as of the dates indicated:
December 31,
20202019
(In thousands)Non-Accrual Loans With an AllowanceNon-Accrual Loans Without an AllowanceTotal Non-Accrual LoansTotal Non-Accrual Loans
Commercial real estate(1)
$450 $62 $512 $— 
Commercial1,549 58 1,607 784 
Residential real estate3,136 341 3,477 4,096 
Home equity1,961 35 1,996 2,130 
Consumer4 — 4 24 
Total$7,100 $496 $7,596 $7,034 
(1)    Commercial real estate was segmented into non owner-occupied and owner-occupied upon adoption of CECL, effective January 1, 2020. At December 31, 2020, commercial real estate - non owner-occupied and owner-occupied non-accrual balances with an allowance were $351,000 and $99,000, respectively, and commercial real estate - non owner-occupied and owner-occupied non-accrual balances without an allowance were $15,000 and $47,000, respectively.

The following table presents the amortized cost basis of collateral-dependent non-accrual loans (including non-accruing TDRs) by portfolio segment and collateral type, as of the date indicated:
December 31,
2020
Collateral TypeTotal Collateral -Dependent Non-Accrual Loans
(In thousands)Real Estate General Business Assets
Commercial$— $689 $689 
Residential real estate248 — 248 
Total$248 $689 $937 

Collateral-dependent loans are loans for which the repayment is expected to be provided substantially by the underlying collateral and there are no other available and reliable sources of repayment.

Interest income that would have been recognized if loans on non-accrual status had been current in accordance with their original terms for the year ended December 31, 2020, 2019, and 2018 is estimated to have been $335,000, $420,000, and $600,000, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual, as such, the Company did not record any interest income on its non-accrual for the year ended December 31, 2020. An immaterial amount of accrued interest on non-accrual loans was written-off during the year ended December 31, 2020, by reversing interest income. At December 31, 2020 and 2019, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $10.2 million and $7.4 million, respectively, and reported within other assets on the consolidated statements of condition. An allowance was not carried on the accrued interest receivable at either date.

TDRs

The Company takes a conservative approach with credit risk management and remains focused on community lending and reinvesting. The Company works closely with borrowers experiencing credit problems to assist in loan repayment or term modifications. TDR loans consist of loans where the Company, for economic or legal reasons related to the borrower’s financial difficulties, granted a concession to the borrower that it would not otherwise consider. TDRs, typically, involve term modifications or a reduction of either interest or principal. Once such an obligation has been restructured, it will remain a TDR until paid in full, or until the loan is again restructured at current market rates and no concessions are granted.

The specific reserve allowance was determined by discounting the total expected future cash flows from the borrower at the original loan interest rate or, if the loan is currently collateral-dependent, using net realizable value, which was obtained through
independent appraisals and internal evaluations. The following is a summary of TDRs, by portfolio segment, and the associated specific reserve included within the ACL for the dates indicated:
Number of ContractsRecorded InvestmentSpecific Reserve
(In thousands, except number of contracts)
December 31,December 31,December 31,
202020192020201920202019
Commercial real estate(1)
2 2 $328 $338 $37 $30 
Commercial2 2 100 123 — — 
Residential real estate21 22 2,638 2,869 364 364 
Consumer and home equity
— 1 — 299 — 69 
Total25 27 $3,066 $3,629 $401 $463 
(1)    Commercial real estate was segmented into non owner-occupied and owner-occupied upon adoption of CECL, effective January 1, 2020. At December 31, 2020, all commercial real estate TDRs were classified as owner-occupied.

At December 31, 2020, the Company had performing and non-performing TDRs with a recorded investment balance of $2.8 million and $248,000, respectively. At December 31, 2019, the Company had performing and non-performing TDRs with a recorded investment balance of $3.0 million and $636,000, respectively.

The following represents loan modifications that qualify as TDRs that occurred during the periods indicated:
Number of ContractsPre-Modification
Outstanding
Recorded Investment		Post-Modification
Outstanding
Recorded Investment		Specific Reserve
(In thousands, except number of contracts)
For the Year Ended December 31,For the Year Ended December 31,For the Year Ended December 31,For the Year Ended December 31,
202020192018202020192018202020192018202020192018
Residential real estate:
Interest rate and maturity concession
— 2 2 $— $64 $231 $— $69 $254 $— $15 $50 
Payment deferral
— — 1 — — 166 — — 166 — — 45 
Total— 2 3 $— $64 $397 $— $69 $420 $— $15 $95 

As of December 31, 2020, the Company did not have any other commitments to lend additional funds to borrowers with loans classified as TDRs.

For the year ended December 31, 2020 and 2019, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted. For the year ended December 31, 2018, one home equity loan with a recorded investment of $299,000 at December 31, 2018 was modified as a TDR within the previous 12 months for which the borrower subsequently defaulted. At December 31, 2018, the Company carried a specific reserve on this redefaulted TDR of $162,000.
Impaired Loans

For periods prior to the adoption of CECL, impaired loans consisted of non-accrual loans and TDRs that were individually evaluated for impairment in accordance with the Company's policy. The following is a summary of impaired loan balances and the associated allowance by portfolio segment as of and for the periods indicated:
For the Year Ended
(In thousands)Recorded InvestmentUnpaid Principal BalanceRelated AllowanceAverage Recorded InvestmentInterest Income Recognized
December 31, 2019:
With related allowance recorded:          
Commercial real estate$128 $128 $30 $130 $11 
Commercial— — — 292 — 
Residential real estate2,395 2,395 364 2,989 110 
Home equity318 318 69 522 — 
Consumer— — — — — 
Ending balance2,841 2,841 463 3,933 121 
Without related allowance recorded:          
Commercial real estate274 433 — 381 13 
Commercial319 685 — 238 7 
Residential real estate989 1,116 — 1,258 21 
Home equity55 192 — 115 — 
Consumer— — — 1 — 
Ending balance1,637 2,426 — 1,993 41 
Total impaired loans$4,478 $5,267 $463 $5,926 $162 
December 31, 2018:
With related allowance recorded:          
Commercial real estate$131 $131 $23 $1,969 $11 
Commercial556 556 53 111 — 
Residential real estate3,471 3,471 586 3,591 127 
Home equity318 318 162 250 — 
Consumer— — — — — 
Ending balance4,476 4,476 824 5,921 138 
Without related allowance recorded:          
Commercial real estate799 975 — 2,269 13 
Commercial230 293 — 1,379 8 
Residential real estate1,291 1,415 — 1,524 34 
Home equity124 305 — 195 — 
Consumer6 13 — 1 — 
Ending balance2,450 3,001 — 5,368 55 
Total impaired loans$6,926 $7,477 $824 $11,289 $193 

In-Process Foreclosure Proceedings
At December 31, 2020 and 2019, the Company had $1.5 million and $1.3 million, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process. Due to the COVID-19 pandemic, the Company has been abiding by state issued mandates requiring a temporary moratorium on foreclosures. The Company will continue to work these consumer mortgage loans through the foreclosure process once the moratorium is lifted, which typically takes 18 to 24 months