LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

6 Months Ended

Jun. 30, 2022

Loans and Leases Receivable Disclosure [Abstract]

LOANS AND ALLOWANCE FOR LOAN LOSSES

LOANS AND ALLOWANCE FOR CREDIT LOSSES ON LOANS

Loans

The composition of the Company’s loan portfolio, excluding residential loans held for sale, was as follows for the dates indicated:

(In thousands)	June 30, 2022		December 31, 2021
Commercial Loans:
Commercial real estate - non-owner-occupied	$	1,208,700	$	1,178,185
Commercial real estate - owner-occupied	324,214		317,275
Commercial	421,220		363,695
SBA PPP	2,509		35,953
Total commercial loans	1,956,643		1,895,108
Retail Loans:
Residential real estate	1,517,239		1,306,447
Home equity	230,865		210,403
Consumer	19,480		19,516
Total retail loans	1,767,584		1,536,366
Total loans	$	3,724,227	$	3,431,474

The loan balances for each portfolio segment presented above are net of their respective unamortized fair value mark discount on acquired loans and net of unamortized loan origination costs for the dates indicated:

(In thousands)	June 30, 2022		December 31, 2021
Net unamortized fair value mark discount on acquired loans	$	(467)	$	(593)
Net unamortized loan origination costs(1)	5,633		3,110
Total	$	5,166	$	2,517

(1)    Net unamortized loan origination costs includes unrecognized origination fees for SBA PPP loans of $67,000 and $1.2 million as of June 30, 2022 and December 31, 2021, respectively.

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.

SBA PPP Loans. Beginning in April 2020, the Company originated SBA PPP loans issued to qualifying businesses as part of the federal stimulus packages issued due to the COVID-19 pandemic. This program provided qualifying businesses a specialized, low-interest-rate loan by the U.S. Treasury Department and was administered by the SBA. SBA PPP loans provided borrower guarantees for lenders, as well as loan forgiveness incentives for borrowers that utilized the loan proceeds to cover employee compensation-related business operating costs, as well as certain other costs up to pre-established limits. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program.

For the year ended December 31, 2021, the Company originated 1,620 SBA PPP loans totaling $102.2 million to qualifying businesses across our markets in need of financial support due to the COVID-19 pandemic. Of these SBA PPP loans originated during the year ended December 31, 2021, 19 loans totaling $2.5 million remained outstanding as of June 30, 2022.

Related Party Loans. In the normal course of business, the Bank 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 that do not involve more than the normal risk of collectability or present other unfavorable features. At June 30, 2022 and December 31, 2021, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

Loan Sales

For the three months ended June 30, 2022 and 2021, the Company sold $47.0 million and $110.8 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $1.0 million and $2.9 million, respectively. For the six months ended June 30, 2022 and 2021, the Company sold $93.7 million and $303.4 million, respectively, of residential mortgage loans on the secondary market, which resulted in gains on the sale of loans (net of costs) of $2.2 million and $9.1 million, respectively.

At June 30, 2022 and December 31, 2021, the Company had certain residential mortgage loans with a principal balance of $3.4 million and $5.8 million, respectively, designated as held for sale. The Company has elected the fair value option of accounting for its loans held for sale, and at June 30, 2022 and December 31, 2021, recorded an unrealized (loss) gain of ($40,000) and $29,000, respectively. For the three months ended June 30, 2022 and 2021, the Company recorded an unrealized gain on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of $73,000 and $267,000, respectively. For the six months ended June 30, 2022 and 2021, the Company recorded an unrealized loss on loans held for sale recorded within mortgage banking income, net, on the Company's consolidated statements of income of ($69,000) and ($804,000) respectively.

The Company has forward delivery commitments with a secondary market investor on each of its loans held for sale at June 30, 2022 and December 31, 2021. Refer to Note 8 for further discussion of the Company's forward delivery commitments.

ACL on Loans

The Company manages its loan portfolio proactively to effectively identify problem credits and assess trends early, 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. The Company monitors and manages credit risk through the following governance structure:

•The Credit Risk and Special Assets team and the Credit Risk Policy Committee, which is an internal management committee comprised of various executives and senior managers across business lines, including Accounting and Finance, Credit Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking, 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.

•The adequacy of the ACL 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 Underwriting, Credit Risk and Special Assets, Compliance, and Commercial and Retail Banking. The Management Provision Committee supports the oversight efforts of the Audit Committee of the Board of Directors.

•The Directors' Credit Committee of the Board of Directors 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, and concentration levels.

•The Audit Committee of the Board of Directors has approval authority and oversight responsibility for the ACL adequacy and methodology.

Segmentation. 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 June 30, 2022 and December 31, 2021, 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. Non-owner occupied commercial real estate loans are, in substance, all commercial real estate loans that are not categorized by the Company as owner-occupied commercial real estate loans. Non-

owner-occupied commercial estate loans are investment properties in which the primary source for repayment of the loan by the borrower is derived from rental income associated with the property or the proceeds of the sale, refinancing, or permanent refinancing of the property. Non-owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, multi-family residential, commercial/retail office space, industrial/warehouse space, hotels, assisted living facilities and other specific use properties. Also included within the non-owner-occupied commercial real estate loan segment are construction projects until they are completed. 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 - Owner-Occupied. Generally, owner-occupied commercial real estate loans are properties that are owned and operated by the borrower, and the primary source for repayment is the cash flow from the ongoing operations and activities conducted by the borrower's business. Owner-occupied commercial real estate loans consist of mortgage loans to finance investments in real property that may include, but are not limited to, commercial/retail office space, restaurants, educational and medical practice 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. 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, are eligible for forgiveness by the SBA should the qualifying small business meet certain conditions. SBA PPP loans were originated under the guidance of the SBA, which has been subject to change. Effective May 31, 2021, the SBA PPP loan program ended and the Company ceased originating loans under this program.

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. Each home equity loan has a fixed rate and is billed as equal payments comprised of principal and interest. Each 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 include 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.

The following table presents the activity in the ACL on loans, as reported under CECL, for the periods indicated:

	Commercial Real Estate
(In thousands)	Non-Owner-Occupied		Owner- Occupied		Commercial		SBA PPP		Residential Real Estate		Home Equity		Consumer		Total
At or For The Three Months Ended June 30, 2022
Beginning balance, March 31, 2022	$	16,572	$	2,339	$	4,838	$	4	$	6,476	$	1,435	$	106	$	31,770
Loans charged off	—		—		(316)		—		(16)		—		(17)		(349)
Recoveries	—		—		223		—		—		86		3		312
(Credit) provision for loan losses	(362)		162		400		(3)		1,978		275		61		2,511
Ending balance, June 30, 2022	$	16,210	$	2,501	$	5,145	$	1	$	8,438	$	1,796	$	153	$	34,244
At or For The Six Months Ended June 30, 2022
Beginning balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256
Loans charged off	—		—		(561)		—		(16)		—		(84)		(661)
Recoveries	1		2		280		—		—		86		5		374
(Credit) provision for loan losses	(2,625)		(40)		1,243		(18)		2,321		241		153		1,275
Ending balance, June 30, 2022	$	16,210	$	2,501	$	5,145	$	1	$	8,438	$	1,796	$	153	$	34,244
At or For The Three Months Ended June 30, 2021
Beginning balance, March 31, 2021	$	22,473	$	2,548	$	5,170	$	87	$	3,093	$	2,176	$	228	$	35,775
Loans charged off	—		—		(259)		—		(35)		(107)		(19)		(420)
Recoveries	—		3		67		—		70		—		17		157
(Credit) provision for loan losses	(2,896)		(35)		(636)		(21)		77		(4)		63		(3,452)
Ending balance, June 30, 2021	$	19,577	$	2,516	$	4,342	$	66	$	3,205	$	2,065	$	289	$	32,060
At or For The Six Months Ended June 30, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(406)		—		(88)		(145)		(68)		(707)
Recoveries	—		5		110		—		70		—		23		208
(Credit) provision for loan losses	(2,201)		(321)		(2,065)		(3)		(251)		(406)		(59)		(5,306)
Ending balance, June 30, 2021	$	19,577	$	2,516	$	4,342	$	66	$	3,205	$	2,065	$	289	$	32,060
At or For The Year Ended December 31, 2021
Beginning balance, December 31, 2020	$	21,778	$	2,832	$	6,703	$	69	$	3,474	$	2,616	$	393	$	37,865
Loans charged off	—		—		(799)		—		(92)		(162)		(111)		(1,164)
Recoveries	—		9		220		—		107		4		32		372
(Credit) provision for loan losses	(2,944)		(302)		(1,941)		(50)		2,644		(989)		(235)		(3,817)
Ending balance, December 31, 2021	$	18,834	$	2,539	$	4,183	$	19	$	6,133	$	1,469	$	79	$	33,256

The ACL on loans increased $1.0 million during the six months ended June 30, 2022, to $34.2 million. The increase was driven by: (1) a softening overall economy and increasing likelihood of a forecasted recession, and (2) 9% loan growth during this period, that offset (3) a decrease of $4.2 million of reserves that had been established for certain hospitality-related loans within the commercial real estate-non-owner occupied loan segment in response to the COVID-19 pandemic and the identified elevated credit risk the pandemic presented to these loans at that time. As these loans meet certain predetermined credit metrics, the established reserve is released. As of June 30, 2022 and December 31, 2021, the allowance on these loans was $768,000 and $5.0 million, respectively.

Credit Concentrations

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 June 30, 2022, the Company's total exposure to the lessors of nonresidential buildings' industry was 13% of total loans and 32% of total commercial real estate loans. There were no other industry exposures exceeding 10% of the Company's total loan portfolio as of June 30, 2022.

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.

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 dates indicated:

(In thousands)	2022		2021		2020		2019		2018		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of June 30, 2022
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	211,579	$	277,547	$	160,694	$	131,091	$	112,844	$	276,717	$	—	$	—	$	1,170,472
Special mention (Grade 7)	—		169		7,551		273		81		480		—		—		8,554
Substandard (Grade 8)	—		134		1,408		210		8,156		19,766		—		—		29,674
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	211,579		277,850		169,653		131,574		121,081		296,963		—		—		1,208,700
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	36,024		83,960		29,603		45,510		41,167		81,192		—		—		317,456
Special mention (Grade 7)	—		—		—		—		—		428		—		—		428
Substandard (Grade 8)	35		—		—		—		3,332		2,963		—		—		6,330
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	36,059		83,960		29,603		45,510		44,499		84,583		—		—		324,214
Commercial
Risk rating
Pass (Grades 1-6)	47,525		77,885		37,550		38,395		25,149		34,260		125,442		29,534		415,740
Special mention (Grade 7)	—		—		105		171		96		212		1,668		16		2,268
Substandard (Grade 8)	23		20		145		265		188		1,845		468		258		3,212
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	47,548		77,905		37,800		38,831		25,433		36,317		127,578		29,808		421,220
SBA PPP
Risk rating
Pass (Grades 1-6)	—		2,507		2		—		—		—		—		—		2,509
Special mention (Grade 7)	—		—		—		—		—		—		—		—		—
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	—		2,507		2		—		—		—		—		—		2,509
Residential Real Estate
Risk rating
Pass (Grades 1-6)	294,790		591,023		256,977		83,952		54,798		231,980		383		—		1,513,903
Special mention (Grade 7)	—		—		—		—		—		224		—		—		224
Substandard (Grade 8)	—		—		—		—		61		3,051		—		—		3,112
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	294,790		591,023		256,977		83,952		54,859		235,255		383		—		1,517,239
Home equity
Risk rating
Performing	18,517		706		349		5,217		8,719		10,437		174,348		11,831		230,124
Non-performing	—		—		—		—		—		187		367		187		741
Total home equity	18,517		706		349		5,217		8,719		10,624		174,715		12,018		230,865
Consumer
Risk rating
Performing	4,158		5,169		2,457		1,934		573		2,414		2,747		—		19,452
Non-performing	—		—		9		18		—		1		—		—		28
Total consumer	4,158		5,169		2,466		1,952		573		2,415		2,747		—		19,480
Total Loans	$	612,651	$	1,039,120	$	496,850	$	307,036	$	255,164	$	666,157	$	305,423	$	41,826	$	3,724,227

(In thousands)	2021		2020		2019		2018		2017		Prior		Revolving Loans Amortized Cost Basis		Revolving Loans Converted to Term		Total
As of December 31, 2021
Commercial real estate - non-owner-occupied
Risk rating
Pass (Grades 1-6)	$	286,428	$	179,565	$	161,695	$	118,196	$	96,169	$	274,731	$	—	$	—	$	1,116,784
Special mention (Grade 7)	171		7,266		286		119		4,294		10,590		—		—		22,726
Substandard (Grade 8)	350		1,518		217		9,942		391		26,257		—		—		38,675
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - non-owner-occupied	286,949		188,349		162,198		128,257		100,854		311,578		—		—		1,178,185
Commercial real estate - owner-occupied
Risk rating
Pass (Grades 1-6)	91,328		39,082		31,409		43,786		46,466		56,682		—		—		308,753
Special mention (Grade 7)	—		—		—		3,396		362		1,708		—		—		5,466
Substandard (Grade 8)	—		—		54		—		1,785		1,217		—		—		3,056
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial real estate - owner occupied	91,328		39,082		31,463		47,182		48,613		59,607		—		—		317,275
Commercial
Risk rating
Pass (Grades 1-6)	91,102		43,757		44,925		23,895		13,818		27,743		80,775		31,586		357,601
Special mention (Grade 7)	145		117		590		115		383		222		967		244		2,783
Substandard (Grade 8)	—		339		320		492		293		1,209		360		298		3,311
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total commercial	91,247		44,213		45,835		24,502		14,494		29,174		82,102		32,128		363,695
SBA PPP
Risk rating
Pass (Grades 1-6)	35,164		319		—		—		—		—		—		—		35,483
Special mention (Grade 7)	470		—		—		—		—		—		—		—		470
Substandard (Grade 8)	—		—		—		—		—		—		—		—		—
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total SBA PPP	35,634		319		—		—		—		—		—		—		35,953
Residential Real Estate
Risk rating
Pass (Grades 1-6)	586,637		281,804		103,228		63,403		46,696		219,983		903		—		1,302,654
Special mention (Grade 7)	—		—		—		—		—		230		—		—		230
Substandard (Grade 8)	—		—		—		—		—		3,563		—		—		3,563
Doubtful (Grade 9)	—		—		—		—		—		—		—		—		—
Total residential real estate	586,637		281,804		103,228		63,403		46,696		223,776		903		—		1,306,447
Home equity
Risk rating
Performing	760		554		6,179		10,995		2,464		10,792		165,189		12,295		209,228
Non-performing	—		—		—		41		—		174		847		113		1,175
Total home equity	760		554		6,179		11,036		2,464		10,966		166,036		12,408		210,403
Consumer
Risk rating
Performing	6,860		3,523		3,089		1,051		548		2,014		2,399		—		19,484
Non-performing	—		9		21		—		—		2		—		—		32
Total consumer	6,860		3,532		3,110		1,051		548		2,016		2,399		—		19,516
Total Loans	$	1,099,415	$	557,853	$	352,013	$	275,431	$	213,669	$	637,117	$	251,440	$	44,536	$	3,431,474

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 generally charged-off once their collectability is in doubt.

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 Due		60-89 Days Past Due		90 Days or Greater Past Due		Total Past Due		Current		Total Loans Outstanding		Loans > 90 Days Past Due and Accruing
June 30, 2022
Commercial real estate - non-owner-occupied	$	92	$	—	$	49	$	141	$	1,208,559	$	1,208,700	$	—
Commercial real estate - owner-occupied	—		166		133		299		323,915		324,214
Commercial	325		20		643		988		420,232		421,220		—
SBA PPP	—		46		—		46		2,463		2,509		—
Residential real estate	1,123		61		945		2,129		1,515,110		1,517,239		—
Home equity	466		116		410		992		229,873		230,865		—
Consumer	51		13		27		91		19,389		19,480		—
Total	$	2,057	$	422	$	2,207	$	4,686	$	3,719,541	$	3,724,227	$	—
December 31, 2021
Commercial real estate - non-owner-occupied	$	—	$	—	$	51	$	51	$	1,178,134	$	1,178,185	$	—
Commercial real estate - owner-occupied	47		—		133		180		317,095		317,275		—
Commercial	282		174		787		1,243		362,452		363,695		—
SBA PPP	—		68		—		68		35,885		35,953		—
Residential real estate	379		475		1,210		2,064		1,304,383		1,306,447		—
Home equity	456		50		445		951		209,452		210,403		—
Consumer	95		1		32		128		19,388		19,516		—
Total	$	1,259	$	768	$	2,658	$	4,685	$	3,426,789	$	3,431,474	$	—

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:

	June 30, 2022						December 31, 2021
(In thousands)	Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans		Non-Accrual Loans With an Allowance		Non-Accrual Loans Without an Allowance		Total Non-Accrual Loans
Commercial real estate - non-owner-occupied	$	38	$	12	$	50	$	38	$	13	$	51
Commercial real estate - owner-occupied	85		47		132		86		47		133
Commercial	371		352		723		785		44		829
Residential real estate	1,463		368		1,831		1,780		327		2,107
Home equity	675		66		741		1,064		111		1,175
Consumer	28		—		28		32		—		32
Total	$	2,660	$	845	$	3,505	$	3,785	$	542	$	4,327

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 dates indicated:

	June 30, 2022						December 31, 2021
	Collateral Type				Total Collateral -Dependent Non-Accrual Loans		Collateral Type				Total Collateral -Dependent Non-Accrual Loans
(In thousands)	Real Estate		General Business Assets				Real Estate		General Business Assets
Residential real estate	$	325	$	—	$	325	$	268	$	—	$	268
Home equity	—		—		—		111		—		111
Total	$	325	$	—	$	325	$	379	$	—	$	379

Collateral-dependent loans are loans for which 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 is estimated to have been $38,000 and $67,000 for the three months ended June 30, 2022 and 2021, respectively. For the six months ended June 30, 2022 and 2021, the interest income that is estimated to have been recognized if loans on non-accrual status had been current in accordance with their original terms was $85,000 and $143,000, respectively.

The Company's policy is to reverse previously recorded interest income when a loan is placed on non-accrual. As a result, the Company did not record any interest income on its non-accruals for the three or six months ended June 30, 2022 and 2021. An immaterial amount of accrued interest on non-accrual loans was written-off during the three and six months ended June 30, 2022 and 2021, by reversing interest income. At June 30, 2022 and December 31, 2021, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $8.5 million and $7.8 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. TDRs 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 Contracts		Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	June 30, 2022	December 31, 2021	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Commercial real estate - owner-occupied	1	1	$	116	$	118	$	46	$	43
Commercial	2	2	66		74		—		—
Residential real estate	19	19	2,276		2,341		325		$	348
Consumer and home equity	3	3	251		253		6		6
Total	25	25	$	2,709	$	2,786	$	377	$	397

At June 30, 2022, the Company had performing and non-performing TDRs with a recorded investment balance of $2.3 million and $393,000, respectively. At December 31, 2021, the Company had performing and non-performing TDRs with a recorded investment balance of $2.4 million and $394,000, respectively.

The following represents loan modifications that qualify as TDRs that occurred during the periods indicated:

	Number of Contracts		Pre-Modification Outstanding Recorded Investment				Post-Modification Outstanding Recorded Investment				Specific Reserve
(In thousands, except number of contracts)	2022	2021	2022		2021		2022		2021		2022		2021
For the Three Months Ended June 30:
Home equity:
Maturity concession	—	1	$	—	$	144	$	—	$	143	$	—	$	6
Total	—	1	$	—	$	144	$	—	$	143	$	—	$	6
For the Six Months Ended June 30:
Home equity:
Interest rate concession and payment deferral	—	1	$	—	$	159	$	—	$	170	$	—	$	56
Maturity concession	—	1	—		144		—		143		—		6
Total	—	2	$	—	$	303	$	—	$	313	$	—	$	62

As of June 30, 2022 and December 31, 2021, the Company did not have any material commitments to lend additional funds to borrowers with loans classified as TDRs.

For the three and six months ended June 30, 2022 and 2021, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted.

In-Process Foreclosure Proceedings

At June 30, 2022 and December 31, 2021, the Company had $607,000 and $888,000, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.

FHLB Advances

FHLB advances are those borrowings from the FHLBB greater than 90 days. FHLB advances are collateralized by a blanket lien on qualified collateral consisting primarily of loans with first mortgages secured by one- to four-family properties, certain commercial real estate loans, certain pledged investment securities and other qualified assets. The carrying value of residential real estate and commercial loans pledged as collateral was $1.5 billion and $1.4 billion at June 30, 2022 and December 31, 2021, respectively.

Refer to Notes 3 and 6 of the consolidated financial statements for discussion of securities pledged as collateral.