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Loans and Allowance for Credit Losses on Loans
 12 Months Ended
Dec. 31, 2022
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)20222021
Commercial Loans:
Commercial real estate - non-owner-occupied$1,292,443 $1,178,185 
Commercial real estate - owner-occupied332,494 317,275 
Commercial429,499 363,695 
SBA PPP632 35,953 
Total commercial loans2,055,068 1,895,108 
Retail Loans:
Residential real estate1,700,266 1,306,447 
Home equity234,428 210,403 
Consumer20,591 19,516 
Total retail loans1,955,285 1,536,366 
Total loans$4,010,353 $3,431,474 

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)20222021
Net unamortized fair value mark discount on acquired loans$(313)$(593)
Net unamortized loan origination costs(1)
6,890 3,110 
Total$6,577 $2,517 
(1)     Net unamortized loan origination costs includes unrecognized origination fees for SBA PPP loans of $16,000 and $1.2 million as of December 31, 2022 and 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.

Related Party Loans. 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, 2022 and 2021, outstanding loans to certain officers, directors and their associated companies were less than 5% of the Company's shareholders' equity.

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 team, Collection 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, Collections and Special Assets, Risk, 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, Collections 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 December 31, 2022 and 2021, the Company's loan portfolio segments, as determined based on the unique risk characteristics of each, included 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, 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. Effective May 31, 2021, the SBA PPP loan program ended and the Company is no longer originating loans under this program. At December 31, 2022, five loans remained outstanding with a total principal balance of $632,000.
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.

ACL on Loans. 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-OccupiedOwner- OccupiedCommercialSBA PPPResidential Real EstateHome EquityConsumerTotal
At or For the Year Ended December 31, 2022
Beginning balance, December 31, 2021$18,834 $2,539 $4,183 $19 $6,133 $1,469 $79 $33,256 
Loans charged-off— — (1,042)— (66)— (134)(1,242)
Recoveries3 2 379 — — 87 7 478 
(Credit) provision for loan losses(1,541)(179)1,925 (18)3,022 669 552 4,430 
Ending balance, December 31, 2022$17,296 $2,362 $5,445 $1 $9,089 $2,225 $504 $36,922 
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 

In the fourth quarter of 2022, the Company completed its annual reassessment of significant model inputs and assumptions within its discounted cash flow analysis used for estimating its ACL on loans as of December 31, 2022. The Company has engaged with a third party to help provide economic forecasts that align with management’s expectations to help drive the model and allows the Company to use qualitative factors to use multiple economic scenarios. This update enhanced the quantitative model and allowed the Company to eliminate certain other qualitative factors.

The ACL on loans at December 31, 2022, was $36.9 million, an increase of $3.6 million, or 11%, since December 31, 2021. As of December 31, 2022 and 2021, the significant model inputs and assumptions used within the discounted cash flow model for purposes of estimating the ACL on loans were:
•Macroeconomic (loss) drivers: As of December 31, 2022 and 2021, the following loss drivers for each loan segment were used to calculate the expected PD over the forecast and reversion period: (i) commercial real estate – non-owner-occupied used Maine Unemployment and change in Maine GDP; (ii) commercial real estate – owner-occupied used Maine Unemployment and change in Maine GDP, (iii) commercial used Maine Unemployment and change in National GDP; (iv) residential real estate used Maine Unemployment and change in Maine House Price Index, (v) home equity
used Maine Unemployment and change in Maine House Price Index and (vi) consumer used Maine Unemployment and change in 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 as of December 31, 2022 and 2021.
•Reasonable and Supportable Forecast Period: As of December 31, 2022 and 2021, the ACL on loans estimate used a reasonable and supportable forecast period of one year.
•Reversion Period: As of December 31, 2022 and 2021, the ACL on loans estimate used a reversion period of one year.
•Prepayment Speeds: The estimate of prepayment speed for each loan segment continued to be derived used internally-sourced prepayment data as of December 31, 2022 and 2021.
•Qualitative Factors: As of December 31, 2022 and 2021, the ACL on loans estimate incorporated various qualitative factors into the calculation.

The ACL on loans at December 31, 2022, was $36.9 million, compared to $33.3 million at December 31, 2021. The overall increase in ACL was driven by the increase in the volume of loans, coupled with the volatility of the global markets and the high degree of uncertainty. Given the strong loan growth and the future economic uncertainty, the reserve increased $3.6 million during 2022. This increase was partially offset by the release of certain qualitative factors due to strong asset quality and the continued maturity of the overall model. The increase in the reserve represents the elevated risk of credit loss within the Company's portfolio.

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. As of December 31, 2022, the Company's total exposure to the lessors of nonresidential buildings' industry and lessors of residential buildings’ industry were 14% and 11% of total loans and 34% and 28% of total commercial real estate loans, respectively. There were no other industry concentrations exceeding 10% of the Company's total loan portfolio as of December 31, 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 periods indicated:
(In thousands)20222021202020192018PriorRevolving Loans
Amortized Cost Basis		Revolving Loans
Converted to Term		Total
As of December 31, 2022
Commercial real estate - non-owner-occupied      
Risk rating
Pass (Grades 1-6)$339,171 $287,749 $160,621 $125,029 $108,823 $242,024 $— $— $1,263,417 
Special mention (Grade 7)— 167 364 259 75 321 — — 1,186 
Substandard (Grade 8)— 127 1,306 203 7,798 18,406 — — 27,840 
Doubtful (Grade 9)— — — — — — — — — 
Total commercial real estate - non-owner-occupied339,171 288,043 162,291 125,491 116,696 260,751 — — 1,292,443 
Commercial real estate - owner-occupied 
Risk rating
Pass (Grades 1-6)60,127 80,781 28,378 23,381 39,554 70,568 — — 302,789 
Special mention (Grade 7)— 2,053 — 19,992 — 411 — — 22,456 
Substandard (Grade 8)17 — — — 3,266 3,966 — — 7,249 
Doubtful (Grade 9)— — — — — — — — — 
Total commercial real estate - owner-occupied60,144 82,834 28,378 43,373 42,820 74,945 — — 332,494 
Commercial
 
Risk rating
Pass (Grades 1-6)73,537 69,478 32,272 33,491 22,271 26,245 135,157 30,191 422,642 
Special mention (Grade 7)— — 93 141 70 189 1,196 12 1,701 
Substandard (Grade 8)149 52 133 216 846 1,524 50 2,186 5,156 
Doubtful (Grade 9)— — — — — — — — — 
Total commercial73,686 69,530 32,498 33,848 23,187 27,958 136,403 32,389 429,499 
SBA PPP
Risk rating
Pass (Grades 1-6)— 632 — — — — — — 632 
Special mention (Grade 7)— — — — — — — — — 
Substandard (Grade 8)— — — — — — — — — 
Doubtful (Grade 9)— — — — — — — — — 
Total SBA PPP— 632 — — — — — — 632 
Residential Real Estate  
Risk rating
Pass (Grades 1-6)533,035 579,216 244,691 79,492 50,214 210,262 340 — 1,697,250 
Special mention (Grade 7)— — — — — 23 — — 23 
Substandard (Grade 8)— — — — 163 2,830 — — 2,993 
Doubtful (Grade 9)— — — — — — — — — 
Total residential real estate533,035 579,216 244,691 79,492 50,377 213,115 340 — 1,700,266 
Home equity
  
Risk rating
Performing26,712 693 341 4,842 7,730 8,551 173,338 11,735 233,942 
Non-performing— — — — — 27 377 82 486 
Total home equity
26,712 693 341 4,842 7,730 8,578 173,715 11,817 234,428 
Consumer
  
Risk rating
Performing8,009 3,816 1,702 1,188 345 2,462 3,069 — 20,591 
Non-performing— — — — — — — — — 
Total consumer
8,009 3,816 1,702 1,188 345 2,462 3,069 — 20,591 
Total Loans$1,040,757 $1,024,764 $469,901 $288,234 $241,155 $587,809 $313,527 $44,206 $4,010,353 
(In thousands)20212020201920182017PriorRevolving 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-occupied286,949 188,349 162,198 128,257 100,854 311,578 — — 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-occupied91,328 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 commercial91,247 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 PPP35,634 319 — — — — — — 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 estate586,637 281,804 103,228 63,403 46,696 223,776 903 — 1,306,447 
Home equity      
Risk rating
Performing760 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 equity760 554 6,179 11,036 2,464 10,966 166,036 12,408 210,403 
Consumer      
Risk rating
Performing6,860 3,523 3,089 1,051 548 2,014 2,399 — 19,484 
Non-performing— 9 21 — — 2 — — 32 
Total consumer6,860 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 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, all other loans to the borrower are re-evaluated to determine if they should also be placed on non-accrual. All previously accrued and unpaid interest is reversed at this time. A loan will return to accrual 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 because they are 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 Due60 – 89 Days Past Due90 Days or Greater Past DueTotal Past DueCurrentTotal Loans OutstandingLoans > 90 Days Past Due and Accruing
December 31, 2022:
Commercial real estate - non-owner-occupied$267 $— $11 $278 $1,292,165 $1,292,443 $— 
Commercial real estate - owner-occupied55 — 47 102 332,392 332,494 — 
Commercial667 67 640 1,374 428,125 429,499 — 
SBA PPP— 67 — 67 565 632 — 
Residential real estate852 186 524 1,562 1,698,704 1,700,266 — 
Home equity357 — 171 528 233,900 234,428 — 
Consumer23 11 — 34 20,557 20,591 — 
Total$2,221 $331 $1,393 $3,945 $4,006,408 $4,010,353 $— 
December 31, 2021:
Commercial real estate - non-owner-occupied$— $— $51 $51 $1,178,134 $1,178,185 $— 
Commercial real estate - owner-occupied47 — 133 180 317,095 317,275 — 
Commercial282 174 787 1,243 362,452 363,695 — 
SBA PPP— 68 — 68 35,885 35,953 — 
Residential real estate379 475 1,210 2,064 1,304,383 1,306,447 — 
Home equity456 50 445 951 209,452 210,403 — 
Consumer95 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:
December 31,
20222021
(In thousands)Non-Accrual Loans With an AllowanceNon-Accrual Loans Without an AllowanceTotal Non-Accrual LoansNon-Accrual Loans With an AllowanceNon-Accrual Loans Without an AllowanceTotal Non-Accrual Loans
Commercial real estate - non-owner-occupied$— $11 $11 $38 $13 $51 
Commercial real estate - owner-occupied— 46 46 86 47 133 
Commercial415 300 715 785 44 829 
Residential real estate1,314 419 1,733 1,780 327 2,107 
Home equity421 65 486 1,064 111 1,175 
Consumer— — — 32 — 32 
Total$2,150 $841 $2,991 $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 date indicated:
December 31,
2022		December 31,
2021
Collateral TypeTotal Collateral -Dependent Non-Accrual LoansCollateral TypeTotal Collateral -Dependent Non-Accrual Loans
(In thousands)Real Estate Real Estate
Residential real estate$387 $387 $268 $268 
Home equity— — 111 111 
Total$387 $387 $379 $379 

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 years ended December 31, 2022, 2021, and 2020 is estimated to have been $145,000, $256,000, and $335,000, 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 years ended December 31, 2022, 2021, and 2020. As of December 31, 2022 and 2021, total accrued interest receivable on loans, which has been excluded from reported amortized cost basis on loans, was $10.3 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. 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,
202220212022202120222021
Commercial real estate - owner-occupied1 1 $113 $118 $50 $43 
Commercial— 2 — 74 — — 
Residential real estate18 19 2,208 2,341 307 348 
Consumer and home equity3 3 245 253 9 6 
Total22 25 $2,566 $2,786 $366 $397 

At December 31, 2022, the Company had performing and non-performing TDRs with a recorded investment balance of $2.1 million and $452,000, 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 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,
202220212020202220212020202220212020202220212020
Home Equity
Interest rate concession and payment deferral— 1 — $— $159 $— $— $170 $— $— $— $— 
Maturity concession1 2 — 69 187 — 96 187 — — 6 — 
Total1 3 — $69 $346 $— $96 $357 $— $— $6 $— 

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

For the years ended December 31, 2022, 2021 and 2020, no loans were modified as TDRs within the previous 12 months for which the borrower subsequently defaulted.

Effective January 1, 2023, the Company adopted ASU No. 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures ("ASU 2022-02") which eliminates the TDR recognition and measurement guidance and now requires the Company to evaluate if any modifications represent a new loan or continuation of an existing loan. Refer to Note 1 of the consolidated financial statements for further discussion of the Company's accounting recently adopted policy for the TDRs.

In-Process Foreclosure Proceedings
At December 31, 2022 and 2021, the Company had $481,000 and $888,000, respectively, of consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process.