Loans Receivable and Allowance for Loan Losses | Note 5 - Loans Receivable and Allowance for Loan Losses The following table presents the recorded investment in loans receivable at December 31, 2016 and December 31, 2015 by segment and class: December 31, 2016 December 31, 2015 (In Thousands) Originated loans: Residential one-to-four family $ 142,081 $ 117,165 Commercial and multi-family 1,056,806 982,828 Construction 70,867 64,008 Commercial business (1) 63,444 70,340 Home equity (2) 32,417 31,237 Consumer 1,269 2,365 Sub-total 1,366,884 1,267,943 Acquired loans recorded at fair value: Residential one-to-four family 56,310 67,587 Commercial and multi-family 60,422 79,308 Construction - - Commercial business (1) 4,460 4,281 Home equity (2) 13,877 18,851 Consumer 225 263 Sub-total 135,294 170,290 Acquired loans with deteriorated credit: Residential one-to-four family 1,443 1,474 Commercial and multi-family 753 669 Construction - - Commercial business (1) - 167 Home equity (2) - 71 Consumer - - Sub-total 2,196 2,381 Total Loans 1,504,374 1,440,614 Less: Deferred loan fees, net (2,006) (2,454) Allowance for loan losses (17,209) (18,042) (19,215) (20,496) Total Loans, net $ 1,485,159 $ 1,420,118 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. At December 31, 201 6 and 201 5 , loans serviced by the Bank for the benefit of others totaled approximately $184.1 million an d $184.1 million , respectively. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table presents the unpaid principal balance and the related recorded investment of acquired loans included in loans receivable in accompanying Consolidated Statements of Financial Condition. (In Thousands): December 31, December 31, 2016 2015 Unpaid principal balance $ 140,049 $ 183,046 Recorded investment 137,045 172,671 The following table presents changes in the accretable discount on loans acquired for the years ended December 31, 2016 and 2015. (In Thousands): Years Ended December 31, 2016 2015 Balance, Beginning of Period $ 53,612 $ 70,522 Accretion (14,976) (17,254) Net Reclassification from Non-Accretable Yield 483 344 Balance, End of Period $ 39,119 $ 53,612 The following table presents changes in the non-accretable yield on loans acquired for the years ended December 31, 2016 and 2015. (In Thousands): Years Ended December 31, 2016 2015 Balance, Beginning of Period $ 3,041 $ 3,773 Loans Sold - (388) Net Reclassification to Accretable Difference (483) (344) Balance, End of Period $ 2,558 $ 3,041 Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The Bank grants loans to its officers and dire ctors and to their associates. The activity with respect to loans to directors, officers and associates of such persons, is as follows: Years Ended December 31, 2016 2015 (In Thousands) Balance – beginning $ 12,444 $ 11,430 Loans originated 386 1,095 Collections of principal (1,461) (81) Change in related party status (2,817) 0 Balance - ending $ 8,552 $ 12,444 Allowance for Loan Losses Management reviews the adequacy of the allowance on at least a quarterly basis to ensure that the provision for loan losses has been charged against earnings in an amount necessary to maintain the allowance at a level that is adequate based on management’s assessment of probable estimated losses. The Company’s methodology for assessing the adequacy of the allowance for loan losses co nsists of several key elements. These elements include a general allocated reserve for performing loans , a specific reserve for impaired loans and an unallocated portion. The Company consistently applies the follo wing comprehensive methodology. During the quarterly review of the allowance for loan losses, the Company considers a variety of qualitative factors that include: • General economic conditions. • Trends in charge-offs. • Trends and levels of delinquent loans. • Trends and levels of non-performing loans, including loans over 90 days delinquent. • Trends in volume and terms of loans. • Levels of allowance for specific classified loans. • Credit concentrations. The methodology includes the segregation of the loan portfolio into two divisions. Loans that are performing and loans that are impaired. Loans which are performing are evaluated homogeneously by loan class or loan type. The allowance for performing loans is evaluated based on histori cal loan experience, including consideration of peer loss analysis, with an adjustment for qualitative factors referred to above . Impaired loans are loans which are more than 90 days delinquent or troubled debt restructured. These loans are individually evaluated for loan loss either by current appraisal, or net present value. Management reviews the overall estimate for feasibility and bases the loan loss provision accordingly. The loan portfolio is segmented into the following loan classes, where the risk level for each class is analyzed when determining the allowance for loan losses: Residential single family real estate loans involve certain risks such as interest rate risk and risk of non-repayment. Adjustable-rate residential family real estate loans decreases the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk may be affected by a number of factors including, but not necessarily limited to, job loss, divorce, illness and personal bankruptcy of the borrower. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) Construction lending is generally considered to involve a high risk due to the concentration of principal in a limited number of loans and borrowers and the effects of the general economic conditions on developers and builders. Moreover, a construction loan can involve additional risks because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost (including interest) of the project. The nature of these loans is such that they are generally difficult to evaluate and monitor. In addition, speculative construction loans to a builder are not necessarily pre-sold and thus pose a greater potential risk to the Bank than construction loans to individuals on their personal residence. Commercial and multi-family real estate lending entails significant additional risks as compared with residential family property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. The payment experience on such loans is typically dependent on the successful operation of the real estate project. The success of such projects is sensitive to changes in supply and demand conditions in the market for commercial real estate as well as economic conditions generally. Commercial business lending, including lines of credit, is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Commercial business loans are primarily secured by inventories and other business assets. In most cases, any repossessed collateral for a defaulted commercial business loans will not provide an adequate source of repayment of the outstanding loan balance. Home equity lending entails certain risks such as interest rate risk and risk of non-repayment. The marketability of the underlying property may be adversely affected by higher interest rates, decreasing the collateral securing the loan. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower. Home equity line of credit lending entails securing an equity interest in the borrower’s home. In many cases, the Bank’s position in these loans is as a junior lien holder to another institution’s superior lien. This type of lending is often priced on an adjustable rate basis with the rate set at or above a predefined index. Adjustable-rate loans decreases the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. Other consumer loans generally have more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans generally have shorter terms and higher interest rates than other lending. In addition, consumer lending collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely effected by job loss, divorce, illness and personal bankruptcy. In most cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan. The Company also maintains an unallocated allowance. The unallocated allowance is used to cover any factors or conditions which may cause a potential loan loss but are not specifically identifiable. It is prudent to maintain an unallocated portion of the allowance because no matter how detailed an analysis of potential loan losses is performed, these estimates lack some element of precision. Management must make estimates using assumptions and information that is often subjective and changing rapidly. Classified Assets . Our policies provide for a classifica tion system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful, ” “loss” or “special mention.” When we classify problem assets, we may establish general allowances for loan losses in an amount deemed prudent by management. General allowances represent loss allowances which have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular problem assets. A portion of general loss allowances established to cover possible losses related to assets classified as substandard or doubtful may be included in determining our regulatory capital. Specific valuation allowances for loan losses generally do not qualify as regulatory capital. As of December 31, 2016, we had $320,000 in assets classified as losses, of which $320,000 were classified as impaired, $29 million in assets classified as substandard, of which $29.0 million were classified as impaired, and $ $18.9 million in assets classified as special mention, of which $9.6 million were classified as impaired. The loans classified as substandard represent primarily commercial loans secured either by residential real estate, commercial real estate or heavy equipment. The loans that have been classified substandard were classified as such primarily due to payment status, because updated financial information has not been timely provided, or the collateral underlying the loan is in the process of being revalued. The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies. The grades assigned and definitions are as follows, and loans graded excellent, above average, good and watch list (risk ratings 1-4) are treated as “pass” for grading purposes: 5 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency. 6 – Substandard - Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “nonaccrual” status. The loan needs special and corrective attention. 7 – Doubtful - Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status. 8 – Loss - Continuance as a bankable asset is not warranted. However, this does not preclude future attempts at partial recovery. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the activity in the Bank’s allowance for loan losses for the year ended December 31, 2016 and recorded investment in loans receivable at December 31, 2016. The table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan class (In Thousands): Commercial & Commercial Home Residential Multi-family Construction Business (1) equity (2) Consumer Unallocated Total Allowance for credit losses: Originated Loans $ 2,107 $ 11,643 $ 722 $ 1,749 $ 369 $ 879 $ 168 $ 17,637 Acquired loans recorded at fair value 270 17 - - 50 - - 337 Acquired loans with deteriorated credit 47 14 - 4 3 - - 68 Beginning Balance, December 31, 2016 2,424 11,674 722 1,753 422 879 168 18,042 Charge-offs: Originated Loans - 367 - 160 - - - - 527 Acquired loans recorded at fair value 459 38 - 3 54 - - - 554 Acquired loans with deteriorated credit - - - - - - - - - Sub-total 459 405 - 163 54 - - 1,081 Recoveries: Originated Loans - 74 - - - - - 74 Acquired loans recorded at fair value - 4 - - 14 - - 18 Acquired loans with deteriorated credit - - - 129 - - - 129 Sub-total - 78 - 129 14 - - 221 Provisions: Originated Loans (9) (729) 14 1,490 5 (877) (99) (205) Acquired loans recorded at fair value 359 17 - 3 (6) - - 373 Acquired loans with deteriorated credit (4) (1) - (133) (3) - - (141) Sub-total 346 (713) 14 1,360 (4) (877) (99) 27 Totals: Originated Loans 2,098 10,621 736 3,079 374 2 69 16,979 Acquired loans recorded at fair value 170 - - - 4 - - 174 Acquired loans with deteriorated credit 43 13 - - - - - 56 Ending Balance, December 31, 2016 $ 2,311 $ 10,634 $ 736 $ 3,079 $ 378 $ 2 $ 69 $ 17,209 Loans Receivables: Ending Balance Originated Loans 142,081 1,056,806 70,867 63,444 32,417 1,269 - 1,366,884 Ending Balance Acquired Loans 56,310 60,422 - 4,460 13,877 225 - 135,294 Ending Balance Acquired loans with deteriorated credit 1,443 753 - - - - - 2,196 Total Gross Loans $ 199,834 $ 1,117,981 $ 70,867 $ 67,904 $ 46,294 $ 1,494 - $ 1,504,374 Ending Balance: Loans individually evaluated for impairment: Ending Balance Originated Loans 10,651 12,325 6 4,088 1,362 - - 28,432 Ending Balance Acquired Loans 7,600 6,356 - - 1,065 - - 15,021 Ending Balance Acquired loans with deteriorated credit 1,443 523 - - - - - 1,966 Ending Balance Loans individually evaluated for impairment $ 19,694 $ 19,204 $ 6 $ 4,088 $ 2,427 $ - $ - $ 45,419 Ending Balance: Loans collectively evaluated for impairment: Ending Balance Originated Loans 131,430 1,044,481 70,861 59,356 31,055 1,269 - 1,338,452 Ending Balance Acquired Loans 48,710 54,066 - 4,460 12,812 225 - 120,273 Ending Balance Acquired loans with deteriorated credit - 230 - - - - - 230 Ending Balance Loans collectively evaluated for impairment $ 180,140 $ 1,098,777 $ 70,861 $ 63,816 $ 43,867 $ 1,494 $ - $ 1,458,955 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the activity in the Bank’s allowance for loan losses for the year ended December 31, 2015 and recorded investment in loans receivable at December 31, 2015. The table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan class (In Thousands): Commercial & Commercial Home Residential Multi-family Construction Business (1) equity (2) Consumer Unallocated Total Allowance for credit losses: Originated Loans $ 2,364 $ 10,028 $ 1,080 $ 876 $ 333 $ 449 $ 121 $ 15,251 Acquired loans recorded at fair value 417 102 - - 58 - - 577 Acquired loans with deteriorated credit 64 23 - 233 3 - - 323 Beginning Balance, December 31, 2015 2,845 10,153 1,080 1,109 394 449 121 16,151 Charge-offs: Originated Loans - 10 - 80 - - - - 90 Acquired loans recorded at fair value 67 - - - 106 - - - 173 Acquired loans with deteriorated credit - - - 199 - - - - 199 Sub-total 67 10 - 279 106 - - 462 Recoveries: Originated Loans - 70 - - - - - 70 Acquired loans recorded at fair value - - - - 3 - - 3 Acquired loans with deteriorated credit - - - - - - - - Sub-total - 70 - - 3 - - 73 Provisions: Originated Loans (257) 1,555 (358) 953 36 430 47 2,406 Acquired loans recorded at fair value (80) (85) - - 95 - - (70) Acquired loans with deteriorated credit (17) (9) - (30) - - - (56) Sub-total (354) 1,461 (358) 923 131 430 47 2,280 Totals: Originated Loans 2,107 11,643 722 1,749 369 879 168 17,637 Acquired loans recorded at fair value 270 17 - - 50 - - 337 Acquired loans with deteriorated credit 47 14 - 4 3 - - 68 Ending Balance, December 31, 2015 $ 2,424 $ 11,674 $ 722 $ 1,753 $ 422 $ 879 $ 168 $ 18,042 Loans Receivables: Ending Balance Originated Loans 117,165 982,828 64,008 70,340 31,237 2,365 - 1,267,943 Ending Balance Acquired Loans 67,587 79,308 - 4,281 18,851 263 - 170,290 Ending Balance Acquired loans with deteriorated credit 1,474 669 - 167 71 - - 2,381 Total Gross Loans $ 186,226 $ 1,062,805 $ 64,008 $ 74,788 $ 50,159 $ 2,628 $ - $ 1,440,614 Ending Balance: Loans individually evaluated for impairment: Ending Balance Originated Loans 9,120 14,681 - 4,203 1,456 1,463 - 30,923 Ending Balance Acquired Loans 9,885 6,775 - - 1,363 - - 18,023 Ending Balance Acquired loans with deteriorated credit 1,474 426 - 167 71 - - 2,138 Ending Balance Loans individually evaluated for impairment $ 20,479 $ 21,882 $ - $ 4,370 $ 2,890 $ 1,463 $ - $ 51,084 Ending Balance: Loans collectively evaluated for impairment: Ending Balance Originated Loans 108,045 968,147 64,008 66,137 29,781 902 - 1,237,020 Ending Balance Acquired Loans 57,702 72,533 - 4,281 17,488 263 - 152,267 Ending Balance Acquired loans with deteriorated credit - 243 - - - - - 243 Ending Balance Loans collectively evaluated for impairment $ 165,747 $ 1,040,923 $ 64,008 $ 70,418 $ 47,269 $ 1,165 $ - $ 1,389,530 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the activity in the Bank’s allowance for loan losses for the year ended December 31, 2014 and recorded investment in loans receivable at December 31, 2014. The table also details the amount of total loans receivable, that are evaluated individually, and collectively, for impairment, and the related portion of the allowance for loan losses that is allocated to each loan class (In Thousands): Commercial Commercial Home Residential & Multi-family Construction Business (1) equity (2) Consumer Unallocated Total Allowance for credit losses: Originated Loans: $ 1,729 $ 7,419 $ 700 $ 1,295 $ 363 $ 3 $ 83 $ 11,592 Acquired loans recorded at fair value: 832 1,744 1 44 129 - - 2,750 Acquired loans with deteriorated credit: - - - - - - - - - Beginning Balance, December 31, 2014 2,561 9,163 701 1,339 492 3 83 14,342 Charge-offs: Originated Loans: - 388 - 208 27 - - - 623 Acquired loans recorded at fair value: 28 755 - - 29 2 - - 814 Acquired loans with deteriorated credit: - - - - - - - - - Sub-total: 28 1,143 - 208 56 2 - 1,437 Recoveries: Originated Loans: - 125 - 174 - - - 299 Acquired loans recorded at fair value: - 73 65 - 6 3 - 147 Acquired loans with deteriorated credit: - - - - - - - - Sub-total: - 198 65 174 6 3 - 446 Provisions: Originated Loans: 635 2,872 380 (385) (3) 446 38 3,983 Acquired loans recorded at fair value: (387) (960) (66) (44) (48) (1) - (1,506) Acquired loans with deteriorated credit: 64 23 - 233 3 - - 323 Sub-total: 312 1,935 314 (196) (48) 445 38 2,800 Totals: Originated Loans: 2,364 10,028 1,080 876 333 449 121 15,251 Acquired loans recorded at fair value: 417 102 - - 58 - - 577 Acquired loans with deteriorated credit: 64 23 - 233 3 - - 323 Ending Balance, December 31, 2014 $ 2,845 $ 10,153 $ 1,080 $ 1,109 $ 394 $ 449 $ 121 $ 16,151 Loans Receivables: Ending Balance Originated Loans: 124,642 732,791 73,497 54,244 30,175 2,178 - 1,017,527 Ending Balance Acquired Loans: 81,051 95,191 - 6,381 22,698 652 - 205,973 Ending Balance Acquired loans with deteriorated credit: 1,595 1,130 - 369 82 - - 3,176 Total Gross Loans: $ 207,288 $ 829,112 $ 73,497 $ 60,994 $ 52,955 $ 2,830 $ - $ 1,226,676 Ending Balance: Loans individually evaluated for impairment: Ending Balance Originated Loans: 12,044 9,522 - 4,935 1,086 1,851 - 29,438 Ending Balance Acquired Loans: 9,783 6,377 - - 1,164 - - 17,324 Ending Balance Acquired loans with deteriorated credit: 1,595 877 - 369 82 - - 2,923 Ending Balance Loans individually evaluated for impairment: $ 23,422 $ 16,776 $ - $ 5,304 $ 2,332 $ 1,851 $ - $ 49,685 Ending Balance: Loans collectively evaluated for impairment: Ending Balance Originated Loans: 112,598 723,269 73,497 49,309 29,089 327 - 988,089 Ending Balance Acquired Loans: 71,268 88,814 - 6,381 21,534 652 - 188,649 Ending Balance Acquired loans with deteriorated credit: - 253 - - - - - 253 Ending Balance Loans collectively evaluated for impairment: $ 183,866 $ 812,336 $ 73,497 $ 55,690 $ 50,623 $ 979 $ - $ 1,176,991 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The table below sets forth the amounts and types of non-accrual loans in the Bank’s loan portfolio, at December 31, 2016 and 2015, respectively. Loans are placed on non-accrual status when they become more than 90 days delinquent, or when the collection of principal and/or interest become doubtful. As of December 31, 2016 and 2015, non-accrual loans differed from the amount of total loans past due greater than 90 days due to troubled debt restructuring of loans which are maintained on non-accrual status for a minimum of six months until the borrower has demonstrated its ability to satisfy the terms of the restructured loan. As of December 31, 2016 As of December 31, 2015 (In Thousands) (In Thousands) Non-Accruing Loans: Originated loans: Residential one-to-four family $ 3,693 $ 2,603 Commercial and multi-family 5,437 9,782 Construction - - Commercial business (1) 726 718 Home equity (2) 416 777 Consumer 6 - Sub-total: $ 10,278 $ 13,880 Acquired loans recorded at fair value: Residential one-to-four family $ 3,429 $ 5,592 Commercial and multi-family 1,182 3,025 Construction - - Commercial business (1) - - Home equity (2) 763 665 Consumer - - Sub-total: $ 5,374 $ 9,282 Acquired loans with deteriorated credit: Residential one-to-four family $ - $ - Commercial and multi-family - - Construction - - Commercial business (1) - 167 Home equity (2) - 118 Consumer - - Sub-total: $ - $ 285 Total $ 15,652 $ 23,447 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Had non-accrual loans been performing in accordance with their original terms, the interest income recognized for the years ended December 31, 201 6 , 2015 and 2014 would have been approximately $1.06 million, $1.13 million and $1.06 million, respectively. Interest income recognized on such loans was approximately $798,000 , $326,000 and $784,000 respectively. The Bank is not committed to lend additional funds to the borrowers whose loans have been placed on a nonaccrual status. At December 31, 2016 and 2015, there were $2.8 million and $586,000 , respectively, of loans which were more than ninety days past due and still accruing interest . Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table summarizes the recorded investment and unpaid principal balances where there is no related allowance on impaired loans by portfolio class for the years ended December 31, 2016 and December 31, 2015. (In Thousands): As of December 31, 2016 As of December 31, 2015 Recorded Unpaid Principal Related Recorded Unpaid Principal Related Originated loans Investment Balance Allowance Investment Balance Allowance with no related allowance recorded: Residential one-to-four family $ 5,158 $ 5,341 $ - $ 3,136 $ 3,199 $ - Commercial and multi-family 10,498 10,722 - 10,709 10,934 - Construction 6 6 - - - - Commercial business (1) 1,022 1,966 - 2,123 3,183 - Home equity (2) 1,022 1,101 - 1,270 1,326 - Consumer - - - - - - Sub-total: $ 17,706 $ 19,136 $ - $ 17,238 $ 18,642 $ - Acquired loans recorded at fair value with no related allowance recorded: Residential one-to-four family $ 5,577 $ 6,149 $ - $ 7,646 $ 8,082 $ - Commercial and Multi-family 5,575 5,710 - 4,383 4,483 - Construction - - - - - - Commercial business (1) - - - - - - Home equity (2) 545 650 - 884 1,061 - Consumer - - - - - - Sub-total: $ 11,697 $ 12,509 $ - $ 12,913 $ 13,626 $ - Acquired loans with deteriorated credit with no related allowance recorded: Residential one-to-four family $ 1,443 $ 2,069 $ - $ 1,474 $ 2,101 $ - Commercial and Multi-family 523 552 - 426 574 - Construction - - - - - - Commercial business (1) - - - - - - Home equity (2) - - - 71 135 - Consumer - - - - - - Sub-total: $ 1,966 $ 2,621 $ - $ 1,971 $ 2,810 $ - Total Impaired Loans with no related allowance recorded: $ 31,369 $ 34,266 $ - $ 32,122 $ 35,078 $ - __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table summarizes the recorded investment, unpaid principal balance, and the related allowance on impaired loans by portfolio class for the years ended December 31, 2016 and December 31, 2015. (In Thousands): As of December 31, 2016 As of December 31, 2015 Recorded Unpaid Principal Related Recorded Unpaid Principal Related Originated loans Investment Balance Allowance Investment Balance Allowance with an allowance recorded: Residential one-to-four family $ 5,493 $ 5,493 $ 496 $ 5,984 $ 5,993 $ 594 Commercial and Multi-family 1,827 1,866 380 3,972 3,972 1,069 Construction - - - - - - Commercial business (1) 3,066 4,006 2,359 2,080 2,445 841 Home equity (2) 340 340 32 186 189 3 Consumer - - - 1,463 1,463 876 Sub-total: $ 10,726 $ 11,705 $ 3,267 $ 13,685 $ 14,062 $ 3,383 Acquired loans recorded at fair value with an allowance recorded: Residential one-to-four family $ 2,023 $ 2,080 $ 202 $ 2,239 $ 2,402 $ 219 Commercial and Multi-family 781 781 37 2,392 2,496 85 Construction - - - - - - Commercial business (1) - - - - - - Home equity (2) 520 571 24 479 518 36 Consumer - - - - - - Sub-total $ 3,324 $ 3,432 $ 263 $ 5,110 $ 5,416 $ 340 Acquired loans with deteriorated credit with an allowance recorded: Residential one-to-four family $ - $ - $ - $ - $ - $ - Commercial and Multi-family - - - - - - Construction - - - - - - Commercial business (1) - - - 167 368 - Home equity (2) - - - - - - Consumer - - - - - - Sub-total: $ - $ - $ - $ 167 $ 368 $ - Total Impaired Loans with an allowance recorded: $ 14,050 $ 15,137 $ 3,530 $ 18,962 $ 19,846 $ 3,723 Total Impaired Loans with no related allowance recorded: $ 31,369 $ 34,266 $ - $ 32,122 $ 35,078 $ - Total Impaired Loans: $ 45,419 $ 49,403 $ 3,530 $ 51,084 $ 54,924 $ 3,723 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table summarizes the average recorded investment and actual interest income recognized on impaired loans with no related allowance recorded by portfolio class for the years ended December 31, 2016 and 2015. (In Thousands): Years Ended December 31, 2016 2016 2015 2015 Average Interest Average Interest Recorded Income Recorded Income Originated loans Investment Recognized Investment Recognized with no related allowance recorded: Residential one-to-four family $ 4,613 $ 281 $ 2,996 $ 83 Commercial and multi-family 10,820 563 9,599 322 Construction 746 - - - Commercial business (1) 1,678 116 2,438 8 Home equity (2) 1,002 60 1,073 41 Consumer 2 - - - Sub-total: $ 18,861 $ 1,020 $ 16,106 $ 454 Acquired loans recorded at fair value with no related allowance recorded: Residential one-to-four family $ 5,234 $ 345 $ 6,849 $ 289 Commercial and Multi-family 5,055 332 4,639 120 Construction - - - - Commercial business (1) - - - - Home equity (2) 583 37 796 25 Consumer - - - - Sub-total: $ 10,872 $ 714 $ 12,284 $ 434 Acquired loans with deteriorated credit with no related allowance recorded: Residential one-to-four family $ 1,455 $ 89 $ 1,486 $ - Commercial and Multi-family 527 28 760 - Construction - - - - Commercial business (1) - - 90 - Home equity (2) 19 - 76 4 Consumer - - - - Sub-total: $ 2,001 $ 117 $ 2,412 $ 4 Total Impaired Loans with no related allowance recorded: $ 31,734 $ 1,851 $ 30,802 $ 892 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table summarizes the average recorded investment and actual interest income recognized on impaired loans with allowance recorded by portfolio class for the years ended December 31, 2016 and 2015. (In Thousands): Years Ended December 31, 2016 2016 2015 2015 Average Interest Average Interest Recorded Income Recorded Income Originated loans Investment Recognized Investment Recognized with an allowance recorded: Residential one-to-four family $ 5,564 $ 253 $ 7,211 $ 48 Commercial and Multi-family 3,122 39 3,650 190 Construction - - - - Commercial business (1) 2,406 139 2,170 37 Home equity (2) 278 16 281 2 Consumer 632 - 1,515 - Sub-total: $ 12,002 $ 447 $ 14,827 $ 277 Acquired loans recorded at fair value with an allowance recorded: Residential one-to-four family $ 3,342 $ 69 $ 3,187 $ 27 Commercial and Multi-family 1,077 44 2,275 57 Construction - - - - Commercial business (1) - - - - Home equity (2) 674 17 358 12 Consumer - - - - Sub-total $ 5,093 $ 130 $ 5,820 $ 96 Acquired loans with deteriorated credit with an allowance recorded: Residential one-to-four family $ - $ - $ 67 $ - Commercial and Multi-family - - - - Construction - - - - Commercial business (1) 41 - 84 5 Home equity (2) - - - - Consumer - - - - Sub-total: $ 41 $ - $ 151 $ 5 Total Impaired Loans with an allowance recorded: $ 17,136 $ 577 $ 20,798 $ 378 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 5 - Loans Receivable and Allowance for Loan Losses (Continued) The following table presents the total troubled debt restructured loans at December 31, 2016, excluding the purchase impairment mark on the acquired loans with deteriorated credit: Accrual Non-accrual Total December 31, 2016 # of Loans Amount # of Loans Amount # of Loans Amount (Actual) (In Thousands) (Actual) (In Thousands) (Actual) (In Thousands) Originated loans: Residential one-to-four family 8 $ 2,687 - $ - 8 $ 2,687 Commercial and multi-family 9 5,141 8 2,297 17 7,438 Construction - - - - - - Commercial business (1) 2 1,868 1 345 3 2,213 Home equity (2) 5 817 1 46 6 863 Consumer - - - - - - Sub-total: 24 $ 10,513 10 $ 2,688 34 $ 13,201 Acquired loans recorded at fair value: Residential one-to-four family 18 $ 3,979 5 $ 1,893 23 $ 5,872 Commercial and Multi-family 13 4,807 1 583 14 5,390 Construction - - - - - - Commercial business (1) - - |