Loans Receivable and Allowance for Loan Losses | Note 7 - Loans Receivable and Allowance for Loan Losses The following tables present the recorded investment in loans receivable as of March 31, 2020 and December 31, 2019 by segment and class: March 31, 2020 December 31, 2019 (In Thousands) Residential one-to-four family $ 268,137 $ 248,381 Commercial and multi-family 1,577,816 1,606,976 Construction 101,692 104,996 Commercial business (1) 177,146 177,642 Home equity (2) 64,857 64,638 Consumer 1,029 682 2,190,677 2,203,315 Less: Deferred loan fees, net ( 1,086 ) ( 1,174 ) Allowance for loan losses ( 25,534 ) ( 23,734 ) Sub-total ( 26,620 ) ( 24,908 ) Total Loans, net $ 2,164,057 $ 2,178,407 (1) Includes business lines of credit. (2) Includes home equity lines of credit. Purchased Credit Impaired Loans The carrying value of loans acquired in the IAB acquisition and accounted for in accordance with ASC Subtopic 310-30, “Loans and Debt Securities Acquired with Deteriorated Credit Quality,” was $ 1.4 million at March 31, 2020, and $ 3.8 million at December 31, 2019. Under ASC Subtopic 310-30, these loans, referred to as purchased credit impaired (“PCI”) loans, may be aggregated and accounted for as pools of loans if the loans being aggregated have common risk characteristics. The Company elected to account for the loans with evidence of credit deterioration individually rather than aggregate them into pools. The difference between the undiscounted cash flows expected at acquisition and the investment in the acquired loans, or the “accretable yield,” is recognized as interest income utilizing the level-yield method over the life of each loan. Contractually required payments for interest and principal that exceed the undiscounted cash flows expected at acquisition, or the “non- accretable difference,” are not recognized as a yield adjustment, as a loss accrual or as a valuation allowance. The balance of these loans from other, prior acquisitions was not material. Increases in expected cash flows subsequent to the acquisition are recognized prospectively through an adjustment of the yield on the loans over the remaining life, while decreases in expected cash flows are recognized as impairments through a loss provision and an increase in the allowance for loan and lease losses. Valuation allowances (recognized in the allowance for loan and lease losses) on these impaired loans reflect only losses incurred after the acquisition (representing all cash flows that were expected at acquisition but currently are not expected to be received). The following table presents changes in the accretable discount on loans acquired with deteriorated credit quality for which the Company applies the provisions of ASC 310-30 (in thousands): Three months ended March 31, 2020 Three months ended March 31, 2019 Balance, beginning of Period $ 1,681 $ 2,704 Accretion recorded to interest income ( 145 ) ( 253 ) Balance, end of Period $ 1,536 $ 2,451 Note 7 - 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 the Company’s Consolidated Statements of Financial Condition. (In thousands): March 31, December 31, 2020 2019 Unpaid principal balance $ 214,773 $ 226,333 Recorded investment 183,208 192,826 Allowance for Loan Losses The allowance for loan loss is evaluated regularly by management and reflects consideration of all significant factors that affect the collectability of the loan portfolio. The Company’s methodology for assessing the adequacy of the allowance for loan losses consists 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 following comprehensive methodology. During the quarterly review of the allowance for loan losses, the Company considers a variety of qualitative factors that include: Lending Policies and Procedures Personnel responsible for the particular portfolio - relative to experience and ability of staff Trend for past due, criticized and classified loans Relevant economic factors Quality of the loan review system Value of collateral for collateral dependent loans The effect of any concentrations of credit and the changes in the level of such concentrations Other external factors 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 by loan class or loan type. The allowance for performing loans is evaluated based on historical loan loss experience with an adjustment for qualitative factors referred to above. Impaired loans are loans which are more than 90 days delinquent, troubled debt restructured, or adversely classified. These loans are individually evaluated for loan loss either by current appraisal, or net present value. Management reviews the overall estimate for feasibility and establishes the loan loss provision accordingly. The loan portfolio is segmented into the following loan segments, where the risk level for each class is analyzed when determining the allowance for loan losses: Residential one-to-four family real estate loans involve certain risks such as interest rate risk and risk of non-repayment. Adjustable-rate residential real estate loans decrease 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 properties 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. Commercial and multi-family real estate lending entails 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. 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 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 many 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 value 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 decrease 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 affected by job loss, divorce, illness and personal bankruptcy. In many cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan. An unallocated component is maintained to cover uncertainties that could affect management’s estimates of probable losses. The unallocated component of the allowance reflects the margin of imprecision inherent in underlying assumptions used in the methodologies for estimating allocated and general reserves in the portfolio. The impact of COVID-19 on companies is evolving rapidly and its future effects are uncertain. Although several of the Company’s asset quality metrics have not significantly been adversely affected during the first quarter of 2020, management determined it is prudent to increase its loan loss reserves through the addition of $ 1.5 million in loan loss provisions for the quarter ended March 31, 2020. This compares to a credit to the provision for loan losses of $ 475,000 during the previous quarter and an $ 889,000 provision for loan losses in the first quarter a year ago. The loan loss reserve to total loans ratio was 1.17 percent at March 31, 2020 compared to 0.99 percent at March 31, 2019. The increased reserve includes provisions taken in response to changes in risks associated with loan classification assignments and a slowing economy in New Jersey and New York. The Bank considered qualitative factors, such as changes in underwriting policies, current economic conditions, delinquency statistics, the adequacy of the underlying collateral and the financial strength of the borrower. All of these factors are likely to be affected by the COVID-19 pandemic. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the activity in the Company’s allowance for loan losses for the three months ended March 31, 2020, and the related portion of the allowances for loan losses that is allocated to each loan class, as of March 31, 2020 (in thousands): Residential Commercial & Multi-family Construction Commercial Business (1) Home Equity (2) Consumer Unallocated Total Allowance for loan losses: Originated Loans: $ 2,422 $ 15,235 $ 1,244 $ 2,945 $ 330 $ - $ 273 $ 22,449 Acquired loans initially recorded at fair value: 261 58 - 803 - - - 1,122 Acquired loans with deteriorated credit: 39 79 - 42 3 - - 163 Beginning Balance, January 1, 2020 2,722 15,372 1,244 3,790 333 - 273 23,734 Charge-offs: Originated Loans: Acquired loans initially recorded at fair value: 4 - - - - - - 4 Sub-total: 4 - - - - - - 4 Recoveries: Originated Loans: - - - 302 - - - 302 Acquired loans initially recorded at fair value: - - - - 2 - - 2 Sub-total: - - - 302 2 - - 304 Provisions: Originated Loans: 365 ( 368 ) ( 139 ) ( 243 ) 291 5 1,489 1,400 Acquired loans initially recorded at fair value: 49 5 - 107 ( 2 ) - - 159 Acquired loans with deteriorated credit: ( 1 ) ( 60 ) - 1 1 - - ( 59 ) Sub-total: 413 ( 423 ) ( 139 ) ( 135 ) 290 5 1,489 1,500 Totals: Originated Loans: 2,787 14,867 1,105 3,004 621 5 1,762 24,151 Acquired loans initially recorded at fair value: 306 63 - 910 - - - 1,279 Acquired loans with deteriorated credit: 38 19 - 43 4 - - 104 Ending Balance, March 31, 2020 $ 3,131 $ 14,949 $ 1,105 $ 3,957 $ 625 $ 5 $ 1,762 $ 25,534 Ending Balance attributable to loans: Individually evaluated for impairment $ 354 $ 332 $ - $ 2,524 $ 22 $ - $ - $ 3,232 Collectively evaluated for impairment 2,777 14,617 1,105 1,433 603 5 1,762 22,302 Totals: $ 3,131 $ 14,949 $ 1,105 $ 3,957 $ 625 $ 5 $ 1,762 $ 25,534 Loans Receivable: Originated Loans: $ 232,892 $ 1,463,122 $ 101,692 $ 157,351 $ 51,393 $ 1,019 $ - $ 2,007,469 Acquired loans initially recorded at fair value: 33,905 113,973 - 18,888 13,230 10 - 180,006 Acquired loans with deteriorated credit: 1,340 721 - 907 234 - - 3,202 Total Gross Loans: $ 268,137 $ 1,577,816 $ 101,692 $ 177,146 $ 64,857 $ 1,029 $ - $ 2,190,677 Ending Balance: Loans individually evaluated for impairment: Originated Loans: $ 2,896 $ 3,901 $ - $ 2,089 $ 1,007 $ - $ - $ 9,893 Acquired loans initially recorded at fair value: 4,099 5,273 - 512 285 - - 10,169 Acquired loans with deteriorated credit: 1,340 721 - 865 34 - - 2,960 Loans individually evaluated for impairment: $ 8,335 $ 9,895 $ - $ 3,466 $ 1,326 $ - $ - $ 23,022 Ending Balance: Loans collectively evaluated for impairment: Originated Loans: $ 229,996 $ 1,459,221 $ 101,692 $ 155,262 $ 50,386 $ 1,019 $ - $ 1,997,576 Acquired loans initially recorded at fair value: 29,806 108,700 - 18,376 12,945 10 - 169,837 Acquired loans with deteriorated credit: - - - 42 200 - - 242 Loans collectively evaluated for impairment: $ 259,802 $ 1,567,921 $ 101,692 $ 173,680 $ 63,531 $ 1,029 $ - $ 2,167,655 (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the activity in the Company’s allowance for loan losses for the three months ended March 31, 2019 (in thousands). Residential Commercial & Multi-family Construction Commercial Business (1) Home Equity (2) Consumer Unallocated Total Allowance for loan losses: Originated Loans: $ 2,374 $ 14,000 $ 1,003 $ 3,869 $ 313 $ 2 $ 189 $ 21,750 Acquired loans initially recorded at fair value: 335 - - - - - - 335 Acquired loans with deteriorated credit: 39 168 - 64 3 - - 274 Beginning Balance, January 1, 2019 2,748 14,168 1,003 3,933 316 2 189 22,359 Charge-offs: Originated Loans: - 111 - 145 - - - 256 Sub-total: - 111 - 145 - - - 256 Recoveries: Originated Loans: - - - 9 - - - 9 Acquired loans initially recorded at fair value: - - - - 3 - - 3 Sub-total: - - - 9 3 - - 12 Provisions: Originated Loans: 97 1,188 206 ( 405 ) ( 48 ) ( 2 ) ( 157 ) 879 Acquired loans initially recorded at fair value: 69 - - - ( 3 ) - - 66 Acquired loans with deteriorated credit: ( 7 ) ( 24 ) - ( 25 ) - - - ( 56 ) Sub-total: 159 1,164 206 ( 430 ) ( 51 ) ( 2 ) ( 157 ) 889 Totals: Originated Loans: 2,471 15,077 1,209 3,328 265 - 32 22,382 Acquired loans initially recorded at fair value: 404 - - - - - - 404 Acquired loans with deteriorated credit: 32 144 - 39 3 - - 218 Ending Balance, March 31, 2019 $ 2,907 $ 15,221 $ 1,209 $ 3,367 $ 268 $ - $ 32 $ 23,004 _____________________________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the amount recorded in loans receivable at December 31, 2019. 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). Residential Commercial & Multi-family Construction Commercial Business (1) Home Equity (2) Consumer Unallocated Total Allowance for credit losses: Originated Loans: $ 2,374 $ 14,000 $ 1,003 $ 3,869 $ 313 $ 2 $ 189 $ 21,750 Acquired loans initially recorded at fair value: 335 - - - - - - 335 Acquired loans with deteriorated credit: 39 168 - 64 3 - - 274 Beginning Balance, January 1, 2019 2,748 14,168 1,003 3,933 316 2 189 22,359 Charge-offs: Originated Loans: 1 111 - 145 - - - 257 Acquired loans initially recorded at fair value: 65 118 - 303 - - - 486 Sub-total: 66 229 - 448 - - - 743 Recoveries: Originated Loans: - - - 15 - - - 15 Acquired loans recorded at fair value: 3 10 - 5 16 - - 34 Sub-total: 3 10 - 20 16 - - 49 Provisions: Originated Loans: 49 1,346 241 ( 794 ) 17 ( 2 ) 84 941 Acquired loans initially recorded at fair value: ( 12 ) 166 - 1,101 ( 16 ) - - 1,239 Acquired loans with deteriorated credit: - ( 89 ) - ( 22 ) - - - ( 111 ) Sub-total: 37 1,423 241 285 1 ( 2 ) 84 2,069 Totals: Originated Loans: 2,422 15,235 1,244 2,945 330 - 273 22,449 Acquired loans initially recorded at fair value: 261 58 - 803 - - - 1,122 Acquired loans with deteriorated credit: 39 79 - 42 3 - - 163 Ending Balance, December 31, 2019 $ 2,722 $ 15,372 $ 1,244 $ 3,790 $ 333 $ - $ 273 $ 23,734 Ending Balance attributable to loans: Individually evaluated for impairment: 380 342 - 2,518 24 - - 3,264 Collectively evaluated for impairment: 2,342 15,030 1,244 1,272 309 - 273 20,470 Totals: $ 2,722 $ 15,372 $ 1,244 $ 3,790 $ 333 $ - $ 273 $ 23,734 Loans Receivable: Originated Loans: $ 212,020 $ 1,485,286 $ 104,996 $ 157,413 $ 50,100 $ 674 $ - $ 2,010,489 Acquired Loans: 35,010 118,577 - 19,319 14,302 8 - 187,216 Acquired loans with deteriorated credit: 1,351 3,113 - 910 236 - - 5,610 Total Gross Loans: $ 248,381 $ 1,606,976 $ 104,996 $ 177,642 $ 64,638 $ 682 $ - $ 2,203,315 Ending Balance: Loans individually evaluated for impairment: Originated Loans: $ 2,983 $ 4,469 $ - $ 2,511 $ 963 $ - $ - $ 10,926 Acquired Loans: 4,121 5,649 - 560 288 - - 10,618 Acquired loans with deteriorated credit: 1,351 3,113 - 867 37 - - 5,368 Loans individually evaluated for impairment: $ 8,455 $ 13,231 $ - $ 3,938 $ 1,288 $ - $ - $ 26,912 Ending Balance: Loans collectively evaluated for impairment: Originated Loans: $ 209,037 $ 1,480,817 $ 104,996 $ 154,902 $ 49,137 $ 674 $ - $ 1,999,563 Acquired Loans: 30,889 112,928 - 18,759 14,014 8 - 176,598 Acquired loans with deteriorated credit: - - - 43 199 - - 242 Loans collectively evaluated for impairment: $ 239,926 $ 1,593,745 $ 104,996 $ 173,704 $ 63,350 $ 682 $ - $ 2,176,403 (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) The following table summarizes the average recorded investment and interest income recognized on impaired loans with no related allowance recorded by portfolio class for the three months ended March 31, 2020 and 2019 (In thousands): Three Months Ended March 31, 2020 2020 2019 2019 Average Interest Average Interest Recorded Income Recorded Income Originated loans Investment Recognized Investment Recognized with no related allowance recorded: Residential one-to-four family $ 1,995 $ 20 $ 3,073 $ 28 Commercial and Multi-family 4,185 45 12,221 134 Commercial business (1) 1,055 41 1,063 42 Home equity (2) 608 6 758 6 Sub-total: $ 7,843 $ 112 $ 17,115 $ 210 Acquired loans initially recorded at fair value with no related allowance recorded: Residential one-to-four family $ 1,838 $ 18 $ 2,753 $ 25 Commercial and Multi-family 4,220 47 3,946 55 Commercial business (1) 92 - 53 1 Home equity (2) 204 3 230 3 Consumer - - 11 - Sub-total $ 6,354 $ 68 $ 6,993 $ 84 Acquired loans with deteriorated credit with no related allowance recorded: Residential one-to-four family (3) $ 823 $ 14 $ 1,019 $ 16 Commercial and Multi-family (3) 1,917 7 6,050 6 Commercial business (1)(3) 866 2 785 - Home equity (2)(3) 36 - 48 - Sub-total: $ 3,642 $ 23 $ 7,902 $ 22 Total Impaired Loans with no related allowance recorded: $ 17,839 $ 203 $ 32,010 $ 316 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. (3) Does not include accretable yield on loans acquired with deteriorated credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) The following table summarizes the average recorded investment and interest income recognized on impaired loans with allowance recorded by portfolio class for the three months ended March 31, 2020 and 2019. (In thousands): Three Months Ended March 31, 2020 2020 2019 2019 Average Interest Average Interest Recorded Income Recorded Income Originated loans Investment Recognized Investment Recognized with an allowance recorded: Residential one-to-four family $ 945 $ 8 $ 2,941 $ 25 Commercial and Multi-family - - 56 - Commercial business (1) 1,245 3 865 27 Home equity (2) 377 3 153 2 Sub-total: $ 2,567 $ 14 $ 4,015 $ 54 Acquired loans initially recorded at fair value with an allowance recorded: Residential one-to-four family $ 2,273 $ 26 $ 3,146 $ 24 Commercial and Multi-family 1,241 20 912 4 Commercial business (1) 445 - - - Home equity (2) 83 1 84 2 Sub-total: $ 4,042 $ 47 $ 4,142 $ 30 Acquired loans with deteriorated credit with an allowance recorded: Residential one-to-four family (3) $ 523 $ 7 $ 366 $ 5 Sub-total: $ 523 $ 7 $ 366 $ 5 Total Impaired Loans with an allowance recorded: $ 7,132 $ 68 $ 8,523 $ 89 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. (3) Does not include accretable yield on loans acquired with deteriorated credit. Note 7 - 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 at March 31, 2020 and December 31, 2019. (In thousands): As of March 31, 2020 As of December 31, 2019 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 $ 1,980 $ 2,080 $ - $ 2,010 $ 2,098 $ - Commercial and multi-family 3,901 3,945 - 4,469 4,527 - Commercial business (1) 1,001 3,101 - 1,108 4,069 - Home equity (2) 632 644 - 584 593 - Sub-total: $ 7,514 $ 9,770 $ - $ 8,171 $ 11,287 $ - Acquired loans initially recorded at fair value with no related allowance recorded: Residential one-to-four family $ 1,832 $ 1,939 $ - $ 1,843 $ 1,950 $ - Commercial and Multi-family 4,039 4,043 - 4,401 4,402 - Commercial business (1) - - - 183 589 - Home equity (2) 202 203 - 205 206 - Sub-total: $ 6,073 $ 6,185 $ - $ 6,632 $ 7,147 $ - Acquired loans with deteriorated credit with no related allowance recorded: Residential one-to-four family $ 819 $ 1,375 $ - $ 827 $ 1,383 $ - Commercial and Multi-family 721 1,776 - 3,113 4,166 - Commercial business (1) 865 5,050 - 867 5,052 - Home equity (2) 34 45 - 37 47 - Sub-total: $ 2,439 $ 8,246 $ - $ 4,844 $ 10,648 $ - Total Impaired Loans with no related allowance recorded: $ 16,026 $ 24,201 $ - $ 19,647 $ 29,082 $ - __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - 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 at March 31, 2020 and December 31, 2019. (In thousands): As of March 31, 2020 As of December 31, 2019 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 $ 916 $ 917 $ 36 $ 973 $ 973 $ 48 Commercial business (1) 1,088 2,539 974 1,403 3,037 1,029 Home equity (2) 375 380 18 379 382 20 Sub-total: $ 2,379 $ 3,836 $ 1,028 $ 2,755 $ 4,392 $ 1,097 Acquired loans initially recorded at fair value with an allowance recorded: Residential one-to-four family $ 2,267 $ 2,284 $ 313 $ 2,278 $ 2,293 $ 325 Commercial and Multi-family 1,234 1,431 332 1,248 1,442 342 Commercial business (1) 512 2,030 1,550 377 1,489 1,489 Home equity (2) 83 83 4 83 83 4 Sub-total $ 4,096 $ 5,828 $ 2,199 $ 3,986 $ 5,307 $ 2,160 Acquired loans with deteriorated credit with an allowance recorded: Residential one-to-four family $ 521 $ 569 $ 5 $ 524 $ 571 $ 7 Sub-total: $ 521 $ 569 $ 5 $ 524 $ 571 $ 7 Total Impaired Loans with an allowance recorded: $ 6,996 $ 10,233 $ 3,232 $ 7,265 $ 10,270 $ 3,264 Total Impaired Loans with no related allowance recorded: $ 16,026 $ 24,201 $ - $ 19,647 $ 29,082 $ - Total Impaired Loans: $ 23,022 $ 34,434 $ 3,232 $ 26,912 $ 39,352 $ 3,264 __________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) A troubled debt restructured (“TDR”) is a loan that has been modified whereby the Company has agreed to make certain concessions to a borrower to meet the needs of both the borrower and the Company to maximize the ultimate recovery of a loan. A TDR occurs when a borrower is experiencing, or is expected to experience, financial difficulties and the loan is modified using a concession that would otherwise not be granted to the borrower. If a Paycheck Protection Plan (“PPP”) loan that was current at December 31, 2019 and modified due to the COVID-19 pandemic, it is not considered a TDR. The types of concessions granted generally include, but are not limited to, interest rate reductions, limitations on the accrued interest charged, term extensions, and deferment of principal. All TDRs were considered impaired and therefore were individually evaluated for impairment in the calculation of the allowance for loan losses. Prior to their classification as TDRs, certain of these loans had been collectively evaluated for impairment in the calculation of the allowance for loan losses. At March 31, 2020 At December 31, 2019 (In thousands) Recorded investment in TDRs: Accrual status $ 16,346 $ 17,030 Non-accrual status 1,103 702 Total recorded investment in TDRs $ 17,449 $ 17,732 TDRs restructured for the three months ended March 31, 2020 totaled $ 216,102 for one contract and $ 1,378,000 for three contracts for the three months ended March 31, 2019. There were no TDRs for which there was a payment default within twelve months of restructuring during the three months ended March 31, 2020 or the three months ended March 31, 2019. The following table sets forth the delinquency status of total loans receivable as of March 31, 2020: Loans Receivable 30-59 Days 60-90 Days Greater Than Total Past Total Loans >90 Days Past Due Past Due 90 Days Due Current Receivable and Accruing (In Thousands) Originated loans: Residential one-to-four family $ 1,117 $ - $ - $ 1,117 $ 231,775 $ 232,892 $ - Commercial and multi-family 3,805 - 76 3,881 1,459,241 1,463,122 - Construction - - - - 101,692 101,692 - Commercial business (1) 3,086 - 1,051 4,137 153,214 157,351 - Home equity (2) 611 400 27 1,038 50,355 51,393 - Consumer - - - - 1,019 1,019 - Sub-total: $ 8,619 $ 400 $ 1,154 $ 10,173 $ 1,997,296 $ 2,007,469 $ - Acquired loans initially recorded at fair value: Residential one-to-four family $ 624 $ - $ 450 $ 1,074 $ 32,831 33,905 $ - Commercial and multi-family 1,000 - 631 1,631 112,342 113,973 - Commercial business (1) 580 107 513 1,200 17,688 18,888 - Home equity (2) 296 - - 296 12,934 13,230 - Consumer - - - - 10 10 - - Sub-total: $ 2,500 $ 107 $ 1,594 $ 4,201 $ 175,805 $ 180,006 $ - Acquired loans with deteriorated credit: Residential one-to-four family $ 162 $ - $ - $ 162 $ 1,178 1,340 $ - Commercial and multi-family - - 122 122 599 721 - Commercial business (1) - - 854 854 53 907 - Home equity (2) - - - - 234 234 - - Sub-total: $ 162 $ - $ 976 $ 1,138 $ 2,064 $ 3,202 $ - Total $ 11,281 $ 507 $ 3,724 $ 15,512 $ 2,175,165 $ 2,190,677 $ - _________ (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - 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 March 31, 2020 and December 31, 2019, 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 March 31, 2020 and December 31, 2019, 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. Loans subject to COVID-19-related modifications are not be reported as non-accrual, in accordance with regulatory guidance. As of March 31, 2020 As of December 31, 2019 (In Thousands) (In Thousands) Non-Accruing Loans: Originated loans: Residential one-to-four family $ 788 $ 590 Commercial and multi-family 218 761 Commercial business (1) 1,189 1,428 Home equity (2) 294 347 Sub-total: 2,489 3,126 Acquired loans initially recorded at fair value: Residential one-to-four family 602 291 Commercial and multi-family 758 217 Commercial business (1) 513 513 Home equity (2) - 13 Sub-total: 1,873 1,034 Total $ 4,362 $ 4,160 _________ (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 three months ended March 31, 2020 and December 31, 2019 would have been approximately $ 894,000 and $ 967,000 , respectively. Interest income recognized on loans returned to accrual was approximately $ 459,000 and $ 1.1 million, respectively. The Bank has not committed to lend additional funds to the borrowers whose loans have been placed on a nonaccrual status. At March 31, 2020 and December 31, 2019, there were $ 0 and $ 795,000 , respectively, of loans which were more than ninety days past due and still accruing interest. Nonaccrual loans in the preceding table do not include loans acquired with deteriorated credit quality which were recorded at their fair value at acquisition and totaled $ 1.1 million at March 31, 2020, and $ 3.5 million at December 31, 2019. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) The following table sets forth the delinquency status of total loans receivable at December 31, 2019: Loans Receivable 30-59 Days 60-90 Days Greater Than Total Past Total Loans >90 Days Past Due Past Due 90 Days Due Current Receivable and Accruing (In Thousands) Originated loans: Residential one-to-four family $ 1,087 $ 401 $ - $ 1,488 $ 210,532 $ 212,020 $ - Commercial and multi-family 1,290 940 616 2,846 1,482,440 1,485,286 - Construction - - - - 104,996 104,996 - Commercial business (1) 1,874 278 1,265 3,417 153,996 157,413 142 Home equity (2) 161 63 116 340 49,760 50,100 - Consumer - - - - 674 674 - Sub-total: $ 4,412 $ 1,682 $ 1,997 $ 8,091 $ 2,002,398 $ 2,010,489 $ 142 Acquired loans initially recorded at fair value: Residential one-to-four family $ 265 $ 217 $ 330 $ 812 $ 34,198 35,010 $ 97 Commercial and multi-family 318 - 631 949 117,628 118,577 556 Construction - - - - - - - Commercial business (1) 300 - 513 813 18,506 19,319 - Home equity (2) 190 75 - 265 14,037 14,302 - Consumer - - - - 8 8 - Sub-total: $ 1,073 $ 292 $ 1,474 $ 2,839 $ 184,377 $ 187,216 $ 653 Acquired loans with deteriorated credit: Residential one-to-four family $ - $ - $ - $ - $ 1,351 $ 1,351 $ - Commercial and multi-family - - 2,500 2,500 613 3,113 - Construction - - - - - - - Commercial business (1) - - 856 856 54 910 - Home equity (2) 37 199 - 236 - 236 - Consumer - - - - - - - Sub-total: $ 37 $ 199 $ 3,356 $ 3,592 $ 2,018 $ 5,610 $ - Total $ 5,522 $ 2,173 $ 6,827 $ 14,522 $ 2,188,793 $ 2,203,315 $ 795 (1) Includes business lines of credit. (2) Includes home equity lines of credit. Note 7 - Loans Receivable and Allowance for Loan Losses (Continued) Criticized and Classified Assets . Company policies provide for a classification system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful,” or “loss.” When the Company classifies problem assets, the Company 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 s |