Loans | Loans The Company’s loans, net of unearned income, consisted of the following as of December 31 of the years indicated. (dollars in thousands) 2021 2020 Real estate loans: One- to four-family first mortgage $ 350,843 $ 395,638 Home equity loans and lines 60,312 67,700 Commercial real estate 801,624 750,623 Construction and land 259,652 221,823 Multi-family residential 90,518 87,332 Total real estate loans 1,562,949 1,523,116 Other loans: Commercial and industrial 244,123 417,926 Consumer 33,021 38,912 Total other loans 277,144 456,838 Total loans $ 1,840,093 $ 1,979,954 The net discount on the Company’s acquired loans was $4,289,000 and $6,650,000 at December 31, 2021 and 2020, respectively. In addition, loan balances as of December 31, 2021 and 2020 are reported net of unearned income of $4,924,000 and $8,727,000, respectively. Unearned income at December 31, 2021 and December 31, 2020 included $1,301,000 and $5,449,000 of deferred lender fees related to PPP loans, respectively. The total recorded investment in PPP loans was $43,637,000 and $221,220,000 at December 31, 2021 and 2020, respectively, which is included in commercial and industrial loans. Accrued interest receivable on the Company's loans was $6,496,000 and $8,635,000 at December 31, 2021 and 2020, respectively, and is excluded from the estimate of the ACL. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition. A summary of activity in the ACL and ALL for the years ended December 31, 2021, 2020 and 2019 follows. For the Year Ended December 31, 2021 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provision Ending Balance Allowance for credit losses: One- to four-family first mortgage $ 3,065 $ (176) $ 45 $ (990) $ 1,944 Home equity loans and lines 676 (6) 25 (187) 508 Commercial real estate 18,851 (1,337) — (7,060) 10,454 Construction and land 4,155 — 63 (646) 3,572 Multi-family residential 1,077 — — (620) 457 Commercial and industrial 4,276 (599) 313 (470) 3,520 Consumer 863 (187) 146 (188) 634 Total allowance for loan losses $ 32,963 $ (2,305) $ 592 $ (10,161) $ 21,089 Unfunded lending commitments 1,425 — — 390 1,815 Total allowance for credit losses $ 34,388 $ (2,305) $ 592 $ (9,771) $ 22,904 For the Year Ended December 31, 2020 (dollars in thousands) Beginning Balance ASC 326 Adoption Impact (1) Charge-offs Recoveries Provision Ending Balance Allowance for loan losses: One- to four-family first mortgage $ 2,715 $ 986 $ (99) $ 13 $ (550) $ 3,065 Home equity loans and lines 1,084 (1) (575) 16 152 676 Commercial real estate 6,541 1,974 (5) 55 10,286 18,851 Construction and land 2,670 519 (688) — 1,654 4,155 Multi-family residential 572 (245) — — 750 1,077 Commercial and industrial 3,694 1,243 (984) 106 217 4,276 Consumer 592 157 (250) 145 219 863 Total allowance for loan losses $ 17,868 $ 4,633 $ (2,601) $ 335 $ 12,728 $ 32,963 Unfunded lending commitments — 1,425 — — — 1,425 Total allowance for credit losses $ 17,868 $ 6,058 $ (2,601) $ 335 $ 12,728 $ 34,388 (1) On January 1, 2020, the Company adopted ASC 326, Financial Instruments - Credit Losses , which introduced a new model know as CECL. Refer to Note 2 for more information on the adoption of ASC 326. For the Year Ended December 31, 2019 (dollars in thousands) Beginning Balance Charge-offs Recoveries Provision Ending Balance Allowance for loan losses: One- to four-family first mortgage $ 2,136 $ (4) $ — $ 583 $ 2,715 Home equity loans and lines 1,079 (42) 16 31 1,084 Commercial real estate 6,125 (360) — 776 6,541 Construction and land 2,285 (6) — 391 2,670 Multi-family residential 550 — — 22 572 Commercial and industrial 3,228 (893) 25 1,334 3,694 Consumer 945 (272) 42 (123) 592 Total allowance for loan losses $ 16,348 $ (1,577) $ 83 $ 3,014 $ 17,868 The ACL, which includes the ALL and the ACL on unfunded lending commitments, and recorded investment in loans as of the dates indicated are as follows. As of December 31, 2021 (dollars in thousands) Collectively Evaluated Individually Evaluated Total Allowance for credit losses: One- to four-family first mortgage $ 1,944 $ — $ 1,944 Home equity loans and lines 508 — 508 Commercial real estate 10,207 247 10,454 Construction and land 3,572 — 3,572 Multi-family residential 457 — 457 Commercial and industrial 3,095 425 3,520 Consumer 634 — 634 Total allowance for loan losses $ 20,417 $ 672 $ 21,089 Unfunded lending commitments (1) $ 1,815 $ — $ 1,815 Total allowance for credit losses $ 22,232 $ 672 $ 22,904 As of December 31, 2021 (dollars in thousands) Collectively Evaluated Individually Evaluated (2) Total Loans: One- to four-family first mortgage $ 350,843 $ — $ 350,843 Home equity loans and lines 60,312 — 60,312 Commercial real estate 797,751 3,873 801,624 Construction and land 259,652 — 259,652 Multi-family residential 90,518 — 90,518 Commercial and industrial 243,379 744 244,123 Consumer 33,021 — 33,021 Total loans $ 1,835,476 $ 4,617 $ 1,840,093 As of December 31, 2020 (dollars in thousands) Collectively Evaluated for Impairment Individually Evaluated for Impairment Acquired with Deteriorated Credit Quality Total Allowance for loan losses: One- to four-family first mortgage $ 2,965 $ 100 $ — $ 3,065 Home equity loans and lines 676 — — 676 Commercial real estate 17,843 1,008 — 18,851 Construction and land 4,155 — — 4,155 Multi-family residential 1,077 — — 1,077 Commercial and industrial 3,845 431 — 4,276 Consumer 863 — — 863 Total allowance for loan losses $ 31,424 $ 1,539 $ — $ 32,963 Unfunded lending commitments (3) $ 1,425 $ — $ — $ 1,425 Total allowance for credit losses $ 32,849 $ 1,539 $ — $ 34,388 As of December 31, 2020 (dollars in thousands) Collectively Evaluated for Impairment Individually Evaluated for Impairment Acquired with Deteriorated Credit Quality Total Loans: One- to four-family first mortgage $ 394,632 $ 1,006 $ — $ 395,638 Home equity loans and lines 67,700 — — 67,700 Commercial real estate 743,223 7,400 — 750,623 Construction and land 221,823 — — 221,823 Multi-family residential 87,332 — — 87,332 Commercial and industrial 417,320 606 — 417,926 Consumer 38,912 — — 38,912 Total loans $ 1,970,942 $ 9,012 $ — $ 1,979,954 (1) At December 31, 2021, $1.8 million of the ACL related to noncancellable unfunded lending commitments of $434.6 million. The ACL on unfunded lending commitments is recorded within accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition. (2) There were no and $277,000 PCD loans individually evaluated at December 31, 2021 and December 31, 2020, respectively. (3) At December 31, 2020, $1.4 million of the ACL related to noncancellable unfunded lending commitments of $336.9 million. The ACL on unfunded lending commitments is recorded within accrued interest payable and other liabilities on the Consolidated Statements of Financial Condition. Although the Company has a diversified loan portfolio, a substantial portion of the loan portfolio is collateralized by improved and unimproved real estate and is dependent, in part, on values in the real estate market. The following table presents the Company’s loan portfolio by credit quality classification and origination year as of December 31, 2021. Term Loans by Origination Year (dollars in thousands) 2021 2020 2019 2018 2017 Prior Revolving Loans Revolving Loans Converted to Term Loans Total One- to four-family first mortgage: Pass $ 77,865 $ 44,152 $ 45,542 $ 34,301 $ 35,048 $ 96,975 $ 12,412 $ 351 $ 346,646 Special Mention — — — — — 369 — — 369 Substandard — 347 716 266 463 2,036 — — 3,828 Doubtful — — — — — — — — — Total one- to four-family first mortgages $ 77,865 $ 44,499 $ 46,258 $ 34,567 $ 35,511 $ 99,380 $ 12,412 $ 351 $ 350,843 Home equity loans and lines: Pass $ 1,688 $ 873 $ 1,114 $ 919 $ 816 $ 3,567 $ 50,323 $ 975 $ 60,275 Special Mention — — — — — — — — — Substandard — — — — 37 — — — 37 Doubtful — — — — — — — — — Total home equity loans and lines $ 1,688 $ 873 $ 1,114 $ 919 $ 853 $ 3,567 $ 50,323 $ 975 $ 60,312 Commercial real estate: Pass $ 226,989 $ 193,637 $ 142,045 $ 68,949 $ 73,555 $ 59,396 $ 23,310 $ 1,699 $ 789,580 Special Mention — — — — 1,841 366 — — 2,207 Substandard 437 821 381 1,741 306 5,991 — 160 9,837 Doubtful — — — — — — — — — Total commercial real estate loans $ 227,426 $ 194,458 $ 142,426 $ 70,690 $ 75,702 $ 65,753 $ 23,310 $ 1,859 $ 801,624 Construction and land: Pass $ 148,054 $ 50,062 $ 48,432 $ 4,832 $ 2,867 $ 1,738 $ 2,845 $ — $ 258,830 Special Mention 575 — — — — — — — 575 Substandard — — — — 5 242 — — 247 Doubtful — — — — — — — — — Total construction and land loans $ 148,629 $ 50,062 $ 48,432 $ 4,832 $ 2,872 $ 1,980 $ 2,845 $ — $ 259,652 Multi-family residential: Pass $ 31,236 $ 31,805 $ 14,467 $ 6,363 $ 2,588 $ 2,762 $ 1,297 $ — $ 90,518 Special Mention — — — — — — — — — Substandard — — — — — — — — — Doubtful — — — — — — — — — Total multi-family residential loans $ 31,236 $ 31,805 $ 14,467 $ 6,363 $ 2,588 $ 2,762 $ 1,297 $ — $ 90,518 Commercial and industrial: Pass $ 82,765 $ 32,465 $ 14,794 $ 8,737 $ 3,066 $ 1,690 $ 96,648 $ 296 $ 240,461 Special Mention — — — — — — 267 — 267 Substandard — 2,013 — 417 5 18 942 — 3,395 Doubtful — — — — — — — — — Total commercial and industrial loans $ 82,765 $ 34,478 $ 14,794 $ 9,154 $ 3,071 $ 1,708 $ 97,857 $ 296 $ 244,123 Consumer: Pass $ 5,472 $ 2,627 $ 1,211 $ 411 $ 1,041 $ 15,530 $ 6,488 $ 37 $ 32,817 Special Mention — — — — — 2 — — 2 Substandard 16 — — — 7 179 — — 202 Doubtful — — — — — — — — — Total consumer loans $ 5,488 $ 2,627 $ 1,211 $ 411 $ 1,048 $ 15,711 $ 6,488 $ 37 $ 33,021 Total loans: Pass $ 574,069 $ 355,621 $ 267,605 $ 124,512 $ 118,981 $ 181,658 $ 193,323 $ 3,358 $ 1,819,127 Special Mention 575 — — — 1,841 737 267 — 3,420 Substandard 453 3,181 1,097 2,424 823 8,466 942 160 17,546 Doubtful — — — — — — — — — Total loans $ 575,097 $ 358,802 $ 268,702 $ 126,936 $ 121,645 $ 190,861 $ 194,532 $ 3,518 $ 1,840,093 The following table presents the Company’s loan portfolio by credit quality classification and origination year as of December 31, 2020. Term Loans by Origination Year (dollars in thousands) 2020 2019 2018 2017 2016 Prior Revolving Loans Revolving Loans Converted to Term Loans Total One- to four-family first mortgage: Pass $ 58,958 $ 65,070 $ 46,412 $ 48,851 $ 37,039 $ 114,588 $ 17,762 $ 1,457 $ 390,137 Special Mention — — 167 16 — 1,057 — — 1,240 Substandard 129 34 — 335 1,069 2,694 — — 4,261 Doubtful — — — — — — — — — Total one- to four-family first mortgages $ 59,087 $ 65,104 $ 46,579 $ 49,202 $ 38,108 $ 118,339 $ 17,762 $ 1,457 $ 395,638 Home equity loans and lines: Pass $ 1,172 $ 1,307 $ 2,028 $ 964 $ 1,889 $ 5,537 $ 53,309 $ 1,389 $ 67,595 Special Mention — — — 43 — — — — 43 Substandard — — — — — 58 4 — 62 Doubtful — — — — — — — — — Total home equity loans and lines $ 1,172 $ 1,307 $ 2,028 $ 1,007 $ 1,889 $ 5,595 $ 53,313 $ 1,389 $ 67,700 Commercial real estate: Pass $ 235,900 $ 156,646 $ 96,153 $ 102,166 $ 59,859 $ 60,720 $ 22,962 $ 56 $ 734,462 Special Mention — — — 15 951 — — — 966 Substandard 1,606 1,994 1,742 323 1,344 8,164 — 22 15,195 Doubtful — — — — — — — — — Total commercial real estate loans $ 237,506 $ 158,640 $ 97,895 $ 102,504 $ 62,154 $ 68,884 $ 22,962 $ 78 $ 750,623 Construction and land: Pass $ 87,540 $ 91,337 $ 16,703 $ 5,486 $ 2,585 $ 1,505 $ 1,892 $ 429 $ 207,477 Special Mention 877 — — — — 618 — 627 2,122 Substandard 451 50 — — 252 249 — 11,222 12,224 Doubtful — — — — — — — — — Total construction and land loans $ 88,868 $ 91,387 $ 16,703 $ 5,486 $ 2,837 $ 2,372 $ 1,892 $ 12,278 $ 221,823 Multi-family residential: Pass $ 40,462 $ 24,329 $ 9,711 $ 3,844 $ 2,889 $ 4,539 $ 1,452 $ — $ 87,226 Special Mention — — — — — — — — — Substandard — — — — — 106 — — 106 Doubtful — — — — — — — — — Total multi-family residential loans $ 40,462 $ 24,329 $ 9,711 $ 3,844 $ 2,889 $ 4,645 $ 1,452 $ — $ 87,332 Commercial and industrial: Pass $ 264,079 $ 29,115 $ 21,053 $ 6,001 $ 3,952 $ 2,408 $ 82,039 $ 1,311 $ 409,958 Special Mention 2,089 792 131 — — 1 1,801 — 4,814 Substandard 592 — 427 23 141 16 1,955 — 3,154 Doubtful — — — — — — — — — Total commercial and industrial loans $ 266,760 $ 29,907 $ 21,611 $ 6,024 $ 4,093 $ 2,425 $ 85,795 $ 1,311 $ 417,926 Consumer: Pass $ 6,844 $ 2,667 $ 1,149 $ 2,073 $ 1,118 $ 18,258 $ 6,340 $ 27 $ 38,476 Special Mention 4 — 4 — 13 120 — 5 146 Substandard — 34 3 12 17 223 — 1 290 Doubtful — — — — — — — — — Total consumer loans $ 6,848 $ 2,701 $ 1,156 $ 2,085 $ 1,148 $ 18,601 $ 6,340 $ 33 $ 38,912 Total loans: Pass $ 694,955 $ 370,471 $ 193,209 $ 169,385 $ 109,331 $ 207,555 $ 185,756 $ 4,669 $ 1,935,331 Special Mention 2,970 792 302 74 964 1,796 1,801 632 9,331 Substandard 2,778 2,112 2,172 693 2,823 11,510 1,959 11,245 35,292 Doubtful — — — — — — — — — Total loans $ 700,703 $ 373,375 $ 195,683 $ 170,152 $ 113,118 $ 220,861 $ 189,516 $ 16,546 $ 1,979,954 Age analysis of past due loans, as of the dates indicated, is as follows. December 31, 2021 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Loans Total Loans Originated loans: Real estate loans: One- to four-family first mortgage $ 1,267 $ 266 $ 1,151 $ 2,684 $ 254,880 $ 257,564 Home equity loans and lines — — — — 48,561 48,561 Commercial real estate 438 — 4,854 5,292 682,323 687,615 Construction and land 428 — — 428 249,802 250,230 Multi-family residential — — — — 87,316 87,316 Total real estate loans 2,133 266 6,005 8,404 1,322,882 1,331,286 Other loans: Commercial and industrial 51 31 271 353 232,569 232,922 Consumer 289 — 25 314 29,247 29,561 Total other loans 340 31 296 667 261,816 262,483 Total originated loans $ 2,473 $ 297 $ 6,301 $ 9,071 $ 1,584,698 $ 1,593,769 Acquired loans: Real estate loans: One- to four-family first mortgage $ 1,233 $ 428 $ 1,322 $ 2,983 $ 90,296 $ 93,279 Home equity loans and lines 141 — — 141 11,610 11,751 Commercial real estate 54 — 2,139 2,193 111,816 114,009 Construction and land — — 241 241 9,181 9,422 Multi-family residential — — — — 3,202 3,202 Total real estate loans 1,428 428 3,702 5,558 226,105 231,663 Other loans: Commercial and industrial 81 — 430 511 10,690 11,201 Consumer 53 3 21 77 3,383 3,460 Total other loans 134 3 451 588 14,073 14,661 Total acquired loans $ 1,562 $ 431 $ 4,153 $ 6,146 $ 240,178 $ 246,324 Total loans: Real estate loans: One- to four-family first mortgage $ 2,500 $ 694 $ 2,473 $ 5,667 $ 345,176 $ 350,843 Home equity loans and lines 141 — — 141 60,171 60,312 Commercial real estate 492 — 6,993 7,485 794,139 801,624 Construction and land 428 — 241 669 258,983 259,652 Multi-family residential — — — — 90,518 90,518 Total real estate loans 3,561 694 9,707 13,962 1,548,987 1,562,949 Other loans: Commercial and industrial 132 31 701 864 243,259 244,123 Consumer 342 3 46 391 32,630 33,021 Total other loans 474 34 747 1,255 275,889 277,144 Total loans $ 4,035 $ 728 $ 10,454 $ 15,217 $ 1,824,876 $ 1,840,093 December 31, 2020 (dollars in thousands) 30-59 Days Past Due 60-89 Days Past Due Greater Than 90 Days Past Due Total Past Due Current Loans Total Loans Originated loans: Real estate loans: One- to four-family first mortgage $ 1,651 $ 66 $ 365 $ 2,082 $ 258,386 $ 260,468 Home equity loans and lines 117 148 — 265 52,101 52,366 Commercial real estate 518 532 6,770 7,820 581,524 589,344 Construction and land — — — — 207,928 207,928 Multi-family residential 94 — — 94 82,051 82,145 Total real estate loans 2,380 746 7,135 10,261 1,181,990 1,192,251 Other loans: Commercial and industrial 797 3 603 1,403 398,377 399,780 Consumer 219 42 145 406 32,702 33,108 Total other loans 1,016 45 748 1,809 431,079 432,888 Total originated loans $ 3,396 $ 791 $ 7,883 $ 12,070 $ 1,613,069 $ 1,625,139 Acquired loans: Real estate loans: One- to four-family first mortgage $ 1,823 $ 502 $ 1,154 $ 3,479 $ 131,691 $ 135,170 Home equity loans and lines 34 43 25 102 15,232 15,334 Commercial real estate 603 303 2,462 3,368 157,911 161,279 Construction and land — — 142 142 13,753 13,895 Multi-family residential 92 — — 92 5,095 5,187 Total real estate loans 2,552 848 3,783 7,183 323,682 330,865 Other loans: Commercial and industrial 3 — 907 910 17,236 18,146 Consumer 126 50 66 242 5,562 5,804 Total other loans 129 50 973 1,152 22,798 23,950 Total acquired loans $ 2,681 $ 898 $ 4,756 $ 8,335 $ 346,480 $ 354,815 Total loans: Real estate loans: One- to four-family first mortgage $ 3,474 $ 568 $ 1,519 $ 5,561 $ 390,077 $ 395,638 Home equity loans and lines 151 191 25 367 67,333 67,700 Commercial real estate 1,121 835 9,232 11,188 739,435 750,623 Construction and land — — 142 142 221,681 221,823 Multi-family residential 186 — — 186 87,146 87,332 Total real estate loans 4,932 1,594 10,918 17,444 1,505,672 1,523,116 Other loans: Commercial and industrial 800 3 1,510 2,313 415,613 417,926 Consumer 345 92 211 648 38,264 38,912 Total other loans 1,145 95 1,721 2,961 453,877 456,838 Total loans $ 6,077 $ 1,689 $ 12,639 $ 20,405 $ 1,959,549 $ 1,979,954 Loans greater than 90 days past due and accruing interest were $6,000 and $2,000 at December 31, 2021 and December 31, 2020, respectively. The Company reviews its significant nonaccrual loans (i.e., loans with balances of $500,000 or greater) for specific impairment in accordance with its allowance for credit loss methodology. If it is determined that it is probable that all amounts due will not be collected when other credit quality indicators are considered, the loan is considered impaired and the Company individually evaluates those loans to determine the expected credit losses. The following table summarizes information pertaining to nonaccrual loans as of dates indicated. December 31, 2021 December 31, 2020 (dollars in thousands) Total Without Related Allowance Total Without Related Allowance Nonaccrual loans: One- to four-family first mortgage $ 3,575 $ — $ 3,838 $ — Home equity loans and lines 38 — 63 — Commercial real estate 8,431 116 12,298 — Construction and land 258 — 469 — Multi-family residential — — — — Commercial and industrial 763 20 1,717 — Consumer 204 — 292 — Total $ 13,269 $ 136 $ 18,677 $ — All interest accrued but not received for loans placed on nonaccrual status is reversed against interest income. All payments received while on nonaccrual status are applied against the principal balance of nonaccrual loans. The Company does not recognize interest income while loans are on nonaccrual status. As of December 31, 2021, the Company was not committed to lend additional funds to any customer whose loan was individually evaluated for impairment. Collateral Dependent Loans The Company held loans that were individually evaluated for impairment at December 31, 2021 and 2020 for which the repayments, on the basis of our assessment at the reporting date, were expected to be provided substantially through the operation or sale of the collateral and the borrower was experiencing financial difficulty. The ACL for these collateral-dependent loans is primarily based on the fair value of the underlying collateral at the reporting date. The following describes the types of collateral that secure collateral dependent loans: • One- to four-family first mortgages are primarily secured by first liens on residential real estate. • Home equity loans and lines are primarily secured by first and junior liens on residential real estate. • Commercial real estate loans are primarily secured by office and industrial buildings, warehouses, retail shopping facilities and various special purpose properties, including hotels and restaurants. • Construction and land loans are primarily secured by residential and commercial properties, which are under construction and/or redevelopment, and by raw land. • Commercial and industrial loans considered collateral dependent are primarily secured by accounts receivable, inventory and equipment. The table below summarizes collateral dependent loans and the related ACL as of the periods indicated for which the borrower was experiencing financial difficulty. December 31, 2021 December 31, 2020 (dollars in thousands) Loans ACL Loans ACL One- to four-family first mortgage $ — $ — $ 1,006 $ 100 Home equity loans and lines — — — — Commercial real estate 3,873 247 7,400 1,008 Construction and land — — — — Multi-family residential — — — — Commercial and industrial 744 425 606 431 Consumer — — — — Total $ 4,617 $ 672 $ 9,012 $ 1,539 Foreclosed Assets and ORE Foreclosed assets and ORE include real property and other assets that have been acquired as a result of foreclosure, and real property no longer used in the Bank's business. Foreclosed assets and ORE totaled $1,189,000 and $1,302,000 at December 31, 2021 and December 31, 2020, respectively. These amounts are recorded in accrued interest receivable and other assets on the Consolidated Statements of Financial Condition. The carrying amount of foreclosed residential real estate properties held at December 31, 2021 and December 31, 2020 totaled $136,000 and $877,000, respectively. Loans secured by single family residential real estate that were in the process of foreclosure at December 31, 2021 and December 31, 2020 totaled $505,000 and $446,000, respectively. Foreclosed assets and ORE included certain bank buildings that meet the criteria to be classified as assets held for sale. The carrying value of these assets totaled $423,000 and $212,000 at December 31, 2021 and December 31, 2020, respectively. During the year ended December 31, 2021, the Company sold four of those properties, with a total carrying value of $179,000, for a loss of $26,000 recorded in foreclosed assets and ORE, net expense on the Consolidated Statements of Income. The expected timing of the sale of the remaining properties is uncertain. Troubled Debt Restructurings During the course of its lending operations, the Company periodically grants concessions to its customers in an attempt to protect as much of its investment as possible and to minimize risk of loss. These concessions may include restructuring the terms of a customer loan to alleviate the burden of the customer’s near-term cash requirements. Loans are TDRs when the Company agrees to restructure a loan to a borrower who is experiencing financial difficulties in a manner that is deemed to be a “concession”. The Company defines a concession as a modification of existing terms granted to a borrower for economic or legal reasons related to the borrower’s financial difficulties that the Company would otherwise not consider. The concession either is granted through an agreement with the customer or is imposed by a court or by law. Concessions include modifying original loan terms to reduce or defer cash payments required as part of the loan agreement, including but not limited to: • a reduction of the stated interest rate for the remaining original life of the debt, • an extension of the maturity date or dates at an interest rate lower than the current market rate for new debt with similar risk characteristics, • a reduction of the face amount or maturity amount of the debt or • a reduction of accrued interest receivable on the debt. In its determination of whether the customer is experiencing financial difficulties, the Company considers numerous indicators, including, but not limited to: • whether the customer is currently in default on its existing loan, or is in an economic position where it is probable the customer will be in default on its loan in the foreseeable future without a modification, • whether the customer has declared or is in the process of declaring bankruptcy, • whether there is substantial doubt about the customer’s ability to continue as a going concern, • whether, based on its projections of the customer’s current capabilities, the Company believes the customer’s future cash flows will be insufficient to service the debt, including interest, in accordance with the contractual terms of the existing agreement for the foreseeable future and • whether, without modification, the customer cannot obtain sufficient funds from other sources at an effective interest rate equal to the current market rate for similar debt for a non-troubled debtor. If the Company concludes that both a concession has been granted and the concession was granted to a customer experiencing financial difficulties, the Company identifies the loan as a TDR. The ACL for loans that are individually evaluated is based on a comparison of the recorded investment in the loan with either the expected cash flows discounted using the loan’s original effective interest rate, observable market price for the loan or the fair value of the collateral underlying certain collateral-dependent loans. Residential, consumer and smaller balance commercial TDRs are included in the Company's pooled-loan analysis to calculate the ACL and, generally, do not have a material impact on the overall ACL. As of December 31, 2021, the Company had modified loans with an aggregate outstanding loan balance of $3,875,000, or less than 1% of total outstanding loans, via payment relief in the nature of principal and/or interest deferrals. These modifications were done in accordance with Section 4013 of the Coronavirus Aid, Relief, and Economic Security ("CARES") Act and the Interagency Statement on Loan Modifications on Reporting for Financial Institutions Working With Customers Affected by the Coronavirus . Accordingly, these loans were not categorized as TDRs. A summary of information pertaining to loans modified as of the periods indicated is as follows. For the Year Ended December 31 2021 2020 (dollars in thousands) Number of Contracts Pre-modification Outstanding Recorded Investment Post-modification Outstanding Recorded Investment Number of Contracts Pre-modification Outstanding Recorded Investment Post-modification Outstanding Recorded Investment Troubled debt restructurings: One- to four-family first mortgage 2 $ 77 $ 73 11 $ 1,409 $ 778 Home equity loans and lines — — — — — — Commercial real estate 3 520 478 9 3,193 3,100 Construction and land — — — 1 185 185 Multi-family residential — — — — — — Commercial and industrial 2 2,397 2,245 5 96 81 Consumer 1 6 1 2 13 8 Total 8 $ 3,000 $ 2,797 28 $ 4,896 $ 4,152 As of December 31, 2021 and 2020, the Company had no unfunded commitments to borrowers whose loan terms had been modified through troubled debt restructurings. Two residential mortgages totaling $73,000 were modified during the year ended 2021 and defaulted during the same time period. The defaults did not have a significant impact on our allowance for credit losses at December 31, 2021. |