LOANS | 6. LOANS Portfolio loans consist of the following: June 30, December 31, 2018 2017 (Dollars in thousands) Commercial loans Multifamily $ 141,004 $ 120,480 Nonresidential 396,624 381,611 Land 16,887 15,162 Construction 127,691 116,863 Secured 212,173 177,994 Unsecured 6,438 10,506 Total commercial loans 900,817 822,616 Residential mortgage loans One-to four-family 888,583 870,939 Construction 40,623 49,092 Total residential mortgage loans 929,206 920,031 Consumer loans Home equity 187,771 195,852 Auto 83,829 64,364 Marine 1,404 1,526 Recreational vehicle 4,879 5,696 Other 7,026 6,056 Total consumer loans 284,909 273,494 Total loans 2,114,932 2,016,141 Less: Allowance for loan losses 21,405 21,202 Deferred loan costs, net (6,254 ) (4,938 ) Total 15,151 16,264 Loans, net $ 2,099,781 $ 1,999,877 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and are based on impairment method as of June 30, 2018 and December 31, 2017 and activity for the three and six months ended June 30, 2018 and 2017. Allowance For Loan Losses Commercial Loans Residential Loans Consumer Loans Total (Dollars in thousands) For the three months ended June 30, 2018 Beginning balance $ 13,095 $ 5,701 $ 2,814 $ 21,610 Provision (recovery) (263 ) 180 (55 ) (138 ) Charge-offs (75 ) (96 ) (83 ) (254 ) Recoveries 51 82 54 187 Ending balance $ 12,808 $ 5,867 $ 2,730 $ 21,405 For the six months ended June 30, 2018 Beginning balance $ 12,542 $ 5,860 $ 2,800 $ 21,202 Provision 133 87 49 269 Charge-offs (75 ) (181 ) (269 ) (525 ) Recoveries 208 101 150 459 Ending balance $ 12,808 $ 5,867 $ 2,730 $ 21,405 As of June 30, 2018 Period-end amount allocated to: Loans individually evaluated for impairment $ 514 $ 834 $ 313 1,661 Loans collectively evaluated for impairment 12,239 5,033 2,417 19,689 Loans acquired with deteriorated credit quality 55 — — 55 Ending balance $ 12,808 $ 5,867 $ 2,730 $ 21,405 Period-end balances: Loans individually evaluated for impairment 3,119 14,455 6,204 23,778 Loans collectively evaluated for impairment 896,607 914,751 278,705 2,090,063 Loans acquired with deteriorated credit quality 1,091 — — 1,091 Ending balance $ 900,817 $ 929,206 $ 284,909 $ 2,114,932 Allowance For Loan Losses Commercial Loans Residential Loans Consumer Loans Total For the three months ended June 30, 2017 Beginning balance $ 10,182 $ 5,912 $ 2,876 $ 18,970 Provision 503 295 44 842 Charge-offs (12 ) (273 ) (150 ) (435 ) Recoveries 148 34 101 283 Ending balance $ 10,821 $ 5,968 $ 2,871 $ 19,660 For the six months ended June 30, 2017 Beginning balance $ 10,824 $ 5,538 $ 2,725 $ 19,087 Provision 1,025 865 427 2,317 Charge-offs (1,323 ) (503 ) (479 ) (2,305 ) Recoveries 295 68 198 561 Ending balance $ 10,821 $ 5,968 $ 2,871 $ 19,660 As of December 31, 2017 Period-end amount allocated to: Loans individually evaluated for impairment $ 516 $ 1,145 $ 398 $ 2,059 Loans collectively evaluated for impairment 11,971 4,715 2,402 19,088 Loans acquired with deteriorated credit quality 55 — — 55 Ending balance $ 12,542 $ 5,860 $ 2,800 $ 21,202 Period-end balances: Loans individually evaluated for impairment $ 3,356 $ 16,140 $ 6,754 $ 26,250 Loans collectively evaluated for impairment 818,066 903,891 266,740 1,988,697 Loans acquired with deteriorated credit quality 1,194 — — 1,194 Ending balance $ 822,616 $ 920,031 $ 273,494 $ 2,016,141 The allowance for loan losses is a valuation allowance for probable incurred credit losses. Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed. Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required based on an analysis using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations, estimated collateral values, general economic conditions in the market area and other factors. Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off. Other loans not reviewed specifically by management are evaluated as a homogenous group of loans (generally single-family residential mortgage loans and all consumer credits except marine loans) using a loss factor applied to the outstanding loan balance to determine the level of reserve required. This loss factor consists of two components, a quantitative and a qualitative component. The quantitative component is based on a historical analysis of all charged-off loans, net of recoveries. In determining the qualitative factors, consideration is given to such attributes as lending policies, economic conditions, nature and volume of the portfolio, management, loan quality trend, loan review, collateral value, concentrations, economic cycles and other external factors. As of June 30, 2018, the Company evaluated 24 quarters of net charge-off history and applied this information to the current period. This component is combined with the qualitative component to arrive at the loss factor, which is applied to the outstanding balance of homogenous loans. The following table presents loans individually evaluated for impairment by class of loans as of and for six months ended June 30, 2018: Impaired Loans (Dollars in thousands) Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized Cash Basis Income Recognized With no specific allowance recorded Commercial loans Multifamily $ 28 $ — $ — $ — $ — $ — Nonresidential 630 137 — 100 4 4 Land 706 — — 6 — — Construction 2,457 — — — — — Secured 1,115 907 — 901 — — Unsecured 184 — — — — — Total commercial loans 5,120 1,044 — 1,007 4 4 Residential mortgage loans One-to four-family 6,918 5,994 — 5,602 74 58 Construction — — — — — — Total residential mortgage loans 6,918 5,994 — 5,602 74 58 Consumer loans Home equity 1,496 1,224 — 1,087 11 10 Auto 29 22 — 33 — — Marine 553 181 — 181 — — Recreational vehicle 520 100 — 122 4 4 Other 1 — — 6 — — Total consumer loans 2,599 1,527 — 1,429 15 14 Total $ 14,637 $ 8,565 $ — $ 8,038 $ 93 $ 76 With a specific allowance recorded Commercial loans Multifamily $ 422 $ 275 $ 28 $ 275 $ — $ — Nonresidential 1,235 1,232 13 1,356 52 44 Land — — — — — — Construction — — — — — — Secured 819 568 473 579 — — Unsecured — — — — — — Total commercial loans 2,476 2,075 514 2,210 52 44 Residential mortgage loans One-to four-family 8,574 8,461 834 9,793 233 195 Construction — — — — — — Total residential mortgage loans 8,574 8,461 834 9,793 233 195 Consumer loans Home equity 4,282 4,201 295 4,505 123 110 Auto — — — — — — Marine 95 95 1 97 2 2 Recreational vehicle 393 381 17 393 11 10 Other — — — — — — Total consumer loans 4,770 4,677 313 4,995 136 122 Total 15,820 15,213 1,661 16,998 421 361 Total impaired loans $ 30,457 $ 23,778 $ 1,661 $ 25,036 $ 514 $ 437 The following table presents loans individually evaluated for impairment by class of loans as of and for six months ended June 30, 2017: Impaired Loans (Dollars in thousands) Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated Average Recorded Investment Interest Income Recognized Cash Basis Income Recognized With no specific allowance recorded Commercial loans Multifamily $ 470 $ 413 $ — $ 277 $ 3 $ 3 Nonresidential 2,030 1,464 — 1,040 50 49 Land 3,922 9 — 17 — — Construction 3,593 — — — — — Secured 242 190 — 190 — — Unsecured 500 — — — — Total commercial loans 10,757 2,076 — 1,524 53 52 Residential mortgage loans One-to four-family 7,704 5,762 — 6,095 50 41 Construction — — — — — — Total residential mortgage loans 7,704 5,762 — 6,095 50 41 Consumer loans Home equity 1,965 1,535 — 1,577 8 7 Auto 34 18 — 11 — — Marine 540 169 — 210 — — Recreational vehicle 560 152 — 164 5 5 Other — — — — — — Total consumer loans 3,099 1,874 — 1,962 13 12 Total $ 21,560 $ 9,712 $ — $ 9,581 $ 116 $ 105 With a specific allowance recorded Commercial loans Multifamily $ — $ — $ — $ — $ — $ — Nonresidential 501 456 5 2,164 12 11 Land — — — — — — Construction — — — — — — Secured — — — 57 — — Unsecured — — — — — — Total commercial loans 501 456 5 2,221 12 11 Residential mortgage loans One-to four-family 10,526 10,428 1,171 10,764 273 229 Construction — — — — — — Total residential mortgage loans 10,526 10,428 1,171 10,764 273 229 Consumer loans Home equity 4,973 4,919 377 5,212 151 134 Auto — — — — — — Marine 104 104 1 106 3 3 Recreational vehicle 702 691 62 681 14 13 Other — — — — — — Total consumer loans 5,779 5,714 440 5,999 168 150 Total 16,806 16,598 1,616 18,984 453 390 Total impaired loans $ 38,366 $ 26,310 $ 1,616 $ 28,565 $ 569 $ 495 The following table presents loans individually evaluated for impairment by class of loans as of December 31, 2017: Impaired Loans (Dollars in thousands) Unpaid Principal Balance Recorded Investment Allowance for Loan Losses Allocated With no specific allowance recorded Commercial loans Multifamily $ 41 $ — $ — Nonresidential 651 144 — Land 716 9 — Construction 2,467 — — Secured 1,042 894 — Unsecured 187 — — Total commercial loans 5,104 1,047 — Residential mortgage loans One-to four-family 6,432 5,441 — Construction — — — Total residential mortgage loans 6,432 5,441 — Consumer loans Home equity 1,399 1,059 — Auto 29 14 — Marine 553 181 — Recreational vehicle 578 151 — Other 3 3 — Total consumer loans 2,562 1,408 — Total $ 14,098 $ 7,896 $ — With a specific allowance recorded Commercial loans Multifamily $ 422 $ 275 $ 28 Nonresidential 1,455 1,423 16 Land — — — Construction — — — Secured 893 611 472 Unsecured — — — Total commercial loans 2,770 2,309 516 Residential mortgage loans One-to four-family 10,874 10,699 1,145 Construction — — — Total residential mortgage loans 10,874 10,699 1,145 Consumer loans Home equity 4,921 4,840 377 Auto — — — Marine 100 100 1 Recreational vehicle 418 406 20 Other — — — Total consumer loans 5,439 5,346 398 Total 19,083 18,354 2,059 Total impaired loans $ 33,181 $ 26,250 $ 2,059 The following table presents the average balance, interest income recognized and cash basis income recognized for loans individually evaluated for impairment by class of loans for the three months ended June 30, 2018: Average Recorded Investment Interest Income Recognized Cash Basis Income Recognized With no specific allowance recorded Commercial loans Multifamily $ — $ — $ — Nonresidential 78 1 1 Land 5 — — Construction — — — Secured 905 — — Unsecured — — — Total commercial loans 988 1 1 Residential mortgage loans One-to four-family 5,683 30 30 Construction — — — Total residential mortgage loans 5,683 30 30 Consumer loans Home equity 1,101 6 6 Auto 42 — — Marine 181 — — Recreational vehicle 108 2 2 Other 8 — — Total consumer loans 1,440 8 8 Total $ 8,111 $ 39 $ 39 With a specific allowance recorded Commercial loans Multifamily $ 275 $ — $ — Nonresidential 1,323 22 22 Land — — — Construction — — — Secured 563 — — Unsecured — — — Total commercial loans 2,161 22 22 Residential mortgage loans One-to four-family 9,340 98 96 Construction — — — Total residential mortgage loans 9,340 98 96 Consumer loans Home equity 4,338 57 56 Auto — — — Marine 96 1 1 Recreational vehicle 387 5 5 Other — — — Total consumer loans 4,821 63 62 Total 16,322 183 180 Total impaired loans $ 24,433 $ 222 $ 219 The following table presents the average balance, interest income recognized and cash basis income recognized for loans individually evaluated for impairment by class of loans for the three months ended June 30, 2017: Average Recorded Investment Interest Income Recognized Cash Basis Income Recognized With no specific allowance recorded Commercial loans Multifamily $ 416 $ — $ — Nonresidential 815 25 25 Land 9 — — Construction — — — Secured 190 — — Unsecured — — — Total commercial loans 1,430 25 25 Residential mortgage loans One-to four-family 5,763 20 20 Construction — — — Total residential mortgage loans 5,763 20 20 Consumer loans Home equity 1,574 3 3 Auto 16 — — Marine 182 — — Recreational vehicle 186 2 2 Other — — — Total consumer loans 1,958 5 5 Total $ 9,151 $ 50 $ 50 With a specific allowance recorded Commercial loans Multifamily $ — $ — $ — Nonresidential 1,179 5 5 Land — — — Construction — — — Secured — — — Unsecured — — — Total commercial loans 1,179 5 5 Residential mortgage loans One-to four-family 10,783 114 111 Construction — — — Total residential mortgage loans 10,783 114 111 Consumer loans Home equity 5,151 66 66 Auto — — — Marine 105 1 1 Recreational vehicle 708 7 6 Other — — — Total consumer loans 5,964 74 73 Total 17,926 193 189 Total impaired loans $ 27,077 $ 243 $ 239 Home Savings reclassifies a collateralized mortgage loan and a consumer loan secured by real estate to real estate owned and other repossessed assets once it has either obtained legal title to the real estate collateral or the borrower voluntarily conveys all interest in the real property to the Bank to satisfy the loan through a deed in lieu of foreclosure or similar legal agreement. The table below presents loans that are in the process of foreclosure at June 30, 2018 and December 31, 2017, but legal title, deed in lieu of foreclosure or similar legal agreement to the property has not yet been obtained: June 30, 2018 December 31, 2017 Unpaid Principal Balance Recorded Investment Unpaid Principal Balance Recorded Investment (Dollars in thousands) (Dollars in thousands) Mortgage loans in process of foreclosure $ 3,587 $ 3,452 $ 2,588 $ 2,428 Consumer loans in process of foreclosure 1,148 1,058 613 608 The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans as of June 30, 2018: Nonaccrual Loans and Loans Past Due Over 90 Days and Still Accruing As of June 30, 2018 Nonaccrual Loans past due over 90 days and still accruing (Dollars in thousands) Commercial loans Multifamily $ 275 $ — Nonresidential 1,111 — Land — — Construction — — Secured 1,475 — Unsecured — — Total commercial loans 2,861 — Residential mortgage loans One-to four-family 6,146 — Construction — — Total residential mortgage loans 6,146 — Consumer Loans Home equity 1,477 — Auto 63 — Marine 181 — Recreational vehicle 62 — Other — — Total consumer loans 1,783 — Total nonaccrual loans and loans past due over 90 days and still accruing $ 10,790 $ — The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days and still on accrual by class of loans as of December 31, 2017: Nonaccrual Loans and Loans Past Due Over 90 Days and Still Accruing As of December 31, 2017 Nonaccrual Loans past due over 90 days and still accruing (Dollars in thousands) Commercial loans Multifamily $ 275 $ — Nonresidential 1,218 — Land 9 — Construction — — Secured 1,505 — Unsecured — — Total commercial loans 3,007 — Residential mortgage loans One-to four-family 6,076 — Construction — — Total residential mortgage loans 6,076 — Consumer Loans Home equity 2,074 — Auto 155 — Marine 181 — Recreational vehicle 208 — Other 2 — Total consumer loans 2,620 — Total nonaccrual loans and loans past due over 90 days and still accruing $ 11,703 $ — The following table presents an age analysis of past-due loans, segregated by class of loans as of June 30, 2018: Past Due Loans (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 Commercial loans Multifamily $ — $ — $ 275 $ 275 $ 140,729 $ 141,004 Nonresidential 114 — 1,094 1,208 395,416 396,624 Land — — — — 16,887 16,887 Construction — — — — 127,691 127,691 Secured 92 — 1,474 1,566 210,607 212,173 Unsecured — — — — 6,438 6,438 Total commercial loans 206 — 2,843 3,049 897,768 900,817 Residential mortgage loans One-to four-family 2,683 1,327 3,991 8,001 880,582 888,583 Construction — — — — 40,623 40,623 Total residential mortgage loans 2,683 1,327 3,991 8,001 921,205 929,206 Consumer Loans: Home equity 746 295 1,261 2,302 185,469 187,771 Automobile 188 55 57 300 83,529 83,829 Marine — — 181 181 1,223 1,404 Recreational vehicle 68 51 62 181 4,698 4,879 Other 4 2 — 6 7,020 7,026 Total consumer loans 1,006 403 1,561 2,970 281,939 284,909 Total loans $ 3,895 $ 1,730 $ 8,395 $ 14,020 $ 2,100,912 $ 2,114,932 The following table presents an age analysis of past-due loans, segregated by class of loans as of December 31, 2017: Past Due Loans (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 Commercial loans Multifamily $ — $ — $ 275 $ 275 $ 120,205 $ 120,480 Nonresidential 20 — 1,199 1,219 380,392 381,611 Land — — 9 9 15,153 15,162 Construction — — — — 116,863 116,863 Secured 114 4 110 228 177,766 177,994 Unsecured — — — — 10,506 10,506 Total commercial loans 134 4 1,593 1,731 820,885 822,616 Residential mortgage loans One-to four-family 4,704 1,523 4,804 11,031 859,908 870,939 Construction — — — — 49,092 49,092 Total residential mortgage loans 4,704 1,523 4,804 11,031 909,000 920,031 Consumer Loans: Home equity 1,184 120 1,793 3,097 192,755 195,852 Automobile 187 100 82 369 63,995 64,364 Marine — — 181 181 1,345 1,526 Recreational vehicle 47 — 165 212 5,484 5,696 Other 31 3 2 36 6,020 6,056 Total consumer loans 1,449 223 2,223 3,895 269,599 273,494 Total loans $ 6,287 $ 1,750 $ 8,620 $ 16,657 $ 1,999,484 $ 2,016,141 As of June 30, 2018 and December 31, 2017, the Company has a recorded investment in troubled debt restructurings of $18.2 million and $19.8 million, respectively. The Company allocated $1.2 million of specific allowance for those loans at June 30, 2018 and $1.6 million at December 31, 2017. The Company has committed to lend, to existing troubled debt restructuring relationships, additional amounts totaling up to $39,000 and $37,000 at June 30, 2018 and December 31, 2017, respectively. The following table presents loans by class modified as troubled debt restructurings that occurred during the three months ended June 30, 2018: Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Recorded Investment (In thousands) Commercial loans Multifamily — $ — $ — Nonresidential — — — Land — — — Construction — — — Secured — — — Unsecured — — — Total commercial loans — — — Residential mortgage loans One-to four-family 3 521 547 Construction — — — Total residential mortgage loans 3 521 547 Consumer loans Home equity 2 113 113 Auto — — — Marine — — — Recreational vehicle — — — Other — — — Total consumer loans 2 113 113 Total restructured loans 5 $ 634 $ 660 The troubled debt restructurings described above increased the allowance for loan losses by $3,000 and resulted in no charge-offs during the three months ended June 30, 2018. There were no loans modified as a troubled debt restructuring that occurred during the three months ended June 30, 2017. The following table presents loans by class modified as troubled debt restructurings that occurred during the six months ended June 30, 2018: Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Recorded Investment (In thousands) Commercial loans Multifamily — $ — $ — Nonresidential 1 124 124 Land — — — Construction — — — Secured — — — Unsecured — — — Total commercial loans 1 124 124 Residential mortgage loans One-to four-family 3 521 547 Construction — — — Total residential mortgage loans 3 521 547 Consumer loans Home equity 2 113 113 Auto — — — Marine — — — Recreational vehicle Other — — — Total consumer loans 2 113 113 Total restructured loans 6 $ 758 $ 784 The troubled debt restructurings described above increased the allowance for loan losses by $3,000 and resulted in no charge-offs during the six months ended June 30, 2018. The following table presents loans by class modified as troubled debt restructurings that occurred during the six months ended June 30, 2017: Number of Loans Pre-Modification Outstanding Recorded Investment Post-Modification Recorded Investment (Dollars in thousands) Commercial loans Multifamily — $ — $ — Nonresidential — — — Land — — — Construction — — — Secured — — — Unsecured — — — Total commercial loans — — — Residential mortgage loans One-to four-family 1 75 84 Construction — — — Total residential mortgage loans 1 75 84 Consumer loans Home equity — — — Auto — — — Marine — — — Recreational vehicle 1 115 115 Other — — — Total consumer loans 1 115 115 Total restructured loans 2 $ 190 $ 199 The troubled debt restrucurings described above increased the allowance for loan losses by $6,000 and resulted in no charge-offs during the six months ended June 30, 2017. The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within a twelve-month cycle following the modification during the period ended June 30, 2018. Number of loans Recorded Investment (Dollars in thousands) Commercial loans Multifamily — $ — Nonresidential 1 121 Land — — Construction — — Secured — — Unsecured — — Total commercial loans 1 121 Residential mortgage loans One-to four-family 2 357 Construction — — Total residential mortgage loans 2 357 Consumer loans Home equity — — Auto — — Marine — — Recreational vehicle — — Other — — Total consumer loans — — Total restructured loans 3 $ 478 The troubled debt restructurings that subsequently defaulted described above resulted in no charge-offs during the three and six months ended June 30, 2018, and had no effect on the provision for loan losses. The following table presents loans by class modified as troubled debt restructurings for which there was a payment default within a twelve month cycle following the modification during the period ended June 30, 2017: Number of loans Recorded Investment (Dollars in thousands) Commercial loans Multifamily — $ — Nonresidential — — Land — — Construction — — Secured — — Unsecured — — Total commercial loans — — Residential mortgage loans One-to four-family 1 164 Construction — — Total residential mortgage loans 1 164 Consumer loans Home equity 1 47 Auto — — Marine — — Recreational vehicle — — Other — — Total consumer loans 1 47 Total restructured loans 2 $ 211 The troubled debt restructurings that subsequently defaulted described above resulted in no of charge-offs during the three and six months ended June 30, 2017, and had no effect on the provision for loan losses. A troubled debt restructuring is considered to be in payment default once it is 30 days contractually past due under the modified terms. In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed in accordance with the Company’s internal underwriting policy. Credit Quality Indicators: The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, such as: current financial information, historical payment experience, credit documentation, public information and current economic trends. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis includes homogeneous loans past due 90 cumulative days, and all non-homogeneous loans, including commercial loans and commercial real estate loans. Smaller balance homogeneous loans are primarily monitored by payment status. Asset quality ratings are divided into two groups: Pass (unclassified) and Classified. Within the unclassified group, certain loans that display potential weakness are risk rated as special mention. In addition, there are three classified risk ratings: substandard, doubtful and loss. These specific credit risk categories are defined as follows: Special Mention. Loans classified as special mention have potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date. Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected. Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Loss. Loans classified as loss are considered uncollectible and of such little value, that continuance as assets is not warranted. Although there may be a chance of recovery on these assets, it is not practical or desirable to defer writing off the asset. The Company monitors loans on a monthly basis to determine if they should be included in one of the categories listed above. All impaired non-homogeneous credits classified as substandard, doubtful or loss are analyzed on an individual basis for a specific reserve requirement. This analysis is performed on each individual credit at least annually or more frequently if warranted. As of June 30, 2018 and December 31, 2017, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows: June 30, 2018 (Dollars in thousands) Unclassified Classified Unclassified Special Mention Substandard Doubtful Loss Total Classified Total Loans Commercial Loans Multifamily $ 138,238 $ 2,491 $ 275 $ — $ — $ 275 $ 141,004 Nonresidential 379,794 5,162 11,668 — — 11,668 396,624 Land 16,887 — — — — — 16,887 Construction 119,065 8,626 — — — — 127,691 Secured 186,069 4,851 21,253 — — 21,253 212,173 Unsecured 6,345 — 93 — — 93 6,438 Total commercial loans 846,398 21,130 33,289 — — 33,289 900,817 Residential mortgage loans One-to four-family 880,779 1,102 6,702 — — 6,702 888,583 Construction 40,623 — — — — — 40,623 Total residential mortgage loans 921,402 1,102 6,702 — — 6,702 929,206 Consumer Loans Home equity 186,276 — 1,495 — — 1,495 187,771 Auto 83,766 — 63 — — 63 83,829 Marine 1,223 — 181 — — 181 1,404 Recreational vehicle 4,817 — 62 — — 62 4,879 Other 7,025 — 1 — — 1 7,026 Total consumer loans 283,107 — 1,802 — — 1,802 284,909 Total loans $ 2,050,907 $ 22,232 $ 41,793 $ — $ — $ 41,793 $ 2,114,932 December 31, 2017 (Dollars in thousands) Unclassified Classified Unclassified Special Mention Substandard Doubtful Loss Total Classified Total Loans Commercial Loans Multifamily $ 118,716 $ 1,334 $ 430 $ — $ — $ 430 $ 120,480 Nonresidential 367,553 6,394 7,664 — — 7,664 381,611 Land 15,153 — 9 — — 9 15,162 Construction 116,460 403 — — — — 116,863 Secured 149,912 6,092 21,990 — — 21,990 177,994 Unsecured 10,412 — 94 — — 94 10,506 Total commercial loans 778,206 14,223 30,187 — — 30,187 822,616 Residential mortgage loans One-to four-family 861,971 1,585 7,383 — — 7,383 870,939 Construction 49,092 — — — — — 49,092 Total residential mortgage loans 911,063 1,585 7,383 — — 7,383 920,031 Consumer Loans Home equity 193,733 — 2,119 — — 2,119 195,852 Auto 64,209 — 155 — — 155 64,364 Marine 1,345 — 181 — — 181 1,526 Recreational vehicle 5,488 — 208 — — 208 5,696 Other 6,051 — 5 — — 5 6,056 Total consumer loans 270,826 — 2,668 — — 2,668 273,494 Total loans $ 1,960,095 $ 15,808 $ 40,238 $ — $ — $ 40,238 $ 2,016,141 Purchased Credit Impaired Loans: The Company has purchased loans for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans is as follows: June 30, 2018 December 31, 2017 (Dollars in thousands) Commercial loans $ 1,091 $ 1,194 Residential mortgage loans — — Consumer loans — — Outstanding balance $ 1,091 $ 1,194 Carrying amount, net of allowance of $55,000 and $55,000 1,036 1,139 Accretable yield, or income expected to be collected, is as follows: Three Months Ended Three Months Ended Six Months Ended Six Months Ended June 30, 2018 June 30, 2017 June 30, 2018 June 30, 2017 (Dollars in thousands) Beginning of period $ 110 $ 128 $ 110 $ — New loans purchased — — — 158 Accretion of income 6 12 6 42 Balance at end of period $ 104 $ 116 $ 104 $ 116 For the purchased credit impaired loans disclosed above, there was no change in the allowance for loan losses for the three and six months ended June 30, 2018 and 2017. Income is not recognized on purchased credit impaired loans if the Company cannot reasonably estimate cash flows expected to be collected. The carrying amounts of such loans are as follows: June 30, 2018 June 30, 2017 (Dollars in thousands) Loans at beginning of period $ 1,194 $ — Loans purchased during the period — 1,797 Loans at end of period 1,091 1,438 |