The Company’s allowance for loan losses has three basic components: the specific allowance, the general allowance, and the unallocated component. The specific allowance is used to individually allocate an allowance for larger balance, non-homogeneous loans identified as impaired. The general allowance is used for estimating the loss on pools of smaller balance, homogeneous loans, including 1-4 family mortgage loans and other consumer loans. Also, the general allowance is used for the remaining pool of larger balance, non-homogeneous loans which were not identified as impaired. The unallocated component of the allowance reflects the margin of imprecision inherent in the underlying assumptions used in the methodologies for estimating specific and general losses in the portfolio.

On March 27, 2020, the CARES Act was enacted to, among other provisions, provide emergency assistance for individuals, families and businesses affected by COVID-19. A provision in the CARES Act included the creation of the PPP through the Small Business Administration (“SBA”). Loans provided by the Bank through the PPP may be forgiven based on the borrowers’ compliance with the terms of the program. The SBA provides a 100% guaranty to the lender of principal and interest, unless the lender violates an obligation under the agreement. As loan losses are expected to be immaterial, if any at all, due to the SBA guaranty, there is no provision allocated for PPP loans within the allowance for loan loss calculation. As of December 31, 2020, the Bank’s Commercial and Industrial loan segment included the origination of 549 PPP loans, totaling $53.1 million, and under the terms of the PPP, subsequently issued forgiveness for 223 PPP loans, with an aggregate principal balance of $22.6 million.

The following table presents the activity in the allowance for loan losses by portfolio segment for each of the years ended December 31, 2020, 2019 and 2018.

	December 31, 2020
(In thousands)	Commercial and Industrial			Commercial Real Estate		Construction and Land		Consumer			Student			Residential Real Estate		Home Equity Lines of Credit			Unallocated		Total
Allowance for Loan Losses
Beginning balance, December 31, 2019	$	296		$	1,788	$	652	$	154		$	65		$	1,596	$	326		$	350	$	5,227
Charge-offs		(148	)		-		-		(34	)		(15	)		-		-			-		(197	)
Recoveries		13			24		-		30			-			-		-			-		67
Provision (recovery)		590			522		428		(24	)		31			243		(17	)		-		1,773
Ending balance, December 31, 2020	$	751		$	2,334	$	1,080	$	126		$	81		$	1,839	$	309		$	350	$	6,870
Ending balances individually evaluated for impairment	$	20		$	52	$	-	$	-		$	-		$	-	$	-		$	-	$	72
Ending balances collectively evaluated for impairment	$	731		$	2,282	$	1,080	$	126		$	81		$	1,839	$	309		$	350	$	6,798
Loans
Individually evaluated for impairment	$	509		$	8,345	$	-	$	-		$	-		$	754	$	-				$	9,608
Collectively evaluated for impairment		67,881			192,345		73,966		6,355			6,971			230,131		29,492					607,141
Ending balance, December 31, 2020	$	68,390		$	200,690	$	73,966	$	6,355		$	6,971		$	230,885	$	29,492				$	616,749

	December 31, 2019
(In thousands)	Commercial and Industrial			Commercial Real Estate			Construction and Land		Consumer			Student			Residential Real Estate		Home Equity Lines of Credit			Unallocated		Total
Allowance for Loan Losses
Beginning balance, December 31, 2018	$	483		$	1,738		$	635	$	145		$	68		$	1,311	$	446		$	350	$	5,176
Charge-offs		(328	)		-			-		(50	)		(13	)		-		-			-		(391	)
Recoveries		2			80			-		14			-			-		-			-		96
Provision		139			(30	)		17		45			10			285		(120	)		-		346
Ending balance, December 31, 2019	$	296		$	1,788		$	652	$	154		$	65		$	1,596	$	326		$	350	$	5,227
Ending balances individually evaluated for impairment	$	-		$	229		$	-	$	-		$	-		$	-	$	-		$	-	$	229
Ending balances collectively evaluated for impairment	$	296		$	1,559		$	652	$	154		$	65		$	1,596	$	326		$	350	$	4,998
Loans
Individually evaluated for impairment	$	187		$	2,847		$	233	$	-		$	-		$	379	$	-				$	3,646
Collectively evaluated for impairment		27,217			179,051			64,998		5,958			8,151			224,937		36,268					546,580
Ending balance, December 31, 2019	$	27,404		$	181,898		$	65,231	$	5,958		$	8,151		$	225,316	$	36,268				$	550,226

	December 31, 2018
(In thousands)	Commercial and Industrial			Commercial Real Estate			Construction and Land			Consumer			Student			Residential Real Estate			Home Equity Lines of Credit			Unallocated		Total
Allowance for Loan Losses
Beginning balance, December 31, 2017	$	518		$	1,609		$	879		$	105		$	72		$	1,174		$	387		$	350	$	5,094
Charge-offs		(106	)		(47	)		(312	)		(14	)		(24	)		(200	)		(80	)		-		(783	)
Recoveries		35			70			-			4			-			248			1			-		358
Provision (recovery)		36			106			68			50			20			89			138			-		507
Ending balance, December 31, 2018	$	483		$	1,738		$	635		$	145		$	68		$	1,311		$	446		$	350	$	5,176
Ending balances individually evaluated for impairment	$	176		$	159		$	-		$	-		$	-		$	-		$	68		$	-	$	403
Ending balances collectively evaluated for impairment	$	307		$	1,579		$	635		$	145		$	68		$	1,311		$	378		$	350	$	4,773
Loans
Individually evaluated for impairment	$	522		$	3,191		$	2,679		$	-		$	-		$	707		$	567				$	7,666
Collectively evaluated for impairment		26,199			184,606			68,730			5,562			9,158			205,238			42,205					541,698
Ending balance, December 31, 2018	$	26,721		$	187,797		$	71,409		$	5,562		$	9,158		$	205,945		$	42,772				$	549,364

Loans by credit quality indicators as of December 31, 2020 and 2019 are summarized as follows:

	December 31, 2020
(In thousands)	Commercial and Industrial		Commercial Real Estate		Construction and Land		Consumer		Student		Residential Real Estate		Home Equity Lines of Credit		Total
Grade:
Pass	$	67,499	$	189,656	$	71,630	$	6,352	$	6,971	$	223,681	$	27,650	$	593,439
Special mention		348		9,273		2,273		3		-		319		-		12,216
Substandard		543		1,761		63		-		-		6,885		1,842		11,094
Doubtful		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-
Total	$	68,390	$	200,690	$	73,966	$	6,355	$	6,971	$	230,885	$	29,492	$	616,749

	December 31, 2019
(In thousands)	Commercial and Industrial		Commercial Real Estate		Construction and Land		Consumer		Student		Residential Real Estate		Home Equity Lines of Credit		Total
Grade:
Pass	$	26,555	$	175,063	$	62,231	$	5,955	$	8,151	$	218,686	$	34,218	$	530,859
Special mention		422		3,487		2,594		3		-		336		127		6,969
Substandard		427		3,348		406		-		-		6,294		1,923		12,398
Doubtful		-		-		-		-		-		-		-		-
Loss		-		-		-		-		-		-		-		-
Total	$	27,404	$	181,898	$	65,231	$	5,958	$	8,151	$	225,316	$	36,268	$	550,226

The past due status of loans as of December 31, 2020 and 2019 are summarized as follows:

	December 31, 2020
(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ Days Past Due and Accruing		Nonaccruals
Commercial and industrial	$	38	$	-	$	510	$	548	$	67,842	$	68,390	$	1	$	509
Commercial real estate		-		-		357		357		200,333		200,690		-		357
Construction and land		-		-		-		-		73,966		73,966		-		-
Consumer		9		-		-		9		6,346		6,355		-		-
Student		430		427		583		1,440		5,531		6,971		583		-
Residential real estate		768		-		379		1,147		229,738		230,885		-		379
Home equity lines of credit		111		324		-		435		29,057		29,492		-		-
Total	$	1,356	$	751	$	1,829	$	3,936	$	612,813	$	616,749	$	584	$	1,245

	December 31, 2019
(In thousands)	30-59 Days Past Due		60-89 Days Past Due		90+ Days Past Due		Total Past Due		Current		Total Loans		90+ Days Past Due and Accruing		Nonaccruals
Commercial and industrial	$	330	$	-	$	34	$	364	$	27,040	$	27,404	$	34	$	-
Commercial real estate		-		-		989		989		180,909		181,898		-		989
Construction and land		5,472		-		-		5,472		59,759		65,231		-		-
Consumer		11		1		-		12		5,946		5,958		-		-
Student		345		220		1,204		1,769		6,382		8,151		1,205		-
Residential real estate		739		109		397		1,245		224,071		225,316		397		-
Home equity lines of credit		389		-		-		389		35,879		36,268		-		-
Total	$	7,286	$	330	$	2,624	$	10,240	$	539,986	$	550,226	$	1,636	$	989

The following table presents information related to impaired loans by portfolio segment as of December 31, 2020 and 2019.

	December 31, 2020
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial real estate	$	7,562	$	7,562	$	-	$	7,944	$	320
Residential real estate		754		754		-		761		19
With an allowance recorded:
Commercial and industrial	$	509	$	509	$	20	$	509	$	3
Commercial real estate		783		783		52		797		36
Total:
Commercial and industrial	$	509	$	509	$	20	$	509	$	3
Commercial real estate		8,345		8,345		52		8,741		356
Residential real estate		754		754		-		761		19
Total	$	9,608	$	9,608	$	72	$	10,011	$	378

	December 31, 2019
(In thousands)	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no specific allowance recorded:
Commercial and industrial	$	187	$	187	$	-	$	287	$	13
Commercial real estate		1,048		1,048		-		1,213		61
Construction and land		233		233		-		494		25
Residential real estate		379		727		-		384		16
With an allowance recorded:
Commercial real estate	$	1,799	$	1,813	$	229	$	1,806	$	38
Total:
Commercial and industrial	$	187	$	187	$	-	$	287	$	13
Commercial real estate		2,847		2,861		229		3,019		99
Construction and land		233		233		-		494		25
Residential real estate		379		379		-		384		16
Total	$	3,646	$	3,660	$	229	$	4,184	$	153

For each of the years ended December 31, 2020 and 2019, there were five loans in the loan portfolio, totaling $8.4 million and $2.5 million, respectively, that were identified as TDRs, all of which were current and performing in accordance with their modified terms. The following table summarizes a modification that was classified as a TDR during 2020. There were no loan modifications that were classified as TDRs during 2019. There were no payment defaults for TDRs occurring within twelve months of modification during the years ended December 31, 2020 and 2019.

The CARES Act, along with interagency guidance, provided financial institutions the option to temporarily suspend certain accounting requirements related to TDRs with respect to loan modifications, including the deferral of scheduled payments. As of December 31, 2020, under the current regulatory guidance, 5 loans, totaling $518,000 in principal loan balances, were granted a 90-day deferment of scheduled payments and one loan, with a principal balance of $2.6 million was modified. These 6 loans were not considered TDRs under the current guidance.

At December 31, 2020 and 2019, the Company had no foreclosed residential real estate properties in its possession and none in the process of foreclosure.