At March 31, 2022 and December 31, 2021, the Company had $1.50 billion and $1.48 billion, respectively, in loans receivable outstanding. Outstanding balances include a total net increase of $1.6 million and $1.7 million at March 31, 2022 and December 31, 2021, respectively, for unearned income, net deferred loan fees, and unamortized discounts and premiums. We had no loans held for sale at March 31, 2022 and December 31, 2021, respectively. Also, at March 31, 2022 and December 31, 2021, our commercial and industrial loan portfolio includes $10.0 million and $27.8 million, respectively, of loans to small businesses through the Paycheck Protection Program ("SBA PPP" loans), which is a loan designed by the Federal government to provide a direct incentive for small businesses to keep their workers on the payroll. The portfolios of loans receivable at March 31, 2022 and December 31, 2021, consist of the following:


	March 31, 2022		December 31, 2021
	Amount		Amount
	(Dollars in thousands)
Commercial and Industrial	$	38,825	$	57,151
Construction	136,010		154,077
Real Estate Mortgage:
Commercial – Owner Occupied	132,275		123,672
Commercial – Non-owner Occupied	316,253		306,486
Residential – 1 to 4 Family	779,882		750,525
Residential – Multifamily	84,970		84,964
Consumer	7,624		7,972
Total Loans	$	1,495,839	$	1,484,847


March 31, 2022	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current		Total Loans		Loans > 90 Days and Accruing
	(Dollars in Thousands)
Commercial and Industrial	$	93	$	—	$	1,335	$	1,428	$	37,397	$	38,825	$	—
Construction	—		—		—		—		136,010		136,010		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		—		1,016		1,016		131,259		132,275		—
Commercial – Non-owner Occupied	14,380		—		1,328		15,708		300,545		316,253		—
Residential – 1 to 4 Family	—		—		231		231		779,651		779,882		—
Residential – Multifamily	—		—		—		—		84,970		84,970		—
Consumer	—		—		—		—		7,624		7,624		—
Total Loans	$	14,473	$	—	$	3,910	$	18,383	$	1,477,456	$	1,495,839	$	—


December 31, 2021	30-59 Days Past Due		60-89 Days Past Due		Greater than 90 Days and Not Accruing		Total Past Due		Current		Total Loans		Loans > 90 Days and Accruing
	(Dollars in thousands)
Commercial and Industrial	$	—	$	349	$	224	$	573	$	56,578	$	57,151	$	—
Construction	—		—		1,139		1,139		152,938		154,077		—
Real Estate Mortgage:
Commercial – Owner Occupied	—		—		2,170		2,170		121,502		123,672		—
Commercial – Non-owner Occupied	—		—		242		242		306,244		306,486		—
Residential – 1 to 4 Family	81		—		533		614		749,911		750,525		—
Residential – Multifamily	—		—		—		—		84,964		84,964		—
Consumer	—		—		—		—		7,972		7,972		—
Total Loans	$	81	$	349	$	4,308	$	4,738	$	1,480,109	$	1,484,847	$	—

We maintain the ALLL at a level that we believe to be appropriate to absorb estimated probable credit losses incurred in the loan portfolios as of the balance sheet date. We established our allowance in accordance with guidance provided in Accounting Standard Codification ("ASC") - Contingencies ("ASC 450") and Receivables ("ASC 310").

The allowance for loan and lease losses represents management’s estimate of probable losses inherent in the Company’s lending activities excluding loans accounted for under fair value. The allowance for loan losses is maintained through charges to the provision for loan losses in the Consolidated Statements of Income as losses are estimated to have occurred. Loans or portions thereof that are determined to be uncollectible are charged against the allowance, and subsequent recoveries, if any, are credited to the allowance.

The Company performs periodic reviews of its loan and lease portfolios to identify credit risks and to assess the overall collectability of those portfolios. The Company's allowance for loan losses includes a general component and an asset-specific component. The asset-specific component of the allowance relates to loans considered to be impaired, which includes performing troubled debt restructurings (“TDRs”) as well as nonperforming loans. To determine the asset-specific component of the allowance, the loans are evaluated individually based on the borrower's ability to repay amounts owed, collateral, relative risk grade of the loans, and other factors given current events and conditions. The Company generally measures the asset-specific allowance as the difference between the net realizable value of loan collateral or present value of expected cash flow and the recorded investment of a loan.

The general component of the allowance evaluates the impairments of pools of the loan portfolio collectively. It incorporates a historical valuation allowance and general valuation allowance. The historical loss experience is measured by type of credit and internal risk grade, loss severity, specific homogeneous risk pools. A historical loss ratio and valuation allowance are established for each pool of similar loans and updated periodically based on actual charge-off experience and current events. The general valuation allowance is based on general economic conditions and other qualitative risk factors both internal and external to the Company. It is generally determined by evaluating, among other things: (i) the experience, ability and effectiveness of the Bank's lending management and staff; (ii) the effectiveness of the Bank's lending policies, procedures and internal controls;(iii) volume and severity of loan credit quality; (iv) nature and volume of portfolio and term of loans (v) the composition and concentrations of credit; (vi) the effectiveness of the internal loan review system; and (vii) national and local economic trends and conditions, and industry conditions. Management evaluates the degree of risk that each one of these components has on the quality of the loan portfolio on a quarterly basis. Each component is determined to have either a high, high-moderate, moderate, low-moderate or low degree of risk. The results are then input into a "general allocation matrix" to determine an appropriate general valuation allowance.


					Real Estate Mortgage
	Commercial and Industrial		Construction		Commercial Owner Occupied		Commercial Non-owner Occupied		Residential 1 to 4 Family		Residential Multifamily		Consumer		Total
Allowance for loan losses	(Dollars in thousands)
Three months ended March 31, 2022
December 31, 2021	$	417	$	2,662	$	2,997	$	7,476	$	14,970	$	1,215	$	108	$	29,845
Charge-offs	—		—		—		—		—		—		—		—
Recoveries	6		—		2		—		121		7		—		136
Provisions (benefits)	86		(465)		13		(223)		391		193		5		—
Ending Balance at March 31, 2022	$	509	$	2,197	$	3,012	$	7,253	$	15,482	$	1,415	$	113	$	29,981









Allowance for loan losses
Individually evaluated for impairment	$	—	$	—	$	4	$	148	$	29	$	—	$	—	$	181
Collectively evaluated for impairment	509		2,197		3,008		7,105		15,453		1,415		113		29,800
Ending Balance at March 31, 2022	$	509	$	2,197	$	3,012	$	7,253	$	15,482	$	1,415	$	113	$	29,981

Loans
Individually evaluated for impairment	$	196	$	1,139	$	2,433	$	5,369	$	687	$	—	$	—	$	9,824
Collectively evaluated for impairment	38,629		134,871		129,842		310,884		779,195		84,970		7,624		1,486,015
Ending Balance at March 31, 2022	$	38,825	$	136,010	$	132,275	$	316,253	$	779,882	$	84,970	$	7,624	$	1,495,839


					Real Estate Mortgage
	Commercial and Industrial		Construction		Commercial Owner Occupied		Commercial Non-owner Occupied		Residential 1 to 4 Family		Residential Multifamily		Consumer		Total
Allowance for loan losses	(Dollars in thousands)
Three months ended March 31, 2021
December 31, 2020	$	492	$	3,359	$	3,078	$	8,398	$	12,595	$	1,639	$	137	$	29,698
Charge-offs	—		—		—		—		—		—		—		—
Recoveries	4		—		8		—		—		—		—		12
Provisions (benefits)	(22)		385		249		762		(770)		(101)		(3)		500
Ending Balance at March 31, 2021	$	474	$	3,744	$	3,335	$	9,160	$	11,825	$	1,538	$	134	$	30,210









Allowance for loan losses
Individually evaluated for impairment	$	11	$	295	$	40	$	226	$	137	$	—	$	—	$	709
Collectively evaluated for impairment	463		3,449		3,295		8,934		11,688		1,538		134		29,501
Ending Balance at March 31, 2021	$	474	$	3,744	$	3,335	$	9,160	$	11,825	$	1,538	$	134	$	30,210

Loans
Individually evaluated for impairment	$	49	$	4,690	$	4,370	$	5,741	$	1,495	$	—	$	—	$	16,345
Collectively evaluated for impairment	120,013		203,060		127,920		320,972		665,876		83,864		9,689		1,531,394
Ending Balance at March 31, 2021	$	120,062	$	207,750	$	132,290	$	326,713	$	667,371	$	83,864	$	9,689	$	1,547,739

A loan is considered impaired when, based on the current information and events, it is probable that the Company will be unable to collect the payments of principal and interest as of the date such payments were due. Loans are placed on non-accrual status when, in management's opinion, the borrower may be unable to meet payment obligations as they become due, as well as when a loan is 90 days past due, unless the loan is well secured and in the process of collection, as required by regulatory provisions. When interest accrual is discontinued, all unpaid accrued interest is reversed. Interest income is subsequently recognized only to the extent cash payments are received in excess of principal due. Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and future payments are reasonably assured.

All our impaired loans are assessed for recoverability based on an independent third-party full appraisal to determine the net realizable value (“NRV”) based on the fair value of the underlying collateral, less cost to sell and other costs or the present value of discounted cash flows in the case of certain impaired loans that are not collateral dependent.


March 31, 2022	Recorded Investment		Unpaid Principal Balance		Related Allowance
	(Dollars in thousands)
With no related allowance recorded:
Commercial and Industrial	$	196	$	196	$	—
Construction	1,139		5,856		—
Real Estate Mortgage:
Commercial – Owner Occupied	2,237		2,237		—
Commercial – Non-owner Occupied	106		106		—
Residential – 1 to 4 Family	232		232		—
Residential – Multifamily	—		—		—
Consumer	—		—		—
	3,910		8,627		—
With an allowance recorded:
Commercial and Industrial	—		—		—
Construction	—		—		—
Real Estate Mortgage:
Commercial – Owner Occupied	196		196		4
Commercial – Non-owner Occupied	5,263		5,263		148
Residential – 1 to 4 Family	455		455		29
Residential – Multifamily	—		—		—
Consumer	—		—		—
	5,914		5,914		181
Total:
Commercial and Industrial	196		196		—
Construction	1,139		5,856		—
Real Estate Mortgage:
Commercial – Owner Occupied	2,433		2,433		4
Commercial – Non-owner Occupied	5,369		5,369		148
Residential – 1 to 4 Family	687		687		29
Residential – Multifamily	—		—		—
Consumer	—		—		—
	$	9,824	$	14,541	$	181


	Three Months Ended March 31,
	2022				2021
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
	(Dollars in thousands)
Commercial and Industrial	$	206	$	—	$	49	$	—
Construction	1,139		—		4,765		36
Real Estate Mortgage:
Commercial – Owner Occupied	2,367		3		4,534		21
Commercial – Non-owner Occupied	5,472		67		10,244		120
Residential – 1 to 4 Family	690		7		1,505		15
Residential – Multifamily	—		—		—		—
Consumer	—		—		—		—
Total	$	9,874	$	77	$	21,097	$	192

We reported performing TDR loans (not reported as non-accrual loans) of $5.9 million and $6.0 million, respectively, at March 31, 2022 and December 31, 2021. Nonperforming TDR loans were zero at March 31, 2022 and December 31, 2021, respectively. There were no new loans modified as a TDR and no additional commitments to lend additional funds to debtors whose loans have been modified in TDRs for the three months ended March 31, 2022 and the year ended December 31, 2021, respectively.

A TDR is a loan the terms of which have been restructured in a manner that grants a concession to a borrower experiencing financial difficulty. TDRs result from our loss mitigation activities that include rate reductions, extension of maturity, or a combination of both, which are intended to minimize economic loss and to avoid foreclosure or repossession of collateral. TDRs are classified as impaired loans and are included in the impaired loan disclosures. TDRs are also evaluated to determine whether they should be placed on non-accrual status. Once a loan becomes a TDR, it will continue to be reported as a TDR until it is repaid in full, foreclosed, sold or it meets the criteria to be removed from TDR status.

TDRs are generally included in nonaccrual loans and may return to performing status after a minimum of six consecutive monthly payments under restructured terms and also meeting other performance indicators. We review the financial performance of the borrower over the past year to be reasonably assured of repayment and performance according to the modified terms. This review consists of an analysis of the borrower’s historical results; the borrower’s projected results over the next four quarters; and current financial information of the borrower and any guarantors. The projected repayment source needs to be reliable, verifiable, quantifiable and sustainable. At the time of restructuring, the amount of the loan principal for which we are not reasonably assured of repayment is charged-off, but not forgiven.

All TDRs are also reviewed quarterly to determine the amount of any impairment. The nature and extent of impairment of TDRs, including those that have experienced a subsequent default, is considered in the determination of an appropriate level of allowance for loan losses. For TDR loans, we had specific reserves of $181,000 and $254,000 in the allowance at March 31, 2022 and December 31, 2021, respectively. Some loan modifications classified as TDRs may not ultimately result in the full collection of

Credit Quality Indicators: As part of the on-going monitoring of the credit quality of the Company's loan portfolio, management tracks certain credit quality indicators including trends related to the risk grades of loans, the level of classified loans, net charge-offs, nonperforming loans (see details above) and the general economic conditions in the region.

5.Other Assets Especially Mentioned (OAEM): Financial condition is such that assets in this category have a potential weakness or pose unwarranted financial risk to the Bank even though the asset value is not currently impaired. The asset does not currently warrant adverse classification but if not corrected could weaken and could create future increased risk exposure. Includes loans that require an increased degree of monitoring or servicing as a result of internal or external changes.

6.Substandard: This classification represents more severe cases of #5 (OAEM) characteristics that require increased monitoring. Assets are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected. Assets are inadequately protected by the current net worth and paying capacity of the borrower or of the collateral. Asset has a well-defined weakness or weaknesses that impairs the ability to repay debt and jeopardizes the timely liquidation or realization of the collateral at the asset’s net book value.

7.Doubtful: Assets which have all the weaknesses inherent in those assets classified #6 (Substandard) but the risks are more severe relative to financial deterioration in capital and/or asset value; accounting/evaluation techniques may be questionable and the overall possibility for collection in full is highly improbable. Borrowers in this category require constant monitoring, are considered work-out loans and present the potential for future loss to the Bank.


At March 31, 2022	Pass		OAEM		Substandard		Doubtful		Total
	(Dollars in thousands)
Commercial and Industrial	$	38,629	$	—	$	196	$	—	$	38,825
Construction	134,871		—		1,139		—		136,010
Real Estate Mortgage:
Commercial – Owner Occupied	128,230		3,029		1,016		—		132,275
Commercial – Non-owner Occupied	300,545		14,380		1,328		—		316,253
Residential – 1 to 4 Family	779,566		—		316		—		779,882
Residential – Multifamily	84,970		—		—		—		84,970
Consumer	7,624		—		—		—		7,624
Total	$	1,474,435	$	17,409	$	3,995	$	—	$	1,495,839