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Loans and Allowance for Loan Losses
 12 Months Ended
Dec. 31, 2020
Loans and Allowance for Loan Losses [Abstract]  
Loans and Allowance for Loan Losses
(4)
Loans and Allowance for Loan Losses


The following tables present the recorded investment in loans by loan class:

 
  
December 31, 2020
  
(dollars in thousands)
  
New York and
other states*
    
Florida
    
Total
  
Commercial:
  
 
    
 
    
 
  
Commercial real estate
  
$
148,775
      
18,666
      
167,441
  
Other
    
44,932
      
119
      
45,051
  
Real estate mortgage - 1 to 4 family:
    
 
      
 
      
 
  
First mortgages
    
2,606,781
      
1,098,915
      
3,705,696
  
Home equity loans
    
59,400
      
15,071
      
74,471
  
Home equity lines of credit
    
193,654
      
48,540
      
242,194
  
Installment
    
7,810
      
1,807
      
9,617
  
Total loans, net
  
$
3,061,352
      
1,183,118
      
4,244,470
  
Less: Allowance for loan losses
    
 
      
 
      
49,595
  
Net loans
    
 
      
 
    
$
4,194,875
  

 
  
December 31, 2019
  
(dollars in thousands)
  
New York and
other states*
    
Florida
    
Total
  
Commercial:
  
 
    
 
    
 
  
Commercial real estate
  
$
162,186
      
17,752
      
179,938
  
Other
    
19,326
      
235
      
19,561
  
Real estate mortgage - 1 to 4 family:
    
 
      
 
      
 
  
First mortgages
    
2,541,440
      
953,995
      
3,495,435
  
Home equity loans
    
69,791
      
18,548
      
88,339
  
Home equity lines of credit
    
221,487
      
46,435
      
267,922
  
Installment
    
8,706
      
2,295
      
11,001
  
Total loans, net
  
$
3,022,936
      
1,039,260
      
4,062,196
  
Less: Allowance for loan losses
    
 
      
 
      
44,317
  
Net loans
    
 
      
 
    
$
4,017,879
  

* Includes New York, New Jersey, Vermont and Massachusetts.


As December 31, 2020, the commercial loan class includes $29 million of PPP loans.


At December 31, 2020 and 2019, the Company had approximately $24.7 million and $28.5 million of real estate construction loans, respectively. Of the $24.7 million in real estate construction loans at December 31, 2020, approximately $10.5 million were secured by first mortgages to residential borrowers with the remaining $14.2 million were to commercial borrowers for residential construction projects. Of the $28.5 million in real estate construction loans at December 31, 2019, approximately $10.7 million were secured by first mortgages to residential borrowers with the remaining $17.8 million were to commercial borrowers for residential construction projects.  The vast majority of construction loans are in the Company’s New York market.


At December 31, 2020 and 2019, loans to executive officers, directors, and to associates of such persons aggregated $16.3 million and $4.4 million, respectively.  During 2020, approximately $2.3 million of new loans were made and repayments of loans totaled approximately $1.8 million.  The composition of related parties changed during the year resulting in additions to outstanding loans of approximately $12.1 million, and reductions to loans of approximately $703 thousand at December 31, 2020.  All loans are current according to their terms.


TrustCo lends in the geographic territory of its branch locations in New York, Florida, Massachusetts, New Jersey and Vermont.  Although the loan portfolio is diversified, a portion of its debtors’ ability to repay depends significantly on the economic conditions prevailing in the respective geographic territory.


The following tables present the recorded investment in non-accrual loans by loan class:

 
  
December 31, 2020
  
(dollars in thousands)
  
New York and
other states*
    
Florida
    
Total
  
Loans in non-accrual status:
                  
Commercial:
                  
Commercial real estate
  
$
372
      
-
      
372
  
Other
    
80
      
-
      
80
  
Real estate mortgage - 1 to 4 family:
                        
First mortgages
    
16,637
      
1,010
      
17,647
  
Home equity loans
    
80
      
47
      
127
  
Home equity lines of credit
    
2,662
      
130
      
2,792
  
Installment
    
43
      
-
      
43
  
Total non-accrual loans
    
19,874
      
1,187
      
21,061
  
Restructured real estate mortgages - 1 to 4 family
    
23
      
-
      
23
  
Total nonperforming loans
  
$
19,897
      
1,187
      
21,084
  

 
  
December 31, 2019
  
(dollars in thousands)
  
New York and
other states*
    
Florida
    
Total
  
Loans in non-accrual status:
                  
Commercial:
                  
Commercial real estate
  
$
733
      
-
      
733
  
Other
    
83
      
-
      
83
  
Real estate mortgage - 1 to 4 family:
                        
First mortgages
    
15,385
      
1,468
      
16,853
  
Home equity loans
    
218
      
48
      
266
  
Home equity lines of credit
    
2,804
      
98
      
2,902
  
Installment
    
3
      
-
      
3
  
Total non-accrual loans
    
19,226
      
1,614
      
20,840
  
Restructured real estate mortgages - 1 to 4 family
    
29
      
-
      
29
  
Total nonperforming loans
  
$
19,255
      
1,614
      
20,869
  

* Includes New York, New Jersey, Vermont and Massachusetts.


The Company transfers loans to other real estate owned, at fair value less cost to sell, in the period the Company obtains physical possession of the property (through legal title or through a deed in lieu).  As of December 31, 2020 and 2019, other real estate owned included $541 thousand and $1.2 million, respectively, of residential foreclosed properties.  In addition, non‑accrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $11.6 million and $8.7 million as of December 31, 2020 and 2019, respectively.


The following tables present the aging of the recorded investment in past due loans by loan class and by region as of December 31, 2020 and 2019:

 
  
December 31, 2020
  
 
                                    
New York and other states*:
  
30-59
Days
    
60-89
Days
    
90 +
Days
    
Total
30+ days
          
Total
  
(dollars in thousands)
  
Past Due
    
Past Due
    
Past Due
    
Past Due
    
Current
    
Loans
  
 
                                    
Commercial:
                                    
Commercial real estate
  
$
125
      
77
      
279
      
481
      
148,294
      
148,775
  
Other
    
-
      
-
      
80
      
80
      
44,852
      
44,932
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
1,220
      
982
      
10,927
      
13,129
      
2,593,652
      
2,606,781
  
Home equity loans
    
120
      
1
      
48
      
169
      
59,231
      
59,400
  
Home equity lines of credit
    
401
      
344
      
1,273
      
2,018
      
191,636
      
193,654
  
Installment
    
3
      
-
      
43
      
46
      
7,764
      
7,810
  
 
                                                
Total
  
$
1,869
      
1,404
      
12,650
      
15,923
      
3,045,429
      
3,061,352
  

Florida:
  
30-59
Days
    
60-89
Days
    
90 +
Days
    
Total
30+ days
          
Total
  
(dollars in thousands)
  
Past Due
    
Past Due
    
Past Due
    
Past Due
    
Current
    
Loans
  
 
                                    
Commercial:
                                    
Commercial real estate
  
$
-
      
-
      
-
      
-
      
18,666
      
18,666
  
Other
    
-
      
-
      
-
      
-
      
119
      
119
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
365
      
517
      
655
      
1,537
      
1,097,378
      
1,098,915
  
Home equity loans
    
-
      
-
      
47
      
47
      
15,024
      
15,071
  
Home equity lines of credit
    
-
      
-
      
-
      
-
      
48,540
      
48,540
  
Installment
    
7
      
10
      
-
      
17
      
1,790
      
1,807
  
 
                                                
Total
  
$
372
      
527
      
702
      
1,601
      
1,181,517
      
1,183,118
  

Total:
  
30-59
Days
    
60-89
Days
    
90 +
Days
    
Total
30+ days
          
Total
  
(dollars in thousands)
  
Past Due
    
Past Due
    
Past Due
    
Past Due
    
Current
    
Loans
  
 
                                    
Commercial:
                                    
Commercial real estate
  
$
125
      
77
      
279
      
481
      
166,960
      
167,441
  
Other
    
-
      
-
      
80
      
80
      
44,971
      
45,051
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
1,585
      
1,499
      
11,582
      
14,666
      
3,691,030
      
3,705,696
  
Home equity loans
    
120
      
1
      
95
      
216
      
74,255
      
74,471
  
Home equity lines of credit
    
401
      
344
      
1,273
      
2,018
      
240,176
      
242,194
  
Installment
    
10
      
10
      
43
      
63
      
9,554
      
9,617
  
 
                                                
Total
  
$
2,241
      
1,931
      
13,352
      
17,524
      
4,226,946
      
4,244,470
  

* Includes New York, New Jersey, Vermont and Massachusetts.


The following table presents the aging of the recorded investment in past due loans by loan class and by region:

 
  
December 31, 2019
  
 
                                    
New York and other states*:
  
30-59
Days
    
60-89
Days
    
90 +
Days
    
Total
30+ days
          
Total
  
(dollars in thousands)
  
Past Due
    
Past Due
    
Past Due
    
Past Due
    
Current
    
Loans
  
 
                                    
Commercial:
                                    
Commercial real estate
  
$
141
      
-
      
617
      
758
      
161,428
      
162,186
  
Other
    
80
      
-
      
33
      
113
      
19,213
      
19,326
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
3,444
      
292
      
11,328
      
15,064
      
2,526,376
      
2,541,440
  
Home equity loans
    
183
      
7
      
133
      
323
      
69,468
      
69,791
  
Home equity lines of credit
    
232
      
149
      
1,141
      
1,522
      
219,965
      
221,487
  
Installment
    
37
      
8
      
3
      
48
      
8,658
      
8,706
  
 
                                                
Total
  
$
4,117
      
456
      
13,255
      
17,828
      
3,005,108
      
3,022,936
  

Florida:
  
30-59
Days
    
60-89
Days
    
90 +
Days
    
Total
30+ days
          
Total
  
(dollars in thousands)
  
Past Due
    
Past Due
    
Past Due
    
Past Due
    
Current
    
Loans
  
 
                                    
Commercial:
                                    
Commercial real estate
  
$
-
      
-
      
-
      
-
      
17,752
      
17,752
  
Other
    
-
      
-
      
-
      
-
      
235
      
235
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
542
      
-
      
617
      
1,159
      
952,836
      
953,995
  
Home equity loans
    
63
      
-
      
-
      
63
      
18,485
      
18,548
  
Home equity lines of credit
    
80
      
-
      
50
      
130
      
46,305
      
46,435
  
Installment
    
-
      
-
      
-
      
-
      
2,295
      
2,295
  
 
                                                
Total
  
$
685
      
-
      
667
      
1,352
      
1,037,908
      
1,039,260
  

Total:
  
30-59
Days
    
60-89
Days
    
90 +
Days
    
Total
30+ days
          
Total
  
(dollars in thousands)
  
Past Due
    
Past Due
    
Past Due
    
Past Due
    
Current
    
Loans
  
 
                                    
Commercial:
                                    
Commercial real estate
  
$
141
      
-
      
617
      
758
      
179,180
      
179,938
  
Other
    
80
      
-
      
33
      
113
      
19,448
      
19,561
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
3,986
      
292
      
11,945
      
16,223
      
3,479,212
      
3,495,435
  
Home equity loans
    
246
      
7
      
133
      
386
      
87,953
      
88,339
  
Home equity lines of credit
    
312
      
149
      
1,191
      
1,652
      
266,270
      
267,922
  
Installment
    
37
      
8
      
3
      
48
      
10,953
      
11,001
  
 
                                                
Total
  
$
4,802
      
456
      
13,922
      
19,180
      
4,043,016
      
4,062,196
  

* Includes New York, New Jersey, Vermont and Massachusetts.


At December 31, 2020 and 2019, there were no loans that are 90 days past due and still accruing interest.  As a result, non‑accrual loans includes all loans 90 days past due and greater as well as certain loans less than 90 days past due that were placed in non‑accruing status for reasons other than delinquent status.  There are no commitments to extend further credit on nonaccrual or restructured loans.


Activity in the allowance for loan losses by portfolio segment is summarized as follows:

  
For the year ended December 31, 2020
  
(dollars in thousands)
  
Commercial
    
Real Estate
Mortgage-
1 to 4 Family
    
Installment
    
Total
  
 
                        
Balance at beginning of period
  
$
3,999
      
39,748
      
570
      
44,317
  
Loans charged off:
                                
New York and other states*
    
36
      
404
      
187
      
627
  
Florida
    
-
      
-
      
34
      
34
  
Total loan chargeoffs
    
36
      
404
      
221
      
661
  
 
                                
Recoveries of loans previously charged off:
                                
New York and other states*
    
10
      
314
      
12
      
336
  
Florida
    
-
      
3
      
-
      
3
  
Total recoveries
    
10
      
317
      
12
      
339
  
Net loans charged off
    
26
      
87
      
209
      
322
  
Provision for loan losses
    
167
      
5,289
      
144
      
5,600
  
Balance at end of period
  
$
4,140
      
44,950
      
505
      
49,595
  

 
  
For the year ended December 31, 2019
  
(dollars in thousands)
  
Commercial
    
Real Estate
Mortgage-
1 to 4 Family
    
Installment
    
Total
  
 
                        
Balance at beginning of period
  
$
4,048
      
39,772
      
946
      
44,766
  
Loans charged off:
                                
New York and other states*
    
20
      
945
      
165
      
1,130
  
Florida
    
-
      
29
      
48
      
77
  
Total loan chargeoffs
    
20
      
974
      
213
      
1,207
  
 
                                
Recoveries of loans previously charged off:
                                
New York and other states*
    
46
      
496
      
21
      
563
  
Florida
    
-
      
36
      
-
      
36
  
Total recoveries
    
46
      
532
      
21
      
599
  
Net loans charged off (recoveries)
    
(26
)
    
442
      
192
      
608
  
Provision (recoveries) for loan losses
    
(75
)
    
418
      
(184
)
    
159
  
Balance at end of period
  
$
3,999
      
39,748
      
570
      
44,317
  

* Includes New York, New Jersey, Vermont and Massachusetts.


The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method as of December 31, 2020 and 2019:

 
  
December 31, 2020
  
(dollars in thousands)
  
Commercial
Loans
    
1-to-4 Family
Residential
Real Estate
    
Installment
Loans
    
Total
  
 
                        
Allowance for loan losses:
                        
Ending allowance balance attributable to loans:
                        
Individually evaluated for impairment
  
$
-
      
-
      
-
      
-
  
Collectively evaluated for impairment
    
4,140
      
44,950
      
505
      
49,595
  
 
                                
Total ending allowance balance
  
$
4,140
      
44,950
      
505
      
49,595
  
 
                                
Loans:
                                
Individually evaluated for impairment
  
$
1,028
      
20,553
      
-
      
21,581
  
Collectively evaluated for impairment
    
211,464
      
4,001,808
      
9,617
      
4,222,889
  
 
                                
Total ending loans balance
  
$
212,492
      
4,022,361
      
9,617
      
4,244,470
  

 
  
December 31, 2019
  
(dollars in thousands)
  
Commercial
Loans
    
1-to-4 Family
Residential
Real Estate
    
Installment
Loans
    
Total
  
 
                        
Allowance for loan losses:
                        
Ending allowance balance attributable to loans:
                        
Individually evaluated for impairment
  
$
-
      
-
      
-
      
-
  
Collectively evaluated for impairment
    
3,999
      
39,748
      
570
      
44,317
  
 
                                
Total ending allowance balance
  
$
3,999
      
39,748
      
570
      
44,317
  
 
                                
Loans:
                                
Individually evaluated for impairment
  
$
1,437
      
19,539
      
-
      
20,976
  
Collectively evaluated for impairment
    
198,062
      
3,832,157
      
11,001
      
4,041,220
  
 
                                
Total ending loans balance
  
$
199,499
      
3,851,696
      
11,001
      
4,062,196
  


The Company has identified nonaccrual commercial and commercial real estate loans, as well as all loans restructured under a TDR, as impaired loans.  A loan is considered impaired when it is probable that the borrower will be unable to repay the loan according to the original contractual terms of the loan agreement or the loan is restructured in a TDR.


A loan for which the terms have been modified, and for which the borrower is experiencing financial difficulties, is considered a TDR and is classified as impaired.  TDR’s at December 31, 2020 and 2019 are measured at the present value of estimated future cash flows using the loan’s effective rate at inception or the fair value of the underlying collateral if the loan is considered collateral dependent.


The following tables present impaired loans by loan class as of December 31, 2020 and 2019:

 
  
December 31, 2020
  
New York and other states*:
                        
 
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
YTD Avg
Recorded
Investment
  
 
                        
Commercial:
                        
Commercial real estate
  
$
819
      
943
      
-
      
1,186
  
Other
    
111
      
111
      
-
      
103
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
15,024
      
15,411
      
-
      
14,110
  
Home equity loans
    
219
      
240
      
-
      
235
  
Home equity lines of credit
    
2,158
      
2,298
      
-
      
2,258
  
 
                                
Total
    
18,331
      
19,003
      
-
      
17,892
  

Florida:
                        
 
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
YTD Avg
Recorded
Investment
  
 
                        
Commercial:
                        
Commercial real estate
    
98
      
98
      
-
      
105
  
Other
    
-
      
-
      
-
      
-
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
2,908
      
2,908
      
-
      
2,555
  
Home equity loans
    
-
      
-
      
-
      
16
  
Home equity lines of credit
    
244
      
244
      
-
      
246
  
 
                                
Total
  
$
3,250
      
3,250
      
-
      
2,922
  

Total:
                        
 
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
YTD Avg
Recorded
Investment
  
 
                        
Commercial:
                        
Commercial real estate
  
$
917
      
1,041
      
-
      
1,291
  
Other
    
111
      
111
      
-
      
103
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
17,932
      
18,319
      
-
      
16,665
  
Home equity loans
    
219
      
240
      
-
      
251
  
Home equity lines of credit
    
2,402
      
2,542
      
-
      
2,504
  
 
                                
Total
  
$
21,581
      
22,253
      
-
      
20,814
  

* Includes New York, New Jersey, Vermont and Massachusetts.


 
  
December 31, 2019
  
New York and other states*:
                        
 
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
YTD Avg
Recorded
Investment
  
 
                        
Commercial:
                        
Commercial real estate
  
$
1,217
      
1,359
      
-
      
1,385
  
Other
    
115
      
115
      
-
      
38
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
14,414
      
14,714
      
-
      
14,358
  
Home equity loans
    
235
      
255
      
-
      
241
  
Home equity lines of credit
    
2,160
      
2,300
      
-
      
2,274
  
 
                                
Total
  
$
18,141
      
18,743
      
-
      
18,296
  

Florida:
                        
 
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
YTD Avg
Recorded
Investment
  
 
                        
Commercial:
                        
Commercial real estate
  
$
105
      
105
      
-
      
82
  
Other
    
-
      
-
      
-
      
26
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
2,486
      
2,486
      
-
      
2,259
  
Home equity loans
    
-
      
-
      
-
      
51
  
Home equity lines of credit
    
244
      
244
      
-
      
249
  
 
                                
Total
  
$
2,835
      
2,835
      
-
      
2,667
  

Total:
                        
 
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
YTD Avg
Recorded
Investment
  
 
                        
Commercial:
                        
Commercial real estate
  
$
1,322
      
1,464
      
-
      
1,467
  
Other
    
115
      
115
      
-
      
64
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
16,900
      
17,200
      
-
      
16,617
  
Home equity loans
    
235
      
255
      
-
      
292
  
Home equity lines of credit
    
2,404
      
2,544
      
-
      
2,523
  
 
                                
Total
  
$
20,976
      
21,578
      
-
      
20,963
  

* Includes New York, New Jersey, Vermont and Massachusetts.


The Company has not committed to lend additional amounts to customers with outstanding loans that are classified as impaired.  Interest income recognized on impaired loans was not material in 2020, 2019, and 2018.


Included in impaired loans are approximately $11.7 million and $11.1 million of loans in accruing status that were identified as TDR’s as of December 31, 2020 and 2019, respectively.


Management evaluates impairment on impaired loans on a quarterly basis.  If, during this evaluation, impairment of the loan is identified, a charge‑off is taken at that time if necessary.  As a result, as of December 31, 2020 and 2019, based upon management’s evaluation and due to the sufficiency of charge‑offs taken, none of the allowance for loan losses has been allocated to a specific impaired loan(s).


The following table presents modified loans by class that were determined to be TDR’s that occurred during the years ended December 31, 2020, 2019 and 2018:

 
  
Year ended 12/31/20
    
Year ended 12/31/19
    
Year ended 12/31/18
  
 New York and other states*:
                                                      
(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
    
Number of
Contracts
    
Pre-
Modification
Outstanding
Recorded
Investment
    
Post-
Modification
Outstanding
Recorded
Investment
  
 
                                                      
Commercial:
                                                      
Commercial real estate
    
1
    
$
125
      
125
      
1
    
$
125
      
125
      
6
    
$
747
      
747
  
Real estate mortgage - 1 to 4 family:
                                                                        
First mortgages
    
12
      
2,303
      
2,303
      
18
      
2,621
      
2,621
      
18
      
2,349
      
2,349
  
Home equity loans
    
-
      
-
      
-
      
-
      
-
      
-
      
1
      
6
      
6
  
Home equity lines of credit
    
3
      
169
      
169
      
2
      
235
      
235
      
5
      
325
      
325
  
 
                                                                        
Total
    
16
    
$
2,597
      
2,597
      
21
    
$
2,981
      
2,981
      
30
    
$
3,427
      
3,427
  

Florida:
                                                      
 
(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
    
Number of
Contracts
    
Pre-
Modification
Outstanding
Recorded
Investment
    
Post-
Modification
Outstanding
Recorded
Investment
  
 
                                                      
Real estate mortgage - 1 to 4 family:
                                                      
First mortgages
    
4
    
$
586
      
586
      
6
    
$
632
      
632
      
1
    
$
35
      
35
  
Home equity loans
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
Home equity lines of credit
    
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
      
-
  
 
                                                                        
Total
    
4
    
$
586
      
586
      
6
    
$
632
      
632
      
1
    
$
35
      
35
  

* Includes New York, New Jersey, Vermont and Massachusetts.


The addition of these TDR’s did not have a significant impact on the allowance for loan losses.


The following table presents loans by class modified as TDR’s that occurred during the years ended December 31, 2020, 2019 and 2018 for which there was a payment default within 12 months of modification:

 
  
Year ended 12/31/20
    
Year ended 12/31/19
    
Year ended 12/31/18
  
New York and other states*:
(dollars in thousands)
  
Number of
Contracts
    
Recorded
Investment
    
Number of
Contracts
    
Recorded
Investment
    
Number of
Contracts
    
Recorded
Investment
  
 
                                    
Real estate mortgage - 1 to 4 family:
                                    
First mortgages
    
4
    
$
457
      
2
    
$
418
      
1
    
$
101
  
Home equity loans
    
1
      
19
      
-
      
-
      
-
      
-
  
Home equity lines of credit
    
-
      
-
      
-
      
-
      
-
      
-
  
 
                                                
Total
    
5
    
$
476
      
2
    
$
418
      
1
    
$
101
  

Florida:
(dollars in thousands)
  
Number of
Contracts
    
Recorded
Investment
    
Number of
Contracts
    
Recorded
Investment
    
Number of
Contracts
    
Recorded
Investment
  
 
                                    
Real estate mortgage - 1 to 4 family:
                                    
First mortgages
    
-
    
$
-
      
-
    
$
-
      
-
    
$
-
  
Home equity lines of credit
    
-
      
-
      
-
      
-
      
-
      
-
  
 
                                                
Total
    
-
    
$
-
      
-
    
$
-
      
-
    
$
-
  

* Includes New York, New Jersey, Vermont and Massachusetts.


In situations where the Bank considers a loan modification, management determines whether the borrower is experiencing financial difficulty by performing an evaluation 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 under the Company’s underwriting policy.  Generally, the modification of the terms of loans was the result of the borrower filing for bankruptcy protection.  Chapter 13 bankruptcies generally include the deferral of all past due amounts for a period of generally 60 months in accordance with the bankruptcy court order.  In the case of Chapter 7 bankruptcies, even though there is no modification of terms, the borrowers’ debt to the Company was discharged and they may not reaffirm the debt.


A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.  In situations involving a borrower filing for Chapter 13 bankruptcy protection, however, a loan is considered to be in payment default once it is 30 days contractually past due, consistent with the treatment by the bankruptcy court.


The TDR’s that subsequently defaulted described above did not have a material impact on the allowance for loan losses as the underlying collateral was evaluated at the time these loans were identified as TDR’s, and a charge‑off was taken at that time, if necessary.  Collateral values on these loans are reviewed for collateral sufficiency on a quarterly basis.


As noted above, loan modifications and payment deferrals as a result of COVID-19 that meet the criteria established under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators are excluded from evaluation of TDR classification and will continue to be reported as current during the payment deferral period. The Company’s policy is to continue to accrue interest during the deferral period. Loans not meeting the CARES ACT or regulatory guidance are evaluated for TDR and non-accrual treatment under the Company’s existing policies and procedures.  Loan modifications made pursuant to the CARES ACT that were in payment deferral at December 31, 2020 totaled approximately $2 million of residential loans. There were no commercial or installment loan deferrals as of December 31, 2020.


The Company categorizes non-homogenous loans such as commercial and commercial real estate 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, among other factors.  On at least an annual basis, in accordance with the Company’s Loan Policy, the Company analyzes non-homogeneous loans, individually by grading the loans based on credit risk.  The loan grades assigned to all loan types are also tested by the Company’s external loan review firm in accordance with the Company’s loan review policy.


The Company uses the following definitions for classified loans:

Special Mention: Loans classified as special mention have a 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 Company’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 Company will sustain some loss if the deficiencies are not corrected.

Doubtful: Loans classified as doubtful have all the weaknesses inherent in those loans 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.  All doubtful loans are considered impaired.


Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans.


As of December 31, 2020 and 2019, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

 
  
December 31, 2020
  
New York and other states*:
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
 
                  
Commercial:
                  
Commercial real estate
  
$
145,741
      
3,034
      
148,775
  
Other
    
44,522
      
410
      
44,932
  
 
  
$
190,263
      
3,444
      
193,707
  

Florida:
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
 
                  
Commercial:
                  
Commercial real estate
  
$
18,092
      
574
      
18,666
  
Other
    
119
      
-
      
119
  
 
  
$
18,211
      
574
      
18,785
  

Total:
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
 
                  
Commercial:
                  
Commercial real estate
  
$
163,833
      
3,608
      
167,441
  
Other
    
44,641
      
410
      
45,051
  
   
$
208,474
      
4,018
      
212,492
  

* Includes New York, New Jersey and Massachusetts.

 
  
December 31, 2019
  
New York and other states*:
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
 
                  
Commercial:
                  
Commercial real estate
  
$
157,280
      
4,906
      
162,186
  
Other
    
18,384
      
942
      
19,326
  
 
  
$
175,664
      
5,848
      
181,512
  

Florida:
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
 
                  
Commercial:
                  
Commercial real estate
  
$
17,752
      
-
      
17,752
  
Other
    
235
      
-
      
235
  
 
  
$
17,987
      
-
      
17,987
  

Total:
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
 
                  
Commercial:
                  
Commercial real estate
  
$
175,032
      
4,906
      
179,938
  
Other
    
18,619
      
942
      
19,561
  
   
$
193,651
      
5,848
      
199,499
  

* Includes New York, New Jersey and Massachusetts.


Included in classified loans in the above tables are impaired loans of $796 thousand and $816 thousand at December 31, 2020 and 2019, respectively.


For homogeneous loan pools, such as residential mortgages, home equity lines of credit, and installment loans, the Company uses payment status to identify the credit risk in these loan portfolios.  Payment status is reviewed on a daily basis by the Bank’s collection area and on a monthly basis with respect to determining the adequacy of the allowance for loan losses.  The payment status of these homogeneous pools at December 31, 2020 and 2019 is included in the aging of the recorded investment of past due loans table.  In addition, the total nonperforming portion of these homogeneous loan pools at December 31, 2020 and 2019 is presented in the recorded investment in non-accrual loans table.


As of December 31, 2020, the company granted 663 PPP loans totaling $46 million of which 514 PPP loans totaling $29 million remain outstanding.