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Loans and Allowance for Loan Losses
 3 Months Ended
Mar. 31, 2021
Loans and Allowance for Loan Losses [Abstract]  
Loans and Allowance for Loan Losses
(5) Loans and Allowance for Loan Losses

 
  
March 31, 2021
  
(dollars in thousands)
  
New York and
other states*
    
Florida
    
Total
  
Commercial:
                  
Commercial real estate
  
$
146,994
      
17,989
      
164,983
  
Other
    
51,673
      
365
      
52,038
  
Real estate mortgage - 1 to 4 family:
                        
First mortgages
    
2,615,578
      
1,122,469
      
3,738,047
  
Home equity loans
    
55,469
      
14,321
      
69,790
  
Home equity lines of credit
    
185,237
      
50,407
      
235,644
  
Installment
    
7,072
      
1,598
      
8,670
  
Total loans, net
  
$
3,062,023
      
1,207,149
      
4,269,172
  
Less: Allowance for loan losses
                    
49,991
  
Net loans
                  
$
4,219,181
  

 
  
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
  

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

Included in commercial loans above are Paycheck Protection Program (“PPP”) loans totaling $36.6 million and $28.9 million as of March 31, 2021 and December 31, 2020, respectively.

At March 31, 2021 and December 31, 2020, the Company had approximately $28.5 million and $24.7 million of real estate construction loans, respectively.  Of the $28.5 million in real estate construction loans at March 31, 2021, approximately $14.4 million are secured by first mortgages to residential borrowers while approximately $14.1 million were to commercial borrowers for residential construction projects.  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 while approximately $14.2 million were to commercial borrowers for residential construction projects.  The vast majority of construction loans are in the Company’s New York market.

The Company 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 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).  Other real estate owned is included in Other assets on the Balance Sheet.  As of March 31, 2021 and December 31, 2020, other real estate owned included $420 thousand and $541 thousand of residential foreclosed properties, respectively.  In addition, non-accrual residential mortgage loans that are in the process of foreclosure had a recorded investment of $12.3 million and $11.6 million, respectively, as of March 31, 2021 and December 31, 2020.

The following table presents the recorded investment in non-accrual loans by loan class:

  
March 31, 2021
  
(dollars in thousands)
  
New York and
other states*
    
Florida
    
Total
  
Loans in non-accrual status:
                  
Commercial:
                  
Commercial real estate
  
$
45
      
-
      
45
  
Other
    
80
      
-
      
80
  
Real estate mortgage - 1 to 4 family:
                        
First mortgages
    
16,645
      
1,451
      
18,096
  
Home equity loans
    
78
      
46
      
124
  
Home equity lines of credit
    
3,103
      
129
      
3,232
  
Installment
    
32
      
-
      
32
  
Total non-accrual loans
    
19,983
      
1,626
      
21,609
  
Restructured real estate mortgages - 1 to 4 family
    
22
      
-
      
22
  
Total nonperforming loans
  
$
20,005
      
1,626
      
21,631
  

 
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
  

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

The following tables present the aging of the recorded investment in past due loans by loan class and by region as of March 31, 2021 and December 31, 2020:

  
March 31, 2021
  
New York and other states*:
                                    
(dollars in thousands)
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 +
Days
Past Due
    
Total
30+ days
Past Due
    
Current
    
Total
Loans
  
                                     
Commercial:
                                    
Commercial real estate
  
$
324
      
-
      
-
      
324
      
146,670
      
146,994
  
Other
    
-
      
-
      
80
      
80
      
51,593
      
51,673
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
1,439
      
281
      
11,133
      
12,853
      
2,602,725
      
2,615,578
  
Home equity loans
    
147
      
-
      
50
      
197
      
55,272
      
55,469
  
Home equity lines of credit
    
413
      
140
      
1,484
      
2,037
      
183,200
      
185,237
  
Installment
    
6
      
-
      
-
      
6
      
7,066
      
7,072
  
                                                 
Total
  
$
2,329
      
421
      
12,747
      
15,497
      
3,046,526
      
3,062,023
  

Florida:
                                    
(dollars in thousands)
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 +
Days
Past Due
    
Total
30+ days
Past Due
    
Current
    
Total
Loans
  
                                     
Commercial:
                                    
Commercial real estate
  
$
-
      
-
      
-
      
-
      
17,989
      
17,989
  
Other
    
-
      
-
      
-
      
-
      
365
      
365
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
1,052
      
163
      
914
      
2,129
      
1,120,340
      
1,122,469
  
Home equity loans
    
-
      
1
      
46
      
47
      
14,274
      
14,321
  
Home equity lines of credit
    
-
      
221
      
-
      
221
      
50,186
      
50,407
  
Installment
    
19
      
-
      
-
      
19
      
1,579
      
1,598
  
                                                 
Total
  
$
1,071
      
385
      
960
      
2,416
      
1,204,733
      
1,207,149
  

Total:
                                    
(dollars in thousands)
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 +
Days
Past Due
    
Total
30+ days
Past Due
    
Current
    
Total
Loans
  
                                     
Commercial:
                                    
Commercial real estate
  
$
324
      
-
      
-
      
324
      
164,659
      
164,983
  
Other
    
-
      
-
      
80
      
80
      
51,958
      
52,038
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
2,491
      
444
      
12,047
      
14,982
      
3,723,065
      
3,738,047
  
Home equity loans
    
147
      
1
      
96
      
244
      
69,546
      
69,790
  
Home equity lines of credit
    
413
      
361
      
1,484
      
2,258
      
233,386
      
235,644
  
Installment
    
25
      
-
      
-
      
25
      
8,645
      
8,670
  
                                                 
Total
  
$
3,400
      
806
      
13,707
      
17,913
      
4,251,259
      
4,269,172
  

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


  
December 31, 2020
  
New York and other states*:
                                    
(dollars in thousands)
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 +
Days
Past Due
    
Total
30+ days
Past Due
    
Current
    
Total
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:
                                    
(dollars in thousands)
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 +
Days
Past Due
    
Total
30+ days
Past Due
    
Current
    
Total
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:
                                    
(dollars in thousands)
  
30-59
Days
Past Due
    
60-89
Days
Past Due
    
90 +
Days
Past Due
    
Total
30+ days
Past Due
    
Current
    
Total
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.

At March 31, 2021 and December 31, 2020, there were no loans that were 90 days past due and still accruing interest.  As a result, non-accrual loans include all loans 90 days or more past due as well as certain loans less than 90 days past due that were placed on non-accrual status for reasons other than delinquent status.  There are no commitments to extend further credit on non-accrual or restructured loans.

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

  
For the three months ended March 31, 2021
  
(dollars in thousands)
  
Commercial
    
Real Estate
Mortgage-
1 to 4 Family
    
Installment
    
Total
  
Balance at beginning of period
  
$
4,140
      
44,950
      
505
      
49,595
  
Loans charged off:
                                
New York and other states*
    
-
      
86
      
7
      
93
  
Florida
    
-
      
-
      
2
      
2
  
Total loan chargeoffs
    
-
      
86
      
9
      
95
  
                                 
Recoveries of loans previously charged off:
                                
New York and other states*
    
32
      
88
      
21
      
141
  
Florida
    
-
      
-
      
-
      
-
  
Total recoveries
    
32
      
88
      
21
      
141
  
Net loans (recoveries) charged off
    
(32
)
    
(2
)
    
(12
)
    
(46
)
(Credit) provision for loan losses
    
(120
)
    
555
      
(85
)
    
350
  
Balance at end of period
  
$
4,052
      
45,507
      
432
      
49,991
  

 
For the three months ended March 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*
    
3
      
191
      
7
      
201
  
Florida
    
-
      
-
      
19
      
19
  
Total loan chargeoffs
    
3
      
191
      
26
      
220
  
                                 
Recoveries of loans previously charged off:
                                
New York and other states*
    
2
      
51
      
3
      
56
  
Florida
    
-
      
2
      
-
      
2
  
Total recoveries
    
2
      
53
      
3
      
58
  
Net loans (recoveries) charged off
    
1
      
138
      
23
      
162
  
(Credit) provision for loan losses
    
(38
)
    
2,033
      
5
      
2,000
  
Balance at end of period
  
$
3,960
      
41,643
      
552
      
46,155
  

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

The Company has identified non-accrual commercial and commercial real estate loans, as well as all loans restructured under a troubled debt restructuring (“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 as a TDR.

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 March 31, 2021 and December 31, 2020:

  
March 31, 2021
  
(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
    
4,052
      
45,507
      
432
      
49,991
  
                                 
Total ending allowance balance
  
$
4,052
      
45,507
      
432
      
49,991
  
                                 
Loans:
                                
Individually evaluated for impairment
  
$
699
      
19,646
      
-
      
20,345
  
Collectively evaluated for impairment
    
216,322
      
4,023,835
      
8,670
      
4,248,827
  
                                 
Total ending loans balance
  
$
217,021
      
4,043,481
      
8,670
      
4,269,172
  

 
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
  

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 March 31, 2021 and December 31, 2020 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 March 31, 2021 and December 31, 2020:

  
March 31, 2021
  
New York and other states*:
                        
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
Average
Recorded
Investment
  
                         
Commercial:
                        
Commercial real estate
  
$
523
      
616
      
-
      
1,152
  
Other
    
80
      
80
      
-
      
106
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
14,425
      
14,812
      
-
      
14,059
  
Home equity loans
    
214
      
214
      
-
      
235
  
Home equity lines of credit
    
2,005
      
2,145
      
-
      
2,260
  
                                 
Total
  
$
17,247
      
17,867
      
-
      
17,812
  

Florida:
                        
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
Average
Recorded
Investment
  
                         
Commercial:
                        
Commercial real estate
  
$
96
      
96
      
-
      
106
  
Other
    
-
      
-
      
-
      
-
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
2,758
      
2,758
      
-
      
2,547
  
Home equity loans
    
-
      
-
      
-
      
17
  
Home equity lines of credit
    
244
      
244
      
-
      
246
  
                                 
Total
  
$
3,098
      
3,098
      
-
      
2,916
  

Total:
                        
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
Average
Recorded
Investment
  
                         
Commercial:
                        
Commercial real estate
  
$
619
      
712
      
-
      
1,258
  
Other
    
80
      
80
      
-
      
106
  
Real estate mortgage - 1 to 4 family:
                                
First mortgages
    
17,183
      
17,570
      
-
      
16,606
  
Home equity loans
    
214
      
214
      
-
      
252
  
Home equity lines of credit
    
2,249
      
2,389
      
-
      
2,506
  
                                 
Total
  
$
20,345
      
20,965
      
-
      
20,728
  

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


  
December 31, 2020
  
New York and other states*:
                        
(dollars in thousands)
  
Recorded
Investment
    
Unpaid
Principal
Balance
    
Related
Allowance
    
Average
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
    
Average
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
    
Average
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.

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 during the three months ended March 31, 2021 and 2020.

As of March 31, 2021 and December 31, 2020 impaired loans included approximately $11.1 million and $11.7 million of loans in accruing status that were identified as TDR’s in accordance with regulatory guidance related to Chapter 7 bankruptcy loans.

Management evaluates impairment on impaired loans on a quarterly basis. If, during this evaluation, impairment of the loan is identified, a chargeoff is taken at that time.  As a result, as of March 31, 2021 and December 31, 2020, based upon management’s evaluation and due to the sufficiency of chargeoffs taken, none of the allowance for loan losses has been allocated to a specific impaired loan(s).

The following table presents, by class, loans that were modified as TDR’s:

  
Three months ended March 31, 2021
    
Three months ended March 31, 2020
  
 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
  
                                     
Commercial:
                                    
Commercial real estate
    
-
    
$
-
      
-
      
-
    
$
-
      
-
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
-
      
-
      
-
      
1
      
167
      
167
  
Home equity loans
    
-
      
-
      
-
      
-
      
-
      
-
  
Home equity lines of credit
    
-
      
-
      
-
      
1
      
70
      
70
  
                                                 
Total
    
-
    
$
-
      
-
      
2
    
$
237
      
237
  

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
  
                                     
Commercial:
                                    
Commercial real estate
    
-
    
$
-
      
-
      
-
    
$
-
      
-
  
Real estate mortgage - 1 to 4 family:
                                                
First mortgages
    
-
      
-
      
-
      
-
      
-
      
-
  
Home equity loans
    
-
      
-
      
-
      
-
      
-
      
-
  
Home equity lines of credit
    
-
      
-
      
-
      
-
      
-
      
-
  
                                                 
Total
    
-
    
$
-
      
-
      
-
    
$
-
      
-
  

* 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.

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, as previously noted, even though there is no modification of terms, the borrowers’ debt to the Company was discharged and they did 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.

There were no TDR’s that defaulted during the three months ended March 31, 2021 and 2020 which had been modified within the last twelve months.

Loan modifications and payment deferrals as a result of COVID-19 that meet the criteria established under Section 4013 of the Coronavirus Aid, Relief, and Economic Security Act (“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 March 31, 2021 were not material.

The Company categorizes commercial 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, the Company’s loan grading process analyzes non-homogeneous loans, such as commercial and commercial real estate loans, individually by grading the loans based on credit risk.  The loan grades assigned to all loan types are tested by the Company’s internal loan review department in accordance with the Company’s internal 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 classified as such 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 March 31, 2021 and December 31, 2020, and based on the most recent analysis performed, the risk category of loans by class of loans is as follows:

  
March 31, 2021
  
                   
New York and other states*:
                  
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
                   
Commercial:
                  
Commercial real estate
  
$
144,433
      
2,561
      
146,994
  
Other
    
51,444
      
229
      
51,673
  
   
$
195,877
      
2,790
      
198,667
  

Florida:
                  
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
                   
Commercial:
                  
Commercial real estate
  
$
17,419
      
570
      
17,989
  
Other
    
365
      
-
      
365
  
   
$
17,784
      
570
      
18,354
  

Total:
                  
(dollars in thousands)
  
Pass
    
Classified
    
Total
  
                   
Commercial:
                  
Commercial real estate
  
$
161,852
      
3,131
      
164,983
  
Other
    
51,809
      
229
      
52,038
  
   
$
213,661
      
3,360
      
217,021
  

* Includes New York, New Jersey and Massachusetts.


 
  
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.

Included in classified loans in the above tables are impaired loans of $471 thousand and $796 thousand at March 31, 2021 and December 31, 2020, 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 as of March 31, 2021 and December 31, 2020 is included in the aging of the recorded investment of the past due loans table. In addition, the total nonperforming portion of these homogeneous loan pools as of March 31, 2021 and December 31, 2020 is presented in the non-accrual loans table.