LOANS

12 Months Ended

Dec. 31, 2021

LOANS

LOANS

8. LOANS

The loans receivable portfolio is segmented into commercial, residential mortgage and consumer loans. Loans outstanding at December 31, 2021 and December 31, 2020 are summarized by segment, and by classes within each segment, as follows:

Summary of Loans by Type

(In Thousands)

	December 31,		December 31,
	2021		2020
Commercial:
Commercial loans secured by real estate	$	569,840	$	531,810
Commercial and industrial		159,073		159,577
Paycheck Protection Program - 1st Draw		1,356		132,269
Paycheck Protection Program - 2nd Draw		25,508		0
Political subdivisions		81,301		53,221
Commercial construction and land		60,579		42,874
Loans secured by farmland		11,121		11,736
Multi-family (5 or more) residential		50,089		55,811
Agricultural loans		2,351		3,164
Other commercial loans		17,153		17,289
Total commercial		978,371		1,007,751
Residential mortgage:
Residential mortgage loans - first liens		483,629		532,947
Residential mortgage loans - junior liens		23,314		27,311
Home equity lines of credit		39,252		39,301
1-4 Family residential construction		23,151		20,613
Total residential mortgage		569,346		620,172
Consumer		17,132		16,286
Total		1,564,849		1,644,209
Less: allowance for loan losses		(13,537)		(11,385)
Loans, net	$	1,551,312	$	1,632,824

In the table above, outstanding loan balances are presented net of deferred loan origination fees of $4,247,000 at December 31, 2021 and $6,286,000 at December 31, 2020.

The Corporation grants loans to individuals as well as commercial and tax-exempt entities. Commercial, residential and personal loans are made to customers geographically concentrated in Northcentral Pennsylvania, the Southern tier of New York State, Southeastern Pennsylvania and Southcentral Pennsylvania. Although the Corporation has a diversified loan portfolio, a significant portion of its debtors’ ability to honor their contracts is dependent on the local economic conditions within the region.

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) was signed into law. The CARES Act is a $2 trillion stimulus package designed to provide relief to U.S. businesses and consumers struggling as a result of the pandemic. A provision in the CARES Act includes creation of the Paycheck Protection Program (“PPP”) through the Small Business Administration (“SBA”) and Treasury Department. Under the PPP, the Corporation, as an SBA-certified lender, provides SBA-guaranteed loans to

small businesses to pay their employees, rent, mortgage interest, and utilities. PPP loans will be forgiven subject to clients’ providing documentation evidencing their compliant use of funds and otherwise complying with the terms of the program.  Information related to PPP loans advanced pursuant to the CARES Act are labeled “1st Draw” within the tables.

Section 4013 of the CARES Act provides that, from the period beginning March 1, 2020 until 60 days after the date on which the national emergency concerning the coronavirus (COVID-19) pandemic declared by the President of the United States under the National Emergencies Act terminates (the “applicable period”), the Corporation may elect to suspend U.S. GAAP for loan modifications related to the pandemic that would otherwise be categorized as troubled debt restructurings (TDRs) and suspend any determination of a loan modified as a result of the effects of the pandemic as being a TDR, including impairment for accounting purposes. The suspension is applicable for the term of the loan modification that occurs during the applicable period for a loan that was not more than 30 days past due as of December 31, 2019. The suspension is not applicable to any adverse impact on the credit of a borrower that is not related to the pandemic.

In addition, the banking regulators and other financial regulators, on March 22, 2020 and revised April 7, 2020, issued a joint interagency statement titled the “Interagency Statement on Loan Modifications and Reporting for Financial Institutions Working with Customers Affected by the Coronavirus” that encourages financial institutions to work prudently with borrowers who are or may be unable to meet their contractual payment obligations due to the effects of the COVID-19 pandemic. Pursuant to the interagency statement, loan modifications that do not meet the conditions of Section 4013 of the CARES Act may still qualify as a modification that does not need to be accounted for as a TDR. Specifically, the agencies confirmed with the FASB staff that short-term modifications made in good faith in response to the pandemic to borrowers who were current prior to any relief are not TDRs under U.S. GAAP. This includes short-term (e.g. six months) modifications such as payment deferrals, fee waivers, extensions of repayment terms, or delays in payment that are insignificant. Borrowers considered current are those that are less than 30 days past due on their contractual payments at the time a modification program is implemented. Appropriate allowances for loan and lease losses are expected to be maintained. With regard to loans not otherwise reportable as past due, financial institutions are not expected to designate loans with deferrals granted due to the pandemic as past due because of the deferral. The interagency statement also states that during short-term pandemic-related loan modifications, these loans generally should not be reported as nonaccrual.

On December 27, 2020, the President of the United States signed into law the Consolidated Appropriations Act, 2021 (the “CAA”), which includes provisions that broadly address additional COVID-19 responses and relief.  Among the additional relief measures included are certain extensions to elements of the CARES Act, including extension of temporary relief from troubled debt restructurings established under Section 4013 of the CARES Act to the earlier of a) January 1, 2022, or b) the date that is 60 days after the date on which the national COVID-19 emergency terminates. The CAA also includes additional funding for the PPP with additional eligibility requirements for borrowers with generally the same loan terms as provided under the CARES Act. Information related to PPP loans advanced pursuant to the CAA are labeled “2nd Draw” within the tables.

The maximum term of PPP loans is five years. Most of the Corporation’s 1st Draw PPP loans have two-year terms, while 2nd Draw PPP loans have  five-year terms and the Corporation will be repaid sooner to the extent the loans are forgiven. The interest rate on PPP loans is 1%, and the Corporation has received fees from the SBA ranging between 1% and 5% per loan, depending on the size of the loan. Fees on PPP loans, net of origination costs and a market rate adjustment on PPP loans acquired from Covenant, are recognized in interest income as a yield adjustment over the term of the loans.

The Corporation began accepting and processing applications for loans under the PPP on April 3, 2020. Covenant also engaged in PPP lending starting in early April 2020. As of December 31, 2021, the recorded investment in 1st Draw PPP loans was $1,356,000, including contractual principal balances of $1,410,000, reduced by net deferred origination fees of $54,000. The recorded investment in 2nd Draw PPP loans was $25,508,000, including contractual principal balances of $26,356,000 reduced by net deferred origination fees of $848,000. Accretion of fees received on PPP loans, net of amortization of the market rate adjustment on PPP loans acquired from Covenant, was $5,515,000 in 2021 and $1,901,000 in 2020. Interest and fees on PPP loans which are included in taxable interest and fees on loans in the consolidated statements of income totaled $6,530,000 in 2021 and $2,924,000 in 2020.

To work with clients impacted by COVID-19, the Corporation offered short-term loan modifications on a case-by-case basis to borrowers who were current in their payments at the inception of the loan modification program. Prior to the merger, Covenant had a similar program in place, and these modified loans have been incorporated into the Corporation’s program. These efforts were designed to assist borrowers as they deal with the crisis and help the Corporation mitigate credit risk. For loans subject to the program, each

borrower was required to resume making regularly scheduled loan payments at the end of the modification period and the deferred amounts have been moved to the end of the loan term. Consistent with Section 4013 of the CARES Act, the modified loans have not been reported as past due, nonaccrual  or as TDRs at December 31, 2021 and 2020. Most of the initial modifications under the program became effective in 2020 and provided a deferral of interest or principal and interest for 90-to-180 days. At December 31, 2021, there were no loans in deferral status under the program. At December 31, 2020, there were 45 loans with a total recorded investment of $37,397,000, in deferral status under the program.

As described in Note 3, effective July 1, 2020, the Corporation acquired loans pursuant to its acquisition of Covenant. In 2019, the Corporation acquired loans pursuant to the acquisition of Monument Bancorp, Inc. (“Monument”). Acquired loans were recorded at their initial fair value, with adjustments made to the gross amortized cost of loans based on movements in interest rates (market rate adjustment) and based on credit fair value adjustments on non-impaired loans and impaired loans. Subsequent to the acquisitions, the Corporation has recognized amortization and accretion of a portion of the market rate adjustments and credit adjustments on non-impaired (performing) loans, and a partial recovery of purchased credit impaired (PCI) loans. For the years ended December 31, 2021 and 2020, adjustments to the initial market rate and credit fair value adjustments of performing loans were recognized as follows:

(In Thousands)	Year Ended
	December 31,		December 31,
	2021		2020
Market Rate Adjustment
Adjustments to gross amortized cost of loans at beginning of period	$	718	$	(1,415)
Market rate adjustment recorded in acquisition		0		2,909
Amortization recognized in interest income		(1,355)		(776)
Adjustments to gross amortized cost of loans at end of period	$	(637)	$	718
Credit Adjustment on Non-impaired Loans
Adjustments to gross amortized cost of loans at beginning of period	$	(5,979)	$	(1,216)
Credit adjustment recorded in acquisition		0		(7,219)
Accretion recognized in interest income		2,644		2,456
Adjustments to gross amortized cost of loans at end of period	$	(3,335)	$	(5,979)

A summary of PCI loans held at December 31, 2021 and December 31, 2020 is as follows:

(In Thousands)	December 31,		December 31,
	2021		2020
Outstanding balance	$	9,802	$	10,316
Carrying amount		6,558		6,841

Transactions within the allowance for loan losses, summarized by segment and class, were as follows:

	December 31,								December 31,
Year Ended December 31, 2021	2020						Provision		2021
(In Thousands)	Balance		Charge-offs		Recoveries		(Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	3,051	$	0	$	2	$	1,352	$	4,405
Commercial and industrial		2,245		(1,464)		20		1,922		2,723
Commercial construction and land		454		0		0		183		637
Loans secured by farmland		120		0		0		(5)		115
Multi-family (5 or more) residential		236		0		0		(21)		215
Agricultural loans		34		0		0		(9)		25
Other commercial loans		168		0		0		5		173
Total commercial		6,308		(1,464)		22		3,427		8,293
Residential mortgage:
Residential mortgage loans - first liens		3,524		(11)		4		133		3,650
Residential mortgage loans - junior liens		349		0		0		(165)		184
Home equity lines of credit		281		0		2		19		302
1-4 Family residential construction		99		0		0		103		202
Total residential mortgage		4,253		(11)		6		90		4,338
Consumer		239		(100)		38		58		235
Unallocated		585		0		0		86		671
Total Allowance for Loan Losses	$	11,385	$	(1,575)	$	66	$	3,661	$	13,537

	December 31,								December 31,
Year Ended December 31, 2020	2019						Provision		2020
(In Thousands)	Balance		Charge-offs		Recoveries		(Credit)		Balance
Allowance for Loan Losses:
Commercial:
Commercial loans secured by real estate	$	1,921	$	0	$	0	$	1,130	$	3,051
Commercial and industrial		1,391		(2,236)		16		3,074		2,245
Commercial construction and land		966		(107)		0		(405)		454
Loans secured by farmland		158		0		0		(38)		120
Multi-family (5 or more) residential		156		0		0		80		236
Agricultural loans		41		0		0		(7)		34
Other commercial loans		155		0		0		13		168
Total commercial		4,788		(2,343)		16		3,847		6,308
Residential mortgage:
Residential mortgage loans - first liens		3,405		0		39		80		3,524
Residential mortgage loans - junior liens		384		0		1		(36)		349
Home equity lines of credit		276		0		4		1		281
1-4 Family residential construction		117		0		0		(18)		99
Total residential mortgage		4,182		0		44		27		4,253
Consumer		281		(122)		41		39		239
Unallocated		585		0		0		0		585
Total Allowance for Loan Losses	$	9,836	$	(2,465)	$	101	$	3,913	$	11,385

For the year ended December 31, 2021, the provision for loan losses was $3,661,000, a decrease in expense of $252,000 as compared to 2020. In 2021, the provision included the impact of partial charge-offs totaling $1,463,000 on a commercial loan. At December 31, 2021, the recorded investment in this loan was $1,391,000. In total, the provision for 2021 included a net charge of $1,324,000 related to specific loans (net charge-offs of $1,509,000 offset by a net decrease in specific allowances on loans of $185,000), an increase of $2,251,000 in the collectively determined potion of the allowance and an $86,000 increase in the unallocated allowance. The increase in the collectively determined portion of the allowance reflected the impact of an increase in volume of commercial loans, excluding PPP loans. In 2020, the provision included a $2,219,000 charge-off on one commercial loan for which there was no recorded investment at December 31, 2021 and 2020.

In determining the larger loan relationships for detailed assessment under the specific allowance component, the Corporation uses an internal risk rating system. Under the risk rating system, the Corporation classifies problem or potential problem loans as “Special Mention,” “Substandard,” or “Doubtful” on the basis of currently existing facts, conditions and values. Loans that do not currently expose the Corporation to sufficient risk to warrant classification as Substandard or Doubtful, but possess weaknesses that deserve management’s close attention, are deemed to be Special Mention. Substandard loans include those characterized by the distinct possibility that the Corporation will sustain some loss if the deficiencies are not corrected. Loans classified as Doubtful have all the weaknesses inherent in those classified as Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, conditions and values, highly questionable and improbable. Risk ratings are updated any time that conditions or the situation warrants. Loans not classified are included in the “Pass” column in the table that follows.

The following tables summarize the aggregate credit quality classification of outstanding loans by risk rating as of December 31, 2021 and 2020:

December 31, 2021									Purchased
(In Thousands)			Special						Credit
	Pass		Mention		Substandard		Doubtful		Impaired		Total
Commercial:
Commercial loans secured by real estate	$	538,966	$	10,510	$	16,220	$	0	$	4,144	$	569,840
Commercial and Industrial		142,775		10,841		4,694		0		763		159,073
Paycheck Protection Program - 1st Draw		1,356		0		0		0		0		1,356
Paycheck Protection Program - 2nd Draw		25,508		0		0		0		0		25,508
Political subdivisions		81,301		0		0		0		0		81,301
Commercial construction and land		59,816		715		48		0		0		60,579
Loans secured by farmland		10,011		186		924		0		0		11,121
Multi-family (5 or more) residential		47,638		0		873		0		1,578		50,089
Agricultural loans		1,802		0		549		0		0		2,351
Other commercial loans		17,150		3		0		0		0		17,153
Total commercial		926,323		22,255		23,308		0		6,485		978,371
Residential Mortgage:
Residential mortgage loans - first liens		469,044		7,981		6,534		0		70		483,629
Residential mortgage loans - junior liens		22,914		114		283		0		3		23,314
Home equity lines of credit		38,652		59		541		0		0		39,252
1-4 Family residential construction		23,151		0		0		0		0		23,151
Total residential mortgage		553,761		8,154		7,358		0		73		569,346
Consumer		17,092		0		40		0		0		17,132
Totals	$	1,497,176	$	30,409	$	30,706	$	0	$	6,558	$	1,564,849

December 31, 2020									Purchased
(In Thousands)			Special						Credit
	Pass		Mention		Substandard		Doubtful		Impaired		Total
Commercial:
Commercial loans secured by real estate	$	494,876	$	17,374	$	15,262	$	0	$	4,298	$	531,810
Commercial and Industrial		143,500		8,025		7,268		0		784		159,577
Paycheck Protection Program - 1st Draw		132,269		0		0		0		0		132,269
Political subdivisions		53,221		0		0		0		0		53,221
Commercial construction and land		42,110		715		49		0		0		42,874
Loans secured by farmland		10,473		405		858		0		0		11,736
Multi-family (5 or more) residential		50,563		2,405		1,229		0		1,614		55,811
Agricultural loans		2,569		0		595		0		0		3,164
Other commercial loans		17,289		0		0		0		0		17,289
Total commercial		946,870		28,924		25,261		0		6,696		1,007,751
Residential Mortgage:
Residential Mortgage loans - first liens		516,685		6,192		9,994		0		76		532,947
Residential Mortgage loans - junior liens		26,480		141		621		0		69		27,311
Home equity lines of credit		38,529		59		713		0		0		39,301
1-4 Family residential construction		20,613		0		0		0		0		20,613
Total residential mortgage		602,307		6,392		11,328		0		145		620,172
Consumer		16,172		0		114		0		0		16,286
Totals	$	1,565,349	$	35,316	$	36,703	$	0	$	6,841	$	1,644,209

The following tables present a summary of loan balances and the related allowance for loan losses summarized by portfolio segment and class for each impairment method used as of December 31, 2021 and 2020:

December 31, 2021	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Commercial:
Commercial loans secured by real estate	$	10,926	$	558,914	$	569,840	$	669	$	3,736	$	4,405
Commercial and industrial		2,503		156,570		159,073		71		2,652		2,723
Paycheck Protection Program - 1st Draw		0		1,356		1,356		0		0		0
Paycheck Protection Program - 2nd Draw		0		25,508		25,508		0		0		0
Political subdivisions		0		81,301		81,301		0		0		0
Commercial construction and land		0		60,579		60,579		0		637		637
Loans secured by farmland		83		11,038		11,121		0		115		115
Multi-family (5 or more) residential		1,578		48,511		50,089		0		215		215
Agricultural loans		0		2,351		2,351		0		25		25
Other commercial loans		0		17,153		17,153		0		173		173
Total commercial		15,090		963,281		978,371		740		7,553		8,293
Residential mortgage:
Residential mortgage loans - first liens		630		482,999		483,629		0		3,650		3,650
Residential mortgage loans - junior liens		14		23,300		23,314		0		184		184
Home equity lines of credit		0		39,252		39,252		0		302		302
1-4 Family residential construction		0		23,151		23,151		0		202		202
Total residential mortgage		644		568,702		569,346		0		4,338		4,338
Consumer		0		17,132		17,132		0		235		235
Unallocated												671
Total	$	15,734	$	1,549,115	$	1,564,849	$	740	$	12,126	$	13,537

December 31, 2020	Loans:						Allowance for Loan Losses:
(In Thousands)
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated		Totals		Evaluated		Evaluated		Totals
Commercial:
Commercial loans secured by real estate	$	11,962	$	519,848	$	531,810	$	692	$	2,359	$	3,051
Commercial and industrial		1,359		158,218		159,577		71		2,174		2,245
Paycheck Protection Program - 1st Draw		0		132,269		132,269		0		0		0
Political subdivisions		0		53,221		53,221		0		0		0
Commercial construction and land		0		42,874		42,874		0		454		454
Loans secured by farmland		84		11,652		11,736		0		120		120
Multi-family (5 or more) residential		1,614		54,197		55,811		0		236		236
Agricultural loans		0		3,164		3,164		0		34		34
Other commercial loans		0		17,289		17,289		0		168		168
Total commercial		15,019		992,732		1,007,751		763		5,545		6,308
Residential mortgage:
Residential mortgage loans - first liens		2,385		530,562		532,947		9		3,515		3,524
Residential mortgage loans - junior liens		414		26,897		27,311		153		196		349
Home equity lines of credit		0		39,301		39,301		0		281		281
1-4 Family residential construction		0		20,613		20,613		0		99		99
Total residential mortgage		2,799		617,373		620,172		162		4,091		4,253
Consumer		0		16,286		16,286		0		239		239
Unallocated												585
Total	$	17,818	$	1,626,391	$	1,644,209	$	925	$	9,875	$	11,385

Summary information related to impaired loans as of December 31, 2021 and 2020 is as follows:

(In Thousands)	December 31, 2021						December 31, 2020
	Unpaid						Unpaid
	Principal		Recorded		Related		Principal		Recorded		Related
	Balance		Investment		Allowance		Balance		Investment		Allowance
With no related allowance recorded:
Commercial loans secured by real estate	$	6,600	$	4,458	$	0	$	7,168	$	5,398	$	0
Commercial and industrial		5,213		2,431		0		1,781		1,287		0
Residential mortgage loans - first liens		656		630		0		1,248		1,248		0
Residential mortgage loans - junior liens		124		14		0		160		105		0
Loans secured by farmland		83		83		0		84		84		0
Multi-family (5 or more) residential		2,734		1,578		0		2,770		1,614		0
Total with no related allowance recorded		15,410		9,194		0		13,211		9,736		0
With a related allowance recorded:
Commercial loans secured by real estate		6,468		6,468		668		6,501		6,501		691
Commercial and industrial		72		72		72		72		72		72
Residential mortgage loans - first liens		0		0		0		1,200		1,200		9
Residential mortgage loans - junior liens		0		0		0		309		309		153
Total with a related allowance recorded		6,540		6,540		740		8,082		8,082		925
Total	$	21,950	$	15,734	$	740	$	21,293	$	17,818	$	925

The average balance of impaired loans and interest income recognized on impaired loans is as follows:

(In Thousands)					Interest Income Recognized on
	Average Investment in				on Impaired Loans
	Impaired Loans				on a Cash Basis
	Year Ended December 31,				Year Ended December 31,
	2021		2020		2021		2020
Commercial:
Commercial loans secured by real estate	$	11,617	$	5,266	$	557	$	258
Commercial and industrial		2,636		2,542		34		34
Commercial construction and land		48		521		3		15
Loans secured by farmland		84		319		1		27
Multi-family (5 or more) residential		1,583		202		133		0
Agricultural loans		67		76		4		4
Other commercial loans		0		18		0		1
Total commercial		16,035		8,944		732		339
Residential mortgage:
Residential mortgage loans - first lien		1,647		1,853		78		116
Residential mortgage loans - junior lien		361		392		11		22
Home equity lines of credit		0		57		0		3
Total residential mortgage		2,008		2,302		89		141
Total	$	18,043	$	11,246	$	821	$	480

The breakdown by portfolio segment and class of nonaccrual loans and loans past due ninety days or more and still accruing is as follows:

(In Thousands)	December 31, 2021				December 31, 2020
	Past Due				Past Due
	90+ Days and				90+ Days and
	Accruing		Nonaccrual		Accruing		Nonaccrual
Commercial:
Commercial loans secured by real estate	$	738	$	10,885	$	395	$	11,550
Commercial and industrial		30		2,299		142		970
Commercial construction and land		0		48		0		49
Loans secured by farmland		28		83		188		84
Multi-family (5 or more) residential		0		1,578		0		1,614
Agricultural loans		65		0		0		0
Other commercial		0		0		71		0
Total commercial		861		14,893		796		14,267
Residential mortgage:
Residential mortgage loans - first liens		1,144		4,005		838		6,387
Residential mortgage loans - junior liens		69		3		52		378
Home equity lines of credit		102		82		233		299
Total residential mortgage		1,315		4,090		1,123		7,064
Consumer		43		16		56		85
Totals	$	2,219	$	18,999	$	1,975	$	21,416

Loans past due 90 days or more for which interest continues to be accrued have been evaluated and determind to be well secured and in the process of collection. The amounts shown in the table immediately above include loans classified as troubled debt restructurings (described in more detail below), if such loans are past due ninety days or more or nonaccrual. PCI loans with a total recorded investment of $6,558,000 at December 31, 2021 and $6,841,000 at December 31, 2020 are classified as nonaccrual.

The table below presents a summary of the contractual aging of loans as of December 31, 2021 and 2020. Loans modified under the Corporation’s program designed to work with clients impacted by COVID-19, as described above, are included in the current and past due less than 30 days category in the table that follows:

(In Thousands)	As of December 31, 2021								As of December 31, 2020
	Current &								Current &
	Past Due		Past Due		Past Due				Past Due		Past Due		Past Due
	Less than		30-89		90+				Less than		30-89		90+
	30 Days		Days		Days		Total		30 Days		Days		Days		Total
Commercial:
Commercial loans secured by real estate	$	563,658	$	762	$	5,420	$	569,840	$	529,998	$	66	$	1,746	$	531,810
Commercial and industrial		158,188		72		813		159,073		158,523		55		999		159,577
Paycheck Protection Program - 1st Draw		1,339		17		0		1,356		132,269		0		0		132,269
Paycheck Protection Program - 2nd Draw		25,508		0		0		25,508		0		0		0		0
Political subdivisions		81,301		0		0		81,301		53,221		0		0		53,221
Commercial construction and land		60,509		70		0		60,579		42,590		284		0		42,874
Loans secured by farmland		11,010		0		111		11,121		11,419		95		222		11,736
Multi-family (5 or more) residential		48,532		0		1,557		50,089		53,860		1,951		0		55,811
Agricultural loans		2,279		7		65		2,351		3,091		2		71		3,164
Other commercial loans		17,153		0		0		17,153		17,289		0		0		17,289
Total commercial		969,477		928		7,966		978,371		1,002,260		2,453		3,038		1,007,751
Residential mortgage:
Residential mortgage loans - first liens		475,637		5,038		2,954		483,629		523,191		5,703		4,053		532,947
Residential mortgage loans - junior liens		23,229		16		69		23,314		27,009		111		191		27,311
Home equity lines of credit		38,830		279		143		39,252		38,919		101		281		39,301
1-4 Family residential construction		23,151		0		0		23,151		20,457		156		0		20,613
Total residential mortgage		560,847		5,333		3,166		569,346		609,576		6,071		4,525		620,172
Consumer		17,001		72		59		17,132		16,063		83		140		16,286
Totals	$	1,547,325	$	6,333	$	11,191	$	1,564,849	$	1,627,899	$	8,607	$	7,703	$	1,644,209

Nonaccrual loans are included in the contractual aging immediately above. A summary of the contractual aging of nonaccrual loans at December 31, 2021 and 2020 is as follows:

(In Thousands)	Current &
	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Total
December 31, 2021 Nonaccrual Totals	$	8,800	$	1,227	$	8,972	$	18,999
December 31, 2020 Nonaccrual Totals	$	12,999	$	2,689	$	5,728	$	21,416

Loans whose terms are modified are classified as TDRs if the Corporation grants such borrowers concessions and it is deemed that those borrowers are experiencing financial difficulty. Loans classified as TDRs are designated as impaired. The outstanding balance of loans subject to TDRs, as well as the contractual aging information at December 31, 2021 and 2020 is as follows:

Troubled Debt Restructurings (TDRs):

(In Thousands)	Current &
	Past Due		Past Due		Past Due
	Less than		30-89		90+
	30 Days		Days		Days		Nonaccrual		Total
December 31, 2021 Totals	$	248	$	40	$	65	$	5,452	$	5,805
December 31, 2020 Totals	$	166	$	0	$	418	$	6,867	$	7,451

At December 31, 2021 and 2020, there were no commitments to loan additional funds to borrowers whose loans have been classified as TDRs.

A summary of TDRs that occurred during 2021 and 2020 is as follows:

(Balances in Thousands)	2021			2020
		Post-			Post-
	Number	Modification		Number	Modification
	of	Recorded		of	Recorded
	Loans	Investment		Loans	Investment
Residential mortgage - first liens:
Reduced monthly payments and extended maturity date	1	$	12	0	$	0
Reduced monthly payments for a fifteen-month period	1		116	0		0
Residential mortgage - junior liens,
New loan at lower than risk-adjusted market rate to borrower from whom short sale of other collateral was accepted	0		0	1		30
Home equity lines of credit:
Reduced monthly payments and extended maturity date	1		24	0		0
Reduced monthly payments for an eighteen-month period	1		70	0		0
Commercial loans secured by real estate:
Interest only payments for a nine-month period	0		0	1		240
Principal and interest payment deferral non-COVID related	0		0	2		4,831
Multi-family (5 or more) residential,
Principal and interest payment deferral non-COVID related	0		0	3		2,170
Total	4	$	222	7	$	7,271

In the year ended December 31, 2020, the Corporation recorded a specific allowance for loan losses of $416,000 related to a loan secured by commercial real estate for which a TDR concession was made in 2020 and included in the table above. In 2021, the allowance on this loan with a recorded investment of $3,405,000 at December 31, 2021 was increased to $427,000. The other loans for which TDRs were granted in 2021 and 2020 had no specific impact on the provision or allowance for loan losses.

In 2021 and 2020, payment defaults on loans for which modifications considered to be TDRs were entered into within the previous 12 months are summarized as follows:

	2021			2020
	Number			Number
	of	Recorded		of	Recorded
(Balances in Thousands)	Loans	Investment		Loans	Investment
Commercial loans secured by real estate	1	$	3,405	1	$	240
Total	1	$	3,405	1	$	240

The default that occurred in 2021 was on the loan referred to above with a specific allowance of $427,000 at December 31, 2021. The loan for which a default occurred in 2020 was repaid in full in 2021.

The carrying amount of foreclosed residential real estate properties held as a result of obtaining physical possession (included in Foreclosed assets held for sale in the consolidated balance sheets) is as follows:

(In Thousands)	December 31,		December 31,
	2021		2020
Foreclosed residential real estate	$	256	$	80

The recorded investment of consumer mortgage loans secured by residential real properties for which formal foreclosure proceedings were in process is as follows:

(In Thousands)	December 31,		December 31,
	2021		2020
Residential real estate in process of foreclosure	$	1,260	$	1,246