LOANS RECEIVABLE

6 Months Ended

Dec. 31, 2023

The following table sets forth the composition of the Company’s loan portfolio at December 31, 2023 and June 30, 2023:


	December 31, 2023		June 30, 2023
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,651,274	$	2,761,775
Nonresidential mortgage	947,287		968,574
Commercial business	144,134		146,861
Construction	221,933		226,609
Total commercial loans	3,964,628		4,103,819

One- to four-family residential mortgage	1,746,065		1,700,559

Consumer loans:
Home equity loans	43,517		43,549
Other consumer	2,728		2,549
Total consumer loans	46,245		46,098

Total loans	5,756,938		5,850,476

Unaccreted yield adjustments (1)	(11,309)		(21,055)

Total loans receivable, net of yield adjustments	$	5,745,629	$	5,829,421

___________________________

(1)At December 31, 2023 and June 30, 2023, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans.

Past Due Loans

Past due status is based on the contractual payment terms of the loans. The following tables present the payment status of past due loans as of December 31, 2023 and June 30, 2023, by loan segment:


	Payment Status December 31, 2023
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	9,357	$	—	$	10,625	$	19,982	$	2,631,292	$	2,651,274
Nonresidential mortgage	488		—		4,023		4,511		942,776		947,287
Commercial business	4,133		893		646		5,672		138,462		144,134
Construction	—		—		—		—		221,933		221,933
One- to four-family residential mortgage	2,554		1,331		4,022		7,907		1,738,158		1,746,065
Home equity loans	96		99		22		217		43,300		43,517
Other consumer	—		—		—		—		2,728		2,728
Total loans	$	16,628	$	2,323	$	19,338	$	38,289	$	5,718,649	$	5,756,938


	Payment Status June 30, 2023
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	2,958	$	—	$	10,756	$	13,714	$	2,748,061	$	2,761,775
Nonresidential mortgage	792		—		8,233		9,025		959,549		968,574
Commercial business	528		16		236		780		146,081		146,861
Construction	—		—		—		—		226,609		226,609
One- to four-family residential mortgage	2,019		1,202		3,731		6,952		1,693,607		1,700,559
Home equity loans	25		—		50		75		43,474		43,549
Other consumer	—		—		—		—		2,549		2,549
Total loans	$	6,322	$	1,218	$	23,006	$	30,546	$	5,819,930	$	5,850,476

Nonperforming Loans

Loans are generally placed on nonaccrual status when contractual payments become 90 or more days past due or when the Company does not expect to receive all principal and interest payments owed substantially in accordance with the terms of the loan agreement, regardless of past due status. Loans that become 90 days past due, but are well secured and in the process of collection, may remain on accrual status. Nonaccrual loans are generally returned to accrual status when all payments due are brought current and the Company expects to receive all remaining principal and interest payments owed substantially in accordance with the terms of the loan agreement. Payments received in cash on nonaccrual loans, including both the principal and interest portions of those payments, are generally applied to reduce the carrying value of the loan. The Company did not recognize interest income on non-accrual loans during the six months ended December 31, 2023 and 2022.

The following tables present information relating to the Company’s nonperforming loans as of December 31, 2023 and June 30, 2023:


	Performance Status December 31, 2023
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	—	$	1,939	$	14,049	$	15,988	$	2,635,286	$	2,651,274
Nonresidential mortgage	—		—		4,335		4,335		942,952		947,287
Commercial business	—		814		1		815		143,319		144,134
Construction	—		—		—		—		221,933		221,933
One- to four-family residential mortgage	—		385		6,519		6,904		1,739,161		1,746,065
Home equity loans	—		—		47		47		43,470		43,517
Other consumer	—		—		—		—		2,728		2,728
Total loans	$	—	$	3,138	$	24,951	$	28,089	$	5,728,849	$	5,756,938


	Performance Status June 30, 2023
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	—	$	5,686	$	13,428	$	19,114	$	2,742,661	$	2,761,775
Nonresidential mortgage	—		11,815		4,725		16,540		952,034		968,574
Commercial business	—		71		181		252		146,609		146,861
Construction	—		—		—		—		226,609		226,609
One- to four-family residential mortgage	—		1,640		5,031		6,671		1,693,888		1,700,559
Home equity loans	—		—		50		50		43,499		43,549
Other consumer	—		—		—		—		2,549		2,549
Total loans	$	—	$	19,212	$	23,415	$	42,627	$	5,807,849	$	5,850,476

Loan Modifications Made to Borrowers Experiencing Financial Difficulty

Effective July 1, 2023, the Company adopted ASU 2022-02, which eliminated the accounting for TDRs while expanding loan modification and vintage disclosure requirements. See Note 3 to the consolidated financial statements for further information.

The following tables presents the amortized cost basis at December 31, 2023 of loan modifications made to borrowers experiencing financial difficulty that were restructured during the three and six months ended December 31, 2023 by type of modification:


	Three Months Ended December 31, 2023
	Payment Delay		Term Extension		Total		Percent of Total Class
	(Dollars In Thousands)
Multi-family mortgage	$	2,774	$	—	$	2,774	0.10	%

One- to four-family residential mortgage	—		45		45		0.00	%
Home equity loans	—		25		25		0.06	%
Total	$	2,774	$	70	$	2,844	0.06	%


	Six Months Ended December 31, 2023
	Payment Delay		Term Extension		Total		Percent of Total Class
	(Dollars In Thousands)
Multi-family mortgage	$	2,774	$	—	$	2,774	0.10	%
Commercial business	45		—		45		0.03	%
One- to four-family residential mortgage	489		45		534		0.03	%
Home equity loans	—		25		25		0.06	%
Total	$	3,308	$	70	$	3,378	0.07	%

No modifications involved forgiveness of principal or interest rate reductions. There were no commitments to lend additional funds to borrowers experiencing financial difficulty whose terms have been restructured at December 31, 2023.

All loans to borrowers experiencing financial difficulty that have been modified during the three months ended December 31, 2023 were current to their contractual payments as of December 31, 2023. During the six months ended December 31, 2023 (since adoption of ASU 2022-02), one residential mortgage loan with a carrying value of $490,000 was modified and subsequently defaulted on payment. For restructured loans, a subsequent payment default is defined in terms of delinquency, when a principal or interest payment is 90 days past due or classified into non-accrual status during the reporting period.

Troubled Debt Restructured Loans prior to the adoption of ASU 2022-02

Prior to the adoption of ASU 2022-02, the Company classified certain loans as TDRs when credit terms to a borrower in financial difficulty were modified, in accordance with ASC 310-40. With the adoption of ASU 2022-02 the Company has ceased to recognize or measure for new TDRs, but those existing at June 30, 2023 will remain until settled.

At June 30, 2023 the Company had TDRs totaling $17.4 million. The allowance for credit losses associated with these TDRs totaled $274,000 as of June 30, 2023.

The following table presents total TDRs at June 30, 2023:


	June 30, 2023
	Accrual			Non-accrual			Total
	# of Loans	Amount		# of Loans	Amount		# of Loans	Amount
	(Dollars In Thousands)
Commercial loans:
Multi-family mortgage	—	$	—	2	$	5,400	2	$	5,400
Nonresidential mortgage	3	170		2	700		5	870
Commercial business	6	3,197		—	—		6	3,197
Construction	—	—		—	—		—	—
Total commercial loans	9	3,367		4	6,100		13	9,467

One- to four-family residential mortgage	39	6,752		4	774		43	7,526

Consumer loans:
Home equity loans	6	368		—	—		6	368
Total	54	$	10,487	8	$	6,874	62	$	17,361

As of December 31, 2023, there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a TDR.

The following table presents information regarding TDRs that occurred during the three and six months ended December 31, 2022:


	Three Months Ended December 31, 2022
		# of Loans	Pre- modification Recorded Investment		Post- modification Recorded Investment
		(Dollars In Thousands)


Commercial business		1	$	7	$	7
One- to four-family residential mortgage		1	273		270

Total		2	$	280	$	277


	Six Months Ended December 31, 2022
		# of Loans	Pre- modification Recorded Investment		Post- modification Recorded Investment
		(Dollars In Thousands)


Commercial business		1	$	7	$	7
One- to four-family residential mortgage		2	708		705
Home equity loans		1	35		35
Total		4	$	750	$	747

During the three and six months ended December 31, 2022, there were charge-offs of $5,000 and $15,000, respectively, related to TDRs. During the three and six months ended December 31, 2022, there were two TDR defaults totaling $170,000.

Loan modifications generally involve a reduction in interest rates and/or extension of maturity dates and also may include step up interest rates in their modified terms which will impact their weighted average yield in the future. The loans which qualified as TDRs during the three and six months ended December 31, 2022, capitalized prior past due amounts and modified the repayment terms.

Individually Analyzed Loans

Individually analyzed loans include loans which do not share similar risk characteristics with other loans. Loans previously modified as TDRs and loan modifications made to borrowers experiencing financial difficulty will generally be evaluated for individual impairment, however, after a period of sustained repayment performance which permits the credit to be returned to accrual status, the loans would generally be removed from individual impairment analysis and returned to its corresponding pool. As of December 31, 2023, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $28.1 million, of which $19.9 million were considered collateral dependent.

For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the allowance for credit losses is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.

The following table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated:


	December 31, 2023				June 30, 2023
	Carrying Value		Related Allowance		Carrying Value		Related Allowance
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	13,213	$	35	$	19,114	$	326
Nonresidential mortgage (1)	4,022		—		16,207		3,001


Total commercial loans	17,235		35		35,321		3,327

One- to four-family residential mortgage (2)	2,635		—		2,875		—

Consumer loans:
Home equity loans (2)	20		—		—		—

Total	$	19,890	$	35	$	38,196	$	3,327

___________________________

(1)Secured by income-producing nonresidential property.

(2)Secured by one- to four-family residential properties.

Credit Quality Indicators

The Company categorizes 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. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings:

Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses.

Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.

Loss – Loans which are considered uncollectible or of so little value that their continuance as assets is not warranted.

The following table presents the risk category of loans and current period gross charge-offs as of December 31, 2023 by loan segment and vintage year:


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	—	$	600,028	$	955,665	$	218,580	$	202,206	$	627,429	$	—	$	2,603,908
Special Mention	—		—		—		—		—		6,562		—		6,562
Substandard	—		—		—		9,681		—		31,123		—		40,804
Doubtful	—		—		—		—		—		—		—		—
Total multi-family mortgage	—		600,028		955,665		228,261		202,206		665,114		—		2,651,274
Multi-family current period gross charge-offs											354				354
Nonresidential mortgage:
Pass	23,888		107,076		207,213		90,901		51,173		439,953		100		920,304
Special Mention	—		—		—		—		—		11,271		—		11,271
Substandard	—		—		—		876		—		14,836		—		15,712
Doubtful	—		—		—		—		—		—		—		—
Total nonresidential mortgage	23,888		107,076		207,213		91,777		51,173		466,060		100		947,287
Nonresidential current period gross charge-offs											5,722				5,722
Commercial business:
Pass	4,323		9,548		26,708		20,230		6,832		8,748		58,601		134,990
Special Mention	—		—		1,428		—		—		1,798		—		3,226
Substandard	—		—		—		3,563		182		1,971		202		5,918
Doubtful	—		—		—		—		—		—		—		—
Total commercial business	4,323		9,548		28,136		23,793		7,014		12,517		58,803		144,134
Commercial current period gross charge-offs									336		11				347
Construction loans:
Pass	7,768		39,693		41,296		115,593		7,995		3,853		5,735		221,933
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total construction loans	7,768		39,693		41,296		115,593		7,995		3,853		5,735		221,933
Residential mortgage:
Pass	115,046		189,082		443,771		473,953		78,719		434,754		—		1,735,325
Special Mention	—		—		—		—		—		1,822		—		1,822
Substandard	—		—		532		—		—		8,386		—		8,918
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage	115,046		189,082		444,303		473,953		78,719		444,962		—		1,746,065
Residential current period gross charge-offs											37				37
Home equity loans:
Pass	907		6,226		2,369		389		1,119		8,645		23,502		43,157
Special Mention	—		—		—		—		—		—		99		99
Substandard	—		—		—		—		—		261		—		261
Doubtful	—		—		—		—		—		—		—		—
Total home equity loans	907		6,226		2,369		389		1,119		8,906		23,601		43,517
Other consumer loans
Pass	458		236		228		112		486		1,085		40		2,645
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		1		1
Doubtful	—		—		—		—		—		—		82		82
Other consumer loans	458		236		228		112		486		1,085		123		2,728
Total loans	$	152,390	$	951,889	$	1,679,210	$	933,878	$	348,712	$	1,602,497	$	88,362	$	5,756,938
Total current period gross charge-offs	$	—	$	—	$	—	$	—	$	336	$	6,124	$	—	$	6,460

The following table presents the risk category of loans as of June 30, 2023 by loan segment and vintage year:


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	603,260	$	954,554	$	213,482	$	198,969	$	226,929	$	510,485	$	—	$	2,707,679
Special Mention	—		—		—		—		6,006		6,647		—		12,653
Substandard	—		—		9,809		—		9,432		22,202		—		41,443
Doubtful	—		—		—		—		—		—		—		—
Total multi-family mortgage	603,260		954,554		223,291		198,969		242,367		539,334		—		2,761,775
Nonresidential mortgage:
Pass	109,725		220,443		83,032		51,933		59,197		414,742		6,000		945,072
Special Mention	—		—		—		—		—		378		—		378
Substandard	—		—		708		—		919		21,497		—		23,124
Doubtful	—		—		—		—		—		—		—		—
Total nonresidential mortgage	109,725		220,443		83,740		51,933		60,116		436,617		6,000		968,574
Commercial business:
Pass	10,364		28,644		25,304		7,875		1,731		8,776		59,031		141,725
Special Mention	—		—		—		47		176		2,456		371		3,050
Substandard	—		—		—		395		60		1,385		246		2,086
Doubtful	—		—		—		—		—		—		—		—
Total commercial business	10,364		28,644		25,304		8,317		1,967		12,617		59,648		146,861
Construction loans:
Pass	25,070		36,389		143,086		12,275		2,961		1,093		5,735		226,609
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total construction loans	25,070		36,389		143,086		12,275		2,961		1,093		5,735		226,609
Residential mortgage:
Pass	195,521		454,504		491,460		80,431		45,741		422,472		—		1,690,129
Special Mention	—		—		—		—		1,168		425		—		1,593
Substandard	—		542		—		—		80		8,215		—		8,837
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage	195,521		455,046		491,460		80,431		46,989		431,112		—		1,700,559
Home equity loans:
Pass	7,682		2,567		607		1,264		2,478		7,280		21,384		43,262
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		287		—		287
Doubtful	—		—		—		—		—		—		—		—
Total home equity loans	7,682		2,567		607		1,264		2,478		7,567		21,384		43,549
Other consumer loans
Pass	367		247		110		494		302		912		42		2,474
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		75		75
Other consumer loans	367		247		110		494		302		912		117		2,549
Total loans	$	951,989	$	1,697,890	$	967,598	$	353,683	$	357,180	$	1,429,252	$	92,884	$	5,850,476

Mortgage Loans in Foreclosure

The Company may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan or nonresidential real estate collateralizing a nonresidential mortgage loan via foreclosure or through an in-substance repossession. As of December 31, 2023, the Company held one nonresidential property with a carrying value of $12.0 million in other real estate owned that was acquired through foreclosure on a nonresidential mortgage loan. As of that same date, the Company held four commercial mortgage loans with aggregate carrying values totaling $8.1 million which were in the process of foreclosure. As of June 30, 2023, the Company held one nonresidential property with a carrying value of $13.0 million in other real estate owned that was acquired through foreclosure on a nonresidential mortgage loan. As of that same date, the Company held three residential mortgage loans with aggregate carrying values totaling $950,000 and six commercial mortgage loans with aggregate carrying values totaling $9.2 million which were in the process of foreclosure.