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Loans Receivable and Allowance for Credit Losses (Tables)

9 Months Ended

Sep. 30, 2023

Loans receivable at September 30, 2023 and December 31, 2022 are summarized as follows:


	September 30,			December 31,
	2023			2022
	(in thousands)
Mortgage loans:
1-4 Family residential
Investor-Owned	$	347,082		$	343,968
Owner-Occupied		151,866			134,878
Multifamily residential		553,694			494,667
Nonresidential properties		321,472			308,043
Construction and land		411,383			185,018
Total mortgage loans		1,785,497			1,466,574
Nonmortgage loans:
Business loans (1)		18,416			39,965
Consumer loans (2)		10,416			19,129
Total non-mortgage loans		28,832			59,094
Total loans, gross		1,814,329			1,525,668
Net deferred loan origination costs		692			2,051
Allowance for Credit Losses		(27,414	)		(34,592	)
Loans receivable, net	$	1,787,607		$	1,493,127

(1)

As of September 30, 2023 and December 31, 2022, business loans include $1.1 million and $20.0 million, respectively, of SBA Paycheck Protection Program (“PPP”) loans.

(2)

As of September 30, 2023 and December 31, 2022, consumer loans include $9.3 million and $18.2 million, respectively, of microloans originated by Grain through its mobile application that is geared to the underbanked and new generations entering the financial services market and uses non-traditional underwriting methodologies.

Schedule of Credit Risk Ratings by Loan Segment

The following tables present credit risk ratings by loan segment as of September 30, 2023 and December 31, 2022:


	September 30, 2023
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
	(in thousands)
Risk Rating:
Pass	$	488,062	$	553,694	$	318,829	$	404,726	$	18,207	$	10,416	$	1,793,934
Special mention		3,129		—		2,544		—		—		—		5,673
Substandard		7,757		—		99		6,657		209		—		14,722
Total	$	498,948	$	553,694	$	321,472	$	411,383	$	18,416	$	10,416	$	1,814,329


	December 31, 2022
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
	(in thousands)
Risk Rating:
Pass	$	462,126	$	492,556	$	307,307	$	173,351	$	39,965	$	19,129	$	1,494,434
Special mention		7,692		1,437		606		—		—		—		9,735
Substandard		9,028		674		130		11,667		—		—		21,499
Total	$	478,846	$	494,667	$	308,043	$	185,018	$	39,965	$	19,129	$	1,525,668

Schedule of Aging Analysis of Loans

An aging analysis of loans, as of September 30, 2023 and December 31, 2022, is as follows:


	September 30, 2023
			30-59		60-89		90 Days						90 Days
			Days		Days		or More				Nonaccrual		or More
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
	(in thousands)
Mortgage loans:
1-4 Family residential
Investor-Owned	$	346,686	$	—	$	—	$	396	$	347,082	$	396	$	—
Owner-Occupied		149,732		—		—		2,134		151,866		2,134		—
Multifamily residential		553,694		—		—		—		553,694		—		—
Nonresidential properties		320,936		—		536		—		321,472		—		—
Construction and land		404,726		—		—		6,657		411,383		6,657		—
Nonmortgage loans:
Business		18,159		48		—		209		18,416		209		—
Consumer		9,969		86		361		—		10,416		—		—
Total	$	1,803,902	$	134	$	897	$	9,396	$	1,814,329	$	9,396	$	—


	December 31, 2022
			30-59		60-89		90 Days						90 Days
			Days		Days		or More				Nonaccrual		or More
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
	(in thousands)
Mortgage loans:
1-4 Family residential
Investor-Owned	$	340,495	$	1,530	$	78	$	1,865	$	343,968	$	3,061	$	—
Owner-Occupied		131,510		2,553		—		815		134,878		2,987		—
Multifamily residential		490,024		4,643		—		—		494,667		—		—
Nonresidential properties		303,190		4,246		607		—		308,043		93		—
Construction and land		173,351		—		4,100		7,567		185,018		7,567		—
Nonmortgage loans:
Business		27,657		1,466		7,869		2,973		39,965		—		2,973
Consumer		16,743		1,267		1,119		—		19,129		—		—
Total	$	1,482,970	$	15,705	$	13,773	$	13,220	$	1,525,668	$	13,708	$	2,973

Schedule of Composition of Allowance for Loan Losses and Related Recorded Investment

The following schedules detail the composition of the allowance for credit losses on loans and the related recorded investment in loans as of and for the three and nine months ended September 30, 2023 and 2022, and as of and for the year ended December 31, 2022:



	For the Nine Months Ended September 30, 2023
	Mortgage Loans															Nonmortgage Loans					Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily			Nonresidential			Construction and Land			Business		Consumer			For the Period
	(in thousands)
Allowance for Credit Losses:
Balance, beginning of period	$	3,863		$	1,723		$	8,021		$	2,724		$	2,683		$	120	$	15,458		$	34,592
Provision (benefit) charged to expense		33			257			653			(20	)		2,276			193		(2,029	)		1,363
Impact of CECL adoption		766			146			(3,962	)		578			(911	)		236		57			(3,090	)
Charge-offs		—			—			—			—			—			—		(6,092	)		(6,092	)
Recoveries		—			—			—			—			—			3		638			641
Balance, end of period	$	4,662		$	2,126		$	4,712		$	3,282		$	4,048		$	552	$	8,032		$	27,414
Ending balance: individually evaluated for impairment	$	—		$	71		$	—		$	—		$	—		$	204	$	—		$	275
Ending balance: collectively evaluated for impairment		4,662			2,055			4,712			3,282			4,048			348		8,032			27,139
Total	$	4,662		$	2,126		$	4,712		$	3,282		$	4,048		$	552	$	8,032		$	27,414
Loans:
Ending balance: individually evaluated for impairment	$	396		$	2,134		$	—		$	—		$	6,657		$	209	$	—		$	9,396
Ending balance: collectively evaluated for impairment		346,686			149,732			553,694			321,472			404,726			18,207		10,416			1,804,933
Total	$	347,082		$	151,866		$	553,694		$	321,472		$	411,383		$	18,416	$	10,416		$	1,814,329

	For the Three Months Ended September 30, 2023
	Mortgage Loans															Nonmortgage Loans					Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily			Nonresidential			Construction and Land			Business		Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	4,776		$	2,152		$	4,738		$	3,238		$	3,189		$	450	$	9,630		$	28,173
Provision (benefit) charged to expense		(114	)		(26	)		(26	)		44			859			102		(89	)		750
Losses charged-off		—			—			—			—			—			—		(1,592	)		(1,592	)
Recoveries		—			—			—			—			—			3		80			83
Balance, end of period	$	4,662		$	2,126		$	4,712		$	3,282		$	4,048		$	552	$	8,032		$	27,414


	For the Nine Months Ended September 30, 2022
	Mortgage Loans											Nonmortgage Loans						Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied		Multifamily		Nonresidential			Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	3,540	$	1,178	$	5,684	$	2,165		$	2,024	$	306		$	1,455		$	16,352
Provision (benefit) charged to expense		25		214		1,064		296			802		(235	)		9,239			11,405
Charge-offs		—		—		—		—			—		—			(3,000	)		(3,000	)
Recoveries		156		39		—		—			—		94			62			351
Balance, end of period	$	3,721	$	1,431	$	6,748	$	2,461		$	2,826	$	165		$	7,756		$	25,108
Ending balance: individually evaluated for impairment	$	69	$	99	$	—	$	37		$	—	$	—		$	—		$	205
Ending balance: collectively evaluated for impairment		3,652		1,332		6,748		2,424			2,826		165			7,756			24,903
Total	$	3,721	$	1,431	$	6,748	$	2,461		$	2,826	$	165		$	7,756		$	25,108
Loans:
Ending balance: individually evaluated for impairment	$	8,352	$	4,440	$	—	$	1,587		$	10,660	$	359		$	—		$	25,398
Ending balance: collectively evaluated for impairment		328,315		108,309		421,917		281,055			186,777		41,039			22,563			1,389,975

Total	$	336,667	$	112,749	$	421,917	$	282,642		$	197,437	$	41,398		$	22,563		$	1,415,373

	For the Three Months Ended September 30, 2022
	Mortgage Loans											Nonmortgage Loans						Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied		Multifamily		Nonresidential			Construction and Land		Business			Consumer			Total
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	3,607	$	1,233	$	6,374	$	2,493		$	2,262	$	103		$	1,463		$	17,535
Provision (benefit) charged to expense		114		159		374		(32	)		564		61			8,090			9,330
Losses charged-off		—		—		—		—			—		—			(1,799	)		(1,799	)
Recoveries		—		39		—		—			—		1			2			42
Balance, end of period	$	3,721	$	1,431	$	6,748	$	2,461		$	2,826	$	165		$	7,756		$	25,108


	For the Year Ended December 31, 2022
	Mortgage Loans										Nonmortgage Loans						Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied		Multifamily		Nonresidential		Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of year	$	3,540	$	1,178	$	5,684	$	2,165	$	2,024	$	306		$	1,455		$	16,352
Provision (benefit) charged to expense		167		506		2,337		559		659		(280	)		20,098			24,046
Charge-offs		—		—		—		—		—		—			(6,660	)		(6,660	)
Recoveries		156		39		—		—		—		94			565			854
Balance, end of year	$	3,863	$	1,723	$	8,021	$	2,724	$	2,683	$	120		$	15,458		$	34,592
Ending balance: individually evaluated for impairment	$	63	$	96	$	—	$	37	$	—	$	—		$	—		$	196
Ending balance: collectively evaluated for impairment		3,800		1,627		8,021		2,687		2,683		120			15,458			34,396
Total	$	3,863	$	1,723	$	8,021	$	2,724	$	2,683	$	120		$	15,458		$	34,592
Loans:
Ending balance: individually evaluated for impairment	$	5,269	$	4,315	$	—	$	801	$	7,567	$	—		$	—		$	17,952
Ending balance: collectively evaluated for impairment		338,699		130,563		494,667		307,242		177,451		39,965			19,129			1,507,716
Total	$	343,968	$	134,878	$	494,667	$	308,043	$	185,018	$	39,965		$	19,129		$	1,525,668

Schedule of Information Relates to Impaired Loans

The following information relates to impaired loans as of and for the nine months ended September 30, 2023 and 2022 and as of and for the year ended December 31, 2022:


	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
As of and For the Nine Months Ended September 30, 2023	Balance		Allowance		Allowance		Investment		Allowance		Investment		on a Cash Basis
	(in thousands)
Mortgage loans:
1-4 Family residential	$	2,517	$	2,081	$	449	$	2,530	$	71	$	6,478	$	40
Multifamily residential		—		—		—		—		—		958		—
Nonresidential properties		—		—		—		—		—		531		—
Construction and land		6,650		6,657		—		6,657		—		8,438		—
Nonmortgage loans:
Business		209		—		209		209		204		83		—
Consumer		—				—		—		—		—		—
Total	$	9,376	$	8,738	$	658	$	9,396	$	275	$	16,488	$	40

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
As of and For the Nine Months Ended September 30, 2022	Balance		Allowance		Allowance		Investment		Allowance		Investment		on a Cash Basis
	(in thousands)
Mortgage loans:
1-4 Family residential	$	13,100	$	11,015	$	1,777	$	12,792	$	168	$	11,440	$	164
Multifamily residential		—		—		—		—		—		789		—
Nonresidential properties		1,630		1,239		348		1,587		37		2,268		38
Construction and land		10,660		10,660		—		10,660		—		5,147		16
Nonmortgage loans:
Business		359		359		—		359		—		93		—
Consumer		—		—		—		—		—		24		—
Total	$	25,749	$	23,273	$	2,125	$	25,398	$	205	$	19,761	$	218


	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
As of and for the Year Ended December 31, 2022	Balance		Allowance		Allowance		Investment		Allowance		Investment		on a Cash Basis
	(in thousands)
Mortgage loans:
1-4 Family residential	$	9,986	$	7,827	$	1,757	$	9,584	$	159	$	11,072	$	307
Multifamily residential		—		—		—		—		—		630		—
Nonresidential properties		843		457		344		801		37		1,930		30
Construction and land		7,567		7,567		—		7,567		—		6,408		—
Nonmortgage loans:
Business		—		—		—		—		—		3		—
Consumer		—		—		—		—		—		—		—
Total	$	18,396	$	15,851	$	2,101	$	17,952	$	196	$	20,043	$	337

Schedule of Total Exposure


Grain Technology, Inc. ("Grain") Total Exposure as of September 30, 2023
(in thousands)
Receivable from Grain
Microloans originated - put back to Grain (inception-to-September 30, 2023)	$	24,255
Write-downs, net of recoveries (inception-to-date as of September 30, 2023)		(15,610	)
Cash receipts from Grain (inception-to-September 30, 2023)		(6,819	)
Grant/reserve (inception-to-September 30, 2023)		(1,826	)
Net receivable as of September 30, 2023	$	—
Microloan receivables from Grain borrowers
Grain originated loans receivable as of September 30, 2023	$	9,318
Allowance for credit losses as of September 30, 2023 (1)		(8,163	)
Microloans, net of allowance for credit losses as of September 30, 2023	$	1,155
Investments
Investment in Grain	$	1,000
Investment in Grain write-off		(1,000	)
Investment in Grain as of September 30, 2023	$	—
Total exposure to Grain as of September 30, 2023	$	1,155

(1) Includes $0.3 million for allowance for unused commitments on the $2.4 million of unused commitments available to Grain borrowers reported in other liabilities in the accompanying Consolidated Statements of Financial Conditions. Excludes $1.6 million of security deposits by Grain originated borrowers reported in deposits in the accompanying Consolidated Statements of Financial Conditions.

Summary of Allowance for Off-Balance-Sheet Credit Losses

The following table presents the activity in the allowance for off-balance-sheet credit losses:


	September 30,		December 31,
	2023		2022
Balance at beginning of period	$	354	$	229
Impact on CECL adoption		948		—
Provision		1,893		125
Allowance for credit losses	$	3,195	$	354