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LOANS RECEIVABLE | 6 Months Ended
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Jun. 30, 2023
Receivables [Abstract] |
LOANS RECEIVABLE | LOANS RECEIVABLE The Company adopted ASU 2016-13 on January 1, 2023. All disclosures as of June 30, 2023 are presented in accordance with ASU 2016-13. The Company did not reclassify comparative financial periods and has presented those disclosures under previously-applied U.S. GAAP. A summary of loans receivable, net at June 30, 2023 and December 31, 2022, follows:
| June 30, 2023 |  |
| (In thousands)
Residential one-to-four family | $ | 580,396 |  |  |
Multifamily | 696,956 |  |  |
Non-residential | 237,247 |  |  |
Construction | 36,032 |  |  |
Junior liens | 21,338 |  |  |
Commercial and industrial | 9,743 |  |  |
Consumer and other | 33 |  |  |
Total loans | 1,581,745 |  |  |
Allowance for credit losses on loans (1) | (14,413) |  |  |
Loans receivable, net | $ | 1,567,332 |  |  |
|  |  | December 31, 2022
|  |  | (In thousands)
Residential one-to-four family |  |  | $ | 594,521 |
Multifamily |  |  | 690,278 |
Non-residential |  |  | 216,394 |
Construction |  |  | 17,990 |
Junior liens |  |  | 18,477 |
Commercial and industrial |  |  | 4,682 |
Consumer and other |  |  | 38 |
Total gross loans |  |  | 1,542,380 |
Deferred fees, costs and premiums and discounts, net |  |  | 2,747 |
Total loans |  |  | 1,545,127 |
Allowance for loan losses |  |  | (13,400) |
Loans receivable, net |  |  | $ | 1,531,727 |
(1) For more information, see Footnote 4 - Allowance for Credit Losses. Loans are recorded at amortized cost, which includes principal balance, net deferred fees or costs, premiums and discounts. The Company elected to exclude accrued interest receivable from amortized cost. Accrued interest receivable is reported separately in the consolidated balance sheets and totaled $5.8 million and $5.3 million at June 30, 2023 and December 31, 2022, respectively. Loan origination fees and certain direct loan origination costs are deferred and the net fee or cost is recognized in interest income as an adjustment of yield. At June 30, 2023, net deferred loan fees are included in loans by respective segment and totaled $2.3 million. The Company had $2.5 million of loans held-for-sale at June 30, 2023 and no loans held-for-sale at December 31, 2022. Loans held-for-sale are carried at the lower of aggregate cost or estimated fair value. Gains and losses on sales of loans are specifically identified and accounted for in accordance with U.S. GAAP. The portfolio classes in the above table have unique risk characteristics with respect to credit quality: •Payment on multifamily and non-residential mortgages is driven principally by operating results of the managed properties or underlying business and secondarily by the sale or refinance of such properties. Both primary and secondary sources of repayment and the value of the properties in liquidation, may be affected to a greater extent by adverse conditions in the real estate market or the economy in general. •Properties underlying construction loans often do not generate sufficient cash flows to service debt and thus repayment is subject to the ability of the borrower and, if applicable, guarantors, to complete development or construction of the property and carry the project, often for extended periods of time. As a result, the performance of these loans is contingent upon future events whose probability at the time of origination is uncertain. •Commercial and industrial (“C&I”) loans include C&I revolving lines of credit, term loans, SBA 7a loans and to a lesser extent, Paycheck Protection Program (“PPP”) loans. Payments on C&I loans are driven principally by the cash flows of the businesses and secondarily by the sale or refinance of any collateral securing the loans. Both the cash flow and value of the collateral in liquidation may be affected by adverse general economic conditions. •The ability of borrowers to service debt in the residential one-to-four family, junior liens and consumer loan portfolios is generally subject to personal income which may be impacted by general economic conditions, such as increased unemployment levels. These loans are predominately collateralized by first and second liens on single family properties. If a borrower cannot maintain the loan, the Company’s ability to recover against the collateral in sufficient amount and in a timely manner may be significantly influenced by market, legal and regulatory conditions. Credit Quality Indicators The Company categorizes loans into risk categories based on relevant information about the quality and realizable value of collateral, if any, and the ability of borrowers to service their debts such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans by credit risk. This analysis is performed whenever a credit is extended, renewed, or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans. The Company used the following definitions for risk ratings for loan classification: Pass – Loans classified as pass are loans performing under the original contractual terms, do not currently pose any identified risk and can range from the highest to pass/watch quality, depending on the degree of potential risk. 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 the Company’s credit position at some future date. Substandard – Loans classified as substandard are inadequately protected by the current sound worth and paying capacity of the obligor, or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the repayment and liquidation of the debt. They are characterized by a 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 classified as Substandard, with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently known facts, conditions, and values, highly questionable and improbable. Loss – Assets classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off the asset even though partial recovery may be effected in the future. The following table presents the risk category of loans by class of loan and vintage based on the analysis performed as of June 30, 2023:
|  | Term Loans by Origination Year |  |  |  |  |  |
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Pre-2019 |  | Revolving Loans |  |  |  | Total
Residential one-to-four family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | $ | 10,036 |  |  | $ | 100,456 |  |  | $ | 119,000 |  |  | $ | 15,343 |  |  | $ | 19,279 |  |  | $ | 308,798 |  |  | $ | — |  |  |  |  | $ | 572,912 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 7,484 |  |  | — |  |  |  |  | 7,484 |
Total |  | 10,036 |  |  | 100,456 |  |  | 119,000 |  |  | 15,343 |  |  | 19,279 |  |  | 316,282 |  |  | — |  |  |  |  | 580,396 |
Multifamily |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 17,240 |  |  | 282,553 |  |  | 161,025 |  |  | 35,832 |  |  | 59,947 |  |  | 139,869 |  |  | — |  |  |  |  | 696,466 |
Special mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 330 |  |  | — |  |  |  |  | 330 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 160 |  |  | — |  |  |  |  | 160 |
Total |  | 17,240 |  |  | 282,553 |  |  | 161,025 |  |  | 35,832 |  |  | 59,947 |  |  | 140,359 |  |  | — |  |  |  |  | 696,956 |
Non-residential |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 25,820 |  |  | 120,496 |  |  | 14,929 |  |  | 15,310 |  |  | 5,481 |  |  | 54,175 |  |  | — |  |  |  |  | 236,211 |
Special mention |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,036 |  |  | — |  |  |  |  | 1,036 |
Total |  | 25,820 |  |  | 120,496 |  |  | 14,929 |  |  | 15,310 |  |  | 5,481 |  |  | 55,211 |  |  | — |  |  |  |  | 237,247 |
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 8,291 |  |  | 13,972 |  |  | 13,654 |  |  | — |  |  | — |  |  | 115 |  |  | — |  |  |  |  | 36,032 |
Total |  | 8,291 |  |  | 13,972 |  |  | 13,654 |  |  | — |  |  | — |  |  | 115 |  |  | — |  |  |  |  | 36,032 |
Junior liens |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 3,311 |  |  | 5,421 |  |  | 1,525 |  |  | 363 |  |  | 1,871 |  |  | 8,796 |  |  | — |  |  |  |  | 21,287 |
Substandard |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 51 |  |  | — |  |  |  |  | 51 |
Total |  | 3,311 |  |  | 5,421 |  |  | 1,525 |  |  | 363 |  |  | 1,871 |  |  | 8,847 |  |  | — |  |  |  |  | 21,338 |
Commercial and industrial |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 6,289 |  |  | 110 |  |  | 3,109 |  |  | 170 |  |  | — |  |  | — |  |  | — |  |  |  |  | 9,678 |
Substandard (1) |  | — |  |  | — |  |  | 65 |  |  | — |  |  | — |  |  | — |  |  | — |  |  |  |  | 65 |
Total |  | 6,289 |  |  | 110 |  |  | 3,174 |  |  | 170 |  |  | — |  |  | — |  |  | — |  |  |  |  | 9,743 |
Consumer and other |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  |  |  | 33 |
Total |  | 18 |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 15 |  |  |  |  | 33 |
Total gross loans |  | $ | 71,005 |  |  | $ | 523,008 |  |  | $ | 313,307 |  |  | $ | 67,018 |  |  | $ | 86,578 |  |  | $ | 520,814 |  |  | $ | 15 |  |  |  |  | $ | 1,581,745 |
(1) Balance represents PPP loans which carry the federal guarantee of the SBA. The following table presents the risk category of loans by class of loans based on the analysis performed as of December 31, 2022:
|  | Pass |  | Special Mention |  | Substandard |  | Doubtful / Loss |  | Total
|  | (In thousands)
Residential one-to-four family |  | $ | 589,137 |  |  | $ | 247 |  |  | $ | 7,870 |  |  | $ | — |  |  | $ | 597,254 |
Multifamily |  | 689,277 |  |  | 897 |  |  | 516 |  |  | — |  |  | 690,690 |
Non-residential |  | 214,981 |  |  | 1,080 |  |  | — |  |  | — |  |  | 216,061 |
Construction |  | 17,799 |  |  | — |  |  | — |  |  | — |  |  | 17,799 |
Junior liens |  | 18,579 |  |  | — |  |  | 52 |  |  | — |  |  | 18,631 |
Commercial and Industrial |  | 4,653 |  |  | — |  |  | — |  |  | — |  |  | 4,653 |
Consumer and other |  | 8 |  |  | — |  |  | 31 |  |  | — |  |  | 39 |
Total |  | $ | 1,534,434 |  |  | $ | 2,224 |  |  | $ | 8,469 |  |  | $ | — |  |  | $ | 1,545,127 |
Past Due and Non-accrual Loans The following table presents the recorded investment in past due and current loans by loan portfolio class as of June 30, 2023 and December 31, 2022:
|  | 30-59 Days Past Due |  | 60-89 Days Past Due |  | 90 Days and Greater Past Due |  | Total Past Due |  | Current |  | Total Loans Receivable
|  | (In thousands)
June 30, 2023 |  |  |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | $ | — |  |  | $ | 330 |  |  | $ | 6,318 |  |  | $ | 6,648 |  |  | $ | 573,748 |  |  | $ | 580,396 |
Multifamily |  | — |  |  | — |  |  | — |  |  | — |  |  | 696,956 |  |  | 696,956 |
Non-residential |  | — |  |  | — |  |  | — |  |  | — |  |  | 237,247 |  |  | 237,247 |
Construction |  | — |  |  | — |  |  | — |  |  | — |  |  | 36,032 |  |  | 36,032 |
Junior liens |  | — |  |  | — |  |  | 51 |  |  | 51 |  |  | 21,287 |  |  | 21,338 |
Commercial and Industrial |  | — |  |  | — |  |  | 65 |  |  | 65 |  |  | 9,678 |  |  | 9,743 |
Consumer and other |  | — |  |  | — |  |  | — |  |  | — |  |  | 33 |  |  | 33 |
Total |  | $ | — |  |  | $ | 330 |  |  | $ | 6,434 |  |  | $ | 6,764 |  |  | $ | 1,574,981 |  |  | $ | 1,581,745 |
December 31, 2022 |  |  |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | $ | — |  |  | $ | 845 |  |  | $ | 6,738 |  |  | $ | 7,583 |  |  | $ | 589,671 |  |  | $ | 597,254 |
Multifamily |  | — |  |  | — |  |  | 182 |  |  | 182 |  |  | 690,508 |  |  | 690,690 |
Non-residential |  | — |  |  | — |  |  | — |  |  | — |  |  | 216,061 |  |  | 216,061 |
Construction |  | — |  |  | — |  |  | — |  |  | — |  |  | 17,799 |  |  | 17,799 |
Junior liens |  | — |  |  | — |  |  | 52 |  |  | 52 |  |  | 18,579 |  |  | 18,631 |
Commercial and Industrial |  | — |  |  | — |  |  | 96 |  |  | 96 |  |  | 4,557 |  |  | 4,653 |
Consumer and other |  | — |  |  | — |  |  | — |  |  | — |  |  | 39 |  |  | 39 |
Total |  | $ | — |  |  | $ | 845 |  |  | $ | 7,068 |  |  | $ | 7,913 |  |  | $ | 1,537,214 |  |  | $ | 1,545,127 |
The following table presents information on non-accrual loans at June 30, 2023:
|  | Non-accrual |  | Interest Income Recognized on Non-accrual Loans |  | Amortized Cost Basis of Loans >= 90 Day Past Due and Still Accruing |  | Amortized Cost Basis of Non-accrual Loans Without Related Allowance
|  | (In thousands)
Residential one-to-four family |  | $ | 7,460 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,460 |
Multifamily |  | 160 |  |  | — |  |  | — |  |  | 160 |
Commercial and industrial |  | 65 |  |  | — |  |  | — |  |  | 65 |
Junior liens |  | 51 |  |  | — |  |  | — |  |  | 51 |
Total |  | $ | 7,736 |  |  | $ | — |  |  | $ | — |  |  | $ | 7,736 |
The following table presents the recorded investment in non-accrual loans at December 31, 2022:
|  |  |  | Non-accrual |  |  |  | Loans Past Due 90 Days and Still Accruing
|  |  |  | (In thousands)
Residential one-to-four family |  |  |  | $ | 7,498 |  |  |  |  | $ | — |
Multifamily |  |  |  | 182 |  |  |  |  | — |
Commercial and industrial (1) |  |  |  | 35 |  |  |  |  | 61 |
Junior liens |  |  |  | 52 |  |  |  |  | — |
Total |  |  |  | $ | 7,767 |  |  |  |  | $ | 61 |
(1) Loans 90 days past due and accruing were comprised of PPP loans which carry the federal guarantee of the SBA. Impaired Loans The following table presents, under previously applicable U.S. GAAP, information related to impaired loans by class of loans at and as of June 30, 2022 and at December 31, 2022:
|  | June 30, 2022 |  | Six Months Ended June 30, 2022
|  | Unpaid Principal Balance |  | Recorded Investment |  | Allowance for Loan Losses Allocated |  | Average Recorded Investment |  | Interest Income Recognized |  | Cash Basis Interest Recognized
|  | (In thousands)
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | $ | 7,771 |  |  | $ | 8,054 |  |  | $ | — |  |  | $ | 8,686 |  |  | $ | 61 |  |  | $ | 58 |
Multifamily |  | 659 |  |  | 659 |  |  | — |  |  | 671 |  |  | 13 |  |  | 10 |
Non-residential |  | 3,755 |  |  | 3,595 |  |  | — |  |  | 4,275 |  |  | 105 |  |  | 95 |
Junior liens |  | 54 |  |  | 54 |  |  | — |  |  | 55 |  |  | 1 |  |  | 1 |
|  | 12,239 |  |  | 12,362 |  |  | — |  |  | 13,687 |  |  | 180 |  |  | 164 |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | 1,122 |  |  | 1,125 |  |  | 30 |  |  | 743 |  |  | 23 |  |  | 20 |
|  | 1,122 |  |  | 1,125 |  |  | 30 |  |  | 743 |  |  | 23 |  |  | 20 |
Total |  | $ | 13,361 |  |  | $ | 13,487 |  |  | $ | 30 |  |  | $ | 14,430 |  |  | $ | 203 |  |  | $ | 184 |
|  | December 31, 2022 |  |
|  | Unpaid Principal Balance |  | Recorded Investment |  | Allowance for Loan Losses Allocated |  |  |  |  |  |
|  | (In thousands)
With no related allowance recorded: |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | $ | 7,368 |  |  | $ | 7,669 |  |  | $ | — |  |  |  |  |  |  |
Multifamily |  | 516 |  |  | 516 |  |  | — |  |  |  |  |  |  |
Non-residential |  | 2,834 |  |  | 2,671 |  |  | — |  |  |  |  |  |  |
Junior liens |  | 52 |  |  | 52 |  |  | — |  |  |  |  |  |  |
|  | 10,770 |  |  | 10,908 |  |  | — |  |  |  |  |  |  |
With an allowance recorded: |  |  |  |  |  |  |  |  |  |  |  |
Residential one-to-four family |  | 743 |  |  | 749 |  |  | 27 |  |  |  |  |  |  |
|  | 743 |  |  | 749 |  |  | 27 |  |  |  |  |  |  |
Total |  | $ | 11,513 |  |  | $ | 11,657 |  |  | $ | 27 |  |  |  |  |  |  |
The recorded investment in loans includes deferred fees, costs and discounts. For purposes of this disclosure, the unpaid principal balance would not be reduced for partial charge-offs. The Company adopted ASU 2022-02 on January 1, 2023. Loans may be modified for borrowers experiencing financial difficulty and may include a reduction in interest rate, an extension in term, principal forgiveness and/or other than insignificant payment delay. At June 30, 2023, there were two loans that met the definition of a modification to a borrower experiencing financial difficulty in accordance with ASU 2022-02. The residential one-to four family loans total $1.1 million, one granted an interest rate reduction and the second, a term extension. The Company did not reclassify comparative financial periods and has presented those disclosures under previously-applied U.S. GAAP. Prior to the adoption of ASU 2022-02, The Company classified certain loans as troubled debt restructuring (“TDR”) loans when credit terms to a borrower in financial difficulty were modified in accordance with ASC 310-40. The Company has ceased to recognize or measure for new TDRs but those existing at December 31, 2022 remain until settled. The total recorded investment of loans whose terms were modified in TDRs was $5.4 million as of December 31, 2022. The Company allocated $68 thousand of specific reserves to TDR loans as of December 31, 2022. The modification of the terms of TDR loans may have included one or a combination of the following: a reduction of the stated interest rate of the loan, short-term deferral of payment, or an extension of the maturity date. A TDR loan was considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no TDRs for which there was a payment default within twelve months following the modification during the period ended June 30, 2022. There were no TDRs during the three and six months ended June 30, 2022. The Company implemented modification programs to provide its borrowers relief from the economic impacts of COVID-19. In accordance with the CARES Act, the Company elected to not apply TDR classification to COVID-19 related loan modifications. Accordingly, these modifications are exempt from TDR classification under U.S. GAAP and were not classified as TDRs. At December 31, 2022, there were no deferrals related to the CARES Act. The Company had $4.3 million and $4.5 million in consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings are in process at June 30, 2023 and December 31, 2022, respectively.

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