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ALLOWANCE FOR CREDIT LOSSES | 6 Months Ended
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Jun. 30, 2023
Credit Loss [Abstract] |
ALLOWANCE FOR CREDIT LOSSES | ALLOWANCE FOR CREDIT LOSSES On January 1, 2023, the Company adopted ASU 2016-13, which requires the measurement of expected credit losses for financial assets measured at amortized cost, including loans, held-to-maturity securities and certain off-balance-sheet credit exposures and ASU 2022-02, which eliminates the recognition and measurement guidance of TDRs, so that creditors will apply the same guidance to all modifications when determining whether a modification results in a new receivable or continuation of an existing receivable. See Note 1 - Summary of Significant Accounting Policies for a description of the adoption of ASU 2016-13 and the Company’s allowance methodology. Under ASU 2016-13, the Company’s methodology for determining the allowance for credit losses on loans is based upon key assumptions, including the lookback period, historical loss experience, economic forecasts over a reasonable and supportable forecast period, reversion period, prepayments and qualitative adjustments. The allowance is measured on a pool basis when similar risk characteristics exist. Loans that do not share common risk characteristics are evaluated on an individual basis and are excluded from the collective evaluation. Allowance for Credit Losses - Loans The allowance for credit losses on loans is summarized in the following table:
|  | For the Three Months Ended June 30, |  | For the Six Months Ended June 30,
|  | 2023 |  | 2022 |  | 2023 |  | 2022
|  | (In thousands)
Balance at beginning of period |  | $ | 14,153 |  |  | $ | 13,465 |  |  | $ | 13,400 |  |  | $ | 14,425 |
Impact of adopting ASU 2016-13 and ASU 2022-02 |  | — |  |  | — |  |  | 668 |  |  | — |
Charge-offs |  | (13) |  |  | (9) |  |  | (18) |  |  | (19) |
Recoveries |  | — |  |  | — |  |  | 1 |  |  | 2 |
Net charge-offs |  | (13) |  |  | (9) |  |  | (17) |  |  | (17) |
Provision for (recovery of) credit loss on loans |  | 273 |  |  | 594 |  |  | 362 |  |  | (358) |
Balance at end of period |  | $ | 14,413 |  |  | $ | 14,050 |  |  | $ | 14,413 |  |  | $ | 14,050 |
The following tables presents the activity in the Company’s allowance for credit losses by class of loans based on the analysis performed for the three months ended June 30, 2023 and 2022:
|  | Balance at March 31, 2023 |  |  |  | Charge-offs (1) |  | Recoveries |  | (Recovery of) Provision for Credit Loss - Loans |  | Balance at June 30, 2023
|  | (In thousands)
Residential one-to-four family |  | $ | 2,056 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (62) |  |  | $ | 1,994 |
Multifamily |  | 7,191 |  |  |  |  | — |  |  | — |  |  | (174) |  |  | 7,017 |
Non-residential |  | 3,570 |  |  |  |  | — |  |  | — |  |  | 243 |  |  | 3,813 |
Construction |  | 1,190 |  |  |  |  | — |  |  | — |  |  | 238 |  |  | 1,428 |
Commercial and industrial |  | 100 |  |  |  |  | — |  |  | — |  |  | 11 |  |  | 111 |
Junior liens |  | 46 |  |  |  |  | — |  |  | — |  |  | 4 |  |  | 50 |
Consumer and other (1) |  | — |  |  |  |  | (13) |  |  | — |  |  | 13 |  |  | — |
Total |  | $ | 14,153 |  |  |  |  | $ | (13) |  |  | $ | — |  |  | $ | 273 |  |  | $ | 14,413 |
(1) Charge-offs relate to overdrafts, which were originated in 2023 as it is our policy to charge these off within 60 days of occurrence.
|  | Balance at March 31, 2022 |  |  |  | Charge-offs |  | Recoveries |  | (Recovery of) Provision for Loan Loss |  | Balance at June 30, 2022
|  | (In thousands)
Residential one-to-four family |  | $ | 2,610 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (28) |  |  | $ | 2,582 |
Multifamily |  | 4,776 |  |  |  |  | — |  |  | — |  |  | 363 |  |  | 5,139 |
Non-residential |  | 3,465 |  |  |  |  | — |  |  | — |  |  | 175 |  |  | 3,640 |
Construction |  | 1,905 |  |  |  |  | — |  |  | — |  |  | 189 |  |  | 2,094 |
Commercial and industrial |  | 71 |  |  |  |  | — |  |  | — |  |  | (29) |  |  | 42 |
Junior liens |  | 549 |  |  |  |  | — |  |  | — |  |  | (81) |  |  | 468 |
Consumer and other |  | — |  |  |  |  | (9) |  |  | — |  |  | 9 |  |  | — |
Unallocated |  | 89 |  |  |  |  | — |  |  | — |  |  | (4) |  |  | 85 |
Total |  | $ | 13,465 |  |  |  |  | $ | (9) |  |  | $ | — |  |  | $ | 594 |  |  | $ | 14,050 |
The following tables presents the activity in the Company’s allowance for credit losses by class of loans based on the analysis performed for the six months ended June 30, 2023 and 2022:
|  | Balance at December 31, 2022 |  | Impact of adopting ASU 2016-13 and ASU 2022-02 |  | Charge-offs (1) |  | Recoveries |  | (Recovery of) Provision for Credit Loss - Loans |  | Balance at June 30, 2023
|  | (In thousands)
Residential one-to-four family |  | $ | 2,264 |  |  | $ | (183) |  |  | $ | — |  |  | $ | — |  |  | $ | (87) |  |  | $ | 1,994 |
Multifamily |  | 5,491 |  |  | 2,057 |  |  | — |  |  | — |  |  | (531) |  |  | 7,017 |
Non-residential |  | 3,357 |  |  | 146 |  |  | — |  |  | — |  |  | 310 |  |  | 3,813 |
Construction |  | 1,697 |  |  | (832) |  |  | — |  |  | — |  |  | 563 |  |  | 1,428 |
Commercial and industrial |  | 47 |  |  | (23) |  |  | — |  |  | — |  |  | 87 |  |  | 111 |
Junior liens |  | 451 |  |  | (405) |  |  | — |  |  | — |  |  | 4 |  |  | 50 |
Consumer and other (1) |  | — |  |  | 1 |  |  | (18) |  |  | 1 |  |  | 16 |  |  | — |
Unallocated |  | 93 |  |  | (93) |  |  | — |  |  | — |  |  | — |  |  | — |
Total |  | $ | 13,400 |  |  | $ | 668 |  |  | $ | (18) |  |  | $ | 1 |  |  | $ | 362 |  |  | $ | 14,413 |
(1) Charge-offs relate to overdrafts, which were originated in 2022 or 2023 as it is our policy to charge these off within 60 days of occurrence.
|  | Balance at December 31, 2021 |  |  |  | Charge-offs |  | Recoveries |  | (Recovery of) Provision for Loan Loss |  | Balance at June 30, 2022
|  | (In thousands)
Residential one-to-four family |  | $ | 2,822 |  |  |  |  | $ | — |  |  | $ | — |  |  | $ | (240) |  |  | $ | 2,582 |
Multifamily |  | 5,263 |  |  |  |  | — |  |  | — |  |  | (124) |  |  | 5,139 |
Non-residential |  | 2,846 |  |  |  |  | — |  |  | — |  |  | 794 |  |  | 3,640 |
Construction |  | 2,678 |  |  |  |  | — |  |  | — |  |  | (584) |  |  | 2,094 |
Commercial and industrial |  | 51 |  |  |  |  | — |  |  | — |  |  | (9) |  |  | 42 |
Junior liens |  | 636 |  |  |  |  | — |  |  | — |  |  | (168) |  |  | 468 |
Consumer and other |  | 38 |  |  |  |  | (19) |  |  | 2 |  |  | (21) |  |  | — |
Unallocated |  | 91 |  |  |  |  | — |  |  | — |  |  | (6) |  |  | 85 |
Total |  | $ | 14,425 |  |  |  |  | $ | (19) |  |  | $ | 2 |  |  | $ | (358) |  |  | $ | 14,050 |
The following table represents the allocation of allowance for loan losses and the related recorded investment, including deferred fees and costs, in loans by loan portfolio segment, disaggregated based on the impairment methodology at June 30, 2023 and December 31, 2022:
|  | Loans |  | Allowance for Credit Losses on Loans
June 30, 2023 |  | Individually Evaluated |  | Collectively Evaluated |  | Total |  | Individually Evaluated |  | Collectively Evaluated |  | Total
|  | (In thousands)
Residential one-to-four family |  | $ | 7,484 |  |  | $ | 572,912 |  |  | $ | 580,396 |  |  | $ | — |  |  | $ | 1,994 |  |  | $ | 1,994 |
Multifamily |  | 160 |  |  | 696,796 |  |  | 696,956 |  |  | — |  |  | 7,017 |  |  | 7,017 |
Non-residential |  | — |  |  | 237,247 |  |  | 237,247 |  |  | — |  |  | 3,813 |  |  | 3,813 |
Construction |  | — |  |  | 36,032 |  |  | 36,032 |  |  | — |  |  | 1,428 |  |  | 1,428 |
Commercial and industrial (1) |  | — |  |  | 9,743 |  |  | 9,743 |  |  | — |  |  | 111 |  |  | 111 |
Junior liens |  | 51 |  |  | 21,287 |  |  | 21,338 |  |  | — |  |  | 50 |  |  | 50 |
Consumer and other |  | — |  |  | 33 |  |  | 33 |  |  | — |  |  | — |  |  | — |
Total |  | $ | 7,695 |  |  | $ | 1,574,050 |  |  | $ | 1,581,745 |  |  | $ | — |  |  | $ | 14,413 |  |  | $ | 14,413 |
(1) Includes PPP loans, which carry the federal guarantee of the SBA and do not have an allowance for credit losses.
|  | Loans |  | Allowance for Loan Losses
December 31, 2022 |  | Individually Evaluated |  | Collectively Evaluated |  | Total |  | Individually Evaluated |  | Collectively Evaluated |  | Total
|  | (In thousands)
Residential one-to-four family |  | $ | 8,418 |  |  | $ | 588,836 |  |  | $ | 597,254 |  |  | $ | 27 |  |  | $ | 2,237 |  |  | $ | 2,264 |
Multifamily |  | 516 |  |  | 690,174 |  |  | 690,690 |  |  | — |  |  | 5,491 |  |  | 5,491 |
Non-residential |  | 2,671 |  |  | 213,390 |  |  | 216,061 |  |  | — |  |  | 3,357 |  |  | 3,357 |
Construction |  | — |  |  | 17,799 |  |  | 17,799 |  |  | — |  |  | 1,697 |  |  | 1,697 |
Commercial and industrial (1) |  | — |  |  | 4,653 |  |  | 4,653 |  |  | — |  |  | 47 |  |  | 47 |
Junior liens |  | 52 |  |  | 18,579 |  |  | 18,631 |  |  | — |  |  | 451 |  |  | 451 |
Consumer and other |  | — |  |  | 39 |  |  | 39 |  |  | — |  |  | — |  |  | — |
Unallocated |  | — |  |  | — |  |  | — |  |  | — |  |  | 93 |  |  | 93 |
Total |  | $ | 11,657 |  |  | $ | 1,533,470 |  |  | $ | 1,545,127 |  |  | $ | 27 |  |  | $ | 13,373 |  |  | $ | 13,400 |
(1) Includes PPP loans which carry the federal guarantee of the SBA and do not have an allowance for credit losses. Allowance for Credit Losses - Securities The Company recorded an allowance of credit losses on securities of $170 thousand upon adoption of ASU 2016-13 on January 1, 2023. Prior year disclosures have not been restated. For the three months ended June 30, 2023, the Company recorded a decrease in provision for credit losses on held-to-maturity securities of $17 thousand and no provision for credit losses for the six months ended June 30, 2023. Accrued interest receivable on securities is reported as a component of accrued interest receivable on the consolidated balance sheets and totaled $1.4 million and $1.0 million at June 30, 2023 and December 31, 2022, respectively. The Company made the election to exclude accrued interest receivable from the estimate of credit losses on securities. Allowance for Credit Losses - Off-Balance-Sheet Exposures The allowance for credit losses on off-balance-sheet exposures is reported in other liabilities in the consolidated balance sheets. The liability represents an estimate of expected credit losses arising from off-balance-sheet exposures such as letters of credit, guarantees and unfunded loan commitments. The process for measuring lifetime expected credit losses on these exposures is consistent with that for loans as discussed above, but is subject to an additional estimate reflecting the likelihood that funding will occur. No liability is recognized for off-balance-sheet credit exposures that are unconditionally cancellable by the Company. Adjustments to the liability are reported as a component of provision for credit losses. The Company recorded a decrease in the allowance for credit losses for off-balance-sheet exposures of $811 thousand upon adoption on January 1, 2023. Prior year disclosures have not been restated. At June 30, 2023 and December 31, 2022, the balance of the allowance for credit losses for off-balance-sheet exposures was $636 thousand and $1.7 million, respectively. The Company recorded a recovery of provision for credit loss on off-balance-sheet exposures of $113 thousand and $242 thousand for the three and six months ended June 30, 2023, respectively. For the three and six months ended June 30, 2022, the Company recorded a recovery of provision on unfunded lending commitments of $108 thousand and $278 thousand, respectively, in other non-interest expense.

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