The following table sets forth the classification of the Company’s loans by loan portfolio segment for the periods presented.

The Company was a participant in the Paycheck Protection Program (“PPP”), administered by the Small Business Administration under the CARES Act, to provide guaranteed loans to qualifying businesses and organizations. These loans carry a fixed rate of 1.00% and a term of two years (loans made before June 5, 2020, subject to extension to five years with the consent of the lender) or five years (loans made on or after June 5, 2020), if not forgiven, in whole or in part. As of March 31, 2022, borrowers had received forgiveness or had made payments on $328.3 million in PPP loans. The Company’s PPP loans outstanding, included in commercial and industrial loans in the table above, totaled $37.8 million and $140.4 million at March 31, 2022 and September 30, 2021, respectively.

At March 31, 2022 and September 30, 2021, the Company was servicing approximately $230.1 million and $233.2 million, respectively, of loans for others. The Company had no loans held for sale at March 31, 2022 and September 30, 2021.

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount for those loans is as follows:

The Company has not recorded an allowance for loan losses related to these loans at March 31, 2022 and September 30, 2021.

The following table presents a summary of changes in accretable difference on purchased loans accounted for under ASC 310-30:

For the three months ended March 31, 2022 and 2021, the Company sold loans totaling approximately $16.2 million and $9.4 million, respectively, recognizing net gains of $1.6 million and $295 thousand, respectively. For the six months ended March 31, 2022 and 2021, the Company sold loans totaling approximately $51.4 million and $17.8 million, respectively, recognizing net gains of $3.1 million and $476 thousand, respectively.

The following summarizes the activity in the allowance for loan losses by portfolio segment for the periods indicated:

The following table represents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment evaluation method. The recorded investment in loans excludes accrued interest receivable due to immateriality.

The following presents information related to the Company’s impaired loans by portfolio segment for the periods shown.

(1)	Accrual basis interest income recognized approximates cash basis income.

At March 31, 2022 and September 30, 2021, past due and non-accrual loans disaggregated by portfolio segment were as follows:


(in thousands)	Past Due and Non-Accrual
					Greater than
	30 - 59 days		60 - 89 days		89 days past					Total past		Purchased-
	past due and		past due and		due and					due and non-		credit
March 31, 2022	accruing		accruing		accruing		Non-accrual			accrual		impaired		Current		Total
Residential real estate	$	2,261	$	—	$	—	$	3,737	(1)	$	5,998	$	—	$	418,498	$	424,496
Multi-family		—		—		—		422	(2)		422		—		388,840		389,262
Commercial real estate		—		—		—		5,805	(3)		5,805		602		381,316		387,723
Commercial and industrial		1,064		—		—		506	(4)		1,570		881		70,050		72,501
Construction and land development		—		—		—		—			—		—		15,057		15,057
Consumer		—		—		—		—			—		—		2		2
Total	$	3,325	$	—	$	—	$	10,470		$	13,795	$	1,483	$	1,273,763	$	1,289,041

(1)	Of the residential real estate non-accrual loans, $851 were current and $2,886 were greater than 89 days past due.

(2)	Multi-family non-accrual loans at March 31, 2022 were greater than 89 days past due.

(3)	Commercial real estate non-accrual loans at March 31, 2022 were greater than 89 days past due.

(4)	Commercial and industrial non-accrual loans at March 31, 2022 were greater than 89 days past due.


(in thousands)	Past Due and Non-Accrual
					Greater than
	30 - 59 days		60 - 89 days		89 days past					Total past		Purchased-
	past due and		past due and		due and					due and non-		credit
September 30, 2021	accruing		accruing		accruing		Non-accrual			accrual		Impaired		Current		Total
Residential real estate	$	1,032	$	1,601	$	—	$	5,554	(1)	$	8,187	$	—	$	435,953	$	444,140
Multi-family		—		—		—		458	(2)		458		—		266,256		266,714
Commercial real estate		1,939		—		—		1,016	(3)		2,955		8,324		337,528		348,807
Commercial and industrial		3,641		—		—		—			3,641		1,917		166,519		172,077
Construction and land development		—		—		—		—			—		—		15,374		15,374
Consumer		—		—		—		—			—		—		13		13
Total	$	6,612	$	1,601	$	—	$	7,028		$	15,241	$	10,241	$	1,221,643	$	1,247,125

(1)	Of the residential real estate non-accrual loans, $1,026 were 61 days past due and $4,528 were greater than 89 days past due.

(2)	Multi-family non-accrual loans at September 30, 2021 were greater than 89 days past due.

(3)	Commercial real estate non-accrual loans at September 30, 2021 were greater than 89 days past due.

Troubled debt restructurings (“TDRs”) are loan modifications where the Company has granted a concession to a borrower in financial difficulty. To assess whether a borrower is experiencing financial difficulty, an evaluation is performed to determine if that borrower is currently in payment default under any of its obligations or whether there is a probability that the borrower will be in payment default in the foreseeable future without the modification. At March 31, 2022 and September 30, 2021, the Company had a recorded investment in TDRs totaling $1.3 million and $1.6 million, consisting solely of residential real estate loans with no specific reserves allocated to such loans and no commitment to lend additional funds under those loans, at either March 31, 2022 or September 30, 2021.

For the three and six months ended March 31, 2022 and 2021, there were no TDRs for which there was a payment default within twelve months of restructuring. A loan is considered to be in payment default once it is 90 days contractually past due under its modified terms. For the three and six months ended March 31, 2022 and 2021, the Company had no new TDRs.

In June 2020, New York’s then-Governor Andrew Cuomo signed SB 8243C and SB 8428 into law, which created Section 9-x of the New York Banking Law. Section 9-x requires New York regulated banking institutions and New York regulated mortgage servicers to make available applications for forbearance of any payment due on certain residential

mortgages to qualified borrowers for their primary residence located in New York. In general, qualified borrowers will be granted forbearance of all monthly payments for a period of up to 180 days, to be extended for up to an additional 180 days provided that the borrower demonstrates continued financial hardship.

The Company has been prudently working with borrowers negatively impacted by the COVID-19 pandemic while managing credit risks and recognizing an appropriate allowance for loan losses. The Company modified 519 loans totaling $367.1 million under the CARES Act which are excluded from TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking agencies. As of March 31, 2022, 2 loans totaling $1.0 million were still in forbearance, both of which were subject to Section 9-x of the New York Banking Law.

The Company continuously monitors the credit quality of its loan receivables. Credit quality is monitored by reviewing certain credit quality indicators. Management has determined that internally assigned credit risk ratings by loan segment are the key credit quality indicators that best assist management in monitoring the credit quality of the Company’s loan receivables.

The Company has adopted a credit risk rating system as part of the risk assessment of its loan portfolio. The Company’s lending officers are required to assign a credit risk rating to each loan in their portfolio at origination. When the lender learns of important financial developments, the risk rating is reviewed and adjusted if necessary. In addition, the Company engages a third-party independent loan reviewer that performs quarterly reviews of a sample of loans, validating the credit risk ratings assigned to such loans. The credit risk ratings play an important role in the establishment of the loan loss provision and to confirm the adequacy of the allowance for loan losses.

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 commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

Special Mention: The loan has potential weaknesses that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard: The loan is inadequately protected by current sound worth and paying capacity of the obligor or collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: The loan has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable.

Loans not having a credit risk rating of Special Mention, Substandard or Doubtful are considered pass loans.

At March 31, 2022 and September 30, 2021, the Company’s loan portfolio by credit risk rating disaggregated by portfolio segment were as follows:


	March 31, 2022
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	418,828	$	1,166	$	4,277	$	—	$	424,271
Multi-family		382,810		3,720		2,345		—		388,875
Commercial		369,533		9,619		8,659		—		387,811
Commercial and industrial		68,201		655		3,231		—		72,087
Construction and land development		12,682		2,332		—		—		15,014
Consumer		1		—		—		—		1
Total	$	1,252,055	$	17,492	$	18,512	$	—	$	1,288,059


	September 30, 2021
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	433,299	$	5,115	$	5,594	$	3	$	444,011
Multi-family		262,984		2,852		458		—		266,294
Commercial		316,727		16,274		15,640		—		348,641
Commercial and industrial		168,104		540		3,630		—		172,274
Construction and land development		13,607		1,767		—		—		15,374
Consumer		11		—		—		—		11
Total	$	1,194,732	$	26,548	$	25,322	$	3	$	1,246,605