XML 21 R12.htm IDEA: XBRL DOCUMENT

Note 4 - Loans Receivable

9 Months Ended

Sep. 30, 2022

Loans, Notes, Trade and Other Receivables Disclosure [Text Block]

NOTE 4 - LOANS RECEIVABLE

Loans receivable are as follows:

	*September 30, 2022*			*December 31, 2021*
One-to-four family residential real estate	$	24,484		$	30,133
Multi-family mortgage		481,838			426,136
Nonresidential real estate		115,820			103,172
Construction and land		160			—
Commercial loans and leases		523,669			489,512
Consumer		2,363			1,685
		1,148,334			1,050,638
Net deferred loan origination costs		851			284
Allowance for loan losses		(7,386	)		(6,715	)
Loans, net	$	1,141,799		$	1,044,207

The following tables present the balance in the allowance for loan losses and loans receivable by portfolio segment and based on impairment method:

	*Allowance for loan losses*						*Loan Balances*
	*Individually evaluated for impairment*		*Collectively evaluated for impairment*		*Total*		*Individually evaluated for impairment*		*Collectively evaluated for impairment*		*Total*
September 30, 2022
One-to-four family residential real estate	$	—	$	315	$	315	$	1,224	$	23,260	$	24,484
Multi-family mortgage		—		3,562		3,562		482		481,356		481,838
Nonresidential real estate		—		1,162		1,162		—		115,820		115,820
Construction and land		—		4		4		—		160		160
Commercial loans and leases		—		2,231		2,231		670		522,999		523,669
Consumer		—		112		112		—		2,363		2,363
	$	—	$	7,386	$	7,386	$	2,376	$	1,145,958		1,148,334
Net deferred loan origination costs												851
Allowance for loan losses												(7,386	)
Loans, net											$	1,141,799

	*Allowance for loan losses*						*Loan Balances*
	*Individually evaluated for impairment*		*Collectively evaluated for impairment*		*Total*		*Individually evaluated for impairment*		*Collectively evaluated for impairment*		*Total*
December 31, 2021
One-to-four family residential real estate	$	—	$	331	$	331	$	1,299	$	28,834	$	30,133
Multi-family mortgage		—		3,377		3,377		498		425,638		426,136
Nonresidential real estate		30		1,281		1,311		297		102,875		103,172
Commercial loans and leases		—		1,652		1,652		76		489,436		489,512
Consumer		—		44		44		—		1,685		1,685
	$	30	$	6,685	$	6,715	$	2,170	$	1,048,468		1,050,638
Net deferred loan origination costs												284
Allowance for loan losses												(6,715	)
Loans, net											$	1,044,207

The following table represents the activity in the allowance for loan losses by portfolio segment:

	Beginning balance		Provision for (recovery of) loan losses			Loans charged off			Recoveries		Ending balance
For the three months ended

September 30, 2022
One-to-four family residential real estate	$	286	$	98		$	(71	)	$	2	$	315
Multi-family mortgage		3,630		(74	)		—			6		3,562
Nonresidential real estate		1,093		67			—			2		1,162
Construction and land		2		2			—			—		4
Commercial loans and leases		2,149		171			(104	)		15		2,231
Consumer		42		86			(16	)		—		112
	$	7,202	$	350		$	(191	)	$	25	$	7,386

September 30, 2021
One-to-four family residential real estate	$	396	$	(33	)	$	—		$	38	$	401
Multi-family mortgage		3,690		(118	)		—			7		3,579
Nonresidential real estate		1,336		(30	)		—			—		1,306
Construction and land		11		1			—			—		12
Commercial loans and leases		1,377		176			—			1		1,554
Consumer		47		(2	)		(2	)		—		43
	$	6,857	$	(6	)	$	(2	)	$	46	$	6,895

	*Beginning balance*		*Provision for (recovery of) loan losses*			*Loans charged off*			*Recoveries*		*Ending balance*
For the nine months ended

September 30, 2022
One-to-four family residential real estate	$	331	$	53		$	(76	)	$	7	$	315
Multi-family mortgage		3,377		170			—			15		3,562
Nonresidential real estate		1,311		39			(192	)		4		1,162
Construction and land		—		4			—			—		4
Commercial loans and leases		1,652		718			(155	)		16		2,231
Consumer		44		101			(49	)		16		112
	$	6,715	$	1,085		$	(472	)	$	58	$	7,386

September 30, 2021
One-to-four family residential real estate	$	518	$	(264	)	$	—		$	147	$	401
Multi-family mortgage		4,062		(511	)		—			28		3,579
Nonresidential real estate		1,569		(263	)		—			—		1,306
Construction and land		12		—			—			—		12
Commercial loans and leases		1,536		15			(86	)		89		1,554
Consumer		54		4			(17	)		2		43
	$	7,751	$	(1,019	)	$	(103	)	$	266	$	6,895

Impaired loans

The following tables present loans individually evaluated for impairment by class of loans:

									*Three Months Ended*				*Nine Months Ended*
									*September 30, 2022*				*September 30, 2022*
	*Loan Balance*		*Recorded Investment*		*Partial Charge-off*		*Allowance for Loan Losses Allocated*		*Average Investment in Impaired Loans*		*Interest Income Recognized*		*Average Investment in Impaired Loans*		*Interest Income Recognized*
September 30, 2022
With no related allowance recorded:
One-to-four family residential real estate	$	1,296	$	1,224	$	72	$	—	$	1,152	$	10	$	1,148	$	21
Multi-family mortgage - Illinois		482		482		—		—		483		5		592		19
Commercial loans and leases		730		670		48		—		607		1		312		11
	$	2,508	$	2,376	$	120	$	—	$	2,242	$	16	$	2,052	$	51

									*Year ended*
									*December 31, 2021*
	*Loan Balance*		*Recorded Investment*		*Partial Charge-off*		*Allowance for Loan Losses Allocated*		*Average Investment in Impaired Loans*		*Interest Income Recognized*
December 31, 2021
With no related allowance recorded:
One-to-four family residential real estate	$	1,299	$	1,299	$	—	$	—	$	1,473	$	29
Multi-family mortgage - Illinois		498		498		—		—		509		30
Commercial loans and leases		83		76		7		—		7		—
		1,880		1,873		7		—		1,989		59

With an allowance recorded - nonresidential real estate		280		297		7		30		296		—
	$	2,160	$	2,170	$	14	$	30	$	2,285	$	59

Nonaccrual Loans

The following tables present the recorded investment in nonaccrual and loans 90 days or more past due still on accrual by class of loans:

	*Nonaccrual Recorded Investment*		*Loans Past Due Over 90 Days Still Accruing*
September 30, 2022
One-to-four family residential real estate	$	715	$	—
Asset based & factored receivables		—		415
Equipment finance		525		—
	$	1,240	$	415
December 31, 2021
One-to-four family residential real estate	$	367	$	—
Nonresidential real estate		297		—
Asset based & factored receivables		—		10
Equipment finance		76		—
	$	740	$	10

Nonaccrual loans and impaired loans are defined differently. Some loans may be included in both categories, and some loans may only be included in one category. Nonaccrual loans include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually classified impaired loans.

The Company’s reserve for uncollected loan interest was $57,000 and $140,000 at September 30, 2022 and December 31, 2021, respectively. When a loan is on nonaccrual status and the ultimate collectability of the total principal of an impaired loan is in doubt, all payments are applied to principal under the cost recovery method. Alternatively, when a loan is on nonaccrual status but there is doubt concerning only the ultimate collectability of interest, contractual interest is credited to interest income only when received, under the cash basis method pursuant to the provisions of FASB ASC 310–10, as applicable. In all cases, the average balances are calculated based on the month–end balances of the financing receivables within the period reported pursuant to the provisions of FASB ASC 310–10, as applicable.

Past Due Loans

The following tables present the aging of the recorded investment of loans by class of loans:

	*30-59 Days Past Due*		*60-89 Days Past Due*		*90 Days or Greater Past Due*		*Total Past Due*		*Loans Not Past Due*		*Total*
September 30, 2022
One-to-four family residential real estate loans:
Owner occupied	$	5	$	23	$	693	$	721	$	19,220	$	19,941
Non-owner occupied		1		—		—		1		4,542		4,543
Multi-family mortgage:
Illinois		—		299		—		299		289,557		289,856
Other		—		—		—		—		191,982		191,982
Nonresidential real estate		—		—		—		—		115,820		115,820
Construction and land		—		—		—		—		160		160
Commercial loans and leases:
Commercial		225		14		—		239		73,768		74,007
Asset based & factored receivables		52		94		415		561		19,250		19,811
Equipment finance:
Government		3,572		7,088		149		10,809		182,655		193,464
Corporate - Investment-grade		—		—		42		42		61,693		61,735
Corporate - Other		1,179		—		331		1,510		86,619		88,129
Middle market		—		—		—		—		55,409		55,409
Small ticket		4		—		—		4		31,110		31,114
Consumer		6		5		—		11		2,352		2,363
	$	5,044	$	7,523	$	1,630	$	14,197	$	1,134,137	$	1,148,334

	*30-59 Days Past Due*		*60-89 Days Past Due*		*90 Days or Greater Past Due*		*Total Past Due*		*Loans Not Past Due*		*Total*
December 31, 2021
One-to-four family residential real estate loans:
Owner occupied	$	181	$	250	$	367	$	798	$	23,333	$	24,131
Non-owner occupied		2		9		—		11		5,991		6,002
Multi-family mortgage:
Illinois		189		—		—		189		235,681		235,870
Other		—		—		—		—		190,266		190,266
Nonresidential real estate		—		—		297		297		102,875		103,172
Commercial loans and leases:
Commercial		—		—		—		—		67,995		67,995
Asset based & factored receivables		26		6		10		42		19,358		19,400
Equipment finance:
Government		3,160		4,718		—		7,878		170,584		178,462
Corporate - Investment-grade		290		1,201		—		1,491		81,135		82,626
Corporate - Other		3,015		—		76		3,091		85,760		88,851
Middle market		—		—		—		—		40,582		40,582
Small ticket		—		—		—		—		11,596		11,596
Consumer		13		4		—		17		1,668		1,685
	$	6,876	$	6,188	$	750	$	13,814	$	1,036,824	$	1,050,638

U.S. Small Business Administration Paycheck Protection Program (“PPP”)

In response to the COVID-19 pandemic, the Coronavirus Aid, Relief and Economic Security Act ("CARES Act") was passed by Congress and signed into law in 2020. The CARES Act established the PPP, designed to provide a direct incentive for small businesses to keep their workers on the payroll. Under the most recently published guidance, the U.S. Small Business Administration ("SBA") will forgive PPP loans if all employee retention criteria are met, and the funds are used for eligible expenses.

The following table presents the PPP activity:

	*Three Months Ended September 30,*				*For the Nine Months Ended September 30,*
	*2022*		*2021*		*2022*		*2021*
Paycheck Protection Program:
Number of loans originated		—		—		—		238
Loan balance originations	$	—	$	—	$	—	$	10,135
Loan balance forgiven	$	629	$	4,801	$	3,761	$	14,538

	*September 30, 2022*		*December 31, 2021*
Paycheck Protection Program loans
Number of loans		11		76
Loan balance	$	282	$	4,043

Troubled Debt Restructurings (“TDR”)

The Company evaluates loan extensions or modifications in accordance with FASB ASC 340-10 with respect to the classification of the loan as a TDR.

Under ASC 340-10, if the Company grants a loan extension or modification to a borrower experiencing financial difficulties for other than an insignificant period of time that includes a below–market interest rate, principal forgiveness, payment forbearance or other concession intended to minimize the economic loss to the Company, the loan extension or loan modification is classified as a TDR. In cases where borrowers are granted new terms that provide for a reduction of either interest or principal then due and payable, management measures any impairment on the restructured loan in the same manner as for impaired loans as noted above.

The Company had no TDRs at September 30, 2022 and December 31, 2021. During the three and nine months ended September 30, 2022 and 2021, there were no loans modified and classified as TDRs. During the three and nine months ended September 30, 2022 and 2021, there were no TDR loans that subsequently defaulted within twelve months of their modification.

A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

To determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt, including 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 based on credit risk. This analysis includes non-homogeneous loans, such as commercial and commercial real estate loans. This analysis is performed on a monthly basis. The Company uses the following definitions for risk ratings:

Special Mention. A “Special Mention” asset has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. Special Mention assets are not adversely classified and do not expose an institution to sufficient risk to warrant adverse classification.

Substandard. Loans categorized as “Substandard” continue to accrue interest, but exhibit a well-defined weakness or weaknesses that may jeopardize the liquidation of the debt. The loans continue to accrue interest because they are well secured and collection of principal and interest is expected within a reasonable time. The risk rating guidance published by the Office of the Comptroller of the Currency clarifies that a loan with a well-defined weakness does not have to present a probability of default for the loan to be rated Substandard, and that an individual loan’s loss potential does not have to be distinct for the loan to be rated Substandard.

Nonaccrual. An asset classified “Nonaccrual” 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 facts, conditions, and values, highly questionable and improbable.

Pass. Loans not meeting the criteria above that are analyzed individually as part of the above described process are considered “Pass” rated loans.

Based on the most recent analysis performed, the risk categories of loans by class of loans are as follows:

	*Pass*		*Special Mention*		*Substandard*		*Nonaccrual*		*Total*
September 30, 2022
One-to-four family residential real estate loans:
Owner occupied	$	19,135	$	—	$	91	$	715	$	19,941
Non-owner occupied		4,471		—		72		—		4,543
Multi-family mortgage:
Illinois		289,536		320		—		—		289,856
Other		191,982		—		—		—		191,982
Nonresidential real estate		115,820		—		—		—		115,820
Construction and land		160		—		—		—		160
Commercial loans and leases:
Commercial		74,007		—		—		—		74,007
Asset based & factored receivables		15,996		3,815		—		—		19,811
Equipment finance:
Government		193,315		—		—		149		193,464
Corporate - Investment-grade		61,694		—		—		41		61,735
Corporate - Other		87,748		—		50		331		88,129
Middle market		55,409		—		—		—		55,409
Small ticket		31,110		—		—		4		31,114
Consumer		2,353		6		4		—		2,363
	$	1,142,736	$	4,141	$	217	$	1,240	$	1,148,334

	*Pass*		*Special Mention*		*Substandard*		*Nonaccrual*		*Total*
December 31, 2021
One-to-four family residential real estate loans:
Owner occupied	$	23,396	$	—	$	368	$	367	$	24,131
Non-owner occupied		5,894		—		108		—		6,002
Multi-family mortgage:
Illinois		235,545		325		—		—		235,870
Other		190,266		—		—		—		190,266
Nonresidential real estate		102,875		—		—		297		103,172
Commercial loans and leases:
Commercial		67,995		—		—		—		67,995
Asset based & factored receivables		19,400		—		—		—		19,400
Equipment finance:
Government		178,427		35		—		—		178,462
Corporate - Investment-grade		82,626		—		—		—		82,626
Corporate - Other		87,685		1,090		—		76		88,851
Middle market		40,582		—		—		—		40,582
Small ticket		11,596		—		—		—		11,596
Consumer		1,675		4		6		—		1,685
	$	1,047,962	$	1,454	$	482	$	740	$	1,050,638