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Loans Receivable and Allowance for Credit Losses | 3 Months Ended
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Mar. 31, 2024
Loans Receivable and Allowance for Credit Losses [Abstract] |
Loans Receivable and Allowance for Credit Losses | Note 7 - Loans Receivable and Allowance for Credit Losses The following tables present the recorded investment in loans receivable as of March 31, 2024 and December 31, 2023 by segment and class:
| March 31, 2024 |  | December 31, 2023
|  | (In Thousands)
Residential one-to-four family | $ | 244,762 |  | $ | 248,295
Commercial and multi-family |  | 2,392,970 |  |  | 2,434,115
Construction |  | 180,975 |  |  | 192,816
Commercial business(1) |  | 276,864 |  |  | 269,274
Business express |  | 101,209 |  |  | 102,928
Home equity(2) |  | 65,518 |  |  | 66,331
Consumer |  | 2,847 |  |  | 3,643
|  | 3,265,145 |  |  | 3,317,402
Less: |  |  |  |  |
Deferred loan fees, net |  | (3,705) |  |  | (4,086)
Allowance for credit losses |  | (34,563) |  |  | (33,608)
Total Loans, net | $ | 3,226,877 |  | $ | 3,279,708
(1) Excludes Business express loans. (2) Includes home equity lines of credit. ‎ Note 7 – Loans Receivable and Allowance for Credit Losses (Continued) Allowance for Credit Losses The Company engages a third-party vendor to assist in the CECL calculation and has established a robust internal governance framework to oversee the quarterly estimation process for the allowance for credit losses (“ACL”). The ACL calculation methodology relies on regression-based discounted cash flow (“DCF”) models that correlate relationships between certain financial metrics and external market and macroeconomic variables. Following are some of the key factors and assumptions that are used in the Company’s CECL calculations: methods based on probability of default and loss given default which are modeled based on macroeconomic scenarios; a reasonable and supportable forecast period determined based on management’s current review of macroeconomic environment; a reversion period after the reasonable and supportable forecast period; estimated prepayment rates based on the Company’s historical experience and future macroeconomic environment; estimated credit utilization rates based on the Company’s historical experience and future macroeconomic environment; and incorporation of qualitative factors not captured within the modeled results. The qualitative factors include but are not limited to changes in lending policies, business conditions, changes in the nature and size of the portfolio, portfolio concentrations, and external factors such as competition. Allowance for credit losses are aggregated for the major loan segments, with similar risk characteristics, summarized below. However, for the purposes of calculating the reserves, these segments may be further broken down into loan classes by risk characteristics that include but are not limited to regulatory call codes, industry type, geographic location, and collateral type. Residential one-to-four family real estate loans involve certain risks such as interest rate risk and risk of non-repayment. Adjustable-rate residential real estate loans decrease the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying properties may be adversely affected by higher interest rates. Repayment risk may be affected by a number of factors including, but not necessarily limited to, job loss, divorce, illness and personal bankruptcy of the borrower. Commercial and multi-family real estate lending entails additional risks as compared with residential family property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. The payment experience on such loans is typically dependent on the successful operation of the real estate project. The success of such projects is sensitive to changes in supply and demand conditions in the market for commercial real estate as well as general economic conditions. Construction lending is generally considered to involve a high risk due to the concentration of principal in a limited number of loans and borrowers and the effects of the general economic conditions on developers and builders. Moreover, a construction loan can involve additional risks because of the inherent difficulty in estimating both a property’s value at completion of the project and the estimated cost (including interest) of the project. The nature of these loans is such that they are generally difficult to evaluate and monitor. In addition, speculative construction loans to a builder are not necessarily pre-sold and thus pose a greater potential risk to the Bank than construction loans to individuals on their personal residence. Commercial business lending, including lines of credit, is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Commercial business loans are primarily secured by inventories and other business assets. In many cases, any repossessed collateral for a defaulted commercial business loan will not provide an adequate source of repayment of the outstanding loan balance. The Bank has further segregated its commercial business portfolio into commercial business express loans that carry higher risk relative to other commercial business loans. The Bank had originated commercial business express loans to support small business owners coming out of the COVID crisis. The portfolio consists of a large number of loans with majority of the loans carrying a balance of $250,000 or lower. Home equity lending entails certain risks such as interest rate risk and risk of non-repayment. The marketability of the underlying property may be adversely affected by higher interest rates, decreasing the collateral value securing the loan. Repayment risk can be affected by job loss, divorce, illness and personal bankruptcy of the borrower. Home equity line of credit lending entails securing an equity interest in the borrower’s home. In many cases, the Bank’s position in these loans is as a junior lien holder to another institution’s superior lien. This type of lending is often priced on an adjustable rate basis with the rate set at or above a predefined index. Adjustable-rate loans decrease the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. Other consumer loans generally have more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans generally have shorter terms and higher interest rates than other lending. In addition, consumer lending collections are dependent on the borrower’s continuing financial stability, and thus are more likely to be adversely affected by job loss, divorce, illness and personal bankruptcy. In many cases, any repossessed collateral for a defaulted consumer loan will not provide an adequate source of repayment of the outstanding loan. ‎ Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) The following table sets forth the activity in the Company’s allowance for credit losses for the three months ended March 31, 2024, and the related portion of the allowances for credit losses that is allocated to each loan class, as of March 31, 2024 (in thousands):
| Residential |  |  | Commercial & Multi-family |  | Construction |  | Commercial Business (1) |  | Business Express |  | Home Equity (2) |  | Consumer |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning Balance, January 1, 2024 | $ | 2,344 |  | $ | 16,301 |  | $ | 3,841 |  | $ | 5,811 |  | $ | 4,542 |  | $ | 691 |  | $ | 78 |  | $ | - |  | $ | 33,608
Charge-offs: |  | - |  |  | - |  |  | - |  |  | (29) |  |  | (1,122) |  |  | - |  |  | - |  |  | - |  |  | (1,151)
Recoveries: |  | 11 |  |  | - |  |  | - |  |  | 3 |  |  | 4 |  |  | - |  |  | - |  |  | - |  |  | 18
Provision (benefit): |  | (192) |  |  | (938) |  |  | (604) |  |  | 1,855 |  |  | 1,606 |  |  | (41) |  |  | 402 |  |  | - |  |  | 2,088
Ending Balance, March 31, 2024 | $ | 2,163 |  | $ | 15,363 |  | $ | 3,237 |  | $ | 7,640 |  | $ | 5,030 |  | $ | 650 |  | $ | 480 |  | $ | - |  | $ | 34,563
Ending Balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | - |  | $ | 956 |  | $ | 203 |  | $ | 3,291 |  | $ | 657 |  | $ | - |  | $ | 409 |  | $ | - |  | $ | 5,516
Collectively evaluated |  | 2,163 |  |  | 14,407 |  |  | 3,034 |  |  | 4,349 |  |  | 4,373 |  |  | 650 |  |  | 71 |  |  | - |  |  | 29,047
Ending Balance, March 31, 2024 | $ | 2,163 |  | $ | 15,363 |  | $ | 3,237 |  | $ | 7,640 |  | $ | 5,030 |  | $ | 650 |  | $ | 480 |  | $ | - |  | $ | 34,563
Loans Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 173 |  | $ | 52,572 |  | $ | 3,802 |  | $ | 8,315 |  | $ | 657 |  | $ | 212 |  | $ | - |  | $ | - |  | $ | 65,731
Collectively evaluated |  | 244,589 |  |  | 2,340,398 |  |  | 177,173 |  |  | 268,549 |  |  | 100,552 |  |  | 65,306 |  |  | 2,847 |  |  | - |  |  | 3,199,414
Total Gross Loans: | $ | 244,762 |  | $ | 2,392,970 |  | $ | 180,975 |  | $ | 276,864 |  | $ | 101,209 |  | $ | 65,518 |  | $ | 2,847 |  | $ | - |  | $ | 3,265,145
(1) Excludes Business express loans. (2) Includes home equity lines of credit. The following table sets forth the activity in the Company’s allowance for credit losses for the three months ended March 31, 2023, and the related portion of the allowances for credit losses that is allocated to each loan class, as of March 31, 2023 (in thousands):
| Residential |  |  | Commercial & Multi-family |  | Construction |  | Commercial Business (1) |  | Business Express |  | Home Equity (2) |  | Consumer |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance December 31, 2022 | $ | 2,474 |  | $ | 21,749 |  | $ | 2,094 |  | $ | 4,495 |  | $ | 872 |  | $ | 485 |  | $ | 24 |  | $ | 180 |  | $ | 32,373
Effect of adopting ASU No. 2016-13 ("CECL") |  | 144 |  |  | (7,123) |  |  | 1,387 |  |  | 1,734 |  |  | (316) |  |  | 182 |  |  | 7 |  |  | (180) |  |  | (4,165)
Beginning Balance, January 1, 2023 | $ | 2,618 |  | $ | 14,626 |  | $ | 3,481 |  | $ | 6,229 |  | $ | 556 |  | $ | 667 |  | $ | 31 |  | $ | - |  | $ | 28,208
Charge-offs: |  | - |  |  | - |  |  | - |  |  | (1) |  |  | - |  |  | - |  |  | - |  |  | - |  |  | (1)
Recovery: |  | 12 |  |  | - |  |  | - |  |  | 25 |  |  | - |  |  | 16 |  |  | - |  |  | - |  |  | 53
Provisions (benefit): |  | (269) |  |  | 340 |  |  | 369 |  |  | (780) |  |  | 962 |  |  | (3) |  |  | 3 |  |  | - |  |  | 622
Ending Balance March 31, 2023 | $ | 2,361 |  | $ | 14,966 |  | $ | 3,850 |  | $ | 5,473 |  | $ | 1,518 |  | $ | 680 |  | $ | 34 |  | $ | - |  | $ | 28,882
Ending Balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | - |  | $ | - |  | $ | 605 |  | $ | 1,942 |  | $ | 39 |  | $ | - |  | $ | - |  | $ | - |  | $ | 2,586
Collectively evaluated |  | 2,361 |  |  | 14,966 |  |  | 3,245 |  |  | 3,531 |  |  | 1,479 |  |  | 680 |  |  | 34 |  |  | - |  |  | 26,296
Ending Balance March 31, 2023 | $ | 2,361 |  | $ | 14,966 |  | $ | 3,850 |  | $ | 5,473 |  | $ | 1,518 |  | $ | 680 |  | $ | 34 |  | $ | - |  | $ | 28,882
Loans Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 358 |  | $ | 10,114 |  | $ | 3,217 |  | $ | 3,644 |  | $ | 39 |  | $ | 212 |  | $ | - |  | $ | - |  | $ | 17,584
Collectively evaluated |  | 246,325 |  |  | 2,456,818 |  |  | 159,336 |  |  | 238,349 |  |  | 85,566 |  |  | 58,610 |  |  | 3,383 |  |  | - |  |  | 3,248,387
Total Gross Loans: | $ | 246,683 |  | $ | 2,466,932 |  | $ | 162,553 |  | $ | 241,993 |  | $ | 85,605 |  | $ | 58,822 |  | $ | 3,383 |  | $ | - |  | $ | 3,265,971
(1) Excludes Business express loans. (2) Includes home equity lines of credit. ‎ Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) The following table sets forth the amount recorded in loans receivable at December 31, 2023. The table also details the amount of total loans receivable that are evaluated individually, and collectively, for impairment and the related portion of the allowance for credit losses that is allocated to each loan class (in thousands):
| Residential |  | Commercial & Multi-family |  | Construction |  | Commercial Business (1) |  | Business Express |  | Home Equity (2) |  | Consumer |  | Unallocated |  | Total
Allowance for credit losses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Ending Balance, December 31, 2022 | $ | 2,474 |  | $ | 21,749 |  | $ | 2,094 |  | $ | 4,495 |  | $ | 872 |  | $ | 485 |  | $ | 24 |  | $ | 180 |  | $ | 32,373
Effect of adopting ASU No. 2016-13 ("CECL") |  | 144 |  |  | (7,123) |  |  | 1,387 |  |  | 1,734 |  |  | (316) |  |  | 182 |  |  | 7 |  |  | (180) |  |  | (4,165)
Beginning Balance, January 1, 2023 | $ | 2,618 |  | $ | 14,626 |  | $ | 3,481 |  | $ | 6,229 |  | $ | 556 |  | $ | 667 |  | $ | 31 |  | $ | - |  | $ | 28,208
Charge-offs: |  | - |  |  | - |  |  | - |  |  | - |  |  | (805) |  |  | - |  |  | - |  |  | - |  |  | (805)
Recoveries: |  | 45 |  |  | - |  |  | - |  |  | 29 |  |  | 11 |  |  | 16 |  |  | - |  |  | - |  |  | 101
Provision (benefit): |  | (319) |  |  | 1,675 |  |  | 360 |  |  | (447) |  |  | 4,780 |  |  | 8 |  |  | 47 |  |  | - |  |  | 6,104
Ending Balance, December 31, 2023 | $ | 2,344 |  | $ | 16,301 |  | $ | 3,841 |  | $ | 5,811 |  | $ | 4,542 |  | $ | 691 |  | $ | 78 |  | $ | - |  | $ | 33,608
Ending Balance attributable to loans: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | - |  | $ | 990 |  | $ | 310 |  | $ | 2,132 |  | $ | 797 |  | $ | - |  | $ | - |  | $ | - |  | $ | 4,229
Collectively evaluated |  | 2,344 |  |  | 15,311 |  |  | 3,531 |  |  | 3,679 |  |  | 3,745 |  |  | 691 |  |  | 78 |  |  | - |  |  | 29,379
Ending Balance, December 31, 2023 | $ | 2,344 |  | $ | 16,301 |  | $ | 3,841 |  | $ | 5,811 |  | $ | 4,542 |  | $ | 691 |  | $ | 78 |  | $ | - |  | $ | 33,608
Loans Receivables: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Individually evaluated | $ | 444 |  | $ | 42,259 |  | $ | 4,292 |  | $ | 6,015 |  | $ | 797 |  | $ | 212 |  | $ | - |  | $ | - |  | $ | 54,019
Collectively evaluated |  | 247,851 |  |  | 2,391,856 |  |  | 188,524 |  |  | 263,259 |  |  | 102,131 |  |  | 66,119 |  |  | 3,643 |  |  | - |  |  | 3,263,383
Total Gross Loans | $ | 248,295 |  | $ | 2,434,115 |  | $ | 192,816 |  | $ | 269,274 |  | $ | 102,928 |  | $ | 66,331 |  | $ | 3,643 |  | $ | - |  | $ | 3,317,402
(1) Excludes Business express loans. (2) Includes home equity lines of credit. The following tables present the activity in the allowance for credit losses on off-balance sheet exposures for the three months ended March 31, 2023 and 2024 (in thousands):
|  | Three Months Ended March 31, 2024
|  | (In thousands)
Allowance for Credit Losses: |  |
Balance at December 31, 2023 | $ | 694
Provision for credit losses |  | 65
Balance at March 31, 2024 | $ | 759
|  | Three Months Ended March 31, 2023
|  | (In thousands)
Allowance for Credit Losses: |  |
Balance at December 31, 2022 | $ | -
Impact of adopting ASU 2016-13 ("CECL") effective January 1, 2023 |  | 1,266
Benefit for credit losses |  | (577)
Balance at March 31, 2023 | $ | 689
‎ Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) The following table sets forth the delinquency status of total loans receivable as of March 31, 2024:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans Receivable
| 30-59 Days |  | 60-90 Days |  | Greater Than |  | Total Past |  |  |  |  | Total Loans |  | >90 Days
| Past Due |  | Past Due |  | 90 Days |  | Due |  | Current |  | Receivable |  | and Accruing
|  | (In Thousands)
Residential one-to-four family | $ | 1,499 |  | $ | 308 |  | $ | - |  | $ | 1,807 |  | $ | 242,955 |  | $ | 244,762 |  | $ | -
Commercial and multi-family |  | 3,600 |  |  | 17,100 |  |  | 6,842 |  |  | 27,542 |  |  | 2,365,428 |  |  | 2,392,970 |  |  | -
Construction |  | 577 |  |  | 387 |  |  | 586 |  |  | 1,550 |  |  | 179,425 |  |  | 180,975 |  |  | -
Commercial business(1) |  | 3,831 |  |  | 308 |  |  | 2,443 |  |  | 6,582 |  |  | 270,282 |  |  | 276,864 |  |  | -
Business express |  | 2,272 |  |  | 662 |  |  | - |  |  | 2,934 |  |  | 98,275 |  |  | 101,209 |  |  |
Home equity(2) |  | 816 |  |  | 330 |  |  | - |  |  | 1,146 |  |  | 64,372 |  |  | 65,518 |  |  | -
Consumer |  | - |  |  | - |  |  | - |  |  | - |  |  | 2,847 |  |  | 2,847 |  |  | -
Total | $ | 12,595 |  | $ | 19,095 |  | $ | 9,871 |  | $ | 41,561 |  | $ | 3,223,584 |  | $ | 3,265,145 |  | $ | -
(1) Excludes Business express loans. (2) Includes home equity lines of credit. The following table sets forth the delinquency status of total loans receivable at December 31, 2023:
|  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Loans Receivable
| 30-59 Days |  | 60-90 Days |  | Greater Than |  | Total Past |  |  |  |  | Total Loans |  | >90 Days
| Past Due |  | Past Due |  | 90 Days |  | Due |  | Current |  | Receivable |  | and Accruing
|  | (In Thousands)
Residential one-to-four family | $ | 4,701 |  | $ | - |  | $ | 270 |  | $ | 4,971 |  | $ | 243,324 |  | $ | 248,295 |  | $ | -
Commercial and multi-family |  | 1,853 |  |  | 7,876 |  |  | 6,842 |  |  | 16,571 |  |  | 2,417,544 |  |  | 2,434,115 |  |  | -
Construction |  | 3,641 |  |  | - |  |  | 586 |  |  | 4,227 |  |  | 188,589 |  |  | 192,816 |  |  | -
Commercial business(1) |  | 2,314 |  |  | 362 |  |  | 1,081 |  |  | 3,757 |  |  | 265,517 |  |  | 269,274 |  |  | -
Business express |  | 1,922 |  |  | 249 |  |  | 50 |  |  | 2,221 |  |  | 100,707 |  |  | 102,928 |  |  |
Home equity(2) |  | 907 |  |  | - |  |  | - |  |  | 907 |  |  | 65,424 |  |  | 66,331 |  |  | -
Consumer |  | - |  |  | - |  |  | - |  |  | - |  |  | 3,643 |  |  | 3,643 |  |  | -
Total | $ | 15,338 |  | $ | 8,487 |  | $ | 8,829 |  | $ | 32,654 |  | $ | 3,284,748 |  | $ | 3,317,402 |  | $ | -
(1) Excludes Business express loans. (2) Includes home equity lines of credit. Modifications The Company adopted Accounting Standards Update (“ASU”) 2022-02, Financial Instruments - Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) effective January 1, 2023. The amendments in ASU 2022-02 eliminated the recognition and measurement of troubled debt restructurings and enhanced disclosures for loan modifications to borrowers experiencing financial difficulty. The following table shows the amortized cost basis of loans modified to borrowers experiencing financial difficulty, disaggregated by loan category and type of concession granted:
|  | For the Three Months Ended March 31, 2024
|  | (In Thousands)
Significant Payment Delay |  | Number |  | Amortized Cost Basis |  | % of Total Class of Financing Receivable |  | Financial Effect
Residential one-to-four family |  | 1 | $ | 180 |  | 0.01 | % | Amortization extension
The Company monitors the performance of loans modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts. The loan modified during the three months ended March 31, 2024 was current with payments. The Company did not have any loans that were both experiencing financial difficulty and modified during the three months ending March 31, 2023. Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) The tables below set forth the amounts and types of non-accrual loans in the Bank’s loan portfolio at March 31, 2024 and December 31, 2023, respectively. Loans are placed on non-accrual status when they become more than 90 days delinquent, or when the collection of principal and/or interest become doubtful. As of March 31, 2024 and December 31, 2023, non-accrual loans differed from the amount of total loans past due 90 days due to loans that were previously 90 days past due both of which are maintained on nonaccrual status for a minimum of six months until the borrower has demonstrated their ability to satisfy the terms of the loan.
| As of March 31, 2024
| (in Thousands)
|  | Nonaccrual loans with an Allowance for Credit Losses |  |  | Nonaccrual loans without an Allowance for Credit Losses |  |  | Total Nonaccrual loans |  |  | Amortized Cost of Loans Past due 90 and Still Accruing
Residential one-to-four family | $ | - |  | $ | 429 |  | $ | 429 |  | $ | -
Commercial and multi-family |  | 2,029 |  |  | 10,598 |  |  | 12,627 |  |  | -
Construction |  | 2,251 |  |  | 974 |  |  | 3,225 |  |  | -
Commercial business (1) |  | 1,983 |  |  | 3,933 |  |  | 5,916 |  |  | -
Business express loans |  | - |  |  | - |  |  | - |  |  | -
Home equity (2) |  | - |  |  | 44 |  |  | 44 |  |  | -
Consumer |  | - |  |  | - |  |  | - |  |  | -
Total | $ | 6,263 |  | $ | 15,978 |  | $ | 22,241 |  | $ | -
(1) Excludes Business express loans. (2) Includes home equity lines of credit.
| As of December 31, 2023
| (in Thousands)
|  | Nonaccrual loans with an Allowance for Credit Losses |  |  | Nonaccrual loans without an Allowance for Credit Losses |  |  | Total Nonaccrual loans |  |  | Amortized Cost of Loans Past due 90 and Still Accruing
Residential one-to-four family | $ | - |  | $ | 270 |  | $ | 270 |  | $ | -
Commercial and multi-family |  | 2,029 |  |  | 6,655 |  |  | 8,684 |  |  | -
Construction |  | 2,312 |  |  | 1,980 |  |  | 4,292 |  |  | -
Commercial business (1) |  | 2,050 |  |  | 2,892 |  |  | 4,942 |  |  | -
Business express loans |  | 549 |  |  | - |  |  | 549 |  |  | -
Home equity (2) |  | - |  |  | 46 |  |  | 46 |  |  | -
Total | $ | 6,940 |  | $ | 11,843 |  | $ | 18,783 |  | $ | -
(1) Excludes Business express loans. (2) Includes home equity lines of credit. Had non-accrual loans been performing in accordance with their original terms, the interest income recognized for the three months ended March 31, 2024 and the twelve months ended December 31, 2023 would have been approximately $710,000 and $1.9 million, respectively. Interest income recognized on loans returned to accrual was approximately $123,000 and $314,000, respectively. The Bank has not committed to lend additional funds to the borrowers whose loans have been placed on nonaccrual status. At March 31, 2024 and December 31, 2023 there were no loans more than ninety days past due and still accruing interest. ‎ Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) Criticized and Classified Assets Company policies provide for a classification system for problem assets. Under this classification system, problem assets are classified as “substandard,” “doubtful,” or “loss.” The Company’s internal credit risk grades are based on the definitions currently utilized by the banking regulatory agencies. The grades assigned and definitions are as follows, and loans graded excellent, above average, good and watch list (risk ratings 1-5) are treated as “pass” for grading purposes. The “criticized” risk rating (6) and the “classified” risk ratings (7-9) are detailed below: 6 – Special Mention- Loans currently performing but with potential weaknesses including adverse trends in borrower’s operations, credit quality, financial strength, or possible collateral deficiency. 7 – Substandard- Loans that are inadequately protected by current sound worth, paying capacity, and collateral support. Loans on “non-accrual” status. The loan needs special and corrective attention. 8 – Doubtful- Weaknesses in credit quality and collateral support make full collection improbable, but pending reasonable factors remain sufficient to defer the loss status. 9 – Loss- Continuance as a bankable asset is not warranted. However, this does not preclude future attempts at partial recovery. ‎ Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) The following table summarizes the Company's loans by year of origination and internally assigned credit risk rating at March 31, 2024 and gross charge-offs for the three months ended March 31, 2024.
Loans by Year of Origination at March 31, 2024
|  | 2024 |  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | Prior |  | Revolving Loans |  | Revolving Loans to Term Loans |  | Total
Residential one-to-four family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | - | $ | 17,095 | $ | 52,521 | $ | 37,956 | $ | 31,210 | $ | 103,842 | $ | - | $ | - | $ | 242,624
Special Mention |  | - |  | - |  | 489 |  | 90 |  | - |  | - |  | - |  | - |  | 579
Substandard |  | - |  | - |  | - |  | 1,303 |  | - |  | 256 |  | - |  | - |  | 1,559
Total one-to-four family | $ | - | $ | 17,095 | $ | 53,010 | $ | 39,349 | $ | 31,210 | $ | 104,098 | $ | - | $ | - | $ | 244,762
Commercial and multi-family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 1,200 | $ | 216,671 | $ | 764,734 | $ | 223,690 | $ | 213,531 | $ | 843,449 | $ | 2,000 | $ | - | $ | 2,265,275
Special Mention |  | - |  | 9,871 |  | 34,181 |  | - |  | - |  | 5,801 |  | 140 |  | - |  | 49,993
Substandard |  | - |  | - |  | 14,865 |  | 4,639 |  | 3,575 |  | 54,623 |  | - |  | - |  | 77,702
Total Commercial and multi-family | $ | 1,200 | $ | 226,542 | $ | 813,780 | $ | 228,329 | $ | 217,106 | $ | 903,873 | $ | 2,140 | $ | - | $ | 2,392,970
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | - | $ | 25,473 | $ | 71,926 | $ | 52,767 | $ | 19,448 | $ | 1,849 | $ | 5,710 | $ | - | $ | 177,173
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Substandard |  | - |  | - |  | - |  | 965 |  | 586 |  | 2,251 |  | - |  | - |  | 3,802
Total Construction | $ | - | $ | 25,473 | $ | 71,926 | $ | 53,732 | $ | 20,034 | $ | 4,100 | $ | 5,710 | $ | - | $ | 180,975
Commercial business |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | - | $ | 3,141 |  | 290 |  | 1,984 | $ | 4,135 | $ | 40,198 | $ | 207,677 | $ | 549 | $ | 257,974
Special Mention |  | - |  | - |  | - |  | 421 |  | - |  | 1,063 |  | 4,003 |  | - |  | 5,487
Substandard |  | - |  | - |  | - |  | - |  | - |  | 4,645 |  | 7,356 |  | 1,402 |  | 13,403
Total Commercial business | $ | - | $ | 3,141 | $ | 290 | $ | 2,405 | $ | 4,135 | $ | 45,906 | $ | 219,036 | $ | 1,951 | $ | 276,864
Business express |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | - | $ | - |  | - |  | - | $ | - | $ | - | $ | 98,604 | $ | - | $ | 98,604
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | 1,703 |  | - |  | 1,703
Substandard |  | - |  | - |  | - |  | - |  | - |  | - |  | 902 |  | - |  | 902
Total Business express | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 101,209 | $ | - | $ | 101,209
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | - | $ | 3,979 | $ | 1,461 | $ | 541 | $ | 754 | $ | 7,219 | $ | 50,445 | $ | 746 | $ | 65,145
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Substandard |  | - |  | - |  | 44 |  | - |  | - |  | - |  | 117 |  | 212 |  | 373
Total Home equity | $ | - | $ | 3,979 | $ | 1,505 | $ | 541 | $ | 754 | $ | 7,219 | $ | 50,562 | $ | 958 | $ | 65,518
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 1,059 | $ | 1,183 | $ | 451 | $ | 19 | $ | 105 | $ | 24 | $ | 6 | $ | - | $ | 2,847
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Substandard |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Total Consumer | $ | 1,059 | $ | 1,183 | $ | 451 | $ | 19 | $ | 105 | $ | 24 | $ | 6 | $ | - | $ | 2,847
Total Loans | $ | 2,259 | $ | 277,413 | $ | 940,962 | $ | 324,375 | $ | 273,344 | $ | 1,065,220 | $ | 378,663 | $ | 2,909 | $ | 3,265,145
Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 29 | $ | 1,122 | $ | - | $ | 1,151
‎ Note 7 - Loans Receivable and Allowance for Credit Losses (Continued) The following table summarizes the Company's loans by year of origination and internally assigned credit risk rating at December 31, 2023.
Loans by Year of Origination at December 31, 2023
|  | 2023 |  | 2022 |  | 2021 |  | 2020 |  | 2019 |  | Prior |  | Revolving Loans |  | Revolving Loans to Term Loans |  | Total
Residential one-to-four family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 17,080 | $ | 53,623 | $ | 38,178 | $ | 31,420 | $ | 12,067 | $ | 93,764 | $ | - | $ | - | $ | 246,132
Special Mention |  | - |  | 492 |  | 91 |  | - |  | - |  | - |  | - |  | - |  | 583
Substandard |  | - |  | - |  | 1,310 |  | - |  | - |  | 270 |  | - |  | - |  | 1,580
Total one-to-four family | $ | 17,080 | $ | 54,115 | $ | 39,579 | $ | 31,420 | $ | 12,067 | $ | 94,034 | $ | - | $ | - | $ | 248,295
Commercial and multi-family |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 222,435 | $ | 778,076 | $ | 224,823 | $ | 214,768 | $ | 50,755 | $ | 824,375 | $ | 1,922 | $ | - | $ | 2,317,154
Special Mention |  | 9,908 |  | 34,375 |  | - |  | - |  | 529 |  | 4,453 |  | 140 |  | - |  | 49,405
Substandard |  | - |  | 14,931 |  | 4,023 |  | 3,575 |  | - |  | 45,027 |  | - |  | - |  | 67,556
Total Commercial and multi-family | $ | 232,343 | $ | 827,382 | $ | 228,846 | $ | 218,343 | $ | 51,284 | $ | 873,855 | $ | 2,062 | $ | - | $ | 2,434,115
Construction |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 21,730 | $ | 74,180 | $ | 59,564 | $ | 21,462 | $ | - | $ | 5,878 | $ | 5,710 | $ | - | $ | 188,524
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Substandard |  | - |  | 1,394 |  | - |  | 586 |  | - |  | 2,312 |  | - |  | - |  | 4,292
Total Construction | $ | 21,730 | $ | 75,574 | $ | 59,564 | $ | 22,048 | $ | - | $ | 8,190 | $ | 5,710 | $ | - | $ | 192,816
Commercial business |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 3,179 | $ | 297 | $ | 2,967 | $ | 4,234 | $ | 7,080 | $ | 33,675 | $ | 201,008 | $ | 150 | $ | 252,590
Special Mention |  | - |  | - |  | - |  | - |  | 317 |  | 830 |  | 4,410 |  | - |  | 5,557
Substandard |  | - |  | - |  | - |  | - |  | - |  | 4,703 |  | 6,424 |  | - |  | 11,127
Total Commercial business | $ | 3,179 | $ | 297 | $ | 2,967 | $ | 4,234 | $ | 7,397 | $ | 39,208 | $ | 211,842 | $ | 150 | $ | 269,274
Business express |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 101,531 | $ | - | $ | 101,531
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | 600 |  | - |  | 600
Substandard |  | - |  | - |  | - |  | - |  | - |  | - |  | 797 |  | - |  | 797
Total Business express | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 102,928 | $ | - | $ | 102,928
Home equity |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 5,022 | $ | 1,487 | $ | 553 | $ | 769 | $ | 1,280 | $ | 6,181 | $ | 50,111 | $ | 553 | $ | 65,956
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Substandard |  | - |  | 46 |  | - |  | - |  | - |  | - |  | 117 |  | 212 |  | 375
Total Home equity | $ | 5,022 | $ | 1,533 | $ | 553 | $ | 769 | $ | 1,280 | $ | 6,181 | $ | 50,228 | $ | 765 | $ | 66,331
Consumer |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Pass | $ | 1,497 | $ | 471 | $ | 1,521 | $ | 109 | $ | 39 | $ | - | $ | 6 | $ | - | $ | 3,643
Special Mention |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Substandard |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | - |  | -
Total Consumer | $ | 1,497 | $ | 471 | $ | 1,521 | $ | 109 | $ | 39 | $ | - | $ | 6 | $ | - | $ | 3,643
Total Loans | $ | 280,851 | $ | 959,372 | $ | 333,030 | $ | 276,923 | $ | 72,067 | $ | 1,021,468 | $ | 372,776 | $ | 915 | $ | 3,317,402
Gross charge-offs | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | $ | 805 | $ | - | $ | 805

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