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Loans Receivable and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2025

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 September 30, 2025 and December 31, 2024 by segment and class:



	September 30, 2025		December 31, 2024
	(In Thousands)
Residential one-to-four family	$	227,140	$	239,870
Commercial and multi-family ⁽¹⁾		2,080,088		2,155,929
Cannabis related ⁽²⁾		69,102		103,206
Construction ⁽¹⁾		105,980		130,589
Commercial business ^{(1) (3)}		192,762		242,239
Business express		78,253		92,947
Home equity ⁽⁴⁾		73,566		66,769
Consumer		2,042		2,235
		2,828,933		3,033,784

Less:
Deferred loan fees, net		(2,198)		(2,736)
Allowance for credit losses		(37,803)		(34,789)

Total Loans, net	$	2,788,932	$	2,996,259

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) 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.

Cannabis related loans include commercial and multi-family, construction, and commercial business loans to borrowers involved in the cannabis industry, and have the risks inherent in such loan types discussed herein. In addition, while medical use cannabis and recreational use businesses are legal in numerous states, including our primary markets of New Jersey and New York, such businesses are not legal at the federal level and marijuana remains a Schedule I drug under the Controlled Substances Act of 1970. Federal prosecutors have significant discretion and there can be no assurance that the federal prosecutors will not choose to strictly enforce the federal laws governing cannabis. Any change in the federal government’s enforcement position could potentially subject our borrowers to criminal prosecution and other sanctions, which would have a material adverse effect on their businesses.

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 tables set forth the activity in the Company’s allowance for credit losses on loans for the three and nine months ended September 30, 2025, and the related portion of the allowance for credit losses that is allocated to each loan class, as of September 30, 2025 (in thousands):


	Residential			Commercial & Multi-family ⁽¹⁾	Cannabis Related ⁽²⁾		Construction ⁽¹⁾		Commercial Business ⁽¹⁾⁽³⁾		Business Express		Home Equity ⁽⁴⁾		Consumer		Total
Allowance for credit losses on loans:
Beginning Balance, July 1, 2025	$	1,837	$	12,419	$	14,852	$	1,907	$	8,898	$	10,093	$	635	$	17	$	50,658

Charge-offs:		-		(79)		(12,756)		-		(3,453)		(1,206)		-		-		(17,494)
Recoveries:		9		-		-		-		2		548		-		-		559
Provision (benefit):		(219)		(383)		(631)		(243)		6,667		(1,057)		(48)		(6)		4,080
Ending Balance, September 30, 2025		1,627		11,957		1,465		1,664		12,114		8,378		587		11		37,803

Ending Balance attributable to loans:
Individually evaluated		-		3,405		-		262		8,129		2,833		-		-		14,629
Collectively evaluated		1,627		8,552		1,465		1,402		3,985		5,545		587		11		23,174
Ending Balance, September 30, 2025		1,627		11,957		1,465		1,664		12,114		8,378		587		11		37,803

Loans Receivables:
Individually evaluated		302		105,115		-		2,310		18,355		2,833		443		-		129,358
Collectively evaluated		226,838		1,974,973		69,102		103,670		174,407		75,420		73,123		2,042		2,699,575
Total Gross Loans:	$	227,140	$	2,080,088	$	69,102	$	105,980	$	192,762	$	78,253	$	73,566	$	2,042	$	2,828,933

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.


	Residential			Commercial & Multi-family ⁽¹⁾	Cannabis Related ⁽²⁾		Construction ⁽¹⁾		Commercial Business ⁽¹⁾⁽³⁾		Business Express		Home Equity⁽⁴⁾		Consumer		Total
Allowance for credit losses on loans:
Beginning Balance, January 1, 2025	$	1,947	$	10,451	$	1,613	$	1,902	$	10,497	$	7,769	$	594	$	16	$	34,789

Charge-offs:		-		(419)		(12,756)		-		(5,301)		(9,246)		-		-		(27,722)
Recoveries:		43		-		-		-		6		871		-		-		920
Provision (benefit):		(363)		1,925		12,608		(238)		6,912		8,984		(7)		(5)		29,816
Ending Balance, September 30, 2025	$	1,627	$	11,957	$	1,465	$	1,664	$	12,114	$	8,378	$	587	$	11	$	37,803

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

‎

Note 7 - Loans Receivable and Allowance for Credit Losses (Continued)

The following tables set forth the activity in the Company’s allowance for credit losses on loans for the three and nine months ended September 30, 2024, and the related portion of the allowance for credit losses that is allocated to each loan class, as of September 30, 2024 (in thousands):


	Residential			Commercial & Multi-family ⁽¹⁾	Cannabis Related ⁽²⁾		Construction ⁽¹⁾		Commercial Business ⁽¹⁾⁽³⁾		Business Express		Home Equity ⁽⁴⁾		Consumer		Total
Allowance for credit losses on loans:
Beginning Balance, July 1, 2024	$	2,039	$	13,581	$	1,910	$	2,760	$	7,851	$	6,444	$	635	$	23	$	35,243

Charge-offs:		-		-		-		-		-		(3,471)		-		-		(3,471)
Recoveries:		8		-		-		-		22		1		-		-		31
Provision (benefit):		30		(1,472)		(115)		(503)		754		4,168		10		18		2,890
Ending Balance, September 30, 2024		2,077		12,109		1,795		2,257		8,627		7,142		645		41		34,693

Ending Balance attributable to loans:
Individually evaluated		-		971		-		-		2,025		3,052		-		20		6,068
Collectively evaluated		2,077		11,138		1,795		2,257		6,602		4,090		645		21		28,625
Ending Balance, September 30, 2024		2,077		12,109		1,795		2,257		8,627		7,142		645		41		34,693

Loans Receivables:
Individually evaluated		235		56,869		-		586		4,993		3,052		293		20		66,048
Collectively evaluated		240,815		2,148,731		103,396		141,438		259,752		95,905		67,273		2,289		3,059,599
Total Gross Loans:	$	241,050	$	2,205,600	$	103,396	$	142,024	$	264,745	$	98,957	$	67,566	$	2,309	$	3,125,647

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.


	Residential			Commercial & Multi-family ⁽¹⁾	Cannabis Related ⁽²⁾		Construction ⁽¹⁾		Commercial Business ⁽¹⁾⁽³⁾		Business Express		Home Equity⁽⁴⁾		Consumer		Total
Allowance for credit losses on loans:
Beginning Balance, January 1, 2024	$	2,344	$	15,343	$	2,344	$	3,758	$	4,508	$	4,542	$	691	$	78	$	33,608

Charge-offs:		-		-		-		-		(567)		(5,387)		-		(446)		(6,400)
Recoveries:		33		-		-		-		27		9		-		-		69
Provision (benefit):		(300)		(3,234)		(549)		(1,501)		4,659		7,978		(46)		409		7,416
Ending Balance, September 30, 2024	$	2,077	$	12,109	$	1,795	$	2,257	$	8,627	$	7,142	$	645	$	41	$	34,693

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

Note 7 - Loans Receivable and Allowance for Credit Losses (Continued)

The following tables set forth the activity in the Company’s allowance for credit losses on loans for the three and nine months ended September 30, 2023, and the related portion of the allowance for credit losses that is allocated to each loan class, as of September 30, 2023 (in thousands):


	Residential			Commercial & Multi-family ⁽¹⁾	Cannabis Related ⁽²⁾		Construction⁽¹⁾		Commercial Business ⁽¹⁾⁽³⁾		Business Express		Home Equity ⁽⁴⁾		Consumer		Total
Allowance for credit losses on loans:
Beginning Balance, July 1, 2023	$	2,453	$	14,679	$	509	$	4,024	$	5,302	$	2,485	$	722	$	31	$	30,205

Charge-offs:		-		-		-		-		-		(515)		-		-		(515)
Recoveries:		14		-		-		-		5		-		-		-		19
Provision (benefit):		(23)		(696)		1,331		568		1,557		(485)		(54)		7		2,205
Ending Balance, September 30, 2023		2,444		13,983		1,840		4,592		6,864		1,485		668		38		31,914

Ending Balance attributable to loans:
Individually evaluated		-		-		1,213		608		701		250		-		-		2,772
Collectively evaluated		2,444		13,983		627		3,984		6,163		1,235		668		38		29,142
Ending Balance, September 30, 2023		2,444		13,983		1,840		4,592		6,864		1,485		668		38		31,914

Loans Receivables:
Individually evaluated		355		21,945		5,569		3,473		4,064		250		212		-		35,868
Collectively evaluated		251,490		2,327,719		102,635		176,867		257,071		101,008		65,834		3,647		3,286,271
Total Gross Loans:	$	251,845	$	2,349,664	$	108,204	$	180,340	$	261,135	$	101,258	$	66,046	$	3,647	$	3,322,139

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.


	Residential			Commercial & Multi-family ⁽¹⁾	Cannabis Related ⁽²⁾		Construction ⁽¹⁾		Commercial Business ⁽¹⁾⁽³⁾			Business Express		Home Equity⁽⁴⁾	Consumer		Unallocated		Total
Allowance for credit losses on loans:
Ending Balance December 31, 2022	$	2,474	$	21,381	$	402	$	2,073	$	4,482	$	872	$	485	$	24	$	180	$	32,373
Effect of adopting ASU No. 2016-13 ("CECL")		144		(6,953)		(145)		1,369		1,727		(316)		182		7		(180)		(4,165)
Beginning Balance, January 1, 2023	$	2,618	$	14,428	$	257	$	3,442	$	6,209	$	556	$	667	$	31	$	-	$	28,208

Charge-offs:		-		-		-		-		(1)		(554)		-		-		-		(555)
Recoveries:		38		-		-		-		30		-		16		-		-		84
Provision (benefit):		(212)		(445)		1,583		1,150		626		1,483		(15)		7		-		4,177
Ending Balance, September 30, 2023	$	2,444	$	13,983	$	1,840	$	4,592	$	6,864	$	1,485	$	668	$	38	$	-	$	31,914

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

‎

Note 7 - Loans Receivable and Allowance for Credit Losses (Continued)

The following table sets forth the activity in the allowance for credit losses on loans and amount recorded in loans receivable at and for the year ended December 31, 2024. The table also details the amount of total loans receivable that are evaluated individually and collectively, and the related portion of the allowance for credit losses that is allocated to each loan class (in thousands):


	Residential			Commercial & Multi-family⁽¹⁾	Cannabis ‎ Related ⁽²⁾		Construction ⁽¹⁾		Commercial ‎Business^{(1) (3)}		Business Express		Home ‎ Equity ⁽⁴⁾		Consumer		Total
Allowance for credit losses on loans:
Beginning Balance, January 1, 2024	$	2,344	$	15,343	$	2,344	$	3,758	$	4,508	$	4,542	$	691	$	78	$	33,608

Charge-offs:		-		(531)		-		-		(1,799)		(8,038)		-		(467)		(10,835)
Recoveries:		48		-		-		-		371		27		-		-		446
Provision (benefit):		(445)		(4,361)		(731)		(1,856)		7,417		11,238		(97)		405		11,570
Ending Balance, December 31, 2024	$	1,947	$	10,451	$	1,613	$	1,902	$	10,497	$	7,769	$	594	$	16	$	34,789

Ending Balance attributable to loans:
Individually evaluated	$	-	$	1,473	$	-	$	-	$	4,725	$	5,619	$	-	$	-	$	11,817
Collectively evaluated		1,947		8,978		1,613		1,902		5,772		2,150		594		16		22,972
Ending Balance, December 31, 2024	$	1,947	$	10,451	$	1,613	$	1,902	$	10,497	$	7,769	$	594	$	16	$	34,789

Loans Receivables:
Individually evaluated	$	853	$	64,735	$	-	$	586	$	11,163	$	5,619	$	443	$	-	$	83,399
Collectively evaluated		239,017		2,091,194		103,206		130,003		231,076		87,328		66,326		2,235		2,950,385
Total Gross Loans:	$	239,870	$	2,155,929	$	103,206	$	130,589	$	242,239	$	92,947	$	66,769	$	2,235	$	3,033,784

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

Note 7 - Loans Receivable and Allowance for Credit Losses (Continued)

The following tables present the activity in the allowance for credit losses on off-balance sheet exposures for the three and nine months ended September 30, 2025, 2024, and 2023.


	Three Months Ended September 30,
		2025		2024		2023
Allowance for credit losses on off-balance sheet exposures:
Beginning balance	$	687	$	759	$	254
(Benefit) Provision for credit losses		(207)		(288)		148
Balance at September 30	$	480	$	471	$	402


	Nine Months Ended September 30,
		2025		2024		2023
Allowance for credit losses on off-balance sheet exposures:
Beginning Balance	$	813	$	694	$	-
Impact of adopting ASU No. 2016-13 ("CECL") effective January 1, 2023		-		-		1,266
Benefit for credit losses		(333)		(223)		(864)
Balance at September 30	$	480	$	471	$	402

The following table sets forth the delinquency status of total loans receivable as of September 30, 2025:


													Loans Receivable
					Greater Than								>90 Days
	30-59 Days		60-90 Days		90 Days		Total Past				Total Loans		Past Due
	Past Due		Past Due		Past Due		Due		Current		Receivable		and Accruing
		(In Thousands)

Residential one-to-four family	$	4,779	$	-	$	302	$	5,081	$	222,059	$	227,140	$	-
Commercial and multi-family ⁽¹⁾		28,596		19,044		62,580		110,220		1,969,868		2,080,088		-
Cannabis related⁽²⁾		-		-		-		-		69,102		69,102		-
Construction ⁽¹⁾		14,996		13,996		2,310		31,302		74,678		105,980		-
Commercial business ^{(1) (3)}		3,633		1,238		16,164		21,035		171,727		192,762		-
Business express		2,344		599		1,115		4,058		74,195		78,253		244
Home equity ⁽⁴⁾		1,831		-		479		2,310		71,256		73,566		36
Consumer		-		-		-		-		2,042		2,042		-
Total	$	56,179	$	34,877	$	82,950	$	174,006	$	2,654,927	$	2,828,933	$	280

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

The following table sets forth the delinquency status of total loans receivable at December 31, 2024:


													Loans Receivable
					Greater Than								>90 Days
	30-59 Days		60-90 Days		90 Days		Total Past				Total Loans		Past Due
	Past Due		Past Due		Past Due		Due		Current		Receivable		and Accruing
		(In Thousands)

Residential one-to-four family	$	3,229	$	-	$	302	$	3,531	$	236,339	$	239,870	$	-
Commercial and multi-family ⁽¹⁾		8,279		2,673		30,903		41,855		2,114,074		2,155,929		6,049
Cannabis related ⁽²⁾		-		-		-		-		103,206		103,206
Construction ⁽¹⁾		-		1,829		586		2,415		128,174		130,589		-
Commercial business ^{(1) (3)}		9,125		580		3,795		13,500		228,739		242,239		-
Business express		6,714		3,452		3,141		13,307		79,640		92,947		1,677
Home equity ⁽⁴⁾		1,846		18		231		2,095		64,674		66,769		-
Consumer		-		-		-		-		2,235		2,235		-
Total	$	29,193	$	8,552	$	38,958	$	76,703	$	2,957,081	$	3,033,784	$	7,726

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

‎

Note 7 - Loans Receivable and Allowance for Credit Losses (Continued)

Modifications

The following tables present the amortized cost basis at September 30, 2025 and 2024 of loans modified to borrowers experiencing financial difficulty that were modified during the three and nine months ended September 30, 2025 and 2024 by loan category and type of concession granted.


	For the Three Months Ended September 30, 2025
	(In Thousands)
		Number		Payment Delay		Term Extension		Rate Reduction & Term Extension		Total Principal	% of Total Class of Financing Receivable
Residential		1	$	168	$	-	$	-	$	168	0.07	%
Commercial business		2		-		-		674		674	0.35
Business express		10		-		2,096		-		2,096	2.68
Total loans		13	$	168	$	2,096	$	674	$	2,938


	For the Three Months Ended September 30, 2024
	(In Thousands)
		Number		Payment Delay		Term Extension		Total Principal	% of Total Class of Financing Receivable
Business express		114	$	-	$	25,688	$	25,688	25.96	%
Total loans		114	$	-	$	25,688	$	25,688


	For the Nine Months Ended September 30, 2025
	(In Thousands)
		Number		Payment Delay		Term Extension		Rate Reduction & Term Extension		Total Principal	% of Total Class of Financing Receivable
Residential		1	$	168	$	-	$	-	$	168	0.07	%
Commercial & multi-family		1		-		25,643		-		25,643	1.23
Commercial business		7		-		985		1,021		2,006	1.04
Business express		96		-		21,064		-		21,064	26.92
Total loans		105	$	168	$	47,692	$	1,021	$	48,881


	For the Nine Months Ended September 30, 2024
	(In Thousands)
		Number		Payment Delay		Term Extension		Total Principal	% of Total Class of Financing Receivable
Residential one-to-four family		1	$	174	$	-	$	174	0.07	%
Business express		194		-		43,027		43,027	43.48
Total loans		195	$	174	$	43,027	$	43,201	1.38

The following tables present loan modifications made during the nine months ended September 30, 2025 and 2024 by payment status.


	For the Nine Months Ended September 30, 2025
	(In Thousands)
		Current		30-59 Days Past Due		60-90 Days Past Due		Non-accrual		Total
Residential	$	-	$	-	$	-	$	168	$	168
Commercial & multi-family		25,643		-		-		-		25,643
Commercial business		1,086		-		-		920		2,006
Business express		19,924		491		-		649		21,064
Total	$	46,653	$	491	$	-	$	1,737	$	48,881


	For the Nine Months Ended September 30, 2024
	(In Thousands)
		Current		30-59 Days Past Due		60-90 Days Past Due		Non-accrual		Total
Residential one-to-four family	$	174	$	-	$	-	$	-	$	174
Business express		42,581		249		-		197		43,027
Total	$	42,755	$	249	$	-	$	197	$	43,201

The Company monitors the performance of loans modified to borrowers experiencing financial difficulty to understand the effectiveness of the modification efforts.

For modified loans, a subsequent payment default occurs after management evaluates a borrower’s financial condition subsequent to modification and upon evaluating facts and circumstances determines the borrower is not adhering to the terms of the modification but no later than when a principal or interest payment is 90 days past due or the loan has been classified into non-accrual status during the reporting period.

Of the loans modified during the preceding twelve months, there were eight Business express loans with a combined balance of $1.3 million that subsequently defaulted and were charged-off in full. There were two Commercial business loans with combined balances of $1.5 million that subsequently defaulted of which $1.0 million were partially charged-off.

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 September 30, 2025 and December 31, 2024, 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 September 30, 2025 and December 31, 2024, 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 non-accrual status for a minimum of six months until the borrower has demonstrated their ability to satisfy the terms of the loan.


	As of September 30, 2025
	(in Thousands)
		Non-accrual loans with an Allowance for Credit Losses		Non-accrual loans without an Allowance for Credit Losses		Total Non-accrual loans		Amortized Cost of Loans Past due 90 days and Still Accruing
Residential one-to-four family	$	-	$	1,410	$	1,410	$	-
Commercial and multi-family ⁽¹⁾		5,993		64,553		70,546		-
Cannabis related ⁽²⁾		-		-		-		-
Construction ⁽¹⁾		262		2,048		2,310		-
Commercial business ^{(1) (3)}		8,675		8,767		17,442		-
Business express loans		1,335		-		1,335		244
Home equity ⁽⁴⁾		-		474		474		36
Consumer		-		-		-		-
Total	$	16,265	$	77,252	$	93,517	$	280

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.


	As of December 31, 2024
	(in Thousands)
		Non-accrual loans with an Allowance for Credit Losses		Non-accrual loans without an Allowance for Credit Losses		Total Non-accrual loans		Amortized Cost of Loans Past due 90 days and Still Accruing
Residential one-to-four family	$	534	$	853	$	1,387	$	-
Commercial and multi-family ⁽¹⁾		4,823		28,151		32,974		6,049
Cannabis related ⁽²⁾		-		-		-		-
Construction ⁽¹⁾		-		586		586		-
Commercial business ^{(1) (3)}		5,208		2,425		7,633		-
Business express loans		1,706		191		1,897		1,677
Home equity ⁽⁴⁾		-		231		231		-
Total	$	12,271	$	32,437	$	44,708	$	7,726

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

Had non-accrual loans been performing in accordance with their original terms, the interest income recognized for the nine months ended September 30, 2025, 2024, and 2023 would have been $4.4 million, $2.2 million, and $1.5 million, respectively. Interest income recognized on loans returned to accrual was $2.1 million, $1.1 million, and $2.4 million, for the nine months ended September 30, 2025, 2024, and 2023, respectively. The Bank has not committed to lend additional funds to the borrowers whose loans have been placed on non-accrual status. There were $280,000 and $7.7 million in loans that were more than ninety days past due and still accruing interest at September 30, 2025 and December 31, 2024, respectively.

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 September 30, 2025 and gross charge-offs for the nine months ended September 30, 2025.


Loans by Year of Origination at September 30, 2025
		2025		2024		2023		2022		2021		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
Residential one-to-four family
Pass	$	6,857	$	11,942	$	15,785	$	46,097	$	35,199	$	109,488	$	-	$	-	$	225,368
Special Mention		-		-		-		-		-		650		-		-		650
Substandard		-		-		-		-		-		1,122		-		-		1,122
Total one-to-four family	$	6,857	$	11,942	$	15,785	$	46,097	$	35,199	$	111,260	$	-	$	-	$	227,140

Commercial and multi-family ⁽¹⁾
Pass	$	44,221	$	8,321	$	177,928	$	570,046	$	140,743	$	798,587	$	9,810	$	-	$	1,749,656
Special Mention		-		-		967		91,216		16,277		43,544		-		-		152,004
Substandard		-		-		672		57,316		39,509		80,791		140		-		178,428
Total Commercial and multi-family	$	44,221	$	8,321	$	179,567	$	718,578	$	196,529	$	922,922	$	9,950	$	-	$	2,080,088

Cannabis related ⁽²⁾
Pass	$	-	$	-	$	-	$	26,105	$	2,084	$	8,023	$	8,050	$	-	$	44,262
Special Mention		-		-		19,084		-		4,845		-		911		-		24,840
Substandard		-		-		-		-		-		-		-		-		-
Total Cannabis related	$	-	$	-	$	19,084	$	26,105	$	6,929	$	8,023	$	8,961	$	-	$	69,102

Construction ⁽¹⁾
Pass	$	917	$	2,419	$	30,854	$	24,052	$	-	$	-	$	5,024	$	-	$	63,266
Special Mention		-		-		2,098		16,322		6,989		-		-		-		25,409
Substandard		-		-		-		1,723		14,996		586		-		-		17,305
Total Construction	$	917	$	2,419	$	32,952	$	42,097	$	21,985	$	586	$	5,024	$	-	$	105,980

Commercial business^{(1) (3)}
Pass	$	-	$	7,496	$	2,004	$	5,085	$	747	$	25,183	$	108,442	$	-	$	148,957
Special Mention		-		-		-		-		1,458		2,383		11,870		-		15,711
Substandard		-		-		-		-		-		6,674		21,420		-		28,094
Total Commercial business	$	-	$	7,496	$	2,004	$	5,085	$	2,205	$	34,240	$	141,732	$	-	$	192,762

Business express
Pass	$	-	$	-	$	-	$	-	$	-	$	-	$	193	$	73,435	$	73,628
Special Mention		-		-		-		-		-		-		-		1,792		1,792
Substandard		-		-		-		-		-		-		649		2,184		2,833
Total Business express	$	-	$	-	$	-	$	-	$	-	$	-	$	842	$	77,411	$	78,253

Home equity ⁽⁴⁾
Pass	$	959	$	250	$	3,386	$	1,326	$	415	$	5,269	$	56,913	$	4,211	$	72,729
Special Mention		-		-		-		-		-		46		317		-		363
Substandard		-		-		-		-		-		81		31		362		474
Total Home equity	$	959	$	250	$	3,386	$	1,326	$	415	$	5,396	$	57,261	$	4,573	$	73,566

Consumer
Pass	$	237	$	297	$	1,081	$	334	$	3	$	84	$	6	$	-	$	2,042
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Total Consumer	$	237	$	297	$	1,081	$	334	$	3	$	84	$	6	$	-	$	2,042

Total Loans	$	53,191	$	30,725	$	253,859	$	839,622	$	263,265	$	1,082,511	$	223,776	$	81,984	$	2,828,933

Gross charge-offs	$	-	$	-	$	-	$	12,913	$	263	$	1,087	$	8,738	$	4,721	$	27,722

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.

‎

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 and gross charge-offs for the year ended December 31, 2024.


Loans by Year of Origination at December 31, 2024
		2024		2023		2022		2021		2020		Prior		Revolving Loans		Revolving Loans to Term Loans		Total
Residential one-to-four family
Pass	$	12,059	$	16,586	$	47,544	$	37,639	$	28,550	$	92,376	$	-	$	-	$	234,754
Special Mention		-		-		3,555		-		-		174		-		-		3,729
Substandard		-		-		301		173		-		913		-		-		1,387
Total one-to-four family	$	12,059	$	16,586	$	51,400	$	37,812	$	28,550	$	93,463	$	-	$	-	$	239,870

Commercial and multi-family ⁽¹⁾
Pass	$	9,105	$	183,547	$	604,868	$	154,968	$	158,029	$	709,239	$	2,610	$	-	$	1,822,366
Special Mention		-		-		108,076		37,600		9,232		47,756		140		-		202,804
Substandard		-		10,115		33,958		13,027		11,782		61,877		-		-		130,759
Total Commercial and multi-family	$	9,105	$	193,662	$	746,902	$	205,595	$	179,043	$	818,872	$	2,750	$	-	$	2,155,929

Cannabis related ⁽²⁾
Pass	$	-	$	19,384	$	26,626	$	2,129	$	8,213	$	-	$	6,863	$	-	$	63,215
Special Mention		-		9,761		24,636		4,844		-		-		750		-		39,991
Substandard		-		-		-		-		-		-		-		-		-
Total Cannabis related	$	-	$	29,145	$	51,262	$	6,973	$	8,213	$	-	$	7,613	$	-	$	103,206

Construction ⁽¹⁾
Pass	$	4	$	34,906	$	37,624	$	-	$	-	$	-	$	5,824	$	-	$	78,358
Special Mention		-		1,521		3,792		42,330		3,745		-		-		-		51,388
Substandard		-		257		-		-		586		-		-		-		843
Total Construction	$	4	$	36,684	$	41,416	$	42,330	$	4,331	$	-	$	5,824	$	-	$	130,589

Commercial business ^{(1) (3)}
Pass	$	-	$	2,477	$	266	$	475	$	3,711	$	28,902	$	156,581	$	663	$	193,075
Special Mention		-		8,874		-		1,878		194		4,835		19,548		409		35,738
Substandard		-		-		-		-		-		5,884		7,542		-		13,426
Total Commercial business	$	-	$	11,351	$	266	$	2,353	$	3,905	$	39,621	$	183,671	$	1,072	$	242,239

Business express
Pass	$	-	$	-	$	-	$	-	$	-	$	-	$	23,739	$	59,189	$	82,928
Special Mention		-		-		-		-		-		-		1,506		2,894		4,400
Substandard		-		-		-		-		-		-		3,082		2,537		5,619
Total Business express	$	-	$	-	$	-	$	-	$	-	$	-	$	28,327	$	64,620	$	92,947

Home equity ⁽⁴⁾
Pass	$	300	$	3,767	$	1,369	$	501	$	549	$	5,754	$	51,829	$	2,186	$	66,255
Special Mention		-		-		-		-		-		18		-		-		18
Substandard		-		-		53		-		81		-		-		362		496
Total Home equity	$	300	$	3,767	$	1,422	$	501	$	630	$	5,772	$	51,829	$	2,548	$	66,769

Consumer
Pass	$	623	$	1,117	$	389	$	5	$	95	$	-	$	6	$	-	$	2,235
Special Mention		-		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-		-
Total Consumer	$	623	$	1,117	$	389	$	5	$	95	$	-	$	6	$	-	$	2,235

Total Loans	$	22,091	$	292,312	$	893,057	$	295,569	$	224,767	$	957,728	$	280,020	$	68,240	$	3,033,784

Gross charge-offs	$	446	$	20	$	-	$	174	$	-	$	1,133	$	8,381	$	681	$	10,835

(1) Excludes Cannabis related loans.

(2) Includes Commercial and multi-family, Construction, and Commercial business loans to borrowers involved in the cannabis industry.

(3) Excludes Business express loans.

(4) Includes Home equity lines of credit.