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LOANS RECEIVABLE, NET
 12 Months Ended
Sep. 30, 2025
Loans Receivable, Net [Abstract]  
LOANS RECEIVABLE, NET

NOTE E - LOANS RECEIVABLE, NET

 

Loans receivable, net allowance for credit losses were comprised of the following:

 

   Years Ended September 30, 
   2025   2024 
   (In thousands) 
One-to-four family residential  $242,454   $246,201 
Commercial real estate   533,213    461,319 
Construction and land   29,287    22,722 
Home equity loans and lines of credit   31,778    24,728 
Commercial business   20,048    24,011 
Other   2,119    2,235 
Total loans receivable   858,899    781,216 
Net deferred loan costs   (1,546)   (1,054)
Total loans receivable, net  $857,353   $780,162 

 

Certain directors and executive officers of the Company have loans with the Bank. Such loans were made in the ordinary course of business at the Bank’s normal credit terms, including interest rate and collateralization, and do not represent more than a normal risk of collection. Total loans receivable from directors and executive officers, and affiliates thereof, were approximately $3.2 million at September 30, 2025 and $3.9 million at September 30, 2024. There were $372 thousand and $854 thousand in new loans or advances on existing lines of credit during the year ended September 30, 2025 and 2024, respectively. Total principal repayments and/or reductions due to retirements were approximately $163 thousand and $2.0 million for the year ended September 30, 2025 and 2024, respectively.

 

At September 30, 2025 and 2024, the Company was servicing loans for others amounting to approximately $56.7 million and $50.2 million, respectively. See Note J for additional information.

The segments of the Company’s loan portfolio are disaggregated to a level that allows management to monitor risk and performance. The residential mortgage loan segment is further disaggregated into two classes: first lien, amortizing term loans, and the combination of second lien amortizing term loans and home equity lines of credit. The commercial loan segment is further disaggregated into three classes: loans secured by multifamily structures, loans secured by owner-occupied commercial structures, and loans secured by non-owner occupied, non-residential properties. The construction loan segment consists primarily of developers or investors for the purpose of acquiring, developing and constructing residential or commercial structures and to a lesser extent one-to-four family residential construction loans made to individuals for the acquisition of and/or construction on a lot or lots on which a residential dwelling is to be built. Construction loans to developers and investors have a higher risk profile because the ultimate buyer, once development is completed, is generally not known at the time of the loan. The commercial business loan segment consists of loans made for the purpose of financing the activities of commercial customers and consists of revolving lines of credit and loans partially guaranteed by the U.S. Small Business Administration. The consumer loan segment consists primarily of stock-secured installment loans but also includes unsecured personal loans and overdraft lines of credit connected with customer deposit accounts.

 

Management uses a ten-point internal risk rating system to monitor the credit quality of the overall loan portfolio. The first six categories are considered not criticized and are aggregated as “Pass” rated. The criticized rating categories utilized by management generally follow bank regulatory definitions. The Special Mention category includes assets that are currently protected but are potentially weak, resulting in an undue and unwarranted credit risk, but not to the point of justifying a Substandard classification. Loans in the Substandard category have well-defined weaknesses that jeopardize the liquidation of the debt and have a distinct possibility that some loss will be sustained if the weaknesses are not corrected. Loans classified Doubtful have all the weaknesses inherent in loans classified Substandard with the added characteristic that collection or liquidation in full, on the basis of current conditions and facts, is highly improbable. All loans greater than three months past due are considered Substandard. Any portion of a loan that has been charged off is placed in the Loss category.

 

To help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed, the Company has a structured loan rating process with several layers of internal and external oversight.  Generally, consumer and residential mortgage loans are included in the Pass categories unless a specific action, such as severe delinquency, bankruptcy, repossession, or death occurs to raise awareness of a possible credit event. The Company’s Commercial Loan Officers are responsible for the timely and accurate risk rating of the loans in their portfolios at origination and on an ongoing basis. The Company’s Asset Review Committee performs monthly reviews of all commercial relationships internally rated 6 (“Watch”) or worse. Confirmation of the appropriate risk grade is performed by an external loan review company that semi-annually reviews and assesses loans within the portfolio.  Generally, the external consultant reviews commercial relationships greater than $500 thousand and/or criticized relationships greater than $250 thousand. Detailed reviews, including plans for resolution, are performed on loans classified as Substandard on a monthly basis.

The following tables present the classes of the loan portfolio by origination year summarized by the aggregate Pass and the criticized categories of Special Mention, Substandard and Doubtful for loans subject to the Company’s internal risk rating system and by performing status for all other loans as of September 30, 2025 and 2024.

 

   September 30, 2025   Revolving Loans     
   Term Loans Amortized Cost Basis by Origination Fiscal Year   Amortized   Converted     
   2025   2024   2023   2022   2021   Prior   Cost Basis   to Term   Total 
   (In thousands) 
One-to-four family residential                                    
Performing  $18,873   $31,952   $36,663   $28,465   $23,556   $102,642   $
-
   $
-
   $242,151 
Non-performing   
-
    213    
-
    90    
-
    
-
    
-
    
-
    303 
Total  $18,873   $32,165   $36,663   $28,555   $23,556   $102,642   $
-
   $
-
   $242,454 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Commercial real estate                                             
Pass  $111,456   $86,068   $70,546   $63,905   $54,060   $140,866   $6,110   $
-
   $533,011 
Special Mention   
-
    
-
    
-
    91    
-
    111    
-
    
-
    202 
Substandard   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Doubtful   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $111,456   $86,068   $70,546   $63,996   $54,060   $140,977   $6,110   $
-
   $533,213 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Construction and land                                             
Pass  $10,037   $12,982   $3,405   $
-
   $
-
   $2,863   $
-
   $
-
   $29,287 
Special Mention   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Substandard   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Doubtful   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $10,037   $12,982   $3,405   $
-
   $
-
   $2,863   $
-
   $
-
   $29,287 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Home equity loans and lines of credit                                             
Performing  $492   $1,181   $1,271   $1,523   $265   $1,090   $25,808   $
-
   $31,630 
Non-performing   
-
    
-
    148    
-
    
-
    
-
    
-
    
-
    148 
Total  $492   $1,181   $1,419   $1,523   $265   $1,090   $25,808   $
-
   $31,778 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Commercial business                                             
Pass  $669   $1,195   $465   $2,001   $1,061   $2,270   $12,240   $147   $20,048 
Special Mention   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Substandard   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Doubtful   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $669   $1,195   $465   $2,001   $1,061   $2,270   $12,240   $147   $20,048 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Other                                             
Performing  $464   $18   $
-
   $25   $
-
   $1,423   $189   $
-
   $2,119 
Non-performing   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $464   $18   $
-
   $25   $
-
   $1,423   $189   $
-
   $2,119 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
   September 30, 2024   Revolving Loans     
   Term Loans Amortized Cost Basis by Origination Fiscal Year   Amortized   Converted     
   2024   2023   2022   2021   2020   Prior   Cost Basis   to Term   Total 
   (In thousands) 
One-to-four family residential                                    
Performing  $32,624   $42,084   $31,711   $25,970   $29,976   $83,378   $342   $
-
   $246,085 
Non-performing   
-
    
-
    94    
-
    22    
-
    
-
    
-
    116 
Total  $32,624   $42,084   $31,805   $25,970   $29,998   $83,378   $342   $
-
   $246,201 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Commercial real estate                                             
Pass  $88,597   $84,674   $66,412   $64,573   $29,568   $122,605   $3,718   $932   $461,079 
Special Mention   
-
    
-
    
-
    
-
    
-
    124    
-
    
-
    124 
Substandard   
-
    
-
    
-
    
-
    
-
    116    
-
    
-
    116 
Doubtful   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $88,597   $84,674   $66,412   $64,573   $29,568   $122,845   $3,718   $932   $461,319 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Construction and land                                             
Pass  $5,650   $10,061   $
-
   $
-
   $1,156   $4,069   $1,786   $
-
   $22,722 
Special Mention   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Substandard   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Doubtful   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $5,650   $10,061   $
-
   $
-
   $1,156   $4,069   $1,786   $
-
   $22,722 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Home equity loans and lines of credit                                             
Performing  $1,585   $1,561   $1,600   $309   $247   $1,220   $17,902   $304   $24,728 
Non-performing   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $1,585   $1,561   $1,600   $309   $247   $1,220   $17,902   $304   $24,728 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Commercial business                                             
Pass  $2,062   $507   $2,517   $2,298   $802   $2,565   $13,072   $188   $24,011 
Special Mention   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Substandard   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Doubtful   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $2,062   $507   $2,517   $2,298   $802   $2,565   $13,072   $188   $24,011 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
                                              
Other                                             
Performing  $61   $
-
   $47   $
-
   $9   $1,771   $347   $
-
   $2,235 
Non-performing   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Total  $61   $
-
   $47   $
-
   $9   $1,771   $347   $
-
   $2,235 
Current period gross charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 

Management further monitors the performance and credit quality of the loan portfolio by analyzing the age of the portfolio as determined by the length of time a recorded payment is past due. The Bank was not accruing interest on any loans delinquent 90 days or greater as of September 30, 2025 and 2024. The following table presents the classes of the loan portfolio summarized by the aging categories of performing loans and nonaccrual loans for the periods presented:

 

       30-59   60-89         
       Days   Days   90 Days +   Total 
   Current   Past Due   Past Due   Past Due   Loans 
   (In  thousands) 
September 30, 2025                    
One-to-four family residential  $240,975   $1,016   $160   $303   $242,454 
Commercial real estate   532,867    
-
    346    
-
    533,213 
Construction and land   29,287    
-
    
-
    
-
    29,287 
Home equity loans and lines of credit   31,630    
-
    
-
    148    31,778 
Commercial business   19,913    135    
-
    
-
    20,048 
Other   2,119    
-
    
-
    
-
    2,119 
Total  $856,791   $1,151   $506   $451   $858,899 
                          
September 30, 2024                         
One-to four-family residential  $245,458   $
-
   $627   $116   $246,201 
Commercial real estate   461,203    
-
    
-
    116    461,319 
Construction and land   22,722    
-
    
-
    
-
    22,722 
Home equity loans and lines of credit   24,492    
-
    236    
-
    24,728 
Commercial business   23,870    141    
-
    
-
    24,011 
Other   2,235    
-
    
-
    
-
    2,235 
Total  $779,980   $141   $863   $232   $781,216 

 

The following table presents our non-accrual loans by loan type as of September 30, 2025 and 2024:

 

   90 Days+   Non-Accrual   Non-Accrual 
   Non-Accrual   with ACL   without ACL 
   (In  thousands) 
September 30, 2025            
One-to-four family residential  $303   $
     -
   $303 
Home loans and lines of credit   148    
-
    148 
Total  $451   $
-
   $451 
                
September 30, 2024               
One-to-four family residential  $116   $
-
   $116 
Commercial real estate   116    
-
    116 
Total  $232   $
-
   $232 

 

The following table identifies our non-performing, collateral dependent loans by collateral type as of September 30, 2025 and 2024:

 

   Years Ended September 30, 
   2025   2024 
   (In thousands) 
Real-estate type:    
One- to four-family residential  $303   $116 
Commercial real estate   
-
    116 
Home equity loans and lines of credit   148    
-
 
Total  $451   $232 

The ACL is maintained to absorb losses from the loan portfolio. Management reviews the loan portfolio on a quarterly basis using a defined, consistently applied process in order to make appropriate and timely adjustments to the ACL. When information confirms all or part of specific loans to be uncollectible, these amounts are promptly charged off against the ACL. Since loans individually evaluated for impairment are promptly written down to their fair value, typically there is no portion of the ACL for loans individually evaluated for impairment.

 

The following tables set forth the allocation of the Bank’s ACL by loan category at the dates indicated. The portion of the ACL allocated to each loan category does not represent the total available for future losses which may occur within the loan category since the total ACL is a valuation allocation applicable to the entire loan portfolio. The Company generally charges off the collateral or discounted cash flow deficiency on all loans at 90 days past due and all loans rated substandard or worse that are 90 days past due.

 

The following table presents, by loan category, the changes in the ACL for the year ended September 30, 2025 and 2024.

 

   One-to Four-           Home Equity                 
   Family   Commercial   Construction   Lines of   Commercial             
   Residential   Real Estate   and Land   Credit   Business   Other   Unallocated   Total 
   (In  thousands) 
Balance-September 30, 2023  $1,259   $5,277   $472   $207   $939   $2   $174   $8,330 
Effect of adopting ASU 2016-13   7    (589)   (55)   (87)   (133)   (1)   (174)   (1,032)
Charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Recoveries   1    
-
    65    
-
    2    
-
    
-
    68 
Provision (credit)   (512)   646    142    (90)   (3)   (1)   
-
    182 
Balance-September 30, 2024  $755   $5,334   $624   $30   $805   $
-
   $
-
   $7,548 
Charge-offs   
-
    
-
    
-
    
-
    
-
    
-
    
-
    
-
 
Recoveries   34    
-
    
-
    
-
    115    
-
    
-
    149 
Provision (credit)   49    641    130    10    (178)   2    (1)   653 
Balance-September 30, 2025  $838   $5,975   $754   $40   $742   $2   $(1)  $8,350 

 

During the year ended September 30, 2025, the changes in the ACL for each loan category were primarily due to fluctuations in the outstanding balance of each segment of loans collectively evaluated for impairment. Specifically, we experienced significant growth in our commercial real estate and construction portfolios, partially offset by contraction in our commercial business loans, which require higher provisions for credit loss, during the year ended September 30, 2025.

 

During the year ended September 30, 2025, the Company did not make any loan modifications to borrowers experiencing financial difficulty. There were two residential loans totaling $294 thousand that were in the process of foreclosure at September 30, 2025.

 

Total loans pledged as collateral for Federal Home Loan Bank of New York (“FHLBNY”) borrowings were $466.5 million and $410.6 million as of September 30, 2025 and 2024, respectively.