XML 24 R10.htm IDEA: XBRL DOCUMENT

Loans Receivable Held for Investment

12 Months Ended

Dec. 31, 2024

Loans Receivable Held for Investment [Abstract]

Note 4 – Loans Receivable Held for Investment

Loans receivable held for investment were as follows as of the periods indicated:

	December 31, 2024			December 31, 2023
	(In thousands)
Real estate:
Single-family	$	23,566		$	24,702
Multi-family		633,306			561,447
Commercial real estate		156,155			119,436
Church		9,470			12,717
Construction		80,948			89,887
Commercial – other		70,596			63,450
SBA loans ⁽¹⁾		1,142			14,954
Consumer		13			13
Gross loans receivable before deferred loan costs and premiums		975,196			886,606
Unamortized net deferred loan costs and premiums		2,116			1,971
		977,312			888,577
Credit and interest marks on purchased loans, net		(348	)		(772	)
Allowance for credit losses		(8,103	)		(7,348	)
Loans receivable, net	$	968,861		$	880,457

⁽¹⁾	Including Paycheck Protection Program (PPP) loans.

The Company accounts for credit losses on loans in accordance with ASC 326, which requires the Company to recognize estimates for lifetime losses on loans and off-balance sheet loan commitments at the time of origination or acquisition. The recognition of losses at origination or acquisition represents the Company’s best estimate of the lifetime expected credit loss associated with a loan given the facts and circumstances associated with the particular loan, and involves the use of significant management judgment and estimates, which are subject to change based on management’s on-going assessment of the credit quality of the loan portfolio and changes in economic forecasts used in the model. The Company uses the WARM method when determining estimates for the ACL for each of its portfolio segments. The weighted average remaining life, including the effect of estimated prepayments, is calculated for each loan pool on a quarterly basis. The Company then estimates a loss rate for each pool using both its own historical loss experience and the historical losses of a group of peer institutions during the period from 2004 through the most recent quarter.

The Company’s ACL model also includes adjustments for qualitative factors, where appropriate. Qualitative adjustments may include, but are not limited to factors such as: (i) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices; (ii) changes in international, national, regional, and local conditions; (iii) changes in the nature and volume of the portfolio and terms of loans; (iv) changes in the experience, depth, and ability of lending management; (v) changes in the volume and severity of past due loans and other similar conditions; (vi) changes in the quality of the organization’s loan review system; (vii) changes in the value of underlying collateral for collateral dependent loans; (viii) the existence and effect of any concentrations of credit and changes in the levels of such concentrations; and (ix) the effect of other external factors (i.e., competition, legal and regulatory requirements) on the level of estimated credit losses. These qualitative factors incorporate the concept of reasonable and supportable forecasts, as required by ASC 326.

The following tables summarize the activity in the allowance for credit losses on loans for the periods indicated:

	For the Year Ended December 31, 2024
	Beginning Balance			Charge-offs			Recoveries			Provision (Recapture)				Ending Balance
	(In thousands)
Loans receivable held for investment:
Real estate:
Single-family		$	260		$	–		$	–		$	(64	)		$	196
Multi-family			4,413			–			–			155				4,568
Commercial real estate			1,094			–			–			35				1,129
Church			72			–			–			(18	)			54
Construction			932			–			–			543				1,475
Commercial - other			529			–			–			141				670
SBA loans			48			–			–			(37	)			11
Consumer			–			–			–			–				–
Total		$	7,348		$	–		$	–		$	755			$	8,103

	For the Year Ended December 31, 2023
	Beginning Balance			Impact of CECL Adoption			Charge-offs			Recoveries			Provision (Recapture)				Ending Balance
	(In thousands)
Loans receivable held for investment:
Real estate:
Single-family		$	109	$	214			$	–		$	–		$	(63	)		$	260
Multi-family			3,273		603				–			109			428				4,413
Commercial real estate			449		466				–			107			72				1,094
Church			65		37				–			–			(30	)			72
Construction			313		219				–			–			400				932
Commercial - other			175		254				–			–			100				529
SBA loans			–		20				–			–			28				48
Consumer			4		(4	)			–			–			–				–
Total		$	4,388	$	1,809			$	–		$	216		$	935			$	7,348

The Company also recorded a recovery of provision for off-balance sheet loan commitments of $91 thousand and $2 thousand for the years ended December 31, 2024 and 2023, respectively.

The ACL increased to $8.1 million as of December 31, 2024, compared to $7.3 million as of December 31, 2023, primarily due to growth in the loan portfolio.

The Company evaluates loans collectively for purposes of determining the ACL in accordance with ASC 326. Collective evaluation is based on aggregating loans deemed to possess similar risk characteristics. In certain instances, the Company may identify loans that it believes no longer possess risk characteristics similar to other loans in the loan portfolio. These loans are typically identified from those that have exhibited deterioration in credit quality, since the specific attributes and risks associated with such loans tend to become unique as the credit deteriorates. Such loans are typically nonperforming, downgraded to substandard or worse, and/or are deemed collateral dependent, where the ultimate repayment of the loan is expected to come from the operation of or eventual sale of the collateral. Loans that are deemed by management to no longer possess risk characteristics similar to other loans in the portfolio, or that have been identified as collateral dependent, are evaluated individually for purposes of determining an appropriate lifetime ACL. The Company uses the remaining life approach, using the loan’s effective interest rate, for determining the ACL on individually evaluated loans, unless the loan is deemed collateral dependent, which requires evaluation based on the estimated fair value of the underlying collateral, less estimated selling costs. The Company may increase or decrease the ACL for collateral dependent loans based on changes in the estimated fair value of the collateral.

The following tables present collateral dependent loans by collateral type as of the date indicated:

December 31, 2024

Single-Family

Multi-Family

Residential

Church

Business

Assets

Total

Real estate:

(In thousands)

Single-family

–

Multi-family

–

Commercial real estate

–

Church

–

SBA loans

264

–

264

Total

264

–

264

	December 31, 2023
	Single-Family		Multi-Family Residential		Church		Business Assets		Total
Real estate:	(In thousands)
Single-family	$	45	$	–	$	–	$	–	$	45
Multi-family		–		5,672		–		–		5,672
Commercial real estate		–		–		65		–		65
Church		–		–		391		–		391
Commercial – other		–		–		–		268		268
Total	$	45	$	5,672	$	456	$	268	$	6,441

At December 31, 2024, one $264 thousand individually evaluated loan was evaluated based on the estimated fair value of the underlying collateral. This loan had no associated ACL as of December 31, 2024 and was on nonaccrual status.

At December 31, 2023, $6.4 million of individually evaluated loans were evaluated based on the estimated fair value of the underlying collateral. These loans had an associated ACL of $112 thousand as of December 31, 2023. None of these collateral dependent loans were on nonaccrual status at December 31, 2023. At December 31, 2023, no individually evaluated loans were evaluated using a discounted future cash flow approach.

Past Due Loans

The following tables present the aging of the recorded investment in past due loans by loan type as of the periods indicated:

	December 31, 2024
	30‑59 Days Past Due		60‑89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Loans receivable held for investment:
Real estate:
Single-family	$	–	$	6	$	–	$	6	$	23,572	$	23,578
Multi-family		–		–		–		–		636,259		636,259
Commercial real estate		–		–		–		–		156,076		156,076
Church		–		–		–		–		9,475		9,475
Construction		–		–		–		–		80,488		80,488
Commercial - other		–		–		–		–		70,281		70,281
SBA loans		–		264		–		264		878		1,142
Consumer		–		–		–		–		13		13
Total	$	–	$	270	$	–	$	270	$	977,042	$	977,312

	December 31, 2023
	30‑59 Days Past Due		60‑89 Days Past Due		Greater than 90 Days Past Due		Total Past Due		Current		Total
	(In thousands)
Loans receivable held for investment:
Real estate:
Single-family	$	–	$	–	$	–	$	–	$	24,702	$	24,702
Multi-family		–		401		–		401		563,017		563,418
Commercial real estate		–		–		–		–		119,436		119,436
Church		–		–		–		–		12,717		12,717
Construction		–		–		–		–		89,887		89,887
Commercial - other		–		–		–		–		63,450		63,450
SBA loans		379		–		–		379		14,575		14,954
Consumer		–		–		–		–		13		13
Total	$	379	$	401	$	–	$	780	$	887,797	$	888,577

The following table presents the recorded investment in non‑accrual loans by loan type as of the period indicated:

December 31, 2024	Nonaccrual with no Allowance for Credit Losses		Nonaccrual with an Allowance for Credit Losses			Total Nonaccrual Loans
Loans receivable held for investment:			(In thousands)

SBA loans	$	264		$	–	$	264
Total non-accrual loans	$	264		$	–	$	264

There were no non-accrual loans as of December 31, 2023.

There were no loans 90 days or more delinquent that were accruing interest as of December 31, 2024 or December 31, 2023. None of the non-accrual loans were delinquent.

Modified Loans to Troubled Borrowers

GAAP requires that certain types of modifications of loans in response to a borrower’s financial difficulty be reported, which consist of the following: (i) principal forgiveness, (ii) interest rate reduction, (iii) other-than-insignificant payment delay, (iv) term extension, or (v) any combination of the foregoing. The ACL for loans that were modified in response to a borrower’s financial difficulty is measured on a collective basis, as with other loans in the loan portfolio, unless management determines that such loans no longer possess risk characteristics similar to others in the loan portfolio. In those instances, the ACL for such loans is determined through individual evaluation.

The following table presents the amortized costs basis as of December 31, 2024 and the financial effect of loans modified to borrowers experiencing financial difficulty during the year ended December 31, 2024. There were no loan modifications to borrowers that were experiencing financial difficulty during the year ended December 31, 2023.

	December 31, 2024
	Term Extension			Percentage of Total Loan Type			Weighted Average Term Extension
	(In Thousands)
Real estate:
Commercial real estate		$	792		0.51	%	12 months
Construction			4,559		5.66	%	17 months
Commercial - other			572		1.28	%	14 months
Total		$	5,923

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. For single-family residential, consumer and other smaller balance homogenous loans, a credit grade is established at inception, and generally only adjusted based on performance. Information about payment status is disclosed elsewhere herein. The Company analyzes all other loans individually by classifying the loans as to credit risk. This analysis is performed at least on an annual basis. The Company uses the following definitions for risk ratings:

●

Watch. Loans classified as watch exhibit weaknesses that could threaten the current net worth and paying capacity of the obligors. Watch graded loans are generally performing and are not more than 59 days past due. A watch rating is used when a material deficiency exists, but correction is anticipated within an acceptable time frame.

●

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention that appears short-term in nature. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

●

Substandard. Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well‑defined weakness or weaknesses that jeopardizes the liquidation of the debt. They are characterized by the distinct possibility that the institution may sustain some loss if the deficiencies are not corrected.

●

Doubtful. Loans classified as doubtful have all the weaknesses inherent in those classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, based on currently existing facts, conditions, and values, highly questionable and improbable.

●

Loss. Loans classified as loss are considered uncollectible and of such little value that to continue to carry the loan as an active asset is no longer warranted.

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Pass rated loans are generally well protected by the current net worth and paying capacity of the obligor and/or by the value of the underlying collateral. Pass rated loans are not more than 59 days past due and are generally performing in accordance with the loan terms.

The following table stratifies the loans held for investment portfolio by the Company’s internal risk grading, and by year of origination as of the date indicated:

	Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2024
	2024		2023		2022		2021		2020		Prior		Revolving Loans		Total
	(In thousands)
Single-family:
Pass	$	–	$	543	$	4,051	$	1,809	$	1,664	$	13,597	$	–	$	21,664
Watch		–		–		–		729		1,185		–		–		1,914
Total	$	–	$	543	$	4,051	$	2,538	$	2,849	$	13,597	$	–	$	23,578

Multi-family:
Pass	$	81,474	$	77,739	$	171,836	$	126,386	$	26,771	$	89,581	$	–	$	573,787
Watch		–		5,633		15,731		14,761		–		10,480		–		46,605
Special Mention		–		–		3,227		3,150		–		–		–		6,377
Substandard		–		1,446		–		4,457		–		3,587		–		9,490
Total	$	81,474	$	84,818	$	190,794	$	148,754	$	26,771	$	103,648	$	–	$	636,259

Commercial real estate:
Pass	$	49,143	$	9,655	$	20,841	$	28,653	$	21,150	$	19,561	$	–	$	149,003
Watch		–		1,584		432		994		–		792		–		3,802
Substandard		–		3,271		–		–		–		–		–	$	3,271
Total	$	49,143	$	14,510	$	21,273	$	29,647	$	21,150	$	20,353	$	–	$	156,076

Church:
Pass	$	–	$	2,442	$	–	$	2,148	$	1,696	$	1,002	$	–	$	7,288
Watch		–		376		–		–		–		618		–		994
Substandard		–		–		–		–		–		1,193		–		1,193
Total	$	–	$	2,818	$	–	$	2,148	$	1,696	$	2,813	$	–	$	9,475

Construction:
Watch	$	8,876	$	29,390	$	227	$	–	$	–	$	2,038	$	–	$	40,531
Substandard		–		4,076		31,823		4,058		–		–		–		39,957
Total	$	8,876	$	33,466	$	32,050	$	4,058	$	–	$	2,038	$	–	$	80,488

Commercial – other:
Pass	$	1	$	3	$	7,575	$	–	$	2,768	$	4,590	$	–	$	14,937
Watch		17,444		28,157		706		–		–		1,197		–		47,504
Special Mention		–		–		351		–		–		2,250		–		2,601
Substandard		–		–		–		106		571		4,562		–		5,239
Total	$	17,445	$	28,160	$	8,632	$	106	$	3,339	$	12,599	$	–	$	70,281

SBA:
Pass	$	590	$	–	$	–	$	–	$	–	$	64	$	–	$	654
Substandard		–		–		150		–		338		–		–		488
Total	$	590	$	–	$	150	$	–	$	338	$	64	$	–	$	1,142

Consumer:
Pass	$	13	$	–	$	–	$	–	$	–	$	–	$	–	$	13
Total	$	13	$	–	$	–	$	–	$	–	$	–	$	–	$	13

Total loans:
Pass	$	131,221	$	90,382	$	204,303	$	158,996	$	54,049	$	128,395	$	–	$	767,346
Watch		26,320		65,140		17,096		16,484		1,185		15,125		–		141,350
Special Mention		–		–		3,578		3,150		–		2,250		–		8,978
Substandard		–		8,793		31,973		8,621		909		9,342		–		59,638
Total loans	$	157,541	$	164,315	$	256,950	$	187,251	$	56,143	$	155,112	$	–	$	977,312

	Term Loans Amortized Cost Basis by Origination Year - As of December 31, 2023
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
	(In thousands)
Single-family:
Pass	$	–	$	2,474	$	1,862	$	2,940	$	1,485	$	12,374	$	–	$	21,135
Watch		–		–		750		–		–		999		–		1,749
Special Mention		–		–		–		–		–		116		–		116
Substandard		–		–		–		1,365		–		337		–		1,702
Total	$	–	$	2,474	$	2,612	$	4,305	$	1,485	$	13,826	$	–	$	24,702

Multi-family:
Pass	$	81,927	$	183,295	$	145,652	$	27,356	$	44,511	$	47,119	$	–	$	529,860
Watch		–		4,686		6,203		–		1,186		6,474		–		18,549
Special Mention		–		–		899		–		–		1,344		–		2,243
Substandard		–		–		–		–		363		12,403		–		12,766
Total	$	81,927	$	187,981	$	152,754	$	27,356	$	46,060	$	67,340	$	–	$	563,418

Commercial real estate:
Pass	$	9,881	$	22,131	$	26,019	$	24,684	$	6,718	$	15,106	$	–	$	104,539
Watch		–		442		–		5,286		–		2,599		–		8,327
Special Mention		–		–		–		–		325		–		–		325
Substandard		–		–		–		–		–		6,245		–		6,245
Total	$	9,881	$	22,573	$	26,019	$	29,970	$	7,043	$	23,950	$	–	$	119,436

Church:
Pass	$	2,923	$	–	$	2,210	$	1,748	$	–	$	2,704	$	–	$	9,585
Watch		–		–		–		–		636		1,525		–		2,161
Substandard		–		–		–		–		–		971		–		971
Total	$	2,923	$	–	$	2,210	$	1,748	$	636	$	5,200	$	–	$	12,717

Construction:
Pass	$	–	$	1,109	$	1,198	$	–	$	–	$	–	$	–	$	2,307
Watch		42,300		35,179		5,484		–		–		2,097		–		85,060
Special Mention		–		–		2,520		–		–		–		–		2,520
Total	$	42,300	$	36,288	$	9,202	$	–	$	–	$	2,097	$	–	$	89,887

Commercial – other:
Pass	$	15,000	$	9,077	$	87	$	5,600	$	–	$	25,154	$	–	$	54,918
Watch		–		312		–		1,500		6,550		–		–		8,362
Special Mention		–		–		170		–		–		–		–		170
Total	$	15,000	$	9,389	$	257	$	7,100	$	6,550	$	25,154	$	–	$	63,450

SBA:
Pass	$	11,809	$	109	$	2,453	$	–	$	16	$	100	$	–	$	14,487
Special Mention		–		–		–		467		–		–		–		467
Total	$	11,809	$	109	$	2,453	$	467	$	16	$	100	$	–	$	14,954

Consumer:
Pass	$	13	$	–	$	–	$	–	$	–	$	–	$	–	$	13
Total	$	13	$	–	$	–	$	–	$	–	$	–	$	–	$	13

Total loans:
Pass	$	121,553	$	218,195	$	179,481	$	62,328	$	52,730	$	102,557	$	–	$	736,844
Watch		42,300		40,619		12,437		6,786		8,372		13,694		–		124,208
Special Mention		–		–		3,589		467		325		1,460		–		5,841
Substandard		–		–		–		1,365		363		19,956		–		21,684
Total loans	$	163,853	$	258,814	$	195,507	$	70,946	$	61,790	$	137,667	$	–	$	888,577

Allowance for Credit Losses for Off-Balance Sheet Commitments

The Company maintains an allowance for credit losses on off-balance sheet commitments related to unfunded loans and lines of credit, which is included in accrued expenses and other liabilities of the consolidated statements of financial condition. The Company applies an expected credit loss estimation methodology for off-balance sheet commitments. This methodology is commensurate with the methodology applied to each respective segment of the loan portfolio in determining the ACL for loans held-for-investment. The loss estimation process includes assumptions for the probability that a loan will fund, as well as the expected amount of funding. These assumptions are based on the Company’s own historical internal loan data.

The allowance for off-balance sheet commitments was $277 thousand and $364 thousand at December 31, 2024 and 2023, respectively. The recovery of credit losses for off-balance sheet commitments was $91 thousand and $2 thousand for the years ended December 31, 2024 and 2023, respectively.