XML 28 R13.htm IDEA: XBRL DOCUMENT v3.23.3
Loans
 12 Months Ended
Jun. 30, 2023
Loans [Abstract]  
LOANS

NOTE C - LOANS

 

The composition of the loan portfolio at June 30 was as follows:

 

(in thousands)  2023   2022 
Residential real estate        
One- to four-family  $240,076   $216,432 
Multi-family   19,067    14,252 
Construction   12,294    1,363 
Land   470    1,062 
Farm   1,346    1,338 
Nonresidential real estate   30,217    31,441 
Commercial and industrial   1,184    1,006 
Consumer and other          
Loans on deposits   855    891 
Home equity   9,217    7,670 
Automobile   104    117 
Unsecured   611    540 
    315,441    276,112 
Allowance for loan losses   (1,634)   (1,529)
   $313,807   $274,583 

 

The amounts above include net deferred loan fees of $330,000 and $290,000 as of June 30, 2023 and 2022.

The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio class and based on impairment method as of June 30, 2023 and 2022. There were $196,000 and $400,000 in loans acquired with deteriorated credit quality at June 30, 2023 and 2022, respectively.

  

June 30, 2023:

 

(in thousands)  Loans
individually
evaluated		   Loans
acquired with
deteriorated
credit
quality*		   Ending
loans
balance		   Ending
allowance
attributed to
loans		 
Loans individually evaluated for impairment:                
Residential real estate                
One- to four-family  $2,833   $196   $3,029   $
-
 
Nonresidential real estate   1,717    
-
    1,717    
-
 
Home Equity   267    
-
    267    
-
 
    4,817    196    5,013    
-
 
Loans collectivelly evaluated for impairment:                    
Residential real estate                    
One- to four-family            $237,047   $857 
Multi-family             19,067    278 
Construction             12,294    41 
Land             470    1 
Farm             1,346    4 
Nonresidential real estate             28,500    405 
Commercial and industrial             1,184    24 
Consumer and other                    
Loans on deposits             855    1 
Home equity             8,950    24 
Automobile             104    
-
 
Unsecured             611    1 
              310,428    1,634 
             $315,441   $1,634 

 

* These loans were evaluated at acquisition date at their estimated fair value and there has been no subsequent deterioration since acquisition.

 

(in thousands)  Loans
individually
evaluated		   Loans
acquired with
deteriorated
credit
quality*		   Ending
loans
balance		   Ending
allowance
attributed to
loans		 
Loans individually evaluated for impairment:                
Residential real estate                
One- to four-family  $3,221   $400   $3,621   $
-
 
Multi-family   570    
-
    570    
-
 
Farm   270    
-
    270    
-
 
Nonresidential real estate   1,073    
-
    1,073    
-
 
Consumer and other                    
Home equity   87    
-
    87    
-
 
Unsecured   5    
-
    5    
-
 
    5,226    400    5,626    
-
 
Loans collectivelly evaluated for impairment:                    
Residential real estate                    
One- to four-family            $212,811   $800 
Multi-family             13,682    231 
Construction             1,363    4 
Land             1,062    3 
Farm             1,068    5 
Nonresidential real estate             30,368    461 
Commercial and industrial             1,006    2 
Consumer and other                    
Loans on deposits             891    1 
Home equity             7,583    21 
Automobile             117    
-
 
Unsecured             535    1 
              270,486    1,529 
             $276,112   $1,529 

  

* These loans were evaluated at acquisition date at their estimated fair value and there has been no subsequent deterioration since acquisition.

 

The following table presents impaired loans by class of loans as of and for the years ended June 30, 2023 and 2022: 

 

(in thousands)  Unpaid
Principal
Balance and
Recorded
Investment		   Allowance
for Loan
Losses
Allocated		   Average
Recorded
Investment		   Interest
Income
Recognized		   Cash Basis
Income
Recognized		 
                     
June 30, 2023:                    
                     
With no related allowance recorded:                    
Residential real estate                    
One- to four-family  $3,029   $
       -
   $3,325   $161   $161 
Multi-family   
-
    
-
    285    22    22 
Farm   
-
    
-
    135    15    15 
Nonresidential real estate   1,717    
-
    1,395    63    63 
Consumer and other                         
Home equity   267    
-
    177    6    6 
Unsecured   
-
    
-
    2    1    1 
   $5,013   $
-
   $5,319   $268   $268 
                          
June 30, 2022:                         
                          
With no related allowance recorded:                         
Residential real estate                         
One- to four-family  $3,621   $
-
   $3,970   $145   $145 
Multi-family   570    
-
    608    19    19 
Farm   270    
-
    272    16    16 
Nonresidential real estate   1,073    
-
    1,220    59    59 
Consumer and other             -    -    - 
Home equity   87    
-
    52    1    1 
Unsecured   5    
-
    11    
-
    
-
 
   $5,626   $
-
   $6,133   $240   $240 

 

The following tables present the recorded investment in nonaccrual and loans past due over 90 days still on accrual status by class of loans as of June 30, 2023 and 2022. The tables include loans acquired with deteriorated credit quality. At June 30, 2023, the table below includes approximately $197,000 of loans on nonaccrual and no loans past due over 90 days and still accruing of loans acquired with deteriorated credit quality, while at June 30, 2022, approximately $301,000 of loans on nonaccrual and no loans past due over 90 days and still accruing represent such loans.

  

   June 30, 2023   June 30, 2022 
(in thousands)  Nonaccrual   Loans
Past Due
Over 90
Days Still
Accruing		   Nonaccrual   Loans
Past Due
Over 90
Days Still
Accruing		 
                 
Residential real estate                
One- to four-family  $3,028   $365   $3,528   $      287 
Multi-family   
            -
    
        -
    570    
-
 
Farm   
-
    
-
    270    
-
 
Nonresidential real estate   1,013    
-
    1,073    
-
 
Commercial and industrial   
-
    
-
    
-
    1 
Consumer and other                    
Home equity   267    
-
    87    
-
 
Unsecured   
-
    28    3    
-
 
   $4,308   $393   $5,531   $288 

 

One- to four-family loans in process of foreclosure totaled $766,000 and $489,000 at June 30, 2023 and 2022, respectively.

 

Troubled Debt Restructurings:

 

A Troubled Debt Restructuring (“TDR”) is the situation where the Bank grants a concession to the borrower that the Banks would not otherwise have considered due to the borrower’s financial difficulties. All TDRs are considered “impaired.”

 

At June 30, 2023 and 2022, the Company had $464,000 and $1.4 million of loans classified as TDRs, respectively. Of the TDRs at June 30, 2023, approximately 40.3% were related to the borrower’s completion of Chapter 7 bankruptcy proceedings with no reaffirmation of the debt to the Banks.

 

During the year ended June 30, 2023 and 2022, the Company had no loans restructured as TDRs.

 

The Company had no allocated specific reserves to customers whose loan terms have been modified in troubled debt restructurings as of June 30, 2023 or 2022. At June 30, 2023 and 2022, TDR loans on nonaccrual status totaled $430,000 and $1.4 million, respectively. The Company had no commitments to lend additional amounts as of June 30, 2023 and 2022, to customers with outstanding loans that are classified as troubled debt restructurings. The Company had no TDR loans which defaulted during fiscal 2023 or during fiscal 2022.

 

The following tables present the aging of the principal balance outstanding in accruing past due loans as of June 30, 2023 and 2022, by class of loans. The tables include loans acquired with deteriorated credit quality. At June 30, 2023, the table below includes $68,000 in loans 30-89 days past due and approximately $58,000 of loans past due over 90 days that were acquired with deteriorated credit quality, while at June 30, 2022, the table below includes $161,000 in loans 30-89 days past due and approximately $15,000 of loans past due over 90 days of such loans.

 

June 30, 2023: 

 

(in thousands)  30-89 Days
Past Due		   Greater
than 90
Days Past
Due		   Total Past
Due		   Loans Not
Past Due		   Total 
                     
Residential real estate                    
One- to four-family  $3,415   $1,514   $4,929   $235,147   $240,076 
Multi-family   
-
    
-
    
-
    19,067    19,067 
Construction   
-
    
-
    
-
    12,294    12,294 
Land   
-
    
-
    
-
    470    470 
Farm   
-
    
-
    
-
    1,346    1,346 
Nonresidential real estate   662    
-
    662    29,555    30,217 
Commercial and industrial   
-
    28    28    1,156    1,184 
Consumer and other                         
Loans on deposits   
-
    
-
    
-
    855    855 
Home equity   168    267    435    8,782    9,217 
Automobile   
-
    
-
    
-
    104    104 
Unsecured   17    
-
    17    594    611 
   $4,262   $1,809   $6,071   $309,370   $315,441 

 

June 30, 2022:

 

(in thousands)  30-89 Days
Past Due		   Greater
than 90
Days Past
Due		   Total Past
Due		   Loans Not
Past Due		   Total 
                     
Residential real estate                    
One- to four-family  $2,662   $1,326   $3,988   $212,444   $216,432 
Multi-family   
-
    
-
    
-
    14,252    14,252 
Construction   5    
-
    5    1,358    1,363 
Land   
-
    
-
    
-
    1,062    1,062 
Farm   
-
    
-
    
-
    1,338    1,338 
Nonresidential real estate   
-
    
-
    
-
    31,441    31,441 
Commercial and industrial   72    1    73    933    1,006 
Consumer and other                         
Loans on deposits   
-
    
-
    
-
    891    891 
Home equity   188    71    259    7,411    7,670 
Automobile   
-
    
-
    
-
    117    117 
Unsecured   
-
    
-
    
-
    540    540 
   $2,927   $1,398   $4,325   $271,787   $276,112 

 

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. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed on an annual basis. The Company uses the following definitions for risk ratings:

 

Special Mention. Loans classified as special mention have a potential weakness that deserves management’s close attention. 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 jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will 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, on the basis of currently existing facts, conditions and values, highly questionable and improbable.

 

Loans not meeting the criteria above that are analyzed individually as part of the above-described process are considered to be pass rated loans. Loans listed that are not rated are included in groups of homogeneous loans and are evaluated for credit quality based on performing status. See the aging of past due loan table above.  

 

As of June 30, 2023, and 2022, and based on the most recent analysis performed, the risk category of loans by class of loans was as follows:

 

June 30, 2023: 

 

(in thousands)  Pass   Special
Mention		   Substandard   Doubtful 
                 
Residential real estate                
One- to four-family  $234,765   $170   $5,141   $
      -
 
Multi-family   19,067    
-
    
-
    
-
 
Construction   12,294    
-
    
-
    
-
 
Land   470    
-
    
-
    
-
 
Farm   1,346    
-
    
-
    
-
 
Nonresidential real estate   27,816    684    1,717    
-
 
Commercial and industrial   1,184    
-
    
-
    
-
 
Consumer and other                    
Loans on deposits   855    
-
    
-
    
-
 
Home equity   8,879    
-
    338    
-
 
Automobile   104    
-
    
-
    
-
 
Unsecured   611    
-
    
-
    
-
 
   $307,391   $854   $7,196   $
-
 

 

June 30, 2022:

 

(in thousands)  Pass   Special
Mention		   Substandard   Doubtful 
                 
Residential real estate                
One- to four-family  $210,830   $194   $5,408   $
         -
 
Multi-family   13,682    
-
    570    
-
 
Construction   1,363    
-
    
-
    
-
 
Land   1,062    
-
    
-
    
-
 
Farm   1,068    
-
    270    
-
 
Nonresidential real estate   29,666    702    1,073    
-
 
Commercial and industrial   1,006    
-
    
-
    
-
 
Consumer and other                    
Loans on deposits   891    
-
    
-
    
-
 
Home equity   7,548    
-
    122    
-
 
Automobile   117    
-
    
-
    
-
 
Unsecured   535    
-
    5    
-
 
   $267,768   $896   $7,448   $
-
 

 

The following tables present the activity in the allowance for loan losses by portfolio segment for the years ended June 30, 2023 and 2022:

 

June 30, 2023:

 

(in thousands)  Beginning
balance		   Provision
(credit)
for loan
losses		   Loans
charged off		   Recoveries   Ending
balance		 
                     
Residential real estate                    
One- to four-family  $800   $73   $(29)  $13   $857 
Multi-family   231    47    
-
    
-
    278 
Construction   4    37    
-
    
-
    41 
Land   3    (2)   
-
    
-
    1 
Farm   5    (1)   
-
    
-
    4 
Nonresidential real estate   461    (64)   
-
    8    405 
Commercial and industrial   2    21    
-
    
-
    23 
Consumer and other                         
Loans on deposits   1    
-
    
-
    
-
    1 
Home equity   21    2    
-
    
-
    23 
Automobile   
-
         
-
    
-
    
-
 
Unsecured   1    
-
    
-
    
-
    1 
   $1,529   $113   $(29)  $21   $1,634 

 

June 30, 2022:

 

(in thousands)  Beginning
balance		   Provision
(credit) for
loan losses		   Loans
charged off		   Recoveries   Ending balance 
                     
Residential real estate                    
One- to four-family  $794   $37   $(31)  $
-
   $800 
Multi-family   291    (60)   
-
    
-
    231 
Construction   12    (8)   
-
    
-
    4 
Land   3    
-
    
-
    
-
    3 
Farm   5    
-
    
-
    
-
    5 
Nonresidential real estate   494    (33)   
-
    
-
    461 
Commercial and industrial   5    (3)   
-
    
-
    2 
Consumer and other                         
Loans on deposits   2    (1)   
-
    
-
    1 
Home equity   15    6    
-
    
-
    21 
Automobile   
-
    
-
    
-
    
-
    
-
 
Unsecured   1    2    (4)   2    1 
   $1,622   $(60)  $(35)  $2   $1,529 

  

Purchased Loans:

 

The Company purchased loans during the fiscal year ended June 30, 2013 for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount of those loans, net of a purchase credit discount of $88,000 and $88,000, at June 30, 2023 and 2022, respectively, was as follows:

 

(in thousands)  2023   2022 
Residential real estate        
One- to four-family  $196   $400 

 

Accretable yield, or income expected to be collected on loans purchased during fiscal year 2013, for the years ended June 30 was as follows:

 

(in thousands)  2023   2022 
Balance at beginning of year  $339   $390 
Accretion of income   (45)   (51)
Balance at end of year  $294   $339 

 

For those purchased loans disclosed above, the Company made no increase in allowance for loan losses for the years ended June 30, 2023 or 2022, nor were any allowance for loan losses reversed during those years.