The allowance for loan and lease losses ("ALLL") reflects management’s judgment in the evaluation of probable loan losses inherent in the portfolio at the balance sheet date. Management uses a disciplined process and methodology to calculate the ALLL each quarter. To determine the total ALLL, management estimates the reserves needed for each segment of the loan portfolio, including loans analyzed individually and loans analyzed on a pooled basis.

During fiscal year 2021, we increased our qualitative factors and assessment criteria due to the ongoing pandemic. In fiscal year 2022, we adjusted our qualitative factors and assessment criteria from high to medium based on improving economic factors, such as unemployment and overall increased activity due to less pandemic related restrictions. The increase in the qualitative reserves was related to the overall increase in our loan portfolio. These increases in reserves were partially offset by decreases in our quantitative reserve analysis as the rolling 20 quarter historical loss look back period improved for most of our loan categories. During fiscal year-to-date 2023, we again increased our qualitative factors and assessment criteria to high due to the economic climate in general and its impact on the New York City ("NYC") metropolitan area in which the Company operates. The Federal Reserve has increased the federal funds rate 4.5% since December 31, 2021, and has indicated that it will likely continue to increase market interest rates in order to attempt to decrease the rate of inflation. In terms of restoring pre-pandemic jobs, NYC represents one of the slowest recovery of any major metropolitan area and reports a high unemployment rate of 5.9%. In spite of the strict analysis applied to our qualitative reserves, the Company's overall allowance declined moderately as the level of gross loans decreased and the rolling 20 quarter loss look back period revealed little in recorded losses.

The ALLL is sensitive to risk ratings assigned to individually evaluated loans and economic assumptions and delinquency trends. Individual loan risk ratings are evaluated based on the specific facts related to that loan. Additions to the ALLL are made by charges to the provision for loan losses. Credit exposures deemed to be uncollectible are charged against the ALLL, while recoveries of previously charged off amounts are credited to the ALLL.


	December 31, 2022				March 31, 2022
$ in thousands	Amount		Percent		Amount		Percent
Gross loans receivable:
One-to-four family	$	65,291	11.2	%	$	69,297	12.0	%
Multifamily	176,480		30.2	%	160,800		27.9	%
Commercial real estate	172,468		29.5	%	174,270		30.2	%

Business (1)	167,700		28.7	%	170,497		29.6	%
Consumer (2)	2,127		0.4	%	1,623		0.3	%
Total loans receivable	$	584,066	100.0	%	$	576,487	100.0	%

Unamortized premiums, deferred costs and fees, net	2,683				3,017

Allowance for loan losses	(5,154)				(5,624)
Total loans receivable, net	$	581,595			$	573,880

The Bank participated as a lender in the PPP, which opened on April 3, 2020. As part of the CARES Act, the SBA was authorized to temporarily guarantee loans under this new 7(a) loan program. Under the PPP, small businesses and other entities and individuals could apply for loans from existing SBA lenders and other approved regulated lenders that enrolled in the program, subject to numerous limitations and eligibility criteria. Since the PPP loans are fully guaranteed by the SBA, there are no additional ALLL reserves required. As of December 31, 2022, the Bank had approved and funded approximately 420 applications totaling $57.1 million of loans under the PPP. The Bank has begun to receive debt forgiveness payments on PPP loans closed during the first and second rounds of the program. Business loans included PPP loans outstanding totaling $2.9 million as of December 31, 2022.

Consistent with regulatory guidance and the provisions of the CARES Act, loans less than 30 days past due at December 31, 2019 that were granted COVID-19 related payment deferrals continued to be considered current and not reported as TDRs. For the fiscal year ended March 31, 2021, the Bank received 83 applications for payment deferrals on approximately $90.4 million of loans. At December 31, 2022 and March 31, 2022, no loans were on COVID-related deferrals as the remaining 90-day loan deferments expired and borrowers became current.


Three months ended December 31, 2022
$ in thousands	One-to-four family		Multifamily		Commercial Real Estate		Business		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	704	$	1,055	$	1,608	$	1,814	$	82	$	246	$	5,509
Charge-offs	—		—		—		—		(106)		—		(106)
Recoveries	—		—		—		30		2		—		32
Provision for (recovery of) Loan Losses	20		25		(563)		69		143		25		(281)

Ending Balance	$	724	$	1,080	$	1,045	$	1,913	$	121	$	271	$	5,154


Nine months ended December 31, 2022
$ in thousands	One-to-four family		Multifamily		Commercial Real Estate		Business		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	731	$	1,114	$	1,157	$	2,497	$	123	$	2	$	5,624
Charge-offs	—		—		—		—		(130)		—		(130)
Recoveries	90		—		10		53		4		—		157
Provision for (recovery of) Loan Losses	(97)		(34)		(122)		(637)		124		269		(497)

Ending Balance	$	724	$	1,080	$	1,045	$	1,913	$	121	$	271	$	5,154

Allowance for Loan Losses Ending Balance: collectively evaluated for impairment	$	621	$	1,080	$	1,045	$	1,761	$	121	$	271	$	4,899
Allowance for Loan Losses Ending Balance: individually evaluated for impairment	103		—		—		152		—		—		255

Loan Receivables Ending Balance:	$	66,142	$	177,647	$	173,219	$	167,602	$	2,139	$	—	$	586,749
Ending Balance: collectively evaluated for impairment	61,045		177,576		165,944		161,635		2,139		—		568,339
Ending Balance: individually evaluated for impairment	5,097		71		7,275		5,967		—		—		18,410


At March 31, 2022
$ in thousands	One-to-four family		Multifamily		Commercial Real Estate		Business		Consumer		Unallocated		Total





Allowance for Loan Losses Ending Balance:	$	731	$	1,114	$	1,157	$	2,497	$	123	$	2	$	5,624
Allowance for Loan Losses Ending Balance: collectively evaluated for impairment	731		1,114		1,157		2,428		123		2		5,555
Allowance for Loan Losses Ending Balance: individually evaluated for impairment	—		—		—		69		—		—		69

Loan Receivables Ending Balance:	$	70,261	$	162,261	$	175,313	$	170,031	$	1,638	$	—	$	579,504
Ending Balance: collectively evaluated for impairment	65,369		161,746		175,313		163,991		1,638		—		568,057
Ending Balance: individually evaluated for impairment	4,892		515		—		6,040		—		—		11,447


Three months ended December 31, 2021
$ in thousands	One-to-four family		Multifamily		Commercial Real Estate		Business		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	1,015	$	914	$	1,002	$	2,106	$	137	$	341	$	5,515
Charge-offs	—		—		—		—		(123)		(129)		(252)
Recoveries	—		—		—		32		1		—		33
Provision for (recovery of) Loan Losses	(94)		188		93		(30)		116		(81)		192

Ending Balance	$	921	$	1,102	$	1,095	$	2,108	$	131	$	131	$	5,488


Nine months ended December 31, 2021
$ in thousands	One-to-four family		Multifamily		Commercial Real Estate		Business		Consumer		Unallocated		Total
Allowance for loan losses:
Beginning Balance	$	1,058	$	880	$	907	$	1,855	$	165	$	275	$	5,140
Charge-offs	—		—		—		—		(222)		(1)		(223)
Recoveries	—		—		—		82		21		—		103
Provision for (recovery of) Loan Losses	(137)		222		188		171		167		(143)		468
Ending Balance	$	921	$	1,102	$	1,095	$	2,108	$	131	$	131	$	5,488

Nonaccrual loans generally consist of loans for which the accrual of interest has been discontinued as a result of such loans becoming 90 days or more delinquent as to principal and/or interest payments. Interest income on nonaccrual loans is recorded when received based upon the collectability of the loan. Troubled debt restructured ("TDR") loans consist of modified loans where borrowers have been granted concessions in regards to the terms of their loans due to financial or other difficulties, which rendered them unable to repay their loans under the original contractual terms.

At December 31, 2022 and March 31, 2022, other non-performing assets totaled $60 thousand, respectively, which consisted of other real estate owned comprised of one foreclosed residential property. Other real estate loans is included in other assets in the consolidated statements of financial condition. There were no held-for-sale loans at December 31, 2022 and March 31, 2022.

One-to-four family residential loans and consumer and other loans are rated non-performing if they are delinquent in payments ninety or more days, a troubled debt restructuring with less than six months contractual performance or past maturity. All other one-to-four family residential loans and consumer and other loans are performing loans.


$ in thousands	Multifamily		Commercial Real Estate		Business
Credit Risk Profile by Internally Assigned Grade:
Pass	$	175,990	$	165,237	$	154,280
Special Mention	771		707		6,136
Substandard	886		7,275		7,186


Total	$	177,647	$	173,219	$	167,602

			One-to-four family		Consumer
Credit Risk Profile Based on Payment Activity:
Performing			$	61,045	$	2,139
Non-Performing			5,097		—
Total			$	66,142	$	2,139


$ in thousands	Multifamily		Commercial Real Estate		Business
Credit Risk Profile by Internally Assigned Grade:
Pass	$	155,274	$	164,543	$	155,196
Special Mention	897		8,157		6,302
Substandard	6,090		2,613		8,533


Total	$	162,261	$	175,313	$	170,031

			One-to-four family		Consumer
Credit Risk Profile Based on Payment Activity:
Performing			$	65,369	$	1,613
Non-Performing			4,892		25
Total			$	70,261	$	1,638


December 31, 2022
$ in thousands	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans Receivables
One-to-four family	$	—	$	233	$	3,968	$	4,201	$	61,941	$	66,142
Multifamily	2,991		—		71		3,062		174,585		177,647
Commercial real estate	3,238		1,237		7,274		11,749		161,470		173,219

Business	8,443		—		464		8,907		158,695		167,602
Consumer	33		121		—		154		1,985		2,139
Total	$	14,705	$	1,591	$	11,777	$	28,073	$	558,676	$	586,749


March 31, 2022
$ in thousands	30-59 Days Past Due		60-89 Days Past Due		90 or More Days Past Due		Total Past Due		Current		Total Loans Receivables
One-to-four family	$	1,943	$	—	$	5,229	$	7,172	$	63,089	$	70,261
Multifamily	4,435		115		515		5,065		157,196		162,261
Commercial real estate	4,010		—		4,601		8,611		166,702		175,313

Business	923		40		664		1,627		168,404		170,031
Consumer	84		45		25		154		1,484		1,638
Total	$	11,395	$	200	$	11,034	$	22,629	$	556,875	$	579,504


	At December 31, 2022						At March 31, 2022
$ in thousands	Recorded Investment		Unpaid Principal Balance		Associated Allowance		Recorded Investment		Unpaid Principal Balance		Associated Allowance
With no specific allowance recorded:
One-to-four family	$	4,066	$	4,661	$	—	$	4,892	$	5,576	$	—
Multifamily	71		71		—		515		515		—
Commercial real estate	7,275		7,401		—		—		—		—

Business	1,168		1,211		—		837		909		—

With an allowance recorded:
One-to-four family	1,031		1,031		103		—		—		—



Business	4,799		4,799		152		5,203		5,203		69

Total	$	18,410	$	19,174	$	255	$	11,447	$	12,203	$	69


	For the Three Months Ended December 31,								For the Nine Months Ended December 31,
	2022				2021				2022				2021
$ in thousands	Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized		Average Balance		Interest Income Recognized
With no specific allowance recorded:
One-to-four family	$	4,204	$	2	$	4,429	$	13	$	4,479	$	40	$	4,443	$	19
Multifamily	36		—		699		9		293		—		442		9
Commercial real estate	7,560		33		188		7		3,637		107		551		7

Business	1,174		10		2,125		24		1,003		44		2,212		24

With an allowance recorded:
One-to-four family	1,035		9		73		—		516		31		74		1

Commercial real estate	804		—		—		—		—		—		—		—
Business	4,962		67		5,293		—		5,001		202		5,333		149

Total	$	19,775	$	121	$	12,807	$	53	$	14,929	$	424	$	13,055	$	209

In certain circumstances, loan modifications involve a troubled borrower to whom the Bank may grant a concession. In cases where the Bank grants any significant concessions to a troubled borrower, the Bank accounts for the modification as a TDR. Situations around these modifications may include extension of maturity date, reduction in the stated interest rate, rescheduling of future cash flows, reduction in the face amount of the debt or reduction of past accrued interest. Loans modified in TDRs are placed on nonaccrual status until the Company determines that future collection of principal and interest is reasonably assured, which generally requires that the borrower demonstrate performance according to the restructured terms for a period of at least six months. There were two loan modifications made during the nine months ended December 31, 2022. No loan modifications were made during the three months ended December 31, 2022. There were no loan modifications made during the three and nine months ended December 31, 2021. Total TDR loans at December 31, 2022 were $6.8 million, $0.8 million of which were non-performing as they were either not consistently performing in accordance with their modified terms or not performing in accordance with their modified terms for at least six months. At March 31, 2022, total TDR loans were $6.9 million, of which $1.7 million were non-performing. The following table presents an analysis of the loan modifications that were classified as TDRs during the three and nine months ended December 31, 2022.

In an effort to proactively resolve delinquent loans, the Bank has selectively extended to certain borrowers concessions such as extensions, rate reductions or forbearance agreements. For the periods ended December 31, 2022 and 2021, there were no modified loans that defaulted within 12 months of modification.

At December 31, 2022, there were 4 loans in the TDR portfolio totaling $6.0 million that were on accrual status as the Company has determined that future collection of the principal and interest is reasonably assured. These have generally performed according to restructured terms for a period of at least six months. At March 31, 2022, there were 2 loans in the TDR portfolio totaling $5.2 million that were on accrual status.

Federal law requires that all loans or extensions of credit to executive officers and directors must be made on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with the general public and must not involve more than the normal risk of repayment or present other unfavorable features.