The following tables present a reconciliation of the allowance for loan losses for the periods indicated (in thousands):


	Commercial		Commercial				Multi-		Real Estate
March 31, 2023	Business		Real Estate		Land		Family		Construction		Consumer		Unallocated		Total

Beginning balance	$	2,422	$	9,037	$	168	$	845	$	393	$	943	$	715	$	14,523
Provision for (recapture of) loan losses		701		(143)		(75)		(47)		371		148		(205)		750
Charge-offs		—		—		—		—		—		(17)		—		(17)
Recoveries		—		—		—		—		—		53		—		53
Ending balance	$	3,123	$	8,894	$	93	$	798	$	764	$	1,127	$	510	$	15,309


March 31, 2022

Beginning balance	$	2,416	$	14,089	$	233	$	638	$	294	$	852	$	656	$	19,178
Provision for (recapture of) loan losses		75		(5,052)		(65)		207		99		52		59		(4,625)
Charge-offs		(69)		—		—		—		—		(17)		—		(86)
Recoveries		—		—		—		—		—		56		—		56
Ending balance	$	2,422	$	9,037	$	168	$	845	$	393	$	943	$	715	$	14,523


March 31, 2021

Beginning balance	$	2,008	$	6,421	$	230	$	854	$	1,149	$	1,363	$	599	$	12,624
Provision for (recapture of) loan losses		398		7,336		3		(216)		(855)		(423)		57		6,300
Charge-offs		—		—		—		—		—		(124)		—		(124)
Recoveries		10		332		—		—		—		36		—		378
Ending balance	$	2,416	$	14,089	$	233	$	638	$	294	$	852	$	656	$	19,178

The following tables present an analysis of loans receivable and the allowance for loan losses, based on impairment methodology, at the dates indicated (in thousands):


	Allowance for Loan Losses						Recorded Investment in Loans
	Individually		Collectively				Individually		Collectively
	Evaluated		Evaluated				Evaluated		Evaluated
	for		for				for		for
March 31, 2023	Impairment		Impairment		Total		Impairment		Impairment		Total

Commercial business	$	—	$	3,123	$	3,123	$	79	$	232,789	$	232,868
Commercial real estate		—		8,894		8,894		100		564,396		564,496
Land		—		93		93		—		6,437		6,437
Multi-family		—		798		798		—		55,836		55,836
Real estate construction		—		764		764		—		47,762		47,762
Consumer		6		1,121		1,127		450		101,007		101,457
Unallocated		—		510		510		—		—		—
Total	$	6	$	15,303	$	15,309	$	629	$	1,008,227	$	1,008,856

March 31, 2022

Commercial business	$	—	$	2,422	$	2,422	$	100	$	227,991	$	228,091
Commercial real estate		—		9,037		9,037		122		582,715		582,837
Land		—		168		168		—		11,556		11,556
Multi-family		—		845		845		—		60,211		60,211
Real estate construction		—		393		393		—		24,160		24,160
Consumer		8		935		943		495		83,058		83,553
Unallocated		—		715		715		—		—		—
Total	$	8	$	14,515	$	14,523	$	717	$	989,691	$	990,408

Changes in the allowance for unfunded loan commitments were as follows for the years indicated (in thousands):

The following tables present an analysis of loans by aging category at the dates indicated (in thousands):


							Total
			90 Days				Past
			and				Due and				Total
	30-89 Days		Greater				Non-				Loans
March 31, 2023	Past Due		Past Due		Non-accrual		accrual		Current		Receivable

Commercial business	$	1,967	$	1,569	$	97	$	3,633	$	229,235	$	232,868
Commercial real estate		—		—		100		100		564,396		564,496
Land		—		—		—		—		6,437		6,437
Multi-family		—		—		—		—		55,836		55,836
Real estate construction		—		—		—		—		47,762		47,762
Consumer		11		—		86		97		101,360		101,457
Total	$	1,978	$	1,569	$	283	$	3,830	$	1,005,026	$	1,008,856

March 31, 2022

Commercial business	$	7,753	$	21,808	$	118	$	29,679	$	198,412	$	228,091
Commercial real estate		—		—		122		122		582,715		582,837
Land		—		—		—		—		11,556		11,556
Multi-family		—		—		—		—		60,211		60,211
Real estate construction		291		—		—		291		23,869		24,160
Consumer		9		—		51		60		83,493		83,553
Total	$	8,053	$	21,808	$	291	$	30,152	$	960,256	$	990,408

A substantial portion of the 30-89 days past due and 90 days and greater past due loans at March 31, 2023 and 2022 are comprised of government guaranteed loans. These government guaranteed loans are pass rated loans and are not considered to be non-accrual loans given the Company expects to receive all principal and interest and not considered to be classified loans because there are no well-defined weaknesses or risk of loss. Given these government guaranteed loans are neither non-accrual loans nor classified loans, these loans are not considered to be impaired loans based on the Company’s policy. Given these loans are not considered to be impaired loans and are fully guaranteed by the SBA or USDA, these loans are omitted from the required allowance calculation. Interest income foregone on non-accrual loans was $14,000, $24,000 and $49,000 for the years ended March 31, 2023, 2022 and 2021, respectively.

Credit quality indicators – The Company monitors credit risk in its loan portfolio using a risk rating system (on a scale of one to nine) for all commercial (non-consumer) loans. The risk rating system is a measure of the credit risk of the borrower based on their historical, current and anticipated future financial characteristics. The Company assigns a risk rating to each commercial loan at origination and subsequently updates these ratings, as necessary, so that the risk rating continues to reflect the appropriate risk characteristics of the loan. Application of appropriate risk ratings is key to management of loan portfolio risk. In determining the appropriate risk rating, the Company considers the following factors: delinquency, payment history, quality of management, liquidity, leverage, earnings trends, alternative funding sources, geographic risk, industry risk, cash flow adequacy, account practices, asset protection and extraordinary risks. Consumer loans, including custom construction loans, are not assigned a risk rating but rather are grouped into homogeneous pools with similar risk characteristics. When a consumer loan is delinquent 90 days, it is placed on non-accrual status and assigned a substandard risk rating. Loss factors are assigned to each risk rating and homogeneous pool based on historical loss experience for similar loans. This historical loss experience is adjusted for qualitative factors that are likely to cause the estimated credit losses to differ from the Company’s historical loss experience. The Company uses these loss factors to estimate the general component of its allowance for loan losses.

Pass – These loans have a risk rating between 1 and 4 and are to borrowers that meet normal credit standards. Any deficiencies in satisfactory asset quality, liquidity, debt servicing capacity and coverage are offset by strengths in other areas. The borrower currently has the capacity to perform according to the loan terms. Any concerns about risk factors such as stability of margins, stability of cash flows, liquidity, dependence on a single product/supplier/customer, depth of management, etc. are offset by strengths in other areas. Typically, these loans are secured by the operating assets of the borrower and/or real estate. The borrower’s management is considered competent. The borrower has the ability to repay the debt in the normal course of business.

Watch – These loans have a risk rating of 5 and are included in the “pass” rating. However, there would typically be some reason for additional management oversight, such as the borrower’s recent financial setbacks and/or deteriorating financial position, industry concerns and failure to perform on other borrowing obligations. Loans with this rating are monitored closely in an effort to correct deficiencies.

Special mention – These loans have a risk rating of 6 and are rated in accordance with regulatory guidelines. These loans have potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or in the credit position at some future date. These loans pose elevated risk but their weakness does not yet justify a “substandard” classification.

Substandard – These loans have a risk rating of 7 and are rated in accordance with regulatory guidelines, for which the accrual of interest may or may not be discontinued. By definition under regulatory guidelines, a “substandard” loan has defined weaknesses which make payment default or principal exposure likely but not yet certain. Repayment of such loans is likely to be dependent upon collateral liquidation, a secondary source of repayment, or an event outside of the normal course of business.

Doubtful – These loans have a risk rating of 8 and are rated in accordance with regulatory guidelines. Such loans are placed on non-accrual status and repayment may be dependent upon collateral which has value that is difficult to determine or upon some near-term event which lacks certainty.

Loss – These loans have a risk rating of 9 and are rated in accordance with regulatory guidelines. Such loans are charged-off or charged-down when payment is acknowledged to be uncertain or when the timing or value of payments cannot be determined. “Loss” is not intended to imply that the loan or some portion of it will never be paid, nor does it in any way imply that there has been a forgiveness of debt.

The following tables present an analysis of loans by credit quality indicators at the dates indicated (in thousands):


											Total
			Special								Loans
March 31, 2023	Pass		Mention		Substandard		Doubtful		Loss		Receivable

Commercial business	$	231,384	$	1,367	$	117	$	—	$	—	$	232,868
Commercial real estate		544,426		17,626		2,444		—		—		564,496
Land		6,437		—		—		—		—		6,437
Multi-family		55,694		142		—		—		—		55,836
Real estate construction		47,762		—		—		—		—		47,762
Consumer		101,371		—		86		—		—		101,457
Total	$	987,074	$	19,135	$	2,647	$	—	$	—	$	1,008,856

March 31, 2022

Commercial business	$	227,435	$	511	$	145	$	—	$	—	$	228,091
Commercial real estate		569,417		7,211		6,209		—		—		582,837
Land		11,556		—		—		—		—		11,556
Multi-family		60,138		73		—		—		—		60,211
Real estate construction		24,160		—		—		—		—		24,160
Consumer		83,502		—		51		—		—		83,553
Total	$	976,208	$	7,795	$	6,405	$	—	$	—	$	990,408

Impaired loans – The following tables present information regarding impaired loans at the dates and for the years indicated (in thousands):


	Recorded		Recorded
	Investment		Investment
	with		with						Related
	No Specific		Specific		Total		Unpaid		Specific
	Valuation		Valuation		Recorded		Principal		Valuation
March 31, 2023	Allowance		Allowance		Investment		Balance		Allowance

Commercial business	$	79	$	—	$	79	$	127	$	—
Commercial real estate		100		—		100		162		—
Consumer		355		95		450		442		6
Total	$	534	$	95	$	629	$	731	$	6

March 31, 2022

Commercial business	$	100	$	—	$	100	$	143	$	—
Commercial real estate		122		—		122		178		—
Consumer		259		236		495		603		8
Total	$	481	$	236	$	717	$	924	$	8


	Year ended				Year ended				Year ended
	March 31, 2023				March 31, 2022				March 31, 2021
			Interest				Interest				Interest
			Recognized				Recognized				Recognized
	Average		on		Average		on		Average		on
	Recorded		Impaired		Recorded		Impaired		Recorded		Impaired
	Investment		Loans		Investment		Loans		Investment		Loans

Commercial business	$	90	$	—	$	110	$	—	$	130	$	—
Commercial real estate		111		—		660		16		2,008		61
Land		—		—		—		—		713		40
Multi-family		—		—		—		—		1,313		77
Consumer		475		24		514		24		494		29
Total	$	676	$	24	$	1,284	$	40	$	4,658	$	207

The cash basis interest income on impaired loans was not materially different than the interest recognized on impaired loans as shown in the above tables.

TDRs and other loan modifications – TDRs are loans for which the Company, for economic or legal reasons related to the borrower’s financial condition, has granted a concession to the borrower that it would otherwise not consider. A TDR typically involves a modification of terms such as a reduction of the stated interest rate or face amount of the loan, a reduction of accrued interest, and/or an extension of the maturity date(s) at a stated interest rate lower than the current market rate for a new loan with similar risk. TDRs are considered impaired loans and as such, impairment is measured as described for impaired loans in Note 1 – Summary of Significant Accounting Policies – Allowance for Loan Losses.

The following table presents TDRs by interest accrual status at the dates indicated (in thousands):


	March 31, 2023						March 31, 2022
	Accrual		Non-accrual		Total		Accrual		Non-accrual		Total

Commercial business	$	—	$	79	$	79	$	—	$	100	$	100
Commercial real estate		—		100		100		—		122		122
Land		—		—		—		—		—		—
Multi-family		—		—		—		—		—		—
Consumer		450		—		450		495		—		495
Total	$	450	$	179	$	629	$	495	$	222	$	717

At March 31, 2023, the Company had no commitments to lend additional funds on these loans. At March 31, 2023, all of the Company’s TDRs were paying as agreed.