Loans and Allowance for Loan Losses

9 Months Ended

Mar. 31, 2022

Loans and Allowance for Loan Losses [Abstract]

Loans and Allowance for Loan Losses

(5)          Loans and Allowance for Loan Losses

Loan segments and classes at March 31, 2022 and June 30, 2021 are summarized as follows:

(In thousands)	March 31, 2022			June 30, 2021
Residential real estate:
Residential real estate	$	342,304		$	325,167
Residential construction and land		14,054			10,185
Multi-family		51,100			41,951
Commercial real estate:
Commercial real estate		535,603			472,887
Commercial construction		77,303			62,763
Consumer loan:
Home equity		18,395			18,285
Consumer installment		4,365			4,942
Commercial loans		112,275			172,228
Total gross loans		1,155,399			1,108,408
Allowance for loan losses		(21,739	)		(19,668	)
Unearned origination fees and costs, net		(140	)		(2,793	)
Loans receivable, net	$	1,133,520		$	1,085,947

The Bank of Greene County continues working with borrowers through the current pandemic. The Company instituted a loan deferment program in response to the COVID-19 pandemic whereby deferral of principal payments or principal and interest payments have been provided and correspond to the length of the National Emergency as defined under the CARES Act and extended under the Consolidated Appropriations Act which was signed into law on December 27, 2020.

Under Section 4013 of the Coronavirus Aid, Relief and Economic Security Act (the “CARES Act”), loans less than 30 days past due as of March 31, 2020 will be considered current for COVID-19 modifications.  Provisions under Section 4013 of the CARES Act were extended as part of the Consolidated Appropriations Act signed into law on December 27, 2020.  A financial institution can suspend the requirements under GAAP for loan modifications related to COVID-19 that would otherwise be categorized as a troubled debt restructuring (“TDR”), and suspend any determination of a loan modified as a result of COVID-19 as being a TDR, including the requirement to determine impairment for accounting purposes. Financial institutions wishing to utilize this authority must make a policy election, which applies to any COVID-19 modification made between March 1, 2020 and the earlier of either January 1, 2022 or the 60th day after the end of the COVID-19 national emergency. Similarly, the Financial Accounting Standards Board has confirmed that short-term modifications made on a good-faith basis in response to COVID-19 to loan customers who were current prior to any relief are not TDRs. Lastly, prior to the enactment of the CARES Act, the banking regulatory agencies provided guidance as to how certain short-term modifications would not be considered TDRs, and have subsequently confirmed that such guidance could be applicable for loans that do not qualify for favorable accounting treatment under Section 4013 of the CARES Act.  The Company has worked with customers following the guidance and standards set forth in the various federal and state laws and regulatory guidance issued in response to the global pandemic.

The CARES Act and the Consolidated Appropriations Act also provided over $2.0 trillion in emergency economic relief to individuals and businesses impacted by the COVID-19 pandemic.  The CARES Act authorized the Small Business Administration (“SBA”) to temporarily guarantee loans under a new 7(a) loan program called the Paycheck Protection Program (“PPP”).   An eligible business could apply for a PPP loan up to the greater of: (1) 2.5 times its average monthly “payroll costs”; or (2) $10.0 million.  PPP loans have: (a) an interest rate of 1.0%, (b) a 2-5 year loan term to maturity, and (c) principal and interest payments deferred for nine months from the date of disbursement. The Consolidated Appropriations Act (“CAA”) was signed into law on December 27, 2020. The CAA, extended the life of the PPP, creating a second round of PPP loans for eligible businesses. The Company participated in the CAA’s second round of PPP lending.  The SBA guarantees 100% of the PPP loans made to eligible borrowers.  The entire principal amount of the borrower’s PPP loan, including any accrued interest, is eligible to be reduced by the loan forgiveness amount under the PPP so long as employee and compensation levels of the business are maintained and at least 60% of the loan proceeds are used for payroll expenses, with the remaining 40%, or less, of the loan proceeds used for other qualifying expenses.  The Company had 99 remaining PPP loans with a total balance of $6.7 million outstanding at March 31, 2022, compared to 835 PPP loans with a total balance of $67.4 million outstanding at June 30, 2021.  The Company received fees from the SBA for originating these loans.  These fees have been deferred and will be recognized in income on a level-yield basis as the loans are repaid or forgiven by the SBA.  For the three and nine months ended March 31, 2022, the Company recognized $366,000 and $2.8 million in fee income, respectively. For the three and nine months ended March 31, 2021, the Company recognized $1.3 million and $2.8 million in fee income, respectively.

Management closely monitors the quality of the loan portfolio and has established a loan review process designed to help grade the quality and profitability of the Company’s loan portfolio.  The credit quality grade helps management make a consistent assessment of each loan relationship’s credit risk. Consistent with regulatory guidelines, The Bank of Greene County provides for the classification of loans considered being of lesser quality.  Such ratings coincide with the “Substandard,” “Doubtful” and “Loss” classifications used by federal regulators in their examination of financial institutions. Generally, an asset is considered Substandard if it is inadequately protected by the current net worth and paying capacity of the obligors and/or the collateral pledged. Substandard assets include those characterized by the distinct possibility that the insured financial institution will sustain some loss if the deficiencies are not corrected. Assets classified as Doubtful have all the weaknesses inherent in assets classified Substandard with the added characteristic that the weaknesses present make collection or liquidation in full, on the basis of currently existing facts, highly questionable and improbable. Assets classified as Loss are those considered uncollectible and of such little value that their continuance as assets without the establishment of a full loss reserve and/or charge-off is not warranted. Assets that do not currently expose the Company to sufficient risk to warrant classification in one of the aforementioned categories but otherwise possess weaknesses are designated “Special Mention.”

When The Bank of Greene County classifies problem assets as either Substandard or Doubtful, it generally establishes a specific valuation allowance or “loss reserve” in an amount deemed prudent by management.  General allowances represent loss allowances that have been established to recognize the inherent risk associated with lending activities, but which, unlike specific allowances, have not been allocated to particular loans.  When The Bank of Greene County identifies problem loans as being impaired, it is required to evaluate whether the Bank will be able to collect all amounts due either through repayments or the liquidation of the underlying collateral.  If it is determined that impairment exists, the Bank is required either to establish a specific allowance for losses equal to the amount of impairment of the assets, or to charge-off such amount.  The Bank of Greene County’s determination as to the classification of its loans and the amount of its valuation allowance is subject to review by its regulatory agencies, which can order the establishment of additional general or specific loss allowances.  The Bank of Greene County reviews its portfolio quarterly to determine whether any assets require classification in accordance with applicable regulations.

The Bank primarily has four segments within its loan portfolio that it considers when measuring credit quality: residential real estate loans, commercial real estate loans, consumer loans and commercial loans.  The residential real estate portfolio consists of residential, construction, and multi-family loan classes. Commercial real estate loans consist of commercial real estate and commercial construction loan classes. Consumer loans consist of home equity loan and consumer installment loan classes. The inherent risk within the loan portfolio varies depending upon each of these loan types.

Residential mortgage loans, including home equity loans, which are collateralized by residences are generally made in amounts up to 85.0% of the appraised value of the property.  In the event of default by the borrower, The Bank of Greene County will acquire and liquidate the underlying collateral.  By originating the loan at a loan-to-value ratio of 85.0% or less, The Bank of Greene County limits its risk of loss in the event of default.  However, the market values of the collateral may be adversely impacted by declines in the economy.  Home equity loans may have an additional inherent risk if The Bank of Greene County does not hold the first mortgage.  The Bank of Greene County may stand in a secondary position in the event of collateral liquidation resulting in a greater chance of insufficiency to meet all obligations.

Construction lending generally involves a greater degree of risk than other residential mortgage lending.  The repayment of the construction loan is, to a great degree, dependent upon the successful and timely completion of the construction of the subject property within specified cost limits.  The Bank of Greene County completes inspections during the construction phase prior to any disbursements.  The Bank of Greene County limits its risk during the construction as disbursements are not made until the required work for each advance has been completed.  Construction delays may further impair the borrower’s ability to repay the loan.

Loans collateralized by commercial real estate, and multi-family dwellings, such as apartment buildings generally are larger than residential loans and involve a greater degree of risk. Commercial real estate loans often involve large loan balances to single borrowers or groups of related borrowers. Payments on these loans depend to a large degree on the results of operations and management of the properties or underlying businesses, and may be affected to a greater extent by adverse conditions in the real estate market or the economy in general. Accordingly, the nature of commercial real estate loans makes them more difficult for management to monitor and evaluate.

Consumer loans generally have shorter terms and higher interest rates than residential mortgage loans. In addition, consumer loans expand the products and services offered by The Bank of Greene County to better meet the financial services needs of its customers.  Consumer loans generally involve greater credit risk than residential mortgage loans because of the difference in the nature of the underlying collateral.  Repossessed collateral for a defaulted consumer loan may not provide an adequate source of repayment of the outstanding loan balance because of the greater likelihood of damage, loss or depreciation in the underlying collateral. The remaining deficiency often does not warrant further substantial collection efforts against the borrower beyond obtaining a deficiency judgment. In addition, consumer loan collections depend on the borrower’s personal financial stability.  Furthermore, the application of various federal and state laws, including federal and state bankruptcy and insolvency laws, may limit the amount that can be recovered on such loans.

Commercial lending generally involves greater risk than residential mortgage lending and involves risks that are different from those associated with residential and commercial real estate mortgage lending. Real estate lending is generally considered to be collateral-based, with loan amounts based on fixed loan-to-collateral values, and liquidation of the underlying real estate collateral is viewed as the primary source of repayment in the event of borrower default. Although commercial loans may be collateralized by equipment or other business assets, the liquidation of collateral in the event of a borrower default is often an insufficient source of repayment because equipment and other business assets may be obsolete or of limited use, among other things. Accordingly, the repayment of a commercial loan depends primarily on the creditworthiness of the borrower (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.  The Bank of Greene County has formed relationships with other community banks within our region to participate in larger commercial loan relationships.  These types of loans are generally considered to be riskier due to the size and complexity of the loan relationship.  By entering into a participation agreement with the other bank, The Bank of Greene County can obtain the loan relationship while limiting its exposure to credit loss.  Management completes its due diligence in underwriting these loans and monitors the servicing of these loans.

Loan balances by internal credit quality indicator at March 31, 2022 are shown below.

(In thousands)	Performing		Special Mention		Substandard		Total
Residential real estate	$	338,122	$	30	$	4,152	$	342,304
Residential construction and land		14,052		-		2		14,054
Multi-family		51,006		94		-		51,100
Commercial real estate		496,439		10,436		28,728		535,603
Commercial construction		77,303		-		-		77,303
Home equity		17,885		-		510		18,395
Consumer installment		4,348		-		17		4,365
Commercial loans		106,275		1,104		4,896		112,275
Total gross loans	$	1,105,430	$	11,664	$	38,305	$	1,155,399

Loan balances by internal credit quality indicator at June 30, 2021 are shown below.

(In thousands)	Performing		Special Mention		Substandard		Total
Residential real estate	$	321,826	$	88	$	3,253	$	325,167
Residential construction and land		10,185		-		-		10,185
Multi-family		41,589		-		362		41,951
Commercial real estate		441,004		9,690		22,193		472,887
Commercial construction		55,819		5,944		1,000		62,763
Home equity		17,727		-		558		18,285
Consumer installment		4,942		-		-		4,942
Commercial loans		165,649		963		5,616		172,228
Total gross loans	$	1,058,741	$	16,685	$	32,982	$	1,108,408

The Company had no loans classified doubtful or loss at March 31, 2022 or June 30, 2021.  During the quarter ended March 31, 2022, the Company further downgraded commercial real estate and commercial loans from pass and special mention to substandard due to deterioration in borrower cash flows, delinquent payments and further financial deterioration or not improving financial performance.  Management continues to monitor these loan relationships closely. In total there were 3 commercial real estate loans and, 1 commercial loan that have been downgraded to substandard. At March 31, 2022, these loans were all performing. This was offset by payoffs of 4 commercial real estate loans and 9 commercial loans that were classified as substandard during the current quarter. Management continues to monitor these loan relationships closely.

Nonaccrual Loans

Management places loans on nonaccrual status once the loans have become 90 days or more delinquent. A nonaccrual loan is defined as a loan in which collectability is questionable and therefore interest on the loan will no longer be recognized on an accrual basis. A loan is not placed back on accrual status until the borrower has demonstrated the ability and willingness to make timely payments on the loan.  A loan does not have to be 90 days delinquent in order to be classified as nonaccrual. Nonaccrual loans consisted primarily of loans secured by real estate at March 31, 2022 and June 30, 2021. Loans on nonaccrual status totaled $3.9 million at March 31, 2022 of which $727,000 were in the process of foreclosure. At March 31, 2022, there were five residential loans totaling $625,000 and one commercial real estate loan for $102,000 in the process of foreclosure. Included in nonaccrual loans were $2.5 million of loans which were less than 90 days past due at March 31, 2022, but have a recent history of delinquency greater than 90 days past due. These loans will be returned to accrual status once they have demonstrated a history of timely payments. Loans on nonaccrual status totaled $2.3 million at June 30, 2021 of which $260,000 were in the process of foreclosure. At June 30, 2021, there were two residential loans in the process of foreclosure totaling $158,000 and one commercial real estate loan for $102,000 in the process of foreclosure. Included in nonaccrual loans were $1.2 million of loans which were less than 90 days past due at June 30, 2021, but have a recent history of delinquency greater than 90 days past due. The increase in nonaccrual loans during the nine months ended March 31, 2022, was primarily due to $2.6 million of loans placed into nonaccrual status due to delinquency, offset by $920,000 in loan repayments, and $134,000 in charge-offs.

The following table sets forth information regarding delinquent and/or nonaccrual loans at March 31, 2022:

(In thousands)	30-59 days past due		60-89 days past due		90 days or more past due		Total past due		Current		Total Loans		Loans on Non-accrual
Residential real estate	$	5,349	$	318	$	1,063	$	6,730	$	335,574	$	342,304	$	2,955
Residential construction and land		2		-		-		2		14,052		14,054		2
Multi-family		-		-		-		-		51,100		51,100		-
Commercial real estate		5,543		-		123		5,666		529,937		535,603		251
Commercial construction		-		-		-		-		77,303		77,303		-
Home equity		39		-		141		180		18,215		18,395		190
Consumer installment		48		2		3		53		4,312		4,365		3
Commercial loans		1,657		582		51		2,290		109,985		112,275		464
Total gross loans	$	12,638	$	902	$	1,381	$	14,921	$	1,140,478	$	1,155,399	$	3,865

The following table sets forth information regarding delinquent and/or nonaccrual loans at June 30, 2021:

(In thousands)	30-59 days past due		60-89 days past due		90 days or more past due		Total past due		Current		Total Loans		Loans on Non-accrual
Residential real estate	$	-	$	630	$	650	$	1,280	$	323,887	$	325,167	$	1,324
Residential construction and land		-		-		-		-		10,185		10,185		-
Multi-family		-		-		-		-		41,951		41,951		-
Commercial real estate		-		5,266		123		5,389		467,498		472,887		444
Commercial construction		-		-		-		-		62,763		62,763		-
Home equity		33		40		224		297		17,988		18,285		237
Consumer installment		26		13		-		39		4,903		4,942		-
Commercial loans		-		230		117		347		171,881		172,228		296
Total gross loans	$	59	$	6,179	$	1,114	$	7,352	$	1,101,056	$	1,108,408	$	2,301

The Bank of Greene County had no accruing loans delinquent 90 days or more at March 31, 2022 and June 30, 2021.  The borrowers have made arrangements with the Bank to bring the loans current within a specified time period and have made a series of payments as agreed.

Impaired Loan Analysis

The Company identifies impaired loans and measures the impairment in accordance with FASB ASC subtopic “Receivables – Loan Impairment.”  Management may consider a loan impaired once it is classified as nonaccrual and when it is probable that the borrower will be unable to repay the loan according to the original contractual terms of the loan agreement or the loan is restructured in a troubled debt restructuring.  It should be noted that management does not evaluate all loans individually for impairment.  Generally, The Bank of Greene County considers residential mortgages, home equity loans and installment loans as small, homogeneous loans, which are evaluated for impairment collectively based on historical loan experience and other factors.  In contrast, large commercial mortgage, construction, multi-family, business loans and select larger balance residential mortgage loans or nonaccrual loans that are over $100,000 and all trouble debt restructured loans are reviewed individually and considered impaired if it is probable that The Bank of Greene County will not be able to collect scheduled payments of principal and interest when due, according to the contractual terms of the loan agreement.  The measurement of impaired loans is generally based on the fair value of the underlying collateral.  The majority of The Bank of Greene County loans, including most nonaccrual loans, are small homogeneous loan types adequately supported by collateral.  Management considers the payment status of loans in the process of evaluating the adequacy of the allowance for loan losses among other factors.  Based on this evaluation, a delinquent loan’s risk rating may be downgraded to either pass-watch, special mention, or substandard, and the allocation of the allowance for loan loss is based upon the risk associated with such designation.

The tables below detail additional information on impaired loans at the date or periods indicated:

	At March 31, 2022						For the three months ended March 31, 2022				For the nine months ended March 31, 2022
(In thousands)	Recorded Investment		Unpaid Principal		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	929	$	929	$	-	$	846	$	3	$	577	$	13
Commercial real estate		70		70		-		71		1		351		9
Home equity		128		128		-		128		-		128		-
Consumer installment		5		5		-		2		1		1		1
Commercial loans		19		19		-		224		3		168		5
Impaired loans with no allowance		1,151		1,151		-		1,271		8		1,225		28
With an allowance recorded:
Residential real estate		2,064		2,064		601		2,159		10		1,612		43
Commercial real estate		3,721		3,721		1,147		1,864		75		1,085		93
Commercial construction		102		102		1		102		-		102		-
Home equity		320		320		45		320		4		321		10
Commercial loans		3,527		3,527		329		3,336		29		3,349		116
Impaired loans with allowance		9,734		9,734		2,123		7,781		118		6,469		262
Total impaired:
Residential real estate		2,993		2,993		601		3,005		13		2,189		56
Commercial real estate		3,791		3,791		1,147		1,935		76		1,436		102
Commercial construction		102		102		1		102		-		102		-
Home equity		448		448		45		448		4		449		10
Consumer installment		5		5		-		2		1		1		1
Commercial loans		3,546		3,546		329		3,560		32		3,517		121
Total impaired loans	$	10,885	$	10,885	$	2,123	$	9,052	$	126	$	7,694	$	290

	At June 30, 2021						For the three months ended March 31, 2021				For the nine months ended March 31, 2021
(In thousands)	Recorded Investment		Unpaid Principal		Related Allowance		Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
Residential real estate	$	370	$	370	$	-	$	381	$	1	$	392	$	11
Multi-family		-		-		-		-		-		40		-
Commercial real estate		281		281		-		307		-		321		3
Home equity		224		224		-		230		-		173		-
Commercial loans		95		95		-		105		-		164		8
Impaired loans with no allowance		970		970		-		1,023		1		1,090		22
With an allowance recorded:
Residential real estate		723		723		103		710		2		1,053		27
Commercial real estate		945		945		58		-		-		-		-
Commercial construction		102		102		1		102		-		102		-
Home equity		321		321		73		321		2		381		12
Commercial loans		3,234		3,234		156		1,235		85		417		110
Impaired loans with allowance		5,325		5,325		391		2,368		89		1,953		149
Total impaired:
Residential real estate		1,093		1,093		103		1,091		3		1,445		38
Multi-family		-		-		-		-		-		40		-
Commercial real estate		1,226		1,226		58		307		-		321		3
Commercial construction		102		102		1		102		-		102		-
Home equity		545		545		73		551		2		554		12
Commercial loans		3,329		3,329		156		1,340		85		581		118
Total impaired loans	$	6,295	$	6,295	$	391	$	3,391	$	90	$	3,043	$	171

The table below details loans that have been modified as a troubled debt restructuring during the three and nine months ended March 31, 2022.

(Dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post-Modification Outstanding Recorded Investment		Current Outstanding Recorded Investment
For the three and nine months ended March 31, 2022
Consumer installment		1	$	5	$	5	$	5

The table below details loans that have been modified as a troubled debt restructuring during the year ended June 30, 2021.

(Dollars in thousands)	Number of Contracts		Pre-Modification Outstanding Recorded Investment		Post- Modification Outstanding Recorded Investment		Current Outstanding Recorded Investment
For the year ended June 30,2021
Commercial loans		5	$	3,001	$	2,903	$	2,896
Commercial real estate		3		1,325		1,287		1,284
Residential		1		70		70		69

There were no loans that had been modified as a troubled debt restructuring during the twelve months prior to June 30, 2021 or 2020, which have subsequently defaulted during the three and nine months ended March 31, 2022 or 2021, respectively.

In order to assist borrowers through the COVID-19 pandemic, The Bank of Greene County has instituted a loan deferment program whereby deferral of payments were provided.  Payment deferrals consisted of either principal deferrals or full payment deferrals.  As allowed under the CARES Act, and as amended by Section 541 of the Consolidated Appropriations Act of 2021, the Company will not report these loans as delinquent and Trouble Debt Restructuring disclosures. The Company continued to recognize interest income during the deferral period as long as they were deemed collectible.  These loans will be closely monitored to determine collectability and accrual and delinquency status will be updated as deemed appropriate.  As of March 31, 2022, in accordance with the CARES Act and Consolidated Appropriations Act of 2021, the loan deferral program ended, therefore there were no loans that have payments deferred as of March 31, 2022.

The following table details loans that had payments deferred at June 30, 2021.

	Full Payment Deferral				Principal Payment Deferral				Total Deferral
(Dollars in thousands)	Balance		Number of Loans		Balance		Number of Loans		Balance		Number of Loans
Commercial real estate	$	6,119		3	$	1,346		3	$	7,465		6
Commercial loans		572		2		-		-		572		2
Total	$	6,691		5	$	1,346		3	$	8,037		8

Allowance for Loan Losses

The allowance for loan losses is established through a provision for loan losses based on management’s evaluation of the risk inherent in the loan portfolio, the composition of the loan portfolio, specific impaired loans and current economic conditions.  Such evaluation, which includes a review of certain identified loans on which full collectability may not be reasonably assured, considers among other matters, the estimated net realizable value or the fair value of the underlying collateral, economic conditions, payment status of the loan, historical loan loss experience and other factors that warrant recognition in providing for the loan loss allowance.  In addition, various regulatory agencies, as an integral part of their examination process, periodically review The Bank of Greene County’s allowance for loan losses.  Such agencies may require The Bank of Greene County to recognize additions to the allowance based on their judgment about information available to them at the time of their examination. The Bank of Greene County disaggregates its loan portfolio as noted in the below allowance for loan losses tables to evaluate for impairment collectively based on historical loss experience.  The Bank of Greene County evaluates nonaccrual loans that are over $100 thousand and all trouble debt restructured loans individually for impairment, if it is probable that The Bank of Greene County will not be able to collect scheduled payments of principal and interest when due, according to the contractual terms of the loan agreements. Loans that are guaranteed, such as SBA loans, are excluded from the homogeneous pool of loans and no allowance is allocated to this segment of the portfolio.  The measurement of impaired loans is generally based on the fair value of the underlying collateral.  The Bank of Greene County charges loans off against the allowance for credit losses when it becomes evident that a loan cannot be collected within a reasonable amount of time or that it will cost the Bank more than it will receive, and all possible avenues of repayment have been analyzed, including the potential of future cash flow, the value of the underlying collateral, and strength of any guarantors or co-borrowers.  Generally, consumer loans and smaller business loans (not secured by real estate) in excess of 90 days are charged-off against the allowance for loan losses, unless equitable arrangements are made. Included within consumer installment loan charge-offs and recoveries are deposit accounts that have been overdrawn in excess of 60 days. With continued growth in the number of deposit accounts, charge-off activity within this category has also grown, as can be seen from the tables below. For loans secured by real estate, a charge-off is recorded when it is determined that the collection of all or a portion of a loan may not be collected and the amount of that loss can be reasonably estimated. The allowance for loan losses is increased by a provision for loan losses (which results in a charge to expense) and recoveries of loans previously charged off and is reduced by charge-offs.

The Bank of Greene County recognizes that depending upon the duration of the COVID-19 pandemic borrowers may not have the ability to repay their debts which may ultimately result in losses to The Bank of Greene County.  Management continues to closely monitor credit relationships, particularly those that were on payment deferral or adversely classified.

The following tables set forth the activity and allocation of the allowance for loan losses by loan class during and at the periods indicated.  The allowance is allocated to each loan class based on historical loss experience, current economic conditions, and other considerations.

	Activity for the three months ended March 31, 2022
(In thousands)	Balance at December 31, 2021		Charge-offs		Recoveries		Provision			Balance at March 31, 2022
Residential real estate	$	1,981	$	-	$	3	$	22		$	2,006
Residential construction and land		115		-		-		2			117
Multi-family		76		-		-		10			86
Commercial real estate		15,616		-		-		276			15,892
Commercial construction		1,250		-		-		(121	)		1,129
Home equity		89		-		-		(2	)		87
Consumer installment		280		144		32		95			263
Commercial loans		2,277		-		1		(119	)		2,159
Total	$	21,684	$	144	$	36	$	163		$	21,739

	Activity for the nine months ended March 31, 2022
(In thousands)	Balance at June 30, 2021		Charge-offs		Recoveries		Provision			Balance at March 31, 2022
Residential real estate	$	2,012	$	-	$	10	$	(16	)	$	2,006
Residential construction and land		106		-		-		11			117
Multi-family		186		-		-		(100	)		86
Commercial real estate		13,049		-		-		2,843			15,892
Commercial construction		1,535		-		-		(406	)		1,129
Home equity		165		-		-		(78	)		87
Consumer installment		267		355		89		262			263
Commercial loans		2,348		107		3		(85	)		2,159
Total	$	19,668	$	462	$	102	$	2,431		$	21,739

	Allowance for Loan Losses				Loans Receivable
	Ending Balance At March 31, 2022 Impairment Analysis				Ending Balance At March 31, 2022 Impairment Analysis
(In thousands)	Individually Evaluated		Collectively Evaluated		Individually Evaluated		Collectively Evaluated
Residential real estate	$	601	$	1,405	$	2,993	$	339,311
Residential construction and land		-		117		-		14,054
Multi-family		-		86		-		51,100
Commercial real estate		1,147		14,745		3,791		531,812
Commercial construction		1		1,128		102		77,201
Home equity		45		42		448		17,947
Consumer installment		-		263		5		4,360
Commercial loans		329		1,830		3,546		108,729
Total	$	2,123	$	19,616	$	10,885	$	1,144,514

	Activity for the three months ended March 31, 2021
(In thousands)	Balance at December 31, 2020		Charge-offs		Recoveries		Provision			Balance at March 31, 2021
Residential real estate	$	1,998	$	-	$	3	$	(16	)	$	1,985
Residential construction and land		90		-		-		11			101
Multi-family		276		-		-		38			314
Commercial real estate		10,207		-		-		1,572			11,779
Commercial construction		1,847		-		-		94			1,941
Home equity		265		-		-		(64	)		201
Consumer installment		256		101		62		(59	)		157
Commercial loans		3,331		-		-		(141	)		3,190
Total	$	18,270	$	101	$	65	$	1,434		$	19,668

	Activity for the nine months ended March 31, 2021
(In thousands)	Balance at June 30, 2020		Charge-offs		Recoveries		Provision			Balance at March 31, 2021
Residential real estate	$	2,091	$	26	$	10	$	(90	)	$	1,985
Residential construction and land		141		-		-		(40	)		101
Multi-family		176		-		-		138			314
Commercial real estate		8,634		-		-		3,145			11,779
Commercial construction		2,053		-		-		(112	)		1,941
Home equity		295		-		-		(94	)		201
Consumer installment		197		247		101		107			157
Commercial loans		2,804		500		-		886			3,190
Total	$	16,391	$	773	$	111	$	3,939		$	19,668

	Allowance for Loan Losses				Loans Receivable
	Ending Balance June 30, 2021 Impairment Analysis				Ending Balance June 30, 2021 Impairment Analysis
(In thousands)	Individually Evaluated		Collectively Evaluated		Individually Evaluated		Collectively Evaluated
Residential real estate	$	103	$	1,909	$	1,093	$	324,074
Residential construction and land		-		106		-		10,185
Multi-family		-		186		-		41,951
Commercial real estate		58		12,991		1,226		471,661
Commercial construction		1		1,534		102		62,661
Home equity		73		92		545		17,740
Consumer installment		-		267		-		4,942
Commercial loans		156		2,192		3,329		168,899
Total	$	391	$	19,277	$	6,295	$	1,102,113

Foreclosed real estate (FRE)

FRE consists of properties acquired through mortgage loan foreclosure proceedings or in full or partial satisfaction of loans. The following table sets forth information regarding FRE at March 31, 2022 and June 30, 2021:

(in thousands)	March 31, 2022		June 30, 2021
Residential real estate	$	68	$	64
Total foreclosed real estate	$	68	$	64