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Loans and Allowance for Credit Losses on Loans
9 Months Ended
Mar. 31, 2024
Loans and Allowance for Credit Losses on Loans [Abstract]  
Loans and Allowance for Credit Losses on Loans
(4)          Loans and Allowance for Credit Losses on Loans

The Company adopted ASU 2016-13 (CECL) effective July 1, 2023. The loan segmentation has been redefined under CECL and therefore prior year tables are presented separately.

With the adoption of CECL, the Company’s revised loan segments at March 31, 2024 are as follows:

(In thousands)
 
March 31, 2024
 
Residential real estate
 
$
411,555
 
Commercial real estate
   
924,777
 
Home equity
   
27,659
 
Consumer
   
4,721
 
Commercial
   
108,923
 
Total gross loans(1)(2)
   
1,477,635
 
   Allowance for credit losses on loans
   
(20,382
)
Loans receivable, net
 
$
1,457,253
 

 
(1)
Loan balances include net deferred fees/cost of $167 at March 31, 2024.
 
(2)
Loan balances exclude accrued interest receivable of $6.7 million at March 31, 2024, which is included in accrued interest receivable in the consolidated statement of financial condition.

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. Loans on nonaccrual status totaled $5.6 million at March 31, 2024, of which there were two residential loans totaling $446,000, one commercial loan totaling $1.7 million, and three commercial real estate loans totaling $1.6 million, that were in the process of foreclosure at March 31,2024. Included in nonaccrual loans were $1.7 million of loans which were less than 90 days past due at March 31, 2024, 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 $5.5 million at June 30, 2023, of which three residential real estate loans totaling $625,000 and two commercial real estate loans totaling $1.4 million were in the process of foreclosure. Included in nonaccrual loans were $3.1 million of loans which were less than 90 days past due at June 30, 2023, but have a recent history of delinquency greater than 90 days past due. The activity in nonperforming loans during the nine months ended March 31, 2024, included $482,000 in loan repayments, $93,000 in loans returning to performing status, $182,000 in charge-offs or transfers to foreclosed, and $940,000 of loans placed into nonperforming status.

The following table sets forth information regarding delinquent and/or nonaccrual loans at March 31, 2024:

(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
 
$
1,710
   
$
-
   
$
1,383
   
$
3,093
   
$
408,462
   
$
411,555
   
$
2,672
 
Commercial real estate
   
631
     
-
     
1,247
     
1,878
     
922,899
     
924,777
     
1,664
 
Home equity
   
50
     
-
     
13
     
63
     
27,596
     
27,659
     
48
 
Consumer
   
22
     
7
     
-
     
29
     
4,692
     
4,721
     
-
 
Commercial loans
   
1
     
106
     
1,255
     
1,362
     
107,561
     
108,923
     
1,255
 
Total gross loans
 
$
2,414
   
$
113
   
$
3,898
   
$
6,425
   
$
1,471,210
   
$
1,477,635
   
$
5,639
 

Allowance for Credit Losses on Loans

The Company’s July 1, 2023 adoption of CECL resulted in a significant change to our methodology for estimating the allowance for credit losses.  The allowance for credit losses for the loan portfolio is established through a provision for credit losses based on the results of life of loan quantitative models, reserves associated with collateral-dependent loans evaluated individually and adjustments for the impact of current economic conditions not accounted for in the quantitative models. The discounted cash flow methodology is used to calculate the CECL reserve for the residential real estate, commercial real estate, home equity and commercial loan segments. The Company uses a four-quarter reasonable and supportable forecast period based on the one year percent change in national GDP and the national unemployment rate, as economic variables. The forecast will revert to long-term economic conditions over a four-quarter reversion period on a straight-line basis. The remaining life method will be utilized to determine the CECL reserve for the consumer loan segment. A qualitative factor framework has been developed to adjust the quantitative loss rates for asset-specific risk characteristics or current conditions at the reporting date. The Company elected to use the practical expedient to evaluate loans individually, if they are collateral dependent loans that are on nonaccrual status with a balance of $250,000 or greater, which is consistent with regulatory requirements. The fair value of the collateral dependent loan less selling expenses will be compared to the loan balance to determine if a CECL reserve is required.

In addition, various regulatory agencies, as an integral part of their examination process, periodically review the Company’s allowance for credit losses.  Such agencies may require the Company to recognize additions to the allowance based on their judgment about information available to them at the time of their examination. The Company 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 Company 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 credit losses, unless equitable arrangements are made. Included within consumer loan charge-offs and recoveries are deposit accounts that have been overdrawn in excess of 60 days. 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 credit losses is increased by a provision for credit losses (which results in a charge to expense) and recoveries of loans previously charged off, and is reduced by charge-offs.

The following tables set forth the activity and allocation of the allowance for credit losses on loans by segment:

   
Activity for the three months ended March 31, 2024
 
(In thousands)
 
Residential
real estate
   
Commercial
real estate
   
Home equity
   
Consumer
   
Commercial
   
Total
 
Balance at December 31, 2023
 
$
4,010
   
$
12,523
   
$
192
   
$
486
   
$
3,098
   
$
20,309
 
Charge-offs
   
-
     
-
     
-
     
(117
)
   
(143
)
   
(260
)
Recoveries
   
-
     
1
     
-
     
46
     
9
     
56
 
Provision
   
128
     
(28
)
   
7
     
87
     
83
     
277
 
Balance at March 31, 2024
 
$
4,138
   
$
12,496
   
$
199
   
$
502
   
$
3,047
   
$
20,382
 

   
Activity for the nine months ended March 31, 2024
 
(In thousands)
 
Residential
real estate
   
Commercial
real estate
   
Home equity
   
Consumer
   
Commercial
   
Total
 
Balance at June 30, 2023
 
$
2,794
   
$
14,839
   
$
46
   
$
332
   
$
3,201
   
$
21,212
 
Adoption of ASU No. 2016-13
   
1,182
     
(2,889
)
   
117
     
137
     
121
     
(1,332
)
Charge-offs
   
-
     
-
     
-
     
(393
)
   
(156
)
   
(549
)
Recoveries
   
-
     
2
     
-
     
100
     
27
     
129
 
Provision
   
162
     
544
     
36
     
326
     
(146
)
   
922
 
Balance at March 31, 2024
 
$
4,138
   
$
12,496
   
$
199
   
$
502
   
$
3,047
   
$
20,382
 

The allowance for credit losses on unfunded commitments as of March 31, 2024 was $1.3 million.

Credit monitoring process

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 Company 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. For the commercial real estate and commercial loans, 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 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.” Residential real estate, home equity and consumer loans are graded as either nonperforming or performing. Nonperforming loans are loans that are generally over 90 days past due or on nonaccrual status.

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 Company will acquire and liquidate the underlying collateral.  By originating the loan at a loan-to-value ratio of 85.0% or less, the Company 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 Company does not hold the first mortgage. The Company may stand in a secondary position in the event of collateral liquidation resulting in a greater chance of insufficiency to meet all obligations.

Construction loan repayments to a degree, are dependent upon the successful and timely completion of the construction of the subject property within specified cost limits.  The Company completes inspections during the construction phase prior to any disbursements. The Company 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. The Company 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 Company 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.

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 Company 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 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 Company 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 Company 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.

The following tables illustrate the Company’s credit quality by loan class by vintage:


                       At March 31, 2024  
(In thousands)
 
2024
   
2023
   
2022
   
2021
   
2020
   
Prior
   
Revolving loans amortized cost basis
   
Revolving loans converted to term
   
Total
 
                                                       
Residential real estate
                                                     
By payment activity status:
                                                     
     Performing
 
$
42,113
   
$
62,176
   
$
94,349
   
$
81,621
   
$
33,397
   
$
95,202
   
$
-
   
$
25
   
$
408,883
 
     Non-performing
   
-
     
-
     
-
     
185
     
170
     
2,317
     
-
     
-
     
2,672
 
Total residential real estate
   
42,113
     
62,176
     
94,349
     
81,806
     
33,567
     
97,519
     
-
     
25
     
411,555
 
Current period gross charge-offs
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
                                                                         
Commercial real estate
                                                                       
By internally assigned grade:
                                                                       
     Pass
   
78,939
     
214,833
     
244,311
     
127,603
     
77,506
     
141,954
     
5,189
     
367
     
890,702
 
     Special mention
   
-
     
946
     
2,482
     
303
     
436
     
5,114
     
-
     
-
     
9,281
 
     Substandard
   
330
     
1,692
     
3,205
     
598
     
4,617
     
14,352
     
-
     
-
     
24,794
 
Total commercial real estate
   
79,269
     
217,471
     
249,998
     
128,504
     
82,559
     
161,420
     
5,189
     
367
     
924,777
 
Current period gross charge-offs
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
                                                                         
Home equity
                                                                       
By payment activity status:
                                                                       
     Performing
   
4,716
     
2,964
     
349
     
454
     
291
     
1,361
     
17,476
     
-
     
27,611
 
     Non-performing
   
-
     
-
     
-
     
-
     
-
     
1
     
47
     
-
     
48
 
Total home equity
   
4,716
     
2,964
     
349
     
454
     
291
     
1,362
     
17,523
     
-
     
27,659
 
Current period gross charge-offs
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
                                                                         
Consumer
                                                                       
By payment activity status:
                                                                       
     Performing
   
1,921
     
1,407
     
799
     
324
     
124
     
73
     
73
     
-
     
4,721
 
     Non-performing
   
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
     
-
 
Total Consumer
   
1,921
     
1,407
     
799
     
324
     
124
     
73
     
73
     
-
     
4,721
 
Current period gross charge-offs
   
318
     
13
     
49
     
4
     
1
     
-
     
8
     
-
     
393
 
                                                                         
Commercial
                                                                       
By internally assigned grade:
                                                                       
     Pass
   
6,308
     
11,015
     
14,019
     
15,287
     
5,606
     
18,469
     
26,810
     
456
     
97,970
 
     Special mention
   
-
     
55
     
86
     
-
     
36
     
877
     
3,879
     
-
     
4,933
 
     Substandard
   
-
     
-
     
1,719
     
1,272
     
76
     
210
     
2,743
     
-
     
6,020
 
Total Commercial
 
$
6,308
   
$
11,070
   
$
15,824
   
$
16,559
   
$
5,718
   
$
19,556
   
$
33,432
   
$
456
   
$
108,923
 
Current period gross charge-offs
 
$
-
   
$
-
   
$
-
   
$
-
   
$
-
   
$
137
   
$
19
   
$
-
   
$
156
 

The Company had no loans classified doubtful or loss at March 31, 2024.

Individually Evaluated Loans

As of March 31, 2024, loans evaluated individually had an amortized cost basis of $5.7 million, with an allowance for credit losses on loans of $1.9 million.

Loan Modifications to Borrowers Experiencing Financial Difficulties


On July 1, 2023, the Company adopted ASU 2022-02, which eliminated the recognition and measurement of TDRs and enhanced the disclosure requirements for certain loan modifications for borrowers experiencing financial difficulty. Refer to Note 2 for recently adopted accounting standards.



With the adoption of ASU 2022-02 loan modifications require enhanced reporting on the type of modifications granted and the financial magnitude of the concessions granted. When the Company modifies a loan for borrowers experiencing financial difficulty, such modifications generally include one or a combination of the following: an extension of the maturity date; a stated rate of interest not at the market rate for new debt with similar risk; a change in the scheduled payment amount; or principal forgiveness. The Company works with loan customers experiencing financial difficulty and may enter into loan modifications to achieve the best mutual outcome given the financial circumstances of the borrower.


The following tables present the amortized cost basis of the loans modified to borrowers experiencing financial difficulty by type of concession granted:

   
For the three and nine months ended March 31, 2024
 

 
Term extension
   
Term extension and
interest rate reduction
 
(Dollars in thousands)  
Amortized cost
   
Percentage of
total class
   
Amortized cost
   
Percentage of total class
 
Commercial real estate
 
$
3,948
     
0.427
%
 
$
130
     
0.014
%
Total
 
$
3,948
           
$
130
         

The following table presents the financial effect of the modifications made to borrowers experiencing financial difficulty:

   
For the three and nine months ended March 31, 2024
 
           
Loan type
 
Term extension
 
Interest rate reduction
 
Commercial real estate
 
Added a weighted-average 9
months to the life of the loans
 
Interest rates were reduced by an
average of 1.75%
 

The Company closely monitors the performance of loans that are modified in accordance with ASU 2022-02. Loans modified during the three and nine months ended March 31, 2024 are performing within their modified terms.


Prior to the adoption of ASU 2016-13 (CECL)

Prior to July 1, 2023, the Company calculated the allowance for loan losses using the incurred loss methodology. The following tables are disclosures related to the allowance for loan losses in prior periods.

Loan segments and classes at June 30, 2023 are summarized as follows:

(In thousands)
 
June 30, 2023
 
Residential real estate:
     
   Residential real estate
 
$
372,443
 
   Residential construction and land
   
19,072
 
   Multi-family
   
66,496
 
Commercial real estate:
       
   Commercial real estate
   
693,436
 
   Commercial construction
   
121,958
 
Consumer loan:
       
   Home equity
   
22,752
 
   Consumer installment
   
4,612
 
Commercial loans
   
108,022
 
Total gross loans(1)
   
1,408,791
 
Allowance for loan losses
   
(21,212
)
Deferred fees and cost, net
   
75
 
Loans receivable, net
 
$
1,387,654
 

 
(1)
Loan balances exclude accrued interest receivable of $5.5 million at June 30, 2023, which is included in accrued interest receivable in the consolidated statement of financial condition.

Loan balances by internal credit quality indicator at June 30, 2023:

(In thousands)
 
Performing
   
Special mention
   
Substandard
   
Total
 
Residential real estate
 
$
366,403
   
$
2,305
   
$
3,735
   
$
372,443
 
Residential construction and land
   
19,072
     
-
     
-
     
19,072
 
Multi-family
   
66,410
     
86
     
-
     
66,496
 
Commercial real estate
   
665,548
     
11,671
     
16,217
     
693,436
 
Commercial construction
   
121,958
     
-
     
-
     
121,958
 
Home equity
   
22,698
     
-
     
54
     
22,752
 
Consumer installment
   
4,530
     
-
 

82



4,612

Commercial loans


100,225



2,352



5,445



108,022

Total gross loans

$
1,366,844


$
16,414


$
25,533


$
1,408,791


The following table sets forth information regarding delinquent and/or nonaccrual loans at June 30, 2023:

(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
 
$
-
   
$
504
   
$
1,604
   
$
2,108
   
$
370,335
   
$
372,443
   
$
2,747
 
Residential construction and land
   
-
     
-
     
-
     
-
     
19,072
     
19,072
     
-
 
Multi-family
   
-
     
-
     
-
     
-
     
66,496
     
66,496
     
-
 
Commercial real estate
   
-
     
235
     
652
     
887
     
692,549
     
693,436
     
1,318
 
Commercial construction
   
-
     
-
     
-
     
-
     
121,958
     
121,958
     
-
 
Home equity
   
48
     
-
     
13
     
61
     
22,691
     
22,752
     
54
 
Consumer installment
   
63
     
1
     
63
     
127
     
4,485
     
4,612
     
63
 
Commercial loans
   
-
     
-
     
19
     
19
     
108,003
     
108,022
     
1,276
 
Total gross loans
 
$
111
   
$
740
   
$
2,351
   
$
3,202
   
$
1,405,589
   
$
1,408,791
   
$
5,458
 

The Company had no accruing loans delinquent 90 days or more at June 30, 2023.  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 tables below detail additional information on impaired loans at the date or periods indicated:


 
At June 30, 2023
   
For the three months ended
March 31, 2023
   
For the nine months ended
March 31, 2023
 
(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
 
$
1,020
   
$
1,020
   
$
-
   
$
775
   
$
-
   
$
895
   
$
2
 
Commercial real estate
   
1,518
     
1,518
     
-
     
755
     
17
     
369
     
25
 
Home equity
   
-
     
-
     
-
     
43
     
-
     
100
     
-
 
Consumer Installment
    -       -       -       4       -       4       1  
Commercial loans
   
334
     
334
     
-
     
338
     
4
     
341
     
12
 
Impaired loans with no allowance
   
2,872
     
2,872
     
-
     
1,915
     
21
     
1,709
     
40
 
                                                         
With an allowance recorded:
                                                       
Residential real estate
   
2,086
     
2,086
     
597
     
2,421
     
7
     
2,221
     
14
 
Commercial real estate
   
3,777
     
3,777
     
245
     
3,851
     
48
     
3,696
     
121
 
Home equity
   
-
     
-
     
-
     
-
     
-
     
107
     
4
 
Commercial loans
   
1,572
     
1,572
     
1,171
     
1,839
     
5
     
2,479
     
32
 
Impaired loans with allowance
   
7,435
     
7,435
     
2,013
     
8,111
     
60
     
8,503
     
171
 
                                                         
Total impaired:
                                                       
Residential real estate
   
3,106
     
3,106
     
597
     
3,196
     
7
     
3,116
     
16
 
Commercial real estate
   
5,295
     
5,295
     
245
     
4,606
     
65
     
4,065
     
146
 
Home equity
   
-
     
-
     
-
     
43
     
-
     
207
     
4
 
Consumer Installment     -       -       -       4       -       4       1  
Commercial loans
   
1,906
     
1,906
     
1,171
     
2,177
     
9
     
2,820
     
44
 
Total impaired loans
 
$
10,307
   
$
10,307
   
$
2,013
   
$
10,026
   
$
81
   
$
10,212
   
$
211
 

Prior to the adoption of ASU 2022-02 on July 1, 2023, the Company accounted for loan modifications to borrowers experiencing financial difficulty when concessions were granted as TDRs. The following tables are disclosures related to TDRs in prior periods.

The table below details loans that have been modified as a troubled debt restructuring during the year ended June 30, 2023.

(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, 2023
                       
Residential real estate
   
2
   
$
778
   
$
778
    $ 778  
Commercial real estate
   
3
    $
1,428
    $
1,480
    $ 1,470  
Commercial loans
   
1
    $
379
    $
379
    $ -  

There was one commercial loan in the amount of $379,000 that had been modified as a troubled debt restructuring during the three months ended September 30, 2022 that subsequently defaulted during the quarter ended March 31, 2023. There were no other loans that had been modified as a troubled debt restructuring during the twelve months prior to June 30, 2022 or 2021, which have subsequently defaulted during the twelve months ended June 30, 2023 or 2022.

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, 2023
 
(In thousands)
 
Balance at
December 31, 2022
   
Charge-offs
   
Recoveries
   
Provision
   
Balance at
March 31, 2023
 
Residential real estate
 
$
2,492
   
$
-
   
$
-
   
$
146
   
$
2,638
 
Residential construction and land
   
193
     
-
     
-
     
(21
)
   
172
 
Multi-family
   
167
     
-
     
-
     
32
     
199
 
Commercial real estate
   
15,450
     
9
     
-
     
(1,869
)
   
13,572
 
Commercial construction
   
1,100
     
-
     
-
     
380
     
1,480
 
Home equity
   
38
     
-
     
-
     
11
     
49
 
Consumer installment
   
284
     
117
     
27
     
51
     
245
 
Commercial loans
   
2,565
     
103
     
12
     
326
     
2,800
 
Total
 
$
22,289
   
$
229
   
$
39
   
$
(944
)
 
$
21,155
 

   
Activity for the nine months ended March 31, 2023
 
(In thousands)
 
Balance at
June 30, 2022
   
Charge-offs
   
Recoveries
   
Provision
   
Balance at
March 31, 2023
 
Residential real estate
 
$
2,373
   
$
-
   
$
5
   
$
260
   
$
2,638
 
Residential construction and land
   
141
     
-
     
-
     
31
     
172
 
Multi-family
   
119
     
-
     
-
     
80
     
199
 
Commercial real estate
   
16,221
     
9
     
-
     
(2,640
)
   
13,572
 
Commercial construction
   
1,114
     
-
     
-
     
366
   
1,480
 
Home equity
   
89
     
-
     
-
     
(40
)
   
49
 
Consumer installment
   
349
     
421
     
102
     
215
     
245
 
Commercial loans
   
2,355
     
114
     
30
     
529
     
2,800
 
Total
 
$
22,761
   
$
544
   
$
137
   
$
(1,199
)
 
$
21,155
 

   
Allowance for loan losses
   
Loans receivable
 
   
Ending balance June 30, 2023
Impairment analysis
   
Ending balance June 30, 2023
Impairment analysis
 
(In thousands)
 
Individually
evaluated
   
Collectively
evaluated
   
Individually
evaluated
   
Collectively
evaluated
 
Residential real estate
 
$
597
   
$
2,016
   
$
3,106
   
$
369,337
 
Residential construction and land
   
-
     
181
     
-
     
19,072
 
Multi-family
   
-
     
197
     
-
     
66,496
 
Commercial real estate
   
245
     
12,775
     
5,295
     
688,141
 
Commercial construction
   
-
     
1,622
     
-
     
121,958
 
Home equity
   
-
     
46
     
-
     
22,752
 
Consumer installment
   
-
     
332
     
-
     
4,612
 
Commercial loans
   
1,171
     
2,030
     
1,906
     
106,116
 
Total
 
$
2,013
   
$
19,199
   
$
10,307
   
$
1,398,484
 

Foreclosed real estate

Foreclosed real estate (“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:

(In thousands)
 
March 31, 2024
   
June 30, 2023
 
Commercial loans   $
302     $
302  
Total foreclosed real estate
 
$
302
   
$
302