Note

- Loans Receivable, Net and Allowance for Loan Losses

The composition of net loans receivable is as follows:

	September 30 , 20 20			December 31, 201 9
Real estate loans:
One-to-four family residential:
Owner occupied	$	5,385		$	6,298
Non-owner occupied		40,872			39,897
Total one-to-four family residential		46,257			46,195
Multi-family (five or more) residential		22,814			22,233
Commercial real estate		128,965			119,323
Construction		7,512			12,523
Home equity		4,103			3,726
Total real estate loans		209,651			204,000

Commercial business		141,206			45,745
Other consumer		10			22
Total Loans		350,867			249,767

Deferred loan fees and costs		(2,955	)		(844	)
Allowance for loan losses		(2,852	)		(2,231	)
Net Loans	$	345,060		$	246,692

The following tables present the classes of the loan portfolio summarized by the aggregate pass rating and the classified ratings of special mention, substandard and doubtful within the Company's internal risk rating system as of

September 30, 2020

and

December

31,

2019

(in thousands):

	September 30 , 20 20
	Pass		Special Mention		Substandard		Doubtful		Total
One-to-four family residential owner occupied	$	5,214	$	-	$	171	$	-	$	5,385
One-to-four family residential non-owner occupied		40,555		-		317		-		40,872
Multi-family residential		22,814		-		-		-		22,814
Commercial real estate		127,781		892		292		-		128,965
Construction		7,512		-		-		-		7,512
Home equity		4,103		-		-		-		4,103
Commercial business		141,206		-		-		-		141,206
Other consumer		10		-		-		-		10
Total	$	349,195	$	892	$	780	$	-	$	350,867

	December 31, 201 9
	Pass		Special Mention		Substandard		Doubtful		Total
One-to-four family residential owner occupied	$	6,126	$	-	$	172	$	-	$	6,298
One-to-four family residential non-owner occupied		39,579		-		318		-		39,897
Multi-family residential		22,233		-		-		-		22,233
Commercial real estate		118,233		798		292		-		119,323
Construction		12,523		-		-		-		12,523
Home equity		3,726		-		-		-		3,726
Commercial business		45,745		-		-		-		45,745
Other consumer		22		-		-		-		22
Total	$	248,187	$	798	$	782	$	-	$	249,767

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was

not

necessary as of

September 30, 2020

as well as the average recorded investment and related interest income for the period then ended (in thousands):

	September 30 , 20 20
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family residential owner occupied	$	171	$	178	$	-	$	171	$	-
One-to-four family residential non-owner occupied		19		19		-		19		-
Multi-family residential		-		-		-		-		-
Commercial real estate		131		131		-		131		9
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
								-
With an allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		-		-		-		-		-
Multi-family residential		-		-		-		-		-
Commercial real estate		-		-		-		-		-
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

Total:
One-to-four family residential owner occupied	$	171	$	178	$	-	$	171	$	-
One-to-four family residential non-owner occupied		19		19		-		19		-
Multi-family residential		-		-		-		-		-
Commercial real estate		-		-		-		-		-
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	321	$	328	$	-	$	321	$	9

The following table presents impaired loans by class, segregated by those for which a specific allowance was required and those for which a specific allowance was

not

necessary as of

December 31, 2019

as well as the average recorded investment and related interest income for the year then ended (in thousands):

	December 31, 201 9
	Recorded Investment		Unpaid Principal Balance		Related Allowance		Average Recorded Investment		Interest Income Recognized
With no related allowance recorded:
One-to-four family residential owner occupied	$	172	$	178	$	-	$	178	$	-
One-to-four family residential non-owner occupied		19		19		-		225		13
Multi-family residential		-		-		-		-		-
Commercial real estate		-		-		-		-		-
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

With an allowance recorded:
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		-		-		-		-		-
Multi-family residential		-		-		-		-		-
Commercial real estate		132		132		4		133		12
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-

Total:
One-to-four family residential owner occupied	$	172		178	$	-	$	178	$	-
One-to-four family residential non-owner occupied		19		19		-		225		13
Multi-family residential		-		-		-		-		-
Commercial real estate		132		132		4		133		12
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	323	$	329	$	4	$	536	$	25

The loan portfolio also includes certain loans that have been modified in a troubled debt restructuring, where economic concessions have been granted to borrowers who have experienced or are expected to experience financial difficulties. These concessions typically result from loss mitigation activities and could include reductions in the interest rate, payment extensions, forbearance, or other actions. At

September 30, 2020,

the Company had

two

loans totaling

$150,000

that were identified as troubled debt restructurings. One of these loans was performing in accordance with its modified terms and

one

was on non-accrual. During the

nine

months ended

September 30, 2020,

new loans were identified as TDRs. At

December 31, 2019,

the Company had

two

loans totaling

$151,000

that were identified as troubled debt restructurings. If a TDR is placed on non-accrual it is

not

reverted back to accruing status until the borrower makes timely payments as contracted for at least

six

months and future collection under the revised terms is probable.

The following tables present the Company's TDR loans as of

September 30, 2020

and

December 31, 2019 (

dollar amounts in thousands):

	September 30, 20 20
	Number of Contracts		Recorded Investment		Non-Accrual		Accruing		Related Allowance
One-to-four family residential owner occupied		-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		1		19		19		-		-
Multi-family residential		-		-		-		-		-
Commercial real estate		1		131		-		131		-
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total		2	$	150	$	19	$	131	$	-

	December 31, 201 9
	Number of Contracts		Recorded Investment		Non-Accrual		Accruing		Related Allowance
One-to-four family residential owner occupied		-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		1		19		-		19		-
Multi-family residential		-		-		-		-		-
Commercial real estate		1		132		-		132		4
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total		2	$	151	$	-	$	151	$	4

The contractual aging of the TDRs in the table above as of

September 30, 2020

and

December 31, 2019

is as follows (in thousands):

	September 30, 2020
	Current		Past Due 30-89 Days		90 Days or More Past Due		Non-Accrual		Total
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		-		-		-		19		19
Multi-family residential		-		-		-		-		-
Commercial real estate		131		-		-		-		131
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	131	$	-	$	-	$	19	$	150

	December 31, 2019
	Current		Past Due 30-89 Days		90 Days or More Past Due		Non-Accrual		Total
One-to-four family residential owner occupied	$	-	$	-	$	-	$	-	$	-
One-to-four family residential non-owner occupied		-		19		-		-		19
Multi-family residential		-		-		-		-		-
Commercial real estate		132		-		-		-		132
Construction		-		-		-		-		-
Home equity		-		-		-		-		-
Commercial business		-		-		-		-		-
Other consumer		-		-		-		-		-
Total	$	132	$	19	$	-	$	-	$	151

Any reserve for an impaired TDR loan is based upon the present value of the future expected cash flows discounted at the loan's original effective rate or upon the fair value of the collateral less costs to sell, if the loan is deemed collateral dependent. At

September 30, 2020

there were

commitments to lend additional funds to debtors whose loan terms have been modified as TDRs.

The general practice of the Bank is to work with borrowers so that they are able to pay back their loan in full. If a borrower continues to be delinquent or cannot meet the terms of a TDR modification and the loan is determined to be uncollectible, the loan will be charged off.

Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the

three

and

nine

months ended

September 30, 2020

and recorded investment in loans receivable as of

September 30, 2020 (

in thousands):

	September 30, 2020
	1-4 Family Residential Owner Occupied			1-4 Family Residential Non-Owner Occupied		Multi-Family Residential		Commercial Real Estate		Construction			Home Equity		Commercial Business and Other Consumer			Unallocated		Total
For the Three Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	43		$	399	$	204	$	1,229	$	114		$	25	$	537		$	100	$	2,651
Charge-offs		-			-		-		-		-			-		-			-		-
Recoveries		-			-		-		-		-			-		-			-		-
Provision		4			9		47		93		(1	)		2		(53	)		100		201
Ending balance	$	47		$	408	$	251	$	1,322	$	113		$	27	$	484		$	200	$	2,852

For the Nine Months Ended September 30, 2020
Allowance for loan losses:
Beginning balance	$	52		$	351	$	145	$	854	$	250		$	19	$	500		$	60	$	2,231
Charge-offs		-			-		-		-		-			-		-			-		-
Recoveries		-			-		-		-		-			-		-			-		-
Provision		(5	)		57		106		468		(137	)		8		(16	)		140		621
Ending balance	$	47		$	408	$	251	$	1,322	$	113		$	27	$	484		$	200	$	2,852

Ending balance evaluated for impairment:
Individually	$	-		$	-	$	-	$	-	$	-		$	-	$	-		$	-	$	3
Collectively	$	47		$	408	$	251	$	1,322	$	113		$	27	$	484		$	200	$	2,852

Loans receivable:
Ending balance:	$	5,385		$	40,872	$	22,814	$	128,965	$	7,512		$	4,103	$	141,216				$	350,867

Ending balance evaluated for impairment:
Individually	$	171		$	19	$	-	$	131	$	-		$	-	$	-				$	321
Collectively	$	5,214		$	40,853	$	22,814	$	128,834	$	7,512		$	4,103	$	141,216				$	350,546

The Bank allocated increased allowance for loan loss provisions to the commercial real estate loan portfolio class for the

three

and

nine

months ended

September 30, 2020,

due primarily to changes in volume and qualitative factors in this portfolio class. The Bank allocated increased allowance for loan loss provisions to the multi-family loan portfolio class for the

three

and

nine

months ended

September 30, 2020,

due primarily to changes in qualitative factors in this portfolio class. The Bank allocated decreased allowance for loan loss provisions to the commercial business loan portfolio class for the

three

months ended

September 30, 2020,

due primarily to changes in qualitative factors in this portfolio class. The Bank allocated decreased allowance for loan loss provisions to the construction loan class for the

nine

months ended

September 30, 2020,

due primarily to a decrease in balances and qualitative factors in this portfolio class. The Bank allocated increased allowance for loan loss provisions to the

family non-owner occupied loan portfolio class for the

nine

months ended

September 30, 2020,

due primarily to changes in qualitative factors in this portfolio class. In general, the primary driver of the increase in qualitative factors was the economic trends factor associated with the COVID-

pandemic. In this regard, the Bank increased the unallocated component of the allowance for the

three

and

nine

months ended

September 30, 2020

to cover uncertainties that could affect management's estimate of probable losses primarily associated with the COVI-

pandemic.

Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the

three

and

nine

months ended

September 30, 2019 (

in thousands):

	September 30, 201 9
	1-4 Family Residential Owner Occupied			1-4 Family Residential Non-Owner Occupied			Multi-Family Residential			Commercial Real Estate			Construction		Home Equity			Commercial Business and Other Consumer		Unallocated		Total
For the Three Months Ended September 30, 201 9
Allowance for loan losses:
Beginning balance	$	49		$	437		$	153		$	835		$	180	$	23		$	370	$	79	$	2,126
Charge-offs		-			-			-			-			-		-			-		-		-
Recoveries		-			-			-			-			-		-			-		-		-
Provision		(1	)		(20	)		(3	)		-			89		(3	)		74		21		157
Ending balance	$	48		$	417		$	150		$	835		$	269	$	20		$	444	$	100	$	2,283

For the Nine Months Ended September 30, 201 9
Allowance for loan losses:
Beginning balance	$	51		$	435		$	156		$	839		$	175	$	21		$	247	$	41	$	1,965
Charge-offs		-			-			-			-			-		-			-		-		-
Recoveries		-			-			-			-			-		-			-		-		-
Provision		(3	)		(18	)		(6	)		(4	)		94		(1	)		197		59		318
Ending balance	$	48		$	417		$	150		$	835		$	269	$	20		$	444	$	100	$	2,283

Ending balance evaluated for impairment:
Individually	$	-		$	50		$	-		$	4		$	-	$	-		$	-	$	-	$	54
Collectively	$	48		$	367		$	150		$	831		$	269	$	20		$	444	$	100	$	2,229

The Bank allocated increased allowance for loan loss provisions to the construction loan portfolio class and the commercial business portfolio class for the

three

and

nine

months ended

September 30, 2019,

due primarily to increased balances in these portfolio classes. The Bank allocated decreased allowance for loan loss provisions to the

family non-owner occupied loan portfolio class for the

three

and

nine

months ended

September 30, 2019,

due primarily to a decrease in balances in this portfolio class.

Following is a summary, by loan portfolio class, of changes in the allowance for loan losses for the year ended

December 31, 2019

and recorded investment in loans receivable based on impairment evaluation as of

December 31, 2019 (

in thousands):

	December 31, 201 9
	1-4 Family Residential Owner Occupied		1-4 Family Residential Non-Owner Occupied			Multi- Family Residential			Commercial Real Estate		Construction		Home Equity			Commercial Business and Other Consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	51	$	435		$	156		$	839	$	175	$	21		$	247	$	41	$	1,965
Charge-offs		-		(37	)		-			-		-		-			-		--		(37	)
Recoveries		-		-			-			-		-		-			-		--		-
Provision		1		(47	)		(11	)		15		75		(2	)		253		19		303
Ending balance	$	52	$	351		$	145		$	854	$	250	$	19		$	500	$	60	$	2,231

Ending balance evaluated for impairment:
Individually	$	-	$	-		$	-		$	4	$	-	$	-		$	-	$	-	$	4
Collectively	$	52	$	351		$	145		$	850	$	250	$	19		$	500	$	60	$	2,227

Loans receivable:
Ending balance	$	6,298	$	39,897		$	22,233		$	119,323	$	12,523	$	3,726		$	45,767			$	249,767

Ending balance evaluated for impairment:
Individually	$	172	$	19		$	-		$	132	$	-	$	-		$	-			$	323
Collectively	$	6,126	$	39,878		$	22,233		$	119,191	$	12,523	$	3,726		$	45,767			$	249,444

The Bank allocated increased allowance for loan loss provisions to the commercial business loan portfolio class, the construction loan portfolio class, and the commercial real estate loan portfolio class for the year ended

December 31, 2019,

due primarily to increased balances in these portfolio classes. The Bank allocated decreased allowance for loan loss provisions to the

family non-owner occupied loan portfolio class for the year ended

December 31, 2019,

due primarily to a decrease in balances in this portfolio class.

The following table presents nonaccrual loans by classes of the loan portfolio as of

September 30, 2020

and

December 31, 2019 (

in thousands):

	September 30 , 20 20		December 31, 201 9
One-to-four family residential owner occupied	$	171	$	172
One-to-four family residential non-owner occupied		19		-
Multi-family residential		-		-
Commercial real estate		-		-
Construction		-		-
Home equity		-		-
Commercial business		-		-
Other consumer		-		-
Total	$	190	$	172

Non-performing loans, which consist of non-accruing loans plus accruing loans

days or more past due, amounted to

$1.1

million and

$362,000

September 30, 2020

and

December 31, 2019,

respectively. For the delinquent loans in our portfolio, we have considered our ability to collect the past due interest, as well as the principal balance of the loan, in order to determine whether specific loans should be placed on non-accrual status. In cases where our evaluations have determined that the principal and interest balances are collectible, we have continued to accrue interest.

For the

three

and

nine

months ended

September 30, 2020

and

2019

there was

interest income recognized on non-accrual loans on a cash basis. Interest income foregone on non-accrual loans was approximately

$4,000

and

$10,000

for the

three

and

nine

months ended

September 30, 2020,

respectively. Interest income foregone on non-accrual loans was approximately

$18,000

and

$27,000

for the

three

and

nine

months ended

September 30, 2019,

respectively.

The performance and credit quality of the loan portfolio is also monitored by analyzing the age of the loans receivable as determined by the length of time a recorded payment is past due. The following tables present the classes of the loan portfolio summarized by the past due status as of

September 30, 2020

and

December 31, 2019 (

in thousands):

	September 30 , 20 20
	30- 89 Days Past Due		90 Days or M ore Pas t Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable 90 Days or More Past Due and Accruing
One-to-four family residential owner occupied	$	1,136	$	171	$	1,307	$	4,078	$	5,385	$	-
One-to-four family residential non-owner occupied		156		19		175		40,697		40,872		-
Multi-family residential		1,723		-		1,723		21,091		22,814		-
Commercial real estate		3,970		892		4,862		124,103		128,965		892
Construction		-		-		-		7,512		7,512		-
Home equity		96		-		96		4,007		4,103		-
Commercial business		145		-		145		141,061		141,206		-
Other consumer		-		-		-		10		10		-
Total	$	7,226	$	1,082	$	8,308	$	342,559	$	350,867	$	892

	December 31, 20 19
	30-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans Receivable		Loans Receivable 90 Days or More Past Due and Accruing

One-to-four family residential owner occupied	$	1,199	$	172	$	1,371	$	4,927	$	6,298	$	-
One-to-four family residential non-owner occupied		1,069		-		1,069		38,828		39,897		-
Multi-family residential		-		-		-		22,233		22,233		-
Commercial real estate		986		190		1,176		118,147		119,323		190
Construction		1,120		-		1,120		11,403		12,523		-
Home equity		-		-		-		3,726		3,726		-
Commercial business		66		-		66		45,679		45,745		-
Other consumer		-		-		-		22		22		-
Total	$	4,440	$	362	$	4,802	$	244,965	$	249,767	$	190