Loans Receivable

9 Months Ended

Mar. 31, 2022

. LOANS RECEIVABLE

The following table sets forth the composition of the Company’s loan portfolio at March 31, 2022 and June 30, 2021:


	March 31,			June 30,
	2022			2021
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,076,003		$	2,039,260
Nonresidential mortgage		1,085,988			1,079,444
Commercial business		169,551			168,951
Construction		121,137			93,804
Total commercial loans		3,452,679			3,381,459

One- to four-family residential mortgage		1,527,980			1,447,721

Consumer loans:
Home equity loans		41,501			47,871
Other consumer		2,755			3,259
Total consumer loans		44,256			51,130

Total loans		5,024,915			4,880,310

Unaccreted yield adjustments		(21,714	)		(28,916	)

Total loans receivable, net of yield adjustments	$	5,003,201		$	4,851,394

Past Due Loans

Past due status is based on the contractual payment terms of the loans. The following tables present the payment status of past due loans as of March 31, 2022 and June 30, 2021, by loan segment:


	Payment Status
	March 31, 2022
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	-	$	-	$	28,197	$	28,197	$	2,047,806	$	2,076,003
Nonresidential mortgage		2,101		-		25,283		27,384		1,058,604		1,085,988
Commercial business		-		64		281		345		169,206		169,551
Construction		-		-		-		-		121,137		121,137
One- to four-family residential mortgage		3,410		520		2,968		6,898		1,521,082		1,527,980
Home equity loans		25		4		59		88		41,413		41,501
Other consumer		-		-		-		-		2,755		2,755
Total loans	$	5,536	$	588	$	56,788	$	62,912	$	4,962,003	$	5,024,915


	Payment Status
	June 30, 2021
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	-	$	-	$	16,094	$	16,094	$	2,023,166	$	2,039,260
Nonresidential mortgage		-		-		32,891		32,891		1,046,553		1,079,444
Commercial business		-		-		401		401		168,550		168,951
Construction		-		-		-		-		93,804		93,804
One- to four-family residential mortgage		382		2,734		5,104		8,220		1,439,501		1,447,721
Home equity loans		6		5		32		43		47,828		47,871
Other consumer		1		-		-		1		3,258		3,259
Total loans	$	389	$	2,739	$	54,522	$	57,650	$	4,822,660	$	4,880,310

Nonperforming Loans

Loans are generally placed on nonaccrual status when contractual payments become 90 or more days past due or when the Company does not expect to receive all principal and interest payments owed substantially in accordance with the terms of the loan agreement, regardless of past due status. Loans that become 90 days past due, but are well secured and in the process of collection, may remain on accrual status. Nonaccrual loans are generally returned to accrual status when all payments due are brought current and the Company expects to receive all remaining principal and interest payments owed substantially in accordance with the terms of the loan agreement. Payments received in cash on nonaccrual loans, including both the principal and interest portions of those payments, are generally applied to reduce the carrying value of the loan. The Company did not recognize interest income on non-accrual loans during the three months and nine months ended March 31, 2022 and 2021.

The following tables present information relating to the Company’s nonperforming loans as of March 31, 2022 and June 30, 2021:


	Performance Status
	March 31, 2022
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	-	$	11,369	$	28,646	$	40,015	$	2,035,988	$	2,076,003
Nonresidential mortgage		-		3,667		24,523		28,190		1,057,798		1,085,988
Commercial business		-		63		430		493		169,058		169,551
Construction		-		-		1,791		1,791		119,346		121,137
One- to four-family residential mortgage		-		4,376		4,241		8,617		1,519,363		1,527,980
Home equity loans		-		313		1,176		1,489		40,012		41,501
Other consumer		-		-		-		-		2,755		2,755
Total loans	$	-	$	19,788	$	60,807	$	80,595	$	4,944,320	$	5,024,915


	Performance Status
	June 30, 2021
	90 Days and Over Past Due Accruing		Nonaccrual Loans with Allowance for Credit Losses		Nonaccrual Loans with no Allowance for Credit Losses		Total Nonperforming		Performing		Total
	(In Thousands)
Multi-family mortgage	$	-	$	8,300	$	10,226	$	18,526	$	2,020,734	$	2,039,260
Nonresidential mortgage		-		12,612		24,575		37,187		1,042,257		1,079,444
Commercial business		-		236		676		912		168,039		168,951
Construction		-		-		2,228		2,228		91,576		93,804
One- to four-family residential mortgage		-		7,422		11,748		19,170		1,428,551		1,447,721
Home equity loans		-		452		1,292		1,744		46,127		47,871
Other consumer		-		-		-		-		3,259		3,259
Total loans	$	-	$	29,022	$	50,745	$	79,767	$	4,800,543	$	4,880,310

Troubled Debt Restructurings (“TDRs”)

TDRs are loans where the Company has modified the contractual terms of the loan as a result of the financial condition of the borrower. Subsequent to their modification, TDRs are placed on non-accrual until such time as satisfactory payment performance has been demonstrated, at which time the loan may be returned to accrual status. On a case-by-case basis, the Company may agree to modify the contractual terms of a loan to assist a borrower who may be experiencing financial difficulty, as well as to preserve the Company’s position in the loan. If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a TDR. The Company had TDRs totaling $31.7 million and $17.8 million as of March 31, 2022 and June 30, 2021, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $672,000 and $256,000 as of March 31, 2022 and June 30, 2021, respectively. As of March 31, 2022, there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a TDR.

The following tables present total TDR loans at March 31, 2022 and June 30, 2021:


	March 31, 2022
	Accrual				Non-accrual				Total
	# of Loans		Amount		# of Loans		Amount		# of Loans		Amount
	(Dollars In Thousands)
Commercial loans:
Multi-family mortgage		-	$	-		3	$	14,605		3	$	14,605
Nonresidential mortgage		4		400		2		1,646		6		2,046
Commercial business		5		3,704		3		325		8		4,029
Construction		-		-		1		1,791		1		1,791
Total commercial loans		9		4,104		9		18,367		18		22,471

One- to four-family residential mortgage		29		4,270		15		3,392		44		7,662

Consumer loans:
Home equity loans		5		170		2		1,396		7		1,566
Total		43	$	8,544		26	$	23,155		69	$	31,699


	June 30, 2021
	Accrual				Non-accrual				Total
	# of Loans		Amount		# of Loans		Amount		# of Loans		Amount
	(Dollars In Thousands)
Commercial loans:
Multi-family mortgage		-	$	-		1	$	2,896		1	$	2,896
Nonresidential mortgage		1		105		6		2,275		7		2,380
Commercial business		3		3,755		6		693		9		4,448
Construction		-		-		1		2,228		1		2,228
Total commercial loans		4		3,860		14		8,092		18		11,952

One- to four-family residential mortgage		18		2,216		20		3,405		38		5,621

Consumer loans:
Home equity loans		4		159		3		68		7		227
Total		26	$	6,235		37	$	11,565		63	$	17,800

The following tables present information regarding troubled debt restructurings that occurred during the three months and nine months ended March 31, 2022 and 2021:


	Three Months Ended March 31, 2022						Nine Months Ended March 31, 2022
	# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment		# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment
	(Dollars In Thousands)
Multi-family mortgage		1	$	9,104	$	9,101		2	$	12,091	$	12,073
One- to four-family residential mortgage		8		2,953		2,965		10		3,214		3,226
Home equity loans		2		1,477		1,477		2		1,477		1,477
Total		11	$	13,534	$	13,543		14	$	16,782	$	16,776


	Three Months Ended March 31, 2021						Nine Months Ended March 31, 2021
	# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment		# of Loans		Pre- modification Recorded Investment		Post- modification Recorded Investment
	(Dollars In Thousands)
One- to four-family residential mortgage		-	$	-	$	-		1	$	309	$	308
Home equity loans		1		24		24		1		24		24
Total		1	$	24	$	24		2	$	333	$	332

During the three months and nine months ended March 31, 2022 and 2021, there were no charge-offs related to TDRs. During the three months and nine months ended March 31, 2022 and 2021, there were no defaults of TDRs.

Loan modifications generally involve a reduction in interest rates and/or extension of maturity dates and also may include step up interest rates in their modified terms which will impact their weighted average yield in the future. The loans which qualified as TDRs during the three months and nine months ended March 31, 2022 and 2021, capitalized prior past due amounts and modified the repayment terms.

In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System (the “FRB”) and the Federal Deposit Insurance Corporation (the “FDIC”), issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the FASB that short-term modifications, made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, were not to be considered TDRs. This included short-term modifications such as payment deferrals, fee waivers, extension of repayment terms, or other delays in payment that were insignificant. Provisions of the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) largely mirrored the provisions of the interagency statement, providing that modified loans were not to be considered TDRs if they were performing at December 31, 2019 and other considerations set forth in the interagency statements were met. Borrowers considered current are those that were less than 30 days past due at the time a modification program was implemented or at December 31, 2019.

On December 27, 2020, the 2021 Consolidated Appropriations Act was signed into law. The $900 billion relief package included legislation that extended certain relief provisions of the CARES Act that were set to expire on December 31, 2020. The relief expired on January 1, 2022. As of March 31, 2022, the Company did not have any non-TDR loan modifications granted under the CARES Act.

Individually Analyzed Loans

Effective July 1, 2020, individually analyzed loans include loans which do not share similar risk characteristics with other loans. TDRs will generally be evaluated for individual impairment, however, after a period of sustained repayment performance which permits the credit to be returned to accrual status, a TDR would generally be removed from individual impairment analysis and returned to its corresponding pool. As of March 31, 2022, the carrying value of individually analyzed loans totaled $82.7 million, of which $65.1 million were considered collateral dependent.

For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans.

The following table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated:


	March 31, 2022				June 30, 2021
	Carrying Value		Related Allowance		Carrying Value		Related Allowance
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	31,078	$	661	$	18,526	$	1,368
Nonresidential mortgage (1)		27,384		119		32,891		4,724
Commercial business (2)		176		-		183		-
Construction		1,791		-		-		-
Total commercial loans		60,429		780		51,600		6,092

One- to four-family residential mortgage (3)		4,581		196		7,612		420

Consumer loans:
Home equity loans (3)		59		-		31		-

Total	$	65,069	$	976	$	59,243	$	6,512

(1)

Secured by income-producing nonresidential property.

(2)

Secured by business assets.

(3)

Secured by one- to four-family residential properties.

Credit Quality Indicators

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually to classify the loans as to credit risk. The Company uses the following definitions for risk ratings:

Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner.

Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses.

Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values.

Loss – Loans which are considered uncollectible or of so little value that their continuance as assets is not warranted.

The following table presents the risk category of loans as of March 31, 2022 by loan segment and vintage year:


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2022		2021		2020		2019		2018		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	520,269	$	263,316	$	216,072	$	256,541	$	252,909	$	500,758	$	-	$	2,009,865
Special Mention		-		-		-		16,370		4,994		4,759		-		26,123
Substandard		-		-		-		10,182		2,788		27,045		-		40,015
Doubtful		-		-		-		-		-		-		-		-
Total multi-family mortgage		520,269		263,316		216,072		283,093		260,691		532,562		-		2,076,003
Nonresidential mortgage:
Pass		201,205		86,212		64,161		37,706		51,884		569,499		6,087		1,016,754
Special Mention		-		-		-		23,364		4,070		9,249		-		36,683
Substandard		-		724		-		933		-		30,894		-		32,551
Doubtful		-		-		-		-		-		-		-		-
Total nonresidential mortgage		201,205		86,936		64,161		62,003		55,954		609,642		6,087		1,085,988
Commercial business:
Pass		36,918		39,481		12,441		3,961		9,147		7,370		54,513		163,831
Special Mention		-		-		65		189		2,173		895		216		3,538
Substandard		-		39		230		-		1,422		285		58		2,034
Doubtful		-		-		-		-		-		145		3		148
Total commercial business		36,918		39,520		12,736		4,150		12,742		8,695		54,790		169,551
Construction loans:
Pass		7,868		85,564		9,492		3,058		6,513		1,117		5,735		119,347
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		1,790		-		1,790
Doubtful		-		-		-		-		-		-		-		-
Total construction loans		7,868		85,564		9,492		3,058		6,513		2,907		5,735		121,137
Residential mortgage:
Pass		312,625		531,111		90,576		53,262		56,834		464,738		375		1,509,521
Special Mention		-		-		-		1,213		-		439		-		1,652
Substandard		-		-		1,704		83		-		15,020		-		16,807
Doubtful		-		-		-		-		-		-		-		-
Total residential mortgage		312,625		531,111		92,280		54,558		56,834		480,197		375		1,527,980
Home equity loans:
Pass		1,759		715		1,744		3,245		2,125		7,552		22,156		39,296
Special Mention		-		-		-		-		-		265		-		265
Substandard		-		-		-		124		-		1,816		-		1,940
Doubtful		-		-		-		-		-		-		-		-
Total home equity loans		1,759		715		1,744		3,369		2,125		9,633		22,156		41,501
Other consumer loans
Pass		281		324		477		398		247		913		40		2,680
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		75		75
Other consumer loans		281		324		477		398		247		913		115		2,755
Total loans	$	1,080,925	$	1,007,486	$	396,962	$	410,629	$	395,106	$	1,644,549	$	89,258	$	5,024,915

The following table presents the risk category of loans as of June 30, 2021 by loan segment and vintage year:


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2021		2020		2019		2018		2017		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	281,402	$	257,970	$	374,871	$	341,304	$	343,370	$	374,909	$	-	$	1,973,826
Special Mention		-		-		26,974		5,079		4,834		1,054		-		37,941
Substandard		-		-		-		2,896		13,198		11,399		-		27,493
Doubtful		-		-		-		-		-		-		-		-
Total multi-family mortgage		281,402		257,970		401,845		349,279		361,402		387,362		-		2,039,260
Nonresidential mortgage:
Pass		99,602		77,146		56,435		64,616		254,940		441,696		6,150		1,000,585
Special Mention		-		-		23,520		4,146		8,801		4,513		-		40,980
Substandard		743		-		-		4,934		20,602		11,600		-		37,879
Doubtful		-		-		-		-		-		-		-		-
Total nonresidential mortgage		100,345		77,146		79,955		73,696		284,343		457,809		6,150		1,079,444
Commercial business:
Pass		44,514		18,988		4,701		12,654		3,322		12,892		65,657		162,728
Special Mention		-		-		-		2,304		945		12		461		3,722
Substandard		41		76		160		1,474		132		189		-		2,072
Doubtful		-		-		-		-		-		420		9		429
Total commercial business		44,555		19,064		4,861		16,432		4,399		13,513		66,127		168,951
Construction loans:
Pass		40,332		17,404		11,203		13,860		1,641		1,382		5,735		91,557
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		2,247		-		2,247
Doubtful		-		-		-		-		-		-		-		-
Total construction loans		40,332		17,404		11,203		13,860		1,641		3,629		5,735		93,804
Residential mortgage:
Pass		560,543		124,606		69,917		74,754		119,238		472,587		375		1,422,020
Special Mention		-		-		1,233		-		-		712		-		1,945
Substandard		-		1,040		671		511		1,468		20,066		-		23,756
Doubtful		-		-		-		-		-		-		-		-
Total residential mortgage		560,543		125,646		71,821		75,265		120,706		493,365		375		1,447,721
Home equity loans:
Pass		834		2,508		4,585		2,778		2,241		7,798		24,788		45,532
Special Mention		-		-		-		-		-		393		-		393
Substandard		-		-		-		-		11		1,935		-		1,946
Doubtful		-		-		-		-		-		-		-		-
Total home equity loans		834		2,508		4,585		2,778		2,252		10,126		24,788		47,871
Other consumer loans
Pass		550		517		633		256		127		1,044		44		3,171
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		1		1
Doubtful		-		-		-		-		-		-		87		87
Other consumer loans		550		517		633		256		127		1,044		132		3,259
Total loans	$	1,028,561	$	500,255	$	574,903	$	531,566	$	774,870	$	1,366,848	$	103,307	$	4,880,310

Residential Mortgage Loans in Foreclosure

The Company may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan via foreclosure or through an in-substance repossession. As of March 31, 2022, the Company held two single-family properties in other real estate owned with an aggregate carrying value of $401,000 that were acquired through foreclosure on residential mortgage loans. As of that same date, the Company held eight residential mortgage loans with aggregate carrying values totaling $1.6 million which were in the process of foreclosure. As of June 30, 2021, the Company held one single-family property in other real estate owned with an aggregate carrying value of $178,000 that was acquired through a foreclosure on a residential mortgage loan. As of that same date, the Company held 11 residential mortgage loans with aggregate carrying values totaling $2.1 million which were in the process of foreclosure.

New Jersey’s moratorium on evictions ended on December 31, 2021. Under New Jersey’s new eviction protections for people under certain income levels, no evictions may occur now or in the future based on rent due during the time period of March 1, 2020 through August 31, 2021, for certain moderate income families, or March 1, 2020 through December 31, 2021 for certain low income families. The moratorium on home foreclosures ended on November 15, 2021, for all income levels. This included landlords facing foreclosure who currently have tenants. New York’s moratorium on evictions for tenants who have endured COVID-related hardships and on foreclosures ended on January 15, 2022. As a result, the Company has resumed residential property foreclosure sales and evictions. Eviction laws may be subject to legal challenges and could change based on the results of court proceedings.