Loans Receivable

12 Months Ended

Jun. 30, 2022

Note 5 – Loans Receivable

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


	June 30,			June 30,
	2022			2021
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,409,090		$	2,039,260
Nonresidential mortgage		1,019,838			1,079,444
Commercial business		176,807			168,951
Construction		140,131			93,804
Total commercial loans		3,745,866			3,381,459

One- to four-family residential mortgage		1,645,816			1,447,721

Consumer loans:
Home equity loans		42,028			47,871
Other consumer		2,866			3,259
Total consumer loans		44,894			51,130

Total loans		5,436,576			4,880,310

Unaccreted yield adjustments		(18,731	)		(28,916	)

Total loans receivable, net of yield adjustments	$	5,417,845		$	4,851,394

The Bank has granted loans to officers and directors of the Company and its subsidiaries and to their associates. As of June 30, 2022 and 2021, such loans totaled approximately $2.6 million and $1.4 million, respectively. During the year ended June 30, 2022, the Bank granted two new loans to related parties totaling $1.8 million. During the year ended June 30, 2021, the Bank granted one new loan to related parties totaling $478,000.

Note 5 – Loans Receivable (continued)

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 June 30, 2022 and June 30, 2021, by loan segment:


	Payment Status
	June 30, 2022
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	3,148	$	3,056	$	7,788	$	13,992	$	2,395,098	$	2,409,090
Nonresidential mortgage		4,026		-		18,132		22,158		997,680		1,019,838
Commercial business		98		57		155		310		176,497		176,807
Construction		-		-		-		-		140,131		140,131
One- to four-family residential mortgage		1,525		253		3,455		5,233		1,640,583		1,645,816
Home equity loans		28		35		-		63		41,965		42,028
Other consumer		-		-		-		-		2,866		2,866
Total loans	$	8,825	$	3,401	$	29,530	$	41,756	$	5,394,820	$	5,436,576


	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 P&I payment 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 P&I 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 years ended June 30, 2022, 2021 and 2020.

Note 5 – Loans Receivable (continued)

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


	Performance Status
	June 30, 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	$	-	$	8,367	$	18,286	$	26,653	$	2,382,437	$	2,409,090
Nonresidential mortgage		-		12,602		19,292		31,894		987,944		1,019,838
Commercial business		-		212		81		293		176,514		176,807
Construction		-		-		1,561		1,561		138,570		140,131
One- to four-family residential mortgage		-		3,543		4,946		8,489		1,637,327		1,645,816
Home equity loans		-		302		1,129		1,431		40,597		42,028
Other consumer		-		-		-		-		2,866		2,866
Total loans	$	-	$	25,026	$	45,295	$	70,321	$	5,366,255	$	5,436,576


	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

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 $22.2 million and $17.8 million as of June 30, 2022 and June 30, 2021, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $365,000 and $256,000 as of June 30, 2022 and June 30, 2021, respectively. As of June 30, 2022, there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a TDR.

Note 5 – Loans Receivable (continued)

The following tables present total TDRs at June 30, 2022 and June 30, 2021:


	June 30, 2022
	Accrual				Non-accrual				Total
	# of Loans		Amount		# of Loans		Amount		# of Loans		Amount
	(Dollars In Thousands)
Commercial loans:
Multi-family mortgage		-	$	-		2	$	5,626		2	$	5,626
Nonresidential mortgage		4		389		2		1,565		6		1,954
Commercial business		5		3,631		2		82		7		3,713
Construction		-		-		1		1,561		1		1,561
Total commercial loans		9		4,020		7		8,834		16		12,854

One- to four-family residential mortgage		29		4,488		16		3,314		45		7,802

Consumer loans:
Home equity loans		5		164		2		1,364		7		1,528
Total		43	$	8,672		25	$	13,512		68	$	22,184


	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

Note 5 – Loans Receivable (continued)

The following table presents information regarding TDRs that occurred during the years ended June 30, 2022 and 2021:


	Year Ended June 30, 2022						Year Ended June 30, 2021
	# 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		2	$	12,091	$	12,073		-	$	-	$	-
One- to four-family residential mortgage		13		3,812		3,924		4		877		881
Home equity loans		2		1,477		1,477		3		70		70
Total		17	$	17,380	$	17,474		7	$	947	$	951

During the years ended June 30, 2022 and June 30, 2021, there were no charge-offs related to TDRs. During the year ended June 30, 2022, there were three TDR defaults totaling $305,000. During the year ended June 30, 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 year ended June 30, 2022, capitalized prior past due amounts, reduced the interest rate or modified the repayment terms.

In March 2020, various regulatory agencies, including the Board of Governors of the FRB and 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, are 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 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 were 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 CAA 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 to January 1, 2022. As of June 30, 2022, the Company did not have any non-TDR loan modifications granted under the CARES Act.

Note 5 – Loans Receivable (continued)

Individually Analyzed Loans

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 June 30, 2022, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $70.3 million, of which $63.3 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 18 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:


	June 30, 2022				June 30, 2021
	Carrying Value		Related Allowance		Carrying Value		Related Allowance
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	26,653	$	849	$	18,526	$	1,368
Nonresidential mortgage (1)		30,733		2,696		32,891		4,724
Commercial business (2)		-		-		183		-
Construction		1,561		-		-		-
Total commercial loans		58,947		3,545		51,600		6,092

One- to four-family residential mortgage (3)		4,305		77		7,612		420

Consumer loans:
Home equity loans (3)		35		-		31		-

Total	$	63,287	$	3,622	$	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 considered uncollectible or of so little value that their continuance as assets is not warranted.

Note 5 – Loans Receivable (continued)

The following table presents the risk category of loans as of June 30, 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	$	963,263	$	250,385	$	211,101	$	264,174	$	248,058	$	438,642	$	-	$	2,375,623
Special Mention		-		-		-		-		-		6,814		-		6,814
Substandard		-		-		-		9,821		5,935		10,897		-		26,653
Doubtful		-		-		-		-		-		-		-		-
Total multi-family mortgage		963,263		250,385		211,101		273,995		253,993		456,353		-		2,409,090
Nonresidential mortgage:
Pass		231,777		87,309		53,983		60,714		49,285		491,849		6,052		980,969
Special Mention		-		-		-		-		-		591		-		591
Substandard		-		720		-		933		4,026		32,599		-		38,278
Doubtful		-		-		-		-		-		-		-		-
Total nonresidential mortgage		231,777		88,029		53,983		61,647		53,311		525,039		6,052		1,019,838
Commercial business:
Pass		46,888		38,791		12,155		3,581		4,861		6,455		58,662		171,393
Special Mention		-		-		62		186		2,173		873		215		3,509
Substandard		-		38		319		-		1,347		61		58		1,823
Doubtful		-		-		-		-		-		80		2		82
Total commercial business		46,888		38,829		12,536		3,767		8,381		7,469		58,937		176,807
Construction loans:
Pass		16,407		95,526		10,337		3,039		6,509		1,017		5,735		138,570
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		1,561		-		1,561
Doubtful		-		-		-		-		-		-		-		-
Total construction loans		16,407		95,526		10,337		3,039		6,509		2,578		5,735		140,131
Residential mortgage:
Pass		472,160		524,163		88,645		49,316		55,139		442,517		374		1,632,314
Special Mention		-		-		-		1,205		-		621		-		1,826
Substandard		-		-		-		83		-		11,593		-		11,676
Doubtful		-		-		-		-		-		-		-		-
Total residential mortgage		472,160		524,163		88,645		50,604		55,139		454,731		374		1,645,816
Home equity loans:
Pass		3,197		692		1,681		3,117		2,027		7,321		22,334		40,369
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		120		-		1,539		-		1,659
Doubtful		-		-		-		-		-		-		-		-
Total home equity loans		3,197		692		1,681		3,237		2,027		8,860		22,334		42,028
Other consumer loans
Pass		442		308		471		375		258		895		34		2,783
Special Mention		-		-		-		-		-		-		-		-
Substandard		-		-		-		-		-		-		-		-
Doubtful		-		-		-		-		-		-		83		83
Other consumer loans		442		308		471		375		258		895		117		2,866
Total loans	$	1,734,134	$	997,932	$	378,754	$	396,664	$	379,618	$	1,455,925	$	93,549	$	5,436,576

Note 5 – Loans Receivable (continued)

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

Note 5 – Loans Receivable (continued)

Purchased Credit Deteriorated Loans

PCD loans are acquired loans that, as of the acquisition date, have experienced a more-than-insignificant deterioration in credit quality since origination. Non-PCD loans are acquired loans that have experienced no or insignificant deterioration in credit quality since origination. To distinguish between the two types of acquired loans, the Company evaluates risk characteristics that have been determined to be indicators of deteriorated credit quality. The determining criteria may involve loan specific characteristics such as payment status, debt service coverage or other changes in creditworthiness since the loan was originated, while others are relevant to recent economic conditions, such as borrowers in industries impacted by the pandemic.

As part of the acquisition of MSB, the Company purchased loans, for which there was, at acquisition, evidence of more than insignificant deterioration of credit quality since origination. The carrying amount of those loans is as follows:


	At July 10, 2020
	(In Thousands)
Purchase price of PCD loans at acquisition	$	65,347
Allowance for credit losses at acquisition		3,901
Non-credit discount at acquisition		167
Par value of acquired PCD loans at acquisition	$	69,415

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 June 30, 2022, we held one single-family property in other real estate owned with an aggregate carrying value of $178,000 that was acquired through foreclosure on a residential mortgage loan. As of that same date, we held seven residential mortgage loans with aggregate carrying values totaling $1.5 million which were in the process of foreclosure. As of June 30, 2021, we 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, we held 11 residential mortgage loans with aggregate carrying values totaling $2.1 million which were in the process of foreclosure.

The States of New Jersey and New York had issued executive orders and enacted legislation declaring moratoriums on removing individuals from a residential property as a result of an eviction or foreclosure proceeding. New Jersey’s moratorium on evictions ended on December 31, 2021 and the moratorium on home foreclosures ended on November 15, 2021. 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.