LOANS RECEIVABLE

9 Months Ended

Mar. 31, 2023

The following table sets forth the composition of the Company’s loan portfolio at March 31, 2023 and June 30, 2022:


	March 31, 2023		June 30, 2022
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	2,835,852	$	2,409,090
Nonresidential mortgage	1,002,643		1,019,838
Commercial business	162,038		176,807
Construction	215,524		140,131
Total commercial loans	4,216,057		3,745,866

One- to four-family residential mortgage	1,713,343		1,645,816

Consumer loans:
Home equity loans	44,376		42,028
Other consumer	2,592		2,866
Total consumer loans	46,968		44,894

Total loans	5,976,368		5,436,576

Unaccreted yield adjustments (1)	(10,043)		(18,731)

Total loans receivable, net of yield adjustments	$	5,966,325	$	5,417,845

___________________________

(1)At March 31, 2023, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans.

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, 2023 and June 30, 2022, by loan segment:


	Payment Status March 31, 2023
	30-59 Days		60-89 Days		90 Days and Over		Total Past Due		Current		Total
	(In Thousands)
Multi-family mortgage	$	—	$	3,940	$	7,659	$	11,599	$	2,824,253	$	2,835,852
Nonresidential mortgage	3,842		—		5,669		9,511		993,132		1,002,643
Commercial business	—		—		264		264		161,774		162,038
Construction	—		—		—		—		215,524		215,524
One- to four-family residential mortgage	2,961		852		2,896		6,709		1,706,634		1,713,343
Home equity loans	51		—		47		98		44,278		44,376
Other consumer	39		—		—		39		2,553		2,592
Total loans	$	6,893	$	4,792	$	16,535	$	28,220	$	5,948,148	$	5,976,368


	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

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 nine months ended March 31, 2023 and 2022.

The following tables present information relating to the Company’s nonperforming loans as of March 31, 2023 and June 30, 2022:


	Performance Status March 31, 2023
	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	$	—	$	5,762	$	14,312	$	20,074	$	2,815,778	$	2,835,852
Nonresidential mortgage	—		12,337		5,285		17,622		985,021		1,002,643
Commercial business	—		86		185		271		161,767		162,038
Construction	—		—		—		—		215,524		215,524
One- to four-family residential mortgage	—		1,025		4,984		6,009		1,707,334		1,713,343
Home equity loans	—		—		50		50		44,326		44,376
Other consumer	—		—		—		—		2,592		2,592
Total loans	$	—	$	19,210	$	24,816	$	44,026	$	5,932,342	$	5,976,368


	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

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 $17.9 million and $22.2 million as of March 31, 2023 and June 30, 2022, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $295,000 and $365,000 as of March 31, 2023 and June 30, 2022, respectively. As of March 31, 2023, the Company had commitments to lend additional funds totaling $23,000 to borrowers whose loans had been restructured in a TDR.

The following tables present total TDR loans at March 31, 2023 and June 30, 2022:


	March 31, 2023
	Accrual			Non-accrual			Total
	# of Loans	Amount		# of Loans	Amount		# of Loans	Amount
	(Dollars In Thousands)
Commercial loans:
Multi-family mortgage	—	$	—	2	$	5,470	2	$	5,470
Nonresidential mortgage	3	177		1	384		4	561
Commercial business	5	3,555		1	6		6	3,561
Construction	—	—		—	—		—	—
Total commercial loans	8	3,732		4	5,860		12	9,592

One- to four-family residential mortgage	35	6,068		9	1,848		44	7,916

Consumer loans:
Home equity loans	6	391		—	—		6	391
Total	49	$	10,191	13	$	7,708	62	$	17,899


	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

The following tables present information regarding TDRs that occurred during the three months and nine months ended March 31, 2023 and 2022:


	Three Months Ended March 31, 2023					Three 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
Commercial business	1	67		67		—	—		—
One- to four-family residential mortgage	—	—		—		8	2,953		2,965
Home equity loans	—	—		—		2	1,477		1,477
Total	1	$	67	$	67	11	$	13,534	$	13,543


	Nine Months Ended March 31, 2023					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	—	$	—	$	—	2	$	12,091	$	12,073
Commercial business	2	74		74		—	—		—
One- to four-family residential mortgage	2	708		705		10	3,214		3,226
Home equity loans	1	35		35		2	1,477		1,477
Total	5	$	817	$	814	14	$	16,782	$	16,776

During the three months and nine months ended March 31, 2023, there were charge-offs of $6,000 and $103,000, respectively, related to TDRs. During the three months and nine months ended March 31, 2022, there were no charge-offs related to TDRs. During the three months and nine months ended March 31, 2023, there were two TDR defaults totaling $649,000. During the three months and nine months ended March 31, 2022, 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, 2023 and 2022, capitalized prior past due amounts and modified the repayment terms.

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 March 31, 2023, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $44.0 million, of which $40.7 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 allowance for credit losses 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, 2023				June 30, 2022
	Carrying Value		Related Allowance		Carrying Value		Related Allowance
	(In Thousands)
Commercial loans:
Multi-family mortgage	$	20,074	$	266	$	26,653	$	849
Nonresidential mortgage (1)	17,284		2,166		30,733		2,696

Construction	—		—		1,561		—
Total commercial loans	37,358		2,432		58,947		3,545

One- to four-family residential mortgage (2)	3,299		—		4,305		77

Consumer loans:
Home equity loans (2)	—		—		35		—

Total	$	40,657	$	2,432	$	63,287	$	3,622

___________________________

(1)Secured by income-producing nonresidential property.

(2)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, 2023 by loan segment and vintage year:


	Term Loans by Origination Year for Fiscal Years ended June 30,
	2023		2022		2021		2020		2019		Prior		Revolving Loans		Total
	(In Thousands)
Multi-family mortgage:
Pass	$	604,750	$	955,969	$	234,731	$	201,324	$	245,571	$	538,279	$	—	$	2,780,624
Special Mention	—		—		—		—		6,043		6,689		—		12,732
Substandard	—		—		9,865		—		9,469		23,162		—		42,496
Doubtful	—		—		—		—		—		—		—		—
Total multi-family mortgage	604,750		955,969		244,596		201,324		261,083		568,130		—		2,835,852
Nonresidential mortgage:
Pass	100,886		226,384		83,630		52,276		59,582		449,241		6,000		977,999
Special Mention	—		—		—		—		—		381		—		381
Substandard	—		—		711		—		925		22,627		—		24,263
Doubtful	—		—		—		—		—		—		—		—
Total nonresidential mortgage	100,886		226,384		84,341		52,276		60,507		472,249		6,000		1,002,643
Commercial business:
Pass	13,025		29,649		23,154		8,852		1,831		8,342		67,093		151,946
Special Mention	—		5,141		—		—		178		2,834		—		8,153
Substandard	—		—		—		265		46		1,382		246		1,939
Doubtful	—		—		—		—		—		—		—		—
Total commercial business	13,025		34,790		23,154		9,117		2,055		12,558		67,339		162,038
Construction loans:
Pass	17,507		32,334		137,660		12,275		2,980		7,033		5,735		215,524
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		—		—
Total construction loans	17,507		32,334		137,660		12,275		2,980		7,033		5,735		215,524
Residential mortgage:
Pass	170,816		459,680		501,615		82,492		46,589		439,128		—		1,700,320
Special Mention	—		—		—		—		1,176		1,053		—		2,229
Substandard	—		549		—		—		80		10,165		—		10,794
Doubtful	—		—		—		—		—		—		—		—
Total residential mortgage	170,816		460,229		501,615		82,492		47,845		450,346		—		1,713,343
Home equity loans:
Pass	7,652		2,627		622		1,321		2,575		7,763		21,419		43,979
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		93		304		—		397
Doubtful	—		—		—		—		—		—		—		—
Total home equity loans	7,652		2,627		622		1,321		2,668		8,067		21,419		44,376
Other consumer loans
Pass	338		262		125		452		325		969		44		2,515
Special Mention	—		—		—		—		—		—		—		—
Substandard	—		—		—		—		—		—		—		—
Doubtful	—		—		—		—		—		—		77		77
Other consumer loans	338		262		125		452		325		969		121		2,592
Total loans	$	914,974	$	1,712,595	$	992,113	$	359,257	$	377,463	$	1,519,352	$	100,614	$	5,976,368

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

Mortgage Loans in Foreclosure

The Company may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan or nonresidential real estate collateralizing a nonresidential mortgage loan via foreclosure or through an in-substance repossession. As of March 31, 2023, the Company held two single-family properties with an aggregate carrying value of $454,000 and one nonresidential property with a carrying value of $13.0 million in other real estate owned that were acquired through foreclosure on residential mortgage loans and a nonresidential mortgage loan, respectively. As of that same date, the Company held five residential mortgage loans with aggregate carrying values totaling $950,000 and six commercial mortgage loans with aggregate carrying values totaling $9.3 million which were in the process of foreclosure. As of June 30, 2022, 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 seven residential mortgage loans with aggregate carrying values totaling $1.5 million which were in the process of foreclosure.