XML 24 R13.htm IDEA: XBRL DOCUMENT v3.20.2
Loans Receivable and Allowance for Loan Losses
 9 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Loans Receivable and Allowance for Loan Losses

Note 5.

Loans Receivable and Allowance for Loan Losses

Loans receivable (excluding mortgage loans held for sale, at fair value) at September 30, 2020 and December 31, 2019 are summarized as follows:

 

 

 

September 30,

 

 

December 31,

 

 

 

2020

 

 

2019

 

Mortgage loans:

 

 

 

 

 

 

 

 

1-4 Family residential

 

 

 

 

 

 

 

 

Investor-Owned

 

$

320,438

 

 

$

305,272

 

Owner-Occupied

 

 

93,340

 

 

 

91,943

 

Multifamily residential

 

 

284,775

 

 

 

250,239

 

Nonresidential properties

 

 

217,771

 

 

 

207,225

 

Construction and land

 

 

99,721

 

 

 

99,309

 

Nonmortgage loans:

 

 

 

 

 

 

 

 

Business loans (1)

 

 

96,700

 

 

 

10,877

 

Consumer loans (2)

 

 

9,806

 

 

 

1,231

 

 

 

 

1,122,551

 

 

 

966,096

 

Net deferred loan origination costs

 

 

786

 

 

 

1,970

 

Allowance for loan losses

 

 

(14,381

)

 

 

(12,329

)

Loans receivable, net

 

$

1,108,956

 

 

$

955,737

 

 

 

(1)

As of September 30, 2020, business loans include $86,165 of Paycheck Protection Program (“PPP”) loans.

 

(2)

As of September 30, 2020, consumer loans include $8,668 related to Grain Technologies, LLC. Refer to Management’s Discussion and Analysis of Financial Conditions and Results of Operations for further discussion on Grain Technologies, LLC.

Note 5.

Loans Receivable and Allowance for Loan Losses (Continued)

The Company’s lending activities are conducted principally in metropolitan New York City area and to a lesser extent in Florida, California and Pennsylvania. The Company primarily grants loans secured by real estate to individuals and businesses pursuant to an established credit policy applicable to each type of lending activity in which it engages. Although collateral provides assurance as a secondary source of repayment, the Company ordinarily requires the primary source of repayment to be based on the borrowers’ ability to generate continuing cash flows. The Company also evaluates the collateral and creditworthiness of each customer. The credit policy provides that depending on the borrowers’ creditworthiness and type of collateral, credit may be extended up to predetermined percentages of the market value of the collateral or on an unsecured basis. Real estate is the primary form of collateral. Other important forms of collateral are time deposits and marketable securities.

As of September 30, 2020, the Company had received U.S. Small Business Administration (“SBA”) approval for over 1,000 PPP applications of which it made 985 loans totaling $86,165. Loans under the PPP that meet SBA requirements may be forgiven in certain circumstances and are 100% guaranteed by the SBA. PPP loans have either a two-year or five-year term, provide for fees of up to 5% of the loan amount and earn interest at an annual rate of 1%.

For disclosures related to the allowance for loan losses and credit quality, the Company does not have any disaggregated classes of loans below the segment level.

Credit-Quality Indicators: Internally assigned risk ratings are used as credit-quality indicators, which are reviewed by management on a quarterly basis.

The objectives of the Company’s risk-rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the allowance for loan losses.

Below are the definitions of the internally assigned risk ratings:

 

•

Strong Pass – Loans to a new or existing borrower collateralized at least 90 percent by an unimpaired deposit account at the Company.  

 

•

Good Pass – Loans to a new or existing borrower in a well-established enterprise in excellent financial condition with strong liquidity and a history of consistently high level of earnings, cash flow and debt service capacity.  

 

•

Satisfactory Pass – Loans to a new or existing borrower of average strength with acceptable financial condition, satisfactory record of earnings and sufficient historical and projected cash flow to service the debt.

 

•

Performance Pass – Existing loans that evidence strong payment history but document less than average strength, financial condition, record of earnings, or projected cash flows with which to service the debt.  

 

•

Special Mention – Loans in this category are currently protected but show one or more potential weaknesses and risks which may inadequately protect collectability or borrower’s ability to meet repayment terms at some future date if the weakness or weaknesses are not monitored or remediated.  

 

•

Substandard – Loans that are inadequately protected by the repayment capacity of the borrower or the current sound net worth of the collateral pledged, if any. Loans in this category have well defined weaknesses and risks that jeopardize the repayment. They are characterized by the distinct possibility that some loss may be sustained if the deficiencies are not remediated.  

 

•

Doubtful – Loans that have all the weaknesses of loans classified as “Substandard” with the added characteristics that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable.

Loans within the top four categories above are considered pass rated, as commonly defined. Risk ratings are assigned as necessary to differentiate risk within the portfolio. Risk ratings are reviewed on an ongoing basis and revised to reflect changes in the borrowers’ financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage as well as other considerations.

Note 5.

Loans Receivable and Allowance for Loan Losses (Continued)

The following tables present credit risk ratings by loan segment as of September 30, 2020 and December 31, 2019:

 

 

 

September 30, 2020

 

 

 

Mortgage Loans

 

 

Nonmortgage Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

1-4 Family

 

 

Multifamily

 

 

Nonresidential

 

 

and Land

 

 

Business

 

 

Consumer

 

 

Loans

 

Risk Rating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

403,062

 

 

$

277,822

 

 

$

212,699

 

 

$

83,149

 

 

$

96,700

 

 

$

9,806

 

 

$

1,083,238

 

Special mention

 

 

2,350

 

 

 

—

 

 

 

—

 

 

 

16,572

 

 

 

—

 

 

 

—

 

 

 

18,922

 

Substandard

 

 

8,366

 

 

 

6,953

 

 

 

5,072

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

20,391

 

Total

 

$

413,778

 

 

$

284,775

 

 

$

217,771

 

 

$

99,721

 

 

$

96,700

 

 

$

9,806

 

 

$

1,122,551

 

 

 

 

 

December 31, 2019

 

 

 

Mortgage Loans

 

 

Nonmortgage Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Construction

 

 

 

 

 

 

 

 

 

 

Total

 

 

 

1-4 Family

 

 

Multifamily

 

 

Nonresidential

 

 

and Land

 

 

Business

 

 

Consumer

 

 

Loans

 

Risk Rating:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pass

 

$

386,022

 

 

$

249,066

 

 

$

202,761

 

 

$

75,997

 

 

$

10,877

 

 

$

1,231

 

 

$

925,954

 

Special mention

 

 

2,412

 

 

 

—

 

 

 

—

 

 

 

14,943

 

 

 

—

 

 

 

—

 

 

 

17,355

 

Substandard

 

 

8,781

 

 

 

1,173

 

 

 

4,464

 

 

 

8,369

 

 

 

—

 

 

 

—

 

 

 

22,787

 

Total

 

$

397,215

 

 

$

250,239

 

 

$

207,225

 

 

$

99,309

 

 

$

10,877

 

 

$

1,231

 

 

$

966,096

 

 

An aging analysis of loans, as of September 30, 2020 and December 31, 2019, is as follows:

 

 

 

September 30, 2020

 

 

 

 

 

 

 

30-59

 

 

60-89

 

 

90 Days

 

 

 

 

 

 

 

 

 

 

90 Days

 

 

 

 

 

 

 

Days

 

 

Days

 

 

or More

 

 

 

 

 

 

Nonaccrual

 

 

or More

 

 

 

Current

 

 

Past Due

 

 

Past Due

 

 

Past Due

 

 

Total

 

 

Loans

 

 

Accruing

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor-Owned

 

$

318,955

 

 

$

—

 

 

$

—

 

 

$

1,483

 

 

$

320,438

 

 

$

1,936

 

 

$

—

 

Owner-Occupied

 

 

90,381

 

 

 

—

 

 

 

1,509

 

 

 

1,450

 

 

 

93,340

 

 

 

3,269

 

 

 

—

 

Multifamily residential

 

 

284,555

 

 

 

—

 

 

 

10

 

 

 

210

 

 

 

284,775

 

 

 

210

 

 

 

—

 

Nonresidential properties

 

 

214,499

 

 

 

—

 

 

 

—

 

 

 

3,272

 

 

 

217,771

 

 

 

4,447

 

 

 

—

 

Construction and land

 

 

99,721

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

99,721

 

 

 

—

 

 

 

—

 

Nonmortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

 

96,680

 

 

 

20

 

 

 

—

 

 

 

—

 

 

 

96,700

 

 

 

—

 

 

 

—

 

Consumer

 

 

9,806

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

9,806

 

 

 

—

 

 

 

—

 

Total

 

$

1,114,597

 

 

$

20

 

 

$

1,519

 

 

$

6,415

 

 

$

1,122,551

 

 

$

9,862

 

 

$

—

 

 

 

 

 

December 31, 2019

 

 

 

 

 

 

 

30-59

 

 

60-89

 

 

90 Days

 

 

 

 

 

 

 

 

 

 

90 Days

 

 

 

 

 

 

 

Days

 

 

Days

 

 

or More

 

 

 

 

 

 

Nonaccrual

 

 

or More

 

 

 

Current

 

 

Past Due

 

 

Past Due

 

 

Past Due

 

 

Total

 

 

Loans

 

 

Accruing

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family residential

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Investor-Owned

 

$

300,324

 

 

$

3,866

 

 

$

—

 

 

$

1,082

 

 

$

305,272

 

 

$

1,749

 

 

$

—

 

Owner-Occupied

 

 

87,243

 

 

 

3,405

 

 

 

—

 

 

 

1,295

 

 

 

91,943

 

 

 

3,500

 

 

 

—

 

Multifamily residential

 

 

246,318

 

 

 

3,921

 

 

 

—

 

 

 

—

 

 

 

250,239

 

 

 

—

 

 

 

—

 

Nonresidential properties

 

 

203,514

 

 

 

3

 

 

 

—

 

 

 

3,708

 

 

 

207,225

 

 

 

4,201

 

 

 

—

 

Construction and land

 

 

99,309

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

99,309

 

 

 

1,118

 

 

 

—

 

Nonmortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

 

10,877

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

10,877

 

 

 

—

 

 

 

—

 

Consumer

 

 

1,231

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,231

 

 

 

—

 

 

 

—

 

Total

 

$

948,816

 

 

$

11,195

 

 

$

—

 

 

$

6,085

 

 

$

966,096

 

 

$

10,568

 

 

$

—

 

 

Note 5.

Loans Receivable and Allowance for Loan Losses (Continued)

 

The following schedules detail the composition of the allowance for loan losses and the related recorded investment in loans as of September 30, 2020 and 2019, and December 31, 2019:

 

 

 

For the Nine Months Ended September 30, 2020

 

 

 

Mortgage Loans

 

 

Nonmortgage

Loans

 

 

Total

 

 

 

1-4

Family

Investor

Owned

 

 

1-4

Family

Owner

Occupied

 

 

Multifamily

 

 

Nonresidential

 

 

Construction

and Land

 

 

Business

 

 

Consumer

 

 

For the

Period

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

3,503

 

 

$

1,067

 

 

$

3,865

 

 

$

1,849

 

 

$

1,782

 

 

$

254

 

 

$

9

 

 

$

12,329

 

Provision charged to expense

 

 

353

 

 

 

134

 

 

 

1,024

 

 

 

330

 

 

 

(63

)

 

 

182

 

 

 

77

 

 

 

2,037

 

Losses charged-off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

 

 

 

(6

)

 

 

(6

)

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

—

 

 

 

17

 

 

 

—

 

 

 

21

 

Balance, end of period

 

$

3,856

 

 

$

1,201

 

 

$

4,889

 

 

$

2,183

 

 

$

1,719

 

 

$

453

 

 

$

80

 

 

$

14,381

 

Ending balance: individually

   evaluated for impairment

 

$

121

 

 

$

137

 

 

$

—

 

 

$

37

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

295

 

Ending balance: collectively

   evaluated for impairment

 

 

3,735

 

 

 

1,064

 

 

 

4,889

 

 

 

2,146

 

 

 

1,719

 

 

 

453

 

 

 

80

 

 

 

14,086

 

Total

 

$

3,856

 

 

$

1,201

 

 

$

4,889

 

 

$

2,183

 

 

$

1,719

 

 

$

453

 

 

$

80

 

 

$

14,381

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance: individually

   evaluated for impairment

 

$

6,412

 

 

$

5,442

 

 

$

210

 

 

$

5,245

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

17,309

 

Ending balance: collectively

   evaluated for impairment

 

 

314,026

 

 

 

87,898

 

 

 

284,565

 

 

 

212,526

 

 

 

99,721

 

 

 

96,700

 

 

 

9,806

 

 

 

1,105,242

 

Total

 

$

320,438

 

 

$

93,340

 

 

$

284,775

 

 

$

217,771

 

 

$

99,721

 

 

$

96,700

 

 

$

9,806

 

 

$

1,122,551

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2020

 

 

 

Mortgage Loans

 

 

Nonmortgage Loans

 

 

Total

 

 

 

1-4

Family

Investor

Owned

 

 

1-4

Family

Owner

Occupied

 

 

Multifamily

 

 

Nonresidential

 

 

Construction and Land

 

 

Business

 

 

Consumer

 

 

For the

Period

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

3,857

 

 

$

1,194

 

 

$

4,741

 

 

$

2,085

 

 

$

1,670

 

 

$

204

 

 

$

10

 

 

$

13,761

 

Provision charged to expense

 

 

(1

)

 

 

7

 

 

 

148

 

 

 

98

 

 

 

49

 

 

 

245

 

 

 

74

 

 

 

620

 

Losses charged-off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(4

)

 

 

(4

)

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

—

 

 

 

4

 

Balance, end of period

 

$

3,856

 

 

$

1,201

 

 

$

4,889

 

 

$

2,183

 

 

$

1,719

 

 

$

453

 

 

$

80

 

 

$

14,381

 

 

Note 5.Loans Receivable and Allowance for Loan Losses (Continued)

 

 

 

For the Nine Months Ended September 30, 2019

 

 

 

Mortgage Loans

 

 

Nonmortgage Loans

 

 

 

 

 

 

Total

 

 

 

1-4

Family

Investor

Owned

 

 

1-4

Family

Owner

Occupied

 

 

Multifamily

 

 

Nonresidential

 

 

Construction

and Land

 

 

Business

 

 

Consumer

 

 

Unallocated

 

 

For the

Period

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

3,799

 

 

$

1,208

 

 

$

3,829

 

 

$

1,925

 

 

$

1,631

 

 

$

260

 

 

$

7

 

 

$

—

 

 

$

12,659

 

Provision charged to expense

 

 

(297

)

 

 

(139

)

 

 

(86

)

 

 

(222

)

 

 

217

 

 

 

749

 

 

 

(1

)

 

 

(58

)

 

 

163

 

Losses charged-off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(782

)

 

 

—

 

 

 

—

 

 

 

(782

)

Recoveries

 

 

23

 

 

 

—

 

 

 

—

 

 

 

7

 

 

 

—

 

 

 

30

 

 

 

2

 

 

 

58

 

 

 

120

 

Balance, end of period

 

$

3,525

 

 

$

1,069

 

 

$

3,743

 

 

$

1,710

 

 

$

1,848

 

 

$

257

 

 

$

8

 

 

$

—

 

 

$

12,160

 

Ending balance: individually

   evaluated for impairment

 

$

266

 

 

$

158

 

 

$

—

 

 

$

32

 

 

$

—

 

 

$

33

 

 

$

—

 

 

$

—

 

 

$

489

 

Ending balance: collectively

   evaluated for impairment

 

 

3,259

 

 

 

911

 

 

 

3,743

 

 

 

1,678

 

 

 

1,848

 

 

 

224

 

 

 

8

 

 

 

—

 

 

 

11,671

 

Total

 

$

3,525

 

 

$

1,069

 

 

$

3,743

 

 

$

1,710

 

 

$

1,848

 

 

$

257

 

 

$

8

 

 

$

—

 

 

$

12,160

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance: individually

   evaluated for impairment

 

$

7,011

 

 

$

5,636

 

 

$

—

 

 

$

5,103

 

 

$

1,303

 

 

$

35

 

 

$

—

 

 

$

—

 

 

$

19,088

 

Ending balance: collectively

   evaluated for impairment

 

 

302,054

 

 

 

85,207

 

 

 

244,644

 

 

 

190,849

 

 

 

104,821

 

 

 

11,005

 

 

 

1,252

 

 

 

—

 

 

 

939,832

 

Total

 

$

309,065

 

 

$

90,843

 

 

$

244,644

 

 

$

195,952

 

 

$

106,124

 

 

$

11,040

 

 

$

1,252

 

 

$

—

 

 

$

958,920

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

For the Three Months Ended September 30, 2019

 

 

 

Mortgage Loans

 

 

Nonmortgage Loans

 

 

 

 

 

 

Total

 

 

 

1-4

Family

Investor

Owned

 

 

1-4

Family

Owner

Occupied

 

 

Multifamily

 

 

Nonresidential

 

 

Construction

and Land

 

 

Business

 

 

Consumer

 

 

Unallocated

 

 

For the

Period

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of period

 

$

3,574

 

 

$

1,168

 

 

$

3,713

 

 

$

1,928

 

 

$

1,533

 

 

$

533

 

 

$

11

 

 

$

58

 

 

$

12,518

 

Provision charged to expense

 

 

(49

)

 

 

(99

)

 

 

30

 

 

 

(220

)

 

 

315

 

 

 

98

 

 

 

(3

)

 

 

(58

)

 

 

14

 

Losses charged-off

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(380

)

 

 

—

 

 

 

—

 

 

 

(380

)

Recoveries

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

—

 

 

 

6

 

 

 

—

 

 

 

—

 

 

 

8

 

Balance, end of period

 

$

3,525

 

 

$

1,069

 

 

$

3,743

 

 

$

1,710

 

 

$

1,848

 

 

$

257

 

 

$

8

 

 

$

—

 

 

$

12,160

 

 

 

Note 5.Loans Receivable and Allowance for Loan Losses (Continued)

 

 

 

For the Year Ended December 31, 2019

 

 

 

Mortgage Loans

 

 

Nonmortgage Loans

 

 

Total

 

 

 

1-4

Family

Investor

Owned

 

 

1-4

Family

Owner

Occupied

 

 

Multifamily

 

 

Nonresidential

 

 

Construction

and Land

 

 

Business

 

 

Consumer

 

 

For the

Period

 

Allowance for loan losses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, beginning of year

 

$

3,799

 

 

$

1,208

 

 

$

3,829

 

 

$

1,925

 

 

$

1,631

 

 

$

260

 

 

$

7

 

 

$

12,659

 

Provision charged to expense

 

 

(311

)

 

 

(141

)

 

 

36

 

 

 

(85

)

 

 

151

 

 

 

608

 

 

 

—

 

 

 

258

 

Losses charged-off

 

 

(8

)

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

(724

)

 

 

—

 

 

 

(732

)

Recoveries

 

 

23

 

 

 

—

 

 

 

—

 

 

 

9

 

 

 

—

 

 

 

110

 

 

 

2

 

 

 

144

 

Balance, end of year

 

$

3,503

 

 

$

1,067

 

 

$

3,865

 

 

$

1,849

 

 

$

1,782

 

 

$

254

 

 

$

9

 

 

$

12,329

 

Ending balance: individually

   evaluated for impairment

 

$

265

 

 

$

149

 

 

$

—

 

 

$

31

 

 

$

—

 

 

$

14

 

 

$

—

 

 

$

459

 

Ending balance: collectively

   evaluated for impairment

 

 

3,238

 

 

 

918

 

 

 

3,865

 

 

 

1,818

 

 

 

1,782

 

 

 

240

 

 

 

9

 

 

 

11,870

 

Total

 

$

3,503

 

 

$

1,067

 

 

$

3,865

 

 

$

1,849

 

 

$

1,782

 

 

$

254

 

 

$

9

 

 

$

12,329

 

Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance: individually

   evaluated for impairment

 

$

6,973

 

 

$

5,572

 

 

$

—

 

 

$

5,548

 

 

$

1,125

 

 

$

14

 

 

$

—

 

 

$

19,232

 

Ending balance: collectively

   evaluated for impairment

 

 

298,299

 

 

 

86,371

 

 

 

250,239

 

 

 

201,677

 

 

 

98,184

 

 

 

10,863

 

 

 

1,231

 

 

 

946,864

 

Total

 

$

305,272

 

 

$

91,943

 

 

$

250,239

 

 

$

207,225

 

 

$

99,309

 

 

$

10,877

 

 

$

1,231

 

 

$

966,096

 

 

Loans are considered impaired when current information and events indicate all amounts due may not be collectable according to the contractual terms of the related loan agreements. Impaired loans, including troubled debt restructurings, are identified by applying normal loan review procedures in accordance with the allowance for loan losses methodology. Management periodically assesses loans to determine whether impairment exists. Any loan that is, or will potentially be, no longer performing in accordance with the terms of the original loan contract is evaluated to determine impairment.

Note 5.Loans Receivable and Allowance for Loan Losses (Continued)

The following information relates to impaired loans as of and for the nine months ended September 30, 2020 and 2019 and for the year ended December 31, 2019:

 

 

 

Unpaid

Contractual

 

 

Recorded

Investment

 

 

Recorded

Investment

 

 

Total

 

 

 

 

 

 

Average

 

 

Interest Income

 

 

 

Principal

 

 

With No

 

 

With

 

 

Recorded

 

 

Related

 

 

Recorded

 

 

Recognized

 

For the Nine Months Ended September 30, 2020

 

Balance

 

 

Allowance

 

 

Allowance

 

 

Investment

 

 

Allowance

 

 

Investment

 

 

on a Cash Basis

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family residential

 

$

12,715

 

 

$

9,688

 

 

$

2,166

 

 

$

11,854

 

 

$

257

 

 

$

12,190

 

 

$

146

 

Multifamily residential

 

 

207

 

 

 

210

 

 

 

—

 

 

 

210

 

 

 

—

 

 

 

44

 

 

 

—

 

Nonresidential properties

 

 

5,639

 

 

 

4,873

 

 

 

372

 

 

 

5,245

 

 

 

38

 

 

 

5,369

 

 

 

54

 

Construction and land

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

751

 

 

 

—

 

Nonmortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

17

 

 

 

—

 

Consumer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

 

$

18,561

 

 

$

14,771

 

 

$

2,538

 

 

$

17,309

 

 

$

295

 

 

$

18,371

 

 

$

200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unpaid

Contractual

 

 

Recorded

Investment

 

 

Recorded

Investment

 

 

Total

 

 

 

 

 

 

Average

 

 

Interest Income

 

 

 

Principal

 

 

With No

 

 

With

 

 

Recorded

 

 

Related

 

 

Recorded

 

 

Recognized

 

For the Nine Months Ended September 30, 2019

 

Balance

 

 

Allowance

 

 

Allowance

 

 

Investment

 

 

Allowance

 

 

Investment

 

 

on a Cash Basis

 

Mortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family residential

 

$

13,686

 

 

$

8,460

 

 

$

4,187

 

 

$

12,647

 

 

$

424

 

 

$

13,084

 

 

$

263

 

Multifamily residential

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

7

 

 

 

—

 

Nonresidential properties

 

 

5,211

 

 

 

4,724

 

 

 

379

 

 

 

5,103

 

 

 

32

 

 

 

3,676

 

 

 

85

 

Construction and land

 

 

1,615

 

 

 

1,303

 

 

 

—

 

 

 

1,303

 

 

 

—

 

 

 

1,238

 

 

 

4

 

Nonmortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

 

38

 

 

 

—

 

 

 

35

 

 

 

35

 

 

 

33

 

 

 

232

 

 

 

5

 

Consumer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

Total

 

$

20,550

 

 

$

14,487

 

 

$

4,601

 

 

$

19,088

 

 

$

489

 

 

$

18,238

 

 

$

357

 

 

 

 

 

Unpaid

Contractual

 

 

Recorded

Investment

 

 

Recorded

Investment

 

 

Total

 

 

 

 

 

 

Average

 

 

Interest Income

 

 

 

Principal

 

 

With No

 

 

With

 

 

Recorded

 

 

Related

 

 

Recorded

 

 

Recognized

 

December 31, 2019

 

Balance

 

 

Allowance

 

 

Allowance

 

 

Investment

 

 

Allowance

 

 

Investment

 

 

on a Cash Basis

 

Mortgage loans:

 

 

 

1-4 Family residential

 

$

13,566

 

 

$

8,390

 

 

$

4,155

 

 

$

12,545

 

 

$

414

 

 

$

12,995

 

 

$

361

 

Multifamily residential

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

6

 

 

 

—

 

Nonresidential properties

 

 

5,640

 

 

 

5,173

 

 

 

375

 

 

 

5,548

 

 

 

31

 

 

 

3,988

 

 

 

121

 

Construction and land

 

 

1,465

 

 

 

1,125

 

 

 

—

 

 

 

1,125

 

 

 

—

 

 

 

1,219

 

 

 

6

 

Nonmortgage loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Business

 

 

16

 

 

 

—

 

 

 

14

 

 

 

14

 

 

 

14

 

 

 

195

 

 

 

—

 

Consumer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1

 

 

 

—

 

Total

 

$

20,687

 

 

$

14,688

 

 

$

4,544

 

 

$

19,232

 

 

$

459

 

 

$

18,404

 

 

$

488

 

 

Note 5.

Loans Receivable and Allowance for Loan Losses (Continued)

The loan portfolio also includes certain loans that have been modified to troubled debt restructurings. Under applicable standards, loans are modified to troubled debt restructurings when a creditor, for economic or legal reasons related to a debtor’s financial condition, grants a concession to the debtor that it would not otherwise consider, unless it results in a delay in payment that is insignificant. These concessions could include a reduction of interest rate on the loan, payment and maturity extensions, forbearance, or other actions intended to maximize collections. When a loan is modified to a troubled debt restructuring, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs if repayment under the modified terms becomes doubtful. If management determines that the value of the modified loan in a troubled debt restructuring is less than the recorded investment in the loan, impairment is recognized through a specific allowance estimate or charge-off against the allowance for loan losses.

During the nine months ended September 30, 2020, there were no loans restructured as a troubled debt restructuring and as of and for the year ended December 31, 2019, there was one loan restructured as a troubled debt restructuring.

 

 

Loans Restructured During

 

 

All TDRs with a payment default

within 12 months following the

 

 

Nine Months Ended September 30, 2020

 

 

modification

 

 

 

 

 

 

Pre-

 

 

Post-

 

 

 

 

 

 

Balance

 

 

 

 

 

 

Modification

 

 

Modification

 

 

 

 

 

 

of Loans

 

 

Number

 

 

Recorded

 

 

Recorded

 

 

Number

 

 

at the Time

 

 

of Loans

 

 

Balance

 

 

Balance

 

 

of Loans

 

 

of Default

 

Mortgages:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

—

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

—

 

Total

 

—

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

—

 

Combination of rate, maturity, other

 

—

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

—

 

Total

 

—

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

—

 

 

 

Loans Restructured During

 

 

All TDRs with a payment default

within 12 months following the

 

 

Year Ended December 31, 2019

 

 

modification

 

 

 

 

 

 

Pre-

 

 

Post-

 

 

 

 

 

 

Balance

 

 

 

 

 

 

Modification

 

 

Modification

 

 

 

 

 

 

of Loans

 

 

Number

 

 

Recorded

 

 

Recorded

 

 

Number

 

 

at the Time

 

 

of Loans

 

 

Balance

 

 

Balance

 

 

of Loans

 

 

of Default

 

Mortgages:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1-4 Family

 

1

 

 

$

275

 

 

$

283

 

 

 

—

 

 

$

—

 

Total

 

1

 

 

$

275

 

 

$

283

 

 

 

—

 

 

$

—

 

Combination of rate, maturity, other

 

1

 

 

$

275

 

 

$

283

 

 

 

—

 

 

$

—

 

Total

 

1

 

 

$

275

 

 

$

283

 

 

 

—

 

 

$

—

 

 

At September 30, 2020, there were 32 troubled debt restructured loans totaling $9,781 of which $6,683 are on accrual status. At December 31, 2019, there were 36 troubled debt restructured loans totaling $12,204 of which $8,601 are on accrual status. There were no commitments to lend additional funds to borrowers whose loans have been modified in a troubled debt restructuring. The financial impact from the concessions made represents specific impairment reserves on these loans, which aggregated to $295 and $459 at September 30, 2020 and December 31, 2019, respectively.

At September 30, 2020 and December 31, 2019, there was one loan in the amount of $1,030 held for sale related to the Bank. At September 30, 2020, 29 loans related to Mortgage World in the amount of $12,070 were held for sale and accounted for under the fair value option accounting guidance for financial assets and financial liabilities. Refer to Note 13 Fair Value for additional information.