NET LOANS RECEIVABLE

6 Months Ended

Dec. 31, 2024

NET LOANS RECEIVABLE

NET LOANS RECEIVABLE

5.       NET LOANS RECEIVABLE

A summary of net loans receivable is as follows (dollars in thousands):

			June 30,
	December 31, 2024		2024		2023
Commercial:
Real estate	$	414,835	$	406,201	$	411,165
Commercial and industrial		108,474		101,207		97,307
Construction		130,959		118,373		92,714
Total commercial		654,268		625,781		601,186
Residential mortgages		689,569		633,779		463,196
Home equity loans and lines		94,928		92,765		85,477
Consumer		17,564		13,545		16,779
		1,456,329		1,365,870		1,166,638
Allowance for credit losses		(21,754)		(21,801)		(22,469)
Net loans receivable	$	1,434,575	$	1,344,069	$	1,144,169

Accrued interest receivable on loans totaled $6.3 million and $5.9 million at December 31, 2024 and June 30, 2024, respectively. Accrued interest receivable on loans is included in accrued interest receivable on the consolidated statement of condition, and is excluded from the estimate of credit losses.

Net deferred loan costs totaled $9.8 million, $9.5 million and $6.7 million at December 31, 2024 and June 30, 2024 and 2023, respectively, and are included in net loans receivable.

The allowance for credit losses on loans is established through a provision for credit losses based on the results of life of loan quantitative models, reserves associated with collateral-dependent loans evaluated individually and adjustments for the impact of current economic conditions not accounted for in the quantitative models. The discounted cash flow methodology is used to calculate the CECL reserve for the commercial, residential mortgages, and home equity loans and lines of credit segments. The allowance for credit losses on loans estimate uses a four-quarter reasonable and supportable forecast period based on economic forecast from the Federal Open Market Committee (“FOMC”) of the Federal Reserve's projections of civilian unemployment and year-over-year U.S. GDP growth. The forecast will revert to long-term economic conditions over a four quarter reversion period on a straight-line basis. A qualitative factor framework has been developed to adjust the quantitative loss rates for asset-specific risk characteristics or current conditions at the reporting date.

The following table presents the activity in the allowance for credit losses by portfolio segment (dollars in thousands):

	For the Six Months Ended December 31, 2024
	Beginning								Ending
	Balance		Provisions		Charge-offs		Recoveries		Balance
Commercial	$	12,504	$	(540)	$	(111)	$	214	$	12,067
Residential mortgages		7,706		269		(45)		—		7,930
Home equity loans and lines of credit		1,244		(59)		—		—		1,185
Consumer		347		305		(100)		20		572
Allowance for credit losses - loans		21,801		(25)		(256)		234		21,754
Allowance for credit losses - off-balance sheet credit exposures		1,899		291		—		—		2,190
Total	$	23,700	$	266	$	(256)	$	234	$	23,944

	For the Six Months Ended December 31, 2023
			Cumulative Effect
	Beginning		Adjustment for the								Ending
	Balance		Adoption of ASU 2016-13		Provisions		Charge-offs		Recoveries		Balance
Commercial	$	14,288	$	(1,307)	$	(5)	$	(345)	$	43	$	12,674
Residential mortgages		6,222		(670)		1,418		—		—		6,970
Home equity loans and lines of credit		1,470		(265)		145		(12)		1		1,339
Consumer		489		(69)		17		(69)		11		379
Allowance for credit losses - loans		22,469		(2,311)		1,575		(426)		55		21,362
Allowance for credit losses - off-balance sheet credit exposures		—		1,624		57		—		—		1,681
Total	$	22,469	$	(687)	$	1,632	$	(426)	$	55	$	23,043

	For the Fiscal Year Ended June 30, 2024
			Cumulative Effect
	Beginning		Adjustment for the								Ending
	Balance		Adoption of ASU 2016-13		Provisions		Charge-offs		Recoveries		Balance
Commercial	$	14,288	$	(1,307)	$	(205)	$	(345)	$	73	$	12,504
Residential mortgages		6,222		(670)		2,272		(118)		—		7,706
Home equity loans and lines of credit		1,470		(265)		48		(12)		3		1,244
Consumer		489		(69)		48		(135)		14		347
Allowance for credit losses - loans		22,469		(2,311)		2,163		(610)		90		21,801
Allowance for credit losses - off-balance sheet credit exposures		—		1,624		275		—		—		1,899
Total	$	22,469	$	(687)	$	2,438	$	(610)	$	90	$	23,700

	For the Fiscal Year Ended June 30, 2023
	Beginning								Ending
	Balance		Provisions		Charge-offs		Recoveries		Balance
Commercial	$	17,818	$	(3,567)	$	(41)	$	78	$	14,288
Residential mortgages		2,899		3,283		(26)		66		6,222
Home equity loans and lines of credit		1,388		76		(8)		14		1,470
Consumer		419		208		(158)		20		489
Total	$	22,524	$	—	$	(233)	$	178	$	22,469

The following table presents the balance in the allowance for credit losses and allowance for loan losses and the recorded investment in loans by portfolio segment (dollars in thousands):

	December 31, 2024
			Residential
	Commercial		Mortgages		Home Equity		Consumer		Total
Allowance for credit losses:
Related to loans individually evaluated	$	—	$	—	$	—	$	—	$	—
Related to loans collectively evaluated		12,067		7,930		1,185		572		21,754
Ending balance	$	12,067	$	7,930	$	1,185	$	572	$	21,754
Loans:
Individually evaluated	$	—	$	1,541	$	—	$	—	$	1,541
Loans collectively evaluated		654,268		688,028		94,928		17,564		1,454,788
Ending balance	$	654,268	$	689,569	$	94,928	$	17,564	$	1,456,329

	June 30, 2024
			Residential
	Commercial		Mortgages			Home Equity	Consumer		Total
Allowance for credit losses:
Related to loans individually evaluated	$	134	$	—	$	—	$	—	$	134
Related to loans collectively evaluated		12,370		7,706		1,244		347		21,667
Ending balance	$	12,504	$	7,706	$	1,244	$	347	$	21,801
Loans:
Individually evaluated	$	3,853	$	1,625	$	—	$	—	$	5,478
Loans collectively evaluated		621,928		632,154		92,765		13,545		1,360,392
Ending balance	$	625,781	$	633,779	$	92,765	$	13,545	$	1,365,870

	June 30, 2023
			Residential
	Commercial		Mortgages			Home Equity	Consumer		Total
Allowance for loan losses:
Related to loans individually evaluated for impairment	$	792	$	—	$	—	$	—	$	792
Related to loans collectively evaluated for impairment		13,496		6,222		1,470		489		21,677
Ending balance	$	14,288	$	6,222	$	1,470	$	489	$	22,469
Loans:
Individually evaluated for impairment	$	11,544	$	—	$	—	$	—	$	11,544
Loans collectively evaluated for impairment		589,642		463,196		85,477		16,779		1,155,094
Ending balance	$	601,186	$	463,196	$	85,477	$	16,779	$	1,166,638

The following table presents information related to impaired loans by class, as determined in accordance with ASC 310, prior to the adoption of ASU 2016-13 (dollars in thousands):

							For the Fiscal Year Ended
	June 30, 2023						June 30, 2023
	Unpaid				Allowance for		Average		Interest
	Principal		Recorded		Loan Losses		Recorded		Income
	Balance		Investment		Allocated		Investment		Recognized
With no related allowance recorded:
Commercial:
Real estate	$	10,241	$	10,213	$	—	$	10,538	$	133
Commercial and industrial		—		—		—		—		—
Construction		—		—		—		—		—
Subtotal		10,241		10,213		—		10,538		133
With an allowance recorded:
Commercial:
Real estate		681		681		142		699		35
Commercial and industrial		650		650		650		575		—
Construction		—		—		—		—		—
Subtotal		1,331		1,331		792		1,274		35
Total	$	11,572	$	11,544	$	792	$	11,812	$	168

Interest income on nonaccrual loans is recognized using the cost recovery method. Interest income on loans that were on nonaccrual status and cash-basis interest income for the six months ended December 31, 2024 and fiscal years ended June 30, 2024 and 2023 was nominal.

At various times, certain loan modifications are executed for economic or legal reasons related to a borrower’s financial condition that the Company would not otherwise consider resulting in a modified loan. Substantially all of these modifications include one or a combination of the following: extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; temporary reduction in the interest rate; change in scheduled payment amount including interest only; or extensions of additional credit for payment of delinquent real estate taxes or other costs.

The Company may occasionally make modifications to loans where the borrower is considered to be experiencing financial difficulty. Types of modifications considered include principal reductions, interest rate reductions, term extensions, or a combination. There were no modifications to loans where the borrower is considered to be experiencing financial difficulty for the six months ended December 31, 2024 and fiscal year ended June 30, 2024.

Prior to the adoption of ASU 2022-02, Financial Instruments-Credit Losses (Topic 326)-Troubled Debt Restructurings, on July 1, 2023, the Company accounted for loan modifications to borrowers experiencing financial difficulty when concessions were granted as troubled debt restructurings. The following are disclosures related to troubled debt restructurings in the prior year. There were no loans modified as troubled debt restructurings during the year ended June 30, 2023. There were no loans that had been modified as a troubled debt restructuring during the twelve months prior to June 30, 2023 which subsequently defaulted during the year ended June 30, 2023. At various times, certain loan modifications were executed which were considered to be troubled debt restructurings. Substantially all of these modifications included one or a combination of the following: extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; temporary reduction in the interest rate; change in scheduled payment amount including interest only; or extensions of additional credit for payment of delinquent real estate taxes or other costs. Loans subject to a troubled debt restructuring were evaluated as impaired loans for the purpose of determining the specific component of the allowance for loan losses.

The following table presents the recorded investment in nonaccrual loans and loans past due over 90 days still on accrual by class of loans (dollars in thousands):

	December 31, 2024
			Nonaccrual		Past Due
			Loans With		90 Days
			No Related		Still on		Recognized
	Nonaccrual		Allowance		Accrual		Interest Income
Commercial:
Real estate	$	—	$	—	$	1	$	—
Commercial and industrial		10		—		—		—
Construction		—		—		—		—
Residential mortgages		4,127		1,541		—		—
Home equity loans and lines		1,109		—		—		—
Consumer		—		—		—		—
	$	5,246	$	1,541	$	1	$	—

	June 30, 2024
			Nonaccrual		Past Due
			Loans With		90 Days
			No Related		Still on		Recognized
	Nonaccrual		Allowance		Accrual		Interest Income
Commercial:
Real estate	$	3,180	$	3,180	$	4	$	—
Commercial and industrial		9		—		—		—
Construction		—		—		—		—
Residential mortgages		4,208		1,625		—		—
Home equity loans and lines		1,648		—		—		—
Consumer		—		—		—		—
	$	9,045	$	4,805	$	4	$	—

	June 30, 2023
			Past Due
			90 Days
			Still on
	Nonaccrual		Accrual
Commercial:
Real estate	$	8,025	$	174
Commercial and industrial		650		—
Construction		—		3,237
Residential mortgages		4,000		120
Home equity loans and lines		1,560		—
Consumer		—		—
	$	14,235	$	3,531

Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated loans.

A loan is considered collateral-dependent when the borrower is experiencing financial difficulty and repayment of the loan is expected to be provided substantially through the operation or sale of the collateral.

The following table presents the amortized cost basis of collateral-dependent loans by class of loans (dollars in thousands):

	December 31, 2024
	Amortized Cost		Collateral Type
Commercial:
Real estate	$	—
Commercial and industrial		—
Construction		—
Residential mortgages		1,541	Residential real estate property
Home equity loans and lines		—
Consumer		—
	$	1,541

	June 30, 2024
	Amortized Cost		Collateral Type
Commercial:
Real estate	$	3,844	Commercial real estate property
Commercial and industrial		9	Business assets
Construction		—
Residential mortgages		1,625	Residential real estate property
Home equity loans and lines		—
Consumer		—
	$	5,478

The following table presents the aging of the recorded investment in loans by class of loans (dollars in thousands):

	December 31, 2024
	30 - 59		60 - 89		90 or more
	Days		Days		Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Commercial:
Real estate	$	6,734	$	—	$	1	$	6,735	$	408,100	$	414,835
Commercial and industrial		5		—		—		5		108,469		108,474
Construction		—		—		—		—		130,959		130,959
Residential mortgages		—		888		1,515		2,403		687,166		689,569
Home equity loans and lines		1,198		67		567		1,832		93,096		94,928
Consumer		7		6		—		13		17,551		17,564
Total	$	7,944	$	961	$	2,083	$	10,988	$	1,445,341	$	1,456,329

	June 30, 2024
	30 - 59		60 - 89		90 or more
	Days		Days		Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Commercial:
Real estate	$	2	$	3	$	4	$	9	$	406,192	$	406,201
Commercial and industrial		15		—		—		15		101,192		101,207
Construction		—		—		—		—		118,373		118,373
Residential mortgages		872		481		794		2,147		631,632		633,779
Home equity loans and lines		722		78		654		1,454		91,311		92,765
Consumer		14		8		—		22		13,523		13,545
Total	$	1,625	$	570	$	1,452	$	3,647	$	1,362,223	$	1,365,870

	June 30, 2023
	30 - 59		60 - 89		90 or more
	Days		Days		Days		Total		Loans Not
	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Commercial:
Real estate	$	4,798	$	—	$	4,458	$	9,256	$	401,909	$	411,165
Commercial and industrial		678		100		352		1,130		96,177		97,307
Construction		—		—		3,237		3,237		89,477		92,714
Residential mortgages		1,257		1,327		762		3,346		459,850		463,196
Home equity loans and lines		1,340		64		540		1,944		83,533		85,477
Consumer		18		22		—		40		16,739		16,779
Total	$	8,091	$	1,513	$	9,349	$	18,953	$	1,147,685	$	1,166,638

The Company categorizes commercial 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 commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

Special Mention – Loans classified as special mention have a potential weakness that deserves management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of the repayment prospects for the loan or of the institution’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current net worth and paying capacity of the obligor or of the collateral pledged, if any. Loans so classified have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the institution will sustain some loss if the deficiencies are not corrected.

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

Commercial loans not meeting the criteria above are considered to be pass rated loans.

The Company grades residential mortgages, home equity loans and lines of credit and consumer loans as either non-performing or performing.

Non-performing – Loans that are over 90 days past due and still accruing interest or on nonaccrual.

Performing – Loans not meeting any of the above criteria are considered to be performing loans.

The following table presents loans summarized by segment and class, and the risk category (dollars in thousands):

													Revolving		Revolving
		Term Loans Amortized Cost Basis by Origination Year											Loans		Loans
		2024											Amortized		Converted
December 31, 2024	Transition Period		2024		2023		2022		2021		Prior		Cost Basis		to Term		Total
Commercial real estate
Risk Rating
Pass	$	11,873	$	33,387	$	46,482	$	54,961	$	22,212	$	223,547	$	531	$	—	$	392,993
Special mention		—		—		—		—		—		4,918		—		—		4,918
Substandard		—		—		—		2,198		—		13,634		1,092		—		16,924
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial real estate	$	11,873	$	33,387	$	46,482	$	57,159	$	22,212	$	242,099	$	1,623	$	—	$	414,835
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial
Risk Rating
Pass	$	11,089	$	13,794	$	5,472	$	4,377	$	2,459	$	9,354	$	59,342	$	—	$	105,887
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		15		—		2,304		151		—		2,470
Doubtful		—		—		—		—		—		117		—		—		117
Total commercial and industrial	$	11,089	$	13,794	$	5,472	$	4,392	$	2,459	$	11,775	$	59,493	$	—	$	108,474
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	21	$	66	$	24	$	—	$	111
Commercial construction
Risk Rating
Pass	$	19,210	$	51,227	$	8,814	$	31,700	$	17,582	$	1,489	$	937	$	—	$	130,959
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction	$	19,210	$	51,227	$	8,814	$	31,700	$	17,582	$	1,489	$	937	$	—	$	130,959
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential mortgages
Performing	$	71,164	$	187,372	$	198,502	$	41,117	$	54,754	$	132,419	$	114	$	—	$	685,442
Non-performing		—		—		1,140		516		—		2,471		—		—		4,127
Total residential mortgages	$	71,164	$	187,372	$	199,642	$	41,633	$	54,754	$	134,890	$	114	$	—	$	689,569
Current period gross charge-offs	$	—	$	—	$	41	$	—	$	—	$	4	$	—	$	—	$	45
Home equity loans and lines of credit
Performing	$	2,465	$	6,219	$	5,949		8,955	$	3,209	$	13,561	$	53,192	$	269	$	93,819
Non-performing		—		—		—		95		—		194		820		—		1,109
Total home equity loans and lines of credit	$	2,465	$	6,219	$	5,949	$	9,050	$	3,209	$	13,755	$	54,012	$	269	$	94,928
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Consumer
Performing	$	1,226	$	5,249	$	556	$	73	$	45	$	3,222	$	7,193	$	—	$	17,564
Non-performing		—		—		—		—		—		—		—		—		—
Total consumer	$	1,226	$	5,249	$	556	$	73	$	45	$	3,222	$	7,193	$	—	$	17,564
Current period gross charge-offs	$	46	$	15	$	7	$	3	$	—	$	29	$	—	$	—	$	100

													Revolving		Revolving
													Loans		Loans
		Term Loans Amortized Cost Basis by Origination Year											Amortized		Converted
June 30, 2024	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
Commercial real estate
Risk Rating
Pass	$	29,592	$	47,818	$	43,324	$	23,191	$	67,757	$	168,333	$	679	$	—	$	380,694
Special mention		—		—		2,234		—		—		8,003		1,090		—		11,327
Substandard		—		—		—		—		756		13,424		—		—		14,180
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial real estate	$	29,592	$	47,818	$	45,558	$	23,191	$	68,513	$	189,760	$	1,769	$	—	$	406,201
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Commercial and industrial
Risk Rating
Pass	$	13,945	$	6,381	$	4,868	$	3,066	$	4,127	$	6,259	$	56,628	$	—	$	95,274
Special mention		—		—		1,118		—		1,250		221		750		—		3,339
Substandard		—		—		17		—		53		2,350		141		—		2,561
Doubtful		—		—		—		—		—		24		9		—		33
Total commercial and industrial	$	13,945	$	6,381	$	6,003	$	3,066	$	5,430	$	8,854	$	57,528	$	—	$	101,207
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	345	$	—	$	—	$	345
Commercial construction
Risk Rating
Pass	$	38,626	$	9,589	$	45,073	$	19,740	$	—	$	3,794	$	1,551	$	—	$	118,373
Special mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Total commercial construction	$	38,626	$	9,589	$	45,073	$	19,740	$	—	$	3,794	$	1,551	$	—	$	118,373
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Residential mortgages
Performing	$	180,784	$	206,815	$	42,279	$	56,059	$	33,286	$	110,234	$	114	$	—	$	629,571
Non-performing		—		962		540		—		581		2,125		—		—		4,208
Total residential mortgages	$	180,784	$	207,777	$	42,819	$	56,059	$	33,867	$	112,359	$	114	$	—	$	633,779
Current period gross charge-offs	$	—	$	—	$	112	$	—	$	—	$	6	$	—	$	—	$	118
Home equity loans and lines of credit
Performing	$	6,308	$	6,525	$	9,475		3,454	$	1,369	$	13,375	$	50,611	$	—	$	91,117
Non-performing		—		—		99		—		—		643		906		—		1,648
Total home equity loans and lines of credit	$	6,308	$	6,525	$	9,574	$	3,454	$	1,369	$	14,018	$	51,517	$	—	$	92,765
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	12	$	—	$	12
Consumer
Performing	$	1,517	$	1,533	$	100	$	67	$	6	$	3,272	$	7,050	$	—	$	13,545
Non-performing		—		—		—		—		—		—		—		—		—
Total consumer	$	1,517	$	1,533	$	100	$	67	$	6	$	3,272	$	7,050	$	—	$	13,545
Current period gross charge-offs	$	100	$	6	$	23	$	4	$	1	$	1	$	—	$	—	$	135

The following table presents commercial loans summarized by class of loans and the risk category (dollars in thousands):

	June 30, 2023
			Special
	Pass		Mention		Substandard		Doubtful		Total
Commercial
Real estate	$	352,874	$	1,977	$	56,196	$	118	$	411,165
Commercial and industrial		89,245		1,614		6,448		—		97,307
Construction		91,805		—		909		—		92,714
	$	533,924	$	3,591	$	63,553	$	118	$	601,186

The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity.

At December 31, 2024 and June 30, 2024 and 2023, the Company had residential real estate loans in process of foreclosure of $948,000, $853,000 and $1.3 million, respectively.

As of December 31, 2024 and June 30, 2024 and 2023, the Company had pledged $672.3 million, $605.8 million and $476.6 million respectively, of residential mortgage, home equity and commercial loans as collateral for FHLBNY borrowings and stand-by letters of credit.

At December 31, 2024, June 30, 2024 and 2023, loans to executive officers, directors, or to associates of such persons, as well as activity in such loans for the years then ended were immaterial as a percentage of total loans receivable.

The Company retains the servicing rights on certain mortgage loans sold, and may release the servicing rights on others. Total residential mortgage loans serviced by the Company for unrelated third parties were approximately $15.7 million, $13.5 million and $15.3 million at December 31, 2024 and June 30, 2024 and 2023, respectively. At December 31, 2024 and June 30, 2024 and 2023, the unamortized balance of mortgage servicing rights on loans sold with servicing retained was approximately $140,000, $116,000 and $131,000, respectively. The estimated fair value of these mortgage servicing rights was in excess of their carrying value at December 31, 2024 and June 30, 2024 and 2023, and therefore no valuation reserve was necessary. At December 31, 2024 and June 30, 2024 and 2023, the Company held escrow funds in trust on loans serviced for others of $336,000, $368,000 and $396,000, respectively.