Allowance for Loan Loss

3 Months Ended

Mar. 31, 2022

Allowance for Loan Loss

Allowance for Loan Loss

6.Allowance for Loan Loss

Changes in the allowance for loan losses and information pertaining to the allocation of the allowance for loan losses and balances of the allowance for loan losses and loans receivable based on individual and collective impairment evaluation by loan portfolio class are summarized as follows:

	Three Months Ended March 31, 2022
	One- to four-		Construction
	family		residential		Real estate				Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		Multi-family		commercial		business
Allowance for loan losses:
Beginning balance	$	688	$	—	$	630	$	2	$	—	$	161
Charge-offs		(10)		—		—		—		—		—
Recoveries		15		—		—		—		—		—
Provision for loan losses		46		—		14		1		—		48
Ending balance	$	739	$	—	$	644	$	3	$	—	$	209
Ending balance:  related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	12
Ending balance:  related to loans collectively evaluated for impairment	$	739	$	—	$	644	$	3	$	—	$	197
Loans receivable:
Ending balance	$	111,291	$	—	$	20,857	$	452	$	—	$	12,298
Ending balance: individually evaluated for impairment	$	2,158	$	—	$	416	$	—	$	—	$	128
Ending balance: collectively evaluated for impairment	$	109,133	$	—	$	20,441	$	452	$	—	$	12,170

	Three Months Ended March 31, 2022 (cont'd)
	Home equity		Manufactured						Recreational		Other
(In thousands)	and junior liens		homes		Automobile		Student		vehicle		consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	39	$	102	$	107	$	64	$	—	$	48	$	—	$	1,841
Charge-offs		—		—		(40)		—		—		—		—		(50)
Recoveries		—		—		17		1		—		—		—		33
Provision (credit) for loan losses		4		14		23		(1)		—		1		—		150
Ending balance	$	43	$	116	$	107	$	64	$	—	$	49	$	—	$	1,974
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	12
Ending balance: related to loans collectively evaluated for impairment	$	43	$	116	$	107	$	64	$	—	$	49	$	—	$	1,962
Loans receivable:
Ending balance	$	10,433	$	48,116	$	22,025	$	2,102	$	28,692	$	5,309	$	—	$	261,575
Ending balance: individually evaluated for impairment	$	112	$	—	$	—	$	—	$	—	$	—	$	—	$	2,814
Ending balance: collectively evaluated for impairment	$	10,321	$	48,116	$	22,025	$	2,102	$	28,692	$	5,309	$	—	$	258,761

	Three Months Ended March 31, 2021
	One- to four-		Construction
	family		residential		Real estate				Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		Multi-family		commercial		business
Allowance for loan losses:
Beginning balance	$	457	$	—	$	319	$	26	$	—	$	617
Charge-offs		(3)		—		(51)		—		—		(17)
Recoveries		1		—		—		6		—		7
Provision (credit) for loan losses		85		—		120		(21)		—		(77)
Ending balance	$	540	$	—	$	388	$	11	$	—	$	530
Ending balance:  related to loans individually evaluated for impairment	$	18	$	—	$	66	$	—	$	—	$	210
Ending balance:  related to loans collectively evaluated for impairment	$	522	$	—	$	322	$	11	$	—	$	320
Loans receivable:
Ending balance	$	122,533	$	—	$	24,405	$	2,331	$	—	$	19,576
Ending balance: individually evaluated for impairment	$	2,551	$	—	$	2,788	$	—	$	—	$	2,177
Ending balance: collectively evaluated for impairment	$	119,982	$	—	$	21,617	$	2,331	$	—	$	17,399

	Three Months Ended March 31, 2021 (cont'd)
	Home equity		Manufactured						Recreational		Other
(In thousands)	and junior liens		homes		Automobile		Student		vehicle		consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	46	$	76	$	127	$	69	$	—	$	84	$	—	$	1,821
Charge-offs		(2)		—		(2)		—		—		(33)		—		(108)
Recoveries		—		—		10		1		7		1		—		33
Provision (credit) for loan losses		4		5		2		1		(7)		23		—		135
Ending balance	$	48	$	81	$	137	$	71	$	—	$	75	$	—	$	1,881
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	2	$	—	$	296
Ending balance: related to loans collectively evaluated for impairment	$	48	$	81	$	137	$	71	$	—	$	73	$	—	$	1,585
Loans receivable:
Ending balance	$	10,365	$	46,608	$	22,421	$	2,304	$	17,043	$	4,408	$	—	$	271,994
Ending balance: individually evaluated for impairment	$	103	$	—	$	—	$	—	$	—	$	5	$	—	$	7,624
Ending balance: collectively evaluated for impairment	$	10,262	$	46,608	$	22,421	$	2,304	$	17,043	$	4,403	$	—	$	264,370

	Year Ended December 31, 2021
	One- to four-		Construction
	family		residential		Real estate				Construction		Commercial
(In thousands)	residential		mortgage		nonresidential		Multi-family		commercial		business
Allowance for loan losses:
Beginning balance	$	457	$	—	$	319	$	26	$	—	$	617
Charge-offs		(117)		—		(386)		—		—		(84)
Recoveries		28		—		16		12		—		7
Provision (credit) for loan losses		320		—		681		(36)		—		(379)
Ending balance	$	688	$	—	$	630	$	2	$	—	$	161
Ending balance: related to loans individually evaluated for impairment	$	7	$	—	$	—	$	—	$	—	$	12
Ending balance: related to loans collectively evaluated for impairment	$	681	$	—	$	630	$	2	$	—	$	149
Loans receivable:
Ending balance	$	113,061	$	—	$	21,478	$	456	$	—	$	12,528
Ending balance: individually evaluated for impairment	$	2,576	$	—	$	416	$	—	$	—	$	128
Ending balance: collectively evaluated for impairment	$	110,485	$	—	$	21,062	$	456	$	—	$	12,400

	Year Ended December 31, 2021 (cont'd)
	Home equity		Manufactured						Recreational		Other
(In thousands)	and junior liens		homes		Automobile		Student		vehicle		consumer		Unallocated		Total
Allowance for loan losses:
Beginning balance	$	46	$	76	$	127	$	69	$	—	$	84	$	—	$	1,821
Charge-offs		(2)		—		(12)		—		(1)		(45)		—		(647)
Recoveries		—		—		48		3		8		5		—		127
Provision (credit) for loan losses		(5)		26		(56)		(8)		(7)		4		—		540
Ending balance	$	39	$	102	$	107	$	64	$	—	$	48	$	—	$	1,841
Ending balance: related to loans individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	19
Ending balance: related to loans collectively evaluated for impairment	$	39	$	102	$	107	$	64	$	—	$	48	$	—	$	1,822
Loans receivable:
Ending balance	$	9,701	$	47,717	$	22,666	$	2,096	$	29,463	$	5,492	$	—	$	264,658
Ending balance: individually evaluated for impairment	$	67	$	—	$	—	$	—	$	—	$	—	$	—	$	3,187
Ending balance: collectively evaluated for impairment	$	9,634	$	47,717	$	22,666	$	2,096	$	29,463	$	5,492	$	—	$	261,471

The allowance for loan losses represents management's estimate of losses inherent in the loan portfolio as of the consolidated statement of financial condition date and is recorded as a reduction of loans. The allowance for loan losses is increased by the provision for loan losses, and decreased by charge-offs, net of recoveries. Loans deemed to be uncollectible are charged against the allowance for loan losses, and subsequent recoveries, if any, are credited to the allowance. All, or part, of the principal balance of loans receivable is charged off to the allowance as soon as it is determined that the repayment of all, or part, of the principal balance is highly unlikely. Consumer loans not secured by residential real estate are generally charged off no later than 90 days past due on a contractual basis, earlier in the event of bankruptcy, or if there is an amount deemed uncollectible. Because all identified losses are immediately charged off, no portion of the allowance for loan losses is restricted to any individual loan or groups of loans, and the entire allowance is available to absorb any and all loan losses.

The allowance consists of specific, general, and unallocated components. The specific component relates to loans that are classified as impaired. For loans that are classified as impaired, an allowance is established when the discounted cash flows (or collateral value or observable market price) of the impaired loan is lower than the carrying amount of that loan. The general component covers pools of loans by loan class including commercial loans not considered impaired, automobile loans identified in pools by product and underwriting standards, as well as smaller balance homogeneous consumer loans. These pools of loans are evaluated for loss exposure based upon historical loss rates for each of these categories of loans, adjusted for qualitative risk factors. These qualitative risk factors include:

● Asset quality trends

● The trend in loan growth and portfolio mix

● Regional and local economic conditions

● Historical loan loss experience

● Underlying credit quality

Each factor is assigned a value to reflect improving, stable, or declining conditions based on management's best judgment using relevant information available at the time of the evaluation.

The risk characteristics within the loan portfolio vary depending on the loan segment. Consumer loans generally are repaid from personal sources of income. Risks associated with consumer loans primarily include general economic risks such as declines in the local economy creating higher rates of unemployment. Those conditions may also lead to a decline in collateral values should the Company be required to repossess the collateral securing consumer loans. These economic risks also impact the commercial loan segment, however, commercial loans are considered to have greater risk than consumer loans as the primary source of repayment is from the cash flow of the business customer. Loans secured by real estate provide the best collateral protection and thus significantly reduce the inherent risk in the portfolio.