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LOANS (Tables)

9 Months Ended

Jun. 30, 2022

The following table sets forth the classification of the Company’s loans by loan portfolio segment for the periods presented.


	June 30, 2022		September 30, 2021
(in thousands)
Residential real estate	$	431,409	$	444,011
Multi-family		478,756		266,294
Commercial real estate		429,953		348,641
Commercial and industrial		56,544		172,274
Construction and land development		17,214		15,374
Consumer		12		11
Gross loans		1,413,888		1,246,605
Net deferred costs (fees)		1,889		520
Total loans		1,415,777		1,247,125
Allowance for loan losses		(10,886)		(8,552)
Total loans, net	$	1,404,891	$	1,238,573

Carrying Amount for Purchased Credit Impaired Loans

The Company has purchased loans, for which there was, at acquisition, evidence of deterioration of credit quality since origination and it was probable, at acquisition, that all contractually required payments would not be collected. The carrying amount for those loans is as follows:


	June 30,		September 30,
	2022		2021
(in thousands)
Commercial real estate	$	595	$	8,324
Commercial and industrial		642		1,917
Total recorded investment	$	1,237	$	10,241

Changes in Accretable Difference on Purchased Loans

The following table presents a summary of changes in accretable difference on purchased loans accounted for under ASC 310-30:


	Three Months Ended		Nine Months Ended
(in thousands)	June 30, 2022		June 30, 2022
Balance at beginning of period	$	88	$	346
Accretable differences acquired		—		—
Accretion		(16)		(1,799)
Adjustments to accretable difference due to changes in expected cash flows		—		(381)
Other changes, net		—		1,906
Ending balance	$	72	$	72

Activity in Allowance for Loan Losses by Portfolio Segment

The following summarizes the activity in the allowance for loan losses by portfolio segment for the periods indicated:


	Three Months Ended June 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning balance	$	3,400	$	2,627	$	3,327	$	532	$	—	$	—	$	9,886
Charge-offs		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—
Provision (credit) for loan losses		(168)		503		479		103		82		1		1,000
Ending Balance	$	3,232	$	3,130	$	3,806	$	635	$	82	$	1	$	10,886


	Three Months Ended June 30, 2021
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning balance	$	4,851	$	1,955	$	1,310	$	62	$	—	$	1	$	8,179
Charge-offs		(267)		(32)		(29)		—		—		—		(328)
Recovories		—		—		—		1		—		—		1
Provision (credit) for loan losses		(209)		(23)		228		4		—		—		—
Ending balance	$	4,375	$	1,900	$	1,509	$	67	$	—	$	1	$	7,852


	Nine Months Ended June 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning Balance	$	4,155	$	2,433	$	1,884	$	79	$	—	$	1	$	8,552
Charge-offs		—		(66)		—		—		—		—		(66)
Recoveries		—		—		—		—		—		—		—
Provision (credit) for loan losses		(923)		763		1,922		556		82		—		2,400
Ending Balance	$	3,232	$	3,130	$	3,806	$	635	$	82	$	1	$	10,886


	Nine Months Ended June 30, 2021
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning Balance	$	5,103	$	1,506	$	1,221	$	38	$	—	$	1	$	7,869
Charge-offs		(267)		(32)		(29)		—		—		—		(328)
Recoveries		—		—		—		11		—		—		11
Provision (credit) for loan losses		(461)		426		317		18		—		—		300
Ending Balance	$	4,375	$	1,900	$	1,509	$	67	$	—	$	1	$	7,852

Allowance for Loan Losses and Recorded Investment by Portfolio Segment Based on Impairment Method

The following table represents the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment based on impairment evaluation method. The recorded investment in loans excludes accrued interest receivable due to immateriality.


	June 30, 2022
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		3,232		3,130		3,806		635		82		1		10,886
Purchased-credit impaired		—		—		—		—		—		—		—
Total allowance for loan losses	$	3,232	$	3,130	$	3,806	$	635	$	82	$	1	$	10,886
Loans:
Individually evaluated for impairment	$	5,427	$	2,343	$	5,844	$	205	$	—	$	—	$	13,819
Collectively evaluated for impairment		426,421		477,023		423,925		56,085		17,254		13		1,400,721
Purchased-credit impaired		—		—		595		642		—		—		1,237
Total loans held for investment	$	431,848	$	479,366	$	430,364	$	56,932	$	17,254	$	13	$	1,415,777


	September 30, 2021
							Commercial		Construction
	Residential		Multi-		Commercial		and			and Land
(in thousands)	Real Estate		Family		Real Estate		Industrial		Development		Consumer		Total
Allowance for loan losses:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		4,155		2,433		1,884		79		—		1		8,552
Purchased-credit impaired		—		—		—		—		—		—		—
Total allowance for loan losses	$	4,155	$	2,433	$	1,884	$	79	$	—	$	1	$	8,552
Loans:
Individually evaluated for impairment	$	7,198	$	458	$	517	$	500	$	—	$	—	$	8,673
Collectively evaluated for impairment		436,942		266,256		339,966		169,660		15,374		13		1,228,211
Purchased-credit impaired		—		—		8,324		1,917		—		—		10,241
Total loans held for investment	$	444,140	$	266,714	$	348,807	$	172,077	$	15,374	$	13	$	1,247,125

Impaired Loans by Portfolio Segment

The following presents information related to the Company’s impaired loans by portfolio segment for the periods shown.


	June 30, 2022						September 30, 2021
	Unpaid						Unpaid
	Principal		Recorded		Allowance		Principal		Recorded		Allowance
(in thousands)	Balance		Investment		Allocated		Balance		Investment		Allocated
With no related allowance recorded:
Residential real estate	$	5,358	$	5,427	$	—	$	7,382	$	7,198	$	—
Multi-family		2,264		2,343		—		382		458		—
Commercial real estate		5,822		5,844		—		522		517		—
Commercial and industrial		220		205		—		535		500		—
Total	$	13,664	$	13,819	$	—	$	8,821	$	8,673	$	—


	Three Months Ended June 30,								Nine Months Ended June 30,
	2022				2021				2022				2021
	Average		Interest		Average		Interest		Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income		Recorded		Income		Recorded		Income
(in thousands)	Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾		Investment		Recognized⁽¹⁾
Residential real estate	$	5,034	$	17	$	5,937	$	35	$	4,400	$	50	$	4,890	$	76
Multi-family		1,058		—		171		3		641		—		85		7
Commercial real estate		5,851		—		193		1		2,883		—		81		2
Commercial and industrial		207		—		181		—		200		—		60		—
Total	$	12,150	$	17	$	6,482	$	39	$	8,124	$	50	$	5,116	$	85

(1)	Accrual basis interest income recognized approximates cash basis income.

Aging of Recorded Investment in Past Due and Non-accrual Loans by Portfolio Segment

At June 30, 2022 and September 30, 2021, past due and non-accrual loans disaggregated by portfolio segment were as follows:


(in thousands)	Past Due and Non-Accrual
					Greater than
	30 - 59 days		60 - 89 days		89 days past					Total past		Purchased-
	past due and		past due and		due and					due and non-		credit
June 30, 2022	accruing		accruing		accruing		Non-accrual			accrual		impaired		Current		Total
Residential real estate	$	1,928	$	—	$	—	$	4,099	(1)	$	6,027	$	—	$	425,821	$	431,848
Multi-family		—		1,230		—		2,342	(2)		3,572		—		475,794		479,366
Commercial real estate		—		—		—		5,844	(3)		5,844		595		423,925		430,364
Commercial and industrial		—		978		—		206	(4)		1,184		642		55,106		56,932
Construction and land development		—		—		—		—			—		—		17,254		17,254
Consumer		—		—		—		—			—		—		13		13
Total	$	1,928	$	2,208	$	—	$	12,491		$	16,627	$	1,237	$	1,397,913	$	1,415,777

(1)	Of the residential real estate non-accrual loans, $2,184 were current and $1,915 were greater than 89 days past due.

(2)	Multi-family non-accrual loans at June 30, 2022 were greater than 89 days past due.

(3)	Commercial real estate non-accrual loans at June 30, 2022 were greater than 89 days past due.

(4)	Commercial and industrial non-accrual loans at June 30, 2022 were greater than 89 days past due.


(in thousands)	Past Due and Non-Accrual
					Greater than
	30 - 59 days		60 - 89 days		89 days past					Total past		Purchased-
	past due and		past due and		due and					due and non-		credit
September 30, 2021	accruing		accruing		accruing		Non-accrual			accrual		Impaired		Current		Total
Residential real estate	$	1,032	$	1,601	$	—	$	5,554	(1)	$	8,187	$	—	$	435,953	$	444,140
Multi-family		—		—		—		458	(2)		458		—		266,256		266,714
Commercial real estate		1,939		—		—		1,016	(3)		2,955		8,324		337,528		348,807
Commercial and industrial		3,641		—		—		—			3,641		1,917		166,519		172,077
Construction and land development		—		—		—		—			—		—		15,374		15,374
Consumer		—		—		—		—			—		—		13		13
Total	$	6,612	$	1,601	$	—	$	7,028		$	15,241	$	10,241	$	1,221,643	$	1,247,125

(1)	Of the residential real estate non-accrual loans, $1,026 were 61 days past due and $4,528 were greater than 89 days past due.

(2)	Multi-family non-accrual loans at September 30, 2021 were greater than 89 days past due.

(3)	Commercial real estate non-accrual loans at September 30, 2021 were greater than 89 days past due.

Loan Portfolio Based on Internal Rating Category

At June 30, 2022 and September 30, 2021, the Company’s loan portfolio by credit risk rating disaggregated by portfolio segment were as follows:


	June 30, 2022
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	426,257	$	516	$	4,636	$	—	$	431,409
Multi-family		473,592		2,821		2,343		—		478,756
Commercial		412,834		8,818		8,301		—		429,953
Commercial and industrial		53,811		637		2,096		—		56,544
Construction and land development		14,806		2,408		—		—		17,214
Consumer		12		—		—		—		12
Total	$	1,381,312	$	15,200	$	17,376	$	—	$	1,413,888


	September 30, 2021
			Special
(in thousands)	Pass		Mention		Substandard		Doubtful		Total
Real Estate:
Residential	$	433,299	$	5,115	$	5,594	$	3	$	444,011
Multi-family		262,984		2,852		458		—		266,294
Commercial		316,727		16,274		15,640		—		348,641
Commercial and industrial		168,104		540		3,630		—		172,274
Construction and land development		13,607		1,767		—		—		15,374
Consumer		11		—		—		—		11
Total	$	1,194,732	$	26,548	$	25,322	$	3	$	1,246,605