Loans

3 Months Ended

Mar. 31, 2022

NOTE 3 – LOANS

Loans at March 31, 2022 and December 31, 2021 were as follows:


	2022			2021

Real Estate Loans:
One-to-four family	$	133,719		$	127,755
Multi-family		3,261			3,729
Commercial		83,672			76,967
Construction		16,301			15,518
Total real estate loans		236,953			223,969

Commercial loans		25,418			24,212

Consumer loans:
Home equity loans and lines of credit		4,020			3,717
Other consumer		3,594			2,714
Total consumer loans		7,614			6,431

Total loans		269,985			254,612

Net deferred loans fees		(12	)		(46	)

Allowance for loan losses		(2,446	)		(2,406	)

Loans, net	$	267,527		$	252,160

NOTE 3 – LOANS (Continued)

The following tables present the activity in the allowance for loan losses for the periods ending March 31, 2022, December 31, 2021 and March 31, 2021. The recorded investment in loans in any of the following tables does not include accrued and unpaid interest or any deferred loan fees or costs, as amounts are not significant.


	Real Estate
March 31, 2022	One-to-Four Family			Multi-Family			Commercial			Construction		Commercial			Consumer			Total
Beginning balance January 1, 2022	$	1,355		$	19		$	712		$	109	$	145		$	66		$	2,406
Charge offs		—			—			—			—		—			—			—
Recoveries		—			—			—			—		—			—			—
Provisions		(23	)		(3	)		20			7		21			18			40
Total ending balance March 31, 2022	$	1,332		$	16		$	732		$	116	$	166		$	84		$	2,446
Ending balance attributed to loans:
Individually evaluated for impairment	$	-		$	-		$	-		$	-	$	-		$	-		$	-
Collectively evaluated for impairment		1,332			16			732			116		166			84			2,446
Total ending allowance balance:	$	1,332		$	16		$	732		$	116	$	166		$	84		$	2,446
Loans:
Loans individually evaluated for impairment	$	121		$	-		$	3,175		$	-	$	126		$	-		$	3,422
Loans collectively evaluated for impairment		133,598			3,261			80,497			16,301		25,292			7,614			266,563
Total ending loan balance March 31, 2022	$	133,719		$	3,261		$	83,672		$	16,301	$	25,418		$	7,614		$	269,985

	Real Estate
December 31, 2021	One-to-Four Family			Multi-Family			Commercial			Construction		Commercial			Consumer			Total
Beginning balance January 1, 2021	$	1,300		$	27		$	746		$	37	$	187		$	64		$	2,361
Charge offs		(6	)		—			—			—		—			(14	)		(20	)
Recoveries		—			—			—			—		—			5			5
Provisions		61			(8	)		(34	)		72		(42	)		11			60
Total ending balance December 31, 2021	$	1,355		$	19		$	712		$	109	$	145		$	66		$	2,406
Ending balance attributed to loans:
Individually evaluated for impairment	$	—		$	—		$	—		$	—	$	—		$	—		$	—
Collectively evaluated for impairment		1,355			19			712			109		145			66			2,406
Total ending allowance balance:	$	1,355		$	19		$	712		$	109	$	145		$	66		$	2,406
Loans:
Loans individually evaluated for impairment	$	14		$	—		$	3,189		$	—	$	237		$	—		$	3,440
Loans collectively evaluated for impairment	$	127,740		$	3,730		$	73,778		$	15,518	$	23,975		$	6,431		$	251,172
Total ending balance December 31, 2021	$	127,754		$	3,730		$	76,967		$	15,518	$	24,212		$	6,431		$	254,612

	Real Estate
March 31, 2021	One-to-Four Family			Multi-Family			Commercial			Construction		Commercial			Consumer			Total
Beginning balance January 1, 2021	$	1,300		$	27		$	746		$	37	$	187		$	64		$	2,361
Charge offs		—			—			—			—		—			(2	)		(2	)
Recoveries		—			—			—			—		—			—			—
Provisions		(21	)		(1	)		(7	)		31		(6	)		4			—
Total ending balance March 31, 2021		1,279			26			739			68		181			66			2,359
Ending balance attributed to loans:
Individually evaluated for impairment	$	—		$	—		$	—		$	—	$	—		$	—		$	—
Collectively evaluated for impairment		1,279			26			739			68		181			66			2,359
Total ending allowance balance:	$	1,279		$	26		$	739		$	68	$	181		$	66		$	2,359
Loans:
Loans individually evaluated for impairment	$	439		$	—		$	6,117		$	—	$	1,071		$	—		$	7,627
Loans collectively evaluated for impairment		115,794			4,764			71,797			9,356		23,465			6,010			231,186
Total ending loans balance March 31, 2021	$	116,233		$	4,764		$	77,914		$	9,356	$	24,536		$	6,010		$	238,813

NOTE 3 – LOANS (Continued)

The following tables presents loans individually evaluated for impairment by portfolio class at March 31, 2022 and December 31, 2021 and the respective average balances of impaired loans and interest income recognized for the three months ended March 31, 2022 and 2021:


	March 31, 2022						December 31, 2021
	Unpaid principal balance		Recorded Investment		Related Allowance		Unpaid principal balance		Recorded Investment		Related Allowance
With no recorded allowance:
Real estate loans:
One-to-four family	$	154	$	121	$	—	$	46	$	14	$	—
Multi-family		—		—		—		—		—		—
Commercial		3,175		3,175		—		3,189		3,189		—
Construction		—		—		—		—		—		—
Commercial		126		126		—		243		237		—
Consumer:		—		—		—		—		—		—
Total	$	3,455	$	3,422	$	—	$	3,478	$	3,440	$	—

NOTE 3 – LOANS (Continued)



	Three Months ended March 31, 2022				Three Months ended March 31, 2021
	Average Recorded Investment		Interest Income Recognized		Average Recorded Investment		Interest Income Recognized
With no recorded allowance:
Real estate loans:
One-to-four family	$	67	$	1	$	439	$	5
Multi-family		—		—		—		—
Commercial		3,182		38		6,339		94
Commercial loans:		137		2		1,096		18
Consumer loans:		—		—		—		—
Total	$	3,386	$	41	$	7,874	$	117

There were no loans individually evaluated for impairment with recorded allowance for the three months ended March 31, 2022 and 2021. The difference between interest income recognized and cash basis interest income recognized was not material.

NOTE 3 – LOANS (Continued)

The following tables present the aging of the recorded investment in past due loans at March 31, 2022 and December 31, 2021 by portfolio class of loans:


March 31, 2022	30-59 Days Past Due		60-89 Days Past Due		90 Days or More Past Due		Total Past Due		Current		Total Loans
Real estate loans:
One-to-four family	$	1,712	$	147	$	—	$	1,859	$	131,860	$	133,719
Multi-family		—		—		—		—		3,261		3,261
Commercial		—		35		—		35		83,637		83,672
Construction		—		—		—		—		16,301		16,301
Total real estate loans		1,712		182		—		1,894		235,059		236,953

Commercial		13		—		—		13		25,405		25,418

Consumer loans:
Home equity loans and lines of credit		25		—		—		25		3,995		4,020
Other consumer loans		22		—		—		22		3,572		3,594

Total	$	1,772	$	182	$	—	$	1,954	$	268,031	$	269,985


December 31, 2021	30-59 Days Past due		60-89 Days Past due		90 Days or More Past Due		Total Past Due		Current		Total Loans
Real estate loans:
One-to-four family	$	1,553	$	698	$	193	$	2,444	$	125,310	$	127,754
Multi-family		—		—		—		—		3,730		3,730
Commercial		292		36		—		328		76,639		76,967
Construction		—		—		—		—		15,518		15,518
Total real estate loans		1,845		734		193		2,772		221,197		223,969

Commercial		90		—		—		90		24,122		24,212

Consumer loans:
Home equity loans and lines of credit		32		—		—		32		3,685		3,717
Other consumer loans		27		—		—		27		2,687		2,714

Total	$	1,994	$	734	$	193	$	2,921	$	251,691	$	254,612

NOTE 3 – LOANS (Continued)

A loan past due 90 days or more need not be placed in nonaccrual status, under certain circumstances, if the loan is a consumer loan (loans to individuals for household, family and other personal expenditures) or the loan is secured by a one-to-four family residential property. Such loans should be subject to other alternative methods of evaluation to assure that the Bank's interest income is not materially overstated. There were no loans past due 90 days or more accruing interest as of March 31, 2022. The loans that were past due 90 days or more were accruing interest as of December 31, 2021 due to the fact that they were well secured and in the process of collection.

The following tables present the recorded investment in nonaccrual loans by class of loans as of March 31, 2022 and December 31, 2021:


	2022		2021
Real estate loans:
One-to-four family	$	13	$	14
Commercial real estate		—		—
Construction		—		—
Total real estate loans		13		14

Commercial loans:		—		90

Consumer loans:
Other consumer loans		—		—
Total consumer loans		—		—

Total	$	13	$	104

Troubled Debt Restructurings:

Troubled debt restructurings at March 31, 2022 and December 31, 2021 were $2,877 and $2,878, respectively. The amount of impairment allocated to loans whose loan terms have been modified in troubled debt restructurings was $0 at March 31, 2022 and December 31, 2021. The Company has committed no additional amounts at March 31, 2022 and December 31, 2021 to customers with outstanding loans that are classified as troubled debt restructurings.

NOTE 3 – LOANS (Continued)

There were no loans modified as troubled debt restructurings that occurred during the three months ended March 31, 2022. There were no loans modified as troubled debt restructurings that occurred during the year December 31, 2021.

There were no troubled debt restructurings for which there was a payment default within twelve months of the modification during the three months ended March 31, 2022 or the year ended December 31, 2021. A loan is considered to be in payment default once it is 90 days contractually past due under the modified terms.

In order to determine whether a borrower is experiencing financial difficulty, an evaluation is performed of the probability that the borrower will be in payment default on any of its debt in the foreseeable future without the modification. This evaluation is performed under the Company’s internal underwriting policy.

During the year ended December 31, 2021, we originated $3,446 of small business loans under the second round of Paycheck Protection Program (PPP), created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which was signed into law in March 2020. The CARES Act established the PPP through the Small Business Administration (SBA), which allowed us to lend money to small businesses to maintain employee payrolls through the COVID-19 crisis with guarantees from the SBA. Under this program, loan amounts may be forgiven if the borrower maintains employee payrolls and meet certain other requirements. PPP loans have a fixed interest rate of 1.00% and a maturity date of either two or five years. Such loans totaled $2 and $779 at March 31, 2022 and December 31, 2021, respectively. These loans are included in commercial loans.

Credit Quality Indicators:

The Company utilizes a grading system whereby all loans are assigned a grade based on the risk profile of each loan. Loan grades are determined based on an evaluation of 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. All loans, regardless of size, are analyzed and are given a grade based upon the management’s assessment of the ability of borrowers to service their debts. The analysis is performed on a quarterly basis.

NOTE 3 – LOANS (Continued)

The Company uses the following definitions for loan grades:

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 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.

Loans not meeting the criteria above are graded Pass. These loans are included within groups of homogenous pools of loans based upon portfolio segment and class for estimation of the allowance for loan losses on a collective basis.

NOTE 3 – LOANS (Continued)

At March 31, 2022 and December 31, 2021, based on the most recent analysis performed, the loan grade for each loan by portfolio class is as follows:


March 31, 2022	Pass		Special Mention		Substandard		Doubtful		Total

Real estate loans:
One-to-four family	$	133,476	$	—	$	243	$	—	$	133,719
Multi-family		3,261		—		—		—		3,261
Commercial		78,549		1,914		3,209		—		83,672
Construction		16,207		—		94		—		16,301
Total real estate loans		231,493		1,914		3,546		—		236,953

Commercial		25,107		102		209		—		25,418

Consumer loans:
Home equity loans and lines of credit		4,020		—		—		—		4,020
Other consumer loans		3,594		—		—		—		3,594

Total	$	264,214	$	2,016	$	3,755	$	—	$	269,985


December 31, 2021	Pass		Special Mention		Substandard		Doubtful		Total

Real estate loans:
One-to-four family	$	127,513	$	—	$	242	$	—	$	127,755
Multi-family		3,729		—		—		—		3,729
Commercial		71,774		1,969		3,224		—		76,967
Construction		15,518		—		—		—		15,518
Total real estate loans		218,534		1,969		3,466		—		223,969

Commercial		23,824		104		284		—		24,212

Consumer loans:
Home equity loans and lines of credit		3,717		—		—		—		3,717
Other consumer loans		2,714		—		—		—		2,714

Total	$	248,789	$	2,073	$	3,750	$	—	$	254,612