LOANS RECEIVABLE, NET

12 Months Ended

Dec. 31, 2021

A summary of loans receivable, net is as follows:


	December 31, 2021		December 31, 2020
	(In thousands)
Residential one-to-four family	$	560,976	$	611,603
Multifamily	515,240		427,436
Non-residential	141,561		128,141
Construction and land	23,419		33,691
Junior liens	18,464		23,814
Commercial and industrial (including PPP)	21,563		54,053
Consumer and other	87		99
Total loans	1,281,310		1,278,837

Deferred fees, costs and premiums and discounts, net	6,299		5,236
Allowance for loan losses	(14,425)		(16,959)
	(8,126)		(11,723)
Loans receivable, net	$	1,273,184	$	1,267,114

The commercial and industrial portfolio is comprised of $16.8 million of PPP loans as well as $4.8 million of general commercial and industrial loans, including Small Business Administration (“SBA”), as of December 31, 2021. At December 31, 2020, the commercial and industrial portfolio was comprised of PPP loans totaling $53.9 million and $131 thousand of general commercial and industrial loans .

The portfolio classes in the above table have unique risk characteristics with respect to credit quality:

•Payment on multifamily and non-residential mortgages is driven principally by operating results of the managed properties or underlying business and secondarily by the sale or refinance of such properties. Both primary and secondary sources of repayment, and value of the properties in liquidation, may be affected to a greater extent by adverse conditions in the real estate market or the economy in general.

•Properties underlying construction and land loans often do not generate sufficient cash flows to service debt and thus repayment is subject to ability of the borrower and, if applicable, guarantors, to complete development or construction of the property and carry the project, often for extended periods of time. As a result, the performance of these loans is contingent upon future events whose probability at the time of origination is uncertain.

•Commercial and Industrial Loans consist of PPP loans, and other loans that are originated or purchased. This program originated from the Coronavirus Aid Relief and Economic Security (“CARES”) Act. The SBA will forgive loans if all employee retention criteria are met, and the funds are used for eligible expenses.

•The ability of borrowers to service debt in the residential one-to-four family, junior liens and consumer loan portfolios is generally subject to personal income which may be impacted by general economic conditions, such as increased unemployment levels. These loans are predominately collateralized by first and second liens on single family properties. If a borrower cannot maintain the loan, the Company’s ability to recover against the collateral in sufficient amount and in a timely manner may be significantly influenced by market, legal and regulatory conditions.

The following tables present the activity in the Company’s allowance for loan losses by class of loans for the years ended December 31, 2021, and 2020:


	Residential One-To-Four Family		Multifamily		Non-Residential		Construction and Land		Junior Liens		Commercial and Industrial (including PPP)		Consumer and Other		Unallocated		Total
	(In thousands)
Year Ended December 31, 2021
Allowance for loan losses
Beginning balance	$	3,579	$	5,460	$	3,244	$	3,655	$	916	$	2	$	48	$	55	$	16,959
Charge-offs	—		—		—		—		—		—		(16)		—		(16)
Recoveries	—		—		—		—		—		—		—		—		—
(Recovery of) provision for loan losses	(757)		(197)		(398)		(977)		(280)		49		6		36		(2,518)
Total ending allowance balance	$	2,822	$	5,263	$	2,846	$	2,678	$	636	$	51	$	38	$	91	$	14,425

Year Ended December 31, 2020
Allowance for loan losses
Beginning balance	$	3,446	$	4,256	$	2,548	$	3,028	$	1,002	$	—	$	56	$	164	$	14,500
Charge-offs	(49)		—		—		—		—		—		(10)		—		(59)
Recoveries	—		—		—		—		—		—		—		—		—
(Recovery of) provision for loan losses	182		1,204		696		627		(86)		2		2		(109)		2,518
Total ending allowance balance	$	3,579	$	5,460	$	3,244	$	3,655	$	916	$	2	$	48	$	55	$	16,959

The following table represents the allocation of allowance for loan losses and the related recorded investment (including deferred fees and costs) in loans by loan portfolio segment disaggregated based on the impairment methodology at December 31, 2021 and December 31, 2020:


	Residential One-To-Four Family		Multifamily		Non-Residential		Construction and Land		Junior Liens		Commercial and Industrial (including PPP)		Consumer and Other		Unallocated		Total
	(In thousands)
December 31, 2021
Allowance for loan losses:
Individually evaluated for impairment	$	31	$	—	$	—	$	—	$	—	$	—	$	37	$	—	$	68
Collectively evaluated for impairment	2,791		5,263		2,846		2,678		636		51		1		91		14,357
Total	$	2,822	$	5,263	$	2,846	$	2,678	$	636	$	51	$	38	$	91	$	14,425

Loans receivable:
Individually evaluated for impairment	$	10,169	$	684	$	4,577	$	—	$	55	$	—	$	37	$	—	$	15,522
Collectively evaluated for impairment	556,314		515,884		136,957		23,420		18,495		20,966		51				1,272,087
Total	$	566,483	$	516,568	$	141,534	$	23,420	$	18,550	$	20,966	$	88	$	—	$	1,287,609


December 31, 2020
Allowance for loan losses:
Individually evaluated for impairment	$	49	$	26	$	—	$	—	$	—	$	—	$	46	$	—	$	121
Collectively evaluated for impairment	3,530		5,434		3,244		3,655		916		2		2		55		16,838
Total	$	3,579	$	5,460	$	3,244	$	3,655	$	916	$	2	$	48	$	55	$	16,959

Loans receivable:
Individually evaluated for impairment	$	11,829	$	1,721	$	5,084	$	—	$	58	$	—	$	46	$	—	$	18,738
Collectively evaluated for impairment	604,419		427,374		123,133		33,630		23,860		52,867		52		—		1,265,335
Total	$	616,248	$	429,095	$	128,217	$	33,630	$	23,918	$	52,867	$	98	$	—	$	1,284,073

The following table presents information related to impaired loans by class of loans as of December 31, 2021 and December 31, 2020.


	Unpaid Principal Balance		Recorded Investment		Allowance for Loan Losses Allocated		Average Recorded Investment		Interest Income Recognized		Cash Basis Interest Recognized
	(In thousands)
December 31, 2021
With no related allowance recorded:
Residential one-to-four family	$	8,744	$	9,108	$	—	$	9,534	$	75	$	75
Multifamily	684		684		—		1,170		26		24
Non-residential	4,725		4,577		—		4,869		210		196
Construction and land	—		—		—		—		—		—
Junior liens	55		55		—		57		3		3
Commercial and Industrial (including PPP)	—		—		—		—		—		—
	14,208		14,424		—		15,630		314		298
With an allowance recorded:
Residential one-to-four family	1,062		1,061		31		1,243		50		46
Multifamily	—		—		—		—		—		—
Non-residential	—		—		—		—		—		—
Construction and land	—		—		—		—		—		—
Commercial and Industrial (including PPP)	—		—		—		—		—		—
Consumer and other	37		37		37		41		2		2
	1,099		1,098		68		1,284		52		48
Total	$	15,307	$	15,522	$	68	$	16,914	$	366	$	346

December 31, 2020
With no related allowance recorded:
Residential one-to-four family	$	6,399	$	6,508	$	—	$	473	$	97	$	96
Multifamily	1,216		1,226		—		405		45		41
Non-residential	6,006		5,812		—		2,410		207		201
Construction and land	—		—		—		—		—		—
Junior liens	60		59		—		27		1		1
Commercial and Industrial (including PPP)	—		—		—		—		—		—
	13,681		13,605		—		3,315		350		339
With an allowance recorded:
Residential one-to-four family	1,519		1,521		108		679		53		47
Multifamily	353		352		28		157		11		10
Non-residential	—		—		—		—		—		—
Construction and land	—		—		—		—		—		—
Commercial and Industrial (including PPP)	—		—		—		—		—		—
Consumer and other	49		48		48		23		1		1
	1,921		1,921		184		859		65		58
Total	$	15,602	$	15,526	$	184	$	4,174	$	415	$	397

The recorded investment in loans includes deferred fees, costs and discounts. For purposes of this disclosure, the unpaid principal balance is not reduced for partial charge-offs.

The total recorded investment of loans whose terms have been modified in troubled debt restructurings was $5.4 million and $6.3 million as of December 31, 2021 and December 31, 2020, respectively. The Company has allocated $68 thousand and $95 thousand, respectively, of specific reserves to troubled debt restructured loans as of December 31, 2021 and December 31, 2020. The modification of the terms of troubled debt restructured includes one or a combination of the following: a reduction of the stated interest rate of the loan or an extension of the maturity date. The Company is not committed to lend any additional amounts to customers with outstanding loans that are classified as troubled debt restructurings as of December 31, 2021.

A troubled debt restructuring (“TDR”) loan is considered to be in payment default once it is 90 days contractually past due under the modified terms. There were no troubled debt restructurings for which there was a payment default within twelve months following the modification during the periods ended December 31, 2021 and December 31, 2020.

The Company did not record any troubled debt restructurings during the years December 31, 2021 and 2020.

The following table presents the recorded investment in non-accrual loans and loans past due 90 days or more still on accrual as of December 31, 2021 and December 31, 2020:


	Nonaccrual				Loans Past Due 90 Days and Still Accruing
	12/31/2021		12/31/2020		12/31/2021			12/31/2020
	(In thousands)
Residential one-to-four family	$	10,805	$	11,813	$	—		$	—
Multifamily	139		156		—			—
Non-residential	857		805		—			—
Construction and land	—		—		—			—
Junior liens	182		82		—			—
Commercial and industrial (including PPP)	—		—		116		(1)	—
Total	$	11,983	$	12,856	$	116		$	—

(1) PPP loans 90 days past due and accruing totaled $116 thousand. These PPP loans were not reported in non-performing loans as they carry the federal guarantee of the SBA.

The following table presents the recorded investment in past due and current loans by loan portfolio class as of December 31, 2021 and December 31, 2020:


	60-89 Days Past Due		90 Days and Greater Past Due		Total Past Due		Current		Total Loans Receivable
	(In thousands)
December 31, 2021
Residential one-to-four family	$	457	$	8,936	$	9,393	$	557,090	$	566,483
Multifamily	—		—		—		516,568		516,568
Non-residential	—		381		381		141,153		141,534
Construction and land	—		—		—		23,420		23,420
Junior liens	53		182		235		18,315		18,550
Commercial and Industrial (including PPP)	57		116		173		20,793		20,966
Consumer and other	—		—		—		88		88
Total	$	567	$	9,615	$	10,182	$	1,277,427	$	1,287,609

December 31, 2020
Residential one-to-four family	$	3,151	$	10,075	$	13,226	$	603,022	$	616,248
Multifamily	—		156		156		428,939		429,095
Non-residential	—		805		805		127,412		128,217
Construction and land	3,000		—		3,000		30,630		33,630
Junior liens	—		—		—		23,918		23,918
Commercial and Industrial (including PPP)	—		—		—		52,867		52,867
Consumer and other	—		—		—		98		98
Total	$	6,151	$	11,036	$	17,187	$	1,266,886	$	1,284,073

The Company categorizes loans into risk categories based on relevant information about the quality and realizable value of collateral, if any, and the ability of borrowers to service their debts such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes loans individually by classifying the loans as to credit risk. This analysis is performed whenever a credit is extended, renewed, or modified, or when an observable event occurs indicating a potential decline in credit quality, and no less than annually for large balance loans. The Company used the following definitions for risk ratings for loans classified other than Pass:

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 the Company’s credit position at some future date.

Substandard – Loans classified as substandard are inadequately protected by the current sound 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 repayment and liquidation of the debt. They are characterized by distinct possibility that the Company 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 known facts, conditions, and values, highly questionable and improbable.

Loss – Assets classified as loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the asset has absolutely no recovery or salvage value, but rather that it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future.

The following table presents the risk category of loans by class of loans based on the most recent analysis performed as of December 31, 2021 and December 31, 2020:


	Pass		Special Mention		Substandard		Doubtful / Loss		Total
	(In thousands)
December 31, 2021
Residential one-to-four family	$	555,184	$	—	$	11,299	$	—	$	566,483
Multifamily	510,815		5,069		684		—		516,568
Non-residential	140,377		144		1,013		—		141,534
Construction and land	23,420		—		—		—		23,420
Junior liens	18,368		—		182		—		18,550
Commercial and Industrial (including PPP)	20,966		—		—				20,966
Consumer and other	88		—		—		—		88
Total	$	1,269,218	$	5,213	$	13,178	$	—	$	1,287,609

December 31, 2020
Residential one-to-four family	$	604,167	$	—	$	12,081	$	—	$	616,248
Multifamily	411,369		16,648		1,078		—		429,095
Non-residential	127,089		154		974		—		128,217
Construction and land	33,630		—		—		—		33,630
Junior liens	23,836		—		82		—		23,918
Commercial and Industrial (including PPP)	52,867		—		—		—		52,867
Consumer and other	98		—		—		—		98
Total	$	1,253,056	$	16,802	$	14,215	$	—	$	1,284,073