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LOANS RECEIVABLE
 9 Months Ended
Sep. 30, 2024
Receivables [Abstract]  
LOANS RECEIVABLE LOANS RECEIVABLE
A summary of loans receivable, net at September 30, 2024 and December 31, 2023, follows:
September 30, 2024December 31, 2023
(In thousands)
Residential$516,754 $550,929 
Multifamily666,304 682,564 
Commercial real estate241,711 232,505 
Construction80,081 60,414 
Junior liens24,174 22,503 
Commercial and industrial14,228 11,768 
Consumer and other7,731 47 
Total loans1,550,983 1,560,730 
Less: Allowance for credit losses (1)13,012 14,154 
Loans receivable, net$1,537,971 $1,546,576 
(1) For more information, see Note 4 - Allowance for Credit Losses.
Loans are recorded at amortized cost, which includes principal balance, net deferred fees or costs, premiums and discounts. The Company elected to exclude accrued interest receivable from amortized cost. Accrued interest receivable is reported separately in the consolidated balance sheets and totaled $6.5 million and $6.1 million at September 30, 2024 and December 31, 2023, respectively. Loan origination fees and certain direct loan origination costs are deferred and the net fee or cost is recognized in interest income as an adjustment of yield. At September 30, 2024 and December 31, 2023, net deferred loan fees totaled $2.2 million and $2.0 million, respectively.
The portfolio classes in the above table have unique risk characteristics with respect to credit quality:
•Payment on multifamily and commercial real estate 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 the 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 loans often do not generate sufficient cash flows to service debt and thus repayment is subject to the 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 (“C&I”) loans include C&I revolving lines of credit, term loans, SBA 7a loans and to a lesser extent, Paycheck Protection Program (“PPP”) loans. Payments on C&I loans are driven principally by the cash flows of the businesses and secondarily by the sale or refinance of any collateral securing the loans. Both the cash flow and value of the collateral in liquidation may be affected by adverse general economic conditions.
•The ability of borrowers to service debt in the residential, 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.
Credit Quality Indicators
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 by credit risk. This analysis is performed whenever 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 loan classification:
Pass – Loans classified as pass are loans performing under the original contractual terms, do not currently pose any identified risk and can range from the highest to pass/watch quality, depending on the degree of potential risk.
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 a 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 the asset even though partial recovery may be effected in the future.
The following table presents the risk category of loans by class of loan and vintage as of September 30, 2024:
Term Loans by Origination Year
20242023202220212020Pre-2020Revolving LoansTotal
(in thousands)
Residential
Pass$10,095 $12,976 $92,391 $103,338 $13,975 $279,092 $— $511,867 
Special mention— — — — — 647 — 647 
Substandard— — — — — 4,240 — 4,240 
Total10,095 12,976 92,391 103,338 13,975 283,979 — 516,754 
Multifamily
Pass4,307 16,989 279,121 150,019 34,775 180,968 — 666,179 
Substandard— — — — — 125 — 125 
Total4,307 16,989 279,121 150,019 34,775 181,093 — 666,304 
Commercial real estate
Pass15,748 26,630 116,483 14,564 14,747 52,692 — 240,864 
Special mention— — — — — 847 — 847 
Total15,748 26,630 116,483 14,564 14,747 53,539 — 241,711 
Construction
Pass4,198 26,050 32,343 17,490 — — — 80,081 
Total4,198 26,050 32,343 17,490 — — — 80,081 
Junior liens
Pass4,101 5,046 5,080 1,210 227 8,466 — 24,130 
Substandard— — — — — 44 — 44 
Total4,101 5,046 5,080 1,210 227 8,510 — 24,174 
Commercial and industrial
Pass5,929 5,966 97 1,520 — — — 13,512 
Substandard— 701 — 15 — — — 716 
Total5,929 6,667 97 1,535 — — — 14,228 
Consumer and other
Pass7,701 — — — — — 30 7,731 
Total7,701 — — — — — 30 7,731 
Total gross loans$52,079 $94,358 $525,515 $288,156 $63,724 $527,121 $30 $1,550,983 
The following table presents the risk category of loans by class of loan and vintage as of December 31, 2023:
Term Loans by Origination Year
20232022202120202019Pre-2019Revolving LoansTotal
(in thousands)
Residential
Pass$13,338 $98,007 $109,193 $14,315 $18,460 $291,069 $— $544,382 
Special mention— — — — — 663 — 663 
Substandard— — — — — 5,884 — 5,884 
Total13,338 98,007 109,193 14,315 18,460 297,616 — 550,929 
Multifamily
Pass17,144 281,906 158,705 35,407 56,739 132,517 — 682,418 
Substandard— — — — — 146 — 146 
Total17,144 281,906 158,705 35,407 56,739 132,663 — 682,564 
Commercial real estate
Pass26,610 118,247 14,785 15,080 5,386 51,493 — 231,601 
Special mention— — — — — 904 — 904 
Total26,610 118,247 14,785 15,080 5,386 52,397 — 232,505 
Construction
Pass22,798 21,067 16,549 — — — — 60,414 
Total22,798 21,067 16,549 — — — — 60,414 
Junior liens
Pass5,359 5,234 1,232 296 1,773 8,560 — 22,454 
Substandard— — — — — 49 — 49 
Total5,359 5,234 1,232 296 1,773 8,609 — 22,503 
Commercial and industrial
Pass7,055 105 4,492 77 — — — 11,729 
Substandard— — 39 — — — — 39 
Total7,055 105 4,531 77 — — — 11,768 
Consumer and other
Pass25 — — — — — 22 47 
Total25 — — — — — 22 47 
Total gross loans$92,329 $524,566 $304,995 $65,175 $82,358 $491,285 $22 $1,560,730 
Past Due and Non-accrual Loans
The following table presents the recorded investment in past due and current loans by loan portfolio class as of September 30, 2024 and December 31, 2023:
30-59
Days
Past Due		60-89
Days
Past Due		90 Days
and Greater
Past Due		Total
Past Due		CurrentTotal
Loans
Receivable
(In thousands)
September 30, 2024
Residential$629 $425 $3,913 $4,967 $511,787 $516,754 
Multifamily— — — — 666,304 666,304 
Commercial real estate— — — — 241,711 241,711 
Construction— — — — 80,081 80,081 
Junior liens— 150 — 150 24,024 24,174 
Commercial and industrial — — 15 15 14,213 14,228 
Consumer and other— — — — 7,731 7,731 
Total$629 $575 $3,928 $5,132 $1,545,851 $1,550,983 
December 31, 2023
Residential$887 $752 $3,926 $5,565 $545,364 $550,929 
Multifamily— — — — 682,564 682,564 
Commercial real estate— — — — 232,505 232,505 
Construction— — — — 60,414 60,414 
Junior liens— — 49 49 22,454 22,503 
Commercial and industrial — — 39 39 11,729 11,768 
Consumer and other— — — — 47 47 
Total$887 $752 $4,014 $5,653 $1,555,077 $1,560,730 
The following tables presents information on non-accrual loans at September 30, 2024 and December 31, 2023:
Non-accrualInterest Income Recognized on Non-accrual Loans
Amortized Cost Basis of Loans > 90 Day Past Due and Still Accruing
Amortized Cost Basis of Non-accrual Loans Without Related Allowance
September 30, 2024(In thousands)
Residential$4,261 $17 $— $4,261 
Multifamily125 7 — 125 
Junior liens44 7 — 44 
Commercial and industrial716 — — 716 
Total$5,146 $31 $— $5,146 
December 31, 2023
Residential$5,884 $— $— $5,884 
Multifamily146 — — 146 
Junior liens49 — — 49 
Commercial and industrial39 — — 39 
Total$6,118 $— $— $6,118 
The Company had no loans held-for-sale at September 30, 2024 and December 31, 2023. Gains and losses on sales of loans are specifically identified and accounted for in accordance with U.S. GAAP.
Modifications made to borrowers experiencing financial difficulty may include principal forgiveness, interest rate reductions, other than insignificant payment delays, terms extensions or a combination thereof intended to minimize economic loss and to avoid foreclosure or repossession of collateral. If the borrower has demonstrated performance under the previous terms and our underwriting process show the borrower has the capacity to continue to perform under the restructured terms, the loan will continue to accrue interest.
There were no modifications to borrowers experiencing financial difficulty in the third quarter of 2024. The following table presents the amortized cost basis at September 30, 2024, of loan modifications to borrowers experiencing financial difficulty during the nine months ended September 30, 2024, disaggregated by type of modification.
Payment DelaysTerm ExtensionsTotal Principal% of Total Class of Loans
(Dollars in thousands)
Commercial and industrial$701 $— $701 4.93 %
Total$701 $— $701 0.05 %
Types of Modifications
Commercial and industrial
Deferral of three payments
The following table presents the amortized cost basis at September 30, 2023, of loan modifications to borrowers experiencing financial difficulty during the three months ended September 30, 2023, disaggregated by type of modification.
Payment DelaysTerm ExtensionsTotal Principal% of Total Class of Loans
(Dollars in thousands)
Residential$1,158 $— $1,158 0.20 %
Total$1,158 $— $1,158 0.07 %
Types of Modifications
ResidentialAmortize past due balances over the remaining life of the loans
The following table presents the amortized cost basis of loans to borrowers experiencing financial difficulty at September 30, 2023 that were modified during the nine months ended September 30, 2023, disaggregated by type of modification.
Payment DelaysTerm ExtensionsTotal Principal% of Total Class of Loans
(Dollars in thousands)
Residential$1,910 $374 $2,284 0.40 %
Total$1,910 $374 $2,284 0.15 %
Types of Modifications
Residential
Term extensions of 3 months
Amortize past due balances over the remaining life of the loans
The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The following table presents the payment status and amortized cost basis at September 30, 2024, of loans that were modified during the twelve-month period ended September 30, 2024.
Current30-59 Days Past Due60-89 Days Past Due90 Days or More Past DueTotal
(In thousands)
Residential$795 $— $— $— $795 
Commercial and industrial701 — — — 701 
Total$1,496 $— $— $— $1,496 
The following table presents the payment status and amortized cost basis at September 30, 2023, of loans that were modified during the nine-month period ended September 30, 2023.
Current30-59 Days Past Due60-89 Days Past Due90 Days or More Past DueTotal
(In thousands)
Residential$2,282 $— $— $— $2,282 
Total$2,282 $— $— $— $2,282 
The Company had $3.9 million and $4.0 million in consumer mortgage loans secured by residential real estate properties for which foreclosure proceedings were in process at September 30, 2024, and December 31, 2023, respectively. At September 30, 2024, the Company had no other real estate owned and reported one property totaling $593 thousand at December 31, 2023.