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Loans Receivable and Allowance for Loan Losses (Tables)

9 Months Ended

Sep. 30, 2022

Loans receivable at September 30, 2022 and December 31, 2021 are summarized as follows:


	September 30,			December 31,
	2022			2021
	(in thousands)
Mortgage loans:
1-4 Family residential
Investor-Owned	$	336,667		$	317,304
Owner-Occupied		112,749			96,947
Multifamily residential		421,917			348,300
Nonresidential properties		282,642			239,691
Construction and land		197,437			134,651
Total mortgage loans		1,351,412			1,136,893
Nonmortgage loans:
Business loans (1)		41,398			150,512
Consumer loans (2)		22,563			34,693
Total non-mortgage loans		63,961			185,205
Total loans, gross		1,415,373			1,322,098
Net deferred loan origination costs		2,288			(668	)
Allowance for loan losses		(25,108	)		(16,352	)
Loans receivable, net	$	1,392,553		$	1,305,078

(1)

As of September 30, 2022 and December 31, 2021, business loans include $24.7 million and $136.8 million, respectively, of SBA Paycheck Protection Program (“PPP”) loans.

(2)

As of September 30, 2022 and December 31, 2021, consumer loans include $21.5 million and $33.9 million, respectively, of microloans originated by Grain through its mobile application that is geared to the underbanked and new generations entering the financial services market and uses non-traditional underwriting methodologies.

Schedule of Credit Risk Ratings by Loan Segment

The following tables present credit risk ratings by loan segment as of September 30, 2022 and December 31, 2021:


	September 30, 2022
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
	(in thousands)
Risk Rating:
Pass	$	434,178	$	419,791	$	281,726	$	182,677	$	41,039	$	22,563	$	1,381,974
Special mention		5,092		1,445		—		—		—		—		6,537
Substandard		10,146		681		916		14,760		359		—		26,862
Total	$	449,416	$	421,917	$	282,642	$	197,437	$	41,398	$	22,563	$	1,415,373


	December 31, 2021
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
	(in thousands)
Risk Rating:
Pass	$	402,276	$	339,047	$	237,371	$	127,084	$	150,512	$	34,693	$	1,290,983
Special mention		1,820		5,328		—		6,650		—		—		13,798
Substandard		10,155		3,925		2,320		917		—		—		17,317
Total	$	414,251	$	348,300	$	239,691	$	134,651	$	150,512	$	34,693	$	1,322,098

Schedule of Aging Analysis of Loans

An aging analysis of loans, as of September 30, 2022 and December 31, 2021, is as follows:


	September 30, 2022
			30-59		60-89		90 Days						90 Days
			Days		Days		or More				Nonaccrual		or More
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
	(in thousands)
Mortgage loans:
1-4 Family residential
Investor-Owned	$	330,481	$	689	$	2,447	$	3,050	$	336,667	$	6,123	$	—
Owner-Occupied		110,844		—		40		1,865		112,749		3,186		—
Multifamily residential		421,735		182		—		—		421,917		—		—
Nonresidential properties		278,371		4,271		—		—		282,642		873		—
Construction and land		186,777		—		3,093		7,567		197,437		10,660		—
Nonmortgage loans:
Business		36,971		1,415		2,653		359		41,398		359		—
Consumer		19,606		1,637		1,320		—		22,563		—		—
Total	$	1,384,785	$	8,194	$	9,553	$	12,841	$	1,415,373	$	21,201	$	—


	December 31, 2021
			30-59		60-89		90 Days						90 Days
			Days		Days		or More				Nonaccrual		or More
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
	(in thousands)
Mortgage loans:
1-4 Family residential
Investor-Owned	$	312,918	$	321	$	2,969	$	1,096	$	317,304	$	3,583	$	—
Owner-Occupied		91,568		2,961		471		1,947		96,947		3,480		—
Multifamily residential		346,409		1,704		187		—		348,300		1,200		—
Nonresidential properties		237,589		934		1,168		—		239,691		2,262		—
Construction and land		134,651		—		—		—		134,651		917		—
Nonmortgage loans:
Business		145,919		4,036		544		13		150,512		—		—
Consumer		30,359		2,570		1,759		5		34,693		—		—
Total	$	1,299,413	$	12,526	$	7,098	$	3,061	$	1,322,098	$	11,442	$	—

Schedule of Composition of Allowance for Loan Losses and Related Recorded Investment

The following schedules detail the composition of the allowance for loan losses and the related recorded investment in loans as of and for the three and nine months ended September 30, 2022 and 2021, and as of and for the year ended December 31, 2021:


	For the Three Months Ended September 30, 2022
	Mortgage Loans											Nonmortgage Loans						Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied		Multifamily		Nonresidential			Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	3,607	$	1,233	$	6,374	$	2,493		$	2,262	$	103		$	1,463		$	17,535
Provision charged to expense		114		159		374		(32	)		564		61			8,090			9,330
Losses charged-off		—		—		—		—			—		—			(1,799	)		(1,799	)
Recoveries		—		39		—		—			—		1			2			42
Balance, end of period	$	3,721	$	1,431	$	6,748	$	2,461		$	2,826	$	165		$	7,756		$	25,108

	For the Nine Months Ended September 30, 2022
	Mortgage Loans											Nonmortgage Loans						Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied		Multifamily		Nonresidential			Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	3,540	$	1,178	$	5,684	$	2,165		$	2,024	$	306		$	1,455		$	16,352
Provision charged to expense		25		214		1,064		296			802		(235	)		9,239			11,405
Losses charged-off		—		—		—		—			—		—			(3,000	)		(3,000	)
Recoveries		156		39		—		—			—		94			62			351
Balance, end of period	$	3,721	$	1,431	$	6,748	$	2,461		$	2,826	$	165		$	7,756		$	25,108
Ending balance: individually evaluated for impairment	$	69	$	99	$	—	$	37		$	—	$	—		$	—		$	205
Ending balance: collectively evaluated for impairment		3,652		1,332		6,748		2,424			2,826		165			7,756			24,903
Total	$	3,721	$	1,431	$	6,748	$	2,461		$	2,826	$	165		$	7,756		$	25,108
Loans:
Ending balance: individually evaluated for impairment	$	8,352	$	4,440	$	—	$	1,587		$	10,660	$	359		$	—		$	25,398
Ending balance: collectively evaluated for impairment		328,315		108,309		421,917		281,055			186,777		41,039			22,563			1,389,975
Total	$	336,667	$	112,749	$	421,917	$	282,642		$	197,437	$	41,398		$	22,563		$	1,415,373


	For the Three Months Ended September 30, 2021
	Mortgage Loans														Nonmortgage Loans						Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily			Nonresidential			Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	3,835		$	1,209		$	5,393		$	2,099		$	1,956	$	347		$	1,036		$	15,875
Provision charged to expense		(66	)		5			(112	)		(29	)		104		(74	)		744			572
Losses charged-off		—			—			—			—			—		—			(510	)		(510	)
Recoveries		—			—			—			—			—		2			69			71
Balance, end of period	$	3,769		$	1,214		$	5,281		$	2,070		$	2,060	$	275		$	1,339		$	16,008

	For the Nine Months Ended September 30, 2021
	Mortgage Loans														Nonmortgage Loans						Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily			Nonresidential			Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of period	$	3,850		$	1,260		$	5,214		$	2,194		$	1,820	$	254		$	278		$	14,870
Provision charged to expense		(81	)		(46	)		67			(124	)		240		14			1,774			1,844
Losses charged-off		—			—			—			—			—		—			(782	)		(782	)
Recoveries		—			—			—			—			—		7			69			76
Balance, end of period	$	3,769		$	1,214		$	5,281		$	2,070		$	2,060	$	275		$	1,339		$	16,008
Ending balance: individually evaluated for impairment	$	98		$	116		$	—		$	39		$	—	$	—		$	—		$	253
Ending balance: collectively evaluated for impairment		3,671			1,098			5,281			2,031			2,060		275			1,339			15,755
Total	$	3,769		$	1,214		$	5,281		$	2,070		$	2,060	$	275		$	1,339		$	16,008
Loans:
Ending balance: individually evaluated for impairment	$	5,028		$	5,687		$	2,577		$	2,228		$	922	$	—		$	—		$	16,442
Ending balance: collectively evaluated for impairment		314,318			91,806			314,998			208,847			132,208		207,859			36,095			1,306,131
Total	$	319,346		$	97,493		$	317,575		$	211,075		$	133,130	$	207,859		$	36,095		$	1,322,573


	For the Year Ended December 31, 2021
	Mortgage Loans														Nonmortgage Loans						Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily			Nonresidential			Construction and Land		Business			Consumer			For the Period
	(in thousands)
Allowance for loan losses:
Balance, beginning of year	$	3,850		$	1,260		$	5,214		$	2,194		$	1,820	$	254		$	278		$	14,870
Provision charged to expense		(318	)		(127	)		508			(29	)		204		(32	)		2,511			2,717
Losses charged-off		—			—			(38	)		—			—		—			(1,342	)		(1,380	)
Recoveries		8			45			—			—			—		84			8			145
Balance, end of year	$	3,540		$	1,178		$	5,684		$	2,165		$	2,024	$	306		$	1,455		$	16,352
Ending balance: individually evaluated for impairment	$	91		$	114		$	—		$	38		$	—	$	—		$	—		$	243
Ending balance: collectively evaluated for impairment		3,449			1,064			5,684			2,127			2,024		306			1,455			16,109
Total	$	3,540		$	1,178		$	5,684		$	2,165		$	2,024	$	306		$	1,455		$	16,352
Loans:
Ending balance: individually evaluated for impairment	$	6,672		$	5,854		$	1,200		$	2,995		$	917	$	13		$	—		$	17,651
Ending balance: collectively evaluated for impairment		310,632			91,093			347,100			236,696			133,734		150,499			34,693			1,304,447
Total	$	317,304		$	96,947		$	348,300		$	239,691		$	134,651	$	150,512		$	34,693		$	1,322,098

Schedule of Information Relates to Impaired Loans

The following information relates to impaired loans as of and for the nine months ended September 30, 2022 and 2021 and as of and for the year ended December 31, 2021:


	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
As of and For the Nine Months Ended September 30, 2022	Balance		Allowance		Allowance		Investment		Allowance		Investment		on a Cash Basis
	(in thousands)
Mortgage loans:
1-4 Family residential	$	13,100	$	11,015	$	1,777	$	12,792	$	168	$	11,440	$	164
Multifamily residential		—		—		—		—		—		789		—
Nonresidential properties		1,630		1,239		348		1,587		37		2,268		38
Construction and land		10,660		10,660		—		10,660		—		5,147		16
Nonmortgage loans:
Business		359		359		—		359		—		93		—
Consumer		—				—		—		—		24		—
Total	$	25,749	$	23,273	$	2,125	$	25,398	$	205	$	19,761	$	218

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
As of and For the Nine Months Ended September 30, 2021	Balance		Allowance		Allowance		Investment		Allowance		Investment		on a Cash Basis
	(in thousands)
Mortgage loans:
1-4 Family residential	$	11,107	$	8,701	$	2,014	$	10,715	$	214	$	12,166	$	189
Multifamily residential		2,555		2,577		—		2,577		—		939		—
Nonresidential properties		2,716		1,866		362		2,228		39		4,404		38
Construction and land		922		922		—		922		—		154		—
Nonmortgage loans:
Business		—		—		—		—		—		—		—
Consumer		—		—		—		—		—		24		—
Total	$	17,300	$	14,066	$	2,376	$	16,442	$	253	$	17,687	$	227


	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
As of and for the Year Ended December 31, 2021	Balance		Allowance		Allowance		Investment		Allowance		Investment		on a Cash Basis
	(in thousands)
Mortgage loans:
1-4 Family residential	$	13,333	$	10,535	$	1,991	$	12,526	$	205	$	12,145	$	189
Multifamily residential		1,200		1,200		—		1,200		—		1,139		63
Nonresidential properties		3,494		2,637		358		2,995		38		3,941		38
Construction and land		917		917		—		917		—		307		17
Nonmortgage loans:
Business		13		13		—		13		—		13		—
Consumer		—		—		—		—		—		24		—
Total	$	18,957	$	15,302	$	2,349	$	17,651	$	243	$	17,569	$	307

Schedule of Total Exposure


Grain Technologies, Inc. ("Grain") Total Exposure as of September 30, 2022
(in thousands)
Receivable from Grain
Microloans originated - put back to Grain (inception-to-September 30, 2022)	$	25,467
Write-downs (year to date as of September 30, 2022)		(17,455	)
Cash receipts from Grain (inception-to-September 30, 2022)		(6,186	)
Grant/reserve (inception-to-December 31, 2021)		(1,826	)
Net receivable as of September 30, 2022	$	—
Microloan receivables
Grain originated loans receivable as of September 30, 2022	$	21,507
Allowance for loan losses as of September 30, 2022 *		(8,213	)
Microloans, net of allowance for loan losses as of September 30, 2022	$	13,294
Investments
Investment in Grain as of June 30, 2022	$	1,000
Investment in Grain write-off in Q3 2022		(1,000	)
Investment in Grain as of September 30, 2022	$	—
Total exposure to Grain as of September 30, 2022	$	13,294

*Includes $460,000 for allowance for unused commitments on the $15.3 million of unused commitments available to Grain borrowers reported in other liabilities in the accompanying Consolidated Statements of Financial Conditions