v3.25.2
Loans and Allowance for Credit Losses
 6 Months Ended
Jun. 30, 2025
Loans and Allowance for Credit Losses [Abstract]  
Loans and Allowance for Credit Losses

Note 4 - Loans and Allowance for Credit Losses

Loans consisted of the following segments as of June 30, 2025 and December 31, 2024:

 

 

 

June 30,

 

 

 

December 31,

 

 

 

2025

 

 

 

2024

 

 

 

(Dollars in thousands)

 

Real Estate Loans:

 

 

 

 

 

 

 

Residential, one- to four-family (1)

$

 

154,938

 

 

$

 

161,331

 

Home Equity

 

 

46,840

 

 

 

 

47,456

 

Commercial (2)

 

 

324,321

 

 

 

 

320,984

 

Total real estate loans

 

 

526,099

 

 

 

 

529,771

 

Other Loans:

 

 

 

 

 

 

 

Commercial

 

 

16,412

 

 

 

 

15,728

 

Consumer

 

 

11,919

 

 

 

 

991

 

Total gross loans

 

 

554,430

 

 

 

 

546,490

 

Net deferred loan costs

 

 

3,123

 

 

 

 

3,263

 

Allowance for credit losses on loans

 

 

(5,164

)

 

 

 

(5,133

)

Loans receivable, net

$

 

552,389

 

 

$

 

544,620

 

 

(1)
Includes one- to four-family construction loans.
(2)
Includes commercial construction loans.

 

Real estate loans of approximately $121.3 million and $39.4 million in unpaid principal balance were pledged as collateral for FHLBNY advances as of June 30, 2025 and December 31, 2024, respectively.

 

Total loans are stated at the principal amounts outstanding, net of unamortized loan fees and costs, with interest income accrued based upon the outstanding principal balance and the terms of the loans. Loan origination fees, net of certain direct origination costs, are deferred and recognized as an adjustment of the related loan yield using the interest method. Loans are reported by the portfolio segments identified above and are analyzed by management on this basis. All loan policies identified below apply to all segments of the loan portfolio.

Accrued interest on loans of $2.6 million and $2.5 million at June 30, 2025 and December 31, 2024, respectively, is included in accrued interest receivable on the consolidated statements of financial condition and is excluded from the estimate of credit losses.

Allowance for Credit Losses for Loans

 

The loan portfolio is segmented into the following loan types by risk level:

 

Real Estate Loans:

One- to Four-Family – are loans secured by first lien collateral on residential real estate primarily held in the Western New York region. These loans can be affected by economic conditions and the value of underlying properties. Western New York’s housing market has consistently demonstrated stability in home prices despite changing economic conditions. Furthermore, the Company has conservative underwriting standards and its residential lending policies and procedures verify that its one- to four-family residential mortgage loans generally conform to secondary market guidelines.
Home Equity - are loans or lines of credit secured by first or second liens on owner-occupied residential real estate primarily held in the Western New York region. These loans can also be affected by economic conditions and the values of underlying properties. Home equity loans may have increased risk of loss if the Company does not hold the first mortgage resulting in the Company being in a secondary position in the event of collateral liquidation. The Company does not originate interest only home equity loans.
Commercial Real Estate – are loans used to finance the purchase of real property, which generally consists of developed real estate that is held as first lien collateral for the loan. These loans are secured by real estate properties that are primarily held in the Western New York region. Commercial real estate lending involves additional risks compared with one- to four-family residential lending, because payments on loans secured by commercial real estate properties are often dependent on the successful operation or management of the properties, and/or the collateral value of the commercial real estate securing the loan, and repayment of such loans may be subject to adverse conditions in the real estate market or economic conditions to a greater extent than one- to four-family residential mortgage loans. Also, commercial real estate loans typically involve relatively large loan balances concentrated with single borrowers or groups of related borrowers.

 

Other Loans:

Commercial – includes business installment loans, lines of credit, and other commercial loans. Most of our commercial loans are for terms generally not in excess of 5 years. Whenever possible, we collateralize these loans with a lien on business assets and equipment and require the personal guarantees from principals of the borrower. Commercial loans generally involve a higher degree of credit risk, as commercial loans can involve relatively large loan balances to a single borrower or groups of related borrowers, with the repayment of such loans typically dependent on the successful operation of the commercial business and the income stream of the borrower. Such risks can be significantly affected by economic conditions. Although commercial loans may be collateralized by equipment or other business assets, the liquidation of collateral in the event of a borrower default may be an insufficient source of repayment because the equipment or other business assets may be obsolete or of limited use, among other things. Accordingly, the repayment of a commercial loan depends primarily on the credit worthiness of the borrowers (and any guarantors), while liquidation of collateral is a secondary and often insufficient source of repayment.
Consumer – consist of loans secured by collateral such as an automobile or a deposit account, unsecured loans, and lines of credit. Consumer loans tend to have a higher credit risk due to the loans being either unsecured or secured by rapidly depreciable assets. Furthermore, consumer loan payments are dependent on the borrower’s continuing
financial stability and therefore are more likely to be adversely affected by job loss, divorce, illness, or personal bankruptcy.

 

Included in the Real Estate Loans for one-to four-family and commercial real estate are loans to finance the construction of either a one- to four-family owner occupied home or commercial real estate. At the end of the construction period, the loan automatically converts to either a one- to four-family residential mortgage or a commercial real estate mortgage, as applicable. Risk of loss on a construction loan depends largely upon the accuracy of the initial estimate of the value of the property at completion compared to the actual cost of construction. The Company limits its risk during construction as disbursements are not made until the required work for each advance has been completed and an updated lien search is performed. The completion of the construction progress is verified by a Company loan officer or inspections performed by an independent appraisal firm or other third party. Construction loans also expose us to the risk of construction delays which may impair the borrower’s ability to repay the loan.

 

The following tables detail the changes in the allowance for credit losses by loan segment as well as the distribution of the allowance for credit losses and gross loans receivable by loan segment and impairment method at or for the three and six months ended June 30, 2025 and 2024.

 

 

 

Real Estate Loans

 

 

Other Loans

 

 

 

 

 

One- to Four-Family(1)

 

 

Home Equity

 

 

Commercial Real Estate (2)

 

 

Commercial

 

 

Consumer

 

 

Total

 

 

 

(Dollars in thousands)

 

June 30, 2025

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Loss on Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – April 1, 2025

 

$

 

714

 

 

$

 

117

 

 

$

 

4,197

 

 

$

 

131

 

 

$

 

11

 

 

$

 

5,170

 

Charge-offs

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(6

)

 

 

 

(6

)

Recoveries

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

(Credit) provision

 

 

 

20

 

 

 

 

(11

)

 

 

 

(30

)

 

 

 

16

 

 

 

 

5

 

 

 

 

—

 

Balance – June 30, 2025

 

$

 

734

 

 

$

 

106

 

 

$

 

4,167

 

 

$

 

147

 

 

$

 

10

 

 

$

 

5,164

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance - January 1, 2025

 

$

 

390

 

 

$

 

137

 

 

$

 

4,171

 

 

$

 

421

 

 

$

 

14

 

 

$

 

5,133

 

Charge-offs

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(13

)

 

 

 

(13

)

Recoveries

 

 

 

4

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

1

 

 

 

 

5

 

Provision (credit)

 

 

 

340

 

 

 

 

(31

)

 

 

 

(4

)

 

 

 

(274

)

 

 

 

8

 

 

 

 

39

 

Balance – June 30, 2025

 

$

 

734

 

 

$

 

106

 

 

$

 

4,167

 

 

$

 

147

 

 

$

 

10

 

 

$

 

5,164

 

Ending balance: individually evaluated

 

$

 

—

 

 

$

 

—

 

 

$

 

—

 

 

$

 

—

 

 

$

 

2

 

 

$

 

2

 

Ending balance: collectively evaluated

 

$

 

734

 

 

$

 

106

 

 

$

 

4,167

 

 

$

 

147

 

 

$

 

8

 

 

$

 

5,162

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Loans Receivable(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

 

154,938

 

 

$

 

46,840

 

 

$

 

324,321

 

 

$

 

16,412

 

 

$

 

11,919

 

 

$

 

554,430

 

Ending balance: individually evaluated

 

$

 

1,531

 

 

$

 

109

 

 

$

 

94

 

 

$

 

—

 

 

$

 

2

 

 

$

 

1,736

 

Ending balance: collectively evaluated

 

$

 

153,407

 

 

$

 

46,731

 

 

$

 

324,227

 

 

$

 

16,412

 

 

$

 

11,917

 

 

$

 

552,694

 

 

(1)
There were no one-to four-family construction loans at June 30, 2025.
(2)
Includes commercial construction loans of $17.0 million.
(3)
Gross Loans Receivable does not include allowance for credit losses of $(5,164) or net deferred loan costs of $3,123.

 

 

 

Real Estate Loans

 

 

Other Loans

 

 

 

 

 

One- to Four-Family(1)

 

 

Home Equity

 

 

Commercial Real Estate (2)

 

 

Commercial

 

 

Consumer

 

 

Total

 

 

 

(Dollars in thousands)

 

June 30, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Loss on Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance- April 1, 2024

 

$

 

504

 

 

$

 

249

 

 

$

 

5,004

 

 

$

 

467

 

 

$

 

13

 

 

$

 

6,237

 

Charge-offs

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(5

)

 

 

 

(5

)

Recoveries

 

 

 

2

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

3

 

 

 

 

5

 

(Credit) provision

 

 

 

(33

)

 

 

 

(33

)

 

 

 

(315

)

 

 

 

56

 

 

 

 

4

 

 

 

 

(321

)

Balance – June 30, 2024

 

$

 

473

 

 

$

 

216

 

 

$

 

4,689

 

 

$

 

523

 

 

$

 

15

 

 

$

 

5,916

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance- January 1, 2024

 

$

 

532

 

 

$

 

213

 

 

$

 

5,231

 

 

$

 

471

 

 

$

 

16

 

 

$

 

6,463

 

Charge-offs

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

(13

)

 

 

 

(13

)

Recoveries

 

 

 

5

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

5

 

 

 

 

10

 

(Credit) provision

 

 

 

(64

)

 

 

 

3

 

 

 

 

(542

)

 

 

 

52

 

 

 

 

7

 

 

 

 

(544

)

Balance – June 30, 2024

 

$

 

473

 

 

$

 

216

 

 

$

 

4,689

 

 

$

 

523

 

 

$

 

15

 

 

$

 

5,916

 

Ending balance: individually
   evaluated

 

$

 

—

 

 

$

 

—

 

 

$

 

—

 

 

$

 

—

 

 

$

 

—

 

 

$

 

—

 

Ending balance: collectively
   evaluated

 

$

 

473

 

 

$

 

216

 

 

$

 

4,689

 

 

$

 

523

 

 

$

 

15

 

 

$

 

5,916

 

Gross Loans Receivable(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending balance

 

$

 

166,075

 

 

$

 

48,612

 

 

$

 

312,396

 

 

$

 

18,578

 

 

$

 

1,047

 

 

$

 

546,708

 

Ending balance: individually
   evaluated

 

$

 

136

 

 

$

 

—

 

 

$

 

1,242

 

 

$

 

—

 

 

$

 

—

 

 

$

 

1,378

 

Ending balance: collectively
   evaluated

 

$

 

165,939

 

 

$

 

48,612

 

 

$

 

311,154

 

 

$

 

18,578

 

 

$

 

1,047

 

 

$

 

545,330

 

 

(1)
There were no one-to four-family construction loans at June 30, 2024.
(2)
Includes commercial construction loans of $14.1 million.
(3)
Gross Loans Receivable does not include allowance for credit losses of $(5,916) or net deferred loan costs of $3,545.

 

The following table summarizes the distribution of the allowance for credit losses and loans receivable by loan segment and impairment method as of December 31, 2024:

 

 

Real Estate Loans

Other Loans

 

 

 

One- to Four-Family(1)

 

 

Home Equity

 

 

Commercial Real Estate (2)

 

 

Commercial

 

 

Consumer

 

 

Total

 

 

(Dollars in thousands)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

December 31, 2024

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Allowance for Credit Losses on Loans

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance – December 31, 2024

 

$

390

 

 

$

137

 

 

$

4,171

 

 

$

421

 

 

$

14

 

 

$

5,133

 

Ending balance: individually
   evaluated

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

 

$

—

 

Ending balance: collectively
   evaluated

 

$

390

 

 

$

137

 

 

$

4,171

 

 

$

421

 

 

$

14

 

 

$

5,133

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross Loans Receivable(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Ending Balance

 

$

161,331

 

 

$

47,456

 

 

$

320,984

 

 

$

15,728

 

 

$

991

 

 

$

546,490

 

Ending balance: individually
   evaluated

 

$

131

 

 

$

—

 

 

$

1,242

 

 

$

—

 

 

$

—

 

 

$

1,373

 

Ending balance: collectively
   evaluated

 

$

161,200

 

 

$

47,456

 

 

$

319,742

 

 

$

15,728

 

 

$

991

 

 

$

545,117

 

 

(1)
There were no one- to four-family construction loans at December 31, 2024.
(2)
Includes commercial construction loans of $18.9 million.
(3)
Gross Loans Receivable does not include allowance for credit losses of $(5,133) or deferred loan costs of $3,263.

Allowance for Credit Losses on Unfunded Loan Commitments

 

The Company’s allowance for credit losses on unfunded loan commitments is recognized as a liability and included within other liabilities on the unaudited consolidated statements of financial condition, with adjustments to the reserve recognized in (credit) provision for credit losses on the unaudited consolidated statements of income. The Company’s activity in the allowance for credit losses on unfunded loan commitments for the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024 was as follows:

 

 

For the six months ended June 30, 2025

 

 

(Dollars in thousands)

 

Balance at December 31, 2024

$

 

314

 

Provision (Credit) for Credit Losses

 

 

9

 

Balance at March 31, 2025

$

 

323

 

Provision (Credit) for Credit Losses

 

 

—

 

Balance at June 30, 2025

$

 

323

 

 

 

 

 

 

For the six months ended June 30, 2024

 

 

(Dollars in thousands)

 

Balance at December 31, 2023

$

 

487

 

Provision (Credit) for Credit Losses

 

 

(129

)

Balance at March 31, 2024

$

 

358

 

Provision (Credit) for Credit Losses

 

 

36

 

Balance at June 30, 2024

$

 

394

 

Non-accrual Loans and Delinquency Status

 

The following table presents the amortized cost basis of loans on non-accrual status and loans on non-accrual status with no allowance for credit losses recorded. The Company did not have any loans past due 90 days or more and still accruing at June 30, 2025 and December 31, 2024.

 

 

Total Non-accrual

 

 

Non-accrual with no Allowance for Credit Losses

 

 

 

June 30,

 

 

 

December 31,

 

 

 

June 30,

 

 

 

December 31,

 

 

 

2025

 

 

 

2024

 

 

 

2025

 

 

 

2024

 

 

(Dollars in thousands)

 

Real Estate Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential, one- to four-family (1)

$

 

1,567

 

 

$

 

1,891

 

 

$

 

1,567

 

 

$

 

1,891

 

Home Equity

 

 

114

 

 

 

 

683

 

 

 

 

114

 

 

 

 

683

 

Commercial Real Estate (2)

 

 

94

 

 

 

 

1,226

 

 

 

 

94

 

 

 

 

1,226

 

Other Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

Consumer

 

 

2

 

 

 

 

4

 

 

 

 

—

 

 

 

 

4

 

Total loans

$

 

1,777

 

 

$

 

3,804

 

 

$

 

1,775

 

 

$

 

3,804

 

 

(1)
Includes one- to four-family construction loans.
(2)
Includes commercial construction loans.

 

There was no interest income recognized on non-accrual loans during the three and six months ended June 30, 2025 and the three and six months ended June 30, 2024. The accrual of interest on loans is discontinued when, in management’s opinion, the borrower may be unable to meet payments as they become due. A loan does not have to be 90 days delinquent in order to be classified as non-accrual. When interest accrual is discontinued, all unpaid accrued interest is reversed. If ultimate collection of principal is in doubt, all cash receipts on non-accrual loans are applied to reduce the principal balance.

 

The following tables provide an analysis of past due loans as of the dates indicated:

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days or More

 

 

Total Past

 

 

 

Current

 

 

Total Gross Loans

 

 

 

Past Due

 

 

Past Due

 

 

Past Due

 

 

Due

 

 

 

Due

 

 

Receivable

 

 

 

(Dollars in thousands)

 

June 30, 2025:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential, one- to four-family(1)

 

$

 

445

 

 

$

 

461

 

 

$

 

364

 

 

$

 

1,270

 

 

$

 

153,668

 

 

$

 

154,938

 

Home equity

 

 

 

118

 

 

 

 

119

 

 

 

 

36

 

 

 

 

273

 

 

 

 

46,567

 

 

 

 

46,840

 

Commercial(2)

 

 

 

—

 

 

 

 

—

 

 

 

 

94

 

 

 

 

94

 

 

 

 

324,227

 

 

 

 

324,321

 

Other Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

16,412

 

 

 

 

16,412

 

Consumer

 

 

 

56

 

 

 

 

—

 

 

 

 

—

 

 

 

 

56

 

 

 

 

11,863

 

 

 

 

11,919

 

Total

 

$

 

619

 

 

$

 

580

 

 

$

 

494

 

 

$

 

1,693

 

 

$

 

552,737

 

 

$

 

554,430

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

30-59 Days

 

 

60-89 Days

 

 

90 Days or More

 

 

Total Past

 

 

 

Current

 

 

Total Gross Loans

 

 

 

Past Due

 

 

Past Due

 

 

Past Due

 

 

Due

 

 

 

Due

 

 

Receivable

 

 

 

(Dollars in thousands)

 

December 31, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential, one- to four-family(1)

 

$

 

1,035

 

 

$

 

454

 

 

$

 

662

 

 

$

 

2,151

 

 

$

 

159,180

 

 

$

 

161,331

 

Home equity

 

 

 

318

 

 

 

 

26

 

 

 

 

596

 

 

 

 

940

 

 

 

 

46,516

 

 

 

 

47,456

 

Commercial(2)

 

 

 

—

 

 

 

 

—

 

 

 

 

1,242

 

 

 

 

1,242

 

 

 

 

319,742

 

 

 

 

320,984

 

Other Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

—

 

 

 

 

15,728

 

 

 

 

15,728

 

Consumer

 

 

 

3

 

 

 

 

2

 

 

 

 

—

 

 

 

 

5

 

 

 

 

986

 

 

 

 

991

 

Total

 

$

 

1,356

 

 

$

 

482

 

 

$

 

2,500

 

 

$

 

4,338

 

 

$

 

542,152

 

 

$

 

546,490

 

 

(1)
Includes one- to four-family construction loans.
(2)
Includes commercial real estate construction loans.

Collateral-Dependent Loans

 

Collateral-dependent loans are loans for which the repayment is expected to be provided substantially through the operation or sale of the collateral and the borrower is experiencing financial difficulty. These loans do not share common risk characteristics and are not included within the collectively evaluated loans for determining the allowance for credit losses. For collateral-dependent loans, the Company has adopted the practical expedient to measure the allowance for credit losses based on the fair value of collateral. The allowance for credit losses is measured on an individual loan basis based on the difference between the fair value of the loan’s collateral, which is adjusted for liquidation costs, and the amortized cost. If

the fair value of the collateral exceeds the amortized cost, no allowance for credit losses is required. Refer to Note 8 - Fair Value of Financial Instruments for additional information.

The following table presents an analysis of the amortized cost of collateral-dependent loans of the Company as of June 30, 2025 and December 31, 2024 by collateral type and loan segment:

 

 

 

Residential

 

 

Business

 

 

 

 

 

Commercial

 

 

 

 

 

Total

 

 

 

Real Estate

 

 

Assets

 

 

Land

 

 

Real Estate

 

 

Other

 

 

Loans

 

June 30, 2025:

(Dollars in thousands)

 

Real Estate Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential, one- to four-family

$

 

1,567

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

1,567

 

Home Equity

 

 

114

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

114

 

Commercial

 

 

—

 

 

 

—

 

 

 

—

 

 

 

94

 

 

 

—

 

 

 

94

 

Consumer

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total

$

 

1,681

 

$

 

—

 

$

 

—

 

$

 

94

 

$

 

—

 

$

 

1,775

 

December 31, 2024:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Real Estate Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Residential, one- to four-family

$

 

143

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

143

 

Commercial

 

 

200

 

 

 

—

 

 

 

1,026

 

 

 

—

 

 

 

—

 

 

 

1,226

 

Total

$

 

343

 

$

 

—

 

$

 

1,026

 

$

 

—

 

$

 

—

 

$

 

1,369

 

 

There was no allowance for credit losses recorded on the above noted collateral-dependent loans as of June 30, 2025 and December 31, 2024.

Credit Quality Indicators

 

The Company’s policies provide for the classification of loans as follows:

•
Pass/Performing;
•
Special Mention – does not currently expose the Company to a sufficient degree of risk but does possess credit deficiencies or potential weaknesses deserving the Company’s close attention;
•
Substandard – has one or more well-defined weaknesses and are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. A substandard asset would be one inadequately protected by the current net worth and paying capacity of the obligor or pledged collateral, if applicable;
•
Doubtful – has all the weaknesses inherent in substandard loans with the additional characteristic that the weaknesses present make collection or liquidation in full on the basis of currently existing facts, conditions and values questionable, and there is a high possibility of loss; and
•
Loss – loan is considered uncollectible and continuance without the establishment of a specific valuation reserve is not warranted.

 

Each commercial loan is individually assigned a loan classification. The Company’s consumer loans, including residential one- to four-family loans and home equity loans, are classified by using the delinquency status as the basis for classifying these loans. Generally, all consumer loans more than 90 days past due are classified and placed into non-accrual status. Such loans that are considered by management to be well-secured and in the process of collection will remain in accrual status.

 

Asset quality indicators for all loans and the Company’s risk rating process are reviewed on a monthly basis. Risk ratings are updated as circumstances that could affect the repayment of individual loans are brought to management’s attention through an established monitoring process. Written action plans are maintained and reviewed on a quarterly basis for all classified commercial loans. In addition to the Company’s internal process, an outsourced independent credit review

function is in place for commercial and certain consumer loans to further assess assigned risk classifications and monitor compliance with internal lending policies and procedures.

 

The following table presents gross loans by credit quality indicator by origination year at June 30, 2025 as well as gross charge-offs by year of origination for the six months ended June 30, 2025:

 

 

 

2025

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

June 30, 2025:

 

(Dollars in thousands)

 

Residential, one-to four-family(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

1,195

 

$

 

5,141

 

$

 

10,917

 

$

 

31,610

 

$

 

25,970

 

$

 

78,228

 

$

 

—

 

$

 

153,061

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

490

 

 

 

152

 

 

 

1,235

 

 

 

—

 

 

 

1,877

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

1,195

 

 

 

5,141

 

$

 

10,917

 

$

 

32,100

 

$

 

26,122

 

$

 

79,463

 

$

 

—

 

$

 

154,938

 

Current period gross charge-offs

$

 

—

 

 

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Equity(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

499

 

$

 

97

 

$

 

2,323

 

$

 

1,979

 

$

 

67

 

$

 

433

 

$

 

41,245

 

 

 

46,643

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

197

 

 

 

197

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

499

 

$

 

97

 

$

 

2,323

 

$

 

1,979

 

$

 

67

 

$

 

433

 

$

 

41,442

 

$

 

46,840

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

14,400

 

$

 

36,150

 

$

 

17,981

 

$

 

83,012

 

$

 

39,380

 

$

 

124,097

 

$

 

2

 

$

 

315,022

 

    Special mention

 

 

—

 

 

 

—

 

 

 

292

 

 

 

—

 

 

 

—

 

 

 

880

 

 

 

—

 

 

 

1,172

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

8,127

 

 

 

—

 

 

 

8,127

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

14,400

 

$

 

36,150

 

$

 

18,273

 

$

 

83,012

 

$

 

39,380

 

$

 

133,104

 

$

 

2

 

$

 

324,321

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

1,902

 

$

 

1,783

 

$

 

833

 

$

 

1,761

 

$

 

321

 

$

 

1,835

 

$

 

4,878

 

$

 

13,313

 

    Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

115

 

 

 

—

 

 

 

—

 

 

 

115

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,028

 

 

 

956

 

 

 

2,984

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

1,902

 

$

 

1,783

 

$

 

833

 

$

 

1,761

 

$

 

436

 

$

 

3,863

 

$

 

5,834

 

$

 

16,412

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

11,183

 

$

 

187

 

$

 

75

 

$

 

88

 

$

 

1

 

$

 

180

 

$

 

203

 

$

 

11,917

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2

 

 

 

2

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

11,183

 

$

 

187

 

$

 

75

 

$

 

88

 

$

 

1

 

$

 

180

 

$

 

205

 

$

 

11,919

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

13

 

$

 

13

 

 

(1)
There were no one- to four-family construction loans at June 30, 2025.
(2)
Home equity loans presented with an origination year represent home equity lines-of-credit which have been converted to term loans.
(3)
Includes commercial construction loans.

 

The following table presents gross loans by credit quality indicator by origination year at December 31, 2024 as well as gross charge-offs by year of origination for the year ended December 31, 2024:

 

 

 

2024

 

 

2023

 

 

2022

 

 

2021

 

 

2020

 

 

Prior

 

 

Revolving Loans

 

 

Total

 

December 31, 2024:

 

(Dollars in thousands)

 

Residential, one-to four-family(1):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

5,554

 

$

 

11,684

 

$

 

33,058

 

$

 

26,594

 

$

 

16,272

 

$

 

66,081

 

$

 

—

 

$

 

159,243

 

    Substandard

 

 

—

 

 

 

—

 

 

 

447

 

 

 

265

 

 

 

—

 

 

 

1,377

 

 

 

—

 

 

 

2,088

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

5,554

 

 

 

11,684

 

$

 

33,504

 

$

 

26,859

 

$

 

16,272

 

$

 

67,458

 

$

 

—

 

$

 

161,331

 

Current period gross charge-offs

$

 

—

 

 

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Home Equity(2):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

102

 

$

 

2,712

 

$

 

2,297

 

$

 

76

 

$

 

34

 

$

 

574

 

$

 

40,899

 

 

 

46,694

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

762

 

 

 

762

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

102

 

$

 

2,712

 

$

 

2,297

 

$

 

76

 

$

 

34

 

$

 

574

 

$

 

41,661

 

$

 

47,456

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Real Estate(3):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

33,959

 

$

 

17,498

 

$

 

84,218

 

$

 

41,871

 

$

 

33,021

 

$

 

97,472

 

$

 

644

 

$

 

308,683

 

    Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

895

 

 

 

1,646

 

 

 

—

 

 

 

2,541

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

1,242

 

 

 

8,517

 

 

 

—

 

 

 

9,759

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

33,959

 

$

 

17,498

 

$

 

84,218

 

$

 

41,871

 

$

 

35,158

 

$

 

107,636

 

$

 

644

 

$

 

320,984

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commercial Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

3,232

 

$

 

981

 

$

 

1,980

 

$

 

483

 

$

 

349

 

$

 

1,745

 

$

 

2,725

 

$

 

11,496

 

    Special mention

 

 

—

 

 

 

—

 

 

 

—

 

 

 

165

 

 

 

—

 

 

 

146

 

 

 

782

 

 

 

1,093

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

2,183

 

 

 

956

 

 

 

3,139

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

3,232

 

$

 

981

 

$

 

1,980

 

$

 

648

 

$

 

349

 

$

 

4,074

 

$

 

4,463

 

$

 

15,728

 

Current period gross charge-offs

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

—

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consumer Loans:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

    Pass

$

 

258

 

$

 

118

 

$

 

138

 

$

 

35

 

$

 

98

 

$

 

115

 

$

 

223

 

$

 

986

 

    Substandard

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

4

 

 

 

4

 

    Doubtful

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

         Total

$

 

258

 

$

 

118

 

$

 

138

 

$

 

35

 

$

 

98

 

$

 

115

 

$

 

228

 

$

 

991

 

Current period gross charge-offs

$

 

5

 

$

 

—

 

$

 

2

 

$

 

—

 

$

 

—

 

$

 

—

 

$

 

34

 

$

 

41

 

 

(1)
There were no one- to four-family construction loans at December 31, 2024.
(2)
Home equity loans presented with an origination year represent home equity lines-of-credit which have been converted to term loans.
(3)
Includes commercial construction loans.

Modifications with Borrowers Experiencing Financial Difficulty:

 

Occasionally, the Company modifies loans to borrowers in financial distress by providing modifications to loans that it would not normally grant. Such modifications could include principal forgiveness, term extension, a significant payment delay, an interest rate reduction or the addition of a co-borrower or guarantor. When principal forgiveness is provided, the amount of the forgiveness is charged-off against the allowance for credit losses.

 

Because the effect of most modifications made to borrowers experiencing financial difficulty is already included in the allowance for credit losses, a change to the allowance for credit losses is generally not recorded upon modification.

 

In some cases, the Company provides multiple types of modifications on one loan. Typically, one type of concession, such as a term extension, is granted initially. If the borrower continues to experience financial difficulty, another modification may be granted, such as principal forgiveness.

 

There were no loans modified to borrowers experiencing financial difficulty during the three and six months ended June 30, 2025 or 2024.

 

 

There were no modified loans that were past due or on non-accrual as of June 30, 2025 or December 31, 2024.

 

There were no loans to borrowers experiencing financial difficulty during the six months ended June 30, 2025 and 2024 that had a payment default and were modified in the twelve months prior.

 

Foreclosed real estate consists of property acquired in settlement of loans which is carried at its fair value less estimated selling costs. Write-downs from amortized cost to fair value less estimated selling costs are recorded at the date of acquisition or repossession and are charged to the allowance for credit losses. There was no foreclosed real estate at June 30, 2025, and December 31, 2024. The recorded investment of consumer mortgage loans secured by residential real estate properties for which formal foreclosure proceedings were in process according to local requirements of the applicable jurisdiction was $292,000 at June 30, 2025 and $927,000 at December 31, 2024.