| Loans |
NOTE 3 — Loans The composition of loans by class is summarized as follows: | | | | | | | | | June 30, | | December 31, | | | 2026 | | 2025 | | | | (In thousands) | Real estate: | | | | | | | Multifamily | | $ | 395,886 | | $ | 372,800 | Commercial real estate | | | 133,096 | | | 107,293 | 1 – 4 family | | | 8,959 | | | 9,835 | Total real estate | | | 537,941 | | | 489,928 | Commercial | | | 1,337,108 | | | 1,245,555 | Consumer | | | 26,756 | | | 22,762 | Total loans held for investment | | | 1,901,805 | | | 1,758,245 | Deferred fees and unearned premiums, net | | | 466 | | | 182 | Allowance for credit losses | | | (24,724) | | | (24,022) | Loans held for investment, net | | $ | 1,877,547 | | $ | 1,734,405 |
Commercial loans include commercial Litigation-Related loans of $1.3 billion and other commercial loans of $42.2 million at June 30, 2026. Commercial loans include commercial Litigation-Related loans of $1.2 billion and other commercial loans of $67.2 million at December 31, 2025. The following tables present the activity in the allowance for credit losses by class for the three months ending June 30, 2026 and June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | Commercial | | | | | | | | | | | Multifamily | | Real Estate | | 1‑4 Family | | Commercial | | Consumer | | Total | | | | (In thousands) | June 30, 2026 | | | | | | | | | | | | | | | | | | | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 4,520 | | $ | 836 | | $ | 30 | | $ | 16,990 | | $ | 1,164 | | $ | 23,540 | Provision (credit) for credit losses | | | 1,663 | | | 161 | | | (1) | | | 848 | | | 229 | | | 2,900 | Recoveries | | | — | | | — | | | — | | | — | | | 1 | | | 1 | Loans charged-off | | | (1,572) | | | — | | | — | | | — | | | (145) | | | (1,717) | Total ending allowance balance | | $ | 4,611 | | $ | 997 | | $ | 29 | | $ | 17,838 | | $ | 1,249 | | $ | 24,724 | | | | | | | | | | | | | | | | | | | | June 30, 2025 | | | | | | | | | | | | | | | | | | | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 4,207 | | $ | 663 | | $ | 45 | | $ | 13,828 | | $ | 718 | | $ | 19,461 | Provision (credit) for credit losses | | | 1,114 | | | 18 | | | (8) | | | 2,332 | | | 69 | | | 3,525 | Recoveries | | | — | | | — | | | — | | | — | | | 6 | | | 6 | Loans charged-off | | | (308) | | | — | | | — | | | (3,250) | | | (27) | | | (3,585) | Total ending allowance balance | | $ | 5,013 | | $ | 681 | | $ | 37 | | $ | 12,910 | | $ | 766 | | $ | 19,407 |
The following tables present the activity in the allowance for credit losses by class for the six months ending June 30, 2026 and June 30, 2025: | | | | | | | | | | | | | | | | | | | | | | | Commercial | | | | | | | | | | | Multifamily | | Real Estate | | 1‑4 Family | | Commercial | | Consumer | | Total | | | | (In thousands) | June 30, 2026 | | | | | | | | | | | | | | | | | | | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 6,026 | | $ | 795 | | $ | 35 | | $ | 16,285 | | $ | 881 | | $ | 24,022 | Provision (credit) for credit losses | | | 3,333 | | | 202 | | | (6) | | | 1,553 | | | 518 | | | 5,600 | Recoveries | | | — | | | — | | | — | | | — | | | 2 | | | 2 | Loans charged-off | | | (4,748) | | | — | | | — | | | — | | | (152) | | | (4,900) | Total ending allowance balance | | $ | 4,611 | | $ | 997 | | $ | 29 | | $ | 17,838 | | $ | 1,249 | | $ | 24,724 | | | | | | | | | | | | | | | | | | | | June 30, 2025 | | | | | | | | | | | | | | | | | | | Allowance for credit losses: | | | | | | | | | | | | | | | | | | | Beginning balance | | $ | 5,116 | | $ | 691 | | $ | 52 | | $ | 14,283 | | $ | 837 | | $ | 20,979 | Provision (credit) for credit losses | | | 3,145 | | | (10) | | | 64 | | | 1,877 | | | (51) | | | 5,025 | Recoveries | | | — | | | — | | | — | | | — | | | 25 | | | 25 | Loans charged-off | | | (3,248) | | | — | | | (79) | | | (3,250) | | | (45) | | | (6,622) | Total ending allowance balance | | $ | 5,013 | | $ | 681 | | $ | 37 | | $ | 12,910 | | $ | 766 | | $ | 19,407 |
As of June 30, 2026, there was one collateral dependent multifamily loan secured by real estate totaling $4.4 million and one collateral dependent commercial loan secured by business assets totaling $736 thousand, with no associated specific reserve on the Consolidated Statements of Financial Condition. As of December 31, 2025, there was one collateral dependent multifamily loan secured by real estate totaling $7.8 million and one collateral dependent commercial loan secured by business assets totaling $736 thousand, with no associated specific reserve for either loan on the Consolidated Statements of Financial Condition. The following tables present the aging of the past due loans measured at amortized cost, excluding deferred fees and unearned premiums, net, due to immateriality, by class of loans as of June 30, 2026 and December 31, 2025: | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Past | | | | | | | | | 30-59 | | 60-89 | | 90 Days | | | | | Due & | | | | | | | | | Days | | Days | | or More | | Nonaccrual | | Nonaccrual | | Loans Not | | | | | | Past Due | | Past Due | | Past Due | | Loans | | Loans | | Past Due | | Total | | | | (In thousands) | June 30, 2026 | | | | | | | | | | | | | | | | | | | | | | Multifamily | | $ | — | | $ | — | | $ | — | | $ | 4,400 | | $ | 4,400 | | $ | 391,486 | | $ | 395,886 | Commercial real estate | | | — | | | — | | | — | | | — | | | — | | | 133,096 | | | 133,096 | 1 – 4 family | | | — | | | — | | | — | | | — | | | — | | | 8,959 | | | 8,959 | Commercial | | | — | | | — | | | — | | | 736 | | | 736 | | | 1,336,372 | | | 1,337,108 | Consumer | | | 4 | | | 9 | | | 5 | | | — | | | 18 | | | 26,738 | | | 26,756 | Total | | $ | 4 | | $ | 9 | | $ | 5 | | $ | 5,136 | | $ | 5,154 | | $ | 1,896,651 | | $ | 1,901,805 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total Past | | | | | | | | | 30-59 | | 60-89 | | 90 Days | | | | | Due & | | | | | | | | | Days | | Days | | or More | | Nonaccrual | | Nonaccrual | | Loans Not | | | | | | Past Due | | Past Due | | Past Due | | Loans | | Loans | | Past Due | | Total | | | | (In thousands) | December 31, 2025 | | | | | | | | | | | | | | | | | | | | | | Multifamily | | $ | — | | $ | — | | $ | — | | $ | 7,836 | | $ | 7,836 | | $ | 364,964 | | $ | 372,800 | Commercial real estate | | | — | | | — | | | — | | | — | | | — | | | 107,293 | | | 107,293 | 1 – 4 family | | | — | | | — | | | — | | | — | | | — | | | 9,835 | | | 9,835 | Commercial | | | — | | | — | | | — | | | 736 | | | 736 | | | 1,244,819 | | | 1,245,555 | Consumer | | | 12 | | | — | | | 7 | | | — | | | 19 | | | 22,743 | | | 22,762 | Total | | $ | 12 | | $ | — | | $ | 7 | | $ | 8,572 | | $ | 8,591 | | $ | 1,749,654 | | $ | 1,758,245 |
Credit Quality Indicators The Company categorizes loans into risk categories based on 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. 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 uses the following definitions for risk ratings: 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 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 that are analyzed individually as part of the above described process are considered to be pass rated loans. The following is a summary of the credit risk profile of loans, measured at amortized cost, by internally assigned grade as of the periods indicated, the years represent the year of originations for non-revolving loans: | | | | | | | | | | | | | | | | | | | | | | | | | | | | June 30, 2026 | | 2026 | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 and Prior | | Revolving | | Revolving-Term | | Total | | | (In thousands) | Multifamily: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | $ | 41,648 | | $ | 45,112 | | $ | 26,266 | | $ | 104,111 | | $ | 25,338 | | $ | 149,186 | | $ | — | | $ | — | | $ | 391,661 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | 4,400 | | | — | | | — | | | 4,400 | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 41,648 | | | 45,112 | | | 26,266 | | | 104,111 | | | 25,338 | | | 153,586 | | | — | | | — | | | 396,061 | Current period gross charge-offs | | — | | | 3,176 | | | — | | | — | | | — | | | 1,572 | | | — | | | — | | | 4,748 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 27,401 | | | 25,428 | | | 1,786 | | | 2,739 | | | 56,004 | | | 19,703 | | | — | | | — | | | 133,061 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 27,401 | | | 25,428 | | | 1,786 | | | 2,739 | | | 56,004 | | | 19,703 | | | — | | | — | | | 133,061 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1-4 family: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | — | | | — | | | — | | | — | | | 1,762 | | | 7,200 | | | — | | | — | | | 8,962 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | — | | | — | | | — | | | — | | | 1,762 | | | 7,200 | | | — | | | — | | | 8,962 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 19,007 | | | 97,741 | | | 40,993 | | | 18,034 | | | 1,586 | | | 836 | | | 1,145,189 | | | 13,305 | | | 1,336,691 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | 736 | | | — | | | 736 | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 19,007 | | | 97,741 | | | 40,993 | | | 18,034 | | | 1,586 | | | 836 | | | 1,145,925 | | | 13,305 | | | 1,337,427 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 861 | | | 1,232 | | | 673 | | | 1,937 | | | 588 | | | 920 | | | 15,530 | | | 5,019 | | | 26,760 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 861 | | | 1,232 | | | 673 | | | 1,937 | | | 588 | | | 920 | | | 15,530 | | | 5,019 | | | 26,760 | Current period gross charge-offs | | — | | | — | | | 4 | | | 113 | | | 35 | | | — | | | — | | | — | | | 152 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 88,917 | | | 169,513 | | | 69,718 | | | 126,821 | | | 85,278 | | | 177,845 | | | 1,160,719 | | | 18,324 | | | 1,897,135 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | 4,400 | | | 736 | | | — | | | 5,136 | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total loans | $ | 88,917 | | $ | 169,513 | | $ | 69,718 | | $ | 126,821 | | $ | 85,278 | | $ | 182,245 | | $ | 1,161,455 | | $ | 18,324 | | $ | 1,902,271 | Total current period gross charge-offs | $ | — | | $ | 3,176 | | $ | 4 | | $ | 113 | | $ | 35 | | $ | 1,572 | | $ | — | | $ | — | | $ | 4,900 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | December 31, 2025 | | 2025 | | 2024 | | 2023 | | 2022 | | 2021 | | 2020 and Prior | | Revolving | | Revolving-Term | | Total | | | (In thousands) | Multifamily: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | $ | 45,320 | | $ | 26,402 | | $ | 104,575 | | $ | 26,107 | | $ | 98,922 | | $ | 57,783 | | $ | — | | $ | — | | $ | 359,109 | Special Mention | | — | | | — | | | — | | | — | | | 6,019 | | | — | | | — | | | — | | | 6,019 | Substandard | | 7,836 | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | 7,836 | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 53,156 | | | 26,402 | | | 104,575 | | | 26,107 | | | 104,941 | | | 57,783 | | | — | | | — | | | 372,964 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | 3,275 | | | — | | | — | | | 3,275 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial real estate: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 25,648 | | | 1,803 | | | 2,785 | | | 56,556 | | | 6,823 | | | 13,658 | | | — | | | — | | | 107,273 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 25,648 | | | 1,803 | | | 2,785 | | | 56,556 | | | 6,823 | | | 13,658 | | | — | | | — | | | 107,273 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | | | | | | | | | | | | | | | | | | | | | | | | | | 1-4 family: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | — | | | — | | | — | | | 1,783 | | | — | | | 8,058 | | | — | | | — | | | 9,841 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | — | | | — | | | — | | | 1,783 | | | — | | | 8,058 | | | — | | | — | | | 9,841 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | 79 | | | — | | | — | | | 79 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Commercial: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 115,547 | | | 40,222 | | | 25,418 | | | 6,247 | | | 1,154 | | | 271 | | | 1,046,671 | | | 3,036 | | | 1,238,566 | Special Mention | | — | | | — | | | — | | | 1,290 | | | — | | | — | | | 4,989 | | | — | | | 6,279 | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | 736 | | | — | | | 736 | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 115,547 | | | 40,222 | | | 25,418 | | | 7,537 | | | 1,154 | | | 271 | | | 1,052,396 | | | 3,036 | | | 1,245,581 | Current period gross charge-offs | | — | | | — | | | — | | | — | | | — | | | — | | | 3,250(1) | | | — | | | 3,250(1) | | | | | | | | | | | | | | | | | | | | | | | | | | | | Consumer: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 2,128 | | | 794 | | | 2,460 | | | 851 | | | — | | | 974 | | | 13,354 | | | 2,207 | | | 22,768 | Special Mention | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Substandard | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total | | 2,128 | | | 794 | | | 2,460 | | | 851 | | | — | | | 974 | | | 13,354 | | | 2,207 | | | 22,768 | Current period gross charge-offs | | — | | | — | | | — | | | 57 | | | — | | | — | | | — | | | — | | | 57 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Total: | | | | | | | | | | | | | | | | | | | | | | | | | | | Pass | | 188,643 | | | 69,221 | | | 135,238 | | | 91,544 | | | 106,899 | | | 80,744 | | | 1,060,025 | | | 5,243 | | | 1,737,557 | Special Mention | | — | | | — | | | — | | | 1,290 | | | 6,019 | | | — | | | 4,989 | | | — | | | 12,298 | Substandard | | 7,836 | | | — | | | — | | | — | | | — | | | — | | | 736 | | | — | | | 8,572 | Doubtful | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | Total loans | $ | 196,479 | | $ | 69,221 | | $ | 135,238 | | $ | 92,834 | | $ | 112,918 | | $ | 80,744 | | $ | 1,065,750 | | $ | 5,243 | | $ | 1,758,427 | Total current period gross charge-offs | $ | — | | $ | — | | $ | — | | $ | 57 | | $ | — | | $ | 3,354 | | $ | 3,250(1) | | $ | — | | $ | 6,661 |
| (1) | Represents a commercial loan to a small business merchant. |
The Company considers the performance of the loan portfolio and its impact on the allowance for credit losses. For smaller dollar commercial and consumer loan classes, the Company evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. Loan Modifications to Borrowers Experiencing Financial Difficulty During the three and six months ended June 30, 2026 the Company did not modify the terms of any loans or commitments to lend to borrowers experiencing financial difficulty in the form of an interest rate reduction, term extension, principal forgiveness, or other-than-insignificant payment delay. During the three and six months ended June 30, 2025 the Company modified the terms of one $10.9 million multifamily loan which was restructured into two notes for $8.0 million and $2.9 million, respectively, with an extension resulting in an 18 month remaining term where the $2.9 million note was charged off and the $8.0 million note was at market terms. The Company closely monitors the performance of modified loans to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. The Company modified one multifamily loan in the second quarter of 2025 for a borrower experiencing financial difficulty. During the six months ended June 30, 2026, the Company foreclosed on the property securing this nonaccrual multifamily loan (totaling $7.8 million), and was accounted for as a new loan, recorded it as other real estate owned (“OREO”), recorded a charge-off totaling $3.2 million (consisting of principal and certain costs to perfect its lien), and sold the OREO to an unrelated third party. Pledged Loans At June 30, 2026, loans totaling $346.2 million were pledged to the FHLB for borrowing capacity totaling $249.5 million. At December 31, 2025, loans totaling $319.4 million were pledged to the FHLB for borrowing capacity totaling $219.8 million.
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