Loans Receivable | . LOANS RECEIVABLE The following table sets forth the composition of the Company’s loan portfolio at September 30, 2021 and June 30, 2021: September 30, June 30, 2021 2021 (In Thousands) Commercial loans: Multi-family mortgage $ 1,978,681 $ 2,039,260 Nonresidential mortgage 1,023,391 1,079,444 Commercial business 169,392 168,951 Construction 112,226 93,804 Total commercial loans 3,283,690 3,381,459 One- to four-family residential mortgage 1,483,106 1,447,721 Consumer loans: Home equity loans 44,912 47,871 Other consumer 3,020 3,259 Total consumer loans 47,932 51,130 Total loans 4,814,728 4,880,310 Unaccreted yield adjustments ( 25,389 ) ( 28,916 ) Total loans receivable, net of yield adjustments $ 4,789,339 $ 4,851,394 Past Due Loans Past due status is based on the contractual payment terms of the loans. The following tables present the payment status of past due loans as of September 30, 2021 and June 30, 2021, by loan segment: September 30, 2021 Multi- Non- Commercial Construction Residential Home Other Total (In Thousands) Current $ 1,960,662 $ 990,979 $ 169,152 $ 111,165 $ 1,475,160 $ 44,770 $ 3,019 $ 4,754,907 Past due: 30-59 days - - - 1,061 2,198 72 - 3,331 60-89 days - 245 4 - 1,253 - 1 1,503 90 days and over 18,019 32,167 236 - 4,495 70 - 54,987 Total past due 18,019 32,412 240 1,061 7,946 142 1 59,821 Total loans $ 1,978,681 $ 1,023,391 $ 169,392 $ 112,226 $ 1,483,106 $ 44,912 $ 3,020 $ 4,814,728 June 30, 2021 Multi- Non- Commercial Construction Residential Home Other Total (In Thousands) Current $ 2,023,166 $ 1,046,553 $ 168,550 $ 93,804 $ 1,439,501 $ 47,828 $ 3,258 $ 4,822,660 Past due: 30-59 days - - - - 382 6 1 389 60-89 days - - - - 2,734 5 - 2,739 90 days and over 16,094 32,891 401 - 5,104 32 - 54,522 Total past due 16,094 32,891 401 - 8,220 43 1 57,650 Total loans $ 2,039,260 $ 1,079,444 $ 168,951 $ 93,804 $ 1,447,721 $ 47,871 $ 3,259 $ 4,880,310 Nonperforming Loans Loans are generally placed on nonaccrual status when contractual payments become 90 or more days past due or when the Company does not expect to receive all principal and interest payments (“P&I”) owed substantially in accordance with the terms of the loan agreement, regardless of past due status. Loans that become 90 days past due, but are well secured and in the process of collection, may remain on accrual status. Nonaccrual loans are generally returned to accrual status when all payments due are brought current and we expect to receive all remaining P&I payments owed substantially in accordance with the terms of the loan agreement. Payments received in cash on nonaccrual loans, including both the principal and interest portions of those payments, are generally applied to reduce the carrying value of the loan. The Company did not recognize interest income on non-accrual loans during the three months ended September 30, 2021 and 2020. The following tables present information relating to the Company’s nonperforming loans as of September 30, 2021 and June 30, 2021: September 30, 2021 Multi- Non- Commercial Construction Residential Home Other Total (In Thousands) Performing $ 1,957,735 $ 987,641 $ 168,718 $ 110,140 $ 1,471,322 $ 43,207 $ 3,020 $ 4,741,783 Nonperforming: 90 days and over past due accruing - - - - - - - - Nonaccrual loans with allowance for credit losses 5,359 11,141 4 - 5,337 335 - 22,176 Nonaccrual loans with no allowance for credit losses 15,587 24,609 670 2,086 6,447 1,370 - 50,769 Total nonperforming 20,946 35,750 674 2,086 11,784 1,705 - 72,945 Total loans $ 1,978,681 $ 1,023,391 $ 169,392 $ 112,226 $ 1,483,106 $ 44,912 $ 3,020 $ 4,814,728 June 30, 2021 Multi- Non- Commercial Construction Residential Home Other Total (In Thousands) Performing $ 2,020,734 $ 1,042,257 $ 168,039 $ 91,576 $ 1,428,551 $ 46,127 $ 3,259 $ 4,800,543 Nonperforming: 90 days and over past due accruing - - - - - - - - Nonaccrual loans with allowance for credit losses 8,300 12,612 236 - 7,422 452 - 29,022 Nonaccrual loans with no allowance for credit losses 10,226 24,575 676 2,228 11,748 1,292 - 50,745 Total nonperforming 18,526 37,187 912 2,228 19,170 1,744 - 79,767 Total loans $ 2,039,260 $ 1,079,444 $ 168,951 $ 93,804 $ 1,447,721 $ 47,871 $ 3,259 $ 4,880,310 Troubled Debt Restructurings (“TDRs”) TDRs are loans where the Company has modified the contractual terms of the loan as a result of the financial condition of the borrower. Subsequent to their modification, TDRs are placed on non-accrual until such time as satisfactory payment performance has been demonstrated, at which time the loan may be returned to accrual status. On a case-by-case basis, the Company may agree to modify the contractual terms of a loan to assist a borrower who may be experiencing financial difficulty, as well as to preserve the Company’s position in the loan. If the borrower is experiencing financial difficulties and a concession has been made at the time of such modification, the loan is classified as a TDR. The Company had TDRs totaling $ 20.1 million and $ 17.8 million as of September 30, 2021 and June 30, 2021 , respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $ 725,000 and $ 256,000 as of September 30, 2021 and June 30, 2021, respectively. As of September 30, 2021, there were no significant commitments to lend additional funds to borrowers whose loans had been restructured in a TDR. The following tables present total TDR loans at September 30, 2021 and June 30, 2021: September 30, 2021 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage loans - $ - 2 $ 5,718 2 $ 5,718 Nonresidential mortgage 3 253 4 2,069 7 2,322 Commercial business 4 3,786 4 612 8 4,398 Construction - - 1 2,086 1 2,086 Total commercial loans 7 4,039 11 10,485 18 14,524 One- to four-family residential 30 4,362 7 1,007 37 5,369 Consumer loans: Home equity loans 4 146 1 34 5 180 Total 41 $ 8,547 19 $ 11,526 60 $ 20,073 June 30, 2021 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage loans - $ - 1 $ 2,896 1 $ 2,896 Nonresidential mortgage 1 105 6 2,275 7 2,380 Commercial business 3 3,755 6 693 9 4,448 - - 1 2,228 1 2,228 Total commercial loans 4 3,860 14 8,092 18 11,952 One- to four-family residential 18 2,216 20 3,405 38 5,621 Consumer loans: Home equity loans 4 159 3 68 7 227 Total 26 $ 6,235 37 $ 11,565 63 $ 17,800 The following tables present information regarding troubled debt restructurings that occurred during the three months ended September 30, 2021 and 2020: Three Months Ended September 30, 2021 # of Loans Pre-modification Post-modification (Dollars In Thousands) Multi-family mortgage loans 1 $ 2,987 $ 2,972 Total 1 2,987 2,972 Three Months Ended September 30, 2020 # of Loans Pre-modification Post-modification (Dollars In Thousands) One- to four-family residential 1 309 308 Total 1 $ 309 $ 308 During the three months ended September 30, 2021 and 2020 , there were no charge-offs related to TDRs. During quarter ended September 30, 2021 and 2020 , there were no troubled debt restructuring defaults. Loan modifications generally involve a reduction in interest rates and/or extension of maturity dates and also may include step up interest rates in their modified terms which will impact their weighted average yield in the future. The loans which qualified as TDRs during the quarter ended September 30, 2021 and 2020, capitalized prior past due amounts and modified the loan’s repayment terms. In March 2020, various regulatory agencies, including the Board of Governors of the Federal Reserve System (the “FRB”) and the Federal Deposit Insurance Corporation (the “FDIC”), issued an interagency statement on loan modifications and reporting for financial institutions working with customers affected by COVID-19. The interagency statement was effective immediately and impacted accounting for loan modifications. The agencies confirmed with the staff of the FASB that short-term modifications made on a good faith basis in response to COVID-19 to borrowers who were current prior to any relief, are not to be considered TDRs. This includes short-term modifications such as payment deferrals, fee waivers, extension of repayment terms, or other delays in payment that are insignificant. Provisions of the CARES Act largely mirrored the provisions of the interagency statement, providing that modified loans were not to be considered TDRs if they were performing at December 31, 2019 and other considerations set forth in the interagency statements were met. Borrowers considered current are those that were less than 30 days past due at the time a modification program was implemented or at December 31, 2019. On December 27, 2020, the 2021 Consolidated Appropriations Act was signed into law. The $ 900 billion relief package includes legislation that extends certain relief provisions of the CARES Act that were set to expire on December 31, 2020 . This legislation extends this relief to the earlier of 60 days after the national emergency declared by the President is terminated or January 1, 2022. As of September 30, 2021 , the Company had 13 non-TDR loan modifications granted under the CARES Act totaling approximately $ 5.6 million. Individually Analyzed Loans Effective July 1, 2020, individually analyzed loans include loans which do not share similar risk characteristics with other loans. TDR’s will generally be evaluated for individual impairment, however, after a period of sustained repayment performance which permits the credit to be returned to accrual status, a TDR would generally be removed from individual impairment analysis and returned to its corresponding pool. As of September 30, 2021 , the carrying value of individually analyzed loans totaled $ 72.9 million, of which $ 61.9 million were considered collateral dependent. For collateral dependent loans where management has determined that foreclosure of the collateral is probable, or where the borrower is experiencing financial difficulty and repayment of the loan is to be provided substantially through the operation or sale of the collateral, the ACL is measured based on the difference between the fair value of the collateral, less costs to sell, and the amortized cost basis of the loan as of the measurement date. See Note 12 for additional disclosure regarding fair value of individually analyzed collateral dependent loans. The following tables presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated: September 30, 2021 Carrying Value Related Allowance (In Thousands) Commercial loans: Multi-family mortgage $ 20,946 $ 1,218 Nonresidential mortgage (1) 32,412 4,194 Commercial business (2) 178 - Construction 2,086 - Total commercial loans 55,622 5,412 One- to four-family residential (3) 6,230 257 Consumer loans: Home equity loans (3) 70 - Total $ 61,922 $ 5,669 June 30, 2021 Carrying Value Related Allowance (In Thousands) Commercial loans: Multi-family mortgage $ 18,526 $ 1,368 Nonresidential mortgage (1) 32,891 4,724 Commercial business (2) 183 - Construction - - Total commercial loans 51,600 6,092 One- to four-family residential (3) 7,612 420 Consumer loans: Home equity loans (3) 31 - Total $ 59,243 $ 6,512 (1) Secured by income-producing nonresidential property. (2) Secured by business assets. (3) Secured by one- to four-family residential properties. 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 to classify the loans as to credit risk. The Company uses the following definitions for risk ratings: Pass – Loans that are well protected by the current net worth and paying capacity of the obligor (or guarantors, if any) or by the fair value, less cost to acquire and sell, of any underlying collateral in a timely manner. Special Mention – Loans which do not currently expose the Company to a sufficient degree of risk to warrant an adverse classification but have some credit deficiencies or other potential weaknesses. Substandard – Loans which are inadequately protected by the paying capacity and net worth of the obligor or the collateral pledged, if any. Substandard assets include those characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Doubtful – Loans which have all of the weaknesses inherent in those classified as Substandard, with the added characteristic that the weaknesses present make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions and values. Loss – Loans which considered uncollectible or of so little value that their continuance as assets is not warranted. The following table presents the risk category of loans as of September 30, 2021 by loan segment and vintage year: Term Loans by Origination Year for Fiscal Years ended June 30, 2022 2021 2020 2019 2018 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 74,697 $ 279,921 $ 255,968 $ 336,773 $ 299,878 $ 664,830 $ - $ 1,912,067 Special Mention - - - 26,836 5,051 4,814 - 36,701 Substandard - - - - 2,791 27,122 - 29,913 Doubtful - - - - - - - - Total multi-family mortgage 74,697 279,921 255,968 363,609 307,720 696,766 - 1,978,681 Non-residential mortgage: Pass 31,464 98,113 68,198 56,159 60,264 629,554 6,142 949,894 Special Mention - - - 23,520 4,102 8,931 - 36,553 Substandard - 730 - - 4,934 31,280 - 36,944 Doubtful - - - - - - - - Total non-residential mortgage 31,464 98,843 68,198 79,679 69,300 669,765 6,142 1,023,391 Commercial business: Pass 14,749 41,653 10,924 5,114 11,778 14,869 64,267 163,354 Special Mention - - 72 - 2,239 936 459 3,706 Substandard - 41 73 - 1,473 293 23 1,903 Doubtful - - - - - 420 9 429 Total commercial business 14,749 41,694 11,069 5,114 15,490 16,518 64,758 169,392 Construction loans: Pass 2,436 54,946 18,549 11,040 14,454 2,962 5,735 110,122 Special Mention - - - - - - - - Substandard - - - - - 2,104 - 2,104 Doubtful - - - - - - - - Total construction loans 2,436 54,946 18,549 11,040 14,454 5,066 5,735 112,226 Residential mortgage: Pass 124,524 552,925 110,464 64,802 64,542 546,053 99 1,463,409 Special Mention - - - 1,226 - 706 - 1,932 Substandard - - 1,728 663 - 15,374 - 17,765 Doubtful - - - - - - - - Total residential mortgage 124,524 552,925 112,192 66,691 64,542 562,133 99 1,483,106 Home equity loans: Pass 212 812 2,210 3,828 2,542 8,880 24,009 42,493 Special Mention - - - - - 383 - 383 Substandard - - - 102 - 1,934 - 2,036 Doubtful - - - - - - - - Total home equity loans 212 812 2,210 3,930 2,542 11,197 24,009 44,912 Other consumer loans Pass 166 370 503 520 253 1,083 45 2,940 Special Mention - - - - - - - - Substandard - - - - - - 1 1 Doubtful - - - - - - 79 79 Other consumer loans 166 370 503 520 253 1,083 125 3,020 Total loans $ 248,248 $ 1,029,511 $ 468,689 $ 530,583 $ 474,301 $ 1,962,528 $ 100,868 $ 4,814,728 The following table presents the risk category of loans as of June 30, 2021 by loan segment and vintage year: Term Loans by Origination Year for Fiscal Years ended June 30, 2021 2020 2019 2018 2017 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 281,402 $ 257,970 $ 374,871 $ 341,304 $ 343,370 $ 374,909 $ - $ 1,973,826 Special Mention - - 26,974 5,079 4,834 1,054 - 37,941 Substandard - - - 2,896 13,198 11,399 - 27,493 Doubtful - - - - - - - - Total multi-family mortgage 281,402 257,970 401,845 349,279 361,402 387,362 - 2,039,260 Non-residential mortgage: Pass 99,602 77,146 56,435 64,616 254,940 441,696 6,150 1,000,585 Special Mention - - 23,520 4,146 8,801 4,513 - 40,980 Substandard 743 - - 4,934 20,602 11,600 - 37,879 Doubtful - - - - - - - - Total non-residential mortgage 100,345 77,146 79,955 73,696 284,343 457,809 6,150 1,079,444 Commercial business: Pass 44,514 18,988 4,701 12,654 3,322 12,892 65,657 162,728 Special Mention - - - 2,304 945 12 461 3,722 Substandard 41 76 160 1,474 132 189 - 2,072 Doubtful - - - - - 420 9 429 Total commercial business 44,555 19,064 4,861 16,432 4,399 13,513 66,127 168,951 Construction loans: Pass 40,332 17,404 11,203 13,860 1,641 1,382 5,735 91,557 Special Mention - - - - - - - - Substandard - - - - - 2,247 - 2,247 Doubtful - - - - - - - - Total construction loans 40,332 17,404 11,203 13,860 1,641 3,629 5,735 93,804 Residential mortgage: Pass 560,543 124,606 69,917 74,754 119,238 472,587 375 1,422,020 Special Mention - - 1,233 - - 712 - 1,945 Substandard - 1,040 671 511 1,468 20,066 - 23,756 Doubtful - - - - - - - - Total residential mortgage 560,543 125,646 71,821 75,265 120,706 493,365 375 1,447,721 Home equity loans: Pass 834 2,508 4,585 2,778 2,241 7,798 24,788 45,532 Special Mention - - - - - 393 - 393 Substandard - - - - 11 1,935 - 1,946 Doubtful - - - - - - - - Total home equity loans 834 2,508 4,585 2,778 2,252 10,126 24,788 47,871 Other consumer loans Pass 550 517 633 256 127 1,044 44 3,171 Special Mention - - - - - - - - Substandard - - - - - - 1 1 Doubtful - - - - - - 87 87 Other consumer loans 550 517 633 256 127 1,044 132 3,259 Total loans $ 1,028,561 $ 500,255 $ 574,903 $ 531,566 $ 774,870 $ 1,366,848 $ 103,307 $ 4,880,310 Residential Mortgage Loans in Foreclosure We may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan via foreclosure or through an in-substance repossession. As of September 30, 2021, we held one single-family property in other real estate owned with an aggregate carrying value of $ 178,000 that was acquired through a foreclosure on a residential mortgage loan. As of that same date, we held 10 residential mortgage loans with aggregate carrying values totaling $ 1.8 million which were in the process of foreclosure. As of June 30, 2021 , we held one single-family property in other real estate owned with an aggregate carrying value of $ 178,000 that was acquired through a foreclosure on a residential mortgage loan. As of that same date, we held 11 residential mortgage loans with aggregate carrying values totaling $ 2.1 million which were in the process of foreclosure. Under New Jersey's new eviction protections, no evictions may occur now or in the future based on rent due during the time period of March 1, 2020 through August 31, 2021. Certain other eviction protections will extend until December 31, 2021, for households under certain income levels. The moratorium on home foreclosures ends on November 15, 2021, for all income levels. This includes landlords facing foreclosure who currently have tenants. The New York law, which places a moratorium on evictions for tenants who have endured COVID-related hardships and on foreclosures, will be in effect until at least January 15, 2022. As a result, since March 28, 2020, the Company has temporarily suspended residential property foreclosure sales and evictions. These eviction restrictions may be subject to legal challenges and may change or be rescinded completely based on the results of court proceedings. |