Loans Receivable | LOANS RECEIVABLE The following table sets forth the composition of the Company’s loan portfolio at December 31, 2022 and June 30, 2022: December 31, June 30, (In Thousands) Commercial loans: Multi-family mortgage $ 2,851,721 $ 2,409,090 Nonresidential mortgage 1,017,341 1,019,838 Commercial business 177,530 176,807 Construction 186,663 140,131 Total commercial loans 4,233,255 3,745,866 One- to four-family residential mortgage 1,719,514 1,645,816 Consumer loans: Home equity loans 45,690 42,028 Other consumer 2,648 2,866 Total consumer loans 48,338 44,894 Total loans 6,001,107 5,436,576 Unaccreted yield adjustments (1) (16,974) (18,731) Total loans receivable, net of yield adjustments $ 5,984,133 $ 5,417,845 ___________________________ (1) At December 31, 2022, included a fair value adjustment to the carrying amount of hedged one- to four-family residential mortgage loans. 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 December 31, 2022 and June 30, 2022, by loan segment: Payment Status 30-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total (In Thousands) Multi-family mortgage $ — $ — $ 7,663 $ 7,663 $ 2,844,058 $ 2,851,721 Nonresidential mortgage 204 — 5,696 5,900 1,011,441 1,017,341 Commercial business 204 — 265 469 177,061 177,530 Construction — — — — 186,663 186,663 One- to four-family residential mortgage 3,634 1,775 1,979 7,388 1,712,126 1,719,514 Home equity loans 151 4 23 178 45,512 45,690 Other consumer — — — — 2,648 2,648 Total loans $ 4,193 $ 1,779 $ 15,626 $ 21,598 $ 5,979,509 $ 6,001,107 Payment Status 30-59 Days 60-89 Days 90 Days and Over Total Past Due Current Total (In Thousands) Multi-family mortgage $ 3,148 $ 3,056 $ 7,788 $ 13,992 $ 2,395,098 $ 2,409,090 Nonresidential mortgage 4,026 — 18,132 22,158 997,680 1,019,838 Commercial business 98 57 155 310 176,497 176,807 Construction — — — — 140,131 140,131 One- to four-family residential mortgage 1,525 253 3,455 5,233 1,640,583 1,645,816 Home equity loans 28 35 — 63 41,965 42,028 Other consumer — — — — 2,866 2,866 Total loans $ 8,825 $ 3,401 $ 29,530 $ 41,756 $ 5,394,820 $ 5,436,576 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 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 the Company expects to receive all remaining principal and interest 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 six months ended December 31, 2022 and 2021. The following tables present information relating to the Company’s nonperforming loans as of December 31, 2022 and June 30, 2022: Performance Status 90 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total (In Thousands) Multi-family mortgage $ — $ 7,890 $ 8,381 $ 16,271 $ 2,835,450 $ 2,851,721 Nonresidential mortgage — 12,187 5,696 17,883 999,458 1,017,341 Commercial business — 262 10 272 177,258 177,530 Construction — — — — 186,663 186,663 One- to four-family residential mortgage — 2,916 3,121 6,037 1,713,477 1,719,514 Home equity loans — — 86 86 45,604 45,690 Other consumer — — — — 2,648 2,648 Total loans $ — $ 23,255 $ 17,294 $ 40,549 $ 5,960,558 $ 6,001,107 Performance Status 90 Days and Over Past Due Accruing Nonaccrual Loans with Allowance for Credit Losses Nonaccrual Loans with no Allowance for Credit Losses Total Nonperforming Performing Total (In Thousands) Multi-family mortgage $ — $ 8,367 $ 18,286 $ 26,653 $ 2,382,437 $ 2,409,090 Nonresidential mortgage — 12,602 19,292 31,894 987,944 1,019,838 Commercial business — 212 81 293 176,514 176,807 Construction — — 1,561 1,561 138,570 140,131 One- to four-family residential mortgage — 3,543 4,946 8,489 1,637,327 1,645,816 Home equity loans — 302 1,129 1,431 40,597 42,028 Other consumer — — — — 2,866 2,866 Total loans $ — $ 25,026 $ 45,295 $ 70,321 $ 5,366,255 $ 5,436,576 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 $18.4 million and $22.2 million as of December 31, 2022 and June 30, 2022, respectively. The allowance for credit losses associated with the TDRs presented in the tables below totaled $331,000 and $365,000 as of December 31, 2022 and June 30, 2022, respectively. As of December 31, 2022, the Company had commitments to lend additional funds totaling $69,000 to borrowers whose loans had been restructured in a TDR. The following tables present total TDR loans at December 31, 2022 and June 30, 2022: December 31, 2022 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage — $ — 2 $ 5,539 2 $ 5,539 Nonresidential mortgage 3 184 1 390 4 574 Commercial business 4 3,529 1 7 5 3,536 Total commercial loans 7 3,713 4 5,936 11 9,649 One- to four-family residential mortgage 35 6,394 11 1,921 46 8,315 Consumer loans: Home equity loans 5 374 1 35 6 409 Total 47 $ 10,481 16 $ 7,892 63 $ 18,373 June 30, 2022 Accrual Non-accrual Total # of Loans Amount # of Loans Amount # of Loans Amount (Dollars In Thousands) Commercial loans: Multi-family mortgage — $ — 2 $ 5,626 2 $ 5,626 Nonresidential mortgage 4 389 2 1,565 6 1,954 Commercial business 5 3,631 2 82 7 3,713 Construction — — 1 1,561 1 1,561 Total commercial loans 9 4,020 7 8,834 16 12,854 One- to four-family residential mortgage 29 4,488 16 3,314 45 7,802 Consumer loans: Home equity loans 5 164 2 1,364 7 1,528 Total 43 $ 8,672 25 $ 13,512 68 $ 22,184 The following tables present information regarding TDRs that occurred during the three months and six months ended December 31, 2022 and 2021: Three Months Ended December 31, 2022 Three Months Ended December 31, 2021 # of Loans Pre- Post- # of Loans Pre- Post- (Dollars In Thousands) Commercial business 1 $ 7 $ 7 — $ — $ — One- to four-family residential mortgage 1 273 270 2 261 261 Total 2 $ 280 $ 277 2 $ 261 $ 261 Six Months Ended December 31, 2022 Six Months Ended December 31, 2021 # of Loans Pre- Post- # of Loans Pre- Post- (Dollars In Thousands) Multi-family mortgage — $ — $ — 1 $ 2,987 $ 2,972 Commercial business 1 7 7 — — — One- to four-family residential mortgage 2 708 705 2 261 261 Home equity loans 1 35 35 — — — Total 4 $ 750 $ 747 3 $ 3,248 $ 3,233 During the three months and six months ended December 31, 2022, there were charge-offs of $5,000 and $15,000, respectively, related to TDRs. During the three months and six months ended December 31, 2021, there were no charge-offs related to TDRs. During the three months and six months ended December 31, 2022, there were two TDR defaults totaling $170,000. During the three months and six months ended December 31, 2021, there were no defaults of TDRs. 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 three months and six months ended December 31, 2022 and 2021, capitalized prior past due amounts and modified the repayment terms. Individually Analyzed Loans Individually analyzed loans include loans which do not share similar risk characteristics with other loans. TDRs 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 December 31, 2022, the carrying value of individually analyzed loans, including loans acquired with deteriorated credit quality that were individually analyzed, totaled $40.5 million, of which $36.9 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 allowance for credit losses 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 table presents the carrying value and related allowance of collateral dependent individually analyzed loans at the dates indicated: December 31, 2022 June 30, 2022 Carrying Value Related Allowance Carrying Value Related Allowance (In Thousands) Commercial loans: Multi-family mortgage $ 16,271 $ 352 $ 26,653 $ 849 Nonresidential mortgage (1) 17,529 2,392 30,733 2,696 Construction — — 1,561 — Total commercial loans 33,800 2,744 58,947 3,545 One- to four-family residential mortgage (2) 3,082 26 4,305 77 Consumer loans: Home equity loans (2) — — 35 — Total $ 36,882 $ 2,770 $ 63,287 $ 3,622 ___________________________ (1) Secured by income-producing nonresidential property. (2) 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 are 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 December 31, 2022 by loan segment and vintage year: Term Loans by Origination Year for Fiscal Years ended June 30, 2023 2022 2021 2020 2019 Prior Revolving Loans Total (In Thousands) Multi-family mortgage: Pass $ 593,864 $ 957,401 $ 246,580 $ 202,298 $ 246,991 $ 562,005 $ — $ 2,809,139 Special Mention — — — — 6,091 7,445 — 13,536 Substandard — — — — 9,545 19,501 — 29,046 Doubtful — — — — — — — — Total multi-family mortgage 593,864 957,401 246,580 202,298 262,627 588,951 — 2,851,721 Nonresidential mortgage: Pass 96,016 229,684 85,982 53,084 59,951 462,184 6,000 992,901 Special Mention — — — — — 579 — 579 Substandard — — 714 — 931 22,216 — 23,861 Doubtful — — — — — — — — Total nonresidential mortgage 96,016 229,684 86,696 53,084 60,882 484,979 6,000 1,017,341 Commercial business: Pass 11,522 37,850 35,453 9,529 2,540 9,968 65,504 172,366 Special Mention — — — 55 180 2,898 — 3,133 Substandard — — 35 473 48 1,371 104 2,031 Doubtful — — — — — — — — Total commercial business 11,522 37,850 35,488 10,057 2,768 14,237 65,608 177,530 Construction loans: Pass 13,628 27,363 117,830 11,854 3,000 7,253 5,735 186,663 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — — — Total construction loans 13,628 27,363 117,830 11,854 3,000 7,253 5,735 186,663 Residential mortgage: Pass 151,323 463,800 506,856 83,231 47,554 453,552 — 1,706,316 Special Mention — — — — 1,184 493 — 1,677 Substandard — 270 — — 82 11,169 — 11,521 Doubtful — — — — — — — — Total residential mortgage 151,323 464,070 506,856 83,231 48,820 465,214 — 1,719,514 Home equity loans: Pass 7,560 2,794 658 1,439 2,665 8,221 21,752 45,089 Special Mention — — — — — — — — Substandard — — — — 116 358 127 601 Doubtful — — — — — — — — Total home equity loans 7,560 2,794 658 1,439 2,781 8,579 21,879 45,690 Other consumer loans Pass 232 287 171 457 335 1,041 41 2,564 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — 84 84 Other consumer loans 232 287 171 457 335 1,041 125 2,648 Total loans $ 874,145 $ 1,719,449 $ 994,279 $ 362,420 $ 381,213 $ 1,570,254 $ 99,347 $ 6,001,107 The following table presents the risk category of loans as of June 30, 2022 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 $ 963,263 $ 250,385 $ 211,101 $ 264,174 $ 248,058 $ 438,642 $ — $ 2,375,623 Special Mention — — — — — 6,814 — 6,814 Substandard — — — 9,821 5,935 10,897 — 26,653 Doubtful — — — — — — — — Total multi-family mortgage 963,263 250,385 211,101 273,995 253,993 456,353 — 2,409,090 Nonresidential mortgage: Pass 231,777 87,309 53,983 60,714 49,285 491,849 6,052 980,969 Special Mention — — — — — 591 — 591 Substandard — 720 — 933 4,026 32,599 — 38,278 Doubtful — — — — — — — — Total nonresidential mortgage 231,777 88,029 53,983 61,647 53,311 525,039 6,052 1,019,838 Commercial business: Pass 46,888 38,791 12,155 3,581 4,861 6,455 58,662 171,393 Special Mention — — 62 186 2,173 873 215 3,509 Substandard — 38 319 — 1,347 61 58 1,823 Doubtful — — — — — 80 2 82 Total commercial business 46,888 38,829 12,536 3,767 8,381 7,469 58,937 176,807 Construction loans: Pass 16,407 95,526 10,337 3,039 6,509 1,017 5,735 138,570 Special Mention — — — — — — — — Substandard — — — — — 1,561 — 1,561 Doubtful — — — — — — — — Total construction loans 16,407 95,526 10,337 3,039 6,509 2,578 5,735 140,131 Residential mortgage: Pass 472,160 524,163 88,645 49,316 55,139 442,517 374 1,632,314 Special Mention — — — 1,205 — 621 — 1,826 Substandard — — — 83 — 11,593 — 11,676 Doubtful — — — — — — — — Total residential mortgage 472,160 524,163 88,645 50,604 55,139 454,731 374 1,645,816 Home equity loans: Pass 3,197 692 1,681 3,117 2,027 7,321 22,334 40,369 Special Mention — — — — — — — — Substandard — — — 120 — 1,539 — 1,659 Doubtful — — — — — — — — Total home equity loans 3,197 692 1,681 3,237 2,027 8,860 22,334 42,028 Other consumer loans Pass 442 308 471 375 258 895 34 2,783 Special Mention — — — — — — — — Substandard — — — — — — — — Doubtful — — — — — — 83 83 Other consumer loans 442 308 471 375 258 895 117 2,866 Total loans $ 1,734,134 $ 997,932 $ 378,754 $ 396,664 $ 379,618 $ 1,455,925 $ 93,549 $ 5,436,576 Mortgage Loans in Foreclosure The Company may obtain physical possession of one- to four-family real estate collateralizing a residential mortgage loan or nonresidential real estate collateralizing a nonresidential mortgage loan via foreclosure or through an in-substance repossession. As of December 31, 2022, the Company held two single-family properties with an aggregate carrying value of $454,000 and one nonresidential property with a carrying value of $13.0 million in other real estate owned that were acquired through foreclosure on residential mortgage loans and a nonresidential mortgage loan, respectively. As of that same date, the Company held five residential mortgage loans with aggregate carrying values totaling $951,000 and six commercial mortgage loans with aggregate carrying values totaling $9.3 million which were in the process of foreclosure. As of June 30, 2022, the Company 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, the Company held seven residential mortgage loans with aggregate carrying values totaling $1.5 million which were in the process of foreclosure. |