Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Sep. 30, 2020 | Nov. 10, 2020 | |
Document and Entity Information | ||
Document Type | 10-Q/A | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Entity Registrant Name | Pioneer Bancorp, Inc./MD | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 25,977,679 | |
Current Fiscal Year End Date | --06-30 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001769663 | |
Amendment Flag | true | |
Amendment Description | EXPLANATORY NOTEPioneer Bancorp, Inc., a Maryland corporation (the "Company") is filing this Amendment to our Quarterly Report on Form 10-Q for the period ended September 30, 2020 (the "Amended Report"), which was originally filed on November 12, 2020 (the "Original Report" or "Quarterly Report on Form 10-Q"), to reflect a restatement of our consolidated financial statements.Description of RestatementAs described in Note 2 to our consolidated financial statements in this Amended Report and as described in additional detail in the Explanatory Note to our Annual Report on Form 10-K/A (Amendment No. 2) for the year ended June 30, 2020 filed on February 22, 2021, the Restatement results from a technical accounting correction to reflect the Mann Entities-related $15.8 million Loan Balances Impairment as a recognized (Type I) subsequent event in the quarter and fiscal year ended June 30, 2019, rather than as a disclosure only nonrecognized (Type II) subsequent event recognized in the quarter ended September 30, 2019, notwithstanding that the Company and the Bank did not start to become aware of the events causing the Impairment until the quarter ended September 30, 2019 (capitalized terms defined below).On February 12, 2021, the Audit Committee of the Board of Directors of the Company, after consultation with management, determined that certain financial statements previously issued by the Company should be restated and no longer relied upon (the "Restatement"). The following financial statements of the Company are impacted by the Restatement: (a) the audited consolidated financial statements for the fiscal years ended June 30, 2019 and June 30, 2020, as reported in the Company's Annual Reports on Form 10-K for those years, and (b) the unaudited consolidated financial statements for the periods ended September 30, 2019, December 31, 2019, March 31, 2020, and September 30, 2020, as reported in the Company's Quarterly Reports on Form 10-Q.Items Amended in this FilingFor the reasons discussed above, we are filing this Amended Report in order to amend the following items in of our Original Report to the extent necessary to reflect the adjustments discussed above and make corresponding revisions to our financial data cited elsewhere in this Amended Report:Part I, Item 1. Consolidated Financial Statements (unaudited) Part I, Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationsPart I, Item 4. Controls and ProceduresPart II, Item 1A. Risk FactorsExcept as noted above, no other information in our Original Report is amended and is repeated herein solely for the reader's convenience.In order to preserve the nature and character of the disclosures set forth in the Original Report, except as expressly noted above, this Amended Report speaks as of the date of the filing of the Original Report, and we have not updated the disclosures in this Amended Report to speak as of a later date. All information contained in this Amended Report is subject to updating and supplementing as provided in our reports filed with the SEC subsequent to the date of the Original Report. Accordingly, this Amended Report should be read in conjunction with our filings made with the SEC subsequent to the filing of the Original Report, including any amendment to these filings. | |
Document Transition Report | false |
CONSOLIDATED STATEMENTS OF COND
CONSOLIDATED STATEMENTS OF CONDITION - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
Assets | ||
Cash and due from banks | $ 37,419 | $ 21,188 |
Federal funds sold | 1,150 | 1,382 |
Interest-earning deposits with banks | 223,589 | 134,333 |
Cash and cash equivalents | 262,158 | 156,903 |
Securities available for sale, at fair value | 81,761 | 75,768 |
Securities held to maturity (fair value of $10,697 at September 30, 2020; and $6,917 at June 30, 2020) | 10,639 | 6,822 |
Equity securities, at fair value | 9,117 | 8,533 |
Federal Home Loan Bank of New York stock | 1,010 | 1,010 |
Net loans receivable | 1,138,095 | 1,148,399 |
Accrued interest receivable | 4,118 | 3,467 |
Premises and equipment, net | 40,274 | 40,863 |
Bank-owned life insurance | 17,244 | 17,240 |
Goodwill | 7,292 | 7,292 |
Other intangible assets, net | 2,080 | 2,159 |
Other assets | 55,229 | 57,956 |
Total assets | 1,629,017 | 1,526,412 |
Deposits: | ||
Non-interest bearing deposits | 522,932 | 437,536 |
Interest bearing deposits | 858,259 | 832,614 |
Total deposits | 1,381,191 | 1,270,150 |
Mortgagors’ escrow deposits | 2,634 | 6,044 |
Other liabilities | 19,793 | 26,252 |
Total liabilities | 1,403,618 | 1,302,446 |
Shareholders' Equity | ||
Preferred stock ($0.01 par value, 5,000,000 shares authorized, no shares issued or outstanding as of September 30, 2020 and June 30, 2020) | ||
Common stock ($0.01 par value, 75,000,000 shares authorized, 25,977,679 shares issued and outstanding as of September 30, 2020 and June 30, 2020) | 260 | 260 |
Additional paid in capital | 113,903 | 113,963 |
Retained earnings | 141,128 | 139,734 |
Unallocated common stock of Employee Stock Ownership Plan ("ESOP") | (12,450) | (12,621) |
Accumulated other comprehensive loss | (17,442) | (17,370) |
Total shareholders' equity | 225,399 | 223,966 |
Total liabilities and shareholders' equity | $ 1,629,017 | $ 1,526,412 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF CONDITION (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
CONSOLIDATED STATEMENTS OF CONDITION | ||
Securities held to maturity, fair value | $ 10,697 | $ 6,917 |
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized shares | 5,000,000 | 5,000,000 |
Preferred stock, issued shares | 0 | 0 |
Preferred stock, outstanding shares | 0 | 0 |
Common stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized shares | 75,000,000 | 75,000,000 |
Common stock, issued shares | 25,977,679 | 25,977,679 |
Common stock, outstanding shares | 25,977,679 | 25,977,679 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Interest and dividend income: | ||
Loans | $ 10,664 | $ 13,150 |
Securities | 330 | 622 |
Interest-earning deposits with banks and other | 71 | 813 |
Total interest and dividend income | 11,065 | 14,585 |
Interest expense: | ||
Deposits | 686 | 1,294 |
Borrowings and other | 29 | 33 |
Total interest expense | 715 | 1,327 |
Net interest income | 10,350 | 13,258 |
Provision for loan losses | 750 | 570 |
Net interest income after provision for loan losses | 9,600 | 12,688 |
Noninterest income: | ||
Bank fees and service charges | 1,535 | 2,631 |
Insurance and wealth management services | 1,353 | 1,354 |
Net gain (loss) on equity securities | 584 | (82) |
Other | 56 | 66 |
Total noninterest income | 3,528 | 3,969 |
Noninterest expense: | ||
Salaries and employee benefits | 6,459 | 5,976 |
Net occupancy and equipment | 1,606 | 1,424 |
Data processing | 874 | 772 |
Advertising and marketing | 127 | 204 |
FDIC insurance premiums | 257 | |
Contribution to Pioneer Bank Charitable Foundation | 5,446 | |
Fraudulent activity | 2,500 | |
Professional fees | 1,015 | 495 |
Other | 1,093 | 1,414 |
Total noninterest expense | 11,431 | 18,231 |
Income (loss) before income taxes | 1,697 | (1,574) |
Income tax expense (benefit) | 303 | (597) |
Net income (loss) | $ 1,394 | $ (977) |
Net earnings (loss) per common share: | ||
Basic | $ 0.06 | $ (0.04) |
Diluted | $ 0.06 | $ (0.04) |
Weighted average shares outstanding - basic and diluted | 25,042,092 | 24,984,812 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||
Net income (loss) | $ 1,394 | $ (977) |
Unrealized gains/losses on securities: | ||
Unrealized holding (losses) gains arising during the period | (99) | 325 |
Unrealized losses/gains on securities, before tax | (99) | 325 |
Tax (benefit) expense | (27) | 84 |
Unrealized gains/losses on securities, net of tax | (72) | 241 |
Total other comprehensive (loss) income | (72) | 241 |
Comprehensive income (loss) | $ 1,322 | $ (736) |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common StockMutual Holding Company | Common StockInitial Public Offering | Common Stock | Additional Paid-In CapitalInitial Public Offering | Additional Paid-In Capital | Retained Earnings | Unallocated Common Stock of ESOP | AOCI | Mutual Holding Company | Initial Public Offering | Total |
Balance at beginning of period at Jun. 30, 2019 | $ 134,361 | $ (11,103) | $ 123,258 | ||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||
Cumulative effect of change in accounting principle | ASU 2014-09 | 291 | 291 | |||||||||
Cumulative effect of change in accounting principle | ASU 2016-01 | (116) | 116 | |||||||||
Net income (loss) | (977) | (977) | |||||||||
Other comprehensive income (loss) | 241 | 241 | |||||||||
Issuance of common stock | $ 143 | $ 112 | $ 108,800 | $ 143 | $ 108,912 | ||||||
Issuance of common stock (in shares) | 14,287,723 | 11,170,402 | |||||||||
Issuance of common stock to the Pioneer Bank Charitable Foundation | $ 5 | $ 5,191 | 5,196 | ||||||||
Issuance of common stock to the Pioneer Bank Charitable Foundation (in shares) | 519,554 | ||||||||||
Purchase of common stock by the ESOP (1,018,325 shares) | $ (13,644) | (13,644) | |||||||||
ESOP shares committed to be released (25,458 and 12,729 shares) | 16 | 341 | 357 | ||||||||
Balance at end of period at Sep. 30, 2019 | $ 260 | 114,007 | 133,559 | (13,303) | (10,746) | 223,777 | |||||
Balance at end of period (in shares) at Sep. 30, 2019 | 25,977,679 | ||||||||||
Balance at beginning of period at Jun. 30, 2020 | $ 260 | 113,963 | 139,734 | (12,621) | (17,370) | $ 223,966 | |||||
Balance at beginning of period (in shares) at Jun. 30, 2020 | 25,977,679 | 25,977,679 | |||||||||
Increase (Decrease) in Shareholder's Equity | |||||||||||
Net income (loss) | 1,394 | $ 1,394 | |||||||||
Other comprehensive income (loss) | (72) | (72) | |||||||||
ESOP shares committed to be released (25,458 and 12,729 shares) | (60) | 171 | 111 | ||||||||
Balance at end of period at Sep. 30, 2020 | $ 260 | $ 113,903 | $ 141,128 | $ (12,450) | $ (17,442) | $ 225,399 | |||||
Balance at end of period (in shares) at Sep. 30, 2020 | 25,977,679 | 25,977,679 |
CONSOLIDATED STATEMENTS OF CH_2
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (Parenthetical) - shares | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY | ||
Purchase of common stock by ESOP (in shares) | 1,018,325 | |
ESOP shares committed to be released (in shares) | 12,729 | 25,458 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 1,394 | $ (977) |
Adjustments to reconcile net income to net cash from operating activities: | ||
Depreciation and amortization | 713 | 706 |
Provision for loan losses | 750 | 570 |
Net amortization (accretion) on securities | 72 | (129) |
ESOP compensation | 111 | 357 |
Earnings on bank-owned life insurance | (4) | (24) |
Net (gain) loss on the sale, disposal or write-down of premises and equipment, and other real estate owned | (16) | 23 |
Net (gain) loss on equity securities | (584) | 82 |
Deferred tax benefit | (172) | (371) |
(Increase) decrease in accrued interest receivable | (651) | 54 |
Stock contribution to Pioneer Bank Charitable Foundation | 5,196 | |
Decrease (increase) in other assets | 2,826 | (7,396) |
(Decrease) increase in other liabilities | (6,459) | 994 |
Net cash from operating activities | (2,020) | (915) |
Cash flows used in investing activities: | ||
Proceeds from maturities, paydowns and calls of securities available for sale | 20,037 | 15,988 |
Purchases of securities available for sale | (26,201) | (14,982) |
Proceeds from maturities and paydowns of securities held to maturity | 1,521 | 1,599 |
Purchases of securities held to maturity | (5,338) | (1,688) |
Net decrease in loans receivable | 9,554 | |
Net increase in loans receivable | (16,446) | |
Purchases of premises and equipment | (44) | (546) |
Proceeds from sale of premises and equipment, and other real estate owned | 115 | 90 |
Net cash used in investing activities | (356) | (15,985) |
Cash flows from financing activities: | ||
Net increase (decrease) in deposits | 111,041 | (116,558) |
Net decrease in mortgagors’ escrow deposits | (3,410) | (3,292) |
Issuance of common stock | 109,055 | |
Purchase of shares by the ESOP | (13,644) | |
Net cash provided by (used in) financing activities | 107,631 | (24,439) |
Net increase (decrease) in cash and cash equivalents | 105,255 | (41,339) |
Cash and cash equivalents at beginning of period | 156,903 | 230,109 |
Cash and cash equivalents at end of period | 262,158 | 188,770 |
Cash paid during the period for: | ||
Interest | $ 726 | 1,318 |
Income taxes | $ 1,800 |
NATURE OF OPERATIONS
NATURE OF OPERATIONS | 3 Months Ended |
Sep. 30, 2020 | |
NATURE OF OPERATIONS | |
NATURE OF OPERATIONS | 1. Nature of Operations Pioneer Bancorp, Inc. (the “Company”) is a mid-tier stock holding company whose wholly owned subsidiary is Pioneer Bank (the “Bank”). The Bank is a New York State chartered savings bank whose wholly owned subsidiaries are Pioneer Commercial Bank, Anchor Agency, Inc. and Pioneer Financial Services, Inc. The Company provides diversified financial services through the Bank and its subsidiaries, with 22 offices in the Capital Region of New York State. The Company, through its subsidiaries, offers a broad array of deposit, lending, and other financial services to individuals, businesses, and municipalities. The interim financial data as of September 30, 2020 and for the three months ended September 30, 2020 and 2019, respectively, is unaudited and reflects all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented in conformance with accounting principles generally accepted in the United States of America (“GAAP”). The results of operations for the three months ended September 30, 2020 are not necessarily indicative of the results to be achieved for the remainder of fiscal 2021 or any other period. These unaudited interim consolidated financial statements should be read in conjunction with the Company’s 2020 Annual Report on Form 10-K, as amended, for the year ended June 30, 2020. Mutual Holding Company Reorganization and Minority Stock Issuance On July 17, 2019, Pioneer Bancorp, Inc. became the holding company of the Bank when it closed its stock offering in connection with the completion of the reorganization of the Bank into the two-tier mutual holding company form of organization. The Company sold 11,170,402 shares of common stock at a price of $10.00 per share, for net proceeds of $109.1 million, issued 14,287,723 shares to Pioneer Bancorp, MHC and contributed 519,554 shares of common stock and $250,000 in cash to the Pioneer Bank Charitable Foundation. The Company established an ESOP which owns 1,018,325 shares of common stock of the Company. Pioneer Bancorp, MHC now owns 55% of the common stock of the Company. |
RESTATEMENT OF THE CONSOLIDATED
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS | 3 Months Ended |
Sep. 30, 2020 | |
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS | |
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS | 2. The Restatement results from a technical accounting correction to reflect the Mann Entities-related $15.8 million Loan Balances Impairment as a recognized (Type I) subsequent event in the quarter and fiscal year ended June 30, 2019, rather than as a disclosure only nonrecognized (Type II) subsequent event recognized in the quarter ended September 30, 2019, notwithstanding that the Company and the Bank did not start to become aware of the events causing the Impairment until the quarter ended September 30, 2019 (capitalized terms defined below). On February 12, 2021, the Audit Committee of the Board of Directors of the Company, after consultation with management, determined that certain financial statements previously issued by the Company should be restated and no longer relied upon (the “Restatement”). The following financial statements of the Company are impacted by the Restatement: (a) the audited consolidated financial statements for the fiscal years ended June 30, 2019 and June 30, 2020, as reported in the Company’s Annual Reports on Form 10-K for those years, and (b) the unaudited consolidated financial statements for the periods ended September 30, 2019, December 31, 2019, March 31, 2020, and September 30, 2020, as reported in the Company’s Quarterly Reports on Form 10-Q. As previously disclosed, after the Company’s fiscal year ended June 30, 2019, but prior to December 10, 2019, the date the financial statements for that year were issued, the Company became aware of fraudulent activity associated with transactions by an established business customer of the Bank, a subsidiary of the Company. The customer, Michael Mann, and various affiliated entities (collectively, the “Mann Entities”) had numerous general deposit corporate operating accounts and loans with the Bank. As reflected in its Current Report on Form 8-K filed on September 11, 2019, the Company’s potential exposure with respect to the Mann Entities’ lending activity was approximately $15.8 million (the “Loan Balances”). Subsequently, the Company learned that Mr. Mann had perpetrated a concealed fraud on the Bank and many other parties. In the second quarter of fiscal 2020, the Company concluded that due to the impact of the potential fraudulent activity, the Loan Balances were impaired and, as a result, recorded a provision for loan losses in the amount of $15.8 million in the first quarter of fiscal 2020 related to the charge-off of the entire Loan Balances (the “Impairment”). In July 2020, the Company received a comment letter from the staff of the Securities and Exchange Commission (the “SEC”) Division of Corporation Finance (the “Staff”) related to, among other matters, the classification of the Loan Balances Impairment as a disclosure only nonrecognized (Type II) subsequent event in the Company’s Annual Report on Form 10-K for the year ended June 30, 2019 (the “2019 Form 10-K”). The Company and the Staff engaged in several discussions regarding the Staff’s position, based on technical accounting precepts, that the Loan Balances should be deemed impaired as of June 30, 2019, and the Loan Balances Impairment should have been recognized by the Company in the quarter and fiscal year ended June 30, 2019 as a Type I subsequent event and not as a disclosure only nonrecognized (Type II) subsequent event. In its communications with the Staff, the Company described that its original determination that the Loan Balances Impairment was a Type II subsequent event in the Company’s 2019 Form 10-K recognized in the quarter ended September 30, 2019, was based on the unique circumstances of the event. As a result of the Staff’s position, the Restatement reflects the Loan Balances Impairment in the quarter and fiscal year ended June 30, 2019 (as a recognized (Type I) subsequent event), rather than as a disclosure only nonrecognized (Type II) subsequent event recognized in the quarter ended September 30, 2019. This technical accounting correction is not a result of any new facts coming to light after the filing of the 2019 Form 10-K. The table below shows the effects of the Restatement on the Company’s consolidated statement of operations, consolidated statement of comprehensive loss and consolidated statement of cash flows for the quarter ended September 30, 2019 (in thousands, except for per share data). For the Three Months Ended September 30, 2019 As Previously Restatement Reported Adjustments As Restated Consolidated Statement of Operations Net interest income $ 13,258 $ — $ 13,258 Provision for loan losses 16,370 (15,800) 570 Net interest income (loss) after provision for loan losses (3,112) 15,800 12,688 Total noninterest income 3,969 — 3,969 Total noninterest expense 18,231 — 18,231 Loss before income taxes (17,374) 15,800 (1,574) Income tax benefit (4,690) 4,093 (597) Net loss (12,684) 11,707 (977) Loss per common share: Basic $ (0.51) $ 0.47 $ (0.04) Diluted $ (0.51) $ 0.47 $ (0.04) Consolidated Statement of Comprehensive Loss: Net loss $ (12,684) $ 11,707 $ (977) Comprehensive loss (12,443) 11,707 (736) Consolidated Statement of Cash Flows: Net loss $ (12,684) $ 11,707 $ (977) Adjustments to reconcile net loss to net cash provided by operating activities: Provision for loan losses 16,370 (15,800) 570 Increase in other assets (11,489) 4,093 (7,396) |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 3. Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Bank, and the Bank’s wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ substantially from those estimates. The allowance for loan losses, valuation of securities and other financial instruments, the funded status and expense of employee benefit plans, legal proceeding and other contingent liabilities, and the realizability of deferred tax assets are particularly subject to change. Reclassifications Amounts in the prior period’s consolidated financial statements are reclassified whenever necessary to conform to the current period’s presentation. Correction of an Immaterial Error During the fourth fiscal quarter of 2020, the Company recorded an out-of-period adjustment that effected the Consolidated Statements of Condition, Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss). The adjustment related to an error in the adoption of Accounting Standards Update (“ASU”) 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and measurement of financial assets and financial liabilities, for three legacy preferred stock holdings in the Company’s investment securities portfolio. The impact of this adjustment resulted in a decrease in net loss on equity securities of $16,000 during the fourth fiscal quarter of 2020, a decrease in income tax benefit of $4,000, and a decrease in unrealized holding gains, net of tax, arising during the period of $12,000. The Company also recorded a decrease in retained earnings of $702,000, a reduction in accumulated other comprehensive loss of $702,000, a decrease in securities available for sale of $5.1 million and an increase in equity securities of $5.1 million as of June 30, 2020. The Company reviewed and determined that the impact of this error was not material to the previously issued interim consolidated financial statements. Impact of Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02 to its guidance on “Leases (Topic 842)”. The new leases standard applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. The new leases standard requires a lessor to classify leases as either sales-type, direct financing or operating, similar to existing GAAP. Classification depends on the same five criteria used by lessees plus certain additional factors. The subsequent accounting treatment for all three lease types is substantially equivalent to existing GAAP for sales-type leases, direct financing leases, and operating leases. However, the new standard updates certain aspects of the lessor accounting model to align it with the new lessee accounting model, as well as with the new revenue standard under Topic 606. Lessees and lessors are required to provide certain qualitative and quantitative disclosures to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The amendments in ASU 2016‑02 are effective for the Company for the fiscal year beginning July 1, 2021. Early adoption is permitted. The adoption of this ASU will result in a gross up of the Consolidated Statements of Condition for right-of-use assets and associated lease liabilities for operating leases in which the Company is the lessee. In July 2018, the FASB issued ASU No. 2018‑10, Codification Improvements to Topic 842 - Leases to address certain narrow aspects of the guidance issued in ASU No. 2016‑02. In July 2018, the FASB issued ASU No. 2018‑11, Leases (Topic 842): Targeted Improvements, which amends FASB Accounting Standards Codification (ASC), Leases (Topic 842), to (1) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (2) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract. In December 2018, the FASB issued ASU No. 2018‑20, Narrow-Scope Improvements for Lessors, which addresses issues related to (1) sales tax and similar taxes collected from lessees, (2) certain lessor costs, and (3) recognition of variable payments for contracts with lease and non-lease components. In June 2020, the FASB issued No. ASU 2020-05, Coronavirus Disease 2019 (“COVID-19”) in response to the pandemic which has adversely affected the global economy and caused significant and widespread business and capital market disruptions. The FASB is committed to supporting and assisting stakeholders during this difficult time. The FASB issued ASU 2020-05 as a limited deferral of the effective dates of certain ASUs, including ASU 2016-02 (including amendments issued after the issuance of the original) to provide immediate, near-term relief for certain entities for whom these ASUs are either currently effective or imminently effective. The Company plans to defer the adoption of the amendments in ASU 2016-02 to the fiscal year beginning July 1, 2022. The Company is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures. The Company is performing its accounting analysis of its branch building and other leases underlying contracts. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13 to its guidance on “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016‑13 requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications unless reasonable expectation of a troubled debt restructuring exists) from the date of initial recognition of that instrument. The ASU also replaces the current accounting model for purchased credit impaired loans and debt securities. The allowance for credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (“PCD assets”), should be determined in a similar manner to other financial assets measured on an amortized cost basis. However, upon initial recognition, the allowance for credit losses is added to the purchase price (“gross up approach”) to determine the initial amortized cost basis. The subsequent accounting for PCD financial assets is the same expected loss model described above. Further, the ASU made certain targeted amendments to the existing impairment model for available-for-sale (AFS) debt securities. For an AFS debt security for which there is neither the intent nor a more-likely-than-not requirement to sell, an entity will record credit losses as an allowance rather than a write-down of the amortized cost basis. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2023. An entity will apply the amendments in this ASU through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which aligns the implementation date for nonpublic entities’ annual financial statements with the implementation date for their interim financial statements and clarifies the scope of the guidance in the amendments in ASU 2016‑13. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 clarifies or addresses stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13 related to measuring the allowance for loan losses under the new guidance. The effective dates and transition requirements for the amendments related to this Update are the same as the effective dates and transition requirements in Update 2016-13. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments Credit Losses clarifying certain amendments to various provisions of ASU No. 2016-13 relating to (1) purchased financial assets with credit deterioration, (2) financial assets secured by collateral maintenance agreements, (3) transition relief for troubled debt restructurings, and (4) disclosure relief when the practical expedient for accrued interest receivables is applied. The initial adjustment will not be reported in earnings and therefore will not have any material impact on our consolidated results of operations, but it is expected that it will have an impact on our consolidated financial position at the date of adoption of this ASU. At this time, we have not calculated the estimated impact that this ASU will have on our allowance for loan losses, however, we anticipate it will have a significant impact on the methodology process we utilize to calculate the allowance. Alternative methodologies are currently being considered. Data requirements and integrity are being reviewed and enhancements incorporated into standard processes. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In August 2018, the FASB has issued ASU 2018‑14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715‑20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans”, that applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The following disclosure requirements were removed from Subtopic 715‑20: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) the disclosures related to the June 2001 amendments to the Japanese Welfare Pension Insurance Law; related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan; (4) for nonpublic entities, the reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. However, nonpublic entities will be required to disclose separately the amounts of transfers into and out of Level 3 of the fair value hierarchy and purchases of Level 3 plan assets; and (5) for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. The following disclosure requirements were added to Subtopic 715‑20: (1) the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates; and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715‑20‑50‑3, which state that the following information for defined benefit pension plans should be disclosed: (1) the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets; and (2) the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2021. Early adoption is permitted for all entities. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In December 2019, the FASB issued ASU 2019-12, Income Taxes Topic 740. This update simplifies and improves accounting for income taxes by eliminating certain exceptions to the general rules and clarifying or amending other current guidance. The scope of FASB ASC Subtopic 740-10, Income Taxes -Overall, has been amended to require that, if a franchise (or similar tax) is partially based on income, (1) deferred tax assets and liabilities should be recognized and accounted for pursuant to FASB ASC 740, as should the amount of current tax expense that is based on income, and (2) any incremental amount incurred should be recorded as a non-income-based tax. Note that under the amended guidance, the effect of potentially paying a non-income-based tax in future years need not be considered in evaluating the realizability of deferred tax assets. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2022. Early adoption is permitted, including adoption in an interim period. If early adoption is elected, all of the amended guidance must be adopted in the same period. If early adoption is initially applied in an interim period, any adjustments should be reflected as of the beginning of the annual period that includes that interim period. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments (1) apply to contract modifications that replace a reference rate affected by reference rate reform, (2) provide exceptions to existing guidance related to changes to the critical terms of a hedging relationship due to reference rate reform (3) provide optional expedients for fair value hedging relationships, cash flow hedging relationships, and net investment hedging relationships, and (4) provide a onetime election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments for contract modifications can be elected to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. The amendments for existing hedging relationships can be elected to be applied as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is currently evaluating the potential impact on adoption of this guidance on our consolidated financial statements. |
COVID-19 PANDEMIC
COVID-19 PANDEMIC | 3 Months Ended |
Sep. 30, 2020 | |
COVID-19 PANDEMIC | |
COVID-19 PANDEMIC | 4. In early January 2020, the World Health Organization issued an alert that a novel coronavirus outbreak was emanating from the Wuhan Province in China. Later in January, the first death related to the novel coronavirus, identified as Coronavirus Disease 2019 (“COVID-19”), occurred in the United States. Over the course of the next several weeks, the outbreak continued to spread to various regions of the World prompting the World Health Organization to declare COVID-19 a global pandemic in March 2020. In the United States, the rapid spread of the COVID-19 virus invoked various Federal and State, including New York State, authorities to make emergency declarations and issue executive orders to limit the spread of the disease. Measures included restrictions on international and domestic travel, restrictions on business operations, limitations on public gatherings, implementation of social distancing protocols, school closings, orders to shelter in place and mandates to close all non-essential businesses to the public. As of September 30, 2020, some of these restrictions have been removed and many non-essential businesses have been allowed to re-open in a limited capacity, adhering to social distancing and disinfection guidelines. However, these restrictions and other consequences of the pandemic have resulted in significant adverse effects for the Company and its customers. The direct and indirect effects of the COVID-19 pandemic have resulted in dramatic reductions in the level of economic activity in the Company’s market area, as well as in the national and global economies and financial markets, and have severely hampered the ability for certain businesses and consumers to meet their current repayment obligations. In response to the pandemic, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), in addition to providing financial assistance to both businesses and consumers, creates a forbearance program for federally-backed mortgage loans, protects borrowers from negative credit reporting due to loan accommodations related to the national emergency, and provides financial institutions the option to temporarily suspend certain requirements under GAAP related to troubled debt restructurings for a limited period of time to account for the effects of COVID-19. The Federal and New York State banking regulatory agencies have likewise issued guidance encouraging financial institutions to work prudently with borrowers who are, or may be, unable to meet their contractual payment obligations because of the effects of COVID-19. That guidance, with concurrence of the Financial Accounting Standards Board, and provisions of the CARES Act allow modifications made on a good faith basis in response to COVID-19 to borrowers who were generally current with their payments prior to any relief, to not be treated as troubled debt restructurings. Modifications may include payment deferrals, fee waivers, extensions of repayment term, or other delays in payment. The Company has worked with its customers affected by COVID-19 and accommodated a significant amount of modifications across its loan portfolios. To the extent that such modifications meet the criteria previously described, such modifications are not classified as troubled debt restructurings. The extent to which the direct and indirect effects of the COVID-19 pandemic impact the Company’s operational and financial performance will depend on numerous evolving factors including but not limited to, the magnitude and duration of COVID-19, the extent to which it will impact local, national and global economic conditions including interest rates, unemployment rates, the speed of the anticipated recovery, and governmental and business reactions to the pandemic, all of which are uncertain and cannot be predicted. At this point, the extent to which COVID-19, as well as, the resulting adverse effects on our customers and community, may impact the Company’s future financial condition or results of operations is uncertain and not currently estimable, however the impact could be material. |
INVESTMENT SECURITIES
INVESTMENT SECURITIES | 3 Months Ended |
Sep. 30, 2020 | |
INVESTMENT SECURITIES | |
INVESTMENT SECURITIES | 5. The amortized cost and estimated fair value of securities are as follows (dollars in thousands): September 30, 2020 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 61,700 $ 90 $ — $ 61,790 Municipal obligations 19,107 10 — 19,117 Other debt securities 538 363 (47) 854 Total available for sale securities $ 81,345 $ 463 $ (47) $ 81,761 Securities held to maturity: Municipal obligations $ 3,639 $ 79 $ — $ 3,718 Corporate debt securities 7,000 — (21) 6,979 Total held to maturity securities $ 10,639 $ 79 $ (21) $ 10,697 Equity securities: Preferred stock $ 6,007 $ 34 $ (477) $ 5,564 Common stock 2,807 1,321 (575) 3,553 Total equity securities $ 8,814 $ 1,355 $ (1,052) $ 9,117 June 30, 2020 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 61,299 $ 215 $ (3) $ 61,511 Municipal obligations 13,381 6 (2) 13,385 Other debt securities 573 347 (48) 872 Total available for sale securities $ 75,253 $ 568 $ (53) $ 75,768 Securities held to maturity: Municipal obligations $ 4,822 $ 95 $ — $ 4,917 Corporate debt securities 2,000 — — 2,000 Total held to maturity securities $ 6,822 $ 95 $ — $ 6,917 Equity securities: Preferred stock $ 6,007 $ 29 $ (980) $ 5,056 Common stock 2,807 1,204 (534) 3,477 Total equity securities $ 8,814 $ 1,233 $ (1,514) $ 8,533 The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands): September 30, 2020 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Government and agency obligations (1) $ 10,247 $ — $ — $ — $ 10,247 $ — Other debt securities 65 (2) 131 (45) 196 (47) $ 10,312 $ (2) $ 131 $ (45) $ 10,443 $ (47) Securities held to maturity: Corporate debt securities $ 6,979 $ (21) $ — $ — $ 6,979 $ (21) $ 6,979 $ (21) $ — $ — $ 6,979 $ (21) (1) Unrealized losses on these securities are less than $500. June 30, 2020 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Government and agency obligations $ 10,195 $ (3) $ — $ — $ 10,195 $ (3) Municipal obligations 3,609 (2) — — 3,609 (2) Other debt securities 59 (2) 143 (46) 202 (48) $ 13,863 $ (7) $ 143 $ (46) $ 14,006 $ (53) At September 30, 2020, there were 56 securities with unrealized losses. Unrealized losses on U.S Government and agency, and municipal debt securities are primarily related to increases in credit spreads since the securities were purchased. Unrealized losses on other debt securities (agency-backed and certain private-label mortgage-backed securities, asset-backed securities and collateralized mortgage obligation securities) are not considered other-than-temporary based upon analysis completed by management considering credit rating of the instrument, length of time each security has spent in an unrealized loss position and the strength of the underlying collateral. At September 30, 2020, management reviewed all private-label mortgage-backed securities, asset-backed securities and collateralized mortgage obligations, included in other debt securities, which were rated less than investment grade for impairment, resulting in no additional impairment charges during the three months ended September 30, 2020. At September 30, 2020, 55 securities with an amortized cost of $0.4 million and remaining par value of $1.8 million were evaluated. The table below presents a rollforward of the credit losses recognized in earnings (dollars in thousands): Balance, July 1, 2020 $ 1,214 Reductions for amounts realized for securities transactions — Balance, September 30, 2020 $ 1,214 The fair value of debt securities and carrying amount, if different, by contractual maturity were as follows (dollars in thousands). Securities not due at a single maturity date are shown separately. September 30, 2020 Amortized Estimated Cost Fair Value Securities available for sale: Due in one year or less $ 58,869 $ 58,961 Due after one to five years 21,938 21,946 Other debt securities 538 854 $ 81,345 $ 81,761 Securities held to maturity: Due in one year or less $ 2,513 $ 2,592 Due after one to five years 1,031 1,031 Due after five to ten years 7,095 7,074 $ 10,639 $ 10,697 There were no sales of securities available for sale for the three months ended September 30, 2020 and 2019. There were no sales of securities held to maturity for the three months ended September 30, 2020 and 2019. At September 30, 2020, there were no holdings of securities of any one issuer, other than the U.S. Government and its agencies, in an amount greater than 10% of our equity. As of September 30, 2020, and June 30, 2020, the carrying value of available for sale securities pledged to secure FHLBNY advances and municipal deposits was $77.2 million and $65.0 million, respectively. |
NET LOANS RECEIVABLE
NET LOANS RECEIVABLE | 3 Months Ended |
Sep. 30, 2020 | |
NET LOANS RECEIVABLE | |
NET LOANS RECEIVABLE | 6. A summary of net loans receivable is as follows (dollars in thousands): September 30, 2020 June 30, 2020 Commercial: Real estate $ 443,295 $ 450,452 Commercial and industrial 221,808 237,223 Construction 105,249 91,805 Total commercial 770,352 779,480 Residential mortgages 281,697 279,960 Home equity loans and lines 78,925 80,345 Consumer 29,787 30,860 1,160,761 1,170,645 Net deferred loan costs 944 605 Allowance for loan losses (23,610) (22,851) Net loans receivable $ 1,138,095 $ 1,148,399 The following tables present the activity in the allowance for loan losses by portfolio segment (dollars in thousands): For the Three Months Ended September 30, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 17,570 $ 3,484 $ 1,303 $ 494 $ 22,851 Provisions charged to operations 730 (8) 10 18 750 Loans charged off — — — (26) (26) Recoveries on loans charged off 34 — — 1 35 Allowance for loan losses at end of period $ 18,334 $ 3,476 $ 1,313 $ 487 $ 23,610 For the Three Months Ended September 30, 2019 (As Restated) Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 11,057 $ 2,360 $ 813 $ 269 $ 14,499 Provisions charged to operations 355 38 36 141 570 Loans charged off (4) (19) — (57) (80) Recoveries on loans charged off — — 1 9 10 Allowance for loan losses at end of period $ 11,408 $ 2,379 $ 850 $ 362 $ 14,999 The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method (dollars in thousands): September 30, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 2,410 $ — $ — $ — $ 2,410 Related to loans collectively evaluated for impairment 15,924 3,476 1,313 487 21,200 Ending balance $ 18,334 $ 3,476 $ 1,313 $ 487 $ 23,610 Loans: Individually evaluated for impairment $ 9,843 $ — $ — $ — $ 9,843 Loans collectively evaluated for impairment 760,509 281,697 78,925 29,787 1,150,918 Ending balance $ 770,352 $ 281,697 $ 78,925 $ 29,787 $ 1,160,761 June 30, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 929 $ — $ — $ — $ 929 Related to loans collectively evaluated for impairment 16,641 3,484 1,303 494 21,922 Ending balance $ 17,570 $ 3,484 $ 1,303 $ 494 $ 22,851 Loans: Individually evaluated for impairment $ 8,407 $ — $ — $ — $ 8,407 Loans collectively evaluated for impairment 771,073 279,960 80,345 30,860 1,162,238 Ending balance $ 779,480 $ 279,960 $ 80,345 $ 30,860 $ 1,170,645 The following tables present information related to impaired loans by class as of (dollars in thousands): For the Three Months Ended September 30, 2020 September 30, 2020 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 5,387 $ 5,292 $ — $ 5,401 $ 25 Commercial and industrial 46 42 — 46 — Construction 1,319 1,319 — 1,319 — Subtotal 6,752 6,653 — 6,766 25 With an allowance recorded: Commercial: Real estate 237 218 21 235 — Commercial and industrial 2,987 2,972 2,389 2,988 19 Subtotal 3,224 3,190 2,410 3,223 19 Total $ 9,976 $ 9,843 $ 2,410 $ 9,989 $ 44 For the Year Ended June 30, 2020 June 30, 2020 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 5,417 $ 5,342 $ — $ 5,203 $ 265 Commercial and industrial 46 42 — 46 — Construction 1,319 1,319 — 1,320 — Subtotal 6,782 6,703 — 6,569 265 With an allowance recorded: Commercial: Real estate 233 221 25 234 — Commercial and industrial 1,494 1,483 904 1,513 88 Subtotal 1,727 1,704 929 1,747 88 Total $ 8,509 $ 8,407 $ 929 $ 8,316 $ 353 Interest income on nonaccrual loans is recognized using the cost recovery method. Interest income on impaired loans that were on nonaccrual status and cash-basis interest income for the three months ended September 30, 2020, and the year ended June 30, 2020 was nominal. The recorded investment in loans excludes accrued interest receivable and deferred loan fees, net due to immateriality. At various times, certain loan modifications are executed which are considered to be troubled debt restructurings. Substantially all of these modifications include one or a combination of the following: extension of the maturity date at a stated rate of interest lower than the current market rate for new debt with similar risk; temporary reduction in the interest rate; change in scheduled payment amount including interest only; or extensions of additional credit for payment of delinquent real estate taxes or other costs. The Company has implemented customer payment deferral programs to assist both consumer and commercial borrowers that may be experiencing financial hardship due to COVID-19 related challenges, whereby short-term deferrals of payments (generally three to six months) will be provided. Commercial, residential mortgage, home equity loans and lines, and consumer loans in deferment status will continue to accrue interest on the deferred principal during the deferment period unless otherwise classified as nonaccrual. Consistent with the CARES Act and industry regulatory guidance, borrowers that were otherwise current on loan payments that were granted COVID-19 related financial hardship payment deferrals will continue to be reported as current loans throughout the agreed upon deferral period and therefore, not classified as troubled-debt restructured loans. Borrowers that are delinquent in their payments prior to requesting a COVID-19 related financial hardship payment deferral will be reviewed on a case by case basis for troubled debt restructure classification and non-performing loan status. At September 30, 2020, the Company had COVID-19 related financial hardship payment deferrals for consumer borrowers related to 1 2 loans representing $4.0 million of the Company’s residential mortgage, home equity loans and lines of credit, and consumer loan balances, and for commercial borrowers related to 22 loans representing $27.6 million of the Company’s commercial loan balances. There were no loans modified as troubled debt restructurings during the three months ended September 30, 2020, and 2019, respectively. There were no loans that had been modified as a troubled debt restructuring during the twelve months prior to September 30, 2020 and 2019 which have subsequently defaulted during the three months ended September 30, 2020 and 2019, respectively. Loans subject to a troubled debt restructuring are evaluated as impaired loans for the purpose of determining the specific component of allowance for loan losses. The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans (dollars in thousands): September 30, June 30, 2020 2020 Past Due Past Due 90 Days 90 Days Still on Still on Nonaccrual Accrual Nonaccrual Accrual Commercial: Real estate $ 3,311 $ 548 $ 3,364 $ 143 Commercial and industrial 1,595 37 95 1,455 Construction 1,319 — 1,319 — Residential mortgages 5,410 — 4,807 — Home equity loans and lines 2,191 — 1,865 — Consumer 199 17 210 12 $ 14,025 $ 602 $ 11,660 $ 1,610 Nonaccrual loans and loans past due 90 days still on accrual include both smaller balance homogeneous loans that are collectively evaluated for impairment and individually evaluated impaired loans. The following tables present the aging of the recorded investment in loans by class of loans as of (dollars in thousands): September 30, 2020 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 18 $ 1,952 $ 2,673 $ 4,643 $ 438,652 $ 443,295 Commercial and industrial — 50 1,632 1,682 220,126 221,808 Construction — — 1,319 1,319 103,930 105,249 Residential mortgages 484 556 2,822 3,862 277,835 281,697 Home equity loans and lines 1,443 368 1,573 3,384 75,541 78,925 Consumer 63 15 17 95 29,692 29,787 Total $ 2,008 $ 2,941 $ 10,036 $ 14,985 $ 1,145,776 $ 1,160,761 June 30, 2020 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 23 $ 211 $ 2,270 $ 2,504 $ 447,948 $ 450,452 Commercial and industrial — 26 1,551 1,577 235,646 237,223 Construction — — 1,319 1,319 90,486 91,805 Residential mortgages 2,666 1,272 3,505 7,443 272,517 279,960 Home equity loans and lines 1,217 1,259 1,383 3,859 76,486 80,345 Consumer 39 4 12 55 30,805 30,860 Total $ 3,945 $ 2,772 $ 10,040 $ 16,757 $ 1,153,888 $ 1,170,645 The Company categorizes commercial 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 commercial loans individually by classifying the loans as to credit risk. 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. Commercial loans not meeting the criteria above are considered to be pass rated loans. The following tables present commercial loans summarized by class of loans and the risk category (dollars in thousands): September 30, 2020 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 411,547 $ 15,411 $ 16,337 $ — $ 443,295 Commercial and industrial 206,124 6,301 9,330 53 221,808 Construction 103,329 — 1,920 — 105,249 $ 721,000 $ 21,712 $ 27,587 $ 53 $ 770,352 June 30, 2020 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 433,948 $ 106 $ 16,398 $ — $ 450,452 Commercial and industrial 222,777 6,393 8,000 53 237,223 Construction 89,869 — 1,936 — 91,805 $ 746,594 $ 6,499 $ 26,334 $ 53 $ 779,480 The Company considers the performance of the loan portfolio and its impact on the allowance for loan losses. For residential and consumer loan classes, the Company also evaluates credit quality based on the aging status of the loan, which was previously presented, and by payment activity. As of September 30, 2020 and June 30, 2020, the Company had pledged $424.5 million and $449.5 million respectively, of residential mortgage, home equity and commercial loans as collateral for FHLBNY borrowings and stand-by letters of credit. |
DERIVATIVES
DERIVATIVES | 3 Months Ended |
Sep. 30, 2020 | |
DERIVATIVES | |
DERIVATIVES | 7. In the normal course of servicing our commercial customers, the Company acts as an interest rate swap counterparty for certain commercial borrowers. The Company manages its exposure to such interest rate swaps by entering into corresponding and offsetting interest rate swaps with third parties that match the terms of the interest rate swap with the commercial borrowers. These positions directly offset each other and the Company’s exposure is the fair value of the derivatives due to potential changes in credit risk of our commercial borrowers and third parties. The notional amount of the interest rate swaps does not represent amounts exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements. At September 30, 2020, the Company held derivatives not designated as hedging instruments, comprised of back-to-back interest rate swaps, with a total notional amount of $703. 0 million, consisting of $351.5 million of interest rate swaps with commercial borrowers and $351.5 million of offsetting interest rate swaps with third-party counterparties on substantially the same terms. At June 30, 2020, the Company held derivatives not designated as hedging instruments, comprised of back-to-back interest rate swaps, with a total notional amount of $706.6 million, consisting of $353.3 million of interest rate swaps with commercial borrowers and $353.3 million of offsetting interest rate swaps with third-party counterparties on substantially the same terms. The fair value of derivatives are classified as other assets and other liabilities on the consolidated statements of condition. The estimated fair value of derivatives not designated as hedging instruments are as follows (dollars in thousands): September 30, 2020 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 41,293 $ 41,293 Less: master netting arrangements — — Less: cash collateral applied — (41,293) Net amount $ 41,293 $ — June 30, 2020 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 42,922 $ 42,922 Less: master netting arrangements — — Less: cash collateral applied — (42,922) Net amount $ 42,922 $ — Under terms of the agreements with the third-party counterparties, the Company provides cash collateral to the counterparty for the initial trade. Subsequent to the trade, the margin is exchanged in either direction, based upon the estimated fair value of the underlying contracts. At September 30, 2020, the Company had deposited $41.3 million as collateral for swap agreements with third-party counterparties. At June 30, 2020, the Company had deposited $42.9 million as collateral for swap agreements with third-party counterparties. |
OTHER COMPREHENSIVE INCOME (LOS
OTHER COMPREHENSIVE INCOME (LOSS) | 3 Months Ended |
Sep. 30, 2020 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
OTHER COMPREHENSIVE INCOME (LOSS) | 8. For the three months ended September 30, 2020 and 2019 there were no reclassifications out of accumulated other comprehensive loss. The balances and changes in the components of accumulated other comprehensive income (loss), net of tax are as follows (dollars in thousands): For the Three Months Ended September 30, Accumulated Unrealized Other Gains/Losses Defined Comprehensive on Securities Benefit Plans Loss 2020: Accumulated other comprehensive loss as of July 1, 2020 $ 381 (17,751) $ (17,370) Other comprehensive income (loss) before reclassifications (72) — (72) Accumulated other comprehensive income (loss) as of September 30, 2020 $ 309 (17,751) $ (17,442) 2019: Accumulated other comprehensive income (loss) as of July 1, 2019 $ 338 (11,441) $ (11,103) Other comprehensive income before reclassifications 241 — 241 Reclassification for change in accounting principle (1) 116 — 116 Accumulated other comprehensive income (loss) as of September 30, 2019 $ 695 (11,441) $ (10,746) (1) Adoption of ASU 2016-01 – cumulative effect of change in measurement of equity securities. The amounts of income tax expense (benefit) allocated to each component of other comprehensive income (loss) were as follows (dollars in thousands): For the Three Months Ended September 30, 2020 2019 Unrealized gains/losses on securities: Unrealized holdings (losses) gains arising during the period $ (27) $ 84 Reclassification adjustment for gains included in net income — — (27) 84 Defined benefit plans: Change in funded status — — Reclassification adjustment for accretion of net prior service cost — — Reclassification adjustment for amortization of net actuarial loss — — — — $ (27) $ 84 |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 3 Months Ended |
Sep. 30, 2020 | |
EMPLOYEE BENEFIT PLANS | |
EMPLOYEE BENEFIT PLANS | 9. The Company maintains a noncontributory defined benefit pension plan and a defined benefit post-retirement plan. Plan assets and obligations that determine the funded status are measured as of the end of the fiscal year. Pension Plan The Company maintains a noncontributory defined benefit pension plan covering substantially all of its full-time employees twenty-one years of age or older, with at least one year of service. Through December 31, 2009, pensions were paid as an annuity using a pension formula of 2.0% of the average of the five highest consecutive years of total compensation over the last ten years multiplied by credited service up to thirty years. Effective January 1, 2010, the plan was amended and service rendered thereafter is paid using a pension formula of 1.5%. Amounts contributed to the plan are determined annually on the basis of (a) the maximum amount allowable under Internal Revenue Service regulations and (b) the amount certified by a consulting actuary as necessary to avoid an accumulated funding deficiency as defined by the Employee Retirement Income Security Act of 1974 (“ERISA”) The defined benefit pension plan was amended, effective August 31, 2019, to close the plan to new employees hired on or after September 1, 2019, therefore, no new employees hired on or after September 1, 2019 would be eligible to participate in the defined benefit pension plan. Net periodic pension cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended September 30, 2020 2019 Service cost $ 695 $ 516 Interest cost 458 483 Expected return on plan assets (836) (927) Amortization of net actuarial loss 433 272 Net periodic pension cost $ 750 $ 344 Contributions For the three months ended September 30, 2020 and September 30, 2019, the Company made no cash contributions to the plan. Post-Retirement Healthcare Plan The Company offers a defined benefit post-retirement plan which provides medical and life insurance benefits to employees meeting certain requirements. Effective October 1, 2006, the plan was amended so that there have been no new plan participants for medical benefits. The cost of post-retirement plan benefits is recognized on an accrual basis as employees perform services. Active employees are eligible for retiree medical coverage upon reaching age sixty with twenty-five or more years of service. Employees with a minimum of thirty years of service are eligible for individual and spousal coverage. Retirees are eligible to participate in any bank-sponsored health insurance programs. The Company’s contributions for retiree medical are limited to a monthly premium of $210 for individual coverage and $420 for employee and spousal coverage. The Company’s funding policy is to pay insurance premiums as they come due. Net periodic post-retirement benefit cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended September 30, 2020 2019 Service cost $ 11 $ 9 Interest cost 18 16 Recognized actuarial loss 1 1 Net periodic post-retirement benefit cost $ 30 $ 26 Employee Stock Ownership Plan On July 17, 2019, the Company established an Employee Stock Ownership Plan (“ESOP”) to provide eligible employees the opportunity to own Company stock. The ESOP is a tax-qualified retirement plan for the benefit of Company employees. The Company granted loans to the ESOP for the purchase of 1,018,325 shares of the Company’s common stock at an average price of $13.40 per share. The loan obtained by the ESOP from the Company to purchase the common stock is payable annually over 20 years at a rate per annum equal to the Prime Rate. Loan payments are principally funded by cash contributions from the Bank. The loan is secured by the shares purchased, which are held in a suspense account for allocation among participants as the loan is repaid. The balance of the ESOP loan at September 30, 2020 was $12.9 million. Contributions are allocated to eligible participants on the basis of compensation, subject to federal tax limits. The number of shares committed to be released annually is 50,916 through the year 2038. Participants may receive the shares at the end of employment. Shares held by the ESOP include the following: As of September 30, 2020 2019 Allocated 50,916 — Committed to be allocated 38,187 25,458 Unallocated 929,222 992,867 Total Shares 1,018,325 1,018,325 Total compensation expense recognized in connection with the ESOP for the three months ended September 30, 2020 and 2019 was $111,000 and $357,000, respectively. |
COMMITMENTS AND CONTINGENT LIAB
COMMITMENTS AND CONTINGENT LIABILITIES | 3 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
COMMITMENTS AND CONTINGENT LIABILITIES | 10. Off-Balance-Sheet Financing and Concentrations of Credit The Company is a party to certain financial instruments with off-balance-sheet risk to meet the financing needs of its customers. These financial instruments include the Company’s commitments to extend credit. Those instruments involve, to varying degrees, elements of credit risk in excess of the amount recognized on the consolidated statement of condition. The contract amounts of those instruments reflect the extent of involvement the Company has in particular classes of financial instruments. The Company’s exposure to credit loss in the event of nonperformance by the other party to the commitments to extend credit is represented by the contractual notional amounts of those instruments which are presented in the tables below (dollars in thousands). The Company uses the same credit policies in making commitments as it does for on-balance-sheet instruments. September 30, 2020 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 51,367 $ 225,379 $ 276,746 Standby letters of credit — 29,025 29,025 $ 51,367 $ 254,404 $ 305,771 June 30, 2020 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 41,573 $ 232,137 $ 273,710 Standby letters of credit — 30,654 30,654 $ 41,573 $ 262,791 $ 304,364 Commitments to extend credit are agreements to lend to a customer as long as there is no violation of any condition established in the contract. Commitments generally have fixed expiration dates or other termination clauses and require payment of a fee. Since certain commitments are expected to expire without being fully drawn, the total commitment amounts do not necessarily represent future cash requirements. The Company evaluates each customer’s credit worthiness on a case-by-case basis. The amount of collateral, if any, required by the Company for the extension of credit is based on management’s credit evaluation of the customer. Commitments to extend credit may be written on a fixed rate basis thus exposing the Company to interest rate risk, given the possibility that market rates may change between commitment and actual extension of credit. Standby letters of credit are conditional commitments issued by the Company to guarantee payment on behalf of a customer or to guarantee the performance of a customer to a third party. The credit risk involved in issuing these instruments is essentially the same as that involved in extending loans to customers. Since a portion of these instruments will expire unused, the total amounts do not necessarily represent future cash requirements. Each customer is evaluated individually for creditworthiness under the same underwriting standards used for commitments to extend credit and on-balance-sheet instruments. Bank policies governing loan collateral apply to standby letters of credit at the time of credit extension. Certain residential mortgage loans are written on an adjustable basis and include interest rate caps which limit annual and lifetime increases in interest rates. Generally, adjustable rate mortgages have an annual rate increase cap of 2% and lifetime rate increase cap of 5% to 6% above the initial loan rate. These caps expose the Company to interest rate risk should market rates increase above these limits. At September 30, 2020, approximately $39.6 million of adjustable rate residential mortgage loans had interest rate caps. In addition, certain adjustable rate residential mortgage loans have a conversion option whereby the borrower may elect to convert the loan to a fixed rate during a designated time period. At September 30, 2020, approximately $1.7 million of the adjustable rate mortgage loans had conversion options. The Company periodically sells residential mortgage loans to FNMA and to the State of New York Mortgage Agency. At September 30, 2020 and June 30, 2020, the Bank had no loans held for sale. In addition, the Bank has no loan commitments with borrowers at September 30, 2020 and June 30, 2020 with rate lock agreements which are intended to be held for sale, if closed. The Company generally determines whether or not a loan is held for sale at the time that loan commitments are entered into or at the time a convertible adjustable rate mortgage loan converts to a fixed interest rate. In order to reduce the interest rate risk associated with the portfolio of loans held for sale, as well as loan commitments with locked interest rates which are intended to be held for sale if closed, the Company enters into agreements to sell loans in the secondary market. At September 30, 2020 and June 30, 2020, the Company had no commitments to sell loans to unrelated investors. Concentrations of Credit The Company primarily grants loans to customers located in the New York State counties of Albany, Greene, Rensselaer, Schenectady, Saratoga, and Warren. Although the Company has a diversified loan portfolio, a substantial portion of its debtors’ ability to honor their contracts is dependent upon the real estate and construction-related sectors of the economy, and general economic conditions in the Company’s market area. Legal Proceeding and Other Contingent Liabilities In the ordinary course of business, the Company and the Bank are involved in a number of legal, regulatory, governmental and other proceedings or investigations concerning matters arising from the conduct of their business, including the matters described below. In view of the inherent difficulty of predicting the outcome of such matters, particularly where the claimants seek large or indeterminate damages, the Company generally cannot predict the eventual outcome of the pending matters, timing of the ultimate resolution of these matters, or eventual loss, fines or penalties related to each pending matter. In accordance with applicable accounting guidance, the Company establishes an accrued liability when those matters present loss contingencies that are both probable and estimable. These estimates are based upon currently available information and are subject to significant judgment, a variety of assumptions and known and unknown uncertainties. The Company’s estimates of potential losses will change over time and the actual losses may vary significantly, and there may be an exposure to loss in excess of any amounts accrued. As a matter develops, management, in conjunction with any outside counsel handling the matter, evaluate on an ongoing basis whether such matter presents a loss contingency that is probable and estimable; or where a loss is reasonably possible, whether in excess of a related accrued liability or where there is no accrued liability, whether it is possible to estimate a range of possible loss. Once the loss contingency is deemed to be both probable and estimable, the Company establishes an accrued liability and records a corresponding amount of expense. The Company continues to monitor the matter for further developments that could affect the amount of the accrued liability that has been previously established. Information is provided below regarding the nature of the matters and associated claimed damages. The amount of reasonably possible losses for the matters described below cannot be estimated at this time. The Company and the Bank are defending each of these matters vigorously, and the Company believes that it and the Bank have substantial defenses, including affirmative defenses, counterclaims and cross-claims to the various allegations that have been asserted. Based on current knowledge, other than disclosed below, the Company is not a party to any pending legal or other proceedings that we believe would have a material adverse effect on our financial condition, results of operations or cash flows. In light of the significant judgment, variety of assumptions and uncertainties involved in these matters, some of which are beyond the Company’s control, and the large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of the matters described herein could have an adverse material impact on the Company’s business, prospects, results of operations for any particular reporting period, or cause significant reputational harm. Potentially Fraudulent Activity During the first fiscal quarter of 2020 (the quarter ending September 30, 2019), the Company became aware of potentially fraudulent activity associated with transactions by an established business customer of the Bank. The customer and various affiliated entities (collectively, the “Mann Entities”) had numerous accounts with the Bank. The transactions in question related both to deposit and lending activity with the Mann Entities. For the fraudulent activity related to the Mann Entities, the Bank’s potential exposure with respect to its deposit activity was approximately $18.5 million. In the first fiscal quarter of 2020, the Bank exercised its rights pursuant to state and federal law and the relevant Mann Entity general deposit account agreements to take actions to set off/recover approximately $16.0 million from general deposit corporate operating accounts held by the Mann Entities at the Bank to partially cover overdrafts/negative account balances in Mann Entity general deposit corporate operating accounts that primarily resulted from another bank returning/calling back $15.6 million in checks on August 30, 2019, that the Mann Entities had deposited into and then withdrawn from their accounts at the Bank the day before. In the first fiscal quarter of 2020, the Bank recognized a charge to non-interest expense in the amount of $2.5 million based on the net negative deposit balance of the various Mann Entities’ accounts after the setoffs/overdraft recoveries. Through the end of the first fiscal quarter of 2021, no additional charges to non-interest expense were recognized related to the deposit transactions with the Mann Entities. With respect to the Bank’s lending activity with the Mann Entities, its potential exposure was approximately $15.8 million (which represents the Bank’s participation interest in the approximately $35.8 million commercial loan relationships for which the Bank is the originating lender). In the fourth fiscal quarter of 2019, the Bank recognized a provision for loan losses in the amount of $15.8 million, related to the charge-off of the entire principal balance owed to the Bank related to the Mann Entities’ commercial loan relationships. During the third fiscal quarter of 2020 and the first fiscal quarter of 2021, the Bank recognized partial recoveries in the amount of $1.7 million and $34,000, respectively, related to the charge-off of the Mann Entities’ commercial loan relationships, which were credited to the allowance for loan losses. Through the end of the first fiscal quarter of 2021, no additional charges to the provision for loan losses were recognized related to the loan transactions with the Mann Entities. Several other parties are asserting claims against the Company and the Bank related to the series of transactions between the Company or the Bank, on the one hand, and the Mann Entities, on the other. The Company and the Bank continue to investigate these matters and it is possible that the Company and the Bank will be subject to additional liabilities which may have a material adverse effect on our financial condition, results of operations or cash flows. The Company is pursuing all available sources of recovery and other means of mitigating the potential loss, and the Company and the Bank are vigorously defending all claims asserted against them arising out of or otherwise related to the fraudulent activity of the Mann Entities. Legal Proceedings On October 31, 2019, Southwestern Payroll Services, Inc. (“Southwestern”) filed a complaint against the Company and the Bank (“Pioneer Parties”), Michael T. Mann, Valuewise Corporation, MyPayrollHR, LLC and Cloud Payroll, LLC (collectively, the “Mann Parties”) in the United States District Court for the Northern District of New York. The complaint alleged that the Pioneer Parties (i) wrongfully converted certain funds belonging to Southwestern, (ii) engaged in fraudulent and wrongful collection and retention of funds belonging to Southwestern, and (iii) committed gross negligence and that Southwestern is entitled to a constructive trust limiting how the Pioneer Parties distribute the funds in question, which are about $9.8 million. On November 26, 2019, the Pioneer Parties moved to dismiss Southwestern’s fraud claim, which also postponed the Pioneer Parties’ deadline to file an answer until 14 days after the court decides the motion to dismiss. On December 10, 2019, Southwestern filed a response to the Pioneer Parties’ motion to dismiss and an amended complaint, which rendered the Pioneer Parties’ motion to dismiss moot. The amended complaint named several additional corporate entities affiliated with the Mann Parties as co-defendants and asserted claims against the Pioneer Parties for declaratory judgment, conversion, actual and constructive fraud, gross negligence, unjust enrichment and constructive trust, and an accounting. The amended complaint sought a monetary judgment of at least $9.8 million. Each party has filed numerous motions in the proceedings. On January 10, 2020, the Pioneer Parties moved again to dismiss Southwestern’s fraud claim in the amended complaint, which also postponed the Pioneer Parties’ deadline to file an answer to the amended complaint until 14 days after the court decided the motion to dismiss. On April 16, 2020, the court granted the Pioneer Parties’ motion to dismiss Southwestern’s fraud claim. On April 30, 2020, Southwestern filed a motion for both leave to file a second amended complaint and for reconsideration of the court’s dismissal of Southwestern’s fraud claim. On May 1, 2020, the Pioneer Parties filed their answer to Southwestern’s amended complaint. The Pioneer Parties asserted numerous affirmative defenses, counterclaims against Southwestern, and cross-claims against certain of the Mann Parties, including for common law fraud under New York law and violations of the federal Racketeer Influenced and Corrupt Organization Act. The Pioneer Parties contend that the actions of Southwestern and certain of the Mann Parties resulted in damages of $15.6 million, plus pre-judgment interest. On July 7, 2020, the court granted Southwestern leave to file a second amended complaint, which Southwestern filed on July 16, 2020. Southwestern’s second amended complaint asserted claims against the Pioneer Parties for declaratory judgment, conversion, actual and constructive fraud, gross negligence, unjust enrichment and constructive trust, and an accounting – and sought a monetary judgment of at least $9.8 million. On July 30, 2020, the Pioneer Parties filed an amended answer to Southwestern’s second amended complaint, which asserted the same affirmative defenses, counterclaims, and cross-claims as the Pioneer Parties’ prior answer to Southwestern’s amended complaint. On December 10, 2019, National Payment Corp. (“NatPay”) filed a motion to intervene as a plaintiff in Southwestern’s lawsuit against the Pioneer Parties and the Mann Parties as described above. On January 10, 2020, the Pioneer Parties filed opposition to NatPay’s motion to intervene. On August 4, 2020, the magistrate judge issued a decision recommending that NatPay be allowed to intervene. While the district judge has not yet adopted the magistrate’s recommended decision, NatPay was allowed to file its complaint in intervention on August 18, 2020. NatPay’s complaint includes claims for declaratory judgment, conversion, fraud, gross negligence, unjust enrichment and constructive trust, and for an accounting against the Pioneer Parties. The prayer for relief in NatPay’s complaint seeks “compensatory damages in an amount of no less than $4 million” (the complaint also seeks punitive damages and interest in unspecified amounts). On September 8, 2020, the Pioneer Parties filed their answer and affirmative defenses to NatPay’s complaint. On January 21, 2020, Cachet Financial Services (“Cachet”), a third-party automated clearing house service provider, filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code in the Central District of California, Los Angeles Division. Cachet is currently involved in legal proceedings against certain Mann Parties and other related parties. The Bank is not listed as a creditor in the bankruptcy proceedings. However, in the filings with the bankruptcy court, Cachet asserts that the Bank is holding $7.0 million of its funds. On February 4, 2020, Berkshire Hills Bancorp Inc.’s wholly owned subsidiary Berkshire Bank (“Berkshire Bank”) filed a complaint against the Bank in the Supreme Court of the State of New York for Albany County resulting from Berkshire Bank’s participation interest in the commercial loan relationship to the Mann Entities. The complaint alleges that the Bank (1) breached the amended and restated loan participation agreement between the Bank and Berkshire Bank dated as of June 27, 2018, (2) breached the amended and restated loan participation agreement between the Bank and Berkshire Bank dated as of August 12, 2019, (3) engaged in constructive fraud, (4) engaged in fraudulent inducement, (5) engaged in fraudulent concealment, and (6) negligently misrepresented certain material information. The complaint seeks to recover $15.6 million and additional damages. On August 14, 2020, the Bank filed a motion to dismiss five of Berkshire Bank’s claims. On February 4, 2020, Chemung Financial Corporation’s wholly owned subsidiary, Chemung Canal Trust Company (“Chemung”), filed a complaint against the Bank in the Supreme Court of the State of New York for Albany County resulting from Chemung’s participation interest in the commercial loan relationship to the Mann Entities. The complaint alleges that the Bank (1) breached the participation agreement between the Bank and Chemung dated as of August 12, 2019, (2) engaged in fraudulent activities, (3) engaged in constructive fraud, and (4) negligently misrepresented and omitted certain material information. The complaint seeks to recover $4.2 million and additional damages. On August 14, 2020, the Bank filed a motion to dismiss three of Chemung’s four claims. On April 30, 2020, the U.S. Department of Justice (“DOJ”), with the authorization of a delegate of the Secretary of the Treasury, filed a civil complaint against the Company and the Bank (and Cloud Payroll, LLC) in the United States District Court for the Northern District of New York. The complaint alleges, among other things, that the Pioneer Parties wrongfully setoff approximately $7.3 million from an account held by Cloud Payroll to apply towards debts allegedly owed to the Bank by Cloud Payroll and other affiliates of Michael Mann. The complaint alleges that the funds in question were comprised of payroll taxes and thus subject to a statutory trust under 26 U.S.C. § 7501 that prohibited the Bank from setting off those funds to apply towards debts owed to the Bank. The complaint seeks return of any payroll taxes, plus interest. The Pioneer Parties moved to dismiss the DOJ’s complaint as against them on October 1, 2020. On October 21, 2020, the DOJ filed an amended complaint, which mooted the Pioneer Parties’ motion to dismiss the DOJ’s original complaint. The amended complaint dropped one of the DOJ’s claims against the Pioneer Parties but continues to seek return of any payroll taxes, plus interest. The amended complaint relates to the same set of facts described above in “Potentially Fraudulent Activity”, and the alleged payroll taxes, plus interest, sought in this proceeding may be part of the recovery sought in the Southwestern and NatPay complaints described above. On November 4, 2020, the Pioneer Parties filed their answer and affirmative defenses to the DOJ’s amended complaint. On August 31, 2020, AXH Air-Coolers, LLC (“AXH”) filed a complaint against the Pioneer Parties, and unnamed employees of the Pioneer Parties in the United States District Court for the Northern District of New York. The complaint alleges that the Pioneer Parties (i) wrongfully converted certain tax funds belonging to AXH, (ii) were unjustly enriched by the wrongful taking of tax funds belonging to AXH, and (iii) were grossly negligent in allowing AXH’s tax funds to be misappropriated, offset, converted, or stolen. The prayer for relief in AXH’s complaint seeks $336,000, plus penalties and interest, attorney’s fees, and punitive damages. The complaint relates to the same set of facts as the DOJ complaint as described above, and the alleged taxes sought in the DOJ, Southwestern, and NatPay complaints. On November 5, 2020, the Pioneer Parties moved to dismiss the complaint in its entirety. The Company and the Bank have received inquiries and requests for information from regulatory agencies relating to some of the entities and events that are the subjects of certain lawsuits described above. This has resulted in, or may in the future result in, regulatory agency investigations, litigation, subpoenas, enforcement actions, and related sanctions or costs. The Company and the Bank continue to cooperate with inquiries and respond to requests as appropriate. The Company and the Bank continue to investigate these matters and it is possible that the Company and the Bank will be subject to similar legal, regulatory, governmental or other proceedings and additional liabilities. The ultimate outcome of any such proceedings, involving the Company or the Bank, cannot be predicted with any certainty. It also remains possible that other parties will pursue additional claims against the Bank as a result of the Bank’s dealings with certain of the Mann Entities or as a result of the actions taken by the Pioneer Parties. The Company’s and the Bank’s legal fees and expenses related to these actions are significant. In addition, costs associated with potentially prosecuting, litigating or settling any litigation, satisfying any adverse judgments, if any, or other proceedings, could be significant. These costs, settlements, judgments, sanctions or other expenses could have a material adverse effect on the Company’s financial condition, results of operations or cash flows. |
FAIR VALUE
FAIR VALUE | 3 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE | |
FAIR VALUE | 11. Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. There are three levels of inputs that may be used to measure fair values: Level 1: Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date. Level 2: Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data. Level 3: Significant unobservable inputs that reflect a reporting entity’s own assumptions about the assumptions that market participants would use in pricing an asset or liability. The fair values of securities are determined by obtaining quoted prices on nationally recognized securities exchanges (Level 1 inputs) or matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities (Level 2 inputs). The fair value of interest rate swaps are based on valuation models using observable market data as of the measurement date (Level 2). The fair value of derivatives are classified as a component of other assets and other liabilities on the consolidated statements of condition. The fair value of impaired loans with specific allocations of the allowance for loan losses is generally based on recent real estate appraisals. These appraisals may utilize a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Nonrecurring adjustments to certain commercial and residential real estate properties classified as OREO are measured at fair value, less costs to sell. Fair values are based on recent real estate appraisals. These appraisals may use a single valuation approach or a combination of approaches including comparable sales and the income approach. Adjustments are routinely made in the appraisal process by the independent appraisers to adjust for differences between the comparable sales and income data available. Such adjustments result in a Level 3 classification of the inputs for determining fair value. Assets and Liabilities Measured on a Recurring Basis Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands): Fair Value Measurements at September 30, 2020 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 61,790 $ 61,790 $ — $ — Municipal obligations 19,117 — 19,117 — Other debt securities 854 — 854 Total debt securities 81,761 61,790 19,971 — Equity securities 9,117 5,770 3,347 — Derivative assets 41,293 — 41,293 — Total $ 132,171 $ 67,560 $ 64,611 $ — Fair Value Measurements at June 30, 2020 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 61,511 $ 61,511 $ — $ — Municipal obligations 13,385 — 13,385 — Other debt securities 872 — 872 Total debt securities 75,768 61,511 14,257 — Equity securities 8,533 5,528 3,005 — Derivative assets 42,922 — 42,922 — Total $ 127,223 $ 67,039 $ 60,184 $ — Assets and Liabilities Measured on a Non-Recurring Basis Assets and liabilities measured at fair value on a non-recurring basis are summarized below (dollars in thousands): Fair Value Measurements Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) September 30, 2020 Impaired loans: Commercial loans $ 781 $ — $ — $ 781 OREO 161 — — 161 June 30, 2020 Impaired loans: Commercial loans $ 775 $ — $ — $ 775 OREO 260 — — 260 Impaired loans, which are assets measured at fair value on a non-recurring basis, using the fair value of collateral for collateral dependent loans, had a carrying amount of $3.2 million with a valuation allowance of $2.4 million resulting in an estimated fair value of $ 781,000 as of September 30, 2020. Impaired loans, which are assets measured at fair value on a non-recurring basis, using the fair value of collateral for collateral dependent loans, had a carrying amount of $1.7 million with a valuation allowance of $929,000 resulting in an estimated fair value of $775,000 as of June 30, 2020. Other real estate owned measured at fair value less costs to sell, had a carrying amount of $161,000 at September 30, 2020. Other real estate owned measured at fair value less costs to sell, had a carrying amount of $260,000 at June 30, 2020. There were write-downs of $8,000 for the year ended June 30, 2020. The carrying and estimated fair values of financial assets and liabilities were as follows (dollars in thousands): September 30, 2020 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 262,158 $ 262,158 $ 262,158 $ — $ — Securities available for sale 81,761 81,761 61,790 19,971 — Securities held to maturity 10,639 10,697 — 10,697 — Equity securities 9,117 9,117 5,770 3,347 — FHLBNY stock 1,010 1,010 — 1,010 — Net loans receivable 1,138,095 1,166,600 — — 1,166,600 Accrued interest receivable 4,118 4,118 — 4,118 — Derivative assets 41,293 41,293 — 41,293 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,273,105 $ 1,273,105 $ — $ 1,273,105 $ — Time deposits 108,086 109,218 — 109,218 — Mortgagors’ escrow deposits 2,634 2,634 — 2,634 — Accrued interest payable 24 24 — 24 — June 30, 2020 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 156,903 $ 156,903 $ 156,903 $ — $ — Securities available for sale 75,768 75,768 61,511 14,257 — Securities held to maturity 6,822 6,917 — 6,917 — Equity securities 8,533 8,533 5,528 3,005 — FHLBNY stock 1,010 1,010 — 1,010 — Net loans receivable 1,148,399 1,180,002 — — 1,180,002 Accrued interest receivable 3,467 3,467 — 3,467 — Derivative assets 42,922 42,922 — 42,922 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,150,591 $ 1,150,591 $ — $ 1,150,591 $ — Time deposits 119,559 120,921 — 120,921 — Mortgagors’ escrow deposits 6,044 6,044 — 6,044 — Accrued interest payable 35 35 — 35 — Short-Term Financial Instruments The fair value of certain financial instruments are estimated to approximate their carrying amounts because the remaining term to maturity or period to repricing of the financial instrument is less than ninety days. Such financial instruments include cash and cash equivalents, accrued interest receivable and payable, and mortgagor’s escrow deposits. Securities Fair values of securities available for sale, securities held to maturity and equity securities are determined as outlined earlier in this footnote. FHLBNY Stock The fair value of FHLB stock approximates its carrying value due to transferability restrictions. Loans Fair values are estimated for portfolios of loans with similar financial characteristics. Loans are segregated by type, including residential real estate, commercial real estate, and consumer loans and whether the interest rates are fixed and/or variable. The estimated fair values of performing loans is calculated by discounting scheduled cash flows through the estimated maturity using estimated market discount rates that reflect the credit and interest rate risk inherent in the respective loan portfolio. Estimated fair values for nonperforming loans are based on estimated cash flows discounted using a rate commensurate with the credit risk involved. Assumptions regarding credit risk, cash flows, and discount rates are judgmentally determined using available market information and specific borrower information. Derivatives Fair values of derivative assets and liabilities are determined as outlined earlier in this footnote. Deposits The estimated fair value of deposits with no stated maturity, such as savings, money market and demand deposits, is regarded to be the amount payable on demand. The estimated fair value of time deposits is based on the discounted value of contractual cash flows. The discount rate is estimated using market rates for time deposits with similar maturities. The fair value estimates for deposits do not include the benefit that results from the low-cost funding provided by the deposits as compared to the cost of borrowing funds in the market. |
REVENUE RECOGNITION
REVENUE RECOGNITION | 3 Months Ended |
Sep. 30, 2020 | |
REVENUE RECOGNITION | |
REVENUE RECOGNITION | 12. In general, for revenue not associated with financial instruments, guarantees and lease contracts, we apply the following steps when recognizing revenue from contracts with customers: (i) identify the contract, (ii) identify the performance obligations, (iii) determine the transaction price, (iv) allocate the transaction price to the performance obligations and (v) recognize revenue when performance obligation is satisfied. Our contracts with customers are generally short term in nature, typically due within one year or less or cancellable by us or our customer upon a short notice period. Performance obligations for our customer contracts are generally satisfied at a single point in time, typically when the transaction is complete. In some cases, we act in an agent capacity, deriving revenue through assisting other entities in transactions with our customers. In such transactions, we recognized revenue and the related costs to provide our services on a net basis in our financial statements. These transactions primarily relate to insurance and brokerage commissions, and fees derived from our customers' use of various interchange and ATM/debit card networks. Revenue associated with financial instruments, including revenue from loans and securities is excluded from the scope of the accounting guidance for revenue from contracts with customers. In addition, certain noninterest income streams such as fees associated with mortgage servicing rights, financial guarantees, derivatives, and certain credit card fees are also not in scope of the accounting guidance for revenue from contracts with customers. The accounting guidance for revenue from contracts with customers is applicable to noninterest revenue streams such as deposit related fees, interchange fees, and insurance and wealth management services commissions. The following presents noninterest income, segregated by revenue streams in-scope and out-of-scope of the accounting guidance for revenue from contracts with customers, for the three months ended September 30, 2020 and 2019. For the Three Months Ended September 30, 2020 2019 (dollars in thousands) Non-interest Income In scope Insurance services $ 669 $ 675 Wealth management services 685 679 Service charges on deposit accounts 619 915 Card services income 761 731 Other 61 64 Non-interest income in scope 2,795 3,064 Non-interest income out of scope 733 905 Total non-interest income $ 3,528 $ 3,969 |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | 13. Basic earnings (loss) per share represent income (loss) available to common stockholders divided by the weighted-average number of common shares outstanding during the period. Unallocated ESOP shares are not deemed outstanding for earnings per share calculations. There were no potentially diluted common stock equivalents as of September 30, 2020 or September 30, 2019. For the Three Months Ended September 30, 2020 2019 (As Restated) (Dollars in thousands, except share and per share amounts) Net income (loss) applicable to common stock $ 1,394 $ (977) Average number of common shares outstanding 25,977,679 25,977,679 Less: Average unallocated ESOP shares 935,587 992,867 Average number of common shares outstanding used to calculate basic and diluted earnings per common share 25,042,092 24,984,812 Net earnings (loss) per common share: Basic $ 0.06 $ (0.04) Diluted $ 0.06 $ (0.04) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 3 Months Ended |
Sep. 30, 2020 | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of the Company, the Bank, and the Bank’s wholly owned subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ substantially from those estimates. The allowance for loan losses, valuation of securities and other financial instruments, the funded status and expense of employee benefit plans, legal proceeding and other contingent liabilities, and the realizability of deferred tax assets are particularly subject to change. |
Reclassifications | Reclassifications Amounts in the prior period’s consolidated financial statements are reclassified whenever necessary to conform to the current period’s presentation. |
Correction of an Immaterial Error | Correction of an Immaterial Error During the fourth fiscal quarter of 2020, the Company recorded an out-of-period adjustment that effected the Consolidated Statements of Condition, Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss). The adjustment related to an error in the adoption of Accounting Standards Update (“ASU”) 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and measurement of financial assets and financial liabilities, for three legacy preferred stock holdings in the Company’s investment securities portfolio. The impact of this adjustment resulted in a decrease in net loss on equity securities of $16,000 during the fourth fiscal quarter of 2020, a decrease in income tax benefit of $4,000, and a decrease in unrealized holding gains, net of tax, arising during the period of $12,000. The Company also recorded a decrease in retained earnings of $702,000, a reduction in accumulated other comprehensive loss of $702,000, a decrease in securities available for sale of $5.1 million and an increase in equity securities of $5.1 million as of June 30, 2020. The Company reviewed and determined that the impact of this error was not material to the previously issued interim consolidated financial statements. |
Impact of Recent Accounting Pronouncements | Impact of Recent Accounting Pronouncements In February 2016, the FASB issued ASU 2016‑02 to its guidance on “Leases (Topic 842)”. The new leases standard applies a right-of-use (ROU) model that requires a lessee to record, for all leases with a lease term of more than 12 months, an asset representing its right to use the underlying asset and a liability to make lease payments. For leases with a term of 12 months or less, a practical expedient is available whereby a lessee may elect, by class of underlying asset, not to recognize an ROU asset or lease liability. The new leases standard requires a lessor to classify leases as either sales-type, direct financing or operating, similar to existing GAAP. Classification depends on the same five criteria used by lessees plus certain additional factors. The subsequent accounting treatment for all three lease types is substantially equivalent to existing GAAP for sales-type leases, direct financing leases, and operating leases. However, the new standard updates certain aspects of the lessor accounting model to align it with the new lessee accounting model, as well as with the new revenue standard under Topic 606. Lessees and lessors are required to provide certain qualitative and quantitative disclosures to enable users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The amendments in ASU 2016‑02 are effective for the Company for the fiscal year beginning July 1, 2021. Early adoption is permitted. The adoption of this ASU will result in a gross up of the Consolidated Statements of Condition for right-of-use assets and associated lease liabilities for operating leases in which the Company is the lessee. In July 2018, the FASB issued ASU No. 2018‑10, Codification Improvements to Topic 842 - Leases to address certain narrow aspects of the guidance issued in ASU No. 2016‑02. In July 2018, the FASB issued ASU No. 2018‑11, Leases (Topic 842): Targeted Improvements, which amends FASB Accounting Standards Codification (ASC), Leases (Topic 842), to (1) add an optional transition method that would permit entities to apply the new requirements by recognizing a cumulative-effect adjustment to the opening balance of retained earnings in the year of adoption, and (2) provide a practical expedient for lessors regarding the separation of the lease and non-lease components of a contract. In December 2018, the FASB issued ASU No. 2018‑20, Narrow-Scope Improvements for Lessors, which addresses issues related to (1) sales tax and similar taxes collected from lessees, (2) certain lessor costs, and (3) recognition of variable payments for contracts with lease and non-lease components. In June 2020, the FASB issued No. ASU 2020-05, Coronavirus Disease 2019 (“COVID-19”) in response to the pandemic which has adversely affected the global economy and caused significant and widespread business and capital market disruptions. The FASB is committed to supporting and assisting stakeholders during this difficult time. The FASB issued ASU 2020-05 as a limited deferral of the effective dates of certain ASUs, including ASU 2016-02 (including amendments issued after the issuance of the original) to provide immediate, near-term relief for certain entities for whom these ASUs are either currently effective or imminently effective. The Company plans to defer the adoption of the amendments in ASU 2016-02 to the fiscal year beginning July 1, 2022. The Company is evaluating the significance and other effects of adoption on the consolidated financial statements and related disclosures. The Company is performing its accounting analysis of its branch building and other leases underlying contracts. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13 to its guidance on “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”. ASU 2016‑13 requires credit losses on most financial assets measured at amortized cost and certain other instruments to be measured using an expected credit loss model (referred to as the current expected credit loss (CECL) model). Under this model, entities will estimate credit losses over the entire contractual term of the instrument (considering estimated prepayments, but not expected extensions or modifications unless reasonable expectation of a troubled debt restructuring exists) from the date of initial recognition of that instrument. The ASU also replaces the current accounting model for purchased credit impaired loans and debt securities. The allowance for credit losses for purchased financial assets with a more-than insignificant amount of credit deterioration since origination (“PCD assets”), should be determined in a similar manner to other financial assets measured on an amortized cost basis. However, upon initial recognition, the allowance for credit losses is added to the purchase price (“gross up approach”) to determine the initial amortized cost basis. The subsequent accounting for PCD financial assets is the same expected loss model described above. Further, the ASU made certain targeted amendments to the existing impairment model for available-for-sale (AFS) debt securities. For an AFS debt security for which there is neither the intent nor a more-likely-than-not requirement to sell, an entity will record credit losses as an allowance rather than a write-down of the amortized cost basis. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2023. An entity will apply the amendments in this ASU through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (that is, a modified-retrospective approach). In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, which aligns the implementation date for nonpublic entities’ annual financial statements with the implementation date for their interim financial statements and clarifies the scope of the guidance in the amendments in ASU 2016‑13. In April 2019, the FASB issued ASU 2019-04, Codification Improvements to Topic 326, Financial Instruments-Credit Losses, Topic 815, Derivatives and Hedging, and Topic 825, Financial Instruments. ASU 2019-04 clarifies or addresses stakeholders’ specific issues about certain aspects of the amendments in Update 2016-13 related to measuring the allowance for loan losses under the new guidance. The effective dates and transition requirements for the amendments related to this Update are the same as the effective dates and transition requirements in Update 2016-13. In November 2019, the FASB issued ASU 2019-11, Codification Improvements to Topic 326, Financial Instruments Credit Losses clarifying certain amendments to various provisions of ASU No. 2016-13 relating to (1) purchased financial assets with credit deterioration, (2) financial assets secured by collateral maintenance agreements, (3) transition relief for troubled debt restructurings, and (4) disclosure relief when the practical expedient for accrued interest receivables is applied. The initial adjustment will not be reported in earnings and therefore will not have any material impact on our consolidated results of operations, but it is expected that it will have an impact on our consolidated financial position at the date of adoption of this ASU. At this time, we have not calculated the estimated impact that this ASU will have on our allowance for loan losses, however, we anticipate it will have a significant impact on the methodology process we utilize to calculate the allowance. Alternative methodologies are currently being considered. Data requirements and integrity are being reviewed and enhancements incorporated into standard processes. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In August 2018, the FASB has issued ASU 2018‑14, “Compensation—Retirement Benefits—Defined Benefit Plans—General (Subtopic 715‑20): Disclosure Framework—Changes to the Disclosure Requirements for Defined Benefit Plans”, that applies to all employers that sponsor defined benefit pension or other postretirement plans. The amendments modify the disclosure requirements for employers that sponsor defined benefit pension or other postretirement plans. The following disclosure requirements were removed from Subtopic 715‑20: (1) the amounts in accumulated other comprehensive income expected to be recognized as components of net periodic benefit cost over the next fiscal year; (2) the amount and timing of plan assets expected to be returned to the employer; (3) the disclosures related to the June 2001 amendments to the Japanese Welfare Pension Insurance Law; related party disclosures about the amount of future annual benefits covered by insurance and annuity contracts and significant transactions between the employer or related parties and the plan; (4) for nonpublic entities, the reconciliation of the opening balances to the closing balances of plan assets measured on a recurring basis in Level 3 of the fair value hierarchy. However, nonpublic entities will be required to disclose separately the amounts of transfers into and out of Level 3 of the fair value hierarchy and purchases of Level 3 plan assets; and (5) for public entities, the effects of a one-percentage-point change in assumed health care cost trend rates on the (a) aggregate of the service and interest cost components of net periodic benefit costs and (b) benefit obligation for postretirement health care benefits. The following disclosure requirements were added to Subtopic 715‑20: (1) the weighted-average interest crediting rates for cash balance plans and other plans with promised interest crediting rates; and (2) an explanation of the reasons for significant gains and losses related to changes in the benefit obligation for the period. The amendments also clarify the disclosure requirements in paragraph 715‑20‑50‑3, which state that the following information for defined benefit pension plans should be disclosed: (1) the projected benefit obligation (PBO) and fair value of plan assets for plans with PBOs in excess of plan assets; and (2) the accumulated benefit obligation (ABO) and fair value of plan assets for plans with ABOs in excess of plan assets. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2021. Early adoption is permitted for all entities. The adoption of this guidance is not expected to have a material impact on our consolidated results of operations or financial position. In December 2019, the FASB issued ASU 2019-12, Income Taxes Topic 740. This update simplifies and improves accounting for income taxes by eliminating certain exceptions to the general rules and clarifying or amending other current guidance. The scope of FASB ASC Subtopic 740-10, Income Taxes -Overall, has been amended to require that, if a franchise (or similar tax) is partially based on income, (1) deferred tax assets and liabilities should be recognized and accounted for pursuant to FASB ASC 740, as should the amount of current tax expense that is based on income, and (2) any incremental amount incurred should be recorded as a non-income-based tax. Note that under the amended guidance, the effect of potentially paying a non-income-based tax in future years need not be considered in evaluating the realizability of deferred tax assets. The amendments in this ASU are effective for the Company for the fiscal year beginning July 1, 2022. Early adoption is permitted, including adoption in an interim period. If early adoption is elected, all of the amended guidance must be adopted in the same period. If early adoption is initially applied in an interim period, any adjustments should be reflected as of the beginning of the annual period that includes that interim period. The Company is currently evaluating the potential impact on adoption of this ASU on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848). The amendments in this update provide optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The amendments in this update apply only to contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform. The amendments (1) apply to contract modifications that replace a reference rate affected by reference rate reform, (2) provide exceptions to existing guidance related to changes to the critical terms of a hedging relationship due to reference rate reform (3) provide optional expedients for fair value hedging relationships, cash flow hedging relationships, and net investment hedging relationships, and (4) provide a onetime election to sell, transfer, or both sell and transfer debt securities classified as held to maturity that reference a rate affected by reference rate reform and that are classified as held to maturity before January 1, 2020. The amendments in this ASU are effective for all entities as of March 12, 2020 through December 31, 2022. The amendments for contract modifications can be elected to be applied as of any date from the beginning of an interim period that includes or is subsequent to March 12, 2020, or prospectively from a date within an interim period that includes or is subsequent to March 12, 2020. The amendments for existing hedging relationships can be elected to be applied as of the beginning of the interim period that includes March 12, 2020 and to new eligible hedging relationships entered into after the beginning of the interim period that includes March 12, 2020. The Company is currently evaluating the potential impact on adoption of this guidance on our consolidated financial statements. |
RESTATEMENT OF THE CONSOLIDAT_2
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMETNS (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS | |
Schedule of the effects of the Restatement on the Company's consolidated financial statements | The table below shows the effects of the Restatement on the Company’s consolidated statement of operations, consolidated statement of comprehensive loss and consolidated statement of cash flows for the quarter ended September 30, 2019 (in thousands, except for per share data). For the Three Months Ended September 30, 2019 As Previously Restatement Reported Adjustments As Restated Consolidated Statement of Operations Net interest income $ 13,258 $ — $ 13,258 Provision for loan losses 16,370 (15,800) 570 Net interest income (loss) after provision for loan losses (3,112) 15,800 12,688 Total noninterest income 3,969 — 3,969 Total noninterest expense 18,231 — 18,231 Loss before income taxes (17,374) 15,800 (1,574) Income tax benefit (4,690) 4,093 (597) Net loss (12,684) 11,707 (977) Loss per common share: Basic $ (0.51) $ 0.47 $ (0.04) Diluted $ (0.51) $ 0.47 $ (0.04) Consolidated Statement of Comprehensive Loss: Net loss $ (12,684) $ 11,707 $ (977) Comprehensive loss (12,443) 11,707 (736) Consolidated Statement of Cash Flows: Net loss $ (12,684) $ 11,707 $ (977) Adjustments to reconcile net loss to net cash provided by operating activities: Provision for loan losses 16,370 (15,800) 570 Increase in other assets (11,489) 4,093 (7,396) |
INVESTMENT SECURITIES (Tables)
INVESTMENT SECURITIES (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
INVESTMENT SECURITIES | |
Summary of amortized cost and estimated fair value of securities | The amortized cost and estimated fair value of securities are as follows (dollars in thousands): September 30, 2020 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 61,700 $ 90 $ — $ 61,790 Municipal obligations 19,107 10 — 19,117 Other debt securities 538 363 (47) 854 Total available for sale securities $ 81,345 $ 463 $ (47) $ 81,761 Securities held to maturity: Municipal obligations $ 3,639 $ 79 $ — $ 3,718 Corporate debt securities 7,000 — (21) 6,979 Total held to maturity securities $ 10,639 $ 79 $ (21) $ 10,697 Equity securities: Preferred stock $ 6,007 $ 34 $ (477) $ 5,564 Common stock 2,807 1,321 (575) 3,553 Total equity securities $ 8,814 $ 1,355 $ (1,052) $ 9,117 June 30, 2020 Gross Gross Amortized Unrealized Unrealized Estimated Cost Gains Losses Fair Value Securities available for sale: U.S. Government and agency obligations $ 61,299 $ 215 $ (3) $ 61,511 Municipal obligations 13,381 6 (2) 13,385 Other debt securities 573 347 (48) 872 Total available for sale securities $ 75,253 $ 568 $ (53) $ 75,768 Securities held to maturity: Municipal obligations $ 4,822 $ 95 $ — $ 4,917 Corporate debt securities 2,000 — — 2,000 Total held to maturity securities $ 6,822 $ 95 $ — $ 6,917 Equity securities: Preferred stock $ 6,007 $ 29 $ (980) $ 5,056 Common stock 2,807 1,204 (534) 3,477 Total equity securities $ 8,814 $ 1,233 $ (1,514) $ 8,533 |
Summary of estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position | The estimated fair value and gross unrealized losses aggregated by security category and length of time such securities have been in a continuous unrealized loss position, is summarized as follows (dollars in thousands): September 30, 2020 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Government and agency obligations (1) $ 10,247 $ — $ — $ — $ 10,247 $ — Other debt securities 65 (2) 131 (45) 196 (47) $ 10,312 $ (2) $ 131 $ (45) $ 10,443 $ (47) Securities held to maturity: Corporate debt securities $ 6,979 $ (21) $ — $ — $ 6,979 $ (21) $ 6,979 $ (21) $ — $ — $ 6,979 $ (21) (1) Unrealized losses on these securities are less than $500. June 30, 2020 Less than 12 Months 12 Months or Longer Total Estimated Unrealized Estimated Unrealized Estimated Unrealized Fair Value Losses Fair Value Losses Fair Value Losses Securities available for sale: U.S. Government and agency obligations $ 10,195 $ (3) $ — $ — $ 10,195 $ (3) Municipal obligations 3,609 (2) — — 3,609 (2) Other debt securities 59 (2) 143 (46) 202 (48) $ 13,863 $ (7) $ 143 $ (46) $ 14,006 $ (53) |
Summary of rollforward of the credit losses recognized in earnings | The table below presents a rollforward of the credit losses recognized in earnings (dollars in thousands): Balance, July 1, 2020 $ 1,214 Reductions for amounts realized for securities transactions — Balance, September 30, 2020 $ 1,214 |
Summary of fair value of debt securities and carrying amount, if different, by contractual maturity | The fair value of debt securities and carrying amount, if different, by contractual maturity were as follows (dollars in thousands). Securities not due at a single maturity date are shown separately. September 30, 2020 Amortized Estimated Cost Fair Value Securities available for sale: Due in one year or less $ 58,869 $ 58,961 Due after one to five years 21,938 21,946 Other debt securities 538 854 $ 81,345 $ 81,761 Securities held to maturity: Due in one year or less $ 2,513 $ 2,592 Due after one to five years 1,031 1,031 Due after five to ten years 7,095 7,074 $ 10,639 $ 10,697 |
NET LOANS RECEIVABLE (Tables)
NET LOANS RECEIVABLE (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
NET LOANS RECEIVABLE | |
Schedule of net loans receivable | A summary of net loans receivable is as follows (dollars in thousands): September 30, 2020 June 30, 2020 Commercial: Real estate $ 443,295 $ 450,452 Commercial and industrial 221,808 237,223 Construction 105,249 91,805 Total commercial 770,352 779,480 Residential mortgages 281,697 279,960 Home equity loans and lines 78,925 80,345 Consumer 29,787 30,860 1,160,761 1,170,645 Net deferred loan costs 944 605 Allowance for loan losses (23,610) (22,851) Net loans receivable $ 1,138,095 $ 1,148,399 |
Schedule of activity in allowance for loan losses by portfolio segment | The following tables present the activity in the allowance for loan losses by portfolio segment (dollars in thousands): For the Three Months Ended September 30, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 17,570 $ 3,484 $ 1,303 $ 494 $ 22,851 Provisions charged to operations 730 (8) 10 18 750 Loans charged off — — — (26) (26) Recoveries on loans charged off 34 — — 1 35 Allowance for loan losses at end of period $ 18,334 $ 3,476 $ 1,313 $ 487 $ 23,610 For the Three Months Ended September 30, 2019 (As Restated) Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses at beginning of period $ 11,057 $ 2,360 $ 813 $ 269 $ 14,499 Provisions charged to operations 355 38 36 141 570 Loans charged off (4) (19) — (57) (80) Recoveries on loans charged off — — 1 9 10 Allowance for loan losses at end of period $ 11,408 $ 2,379 $ 850 $ 362 $ 14,999 |
Schedule of balance in allowance for loan losses and recorded investment | The following tables present the balance in the allowance for loan losses and the recorded investment in loans by portfolio segment and based on impairment method (dollars in thousands): September 30, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 2,410 $ — $ — $ — $ 2,410 Related to loans collectively evaluated for impairment 15,924 3,476 1,313 487 21,200 Ending balance $ 18,334 $ 3,476 $ 1,313 $ 487 $ 23,610 Loans: Individually evaluated for impairment $ 9,843 $ — $ — $ — $ 9,843 Loans collectively evaluated for impairment 760,509 281,697 78,925 29,787 1,150,918 Ending balance $ 770,352 $ 281,697 $ 78,925 $ 29,787 $ 1,160,761 June 30, 2020 Residential Commercial Mortgages Home Equity Consumer Total Allowance for loan losses: Related to loans individually evaluated for impairment $ 929 $ — $ — $ — $ 929 Related to loans collectively evaluated for impairment 16,641 3,484 1,303 494 21,922 Ending balance $ 17,570 $ 3,484 $ 1,303 $ 494 $ 22,851 Loans: Individually evaluated for impairment $ 8,407 $ — $ — $ — $ 8,407 Loans collectively evaluated for impairment 771,073 279,960 80,345 30,860 1,162,238 Ending balance $ 779,480 $ 279,960 $ 80,345 $ 30,860 $ 1,170,645 |
Schedule of impaired loans by class | The following tables present information related to impaired loans by class as of (dollars in thousands): For the Three Months Ended September 30, 2020 September 30, 2020 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 5,387 $ 5,292 $ — $ 5,401 $ 25 Commercial and industrial 46 42 — 46 — Construction 1,319 1,319 — 1,319 — Subtotal 6,752 6,653 — 6,766 25 With an allowance recorded: Commercial: Real estate 237 218 21 235 — Commercial and industrial 2,987 2,972 2,389 2,988 19 Subtotal 3,224 3,190 2,410 3,223 19 Total $ 9,976 $ 9,843 $ 2,410 $ 9,989 $ 44 For the Year Ended June 30, 2020 June 30, 2020 Unpaid Allowance for Average Interest Principal Recorded Loan Losses Recorded Income Balance Investment Allocated Investment Recognized With no related allowance recorded: Commercial: Real estate $ 5,417 $ 5,342 $ — $ 5,203 $ 265 Commercial and industrial 46 42 — 46 — Construction 1,319 1,319 — 1,320 — Subtotal 6,782 6,703 — 6,569 265 With an allowance recorded: Commercial: Real estate 233 221 25 234 — Commercial and industrial 1,494 1,483 904 1,513 88 Subtotal 1,727 1,704 929 1,747 88 Total $ 8,509 $ 8,407 $ 929 $ 8,316 $ 353 |
Schedule of recorded investment in nonaccrual and loans past due over 90 days still on accrual | The following table presents the recorded investment in nonaccrual and loans past due over 90 days still on accrual by class of loans (dollars in thousands): September 30, June 30, 2020 2020 Past Due Past Due 90 Days 90 Days Still on Still on Nonaccrual Accrual Nonaccrual Accrual Commercial: Real estate $ 3,311 $ 548 $ 3,364 $ 143 Commercial and industrial 1,595 37 95 1,455 Construction 1,319 — 1,319 — Residential mortgages 5,410 — 4,807 — Home equity loans and lines 2,191 — 1,865 — Consumer 199 17 210 12 $ 14,025 $ 602 $ 11,660 $ 1,610 |
Schedule of aging of recorded investment | The following tables present the aging of the recorded investment in loans by class of loans as of (dollars in thousands): September 30, 2020 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 18 $ 1,952 $ 2,673 $ 4,643 $ 438,652 $ 443,295 Commercial and industrial — 50 1,632 1,682 220,126 221,808 Construction — — 1,319 1,319 103,930 105,249 Residential mortgages 484 556 2,822 3,862 277,835 281,697 Home equity loans and lines 1,443 368 1,573 3,384 75,541 78,925 Consumer 63 15 17 95 29,692 29,787 Total $ 2,008 $ 2,941 $ 10,036 $ 14,985 $ 1,145,776 $ 1,160,761 June 30, 2020 30 - 59 60 - 89 90 or more Days Days Days Total Loans Not Past Due Past Due Past Due Past Due Past Due Total Commercial: Real estate $ 23 $ 211 $ 2,270 $ 2,504 $ 447,948 $ 450,452 Commercial and industrial — 26 1,551 1,577 235,646 237,223 Construction — — 1,319 1,319 90,486 91,805 Residential mortgages 2,666 1,272 3,505 7,443 272,517 279,960 Home equity loans and lines 1,217 1,259 1,383 3,859 76,486 80,345 Consumer 39 4 12 55 30,805 30,860 Total $ 3,945 $ 2,772 $ 10,040 $ 16,757 $ 1,153,888 $ 1,170,645 |
Commercial | |
NET LOANS RECEIVABLE | |
Schedule of loans by risk category | The following tables present commercial loans summarized by class of loans and the risk category (dollars in thousands): September 30, 2020 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 411,547 $ 15,411 $ 16,337 $ — $ 443,295 Commercial and industrial 206,124 6,301 9,330 53 221,808 Construction 103,329 — 1,920 — 105,249 $ 721,000 $ 21,712 $ 27,587 $ 53 $ 770,352 June 30, 2020 Special Pass Mention Substandard Doubtful Total Commercial Real estate $ 433,948 $ 106 $ 16,398 $ — $ 450,452 Commercial and industrial 222,777 6,393 8,000 53 237,223 Construction 89,869 — 1,936 — 91,805 $ 746,594 $ 6,499 $ 26,334 $ 53 $ 779,480 |
DERIVATIVES (Tables)
DERIVATIVES (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
DERIVATIVES | |
Schedule of offsetting of derivative assets and liabilities | The estimated fair value of derivatives not designated as hedging instruments are as follows (dollars in thousands): September 30, 2020 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 41,293 $ 41,293 Less: master netting arrangements — — Less: cash collateral applied — (41,293) Net amount $ 41,293 $ — June 30, 2020 Derivative Derivative Assets Liabilities Gross interest rate swaps $ 42,922 $ 42,922 Less: master netting arrangements — — Less: cash collateral applied — (42,922) Net amount $ 42,922 $ — |
OTHER COMPREHENSIVE INCOME (L_2
OTHER COMPREHENSIVE INCOME (LOSS) (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
OTHER COMPREHENSIVE INCOME (LOSS) | |
Schedule of changes in components of accumulated other comprehensive income (loss), net of tax | The balances and changes in the components of accumulated other comprehensive income (loss), net of tax are as follows (dollars in thousands): For the Three Months Ended September 30, Accumulated Unrealized Other Gains/Losses Defined Comprehensive on Securities Benefit Plans Loss 2020: Accumulated other comprehensive loss as of July 1, 2020 $ 381 (17,751) $ (17,370) Other comprehensive income (loss) before reclassifications (72) — (72) Accumulated other comprehensive income (loss) as of September 30, 2020 $ 309 (17,751) $ (17,442) 2019: Accumulated other comprehensive income (loss) as of July 1, 2019 $ 338 (11,441) $ (11,103) Other comprehensive income before reclassifications 241 — 241 Reclassification for change in accounting principle (1) 116 — 116 Accumulated other comprehensive income (loss) as of September 30, 2019 $ 695 (11,441) $ (10,746) (1) Adoption of ASU 2016-01 – cumulative effect of change in measurement of equity securities. |
Schedule of income tax expense (benefit) allocated to component of other comprehensive income (loss) | The amounts of income tax expense (benefit) allocated to each component of other comprehensive income (loss) were as follows (dollars in thousands): For the Three Months Ended September 30, 2020 2019 Unrealized gains/losses on securities: Unrealized holdings (losses) gains arising during the period $ (27) $ 84 Reclassification adjustment for gains included in net income — — (27) 84 Defined benefit plans: Change in funded status — — Reclassification adjustment for accretion of net prior service cost — — Reclassification adjustment for amortization of net actuarial loss — — — — $ (27) $ 84 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
Pension plan | |
EMPLOYEE BENEFIT PLANS | |
Summary of net periodic cost included in the Company’s consolidated statements of income | Net periodic pension cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended September 30, 2020 2019 Service cost $ 695 $ 516 Interest cost 458 483 Expected return on plan assets (836) (927) Amortization of net actuarial loss 433 272 Net periodic pension cost $ 750 $ 344 |
Post-retirement benefit plan | |
EMPLOYEE BENEFIT PLANS | |
Summary of net periodic cost included in the Company’s consolidated statements of income | Net periodic post-retirement benefit cost included in the Company’s consolidated statements of operations included the following components (dollars in thousands): For the Three Months Ended September 30, 2020 2019 Service cost $ 11 $ 9 Interest cost 18 16 Recognized actuarial loss 1 1 Net periodic post-retirement benefit cost $ 30 $ 26 |
Schedule of shares held by the ESOP | Shares held by the ESOP include the following: As of September 30, 2020 2019 Allocated 50,916 — Committed to be allocated 38,187 25,458 Unallocated 929,222 992,867 Total Shares 1,018,325 1,018,325 |
COMMITMENTS AND CONTINGENT LI_2
COMMITMENTS AND CONTINGENT LIABILITIES (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
COMMITMENTS AND CONTINGENT LIABILITIES | |
Schedule of contractual amount of exposure to off-balance-sheet risk | September 30, 2020 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 51,367 $ 225,379 $ 276,746 Standby letters of credit — 29,025 29,025 $ 51,367 $ 254,404 $ 305,771 June 30, 2020 Fixed Rate Variable Rate Total Financial instruments whose contract amounts represent credit risk (including unused lines of credit and unadvanced loan funds): Commitments to extend credit $ 41,573 $ 232,137 $ 273,710 Standby letters of credit — 30,654 30,654 $ 41,573 $ 262,791 $ 304,364 |
FAIR VALUE (Tables)
FAIR VALUE (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
FAIR VALUE | |
Schedule of financial assets and financial liabilities measured at fair value on a recurring basis | Assets and liabilities measured at fair value on a recurring basis are summarized below (dollars in thousands): Fair Value Measurements at September 30, 2020 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 61,790 $ 61,790 $ — $ — Municipal obligations 19,117 — 19,117 — Other debt securities 854 — 854 Total debt securities 81,761 61,790 19,971 — Equity securities 9,117 5,770 3,347 — Derivative assets 41,293 — 41,293 — Total $ 132,171 $ 67,560 $ 64,611 $ — Fair Value Measurements at June 30, 2020 Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) Assets: Available for sale securities: U.S. Government and agency obligations $ 61,511 $ 61,511 $ — $ — Municipal obligations 13,385 — 13,385 — Other debt securities 872 — 872 Total debt securities 75,768 61,511 14,257 — Equity securities 8,533 5,528 3,005 — Derivative assets 42,922 — 42,922 — Total $ 127,223 $ 67,039 $ 60,184 $ — |
Schedule of assets and liabilities measured at fair value on a non-recurring basis | Assets and liabilities measured at fair value on a non-recurring basis are summarized below (dollars in thousands): Fair Value Measurements Using Significant Quoted Prices in Other Significant Active Markets for Observable Unobservable Identical Assets Inputs Inputs Fair Value (Level 1) (Level 2) (Level 3) September 30, 2020 Impaired loans: Commercial loans $ 781 $ — $ — $ 781 OREO 161 — — 161 June 30, 2020 Impaired loans: Commercial loans $ 775 $ — $ — $ 775 OREO 260 — — 260 |
Schedule of carrying and estimated fair values of financial assets and liabilities | The carrying and estimated fair values of financial assets and liabilities were as follows (dollars in thousands): September 30, 2020 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 262,158 $ 262,158 $ 262,158 $ — $ — Securities available for sale 81,761 81,761 61,790 19,971 — Securities held to maturity 10,639 10,697 — 10,697 — Equity securities 9,117 9,117 5,770 3,347 — FHLBNY stock 1,010 1,010 — 1,010 — Net loans receivable 1,138,095 1,166,600 — — 1,166,600 Accrued interest receivable 4,118 4,118 — 4,118 — Derivative assets 41,293 41,293 — 41,293 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,273,105 $ 1,273,105 $ — $ 1,273,105 $ — Time deposits 108,086 109,218 — 109,218 — Mortgagors’ escrow deposits 2,634 2,634 — 2,634 — Accrued interest payable 24 24 — 24 — June 30, 2020 Fair Value Measurements Using Significant Active Markets Other Significant for Identical Observable Unobservable Carrying Estimated Assets Inputs Inputs Amount Fair Value (Level 1) (Level 2) (Level 3) Financial assets Cash and cash equivalents $ 156,903 $ 156,903 $ 156,903 $ — $ — Securities available for sale 75,768 75,768 61,511 14,257 — Securities held to maturity 6,822 6,917 — 6,917 — Equity securities 8,533 8,533 5,528 3,005 — FHLBNY stock 1,010 1,010 — 1,010 — Net loans receivable 1,148,399 1,180,002 — — 1,180,002 Accrued interest receivable 3,467 3,467 — 3,467 — Derivative assets 42,922 42,922 — 42,922 — Financial liabilities Deposits Savings, money market, and demand accounts $ 1,150,591 $ 1,150,591 $ — $ 1,150,591 $ — Time deposits 119,559 120,921 — 120,921 — Mortgagors’ escrow deposits 6,044 6,044 — 6,044 — Accrued interest payable 35 35 — 35 — |
REVENUE RECOGNITION (Tables)
REVENUE RECOGNITION (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
REVENUE RECOGNITION | |
Schedule of revenue recognition | For the Three Months Ended September 30, 2020 2019 (dollars in thousands) Non-interest Income In scope Insurance services $ 669 $ 675 Wealth management services 685 679 Service charges on deposit accounts 619 915 Card services income 761 731 Other 61 64 Non-interest income in scope 2,795 3,064 Non-interest income out of scope 733 905 Total non-interest income $ 3,528 $ 3,969 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Sep. 30, 2020 | |
EARNINGS PER SHARE | |
Schedule of earnings per share | For the Three Months Ended September 30, 2020 2019 (As Restated) (Dollars in thousands, except share and per share amounts) Net income (loss) applicable to common stock $ 1,394 $ (977) Average number of common shares outstanding 25,977,679 25,977,679 Less: Average unallocated ESOP shares 935,587 992,867 Average number of common shares outstanding used to calculate basic and diluted earnings per common share 25,042,092 24,984,812 Net earnings (loss) per common share: Basic $ 0.06 $ (0.04) Diluted $ 0.06 $ (0.04) |
NATURE OF OPERATIONS - Other (D
NATURE OF OPERATIONS - Other (Details) | 3 Months Ended |
Sep. 30, 2020Office | |
NATURE OF OPERATIONS | |
Number of offices in Capital Region of New York | 22 |
NATURE OF OPERATIONS - Mutual H
NATURE OF OPERATIONS - Mutual Holding Company Reorganization and Minority Stock Issuance (Details) - USD ($) | Jul. 17, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Schedule of Capitalization, Equity [Line Items] | |||
Net proceeds from sale of stock | $ 109,055,000 | ||
Stock contributed to Pioneer Bank Charitable Foundation (in shares) | 519,554 | ||
Cash contributed to Pioneer Bank Charitable Foundation | $ 250,000 | ||
Initial Public Offering | |||
Schedule of Capitalization, Equity [Line Items] | |||
Sale of stock (in shares) | 11,170,402 | ||
Share price | $ 10 | ||
Net proceeds from sale of stock | $ 109,100,000 | ||
Pioneer Bank ESOP | |||
Schedule of Capitalization, Equity [Line Items] | |||
Numbers of shares owned by ESOP | 1,018,325 | 1,018,325 | |
Pioneer Bancorp, MHC | |||
Schedule of Capitalization, Equity [Line Items] | |||
Sale of stock (in shares) | 14,287,723 | ||
Ownership interest (as a percent) | 55.00% |
RESTATEMENT OF THE CONSOLIDAT_3
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS - Other (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS | ||
Provision for loan losses | $ (750) | $ (570) |
Restatement Adjustment | ||
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS | ||
Provision for loan losses | $ 15,800 |
RESTATEMENT OF THE CONSOLIDAT_4
RESTATEMENT OF THE CONSOLIDATED FINANCIAL STATEMENTS - Effects of the Restatement (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Consolidated Statement of Operations | ||
Net interest income | $ 10,350 | $ 13,258 |
Provision for loan losses | 750 | 570 |
Net interest income (loss) after provision for loan losses | 9,600 | 12,688 |
Total noninterest income | 3,528 | 3,969 |
Total noninterest expense | 11,431 | 18,231 |
Income before income taxes | 1,697 | (1,574) |
Income tax expense (benefit) | 303 | (597) |
Net income (loss) | $ 1,394 | $ (977) |
Earnings per common share: | ||
Basic | $ 0.06 | $ (0.04) |
Diluted | $ 0.06 | $ (0.04) |
Consolidated Statement of Comprehensive Loss | ||
Net income (loss) | $ 1,394 | $ (977) |
Comprehensive income (loss) | 1,322 | (736) |
Consolidated Statement of Cash Flows | ||
Net income (loss) | 1,394 | (977) |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Provision for loan losses | 750 | 570 |
Increase in other assets | $ 2,826 | (7,396) |
As Previously Reported | ||
Consolidated Statement of Operations | ||
Net interest income | 13,258 | |
Provision for loan losses | 16,370 | |
Net interest income (loss) after provision for loan losses | (3,112) | |
Total noninterest income | 3,969 | |
Total noninterest expense | 18,231 | |
Income before income taxes | (17,374) | |
Income tax expense (benefit) | (4,690) | |
Net income (loss) | $ (12,684) | |
Earnings per common share: | ||
Basic | $ (0.51) | |
Diluted | $ (0.51) | |
Consolidated Statement of Comprehensive Loss | ||
Net income (loss) | $ (12,684) | |
Comprehensive income (loss) | (12,443) | |
Consolidated Statement of Cash Flows | ||
Net income (loss) | (12,684) | |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Provision for loan losses | 16,370 | |
Increase in other assets | (11,489) | |
Restatement Adjustment | ||
Consolidated Statement of Operations | ||
Provision for loan losses | (15,800) | |
Net interest income (loss) after provision for loan losses | 15,800 | |
Income before income taxes | 15,800 | |
Income tax expense (benefit) | 4,093 | |
Net income (loss) | $ 11,707 | |
Earnings per common share: | ||
Basic | $ 0.47 | |
Diluted | $ 0.47 | |
Consolidated Statement of Comprehensive Loss | ||
Net income (loss) | $ 11,707 | |
Comprehensive income (loss) | 11,707 | |
Consolidated Statement of Cash Flows | ||
Net income (loss) | 11,707 | |
Adjustments to reconcile net loss to cash provided by operating activities: | ||
Provision for loan losses | (15,800) | |
Increase in other assets | $ 4,093 |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Correction of Immaterial Error (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | |
Correction of an Immaterial Error | |||
Net gain (loss) on equity securities | $ 584,000 | $ (82,000) | |
Income tax benefit | (303,000) | 597,000 | |
Retained earnings | (141,128,000) | $ (139,734,000) | |
Accumulated other comprehensive loss | (17,442,000) | (17,370,000) | |
Securities available for sale | (81,761,000) | (75,768,000) | |
Equity securities | $ 9,117,000 | 8,533,000 | |
Restatement Adjustment | |||
Correction of an Immaterial Error | |||
Income tax benefit | $ (4,093,000) | ||
Restatement Adjustment | Error in Adoption of ASU 2016-01 | |||
Correction of an Immaterial Error | |||
Net gain (loss) on equity securities | 16,000 | ||
Income tax benefit | 4,000 | ||
Unrealized holding gains, net of tax, arising during the period | 12,000 | ||
Retained earnings | 702,000 | ||
Accumulated other comprehensive loss | 702,000 | ||
Securities available for sale | 5,100,000 | ||
Equity securities | $ 5,100,000 |
INVESTMENT SECURITIES - Amortiz
INVESTMENT SECURITIES - Amortized Cost and Estimated Fair Value (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Jun. 30, 2020 | |
Securities available for sale | ||
Amortized Cost | $ 81,345 | $ 75,253 |
Gross Unrealized Gains | 463 | 568 |
Gross Unrealized Losses | (47) | (53) |
Estimated Fair Value | 81,761 | 75,768 |
Securities held to maturity: | ||
Amortized Cost | 10,639 | 6,822 |
Gross Unrealized Gains | 79 | 95 |
Gross Unrealized Losses | (21) | |
Estimated fair value | 10,697 | 6,917 |
Equity securities | ||
Amortized Cost | 8,814 | 8,814 |
Gross Unrealized Gains | 1,355 | 1,233 |
Gross Unrealized Losses | (1,052) | (1,514) |
Equity securities, at fair value | 9,117 | 8,533 |
U.S. Government and agency obligations | ||
Securities available for sale | ||
Amortized Cost | 61,700 | 61,299 |
Gross Unrealized Gains | 90 | 215 |
Gross Unrealized Losses | (3) | |
Estimated Fair Value | 61,790 | 61,511 |
Municipal obligations | ||
Securities available for sale | ||
Amortized Cost | 19,107 | 13,381 |
Gross Unrealized Gains | 10 | 6 |
Gross Unrealized Losses | (2) | |
Estimated Fair Value | 19,117 | 13,385 |
Securities held to maturity: | ||
Amortized Cost | 3,639 | 4,822 |
Gross Unrealized Gains | 79 | 95 |
Estimated fair value | 3,718 | 4,917 |
Other debt securities | ||
Securities available for sale | ||
Amortized Cost | 538 | 573 |
Gross Unrealized Gains | 363 | 347 |
Gross Unrealized Losses | (47) | (48) |
Estimated Fair Value | 854 | 872 |
Corporate debt securities | ||
Securities held to maturity: | ||
Amortized Cost | 7,000 | 2,000 |
Gross Unrealized Losses | (21) | |
Estimated fair value | 6,979 | 2,000 |
Preferred stock | ||
Equity securities | ||
Amortized Cost | 6,007 | 6,007 |
Gross Unrealized Gains | 34 | 29 |
Gross Unrealized Losses | (477) | (980) |
Equity securities, at fair value | 5,564 | 5,056 |
Common Stock | ||
Equity securities | ||
Amortized Cost | 2,807 | 2,807 |
Gross Unrealized Gains | 1,321 | 1,204 |
Gross Unrealized Losses | (575) | (534) |
Equity securities, at fair value | $ 3,553 | $ 3,477 |
INVESTMENT SECURITIES - Estimat
INVESTMENT SECURITIES - Estimated Fair Value and Gross Unrealized Losses (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
Securities available for sale, Estimated Fair Value | ||
Less than 12 Months | $ 10,312 | $ 13,863 |
12 Months or Longer | 131 | 143 |
Total | 10,443 | 14,006 |
Securities held to maturity, Estimated Fair Value | ||
Less than 12 Months | 6,979 | |
Total | 6,979 | |
Securities available for sale, Unrealized Losses | ||
Less than 12 Months | (2) | (7) |
12 Months or Longer | (45) | (46) |
Total | (47) | (53) |
Securities held to maturity, Unrealized Losses | ||
Less than 12 Months | (21) | |
Total | (21) | |
U.S. Government and agency obligations | ||
Securities available for sale, Estimated Fair Value | ||
Less than 12 Months | 10,247 | 10,195 |
Total | 10,247 | 10,195 |
Securities available for sale, Unrealized Losses | ||
Less than 12 Months | (3) | |
Total | (3) | |
Municipal obligations | ||
Securities available for sale, Estimated Fair Value | ||
Less than 12 Months | 3,609 | |
Total | 3,609 | |
Securities available for sale, Unrealized Losses | ||
Less than 12 Months | (2) | |
Total | (2) | |
Other debt securities | ||
Securities available for sale, Estimated Fair Value | ||
Less than 12 Months | 65 | 59 |
12 Months or Longer | 131 | 143 |
Total | 196 | 202 |
Securities available for sale, Unrealized Losses | ||
Less than 12 Months | (2) | (2) |
12 Months or Longer | (45) | (46) |
Total | (47) | $ (48) |
Corporate debt securities | ||
Securities held to maturity, Estimated Fair Value | ||
Less than 12 Months | 6,979 | |
Total | 6,979 | |
Securities held to maturity, Unrealized Losses | ||
Less than 12 Months | (21) | |
Total | $ (21) |
INVESTMENT SECURITIES - Other (
INVESTMENT SECURITIES - Other (Details) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020USD ($)security | Jun. 30, 2020USD ($) | |
INVESTMENT SECURITIES | ||
Securities with unrealized losses | security | 56 | |
Securities available for sale, amortized cost | $ 81,345 | $ 75,253 |
Non-investment grade | ||
INVESTMENT SECURITIES | ||
Number of securities evaluated for impairment | security | 55 | |
Securities available for sale, amortized cost | $ 400 | |
Securities with remaining par value | $ 1,800 |
INVESTMENT SECURITIES - Rollfor
INVESTMENT SECURITIES - Rollforward of the credit losses (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Rollforward of the credit losses recognized in earnings | |
Balance at the beginning or period | $ 1,214 |
Balance at the end of period | $ 1,214 |
INVESTMENT SECURITIES - Contrac
INVESTMENT SECURITIES - Contractual Maturity (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
Securities available for sale, amortized cost | ||
Due in one year or less | $ 58,869 | |
Due after one to five years | 21,938 | |
Total Amortized Cost | 81,345 | $ 75,253 |
Securities available for sale, estimated fair value | ||
Due in one year or less | 58,961 | |
Due after one to five years | 21,946 | |
Estimated Fair Value | 81,761 | 75,768 |
Securities held to maturity, amortized cost | ||
Due in one year or less | 2,513 | |
Due after one to five years | 1,031 | |
Due after five to ten years | 7,095 | |
Amortized cost | 10,639 | 6,822 |
Securities held to maturity, estimated fair value | ||
Due in one year or less | 2,592 | |
Due after one to five years | 1,031 | |
Due after five to ten years | 7,074 | |
Estimated fair value | 10,697 | 6,917 |
Other debt securities | ||
Securities available for sale, amortized cost | ||
Other debt securities | 538 | |
Total Amortized Cost | 538 | 573 |
Securities available for sale, estimated fair value | ||
Without single maturity date | 854 | |
Estimated Fair Value | $ 854 | $ 872 |
INVESTMENT SECURITIES - Sales o
INVESTMENT SECURITIES - Sales of Securities, Realized Gain/Losses (Details) - USD ($) | 3 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2020 | |
INVESTMENT SECURITIES | |||
Proceeds from the sale of securities available for sale | $ 0 | $ 0 | |
Proceeds from the sales of securities held to maturity | 0 | $ 0 | |
Carrying value of available for sale securities pledged to secure FHLBNY advances and municipal deposits | $ 77,200,000 | $ 65,000,000 |
NET LOANS RECEIVABLE - Summary
NET LOANS RECEIVABLE - Summary of Net Loans Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 |
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | $ 1,160,761 | $ 1,170,645 | ||
Net deferred loan costs | 944 | 605 | ||
Allowance for loan losses | (23,610) | (22,851) | $ (14,999) | $ (14,499) |
Net Loans Receivable | 1,138,095 | 1,148,399 | ||
Commercial | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 770,352 | 779,480 | ||
Allowance for loan losses | (18,334) | (17,570) | (11,408) | (11,057) |
Commercial | Real estate | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 443,295 | 450,452 | ||
Commercial | Commercial and industrial | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 221,808 | 237,223 | ||
Commercial | Construction | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 105,249 | 91,805 | ||
Residential mortgages | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 281,697 | 279,960 | ||
Allowance for loan losses | (3,476) | (3,484) | (2,379) | (2,360) |
Home equity loans and lines | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 78,925 | 80,345 | ||
Allowance for loan losses | (1,313) | (1,303) | (850) | (813) |
Consumer | ||||
NET LOANS RECEIVABLE | ||||
Gross Loans Receivable | 29,787 | 30,860 | ||
Allowance for loan losses | $ (487) | $ (494) | $ (362) | $ (269) |
NET LOANS RECEIVABLE - Allowanc
NET LOANS RECEIVABLE - Allowance for Loan Losses (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Allowance for loan losses: | ||
Allowance for loan losses at beginning of period | $ 22,851 | $ 14,499 |
Provision charged to operations | 750 | 570 |
Loans charged off | (26) | (80) |
Recoveries on loans charged off | 35 | 10 |
Allowance for loan losses at end of period | 23,610 | 14,999 |
Commercial | ||
Allowance for loan losses: | ||
Allowance for loan losses at beginning of period | 17,570 | 11,057 |
Provision charged to operations | 730 | 355 |
Loans charged off | (4) | |
Recoveries on loans charged off | 34 | |
Allowance for loan losses at end of period | 18,334 | 11,408 |
Residential mortgages | ||
Allowance for loan losses: | ||
Allowance for loan losses at beginning of period | 3,484 | 2,360 |
Provision charged to operations | (8) | 38 |
Loans charged off | (19) | |
Allowance for loan losses at end of period | 3,476 | 2,379 |
Home equity loans and lines | ||
Allowance for loan losses: | ||
Allowance for loan losses at beginning of period | 1,303 | 813 |
Provision charged to operations | 10 | 36 |
Recoveries on loans charged off | 1 | |
Allowance for loan losses at end of period | 1,313 | 850 |
Consumer | ||
Allowance for loan losses: | ||
Allowance for loan losses at beginning of period | 494 | 269 |
Provision charged to operations | 18 | 141 |
Loans charged off | (26) | (57) |
Recoveries on loans charged off | 1 | 9 |
Allowance for loan losses at end of period | $ 487 | $ 362 |
NET LOANS RECEIVABLE - Balance
NET LOANS RECEIVABLE - Balance in Allowance for Loan Losses and recorded Investment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 | Sep. 30, 2019 | Jun. 30, 2019 |
Allowance for loan losses: | ||||
Related to loans individually evaluated for impairment | $ 2,410 | $ 929 | ||
Related to loans collectively evaluated for impairment | 21,200 | 21,922 | ||
Ending balance | 23,610 | 22,851 | $ 14,999 | $ 14,499 |
Loans: | ||||
Individually evaluated for impairment | 9,843 | 8,407 | ||
Loans collectively evaluated for impairment | 1,150,918 | 1,162,238 | ||
Total | 1,160,761 | 1,170,645 | ||
Commercial | ||||
Allowance for loan losses: | ||||
Related to loans individually evaluated for impairment | 2,410 | 929 | ||
Related to loans collectively evaluated for impairment | 15,924 | 16,641 | ||
Ending balance | 18,334 | 17,570 | 11,408 | 11,057 |
Loans: | ||||
Individually evaluated for impairment | 9,843 | 8,407 | ||
Loans collectively evaluated for impairment | 760,509 | 771,073 | ||
Total | 770,352 | 779,480 | ||
Residential mortgages | ||||
Allowance for loan losses: | ||||
Related to loans collectively evaluated for impairment | 3,476 | 3,484 | ||
Ending balance | 3,476 | 3,484 | 2,379 | 2,360 |
Loans: | ||||
Loans collectively evaluated for impairment | 281,697 | 279,960 | ||
Total | 281,697 | 279,960 | ||
Home equity loans and lines | ||||
Allowance for loan losses: | ||||
Related to loans collectively evaluated for impairment | 1,313 | 1,303 | ||
Ending balance | 1,313 | 1,303 | 850 | 813 |
Loans: | ||||
Loans collectively evaluated for impairment | 78,925 | 80,345 | ||
Total | 78,925 | 80,345 | ||
Consumer | ||||
Allowance for loan losses: | ||||
Related to loans collectively evaluated for impairment | 487 | 494 | ||
Ending balance | 487 | 494 | $ 362 | $ 269 |
Loans: | ||||
Loans collectively evaluated for impairment | 29,787 | 30,860 | ||
Total | $ 29,787 | $ 30,860 |
NET LOANS RECEIVABLE - Impaired
NET LOANS RECEIVABLE - Impaired loans by Class (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Jun. 30, 2020 | |
NET LOANS RECEIVABLE | ||
With an allowance recorded, Allowance for Loan Losses Allocated | $ 2,410 | $ 929 |
Total: Unpaid Principal Balance | 9,976 | 8,509 |
Total: Recorded Investment | 9,843 | 8,407 |
Allowance for Loan Losses Allocated | 2,410 | 929 |
Total: Average Recorded Investment | 9,989 | 8,316 |
Total: Interest Income Recognized | 44 | 353 |
Commercial | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 6,752 | 6,782 |
With no related allowance recorded, Recorded Investment | 6,653 | 6,703 |
With no related allowance recorded, Average Recorded Investment | 6,766 | 6,569 |
With no related allowance recorded, Interest Income Recognized | 25 | 265 |
With an allowance recorded, Unpaid Principal Balance | 3,224 | 1,727 |
With an allowance recorded, Recorded Investment | 3,190 | 1,704 |
With an allowance recorded, Allowance for Loan Losses Allocated | 2,410 | 929 |
With an allowance recorded, Average Recorded Investment | 3,223 | 1,747 |
With an allowance recorded, Interest Income Recognized | 19 | 88 |
Allowance for Loan Losses Allocated | 2,410 | 929 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 5,387 | 5,417 |
With no related allowance recorded, Recorded Investment | 5,292 | 5,342 |
With no related allowance recorded, Average Recorded Investment | 5,401 | 5,203 |
With no related allowance recorded, Interest Income Recognized | 25 | 265 |
With an allowance recorded, Unpaid Principal Balance | 237 | 233 |
With an allowance recorded, Recorded Investment | 218 | 221 |
With an allowance recorded, Allowance for Loan Losses Allocated | 21 | 25 |
With an allowance recorded, Average Recorded Investment | 235 | 234 |
Allowance for Loan Losses Allocated | 21 | 25 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 46 | 46 |
With no related allowance recorded, Recorded Investment | 42 | 42 |
With no related allowance recorded, Average Recorded Investment | 46 | 46 |
With an allowance recorded, Unpaid Principal Balance | 2,987 | 1,494 |
With an allowance recorded, Recorded Investment | 2,972 | 1,483 |
With an allowance recorded, Allowance for Loan Losses Allocated | 2,389 | 904 |
With an allowance recorded, Average Recorded Investment | 2,988 | 1,513 |
With an allowance recorded, Interest Income Recognized | 19 | 88 |
Allowance for Loan Losses Allocated | 2,389 | 904 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
With no related allowance recorded, Unpaid Principal Balance | 1,319 | 1,319 |
With no related allowance recorded, Recorded Investment | 1,319 | 1,319 |
With no related allowance recorded, Average Recorded Investment | $ 1,319 | $ 1,320 |
NET LOANS RECEIVABLE - Loan Mod
NET LOANS RECEIVABLE - Loan Modifications (Details) $ in Millions | Sep. 30, 2020USD ($)loan |
NET LOANS RECEIVABLE | |
Number of consumer loans in which Company granted payment deferral requests | loan | 12 |
Amount of consumer loans in which Company granted payment deferral requests | $ | $ 4 |
Number of commercial loans in which Company granted payment deferral requests | loan | 22 |
Amount of commercial loans in which Company granted payment deferral requests | $ | $ 27.6 |
NET LOANS RECEIVABLE - Summariz
NET LOANS RECEIVABLE - Summarizes troubled debt restructurings (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Sep. 30, 2019 |
NET LOANS RECEIVABLE | ||
Loans modified as troubled debt restructurings | $ 0 | $ 0 |
NET LOANS RECEIVABLE - Nonaccru
NET LOANS RECEIVABLE - Nonaccrual and Loans Past Due Over 90 Days Still on Accrual (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
NET LOANS RECEIVABLE | ||
Nonaccrual | $ 14,025 | $ 11,660 |
Past Due 90 Days Still on Accrual | 602 | 1,610 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 3,311 | 3,364 |
Past Due 90 Days Still on Accrual | 548 | 143 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 1,595 | 95 |
Past Due 90 Days Still on Accrual | 37 | 1,455 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 1,319 | 1,319 |
Residential mortgages | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 5,410 | 4,807 |
Home equity loans and lines | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 2,191 | 1,865 |
Consumer | ||
NET LOANS RECEIVABLE | ||
Nonaccrual | 199 | 210 |
Past Due 90 Days Still on Accrual | $ 17 | $ 12 |
NET LOANS RECEIVABLE - Aging of
NET LOANS RECEIVABLE - Aging of Recorded Investment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
NET LOANS RECEIVABLE | ||
Total Past Due | $ 14,985 | $ 16,757 |
Loans Not Past Due | 1,145,776 | 1,153,888 |
Total | 1,160,761 | 1,170,645 |
30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 2,008 | 3,945 |
60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 2,941 | 2,772 |
90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 10,036 | 10,040 |
Commercial | ||
NET LOANS RECEIVABLE | ||
Total | 770,352 | 779,480 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 4,643 | 2,504 |
Loans Not Past Due | 438,652 | 447,948 |
Total | 443,295 | 450,452 |
Commercial | Real estate | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 18 | 23 |
Commercial | Real estate | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,952 | 211 |
Commercial | Real estate | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 2,673 | 2,270 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,682 | 1,577 |
Loans Not Past Due | 220,126 | 235,646 |
Total | 221,808 | 237,223 |
Commercial | Commercial and industrial | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 50 | 26 |
Commercial | Commercial and industrial | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,632 | 1,551 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,319 | 1,319 |
Loans Not Past Due | 103,930 | 90,486 |
Total | 105,249 | 91,805 |
Commercial | Construction | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,319 | 1,319 |
Residential mortgages | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 3,862 | 7,443 |
Loans Not Past Due | 277,835 | 272,517 |
Total | 281,697 | 279,960 |
Residential mortgages | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 484 | 2,666 |
Residential mortgages | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 556 | 1,272 |
Residential mortgages | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 2,822 | 3,505 |
Home equity loans and lines | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 3,384 | 3,859 |
Loans Not Past Due | 75,541 | 76,486 |
Total | 78,925 | 80,345 |
Home equity loans and lines | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,443 | 1,217 |
Home equity loans and lines | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 368 | 1,259 |
Home equity loans and lines | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 1,573 | 1,383 |
Consumer | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 95 | 55 |
Loans Not Past Due | 29,692 | 30,805 |
Total | 29,787 | 30,860 |
Consumer | 30 to 59 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 63 | 39 |
Consumer | 60 to 89 Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | 15 | 4 |
Consumer | 90 or more Days Past Due | ||
NET LOANS RECEIVABLE | ||
Total Past Due | $ 17 | $ 12 |
NET LOANS RECEIVABLE - Risk (De
NET LOANS RECEIVABLE - Risk (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
NET LOANS RECEIVABLE | ||
Loans | $ 1,160,761 | $ 1,170,645 |
Commercial | ||
NET LOANS RECEIVABLE | ||
Loans | 770,352 | 779,480 |
Commercial | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 721,000 | 746,594 |
Commercial | Special Mention | ||
NET LOANS RECEIVABLE | ||
Loans | 21,712 | 6,499 |
Commercial | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | 27,587 | 26,334 |
Commercial | Doubtful | ||
NET LOANS RECEIVABLE | ||
Loans | 53 | 53 |
Commercial | Real estate | ||
NET LOANS RECEIVABLE | ||
Loans | 443,295 | 450,452 |
Commercial | Real estate | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 411,547 | 433,948 |
Commercial | Real estate | Special Mention | ||
NET LOANS RECEIVABLE | ||
Loans | 15,411 | 106 |
Commercial | Real estate | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | 16,337 | 16,398 |
Commercial | Commercial and industrial | ||
NET LOANS RECEIVABLE | ||
Loans | 221,808 | 237,223 |
Commercial | Commercial and industrial | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 206,124 | 222,777 |
Commercial | Commercial and industrial | Special Mention | ||
NET LOANS RECEIVABLE | ||
Loans | 6,301 | 6,393 |
Commercial | Commercial and industrial | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | 9,330 | 8,000 |
Commercial | Commercial and industrial | Doubtful | ||
NET LOANS RECEIVABLE | ||
Loans | 53 | 53 |
Commercial | Construction | ||
NET LOANS RECEIVABLE | ||
Loans | 105,249 | 91,805 |
Commercial | Construction | Pass | ||
NET LOANS RECEIVABLE | ||
Loans | 103,329 | 89,869 |
Commercial | Construction | Substandard | ||
NET LOANS RECEIVABLE | ||
Loans | $ 1,920 | $ 1,936 |
NET LOANS RECEIVABLE - Others (
NET LOANS RECEIVABLE - Others (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Residential mortgage, home equity and commercial loans | ||
NET LOANS RECEIVABLE | ||
Pledges loans receivable as collateral | $ 424.5 | $ 449.5 |
DERIVATIVES - Offsetting (Detai
DERIVATIVES - Offsetting (Details) - Not designated as hedging instruments - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Interest rate swap | ||
DERIVATIVES | ||
Derivative notional amount | $ 703 | $ 706.6 |
Interest rate swap - Commercial borrowers | ||
DERIVATIVES | ||
Derivative notional amount | 351.5 | 353.3 |
Interest rate swap - Third party counterparties | ||
DERIVATIVES | ||
Derivative notional amount | $ 351.5 | $ 353.3 |
DERIVATIVES - Hedging Instrumen
DERIVATIVES - Hedging Instruments (Details) - Interest rate swap - Not designated as hedging instruments - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
Derivative Assets | ||
Gross interest rate swaps | $ 41,293 | $ 42,922 |
Net amount | 41,293 | 42,922 |
Derivative Liabilities | ||
Gross interest rate swaps | 41,293 | 42,922 |
Less: cash collateral applied | $ (41,293) | $ (42,922) |
DERIVATIVES - Collateral (Detai
DERIVATIVES - Collateral (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Jun. 30, 2020 |
Interest rate swap - Third party counterparties | Not designated as hedging instruments | ||
DERIVATIVES | ||
Deposited collateral | $ 41.3 | $ 42.9 |
OTHER COMPREHENSIVE INCOME (L_3
OTHER COMPREHENSIVE INCOME (LOSS) - Reclassifications (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
OTHER COMPREHENSIVE INCOME | ||
Reclassification, net of tax | $ (1,394) | $ 977 |
Amount Reclassified from Accumulated Other Comprehensive Loss | ||
OTHER COMPREHENSIVE INCOME | ||
Reclassification, net of tax | $ 0 | $ 0 |
OTHER COMPREHENSIVE INCOME (L_4
OTHER COMPREHENSIVE INCOME (LOSS) - Balances and Changes in AOCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Accumulated other comprehensive income (loss) | ||
Balance at beginning of period | $ 223,966 | $ 123,258 |
Balance at end of period | 225,399 | 223,777 |
AOCI | ||
Accumulated other comprehensive income (loss) | ||
Balance at beginning of period | (17,370) | (11,103) |
Other comprehensive income (loss) before reclassifications | (72) | 241 |
Reclassification for change in accounting principle | 116 | |
Balance at end of period | (17,442) | (10,746) |
Unrealized Gains/Losses on Securities | ||
Accumulated other comprehensive income (loss) | ||
Balance at beginning of period | 381 | 338 |
Other comprehensive income (loss) before reclassifications | (72) | 241 |
Reclassification for change in accounting principle | 116 | |
Balance at end of period | 309 | 695 |
Defined Benefit Plan | ||
Accumulated other comprehensive income (loss) | ||
Balance at beginning of period | (17,751) | (11,441) |
Balance at end of period | $ (17,751) | $ (11,441) |
OTHER COMPREHENSIVE INCOME (L_5
OTHER COMPREHENSIVE INCOME (LOSS) - Allocated Component of OCI (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Unrealized gains/losses on securities: | ||
Unrealized holdings gains (losses) arising during the period | $ (27) | $ 84 |
Tax amount on unrealized gains/losses on securities | (27) | 84 |
Total | $ (27) | $ 84 |
EMPLOYEE BENEFIT PLANS - Pensio
EMPLOYEE BENEFIT PLANS - Pension Plan - other (Details) | Jan. 01, 2010 | Dec. 31, 2009 | Sep. 30, 2020 |
Employee Benefit Plans | |||
Threshold age of employee who are eligible for pension plan | 21 years | ||
Threshold period of service of employee to be eligible for pension plan | 1 year | ||
Pension plan | |||
Employee Benefit Plans | |||
Pensions paid as annuity using pension formula | 1.50% | 2.00% | |
Average of highest consecutive years of total compensation over the last ten years multiplied by credited service up to thirty years to calculate pension formula | 5 years | ||
Total compensation year used for average of the five highest consecutive years multiplied by credited service up to thirty years to calculate pension formula | 10 years | ||
Maximum credited service (in years) | 30 years |
EMPLOYEE BENEFIT PLANS - Net Pe
EMPLOYEE BENEFIT PLANS - Net Periodic Pension Cost (Details) - Pension plan - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Net periodic pension cost included in the Bank’s consolidated statements of income | ||
Service cost | $ 695 | $ 516 |
Interest cost | 458 | 483 |
Expected return on plan assets | (836) | (927) |
Amortization of net actuarial loss | 433 | 272 |
Net periodic cost | 750 | 344 |
Other disclosures | ||
Employer contributions | $ 0 | $ 0 |
EMPLOYEE BENEFIT PLANS - Post-R
EMPLOYEE BENEFIT PLANS - Post-Retirement Healthcare Plan (Details) - Post-retirement benefit plan $ in Thousands | 3 Months Ended |
Sep. 30, 2020USD ($) | |
Employee Benefit Plans | |
Threshold age for eligibility for retiree medical coverage | 60 years |
Minimum year of service for eligibility for retiree medical coverage | 25 years |
Minimum year of service required for eligibility for individual and spousal coverage | 30 years |
Monthly premium for individual coverage | $ 210 |
Monthly premium for employee and spousal coverage | $ 420 |
EMPLOYEE BENEFIT PLANS - Net _2
EMPLOYEE BENEFIT PLANS - Net Periodic Post-retirement Benefit Cost (Details) - Post-retirement benefit plan - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Net periodic post-retirement benefit cost | ||
Service cost | $ 11 | $ 9 |
Interest cost | 18 | 16 |
Amortization of net actuarial loss | 1 | 1 |
Net periodic cost | $ 30 | $ 26 |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employee Stock Ownership Plan (Details) - Pioneer Bank ESOP - USD ($) | Jul. 17, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Employee Stock Ownership Plan | |||
Number of shares purchased by the ESOP as a result of the Company granting a loan to the ESOP | 1,018,325 | ||
Average purchase price of shares (in dollars per share) | $ 13.40 | ||
Term of loan granted by Company to the ESOP | 20 years | ||
Balance of ESOP loan | $ 12,900,000 | ||
Number of shares committed to be released annually under the ESOP | 50,916 | ||
Compensation expense | $ 111,000 | $ 357,000 | |
Shares held by the ESOP include the following: | |||
Allocated | 50,916 | ||
Committed to be allocated | 38,187 | 25,458 | |
Unallocated | 929,222 | 992,867 | |
Total Shares | 1,018,325 | 1,018,325 |
COMMITMENTS AND CONTINGENT LI_3
COMMITMENTS AND CONTINGENT LIABILITIES - Off-Balance Sheet Financing (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Fixed Rate | $ 51,367 | $ 41,573 |
Variable Rate | 254,404 | 262,791 |
Total | 305,771 | 304,364 |
Commitments to extend credit | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Fixed Rate | 51,367 | 41,573 |
Variable Rate | 225,379 | 232,137 |
Total | 276,746 | 273,710 |
Standby letters of credit | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Variable Rate | 29,025 | 30,654 |
Total | $ 29,025 | $ 30,654 |
COMMITMENTS AND CONTINGENT LI_4
COMMITMENTS AND CONTINGENT LIABILITIES - Additional information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2020 | Jun. 30, 2020 | |
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Adjustable rate mortgages annual rate increase | 2.00% | |
Adjustable rate residential mortgage loans amount | $ 39.6 | |
Adjustable rate mortgage loans had conversion options | 1.7 | |
Loans held for sale | 0 | $ 0 |
Loan commitments with borrowers with rate lock agreements which are intended to be held for sale | 0 | 0 |
Amount of commitments to sell loans to unrelated investors | $ 0 | $ 0 |
Minimum | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Adjustable rate mortgages lifetime rate increase | 5.00% | |
Maximum | ||
COMMITMENTS AND CONTINGENT LIABILITIES | ||
Adjustable rate mortgages lifetime rate increase | 6.00% |
COMMITMENTS AND CONTINGENT LI_5
COMMITMENTS AND CONTINGENT LIABILITIES - Legal Proceeding and Other Contingent Liabilities (Details) | Aug. 31, 2020USD ($) | Aug. 14, 2020claim | Jul. 16, 2020USD ($) | May 01, 2020USD ($) | Feb. 04, 2020USD ($) | Jan. 10, 2020 | Dec. 10, 2019USD ($) | Nov. 26, 2019 | Aug. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Apr. 30, 2020USD ($) | Jan. 21, 2020USD ($) | Oct. 31, 2019USD ($) |
Commitments and Contingent Liabilities | |||||||||||||||||
Deposit activity, the Bank's potential exposure for fraudulent activity | $ 18,500,000 | ||||||||||||||||
Amount set off | $ 16,000,000 | ||||||||||||||||
Another bank returning/ calling back | $ 15,600,000 | ||||||||||||||||
Lending activity, the Bank's potential exposure for fraudulent activity | 15,800,000 | ||||||||||||||||
Amount of commercial loan relationships with a customer for which the Bank is the originating lender and which there is potentially fraudulent activity | 35,800,000 | ||||||||||||||||
Non-interest expense associated with potentially fraudulent activity | $ 2,500,000 | ||||||||||||||||
Additional charges on non interest expense | $ 2,021,000,000 | ||||||||||||||||
Provision for loan losses related to charge-off the entire principal balance owed to the Bank related to the customer's commercial loan relationship as it relates to the potentially fraudulent activity | $ 15,800,000 | ||||||||||||||||
Partial recovery recognized related to the charge-off of the Mann Entities commercial loan relationships | $ 34,000 | $ 1,700,000 | |||||||||||||||
Southwestern Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Constructive trust, funds in question, per complaint | $ 9,800,000 | ||||||||||||||||
Number of days postponed in filing the answer | 14 days | 14 days | |||||||||||||||
Amount of counterclaim/cross-claim damages sought by the Pioneer Parties | $ 15,600,000 | ||||||||||||||||
Cachet Assertion | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Value of funds Bank is holding per assertion made by Cachet | $ 7,000,000 | ||||||||||||||||
Berkshire Bank Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Complaint, damages sought | $ 15,600,000 | ||||||||||||||||
Number of cases dismissed | claim | 5 | ||||||||||||||||
Chemung Canal Trust Company Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Complaint, damages sought | $ 4,200,000 | ||||||||||||||||
Number of cases dismissed | claim | 3 | ||||||||||||||||
Number of claims | claim | 4 | ||||||||||||||||
DOJ Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Value of funds in a third party account, claimed to be wrongfully seized by the Company and Bank to apply towards debts allegedly owed to the Bank | $ 7,300,000 | ||||||||||||||||
AXH Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Complaint, damages sought | $ 336,000 | ||||||||||||||||
Minimum | Southwestern Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Complaint, damages sought | $ 9,800,000 | ||||||||||||||||
Minimum | Southwestern Second Amended Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Complaint, damages sought | $ 9,800,000 | ||||||||||||||||
Minimum | NatPay Complaint | |||||||||||||||||
Commitments and Contingent Liabilities | |||||||||||||||||
Complaint, damages sought | $ 4,000,000 |
FAIR VALUE - Recurring Basis (D
FAIR VALUE - Recurring Basis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
FAIR VALUE | ||
Total debt securities | $ 81,761 | $ 75,768 |
Equity securities | 9,117 | 8,533 |
Municipal obligations | ||
FAIR VALUE | ||
Total debt securities | 19,117 | 13,385 |
Other debt securities | ||
FAIR VALUE | ||
Total debt securities | 854 | 872 |
Level 1 | ||
FAIR VALUE | ||
Total debt securities | 61,790 | 61,511 |
Equity securities | 5,770 | 5,528 |
Level 2 | ||
FAIR VALUE | ||
Total debt securities | 19,971 | 14,257 |
Equity securities | 3,347 | 3,005 |
Derivative assets | 41,293 | 42,922 |
Recurring basis | ||
FAIR VALUE | ||
Total debt securities | 81,761 | 75,768 |
Equity securities | 9,117 | 8,533 |
Derivative assets | 41,293 | 42,922 |
Total assets | 132,171 | 127,223 |
Recurring basis | U.S. Government and agency obligations | ||
FAIR VALUE | ||
Total debt securities | 61,790 | 61,511 |
Recurring basis | Municipal obligations | ||
FAIR VALUE | ||
Total debt securities | 19,117 | 13,385 |
Recurring basis | Other debt securities | ||
FAIR VALUE | ||
Total debt securities | 854 | 872 |
Recurring basis | Level 1 | ||
FAIR VALUE | ||
Total debt securities | 61,790 | 61,511 |
Equity securities | 5,770 | 5,528 |
Total assets | 67,560 | 67,039 |
Recurring basis | Level 1 | U.S. Government and agency obligations | ||
FAIR VALUE | ||
Total debt securities | 61,790 | 61,511 |
Recurring basis | Level 2 | ||
FAIR VALUE | ||
Total debt securities | 19,971 | 14,257 |
Equity securities | 3,347 | 3,005 |
Derivative assets | 41,293 | 42,922 |
Total assets | 64,611 | 60,184 |
Recurring basis | Level 2 | Municipal obligations | ||
FAIR VALUE | ||
Total debt securities | 19,117 | 13,385 |
Recurring basis | Level 2 | Other debt securities | ||
FAIR VALUE | ||
Total debt securities | $ 854 | $ 872 |
FAIR VALUE - Non-Recurring Basi
FAIR VALUE - Non-Recurring Basis (Details) - USD ($) | 12 Months Ended | |
Jun. 30, 2020 | Sep. 30, 2020 | |
FAIR VALUE | ||
Allowance for Loan Losses Allocated | $ 929,000 | $ 2,410,000 |
Write-downs | 8,000 | |
Non-recurring basis | ||
FAIR VALUE | ||
Impaired loans, Commercial | 775,000 | 781,000 |
Other real estate owned | 260,000 | 161,000 |
Non-recurring basis | Level 3 | ||
FAIR VALUE | ||
Impaired loans, Commercial | 775,000 | 781,000 |
Other real estate owned | 260,000 | 161,000 |
Carrying amount of impaired loans | 1,700,000 | 3,200,000 |
Allowance for Loan Losses Allocated | $ 929,000 | $ 2,400,000 |
FAIR VALUE - Carrying and Fair
FAIR VALUE - Carrying and Fair Values (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Jun. 30, 2020 |
Financial assets | ||
Cash and cash equivalents | $ 262,158 | $ 156,903 |
Securities available for sale | 81,761 | 75,768 |
Securities held to maturity, fair value | 10,697 | 6,917 |
Equity securities | 9,117 | 8,533 |
FHLBNY stock | 1,010 | 1,010 |
Net loans receivable | 1,138,095 | 1,148,399 |
Accrued interest receivable | 4,118 | 3,467 |
Level 1 | ||
Financial assets | ||
Cash and cash equivalents | 262,158 | 156,903 |
Securities available for sale | 61,790 | 61,511 |
Equity securities | 5,770 | 5,528 |
Level 2 | ||
Financial assets | ||
Securities available for sale | 19,971 | 14,257 |
Securities held to maturity, fair value | 10,697 | 6,917 |
Equity securities | 3,347 | 3,005 |
Net loans receivable | 1,010 | 1,010 |
Accrued interest receivable | 4,118 | 3,467 |
Derivative assets | 41,293 | 42,922 |
Financial liabilities | ||
Savings, money market, and demand accounts | 1,273,105 | 1,150,591 |
Time deposits | 109,218 | 120,921 |
Mortgagors’ escrow deposits | 2,634 | 6,044 |
Accrued interest payable | 24 | 35 |
Level 3 | ||
Financial assets | ||
FHLBNY stock | 1,166,600 | 1,180,002 |
Carrying Amount | ||
Financial assets | ||
Cash and cash equivalents | 262,158 | 156,903 |
Securities available for sale | 81,761 | 75,768 |
Securities held to maturity, fair value | 10,639 | 6,822 |
Equity securities | 9,117 | 8,533 |
FHLBNY stock | 1,138,095 | 1,148,399 |
Net loans receivable | 1,010 | 1,010 |
Accrued interest receivable | 4,118 | 3,467 |
Derivative assets | 41,293 | 42,922 |
Financial liabilities | ||
Savings, money market, and demand accounts | 1,273,105 | 1,150,591 |
Time deposits | 108,086 | 119,559 |
Mortgagors’ escrow deposits | 2,634 | 6,044 |
Accrued interest payable | 24 | 35 |
Fair Value | ||
Financial assets | ||
Cash and cash equivalents | 262,158 | 156,903 |
Securities available for sale | 81,761 | 75,768 |
Securities held to maturity, fair value | 10,697 | 6,917 |
Equity securities | 9,117 | 8,533 |
FHLBNY stock | 1,166,600 | 1,180,002 |
Net loans receivable | 1,010 | 1,010 |
Accrued interest receivable | 4,118 | 3,467 |
Derivative assets | 41,293 | 42,922 |
Financial liabilities | ||
Savings, money market, and demand accounts | 1,273,105 | 1,150,591 |
Time deposits | 109,218 | 120,921 |
Mortgagors’ escrow deposits | 2,634 | 6,044 |
Accrued interest payable | $ 24 | $ 35 |
REVENUE RECOGNITION (Details)
REVENUE RECOGNITION (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Non-interest Income | ||
Non-interest income in scope | $ 2,795 | $ 3,064 |
Non-interest income out of scope | 733 | 905 |
Total noninterest income | 3,528 | 3,969 |
Insurance revenues | ||
Non-interest Income | ||
Non-interest income in scope | 669 | 675 |
Wealth management services | ||
Non-interest Income | ||
Non-interest income in scope | 685 | 679 |
Service charges on deposit accounts | ||
Non-interest Income | ||
Non-interest income in scope | 619 | 915 |
Card services income | ||
Non-interest Income | ||
Non-interest income in scope | 761 | 731 |
Other | ||
Non-interest Income | ||
Non-interest income in scope | $ 61 | $ 64 |
EARNINGS PER SHARE (Details)
EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
EARNINGS PER SHARE | ||
Net income applicable to common stock | $ 1,394 | $ (977) |
Average number of common shares outstanding | 25,977,679 | 25,977,679 |
Less: Average unallocated ESOP shares | 935,587 | 992,867 |
Average number of common shares outstanding used to calculate basic and diluted earnings per common share | 25,042,092 | 24,984,812 |
Net earnings (loss) per common share: | ||
Basic | $ 0.06 | $ (0.04) |
Diluted | $ 0.06 | $ (0.04) |
Potential dilutive equivalents | 0 |