Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 13, 2020 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | Eureka Homestead Bancorp, Inc. | |
Entity Central Index Key | 0001769725 | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
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 | 1,315,302 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
ASSETS | ||
Cash and Cash Equivalents | $ 5,736 | $ 11,875 |
Interest-Bearing Deposits in Banks | 13,233 | 1,740 |
Investment Securities | 6,266 | 5,320 |
Loans Receivable, Net | 68,633 | 78,785 |
Loans Held-for-Sale | 2,581 | 1,637 |
Accrued Interest Receivable | 476 | 321 |
Federal Home Loan Bank Stock | 1,437 | 1,418 |
Premises and Equipment, Net | 674 | 704 |
Cash Surrender Value of Life Insurance | 4,114 | 4,044 |
Deferred Tax Asset | 5 | |
Prepaid Expenses and Other Assets | 287 | 155 |
Total Assets | 103,437 | 106,004 |
Liabilities: | ||
Deposits | 55,563 | 58,045 |
Advances from Federal Home Loan Bank | 21,766 | 21,581 |
Advance Payments by Borrowers for Taxes and Insurance | 1,203 | 1,425 |
Deferred Tax Liability | 13 | |
Accrued Expenses and Other Liabilities | 1,714 | 669 |
Total Liabilities | 80,259 | 81,720 |
Commitments and Contingencies (Note 7) | ||
Shareholders' Equity: | ||
Preferred Stock, $0.01 Par Value, 1,000,000 Shares Authorized, No Shares Issued | ||
Common Stock, $0.01 Par Value, 9,000,000 Shares Authorized, 1,315,302 and 1,429,676 Shares Issued and Outstanding on September 30, 2020 and December 31, 2019 | 13 | 14 |
Additional Paid-in Capital | 12,016 | 13,112 |
Unallocated Common Stock Held by: Employee Stock Ownership Plan (ESOP) | (1,063) | (1,098) |
Retained Earnings | 12,163 | 12,274 |
Accumulated Other Comprehensive Income (Loss) | 49 | (18) |
Total Shareholders' Equity | 23,178 | 24,284 |
Total Liabilities and Shareholders' Equity | $ 103,437 | $ 106,004 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 |
CONSOLIDATED BALANCE SHEETS | ||
Preferred Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 1,000,000 | 1,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Common Stock, Par Value (in dollars per share) | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 9,000,000 | 9,000,000 |
Common Stock, Shares Issued | 1,315,302 | 1,429,676 |
Common Stock, Shares Outstanding | 1,315,302 | 1,429,676 |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Interest Income: | ||||
Loans Receivable | $ 645 | $ 865 | $ 2,171 | $ 2,622 |
Investment Securities | 14 | 45 | 61 | 123 |
Interest-Bearing Deposits in Banks | 11 | 69 | 75 | 105 |
Total Interest Income | 670 | 979 | 2,307 | 2,850 |
Interest Expense: | ||||
Deposits | 240 | 333 | 793 | 944 |
Advances from Federal Home Loan Bank | 142 | 167 | 459 | 519 |
Total Interest Expense | 382 | 500 | 1,252 | 1,463 |
Net Interest Income | 288 | 479 | 1,055 | 1,387 |
Provision (Credit) for Loan Losses | (9) | |||
Net Interest Income After Provision (Credit) for Loan Losses | 288 | 479 | 1,055 | 1,396 |
Non-Interest Income: | ||||
Service Charges and Other Income | 20 | 28 | 53 | 74 |
Fees on Loans Sold | 228 | 236 | 565 | 405 |
Income from Life Insurance | 23 | 23 | 70 | 71 |
Total Non-Interest Income | 271 | 287 | 688 | 550 |
Non-Interest Expenses: | ||||
Salaries and Employee Benefits | 375 | 475 | 1,178 | 1,162 |
Occupancy Expense | 56 | 60 | 158 | 195 |
FDIC Deposit Insurance Premium and Examination Fees | 17 | 5 | 49 | 42 |
Data Processing | 30 | 34 | 86 | 94 |
Accounting and Consulting | 29 | 50 | 141 | 98 |
Insurance | 21 | 20 | 61 | 57 |
Legal fees | 24 | 8 | 56 | 9 |
Other | 75 | 53 | 187 | 155 |
Total Non-Interest Expenses | 627 | 705 | 1,916 | 1,812 |
(Loss) Income Before Income Tax (Benefit) Expense | (68) | 61 | (173) | 134 |
Income Tax (Benefit) Expense | 8 | (62) | 14 | |
Net (Loss) Income | $ (68) | $ 53 | $ (111) | $ 120 |
Earnings Per Share: Basic | $ (0.06) | $ 0.04 | $ (0.08) | $ 0.09 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net (Loss) Income | $ (68) | $ 53 | $ (111) | $ 120 |
Other Comprehensive Income: | ||||
Unrealized Gains on Investment Securities | 8 | 2 | 85 | 119 |
Income Tax Effect | (2) | (1) | (18) | (25) |
Other Comprehensive Income, Net of Income Taxes | 6 | 1 | 67 | 94 |
Comprehensive (Loss) Income | $ (62) | $ 54 | $ (44) | $ 214 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Common Stock | Additional Paid-in Capital | Unallocated ESOP Shares | Retained Earnings | Accumulated Other Comprehensive Income/(Loss) | Total |
Balance at Beginning of Period at Dec. 31, 2018 | $ 12,335 | $ (96) | $ 12,239 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Proceeds from Issuance of Common Stock | $ 14 | $ 13,102 | $ (1,144) | 11,972 | ||
ESOP shares earned | 13 | 28 | 41 | |||
Net (Loss) Income | 120 | 120 | ||||
Other Comprehensive Income | 94 | 94 | ||||
Balance at End of Period at Sep. 30, 2019 | 14 | 13,115 | (1,116) | 12,455 | (2) | 24,466 |
Balance at Beginning of Period at Dec. 31, 2019 | 14 | 13,112 | (1,098) | 12,274 | (18) | 24,284 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
ESOP shares earned | 35 | 35 | ||||
Stock Shares Repurchased | (1) | (1,096) | (1,097) | |||
Net (Loss) Income | (111) | (111) | ||||
Other Comprehensive Income | 67 | 67 | ||||
Balance at End of Period at Sep. 30, 2020 | $ 13 | $ 12,016 | $ (1,063) | $ 12,163 | $ 49 | $ 23,178 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash Flows from Operating Activities: | ||
Net (Loss) Income | $ (111) | $ 120 |
Adjustments to Reconcile Net (Loss) Income to Net Cash (Used in) Operating Activities: | ||
Provision (Credit) for Loan Losses | (9) | |
Depreciation Expense | 43 | 64 |
Amortization of FHLB Advance Prepayment Penalty | 49 | 54 |
Provision for Deferred Income Taxes | 55 | |
Net (Accretion) Amortization of Premium/Discount on Mortgage-Backed Securities | (6) | 10 |
Stock Dividend on Federal Home Loan Bank Stock | (19) | (32) |
Non-cash Compensation for ESOP | 35 | 41 |
Net Decrease in Loans Held-for-Sale | (944) | (2,169) |
Changes in Assets and Liabilities: | ||
(Increase) in Accrued Interest Receivable | (155) | |
(Increase) in CSV of Life Insurance | (70) | (70) |
(Increase) in Prepaid Expenses and Other Assets | (132) | (101) |
Increase (Decrease) in Accrued Expenses and Other Liabilities | 1,045 | (1,416) |
Net Cash (Used in) Operating Activities | (265) | (3,453) |
Cash Flows from Investing Activities: | ||
Net Decrease in Loans | 10,152 | 552 |
Proceeds from Maturities of Interest-Bearing Deposits in Banks | 6,482 | 500 |
Purchases of Interest-Bearing Deposits in Banks | (17,975) | (1,748) |
Purchases of Investment Securities | (1,919) | (1,991) |
Proceeds from Sales, Calls and Principal Repayments of Investment Securities | 1,064 | 1,061 |
Purchases of Premises and Equipment | (13) | (19) |
Net Cash (Used in) Investing Activities | (2,209) | (1,645) |
Cash Flows from Financing Activities: | ||
Net (Decrease) Increase in Deposits | (2,482) | 2,157 |
Proceeds from Stock Offering | 13,116 | |
Shares Repurchased | (1,097) | |
Loan to ESOP for Purchase of Stock | (1,144) | |
Advances from Federal Home Loan Bank | 4,000 | 5,000 |
Payments on Advances from Federal Home Loan Bank | (3,864) | (7,500) |
Net (Decrease) in Advance Payments by Borrowers for Taxes and Insurance | (222) | |
Net Cash (Used in) Provided by Financing Activities | (3,665) | 11,629 |
Net (Decrease) Increase in Cash and Cash Equivalents | (6,139) | 6,531 |
Cash and Cash Equivalents at Beginning of Period | 11,875 | 3,090 |
Cash and Cash Equivalents at End of Period | 5,736 | 9,621 |
Cash Paid for: | ||
Interest | 1,311 | 1,450 |
Supplemental Schedule for Noncash Investing and Financing Activities: | ||
Change in the Unrealized Gain/Loss on Investment Securities | $ 85 | $ 119 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2020 | |
Basis of Presentation | |
Basis of Presentation | Note 1 – Basis of Presentation - The accompanying unaudited consolidated financial statements of Eureka Homestead Bancorp, Inc. (the “Company”) were prepared in accordance with instructions for Form 10-Q and Regulation S-X and do not include information or footnotes necessary for a complete presentation of financial condition, results of operations, comprehensive income, changes in equity and cash flows in conformity with accounting principles generally accepted in the United States of America. In the opinion of management, all adjustments (consisting of normal recurring adjustments) necessary for a fair presentation of the financial statements have been included. The results of operations for the three month and nine month periods ended September 30, 2020 are not necessarily indicative of the results which may be expected for the entire year. These statements should be read in conjunction with the Financial Statements and notes thereto for the year ended December 31, 2019 included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 as filed with the Securities and Exchange Commission (“SEC”). Reference is made to the accounting policies of the Company described in the Notes to the Financial Statements contained in the Annual Report. In preparing the financial statements, the Company is required to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates. The financial statements reflect all adjustments that are, in the opinion of management, necessary for a fair statement of the Company’s financial condition, results of operations, comprehensive income, changes in equity and cash flows for the interim periods presented. These adjustments are of a normal recurring nature and include appropriate estimated provisions. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2020 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2 – Recent Accounting Pronouncements - Emerging Growth Company Status The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act. In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), Conforming Amendments Related to Leases . This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the balance sheet and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In September 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . The amendments introduce an impairment model that is based on current expected credit losses (“CECL”), rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g., loans and held to maturity securities), including certain off-balance sheet financial instruments (e.g., commitments to extend credit and standby letters of credit that are not unconditionally cancellable). The CECL should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. Financial instruments with similar risk characteristics may be grouped together when estimating the CECL. The ASU also amends the current available-for-sale security impairment model for debt securities whereby credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. For an emerging growth company, the amendments in this update, as amended through more recent related ASUs, are effective for fiscal years beginning after December 15, 2022, and interim periods within fiscal years beginning after December 15, 2023. The amendments will be applied through a modified retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently planning for the implementation of this accounting standard. It is too early to assess the impact this ASU will have on the Company’s Consolidated Financial Statements. In September 2018, the FASB issued ASU No. 2018‑07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment . The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is currently assessing the amendments but does not anticipate they will have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this ASU are effective for fiscal years, and interim periods with those fiscal years, beginning after December 15, 2020, with early adopting permitted. The Company is currently assessing the impact of the adoption of this standard on the Company’s consolidated financial position. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share | |
Earnings Per Share | Note 3 – Earnings Per Share - Basic earnings per share (“EPS”) represents income (loss) available to common shareholders divided by the weighted average number of common shares outstanding; no dilution for any potentially convertible shares is included in the calculation. Diluted EPS reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock or resulted in the issuance of common stock that then shared in the earnings of the Company. Earnings (loss) per common share were computed based on the following: Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2020 2020 Numerator: Net (loss) available to common shareholders $ (68) $ (111) Denominator: Weighted average common shares outstanding 1,341 1,420 Less: Average unallocated ESOP shares 108 109 Weighted average shares 1,233 1,311 Basic (loss) per common share $ (0.06) $ (0.08) |
Investment Securities
Investment Securities | 9 Months Ended |
Sep. 30, 2020 | |
Investment Securities | |
Investment Securities | Note 4 – Investment Securities - The amortized cost and fair values of investment securities available-for-sale were as follows: Gross Gross September 30, 2020: Amortized Unrealized Unrealized Fair (in thousands) Cost Gains (Losses) Value Mortgage-Backed Securities: FHLMC $ 2,948 $ 69 $ — $ 3,017 SBA 7a Pools 3,256 1 (8) 3,249 Total Investment Securities Available-for-Sale $ 6,204 $ 70 $ (8) $ 6,266 Gross Gross December 31, 2019: Amortized Unrealized Unrealized Fair (in thousands) Cost Gains (Losses) Value Mortgage-Backed Securities: FHLMC $ 2,664 $ — $ (19) $ 2,645 SBA 7a Pools 2,678 5 (8) 2,675 Total Investment Securities Available-for-Sale $ 5,342 $ 5 $ (27) $ 5,320 All investment securities held on September 30, 2020 and December 31, 2019, were government-sponsored mortgage-backed or SBA pool securities. The amortized cost and fair values of the investment securities available-for-sale at September 30, 2020, by contractual maturity, are shown below. For mortgage-backed securities and SBA 7a pools, expected maturities will differ from contractual maturities because borrowers may have the right to call or prepay obligations with or without call or prepayment penalties. Available-for-Sale September 30, 2020 Amortized Fair (in thousands) Cost Value Amounts Maturing: After One Year through Five Years $ — $ — After Five Years through Ten Years 3,327 3,319 After Ten Years 2,877 2,947 $ 6,204 $ 6,266 No investment securities were pledged to secure advances from the FHLB at September 30, 2020 and December 31, 2019. Gross unrealized losses in investment securities at September 30, 2020 and December 31, 2019, existing for continuous periods of less than 12 months and for continuous periods of 12 months or more, are as follows: September 30, 2020 (in thousands) Less Than 12 Months 12 Months or More Totals Security Unrealized Unrealized Unrealized Description Fair Value (Losses) Fair Value (Losses) Fair Value (Losses) Mortgage-Backed FHLMC $ — $ — $ — $ — $ — $ — SBA 7a Pools 912 (8) — — 912 (8) $ 912 $ (8) $ — $ — $ 912 $ (8) December 31, 2019 (in thousands) Less Than 12 Months 12 Months or More Totals Security Unrealized Unrealized Unrealized Description Fair Value (Losses) Fair Value (Losses) Fair Value (Losses) Mortgage-Backed FHLMC $ 655 $ (4) $ 1,990 $ (15) $ 2,645 $ (19) SBA 7a Pools — — 1,692 (8) 1,692 (8) $ 655 $ (4) $ 3,682 $ (23) $ 4,337 $ (27) Management evaluates securities for other-than temporary impairment on a periodic and regular basis, as well as when economic or market concerns warrant such evaluation. No declines at September 30, 2020 and December 31, 2019, were deemed to be other-than-temporary. In analyzing an issuer’s financial condition, management considers whether the federal government or its agencies issued the securities, whether downgrades by bond rating agencies have occurred and the results of reviews of the issuer’s financial statements. |
Loans Receivable and the Allowa
Loans Receivable and the Allowance for Loan Losses | 9 Months Ended |
Sep. 30, 2020 | |
Loans Receivable and the Allowance for Loan Losses | |
Loans Receivable and the Allowance for Loan Losses | Note 5 – Loans Receivable and the Allowance for Loan Losses - Loans receivable at September 30, 2020 and December 31, 2019 are summarized as follows: September 30, December 31, (in thousands) 2020 2019 Mortgage Loans 1-4 Family $ 64,306 $ 73,591 Multifamily 3,184 3,567 Commercial real estate 762 1,117 Consumer Loans 210 209 68,462 78,484 Plus (Less): Unamortized Loan Fees/Costs 1,021 1,151 Allowance for Loan Losses (850) (850) Net Loans Receivable $ 68,633 $ 78,785 The performing mortgage loans are pledged, under a blanket lien, as collateral securing advances from the FHLB at September 30, 2020 and December 31, 2019. Management evaluates the allowance for loan losses to assess the risk of loss in the loan portfolio and to determine the adequacy of the allowance for loan losses. For purposes of this evaluation, loans are aggregated into pools based on various characteristics. Some of those characteristics include payment status, concentrations, and loan to collateral value and the financial status of borrowers. The allowance allocated to each of these pools is based on historical charge-off rates, adjusted for changes in the credit risk characteristics within these pools, as determined from current information and analyses. In determining the appropriate level of the allowance, management also ensures that the overall allowance appropriately reflects current macroeconomic conditions, industry exposure and a margin for the imprecision inherent in most estimates of expected credit losses. In addition to these factors, management also considers the following for each segment of the loan portfolio when determining the allowance: • Residential mortgages - This category consists of loans secured by first and junior liens on residential real estate. The performance of these loans may be adversely affected by unemployment rates, local residential real estate market conditions and the interest rate environment. • Commercial real estate - This category consists of loans primarily secured by office buildings, and retail shopping facilities. The performance of commercial real estate loans may be adversely affected by conditions specific to the relevant industry, the real estate market for the property type and geographic region where the property or borrower is located. • Construction and land - This category consists of loans to finance the ground-up construction and/or improvement of construction of residential and commercial properties and loans secured by land. The performance of construction and land loans is generally dependent upon the successful completion of improvements and/or land development for the end user, the sale of the property to a third party, or a secondary source of cash flow from the owners. The successful completion of planned improvements and development maybe adversely affected by changes in the estimated property value upon completion of construction, projected costs and other conditions leading to project delays. • Multi-family residential - This category consists of loans secured by apartment or residential buildings with five or more units used to accommodate households on a temporary or permanent basis. The performance of multi-family loans is generally dependent on the receipt of rental income from the tenants who occupy the subject property. The occupancy rate of the subject property and the ability of the tenants to pay rent may be adversely affected by the location of the subject property and local economic conditions. • Consumer - This category consists of loans to individuals for household, family and other personal use. The performance of these loans may be adversely affected by national and local economic conditions, unemployment rates and other factors affecting the borrower's income available to service the debt. All of our consumer loans are secured by our customers’ savings accounts and/or certificates of deposit. As a result of the uncertainties inherent in the estimation process, management’s estimate of loan losses and the related allowance could change in the near term. Based on management’s periodic evaluation of the allowance for loan losses, a provision for loan losses is charged to operations if additions to the allowance are required. Actual loan charge-offs are deducted from the allowance and subsequent recoveries of previously charged-off loans are added to the allowance. The following tables set forth, as of September 30, 2020 and December 31, 2019, the balance of the allowance for loan losses by portfolio segment, disaggregated by impairment methodology, which is then further segregated by amounts evaluated for impairment collectively and individually. The allowance for loan losses allocated to each portfolio segment is not necessarily indicative of future losses in any particular portfolio segment and does not restrict the use of the allowance to absorb losses in other portfolio segments. Allowance for Loan Losses and Recorded Investment in Loans Receivable Mortgage- Mortgage- Mortgage- Commercial 1-4 Family Multifamily Real Estate Consumer Total Allowance for Loan Losses: Beginning Balance $ 812 $ 27 $ 11 $ — $ 850 Charge-Offs — — — — — Recoveries — — — — — Provision 1 3 (4) — — Ending Balance $ 813 $ 30 $ 7 $ — $ 850 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 813 $ 30 $ 7 $ — $ 850 Loans Receivable: Ending Balance $ 64,306 $ 3,184 $ 762 $ 210 $ 68,462 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 64,306 $ 3,184 $ 762 $ 210 $ 68,462 The allowance for loan losses for Mortgage 1‑4 Family Loans of $813,000 includes an unallocated portion of $477,000 as of September 30, 2020. Allowance for Loan Losses and Recorded Investment in Loans Receivable Mortgage- Mortgage- Mortgage- Commercial 1-4 Family Multifamily Real Estate Consumer Total Allowance for Loan Losses: Beginning Balance $ 807 $ 31 $ 12 $ — $ 850 Charge-Offs — — — — — Recoveries 9 — — — 9 Provision (4) (4) (1) — (9) Ending Balance $ 812 $ 27 $ 11 $ — $ 850 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 812 $ 27 $ 11 $ — $ 850 Loans Receivable: Ending Balance $ 73,591 $ 3,567 $ 1,117 $ 209 $ 78,484 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 73,591 $ 3,567 $ 1,117 $ 209 $ 78,484 The allowance for loan losses for Mortgage 1‑4 Family Loans of $812,000 includes an unallocated portion of $437,000 as of December 31, 2019. Management further disaggregates the loan portfolio segments into classes of loans, which are based on the initial measurement of the loan, risk characteristics of the loan and the method for monitoring and assessing the credit risk of the loan. Loan Grades / Classification The primary purpose of grading loans is to assess credit quality and assist in identifying potential problem loans. Every loan in the portfolio is assigned a loan grade based on quality and level of risk. Loan grades are updated as events occur that bear on the collectability of the loan, such as change in payment flow or status of the obligor or collateral. Changes in loan grades are reported to the Board Loan Committee. Each credit reviewed is assigned a loan grade based on the following system: Loan Grade 1 Loans with no identified problems and do not require more than normal attention. The repayment source is well defined and the borrower/guarantor exhibits no inability of repaying the loan as agreed. The financial information is acceptable and the loan meets credit and policy requirements and exhibits no unusual elements of risk. The collateral is acceptable and adequate. Loan Grade 2 These are performing owner-occupied loans that exhibit diminished borrower capacity, such as sufficiently-aged Troubled Debt Restructurings or loans that are frequently delinquent more than 30 days but less than 60 days. Also included are performing investor loans with a good payment record but lack updated financial information but are judged from alternate sources to have satisfactory cash flows and a sufficiently strong guarantor. Loan Grade 3 Owner-occupied loans that are well-secured but are occasionally delinquent more than 60 days but less than 90. Also included are performing investor loans lacking required current financial information or that demonstrate diminished guarantor capacity and an estimated stressed debt service coverage ratio of less than 1.20. Loan Grade 4 Investment loans that have potential or identified weaknesses that deserve management’s close attention. If left uncorrected, these may result in deterioration of the repayment prospects for the asset or in the institution’s credit position at some future date. These loans are not adversely classified and do not expose the institution to sufficient risk to warrant adverse classification. Default is not imminent. Adverse Classifications Loan Grade 5 A loan that is inadequately protected by the current sound worth and paying capacity of the obligor or of the collateral pledge, if any. Assets so classified must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected. Loss potential, while existing in the aggregate amount of substandard assets, does not have to exist in individual assets classified substandard. Loan Grade 6 A loan that has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, based on existing facts, conditions, and values, highly questionable and improbable. The possibility of loss is extremely high, but because of certain important and reasonable specific pending factors which may work to the advantage and strengthening of the asset, its classification as an estimated loss is deferred until its more exact status may be determined. Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at September 30, 2020 (in thousands) Special Pass Watch Mention Substandard Doubtful Total Mortgage Loans: 1 to 4 Family $ 63,659 $ 30 $ 55 $ 562 $ — $ 64,306 Multifamily 3,184 — — — — 3,184 Commercial real estate 762 — — — — 762 Non-Mortgage Loans: Consumer 210 — — — — 210 Total $ 67,815 $ 30 $ 55 $ 562 $ — $ 68,462 Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at December 31, 2019 (in thousands) Special Pass Watch Mention Substandard Doubtful Total Mortgage Loans: 1 to 4 Family $ 72,937 $ 87 $ — $ 567 $ — $ 73,591 Multifamily 3,567 — — — — 3,567 Commercial real estate 1,117 — — — — 1,117 Non-Mortgage Loans: Consumer 209 — — — — 209 Total $ 77,830 $ 87 $ — $ 567 $ — $ 78,484 At September 30, 2020 and December 31, 2019, loan balances outstanding on non-accrual status amounted to $0 and $0, respectively. The Company considers loans more than 90 days past due and on nonaccrual as nonperforming loans. At September 30, 2020 and December 31, 2019, the credit quality indicators (performing and nonperforming loans), disaggregated by class of loan, are as follows: Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at September 30, 2020 (in thousands) Non- Performing Performing Total Mortgage Loans: 1 to 4 Family $ 64,306 $ — $ 64,306 Multifamily 3,184 — 3,184 Commercial real estate 762 — 762 Non-Mortgage Loans: Consumer 210 — 210 Total $ 68,462 $ — $ 68,462 Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at December 31, 2019 (in thousands) Non- Performing Performing Total Mortgage Loans: 1 to 4 Family $ 73,591 $ — $ 73,591 Multifamily 3,567 — 3,567 Commercial real estate 1,117 — 1,117 Non-Mortgage Loans: Consumer 209 — 209 Total $ 78,484 $ — $ 78,484 The following tables reflect certain information with respect to the loan portfolio delinquencies by loan class and amount as of September 30, 2020 and December 31, 2019. There were no loans over 90 days past due and still accruing as of September 30, 2020 and December 31, 2019. Aged Analysis of Past Due Loans Receivable at September 30, 2020 (in thousands) 30-59 60-89 90 Days or Total Days Days Greater Total Loans Past Due Past Due Past Due Past Due Current Receivable Mortgage Loans: 1 to 4 Family $ — $ 87 $ — $ 87 $ 64,219 $ 64,306 Multifamily — — — — 3,184 3,184 Commercial real estate — — — — 762 762 Non-Mortgage Loans: Consumer — — — — 210 210 Total $ — $ 87 $ — $ 87 $ 68,375 $ 68,462 Aged Analysis of Past Due Loans Receivable at December 31, 2019 (in thousands) 30-59 60-89 90 Days or Total Days Days Greater Total Loans Past Due Past Due Past Due Past Due Current Receivable Mortgage Loans: 1 to 4 Family $ — $ 89 $ — $ 89 $ 73,502 $ 73,591 Multifamily — — — — 3,567 3,567 Commercial real estate — — — — 1,117 1,117 Non-Mortgage Loans: Consumer — — — — 209 209 Total $ — $ 89 $ — $ 89 $ 78,395 $ 78,484 The following is a summary of information pertaining to impaired loans as of September 30, 2020 and December 31, 2019. Impaired Loans September 30, 2020 (in thousands) Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized Mortgage Loans $ — $ — $ — $ — $ — Non-Mortgage Loans $ — $ — $ — $ — $ — Impaired Loans December 31, 2019 (in thousands) Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized Mortgage Loans $ — $ — $ — $ — $ — Non-Mortgage Loans $ — $ — $ — $ — $ — The Company seeks to assist customers that are experiencing financial difficulty by renegotiating loans within lending regulations and guidelines. Once modified in a troubled debt restructuring, a loan is generally considered impaired until its contractual maturity. At the time of the restructuring, the loan is evaluated for an asset-specific allowance for credit losses. The Company continues to specifically reevaluate the loan in subsequent periods, regardless of the borrower’s performance under the modified terms. If a borrower subsequently defaults on the loan after it is restructured, the Company provides an allowance for credit losses for the amount of the loan that exceeds the value of the related collateral. The Company had no troubled debt restructurings as of September 30, 2020 and December 31, 2019 or any that defaulted subsequent to the restructuring through the date the financial statements were issued. During the nine months ended September 30, 2020, the Company modified 71 mortgage loans, with an aggregate balance of $15.3 million, in each case related to a hardship caused by the COVID-19 pandemic and responses thereto. The Company is working with borrowers and providing modifications in the form of principal, interest and escrow deferral, in each case, for initial periods of up to 90 days. The deferred payments will be collected at the original maturity date or at the time the loan is ultimately paid off. As necessary, the Company is making available a second 90 day principal, interest and escrow deferral bringing the total potential deferral period to six months. Modifications are structured in a manner to best address each individual customer's current situation. These modifications are excluded from TDR classification under Section 4013 of the CARES Act or under applicable interagency guidance of the federal banking regulators. Modified loans will be considered current and will continue to accrue interest during the deferral period. Detail of COVID-19 modifications on the Company’s loan portfolio during the nine months ended September 30, 2020 follows. Number of Total Total Contracts Balance Percent Balance Modified Modified Modified Modifications as of September 30, 2020 (in thousands) Mortgage Loans 1-4 Family $ 66,186 6 $ 2,138 Multifamily 3,204 2 848 Commercial Real Estate 1,086 — — Total Loans $ 70,476 8 $ 2,986 As of October 31, 2020, all but 1 of the modified loans aggregating $430,000 have resumed normal monthly payments. The Company has received no requests for additional deferrals. Loans which have had multiple COVID-19 modifications though October 31, 2020 are detailed below. Total Number of Balance Modifications as of October 31, 2020 Contracts Multiple (in thousands) Modified Modifications Mortgage Loans 1-4 Family 1 $ 430 Multifamily — — Commercial Real Estate — — Total Loans 1 $ 430 The Company is closely monitoring all loans that received deferrals. As additional information becomes available, management will continue to evaluate these loans to ensure appropriate risk classification. |
Regulatory Matters
Regulatory Matters | 9 Months Ended |
Sep. 30, 2020 | |
Regulatory Matters | |
Regulatory Matters | Note 6 – Regulatory Matters - The Bank is subject to various regulatory capital requirements administered by its primary Federal regulator, the Office of the Comptroller of the Currency (OCC). Failure to meet the minimum capital requirements can initiate certain mandatory and possible additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company and the financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Bank must meet specific capital guidelines involving quantitative measures of the Bank’s assets, liabilities and certain off-balance sheet items as calculated under regulatory reporting requirements. The Bank’s capital amounts and classification under the prompt corrective action guidelines are also subject to qualitative judgments by the regulators about components, risk weightings and other factors. Quantitative measures established by regulation to ensure capital adequacy require the Bank to maintain minimum amounts and ratios of total capital, tier 1 capital, and common equity tier 1 capital to risk-weighted assets (as defined in the regulations), and leverage capital, which is tier 1 capital to adjusted average total assets (as defined). Management believes, as of September 30, 2020 and December 31, 2019, that the Bank meets all the capital adequacy requirements to which it is subject. As of September 30, 2020 and December 31, 2019, the most recent notifications from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To remain categorized as well capitalized, the Bank will have to maintain minimum total capital, common equity tier 1 capital, tier 1 capital, and leveraged capital ratios as disclosed in the table below. There are no conditions or events since the most recent notification that management believes have changed the Bank’s category. The Bank’s actual and required capital amounts and ratios are as follows: To be Well Capitalized Under For Capital Prompt Corrective September 30, 2020: Actual Adequacy Purposes Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 19,586 43.76 % $ 3,581 8.00 % $ 4,476 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 19,023 42.50 % $ 2,686 6.00 % $ 3,581 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 19,023 42.50 % $ 2,014 4.50 % $ 2,910 6.50 % Tier 1 Leverage Capital (to Adjusted Total Assets) $ 19,023 18.26 % $ 4,166 4.00 % $ 5,208 5.00 % To be Well Capitalized Under For Capital Prompt Corrective December 31, 2019: Actual Adequacy Purposes Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 19,568 38.94 % $ 4,020 8.00 % $ 5,026 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 18,938 37.68 % $ 3,015 6.00 % $ 4,020 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 18,938 37.68 % $ 2,262 4.50 % $ 3,267 6.50 % Tier 1 Leverage Capital (to Adjusted Total Assets) $ 18,938 17.47 % $ 4,336 4.00 % $ 5,420 5.00 % A reconciliation of the Bank’s capital determined under GAAP to Total Capital, Tier 1 Capital, Common Equity Tier 1 Capital and Tier 1 Leverage Capital for September 30, 2020 and December 31, 2019, is as follows: September 30, December 31, (in thousands) 2020 2019 Total Equity (Bank Only) $ 19,072 $ 18,920 Unrealized (Gains) Losses on Securities Available-for-Sale, Net (49) 18 Tangible, Tier 1 Capital and Common Equity Tier 1 19,023 18,938 Allowance for Loan Losses Included in Capital 563 630 Total Capital $ 19,586 $ 19,568 The specific reserves included in the Allowance for Loan Losses were not significant as of September 30, 2020 and December 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies | |
Commitments and Contingencies | Note 7 – Commitments and Contingencies - In the normal course of business, the Company has outstanding commitments, such as commitments to extend credit, which are not included in the accompanying financial statements. The Company’s exposure to credit loss in the event of nonperformance by the other party to the financial instruments for commitments to extend credit and standby letters is represented by the contractual or notional amount of those instruments. The Company uses the same credit policies in making such commitments as it does for instruments that are included in the Balance Sheets. 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 may require payment of a fee. The Company evaluates each customer’s creditworthiness on a case-by-case basis. The amount of collateral obtained, if deemed necessary by the Company upon extension of credit, is based on management’s credit evaluation. At September 30, 2020 and December 31, 2019, the Company had $102,000 and $524,000 of outstanding commitments to originate loans, respectively, all of which represents the balance of remaining funds to be disbursed on construction loans in process . In recent years we have sold loans on an industry-standard, servicing-released basis. At September 30, 2020, there were mortgage loans sold to investors with limited recourse for certain periods after the date of sale totaling $ 8.6 million at the sale date. Recourse would apply if the borrower(s) default on any payment within the first four months of the mortgage loan and it remains in default for a period of 90 days, or if the mortgage loan prepays in full within 180 days of the sale date. Should an early payment default occur, Eureka Homestead shall, at its sole discretion, repurchase such mortgage loan from the purchaser at its current amortized balance plus the service release premium received or indemnify the purchaser by paying the service release premium received plus $5,000. Should a mortgage loan prepay in full within 180 days of the sale date, Eureka Homestead shall refund to the purchaser the servicing release premium paid. There have been mortgage loans sold that had an early payment default or that prepaid in full during the recourse period. In the normal course of business, the Company is involved in various legal proceedings. In the opinion of management and counsel, the disposition or ultimate resolution of such proceedings would not have a material adverse effect on the Company's consolidated financial statements. |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Values of Financial Instruments | |
Fair Values of Financial Instruments | Note 8 – Fair Values of Financial Instruments - Fair Value Disclosures The Company uses fair value measurements to record fair value adjustments to certain assets and liabilities and to determine fair value disclosures. In accordance with FASB ASC 820, Fair Value Measurements , the fair value of a financial instrument is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined based on quoted market prices. However, in many instances, there are no quoted market prices for the Company’s various financial instruments. In cases where quoted market prices are not available, fair values are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. Accordingly, fair value estimates may not be realized in an immediate settlement of the instrument. The fair value accounting guidance establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy under this guidance are described below. Level 1 - Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date. An active market for the asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. Level 2 - Level 2 inputs are inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly. Level 2 inputs include the following: a. Quoted prices for similar assets or liabilities in active markets; b. Quoted prices for identical or similar assets or liabilities in markets that are not active, that is, markets in which there are few transactions for the asset or liability, the prices are not current, or price quotations vary substantially either over time or among market makers (for example, some brokered markets), or in which little information is released publicly (for example, a principal-to principal market); c. Inputs other than quoted prices that are observable for the asset or liability (for example, interest rates and yield curves observable at commonly quoted intervals, volatilities, prepayment speeds, loss severities, credit risks, and default rates); and d. Inputs that are derived principally from or corroborated by observable market data by correlation or other means (market-corroborated inputs). Level 3 - Level 3 inputs are unobservable inputs for the asset or liability. Unobservable inputs shall be used to measure fair value to the extent that observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at the measurement date. Therefore, unobservable inputs shall reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability (including assumptions about risk). Unobservable inputs shall be developed based on the best information available in the circumstances, which might include the reporting entity’s own data. However, the reporting entity’s own data used to develop unobservable inputs shall be adjusted if information is reasonably available without undue cost and effort that indicates that market participants would use different assumptions. A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Recurring Basis Fair values of investment securities and mortgage-backed securities were primarily measured using information from a third-party pricing service. This pricing service provides information by utilizing evaluated pricing models supported with market data information. Standard inputs include benchmark yields, reported trades, broker/dealer quotes, issuer spreads, benchmark securities, bids, offers, and reference data from market research publications. The following tables present the balances of assets measured on a recurring basis as of September 30, 2020 and December 31, 2019. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a recurring basis. Fair Value at Reporting Date Using Quoted Prices in Active Significant Markets Other Significant for Identical Observable Unobservable September 30, 2020: Fair Assets Inputs Inputs (in thousands) Value (Level 1) (Level 2) (Level 3) Mortgage-Backed Securities FHLMC $ 3,017 $ — $ 3,017 $ — SBA 7a Pools 3,249 — 3,249 — Total Investment Securities $ 6,266 $ — $ 6,266 $ — Fair Value at Reporting Date Using Quoted Prices in Active Significant Markets Other Significant for Identical Observable Unobservable December 31, 2019: Fair Assets Inputs Inputs (in thousands) Value (Level 1) (Level 2) (Level 3) Mortgage-Backed Securities FHLMC $ 2,645 $ — $ 2,645 $ — SBA 7a Pools 2,675 — 2,675 — Total Investment Securities $ 5,320 $ — $ 5,320 $ — Non-recurring Basis The Company has segregated all financial assets and liabilities that are measured at fair value on a non-recurring basis into the most appropriate level within the fair value hierarchy based on the inputs used to determine the fair value at the measurement date in the table below. The Company did not record any liabilities at fair value for which measurement of the fair value was made on a non-recurring basis. The fair value of the impaired loans is measured at the fair value of the collateral for collateral-dependent loans. Impaired loans are Level 2 assets measured using appraisals from external parties of the collateral less any prior liens. Repossessed assets are initially recorded at fair value less estimated costs to sell. The fair value of repossessed assets is based on property appraisals and an analysis of similar properties available. As such, the Company records repossessed assets as Level 2. The Company had no impaired loans or repossessed assets at September 30. 2020 or December 31, 2019. FASB ASC 825, Financial Instruments , requires disclosure of fair value information about financial instruments for which it is practicable to estimate fair value, whether or not recognized in the balance sheet. In cases where quoted market prices are not available, fair values are based on estimates using present value or other valuation techniques. Those techniques are significantly affected by the assumptions used, including the discount rate and estimates of future cash flows. The derived fair value estimates cannot be substantiated through comparison to independent markets and, in many cases, could not be realized in immediate settlement of the instrument. FASB ASC 825 excludes certain financial instruments and all non-financial instruments from its disclosure requirements. Further, the disclosures do not include estimated fair values for items which are not financial instruments but which represent significant value to the Company, including core deposit intangibles and other fee-generating operations of the business. Reasonable comparability of fair value estimates between financial institutions may not be possible due to the wide range of permitted valuation techniques and numerous assumptions involved. The aggregate fair value amounts presented do not, and are not intended to, represent an aggregate measure of the underlying fair value of the Company. The following methods and assumptions were used to estimate the fair value of each class of financial instruments for which it is practicable to estimate that value: Cash and Cash Equivalents - For those short-term instruments, the carrying amount is a reasonable estimate of fair value. Interest-Bearing Deposits in Banks- The carrying amount is a reasonable estimate of fair value. Investment Securities (including mortgage-backed securities) - For investment securities, including mortgage-backed securities, fair value equals quoted market price, if available. If a quoted market price is not available, fair value is estimated using quoted market prices for similar securities. Loans - The fair value of loans is estimated using discounted cash flow analyses, using the interest rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities. Loans Held-for-Sale - The loans held-for sale are recorded at the lower of aggregate cost or market value which is a reasonable estimate of fair value. FHLB Stock - The carrying amount is a reasonable estimate of fair value. Cash Surrender Value of Life Insurance - The carrying amount is a reasonable estimate of fair value. Accrued Interest Receivable and Accrued Interest Payable - The carrying amounts of accrued interest receivable and accrued interest payable approximate the fair values. Deposits - The fair value of savings accounts and certain money market deposits is the amount payable on demand at the reporting date (carrying value). The fair value of fixed maturity certificates of deposit is estimated using a discounted cash flow calculation that applies interest rates currently being offered for deposits of similar remaining maturities. Advances from the FHLB - The fair values of the Advances from the FHLB are estimated using discounted cash flow analyses, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements. Loan Commitments - For commitments to extend credit, fair value considers the difference between current levels of interest rates and the committed rates. The estimated fair values of the Company’s financial instruments are as follows as of September 30, 2020 and December 31, 2019 (in thousands): September 30, 2020 December 31, 2019 Carrying Fair Carrying Fair Amount Value Amount Value Financial Assets: Cash and Cash Equivalents $ 5,736 $ 5,736 $ 11,875 $ 11,875 Interest-Bearing Deposits in Banks 13,233 13,233 1,740 1,740 Investment Securities 6,266 6,266 5,320 5,320 Loans - Net 68,633 71,659 78,785 82,300 Loans Held-for-Sale 2,581 2,581 1,637 1,637 Accrued Interest Receivable 476 476 321 321 FHLB Stock 1,437 1,437 1,418 1,418 Cash Surrender Value of Life Insurance 4,114 4,114 4,044 4,044 Financial Liabilities: Deposits 55,563 57,337 58,045 59,053 Advances from FHLB 21,766 22,874 21,581 22,007 Accrued Interest Payable 78 78 137 137 The carrying amounts in the preceding table are included in the balance sheet under the applicable captions; accrued interest payable is included in accrued expenses and other liabilities in the balance sheet. The contract or notional amounts of the Company’s financial instruments with off balance sheet risk are disclosed in Note 7. |
Change in Corporate Form
Change in Corporate Form | 9 Months Ended |
Sep. 30, 2020 | |
Change in Corporate Form | |
Change in Corporate Form | Note 9 – Change in Corporate Form - On July 9, 2019, Eureka Homestead (the “Bank”) converted to a federal stock savings and loan association and established a stock holding company, Eureka Homestead Bancorp, Inc. (the “Company”), as parent of the Bank. In connection with the conversion, the Bank issued all of its common stock to the Company, becoming the wholly owned subsidiary of the Company, and the Company issued and sold shares of its capital stock pursuant to an independent valuation appraisal of the Bank and the Company. The stock was priced at $10.00 per share. In addition, the Bank’s board of directors adopted an employee stock ownership plan (ESOP) which subscribed for 8% of the common stock sold in the offering. The Conversion was completed on July 9, 2019 and resulted in the issuance of 1,429,676 common shares by the Company. The cost of the Conversion and issuing the capital stock totaled $1.2 million and was deducted from the proceeds of the offering. In accordance with OCC regulations, at the time of the Conversion, the Bank substantially restricted retained earnings by establishing a liquidation account. The liquidation account will be maintained for the benefit of eligible account holders who continue to maintain their accounts at the Bank after the Conversion. The liquidation account will be reduced annually to the extent that eligible account holders have reduced their qualifying deposits. Subsequent increases will not restore an eligible account holder’s interest in the liquidation account. In the event of a complete liquidation by the Bank, and only in such event, each eligible account holder will be entitled to receive a distribution from the liquidation account in an amount proportionate to the adjusted qualifying account balances then held. The Bank may not pay dividends if those dividends would reduce equity capital below the required liquidation account amount. The Conversion was accounted for as a change in corporate form with the historic basis of the Bank’s assets, liabilities and equity unchanged as a result. |
Employee Stock Ownership Plan
Employee Stock Ownership Plan | 9 Months Ended |
Sep. 30, 2020 | |
Employee Stock Ownership Plan | |
Employee Stock Ownership Plan | Note 10 – Employee Stock Ownership Plan - As part of the stock conversion, shares were purchased by the ESOP with a loan from Eureka Homestead Bancorp, Inc. All employees of the Bank meeting certain tenure requirements are entitled to participate in the ESOP. Compensation expense related to the ESOP for the three and nine month periods ended September 30, 2020 was $21,000 and $62,000, respectively. The stock price when issued was $10 per share. The fair value of the 108,000 unallocated shares was $1.0 million based on the average price of our common stock for the quarter ended September 30, 2020, of $ 9.47 per share. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | Note 11 - Subsequent Events - Management has evaluated subsequent events and transactions for potential recognition or disclosure in the financial statements through November 16, 2020, the date the financial statements were issued. The outbreak of Coronavirus Disease 2019 (“COVID-19”) has adversely impacted a broad range of industries in which the Company’s customers operate and potentially impaired their ability to fulfill their obligations to the Company. The World Health Organization has declared COVID-19 to be a global pandemic indicating that almost all public commerce and related business activities must be, to varying degrees, curtailed with the goal of decreasing the rate of new infections. The spread of the outbreak has caused disruptions in the U.S. economy and is highly likely to continue to disrupt banking and other financial activity in the areas in which the Company operates and could potentially create widespread business continuity issues for the Company. The full impact on our lending and other business activities as a result of new government and regulatory policies, programs and guidelines, as well as regulators’ reaction to such activities, remains uncertain. In October 2020, the Company repurchased an additional 10,500 of its common shares for $105,000. |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Recent Accounting Pronouncements | |
Emerging Growth Company Status | Emerging Growth Company Status The Company qualifies as an “emerging growth company” under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). For as long as the Company is an emerging growth company, it may choose to take advantage of exemptions from various reporting requirements applicable to other public companies. An emerging growth company may elect to use the extended transition period to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to private companies, but must make such election when the company is first required to file a registration statement. The Company has elected to use the extended transition period described above and intends to maintain its emerging growth company status as allowed under the JOBS Act. In February 2016, the FASB issued ASU 2016‑02, Leases (Topic 842), Conforming Amendments Related to Leases . This ASU amends the codification regarding leases in order to increase transparency and comparability. The ASU requires companies to recognize lease assets and liabilities on the balance sheet and disclose key information about leasing arrangements. A lessee would recognize a liability to make lease payments and a right-of-use asset representing its right to use the leased asset for the lease term. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. The adoption of this ASU is not expected to have a material effect on the Company’s Consolidated Financial Statements. In September 2016, the FASB issued ASU 2016‑13, Financial Instruments – Credit Losses (Topic 326), Measurement of Credit Losses on Financial Instruments . The amendments introduce an impairment model that is based on current expected credit losses (“CECL”), rather than incurred losses, to estimate credit losses on certain types of financial instruments (e.g., loans and held to maturity securities), including certain off-balance sheet financial instruments (e.g., commitments to extend credit and standby letters of credit that are not unconditionally cancellable). The CECL should consider historical information, current information, and reasonable and supportable forecasts, including estimates of prepayments, over the contractual term. An entity must use judgment in determining the relevant information and estimation methods that are appropriate in its circumstances. Financial instruments with similar risk characteristics may be grouped together when estimating the CECL. The ASU also amends the current available-for-sale security impairment model for debt securities whereby credit losses relating to available-for-sale debt securities should be recorded through an allowance for credit losses. For an emerging growth company, the amendments in this update, as amended through more recent related ASUs, are effective for fiscal years beginning after December 15, 2022, and interim periods within fiscal years beginning after December 15, 2023. The amendments will be applied through a modified retrospective approach, resulting in a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The Company is currently planning for the implementation of this accounting standard. It is too early to assess the impact this ASU will have on the Company’s Consolidated Financial Statements. In September 2018, the FASB issued ASU No. 2018‑07, Compensation – Stock Compensation (Topic 718): Improvements to Nonemployee Share-based Payment . The amendments in this ASU expand the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. For an emerging growth company, the amendments in this update are effective for fiscal years beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020. The Company is currently assessing the amendments but does not anticipate they will have a material impact on the Company’s Consolidated Financial Statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes , which simplifies the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplifies GAAP for other areas of Topic 740 by clarifying and amending existing guidance. The amendments in this ASU are effective for fiscal years, and interim periods with those fiscal years, beginning after December 15, 2020, with early adopting permitted. The Company is currently assessing the impact of the adoption of this standard on the Company’s consolidated financial position. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share | |
Schedule of earnings (loss) per common share | Three Months Ended Nine Months Ended September 30, September 30, (in thousands, except per share data) 2020 2020 Numerator: Net (loss) available to common shareholders $ (68) $ (111) Denominator: Weighted average common shares outstanding 1,341 1,420 Less: Average unallocated ESOP shares 108 109 Weighted average shares 1,233 1,311 Basic (loss) per common share $ (0.06) $ (0.08) |
Investment Securities (Tables)
Investment Securities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Investment Securities | |
Summary of amortized cost and fair values of investment securities available-for-sale | Gross Gross September 30, 2020: Amortized Unrealized Unrealized Fair (in thousands) Cost Gains (Losses) Value Mortgage-Backed Securities: FHLMC $ 2,948 $ 69 $ — $ 3,017 SBA 7a Pools 3,256 1 (8) 3,249 Total Investment Securities Available-for-Sale $ 6,204 $ 70 $ (8) $ 6,266 Gross Gross December 31, 2019: Amortized Unrealized Unrealized Fair (in thousands) Cost Gains (Losses) Value Mortgage-Backed Securities: FHLMC $ 2,664 $ — $ (19) $ 2,645 SBA 7a Pools 2,678 5 (8) 2,675 Total Investment Securities Available-for-Sale $ 5,342 $ 5 $ (27) $ 5,320 |
Summary of amortized cost and fair values of the investment securities available-for-sale by contractual maturity | Available-for-Sale September 30, 2020 Amortized Fair (in thousands) Cost Value Amounts Maturing: After One Year through Five Years $ — $ — After Five Years through Ten Years 3,327 3,319 After Ten Years 2,877 2,947 $ 6,204 $ 6,266 |
Summary of gross unrealized losses in investment securities | September 30, 2020 (in thousands) Less Than 12 Months 12 Months or More Totals Security Unrealized Unrealized Unrealized Description Fair Value (Losses) Fair Value (Losses) Fair Value (Losses) Mortgage-Backed FHLMC $ — $ — $ — $ — $ — $ — SBA 7a Pools 912 (8) — — 912 (8) $ 912 $ (8) $ — $ — $ 912 $ (8) December 31, 2019 (in thousands) Less Than 12 Months 12 Months or More Totals Security Unrealized Unrealized Unrealized Description Fair Value (Losses) Fair Value (Losses) Fair Value (Losses) Mortgage-Backed FHLMC $ 655 $ (4) $ 1,990 $ (15) $ 2,645 $ (19) SBA 7a Pools — — 1,692 (8) 1,692 (8) $ 655 $ (4) $ 3,682 $ (23) $ 4,337 $ (27) |
Loans Receivable and the Allo_2
Loans Receivable and the Allowance for Loan Losses (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Summary of loans receivable | September 30, December 31, (in thousands) 2020 2019 Mortgage Loans 1-4 Family $ 64,306 $ 73,591 Multifamily 3,184 3,567 Commercial real estate 762 1,117 Consumer Loans 210 209 68,462 78,484 Plus (Less): Unamortized Loan Fees/Costs 1,021 1,151 Allowance for Loan Losses (850) (850) Net Loans Receivable $ 68,633 $ 78,785 |
Summary of allowance for loan losses and recorded investment in loans receivable | Allowance for Loan Losses and Recorded Investment in Loans Receivable Mortgage- Mortgage- Mortgage- Commercial 1-4 Family Multifamily Real Estate Consumer Total Allowance for Loan Losses: Beginning Balance $ 812 $ 27 $ 11 $ — $ 850 Charge-Offs — — — — — Recoveries — — — — — Provision 1 3 (4) — — Ending Balance $ 813 $ 30 $ 7 $ — $ 850 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 813 $ 30 $ 7 $ — $ 850 Loans Receivable: Ending Balance $ 64,306 $ 3,184 $ 762 $ 210 $ 68,462 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 64,306 $ 3,184 $ 762 $ 210 $ 68,462 The allowance for loan losses for Mortgage 1‑4 Family Loans of $813,000 includes an unallocated portion of $477,000 as of September 30, 2020. Allowance for Loan Losses and Recorded Investment in Loans Receivable Mortgage- Mortgage- Mortgage- Commercial 1-4 Family Multifamily Real Estate Consumer Total Allowance for Loan Losses: Beginning Balance $ 807 $ 31 $ 12 $ — $ 850 Charge-Offs — — — — — Recoveries 9 — — — 9 Provision (4) (4) (1) — (9) Ending Balance $ 812 $ 27 $ 11 $ — $ 850 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 812 $ 27 $ 11 $ — $ 850 Loans Receivable: Ending Balance $ 73,591 $ 3,567 $ 1,117 $ 209 $ 78,484 Ending Balance: Individually Evaluated for Impairment $ — $ — $ — $ — $ — Collectively Evaluated for Impairment $ 73,591 $ 3,567 $ 1,117 $ 209 $ 78,484 |
Summary of credit quality indicators | Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at September 30, 2020 (in thousands) Non- Performing Performing Total Mortgage Loans: 1 to 4 Family $ 64,306 $ — $ 64,306 Multifamily 3,184 — 3,184 Commercial real estate 762 — 762 Non-Mortgage Loans: Consumer 210 — 210 Total $ 68,462 $ — $ 68,462 Credit Quality Indicators - Credit Risk Profile Based on Payment Activity at December 31, 2019 (in thousands) Non- Performing Performing Total Mortgage Loans: 1 to 4 Family $ 73,591 $ — $ 73,591 Multifamily 3,567 — 3,567 Commercial real estate 1,117 — 1,117 Non-Mortgage Loans: Consumer 209 — 209 Total $ 78,484 $ — $ 78,484 |
Summary of aged analysis of past due loans receivable | Aged Analysis of Past Due Loans Receivable at September 30, 2020 (in thousands) 30-59 60-89 90 Days or Total Days Days Greater Total Loans Past Due Past Due Past Due Past Due Current Receivable Mortgage Loans: 1 to 4 Family $ — $ 87 $ — $ 87 $ 64,219 $ 64,306 Multifamily — — — — 3,184 3,184 Commercial real estate — — — — 762 762 Non-Mortgage Loans: Consumer — — — — 210 210 Total $ — $ 87 $ — $ 87 $ 68,375 $ 68,462 Aged Analysis of Past Due Loans Receivable at December 31, 2019 (in thousands) 30-59 60-89 90 Days or Total Days Days Greater Total Loans Past Due Past Due Past Due Past Due Current Receivable Mortgage Loans: 1 to 4 Family $ — $ 89 $ — $ 89 $ 73,502 $ 73,591 Multifamily — — — — 3,567 3,567 Commercial real estate — — — — 1,117 1,117 Non-Mortgage Loans: Consumer — — — — 209 209 Total $ — $ 89 $ — $ 89 $ 78,395 $ 78,484 |
Summary of information pertaining to impaired loans | Impaired Loans September 30, 2020 (in thousands) Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized Mortgage Loans $ — $ — $ — $ — $ — Non-Mortgage Loans $ — $ — $ — $ — $ — Impaired Loans December 31, 2019 (in thousands) Unpaid Average Interest Recorded Principal Related Recorded Income Investment Balance Allowance Investment Recognized Mortgage Loans $ — $ — $ — $ — $ — Non-Mortgage Loans $ — $ — $ — $ — $ — |
Based on Loan Grades | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Summary of credit quality indicators | Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at September 30, 2020 (in thousands) Special Pass Watch Mention Substandard Doubtful Total Mortgage Loans: 1 to 4 Family $ 63,659 $ 30 $ 55 $ 562 $ — $ 64,306 Multifamily 3,184 — — — — 3,184 Commercial real estate 762 — — — — 762 Non-Mortgage Loans: Consumer 210 — — — — 210 Total $ 67,815 $ 30 $ 55 $ 562 $ — $ 68,462 Credit Quality Indicators - Credit Risk Profile Based on Loan Grades at December 31, 2019 (in thousands) Special Pass Watch Mention Substandard Doubtful Total Mortgage Loans: 1 to 4 Family $ 72,937 $ 87 $ — $ 567 $ — $ 73,591 Multifamily 3,567 — — — — 3,567 Commercial real estate 1,117 — — — — 1,117 Non-Mortgage Loans: Consumer 209 — — — — 209 Total $ 77,830 $ 87 $ — $ 567 $ — $ 78,484 |
COVID-19 Loan Modification | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Schedule of loan modifications due to Covid 19, not treated as TDRs | Number of Total Total Contracts Balance Percent Balance Modified Modified Modified Modifications as of September 30, 2020 (in thousands) Mortgage Loans 1-4 Family $ 66,186 6 $ 2,138 Multifamily 3,204 2 848 Commercial Real Estate 1,086 — — Total Loans $ 70,476 8 $ 2,986 |
Multiple COVID-19 Loan Modifications | |
Financing Receivable, Credit Quality Indicator [Line Items] | |
Schedule of loan modifications due to Covid 19, not treated as TDRs | Total Number of Balance Modifications as of October 31, 2020 Contracts Multiple (in thousands) Modified Modifications Mortgage Loans 1-4 Family 1 $ 430 Multifamily — — Commercial Real Estate — — Total Loans 1 $ 430 |
Regulatory Matters (Tables)
Regulatory Matters (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Regulatory Matters | |
Schedule of actual and required capital amounts and ratios | To be Well Capitalized Under For Capital Prompt Corrective September 30, 2020: Actual Adequacy Purposes Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 19,586 43.76 % $ 3,581 8.00 % $ 4,476 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 19,023 42.50 % $ 2,686 6.00 % $ 3,581 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 19,023 42.50 % $ 2,014 4.50 % $ 2,910 6.50 % Tier 1 Leverage Capital (to Adjusted Total Assets) $ 19,023 18.26 % $ 4,166 4.00 % $ 5,208 5.00 % To be Well Capitalized Under For Capital Prompt Corrective December 31, 2019: Actual Adequacy Purposes Action Provisions (dollars in thousands) Amount Ratio Amount Ratio Amount Ratio Total Capital (to Risk Weighted Assets) $ 19,568 38.94 % $ 4,020 8.00 % $ 5,026 10.00 % Tier 1 Capital (to Risk Weighted Assets) $ 18,938 37.68 % $ 3,015 6.00 % $ 4,020 8.00 % Common Equity Tier 1 Capital (to Risk Weighted Assets) $ 18,938 37.68 % $ 2,262 4.50 % $ 3,267 6.50 % Tier 1 Leverage Capital (to Adjusted Total Assets) $ 18,938 17.47 % $ 4,336 4.00 % $ 5,420 5.00 % |
Schedule of reconciliation of capital | September 30, December 31, (in thousands) 2020 2019 Total Equity (Bank Only) $ 19,072 $ 18,920 Unrealized (Gains) Losses on Securities Available-for-Sale, Net (49) 18 Tangible, Tier 1 Capital and Common Equity Tier 1 19,023 18,938 Allowance for Loan Losses Included in Capital 563 630 Total Capital $ 19,586 $ 19,568 |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Values of Financial Instruments | |
Summary of assets measured on a recurring basis | Fair Value at Reporting Date Using Quoted Prices in Active Significant Markets Other Significant for Identical Observable Unobservable September 30, 2020: Fair Assets Inputs Inputs (in thousands) Value (Level 1) (Level 2) (Level 3) Mortgage-Backed Securities FHLMC $ 3,017 $ — $ 3,017 $ — SBA 7a Pools 3,249 — 3,249 — Total Investment Securities $ 6,266 $ — $ 6,266 $ — Fair Value at Reporting Date Using Quoted Prices in Active Significant Markets Other Significant for Identical Observable Unobservable December 31, 2019: Fair Assets Inputs Inputs (in thousands) Value (Level 1) (Level 2) (Level 3) Mortgage-Backed Securities FHLMC $ 2,645 $ — $ 2,645 $ — SBA 7a Pools 2,675 — 2,675 — Total Investment Securities $ 5,320 $ — $ 5,320 $ — |
Summary of estimated fair values of the Homestead’s financial instruments | September 30, 2020 December 31, 2019 Carrying Fair Carrying Fair Amount Value Amount Value Financial Assets: Cash and Cash Equivalents $ 5,736 $ 5,736 $ 11,875 $ 11,875 Interest-Bearing Deposits in Banks 13,233 13,233 1,740 1,740 Investment Securities 6,266 6,266 5,320 5,320 Loans - Net 68,633 71,659 78,785 82,300 Loans Held-for-Sale 2,581 2,581 1,637 1,637 Accrued Interest Receivable 476 476 321 321 FHLB Stock 1,437 1,437 1,418 1,418 Cash Surrender Value of Life Insurance 4,114 4,114 4,044 4,044 Financial Liabilities: Deposits 55,563 57,337 58,045 59,053 Advances from FHLB 21,766 22,874 21,581 22,007 Accrued Interest Payable 78 78 137 137 |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator: | ||||
Net (loss) available to common shareholders | $ (68) | $ (111) | ||
Denominator | ||||
Weighted average common shares outstanding | 1,341 | 1,420 | ||
Less: Average unallocated ESOP shares | 108 | 109 | ||
Weighted average shares | 1,233 | 1,311 | ||
Basic (loss) per common share | $ (0.06) | $ 0.04 | $ (0.08) | $ 0.09 |
Investment Securities - Amortiz
Investment Securities - Amortized cost and fair values (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | $ 6,204 | $ 5,342 |
Gross Unrealized Gains | 70 | 5 |
Gross Unrealized (Losses) | (8) | (27) |
Fair Value | 6,266 | 5,320 |
SBA 7a Pools | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 3,256 | 2,678 |
Gross Unrealized Gains | 1 | 5 |
Gross Unrealized (Losses) | (8) | (8) |
Fair Value | 3,249 | 2,675 |
FHLMC | Mortgage-Backed Securities | ||
Debt Securities, Available-for-sale, Fair Value to Amortized Cost [Abstract] | ||
Amortized Cost | 2,948 | 2,664 |
Gross Unrealized Gains | 69 | |
Gross Unrealized (Losses) | (19) | |
Fair Value | $ 3,017 | $ 2,645 |
Investment Securities - Contrac
Investment Securities - Contractual maturity (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Amortized Cost | ||
After Five Years through Ten Years | $ 3,327,000 | |
After Ten Years | 2,877,000 | |
Amortized Cost | 6,204,000 | |
Fair Value | ||
After Five Years through Ten Years | 3,319,000 | |
After Ten Years | 2,947,000 | |
Fair value | 6,266,000 | |
Securities pledged to secure advances from the FHLB | $ 0 | $ 0 |
Investment Securities - Gross u
Investment Securities - Gross unrealized losses (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Fair Value | ||
Less Than 12 Months | $ 912,000 | $ 655,000 |
12 Months or More | 3,682,000 | |
Total fair value | 912,000 | 4,337,000 |
Unrealized (Losses) | ||
Less Than 12 Months | (8,000) | (4,000) |
12 Months or More | (23,000) | |
Total unrealized (losses) | (8,000) | (27,000) |
Declines deemed to be other-than-temporary | 0 | 0 |
SBA 7a Pools | ||
Fair Value | ||
Less Than 12 Months | 912,000 | |
12 Months or More | 1,692,000 | |
Total fair value | 912,000 | 1,692,000 |
Unrealized (Losses) | ||
Less Than 12 Months | (8,000) | |
12 Months or More | (8,000) | |
Total unrealized (losses) | $ (8,000) | (8,000) |
FHLMC | Mortgage-Backed Securities | ||
Fair Value | ||
Less Than 12 Months | 655,000 | |
12 Months or More | 1,990,000 | |
Total fair value | 2,645,000 | |
Unrealized (Losses) | ||
Less Than 12 Months | (4,000) | |
12 Months or More | (15,000) | |
Total unrealized (losses) | $ (19,000) |
Loans Receivable and the Allo_3
Loans Receivable and the Allowance for Loan Losses - Loans receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable | $ 68,462 | $ 78,484 |
Unamortized Loan Fees/Costs | 1,021 | 1,151 |
Allowance for Loan Losses | (850) | (850) |
Net Loans Receivable | 68,633 | 78,785 |
Mortgage - 1-4 Family | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable | 64,306 | 73,591 |
Mortgage - Multifamily | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable | 3,184 | 3,567 |
Mortgage - Commercial real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable | 762 | 1,117 |
Consumer Loans | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Loans receivable | $ 210 | $ 209 |
Loans Receivable and the Allo_4
Loans Receivable and the Allowance for Loan Losses - Allowance (Details) - USD ($) | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Allowance for Loan Losses: | ||||
Beginning Balance | $ 850,000 | $ 850,000 | ||
Recoveries | 9,000 | |||
Provision | (9,000) | |||
Ending Balance | 850,000 | 850,000 | ||
Ending Balance: Collectively Evaluated for Impairment | $ 850,000 | $ 850,000 | ||
Loans Receivable: Ending Balance | 68,462,000 | 78,484,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 68,462,000 | 78,484,000 | ||
Allowance for loan losses, unallocated portion | 850,000 | 850,000 | 850,000 | 850,000 |
Loan balances outstanding on non-accrual status | 0 | 0 | ||
Mortgage - 1-4 Family | ||||
Allowance for Loan Losses: | ||||
Beginning Balance | 812,000 | 807,000 | ||
Recoveries | 9,000 | |||
Provision | 1,000 | (4,000) | ||
Ending Balance | 813,000 | 812,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 813,000 | 812,000 | ||
Loans Receivable: Ending Balance | 64,306,000 | 73,591,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 64,306,000 | 73,591,000 | ||
Allowance for loan losses, unallocated portion | 813,000 | 812,000 | 813,000 | 812,000 |
Mortgage - Multifamily | ||||
Allowance for Loan Losses: | ||||
Beginning Balance | 27,000 | 31,000 | ||
Provision | 3,000 | (4,000) | ||
Ending Balance | 30,000 | 27,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 30,000 | 27,000 | ||
Loans Receivable: Ending Balance | 3,184,000 | 3,567,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 3,184,000 | 3,567,000 | ||
Allowance for loan losses, unallocated portion | 30,000 | 27,000 | 30,000 | 27,000 |
Mortgage - Commercial real estate | ||||
Allowance for Loan Losses: | ||||
Beginning Balance | 11,000 | 12,000 | ||
Provision | (4,000) | (1,000) | ||
Ending Balance | 7,000 | 11,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 7,000 | 11,000 | ||
Loans Receivable: Ending Balance | 762,000 | 1,117,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 762,000 | 1,117,000 | ||
Allowance for loan losses, unallocated portion | 7,000 | 11,000 | 7,000 | 11,000 |
Consumer Loans | ||||
Allowance for Loan Losses: | ||||
Loans Receivable: Ending Balance | 210,000 | 209,000 | ||
Ending Balance: Collectively Evaluated for Impairment | 210,000 | 209,000 | ||
Unallocated finance receivable | ||||
Allowance for Loan Losses: | ||||
Beginning Balance | 437,000 | |||
Ending Balance | 477,000 | 437,000 | ||
Allowance for loan losses, unallocated portion | $ 477,000 | $ 437,000 | $ 477,000 | $ 437,000 |
Loans Receivable and the Allo_5
Loans Receivable and the Allowance for Loan Losses - Aged analysis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | $ 68,462 | $ 78,484 |
Loans over 90 days past due and still accruing | 0 | 0 |
Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 68,462 | 78,484 |
Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 67,815 | 77,830 |
Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 30 | 87 |
Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 55 | |
Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 562 | 567 |
Mortgage - 1-4 Family | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 64,306 | 73,591 |
Mortgage - 1-4 Family | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 64,306 | 73,591 |
Mortgage - 1-4 Family | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 63,659 | 72,937 |
Mortgage - 1-4 Family | Watch | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 30 | 87 |
Mortgage - 1-4 Family | Special Mention | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 55 | |
Mortgage - 1-4 Family | Substandard | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 562 | 567 |
Mortgage - Multifamily | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 3,184 | 3,567 |
Mortgage - Multifamily | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 3,184 | 3,567 |
Mortgage - Multifamily | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 3,184 | 3,567 |
Mortgage - Commercial real estate | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 762 | 1,117 |
Mortgage - Commercial real estate | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 762 | 1,117 |
Mortgage - Commercial real estate | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 762 | 1,117 |
Consumer Loans | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 210 | 209 |
Consumer Loans | Performing | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | 210 | 209 |
Consumer Loans | Pass | ||
Financing Receivable, Credit Quality Indicator [Line Items] | ||
Loans receivable | $ 210 | $ 209 |
Loans Receivable and the Allo_6
Loans Receivable and the Allowance for Loan Losses - Nonaccrual status (Details) - USD ($) | Sep. 30, 2020 | Dec. 31, 2019 |
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | $ 87,000 | $ 89,000 |
Current | 68,375,000 | 78,395,000 |
Total Loans Receivable | 68,462,000 | 78,484,000 |
Loan balances outstanding on non-accrual status | 0 | 0 |
Mortgage - 1-4 Family | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 87,000 | 89,000 |
Current | 64,219,000 | 73,502,000 |
Total Loans Receivable | 64,306,000 | 73,591,000 |
Mortgage - Multifamily | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 3,184,000 | 3,567,000 |
Total Loans Receivable | 3,184,000 | 3,567,000 |
Mortgage - Commercial real estate | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 762,000 | 1,117,000 |
Total Loans Receivable | 762,000 | 1,117,000 |
Consumer Loans | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Current | 210,000 | 209,000 |
Total Loans Receivable | 210,000 | 209,000 |
60-89 Days Past Due | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | 87,000 | 89,000 |
60-89 Days Past Due | Mortgage - 1-4 Family | ||
Financing Receivable, Recorded Investment, Aging [Abstract] | ||
Total Past Due | $ 87,000 | $ 89,000 |
Loans Receivable and the Allo_7
Loans Receivable and the Allowance for Loan Losses - TDRs (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Financing Receivable, Troubled Debt Restructuring [Line Items] | ||
Debt restructurings defaulted subsequent to the restructuring | $ 0 | $ 0 |
Loans Receivable and the Allo_8
Loans Receivable and the Allowance for Loan Losses - Covid 19 Loan modifications (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020USD ($)contract | Dec. 31, 2019USD ($) | |
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 68,462 | $ 78,484 |
COVID-19 Loan Modification | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 70,476 | |
Number of Contracts | contract | 8 | |
Total Balance Modified | $ 2,986 | |
Percent Modified | 4.20% | |
COVID-19 Loan Modification | CARES Act | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Number of Contracts | contract | 71 | |
Total Balance Modified | $ 15,300 | |
Mortgage - 1-4 Family | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | 64,306 | 73,591 |
Mortgage - 1-4 Family | COVID-19 Loan Modification | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 66,186 | |
Number of Contracts | contract | 6 | |
Total Balance Modified | $ 2,138 | |
Percent Modified | 3.20% | |
Mortgage - Multifamily | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 3,184 | 3,567 |
Mortgage - Multifamily | COVID-19 Loan Modification | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 3,204 | |
Number of Contracts | contract | 2 | |
Total Balance Modified | $ 848 | |
Percent Modified | 26.50% | |
Mortgage - Commercial real estate | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 762 | $ 1,117 |
Mortgage - Commercial real estate | COVID-19 Loan Modification | ||
Loans and Leases Receivable Disclosure [Line Items] | ||
Total Balance | $ 1,086 | |
Percent Modified | 0.00% |
Loans Receivable and the Allo_9
Loans Receivable and the Allowance for Loan Losses - Multiple covid 19 Loan modifications program (Details) - Subsequent Event - Multiple COVID-19 Loan Modifications | 1 Months Ended |
Oct. 31, 2020USD ($)contract | |
Loans and Leases Receivable Disclosure [Line Items] | |
Number of Contracts | contract | 1 |
Total Balance Modified | $ | $ 430,000 |
Mortgage - 1-4 Family | |
Loans and Leases Receivable Disclosure [Line Items] | |
Number of Contracts | contract | 1 |
Total Balance Modified | $ | $ 430,000 |
Regulatory Matters - Capital am
Regulatory Matters - Capital amounts and ratios (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Total risk-based capital to risk-weighted assets | ||
Actual amount | $ 19,586 | $ 19,568 |
Actual ratio | 43.76 | 38.94 |
Capital Adequacy Purposes, amount | $ 3,581 | $ 4,020 |
Capital Adequacy Purposes, ratio | 8 | 8 |
To be Well Capitalized Under Prompt Corrective Action Provisions, amount | $ 4,476 | $ 5,026 |
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 10 | 10 |
Tier I capital to risk- weighted assets | ||
Actual amount | $ 19,023 | $ 18,938 |
Actual ratio | 42.50 | 37.68 |
Capital Adequacy Purposes, amount | $ 2,686 | $ 3,015 |
Capital Adequacy Purposes, ratio | 6 | 6 |
To be Well Capitalized Under Prompt Corrective Action Provisions, amount | $ 3,581 | $ 4,020 |
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 8 | 8 |
Common equity Tier 1 capital to risk-weighted assets | ||
Actual amount | $ 19,023 | $ 18,938 |
Actual ratio | 42.50% | 37.68% |
Capital Adequacy Purposes, amount | $ 2,014 | $ 2,262 |
Capital Adequacy Purposes, ratio | 4.50% | 4.50% |
To be Well Capitalized Under Prompt Corrective Action Provisions, amount | $ 2,910 | $ 3,267 |
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 6.50% | 6.50% |
Tier I Leverage capital to adjusted total assets | ||
Actual amount | $ 19,023 | $ 18,938 |
Actual ratio | 18.26 | 17.47 |
Capital Adequacy Purposes, amount | $ 4,166 | $ 4,336 |
Capital Adequacy Purposes, ratio | 4 | 4 |
To be Well Capitalized Under Prompt Corrective Action Provisions, amount | $ 5,208 | $ 5,420 |
To be Well Capitalized Under Prompt Corrective Action Provisions, ratio | 5 | 5 |
Regulatory Matters - Reconcilia
Regulatory Matters - Reconciliation of capital (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Regulatory Matters | ||
Total Equity (Bank Only) | $ 19,072 | $ 18,920 |
Unrealized (Gains) Losses On Securities Available-for-Sale, Net | (49) | 18 |
Tangible Tier 1 Capital and Common Equity Tier 1 | 19,023 | 18,938 |
Allowance for Loan Losses Included in Capital | 563 | 630 |
Total Capital | $ 19,586 | $ 19,568 |
Commitments and Contingencies (
Commitments and Contingencies (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | |
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Loans sold to investors | $ 8,600,000 | |
Mortgage loan sold, recourse period from date of sale | 4 months | |
Mortgage loan sold, continuous default period | 90 days | |
Mortgage loan sold, prepayment period | 180 days | |
Indemnification amount in addition to service lease premium | $ 5,000 | |
Recourse for number of days after date of sale | 180 days | |
Loan origination commitments | ||
Purchase Commitment, Excluding Long-term Commitment [Line Items] | ||
Off-balance-sheet risk, amount, liability | $ 102,000 | $ 524,000 |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Recurring (Details) - Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Assets measured on a recurring basis | ||
Total Investment Securities | $ 6,266 | $ 5,320 |
Mortgage-Backed Securities | FHLMC | ||
Assets measured on a recurring basis | ||
Total Investment Securities | 3,017 | 2,645 |
SBA 7a Pools | ||
Assets measured on a recurring basis | ||
Total Investment Securities | 3,249 | 2,675 |
Level 2 | ||
Assets measured on a recurring basis | ||
Total Investment Securities | 6,266 | 5,320 |
Level 2 | Mortgage-Backed Securities | FHLMC | ||
Assets measured on a recurring basis | ||
Total Investment Securities | 3,017 | 2,645 |
Level 2 | SBA 7a Pools | ||
Assets measured on a recurring basis | ||
Total Investment Securities | $ 3,249 | $ 2,675 |
Fair Values of Financial Inst_4
Fair Values of Financial Instruments - Estimated fair values (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Financial Assets: | ||
Cash and Cash Equivalents | $ 5,736 | $ 11,875 |
Interest-Bearing Deposits in Banks | 13,233 | 1,740 |
Investment Securities | 6,266 | 5,320 |
Loans - Net | 68,633 | 78,785 |
Loans Held-for-Sale | 2,581 | 1,637 |
Accrued Interest Receivable | 476 | 321 |
FHLB Stock | 1,437 | 1,418 |
Cash Surrender Value of Life Insurance | 4,114 | 4,044 |
Financial Liabilities: | ||
Deposits | 55,563 | 58,045 |
Advances from FHLB | 21,766 | 21,581 |
Accrued Interest Payable | 78 | 137 |
Fair Value | ||
Financial Assets: | ||
Cash and Cash Equivalents | 5,736 | 11,875 |
Interest-Bearing Deposits in Banks | 13,233 | 1,740 |
Investment Securities | 6,266 | 5,320 |
Loans - Net | 71,659 | 82,300 |
Loans Held-for-Sale | 2,581 | 1,637 |
Accrued Interest Receivable | 476 | 321 |
FHLB Stock | 1,437 | 1,418 |
Cash Surrender Value of Life Insurance | 4,114 | 4,044 |
Financial Liabilities: | ||
Deposits | 57,337 | 59,053 |
Advances from FHLB | 22,874 | 22,007 |
Accrued Interest Payable | $ 78 | $ 137 |
Change in Corporate Form (Detai
Change in Corporate Form (Details) $ / shares in Units, $ in Millions | Jul. 09, 2019USD ($)$ / sharesshares |
Change in Corporate Form | |
Share price | $ / shares | $ 10 |
Percentage of common shares | 8.00% |
Common stock offering, shares issued | shares | 1,429,676 |
Common stock offering | $ | $ 1.2 |
Employee Stock Ownership Plan (
Employee Stock Ownership Plan (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2020 | Mar. 24, 2020 | |
Employee Stock Ownership Plan | |||
ESOP, compensation expense | $ 21,000 | $ 62,000 | |
Stock price when issued | $ 10 | ||
ESOP, number of shares | 108,000 | 108,000 | |
ESOP, fair value of shares | $ 1,000,000 | $ 1,000,000 | |
ESOP, weighted average price of common stock | $ 9.47 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 9 Months Ended |
Oct. 31, 2020 | Sep. 30, 2020 | |
Subsequent Event [Line Items] | ||
Stock Shares Repurchased | $ 1,097,000 | |
Common Stock | ||
Subsequent Event [Line Items] | ||
Stock Shares Repurchased | $ 1,000 | |
Subsequent Event | Common Stock | ||
Subsequent Event [Line Items] | ||
Stock Shares Repurchased (in Shares) | 10,500 | |
Stock Shares Repurchased | $ 105,000 |