10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2018

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-38224

PDL Community Bancorp

(Exact Name of Registrant as Specified in its Charter)

Federal	82-2857928
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2244 Westchester Avenue Bronx, NY	10462
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (718) 931-9000

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes  ☒    No  ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ☒    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☐  (Do not check if a smaller reporting company)	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ☐    No  ☒

As of August 9, 2018, the registrant had 18,463,028 shares of common stock, $0.01 par value per share, outstanding.

Table of Contents

		Page
PART I.	FINANCIAL INFORMATION	1
Item 1.	Consolidated Financial Statements (Unaudited)	1
	Consolidated Statements of Financial Condition	1
	Consolidated Statements of Income	2
	Consolidated Statements of Comprehensive Income	3
	Consolidated Statements of Stockholders’ Equity	4
	Consolidated Statements of Cash Flows	5
	Notes to Unaudited Consolidated Financial Statements	6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	41
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	55
Item 4.	Controls and Procedures	55
PART II.	OTHER INFORMATION	56
Item 1.	Legal Proceedings	56
Item 1A.	Risk Factors	56
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	56
Item 3.	Defaults Upon Senior Securities	56
Item 4.	Mine Safety Disclosures	56
Item 5.	Other Information	56
Item 6.	Exhibits	57
Signatures		59

i

PART I—FINANCIAL INFORMATION

Item 1.  Consolidated Financial Statements.

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Financial Condition

June 30, 2018 and December 31, 2017

(Dollars in thousands, except share data)

	June 30,			December 31,
	2018			2017
	(Unaudited)
ASSETS
Cash and due from banks (Note 2):
Cash	$	7,088		$	24,746
Interest-bearing deposits in banks		42,094			34,978
Total cash and cash equivalents		49,182			59,724
Available-for-sale securities, at fair value (Note 3)		28,144			28,897
Loans receivable, net (Note 4)		850,426			798,703
Accrued interest receivable		3,350			3,335
Premises and equipment, net (Note 5)		28,366			27,172
Federal Home Loan Bank Stock (FHLB), at cost		2,617			1,511
Deferred tax assets (Note 8)		3,805			3,909
Other assets		2,923			2,271
Total assets	$	968,813		$	925,522
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Deposits (Note 6)	$	753,255		$	713,985
Accrued interest payable		141			42
Advance payments by borrowers for taxes and insurance		5,491			5,025
Advances from the Federal Home Loan Bank and others (Note 7)		37,775			36,400
Other liabilities		5,573			5,285
Total liabilities		802,235			760,737
Commitments and contingencies (Note 11)
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued		—			—
Common stock, $0.01 par value; 50,000,000  shares authorized; 18,463,028 shares    issued and outstanding		185			185
Additional paid-in-capital		84,488			84,351
Retained earnings		96,495			94,855
Accumulated other comprehensive loss (Note 14)		(8,076	)		(7,851	)
Unearned compensation - ESOP; 651,375 shares (Note 9)		(6,514	)		(6,755	)
Total stockholders' equity		166,578			164,785
Total liabilities and stockholders' equity	$	968,813		$	925,522

The accompanying notes are an integral part of the consolidated financial statements.

1

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Income

Three and Six Months Ended June 30, 2018 and 2017

(Dollars in thousands, except share data)

	For the Three Months Ended June 30,				For the Six Months Ended June 30,
	2018		2017		2018		2017
	(Unaudited)				(Unaudited)
Interest and dividend income:
Interest on loans receivable	$	11,053	$	9,581	$	21,439	$	18,172
Interest and dividends on investment securities and FHLB stock		330		123		654		325
Total interest and dividend income		11,383		9,704		22,093		18,497
Interest expense:
Interest on certificates of deposit		1,847		1,428		3,597		2,744
Interest on other deposits		199		161		383		311
Interest on borrowings		204		32		303		61
Total interest expense		2,250		1,621		4,283		3,116
Net interest income		9,133		8,083		17,810		15,381
Provision for loan losses (Note 4)		337		207		431		259
Net interest income after provision for loan losses		8,796		7,876		17,379		15,122
Noninterest income:
Service charges and fees		214		225		437		454
Brokerage commissions		42		168		138		286
Late and prepayment charges		52		235		263		446
Other		216		256		571		456
Total noninterest income		524		884		1,409		1,642
Noninterest expense:
Compensation and benefits		4,563		3,956		8,918		7,785
Occupancy expense		1,717		1,400		3,208		2,826
Data processing expenses		300		413		708		866
Direct loan expenses		152		184		307		379
Insurance and surety bond premiums		99		79		188		161
Office supplies, telephone and postage		352		282		652		536
FDIC deposit insurance assessment		66		58		134		124
Other operating expenses		1,206		623		2,599		1,414
Total noninterest expense		8,455		6,995		16,714		14,091
Income before income taxes		865		1,765		2,074		2,673
Provision for income taxes (Note 8)		166		641		434		986
Net income	$	699	$	1,124	$	1,640	$	1,687
Earnings per share for the period January 1, 2018 to June 30, 2018: (Note 10)
Basic	$	0.04	N/A		$	0.09	N/A
Diluted	$	0.04	N/A		$	0.09	N/A

The accompanying notes are an integral part of the consolidated financial statements.

2

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Comprehensive Income

Three and Six Months Ended June 30, 2018 and 2017

(In thousands)

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Net income	$	699		$	1,124		$	1,640		$	1,687
Net change in unrealized gains (losses) on securities available-for-sale:
Unrealized gain (losses)		(5	)		115			(174	)		24
Income tax effect		1			(39	)		(8	)		(9	)
Unrealized gains (losses) on securities, net of tax		(4	)		76			(182	)		15
Pension benefit liability adjustment:
Net gain (loss)		(31	)		—			(65	)		(31	)
Income tax effect		11			—			22			11
Pension liability adjustment, net of tax		(20	)		—			(43	)		(20	)
Total other comprehensive income (loss), net of tax		(24	)		76			(225	)		(5	)
Total comprehensive income	$	675		$	1,200		$	1,415		$	1,682

The accompanying notes are an integral part of the consolidated financial statements.

3

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Stockholders’ Equity

Six Months Ended June 30, 2018 and 2017

(Dollars in thousands, except share data)

									Accumulated			Unallocated
					Additional				Other			Common
	Common Stock				Paid-in		Retained		Comprehensive			Stock
	Shares		Amount		Capital		Earnings		Loss			of ESOP			Total
Balance, December 31, 2016		—	$	—	$	—	$	99,242	$	(6,250	)	$	—		$	92,992
Net income		—		—		—		1,687		—			—			1,687
Other comprehensive loss, net of tax		—		—		—		—		(5	)		—			(5	)
Balance, June 30, 2017 (Unaudited)		—	$	—	$	—	$	100,929	$	(6,255	)	$	—		$	94,674
Balance, December 31, 2017		18,463,028	$	185	$	84,351	$	94,855	$	(7,851	)	$	(6,755	)	$	164,785
Net income		—		—		—		1,640		—			—			1,640
Other comprehensive loss, net of tax		—		—		—		—		(225	)		—			(225	)
ESOP shares committed to be released    (24,126 shares)		—		—		137		—		—			241			378
Balance, June 30, 2018 (Unaudited)		18,463,028	$	185	$	84,488	$	96,495	$	(8,076	)	$	(6,514	)	$	166,578

The accompanying notes are an integral part of the consolidated financial statements.

4

PDL Community Bancorp and Subsidiaries

Consolidated Statements of Cash Flows

Six Months Ended June 30, 2018 and 2017

(In thousands)

	For the Six Months Ended
	June 30,
	2018					2017
	(Unaudited)
Cash Flows From Operating Activities:
Net income	$		1,640			$		1,687
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of premiums on securities, net			6					7
Loss on sale of loans, net			54					—
Loss on sale of available-for-sale securities			—					6
Gain on sale of other real estate owned			—					—
Provision for loan losses			431					259
Depreciation and amortization			854					803
Deferred income taxes			117					4
ESOP compensation			378					—
Changes in assets and liabilities:
Decrease (increase) in accrued interest receivable			(15		)			(210	)
Increase in other assets			(652		)			(2,777	)
Increase (decrease) in accrued interest payable			99					3
Net increase in other liabilities			690					1,968
Net cash provided by operating activities			3,602					1,750
Cash Flows From Investing Activities:
Proceeds from redemption of FHLB Stock			—					6,492
Purchases of FHLB Stock			(1,106		)			(6,816	)
Proceeds from sale of available-for-sale securities			—					20,411
Proceeds from maturities, calls and principal repayments on available-for-sale securities			573					2,622
Proceeds from sales of loans			4,761					—
Net increase in loans			(56,969		)			(90,631	)
Purchases of premises and equipment			(2,048		)			(375	)
Net cash used in investing activities			(54,789		)			(68,297	)
Cash Flows From Financing Activities:
Net increase in deposits		39,270					59,327
Proceeds from advances		21,375					1,567,000
Repayments of advances		(20,000		)			(1,562,000		)
Net cash provided by financing activities		40,645					64,327
Net decrease in cash and cash equivalents		(10,542		)			(2,220		)
Cash and Cash Equivalents:
Beginning		59,724					11,716
Ending	$	49,182				$	9,496
Supplemental Disclosures:
Cash paid during the period:
Interest	$	4,184				$	3,113
Income taxes	$	132				$	549

The accompanying notes are an integral part of the consolidated financial statements.

5

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies

Basis of Presentation and Consolidation:

The unaudited interim Consolidated Financial Statements of PDL Community Bancorp (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”).  In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included.  Interim results are not necessarily reflective of the results of the entire year.  The accompanying unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2017 included in the Company’s annual report on Form 10-K.

The unaudited interim Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiary Ponce Bank (the “Bank”), and the Bank’s wholly-owned subsidiaries.  The Bank’s subsidiaries consist of PFS Service Corp., which owns some of the Bank’s real property, and Ponce De Leon Mortgage Corp., which is a mortgage banking entity.  All significant intercompany transactions and balances have been eliminated in consolidation.

Reorganization and Stock Offering:

On September 29, 2017, Ponce De Leon Federal Bank reorganized into a two-tier mutual holding company structure with a mid-tier stock holding company.  The Company sold 8,308,362 shares of common stock at $10.00 per share, including 723,751 shares purchased by the Company’s Employee Stock Ownership Plan (“ESOP”).  In addition, the Company issued 9,545,387 shares to Ponce Bank Mutual Holding Company, the Company’s mutual holding company parent (the “MHC”) and 609,279 shares to The Ponce De Leon Foundation (“Foundation”), a charitable foundation that was formed in connection with the stock offering and is dedicated to supporting charitable organizations operating in the Bank’s local community.  A total of 18,463,028 shares of common stock were outstanding following the completion of the stock offering. As a result of the reorganization, the reporting entity changed from Ponce De Leon Federal Bank to PDL Community Bancorp.

The direct costs of the Company’s stock offering of $4,988 were deferred and deducted from the proceeds of the offering.

Nature of Operations:

The Bank is a federally chartered savings association headquartered in the Bronx, New York.  Ponce De Leon Federal Bank was originally chartered in 1960 as a federally chartered mutual savings and loan association under the name Ponce De Leon Federal Savings and Loan Association.  In 1985, the Bank changed its name to “Ponce De Leon Federal Savings Bank.”  In 1997, the Bank changed its name again to “Ponce De Leon Federal Bank.”   Upon the completion of its reorganization into the MHC, the assets and liabilities of Ponce De Leon Federal Bank were transferred to and assumed by the Bank, a federally chartered stock savings association, owned 100% by PDL Community Bancorp and known as and conducting business under the name “Ponce Bank.” The Bank will continue to be subject to comprehensive regulation and examination by the Office of Comptroller of the Currency (the “OCC”).

The Bank’s business is conducted through the administrative office and 13 branch offices.  The banking offices are located in the Bronx, Manhattan, Queens and Brooklyn, New York and Union City, New Jersey.  The primary market area currently consists of the New York City metropolitan area.

The Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of one-to-four family residential (both investor-owned and owner-occupied), multifamily residential, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans. The Bank also invests in securities, which have historically consisted of U.S. government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as, mortgage-backed securities and Federal Home Loan Bank stock.   The Bank offers a variety of deposit accounts, including demand, savings, money markets and certificates of deposit accounts.

6

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

The following is a summary of the Company’s significant accounting policies:   

Use of Estimates:  In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the consolidated statement of financial condition, and revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of loans held for sale, the valuation of deferred tax assets and investment securities, and the determination of pension benefit obligations.

Interim Financial Statements:  The interim consolidated financial statements at June 30, 2018, and for the three and six months ended June 30, 2018 and 2017 are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2018, or any other period.

Significant Group Concentrations of Credit Risk:  Most of the Bank's activities are with customers located within New York City. Accordingly, the ultimate collectability of a substantial portion of the Bank's loan portfolio is susceptible to changes in the local market conditions. Note 3 discusses the types of securities that the Bank invests in. Notes 4 and 11 discuss the types of lending that the Bank engages in, and other concentrations.

Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand and amounts due from banks (including items in process of clearing). For purposes of reporting cash flows, the Bank considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash flows from loans originated by the Bank, interest-bearing deposits in financial institutions, and deposits are reported net.

Securities:  Management determines the appropriate classification of securities at the date individual investment securities are acquired, and the appropriateness of such classification is reassessed at each statement of financial condition date.

Debt securities that management has the positive intent and ability to hold to maturity, if any, are classified as "held to maturity" and recorded at amortized cost. Trading securities, if any, are carried at fair value, with unrealized gains and losses recognized in earnings. Securities not classified as held to maturity or trading, are classified as "available for sale" and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss), net of tax. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the consolidated statement of income (loss) and 2) OTTI related to other factors, which is recognized in other comprehensive income (loss).

The credit loss is defined as the difference between the discounted present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific-identification method. The sale of a held-to-maturity security within three months of its maturity date or after collection of at least 85% of the principal outstanding at the time the security was acquired is considered a maturity for purposes of classification and disclosure.

7

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Federal Home Loan Bank Stock:  The Bank is a member of the Federal Home Loan Bank of New York (the “FHLB”).  Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.  

Loans Receivable:  Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at current unpaid principal balances, net of the allowance for loan losses and including net deferred loan origination fees and costs.

Interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments.  

A loan is moved to nonaccrual status in accordance with the Bank’s policy typically after 90 days of non-payment. The accrual of interest on mortgage and commercial loans is generally discontinued at the time the loan becomes 90 days past due unless the loan is well-secured and in process of collection. Consumer loans are typically charged-off no later than 120 days past due.  Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off if collection of principal or interest is considered doubtful.  All nonaccrual loans are considered impaired loans.  

All interest accrued but not received for loans placed on nonaccrual are reversed against interest income.  Interest received on such loans is accounted for on the cash basis or recorded against principal balances only, until qualifying for return to accrual.  Cash basis interest recognition is only applied on nonaccrual loans with a sufficient collateral margin to ensure no doubt with respect to the collectability of principal.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and remain current for a period of time (typically six months) and future payments are reasonably assured.

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impaired loans are measured for impairment using the fair value of the collateral, present value of cash flows, or the observable market price of the note.  Impairment measurement for all collateral dependent loans, excluding accruing TDR’s, is based on the fair value of collateral, less costs to sell, if necessary.  A loan is considered collateral dependent if repayment of the loan is expected to be provided solely by the sale or the operation of the underlying collateral.  

8

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

When the Bank modifies a loan in a TDR, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs, if repayment under the modified terms becomes doubtful.

The general component covers non‑impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced over a rolling 12 quarter average period. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  

When establishing the allowance for loan losses, management categorizes loans into risk categories reflecting individual borrower earnings, liquidity, leverage and cash flow, as well as the nature of underlying collateral. These risk categories and relevant risk characteristics are as follows:

Residential and Multifamily Mortgage Loans:  The majority of loans at the Bank are secured by first mortgages. Residential and multifamily mortgage loans are typically underwritten with loan-to-value ratios ranging from 65% to 90%. The primary risks involved in residential mortgages are the borrower’s loss of employment, or other significant event, that negatively impacts the source of repayment. Additionally, a serious decline in home values could jeopardize repayment in the event that the underlying collateral needs to be liquidated to pay off the loan.

Nonresidential Mortgage Loans:  Nonresidential mortgage loans are primarily secured by commercial buildings, office and industrial buildings, warehouses, small retail shopping centers and various special purpose properties, including hotels, restaurants and nursing homes. These loans are typically underwritten at no more than 75% loan-to-value ratio. Although terms vary, commercial real estate loans generally have amortization periods of 15 to 30 years, as well as balloon payments of 10 to 15 years, and terms which provide that the interest rate is adjusted on a 5 year schedule.

Construction and Land Loans:  Construction real estate loans consist of vacant land and property that is in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. In the event a loan is made on property that is not yet improved for the planned development, there is the risk that government approvals will not be granted or will be delayed. Construction loans also run the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Construction real estate loans generally have terms of six months to two years during the construction period with fixed rates or interest rates based on a designated index.                                                                                                                                                                                          

Business Loans:  Business loans are loans for commercial, corporate and business purposes, including issuing letters of credit. These loans are secured by business assets or may be unsecured and repayment is directly dependent on the successful operation of the borrower’s business and the borrower’s ability to convert the assets to operating revenue.  They possess greater risk than most other types of loans because the repayment capacity of the borrower may become inadequate. Business loans generally have terms of five years to seven years or less and interest rates that float in accordance with a designated published index. Substantially all such loans are backed by the personal guarantees of the owners of the business.

Consumer Loans:  Consumer loans generally have higher interest rates than mortgage loans. The risk involved in consumer loans is the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans include passbook loans and other secured and unsecured loans that have been made for a variety of consumer purposes.

9

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Loans Held for Sale:  Loan sales occur from time to time as part of strategic business or regulatory compliance initiatives.  Loans held for sale, including deferred fees and costs, are reported at the lower of cost or fair value as determined by expected bid prices from potential investors. Loans are sold without recourse and servicing released. When a loan is transferred from portfolio to held-for-sale and the fair value is less than cost, a charge-off is recorded against the allowance for loan losses. Subsequent declines in fair value, if any, are charged against earnings.

Transfers of Financial Assets:  Transfers of financial assets are accounted for as sales when all of the components meet the definition of a participating interest and when control over the assets has been surrendered. A participating interest generally represents (1) a proportionate (pro rata) ownership interest in an entire financial asset, (2) a relationship where from the date of transfer all cash flows received from the entire financial asset are divided proportionately among the participating interest holders in an amount equal to their share of ownership, (3) the priority of cash flows has certain characteristics, including no reduction in priority, subordination of interest, or recourse to the transferor other than standard representation or warranties, and (4) no party has the right to pledge or exchange the entire financial asset unless all participating interest holders agree to pledge or exchange the entire financial asset. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through either (a) an agreement to repurchase them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets, other than through a clean-up call.

Premises and Equipment:  Premises and equipment are stated at cost, less accumulated depreciation.

Depreciation is computed and charged to operations using the straight-line method over the estimated useful lives of the respective assets as follows:

	Years
Building	39
Building improvements	15 - 39
Furniture, fixtures, and equipment	3 - 10

Leasehold improvements are amortized over the shorter of the improvements’ estimated economic lives or the related lease terms, including extensions expected to be exercised. Gains and losses on dispositions are recognized upon realization. Maintenance and repairs are expensed as incurred and improvements are capitalized.  Leasehold improvements in process are not amortized until the assets are placed in operation.  

Impairment of Long-Lived Assets:  Long-lived assets, including premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment is indicated by that review, the asset is written down to its estimated fair value through a charge to noninterest expense.

Other Real Estate Owned:  Other Real Estate Owned (“OREO”) represents properties acquired through, or in lieu of, loan foreclosure or other proceedings. OREO is initially recorded at fair value, less estimated disposal costs, at the date of foreclosure, which establishes a new cost basis. After foreclosure, the properties are held for sale and are carried at the lower of cost or fair value, less estimated costs of disposal. Any write-down to fair value, at the time of transfer to OREO, is charged to the allowance for loan losses. Properties are evaluated regularly to ensure that the recorded amounts are supported by current fair values and charges against earnings are recorded as necessary to reduce the carrying amount to fair value, less estimated costs to dispose. Costs relating to the development and improvement of the property are capitalized, subject to the limit of fair value of the OREO, while costs relating to holding the property are expensed. Gains or losses are included in operations upon disposal.

10

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Income Taxes:  The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that all or some portion of the deferred tax assets will not be realized.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

As of June 30, 2018 and December 31, 2017, there are no liabilities recorded related to uncertain tax positions. Income tax returns filed for years before 2014 are no longer subject to income tax examinations by U.S. federal, state or local tax authorities.

Interest and penalties associated with unrecognized tax benefits, if any, would be classified as additional provision for income taxes in the consolidated statements of income (loss).

Related Party Transactions:  Directors and officers of the Company and their affiliates have been customers of and have had transactions with the Company, and it is expected that such persons will continue to have such transactions in the future. Management believes that all deposit accounts, loans, services and commitments comprising such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers who are not directors or officers. In the opinion of management, the transactions with related parties did not involve more than normal risk of collectability, nor favored treatment or terms, nor present other unfavorable features. Note 15 contains details regarding related party transactions.

Employee Benefit Plans:  The Company maintains Ponce Bank’s 401(K) Plan, the noncontributory defined benefit plan, as well as, the Supplemental Executive Retirement Plans (the “SERP’s”).  The noncontributory defined benefit pension plan was effectively frozen on May 31, 2007. The funding policy is to contribute annually the amounts sufficient to meet the minimum funding standards established by the Employee Retirement Income Security Act (“ERISA”) and such additional amounts as determined by management based on actuary recommendations.

Employee Stock Ownership Plan:  Compensation expense is recorded as shares are committed to be released with a corresponding credit to unearned ESOP shares at the average fair market value of the shares during the period and the shares become outstanding for earnings per share computations.  Compensation expense is recognized ratably over the service period based upon management’s estimate of the number of shares expected to be allocated by the ESOP.  The difference between the average fair market value and the cost of the shares allocated by the ESOP is recorded as an adjustment to additional paid-in-capital. Unallocated common shares held by the Company’s ESOP are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for both basic and diluted earnings per share calculations until they are committed to be released.

Comprehensive Income (Loss):  Comprehensive income (loss) consists of net income and other comprehensive income (loss), which are both recognized as separate components of equity.  Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale and unrecognized gains and losses on actuarial loss and prior service cost of the defined benefit plan.

11

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Loss Contingencies:  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.  Management does not believe there are any such matters that will have a material effect on the operations and financial position of the Company.

Fair Value of Financial Instruments:  Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 12.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect these estimates.

Segment Reporting:  While management monitors the revenue streams of the various products and services, the identifiable segments and operations are managed and financial performance is evaluated on a Company-wide basis.  Accordingly, all of the financial service operations are considered by management to be aggregate in one reportable operating segment.

Loan Commitments and Related Financial Instruments:   Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.  

Earnings Per Share (“EPS”):  Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period less unallocated ESOP shares.  Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period.  

Recent Accounting Pronouncements:

As an emerging growth company (“EGC”) as defined in Rule 12b-2 of the Exchange Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to nonpublic companies.  As of June 30, 2018, there is no significant difference in the comparability of the consolidated financial statements as a result of this extended transition period.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, that amended guidance on revenue recognition from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. The core principle of the amended guidance reportedly is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amended guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for public business entities.  As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.   The Bank’s primary source of revenue is interest income on financial assets and income from mortgage banking activities, which are explicitly excluded from the scope of the new guidance.  As a result, the adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.  However, the Company will continue to monitor developments and additional guidance up to the effective date of these amendments.

12

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities.” The FASB reported that the main objective in developing this new ASU was to enhance the reporting model for financial instruments, to provide users of financial statements with more useful information. The update requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It addresses the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The amendment eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Financial assets and financial liabilities are to be presented separately by measurement category and form of financial asset and the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated with the entity’s other deferred tax assets. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This ASU requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

The Company has begun its evaluation of the amended guidance including the potential impact on its consolidated financial statements. To date, the Company has identified its leased office spaces as within the scope of the guidance. The Company currently leases six branches and the new guidance will result in the establishment of a right to use asset and corresponding lease obligations. The Company continues to evaluate the impact of the guidance, including determining whether other contracts exist that are deemed to be in scope and subsequent related accounting standard updates. As such, no conclusions have yet been reached regarding the potential impact of adoption on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718).” The reported objective of this ASU is to simplify accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the update, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current accounting) or account for forfeitures when they occur. Within the statement of cash flows, excess tax benefits should be classified along with other income tax cash flows as an operating activity, and cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The Company expects to apply the amendments in this update by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted, or prospectively, as applicable.  The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

13

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU reportedly significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard is to replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, is to apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. The CECL model does not apply to available-for-sale (“AFS”) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also reportedly simplifies the accounting model for purchased credit-impaired debt, securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, we will adopt the amendments in this update beginning after December 15, 2020, including interim periods within those fiscal years. Entities have to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach).

Although early adoption is permitted, the Company does not expect to elect that option. The Company has begun its evaluation of the amended guidance including the potential impact on its consolidated financial statements. As a result of the required change in approach toward determining estimated credit losses from the current “incurred loss” model to one based on estimated cash flows over a loan’s contractual life, adjusted for prepayments (a “life of loan” model), the Company expects that the new guidance will result in an increase in the allowance for loan losses, particularly for longer duration loan portfolios. The Company also expects that the new guidance may result in an allowance for debt securities. In both cases, the extent of the change is indeterminable at this time as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.”  This ASU reportedly is intended to reduce diversity in how certain cash receipts and cash payments are presented and classified in the statements of cash flows.  The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. A retrospective transition method should be applied to each period presented, unless it is impracticable to apply the amendments retrospectively for some of the issues, then the amendments for those issues would be applied prospectively as of the earliest date practicable.  The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07 “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”  The ASU requires that an employer report the service cost component with other compensation cost arising from services rendered by the pertinent employees during the period.  The amendment also requires the components of net benefit cost to be presented separately in the income statement from the service cost component and not within income from operations.  ASU 2017-07 is effective for interim and annual reporting for public business entities beginning after December 15, 2017. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

14

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In March 2017, the FASB issued ASU 2017-08 “Receivables – Non-Refundable Fees and Other Costs (Subtopic 310-20):  Premium Amortization on Purchased Callable Debt Securities.”  The ASU requires premiums on callable debt securities to be amortized to the earliest call date.  The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity.  ASU 2017-08 is effective for interim and annual reporting periods beginning after December 15, 2018 for public business entities.  Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years.  As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020.  ASU 2017-08 will not have a material impact on the Company’s consolidated financial position, results of operations or disclosures.

In February 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This amendment allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.  This amendment is effective for years beginning after December 15, 2018.  Early adoption is permitted.  The Company has not elected to adopt this standard as of the date of these consolidated financial statements.

Note 2. Restrictions on Cash and Due From Banks

The Bank is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank, based on a percentage of deposits. The Bank had $6,819 in cash to cover its minimum reserve requirement of $6,466 at June 30, 2018, and $24,334  in cash to cover its minimum reserve requirements of $23,870 at December 31, 2017, respectively.

Note 3. Available-for-Sale Securities

The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30, 2018
	(Unaudited)
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
U.S. Government and Federal Agencies	$	24,913	$	—	$	(517	)	$	24,396
Mortgage-Backed Securities:
FHLMC Certificates		—		—		—			—
FNMA Certificates		941		—		(36	)		905
GNMA Certificates		2,801		42		—			2,843
	$	28,655	$	42	$	(553	)	$	28,144

	December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
U.S. Government and Federal Agencies	$	24,911	$	—	$	(359	)	$	24,552
Mortgage-Backed Securities:
FHLMC Certificates		—		—		—			—
FNMA Certificates		1,118		—		(15	)		1,103
GNMA Certificates		3,205		38		(1	)		3,242
	$	29,234	$	38	$	(375	)	$	28,897

15

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 3. Available-for-Sale Securities (Continued)

There were no investments classified as held to maturity as of June 30, 2018 and December 31, 2017. There were no sales in the three and six months ended June 30, 2018 and 2017.   

The following tables present the Company's securities' gross unrealized losses and fair values, aggregated by the length of time the individual securities have been in a continuous unrealized loss position, at June 30, 2018 and at December 31, 2017:

	June 30, 2018
	(Unaudited)
	Securities With Gross Unrealized Losses
	Less Than 12 Months					12 Months or More					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Government and Federal Agencies	$	—	$	—		$	24,396	$	(517	)	$	24,396	$	(517	)
Mortgage-Backed
FHLMC Certificates		—		—			—		—			—		—
FNMA Certificates		903		(36	)		—		—			903		(36	)
GNMA Certificates		—		—			—		—			—		—
	$	903	$	(36	)	$	24,396	$	(517	)	$	25,299	$	(553	)

	December 31, 2017
	Securities With Gross Unrealized Losses
	Less Than 12 Months					12 Months or More					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Government and Federal Agencies	$	—	$	—		$	24,552	$	(359	)	$	24,552	$	(359	)
Mortgage-Backed
FHLMC Certificates		—		—			—		—			—		—
FNMA Certificates		1,094		(15	)		—		—			1,094		(15	)
GNMA Certificates		1,205		(1	)		—		—			1,205		(1	)
	$	2,299	$	(16	)	$	24,552	$	(359	)	$	26,851	$	(375	)

The Company’s investment portfolio had 33 investment securities at June 30, 2018 and 33 investment securities at December 31, 2017. At June 30, 2018 and December 31, 2017, the Company had 13 and 14 securities, with a gross unrealized loss position.  Management reviewed the financial condition of the entities underlying the securities at both June 30, 2018 and December 31, 2017 and determined that they are not other than temporary because the unrealized losses in those securities relate to market interest rate changes. The Company has the ability to hold them and does not have the intent to sell these securities, and it is not more likely than not that the Company will be required to sell these securities, before recovery of the cost basis. In addition, management also considers the issuers of the securities to be financially sound and believes the Company will receive all contractual principal and interest related to these investments.

16

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 3. Available-for-Sale Securities (Continued)

The following is a summary of maturities of securities at June 30, 2018 and December 31, 2017. Amounts are shown by contractual maturity. Because borrowers for mortgage-backed securities have the right to prepay obligations with or without prepayment penalties, these securities are not included within the maturity summary.

	June 30, 2018
	Available-for-Sale
	(Unaudited)
	Amortized		Fair
	Cost		Value
U.S. Government and Federal Agency Securities:
Amounts maturing:
After three months through one year	$	3,990	$	3,963
After one year through five years		20,923		20,433
		24,913		24,396
Mortgage-Backed Securities		3,742		3,748
Total	$	28,655	$	28,144
	December 31, 2017
	Available-for-Sale
	Amortized		Fair
	Cost		Value
U.S. Government and Federal Agency Securities:
Amounts maturing:
After three months through one year	$	1,990	$	1,977
After one year through five years		22,921		22,575
		24,911		24,552
Mortgage-Backed Securities		4,323		4,345
Total	$	29,234	$	28,897

There were no securities pledged at June 30, 2018 and December 31, 2017.

17

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses

Loans at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Mortgage loans:
1-4 family residences
Investor-Owned	$	296,490		$	287,158
Owner-Occupied		92,208			100,854
Multifamily residences		218,210			188,550
Nonresidential properties		168,788			151,193
Construction and land		72,574			67,240
Nonmortgage loans:
Business loans		11,698			12,873
Consumer loans		1,027			886
		860,995			808,754
Net deferred loan origination costs		1,182			1,020
Allowance for losses on loans		(11,751	)		(11,071	)
Loans, net	$	850,426		$	798,703

The Company’s lending activities are conducted principally in New York City. The Company primarily grants loans secured by real estate to individuals and businesses.  While collateral provides assurance as a secondary source of repayment, the Bank ordinarily requires the primary source of repayment to be based on the borrowers’ ability to generate continuing cash flows. The Company has established credit policies applicable to each type of lending activity, in which it engages. The Company evaluates the creditworthiness of each customer and, in most cases, extends credit up to 75% of the market value of the collateral at the date of the credit extension, depending on the borrowers' creditworthiness and the type of collateral. The market value of collateral is monitored on an ongoing basis and additional collateral is obtained when warranted. Real estate is the primary form of collateral. Other important forms of collateral are time deposits and marketable securities.

For disclosures related to the allowance for loan losses and credit quality, the Company does not have any disaggregated classes of loans below the segment level.

Credit-Quality Indicators: Internally assigned risk ratings are used as credit-quality indicators, which are reviewed by management on a quarterly basis.

The objectives of the Company’s risk-rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the allowance for loan losses.

Below are the definitions of the internally assigned risk ratings:

• Strong Pass – Loans to new or existing borrowers collateralized at least 90 percent by an unimpaired deposit account at the Company.  

• Good Pass – A loan to a new or existing borrower in a well-established enterprise in excellent financial condition with strong liquidity and a history of consistently high level of earnings, cash flow and debt service capacity.  

• Satisfactory Pass – Loan to a new or existing borrower of average strength with acceptable financial condition, satisfactory record of earnings and sufficient historical and projected cash flow to service the debt.  

18

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

• Performance Pass –Existing loans that evidence strong payment history but document less than average strength, financial condition, record of earnings, or projected cash flows with which to service debt.  

• Special Mention – Loans in this category are currently protected but show one or more potential weakness and risks which may inadequately protect collectability or borrower’s ability to meet repayment terms at some future date if the weakness is not checked or corrected.  

• Substandard – Loans that are inadequately protected by the repayment capacity of the borrower or the current sound net worth of the collateral pledged, if any.  Loans in this category have well defined weaknesses and risks that jeopardize the repayment.  They are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected.  

• Doubtful – Loans that have all the weaknesses of loans classified as “Substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable.  

Loans within the top four categories above are considered pass rated, as commonly defined.  Risk ratings are assigned as necessary to differentiate risk within the portfolio. Risk ratings are reviewed on an ongoing basis and revised to reflect changes in the borrowers’ financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage as well as other considerations.

The following tables present credit risk ratings by loan segment as of June 30, 2018 and December 31, 2017:

	June 30, 2018
	(Unaudited)
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
Risk Rating:
Pass	$	372,656	$	217,120	$	167,290	$	65,862	$	11,010	$	1,027	$	834,965
Special mention		6,107		1,090		464		—		688		—		8,349
Substandard		9,935		—		1,034		6,712		—		—		17,681
Doubtful		—		—		—		—		—		—		—
Total	$	388,698	$	218,210	$	168,788	$	72,574	$	11,698	$	1,027	$	860,995

	December 31, 2017
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
Risk Rating:
Pass	$	370,629	$	188,030	$	148,253	$	59,914	$	12,726	$	886	$	780,438
Special mention		4,667		—		—		650		—		—		5,317
Substandard		12,716		520		2,940		6,676		147		—		22,999
Doubtful		—		—		—		—		—		—		—
Total	$	388,012	$	188,550	$	151,193	$	67,240	$	12,873	$	886	$	808,754

19

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

An aging analysis of loans, as of June 30, 2018 and December 31, 2017, is as follows:

	June 30, 2018
	(Unaudited)
			30-59		60-89		Over						Over
			Days		Days		90 Days				Nonaccrual		90 Days
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
Mortgages:
1-4 Family
Investor-Owned	$	296,138	$	—	$	352	$	—	$	296,490	$	1,307	$	—
Owner-Occupied		91,257		—		—		951		92,208		3,488		—
Multifamily		217,906		—		304		—		218,210		—		—
Nonresidential properties		167,902		—		403		483		168,788		748		—
Construction and land		72,574		—		—		—		72,574		1,111		—
Nonmortgage Loans:
Business		11,401		297		—		—		11,698		—		—
Consumer		1,027		—		—		—		1,027		—		—
Total	$	858,205	$	297	$	1,059	$	1,434	$	860,995	$	6,654	$	—

	December 31, 2017
			30-59		60-89		Over						Over
			Days		Days		90 Days				Nonaccrual		90 Days
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
Mortgages:
1-4 Family
Investor-Owned	$	285,485	$	1,201	$	—	$	472	$	287,158	$	2,178	$	7
Owner-Occupied		96,878		585		—		3,391		100,854		5,317		—
Multifamily		188,504		46		—		—		188,550		521		—
Nonresidential properties		149,300		11		—		1,882		151,193		2,170		—
Construction and land		67,240		—		—		—		67,240		1,075		—
Nonmortgage Loans:
Business		12,583		239		—		51		12,873		147		—
Consumer		886		—		—		—		886		—		—
Total	$	800,876	$	2,082	$	—	$	5,796	$	808,754	$	11,408	$	7

20

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

The following schedules detail the composition of the allowance for loan losses and the related recorded investment in loans as of June 30, 2018, 2017 and December 31, 2017:

	For the Six Months Ended June 30, 2018
	(Unaudited)
	Mortgage Loans												Nonmortgage Loans							Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer		Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,716		$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6	$	—	$	11,071
Provision charged to expense		(30	)		(312	)		531		250		86		(94	)		—		—		431
Losses charged-off		—			—			—		—		—		(18	)		—		—		(18	)
Recoveries		1			175			—		5		—		83			3		—		267
Balance, end of period	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9	$	—	$	11,751
Ending balance: individually    evaluated for impairment	$	310		$	297		$	—	$	36	$	—	$	—		$	—	$	—	$	643
Ending balance: collectively    evaluated for impairment		3,377			968			3,640		1,643		1,291		180			9		—		11,108
Unallocated		—			—			—		—		—		—			—		—		—
Total	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9	$	—	$	11,751
Loans:
Ending balance: individually    evaluated for impairment	$	7,014		$	7,399		$	—	$	2,207	$	1,111	$	421		$	—	$	—	$	18,152
Ending balance: collectively    evaluated for impairment		289,476			84,809			218,210		166,581		71,463		11,277			1,027		—		842,843
Total	$	296,490		$	92,208		$	218,210	$	168,788	$	72,574	$	11,698		$	1,027	$	—	$	860,995

	For the Three Months Ended June 30, 2018
	(Unaudited)
	Mortgage Loans												Nonmortgage Loans								Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,689		$	1,370		$	3,385	$	1,517	$	1,212	$	228		$	8		$	—	$	11,409
Provision charged to expense		(3	)		(107	)		255		160		79		(46	)		(1	)		—		337
Losses charged-off		—			—			—		—		—		(13	)		—			—		(13	)
Recoveries		1			2			—		2		—		11			2			—		18
Balance, end of period	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9		$	—	$	11,751

21

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

	For the Six Months Ended June 30, 2017
	(Unaudited)
	Mortgage Loans											Nonmortgage Loans								Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,147	$	1,804		$	2,705	$	1,320	$	615	$	597		$	17		$	—	$	10,205
Provision charged to expense		379		(321	)		282		414		138		(619	)		(14	)		—		259
Losses charged-off		—		—			—		—		—		(34	)		—			—		(34	)
Recoveries		10		—			1		5		—		204			5			—		225
Balance, end of period	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—	$	10,655
Ending balance: individually    evaluated for impairment	$	524	$	401		$	—	$	258	$	—	$	—		$	—		$	—	$	1,183
Ending balance: collectively    evaluated for impairment		3,012		1,082			2,988		1,481		753		148			8			—		9,472
Unallocated		—		—			—		—		—		—			—			—		—
Total	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—	$	10,655
Loans:
Ending balance: individually    evaluated for impairment	$	8,869	$	8,712		$	—	$	5,661	$	1,008	$	529		$	—		$	—	$	24,779
Ending balance: collectively    evaluated for impairment		248,120		91,189			172,167		150,009		41,108		14,125			850			—		717,568
Total	$	256,989	$	99,901		$	172,167	$	155,670	$	42,116	$	14,654		$	850		$	—	$	742,347

	For the Three Months Ended June 30, 2017
	(Unaudited)
	Mortgage Loans											Nonmortgage Loans									Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated			For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,181	$	1,729		$	2,800	$	1,568	$	672	$	115		$	9		$	296		$	10,370
Provision charged to expense		350		(246	)		188		169		81		(33	)		(6	)		(296	)		207
Losses charged-off		—		—			—		—		—		(24	)		—			—			(24	)
Recoveries		5		—			—		2		—		90			5			—			102
Balance, end of period	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—		$	10,655

22

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

	For the Year Ended December 31, 2017
	Mortgage Loans											Nonmortgage Loans								Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of year	$	3,147	$	1,804		$	2,705	$	1,320	$	615	$	597		$	17		$	—	$	10,205
Provision charged to expense		544		(578	)		402		95		588		676			(11	)		—		1,716
Losses charged-off		—		—			—		—		—		(1,423	)		(6	)		—		(1,429	)
Recoveries		25		176			2		9		2		359			6			—		579
Balance, end of year	$	3,716	$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6		$	—	$	11,071
Ending balance: individually    evaluated for impairment	$	506	$	375		$	—	$	39	$	—	$	2		$	—		$	—	$	922
Ending balance: collectively    evaluated for impairment		3,210		1,027			3,109		1,385		1,205		207			6			—		10,149
Unallocated		—		—			—		—		—		—			—			—		—
Total	$	3,716	$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6		$	—	$	11,071
Loans:
Ending balance: individually    evaluated for impairment	$	8,738	$	10,074		$	520	$	4,128	$	1,075	$	625		$	—		$	—	$	25,160
Ending balance: collectively    evaluated for impairment		278,420		90,780			188,030		147,065		66,165		12,248			886			—		783,594
Total	$	287,158	$	100,854		$	188,550	$	151,193	$	67,240	$	12,873		$	886		$	—	$	808,754

Loans are considered impaired when current information and events indicate all amounts due may not be collectable according to the contractual terms of the related loan agreements. Impaired loans, including TDR’s, are identified by applying normal loan review procedures in accordance with the Allowance for Loan Loss methodology. Management periodically assesses loans to determine whether impairment exists. Any loan that is, or will potentially be, no longer performing in accordance with the terms of the original loan contract is evaluated to determine impairment.

23

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

The following information relates to impaired loans as of and for the six months ended June 30, 2018 and 2017 and for the year ended December 31, 2017:

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
For the Six Months Ended June 30, 2018	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
(Unaudited)
Mortgages:
1-4 Family	$	15,597	$	7,787	$	6,626	$	14,413	$	607	$	17,101	$	371
Multifamily		—		—		—		—		—		104		—
Nonresidential properties		2,421		1,719		488		2,207		36		3,753		71
Construction and land		1,321		1,111		—		1,111		—		1,073		—
Nonmortgage Loans:
Business		464		421		—		421		—		515		12
Consumer		—		—		—		—		—		—		—
Total	$	19,803	$	11,038	$	7,114	$	18,152	$	643	$	22,546	$	454
	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
For the Six Months Ended June 30, 2017	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
(Unaudited)
Mortgages:
1-4 Family	$	18,941	$	8,346	$	9,235	$	17,581	$	925	$	18,201	$	422
Multifamily		—		—		—		—		—		—		—
Nonresidential properties		6,317		3,134		2,527		5,661		258		6,319		141
Construction and land		1,124		1,008		—		1,008		—		1,028		—
Nonmortgage Loans:
Business		571		529		—		529		—		612		8
Consumer		—		—		—		—		—		—		—
Total	$	26,953	$	13,017	$	11,762	$	24,779	$	1,183	$	26,160	$	571

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
December 31, 2017	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
Mortgages:
1-4 Family	$	20,036	$	10,651	$	8,161	$	18,812	$	506	$	18,512	$	890
Multifamily		533		520		—		520		375		166		—
Nonresidential properties		4,729		3,633		495		4,128		—		5,231		166
Construction and land		1,233		1,075		—		1,075		39		1,042		—
Nonmortgage Loans:
Business		667		529		96		625		2		594		24
Consumer		—		—		—		—		—		—		—
Total	$	27,198	$	16,408	$	8,752	$	25,160	$	922	$	25,545	$	1,080

24

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

The loan portfolio also includes certain loans that have been modified in a TDR. Under applicable standards, TDRs occur when a creditor, for economic or legal reasons related to a debtor’s financial condition, grants a concession to the debtor that it would not otherwise consider, unless it results in a delay in payment that is insignificant. These concessions could include a reduction of interest rate on the loan, payment and maturity extensions, forbearance, or other actions intended to maximize collections. When a loan is modified in a TDR, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs if repayment under the modified terms becomes doubtful. If management determines that the value of the modified loan in a TDR is less than the recorded investment in the loan, impairment is recognized through a specific allowance estimate or charge-off to the allowance for loan losses.

As of and for the six months ended June 30, 2018, there were no loans restructured as a TDR. As of and for the year ended December 31, 2017, there was one loan restructured as a TDR.

	Loans Restructured During						All TDRs with a payment default within 12 months following the
	Six Months Ended June 30, 2018 (Unaudited)						modification (Unaudited)
			Pre-		Post-				Balance
			Modification		Modification				of Loans
	Number		Recorded		Recorded		Number		at the Time
	of Loans		Balance		Balance		of Loans		of Default
Mortgages:
1-4 Family		—	$	—	$	—		1	$	175
Total		—	$	—	$	—		1	$	175
Combination of rate, maturity, other		—	$	—	$	—		1	$	175
Total		—	$	—	$	—		1	$	175

	Loans Restructured During						All TDRs with a payment default within 12 months following the
	Year Ended December 31, 2017						modification
			Pre-		Post-				Balance
			Modification		Modification				of Loans
	Number		Recorded		Recorded		Number		at the Time
	of Loans		Balance		Balance		of Loans		of Default
Mortgages:
1-4 Family		1	$	176	$	176		—	$	—
Total		1	$	176	$	176		—	$	—
Combination of rate, maturity, other		1	$	176	$	176		—	$	—
Total		1	$	176	$	176		—	$	—

At June 30, 2018, there were 43 troubled debt restructured loans, included in impaired loans, of $15,210.  At December 31, 2017, there were 49 troubled debt restructured loans, included in impaired loans, of $18,371. There were no commitments to lend additional funds to borrowers whose loans have been modified in a troubled debt restructuring. The financial impact from the concessions made represents specific impairment reserves on these loans, which aggregated $643 and $921 at June 30, 2018 and December 31, 2017, respectively.

25

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 5. Premises and Equipment

A summary of premises and equipment at June 30, 2018 and December 31, 2017 is as follows:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Land	$	3,979		$	3,979
Buildings and improvements		15,972			15,972
Leasehold improvements		21,790			20,973
Furniture, fixtures and equipment		6,106			4,875
		47,847			45,799
Less accumulated depreciation and amortization		(19,481	)		(18,627	)
	$	28,366		$	27,172

Depreciation and amortization expense amounted to $437 and $399 for the three months ended June 30, 2018 and 2017, respectively, and $854 and $803 for the six months ended June 30, 2018 and 2017, respectively and are included in occupancy expense in the accompanying consolidated statements of income.  Our leasehold improvements increased by $817, to $21,790 at June 30, 2018 evidencing the investments beginning to be made in branch and other delivery vehicles. Equipment also increased by $1,231, to $6,106 at June 30, 2018, indicative of our purchases of new ATMs that are being installed in our branches.

Note 6. Deposits

Deposits at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30,		December 31,
	2018		2017
	(Unaudited)
Demand	$	108,550	$	103,001
Interest-bearing deposits:
NOW/IOLA accounts		26,711		27,758
Money market accounts		58,612		46,497
Savings accounts		124,578		126,668
Total savings, NOW and money market		209,901		200,923
Certificates of deposit of $250K or more		82,928		80,300
All other certificates of deposit		351,876		329,761
Total certificates of deposit		434,804		410,061
Total interest-bearing deposits		644,705		610,984
Total deposits	$	753,255	$	713,985

At June 30, 2018, scheduled maturities of certificates of deposit were as follows:

June 30,
2019	$	186,319
2020		88,075
2021		88,164
2022		60,493
2023		11,753
	$	434,804

26

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 6. Deposits (Continued)

Overdrawn deposit accounts that have been reclassified to loans amounted to $198 and $174 as of June 30, 2018 and December 31, 2017, respectively.

Note 7. Borrowings

FHLB Advances: The Bank is a member of the Federal Home Loan Bank of New York. At June 30, 2018, the Bank had the ability to borrow from the FHLB based on a certain percentage of the value of the Bank's qualified collateral, as defined in the FHLB Statement of Credit Policy, at the time of the borrowing. In accordance with an agreement with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances.

The Bank had $37,775 and $16,400 of outstanding advances from the FHLB on term basis and an overnight line of credit basis at June 30, 2018 and December 31, 2017, respectively.  The Bank also had a guarantee from the FHLB through a standby letter of credit of $4,304 and $6,614 at June 30, 2018 and December 31, 2017, respectively.  Additionally, the Bank had an unsecured fed funds line in the amount of $25,000 with a correspondent bank at June 30, 2018 and December 31, 2017, of which $0 and $20,000 were outstanding as of June 30, 2018 and December 31, 2017, respectively.

Borrowed funds at June 30, 2018 and December 31, 2017 consist of the following and are summarized by maturity and call date below:

	June 30,							December 31,
	2018 (Unaudited)							2017
	Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate			Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate
Correspondent Bank Overnight line of credit    advance	$	—	$	—		—	%	$	20,000	$	20,000		1.64	%
FHLB Term advances ending June 30:
2020		1,400		1,400		2.11			1,400		1,400		2.11
2021		3,000		3,000		1.84			3,000		3,000		1.84
2022		5,000		5,000		1.97			5,000		5,000		1.97
2023		28,375		28,375		2.82			7,000		7,000		2.12
	$	37,775	$	37,775		2.60	%	$	36,400	$	36,400		1.81	%

Interest expense on advances totaled $204 and $32 for the three months ended June 30, 2018 and 2017, and $302 and $61 for the six months ended June 30, 2018 and 2017, respectively.   

As of June 30, 2018 and December 31, 2017, the Bank has eligible collateral of approximately $71,439 and $66,254 in mortgage loans available to secure advances from the FHLB.

Securities Sold under Agreement to Repurchase: At June 30, 2018 and December 31, 2017, the Bank had the ability to borrow up to $25,000 under repurchase agreements with three brokers. The Bank had no securities sold under repurchase agreements with brokers as of June 30, 2018 and December 31, 2017. Interest expense on securities sold under repurchase agreements totaled $0 and $0 for the three and six months ended June 30, 2018 and 2017, respectively.    

27

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 8. Income Taxes

The provision (benefit) for income taxes for the three and six months ended June 30, 2018 and 2017 consists of the following:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Federal:
Current	$	110		$	624		$	195		$	881
Deferred		60			23			190			132
		170			647			385			1,013
State and local:
Current		48			56			121			102
Deferred		(252	)		(181	)		(356	)		(380	)
		(204	)		(125	)		(235	)		(278	)
Changes in valuation allowance		200			119			284			251
Provision for income taxes	$	166		$	641		$	434		$	986

Total income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 21% and 34% for the three and six months ended June 30, 2018 and 2017, respectively, to income before income taxes as a result of the following:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Income tax, at federal rate	$	182		$	600		$	436		$	909
State and local tax, net of federal taxes		(160	)		(91	)		(185	)		(174	)
Valuation allowance, net of the federal benefit		200			132			284			251
Other		(56	)		—			(101	)		—
	$	166		$	641		$	434		$	986

On December 22, 2017, the U.S. Government signed into law the “Tax Cuts and Jobs Act” (the “Tax Act”) which, starting in 2018, reduced the Company’s corporate income tax rate from 34% to 21%, but eliminates or increases certain permanent differences.

On December 22, 2017, the U.S. Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (“SAB 118”) to address any uncertainty or diversity of views in practice in accounting for the income tax effects of the Tax Act in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date.  SAB 118 allows for a measurement period, not to extend beyond one year from the Tax Act’s enactment date, to complete the necessary accounting.  

Our annualized estimated effective tax rate (AETR) for the three and six months period ended June 30, 2018 reflects our assumption that pre-tax income for the period is proportional to annual pre-tax income.  Our AETR may change in future periods as we revise our estimate of annual pre-tax income.

28

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 8. Income Taxes (Continued)

Management maintains a valuation allowance against its net New York State and New York City deferred tax assets when it is more likely than not that these deferred tax assets will not be realized. The valuation allowance increased by $200 and $284 for the three and six months ended June 30, 2018, respectively.  Management has determined that it is not required to establish a valuation allowance against any other deferred tax assets since it is more likely than not that the deferred tax assets will be fully utilized in future periods. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods that the temporary differences comprising the deferred tax assets will be deductible.

At June 30, 2018 and December 31, 2017, there are no unrecognized tax benefits recorded.  It is not expected that the total amount of unrecognized tax benefits will significantly increase in the next twelve months. Interest and penalties are recognized on unrecognized tax benefits as a component of income tax expense.

The Company is subject to U.S. federal income tax, New York State income tax, New Jersey income tax, and New York City income tax.  The Company is no longer subject to examination by taxing authorities for years before 2014.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30, 2018 and December 31, 2017 are presented below:

	AtJune 30,		At December 31,
	2018		2017
	(Unaudited)
Deferred tax assets:
Allowance for losses on loans	$	3,639	$	3,444
Pension obligations		2,424		2,402
Interest on nonaccrual loans		46		415
Unrealized loss on available-for-sale securities		64		72
Amortization of intangible assets		111		120
Deferred rent payable		170		194
Net operating losses		2,809		2,444
Charitable contribution carryforward		1,772		1,840
Other		253		162
Total gross deferred tax assets		11,288		11,093
Deferred tax liabilities:
Cumulative contribution in excess of net periodic    benefit costs, net		3,113		3,134
Depreciation and amortization of premises and equipment		601		601
Deferred loan fees		366		317
Other		5		18
Total gross deferred tax liabilities		4,085		4,070
Valuation allowance		3,398		3,114
Net deferred tax assets	$	3,805	$	3,909

29

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 9. Compensation and Benefit Plans

Defined Benefit Plan:

Effective January 1, 2007, the noncontributory defined benefit pension plan (the “Old Pension Plan”) of the Company was frozen and replaced with a qualified defined contribution plan (the “401(k) Plan”) as noted in more detail below. The Old Pension Plan covered substantially all employees. Employees were eligible to participate after one year of service. Normal retirement age was 65, with an early retirement provided for at age 55. The Old Pension Plan was effectively frozen on May 31, 2007 (the curtailment date) and this resulted in an actuarial reassessment of the Old Pension Plan’s future estimated obligations. All participants that are presently vested with the Old Pension Plan will remain in the Old Pension Plan and will receive the full accrued benefit, as defined, upon retirement, in accordance with the plan document.

The following table sets forth the Old Pension Plan’s funded status and amounts recognized in the consolidated statements of financial condition as of June 30, 2018 and December 31, 2017 using a measurement date as of June 30, 2018 and December 31, 2017, respectively:

	June 30, 2018			December 31, 2017
	(Unaudited)
Projected benefit obligation	$	(15,802	)	$	(15,883	)
Fair value of plan assets		14,564			14,732
Funded status	$	(1,238	)	$	(1,151	)
Accumulated benefit obligation	$	(15,802	)	$	(15,883	)
	June 30, 2018			December 31, 2017
	(Unaudited)
Changes in benefit obligation:
Beginning of period	$	15,883		$	14,142
Service cost		20			39
Interest cost		271			581
2017 interest rate change		—			1,338
2017 mortality change		—			1,906
(Gain)/ Loss		3			(1,345	)
Administrative cost		(20	)		(39	)
Benefits paid		(355	)		(739	)
End of period	$	15,802		$	15,883

	June 30, 2018				December 31, 2017
	(Unaudited)
Changes in plan assets:
Fair value of plan assets, beginning of period	$	14,732		$		15,038
Actual return on plan assets		207				472
Employer contributions		—				—
Plan participant contributions		—				—
Benefits paid		(355	)			(739	)
Administrative expenses paid		(20	)			(39	)
Fair value of plan assets, end of period	$	14,564		$		14,732

30

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 9. Compensation and Benefit Plans (Continued)

Pretax amounts recognized in accumulated other comprehensive loss, which will be amortized into net periodic benefit cost over the coming years, consisted of the following components at June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Net loss	$	(11,288	)	$	(11,224	)

The components of net periodic benefit cost are as follows for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
	2018			2017
	(Unaudited)
Service cost	$	20		$	20
Interest cost		271			291
Expected return on plan assets		(430	)		(420	)
Amortization of prior service cost		13			13
Amortization of (gain)/loss		149			117
Net periodic benefit cost	$	23		$	21

Weighted-average assumptions used to determine the net benefit obligations consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Discount rate		3.50	%		3.50	%
Rate of compensation increase		0.00	%		0.00	%

Weighted-average assumptions used to determine the net benefit cost consisted of the following for the six months ended June 30, 2018  and 2017:

	June 30,			June 30,
	2018			2017
	(Unaudited)
Discount rate		3.50	%		4.25	%
Rate of compensation increase		0.00	%		0.00	%
Expected long-term rate of return on assets		6.00	%		6.00	%

The expected rate of return on plan assets is estimated based on the plan’s historical performance of return on assets.

The investment policy for plan assets is to manage the portfolio to preserve principal and liquidity while maximizing the return on the plan’s investment portfolio through the full investment of available funds. Plan assets are currently maintained in a guaranteed deposit account with Prudential Retirement Insurance and Annuity Company, earning interest at rates that are determined at the beginning of each year.

31

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 9. Compensation and Benefit Plans (Continued)

Pension assets consist solely of funds on deposit in a guaranteed deposit account. The fair value of the pension plan assets at June 30, 2018 and December 31, 2017 was $14,565 and $14,696, respectively.

The guaranteed deposit account is valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the creditworthiness of the issuer. Such fair value measurement is considered a Level 3 measurement.

Employer contributions and benefit payments for the six months ended June 30, 2018 and 2017 are as follows:

	June 30,		June 30,
	2018		2017
	(Unaudited)
Employer contributions	$	—	$	—
Benefits paid	$	355	$	184

Employee benefit payments expected to be paid in the future are as follows:

As of  June 30, 2018
2018	$	380
2019		736
2020		714
2021		695
2022		700
Thereafter		3,307
	$	6,532

401(k) Plan:

On January 1, 2007, a qualified defined contribution retirement plan under Section 401(k) of the Internal Revenue Code was adopted. The 401(k) Plan also qualifies under the Internal Revenue Service safe harbor provisions, as defined. Employees are eligible to participate in the 401(k) Plan after completing one year of service. The 401(k) Plan provides for elective employee/participant deferrals of income. Discretionary matching, profit-sharing, and safe harbor contributions, not to exceed 4% of employee compensation and profit-sharing contributions may be provided.  Contributions for the three and six months June 30, 2018 and 2017, if any, were not material to the consolidated financial statements. 

Employee Stock Ownership Plan:

In connection with the reorganization, the Company established an Employee Stock Ownership Plan (ESOP) for the exclusive benefit of eligible employees.  The ESOP borrowed $7,238 from the Company sufficient to purchase 723,751 shares (approximately 3.92% of the common stock sold in the stock offering).  The loan is secured by the shares purchased and will be repaid by the ESOP with funds from contributions made by the Bank and dividends received by the ESOP. Contributions will be applied to repay interest on the loan first, and then the remainder will be applied to principal.  The loan is expected to be repaid over a period of 15 years.  Shares purchased with the loan proceeds are held by the trustee in a suspense account for allocation among participants as the loan is repaid.  

Contributions to the ESOP and shares released from the suspense account are allocated among participants in proportion to their compensation, relative to total compensation of all active participants, subject to applicable regulations.       

32

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 9. Compensation and Benefit Plans (Continued)

Contributions to the ESOP are to be sufficient to pay principal and interest currently due under the loan agreement.  As shares are committed to be released from collateral, compensation expense equal to the average market price of the shares for the respective period are recognized, and the shares become outstanding for earnings per share computations.  

A summary of the ESOP shares is as follows:

	June 30, 2018		December 31, 2017
	(Unaudited)
Shares committed-to-be released		24,126		48,250
Shares to be allocated to participants		48,250		—
Unallocated shares		651,375		675,501
Total		723,751		723,751
Fair value of unearned shares	$	10,233	$	10,254

At June 30, 2018 and December 31, 2017, we had $6,712 outstanding of funds borrowed for the ESOP.  We recognized $201 and $378 in compensation expense and $47 and $95 in interest expense, for the three and six months ended June 30, 2018 and none for three and six months ended June 30, 2017.

Supplemental Executive Retirement Plan:  

The Company maintains a non-qualified supplemental executive retirement plan (“SERP”) for the benefit of one key executive.   The SERP expense recognized in the books for the three and six months ended June 30, 2018, were not material to the consolidated financial statements.

Note 10. Earnings Per Share

Earnings per share data is not applicable for the period ended June 30, 2017 because the Company has not yet been formed and had no shares outstanding at a Company or Bank level.  

The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share:

	For the Three Months Ended June 30, 2018		For the Six Months Ended June 30, 2018
	(Unaudited)
Net income for the period	$	699	$	1,640
Shares Outstanding for basic EPS:
Weighted average shares outstanding:		18,463,028		18,463,028
Less: Weighted average unallocated Employee Stock Ownership    Plan (ESOP) shares:		663,305		687,607
Basic weighted shares outstanding		17,799,723		17,775,421
Basic earnings per share	$	0.04	$	0.09
Dilutive potential common shares:		—		—
Diluted weighted average shares outstanding		17,799,723		17,775,421
Diluted earnings per share	$	0.04	$	0.09

33

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 11. Commitments, Contingencies and Credit Risk

Financial Instruments With Off-Balance-Sheet Risk: In the normal course of business, financial instruments with off-balance-sheet risk may be used to meet the financing needs of customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized on the consolidated statements of financial condition. The contractual amounts of these instruments reflect the extent of involvement in particular classes of financial instruments.

The contractual amounts of commitments to extend credit represent the amounts of potential accounting loss should the contract be fully drawn upon, the customer default, and the value of any existing collateral become worthless. The same credit policies are used in making commitments and contractual obligations as for on-balance-sheet instruments. Financial instruments whose contractual amounts represent credit risk at June 30, 2018 and December 31, 2017 are as follows:

	June 30,		December 31,
	2018		2017
	(Unaudited)
Commitments to grant mortgage loans	$	54,677	$	54,423
Unfunded commitments under lines of credit		43,247		33,641
Standby letters of credit		4,424		6,734
	$	102,348	$	94,798

Commitments to Grant Mortgage Loans: Commitments to grant mortgage loans are agreements to lend to a customer as long as all terms and conditions are met as established in the contract. Commitments generally have fixed expiration dates or other termination clauses, and may require payment of a fee by the borrower. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate and income-producing commercial properties. Material losses are not anticipated as a result of these transactions.

Unfunded Commitments Under Lines of Credit: Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extension of credit to existing customers. These lines of credit are uncollateralized and usually do not contain a specified maturity date and, ultimately, may not be drawn upon to the total extent to which the Company is committed.

Standby Letters of Credit: Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral held varies as specified above and is required in instances deem necessary.

Concentration by Geographic Location: Loans, commitments to extend credit and standby letters of credit have been granted to customers who are located primarily in New York City. Generally, such loans most often are secured by one-to-four family residences. The loans are expected to be repaid from the borrowers' cash flows.

Lease Commitments: At June 30, 2018, there are noncancelable operating leases for office space that expire on various dates through 2031. One such lease contains an escalation clause providing for increased rental based primarily on increases in real estate taxes. Net rental expenses under operating leases, included in occupancy expense, totaled $341 and $354 for the three months ended June 30, 2018 and 2017, respectively.  Net rental expenses under operating leases, included in occupancy expense, totaled $746 and $708 for the six months ended June 30, 2018 and 2017, respectively.     

34

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 11. Commitments, Contingencies and Credit Risk (Continued)

The projected minimum rental payments under the terms of the leases at June 30, 2018 are as follows:

	June 30,
	(Unaudited)
2018	$	682
2019		1,076
2020		1,107
2021		1,140
2022		1,043
Thereafter		6,671
	$	11,719

Legal Matters: The Company is involved in various legal proceedings which have arisen in the normal course of business. Management believes that resolution of these matters will not have a material effect on the Company’s financial condition or results of operations.

Note 12. Fair Value

The following fair value hierarchy is used based on the lowest level of input significant to the fair value measurement. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Cash and Cash Equivalents, Accrued Interest Receivable, Advance Payments by Borrowers for Taxes and Insurance, and Accrued Interest Payable: The carrying amount is a reasonable estimate of fair value. These assets and liabilities were not recorded at fair value on a recurring basis.

Available-for-Sale Securities: These financial instruments are recorded at fair value in the consolidated financial statements on a recurring basis. Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted prices are not available, then fair values are estimated by using pricing models (e.g., matrix pricing) or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. Examples of such instruments include government agency bonds and mortgage-backed securities. Level 3 securities are securities for which significant unobservable inputs are utilized. There were no changes in valuation techniques used to measure similar assets during the period.

FHLB Stock: The carrying value of FHLB stock approximates fair value since the Bank can redeem such stock with FHLB at cost.  As a member of the FHLB, we are required to purchase this stock, which we carry at cost and classify as restricted equity securities.

35

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 12. Fair Value (Continued)

Loans: For variable rate loans, which reprice frequently and have no significant change in credit risk, carrying values are a reasonable estimate of fair values, adjusted for credit losses inherent in the portfolios. The fair value of fixed rate loans is estimated by discounting the future cash flows using estimated market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, adjusted for credit losses inherent in the portfolios. Impaired loans are valued using a present value discounted cash flow method, or the fair value of the collateral. Loans are not recorded at fair value on a recurring basis.

Loans Held for Sale:  Loans held for sale are carried at the lower of cost or fair value.  The fair value of loans held for sale is determined from actual bids from bona fide investors.  These assets are classified as Level 2.  

Other Real Estate Owned: Other real estate owned represents real estate acquired through foreclosure, and is recorded at fair value less estimated disposal costs on a nonrecurring basis. Fair value is based upon independent market prices, appraised values of the collateral or management's estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the asset is classified as Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the asset is classified as Level 3.

Deposits: The fair values of demand deposits, savings, NOW and money market accounts equal their carrying amounts, which represent the amounts payable on demand at the reporting date. Fair values for fixed-term, fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on certificates of deposit to a schedule of aggregated expected monthly maturities on such deposits. Deposits are not recorded at fair value on a recurring basis.

Advances From the Federal Home Loan Bank: The fair value of the advances is estimated using a discounted cash flow calculation that applies current market-based FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. These borrowings are not recorded at fair value on a recurring basis.

Off-Balance-Sheet Instruments: Fair values for off-balance-sheet instruments (lending commitments and standby letters of credit) are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. Off-balance-sheet instruments are not recorded at fair value on a recurring basis.

The following tables detail the assets that are carried at fair value and measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017, and indicate the level within the fair value hierarchy utilized to determine the fair value:

			June 30, 2018
					(Unaudited)
Description	Total		Level 1		Level 2		Level 3
Available-for-Sale Securities:
U.S. government and federal agencies	$	24,396	$	—	$	24,396	$	—
Mortgage-Backed Securities:
FNMA Certificates		905		—		905		—
GNMA Certificates		2,843		—		2,843		—
	$	28,144	$	—	$	28,144	$	—

			December 31, 2017
Description	Total		Level 1		Level 2		Level 3
Available-for-Sale Securities:
U.S. government and federal agencies	$	24,552	$	—	$	24,552	$	—
Mortgage-Backed Securities:
FNMA Certificates		1,103		—		1,103		—
GNMA Certificates		3,242		—		3,242		—
	$	28,897	$	—	$	28,897	$	—

36

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 12. Fair Value (Continued)

Our assessment and classification of an investment within a level can change over time based upon maturity or liquidity of the investment and would be reflected at the beginning of the quarter in which the change occurred.

The following tables detail the assets carried at fair value and measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017 and indicate the fair value hierarchy utilized to determine the fair value:

	June 30, 2018
	(Unaudited)
	Total		Level 1		Level 2		Level 3
Impaired loans	$	18,152	$	—	$	—	$	18,152
Loans held for sale	$	—	$	—	$	—	$	—
Other real estate owned	$	—	$	—	$	—	$	—

	December 31, 2017
	Total		Level 1		Level 2		Level 3
Impaired loans	$	25,160	$	—	$	—	$	25,160
Loans held for sale	$	—	$	—	$	—	$	—
Other real estate owned	$	—	$	—	$	—	$	—

Losses on assets carried at fair value on a nonrecurring basis were de minimis for the three and six months ended June 30, 2018 and 2017, respectively.

The fair value information about financial instruments are disclosed, whether or not recognized in the consolidated statements of financial condition, for which it is practicable to estimate that value. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The estimated fair value amounts for 2018 and 2017 have been measured as of their respective period-ends and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than amounts reported at each period.

The information presented should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company's assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company's disclosures and those of other banks may not be meaningful.

37

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 12. Fair Value (Continued)

As of June 30, 2018 and December 31, 2017, the book balances and estimated fair values of the Company's financial instruments were as follows:

	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3		Total
June 30, 2018 (Unaudited)
Financial assets:
Cash and cash equivalents	$	49,182	$	49,182	$	—	$	—	$	49,182
Investment securities		28,144		—		28,144		—		28,144
Loans held for sale		—		—		—		—		—
Loans receivable, net		850,426		—		—		857,229		857,229
Accrued interest receivable		3,350		—		3,350		—		3,350
FHLB stock		2,617		2,617		—		—		2,617
Pension plan asset		14,566		—		—		14,565		14,565
Financial liabilities:
Deposits:
Demand deposits		108,550		108,550		—		—		108,550
Interest-bearing deposits		209,901		209,901		—		—		209,901
Certificates of deposit		434,804		—		436,474		—		436,474
Advance payments by borrowers for taxes and insurance		5,491		—		5,491		—		5,491
Advances from FHLB		37,775		37,775		—		—		37,775
Accrued interest payable		141		—		141		—		141
December 31, 2017
Financial assets:
Cash and cash equivalents	$	59,724	$	59,724	$	—	$	—	$	59,724
Investment securities		28,897		—		28,897		—		28,897
Loans held for sale		—		—		—		—		—
Loans receivable, net		798,703		—		—		813,160		813,160
Accrued interest receivable		3,335		—		3,335		—		3,335
FHLB stock		1,511		1,511		—		—		1,511
Pension plan asset		14,735		—		—		14,696		14,696
Financial liabilities:
Deposits:
Demand deposits		103,001		103,001		—		—		103,001
Interest-bearing deposits		200,923		200,923		—		—		200,923
Certificates of deposit		410,061		—		414,902		—		414,902
Advance payments by borrowers for taxes and insurance		5,025		—		5,025		—		5,025
Advances from FHLB		36,400		36,400		—		—		36,400
Accrued interest payable		42		—		42		—		42

Off-Balance-Sheet Instruments: Loan commitments on which the committed interest rate is less than the current market rate are insignificant at June 30, 2018 and December 31, 2017.

Pension Plan Asset: The pension plan asset included above represents the guaranteed deposit account on the Old Pension Plan. The guaranteed deposit account is valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the creditworthiness of the issuer. Such fair value measurement is considered a Level 3 measurement.

38

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 13. Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve Board and the OCC, respectively. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s operations and financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation require the maintenance of minimum amounts and ratios (set forth in the table below) of total risk-based and Tier 1 capital to risk-weighted assets (as defined), common equity Tier 1 capital (as defined), and Tier 1 capital to adjusted total assets (as defined) adjusted total assets (as defined). Management believes that, as of June 30, 2018 and December 31, 2017, all applicable capital adequacy requirements have been met.

The below minimum capital requirements exclude the capital conservation buffer required to avoid limitations on capital distributions including dividend payments and certain discretionary bonus payments to executive officers.  The capital conservation buffer is being phased in from 0% for 2015 to 2.5% by 2019.  The applicable capital buffer was 12.1% at June 30, 2018 and 12.7% at December 31, 2017.

The most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, common equity risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There were no conditions or events since then that management believes have changed the Bank's category.

The Company's and the Bank’s actual capital amounts and ratios as of June 30, 2018 and December 31, 2017 as compared to regulatory requirements are as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2018 (Unaudited)
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	183,624		25.47	%	$	57,676		8.00	%	$	72,095		10.00	%
Tier 1 Capital to Risk-Weighted Assets		174,574		24.21	%		43,257		6.00	%		57,676		8.00	%
Common Equity Tier 1 Capital Ratio		174,574		24.21	%		32,443		4.50	%		46,861		6.50	%
Tier 1 Capital to Total Assets		174,574		18.07	%		38,639		4.00	%		48,299		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	144,379		20.07	%	$	57,550		8.00	%	$	71,938		10.00	%
Tier 1 Capital to Risk-Weighted Assets		135,349		18.81	%		43,163		6.00	%		57,550		8.00	%
Common Equity Tier 1 Capital Ratio		135,349		18.81	%		32,372		4.50	%		46,760		6.50	%
Tier 1 Capital to Total Assets		135,349		14.03	%		38,591		4.00	%		48,239		5.00	%

39

PDL Community Bancorp and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

As of June 30, 2018 (Unaudited) and December 31, 2017, and Three and Six Months Ended June 30, 2018 and 2017 (Unaudited)

(Dollars in thousands, unless otherwise stated)

Note 13. Regulatory Capital Requirements (Continued)

December 31, 2017
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	181,196	26.57	%	$	54,557	8.00	%	$	68,196	10.00	%
Tier 1 Capital to Risk-Weighted Assets		172,603	25.31	%		40,917	6.00	%		54,557	8.00	%
Common Equity Tier 1 Capital Ratio		172,603	25.31	%		30,688	4.50	%		44,327	6.50	%
Tier 1 Capital to Total Assets		172,603	20.02	%		34,501	4.00	%		43,127	5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	141,120	20.73	%	$	54,447	8.00	%	$	68,059	10.00	%
Tier 1 Capital to Risk-Weighted Assets		132,577	19.48	%		40,835	6.00	%		54,447	8.00	%
Common Equity Tier 1 Capital Ratio		132,577	19.48	%		30,626	4.50	%		44,238	6.50	%
Tier 1 Capital to Total Assets		132,577	14.67	%		36,152	4.00	%		45,190	5.00	%

Note 14. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows:

	June 30, 2018
	(Unaudited)
	December 31, 2017			Change			June 30, 2018
Unrealized gains (losses) on securities available for sale, net	$	(221	)	$	(182	)	$	(403	)
Unrealized losses on pension benefits, net		(7,630	)		(43	)		(7,673	)
Total	$	(7,851	)	$	(225	)	$	(8,076	)

	December 31, 2017
	December 31, 2016			Change			December 31, 2017
Unrealized gains (losses) on securities available for sale, net	$	(166	)	$	(55	)	$	(221	)
Unrealized gains (losses) on pension benefits, net		(6,084	)		(1,546	)		(7,630	)
Total	$	(6,250	)	$	(1,601	)	$	(7,851	)

Note 15.Transactions With Related Parties

Directors and officers of the Company have been customers of and have had transactions with the Bank, and it is expected that such persons will continue to have such transactions in the future. Aggregate loan transactions with related parties for the three and six months ended June 30, 2018 were as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Beginning balance	$	1,329		$	1,540		$	1,351		$	1,573
Originations		100			—			111			—
Payments		(33	)		(31	)		(66	)		(64	)
Ending balance	$	1,396		$	1,509		$	1,396		$	1,509

The Company held deposits in the amount of $6,336 and $5,959  from officers and directors at June 30, 2018 and December 31, 2017, respectively.

40

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

General

Management’s discussion and analysis of financial condition and results of operations at June 30, 2018 and December 31, 2017, and for the three and six months ended June 30, 2018 and 2017, is intended to assist in understanding the financial condition and results of operations of the Company.  The information contained in this section should be read in conjunction with the unaudited financial statements and the notes thereto appearing in Part I, Item 1, of this quarterly report on Form 10Q.

Cautionary Note Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements, which can be identified by the use of words such as "estimate," "project," "believe," "intend," "anticipate," "assume," "plan," "seek," "expect," "will," "may," "should," "indicate," "would," "believe," "contemplate," "continue," "target" and words of similar meaning. These forward-looking statements include, but are not limited to:

• statements of our goals, intentions and expectations;

• statements regarding our business plans, prospects, growth and operating strategies;

• statements regarding the quality of our loan and investment portfolios; and

• estimates of our risks and future costs and benefits.

These forward-looking statements are based on our current beliefs and expectations and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are beyond our control. In addition, these forward-looking statements are subject to assumptions with respect to future business strategies and decisions that are subject to change. We are under no duty to and do not take any obligation to update any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise.

The following factors, among others, could cause actual results to differ materially from the anticipated results or other expectations expressed in the forward-looking statements:

• general economic conditions, either nationally or in our market areas, that are worse than expected;

• changes in the level and direction of loan delinquencies and write-offs and changes in estimates of the adequacy of the allowance for loan losses;

• our ability to access cost-effective funding;

• fluctuations in real estate values and real estate market conditions;

• demand for loans and deposits in our market area;

• our ability to implement and change our business strategies;

• competition among depository and other financial institutions;

• inflation and changes in the interest rate environment that reduce our margins and yields, our mortgage banking revenues, the fair value of financial instruments or our level of loan originations, or increase the level of defaults, losses and prepayments on loans we have made and make;

• adverse changes in the securities or secondary mortgage markets;

• changes in laws or government regulations or policies affecting financial institutions, including changes in regulatory fees and capital requirements, including as a result of Basel III;

• the impact of the Dodd-Frank Act and the implementing regulations;

• changes in the quality or composition of our loan or investment portfolios;

• technological changes that may be more difficult or expensive than expected;

• the inability of third party providers to perform as expected;

• our ability to manage market risk, credit risk and operational risk in the current economic environment;

• our ability to enter new markets successfully and capitalize on growth opportunities;

41

• our ability to successfully integrate into our operations any assets, liabilities, customers, systems and management personnel we may acquire and our ability to realize related revenue synergies and cost savings within expected time frames, and any goodwill charges related thereto;

• changes in consumer spending, borrowing and savings habits;

• changes in accounting policies and practices, as may be adopted by the bank regulatory agencies, the Financial Accounting Standards Board, the Securities and Exchange Commission or the Public Company Accounting Oversight Board;

• our ability to retain key employees;

• our compensation expense associated with equity allocated or awarded to our employees; and

• changes in the financial condition, results of operations or future prospects of issuers of securities that we may own.

Additional factors that may affect our results are discussed in Form 10-K under the heading “Risk Factors” filed with the SEC on April 2, 2018.  As of June 30, 2018, the risk factors of the Company have not changed materially from those disclosed in Form 10-K.

Because of these and a wide variety of other uncertainties, our actual future results may be materially different from the results indicated by these forward-looking statements.

Summary of Significant Accounting Policies

The discussion and analysis of the financial condition and results of operations are based on our consolidated financial statements, which are prepared in conformity with U.S. GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions affecting the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities, and the reported amounts of income and expenses. We consider the accounting policies discussed below to be significant accounting policies. The estimates and assumptions that we use are based on historical experience and various other factors and are believed to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions, resulting in a change that could have a material impact on the carrying value of our assets and liabilities and our results of operations.

On April 5, 2012, the JOBS Act was signed into law. The JOBS Act contains provisions that, among other things, reduce certain reporting requirements for qualifying public companies. As an "emerging growth company" we intend to delay adoption of new or revised accounting pronouncements applicable to public companies until such pronouncements are made applicable to non-public companies. We intend to take advantage of the benefits of this extended transition period. Accordingly, our consolidated financial statements may not be comparable to companies that comply with such new or revised accounting standards.

The following represent our significant accounting policies:

Loans Receivable. Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at current unpaid principal balances, net of the allowance for loan losses and including net deferred loan origination fees and costs.

Interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments.  

A loan is moved to nonaccrual status typically after 90 days of non-payment. The accrual of interest on mortgage and business loans is generally discontinued at the time the loan becomes 90 days past due unless the loan is well-secured and in process of collection. Consumer loans are typically charged-off no later than 120 days past due.  Past-due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off if collection of principal or interest is considered doubtful.  All nonaccrual loans are considered impaired loans.  

All interest accrued but not received for loans placed on nonaccrual are reversed against interest income.  Interest received on such loans is accounted for on the cash-basis or recorded against principal balances only, until qualifying for return to accrual.  Cash-basis interest recognition is only applied on nonaccrual loans with a sufficient collateral margin to ensure no doubt with respect to the collectability of principal.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and remain current for a period of time (typically six months) and future payments are reasonably assured.

42

Allowance for Loan Losses.  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectability of a loan balance, or portion thereof, is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged-off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that we will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impaired loans are measured for impairment using the fair value of the collateral, present value of cash flows, or the observable market price of the note.  Impairment measurement for all collateral dependent loans, excluding accruing TDR’s is based on the fair value of collateral, less costs to sell, if necessary.  A loan is considered collateral dependent if repayment of the loan is expected to be provided solely by the sale or the operation of the underlying collateral.  

When a loan is modified in a TDR, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs if repayment under the modified terms becomes doubtful.

When establishing the allowance for loan losses, management categorizes loans into risk categories reflecting individual borrower earnings, liquidity, leverage and cash flow, as well as the nature of underlying collateral. The general component covers non-impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual losses experienced over a rolling 12 quarter average.  This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  

Management believes that the allowance for loan losses is appropriate at June 30, 2018.  The allowance for loan losses is reviewed by the board of directors on a quarterly basis in compliance with regulatory requirements. In addition, various regulatory agencies periodically review the allowance for loan losses.

Securities. Management determines the appropriate classification of securities at the date individual investment securities are acquired, and the appropriateness of such classification is reassessed at each statement of financial condition date.

Debt securities that management has the positive intent and ability to hold to maturity, if any, are classified as "held to maturity" and recorded at amortized cost. Trading securities, if any, are carried at fair value, with unrealized gains and losses recognized in earnings. Securities not classified as held to maturity or trading, are classified as "available for sale" and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss), net of taxes. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

43

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the consolidated statement of income and 2) OTTI related to other factors, which is recognized in other comprehensive income.  The credit loss is defined as the difference between the discounted present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific-identification method. The sale of a held-to-maturity security within three months of its maturity date or after collection of at least 85% of the principal outstanding at the time the security was acquired is considered a maturity for purposes of classification and disclosure.

Income Taxes. Income taxes are recognized under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that all or some portion of the deferred tax assets will not be realized.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Interest and penalties associated with unrecognized tax benefits, if any, would be classified as additional provision for income taxes in the consolidated statements of income.

Refer to Note 1 to the Consolidated Financial Statements for management’s assessment of recently issued accounting pronouncements.

Comparison of Financial Condition at June 30, 2018 and December 31, 2017

Total Assets. Total assets were $968.8 million at June 30, 2018, an increase of $43.3 million, or 4.7%, when compared to $925.5 million at December 31, 2017 primarily due to the continuation of our loan growth strategy.

Cash and Cash Equivalents. Cash and cash equivalents decreased $10.5 million, or 17.7%, to $49.2 million at June 30, 2018, when compared to $59.7 million at December 31, 2017. The decrease in cash and cash equivalents was primarily driven by the funding of the loan portfolio due to the increase in loan originations.

Net Loans Receivable. Net loans receivable increased $51.7 million, or 6.5%, to $850.4 million at June 30, 2018 from $798.7 million at December 31, 2017. During the six months ended June 30, 2018, there were increases totaling $52.4 million in loans, $7.7 million of which were one-to-four family residential loans, $28.1 million were non-residential loans, $35.5 million were multi-family loans, $28.5 million were land and construction loans (including $37.6 million of advances), and $454,000 were consumer loans. Business loans decreased $6.6 million. Principal repayments and other credits to net loans receivable for the six months ended June 30, 2018 were $41.3 million.

44

One-to-four family investor-owned residential real estate loans increased $9.3 million, or 3.2%, to $296.5 million at June 30, 2018 from $287.2 million at December 31, 2017; one-to-four family owner-occupied residential real estate loans decreased $8.6 million or 8.6%, to $92.2 million at June 30, 2018 from $100.8 million at December 31, 2017; multi-family loans increased $29.7 million, or 15.7%, to $218.2 million at June 30, 2018 from $188.6 million at December 31, 2017; nonresidential mortgages increased $17.6 million, or 11.6%, to $168.8 million at June 30, 2018 from $151.2 million at December 31, 2017; construction and land loans increased $5.4 million, or 7.9%, to $72.6 million at June 30, 2018 from $67.2 million at December 31, 2017.  Consumer loans at June 30, 2018, totaled $1.0 million, an increase of $141,000, or 15.9%, from $886,000 at December 31, 2017. Business loans decreased $1.2 million, or 9.1%, to $11.7 million at June 30, 2018 from $12.9 million at December 31, 2017.

Available-for-sale securities. Available-for-sale securities, consisting primarily of U.S. Government agency sponsored securities, as well as mortgage-backed securities decreased $753,000, or 2.6% to $28.1 million at June 30, 2018 from $28.9 million at December 31, 2017. The decrease was primarily driven by the mark-to-market adjustment of the portfolio.

Deposits.  Total deposits increased $39.3 million, or 5.5%, to $753.3 million at June 30, 2018 from $714.0 million at December 31, 2017. The increase was primarily due to increases in certificates of deposits of $24.7 million, or 6.0%, to $434.8 million at June 30, 2018 from $410.1 million at December 31, 2017 and demand deposit accounts of $5.6 million, or 5.4%, to $108.6 million at June 30, 2018 from $103.0 million at December 31, 2017. In addition, money market accounts increased $12.1 million, or 26.1%, to $58.6 million at June 30, 2018 from $46.5 million at December 31, 2017. The increase in certificates of deposits was primarily attributed to $17.8 million in brokered deposits and $15.8 million in listing service deposits, offset by $8.9 million in maturities and draws.  The increase in demand deposits is mainly due to an increase of $13.3 million in commercial checking accounts, offset by maturities and draws during the period. Brokered and listing service deposits are alternative funding sources that have previously been available, but have not historically been used as a funding source. Deposits obtained through a listing service are not considered brokered because the listing service does not engage in the business of placing deposits; it simply compiles information about interest rates offered on certificates of deposits by other insured depository institutions, then makes the list available to subscribing financial institutions. The brokered and listing service certificates of deposits provide an alternative funding source to fund loan growth and to lock in interest rates and complementary maturity structures in a rising rate environment.

Borrowings. We had outstanding borrowings at June 30, 2018 and December 31, 2017 of $37.8 million and $36.4 million, respectively.  These borrowings are in the form of advances from the Federal Home Loan Bank of New York (FHLB) and borrowings from our correspondent banking relationships. Historically, we have had limited reliance on borrowings to fund our operations.  However, we may utilize advances from the FHLB and borrowings from our correspondent bank relationships to supplement the supply of investable funds and further our organic loan growth.

Stockholders’ Equity. Total stockholders’ equity increased $1.8 million, or 1.1%, to $166.6 million at June 30, 2018 from $164.8 million at December 31, 2017. The increase was substantially due to net income of $1.6 million.

Comparison of Operating Results for the Three Months Ended June 30, 2018 and 2017

General. Net income decreased $425,000, or 37.8%, to $699,000 for the three months ended June 30, 2018, compared to $1.1 million for the three months ended June 30, 2017. The decrease was due to an increase in non-interest expense of $1.5 million, or 20.9%, to $8.5 million for the three months ended June 30, 2018 from $7.0 million for the same period last year, and a decrease in non-interest income of $360,000, or 40.7%, to $524,000 for the three months ended June 30, 2018 from $884,000 for the three months ended June 30, 2017.   These changes were offset by an increase in net interest income after provision for loan losses of $920,000, or 11.7%, to $8.8 million for the three months ended June 30, 2018 from $7.9 million for the same period last year, and a decrease of $475,000 in income tax expense, or 74.1%, to $166,000 for the three months ended June 30, 2018 from $641,000, for the three months ended June 30, 2017, resulting from the tax law change.

Interest Income. Interest and dividend income increased $1.7 million, or 17.3%, to $11.4 million for the three months ended June 30, 2018 from $9.7 million for the same period last year. The increase was due primarily to a $1.5 million, or 15.4%, increase in interest income on loans, which is our primary source of interest income. Our average balance of loans increased $134.3 million, or 18.9%, to $843.6 million for the three months ended June 30, 2018 from $709.3 million for the three months ended June 30, 2017. The increase in average balance resulted primarily from increases in the multifamily residential and nonresidential mortgage loan portfolios. Our average yield on loans decreased 16 basis points to 5.26% for the three months ended June 30, 2018 from 5.42% for the same period last year, as higher-yielding loans have been repaid or refinanced.

Interest and dividends income on investment securities and FHLB stock increased $207,000, or 168.3%, to $330,000 for the three months ended June 30, 2018 from $123,000 for the same period last year. The average rate we earned on investment securities and FHLB stock increased 57 basis points to 1.63% for the three months ended June 30, 2018 from 1.07% for the same period last

45

year. Our average balance of investment securities and FHLB stock and FHLB demand deposit account increased $35.2 million, or 76.5%, to $81.2 million for the three months ended June 30, 2018 from $46.0 million for the three months ended June 30, 2017.

Interest Expense. Interest expense increased $629,000 or 38.8%, to $2.3 million for the three months ended June 30, 2018 from $1.6 million for the same period last year. The increase was the result of an increase in interest expense on borrowings, certificates of deposit, and other deposits.  Specifically, interest expense on certificates of deposits increased $419,000, or 29.3%, to $1.8 million for the three months ended June 30, 2018 from $1.4 million for the same period in 2017. The average balance of certificates of deposit increased $68.2 million, or 17.9%, to $448.9 million for the three months ended June 30, 2018 from $380.7 million for the same period last year, while the average rate we paid on certificates of deposit increased 15 basis points to 1.65% for the three months ended June 30, 2018 from 1.50%  for the three months ended June 30, 2017.

Interest expense on other deposits and borrowings increased $210,000 to $403,000 for the three months ended June 30, 2018 from $193,000 for the three months ended June 30, 2017. The average balance of other deposits and borrowings increased $25.6 million, or 12.0%, to $239.1 million for the three months ended June 30, 2018 from $213.5 million for the same period last year, and the average rate we paid on other deposits and borrowings increased 31 basis points to 0.67% for the three months ended June 30, 2018  from 0.36% for the same period in 2017, reflecting higher market interest rates.

Net Interest Income. Net interest income increased $1.1 million, or 13.0%, to $9.1 million for the three months ended June 30, 2018 from $8.1 million for the three months ended June 30, 2017, primarily as a result of increasing loan volumes offset by lower average market yields on earning assets. Our average net interest-earning assets increased by $74.3 million, or 48.0%, to $228.9 million for the three months ended June 30, 2018 from $154.6 million for the same period in 2017, due primarily to our loan growth, described above. Our net interest rate spread decreased by 43 basis points to 3.64% for the three months ended June 30, 2018 from 4.07% for the three months ended June 30, 2017, and our net interest margin decreased by 33 basis points to 3.96% for the three months ended June 30, 2018 from 4.29% for the same period last year, reflecting primarily a higher cost of funds and lower market yields on earning assets.

An increase in interest rates will present us with a challenge in managing our interest rate risk. As a general matter, our interest-bearing liabilities reprice or mature more quickly than our interest-earning assets, which can result in interest expense increasing more rapidly than increases in interest income as interest rates increase. Therefore, increases in interest rates may adversely affect our net interest income and net economic value, which in turn would likely have an adverse effect on our results of operations. We expect that our net interest income and our net economic value would decrease as a result of an instantaneous increase in interest rates. To help manage interest rate risk, we are promoting core deposit products while concurrently diversifying our loan portfolio by introducing new lending programs. See “—Management of Market Risk” for additional information.

Provision for Loan Losses. Provisions for loan losses are charged to operations to establish an allowance for loan losses at a level necessary to absorb known and inherent losses that are both probable and reasonably estimable at the date of the financial statements. In evaluating the level of the allowance for loan losses, management analyzes several qualitative loan portfolio risk factors including, but not limited to, management’s ongoing review and grading of loans, facts and issues related to specific loans, historical loan loss and delinquency experience, trends in past due and non-accrual loans, existing risk characteristics of specific loans or loan pools, the fair value of underlying collateral, current economic conditions and other qualitative and quantitative factors which could affect potential credit losses. See “Summary of Significant Accounting Policies” and “—Allowance for Loan Losses” for additional information.

After an evaluation of these factors, we established a provision for loan losses for the three months ended June 30, 2018 of $337,000 as compared to $207,000 for the three months ended June 30, 2017. Our allowance for loan losses was $11.8 million at June 30, 2018 as compared to $11.1 million at December 31, 2017. The allowance for loan losses to total loans was 1.36% at three months ended June 30, 2018 as compared to 1.37% at December 31, 2017, and the allowance for loan losses to non-performing loans increased to 176.6% at June 30, 2018 from 97.1% at December 31, 2017.

To the best of our knowledge, we have recorded all loan losses that are both probable and reasonable to estimate at June 30, 2018. However, future changes in the factors described above, including, but not limited to, actual loss experience with respect to our loan portfolio, could result in material increases in our provision for loan losses. In addition, the Office of the Comptroller of the Currency, as an integral part of its examination process, periodically reviews our allowance for loan losses and as a result of such reviews, we may determine to adjust our allowance for loan losses. However, regulatory agencies are not directly involved in establishing the allowance for loan losses as the process is our responsibility and any increase or decrease in the allowance is the responsibility of management.

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Non-interest Income.The decrease in non-interest income for the three months ended June 30, 2018 compared to the same period in 2017 was primarily due to decreases of $183,000 in late and prepayment charges and $126,000 in brokerage commissions.

	For the Three Months Ended June 30,				Change						For the Six Months Ended June 30,				Change
	2018		2017		Amount			Percent			2018		2017		Amount			Percent
	(Dollars in thousands)
Service charges and fees	$	214	$	225	$	(11	)		(4.9	%)	$	437	$	454	$	(17	)		(3.7	%)
Brokerage commissions		42		168		(126	)		(75.0	%)		138	286			(148	)		(51.7	%)
Late and prepayment charges		52		235		(183	)		(77.9	%)		263	446			(183	)		(41.0	%)
Other		216		256		(40	)		(15.6	%)		571	456			115			25.2	%
Total noninterest income	$	524	$	884	$	(360	)		(40.7	%)	$	1,409	$	1,642	$	(233	)		(14.2	%)

Non-interest Expenses. For the three months ended June 30, 2018 compared to the same period in 2017, compensation and benefits expense increased by $607,000 mainly due to our investment in our employee base, including the senior management team and our sales and relationship management personnel, to help support our continued growth strategy. Occupancy expenses increased $317,000 and office supplies, telephone and postage increased $70,000. Other operating expenses increased by $583,000, primarily due to increases in loss on loans sold of $197,000 and audit fees and professional services of $333,000, and an increase of $86,000 in organizational dues, subscriptions, and contributions. Provision for contingencies increased $32,000.  These increases were partially offset by a decrease in data processing expenses of $113,000 and decreases of $32,000 in direct loan expenses, for the three months ended June 30, 2018 compared to the same period in 2017.

	For the Three Months Ended June 30,				Change						For the Six Months Ended June 30,				Change
	2018		2017		Amount			Percent			2018		2017		Amount			Percent
	(Dollars in thousands)
Compensation and benefits	$	4,563	$	3,956	$	607			15.3	%	$	8,918	$	7,785	$	1,133			14.6	%
Occupancy		1,717		1,400		317			22.6	%		3,208		2,826		382			13.5	%
Data processing		300		413		(113	)		(27.4	%)		708		866		(158	)		(18.2	%)
Direct loan expense		152		184		(32	)		(17.4	%)		307		379		(72	)		(19.0	%)
Insurance and surety bond premiums		99		79		20			25.3	%		188		161		27			16.8	%
Office supplies, telephone and postage		352		282		70			24.8	%		652		536		116			21.6	%
Federal deposit insurance premiums		66		58		8			13.8	%		134		124		10			8.1	%
Other operating expenses		1,206		623		583			93.6	%		2,599		1,414		1,185			83.8	%
Total noninterest expense	$	8,455	$	6,995	$	1,460			20.9	%	$	16,714	$	14,091	$	2,623			18.6	%

Income Tax Provision. We incurred income tax expense of $166,000 and $641,000 for the three months ended June 30, 2018 and 2017, respectively, resulting in effective rates of 19.2% and 36.3%, respectively. At June 30, 2018, net deferred tax assets amounted to $3.8 million compared to $3.9 million at December 31, 2017. The decrease in tax expense resulted primarily from a reduction of the effective tax rate due to federal tax reform enacted in December 2017.

Comparison of Operating Results for the Six Months Ended June 30, 2018 and 2017

General. Net income decreased $47,000, or 2.8%, to $1.6 million for the six months ended June 30, 2018, compared to $1.7 million for the six months ended June 30, 2017. The decrease was due to an increase in non-interest expense of $2.6 million, or 18.6%, to $16.7 million for the six months ended June 30, 2018 from $14.1 million for the six months ended June 30, 2017, and a decrease in non-interest income of $233,000, or 14.2%, to $1.4 million for the six months ended June 30, 2018 from $1.6 million for the same period last year.  These changes were offset by an increase of $2.2 million, or 14.9%, to $17.4 million in net interest income after provision for loan losses for the six months ended June 30, 2018 from $15.1 million for the same period last year, and by a decrease of $552,000 in income tax expense to $434,000 for the six months ended June 30, 2018, from $986,000 for the same period in 2017, resulting from the tax law change.

Interest Income. Interest and dividend income increased $3.6 million, or 19.4%, to $22.1 million for the six months ended June 30, 2018 from $18.5 million for the same period last year. The increase was due primarily to a $3.3 million, or 18.0%, increase in interest income on loans, which is our primary source of interest income. Our average balance of loans increased $144.2 million, or 21.0%, to $830.1 million for the six months ended June 30, 2018 from $685.9 million for the six months ended June 30, 2017. The increase in average balance resulted primarily from increases in the multifamily residential and nonresidential mortgage loan portfolios. Our average yield on loans decreased 13 basis points to 5.21% for the six months ended June 30, 2018 from 5.34% for the same period last year, as higher-yielding loans have been repaid or refinanced.

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Interest and dividends income on investment securities and FHLB stock increased $329,000, or 101.2%, to $654,000 for the six months ended June 30, 2018 from $325,000 for the same period last year. The average rate we earned on investment securities and FHLB stock increased 47 basis points to 1.68% for the six months ended June 30, 2018 from 1.21% for the same period last year. Our average balance of investment securities and FHLB stock and FHLB demand deposit account increased $24.2 million, or 44.7%, to $78.3 million for the six months ended June 30, 2018 from $54.1 million for the six months ended June 30, 2017.

Interest Expense. Interest expense increased $1.2 million or 37.5%, to $4.3 million for the six months ended June 30, 2018 from $3.1 million for the same period last year. The increase was the result of an increase in interest expense on borrowings, certificates of deposit, and other deposits.  Specifically, interest expense on certificates of deposits increased $853,000, or 31.1%, to $3.6 million for the six months ended June 30, 2018 from $2.7 million for the same period in 2017. The average balance of certificates of deposit increased $68.0 million, or 18.3%, to $439.6 million for the six months ended June 30, 2018 from $371.6 million for the same period last year, while the average rate we paid on certificates of deposit increased 16 basis points to 1.65% for the six months ended June 30, 2018  from 1.49% for the six months ended June 30, 2017.

Interest expense on other deposits and borrowings increased $314,000 to $686,000 for the six months ended June 30, 2018 from $372,000 for the six months ended June 30, 2017. The average balance of other deposits and borrowings increased $16.4 million, or 7.7%, to $229.6 million for the six months ended June 30, 2018 from $213.2 million for the same period last year, and the average rate we paid on other deposits and borrowings increased 25 basis points to 0.60% for the six months ended June 30, 2018 from 0.35% for the same period in 2017, reflecting higher market interest rates.

Net Interest Income. Net interest income increased $2.4 million, or 15.8%, to $17.8 million for the six months ended June 30, 2018 from $15.4 million for the six months ended June 30, 2017, primarily as a result of increasing loan volumes offset by lower market yields on earning assets. Our average net interest-earning assets increased by $82.5 million, or 55.2%, to $232.0 million for the six months ended June 30, 2018 from $149.4 million for the same period in 2017, due primarily to our loan growth, described above. Our net interest rate spread decreased by 35 basis points to 3.63% for the six months ended June 30, 2018 from 3.98% for the six months ended June 30, 2017, and our net interest margin decreased by 24 basis points to 3.95% for the six months ended June 30, 2018 from 4.19% for the same period last year, reflecting primarily a higher cost of funds and lower market yields on earning assets.

Provision for Loan Losses.  The provision for loan losses increased $172,000, or 66.4%, to $431,000 for the six months ended June 30, 2018 from $259,000 for the same six month period in 2017.  Our allowance for loan losses was $11.8 million at June 30, 2018 as compared to $11.1 million at December 31, 2017. The allowance for loan losses to total loans was 1.36% at three months ended June 30, 2018 as compared to 1.37% at December 31, 2017, and the allowance for loan losses to non-performing loans increased to 176.6% at June 30, 2018 from 97.1% at December 31, 2017.

Non-interest Income. The decrease in non-interest income for the six months ended June 30, 2018 compared to the same period in 2017 was primarily due to decreases of $183,000, in late payments and charges and $148,000 in brokerage commissions.

Non-interest Expenses. For the six months ended June 30, 2018 compared to the same period in 2017, compensation and benefits expense increased by $1.1 million mainly due to our investment in our employee base, including the senior management team and our sales and relationship management personnel, to help support our continued growth strategy. Occupancy expenses increased $382,000 and office, telephone and postage increased $116,000. Other operating expenses increased by $1.2 million, primarily due to increases in legal and consultant fees of $589,000, increases in audit and professional services of $167,000, and an increase in loss on loans sold of $230,000. These increases were partially offset by decreases in data processing expenses of $158,000, and decreases of $72,000 in direct loan expenses, for the six months ended June 30, 2018 compared to the same period in 2017.  

Income Tax Provision. We incurred income tax expense of $434,000 and $986,000 for the six months ended June 30, 2018 and 2017, respectively, resulting in effective rates of 20.9% and 36.9%, respectively. At June 30, 2018, net deferred tax assets amounted to $3.8 million compared to $3.9 million at December 31, 2017. The decrease in tax expense resulted primarily from a reduction of the effective tax rate due to federal tax reform enacted in December 2017.

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Average Balance Sheets

The following tables set forth average balance sheets, average yields and costs, and certain other information for the periods indicated. No tax-equivalent yield adjustments have been made, as the effects would be immaterial. All average balances are monthly average balances. Non-accrual loans were included in the computation of average balances. The yields set forth below include the effect of deferred fees, discounts, and premiums that are amortized or accreted to interest income or interest expense. Loan balances exclude loans held for sale.

	For the Three Months Ended June 30,
	2018							2017
	(Unaudited)
	Average							Average
	Outstanding				Average			Outstanding				Average
	Balance		Interest		Yield/Rate (1)			Balance		Interest		Yield/Rate (1)
	(Dollars in thousands)
Interest-earning assets:
Loans	$	843,641	$	11,053		5.26	%	$	709,330	$	9,581		5.42	%
Available-for-sale securities		28,267		104		1.48	%		34,251		90		1.05	%
Other (2)		52,967		226		1.71	%		11,752		33		1.13	%
Total interest-earning assets		924,875		11,383		4.94	%		755,333		9,704		5.15	%
Non-interest-earning assets		33,424							33,568
Total assets	$	958,299						$	788,901
Interest-bearing liabilities:
Savings accounts	$	126,133	$	148		0.47	%	$	128,004	$	123		0.39	%
Interest-bearing demand		84,339		50		0.24	%		74,862		37		0.20	%
Certificates of deposit		448,883		1,847		1.65	%		380,664		1,428		1.50	%
Total deposits		659,355		2,045		1.24	%		583,530		1,588		1.09	%
Advance payments by borrowers		8,045		1		0.05	%		6,596		1		0.06	%
Borrowings		28,595		204		2.86	%		10,648		32		1.21	%
Total interest-bearing liabilities		695,995		2,250		1.30	%		600,774		1,621		1.08	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		89,935		—					89,793		—
Other non-interest-bearing liabilities		5,104		—					3,396		—
Total non-interest-bearing liabilities		95,039		—					93,189		—
Total liabilities		791,034		2,250					693,963		1,621
Total equity		167,265							94,938
Total liabilities and total equity	$	958,299				1.30	%	$	788,901				1.08	%
Net interest income			$	9,133						$	8,083
Net interest rate spread (3)						3.64	%						4.07	%
Net interest-earning assets (4)	$	228,880						$	154,559
Net interest margin (5)						3.96	%						4.29	%
Average interest-earning assets to    interest-bearing liabilities						132.89	%						125.73	%

(1) Annualized where appropriate.

(2) Includes FHLB demand accounts and FHLB stock dividends.

(3) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

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	For the Six Months Ended June 30,
	2018							2017
	(Unaudited)
	Average							Average
	Outstanding				Average			Outstanding				Average
	Balance		Interest		Yield/Rate (1)			Balance		Interest		Yield/Rate (1)
	(Dollars in thousands)
Interest-earning assets:
Loans	$	830,114	$	21,439		5.21	%	$	685,883	$	18,172		5.34	%
Available-for-sale securities		28,478		209		1.48	%		43,246		273		1.27	%
Other (2)		49,852		445		1.80	%		10,862		52		0.97	%
Total interest-earning assets		908,444		22,093		4.90	%		739,991		18,497		5.04	%
Non-interest-earning assets		34,414							33,229
Total assets	$	942,858						$	773,220
Interest-bearing liabilities:
Savings accounts	$	125,308	$	279		0.45	%	$	127,890	$	245		0.39	%
Interest-bearing demand		80,837		102		0.25	%		73,502		64		0.18	%
Certificates of deposit		439,614		3,597		1.65	%		371,617		2,744		1.49	%
Total deposits		645,759		3,978		1.24	%		573,009		3,053		1.07	%
Advance payments by borrowers		7,313		2		0.06	%		5,766		2		0.07	%
Borrowings		23,409		303		2.61	%		11,795		61		1.04	%
Total interest-bearing liabilities		676,481		4,283		1.28	%		590,570		3,116		1.06	%
Non-interest-bearing liabilities:
Non-interest-bearing demand		94,625		—					84,957		—
Other non-interest-bearing liabilities		5,096		—					3,322		—
Total non-interest-bearing liabilities		99,721		—					88,279		—
Total liabilities		776,202		4,283					678,849		3,116
Total equity		166,656							94,371
Total liabilities and total equity	$	942,858				1.28	%	$	773,220				1.06	%
Net interest income			$	17,810						$	15,381
Net interest rate spread(3)						3.63	%						3.98	%
Net interest-earning assets (4)	$	231,963						$	149,421
Net interest margin (5)						3.95	%						4.19	%
Average interest-earning assets to
interest-bearing liabilities						134.29	%						125.30	%

(1) Annualized where appropriate.

(2) Includes FHLB demand accounts and FHLB stock dividends.

(3) Net interest rate spread represents the difference between the weighted average yield on interest-earning assets and the weighted average rate of interest-bearing liabilities.

(4) Net interest-earning assets represent total interest-earning assets less total interest-bearing liabilities.

(5) Net interest margin represents net interest income divided by average total interest-earning assets.

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Rate/Volume Analysis

The following table presents the effects of changing rates and volumes on our net interest income for the periods indicated. The volume column shows the effects attributable to changes in volume (changes in volume multiplied by prior rate). The rate column shows the effects attributable to changes in rate (changes in rate multiplied by prior volume). The total column represents the sum of the prior columns. For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately based on the changes due to rate and the changes due to volume.

	For the Three Months Ended June 30,								For the Six Months Ended June 30,
	2018 vs. 2017								2018 vs. 2017
	(Unaudited)								(Unaudited)
	Increase (Decrease) Due to						Total Increase		Increase (Decrease) Due to						Total Increase
	Volume			Rate			(Decrease)		Volume			Rate			(Decrease)
	(In thousands)								(In thousands)
Interest-earning assets:
Loans	$	2,844		$	(1,372	)	$	1,472	$	4,385		$	(1,118	)	$	3,267
Securities		(105	)		119			14		(123	)		59			(64	)
Other		(117	)		310			193		(23	)		416			393
Total interest-earning assets		2,622			(943	)		1,679		4,239			(643	)		3,596
Interest-bearing liabilities:
Savings accounts		(82	)		107			25		(45	)		79			34
Interest-bearing demand		(20	)		33			13		(26	)		64			38
Certificates of deposit		(235	)		654			419		145			708			853
Total deposits		(337	)		794			457		74			851			925
Advance payment by borrowers		1			(1	)		—		1			(1	)		—
Borrowings		(302	)		474			172		(125	)		367			242
Total interest-bearing liabilities		(638	)		1,267			629		(50	)		1,217			1,167
Change in net interest income	$	3,260		$	(2,210	)	$	1,050	$	4,289		$	(1,860	)	$	2,429

Management of Market Risk

General. Our most significant form of market risk is interest rate risk because, as a financial institution, the majority of our assets and liabilities are sensitive to changes in interest rates. Therefore, a principal part of our operations is to manage interest rate risk and limit the exposure of our financial condition and results of operations to changes in market interest rates. Our Asset/Liability Management Committee is responsible for evaluating the interest rate risk inherent in our assets and liabilities, for determining the level of risk that is appropriate, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the policy and guidelines approved by our Board of Directors. We currently utilize a third-party modeling solution that is prepared on a quarterly basis, to evaluate our sensitivity to changing interest rates, given our business strategy, operating environment, capital, liquidity and performance objectives, and for managing this risk consistent with the guidelines approved by the Board of Directors.

We do not engage in hedging activities, such as engaging in futures, options or swap transactions, or investing in high-risk mortgage derivatives, such as collateralized mortgage obligation residual interests, real estate mortgage investment conduit residual interests or stripped mortgage backed securities.

Net Interest Income. We analyze our sensitivity to changes in interest rates through a net interest income model. Net interest income is the difference between the interest income we earn on our interest-earning assets, such as loans and securities, and the interest we pay on our interest-bearing liabilities, such as deposits and borrowings. We estimate what our net interest income would be for a 12-month period. We then calculate what the net interest income would be for the same period under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by 100 basis point increments, with changes in interest rates representing immediate and permanent shifts in the yield curve. A basis point equals one-hundredth of one percent, and 100 basis points equals one percent. An increase in interest rates from 3% to 4% would mean, for example, a 100 basis point increase in the "Change in Interest Rates" in the net present value table below.

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The table below sets forth, as of June 30, 2018, the calculation of the estimated changes in our net interest income that would result from the designated immediate changes in the United States Treasury yield curve.

	Net Interest Income		Year 1 Change
Rate Shift (1)	Year 1 Forecast		from Level
	(Dollars in thousands)
+400	$	32,727		-5.57	%
+300		33,596		-3.06	%
+200		34,233		-1.22	%
+100		34,614		-0.12	%
Level		34,656		0.00	%
-100		34,397		-0.75	%

(1) Assumes an immediate uniform change in interest rates at all maturities.

The table above indicates that at June 30, 2018, in the event of an instantaneous 200 basis point increase in interest rates, we would experience a 1.22% decrease in net interest income, and in the event of an instantaneous 100 basis point decrease in interest rates, we would experience a 0.75% decrease in net interest income.

Net Present Value. We also compute amounts by which the net present value of our assets and liabilities ("NPV") would change in the event of a range of assumed changes in market interest rates. This model uses a discounted cash flow analysis and an option-based pricing approach to measure the interest rate sensitivity of net portfolio value. The model estimates the economic value of each type of asset, liability and off-balance sheet contract under the assumptions that the United States Treasury yield curve increases or decreases instantaneously by 100 basis point increments, with changes in interest rates representing immediate and permanent shifts in the yield curve.

The table below sets forth, as of June 30, 2018, the calculation of the estimated changes in our NPV that would result from the designated immediate changes in the United States Treasury yield curve.

									NPV as a Percentage of Present
									Value of Assets (3)
			Estimated Increase (Decrease) in									Increase
Change in Interest	Estimated		NPV						NPV			(Decrease)
Rates (basis points) (1)	NPV (2)		Amount			Percent			Ratio (4)			(basis points)
	(Dollars in thousands)
+400	$	130,626	$	(35,943	)		-21.58	%		14.47	%		(241	)
+300		140,108		(26,461	)		-15.89	%		15.18	%		(170	)
+200		149,744		(16,825	)		-10.10	%		15.86	%		(102	)
+100		159,134		(7,435	)		-4.46	%		16.48	%		(40	)
------		166,569		—			0.00	%		16.88	%		—
-100		172,358		5,789			3.48	%		17.13	%		25

(1) Assumes an immediate uniform change in interest rates at all maturities.

(2) NPV is the discounted present value of expected cash flows from assets, liabilities and off-balance sheet contracts.

(3) Present value of assets represents the discounted present value of incoming cash flows on interest-earning assets.

(4) NPV Ratio represents NPV divided by the present value of assets.

The table above indicates that at June 30, 2018, in the event of an instantaneous 200 basis point increase in interest rates, we would experience an 10.10% decrease in net present value, and in the event of an instantaneous 100 basis point decrease in interest rates, we would experience a 3.48% increase in net present value.

GAP Analysis. In addition, we analyze our interest rate sensitivity by monitoring our interest rate sensitivity "gap." Our interest rate sensitivity gap is the difference between the amount of our interest-earning assets maturing or repricing within a specific time period and the amount of our interest bearing-liabilities maturing or repricing within that same time period.  A gap is considered positive when the amount of interest rate sensitive assets maturing or repricing during a period exceeds the amount of interest rate sensitive liabilities maturing or repricing during the same period, and a gap is considered negative when the amount of interest rate sensitive liabilities maturing or repricing during a period exceeds the amount of interest rate sensitive assets maturing or repricing during the same period.

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The following table sets forth our interest-earning assets and our interest-bearing liabilities at June 30, 2018, which are anticipated to reprice or mature in each of the future time periods shown based upon certain assumptions. The amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at June 30, 2018, on the basis of contractual maturities, anticipated prepayments and scheduled rate adjustments. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and as a result of contractual rate adjustments on adjustable-rate loans.

	June 30, 2018
	(Unaudited)
	Time to Repricing
	Zero to 90 Days			Zero to 180 Days			Zero Days to One Year			Zero Days to Two Years			Zero Days to Five Years			Five Years Plus			Total Earning Assets & Costing Liabilities			Non Earning Assets & Non Costing Liabilities			Total
	(Dollars in thousands)
Assets:
Interest-bearing deposits in banks	$	42,094		$	42,094		$	42,094		$	42,094		$	42,094		$	42,094		$	42,094		$	7,088		$	49,182
Securities		5,100			10,079			17,434			27,339			28,655			28,655			28,655			(511	)		28,144
Net loans (includes LHFS)		62,611			103,796			191,743			330,817			788,954			855,836			855,836			(5,410	)		850,426
FHLB Stock		2,617			2,617			2,617			2,617			2,617			2,617			2,617			—			2,617
Other assets		—			—			—			—			—			—			—			38,444			38,444
Total	$	112,422		$	158,586		$	253,888		$	402,867		$	862,320		$	929,202		$	929,202		$	39,611		$	968,813
Liabilities:
Non-maturity deposits	$	209,901		$	209,901		$	209,901		$	209,901		$	209,901		$	209,901		$	209,901		$	108,550		$	318,451
Certificates of deposit		15,550			40,880			186,319			274,394			434,804			434,804			434,804			—			434,804
Other liabilities		37,775			37,775			37,775			37,775			37,775			37,775			37,775			11,205			48,980
Total liabilities		263,226			288,556			433,995			522,070			682,480			682,480			682,480			119,755			802,235
Capital		—			—			—			—			—			—			—			166,578			166,578
Total liabilities and capital	$	263,226		$	288,556		$	433,995		$	522,070		$	682,480		$	682,480		$	682,480		$	286,333		$	968,813
Asset/liability gap	$	(150,804	)	$	(129,970	)	$	(180,107	)	$	(119,203	)	$	179,840		$	246,722		$	246,722
Gap/assets ratio		42.71	%		54.96	%		58.50	%		77.17	%		126.35	%		136.15	%		136.15	%

At June 30, 2018, our asset/liability gap from zero days to one year was ($180.1 million), resulting in a gap/assets ratio of 58.50%.

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The following table sets forth our interest-earning assets and our interest-bearing liabilities at December 31, 2017, which are anticipated to reprice or mature in each of the future time periods shown based upon certain assumptions. The amounts of assets and liabilities shown which reprice or mature during a particular period were determined in accordance with the earlier of term to repricing or the contractual maturity of the asset or liability. The table sets forth an approximation of the projected repricing of assets and liabilities at December 31, 2017, on the basis of contractual maturities, anticipated prepayments and scheduled rate adjustments. The loan amounts in the table reflect principal balances expected to be redeployed and/or repriced as a result of contractual amortization and as a result of contractual rate adjustments on adjustable-rate loans.

	December 31, 2017
	Time to Repricing
	Zero to 90 Days			Zero to 180 Days			Zero Days to One Year			Zero Days to Two Years			Zero Days to Five Years			Five Years Plus			Total Earning Assets & Costing Liabilities			Non Earning Assets & Non Costing Liabilities			Total
	(Dollars in thousands)
Assets:
Interest-bearing deposits in banks	$	34,979		$	34,979		$	34,979		$	34,979		$	34,979		$	34,979		$	34,979		$	24,745		$	59,724
Securities		4,124			7,714			14,876			25,407			29,234			29,234			29,234			(337	)		28,897
Net loans (includes LHFS)		56,623			108,029			191,573			321,571			738,534			798,834			798,834			(131	)		798,703
FHLB Stock		—			—			—			—			1,511			1,511			1,511			—			1,511
Other assets		—			—			—			—			3			3			3			36,684			36,687
Total	$	95,726		$	150,722		$	241,428		$	381,957		$	804,261		$	864,561		$	864,561		$	60,961		$	925,522
Liabilities:
Non-maturity deposits	$	207,452		$	207,452		$	207,452		$	207,452		$	207,452		$	207,452		$	207,452		$	96,472		$	303,924
Certificates of deposit		40,874			80,015			158,836			241,656			407,800			410,061			410,061			—			410,061
Other liabilities		20,000			20,000			20,000			20,000			20,000			29,400			36,400			10,352			46,752
Total liabilities		268,326			307,467			386,288			469,108			635,252			646,913			653,913			106,824			760,737
Capital		—			—			—			—			—			—			—			164,785			164,785
Total liabilities and capital	$	268,326		$	307,467		$	386,288		$	469,108		$	635,252		$	646,913		$	653,913		$	271,609		$	925,522
Asset/liability gap	$	(172,600	)	$	(156,745	)	$	(144,860	)	$	(87,151	)	$	169,009		$	217,648		$	210,648
Gap/assets ratio		35.68	%		49.02	%		62.50	%		81.42	%		126.61	%		133.64	%		132.21	%

At December 31, 2017, our asset/liability gap from zero days to one year was ($144.9 million), resulting in a gap/assets ratio of 62.50%.

Certain shortcomings are inherent in the methodologies used in the above interest rate risk measurements. Modeling changes require making certain assumptions that may or may not reflect the manner in which actual yields and costs respond to changes in market interest rates. In this regard, the net interest income and net economic value tables presented assume that the composition of our interest-sensitive assets and liabilities existing at the beginning of a period remains constant over the period being measured and assumes that a particular change in interest rates is reflected uniformly across the yield curve regardless of the duration or repricing of specific assets and liabilities. Accordingly, although the net interest income and NPV tables provide an indication of our interest rate risk exposure at a particular point in time, such measurements are not intended to and do not provide a precise forecast of the effect of changes in market interest rates on net interest income and NPV and will differ from actual results. Furthermore, although certain assets and liabilities may have similar maturities or periods to repricing, they may react in different degrees to changes in market interest rates. Additionally, certain assets, such as adjustable-rate loans, have features that restrict changes in interest rates both on a short-term basis and over the life of the asset. In the event of changes in interest rates, prepayment and early withdrawal levels would likely deviate significantly from those assumed in calculating the gap table.

Interest rate risk calculations also may not reflect the fair values of financial instruments. For example, decreases in market interest rates can increase the fair values of our loans, deposits and borrowings.

Liquidity and Capital Resources

Liquidity describes our ability to meet the financial obligations that arise in the ordinary course of business. Liquidity is primarily needed to meet the borrowing and deposit withdrawal requirements of our customers and to fund current and planned expenditures. Our primary sources of funds are deposits, principal and interest payments on loans and securities and proceeds from the sale of loans. We also have the ability to borrow from the FHLB of New York. At June 30, 2018 and December 31, 2017, we had $37.8 million and $16.4 million, respectively, of term and overnight outstanding advances from the FHLB, and also had a guarantee from the FHLB through a standby letter of credit of $4.3 million.  At June 30, 2018, we had eligible collateral of approximately $71.4 million in mortgage loans available to secure advances from the Federal Home Loan Bank of New York.  We also have an unsecured line of credit of $25.0 million with one of our correspondent banks, of which we had none and $20.0 million outstanding at June 30, 2018 and December 31, 2017, respectively.  We did not have any securities sold under repurchase agreements with brokers as of June 30, 2018 and December 31, 2017.

54

Although maturities and scheduled amortization of loans and securities are predictable sources of funds, deposit flows and loan prepayments are greatly influenced by market interest rates, economic conditions, and competition. Our most liquid assets are cash and interest-bearing deposits in banks. The levels of these assets are dependent on our operating, financing, lending, and investing activities during any given period.

Net cash provided by operating activities was $3.6 million and $1.8 million for the six months ended June 30, 2018 and 2017, respectively. Net cash (used in) investing activities, which consists primarily of disbursements for loan originations and the purchases of securities, offset by principal collections on loans, proceeds from maturing securities and pay downs on mortgage-backed securities, was $(54.8) million and $(68.3) million for the six months ended June 30, 2018 and 2017, respectively. Net cash provided by financing activities, consisting of activities in deposit accounts and advances, was $40.6 million and $64.3 million for the six months ended June 30, 2018 and 2017, respectively.

We are committed to maintaining an adequate liquidity position. We monitor our liquidity position on a daily basis. We anticipate that we will have sufficient funds to meet our current funding commitments. Based on our deposit retention experience and current pricing strategy, we anticipate that a significant portion of maturing time deposits will be retained.

At June 30, 2018 and December 31, 2017, we exceeded all of our regulatory capital requirements, and we were categorized as well capitalized at June 30, 2018 and December 31, 2017. Management is not aware of any conditions or events that would change our category.

Off-Balance Sheet Arrangements and Aggregate Contractual Obligations

Commitments. As a financial services provider, we routinely are a party to various financial instruments with off-balance-sheet risks, such as commitments to extend credit and unused lines of credit. While these contractual obligations represent our future cash requirements, a significant portion of commitments to extend credit may expire without being drawn upon. Such commitments are subject to the same credit policies and approval process accorded to loans we make. At June 30, 2018 and December 31, 2017, we had outstanding commitments to originate loans and extend credit of $102.3 million and $94.8 million, respectively. We anticipate that we will have sufficient funds available to meet our current lending commitments. Certificates of deposit that are scheduled to mature in less than one year from June 30, 2018 totaled $186.3 million. Management expects that a substantial portion of the maturing time deposits will be renewed. However, if a substantial portion of these deposits is not retained, we may utilize FHLB advances, unsecured credit lines with correspondent banks, or raise interest rates on deposits to attract new accounts, which may result in higher levels of interest expense.

Contractual Obligations. In the ordinary course of our operations, we enter into certain contractual obligations. Such obligations include data processing services, operating leases for premises and equipment, agreements with respect to borrowed funds and deposit liabilities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

The information required by this item is included in Part I, Item 2 of this report under “Management of Market Risk”.

Item 4. Controls and Procedures.

An evaluation was performed under the supervision and with the participation of the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures (as defined in Rule 13a-15(e) or Rule 15d-15(e) promulgated under the Securities and Exchange Act of 1934, as amended) as of June 30, 2018.  Based on that evaluation, the Company’s management, including the Chief Executive Officer and the Chief Financial Officer, concluded that the Registrant’s disclosure controls and procedures were effective.

During the quarter ended June 30, 2018, there were no changes in our internal controls over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal controls over financial reporting.

55

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are not involved in any pending legal proceedings as a plaintiff or a defendant other than routine legal proceeding occurring in the ordinary course of business.  At June 30, 2018, we were not involved in any legal proceedings the outcome of which we believe would be material to our financial condition or results of operations.

Item 1A. Risk Factors.

In addition to the other information set forth in this quarterly report, you should carefully consider the factors discussed in our Form 10-K under the heading “Risk Factors” filed with the SEC on April 2^nd, 2018.  The Company’s evaluation of the risk factors applicable to it has not changed materially from those disclosed in our Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None

Item 3. Defaults Upon Senior Securities.

None

Item 4. Mine Safety Disclosures.

None

Item 5. Other Information.

None

56

Item 6. Exhibits

Exhibit Number	Description
3.1	Charter of PDL Community Bancorp (attached as Exhibit 3.1 to the Registrant’s amendment No. 1 to the Form S-1 (File No. 333-217275) filed with the Commission on May 22, 2017).
3.2	Bylaws of PDL Community Bancorp (attached as Exhibit 3.2 to the Registrant’s amendment No. 2 to the Form S-1 (File No. 333-217275) filed with the Commission on July 27, 2017.
4.1	Form of Common Stock Certificate of PDL Community Bancorp (attached as Exhibit 4.1 to the Registrant’s amendment No. 2 to the Form S-1 (File No, 333-217275) filed with the Commission on July 27, 2017).
10.1	Ponce Bank Employee Stock Ownership Plan (attached as Exhibit 10.1 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.2	Ponce Bank ESOP Equalization Plan (attached as Exhibit 10.2 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.3	Ponce De Leon Federal Deferred Compensation Plan (attached as Exhibit 10.3 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.4	Employment Agreement dated as of March 23, 2017, by and between Ponce de Leon Federal Bank and Carlos P. Naudon (attached as Exhibit 10.4 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.5	Form of Employment Agreement to be entered into by and among Ponce Bank Mutual Holding Company, PDL Community Bancorp and Carlos P. Naudon (attached as Exhibit 10.5 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.6	Employment Agreement dated March 23, 2017, by and between Ponce De Leon Federal Bank and Steven Tsavaris (attached as Exhibit 10.6 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.7	Form of Employment Agreement to be entered into by and among Ponce Bank Mutual Holding Company, PDL Community Bancorp and Steven Tsavaris (attached as Exhibit 10.7 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.8	Employment Agreement dated March 31, 2017, by and between Ponce De Leon Federal Bank and Frank Perez (attached as Exhibit 10.8 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
10.9	Form of Employment Agreement to be entered into by and among Ponce Bank Mutual Holding Company, PDL Community Bancorp and Frank Perez (attached as Exhibit 10.9 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
21.1	Subsidiaries of the Registrant (attached as Exhibit 21.1 to the Registrant’s Form S-1 (File No. 333-217275) filed with the Commission on April 12, 2017).
31.1*	Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*	Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

57

32.2*	Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

* Filed herewith.

58

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Company Name
Date:  August 10, 2018	By:	/s/ Carlos P.  Naudon
		Carlos P. Naudon
		President and Chief Executive Officer
Date:  August 10, 2018	By:	/s/ Frank Perez
		Frank Perez
		Executive Vice President and Chief Financial Officer

59

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Carlos P. Naudon, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PDL Community Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date: August 10, 2018	By:	/s/ Carlos P. Naudon
		Carlos P. Naudon President
		Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Frank Perez, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of PDL Community Bancorp;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;

4. The small business issuer's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the small business issuer and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and

5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.

Date:  August 10, 2018	By:	/s/ Frank Perez
		Frank Perez Executive Vice President
		Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PDL Community Bancorp (the “Company”) on Form 10-Q for the period ending  June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:  August 10, 2018	By:	/s/ Carlos P. Naudon
		Carlos P. Naudon President
		Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of PDL Community Bancorp (the “Company”) on Form 10-Q for the period ending  June 30, 2018 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

Date:  August 10, 2018	By:	/s/ Frank Perez
		Frank Perez Executive Vice President
		Chief Financial Officer

XML

Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2018	Aug. 10, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	Q2
Trading Symbol	PDLB
Entity Registrant Name	PDL Community Bancorp
Entity Central Index Key	0001703489
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		18,463,028

XML

Consolidated Statements of Financial Condition - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Cash and due from banks (Note 2):
Cash	$ 7,088	$ 24,746
Interest-bearing deposits in banks	42,094	34,978
Total cash and cash equivalents	49,182	59,724
Available-for-sale securities, at fair value (Note 3)	28,144	28,897
Loans receivable, net (Note 4)	850,426	798,703
Accrued interest receivable	3,350	3,335
Premises and equipment, net (Note 5)	28,366	27,172
Federal Home Loan Bank Stock (FHLB), at cost	2,617	1,511
Deferred tax assets (Note 8)	3,805	3,909
Other assets	2,923	2,271
Total assets	968,813	925,522
Liabilities:
Deposits (Note 6)	753,255	713,985
Accrued interest payable	141	42
Advance payments by borrowers for taxes and insurance	5,491	5,025
Advances from the Federal Home Loan Bank and others (Note 7)	37,775	36,400
Other liabilities	5,573	5,285
Total liabilities	802,235	760,737
Commitments and contingencies (Note 11)
Stockholders' Equity:
Preferred stock, $0.01 par value; 10,000,000 shares authorized, none issued
Common stock, $0.01 par value; 50,000,000 shares authorized; 18,463,028 shares issued and outstanding	185	185
Additional paid-in-capital	84,488	84,351
Retained earnings	96,495	94,855
Accumulated other comprehensive loss (Note 14)	(8,076)	(7,851)
Unearned compensation - ESOP; 651,375 shares (Note 9)	(6,514)	(6,755)
Total stockholders' equity	166,578	164,785
Total liabilities and stockholders' equity	$ 968,813	$ 925,522

XML

Consolidated Statements of Financial Condition (Parenthetical) - $ / shares	Jun. 30, 2018	Dec. 31, 2017
Statement Of Financial Position [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	10,000,000	10,000,000
Preferred stock, shares issued	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized	50,000,000	50,000,000
Common stock, shares, issued	18,463,028	18,463,028
Common stock, shares, outstanding	18,463,028	18,463,028
Unearned compensation, ESOP shares	651,375	675,501

XML

Consolidated Statements of Income (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Interest and dividend income:
Interest on loans receivable	$ 11,053	$ 9,581	$ 21,439	$ 18,172
Interest and dividends on investment securities and FHLB stock	330	123	654	325
Total interest and dividend income	11,383	9,704	22,093	18,497
Interest expense:
Interest on certificates of deposit	1,847	1,428	3,597	2,744
Interest on other deposits	199	161	383	311
Interest on borrowings	204	32	303	61
Total interest expense	2,250	1,621	4,283	3,116
Net interest income	9,133	8,083	17,810	15,381
Provision for loan losses (Note 4)	337	207	431	259
Net interest income after provision for loan losses	8,796	7,876	17,379	15,122
Noninterest income:
Service charges and fees	214	225	437	454
Brokerage commissions	42	168	138	286
Late and prepayment charges	52	235	263	446
Other	216	256	571	456
Total noninterest income	524	884	1,409	1,642
Noninterest expense:
Compensation and benefits	4,563	3,956	8,918	7,785
Occupancy expense	1,717	1,400	3,208	2,826
Data processing expenses	300	413	708	866
Direct loan expenses	152	184	307	379
Insurance and surety bond premiums	99	79	188	161
Office supplies, telephone and postage	352	282	652	536
FDIC deposit insurance assessment	66	58	134	124
Other operating expenses	1,206	623	2,599	1,414
Total noninterest expense	8,455	6,995	16,714	14,091
Income before income taxes	865	1,765	2,074	2,673
Provision for income taxes (Note 8)	166	641	434	986
Net income	$ 699	$ 1,124	$ 1,640	$ 1,687
Earnings per share for the period January 1, 2018 to June 30, 2018: (Note 10)
Basic	$ 0.04		$ 0.09
Diluted	$ 0.04		$ 0.09

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Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Statement Of Income And Comprehensive Income [Abstract]
Net income	$ 699	$ 1,124	$ 1,640	$ 1,687
Net change in unrealized gains (losses) on securities available-for-sale:
Unrealized gain (losses)	(5)	115	(174)	24
Income tax effect	1	(39)	(8)	(9)
Unrealized gains (losses) on securities, net of tax	(4)	76	(182)	15
Pension benefit liability adjustment:
Net gain (loss)	(31)		(65)	(31)
Income tax effect	11		22	11
Pension liability adjustment, net of tax	(20)		(43)	(20)
Total other comprehensive income (loss), net of tax	(24)	76	(225)	(5)
Total comprehensive income	$ 675	$ 1,200	$ 1,415	$ 1,682

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Retained Earnings	Accumulated Other Comprehensive Loss	Unallocated Common Stock of ESOP
Balance at Dec. 31, 2016	$ 92,992			$ 99,242	$ (6,250)
Net income	1,687			1,687
Other comprehensive loss, net of tax	(5)				(5)
Balance at Jun. 30, 2017	94,674			100,929	(6,255)
Balance at Dec. 31, 2017	164,785	$ 185	$ 84,351	94,855	(7,851)	$ (6,755)
Balance, Shares at Dec. 31, 2017		18,463,028
Net income	1,640			1,640
Other comprehensive loss, net of tax	(225)				(225)
ESOP shares committed to be released (12,063 shares)	378		137			241
Balance at Jun. 30, 2018	$ 166,578	$ 185	$ 84,488	$ 96,495	$ (8,076)	$ (6,514)
Balance, Shares at Jun. 30, 2018	0	18,463,028

XML

Consolidated Statements of Stockholders' Equity (Parenthetical) - shares	Jun. 30, 2018	Dec. 31, 2017
Statement Of Stockholders Equity [Abstract]
Number of ESOP shares committed to be released	24,126	48,250

XML

Consolidated Statements of Cash Flows - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Cash Flows From Operating Activities:
Net income	$ 699,000	$ 1,124,000	$ 1,640,000	$ 1,687,000
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization of premiums on securities, net			6,000	7,000
Loss on sale of loans, net			54,000
Loss on sale of available-for-sale securities				6,000
Provision for loan losses	337,000	207,000	431,000	259,000	$ 1,716,000
Depreciation and amortization	437,000	399,000	854,000	803,000
Deferred income taxes			117,000	4,000
ESOP compensation	201,000	0	378,000	0
Changes in assets and liabilities:
Decrease (increase) in accrued interest receivable			(15,000)	(210,000)
Increase in other assets			(652,000)	(2,777,000)
Increase (decrease) in accrued interest payable			99,000	3,000
Net increase in other liabilities			690,000	1,968,000
Net cash provided by operating activities			3,602,000	1,750,000
Cash Flows From Investing Activities:
Proceeds from redemption of FHLB Stock				6,492,000
Purchases of FHLB Stock			(1,106,000)	(6,816,000)
Proceeds from sale of available-for-sale securities				20,411,000
Proceeds from maturities, calls and principal repayments on available-for-sale securities			573,000	2,622,000
Proceeds from sales of loans			4,761,000
Net increase in loans			(56,969,000)	(90,631,000)
Purchases of premises and equipment			(2,048,000)	(375,000)
Net cash used in investing activities			(54,789,000)	(68,297,000)
Cash Flows From Financing Activities:
Net increase in deposits			39,270,000	59,327,000
Proceeds from advances			21,375,000	1,567,000,000
Repayments of advances			(20,000,000)	(1,562,000,000)
Net cash provided by financing activities			40,645,000	64,327,000
Net decrease in cash and cash equivalents			(10,542,000)	(2,220,000)
Cash and Cash Equivalents:
Beginning			59,724,000	11,716,000	11,716,000
Ending	$ 49,182,000	$ 9,496,000	49,182,000	9,496,000	$ 59,724,000
Supplemental Disclosures:
Interest			4,184,000	3,113,000
Income taxes			$ 132,000	$ 549,000

XML

Nature of Business and Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Nature of Business and Summary of Significant Accounting Policies

Note 1. Nature of Business and Summary of Significant Accounting Policies

Basis of Presentation and Consolidation:

The unaudited interim Consolidated Financial Statements of PDL Community Bancorp (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”).  In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included.  Interim results are not necessarily reflective of the results of the entire year.  The accompanying unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2017 included in the Company’s annual report on Form 10-K.

The unaudited interim Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiary Ponce Bank (the “Bank”), and the Bank’s wholly-owned subsidiaries.  The Bank’s subsidiaries consist of PFS Service Corp., which owns some of the Bank’s real property, and Ponce De Leon Mortgage Corp., which is a mortgage banking entity.  All significant intercompany transactions and balances have been eliminated in consolidation.

Reorganization and Stock Offering:

On September 29, 2017, Ponce De Leon Federal Bank reorganized into a two-tier mutual holding company structure with a mid-tier stock holding company.  The Company sold 8,308,362 shares of common stock at $10.00 per share, including 723,751 shares purchased by the Company’s Employee Stock Ownership Plan (“ESOP”).  In addition, the Company issued 9,545,387 shares to Ponce Bank Mutual Holding Company, the Company’s mutual holding company parent (the “MHC”) and 609,279 shares to The Ponce De Leon Foundation (“Foundation”), a charitable foundation that was formed in connection with the stock offering and is dedicated to supporting charitable organizations operating in the Bank’s local community.  A total of 18,463,028 shares of common stock were outstanding following the completion of the stock offering. As a result of the reorganization, the reporting entity changed from Ponce De Leon Federal Bank to PDL Community Bancorp.

The direct costs of the Company’s stock offering of $4,988 were deferred and deducted from the proceeds of the offering.

Nature of Operations:

The Bank is a federally chartered savings association headquartered in the Bronx, New York.  Ponce De Leon Federal Bank was originally chartered in 1960 as a federally chartered mutual savings and loan association under the name Ponce De Leon Federal Savings and Loan Association.  In 1985, the Bank changed its name to “Ponce De Leon Federal Savings Bank.”  In 1997, the Bank changed its name again to “Ponce De Leon Federal Bank.”   Upon the completion of its reorganization into the MHC, the assets and liabilities of Ponce De Leon Federal Bank were transferred to and assumed by the Bank, a federally chartered stock savings association, owned 100% by PDL Community Bancorp and known as and conducting business under the name “Ponce Bank.” The Bank will continue to be subject to comprehensive regulation and examination by the Office of Comptroller of the Currency (the “OCC”).

The Bank’s business is conducted through the administrative office and 13 branch offices.  The banking offices are located in the Bronx, Manhattan, Queens and Brooklyn, New York and Union City, New Jersey.  The primary market area currently consists of the New York City metropolitan area.

The Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of one-to-four family residential (both investor-owned and owner-occupied), multifamily residential, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans. The Bank also invests in securities, which have historically consisted of U.S. government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as, mortgage-backed securities and Federal Home Loan Bank stock.   The Bank offers a variety of deposit accounts, including demand, savings, money markets and certificates of deposit accounts.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

The following is a summary of the Company’s significant accounting policies:   

Use of Estimates:  In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the consolidated statement of financial condition, and revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of loans held for sale, the valuation of deferred tax assets and investment securities, and the determination of pension benefit obligations.

Interim Financial Statements:  The interim consolidated financial statements at June 30, 2018, and for the three and six months ended June 30, 2018 and 2017 are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2018, or any other period.

Significant Group Concentrations of Credit Risk:  Most of the Bank's activities are with customers located within New York City. Accordingly, the ultimate collectability of a substantial portion of the Bank's loan portfolio is susceptible to changes in the local market conditions. Note 3 discusses the types of securities that the Bank invests in. Notes 4 and 11 discuss the types of lending that the Bank engages in, and other concentrations.

Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand and amounts due from banks (including items in process of clearing). For purposes of reporting cash flows, the Bank considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash flows from loans originated by the Bank, interest-bearing deposits in financial institutions, and deposits are reported net.

Securities:  Management determines the appropriate classification of securities at the date individual investment securities are acquired, and the appropriateness of such classification is reassessed at each statement of financial condition date.

Debt securities that management has the positive intent and ability to hold to maturity, if any, are classified as "held to maturity" and recorded at amortized cost. Trading securities, if any, are carried at fair value, with unrealized gains and losses recognized in earnings. Securities not classified as held to maturity or trading, are classified as "available for sale" and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss), net of tax. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the consolidated statement of income (loss) and 2) OTTI related to other factors, which is recognized in other comprehensive income (loss).

The credit loss is defined as the difference between the discounted present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific-identification method. The sale of a held-to-maturity security within three months of its maturity date or after collection of at least 85% of the principal outstanding at the time the security was acquired is considered a maturity for purposes of classification and disclosure.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Federal Home Loan Bank Stock:  The Bank is a member of the Federal Home Loan Bank of New York (the “FHLB”).  Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.  

Loans Receivable:  Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at current unpaid principal balances, net of the allowance for loan losses and including net deferred loan origination fees and costs.

Interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments.  

A loan is moved to nonaccrual status in accordance with the Bank’s policy typically after 90 days of non-payment. The accrual of interest on mortgage and commercial loans is generally discontinued at the time the loan becomes 90 days past due unless the loan is well-secured and in process of collection. Consumer loans are typically charged-off no later than 120 days past due.  Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off if collection of principal or interest is considered doubtful.  All nonaccrual loans are considered impaired loans.  

All interest accrued but not received for loans placed on nonaccrual are reversed against interest income.  Interest received on such loans is accounted for on the cash basis or recorded against principal balances only, until qualifying for return to accrual.  Cash basis interest recognition is only applied on nonaccrual loans with a sufficient collateral margin to ensure no doubt with respect to the collectability of principal.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and remain current for a period of time (typically six months) and future payments are reasonably assured.

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impaired loans are measured for impairment using the fair value of the collateral, present value of cash flows, or the observable market price of the note.  Impairment measurement for all collateral dependent loans, excluding accruing TDR’s, is based on the fair value of collateral, less costs to sell, if necessary.  A loan is considered collateral dependent if repayment of the loan is expected to be provided solely by the sale or the operation of the underlying collateral.  

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

When the Bank modifies a loan in a TDR, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs, if repayment under the modified terms becomes doubtful.

The general component covers non‑impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced over a rolling 12 quarter average period. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  

When establishing the allowance for loan losses, management categorizes loans into risk categories reflecting individual borrower earnings, liquidity, leverage and cash flow, as well as the nature of underlying collateral. These risk categories and relevant risk characteristics are as follows:

Residential and Multifamily Mortgage Loans:  The majority of loans at the Bank are secured by first mortgages. Residential and multifamily mortgage loans are typically underwritten with loan-to-value ratios ranging from 65% to 90%. The primary risks involved in residential mortgages are the borrower’s loss of employment, or other significant event, that negatively impacts the source of repayment. Additionally, a serious decline in home values could jeopardize repayment in the event that the underlying collateral needs to be liquidated to pay off the loan.

Nonresidential Mortgage Loans:  Nonresidential mortgage loans are primarily secured by commercial buildings, office and industrial buildings, warehouses, small retail shopping centers and various special purpose properties, including hotels, restaurants and nursing homes. These loans are typically underwritten at no more than 75% loan-to-value ratio. Although terms vary, commercial real estate loans generally have amortization periods of 15 to 30 years, as well as balloon payments of 10 to 15 years, and terms which provide that the interest rate is adjusted on a 5 year schedule.

Construction and Land Loans:  Construction real estate loans consist of vacant land and property that is in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. In the event a loan is made on property that is not yet improved for the planned development, there is the risk that government approvals will not be granted or will be delayed. Construction loans also run the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Construction real estate loans generally have terms of six months to two years during the construction period with fixed rates or interest rates based on a designated index.                                                                                                                                                                                          

Business Loans:  Business loans are loans for commercial, corporate and business purposes, including issuing letters of credit. These loans are secured by business assets or may be unsecured and repayment is directly dependent on the successful operation of the borrower’s business and the borrower’s ability to convert the assets to operating revenue.  They possess greater risk than most other types of loans because the repayment capacity of the borrower may become inadequate. Business loans generally have terms of five years to seven years or less and interest rates that float in accordance with a designated published index. Substantially all such loans are backed by the personal guarantees of the owners of the business.

Consumer Loans:  Consumer loans generally have higher interest rates than mortgage loans. The risk involved in consumer loans is the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans include passbook loans and other secured and unsecured loans that have been made for a variety of consumer purposes.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Loans Held for Sale:  Loan sales occur from time to time as part of strategic business or regulatory compliance initiatives.  Loans held for sale, including deferred fees and costs, are reported at the lower of cost or fair value as determined by expected bid prices from potential investors. Loans are sold without recourse and servicing released. When a loan is transferred from portfolio to held-for-sale and the fair value is less than cost, a charge-off is recorded against the allowance for loan losses. Subsequent declines in fair value, if any, are charged against earnings.

Transfers of Financial Assets:  Transfers of financial assets are accounted for as sales when all of the components meet the definition of a participating interest and when control over the assets has been surrendered. A participating interest generally represents (1) a proportionate (pro rata) ownership interest in an entire financial asset, (2) a relationship where from the date of transfer all cash flows received from the entire financial asset are divided proportionately among the participating interest holders in an amount equal to their share of ownership, (3) the priority of cash flows has certain characteristics, including no reduction in priority, subordination of interest, or recourse to the transferor other than standard representation or warranties, and (4) no party has the right to pledge or exchange the entire financial asset unless all participating interest holders agree to pledge or exchange the entire financial asset. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through either (a) an agreement to repurchase them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets, other than through a clean-up call.

Premises and Equipment:  Premises and equipment are stated at cost, less accumulated depreciation.

Depreciation is computed and charged to operations using the straight-line method over the estimated useful lives of the respective assets as follows:

	Years
Building	39
Building improvements	15 - 39
Furniture, fixtures, and equipment	3 - 10

Leasehold improvements are amortized over the shorter of the improvements’ estimated economic lives or the related lease terms, including extensions expected to be exercised. Gains and losses on dispositions are recognized upon realization. Maintenance and repairs are expensed as incurred and improvements are capitalized.  Leasehold improvements in process are not amortized until the assets are placed in operation.  

Impairment of Long-Lived Assets:  Long-lived assets, including premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment is indicated by that review, the asset is written down to its estimated fair value through a charge to noninterest expense.

Other Real Estate Owned:  Other Real Estate Owned (“OREO”) represents properties acquired through, or in lieu of, loan foreclosure or other proceedings. OREO is initially recorded at fair value, less estimated disposal costs, at the date of foreclosure, which establishes a new cost basis. After foreclosure, the properties are held for sale and are carried at the lower of cost or fair value, less estimated costs of disposal. Any write-down to fair value, at the time of transfer to OREO, is charged to the allowance for loan losses. Properties are evaluated regularly to ensure that the recorded amounts are supported by current fair values and charges against earnings are recorded as necessary to reduce the carrying amount to fair value, less estimated costs to dispose. Costs relating to the development and improvement of the property are capitalized, subject to the limit of fair value of the OREO, while costs relating to holding the property are expensed. Gains or losses are included in operations upon disposal.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Income Taxes:  The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that all or some portion of the deferred tax assets will not be realized.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

As of June 30, 2018 and December 31, 2017, there are no liabilities recorded related to uncertain tax positions. Income tax returns filed for years before 2014 are no longer subject to income tax examinations by U.S. federal, state or local tax authorities.

Interest and penalties associated with unrecognized tax benefits, if any, would be classified as additional provision for income taxes in the consolidated statements of income (loss).

Related Party Transactions:  Directors and officers of the Company and their affiliates have been customers of and have had transactions with the Company, and it is expected that such persons will continue to have such transactions in the future. Management believes that all deposit accounts, loans, services and commitments comprising such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers who are not directors or officers. In the opinion of management, the transactions with related parties did not involve more than normal risk of collectability, nor favored treatment or terms, nor present other unfavorable features. Note 15 contains details regarding related party transactions.

Employee Benefit Plans:  The Company maintains Ponce Bank’s 401(K) Plan, the noncontributory defined benefit plan, as well as, the Supplemental Executive Retirement Plans (the “SERP’s”).  The noncontributory defined benefit pension plan was effectively frozen on May 31, 2007. The funding policy is to contribute annually the amounts sufficient to meet the minimum funding standards established by the Employee Retirement Income Security Act (“ERISA”) and such additional amounts as determined by management based on actuary recommendations.

Employee Stock Ownership Plan:  Compensation expense is recorded as shares are committed to be released with a corresponding credit to unearned ESOP shares at the average fair market value of the shares during the period and the shares become outstanding for earnings per share computations.  Compensation expense is recognized ratably over the service period based upon management’s estimate of the number of shares expected to be allocated by the ESOP.  The difference between the average fair market value and the cost of the shares allocated by the ESOP is recorded as an adjustment to additional paid-in-capital. Unallocated common shares held by the Company’s ESOP are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for both basic and diluted earnings per share calculations until they are committed to be released.

Comprehensive Income (Loss):  Comprehensive income (loss) consists of net income and other comprehensive income (loss), which are both recognized as separate components of equity.  Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale and unrecognized gains and losses on actuarial loss and prior service cost of the defined benefit plan.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Loss Contingencies:  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.  Management does not believe there are any such matters that will have a material effect on the operations and financial position of the Company.

Fair Value of Financial Instruments:  Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 12.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect these estimates.

Segment Reporting:  While management monitors the revenue streams of the various products and services, the identifiable segments and operations are managed and financial performance is evaluated on a Company-wide basis.  Accordingly, all of the financial service operations are considered by management to be aggregate in one reportable operating segment.

Loan Commitments and Related Financial Instruments:   Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.  

Earnings Per Share (“EPS”):  Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period less unallocated ESOP shares.  Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period.  

Recent Accounting Pronouncements:

As an emerging growth company (“EGC”) as defined in Rule 12b-2 of the Exchange Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to nonpublic companies.  As of June 30, 2018, there is no significant difference in the comparability of the consolidated financial statements as a result of this extended transition period.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, that amended guidance on revenue recognition from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. The core principle of the amended guidance reportedly is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amended guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for public business entities.  As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.   The Bank’s primary source of revenue is interest income on financial assets and income from mortgage banking activities, which are explicitly excluded from the scope of the new guidance.  As a result, the adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.  However, the Company will continue to monitor developments and additional guidance up to the effective date of these amendments.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities.” The FASB reported that the main objective in developing this new ASU was to enhance the reporting model for financial instruments, to provide users of financial statements with more useful information. The update requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It addresses the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The amendment eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Financial assets and financial liabilities are to be presented separately by measurement category and form of financial asset and the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated with the entity’s other deferred tax assets. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This ASU requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

The Company has begun its evaluation of the amended guidance including the potential impact on its consolidated financial statements. To date, the Company has identified its leased office spaces as within the scope of the guidance. The Company currently leases six branches and the new guidance will result in the establishment of a right to use asset and corresponding lease obligations. The Company continues to evaluate the impact of the guidance, including determining whether other contracts exist that are deemed to be in scope and subsequent related accounting standard updates. As such, no conclusions have yet been reached regarding the potential impact of adoption on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718).” The reported objective of this ASU is to simplify accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the update, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current accounting) or account for forfeitures when they occur. Within the statement of cash flows, excess tax benefits should be classified along with other income tax cash flows as an operating activity, and cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The Company expects to apply the amendments in this update by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted, or prospectively, as applicable.  The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU reportedly significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard is to replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, is to apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. The CECL model does not apply to available-for-sale (“AFS”) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also reportedly simplifies the accounting model for purchased credit-impaired debt, securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, we will adopt the amendments in this update beginning after December 15, 2020, including interim periods within those fiscal years. Entities have to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach).

Although early adoption is permitted, the Company does not expect to elect that option. The Company has begun its evaluation of the amended guidance including the potential impact on its consolidated financial statements. As a result of the required change in approach toward determining estimated credit losses from the current “incurred loss” model to one based on estimated cash flows over a loan’s contractual life, adjusted for prepayments (a “life of loan” model), the Company expects that the new guidance will result in an increase in the allowance for loan losses, particularly for longer duration loan portfolios. The Company also expects that the new guidance may result in an allowance for debt securities. In both cases, the extent of the change is indeterminable at this time as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.”  This ASU reportedly is intended to reduce diversity in how certain cash receipts and cash payments are presented and classified in the statements of cash flows.  The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. A retrospective transition method should be applied to each period presented, unless it is impracticable to apply the amendments retrospectively for some of the issues, then the amendments for those issues would be applied prospectively as of the earliest date practicable.  The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07 “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”  The ASU requires that an employer report the service cost component with other compensation cost arising from services rendered by the pertinent employees during the period.  The amendment also requires the components of net benefit cost to be presented separately in the income statement from the service cost component and not within income from operations.  ASU 2017-07 is effective for interim and annual reporting for public business entities beginning after December 15, 2017. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In March 2017, the FASB issued ASU 2017-08 “Receivables – Non-Refundable Fees and Other Costs (Subtopic 310-20):  Premium Amortization on Purchased Callable Debt Securities.”  The ASU requires premiums on callable debt securities to be amortized to the earliest call date.  The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity.  ASU 2017-08 is effective for interim and annual reporting periods beginning after December 15, 2018 for public business entities.  Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years.  As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020.  ASU 2017-08 will not have a material impact on the Company’s consolidated financial position, results of operations or disclosures.

In February 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This amendment allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.  This amendment is effective for years beginning after December 15, 2018.  Early adoption is permitted.  The Company has not elected to adopt this standard as of the date of these consolidated financial statements.

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Restrictions on Cash and Due From Banks

6 Months Ended

Jun. 30, 2018

Cash And Cash Equivalents [Abstract]

Restrictions on Cash and Due From Banks

Note 2. Restrictions on Cash and Due From Banks

The Bank is required to maintain reserve balances in cash or on deposit with the Federal Reserve Bank, based on a percentage of deposits. The Bank had $6,819 in cash to cover its minimum reserve requirement of $6,466 at June 30, 2018, and $24,334  in cash to cover its minimum reserve requirements of $23,870 at December 31, 2017, respectively.

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Available-for-Sale Securities

6 Months Ended

Jun. 30, 2018

Investments Debt And Equity Securities [Abstract]

Available-for-Sale Securities

Note 3. Available-for-Sale Securities

The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30, 2018
	(Unaudited)
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
U.S. Government and Federal Agencies	$	24,913	$	—	$	(517	)	$	24,396
Mortgage-Backed Securities:
FHLMC Certificates		—		—		—			—
FNMA Certificates		941		—		(36	)		905
GNMA Certificates		2,801		42		—			2,843
	$	28,655	$	42	$	(553	)	$	28,144

	December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
U.S. Government and Federal Agencies	$	24,911	$	—	$	(359	)	$	24,552
Mortgage-Backed Securities:
FHLMC Certificates		—		—		—			—
FNMA Certificates		1,118		—		(15	)		1,103
GNMA Certificates		3,205		38		(1	)		3,242
	$	29,234	$	38	$	(375	)	$	28,897

Note 3. Available-for-Sale Securities (Continued)

There were no investments classified as held to maturity as of June 30, 2018 and December 31, 2017. There were no sales in the three and six months ended June 30, 2018 and 2017.   

The following tables present the Company's securities' gross unrealized losses and fair values, aggregated by the length of time the individual securities have been in a continuous unrealized loss position, at June 30, 2018 and at December 31, 2017:

	June 30, 2018
	(Unaudited)
	Securities With Gross Unrealized Losses
	Less Than 12 Months					12 Months or More					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Government and Federal Agencies	$	—	$	—		$	24,396	$	(517	)	$	24,396	$	(517	)
Mortgage-Backed
FHLMC Certificates		—		—			—		—			—		—
FNMA Certificates		903		(36	)		—		—			903		(36	)
GNMA Certificates		—		—			—		—			—		—
	$	903	$	(36	)	$	24,396	$	(517	)	$	25,299	$	(553	)

	December 31, 2017
	Securities With Gross Unrealized Losses
	Less Than 12 Months					12 Months or More					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Government and Federal Agencies	$	—	$	—		$	24,552	$	(359	)	$	24,552	$	(359	)
Mortgage-Backed
FHLMC Certificates		—		—			—		—			—		—
FNMA Certificates		1,094		(15	)		—		—			1,094		(15	)
GNMA Certificates		1,205		(1	)		—		—			1,205		(1	)
	$	2,299	$	(16	)	$	24,552	$	(359	)	$	26,851	$	(375	)

The Company’s investment portfolio had 33 investment securities at June 30, 2018 and 33 investment securities at December 31, 2017. At June 30, 2018 and December 31, 2017, the Company had 13 and 14 securities, with a gross unrealized loss position.  Management reviewed the financial condition of the entities underlying the securities at both June 30, 2018 and December 31, 2017 and determined that they are not other than temporary because the unrealized losses in those securities relate to market interest rate changes. The Company has the ability to hold them and does not have the intent to sell these securities, and it is not more likely than not that the Company will be required to sell these securities, before recovery of the cost basis. In addition, management also considers the issuers of the securities to be financially sound and believes the Company will receive all contractual principal and interest related to these investments.

Note 3. Available-for-Sale Securities (Continued)

The following is a summary of maturities of securities at June 30, 2018 and December 31, 2017. Amounts are shown by contractual maturity. Because borrowers for mortgage-backed securities have the right to prepay obligations with or without prepayment penalties, these securities are not included within the maturity summary.

	June 30, 2018
	Available-for-Sale
	(Unaudited)
	Amortized		Fair
	Cost		Value
U.S. Government and Federal Agency Securities:
Amounts maturing:
After three months through one year	$	3,990	$	3,963
After one year through five years		20,923		20,433
		24,913		24,396
Mortgage-Backed Securities		3,742		3,748
Total	$	28,655	$	28,144
	December 31, 2017
	Available-for-Sale
	Amortized		Fair
	Cost		Value
U.S. Government and Federal Agency Securities:
Amounts maturing:
After three months through one year	$	1,990	$	1,977
After one year through five years		22,921		22,575
		24,911		24,552
Mortgage-Backed Securities		4,323		4,345
Total	$	29,234	$	28,897

There were no securities pledged at June 30, 2018 and December 31, 2017.

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Loans Receivable and Allowance for Loan Losses

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Loans Receivable and Allowance for Loan Losses

Note 4. Loans Receivable and Allowance for Loan Losses

Loans at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Mortgage loans:
1-4 family residences
Investor-Owned	$	296,490		$	287,158
Owner-Occupied		92,208			100,854
Multifamily residences		218,210			188,550
Nonresidential properties		168,788			151,193
Construction and land		72,574			67,240
Nonmortgage loans:
Business loans		11,698			12,873
Consumer loans		1,027			886
		860,995			808,754
Net deferred loan origination costs		1,182			1,020
Allowance for losses on loans		(11,751	)		(11,071	)
Loans, net	$	850,426		$	798,703

The Company’s lending activities are conducted principally in New York City. The Company primarily grants loans secured by real estate to individuals and businesses.  While collateral provides assurance as a secondary source of repayment, the Bank ordinarily requires the primary source of repayment to be based on the borrowers’ ability to generate continuing cash flows. The Company has established credit policies applicable to each type of lending activity, in which it engages. The Company evaluates the creditworthiness of each customer and, in most cases, extends credit up to 75% of the market value of the collateral at the date of the credit extension, depending on the borrowers' creditworthiness and the type of collateral. The market value of collateral is monitored on an ongoing basis and additional collateral is obtained when warranted. Real estate is the primary form of collateral. Other important forms of collateral are time deposits and marketable securities.

For disclosures related to the allowance for loan losses and credit quality, the Company does not have any disaggregated classes of loans below the segment level.

Credit-Quality Indicators: Internally assigned risk ratings are used as credit-quality indicators, which are reviewed by management on a quarterly basis.

The objectives of the Company’s risk-rating system are to provide the Board of Directors and senior management with an objective assessment of the overall quality of the loan portfolio, to promptly and accurately identify loans with well-defined credit weaknesses so that timely action can be taken to minimize credit loss, to identify relevant trends affecting the collectability of the loan portfolio, to isolate potential problem areas and to provide essential information for determining the adequacy of the allowance for loan losses.

Below are the definitions of the internally assigned risk ratings:

• Strong Pass – Loans to new or existing borrowers collateralized at least 90 percent by an unimpaired deposit account at the Company.  

• Good Pass – A loan to a new or existing borrower in a well-established enterprise in excellent financial condition with strong liquidity and a history of consistently high level of earnings, cash flow and debt service capacity.  

• Satisfactory Pass – Loan to a new or existing borrower of average strength with acceptable financial condition, satisfactory record of earnings and sufficient historical and projected cash flow to service the debt.  

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

• Performance Pass –Existing loans that evidence strong payment history but document less than average strength, financial condition, record of earnings, or projected cash flows with which to service debt.  

• Special Mention – Loans in this category are currently protected but show one or more potential weakness and risks which may inadequately protect collectability or borrower’s ability to meet repayment terms at some future date if the weakness is not checked or corrected.  

• Substandard – Loans that are inadequately protected by the repayment capacity of the borrower or the current sound net worth of the collateral pledged, if any.  Loans in this category have well defined weaknesses and risks that jeopardize the repayment.  They are characterized by the distinct possibility that some loss will be sustained if the deficiencies are not corrected.  

• Doubtful – Loans that have all the weaknesses of loans classified as “Substandard” with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of current existing facts, conditions, and values, highly questionable and improbable.  

Loans within the top four categories above are considered pass rated, as commonly defined.  Risk ratings are assigned as necessary to differentiate risk within the portfolio. Risk ratings are reviewed on an ongoing basis and revised to reflect changes in the borrowers’ financial condition and outlook, debt service coverage capability, repayment performance, collateral value and coverage as well as other considerations.

The following tables present credit risk ratings by loan segment as of June 30, 2018 and December 31, 2017:

	June 30, 2018
	(Unaudited)
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
Risk Rating:
Pass	$	372,656	$	217,120	$	167,290	$	65,862	$	11,010	$	1,027	$	834,965
Special mention		6,107		1,090		464		—		688		—		8,349
Substandard		9,935		—		1,034		6,712		—		—		17,681
Doubtful		—		—		—		—		—		—		—
Total	$	388,698	$	218,210	$	168,788	$	72,574	$	11,698	$	1,027	$	860,995

	December 31, 2017
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
Risk Rating:
Pass	$	370,629	$	188,030	$	148,253	$	59,914	$	12,726	$	886	$	780,438
Special mention		4,667		—		—		650		—		—		5,317
Substandard		12,716		520		2,940		6,676		147		—		22,999
Doubtful		—		—		—		—		—		—		—
Total	$	388,012	$	188,550	$	151,193	$	67,240	$	12,873	$	886	$	808,754

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

An aging analysis of loans, as of June 30, 2018 and December 31, 2017, is as follows:

	June 30, 2018
	(Unaudited)
			30-59		60-89		Over						Over
			Days		Days		90 Days				Nonaccrual		90 Days
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
Mortgages:
1-4 Family
Investor-Owned	$	296,138	$	—	$	352	$	—	$	296,490	$	1,307	$	—
Owner-Occupied		91,257		—		—		951		92,208		3,488		—
Multifamily		217,906		—		304		—		218,210		—		—
Nonresidential properties		167,902		—		403		483		168,788		748		—
Construction and land		72,574		—		—		—		72,574		1,111		—
Nonmortgage Loans:
Business		11,401		297		—		—		11,698		—		—
Consumer		1,027		—		—		—		1,027		—		—
Total	$	858,205	$	297	$	1,059	$	1,434	$	860,995	$	6,654	$	—

	December 31, 2017
			30-59		60-89		Over						Over
			Days		Days		90 Days				Nonaccrual		90 Days
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
Mortgages:
1-4 Family
Investor-Owned	$	285,485	$	1,201	$	—	$	472	$	287,158	$	2,178	$	7
Owner-Occupied		96,878		585		—		3,391		100,854		5,317		—
Multifamily		188,504		46		—		—		188,550		521		—
Nonresidential properties		149,300		11		—		1,882		151,193		2,170		—
Construction and land		67,240		—		—		—		67,240		1,075		—
Nonmortgage Loans:
Business		12,583		239		—		51		12,873		147		—
Consumer		886		—		—		—		886		—		—
Total	$	800,876	$	2,082	$	—	$	5,796	$	808,754	$	11,408	$	7

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

The following schedules detail the composition of the allowance for loan losses and the related recorded investment in loans as of June 30, 2018, 2017 and December 31, 2017:

	For the Six Months Ended June 30, 2018
	(Unaudited)
	Mortgage Loans												Nonmortgage Loans							Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer		Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,716		$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6	$	—	$	11,071
Provision charged to expense		(30	)		(312	)		531		250		86		(94	)		—		—		431
Losses charged-off		—			—			—		—		—		(18	)		—		—		(18	)
Recoveries		1			175			—		5		—		83			3		—		267
Balance, end of period	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9	$	—	$	11,751
Ending balance: individually    evaluated for impairment	$	310		$	297		$	—	$	36	$	—	$	—		$	—	$	—	$	643
Ending balance: collectively    evaluated for impairment		3,377			968			3,640		1,643		1,291		180			9		—		11,108
Unallocated		—			—			—		—		—		—			—		—		—
Total	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9	$	—	$	11,751
Loans:
Ending balance: individually    evaluated for impairment	$	7,014		$	7,399		$	—	$	2,207	$	1,111	$	421		$	—	$	—	$	18,152
Ending balance: collectively    evaluated for impairment		289,476			84,809			218,210		166,581		71,463		11,277			1,027		—		842,843
Total	$	296,490		$	92,208		$	218,210	$	168,788	$	72,574	$	11,698		$	1,027	$	—	$	860,995

	For the Three Months Ended June 30, 2018
	(Unaudited)
	Mortgage Loans												Nonmortgage Loans								Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,689		$	1,370		$	3,385	$	1,517	$	1,212	$	228		$	8		$	—	$	11,409
Provision charged to expense		(3	)		(107	)		255		160		79		(46	)		(1	)		—		337
Losses charged-off		—			—			—		—		—		(13	)		—			—		(13	)
Recoveries		1			2			—		2		—		11			2			—		18
Balance, end of period	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9		$	—	$	11,751

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

	For the Six Months Ended June 30, 2017
	(Unaudited)
	Mortgage Loans											Nonmortgage Loans								Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,147	$	1,804		$	2,705	$	1,320	$	615	$	597		$	17		$	—	$	10,205
Provision charged to expense		379		(321	)		282		414		138		(619	)		(14	)		—		259
Losses charged-off		—		—			—		—		—		(34	)		—			—		(34	)
Recoveries		10		—			1		5		—		204			5			—		225
Balance, end of period	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—	$	10,655
Ending balance: individually    evaluated for impairment	$	524	$	401		$	—	$	258	$	—	$	—		$	—		$	—	$	1,183
Ending balance: collectively    evaluated for impairment		3,012		1,082			2,988		1,481		753		148			8			—		9,472
Unallocated		—		—			—		—		—		—			—			—		—
Total	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—	$	10,655
Loans:
Ending balance: individually    evaluated for impairment	$	8,869	$	8,712		$	—	$	5,661	$	1,008	$	529		$	—		$	—	$	24,779
Ending balance: collectively    evaluated for impairment		248,120		91,189			172,167		150,009		41,108		14,125			850			—		717,568
Total	$	256,989	$	99,901		$	172,167	$	155,670	$	42,116	$	14,654		$	850		$	—	$	742,347

	For the Three Months Ended June 30, 2017
	(Unaudited)
	Mortgage Loans											Nonmortgage Loans									Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated			For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,181	$	1,729		$	2,800	$	1,568	$	672	$	115		$	9		$	296		$	10,370
Provision charged to expense		350		(246	)		188		169		81		(33	)		(6	)		(296	)		207
Losses charged-off		—		—			—		—		—		(24	)		—			—			(24	)
Recoveries		5		—			—		2		—		90			5			—			102
Balance, end of period	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—		$	10,655

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

	For the Year Ended December 31, 2017
	Mortgage Loans											Nonmortgage Loans								Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of year	$	3,147	$	1,804		$	2,705	$	1,320	$	615	$	597		$	17		$	—	$	10,205
Provision charged to expense		544		(578	)		402		95		588		676			(11	)		—		1,716
Losses charged-off		—		—			—		—		—		(1,423	)		(6	)		—		(1,429	)
Recoveries		25		176			2		9		2		359			6			—		579
Balance, end of year	$	3,716	$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6		$	—	$	11,071
Ending balance: individually    evaluated for impairment	$	506	$	375		$	—	$	39	$	—	$	2		$	—		$	—	$	922
Ending balance: collectively    evaluated for impairment		3,210		1,027			3,109		1,385		1,205		207			6			—		10,149
Unallocated		—		—			—		—		—		—			—			—		—
Total	$	3,716	$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6		$	—	$	11,071
Loans:
Ending balance: individually    evaluated for impairment	$	8,738	$	10,074		$	520	$	4,128	$	1,075	$	625		$	—		$	—	$	25,160
Ending balance: collectively    evaluated for impairment		278,420		90,780			188,030		147,065		66,165		12,248			886			—		783,594
Total	$	287,158	$	100,854		$	188,550	$	151,193	$	67,240	$	12,873		$	886		$	—	$	808,754

Loans are considered impaired when current information and events indicate all amounts due may not be collectable according to the contractual terms of the related loan agreements. Impaired loans, including TDR’s, are identified by applying normal loan review procedures in accordance with the Allowance for Loan Loss methodology. Management periodically assesses loans to determine whether impairment exists. Any loan that is, or will potentially be, no longer performing in accordance with the terms of the original loan contract is evaluated to determine impairment.

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

The following information relates to impaired loans as of and for the six months ended June 30, 2018 and 2017 and for the year ended December 31, 2017:

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
For the Six Months Ended June 30, 2018	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
(Unaudited)
Mortgages:
1-4 Family	$	15,597	$	7,787	$	6,626	$	14,413	$	607	$	17,101	$	371
Multifamily		—		—		—		—		—		104		—
Nonresidential properties		2,421		1,719		488		2,207		36		3,753		71
Construction and land		1,321		1,111		—		1,111		—		1,073		—
Nonmortgage Loans:
Business		464		421		—		421		—		515		12
Consumer		—		—		—		—		—		—		—
Total	$	19,803	$	11,038	$	7,114	$	18,152	$	643	$	22,546	$	454
	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
For the Six Months Ended June 30, 2017	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
(Unaudited)
Mortgages:
1-4 Family	$	18,941	$	8,346	$	9,235	$	17,581	$	925	$	18,201	$	422
Multifamily		—		—		—		—		—		—		—
Nonresidential properties		6,317		3,134		2,527		5,661		258		6,319		141
Construction and land		1,124		1,008		—		1,008		—		1,028		—
Nonmortgage Loans:
Business		571		529		—		529		—		612		8
Consumer		—		—		—		—		—		—		—
Total	$	26,953	$	13,017	$	11,762	$	24,779	$	1,183	$	26,160	$	571

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
December 31, 2017	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
Mortgages:
1-4 Family	$	20,036	$	10,651	$	8,161	$	18,812	$	506	$	18,512	$	890
Multifamily		533		520		—		520		375		166		—
Nonresidential properties		4,729		3,633		495		4,128		—		5,231		166
Construction and land		1,233		1,075		—		1,075		39		1,042		—
Nonmortgage Loans:
Business		667		529		96		625		2		594		24
Consumer		—		—		—		—		—		—		—
Total	$	27,198	$	16,408	$	8,752	$	25,160	$	922	$	25,545	$	1,080

Note 4. Loans Receivable and Allowance for Loan Losses (Continued)

The loan portfolio also includes certain loans that have been modified in a TDR. Under applicable standards, TDRs occur when a creditor, for economic or legal reasons related to a debtor’s financial condition, grants a concession to the debtor that it would not otherwise consider, unless it results in a delay in payment that is insignificant. These concessions could include a reduction of interest rate on the loan, payment and maturity extensions, forbearance, or other actions intended to maximize collections. When a loan is modified in a TDR, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs if repayment under the modified terms becomes doubtful. If management determines that the value of the modified loan in a TDR is less than the recorded investment in the loan, impairment is recognized through a specific allowance estimate or charge-off to the allowance for loan losses.

As of and for the six months ended June 30, 2018, there were no loans restructured as a TDR. As of and for the year ended December 31, 2017, there was one loan restructured as a TDR.

	Loans Restructured During						All TDRs with a payment default within 12 months following the
	Six Months Ended June 30, 2018 (Unaudited)						modification (Unaudited)
			Pre-		Post-				Balance
			Modification		Modification				of Loans
	Number		Recorded		Recorded		Number		at the Time
	of Loans		Balance		Balance		of Loans		of Default
Mortgages:
1-4 Family		—	$	—	$	—		1	$	175
Total		—	$	—	$	—		1	$	175
Combination of rate, maturity, other		—	$	—	$	—		1	$	175
Total		—	$	—	$	—		1	$	175

	Loans Restructured During						All TDRs with a payment default within 12 months following the
	Year Ended December 31, 2017						modification
			Pre-		Post-				Balance
			Modification		Modification				of Loans
	Number		Recorded		Recorded		Number		at the Time
	of Loans		Balance		Balance		of Loans		of Default
Mortgages:
1-4 Family		1	$	176	$	176		—	$	—
Total		1	$	176	$	176		—	$	—
Combination of rate, maturity, other		1	$	176	$	176		—	$	—
Total		1	$	176	$	176		—	$	—

At June 30, 2018, there were 43 troubled debt restructured loans, included in impaired loans, of $15,210.  At December 31, 2017, there were 49 troubled debt restructured loans, included in impaired loans, of $18,371. There were no commitments to lend additional funds to borrowers whose loans have been modified in a troubled debt restructuring. The financial impact from the concessions made represents specific impairment reserves on these loans, which aggregated $643 and $921 at June 30, 2018 and December 31, 2017, respectively.

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Premises and Equipment

6 Months Ended

Jun. 30, 2018

Property Plant And Equipment [Abstract]

Premises and Equipment

Note 5. Premises and Equipment

A summary of premises and equipment at June 30, 2018 and December 31, 2017 is as follows:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Land	$	3,979		$	3,979
Buildings and improvements		15,972			15,972
Leasehold improvements		21,790			20,973
Furniture, fixtures and equipment		6,106			4,875
		47,847			45,799
Less accumulated depreciation and amortization		(19,481	)		(18,627	)
	$	28,366		$	27,172

Depreciation and amortization expense amounted to $437 and $399 for the three months ended June 30, 2018 and 2017, respectively, and $854 and $803 for the six months ended June 30, 2018 and 2017, respectively and are included in occupancy expense in the accompanying consolidated statements of income.  Our leasehold improvements increased by $817, to $21,790 at June 30, 2018 evidencing the investments beginning to be made in branch and other delivery vehicles. Equipment also increased by $1,231, to $6,106 at June 30, 2018, indicative of our purchases of new ATMs that are being installed in our branches.

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Deposits

6 Months Ended

Jun. 30, 2018

Banking And Thrift [Abstract]

Deposits

Note 6. Deposits

Deposits at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30,		December 31,
	2018		2017
	(Unaudited)
Demand	$	108,550	$	103,001
Interest-bearing deposits:
NOW/IOLA accounts		26,711		27,758
Money market accounts		58,612		46,497
Savings accounts		124,578		126,668
Total savings, NOW and money market		209,901		200,923
Certificates of deposit of $250K or more		82,928		80,300
All other certificates of deposit		351,876		329,761
Total certificates of deposit		434,804		410,061
Total interest-bearing deposits		644,705		610,984
Total deposits	$	753,255	$	713,985

At June 30, 2018, scheduled maturities of certificates of deposit were as follows:

June 30,
2019	$	186,319
2020		88,075
2021		88,164
2022		60,493
2023		11,753
	$	434,804

Note 6. Deposits (Continued)

Overdrawn deposit accounts that have been reclassified to loans amounted to $198 and $174 as of June 30, 2018 and December 31, 2017, respectively.

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Borrowings

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Borrowings

Note 7. Borrowings

FHLB Advances: The Bank is a member of the Federal Home Loan Bank of New York. At June 30, 2018, the Bank had the ability to borrow from the FHLB based on a certain percentage of the value of the Bank's qualified collateral, as defined in the FHLB Statement of Credit Policy, at the time of the borrowing. In accordance with an agreement with the FHLB, the qualified collateral must be free and clear of liens, pledges and encumbrances.

The Bank had $37,775 and $16,400 of outstanding advances from the FHLB on term basis and an overnight line of credit basis at June 30, 2018 and December 31, 2017, respectively.  The Bank also had a guarantee from the FHLB through a standby letter of credit of $4,304 and $6,614 at June 30, 2018 and December 31, 2017, respectively.  Additionally, the Bank had an unsecured fed funds line in the amount of $25,000 with a correspondent bank at June 30, 2018 and December 31, 2017, of which $0 and $20,000 were outstanding as of June 30, 2018 and December 31, 2017, respectively.

Borrowed funds at June 30, 2018 and December 31, 2017 consist of the following and are summarized by maturity and call date below:

	June 30,							December 31,
	2018 (Unaudited)							2017
	Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate			Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate
Correspondent Bank Overnight line of credit    advance	$	—	$	—		—	%	$	20,000	$	20,000		1.64	%
FHLB Term advances ending June 30:
2020		1,400		1,400		2.11			1,400		1,400		2.11
2021		3,000		3,000		1.84			3,000		3,000		1.84
2022		5,000		5,000		1.97			5,000		5,000		1.97
2023		28,375		28,375		2.82			7,000		7,000		2.12
	$	37,775	$	37,775		2.60	%	$	36,400	$	36,400		1.81	%

Interest expense on advances totaled $204 and $32 for the three months ended June 30, 2018 and 2017, and $302 and $61 for the six months ended June 30, 2018 and 2017, respectively.   

As of June 30, 2018 and December 31, 2017, the Bank has eligible collateral of approximately $71,439 and $66,254 in mortgage loans available to secure advances from the FHLB.

Securities Sold under Agreement to Repurchase: At June 30, 2018 and December 31, 2017, the Bank had the ability to borrow up to $25,000 under repurchase agreements with three brokers. The Bank had no securities sold under repurchase agreements with brokers as of June 30, 2018 and December 31, 2017. Interest expense on securities sold under repurchase agreements totaled $0 and $0 for the three and six months ended June 30, 2018 and 2017, respectively.    

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Income Taxes

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Note 8. Income Taxes

The provision (benefit) for income taxes for the three and six months ended June 30, 2018 and 2017 consists of the following:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Federal:
Current	$	110		$	624		$	195		$	881
Deferred		60			23			190			132
		170			647			385			1,013
State and local:
Current		48			56			121			102
Deferred		(252	)		(181	)		(356	)		(380	)
		(204	)		(125	)		(235	)		(278	)
Changes in valuation allowance		200			119			284			251
Provision for income taxes	$	166		$	641		$	434		$	986

Total income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 21% and 34% for the three and six months ended June 30, 2018 and 2017, respectively, to income before income taxes as a result of the following:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Income tax, at federal rate	$	182		$	600		$	436		$	909
State and local tax, net of federal taxes		(160	)		(91	)		(185	)		(174	)
Valuation allowance, net of the federal benefit		200			132			284			251
Other		(56	)		—			(101	)		—
	$	166		$	641		$	434		$	986

On December 22, 2017, the U.S. Government signed into law the “Tax Cuts and Jobs Act” (the “Tax Act”) which, starting in 2018, reduced the Company’s corporate income tax rate from 34% to 21%, but eliminates or increases certain permanent differences.

On December 22, 2017, the U.S. Securities and Exchange Commission (“SEC”) released Staff Accounting Bulletin No. 118 (“SAB 118”) to address any uncertainty or diversity of views in practice in accounting for the income tax effects of the Tax Act in situations where a registrant does not have the necessary information available, prepared, or analyzed in reasonable detail to complete this accounting in the reporting period that includes the enactment date.  SAB 118 allows for a measurement period, not to extend beyond one year from the Tax Act’s enactment date, to complete the necessary accounting.  

Our annualized estimated effective tax rate (AETR) for the three and six months period ended June 30, 2018 reflects our assumption that pre-tax income for the period is proportional to annual pre-tax income.  Our AETR may change in future periods as we revise our estimate of annual pre-tax income.

Note 8. Income Taxes (Continued)

Management maintains a valuation allowance against its net New York State and New York City deferred tax assets when it is more likely than not that these deferred tax assets will not be realized. The valuation allowance increased by $200 and $284 for the three and six months ended June 30, 2018, respectively.  Management has determined that it is not required to establish a valuation allowance against any other deferred tax assets since it is more likely than not that the deferred tax assets will be fully utilized in future periods. In assessing the need for a valuation allowance, management considers the scheduled reversal of the deferred tax liabilities, the level of historical taxable income, and the projected future taxable income over the periods that the temporary differences comprising the deferred tax assets will be deductible.

At June 30, 2018 and December 31, 2017, there are no unrecognized tax benefits recorded.  It is not expected that the total amount of unrecognized tax benefits will significantly increase in the next twelve months. Interest and penalties are recognized on unrecognized tax benefits as a component of income tax expense.

The Company is subject to U.S. federal income tax, New York State income tax, New Jersey income tax, and New York City income tax.  The Company is no longer subject to examination by taxing authorities for years before 2014.

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30, 2018 and December 31, 2017 are presented below:

	AtJune 30,		At December 31,
	2018		2017
	(Unaudited)
Deferred tax assets:
Allowance for losses on loans	$	3,639	$	3,444
Pension obligations		2,424		2,402
Interest on nonaccrual loans		46		415
Unrealized loss on available-for-sale securities		64		72
Amortization of intangible assets		111		120
Deferred rent payable		170		194
Net operating losses		2,809		2,444
Charitable contribution carryforward		1,772		1,840
Other		253		162
Total gross deferred tax assets		11,288		11,093
Deferred tax liabilities:
Cumulative contribution in excess of net periodic    benefit costs, net		3,113		3,134
Depreciation and amortization of premises and equipment		601		601
Deferred loan fees		366		317
Other		5		18
Total gross deferred tax liabilities		4,085		4,070
Valuation allowance		3,398		3,114
Net deferred tax assets	$	3,805	$	3,909

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Compensation and Benefit Plans

6 Months Ended

Jun. 30, 2018

Compensation And Retirement Disclosure [Abstract]

Compensation and Benefit Plans

Note 9. Compensation and Benefit Plans

Defined Benefit Plan:

Effective January 1, 2007, the noncontributory defined benefit pension plan (the “Old Pension Plan”) of the Company was frozen and replaced with a qualified defined contribution plan (the “401(k) Plan”) as noted in more detail below. The Old Pension Plan covered substantially all employees. Employees were eligible to participate after one year of service. Normal retirement age was 65, with an early retirement provided for at age 55. The Old Pension Plan was effectively frozen on May 31, 2007 (the curtailment date) and this resulted in an actuarial reassessment of the Old Pension Plan’s future estimated obligations. All participants that are presently vested with the Old Pension Plan will remain in the Old Pension Plan and will receive the full accrued benefit, as defined, upon retirement, in accordance with the plan document.

The following table sets forth the Old Pension Plan’s funded status and amounts recognized in the consolidated statements of financial condition as of June 30, 2018 and December 31, 2017 using a measurement date as of June 30, 2018 and December 31, 2017, respectively:

	June 30, 2018			December 31, 2017
	(Unaudited)
Projected benefit obligation	$	(15,802	)	$	(15,883	)
Fair value of plan assets		14,564			14,732
Funded status	$	(1,238	)	$	(1,151	)
Accumulated benefit obligation	$	(15,802	)	$	(15,883	)
	June 30, 2018			December 31, 2017
	(Unaudited)
Changes in benefit obligation:
Beginning of period	$	15,883		$	14,142
Service cost		20			39
Interest cost		271			581
2017 interest rate change		—			1,338
2017 mortality change		—			1,906
(Gain)/ Loss		3			(1,345	)
Administrative cost		(20	)		(39	)
Benefits paid		(355	)		(739	)
End of period	$	15,802		$	15,883

	June 30, 2018				December 31, 2017
	(Unaudited)
Changes in plan assets:
Fair value of plan assets, beginning of period	$	14,732		$		15,038
Actual return on plan assets		207				472
Employer contributions		—				—
Plan participant contributions		—				—
Benefits paid		(355	)			(739	)
Administrative expenses paid		(20	)			(39	)
Fair value of plan assets, end of period	$	14,564		$		14,732

Note 9. Compensation and Benefit Plans (Continued)

Pretax amounts recognized in accumulated other comprehensive loss, which will be amortized into net periodic benefit cost over the coming years, consisted of the following components at June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Net loss	$	(11,288	)	$	(11,224	)

The components of net periodic benefit cost are as follows for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
	2018			2017
	(Unaudited)
Service cost	$	20		$	20
Interest cost		271			291
Expected return on plan assets		(430	)		(420	)
Amortization of prior service cost		13			13
Amortization of (gain)/loss		149			117
Net periodic benefit cost	$	23		$	21

Weighted-average assumptions used to determine the net benefit obligations consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Discount rate		3.50	%		3.50	%
Rate of compensation increase		0.00	%		0.00	%

Weighted-average assumptions used to determine the net benefit cost consisted of the following for the six months ended June 30, 2018 and 2017:

	June 30,			June 30,
	2018			2017
	(Unaudited)
Discount rate		3.50	%		4.25	%
Rate of compensation increase		0.00	%		0.00	%
Expected long-term rate of return on assets		6.00	%		6.00	%

The expected rate of return on plan assets is estimated based on the plan’s historical performance of return on assets.

The investment policy for plan assets is to manage the portfolio to preserve principal and liquidity while maximizing the return on the plan’s investment portfolio through the full investment of available funds. Plan assets are currently maintained in a guaranteed deposit account with Prudential Retirement Insurance and Annuity Company, earning interest at rates that are determined at the beginning of each year.

Note 9. Compensation and Benefit Plans (Continued)

Pension assets consist solely of funds on deposit in a guaranteed deposit account. The fair value of the pension plan assets at June 30, 2018 and December 31, 2017 was $14,565 and $14,696, respectively.

The guaranteed deposit account is valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the creditworthiness of the issuer. Such fair value measurement is considered a Level 3 measurement.

Employer contributions and benefit payments for the six months ended June 30, 2018 and 2017 are as follows:

	June 30,		June 30,
	2018		2017
	(Unaudited)
Employer contributions	$	—	$	—
Benefits paid	$	355	$	184

Employee benefit payments expected to be paid in the future are as follows:

As of  June 30, 2018
2018	$	380
2019		736
2020		714
2021		695
2022		700
Thereafter		3,307
	$	6,532

401(k) Plan:

On January 1, 2007, a qualified defined contribution retirement plan under Section 401(k) of the Internal Revenue Code was adopted. The 401(k) Plan also qualifies under the Internal Revenue Service safe harbor provisions, as defined. Employees are eligible to participate in the 401(k) Plan after completing one year of service. The 401(k) Plan provides for elective employee/participant deferrals of income. Discretionary matching, profit-sharing, and safe harbor contributions, not to exceed 4% of employee compensation and profit-sharing contributions may be provided.  Contributions for the three and six months June 30, 2018 and 2017, if any, were not material to the consolidated financial statements. 

Employee Stock Ownership Plan:

In connection with the reorganization, the Company established an Employee Stock Ownership Plan (ESOP) for the exclusive benefit of eligible employees.  The ESOP borrowed $7,238 from the Company sufficient to purchase 723,751 shares (approximately 3.92% of the common stock sold in the stock offering).  The loan is secured by the shares purchased and will be repaid by the ESOP with funds from contributions made by the Bank and dividends received by the ESOP. Contributions will be applied to repay interest on the loan first, and then the remainder will be applied to principal.  The loan is expected to be repaid over a period of 15 years.  Shares purchased with the loan proceeds are held by the trustee in a suspense account for allocation among participants as the loan is repaid.  

Contributions to the ESOP and shares released from the suspense account are allocated among participants in proportion to their compensation, relative to total compensation of all active participants, subject to applicable regulations.       

Note 9. Compensation and Benefit Plans (Continued)

Contributions to the ESOP are to be sufficient to pay principal and interest currently due under the loan agreement.  As shares are committed to be released from collateral, compensation expense equal to the average market price of the shares for the respective period are recognized, and the shares become outstanding for earnings per share computations.  

A summary of the ESOP shares is as follows:

	June 30, 2018		December 31, 2017
	(Unaudited)
Shares committed-to-be released		24,126		48,250
Shares to be allocated to participants		48,250		—
Unallocated shares		651,375		675,501
Total		723,751		723,751
Fair value of unearned shares	$	10,233	$	10,254

At June 30, 2018 and December 31, 2017, we had $6,712 outstanding of funds borrowed for the ESOP.  We recognized $201 and $378 in compensation expense and $47 and $95 in interest expense, for the three and six months ended June 30, 2018 and none for three and six months ended June 30, 2017.

Supplemental Executive Retirement Plan:  

The Company maintains a non-qualified supplemental executive retirement plan (“SERP”) for the benefit of one key executive.   The SERP expense recognized in the books for the three and six months ended June 30, 2018, were not material to the consolidated financial statements.

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Earnings Per Share

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Earnings Per Share

Note 10. Earnings Per Share

Earnings per share data is not applicable for the period ended June 30, 2017 because the Company has not yet been formed and had no shares outstanding at a Company or Bank level.  

The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share:

	For the Three Months Ended June 30, 2018		For the Six Months Ended June 30, 2018
	(Unaudited)
Net income for the period	$	699	$	1,640
Shares Outstanding for basic EPS:
Weighted average shares outstanding:		18,463,028		18,463,028
Less: Weighted average unallocated Employee Stock Ownership    Plan (ESOP) shares:		663,305		687,607
Basic weighted shares outstanding		17,799,723		17,775,421
Basic earnings per share	$	0.04	$	0.09
Dilutive potential common shares:		—		—
Diluted weighted average shares outstanding		17,799,723		17,775,421
Diluted earnings per share	$	0.04	$	0.09

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Commitments, Contingencies and Credit Risk

6 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Commitments, Contingencies and Credit Risk

Note 11. Commitments, Contingencies and Credit Risk

Financial Instruments With Off-Balance-Sheet Risk: In the normal course of business, financial instruments with off-balance-sheet risk may be used to meet the financing needs of customers. These financial instruments include commitments to extend credit and standby letters of credit. These instruments involve, to varying degrees, elements of credit risk and interest rate risk in excess of the amounts recognized on the consolidated statements of financial condition. The contractual amounts of these instruments reflect the extent of involvement in particular classes of financial instruments.

The contractual amounts of commitments to extend credit represent the amounts of potential accounting loss should the contract be fully drawn upon, the customer default, and the value of any existing collateral become worthless. The same credit policies are used in making commitments and contractual obligations as for on-balance-sheet instruments. Financial instruments whose contractual amounts represent credit risk at June 30, 2018 and December 31, 2017 are as follows:

	June 30,		December 31,
	2018		2017
	(Unaudited)
Commitments to grant mortgage loans	$	54,677	$	54,423
Unfunded commitments under lines of credit		43,247		33,641
Standby letters of credit		4,424		6,734
	$	102,348	$	94,798

Commitments to Grant Mortgage Loans: Commitments to grant mortgage loans are agreements to lend to a customer as long as all terms and conditions are met as established in the contract. Commitments generally have fixed expiration dates or other termination clauses, and may require payment of a fee by the borrower. Since some of the commitments are expected to expire without being drawn upon, the total commitment amounts do not necessarily represent future cash requirements. Each customer's creditworthiness is evaluated on a case-by-case basis. The amount of collateral obtained, if deemed necessary upon extension of credit, is based on management's credit evaluation of the counterparty. Collateral held varies, but may include accounts receivable, inventory, property and equipment, residential real estate and income-producing commercial properties. Material losses are not anticipated as a result of these transactions.

Unfunded Commitments Under Lines of Credit: Unfunded commitments under commercial lines of credit, revolving credit lines and overdraft protection agreements are commitments for possible future extension of credit to existing customers. These lines of credit are uncollateralized and usually do not contain a specified maturity date and, ultimately, may not be drawn upon to the total extent to which the Company is committed.

Standby Letters of Credit: Standby letters of credit are conditional commitments issued to guarantee the performance of a customer to a third party. These guarantees are primarily issued to support public and private borrowing arrangements. The credit risk involved in issuing letters of credit is essentially the same as that involved in extending loan facilities to customers. Collateral held varies as specified above and is required in instances deem necessary.

Concentration by Geographic Location: Loans, commitments to extend credit and standby letters of credit have been granted to customers who are located primarily in New York City. Generally, such loans most often are secured by one-to-four family residences. The loans are expected to be repaid from the borrowers' cash flows.

Lease Commitments: At June 30, 2018, there are noncancelable operating leases for office space that expire on various dates through 2031. One such lease contains an escalation clause providing for increased rental based primarily on increases in real estate taxes. Net rental expenses under operating leases, included in occupancy expense, totaled $341 and $354 for the three months ended June 30, 2018 and 2017, respectively.  Net rental expenses under operating leases, included in occupancy expense, totaled $746 and $708 for the six months ended June 30, 2018 and 2017, respectively.     

Note 11. Commitments, Contingencies and Credit Risk (Continued)

The projected minimum rental payments under the terms of the leases at June 30, 2018 are as follows:

	June 30,
	(Unaudited)
2018	$	682
2019		1,076
2020		1,107
2021		1,140
2022		1,043
Thereafter		6,671
	$	11,719

Legal Matters: The Company is involved in various legal proceedings which have arisen in the normal course of business. Management believes that resolution of these matters will not have a material effect on the Company’s financial condition or results of operations.

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Fair Value

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Fair Value

Note 12. Fair Value

The following fair value hierarchy is used based on the lowest level of input significant to the fair value measurement. There are three levels of inputs that may be used to measure fair values:

Level 1 – Quoted prices (unadjusted) for identical assets or liabilities in active markets that the entity has the ability to access as of the measurement date.

Level 2 – Significant other observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data.

Level 3 – Significant unobservable inputs that reflect a company’s own assumptions about the assumptions that market participants would use in pricing an asset or liability.

The Company used the following methods and significant assumptions to estimate fair value:

Cash and Cash Equivalents, Accrued Interest Receivable, Advance Payments by Borrowers for Taxes and Insurance, and Accrued Interest Payable: The carrying amount is a reasonable estimate of fair value. These assets and liabilities were not recorded at fair value on a recurring basis.

Available-for-Sale Securities: These financial instruments are recorded at fair value in the consolidated financial statements on a recurring basis. Where quoted prices are available in an active market, securities are classified within Level 1 of the valuation hierarchy. If quoted prices are not available, then fair values are estimated by using pricing models (e.g., matrix pricing) or quoted prices of securities with similar characteristics and are classified within Level 2 of the valuation hierarchy. Examples of such instruments include government agency bonds and mortgage-backed securities. Level 3 securities are securities for which significant unobservable inputs are utilized. There were no changes in valuation techniques used to measure similar assets during the period.

FHLB Stock: The carrying value of FHLB stock approximates fair value since the Bank can redeem such stock with FHLB at cost.  As a member of the FHLB, we are required to purchase this stock, which we carry at cost and classify as restricted equity securities.

Note 12. Fair Value (Continued)

Loans: For variable rate loans, which reprice frequently and have no significant change in credit risk, carrying values are a reasonable estimate of fair values, adjusted for credit losses inherent in the portfolios. The fair value of fixed rate loans is estimated by discounting the future cash flows using estimated market rates at which similar loans would be made to borrowers with similar credit ratings and for the same remaining maturities, adjusted for credit losses inherent in the portfolios. Impaired loans are valued using a present value discounted cash flow method, or the fair value of the collateral. Loans are not recorded at fair value on a recurring basis.

Loans Held for Sale:  Loans held for sale are carried at the lower of cost or fair value.  The fair value of loans held for sale is determined from actual bids from bona fide investors.  These assets are classified as Level 2.  

Other Real Estate Owned: Other real estate owned represents real estate acquired through foreclosure, and is recorded at fair value less estimated disposal costs on a nonrecurring basis. Fair value is based upon independent market prices, appraised values of the collateral or management's estimation of the value of the collateral. When the fair value of the collateral is based on an observable market price or a current appraised value, the asset is classified as Level 2. When an appraised value is not available or management determines the fair value of the collateral is further impaired below the appraised value and there is no observable market price, the asset is classified as Level 3.

Deposits: The fair values of demand deposits, savings, NOW and money market accounts equal their carrying amounts, which represent the amounts payable on demand at the reporting date. Fair values for fixed-term, fixed-rate certificates of deposit are estimated using a discounted cash flow calculation that applies market interest rates on certificates of deposit to a schedule of aggregated expected monthly maturities on such deposits. Deposits are not recorded at fair value on a recurring basis.

Advances From the Federal Home Loan Bank: The fair value of the advances is estimated using a discounted cash flow calculation that applies current market-based FHLB interest rates for advances of similar maturity to a schedule of maturities of such advances. These borrowings are not recorded at fair value on a recurring basis.

Off-Balance-Sheet Instruments: Fair values for off-balance-sheet instruments (lending commitments and standby letters of credit) are based on fees currently charged to enter into similar agreements, taking into account the remaining terms of the agreements and the counterparties' credit standing. Off-balance-sheet instruments are not recorded at fair value on a recurring basis.

The following tables detail the assets that are carried at fair value and measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017, and indicate the level within the fair value hierarchy utilized to determine the fair value:

			June 30, 2018
					(Unaudited)
Description	Total		Level 1		Level 2		Level 3
Available-for-Sale Securities:
U.S. government and federal agencies	$	24,396	$	—	$	24,396	$	—
Mortgage-Backed Securities:
FNMA Certificates		905		—		905		—
GNMA Certificates		2,843		—		2,843		—
	$	28,144	$	—	$	28,144	$	—

			December 31, 2017
Description	Total		Level 1		Level 2		Level 3
Available-for-Sale Securities:
U.S. government and federal agencies	$	24,552	$	—	$	24,552	$	—
Mortgage-Backed Securities:
FNMA Certificates		1,103		—		1,103		—
GNMA Certificates		3,242		—		3,242		—
	$	28,897	$	—	$	28,897	$	—

Note 12. Fair Value (Continued)

Our assessment and classification of an investment within a level can change over time based upon maturity or liquidity of the investment and would be reflected at the beginning of the quarter in which the change occurred.

The following tables detail the assets carried at fair value and measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017 and indicate the fair value hierarchy utilized to determine the fair value:

	June 30, 2018
	(Unaudited)
	Total		Level 1		Level 2		Level 3
Impaired loans	$	18,152	$	—	$	—	$	18,152
Loans held for sale	$	—	$	—	$	—	$	—
Other real estate owned	$	—	$	—	$	—	$	—

	December 31, 2017
	Total		Level 1		Level 2		Level 3
Impaired loans	$	25,160	$	—	$	—	$	25,160
Loans held for sale	$	—	$	—	$	—	$	—
Other real estate owned	$	—	$	—	$	—	$	—

Losses on assets carried at fair value on a nonrecurring basis were de minimis for the three and six months ended June 30, 2018 and 2017, respectively.

The fair value information about financial instruments are disclosed, whether or not recognized in the consolidated statements of financial condition, for which it is practicable to estimate that value. Accordingly, the aggregate fair value amounts presented do not represent the underlying value of the Company. The estimated fair value amounts for 2018 and 2017 have been measured as of their respective period-ends and have not been reevaluated or updated for purposes of these consolidated financial statements subsequent to those respective dates. As such, the estimated fair values of these financial instruments subsequent to the respective reporting dates may be different than amounts reported at each period.

The information presented should not be interpreted as an estimate of the fair value of the entire Company since a fair value calculation is only required for a limited portion of the Company's assets and liabilities. Due to the wide range of valuation techniques and the degree of subjectivity used in making the estimates, comparisons between the Company's disclosures and those of other banks may not be meaningful.

Note 12. Fair Value (Continued)

As of June 30, 2018 and December 31, 2017, the book balances and estimated fair values of the Company's financial instruments were as follows:

	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3		Total
June 30, 2018 (Unaudited)
Financial assets:
Cash and cash equivalents	$	49,182	$	49,182	$	—	$	—	$	49,182
Investment securities		28,144		—		28,144		—		28,144
Loans held for sale		—		—		—		—		—
Loans receivable, net		850,426		—		—		857,229		857,229
Accrued interest receivable		3,350		—		3,350		—		3,350
FHLB stock		2,617		2,617		—		—		2,617
Pension plan asset		14,566		—		—		14,565		14,565
Financial liabilities:
Deposits:
Demand deposits		108,550		108,550		—		—		108,550
Interest-bearing deposits		209,901		209,901		—		—		209,901
Certificates of deposit		434,804		—		436,474		—		436,474
Advance payments by borrowers for taxes and insurance		5,491		—		5,491		—		5,491
Advances from FHLB		37,775		37,775		—		—		37,775
Accrued interest payable		141		—		141		—		141
December 31, 2017
Financial assets:
Cash and cash equivalents	$	59,724	$	59,724	$	—	$	—	$	59,724
Investment securities		28,897		—		28,897		—		28,897
Loans held for sale		—		—		—		—		—
Loans receivable, net		798,703		—		—		813,160		813,160
Accrued interest receivable		3,335		—		3,335		—		3,335
FHLB stock		1,511		1,511		—		—		1,511
Pension plan asset		14,735		—		—		14,696		14,696
Financial liabilities:
Deposits:
Demand deposits		103,001		103,001		—		—		103,001
Interest-bearing deposits		200,923		200,923		—		—		200,923
Certificates of deposit		410,061		—		414,902		—		414,902
Advance payments by borrowers for taxes and insurance		5,025		—		5,025		—		5,025
Advances from FHLB		36,400		36,400		—		—		36,400
Accrued interest payable		42		—		42		—		42

Off-Balance-Sheet Instruments: Loan commitments on which the committed interest rate is less than the current market rate are insignificant at June 30, 2018 and December 31, 2017.

Pension Plan Asset: The pension plan asset included above represents the guaranteed deposit account on the Old Pension Plan. The guaranteed deposit account is valued at fair value by discounting the related cash flows based on current yields of similar instruments with comparable durations considering the creditworthiness of the issuer. Such fair value measurement is considered a Level 3 measurement.

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Regulatory Capital Requirements

6 Months Ended

Jun. 30, 2018

Banking And Thrift [Abstract]

Regulatory Capital Requirements

Note 13. Regulatory Capital Requirements

The Company and the Bank are subject to various regulatory capital requirements administered by the Federal Reserve Board and the OCC, respectively. Failure to meet minimum capital requirements can initiate certain mandatory and possibly additional discretionary actions by regulators that, if undertaken, could have a direct material effect on the Company’s operations and financial statements. Under the regulatory capital adequacy guidelines and the regulatory framework for prompt corrective action, the Company must meet specific capital guidelines that involve quantitative measures of the Company's assets, liabilities and certain off-balance-sheet items as calculated under regulatory accounting practices. The Company's capital amounts and classification are also subject to qualitative judgments by the regulators about components, risk weightings and other factors.

Quantitative measures established by regulation require the maintenance of minimum amounts and ratios (set forth in the table below) of total risk-based and Tier 1 capital to risk-weighted assets (as defined), common equity Tier 1 capital (as defined), and Tier 1 capital to adjusted total assets (as defined) adjusted total assets (as defined). Management believes that, as of June 30, 2018 and December 31, 2017, all applicable capital adequacy requirements have been met.

The below minimum capital requirements exclude the capital conservation buffer required to avoid limitations on capital distributions including dividend payments and certain discretionary bonus payments to executive officers.  The capital conservation buffer is being phased in from 0% for 2015 to 2.5% by 2019.  The applicable capital buffer was 12.1% at June 30, 2018 and 12.7% at December 31, 2017.

The most recent notification from the OCC categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. To be categorized as well capitalized, the Company and the Bank must maintain minimum total risk-based, common equity risk-based, Tier 1 risk-based and Tier 1 leverage ratios as set forth in the table below. There were no conditions or events since then that management believes have changed the Bank's category.

The Company's and the Bank’s actual capital amounts and ratios as of June 30, 2018 and December 31, 2017 as compared to regulatory requirements are as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2018 (Unaudited)
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	183,624		25.47	%	$	57,676		8.00	%	$	72,095		10.00	%
Tier 1 Capital to Risk-Weighted Assets		174,574		24.21	%		43,257		6.00	%		57,676		8.00	%
Common Equity Tier 1 Capital Ratio		174,574		24.21	%		32,443		4.50	%		46,861		6.50	%
Tier 1 Capital to Total Assets		174,574		18.07	%		38,639		4.00	%		48,299		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	144,379		20.07	%	$	57,550		8.00	%	$	71,938		10.00	%
Tier 1 Capital to Risk-Weighted Assets		135,349		18.81	%		43,163		6.00	%		57,550		8.00	%
Common Equity Tier 1 Capital Ratio		135,349		18.81	%		32,372		4.50	%		46,760		6.50	%
Tier 1 Capital to Total Assets		135,349		14.03	%		38,591		4.00	%		48,239		5.00	%

Note 13. Regulatory Capital Requirements (Continued)

December 31, 2017
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	181,196	26.57	%	$	54,557	8.00	%	$	68,196	10.00	%
Tier 1 Capital to Risk-Weighted Assets		172,603	25.31	%		40,917	6.00	%		54,557	8.00	%
Common Equity Tier 1 Capital Ratio		172,603	25.31	%		30,688	4.50	%		44,327	6.50	%
Tier 1 Capital to Total Assets		172,603	20.02	%		34,501	4.00	%		43,127	5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	141,120	20.73	%	$	54,447	8.00	%	$	68,059	10.00	%
Tier 1 Capital to Risk-Weighted Assets		132,577	19.48	%		40,835	6.00	%		54,447	8.00	%
Common Equity Tier 1 Capital Ratio		132,577	19.48	%		30,626	4.50	%		44,238	6.50	%
Tier 1 Capital to Total Assets		132,577	14.67	%		36,152	4.00	%		45,190	5.00	%

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Accumulated Other Comprehensive Income (Loss)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Accumulated Other Comprehensive Income (Loss)

Note 14. Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows:

	June 30, 2018
	(Unaudited)
	December 31, 2017			Change			June 30, 2018
Unrealized gains (losses) on securities available for sale, net	$	(221	)	$	(182	)	$	(403	)
Unrealized losses on pension benefits, net		(7,630	)		(43	)		(7,673	)
Total	$	(7,851	)	$	(225	)	$	(8,076	)

	December 31, 2017
	December 31, 2016			Change			December 31, 2017
Unrealized gains (losses) on securities available for sale, net	$	(166	)	$	(55	)	$	(221	)
Unrealized gains (losses) on pension benefits, net		(6,084	)		(1,546	)		(7,630	)
Total	$	(6,250	)	$	(1,601	)	$	(7,851	)

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Transactions With Related Parties

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Transactions With Related Parties

Note 15.Transactions With Related Parties

Directors and officers of the Company have been customers of and have had transactions with the Bank, and it is expected that such persons will continue to have such transactions in the future. Aggregate loan transactions with related parties for the three and six months ended June 30, 2018 were as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Beginning balance	$	1,329		$	1,540		$	1,351		$	1,573
Originations		100			—			111			—
Payments		(33	)		(31	)		(66	)		(64	)
Ending balance	$	1,396		$	1,509		$	1,396		$	1,509

The Company held deposits in the amount of $6,336 and $5,959  from officers and directors at June 30, 2018 and December 31, 2017, respectively.

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Nature of Business and Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Basis of Accounting and Consolidation

Basis of Presentation and Consolidation:

The unaudited interim Consolidated Financial Statements of PDL Community Bancorp (the “Company”) presented herein have been prepared pursuant to the rules of the Securities and Exchange Commission (“SEC”) for quarterly reports on Form 10Q and do not include all of the information and note disclosures required by the U.S. generally accepted accounting principles (“GAAP”).  In the opinion of management, all adjustments and disclosures considered necessary for the fair presentation of the accompanying Consolidated Financial Statements have been included.  Interim results are not necessarily reflective of the results of the entire year.  The accompanying unaudited Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2017 included in the Company’s annual report on Form 10-K.

The unaudited interim Consolidated Financial Statements include the accounts of the Company, its wholly owned subsidiary Ponce Bank (the “Bank”), and the Bank’s wholly-owned subsidiaries.  The Bank’s subsidiaries consist of PFS Service Corp., which owns some of the Bank’s real property, and Ponce De Leon Mortgage Corp., which is a mortgage banking entity.  All significant intercompany transactions and balances have been eliminated in consolidation.

Reorganization and Stock Offering

Reorganization and Stock Offering:

On September 29, 2017, Ponce De Leon Federal Bank reorganized into a two-tier mutual holding company structure with a mid-tier stock holding company.  The Company sold 8,308,362 shares of common stock at $10.00 per share, including 723,751 shares purchased by the Company’s Employee Stock Ownership Plan (“ESOP”).  In addition, the Company issued 9,545,387 shares to Ponce Bank Mutual Holding Company, the Company’s mutual holding company parent (the “MHC”) and 609,279 shares to The Ponce De Leon Foundation (“Foundation”), a charitable foundation that was formed in connection with the stock offering and is dedicated to supporting charitable organizations operating in the Bank’s local community.  A total of 18,463,028 shares of common stock were outstanding following the completion of the stock offering. As a result of the reorganization, the reporting entity changed from Ponce De Leon Federal Bank to PDL Community Bancorp.

The direct costs of the Company’s stock offering of $4,988 were deferred and deducted from the proceeds of the offering.

Nature of Operations

Nature of Operations:

The Bank is a federally chartered savings association headquartered in the Bronx, New York.  Ponce De Leon Federal Bank was originally chartered in 1960 as a federally chartered mutual savings and loan association under the name Ponce De Leon Federal Savings and Loan Association.  In 1985, the Bank changed its name to “Ponce De Leon Federal Savings Bank.”  In 1997, the Bank changed its name again to “Ponce De Leon Federal Bank.”   Upon the completion of its reorganization into the MHC, the assets and liabilities of Ponce De Leon Federal Bank were transferred to and assumed by the Bank, a federally chartered stock savings association, owned 100% by PDL Community Bancorp and known as and conducting business under the name “Ponce Bank.” The Bank will continue to be subject to comprehensive regulation and examination by the Office of Comptroller of the Currency (the “OCC”).

The Bank’s business is conducted through the administrative office and 13 branch offices.  The banking offices are located in the Bronx, Manhattan, Queens and Brooklyn, New York and Union City, New Jersey.  The primary market area currently consists of the New York City metropolitan area.

The Bank’s business primarily consists of taking deposits from the general public and investing those deposits, together with funds generated from operations and borrowings, in mortgage loans, consisting of one-to-four family residential (both investor-owned and owner-occupied), multifamily residential, nonresidential properties and construction and land, and, to a lesser extent, in business and consumer loans. The Bank also invests in securities, which have historically consisted of U.S. government and federal agency securities and securities issued by government-sponsored or owned enterprises, as well as, mortgage-backed securities and Federal Home Loan Bank stock.   The Bank offers a variety of deposit accounts, including demand, savings, money markets and certificates of deposit accounts.

Use of Estimates

Use of Estimates:  In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities, as of the date of the consolidated statement of financial condition, and revenues and expenses for the reporting period. Actual results could differ from those estimates. Material estimates that are particularly susceptible to significant change in the near term relate to the determination of the allowance for loan losses, the valuation of real estate acquired in connection with foreclosures or in satisfaction of loans, the valuation of loans held for sale, the valuation of deferred tax assets and investment securities, and the determination of pension benefit obligations.

Interim Financial Statements

Interim Financial Statements:  The interim consolidated financial statements at June 30, 2018, and for the three and six months ended June 30, 2018 and 2017 are unaudited and reflect all normal recurring adjustments that are, in the opinion of management, necessary for a fair presentation of the results for the interim periods presented.  The results of operations for the three and six months ended June 30, 2018, are not necessarily indicative of the results to be achieved for the remainder of the year ending December 31, 2018, or any other period.

Significant Group Concentrations of Credit Risk

Significant Group Concentrations of Credit Risk:  Most of the Bank's activities are with customers located within New York City. Accordingly, the ultimate collectability of a substantial portion of the Bank's loan portfolio is susceptible to changes in the local market conditions. Note 3 discusses the types of securities that the Bank invests in. Notes 4 and 11 discuss the types of lending that the Bank engages in, and other concentrations.

Cash and Cash Equivalents

Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand and amounts due from banks (including items in process of clearing). For purposes of reporting cash flows, the Bank considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents. Cash flows from loans originated by the Bank, interest-bearing deposits in financial institutions, and deposits are reported net.

Securities

Securities:  Management determines the appropriate classification of securities at the date individual investment securities are acquired, and the appropriateness of such classification is reassessed at each statement of financial condition date.

Debt securities that management has the positive intent and ability to hold to maturity, if any, are classified as "held to maturity" and recorded at amortized cost. Trading securities, if any, are carried at fair value, with unrealized gains and losses recognized in earnings. Securities not classified as held to maturity or trading, are classified as "available for sale" and recorded at fair value, with unrealized gains and losses excluded from earnings and reported in other comprehensive income (loss), net of tax. Purchase premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

Management evaluates securities for other-than-temporary impairment (“OTTI”) on at least a quarterly basis, and more frequently when economic or market conditions warrant such an evaluation.  For securities in an unrealized loss position, management considers the extent and duration of the unrealized loss, and the financial condition and near-term prospects of the issuer.  Management also assesses whether it intends to sell, or it is more likely than not that it will be required to sell, a security in an unrealized loss position before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the entire difference between amortized cost and fair value is recognized as impairment through earnings.  For debt securities that do not meet the aforementioned criteria, the amount of impairment is split into two components as follows: 1) OTTI related to credit loss, which must be recognized in the consolidated statement of income (loss) and 2) OTTI related to other factors, which is recognized in other comprehensive income (loss).

The credit loss is defined as the difference between the discounted present value of the cash flows expected to be collected and the amortized cost basis. For equity securities, the entire amount of impairment is recognized through earnings.

Gains and losses on the sale of securities are recorded on the trade date and are determined using the specific-identification method. The sale of a held-to-maturity security within three months of its maturity date or after collection of at least 85% of the principal outstanding at the time the security was acquired is considered a maturity for purposes of classification and disclosure.

Federal Home Loan Bank Stock

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Federal Home Loan Bank Stock:  The Bank is a member of the Federal Home Loan Bank of New York (the “FHLB”).  Members are required to own a certain amount of stock based on the level of borrowings and other factors, and may invest in additional amounts.  FHLB stock is carried at cost, classified as a restricted security, and periodically evaluated for impairment based on ultimate recovery of par value.  Both cash and stock dividends are reported as income.  

Loans Receivable

Loans Receivable:  Loans receivable that management has the intent and ability to hold for the foreseeable future or until maturity or payoff are stated at current unpaid principal balances, net of the allowance for loan losses and including net deferred loan origination fees and costs.

Interest income is accrued based on the unpaid principal balance. Loan origination fees, net of certain direct origination costs, are deferred and recognized in interest income using the interest method without anticipating prepayments.  

A loan is moved to nonaccrual status in accordance with the Bank’s policy typically after 90 days of non-payment. The accrual of interest on mortgage and commercial loans is generally discontinued at the time the loan becomes 90 days past due unless the loan is well-secured and in process of collection. Consumer loans are typically charged-off no later than 120 days past due.  Past due status is based on contractual terms of the loan. In all cases, loans are placed on nonaccrual status or charged-off if collection of principal or interest is considered doubtful.  All nonaccrual loans are considered impaired loans.  

All interest accrued but not received for loans placed on nonaccrual are reversed against interest income.  Interest received on such loans is accounted for on the cash basis or recorded against principal balances only, until qualifying for return to accrual.  Cash basis interest recognition is only applied on nonaccrual loans with a sufficient collateral margin to ensure no doubt with respect to the collectability of principal.  Loans are returned to accrual status when all the principal and interest amounts contractually due are brought current and remain current for a period of time (typically six months) and future payments are reasonably assured.

Allowance for Loan Losses

Allowance for Loan Losses:  The allowance for loan losses is a valuation allowance for probable incurred credit losses.  Loan losses are charged against the allowance when management believes the uncollectibility of a loan balance is confirmed.  Subsequent recoveries, if any, are credited to the allowance. Management estimates the allowance balance required using past loan loss experience, the nature and volume of the portfolio, information about specific borrower situations and estimated collateral values, economic conditions, and other factors.  Allocations of the allowance may be made for specific loans, but the entire allowance is available for any loan that, in management’s judgment, should be charged off.

The allowance consists of specific and general components.  The specific component relates to loans that are individually classified as impaired when, based on current information and events, it is probable that the Bank will be unable to collect all amounts due according to the contractual terms of the loan agreement.  Loans for which the terms have been modified resulting in a concession, and for which the borrower is experiencing financial difficulties, are considered troubled debt restructurings (“TDR”) and classified as impaired.

Factors considered by management in determining impairment include payment status, collateral value, and the probability of collecting scheduled principal and interest payments when due. Loans that experience insignificant payment delays and payment shortfalls generally are not classified as impaired.  Management determines the significance of payment delays and payment shortfalls on a case-by-case basis, taking into consideration all of the circumstances surrounding the loan and the borrower, including the length of the delay, the reasons for the delay, the borrower’s prior payment record, and the amount of the shortfall in relation to the principal and interest owed.

Impaired loans are measured for impairment using the fair value of the collateral, present value of cash flows, or the observable market price of the note.  Impairment measurement for all collateral dependent loans, excluding accruing TDR’s, is based on the fair value of collateral, less costs to sell, if necessary.  A loan is considered collateral dependent if repayment of the loan is expected to be provided solely by the sale or the operation of the underlying collateral.  

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

When the Bank modifies a loan in a TDR, management evaluates for any possible impairment using either the discounted cash flows method, where the value of the modified loan is based on the present value of expected cash flows, discounted at the contractual interest rate of the original loan agreement, or by using the fair value of the collateral less selling costs, if repayment under the modified terms becomes doubtful.

The general component covers non‑impaired loans and is based on historical loss experience adjusted for current factors.  The historical loss experience is determined by portfolio segment and is based on the actual loss history experienced over a rolling 12 quarter average period. This actual loss experience is supplemented with other economic factors based on the risks present for each portfolio segment.  These economic factors include consideration of the following:  levels of and trends in delinquencies and impaired loans; levels of and trends in charge-offs and recoveries; trends in volume and terms of loans; effects of any changes in risk selection and underwriting standards; other changes in lending policies, procedures, and practices; experience, ability, and depth of lending management and other relevant staff; national and local economic trends and conditions; industry conditions; and effects of changes in credit concentrations.  

When establishing the allowance for loan losses, management categorizes loans into risk categories reflecting individual borrower earnings, liquidity, leverage and cash flow, as well as the nature of underlying collateral. These risk categories and relevant risk characteristics are as follows:

Residential and Multifamily Mortgage Loans

Residential and Multifamily Mortgage Loans:  The majority of loans at the Bank are secured by first mortgages. Residential and multifamily mortgage loans are typically underwritten with loan-to-value ratios ranging from 65% to 90%. The primary risks involved in residential mortgages are the borrower’s loss of employment, or other significant event, that negatively impacts the source of repayment. Additionally, a serious decline in home values could jeopardize repayment in the event that the underlying collateral needs to be liquidated to pay off the loan.

Nonresidential Mortgage Loans

Nonresidential Mortgage Loans:  Nonresidential mortgage loans are primarily secured by commercial buildings, office and industrial buildings, warehouses, small retail shopping centers and various special purpose properties, including hotels, restaurants and nursing homes. These loans are typically underwritten at no more than 75% loan-to-value ratio. Although terms vary, commercial real estate loans generally have amortization periods of 15 to 30 years, as well as balloon payments of 10 to 15 years, and terms which provide that the interest rate is adjusted on a 5 year schedule.

Construction and Land Loans

Construction and Land Loans:  Construction real estate loans consist of vacant land and property that is in the process of improvement. Repayment of these loans can be dependent on the sale of the property to third parties or the successful completion of the improvements by the builder for the end user. In the event a loan is made on property that is not yet improved for the planned development, there is the risk that government approvals will not be granted or will be delayed. Construction loans also run the risk that improvements will not be completed on time or in accordance with specifications and projected costs. Construction real estate loans generally have terms of six months to two years during the construction period with fixed rates or interest rates based on a designated index.                                                                                                                                                                                          

Business Loans

Business Loans:  Business loans are loans for commercial, corporate and business purposes, including issuing letters of credit. These loans are secured by business assets or may be unsecured and repayment is directly dependent on the successful operation of the borrower’s business and the borrower’s ability to convert the assets to operating revenue.  They possess greater risk than most other types of loans because the repayment capacity of the borrower may become inadequate. Business loans generally have terms of five years to seven years or less and interest rates that float in accordance with a designated published index. Substantially all such loans are backed by the personal guarantees of the owners of the business.

Consumer Loans

Consumer Loans:  Consumer loans generally have higher interest rates than mortgage loans. The risk involved in consumer loans is the type and nature of the collateral and, in certain cases, the absence of collateral. Consumer loans include passbook loans and other secured and unsecured loans that have been made for a variety of consumer purposes.

Loans Held for Sale

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Loans Held for Sale:  Loan sales occur from time to time as part of strategic business or regulatory compliance initiatives.  Loans held for sale, including deferred fees and costs, are reported at the lower of cost or fair value as determined by expected bid prices from potential investors. Loans are sold without recourse and servicing released. When a loan is transferred from portfolio to held-for-sale and the fair value is less than cost, a charge-off is recorded against the allowance for loan losses. Subsequent declines in fair value, if any, are charged against earnings.

Transfers of Financial Assets

Transfers of Financial Assets:  Transfers of financial assets are accounted for as sales when all of the components meet the definition of a participating interest and when control over the assets has been surrendered. A participating interest generally represents (1) a proportionate (pro rata) ownership interest in an entire financial asset, (2) a relationship where from the date of transfer all cash flows received from the entire financial asset are divided proportionately among the participating interest holders in an amount equal to their share of ownership, (3) the priority of cash flows has certain characteristics, including no reduction in priority, subordination of interest, or recourse to the transferor other than standard representation or warranties, and (4) no party has the right to pledge or exchange the entire financial asset unless all participating interest holders agree to pledge or exchange the entire financial asset. Control over transferred assets is deemed to be surrendered when (1) the assets have been isolated from the Company, (2) the transferee obtains the right (free of conditions that constrain it from taking advantage of that right) to pledge or exchange the transferred assets, and (3) the Company does not maintain effective control over the transferred assets through either (a) an agreement to repurchase them before their maturity or (b) the ability to unilaterally cause the holder to return specific assets, other than through a clean-up call.

Premises and Equipment

Premises and Equipment:  Premises and equipment are stated at cost, less accumulated depreciation.

Depreciation is computed and charged to operations using the straight-line method over the estimated useful lives of the respective assets as follows:

	Years
Building	39
Building improvements	15 - 39
Furniture, fixtures, and equipment	3 - 10

Leasehold improvements are amortized over the shorter of the improvements’ estimated economic lives or the related lease terms, including extensions expected to be exercised. Gains and losses on dispositions are recognized upon realization. Maintenance and repairs are expensed as incurred and improvements are capitalized.  Leasehold improvements in process are not amortized until the assets are placed in operation.  

Impairment of Long-Lived Assets

Impairment of Long-Lived Assets:  Long-lived assets, including premises and equipment, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. If impairment is indicated by that review, the asset is written down to its estimated fair value through a charge to noninterest expense.

Other Real Estate Owned

Other Real Estate Owned:  Other Real Estate Owned (“OREO”) represents properties acquired through, or in lieu of, loan foreclosure or other proceedings. OREO is initially recorded at fair value, less estimated disposal costs, at the date of foreclosure, which establishes a new cost basis. After foreclosure, the properties are held for sale and are carried at the lower of cost or fair value, less estimated costs of disposal. Any write-down to fair value, at the time of transfer to OREO, is charged to the allowance for loan losses. Properties are evaluated regularly to ensure that the recorded amounts are supported by current fair values and charges against earnings are recorded as necessary to reduce the carrying amount to fair value, less estimated costs to dispose. Costs relating to the development and improvement of the property are capitalized, subject to the limit of fair value of the OREO, while costs relating to holding the property are expensed. Gains or losses are included in operations upon disposal.

Income Taxes

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Income Taxes:  The Company recognizes income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that all or some portion of the deferred tax assets will not be realized.

When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately sustained. The benefit of a tax position is recognized in the consolidated financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50% likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

As of June 30, 2018 and December 31, 2017, there are no liabilities recorded related to uncertain tax positions. Income tax returns filed for years before 2014 are no longer subject to income tax examinations by U.S. federal, state or local tax authorities.

Interest and penalties associated with unrecognized tax benefits, if any, would be classified as additional provision for income taxes in the consolidated statements of income (loss).

Related Party Transactions

Related Party Transactions:  Directors and officers of the Company and their affiliates have been customers of and have had transactions with the Company, and it is expected that such persons will continue to have such transactions in the future. Management believes that all deposit accounts, loans, services and commitments comprising such transactions were made in the ordinary course of business, on substantially the same terms, including interest rates and collateral, as those prevailing at the time for comparable transactions with other customers who are not directors or officers. In the opinion of management, the transactions with related parties did not involve more than normal risk of collectability, nor favored treatment or terms, nor present other unfavorable features. Note 15 contains details regarding related party transactions.

Employee Benefit Plans

Employee Benefit Plans:  The Company maintains Ponce Bank’s 401(K) Plan, the noncontributory defined benefit plan, as well as, the Supplemental Executive Retirement Plans (the “SERP’s”).  The noncontributory defined benefit pension plan was effectively frozen on May 31, 2007. The funding policy is to contribute annually the amounts sufficient to meet the minimum funding standards established by the Employee Retirement Income Security Act (“ERISA”) and such additional amounts as determined by management based on actuary recommendations.

Employee Stock Ownership Plan

Employee Stock Ownership Plan:  Compensation expense is recorded as shares are committed to be released with a corresponding credit to unearned ESOP shares at the average fair market value of the shares during the period and the shares become outstanding for earnings per share computations.  Compensation expense is recognized ratably over the service period based upon management’s estimate of the number of shares expected to be allocated by the ESOP.  The difference between the average fair market value and the cost of the shares allocated by the ESOP is recorded as an adjustment to additional paid-in-capital. Unallocated common shares held by the Company’s ESOP are shown as a reduction in stockholders’ equity and are excluded from weighted-average common shares outstanding for both basic and diluted earnings per share calculations until they are committed to be released.

Comprehensive Income (Loss)

Comprehensive Income (Loss):  Comprehensive income (loss) consists of net income and other comprehensive income (loss), which are both recognized as separate components of equity.  Other comprehensive income (loss) includes unrealized gains and losses on securities available for sale and unrecognized gains and losses on actuarial loss and prior service cost of the defined benefit plan.

Loss Contingencies

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

Loss Contingencies:  Loss contingencies, including claims and legal actions arising in the ordinary course of business, are recorded as liabilities when the likelihood of loss is probable and an amount or range of loss can be reasonably estimated.  Management does not believe there are any such matters that will have a material effect on the operations and financial position of the Company.

Fair Value of Financial Instruments

Fair Value of Financial Instruments:  Fair value is the exchange price that would be received for an asset or paid to transfer a liability (exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Fair values of financial instruments are estimated using relevant market information and other assumptions, as more fully disclosed in Note 12.  Fair value estimates involve uncertainties and matters of significant judgment regarding interest rates, credit risk, prepayments, and other factors, especially in the absence of broad markets for particular items.  Changes in assumptions or in market conditions could significantly affect these estimates.

Segment Reporting

Segment Reporting:  While management monitors the revenue streams of the various products and services, the identifiable segments and operations are managed and financial performance is evaluated on a Company-wide basis.  Accordingly, all of the financial service operations are considered by management to be aggregate in one reportable operating segment.

Loan Commitments and Related Financial Instruments

Loan Commitments and Related Financial Instruments:   Financial instruments include off‑balance sheet credit instruments, such as commitments to make loans and commercial letters of credit, issued to meet customer financing needs.  The face amount for these items represents the exposure to loss, before considering customer collateral or ability to repay.  Such financial instruments are recorded when they are funded.

Earnings Per Share ("EPS")

Earnings Per Share (“EPS”):  Basic EPS represents net income attributable to common shareholders divided by the weighted-average number of common shares outstanding during the period less unallocated ESOP shares.  Diluted EPS is computed by dividing net income attributable to common shareholders by the weighted-average number of common shares outstanding, plus the effect of potential dilutive common stock equivalents outstanding during the period.  

Recent Accounting Pronouncements

Recent Accounting Pronouncements:

As an emerging growth company (“EGC”) as defined in Rule 12b-2 of the Exchange Act, the Company has elected to use the extended transition period to delay the adoption of new or reissued accounting pronouncements applicable to public companies until such pronouncements are made applicable to nonpublic companies.  As of June 30, 2018, there is no significant difference in the comparability of the consolidated financial statements as a result of this extended transition period.

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, “Revenue from Contracts with Customers (Topic 606)”, that amended guidance on revenue recognition from contracts with customers. The standard outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most contract revenue recognition guidance, including industry-specific guidance. The core principle of the amended guidance reportedly is that an entity should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The amended guidance is effective for annual reporting periods beginning after December 15, 2017, including interim periods within that reporting period, for public business entities.  As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019.   The Bank’s primary source of revenue is interest income on financial assets and income from mortgage banking activities, which are explicitly excluded from the scope of the new guidance.  As a result, the adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.  However, the Company will continue to monitor developments and additional guidance up to the effective date of these amendments.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In January 2016, the FASB issued ASU 2016-01, “Financial Instruments – Overall (Subtopic 825-10) Recognition and Measurement of Financial Assets and Financial Liabilities.” The FASB reported that the main objective in developing this new ASU was to enhance the reporting model for financial instruments, to provide users of financial statements with more useful information. The update requires equity investments (except those accounted for under the equity method of accounting or those that result in consolidation of the investee) to be measured at fair value with changes in fair value recognized in net income. It addresses the impairment assessment of equity investments without readily determinable fair values by requiring a qualitative assessment to identify impairment. The amendment eliminates the requirement for public business entities to disclose the methods and significant assumptions used to estimate the fair value that is required to be disclosed for financial instruments measured at amortized cost on the balance sheet. It requires public business entities to use the exit price notion when measuring the fair value of financial instruments for disclosure purposes. Financial assets and financial liabilities are to be presented separately by measurement category and form of financial asset and the need for a valuation allowance on a deferred tax asset related to available-for-sale securities should be evaluated with the entity’s other deferred tax assets. The amendments in this update are effective for fiscal years beginning after December 15, 2017, including interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842).” This ASU requires all lessees to recognize a lease liability and a right-of-use asset, measured at the present value of the future minimum lease payments, at the lease commencement date. Lessor accounting remains largely unchanged under the new guidance. The guidance is effective for fiscal years beginning after December 15, 2018, including interim reporting periods within that reporting period, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2019, and interim periods within fiscal years beginning after December 15, 2020.

The Company has begun its evaluation of the amended guidance including the potential impact on its consolidated financial statements. To date, the Company has identified its leased office spaces as within the scope of the guidance. The Company currently leases six branches and the new guidance will result in the establishment of a right to use asset and corresponding lease obligations. The Company continues to evaluate the impact of the guidance, including determining whether other contracts exist that are deemed to be in scope and subsequent related accounting standard updates. As such, no conclusions have yet been reached regarding the potential impact of adoption on the Company’s consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, “Compensation - Stock Compensation (Topic 718).” The reported objective of this ASU is to simplify accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. Under the update, all excess tax benefits and tax deficiencies (including tax benefits of dividends on share-based payment awards) should be recognized as income tax expense or benefit in the income statement. The tax effects of exercised or vested awards should be treated as discrete items in the reporting period in which they occur. An entity also should recognize excess tax benefits regardless of whether the benefit reduces taxes payable in the current period. An entity can make an entity-wide accounting policy election to either estimate the number of awards that are expected to vest (current accounting) or account for forfeitures when they occur. Within the statement of cash flows, excess tax benefits should be classified along with other income tax cash flows as an operating activity, and cash paid by an employer when directly withholding shares for tax-withholding purposes should be classified as a financing activity. The amendments in this ASU are effective for annual periods beginning after December 15, 2016, and interim periods within those annual periods, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The Company expects to apply the amendments in this update by means of a cumulative-effect adjustment to equity as of the beginning of the period in which the guidance is adopted, or prospectively, as applicable.  The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In June 2016, the FASB issued ASU 2016-13, “Measurement of Credit Losses on Financial Instruments.” This ASU reportedly significantly changes how entities will measure credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The standard is to replace today’s “incurred loss” approach with an “expected loss” model. The new model, referred to as the current expected credit loss (“CECL”) model, is to apply to: (1) financial assets subject to credit losses and measured at amortized cost, and (2) certain off-balance sheet credit exposures. This includes, but is not limited to, loans, leases, held-to-maturity securities, loan commitments and financial guarantees. The CECL model does not apply to available-for-sale (“AFS”) debt securities. For AFS debt securities with unrealized losses, entities will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than reductions in the amortized cost of the securities. As a result, entities will recognize improvements to estimated credit losses immediately in earnings rather than as interest income over time, as they do today. The ASU also reportedly simplifies the accounting model for purchased credit-impaired debt, securities and loans. ASU 2016-13 also expands the disclosure requirements regarding an entity’s assumptions, models and methods for estimating the allowance for loan and lease losses. In addition, entities will need to disclose the amortized cost balance for each class of financial asset by credit quality indicator, disaggregated by the year of origination. ASU No. 2016-13 is effective for annual reporting periods beginning after December 15, 2019, including interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, we will adopt the amendments in this update beginning after December 15, 2020, including interim periods within those fiscal years. Entities have to apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective (i.e., modified retrospective approach).

Although early adoption is permitted, the Company does not expect to elect that option. The Company has begun its evaluation of the amended guidance including the potential impact on its consolidated financial statements. As a result of the required change in approach toward determining estimated credit losses from the current “incurred loss” model to one based on estimated cash flows over a loan’s contractual life, adjusted for prepayments (a “life of loan” model), the Company expects that the new guidance will result in an increase in the allowance for loan losses, particularly for longer duration loan portfolios. The Company also expects that the new guidance may result in an allowance for debt securities. In both cases, the extent of the change is indeterminable at this time as it will be dependent upon portfolio composition and credit quality at the adoption date, as well as economic conditions and forecasts at that time.

In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) - Classification of Certain Cash Receipts and Cash Payments.”  This ASU reportedly is intended to reduce diversity in how certain cash receipts and cash payments are presented and classified in the statements of cash flows.  The guidance is effective for fiscal years beginning after December 15, 2017, and interim periods within those fiscal years, for public business entities. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019. A retrospective transition method should be applied to each period presented, unless it is impracticable to apply the amendments retrospectively for some of the issues, then the amendments for those issues would be applied prospectively as of the earliest date practicable.  The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

In March 2017, the FASB issued ASU 2017-07 “Compensation-Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.”  The ASU requires that an employer report the service cost component with other compensation cost arising from services rendered by the pertinent employees during the period.  The amendment also requires the components of net benefit cost to be presented separately in the income statement from the service cost component and not within income from operations.  ASU 2017-07 is effective for interim and annual reporting for public business entities beginning after December 15, 2017. As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2018, and interim periods within annual periods beginning after December 15, 2019. The adoption of this update is not expected to have a material impact on the Company’s consolidated financial statements.

Note 1. Nature of Business and Summary of Significant Accounting Policies (Continued)

In March 2017, the FASB issued ASU 2017-08 “Receivables – Non-Refundable Fees and Other Costs (Subtopic 310-20):  Premium Amortization on Purchased Callable Debt Securities.”  The ASU requires premiums on callable debt securities to be amortized to the earliest call date.  The amendments do not require an accounting change for securities held at a discount; the discount continues to be amortized to maturity.  ASU 2017-08 is effective for interim and annual reporting periods beginning after December 15, 2018 for public business entities.  Early adoption is permitted beginning after December 15, 2018, including interim periods within those fiscal years.  As the Company is taking advantage of the extended transition period for complying with new or revised accounting standards assuming it remains an EGC, it will adopt the amendments in this update beginning after December 15, 2019, and interim periods within annual periods beginning after December 15, 2020.  ASU 2017-08 will not have a material impact on the Company’s consolidated financial position, results of operations or disclosures.

In February 2018, the Financial Accounting Standards Board issued Accounting Standards Update 2018-02, “Income Statement – Reporting Comprehensive Income (Topic 220): Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This amendment allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017.  This amendment is effective for years beginning after December 15, 2018.  Early adoption is permitted.  The Company has not elected to adopt this standard as of the date of these consolidated financial statements.

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Nature of Business and Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2018

Organization Consolidation And Presentation Of Financial Statements [Abstract]

Estimated Useful Lives of Assets

Depreciation is computed and charged to operations using the straight-line method over the estimated useful lives of the respective assets as follows:

	Years
Building	39
Building improvements	15 - 39
Furniture, fixtures, and equipment	3 - 10

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Available-for-Sale Securities (Tables)

6 Months Ended

Jun. 30, 2018

Investments Debt And Equity Securities [Abstract]

Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Available-for-Sale Securities

The amortized cost, gross unrealized gains and losses, and fair value of available-for-sale securities at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30, 2018
	(Unaudited)
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
U.S. Government and Federal Agencies	$	24,913	$	—	$	(517	)	$	24,396
Mortgage-Backed Securities:
FHLMC Certificates		—		—		—			—
FNMA Certificates		941		—		(36	)		905
GNMA Certificates		2,801		42		—			2,843
	$	28,655	$	42	$	(553	)	$	28,144

	December 31, 2017
			Gross		Gross
	Amortized		Unrealized		Unrealized
	Cost		Gains		Losses			Fair Value
U.S. Government and Federal Agencies	$	24,911	$	—	$	(359	)	$	24,552
Mortgage-Backed Securities:
FHLMC Certificates		—		—		—			—
FNMA Certificates		1,118		—		(15	)		1,103
GNMA Certificates		3,205		38		(1	)		3,242
	$	29,234	$	38	$	(375	)	$	28,897

Company's Securities' Gross Unrealized Losses and Fair Values, Aggregated by Length of Time Individual Securities Have Been in a Continuous Unrealized Loss Position

The following tables present the Company's securities' gross unrealized losses and fair values, aggregated by the length of time the individual securities have been in a continuous unrealized loss position, at June 30, 2018 and at December 31, 2017:

	June 30, 2018
	(Unaudited)
	Securities With Gross Unrealized Losses
	Less Than 12 Months					12 Months or More					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Government and Federal Agencies	$	—	$	—		$	24,396	$	(517	)	$	24,396	$	(517	)
Mortgage-Backed
FHLMC Certificates		—		—			—		—			—		—
FNMA Certificates		903		(36	)		—		—			903		(36	)
GNMA Certificates		—		—			—		—			—		—
	$	903	$	(36	)	$	24,396	$	(517	)	$	25,299	$	(553	)

	December 31, 2017
	Securities With Gross Unrealized Losses
	Less Than 12 Months					12 Months or More					Total		Total
	Fair		Unrealized			Fair		Unrealized			Fair		Unrealized
	Value		Loss			Value		Loss			Value		Loss
U.S. Government and Federal Agencies	$	—	$	—		$	24,552	$	(359	)	$	24,552	$	(359	)
Mortgage-Backed
FHLMC Certificates		—		—			—		—			—		—
FNMA Certificates		1,094		(15	)		—		—			1,094		(15	)
GNMA Certificates		1,205		(1	)		—		—			1,205		(1	)
	$	2,299	$	(16	)	$	24,552	$	(359	)	$	26,851	$	(375	)

Summary of Maturities of Securities

The following is a summary of maturities of securities at June 30, 2018 and December 31, 2017. Amounts are shown by contractual maturity. Because borrowers for mortgage-backed securities have the right to prepay obligations with or without prepayment penalties, these securities are not included within the maturity summary.

	June 30, 2018
	Available-for-Sale
	(Unaudited)
	Amortized		Fair
	Cost		Value
U.S. Government and Federal Agency Securities:
Amounts maturing:
After three months through one year	$	3,990	$	3,963
After one year through five years		20,923		20,433
		24,913		24,396
Mortgage-Backed Securities		3,742		3,748
Total	$	28,655	$	28,144
	December 31, 2017
	Available-for-Sale
	Amortized		Fair
	Cost		Value
U.S. Government and Federal Agency Securities:
Amounts maturing:
After three months through one year	$	1,990	$	1,977
After one year through five years		22,921		22,575
		24,911		24,552
Mortgage-Backed Securities		4,323		4,345
Total	$	29,234	$	28,897

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Loans Receivable and Allowance for Loan Losses (Tables)

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Summary of Loans

Loans at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Mortgage loans:
1-4 family residences
Investor-Owned	$	296,490		$	287,158
Owner-Occupied		92,208			100,854
Multifamily residences		218,210			188,550
Nonresidential properties		168,788			151,193
Construction and land		72,574			67,240
Nonmortgage loans:
Business loans		11,698			12,873
Consumer loans		1,027			886
		860,995			808,754
Net deferred loan origination costs		1,182			1,020
Allowance for losses on loans		(11,751	)		(11,071	)
Loans, net	$	850,426		$	798,703

Schedule of Credit Risk Ratings by Loan Segment

The following tables present credit risk ratings by loan segment as of June 30, 2018 and December 31, 2017:

	June 30, 2018
	(Unaudited)
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
Risk Rating:
Pass	$	372,656	$	217,120	$	167,290	$	65,862	$	11,010	$	1,027	$	834,965
Special mention		6,107		1,090		464		—		688		—		8,349
Substandard		9,935		—		1,034		6,712		—		—		17,681
Doubtful		—		—		—		—		—		—		—
Total	$	388,698	$	218,210	$	168,788	$	72,574	$	11,698	$	1,027	$	860,995

	December 31, 2017
	Mortgage Loans								Nonmortgage Loans
							Construction						Total
	1-4 Family		Multifamily		Nonresidential		and Land		Business		Consumer		Loans
Risk Rating:
Pass	$	370,629	$	188,030	$	148,253	$	59,914	$	12,726	$	886	$	780,438
Special mention		4,667		—		—		650		—		—		5,317
Substandard		12,716		520		2,940		6,676		147		—		22,999
Doubtful		—		—		—		—		—		—		—
Total	$	388,012	$	188,550	$	151,193	$	67,240	$	12,873	$	886	$	808,754

Schedule of Aging Analysis of Loans

An aging analysis of loans, as of June 30, 2018 and December 31, 2017, is as follows:

	June 30, 2018
	(Unaudited)
			30-59		60-89		Over						Over
			Days		Days		90 Days				Nonaccrual		90 Days
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
Mortgages:
1-4 Family
Investor-Owned	$	296,138	$	—	$	352	$	—	$	296,490	$	1,307	$	—
Owner-Occupied		91,257		—		—		951		92,208		3,488		—
Multifamily		217,906		—		304		—		218,210		—		—
Nonresidential properties		167,902		—		403		483		168,788		748		—
Construction and land		72,574		—		—		—		72,574		1,111		—
Nonmortgage Loans:
Business		11,401		297		—		—		11,698		—		—
Consumer		1,027		—		—		—		1,027		—		—
Total	$	858,205	$	297	$	1,059	$	1,434	$	860,995	$	6,654	$	—

	December 31, 2017
			30-59		60-89		Over						Over
			Days		Days		90 Days				Nonaccrual		90 Days
	Current		Past Due		Past Due		Past Due		Total		Loans		Accruing
Mortgages:
1-4 Family
Investor-Owned	$	285,485	$	1,201	$	—	$	472	$	287,158	$	2,178	$	7
Owner-Occupied		96,878		585		—		3,391		100,854		5,317		—
Multifamily		188,504		46		—		—		188,550		521		—
Nonresidential properties		149,300		11		—		1,882		151,193		2,170		—
Construction and land		67,240		—		—		—		67,240		1,075		—
Nonmortgage Loans:
Business		12,583		239		—		51		12,873		147		—
Consumer		886		—		—		—		886		—		—
Total	$	800,876	$	2,082	$	—	$	5,796	$	808,754	$	11,408	$	7

Schedule of Composition of Allowance for Loan Losses and Related Recorded Investment

The following schedules detail the composition of the allowance for loan losses and the related recorded investment in loans as of June 30, 2018, 2017 and December 31, 2017:

	For the Six Months Ended June 30, 2018
	(Unaudited)
	Mortgage Loans												Nonmortgage Loans							Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer		Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,716		$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6	$	—	$	11,071
Provision charged to expense		(30	)		(312	)		531		250		86		(94	)		—		—		431
Losses charged-off		—			—			—		—		—		(18	)		—		—		(18	)
Recoveries		1			175			—		5		—		83			3		—		267
Balance, end of period	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9	$	—	$	11,751
Ending balance: individually    evaluated for impairment	$	310		$	297		$	—	$	36	$	—	$	—		$	—	$	—	$	643
Ending balance: collectively    evaluated for impairment		3,377			968			3,640		1,643		1,291		180			9		—		11,108
Unallocated		—			—			—		—		—		—			—		—		—
Total	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9	$	—	$	11,751
Loans:
Ending balance: individually    evaluated for impairment	$	7,014		$	7,399		$	—	$	2,207	$	1,111	$	421		$	—	$	—	$	18,152
Ending balance: collectively    evaluated for impairment		289,476			84,809			218,210		166,581		71,463		11,277			1,027		—		842,843
Total	$	296,490		$	92,208		$	218,210	$	168,788	$	72,574	$	11,698		$	1,027	$	—	$	860,995

	For the Three Months Ended June 30, 2018
	(Unaudited)
	Mortgage Loans												Nonmortgage Loans								Total
	1-4 Family Investor Owned			1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,689		$	1,370		$	3,385	$	1,517	$	1,212	$	228		$	8		$	—	$	11,409
Provision charged to expense		(3	)		(107	)		255		160		79		(46	)		(1	)		—		337
Losses charged-off		—			—			—		—		—		(13	)		—			—		(13	)
Recoveries		1			2			—		2		—		11			2			—		18
Balance, end of period	$	3,687		$	1,265		$	3,640	$	1,679	$	1,291	$	180		$	9		$	—	$	11,751

	For the Six Months Ended June 30, 2017
	(Unaudited)
	Mortgage Loans											Nonmortgage Loans								Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,147	$	1,804		$	2,705	$	1,320	$	615	$	597		$	17		$	—	$	10,205
Provision charged to expense		379		(321	)		282		414		138		(619	)		(14	)		—		259
Losses charged-off		—		—			—		—		—		(34	)		—			—		(34	)
Recoveries		10		—			1		5		—		204			5			—		225
Balance, end of period	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—	$	10,655
Ending balance: individually    evaluated for impairment	$	524	$	401		$	—	$	258	$	—	$	—		$	—		$	—	$	1,183
Ending balance: collectively    evaluated for impairment		3,012		1,082			2,988		1,481		753		148			8			—		9,472
Unallocated		—		—			—		—		—		—			—			—		—
Total	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—	$	10,655
Loans:
Ending balance: individually    evaluated for impairment	$	8,869	$	8,712		$	—	$	5,661	$	1,008	$	529		$	—		$	—	$	24,779
Ending balance: collectively    evaluated for impairment		248,120		91,189			172,167		150,009		41,108		14,125			850			—		717,568
Total	$	256,989	$	99,901		$	172,167	$	155,670	$	42,116	$	14,654		$	850		$	—	$	742,347

	For the Three Months Ended June 30, 2017
	(Unaudited)
	Mortgage Loans											Nonmortgage Loans									Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated			For the Period
Allowances for loan losses:
Balance, beginning of period	$	3,181	$	1,729		$	2,800	$	1,568	$	672	$	115		$	9		$	296		$	10,370
Provision charged to expense		350		(246	)		188		169		81		(33	)		(6	)		(296	)		207
Losses charged-off		—		—			—		—		—		(24	)		—			—			(24	)
Recoveries		5		—			—		2		—		90			5			—			102
Balance, end of period	$	3,536	$	1,483		$	2,988	$	1,739	$	753	$	148		$	8		$	—		$	10,655

	For the Year Ended December 31, 2017
	Mortgage Loans											Nonmortgage Loans								Total
	1-4 Family Investor Owned		1-4 Family Owner Occupied			Multifamily		Nonresidential		Construction and Land		Business			Consumer			Unallocated		For the Period
Allowances for loan losses:
Balance, beginning of year	$	3,147	$	1,804		$	2,705	$	1,320	$	615	$	597		$	17		$	—	$	10,205
Provision charged to expense		544		(578	)		402		95		588		676			(11	)		—		1,716
Losses charged-off		—		—			—		—		—		(1,423	)		(6	)		—		(1,429	)
Recoveries		25		176			2		9		2		359			6			—		579
Balance, end of year	$	3,716	$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6		$	—	$	11,071
Ending balance: individually    evaluated for impairment	$	506	$	375		$	—	$	39	$	—	$	2		$	—		$	—	$	922
Ending balance: collectively    evaluated for impairment		3,210		1,027			3,109		1,385		1,205		207			6			—		10,149
Unallocated		—		—			—		—		—		—			—			—		—
Total	$	3,716	$	1,402		$	3,109	$	1,424	$	1,205	$	209		$	6		$	—	$	11,071
Loans:
Ending balance: individually    evaluated for impairment	$	8,738	$	10,074		$	520	$	4,128	$	1,075	$	625		$	—		$	—	$	25,160
Ending balance: collectively    evaluated for impairment		278,420		90,780			188,030		147,065		66,165		12,248			886			—		783,594
Total	$	287,158	$	100,854		$	188,550	$	151,193	$	67,240	$	12,873		$	886		$	—	$	808,754

Schedule of Information Relates to Impaired Loans

The following information relates to impaired loans as of and for the six months ended June 30, 2018 and 2017 and for the year ended December 31, 2017:

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
For the Six Months Ended June 30, 2018	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
(Unaudited)
Mortgages:
1-4 Family	$	15,597	$	7,787	$	6,626	$	14,413	$	607	$	17,101	$	371
Multifamily		—		—		—		—		—		104		—
Nonresidential properties		2,421		1,719		488		2,207		36		3,753		71
Construction and land		1,321		1,111		—		1,111		—		1,073		—
Nonmortgage Loans:
Business		464		421		—		421		—		515		12
Consumer		—		—		—		—		—		—		—
Total	$	19,803	$	11,038	$	7,114	$	18,152	$	643	$	22,546	$	454
	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
For the Six Months Ended June 30, 2017	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
(Unaudited)
Mortgages:
1-4 Family	$	18,941	$	8,346	$	9,235	$	17,581	$	925	$	18,201	$	422
Multifamily		—		—		—		—		—		—		—
Nonresidential properties		6,317		3,134		2,527		5,661		258		6,319		141
Construction and land		1,124		1,008		—		1,008		—		1,028		—
Nonmortgage Loans:
Business		571		529		—		529		—		612		8
Consumer		—		—		—		—		—		—		—
Total	$	26,953	$	13,017	$	11,762	$	24,779	$	1,183	$	26,160	$	571

	Unpaid Contractual		Recorded Investment		Recorded Investment		Total				Average		Interest Income
	Principal		With No		With		Recorded		Related		Recorded		Recognized
December 31, 2017	Balance		Allowance		Allowance		Investment		Allowance		Investment		on Cash Basis
Mortgages:
1-4 Family	$	20,036	$	10,651	$	8,161	$	18,812	$	506	$	18,512	$	890
Multifamily		533		520		—		520		375		166		—
Nonresidential properties		4,729		3,633		495		4,128		—		5,231		166
Construction and land		1,233		1,075		—		1,075		39		1,042		—
Nonmortgage Loans:
Business		667		529		96		625		2		594		24
Consumer		—		—		—		—		—		—		—
Total	$	27,198	$	16,408	$	8,752	$	25,160	$	922	$	25,545	$	1,080

Schedule of Troubled Debt Restructuring

As of and for the six months ended June 30, 2018, there were no loans restructured as a TDR. As of and for the year ended December 31, 2017, there was one loan restructured as a TDR.

	Loans Restructured During						All TDRs with a payment default within 12 months following the
	Six Months Ended June 30, 2018 (Unaudited)						modification (Unaudited)
			Pre-		Post-				Balance
			Modification		Modification				of Loans
	Number		Recorded		Recorded		Number		at the Time
	of Loans		Balance		Balance		of Loans		of Default
Mortgages:
1-4 Family		—	$	—	$	—		1	$	175
Total		—	$	—	$	—		1	$	175
Combination of rate, maturity, other		—	$	—	$	—		1	$	175
Total		—	$	—	$	—		1	$	175

	Loans Restructured During						All TDRs with a payment default within 12 months following the
	Year Ended December 31, 2017						modification
			Pre-		Post-				Balance
			Modification		Modification				of Loans
	Number		Recorded		Recorded		Number		at the Time
	of Loans		Balance		Balance		of Loans		of Default
Mortgages:
1-4 Family		1	$	176	$	176		—	$	—
Total		1	$	176	$	176		—	$	—
Combination of rate, maturity, other		1	$	176	$	176		—	$	—
Total		1	$	176	$	176		—	$	—

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Premises and Equipment (Tables)

6 Months Ended

Jun. 30, 2018

Property Plant And Equipment [Abstract]

Summary of Premises and Equipment

A summary of premises and equipment at June 30, 2018 and December 31, 2017 is as follows:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Land	$	3,979		$	3,979
Buildings and improvements		15,972			15,972
Leasehold improvements		21,790			20,973
Furniture, fixtures and equipment		6,106			4,875
		47,847			45,799
Less accumulated depreciation and amortization		(19,481	)		(18,627	)
	$	28,366		$	27,172

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Deposits (Tables)

6 Months Ended

Jun. 30, 2018

Banking And Thrift [Abstract]

Summarized Deposits

Deposits at June 30, 2018 and December 31, 2017 are summarized as follows:

	June 30,		December 31,
	2018		2017
	(Unaudited)
Demand	$	108,550	$	103,001
Interest-bearing deposits:
NOW/IOLA accounts		26,711		27,758
Money market accounts		58,612		46,497
Savings accounts		124,578		126,668
Total savings, NOW and money market		209,901		200,923
Certificates of deposit of $250K or more		82,928		80,300
All other certificates of deposit		351,876		329,761
Total certificates of deposit		434,804		410,061
Total interest-bearing deposits		644,705		610,984
Total deposits	$	753,255	$	713,985

Scheduled Maturities of Certificates of Deposit

At June 30, 2018, scheduled maturities of certificates of deposit were as follows:

June 30,
2019	$	186,319
2020		88,075
2021		88,164
2022		60,493
2023		11,753
	$	434,804

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Borrowings (Tables)

6 Months Ended

Jun. 30, 2018

Debt Disclosure [Abstract]

Schedule of Borrowed Funds Maturity and Call Date

Borrowed funds at June 30, 2018 and December 31, 2017 consist of the following and are summarized by maturity and call date below:

	June 30,							December 31,
	2018 (Unaudited)							2017
	Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate			Scheduled Maturity		Redeemable at Call Date		Weighted Average Rate
Correspondent Bank Overnight line of credit    advance	$	—	$	—		—	%	$	20,000	$	20,000		1.64	%
FHLB Term advances ending June 30:
2020		1,400		1,400		2.11			1,400		1,400		2.11
2021		3,000		3,000		1.84			3,000		3,000		1.84
2022		5,000		5,000		1.97			5,000		5,000		1.97
2023		28,375		28,375		2.82			7,000		7,000		2.12
	$	37,775	$	37,775		2.60	%	$	36,400	$	36,400		1.81	%

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Income Taxes (Tables)

6 Months Ended

Jun. 30, 2018

Income Tax Disclosure [Abstract]

Schedule of Components of Income Tax Expense (Benefit)

The provision (benefit) for income taxes for the three and six months ended June 30, 2018 and 2017 consists of the following:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Federal:
Current	$	110		$	624		$	195		$	881
Deferred		60			23			190			132
		170			647			385			1,013
State and local:
Current		48			56			121			102
Deferred		(252	)		(181	)		(356	)		(380	)
		(204	)		(125	)		(235	)		(278	)
Changes in valuation allowance		200			119			284			251
Provision for income taxes	$	166		$	641		$	434		$	986

Schedule of Reconciliation of Differences Between Federal Income Tax Rate and Total Income Tax Expense

Total income tax expense differed from the amounts computed by applying the U.S. federal income tax rate of 21% and 34% for the three and six months ended June 30, 2018 and 2017, respectively, to income before income taxes as a result of the following:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Income tax, at federal rate	$	182		$	600		$	436		$	909
State and local tax, net of federal taxes		(160	)		(91	)		(185	)		(174	)
Valuation allowance, net of the federal benefit		200			132			284			251
Other		(56	)		—			(101	)		—
	$	166		$	641		$	434		$	986

Schedule of Significant Deferred Tax Assets and Liabilities

The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities at June 30, 2018 and December 31, 2017 are presented below:

	AtJune 30,		At December 31,
	2018		2017
	(Unaudited)
Deferred tax assets:
Allowance for losses on loans	$	3,639	$	3,444
Pension obligations		2,424		2,402
Interest on nonaccrual loans		46		415
Unrealized loss on available-for-sale securities		64		72
Amortization of intangible assets		111		120
Deferred rent payable		170		194
Net operating losses		2,809		2,444
Charitable contribution carryforward		1,772		1,840
Other		253		162
Total gross deferred tax assets		11,288		11,093
Deferred tax liabilities:
Cumulative contribution in excess of net periodic    benefit costs, net		3,113		3,134
Depreciation and amortization of premises and equipment		601		601
Deferred loan fees		366		317
Other		5		18
Total gross deferred tax liabilities		4,085		4,070
Valuation allowance		3,398		3,114
Net deferred tax assets	$	3,805	$	3,909

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Compensation and Benefit Plans (Tables)

6 Months Ended

Jun. 30, 2018

Compensation And Retirement Disclosure [Abstract]

Summary Of Pension Plan Funded Status and Amounts Recognized in Financial Condition Statements

The following table sets forth the Old Pension Plan’s funded status and amounts recognized in the consolidated statements of financial condition as of June 30, 2018 and December 31, 2017 using a measurement date as of June 30, 2018 and December 31, 2017, respectively:

	June 30, 2018			December 31, 2017
	(Unaudited)
Projected benefit obligation	$	(15,802	)	$	(15,883	)
Fair value of plan assets		14,564			14,732
Funded status	$	(1,238	)	$	(1,151	)
Accumulated benefit obligation	$	(15,802	)	$	(15,883	)
	June 30, 2018			December 31, 2017
	(Unaudited)
Changes in benefit obligation:
Beginning of period	$	15,883		$	14,142
Service cost		20			39
Interest cost		271			581
2017 interest rate change		—			1,338
2017 mortality change		—			1,906
(Gain)/ Loss		3			(1,345	)
Administrative cost		(20	)		(39	)
Benefits paid		(355	)		(739	)
End of period	$	15,802		$	15,883

	June 30, 2018				December 31, 2017
	(Unaudited)
Changes in plan assets:
Fair value of plan assets, beginning of period	$	14,732		$		15,038
Actual return on plan assets		207				472
Employer contributions		—				—
Plan participant contributions		—				—
Benefits paid		(355	)			(739	)
Administrative expenses paid		(20	)			(39	)
Fair value of plan assets, end of period	$	14,564		$		14,732

Benefit Costs Pretax Amounts Recognized in Accumulated Other Comprehensive Loss

Pretax amounts recognized in accumulated other comprehensive loss, which will be amortized into net periodic benefit cost over the coming years, consisted of the following components at June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Net loss	$	(11,288	)	$	(11,224	)

Components of Net Periodic Benefit Cost

The components of net periodic benefit cost are as follows for the six months ended June 30, 2018 and 2017:

	For the Six Months Ended June 30,
	2018			2017
	(Unaudited)
Service cost	$	20		$	20
Interest cost		271			291
Expected return on plan assets		(430	)		(420	)
Amortization of prior service cost		13			13
Amortization of (gain)/loss		149			117
Net periodic benefit cost	$	23		$	21

Weighted Average Assumptions Used to Determine Net Benefit Obligations

Weighted-average assumptions used to determine the net benefit obligations consisted of the following as of June 30, 2018 and December 31, 2017:

	June 30,			December 31,
	2018			2017
	(Unaudited)
Discount rate		3.50	%		3.50	%
Rate of compensation increase		0.00	%		0.00	%

Weighted Average Assumptions Used to Determine Net Benefit Cost

Weighted-average assumptions used to determine the net benefit cost consisted of the following for the six months ended June 30, 2018 and 2017:

	June 30,			June 30,
	2018			2017
	(Unaudited)
Discount rate		3.50	%		4.25	%
Rate of compensation increase		0.00	%		0.00	%
Expected long-term rate of return on assets		6.00	%		6.00	%

Employer Contributions and Benefit Payments

Employer contributions and benefit payments for the six months ended June 30, 2018 and 2017 are as follows:

	June 30,		June 30,
	2018		2017
	(Unaudited)
Employer contributions	$	—	$	—
Benefits paid	$	355	$	184

Expected Employee Benefit Payments

Employee benefit payments expected to be paid in the future are as follows:

As of  June 30, 2018
2018	$	380
2019		736
2020		714
2021		695
2022		700
Thereafter		3,307
	$	6,532

Summary of ESOP Shares

A summary of the ESOP shares is as follows:

	June 30, 2018		December 31, 2017
	(Unaudited)
Shares committed-to-be released		24,126		48,250
Shares to be allocated to participants		48,250		—
Unallocated shares		651,375		675,501
Total		723,751		723,751
Fair value of unearned shares	$	10,233	$	10,254

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2018

Earnings Per Share [Abstract]

Schedule of Reconciliation of Number of Shares Used in Calculation of Basic and Diluted Earnings Per Common Share

The following table presents a reconciliation of the number of shares used in the calculation of basic and diluted earnings per common share:

	For the Three Months Ended June 30, 2018		For the Six Months Ended June 30, 2018
	(Unaudited)
Net income for the period	$	699	$	1,640
Shares Outstanding for basic EPS:
Weighted average shares outstanding:		18,463,028		18,463,028
Less: Weighted average unallocated Employee Stock Ownership    Plan (ESOP) shares:		663,305		687,607
Basic weighted shares outstanding		17,799,723		17,775,421
Basic earnings per share	$	0.04	$	0.09
Dilutive potential common shares:		—		—
Diluted weighted average shares outstanding		17,799,723		17,775,421
Diluted earnings per share	$	0.04	$	0.09

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Commitments, Contingencies and Credit Risk (Tables)

6 Months Ended

Jun. 30, 2018

Commitments And Contingencies Disclosure [Abstract]

Financial Instruments Whose Contractual Amounts Represent Credit Risk

Financial instruments whose contractual amounts represent credit risk at June 30, 2018 and December 31, 2017 are as follows:

	June 30,		December 31,
	2018		2017
	(Unaudited)
Commitments to grant mortgage loans	$	54,677	$	54,423
Unfunded commitments under lines of credit		43,247		33,641
Standby letters of credit		4,424		6,734
	$	102,348	$	94,798

Projected Minimum Rental Payments under Terms of Leases

Note 11. Commitments, Contingencies and Credit Risk (Continued)

The projected minimum rental payments under the terms of the leases at June 30, 2018 are as follows:

	June 30,
	(Unaudited)
2018	$	682
2019		1,076
2020		1,107
2021		1,140
2022		1,043
Thereafter		6,671
	$	11,719

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Fair Value (Tables)

6 Months Ended

Jun. 30, 2018

Fair Value Disclosures [Abstract]

Assets Measured at Fair Value on Recurring Basis

The following tables detail the assets that are carried at fair value and measured at fair value on a recurring basis as of June 30, 2018 and December 31, 2017, and indicate the level within the fair value hierarchy utilized to determine the fair value:

			June 30, 2018
					(Unaudited)
Description	Total		Level 1		Level 2		Level 3
Available-for-Sale Securities:
U.S. government and federal agencies	$	24,396	$	—	$	24,396	$	—
Mortgage-Backed Securities:
FNMA Certificates		905		—		905		—
GNMA Certificates		2,843		—		2,843		—
	$	28,144	$	—	$	28,144	$	—

			December 31, 2017
Description	Total		Level 1		Level 2		Level 3
Available-for-Sale Securities:
U.S. government and federal agencies	$	24,552	$	—	$	24,552	$	—
Mortgage-Backed Securities:
FNMA Certificates		1,103		—		1,103		—
GNMA Certificates		3,242		—		3,242		—
	$	28,897	$	—	$	28,897	$	—

Assets Measured at Fair Value on Nonrecurring Basis

Our assessment and classification of an investment within a level can change over time based upon maturity or liquidity of the investment and would be reflected at the beginning of the quarter in which the change occurred.

The following tables detail the assets carried at fair value and measured at fair value on a nonrecurring basis as of June 30, 2018 and December 31, 2017 and indicate the fair value hierarchy utilized to determine the fair value:

	June 30, 2018
	(Unaudited)
	Total		Level 1		Level 2		Level 3
Impaired loans	$	18,152	$	—	$	—	$	18,152
Loans held for sale	$	—	$	—	$	—	$	—
Other real estate owned	$	—	$	—	$	—	$	—

	December 31, 2017
	Total		Level 1		Level 2		Level 3
Impaired loans	$	25,160	$	—	$	—	$	25,160
Loans held for sale	$	—	$	—	$	—	$	—
Other real estate owned	$	—	$	—	$	—	$	—

Estimated Fair Values of Financial Instruments

Note 12. Fair Value (Continued)

As of June 30, 2018 and December 31, 2017, the book balances and estimated fair values of the Company's financial instruments were as follows:

	Carrying		Fair Value Measurements
	Amount		Level 1		Level 2		Level 3		Total
June 30, 2018 (Unaudited)
Financial assets:
Cash and cash equivalents	$	49,182	$	49,182	$	—	$	—	$	49,182
Investment securities		28,144		—		28,144		—		28,144
Loans held for sale		—		—		—		—		—
Loans receivable, net		850,426		—		—		857,229		857,229
Accrued interest receivable		3,350		—		3,350		—		3,350
FHLB stock		2,617		2,617		—		—		2,617
Pension plan asset		14,566		—		—		14,565		14,565
Financial liabilities:
Deposits:
Demand deposits		108,550		108,550		—		—		108,550
Interest-bearing deposits		209,901		209,901		—		—		209,901
Certificates of deposit		434,804		—		436,474		—		436,474
Advance payments by borrowers for taxes and insurance		5,491		—		5,491		—		5,491
Advances from FHLB		37,775		37,775		—		—		37,775
Accrued interest payable		141		—		141		—		141
December 31, 2017
Financial assets:
Cash and cash equivalents	$	59,724	$	59,724	$	—	$	—	$	59,724
Investment securities		28,897		—		28,897		—		28,897
Loans held for sale		—		—		—		—		—
Loans receivable, net		798,703		—		—		813,160		813,160
Accrued interest receivable		3,335		—		3,335		—		3,335
FHLB stock		1,511		1,511		—		—		1,511
Pension plan asset		14,735		—		—		14,696		14,696
Financial liabilities:
Deposits:
Demand deposits		103,001		103,001		—		—		103,001
Interest-bearing deposits		200,923		200,923		—		—		200,923
Certificates of deposit		410,061		—		414,902		—		414,902
Advance payments by borrowers for taxes and insurance		5,025		—		5,025		—		5,025
Advances from FHLB		36,400		36,400		—		—		36,400
Accrued interest payable		42		—		42		—		42

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Regulatory Capital Requirements (Tables)

6 Months Ended

Jun. 30, 2018

Banking And Thrift [Abstract]

Summary of Bank's Actual Capital Amounts and Ratios As Compared to Regulatory Requirements

The Company's and the Bank’s actual capital amounts and ratios as of June 30, 2018 and December 31, 2017 as compared to regulatory requirements are as follows:

											To Be Well
											Capitalized Under
						For Capital					Prompt Corrective
	Actual					Adequacy Purposes					Action Provisions
	Amount		Ratio			Amount		Ratio			Amount		Ratio
June 30, 2018 (Unaudited)
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	183,624		25.47	%	$	57,676		8.00	%	$	72,095		10.00	%
Tier 1 Capital to Risk-Weighted Assets		174,574		24.21	%		43,257		6.00	%		57,676		8.00	%
Common Equity Tier 1 Capital Ratio		174,574		24.21	%		32,443		4.50	%		46,861		6.50	%
Tier 1 Capital to Total Assets		174,574		18.07	%		38,639		4.00	%		48,299		5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	144,379		20.07	%	$	57,550		8.00	%	$	71,938		10.00	%
Tier 1 Capital to Risk-Weighted Assets		135,349		18.81	%		43,163		6.00	%		57,550		8.00	%
Common Equity Tier 1 Capital Ratio		135,349		18.81	%		32,372		4.50	%		46,760		6.50	%
Tier 1 Capital to Total Assets		135,349		14.03	%		38,591		4.00	%		48,239		5.00	%

Note 13. Regulatory Capital Requirements (Continued)

December 31, 2017
PDL Community Bancorp
Total Capital to Risk-Weighted Assets	$	181,196	26.57	%	$	54,557	8.00	%	$	68,196	10.00	%
Tier 1 Capital to Risk-Weighted Assets		172,603	25.31	%		40,917	6.00	%		54,557	8.00	%
Common Equity Tier 1 Capital Ratio		172,603	25.31	%		30,688	4.50	%		44,327	6.50	%
Tier 1 Capital to Total Assets		172,603	20.02	%		34,501	4.00	%		43,127	5.00	%
Ponce Bank
Total Capital to Risk-Weighted Assets	$	141,120	20.73	%	$	54,447	8.00	%	$	68,059	10.00	%
Tier 1 Capital to Risk-Weighted Assets		132,577	19.48	%		40,835	6.00	%		54,447	8.00	%
Common Equity Tier 1 Capital Ratio		132,577	19.48	%		30,626	4.50	%		44,238	6.50	%
Tier 1 Capital to Total Assets		132,577	14.67	%		36,152	4.00	%		45,190	5.00	%

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Accumulated Other Comprehensive Income (Loss) (Tables)

6 Months Ended

Jun. 30, 2018

Equity [Abstract]

Components of Accumulated Other Comprehensive Income (Loss)

The components of accumulated other comprehensive income (loss) are as follows:

	June 30, 2018
	(Unaudited)
	December 31, 2017			Change			June 30, 2018
Unrealized gains (losses) on securities available for sale, net	$	(221	)	$	(182	)	$	(403	)
Unrealized losses on pension benefits, net		(7,630	)		(43	)		(7,673	)
Total	$	(7,851	)	$	(225	)	$	(8,076	)

	December 31, 2017
	December 31, 2016			Change			December 31, 2017
Unrealized gains (losses) on securities available for sale, net	$	(166	)	$	(55	)	$	(221	)
Unrealized gains (losses) on pension benefits, net		(6,084	)		(1,546	)		(7,630	)
Total	$	(6,250	)	$	(1,601	)	$	(7,851	)

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Transactions With Related Parties (Tables)

6 Months Ended

Jun. 30, 2018

Receivables [Abstract]

Schedule of Aggregate Loan Transactions with Related Parties

Aggregate loan transactions with related parties for the three and six months ended June 30, 2018 were as follows:

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(Unaudited)						(Unaudited)
Beginning balance	$	1,329		$	1,540		$	1,351		$	1,573
Originations		100			—			111			—
Payments		(33	)		(31	)		(66	)		(64	)
Ending balance	$	1,396		$	1,509		$	1,396		$	1,509

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Nature of Business and Summary of Significant Accounting Policies - Additional Information (Details) $ / shares in Units, $ in Thousands		6 Months Ended
	Sep. 29, 2017 $ / shares shares	Jun. 30, 2018 USD ($) BranchOffice Segment BranchLease shares	Dec. 31, 2017 USD ($) shares
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Common stock, shares, outstanding		18,463,028	18,463,028
Ownership percentage		100.00%
Number of branch offices | BranchOffice		13
Minimum collection percentage of securities required to be considered as a maturity		85.00%
Period of historical loss experience to estimate allowance for loan losses		36 months
Percentage of largest amount of tax benefits likely to realize		50.00%
Liabilities recorded for uncertainty tax position | $		$ 0	$ 0
Number of reportable operating segment | Segment		1
Number of leases branches | BranchLease		6
Commercial Real Estate Portfolio Segment
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Period on which interest rate is adjusted		5 years
Minimum
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Percentage of loan to value ratio		65.00%
Minimum | Construction Loans
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Loan term		6 months
Minimum | Commercial Real Estate Portfolio Segment
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Loan amortization period		15 years
Balloon payments period of loan		10 years
Minimum | Commercial Portfolio Segment
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Loan term		5 years
Maximum
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Percentage of loan to value ratio		90.00%
Maximum | Construction Loans
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Loan term		2 years
Maximum | Commercial Real Estate Portfolio Segment
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Percentage of loan to value ratio		75.00%
Loan amortization period		30 years
Balloon payments period of loan		15 years
Maximum | Commercial Portfolio Segment
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Loan term		7 years
Common Stock
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Number of shares sold	8,308,362
Common stock price, per share | $ / shares	$ 10.00
Shares purchased under employee stock ownership plan	723,751
Common stock, shares, outstanding	18,463,028
Stock offering costs | $		$ 4,988
Common Stock | Ponce Bank Mutual Holding Company
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Number of shares sold	9,545,387
Common Stock | Ponce De Leon Foundation
Nature Of Business And Summary Of Significant Accounting Policies Table Of Statement [Line Items]
Number of shares sold	609,279

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Nature of Business and Summary of Significant Accounting Policies - Estimated Useful Lives of Assets (Details)	6 Months Ended
	Jun. 30, 2018
Building
Property Plant And Equipment [Line Items]
Estimated useful lives of assets	39 years
Minimum | Building Improvements
Property Plant And Equipment [Line Items]
Estimated useful lives of assets	15 years
Minimum | Furniture, Fixtures and Equipment
Property Plant And Equipment [Line Items]
Estimated useful lives of assets	3 years
Maximum | Building Improvements
Property Plant And Equipment [Line Items]
Estimated useful lives of assets	39 years
Maximum | Furniture, Fixtures and Equipment
Property Plant And Equipment [Line Items]
Estimated useful lives of assets	10 years

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Restrictions on Cash and Due From Banks - Additional Information (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Cash And Cash Equivalents [Abstract]
Restricted cash	$ 6,819	$ 24,334
Required reserve balances in cash or on deposit with the Federal Reserve Bank	$ 6,466	$ 23,870

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Available-for-Sale Securities - Amortized Cost, Gross Unrealized Gains and Losses, and Fair Value of Available-for-Sale Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	$ 28,655	$ 29,234
Gross Unrealized Gains	42	38
Gross Unrealized Losses	(553)	(375)
Fair Value	28,144	28,897
U.S. Government and Federal Agencies
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	24,913	24,911
Gross Unrealized Losses	(517)	(359)
Fair Value	24,396	24,552
FNMA Certificates
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	941	1,118
Gross Unrealized Losses	(36)	(15)
Fair Value	905	1,103
GNMA Certificates
Schedule Of Available For Sale Securities [Line Items]
Amortized Cost	2,801	3,205
Gross Unrealized Gains	42	38
Gross Unrealized Losses		(1)
Fair Value	$ 2,843	$ 3,242

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Available-for-Sale Securities - Additional Information (Details)	3 Months Ended		6 Months Ended
	Jun. 30, 2018 USD ($) Investment	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Investment	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($) Investment
Investments Debt And Equity Securities [Abstract]
Held to maturity	$ 0		$ 0		$ 0
Sale of available-for-sale securities	$ 0	$ 0	$ 0	$ 0
Number of investment securities | Investment	33		33		33
Number of investment securities not other than temporary | Investment	13		13		13
Securities pledged	$ 0		$ 0		$ 0

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Available-for-Sale Securities - Company's Securities' Gross Unrealized Losses and Fair Values, Aggregated by Length of Time Individual Securities Have Been in a Continuous Unrealized Loss Position (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule Of Available For Sale Securities [Line Items]
Securities With Gross Unrealized Losses Less Than 12 Months, Fair Value	$ 903	$ 2,299
Securities With Gross Unrealized Losses Less Than 12 Months, Unrealized Loss	(36)	(16)
Securities With Gross Unrealized Losses 12 Months or More, Fair Value	24,396	24,552
Securities With Gross Unrealized Losses 12 Months or More, Unrealized Loss	(517)	(359)
Securities With Gross Unrealized Losses, Total Fair Value	25,299	26,851
Securities With Gross Unrealized Losses, Total Unrealized Loss	(553)	(375)
U.S. Government and Federal Agencies
Schedule Of Available For Sale Securities [Line Items]
Securities With Gross Unrealized Losses 12 Months or More, Fair Value	24,396	24,552
Securities With Gross Unrealized Losses 12 Months or More, Unrealized Loss	(517)	(359)
Securities With Gross Unrealized Losses, Total Fair Value	24,396	24,552
Securities With Gross Unrealized Losses, Total Unrealized Loss	(517)	(359)
FNMA Certificates
Schedule Of Available For Sale Securities [Line Items]
Securities With Gross Unrealized Losses Less Than 12 Months, Fair Value	903	1,094
Securities With Gross Unrealized Losses Less Than 12 Months, Unrealized Loss	(36)	(15)
Securities With Gross Unrealized Losses, Total Fair Value	903	1,094
Securities With Gross Unrealized Losses, Total Unrealized Loss	$ (36)	(15)
GNMA Certificates
Schedule Of Available For Sale Securities [Line Items]
Securities With Gross Unrealized Losses Less Than 12 Months, Fair Value		1,205
Securities With Gross Unrealized Losses Less Than 12 Months, Unrealized Loss		(1)
Securities With Gross Unrealized Losses, Total Fair Value		1,205
Securities With Gross Unrealized Losses, Total Unrealized Loss		$ (1)

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Available-for-Sale Securities - Summary of Maturities of Securities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Schedule Of Available For Sale Securities [Line Items]
Available-for-Sale Securities, Amortized Cost	$ 28,655	$ 29,234
Available-for-Sale Securities, Fair Value	28,144	28,897
U.S. Government and Federal Agencies
Schedule Of Available For Sale Securities [Line Items]
Available-for-Sale Securities After three months through one year, Amortized Cost	3,990	1,990
Available-for-Sale Securities After one year through five years, Amortized Cost	20,923	22,921
Available-for-Sale Securities, Amortized Cost	24,913	24,911
Available-for-Sale Securities After three months through one year, Fair Value	3,963	1,977
Available-for-Sale Securities After one year through five years, Fair Value	20,433	22,575
Available-for-Sale Securities, Fair Value	24,396	24,552
Mortgage-Backed Securities
Schedule Of Available For Sale Securities [Line Items]
Available-for-Sale Securities, Amortized Cost	3,742	4,323
Available-for-Sale Securities, Fair Value	$ 3,748	$ 4,345

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Summary of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	$ 860,995	$ 808,754
Net deferred loan origination costs	1,182	1,020
Allowance for losses on loans	(11,751)	(11,071)
Loans, net	850,426	798,703
1-4 Family Residences Investor-Owned
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	296,490	287,158
1-4 Family Residences Owner-Occupied
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	92,208	100,854
Multifamily Residences
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	218,210	188,550
Nonresidential Properties
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	168,788	151,193
Construction and Land
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	72,574	67,240
Business
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	11,698	12,873
Consumer Loans
Financing Receivable Recorded Investment Past Due [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	$ 1,027	$ 886

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Loans Receivable and Allowance for Loan Losses - Additional Information (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($) Loan	Dec. 31, 2017 USD ($) Loan	Jun. 30, 2017 USD ($)
Accounts Notes And Loans Receivable [Line Items]
Restructured loans | Loan	0	1
Number of troubled debt restructured loans, included in impaired loans | Loan	43	49
Impaired loans	$ 18,152	$ 25,160	$ 24,779
Impairment reserves	643	922	$ 1,183
Troubled Debt Restructured Loans
Accounts Notes And Loans Receivable [Line Items]
Impaired loans	15,210	18,371
Impairment reserves	$ 643	$ 921
Maximum
Accounts Notes And Loans Receivable [Line Items]
Creditworthiness of each customer to the market value of the collateral at the date of the credit extension percentage	75.00%
Minimum
Accounts Notes And Loans Receivable [Line Items]
Strong Pass Loans to new or existing borrowers collateralized percentage	90.00%

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Credit Risk Ratings by Loan Segment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	$ 860,995	$ 808,754
1-4 Family
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	388,698	388,012
Multifamily
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	218,210	188,550
Nonresidential
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	168,788	151,193
Construction and Land
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	72,574	67,240
Business
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	11,698	12,873
Consumer
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	1,027	886
Pass
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	834,965	780,438
Pass | 1-4 Family
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	372,656	370,629
Pass | Multifamily
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	217,120	188,030
Pass | Nonresidential
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	167,290	148,253
Pass | Construction and Land
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	65,862	59,914
Pass | Business
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	11,010	12,726
Pass | Consumer
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	1,027	886
Special Mention
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	8,349	5,317
Special Mention | 1-4 Family
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	6,107	4,667
Special Mention | Multifamily
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	1,090
Special Mention | Nonresidential
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	464
Special Mention | Construction and Land
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan		650
Special Mention | Business
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	688
Substandard
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	17,681	22,999
Substandard | 1-4 Family
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	9,935	12,716
Substandard | Multifamily
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan		520
Substandard | Nonresidential
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	1,034	2,940
Substandard | Construction and Land
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan	$ 6,712	6,676
Substandard | Business
Financing Receivable Recorded Investment [Line Items]
Loans before net deferred loan origination cost and allowance for losses on loan		$ 147

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Aging Analysis of Loans (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Financing Receivable Recorded Investment Past Due [Line Items]
Current	$ 858,205	$ 800,876
Total Past Due	860,995	808,754
Nonaccrual Loans	6,654	11,408
Over 90 days Accruing		7
1-4 Family Residences Investor-Owned
Financing Receivable Recorded Investment Past Due [Line Items]
Current	296,138	285,485
Total Past Due	296,490	287,158
Nonaccrual Loans	1,307	2,178
Over 90 days Accruing		7
1-4 Family Owner Occupied
Financing Receivable Recorded Investment Past Due [Line Items]
Current	91,257	96,878
Total Past Due	92,208	100,854
Nonaccrual Loans	3,488	5,317
Multifamily
Financing Receivable Recorded Investment Past Due [Line Items]
Current	217,906	188,504
Total Past Due	218,210	188,550
Nonaccrual Loans		521
Nonresidential
Financing Receivable Recorded Investment Past Due [Line Items]
Current	167,902	149,300
Total Past Due	168,788	151,193
Nonaccrual Loans	748	2,170
Construction and Land
Financing Receivable Recorded Investment Past Due [Line Items]
Current	72,574	67,240
Total Past Due	72,574	67,240
Nonaccrual Loans	1,111	1,075
Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	297	2,082
Financing Receivables, 30 to 59 Days Past Due | 1-4 Family Residences Investor-Owned
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		1,201
Financing Receivables, 30 to 59 Days Past Due | 1-4 Family Owner Occupied
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		585
Financing Receivables, 30 to 59 Days Past Due | Multifamily
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		46
Financing Receivables, 30 to 59 Days Past Due | Nonresidential
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		11
Financing Receivables, 60 to 89 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,059
Financing Receivables, 60 to 89 Days Past Due | 1-4 Family Residences Investor-Owned
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	352
Financing Receivables, 60 to 89 Days Past Due | Multifamily
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	304
Financing Receivables, 60 to 89 Days Past Due | Nonresidential
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	403
Financing Receivables, Over 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	1,434	5,796
Financing Receivables, Over 90 Days Past Due | 1-4 Family Residences Investor-Owned
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		472
Financing Receivables, Over 90 Days Past Due | 1-4 Family Owner Occupied
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	951	3,391
Financing Receivables, Over 90 Days Past Due | Nonresidential
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	483	1,882
Business
Financing Receivable Recorded Investment Past Due [Line Items]
Current	11,401	12,583
Total Past Due	11,698	12,873
Nonaccrual Loans		147
Business | Financing Receivables, 30 to 59 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due	297	239
Business | Financing Receivables, Over 90 Days Past Due
Financing Receivable Recorded Investment Past Due [Line Items]
Total Past Due		51
Consumer
Financing Receivable Recorded Investment Past Due [Line Items]
Current	1,027	886
Total Past Due	$ 1,027	$ 886

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Composition of Allowance for Loan Losses and Related Recorded Investment in Loans (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	$ 11,409	$ 10,370	$ 11,071	$ 10,205	$ 10,205
Provision charged to expense	337	207	431	259	1,716
Losses charged-off	(13)	(24)	(18)	(34)	(1,429)
Recoveries	18	102	267	225	579
Balance, end of period	11,751	10,655	11,751	10,655	11,071
Ending balance: individually evaluated for impairment	643	1,183	643	1,183	922
Ending balance: collectively evaluated for impairment	11,108	9,472	11,108	9,472	10,149
Ending balance: individually evaluated for impairment	18,152	24,779	18,152	24,779	25,160
Ending balance: collectively evaluated for impairment	842,843	717,568	842,843	717,568	783,594
Total	860,995	742,347	860,995	742,347	808,754
1-4 Family Owner Occupied
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	1,370	1,729	1,402	1,804	1,804
Provision charged to expense	(107)	(246)	(312)	(321)	(578)
Recoveries	2		175		176
Balance, end of period	1,265	1,483	1,265	1,483	1,402
Ending balance: individually evaluated for impairment	297	401	297	401	375
Ending balance: collectively evaluated for impairment	968	1,082	968	1,082	1,027
Ending balance: individually evaluated for impairment	7,399	8,712	7,399	8,712	10,074
Ending balance: collectively evaluated for impairment	84,809	91,189	84,809	91,189	90,780
Total	92,208	99,901	92,208	99,901	100,854
Multifamily
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	3,385	2,800	3,109	2,705	2,705
Provision charged to expense	255	188	531	282	402
Recoveries				1	2
Balance, end of period	3,640	2,988	3,640	2,988	3,109
Ending balance: collectively evaluated for impairment	3,640	2,988	3,640	2,988	3,109
Ending balance: individually evaluated for impairment					520
Ending balance: collectively evaluated for impairment	218,210	172,167	218,210	172,167	188,030
Total	218,210	172,167	218,210	172,167	188,550
Nonresidential
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	1,517	1,568	1,424	1,320	1,320
Provision charged to expense	160	169	250	414	95
Recoveries	2	2	5	5	9
Balance, end of period	1,679	1,739	1,679	1,739	1,424
Ending balance: individually evaluated for impairment	36	258	36	258	39
Ending balance: collectively evaluated for impairment	1,643	1,481	1,643	1,481	1,385
Ending balance: individually evaluated for impairment	2,207	5,661	2,207	5,661	4,128
Ending balance: collectively evaluated for impairment	166,581	150,009	166,581	150,009	147,065
Total	168,788	155,670	168,788	155,670	151,193
1-4 Family Residences Investor-Owned
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	3,689	3,181	3,716	3,147	3,147
Provision charged to expense	(3)	350	(30)	379	544
Recoveries	1	5	1	10	25
Balance, end of period	3,687	3,536	3,687	3,536	3,716
Ending balance: individually evaluated for impairment	310	524	310	524	506
Ending balance: collectively evaluated for impairment	3,377	3,012	3,377	3,012	3,210
Ending balance: individually evaluated for impairment	7,014	8,869	7,014	8,869	8,738
Ending balance: collectively evaluated for impairment	289,476	248,120	289,476	248,120	278,420
Total	296,490	256,989	296,490	256,989	287,158
Construction and Land
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	1,212	672	1,205	615	615
Provision charged to expense	79	81	86	138	588
Recoveries					2
Balance, end of period	1,291	753	1,291	753	1,205
Ending balance: collectively evaluated for impairment	1,291	753	1,291	753	1,205
Ending balance: individually evaluated for impairment	1,111	1,008	1,111	1,008	1,075
Ending balance: collectively evaluated for impairment	71,463	41,108	71,463	41,108	66,165
Total	72,574	42,116	72,574	42,116	67,240
Business
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	228	115	209	597	597
Provision charged to expense	(46)	(33)	(94)	(619)	676
Losses charged-off	(13)	(24)	(18)	(34)	(1,423)
Recoveries	11	90	83	204	359
Balance, end of period	180	148	180	148	209
Ending balance: individually evaluated for impairment					2
Ending balance: collectively evaluated for impairment	180	148	180	148	207
Ending balance: individually evaluated for impairment	421	529	421	529	625
Ending balance: collectively evaluated for impairment	11,277	14,125	11,277	14,125	12,248
Total	11,698	14,654	11,698	14,654	12,873
Consumer
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period	8	9	6	17	17
Provision charged to expense	(1)	(6)		(14)	(11)
Losses charged-off					(6)
Recoveries	2	5	3	5	6
Balance, end of period	9	8	9	8	6
Ending balance: collectively evaluated for impairment	9	8	9	8	6
Ending balance: collectively evaluated for impairment	1,027	850	1,027	850	886
Total	$ 1,027	850	$ 1,027	$ 850	$ 886
Unallocated
Financing Receivable Allowance For Credit Losses [Line Items]
Balance, beginning of period		296
Provision charged to expense		$ (296)

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Information Relates to Impaired Loans (Details) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Financing Receivable Impaired [Line Items]
Unpaid Contractual Principal Balance	$ 19,803	$ 26,953	$ 27,198
Recorded Investment With No Allowance	11,038	13,017	16,408
Recorded Investment With Allowance	7,114	11,762	8,752
Total Recorded Investment	18,152	24,779	25,160
Related Allowance	643	1,183	922
Average Recorded Investment	22,546	26,160	25,545
Interest Income Recognized on Cash Basis	454	571	1,080
1-4 Family
Financing Receivable Impaired [Line Items]
Unpaid Contractual Principal Balance	15,597	18,941	20,036
Recorded Investment With No Allowance	7,787	8,346	10,651
Recorded Investment With Allowance	6,626	9,235	8,161
Total Recorded Investment	14,413	17,581	18,812
Related Allowance	607	925	506
Average Recorded Investment	17,101	18,201	18,512
Interest Income Recognized on Cash Basis	371	422	890
Multifamily
Financing Receivable Impaired [Line Items]
Unpaid Contractual Principal Balance			533
Recorded Investment With No Allowance			520
Total Recorded Investment			520
Related Allowance			375
Average Recorded Investment	104		166
Nonresidential Properties
Financing Receivable Impaired [Line Items]
Unpaid Contractual Principal Balance	2,421	6,317	4,729
Recorded Investment With No Allowance	1,719	3,134	3,633
Recorded Investment With Allowance	488	2,527	495
Total Recorded Investment	2,207	5,661	4,128
Related Allowance	36	258
Average Recorded Investment	3,753	6,319	5,231
Interest Income Recognized on Cash Basis	71	141	166
Construction and Land
Financing Receivable Impaired [Line Items]
Unpaid Contractual Principal Balance	1,321	1,124	1,233
Recorded Investment With No Allowance	1,111	1,008	1,075
Total Recorded Investment	1,111	1,008	1,075
Related Allowance			39
Average Recorded Investment	1,073	1,028	1,042
Business
Financing Receivable Impaired [Line Items]
Unpaid Contractual Principal Balance	464	571	667
Recorded Investment With No Allowance	421	529	529
Recorded Investment With Allowance			96
Total Recorded Investment	421	529	625
Related Allowance			2
Average Recorded Investment	515	612	594
Interest Income Recognized on Cash Basis	$ 12	$ 8	$ 24

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Schedule of Troubled Debt Restructuring (Details) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018 USD ($) Loan	Dec. 31, 2017 USD ($) Loan
Financing Receivable Modifications [Line Items]
Loans Restructured, Number of Loans | Loan	0	1
Loans Restructured, Pre-Modification Recorded Balance		$ 176
Loans Restructured, Post-Modification Recorded Balance		$ 176
All TDRs with a payment default within 12 months following modification, Number of Loans | Loan	1
All TDRs with a paymentdefault within 12 months following modification, Balance of Loans at the Time of Default	$ 175
Mortgage Loans
Financing Receivable Modifications [Line Items]
Loans Restructured, Number of Loans | Loan		1
Loans Restructured, Pre-Modification Recorded Balance		$ 176
Loans Restructured, Post-Modification Recorded Balance		$ 176
All TDRs with a payment default within 12 months following modification, Number of Loans | Loan	1
All TDRs with a paymentdefault within 12 months following modification, Balance of Loans at the Time of Default	$ 175
Mortgage Loans | 1-4 Family
Financing Receivable Modifications [Line Items]
Loans Restructured, Number of Loans | Loan		1
Loans Restructured, Pre-Modification Recorded Balance		$ 176
Loans Restructured, Post-Modification Recorded Balance		$ 176
All TDRs with a payment default within 12 months following modification, Number of Loans | Loan	1
All TDRs with a paymentdefault within 12 months following modification, Balance of Loans at the Time of Default	$ 175
Combination of Rate, Maturity, Other
Financing Receivable Modifications [Line Items]
Loans Restructured, Number of Loans | Loan		1
Loans Restructured, Pre-Modification Recorded Balance		$ 176
Loans Restructured, Post-Modification Recorded Balance		$ 176
All TDRs with a payment default within 12 months following modification, Number of Loans | Loan	1
All TDRs with a paymentdefault within 12 months following modification, Balance of Loans at the Time of Default	$ 175

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Summary of Premises and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 47,847	$ 45,799
Less accumulated depreciation and amortization	(19,481)	(18,627)
Property, plant and equipment, net	28,366	27,172
Land
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	3,979	3,979
Building Improvements
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	15,972	15,972
Leasehold Improvements
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	21,790	20,973
Furniture, Fixtures and Equipment
Property Plant And Equipment [Line Items]
Property, plant and equipment, gross	$ 6,106	$ 4,875

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Premises and Equipment - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Property Plant And Equipment [Line Items]
Depreciation and amortization	$ 437	$ 399	$ 854	$ 803
Property, plant and equipment, gross	47,847		47,847		$ 45,799
Leasehold Improvements
Property Plant And Equipment [Line Items]
Increase (decrease) in property, plant and equipment			817
Property, plant and equipment, gross	21,790		21,790		20,973
Furniture, Fixtures and Equipment
Property Plant And Equipment [Line Items]
Increase (decrease) in property, plant and equipment			1,231
Property, plant and equipment, gross	$ 6,106		$ 6,106		$ 4,875

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Deposits - Summarized Deposits (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Banking And Thrift [Abstract]
Demand	$ 108,550	$ 103,001
NOW/IOLA accounts	26,711	27,758
Money market accounts	58,612	46,497
Savings accounts	124,578	126,668
Total savings, NOW and money market	209,901	200,923
Certificates of deposit of $250K or more	82,928	80,300
All other certificates of deposit	351,876	329,761
Total certificates of deposit	434,804	410,061
Total interest-bearing deposits	644,705	610,984
Total deposits	$ 753,255	$ 713,985

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Deposits - Scheduled Maturities of Certificates of Deposit (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Banking And Thrift [Abstract]
2019	$ 186,319
2020	88,075
2021	88,164
2022	60,493
2023	11,753
Total certificates of deposit	$ 434,804	$ 410,061

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Deposits - Additional Information (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Banking And Thrift [Abstract]
Overdrawn deposit reclassified to loans amounted	$ 198	$ 174

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Borrowings - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Debt Disclosure [Abstract]
Advance from the Federal Home Loan Bank	$ 37,775		$ 37,775		$ 16,400
Guarantee from the FHLB through a standby letter of credit	4,304		4,304		6,614
Unsecured fed fund line amount	25,000		25,000		25,000
Unsecured fed fund line amount outstanding	0		0		20,000
Interest expense on FHLB advances	204	$ 32	302	$ 61
Collateral mortgage loans available to secure advances from the FHLB	71,439		71,439		66,254
Bank's ability to borrow under repurchase agreements	25,000		25,000		25,000
Securities sold under repurchase agreements	0		0		$ 0
Interest expense on securities sold under repurchase agreements	$ 0	$ 0	$ 0	$ 0

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Borrowings - Schedule of Borrowed Funds Maturity and Call Date (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Line Of Credit Facility [Line Items]
2020	$ 1,400	$ 1,400
2021	3,000	3,000
2022	5,000	5,000
2023	28,375	7,000
Total	37,775	36,400
2020	1,400	1,400
2021	3,000	3,000
2022	5,000	5,000
2023	28,375	7,000
Total	$ 37,775	$ 36,400
2020	2.11%	2.11%
2021	1.84%	1.84%
2022	1.97%	1.97%
2023	2.82%	2.12%
Total	2.60%	1.81%
Correspondent Bank
Line Of Credit Facility [Line Items]
Correspondent Bank Overnight line of credit advance		$ 20,000
Correspondent Bank Overnight line of credit advance		$ 20,000
Correspondent Bank Overnight line of credit advance		1.64%

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Income Taxes - Components of Income Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Federal:
Current	$ 110	$ 624	$ 195	$ 881
Deferred	60	23	190	132
Federal income tax provision (benefit)	170	647	385	1,013
State and local:
Current	48	56	121	102
Deferred	(252)	(181)	(356)	(380)
State and local income tax provision (benefit)	(204)	(125)	(235)	(278)
Changes in valuation allowance	200	119	284	251
Provision for income taxes	$ 166	$ 641	$ 434	$ 986

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Income Taxes - Additional Information (Details) - USD ($)	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Income Taxes [Line Items]
Federal income tax rate	21.00%	34.00%	21.00%	34.00%	34.00%
Maximum measurement period to finalize accounting of tax			1 year
Increased in valuation allowance	$ (200,000)	$ (119,000)	$ (284,000)	$ (251,000)
NEW YORK
Income Taxes [Line Items]
Increased in valuation allowance	200,000		284,000
Unrecognized tax benefits	$ 0		$ 0		$ 0

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Income Taxes - Reconciliation of Differences Between Federal Income Tax Rate and Total Income Tax Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Income Tax Expense Benefit Continuing Operations Income Tax Reconciliation [Abstract]
Income tax, at federal rate	$ 182	$ 600	$ 436	$ 909
State and local tax, net of federal taxes	(160)	(91)	(185)	(174)
Valuation allowance, net of the federal benefit	200	132	284	251
Other	(56)		(101)
Provision for income taxes	$ 166	$ 641	$ 434	$ 986

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Income Taxes - Significant Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Deferred tax assets:
Allowance for losses on loans	$ 3,639	$ 3,444
Pension obligations	2,424	2,402
Interest on nonaccrual loans	46	415
Unrealized loss on available-for-sale securities	64	72
Amortization of intangible assets	111	120
Deferred rent payable	170	194
Net operating losses	2,809	2,444
Charitable contribution carryforward	1,772	1,840
Other	253	162
Total gross deferred tax assets	11,288	11,093
Deferred tax liabilities:
Cumulative contribution in excess of net periodic benefit costs, net	3,113	3,134
Depreciation and amortization of premises and equipment	601	601
Deferred loan fees	366	317
Other	5	18
Total gross deferred tax liabilities	4,085	4,070
Valuation allowance	3,398	3,114
Net deferred tax assets	$ 3,805	$ 3,909

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Compensation and Benefit Plans - Summary Of Pension Plan Funded Status and Amounts Recognized in Financial Condition Statements (Detail) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017	Jun. 30, 2018	Dec. 31, 2017
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract]
Projected benefit obligation	$ (15,802)	$ (14,142)	$ (15,883)	$ (15,802)	$ (15,883)
Fair value of plan assets	14,564	15,038	14,732	14,564	14,732
Funded status				(1,238)	(1,151)
Accumulated benefit obligation				$ (15,802)	$ (15,883)
Changes in benefit obligation:
Beginning of period	15,883	14,142	14,142
Service cost	20	20	39
Interest cost	271	291	581
2017 interest rate change			1,338
2017 mortality change			1,906
(Gain)/ Loss	3		(1,345)
Administrative cost	(20)		(39)
Benefits paid	(355)		(739)
End of period	15,802		15,883
Changes in plan assets:
Fair value of plan assets, beginning of period	14,732	15,038	15,038
Actual return on plan assets	207		472
Benefits paid	(355)	$ (184)	(739)
Administrative expenses paid	(20)		(39)
Fair value of plan assets, end of period	$ 14,564		$ 14,732

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Compensation and Benefit Plans - Benefit Costs Pretax Amounts Recognized in Accumulated Other Comprehensive Loss (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Defined Benefit Plan Accumulated Other Comprehensive Income Loss After Tax [Abstract]
Net loss	$ (11,288)	$ (11,224)

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Compensation and Benefit Plans - Components of Net Periodic Benefit Cost (Detail) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Amount Recognized In Net Periodic Benefit Cost And Other Comprehensive Income Loss Before Tax [Abstract]
Service cost	$ 20	$ 20	$ 39
Interest cost	271	291	$ 581
Expected return on plan assets	(430)	(420)
Amortization of prior service cost	13	13
Amortization of (gain)/loss	(149)	(117)
Net periodic benefit cost	$ 23	$ 21

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Compensation and Benefit Plans - Weighted Average Assumptions Used to Determine Net Benefit Obligations (Detail)	Jun. 30, 2018	Dec. 31, 2017
Defined Benefit Plan Weighted Average Assumptions Used In Calculating Benefit Obligation [Abstract]
Discount rate	3.50%	3.50%
Rate of compensation increase	0.00%	0.00%

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Compensation and Benefit Plans - Weighted Average Assumptions Used to Determine Net Benefit Cost (Detail)	6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017
Defined Benefit Plan Weighted Average Assumptions Used In Calculating Net Periodic Benefit Cost [Abstract]
Discount rate	3.50%	4.25%
Rate of compensation increase	0.00%	0.00%
Expected long-term rate of return on assets	6.00%	6.00%

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Compensation and Benefit Plans - Additional Information (Detail)		3 Months Ended		6 Months Ended
	Sep. 29, 2017 shares	Jun. 30, 2018 USD ($)	Jun. 30, 2017 USD ($)	Jun. 30, 2018 USD ($) Executive	Jun. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)
Compensation And Benefit Plans Disclosure [Line Items]
Fair value of pension plan assets		$ 14,564,000		$ 14,564,000		$ 14,732,000	$ 15,038,000
Maximum employer matching contribution percentage				4.00%
Compensation expense		201,000	$ 0	$ 378,000	$ 0
Interest expense		47,000	$ 0	$ 95,000	$ 0
Supplemental Retirement Plan
Compensation And Benefit Plans Disclosure [Line Items]
Number of key executive under retirement plan | Executive				1
Expense recognized		0		$ 0
Employee Stock Ownership Plan
Compensation And Benefit Plans Disclosure [Line Items]
ESOP borrowed amount		7,238,000		$ 7,238,000
Number of ESOP shares purchased | shares	723,751
ESOP shares purchased expressed as percentage of common stock sold in stock offering	3.92%
Expected period of loan repaid				15 years
Loan receivable - ESOP		6,712,000		$ 6,712,000		6,712,000
Fair Value Measurements
Compensation And Benefit Plans Disclosure [Line Items]
Fair value of pension plan assets		$ 14,565,000		$ 14,565,000		$ 14,696,000

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Compensation and Benefit Plans - Employer Contributions and Benefit Payments (Detail) - USD ($) $ in Thousands	6 Months Ended		12 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Dec. 31, 2017
Defined Benefit Pension Plans And Defined Benefit Postretirement Plans Disclosure [Abstract]
Benefits paid	$ 355	$ 184	$ 739

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Compensation and Benefit Plans - Expected Employee Benefit Payments (Detail) $ in Thousands	Jun. 30, 2018 USD ($)
Defined Benefit Plan Estimated Future Benefit Payments [Abstract]
2018	$ 380
2019	736
2020	714
2021	695
2022	700
Thereafter	3,307
Total expected employee benefit payments	$ 6,532

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Compensation and Benefit Plans - Summary of ESOP Shares (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]
Shares committed-to-be released	24,126	48,250
Shares to be allocated to participants	48,250
Unallocated shares	651,375	675,501
Total	723,751	723,751
Fair value of unearned shares	$ 10,233	$ 10,254

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Disclosure - Earnings Per Share - Additional Information (Detail)	Jun. 30, 2018 shares
Earnings Per Share [Abstract]
Shares outstanding	0

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Earnings Per Share - Schedule of Reconciliation of Number of Shares Used in Calculation of Basic and Diluted Earnings Per Common Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Earnings Per Share [Abstract]
Net income	$ 699	$ 1,124	$ 1,640	$ 1,687
Shares Outstanding for basic EPS:
Weighted average shares outstanding:	18,463,028		18,463,028
Less: Weighted average unallocated Employee Stock Ownership Plan (ESOP) shares:	663,305		687,607
Basic weighted shares outstanding	17,799,723		17,775,421
Basic earnings per share	$ 0.04		$ 0.09
Dilutive potential common shares:
Diluted weighted average shares outstanding	17,799,723		17,775,421
Diluted earnings per share	$ 0.04		$ 0.09

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Commitments, Contingencies and Credit Risk - Financial Instruments Whose Contractual Amounts Represent Credit Risk (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value Concentration Of Risk Financial Statement Captions [Line Items]
Contractual amounts represent credit risk	$ 102,348	$ 94,798
Commitments to Grant Mortgage Loans
Fair Value Concentration Of Risk Financial Statement Captions [Line Items]
Contractual amounts represent credit risk	54,677	54,423
Unfunded Commitments Under Lines of Credit
Fair Value Concentration Of Risk Financial Statement Captions [Line Items]
Contractual amounts represent credit risk	43,247	33,641
Standby Letters of Credit
Fair Value Concentration Of Risk Financial Statement Captions [Line Items]
Contractual amounts represent credit risk	$ 4,424	$ 6,734

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Commitments, Contingencies and Credit Risk - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Commitments And Contingencies Disclosure [Abstract]
Lease expiration year			2031
Net rental expenses under operating leases	$ 341	$ 354	$ 746	$ 708

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Commitments, Contingencies and Credit Risk - Projected Minimum Rental Payments under Terms of Leases (Details) $ in Thousands	Jun. 30, 2018 USD ($)
Operating Leases Future Minimum Payments Due [Abstract]
2018	$ 682
2019	1,076
2020	1,107
2021	1,140
2022	1,043
Thereafter	6,671
Projected minimum rental payments	$ 11,719

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Fair Value - Assets Measured at Fair Value on Recurring Basis (Detail) - Fair Value Measurement Recurring - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	$ 28,144	$ 28,897
Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	28,144	28,897
U.S. Government and Federal Agencies
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	24,396	24,552
U.S. Government and Federal Agencies | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	24,396	24,552
FNMA Certificates
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	905	1,103
FNMA Certificates | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	905	1,103
GNMA Certificates
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	2,843	3,242
GNMA Certificates | Level 2
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Available-for-sale securities measure at fair value on recurring basis	$ 2,843	$ 3,242

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Fair Value - Assets Measured at Fair Value on Nonrecurring Basis (Detail) - Impaired Loans - Fair Value Measurement Nonrecurring - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets measured at fair value on nonrecurring basis	$ 18,152	$ 25,160
Level 3
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Assets measured at fair value on nonrecurring basis	$ 18,152	$ 25,160

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Fair Value - Estimated Fair Values of Financial Instruments (Detail) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017	Dec. 31, 2016
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Pension plan asset	$ 14,564	$ 14,732	$ 15,038
Carrying Amount
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash and cash equivalents	49,182	59,724
Investment securities	28,144	28,897
Loans receivable, net	850,426	798,703
Accrued interest receivable	3,350	3,335
FHLB stock	2,617	1,511
Pension plan asset	14,566	14,735
Demand deposits	108,550	103,001
Interest-bearing deposits	209,901	200,923
Certificates of deposit	434,804	410,061
Advance payments by borrowers for taxes and insurance	5,491	5,025
Advances from FHLB	37,775	36,400
Accrued interest payable	141	42
Fair Value Measurements
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash and cash equivalents	49,182	59,724
Investment securities	28,144	28,897
Loans receivable, net	857,229	813,160
Accrued interest receivable	3,350	3,335
FHLB stock	2,617	1,511
Pension plan asset	14,565	14,696
Demand deposits	108,550	103,001
Interest-bearing deposits	209,901	200,923
Certificates of deposit	436,474	414,902
Advance payments by borrowers for taxes and insurance	5,491	5,025
Advances from FHLB	37,775	36,400
Accrued interest payable	141	42
Fair Value Measurements | Level 1
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Cash and cash equivalents	49,182	59,724
FHLB stock	2,617	1,511
Demand deposits	108,550	103,001
Interest-bearing deposits	209,901	200,923
Advances from FHLB	37,775	36,400
Fair Value Measurements | Level 2
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Investment securities	28,144	28,897
Accrued interest receivable	3,350	3,335
Certificates of deposit	436,474	414,902
Advance payments by borrowers for taxes and insurance	5,491	5,025
Accrued interest payable	141	42
Fair Value Measurements | Level 3
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items]
Loans receivable, net	857,229	813,160
Pension plan asset	$ 14,565	$ 14,696

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Regulatory Capital Requirements - Additional Information (Details)	12 Months Ended
	Dec. 31, 2019	Dec. 31, 2015	Jun. 30, 2018	Dec. 31, 2017
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Percentage of capital buffer			12.10%	12.70%
Minimum
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Percentage of capital conservation buffer		0.00%
Maximum | Scenario Forecast
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Percentage of capital conservation buffer	2.50%

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Regulatory Capital Requirements - Summary of Actual Capital Amounts and Ratios As Compared to Regulatory Requirements (Details) - USD ($)	Jun. 30, 2018	Dec. 31, 2017
PDL Community Bancorp
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Total Capital to Risk-Weighted Assets, Actual Amount	$ 183,624	$ 181,196
Tier 1 Capital to Risk-Weighted Assets, Actual Amount	174,574	172,603
Common Equity Tier 1 Capital Ratio, Actual Amount	174,574	172,603
Tier 1 Capital to Total Assets, Actual Amount	$ 174,574	$ 172,603
Total Capital to Risk-Weighted Assets, Actual Ratio	25.47%	26.57%
Tier 1 Capital to Risk-Weighted Assets, Actual Ratio	24.21%	25.31%
Common Equity Tier 1 Capital Ratio, Actual Ratio	24.21%	25.31%
Tier 1 Capital to Total Assets, Actual Ratio	18.07%	20.02%
Total Capital to Risk-Weighted Assets, For Capital Adequacy Amount	$ 57,676	$ 54,557
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Amount	43,257	40,917
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Amount	32,443	30,688
Tier 1 Capital to Total Assets, For Capital Adequacy Amount	$ 38,639	$ 34,501
Total Capital to Risk-Weighted Assets, For Capital Adequacy Ratio	8.00%	8.00%
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Ratio	6.00%	6.00%
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Ratio	4.50%	4.50%
Tier 1 Capital to Total Assets, For Capital Adequacy Ratio	4.00%	4.00%
Total Capital to Risk-Weighted Assets, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 72,095	$ 68,196
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	57,676	54,557
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	46,861	44,327
Tier 1 Capital to Total Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 48,299	$ 43,127
Total Capital to Risk-Weighted Assets, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	8.00%
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.50%	6.50%
Tier 1 Capital to Total Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%
Ponce Bank
Compliance With Regulatory Capital Requirements Under Banking Regulations [Line Items]
Total Capital to Risk-Weighted Assets, Actual Amount	$ 144,379	$ 141,120
Tier 1 Capital to Risk-Weighted Assets, Actual Amount	135,349	132,577
Common Equity Tier 1 Capital Ratio, Actual Amount	135,349	132,577
Tier 1 Capital to Total Assets, Actual Amount	$ 135,349	$ 132,577
Total Capital to Risk-Weighted Assets, Actual Ratio	20.07%	20.73%
Tier 1 Capital to Risk-Weighted Assets, Actual Ratio	18.81%	19.48%
Common Equity Tier 1 Capital Ratio, Actual Ratio	18.81%	19.48%
Tier 1 Capital to Total Assets, Actual Ratio	14.03%	14.67%
Total Capital to Risk-Weighted Assets, For Capital Adequacy Amount	$ 57,550	$ 54,447
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Amount	43,163	40,835
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Amount	32,372	30,626
Tier 1 Capital to Total Assets, For Capital Adequacy Amount	$ 38,591	$ 36,152
Total Capital to Risk-Weighted Assets, For Capital Adequacy Ratio	8.00%	8.00%
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Ratio	6.00%	6.00%
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Ratio	4.50%	4.50%
Tier 1 Capital to Total Assets, For Capital Adequacy Ratio	4.00%	4.00%
Total Capital to Risk-Weighted Assets, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 71,938	$ 68,059
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	57,550	54,447
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	46,760	44,238
Tier 1 Capital to Total Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Amount	$ 48,239	$ 45,190
Total Capital to Risk-Weighted Assets, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	10.00%	10.00%
Tier 1 Capital to Risk-Weighted Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	8.00%	8.00%
Common Equity Tier 1 Capital Ratio, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	6.50%	6.50%
Tier 1 Capital to Total Assets, For Capital Adequacy Ratio, To Be Well Capitalized Under Prompt Corrective Action Provisions Ratio	5.00%	5.00%

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Components of Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	6 Months Ended	12 Months Ended
	Jun. 30, 2018	Dec. 31, 2017
Accumulated Other Comprehensive Income Loss [Line Items]
Other comprehensive income (loss), net of tax	$ (225)	$ (1,601)
Unrealized gains (losses) on securities available for sale
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss) beginning balance	(221)	(166)
Other comprehensive income (loss), net of tax	(182)	(55)
Accumulated other comprehensive income (loss) ending balance	(403)	(221)
Unrealized gains (losses) on pension benefits
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss) beginning balance	(7,630)	(6,084)
Other comprehensive income (loss), net of tax	(43)	(1,546)
Accumulated other comprehensive income (loss) ending balance	(7,673)	(7,630)
Accumulated Other Comprehensive Loss
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated other comprehensive income (loss) beginning balance	(7,851)	(6,250)
Accumulated other comprehensive income (loss) ending balance	$ (8,076)	$ (7,851)

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Aggregate Loan Transactions with Related Parties (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2018	Jun. 30, 2017	Jun. 30, 2018	Jun. 30, 2017
Receivables [Abstract]
Beginning balance	$ 1,329	$ 1,540	$ 1,351	$ 1,573
Originations	100		111
Payments	(33)	(31)	(66)	(64)
Ending balance	$ 1,396	$ 1,509	$ 1,396	$ 1,509

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Transactions With Related Parties - Additional Information (Details) - USD ($) $ in Thousands	Jun. 30, 2018	Dec. 31, 2017
Related Party Transactions [Abstract]
Deposits from officers and directors	$ 6,336	$ 5,959