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Loans

9 Months Ended

Mar. 31, 2024

Note 6 – Loans

Major classifications of loans, net of deferred loan fees (costs) of $586 thousand and $653 thousand at March 31, 2024 and June 30, 2023, respectively, are summarized as follows:


	March 31,				June 30,
	2024				2023
(Dollars in thousands)	Amount		Percent		Amount		Percent
Residential real estate:
1 - 4 family	$	127,992	26.59	%	$	135,046	28.08	%
Home equity and HELOCs		30,669	6.37			32,684	6.79
Construction -residential		12,258	2.55			9,113	1.90
Commercial real estate:
1 - 4 family investor		94,297	19.58			98,160	20.41
Multi-family (five or more)		15,848	3.29			15,281	3.18
Commercial non-residential		163,830	34.03			157,555	32.77
Construction and land		19,535	4.06			15,584	3.24
Commercial		14,998	3.12			15,433	3.21
Consumer loans		1,950	0.41			2,000	0.42
Total Loans		481,377	100.00	%		480,856	100.00	%

Allowance for credit losses		(3,120)				(3,313)
Net Loans	$	478,257			$	477,543

Mortgage loans serviced for others are not included in the accompanying Consolidated Statements of Financial Condition. The total amount of loans serviced for the benefit of others was approximately $11.6 million and $12.5 million at March 31, 2024 and June 30, 2023, respectively. The Bank retained the related servicing rights for the loans that were sold and receives a 25 basis point servicing fee from the purchasers of the loans. Custodial escrow balances maintained in connection with the foregoing loan servicing are included in advances from borrowers for taxes and insurance.

Commercial non-residential loans include shared national credits, which are participations in loans or loan commitments of at least $20.0 million that are shared by three or more banks. As of June 30, 2023, the Company had one shared national credit loan commitment for $12.5 million with no balance outstanding that was a purchased participation classified as pass rated and all payments were current and the loan was performing in accordance with its contractual terms. This shared national credit loan commitment was closed during the three months ended December 31, 2023. The Company’s accounting policies for shared national credits, including our charge off and reserve policy, are consistent with the significant accounting policies disclosed in our financial statements for the Company’s total loan portfolio. Shared national credits are subject to the same underwriting guidelines as loans originated by the Bank and are subject to annual reviews where the risk rating of the loan is evaluated. Additionally, the Bank obtains quarterly financial information and performs a financial analysis on a regular basis to ensure that the borrower can comply with the financial terms of the loan. The information used in the analysis is provided by the borrower through the agent bank.

Allowance for Credit Losses. As previously discussed in the “Recent Accounting Pronouncements” section of Note 2 “Summary of Significant Accounting Policies,” the Company adopted the provisions of ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). ASU 2016-13 requires estimated credit losses on loans to be determined based on an expected life of loan model, as compared to an incurred loss model (in effect for periods prior to July 1, 2023). Accordingly, the allowance for losses disclosures subsequent to July 1, 2023 are not always comparable to prior dates. In addition, certain new disclosures required under ASU 2016-13 are not applicable to prior periods. As a result, the following tables present disclosures separately for each period, where appropriate. New disclosures required under ASU 2016-13 are only shown for the current period. Please refer to Note 2 “Summary of Significant Accounting Policies” for a summary of the impact of adopting the provisions of ASU 2016-13 on July 1, 2023.

The following tables set forth the allocation of the Bank’s allowance for credit losses by loan category at the dates indicated. The portion of the credit loss allowance allocated to each loan category does not represent the total available for future losses which may occur within the loan category since the total credit loss allowance is a valuation allocation applicable to the entire loan portfolio. The Company generally charges-off the collateral or discounted cash flow deficiency on all loans at 90 days past due and all loans rated substandard or worse that are 90 days past due.

The following table presents, by loan portfolio segment, the changes in the allowance for credit losses for the three months ended March 31, 2024:


March 31, 2024	Residential real estate:						Commercial real estate:
			Home Equity		Construction-		1 - 4 family		Multi-family		Commercial		Construction
(Dollar amounts in thousands)	1 - 4 family		and HELOCs		residential		investor		(five or more)		non-residential		and Land		Commercial		Consumer		Total
Allowance for credit losses:
Beginning balance	$	403	$	215	$	44	$	317	$	52	$	1,754	$	240	$	322	$	254	$	3,601
Charge-offs		—		—		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—		—		1		1
Provision (recovery)		(78)		(55)		22		(40)		(19)		(175)		(114)		(21)		(2)		(482)
Ending Balance	$	325	$	160	$	66	$	277	$	33	$	1,579	$	126	$	301	$	253	$	3,120

The following table presents, by loan portfolio segment, the changes in the allowance for loan losses for the three months ended March 31, 2023:


March 31, 2023	Residential real estate:						Commercial real estate:
			Home Equity		Construction-		1 - 4 family		Multi-family		Commercial		Construction
(Dollar amounts in thousands)	1-4 family		and HELOCs		residential		investor		(five or more)		non-residential		and Land		Commercial		Consumer		Total
Allowance for loan losses:
Beginning balance	$	514	$	109	$	272	$	508	$	92	$	1,409	$	249	$	123	$	58	$	3,334
Charge-offs		—		—		—		—		—		—		—		—		—		—
Recoveries		—		—		—		—		—		—		—		—		3		3
Provision (recovery)		(22)		8		(44)		(22)		(1)		67		31		(15)		(2)		—
Ending Balance	$	492	$	117	$	228	$	486	$	91	$	1,476	$	280	$	108	$	59	$	3,337

The following table presents, by loan portfolio segment, the changes in the allowance for credit losses for the nine months ended March 31, 2024:


March 31, 2024	Residential real estate:						Commercial real estate:
			Home Equity		Construction-		1 - 4 family		Multi-family		Commercial		Construction
(Dollar amounts in thousands)	1 - 4 family		and HELOCs		residential		investor		(five or more)		non-residential		and Land		Commercial		Consumer		Total
Allowance for credit losses:
Beginning balance	$	486	$	113	$	214	$	569	$	89	$	1,420	$	281	$	82	$	59	$	3,313
Impact of adopting ASU 2016-13		(67)		19		(174)		(241)		(30)		379		(93)		254		196		243
Charge-offs		—		—		—		—		—		—		—		—		(13)		(13)
Recoveries		—		—		—		—		—		—		—		—		29		29
Provision (recovery)		(94)		28		26		(51)		(26)		(220)		(62)		(35)		(18)		(452)
Ending Balance	$	325	$	160	$	66	$	277	$	33	$	1,579	$	126	$	301	$	253	$	3,120

The following table presents, by loan portfolio segment, the changes in the allowance for loan losses for the nine months ended March 31, 2023:


March 31, 2023	Residential real estate:						Commercial real estate:
			Home Equity		Construction-		1 - 4 family		Multi-family		Commercial		Construction
(Dollar amounts in thousands)	1-4 family		and HELOCs		residential		investor		(five or more)		non-residential		and Land		Commercial		Consumer		Total
Allowance for credit losses:
Beginning balance	$	506	$	113	$	386	$	527	$	110	$	1,451	$	166	$	100	$	50	$	3,409
Charge-offs		(79)		—		—		—		—		—		—		—		—		(79)
Recoveries		—		—		—		—		—		—		—		—		7		7
Provision (recovery)		65		4		(158)		(41)		(19)		25		114		8		2		—
Ending Balance	$	492	$	117	$	228	$	486	$	91	$	1,476	$	280	$	108	$	59	$	3,337

During the three and nine months ended March 31, 2024, and exclusive of the impact of the adoption of ASU 2016-13, the changes in the provision for credit losses for each portfolio of loans were primarily due to fluctuations in the outstanding balance of each portfolio of loans collectively evaluated for impairment. The overall decrease in the allowance during the nine months ended March 31, 2024 can be primarily attributed to consistently low levels of net charge-offs, strong asset quality metrics and continued conservative lending practices.

During the three and nine months ended March 31, 2023, the changes in the provision for loan losses for each portfolio of loans were primarily due to fluctuations in the outstanding balance of each portfolio of loans collectively evaluated for impairment. Specifically, we experienced significant growth in our commercial construction and land portfolio and a corresponding increase in the provision for loan losses for this portfolio. The overall decrease in the allowance during the nine months ended March 31, 2023 can be primarily attributed to an improving asset quality and continued low levels of net charge-offs and non-performing assets.

Under the provisions of ASU 2016-13, loans evaluated individually for impairment consist of non-accrual loans. Under the incurred loss model in effect prior to the adoption of ASU 2016-13, loans evaluated individually for impairment were referred to as impaired loans.

The following table presents the allowance for credit losses and recorded investment by loan portfolio classification at March 31, 2024:


March 31, 2024	Residential real estate:						Commercial real estate:
			Home Equity		Construction-		1 - 4 family		Multi-family		Commercial		Construction
(Dollar amounts in thousands)	1 - 4 family		and HELOCs		residential		investor		(five or more)		non-residential		and land		Commercial		Consumer		Total
Allowance ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		325		160		66		277		33		1,579		126		301		253		3,120
Total allowance	$	325	$	160	$	66	$	277	$	33	$	1,579	$	126	$	301	$	253	$	3,120

Loans receivable ending balance:
Individually evaluated for impairment	$	1,326	$	452	$	—	$	93	$	206	$	811	$	—	$	—	$	109	$	2,997
Collectively evaluated for impairment		126,666		30,217		12,258		94,204		15,642		163,019		19,535		14,998		1,841		478,380
Total portfolio	$	127,992	$	30,669	$	12,258	$	94,297	$	15,848	$	163,830	$	19,535	$	14,998	$	1,950	$	481,377

The following table presents the allowance for loan losses and recorded investment by loan portfolio classification at June 30, 2023:


June 30, 2023	Residential real estate:						Commercial real estate:
			Home Equity		Construction-		1 - 4 family		Multi-family		Commercial		Construction
(Dollar amounts in thousands)	1 - 4 family		and HELOCs		residential		investor		(five or more)		non-residential		and land		Commercial		Consumer		Total
Allowance ending balance:
Individually evaluated for impairment	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
Collectively evaluated for impairment		486		113		214		569		89		1,420		281		82		59		3,313
Total allowance	$	486	$	113	$	214	$	569	$	89	$	1,420	$	281	$	82	$	59	$	3,313

Loans receivable ending balance:
Individually evaluated for impairment	$	1,209	$	182	$	—	$	832	$	251	$	778	$	—	$	—	$	—	$	3,252
Collectively evaluated for impairment		78,237		19,689		9,113		84,891		14,781		142,098		15,584		14,976		643		380,012
Acquired non-credit impaired loans ⁽¹⁾		55,528		12,813		—		12,437		249		14,679		—		457		1,357		97,520
Acquired credit impaired loans ⁽²⁾		72		—		—		—		—		—		—		—		—		72
Total portfolio	$	135,046	$	32,684	$	9,113	$	98,160	$	15,281	$	157,555	$	15,584	$	15,433	$	2,000	$	480,856

(1)	Acquired non-credit impaired loans are evaluated collectively, excluding loans that have subsequently moved to non-accrual status which are individually evaluated for impairment.

(2)	Acquired credit impaired loans are evaluated on an individual basis.

Credit Quality Information

The following tables represent credit exposures by internally assigned grades as of March 31, 2024 and June 30, 2023 that management uses to monitor the credit quality of the overall loan portfolio. The grading analysis estimates the capability of the borrower to repay the contractual obligations of the loan agreements as scheduled or at all. All loans greater than 90 days past due are considered Substandard. The Company’s internal credit risk grading system is based on experiences with similarly graded loans.

The Company’s internally assigned grades are as follows:

Pass – loans which are protected by the current net worth and paying capacity of the obligor or by the value of the underlying collateral.

Special Mention – loans where a potential weakness or risk exists, which could cause a more serious problem if not corrected.

Substandard – loans that have a well-defined weakness based on objective evidence and are characterized by the distinct possibility that the Bank will sustain some loss if the deficiencies are not corrected.

Doubtful – loans classified as doubtful have all the weaknesses inherent in a substandard asset. In addition, these weaknesses make collection or liquidation in full highly questionable and improbable, based on existing circumstances.

Loss – loans classified as a loss are considered uncollectible, or of such value that continuance as an asset is not warranted.

The Bank has a structured loan rating process with several layers of internal and external oversight to help ensure that risk ratings are accurate and reflect the present and future capacity of borrowers to repay a loan as agreed. Generally, consumer and residential mortgage loans are included in the Pass category unless a specific action, such as nonperformance, repossession, or death occurs to raise awareness of a possible credit event. The Company’s Credit Department is responsible for the timely and accurate risk rating of the loans on an ongoing basis. Every credit which must be approved by Loan Committee or the Board of Directors is assigned a risk rating at time of consideration. The Credit Department also annually reviews commercial relationships of $500,000 or greater to assign or re-affirm risk ratings.

The following tables set forth the amounts of the portfolio of classified asset categories for the commercial loan portfolios at March 31, 2024 and June 30, 2023:


	March 31, 2024
	Term Loans Amortized Cost Basis by Origination Fiscal Year												Revolving Loans		Revolving Loans
													Amortized		Converted
	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
1 - 4 family investor
Pass	$	3,073	$	12,015	$	7,250	$	17,670	$	11,991	$	38,111	$	2,403	$	710	$	93,223
Special Mention		—		—		—		—		—		981		—		—		981
Substandard		—		—		—		—		—		93		—		—		93
Doubtful		—		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—		—
Total 1 - 4 family investor	$	3,073	$	12,015	$	7,250	$	17,670	$	11,991	$	39,185	$	2,403	$	710	$	94,297
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family (five or more)
Pass	$	111	$	1,274	$	1,322	$	4,115	$	5,866	$	2,954	$	—	$	—	$	15,642
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		206		—		—		206
Doubtful		—		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—		—
Total Multi-family	$	111	$	1,274	$	1,322	$	4,115	$	5,866	$	3,160	$	—	$	—	$	15,848
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial non-residential
Pass	$	13,255	$	21,146	$	61,821	$	30,199	$	16,318	$	20,188	$	—	$	92	$	163,019
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		319		474		18		—		—		811
Doubtful		—		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—		—
Total Commercial non-residential	$	13,255	$	21,146	$	61,821	$	30,518	$	16,792	$	20,206	$	—	$	92	$	163,830
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Construction and land
Pass	$	1,285	$	5,676	$	10,501	$	—	$	—	$	2,073	$	—	$	—	$	19,535
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—		—
Total Construction and land	$	1,285	$	5,676	$	10,501	$	—	$	—	$	2,073	$	—	$	—	$	19,535
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Commercial
Pass	$	109	$	7,212	$	7,429	$	—	$	28	$	220	$	—	$	—	$	14,998
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Doubtful		—		—		—		—		—		—		—		—		—
Loss		—		—		—		—		—		—		—		—		—
Total Commercial	$	109	$	7,212	$	7,429	$	—	$	28	$	220	$	—	$	—	$	14,998
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Information presented in the table above is not required for periods prior to the adoption of ASU 2016-13. The following table presents more comparable information from the prior period, including internal credit risk ratings by loan class segments.


June 30, 2023
	Commercial Real Estate
	1 - 4 family						Construction
	investor		Multi-family		Non-residential		and land		Commercial		Total
Pass	$	96,097	$	15,030	$	156,777	$	15,584	$	15,433	$	298,921
Special Mention		1,231		—		—		—		—		1,231
Substandard		832		251		778		—		—		1,861
Doubtful		—		—		—		—		—		—
Loss		—		—		—		—		—		—
Ending Balance	$	98,160	$	15,281	$	157,555	$	15,584	$	15,433	$	302,013

The Company monitors the credit risk profile by payment activity for residential and consumer loans. Generally, residential and consumer loans on nonaccrual status and 90 or more days past due and accruing are considered non-performing and are reviewed monthly. The following tables set forth the amounts of the portfolio that are not rated by class of loans for the residential and consumer loan portfolios at March 31, 2024 and June 30, 2023:


	March 31, 2024
	Term Loans Amortized Cost Basis by Origination Fiscal Year												Revolving Loans		Revolving Loans
													Amortized		Converted
	2024		2023		2022		2021		2020		Prior		Cost Basis		to Term		Total
1 - 4 family residential
Performing	$	8,295	$	7,862	$	13,496	$	15,392	$	8,520	$	73,101	$	—	$	—	$	126,666
Non-performing		—		—		—		—		—		1,326		—		—		1,326
Total 1 - 4 family residential	$	8,295	$	7,862	$	13,496	$	15,392	$	8,520	$	74,427	$	—	$	—	$	127,992
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Home equity & HELOCs
Performing	$	999	$	2,230	$	488	$	902	$	609	$	5,002	$	18,498	$	1,489	$	30,217
Non-performing		—		—		—		—		—		—		399		53		452
Total Home equity & HELOCs	$	999	$	2,230	$	488	$	902	$	609	$	5,002	$	18,897	$	1,542	$	30,669
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Construction residential
Performing	$	4,546	$	6,727	$	6	$	979	$	—	$	—	$	—	$	—	$	12,258
Non-performing		—		—		—		—		—		—		—		—		—
Total construction residential	$	4,546	$	6,727	$	6	$	979	$	—	$	—	$	—	$	—	$	12,258
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Consumer
Performing	$	131	$	116	$	40	$	—	$	4	$	1,550	$	—	$	—	$	1,841
Non-performing		—		—		—		—		—		109		—		—		109
Total Consumer	$	131	$	116	$	40	$	—	$	4	$	1,659	$	—	$	—	$	1,950
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	13	$	—	$	—	$	13

Information presented in the table above is not required for periods prior to the adoption of ASU 2016-13.

The following table presents more comparable information from the prior period, including a disclosure of performing and non-performing loans by loan class segments.


June 30, 2023
	Residential Real Estate
			Home equity &
	1 - 4 family		HELOCs		Construction		Consumer		Total
Performing	$	132,956	$	32,684	$	9,113	$	1,918	$	176,671
Non-performing		2,090		—		—		82		2,172
	$	135,046	$	32,684	$	9,113	$	2,000	$	178,843

Loan Delinquencies and Non-accrual Loans

Management further monitors the performance and credit quality of the loan portfolio by analyzing the length of time a recorded payment is past due. The following are tables which include an aging analysis of the recorded investment of past due loans as of March 31, 2024 and June 30, 2023. All non-accrual loans included in the tables below do not have an associated allowance for credit losses because any impairment is charged-off at the time the loan moves to non-accrual status. As of March 31, 2024, $2.9 million of the non-accrual loans included in the table below are secured by real estate and $109 thousand are unsecured.


	Aged Analysis of Past Due and Non-accrual Loans
	As of March 31, 2024
													Recorded		Recorded
													Investment		Investment
	30 - 59 Days		60 - 89 Days		90 Days		Total Past				Total Loans		>90 Days and		Loans on
(Dollar amounts in thousands)	Past Due		Past Due		Or Greater		Due		Current		Receivable		Accruing		Non-Accrual
Residential real estate:
1 - 4 family	$	165	$	384	$	250	$	799	$	127,193	$	127,992	$	—	$	1,326
Home equity and HELOCs		3		—		452		455		30,214		30,669		—		452
Construction - residential		—		—		—		—		12,258		12,258		—		—
Commercial real estate:
1 - 4 family investor		—		971		—		971		93,326		94,297		—		93
Multi-family		—		—		—		—		15,848		15,848		—		206
Commercial non-residential		—		—		811		811		163,019		163,830		—		811
Construction and land		—		—		—		—		19,535		19,535		—		—
Commercial		—		—		—		—		14,998		14,998		—		—
Consumer		—		18		—		18		1,932		1,950		—		109
Total	$	168	$	1,373	$	1,513	$	3,054	$	478,323	$	481,377	$	—	$	2,997


	Aged Analysis of Past Due and Non-accrual Loans
	As of June 30, 2023
															Recorded		Recorded
									Acquired						Investment		Investment
	30 - 59 Days		60 - 89 Days		90 Days		Total Past		Credit				Total Loans		>90 Days and		Loans on
(Dollar amounts in thousands)	Past Due		Past Due		Or Greater		Due		Impaired		Current		Receivable		Accruing		Non-Accrual
Residential real estate:
1 - 4 family	$	290	$	457	$	567	$	1,314	$	72	$	133,660	$	135,046	$	—	$	2,090
Home equity and HELOCs		—		—		—		—		—		32,684		32,684		—		—
Construction - residential		—		—		—		—		—		9,113		9,113		—		—
Commercial real estate:
1 - 4 family investor		—		752		—		752		—		97,408		98,160		—		832
Multi-family		251		—		—		251		—		15,030		15,281		—		251
Commercial non-residential		—		322		778		1,100		—		156,455		157,555		—		778
Construction and land		—		—		—		—		—		15,584		15,584		—		—
Commercial		—		—		—		—		—		15,433		15,433		—		—
Consumer		—		13		—		13		—		1,987		2,000		—		82
Total	$	541	$	1,544	$	1,345	$	3,430	$	72	$	477,354	$	480,856	$	—	$	4,033

Interest income on non-accrual loans that would have been recorded if these loans had performed in accordance with their terms was approximately $54 thousand, $146 thousand, $63 thousand, and $188 thousand during the three and nine months ended March 31, 2024 and 2023, respectively.

Impaired Loans – Prior to the Adoption of ASU 2016-13

Management considers commercial loans and commercial real estate loans which are 90 days or more past due to be impaired. Larger commercial loans and commercial real estate loans which are 60 days or more past due are selected for impairment testing in accordance with GAAP. Factors considered by management in determining impairment include payment status and collateral value. The amount of impairment for these types of loans is determined by the difference between the present value of the expected cash flows related to the loan, using the original interest rate, and its recorded value, or as a practical expedient in the case of collateralized loans, the difference between the fair value of the collateral and the recorded amount of the loans. These loans are analyzed to determine if it is probable that all amounts will not be collected according to the contractual terms of the loan agreement. If management determines that the value of

the impaired loan is less than the recorded investment in the loan (net of previous charge-offs, deferred loan fees or costs and unamortized premium or discount), impairment is recognized through an allowance estimate or a charge-off to the allowance for loan losses.

The following tables include the recorded investment and unpaid principal balances for impaired loans with the associated allowance amount, if applicable, at June 30, 2023.


June 30, 2023
			Unpaid
	Recorded		Principal		Related
(Dollars in thousands)	Investment		Balance		Allowance
With no related allowance recorded:
1-4 family residential real estate	$	1,209	$	1,302	$	—
Home equity and HELOCs		182		182		—
Construction residential		—		—		—
1 - 4 family investor commercial real estate		832		850		—
Multi-family		251		283		—
Commercial non-residential		778		783		—
Construction and land		—		—		—
Commercial		—		—		—
Consumer		—		—		—

With an allowance recorded:
1-4 family residential real estate	$	—	$	—	$	—
Home equity and HELOCs		—		—		—
Construction residential		—		—		—
1 - 4 family investor commercial real estate		—		—		—
Multi-family		—		—		—
Commercial non-residential		—		—		—
Construction and land		—		—		—
Commercial		—		—		—
Consumer		—		—		—

Total:
1-4 family residential real estate	$	1,209	$	1,302	$	—
Home equity and HELOCs		182		182		—
Construction residential		—		—		—
1 - 4 family investor commercial real estate		832		850		—
Multi-family		251		283		—
Commercial non-residential		778		783		—
Construction and land		—		—		—
Commercial		—		—		—
Consumer		—		—		—

The impaired loans table above includes accruing loans with terms that have been modified to borrowers experiencing financial difficulty in the amount of $182 thousand that are performing in accordance with their modified terms. The Company recognized $11 thousand and $30 thousand of interest income on accruing loans with terms that have been modified to borrowers experiencing financial difficulty during the three and nine months ended March 31, 2023, respectively. The table above does not include $72 thousand of loans acquired with deteriorated credit quality, which have been recorded at their fair value at acquisition.

The following tables include the average recorded investment balances for impaired loans and the interest income recognized for the three and nine months ended March 31, 2023.


March 31, 2023	Three Months Ended				Nine Months Ended
	Average		Interest		Average		Interest
	Recorded		Income		Recorded		Income
(Dollars in thousands)	Investment		Recognized		Investment		Recognized
With no related allowance recorded:
1-4 family residential real estate	$	1,617	$	—	$	1,955	$	—
Home equity and HELOCs		381		6		371		14
Construction residential		—		—		—		—
1-4 family investor commercial real estate		94		—		106		1
Multi-family		273		—		282		—
Commercial non-residential		1,056		5		1,120		17
Construction and land		—		—		—		—
Commercial		—		—		—		—
Consumer		—		—		—		—

With an allowance recorded:
1-4 family residential real estate	$	—	$	—	$	—	$	—
Home equity and HELOCs		—		—		—		—
Construction residential		—		—		—		—
1-4 family investor commercial real estate
Multi-family		—		—		—		—
Commercial non-residential		—		—		—		—
Construction and land		—		—		—		—
Commercial		—		—		—		—
Consumer		—		—		—		—

Total:
1-4 family residential real estate	$	1,617	$	—	$	1,955	$	—
Home equity and HELOCs		381		6		371		14
Construction residential		—		—		—		—
1-4 family investor commercial real estate		94		—		106		1
Multi-family		273		—		282		—
Commercial non-residential		1,056		5		1,120		17
Construction and land		—		—		—		—
Commercial		—		—		—		—
Consumer		—		—		—		—

Generally, the Bank charges-off the collateral or discounted cash flow deficiency on all impaired loans. Interest income that would have been recorded for the three and nine months ended March 31, 2023, had impaired loans been current according to their original terms, amounted to $31 thousand and $107 thousand, respectively.

Concentration of Credit Risk

The Company’s primary business activity as of March 31, 2024 was with customers throughout the Delaware Valley through twelve full-service branch offices located in Bucks and Philadelphia Counties in Pennsylvania, as well as Burlington, Camden, and Mercer Counties in New Jersey. Accordingly, the Company has extended credit primarily to residential borrowers and commercial entities in this area whose ability to repay their loans is influenced by the region’s economy.

As of March 31, 2024, the Company considered its concentration of credit risk to be acceptable. As of March 31, 2024, commercial real estate loans secured by retail space totaled approximately $64.5 million, or 13.4% of total loans, and were comprised of $53.3 million of non-owner-occupied properties and $11.2 million of owner-occupied properties. The Company’s non-owner occupied commercial real estate loans that are secured by retail space have high occupancy rates with longstanding tenants.

Loans with Modified Terms to Borrowers Experiencing Financial Difficulty

During the three and nine months ended March 31, 2024, there were no loans modified to borrowers experiencing financial difficulty. During the three and nine months ended March 31, 2023, there were no loans modified that were identified as a troubled debt restructuring (“TDR”) and there were no TDRs that subsequently defaulted within twelve months of modification.