0001558370-24-015516 | 10-Q | XBRL Viewer

REGULATORY MATTERS

9 Months Ended

Sep. 30, 2024

6. REGULATORY MATTERS

The Bank is subject to various regulatory capital requirements administered by federal banking agencies. Capital adequacy regulations and, additionally, prompt corrective action regulations, involve quantitative measures of assets, liabilities, and certain off-balance sheet items calculated under regulatory accounting practices. Capital amounts and classifications are also subject to qualitative judgments by regulators. Failure to meet minimum capital requirements can initiate regulatory action. The effects of accumulated other comprehensive income or loss is not included in computing regulatory capital. Management believes as of September 30, 2024, the Bank meets all capital adequacy requirements to which it is subject.

In addition to the minimum capital requirements discussed above, the Bank is also required to maintain a capital buffer above the requirements set forth in the capital adequacy regulations. Failure to maintain the required buffer could impair the Bank’s ability to pay dividends to the Company and to pay certain compensation to its executives.

Prompt corrective action regulations provide five classifications: well capitalized, adequately capitalized, undercapitalized, significantly undercapitalized and critically undercapitalized, although these terms are not used to represent overall financial condition. If adequately capitalized or worse, regulatory approval is required to accept brokered deposits. If undercapitalized, capital distributions are limited, as is asset growth and expansion, and capital restoration plans are required. At September 30, 2024 and December 31, 2023, the most recent regulatory notifications categorized the Bank as well capitalized under the regulatory framework for prompt corrective action. There are no conditions or events since that notification that management believes have changed the institution’s category.

Under a policy of the Federal Reserve applicable to bank holding companies with less than $3.0 billion in consolidated assets, the Company is not subject to consolidated regulatory capital requirements.

The following table sets forth the Bank’s actual and required capital amounts (in thousands) and ratios under current regulations:


									Minimum Capital				Minimum to Be Well
									Adequacy Requirement				Capitalized Under
					Minimum Capital				with Capital				Prompt Corrective
	Actual Capital				Adequacy Requirement				Conservation Buffer				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2024
Total capital to risk-weighted assets	$	217,299	14.24	%	$	122,055	8.00	%	$	160,197	10.50	%	$	152,568	10.00	%
Tier 1 capital to risk-weighted assets		198,196	12.99	%		91,541	6.00	%		129,683	8.50	%		122,055	8.00	%
Common equity tier 1 capital to risk-weighted assets		198,196	12.99	%		68,656	4.50	%		106,798	7.00	%		99,169	6.50	%
Tier 1 capital to average total assets		198,196	8.85	%		89,623	4.00	%		N/A	N/A			112,028	5.00	%

December 31, 2023
Total capital to risk-weighted assets	$	210,071	14.31	%	$	117,472	8.00	%	$	154,182	10.50	%	$	146,840	10.00	%
Tier 1 capital to risk-weighted assets		193,324	13.17	%		88,104	6.00	%		124,814	8.50	%		117,472	8.00	%
Common equity tier 1 capital to risk-weighted assets		193,324	13.17	%		66,078	4.50	%		102,788	7.00	%		95,446	6.50	%
Tier 1 capital to average total assets		193,324	9.08	%		85,131	4.00	%		N/A	N/A			106,414	5.00	%

Dividend restrictions - The Company’s principal source of funds for dividend and debt service payments is dividends received from the Bank. During the nine months ended September 30, 2024 the Bank paid $4.4 million in cash dividends to the Company. Banking regulations limit the amount of dividends that may be paid without prior approval of regulatory agencies. As of September 30, 2024, the Bank had $29.8 million of retained net income available for dividends to the Company, without obtaining regulatory approval, provided that the Bank satisfies the regulatory capital requirements, including the capital conservation buffer, disclosed above.

- Definition

The entire disclosure for regulatory capital requirement for depository and lending institutions. Institutions include, but not are not limited to, finance company, insured depository institution, bank holding company, savings and loan association holding company, bank and savings institution not federally insured, mortgage company, foreign financial institution and credit union.

+ References + Details

EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2024

EARNINGS PER SHARE

Calculations of Basic and Diluted Earnings Per Share


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share and per share data)	2024		2023		2024		2023

Net income available to common stockholders	$	3,539	$	3,523	$	8,444	$	9,826
Less: Dividends paid and earnings allocated to participating securities		(109)		(115)		(264)		(355)
Income attributable to common stock	$	3,430	$	3,408	$	8,180	$	9,471
Weighted average common shares outstanding, including participating securities		7,411,064		7,327,345		7,395,758		7,327,836
Less: Weighted average participating securities		(242,214)		(253,746)		(248,116)		(276,251)
Weighted average common shares outstanding		7,168,850		7,073,599		7,147,642		7,051,585
Basic EPS	$	0.48	$	0.48	$	1.14	$	1.34

Income attributable to common stock	$	3,430	$	3,408	$	8,180	$	9,471
Weighted average common shares outstanding		7,168,850		7,073,599		7,147,642		7,051,585
Weighted average common equivalent shares outstanding		25,004		80,138		24,657		80,118
Weighted average common and equivalent shares outstanding		7,193,854		7,153,737		7,172,299		7,131,703
Diluted EPS	$	0.48	$	0.48	$	1.14	$	1.33

FAIR VALUE - Assets Measured at Fair Value on Non-recurring Basis (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
FAIR VALUE
Measurement input		397,000
Nonrecurring
FAIR VALUE
Assets measured at fair value	$ 0
Nonrecurring \| Multi-family \| Individually evaluated loans \| Carrying Amount
FAIR VALUE
Assets measured at fair value		$ 1,180,000
Nonrecurring \| Significant Unobservable Inputs (Level 3) \| Multi-family \| Individually evaluated loans
FAIR VALUE
Assets measured at fair value		1,180,000
Nonrecurring \| Significant Unobservable Inputs (Level 3) \| Multi-family \| Individually evaluated loans \| Fair Value Measurements
FAIR VALUE
Assets measured at fair value		$ 1,180,000

SUBORDINATED DEBENTURES (Details) - USD ($) $ in Thousands	1 Months Ended	3 Months Ended		9 Months Ended
SUBORDINATED DEBENTURES (Details) - USD ($) $ in Thousands	Oct. 31, 2020	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Debt Instruments [Abstract]
Aggregate principal amount		$ 25,000		$ 25,000		$ 25,000
Unamortized issuance costs		325		325		$ 365
Subordinated Notes
Debt Instruments [Abstract]
Issuance costs		$ 13	$ 13	$ 40	$ 40
Subordinated Notes \| Private Placement
Debt Instruments [Abstract]
Aggregate principal amount	$ 25,000
Debt instrument, maturity date	Dec. 31, 2030
Subordinated Notes \| Private Placement \| Until October 15, 2025
Debt Instruments [Abstract]
Borrowing rate of interest	5.00%
Subordinated Notes \| Private Placement \| From and Including October 15, 2025
Debt Instruments [Abstract]
Basis spread on variable rate				4.874%
Debt Instrument, Variable Interest Rate, Type [Extensible Enumeration]				us-gaap:SecuredOvernightFinancingRateSofrMember
Term of variable rate				3 months

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Other comprehensive income (loss), net of tax:
Change in unrealized gain (loss) on securities available for sale arising during the period, Tax	$ 122	$ (42)	$ 142	$ (266)
Reclassification adjustment for gains realized in net income, Tax	0	0	(1)	0
Change in unrealized gain on cash flow hedges arising during the period, Tax	$ (340)	$ 66	$ (49)	$ 97

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ 3,539	$ 844	$ 4,061	$ 3,523	$ 3,094	$ 3,209	$ 8,444	$ 9,826

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

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+ Details

FAIR VALUE - Additional quantitative information measured at fair value on non-nonrecurring basis (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
FAIR VALUE
Percentage of weighted average		50.00%
Nonrecurring
FAIR VALUE
Assets measured at fair value	$ 0
Nonrecurring \| Significant Unobservable Inputs (Level 3) \| Multi-family \| Individually evaluated loans
FAIR VALUE
Assets measured at fair value		$ 1,180,000
Percentage of weighted average		50.00%

EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
EARNINGS PER SHARE
Antidilutive stock options (in shares)	0			0			0	0
Earnings Per Share, Basic
Net income available to common stockholders	$ 3,539	$ 844	$ 4,061	$ 3,523	$ 3,094	$ 3,209	$ 8,444	$ 9,826
Less: Dividends paid and earnings allocated to participating securities	(109)			(115)			(264)	(355)
Income attributable to common stock	$ 3,430			$ 3,408			$ 8,180	$ 9,471
Weighted average common shares outstanding, including participating securities	7,411,064			7,327,345			7,395,758	7,327,836
Less: Weighted average participating securities	(242,214)			(253,746)			(248,116)	(276,251)
Weighted average common shares outstanding	7,168,850			7,073,599			7,147,642	7,051,585
Basic EPS	$ 0.48			$ 0.48			$ 1.14	$ 1.34
Earnings Per Share, Diluted
Income attributable to common stock	$ 3,430			$ 3,408			$ 8,180	$ 9,471
Weighted average common shares outstanding	7,168,850			7,073,599			7,147,642	7,051,585
Weighted average common equivalent shares outstanding	25,004			80,138			24,657	80,118
Weighted average common and equivalent shares outstanding	7,193,854			7,153,737			7,172,299	7,131,703
Diluted EPS	$ 0.48			$ 0.48			$ 1.14	$ 1.33

DERIVATIVES - Fair value hedges on the Consolidated Statements of Income (Details) - Interest rate swap - Fair value hedges - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Derivative [Line Items]
Fair value hedges		$ 0		$ 0
Loss on hedged items recorded in interest income on loans	$ 28		$ 32
Gains on hedge recorded in interest income on loans	$ 93		$ 284

SUBORDINATED DEBENTURES

9 Months Ended

Sep. 30, 2024

SUBORDINATED DEBENTURES

SUBORDINATED DEBENTURES

9. SUBORDINATED DEBENTURES

In October 2020, the Company completed the private placement of $25.0 million in aggregate principal amount of fixed-to-floating rate subordinated notes due 2030 (the “Notes”) to certain qualified institutional buyers and accredited investors. The Notes bear interest, payable semi-annually, at the rate of 5.00% per annum, until October 15, 2025. From and including October 15, 2025 through maturity, the interest rate applicable to the outstanding principal amount due will reset quarterly to the then current three-month Secured Overnight Financing Rate (“SOFR”) plus 487.4 basis points. The Company may, at its option, beginning with the interest payment date of October 15, 2025, but not generally prior thereto, and on any scheduled interest payment date thereafter, redeem the Notes, in whole or in part, subject to the receipt of any required regulatory approval. The Notes are not subject to redemption at the option of the holder. The portion of the proceeds of these subordinated notes contributed to the Bank is included as a component of the Bank’s Tier 1 capital for regulatory reporting.

At September 30, 2024 and December 31, 2023, the unamortized issuance costs of the Notes were $0.3 million and $0.4 million, respectively. For the three months ended September 30, 2024 and 2023, $13 thousand in issuance costs were recorded in interest expense. For the nine months ended September 30, 2024 and 2023, $40 thousand in issuance costs were recorded in interest expense. The Notes are presented net of unamortized issuance costs in the Company’s Consolidated Statements of Financial Condition.

LOANS - Recorded investment in loans on nonaccrual status and loans past due over 89 days still accruing (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	$ 12,593		$ 12,847
Nonaccrual	15,365		14,451
Interest income on nonaccrual loans	100	$ 200
Amortized cost basis of individually analyzed loans	14,700
Collateral Pledged [Member]
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Amortized cost basis of individually analyzed loans	14,471		13,840
Residential real estate
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	5,079		4,369
Nonaccrual	5,079		4,369
Multi-family
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	2,942		1,794
Nonaccrual	2,942		3,374
Commercial real estate
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	2,501		5,976
Nonaccrual	2,525		6,000
Commercial and industrial
Amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing
Nonaccrual With No Allowance for Credit Loss	2,071		708
Nonaccrual	$ 4,819		$ 708

DERIVATIVES - Cumulative basis adjustment for fair value hedges (Details) - Interest rate swap - Fair value hedges - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Derivative [Line Items]
Carrying amount of the hedged assets	$ 50,000	$ 50,000
Fair value hedging adjustment included in the carrying amount of the hedged assets	1,223	1,119
Amortized cost basis of the closed portfolios	$ 392,000	$ 410,300

EQUITY COMPENSATION PLANS

9 Months Ended

Sep. 30, 2024

EQUITY COMPENSATION PLANS

EQUITY COMPENSATION PLANS

5. EQUITY COMPENSATION PLANS

The Company’s 2021 and 2018 Equity Compensation Plans (the “2021 Plan” and the “2018 Plan,” respectively), provide for the grant of stock-based compensation awards to members of management, including employees and management officials, and members of the Board. Under the 2021 Plan, a total of 427,500 shares of the Company’s common stock or equivalents were approved for issuance, of which 230,966 shares remain available for issuance at September 30, 2024. Of the total 346,000 shares of common stock approved for issuance under the 2018 Plan, 2,780 shares remain available for issuance at September 30, 2024.

Stock Options

Stock options are granted with an exercise price equal to the fair market value of the Company’s common stock at the date of grant, and generally with vesting periods of three years and contractual terms of ten years. All stock options fully vest upon a change in control.

The fair value of stock options is estimated on the date of grant using a closed form option valuation (Black-Scholes) model. Expected volatilities are based on historical volatilities of the common stock of the Company’s peers. The Company uses historical data to estimate option exercise and post-vesting termination behavior. Expected terms are based on historical data and represent the periods in which the options are expected to be outstanding. The risk-free interest rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

There were 99,392 stock options exercised resulting in the net issuance (after netting the value of the exercise price and/or certain tax liabilities) of 39,170 shares of common stock during the nine months ended September 30, 2024 and no stock options exercised during the nine months ended September 30, 2023.

A summary of stock option activity follows (aggregate intrinsic value in thousands):


						Weighted
		Weighted				Average
		Average		Aggregate		Remaining
	Number of	Exercise		Intrinsic		Contractual
	Options	Price		Value		Term
Outstanding, January 1, 2024	158,933	$	9.37	$	1,314	1.14 years
Granted	—		—
Exercised	(99,392)		10.00
Forfeited	(1,541)		16.25
Outstanding, September 30, 2024 ⁽¹⁾	58,000	$	8.11	$	587	1.07 years

(1)	All outstanding options are fully vested and exercisable.

The following table presents information related to the stock option plan for the periods presented:


	Nine Months Ended September 30,
(in thousands)	2024		2023
Intrinsic value of options exercised	$	736	$	—
Cash received from option exercises		103		—
Tax benefit from option exercises		229		—

There was no compensation expense attributable to stock options for the three and nine months ended September 30, 2024 and 2023.

Restricted Stock Awards

During the nine months ended September 30, 2024, restricted stock awards of 59,161 shares were granted with a five-year vesting period. Compensation expense is recognized over the vesting period of the awards based on the fair value of the stock at issue date.

A summary of restricted stock awards activity follows:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, January 1, 2024	252,502	$	19.58
Granted	59,161		17.03
Vested	(66,617)		19.65
Forfeited	(5,428)		19.74
Unvested, September 30, 2024	239,618	$	18.93

Compensation expense attributable to restricted stock awards was $360 thousand and $219 thousand for the three months ended September 30, 2024 and 2023, respectively. Compensation expense attributable to restricted stock awards was $1.0 million and $1.3 million for the nine months ended September 30, 2024 and 2023, respectively. As of September 30, 2024, there was $3.4 million of total unrealized compensation cost related to unvested restricted stock, expected to be recognized over a weighted-average term of 3.16 years. The total fair value of shares vested during the nine months ended September 30, 2024 and 2023 was $1.2 million and $1.4 million, respectively.

Restricted Stock Units

Long Term Incentive Plan

Restricted stock units (“RSU”s) represent an obligation to deliver shares to a grantee at a future date if certain vesting conditions are met. RSUs are subject to a time-based vesting schedule and the satisfaction of performance conditions and are settled in shares of the Company's common stock. RSUs do not provide voting rights and RSUs may accrue dividends from the date of grant.

The following table summarizes the unvested performance-based RSU activity for the nine months ended September 30, 2024:


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, January 1, 2024	38,271	$	19.73
Granted	—		—
Vested	—		—
Forfeited	—		—
Unvested, September 30, 2024	38,271	$	19.73

No RSUs were granted during the nine months ended September 30, 2024. Performance-based RSUs granted in 2022 cliff vest after three years and are subject to the achievement of the Company's pre-defined performance goals for the three-year period ending December 31, 2024.

Compensation expense attributable to RSUs was $56 thousand and $17 thousand, respectively, for the three months ended September 30, 2024 and 2023. Compensation expense attributable to RSUs was $168 thousand and $149 thousand, respectively, for the nine months ended September 30, 2024 and 2023. As of September 30, 2024, there was $88 thousand of total unrecognized compensation cost related to non-vested RSUs. The cost is expected to be recognized over a weighted-average period of 0.39 years.

FAIR VALUE - Changes in Loan Servicing Rights (Details) - Mortgage Servicing Rights - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Changes in Mortgage Servicing Rights
Balance at beginning of period	$ 5,465	$ 4,375	$ 4,668	$ 4,402
Additions	518	265	1,596	757
Adjustment to fair value	(218)	(161)	(499)	(680)
Balance at end of period	$ 5,765	$ 4,479	$ 5,765	$ 4,479

BORROWINGS (Tables)

9 Months Ended

Sep. 30, 2024

BORROWINGS

Federal Home Loan Bank, Advance, Branch of FHLBank

The following table sets forth the contractual maturities and weighted average interest rates of the Company’s fixed rate FHLB advances for each of the next five years (in thousands):


	Balance at September 30,
	2024
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	18,000	5.08	%

2025, rates from 0.56% to 0.59%		7,080	0.58	%
2026, rates from 4.29% to 4.98%		40,475	4.50	%
2027, rates from 4.13% to 4.74%		40,250	4.32	%
2028, rates from 3.99% to 4.58%		20,000	4.18	%
Total term advances		107,805	4.11	%
Total FHLB advances	$	125,805	4.25	%


	Balance at December 31,
	2023
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	—	—	%

2024, rates from 0.39% to 2.53%		18,860	0.98	%
2025, rates from 0.56% to 0.59%		7,080	0.58	%
2026, rates from 4.29% to 4.98%		40,475	4.50	%
2027, rates from 4.13% to 4.74%		40,250	4.32	%
2028, rates from 3.99% to 4.58%		20,000	4.18	%
Total term advances		126,665	3.65	%
Total FHLB advances	$	126,665	3.65	%

EQUITY COMPENSATION PLANS (Tables)

9 Months Ended

Sep. 30, 2024

EQUITY COMPENSATION PLANS

Share-Based Payment Arrangement, Option, Activity [Table Text Block]

A summary of stock option activity follows (aggregate intrinsic value in thousands):


						Weighted
		Weighted				Average
		Average		Aggregate		Remaining
	Number of	Exercise		Intrinsic		Contractual
	Options	Price		Value		Term
Outstanding, January 1, 2024	158,933	$	9.37	$	1,314	1.14 years
Granted	—		—
Exercised	(99,392)		10.00
Forfeited	(1,541)		16.25
Outstanding, September 30, 2024 ⁽¹⁾	58,000	$	8.11	$	587	1.07 years

(1)	All outstanding options are fully vested and exercisable.

Schedule of information related to the stock option plan


	Nine Months Ended September 30,
(in thousands)	2024		2023
Intrinsic value of options exercised	$	736	$	—
Cash received from option exercises		103		—
Tax benefit from option exercises		229		—

Summary of Restricted Stock Awards Activity


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, January 1, 2024	252,502	$	19.58
Granted	59,161		17.03
Vested	(66,617)		19.65
Forfeited	(5,428)		19.74
Unvested, September 30, 2024	239,618	$	18.93

Summary of Restricted Stock Units Activity


		Weighted-Average
	Number of	Grant Date Fair
	Shares	Value
Unvested, January 1, 2024	38,271	$	19.73
Granted	—		—
Vested	—		—
Forfeited	—		—
Unvested, September 30, 2024	38,271	$	19.73

CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($)
$ in Thousands

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

Cash flows from operating activities:

Net income

$ 8,444

$ 9,826

Adjustments to reconcile net income to net cash provided by operating activities:

Provision for credit losses

^[1],[2]

4,540

1,932

Depreciation and amortization

1,594

1,391

Amortization of right-of-use assets

1,279

1,216

Net gain on sale of securities available-for-sale

(4)

Stock-based compensation

1,199

1,431

Net gain on sale of loans held-for-sale

(7,926)

(3,515)

Net amortization (accretion) of premiums, discounts and loan fees and costs

866

(596)

Amortization of intangible assets

Amortization of debt issuance costs

Loan servicing rights valuation adjustments

499

680

Deferred tax expense

1,231

Increase in accrued interest receivable

(607)

(1,106)

Increase in other assets

(5,136)

(684)

Increase in accrued interest payable

141

979

Increase (decrease) in other liabilities

878

(1,391)

Payments on operating leases

(1,288)

(1,164)

Net cash provided by operating activities

4,565

10,324

Cash flows from investing activities:

Purchases of securities available-for-sale

(558,084)

Repayments of restricted securities, net

1,652

Proceeds from sales of securities available-for-sale

868

Principal repayments of securities held to maturity

210

225

Principal repayments of securities available-for-sale

520,884

Proceeds from sales of loans

110,795

41,734

Net increase in loans

(160,934)

(168,087)

Purchases of premises and equipment

(2,081)

(2,562)

Net cash used in investing activities

(88,271)

(127,000)

Cash flows from financing activities:

Net increase in deposits

53,160

217,775

Proceeds from term FHLB advances

100,725

Repayments of term FHLB advances

(18,860)

(11,800)

Proceeds from Federal Reserve Bank borrowings

20,000

Repayments of Federal Reserve Bank borrowings

(22,288)

(4,334)

Proceeds (repayments) of other short-term borrowings, net

18,000

(143,000)

(167)

(164)

Cash dividends paid

(2,218)

(2,200)

Proceeds from exercise of stock options

103

Net cash provided by financing activities

47,730

157,002

(Decrease) increase in cash and cash equivalents

(35,976)

40,326

Cash and cash equivalents, beginning of period

177,207

152,298

Cash and cash equivalents, end of period

141,231

192,624

Supplemental cash flow information:

Interest paid

60,540

42,264

Income taxes paid

4,032

4,353

Supplemental non-cash disclosure:

Transfers from portfolio loans to loans held-for-sale

110,686

$ 43,769

Preferred stock issued in exchange for common stock

2,078

Lease liabilities arising from obtaining right-of-use assets

$ 301

[1]	Commencing on October 1, 2023 the allowance calculation is based on the current expected credit loss methodology. Prior to October 1, 2023 the calculation was based on the incurred loss methodology. Refer to Note 1 for further discussion.
[2]	Commencing on October 1, 2023 the allowance calculation is based on the current expected credit loss methodology. Prior to October 1, 2023 the calculation was based on the the incurred loss methodology. Refer to Note 1 for further discussion.

LOANS - Troubled Debt Restructuring (Details)	9 Months Ended
LOANS - Troubled Debt Restructuring (Details)	Sep. 30, 2024 USD ($)
Financing Receivable, Modified [Line Items]
Commitments to lend additional funds in troubled debt restructurings	$ 0
Financing Receivable, Modified, after 12 Months	0
Financing Receivable, Excluding Accrued Interest, Modified, Subsequent Default	$ 0
Multi-family
Financing Receivable, Modified [Line Items]
Financing Receivable, Excluding Accrued Interest, Modified in Period, to Total Financing Receivables, Percentage	0.20%
Principal Reduction \| Multi-family
Financing Receivable, Modified [Line Items]
Financing Receivable, Excluding Accrued Interest, Modified, Accumulated	$ 1,140,000
FinancingReceivableExcludingAccruedInterestModifiedIncreaseDecreaseFromModification	$ 362,000
Term Extension \| Multi-family
Financing Receivable, Modified [Line Items]
Financing Receivable, Modified, Weighted Average Term Increase from Modification	0 months

DERIVATIVES - Cash flow hedges included in the consolidated statements of financial condition (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Derivative [Line Items]
Liabilities, Notional Amount	$ 125,000	$ 125,000
Fair Value Liability	$ (2,657)	$ (2,361)
Interest rate swap \| Cash flow hedge
Derivative [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Liabilities, Notional Amount	$ 75,000	$ 75,000
Fair Value Liability	$ (1,480)	$ (1,256)
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities
Interest rate swap \| Fair value hedges
Derivative [Line Items]
Derivative Asset, Statement of Financial Position [Extensible Enumeration]	Other assets	Other assets
Liabilities, Notional Amount	$ 50,000	$ 50,000
Fair Value Liability	$ (1,177)	$ (1,105)
Derivative Liability, Statement of Financial Position [Extensible Enumeration]	Other liabilities	Other liabilities

- Definition

Fair value, after the effects of master netting arrangements, of a financial liability or contract with one or more underlyings, notional amount or payment provision or both, and the contract can be net settled by means outside the contract or delivery of an asset. Includes liabilities not subject to a master netting arrangement and not elected to be offset.

+ References

Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
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Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 820
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Reference 3: http://www.xbrl.org/2009/role/commonPracticeRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

- Definition

Nominal or face amount used to calculate payments on the derivative liability.

+ References + Details

SECURITIES - Investment Securities Available for Sale and Held to Maturity (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	$ 99,586	$ 63,292
Gross Unrealized Gains	335	82
Gross Unrealized Losses	(1,562)	(1,955)
Allowance for Credit Losses	0	0
Fair Value	98,359	61,419
Debt Securities, Held-to-Maturity, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	3,828	4,041
Gross Unrealized Losses	(121)	(206)
Fair Value	3,707	3,835
Allowance for Credit Losses	0	0
Holdings of securities issued by U.S. Government exceeding 10% of shareholders' equity	102,066
U.S. Treasury securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	24,925
Fair Value	24,925
U.S. GSE residential mortgage-backed securities
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	7,787	309
Gross Unrealized Gains	62
Gross Unrealized Losses	(119)	(108)
Fair Value	7,730	201
Debt Securities, Held-to-Maturity, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	1,313	1,480
Gross Unrealized Losses	(59)	(96)
Fair Value	1,254	1,384
Collateralized loan obligations
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	46,479	50,283
Gross Unrealized Gains	196	82
Gross Unrealized Losses		(99)
Fair Value	46,675	50,266
Corporate bonds
Debt Securities, Available-for-Sale, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	20,395	12,700
Gross Unrealized Gains	77
Gross Unrealized Losses	(1,443)	(1,748)
Allowance for Credit Losses	0
Fair Value	19,029	10,952
U.S. GSE commercial mortgage-backed securities
Debt Securities, Held-to-Maturity, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Amortized Cost	2,515	2,561
Gross Unrealized Losses	(62)	(110)
Fair Value	2,453	2,451
U.S. Government
Debt Securities, Held-to-Maturity, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Holdings of securities issued by U.S. Government exceeding 10% of shareholders' equity	25,000	0
Asset Pledged as Collateral without Right \| Deposits
Debt Securities, Held-to-Maturity, Fair Value to Amortized Cost, after Allowance for Credit Loss [Abstract]
Investment securities pledged to secure public deposits	$ 30,800	$ 2,000

LOANS - Amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
LOANS
Individually evaluated for impairment	$ 14,700
Collateral Pledged [Member]
LOANS
Individually evaluated for impairment	14,471	$ 13,840
Individually evaluated for impairment	2,500	421
Residential real estate \| Residential real estate
LOANS
Individually evaluated for impairment	4,854	4,226
Multi-family \| Commercial real estate
LOANS
Individually evaluated for impairment	2,920	3,356
Individually evaluated for impairment		397
Commercial real estate \| Commercial real estate
LOANS
Individually evaluated for impairment	2,530	5,986
Individually evaluated for impairment		24
Commercial and industrial \| Residential real estate
LOANS
Individually evaluated for impairment		$ 272
Commercial and industrial \| Residential and commercial real estate
LOANS
Individually evaluated for impairment	4,167
Individually evaluated for impairment	$ 2,500

REGULATORY MATTERS (Tables)

9 Months Ended

Sep. 30, 2024

REGULATORY MATTERS

Capital Amounts and Ratios

The following table sets forth the Bank’s actual and required capital amounts (in thousands) and ratios under current regulations:


									Minimum Capital				Minimum to Be Well
									Adequacy Requirement				Capitalized Under
					Minimum Capital				with Capital				Prompt Corrective
	Actual Capital				Adequacy Requirement				Conservation Buffer				Action Provisions
	Amount		Ratio		Amount		Ratio		Amount		Ratio		Amount		Ratio
September 30, 2024
Total capital to risk-weighted assets	$	217,299	14.24	%	$	122,055	8.00	%	$	160,197	10.50	%	$	152,568	10.00	%
Tier 1 capital to risk-weighted assets		198,196	12.99	%		91,541	6.00	%		129,683	8.50	%		122,055	8.00	%
Common equity tier 1 capital to risk-weighted assets		198,196	12.99	%		68,656	4.50	%		106,798	7.00	%		99,169	6.50	%
Tier 1 capital to average total assets		198,196	8.85	%		89,623	4.00	%		N/A	N/A			112,028	5.00	%

December 31, 2023
Total capital to risk-weighted assets	$	210,071	14.31	%	$	117,472	8.00	%	$	154,182	10.50	%	$	146,840	10.00	%
Tier 1 capital to risk-weighted assets		193,324	13.17	%		88,104	6.00	%		124,814	8.50	%		117,472	8.00	%
Common equity tier 1 capital to risk-weighted assets		193,324	13.17	%		66,078	4.50	%		102,788	7.00	%		95,446	6.50	%
Tier 1 capital to average total assets		193,324	9.08	%		85,131	4.00	%		N/A	N/A			106,414	5.00	%

SECURITIES

9 Months Ended

Sep. 30, 2024

SECURITIES

SECURITIES

3. SECURITIES

The following tables summarize the amortized cost, fair value and allowance for credit losses of securities available for sale and securities held to maturity at September 30, 2024 and December 31, 2023 and the corresponding amounts of gross unrealized gains and losses recognized in accumulated other comprehensive loss and gross unrecognized gains and losses:


	September 30, 2024
			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit
(in thousands)	Cost		Gains		Losses		Losses		Fair Value
Available for sale:
U.S. Treasury securities	$	24,925	$	—	$	—	$	—	$	24,925
U.S. GSE residential mortgage-backed securities		7,787		62		(119)		—		7,730
Collateralized loan obligations		46,479		196		—		—		46,675
Corporate bonds		20,395		77		(1,443)		—		19,029
Total available for sale securities	$	99,586	$	335	$	(1,562)	$	—	$	98,359

			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized				for Credit
	Cost		Gains		Losses		Fair Value		Losses
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,313	$	—	$	(59)	$	1,254	$	—
U.S. GSE commercial mortgage-backed securities		2,515		—		(62)		2,453		—
Total held to maturity securities	$	3,828	$	—	$	(121)	$	3,707	$	—


	December 31, 2023
			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit
(in thousands)	Cost		Gains		Losses		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	309	$	—	$	(108)	$	—	$	201
Collateralized loan obligations		50,283		82		(99)		—		50,266
Corporate bonds		12,700		—		(1,748)		—		10,952
Total available for sale securities	$	63,292	$	82	$	(1,955)	$	—	$	61,419

			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized				for Credit
	Cost		Gains		Losses		Fair Value		Losses
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,480	$	—	$	(96)	$	1,384	$	—
U.S. GSE commercial mortgage-backed securities		2,561		—		(110)		2,451		—
Total held to maturity securities	$	4,041	$	—	$	(206)	$	3,835	$	—

The amortized cost and fair value of investment securities at September 30, 2024, by contractual maturity, are shown below. Expected maturities may differ from contractual maturities if borrowers have the right to call or prepay obligations with or without call or prepayment penalties. Securities not due at a single date are shown separately.


	September 30, 2024
	Amortized		Fair
(in thousands)	Cost		Value
Securities available for sale:
Due in one year or less	$	24,925	$	24,925
Due after one year through five years		1,000		1,024
Five to ten years		52,935		51,678
Beyond ten years		12,939		13,002
U.S. GSE residential mortgage-backed securities		7,787		7,730
Total securities available for sale		99,586		98,359
Securities held to maturity:
U.S. GSE residential mortgage-backed securities		1,313		1,254
U.S. GSE commercial mortgage-backed securities		2,515		2,453
Total securities held to maturity		3,828		3,707
Total investment securities	$	103,414	$	102,066

At September 30, 2024 and December 31, 2023, investment securities with a carrying amount of $30.8 million and $2.0 million, respectively, were pledged to secure public deposits and for other purposes required or permitted by law.

There were no sales of securities during the three months ended September 30, 2024. For the nine months ended September 30, 2024, proceeds from sales of securities available for sale totaled $0.9 million, with an associated gross realized gain of $4 thousand. There were no sales of securities during the three and nine months ended September 30, 2023.

There were holdings of $25.0 million in securities issued by the U.S. Government that exceeded 10% of stockholder’s equity at September 30, 2024. There were no holdings of securities of any one issuer in an amount greater than 10% of stockholders' equity at December 31, 2023.

The following tables summarize securities available-for-sale in an unrealized loss position for which an allowance for credit losses has not been recorded at September 30, 2024 and December 31, 2023, aggregated by major security type and length of time in a continuous unrealized loss position:


	September 30, 2024
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	3,473	$	(29)	$	186	$	(90)	7	$	3,659	$	(119)
Corporate bonds		1,565		(59)		11,316		(1,384)	9		12,881		(1,443)
Total available-for-sale	$	5,038	$	(88)	$	11,502	$	(1,474)	16	$	16,540	$	(1,562)


	December 31, 2023
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	—	$	—	$	201	$	(108)	5	$	201	$	(108)
Collateralized loan obligations		12,352		(99)		—		—	3		12,352		(99)
Corporate bonds		1,080		(120)		9,872		(1,628)	7		10,952		(1,748)
Total available-for-sale	$	13,432	$	(219)	$	10,073	$	(1,736)	15	$	23,505	$	(1,955)

Assessment of Available for Sale Debt Securities for Credit Risk

Management assesses the decline in fair value of investment securities periodically. Unrealized losses on debt securities may occur from current market conditions, increases in interest rates since the time of purchase, a structural change in an investment, volatility of earnings of a specific issuer, or deterioration in credit quality of the issuer. Management evaluates both qualitative and quantitative factors to assess whether an impairment exists. The following is a discussion of the credit quality characteristics of portfolio segments carrying unrealized losses at September 30, 2024.

Obligations of U.S. Government agencies and sponsored entities

The mortgage-backed securities held by the Company were issued by U.S government-sponsored entities and agencies. The decline in fair value is attributable to changes in interest rates and illiquidity, and not credit quality. The Company does not have the intent to sell these mortgage-backed securities and it is likely that it will not be required to sell the securities before their anticipated recovery. The Company considers these securities to carry zero loss estimates and no allowance for credit losses was recorded at September 30, 2024.

Corporate bonds

The Company’s corporate bond portfolio is comprised of subordinated debt issues of community and regional banks. Management considers the credit quality of each individual investment. Management reviewed the collectibility of these investments, taking into account such factors as the financial condition of the issuers, reported regulatory capital ratios, and credit ratings, when available, and other factors. All corporate bond debt securities continue to accrue interest and make payments as expected with no defaults or deferrals on the part of the issuers. The Company considers the potential credit risk of the issuers to be immaterial and has not allocated an allowance for credit losses on its corporate bond portfolio as of September 30, 2024.

DERIVATIVES (Tables)

9 Months Ended

Sep. 30, 2024

DERIVATIVES

cash flow hedges included in the consolidated statements of financial condition


	Assets				Liabilities
	Notional				Notional
(in thousands)	Amount		Fair Value ⁽¹⁾		Amount		Fair Value⁽¹⁾
September 30, 2024
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	—	$	—	$	75,000	$	(1,480)
Fair value hedges:
Interest rate swaps (Loans)		—		—		50,000		(1,177)
Total	$	—	$	—	$	125,000	$	(2,657)

December 31, 2023
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	—	$	—	$	75,000	$	(1,256)
Fair value hedges:
Interest rate swaps (Loans)		—		—		50,000		(1,105)
Total	$	—	$	—	$	125,000	$	(2,361)

(1)

Derivatives in a positive position are recorded as “Other assets” and derivatives in a negative position are recorded as “Other liabilities” in the Consolidated Statements of Financial Condition.

Net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
(Loss) gain recognized in other comprehensive income	$	(1,231)	$	237	$	(175)	$	348
Gain recognized in interest expense		184		96		557		104

Derivative instruments designated as fair value hedges


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Net gain on hedged items recorded in interest income on loans	$	28	$	—	$	32	$	—
Gain on hedge recorded in interest income on loans		93		—		284		—

Cumulative basis adjustment for fair value hedges


	September 30,		December 31,
(in thousands)	2024		2023
Loans receivable:
Carrying amount of the hedged assets⁽¹⁾	$	50,000	$	50,000
Fair value hedging adjustment included in the carrying amount of the hedged assets		1,223		1,119

(1)

This amount includes the amortized cost basis of the closed portfolios of loans receivable used to designate hedging relationships in which the hedged item is the stated amount of assets in the closed portfolios anticipated to be outstanding for the designated hedge period. At September 30, 2024 and December 31, 2023, the amortized cost basis of the closed portfolios used in the hedging relationships was $392.0 million and $410.3 million, respectively. The cumulative basis adjustments associated with these hedging relationships was $1.2 million and $1.1 million, respectively, and the amounts of the designated hedged items were $50.0 million and $50.0 million, respectively.

EQUITY COMPENSATION PLANS - Stock Option Plan (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2024 USD ($)
EQUITY COMPENSATION PLANS
Intrinsic value of options exercised	$ 736
Cash received from option exercises	103
Tax benefit from option exercises	$ 229

BORROWINGS - Federal Reserve Borrowings and Correspondent Bank Borrowings (Details) - USD ($)	Sep. 30, 2024	Dec. 31, 2023
Borrowings
Borrowings	$ 125,805,000	$ 128,953,000
Correspondent Bank Borrowings
Borrowings
Line of credit available for borrowing	92,000,000
Borrowings outstanding	0	0
PPPLF
Borrowings
Borrowings	$ 0	$ 2,300,000
Borrowing rate of interest	0.35%	0.35%
Federal Reserve Bank, Discount Window
Borrowings
Borrowings outstanding	$ 0
Line of Credit Facility, Maximum Borrowing Capacity	$ 263,700,000

- Definition

The carrying value as of the balance sheet date of the current and noncurrent portions of long-term obligations drawn from a line of credit, which is a bank's commitment to make loans up to a specific amount. Examples of items that might be included in the application of this element may consist of letters of credit, standby letters of credit, and revolving credit arrangements, under which borrowings can be made up to a maximum amount as of any point in time conditional on satisfaction of specified terms before, as of and after the date of drawdowns on the line. Includes short-term obligations that would normally be classified as current liabilities but for which (a) postbalance sheet date issuance of a long term obligation to refinance the short term obligation on a long term basis, or (b) the enterprise has entered into a financing agreement that clearly permits the enterprise to refinance the short-term obligation on a long term basis and the following conditions are met (1) the agreement does not expire within 1 year and is not cancelable by the lender except for violation of an objectively determinable provision, (2) no violation exists at the BS date, and (3) the lender has entered into the financing agreement is expected to be financially capable of honoring the agreement.

+ References + Details

Insider Trading Arrangements	3 Months Ended
Insider Trading Arrangements	Sep. 30, 2024
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) (Parenthetical) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Securities:
Held to maturity, fair value	$ 3,707	$ 3,835
Held to maturity, allowance for credit losses	0	0
Available for sale, allowance for credit losses	0	0
LIABILITIES AND STOCKHOLDERS' EQUITY
Face amount	25,000	25,000
Unamortized issuance costs	$ 325	$ 365
STOCKHOLDERS' EQUITY
Preferred stock, Series A, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, Series A, shares authorized (in shares)	15,000,000	15,000,000
Preferred stock, Series A, shares issued (in shares)	275,000	150,000
Preferred stock, Series A, shares outstanding (in shares)	275,000	150,000
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	17,000,000	17,000,000
Common stock, shares issued (in shares)	7,153,366	7,195,012
Common stock, shares outstanding (in shares)	7,153,366	7,195,012

FAIR VALUE - Assets Measured at Fair Value on Recurring Basis (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Financial assets:
Fair Value	$ 98,359	$ 61,419
Loan servicing rights	5,765	4,668
Financial liabilities:
Derivatives	2,657	2,361
U.S. Treasury securities
Financial assets:
Fair Value	24,925
U.S. GSE residential mortgage-backed securities
Financial assets:
Fair Value	7,730	201
Corporate bonds
Financial assets:
Fair Value	19,029	10,952
Recurring \| Carrying Amount
Financial assets:
Total	104,124	66,087
Financial liabilities:
Derivatives	2,657	2,361
Recurring \| Carrying Amount \| U.S. Treasury securities
Financial assets:
Fair Value	24,925
Recurring \| Carrying Amount \| U.S. GSE residential mortgage-backed securities
Financial assets:
Fair Value	7,730	201
Recurring \| Carrying Amount \| Collateralized loan obligations
Financial assets:
Fair Value	46,675	50,266
Recurring \| Carrying Amount \| Corporate bonds
Financial assets:
Fair Value	19,029	10,952
Recurring \| Carrying Amount \| Loan servicing rights
Financial assets:
Loan servicing rights	5,765	4,668
Recurring \| As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1)
Financial assets:
Total	0	0
Financial liabilities:
Derivatives	0	0
Recurring \| As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1) \| U.S. Treasury securities
Financial assets:
Fair Value	0
Recurring \| As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1) \| U.S. GSE residential mortgage-backed securities
Financial assets:
Fair Value	0	0
Recurring \| As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1) \| Collateralized loan obligations
Financial assets:
Fair Value	0	0
Recurring \| As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1) \| Corporate bonds
Financial assets:
Fair Value	0	0
Recurring \| As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1) \| Loan servicing rights
Financial assets:
Loan servicing rights	0	0
Recurring \| As Adjusted \| Significant Other Observable Inputs (Level 2)
Financial assets:
Total	98,359	61,419
Financial liabilities:
Derivatives	2,657	2,361
Recurring \| As Adjusted \| Significant Other Observable Inputs (Level 2) \| U.S. Treasury securities
Financial assets:
Fair Value	24,925
Recurring \| As Adjusted \| Significant Other Observable Inputs (Level 2) \| U.S. GSE residential mortgage-backed securities
Financial assets:
Fair Value	7,730	201
Recurring \| As Adjusted \| Significant Other Observable Inputs (Level 2) \| Collateralized loan obligations
Financial assets:
Fair Value	46,675	50,266
Recurring \| As Adjusted \| Significant Other Observable Inputs (Level 2) \| Corporate bonds
Financial assets:
Fair Value	19,029	10,952
Recurring \| As Adjusted \| Significant Other Observable Inputs (Level 2) \| Loan servicing rights
Financial assets:
Loan servicing rights	0	0
Recurring \| As Adjusted \| Significant Unobservable Inputs (Level 3)
Financial assets:
Total	5,765	4,668
Financial liabilities:
Derivatives	0	0
Recurring \| As Adjusted \| Significant Unobservable Inputs (Level 3) \| U.S. Treasury securities
Financial assets:
Fair Value	0
Recurring \| As Adjusted \| Significant Unobservable Inputs (Level 3) \| U.S. GSE residential mortgage-backed securities
Financial assets:
Fair Value	0	0
Recurring \| As Adjusted \| Significant Unobservable Inputs (Level 3) \| Collateralized loan obligations
Financial assets:
Fair Value	0	0
Recurring \| As Adjusted \| Significant Unobservable Inputs (Level 3) \| Corporate bonds
Financial assets:
Fair Value	0	0
Recurring \| As Adjusted \| Significant Unobservable Inputs (Level 3) \| Loan servicing rights
Financial assets:
Loan servicing rights	$ 5,765	$ 4,668

CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2024

Sep. 30, 2023

Sep. 30, 2024

Sep. 30, 2023

INTEREST INCOME

Loans

$ 31,356

$ 26,059

$ 92,217

$ 75,581

Taxable securities

1,619

198

4,610

594

Other interest income

1,138

2,695

3,138

6,296

Total interest income

34,113

28,952

99,965

82,471

INTEREST EXPENSE

Savings, NOW and money market deposits

13,941

10,186

39,541

27,883

Time deposits

5,546

4,060

15,418

9,657

Borrowings

1,524

2,907

5,722

5,703

Total interest expense

21,011

17,153

60,681

43,243

Net interest income

13,102

11,799

39,284

39,228

Provision for credit losses

^[1]

200

500

4,540

^[2]

1,932

^[2]

Net interest income after provision for credit losses

12,902

11,299

34,744

37,296

NON-INTEREST INCOME

Total non-interest income

3,954

3,707

11,152

7,437

NON-INTEREST EXPENSE

Salaries and employee benefits

6,840

5,351

18,901

16,320

Occupancy and equipment

1,799

1,758

5,412

4,882

Data processing

547

516

1,560

1,533

Professional fees

762

800

2,297

2,462

Federal deposit insurance premiums

360

386

1,043

1,101

Other expenses

1,930

1,506

5,499

5,152

Total non-interest expense

12,238

10,317

34,712

31,450

Income before income tax expense

4,618

4,689

11,184

13,283

Income tax expense

1,079

1,166

2,740

3,457

NET INCOME

$ 3,539

$ 3,523

$ 8,444

$ 9,826

Earnings per share:

BASIC (in dollars per share)

$ 0.48

$ 1.14

$ 1.34

DILUTED (in dollars per share)

$ 0.48

$ 1.14

$ 1.33

Loan servicing and fee income

NON-INTEREST INCOME

Revenue from contracts with customers, not included within the scope of ASC 606

$ 960

$ 681

$ 2,709

$ 2,031

Service charges on deposit accounts

NON-INTEREST INCOME

Revenue from contracts with customers, not included within the scope of ASC 606

123

333

212

Gain on sale of loans held-for-sale

NON-INTEREST INCOME

Revenue from contracts with customers, not included within the scope of ASC 606

2,834

1,468

7,926

3,515

Gain on sale of securities available-for-sale

NON-INTEREST INCOME

Revenue from contracts with customers, not included within the scope of ASC 606

Other income

NON-INTEREST INCOME

Revenue from contracts with customers, not included within the scope of ASC 606

$ 37

$ 1,483

$ 180

$ 1,679

[1]	Commencing on October 1, 2023 the allowance calculation is based on the current expected credit loss methodology. Prior to October 1, 2023 the calculation was based on the incurred loss methodology. Refer to Note 1 for further discussion.
[2]	Commencing on October 1, 2023 the allowance calculation is based on the current expected credit loss methodology. Prior to October 1, 2023 the calculation was based on the the incurred loss methodology. Refer to Note 1 for further discussion.

EQUITY COMPENSATION PLANS - Stock Options (Details) - Employee Stock Option - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Equity Compensation Plans
Award vesting period			3 years
Contractual term			10 years
Compensation expenses	$ 0	$ 0	$ 0	$ 0
Number of shares issued during period			39,170
Number of Options
Outstanding, beginning of period (in shares)			158,933
Granted (in shares)			0
Exercised (in shares)			(99,392)	0
Forfeited (in shares)			(1,541)
Outstanding, end of period (in shares)	58,000		58,000		158,933
Weighted-Average Exercise Price Per Share
Outstanding, beginning of period (in dollars per share)			$ 9.37
Granted (in dollars per share)			0
Exercised (in dollars per share)			10.00
Forfeited (in dollars per share)			16.25
Outstanding, end of period (in dollars per share)	$ 8.11		$ 8.11		$ 9.37
Aggregate Intrinsic Value
Aggregate intrinsic value, outstanding	$ 587		$ 587		$ 1,314
Weighted Average Remaining Contractual Term
Weighted-average remaining contractual term, outstanding			1 year 25 days		1 year 1 month 20 days

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME (Tables)

9 Months Ended

Sep. 30, 2024

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

Changes in accumulated other comprehensive (loss) income by component, net of tax


	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at January 1, 2024	$	(1,466)	$	(984)	$	(2,450)
Other comprehensive income (loss), before reclassification		508		(175)		333
Amount reclassified from accumulated other comprehensive income		(3)		—		(3)
Net current period other comprehensive income (loss)		505		(175)		330
Balance at September 30, 2024	$	(961)	$	(1,159)	$	(2,120)



	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at January 1, 2023	$	(715)	$	—	$	(715)
Other comprehensive (loss) income, before reclassification		(955)		348		(607)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive (loss) income		(955)		348		(607)
Balance at September 30, 2023	$	(1,670)	$	348	$	(1,322)

DERIVATIVES - Gains (losses) in accumulated other comprehensive income and the consolidated statements, cash flow derivative instruments (Details) - Cash flow hedge - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Derivative [Line Items]
(Loss) gain recognized in other comprehensive income	$ (1,231)	$ 237	$ (175)	$ 348
Gain recognized in interest expense	$ 184	$ 96	$ 557	$ 104

SECURITIES - Gross Unrealized Losses and Fair Values of Investment Securities (Details) $ in Thousands	Sep. 30, 2024 USD ($) security	Dec. 31, 2023 USD ($) security
Available for sale [Abstract]
Less than 12 months, Fair value	$ 5,038	$ 13,432
Less than 12 months, Gross unrealized losses	(88)	(219)
12 months or longer, Fair value	11,502	10,073
12 months or longer, Gross unrealized losses	$ (1,474)	$ (1,736)
Number of securities	16	15
Total, Fair value	$ 16,540	$ 23,505
Total, Gross unrealized losses	(1,562)	(1,955)
Available for sale, allowance for credit losses	0	0
U.S. GSE residential mortgage-backed securities
Available for sale [Abstract]
Less than 12 months, Fair value	3,473
Less than 12 months, Gross unrealized losses	(29)
12 months or longer, Fair value	186	201
12 months or longer, Gross unrealized losses	$ (90)	$ (108)
Number of securities \| security	7	5
Total, Fair value	$ 3,659	$ 201
Total, Gross unrealized losses	(119)	(108)
Corporate bonds
Available for sale [Abstract]
Less than 12 months, Fair value	1,565	1,080
Less than 12 months, Gross unrealized losses	(59)	(120)
12 months or longer, Fair value	11,316	9,872
12 months or longer, Gross unrealized losses	$ (1,384)	$ (1,628)
Number of securities \| security	9	7
Total, Fair value	$ 12,881	$ 10,952
Total, Gross unrealized losses	(1,443)	(1,748)
Available for sale, allowance for credit losses	0
Obligations of U.S. Government agencies and sponsored entities
Available for sale [Abstract]
Available for sale, allowance for credit losses	$ 0
Collateralized loan obligations
Available for sale [Abstract]
Less than 12 months, Fair value		12,352
Less than 12 months, Gross unrealized losses		$ (99)
Number of securities \| security		3
Total, Fair value		$ 12,352
Total, Gross unrealized losses		$ (99)

REGULATORY MATTERS (Details) $ in Thousands	9 Months Ended
REGULATORY MATTERS (Details) $ in Thousands	Sep. 30, 2024 USD ($)	Dec. 31, 2023 USD ($)
Total capital to risk-weighted assets
Actual Capital, Amount	$ 217,299	$ 210,071
Actual Capital, Ratio	0.1424	0.1431
Minimum Capital Adequacy Requirement, Amount	$ 122,055	$ 117,472
Minimum Capital Adequacy Requirement, Ratio	0.0800	0.0800
Minimum Capital Adequacy Requirement With Capital Conservation Buffer, Amount	$ 160,197	$ 154,182
Minimum Capital Adequacy Requirement With Capital Conservation Buffer, Ratio	0.1050	0.1050
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 152,568	$ 146,840
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.1000	0.1000
Tier 1 capital to risk-weighted assets
Actual Capital, Amount	$ 198,196	$ 193,324
Actual Capital, Ratio	0.1299	0.1317
Minimum Capital Adequacy Requirement, Amount	$ 91,541	$ 88,104
Minimum Capital Adequacy Requirement, Ratio	0.0600	0.0600
Minimum Capital Adequacy Requirement With Capital Conservation Buffer, Amount	$ 129,683	$ 124,814
Minimum Capital Adequacy Requirement With Capital Conservation Buffer, Ratio	0.0850	0.0850
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 122,055	$ 117,472
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.0800	0.0800
Common equity tier 1 capital to risk-weighted assets
Actual Capital, Amount	$ 198,196	$ 193,324
Actual Capital, Ratio	0.1299	0.1317
Minimum Capital Adequacy Requirement, Amount	$ 68,656	$ 66,078
Minimum Capital Adequacy Requirement, Ratio	0.0450	0.0450
Minimum Capital Adequacy Requirement With Capital Conservation Buffer, Amount	$ 106,798	$ 102,788
Minimum Capital Adequacy Requirement With Capital Conservation Buffer, Ratio	0.0700	0.0700
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 99,169	$ 95,446
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.0650	0.0650
Tier 1 capital to average total assets
Actual Capital, Amount	$ 198,196	$ 193,324
Actual Capital, Ratio	0.0885	0.0908
Minimum Capital Adequacy Requirement, Amount	$ 89,623	$ 85,131
Minimum Capital Adequacy Requirement, Ratio	0.0400	0.0400
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Amount	$ 112,028	$ 106,414
Minimum to Be Well Capitalized Under Prompt Corrective Action Provisions, Ratio	0.0500	0.0500
Cash dividends to the Holding Company	$ 4,400
Retained earnings available to pay dividends	$ 29,800

Document and Entity Information - shares	9 Months Ended
Document and Entity Information - shares	Sep. 30, 2024	Oct. 31, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Sep. 30, 2024
Document Transition Report	false
Securities Act File Number	001-41384
Entity Registrant Name	Hanover Bancorp, Inc. /NY
Entity Incorporation, State or Country Code	NY
Entity Tax Identification Number	81-3324480
Entity Address, Address Line One	80 East Jericho Turnpike
Entity Address, City or Town	Mineola
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	11501
City Area Code	516
Local Phone Number	548-8500
Title of 12(b) Security	Common stock
Trading Symbol	HNVR
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		7,152,601
Entity Central Index Key	0001828588
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q3
Amendment Flag	false

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

9 Months Ended

Sep. 30, 2024

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

11. ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

The following table presents changes in accumulated other comprehensive (loss) income by component, net of tax, for the nine months ended September 30, 2024 and 2023:


	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at January 1, 2024	$	(1,466)	$	(984)	$	(2,450)
Other comprehensive income (loss), before reclassification		508		(175)		333
Amount reclassified from accumulated other comprehensive income		(3)		—		(3)
Net current period other comprehensive income (loss)		505		(175)		330
Balance at September 30, 2024	$	(961)	$	(1,159)	$	(2,120)



	Unrealized Gains and		Gains and
	Losses on Available-		Losses on
	for-Sale Debt		Cash Flow
(in thousands)	Securities		Hedges		Total
Balance at January 1, 2023	$	(715)	$	—	$	(715)
Other comprehensive (loss) income, before reclassification		(955)		348		(607)
Amount reclassified from accumulated other comprehensive loss		—		—		—
Net current period other comprehensive (loss) income		(955)		348		(607)
Balance at September 30, 2023	$	(1,670)	$	348	$	(1,322)

There were no significant amounts reclassified out of accumulated other comprehensive (loss) income for the three and nine months ended September 30, 2024 and 2023.

FAIR VALUE

9 Months Ended

Sep. 30, 2024

FAIR VALUE

FAIR VALUE

7. FAIR VALUE

FASB ASC No. 820-10 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Fair value is best determined using quoted market prices. However, in many instances, quoted market prices are not available. In such instances, fair values are determined using appropriate valuation techniques. Various assumptions and observable inputs must be relied upon in applying these techniques. Accordingly, categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. As such, the fair value estimates may not be realized in an immediate transfer of the respective asset or liability.

FASB ASC 820-10 also establishes a fair value hierarchy and describes three levels of inputs that may be used to measure fair values. The three levels within the fair value hierarchy are as follows:

●

Level 1: Valuation is based upon unadjusted quoted prices in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.

●

Level 2: Fair value is calculated using significant inputs other than quoted market prices that are directly or indirectly observable for the asset or liability. The valuation may rely on quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in inactive markets, inputs other than quoted prices that are observable for the asset or liability (such as interest rates, rate volatility, prepayment speeds, credit ratings) or inputs that are derived principally or corroborated by market data, by correlation, or other means.

●

Level 3: Inputs for determining the fair value of the respective assets or liabilities are not observable. Level 3 valuations are reliant upon pricing models and techniques that require significant management judgment or estimation.

Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates do not reflect any premium or discount that could result from offering for sale at one time the Company’s entire holdings of a particular financial instrument. Because no market exists for a significant portion of the Company’s financial instruments, fair value estimates are based on judgments regarding future expected loss experience, current economic conditions, risk characteristics of various financial instruments, and other factors. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and, therefore, cannot be determined with precision. Changes in assumptions could significantly affect the estimates.

Fair value estimates are based on existing on- and off-balance-sheet financial instruments without attempting to estimate the value of anticipated future business and the value of assets and liabilities that are not considered financial instruments. In addition, the tax ramifications related to the realization of the unrealized gains and losses can have a significant effect on fair value estimates and have not been considered in the estimates.

Assets Measured at Fair Value on a Recurring Basis

The following presents fair value measurements on a recurring basis at September 30, 2024 and December 31, 2023:


	September 30, 2024
			Fair Value Measurements Using:
			Quoted Prices In				Significant
			Active Markets		Significant Other		Unobservable
	Carrying		for Identical Assets		Observable Inputs		Inputs
(in thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. Treasury securities	$	24,925	$	—	$	24,925	$	—
U.S. GSE residential mortgage-backed securities		7,730		—		7,730		—
Collateralized loan obligations		46,675		—		46,675		—
Corporate bonds		19,029		—		19,029		—
Loan servicing rights		5,765		—		—		5,765
Total	$	104,124	$	—	$	98,359	$	5,765

Financial liabilities:
Derivatives	$	2,657	$	—	$	2,657	$	—


	December 31, 2023
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. GSE residential mortgage-backed securities	$	201	$	—	$	201	$	—
Collateralized loan obligations		50,266		—		50,266		—
Corporate bonds		10,952		—		10,952		—
Loan servicing rights		4,668		—		—		4,668
Total	$	66,087	$	—	$	61,419	$	4,668

Financial liabilities:
Derivatives	$	2,361	$	—	$	2,361	$	—

The fair value for the securities available-for-sale were obtained from an independent broker based upon matrix pricing, which is a mathematical technique widely used in the industry to value debt securities without relying exclusively on quoted prices for the specific securities but rather by relying on the securities’ relationship to other benchmark quoted securities. The Company has determined these are classified as Level 2 inputs within the fair value hierarchy.

Derivatives represent interest rate swaps for which the estimated fair values are based on valuation models using observable market data as of the measurement date resulting in a Level 2 classification.

The fair value of mortgage servicing rights is based on a valuation model that calculates the present value of estimated future servicing income. The valuation model utilizes interest rate, prepayment speed, and default rate assumptions that market participants would use in estimating future net servicing income. The fair value of loan servicing rights related to residential mortgage loans at September 30, 2024 was determined based on discounted expected future cash flows using discount rates ranging from 12.13% to 14.63%, prepayment speeds ranging from 18.14% to 19.52% and a weighted average life ranging from 2.14 to 3.44 years. Fair value at December 31, 2023 for loan servicing rights related to residential

mortgage loans was determined based on discounted expected future cash flows using discount rates ranging from 12.38% to 14.88%, prepayment speed of 26.25% and a weighted average life ranging from 1.55 to 2.78 years.

The fair value of loan servicing rights for SBA loans at September 30, 2024 was determined based on discounted expected future cash flows using discount rates ranging from 6.58% to 53.98%, prepayment speeds ranging from 8.95% to 33.33% and a weighted average life ranging from 0.84 to 5.12 years. The fair value of loan servicing rights for SBA loans at December 31, 2023 was determined based on discounted expected future cash flows using discount rates ranging from 9.61% to 41.46%, prepayment speeds ranging from 8.85% to 30.24% and a weighted average life ranging from 1.08 to 5.71 years.

The Company has determined these are mostly unobservable inputs and considers them Level 3 inputs within the fair value hierarchy.

The following table presents the changes in mortgage servicing rights for the periods presented:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	5,465	$	4,375	$	4,668	$	4,402
Additions		518		265		1,596		757
Adjustment to fair value		(218)		(161)		(499)		(680)
Balance at end of period	$	5,765	$	4,479	$	5,765	$	4,479

Assets Measured at Fair Value on a Non-recurring Basis

The Company had no significant financial instruments measured at fair value on a non-recurring basis at September 30, 2024.

Financial assets measured at fair value on a non-recurring basis as of December 31, 2023 include certain individually evaluated loans reported at fair value of the underlying collateral if repayment is expected solely from the collateral.

December 31, 2023

Fair Value Measurements Using:

Quoted Prices In

Significant

Active Markets

Significant Other

Unobservable

Carrying

for Identical Assets

Observable Inputs

Inputs

(in thousands)

Amount

(Level 1)

(Level 2)

(Level 3)

Individually evaluated loans - Multi-family

1,180

—

1,180

The fair value amounts shown in the table above are individually evaluated loans net of reserves allocated to said loans. The total reserves allocated to these loans were $397 thousand at December 31, 2023.

The table below presents additional quantitative information about level 3 fair value measurements for assets measured at fair value on a non-recurring basis at December 31, 2023:

Range

December 31, 2023

Fair Value

Valuation Technique

Unobservable Input

(Weighted Average)

(Dollar in thousands)

Individually evaluated loans - Multi-family

1,180

Appraisal of collateral

Appraisal and

50.00%

adjustments ⁽¹⁾

(50.00%)

(1)

The appraisal of the underlying collateral property generally includes various significant unobservable inputs (level 3). This was performed by certified general appraisers. Management adjusted the appraisal downward for factors such as the condition of the property and liquidation expenses. The range of other appraisal adjustments and liquidation expenses are shown as a percentage of the appraisal.

Financial Instruments Not Measured at Fair Value

The following presents the carrying amounts and estimated fair values of the Company’s financial instruments not carried at fair value at September 30, 2024 and December 31, 2023:


	September 30, 2024
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	141,231	$	141,231	$	—	$	—	$	141,231
Securities held-to-maturity		3,828		—		3,707		—		3,707
Loans, net		1,982,407		—		—		1,955,544		1,955,544
Accrued interest receivable		12,522		—		1,202		11,320		12,522

Financial liabilities:
Time deposits		504,100		—		505,055		—		505,055
Demand and other deposits		1,453,444		1,453,444		—		—		1,453,444
Borrowings		125,805		—		126,851		—		126,851
Subordinated debentures		24,675		—		24,894		—		24,894
Accrued interest payable		1,865		4		1,861		—		1,865


	December 31, 2023
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	177,207	$	177,207	$	—	$	—	$	177,207
Securities held-to-maturity		4,041		—		3,835		—		3,835
Loans, net		1,937,541		—		—		1,890,113		1,890,113
Accrued interest receivable		11,915		—		1,156		10,759		11,915

Financial liabilities:
Time deposits		522,198		—		520,022		—		520,022
Demand and other deposits		1,382,397		1,382,397		—		—		1,382,397
Borrowings		128,953		—		128,165		—		128,165
Subordinated debentures		24,635		—		26,601		—		26,601
Accrued interest payable		1,724		161		1,563		—		1,724

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

+ References

Reference 1: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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-Name Accounting Standards Codification
-Section 55
-Paragraph 107
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
-Topic 820
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-Name Accounting Standards Codification
-Section 55
-Paragraph 100
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-URI https://asc.fasb.org/1943274/2147482078/820-10-55-100

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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-Name Accounting Standards Codification
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-Section 50
-Paragraph 6A
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-URI https://asc.fasb.org/1943274/2147482106/820-10-50-6A

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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-Name Accounting Standards Codification
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-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2E

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-Topic 820
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-Name Accounting Standards Codification
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-Paragraph 6A
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Topic 820
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 820
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-Name Accounting Standards Codification
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-Paragraph 2
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-URI https://asc.fasb.org/1943274/2147482106/820-10-50-2

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-Topic 820
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-URI https://asc.fasb.org/1943274/2147478119/940-820-50-1

+ Details

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Policies)	9 Months Ended
	Sep. 30, 2024
BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS
Change in Company's fiscal year end	In October 2023, the Company’s Board of Directors approved a change in the Company’s fiscal year end from September 30 to December 31. The Company’s current fiscal year is the calendar year January 1, 2024 through December 31, 2024 (fiscal year 2024).
Reclassifications	In the opinion of the Company’s management, the preceding unaudited interim consolidated financial statements contain all adjustments, consisting of normal accruals, necessary for a fair presentation of the Company’s consolidated statement of financial condition as of September 30, 2024, its consolidated statements of income for the three and nine months ended September 30, 2024 and 2023, its consolidated statements of comprehensive income for the three and nine months ended September 30, 2024 and 2023, its consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and its consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had an immaterial effect on the Company’s consolidated financial statements and had no effect on prior period net income or stockholders’ equity.
Basis of Presentation	In addition, the preceding unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, as well as in accordance with predominant practices within the banking industry. They do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results for any other interim period or of the results for the full fiscal year 2024. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023. All material intercompany accounts and transactions have been eliminated in consolidation. Unless the context otherwise requires, references herein to the Company include the Company and the Bank on a consolidated basis.
Securities	Securities - Investment securities are classified as held-to-maturity or available-for-sale at the time of purchase. Investment securities classified as held-to-maturity, which management has the positive intent and ability to hold to maturity, are reported at amortized cost. Investment securities classified as available for sale, which management has the intent and ability to hold for an indefinite period of time, but not necessarily to maturity, are carried at fair value, with unrealized gains and losses, net of related deferred income taxes, included in stockholders’ equity as a separate component of other comprehensive income. Any decision to sell investment securities available for sale would be based on various factors, including, but not limited to, asset / liability management strategies, changes in interest rates or prepayment risks, liquidity needs, or regulatory capital considerations. Premiums are amortized and discounts accreted using the interest method over the remaining terms of the related securities. Dividend and interest income are recognized when earned. Sales of investment securities are recorded at trade date, with realized gains and losses on sales determined using the specific identification method and included in non-interest income. A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.
Alowance for Credit Losses - Held-to-Maturity Securities	Alowance for Credit Losses – Held-to-Maturity Securities – Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $42 thousand and $9 thousand at September 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses. The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts. Management classifies the held-to-maturity portfolio into the following major security types: Mortgage backed: residential and commercial. All mortgage-backed: residential and commercial securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.
Allowance for Credit Losses - Available-For-Sale Securities	Allowance for Credit Losses – Available-For-Sale Securities – For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income. Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met. Accrued interest receivable on available-for-sale debt securities totaled $0.8 million at both September 30, 2024 and December 31, 2023, and is excluded from the estimate of credit losses.
Loans and Loan Interest Income Recognition	Loans and Loan Interest Income Recognition - Loans that the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff, are reported at the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs and an allowance for credit losses. The loan portfolio is segmented into residential real estate, multi-family, commercial real estate, commercial and industrial, construction and land development, and consumer loans. Accrued interest receivable totaled $11.3 million and $10.8 million at September 30, 2024 and December 31, 2023, respectively, and was reported in Accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the estimate of credit losses. Interest income on loans is accrued on the unpaid principal balance and credited to income as earned. Interest income on loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent. Net loan origination fees and costs are deferred and accreted/amortized to interest income over the contractual life of loans using the level-yield method, adjusted for actual prepayments.
Loans Held for Sale	Loans Held for Sale – Mortgage and SBA and other government guaranteed loans originated and intended for sale in the secondary market are carried at estimated fair value as determined by outstanding commitments from investors. Periodically, the Company originates various residential mortgage loans for sale to investors generally on a servicing released basis. The sale of such loans is generally arranged through a master commitment on a best-efforts basis. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Premiums, discounts, origination fees and costs on loans held for sale are deferred and recognized as a component of the gain or loss on sale. Gains and losses on sales of loans held for sale are included in non-interest income, recognized on settlement date and are determined to be the difference between the sale proceeds and the carrying value of the loans. These transactions are accounted for as sales based on satisfaction of the criteria for such accounting which provides that, as transferor, the Company has surrendered control of the loans. For liquidity purposes generally, there are instances when loans originated with the intent to hold in the portfolio are subsequently transferred to loans held for sale. At transfer, they are carried at the lower of cost or fair value.
Allowance for Credit Losses - Loans	Allowance for Credit Losses - Loans – The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off. Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors. The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. When management determines that collection in full is not probable, expected credit losses are based on the fair value of the collateral or discounted value of the projected cash flows at the reporting date, adjusted for selling costs as appropriate. The quantitative component of the estimate relies on the statistical relationship between the projected value of an economic indicator and the implied historical loss experience among a curated group of peers. The Company utilized regression analyses of peer data, in which the Company was included, and where observed credit losses and selected economic factors were used to determine suitable loss drivers for modeling the lifetime rates of probability of default (PD). A loss given default rate (LGD) is assigned to each pool for each period based on these PD outcomes. The model primarily utilizes an expected discounted cash flow (DCF) analysis with a remaining life (RL) approach used limitedly. The DCF analysis is run at the instrument-level and incorporates an array of loan-specific data points and segment-implied assumptions to determine the lifetime expected loss attributable to each instrument. An implicit "hypothetical loss" is derived for each period of the DCF, and helps establish the present value of future cash flows for each period. The reserve applied to a specific instrument is the difference between the sum of the present value of future cash flows and the amortized cost basis of the loan at the measurement date. The RL approach utilizes projected loss rates based on the remaining life of a loan pool. It is utilized when a regression analysis could not provide adequate correlation of PD and external economic factors on which to base projected losses. During the quarter ended September 30, 2024, the Company updated the model utilized for the commercial and industrial allowance for credit loss loan segment from RL to DCF. The update was due to the Company now having the appropriate data needed to utilize the DCF model, whereas before the Company did not have the appropriate data. The change in methodology did not have a material impact to the allowance reserve for the commercial and industrial loan segment. Portfolio segments are the level at which loss assumptions are applied to a pool of loans based on the similarity of risk characteristics inherent in the included instruments, relying on FFIEC Call Report codes. The loss driver for each loan portfolio segment is derived from a readily available and reasonable economic forecast, chiefly the Federal Open Market Committee (“FOMC”) of the Federal Reserve's projections of civilian unemployment and year-over-year U.S. GDP growth. Forecasts are applied over a four-quarter period and revert to the lookback period's historical mean for the economic indicator over a four-quarter horizon, on a straight-line basis. The model incorporates qualitative factor adjustments in order to calibrate the model for risk in each portfolio segment that may not be captured through quantitative analysis. Determinations regarding qualitative adjustments are reflective of management's expectation of loss conditions differing from those already captured in the quantitative component of the model. Factors that the Company considers include a) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices; b) changes in international, national, regional, and local conditions; c) changes in the nature and volume of the portfolio and term loans; d) changes in experience, depth, and ability of lending management; e) changes in volume and severity of past due loans and other similar conditions; f) changes in the quality of the Bank’s loan review system; g) changes in the value of underlying collateral for collateral dependent loans; h) the existence and effect of any concentrations of credit and changes in the levels of such concentrations; and i) the effects of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses. Allowance for credit losses are aggregated for the major loan segments, with similar characteristics, summarized below. However, for the purposes of calculating reserves, these segments may be further broken down into loan classes by risk characteristics that include but are not limited to FFIEC Call Report codes, industry type, geographic location, and collateral type. One-to-four family residential mortgage loans involve certain risks such as interest rate risk and risk of nonpayment. Adjustable-rate loans decrease the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk can be affected by the overall health of the economy, including unemployment rates and housing prices. Commercial real estate lending entails additional risks as compared with single-family residential property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. Loans in this classification include income producing investment properties and owner-occupied real estate used for business purposes. The underlying properties are located largely in the Bank’s primary market area. The cash flows of the income producing investment properties could be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on credit quality. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending could have an adverse effect on credit quality. Multifamily lending entails additional risks as compared with single-family residential property lending, but less when compared to commercial real estate lending. Loans in this classification include income producing residential investment properties of five or more units. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property. Repayment is derived generally from the rental income generated from the property and may be supplemented by the owners’ personal cash flow. Credit risk arises with changes in economic conditions that could cause an increase in vacancy rates or decline in property value. Commercial and industrial lending is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Generally, these loans are primarily secured by inventories and other assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending, will have an effect on the credit quality in this loan class. The Company’s construction loan portfolio covers the development of commercial properties. Construction loans involve the disbursement of funds during construction with repayment substantially dependent on the success of the ultimate project. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans because their ultimate repayment depends on the satisfactory completion of construction and is sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Repayment is dependent on completion of the project and the subsequent financing of the completed project as a commercial real estate loan, and in some instances on the rent or sale of the underlying project. Consumer loans generally have shorter terms and higher interest rates than other lending but generally involve more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class.
Allowance for Credit losses on Off-Balance Sheet Credit Exposures	Allowance for Credit losses on Off-Balance Sheet Credit Exposures – The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is reported on the Consolidated Statements of Financial Condition in the other liabilities section and is adjusted through a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the commitment’s estimated useful life.
Series A Preferred Stock	Series A Preferred Stock - Holders of the Company’s Series A preferred stock will be entitled to receive dividends when, as and if declared by the Company’s board of directors, in the same per share amount as the common stockholders. No dividend for any quarterly period will be payable on the common stock unless a dividend identical to that paid on the common stock is paid at the same time on the Series A preferred stock. Therefore, Series A preferred stock is treated as common stock for EPS calculations. Series A preferred stock has no voting rights. In the event of a dissolution of the Company, Series A preferred stock is entitled to the payment of any declared and unpaid dividend, and then will share in dissolution proceeds, if any, with the shares of common stock.
Recent Accounting Pronouncements	Recent Accounting Pronouncements Standards That Have Not Yet Been Adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, which will require public business entities to disclose annually a tabular rate reconciliation, including specific items such as state and local income tax, tax credits, nontaxable or nondeductible items, among others, and a separate disclosure requiring disaggregation of reconciling items as described above which equal or exceed 5% of the product of multiplying income from continuing operations by the applicable statutory income tax rate. The ASU is effective for all public business entities for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

FAIR VALUE - Carrying Amount and Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Carrying Amount
Financial assets:
Cash and cash equivalents	$ 141,231	$ 177,207
Securities held-to-maturity	3,828	4,041
Loans, net	1,982,407	1,937,541
Accrued interest receivable	12,522	11,915
Financial liabilities:
Time deposits	504,100	522,198
Demand and other deposits	1,453,444	1,382,397
Borrowings	125,805	128,953
Subordinated debentures	24,675	24,635
Accrued interest payable	1,865	1,724
As Adjusted
Financial assets:
Cash and cash equivalents	141,231	177,207
Securities held-to-maturity	3,707	3,835
Loans, net	1,955,544	1,890,113
Accrued interest receivable	12,522	11,915
Financial liabilities:
Time deposits	505,055	520,022
Demand and other deposits	1,453,444	1,382,397
Borrowings	126,851	128,165
Subordinated debentures	24,894	26,601
Accrued interest payable	1,865	1,724
As Adjusted \| Quoted Prices In Active Markets for Identical Assets (Level 1)
Financial assets:
Cash and cash equivalents	141,231	177,207
Securities held-to-maturity	0	0
Loans, net	0	0
Accrued interest receivable	0	0
Financial liabilities:
Time deposits	0	0
Demand and other deposits	1,453,444	1,382,397
Borrowings	0	0
Subordinated debentures	0	0
Accrued interest payable	4	161
As Adjusted \| Significant Other Observable Inputs (Level 2)
Financial assets:
Cash and cash equivalents	0	0
Securities held-to-maturity	3,707	3,835
Loans, net	0	0
Accrued interest receivable	1,202	1,156
Financial liabilities:
Time deposits	505,055	520,022
Demand and other deposits	0	0
Borrowings	126,851	128,165
Subordinated debentures	24,894	26,601
Accrued interest payable	1,861	1,563
As Adjusted \| Significant Unobservable Inputs (Level 3)
Financial assets:
Cash and cash equivalents	0	0
Securities held-to-maturity	0	0
Loans, net	1,955,544	1,890,113
Accrued interest receivable	11,320	10,759
Financial liabilities:
Time deposits	0	0
Demand and other deposits	0	0
Borrowings	0	0
Subordinated debentures	0	0
Accrued interest payable	$ 0	$ 0

DERIVATIVES - Credit-Risk-Related Contingent Features (Details) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
DERIVATIVES
Termination value of derivatives in net liability position	$ 3.0	$ 2.2

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Common Stock	Preferred Stock	Surplus	Retained Earnings	Accumulated Other Comprehensive Loss, Net of Tax	Total
Beginning Balance at Dec. 31, 2022	$ 71	$ 2,963	$ 124,235	$ 51,074	$ (715)	$ 177,628
Beginning Balance (In shares) at Dec. 31, 2022	7,149,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				3,209		3,209
Other comprehensive income (loss), net of tax					(226)	(226)
Cash dividends declared ($0.10 per share)				(738)		(738)
Stock-based compensation			794			794
Stock awards granted, net of forfeitures	$ 1		(1)
Stock awards granted, net of forfeitures (in shares)	39,513
Shares received related to tax withholding			(145)			(145)
Shares received related to tax withholding (in shares)	(7,421)
Ending Balance at Mar. 31, 2023	$ 72	2,963	124,883	53,545	(941)	180,522
Ending Balance (In shares) at Mar. 31, 2023	7,181,092
Beginning Balance at Dec. 31, 2022	$ 71	2,963	124,235	51,074	(715)	177,628
Beginning Balance (In shares) at Dec. 31, 2022	7,149,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income						9,826
Other comprehensive income (loss), net of tax					(607)	(607)
Ending Balance at Sep. 30, 2023	$ 72	2,963	125,501	58,693	(1,322)	185,907
Ending Balance (In shares) at Sep. 30, 2023	7,170,419
Beginning Balance at Mar. 31, 2023	$ 72	2,963	124,883	53,545	(941)	180,522
Beginning Balance (In shares) at Mar. 31, 2023	7,181,092
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				3,094		3,094
Other comprehensive income (loss), net of tax					(468)	(468)
Cash dividends declared ($0.10 per share)				(735)		(735)
Stock-based compensation			401			401
Stock awards granted, net of forfeitures (in shares)	3,500
Shares received related to tax withholding			(8)			(8)
Shares received related to tax withholding (in shares)	(472)
Ending Balance at Jun. 30, 2023	$ 72	2,963	125,276	55,904	(1,409)	182,806
Ending Balance (In shares) at Jun. 30, 2023	7,184,120
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				3,523		3,523
Other comprehensive income (loss), net of tax					87	87
Cash dividends declared ($0.10 per share)				(734)		(734)
Stock-based compensation			236			236
Stock awards granted, net of forfeitures (in shares)	(13,112)
Shares received related to tax withholding			(11)			(11)
Shares received related to tax withholding (in shares)	(589)
Ending Balance at Sep. 30, 2023	$ 72	2,963	125,501	58,693	(1,322)	185,907
Ending Balance (In shares) at Sep. 30, 2023	7,170,419
Beginning Balance at Dec. 31, 2023	$ 72	2,963	125,694	58,551	(2,450)	184,830
Beginning Balance (In shares) at Dec. 31, 2023	7,195,012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				4,061		4,061
Other comprehensive income (loss), net of tax					1,157	1,157
Cash dividends declared ($0.10 per share)				(741)		(741)
Stock-based compensation			381			381
Stock awards granted, net of forfeitures (in shares)	52,491
Shares received related to tax withholding			(145)			(145)
Shares received related to tax withholding (in shares)	(8,292)
Exercise of stock options, net (in shares)	3,201
Ending Balance at Mar. 31, 2024	$ 72	2,963	125,930	61,871	(1,293)	189,543
Ending Balance (In shares) at Mar. 31, 2024	7,242,412
Beginning Balance at Dec. 31, 2023	$ 72	2,963	125,694	58,551	(2,450)	184,830
Beginning Balance (In shares) at Dec. 31, 2023	7,195,012
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income						8,444
Other comprehensive income (loss), net of tax					330	330
Ending Balance at Sep. 30, 2024	$ 72	5,041	124,580	64,766	(2,120)	192,339
Ending Balance (In shares) at Sep. 30, 2024	7,153,366
Beginning Balance at Mar. 31, 2024	$ 72	2,963	125,930	61,871	(1,293)	189,543
Beginning Balance (In shares) at Mar. 31, 2024	7,242,412
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				844		844
Other comprehensive income (loss), net of tax					(34)	(34)
Cash dividends declared ($0.10 per share)				(744)		(744)
Stock-based compensation			401			401
Stock awards granted, net of forfeitures (in shares)	3,147
Shares received related to tax withholding			(8)			(8)
Shares received related to tax withholding (in shares)	(453)
Preferred stock issued in exchange for common stock	$ (1)	2,078	(2,077)
Preferred stock issued in exchange for common stock (in shares)	(125,000)
Exercise of stock options, net			70			70
Exercise of stock options, net (in shares)	7,057
Ending Balance at Jun. 30, 2024	$ 71	5,041	124,316	61,971	(1,327)	190,072
Ending Balance (In shares) at Jun. 30, 2024	7,127,163
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income				3,539		3,539
Other comprehensive income (loss), net of tax					(793)	(793)
Cash dividends declared ($0.10 per share)				(744)		(744)
Stock-based compensation			417			417
Stock awards granted, net of forfeitures (in shares)	(1,905)
Shares received related to tax withholding			(14)			(14)
Shares received related to tax withholding (in shares)	(804)
Exercise of stock options, net	$ 1		(139)			(138)
Exercise of stock options, net (in shares)	28,912
Ending Balance at Sep. 30, 2024	$ 72	$ 5,041	$ 124,580	$ 64,766	$ (2,120)	$ 192,339
Ending Balance (In shares) at Sep. 30, 2024	7,153,366

EQUITY COMPENSATION PLANS - Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Restricted Stock
Restricted Stock
Award vesting period			5 years
Number of Shares
Unvested, beginning of period (in shares)			252,502
Granted (in shares)			59,161
Vested (in shares)			(66,617)
Forfeited (in shares)			(5,428)
Unvested, end of period (in shares)	239,618		239,618
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share)			$ 19.58
Granted (in dollars per share)			17.03
Vested (in dollars per share)			19.65
Forfeited (in dollars per share)			19.74
Unvested, end of period (in dollars per share)	$ 18.93		$ 18.93
Compensation expenses	$ 360	$ 219	$ 1,000	$ 1,300
Unrealized compensation cost	$ 3,400		$ 3,400
Weighted-average term for recognizing unrealized compensation cost			3 years 1 month 28 days
Total fair value of shares vested			$ 1,200	1,400
Restricted Stock Units (RSUs)
Restricted Stock
Award vesting period			3 years
Number of Shares
Unvested, beginning of period (in shares)			38,271
Granted (in shares)			0
Vested (in shares)			0
Forfeited (in shares)			0
Unvested, end of period (in shares)	38,271		38,271
Weighted-Average Grant Date Fair Value
Unvested, beginning of period (in dollars per share)			$ 19.73
Granted (in dollars per share)			0
Vested (in dollars per share)			0
Forfeited (in dollars per share)			0
Unvested, end of period (in dollars per share)	$ 19.73		$ 19.73
Compensation expenses	$ 56	$ 17	$ 168	$ 149
Unrealized compensation cost	$ 88		$ 88
Weighted-average term for recognizing unrealized compensation cost			4 months 20 days

BORROWINGS - Federal Home Loan Bank Advances (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Federal Home Loan Bank Advances
FHLB term borrowings outstanding, fixed rate	$ 107,800	$ 126,700
Total FHLB advances	125,805	126,665
Borrowings	125,805	128,953
Available additional borrowings	197,900
FHLB overnight \| Overnight borrowings
Federal Home Loan Bank Advances
Overnight	$ 18,000	$ 0
FHLB term borrowings, rate	5.08%

LOANS - Company's Loans by Year of Origination and Internally Assigned Credit Risk and Gross Charge-offs (Details) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2024	Dec. 31, 2023
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	$ 174,300	$ 174,300	$ 357,187
2023	345,164	345,164	711,637
2022	680,881	680,881	338,205
2021	331,318	331,318	110,590
2020	101,211	101,211	148,070
Prior	344,892	344,892	264,760
Revolving Loans To Term Loans	26,824	26,824	25,631
Loans	2,005,813	2,005,813	1,957,199
Total Loans	2,004,590	2,004,590	1,956,080
Current period gross charge-offs
2024		18
2023		146
2021		368
2020		52
Prior		30
Total	438	614
Residential real estate
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	77,397	77,397	191,238
2023	185,572	185,572	207,906
2022	199,414	199,414	64,906
2021	62,455	62,455	40,970
2020	37,618	37,618	83,996
Prior	155,359	155,359	99,077
Revolving Loans To Term Loans	26,824	26,824	25,631
Loans	745,862	745,862	714,843
Total Loans	744,639	744,639	713,724
Current period gross charge-offs
Amortized cost for loans in the closed portfolio under the portfolio layer method	1,200	1,200	1,100
Residential real estate \| Pass
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	76,989	76,989	191,238
2023	183,933	183,933	207,166
2022	197,791	197,791	64,906
2021	61,250	61,250	39,772
2020	35,657	35,657	79,581
Prior	151,718	151,718	98,150
Revolving Loans To Term Loans	26,168	26,168	24,975
Loans	733,506	733,506	705,788
Residential real estate \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	408	408
2023	879	879
2022	588	588
2021	1,205	1,205	522
2020	891	891	230
Prior	769	769
Loans	4,740	4,740	752
Residential real estate \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	760	760	740
2022	1,035	1,035
2021			676
2020	1,070	1,070	4,185
Prior	2,872	2,872	927
Revolving Loans To Term Loans	656	656	656
Loans	6,393	6,393	7,184
Multi-family
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	2,833	2,833	3,533
2023	3,406	3,406	299,217
2022	294,543	294,543	164,258
2021	161,115	161,115	38,386
2020	37,377	37,377	10,854
Prior	58,360	58,360	56,601
Loans	557,634	557,634	572,849
Current period gross charge-offs
2021		368
Total	368	368
Multi-family \| Pass
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	2,833	2,833	3,533
2023	3,406	3,406	299,217
2022	294,543	294,543	162,678
2021	159,976	159,976	36,592
2020	35,573	35,573	10,854
Prior	58,360	58,360	56,601
Loans	554,691	554,691	569,475
Multi-family \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2022			1,580
2021	1,139	1,139	1,794
2020	1,804	1,804
Loans	2,943	2,943	3,374
Commercial real estate
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	27,279	27,279	86,834
2023	78,384	78,384	189,422
2022	177,865	177,865	89,194
2021	87,322	87,322	26,792
2020	23,176	23,176	52,949
Prior	126,401	126,401	102,821
Loans	520,427	520,427	548,012
Current period gross charge-offs
Prior		30
Total		30
Commercial real estate \| Pass
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	27,279	27,279	86,834
2023	77,473	77,473	187,570
2022	174,315	174,315	80,761
2021	78,467	78,467	26,300
2020	22,295	22,295	42,476
Prior	121,053	121,053	95,265
Loans	500,882	500,882	519,206
Commercial real estate \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	911	911	1,852
2022	3,550	3,550	8,433
2021	8,855	8,855	293
2020	399	399	3,647
Prior	1,301	1,301	6,427
Loans	15,016	15,016	20,652
Commercial real estate \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2021			199
2020	482	482	6,826
Prior	4,047	4,047	1,129
Loans	4,529	4,529	8,154
Commercial and industrial
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	66,453	66,453	74,352
2023	77,501	77,501	11,392
2022	8,983	8,983	11,194
2021	11,150	11,150	4,442
2020	3,040	3,040	271
Prior	4,772	4,772	6,261
Loans	171,899	171,899	107,912
Current period gross charge-offs
2024		18
2023		146
2020		52
Total	70	216
Commercial and industrial \| Pass
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	66,428	66,428	74,352
2023	77,135	77,135	11,392
2022	6,483	6,483	10,015
2021	9,296	9,296	4,407
2020	2,425	2,425	126
Prior	3,741	3,741	5,274
Loans	165,508	165,508	105,566
Commercial and industrial \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2023	153	153
2022			913
2021	545	545
2020	54	54
Prior	438	438	540
Loans	1,190	1,190	1,453
Commercial and industrial \| Substandard
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	25	25
2023	213	213
2022	2,500	2,500	266
2021	1,309	1,309	35
2020	561	561	145
Prior	593	593	447
Loans	5,201	5,201	893
Construction and land development
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	245	245	904
2023			3,613
2022			8,653
2021	9,276	9,276
Loans	9,521	9,521	13,170
Construction and land development \| Pass
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	245	245	904
2023			3,613
2022			8,653
2021	5,473	5,473
Loans	5,718	5,718	13,170
Construction and land development \| Special Mention
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2021	3,803	3,803
Loans	3,803	3,803
Consumer
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	93	93	326
2023	301	301	87
2022	76	76
Loans	470	470	413
Consumer \| Pass
Company's loans by year of origination and internally assigned credit risk and gross charge-offs
2024	93	93	326
2023	301	301	87
2022	76	76
Loans	$ 470	$ 470	$ 413

SECURITIES - Securities Portfolio Presented by Contractual Maturity (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Debt Securities, Available-for-Sale, Amortized Cost, Fiscal Year Maturity [Abstract]
Due in one year or less	$ 24,925		$ 24,925
Due after one year through five years	1,000		1,000
Five to ten years	52,935		52,935
Beyond ten years	12,939		12,939
Amortized Cost	99,586		99,586		$ 63,292
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract]
Due in one year or less	24,925		24,925
Due after one year through five years	1,024		1,024
Five to ten years	51,678		51,678
Beyond ten years	13,002		13,002
Fair value	98,359		98,359		61,419
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity [Abstract]
Amortized Cost	3,828		3,828		4,041
Debt Securities, Held-to-Maturity, Fair Value, Maturity [Abstract]
Fair value	3,707		3,707		3,835
Debt Securities, Available-for-Sale and Held-to-Maturity, after Allowance for Credit Loss [Abstract]
Amortized cost	103,414		103,414
Fair value	102,066		102,066
Proceeds from sales	0	$ 0	868	$ 0
Gross realized gains on sales			4
U.S. GSE residential mortgage-backed securities
Debt Securities, Available-for-Sale, Amortized Cost, Fiscal Year Maturity [Abstract]
Without single maturity date	7,787		7,787
Amortized Cost	7,787		7,787		309
Debt Securities, Available-for-Sale, Fair Value, Fiscal Year Maturity [Abstract]
Without single maturity date	7,730		7,730
Fair value	7,730		7,730		201
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity [Abstract]
Without single maturity date	1,313		1,313
Debt Securities, Held-to-Maturity, Fair Value, Maturity [Abstract]
Without single maturity date	1,254		1,254
Fair value	1,254		1,254		1,384
U.S. GSE commercial mortgage-backed securities
Debt Securities, Held-to-Maturity, Amortized Cost, after Allowance for Credit Loss, Maturity [Abstract]
Without single maturity date	2,515		2,515
Debt Securities, Held-to-Maturity, Fair Value, Maturity [Abstract]
Without single maturity date	2,453		2,453
Fair value	$ 2,453		$ 2,453		$ 2,451

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS
Accrued interest receivable on held-to-maturity debt securities	$ 42	$ 9
Accrued interest receivable on available-for-sale debt securities	800	800
Accrued interest receivable	$ 11,300	$ 10,800

CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
ASSETS
Cash and non-interest-bearing deposits due from banks	$ 9,767	$ 10,277
Interest-bearing deposits due from banks	131,464	166,407
Federal funds sold		523
Total cash and cash equivalents	141,231	177,207
Securities:
Securities held to maturity, fair value of $3,707 at September 30, 2024 and $3,835 at December 31, 2023 (net of allowance for credit losses of $0 at September 30, 2024 and December 31, 2023)	3,828	4,041
Securities available for sale, at fair value (net of allowance for credit losses of $0 at September 30, 2024 and December 31, 2023)	98,359	61,419
Loans held for sale	16,721	8,904
Loans	2,005,813	1,957,199
Allowance for credit losses	(23,406)	(19,658)
Loans, net	1,982,407	1,937,541
Premises and equipment, net	16,373	15,886
Operating lease assets	8,776	9,754
Accrued interest receivable	12,522	11,915
Prepaid post retirement plan	3,408	3,503
Stock in Federal Home Loan Bank ("FHLB"), at cost	8,541	8,612
Goodwill	19,168	19,168
Other intangible assets	265	311
Loan servicing rights	5,765	4,668
Deferred income taxes, net	2,372	2,463
Other assets	8,078	4,668
TOTAL ASSETS	2,327,814	2,270,060
Deposits:
Non-interest-bearing demand	206,327	207,781
Savings, NOW and money market	1,247,117	1,174,616
Time	504,100	522,198
Total deposits	1,957,544	1,904,595
Borrowings	125,805	128,953
Subordinated debentures ($25,000 face amount less unamortized debt issuance costs of $325 and $365 at September 30, 2024 and December 31, 2023, respectively)	24,675	24,635
Operating lease liabilities	9,472	10,459
Accrued interest payable	1,865	1,724
Other liabilities	16,114	14,864
TOTAL LIABILITIES	2,135,475	2,085,230
COMMITMENTS AND CONTINGENT LIABILITIES
STOCKHOLDERS' EQUITY
Preferred stock, Series A (par value $0.01; 15,000,000 shares authorized; issued and outstanding 275,000 and 150,000 at September 30, 2024 and December 31, 2023, respectively)	5,041	2,963
Common stock (par value $0.01; 17,000,000 shares authorized; issued and outstanding 7,153,366 and 7,195,012 at September 30, 2024 and December 31, 2023, respectively)	72	72
Surplus	124,580	125,694
Retained earnings	64,766	58,551
Accumulated other comprehensive loss, net of tax	(2,120)	(2,450)
TOTAL STOCKHOLDERS' EQUITY	192,339	184,830
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,327,814	$ 2,270,060

LOANS - Loans by loan portfolio segment (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2024	Dec. 31, 2023
After to adoption of ASC 326
Total loans	$ 2,005,813,000		$ 2,005,813,000			$ 1,957,199,000
Allowance for credit losses	(23,406,000)		(23,406,000)		$ (23,644,000)	(19,658,000)
Loans, net	1,982,407,000		1,982,407,000			1,937,541,000
Servicing of loans to others	321,500,000		321,500,000			262,800,000
SBA loans held for sale	11,600,000		11,600,000			8,900,000
Loans sold	43,500,000	$ 18,400,000	105,600,000	$ 43,800,000
Net gain on sale of loans held-for-sale	2,800,000	$ 1,500,000	7,926,000	$ 3,515,000
Residential real estate
After to adoption of ASC 326
Total loans	745,862,000		745,862,000			714,843,000
Allowance for credit losses	(6,510,000)		(6,510,000)		(5,996,000)	(5,001,000)
SBA loans held for sale	5,100,000		5,100,000			0
Multi-family
After to adoption of ASC 326
Total loans	557,634,000		557,634,000			572,849,000
Allowance for credit losses	(5,620,000)		(5,620,000)		(4,266,000)	(4,671,000)
Commercial real estate
After to adoption of ASC 326
Total loans	520,427,000		520,427,000			548,012,000
Allowance for credit losses	(6,390,000)		(6,390,000)		(9,042,000)	(8,390,000)
Commercial and industrial
After to adoption of ASC 326
Total loans	171,899,000		171,899,000			107,912,000
Allowance for credit losses	(4,728,000)		(4,728,000)		(4,177,000)	(1,419,000)
Construction and land development
After to adoption of ASC 326
Total loans	9,521,000		9,521,000			13,170,000
Allowance for credit losses	(137,000)		(137,000)		(98,000)	(122,000)
Consumer
After to adoption of ASC 326
Total loans	470,000		470,000			413,000
Allowance for credit losses	$ (21,000)		$ (21,000)		$ (65,000)	$ (55,000)

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME - Changes in Accumulated Other Comprehensive (loss) income by Component, Net of Tax (Details) - USD ($) $ in Thousands	3 Months Ended						9 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023
Changes in Other Comprehensive (loss) income by Component, Net of Tax [Roll Forward]
Beginning Balance	$ 190,072	$ 189,543	$ 184,830	$ 182,806	$ 180,522	$ 177,628	$ 184,830	$ 177,628
Net current period other comprehensive income (loss)	(793)	(34)	1,157	87	(468)	(226)	330	(607)
Ending Balance	192,339	190,072	189,543	185,907	182,806	180,522	192,339	185,907
Unrealized Gains and Losses on Available-for-Sale Debt Securities
Changes in Other Comprehensive (loss) income by Component, Net of Tax [Roll Forward]
Beginning Balance			(1,466)			(715)	(1,466)	(715)
Other comprehensive income (loss), before reclassification							508	(955)
Amount reclassified from accumulated other comprehensive (loss) income							(3)
Net current period other comprehensive income (loss)							505	(955)
Ending Balance	(961)			(1,670)			(961)	(1,670)
Gains and Losses on Cash Flow Hedges
Changes in Other Comprehensive (loss) income by Component, Net of Tax [Roll Forward]
Beginning Balance			(984)				(984)
Other comprehensive income (loss), before reclassification							(175)	348
Net current period other comprehensive income (loss)							(175)	348
Ending Balance	(1,159)			348			(1,159)	348
Accumulated Other Comprehensive (Loss) Income
Changes in Other Comprehensive (loss) income by Component, Net of Tax [Roll Forward]
Beginning Balance	(1,327)	(1,293)	(2,450)	(1,409)	(941)	(715)	(2,450)	(715)
Other comprehensive income (loss), before reclassification							333	(607)
Amount reclassified from accumulated other comprehensive (loss) income							(3)
Net current period other comprehensive income (loss)	(793)	(34)	1,157	87	(468)	(226)	330	(607)
Ending Balance	$ (2,120)	$ (1,327)	$ (1,293)	$ (1,322)	$ (1,409)	$ (941)	$ (2,120)	$ (1,322)

- Definition

Amount of equity (deficit) attributable to parent. Excludes temporary equity and equity attributable to noncontrolling interest.

+ References

Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(29))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(30))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 3: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 210
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.5-02(31))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480566/210-10-S99-1

Reference 4: http://www.xbrl.org/2003/role/exampleRef
-Topic 852
-SubTopic 10
-Name Accounting Standards Codification
-Section 55
-Paragraph 10
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481372/852-10-55-10

Reference 5: http://www.xbrl.org/2003/role/exampleRef
-Topic 946
-SubTopic 830
-Name Accounting Standards Codification
-Section 55
-Paragraph 12
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479168/946-830-55-12

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.6-04(19))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479170/946-210-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 210
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SX 210.6-05(4))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479170/946-210-S99-2

Reference 8: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(4)(b))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-3

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(6))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-3

Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 220
-Name Accounting Standards Codification
-Section S99
-Paragraph 3
-Subparagraph (SX 210.6-09(7))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479134/946-220-S99-3

Reference 11: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(g)(1)(ii))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 12: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 323
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 3
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481687/323-10-50-3

Reference 13: http://www.xbrl.org/2009/role/commonPracticeRef
-Topic 825
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 28
-Subparagraph (f)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482907/825-10-50-28

Reference 14: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 310
-SubTopic 10
-Name Accounting Standards Codification
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480418/310-10-S99-2

+ Details

EQUITY COMPENSATION PLANS - 2021 and 2018 Equity Compensation Plans (Details)	Sep. 30, 2024 shares
2021 Plan
Equity Compensation Plans
Number of common shares approved for issuance (in shares)	427,500
Number of shares available for issuance (in shares)	230,966
2018 Plan
Equity Compensation Plans
Number of common shares approved for issuance (in shares)	346,000
Number of shares available for issuance (in shares)	2,780

LOANS

9 Months Ended

Sep. 30, 2024

LOANS

LOANS

4. LOANS

The following table sets forth the classification of the Company’s loans by loan portfolio segment for the periods presented.


(in thousands)	September 30, 2024		December 31, 2023
Residential real estate	$	745,862	$	714,843
Multi-family		557,634		572,849
Commercial real estate		520,427		548,012
Commercial and industrial		171,899		107,912
Construction and land development		9,521		13,170
Consumer		470		413
Total loans		2,005,813		1,957,199
Allowance for credit losses		(23,406)		(19,658)
Total loans, net	$	1,982,407	$	1,937,541

At September 30, 2024 and December 31, 2023, the Company was servicing approximately $321.5 million and $262.8 million, respectively, of loans for others. The Company had $11.6 million and $8.9 million of SBA loans held for sale at September 30, 2024 and December 31, 2023, respectively. The Company had $5.1 million of residential real estate loans held for sale at September 30, 2024 and none at December 31, 2023.

For the three months ended September 30, 2024 and 2023, the Company sold loans totaling approximately $43.5 million and $18.4 million, respectively, recognizing net gains of $2.8 million and $1.5 million, respectively. For the nine months ended September 30, 2024 and 2023, the Company sold loans totaling approximately $105.6 million and $43.8 million, respectively, recognizing net gains of $7.9 million and $3.5 million, respectively.

The following tables summarize the activity in the allowance for credit losses by portfolio segment for the three and nine months ended September 30, 2024 and the allowance for loan losses for the three and nine months ended September 30, 2023:


	Three Months Ended September 30, 2024
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for credit losses:
Beginning balance	$	5,996	$	4,266	$	9,042	$	4,177	$	98	$	65	$	23,644
Charge-offs		—		(368)		—		(70)		—		—		(438)
Recoveries		—		—		—		—		—		—		—
Provision for credit losses		514		1,722		(2,652)		621		39		(44)		200
Ending balance	$	6,510	$	5,620	$	6,390	$	4,728	$	137	$	21	$	23,406


	Three Months Ended September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning balance	$	4,796	$	5,288	$	3,381	$	1,768	$	108	$	28	$	15,369
Charge-offs		—		(959)		—		(267)		—		—		(1,226)
Recoveries		—		—		—		43		—		—		43
Provision for loan losses		(18)		(123)		(184)		824		(4)		5		500
Ending balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686


	Nine Months Ended September 30, 2024
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for credit losses:
Beginning balance	$	5,001	$	4,671	$	8,390	$	1,419	$	122	$	55	$	19,658
Charge-offs		—		(368)		(30)		(216)		—		—		(614)
Recoveries		—		—		—		12		—		—		12
Provision for credit losses		1,509		1,317		(1,970)		3,513		15		(34)		4,350
Ending balance	$	6,510	$	5,620	$	6,390	$	4,728	$	137	$	21	$	23,406


	Nine Months Ended September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning balance	$	4,508	$	5,697	$	3,234	$	852	$	104	$	9	$	14,404
Charge-offs		—		(959)		—		(734)		—		—		(1,693)
Recoveries		—		—		—		43		—		—		43
Provision for loan losses		270		(532)		(37)		2,207		—		24		1,932
Ending balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686

Allowance for Credit Losses on Unfunded Commitments

The Company has recorded an ACL for unfunded credit commitments, which is recorded in other liabilities. The provision for credit losses on unfunded commitments is recorded within the provision for credit losses on the Company’s income statement. The following table presents the allowance for credit losses for unfunded commitments for the three and nine months ended September 30, 2024 and 2023:


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	314	$	170	$	124	$	170
Provision for credit losses		—		—		190		—
Balance at end of period	$	314	$	170	$	314	$	170

The following table presents the amortized cost basis of loans on nonaccrual status and loans past due over 89 days still accruing as of September 30, 2024 and December 31, 2023:


	September 30, 2024
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
(in thousands)	for Credit Loss		Nonaccrual		Still Accruing
Residential real estate	$	5,079	$	5,079	$	—
Multi-family		2,942		2,942		—
Commercial real estate		2,501		2,525		—
Commercial and industrial		2,071		4,819		—
Construction and land development		—		—		—
Consumer		—		—		—
Total	$	12,593	$	15,365	$	—


	December 31, 2023
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
(in thousands)	for Credit Loss		Nonaccrual		Still Accruing
Residential real estate	$	4,369	$	4,369	$	—
Multi-family		1,794		3,374		—
Commercial real estate		5,976		6,000		—
Commercial and industrial		708		708		—
Construction and land development		—		—		—
Consumer		—		—		—
Total	$	12,847	$	14,451	$	—

The Company recognized $0.1 million and $0.2 million of interest income on nonaccrual loans during the nine months ended September 30, 2024 and 2023, respectively.

Individually Analyzed Loans

Effective October 1, 2023, the Company began analyzing loans on an individual basis when management determined that the loan no longer exhibited risk characteristics consistent with the risk characteristics existing in its designed pool of loans, under the Company’s CECL methodology. Loans individually analyzed include certain nonaccrual loans.

As of September 30, 2024, the amortized cost basis of individually analyzed loans amounted to $14.7 million, of which $14.5 million were considered collateral dependent. For collateral dependent loans where the borrower is experiencing financial difficulty and repayment is likely to be substantially provided through the sale or operation of the collateral, the ACL is measured based on the difference between the fair value of the collateral adjusted for sales costs and the amortized cost basis of the loan, at measurement date. Certain assets held as collateral may be exposed to future deterioration in fair value, particularly due to changes in real estate markets or usage.

The following tables present the amortized cost basis and related allowance for credit loss of individually analyzed loans considered to be collateral dependent as of September 30, 2024 and December 31, 2023.


	September 30, 2024
(in thousands)	Amortized Cost Basis		Related Allowance

Residential real estate ⁽¹⁾	$	4,854	$	—
Multi-family⁽²⁾		2,920		—
Commercial real estate ⁽²⁾		2,530		—
Commercial and industrial ^{(1) (2) (3)}		4,167		2,500
Total	$	14,471	$	2,500

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

(3)	Secured by business assets


	December 31, 2023
(in thousands)	Amortized Cost Basis		Related Allowance

Residential real estate ⁽¹⁾	$	4,226	$	—
Multi-family⁽²⁾		3,356		397
Commercial real estate ⁽²⁾		5,986		24
Commercial and industrial ⁽¹⁾		272		—
Total	$	13,840	$	421

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

The following tables present the aging of the amortized cost basis in past due loans as of September 30, 2024 and December 31, 2023 by class of loans:


(in thousands)	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
September 30, 2024	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate	$	10,046	$	2,436	$	3,939	$	16,421	$	729,441	$	745,862
Multi-family		—		—		1,804		1,804		555,830		557,634
Commercial real estate		3,548		—		2,524		6,072		514,355		520,427
Commercial and industrial		1,069		884		4,864		6,817		165,082		171,899
Construction and land development		—		—		—		—		9,521		9,521
Consumer		—		—		—		—		470		470
Total	$	14,663	$	3,320	$	13,131	$	31,114	$	1,974,699	$	2,005,813


(in thousands)	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2023	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate	$	4,508	$	2,360	$	4,369	$	11,237	$	703,606	$	714,843
Multi-family		—		—		3,374		3,374		569,475		572,849
Commercial real estate		2,666		3,212		6,000		11,878		536,134		548,012
Commercial and industrial		755		555		211		1,521		106,391		107,912
Construction and land development		—		—		—		—		13,170		13,170
Consumer		—		—		—		—		413		413
Total	$	7,929	$	6,127	$	13,954	$	28,010	$	1,929,189	$	1,957,199

The Company adopted ASU 2022-02, Financial Instruments-Credit Losses (Topic 326) Troubled Debt Restructurings and Vintage Disclosures (“ASU 2022-02”) on October 1, 2023. The Company may occasionally make modifications to loans where the borrower is considered to be in financial distress. Types of modifications include principal reductions, significant payment delays, term extensions, interest rate reductions or a combination thereof. The amount of principal reduction is charged-off against the allowance for credit losses.

The following table presents the amortized cost basis of loans at September 30, 2024 that were both experiencing financial difficulty and modified during the three and nine months ended September 30, 2024, by class and type of modification. The percentage of the amortized cost basis of loans that were modified to borrowers in financial distress as compared to the amortized cost basis of each class of financing receivable is also presented below:


											% of
											Total
							Interest				Class of
	Principal		Payment		Term		Rate				Financing
(in thousands)	Reduction		Delay		Extension		Reduction		Combination		Receivable
Multi-family	$	1,140	$	—	$	—	$	—	$	—	0.20	%

The Company had no commitment to lend additional funds to the borrowers included in the previous table.

The Company monitors the performance of loans that are modified to borrowers experiencing financial difficulty to understand the effectiveness of its modification efforts. No such loans that have been modified in the last 12 months were past due.

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended September 30, 2024:


					Weighted
			Weighted		Average
			Average		Term
	Principal		Interest Rate		Extension
(in thousands)	Reduction		Reduction		(in months)
Multi-family	$	362	—	%	—

Upon the Company’s determination that a modified loan (or a portion of a loan) has subsequently been deemed uncollectible, the loan (or a portion of the loan) is written off. Therefore, the amortized cost basis of the loan is reduced by the uncollectible amount and the allowance for credit losses is adjusted by the same amount. During the three and nine months ended September 30, 2024, no loans that were modified in the last 12 months to borrowers experiencing financial difficulty had a payment default.

Credit Quality Indicators:

The Company has adopted a credit risk rating system as part of the risk assessment of its loan portfolio. The Company’s lending officers are required to assign a credit risk rating to each loan in their portfolio at origination. When the lender learns of important financial developments, the risk rating is reviewed and adjusted if necessary. In addition, the Company engages a third-party independent loan reviewer that performs quarterly reviews of a sample of loans, validating the credit risk ratings assigned to such loans. The credit risk ratings play an important role in the establishment of the loan loss provision and to confirm the adequacy of the allowance for credit losses.

The Company categorizes loans into risk categories based on relevant information about the ability of borrowers to service their debt such as: current financial information, historical payment experience, credit documentation, public information, and current economic trends, among other factors. The Company analyzes commercial loans individually by classifying the loans as to credit risk. The Company uses the following definitions for risk ratings:

Special Mention: The loan has potential weaknesses that deserve management’s close attention. If left uncorrected, these potential weaknesses may result in deterioration of repayment prospects for the asset or in the Company’s credit position at some future date.

Substandard: The loan is inadequately protected by current sound worth and paying capacity of the obligor or collateral pledged, if any. Loans classified as Substandard must have a well-defined weakness or weaknesses that jeopardize the liquidation of the debt. They are characterized by the distinct possibility that the Company will sustain some loss if the deficiencies are not corrected.

Doubtful: The loan has all the weaknesses inherent in one classified substandard with the added characteristic that the weaknesses make collection or liquidation in full, on the basis of currently existing factors, conditions, and values, highly questionable and improbable.

Loans not having a credit risk rating of Special Mention, Substandard or Doubtful are considered pass loans.

The following table summarizes the Company’s loans by year of origination and internally assigned credit risk at September 30, 2024 and gross charge-offs for the nine months ended September 30, 2024:


															Revolving
	Term Loans Amortized Cost by Origination Year												Revolving		Loans to
(in thousands)	2024		2023		2022		2021		2020		Prior		Loans		Term Loans		Total
Residential real estate ⁽¹⁾
Pass	$	76,989	$	183,933	$	197,791	$	61,250	$	35,657	$	151,718	$	—	$	26,168	$	733,506
Special Mention		408		879		588		1,205		891		769		—		—		4,740
Substandard		—		760		1,035		—		1,070		2,872		—		656		6,393
Total Residential real estate		77,397		185,572		199,414		62,455		37,618		155,359		—		26,824		744,639
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family
Pass		2,833		3,406		294,543		159,976		35,573		58,360		—		—		554,691
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		1,139		1,804		—		—		—		2,943
Total Multi-family		2,833		3,406		294,543		161,115		37,377		58,360		—		—		557,634
Current period gross charge-offs		—		—		—		368		—		—		—		—		368

Commercial real estate
Pass		27,279		77,473		174,315		78,467		22,295		121,053		—		—		500,882
Special Mention		—		911		3,550		8,855		399		1,301		—		—		15,016
Substandard		—		—		—		—		482		4,047		—		—		4,529
Total Commercial real estate		27,279		78,384		177,865		87,322		23,176		126,401		—		—		520,427
Current period gross charge-offs		—		—		—		—		—		30		—		—		30

Commercial and industrial
Pass		66,428		77,135		6,483		9,296		2,425		3,741		—		—		165,508
Special Mention		—		153		—		545		54		438		—		—		1,190
Substandard		25		213		2,500		1,309		561		593		—		—		5,201
Total Commercial and industrial		66,453		77,501		8,983		11,150		3,040		4,772		—		—		171,899
Current period gross charge-offs		18		146		—		—		52		—		—		—		216

Construction and land development
Pass		245		—		—		5,473		—		—		—		—		5,718
Special Mention		—		—		—		3,803		—		—		—		—		3,803
Substandard		—		—		—		—		—		—		—		—		—
Total Construction and land development		245		—		—		9,276		—		—		—		—		9,521
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Pass		93		301		76		—		—		—		—		—		470
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Consumer		93		301		76		—		—		—		—		—		470
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Total Loans	$	174,300	$	345,164	$	680,881	$	331,318	$	101,211	$	344,892	$	—	$	26,824	$	2,004,590

Gross charge-offs	$	18	$	146	$	—	$	368	$	52	$	30	$	—	$	—	$	614

(1)

Certain fixed rate residential mortgage loans are included in a fair value hedging relationship. The amortized cost excludes a contra asset of $1.2 million related to basis adjustments for loans in the closed portfolio under the portfolio layer method at September 30, 2024. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was dedesignated. See “Note 10 – Derivates” for more information on the fair value hedge.

The following table summarizes the Company’s loans by year of origination and internally assigned credit risk at December 31, 2023:


															Revolving
	Term Loans Amortized Cost by Origination Year												Revolving		Loans to
(in thousands)	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
Residential real estate ⁽¹⁾
Pass	$	191,238	$	207,166	$	64,906	$	39,772	$	79,581	$	98,150	$	—	$	24,975	$	705,788
Special Mention		—		—		—		522		230		—		—		—		752
Substandard		—		740		—		676		4,185		927		—		656		7,184
Total Residential real estate		191,238		207,906		64,906		40,970		83,996		99,077		—		25,631		713,724

Multi-family
Pass		3,533		299,217		162,678		36,592		10,854		56,601		—		—		569,475
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		1,580		1,794		—		—		—		—		3,374
Total Multi-family		3,533		299,217		164,258		38,386		10,854		56,601		—		—		572,849

Commercial real estate
Pass		86,834		187,570		80,761		26,300		42,476		95,265		—		—		519,206
Special Mention		—		1,852		8,433		293		3,647		6,427		—		—		20,652
Substandard		—		—		—		199		6,826		1,129		—		—		8,154
Total Commercial real estate		86,834		189,422		89,194		26,792		52,949		102,821		—		—		548,012

Commercial and industrial
Pass		74,352		11,392		10,015		4,407		126		5,274		—		—		105,566
Special Mention		—		—		913		—		—		540		—		—		1,453
Substandard		—		—		266		35		145		447		—		—		893
Total Commercial and industrial		74,352		11,392		11,194		4,442		271		6,261		—		—		107,912

Construction and land development
Pass		904		3,613		8,653		—		—		—		—		—		13,170
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Construction and land development		904		3,613		8,653		—		—		—		—		—		13,170

Consumer
Pass		326		87		—		—		—		—		—		—		413
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Consumer		326		87		—		—		—		—		—		—		413

Total Loans	$	357,187	$	711,637	$	338,205	$	110,590	$	148,070	$	264,760	$	—	$	25,631	$	1,956,080

(1)

Certain fixed rate residential mortgage loans are included in a fair value hedging relationship. The amortized cost excludes a contra asset of $1.1 million related to basis adjustments for loans in the closed portfolio under the portfolio layer method at December 31, 2023. These basis adjustments would be allocated to the amortized cost of specific loans within the pool if the hedge was dedesignated. See “Note 10 – Derivates” for more information on the fair value hedge.

FAIR VALUE - Significant Inputs Utilized in Cash Flow Models (Details)	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Fair Value Hierarchy
Servicing rights, valuation technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
SBA Loans
Fair Value Hierarchy
Servicing rights, valuation technique [Extensible List]	us-gaap:ValuationTechniqueDiscountedCashFlowMember	us-gaap:ValuationTechniqueDiscountedCashFlowMember
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	0.1213	0.1238
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.0658	0.0961
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	0.1463	0.1488
Significant Unobservable Inputs (Level 3) \| Discount Rate \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.5398	0.4146
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	0.1814	0.2625
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.0895	0.0885
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	0.1952
Significant Unobservable Inputs (Level 3) \| Prepayment Rate \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	0.3333	0.3024
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Minimum
Fair Value Hierarchy
Servicing rights, measurement input	2 years 1 month 20 days	1 year 6 months 18 days
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Minimum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	10 months 2 days	1 year 29 days
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Maximum
Fair Value Hierarchy
Servicing rights, measurement input	3 years 5 months 8 days	2 years 9 months 10 days
Significant Unobservable Inputs (Level 3) \| Weighted Average Life \| Maximum \| SBA Loans
Fair Value Hierarchy
Servicing rights, measurement input	5 years 1 month 13 days	5 years 8 months 15 days

BORROWINGS - FHLB Advances Contractual Maturities and Weighted Average Interest Rates (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
FHLB Contractual Maturity, Amount
2024/2025	$ 7,080	$ 18,860
2025/2026	40,475	7,080
2026/2027	40,250	40,475
2027/2028	20,000	40,250
2028		20,000
Total term advances	107,805	126,665
Total FHLB advances	125,805	126,665
FHLB overnight \| Overnight Borrowings Member
FHLB Contractual Maturity, Amount
Overnight	18,000
Overnight borrowings \| FHLB overnight
FHLB Contractual Maturity, Amount
Overnight	$ 18,000	$ 0
FHLB Contractual Maturity, Weighted Average Rate
Total FHLB advances, Weighted Average Rate	5.08%
Minimum [Member]
FHLB Contractual Maturity, Weighted Average Rate
2024/2025	0.56%	0.39%
2025/2026	4.29%	0.56%
2026/2027	4.13%	4.29%
2027/2028	3.99%	4.13%
2028		3.99%
Maximum [Member]
FHLB Contractual Maturity, Weighted Average Rate
2024/2025	0.59%	2.53%
2025/2026	4.98%	0.59%
2026/2027	4.74%	4.98%
2027/2028	4.58%	4.74%
2028		4.58%
Weighted Average
FHLB Contractual Maturity, Weighted Average Rate
2024/2025		0.98%
2025/2026	0.58%	0.58%
2026/2027	4.50%	4.50%
2027/2028	4.32%	4.32%
2028	4.18%	4.18%
Total term advances, Weighted average rate	4.11%	3.65%
Total FHLB advances, Weighted Average Rate	4.25%	3.65%
Weighted Average \| FHLB overnight \| Overnight Borrowings Member
FHLB Contractual Maturity, Weighted Average Rate
Total FHLB advances, Weighted Average Rate	5.08%

LOANS (Tables)

9 Months Ended

Sep. 30, 2024

LOANS

Major Classifications of Loans


(in thousands)	September 30, 2024		December 31, 2023
Residential real estate	$	745,862	$	714,843
Multi-family		557,634		572,849
Commercial real estate		520,427		548,012
Commercial and industrial		171,899		107,912
Construction and land development		9,521		13,170
Consumer		470		413
Total loans		2,005,813		1,957,199
Allowance for credit losses		(23,406)		(19,658)
Total loans, net	$	1,982,407	$	1,937,541

Activity in Allowance for Loan Losses by Portfolio Segment


	Three Months Ended September 30, 2024
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for credit losses:
Beginning balance	$	5,996	$	4,266	$	9,042	$	4,177	$	98	$	65	$	23,644
Charge-offs		—		(368)		—		(70)		—		—		(438)
Recoveries		—		—		—		—		—		—		—
Provision for credit losses		514		1,722		(2,652)		621		39		(44)		200
Ending balance	$	6,510	$	5,620	$	6,390	$	4,728	$	137	$	21	$	23,406


	Three Months Ended September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning balance	$	4,796	$	5,288	$	3,381	$	1,768	$	108	$	28	$	15,369
Charge-offs		—		(959)		—		(267)		—		—		(1,226)
Recoveries		—		—		—		43		—		—		43
Provision for loan losses		(18)		(123)		(184)		824		(4)		5		500
Ending balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686


	Nine Months Ended September 30, 2024
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for credit losses:
Beginning balance	$	5,001	$	4,671	$	8,390	$	1,419	$	122	$	55	$	19,658
Charge-offs		—		(368)		(30)		(216)		—		—		(614)
Recoveries		—		—		—		12		—		—		12
Provision for credit losses		1,509		1,317		(1,970)		3,513		15		(34)		4,350
Ending balance	$	6,510	$	5,620	$	6,390	$	4,728	$	137	$	21	$	23,406


	Nine Months Ended September 30, 2023
							Commercial		Construction
	Residential		Multi-		Commercial		and		and Land
	Real Estate		Family		Real Estate		Industrial		Development		Consumer
	Loans		Loans		Loans		Loans		Loans		Loans		Total
(in thousands)
Allowance for loan losses:
Beginning balance	$	4,508	$	5,697	$	3,234	$	852	$	104	$	9	$	14,404
Charge-offs		—		(959)		—		(734)		—		—		(1,693)
Recoveries		—		—		—		43		—		—		43
Provision for loan losses		270		(532)		(37)		2,207		—		24		1,932
Ending balance	$	4,778	$	4,206	$	3,197	$	2,368	$	104	$	33	$	14,686

Allowance for Credit Loss for unfunded Commitments


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	314	$	170	$	124	$	170
Provision for credit losses		—		—		190		—
Balance at end of period	$	314	$	170	$	314	$	170

Recorded Investment of Loans on Nonaccrual Status and Loans Past Due


	September 30, 2024
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
(in thousands)	for Credit Loss		Nonaccrual		Still Accruing
Residential real estate	$	5,079	$	5,079	$	—
Multi-family		2,942		2,942		—
Commercial real estate		2,501		2,525		—
Commercial and industrial		2,071		4,819		—
Construction and land development		—		—		—
Consumer		—		—		—
Total	$	12,593	$	15,365	$	—


	December 31, 2023
	Nonaccrual				Loans Past
	With No				Due Over
	Allowance				89 Days
(in thousands)	for Credit Loss		Nonaccrual		Still Accruing
Residential real estate	$	4,369	$	4,369	$	—
Multi-family		1,794		3,374		—
Commercial real estate		5,976		6,000		—
Commercial and industrial		708		708		—
Construction and land development		—		—		—
Consumer		—		—		—
Total	$	12,847	$	14,451	$	—

Amortized Cost Basis and Related Allowance for Credit Loss of Individually Analyzed Loans Considered as Collateral Dependent


	September 30, 2024
(in thousands)	Amortized Cost Basis		Related Allowance

Residential real estate ⁽¹⁾	$	4,854	$	—
Multi-family⁽²⁾		2,920		—
Commercial real estate ⁽²⁾		2,530		—
Commercial and industrial ^{(1) (2) (3)}		4,167		2,500
Total	$	14,471	$	2,500

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

(3)	Secured by business assets


	December 31, 2023
(in thousands)	Amortized Cost Basis		Related Allowance

Residential real estate ⁽¹⁾	$	4,226	$	—
Multi-family⁽²⁾		3,356		397
Commercial real estate ⁽²⁾		5,986		24
Commercial and industrial ⁽¹⁾		272		—
Total	$	13,840	$	421

(1)	Secured by residential real estate

(2)	Secured by commercial real estate

Aging of Recorded Investment in Past Due and Non-accrual Loans by Portfolio Segment


(in thousands)	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
September 30, 2024	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate	$	10,046	$	2,436	$	3,939	$	16,421	$	729,441	$	745,862
Multi-family		—		—		1,804		1,804		555,830		557,634
Commercial real estate		3,548		—		2,524		6,072		514,355		520,427
Commercial and industrial		1,069		884		4,864		6,817		165,082		171,899
Construction and land development		—		—		—		—		9,521		9,521
Consumer		—		—		—		—		470		470
Total	$	14,663	$	3,320	$	13,131	$	31,114	$	1,974,699	$	2,005,813


(in thousands)	30 - 59		60 - 89		Greater than
	Days		Days		89 Days		Total		Loans Not
December 31, 2023	Past Due		Past Due		Past Due		Past Due		Past Due		Total
Residential real estate	$	4,508	$	2,360	$	4,369	$	11,237	$	703,606	$	714,843
Multi-family		—		—		3,374		3,374		569,475		572,849
Commercial real estate		2,666		3,212		6,000		11,878		536,134		548,012
Commercial and industrial		755		555		211		1,521		106,391		107,912
Construction and land development		—		—		—		—		13,170		13,170
Consumer		—		—		—		—		413		413
Total	$	7,929	$	6,127	$	13,954	$	28,010	$	1,929,189	$	1,957,199

Financing Receivable, Modified


											% of
											Total
							Interest				Class of
	Principal		Payment		Term		Rate				Financing
(in thousands)	Reduction		Delay		Extension		Reduction		Combination		Receivable
Multi-family	$	1,140	$	—	$	—	$	—	$	—	0.20	%

The following table presents the financial effect of the loan modifications presented above to borrowers experiencing financial difficulty for the three and nine months ended September 30, 2024:


					Weighted
			Weighted		Average
			Average		Term
	Principal		Interest Rate		Extension
(in thousands)	Reduction		Reduction		(in months)
Multi-family	$	362	—	%	—

Loan Portfolio Based on Internal Rating Category


															Revolving
	Term Loans Amortized Cost by Origination Year												Revolving		Loans to
(in thousands)	2024		2023		2022		2021		2020		Prior		Loans		Term Loans		Total
Residential real estate ⁽¹⁾
Pass	$	76,989	$	183,933	$	197,791	$	61,250	$	35,657	$	151,718	$	—	$	26,168	$	733,506
Special Mention		408		879		588		1,205		891		769		—		—		4,740
Substandard		—		760		1,035		—		1,070		2,872		—		656		6,393
Total Residential real estate		77,397		185,572		199,414		62,455		37,618		155,359		—		26,824		744,639
Current period gross charge-offs	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—

Multi-family
Pass		2,833		3,406		294,543		159,976		35,573		58,360		—		—		554,691
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		1,139		1,804		—		—		—		2,943
Total Multi-family		2,833		3,406		294,543		161,115		37,377		58,360		—		—		557,634
Current period gross charge-offs		—		—		—		368		—		—		—		—		368

Commercial real estate
Pass		27,279		77,473		174,315		78,467		22,295		121,053		—		—		500,882
Special Mention		—		911		3,550		8,855		399		1,301		—		—		15,016
Substandard		—		—		—		—		482		4,047		—		—		4,529
Total Commercial real estate		27,279		78,384		177,865		87,322		23,176		126,401		—		—		520,427
Current period gross charge-offs		—		—		—		—		—		30		—		—		30

Commercial and industrial
Pass		66,428		77,135		6,483		9,296		2,425		3,741		—		—		165,508
Special Mention		—		153		—		545		54		438		—		—		1,190
Substandard		25		213		2,500		1,309		561		593		—		—		5,201
Total Commercial and industrial		66,453		77,501		8,983		11,150		3,040		4,772		—		—		171,899
Current period gross charge-offs		18		146		—		—		52		—		—		—		216

Construction and land development
Pass		245		—		—		5,473		—		—		—		—		5,718
Special Mention		—		—		—		3,803		—		—		—		—		3,803
Substandard		—		—		—		—		—		—		—		—		—
Total Construction and land development		245		—		—		9,276		—		—		—		—		9,521
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Consumer
Pass		93		301		76		—		—		—		—		—		470
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Consumer		93		301		76		—		—		—		—		—		470
Current period gross charge-offs		—		—		—		—		—		—		—		—		—

Total Loans	$	174,300	$	345,164	$	680,881	$	331,318	$	101,211	$	344,892	$	—	$	26,824	$	2,004,590

Gross charge-offs	$	18	$	146	$	—	$	368	$	52	$	30	$	—	$	—	$	614

(1)

The following table summarizes the Company’s loans by year of origination and internally assigned credit risk at December 31, 2023:


															Revolving
	Term Loans Amortized Cost by Origination Year												Revolving		Loans to
(in thousands)	2023		2022		2021		2020		2019		Prior		Loans		Term Loans		Total
Residential real estate ⁽¹⁾
Pass	$	191,238	$	207,166	$	64,906	$	39,772	$	79,581	$	98,150	$	—	$	24,975	$	705,788
Special Mention		—		—		—		522		230		—		—		—		752
Substandard		—		740		—		676		4,185		927		—		656		7,184
Total Residential real estate		191,238		207,906		64,906		40,970		83,996		99,077		—		25,631		713,724

Multi-family
Pass		3,533		299,217		162,678		36,592		10,854		56,601		—		—		569,475
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		1,580		1,794		—		—		—		—		3,374
Total Multi-family		3,533		299,217		164,258		38,386		10,854		56,601		—		—		572,849

Commercial real estate
Pass		86,834		187,570		80,761		26,300		42,476		95,265		—		—		519,206
Special Mention		—		1,852		8,433		293		3,647		6,427		—		—		20,652
Substandard		—		—		—		199		6,826		1,129		—		—		8,154
Total Commercial real estate		86,834		189,422		89,194		26,792		52,949		102,821		—		—		548,012

Commercial and industrial
Pass		74,352		11,392		10,015		4,407		126		5,274		—		—		105,566
Special Mention		—		—		913		—		—		540		—		—		1,453
Substandard		—		—		266		35		145		447		—		—		893
Total Commercial and industrial		74,352		11,392		11,194		4,442		271		6,261		—		—		107,912

Construction and land development
Pass		904		3,613		8,653		—		—		—		—		—		13,170
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Construction and land development		904		3,613		8,653		—		—		—		—		—		13,170

Consumer
Pass		326		87		—		—		—		—		—		—		413
Special Mention		—		—		—		—		—		—		—		—		—
Substandard		—		—		—		—		—		—		—		—		—
Total Consumer		326		87		—		—		—		—		—		—		413

Total Loans	$	357,187	$	711,637	$	338,205	$	110,590	$	148,070	$	264,760	$	—	$	25,631	$	1,956,080

(1)

LOANS - Activity in the allowance by portfolio segment (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 23,644		$ 19,658
Charge-offs	(438)		(614)
Recoveries			12
Provision for credit losses	200		4,350
Ending balance	23,406		23,406
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		$ 15,369		$ 14,404
Charge-offs		(1,226)		(1,693)
Recoveries		43		43
Provision for credit losses		500		1,932
Ending Balance		14,686		14,686
Residential Real Estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	5,996		5,001
Provision for credit losses	514		1,509
Ending balance	6,510		6,510
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		4,796		4,508
Provision for credit losses		(18)		270
Ending Balance		4,778		4,778
Multi-family
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	4,266		4,671
Charge-offs	(368)		(368)
Provision for credit losses	1,722		1,317
Ending balance	5,620		5,620
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		5,288		5,697
Charge-offs		(959)		(959)
Provision for credit losses		(123)		(532)
Ending Balance		4,206		4,206
Commercial real estate
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	9,042		8,390
Charge-offs			(30)
Provision for credit losses	(2,652)		(1,970)
Ending balance	6,390		6,390
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		3,381		3,234
Provision for credit losses		(184)		(37)
Ending Balance		3,197		3,197
Commercial and industrial
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	4,177		1,419
Charge-offs	(70)		(216)
Recoveries			12
Provision for credit losses	621		3,513
Ending balance	4,728		4,728
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		1,768		852
Charge-offs		(267)		(734)
Recoveries		43		43
Provision for credit losses		824		2,207
Ending Balance		2,368		2,368
Construction and land development
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	98		122
Provision for credit losses	39		15
Ending balance	137		137
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		108		104
Provision for credit losses		(4)
Ending Balance		104		104
Consumer
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	65		55
Provision for credit losses	(44)		(34)
Ending balance	$ 21		$ 21
Allowance for loan losses by portfolio segment [Roll Forward]
Beginning Balance		28		9
Provision for credit losses		5		24
Ending Balance		$ 33		$ 33

LOANS - Allowance for credit losses on unfunded commitments (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 23,644		$ 19,658
Provision for credit losses	200		4,350
Ending balance	23,406		23,406
Unfunded credit commitments
Financing Receivable, Excluding Accrued Interest, Allowance for Credit Loss [Roll Forward]
Beginning balance	314	$ 170	124	$ 170
Provision for credit losses	0	0	190	0
Ending balance	$ 314	$ 170	$ 314	$ 170

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - $ / shares	3 Months Ended
	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (UNAUDITED)
Cash dividends declared on common stock (in dollars per share)	$ 0.10	$ 0.10	$ 0.10	$ 0.10	$ 0.10	$ 0.10

DERIVATIVES - Additional Information (Details) - Interest rate swap - USD ($) $ in Millions	Nov. 01, 2023	Sep. 30, 2024	Dec. 31, 2023
Cash flow hedge
DERIVATIVES
Notional amount		$ 75.0	$ 75.0
Fair value hedges
DERIVATIVES
Term of interest rate swaps	3 years
Notional amount	$ 50.0
Fixed rate of interest	4.56%

SECURITIES (Tables)

9 Months Ended

Sep. 30, 2024

SECURITIES

Investment Securities Available for Sale and Held to Maturity


	September 30, 2024
			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit
(in thousands)	Cost		Gains		Losses		Losses		Fair Value
Available for sale:
U.S. Treasury securities	$	24,925	$	—	$	—	$	—	$	24,925
U.S. GSE residential mortgage-backed securities		7,787		62		(119)		—		7,730
Collateralized loan obligations		46,479		196		—		—		46,675
Corporate bonds		20,395		77		(1,443)		—		19,029
Total available for sale securities	$	99,586	$	335	$	(1,562)	$	—	$	98,359

			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized				for Credit
	Cost		Gains		Losses		Fair Value		Losses
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,313	$	—	$	(59)	$	1,254	$	—
U.S. GSE commercial mortgage-backed securities		2,515		—		(62)		2,453		—
Total held to maturity securities	$	3,828	$	—	$	(121)	$	3,707	$	—


	December 31, 2023
			Gross		Gross		Allowance
	Amortized		Unrealized		Unrealized		for Credit
(in thousands)	Cost		Gains		Losses		Losses		Fair Value
Available for sale:
U.S. GSE residential mortgage-backed securities	$	309	$	—	$	(108)	$	—	$	201
Collateralized loan obligations		50,283		82		(99)		—		50,266
Corporate bonds		12,700		—		(1,748)		—		10,952
Total available for sale securities	$	63,292	$	82	$	(1,955)	$	—	$	61,419

			Gross		Gross				Allowance
	Amortized		Unrecognized		Unrecognized				for Credit
	Cost		Gains		Losses		Fair Value		Losses
Held to maturity:
U.S. GSE residential mortgage-backed securities	$	1,480	$	—	$	(96)	$	1,384	$	—
U.S. GSE commercial mortgage-backed securities		2,561		—		(110)		2,451		—
Total held to maturity securities	$	4,041	$	—	$	(206)	$	3,835	$	—

Securities Portfolio by Contractual Maturity


	September 30, 2024
	Amortized		Fair
(in thousands)	Cost		Value
Securities available for sale:
Due in one year or less	$	24,925	$	24,925
Due after one year through five years		1,000		1,024
Five to ten years		52,935		51,678
Beyond ten years		12,939		13,002
U.S. GSE residential mortgage-backed securities		7,787		7,730
Total securities available for sale		99,586		98,359
Securities held to maturity:
U.S. GSE residential mortgage-backed securities		1,313		1,254
U.S. GSE commercial mortgage-backed securities		2,515		2,453
Total securities held to maturity		3,828		3,707
Total investment securities	$	103,414	$	102,066

Gross Unrealized Losses and Fair Values of Investment Securities


	September 30, 2024
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	3,473	$	(29)	$	186	$	(90)	7	$	3,659	$	(119)
Corporate bonds		1,565		(59)		11,316		(1,384)	9		12,881		(1,443)
Total available-for-sale	$	5,038	$	(88)	$	11,502	$	(1,474)	16	$	16,540	$	(1,562)


	December 31, 2023
	Less than Twelve Months				Twelve Months or Longer				Total
			Gross				Gross					Gross
			Unrealized				Unrealized		Number of			Unrealized
(in thousands, except number of securities)	Fair Value		Losses		Fair Value		Losses		Securities	Fair Value		Losses
Available-for-sale:
U.S. GSE residential mortgage-backed securities	$	—	$	—	$	201	$	(108)	5	$	201	$	(108)
Collateralized loan obligations		12,352		(99)		—		—	3		12,352		(99)
Corporate bonds		1,080		(120)		9,872		(1,628)	7		10,952		(1,748)
Total available-for-sale	$	13,432	$	(219)	$	10,073	$	(1,736)	15	$	23,505	$	(1,955)

DERIVATIVES

9 Months Ended

Sep. 30, 2024

DERIVATIVES

DERIVATIVES

10. DERIVATIVES

As part of its asset liability management, the Company utilizes interest rate swap agreements to help manage its interest rate risk position. The notional amount of the interest rate swap does not represent the amount exchanged by the parties. The amount exchanged is determined by reference to the notional amount and the other terms of the individual interest rate swap agreements.

The following sets forth information regarding the Company’s derivative financial instruments at the periods indicated:


	Assets				Liabilities
	Notional				Notional
(in thousands)	Amount		Fair Value ⁽¹⁾		Amount		Fair Value⁽¹⁾
September 30, 2024
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	—	$	—	$	75,000	$	(1,480)
Fair value hedges:
Interest rate swaps (Loans)		—		—		50,000		(1,177)
Total	$	—	$	—	$	125,000	$	(2,657)

December 31, 2023
Cash flow hedges:
Interest rate swaps (Brokered Certificates of Deposit)	$	—	$	—	$	75,000	$	(1,256)
Fair value hedges:
Interest rate swaps (Loans)		—		—		50,000		(1,105)
Total	$	—	$	—	$	125,000	$	(2,361)

(1)

Cash Flow Hedges of Interest Rate Risk

Interest rate swaps with notional amounts totaling $75.0 million as of September 30, 2024 and December 31, 2023, were designated as cash flow hedges of certain Brokered Certificates of Deposit. The swaps were determined to be fully effective during the periods presented and therefore no amount of ineffectiveness has been included in net income. The aggregate fair value of the swaps is recorded in other assets/(other liabilities) with changes in fair value recorded in other comprehensive income (loss). The amount included in accumulated other comprehensive income (loss) would be reclassified to current earnings should the hedges no longer be considered effective. The Company expects the hedges to remain fully effective during the remaining term of the swaps.

The following table presents the net gains (losses) recorded in accumulated other comprehensive income and the consolidated statements of income relating to the cash flow derivative instruments for the periods indicated.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
(Loss) gain recognized in other comprehensive income	$	(1,231)	$	237	$	(175)	$	348
Gain recognized in interest expense		184		96		557		104

Fair Value Hedges of Interest Rate Risk

On November 1, 2023, the Company entered into a three year interest rate swap with a notional amount totaling $50 million which was designated as a fair value hedge of certain fixed rate residential mortgages. The Company pays a fixed rate of 4.56% and receives a floating rate based on SOFR for the life of the agreement without an exchange of the underlying notional amount. The hedge was determined to be effective during the nine months ended September 30, 2024 and the Company expects the hedge to remain effective during the remaining term of the swap. The gain or loss on the derivative as well as the offsetting loss or gain on the hedged item attributable to the hedged risk is recognized in interest income.

The following table presents the effects of the Company’s derivative instruments designated as fair value hedges on the Consolidated Statements of Income for the three and nine months ended September 30, 2024. There were no fair value hedges for the three and nine months ended September 30, 2023.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Net gain on hedged items recorded in interest income on loans	$	28	$	—	$	32	$	—
Gain on hedge recorded in interest income on loans		93		—		284		—

At September 30, 2024 and December 31, 2023, the following amounts were recorded on the Statement of Financial Condition related to cumulative basis adjustment for fair value hedges.


	September 30,		December 31,
(in thousands)	2024		2023
Loans receivable:
Carrying amount of the hedged assets⁽¹⁾	$	50,000	$	50,000
Fair value hedging adjustment included in the carrying amount of the hedged assets		1,223		1,119

(1)

Credit-Risk-Related Contingent Features

The Company has minimum collateral posting thresholds with certain of its derivative counterparties. If the termination value of derivatives is a net liability position, the Company is required to post collateral against its obligations under the agreements. However, if the termination value of derivatives is a net asset position, the counterparty is required to post collateral to the Company. At September 30, 2024 and December 31, 2023, the Company posted $3.0 million and $2.2 million, respectively, in collateral to its counterparties in a net liability position.

FAIR VALUE (Tables)

9 Months Ended

Sep. 30, 2024

FAIR VALUE

Assets Measured at Fair Value on Recurring Basis


	September 30, 2024
			Fair Value Measurements Using:
			Quoted Prices In				Significant
			Active Markets		Significant Other		Unobservable
	Carrying		for Identical Assets		Observable Inputs		Inputs
(in thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. Treasury securities	$	24,925	$	—	$	24,925	$	—
U.S. GSE residential mortgage-backed securities		7,730		—		7,730		—
Collateralized loan obligations		46,675		—		46,675		—
Corporate bonds		19,029		—		19,029		—
Loan servicing rights		5,765		—		—		5,765
Total	$	104,124	$	—	$	98,359	$	5,765

Financial liabilities:
Derivatives	$	2,657	$	—	$	2,657	$	—


	December 31, 2023
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)
Financial assets:
Available-for-sale securities:
U.S. GSE residential mortgage-backed securities	$	201	$	—	$	201	$	—
Collateralized loan obligations		50,266		—		50,266		—
Corporate bonds		10,952		—		10,952		—
Loan servicing rights		4,668		—		—		4,668
Total	$	66,087	$	—	$	61,419	$	4,668

Financial liabilities:
Derivatives	$	2,361	$	—	$	2,361	$	—

Changes in mortgage servicing rights


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands)	2024		2023		2024		2023
Balance at beginning of period	$	5,465	$	4,375	$	4,668	$	4,402
Additions		518		265		1,596		757
Adjustment to fair value		(218)		(161)		(499)		(680)
Balance at end of period	$	5,765	$	4,479	$	5,765	$	4,479

Assets Measured at Fair Value on a Non-recurring Basis

December 31, 2023

Fair Value Measurements Using:

Quoted Prices In

Significant

Active Markets

Significant Other

Unobservable

Carrying

for Identical Assets

Observable Inputs

Inputs

(in thousands)

Amount

(Level 1)

(Level 2)

(Level 3)

Individually evaluated loans - Multi-family

1,180

—

1,180

Summary of additional quantitative information about level 3 fair value measured at fair value on non-nonrecurring

Range

December 31, 2023

Fair Value

Valuation Technique

Unobservable Input

(Weighted Average)

(Dollar in thousands)

Individually evaluated loans - Multi-family

1,180

Appraisal of collateral

Appraisal and

50.00%

adjustments ⁽¹⁾

(50.00%)

(1)

Financial Instruments Not Measured at Fair Value


	September 30, 2024
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	141,231	$	141,231	$	—	$	—	$	141,231
Securities held-to-maturity		3,828		—		3,707		—		3,707
Loans, net		1,982,407		—		—		1,955,544		1,955,544
Accrued interest receivable		12,522		—		1,202		11,320		12,522

Financial liabilities:
Time deposits		504,100		—		505,055		—		505,055
Demand and other deposits		1,453,444		1,453,444		—		—		1,453,444
Borrowings		125,805		—		126,851		—		126,851
Subordinated debentures		24,675		—		24,894		—		24,894
Accrued interest payable		1,865		4		1,861		—		1,865


	December 31, 2023
			Fair Value Measurements Using:
			Quoted Prices In
			Active Markets				Significant
			for Identical		Significant Other		Unobservable
	Carrying		Assets		Observable Inputs		Inputs		Total Fair
(In thousands)	Amount		(Level 1)		(Level 2)		(Level 3)		Value
Financial assets:
Cash and cash equivalents	$	177,207	$	177,207	$	—	$	—	$	177,207
Securities held-to-maturity		4,041		—		3,835		—		3,835
Loans, net		1,937,541		—		—		1,890,113		1,890,113
Accrued interest receivable		11,915		—		1,156		10,759		11,915

Financial liabilities:
Time deposits		522,198		—		520,022		—		520,022
Demand and other deposits		1,382,397		1,382,397		—		—		1,382,397
Borrowings		128,953		—		128,165		—		128,165
Subordinated debentures		24,635		—		26,601		—		26,601
Accrued interest payable		1,724		161		1,563		—		1,724

- Definition

Tabular disclosure of the fair value measurement of assets using significant unobservable inputs (Level 3), a reconciliation of the beginning and ending balances, separately presenting changes during the period attributable to the following: (1) total gains or losses for the period (realized and unrealized), segregating those gains or losses included in earnings (or changes in net assets) and gains or losses recognized in other comprehensive income (loss), and a description of where those gains or losses included in earnings (or changes in net assets) are reported in the statement of income (or activities); (2) purchases, sales, issues, and settlements (each type disclosed separately); and (3) transfers in and transfers out of Level 3 (for example, transfers due to changes in the observability of significant inputs), by class of asset.

+ References + Details

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
Net income	$ 3,539	$ 3,523	$ 8,444	$ 9,826
Unrealized gains (losses) on investment securities available for sale:
Change in unrealized gain (loss) on securities available for sale arising during the period, net of tax of $122, ($42), $142 and ($266), respectively	438	(150)	508	(955)
Reclassification adjustment for gains realized in net income, net of tax of $0, $0, ($1) and $0, respectively			(3)
Net change in unrealized gains (losses) on securities available for sale	438	(150)	505	(955)
Unrealized (losses) gains on cash flow hedges:
Change in unrealized (loss) gain on cash flow hedges arising during the period, net of tax of ($340), $66, ($49) and $97, respectively	(1,231)	237	(175)	348
Total other comprehensive income (loss), net of tax	(793)	87	330	(607)
Total comprehensive income, net of tax	$ 2,746	$ 3,610	$ 8,774	$ 9,219

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2024

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION, ACCOUNTING POLICIES AND RECENT ACCOUNTING PRONOUNCEMENTS

Hanover Bancorp, Inc. (the “Company”), is a New York corporation which is the holding company for Hanover Community Bank (the “Bank”). The Bank, headquartered in Mineola, New York, is a New York State chartered bank. The Bank commenced operations on November 4, 2008 and is a full-service bank providing personal and business lending and deposit services. As a New York State chartered, non-Federal Reserve member bank, the Bank is subject to regulation by the New York State Department of Financial Services (“DFS”) and the Federal Deposit Insurance Corporation (“FDIC”). The Company is subject to regulation and examination by the Board of Governors of the Federal Reserve System (the “FRB”). At the Company’s annual shareholder meeting held on March 5, 2024, the shareholders approved a change in its state of incorporation from the State of New York to the State of Maryland subject to regulatory approval, which remains pending.

Basis of Presentation

In October 2023, the Company’s Board of Directors approved a change in the Company’s fiscal year end from September 30 to December 31. The Company’s current fiscal year is the calendar year January 1, 2024 through December 31, 2024 (fiscal year 2024).

In the opinion of the Company’s management, the preceding unaudited interim consolidated financial statements contain all adjustments, consisting of normal accruals, necessary for a fair presentation of the Company’s consolidated statement of financial condition as of September 30, 2024, its consolidated statements of income for the three and nine months ended September 30, 2024 and 2023, its consolidated statements of comprehensive income for the three and nine months ended September 30, 2024 and 2023, its consolidated statements of changes in stockholders’ equity for the three and nine months ended September 30, 2024 and 2023 and its consolidated statements of cash flows for the nine months ended September 30, 2024 and 2023. Certain prior period amounts have been reclassified to conform to the current period presentation. These reclassifications had an immaterial effect on the Company’s consolidated financial statements and had no effect on prior period net income or stockholders’ equity.

In addition, the preceding unaudited interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X, as well as in accordance with predominant practices within the banking industry. They do not include all the information and footnotes required by U.S. GAAP for complete financial statements. The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates. The results of operations for the three and nine months ended September 30, 2024 are not necessarily indicative of results for any other interim period or of the results for the full fiscal year 2024. The unaudited consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2023.

All material intercompany accounts and transactions have been eliminated in consolidation. Unless the context otherwise requires, references herein to the Company include the Company and the Bank on a consolidated basis.

Accounting Policies

Securities - Investment securities are classified as held-to-maturity or available-for-sale at the time of purchase. Investment securities classified as held-to-maturity, which management has the positive intent and ability to hold to maturity, are reported at amortized cost. Investment securities classified as available for sale, which management has the intent and ability to hold for an indefinite period of time, but not necessarily to maturity, are carried at fair value, with unrealized gains and losses, net of related deferred income taxes, included in stockholders’ equity as a separate component of other comprehensive income. Any decision to sell investment securities available for sale would be based on various factors, including, but not limited to, asset / liability management strategies, changes in interest rates or prepayment risks, liquidity needs, or regulatory capital considerations.

Premiums are amortized and discounts accreted using the interest method over the remaining terms of the related securities. Dividend and interest income are recognized when earned. Sales of investment securities are recorded at trade date, with realized gains and losses on sales determined using the specific identification method and included in non-interest income.

A debt security is placed on nonaccrual status at the time any principal or interest payments become 90 days delinquent. Interest accrued but not received for a security placed on nonaccrual is reversed against interest income.

Alowance for Credit Losses – Held-to-Maturity Securities – Management measures expected credit losses on held-to-maturity debt securities on a collective basis by major security type. Accrued interest receivable on held-to-maturity debt securities totaled $42 thousand and $9 thousand at September 30, 2024 and December 31, 2023, respectively, and is excluded from the estimate of credit losses.

The estimate of expected credit losses considers historical credit loss information that is adjusted for current conditions and reasonable and supportable forecasts.

Management classifies the held-to-maturity portfolio into the following major security types: Mortgage backed: residential and commercial. All mortgage-backed: residential and commercial securities held by the Company are issued by U.S. government entities and agencies. These securities are either explicitly or implicitly guaranteed by the U.S. government, are highly rated by major rating agencies and have a long history of no credit losses.

Allowance for Credit Losses – Available-For-Sale Securities – For available-for-sale debt securities in an unrealized loss position, the Company first assesses whether it intends to sell, or it is more likely than not that it will be required to sell the security before recovery of its amortized cost basis. If either of the criteria regarding intent or requirement to sell is met, the security’s amortized cost basis is written down to fair value through income. For debt securities available-for-sale that do not meet the aforementioned criteria, the Company evaluates whether the decline in fair value has resulted from credit losses or other factors. In making this assessment, management considers the extent to which fair value is less than amortized cost, any changes to the rating of the security by a rating agency, and adverse conditions specifically related to the security, among other factors. If this assessment indicates that a credit loss exists, an allowance for credit losses is recorded for the credit loss, limited by the amount that the fair value is less than the amortized cost basis. Any impairment that has not been recorded through an allowance for credit losses is recognized in other comprehensive income.

Changes in the allowance for credit losses are recorded as credit loss expense (or reversal). Losses are charged against the allowance when management believes the uncollectibility of an available-for-sale security is confirmed or when either of the criteria regarding intent or requirement to sell is met.

Accrued interest receivable on available-for-sale debt securities totaled $0.8 million at both September 30, 2024 and December 31, 2023, and is excluded from the estimate of credit losses.

Loans and Loan Interest Income Recognition - Loans that the Company has the intent and ability to hold for the foreseeable future or until maturity or payoff, are reported at the principal balance outstanding, net of purchase premiums and discounts, deferred loan fees and costs and an allowance for credit losses. The loan portfolio is segmented into residential real estate, multi-family, commercial real estate, commercial and industrial, construction and land development, and consumer loans. Accrued interest receivable totaled $11.3 million and $10.8 million at September 30, 2024 and December 31, 2023, respectively, and was reported in Accrued interest receivable on the Consolidated Statements of Financial Condition and is excluded from the estimate of credit losses. Interest income on loans is accrued on the unpaid principal balance and credited to income as earned. Interest income on loans is discontinued and placed on nonaccrual status at the time the loan is 90 days delinquent. Net loan origination fees and costs are deferred and accreted/amortized to interest income over the contractual life of loans using the level-yield method, adjusted for actual prepayments.

Loans Held for Sale – Mortgage and SBA and other government guaranteed loans originated and intended for sale in the secondary market are carried at estimated fair value as determined by outstanding commitments from investors. Periodically, the Company originates various residential mortgage loans for sale to investors generally on a servicing released basis. The sale of such loans is generally arranged through a master commitment on a best-efforts basis. Net unrealized losses, if any, are recorded as a valuation allowance and charged to earnings. Premiums, discounts, origination fees and costs on loans held for sale are deferred and recognized as a component of the gain or loss on sale. Gains and losses on sales of loans held for sale are included in non-interest income, recognized on settlement date and are determined to be the difference between the sale proceeds and the carrying value of the loans. These transactions are accounted for as sales based on satisfaction of the criteria for such accounting which provides that, as transferor, the Company has surrendered control of the loans.

For liquidity purposes generally, there are instances when loans originated with the intent to hold in the portfolio are subsequently transferred to loans held for sale. At transfer, they are carried at the lower of cost or fair value.

Allowance for Credit Losses - Loans – The allowance for credit losses is a valuation account that is deducted from the loans’ amortized cost basis to present the net amount expected to be collected on the loans. Loans are charged off against the allowance when management believes the uncollectability of a loan balance is confirmed. Expected recoveries do not exceed the aggregate of amounts previously charged-off and expected to be charged-off.

Management estimates the allowance balance using relevant available information, from internal and external sources, relating to past events, current conditions, and reasonable and supportable forecasts. Historical credit loss experience provides the basis for the estimation of expected credit losses. Adjustments to historical loss information are made for differences in current loan-specific risk characteristics such as differences in underwriting standards, portfolio mix, delinquency level, or term as well as for changes in environmental conditions, such as changes in unemployment rates, property values, or other relevant factors.

The allowance for credit losses is measured on a collective (pool) basis when similar risk characteristics exist. Loans that do not share risk characteristics are evaluated on an individual basis. Loans evaluated individually are not included in the collective evaluation. When management determines that collection in full is not probable, expected credit losses are based on the fair value of the collateral or discounted value of the projected cash flows at the reporting date, adjusted for selling costs as appropriate.

The quantitative component of the estimate relies on the statistical relationship between the projected value of an economic indicator and the implied historical loss experience among a curated group of peers. The Company utilized regression analyses of peer data, in which the Company was included, and where observed credit losses and selected economic factors were used to determine suitable loss drivers for modeling the lifetime rates of probability of default (PD). A loss given default rate (LGD) is assigned to each pool for each period based on these PD outcomes. The model primarily utilizes an expected discounted cash flow (DCF) analysis with a remaining life (RL) approach used limitedly. The DCF analysis is run at the instrument-level and incorporates an array of loan-specific data points and segment-implied assumptions to determine the lifetime expected loss attributable to each instrument. An implicit "hypothetical loss" is derived for each period of the DCF, and helps establish the present value of future cash flows for each period. The reserve applied to a specific instrument is the difference between the sum of the present value of future cash flows and the amortized cost basis of the loan at the measurement date. The RL approach utilizes projected loss rates based on the remaining life of a loan

pool. It is utilized when a regression analysis could not provide adequate correlation of PD and external economic factors on which to base projected losses. During the quarter ended September 30, 2024, the Company updated the model utilized for the commercial and industrial allowance for credit loss loan segment from RL to DCF. The update was due to the Company now having the appropriate data needed to utilize the DCF model, whereas before the Company did not have the appropriate data. The change in methodology did not have a material impact to the allowance reserve for the commercial and industrial loan segment.

Portfolio segments are the level at which loss assumptions are applied to a pool of loans based on the similarity of risk characteristics inherent in the included instruments, relying on FFIEC Call Report codes. The loss driver for each loan portfolio segment is derived from a readily available and reasonable economic forecast, chiefly the Federal Open Market Committee (“FOMC”) of the Federal Reserve's projections of civilian unemployment and year-over-year U.S. GDP growth. Forecasts are applied over a four-quarter period and revert to the lookback period's historical mean for the economic indicator over a four-quarter horizon, on a straight-line basis.

The model incorporates qualitative factor adjustments in order to calibrate the model for risk in each portfolio segment that may not be captured through quantitative analysis. Determinations regarding qualitative adjustments are reflective of management's expectation of loss conditions differing from those already captured in the quantitative component of the model. Factors that the Company considers include a) changes in lending policies and procedures, including changes in underwriting standards and collections, charge offs, and recovery practices; b) changes in international, national, regional, and local conditions; c) changes in the nature and volume of the portfolio and term loans; d) changes in experience, depth, and ability of lending management; e) changes in volume and severity of past due loans and other similar conditions; f) changes in the quality of the Bank’s loan review system; g) changes in the value of underlying collateral for collateral dependent loans; h) the existence and effect of any concentrations of credit and changes in the levels of such concentrations; and i) the effects of other external factors (i.e. competition, legal and regulatory requirements) on the level of estimated credit losses.

Allowance for credit losses are aggregated for the major loan segments, with similar characteristics, summarized below. However, for the purposes of calculating reserves, these segments may be further broken down into loan classes by risk characteristics that include but are not limited to FFIEC Call Report codes, industry type, geographic location, and collateral type.

One-to-four family residential mortgage loans involve certain risks such as interest rate risk and risk of nonpayment. Adjustable-rate loans decrease the interest rate risk to the Bank that is associated with changes in interest rates but involve other risks, primarily because as interest rates rise, the payment by the borrower rises to the extent permitted by the terms of the loan, thereby increasing the potential for default. At the same time, the marketability of the underlying property may be adversely affected by higher interest rates. Repayment risk can be affected by the overall health of the economy, including unemployment rates and housing prices.

Commercial real estate lending entails additional risks as compared with single-family residential property lending. Such loans typically involve large loan balances to single borrowers or groups of related borrowers. Loans in this classification include income producing investment properties and owner-occupied real estate used for business purposes. The underlying properties are located largely in the Bank’s primary market area. The cash flows of the income producing investment properties could be adversely impacted by a downturn in the economy as evidenced by increased vacancy rates, which in turn, could have an effect on credit quality. In the case of owner-occupied real estate used for business purposes, a weakened economy and resultant decreased consumer and/or business spending could have an adverse effect on credit quality.

Multifamily lending entails additional risks as compared with single-family residential property lending, but less when compared to commercial real estate lending. Loans in this classification include income producing residential investment properties of five or more units. Loans are made to established owners with a proven and demonstrable record of strong performance. Loans are secured by a first mortgage lien on the subject property. Repayment is derived generally from the rental income generated from the property and may be supplemented by the owners’ personal cash flow. Credit risk arises with changes in economic conditions that could cause an increase in vacancy rates or decline in property value.

Commercial and industrial lending is generally considered higher risk due to the concentration of principal in a limited number of loans and borrowers and the effects of general economic conditions on the business. Generally, these loans are primarily secured by inventories and other assets of the business and repayment is expected from the cash flows of the business. A weakened economy, and resultant decreased consumer and/or business spending, will have an effect on the credit quality in this loan class.

The Company’s construction loan portfolio covers the development of commercial properties. Construction loans involve the disbursement of funds during construction with repayment substantially dependent on the success of the ultimate project. These loans are closely monitored by on-site inspections and are considered to have higher risks than other real estate loans because their ultimate repayment depends on the satisfactory completion of construction and is sensitive to interest rate changes, governmental regulation of real property, general economic conditions and the availability of long-term financing. Repayment is dependent on completion of the project and the subsequent financing of the completed project as a commercial real estate loan, and in some instances on the rent or sale of the underlying project.

Consumer loans generally have shorter terms and higher interest rates than other lending but generally involve more credit risk because of the type and nature of the collateral and, in certain cases, the absence of collateral. Repayment is dependent on the credit quality of the individual borrower and, if applicable, sale of the collateral securing the loan. Therefore, the overall health of the economy, including unemployment rates and housing prices, will have an effect on the credit quality in this loan class.

Allowance for Credit losses on Off-Balance Sheet Credit Exposures – The Company estimates expected credit losses over the contractual period in which the Company is exposed to credit risk via a contractual obligation to extend credit, unless the obligation is unconditionally cancellable by the Company. The allowance for credit losses on off-balance sheet credit exposures is reported on the Consolidated Statements of Financial Condition in the other liabilities section and is adjusted through a provision for credit losses. The estimate includes consideration of the likelihood that funding will occur and an estimate of expected credit losses on commitments expected to be funded over the commitment’s estimated useful life.

Series A Preferred Stock - Holders of the Company’s Series A preferred stock will be entitled to receive dividends when, as and if declared by the Company’s board of directors, in the same per share amount as the common stockholders. No dividend for any quarterly period will be payable on the common stock unless a dividend identical to that paid on the common stock is paid at the same time on the Series A preferred stock. Therefore, Series A preferred stock is treated as common stock for EPS calculations. Series A preferred stock has no voting rights. In the event of a dissolution of the Company, Series A preferred stock is entitled to the payment of any declared and unpaid dividend, and then will share in dissolution proceeds, if any, with the shares of common stock.

Recent Accounting Pronouncements

Standards That Have Not Yet Been Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvement to Income Tax Disclosures, which will require public business entities to disclose annually a tabular rate reconciliation, including specific items such as state and local income tax, tax credits, nontaxable or nondeductible items, among others, and a separate disclosure requiring disaggregation of reconciling items as described above which equal or exceed 5% of the product of multiplying income from continuing operations by the applicable statutory income tax rate. The ASU is effective for all public business entities for annual periods beginning after December 15, 2024. The Company is currently evaluating the impact of this standard on our consolidated financial statements and related disclosures.

BORROWINGS

9 Months Ended

Sep. 30, 2024

BORROWINGS

BORROWINGS

8. BORROWINGS

Federal Home Loan Bank (“FHLB”) Advances

At September 30, 2024 and December 31, 2023, FHLB term borrowings outstanding were $107.8 million and $126.7 million, respectively, all of which were fixed rate.

At September 30, 2024, the Company had $18.0 million in FHLB overnight borrowings outstanding at a rate of 5.08%. There were no FHLB overnight borrowings outstanding at December 31, 2023.

Each advance is payable at its maturity date, with a prepayment penalty for fixed rate advances. The advances were collateralized by residential and commercial mortgage loans under a blanket lien arrangement at September 30, 2024 and December 31, 2023. Based on this collateral and the Company’s holdings of FHLB stock, the Company was eligible to borrow up to an additional total of $197.9 million at September 30, 2024.

The following table sets forth the contractual maturities and weighted average interest rates of the Company’s fixed rate FHLB advances for each of the next five years (in thousands):


	Balance at September 30,
	2024
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	18,000	5.08	%

2025, rates from 0.56% to 0.59%		7,080	0.58	%
2026, rates from 4.29% to 4.98%		40,475	4.50	%
2027, rates from 4.13% to 4.74%		40,250	4.32	%
2028, rates from 3.99% to 4.58%		20,000	4.18	%
Total term advances		107,805	4.11	%
Total FHLB advances	$	125,805	4.25	%


	Balance at December 31,
	2023
			Weighted
Contractual Maturity	Amount		Average Rate
Overnight	$	—	—	%

2024, rates from 0.39% to 2.53%		18,860	0.98	%
2025, rates from 0.56% to 0.59%		7,080	0.58	%
2026, rates from 4.29% to 4.98%		40,475	4.50	%
2027, rates from 4.13% to 4.74%		40,250	4.32	%
2028, rates from 3.99% to 4.58%		20,000	4.18	%
Total term advances		126,665	3.65	%
Total FHLB advances	$	126,665	3.65	%

Federal Reserve Borrowings

At September 30, 2024 and December 31, 2023, the Company’s borrowings from the Federal Reserve’s Paycheck Protection Program Liquidity Facility (“PPPLF”) were $0 and $2.3 million, respectively. The borrowings had a rate of 0.35% and the maturity date equaled the maturity date of the underlying PPP loan pledged to secure the extension of credit.

The Company also pledges residential and commercial loans to the Federal Reserve Bank of New York’s Discount Window. Based on this collateral, the Company was eligible to borrow up to $263.7 million as of September 30, 2024. The Company did not have any outstanding borrowings against this line as of September 30, 2024.

Correspondent Bank Borrowings

At September 30, 2024, approximately $92 million in unsecured lines of credit extended by correspondent banks were available to be utilized for short-term funding purposes. No borrowings were outstanding under lines of credit with correspondent banks at September 30, 2024 and December 31, 2023.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 2: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 6
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481544/470-10-50-6

Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(3)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(2)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 405
-SubTopic 40
-Name Accounting Standards Codification
-Section 50
-Paragraph 1
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147477092/405-40-50-1

Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (h)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(c))
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 470
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org/470/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 835
-SubTopic 30
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482925/835-30-45-2

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (g)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1B
-Subparagraph (i)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1B

Reference 15: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 16: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 17: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1C
-Subparagraph (c)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1C

Reference 18: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1E
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1E

Reference 19: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 20: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

Reference 21: http://www.xbrl.org/2003/role/disclosureRef
-Topic 470
-SubTopic 20
-Name Accounting Standards Codification
-Section 50
-Paragraph 1I
-Subparagraph (d)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147481139/470-20-50-1I

+ Details

EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2024

EARNINGS PER SHARE

EARNINGS PER SHARE

2. EARNINGS PER SHARE

The two-class method is used in the calculation of basic and diluted earnings per share (“EPS”). Under the two-class method, earnings available to common shareholders for the period are allocated between common shareholders and participating securities according to dividends declared and participation rights in undistributed earnings. The restricted stock awards granted by the Company contain non-forfeitable rights to dividends and therefore are considered participating securities.

The Company’s basic and diluted EPS calculations for the three and nine months ended September 30, 2024 and 2023 are as follows. There were no stock options that were antidilutive for the three and nine months ended September 30, 2024 and 2023.


	Three Months Ended September 30,				Nine Months Ended September 30,
(in thousands, except share and per share data)	2024		2023		2024		2023

Net income available to common stockholders	$	3,539	$	3,523	$	8,444	$	9,826
Less: Dividends paid and earnings allocated to participating securities		(109)		(115)		(264)		(355)
Income attributable to common stock	$	3,430	$	3,408	$	8,180	$	9,471
Weighted average common shares outstanding, including participating securities		7,411,064		7,327,345		7,395,758		7,327,836
Less: Weighted average participating securities		(242,214)		(253,746)		(248,116)		(276,251)
Weighted average common shares outstanding		7,168,850		7,073,599		7,147,642		7,051,585
Basic EPS	$	0.48	$	0.48	$	1.14	$	1.34

Income attributable to common stock	$	3,430	$	3,408	$	8,180	$	9,471
Weighted average common shares outstanding		7,168,850		7,073,599		7,147,642		7,051,585
Weighted average common equivalent shares outstanding		25,004		80,138		24,657		80,118
Weighted average common and equivalent shares outstanding		7,193,854		7,153,737		7,172,299		7,131,703
Diluted EPS	$	0.48	$	0.48	$	1.14	$	1.33

LOANS - Aging of Recorded Investment in Past Due and Non-accrual Loans by Portfolio Segment (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	$ 2,005,813	$ 1,957,199
Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	31,114	28,010
30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	14,663	7,929
60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	3,320	6,127
Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	13,131	13,954
Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	1,974,699	1,929,189
Residential real estate
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	745,862	714,843
Residential real estate \| Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	16,421	11,237
Residential real estate \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	10,046	4,508
Residential real estate \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	2,436	2,360
Residential real estate \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	3,939	4,369
Residential real estate \| Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	729,441	703,606
Multi-family
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	557,634	572,849
Multi-family \| Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	1,804	3,374
Multi-family \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Multi-family \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Multi-family \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	1,804	3,374
Multi-family \| Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	555,830	569,475
Commercial real estate
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	520,427	548,012
Commercial real estate \| Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	6,072	11,878
Commercial real estate \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	3,548	2,666
Commercial real estate \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	3,212
Commercial real estate \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	2,524	6,000
Commercial real estate \| Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	514,355	536,134
Commercial and industrial
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	171,899	107,912
Commercial and industrial \| Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	6,817	1,521
Commercial and industrial \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	1,069	755
Commercial and industrial \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	884	555
Commercial and industrial \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	4,864	211
Commercial and industrial \| Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	165,082	106,391
Construction and land development
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	9,521	13,170
Construction and land development \| Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Construction and land development \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Construction and land development \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Construction and land development \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Construction and land development \| Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	9,521	13,170
Consumer
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	470	413
Consumer \| Total Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Consumer \| 30-59 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Consumer \| 60-89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Consumer \| Greater than 89 Days Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	0	0
Consumer \| Loans Not Past Due
Financing Receivable, Excluding Accrued Interest, Nonaccrual [Abstract]
Loans	$ 470	$ 413